Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 06, 2017 | |
Document And Entity Information | ||
Entity Registrant Name | PCM, INC. | |
Entity Central Index Key | 937,941 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 11,780,474 | |
Trading Symbol | PCMI | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,017 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 8,346 | $ 7,172 |
Accounts receivable, net of allowances of $974 and $832 | 412,733 | 358,949 |
Inventories | 74,871 | 80,872 |
Prepaid expenses and other current assets | 10,061 | 16,250 |
Asset held for sale | 5,812 | |
Total current assets | 506,011 | 469,055 |
Property and equipment, net | 70,448 | 56,352 |
Goodwill | 84,544 | 83,388 |
Intangible assets, net | 12,144 | 15,074 |
Deferred income taxes | 641 | 947 |
Investment and other assets | 4,749 | 4,994 |
Total assets | 678,537 | 629,810 |
Current liabilities: | ||
Accounts payable | 271,841 | 276,524 |
Accrued expenses and other current liabilities | 57,911 | 63,403 |
Deferred revenue | 4,522 | 10,960 |
Line of credit | 168,344 | 107,396 |
Notes payable - current | 3,432 | 11,168 |
Note payable related to asset held for sale | 4,601 | |
Total current liabilities | 506,050 | 474,052 |
Notes payable | 33,836 | 18,750 |
Other long-term liabilities | 4,843 | 7,039 |
Deferred income taxes | 3,819 | 1,498 |
Total liabilities | 548,548 | 501,339 |
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; 17,142,330 and 16,465,567 shares issued; 11,774,678 and 11,967,202 shares outstanding | 17 | 16 |
Additional paid-in capital | 133,990 | 127,777 |
Treasury stock, at cost: 5,367,652 and 4,498,365 shares | (38,288) | (26,934) |
Accumulated other comprehensive income (loss) | 427 | (639) |
Retained earnings | 33,843 | 28,251 |
Total stockholders' equity | 129,989 | 128,471 |
Total liabilities and stockholders' equity | $ 678,537 | $ 629,810 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowances | $ 974 | $ 832 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 30,000,000 | 30,000,000 |
Common stock, shares issued | 17,142,330 | 16,465,567 |
Common stock, shares outstanding | 11,774,678 | 11,967,202 |
Treasury stock, shares | 5,367,652 | 4,498,365 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Statement [Abstract] | ||||
Net sales | $ 545,479 | $ 584,937 | $ 1,629,988 | $ 1,663,960 |
Cost of goods sold | 464,185 | 502,282 | 1,385,118 | 1,427,999 |
Gross profit | 81,294 | 82,655 | 244,870 | 235,961 |
Selling, general and administrative expenses | 79,909 | 71,955 | 233,388 | 210,377 |
Operating profit | 1,385 | 10,700 | 11,482 | 25,584 |
Interest expense, net | 1,950 | 1,598 | 5,589 | 4,533 |
Equity income from unconsolidated affiliate | 151 | 424 | ||
Income (loss) before income taxes | (414) | 9,102 | 6,317 | 21,051 |
Income tax expense | 427 | 3,781 | 631 | 8,168 |
Net income (loss) | $ (841) | $ 5,321 | $ 5,686 | $ 12,883 |
Basic and Diluted Earnings (Loss) Per Common Share | ||||
Basic | $ (0.07) | $ 0.45 | $ 0.46 | $ 1.09 |
Diluted | $ (0.07) | $ 0.43 | $ 0.43 | $ 1.04 |
Weighted average number of common shares outstanding: | ||||
Basic | 12,248 | 11,722 | 12,418 | 11,807 |
Diluted | 12,248 | 12,503 | 13,325 | 12,398 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ (841) | $ 5,321 | $ 5,686 | $ 12,883 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments | 750 | (221) | 1,066 | 443 |
Total other comprehensive income (loss) | 750 | (221) | 1,066 | 443 |
Comprehensive income (loss) | $ (91) | $ 5,100 | $ 6,752 | $ 13,326 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash Flows From Operating Activities | ||
Net income | $ 5,686 | $ 12,883 |
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | ||
Depreciation and amortization | 10,482 | 11,922 |
Equity income from an unconsolidated affiliate | (424) | |
Provision for deferred income taxes | 212 | 1,034 |
Non-cash stock-based compensation | 1,918 | 1,457 |
Change in operating assets and liabilities: | ||
Accounts receivable | (50,716) | (36,824) |
Inventories | 6,001 | (23,699) |
Prepaid expenses and other current assets | 6,346 | (5,807) |
Other assets | 1,181 | 1,225 |
Accounts payable | (7,237) | 90,517 |
Accrued expenses and other current liabilities | 3,548 | 16,215 |
Deferred revenue | (6,438) | 4,588 |
Total adjustments | (35,127) | 60,628 |
Net cash (used in) provided by operating activities | (29,441) | 73,511 |
Cash Flows From Investing Activities | ||
Purchases of property and equipment | (14,122) | (5,057) |
Acquisition of Stack Technology, net of cash acquired | (1,723) | |
Acquisition of assets of Systemax | (400) | |
Acquisition of Acrodex, net of cash acquired | (93) | |
Net cash used in investing activities | (15,845) | (5,550) |
Cash Flows From Financing Activities | ||
Net borrowings (payments) under line of credit | 60,948 | (40,750) |
Borrowings under notes payable | 5,212 | 525 |
Payments under notes payable | (2,777) | (3,739) |
Change in book overdraft | 1,885 | (11,180) |
Payments of obligations under capital leases | (1,113) | (1,832) |
Payments of earn-out liability | (11,058) | (9,820) |
Proceeds from capital lease obligations | 587 | |
Net proceeds from stock issued under stock option plans | 5,007 | 1,662 |
Payments for deferred financing costs | (669) | (655) |
Common shares repurchased and held in treasury | (11,354) | (3,608) |
Payment of taxes related to net-settled stock awards | (808) | |
Net cash provided by (used in) financing activities | 45,860 | (69,397) |
Effect of foreign currency on cash flow | 600 | 200 |
Net change in cash and cash equivalents | 1,174 | (1,236) |
Cash and cash equivalents at beginning of the period | 7,172 | 11,176 |
Cash and cash equivalents at end of the period | 8,346 | 9,940 |
Supplemental Cash Flow Information | ||
Interest paid | 4,970 | 3,925 |
Income taxes paid, net | 3,826 | 3,497 |
Supplemental Non-Cash Investing and Financing Activities | ||
Financed and accrued purchases of property and equipment | $ 520 | $ 795 |
Basis of Presentation and Descr
Basis of Presentation and Description of Company | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
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 solutions, including hardware products, software and services, 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, Hewlett Packard Enterprise, HP Inc., 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 and educational institutions. 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, 2016 filed with the SEC. In connection with our entrance into the United Kingdom (“UK”) market in the first quarter of 2017, we formed a new operating segment called United Kingdom. As a result, we currently operate in four reportable segments: Commercial, Public Sector, Canada and United Kingdom. Our reportable operating segments are primarily aligned based upon our reporting of results as used by our chief operating decision maker in evaluating the operating results and performance of our company. 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. We sell primarily to customers in the United States and Canada, and maintain offices in the United States and Canada, as well as in the Philippines and the United Kingdom. In September 2017, PCM Technology Solutions UK, Ltd., our U.K. based subsidiary (“PCM UK”), completed the acquisition of Stack Technology Holdings, Ltd. (“Stack Technology”). Stack Technology, headquartered in Liverpool, U.K., specializes in the selection, implementation and management of leading IT solutions, with offerings encompassing all aspects of cloud-based solutions, security, virtualization, data services, unified communications, and infrastructure. During the three months ended September 30, 2017, we generated approximately 78% of our revenue in our Commercial segment, 15% of our revenue in our Public Sector segment and 7% of our revenue in our Canada segment. During the nine months ended September 30, 2017, we generated approximately 78% of our revenue in our Commercial segment, 14% of our revenue in our Public Sector segment and 8% of our revenue in our Canada segment. PCM UK commenced its sales operations in May 2017 and our United Kingdom segment net sales were $2.7 million and $3.1 million in the three and nine months ended September 30, 2017, respectively. Our Commercial segment sells complex technology 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 online extranets. 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 Canada segment consists of sales made to customers in the Canadian market beginning as of the respective dates of our acquisition of Acrodex and certain assets of Systemax in October and December 2015, respectively, as well as the acquisition of Stratiform in December 2016. Our United Kingdom segment consists of results of our UK subsidiary, PCM UK, which serves as our hub for the UK and the rest of Europe. Beginning in the first quarter of 2017, our financial results do not consolidate the financial results of sales made under some customer contracts we purchased in the En Pointe acquisition, which are now held by a partner which qualifies for certification as a minority and women owned business in accordance with customer supplier diversity policies. We hold a 49% passive equity interest in this partner and we have accounted for our investment in this partner using the equity method of accounting beginning in the first quarter of 2017. We refer to this entity as the non-controlled entity or NCE. We record our results from our 49% equity interest in the NCE’s operations as “Equity income from unconsolidated affiliate” in our consolidated statement of operations. |
New Accounting Standards
New Accounting Standards | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
New Accounting Standards | 2. New Accounting Standards In March 2016, the FASB issued ASU No. 2016-09, “Compensation – Stock Compensation (Topic 718) - Improvements to Employee Share-Based Accounting,” which simplifies several aspects of accounting for employee share-based payment transactions, including the accounting for income taxes, the calculation of diluted earnings per share, forfeitures, and statutory state tax withholding requirements, as wells as classification in statement of cash flows. We adopted ASU 2016-09 effective January 1, 2017 using the prospective method to recognize excess tax benefits and deficits in our consolidated statements of operations, and using the retrospective method relating to classification of excess tax benefits on our consolidated statements of cash flows. Also, we made an accounting policy election, on a modified prospective basis, to recognize forfeitures as they occur and cease estimating expected forfeitures. As a result of adopting ASU 2016-09, in the three and nine months ended September 30, 2017, we recorded a credit to income tax expense of approximately $37,000 and $2.7 million, respectively, related to the excess tax benefits associated with the exercise of stock options and vesting of restricted stock units on our consolidated statement of operations, and we reclassified $0.4 million from cash flows from financing activities to cash flows from operating activities for the nine months ended September 30, 2016 to conform to our current period presentation. Also, we recorded a $94,000 cumulative effect adjustment to retained earnings as of January 1, 2017 as a result of our accounting policy election relating to forfeitures. We anticipate ongoing income tax expense volatility as a result of the adoption of this standard. In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)” which requires lessees to recognize right-of-use assets and lease liability, initially measured at present value of the lease payments, on its balance sheet for leases with terms longer than 12 months and classified as either financing or operating leases. ASU 2016-02 requires a modified retrospective transition approach for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, and provides certain practical expedients that companies may elect. ASU 2016-02 is effective for public companies for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. We are currently evaluating the effects that the adoption of ASU 2016-02 will have on our consolidated financial statements. In November 2015, the FASB issued ASU No. 2015-17, “Balance Sheet Classification of Deferred Taxes,” which requires all deferred tax assets and liabilities, and any related valuation allowance, to be classified as non-current on the balance sheet. The classification change for all deferred taxes as non-current simplifies entities’ processes as it eliminates the need to separately identify the net current and net non-current deferred tax asset or liability in each jurisdiction and allocate valuation allowances. We adopted ASU 2015-17 effective January 1, 2017 on a retrospective basis. As a result of the adoption, we reclassified current deferred tax assets of $3.6 million and current deferred tax liabilities of $0.6 million included in our balance sheet as of December 31, 2016 to noncurrent. There was no impact on our results of operations or our cash flows as a result of the adoption of ASU 2015-17. In July 2015, the FASB issued ASU 2015-11, “Inventory (Topic 330) - Simplifying the Measurement of Inventory,” which requires that inventory within the scope of the guidance be measured at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. ASU 2015-11 applies to inventory that is measured using first-in, first-out (FIFO) or average cost. We adopted ASU 2015-11 effective January 1, 2017 and it did not have a material effect on our consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which, along with amendments issued in 2015 and 2016, will replace most existing revenue recognition guidance under GAAP and eliminate industry specific guidance. The core principle of the new guidance is that an entity should recognize revenue for the transfer of goods and services equal to an amount it expects to be entitled to receive for those goods and services. The ASU, as amended, will be effective beginning in the first quarter of 2018. The new guidance permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively by recognizing the cumulative effect of initially applying the guidance to all contracts existing at the date of initial application (the modified retrospective method). We have engaged resources and created a cross-functional implementation team to analyze the effect of the new guidance, and have communicated progress to date to management and the audit committee. We are currently assessing all potential impacts of the standard on our contract portfolio by reviewing the current accounting policies and practices utilized to identify potential differences that would result from applying the requirements of the new standard to our various contracts. Given the breadth of the types of arrangements we have with customers, a substantial amount of work continues to remain in order to reach conclusions on the effects on our various revenue streams. We will adopt the guidance on January 1, 2018. We currently prefer to adopt the standard using the full retrospective method; however, our ability to do so is dependent on many factors, including the completion of our analysis of information necessary to recast prior period financial statements. Based on these and other factors, we may decide to use the cumulative catch-up transition method. |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2017 | |
Business Combinations [Abstract] | |
Acquisitions | 3. Acquisitions Stack Technology On September 22, 2017, PCM UK, our U.K. based subsidiary, completed the acquisition of Stack Technology for £1,350,000 in cash (or $1.7 million, net of cash acquired). Stack Technology, headquartered in Liverpool, United Kingdom, specializes in the selection, implementation and management of leading IT solutions, with offerings encompassing all aspects of cloud-based solutions, security, virtualization, data services, unified communications, and infrastructure. Stratiform On December 29, 2016, we completed the acquisition of Stratiform, Inc. for C$2.1 million in cash (or $1.6 million). Stratiform is an industry-leading provider of cloud IT solutions that include consulting, professional and managed services to clients across Canada. As part of the Stratiform acquisition, we agreed to pay certain contingent earn-out consideration related to years ending December 31, 2017, 2018 and 2019 (each year the “measurement period”), and payable 90 days in arrears following each measurement period. We have accrued approximately $0.7 million of contingent earn-out consideration, of which we have included $0.35 million in each of “Accrued expenses and other current liabilities” and “Other long-term liabilities” on our Condensed Consolidated Balance Sheet as of September 30, 2017. Systemax On December 1, 2015, we completed the acquisition of certain Business to Business (B2B) assets of Systemax’s North American Technology Group (NATG) for $14 million in cash. In January 2016, we exercised an option in our purchase agreement and paid $0.4 million related to our purchase of additional customer list information, which was recorded as an increase to goodwill associated with the Systemax assets acquisition. Acrodex On October 26, 2015, PCM Sales Canada, Inc., a wholly-owned subsidiary of PCM, Inc., completed the acquisition of all the outstanding common stock of Acrodex, Inc. (“Acrodex”) for a total purchase price of approximately C$16.7 million (or $13.6 million, net of cash acquired). In March 2016 and June 2016, we paid an additional $0.2 million and $0.1 million, respectively, related to adjustments to the net asset value as defined in the agreement, which was recorded as an increase to goodwill resulting from the Acrodex acquisition. En Pointe On April 1, 2015, we completed the acquisition of certain assets of En Pointe, one of the nation’s largest independent IT solutions providers, headquartered in Southern California. En Pointe is our largest acquisition to date based on revenues, and is expected to significantly enhance our relationships with several key vendor partners, provide incremental advanced technical certifications and operational expertise in key practice areas, and bring the consolidated business significantly increased scale. We acquired the assets of En Pointe’s IT solutions provider business, excluding cash and other current tangible assets such as accounts receivable. The assets were acquired by an indirect wholly-owned subsidiary of PCM, which subsidiary now operates under the En Pointe brand. Under the terms of the agreement, we paid an initial purchase price of $15 million in cash and an additional $2.3 million for inventory. We agreed to pay certain contingent earn-out consideration on a monthly basis, including 22.5% of the future adjusted gross profit of the business and 10% of certain service revenues over the three years following the closing of the acquisition. As of September 30, 2017, we have estimated that the fair value of contingent consideration to be paid throughout the earn-out period ending March 31, 2018 to be approximately $38.6 million. Our original estimate of the fair value of contingent consideration to be paid during the earn-out period, based on expected future results of the acquired business, was $32.5 million at the time of the acquisition. In the fourth quarter of 2015, as a result of an increase in expected future results of the acquired business, we increased the fair value of contingent consideration to $38.6 million. There has been no change to the fair value of expected contingent consideration since December 31, 2015. During the nine months ended September 30, 2017 and 2016, we made $11.1 million and $9.8 million, respectively, of earn-out payments to the sellers of En Pointe. As of September 30, 2017, we have made 29 monthly earn-out payments, in aggregate totaling $33.1 million, to the sellers of En Pointe. As of September 30, 2017, we had $5.6 million of accrued earn-out liability included in “Accrued expenses and other current liabilities” on our Condensed Consolidated Balance Sheet for the final monthly payments to be made throughout the earn-out period ending March 31, 2018. The fair value of this contingent consideration is determined and accrued based on a probability weighted average of possible outcomes that would occur should certain financial metrics be reached. Because there is no market data available to use in valuing the contingent consideration, we developed our own assumptions related to the future financial performance of the businesses to determine the fair value of this liability. As such, the valuation of the contingent consideration is determined using Level 3 inputs. The significant inputs into the calculation of the contingent consideration include projected gross profit values of the Commercial and Public Sector components of En Pointe and the weighted average cost of capital of each component. |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 4. Property and Equipment In January 2017, we completed the purchase of real property in Woodridge, Illinois for approximately $3.1 million in cash. The real property includes approximately 29,344 square feet of office space. In September 2015, we listed our real property located in Irvine, California (the “Irvine Property”) for sale. Under a broker agreement, the Irvine Property is available for immediate sale in its present condition. We classified $5.8 million related to the Irvine Property, stated at lower of cost or fair value, as “Property held for sale” and $4.6 million related to the mortgage on the Irvine Property as “Note payable related to asset held for sale” on our Condensed Consolidated Balance Sheet as of December 31, 2016. As of September 30, 2017, the Irvine Property, which continues to be available for sale, has been classified as part of “Property and equipment, net” and the related mortgage as part of “Notes payable-current” and “Notes payable” on our Condensed Consolidated Balance Sheet as it no longer meets the criteria for held for sale classification primarily due to passage of time. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | 5. Goodwill and Intangible Assets Goodwill The change in the carrying amounts of indefinite-lived goodwill was as follows (in thousands) by segment: Commercial Public Sector Canada United Kingdom Total Balance at December 31, 2016 $ 69,735 $ 8,322 $ 5,331 $ — $ 83,388 Acquisition of Stack Technology — — — 751 751 Foreign currency translation — — 411 (6 ) 405 Balance at September 30, 2017 $ 69,735 $ 8,322 $ 5,742 $ 745 $ 84,544 Intangible Assets The following table sets forth the amounts recorded for intangible assets (in thousands): Weighted Average Estimated At September 30, 2017 At December 31, 2016 Useful Lives (years) Gross Amount Accumulated Amortization Net Amount Gross Amount Accumulated Amortization Net Amount Patent, trademarks, trade names & URLs 4 $ 7,744 (1) $ 2,870 $ 4,874 $ 7,691 (1) $ 1,901 $ 5,790 Customer relationships 15 13,555 7,240 6,315 13,369 5,480 7,889 Non-compete agreements 4 2,379 1,424 955 2,361 966 1,395 Total intangible assets $ 23,678 $ 11,534 $ 12,144 $ 23,421 $ 8,347 $ 15,074 (1) Includes $2.9 million of trademarks with indefinite useful lives that are not amortized. Amortization expense for intangible assets was approximately $1.0 million and $1.4 million for the three months ended September 30, 2017 and 2016, and $3.1 million and $4.4 million for the nine months ended September 30, 2017 and 2016. Estimated amortization expense for intangible assets as of September 30, 2017 in each of the next five years and thereafter is as follows: $1.0 million in the remainder of 2017, $3.0 million in 2018, $1.9 million in 2019, $1.3 million in 2020, $0.5 million in 2021 and $1.5 million thereafter. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Debt | 6. Debt The following table sets forth our outstanding debt as of the periods presented (in thousands): September 30, December 31, 2017 2016 Revolving credit facility, LIBOR plus 1.50%, maturing in March 2021 $ 168,344 $ 107,396 Note payable, LIBOR plus 1.50%, maturing in March 2021 — 8,293 Note payable, LIBOR plus 1.50%, maturing in March 2021 11,480 1,392 Note payable, LIBOR plus 1.50%, maturing in March 2021 2,021 — Note payable, greater of 2% or LIBOR plus 2.15%, maturing in April 2022 4,454 4,601 (1) Note payable, LIBOR plus 2.25%, maturing in January 2022 3,965 4,137 Notes payable, 4.12%, 4.33% and 4.60%, matured in March 2017 — 525 Note payable, LIBOR plus 2.25%, maturing in January 2020 6,875 7,107 Note payable, Prime plus 0.375% or LIBOR plus 2.375%, maturing in January 2020 7,811 8,113 Note payable, LIBOR plus 3.2%, maturing in May 2025 291 — Other notes payable, maturing in August and September 2018 371 351 Total 205,612 141,915 Less: Total current debt 171,776 123,165 Total non-current debt $ 33,836 $ 18,750 (1) This note payable, related to the Irvine Property, has been presented on our Condensed Consolidated Balance Sheet at December 31, 2016 as “Note payable related to asset held for sale” and was included as current debt. See Note 4 above for more information regarding the Irvine Property. The following table sets forth the maturities of our outstanding debt balance as of September 30, 2017 (in thousands): Remainder of 2017 2018 2019 2020 2021 Thereafter Total Total long-term debt obligations $ 1,177 $ 3,291 $ 3,277 $ 15,653 $ 7,127 $ 6,743 $ 37,268 Revolving credit facility 168,344 — — — — — 168,344 Total $ 169,521 $ 3,291 $ 3,277 $ 15,653 $ 7,127 $ 6,743 $ 205,612 Line of Credit and Related Notes We maintain a 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. On January 19, 2016, we entered into a Fourth Amended and Restated Loan and Security Agreement (the “Fourth Amended Loan Agreement”) with certain lenders and Wells Fargo Capital Finance, LLC as administrative and collateral agent (the “Lenders”). On July 7, 2016, we entered into a First Amendment to the Fourth Amended Loan Agreement (the “First Amendment”) with the Lenders and on February 24, 2017, we entered into a Second Amendment to the Fourth Amended Loan Agreement (the “Second Amendment”) with the Lenders. As amended through September 30, 2017, the terms of our credit facility provide for (i) a Maximum Credit, as defined in the credit facility, of $345,000,000; (ii) a sub-line of up to C$40,000,000 as the Canadian Maximum Credit ((i) and (ii) collectively the “Revolving Line”); (iii) a Maturity Date of March 19, 2021; (iv) interest on outstanding balance under the Canadian Maximum Credit based on the Canadian Base Rate (calculated as the greater of CDOR plus one percentage point and the “prime rate” for Canadian Dollar commercial loans, as further defined in the Fourth Amended Loan Agreement) or at the election of the Borrowers, based on the CDOR Rate, plus a margin, depending on average excess availability under the Revolving Line, ranging from 1.50% to 1.75%; and (v) interest on outstanding balance under the Maximum Credit based on the Eurodollar Rate plus a margin, depending on average excess r The credit facility is collateralized by substantially all of our assets. In addition to the security interest required by the credit facility, certain of our vendors have security interests in some of our assets related to their products. The credit facility has as its single financial covenant a minimum fixed charge coverage ratio (FCCR) requirement in the event an FCCR triggering event has occurred. An FCCR triggering event is comprised of maintaining certain specified daily and average excess availability thresholds. In the event the FCCR covenant applies, the fixed charge coverage ratio is 1.0 to 1.0 calculated on a trailing four-quarter basis as of the end of the last quarter immediately preceding such FCCR triggering event date. At September 30, 2017, we were in compliance with our financial covenant under the credit facility. Loan availability under the line of credit fluctuates daily and is affected by many factors, including eligible assets on-hand, opportunistic purchases of inventory and availability and our utilization of early-pay discounts. At September 30, 2017, we had $105.9 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 sub-line with a limit of $12.5 million secured by our properties located in Santa Monica, California, with a monthly principal amortization of $149,083 and a sub-line with a limit of $2.2 million secured by our property in Woodbridge, Illinois, with a monthly principal amortization of $26,250. Also on July 7, 2016, we entered into a Credit Agreement with Castle Pines Capital LLC (“Castle Pines”), which provides for a credit facility (“Channel Finance Facility”) to finance the purchase of inventory from a list of approved vendors. The aggregate availability under the Channel Finance Facility is variable and discretionary, but has initially been set at $35 million. Each advance under the Channel Finance Facility will be made directly to an approved vendor and must be repaid on the earlier of (i) the payment due date as set by Castle Pines or (ii) the date (if any) when the inventory is lost, stolen or damaged. No interest accrues on advances paid on or prior to payment due date. The Channel Finance Facility is secured by a lien on certain of our assets, subject to an intercreditor arrangement with the Lenders. The Channel Finance Facility has an initial term of one year, but shall be automatically renewed for one year periods from year to year thereafter unless terminated earlier by either party within reasonable notice periods. 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 began 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 September 2015, we listed the Irvine Property for sale. 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 which matured 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 with a bank for draws 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 a total of $10.1 million of the acquisition and improvement costs for the real property we purchased in March 2011 in El Segundo, California. The credit agreement, as amended, 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. In September 2017, we entered into an amendment with the lender extending the maturity of the loan to January 31, 2020. The loan is secured by the real property and contains financial covenants substantially similar to those of our existing asset-based credit facility. At September 30, 2017, the effective weighted average annual interest rate on our outstanding amounts under the credit facility, term note and variable interest rate notes payable was 2.84%. The carrying amounts of our line of credit borrowings and notes payable approximate their fair value based upon the current rates offered to us for obligations of similar terms and remaining maturities. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 7. Income Taxes We determine our interim income tax provision by applying our effective income tax rate expected to be applicable for the full fiscal year to pre-tax income (loss) for the interim periods, adjusting the result for any discrete items which occurred during the interim period. Accounting for Uncertainty in Income Taxes At September 30, 2017 and December 31, 2016, we had unrecognized tax benefits of $0.5 million related to research credits. For the three and nine months ended September 30, 2017 and 2016, we did not recognize any interest or penalties for uncertain tax positions, nor were there any interest or penalties accrued at September 30, 2017 and December 31, 2016. We do not anticipate any significant increases or decreases in our unrecognized tax benefits within the next twelve months. We are subject to U.S. and foreign income tax examinations for years subsequent to 2013, and state income tax examinations for years subsequent to 2011. However, to the extent allowable by law, the tax authorities may have a right to examine prior periods when net operating losses or tax credits were generated and carried forward for subsequent utilization, and make adjustments up to the amount of the net operating losses or credit carryforwards. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Stockholders' Equity | 8. 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. Our Board of Directors originally adopted the plan in October 2008 with an initial authorized maximum of $10 million. The plan was amended in September 2012 and increased to $20 million, again amended in April 2015 and increased to a total of $30 million and again amended in August 2017 and increased to a total of $40 million. Under the program, the shares may be repurchased from time to time at prevailing market prices, through open market or unsolicited negotiated transactions, depending on market conditions. We expect that the repurchase of our common stock under the program will be financed with existing working capital and amounts available under our existing credit facility. The repurchased shares are held as treasury stock. No limit was placed on the duration of the repurchase program. There is no guarantee as to the exact number of shares that we will repurchase. Subject to applicable securities laws, repurchases may be made at such times and in such amounts as our management deems appropriate. The program can also be discontinued at any time management feels additional purchases are not warranted. We repurchased 869,287 shares of our common stock under this program during the three months ended September 30, 2017 for $11.4 million. From the inception of the program in October 2008 through September 30, 2017, we have repurchased an aggregate of 4,950,974 shares of our common stock for a total cost of $37.3 million. At September 30, 2017, we had $2.7 million available in stock repurchases under the program, subject to any limitations that may apply from time to time under our existing credit facility. We have never paid cash dividends on our capital stock and our credit facility prohibits us from paying any cash dividends on our capital stock. Therefore, we do not currently anticipate paying dividends; we intend to retain any earnings to finance the growth and development of our business. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2017 | |
Basic and Diluted Earnings (Loss) Per Common Share | |
Earnings Per Share | 9. Earnings Per Share Basic earnings (loss) per share (“EPS”) is computed by dividing net income (loss) 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 September 30, 2017, since we reported a net loss, all potential shares totaling approximately 634,000 were excluded from the computation of diluted EPS as their inclusion would have been antidilutive. For the three months ended September 30, 2017, had we reported net income, approximately 229,000 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 September 30, 2016, approximately 2,000 common shares have been excluded from the calculation of diluted EPS because the effect of their inclusion would have been antidilutive. For the nine months ended September 30, 2017 and 2016, approximately 142,000 and 516,000 common shares, respectively, have been excluded from the calculation of diluted EPS because the effect of their inclusion would have been antidilutive. The reconciliation of the amounts used in the basic and diluted EPS computation was as follows (in thousands, except per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Numerator: Net income (loss) $ (841 ) $ 5,321 $ 5,686 $ 12,883 Denominator: Basic EPS - Weighted average number of common shares outstanding 12,248 11,722 12,418 11,807 Dilutive effect of stock awards — 781 907 591 Diluted EPS - Weighted average number of common shares outstanding 12,248 12,503 13,325 12,398 Net earnings (loss) per share: Basic $ (0.07 ) $ 0.45 $ 0.46 $ 1.09 Diluted (0.07 ) 0.43 0.43 1.04 |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Segment Information | 10. Segment Information Summarized segment information for our operations for the periods presented is as follows (in thousands): Commercial Public Sector Canada United Kingdom Corporate & Other Consolidated Three Months Ended September 30, 2017 Net sales $ 424,010 $ 80,702 $ 38,167 $ 2,737 $ (137 ) $ 545,479 Gross profit 64,780 9,647 6,554 448 (135 ) 81,294 Depreciation and amortization expense(1) 1,423 208 278 21 1,639 3,569 Operating profit (loss) 19,051 2,901 (830 ) (1,467 ) (18,270 ) 1,385 Three Months Ended September 30, 2016 Net sales $ 459,558 $ 89,688 $ 35,724 $ — $ (33 ) $ 584,937 Gross profit 66,362 10,271 6,055 — (33 ) 82,655 Depreciation and amortization expense(1) 1,630 287 326 — 1,632 3,875 Operating profit (loss) 20,779 4,779 780 — (15,638 ) 10,700 Nine Months Ended September 30, 2017 Net sales $ 1,272,021 $ 224,759 $ 130,451 $ 3,099 $ (342 ) $ 1,629,988 Gross profit 195,822 27,606 21,281 501 (340 ) 244,870 Depreciation and amortization expense(1) 4,247 622 783 21 4,809 10,482 Operating profit (loss) 57,011 9,127 685 (3,204 ) (52,137 ) 11,482 Nine Months Ended September 30, 2016 Net sales $ 1,288,985 $ 261,131 $ 113,890 $ — $ (46 ) $ 1,663,960 Gross profit 192,209 25,947 17,852 — (47 ) 235,961 Depreciation and amortization expense(1) 4,873 863 994 — 5,192 11,922 Operating profit (loss) 59,494 10,501 3,283 — (47,694 ) 25,584 (1) Primary fixed assets relating to network and servers are managed by the Corporate headquarters. As such, depreciation expense relating to such assets is included as part of Corporate & Other. As of September 30, 2017 and December 31, 2016, we had total consolidated assets of $678.5 million and $629.8 million, respectively. Our management does not have available to them and does not use total assets measured at the segment level in allocating resources. Therefore, such information relating to segment assets is not provided herein. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 11. Commitments and Contingencies Total rent expense under our operating leases, net of sublease income, was $1.8 million and $1.4 million in the three month periods ended September 30, 2017 and 2016, respectively and $4.7 million and $4.4 million in the nine month periods ended September 30, 2017 and 2016, respectively. Some of our leases contain renewal options and escalation clauses, and require us to pay taxes, insurance and maintenance costs. Legal Proceedings 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 result in a material amount of legal or related expenses and be 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. As described above in Note 3, we acquired certain assets of En Pointe Technologies in 2015. The assets were acquired by an indirect wholly-owned subsidiary of PCM, which subsidiary now operates under the En Pointe brand (“En Pointe”). We are currently involved in several disputes related to the En Pointe acquisition as described below. Any litigation, arbitration or other dispute resolution process could be costly and time consuming and could divert our management and key personnel from our business operations. In connection with any such matters, we may be subject to significant damages or equitable remedies relating to the operation of our business and could incur significant costs in asserting, defending, or settling any such matters. While we intend to pursue and/or defend these actions vigorously, we cannot determine with any certainty the costs or outcome of such pending or future matters, and they may materially harm our business, results of operations or financial condition. Delaware Litigation with Collab9 On April 11, 2017, the Company amended its answer to include counterclaims against the sellers in the Collab 9 transaction, including Collab9. These counterclaims assert claims for breach of contract, tortious interference, and intentional misrepresentation. The counterclaims include allegations that the sellers intentionally breached their representations and warranties concerning the financial statements of the business whose assets the Company acquired under the APA, and the need for minority business certifications which were required for certain acquired contracts under the APA. The counterclaims also include allegations that the sellers failed to disclose related party interests or retained control over Ovex Technologies (Private) Limited (“Ovex”), a third party operation in Pakistan that provided support functions for the acquired business. At this time, the outcome of this matter is uncertain. California Litigation with Collab9 California Litigation Against Yunus, Ovex, Din and Zones Pakistan Litigation Ovex Arbitration Federal Anti-Suit Injunction Action Securities Class Action. Miller v. PCM Inc. |
Subsequent Event
Subsequent Event | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Event | 12. Subsequent Event On October 24, 2017, PCM, all of its wholly-owned domestic subsidiaries (collectively with PCM, the “US Borrowers”), all of its Canadian subsidiaries (collectively, the “Canadian Borrowers”) and its PCM UK subsidiary (together with the US Borrowers and the Canadian Borrowers, the “Borrowers”), entered into a Fifth Amended and Restated Loan and Security Agreement (the “Fifth Amended Loan Agreement”) with certain lenders named therein (the “Lenders”) and Wells Fargo Capital Finance, LLC as administrative and collateral agent for the Lenders (the “Agent”). The Fifth Amended Loan Agreement amends and restates the Fourth Amended and Restated Loan and Security Agreement, dated as of January 19, 2016 (the “Prior Loan Agreement”). The Fifth Amended Loan Agreement provides for, among other things with no other material changes from the Prior Loan Agreement: (i) the addition of a sub-line of up to £25,000,000 available for our PCM UK subsidiary, (ii) interest on outstanding UK balances based on LIBOR plus a margin , depending on average excess availability under the Revolving Line, ranging from 1.50% to 1.75% The Borrowers paid certain fees and costs, including but not limited to, a $69,000 closing fee distributed among the US lenders and a £50,000 closing fee distributed among the UK lenders. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Carrying Amounts of Indefinite-Lived Goodwill | The change in the carrying amounts of indefinite-lived goodwill was as follows (in thousands) by segment: Commercial Public Sector Canada United Kingdom Total Balance at December 31, 2016 $ 69,735 $ 8,322 $ 5,331 $ — $ 83,388 Acquisition of Stack Technology — — — 751 751 Foreign currency translation — — 411 (6 ) 405 Balance at September 30, 2017 $ 69,735 $ 8,322 $ 5,742 $ 745 $ 84,544 |
Schedule of Amounts Recorded for Intangible Assets | The following table sets forth the amounts recorded for intangible assets (in thousands): Weighted Average Estimated At September 30, 2017 At December 31, 2016 Useful Lives (years) Gross Amount Accumulated Amortization Net Amount Gross Amount Accumulated Amortization Net Amount Patent, trademarks, trade names & URLs 4 $ 7,744 (1) $ 2,870 $ 4,874 $ 7,691 (1) $ 1,901 $ 5,790 Customer relationships 15 13,555 7,240 6,315 13,369 5,480 7,889 Non-compete agreements 4 2,379 1,424 955 2,361 966 1,395 Total intangible assets $ 23,678 $ 11,534 $ 12,144 $ 23,421 $ 8,347 $ 15,074 (1) Includes $2.9 million of trademarks with indefinite useful lives that are not amortized. |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Outstanding Debt | The following table sets forth our outstanding debt as of the periods presented (in thousands): September 30, December 31, 2017 2016 Revolving credit facility, LIBOR plus 1.50%, maturing in March 2021 $ 168,344 $ 107,396 Note payable, LIBOR plus 1.50%, maturing in March 2021 — 8,293 Note payable, LIBOR plus 1.50%, maturing in March 2021 11,480 1,392 Note payable, LIBOR plus 1.50%, maturing in March 2021 2,021 — Note payable, greater of 2% or LIBOR plus 2.15%, maturing in April 2022 4,454 4,601 (1) Note payable, LIBOR plus 2.25%, maturing in January 2022 3,965 4,137 Notes payable, 4.12%, 4.33% and 4.60%, matured in March 2017 — 525 Note payable, LIBOR plus 2.25%, maturing in January 2020 6,875 7,107 Note payable, Prime plus 0.375% or LIBOR plus 2.375%, maturing in January 2020 7,811 8,113 Note payable, LIBOR plus 3.2%, maturing in May 2025 291 — Other notes payable, maturing in August and September 2018 371 351 Total 205,612 141,915 Less: Total current debt 171,776 123,165 Total non-current debt $ 33,836 $ 18,750 (1) This note payable, related to the Irvine Property, has been presented on our Condensed Consolidated Balance Sheet at December 31, 2016 as “Note payable related to asset held for sale” and was included as current debt. See Note 4 above for more information regarding the Irvine Property. |
Schedule of Maturities of Outstanding Debt | The following table sets forth the maturities of our outstanding debt balance as of September 30, 2017 (in thousands): Remainder of 2017 2018 2019 2020 2021 Thereafter Total Total long-term debt obligations $ 1,177 $ 3,291 $ 3,277 $ 15,653 $ 7,127 $ 6,743 $ 37,268 Revolving credit facility 168,344 — — — — — 168,344 Total $ 169,521 $ 3,291 $ 3,277 $ 15,653 $ 7,127 $ 6,743 $ 205,612 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Basic and Diluted Earnings (Loss) Per Common Share | |
Schedule of Reconciliation of Amounts Used in 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): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Numerator: Net income (loss) $ (841 ) $ 5,321 $ 5,686 $ 12,883 Denominator: Basic EPS - Weighted average number of common shares outstanding 12,248 11,722 12,418 11,807 Dilutive effect of stock awards — 781 907 591 Diluted EPS - Weighted average number of common shares outstanding 12,248 12,503 13,325 12,398 Net earnings (loss) per share: Basic $ (0.07 ) $ 0.45 $ 0.46 $ 1.09 Diluted (0.07 ) 0.43 0.43 1.04 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Segment Information for Entity's Continuing Operations | Summarized segment information for our operations for the periods presented is as follows (in thousands): Commercial Public Sector Canada United Kingdom Corporate & Other Consolidated Three Months Ended September 30, 2017 Net sales $ 424,010 $ 80,702 $ 38,167 $ 2,737 $ (137 ) $ 545,479 Gross profit 64,780 9,647 6,554 448 (135 ) 81,294 Depreciation and amortization expense(1) 1,423 208 278 21 1,639 3,569 Operating profit (loss) 19,051 2,901 (830 ) (1,467 ) (18,270 ) 1,385 Three Months Ended September 30, 2016 Net sales $ 459,558 $ 89,688 $ 35,724 $ — $ (33 ) $ 584,937 Gross profit 66,362 10,271 6,055 — (33 ) 82,655 Depreciation and amortization expense(1) 1,630 287 326 — 1,632 3,875 Operating profit (loss) 20,779 4,779 780 — (15,638 ) 10,700 Nine Months Ended September 30, 2017 Net sales $ 1,272,021 $ 224,759 $ 130,451 $ 3,099 $ (342 ) $ 1,629,988 Gross profit 195,822 27,606 21,281 501 (340 ) 244,870 Depreciation and amortization expense(1) 4,247 622 783 21 4,809 10,482 Operating profit (loss) 57,011 9,127 685 (3,204 ) (52,137 ) 11,482 Nine Months Ended September 30, 2016 Net sales $ 1,288,985 $ 261,131 $ 113,890 $ — $ (46 ) $ 1,663,960 Gross profit 192,209 25,947 17,852 — (47 ) 235,961 Depreciation and amortization expense(1) 4,873 863 994 — 5,192 11,922 Operating profit (loss) 59,494 10,501 3,283 — (47,694 ) 25,584 (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 Des23
Basis of Presentation and Description of Company (Details Narrative) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)Segment | Sep. 30, 2016USD ($) | |
Segment Reporting Information [Line Items] | ||||
Number of reportable segments | Segment | 4 | |||
Net sales | $ 545,479 | $ 584,937 | $ 1,629,988 | $ 1,663,960 |
Percentage of equity interest | 49.00% | 49.00% | ||
Commercial Segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue percentage | 78.00% | 78.00% | ||
Public Sector Segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue percentage | 15.00% | 14.00% | ||
Canada Segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue percentage | 7.00% | 8.00% | ||
United Kingdom [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | $ 2,737 | $ 3,099 |
New Accounting Standards (Detai
New Accounting Standards (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Excess tax benefits associated with exercise of stock options and vesting of restricted stock units | $ 37 | $ 2,700 | ||
Excess tax benefits reclassified from financing activities to cash flows from operating activities | $ 400 | |||
Deferred tax assets noncurrent | $ 3,600 | |||
Deferred tax liabilities noncurrent | $ 600 | |||
January 1, 2017 [Member] | ||||
Cumulative effect adjustment to retained earnings | $ 94 |
Acquisitions (Details Narrative
Acquisitions (Details Narrative) £ in Thousands, CAD in Thousands, $ in Thousands | Sep. 22, 2017USD ($) | Sep. 22, 2017GBP (£) | Dec. 29, 2016USD ($) | Dec. 29, 2016CAD | Dec. 01, 2015USD ($) | Oct. 26, 2015USD ($) | Oct. 26, 2015CAD | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Jan. 31, 2016USD ($) | Sep. 30, 2017USD ($)integer | Sep. 30, 2016USD ($) | Dec. 31, 2015USD ($) | Apr. 01, 2015USD ($) |
Contingent consideration to be paid throughout the earn out period | $ 32,500 | |||||||||||||
Maximum [Member] | ||||||||||||||
Contingent consideration to be paid throughout the earn out period | $ 38,600 | |||||||||||||
Stack Technology [Member] | ||||||||||||||
Initial purchase price | $ 1,700 | |||||||||||||
Stack Technology [Member] | GBP [Member] | ||||||||||||||
Initial purchase price | £ | £ 1,350 | |||||||||||||
Stratiform, Inc [Member] | ||||||||||||||
Initial purchase price | $ 1,600 | |||||||||||||
Contingent consideration to be paid throughout the earn out period | $ 700 | |||||||||||||
Accrued earn-out liability included in accrued expenses and other current liabilities | 350 | |||||||||||||
Accrued earn-out liability included in other long-term liabilities | 350 | |||||||||||||
Stratiform, Inc [Member] | Canadian Dollar [Member] | ||||||||||||||
Initial purchase price | CAD | CAD 2,100 | |||||||||||||
Systemax's North American Technology Group [Member] | ||||||||||||||
Initial purchase price | $ 14,000 | |||||||||||||
Increase to goodwill associated with assets acquisition | $ 400 | |||||||||||||
Acrodex, Inc. [Member] | ||||||||||||||
Initial purchase price | $ 13,600 | |||||||||||||
Increase to goodwill associated with assets acquisition | $ 100 | $ 200 | ||||||||||||
Acrodex, Inc. [Member] | Canadian Dollar [Member] | ||||||||||||||
Initial purchase price | CAD | CAD 16,700 | |||||||||||||
En Pointe Technologies Sales Inc [Member] | ||||||||||||||
Aggregate earn-out payments | $ 33,100 | |||||||||||||
Number of monthly earn-out payments | integer | 29 | |||||||||||||
Payment of earn-out liability | $ 11,100 | $ 9,800 | ||||||||||||
En Pointe Technologies Sales Inc [Member] | April 1, 2015 [Member] | ||||||||||||||
Initial purchase price | $ 15,000 | |||||||||||||
Percentage of future adjusted gross profit | 22.50% | |||||||||||||
Percentage of future service revenue | 10.00% | |||||||||||||
En Pointe Technologies Sales Inc [Member] | March 31, 2018 [Member] | ||||||||||||||
Contingent consideration to be paid throughout the earn out period | $ 38,600 | |||||||||||||
Accrued earn-out liability included in accrued expenses and other current liabilities | 5,600 | |||||||||||||
En Pointe Technologies Sales Inc [Member] | Inventory [Member] | April 1, 2015 [Member] | ||||||||||||||
Additional consideration paid in acquisition for inventory | $ 2,300 |
Property and Equipment (Details
Property and Equipment (Details Narrative) $ in Thousands | 1 Months Ended | 9 Months Ended | ||
Jan. 31, 2017USD ($)ft² | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($) | |
Purchases of property and equipment | $ (14,122) | $ (5,057) | ||
Assets held for sale | $ 5,812 | |||
Liability related to asset held for sale | $ 4,601 | |||
Woodridge, Illinois [Member] | ||||
Purchases of property and equipment | $ 3,100 | |||
Real property | ft² | 29,344 |
Goodwill and Intangible Asset27
Goodwill and Intangible Assets (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expenses for intangible assets | $ 1,000 | $ 1,400 | $ 3,100 | $ 4,400 |
Estimated amortization expenses for intangible assets remainder of 2017 | 1,000 | 1,000 | ||
Estimated amortization expenses for intangible assets 2018 | 3,000 | 3,000 | ||
Estimated amortization expenses for intangible assets 2019 | 1,900 | 1,900 | ||
Estimated amortization expenses for intangible assets 2020 | 1,300 | 1,300 | ||
Estimated amortization expenses for intangible assets 2021 | 500 | 500 | ||
Estimated amortization expenses for intangible assets thereafter | $ 1,500 | $ 1,500 |
Goodwill and Intangible Asset28
Goodwill and Intangible Assets - Schedule of Carrying Amounts of Indefinite-Lived Goodwill (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Balance beginning period | $ 83,388 |
Acquisition of Stack Technology | 751 |
Foreign currency translation | 405 |
Balance ending period | 84,544 |
Commercial [Member] | |
Balance beginning period | 69,735 |
Acquisition of Stack Technology | |
Foreign currency translation | |
Balance ending period | 69,735 |
Public Sector [Member] | |
Balance beginning period | 8,322 |
Acquisition of Stack Technology | |
Foreign currency translation | |
Balance ending period | 8,322 |
Canada [Member] | |
Balance beginning period | 5,331 |
Acquisition of Stack Technology | |
Foreign currency translation | 411 |
Balance ending period | 5,742 |
United Kingdom [Member] | |
Balance beginning period | |
Acquisition of Stack Technology | 751 |
Foreign currency translation | (6) |
Balance ending period | $ 745 |
Goodwill and Intangible Asset29
Goodwill and Intangible Assets - Schedule of Amounts Recorded for Intangible Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2017 | Dec. 31, 2016 | ||
Gross Amount | $ 23,678 | $ 23,421 | |
Accumulated Amortization | 11,534 | 8,347 | |
Net Amount | $ 12,144 | 15,074 | |
Patent, Trademarks, Tradenames & URLs [Member] | |||
Weighted Average Estimated Useful Lives (Years) | 4 years | ||
Gross Amount | [1] | $ 7,744 | 7,691 |
Accumulated Amortization | 2,870 | 1,901 | |
Net Amount | $ 4,874 | 5,790 | |
Customer Relationships [Member] | |||
Weighted Average Estimated Useful Lives (Years) | 15 years | ||
Gross Amount | $ 13,555 | 13,369 | |
Accumulated Amortization | 7,240 | 5,480 | |
Net Amount | $ 6,315 | 7,889 | |
Non-Compete Agreements [Member] | |||
Weighted Average Estimated Useful Lives (Years) | 4 years | ||
Gross Amount | $ 2,379 | 2,361 | |
Accumulated Amortization | 1,424 | 966 | |
Net Amount | $ 955 | $ 1,395 | |
[1] | Includes $2.9 million of trademarks with indefinite useful lives that are not amortized. |
Goodwill and Intangible Asset30
Goodwill and Intangible Assets - Schedule of Amounts Recorded for Intangible Assets (Details) (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Trademarks [Member] | ||
Patents, trademarks and URLs of gross amount | $ 2,900 | $ 2,900 |
Debt (Details Narrative)
Debt (Details Narrative) | 1 Months Ended | 7 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||
Sep. 30, 2017USD ($) | Mar. 31, 2015USD ($) | Jan. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Jul. 31, 2013USD ($) | Jun. 30, 2011USD ($) | Sep. 30, 2017CAD | Sep. 30, 2017USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2016USD ($) | Jul. 07, 2016USD ($) | Dec. 31, 2012USD ($)a | |
Note payable, variable interest rate basis | 2.84% | |||||||||||
Long term note | $ 205,612,000 | $ 205,612,000 | $ 141,915,000 | |||||||||
Line of Credit [Member] | ||||||||||||
Availability under line of credit | 105,900,000 | 105,900,000 | ||||||||||
Channel Finance Facility [Member] | ||||||||||||
Availability under Channel Finance Facility | $ 35,000,000 | |||||||||||
Revolving Credit Facility [Member] | ||||||||||||
Long term note | 168,344,000 | 168,344,000 | ||||||||||
Revolving Credit Facility [Member] | Second Amendment to Fourth Amended Loan Agreement [Member] | ||||||||||||
Maximum credit limit | $ 345,000,000 | 345,000,000 | ||||||||||
Debt maturity date | Mar. 19, 2021 | |||||||||||
Interest rate description of Canadian Maximum Credit | interest on outstanding balance under the Canadian Maximum Credit based on the Canadian Base Rate (calculated as the greater of CDOR plus one percentage point and the prime rate for Canadian Dollar commercial loans, as further defined in the Fourth Amended Loan Agreement) or at the election of the Borrowers, based on the CDOR Rate, plus a margin, depending on average excess availability under the Revolving Line, ranging from 1.50% to 1.75%; and (v) interest on outstanding balance under the Maximum Credit based on the Eurodollar Rate plus a margin, depending on average excess availability under the revolving line, ranging from 1.50% to 1.75%. The credit facility also includes a monthly unused line fee of 0.25% per year on the amount, if any, by which the Maximum Credit, then in effect, exceeds the average daily principal balance of outstanding borrowings during the immediately preceding month. | |||||||||||
Percentage of unused line fee | 0.25% | |||||||||||
Fixed charge coverage ratio | 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. | |||||||||||
Revolving Credit Facility [Member] | Second Amendment to Fourth Amended Loan Agreement [Member] | Santa Monica Real Properties [Member] | ||||||||||||
Sub-lines revolving credit facility | 12,500,000 | |||||||||||
Principal amortization value | 149,083 | |||||||||||
Revolving Credit Facility [Member] | Second Amendment to Fourth Amended Loan Agreement [Member] | Woodbridge Real Properties [Member] | ||||||||||||
Sub-lines revolving credit facility | 2,200,000 | |||||||||||
Principal amortization value | $ 26,250 | |||||||||||
Revolving Credit Facility [Member] | Second Amendment to Fourth Amended Loan Agreement [Member] | Eurodollar [Member] | Minimum [Member] | ||||||||||||
Note payable, variable interest rate basis | 1.50% | |||||||||||
Revolving Credit Facility [Member] | Second Amendment to Fourth Amended Loan Agreement [Member] | Eurodollar [Member] | Maximum [Member] | ||||||||||||
Note payable, variable interest rate basis | 1.75% | |||||||||||
Revolving Credit Facility [Member] | Second Amendment to Fourth Amended Loan Agreement [Member] | Canadian Dollar [Member] | ||||||||||||
Sub-line available in Canadian Dollar under maximum credit | CAD | CAD 40,000,000 | |||||||||||
Revolving Credit Facility [Member] | Second Amendment to Fourth Amended Loan Agreement [Member] | Canadian Dollar [Member] | Minimum [Member] | ||||||||||||
Note payable, variable interest rate basis | 1.50% | |||||||||||
Revolving Credit Facility [Member] | Second Amendment to Fourth Amended Loan Agreement [Member] | Canadian Dollar [Member] | Maximum [Member] | ||||||||||||
Note payable, variable interest rate basis | 1.75% | |||||||||||
Revolving Credit Facility [Member] | Second Amendment to Fourth Amended Loan Agreement [Member] | Canadian Dollar [Member] | CDOR Rate [Member] | ||||||||||||
Note payable, variable interest rate basis | 1.00% | |||||||||||
Long-term Debt Obligations [Member] | ||||||||||||
Purchase price of real property | $ 6,600,000 | $ 1,100,000 | ||||||||||
Long term note | $ 4,575,000 | |||||||||||
Debt term | 7 years | |||||||||||
Debt straight line term | 25 years | |||||||||||
Note balloon payment maturity date | January 2,022 | |||||||||||
Area of land purchased | a | 7.9 | |||||||||||
Additional costs incurred for construction of a new cloud data center | $ 12,200,000 | |||||||||||
Long-term Debt Obligations [Member] | Loan Agreement [Member] | ||||||||||||
Purchase price of real property | $ 5,800,000 | |||||||||||
Long term note | $ 4,900,000 | |||||||||||
Debt term | 7 years | 5 years | ||||||||||
Debt straight line term | 25 years | 25 years | ||||||||||
Note balloon payment maturity date | April 2,022 | January 2,020 | ||||||||||
Maximum amount under finance agreement relating to building of data center | $ 7,725,000 | |||||||||||
Long-term Debt Obligations [Member] | Three Financing Arrangements [Member] | ||||||||||||
Note balloon payment maturity date | March 2,017 | |||||||||||
Financed purchases of fixed assets | $ 5,600,000 | |||||||||||
Long-term Debt Obligations [Member] | Credit Agreement [Member] | ||||||||||||
Debt maturity date | Jan. 31, 2020 | Sep. 30, 2016 | ||||||||||
Long term note | $ 10,100,000 | |||||||||||
Debt term | 5 years | |||||||||||
Debt straight line term | 25 years | |||||||||||
Note balloon payment maturity date | September 2,016 |
Debt - Schedule of Outstanding
Debt - Schedule of Outstanding Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | |
Total | $ 205,612 | $ 141,915 | |
Less: Total current debt | 171,776 | 123,165 | |
Total non-current debt | 33,836 | 18,750 | |
Revolving Credit Facility, Libor Plus 1.50%, Maturing In March 2021 [Member] | |||
Total | 168,344 | 107,396 | |
Note Payable, Libor Plus 1.50%, Maturing In March 2021 [Member] | |||
Total | 8,293 | ||
Note Payable, Libor Plus 1.50%, Maturing In March 2021 [Member] | |||
Total | 11,480 | 1,392 | |
Note Payable, Libor Plus 1.50%, Maturing In March 2021 [Member] | |||
Total | 2,021 | ||
Note Payable, Greater Of 2% Or Libor Plus 2.15%, Maturing In April 2022 [Member] | |||
Total | 4,454 | 4,601 | [1] |
Note Payable, Libor Plus 2.25%, Maturing In January 2022 [Member] | |||
Total | 3,965 | 4,137 | |
Notes Payable, 4.12%, 4.33% And 4.60%, Matured In March 2017 [Member] | |||
Total | 525 | ||
Note Payable, Libor Plus 2.25%, Maturing In January 2020 [Member] | |||
Total | 6,875 | 7,107 | |
Note Payable, Prime Plus 0.375% Or Libor Plus 2.375%, Maturing In January 2020 [Member] | |||
Total | 7,811 | 8,113 | |
Note Payable, LIBOR Plus 3.2%, Maturing In May 2025 [Member] | |||
Total | 291 | ||
Other Note Payable, Maturing In August and September 2018 [Member] | |||
Total | $ 371 | $ 351 | |
[1] | This note payable, related to the Irvine Property, has been presented on our Condensed Consolidated Balance Sheet at December 31, 2016 as "Note payable related to asset held for sale" and was included as current debt. See Note 4 above for more information regarding the Irvine Property. |
Debt - Schedule of Outstandin33
Debt - Schedule of Outstanding Debt (Details) (Parenthetical) | 9 Months Ended |
Sep. 30, 2017 | |
Note payable variable interest rate basis | 2.84% |
Revolving Credit Facility, Libor Plus 1.50%, Maturing In March 2021 [Member] | LIBOR Rate [Member] | |
Note payable variable interest rate basis | 1.50% |
Note payable maturity date | March 2,021 |
Note Payable, Libor Plus 1.50%, Maturing In March 2021 [Member] | LIBOR Rate [Member] | |
Note payable variable interest rate basis | 1.50% |
Note payable maturity date | March 2,021 |
Note Payable, Libor Plus 1.50%, Maturing In March 2021 [Member] | LIBOR Rate [Member] | |
Note payable variable interest rate basis | 1.50% |
Note payable maturity date | March 2,021 |
Note Payable, Libor Plus 1.50%, Maturing In March 2021 [Member] | LIBOR Rate [Member] | |
Note payable variable interest rate basis | 1.50% |
Note payable maturity date | March 2,021 |
Note Payable, Greater Of 2% Or Libor Plus 2.15%, Maturing In April 2022 [Member] | Maximum [Member] | |
Note payable variable interest rate basis | 2.00% |
Note payable maturity date | April 2,022 |
Note Payable, Greater Of 2% Or Libor Plus 2.15%, Maturing In April 2022 [Member] | LIBOR Rate [Member] | |
Note payable variable interest rate basis | 2.15% |
Note payable maturity date | April 2,022 |
Note Payable, Libor Plus 2.25%, Maturing In January 2022 [Member] | LIBOR Rate [Member] | |
Note payable variable interest rate basis | 2.25% |
Note payable maturity date | January 2,022 |
Notes Payable, 4.12%, 4.33% And 4.60%, Matured In March 2017 [Member] | |
Note payable variable interest rate basis | 4.12% |
Note payable maturity date | March 2,017 |
Notes Payable, 4.12%, 4.33% And 4.60%, Matured In March 2017 One [Member] | |
Note payable variable interest rate basis | 4.33% |
Note payable maturity date | March 2,017 |
Notes Payable, 4.12%, 4.33% And 4.60%, Matured In March 2017 Two [Member] | |
Note payable variable interest rate basis | 4.60% |
Note payable maturity date | March 2,017 |
Note Payable, Libor Plus 2.25%, Maturing In January 2020 [Member] | LIBOR Rate [Member] | |
Note payable variable interest rate basis | 2.25% |
Note payable maturity date | January 2,020 |
Note Payable, Prime Plus 0.375% Or Libor Plus 2.375%, Maturing In January 2020 [Member] | LIBOR Rate [Member] | |
Note payable variable interest rate basis | 2.375% |
Note payable maturity date | January 2,020 |
Note Payable, Prime Plus 0.375% Or Libor Plus 2.375%, Maturing In January 2020 [Member] | Prime Rate [Member] | |
Note payable variable interest rate basis | 0.375% |
Note payable maturity date | January 2,020 |
Note Payable, LIBOR Plus 3.2%, Maturing In May 2025 [Member] | LIBOR Rate [Member] | |
Note payable variable interest rate basis | 3.20% |
Note payable maturity date | May 2,025 |
Other Note Payable, Maturing In August and September 2018 [Member] | |
Note payable maturity date | August and September 2018 |
Debt - Schedule of Maturities o
Debt - Schedule of Maturities of Outstanding Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Remainder of 2017 | $ 169,521 | |
2,018 | 3,291 | |
2,019 | 3,277 | |
2,020 | 15,653 | |
2,021 | 7,127 | |
Thereafter | 6,743 | |
Total | 205,612 | $ 141,915 |
Total Long-Term Debt Obligations [Member] | ||
Remainder of 2017 | 1,177 | |
2,018 | 3,291 | |
2,019 | 3,277 | |
2,020 | 15,653 | |
2,021 | 7,127 | |
Thereafter | 6,743 | |
Total | 37,268 | |
Revolving Credit Facility [Member] | ||
Remainder of 2017 | 168,344 | |
2,018 | ||
2,019 | ||
2,020 | ||
2,021 | ||
Thereafter | ||
Total | $ 168,344 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||||
Unrecognized tax benefits | $ 500 | $ 500 | $ 500 | ||
Unrecognized interest or penalties | |||||
Accrued interest and penalties |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | 108 Months Ended | |||
Aug. 31, 2017 | Apr. 30, 2015 | Sep. 30, 2012 | Sep. 30, 2017 | Sep. 30, 2017 | Sep. 30, 2017 | Oct. 31, 2008 | |
Equity [Abstract] | |||||||
Maximum value authorized under discretionary common stock repurchase program | $ 10,000 | ||||||
Revised maximum value authorized under discretionary common stock repurchase program | $ 40,000 | $ 30,000 | $ 20,000 | ||||
Number of common stock shares repurchased during period | 869,287 | 4,950,974 | |||||
Shares repurchased during period, value | $ 11,400 | $ 37,300 | |||||
Amount available to repurchase the stock | $ 2,700 | $ 2,700 | $ 2,700 | ||||
Dividend payment description | We have never paid cash dividends on our capital stock and our credit facility prohibits us from paying any cash dividends on our capital stock. Therefore, we do not currently anticipate paying dividends; we intend to retain any earnings to finance the growth and development of our business. |
Earnings Per Share (Details Nar
Earnings Per Share (Details Narrative) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Common stock excluded from the calculation of diluted EPS | 2,000 | 142,000 | 516,000 | |
Loss Reported [Member] | ||||
Common stock excluded from the calculation of diluted EPS | 634,000 | |||
Income Reported [Member] | ||||
Common stock excluded from the calculation of diluted EPS | 229,000 |
Earnings Per Share - Schedule o
Earnings Per Share - Schedule of Reconciliation of Amounts Used in Basic and Diluted EPS Computation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Basic and Diluted Earnings (Loss) Per Common Share | ||||
Net income (loss) | $ (841) | $ 5,321 | $ 5,686 | $ 12,883 |
Basic EPS - Weighted average number of common shares outstanding | 12,248 | 11,722 | 12,418 | 11,807 |
Dilutive effect of stock awards | 781 | 907 | 591 | |
Diluted EPS - Weighted average number of common shares outstanding | 12,248 | 12,503 | 13,325 | 12,398 |
Net earnings (loss) per share Basic | $ (0.07) | $ 0.45 | $ 0.46 | $ 1.09 |
Net earnings (loss) per share Diluted | $ (0.07) | $ 0.43 | $ 0.43 | $ 1.04 |
Segment Information (Details Na
Segment Information (Details Narrative) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Segment Reporting [Abstract] | ||
Total assets | $ 678,537 | $ 629,810 |
Segment Information - Schedule
Segment Information - Schedule of Segment Information for Entity's Continuing Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | ||
Segment Reporting Information [Line Items] | |||||
Net sales | $ 545,479 | $ 584,937 | $ 1,629,988 | $ 1,663,960 | |
Gross profit | 81,294 | 82,655 | 244,870 | 235,961 | |
Operating profit (loss) | 1,385 | 10,700 | 11,482 | 25,584 | |
Commercial [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 424,010 | 459,558 | 1,272,021 | 1,288,985 | |
Gross profit | 64,780 | 66,362 | 195,822 | 192,209 | |
Depreciation and amortization expense | [1] | 1,423 | 1,630 | 4,247 | 4,873 |
Operating profit (loss) | 19,051 | 20,779 | 57,011 | 59,494 | |
Public Sector [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 80,702 | 89,688 | 224,759 | 261,131 | |
Gross profit | 9,647 | 10,271 | 27,606 | 25,947 | |
Depreciation and amortization expense | [1] | 208 | 287 | 622 | 863 |
Operating profit (loss) | 2,901 | 4,779 | 9,127 | 10,501 | |
Canada [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 38,167 | 35,724 | 130,451 | 113,890 | |
Gross profit | 6,554 | 6,055 | 21,281 | 17,852 | |
Depreciation and amortization expense | [1] | 278 | 326 | 783 | 994 |
Operating profit (loss) | (830) | 780 | 685 | 3,283 | |
United Kingdom [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 2,737 | 3,099 | |||
Gross profit | 448 | 501 | |||
Depreciation and amortization expense | [1] | 21 | 21 | ||
Operating profit (loss) | (1,467) | (3,204) | |||
Corporate & Other [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | (137) | (33) | (342) | (46) | |
Gross profit | (135) | (33) | (340) | (47) | |
Depreciation and amortization expense | [1] | 1,639 | 1,632 | 4,809 | 5,192 |
Operating profit (loss) | (18,270) | (15,638) | (52,137) | (47,694) | |
Consolidated [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 545,479 | 584,937 | 1,629,988 | 1,663,960 | |
Gross profit | 81,294 | 82,655 | 244,870 | 235,961 | |
Depreciation and amortization expense | [1] | 3,569 | 3,875 | 10,482 | 11,922 |
Operating profit (loss) | $ 1,385 | $ 10,700 | $ 11,482 | $ 25,584 | |
[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. |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | ||||
Rent expense, net of sublease income | $ 1,800 | $ 1,400 | $ 4,700 | $ 4,400 |
Subsequent Event (Details Narra
Subsequent Event (Details Narrative) £ in Thousands, $ in Thousands | Oct. 24, 2017USD ($) | Oct. 24, 2017GBP (£) | Oct. 24, 2017USD ($) | Sep. 30, 2017 |
Note payable, variable interest rate basis | 2.84% | |||
Subsequent Event [Member] | Fifth Amended Loan Agreement [Member] | US Lenders [Member] | ||||
Payment of fees and cost | $ 69 | |||
Subsequent Event [Member] | Fifth Amended Loan Agreement [Member] | GBP [Member] | UK Lenders [Member] | ||||
Payment of fees and cost | £ | £ 50 | |||
Subsequent Event [Member] | Revolving Credit Facility [Member] | Fifth Amended Loan Agreement [Member] | ||||
Increase to the threshold for default trigger description | an increase in the default threshold of any judgment for payment of money rendered against any Borrowers to $20,000,000 in any one case and $25,000,000 in the aggregate, as more fully described in the Fifth Amended Loan Agreement. | |||
Default threshold, payment rendered against the company in any one case | $ 20,000 | |||
Default threshold, payment rendered against the company in the aggregate | $ 25,000 | |||
Subsequent Event [Member] | Revolving Credit Facility [Member] | Fifth Amended Loan Agreement [Member] | Minimum [Member] | ||||
Note payable, variable interest rate basis | 1.50% | 1.50% | ||
Subsequent Event [Member] | Revolving Credit Facility [Member] | Fifth Amended Loan Agreement [Member] | Maximum [Member] | ||||
Note payable, variable interest rate basis | 1.75% | 1.75% | ||
Subsequent Event [Member] | Revolving Credit Facility [Member] | Fifth Amended Loan Agreement [Member] | GBP [Member] | ||||
Sub-line available for UK Borrower under maximum credit | £ | £ 25,000 |