Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Nov. 06, 2018 | |
Document and Entity Information | ||
Entity Registrant Name | Wayside Technology Group, Inc. | |
Entity Central Index Key | 945,983 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 4,496,494 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 6,464 | $ 5,530 |
Accounts receivable, net of allowances of $2,449 and $2,102, respectively | 83,762 | 76,937 |
Inventory, net | 1,760 | 2,794 |
Vendor prepayments | 3,970 | 6,837 |
Prepaid expenses and other current assets | 525 | 553 |
Total current assets | 96,481 | 92,651 |
Equipment and leasehold improvements, net | 1,682 | 1,828 |
Accounts receivable-long-term, net | 4,535 | 7,437 |
Other assets | 281 | 231 |
Deferred income taxes | 131 | 138 |
Total assets | 103,110 | 102,285 |
Current liabilities: | ||
Accounts payable and accrued expenses | 62,675 | 62,792 |
Total current liabilities | 62,675 | 62,792 |
Deferred rent and tenant allowances | 729 | 781 |
Total liabilities | 63,404 | 63,573 |
Stockholders’ equity: | ||
Common Stock, $.01 par value; 10,000,000 shares authorized; 5,284,500 shares issued: 4,498,223 and 4,454,829 shares outstanding, respectively | 53 | 53 |
Additional paid-in capital | 32,241 | 31,257 |
Treasury stock, at cost, 786,277 and 829,671 shares, respectively | (13,426) | (14,207) |
Retained earnings | 22,020 | 22,522 |
Accumulated other comprehensive loss | (1,182) | (913) |
Total stockholders' equity | 39,706 | 38,712 |
Total liabilities and stockholders' equity | $ 103,110 | $ 102,285 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Condensed Consolidated Balance Sheets | ||
Accounts receivable, allowances (in dollars) | $ 2,449 | $ 2,102 |
Common Stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common Stock, shares authorized | 10,000,000 | 10,000,000 |
Common Stock, shares issued | 5,284,500 | 5,284,500 |
Common Stock, shares outstanding | 4,498,223 | 4,454,829 |
Treasury stock, shares | 786,277 | 829,671 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Condensed Consolidated Statements of Income | ||||
Net sales | $ 47,923 | $ 39,018 | $ 132,389 | $ 116,130 |
Cost of sales | 41,620 | 32,775 | 112,693 | 96,555 |
Gross profit | 6,303 | 6,243 | 19,696 | 19,575 |
Selling, general, and administrative expenses | 4,903 | 4,451 | 15,248 | 14,261 |
Separation expenses | 2,446 | |||
Income from operations | 1,400 | 1,792 | 2,002 | 5,314 |
Other income (expense): | ||||
Interest, net | 296 | 145 | 744 | 466 |
Foreign currency transaction gains | 42 | 73 | 40 | 22 |
Income before provision for income taxes | 1,738 | 2,010 | 2,786 | 5,802 |
Provision for income taxes | 420 | 669 | 987 | 1,867 |
Net income | $ 1,318 | $ 1,341 | $ 1,799 | $ 3,935 |
Income per common share-Basic | $ 0.29 | $ 0.30 | $ 0.40 | $ 0.87 |
Income per common share-Diluted | $ 0.29 | $ 0.30 | $ 0.40 | $ 0.87 |
Weighted average common shares outstanding-Basic (in shares) | 4,386 | 4,283 | 4,344 | 4,303 |
Weighted average common shares outstanding-Diluted (in shares) | 4,386 | 4,283 | 4,344 | 4,303 |
Dividends paid per common share (in dollars per share) | $ 0.17 | $ 0.17 | $ 0.51 | $ 0.51 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Condensed Consolidated Statements of Comprehensive Income (Loss) | ||||
Net income | $ 1,318 | $ 1,341 | $ 1,799 | $ 3,935 |
Other comprehensive (loss) income: | ||||
Foreign currency translation adjustments | 58 | 274 | (269) | 661 |
Other comprehensive (loss) income | 58 | 274 | (269) | 661 |
Comprehensive income | $ 1,376 | $ 1,615 | $ 1,530 | $ 4,596 |
Condensed Consolidated Statem_2
Condensed Consolidated Statement of Stockholders' Equity - 9 months ended Sep. 30, 2018 - USD ($) $ in Thousands | Common Stock | Additional Paid-In Capital | Treasury | Retained Earnings | Accumulated Other Comprehensive (loss) | Total |
Balance at Dec. 31, 2017 | $ 53 | $ 31,257 | $ (14,207) | $ 22,522 | $ (913) | $ 38,712 |
Balance (in shares) at Dec. 31, 2017 | 5,284,500 | 5,284,500 | ||||
Balance (in shares) at Dec. 31, 2017 | 829,671 | 829,671 | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 1,799 | $ 1,799 | ||||
Translation adjustment | (269) | (269) | ||||
Dividends paid | (2,301) | (2,301) | ||||
Share-based compensation expense | 2,618 | 2,618 | ||||
Restricted stock grants (net of forfeitures) and adjustments | (1,634) | $ 1,799 | 165 | |||
Restricted stock grants (net of forfeitures) and adjustments (in shares) | (115,824) | |||||
Treasury shares repurchased | $ (1,018) | (1,018) | ||||
Treasury shares repurchased (in shares) | 72,430 | |||||
Balance at Sep. 30, 2018 | $ 53 | $ 32,241 | $ (13,426) | $ 22,020 | $ (1,182) | $ 39,706 |
Balance (in shares) at Sep. 30, 2018 | 5,284,500 | 5,284,500 | ||||
Balance (in shares) at Sep. 30, 2018 | 786,277 | 786,277 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash flows from operating activities | ||
Net income | $ 1,799 | $ 3,935 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation and amortization expense | 358 | 359 |
(Benefit) for doubtful accounts receivable | (95) | |
Deferred income tax expense | 7 | 181 |
Share-based compensation expense | 2,618 | 1,026 |
Loss on disposal of fixed assets | 22 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (4,147) | 21,101 |
Inventory | 1,029 | (69) |
Prepaid expenses and other current assets | 24 | 169 |
Vendor prepayments | 2,867 | (7,471) |
Accounts payable and accrued expenses | 163 | (25,405) |
Other assets and liabilities | (109) | (96) |
Net cash provided by (used in) operating activities | 4,631 | (6,365) |
Cash flows used in investing activities | ||
Purchase of equipment and leasehold improvements | (243) | (339) |
Net cash used in investing activities | (243) | (339) |
Cash flows used in financing activities | ||
Purchase of treasury stock | (1,018) | (2,841) |
Borrowings under revolving credit facility | 10,000 | 2,000 |
Repayment of borrowings under revolving credit facility | (10,000) | |
Dividends paid | (2,301) | (2,298) |
Net cash used in financing activities | (3,319) | (3,139) |
Effect of foreign exchange rate on cash | (135) | 384 |
Net increase (decrease) in cash and cash equivalents | 934 | (9,459) |
Cash and cash equivalents at beginning of period | 5,530 | 13,524 |
Cash and cash equivalents at end of period | 6,464 | 4,065 |
Supplementary disclosure of cash flow information: | ||
Income taxes paid | $ 1,779 | $ 1,944 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2018 | |
Basis of Presentation | |
Basis of Presentation | 1. Basis of Presentation: The accompanying unaudited condensed consolidated financial statements of Wayside Technology Group, Inc. and its subsidiaries (collectively, the “Company”), have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, the financial statements do not include all of the information and footnotes required by U.S. GAAP for complete audited financial statements. The preparation of these condensed consolidated financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, the Company evaluates its estimates, including those related to product returns, bad debts, inventories, intangible assets, income taxes, stock-based compensation, evaluation of performance obligations and allocation of revenue to distinct items, contingencies and litigation. The Company bases its estimates on its historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. In the opinion of the Company’s management, all adjustments that are of a normal recurring nature, considered necessary for fair presentation, have been included in the accompanying condensed consolidated financial statements. The Company’s actual results may differ from these estimates under different assumptions or conditions. The unaudited condensed consolidated statements of income for the interim periods are not necessarily indicative of results for the full year. For further information, refer to the consolidated financial statements and notes thereto included in the Company’s annual report on Form 10-K filed with the Securities Exchange Commission for the year ended December 31, 2017. Effective January 1, 2018 we adopted the requirements of Accounting Standards Update, or ASU, No. 2014-09 Revenue from Contracts with customers, or Accounting Standard Codification (“ASC”) 606 using the full retrospective method, as discussed in detail in Note 5. All amounts and disclosures set forth in this Quarterly Report on Form 10-Q have been updated to comply with ASC 606 as discussed in Note 5. Reclassifications Certain |
Recently issued accounting stan
Recently issued accounting standards | 9 Months Ended |
Sep. 30, 2018 | |
Recently issued accounting standards | |
Recently issued accounting standards | 2. Recently issued accounting standards: In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-09, Revenue from Contracts with Customers, superseding the previous revenue recognition requirements, along with most existing industry-specific guidance. In March, April, May and December 2016, the FASB issued additional updates to the new accounting standard which provide supplemental adoption guidance and clarifications. The guidance requires an entity to review contracts in five steps: 1) identify the contract, 2) identify performance obligations, 3) determine the transaction price, 4) allocate the transaction price, and 5) recognize revenue in order to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new standard also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenue arising from contracts with customers. The Company adopted the new standard on January 1, 2018, using the full retrospective method which required us to restate our historical financial information to reflect the adoption as of the earliest reporting period presented. The most significant impact of adopting the standard relates to the determination of whether the Company is acting as a principal or an agent in the sale of third party security software and software that is highly interdependent with support, as well as maintenance, support or other services. See Footnote 5 (Revenue Recognition). In February 2016, the FASB issued ASU 2016-02, Leases ("ASU 2016-02"). ASU 2016-02 supersedes the lease guidance under FASB ASC Topic 840, Leases, resulting in the creation of FASB ASC Topic 842, Leases. ASU 2016-02 requires a lessee to recognize in the statement of financial position a liability to make lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term. Leases will be classified as either finance or operating leases with classification affecting the pattern of expense recognition in the statement of earnings. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. Early adoption is permitted. The Company is currently assessing the potential impact of adopting ASU 2016-02 on its consolidated financial statements. It is expected that assets and liabilities will increase as a result of the adoption of this standard. In June 2016, the FASB issued Accounting Standards Update No. 2016-13, Financial Instruments - Credit Losses (Topic 326) ("ASU No. 2016-13"). ASU No. 2016-13 revises the methodology for measuring credit losses on financial instruments and the timing of when such losses are recorded. ASU No. 2016-13 is effective for the Company in the first quarter of 2020, with early adoption permitted, and is to be applied using a modified retrospective approach. The Company is currently evaluating the potential effects of adopting the provisions of ASU No. 2016-13 on its consolidated financial statements, particularly its recognition of allowances for accounts receivable. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (“ASU 2016-15”) which reduces diversity in practice in how certain transactions are classified in the statement of cash flows. The new standard is effective for the Company beginning with the first quarter of 2018. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements. In October 2016, the FASB issued ASU 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory.” This amendment is intended to improve accounting for the income tax consequences of intra-entity transfers of assets other than inventory. In accordance with this guidance, an entity should recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The ASU is effective for the Company beginning in fiscal 2019. Early adoption is permitted in fiscal 2018 with modified retrospective application. The Company is continuing to evaluate the impact of the adoption of this guidance on its consolidated financial statements. In May 2017, the FASB issued ASU No. 2017-09, “Scope of Modification Accounting”, to reduce diversity in practice and provide clarity regarding existing guidance in ASC 718, “Stock Compensation”. The amendments in this updated guidance clarify that an entity should apply modification accounting in response to a change in the terms and conditions of an entity’s share-based payment awards unless three newly specified criteria are met. This guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within that reporting period. The new guidance was effective for the Company on a prospective basis beginning on January 1, 2018 and did not impact the Company’s Consolidated Financial Statements as it is not the Company’s practice to change either the terms or conditions of stock-based payment awards once they are granted. In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815) – Targeted Improvements to Accounting for Hedging Activities, which improves the financial reporting of hedging relationships to better portray the economic results of an entity’s risk management activities in its financial statements. The amendments in this update also make certain targeted improvements to simplify the application of the hedge accounting guidance in current U.S. GAAP. ASU No. 2017-12 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years; the ASU allows for early adoption in any interim period after issuance of the update. The Company is currently assessing the impact this ASU will have on its consolidated financial statements. In February 2018, the FASB issued ASU 2018-02, “Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income” (“ASU 2018-02”), which permits the reclassification of stranded tax effects resulting from the Tax Cuts and Jobs Act (the “TCJA” or “U.S. tax reform”) from Accumulated other comprehensive income (loss) to Retained earnings. This new guidance is effective for the Company beginning on January 1, 2019 with early adoption permitted and must be applied either in the period of adoption or retrospectively to periods in which the effects of the TCJA are recognized. The Company is continuing to evaluate the impact of the adoption of this guidance on its consolidated financial statements. In March 2018, the FASB issued ASU 2018-05, “Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 (SEC Update), Income Taxes (Topic 740)”. The Company completed its Federal and State income tax filings for 2017 with no material change to amounts previously reported. In June 2018, the FASB issued Accounting Standards Update (“ASU”) No. 2018-07, “Compensation — Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting,” which aligns the measurement and classification guidance for share-based payments to nonemployees with that for employees, with certain exceptions. It expands the scope of ASC 718 to include share-based payments granted to nonemployees in exchange for goods or services used or consumed in the entity’s own operations and supersedes the guidance in ASC 505-50. The ASU retains the existing cost attribution guidance, which requires entities to recognize compensation cost for nonemployee awards in the same period and in the same manner (i.e., capitalize or expense) they would if they paid cash for the goods or services, but it moves the guidance to ASC 718. The guidance also allows nonpublic entities to account for nonemployee awards using certain practical expedients that are already available for employee awards, but the same accounting policies must be used for awards to both employees and nonemployees. ASU 2018-07 is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact of adopting this guidance. In July 2018, the FASB issued ASU 2018-09 – Codification Improvements, which facilitates amendments to a variety of topics to clarify, correct errors in, or make minor improvements to the accounting standards codification. The effective date of the standard is dependent on the facts and circumstances of each amendment. Some amendments do not require transition guidance and will be effective upon the issuance of this standard. A majority of the amendments in ASU 2018-09 will be effective in annual periods beginning after December 15, 2018. We will be required to adopt this standard in the first quarter of fiscal 2019. This standard is not expected to have a material impact on our consolidated financial statements and related disclosures. |
Foreign Currency Translation
Foreign Currency Translation | 9 Months Ended |
Sep. 30, 2018 | |
Foreign Currency Translation | |
Foreign Currency Translation | 3. Foreign Currency Translation: Assets and liabilities of the Company’s foreign subsidiaries have been translated using the end of the reporting period exchange rates, and related revenues and expenses have been translated at average rates of exchange in effect during the period. Foreign currency transaction gains and losses are recorded as income or expenses as amounts are settled. The net sales from our foreign operations for the first nine months of 2018 were $13.9 million as compared to $14.1 million in the first nine months of 2017. The net sales from our foreign operations for the third quarter of 2018 were $4.0 million as compared to $4.6 million in the third quarter of 2017. |
Comprehensive Income
Comprehensive Income | 9 Months Ended |
Sep. 30, 2018 | |
Comprehensive Income | |
Comprehensive Income | 4. Comprehensive Income: Cumulative translation adjustments have been classified within accumulated other comprehensive loss, which is a separate component of stockholders’ equity in accordance with FASB ASC Topic 220, “Comprehensive Income.” |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2018 | |
Revenue Recognition | |
Revenue Recognition | 5. Revenue Recognition: Effective January 1, 2018, we adopted ASC 606 using the full retrospective method, which requires us to restate our historical financial information to reflect the adoption as of the earliest reporting period presented. There was no adjustment to equity as a result of the adoption. The most significant impact of adopting the standard relates to the determination of whether the Company is acting as a principal or an agent in the sale of third party security software and software that is highly interdependent with support, as well as maintenance, support and other services. Historically, under the transfer of risk and rewards model of revenue recognition, the Company has accounted for primarily all of its sales on a gross basis. The new guidance requires the Company to identify performance obligations and assess transfer of control. While assessing its performance obligations for sales of security software and software subscriptions that are highly interdependent with support, the Company determined that the vendor has ongoing performance obligations with the end customer that are not separately identifiable from the software itself. The Company also determined that the vendor has ongoing performance obligation for sales of certain third-party maintenance, support and service contracts. In these instances, the Company has determined that it does not have control and is acting as an agent in the sale. When acting as an agent in a transaction, the Company accounts for sales on a net basis, with the vendor cost associated with the sale recognized as a reduction of revenue. ASC 606 Adoption Impact to Previously Reported Results The tables below present historical information adjusted as if the standard had been adopted on January 1, 2017 for all periods presented. Nine months ended September 30, 2017 Three months ended September 30, 2017 As Impact As As Impact As Reported of Adoption Adjusted Reported of Adoption Adjusted Total Net sales $ 322,423 $ (206,293) $ 116,130 $ 106,646 $ (67,628) $ 39,018 Cost of sales 302,848 (206,293) 96,555 100,403 (67,628) 32,775 Gross profit $ 19,575 $ — $ 19,575 $ 6,243 $ — $ 6,243 Nine months ended September 30, 2017 Three months ended September 30, 2017 As Impact As As Impact As Reported of Adoption Adjusted Reported of Adoption Adjusted Lifeboat Distribution Segment: Net sales $ 300,344 $ (196,459) $ 103,885 $ 100,188 $ (65,479) $ 34,709 Cost of sales 283,471 (196,459) 87,012 94,771 (65,479) 29,292 Gross profit $ 16,873 $ — $ 16,873 $ 5,417 $ — $ 5,417 TechXtend Segment: Net sales $ 22,079 $ (9,834) $ 12,245 $ 6,458 $ (2,149) $ 4,309 Cost of sales 19,377 (9,834) 9,543 5,632 (2,149) 3,483 Gross profit $ 2,702 $ — $ 2,702 $ 826 $ — $ 826 The core principle of ASC 606 is to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration the entity expects to be entitled in exchange for those goods or services. This principle is achieved through applying the following five-step approach: Identification of the contract, or contracts, with a customer — A contract with a customer exists when (i) we enter into an enforceable contract with a customer that defines each party’s rights regarding the goods or services to be transferred and identifies the payment terms related to these goods or services, (ii) the contract has commercial substance and, (iii) we determine that collection of substantially all consideration for goods or services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration. We apply judgment in determining the customer’s ability and intention to pay, which is based on a variety of factors including the customer’s historical payment experience or, in the case of a new customer, published credit and financial information pertaining to the customer. The Company considers customer purchase orders, which in some cases are governed by master agreements or general terms and conditions of sale, to be contracts with customers. All revenue is generated from contracts with customers. Identification of the performance obligations in the contract — Performance obligations promised in a contract are identified based on the goods or services that will be transferred to the customer that are capable of being distinct, whereby the customer can benefit from the goods or service either on its own or together with other resources that are readily available from third parties or from us, and are distinct in the context of the contract, whereby the transfer of the goods or services is separately identifiable from other promises in the contract. To the extent a contract includes multiple promised goods or services, we apply judgment to determine whether promised goods or services are capable of being distinct in the context of the contract. If these criteria are not met the promised goods or services are accounted for as a combined performance obligation. Determination of the transaction price —The transaction price is determined based on the consideration to which we will be entitled in exchange for transferring goods or services to the customer. Net sales are recorded net of estimated discounts, rebates, and returns. Vendor rebates and price protection are recorded when earned as a reduction to cost of sales or merchandise inventory, as applicable. Cooperative reimbursements from vendors, which are earned and available, are recorded in the period the related advertising expenditure is incurred. Cooperative reimbursements are recorded as a reduction of cost of sales. Allocation of the transaction price to the performance obligations in the contract — If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative standalone selling price, or SSP, basis. We determine standalone SSP based on the price at which the performance obligation is sold separately. If the standalone selling price is not observable through established standard prices, we use judgement and estimate the standalone selling price taking into account available information such as market pricing and pricing related to similar products. Contracts with a significant financing component are discounted to their present value at contract inception and accreted up to the expected payment amounts. These contracts generally offer customers extended payment terms of up to three years. Recognition of revenue when, or as, we satisfy a performance obligation — The Company recognizes revenue when its performance obligations are complete, and control of the specified goods or services pass to the customer. The Company considers the following indicators in determining when control passes to the customer: (i) the Company has a right to payment for the product or service (ii) the customer has legal title to the product, (iii) the Company has transferred physical possession of the product (iv) the Customer has the significant risk and rewards of ownership of the product and (v) the customer has accepted the product. Substantially all our performance obligations are satisfied at a point in time, as our obligation is to deliver a product or fulfill an order for a third party to deliver ongoing services, maintenance or support. Disaggregation of Revenue We generate revenue from the re-sale of third party software licenses, subscriptions, hardware, and related service contracts. Finance fees related to sales are classified as interest income. The following table depicts the disaggregation of revenue according to revenue type and is consistent with how we evaluate our financial performance: Net sales (Unaudited) Nine months ended (Unaudited) Three months ended September 30, September 30, September 30, September 30, 2018 2017 2018 2017 Hardware and software product $ $ $ $ 35,556 Software - security & highly interdependent with support 1,343 Maintenance, support & other services 2,119 Net sales $ $ $ $ 39,018 Hardware and software product - Hardware product consists of sales of hardware manufactured by third parties. Hardware product is delivered from our warehouse or drop shipped directly from the vendor. Revenue from our hardware products is recognized on a gross basis, with the selling price to the customer as net sales, and the cost of the related product as cost of sales, upon transfer of control to the customer, as the Company is acting a principal in the transaction. Control is generally deemed to have passed to the customer upon transfer of title and risk of ownership. Software product consists of sales of perpetual and term software licenses for products developed by third party vendors, which are distinct from related maintenance and support. Software licenses are delivered via electronic license keys provided by the vendor to the end user. Revenue from the sale of software products is recognized on a gross basis, with the selling price to the customer as net sales, and the cost of the related product as cost of sales, upon transfer of control to our customers as the Company is a principal in the transaction. Control is deemed to have passed to the customer when they acquire the right to use or copy the software under license as substantially all product functionality is available to the customer at the time of sale. Software maintenance and support, commonly known as software assurance or post contract support, consists of software updates and technical support provided by the software vendor to the licensor over a period of time. In cases where the software maintenance is distinct from the related software license, software maintenance is accounted for as a separate performance obligation. In cases where the software maintenance is not distinct from the related software license, it is accounted for as a single performance obligation with the related license. We utilize judgement in determining whether the maintenance is distinct from the software itself. This involves considering if the software provides its original intended functionality without the updates, or is dependent on frequent, or continuous updates to maintain its functionality. See Allocation of the transaction price to the performance obligations in the contract for a discussion of the allocation of maintenance and support costs when they are distinct from the related software licenses and Software - security and highly interdependent with support for a discussion of maintenance and support costs when they are not distinct from the related software license. Software - security and highly interdependent with support - Software - security software and software highly interdependent with support consists of sales of security subscriptions and other licensed software products whose functionality is highly interdependent with, and therefore not distinct from, related software maintenance. Delivery of the software license and related support over time is considered a single performance obligation of the third-party vendor for these products. The Company is an agent in these transactions, with revenue being recorded on a net basis when its performance obligation of processing a valid order between the supplier and customer contracting for the services is complete. Maintenance, support and other services revenue - Maintenance, support and other services revenue consists of third-party post-contract support that is not critical or essential to the core functionality of the related licensed software, and, to a lesser extent, from third-party professional services, software as a service, and cloud subscriptions. Revenue from maintenance, support and other service revenues is recognized on a net basis, upon fulfillment of an order to the customer, as the Company is an agent in the transaction, and its performance obligations are complete at the time a valid order between the parties is processed. Costs to obtain and fulfill a contract - We pay commissions and related payroll taxes to sales personnel when customers are invoiced. These costs are recorded as selling general and administrative expenses in the period earned as all of our performance obligations are complete within a short window of processing the order. Contract balances - Accounts receivable is recorded at the invoiced amount, net of an allowance for doubtful accounts and returns. A receivable is recognized in the period we deliver goods or provide services or when our right to consideration is unconditional. Payment terms on invoiced amounts are typically 30-75 days. The balance of accounts receivable, net of allowance for doubtful accounts and returns, as of December 31, 2017 and September 30, 2018 is presented in the accompanying condensed consolidated balance sheets. Accounts receivable-long-term result from product sales with extended payment terms that are discounted to their present values at the Company’s estimates of prevailing market rates at the time of the sale. The Company has determined that these amounts do not represent variable consideration as the amount earned is fixed. In subsequent periods, the accounts receivable is increased to the amounts due and payable by the customers through the accretion of interest income on the unpaid accounts receivable due in future years. The amounts due under these long-term accounts receivable due within one year are reclassified to the current portion of accounts receivable and are shown net of reserves. As our revenues are generally recognized at a point in time in the same period as they are billed, we have no deferred revenue balances. Provisions for doubtful accounts including long-term accounts receivable and returns are estimated based on historical write offs, sales returns and credit memo analysis which are adjusted to actual on a periodic basis. Principal versus agent considerations – The Company determines whether it is acting as a principal or agent in a transaction by assessing whether it controls a good or service prior to it being transferred to a customer, with control being defined as having the ability to direct the use of and obtain the benefits from the asset. The Company considers the following indicators, among others, in making the determination: 1) the Company is primarily responsible for fulfilling the promise to provide the promised good or service, 2) the Company has inventory risk, before or after the specified good or service has been transferred to the customer, 3) the Company has discretion in establishing price for the specified good or service. Generally, we conclude that we are a principal in transactions where software or hardware products containing their core functionality are delivered to the customer at the time of sale and are agents in transactions where we are arranging for the provision of future performance obligations by a third party. As we enter into distribution agreements with third-party service providers, we evaluate whether we are acting as a principal or agent for each product sold under the agreement based on the nature of the product or service, and our performance obligations. Products for which there are significant ongoing third-party performance obligations include software maintenance, which includes periodic software updates and support, security software that is highly interdependent with maintenance, software as a service, cloud and third party professional services. Sales of hardware and software products where we are a principal are recorded on a gross basis with the selling price to the customer recorded as sales and the cost of the product or software recorded as cost of sales. Sales where we are acting as an agent are recognized on a net basis at the date our performance obligations are complete. Under net revenue recognition, the cost paid to the vendor or third-party service provider is recorded as a reduction to sales, resulting in revenue being equal to the gross profit on the transaction. |
Fair Value
Fair Value | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value | |
Fair Value | 6. Fair Value: The carrying amounts of financial instruments, including cash and cash equivalents, short-term accounts receivable and accounts payable approximated fair value at September 30, 2018 and December 31, 2017 because of the relative short maturity of these instruments. The Company’s accounts receivable long-term is discounted to their present value at estimated prevailing market rates at the date of sale which approximates current rates. |
Balance Sheet Detail
Balance Sheet Detail | 9 Months Ended |
Sep. 30, 2018 | |
Balance Sheet Detail | |
Balance Sheet Detail | 7. Balance Sheet Detail: Accounts Receivable – From time to time, we sell accounts receivable to a financial institution on a non-recourse basis. The financial institution is responsible for all servicing of the receivables purchased. At September 30, 2018, accounts receivable includes $6.5 million of accounts receivable which have been sold to a financial institution with payment due to the Company on November 12, 2018. The receivables are recorded at their discounted fair value at September 30 ,2018. Equipment and leasehold improvements consist of the following: September 30, (Unaudited) December 31, 2018 2017 Equipment $ 2,121 $ 1,988 Leasehold improvements 1,334 1,335 3,455 3,323 Less accumulated depreciation and amortization (1,773) (1,495) $ 1,682 $ 1,828 For the nine months ended September 30, 2018 and 2017, the Company recorded depreciation and amortization expense of $0.4 million and $0.4 million respectively, which is included in general and administrative expense. Accounts receivable – long term, net consist of the following : September 30, (Unaudited) December 31, 2018 2017 Total amount due from customer $ 14,388 $ 20,886 Less discount (545) (912) Less current portion included in accounts receivable (9,308) (12,537) $ 4,535 $ 7,437 Accounts payable and accrued expenses consist of the following: September 30, (Unaudited) December 31, 2018 2017 Trade accounts payable $ 60,035 $ 58,910 Accrued expenses 2,640 3,882 $ 62,675 $ 62,792 |
Credit Facility
Credit Facility | 9 Months Ended |
Sep. 30, 2018 | |
Credit Facility. | |
Credit Facility | 8. Credit Facility: On November 15, 2017, the Company entered into a $20,000 revolving credit facility (the “Credit Facility”) with Citibank, N.A. (“Citibank”) pursuant to a Second Amended and Restated Revolving Credit Loan Agreement (the “Loan Agreement”), Second Amended and Restated Revolving Credit Loan Note (the “Note”), Second Amended and Restated Security Agreement (the “Security Agreement”) and Second Amended and Restated Pledge and Security Agreement (the “Pledge Agreement”). The Credit Facility, which will be used for working capital and general corporate purposes, matures on August 31, 2020, at which time the Company must pay all outstanding principal of all outstanding loans plus all accrued and unpaid interest, and any, fees, costs and expenses. In addition, the Company will pay regular monthly payments of all accrued and unpaid interest. The interest rate for any borrowings under the Credit Facility is subject to change from time to time based on the changes in the LIBOR Rate, as defined in the Loan Agreement (the “Index”). The Index was 2.26% at September 30, 2018. Interest on the unpaid principal balance of the Note will be calculated using a rate of 1.50 percentage points over the Index. If the Index becomes unavailable during the term of the Credit Facility, interest will be based upon the Prime Rate (as defined in the Loan Agreement) after notifying the Company. The Credit Facility is secured by the assets of the Company. Among other affirmative covenants set forth in the Loan Agreement, the Company must maintain (i) a minimum Debt Service Coverage Ratio (as defined in the Loan Agreement) of not less than 2.0 to 1.0, (ii) a maximum Leverage Ratio (as defined in the Loan Agreement) of at least 2.5 to 1.0, and (iii) a minimum Collateral Coverage Ratio (as defined in the Loan Agreement) of not less than 1.5 to 1.0. Additionally, the Loan Agreement contains negative covenants prohibiting, among other things, the creation of certain liens, the alteration of the nature or character of the Company’s business, and transactions with the Company’s shareholders, directors, officers, subsidiaries and/or affiliates other than with respect to (i) the repurchase of the issued and outstanding capital stock of the Company from the stockholders of the Company or (ii) the declaration and payment of dividends to the stockholders of the Company. At September 30, 2018 and December 31, 2017, the Company had no borrowings outstanding under the Credit Facility. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share | |
Earnings Per Share | 9. Earnings Per Share: Our basic and diluted earnings per share are computed using the two-class method. The ck and participating securities according to their participation rights in dividends and undistributed earnings or losses. Non-vested restricted stock awards that include non-forfeitable rights to dividends are considered participating securities. Per share amounts are computed by dividing net income available to common shareholders by the weighted average shares outstanding during each period. Diluted and basic earnings per share are the same because the restricted shares are the only potentially dilutive security. A reconciliation of the numerators and denominators of the basic and diluted per share computations follows: (Unaudited ) (Unaudited ) Nine months ended Three months ended September 30, September 30, 2018 2017 2018 2017 Numerator: Net income $ 1,799 $ $ 1,318 $ Less distributed and undistributed income allocated to participating securities 71 31 Net Income Attributable to Common Shareholders 1,728 3,756 1,287 1,284 Denominator: Weighted average common shares (Basic) 4,344 4,303 4,386 4,283 Weighted average common shares including assumed conversions (Diluted) 4,344 4,303 4,386 4,283 Basic net income per share $ $ $ 0.29 $ Diluted net income per share $ $ $ 0.29 $ |
Major Customers and Vendors
Major Customers and Vendors | 9 Months Ended |
Sep. 30, 2018 | |
Major Customers and Vendors | |
Major Customers and Vendors | 10. Major Customers and Vendors: The Company had two major vendors that accounted for 25.1% and 14.8%, respectively, of total purchases during the nine months ended September 30, 2018 and 22.6% and 15.2% of total purchases for the three months ended September 30, 2018. The Company had two major vendors that accounted for 27.0% and 14.1%, respectively, of total purchases during the nine months ended September 30, 2017, and 27.9% and 14.1% of total purchases for the three months ended September 30, 2017. The Company had two major customers that accounted for 27.5% and 16.5%, respectively, of its net sales during the nine months ended September 30, 2018, and 37.3%, and 15.6% of total net sales for the three months ended September 30, 2018. These same customers accounted for 40.6% and 8.8% respectively, of total net accounts receivable as of September 30, 2018. Two customers accounted for 28.6% and 15.1% of total net accounts receivable as of December 31, 2017. The Company had two major customers that accounted for 20.3% and 17.9%, respectively, of its total net sales during the nine months ended September 30, 2017, and 20.8%, and 17.2% of total net sales for the three months ended September 30, 2017. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2018 | |
Income Taxes | |
Income Taxes | 11. Income Taxes: The Company has analyzed filing positions in all of the federal and state jurisdictions where it is required to file income tax returns, as well as all open tax years in these jurisdictions. The Company has recorded an accrual of $0.6 million, net of federal tax benefit, for potential liabilities for state income taxes in states which have enacted economic nexus statutes and the Company has not filed income tax returns. The Company’s policy is to recognize interest related to unrecognized tax benefits as interest expense and penalties as operating expenses. The Company believes that it has appropriate support for the income tax positions it takes and expects to take on its tax returns, and that its accruals for tax liabilities are adequate for all open years based on an assessment of many factors including past experience and interpretations of tax law applied to the facts of each matter. The TCJA was enacted on December 22, 2017 and introduced significant changes to the U.S. income tax law. Effective in 2018, the TCJA reduces U.S. statutory tax rates from 34% to 21%. Accordingly, we remeasured our deferred taxes as of December 31, 2017 to reflect the reduced rate that will apply in future periods when these deferred taxes are settled or realized. Due to the timing of the enactment and the complexity involved in applying the provisions of the TCJA we have made reasonable estimates of the effects and recorded provisional amounts in our financial statements as of September 30, 2018. As we collect and prepare necessary data and interpret the TCJA and any additional guidance issued by the Internal Revenue Service, and other standard-setting bodies, we may make adjustments to the provisional amounts. Those adjustments may materially impact our provision for income taxes and effective tax rate in the period in which adjustments are made. The accounting for the tax effects of the TCJA will be completed in 2018. The effective tax rate for the nine and three months ended September 30, 2018 was 35.4% and 24.2%, compared to 32.2% and 33.3%, for the same periods last year. The company’s effective tax rate for the nine months ended September 30, 2018 was impacted by limitations on the deductibility of executive compensation resulting from section 162(m) of the Internal Revenue Code, and adjustments to the accrual for state income taxes in states which have enacted economic nexus statutes. The Company recorded a $0.4 million tax benefit related to separation expenses during the nine months ended September 30, 2018 which were accounted for as a discrete item, resulting in a 18% effective tax benefit rate on that item. The Company also recorded an adjustment to its accrual for potential liabilities for state income taxes in states which have enacted economic nexus statutes of $0.2 during the nine months ended September 30, 2018. The effective tax rate for ordinary income was 24.2% for the three and nine month ended September 30, 2018. |
Stockholders' Equity and Stock
Stockholders' Equity and Stock Based Compensation | 9 Months Ended |
Sep. 30, 2018 | |
Stockholders' Equity and Stock Based Compensation | |
Stockholders' Equity and Stock Based Compensation | 12. Stockholders’ Equity and Stock Based Compensation: The 2012 Stock-Based Compensation Plan (the “2012 Plan”) authorizes the grant of Stock Options, Stock Units, Stock Appreciation Rights, Restricted Stock, Stock Bonuses and other equity-based awards. The total number of shares of Common Stock initially available for award under the 2012 Plan was 600,000 which was increased to 1,000,000 shares by shareholder approval at the Company’s 2018 Annual Meeting in June 2018. As of September 30, 2018, the number of shares of Common stock available for future award grants to employees, officers and directors under the 2012 Plan is 530,022. During 2017, the Company granted a total of 87,076 shares of Restricted Stock to officers and employees. These shares of Restricted Stock vest between twelve and twenty equal quarterly installments. In 2017, a total of 22,694 shares of Restricted Stock were forfeited as a result of officers and employees terminating employment with the Company. During 2018, the Company granted a total of 123,000 shares of Restricted Stock to officers, employees and directors. In 2018, a total of 7,176 shares of Restricted Stock were forfeited. These shares of Restricted Stock vest between one and twenty equal quarterly installments. A summary of nonvested shares of Restricted Stock awards outstanding under the Company’s the 2012 Plan as of September 30, 2018, and changes during the nine months then ended is as follows: Weighted Average Grant Date Shares Fair Value Nonvested shares at January 1, 2018 161,818 $ 17.26 Granted in 2018 123,000 14.97 Vested in 2018 (171,679) 16.65 Forfeited in 2018 (7,176) 15.40 Nonvested shares at September 30, 2018 105,963 $ 15.70 For the nine months ended September 30, 2018 and 2017, the Company recognized share-based compensation cost of $2.6 million and $1.0 million respectively. During the nine months ended September 30, 2018, $1.7 million of stock compensation expense, related to accelerated vesting of shares upon the resignation of the Company’s former Chief Executive Officer, was included in separation expense. All other share-based compensation is included in selling, general and administrative expenses. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2018 | |
Segment Information | |
Segment Information | 13. Segment Information: FASB ASC Topic 280, “Segment Reporting,” requires that public companies report profits and losses and certain other information on their “reportable operating segments” in their annual and interim financial statements. The internal organization used by the public company’s Chief Operating Decision Maker (CODM) to assess performance and allocate resources determines the basis for reportable operating segments. The Company’s CODM is the President, and Chief Executive Officer. The Company is organized into two reportable operating segments. The “Lifeboat Distribution” segment distributes technical software to corporate resellers, value added resellers (VARs), consultants and systems integrators worldwide. The “TechXtend” segment is a value-added reseller of software, hardware and services for corporations, government organizations and academic institutions in the United States and Canada. As permitted by FASB ASC Topic 280, the Company has utilized the aggregation criteria in combining its operations in Canada with the domestic segments as the Canadian operations provide the same products and services to similar clients and are considered together when the Company’s CODM decides how to allocate resources. Segment income is based on segment revenue less the respective segment’s cost of revenues as well as segment direct costs (including such items as payroll costs and payroll related costs, such as profit sharing, incentive awards and insurance) and excluding general and administrative expenses not attributed to an individual segment business unit. The Company only identifies accounts receivable and inventory by segment as shown below as “Selected Assets” by segment; it does not allocate its other assets, including capital expenditures by segment. The following segment reporting information of the Company is provided: (Unaudited) Nine months ended September 30, (Unaudited) Three months ended September 30, 2018 2017 2018 2017 Revenue: Lifeboat Distribution $ 119,308 $ 103,885 $ 44,145 $ 34,709 TechXtend 13,081 12,245 3,778 4,309 132,389 116,130 47,923 39,018 Gross Profit: Lifeboat Distribution 17,099 16,873 5,639 5,417 TechXtend 2,597 2,702 664 826 19,696 19,575 6,303 6,243 Direct Costs: Lifeboat Distribution 6,517 6,142 2,295 1,866 TechXtend 1,257 1,362 362 473 7,774 7,504 2,657 2,339 Segment Income Before Taxes: (1) Lifeboat Distribution 10,582 10,731 3,344 3,551 TechXtend 1,340 1,340 302 353 Segment Income Before Taxes 11,922 12,071 3,646 3,904 General and administrative 7,474 6,757 2,246 2,112 Separation expense 2,446 — — — Interest, net 744 466 296 145 Foreign currency translation 40 22 42 73 Income before taxes $ 2,786 $ 5,802 $ 1,738 $ 2,010 (1) Excludes general corporate expenses including separation, interest, and foreign currency translation expenses. (Unaudited) As of As of September 30, December 31, Selected Assets by Segment: 2018 2017 Lifeboat Distribution $ 72,570 $ 72,806 TechXtend 21,456 21,200 Segment Select Assets 94,026 94,006 Corporate Assets 9,084 8,279 Total Assets $ 103,110 $ 102,285 Disaggregation of revenue (Unaudited) Nine months ended (Unaudited) Three months ended September 30, September 30, September 30, September 30, 2018 2017 2018 2017 Lifeboat Distribution Hardware and software product $ $ $ $ Software - security & highly interdependent with support Maintenance, support & other services Net Sales $ $ $ $ TechXtend Hardware and software product $ $ 10,980 $ $ 3,997 Software - security & highly interdependent with support 443 128 Maintenance, support & other services 822 184 Net Sales $ $ $ $ |
Separation charges
Separation charges | 9 Months Ended |
Sep. 30, 2018 | |
Separation charges | |
Separation charges | 14. Separation charges: On May 11, 2018, the Company entered into a Separation and Release Agreement (the “Separation Agreement”) with Simon Nynens upon his resignation from the Company. The Separation Agreement supersedes and replaces the Employment Agreement, dated January 12, 2006, between Mr. Nynens and the Company. The Company recorded expenses of $2.4 million during the nine months ended September 30, 2018 related to the Separation Agreement consisting of $1.7 million for accelerated vesting of restricted stock grants and $0.8 million in other cash payments to be made over during the next twelve months. The compensation is subject to certain limitations on deductibility for income tax purposes under section 162(m) of the Internal Revenue Code (see note 11). |
Recently Issued Accounting St_2
Recently Issued Accounting Standards (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Recently issued accounting standards | |
Recently issued accounting standards | In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-09, Revenue from Contracts with Customers, superseding the previous revenue recognition requirements, along with most existing industry-specific guidance. In March, April, May and December 2016, the FASB issued additional updates to the new accounting standard which provide supplemental adoption guidance and clarifications. The guidance requires an entity to review contracts in five steps: 1) identify the contract, 2) identify performance obligations, 3) determine the transaction price, 4) allocate the transaction price, and 5) recognize revenue in order to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new standard also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenue arising from contracts with customers. The Company adopted the new standard on January 1, 2018, using the full retrospective method which required us to restate our historical financial information to reflect the adoption as of the earliest reporting period presented. The most significant impact of adopting the standard relates to the determination of whether the Company is acting as a principal or an agent in the sale of third party security software and software that is highly interdependent with support, as well as maintenance, support or other services. See Footnote 5 (Revenue Recognition). In February 2016, the FASB issued ASU 2016-02, Leases ("ASU 2016-02"). ASU 2016-02 supersedes the lease guidance under FASB ASC Topic 840, Leases, resulting in the creation of FASB ASC Topic 842, Leases. ASU 2016-02 requires a lessee to recognize in the statement of financial position a liability to make lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term. Leases will be classified as either finance or operating leases with classification affecting the pattern of expense recognition in the statement of earnings. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. Early adoption is permitted. The Company is currently assessing the potential impact of adopting ASU 2016-02 on its consolidated financial statements. It is expected that assets and liabilities will increase as a result of the adoption of this standard. In June 2016, the FASB issued Accounting Standards Update No. 2016-13, Financial Instruments - Credit Losses (Topic 326) ("ASU No. 2016-13"). ASU No. 2016-13 revises the methodology for measuring credit losses on financial instruments and the timing of when such losses are recorded. ASU No. 2016-13 is effective for the Company in the first quarter of 2020, with early adoption permitted, and is to be applied using a modified retrospective approach. The Company is currently evaluating the potential effects of adopting the provisions of ASU No. 2016-13 on its consolidated financial statements, particularly its recognition of allowances for accounts receivable. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (“ASU 2016-15”) which reduces diversity in practice in how certain transactions are classified in the statement of cash flows. The new standard is effective for the Company beginning with the first quarter of 2018. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements. In October 2016, the FASB issued ASU 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory.” This amendment is intended to improve accounting for the income tax consequences of intra-entity transfers of assets other than inventory. In accordance with this guidance, an entity should recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The ASU is effective for the Company beginning in fiscal 2019. Early adoption is permitted in fiscal 2018 with modified retrospective application. The Company is continuing to evaluate the impact of the adoption of this guidance on its consolidated financial statements. In May 2017, the FASB issued ASU No. 2017-09, “Scope of Modification Accounting”, to reduce diversity in practice and provide clarity regarding existing guidance in ASC 718, “Stock Compensation”. The amendments in this updated guidance clarify that an entity should apply modification accounting in response to a change in the terms and conditions of an entity’s share-based payment awards unless three newly specified criteria are met. This guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within that reporting period. The new guidance was effective for the Company on a prospective basis beginning on January 1, 2018 and did not impact the Company’s Consolidated Financial Statements as it is not the Company’s practice to change either the terms or conditions of stock-based payment awards once they are granted. In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815) – Targeted Improvements to Accounting for Hedging Activities, which improves the financial reporting of hedging relationships to better portray the economic results of an entity’s risk management activities in its financial statements. The amendments in this update also make certain targeted improvements to simplify the application of the hedge accounting guidance in current U.S. GAAP. ASU No. 2017-12 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years; the ASU allows for early adoption in any interim period after issuance of the update. The Company is currently assessing the impact this ASU will have on its consolidated financial statements. In February 2018, the FASB issued ASU 2018-02, “Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income” (“ASU 2018-02”), which permits the reclassification of stranded tax effects resulting from the Tax Cuts and Jobs Act (the “TCJA” or “U.S. tax reform”) from Accumulated other comprehensive income (loss) to Retained earnings. This new guidance is effective for the Company beginning on January 1, 2019 with early adoption permitted and must be applied either in the period of adoption or retrospectively to periods in which the effects of the TCJA are recognized. The Company is continuing to evaluate the impact of the adoption of this guidance on its consolidated financial statements. In March 2018, the FASB issued ASU 2018-05, “Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 (SEC Update), Income Taxes (Topic 740)”. The Company completed its Federal and State income tax filings for 2017 with no material change to amounts previously reported. In June 2018, the FASB issued Accounting Standards Update (“ASU”) No. 2018-07, “Compensation — Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting,” which aligns the measurement and classification guidance for share-based payments to nonemployees with that for employees, with certain exceptions. It expands the scope of ASC 718 to include share-based payments granted to nonemployees in exchange for goods or services used or consumed in the entity’s own operations and supersedes the guidance in ASC 505-50. The ASU retains the existing cost attribution guidance, which requires entities to recognize compensation cost for nonemployee awards in the same period and in the same manner (i.e., capitalize or expense) they would if they paid cash for the goods or services, but it moves the guidance to ASC 718. The guidance also allows nonpublic entities to account for nonemployee awards using certain practical expedients that are already available for employee awards, but the same accounting policies must be used for awards to both employees and nonemployees. ASU 2018-07 is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact of adopting this guidance. In July 2018, the FASB issued ASU 2018-09 – Codification Improvements, which facilitates amendments to a variety of topics to clarify, correct errors in, or make minor improvements to the accounting standards codification. The effective date of the standard is dependent on the facts and circumstances of each amendment. Some amendments do not require transition guidance and will be effective upon the issuance of this standard. A majority of the amendments in ASU 2018-09 will be effective in annual periods beginning after December 15, 2018. We will be required to adopt this standard in the first quarter of fiscal 2019. This standard is not expected to have a material impact on our consolidated financial statements and related disclosures. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Summary of disaggregation of revenue according to revenue type | Net sales (Unaudited) Nine months ended (Unaudited) Three months ended September 30, September 30, September 30, September 30, 2018 2017 2018 2017 Hardware and software product $ $ $ $ 35,556 Software - security & highly interdependent with support 1,343 Maintenance, support & other services 2,119 Net sales $ $ $ $ 39,018 |
ASU 2014-09 | |
Schedule of impact on adoption of standard | Nine months ended September 30, 2017 Three months ended September 30, 2017 As Impact As As Impact As Reported of Adoption Adjusted Reported of Adoption Adjusted Total Net sales $ 322,423 $ (206,293) $ 116,130 $ 106,646 $ (67,628) $ 39,018 Cost of sales 302,848 (206,293) 96,555 100,403 (67,628) 32,775 Gross profit $ 19,575 $ — $ 19,575 $ 6,243 $ — $ 6,243 Nine months ended September 30, 2017 Three months ended September 30, 2017 As Impact As As Impact As Reported of Adoption Adjusted Reported of Adoption Adjusted Lifeboat Distribution Segment: Net sales $ 300,344 $ (196,459) $ 103,885 $ 100,188 $ (65,479) $ 34,709 Cost of sales 283,471 (196,459) 87,012 94,771 (65,479) 29,292 Gross profit $ 16,873 $ — $ 16,873 $ 5,417 $ — $ 5,417 TechXtend Segment: Net sales $ 22,079 $ (9,834) $ 12,245 $ 6,458 $ (2,149) $ 4,309 Cost of sales 19,377 (9,834) 9,543 5,632 (2,149) 3,483 Gross profit $ 2,702 $ — $ 2,702 $ 826 $ — $ 826 |
Balance Sheet Detail (Tables)
Balance Sheet Detail (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Balance Sheet Detail | |
Schedule of equipment and leasehold improvements, net | September 30, (Unaudited) December 31, 2018 2017 Equipment $ 2,121 $ 1,988 Leasehold improvements 1,334 1,335 3,455 3,323 Less accumulated depreciation and amortization (1,773) (1,495) $ 1,682 $ 1,828 |
Schedule of accounts receivable - long term, net | September 30, (Unaudited) December 31, 2018 2017 Total amount due from customer $ 14,388 $ 20,886 Less discount (545) (912) Less current portion included in accounts receivable (9,308) (12,537) $ 4,535 $ 7,437 |
Schedule of accounts payable and accrued expenses | September 30, (Unaudited) December 31, 2018 2017 Trade accounts payable $ 60,035 $ 58,910 Accrued expenses 2,640 3,882 $ 62,675 $ 62,792 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share | |
Schedule of reconciliation of the numerators and denominators for computations of the basic and diluted per share | (Unaudited ) (Unaudited ) Nine months ended Three months ended September 30, September 30, 2018 2017 2018 2017 Numerator: Net income $ 1,799 $ $ 1,318 $ Less distributed and undistributed income allocated to participating securities 71 31 Net Income Attributable to Common Shareholders 1,728 3,756 1,287 1,284 Denominator: Weighted average common shares (Basic) 4,344 4,303 4,386 4,283 Weighted average common shares including assumed conversions (Diluted) 4,344 4,303 4,386 4,283 Basic net income per share $ $ $ 0.29 $ Diluted net income per share $ $ $ 0.29 $ |
Stockholders' Equity and Stoc_2
Stockholders' Equity and Stock Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Stockholders' Equity and Stock Based Compensation | |
Summary of nonvested shares of Restricted Stock awards outstanding and the changes during the period | Weighted Average Grant Date Shares Fair Value Nonvested shares at January 1, 2018 161,818 $ 17.26 Granted in 2018 123,000 14.97 Vested in 2018 (171,679) 16.65 Forfeited in 2018 (7,176) 15.40 Nonvested shares at September 30, 2018 105,963 $ 15.70 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Segment Information | |
Schedule of segment reporting information | The following segment reporting information of the Company is provided: (Unaudited) Nine months ended September 30, (Unaudited) Three months ended September 30, 2018 2017 2018 2017 Revenue: Lifeboat Distribution $ 119,308 $ 103,885 $ 44,145 $ 34,709 TechXtend 13,081 12,245 3,778 4,309 132,389 116,130 47,923 39,018 Gross Profit: Lifeboat Distribution 17,099 16,873 5,639 5,417 TechXtend 2,597 2,702 664 826 19,696 19,575 6,303 6,243 Direct Costs: Lifeboat Distribution 6,517 6,142 2,295 1,866 TechXtend 1,257 1,362 362 473 7,774 7,504 2,657 2,339 Segment Income Before Taxes: (1) Lifeboat Distribution 10,582 10,731 3,344 3,551 TechXtend 1,340 1,340 302 353 Segment Income Before Taxes 11,922 12,071 3,646 3,904 General and administrative 7,474 6,757 2,246 2,112 Separation expense 2,446 — — — Interest, net 744 466 296 145 Foreign currency translation 40 22 42 73 Income before taxes $ 2,786 $ 5,802 $ 1,738 $ 2,010 (1) Excludes general corporate expenses including separation, interest, and foreign currency translation expenses. (Unaudited) As of As of September 30, December 31, Selected Assets by Segment: 2018 2017 Lifeboat Distribution $ 72,570 $ 72,806 TechXtend 21,456 21,200 Segment Select Assets 94,026 94,006 Corporate Assets 9,084 8,279 Total Assets $ 103,110 $ 102,285 |
Summary of disaggregation of segment revenue | Disaggregation of revenue (Unaudited) Nine months ended (Unaudited) Three months ended September 30, September 30, September 30, September 30, 2018 2017 2018 2017 Lifeboat Distribution Hardware and software product $ $ $ $ Software - security & highly interdependent with support Maintenance, support & other services Net Sales $ $ $ $ TechXtend Hardware and software product $ $ 10,980 $ $ 3,997 Software - security & highly interdependent with support 443 128 Maintenance, support & other services 822 184 Net Sales $ $ $ $ |
Foreign Currency Translation (D
Foreign Currency Translation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenue from external customers | ||||
Net sales | $ 47,923 | $ 39,018 | $ 132,389 | $ 116,130 |
Foreign operations | ||||
Revenue from external customers | ||||
Net sales | $ 4,000 | $ 4,600 | $ 13,900 | $ 14,100 |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Net Sales | $ 47,923,000 | $ 39,018,000 | $ 132,389,000 | $ 116,130,000 |
Cost of sales | 41,620,000 | 32,775,000 | 112,693,000 | 96,555,000 |
Gross profit | 6,303,000 | 6,243,000 | 19,696,000 | 19,575,000 |
ASU 2014-09 | ||||
Impact of adoption | 0 | 0 | ||
ASU 2014-09 | As Reported | ||||
Net Sales | 106,646,000 | 322,423,000 | ||
Cost of sales | 100,403,000 | 302,848,000 | ||
Gross profit | 6,243,000 | 19,575,000 | ||
ASU 2014-09 | Impact of Adoption | ||||
Net Sales | (67,628,000) | (206,293,000) | ||
Cost of sales | (67,628,000) | (206,293,000) | ||
Lifeboat Distribution | ||||
Net Sales | 44,145,000 | 34,709,000 | 119,308,000 | 103,885,000 |
Cost of sales | 29,292,000 | 87,012,000 | ||
Gross profit | 5,639,000 | 5,417,000 | 17,099,000 | 16,873,000 |
Lifeboat Distribution | ASU 2014-09 | As Reported | ||||
Net Sales | 100,188,000 | 300,344,000 | ||
Cost of sales | 94,771,000 | 283,471,000 | ||
Gross profit | 5,417,000 | 16,873,000 | ||
Lifeboat Distribution | ASU 2014-09 | Impact of Adoption | ||||
Net Sales | (65,479,000) | (196,459,000) | ||
Cost of sales | (65,479,000) | (196,459,000) | ||
TechXtend | ||||
Net Sales | 3,778,000 | 4,309,000 | 13,081,000 | 12,245,000 |
Cost of sales | 3,483,000 | 9,543,000 | ||
Gross profit | $ 664,000 | 826,000 | $ 2,597,000 | 2,702,000 |
TechXtend | ASU 2014-09 | As Reported | ||||
Net Sales | 6,458,000 | 22,079,000 | ||
Cost of sales | 5,632,000 | 19,377,000 | ||
Gross profit | 826,000 | 2,702,000 | ||
TechXtend | ASU 2014-09 | Impact of Adoption | ||||
Net Sales | (2,149,000) | (9,834,000) | ||
Cost of sales | $ (2,149,000) | $ (9,834,000) |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of Revenue (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Disaggregation of Revenue [Line Items] | ||||
Net Sales | $ 47,923,000 | $ 39,018,000 | $ 132,389,000 | $ 116,130,000 |
Deferred revenue balances | 0 | $ 0 | ||
Minimum | ||||
Disaggregation of Revenue [Line Items] | ||||
Payment terms on invoiced amount | 30 days | |||
Maximum | ||||
Disaggregation of Revenue [Line Items] | ||||
Payment period | 3 years | |||
Payment terms on invoiced amount | 75 days | |||
Hardware and software product | ||||
Disaggregation of Revenue [Line Items] | ||||
Net Sales | 44,100,000 | 35,556,000 | $ 120,073,000 | 104,417,000 |
Software - security and highly interdependent with support | ||||
Disaggregation of Revenue [Line Items] | ||||
Net Sales | 1,433,000 | 1,343,000 | 5,029,000 | 4,357,000 |
Maintenance, support and other services revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Net Sales | $ 2,390,000 | $ 2,119,000 | $ 7,287,000 | $ 7,356,000 |
Balance Sheet Detail (Details)
Balance Sheet Detail (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Equipment and leasehold improvements | |||
Equipment and leasehold improvements, Gross | $ 3,455 | $ 3,323 | |
Less accumulated depreciation and amortization | (1,773) | (1,495) | |
Equipment and leasehold improvements, Net | 1,682 | 1,828 | |
Depreciation and amortization expense | 358 | $ 359 | |
Equipment | |||
Equipment and leasehold improvements | |||
Equipment and leasehold improvements, Gross | 2,121 | 1,988 | |
Leasehold improvements | |||
Equipment and leasehold improvements | |||
Equipment and leasehold improvements, Gross | 1,334 | $ 1,335 | |
Selling, general and administrative expenses | |||
Equipment and leasehold improvements | |||
Depreciation and amortization expense | $ 400 | $ 400 |
Balance Sheet Detail - Accounts
Balance Sheet Detail - Accounts receivable - long term, net (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Accounts receivable - long term | ||
Total amount due from customer | $ 14,388 | $ 20,886 |
Less discount | (545) | (912) |
Less current portion included in accounts receivable, current | (9,308) | (12,537) |
Total of accounts receivable, long term, net | 4,535 | $ 7,437 |
Accounts receivable sold to financial institution | $ 6,500 |
Balance Sheet Detail - Accoun_2
Balance Sheet Detail - Accounts payable (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Accounts payable and accrued expenses | ||
Trade accounts payable | $ 60,035 | $ 58,910 |
Accrued expenses | 2,640 | 3,882 |
Accounts payable and accrued expenses | $ 62,675 | $ 62,792 |
Credit Facility (Details)
Credit Facility (Details) - Credit Facility | Nov. 15, 2017USD ($) | Sep. 30, 2018USD ($) | Dec. 31, 2017USD ($) |
Credit Facility | |||
Maximum borrowing capacity | $ 20,000 | ||
Debt Service Coverage Ratio, minimum | 2 | ||
Leverage Ratio, maximum | 2.5 | ||
Collateral Coverage Ratio, minimum | 1.5 | ||
Borrowings outstanding | $ 0 | $ 0 | |
Index | |||
Credit Facility | |||
Interest rate | 2.26% | ||
Interest rate margin (as a percent) | 1.50% |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Numerator: | ||||
Net income | $ 1,318 | $ 1,341 | $ 1,799 | $ 3,935 |
Less distributed and undistributed income allocated to participating securities | 31 | 57 | 71 | 179 |
Net Income Attributable to Common Shareholders | $ 1,287 | $ 1,284 | $ 1,728 | $ 3,756 |
Denominator: | ||||
Weighted average common shares - Basic | 4,386 | 4,283 | 4,344 | 4,303 |
Weighted average common shares - Diluted | 4,386 | 4,283 | 4,344 | 4,303 |
Income per common share-Basic | $ 0.29 | $ 0.30 | $ 0.40 | $ 0.87 |
Income per common share-Diluted | $ 0.29 | $ 0.30 | $ 0.40 | $ 0.87 |
Major Customers and Vendors (De
Major Customers and Vendors (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018customeritem | Sep. 30, 2017customeritem | Sep. 30, 2018customeritem | Sep. 30, 2017customeritem | Dec. 31, 2017customer | |
Purchases | Vendor concentration risk | |||||
Significant Customers and Vendors | |||||
Number of vendors | item | 2 | 2 | 2 | 2 | |
Purchases | Vendor concentration risk | Major vendor one | |||||
Significant Customers and Vendors | |||||
Percentage of concentration risk | 22.60% | 27.90% | 25.10% | 27.00% | |
Purchases | Vendor concentration risk | Major vendor two | |||||
Significant Customers and Vendors | |||||
Percentage of concentration risk | 15.20% | 14.10% | 14.80% | 14.10% | |
Net sales | Customer concentration risk | |||||
Significant Customers and Vendors | |||||
Number of customers | 2 | 2 | 2 | 2 | |
Net sales | Customer one | Customer concentration risk | |||||
Significant Customers and Vendors | |||||
Percentage of concentration risk | 37.30% | 20.80% | 27.50% | 20.30% | |
Net sales | Customer two | Customer concentration risk | |||||
Significant Customers and Vendors | |||||
Percentage of concentration risk | 15.60% | 17.20% | 16.50% | 17.90% | |
Net accounts receivable | Customer concentration risk | |||||
Significant Customers and Vendors | |||||
Number of customers | 2 | 2 | |||
Net accounts receivable | Customer one | Customer concentration risk | |||||
Significant Customers and Vendors | |||||
Percentage of concentration risk | 40.60% | 28.60% | |||
Net accounts receivable | Customer two | Customer concentration risk | |||||
Significant Customers and Vendors | |||||
Percentage of concentration risk | 8.80% | 15.10% |
Income Taxes - (Details)
Income Taxes - (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Taxes | |||||
Accrual of state income taxes, net of federal tax benefit | $ 0.6 | $ 0.6 | |||
Tax liability increase | $ 0.2 | $ 0.2 | |||
Effective tax rate (as a percent) | 24.20% | 33.30% | 35.40% | 32.20% | |
U.S. statutory tax rate (as a percent) | 34.00% | 21.00% | |||
Tax benefit, separation expenses | $ 0.4 | ||||
Effective tax rate benefit, separation expenses | 18.00% | ||||
Effective tax rate, ordinary income (as a percent) | 24.20% | 24.20% |
Stockholders' Equity and Stoc_3
Stockholders' Equity and Stock Based Compensation - Vesting (Details) - shares | Sep. 30, 2018 | Jun. 30, 2018 | May 31, 2018 |
Stockholders' Equity and Stock Based Compensation | |||
Number of shares of common stock initially available for award | 1,000,000 | 600,000 | |
Options reserved for future issuance (in shares) | 530,022 |
Stockholders' Equity and Stoc_4
Stockholders' Equity and Stock Based Compensation - Nonvested (Details) $ / shares in Units, $ in Millions | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2018USD ($)installment$ / sharesshares | Sep. 30, 2017USD ($) | Dec. 31, 2017installment$ / sharesshares | |
Selling, general and administrative expenses | |||
Weighted Average Grant Date Fair Value | |||
Share-based compensation cost | $ | $ 2.6 | $ 1 | |
Separation expense | Former Chief Executive Officer | |||
Weighted Average Grant Date Fair Value | |||
Share-based compensation cost | $ | $ 1.7 | ||
Restricted stock | |||
Shares | |||
Nonvested shares at the beginning of the period | shares | 161,818 | ||
Granted (in shares) | shares | 123,000 | 87,076 | |
Vested (in shares) | shares | (171,679) | ||
Forfeited (in shares) | shares | (7,176) | (22,694) | |
Nonvested shares at the end of the period | shares | 105,963 | 161,818 | |
Weighted Average Grant Date Fair Value | |||
Nonvested shares at the beginning of period (in dollars per share) | $ / shares | $ 17.26 | ||
Granted (in dollars per share) | $ / shares | 14.97 | ||
Vested (in dollars per share) | $ / shares | 16.65 | ||
Forfeited (in dollars per share) | $ / shares | 15.40 | ||
Nonvested shares at the end of period (in dollars per share) | $ / shares | $ 15.70 | $ 17.26 | |
Unrecognized compensation cost (in dollars) | $ | $ 1.6 | ||
Weighted average period for recognition of unrecognized compensation cost | 3 years 2 months 12 days | ||
Restricted stock | Maximum | |||
Shares | |||
Number of equal quarterly installments for vesting of awards | installment | 20 | 20 | |
Restricted stock | Minimum | |||
Shares | |||
Number of equal quarterly installments for vesting of awards | installment | 1 | 12 |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)item | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($) | |
Segment reporting information | |||||
Number of reportable operating segments | item | 2 | ||||
Revenue | $ 47,923 | $ 39,018 | $ 132,389 | $ 116,130 | |
Gross Profit | 6,303 | 6,243 | 19,696 | 19,575 | |
Direct Costs | 2,657 | 2,339 | 7,774 | 7,504 | |
Segment Income Before Taxes | 3,646 | 3,904 | 11,922 | 12,071 | |
General and administrative | 2,246 | 2,112 | 7,474 | 6,757 | |
Separation expenses | 2,446 | ||||
Interest, net | 296 | 145 | 744 | 466 | |
Foreign currency translation | 42 | 73 | 40 | 22 | |
Income before provision for income taxes | 1,738 | 2,010 | 2,786 | 5,802 | |
Total Assets | 103,110 | 103,110 | $ 102,285 | ||
Segment Total | |||||
Segment reporting information | |||||
Total Assets | 94,026 | 94,026 | 94,006 | ||
Corporate Assets | |||||
Segment reporting information | |||||
Total Assets | 9,084 | 9,084 | 8,279 | ||
Lifeboat Distribution | |||||
Segment reporting information | |||||
Revenue | 44,145 | 34,709 | 119,308 | 103,885 | |
Gross Profit | 5,639 | 5,417 | 17,099 | 16,873 | |
Direct Costs | 2,295 | 1,866 | 6,517 | 6,142 | |
Segment Income Before Taxes | 3,344 | 3,551 | 10,582 | 10,731 | |
Total Assets | 72,570 | 72,570 | 72,806 | ||
TechXtend | |||||
Segment reporting information | |||||
Revenue | 3,778 | 4,309 | 13,081 | 12,245 | |
Gross Profit | 664 | 826 | 2,597 | 2,702 | |
Direct Costs | 362 | 473 | 1,257 | 1,362 | |
Segment Income Before Taxes | 302 | $ 353 | 1,340 | $ 1,340 | |
Total Assets | $ 21,456 | $ 21,456 | $ 21,200 |
Segment Information - Disaggreg
Segment Information - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Disaggregation of Revenue [Line Items] | ||||
Net Sales | $ 47,923 | $ 39,018 | $ 132,389 | $ 116,130 |
Lifeboat Distribution | ||||
Disaggregation of Revenue [Line Items] | ||||
Net Sales | 44,145 | 34,709 | 119,308 | 103,885 |
TechXtend | ||||
Disaggregation of Revenue [Line Items] | ||||
Net Sales | 3,778 | 4,309 | 13,081 | 12,245 |
Hardware and software product | ||||
Disaggregation of Revenue [Line Items] | ||||
Net Sales | 44,100 | 35,556 | 120,073 | 104,417 |
Hardware and software product | Lifeboat Distribution | ||||
Disaggregation of Revenue [Line Items] | ||||
Net Sales | 40,617 | 31,559 | 108,213 | 93,437 |
Hardware and software product | TechXtend | ||||
Disaggregation of Revenue [Line Items] | ||||
Net Sales | 3,483 | 3,997 | 11,860 | 10,980 |
Software - security and highly interdependent with support | ||||
Disaggregation of Revenue [Line Items] | ||||
Net Sales | 1,433 | 1,343 | 5,029 | 4,357 |
Software - security and highly interdependent with support | Lifeboat Distribution | ||||
Disaggregation of Revenue [Line Items] | ||||
Net Sales | 1,358 | 1,215 | 4,607 | 3,914 |
Software - security and highly interdependent with support | TechXtend | ||||
Disaggregation of Revenue [Line Items] | ||||
Net Sales | 75 | 128 | 422 | 443 |
Maintenance, support and other services revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Net Sales | 2,390 | 2,119 | 7,287 | 7,356 |
Maintenance, support and other services revenue | Lifeboat Distribution | ||||
Disaggregation of Revenue [Line Items] | ||||
Net Sales | 2,170 | 1,935 | 6,488 | 6,534 |
Maintenance, support and other services revenue | TechXtend | ||||
Disaggregation of Revenue [Line Items] | ||||
Net Sales | $ 220 | $ 184 | $ 799 | $ 822 |
Separation charges (Details)
Separation charges (Details) - USD ($) $ in Thousands | May 11, 2018 | Sep. 30, 2018 | Sep. 30, 2018 |
Restricted stock | |||
Restructuring Cost and Reserve [Line Items] | |||
Fully vested (in shares) | 171,679 | ||
Unrecognized stock compensation | $ 1,600 | $ 1,600 | |
Employee Severance | |||
Restructuring Cost and Reserve [Line Items] | |||
Cash payment payable | $ 700 | ||
Period for consecutive equal monthly installments | 12 months | ||
Lump sum cash payment | $ 30 | ||
Period of lump sum payment | 30 days | ||
Payment of accrued vacation | $ 40 | ||
Restructuring expenses | 2,400 | ||
Accelerated vesting of restricted stock grants | 1,700 | ||
Cash payments to be paid in the next 12 months | $ 800 | $ 800 | |
Separation payment period | 12 months | ||
Employee Severance | Restricted stock | |||
Restructuring Cost and Reserve [Line Items] | |||
Fully vested (in shares) | 109,084 |