PC Connection (CNXN) 10-Q 7 May 21 2021 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2021	Apr. 30, 2021
Document And Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Mar. 31, 2021
Entity File Number	0-23827
Entity Registrant Name	PC CONNECTION, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	02-0513618
Entity Address, Address Line One	730 Milford Road
Entity Address, City or Town	Merrimack
Entity Address, State or Province	NH
Entity Address, Postal Zip Code	03054
City Area Code	603
Local Phone Number	683-2000
Title of 12(b) Security	Common Stock
Trading Symbol	CNXN
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		26,187,175
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q1
Entity Central Index Key	0001050377
Amendment Flag	false

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Current Assets:
Cash and cash equivalents	$ 92,257	$ 95,655
Accounts receivable, net	554,696	611,021
Inventories, net	140,534	140,867
Prepaid expenses and other current assets	15,364	11,437
Total current assets	802,851	858,980
Property and equipment, net	61,592	61,537
Right-of-use assets	11,857	12,821
Goodwill	73,602	73,602
Intangible assets, net	6,783	7,088
Other assets	1,701	1,345
Total Assets	958,386	1,015,373
Current Liabilities:
Accounts payable	206,542	266,846
Accrued payroll	18,171	17,828
Accrued expenses and other liabilities	50,231	57,586
Total current liabilities	274,944	342,260
Deferred income taxes	18,525	18,525
Noncurrent operating lease liabilities	8,792	9,631
Other liabilities	8,630	8,630
Total Liabilities	310,891	379,046
Stockholders' Equity:
Common stock	289	289
Additional paid-in capital	120,875	119,891
Retained earnings	572,268	562,084
Treasury stock, at cost	(45,937)	(45,937)
Total Stockholders' Equity	647,495	636,327
Total Liabilities and Stockholders' Equity	$ 958,386	$ 1,015,373

CONSOLIDATED STATEMENTS OF INCO

CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Consolidated Statements of Income
Net sales	$ 636,892	$ 711,850
Cost of sales	536,372	598,732
Gross profit	100,520	113,118
Selling, general and administrative expenses	86,400	92,468
Income from operations	14,120	20,650
Other (expenses) income, net	(7)	92
Income before taxes	14,113	20,742
Income tax provision	(3,929)	(5,846)
Net income	$ 10,184	$ 14,896
Earnings per common share:
Basic	$ 0.39	$ 0.57
Diluted	$ 0.39	$ 0.56
Shares used in computation of earnings per common share:
Basic	26,172	26,236
Diluted	26,360	26,421

CONSOLIDATED STATEMENTS OF STOC

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands	Common Stock	Additional Paid-In Capital	Retained Earnings	Treasury Stock	Total
Balance at Dec. 31, 2019	$ 288	$ 118,045	$ 514,694	$ (35,715)	$ 597,312
Balance (in shares) at Dec. 31, 2019	28,870			(2,526)
Stock-based compensation expense		624			624
Restricted stock units vested	$ 1				1
Restricted stock units vested (in shares)	4
Shares withheld for taxes paid on stock awards		(49)			(49)
Repurchase of common stock for treasury				$ (10,222)	(10,222)
Repurchase of common stock for treasury (in shares)				(247)
Net income			14,896		14,896
Balance at Mar. 31, 2020	$ 289	118,620	529,590	$ (45,937)	602,562
Balance (in shares) at Mar. 31, 2020	28,874			(2,773)
Balance at Dec. 31, 2020	$ 289	119,891	562,084	$ (45,937)	636,327
Balance (in shares) at Dec. 31, 2020	28,943			(2,773)
Stock-based compensation expense		1,066			1,066
Restricted stock units vested (in shares)	5
Shares withheld for taxes paid on stock awards		(82)			(82)
Net income			10,184		10,184
Balance at Mar. 31, 2021	$ 289	$ 120,875	$ 572,268	$ (45,937)	$ 647,495
Balance (in shares) at Mar. 31, 2021	28,948			(2,773)

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Cash Flows provided by Operating Activities:
Net income	$ 10,184	$ 14,896
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	3,165	3,147
Provision for credit losses	(70)	2,833
Stock-based compensation expense	1,066	624
Changes in assets and liabilities:
Accounts receivable	54,895	61,477
Inventories	333	(12,319)
Prepaid expenses, income tax receivables and other current assets	(3,927)	(3,300)
Other non-current assets	(356)	(98)
Accounts payable	(60,862)	(15,499)
Accrued expenses and other liabilities	1,534	(7,205)
Net cash provided by operating activities	5,962	44,556
Cash Flows used in Investing Activities:
Purchases of equipment and capitalized software	(2,403)	(4,595)
Proceeds from life insurance	1,500
Net cash used in investing activities	(903)	(4,595)
Cash Flows (used in) provided by Financing Activities:
Purchase of treasury shares		(10,222)
Dividend payments	(8,375)	(8,427)
Payments of payroll taxes on stock-based compensation through shares withheld	(82)	(49)
Net cash used in financing activities	(8,457)	(18,698)
Increase (decrease) in cash and cash equivalents	(3,398)	21,263
Cash and cash equivalents, beginning of period	95,655	90,060
Cash and cash equivalents, end of period	92,257	111,323
Non-cash Investing and Financing Activities:
Accrued capital expenditures	714	1,237
Supplemental Cash Flow Information:
Income taxes paid	$ 261	$ 369

BASIS OF PRESENTATION

BASIS OF PRESENTATION	3 Months Ended
	Mar. 31, 2021
Basis of Presentation
Basis of Presentation	Note 1–Basis of Presentation ​ The accompanying unaudited condensed consolidated financial statements of PC Connection, Inc. and its subsidiaries (the “Company”) 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 the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed with the Securities and Exchange Commission (the “SEC”). The accompanying condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements contained in the Company’s 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 months ended March 31, 2021 may not be indicative of the results expected for any succeeding quarter or the entire year ending December 31, 2021. ​ 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 reported amounts and disclosures of assets and liabilities and the reported amounts and disclosures of revenue and expenses during the period. Management bases its estimates and judgments on the information available at the time and various other assumptions believed to be reasonable under the circumstances. By nature, estimates are subject to an inherent degree of uncertainty, including uncertainty in the current economic environment due to the coronavirus pandemic (“COVID-19 pandemic”). Actual results could differ from those estimates and assumptions, including the impact of the COVID-19 pandemic. ​ Recently Issued Financial Accounting Standards ​ In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting

REVENUE

REVENUE	3 Months Ended
	Mar. 31, 2021
Revenue
Revenue	Note 2–Revenue ​ The Company disaggregates revenue from its arrangements with customers by type of products and services, as it believes 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 March 31, 2021 and 2020, along with the reportable segment for each category. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, 2021 ​ Business Enterprise Public Sector Total Notebooks/Mobility ​ $ 94,435 ​ $ 82,191 ​ $ 56,974 ​ $ 233,600 Desktops ​ ​ 21,159 ​ ​ 30,351 ​ ​ 7,850 ​ ​ 59,360 Software ​ ​ 27,162 ​ ​ 22,505 ​ ​ 7,209 ​ ​ 56,876 Servers/Storage ​ ​ 20,573 ​ ​ 17,156 ​ ​ 6,647 ​ ​ 44,376 Net/Com Products ​ ​ 18,404 ​ ​ 19,826 ​ ​ 10,361 ​ ​ 48,591 Displays and Sound ​ 19,774 ​ 23,405 ​ 13,993 ​ 57,172 Accessories ​ 25,847 ​ 43,876 ​ 10,821 ​ 80,544 Other Hardware/Services ​ 18,980 ​ 25,975 ​ 11,418 ​ 56,373 Total net sales ​ $ 246,334 ​ $ 265,285 ​ $ 125,273 ​ $ 636,892 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, 2020 ​ Business Enterprise Public Sector Total Notebooks/Mobility ​ $ 91,613 ​ $ 79,316 ​ $ 28,966 ​ $ 199,895 Desktops ​ ​ 33,294 ​ ​ 34,209 ​ ​ 10,472 ​ ​ 77,975 Software ​ ​ 36,398 ​ ​ 26,182 ​ ​ 7,295 ​ ​ 69,875 Servers/Storage ​ ​ 25,830 ​ ​ 16,234 ​ ​ 11,746 ​ ​ 53,810 Net/Com Products ​ ​ 21,012 ​ ​ 24,946 ​ ​ 9,810 ​ ​ 55,768 Displays and Sound ​ 23,946 ​ 23,568 ​ 11,443 ​ 58,957 Accessories ​ 28,021 ​ 90,974 ​ 8,809 ​ 127,804 Other Hardware/Services ​ 18,671 ​ 37,989 ​ 11,106 ​ 67,766 Total net sales ​ $ 278,785 ​ $ 333,418 ​ $ 99,647 ​ $ 711,850 ​ Contract Balances ​ The following table provides information about contract liabilities from arrangements with customers as of March 31, 2021 and December 31, 2020. ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2021 December 31, 2020 Contract liabilities, which are included in "Accrued expenses and other liabilities" ​ $ 6,268 ​ $ 3,509 ​ Changes in the contract liability balances during the three months ended March 31, 2021 and 2020 are as follows (in thousands): ​ ​ ​ ​ ​ 2021 Balances at December 31, 2020 ​ $ 3,509 Cash received in advance and not recognized as revenue ​ 5,259 Amounts recognized as revenue as performance obligations satisfied ​ (2,500) Balances at March 31, 2021 ​ $ 6,268 ​ ​ ​ ​ ​ ​ 2020 Balances at December 31, 2019 ​ $ 5,942 Cash received in advance and not recognized as revenue ​ 4,852 Amounts recognized as revenue as performance obligations satisfied ​ (8,262) Balances at March 31, 2020 ​ $ 2,532 ​

EARNINGS PER SHARE

EARNINGS PER SHARE	3 Months Ended
	Mar. 31, 2021
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 March 31 , ​ ​ 2021 2020 Numerator: ​ ​ ​ ​ ​ ​ ​ Net income ​ $ 10,184 ​ $ 14,896 ​ Denominator: ​ ​ ​ ​ ​ ​ ​ Denominator for basic earnings per share ​ 26,172 ​ 26,236 ​ Dilutive effect of employee stock awards ​ 188 ​ 185 ​ Denominator for diluted earnings per share ​ 26,360 ​ 26,421 ​ Earnings per share: ​ ​ ​ ​ ​ ​ ​ Basic ​ $ 0.39 ​ $ 0.57 ​ Diluted ​ $ 0.39 ​ $ 0.56 ​ ​ For the three months ended March 31, 2021 and 2020, the Company 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.

LEASES

LEASES	3 Months Ended
	Mar. 31, 2021
Leases
Leases	Note 4—Leases ​ 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 (“ROU asset”) as of March 31, 2021 was $3,179 and a corresponding lease liability of $3,179 associated with related party leases. ​ As of March 31, 2021, there were no additional operating leases that have not yet commenced. Refer to the following table for quantitative information related to the Company’s leases for the three months ended March 31, 2021 and 2020: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended March 31, 2021 Three months ended March 31, 2020 ​ Related Parties ​ Others ​ Total Related Parties ​ Others ​ Total Lease Cost ​ ​ ​ ​ ​ ​ Capitalized operating lease cost $ 313 ​ $ 777 ​ $ 1,090 ​ $ 379 ​ $ 784 ​ $ 1,163 ​ Short-term lease cost 107 ​ 23 ​ 130 ​ 41 ​ 2 ​ 43 ​ Total lease cost $ 420 ​ $ 800 ​ $ 1,220 ​ $ 420 ​ $ 786 ​ $ 1,206 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other Information ​ ​ ​ ​ ​ ​ Cash paid for amounts included in the measurement of lease liabilities and capitalized operating leases: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating cash flows $ 313 ​ $ 770 ​ $ 1,083 ​ $ 379 ​ $ 781 ​ $ 1,160 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted-average remaining lease term (in years): ​ ​ ​ ​ ​ ​ Capitalized operating leases ​ 2.67 ​ ​ 5.32 ​ ​ 4.65 ​ ​ 3.65 ​ ​ 6.29 ​ ​ 5.60 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted-average discount rate: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Capitalized operating leases ​ 3.92% ​ ​ 3.92% ​ ​ 3.92% ​ ​ 3.92% ​ ​ 3.92% ​ ​ 3.92% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Years Ended December 31, ​ Related Parties ​ Others ​ Total 2021, excluding the three months ended March 31, 2021 ​ $ 940 ​ $ 2,322 ​ $ 3,262 2022 ​ 1,253 ​ 2,111 ​ 3,364 2023 ​ 1,149 ​ 1,675 ​ 2,824 2024 ​ — ​ 1,699 ​ 1,699 2025 ​ ​ — ​ ​ 1,594 ​ ​ 1,594 Thereafter ​ ​ — ​ ​ 888 ​ ​ 888 ​ ​ $ 3,342 ​ $ 10,289 ​ $ 13,631 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Imputed interest ​ ​ ​ ​ ​ ​ ​ ​ (1,027) Lease liability balance at March 31, 2021 ​ ​ ​ ​ ​ ​ ​ $ 12,604 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of March 31, 2021, the ROU asset had a balance of $11,857. The long-term lease liability was $8,792 and the short-term lease liability

SEGMENT INFORMATION

SEGMENT INFORMATION	3 Months Ended
	Mar. 31, 2021
Segment and Related Disclosures
Segment and Related Disclosures	Note 5–Segment Information ​ The internal reporting structure used by the Company’s chief operating decision maker (“CODM”) to assess performance and allocate resources determines the basis for our reportable operating segments. The Company’s CODM is its Chief Executive Officer, and he evaluates operations and allocates resources based on a measure of operating income. ​ The Company’s 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. The Company reports 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 months ended March 31, 2021 and 2020 is shown below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ ​ March 31, ​ March 31, ​ ​ 2021 2020 Net sales: ​ ​ ​ ​ ​ ​ ​ Business Solutions ​ $ 246,334 ​ $ 278,785 ​ Enterprise Solutions ​ 265,285 ​ 333,418 ​ Public Sector Solutions ​ 125,273 ​ 99,647 ​ Total net sales ​ $ 636,892 ​ $ 711,850 ​ Operating income (loss): ​ ​ ​ ​ ​ ​ ​ Business Solutions ​ $ 8,420 ​ $ 11,301 ​ Enterprise Solutions ​ 12,543 ​ 16,722 ​ Public Sector Solutions ​ (2,753) ​ (3,322) ​ Headquarters/Other ​ (4,090) ​ (4,051) ​ Total operating income ​ 14,120 ​ 20,650 ​ Other (expenses) income, net ​ (7) ​ 92 ​ Income before taxes ​ $ 14,113 ​ $ 20,742 ​ Selected operating expense: ​ ​ ​ ​ ​ ​ ​ Depreciation and amortization: ​ ​ ​ ​ ​ ​ ​ Business Solutions ​ $ 159 ​ $ 159 ​ Enterprise Solutions ​ 716 ​ 681 ​ Public Sector Solutions ​ 14 ​ 15 ​ Headquarters/Other ​ 2,276 ​ 2,292 ​ Total depreciation and amortization ​ $ 3,165 ​ $ 3,147 ​ Total assets: ​ ​ ​ ​ ​ ​ ​ Business Solutions ​ $ 362,694 ​ $ 319,909 ​ Enterprise Solutions ​ 568,221 ​ 536,672 ​ Public Sector Solutions ​ 94,103 ​ 52,285 ​ Headquarters/Other ​ (66,632) ​ 4,326 ​ Total assets ​ $ 958,386 ​ $ 913,192 ​ ​ 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 March 31, 2021 and 2020, total assets for the Headquarters/Other group are presented net of intercompany balance eliminations of $48,026 and $7,024 , 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-by-segment basis.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	3 Months Ended
	Mar. 31, 2021
Commitments and Contingencies
Commitments and Contingencies	Note 6–Commitments and Contingencies ​ The Company is 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, adverse effect on our financial position, results of operations, and/or cash flows. ​ The Company is 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, but such outcomes are not expected to have a material, adverse impact on our financial position, results of operations, and/or cash flows.

BANK BORROWINGS

BANK BORROWINGS	3 Months Ended
	Mar. 31, 2021
Bank Borrowings
Bank Borrowings	Note 7–Bank Borrowings ​ The Company has 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 LIBOR (0.11% at March 31, 2021), plus a spread based on our funded debt ratio, or in the absence of LIBOR, the prime rate (3.25% at March 31, 2021). 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 trailing twelve months 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 trailing twelve months Adjusted EBITDA could limit our potential borrowing capacity under the credit facility. The Company had no outstanding bank borrowings at March 31, 2021 or 2020, and accordingly, the entire $50,000 facility was available for borrowings under the credit facility. As of March 31, 2021, the Company was in compliance with all financial covenants contained in the agreement governing the credit facility. ​

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	3 Months Ended
	Mar. 31, 2021
Basis of Presentation
Principles of Consolidation	​ The accompanying unaudited condensed consolidated financial statements of PC Connection, Inc. and its subsidiaries (the “Company”) 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 the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed with the Securities and Exchange Commission (the “SEC”). The accompanying condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements contained in the Company’s 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 months ended March 31, 2021 may not be indicative of the results expected for any succeeding quarter or the entire year ending December 31, 2021. ​
Use of Estimates in the Preparation of Financial Statements	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 reported amounts and disclosures of assets and liabilities and the reported amounts and disclosures of revenue and expenses during the period. Management bases its estimates and judgments on the information available at the time and various other assumptions believed to be reasonable under the circumstances. By nature, estimates are subject to an inherent degree of uncertainty, including uncertainty in the current economic environment due to the coronavirus pandemic (“COVID-19 pandemic”). Actual results could differ from those estimates and assumptions, including the impact of the COVID-19 pandemic.
Recently Issued Financial Accounting Standards	Recently Issued Financial Accounting Standards ​ In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting

REVENUE (Tables)

REVENUE (Tables)	3 Months Ended
	Mar. 31, 2021
Revenue
Schedule of disaggregation of revenue from contracts with customers	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, 2021 ​ Business Enterprise Public Sector Total Notebooks/Mobility ​ $ 94,435 ​ $ 82,191 ​ $ 56,974 ​ $ 233,600 Desktops ​ ​ 21,159 ​ ​ 30,351 ​ ​ 7,850 ​ ​ 59,360 Software ​ ​ 27,162 ​ ​ 22,505 ​ ​ 7,209 ​ ​ 56,876 Servers/Storage ​ ​ 20,573 ​ ​ 17,156 ​ ​ 6,647 ​ ​ 44,376 Net/Com Products ​ ​ 18,404 ​ ​ 19,826 ​ ​ 10,361 ​ ​ 48,591 Displays and Sound ​ 19,774 ​ 23,405 ​ 13,993 ​ 57,172 Accessories ​ 25,847 ​ 43,876 ​ 10,821 ​ 80,544 Other Hardware/Services ​ 18,980 ​ 25,975 ​ 11,418 ​ 56,373 Total net sales ​ $ 246,334 ​ $ 265,285 ​ $ 125,273 ​ $ 636,892 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, 2020 ​ Business Enterprise Public Sector Total Notebooks/Mobility ​ $ 91,613 ​ $ 79,316 ​ $ 28,966 ​ $ 199,895 Desktops ​ ​ 33,294 ​ ​ 34,209 ​ ​ 10,472 ​ ​ 77,975 Software ​ ​ 36,398 ​ ​ 26,182 ​ ​ 7,295 ​ ​ 69,875 Servers/Storage ​ ​ 25,830 ​ ​ 16,234 ​ ​ 11,746 ​ ​ 53,810 Net/Com Products ​ ​ 21,012 ​ ​ 24,946 ​ ​ 9,810 ​ ​ 55,768 Displays and Sound ​ 23,946 ​ 23,568 ​ 11,443 ​ 58,957 Accessories ​ 28,021 ​ 90,974 ​ 8,809 ​ 127,804 Other Hardware/Services ​ 18,671 ​ 37,989 ​ 11,106 ​ 67,766 Total net sales ​ $ 278,785 ​ $ 333,418 ​ $ 99,647 ​ $ 711,850
Schedule of changes in contract liability balances	​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2021 December 31, 2020 Contract liabilities, which are included in "Accrued expenses and other liabilities" ​ $ 6,268 ​ $ 3,509 ​ Changes in the contract liability balances during the three months ended March 31, 2021 and 2020 are as follows (in thousands): ​ ​ ​ ​ ​ 2021 Balances at December 31, 2020 ​ $ 3,509 Cash received in advance and not recognized as revenue ​ 5,259 Amounts recognized as revenue as performance obligations satisfied ​ (2,500) Balances at March 31, 2021 ​ $ 6,268 ​ ​ ​ ​ ​ ​ 2020 Balances at December 31, 2019 ​ $ 5,942 Cash received in advance and not recognized as revenue ​ 4,852 Amounts recognized as revenue as performance obligations satisfied ​ (8,262) Balances at March 31, 2020 ​ $ 2,532

EARNINGS PER SHARE (Tables)

EARNINGS PER SHARE (Tables)	3 Months Ended
	Mar. 31, 2021
Earnings Per Share
Computation of basic and diluted earnings per share	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31 , ​ ​ 2021 2020 Numerator: ​ ​ ​ ​ ​ ​ ​ Net income ​ $ 10,184 ​ $ 14,896 ​ Denominator: ​ ​ ​ ​ ​ ​ ​ Denominator for basic earnings per share ​ 26,172 ​ 26,236 ​ Dilutive effect of employee stock awards ​ 188 ​ 185 ​ Denominator for diluted earnings per share ​ 26,360 ​ 26,421 ​ Earnings per share: ​ ​ ​ ​ ​ ​ ​ Basic ​ $ 0.39 ​ $ 0.57 ​ Diluted ​ $ 0.39 ​ $ 0.56 ​

LEASES (Tables)

LEASES (Tables)	3 Months Ended
	Mar. 31, 2021
Leases
Schedule of lease cost	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended March 31, 2021 Three months ended March 31, 2020 ​ Related Parties ​ Others ​ Total Related Parties ​ Others ​ Total Lease Cost ​ ​ ​ ​ ​ ​ Capitalized operating lease cost $ 313 ​ $ 777 ​ $ 1,090 ​ $ 379 ​ $ 784 ​ $ 1,163 ​ Short-term lease cost 107 ​ 23 ​ 130 ​ 41 ​ 2 ​ 43 ​ Total lease cost $ 420 ​ $ 800 ​ $ 1,220 ​ $ 420 ​ $ 786 ​ $ 1,206 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other Information ​ ​ ​ ​ ​ ​ Cash paid for amounts included in the measurement of lease liabilities and capitalized operating leases: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating cash flows $ 313 ​ $ 770 ​ $ 1,083 ​ $ 379 ​ $ 781 ​ $ 1,160 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted-average remaining lease term (in years): ​ ​ ​ ​ ​ ​ Capitalized operating leases ​ 2.67 ​ ​ 5.32 ​ ​ 4.65 ​ ​ 3.65 ​ ​ 6.29 ​ ​ 5.60 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted-average discount rate: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Capitalized operating leases ​ 3.92% ​ ​ 3.92% ​ ​ 3.92% ​ ​ 3.92% ​ ​ 3.92% ​ ​ 3.92% ​ ​
Schedule of future lease payments on capitalized operating leases	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Years Ended December 31, ​ Related Parties ​ Others ​ Total 2021, excluding the three months ended March 31, 2021 ​ $ 940 ​ $ 2,322 ​ $ 3,262 2022 ​ 1,253 ​ 2,111 ​ 3,364 2023 ​ 1,149 ​ 1,675 ​ 2,824 2024 ​ — ​ 1,699 ​ 1,699 2025 ​ ​ — ​ ​ 1,594 ​ ​ 1,594 Thereafter ​ ​ — ​ ​ 888 ​ ​ 888 ​ ​ $ 3,342 ​ $ 10,289 ​ $ 13,631 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Imputed interest ​ ​ ​ ​ ​ ​ ​ ​ (1,027) Lease liability balance at March 31, 2021 ​ ​ ​ ​ ​ ​ ​ $ 12,604 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

SEGMENT INFORMATION (Tables)

SEGMENT INFORMATION (Tables)	3 Months Ended
	Mar. 31, 2021
Segment and Related Disclosures
Segment information applicable to reportable operating segments	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ ​ March 31, ​ March 31, ​ ​ 2021 2020 Net sales: ​ ​ ​ ​ ​ ​ ​ Business Solutions ​ $ 246,334 ​ $ 278,785 ​ Enterprise Solutions ​ 265,285 ​ 333,418 ​ Public Sector Solutions ​ 125,273 ​ 99,647 ​ Total net sales ​ $ 636,892 ​ $ 711,850 ​ Operating income (loss): ​ ​ ​ ​ ​ ​ ​ Business Solutions ​ $ 8,420 ​ $ 11,301 ​ Enterprise Solutions ​ 12,543 ​ 16,722 ​ Public Sector Solutions ​ (2,753) ​ (3,322) ​ Headquarters/Other ​ (4,090) ​ (4,051) ​ Total operating income ​ 14,120 ​ 20,650 ​ Other (expenses) income, net ​ (7) ​ 92 ​ Income before taxes ​ $ 14,113 ​ $ 20,742 ​ Selected operating expense: ​ ​ ​ ​ ​ ​ ​ Depreciation and amortization: ​ ​ ​ ​ ​ ​ ​ Business Solutions ​ $ 159 ​ $ 159 ​ Enterprise Solutions ​ 716 ​ 681 ​ Public Sector Solutions ​ 14 ​ 15 ​ Headquarters/Other ​ 2,276 ​ 2,292 ​ Total depreciation and amortization ​ $ 3,165 ​ $ 3,147 ​ Total assets: ​ ​ ​ ​ ​ ​ ​ Business Solutions ​ $ 362,694 ​ $ 319,909 ​ Enterprise Solutions ​ 568,221 ​ 536,672 ​ Public Sector Solutions ​ 94,103 ​ 52,285 ​ Headquarters/Other ​ (66,632) ​ 4,326 ​ Total assets ​ $ 958,386 ​ $ 913,192 ​

REVENUE - Disaggregation of Rev

REVENUE - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Disaggregation of revenue
Net sales	$ 636,892	$ 711,850
Notebooks/Mobility
Disaggregation of revenue
Net sales	233,600	199,895
Desktops
Disaggregation of revenue
Net sales	59,360	77,975
Software
Disaggregation of revenue
Net sales	56,876	69,875
Servers/Storage
Disaggregation of revenue
Net sales	44,376	53,810
Net/Com Products
Disaggregation of revenue
Net sales	48,591	55,768
Displays and Sound
Disaggregation of revenue
Net sales	57,172	58,957
Accessories
Disaggregation of revenue
Net sales	80,544	127,804
Other Hardware/Services
Disaggregation of revenue
Net sales	56,373	67,766
Business Solutions
Disaggregation of revenue
Net sales	246,334	278,785
Business Solutions | Notebooks/Mobility
Disaggregation of revenue
Net sales	94,435	91,613
Business Solutions | Desktops
Disaggregation of revenue
Net sales	21,159	33,294
Business Solutions | Software
Disaggregation of revenue
Net sales	27,162	36,398
Business Solutions | Servers/Storage
Disaggregation of revenue
Net sales	20,573	25,830
Business Solutions | Net/Com Products
Disaggregation of revenue
Net sales	18,404	21,012
Business Solutions | Displays and Sound
Disaggregation of revenue
Net sales	19,774	23,946
Business Solutions | Accessories
Disaggregation of revenue
Net sales	25,847	28,021
Business Solutions | Other Hardware/Services
Disaggregation of revenue
Net sales	18,980	18,671
Enterprise Solutions
Disaggregation of revenue
Net sales	265,285	333,418
Enterprise Solutions | Notebooks/Mobility
Disaggregation of revenue
Net sales	82,191	79,316
Enterprise Solutions | Desktops
Disaggregation of revenue
Net sales	30,351	34,209
Enterprise Solutions | Software
Disaggregation of revenue
Net sales	22,505	26,182
Enterprise Solutions | Servers/Storage
Disaggregation of revenue
Net sales	17,156	16,234
Enterprise Solutions | Net/Com Products
Disaggregation of revenue
Net sales	19,826	24,946
Enterprise Solutions | Displays and Sound
Disaggregation of revenue
Net sales	23,405	23,568
Enterprise Solutions | Accessories
Disaggregation of revenue
Net sales	43,876	90,974
Enterprise Solutions | Other Hardware/Services
Disaggregation of revenue
Net sales	25,975	37,989
Public Sector Solutions
Disaggregation of revenue
Net sales	125,273	99,647
Public Sector Solutions | Notebooks/Mobility
Disaggregation of revenue
Net sales	56,974	28,966
Public Sector Solutions | Desktops
Disaggregation of revenue
Net sales	7,850	10,472
Public Sector Solutions | Software
Disaggregation of revenue
Net sales	7,209	7,295
Public Sector Solutions | Servers/Storage
Disaggregation of revenue
Net sales	6,647	11,746
Public Sector Solutions | Net/Com Products
Disaggregation of revenue
Net sales	10,361	9,810
Public Sector Solutions | Displays and Sound
Disaggregation of revenue
Net sales	13,993	11,443
Public Sector Solutions | Accessories
Disaggregation of revenue
Net sales	10,821	8,809
Public Sector Solutions | Other Hardware/Services
Disaggregation of revenue
Net sales	$ 11,418	$ 11,106

REVENUE - Contract Balances (De

REVENUE - Contract Balances (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Change in contract liability
Beginning balance - Contract liability	$ 3,509	$ 5,942
Cash received in advance and not recognized as revenue	5,259	4,852
Amounts recognized as revenue as performance obligations satisfied	(2,500)	(8,262)
Ending balance - Contract liability	6,268	$ 2,532
Accrued expenses and other liabilities
Contract liabilities
Contract liabilities	$ 6,268		$ 3,509

EARNINGS PER SHARE (Details)

EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Numerator:
Net income	$ 10,184	$ 14,896
Denominator:
Denominator for basic earnings per share	26,172	26,236
Dilutive effect of unvested employee stock awards	188	185
Denominator for diluted earnings per share	26,360	26,421
Earnings per share:
Basic	$ 0.39	$ 0.57
Diluted	$ 0.39	$ 0.56
Additional Disclosure
Employee stock awards excluded from computation of diluted earnings per share	0	0

LEASES - Lease Cost and Other I

LEASES - Lease Cost and Other Information (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2021USD ($)lease	Mar. 31, 2020USD ($)	Dec. 31, 2020USD ($)
Leases
Right-of-use assets	$ 11,857	$ 15,776	$ 12,821
Lease liability	$ 12,604
Number of additional operating or financing leases not yet commenced | lease	0
Lease Cost
Capitalized operating lease cost	$ 1,090	1,163
Short-term lease cost	130	43
Total lease cost	1,220	1,206
Cash paid for amounts included in the measurement of lease liabilities and capitalized operating leases:
Operating cash flows	$ 1,083	$ 1,160
Weighted-average remaining lease term - Capitalized operating leases (in years)	4 years 7 months 24 days	5 years 7 months 6 days
Weighted-average discount rate - Capitalized operating leases	3.92%	3.92%
Related Parties
Leases
Right-of-use assets	$ 3,179
Lease liability	3,179
Lease Cost
Capitalized operating lease cost	313	$ 379
Short-term lease cost	107	41
Total lease cost	420	420
Cash paid for amounts included in the measurement of lease liabilities and capitalized operating leases:
Operating cash flows	$ 313	$ 379
Weighted-average remaining lease term - Capitalized operating leases (in years)	2 years 8 months 1 day	3 years 7 months 24 days
Weighted-average discount rate - Capitalized operating leases	3.92%	3.92%
Others
Lease Cost
Capitalized operating lease cost	$ 777	$ 784
Short-term lease cost	23	2
Total lease cost	800	786
Cash paid for amounts included in the measurement of lease liabilities and capitalized operating leases:
Operating cash flows	$ 770	$ 781
Weighted-average remaining lease term - Capitalized operating leases (in years)	5 years 3 months 25 days	6 years 3 months 14 days
Weighted-average discount rate - Capitalized operating leases	3.92%	3.92%

LEASES - Future Lease Payments

LEASES - Future Lease Payments (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020	Mar. 31, 2020
Future lease payments over the remaining term of capitalized operating leases
2021, excluding the three months ended March 31, 2021	$ 3,262
2022	3,364
2023	2,824
2024	1,699
2025	1,594
Thereafter	888
Total	13,631
Imputed interest	(1,027)
Lease liability balance	12,604
Right-of-use assets	11,857	$ 12,821	$ 15,776
Long-term lease liability	8,792	$ 9,631	12,551
Short-term lease liability	$ 3,812		$ 4,062
Current operating lease liability, Statement of Financial Position	Accrued expenses and other liabilities
Related Parties
Future lease payments over the remaining term of capitalized operating leases
2021, excluding the three months ended March 31, 2021	$ 940
2022	1,253
2023	1,149
Total	3,342
Lease liability balance	3,179
Right-of-use assets	3,179
Others
Future lease payments over the remaining term of capitalized operating leases
2021, excluding the three months ended March 31, 2021	2,322
2022	2,111
2023	1,675
2024	1,699
2025	1,594
Thereafter	888
Total	$ 10,289

SEGMENT INFORMATION - Segment I

SEGMENT INFORMATION - Segment Information Applicable to Reportable Operating Segments (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2021USD ($)segment	Mar. 31, 2020USD ($)	Dec. 31, 2020USD ($)
Segment Reporting Information
Number of reportable segments | segment	3
Number of operating segments | segment	3
Net sales:
Net sales	$ 636,892	$ 711,850
Operating income (loss):
Operating income (loss)	14,120	20,650
Other (expenses) income, net	(7)	92
Other income, net	(7)	92
Income before taxes	14,113	20,742
Depreciation and amortization:
Depreciation and amortization	3,165	3,147
Total assets:
Total assets	958,386	913,192	$ 1,015,373
Goodwill	73,602		$ 73,602
Business Solutions
Net sales:
Net sales	246,334	278,785
Enterprise Solutions
Net sales:
Net sales	265,285	333,418
Public Sector Solutions
Net sales:
Net sales	125,273	99,647
Operating Segments | Business Solutions
Net sales:
Net sales	246,334	278,785
Operating income (loss):
Operating income (loss)	8,420	11,301
Depreciation and amortization:
Depreciation and amortization	159	159
Total assets:
Total assets	362,694	319,909
Operating Segments | Enterprise Solutions
Net sales:
Net sales	265,285	333,418
Operating income (loss):
Operating income (loss)	12,543	16,722
Depreciation and amortization:
Depreciation and amortization	716	681
Total assets:
Total assets	568,221	536,672
Operating Segments | Public Sector Solutions
Net sales:
Net sales	125,273	99,647
Operating income (loss):
Operating income (loss)	(2,753)	(3,322)
Depreciation and amortization:
Depreciation and amortization	14	15
Total assets:
Total assets	94,103	52,285
Headquarters/Other
Operating income (loss):
Operating income (loss)	(4,090)	(4,051)
Depreciation and amortization:
Depreciation and amortization	2,276	2,292
Total assets:
Assets net of intercompany balance eliminations	(66,632)	4,326
Intersegment Elimination
Total assets:
Total assets	$ (48,026)	$ (7,024)

BANK BORROWINGS (Details)

BANK BORROWINGS (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
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	3.25%
One-month LIBOR rate
Subordinated Borrowing
Debt instrument, interest rate	0.11%