Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2014 | Nov. 04, 2014 | |
Document and Entity Information | ' | ' |
Entity Registrant Name | 'PCM, INC. | ' |
Entity Central Index Key | '0000937941 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-14 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 12,380,524 |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $5,488 | $9,992 |
Accounts receivable, net of allowances of $606 and $1,407 | 194,874 | 195,803 |
Inventories | 45,032 | 113,843 |
Prepaid expenses and other current assets | 25,225 | 14,892 |
Deferred income taxes | 1,812 | 2,583 |
Current assets of discontinued operations | 56 | 3,394 |
Total current assets | 272,487 | 340,507 |
Property and equipment, net | 71,386 | 55,806 |
Deferred income taxes | 125 | 225 |
Goodwill | 25,510 | 25,510 |
Intangible assets, net | 4,458 | 4,684 |
Other assets | 4,983 | 6,804 |
Non-current assets of discontinued operations | 19 | 1,286 |
Total assets | 378,968 | 434,822 |
Current liabilities: | ' | ' |
Accounts payable | 111,962 | 130,869 |
Accrued expenses and other current liabilities | 25,941 | 29,128 |
Deferred revenue | 14,222 | 9,427 |
Line of credit | 55,454 | 110,499 |
Notes payable - current | 3,169 | 1,167 |
Current liabilities of discontinued operations | 547 | 1,821 |
Total current liabilities | 211,295 | 282,911 |
Notes payable and other long-term liabilities | 27,371 | 18,248 |
Deferred income taxes | 7,564 | 7,901 |
Total liabilities | 246,230 | 309,060 |
Commitments and contingencies | ' | ' |
Stockholders' equity: | ' | ' |
Preferred stock, $0.001 par value; 5,000,000 shares authorized; none issued and outstanding | ' | ' |
Common stock, $0.001 par value; 30,000,000 shares authorized; 15,753,652 and 15,053,067 shares issued; and 12,380,524 and 11,790,674 shares outstanding | 16 | 15 |
Additional paid-in capital | 120,541 | 115,801 |
Treasury stock, at cost: 3,373,128 and 3,262,393 shares | -16,461 | -15,321 |
Accumulated other comprehensive income | 1,299 | 1,816 |
Retained earnings | 27,343 | 23,451 |
Total stockholders' equity | 132,738 | 125,762 |
Total liabilities and stockholders' equity | $378,968 | $434,822 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
CONDENSED CONSOLIDATED BALANCE SHEETS | ' | ' |
Accounts receivable, allowances (in dollars) | $606 | $1,407 |
Preferred stock, par value (in dollars per share) | $0.00 | $0.00 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized | 30,000,000 | 30,000,000 |
Common stock, shares issued | 15,753,652 | 15,053,067 |
Common stock, shares outstanding | 12,380,524 | 11,790,674 |
Treasury stock, shares | 3,373,128 | 3,262,393 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ' | ' | ' | ' |
Net sales | $339,138 | $338,679 | $1,005,887 | $1,012,260 |
Cost of goods sold | 293,628 | 290,288 | 862,709 | 869,282 |
Gross profit | 45,510 | 48,391 | 143,178 | 142,978 |
Selling, general and administrative expenses | 44,341 | 43,798 | 131,813 | 128,571 |
Operating profit | 1,169 | 4,593 | 11,365 | 14,407 |
Interest expense, net | 688 | 892 | 2,381 | 2,445 |
Income from continuing operations before income taxes | 481 | 3,701 | 8,984 | 11,962 |
Income tax expense | 327 | 1,512 | 3,872 | 5,003 |
Income from continuing operations | 154 | 2,189 | 5,112 | 6,959 |
Loss from discontinued operations, net of taxes | -294 | -265 | -1,220 | -636 |
Net income (loss) | ($140) | $1,924 | $3,892 | $6,323 |
Basic EPS: | ' | ' | ' | ' |
Income from continuing operations (in dollars per share) | $0.01 | $0.19 | $0.42 | $0.60 |
Loss from discontinued operations, net of taxes (in dollars per share) | ($0.02) | ($0.02) | ($0.10) | ($0.05) |
Net income (loss) | ($0.01) | $0.17 | $0.32 | $0.55 |
Diluted EPS: | ' | ' | ' | ' |
Income from continuing operations (in dollars per share) | $0.01 | $0.18 | $0.40 | $0.58 |
Loss from discontinued operations, net of taxes (in dollars per share) | ($0.02) | ($0.02) | ($0.10) | ($0.05) |
Net income (loss) | ($0.01) | $0.16 | $0.30 | $0.53 |
Weighted average number of common shares outstanding: | ' | ' | ' | ' |
Basic (in shares) | 12,367 | 11,593 | 12,217 | 11,530 |
Diluted (in shares) | 12,954 | 12,034 | 12,871 | 11,844 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ' | ' | ' | ' |
Net income (loss) | ($140) | $1,924 | $3,892 | $6,323 |
Comprehensive income: | ' | ' | ' | ' |
Foreign currency translation adjustments | -495 | 198 | -517 | -381 |
Total other comprehensive income (loss) | -495 | 198 | -517 | -381 |
Comprehensive income (loss) | ($635) | $2,122 | $3,375 | $5,942 |
CONDENSED_CONSOLIDATED_STATEME2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Cash Flows From Operating Activities | ' | ' |
Net income | $3,892 | $6,323 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Depreciation and amortization | 9,149 | 8,884 |
Provision for deferred income taxes | 550 | 1,585 |
Excess tax benefit related to stock option exercises | -290 | -260 |
Non-cash stock-based compensation | 1,074 | 1,220 |
Change in operating assets and liabilities: | ' | ' |
Accounts receivable | 1,151 | 9,390 |
Inventories | 71,926 | 20,383 |
Prepaid expenses and other current assets | -10,689 | -5,476 |
Other assets | 1,807 | -3,091 |
Accounts payable | -20,440 | -6,599 |
Accrued expenses and other current liabilities | -1,217 | -2,151 |
Deferred revenue | 4,769 | 8,236 |
Total adjustments | 57,790 | 32,121 |
Net cash provided by operating activities | 61,682 | 38,444 |
Cash Flows From Investing Activities | ' | ' |
Purchases of property and equipment | -22,762 | -10,536 |
Net cash used in investing activities | -22,762 | -10,536 |
Cash Flows From Financing Activities | ' | ' |
Net payments under line of credit | -55,045 | -24,545 |
Capital lease proceeds | ' | 206 |
Borrowing under note payable | 11,462 | 4,820 |
Payments under notes payable | -1,602 | -920 |
Change in book overdraft | 1,130 | -1,542 |
Payments of obligations under capital lease | -2,018 | -2,222 |
Proceeds from stock issued under stock option plans | 3,667 | 1,895 |
Payment for deferred financing costs | -30 | -1,141 |
Common shares repurchased and held in treasury | -1,140 | -1,633 |
Excess tax benefit related to stock option exercises | 290 | 260 |
Net cash used in financing activities | -43,286 | -24,822 |
Effect of foreign currency on cash flow | -138 | -193 |
Net change in cash and cash equivalents | -4,504 | 2,893 |
Cash and cash equivalents at beginning of the period | 9,992 | 6,535 |
Cash and cash equivalents at end of the period | 5,488 | 9,428 |
Supplemental Cash Flow Information | ' | ' |
Interest paid | 2,541 | 2,454 |
Income taxes paid | 5,933 | 2,786 |
Supplemental Non-Cash Investing Activities | ' | ' |
Purchase of property and equipment | $544 | $663 |
Basis_of_Presentation_and_Desc
Basis of Presentation and Description of Company | 9 Months Ended |
Sep. 30, 2014 | |
Basis of Presentation and Description of Company | ' |
Basis of Presentation and Description of Company | ' |
1. Basis of Presentation and Description of Company | |
PCM, Inc. is a leading multi-vendor provider of technology products, services and solutions offered through our dedicated sales force and field service teams and direct marketing channels. Since our founding in 1987, we have served our customers by offering products and services purchased from vendors such as Apple, Cisco, Dell, HP, Ingram Micro, Lenovo, Microsoft and Tech Data. We add additional value by incorporating products and services into comprehensive solutions. Our sales and marketing efforts allow our vendor partners to reach multiple customer segments including commercial businesses, state, local and federal governments, educational institutions and individual consumers. | |
We have prepared the unaudited condensed consolidated financial statements included herein pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and in conformity with accounting principles generally accepted in the United States of America, or GAAP, which requires us to make estimates and assumptions that affect amounts reported herein. We base our estimates and assumptions on historical experience and on various other factors that we believe to be reasonable under the circumstances. Due to the inherent uncertainty involved in making estimates, our actual results reported in future periods may be affected by changes in those estimates. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations for interim financial reporting. In the opinion of management, all adjustments, consisting only of normal recurring items which are necessary for a fair presentation, have been included. The results for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2013 and our Quarterly Reports on Form 10-Q for the periods ended March 31, 2014 and June 30, 2014. | |
We operate under three reportable operating segments - Commercial, Public Sector and MacMall. Our segments are primarily aligned based upon their respective customer base. We include corporate related expenses such as legal, accounting, information technology, product management and other administrative costs that are not otherwise included in our reportable operating segments in Corporate & Other. | |
During the nine months ended September 30, 2014, we discontinued the operation of three of our retail stores, located in Huntington Beach and Torrance, California, and Chicago, Illinois, and our OnSale and eCost businesses. We reflected the results of these operations, which were historically reported as a part of our MacMall segment, as discontinued operations for all periods presented herein in our Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Operations. See Note 3 below for more information. | |
We sell primarily to customers in the United States, and maintain offices throughout the United States, as well as in Montreal, Canada and Manila, Philippines. In the three months ended September 30, 2014, we generated approximately 74% of our revenue in our Commercial segment, 19% of our revenue in our Public Sector segment and 7% of our revenue in our MacMall segment. In the nine months ended September 30, 2014, we generated approximately 75% of our revenue in our Commercial segment, 15% of our revenue in our Public Sector segment and 10% of our revenue in our MacMall segment. | |
Our Commercial segment sells complex products, services and solutions to commercial businesses in the United States, using multiple sales channels, including a field relationship-based selling model, an outbound phone based sales force, a field services organization and an online extranet. | |
Our Public Sector segment consists of sales made primarily to federal, state and local governments, as well as educational institutions. The Public Sector segment utilizes an outbound phone and field relationship-based selling model, as well as contract and bid business development teams and an online extranet. | |
Our MacMall segment consists of sales made via telephone, the Internet and one retail store to consumers, small businesses and creative professionals. | |
We have restated the consolidated statement of cash flows for the nine months ended September 30, 2013 to increase purchases of property and equipment and borrowing under a note payable by $1.7 million and decrease non-cash purchases of property and equipment by $1.7 million to correct an immaterial error from netting these amounts. | |
Summary_of_New_Accounting_Stan
Summary of New Accounting Standards | 9 Months Ended |
Sep. 30, 2014 | |
Summary of New Accounting Standards | ' |
Summary of New Accounting Standards | ' |
2. Summary of New Accounting Standards | |
In May 2014, the FASB issued Accounting Standards Update (ASU) No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”), which provides comprehensive guidance for revenue recognition. This ASU affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets. The core principle of the guidance provides that a company should recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, using either a full retrospective or modified retrospective method of adoption. We are currently evaluating the transition method we will adopt and the impact of the adoption of ASU 2014-09 on our consolidated financial statements. | |
In April 2014, the FASB issued ASU No. 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity (“ASU 2014-08”), which amended guidance on the presentation of financial statements and reporting discontinued operations and disclosures of disposals of components of an entity within property, plant and equipment. ASU 2014-08 amends the definition of a discontinued operation and requires entities to disclose additional information about disposal transactions that do not meet the discontinued-operations criteria. ASU 2014-08 is effective for disposals that occur in annual periods (and interim periods therein) beginning on or after December 15, 2014. We are currently evaluating the impact that ASU 2014-08 will have on our consolidated financial statements. | |
Discontinued_Operations
Discontinued Operations | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Discontinued Operations | ' | |||||||||||||
Discontinued Operations | ' | |||||||||||||
3. Discontinued Operations | ||||||||||||||
During the nine months ended September 30, 2014, we discontinued the operation of three of our retail stores, located in Huntington Beach and Torrance, California and Chicago, Illinois, and our OnSale and eCost businesses. The financial results of these operations, which were historically reported as part of our MacMall segment, have been excluded from our results from continuing operations for all periods presented herein and have been presented as discontinued operations. The revenues, operating and non-operating results of the discontinued operations are reflected in a single line item entitled “Loss from discontinued operations, net of taxes” on our Condensed Consolidated Statements of Operations, and the related assets and liabilities are presented in our Condensed Consolidated Balance Sheets in line items entitled “Current assets of discontinued operations,” “Non-current assets of discontinued operations” and “Current liabilities of discontinued operations” for all periods presented herein. | ||||||||||||||
The carrying amounts of major classes of assets and liabilities that have been included in such balance sheet line items, as described above, in our Condensed Consolidated Balance Sheets were as follows (in thousands): | ||||||||||||||
September 30, | December 31, | |||||||||||||
2014 | 2013 | |||||||||||||
Accounts receivable, net | $ | 53 | $ | 276 | ||||||||||
Inventories, net | 3 | 3,118 | ||||||||||||
Current assets of discontinued operations | 56 | 3,394 | ||||||||||||
Fixed assets, net | — | 801 | ||||||||||||
Intangible assets, net | — | 466 | ||||||||||||
Other non-current assets | 19 | 19 | ||||||||||||
Non-current assets of discontinued operations | 19 | 1,286 | ||||||||||||
Total assets of discontinued operations | $ | 75 | $ | 4,680 | ||||||||||
Accounts payable | $ | 64 | $ | 161 | ||||||||||
Accrued expenses and other current liabilities | 480 | 1,631 | ||||||||||||
Deferred revenue | 3 | 29 | ||||||||||||
Current liabilities of discontinued operations | $ | 547 | $ | 1,821 | ||||||||||
The operating results of our discontinued operations reported in “Loss from discontinued operations, net of taxes” in our Condensed Consolidated Statements of Operations were as follows (in thousands): | ||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Net sales | $ | 1,315 | $ | 9,839 | $ | 20,025 | $ | 39,848 | ||||||
Loss before income taxes | $ | (516 | ) | $ | (449 | ) | $ | (2,144 | ) | $ | (1,094 | ) | ||
Income tax benefit | (222 | ) | (184 | ) | (924 | ) | (458 | ) | ||||||
Loss from discontinued operations, net of taxes | $ | (294 | ) | $ | (265 | ) | $ | (1,220 | ) | $ | (636 | ) | ||
Goodwill_and_Intangible_Assets
Goodwill and Intangible Assets | 9 Months Ended | |||||||||||||||||||||
Sep. 30, 2014 | ||||||||||||||||||||||
Goodwill and Intangible Assets | ' | |||||||||||||||||||||
Goodwill and Intangible Assets | ' | |||||||||||||||||||||
4. Goodwill and Intangible Assets | ||||||||||||||||||||||
Goodwill | ||||||||||||||||||||||
There was no change in goodwill during the nine months ended September 30, 2014. Goodwill totaled $25.5 million as of September 30, 2014 and December 31, 2013, all of which related to our Commercial segment. | ||||||||||||||||||||||
Intangible Assets | ||||||||||||||||||||||
The following table sets forth the amounts recorded for intangible assets as of the periods presented (in thousands): | ||||||||||||||||||||||
Weighted | At September 30, 2014 | At December 31, 2013 | ||||||||||||||||||||
Average | ||||||||||||||||||||||
Estimated | ||||||||||||||||||||||
Useful Lives | Gross | Accumulated | Net | Gross | Accumulated | Net | ||||||||||||||||
(years) | Amount | Amortization | Amount | Amount | Amortization | Amount | ||||||||||||||||
Patent, trademarks & URLs | 12 | $ | 3,303 | (1) | $ | 296 | $ | 3,007 | $ | 3,286 | (1) | $ | 271 | $ | 3,015 | |||||||
Customer relationships | 10 | 2,550 | 1,099 | 1,451 | 2,550 | 908 | 1,642 | |||||||||||||||
Non-compete agreements | — | — | — | — | 250 | 223 | 27 | |||||||||||||||
Total intangible assets | $ | 5,853 | $ | 1,395 | $ | 4,458 | $ | 6,086 | $ | 1,402 | $ | 4,684 | ||||||||||
-1 | Included in the gross amounts for “Patent, trademarks & URLs” at September 30, 2014 and December 31, 2013 are $2.9 million of trademarks with indefinite useful lives that are not amortized. | |||||||||||||||||||||
Amortization expense for intangible assets was approximately $0.1 million and $0.5 million for the three months ended September 30, 2014 and 2013, and $0.2 million and $1.4 million for the nine months ended September 30, 2014 and 2013. Estimated amortization expense for intangible assets in each of the next five years and thereafter is as follows: $0.1 million in the remainder of 2014, $0.3 million in 2015, $0.3 million in 2016, $0.3 million in 2017, $0.3 million in 2018 and $0.4 million thereafter. | ||||||||||||||||||||||
Line_of_Credit_and_Notes_Payab
Line of Credit and Notes Payable | 9 Months Ended |
Sep. 30, 2014 | |
Line of Credit and Notes Payable | ' |
Line of Credit and Notes Payable | ' |
5. Line of Credit and Notes Payable | |
We maintain an asset-based revolving credit facility that provides for, among other things, (i) a credit limit of $200 million; (ii) LIBOR interest rate options that we can enter into with no limit on the maximum outstanding principal balance which may be subject to a LIBOR interest rate option; and (iii) a maturity date of September 30, 2017. The credit facility, which functions as a working capital line of credit with a borrowing base of inventory and accounts receivable, including certain credit card receivables, and a portion of the value of certain real estate, also includes a monthly unused line fee of 0.25% per year on the amount, if any, by which the Maximum Credit, as defined in the agreement, then in effect, exceeds the average daily principal balance of the outstanding borrowings during the immediately preceding month. | |
The credit facility is collateralized by substantially all of our assets. In addition to the security interest required by the credit facility, certain of our vendors have security interests in some of our assets related to their products. The credit facility has as its single financial covenant a minimum fixed charge coverage ratio (FCCR) requirement in the event an FCCR triggering event has occurred. An FCCR triggering event is comprised of maintaining certain specified daily and average excess availability thresholds. In the event the FCCR covenant applies, the fixed charge coverage ratio is 1.0 to 1.0 calculated on a trailing four-quarter basis as of the end of the last quarter immediately preceding such FCCR triggering event date. At September 30, 2014, we were in compliance with our financial covenant under the credit facility. | |
Loan availability under the line of credit fluctuates daily and is affected by many factors, including eligible assets on-hand, opportunistic purchases of inventory and availability and our utilization of early-pay discounts. At September 30, 2014, we had $55.5 million of net working capital advances outstanding under the line of credit. At September 30, 2014, the maximum credit line was $200 million and we had $59.2 million available to borrow for working capital advances under the line of credit. | |
In connection with, and as part of, our revolving credit facility, we maintain a term note with a principal balance of $4.34 million, payable in equal monthly principal installments, amortized over 84 months, beginning on April 1, 2013, plus interest at the prime rate with a LIBOR option. In the event of a default, termination or non-renewal of the revolving credit facility upon the maturity thereof, the term loan is payable in its entirety upon demand by the lenders. At September 30, 2014, we had $3.4 million outstanding under the term note. The remaining balance of our term note matures as follows: $0.2 million in the reminder of 2014, $0.6 million annually in each of the years 2015 through 2018, and $0.8 million thereafter. | |
In May 2013, we completed the purchase of real property adjacent to the building we own in Santa Monica, California for $3.0 million and financed $1.7 million of the purchase price with a sub-line under our revolving credit facility. The loan bears the same interest terms as our revolving credit facility. However, the principal amount is amortized monthly over an 84 month period similar to our term note, with monthly principal amortization of approximately $24,000 beginning in July 2014. Accordingly, at September 30, 2014, $0.3 million and $1.3 million were included in our “Notes Payable — current” and “Notes payable and other long-term liabilities” on our Condensed Consolidated Balance Sheets. | |
In June 2011, we entered into a credit agreement to finance the acquisition and improvement of the real property we purchased in March 2011 in El Segundo, California. The credit agreement provides for a five year term and a 25 year straight-line, monthly principal repayment amortization period with a balloon payment at maturity. Interest is variable, indexed to Prime plus a spread of 0.375% or LIBOR plus a spread of 2.375% at our option, payable monthly. At September 30, 2014, we had $9.0 million outstanding under this credit agreement, which matures as follows: $0.1 million in the remainder of 2014, $0.4 million in 2015 and $8.5 million in 2016. The loan is secured by the real property and contains financial covenants substantially similar to those of our existing asset-based credit facility. | |
In December 2012, we completed the purchase of 7.9 acres of land for approximately $1.1 million and have incurred additional costs of $12.1 million through September 30, 2014 towards the construction of a new cloud data center that we opened in late June 2014. The Tier III facility is strategically located in a data center-centric development in New Albany, Ohio. The new facility complements our two existing data centers and a 24/7 Integrated Operations Center (IOC) located in Atlanta, Georgia, enhancing our managed service offerings, including cloud services, data center hosting and management, remote monitoring and disaster recovery. In July 2013, we entered into a loan agreement for up to $7.725 million to finance the build out of the new data center. The loan agreement provides for draws during a construction period subsequent to reaching certain expenditure thresholds. Any outstanding borrowing during the construction period will bear interest at the prime rate plus 0.25%, followed by a five year term and a 25 year straight-line, monthly principal repayment amortization period with a balloon payment at maturity. Interest during the amortization period is variable, indexed to LIBOR plus a spread of 2.25%. At September 30, 2014, we had $6.3 million outstanding under this loan agreement. | |
At September 30, 2014, our effective weighted average annual interest rate on outstanding amounts under the credit facility, term note and notes payable was 2.24%. | |
The carrying amounts of our line of credit borrowings and notes payable approximate their fair value based upon the current rates offered to us for obligations of similar terms and remaining maturities. | |
Income_Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2014 | |
Income Taxes | ' |
Income Taxes | ' |
6. Income Taxes | |
We determine our interim income tax provision by applying our effective income tax rate expected to be applicable for the full fiscal year to pre-tax income (loss) for the interim periods. | |
Accounting for Uncertainty in Income Taxes | |
At September 30, 2014, we had no unrecognized tax positions. For the three months and nine months ended September 30, 2014 and 2013, we did not recognize any interest or penalties for uncertain tax positions. There were also no accrued interest and penalties at September 30, 2014 and December 31, 2013. We do not anticipate any significant increases in our unrecognized tax benefits within the next twelve months. Further, since we did not have any unrecognized tax benefits at September 30, 2014, we do not anticipate any significant decreases within the next twelve months. | |
We are subject to U.S. and foreign income tax examinations for years subsequent to 2009, and state income tax examinations for years following 2008. However, to the extent allowable by law, the tax authorities may have a right to examine prior periods when net operating losses or tax credits were generated and carried forward for subsequent utilization, and make adjustments up to the amount of the net operating losses or credit carryforwards. | |
Stockholders_Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2014 | |
Stockholders' Equity | ' |
Stockholders' Equity | ' |
7. Stockholders’ Equity | |
In September 2012, our Board of Directors approved a $10 million increase to our discretionary stock repurchase program, which was originally adopted in October 2008 with an initial authorized maximum of $10 million. Under the program, the shares may be repurchased from time to time at prevailing market prices, through open market or unsolicited negotiated transactions, depending on market conditions. We expect that the repurchase of our common stock under the program will be financed with existing working capital and amounts available under our existing credit facility. The repurchased shares are held as treasury stock. No limit was placed on the duration of the repurchase program. There is no guarantee as to the exact number of shares that we will repurchase. Subject to applicable securities laws, repurchases may be made at such times and in such amounts as our management deems appropriate. The program can also be discontinued at any time management feels additional purchases are not warranted. | |
We repurchased a total of 67,869 shares of our common stock under this program during the three months ended September 30, 2014 for a total cost of approximately $0.7 million. From the inception of the program in October 2008 through September 30, 2014, we have repurchased an aggregate total of 2,956,450 shares of our common stock for a total cost of $15.4 million. The repurchased shares are held as treasury stock. At September 30, 2014, we had $4.6 million available in stock repurchases under the program, subject to any limitations that may apply from time to time under our existing credit facility. | |
We have never paid cash dividends on our capital stock and our credit facility prohibits us from paying any cash dividends on our capital stock. Therefore, we do not currently anticipate paying dividends; we intend to retain any earnings to finance the growth and development of our business. | |
Earnings_Per_Share
Earnings Per Share | 9 Months Ended | |||||||||
Sep. 30, 2014 | ||||||||||
Earnings Per Share | ' | |||||||||
Earnings Per Share | ' | |||||||||
8. Earnings Per Share | ||||||||||
Basic earnings per share (“EPS”) is computed by dividing net income by the weighted average number of common shares outstanding during the reported periods. Diluted EPS reflects the potential dilution that could occur under the treasury stock method if stock options and other commitments to issue common stock were exercised, except in loss periods where the effect would be antidilutive. Approximately 527,000 and 264,000 shares of common stock for the three months ended September 30, 2014 and 2013, and approximately 509,000 and 788,000 shares of common stock for the nine months ended September 30, 2014 and 2013 underlying stock options have been excluded from the calculation of diluted EPS because the effect of their inclusion would be antidilutive. | ||||||||||
The reconciliation of the amounts used in the basic and diluted EPS computation was as follows (in thousands, except per share amounts): | ||||||||||
Net | Shares | Per Share | ||||||||
Income | Amounts | |||||||||
Three Months Ended September 30, 2014: | ||||||||||
Basic EPS | ||||||||||
Income from continuing operations | $ | 154 | 12,367 | $ | 0.01 | |||||
Effect of dilutive securities | ||||||||||
Dilutive effect of stock-based awards | — | 587 | ||||||||
Diluted EPS | ||||||||||
Adjusted income from continuing operations | $ | 154 | 12,954 | $ | 0.01 | |||||
Net | Shares | Per Share | ||||||||
Income | Amounts | |||||||||
Three Months Ended September 30, 2013: | ||||||||||
Basic EPS | ||||||||||
Income from continuing operations | $ | 2,189 | 11,593 | $ | 0.19 | |||||
Effect of dilutive securities | ||||||||||
Dilutive effect of stock-based awards | — | 441 | ||||||||
Diluted EPS | ||||||||||
Adjusted income from continuing operations | $ | 2,189 | 12,034 | $ | 0.18 | |||||
Nine Months Ended September 30, 2014: | ||||||||||
Basic EPS | ||||||||||
Income from continuing operations | $ | 5,112 | 12,217 | $ | 0.42 | |||||
Effect of dilutive securities | ||||||||||
Dilutive effect of stock-based awards | — | 654 | ||||||||
Diluted EPS | ||||||||||
Adjusted income from continuing operations | $ | 5,112 | 12,871 | $ | 0.40 | |||||
Nine Months Ended September 30, 2013: | ||||||||||
Basic EPS | ||||||||||
Income from continuing operations | $ | 6,959 | 11,530 | $ | 0.60 | |||||
Effect of dilutive securities | ||||||||||
Dilutive effect of stock-based awards | — | 314 | ||||||||
Diluted EPS | ||||||||||
Adjusted income from continuing operations | $ | 6,959 | 11,844 | $ | 0.58 | |||||
Segment_Information
Segment Information | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Segment Information | ' | ||||||||||||||||
Segment Information | ' | ||||||||||||||||
9. Segment Information | |||||||||||||||||
Summarized segment information for our continuing operations for the periods presented is as follows (in thousands): | |||||||||||||||||
Commercial | Public | MacMall | Corporate & | Consolidated | |||||||||||||
Sector | Other | ||||||||||||||||
Three Months Ended September 30, 2014 | |||||||||||||||||
Net sales | $ | 249,628 | $ | 64,017 | $ | 25,500 | $ | (7 | ) | $ | 339,138 | ||||||
Gross profit | 37,944 | 4,923 | 2,596 | 47 | 45,510 | ||||||||||||
Depreciation and amortization expense(1) | 569 | 9 | 21 | 2,047 | 2,646 | ||||||||||||
Operating profit | 12,851 | 1,756 | (209 | ) | (13,229 | ) | 1,169 | ||||||||||
Three Months Ended September 30, 2013 | |||||||||||||||||
Net sales | $ | 252,590 | $ | 55,691 | $ | 30,401 | $ | (3 | ) | $ | 338,679 | ||||||
Gross profit | 39,605 | 5,342 | 3,493 | (49 | ) | 48,391 | |||||||||||
Depreciation and amortization expense(1) | 978 | 15 | 29 | 1,773 | 2,795 | ||||||||||||
Operating profit | 15,649 | 1,768 | 699 | (13,523 | ) | 4,593 | |||||||||||
Nine Months Ended September 30, 2014 | |||||||||||||||||
Net sales | $ | 758,134 | $ | 151,320 | $ | 96,451 | $ | (18 | ) | $ | 1,005,887 | ||||||
Gross profit | 119,282 | 13,727 | 10,133 | 36 | 143,178 | ||||||||||||
Depreciation and amortization expense(1) | 1,784 | 35 | 107 | 6,011 | 7,937 | ||||||||||||
Operating profit | 44,724 | 4,376 | 1,074 | (38,809 | ) | 11,365 | |||||||||||
Nine Months Ended September 30, 2013 | |||||||||||||||||
Net sales | $ | 761,331 | $ | 147,907 | $ | 103,090 | $ | (68 | ) | $ | 1,012,260 | ||||||
Gross profit | 117,876 | 13,550 | 11,616 | (64 | ) | 142,978 | |||||||||||
Depreciation and amortization expense(1) | 3,038 | 44 | 73 | 5,154 | 8,309 | ||||||||||||
Operating profit | 47,405 | 3,649 | 2,437 | (39,084 | ) | 14,407 | |||||||||||
-1 | Primary fixed assets relating to network and servers are managed by the Corporate headquarters. As such, depreciation expense relating to such assets is included as part of Corporate & Other. | ||||||||||||||||
As of September 30, 2014 and December 31, 2013, we had total consolidated assets of $379.0 million and $434.8 million. Our management does not have available to them and does not use total assets measured at the segment level in allocating resources. Therefore, such information relating to segment assets is not provided herein. | |||||||||||||||||
Commitments_and_Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2014 | |
Commitments and Contingencies | ' |
Commitments and Contingencies | ' |
10. Commitments and Contingencies | |
Total rent expense under our operating leases, net of sublease income, was $1.2 million and $1.3 million in the three month periods ended September 30, 2014 and 2013, respectively, and $3.8 million and $4.0 million in the nine month periods ended September 30, 2014 and 2013. Some of our leases contain renewal options and escalation clauses, and require us to pay taxes, insurance and maintenance costs. | |
Legal Proceedings | |
We are not currently a party to any material legal proceedings, other than ordinary routine litigation incidental to the business. From time to time, we receive claims of and become subject to consumer protection, employment, intellectual property and other litigation related to the conduct of our business. Any such litigation could be costly and time consuming and could divert our management and key personnel from our business operations. In connection with any such litigation, we may be subject to significant damages or equitable remedies relating to the operation of our business. Any such litigation may materially harm our business, results of operations and financial condition. | |
Subsequent_Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2014 | |
Subsequent Events. | ' |
Subsequent Events | ' |
11. Subsequent Events | |
In October 2014, we made the final decision to discontinue the operation of our last retail store located in Santa Monica, California effective December 1, 2014. Upon closure of this store, we will no longer have any dedicated retail operations. Our Santa Monica retail store generated revenues of approximately $2.3 million and $3.2 million during the three months ended September 30, 2014 and 2013, respectively, and approximately $10.2 million and $10.5 million during the nine months ended September 30, 2014 and 2013, respectively. We are currently estimating the costs related to completing the closure of our Santa Monica retail store. | |
In October 2014, we gave notice to Sarcom Properties to exercise an option under a lease agreement dated February 19, 2010, as amended (the “Lease”), to purchase the building and real property located in Lewis Center, Ohio (the “Building”) for approximately $6,050,000 plus an unamortized leasehold improvement allowance, as defined in the lease agreement. We expect to enter into a purchase agreement with Sarcom Properties to effectuate the sale and purchase of the Building substantially in the form provided for in the Lease. The exact purchase price, which is expected to approximate $6.6 million, will be determined in accordance with the provisions of the Lease prior to closing of the purchase transaction, which we anticipate will occur on or before December 31, 2014, after completion of a due diligence period and customary closing conditions to be provided for in the purchase agreement. The Building is approximately 144,000 square feet of office and warehouse space, which we currently use as our second headquarters, sales office and distribution center. We expect to finance a portion of the purchase price with a long-term note. | |
Discontinued_Operations_Tables
Discontinued Operations (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Discontinued Operations | ' | |||||||||||||
Schedule of the carrying amounts of major classes of assets and liabilities of discontinued operations | ' | |||||||||||||
The carrying amounts of major classes of assets and liabilities that have been included in such balance sheet line items, as described above, in our Condensed Consolidated Balance Sheets were as follows (in thousands): | ||||||||||||||
September 30, | December 31, | |||||||||||||
2014 | 2013 | |||||||||||||
Accounts receivable, net | $ | 53 | $ | 276 | ||||||||||
Inventories, net | 3 | 3,118 | ||||||||||||
Current assets of discontinued operations | 56 | 3,394 | ||||||||||||
Fixed assets, net | — | 801 | ||||||||||||
Intangible assets, net | — | 466 | ||||||||||||
Other non-current assets | 19 | 19 | ||||||||||||
Non-current assets of discontinued operations | 19 | 1,286 | ||||||||||||
Total assets of discontinued operations | $ | 75 | $ | 4,680 | ||||||||||
Accounts payable | $ | 64 | $ | 161 | ||||||||||
Accrued expenses and other current liabilities | 480 | 1,631 | ||||||||||||
Deferred revenue | 3 | 29 | ||||||||||||
Current liabilities of discontinued operations | $ | 547 | $ | 1,821 | ||||||||||
Schedule of the operating results of discontinued operations | ' | |||||||||||||
The operating results of our discontinued operations reported in “Loss from discontinued operations, net of taxes” in our Condensed Consolidated Statements of Operations were as follows (in thousands): | ||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Net sales | $ | 1,315 | $ | 9,839 | $ | 20,025 | $ | 39,848 | ||||||
Loss before income taxes | $ | (516 | ) | $ | (449 | ) | $ | (2,144 | ) | $ | (1,094 | ) | ||
Income tax benefit | (222 | ) | (184 | ) | (924 | ) | (458 | ) | ||||||
Loss from discontinued operations, net of taxes | $ | (294 | ) | $ | (265 | ) | $ | (1,220 | ) | $ | (636 | ) | ||
Goodwill_and_Intangible_Assets1
Goodwill and Intangible Assets (Tables) | 9 Months Ended | |||||||||||||||||||||
Sep. 30, 2014 | ||||||||||||||||||||||
Goodwill and Intangible Assets | ' | |||||||||||||||||||||
Schedule of amounts recorded for intangible assets | ' | |||||||||||||||||||||
The following table sets forth the amounts recorded for intangible assets as of the periods presented (in thousands): | ||||||||||||||||||||||
Weighted | At September 30, 2014 | At December 31, 2013 | ||||||||||||||||||||
Average | ||||||||||||||||||||||
Estimated | ||||||||||||||||||||||
Useful Lives | Gross | Accumulated | Net | Gross | Accumulated | Net | ||||||||||||||||
(years) | Amount | Amortization | Amount | Amount | Amortization | Amount | ||||||||||||||||
Patent, trademarks & URLs | 12 | $ | 3,303 | (1) | $ | 296 | $ | 3,007 | $ | 3,286 | (1) | $ | 271 | $ | 3,015 | |||||||
Customer relationships | 10 | 2,550 | 1,099 | 1,451 | 2,550 | 908 | 1,642 | |||||||||||||||
Non-compete agreements | — | — | — | — | 250 | 223 | 27 | |||||||||||||||
Total intangible assets | $ | 5,853 | $ | 1,395 | $ | 4,458 | $ | 6,086 | $ | 1,402 | $ | 4,684 | ||||||||||
-1 | Included in the gross amounts for “Patent, trademarks & URLs” at September 30, 2014 and December 31, 2013 are $2.9 million of trademarks with indefinite useful lives that are not amortized. | |||||||||||||||||||||
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 9 Months Ended | |||||||||
Sep. 30, 2014 | ||||||||||
Earnings Per Share | ' | |||||||||
Schedule of reconciliation of the amounts used in the basic and diluted EPS computation | ' | |||||||||
The reconciliation of the amounts used in the basic and diluted EPS computation was as follows (in thousands, except per share amounts): | ||||||||||
Net | Shares | Per Share | ||||||||
Income | Amounts | |||||||||
Three Months Ended September 30, 2014: | ||||||||||
Basic EPS | ||||||||||
Income from continuing operations | $ | 154 | 12,367 | $ | 0.01 | |||||
Effect of dilutive securities | ||||||||||
Dilutive effect of stock-based awards | — | 587 | ||||||||
Diluted EPS | ||||||||||
Adjusted income from continuing operations | $ | 154 | 12,954 | $ | 0.01 | |||||
Net | Shares | Per Share | ||||||||
Income | Amounts | |||||||||
Three Months Ended September 30, 2013: | ||||||||||
Basic EPS | ||||||||||
Income from continuing operations | $ | 2,189 | 11,593 | $ | 0.19 | |||||
Effect of dilutive securities | ||||||||||
Dilutive effect of stock-based awards | — | 441 | ||||||||
Diluted EPS | ||||||||||
Adjusted income from continuing operations | $ | 2,189 | 12,034 | $ | 0.18 | |||||
Nine Months Ended September 30, 2014: | ||||||||||
Basic EPS | ||||||||||
Income from continuing operations | $ | 5,112 | 12,217 | $ | 0.42 | |||||
Effect of dilutive securities | ||||||||||
Dilutive effect of stock-based awards | — | 654 | ||||||||
Diluted EPS | ||||||||||
Adjusted income from continuing operations | $ | 5,112 | 12,871 | $ | 0.40 | |||||
Nine Months Ended September 30, 2013: | ||||||||||
Basic EPS | ||||||||||
Income from continuing operations | $ | 6,959 | 11,530 | $ | 0.60 | |||||
Effect of dilutive securities | ||||||||||
Dilutive effect of stock-based awards | — | 314 | ||||||||
Diluted EPS | ||||||||||
Adjusted income from continuing operations | $ | 6,959 | 11,844 | $ | 0.58 | |||||
Segment_Information_Tables
Segment Information (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Segment Information | ' | ||||||||||||||||
Schedule of segment information for the entity's continuing operations | ' | ||||||||||||||||
Summarized segment information for our continuing operations for the periods presented is as follows (in thousands): | |||||||||||||||||
Commercial | Public | MacMall | Corporate & | Consolidated | |||||||||||||
Sector | Other | ||||||||||||||||
Three Months Ended September 30, 2014 | |||||||||||||||||
Net sales | $ | 249,628 | $ | 64,017 | $ | 25,500 | $ | (7 | ) | $ | 339,138 | ||||||
Gross profit | 37,944 | 4,923 | 2,596 | 47 | 45,510 | ||||||||||||
Depreciation and amortization expense(1) | 569 | 9 | 21 | 2,047 | 2,646 | ||||||||||||
Operating profit | 12,851 | 1,756 | (209 | ) | (13,229 | ) | 1,169 | ||||||||||
Three Months Ended September 30, 2013 | |||||||||||||||||
Net sales | $ | 252,590 | $ | 55,691 | $ | 30,401 | $ | (3 | ) | $ | 338,679 | ||||||
Gross profit | 39,605 | 5,342 | 3,493 | (49 | ) | 48,391 | |||||||||||
Depreciation and amortization expense(1) | 978 | 15 | 29 | 1,773 | 2,795 | ||||||||||||
Operating profit | 15,649 | 1,768 | 699 | (13,523 | ) | 4,593 | |||||||||||
Nine Months Ended September 30, 2014 | |||||||||||||||||
Net sales | $ | 758,134 | $ | 151,320 | $ | 96,451 | $ | (18 | ) | $ | 1,005,887 | ||||||
Gross profit | 119,282 | 13,727 | 10,133 | 36 | 143,178 | ||||||||||||
Depreciation and amortization expense(1) | 1,784 | 35 | 107 | 6,011 | 7,937 | ||||||||||||
Operating profit | 44,724 | 4,376 | 1,074 | (38,809 | ) | 11,365 | |||||||||||
Nine Months Ended September 30, 2013 | |||||||||||||||||
Net sales | $ | 761,331 | $ | 147,907 | $ | 103,090 | $ | (68 | ) | $ | 1,012,260 | ||||||
Gross profit | 117,876 | 13,550 | 11,616 | (64 | ) | 142,978 | |||||||||||
Depreciation and amortization expense(1) | 3,038 | 44 | 73 | 5,154 | 8,309 | ||||||||||||
Operating profit | 47,405 | 3,649 | 2,437 | (39,084 | ) | 14,407 | |||||||||||
-1 | Primary fixed assets relating to network and servers are managed by the Corporate headquarters. As such, depreciation expense relating to such assets is included as part of Corporate & Other. | ||||||||||||||||
Basis_of_Presentation_and_Desc1
Basis of Presentation and Description of Company (Details) | 9 Months Ended |
Sep. 30, 2014 | |
segment | |
Basis of Presentation and Description of Company | ' |
Number of reportable operating segments | 3 |
Retail stores closed | ' |
Basis of Presentation and Description of Company | ' |
Number of retail stores discontinued | 3 |
Basis_of_Presentation_and_Desc2
Basis of Presentation and Description of Company (Details 2) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2014 | Sep. 30, 2014 | |
Commercial | ' | ' |
Basis of Presentation and Description of Company | ' | ' |
Revenue percentage | 74.00% | 75.00% |
Public Sector | ' | ' |
Basis of Presentation and Description of Company | ' | ' |
Revenue percentage | 19.00% | 15.00% |
MacMall | ' | ' |
Basis of Presentation and Description of Company | ' | ' |
Revenue percentage | 7.00% | 10.00% |
Number of retail stores | 1 | 1 |
Basis_of_Presentation_and_Desc3
Basis of Presentation and Description of Company (Details 3) (Immaterial error, Adjustment, USD $) | 9 Months Ended |
In Millions, unless otherwise specified | Sep. 30, 2013 |
Immaterial error | Adjustment | ' |
Increase purchases of property and equipment | $1.70 |
Increase borrowing under note payable | 1.7 |
Decrease non-cash purchase of property and equipment | $1.70 |
Discontinued_Operations_Detail
Discontinued Operations (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 |
Carrying amounts of major classes of assets and liabilities that have been included in Condensed Consolidated Balance Sheets | ' | ' | ' | ' | ' |
Current assets of discontinued operations | $56 | ' | $56 | ' | $3,394 |
Non-current assets of discontinued operations | 19 | ' | 19 | ' | 1,286 |
Current liabilities of discontinued operations | 547 | ' | 547 | ' | 1,821 |
Operating results of discontinued operations reported in "Loss from discontinued operation, net of taxes" in Condensed Consolidated Statements of Operations | ' | ' | ' | ' | ' |
Loss from discontinued operations, net of taxes | -294 | -265 | -1,220 | -636 | ' |
Discontinued Operations | ' | ' | ' | ' | ' |
Discontinued Operations | ' | ' | ' | ' | ' |
Number of retail stores discontinued | ' | ' | 3 | ' | ' |
Carrying amounts of major classes of assets and liabilities that have been included in Condensed Consolidated Balance Sheets | ' | ' | ' | ' | ' |
Accounts receivable, net | 53 | ' | 53 | ' | 276 |
Inventories, net | 3 | ' | 3 | ' | 3,118 |
Current assets of discontinued operations | 56 | ' | 56 | ' | 3,394 |
Fixed assets, net | ' | ' | ' | ' | 801 |
Intangible assets, net | ' | ' | ' | ' | 466 |
Other non-current assets | 19 | ' | 19 | ' | 19 |
Non-current assets of discontinued operations | 19 | ' | 19 | ' | 1,286 |
Total assets of discontinued operations | 75 | ' | 75 | ' | 4,680 |
Accounts payable | 64 | ' | 64 | ' | 161 |
Accrued expenses and other current liabilities | 480 | ' | 480 | ' | 1,631 |
Deferred revenue | 3 | ' | 3 | ' | 29 |
Current liabilities of discontinued operations | 547 | ' | 547 | ' | 1,821 |
Operating results of discontinued operations reported in "Loss from discontinued operation, net of taxes" in Condensed Consolidated Statements of Operations | ' | ' | ' | ' | ' |
Net sales | 1,315 | 9,839 | 20,025 | 39,848 | ' |
Loss before income taxes | -516 | -449 | -2,144 | -1,094 | ' |
Income tax benefit | -222 | -184 | -924 | -458 | ' |
Loss from discontinued operations, net of taxes | ($294) | ($265) | ($1,220) | ($636) | ' |
Goodwill_and_Intangible_Assets2
Goodwill and Intangible Assets (Details) (USD $) | 9 Months Ended | |
Sep. 30, 2014 | Dec. 31, 2013 | |
Goodwill | ' | ' |
Change in goodwill | $0 | ' |
Goodwill totaled | 25,510,000 | 25,510,000 |
Commercial | ' | ' |
Goodwill | ' | ' |
Goodwill totaled | $25,500,000 | $25,500,000 |
Goodwill_and_Intangible_Assets3
Goodwill and Intangible Assets (Details 2) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Dec. 31, 2013 |
Intangible Assets | ' | ' |
Gross Amount | $5,853 | $6,086 |
Accumulated Amortization | 1,395 | 1,402 |
Net Amount | 4,458 | 4,684 |
Patent, trademarks & URLs | ' | ' |
Intangible Assets | ' | ' |
Weighted Average Estimated Useful Lives | '12 years | ' |
Gross Amount | 3,303 | 3,286 |
Accumulated Amortization | 296 | 271 |
Net Amount | 3,007 | 3,015 |
Customer relationships | ' | ' |
Intangible Assets | ' | ' |
Weighted Average Estimated Useful Lives | '10 years | ' |
Gross Amount | 2,550 | 2,550 |
Accumulated Amortization | 1,099 | 908 |
Net Amount | 1,451 | 1,642 |
Non-compete agreements | ' | ' |
Intangible Assets | ' | ' |
Gross Amount | ' | 250 |
Accumulated Amortization | ' | 223 |
Net Amount | ' | $27 |
Goodwill_and_Intangible_Assets4
Goodwill and Intangible Assets (Details 3) (Trademarks, USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Trademarks | ' | ' |
Intangible assets | ' | ' |
Amount included in the total for Patents, trademarks and URLs | $2.90 | $2.90 |
Goodwill_and_Intangible_Assets5
Goodwill and Intangible Assets (Details 4) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Goodwill and Intangible Assets | ' | ' | ' | ' |
Total amortization expenses for intangible assets | $0.10 | $0.50 | $0.20 | $1.40 |
Estimated amortization expenses for intangible assets | ' | ' | ' | ' |
Remainder of 2014 | 0.1 | ' | 0.1 | ' |
2015 | 0.3 | ' | 0.3 | ' |
2016 | 0.3 | ' | 0.3 | ' |
2017 | 0.3 | ' | 0.3 | ' |
2018 | 0.3 | ' | 0.3 | ' |
Thereafter | $0.40 | ' | $0.40 | ' |
Line_of_Credit_and_Notes_Payab1
Line of Credit and Notes Payable (Details) (USD $) | 22 Months Ended | 9 Months Ended | 1 Months Ended | 9 Months Ended | 1 Months Ended | 1 Months Ended | |||||||||||||
Sep. 30, 2014 | Dec. 31, 2013 | 31-May-13 | Dec. 31, 2012 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Jun. 30, 2011 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | 31-May-13 | Jul. 31, 2013 | Sep. 30, 2014 | Jul. 31, 2013 | Jul. 31, 2013 | Jul. 31, 2013 | Sep. 30, 2014 | |
item | acre | Notes payable - current | Notes payable and other long-term liabilities | Asset-based revolving credit facility | Term note | Credit agreement | Credit agreement | Credit agreement | Credit agreement | Subline under revolving credit facility | Loan agreement to finance build out of new data center | Loan agreement to finance build out of new data center | Loan agreement to finance build out of new data center | Loan agreement to finance build out of new data center | Loan agreement to finance build out of new data center | Notes payable | |||
item | Prime rate | LIBOR | Maximum | Prime rate | LIBOR | ||||||||||||||
Line of Credit and Notes Payable | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Credit limit | ' | ' | ' | ' | ' | ' | $200,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unused line fee (as a percent) | ' | ' | ' | ' | ' | ' | 0.25% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fixed charge coverage ratio | ' | ' | ' | ' | ' | ' | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of trailing fiscal quarters used in calculating the fixed charge coverage ratio under debt covenants | ' | ' | ' | ' | ' | ' | 4 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net working capital advances outstanding | 55,454,000 | 110,499,000 | ' | ' | ' | ' | 55,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum credit line | ' | ' | ' | ' | ' | ' | 200,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount available to borrow for working capital advances | ' | ' | ' | ' | ' | ' | 59,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Principal balance of debt | ' | ' | ' | ' | ' | ' | ' | 4,340,000 | ' | ' | ' | ' | ' | ' | ' | 7,725,000 | ' | ' | ' |
Principal repayment amortization period | ' | ' | ' | ' | ' | ' | ' | '84 months | '25 years | ' | ' | ' | '84 months | '25 years | ' | ' | ' | ' | ' |
Outstanding amount of debt | ' | ' | ' | ' | ' | ' | ' | 3,400,000 | ' | ' | ' | ' | ' | ' | 6,300,000 | ' | ' | ' | ' |
Maturities of remaining balance of term note | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Remainder of 2014 | ' | ' | ' | ' | ' | ' | ' | 200,000 | ' | 100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2015 | ' | ' | ' | ' | ' | ' | ' | 600,000 | ' | 400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2016 | ' | ' | ' | ' | ' | ' | ' | 600,000 | ' | 8,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2017 | ' | ' | ' | ' | ' | ' | ' | 600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2018 | ' | ' | ' | ' | ' | ' | ' | 600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Thereafter | ' | ' | ' | ' | ' | ' | ' | 800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Additional disclosures | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Purchase price of real property | ' | ' | 3,000,000 | 1,100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Real property purchase amount financed | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,700,000 | ' | ' | ' | ' | ' | ' |
Monthly principal amortization amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 24,000 | ' | ' | ' | ' | ' | ' |
Real property loan | ' | ' | ' | ' | 300,000 | 1,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Borrowing term | ' | ' | ' | ' | ' | ' | ' | ' | '5 years | ' | ' | ' | ' | '5 years | ' | ' | ' | ' | ' |
Variable interest rate basis | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'Prime | 'LIBOR | ' | ' | ' | ' | 'Prime | 'LIBOR | ' |
Percentage points added to the reference rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.38% | 2.38% | ' | ' | ' | ' | 0.25% | 2.25% | ' |
Amount outstanding under credit agreement | ' | ' | ' | ' | ' | ' | ' | ' | ' | 9,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Area of land purchased | ' | ' | ' | 7.9 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Additional costs incurred for construction of a new cloud data center | $12,100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of existing data centers | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Effective weighted average annual interest rate (as a percent) | ' | ' | ' | ' | ' | ' | 2.24% | 2.24% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2.24% |
Income_Taxes_Details
Income Taxes (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Income Taxes | ' | ' |
Unrecognized tax positions | $0 | ' |
Accrued interest and penalties | $0 | $0 |
Stockholders_Equity_Details
Stockholders' Equity (Details) (USD $) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 72 Months Ended | |
In Millions, except Share data, unless otherwise specified | Sep. 30, 2012 | Oct. 31, 2008 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 |
Stockholders' Equity | ' | ' | ' | ' | ' |
Increase in maximum amount approved under common stock repurchase program | $10 | ' | ' | ' | ' |
Maximum amount authorized under the common stock repurchase program | ' | 10 | ' | ' | ' |
Shares of common stock repurchased | ' | ' | 67,869 | ' | 2,956,450 |
Aggregate cost of shares of common stock repurchased | ' | ' | 0.7 | ' | 15.4 |
Available authorized repurchase amount | ' | ' | ' | $4.60 | ' |
Earnings_Per_Share_Details
Earnings Per Share (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Earnings Per Share | ' | ' | ' | ' |
Shares of common stock underlying stock options excluded from the calculation of diluted EPS | 527,000 | 264,000 | 509,000 | 788,000 |
Basic EPS - Net Income | ' | ' | ' | ' |
Income from continuing operations | $154 | $2,189 | $5,112 | $6,959 |
Shares | 12,367,000 | 11,593,000 | 12,217,000 | 11,530,000 |
Per Share Amounts (in dollars per share) | $0.01 | $0.19 | $0.42 | $0.60 |
Effect of dilutive securities - Dilutive effect of stock - based awards | ' | ' | ' | ' |
Shares | 587,000 | 441,000 | 654,000 | 314,000 |
Diluted EPS - Adjusted net income | ' | ' | ' | ' |
Adjusted income from continuing operations | $154 | $2,189 | $5,112 | $6,959 |
Shares | 12,954,000 | 12,034,000 | 12,871,000 | 11,844,000 |
Per Share Amounts (in dollars per share) | $0.01 | $0.18 | $0.40 | $0.58 |
Segment_Information_Details
Segment Information (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 |
Segment Information | ' | ' | ' | ' | ' |
Net sales | $339,138 | $338,679 | $1,005,887 | $1,012,260 | ' |
Gross profit | 45,510 | 48,391 | 143,178 | 142,978 | ' |
Depreciation and amortization expense (1) | 2,646 | 2,795 | 7,937 | 8,309 | ' |
Operating profit | 1,169 | 4,593 | 11,365 | 14,407 | ' |
Total consolidated assets | 378,968 | ' | 378,968 | ' | 434,822 |
Commercial | ' | ' | ' | ' | ' |
Segment Information | ' | ' | ' | ' | ' |
Net sales | 249,628 | 252,590 | 758,134 | 761,331 | ' |
Gross profit | 37,944 | 39,605 | 119,282 | 117,876 | ' |
Depreciation and amortization expense (1) | 569 | 978 | 1,784 | 3,038 | ' |
Operating profit | 12,851 | 15,649 | 44,724 | 47,405 | ' |
Public Sector | ' | ' | ' | ' | ' |
Segment Information | ' | ' | ' | ' | ' |
Net sales | 64,017 | 55,691 | 151,320 | 147,907 | ' |
Gross profit | 4,923 | 5,342 | 13,727 | 13,550 | ' |
Depreciation and amortization expense (1) | 9 | 15 | 35 | 44 | ' |
Operating profit | 1,756 | 1,768 | 4,376 | 3,649 | ' |
MacMall | ' | ' | ' | ' | ' |
Segment Information | ' | ' | ' | ' | ' |
Net sales | 25,500 | 30,401 | 96,451 | 103,090 | ' |
Gross profit | 2,596 | 3,493 | 10,133 | 11,616 | ' |
Depreciation and amortization expense (1) | 21 | 29 | 107 | 73 | ' |
Operating profit | -209 | 699 | 1,074 | 2,437 | ' |
Corporate and Other | ' | ' | ' | ' | ' |
Segment Information | ' | ' | ' | ' | ' |
Net sales | -7 | -3 | -18 | -68 | ' |
Gross profit | 47 | -49 | 36 | -64 | ' |
Depreciation and amortization expense (1) | 2,047 | 1,773 | 6,011 | 5,154 | ' |
Operating profit | ($13,229) | ($13,523) | ($38,809) | ($39,084) | ' |
Commitments_and_Contingencies_
Commitments and Contingencies (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Commitments and Contingencies | ' | ' | ' | ' |
Total rent expense under operating leases, net of sublease income | $1.20 | $1.30 | $3.80 | $4 |
Subsequent_Events_Details
Subsequent Events (Details) (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 1 Months Ended | ||||||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Oct. 31, 2014 | Oct. 31, 2014 | |
acre | Subsequent Events | Subsequent Events | Subsequent Events | Subsequent Events | Subsequent Events | Subsequent Events | |||||
Discontinued Operations | Discontinued Operations | Discontinued Operations | Discontinued Operations | Sarcom Properties, Inc | Sarcom Properties, Inc | ||||||
Building and real property located in Ohio | Building and real property located in Ohio | ||||||||||
sqft | Expected costs | ||||||||||
Subsequent Event | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenue, Net | $339,138,000 | $338,679,000 | $1,005,887,000 | $1,012,260,000 | ' | $2,300,000 | $3,200,000 | $10,200,000 | $10,500,000 | ' | ' |
Property, Plant and Equipment, Additions Excluding Leasehold Improvements Allowance | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6,050,000 |
Property, Plant and Equipment, Additions | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $6,600,000 |
Building space in square feet | ' | ' | ' | ' | 7.9 | ' | ' | ' | ' | 144,000 | ' |