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SECURITIES AND EXCHANGE COMMISSION
þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 95-4518700 | |
(State or other jurisdiction of | (IRS Employer | |
incorporation or organization) | Identification Number) |
(Address of principal executive offices, including zip code)
(Registrant’s telephone number, including area code)
Title of Each Class | Name of Exchange on Which Registered | |
Common Stock, $0.001 par value per share | The NASDAQ Stock Market LLC |
None
Large accelerated filero | Accelerated filerþ | Non-accelerated filer o (Do not check if a smaller reporting company) | Smaller Reporting Companyo |
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Exhibit 10.34 | ||||||||
Exhibit 10.35 | ||||||||
Exhibit 21.1 | ||||||||
Exhibit 23.1 | ||||||||
Exhibit 31.1 | ||||||||
Exhibit 31.2 | ||||||||
Exhibit 32.1 | ||||||||
Exhibit 32.2 |
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• | our beliefs relating to the benefits to be received from our Philippines office and Canadian call center, including tax credits and reduction in labor costs over time; | ||
• | our competitive advantages and growth opportunities; | ||
• | our ability to increase profitability and revenues; | ||
• | our ability to leverage our market position and purchasing power and offer a wide selection of products at competitive prices; | ||
• | our ability to penetrate the public sector market; | ||
• | our ability to attract new customers and stimulate additional purchases from existing customers, including our expectations regarding future advertising levels and the effect on consumer sales; | ||
• | our ability to generate vendor supported marketing; | ||
• | our ability to limit risk related to price reductions; | ||
• | our use of management information systems and their need for future support or upgrade; | ||
• | our expectations regarding competition and the industry trend toward consolidation; | ||
• | our compliance with laws and regulations; | ||
• | our expectations regarding our working capital, liquidity, cash flows from operations and our credit limit under our credit facility; | ||
• | our expectations to continue our efforts to increase the productivity of our sales force and reduce costs; | ||
• | the impact on accounts receivable from our efforts to focus on commercial and public sector sales; | ||
• | our belief that the use of extranets has the potential to yield additional sales opportunities and the ability to reach new customer bases; | ||
• | our expectations regarding the ability of our marketing programs or campaigns to stimulate additional purchases or to maximize product sales; | ||
• | our belief that backlog is not useful for predicting our future sales; | ||
• | our belief that our existing distribution facilities are adequate for our current and foreseeable future needs; | ||
• | the likelihood that new laws and regulations will be adopted with respect to the Internet that may impose additional restrictions or burdens on our business; | ||
• | our beliefs regarding the applicability of tax regulations; | ||
• | our belief regarding our exposure to currency exchange risks; | ||
• | our expectations regarding the impact of accounting pronouncements; | ||
• | our expectations regarding the payment of dividends and our intention to retain any earnings to finance the growth and development of our business; and | ||
• | our plans for our growth strategy, capital needs and future financing. |
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Years Ended December 31, | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
Notebooks | 16.1 | % | 15.8 | % | 15.6 | % | ||||||
Desktops and servers | 15.2 | 14.8 | 16.4 | |||||||||
Software | 14.3 | 14.5 | 15.1 | |||||||||
Home electronics | 11.8 | 10.2 | 7.9 | |||||||||
Printers and related supplies | 6.4 | 8.0 | 8.4 | |||||||||
Storage and related supplies | 7.3 | 8.1 | 7.8 | |||||||||
Displays | 5.5 | 6.5 | 7.8 | |||||||||
Network and telecommunications | 4.8 | 5.0 | 5.5 | |||||||||
Accessories | 5.0 | 4.6 | 4.2 | |||||||||
Memory | 2.4 | 3.2 | 3.5 | |||||||||
Input devices | 1.6 | 1.9 | 1.8 | |||||||||
Other(1) | 9.6 | 7.4 | 6.0 | |||||||||
Total | 100.0 | % | 100.0 | % | 100.0 | % | ||||||
(1) | Other consists primarily of other electronic products, income from configuration charges, sales of extended service agreements and other consumer products. |
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• | other direct marketers, including CDW, Insight Enterprises and PC Connection; | ||
• | computer retail stores and resellers, including superstores such as Best Buy and CompUSA; | ||
• | hardware and software vendors such as Apple and Dell Computer that sell or are increasing sales directly to end users; | ||
• | online resellers, such as Amazon.com, Newegg.com and TigerDirect.com; | ||
• | government resellers such as GTSI, CDWG and GovConnection; | ||
• | system integrators; | ||
• | software focused resellers such as Soft Choice and Software House International; and | ||
• | other direct marketers and value added resellers of information technology products, solutions and services. |
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• | the amount and timing of operating costs and capital expenditures relating to any expansion of our business operations and infrastructure; | ||
• | price competition that results in lower sales volumes, lower profit margins, or net losses; | ||
• | fluctuations in mail-in rebate redemption rates; | ||
• | the amount and timing of advertising and marketing costs; | ||
• | our ability to successfully integrate operations and technologies from any past or future acquisitions or other business combinations; | ||
• | changes in the number of visitors to our websites or our inability to convert those visitors into customers; | ||
• | technical difficulties, including system or Internet failures; | ||
• | fluctuations in the demand for our products or overstocking or understocking of our products; | ||
• | introduction of new or enhanced services or products by us or our competitors; | ||
• | fluctuations in shipping costs, particularly during the holiday season; |
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• | changes in the amounts of information technology spending by commercial and public sector entities; | ||
• | economic conditions generally or economic conditions specific to the Internet, e-commerce, the retail industry or the mail order industry; | ||
• | changes in the mix of products that we sell; and | ||
• | fluctuations in levels of inventory theft, damage or obsolescence that we incur. |
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• | establish or increase awareness of our new brands and product categories; | ||
• | acquire, attract and retain customers at a reasonable cost; | ||
• | achieve and maintain a critical mass of customers and orders across all of our product categories; | ||
• | attract a sufficient number of new customers to whom our new product categories are targeted; | ||
• | successfully market our new product offerings to existing customers; |
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• | maintain or improve our gross margins and fulfillment costs; | ||
• | attract and retain vendors to provide our expanded line of products to our customers on terms that are acceptable to us; and | ||
• | manage our inventory in new product categories. |
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• | reduced visibility of order status and package tracking; | ||
• | delays in order processing and product delivery; | ||
• | increased cost of delivery, resulting in reduced margins; and | ||
• | reduced shipment quality, which may result in damaged products and customer dissatisfaction. |
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• | political uncertainties; | ||
• | wage inflation; | ||
• | exposure to foreign currency fluctuations; | ||
• | tariffs and other trade barriers; and | ||
• | foreign regulatory restrictions and unexpected changes in regulatory environments. |
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• | failure to meet investors’ expectations regarding our operating performance; | ||
• | changes in securities analysts’ recommendations or estimates of our financial performance; | ||
• | publication of research reports by analysts; | ||
• | changes in market valuations of similar companies; | ||
• | announcements by us or our competitors of significant contracts, acquisitions, commercial relationships, joint ventures or capital commitments; | ||
• | actual or anticipated fluctuations in our operating results; | ||
• | litigation developments; and | ||
• | general market conditions or other economic factors unrelated to our performance. |
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Description | Sq. Ft. | Location | ||||
Distribution Center and Retail Store | 212,000 | Memphis, TN | ||||
Sarcom Headquarters, Sales Office and Warehouse/Distribution Center | 115,846 | Lewis Center, OH | ||||
PC Mall Corporate Headquarters, Sales Office and Retail Store | 67,660 | Torrance, CA | ||||
Irvine Sales Office and Warehouse/Distribution Center | 60,072 | Irvine, CA | ||||
Canadian Office | 45,128 | Montreal, Quebec | ||||
Wisconsin Sales Office | 35,503 | Menomonee Falls, WI | ||||
Philippines Office | 19,740 | Mandaluyong City, Philippines | ||||
Retail Store | 9,750 | Santa Monica, CA |
Name | Age | Position | ||||
Frank F. Khulusi | 41 | Chairman of the Board, President and Chief Executive Officer | ||||
Brandon H. LaVerne | 36 | Interim Chief Financial Officer, Treasurer and Chief Accounting Officer | ||||
Kristin M. Rogers | 49 | Executive Vice President — Sales and Marketing | ||||
Daniel J. DeVries | 46 | Executive Vice President — Consumer | ||||
Robert I. Newton | 42 | General Counsel and Secretary |
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ITEM 5. | MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES |
Price Range of | ||||||||
Common Stock | ||||||||
High | Low | |||||||
Year Ended December 31, 2007 | ||||||||
First Quarter | $ | 15.15 | $ | 9.50 | ||||
Second Quarter | 13.47 | 9.84 | ||||||
Third Quarter | 16.00 | 9.59 | ||||||
Fourth Quarter | 20.50 | 9.09 | ||||||
Year Ended December 31, 2006 | ||||||||
First Quarter | $ | 6.95 | $ | 5.50 | ||||
Second Quarter | 7.36 | 5.66 | ||||||
Third Quarter | 7.65 | 5.87 | ||||||
Fourth Quarter | 11.29 | 6.80 |
Total Number of | Average Price | |||||||
Shares Purchased | Per Share | |||||||
October 1, 2007 to October 31, 2007 | — | — | ||||||
November 1, 2007 to November 30, 2007 | 122,478 | (1) | $ | 17.16 | (1) | |||
December 1, 2007 to December 31, 2007 | — | — | ||||||
Total | 122,478 | 17.16 | ||||||
(1) | Represents shares of PC Mall, Inc. common stock we received from the sellers of SARCOM in connection with the settlement of a net asset value adjustment on November 6, 2007. The net asset value adjustment settlement is related to our acquisition of SARCOM, which closed on September 17, 2007. The shares were tendered by the sellers in settlement of a $2.1 million post-closing net asset value purchase price adjustment in our favor pursuant to the terms of the Agreement and Plan of Merger for the acquisition. The per share price for the shares of common stock we received in the settlement was determined by the average closing price of our common stock for the 20 consecutive trading days ending on the date of the final determination of the net asset value adjustment, which was November 6, 2007. The repurchase was not made pursuant to any publicly announced plan or program. For additional information regarding the repurchase, see Notes 4 and 11 of the Notes to the Consolidated Financial Statements in Part II, Item 8 of this report. |
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Measurement Period (fiscal years covered) | ||||||||||||||||||||||||||||||||
12/02 | 12/03 | 12/04 | 12/05 | 12/06 | 12/07 | |||||||||||||||||||||||||||
PC Mall, Inc. | $ | 100.00 | $ | 470.43 | $ | 648.70 | $ | 890.40 | $ | 1,658.10 | $ | 1,464.61 | ||||||||||||||||||||
NASDAQ Composite | 100.00 | 149.75 | 164.64 | 168.60 | 187.83 | 205.22 | ||||||||||||||||||||||||||
NASDAQ Retail Trade | 100.00 | 168.12 | 232.55 | 211.17 | 200.82 | 216.39 | ||||||||||||||||||||||||||
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Years Ended December 31, | ||||||||||||||||||||
2007 | 2006 | 2005 | 2004 | 2003 | ||||||||||||||||
(in thousands, except per share data) | ||||||||||||||||||||
Consolidated Statements of Operations Data: | ||||||||||||||||||||
Net sales | $ | 1,215,433 | $ | 1,005,820 | $ | 997,232 | $ | 978,320 | $ | 865,545 | ||||||||||
Cost of goods sold | 1,067,595 | 881,902 | 878,665 | 852,073 | 750,817 | |||||||||||||||
Gross profit | 147,838 | 123,918 | 118,567 | 126,247 | 114,728 | |||||||||||||||
Selling, general and administrative expenses | 123,520 | 113,500 | 118,555 | 121,706 | 109,452 | |||||||||||||||
Operating profit | 24,318 | 10,418 | 12 | 4,541 | 5,276 | |||||||||||||||
Interest expense, net | 4,031 | 3,940 | 3,058 | 2,044 | 1,325 | |||||||||||||||
Income (loss) from continuing operations before income taxes | 20,287 | 6,478 | (3,046 | ) | 2,497 | 3,951 | ||||||||||||||
Income tax expense (benefit) | 7,844 | 2,522 | (1,114 | ) | 1,019 | 1,392 | ||||||||||||||
Income (loss) from continuing operations | 12,443 | 3,956 | (1,932 | ) | 1,478 | 2,559 | ||||||||||||||
Income (loss) from discontinued operation, net of taxes | — | — | (1,781 | ) | (465 | ) | 484 | |||||||||||||
Net income (loss) | $ | 12,443 | $ | 3,956 | $ | (3,713 | ) | $ | 1,013 | $ | 3,043 | |||||||||
Basic and Diluted Earnings (Loss) Per Common Share | ||||||||||||||||||||
Basic earnings (loss) per share: | ||||||||||||||||||||
Income (loss) from continuing operations | $ | 0.98 | $ | 0.33 | $ | (0.17 | ) | $ | 0.13 | $ | 0.24 | |||||||||
Income (loss) from discontinued operation, net of taxes | — | — | (0.15 | ) | (0.04 | ) | 0.05 | |||||||||||||
Net income (loss) | $ | 0.98 | $ | 0.33 | $ | (0.32 | ) | $ | 0.09 | $ | 0.29 | |||||||||
Diluted earnings (loss) per share: | ||||||||||||||||||||
Income (loss) from continuing operations | $ | 0.90 | $ | 0.31 | $ | (0.17 | ) | $ | 0.12 | $ | 0.22 | |||||||||
Income (loss) from discontinued operation, net of taxes | — | — | (0.15 | ) | (0.04 | ) | 0.04 | |||||||||||||
Net income (loss) | $ | 0.90 | $ | 0.31 | $ | (0.32 | ) | $ | 0.08 | $ | 0.26 | |||||||||
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At December 31, | ||||||||||||||||||||
2007 | 2006 | 2005 | 2004 | 2003 | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Consolidated Balance Sheet Data: | ||||||||||||||||||||
Cash and cash equivalents | $ | 6,623 | $ | 5,836 | $ | 6,289 | $ | 6,473 | $ | 6,675 | ||||||||||
Working capital(1) | 37,264 | 43,386 | 35,621 | 53,849 | 28,222 | |||||||||||||||
Total assets | 296,235 | 203,567 | 205,242 | 231,858 | 191,470 | |||||||||||||||
Short-term debt | 775 | 500 | 500 | 500 | 1,000 | |||||||||||||||
Line of credit | 53,893 | 32,477 | 53,517 | 49,027 | 26,202 | |||||||||||||||
Long-term debt, excluding current portion | 4,456 | 1,750 | 2,250 | 2,750 | 250 | |||||||||||||||
Total stockholders’ equity | 84,424 | 60,824 | 52,968 | 70,911 | 49,893 |
(1) | Included in 2004 and 2003 are the accounts of the discontinued operations of eCOST.com. The increase in 2004 working capital compared to prior years is primarily due to the $16.7 million of net proceeds received by eCOST.com from the completion of its IPO in September 2004. The decrease in 2005 from 2004 reflects the completion of the spin-off of eCOST.com in April 2005. |
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ITEM 7. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
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• | it requires assumptions to be made that were uncertain at the time the estimate was made; and | ||
• | changes in the estimate or different estimates that could have been selected could have a material impact on our consolidated results of operations or financial position. |
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Years Ended December 31, | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
Net sales | $ | 1,215,433 | $ | 1,005,820 | $ | 997,232 | ||||||
Cost of goods sold | 1,067,595 | 881,902 | 878,665 | |||||||||
Gross profit | 147,838 | 123,918 | 118,567 | |||||||||
Selling, general and administrative expenses | 123,520 | 113,500 | 118,555 | |||||||||
Operating profit | 24,318 | 10,418 | 12 | |||||||||
Interest expense, net | 4,031 | 3,940 | 3,058 | |||||||||
Income (loss) from continuing operations before income taxes | 20,287 | 6,478 | (3,046 | ) | ||||||||
Income tax expense (benefit) | 7,844 | 2,522 | (1,114 | ) | ||||||||
Income (loss) from continuing operations | 12,443 | 3,956 | (1,932 | ) | ||||||||
Loss from discontinued operation, net of taxes | — | — | (1,781 | ) | ||||||||
Net income (loss) | $ | 12,443 | $ | 3,956 | $ | (3,713 | ) | |||||
As a Percentage of Net Sales | ||||||||||||
For Years Ended December 31, | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
Net sales | 100 | % | 100 | % | 100 | % | ||||||
Cost of goods sold | 87.8 | 87.7 | 88.1 | |||||||||
Gross profit | 12.2 | 12.3 | 11.9 | |||||||||
Selling, general and administrative expenses | 10.2 | 11.3 | 11.9 | |||||||||
Operating profit | 2.0 | 1.0 | 0.0 | |||||||||
Interest expense, net | 0.3 | 0.4 | 0.3 | |||||||||
Income (loss) from continuing operations before income taxes | 1.7 | 0.6 | (0.3 | ) | ||||||||
Income tax expense (benefit) | 0.7 | 0.2 | (0.1 | ) | ||||||||
Income (loss) from continuing operations | 1.0 | 0.4 | (0.2 | ) | ||||||||
Loss from discontinued operation, net of taxes | — | — | (0.2 | ) | ||||||||
Net income (loss) | 1.0 | % | 0.4 | % | (0.4 | )% | ||||||
Years Ended December 31, | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
Commercial and public sector sales percentage | 80.9 | % | 78.8 | % | 74.3 | % | ||||||
Consumer sales percentage (includes OnSale.com) | 19.1 | % | 21.2 | % | 25.7 | % | ||||||
Commercial and public sector account executives (at end of period) | 694 | 574 | 559 |
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Years Ended | ||||||||||||||||
December 31, | Change | |||||||||||||||
2007 | 2006 | $ | % | |||||||||||||
Core business | $ | 1,199,999 | $ | 993,860 | $ | 206,139 | 20.7 | % | ||||||||
OnSale.com | 15,434 | 11,960 | 3,474 | 29.0 | % | |||||||||||
Total net sales | $ | 1,215,433 | $ | 1,005,820 | $ | 209,613 | 20.8 | % | ||||||||
Years Ended December 31, | ||||||||||||||||||||||||
2007 | 2006 | |||||||||||||||||||||||
Gross Profit | Gross Profit | Change | ||||||||||||||||||||||
Gross Profit | Margin | Gross Profit | Margin | $ | Margin | |||||||||||||||||||
Core business | $ | 146,175 | 12.2 | % | $ | 122,402 | 12.3 | % | $ | 23,773 | (0.1 | )% | ||||||||||||
OnSale.com | 1,663 | 10.8 | % | 1,516 | 12.7 | % | 147 | (1.9 | )% | |||||||||||||||
Total gross profit and gross profit margin | $ | 147,838 | 12.2 | % | $ | 123,918 | 12.3 | % | $ | 23,920 | (0.1 | )% | ||||||||||||
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Years Ended December 31, | ||||||||||||||||||||||||||||
2007 | 2006 | Change | ||||||||||||||||||||||||||
SG&A as a | SG&A as a | SG&A as a | ||||||||||||||||||||||||||
SG&A | % of Sales | SG&A | % of Sales | $ | % | % of Sales | ||||||||||||||||||||||
Core business | $ | 120,694 | 10.1 | % | $ | 110,467 | 11.1 | % | $ | 10,227 | 9.3 | % | (1.0 | )% | ||||||||||||||
OnSale.com | 2,826 | 18.3 | % | 3,033 | 25.4 | % | (207 | ) | (6.8 | )% | (7.1 | )% | ||||||||||||||||
Total SG&A expenses | $ | 123,520 | 10.2 | % | $ | 113,500 | 11.3 | % | $ | 10,020 | 8.8 | % | (1.1 | )% | ||||||||||||||
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Years Ended | ||||||||||||||||
December 31, | Change | |||||||||||||||
2006 | 2005 | $ | % | |||||||||||||
Core business | $ | 993,860 | $ | 987,324 | $ | 6,536 | 0.7 | % | ||||||||
OnSale.com | 11,960 | 9,908 | 2,052 | 20.7 | % | |||||||||||
Total net sales | $ | 1,005,820 | $ | 997,232 | $ | 8,588 | 0.9 | % | ||||||||
Years Ended December 31, | ||||||||||||||||||||||||
2006 | 2005 | |||||||||||||||||||||||
Gross Profit | Gross Profit | Change | ||||||||||||||||||||||
Gross Profit | Margin | Gross Profit | Margin | $ | Margin | |||||||||||||||||||
Core business | $ | 122,402 | 12.3 | % | $ | 117,708 | 11.9 | % | $ | 4,694 | 0.4 | % | ||||||||||||
OnSale.com | 1,516 | 12.7 | % | 859 | 8.7 | % | 657 | 4.0 | % | |||||||||||||||
Total gross profit and gross profit margin | $ | 123,918 | 12.3 | % | $ | 118,567 | 11.9 | % | $ | 5,351 | 0.4 | % | ||||||||||||
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Years Ended December 31, | ||||||||||||||||||||||||||||
2006 | 2005 | Change | ||||||||||||||||||||||||||
SG&A as a | SG&A as a | SG&A as a | ||||||||||||||||||||||||||
SG&A | % of Sales | SG&A | % of Sales | $ | % | % of Sales | ||||||||||||||||||||||
Core business | $ | 110,467 | 11.1 | % | $ | 115,255 | 11.7 | % | $ | (4,788 | ) | (4.2 | )% | (0.6 | )% | |||||||||||||
OnSale.com | 3,033 | 25.4 | % | 3,300 | 33.3 | % | (267 | ) | (8.1 | )% | (7.9 | )% | ||||||||||||||||
Total SG&A expenses | $ | 113,500 | 11.3 | % | $ | 118,555 | 11.9 | % | $ | (5,055 | ) | (4.3 | )% | (0.6 | )% | |||||||||||||
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Cash Flows from Operating Activities.Net cash provided by operating activities in 2007 was $29.8 million, compared to net cash provided by operating activities of $31.5 million in 2006 and net cash used in operating activities from continuing operations of $5.6 million in 2005. The $29.8 million of net cash provided by operating activities in 2007 resulted primarily from the $31.7 million increase in accounts payable which resulted from timing of our vendor payables and the $12.4 million of income from our operations, partially offset by a $12.8 million increase in accounts receivable as of December 31, 2007 compared to December 31, 2006 primarily due to increased receivables from our government customers.
The $31.5 million of net cash provided by operating activities in 2006 resulted primarily from the $15.8 million increase in accounts payable related to an increase in our purchases to support our increased sales during 2006 and the increase in sales resulting from the acquisition of the products business from GMRI in 2006, the $13.2 million decrease in inventory reflecting our efforts to optimize our inventory levels and the $4.0 million of income from our operations, partially offset by the $11.2 million increase in accounts receivable as of December 31, 2006 compared for December 31, 2005 due to increased open account sales.
The $5.6 million net cash used in operating activities from continuing operations in 2005 resulted primarily from the $10.6 million increase in accounts receivable as of December 31, 2005 compared to December 31, 2004 principally due to the increase in our commercial sales and the decrease in accounts payable of $8.7 million relating to declines in strategic inventory purchases from the prior year, partially offset by a decrease in inventory of $14.4 million primarily relating to the reduction of inventory formerly used to support the business of eCOST.com, which we spun-off in April 2005.
Cash Flows from Investing Activities.Net cash used in investing activities was $50.3 million in 2007, compared to net cash used in investing activities of $6.6 million in 2006 and net cash used in investing activities from continuing operations of $3.1 million in 2005. The $50.3 million of net cash used in investing activities in 2007 resulted from the $47.7 million related to the acquisition of SARCOM in September 2007 and the $2.6 million of capital expenditures relating to the creation of enhanced electronic tools for our account executives and sales support staff and the continued expansion of our Philippines offices. The $6.6 million of net cash used in investing activities in 2006 was primarily due to $3.4 million used to acquire the products business from GMRI in September 2006 and capital expenditures of $3.3 million during the year which related to the continued expansion of our Philippines office, as well as the creation of enhanced electronic tools for our account executives and sales support staff and purchases of equipment to replace or improve our servers and personal computers. The $3.1 million of net cash used in investing activities in 2005 resulted primarily from the $3.2 million of capital expenditures, which related to expenditures to replace or improve our servers and personal computers, as well as the creation of enhanced electronic tools for our account executives and sales support staff.
Cash Flows from Financing Activities.Net cash provided by financing activities was $20.5 million in 2007, compared to net cash used in financing activities of $25.3 million in 2006 and net cash provided by financing activities from continuing operations of $8.4 million in 2005. The $20.5 million of net cash provided by financing activities in 2007 was primarily due to financing required to fund the cash portion of the purchase price of SARCOM in the amount of approximately $48.2 million, which net of payments made on the outstanding balance of our line of credit resulted in a net increase of $21.4 million on our line of credit, an increase in our note payable of $3.0 million, partially offset by a decrease in book overdraft of $7.2 million which was due to timing of our outstanding payments to vendors relative to the prior year. The $25.3 million of net cash used in financing activities in 2006 was due to the $21.0 million repayment on our line of credit and a $4.7 million decrease in book overdraft, which decrease was due to the timing of our outstanding payments to vendors relative to the prior year. The $8.4 million of net cash provided by financing activities in 2005 resulted primarily from the $4.5 million net increase in our borrowings under our line of credit in order to finance the increase in accounts receivable and a $4.3 million increase in our book overdraft.
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Payments Due by Period | ||||||||||||||||||||
Less than | ||||||||||||||||||||
Total | 1 year | 1-3 years | 3-5 years | After 5 years | ||||||||||||||||
Contractual obligations | ||||||||||||||||||||
Long-term debt obligation (a) (Note 8) | $ | 5,231 | $ | 775 | $ | 1,550 | $ | 1,550 | $ | 1,356 | ||||||||||
Purchase obligations (b) (Note 10) | 4,740 | 4,518 | 218 | 4 | — | |||||||||||||||
Operating lease obligations (Note 10) | 13,663 | 5,309 | 6,583 | 1,758 | 13 | |||||||||||||||
Capital lease obligations (Note 10) | 185 | 112 | 73 | — | — | |||||||||||||||
Total contractual obligations | $ | 23,819 | $ | 10,714 | $ | 8,424 | $ | 3,312 | $ | 1,369 | ||||||||||
Less than | ||||||||||||||||||||
Total | 1 year | 1-3 years | 3-5 years | After 5 years | ||||||||||||||||
Other commercial commitment | ||||||||||||||||||||
Line of credit (a) (Note 8) | $ | 53,893 | $ | 53,893 | $ | — | $ | — | $ | — | ||||||||||
(a) | Long-term debt obligation and line of credit exclude interest, which is based on a variable rate tied to the prime rate or LIBOR plus a variable spread, at our option. | |
(b) | Purchase obligations consist of minimum commitments under non-cancelable contracts for services relating to telecommunications, IT maintenance, financial services and employment contracts with certain employees (which consist of severance arrangements that, if exercised, would become payable in less than one year). |
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Financial Statements and Supplementary Data | ||||
49 | ||||
50 | ||||
51 | ||||
52 | ||||
53 | ||||
54 | ||||
74 | ||||
Financial Statement Schedule | ||||
78 | ||||
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/s/ PricewaterhouseCoopers LLP | ||
Los Angeles, California March 14, 2008 |
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At December 31, | ||||||||
2007 | 2006 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 6,623 | $ | 5,836 | ||||
Accounts receivable, net of allowances of $4,653 and $4,630 | 159,362 | 114,184 | ||||||
Inventories, net | 64,515 | 51,268 | ||||||
Prepaid expenses and other current assets | 9,233 | 8,497 | ||||||
Deferred income taxes | 4,698 | 4,594 | ||||||
Total current assets | 244,431 | 184,379 | ||||||
Property and equipment, net | 8,958 | 8,055 | ||||||
Deferred income taxes | 2,728 | 6,248 | ||||||
Goodwill | 26,912 | 3,525 | ||||||
Intangible assets, net | 12,024 | 931 | ||||||
Other assets | 1,182 | 429 | ||||||
Total assets | $ | 296,235 | $ | 203,567 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 110,786 | $ | 75,837 | ||||
Accrued expenses and other current liabilities | 29,150 | 20,215 | ||||||
Deferred revenue | 12,563 | 11,964 | ||||||
Line of credit | 53,893 | 32,477 | ||||||
Note payable – current | 775 | 500 | ||||||
Total current liabilities | 207,167 | 140,993 | ||||||
Note payable and other long-term liabilities | 4,644 | 1,750 | ||||||
Total liabilities | 211,811 | 142,743 | ||||||
Commitments and contingencies (Note 10) | ||||||||
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; 13,676,765 and 12,648,720 shares issued; and 13,260,087 and 12,354,520 shares outstanding, respectively | 14 | 13 | ||||||
Additional paid-in capital | 97,869 | 87,465 | ||||||
Treasury stock, at cost: 416,678 shares and 294,200 shares, respectively | (1,015 | ) | (1,015 | ) | ||||
Accumulated other comprehensive income | 993 | 241 | ||||||
Accumulated deficit | (13,437 | ) | (25,880 | ) | ||||
Total stockholders’ equity | 84,424 | 60,824 | ||||||
Total liabilities and stockholders’ equity | $ | 296,235 | $ | 203,567 | ||||
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Years Ended December 31, | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
Net sales | $ | 1,215,433 | $ | 1,005,820 | $ | 997,232 | ||||||
Cost of goods sold | 1,067,595 | 881,902 | 878,665 | |||||||||
Gross profit | 147,838 | 123,918 | 118,567 | |||||||||
Selling, general and administrative expenses | 123,520 | 113,500 | 118,555 | |||||||||
Operating profit | 24,318 | 10,418 | 12 | |||||||||
Interest expense, net | 4,031 | 3,940 | 3,058 | |||||||||
Income (loss) from continuing operations before income taxes | 20,287 | 6,478 | (3,046 | ) | ||||||||
Income tax expense (benefit) | 7,844 | 2,522 | (1,114 | ) | ||||||||
Income (loss) from continuing operations | 12,443 | 3,956 | (1,932 | ) | ||||||||
Loss from discontinued operation, net of taxes | — | — | (1,781 | ) | ||||||||
Net income (loss) | $ | 12,443 | $ | 3,956 | $ | (3,713 | ) | |||||
Basic and Diluted Earnings (Loss) Per Common Share | ||||||||||||
Basic earnings (loss) per share: | ||||||||||||
Income (loss) from continuing operations | $ | 0.98 | $ | 0.33 | $ | (0.17 | ) | |||||
Loss from discontinued operation, net of taxes | — | — | (0.15 | ) | ||||||||
Net income (loss) | $ | 0.98 | $ | 0.33 | $ | (0.32 | ) | |||||
Diluted earnings (loss) per share: | ||||||||||||
Income (loss) from continuing operations | $ | 0.90 | $ | 0.31 | $ | (0.17 | ) | |||||
Loss from discontinued operation, net of taxes | — | — | (0.15 | ) | ||||||||
Net income (loss) | $ | 0.90 | $ | 0.31 | $ | (0.32 | ) | |||||
Weighted average number of common shares outstanding: | ||||||||||||
Basic | 12,667 | 12,052 | 11,652 | |||||||||
Diluted | 13,767 | 12,908 | 11,652 |
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Accumulated | ||||||||||||||||||||||||||||||||
Additional | Deferred | Other | ||||||||||||||||||||||||||||||
Common Stock | Paid-in | Stock-Based | Treasury | Comprehensive | Accumulated | |||||||||||||||||||||||||||
Outstanding | Amount | Capital | Compensation | Stock | Income (Loss) | Deficit | Total | |||||||||||||||||||||||||
Balance at December 31, 2004 | 11,557 | $ | 12 | $ | 99,172 | $ | (1,333 | ) | $ | (1,015 | ) | $ | 198 | $ | (26,123 | ) | $ | 70,911 | ||||||||||||||
Stock option exercises, including related income tax benefit | 164 | — | 611 | — | — | — | — | 611 | ||||||||||||||||||||||||
Amortization of deferred stock-based compensation | — | — | — | 125 | — | — | — | 125 | ||||||||||||||||||||||||
Spin-off of eCOST.com | — | — | (16,250 | ) | 1,208 | — | — | — | (15,042 | ) | ||||||||||||||||||||||
Subtotal | — | — | — | — | — | — | — | 56,605 | ||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | (3,713 | ) | (3,713 | ) | ||||||||||||||||||||||
Translation adjustments | — | — | — | — | — | 76 | — | 76 | ||||||||||||||||||||||||
Comprehensive loss | — | — | — | — | — | — | — | (3,637 | ) | |||||||||||||||||||||||
Balance at December 31, 2005 | 11,721 | 12 | 83,533 | — | (1,015 | ) | 274 | (29,836 | ) | 52,968 | ||||||||||||||||||||||
Stock option exercises | 633 | 1 | 913 | — | — | — | — | 914 | ||||||||||||||||||||||||
Stock-based compensation expense | — | — | 1,532 | — | — | — | — | 1,532 | ||||||||||||||||||||||||
Vested stock option and warrant issued to non-employees | — | — | 814 | — | — | — | — | 814 | ||||||||||||||||||||||||
eCOST NOLs allocated to PC Mall | — | — | 673 | — | — | — | — | 673 | ||||||||||||||||||||||||
Subtotal | — | — | — | — | — | — | — | 56,901 | ||||||||||||||||||||||||
Net income | — | — | — | — | — | — | 3,956 | 3,956 | ||||||||||||||||||||||||
Translation adjustments | — | — | — | — | — | (33 | ) | — | (33 | ) | ||||||||||||||||||||||
Comprehensive income | — | — | — | — | — | — | — | 3,923 | ||||||||||||||||||||||||
Balance at December 31, 2006 | 12,354 | 13 | 87,465 | — | (1,015 | ) | 241 | (25,880 | ) | 60,824 | ||||||||||||||||||||||
Stock option exercises, including related income tax benefit | 394 | 1 | 2,864 | — | — | — | — | 2,865 | ||||||||||||||||||||||||
Stock-based compensation expense | — | — | 1,353 | — | — | — | — | 1,353 | ||||||||||||||||||||||||
SARCOM acquisition | 512 | — | 6,187 | — | — | — | — | 6,187 | ||||||||||||||||||||||||
Subtotal | — | — | — | — | — | — | — | 71,229 | ||||||||||||||||||||||||
Net income | — | — | — | — | — | — | 12,443 | 12,443 | ||||||||||||||||||||||||
Translation adjustments, net of taxes | — | — | — | — | — | 752 | — | 752 | ||||||||||||||||||||||||
Comprehensive income | — | — | — | — | — | — | — | 13,195 | ||||||||||||||||||||||||
Balance at December 31, 2007 | 13,260 | $ | 14 | $ | 97,869 | $ | — | $ | (1,015 | ) | $ | 993 | $ | (13,437 | ) | $ | 84,424 | |||||||||||||||
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Years Ended December 31, | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
Cash Flows From Operating Activities | ||||||||||||
Net income (loss) | $ | 12,443 | $ | 3,956 | $ | (3,713 | ) | |||||
Loss from discontinued operations, net of taxes | — | — | 1,781 | |||||||||
Income (loss) from continuing operations | 12,443 | 3,956 | (1,932 | ) | ||||||||
Adjustments to reconcile income (loss) from continuing operations to net cash provided by (used in) operating activities: | ||||||||||||
Depreciation and amortization | 4,357 | 4,417 | 4,043 | |||||||||
Provision (benefit) for deferred income taxes | 1,960 | 2,249 | (1,432 | ) | ||||||||
Tax benefit related to stock option exercises | 1,833 | — | 281 | |||||||||
Excess tax benefit related to stock option exercises | (2,663 | ) | — | — | ||||||||
Non-cash stock-based compensation | 1,353 | 1,532 | 105 | |||||||||
(Gain)/loss on sale of fixed assets | 57 | (13 | ) | (60 | ) | |||||||
Change in operating assets and liabilities: | ||||||||||||
Accounts receivable | (12,783 | ) | (11,203 | ) | (10,588 | ) | ||||||
Inventories | (8,832 | ) | 13,180 | 14,409 | ||||||||
Prepaid expenses and other current assets | 132 | (167 | ) | (2,104 | ) | |||||||
Other assets | (189 | ) | 78 | 56 | ||||||||
Accounts payable | 31,656 | 15,806 | (8,684 | ) | ||||||||
Accrued expenses and other current liabilities | 2,249 | 190 | 122 | |||||||||
Deferred revenue | (1,739 | ) | 1,524 | 178 | ||||||||
Total adjustments | 17,391 | 27,593 | (3,674 | ) | ||||||||
Net cash provided by (used in) operating activities | 29,834 | 31,549 | (5,606 | ) | ||||||||
Cash Flows From Investing Activities | ||||||||||||
Purchases of property and equipment | (2,619 | ) | (3,327 | ) | (3,177 | ) | ||||||
Acquisition of SARCOM | (47,650 | ) | — | — | ||||||||
Acquisition of GMRI’s products business | — | (3,386 | ) | — | ||||||||
Proceeds from sale of property and equipment | — | 67 | 93 | |||||||||
Net cash used in investing activities | (50,269 | ) | (6,646 | ) | (3,084 | ) | ||||||
Cash Flows From Financing Activities | ||||||||||||
Net borrowings (payments) under line of credit | 21,416 | (21,040 | ) | 4,490 | ||||||||
Change in book overdraft | (7,194 | ) | (4,697 | ) | 4,298 | |||||||
Net borrowings (repayments) under note payable | 2,981 | (500 | ) | (500 | ) | |||||||
Payments for deferred financing costs | (275 | ) | — | (188 | ) | |||||||
Payments of obligations under capital lease | (153 | ) | — | — | ||||||||
Proceeds from stock issued under stock option plans | 1,032 | 914 | 330 | |||||||||
Excess tax benefit related to stock option exercises | 2,663 | — | — | |||||||||
Net cash (used in) provided by financing activities | 20,470 | (25,323 | ) | 8,430 | ||||||||
Effect of foreign currency on cash flow | 752 | (33 | ) | 76 | ||||||||
Net cash provided by (used in) continuing operations | 787 | (453 | ) | (184 | ) | |||||||
Cash Flows From Discontinued Operation | ||||||||||||
Net cash flow from operating activities | — | — | (5,937 | ) | ||||||||
Net cash flow from investing activities | — | — | 5,937 | |||||||||
Net cash flow from financing activities | — | — | — | |||||||||
Net cash flows from discontinued operation | — | — | — | |||||||||
Net decrease in cash and cash equivalents | 787 | (453 | ) | (184 | ) | |||||||
Cash and cash equivalents at beginning of the period | 5,836 | 6,289 | 6,473 | |||||||||
Cash and cash equivalents at end of the period | $ | 6,623 | $ | 5,836 | $ | 6,289 | ||||||
Supplemental Cash Flow Information | ||||||||||||
Interest paid | $ | 3,897 | $ | 3,479 | $ | 2,943 | ||||||
Income taxes paid | 3,146 | 153 | 121 | |||||||||
Supplemental Non-Cash Investing Activity (Note 4) | ||||||||||||
Goodwill related to acquisition of GMRI’s products business | $ | 389 | $ | — | $ | — | ||||||
Sarcom and GMRI acquisitions related: | — | |||||||||||
Fair value of assets acquired | $ | 73,821 | $ | 3,996 | — | |||||||
Cash paid | (48,220 | ) | (3,363 | ) | $ | — | ||||||
Value of common stock issued (including redeemable common stock) | (6,188 | ) | — | — | ||||||||
Liabilities assumed | $ | 19,413 | $ | 633 | — | |||||||
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December 31, | ||||||||
2007 | 2006 | |||||||
Trade receivables | $ | 138,490 | $ | 98,974 | ||||
Other receivables | 25,525 | 19,840 | ||||||
Total gross accounts receivable | 164,015 | 118,814 | ||||||
Less: Allowance for doubtful accounts receivable | (4,653 | ) | (4,630 | ) | ||||
Accounts receivable, net | $ | 159,362 | $ | 114,184 | ||||
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Computers, software, machinery and equipment | 1 – 7 years | |
Leasehold improvements | 1 – 10 years | |
Furniture and fixtures | 3 – 15 years | |
Building and improvements | 5 – 31 years |
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December 31, | ||||
2005 | ||||
Loss from continuing operations (as reported) | $ | (1,932 | ) | |
Less stock compensation expense, net of taxes, determined under the fair value based method | (1,966 | ) | ||
Add stock compensation expense, net of taxes, included in reported loss from continuing operations | — | |||
Loss from continuing operations (pro forma) | $ | (3,898 | ) | |
Basic and diluted loss from continuing operations per common share: | ||||
Basic and diluted – as reported | $ | (0.17 | ) | |
Basic and diluted – pro forma | (0.33 | ) |
December 31, | ||||
2005 | ||||
Net loss (as reported) | $ | (3,713 | ) | |
Less stock compensation expense, net of taxes, determined under the fair value based method | (1,966 | ) | ||
Add stock compensation expense, net of taxes, included in reported net loss | — | |||
Net loss (pro forma) | $ | (5,679 | ) | |
Basic and diluted loss per common share: | ||||
Basic and diluted – as reported | $ | (0.32 | ) | |
Basic and diluted – pro forma | (0.49 | ) |
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2005 | ||||
Risk free interest rates | 3.88 | % | ||
Expected dividend yield | None | |||
Expected lives (in years) | 5 | |||
Expected volatility | 99 | % | ||
Weighted average grant date fair value | $ | 3.52 |
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Years Ended December 31, | ||||||||
2007 | 2006 | |||||||
Risk free interest rate | 4.25 | % | 4.75 | % | ||||
Expected volatility | 66 | % | 95 | % | ||||
Expected term (in years) | 6 | 6 | ||||||
Expected dividend yield | None | None |
Weighted | ||||||||||||||||
Weighted | Average | Aggregate | ||||||||||||||
Average | Remaining | Intrinsic | ||||||||||||||
Exercise | Contractual | Value | ||||||||||||||
Number | Price | Term (in years) | (in thousands) | |||||||||||||
Outstanding at December 31, 2006 | 1,939,030 | $ | 3.84 | |||||||||||||
Granted | 343,750 | 11.24 | ||||||||||||||
Exercised | (394,064 | ) | 2.62 | |||||||||||||
Forfeited | (43,366 | ) | 6.00 | |||||||||||||
Expired/cancelled | (9,941 | ) | 2.64 | |||||||||||||
Outstanding at December 31, 2007 | 1,835,409 | $ | 5.44 | 6.48 | $ | 7,748 | ||||||||||
Exercisable at December 31, 2007 | 1,347,882 | $ | 4.07 | 5.61 | $ | 7,096 | ||||||||||
Years Ended December 31, | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
Weighted average grant-date fair value of options granted during the period | $ | 7.07 | $ | 4.70 | $ | 3.52 | ||||||
Total intrinsic value of options exercised during the period (in thousands) | 4,462 | 3,472 | 736 | |||||||||
Total fair value of shares vested during the period (in thousands) | 1,344 | 1,565 | 3,121 |
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Weighted Average | ||||||||
Grant Date Fair | ||||||||
Number | Value | |||||||
Non-vested at December 31, 2006 | — | $ | — | |||||
Granted | 9,000 | 12.27 | ||||||
Vested | (2,250 | ) | 12.27 | |||||
Forfeited | — | — | ||||||
Non-vested at December 31, 2007 | 6,750 | 12.27 | ||||||
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Total purchase price, adjusted | $ | 54,408 | ||
Cash | 571 | |||
Accounts receivable | 27,728 | |||
Inventory | 4,415 | |||
Other accounts receivable | 3,172 | |||
Property and equipment, net | 1,916 | |||
Other assets | 1,131 | |||
Intangible assets: | ||||
Customer relationships | 6,200 | |||
Tradenames | 5,200 | |||
Non-compete agreements | 490 | |||
Total intangible assets | 11,890 | |||
Total assets acquired | 50,823 | |||
Accounts payable | (10,487 | ) | ||
Accrued liabilities | (6,588 | ) | ||
Deferred revenue | (2,338 | ) | ||
Total liabilities assumed | (19,413 | ) | ||
Total allocated to goodwill | $ | 22,998 | ||
Years Ended | ||||||||
December 31, | ||||||||
2007 | 2006 | |||||||
Net sales | $ | 1,398,002 | $ | 1,242,696 | ||||
Operating profit | 26,164 | 14,044 | ||||||
Net income | 11,209 | 3,814 | ||||||
Basic and Diluted Earnings Per Common Share | ||||||||
Basic | $ | 0.86 | $ | 0.30 | ||||
Diluted | 0.79 | 0.28 | ||||||
Weighted average number of common shares outstanding: | ||||||||
Basic | 13,029 | 12,564 | ||||||
Diluted | 14,129 | 13,420 |
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Other receivable | $ | 250 | ||
Goodwill | 2,509 | |||
Intangible assets: | ||||
Product backlog | 567 | |||
Maintenance contracts | 143 | |||
Trade names | 240 | |||
Software licenses | 218 | |||
Non-compete agreements | 20 | |||
Total intangible assets | 1,188 | |||
Furniture and equipment | 49 | |||
Total assets acquired | $ | 3,996 | ||
Liabilities: | ||||
Accrued liabilities | $ | 633 | ||
Net assets acquired | $ | 3,363 | ||
December 31, | ||||
2005 | ||||
Net sales | $ | 59,781 | ||
Loss before income taxes | $ | (3,252 | ) | |
Income tax benefit | (1,005 | ) | ||
Minority interest | 466 | |||
Loss from discontinued operation, net of taxes | $ | (1,781 | ) | |
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At December 31, | ||||||||
2007 | 2006 | |||||||
Computers, software, machinery and equipment | $ | 33,794 | $ | 29,352 | ||||
Leasehold improvements | 4,545 | 4,867 | ||||||
Furniture and fixtures | 3,753 | 3,529 | ||||||
Building and improvements | 1,725 | 1,725 | ||||||
Land | 912 | 912 | ||||||
Software development in progress | 496 | 848 | ||||||
Subtotal | 45,225 | 41,233 | ||||||
Less: Accumulated depreciation and amortization | (36,267 | ) | (33,178 | ) | ||||
Property and equipment, net | $ | 8,958 | $ | 8,055 | ||||
Goodwill | ||||
Balance at December 31, 2005 | $ | 1,405 | ||
Acquisition of GMRI | 2,120 | |||
Balance at December 31, 2006 | 3,525 | |||
Acquisition of SARCOM | 22,998 | |||
Adjustment relating to GMRI purchase accounting | 389 | |||
Balance at December 31, 2007 | $ | 26,912 | ||
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Weighted | ||||||||||||||||||||||||||||
Average | ||||||||||||||||||||||||||||
Estimated | At December 31, 2007 | At December 31, 2006 | ||||||||||||||||||||||||||
Useful Lives | Gross | Accumulated | Net | Gross | Accumulated | Net | ||||||||||||||||||||||
(years) | Amount | Amortization | Amount | Amount | Amortization | Amount | ||||||||||||||||||||||
Patent, trademarks & URLs | 7 | $ | 6,118 | (1) | $ | 576 | $ | 5,542 | $ | 922 | $ | 504 | $ | 418 | ||||||||||||||
Customer relationship | 5 | 6,755 | 888 | 5,867 | 555 | 499 | 55 | |||||||||||||||||||||
Product backlog | Various (2) | 567 | 567 | — | 581 | 422 | 160 | |||||||||||||||||||||
Software licenses | 3 | 218 | 97 | 121 | 218 | 24 | 194 | |||||||||||||||||||||
Maintenance contracts | Various (2) | 143 | 127 | 16 | 143 | 84 | 59 | |||||||||||||||||||||
Non-compete agreements | 5 | 608 | 131 | 477 | 118 | 80 | 38 | |||||||||||||||||||||
Other | 5 | 32 | 31 | 1 | 32 | 25 | 7 | |||||||||||||||||||||
Total intangible assets | $ | 14,441 | $ | 2,417 | $ | 12,024 | $ | 2,569 | $ | 1,638 | $ | 931 | ||||||||||||||||
(1) | Included in the total amount for “Patent, trademarks, & URLs” at December 31, 2007 are $5.2 million of trademarks with indefinite useful lives acquired in the SARCOM acquisition that are not amortized. | |
(2) | Amortization of these intangible assets, which relate to customer orders, is based on actual shipments of goods or performance of service. |
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2007 | 2006 | 2005 | ||||||||||
Current | ||||||||||||
Federal | $ | 4,622 | $ | 130 | $ | — | ||||||
State | 1,069 | 143 | 37 | |||||||||
Total – Current | 5,691 | 273 | 37 | |||||||||
Deferred | ||||||||||||
Federal | 1,984 | 2,027 | (1,019 | ) | ||||||||
State | 145 | 210 | (171 | ) | ||||||||
Foreign | 24 | 12 | 39 | |||||||||
Total – Deferred | 2,153 | 2,249 | (1,151 | ) | ||||||||
Total income tax expense (benefit) | $ | 7,844 | $ | 2,522 | $ | (1,114 | ) | |||||
2007 | 2006 | 2005 | ||||||||||
Expected taxes at federal statutory tax rate | 34.0 | % | 34.0 | % | 34.0 | % | ||||||
State income taxes, net of federal income tax benefit | 5.0 | 4.6 | 4.8 | |||||||||
Non-deductible business expenses | 0.8 | 1.5 | (3.1 | ) | ||||||||
Other | (1.1 | ) | (1.2 | ) | 0.9 | |||||||
Total | 38.7 | % | 38.9 | % | 36.6 | % | ||||||
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2007 | 2006 | |||||||
Accounts receivable | $ | 1,787 | $ | 1,715 | ||||
Inventories | 831 | 682 | ||||||
Property and equipment | 1,948 | 1,281 | ||||||
Amortization | (637 | ) | 2,242 | |||||
Accrued expenses and reserves | 1,822 | 2,347 | ||||||
Tax credits and loss carryforwards | 1,642 | 2,825 | ||||||
Other | 247 | (48 | ) | |||||
Subtotal | 7,640 | 11,044 | ||||||
Valuation allowance | (214 | ) | (202 | ) | ||||
Total | $ | 7,426 | $ | 10,842 | ||||
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2008 | 2009 | 2010 | 2011 | 2012 | Thereafter | Total | ||||||||||||||||||||||
Operating lease obligations | $ | 5,309 | $ | 4,369 | $ | 2,214 | $ | 1,708 | $ | 50 | $ | 13 | $ | 13,663 | ||||||||||||||
Capital lease obligations | 112 | 58 | 15 | — | — | — | 185 | |||||||||||||||||||||
Other commitments | 4,518 | 173 | 45 | 4 | — | — | 4,740 | |||||||||||||||||||||
Total minimum payments | $ | 9,939 | $ | 4,600 | $ | 2,274 | $ | 1,712 | $ | 50 | $ | 13 | $ | 18,588 | ||||||||||||||
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Income | Per Share | |||||||||||
(Loss) | Shares | Amounts | ||||||||||
Year Ended December 31, 2007: | ||||||||||||
Basic EPS | ||||||||||||
Net income | $ | 12,443 | 12,667 | $ | 0.98 | |||||||
Effect of dilutive securities | ||||||||||||
Dilutive effect of stock options and warrants | — | 1,100 | ||||||||||
Diluted EPS | ||||||||||||
Adjusted net income | $ | 12,443 | 13,767 | $ | 0.90 | |||||||
Year Ended December 31, 2006: | ||||||||||||
Basic EPS | ||||||||||||
Income from continuing operations | $ | 3,956 | 12,052 | $ | 0.33 | |||||||
Effect of dilutive securities | ||||||||||||
Dilutive effect of stock options and warrants | — | 856 | ||||||||||
Diluted EPS | ||||||||||||
Adjusted income from continuing operations | $ | 3,956 | 12,908 | $ | 0.31 | |||||||
Year Ended December 31, 2005: | ||||||||||||
Basic EPS | ||||||||||||
Loss from continuing operations | $ | (1,932 | ) | 11,652 | $ | (0.17 | ) | |||||
Effect of dilutive securities | ||||||||||||
Dilutive effect of stock options and warrants | — | — | ||||||||||
Diluted EPS | ||||||||||||
Adjusted loss from continuing operations | $ | (1,932 | ) | 11,652 | $ | (0.17 | ) | |||||
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Year Ended December 31, | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
Net income (loss) | $ | 12,443 | $ | 3,956 | $ | (3,713 | ) | |||||
Other comprehensive income (loss), before tax: | ||||||||||||
Foreign currency translation adjustments | 1,311 | (33 | ) | 76 | ||||||||
Income tax expense related to other comprehensive income | (559 | ) | — | — | ||||||||
Total comprehensive income (loss) | $ | 13,195 | $ | 3,923 | $ | (3,637 | ) | |||||
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Core business | OnSale.com | Consolidated | ||||||||||
Year Ended December 31, 2007 | ||||||||||||
Net sales | $ | 1,199,999 | $ | 15,434 | $ | 1,215,433 | ||||||
Gross profit | 146,175 | 1,663 | 147,838 | |||||||||
Operating profit (loss) | 25,482 | (1,164 | ) | 24,318 | ||||||||
Year Ended December 31, 2006 | ||||||||||||
Net sales | $ | 993,860 | $ | 11,960 | $ | 1,005,820 | ||||||
Gross profit | 122,402 | 1,516 | 123,918 | |||||||||
Operating profit (loss) | 11,935 | (1,517 | ) | 10,418 | ||||||||
Year Ended December 31, 2005 | ||||||||||||
Net sales | $ | 987,324 | $ | 9,908 | $ | 997,232 | ||||||
Gross profit | 117,708 | 859 | 118,567 | |||||||||
Operating profit (loss) | 2,453 | (2,441 | ) | 12 |
At December 31, | ||||||||||||
Location: | 2007 | 2006 | 2005 | |||||||||
United States | $ | 7,439 | $ | 6,247 | $ | 7,189 | ||||||
Philippines | 1,240 | 1,319 | 395 | |||||||||
Canada | 279 | 489 | 832 | |||||||||
Property and equipment, net | $ | 8,958 | $ | 8,055 | $ | 8,416 | ||||||
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• | payroll administration; | ||
• | tax return preparation; | ||
• | human resources administration; | ||
• | product information management; | ||
• | catalog advertising production services; and | ||
• | accounting and finance services necessary for the preparation of eCOST.com financial statement for the periods through the date of the distribution. |
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SUPPLEMENTARY DATA
2007 | ||||||||||||||||
1stQuarter | 2ndQuarter | 3rdQuarter(1) | 4thQuarter(1) | |||||||||||||
Net sales | $ | 256,780 | $ | 262,958 | $ | 287,688 | $ | 408,007 | ||||||||
Gross profit | 31,812 | 33,932 | 34,179 | 47,915 | ||||||||||||
Net income | 1,868 | 2,999 | 2,978 | 4,598 | ||||||||||||
Basic and diluted earnings per common share: | ||||||||||||||||
Basic | $ | 0.15 | $ | 0.24 | $ | 0.24 | $ | 0.34 | ||||||||
Diluted | 0.14 | 0.22 | 0.22 | 0.32 |
2006 | ||||||||||||||||
1stQuarter | 2ndQuarter | 3rdQuarter(2) | 4thQuarter(2) | |||||||||||||
Net sales | $ | 234,222 | $ | 234,119 | $ | 242,171 | $ | 295,308 | ||||||||
Gross profit | 29,431 | 28,992 | 31,556 | 33,939 | ||||||||||||
Net income (loss) | (55 | ) | 395 | 1,908 | 1,708 | |||||||||||
Basic and diluted earnings (loss) per common share: | ||||||||||||||||
Basic | $ | (0.00 | ) | $ | 0.03 | $ | 0.16 | $ | 0.14 | |||||||
Diluted | (0.00 | ) | 0.03 | 0.15 | 0.13 |
(1) | Includes the results of SARCOM, which we acquired on September 17, 2007, from and after the date of the acquisition. | |
(2) | Includes the results of GMRI, which we acquired on September 7, 2006, from and after the date of the acquisition. |
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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE |
• | pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; | ||
• | provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of our management and directors; and | ||
• | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. |
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ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS |
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Page Number | ||
(1) Financial Statements | See Part II, Item 8, beginning on page 49 | |
(2) Financial Statement Schedule II - Valuation and Qualifying Accounts for the Years Ended December 31, 2007, 2006 and 2005 | See Part IV, Item 15, beginning on page 78 | |
(3) Exhibits | See Part IV, Item 15, beginning on page 79 |
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Balance | Balance | |||||||||||||||
at | Additions | Deduction | at End | |||||||||||||
Beginning | Charged to | from | of | |||||||||||||
of Year | Operations | Reserves | Year | |||||||||||||
Allowance for doubtful accounts for the years ended: | ||||||||||||||||
December 31, 2007 | $ | 4,630 | $ | 2,215 | $ | (2,192 | )(a) | $ | 4,653 | |||||||
December 31, 2006 | 4,774 | 4,651 | (4,795 | )(a) | 4,630 | |||||||||||
December 31, 2005 | 2,846 | 3,851 | (1,923 | )(a) | 4,774 | |||||||||||
Reserve for inventory for the years ended: | ||||||||||||||||
December 31, 2007 | $ | 1,616 | $ | 1,519 | $ | (1,455 | )(b) | $ | 1,680 | |||||||
December 31, 2006 | 2,202 | 1,245 | (1,831 | )(b) | 1,616 | |||||||||||
December 31, 2005 | 2,022 | 1,675 | (1,495 | )(b) | 2,202 | |||||||||||
Sales returns reserve for the years ended: | ||||||||||||||||
December 31, 2007 | $ | 2,882 | $ | 21,003 | $ | (21,807 | )(c) | $ | 2,078 | |||||||
December 31, 2006 | 3,355 | 24,469 | (24,942 | )(c) | 2,882 | |||||||||||
December 31, 2005 | 3,415 | 28,684 | (28,744 | )(c) | 3,355 | |||||||||||
Valuation allowance for deferred tax assets for the years ended: | ||||||||||||||||
December 31, 2007 | $ | 202 | $ | 12 | $ | — | $ | 214 | ||||||||
December 31, 2006 | — | 202 | — | 202 | ||||||||||||
December 31, 2005 | — | — | — | — |
(a) | Relates primarily to accounts written-off. | |
(b) | Relates primarily to excess and/or obsolete inventory written-off. | |
(c) | Relates to sales returns received and applied to sales returns reserve. |
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Exhibit | ||
Number | Description | |
2.1 | Agreement and Plan of Merger, dated as of August 17, 2007, by and among PC Mall, Inc., Mall Acquisition 2, Inc., SARCOM, Inc., Zohar CDO 2003-1, Limited, Zohar II 2005-1, Limited, Charles E. Sweet, Robert F. Angart & Company, John R. Strauss, Daniel A. Schneider and Howard Schapiro (incorporated herein by reference to Exhibit 2.1 to the Current Report on Form 8-K of PC Mall, Inc. (File no. 0-25790) filed with the Securities and Exchange Commission (the “Commission”) on September 18, 2007) | |
3.1 | Amended and Restated Certificate of Incorporation of PC Mall, Inc. (incorporated herein by reference to Exhibit 3.1(C) to the Quarterly Report on Form 10-Q of PC Mall, Inc. for the quarter ended September 30, 2003 (File No. 0-25790) filed with the Commission on November 14, 2002) | |
3.2 | Amended and Restated Bylaws of PC Mall, Inc. (incorporated herein by reference to Exhibit 3.2 to the Annual Report on Form 10-K of PC Mall, Inc. for the year ended December 31, 2000 (File No. 0-25790) filed with the Commission on April 2, 2001 (the “2000 Form 10-K”)) | |
10.1* | Amended and Restated 1994 Stock Incentive Plan (amended as of June 19, 2002) (incorporated herein by reference to Annex A to the Definitive Proxy Statement of PC Mall, Inc. (File No. 0-25790) filed with the Commission on June 24, 2002) | |
10.2* | Employment Agreement, dated January 1, 1995, between Creative Computers, Inc. and Frank F. Khulusi (incorporated herein by reference to the Registration Statement on Form S-1 of PC Mall, Inc. (File No. 33-89572), declared effective on April 4, 1995 (the “1995 Form S-1”)) | |
10.3* | Amendment to Employment Agreement made and entered into as of December 28, 2005, by and between PC Mall, Inc. and Frank F. Khulusi (incorporated herein by reference to Exhibit 10.32 to the Annual Report on Form 10-K of PC Mall, Inc. for the year ended December 31, 2005 (File No. 0-25790) filed with the Commission on March 31, 2006 (the “December 31, 2005 Form 10-K)) | |
10.4* | Second Amendment to Employment Agreement made and entered into as of December 28, 2005, by and between PC Mall, Inc. and Frank F. Khulusi (incorporated herein by reference to Exhibit 10.33 to the December 31, 2005 Form 10-K) | |
10.5* | Employment Agreement, dated January 20, 2000, between PC Mall, Inc. and Kristin M. Rogers (incorporated herein by reference to Exhibit 10.45 to the Annual Report on Form 10-K of PC Mall, Inc., for the year ended December 31, 2001 (File No. 0-25790) filed with the Commission on April 1, 2002) | |
10.6* | Employment Agreement, dated January 1, 1994, between Creative Computers, Inc. and Daniel J. DeVries (incorporated herein by reference to the 1995 Form S-1) | |
10.7* | Severance Agreement, dated January 31, 2006, between PC Mall Inc. and Daniel J. DeVries (incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K of PC Mall, Inc. (File No. 0-25790) filed with the Commission on February 3, 2006) | |
10.8* | Employment Agreement, dated June 8, 2004, between PC Mall, Inc. and Rob Newton (incorporated herein by reference to Exhibit 10.54 to the Quarterly Report on Form 10-Q of PC Mall, Inc. for the quarter ended June 30, 2004 (File No. 0-25790) filed with the Commission on August 11, 2004 (the “June 30, 2004 Form 10-Q”)) | |
10.9* | Amendment to Employment Agreement, dated March 22, 2005, between PC Mall, Inc. and Rob Newton (incorporated herein by reference to Exhibit 10.2 to the Current Report on form 8-K of PC Mall, Inc. (File No. 0-25790) filed with the commission on March 25, 2005) | |
10.10* | Severance Agreement between AF Services, LLC and Brandon LaVerne (incorporated herein by reference to Exhibit 10.4 to the Quarterly Report on Form 10-Q of PC Mall, Inc. for the quarter ended September 30, 2007 (File No. 0-25790) filed with the Commission on November 14, 2007 (the “September 30, 2007 Form 10-Q”)) | |
10.11* | Form of Executive Non-Qualified Stock Option Agreement (full acceleration upon change in control) (incorporated herein by reference to Exhibit 10.61 to the Quarterly Report on Form 10-Q of PC Mall, Inc. for the quarter ended September 30, 2004 (File No. 0-25790) filed with the Commission on November 15, 2004 (the “September 30, 2004 Form 10-Q”)) | |
10.12* | Form of Executive Non-Qualified Stock Option Agreement (partial acceleration upon change in control) (incorporated herein by reference to Exhibit 10.62 to the September 30, 2004 Form 10-Q) |
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Exhibit | ||
Number | Description | |
10.13* | Directors’ Non-Qualified Stock Option Plan, amended and restated as of May 18, 1999 (incorporated herein by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q of PC Mall, Inc. for the quarter ended June 30, 1999 (File No. 0-25790) filed with the Commission on August 16, 1999) | |
10.14* | Form of Indemnification Agreement between PC Mall, Inc. and each of its directors and executive officers (incorporated herein by reference to Exhibit 10.48 to the Annual Report on Form 10-K of PC Mall, Inc. for the year ended December 31, 2002 (File No. 0-25790) filed with the Commission on March 31, 2003) | |
10.15* | Form of Director Restricted Stock Bonus Award Agreement (incorporated herein by reference to Exhibit 10.3 to the September 30, 2007 Form 10-Q) | |
10.16 | Master Separation and Distribution Agreement, dated September 1, 2004, between PC Mall, Inc. and eCOST.com, Inc. (incorporated herein by reference to Exhibit 10.56 to the Current Report on Form 8-K of PC Mall, Inc. (File No. 0-25790) filed with the Commission on September 8, 2004 (the “September 8, 2004 Form 8-K”)) | |
10.17 | Tax Allocation and Indemnification Agreement, dated September 1, 2004, between PC Mall, Inc. and eCOST.com, Inc. (incorporated herein by reference to Exhibit 10.57 to the September 8, 2004 Form 8-K) | |
10.18 | Employee Benefit Matters Agreement, dated September 1, 2004, between PC Mall, Inc. and eCOST.com, Inc. (incorporated herein by reference to Exhibit 10.58 to the September 8, 2004 Form 8-K) | |
10.19 | Office Lease by and between St. Paul Properties, Inc., as Landlord, and PC Mall, Inc., as Tenant (incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K of PC Mall, Inc. (File No. 0-25790) filed with the Commission on June 21, 2007) | |
10.20 | Lease Agreement, dated September 1, 2003, between PC Mall, Inc. and Anderson Tully Company for the premises located at 4715 E. Shelby Drive, Memphis, TN (incorporated herein by reference to Exhibit 10.63 to the Annual Report on Form 10-K of PC Mall, Inc. for the year ended December 31, 2004 (File No. 0-25790) filed with the Commission on March 31, 2005 (the “December 31, 2004 Form 10-K”)) | |
10.21 | Renewal Letter for lease of property in Memphis, Tennessee, entered into on October 2, 2006 (incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K of PC Mall, Inc. (File No. 0-25790) filed with the Commission on October 6, 2006) | |
10.22 | Lease Agreement, dated June 11, 2003, among PC Mall, Inc., PC Mall Canada, Inc. and Canaprev, Inc. for the premises located at 1100, University, 2nd Floor, Montreal (Quebec) Canada (incorporated herein by reference to Exhibit 10.64 to the December 31, 2004 Form 10-K) | |
10.23 | Addendum to Lease Agreement, dated January 26, 2004, between PC Mall, Inc., PC Mall Canada, Inc. and Canaprev, Inc. for premises located at 1100 University, Montreal, Quebec, Canada, dated January 26, 2004 (incorporated herein by reference to Exhibit 10.70 to the December 31, 2004 Form 10-K) | |
10.24 | Lease Agreement, dated as of July 1, 2001, by and between Sarcom Properties, Inc. and Sarcom Desktop Solutions, Inc., as amended as of December 1, 2002 and as of March 22, 2004 (incorporated herein by reference to Exhibit 10.8 to the September 30, 2007 Form 10-Q) | |
10.25 | Addendum No. 2, by and between Complexe Rue Universite S.E.C., PC Mall Canada, Inc. and PC Mall, Inc., dated January 10, 2008 (incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K of PC Mall, Inc. (File No. 0-25790) filed with the Commission on January 15, 2008) | |
10.26 | Amended and Restated Loan and Security Agreement, dated as of August 1, 2005, by and among PC Mall, Inc., certain subsidiaries of PC Mall, Inc., Wachovia Capital Finance Corporation (Western) and certain other financial institutions (incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K of PC Mall, Inc. (File No. 0-25790) filed with the Commission on September 8, 2005) | |
10.27 | Second Amendment to Amended and Restated Loan and Security Agreement, dated as of June 11, 2007, by and among the Registrant, certain subsidiaries of the Registrant, Wachovia Capital Finance Corporation (Western) and certain other financial institutions (incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K of PC Mall, Inc. (File No. 0-25790) filed with the Commission on June 15, 2007) | |
10.28 | Third Amendment to Amended and Restated Loan and Security Agreement, dated as of September 17, 2007, by and among PC Mall, Inc., certain subsidiaries of PC Mall, Inc., Wachovia Capital Finance Corporation (Western) and certain other financial institutions (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of PC Mall, Inc. (File No. 0-25790) filed with the Commission on September 18, 2007) |
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Exhibit | ||
Number | Description | |
10.29 | Fourth Amendment to Amended and Restated Loan and Security Agreement, dated as of November 5, 2007, by and among PC Mall, Inc, certain of its subsidiaries, Wachovia Capital Finance Corporation (Western) and certain other financial institutions (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of PC Mall, Inc. (File No. 0-25790) filed with the Commission on November 6, 2007) | |
10.30 | Asset Purchase Agreement, dated as of September 7, 2006, by and among a wholly-owned subsidiary of PC Mall Gov, Inc. GMRI and the shareholders of GMRI (incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K of PC Mall, Inc. (File No. 0-25790) filed with the Commission on September 12, 2006) | |
10.31 | Joint Stipulation of Settlement and Release made and entered into by and between Plaintiff Nicole Atkins, Class Representative and Defendants PC Mall, Inc. and PC Mall Sales, Inc. (incorporated herein by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q of PC Mall, Inc. (File No. 0-25790) for the period ended March 31, 2007 filed with the Commission on May 15, 2007 | |
10.32 | Registration Rights Agreement, dated as of September 17, 2007, by and among PC Mall, Inc., Zohar CDO 2003-1, Limited, Zohar II 2005-1, Limited, Charles E. Sweet, Robert F. Angart & Company, John R. Strauss, Daniel A. Schneider and Howard Schapiro (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K of PC Mall, Inc. (File No. 0-25790) filed with the Commission on September 18, 2007) | |
10.33* | Summary of Executive Bonus Plan (incorporated herein by reference to Exhibit 10.68 to the December 31, 2004 Form 10-K) | |
10.34* | Summary of Executive Salary and Bonus Arrangements | |
10.35* | Summary of Director Compensation Arrangements | |
21.1 | Subsidiaries of PC Mall, Inc. as of December 31, 2007 | |
23.1 | Consent of PricewaterhouseCoopers LLP | |
31.1 | Certification of the Chief Executive Officer of PC Mall, Inc. pursuant to Exchange Act Rule 13a-14(a) | |
31.2 | Certification of the Chief Financial Officer of PC Mall, Inc. pursuant to Exchange Act Rule 13a-14(a) | |
32.1 | Certification of the Chief Executive Officer of PC Mall, Inc. pursuant to 18 U.S.C. 1350, as adopted by Section 906 of the Sarbanes-Oxley Act of 2002 | |
32.2 | Certification of the Chief Financial Officer of PC Mall, Inc. pursuant to 18 U.S.C. 1350, as adopted by Section 906 of the Sarbanes-Oxley Act of 2002 |
* | Management contract, or compensatory plan or arrangement. |
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PC MALL, INC. (Registrant) | ||||
Date: March 17, 2008 | By: | /s/ FRANK F. KHULUSI | ||
Frank F. Khulusi | ||||
Chief Executive Officer | ||||
Signature | Title | Date | ||||||
/s/ FRANK F. KHULUSI | Chairman, Chief Executive Officer and President (Principal Executive Officer) | March 17, 2008 | ||||||
/s/ BRANDON H. LAVERNE | Interim Chief Financial Officer, Chief Accounting Officer and Treasurer (Principal Financial and Accounting Officer) | March 17, 2008 | ||||||
/s/ THOMAS A. MALOOF | Director | March 17, 2008 | ||||||
/s/ RONALD B. RECK | Director | March 17, 2008 | ||||||
/s/ PAUL C. HEESCHEN | Director | March 17, 2008 |
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Exhibit | ||
Number | Description | |
10.34* | Summary of Executive Salary and Bonus Arrangements | |
10.35* | Summary of Director Compensation Arrangements | |
21.1 | Subsidiaries of PC Mall, Inc. as of December 31, 2007 | |
23.1 | Consent of PricewaterhouseCoopers LLP | |
31.1 | Certification of the Chief Executive Officer of PC Mall, Inc. pursuant to Exchange Act Rule 13a-14(a) | |
31.2 | Certification of the Chief Financial Officer of PC Mall, Inc. pursuant to Exchange Act Rule 13a-14(a) | |
32.1 | Certification of the Chief Executive Officer of PC Mall, Inc. pursuant to 18 U.S.C. 1350, as adopted by Section 906 of the Sarbanes-Oxley Act of 2002 | |
32.2 | Certification of the Chief Financial Officer of PC Mall, Inc. pursuant to 18 U.S.C. 1350, as adopted by Section 906 of the Sarbanes-Oxley Act of 2002 |
* | Management contract, or compensatory plan or arrangement. |