Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Oct. 28, 2019 | |
Document And Entity Information | ||
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2019 | |
Entity Registrant Name | PC CONNECTION INC | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 26,316,263 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0001050377 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Current Assets: | ||
Cash and cash equivalents | $ 98,489 | $ 91,703 |
Accounts receivable, net | 478,907 | 447,698 |
Inventories, net | 126,078 | 119,195 |
Income taxes receivable | 922 | |
Prepaid expenses and other current assets | 6,881 | 9,661 |
Total current assets | 710,355 | 669,179 |
Property and equipment, net | 62,336 | 51,799 |
Right-of-use assets, net | 14,850 | |
Goodwill | 73,602 | 73,602 |
Intangible assets, net | 8,613 | 9,564 |
Other assets | 892 | 1,211 |
Total Assets | 870,648 | 805,355 |
Current Liabilities: | ||
Accounts payable | 197,736 | 201,640 |
Accrued payroll | 23,393 | 24,319 |
Accrued expenses and other liabilities | 36,341 | 33,840 |
Total current liabilities | 257,470 | 259,799 |
Deferred income taxes | 17,194 | 17,184 |
Operating lease liability | 11,386 | |
Other liabilities | 1,454 | 2,469 |
Total Liabilities | 287,504 | 279,452 |
Stockholders' Equity: | ||
Common stock | 288 | 288 |
Additional paid-in capital | 117,301 | 115,842 |
Retained earnings | 501,155 | 441,010 |
Treasury stock, at cost | (35,600) | (31,237) |
Total Stockholders' Equity | 583,144 | 525,903 |
Total Liabilities and Stockholders' Equity | $ 870,648 | $ 805,355 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Condensed Consolidated Statements of Income | ||||
Net sales | $ 729,410 | $ 658,504 | $ 2,103,407 | $ 1,989,969 |
Cost of sales | 610,547 | 558,060 | 1,768,210 | 1,685,685 |
Gross profit | 118,863 | 100,444 | 335,197 | 304,284 |
Selling, general and administrative expenses | 86,226 | 81,494 | 252,125 | 244,915 |
Restructuring and other charges | 703 | |||
Income from operations | 32,637 | 18,950 | 82,369 | 59,369 |
Interest income, net | 62 | 114 | 444 | 412 |
Income before taxes | 32,699 | 19,064 | 82,813 | 59,781 |
Income tax provision | (8,949) | (5,298) | (22,668) | (16,489) |
Net income | $ 23,750 | $ 13,766 | $ 60,145 | $ 43,292 |
Earnings per common share: | ||||
Basic | $ 0.90 | $ 0.52 | $ 2.28 | $ 1.62 |
Diluted | $ 0.90 | $ 0.51 | $ 2.27 | $ 1.61 |
Shares used in computation of earnings per common share: | ||||
Basic | 26,323 | 26,716 | 26,339 | 26,745 |
Diluted | 26,479 | 26,902 | 26,496 | 26,883 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Common Stock | Additional Paid-In Capital | Retained Earnings | Treasury Stock | Total |
Balance at Dec. 31, 2017 | $ 287 | $ 114,154 | $ 383,673 | $ (15,862) | $ 482,252 |
Balance (in shares) at Dec. 31, 2017 | 28,709 | (1,856) | |||
Stock-based compensation expense | 737 | 737 | |||
Restricted stock units vested (in shares) | 28 | ||||
Issuance of common stock under Employee Stock Purchase Plan | 605 | 605 | |||
Issuance of common stock under Employee Stock Purchase Plan (in shares) | 19 | ||||
Shares withheld for taxes paid on stock awards | (457) | (457) | |||
Repurchases of common stock for treasury | $ (4,384) | (4,384) | |||
Repurchase of common stock for treasury (in shares) | (170) | ||||
Net income | 43,292 | 43,292 | |||
Balance at Sep. 30, 2018 | $ 287 | 115,039 | 428,162 | $ (20,246) | 523,242 |
Balance (in shares) at Sep. 30, 2018 | 28,756 | (2,026) | |||
Balance at Jun. 30, 2018 | $ 287 | 115,223 | 414,396 | $ (20,246) | 509,660 |
Balance (in shares) at Jun. 30, 2018 | 28,728 | (2,026) | |||
Stock-based compensation expense | 273 | 273 | |||
Restricted stock units vested (in shares) | 28 | ||||
Shares withheld for taxes paid on stock awards | (457) | (457) | |||
Net income | 13,766 | 13,766 | |||
Balance at Sep. 30, 2018 | $ 287 | 115,039 | 428,162 | $ (20,246) | 523,242 |
Balance (in shares) at Sep. 30, 2018 | 28,756 | (2,026) | |||
Cumulative effect of adoption of ASC 606 | 1,197 | 1,197 | |||
Balance at Dec. 31, 2018 | $ 288 | 115,842 | 441,010 | $ (31,237) | 525,903 |
Balance (in shares) at Dec. 31, 2018 | 28,787 | (2,391) | |||
Stock-based compensation expense | 1,259 | 1,259 | |||
Restricted stock units vested (in shares) | 34 | ||||
Issuance of common stock under Employee Stock Purchase Plan | 609 | 609 | |||
Issuance of common stock under Employee Stock Purchase Plan (in shares) | 19 | ||||
Shares withheld for taxes paid on stock awards | (409) | (409) | |||
Repurchases of common stock for treasury | $ (4,363) | (4,363) | |||
Repurchase of common stock for treasury (in shares) | (132) | ||||
Net income | 60,145 | 60,145 | |||
Balance at Sep. 30, 2019 | $ 288 | 117,301 | 501,155 | $ (35,600) | 583,144 |
Balance (in shares) at Sep. 30, 2019 | 28,840 | (2,523) | |||
Balance at Jun. 30, 2019 | $ 288 | 117,212 | 477,405 | $ (34,738) | 560,167 |
Balance (in shares) at Jun. 30, 2019 | 28,818 | (2,500) | |||
Stock-based compensation expense | 426 | 426 | |||
Restricted stock units vested (in shares) | 22 | ||||
Shares withheld for taxes paid on stock awards | (337) | (337) | |||
Repurchases of common stock for treasury | $ (862) | (862) | |||
Repurchase of common stock for treasury (in shares) | (23) | ||||
Net income | 23,750 | 23,750 | |||
Balance at Sep. 30, 2019 | $ 288 | $ 117,301 | $ 501,155 | $ (35,600) | $ 583,144 |
Balance (in shares) at Sep. 30, 2019 | 28,840 | (2,523) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash Flows provided by Operating Activities: | ||
Net income | $ 60,145 | $ 43,292 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 10,184 | 10,362 |
Provision for doubtful accounts | 181 | 1,428 |
Stock-based compensation expense | 1,259 | 737 |
Deferred income taxes | 10 | 429 |
Loss on disposal of fixed assets | 114 | 51 |
Changes in assets and liabilities: | ||
Accounts receivable | (31,390) | 63,881 |
Inventories | (6,883) | (9,399) |
Prepaid expenses, income tax receivables and other current assets | 3,702 | 812 |
Other non-current assets | 319 | 283 |
Accounts payable | (3,167) | (29,361) |
Accrued expenses and other liabilities | 5,548 | (1,262) |
Net cash provided by operating activities | 40,022 | 81,253 |
Cash Flows used in Investing Activities: | ||
Purchases of equipment | (20,621) | (15,641) |
Net cash used in investing activities | (20,621) | (15,641) |
Cash Flows used in Financing Activities: | ||
Proceeds from short-term borrowings | 859 | |
Repayment of short-term borrowings | (859) | |
Purchase of treasury shares | (4,363) | (4,384) |
Dividend payment | (8,452) | (9,123) |
Issuance of stock under Employee Stock Purchase Plan | 609 | 605 |
Payment of payroll taxes on stock-based compensation through shares withheld | (409) | (457) |
Net cash used in financing activities | (12,615) | (13,359) |
(Decrease) increase in cash and cash equivalents | 6,786 | 52,253 |
Cash and cash equivalents, beginning of year | 91,703 | 49,990 |
Cash and cash equivalents, end of year | 98,489 | 102,243 |
Non-cash Investing and Financing Activities: | ||
Accrued capital expenditures | 1,684 | 1,055 |
Supplemental Cash Flow Information: | ||
Income taxes paid | $ 18,972 | $ 15,134 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2019 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | Note 1–Basis of Presentation The accompanying unaudited condensed consolidated financial statements of PC Connection, Inc. and its subsidiaries (the “Company,” “we,” “us,” or “our”) have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission regarding interim financial reporting and in accordance with accounting principles generally accepted in the United States of America. Such principles were applied on a basis consistent with the accounting policies described in our Annual Report on Form 10-K for the year ended December 31, 2018, filed with the Securities and Exchange Commission (the “SEC”), other than the adoption of Accounting Standards Update (“ASU”) No. 2016-02, Leases (“ASC 842”) using a modified retrospective approach as of January 1, 2019, as discussed below. The accompanying condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements contained in our Annual Report on Form 10-K. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of the results of operations for the interim periods reported and of the Company’s financial condition as of the date of the interim balance sheet. The Company considers events or transactions that occur after the balance sheet date but before the financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. Subsequent events have been evaluated through the date of issuance of these financial statements. The operating results for the three and nine months ended September 30, 2019 may not be indicative of the results expected for any succeeding quarter or the entire year ending December 31, 2019. Use of Estimates in the Preparation of Financial Statements The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions. These estimates and assumptions affect the amounts reported in the accompanying condensed consolidated financial statements. Actual results could differ from those estimates. Restructuring and other charges Nine months ended September 30, 2019 Employee separations $ 553 Lease termination costs 150 Total restructuring and other charges $ 703 The restructuring and other charges were recorded in the first quarter of 2019 and were related to a reduction in workforce in our Headquarters/Other group and included cash severance payments and other related benefits. These costs will be paid within a year of termination and any unpaid balances are included in accrued expenses at September 30, 2019. Also included are exit costs incurred associated with the closing of one of our office facilities. All planned restructuring and other charges were incurred as of March 31, 2019 and the Company has no ongoing restructuring plans. Adoption of Recently Issued Accounting Standards In February 2016, the Financial Accounting Standards Board, or the FASB, issued ASC 842 - Leases , which amended the accounting standards for leases. The core principle of the guidance is that an entity should establish a right-of-use (ROU) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than twelve months. The Company adopted ASC 842 effective January 1, 2019 using a modified retrospective transition approach to each lease that existed as of the adoption date and any leases entered into after that date. The Company elected the package of practical expedients which permits us to not reassess (1) whether any expired or existing contracts are or contain leases, (2) the lease classification of any expired or existing leases, and (3) any initial direct costs for any existing leases as of the effective date. The Company also elected the hindsight practical expedient, which allows it to use hindsight in determining the lease term. The adoption did not result in a cumulative adjustment to opening equity. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. In assessing the impact of the adoption, the Company elected to apply the short-team lease exception to any leases with contractual obligations of one year or less. These leases will continue to be treated as operating leases in accordance with the new accounting standard. Consequently, the adoption resulted in the capitalization of a number of the Company’s office leases as of January 1, 2019, for which it recognized a lease liability of $18,835, which was based on the present value of the future payments for these leases. The Company recorded a corresponding right-of-use asset of $18,723, which was adjusted for $114 of remaining unamortized lease incentives as of December 31, 2018. Only those components that were considered integral to the right to use an underlying asset were considered lease components when determining the amounts to capitalize. In accordance with ASC 842, the discount rates used in the present value calculations for each lease should be the rates implicit in the lease, if readily available. Since none of the lease agreements contain explicit discount rates, the Company utilized estimated rates that it would have incurred to borrow, over a similar term, the funds necessary to purchase the respective leased asset with cash. The remaining contractual term for these leases as of January 1, 2019 ranged from 20 to 197 months. Options to renew were considered in determining the present value of the future lease payments in the event the Company believed it was reasonably certain it will assert its respective options to renew. The Company leases certain facilities from a related party, which is a company affiliated with us through common ownership. Included in the right-of-use asset as of September 30, 2019 was $5,998 and a corresponding lease liability of $5,021 associated with related party leases. During the third quarter of 2019, the Company amended the terms of one of its existing leases. The amendment was treated as a lease modification and was not accounted for as a separate lease. In accordance with ASC 842, the Company re-measured the right-of-use asset and the lease liability as of the modification date and also re-assessed the reasonably certain holding period of the lease. As of September 30, 2019, the Company had no leases that were classified as financing leases and there were no additional operating or financing leases that have not yet commenced. Refer to the following table for quantitative information related to the Company’s leases: Three months ended September 30, 2019 Nine months ended September 30, 2019 Related Parties Others Total Related Parties Others Total Lease Cost Capitalized operating lease cost $ 379 $ 773 $ 1,152 $ 1,137 $ 2,396 $ 3,533 Short-term lease cost 41 2 43 123 6 129 Total lease cost $ 420 $ 775 $ 1,195 $ 1,260 $ 2,402 $ 3,662 Other Information Cash paid for amounts included in the measurement of lease liabilities and capitalized operating leases: Operating cash flows $ 379 $ 832 $ 1,211 $ 1,137 $ 2,585 $ 3,722 Weighted-average remaining lease term (in years): Capitalized operating leases 4.11 6.78 5.92 Weighted-average discount rate: Capitalized operating leases As of September 30, 2019, future lease payments over the remaining term of capitalized operating leases were as follows: For the Years Ended December 31, Related Parties Others Total 2019, excluding the nine months ended September 30, 2019 $ 379 $ 835 $ 1,214 2020 1,385 3,382 4,767 2021 1,253 2,482 3,735 2022 1,253 1,484 2,737 2023 1,149 1,034 2,183 2024 — 1,043 1,043 Thereafter — 1,460 1,460 $ 5,419 $ 11,720 $ 17,139 Imputed interest (1,426) Lease liability balance at September 30, 2019 $ 15,713 Future aggregate minimum annual lease payments as of December 31, 2018 reported in our 2018 Form 10-K under the previous lease accounting standard were as follows: For the Years Ended December 31, Related Parties Others Total 2019 $ 1,516 $ 3,519 $ 5,035 2020 1,407 3,386 4,793 2021 1,253 2,466 3,719 2022 1,253 1,490 2,743 2023 1,149 820 1,969 2024 and thereafter — 1,395 1,395 $ 6,578 $ 13,076 $ 19,654 As of September 30, 2019, the ROU asset had a net balance of $14,850. The long-term lease liability was $11,386 and the short-term lease liability, which is included in accrued expenses and other liabilities in the consolidated balance sheets, was $4,327. Recently Issued Financial Accounting Standards In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment , which simplifies the accounting for goodwill impairments by eliminating step two from the goodwill impairment test. Instead, if the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. ASU 2017-04 also clarifies the requirements for excluding and allocating foreign currency translation adjustments to reporting units related to an entity's testing of reporting units for goodwill impairment and clarifies that an entity should consider income tax effects from any tax-deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. The new standard is effective for fiscal years beginning January 1, 2020 for both interim and annual reporting periods. The Company expects to adopt this new standard in 2019 when it performs its annual goodwill impairment test in the fourth quarter. The Company does not expect the adoption of this ASU to have a material impact on its consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses, which adds an impairment model for financial instruments, including trade receivables, that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes as an allowance its estimate of lifetime expected losses, which is expected to result in more timely recognition of such losses. The new standard is effective for fiscal years beginning after December 15, 2019 for both interim and annual reporting periods. The Company has evaluated the requirements of this ASU and determined that the potential exposure is limited to the impact this standard may have on its trade receivables. The Company does not currently have any other financial instruments that would be affected by this standard. Customers are evaluated for their credit worthiness at the time of contract inception. Based on the results of the assessment, the Company will extend credit under its standard payment terms or may request alternative early payment actions. In addition, the Company analyzes its aged receivables for collectability at least quarterly, and if necessary, records a reserve against those receivables it determines may not collectable. As such, the Company does not expect the adoption of this ASU to have a material impact on its consolidated financial statements. |
REVENUE
REVENUE | 9 Months Ended |
Sep. 30, 2019 | |
Revenue | |
Revenue | Note 2–Revenue We disaggregate revenue from our arrangements with customers by type of products and services, as we believe this method best depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. The following tables represent a disaggregation of revenue from arrangements with customers for the three months ended September 30, 2019 and 2018, along with the reportable segment for each category. Three Months Ended September 30, 2019 Business Enterprise Public Sector Total Notebooks/Mobility $ 79,287 $ 77,214 $ 63,154 $ 219,655 Desktops 34,806 36,821 20,499 92,126 Software 36,879 28,439 13,205 78,523 Servers/Storage 26,352 16,374 16,576 59,302 Net/Com Products 25,200 11,666 15,695 52,561 Displays and Sound 23,224 29,641 17,669 70,534 Accessories 26,306 46,546 14,545 87,397 Other Hardware/Services 21,702 31,594 16,016 69,312 Total net sales $ 273,756 $ 278,295 $ 177,359 $ 729,410 Three Months Ended September 30, 2018 (1) Business Enterprise Public Sector Total Notebooks/Mobility $ 68,822 $ 63,926 $ 50,079 $ 182,827 Desktops 25,828 30,075 13,112 69,015 Software 31,578 25,718 15,541 72,837 Servers/Storage 26,386 21,424 13,115 60,925 Net/Com Products 27,380 16,601 12,745 56,726 Displays and Sound 23,318 23,834 15,748 62,900 Accessories 22,313 52,967 12,516 87,796 Other Hardware/Services 19,247 30,932 15,299 65,478 Total net sales $ 244,872 $ 265,477 $ 148,155 $ 658,504 (1) Product categories were separated into additional categories in 2019. Certain prior-year balances have been classified to conform with the new presentation. The following table represents a disaggregation of revenue from arrangements with customers for the nine months ended September 30, 2019 and 2018, along with the reportable segment for each category. Nine Months Ended September 30, 2019 Business Enterprise Public Sector Total Notebooks/Mobility $ 240,644 $ 240,621 $ 125,220 $ 606,485 Desktops 96,377 112,067 50,074 258,518 Software 110,826 91,954 43,362 246,142 Servers/Storage 81,452 48,536 49,149 179,137 Net/Com Products 70,806 38,866 40,918 150,590 Displays and Sound 64,422 82,812 41,839 189,073 Accessories 72,036 162,601 35,112 269,749 Other Hardware/Services 61,177 94,512 48,024 203,713 Total net sales $ 797,740 $ 871,969 $ 433,698 $ 2,103,407 Nine Months Ended September 30, 2018 (1) Business Enterprise Public Sector Total Notebooks/Mobility $ 222,550 $ 195,909 $ 109,238 $ 527,697 Desktops 82,518 91,307 41,948 215,773 Software 104,377 91,522 33,447 229,346 Servers/Storage 85,190 70,262 46,753 202,205 Net/Com Products 83,546 49,093 36,618 169,257 Displays and Sound 67,193 80,288 41,846 189,327 Accessories 72,385 143,532 34,095 250,012 Other Hardware/Services 60,433 101,873 44,046 206,352 Total net sales $ 778,192 $ 823,786 $ 387,991 $ 1,989,969 (1) Product categories were separated into additional categories in 2019. Certain prior-year balances have been classified to conform with the new presentation. Contract Balances The following table provides information about contract liability from arrangements with customers as of September 30, 2019 and December 31, 2018. September 30, 2019 December 31, 2018 Contract liability, which is included in "Accrued expenses and other liabilities" $ 3,325 $ 2,679 Changes in the contract liability balances during the three and nine months ended September 30, 2019 are as follows (in thousands): 2019 2018 Balances at June 30, $ 4,724 $ 8,433 Cash received in advance and not recognized as revenue 1,701 1,024 Amounts recognized as revenue as performance obligations satisfied (3,100) (6,828) Balances at September 30, $ 3,325 $ 2,629 2019 2018 Balances at December 31, $ 2,679 $ 2,914 Cash received in advance and not recognized as revenue 8,868 9,520 Amounts recognized as revenue as performance obligations satisfied (8,222) (9,805) Balances at September 30, $ 3,325 $ 2,629 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share | |
Earnings Per Share | Note 3–Earnings Per Share Basic earnings per common share is computed using the weighted average number of shares outstanding. Diluted earnings per share is computed using the weighted average number of shares outstanding adjusted for the incremental shares attributable to non-vested stock units and stock options outstanding, if dilutive. The following table sets forth the computation of basic and diluted earnings per share: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Numerator: Net income $ 23,750 $ 13,766 $ 60,145 $ 43,292 Denominator: Denominator for basic earnings per share 26,323 26,716 26,339 26,745 Dilutive effect of unvested employee stock awards 156 186 157 138 Denominator for diluted earnings per share 26,479 26,902 26,496 26,883 Earnings per share: Basic $ 0.90 $ 0.52 $ 2.28 $ 1.62 Diluted $ 0.90 $ 0.51 $ 2.27 $ 1.61 For the three and nine months ended September 30, 2019 and 2018, we had no outstanding non-vested stock units that were excluded from the computation of diluted earnings per share because including them would have had an anti-dilutive effect. |
SEGMENT AND RELATED DISCLOSURES
SEGMENT AND RELATED DISCLOSURES | 9 Months Ended |
Sep. 30, 2019 | |
Segment and Related Disclosures | |
Segment and Related Disclosures | Note 4–Segment and Related Disclosures The internal reporting structure used by our chief operating decision maker (“CODM”) to assess performance and allocate resources determines the basis for our reportable operating segments. Our CODM is our Chief Executive Officer, and he evaluates operations and allocates resources based on a measure of operating income. Our operations are organized under three reportable segments—the Business Solutions segment, which serves primarily small- and medium-sized businesses; the Enterprise Solutions segment, which serves primarily medium-to-large corporations; and the Public Sector Solutions segment, which serves primarily federal, state, and local governmental and educational institutions. In addition, the Headquarters/Other group provides services in areas such as finance, human resources, information technology, marketing, and product management. Most of the operating costs associated with the Headquarters/Other group functions are charged to the operating segments based on their estimated usage of the underlying functions. We report these charges to the operating segments as “Allocations.” Certain headquarters costs relating to executive oversight and other fiduciary functions that are not allocated to the operating segments are included under the heading of Headquarters/Other in the tables below. Segment information applicable to our reportable operating segments for the three and nine months ended September 30, 2019 and 2018 is shown below: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Net sales: Business Solutions $ 273,756 $ 244,872 $ 797,740 $ 778,192 Enterprise Solutions 278,295 265,477 871,969 823,786 Public Sector Solutions 177,359 148,155 433,698 387,991 Total net sales $ 729,410 $ 658,504 $ 2,103,407 $ 1,989,969 Operating income (loss): Business Solutions $ 13,533 $ 8,173 $ 38,509 $ 28,303 Enterprise Solutions 16,346 13,629 50,927 43,598 Public Sector Solutions 7,082 528 4,677 (2,083) Headquarters/Other (4,324) (3,380) (11,744) (10,449) Total operating income 32,637 18,950 82,369 59,369 Interest income, net 62 114 444 412 Income before taxes $ 32,699 $ 19,064 $ 82,813 $ 59,781 Selected operating expense: Depreciation and amortization: Business Solutions $ 149 $ 153 $ 447 $ 481 Enterprise Solutions 613 608 1,858 1,653 Public Sector Solutions 22 25 68 91 Headquarters/Other 2,323 2,848 7,811 8,137 Total depreciation and amortization $ 3,107 $ 3,634 $ 10,184 $ 10,362 Total assets: Business Solutions $ 300,360 $ 263,678 Enterprise Solutions 488,867 423,125 Public Sector Solutions 90,437 69,994 Headquarters/Other (9,016) (6,570) Total assets $ 870,648 $ 750,227 The assets of our three operating segments presented above consist primarily of accounts receivable, net intercompany receivable, goodwill, and other intangibles. Assets reported under the Headquarters/Other group are managed by corporate headquarters, including cash, inventory, property and equipment, right-of-use assets, and intercompany balance, net. As of September 30, 2019 and 2018, total assets for the Headquarters/Other group are presented net of intercompany balance eliminations of $36,077 and $22,989, respectively. Our capital expenditures consist largely of IT hardware and software purchased to maintain or upgrade our management information systems. These information systems serve all of our segments, to varying degrees, and accordingly, our CODM does not evaluate capital expenditures on a segment basis. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies | |
Commitments And Contingencies | Note 5–Commitments and Contingencies We are subject to various legal proceedings and claims, including patent infringement claims, which have arisen during the ordinary course of business. In the opinion of management, the outcome of such matters is not expected to have a material effect on our financial position, results of operations, and/or cash flows. We are subject to audits by states on sales and income taxes, employment matters, and other assessments. Additional liabilities for these and other audits could be assessed, and such outcomes could have a material, negative impact on our financial position, results of operations, and/or cash flows. |
BANK CREDIT FACILITY
BANK CREDIT FACILITY | 9 Months Ended |
Sep. 30, 2019 | |
Bank Credit Facility | |
Bank Credit Facility | Note 6–Bank Credit Facility We have a $50,000 credit facility collateralized by our account receivables that expires February 10, 2022. This facility can be increased, at our option, to $80,000 for permitted acquisitions or other uses authorized by the lender on substantially the same terms. Amounts outstanding under this facility bear interest at the one-month London Interbank Offered Rate (“LIBOR”) (2.02% at September 30, 2019), plus a spread based on our funded debt ratio, or in the absence of LIBOR, the prime rate (5.00% at September 30, 2019). The credit facility includes various customary financial ratios and operating covenants, including minimum net worth and maximum funded debt ratio requirements, and default acceleration provisions. The credit facility does not include restrictions on future dividend payments. Funded debt ratio is the ratio of average outstanding advances under the credit facility to Adjusted EBITDA (Earnings Before Interest Expense, Taxes, Depreciation, Amortization, and Special Charges). The maximum allowable funded debt ratio under the agreement is 2.0 to 1.0. Decreases in our consolidated Adjusted EBITDA could limit our potential borrowing capacity under the credit facility. We had no outstanding bank borrowings at September 30, 2019 or 2018, and accordingly, the entire $50,000 facility was available for borrowings under the credit facility. |
BASIS OF PRESENTATION (Tables)
BASIS OF PRESENTATION (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Summary of Significant Accounting Policies | |
Schedule of restructuring and other charges | Nine months ended September 30, 2019 Employee separations $ 553 Lease termination costs 150 Total restructuring and other charges $ 703 |
Schedule of lease cost | Three months ended September 30, 2019 Nine months ended September 30, 2019 Related Parties Others Total Related Parties Others Total Lease Cost Capitalized operating lease cost $ 379 $ 773 $ 1,152 $ 1,137 $ 2,396 $ 3,533 Short-term lease cost 41 2 43 123 6 129 Total lease cost $ 420 $ 775 $ 1,195 $ 1,260 $ 2,402 $ 3,662 Other Information Cash paid for amounts included in the measurement of lease liabilities and capitalized operating leases: Operating cash flows $ 379 $ 832 $ 1,211 $ 1,137 $ 2,585 $ 3,722 Weighted-average remaining lease term (in years): Capitalized operating leases 4.11 6.78 5.92 Weighted-average discount rate: Capitalized operating leases |
Schedule of future lease payments on capitalized operating leases | As of September 30, 2019, future lease payments over the remaining term of capitalized operating leases were as follows: For the Years Ended December 31, Related Parties Others Total 2019, excluding the nine months ended September 30, 2019 $ 379 $ 835 $ 1,214 2020 1,385 3,382 4,767 2021 1,253 2,482 3,735 2022 1,253 1,484 2,737 2023 1,149 1,034 2,183 2024 — 1,043 1,043 Thereafter — 1,460 1,460 $ 5,419 $ 11,720 $ 17,139 Imputed interest (1,426) Lease liability balance at September 30, 2019 $ 15,713 Future aggregate minimum annual lease payments as of December 31, 2018 reported in our 2018 Form 10-K under the previous lease accounting standard were as follows: For the Years Ended December 31, Related Parties Others Total 2019 $ 1,516 $ 3,519 $ 5,035 2020 1,407 3,386 4,793 2021 1,253 2,466 3,719 2022 1,253 1,490 2,743 2023 1,149 820 1,969 2024 and thereafter — 1,395 1,395 $ 6,578 $ 13,076 $ 19,654 |
REVENUE (Tables)
REVENUE (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Revenue | |
Schedule of disaggregation of revenue from contracts with customers | The following tables represent a disaggregation of revenue from arrangements with customers for the three months ended September 30, 2019 and 2018, along with the reportable segment for each category. Three Months Ended September 30, 2019 Business Enterprise Public Sector Total Notebooks/Mobility $ 79,287 $ 77,214 $ 63,154 $ 219,655 Desktops 34,806 36,821 20,499 92,126 Software 36,879 28,439 13,205 78,523 Servers/Storage 26,352 16,374 16,576 59,302 Net/Com Products 25,200 11,666 15,695 52,561 Displays and Sound 23,224 29,641 17,669 70,534 Accessories 26,306 46,546 14,545 87,397 Other Hardware/Services 21,702 31,594 16,016 69,312 Total net sales $ 273,756 $ 278,295 $ 177,359 $ 729,410 Three Months Ended September 30, 2018 (1) Business Enterprise Public Sector Total Notebooks/Mobility $ 68,822 $ 63,926 $ 50,079 $ 182,827 Desktops 25,828 30,075 13,112 69,015 Software 31,578 25,718 15,541 72,837 Servers/Storage 26,386 21,424 13,115 60,925 Net/Com Products 27,380 16,601 12,745 56,726 Displays and Sound 23,318 23,834 15,748 62,900 Accessories 22,313 52,967 12,516 87,796 Other Hardware/Services 19,247 30,932 15,299 65,478 Total net sales $ 244,872 $ 265,477 $ 148,155 $ 658,504 (1) Product categories were separated into additional categories in 2019. Certain prior-year balances have been classified to conform with the new presentation. The following table represents a disaggregation of revenue from arrangements with customers for the nine months ended September 30, 2019 and 2018, along with the reportable segment for each category. Nine Months Ended September 30, 2019 Business Enterprise Public Sector Total Notebooks/Mobility $ 240,644 $ 240,621 $ 125,220 $ 606,485 Desktops 96,377 112,067 50,074 258,518 Software 110,826 91,954 43,362 246,142 Servers/Storage 81,452 48,536 49,149 179,137 Net/Com Products 70,806 38,866 40,918 150,590 Displays and Sound 64,422 82,812 41,839 189,073 Accessories 72,036 162,601 35,112 269,749 Other Hardware/Services 61,177 94,512 48,024 203,713 Total net sales $ 797,740 $ 871,969 $ 433,698 $ 2,103,407 Nine Months Ended September 30, 2018 (1) Business Enterprise Public Sector Total Notebooks/Mobility $ 222,550 $ 195,909 $ 109,238 $ 527,697 Desktops 82,518 91,307 41,948 215,773 Software 104,377 91,522 33,447 229,346 Servers/Storage 85,190 70,262 46,753 202,205 Net/Com Products 83,546 49,093 36,618 169,257 Displays and Sound 67,193 80,288 41,846 189,327 Accessories 72,385 143,532 34,095 250,012 Other Hardware/Services 60,433 101,873 44,046 206,352 Total net sales $ 778,192 $ 823,786 $ 387,991 $ 1,989,969 Product categories were separated into additional categories in 2019. Certain prior-year balances have been classified to conform with the new presentation. |
Schedule of information on contract liability | September 30, 2019 December 31, 2018 Contract liability, which is included in "Accrued expenses and other liabilities" $ 3,325 $ 2,679 Changes in the contract liability balances during the three and nine months ended September 30, 2019 are as follows (in thousands): 2019 2018 Balances at June 30, $ 4,724 $ 8,433 Cash received in advance and not recognized as revenue 1,701 1,024 Amounts recognized as revenue as performance obligations satisfied (3,100) (6,828) Balances at September 30, $ 3,325 $ 2,629 2019 2018 Balances at December 31, $ 2,679 $ 2,914 Cash received in advance and not recognized as revenue 8,868 9,520 Amounts recognized as revenue as performance obligations satisfied (8,222) (9,805) Balances at September 30, $ 3,325 $ 2,629 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share | |
Computation of basic and diluted earnings per share | The following table sets forth the computation of basic and diluted earnings per share: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Numerator: Net income $ 23,750 $ 13,766 $ 60,145 $ 43,292 Denominator: Denominator for basic earnings per share 26,323 26,716 26,339 26,745 Dilutive effect of unvested employee stock awards 156 186 157 138 Denominator for diluted earnings per share 26,479 26,902 26,496 26,883 Earnings per share: Basic $ 0.90 $ 0.52 $ 2.28 $ 1.62 Diluted $ 0.90 $ 0.51 $ 2.27 $ 1.61 |
SEGMENT AND RELATED DISCLOSUR_2
SEGMENT AND RELATED DISCLOSURES (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Segment and Related Disclosures | |
Segment Information Applicable to Reportable Operating Segments | Segment information applicable to our reportable operating segments for the three and nine months ended September 30, 2019 and 2018 is shown below: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Net sales: Business Solutions $ 273,756 $ 244,872 $ 797,740 $ 778,192 Enterprise Solutions 278,295 265,477 871,969 823,786 Public Sector Solutions 177,359 148,155 433,698 387,991 Total net sales $ 729,410 $ 658,504 $ 2,103,407 $ 1,989,969 Operating income (loss): Business Solutions $ 13,533 $ 8,173 $ 38,509 $ 28,303 Enterprise Solutions 16,346 13,629 50,927 43,598 Public Sector Solutions 7,082 528 4,677 (2,083) Headquarters/Other (4,324) (3,380) (11,744) (10,449) Total operating income 32,637 18,950 82,369 59,369 Interest income, net 62 114 444 412 Income before taxes $ 32,699 $ 19,064 $ 82,813 $ 59,781 Selected operating expense: Depreciation and amortization: Business Solutions $ 149 $ 153 $ 447 $ 481 Enterprise Solutions 613 608 1,858 1,653 Public Sector Solutions 22 25 68 91 Headquarters/Other 2,323 2,848 7,811 8,137 Total depreciation and amortization $ 3,107 $ 3,634 $ 10,184 $ 10,362 Total assets: Business Solutions $ 300,360 $ 263,678 Enterprise Solutions 488,867 423,125 Public Sector Solutions 90,437 69,994 Headquarters/Other (9,016) (6,570) Total assets $ 870,648 $ 750,227 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Restructuring and Other Charges (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2019USD ($)facility | |
Restructuring and other charges | |
Number of office facilities closed | facility | 1 |
Restructuring and other charges | $ 703 |
Employee separations | |
Restructuring and other charges | |
Restructuring and other charges | 553 |
Lease termination costs | |
Restructuring and other charges | |
Restructuring and other charges | $ 150 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Effect of Adoption of ASC 842 (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2019USD ($)lease | Sep. 30, 2019USD ($)facilitylease | Jan. 01, 2019USD ($) | |
Leases | |||
Lease, Practical Expedients, Package | true | ||
Lease, Practical Expedient, Use of Hindsight | true | ||
Lease liability | $ 15,713 | $ 15,713 | $ 18,835 |
Right-of-use assets, net | 14,850 | 14,850 | 18,723 |
Remaining unamortized lease incentives | $ 1,426 | $ 1,426 | $ 114 |
Number of office facilities closed | facility | 1 | ||
Number of leases amended | lease | 1 | ||
Number of financing leases | lease | 0 | ||
Number of additional operating or financing leases not yet commenced | lease | 0 | ||
Lease Cost | |||
Capitalized operating lease cost | $ 1,152 | $ 3,533 | |
Short-term lease cost | 43 | 129 | |
Total lease cost | 1,195 | 3,662 | |
Cash paid for amounts included in the measurement of lease liabilities and capitalized operating leases: | |||
Operating cash flows | $ 1,211 | $ 3,722 | |
Weighted-average remaining lease term - Capitalized operating leases | 5 years 11 months 1 day | 5 years 11 months 1 day | |
Weighted-average discount rate - Capitalized operating leases | 3.92% | 3.92% | |
Minimum | |||
Leases | |||
Number of years remaining on existing operating leases | 20 months | ||
Maximum | |||
Leases | |||
Number of years remaining on existing operating leases | 197 months | ||
Related Parties | |||
Leases | |||
Lease liability | $ 5,021 | $ 5,021 | |
Right-of-use assets, net | 5,998 | 5,998 | |
Lease Cost | |||
Capitalized operating lease cost | 379 | 1,137 | |
Short-term lease cost | 41 | 123 | |
Total lease cost | 420 | 1,260 | |
Cash paid for amounts included in the measurement of lease liabilities and capitalized operating leases: | |||
Operating cash flows | $ 379 | $ 1,137 | |
Weighted-average remaining lease term - Capitalized operating leases | 4 years 1 month 10 days | 4 years 1 month 10 days | |
Weighted-average discount rate - Capitalized operating leases | 3.92% | 3.92% | |
Others | |||
Lease Cost | |||
Capitalized operating lease cost | $ 773 | $ 2,396 | |
Short-term lease cost | 2 | 6 | |
Total lease cost | 775 | 2,402 | |
Cash paid for amounts included in the measurement of lease liabilities and capitalized operating leases: | |||
Operating cash flows | $ 832 | $ 2,585 | |
Weighted-average remaining lease term - Capitalized operating leases | 6 years 9 months 11 days | 6 years 9 months 11 days | |
Weighted-average discount rate - Capitalized operating leases | 3.92% | 3.92% |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Future Lease Payments (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Future lease payments over the remaining term of capitalized operating leases | |||
2019, excluding the nine months ended September 30, 2019 | $ 1,214 | ||
2020 | 4,767 | ||
2021 | 3,735 | ||
2022 | 2,737 | ||
2023 | 2,183 | ||
2024 | 1,043 | ||
Thereafter | 1,460 | ||
Total | 17,139 | ||
Imputed interest | (1,426) | $ (114) | |
Lease liability balance | 15,713 | 18,835 | |
Operating Lease, Right-of-Use Asset | 14,850 | $ 18,723 | |
Long-term lease liability | 11,386 | ||
Operating Lease, Liability, Current | $ 4,327 | ||
Current operating lease liability, Statement of Financial Position | cnxn:AccruedExpensesAndOtherLiabilities | ||
Future aggregate minimum annual lease payments | |||
2019 | $ 5,035 | ||
2020 | 4,793 | ||
2021 | 3,719 | ||
2022 | 2,743 | ||
2023 | 1,969 | ||
2024 and thereafter | 1,395 | ||
Total | 19,654 | ||
Related Parties | |||
Future lease payments over the remaining term of capitalized operating leases | |||
2019, excluding the nine months ended September 30, 2019 | $ 379 | ||
2020 | 1,385 | ||
2021 | 1,253 | ||
2022 | 1,253 | ||
2023 | 1,149 | ||
Total | 5,419 | ||
Lease liability balance | 5,021 | ||
Operating Lease, Right-of-Use Asset | 5,998 | ||
Future aggregate minimum annual lease payments | |||
2019 | 1,516 | ||
2020 | 1,407 | ||
2021 | 1,253 | ||
2022 | 1,253 | ||
2023 | 1,149 | ||
Total | 6,578 | ||
Others | |||
Future lease payments over the remaining term of capitalized operating leases | |||
2019, excluding the nine months ended September 30, 2019 | 835 | ||
2020 | 3,382 | ||
2021 | 2,482 | ||
2022 | 1,484 | ||
2023 | 1,034 | ||
2024 | 1,043 | ||
Thereafter | 1,460 | ||
Total | $ 11,720 | ||
Future aggregate minimum annual lease payments | |||
2019 | 3,519 | ||
2020 | 3,386 | ||
2021 | 2,466 | ||
2022 | 1,490 | ||
2023 | 820 | ||
2024 and thereafter | 1,395 | ||
Total | $ 13,076 |
REVENUE - Disaggregation of Rev
REVENUE - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Disaggregation of revenue | ||||
Net sales | $ 729,410 | $ 658,504 | $ 2,103,407 | $ 1,989,969 |
Notebooks/Mobility | ||||
Disaggregation of revenue | ||||
Net sales | 219,655 | 182,827 | 606,485 | 527,697 |
Desktops | ||||
Disaggregation of revenue | ||||
Net sales | 92,126 | 69,015 | 258,518 | 215,773 |
Software | ||||
Disaggregation of revenue | ||||
Net sales | 78,523 | 72,837 | 246,142 | 229,346 |
Servers/Storage | ||||
Disaggregation of revenue | ||||
Net sales | 59,302 | 60,925 | 179,137 | 202,205 |
Net/Com Products | ||||
Disaggregation of revenue | ||||
Net sales | 52,561 | 56,726 | 150,590 | 169,257 |
Displays and Sound | ||||
Disaggregation of revenue | ||||
Net sales | 70,534 | 62,900 | 189,073 | 189,327 |
Accessories | ||||
Disaggregation of revenue | ||||
Net sales | 87,397 | 87,796 | 269,749 | 250,012 |
Other Hardware/Services | ||||
Disaggregation of revenue | ||||
Net sales | 69,312 | 65,478 | 203,713 | 206,352 |
Business Solutions | ||||
Disaggregation of revenue | ||||
Net sales | 273,756 | 244,872 | 797,740 | 778,192 |
Business Solutions | Notebooks/Mobility | ||||
Disaggregation of revenue | ||||
Net sales | 79,287 | 68,822 | 240,644 | 222,550 |
Business Solutions | Desktops | ||||
Disaggregation of revenue | ||||
Net sales | 34,806 | 25,828 | 96,377 | 82,518 |
Business Solutions | Software | ||||
Disaggregation of revenue | ||||
Net sales | 36,879 | 31,578 | 110,826 | 104,377 |
Business Solutions | Servers/Storage | ||||
Disaggregation of revenue | ||||
Net sales | 26,352 | 26,386 | 81,452 | 85,190 |
Business Solutions | Net/Com Products | ||||
Disaggregation of revenue | ||||
Net sales | 25,200 | 27,380 | 70,806 | 83,546 |
Business Solutions | Displays and Sound | ||||
Disaggregation of revenue | ||||
Net sales | 23,224 | 23,318 | 64,422 | 67,193 |
Business Solutions | Accessories | ||||
Disaggregation of revenue | ||||
Net sales | 26,306 | 22,313 | 72,036 | 72,385 |
Business Solutions | Other Hardware/Services | ||||
Disaggregation of revenue | ||||
Net sales | 21,702 | 19,247 | 61,177 | 60,433 |
Enterprise Solutions | ||||
Disaggregation of revenue | ||||
Net sales | 278,295 | 265,477 | 871,969 | 823,786 |
Enterprise Solutions | Notebooks/Mobility | ||||
Disaggregation of revenue | ||||
Net sales | 77,214 | 63,926 | 240,621 | 195,909 |
Enterprise Solutions | Desktops | ||||
Disaggregation of revenue | ||||
Net sales | 36,821 | 30,075 | 112,067 | 91,307 |
Enterprise Solutions | Software | ||||
Disaggregation of revenue | ||||
Net sales | 28,439 | 25,718 | 91,954 | 91,522 |
Enterprise Solutions | Servers/Storage | ||||
Disaggregation of revenue | ||||
Net sales | 16,374 | 21,424 | 48,536 | 70,262 |
Enterprise Solutions | Net/Com Products | ||||
Disaggregation of revenue | ||||
Net sales | 11,666 | 16,601 | 38,866 | 49,093 |
Enterprise Solutions | Displays and Sound | ||||
Disaggregation of revenue | ||||
Net sales | 29,641 | 23,834 | 82,812 | 80,288 |
Enterprise Solutions | Accessories | ||||
Disaggregation of revenue | ||||
Net sales | 46,546 | 52,967 | 162,601 | 143,532 |
Enterprise Solutions | Other Hardware/Services | ||||
Disaggregation of revenue | ||||
Net sales | 31,594 | 30,932 | 94,512 | 101,873 |
Public Sector Solutions | ||||
Disaggregation of revenue | ||||
Net sales | 177,359 | 148,155 | 433,698 | 387,991 |
Public Sector Solutions | Notebooks/Mobility | ||||
Disaggregation of revenue | ||||
Net sales | 63,154 | 50,079 | 125,220 | 109,238 |
Public Sector Solutions | Desktops | ||||
Disaggregation of revenue | ||||
Net sales | 20,499 | 13,112 | 50,074 | 41,948 |
Public Sector Solutions | Software | ||||
Disaggregation of revenue | ||||
Net sales | 13,205 | 15,541 | 43,362 | 33,447 |
Public Sector Solutions | Servers/Storage | ||||
Disaggregation of revenue | ||||
Net sales | 16,576 | 13,115 | 49,149 | 46,753 |
Public Sector Solutions | Net/Com Products | ||||
Disaggregation of revenue | ||||
Net sales | 15,695 | 12,745 | 40,918 | 36,618 |
Public Sector Solutions | Displays and Sound | ||||
Disaggregation of revenue | ||||
Net sales | 17,669 | 15,748 | 41,839 | 41,846 |
Public Sector Solutions | Accessories | ||||
Disaggregation of revenue | ||||
Net sales | 14,545 | 12,516 | 35,112 | 34,095 |
Public Sector Solutions | Other Hardware/Services | ||||
Disaggregation of revenue | ||||
Net sales | $ 16,016 | $ 15,299 | $ 48,024 | $ 44,046 |
REVENUE - Contract Balances (De
REVENUE - Contract Balances (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Change in contract liability | |||||
Beginning balance - Contract liability | $ 4,724 | $ 8,433 | $ 2,679 | $ 2,914 | |
Cash received in advance and not recognized as revenue | 1,701 | 1,024 | 8,868 | 9,520 | |
Amounts recognized as revenue as performance obligations satisfied | (3,100) | (6,828) | (8,222) | (9,805) | |
Ending balance - Contract liability | 3,325 | $ 2,629 | 3,325 | $ 2,629 | |
Accrued expenses and other liabilities | |||||
Contract liabilities | |||||
Contract liability | $ 3,325 | $ 3,325 | $ 2,679 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Numerator: | ||||
Net income | $ 23,750 | $ 13,766 | $ 60,145 | $ 43,292 |
Denominator: | ||||
Denominator for basic earnings per share | 26,323 | 26,716 | 26,339 | 26,745 |
Dilutive effect of employee stock awards | 156 | 186 | 157 | 138 |
Denominator for diluted earnings per share | 26,479 | 26,902 | 26,496 | 26,883 |
Earnings per share: | ||||
Basic | $ 0.90 | $ 0.52 | $ 2.28 | $ 1.62 |
Diluted | $ 0.90 | $ 0.51 | $ 2.27 | $ 1.61 |
Additional Disclosure | ||||
Employee stock awards excluded from computation of diluted earnings per share | 0 | 0 | 0 | 0 |
SEGMENT AND RELATED DISCLOSUR_3
SEGMENT AND RELATED DISCLOSURES - Segment Information Applicable to Reportable Operating Segments (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)segment | Sep. 30, 2018USD ($) | Dec. 31, 2018USD ($) | |
Segment Reporting Information | |||||
Number of reportable segments | segment | 3 | ||||
Number of operating segments | segment | 3 | ||||
Net sales: | |||||
Net sales | $ 729,410 | $ 658,504 | $ 2,103,407 | $ 1,989,969 | |
Operating income (loss): | |||||
Operating income (loss) | 32,637 | 18,950 | 82,369 | 59,369 | |
Interest income, net | 62 | 114 | 444 | 412 | |
Income before taxes | 32,699 | 19,064 | 82,813 | 59,781 | |
Depreciation and amortization: | |||||
Depreciation and amortization | 3,107 | 3,634 | 10,184 | 10,362 | |
Total assets: | |||||
Total assets | 870,648 | 750,227 | 870,648 | 750,227 | $ 805,355 |
Goodwill | 73,602 | 73,602 | $ 73,602 | ||
Business Solutions | |||||
Net sales: | |||||
Net sales | 273,756 | 244,872 | 797,740 | 778,192 | |
Enterprise Solutions | |||||
Net sales: | |||||
Net sales | 278,295 | 265,477 | 871,969 | 823,786 | |
Public Sector Solutions | |||||
Net sales: | |||||
Net sales | 177,359 | 148,155 | 433,698 | 387,991 | |
Operating Segments | Business Solutions | |||||
Net sales: | |||||
Net sales | 273,756 | 244,872 | 797,740 | 778,192 | |
Operating income (loss): | |||||
Operating income (loss) | 13,533 | 8,173 | 38,509 | 28,303 | |
Depreciation and amortization: | |||||
Depreciation and amortization | 149 | 153 | 447 | 481 | |
Total assets: | |||||
Total assets | 300,360 | 263,678 | 300,360 | 263,678 | |
Operating Segments | Enterprise Solutions | |||||
Net sales: | |||||
Net sales | 278,295 | 265,477 | 871,969 | 823,786 | |
Operating income (loss): | |||||
Operating income (loss) | 16,346 | 13,629 | 50,927 | 43,598 | |
Depreciation and amortization: | |||||
Depreciation and amortization | 613 | 608 | 1,858 | 1,653 | |
Total assets: | |||||
Total assets | 488,867 | 423,125 | 488,867 | 423,125 | |
Operating Segments | Public Sector Solutions | |||||
Net sales: | |||||
Net sales | 177,359 | 148,155 | 433,698 | 387,991 | |
Operating income (loss): | |||||
Operating income (loss) | 7,082 | 528 | 4,677 | (2,083) | |
Depreciation and amortization: | |||||
Depreciation and amortization | 22 | 25 | 68 | 91 | |
Total assets: | |||||
Total assets | 90,437 | 69,994 | 90,437 | 69,994 | |
Headquarters/Other | |||||
Operating income (loss): | |||||
Operating income (loss) | (4,324) | (3,380) | (11,744) | (10,449) | |
Depreciation and amortization: | |||||
Depreciation and amortization | 2,323 | 2,848 | 7,811 | 8,137 | |
Total assets: | |||||
Assets net of intercompany balance eliminations | (9,016) | (6,570) | (9,016) | (6,570) | |
Intersegment Elimination | |||||
Total assets: | |||||
Total assets | $ (36,077) | $ (22,989) | $ (36,077) | $ (22,989) |
BANK CREDIT FACILITY (Detail)
BANK CREDIT FACILITY (Detail) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Subordinated Borrowing | ||
Line of credit, borrowing capacity | $ 50,000 | |
Credit facility, expiration date | Feb. 10, 2022 | |
Line of credit, maximum borrowing capacity | $ 80,000 | |
Debt instrument, description of variable rate basis | One-month LIBOR | |
Line of credit, outstanding borrowing | $ 0 | $ 0 |
Line of credit, available for borrowing | $ 50,000 | $ 50,000 |
Maximum | ||
Subordinated Borrowing | ||
Debt ratio | 2 | |
Prime Rate | ||
Subordinated Borrowing | ||
Debt instrument, interest rate | 5.00% | |
One-month LIBOR rate | ||
Subordinated Borrowing | ||
Debt instrument, interest rate | 2.02% |