Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | 6-May-15 | |
Document and Entity Information | ||
Entity Registrant Name | PCM, INC. | |
Entity Central Index Key | 937941 | |
Document Type | 10-Q | |
Document Period End Date | 31-Mar-15 | |
Amendment Flag | FALSE | |
Current Fiscal Year End Date | -19 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 12,050,001 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $7,289 | $8,892 |
Accounts receivable, net of allowances of $410 and $426 | 187,575 | 199,604 |
Inventories | 42,939 | 50,687 |
Prepaid expenses and other current assets | 10,047 | 15,936 |
Deferred income taxes | 4,857 | 3,922 |
Current assets of discontinued operations | 429 | 26 |
Total current assets | 253,136 | 279,067 |
Property and equipment, net | 86,137 | 74,368 |
Goodwill | 25,510 | 25,510 |
Intangible assets, net | 4,587 | 4,673 |
Other assets | 6,295 | 5,558 |
Non-current assets of discontinued operations | 14 | |
Total assets | 375,665 | 389,190 |
Current liabilities: | ||
Accounts payable | 117,509 | 122,333 |
Accrued expenses and other current liabilities | 24,716 | 26,107 |
Deferred revenue | 3,891 | 10,089 |
Line of credit | 49,240 | 52,795 |
Notes payable - current | 4,091 | 3,741 |
Current liabilities of discontinued operations | 486 | 577 |
Total current liabilities | 199,933 | 215,642 |
Notes payable and other long-term liabilities | 34,993 | 28,015 |
Deferred income taxes | 12,167 | 12,217 |
Total liabilities | 247,093 | 255,874 |
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; 15,789,497 and 15,758,714 shares issued; and 12,223,919 and 12,267,550 shares outstanding | 16 | 16 |
Additional paid-in capital | 121,270 | 120,915 |
Treasury stock, at cost: 3,565,578 and 3,491,164 shares | -18,192 | -17,472 |
Accumulated other comprehensive income | 117 | 941 |
Retained earnings | 25,361 | 28,916 |
Total stockholders' equity | 128,572 | 133,316 |
Total liabilities and stockholders' equity | $375,665 | $389,190 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, except Share data, unless otherwise specified | ||
CONSOLIDATED BALANCE SHEETS | ||
Accounts receivable, allowances (in dollars) | $410 | $426 |
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 | 15,789,497 | 15,758,714 |
Common stock, shares outstanding | 12,223,919 | 12,267,550 |
Treasury stock, shares | 3,565,578 | 3,491,164 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
CONSOLIDATED STATEMENTS OF OPERATIONS | ||
Net sales | $295,959 | $325,337 |
Cost of goods sold | 256,854 | 276,632 |
Gross profit | 39,105 | 48,705 |
Selling, general and administrative expenses | 44,312 | 42,577 |
Operating profit (loss) | -5,207 | 6,128 |
Interest expense, net | 771 | 943 |
Income (loss) from continuing operations before income taxes | -5,978 | 5,185 |
Income tax expense (benefit) | -2,454 | 2,151 |
Income (loss) from continuing operations | -3,524 | 3,034 |
Loss from discontinued operations, net of taxes | -31 | -147 |
Net income (loss) | ($3,555) | $2,887 |
Basic EPS: | ||
Income (loss) from continuing operations (in dollars per share) | ($0.29) | $0.25 |
Loss from discontinued operations, net of taxes (in dollars per share) | ($0.01) | |
Net income (loss) (in dollars per share) | ($0.29) | $0.24 |
Diluted EPS: | ||
Income (loss) from continuing operations (in dollars per share) | ($0.29) | $0.24 |
Loss from discontinued operations, net of taxes (in dollars per share) | ($0.01) | |
Net income (loss) (in dollars per share) | ($0.29) | $0.23 |
Weighted average number of common shares outstanding: | ||
Basic (in shares) | 12,230 | 11,932 |
Diluted (in shares) | 12,230 | 12,715 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||
Net income (loss) | ($3,555) | $2,887 |
Other comprehensive loss: | ||
Foreign currency translation adjustments | -824 | -379 |
Total other comprehensive loss | -824 | -379 |
Comprehensive income (loss) | ($4,379) | $2,508 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Cash Flows From Operating Activities | ||
Net income (loss) | ($3,555) | $2,887 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 2,699 | 2,760 |
Provision for deferred income taxes | -1,031 | 130 |
Excess tax benefit related to stock option exercises | -6 | -205 |
Non-cash stock-based compensation | 421 | 331 |
Change in operating assets and liabilities: | ||
Accounts receivable | 11,619 | 18,697 |
Inventories | 7,755 | 45,314 |
Prepaid expenses and other current assets | 5,627 | 4,360 |
Other assets | -821 | -647 |
Accounts payable | -5,578 | -52,110 |
Accrued expenses and other current liabilities | -2,404 | 1,621 |
Deferred revenue | -6,197 | -5,201 |
Total adjustments | 12,084 | 15,050 |
Net cash provided by operating activities | 8,529 | 17,937 |
Cash Flows From Investing Activities | ||
Purchases of property and equipment | -13,930 | -8,108 |
Net cash used in investing activities | -13,930 | -8,108 |
Cash Flows From Financing Activities | ||
Net payments under line of credit | -3,555 | -20,185 |
Payment for deferred financing costs | -174 | |
Borrowing under note payable | 9,506 | 4,208 |
Payments under notes payable | -1,006 | -322 |
Change in book overdraft | 706 | 1,471 |
Payments of obligations under capital lease | -587 | -798 |
Proceeds from stock issued under stock option plans | 26 | 3,151 |
Excess tax benefit related to stock option exercises | 6 | 205 |
Common shares repurchased and held in treasury | -720 | |
Net cash provided by (used in) financing activities | 4,202 | -12,270 |
Effect of foreign currency on cash flow | -404 | -149 |
Net change in cash and cash equivalents | -1,603 | -2,590 |
Cash and cash equivalents at beginning of the period | 8,892 | 9,992 |
Cash and cash equivalents at end of the period | 7,289 | 7,402 |
Supplemental Cash Flow Information | ||
Interest paid | 788 | 937 |
Income taxes paid | 215 | 2,379 |
Supplemental Non-Cash Investing and Financing Activities | ||
Financed purchase of property and equipment | $453 | $2,678 |
Basis_of_Presentation_and_Desc
Basis of Presentation and Description of Company | 3 Months Ended |
Mar. 31, 2015 | |
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 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 small, medium and enterprise 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 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, 2014 filed with the SEC on March 16, 2015 and all of our other periodic filings, including Current Reports on Form 8-K, filed with the SEC after the end of our 2014 fiscal year and through the date of this report. | |
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 2014, we discontinued the operation of all four of our retail stores, located in Huntington Beach, Santa Monica and Torrance, California and Chicago, Illinois, and our OnSale and eCost businesses during. 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. | |
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 March 31, 2015, we generated approximately 80% of our revenue in our Commercial segment, 12% of our revenue in our Public Sector segment and 8% 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 and the Internet to consumers, small businesses and creative professionals. | |
We have restated the Condensed Consolidated Statement of Cash Flows for the three months ended March 31, 2014 to increase purchases of property and equipment and borrowing under a note payable by $4.1 million and decrease non-cash purchases of property and equipment by $4.1 million to correct an immaterial error from netting these amounts. | |
New_Accounting_Standards
New Accounting Standards | 3 Months Ended |
Mar. 31, 2015 | |
New Accounting Standards | |
New Accounting Standards | 2. New Accounting Standards |
In February 2015, the FASB issued ASU 2015-02, “Consolidation,” which amended the analysis that a reporting entity must perform to determine whether it should consolidate certain types of legal entities. ASU 2015-02 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015. Early adoption is permitted, including adoption in an interim period. Adoption of ASU 2015-02 is not expected to have a material effect on our consolidated financial statements. | |
In January 2015, the FASB issued ASU 2015-01, “Income Statement - Extraordinary and Unusual Items,” with the objective of simplifying income statement presentation requirements by eliminating the concept of extraordinary items from GAAP, but retaining current presentation and disclosure requirements for an event or transaction that is of an unusual nature or of a type that indicates infrequency of occurrence. ASU 2015-01 is effective prospectively for fiscal years and interim periods within those fiscal years, beginning after December 15, 2015, with early adoption permitted. Adoption of ASU 2015-01 is not expected to have a material effect 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 had no disposals during the three months ended March 31, 2015. The adoption of ASU 2014-08 effective January 1, 2015 did not have an effect on our consolidated financial statements. | |
Goodwill_and_Intangible_Assets
Goodwill and Intangible Assets | 3 Months Ended | |||||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||||
Goodwill and Intangible Assets | ||||||||||||||||||||||
Goodwill and Intangible Assets | 3. Goodwill and Intangible Assets | |||||||||||||||||||||
Goodwill | ||||||||||||||||||||||
There was no change in goodwill during the three months ended March 31, 2015. Goodwill totaled $25.5 million as of March 31, 2015 and December 31, 2014, 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 March 31, 2015 | At December 31, 2014 | ||||||||||||||||||||
Average | ||||||||||||||||||||||
Estimated | ||||||||||||||||||||||
Useful Lives | Gross | Accumulated | Net | Gross | Accumulated | Net | ||||||||||||||||
(years) | Amount | Amortization | Amount | Amount | Amortization | Amount | ||||||||||||||||
Patent, trademarks & URLs | 8 | $ | 3,300 | -1 | $ | 36 | $ | 3,264 | $ | 3,593 | -1 | $ | 307 | $ | 3,286 | |||||||
Customer relationships | 10 | 2,550 | 1,227 | 1,323 | 2,550 | 1,163 | 1,387 | |||||||||||||||
Total intangible assets | $ | 5,850 | $ | 1,263 | $ | 4,587 | $ | 6,143 | $ | 1,470 | $ | 4,673 | ||||||||||
-1 | Included in the gross amounts for “Patent, trademarks & URLs” at March 31, 2015 and December 31, 2014 are $2.9 million of trademarks with indefinite useful lives that are not amortized. | |||||||||||||||||||||
Amortization expense for intangible assets was approximately $0.1 million for each of the three months ended March 31, 2015 and 2014. Estimated amortization expense for intangible assets in each of the next five years and thereafter is as follows: $0.2 million in the remainder of 2015, $0.3 million in each of the years 2016 through 2019 and $0.2 million thereafter. | ||||||||||||||||||||||
Discontinued_Operations
Discontinued Operations | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Discontinued Operations | ||||||||
Discontinued Operations | 4. Discontinued Operations | |||||||
During 2014, we discontinued the operation of all four of our retail stores, located in Huntington Beach, Santa Monica 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. 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 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): | ||||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
Accounts receivable, net | $ | 429 | $ | 19 | ||||
Inventories, net | — | 7 | ||||||
Current assets of discontinued operations | 429 | 26 | ||||||
Other non-current assets | — | 14 | ||||||
Non-current assets of discontinued operations | — | 14 | ||||||
Total assets of discontinued operations | $ | 429 | $ | 40 | ||||
Accounts payable | $ | 118 | $ | 116 | ||||
Accrued expenses and other current liabilities | 365 | 458 | ||||||
Deferred revenue | 3 | 3 | ||||||
Current liabilities of discontinued operations | $ | 486 | $ | 577 | ||||
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 March 31, | ||||||||
2015 | 2014 | |||||||
Net sales | $ | (6 | ) | $ | 13,716 | |||
Loss before income taxes | $ | (31 | ) | $ | (261 | ) | ||
Income tax benefit | — | (114 | ) | |||||
Loss from discontinued operations, net of taxes | $ | (31 | ) | $ | (147 | ) | ||
Debt
Debt | 3 Months Ended | ||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||
Debt | |||||||||||||||||||||||
Debt | 5. Debt | ||||||||||||||||||||||
The following table sets forth our outstanding debt as of the periods presented (in thousands): | |||||||||||||||||||||||
March 31, | December 31, | ||||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||||
Revolving credit facility, Prime or LIBOR plus 1.75%, maturing in September 2017 | $ | 49,240 | $ | 52,795 | |||||||||||||||||||
Note payable, Prime or LIBOR plus 1.75%, maturing in September 2017 | 3,100 | 3,255 | |||||||||||||||||||||
Note payable, Prime or LIBOR plus 1.75%, maturing in September 2017 | 1,498 | 1,571 | |||||||||||||||||||||
Note payable, greater of 2% or LIBOR plus 2.15%, maturing in April 2022 | 4,930 | — | |||||||||||||||||||||
Note payable, LIBOR plus 2.25%, maturing in January 2022 | 4,537 | — | |||||||||||||||||||||
Notes payable, 4.12%, 4.33% and 4.60%, maturing in March 2017 | 4,043 | 4,524 | |||||||||||||||||||||
Note payable, LIBOR plus 2.25%, maturing in April 2022 | 7,648 | 7,725 | |||||||||||||||||||||
Note payable, Prime plus 0.375% or LIBOR plus 2.375%, maturing in September 2016 | 8,817 | 8,917 | |||||||||||||||||||||
Note payable, 4.65% maturing in April 2015 | 82 | 164 | |||||||||||||||||||||
Total | 83,895 | 78,951 | |||||||||||||||||||||
Less: Total current debt | 53,331 | 56,536 | |||||||||||||||||||||
Total non-current debt | $ | 30,564 | $ | 22,415 | |||||||||||||||||||
The following table sets forth the maturities of our outstanding debt balance as of March 31, 2015 (in thousands): | |||||||||||||||||||||||
Remainder of | 2016 | 2017 | 2018 | 2019 | Thereafter | Total | |||||||||||||||||
2015 | |||||||||||||||||||||||
Total long-term debt obligations | $ | 3,076 | $ | 12,203 | $ | 2,170 | $ | 1,645 | $ | 7,825 | $ | 7,736 | $ | 34,655 | |||||||||
Revolving credit facility | — | 49,240 | — | — | — | — | 49,240 | ||||||||||||||||
Total | $ | 3,076 | $ | 61,443 | $ | 2,170 | $ | 1,645 | $ | 7,825 | $ | 7,736 | $ | 83,895 | |||||||||
Line of Credit and Related Notes | |||||||||||||||||||||||
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 March 31, 2015, 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 March 31, 2015, we had $61.0 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 of approximately $52,000, 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. | |||||||||||||||||||||||
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 and interest is payable monthly. The principal amount is amortized monthly over an 84 month period similar to our term note, with monthly principal amortization of approximately $24,000 that began in July 2014. | |||||||||||||||||||||||
Other Notes Payable | |||||||||||||||||||||||
In March 2015, we completed the purchase of real property in Irvine, California for approximately $5.8 million and financed $4.9 million with a long-term note. The loan agreement provides for a seven year term and a 25 year straight-line, monthly principal repayment amortization period that begins on May 1, 2015 with a balloon payment at maturity in April 2022. The loan is secured by the real property and contains financial covenants substantially similar to those of our existing asset-based credit facility. | |||||||||||||||||||||||
In January 2015, we completed the purchase of certain real property in Lewis Center, Ohio for approximately $6.6 million and financed $4.575 million with a long-term note. The $4.575 million term note provides for a seven year term and a 25 year straight-line, monthly principal repayment amortization period that began in February 2015 with a balloon payment at maturity in January 2022. The loan is secured by the real property and contains financial covenants substantially similar to those of our existing asset-based credit facility. | |||||||||||||||||||||||
Throughout 2014, we entered into three financing arrangements with a bank to finance the costs of equipment, software and professional services related to our ERP upgrade. The total amount financed was $5.6 million, with a quarterly repayment schedule maturing in March 2017. | |||||||||||||||||||||||
In December 2012, we completed the purchase of 7.9 acres of land for approximately $1.1 million and have incurred additional costs of $12.2 million through December 31, 2014 towards the construction of a new cloud data center that we opened in June 2014. 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 a five year term and a 25 year straight-line, monthly principal repayment amortization period with a balloon payment at maturity in January 2020. The loan is secured by the real property and contains financial covenants substantially similar to those of our existing asset-based credit facility. | |||||||||||||||||||||||
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 in September 2016. The loan is secured by the real property and contains financial covenants substantially similar to those of our existing asset-based credit facility. | |||||||||||||||||||||||
At March 31, 2015, the effective weighted average annual interest rate on our outstanding amounts under the credit facility, term note and variable interest rate notes payable was 2.25%. | |||||||||||||||||||||||
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 | 3 Months Ended |
Mar. 31, 2015 | |
Income Taxes | |
Income Taxes | 6. Income Taxes |
Accounting for Uncertainty in Income Taxes | |
At March 31, 2015, we had no unrecognized tax positions. For the three months ended March 31, 2015 and 2014, we did not recognize any interest or penalties for uncertain tax positions. There were also no accrued interest and penalties at March 31, 2015 and 2014. 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 March 31, 2015, 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 2010. 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 | 3 Months Ended |
Mar. 31, 2015 | |
Stockholders' Equity | |
Stockholders' Equity | 7. Stockholders’ Equity |
We have a board approved discretionary stock repurchase program under which 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 74,414 shares of our common stock under this program during the three months ended March 31, 2015 for a total cost of approximately $0.7 million. From the inception of the program in October 2008 through March 31, 2015, we have repurchased an aggregate total of 3,148,900 shares of our common stock for a total cost of $17.2 million. At March 31, 2015, we had $2.8 million available in stock repurchases under this discretionary stock repurchase 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_Loss_Per_Share
Earnings (Loss) Per Share | 3 Months Ended | |||||||||
Mar. 31, 2015 | ||||||||||
Earning (Loss) per share | ||||||||||
Earnings Per Share | 8. Earnings (Loss) Per Share | |||||||||
Basic earnings (loss) 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. For the three months ended March 31, 2015, since we reported a loss from continuing operations, all potential shares totaling 584,831 were excluded from the computation of diluted EPS as their inclusion would have been antidilutive. For the three months ended March 31, 2015, had we reported income from continuing operations, approximately 475,000 common shares would have been excluded from the calculation of diluted EPS because the effect of their inclusion would have been antidilutive. For the three months ended March 31, 2014, approximately 428,000 common shares 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): | ||||||||||
Income From | Weighted Average | Per Share | ||||||||
Continuing | Number of | Amounts | ||||||||
Operations | Common Shares | |||||||||
Outstanding | ||||||||||
Three Months Ended March 31, 2015: | ||||||||||
Basic EPS | ||||||||||
Loss from continuing operations | $ | (3,524 | ) | 12,230 | $ | (0.29 | ) | |||
Effect of dilutive securities | ||||||||||
Dilutive effect of stock-based awards | — | — | ||||||||
Diluted EPS | ||||||||||
Adjusted loss from continuing operations | $ | (3,524 | ) | 12,230 | $ | (0.29 | ) | |||
Three Months Ended March 31, 2014: | ||||||||||
Basic EPS | ||||||||||
Income from continuing operations | $ | 3,034 | 11,932 | $ | 0.25 | |||||
Effect of dilutive securities | ||||||||||
Dilutive effect of stock-based awards | — | 783 | ||||||||
Diluted EPS | ||||||||||
Adjusted income from continuing operations | $ | 3,034 | 12,715 | $ | 0.24 | |||||
Segment_Information
Segment Information | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
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 March 31, 2015 | |||||||||||||||||
Net sales | $ | 236,534 | $ | 36,601 | $ | 22,834 | $ | (10 | ) | $ | 295,959 | ||||||
Gross profit | 33,701 | 3,342 | 2,063 | (1 | ) | 39,105 | |||||||||||
Depreciation and amortization expense(1) | 646 | 7 | 18 | 2,028 | 2,699 | ||||||||||||
Operating profit (loss) | 7,819 | 675 | (70 | ) | (13,631 | ) | (5,207 | ) | |||||||||
Three Months Ended March 31, 2014 | |||||||||||||||||
Net sales | $ | 252,121 | $ | 36,420 | $ | 36,799 | $ | (3 | ) | $ | 325,337 | ||||||
Gross profit | 41,534 | 3,542 | 3,631 | (2 | ) | 48,705 | |||||||||||
Depreciation and amortization expense(1) | 612 | 13 | 22 | 1,926 | 2,573 | ||||||||||||
Operating profit (loss) | 17,658 | 574 | 821 | (12,925 | ) | 6,128 | |||||||||||
-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 March 31, 2015 and December 31, 2014, we had total consolidated assets of $375.7 million and $389.2 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 | 3 Months Ended |
Mar. 31, 2015 | |
Commitments and Contingencies | |
Commitments and Contingencies | 10. Commitments and Contingencies |
Total rent expense under our operating leases, net of sublease income, was $1.0 million and $1.2 million in each of the three month periods ended March 31, 2015 and 2014. 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 | 3 Months Ended |
Mar. 31, 2015 | |
Subsequent Events. | |
Subsequent Events | 11. Subsequent Events |
On April 1, 2015, we completed the acquisition of certain assets of En Pointe Technologies Sales, Inc. (“En Pointe”), one of the nation’s largest independent IT solutions providers, headquartered in Southern California. We acquired the assets of En Pointe’s IT solutions provider business, excluding current tangible assets, such as accounts receivable and inventory. Under the terms of the agreement, we paid an initial purchase price of $15 million in cash and will pay certain contingent earn-out consideration, including 22.5% of the future adjusted gross profit of the business and 10% of certain service revenues over the next three years. The assets were acquired by an indirect wholly-owned subsidiary of PCM, which subsidiary now operates under the En Pointe brand. The accounting for the acquisition of En Pointe is currently preliminary. The acquisition occurred in the second quarter of 2015, and we continue to obtain information relative to the fair values of certain assets acquired, certain liabilities assumed and any non-controlling interests in the transaction. Acquired assets and assumed liabilities include, but are not limited to, fixed assets, licenses, intangible assets and professional liabilities. The valuations will be based on appraisal reports, discounted cash flow analyses, actuarial analyses or other appropriate valuation techniques to determine the fair value of the assets acquired or liabilities assumed. We expect to finalize the purchase price allocation for En Pointe as soon as practical. | |
On April 7, 2015, we entered into a Fourth Amendment to Third Amended and Restated Loan and Security Agreement (the “Fourth Amendment”) with certain lenders and Wells Fargo Capital Finance, LLC as administrative and collateral agent. The Fourth Amendment provides for, among other things: i) an increase in the Maximum Credit, as defined in the Fourth Amendment, from $200,000,000 to $250,000,000; ii) a Maturity Date of September 30, 2018; iii) an accordion feature to increase our Maximum Credit by $25 million at the option of the Borrowers and satisfaction of certain conditions; and iv) interest at LIBOR plus a margin, depending on average excess availability under the revolving line, ranging from 1.50% to 1.75%. | |
On April 28, 2015, our Board of Directors approved a $10 million increase to our discretionary stock repurchase program originally adopted in October 2008 (the “Stock Repurchase Program”). Since the inception of the program through April 28, 2015, we repurchased an aggregate total of 3,310,268 shares of our common stock for a total cost of $18.7 million. During the quarter ended March 31, 2015, we repurchased 74,414 shares for $0.7 million. As a result of the $10 million increase to our Stock Repurchase Program, as of April 28, 2015, we will have $11.3 million available in stock repurchases, subject to any limitations that may apply from time to time under our credit facility agreement. | |
In May 2015, after consideration of the tools acquired in the En Pointe acquisition, we determined that we would write-off approximately $3.2 million of internally developed software work in process related to our upcoming CRM system, which is one component of our overall ERP system conversion, in favor of a similar CRM system already configured and in production at En Pointe. We will record this charge in the three months ending June 30, 2015 in our consolidated financial statements. | |
Goodwill_and_Intangible_Assets1
Goodwill and Intangible Assets (Tables) | 3 Months Ended | |||||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||||
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 March 31, 2015 | At December 31, 2014 | ||||||||||||||||||||
Average | ||||||||||||||||||||||
Estimated | ||||||||||||||||||||||
Useful Lives | Gross | Accumulated | Net | Gross | Accumulated | Net | ||||||||||||||||
(years) | Amount | Amortization | Amount | Amount | Amortization | Amount | ||||||||||||||||
Patent, trademarks & URLs | 8 | $ | 3,300 | -1 | $ | 36 | $ | 3,264 | $ | 3,593 | -1 | $ | 307 | $ | 3,286 | |||||||
Customer relationships | 10 | 2,550 | 1,227 | 1,323 | 2,550 | 1,163 | 1,387 | |||||||||||||||
Total intangible assets | $ | 5,850 | $ | 1,263 | $ | 4,587 | $ | 6,143 | $ | 1,470 | $ | 4,673 | ||||||||||
-1 | Included in the gross amounts for “Patent, trademarks & URLs” at March 31, 2015 and December 31, 2014 are $2.9 million of trademarks with indefinite useful lives that are not amortized. | |||||||||||||||||||||
Discontinued_Operations_Tables
Discontinued Operations (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
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): | |||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
Accounts receivable, net | $ | 429 | $ | 19 | ||||
Inventories, net | — | 7 | ||||||
Current assets of discontinued operations | 429 | 26 | ||||||
Other non-current assets | — | 14 | ||||||
Non-current assets of discontinued operations | — | 14 | ||||||
Total assets of discontinued operations | $ | 429 | $ | 40 | ||||
Accounts payable | $ | 118 | $ | 116 | ||||
Accrued expenses and other current liabilities | 365 | 458 | ||||||
Deferred revenue | 3 | 3 | ||||||
Current liabilities of discontinued operations | $ | 486 | $ | 577 | ||||
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 March 31, | ||||||||
2015 | 2014 | |||||||
Net sales | $ | (6 | ) | $ | 13,716 | |||
Loss before income taxes | $ | (31 | ) | $ | (261 | ) | ||
Income tax benefit | — | (114 | ) | |||||
Loss from discontinued operations, net of taxes | $ | (31 | ) | $ | (147 | ) | ||
Debt_Tables
Debt (Tables) | 3 Months Ended | ||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||
Discontinued Operations | |||||||||||||||||||||||
Schedule of outstanding debt | The following table sets forth our outstanding debt as of the periods presented (in thousands): | ||||||||||||||||||||||
March 31, | December 31, | ||||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||||
Revolving credit facility, Prime or LIBOR plus 1.75%, maturing in September 2017 | $ | 49,240 | $ | 52,795 | |||||||||||||||||||
Note payable, Prime or LIBOR plus 1.75%, maturing in September 2017 | 3,100 | 3,255 | |||||||||||||||||||||
Note payable, Prime or LIBOR plus 1.75%, maturing in September 2017 | 1,498 | 1,571 | |||||||||||||||||||||
Note payable, greater of 2% or LIBOR plus 2.15%, maturing in April 2022 | 4,930 | — | |||||||||||||||||||||
Note payable, LIBOR plus 2.25%, maturing in January 2022 | 4,537 | — | |||||||||||||||||||||
Notes payable, 4.12%, 4.33% and 4.60%, maturing in March 2017 | 4,043 | 4,524 | |||||||||||||||||||||
Note payable, LIBOR plus 2.25%, maturing in April 2022 | 7,648 | 7,725 | |||||||||||||||||||||
Note payable, Prime plus 0.375% or LIBOR plus 2.375%, maturing in September 2016 | 8,817 | 8,917 | |||||||||||||||||||||
Note payable, 4.65% maturing in April 2015 | 82 | 164 | |||||||||||||||||||||
Total | 83,895 | 78,951 | |||||||||||||||||||||
Less: Total current debt | 53,331 | 56,536 | |||||||||||||||||||||
Total non-current debt | $ | 30,564 | $ | 22,415 | |||||||||||||||||||
Schedule of maturities of outstanding debt | The following table sets forth the maturities of our outstanding debt balance as of March 31, 2015 (in thousands): | ||||||||||||||||||||||
Remainder of | 2016 | 2017 | 2018 | 2019 | Thereafter | Total | |||||||||||||||||
2015 | |||||||||||||||||||||||
Total long-term debt obligations | $ | 3,076 | $ | 12,203 | $ | 2,170 | $ | 1,645 | $ | 7,825 | $ | 7,736 | $ | 34,655 | |||||||||
Revolving credit facility | — | 49,240 | — | — | — | — | 49,240 | ||||||||||||||||
Total | $ | 3,076 | $ | 61,443 | $ | 2,170 | $ | 1,645 | $ | 7,825 | $ | 7,736 | $ | 83,895 | |||||||||
Earnings_Loss_Per_Share_Tables
Earnings (Loss) Per Share (Tables) | 3 Months Ended | |||||||||
Mar. 31, 2015 | ||||||||||
Earning (Loss) 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): | |||||||||
Income From | Weighted Average | Per Share | ||||||||
Continuing | Number of | Amounts | ||||||||
Operations | Common Shares | |||||||||
Outstanding | ||||||||||
Three Months Ended March 31, 2015: | ||||||||||
Basic EPS | ||||||||||
Loss from continuing operations | $ | (3,524 | ) | 12,230 | $ | (0.29 | ) | |||
Effect of dilutive securities | ||||||||||
Dilutive effect of stock-based awards | — | — | ||||||||
Diluted EPS | ||||||||||
Adjusted loss from continuing operations | $ | (3,524 | ) | 12,230 | $ | (0.29 | ) | |||
Three Months Ended March 31, 2014: | ||||||||||
Basic EPS | ||||||||||
Income from continuing operations | $ | 3,034 | 11,932 | $ | 0.25 | |||||
Effect of dilutive securities | ||||||||||
Dilutive effect of stock-based awards | — | 783 | ||||||||
Diluted EPS | ||||||||||
Adjusted income from continuing operations | $ | 3,034 | 12,715 | $ | 0.24 | |||||
Segment_Information_Tables
Segment Information (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
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 March 31, 2015 | |||||||||||||||||
Net sales | $ | 236,534 | $ | 36,601 | $ | 22,834 | $ | (10 | ) | $ | 295,959 | ||||||
Gross profit | 33,701 | 3,342 | 2,063 | (1 | ) | 39,105 | |||||||||||
Depreciation and amortization expense(1) | 646 | 7 | 18 | 2,028 | 2,699 | ||||||||||||
Operating profit (loss) | 7,819 | 675 | (70 | ) | (13,631 | ) | (5,207 | ) | |||||||||
Three Months Ended March 31, 2014 | |||||||||||||||||
Net sales | $ | 252,121 | $ | 36,420 | $ | 36,799 | $ | (3 | ) | $ | 325,337 | ||||||
Gross profit | 41,534 | 3,542 | 3,631 | (2 | ) | 48,705 | |||||||||||
Depreciation and amortization expense(1) | 612 | 13 | 22 | 1,926 | 2,573 | ||||||||||||
Operating profit (loss) | 17,658 | 574 | 821 | (12,925 | ) | 6,128 | |||||||||||
-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) | 3 Months Ended |
Mar. 31, 2015 | |
segment | |
Basis of Presentation and Description of Company | |
Number of reportable operating segments | 3 |
Commercial | |
Basis of Presentation and Description of Company | |
Revenue percentage | 80.00% |
Public Sector | |
Basis of Presentation and Description of Company | |
Revenue percentage | 12.00% |
MacMall | |
Basis of Presentation and Description of Company | |
Revenue percentage | 8.00% |
Retail stores closed | MacMall | |
Basis of Presentation and Description of Company | |
Number of retail stores discontinued | 4 |
Basis_of_Presentation_and_Desc2
Basis of Presentation and Description of Company (Details 2) (Immaterial error, Adjustment, USD $) | 3 Months Ended |
In Millions, unless otherwise specified | Mar. 31, 2014 |
Immaterial error | Adjustment | |
Increase purchases of property and equipment | $4.10 |
Increase borrowing under note payable | 4.1 |
Decrease non-cash purchase of property and equipment | $4.10 |
Goodwill_and_Intangible_Assets2
Goodwill and Intangible Assets (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Dec. 31, 2014 | |
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 $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 |
Intangible Assets | ||
Gross Amount | $5,850 | $6,143 |
Accumulated Amortization | 1,263 | 1,470 |
Net Amount | 4,587 | 4,673 |
Patent, trademarks & URLs | ||
Intangible Assets | ||
Weighted Average Estimated Useful Lives | 8 years | |
Gross Amount | 3,300 | 3,593 |
Accumulated Amortization | 36 | 307 |
Net Amount | 3,264 | 3,286 |
Customer relationships | ||
Intangible Assets | ||
Weighted Average Estimated Useful Lives | 10 years | |
Gross Amount | 2,550 | 2,550 |
Accumulated Amortization | 1,227 | 1,163 |
Net Amount | $1,323 | $1,387 |
Goodwill_and_Intangible_Assets4
Goodwill and Intangible Assets (Details 3) (Trademarks, USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
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 | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Goodwill and Intangible Assets | ||
Total amortization expenses for intangible assets | $0.10 | $0.10 |
Estimated amortization expenses for intangible assets | ||
Remainder of 2015 | 0.2 | |
2016 | 0.3 | |
2017 | 0.3 | |
2018 | 0.3 | |
2019 | 0.3 | |
Thereafter | $0.20 |
Discontinued_Operations_Detail
Discontinued Operations (Details) (USD $) | 3 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 |
Carrying amounts of major classes of assets and liabilities that have been included in Condensed Consolidated Balance Sheets | |||
Current assets of discontinued operations | $429 | $26 | |
Non-current assets of discontinued operations | 14 | ||
Current liabilities of discontinued operations | 486 | 577 | |
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 | -31 | -147 | |
Discontinued Operations | |||
Discontinued Operations | |||
Number of retail stores discontinued | 4 | ||
Carrying amounts of major classes of assets and liabilities that have been included in Condensed Consolidated Balance Sheets | |||
Accounts receivable, net | 429 | 19 | |
Inventories, net | 7 | ||
Current assets of discontinued operations | 429 | 26 | |
Other non-current assets | 14 | ||
Non-current assets of discontinued operations | 14 | ||
Total assets of discontinued operations | 429 | 40 | |
Accounts payable | 118 | 116 | |
Accrued expenses and other current liabilities | 365 | 458 | |
Deferred revenue | 3 | 3 | |
Current liabilities of discontinued operations | 486 | 577 | |
Operating results of discontinued operations reported in "Loss from discontinued operation, net of taxes" in Condensed Consolidated Statements of Operations | |||
Net sales | -6 | 13,716 | |
Loss before income taxes | -31 | -261 | |
Income tax benefit | -114 | ||
Loss from discontinued operations, net of taxes | ($31) | ($147) |
Debt_Details
Debt (Details) (USD $) | 3 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 | Jan. 31, 2015 |
Line of Credit and Notes Payable | |||
Net working capital advances outstanding | 49,240 | $52,795 | |
Total | 83,895 | 78,951 | |
Less: Total current debt | 53,331 | 56,536 | |
Total non-current debt | 30,564 | 22,415 | |
Maturities of outstanding debt | |||
Remainder of 2015 | 3,076 | ||
2016 | 61,443 | ||
2017 | 2,170 | ||
2018 | 1,645 | ||
2019 | 7,825 | ||
Thereafter | 7,736 | ||
Total | 83,895 | 78,951 | |
Asset-based revolving credit facility maturing in September 2017 | |||
Line of Credit and Notes Payable | |||
Net working capital advances outstanding | 49,240 | 52,795 | |
Total | 49,240 | ||
Maturities of outstanding debt | |||
2016 | 49,240 | ||
Total | 49,240 | ||
Asset-based revolving credit facility maturing in September 2017 | Prime rate | |||
Line of Credit and Notes Payable | |||
Percentage points added to the reference rate | 1.75% | ||
Asset-based revolving credit facility maturing in September 2017 | LIBOR | |||
Line of Credit and Notes Payable | |||
Percentage points added to the reference rate | 1.75% | ||
Long term note | |||
Line of Credit and Notes Payable | |||
Amount outstanding under credit agreement | 4,900 | 4,575 | |
Total | 34,655 | ||
Maturities of outstanding debt | |||
Remainder of 2015 | 3,076 | ||
2016 | 12,203 | ||
2017 | 2,170 | ||
2018 | 1,645 | ||
2019 | 7,825 | ||
Thereafter | 7,736 | ||
Total | 34,655 | ||
Notes payable one maturing in September 2017 | |||
Line of Credit and Notes Payable | |||
Outstanding amount of debt | 3,100 | 3,255 | |
Notes payable one maturing in September 2017 | Prime rate | |||
Line of Credit and Notes Payable | |||
Percentage points added to the reference rate | 1.75% | ||
Notes payable two maturing in September 2017 | Prime rate | |||
Line of Credit and Notes Payable | |||
Percentage points added to the reference rate | 1.75% | ||
Notes payable one maturing in April 2022 | |||
Line of Credit and Notes Payable | |||
Amount outstanding under credit agreement | 4,930 | ||
Effective Interest rate | 2.00% | ||
Notes payable one maturing in April 2022 | LIBOR | |||
Line of Credit and Notes Payable | |||
Percentage points added to the reference rate | 2.15% | ||
Notes payable maturing in January 2022 | |||
Line of Credit and Notes Payable | |||
Amount outstanding under credit agreement | 4,537 | ||
Notes payable maturing in January 2022 | LIBOR | |||
Line of Credit and Notes Payable | |||
Percentage points added to the reference rate | 2.25% | ||
Notes payable maturing in March 2017 | |||
Line of Credit and Notes Payable | |||
Amount outstanding under credit agreement | 4,043 | 4,524 | |
Notes payable maturing in March 2017 | Minimum | |||
Line of Credit and Notes Payable | |||
Effective Interest rate | 4.12% | ||
Notes payable maturing in March 2017 | Maximum | |||
Line of Credit and Notes Payable | |||
Effective Interest rate | 4.60% | ||
Notes payable maturing in March 2017 | Weighted Average | |||
Line of Credit and Notes Payable | |||
Effective Interest rate | 4.33% | ||
Notes payable two maturing in April 2022 | |||
Line of Credit and Notes Payable | |||
Amount outstanding under credit agreement | 7,648 | 7,725 | |
Notes payable two maturing in April 2022 | LIBOR | |||
Line of Credit and Notes Payable | |||
Percentage points added to the reference rate | 2.25% | ||
Notes payable maturing in September 2016 | |||
Line of Credit and Notes Payable | |||
Amount outstanding under credit agreement | 8,817 | 8,917 | |
Notes payable maturing in September 2016 | Prime rate | |||
Line of Credit and Notes Payable | |||
Percentage points added to the reference rate | 0.38% | ||
Notes payable maturing in September 2016 | LIBOR | |||
Line of Credit and Notes Payable | |||
Percentage points added to the reference rate | 2.38% | ||
Notes payable maturing in April 2015 | |||
Line of Credit and Notes Payable | |||
Amount outstanding under credit agreement | 82 | $164 | |
Effective Interest rate | 4.65% |
Debt_Details_2
Debt (Details 2) (USD $) | 28 Months Ended | 3 Months Ended | 1 Months Ended | ||||||
Mar. 31, 2015 | Mar. 31, 2015 | Jun. 30, 2011 | 31-May-13 | Jul. 31, 2013 | Mar. 31, 2015 | Jan. 31, 2015 | Dec. 31, 2012 | Dec. 31, 2014 | |
item | acre | ||||||||
Additional disclosures | |||||||||
Purchase price of real property | $5,800,000 | $5,800,000 | $3,000,000 | $5,800,000 | $6,600,000 | $1,100,000 | |||
Area of land purchased | 7.9 | ||||||||
Additional costs incurred for construction of a new cloud data center | 12,200,000 | ||||||||
Asset-based revolving credit facility maturing in September 2017 | |||||||||
Line of Credit and Notes Payable | |||||||||
Credit limit | 200,000,000 | 200,000,000 | 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 | ||||||||
Amount available to borrow for working capital advances | 61,000,000 | 61,000,000 | 61,000,000 | ||||||
Additional disclosures | |||||||||
Effective weighted average annual interest rate (as a percent) | 2.25% | 2.25% | 2.25% | ||||||
Asset-based revolving credit facility maturing in September 2017 | Prime rate | |||||||||
Additional disclosures | |||||||||
Percentage points added to the reference rate | 1.75% | ||||||||
Asset-based revolving credit facility maturing in September 2017 | LIBOR | |||||||||
Additional disclosures | |||||||||
Percentage points added to the reference rate | 1.75% | ||||||||
Term note | |||||||||
Line of Credit and Notes Payable | |||||||||
Principal balance of debt | 4,340,000 | 4,340,000 | 4,340,000 | ||||||
Equal monthly principal installments | 52,000 | ||||||||
Principal repayment amortization period | 84 months | ||||||||
Additional disclosures | |||||||||
Effective weighted average annual interest rate (as a percent) | 2.25% | 2.25% | 2.25% | ||||||
Credit agreement | |||||||||
Line of Credit and Notes Payable | |||||||||
Principal repayment amortization period | 25 years | ||||||||
Additional disclosures | |||||||||
Borrowing term | 5 years | ||||||||
Subline under revolving credit facility | |||||||||
Line of Credit and Notes Payable | |||||||||
Principal repayment amortization period | 84 months | ||||||||
Additional disclosures | |||||||||
Real property purchase amount financed | 1,700,000 | ||||||||
Monthly principal amortization amount | 24,000 | ||||||||
Amount outstanding under credit agreement | 1,498,000 | 1,498,000 | 1,498,000 | 1,571,000 | |||||
Financing Arrangements For ERP Upgrage | |||||||||
Line of Credit and Notes Payable | |||||||||
Principal balance of debt | 5,600,000 | ||||||||
Loan agreement to finance build out of new data center | |||||||||
Line of Credit and Notes Payable | |||||||||
Principal repayment amortization period | 25 years | ||||||||
Additional disclosures | |||||||||
Borrowing term | 5 years | ||||||||
Loan agreement to finance build out of new data center | Maximum | |||||||||
Line of Credit and Notes Payable | |||||||||
Principal balance of debt | 7,725,000 | ||||||||
Long term note | |||||||||
Line of Credit and Notes Payable | |||||||||
Principal repayment amortization period | 25 years | 25 years | |||||||
Additional disclosures | |||||||||
Effective weighted average annual interest rate (as a percent) | 2.25% | 2.25% | 2.25% | ||||||
Borrowing term | 7 years | 7 years | |||||||
Amount outstanding under credit agreement | $4,900,000 | $4,900,000 | $4,900,000 | $4,575,000 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | Mar. 31, 2015 |
In Millions, unless otherwise specified | |
Income Taxes | |
Unrecognized tax positions | $0 |
Accrued interest and penalties | $0 |
Stockholders_Equity_Details
Stockholders' Equity (Details) (USD $) | 3 Months Ended | 78 Months Ended |
In Millions, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2015 |
Stockholders' Equity | ||
Shares of common stock repurchased | 74,414 | 3,148,900 |
Aggregate cost of shares of common stock repurchased | $0.70 | $17.20 |
Available authorized repurchase amount | $2.80 |
Earnings_Loss_Per_Share_Detail
Earnings (Loss) Per Share (Details) (USD $) | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Shares of common stock underlying stock options excluded from the calculation of diluted EPS | 584,831 | 428,000 |
Basic EPS | ||
Loss from continuing operations | ($3,524) | $3,034 |
Shares | 12,230,000 | 11,932,000 |
Per Share Amounts (in dollars per share) | ($0.29) | $0.25 |
Effect of dilutive securities - Dilutive effect of stock - based awards | ||
Shares | 783,000 | |
Diluted EPS - Adjusted net income | ||
Adjusted loss from continuing operations | ($3,524) | $3,034 |
Shares | 12,230,000 | 12,715,000 |
Per Share Amounts (in dollars per share) | ($0.29) | $0.24 |
Income Reported | ||
Shares of common stock underlying stock options excluded from the calculation of diluted EPS | 475,000 |
Segment_Information_Details
Segment Information (Details) (USD $) | 3 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 |
Segment Information | |||
Net sales | $295,959 | $325,337 | |
Gross profit | 39,105 | 48,705 | |
Depreciation and amortization expense | 2,699 | 2,760 | |
Operating profit (loss) | -5,207 | 6,128 | |
Assets | 375,665 | 389,190 | |
Continuing operations | |||
Segment Information | |||
Net sales | 295,959 | 325,337 | |
Gross profit | 39,105 | 48,705 | |
Depreciation and amortization expense | 2,699 | 2,573 | |
Operating profit (loss) | -5,207 | 6,128 | |
Continuing operations | Commercial | |||
Segment Information | |||
Net sales | 236,534 | 252,121 | |
Gross profit | 33,701 | 41,534 | |
Depreciation and amortization expense | 646 | 612 | |
Operating profit (loss) | 7,819 | 17,658 | |
Continuing operations | Public Sector | |||
Segment Information | |||
Net sales | 36,601 | 36,420 | |
Gross profit | 3,342 | 3,542 | |
Depreciation and amortization expense | 7 | 13 | |
Operating profit (loss) | 675 | 574 | |
Continuing operations | MacMall | |||
Segment Information | |||
Net sales | 22,834 | 36,799 | |
Gross profit | 2,063 | 3,631 | |
Depreciation and amortization expense | 18 | 22 | |
Operating profit (loss) | -70 | 821 | |
Continuing operations | Corporate and Other | |||
Segment Information | |||
Net sales | -10 | -3 | |
Gross profit | -1 | -2 | |
Depreciation and amortization expense | 2,028 | 1,926 | |
Operating profit (loss) | ($13,631) | ($12,925) |
Commitments_and_Contingencies_
Commitments and Contingencies (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Minimum payments over the terms of applicable contracts | ||
Total rent expense under operating leases, net of sublease income | $1 | $1.20 |
Subsequent_Events_Details
Subsequent Events (Details) (USD $) | 3 Months Ended | 78 Months Ended | 0 Months Ended | 1 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2015 | Apr. 28, 2015 | Apr. 07, 2015 | Apr. 01, 2015 | 31-May-15 | |
Subsequent Event | ||||||
Shares of common stock repurchased | 74,414 | 3,148,900 | ||||
Aggregate cost of shares of common stock repurchased | $700,000 | $17,200,000 | ||||
Value of shares available under the stock repurchase program | 2,800,000 | |||||
Asset-based revolving credit facility maturing in September 2017 | ||||||
Subsequent Event | ||||||
Current borrowing limit | 200,000,000 | 200,000,000 | ||||
Subsequent Events | ||||||
Subsequent Event | ||||||
Additional amount approved under the stock repurchase program | 10,000,000 | |||||
Shares of common stock repurchased | 3,310,268 | |||||
Aggregate cost of shares of common stock repurchased | 18,700,000 | |||||
Value of shares available under the stock repurchase program | 11,300,000 | |||||
Subsequent Events | Asset-based revolving credit facility maturing in September 2017 | ||||||
Subsequent Event | ||||||
Current borrowing limit | 200,000,000 | |||||
Maximum credit limit | 250,000,000 | |||||
Accordion feature to increase maximum credit | 25,000,000 | |||||
Variable interest rate basis | LIBOR | |||||
Subsequent Events | Asset-based revolving credit facility maturing in September 2017 | Minimum | ||||||
Subsequent Event | ||||||
Percentage points added to the reference rate | 1.50% | |||||
Subsequent Events | Asset-based revolving credit facility maturing in September 2017 | Maximum | ||||||
Subsequent Event | ||||||
Percentage points added to the reference rate | 1.75% | |||||
Subsequent Events | En Pointe Technologies Sales Inc | ||||||
Subsequent Event | ||||||
Initial purchase price | 15,000,000 | |||||
Future adjusted gross profit (as a percent) | 22.50% | |||||
Future service revenue (as a percent) | 10.00% | |||||
Gross profit and service revenues measurement period | 3 years | |||||
Subsequent Events | En Pointe Technologies Sales Inc | Software Development | ||||||
Subsequent Event | ||||||
Write off of internally developed software | $3,200,000 |