Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Mar. 01, 2022 | Jun. 30, 2021 | |
Document and Entity Information | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2021 | ||
Entity Registrant Name | Wayside Technology Group, Inc. | ||
Entity File Number | 000-26408 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 13-3136104 | ||
Entity Address, Address Line One | 4 Industrial Way West, Suite 300 | ||
Entity Address, City or Town | Eatontown | ||
Entity Address, State or Province | NJ | ||
Entity Address, Postal Zip Code | 07724 | ||
City Area Code | 732 | ||
Local Phone Number | 389-0932 | ||
Title of 12(b) Security | Common Stock, par value $0.01 per share | ||
Trading Symbol | WSTG | ||
Security Exchange Name | NASDAQ | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Central Index Key | 0000945983 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Public Float | $ 100.3 | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Common Stock, Shares Outstanding | 4,450,062 | ||
Auditor Name | BDO USA, LLP | ||
Auditor Firm ID | 243 | ||
Auditor Location | Woodbridge, New Jersey | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 29,272 | $ 29,348 |
Accounts receivable, net of allowance for doubtful accounts of $881 and $892, respectively | 122,502 | 93,821 |
Inventory, net | 2,022 | 4,936 |
Vendor prepayments and advances | 661 | 1,235 |
Prepaid expenses and other current assets | 4,871 | 3,837 |
Total current assets | 159,328 | 133,177 |
Equipment and leasehold improvements, net | 1,932 | 2,308 |
Goodwill | 17,188 | 16,816 |
Other intangibles, net | 9,950 | 10,625 |
Right-of-use assets, net | 1,628 | 1,933 |
Accounts receivable-long-term, net | 78 | 304 |
Other assets | 459 | 257 |
Deferred income tax assets | 189 | 113 |
Total assets | 190,752 | 165,533 |
Current liabilities: | ||
Accounts payable and accrued expenses | 134,271 | 116,692 |
Lease liability, current portion | 475 | 490 |
Total current liabilities | 134,746 | 117,182 |
Lease liability, net of current portion | 1,810 | 2,167 |
Deferred income tax liabilities | 1,780 | 1,467 |
Total liabilities | 138,336 | 120,816 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Common stock, $.01 par value; 10,000,000 shares authorized; 5,284,500 shares issued: 4,424,672 and 4,361,997 shares outstanding, respectively | 53 | 53 |
Additional paid-in capital | 32,087 | 31,962 |
Treasury stock, at cost, 859,828 and 922,503 shares, respectively | (13,870) | (14,747) |
Retained earnings | 34,396 | 28,191 |
Accumulated other comprehensive loss | (250) | (742) |
Total stockholders' equity | 52,416 | 44,717 |
Total liabilities and stockholders' equity | $ 190,752 | $ 165,533 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Condensed Consolidated Balance Sheets | ||
Accounts receivable, allowances (in dollars) | $ 881 | $ 892 |
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 | 4,424,672 | 4,361,997 |
Treasury stock, shares | 859,828 | 922,503 |
Consolidated Statements of Earn
Consolidated Statements of Earnings - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Condensed Consolidated Statements of Earnings | ||
Net sales | $ 282,582 | $ 251,568 |
Cost of sales | 236,866 | 218,528 |
Gross profit | 45,716 | 33,040 |
Selling, general, and administrative expenses | 32,136 | 23,929 |
Legal and financial advisory expenses, net - unsolicited bid and related matters | 1,586 | |
Acquisition related costs | 0 | 1,518 |
Amortization and depreciation expense | 1,529 | 704 |
Income from operations | 12,051 | 5,303 |
Other income: | ||
Interest, net | 359 | 121 |
Foreign currency transaction (loss) gain | (46) | 796 |
Income before provision for income taxes | 12,364 | 6,220 |
Provision for income taxes | 3,166 | 1,746 |
Net income | $ 9,198 | $ 4,474 |
Income per common share-Basic | $ 2.09 | $ 1.01 |
Income per common share-Diluted | $ 2.09 | $ 1.01 |
Weighted average common shares outstanding - Basic (in shares) | 4,272 | 4,288 |
Weighted average common shares outstanding - Diluted (in shares) | 4,272 | 4,288 |
Dividends paid per common share (in dollars per share) | $ 0.68 | $ 0.68 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Condensed Consolidated Statements of Comprehensive Income | ||
Net income | $ 9,198 | $ 4,474 |
Other comprehensive income: | ||
Foreign currency translation adjustments | 492 | 388 |
Other comprehensive income | 492 | 388 |
Comprehensive income | $ 9,690 | $ 4,862 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Common Stock | Additional Paid-In Capital | Treasury | Retained Earnings | Accumulated Other Comprehensive (Loss) Income | Total |
Balance at Dec. 31, 2019 | $ 53 | $ 32,874 | $ (13,256) | $ 26,715 | $ (1,130) | $ 45,256 |
Balance (in shares) at Dec. 31, 2019 | 5,284,500 | |||||
Balance (in shares) at Dec. 31, 2019 | 778,807 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 4,474 | 4,474 | ||||
Translation adjustment | 388 | 388 | ||||
Dividends paid | (2,998) | (2,998) | ||||
Share-based compensation expense | 1,278 | 1,278 | ||||
Restricted stock grants (net of forfeitures) | (2,190) | $ 2,190 | ||||
Restricted stock grants (net of forfeitures) (in shares) | (129,483) | |||||
Treasury shares repurchased | $ (3,681) | (3,681) | ||||
Treasury shares repurchased (in shares) | 273,179 | |||||
Balance at Dec. 31, 2020 | $ 53 | 31,962 | $ (14,747) | 28,191 | (742) | $ 44,717 |
Balance (in shares) at Dec. 31, 2020 | 5,284,500 | 5,284,500 | ||||
Balance (in shares) at Dec. 31, 2020 | 922,503 | 922,503 | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 9,198 | $ 9,198 | ||||
Translation adjustment | 492 | 492 | ||||
Dividends paid | (2,993) | (2,993) | ||||
Share-based compensation expense | 1,546 | 1,546 | ||||
Restricted stock grants (net of forfeitures) | (1,421) | $ 1,421 | ||||
Restricted stock grants (net of forfeitures) (in shares) | (83,963) | |||||
Treasury shares repurchased | $ (544) | (544) | ||||
Treasury shares repurchased (in shares) | 21,288 | |||||
Balance at Dec. 31, 2021 | $ 53 | $ 32,087 | $ (13,870) | $ 34,396 | $ (250) | $ 52,416 |
Balance (in shares) at Dec. 31, 2021 | 5,284,500 | 5,284,500 | ||||
Balance (in shares) at Dec. 31, 2021 | 859,828 | 859,828 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities | ||
Net income | $ 9,198 | $ 4,474 |
Adjustments to reconcile net income to net cash and cash equivalents provided by operating activities: | ||
Depreciation and amortization expense | 1,534 | 713 |
Provision for doubtful accounts | 26 | 130 |
Deferred income tax expense | 228 | (170) |
Share-based compensation expense | 1,546 | 1,278 |
Amortization of discount on accounts receivable | (55) | (164) |
Amortization of right-of-use assets | 468 | 392 |
Change in fair value of contingent earn-out consideration | 47 | |
Changes in operating assets and liabilities, net of acquisitions: | ||
Accounts receivable | (28,577) | 26,727 |
Inventory | 2,914 | (1,997) |
Prepaid expenses and other current assets | (1,004) | (739) |
Vendor prepayments | 574 | (766) |
Accounts payable and accrued expenses | 18,616 | 8,678 |
Lease liability, net | (534) | (448) |
Other assets and liabilities | (222) | (186) |
Net cash and cash equivalents provided by operating activities | 4,712 | 37,969 |
Cash flows from investing activities | ||
Purchase of equipment and leasehold improvements | (258) | (23) |
Payment for acquisitions, net of cash acquired | (16,782) | |
Net cash and cash equivalents used in investing activities | (258) | (16,805) |
Cash flows from financing activities | ||
Purchase of treasury stock | (544) | (3,681) |
Borrowings under revolving credit facility | 6,800 | |
Repayments of borrowings under revolving credit facility | (6,800) | |
Dividends paid | (2,993) | (2,998) |
Contingent consideration | (862) | |
Payments of deferred financing costs | (61) | |
Net cash and cash equivalents used in financing activities | (4,399) | (6,740) |
Effect of foreign exchange rate on cash and cash equivalents | (131) | (60) |
Net (decrease) increase in cash and cash equivalents | (76) | 14,364 |
Cash and cash equivalents at beginning of period | 29,348 | 14,984 |
Cash and cash equivalents at end of period | 29,272 | 29,348 |
Supplementary disclosure of cash flow information: | ||
Income taxes paid | 2,700 | 2,425 |
Interest paid | $ 43 | $ 49 |
Description of Business
Description of Business | 12 Months Ended |
Dec. 31, 2021 | |
Description of Business | |
Description of Business | Note 1. Description of Business Wayside Technology Group, Inc. and Subsidiaries (the “Company”), was incorporated in Delaware in 1982. The Company distributes technology products developed by others to resellers who in turn sell to end customers worldwide. The Company also is a cloud solutions provider and value-added reseller of software, hardware and services to customers worldwide. The Company also operates in Canada, the United Kingdom and Europe. The Company offers an extensive line of products from leading software vendors and tools for virtualization/cloud computing, security, networking, storage & infrastructure management, application lifecycle management and other technically sophisticated domains as well as computer hardware. The Company is organized into two reportable operating segments. The “Distribution” segment distributes technical software to corporate resellers, value added resellers (VARs), consultants and systems integrators worldwide under the name “Climb Channel Solutions”. The “Solutions” segment is a cloud solutions provider and value-added reseller of software, hardware and services to customers worldwide under the names “TechXtend” and “Grey Matter”. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | Note 2. Summary of Significant Accounting Policies Principles of Consolidation and Operations The consolidated financial statements include the accounts of Wayside Technology Group, Inc. and its wholly owned . All intercompany transactions and balances have been eliminated. Business Combinations The Company accounts for business combinations using the acquisition method of accounting, which allocates the fair value of the purchase consideration to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values. The excess of the purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair values of assets acquired and liabilities assumed, management makes significant estimates and assumptions. The Company may utilize third-party valuation specialists to assist the Company in the allocation. Initial purchase price allocations are subject to revision within the measurement period, not to exceed one year from the date of acquisition. Acquisition-related expenses and transaction costs associated with business combinations are expensed as incurred. Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) requires management to make extensive use of certain estimates and assumptions which affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. The significant areas of estimation include but are not limited to accounting for allowance for doubtful accounts, sales returns, allocation of revenue in multiple deliverable arrangements, principal vs. agent considerations, discount rates applicable to long term receivables, inventory obsolescence, income taxes, depreciation, amortization of intangible assets, contingencies and stock-based compensation. Actual results could differ from those estimates. Net Income Per Common Share Our basic and diluted earnings per share are computed using the two-class method. The two-class method is an earnings allocation method that determines net income per share for each class of common stock 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: Year ended December 31, 2021 2020 Numerator: Net income $ 9,198 $ 4,474 Less distributed and undistributed income allocated to participating securities 269 130 Net income attributable to common shareholders 8,929 4,344 Denominator: Weighted average common shares (Basic) 4,272 4,288 Weighted average common shares including assumed conversions (Diluted) 4,272 4,288 Basic net income per share $ 2.09 $ 1.01 Diluted net income per share $ 2.09 $ 1.01 Cash Equivalents The Company considers all liquid short-term investments with maturities of 90 days or less when purchased to be cash equivalents. Accounts Receivable Accounts receivable principally represents amounts collectible from our customers. The Company performs ongoing credit evaluations of its customers but generally does not require collateral to support any outstanding obligation. From time to time, we sell accounts receivable to a financial institution on a non-recourse basis for cash, less a discount. The Company has no significant retained interests or servicing liabilities related to the accounts receivable sold. Proceeds from the sale of receivables approximated their discounted book value and were included in operating cash flows on the Consolidated Statements of Cash Flows. Allowances for Accounts Receivable We provide an allowance for doubtful accounts related to accounts receivable for estimated losses resulting from the inability of our customers to make required payments. We take into consideration the overall quality and aging of the receivable portfolio along with specifically identified customer risks. If actual customer payment performance were to deteriorate to an extent not expected, additional allowances may be required. At the time of sale, we also record an estimate for sales returns based on historical experience, which is included in accounts payable and accrued expenses on the Consolidated Balance Sheets. If actual sales returns are greater than estimated by management, additional expense may be incurred. 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. Cumulative translation adjustments have been classified within accumulated other comprehensive loss, which is a separate component of stockholders’ equity in accordance FASB ASC Topic No. 220, “Comprehensive Income”. Foreign currency transaction gains and losses are recorded as income or expenses as amounts are settled. For foreign currency remeasurement from each local currency into the appropriate functional currency, monetary assets and liabilities are remeasured to functional currencies using current exchange rates in effect at the balance sheet date. Gains or losses from these remeasurements have been included in the Company's Consolidated Statements of Earnings. Non-monetary assets and liabilities are recorded at historical exchange rates. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations in credit risk consist of cash and cash equivalents. The Company’s cash and cash equivalents, at times, may exceed federally insured limits. The Company’s cash and cash equivalents are deposited primarily in banking institutions with global operations. The Company has not experienced any losses in such accounts. The Company believes it is not exposed to any significant credit risk on cash and cash equivalents. Financial Instruments The carrying amounts of financial instruments, including cash and cash equivalents, accounts receivable and accounts payable approximated fair value as of December 31, 2021 and 2020, because of the relative short maturity of these instruments. The Company’s accounts receivable-long-term is discounted to its present value at prevailing market rates at the time of sale which, approximates fair value as of December 31, 2021 and 2020. Inventory Inventory, consisting primarily of finished products held for resale, is stated at the lower of cost or net realizable value. Vendor Prepayments and Advances Vendor prepayments represents advance payments made to vendors to be applied against future purchases. Any amounts not expected to be utilized to apply against purchases within one year are reclassified to other long-term assets. Equipment and Leasehold Improvements Equipment and leasehold improvements are stated at cost or fair value, if purchased as part of a business combination. Equipment depreciation is calculated using the straight-line method over three Software Development Costs four costs of $0.7 million and $0.8 million, respectively, which are included in "Equipment and leasehold improvements" in the Company's consolidated balance sheets. Accounts Receivable-Long-Term Accounts receivable-long-term result from product sales with extended payment terms that are discounted to their present values at the prevailing market rates at the time of sale. 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 under these long-term accounts receivable due within one year are reclassified to the current portion of accounts receivable. Goodwill In a qualitative assessment, we assess qualitative factors to determine whether it is more likely than not (that is, a likelihood of more than 50 percent) that the fair value of a reporting unit is less than its carrying amount, including goodwill. If, after assessing the totality of events or circumstances, we determine that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then the quantitative goodwill impairment test is unnecessary. If, after assessing the totality of events or circumstances, we determine that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then we perform the quantitative goodwill impairment test. We may also elect the unconditional option to bypass the qualitative assessment for any reporting unit in any period and proceed directly to performing the quantitative goodwill impairment test. In the quantitative impairment test, we compare the fair value of a reporting unit with its carrying amount, including goodwill. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired. Conversely, if the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. Determining the fair value of a reporting unit is judgmental in nature and requires the use of significant estimates and assumptions, including net sales growth rates, gross profit margins, operating margins, discount rates and future market conditions, among others. Any changes in the judgments, estimates or assumptions used could produce significantly different results. Intangible Assets Intangible assets with determinable lives are amortized on a straight-line basis over their respective estimated useful lives, which is determined based on their expected period of benefit. Intangible assets are reviewed for impairment when events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. If the carrying amount of an asset exceeds its estimated future undiscounted cash flows, an impairment loss is recorded for the excess of the asset's carrying amount over its fair value. In addition, each quarter, the Company evaluates whether events and circumstances warrant a revision to the remaining estimated useful life of each of these intangible assets. If the Company were to determine that a change to the remaining estimated useful life of an intangible asset was necessary, then the remaining carrying amount of the intangible asset would be amortized prospectively over that revised remaining useful life. Comprehensive Income Comprehensive income consists of net income for the year and the impact of unrealized foreign currency translation adjustments. The foreign currency translation adjustments are not currently adjusted for income taxes as they relate to permanent investments in international subsidiaries. Revenue Recognition The Company’s revenues primarily result from the sale of various technology products and services, including third-party products, third-party software and third-party maintenance, software support and services. The Company recognizes revenue as control of the third-party products and third-party software is transferred to customers, which generally happens at the point of shipment or fulfilment and at the point that our customers and vendors accept the terms and conditions of the arrangement for third-party maintenance, software support and services. The Company has contracts with certain customers where the Company’s performance obligation is to arrange for the products or services to be provided by another party. In these arrangements, as the Company assumes an agency relationship in the transaction, revenue is recognized in the amount of the net fee associated with serving as an agent. These arrangements primarily relate to third party maintenance, cloud services and certain security software whose intended functionality is dependent on third party maintenance. The Company allows its customers to return product for exchange or credit subject to certain limitations. A liability is recorded at the time of sale for estimated product returns based upon historical experience and an asset is recognized for the amount expected to be recorded upon product return. The Company also provides rebates and other discounts to certain customers which are considered variable consideration. A provision for customer rebates and other discounts is recorded as a reduction of revenue at the time of sale based on an evaluation of the contract terms and historical experience. The Company considers shipping and handling activities as costs to fulfill the sales of products. Shipping revenue is included in net sales when control of the product is transferred to the customer, and the related shipping and handling costs are included in cost of sales. Taxes imposed by governmental authorities on the Company’s revenue producing activities with customers, such as sales taxes and value added taxes, are excluded from net sales. The Company disaggregates its operating revenue by segment, geography and timing of revenue recognition, which the Company believes provides a meaningful depiction of the nature of its revenue. For additional information, see Note 13 (Industry, Segment and Geographic Information). Hardware and software products sold by the Company are generally delivered via shipment from the Company’s facilities, drop shipment directly from the vendor, or by electronic delivery of keys for software products. The majority of the Company’s business involves shipments directly from its vendors to its customers, in these transactions, the Company is generally responsible for negotiating price both with the vendor and customer, payment to the vendor, establishing payment terms with the customer, product returns, and has risk of loss if the customer does not make payment. As the principal with the customer, the Company recognizes revenue upon receiving notification from the vendor that the product was shipped. Control of software products 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. The Company performs an analysis of the number of days of sales in-transit to customers at the end of each reporting period based on an analysis of commercial delivery terms that include drop-shipment arrangements. This analysis is the basis upon which the Company estimates the amount of net sales in-transit at the end of the period and adjusts revenue and the related costs to reflect only what has been delivered to the customer. Changes in delivery patterns may result in a different number of business days estimated to make this adjustment. The Company also performs a weighted average analysis of the estimated number of days between order fulfillment and beginning of the renewal term for term licenses recorded on a gross basis, and a deferral estimate is recorded for term license renewals fulfilled prior to commencement date. Generally, software products are sold with accompanying third-party delivered software assurance, which is a product that allows customers to upgrade, at no additional cost, to the latest technology if new capabilities are introduced during the period that the software assurance is in effect. The Company evaluates whether the software assurance is a separate performance obligation by assessing if the third-party delivered software assurance is critical or essential to the core functionality of the software itself. This involves considering if the software provides its original intended functionality to the customer without the updates, if the customer would ascribe a higher value to the upgrades versus the up-front deliverable, if the customer would expect frequent intelligence updates to the software (such as updates that maintain the original functionality), and if the customer chooses to not delay or always install upgrades. If the Company determines that the accompanying third-party delivered software assurance is critical or essential to the core functionality of the software license, the software license and the accompanying third-party delivered software assurance are recognized as a single performance obligation. The value of the product is primarily the accompanying support delivered by a third party and therefore the Company is acting as an agent in these transactions and recognizes them on a net basis at the point the associated software license is delivered to the customer. The Company sells cloud computing solutions that utilize third-party vendors to enable customers to access data center functionality in a cloud-based solution, including storage, computing and networking and access to software in the cloud that enhances office productivity, provides security or assists in collaboration. The Company recognizes revenue for cloud computing solutions for arrangements with one-time invoicing to the customer at the time of invoice on a net basis as the Company is acting as an agent in the transaction. For monthly subscription-based arrangements, the Company is acting as an agent in the transaction and recognizes revenue as it invoices the customer for its monthly usage on a net basis. For software licenses where the accompanying third-party delivered software assurance is not critical or essential to the core functionality, the software assurance is recognized as a separate performance obligation, with the associated revenue recognized on a net basis at the point the related software license is delivered to the customer. The Company also sells some of its products and services as part of bundled contract arrangements containing multiple deliverables, which may include a combination of products and services. For each deliverable that represents a distinct performance obligation, total arrangement consideration is allocated based upon the standalone selling prices (“SSP”) of each performance obligation. SSP is determined 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 considering available information such as market pricing and pricing related to similar products. Freight The Company records freight billed to its customers as net sales and the related freight costs as cost of sales when the underlying product revenue is recognized. For freight not billed to its customers, the Company records the freight costs as cost of sales. The Company’s typical shipping terms result in shipping being performed before the customer obtains control of the product. The Company considers shipping to be a fulfillment activity and not a separate performance obligation. Commissions The Company pays 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 our performance obligations are complete within a short window of processing the order. Stock-Based Compensation The Company has stockholder-approved stock incentive plans for employees and directors. Stock-based compensation is recognized based on the grant date fair value and is recognized as expense on a straight-line basis over the requisite service period. Operating Segments Treasury Stock Treasury stock is accounted for at cost. Shares repurchased by the Company are held in treasury for general corporate purposes, including issuances under equity incentive plans. The reissuance of shares from treasury stock is based on the weighted average purchase price of the shares. Interest, net Income Taxes The Company utilizes the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax basis of assets and liabilities and are measured using enacted tax rates and laws that will be in effect when the differences are expected to reverse. This method also requires a valuation allowance against the net deferred tax asset if, based on the weighted available evidence, it is more likely than not that some or all the deferred tax assets will not be realized. The Company’s policy is to recognize interest and penalties related to uncertain tax positions in income tax expense when assessed. The Company accounts for uncertainties in accordance with FASB ASC 740 “Income Taxes”. This standard clarified the accounting for uncertainties in income taxes. The standard prescribes criteria for recognition and measurement of tax positions. It also provides guidance on derecognition, classification, interest and penalties, and disclosures related to income taxes associated with uncertain tax positions. The Company classifies all deferred tax asset or liabilities as non-current on the balance sheet. Foreign Exchange Recently Issued Accounting Pronouncements In June 2016, the FASB issued Accounting Standards Update No. 2016-13, “Financial Instruments - Credit Losses (Topic 326)” Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic that are considered smaller reporting companies as defined by the SEC to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company is planning to adopt this standard in the first quarter of fiscal 2023. 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. |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2021 | |
Acquisitions | |
Acquisitions | 3. Acquisitions Acquisition of Interwork Technologies On April 30, 2020, the Company completed the purchase of Interwork Technologies Inc., a Delaware corporation and Interwork Technologies Inc., a corporation incorporated under the laws of the Province of Ontario, Canada (collectively, “Interwork”) for an aggregate purchase price of $5 million Canadian dollar (equivalent to $3.6 million USD), subject to certain working capital adjustments, paid at closing plus a potential post-closing $1.1 million Canadian dollars (equivalent to $0.8 million USD) earn-out. The earn-out liability was paid for approximately $0.9 million during the year ended December 31, 2021. The purchase price allocation is final, with no measurement period adjustments made to the account balances recorded at the acquisition date. The impact of the acquisition’s final purchase price allocations on the Company’s Consolidated Balance Sheet and the acquisition date fair value of the total consideration transferred were as follows: (in thousands) Cash $ 1,009 Trade accounts receivable 9,534 Other current assets 628 Intangible assets Vendor relationships (14-year weighted average useful life) 3,797 Non-compete (1-year useful life) 8 Goodwill 3,857 Other assets 117 Accounts payable and other current liabilities (15,051) Deferred income tax liabilities (389) Taxes payable (600) Net assets $ 2,910 (in thousands) Supplementary information: Cash paid to sellers $ 2,150 Contingent earn-out 760 Total purchase consideration $ 2,910 Cash paid to sellers 2,150 Cash acquired in acquisition (1,009) Net cash paid for acquisition $ 1,141 Acquisition of CDF Group Limited On November 6, 2020, the Company entered into a Share Purchase Agreement and purchased the entire share capital of CDF Group Limited (“CDF”) for an aggregate purchase price of approximately £13.3 million (equivalent to approximately $17.4 million USD), subject to certain working capital and other adjustments. The purchase price allocation is final, with no measurement period adjustments made to the account balances recorded at the acquisition date. The impact of the acquisition’s final purchase price allocations on the Company’s Consolidated Balance Sheet and the acquisition date fair value of the total consideration transferred were as follows: (in thousands) Cash $ 8,463 Trade accounts receivable 8,093 Other current assets 260 Equipment and leasehold improvements, net 1,367 Intangible assets Customer relationships (13-year useful life) 6,357 Trademarks (15-year useful life) 504 Non-compete (1-year useful life) 42 Goodwill 12,774 Other assets 375 Accounts payable and other current liabilities (12,364) Deferred income tax liabilities (1,461) Other liabilities (306) Net assets $ 24,104 (in thousands) Supplementary information: Cash paid to sellers $ 24,104 Cash acquired in acquisition (8,463) Net cash paid for acquisition $ 15,641 There were no acquisition related costs incurred during the year ended December 31, 2021. The Company incurred acquisition related costs of approximately $1.5 million during the year ended December 31, 2020 in conjunction with the acquisitions of Interwork and CDF, which are reflected in the accompanying Consolidated Statements of Earnings. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Other Intangible Assets | |
Goodwill and Other Intangible Assets | 4. Goodwill and Other Intangible Assets Balance at January 1, 2020 $ — Goodwill acquired 16,631 Translation adjustments 185 Balance December 31, 2020 $ 16,816 Translation adjustments 372 Balance December 31, 2021 $ 17,188 Information related to the Company’s other intangibles, net is as follows: As of December 31, 2021 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Customer and vendor relationships $ 10,550 $ 1,079 $ 9,471 Trade name 519 40 479 Non-compete 52 52 — Total $ 11,121 $ 1,171 $ 9,950 As of December 31, 2020 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Customer and vendor relationships $ 10,361 $ 272 $ 10,089 Trade name 504 5 499 Non-compete 50 13 37 Total $ 10,915 $ 290 $ 10,625 Customer relationships are amortized over thirteen years. Vendor relationships are amortized between eleven The Company recognized total amortization expense for other intangibles, net of $0.9 million and $0.3 million during the years ended December 31, 2021 and 2020, respectively. Estimated future amortization expense of the Company’s other intangibles, net as of December 31, 2021 is as follows: 2022 $ 819 2023 819 2024 819 2025 819 2026 819 Thereafter 5,855 Total $ 9,950 |
Right-of-use Asset and Lease Li
Right-of-use Asset and Lease Liability | 12 Months Ended |
Dec. 31, 2021 | |
Right-of-use Asset and Lease Liability | |
Right-of-use Asset and Lease Liability | 5. Right-of-use Asset and Lease Liability The Company has entered into operating leases for office and warehouse facilities, which have terms at lease commencement that range from 3 years to 11 years . The Company determines if an arrangement is a lease at inception. Leases with an initial term of 12 months or less are not recorded on the Consolidated Balance Sheets and lease expense for these leases is recognized on a straight-line basis over the lease term. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized at commencement date of the lease based on the present value of the lease payments over the lease term. As our leases do not provide a readily determinable implicit rate, we use an incremental borrowing rate based on the information available at commencement date, including lease term, in determining the present value of future payments. The operating lease asset also includes any lease payments made and excludes lease incentives. Operating lease expense is recognized on a straight-line basis over the lease term and included in selling, general and administrative expenses. Information related to the Company’s right-of-use assets and related lease liabilities were as follows: Year ended December 31, 2021 2020 Cash paid for operating lease liabilities $ 598 $ 503 Right-of-use assets obtained in exchange for new operating lease obligations (1) $ 163 $ 537 Weighted-average remaining lease term 5.1 years 6.1 years Weighted-average discount rate 3.5% 3.5% (1) During the year ended December 31, 2020, includes $0.5 million recognized through acquisitions. Maturities of lease liabilities as of December 31, 2021 were as follows: 2022 $ 560 2023 598 2024 544 2025 554 2026 551 Thereafter 125 2,932 Less: imputed interest (647) Total lease liabilities $ 2,285 Lease liabilities, current portion 475 Lease liabilities, net of current portion 1,810 Total lease liabilities $ 2,285 |
Balance Sheet Detail
Balance Sheet Detail | 12 Months Ended |
Dec. 31, 2021 | |
Balance Sheet Detail | |
Balance Sheet Detail | 6. Balance Sheet Detail Equipment and leasehold improvements, net consist of the following: December 31, December 31, 2021 2020 Equipment $ 2,627 $ 2,482 Capitalized software 816 777 Leasehold improvements 1,762 1,760 5,205 5,019 Less accumulated depreciation and amortization (3,273) (2,711) $ 1,932 $ 2,308 Depreciation expense relating to equipment and leasehold improvements, net was $0.5 million and $0.4 million during the years ended December 31, 2021 and 2020, respectively. Amortization expense relating to capitalized software was $0.1 million and less than $0.1 million during the years ended December 31, 2021 and 2020. Accounts receivable – long term, net consist of the following: December 31, December 31, 2021 2020 Total amount due from customer $ 484 $ 1,853 Less: unamortized discount (8) (49) Less: current portion included in accounts receivable (398) (1,500) $ 78 $ 304 Accounts payable and accrued expenses consist of the following: December 31, December 31, 2021 2020 Trade accounts payable $ 125,908 $ 107,045 Accrued expenses 8,363 9,647 $ 134,271 $ 116,692 Accumulated other comprehensive loss consists of the following: December 31, December 31, 2021 2020 Foreign currency translation adjustments $ 492 $ 388 $ 492 $ 388 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2021 | |
Income Taxes | |
Income Taxes | 7. Income Taxes Deferred tax attributes resulting from differences between the tax basis of assets and liabilities and the reported amounts in the Consolidated Balance Sheets are as follows: December 31, December 31, 2021 2020 Deferred tax assets: Accruals and reserves $ 501 $ 483 Deferred rent credit 163 175 Depreciation and amortization 24 7 Total deferred tax assets 688 665 Deferred tax liabilities: Accruals and reserves (67) (9) Depreciation and amortization (2,212) (2,010) Total deferred tax liabilities (2,279) (2,019) Net deferred tax (liabilities) asset $ (1,591) $ (1,354) The provision for income taxes is as follows: Year ended December 31, 2021 2020 Current: Federal $ 1,692 $ 1,339 State 572 263 Foreign 674 314 2,938 1,916 Deferred: Federal (45) (134) State (12) (28) Foreign 285 (8) 228 (170) $ 3,166 $ 1,746 Effective Tax Rate 25.6 % 28.1 % The reasons for the difference between total tax expense and the amount computed by applying the U.S. statutory federal income tax rate to income before income taxes are as follows: Year ended December 31, 2021 2020 Statutory rate applied to pretax income $ 2,596 $ 1,309 State income taxes, net of federal income tax benefit 442 182 Adjustment for foreign rate change 353 — Other permanent items 19 19 Acquisition related costs — 319 Dividends (17) (19) Foreign income taxes over U.S. statutory rate (18) (1) GILTI, net of foreign tax credits (38) — Stock compensation (135) (59) Other items (36) (4) Income tax expense $ 3,166 $ 1,746 The Company has analyzed filing positions in all 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 identified its federal consolidated tax return, its state tax return in New Jersey, its Canadian tax return and its tax return in the United Kingdom as major tax jurisdictions. As of December 31, 2021, the Company’s 2018 through 2020 Federal tax returns remain open for examination. The Company’s New Jersey and Canadian tax returns are open for examination for the years 2017 through 2020. The Company’s tax return in the United Kingdom is open for examination for the years 2019 and 2020. 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 experience and interpretations of tax law applied to the facts of each matter. For financial reporting purposes, income before income taxes includes the following components: Year ended December 31, 2021 2020 United States $ 9,355 $ 4,767 Foreign 3,009 1,453 $ 12,364 $ 6,220 The following table summarizes the activity related to the Company’s unrecognized tax benefits as of December 31, 2021 and 2020: 2021 2020 Balance as of January 1 $ - $ 49 Additions related to prior period tax positions - - Reductions related to settlements with tax authorities - (49) Balance as of December 31 $ - $ - During the years ended December 31, 2021 and 2020, the Company incurred interest and penalties of zero and less than $0.1 million, respectively, related to these uncertain tax benefits. |
Credit Facility
Credit Facility | 12 Months Ended |
Dec. 31, 2021 | |
Credit Facility. | |
Credit Facility | 8. Credit Facility On November 15, 2017, the Company entered into a $20 million 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 and Second Amended and Restated Pledge and Security Agreement. On August 31, 2020, the Company entered into an amendment to the Credit Facility (the “Amended Credit Facility”) pursuant to a First Amendment to Second Amended and Restated Revolving Credit Loan Agreement and Other Loan Documents (collectively, the “Amended Loan Agreement”) and First Allonge to Second Amended and Restated Revolving Credit Loan Note (the “Amended Note”). The Amended Credit Facility, which will continue to be used for working capital and general corporate purposes, matures on June 30, 2023, 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 Amended Credit Facility is subject to change from time to time based on the changes in the LIBOR Rate, as defined in the Amended Loan Agreement, with the LIBOR Rate not to be less than 0.75 percentage points. Interest on the unpaid principal balance of the Amended Note will be calculated using a rate of 1.75 percentage points over the LIBOR Rate, with the interest rate being 2.50% at December 31, 2021. If the LIBOR Rate becomes unavailable during the term of the Amended Credit Facility, interest will be based upon the Benchmark Replacement (as defined in the Amended Loan Agreement) selected by Citibank after notifying the Company. The Amended Credit Facility is secured by the assets of the Company. At December 31, 2021 and 2020, the Company had no borrowings outstanding under the Credit Facility. The Company incurred $0.1 million of interest expense, related to the Credit Facility during the years ended December 31, 2021 and 2020, respectively . On April 13, 2021, Wayside Technology UK Holdings Limited (“Wayside UK”), a wholly-owned subsidiary of the Company, entered into an uncommitted short term credit facility of £8 million (“Uncommitted Credit Facility”) with Citibank N.A., London Branch (“Citibank London”) pursuant to certain terms and conditions. Obligations under the Uncommitted Credit Facility are guaranteed by the Company and will be used for working capital and general corporate purposes and have a maturity date of April 13, 2022, at which time Wayside UK must pay all outstanding principal of all outstanding loans plus all accrued and unpaid interest, and any interest, fees, costs and expenses, if any. Interest on the unpaid principal balance of the Uncommitted Credit Facility will be calculated using a rate of 1.85 percentage points over the Daily Rate, as defined in the Uncommitted Credit Facility. Amounts borrowed under the Uncommitted Credit Facility will be guaranteed by the Company. The Uncommitted Credit Facility may be cancelled at any time by Citibank London. Citibank London has the sole discretion to accept or reject any requested utilization of the Uncommitted Credit Facilitation. At December 31, 2021, Wayside UK had no borrowings outstanding under the Uncommitted Credit Facility. |
Stockholders' Equity and Stock
Stockholders' Equity and Stock Based Compensation | 12 Months Ended |
Dec. 31, 2021 | |
Stockholders' Equity and Stock Based Compensation | |
Stockholders' Equity and Stock Based Compensation | 9. Stockholders’ Equity and Stock-Based Compensation The 2021 Omnibus Incentive Plan (the “2021 Plan”) authorizes the grant of Stock Options, Stock Units, Stock Appreciation Rights, Restricted Stock, Deferred Stock, Stock Bonuses and other equity-based awards. The 2021 Plan was approved by the Company’s stockholders at the 2021 Annual Meeting in June 2021. The total number of shares of the Company’s common stock, par value $0.01 per share (“Common Stock”) initially available for award under the 2021 Plan was 500,000 shares. As of December 31, 2021, the number of shares of Common Stock available for future award grants to employees, officers and directors under the 2021 Plan is 448,043. The 2012 Stock-Based Compensation Plan (the “2012 Plan”) authorizes the grant of Stock Options, Stock Units, Stock Appreciation Rights, Restricted Stock, Deferred Stock, Stock Bonuses and other equity-based awards. The total number of shares of the Company’s Common Stock initially available for award under the 2012 Plan was 600,000, which was increased to 1,000,000 shares by stockholder approval at the Company’s 2018 Annual Meeting in June 2018. Immediately prior to the replacement of the 2012 Plan by the 2021 Plan, there were 352,158 shares of Common Stock available under the 2012 Plan. The 2012 Plan has been replaced by the 2021 Plan and none of the remaining shares of Common Stock authorized under the 2012 Plan will be transferred to or used under the 2021 Plan nor will any awards under the 2012 Plan that are forfeited increase the shares available for awards under the 2021 Plan. As of December 31, 2021, the number of shares of Common Stock available under the 2012 Plan is zero. During the year ended December 31, 2021, the Company granted a total of 106,122 shares of Restricted Stock to officers, directors and employees. These shares of Restricted Stock vest immediately or over time in up to sixteen equal quarterly installments. During the year ended December 31, 2021, 22,159 shares of Restricted Stock were forfeited as a result of officers and employees terminating employment with the Company. During the year ended December 31, 2020, the Company granted a total of 134,165 shares of Restricted Stock to officers, directors and employees. These shares of Restricted Stock vest immediately or over time in up to sixteen equal quarterly installments. During the year ended December 31, 2020, 4,682 shares of Restricted Stock were forfeited as a result of officers and employees terminating employment with the Company. There was no options activity during the year ended December 31, 2021 and 2020 and there were no options outstanding or exercisable at December 31, 2021 and 2020, respectively, under both the Company’s 2012 Plan and 2021 Plan. Under the various plans, options that are cancelled can be reissued. At December 31, 2021, no cancelled options were reserved for future reissuance. A summary of nonvested shares of Restricted Stock awards outstanding under the Company’s 2012 Plan as of December 31, 2021, and 2020 and changes during the years ended December 31, 2021 and 2020 is as follows: Weighted Average Grant Date Shares Fair Value Nonvested shares at January 1, 2020 63,922 $ 14.94 Granted in 2020 134,165 14.31 Vested in 2020 (70,613) 16.36 Forfeited in 2020 (4,682) 16.85 Nonvested shares at December 31, 2020 122,792 $ 13.37 Granted in 2021 106,122 22.96 Vested in 2021 (84,653) 17.47 Forfeited in 2021 (22,159) 16.14 Nonvested shares at December 31, 2021 122,102 $ 18.35 As of December 31, 2021, there was approximately $2.1 million of total unrecognized compensation cost related to nonvested share-based compensation arrangements. The unrecognized compensation cost is expected to be recognized over a weighted-average period of 2.8 years. For the years ended December 31, 2021 and 2020, the Company recognized share-based compensation cost of approximately $1.5 million and $1.3 million, respectively, which is included in selling, general and administrative expenses. The Company does not |
Defined Contribution Plan
Defined Contribution Plan | 12 Months Ended |
Dec. 31, 2021 | |
Defined Contribution Plan | |
Defined Contribution Plan | 10. Defined Contribution Plan The Company maintains a defined contribution plan covering substantially all employees. Participating employees may make contributions to the plan, through payroll deductions. Matching contributions are made by the Company equal to 50% of the employee’s contribution to the extent such employee contribution did not exceed 6% of their compensation. During the years ended December 31, 2021 and 2020, the Company expensed approximately $0.3 million, respectively, related to this plan. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies | |
Commitments and Contingencies | 11. Commitments and Contingencies Employment Agreements The Company has entered into employment agreements with four of its executive officers. If the Company terminates their respective employment for any reason other than for cause, these executive officers are entitled to severance payments ranging from six Other As of December 31, 2021, the Company has no standby letters of credit, has no standby repurchase obligations or other commercial commitments. The Company has a line of credit see Note 8 (Credit Facility). Other than employment arrangements, other management compensation arrangements and related party transactions as disclosed in Note 12, the Company is not engaged in any other transactions with related parties. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions | |
Related Party Transactions | 12. Related Party Transactions The Company made sales to a customer where a member of our Board of Directors is an executive. During the years ended December 31, 2021 and 2020, net sales to this customer totaled $0.3 million and $0.1 million, respectively, and amounts due from this customer as of December 31, 2021 and 2020 totaled zero and $0.1 million, respectively, and the December 31, 2020 balance was settled in cash subsequent to year end. The Company made sales to a customer where a family member of one of our executive’s has a minority ownership position. During the year ended December 31, 2021, net sales to this customer totaled $0.4 million and amounts due from this customer as of December 31, 2021 totaled $0.2 million, which are expected to be settled in cash subsequent to the year end. The Company also accrued referral fees totaling $0.2 million to this customer during the year ended December 31, 2021 and amounts owed to this customer for these referral fees as of December 31, 2021 totaled $0.1 million, which are expected to be settled in cash subsequent to the year end. |
Industry, Segment and Geographi
Industry, Segment and Geographic Financial Information | 12 Months Ended |
Dec. 31, 2021 | |
Industry, Segment and Geographic Financial Information | |
Industry, Segment and Geographic Financial Information | 13. Industry, Segment and Geographic Financial Information The Company distributes software developed by others through resellers indirectly to customers worldwide. We also resell computer software and hardware developed by others and provide technical services directly to customers worldwide. 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 Chief Executive Officer. The Company is organized into two reportable operating segments. The “Distribution” segment distributes technical software to corporate resellers, value added resellers (VARs), consultants and systems integrators worldwide. The “Solutions” segment is a cloud solutions provider and value-added reseller of software, hardware and services to customers worldwide. As permitted by FASB ASC Topic 280, the Company has utilized the aggregation criteria in combining its operations in Canada, Europe and the United Kingdom with the domestic segments as the international 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 net sales less the respective segment’s cost of sales 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, vendor prepayments 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: Year ended December 31, 2021 2020 Net Sales: Distribution $ 259,360 $ 233,740 Solutions 23,222 17,828 282,582 251,568 Gross Profit: Distribution $ 36,526 $ 29,136 Solutions 9,190 3,904 45,716 33,040 Direct Costs: Distribution $ 14,610 $ 12,453 Solutions 4,741 1,767 19,351 14,220 Segment Income Before Taxes: (1) Distribution $ 21,916 $ 16,683 Solutions 4,449 2,137 Segment Income Before Taxes 26,365 18,820 General and administrative $ 12,785 $ 9,709 Legal and financial advisory expenses, net - unsolicited bid and related matters — 1,586 Acquisition related costs — 1,518 Amortization and depreciation expense 1,529 704 Interest, net 359 121 Foreign currency transaction (loss) gain (46) 796 Income before taxes $ 12,364 $ 6,220 (1) Excludes general corporate expenses including legal and financial advisory expenses, net – unsolicited bid and related matters, acquisition related costs, amortization and depreciation expense, interest, and foreign currency transaction (loss) gain. As of As of December 31, December 31, Selected Assets by Segment: 2021 2020 Distribution $ 133,506 $ 106,930 Solutions 18,895 20,807 Segment Select Assets 152,401 127,737 Corporate Assets 38,351 37,796 Total Assets $ 190,752 $ 165,533 Geographic areas and net sales mix related to operations for the year ended December 31, 2021 and 2020 were as follows. Net sales is allocated to a geographic area based on the location of the sale, which is generally the customer’s country of domicile. Year ended December 31, 2021 Distribution Solutions Total Geography USA $ 210,247 $ 11,057 $ 221,304 Europe and United Kingdom 26,055 10,652 36,707 Canada 23,058 1,513 24,571 Total net sales $ 259,360 $ 23,222 $ 282,582 Timing of Revenue Recognition Transferred at a point in time where the Company is principal (1) $ 234,322 $ 16,360 $ 250,682 Transferred at a point in time where the Company is agent (2) 25,038 6,862 31,900 Total net sales $ 259,360 $ 23,222 $ 282,582 Year ended December 31, 2020 Distribution Solutions Total Geography USA $ 207,362 $ 13,991 $ 221,353 Europe and United Kingdom 14,787 2,060 16,847 Canada 11,591 1,777 13,368 Total net sales $ 233,740 $ 17,828 $ 251,568 Timing of Revenue Recognition Transferred at a point in time where the Company is principal (1) $ 214,403 $ 16,059 $ 230,462 Transferred at a point in time where the Company is agent (2) 19,337 1,769 21,106 Total net sales $ 233,740 $ 17,828 $ 251,568 (1) Includes net sales from third-party hardware and software products. (2) Includes net sales from third-party maintenance, software support and services. Geographic identifiable assets related to operations as of December 31, 2021 and 2020 were as follows. December 31, December 31, Identifiable Assets by Geographic Areas 2021 2020 USA $ 122,445 $ 114,126 Canada 24,923 18,514 Europe and United Kingdom 43,384 32,893 Total $ 190,752 $ 165,533 The Company had two customers that each accounted for more than 10% of total consolidated net sales for the year ended December 31, 2021. For the year ended December 31, 2021, CDW Corporation (“CDW”) and Software House International Corporation (“SHI”), accounted for 18%, and 17%, respectively, of consolidated net sales and as of December 31, 2021, 18% and 22%, respectively, of total net accounts receivable. For the year ended December 31, 2021, Sophos and SolarWinds accounted for 20% and 10%, respectively of our consolidated purchases. For the year ended December 31, 2020, CDW Corporation (“CDW”) and Software House International Corporation (“SHI”), accounted for 24%, and 14%, respectively, of consolidated net sales and as of December 31, 2020, 19% and 9%, respectively, of total net accounts receivable. For the year ended December 31, 2020, Sophos and SolarWinds accounted for 20% and 12%, respectively of our consolidated purchases. Our top five customers accounted for 51% and 52% of consolidated net sales for the years ended December 31, 2021 and 2020, respectively. |
Unsolicited Bid and Shareholder
Unsolicited Bid and Shareholder Demand | 12 Months Ended |
Dec. 31, 2021 | |
Unsolicited Bid and Shareholder Demand | |
Unsolicited Bid and Shareholder Demand | 14. Unsolicited Bid and Shareholder Demand On April 16, 2020 (the “Effective Date”), the Company entered into a Settlement Agreement (the “Settlement Agreement”) with Simon Nynens, Shepherd Kaplan Krochuk, LLC, North & Webster SSG, LLC, and each of Dennis Crowley, David Shepherd, David Kaplan, Timothy Krochuk and Samuel Kidston relating to an unsolicited bid and shareholder demand. Pursuant to the Settlement Agreement, the Company agreed to purchase all of Mr. Nynens’ 261,631 shares of the Common Stock owned, of record or beneficially, as of the Effective Date, at fair market value, as defined in the agreement. On April 23, 2020, the Company purchased all of Nynens’ 261,631 shares of Common Stock at $13.19 per share pursuant to the Settlement Agreement, representing approximately 5.8% of the issued and outstanding Common Stock of the Company, for an aggregate purchase price of $3.5 million. The Company incurred zero and $1.6 million in legal and advisory expenses, net during the year ended December 31, 2021 and 2020, respectively, related to the above matter. |
Quarterly Results of Operations
Quarterly Results of Operations (Unaudited) | 12 Months Ended |
Dec. 31, 2021 | |
Quarterly Results of Operations (Unaudited) | |
Quarterly Results of Operations (Unaudited) | 15. Quarterly Results of Operations (Unaudited) The following table presents summarized quarterly results for 2021: First Second Third Fourth Net sales $ 62,813 $ 75,350 $ 68,911 $ 75,508 Gross profit 10,843 10,979 11,319 12,575 Net income 1,520 1,791 2,440 3,447 Basic net income per common share $ 0.35 $ 0.41 $ 0.55 $ 0.78 Diluted net income per common share $ 0.35 $ 0.41 $ 0.55 $ 0.78 The following table presents summarized quarterly results for 2020: First Second Third Fourth Net sales $ 62,618 $ 56,586 $ 60,919 $ 71,445 Gross profit 8,164 7,114 7,237 10,525 Net income 836 581 530 2,527 Basic net income per common share $ 0.18 $ 0.13 $ 0.13 $ 0.58 Diluted net income per common share $ 0.18 $ 0.13 $ 0.13 $ 0.58 |
Schedule II--Valuation and Qual
Schedule II--Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2021 | |
Schedule II--Valuation and Qualifying Accounts | |
Schedule II--Valuation and Qualifying Accounts | Wayside Technology Group, Inc. and Subsidiaries Schedule II--Valuation and Qualifying Accounts (Amounts in thousands) Charged to Beginning Cost and Ending Description Balance Expense Deductions Balance Year ended December 31, 2020 Allowance for doubtful accounts $ 765 $ 130 $ 3 $ 892 Year ended December 31, 2021 Allowance for doubtful accounts $ 892 $ 26 $ 37 $ 881 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Summary of Significant Accounting Policies | |
Principles of Consolidation and Operations | Principles of Consolidation and Operations The consolidated financial statements include the accounts of Wayside Technology Group, Inc. and its wholly owned . All intercompany transactions and balances have been eliminated. |
Business Combinations | Business Combinations The Company accounts for business combinations using the acquisition method of accounting, which allocates the fair value of the purchase consideration to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values. The excess of the purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair values of assets acquired and liabilities assumed, management makes significant estimates and assumptions. The Company may utilize third-party valuation specialists to assist the Company in the allocation. Initial purchase price allocations are subject to revision within the measurement period, not to exceed one year from the date of acquisition. Acquisition-related expenses and transaction costs associated with business combinations are expensed as incurred. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) requires management to make extensive use of certain estimates and assumptions which affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. The significant areas of estimation include but are not limited to accounting for allowance for doubtful accounts, sales returns, allocation of revenue in multiple deliverable arrangements, principal vs. agent considerations, discount rates applicable to long term receivables, inventory obsolescence, income taxes, depreciation, amortization of intangible assets, contingencies and stock-based compensation. Actual results could differ from those estimates. |
Net Income Per Common Share | Net Income Per Common Share Our basic and diluted earnings per share are computed using the two-class method. The two-class method is an earnings allocation method that determines net income per share for each class of common stock 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: Year ended December 31, 2021 2020 Numerator: Net income $ 9,198 $ 4,474 Less distributed and undistributed income allocated to participating securities 269 130 Net income attributable to common shareholders 8,929 4,344 Denominator: Weighted average common shares (Basic) 4,272 4,288 Weighted average common shares including assumed conversions (Diluted) 4,272 4,288 Basic net income per share $ 2.09 $ 1.01 Diluted net income per share $ 2.09 $ 1.01 |
Cash Equivalents | Cash Equivalents The Company considers all liquid short-term investments with maturities of 90 days or less when purchased to be cash equivalents. |
Accounts Receivable | Accounts Receivable Accounts receivable principally represents amounts collectible from our customers. The Company performs ongoing credit evaluations of its customers but generally does not require collateral to support any outstanding obligation. From time to time, we sell accounts receivable to a financial institution on a non-recourse basis for cash, less a discount. The Company has no significant retained interests or servicing liabilities related to the accounts receivable sold. Proceeds from the sale of receivables approximated their discounted book value and were included in operating cash flows on the Consolidated Statements of Cash Flows. |
Allowances for Accounts Receivable | Allowances for Accounts Receivable We provide an allowance for doubtful accounts related to accounts receivable for estimated losses resulting from the inability of our customers to make required payments. We take into consideration the overall quality and aging of the receivable portfolio along with specifically identified customer risks. If actual customer payment performance were to deteriorate to an extent not expected, additional allowances may be required. At the time of sale, we also record an estimate for sales returns based on historical experience, which is included in accounts payable and accrued expenses on the Consolidated Balance Sheets. If actual sales returns are greater than estimated by management, additional expense may be incurred. |
Foreign Currency Translation | 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. Cumulative translation adjustments have been classified within accumulated other comprehensive loss, which is a separate component of stockholders’ equity in accordance FASB ASC Topic No. 220, “Comprehensive Income”. Foreign currency transaction gains and losses are recorded as income or expenses as amounts are settled. For foreign currency remeasurement from each local currency into the appropriate functional currency, monetary assets and liabilities are remeasured to functional currencies using current exchange rates in effect at the balance sheet date. Gains or losses from these remeasurements have been included in the Company's Consolidated Statements of Earnings. Non-monetary assets and liabilities are recorded at historical exchange rates. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations in credit risk consist of cash and cash equivalents. The Company’s cash and cash equivalents, at times, may exceed federally insured limits. The Company’s cash and cash equivalents are deposited primarily in banking institutions with global operations. The Company has not experienced any losses in such accounts. The Company believes it is not exposed to any significant credit risk on cash and cash equivalents. |
Financial Instruments | Financial Instruments The carrying amounts of financial instruments, including cash and cash equivalents, accounts receivable and accounts payable approximated fair value as of December 31, 2021 and 2020, because of the relative short maturity of these instruments. The Company’s accounts receivable-long-term is discounted to its present value at prevailing market rates at the time of sale which, approximates fair value as of December 31, 2021 and 2020. |
Inventory | Inventory Inventory, consisting primarily of finished products held for resale, is stated at the lower of cost or net realizable value. |
Vendor Prepayments and Advances | Vendor Prepayments and Advances Vendor prepayments represents advance payments made to vendors to be applied against future purchases. Any amounts not expected to be utilized to apply against purchases within one year are reclassified to other long-term assets. |
Equipment and Leasehold Improvements | Equipment and Leasehold Improvements Equipment and leasehold improvements are stated at cost or fair value, if purchased as part of a business combination. Equipment depreciation is calculated using the straight-line method over three |
Software Development Costs | Software Development Costs four costs of $0.7 million and $0.8 million, respectively, which are included in "Equipment and leasehold improvements" in the Company's consolidated balance sheets. |
Accounts Receivable-Long-Term | Accounts Receivable-Long-Term Accounts receivable-long-term result from product sales with extended payment terms that are discounted to their present values at the prevailing market rates at the time of sale. 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 under these long-term accounts receivable due within one year are reclassified to the current portion of accounts receivable. |
Goodwill & Intangible Assets | Goodwill In a qualitative assessment, we assess qualitative factors to determine whether it is more likely than not (that is, a likelihood of more than 50 percent) that the fair value of a reporting unit is less than its carrying amount, including goodwill. If, after assessing the totality of events or circumstances, we determine that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then the quantitative goodwill impairment test is unnecessary. If, after assessing the totality of events or circumstances, we determine that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then we perform the quantitative goodwill impairment test. We may also elect the unconditional option to bypass the qualitative assessment for any reporting unit in any period and proceed directly to performing the quantitative goodwill impairment test. In the quantitative impairment test, we compare the fair value of a reporting unit with its carrying amount, including goodwill. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired. Conversely, if the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. Determining the fair value of a reporting unit is judgmental in nature and requires the use of significant estimates and assumptions, including net sales growth rates, gross profit margins, operating margins, discount rates and future market conditions, among others. Any changes in the judgments, estimates or assumptions used could produce significantly different results. Intangible Assets Intangible assets with determinable lives are amortized on a straight-line basis over their respective estimated useful lives, which is determined based on their expected period of benefit. Intangible assets are reviewed for impairment when events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. If the carrying amount of an asset exceeds its estimated future undiscounted cash flows, an impairment loss is recorded for the excess of the asset's carrying amount over its fair value. In addition, each quarter, the Company evaluates whether events and circumstances warrant a revision to the remaining estimated useful life of each of these intangible assets. If the Company were to determine that a change to the remaining estimated useful life of an intangible asset was necessary, then the remaining carrying amount of the intangible asset would be amortized prospectively over that revised remaining useful life. |
Comprehensive Income | Comprehensive Income Comprehensive income consists of net income for the year and the impact of unrealized foreign currency translation adjustments. The foreign currency translation adjustments are not currently adjusted for income taxes as they relate to permanent investments in international subsidiaries. |
Revenue Recognition | Revenue Recognition The Company’s revenues primarily result from the sale of various technology products and services, including third-party products, third-party software and third-party maintenance, software support and services. The Company recognizes revenue as control of the third-party products and third-party software is transferred to customers, which generally happens at the point of shipment or fulfilment and at the point that our customers and vendors accept the terms and conditions of the arrangement for third-party maintenance, software support and services. The Company has contracts with certain customers where the Company’s performance obligation is to arrange for the products or services to be provided by another party. In these arrangements, as the Company assumes an agency relationship in the transaction, revenue is recognized in the amount of the net fee associated with serving as an agent. These arrangements primarily relate to third party maintenance, cloud services and certain security software whose intended functionality is dependent on third party maintenance. The Company allows its customers to return product for exchange or credit subject to certain limitations. A liability is recorded at the time of sale for estimated product returns based upon historical experience and an asset is recognized for the amount expected to be recorded upon product return. The Company also provides rebates and other discounts to certain customers which are considered variable consideration. A provision for customer rebates and other discounts is recorded as a reduction of revenue at the time of sale based on an evaluation of the contract terms and historical experience. The Company considers shipping and handling activities as costs to fulfill the sales of products. Shipping revenue is included in net sales when control of the product is transferred to the customer, and the related shipping and handling costs are included in cost of sales. Taxes imposed by governmental authorities on the Company’s revenue producing activities with customers, such as sales taxes and value added taxes, are excluded from net sales. The Company disaggregates its operating revenue by segment, geography and timing of revenue recognition, which the Company believes provides a meaningful depiction of the nature of its revenue. For additional information, see Note 13 (Industry, Segment and Geographic Information). Hardware and software products sold by the Company are generally delivered via shipment from the Company’s facilities, drop shipment directly from the vendor, or by electronic delivery of keys for software products. The majority of the Company’s business involves shipments directly from its vendors to its customers, in these transactions, the Company is generally responsible for negotiating price both with the vendor and customer, payment to the vendor, establishing payment terms with the customer, product returns, and has risk of loss if the customer does not make payment. As the principal with the customer, the Company recognizes revenue upon receiving notification from the vendor that the product was shipped. Control of software products 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. The Company performs an analysis of the number of days of sales in-transit to customers at the end of each reporting period based on an analysis of commercial delivery terms that include drop-shipment arrangements. This analysis is the basis upon which the Company estimates the amount of net sales in-transit at the end of the period and adjusts revenue and the related costs to reflect only what has been delivered to the customer. Changes in delivery patterns may result in a different number of business days estimated to make this adjustment. The Company also performs a weighted average analysis of the estimated number of days between order fulfillment and beginning of the renewal term for term licenses recorded on a gross basis, and a deferral estimate is recorded for term license renewals fulfilled prior to commencement date. Generally, software products are sold with accompanying third-party delivered software assurance, which is a product that allows customers to upgrade, at no additional cost, to the latest technology if new capabilities are introduced during the period that the software assurance is in effect. The Company evaluates whether the software assurance is a separate performance obligation by assessing if the third-party delivered software assurance is critical or essential to the core functionality of the software itself. This involves considering if the software provides its original intended functionality to the customer without the updates, if the customer would ascribe a higher value to the upgrades versus the up-front deliverable, if the customer would expect frequent intelligence updates to the software (such as updates that maintain the original functionality), and if the customer chooses to not delay or always install upgrades. If the Company determines that the accompanying third-party delivered software assurance is critical or essential to the core functionality of the software license, the software license and the accompanying third-party delivered software assurance are recognized as a single performance obligation. The value of the product is primarily the accompanying support delivered by a third party and therefore the Company is acting as an agent in these transactions and recognizes them on a net basis at the point the associated software license is delivered to the customer. The Company sells cloud computing solutions that utilize third-party vendors to enable customers to access data center functionality in a cloud-based solution, including storage, computing and networking and access to software in the cloud that enhances office productivity, provides security or assists in collaboration. The Company recognizes revenue for cloud computing solutions for arrangements with one-time invoicing to the customer at the time of invoice on a net basis as the Company is acting as an agent in the transaction. For monthly subscription-based arrangements, the Company is acting as an agent in the transaction and recognizes revenue as it invoices the customer for its monthly usage on a net basis. For software licenses where the accompanying third-party delivered software assurance is not critical or essential to the core functionality, the software assurance is recognized as a separate performance obligation, with the associated revenue recognized on a net basis at the point the related software license is delivered to the customer. The Company also sells some of its products and services as part of bundled contract arrangements containing multiple deliverables, which may include a combination of products and services. For each deliverable that represents a distinct performance obligation, total arrangement consideration is allocated based upon the standalone selling prices (“SSP”) of each performance obligation. SSP is determined 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 considering available information such as market pricing and pricing related to similar products. |
Freight | Freight The Company records freight billed to its customers as net sales and the related freight costs as cost of sales when the underlying product revenue is recognized. For freight not billed to its customers, the Company records the freight costs as cost of sales. The Company’s typical shipping terms result in shipping being performed before the customer obtains control of the product. The Company considers shipping to be a fulfillment activity and not a separate performance obligation. |
Commissions | Commissions The Company pays 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 our performance obligations are complete within a short window of processing the order. |
Stock-Based Compensation | Stock-Based Compensation The Company has stockholder-approved stock incentive plans for employees and directors. Stock-based compensation is recognized based on the grant date fair value and is recognized as expense on a straight-line basis over the requisite service period. |
Operating Segments | Operating Segments |
Treasury Stock | Treasury Stock Treasury stock is accounted for at cost. Shares repurchased by the Company are held in treasury for general corporate purposes, including issuances under equity incentive plans. The reissuance of shares from treasury stock is based on the weighted average purchase price of the shares. |
Interest, net | Interest, net |
Income Taxes | Income Taxes The Company utilizes the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax basis of assets and liabilities and are measured using enacted tax rates and laws that will be in effect when the differences are expected to reverse. This method also requires a valuation allowance against the net deferred tax asset if, based on the weighted available evidence, it is more likely than not that some or all the deferred tax assets will not be realized. The Company’s policy is to recognize interest and penalties related to uncertain tax positions in income tax expense when assessed. The Company accounts for uncertainties in accordance with FASB ASC 740 “Income Taxes”. This standard clarified the accounting for uncertainties in income taxes. The standard prescribes criteria for recognition and measurement of tax positions. It also provides guidance on derecognition, classification, interest and penalties, and disclosures related to income taxes associated with uncertain tax positions. The Company classifies all deferred tax asset or liabilities as non-current on the balance sheet. |
Foreign Exchange | Foreign Exchange |
Recently Issued Accounting Standards | Recently Issued Accounting Pronouncements In June 2016, the FASB issued Accounting Standards Update No. 2016-13, “Financial Instruments - Credit Losses (Topic 326)” Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic that are considered smaller reporting companies as defined by the SEC to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company is planning to adopt this standard in the first quarter of fiscal 2023. 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. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Summary of Significant Accounting Policies | |
Schedule of reconciliation of the numerators and denominators for computations of the basic and diluted per share | Year ended December 31, 2021 2020 Numerator: Net income $ 9,198 $ 4,474 Less distributed and undistributed income allocated to participating securities 269 130 Net income attributable to common shareholders 8,929 4,344 Denominator: Weighted average common shares (Basic) 4,272 4,288 Weighted average common shares including assumed conversions (Diluted) 4,272 4,288 Basic net income per share $ 2.09 $ 1.01 Diluted net income per share $ 2.09 $ 1.01 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Interwork Group, Inc. | |
Business Acquisition [Line Items] | |
Summary of purchase price allocations | (in thousands) Cash $ 1,009 Trade accounts receivable 9,534 Other current assets 628 Intangible assets Vendor relationships (14-year weighted average useful life) 3,797 Non-compete (1-year useful life) 8 Goodwill 3,857 Other assets 117 Accounts payable and other current liabilities (15,051) Deferred income tax liabilities (389) Taxes payable (600) Net assets $ 2,910 |
Summary of supplementary information related to acquisition | (in thousands) Supplementary information: Cash paid to sellers $ 2,150 Contingent earn-out 760 Total purchase consideration $ 2,910 Cash paid to sellers 2,150 Cash acquired in acquisition (1,009) Net cash paid for acquisition $ 1,141 |
CDF Group Limited | |
Business Acquisition [Line Items] | |
Summary of purchase price allocations | (in thousands) Cash $ 8,463 Trade accounts receivable 8,093 Other current assets 260 Equipment and leasehold improvements, net 1,367 Intangible assets Customer relationships (13-year useful life) 6,357 Trademarks (15-year useful life) 504 Non-compete (1-year useful life) 42 Goodwill 12,774 Other assets 375 Accounts payable and other current liabilities (12,364) Deferred income tax liabilities (1,461) Other liabilities (306) Net assets $ 24,104 |
Summary of supplementary information related to acquisition | (in thousands) Supplementary information: Cash paid to sellers $ 24,104 Cash acquired in acquisition (8,463) Net cash paid for acquisition $ 15,641 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Other Intangible Assets | |
Summary of goodwill | Balance at January 1, 2020 $ — Goodwill acquired 16,631 Translation adjustments 185 Balance December 31, 2020 $ 16,816 Translation adjustments 372 Balance December 31, 2021 $ 17,188 |
Summary of other intangibles, net | As of December 31, 2021 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Customer and vendor relationships $ 10,550 $ 1,079 $ 9,471 Trade name 519 40 479 Non-compete 52 52 — Total $ 11,121 $ 1,171 $ 9,950 As of December 31, 2020 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Customer and vendor relationships $ 10,361 $ 272 $ 10,089 Trade name 504 5 499 Non-compete 50 13 37 Total $ 10,915 $ 290 $ 10,625 |
Schedule of estimated future amortization expense of other intangible assets | 2022 $ 819 2023 819 2024 819 2025 819 2026 819 Thereafter 5,855 Total $ 9,950 |
Right-of-use Asset and Lease _2
Right-of-use Asset and Lease Liability (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Right-of-use Asset and Lease Liability | |
Schedule of information relating to right-of-use assets and related lease liabilities | Year ended December 31, 2021 2020 Cash paid for operating lease liabilities $ 598 $ 503 Right-of-use assets obtained in exchange for new operating lease obligations (1) $ 163 $ 537 Weighted-average remaining lease term 5.1 years 6.1 years Weighted-average discount rate 3.5% 3.5% (1) During the year ended December 31, 2020, includes $0.5 million recognized through acquisitions. |
Schedule of maturities of lease liabilities | Maturities of lease liabilities as of December 31, 2021 were as follows: 2022 $ 560 2023 598 2024 544 2025 554 2026 551 Thereafter 125 2,932 Less: imputed interest (647) Total lease liabilities $ 2,285 Lease liabilities, current portion 475 Lease liabilities, net of current portion 1,810 Total lease liabilities $ 2,285 |
Balance Sheet Detail (Tables)
Balance Sheet Detail (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Balance Sheet Detail | |
Schedule of equipment and leasehold improvements | December 31, December 31, 2021 2020 Equipment $ 2,627 $ 2,482 Capitalized software 816 777 Leasehold improvements 1,762 1,760 5,205 5,019 Less accumulated depreciation and amortization (3,273) (2,711) $ 1,932 $ 2,308 |
Schedule of accounts receivable - long term, net | December 31, December 31, 2021 2020 Total amount due from customer $ 484 $ 1,853 Less: unamortized discount (8) (49) Less: current portion included in accounts receivable (398) (1,500) $ 78 $ 304 |
Schedule of accounts payable and accrued expenses | December 31, December 31, 2021 2020 Trade accounts payable $ 125,908 $ 107,045 Accrued expenses 8,363 9,647 $ 134,271 $ 116,692 |
Schedule of accumulated other comprehensive loss | December 31, December 31, 2021 2020 Foreign currency translation adjustments $ 492 $ 388 $ 492 $ 388 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Taxes | |
Schedule of deferred tax assets and liabilities | December 31, December 31, 2021 2020 Deferred tax assets: Accruals and reserves $ 501 $ 483 Deferred rent credit 163 175 Depreciation and amortization 24 7 Total deferred tax assets 688 665 Deferred tax liabilities: Accruals and reserves (67) (9) Depreciation and amortization (2,212) (2,010) Total deferred tax liabilities (2,279) (2,019) Net deferred tax (liabilities) asset $ (1,591) $ (1,354) |
Schedule of provision (benefit) for income taxes | Year ended December 31, 2021 2020 Current: Federal $ 1,692 $ 1,339 State 572 263 Foreign 674 314 2,938 1,916 Deferred: Federal (45) (134) State (12) (28) Foreign 285 (8) 228 (170) $ 3,166 $ 1,746 Effective Tax Rate 25.6 % 28.1 % |
Schedule of difference between total tax expense and the amount computed by applying the U.S. statutory federal income tax rate to income before income taxes | Year ended December 31, 2021 2020 Statutory rate applied to pretax income $ 2,596 $ 1,309 State income taxes, net of federal income tax benefit 442 182 Adjustment for foreign rate change 353 — Other permanent items 19 19 Acquisition related costs — 319 Dividends (17) (19) Foreign income taxes over U.S. statutory rate (18) (1) GILTI, net of foreign tax credits (38) — Stock compensation (135) (59) Other items (36) (4) Income tax expense $ 3,166 $ 1,746 |
Schedule of components of income before income taxes | Year ended December 31, 2021 2020 United States $ 9,355 $ 4,767 Foreign 3,009 1,453 $ 12,364 $ 6,220 |
Schedule of activity related to unrecognized tax benefits | 2021 2020 Balance as of January 1 $ - $ 49 Additions related to prior period tax positions - - Reductions related to settlements with tax authorities - (49) Balance as of December 31 $ - $ - |
Stockholders' Equity and Stoc_2
Stockholders' Equity and Stock Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
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, 2020 63,922 $ 14.94 Granted in 2020 134,165 14.31 Vested in 2020 (70,613) 16.36 Forfeited in 2020 (4,682) 16.85 Nonvested shares at December 31, 2020 122,792 $ 13.37 Granted in 2021 106,122 22.96 Vested in 2021 (84,653) 17.47 Forfeited in 2021 (22,159) 16.14 Nonvested shares at December 31, 2021 122,102 $ 18.35 |
Industry, Segment and Geograp_2
Industry, Segment and Geographic Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Industry, Segment and Geographic Financial Information | |
Schedule of segment reporting information | Year ended December 31, 2021 2020 Net Sales: Distribution $ 259,360 $ 233,740 Solutions 23,222 17,828 282,582 251,568 Gross Profit: Distribution $ 36,526 $ 29,136 Solutions 9,190 3,904 45,716 33,040 Direct Costs: Distribution $ 14,610 $ 12,453 Solutions 4,741 1,767 19,351 14,220 Segment Income Before Taxes: (1) Distribution $ 21,916 $ 16,683 Solutions 4,449 2,137 Segment Income Before Taxes 26,365 18,820 General and administrative $ 12,785 $ 9,709 Legal and financial advisory expenses, net - unsolicited bid and related matters — 1,586 Acquisition related costs — 1,518 Amortization and depreciation expense 1,529 704 Interest, net 359 121 Foreign currency transaction (loss) gain (46) 796 Income before taxes $ 12,364 $ 6,220 (1) Excludes general corporate expenses including legal and financial advisory expenses, net – unsolicited bid and related matters, acquisition related costs, amortization and depreciation expense, interest, and foreign currency transaction (loss) gain. As of As of December 31, December 31, Selected Assets by Segment: 2021 2020 Distribution $ 133,506 $ 106,930 Solutions 18,895 20,807 Segment Select Assets 152,401 127,737 Corporate Assets 38,351 37,796 Total Assets $ 190,752 $ 165,533 |
Schedule of net sales to identifiable assets by geographic areas | Year ended December 31, 2021 Distribution Solutions Total Geography USA $ 210,247 $ 11,057 $ 221,304 Europe and United Kingdom 26,055 10,652 36,707 Canada 23,058 1,513 24,571 Total net sales $ 259,360 $ 23,222 $ 282,582 Timing of Revenue Recognition Transferred at a point in time where the Company is principal (1) $ 234,322 $ 16,360 $ 250,682 Transferred at a point in time where the Company is agent (2) 25,038 6,862 31,900 Total net sales $ 259,360 $ 23,222 $ 282,582 Year ended December 31, 2020 Distribution Solutions Total Geography USA $ 207,362 $ 13,991 $ 221,353 Europe and United Kingdom 14,787 2,060 16,847 Canada 11,591 1,777 13,368 Total net sales $ 233,740 $ 17,828 $ 251,568 Timing of Revenue Recognition Transferred at a point in time where the Company is principal (1) $ 214,403 $ 16,059 $ 230,462 Transferred at a point in time where the Company is agent (2) 19,337 1,769 21,106 Total net sales $ 233,740 $ 17,828 $ 251,568 (1) Includes net sales from third-party hardware and software products. (2) Includes net sales from third-party maintenance, software support and services. |
Summary of identifiable assets by geographic area | December 31, December 31, Identifiable Assets by Geographic Areas 2021 2020 USA $ 122,445 $ 114,126 Canada 24,923 18,514 Europe and United Kingdom 43,384 32,893 Total $ 190,752 $ 165,533 |
Quarterly Results of Operatio_2
Quarterly Results of Operations (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Quarterly Results of Operations (Unaudited) | |
Summary of quarterly results | The following table presents summarized quarterly results for 2021: First Second Third Fourth Net sales $ 62,813 $ 75,350 $ 68,911 $ 75,508 Gross profit 10,843 10,979 11,319 12,575 Net income 1,520 1,791 2,440 3,447 Basic net income per common share $ 0.35 $ 0.41 $ 0.55 $ 0.78 Diluted net income per common share $ 0.35 $ 0.41 $ 0.55 $ 0.78 The following table presents summarized quarterly results for 2020: First Second Third Fourth Net sales $ 62,618 $ 56,586 $ 60,919 $ 71,445 Gross profit 8,164 7,114 7,237 10,525 Net income 836 581 530 2,527 Basic net income per common share $ 0.18 $ 0.13 $ 0.13 $ 0.58 Diluted net income per common share $ 0.18 $ 0.13 $ 0.13 $ 0.58 |
Description of Business (Detail
Description of Business (Details) | 12 Months Ended |
Dec. 31, 2021segment | |
Description of Business | |
Number of reportable operating segments | 2 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Net Income Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Numerator: | ||||||||||
Net income | $ 3,447 | $ 2,440 | $ 1,791 | $ 1,520 | $ 2,527 | $ 530 | $ 581 | $ 836 | $ 9,198 | $ 4,474 |
Less distributed and undistributed income allocated to participating securities | 269 | 130 | ||||||||
Net income attributable to common shareholders | $ 8,929 | $ 4,344 | ||||||||
Denominator: | ||||||||||
Weighted average common shares (Basic) | 4,272 | 4,288 | ||||||||
Weighted average common shares including assumed conversions (Diluted) | 4,272 | 4,288 | ||||||||
Basic net income per common share (in dollars per share) | $ 0.78 | $ 0.55 | $ 0.41 | $ 0.35 | $ 0.58 | $ 0.13 | $ 0.13 | $ 0.18 | $ 2.09 | $ 1.01 |
Diluted net income per common share (in dollars per share) | $ 0.78 | $ 0.55 | $ 0.41 | $ 0.35 | $ 0.58 | $ 0.13 | $ 0.13 | $ 0.18 | $ 2.09 | $ 1.01 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Equipment and Revenue Recognition (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2021USD ($)segment | Dec. 31, 2020USD ($) | |
Equipment and leasehold improvements | ||
Number of reportable operating segments | segment | 2 | |
Equipment | Minimum | ||
Equipment and leasehold improvements | ||
Useful lives of assets | 3 years | |
Equipment | Maximum | ||
Equipment and leasehold improvements | ||
Useful lives of assets | 5 years | |
Capitalized software | ||
Equipment and leasehold improvements | ||
Software development costs, gross | $ | $ 0.7 | $ 0.8 |
Capitalized software | Minimum | ||
Equipment and leasehold improvements | ||
Amortization period | 4 years | |
Capitalized software | Maximum | ||
Equipment and leasehold improvements | ||
Amortization period | 7 years |
Acquisitions (Details)
Acquisitions (Details) $ in Thousands, £ in Millions, $ in Millions | Nov. 06, 2020USD ($) | Nov. 06, 2020GBP (£) | Apr. 30, 2020USD ($) | Apr. 30, 2020CAD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Apr. 30, 2020CAD ($) |
Acquisition of CDF Group Limited | |||||||
Acquisition related costs | $ 0 | $ 1,518 | |||||
Interwork Group, Inc. | |||||||
Acquisition of CDF Group Limited | |||||||
Aggregate purchase price | $ 3,600 | $ 5 | |||||
Potential earn-out | $ 800 | $ 1.1 | |||||
Earn-out liability paid | $ 900 | ||||||
CDF Group Limited | |||||||
Acquisition of CDF Group Limited | |||||||
Aggregate purchase price | $ 17,400 | £ 13.3 |
Acquisitions - Cash Considerati
Acquisitions - Cash Consideration (Details) - USD ($) $ in Thousands | Nov. 06, 2020 | Apr. 30, 2020 | Dec. 31, 2021 | Dec. 31, 2020 |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | ||||
Goodwill | $ 17,188 | $ 16,816 | ||
Interwork Group, Inc. | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | ||||
Cash | $ 1,009 | |||
Trade accounts receivable | 9,534 | |||
Other current assets | 628 | |||
Goodwill | 3,857 | |||
Other assets | 117 | |||
Accounts payable and other current liabilities | (15,051) | |||
Contingent earn-out | (760) | |||
Deferred income tax liabilities | (389) | |||
Taxes payable | (600) | |||
Net assets | 2,910 | |||
Contingent earn-out | 760 | |||
Interwork Group, Inc. | Vendor relationships | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | ||||
Intangible assets | $ 3,797 | |||
Useful life | 14 years | |||
Interwork Group, Inc. | Non-compete | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | ||||
Intangible assets | $ 8 | |||
Useful life | 1 year | |||
CDF Group Limited | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | ||||
Cash | $ 8,463 | |||
Trade accounts receivable | 8,093 | |||
Other current assets | 260 | |||
Equipment and leasehold improvements, net | 1,367 | |||
Goodwill | 12,774 | |||
Other assets | 375 | |||
Accounts payable and other current liabilities | (12,364) | |||
Deferred income tax liabilities | (1,461) | |||
Other liabilities | (306) | |||
Net assets | 24,104 | |||
CDF Group Limited | Non-compete | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | ||||
Intangible assets | $ 42 | |||
Useful life | 1 year | |||
CDF Group Limited | Customer relationships | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | ||||
Intangible assets | $ 6,357 | |||
Useful life | 13 years | |||
CDF Group Limited | Trademarks | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | ||||
Intangible assets | $ 504 | |||
Useful life | 15 years |
Acquisitions - Supplementary in
Acquisitions - Supplementary information (Details) - USD ($) $ in Thousands | Nov. 06, 2020 | Apr. 30, 2020 |
Interwork Group, Inc. | ||
Business Acquisition [Line Items] | ||
Cash paid to sellers | $ 2,150 | |
Contingent earn-out | 760 | |
Total purchase consideration | 2,910 | |
Cash acquired in acquisition | (1,009) | |
Net cash paid for acquisition | $ 1,141 | |
CDF Group Limited | ||
Business Acquisition [Line Items] | ||
Cash paid to sellers | $ 24,104 | |
Cash acquired in acquisition | (8,463) | |
Net cash paid for acquisition | $ 15,641 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Summary of goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill [Roll Forward] | ||
Beginning Balance | $ 16,816 | |
Goodwill acquired | $ 16,631 | |
Translation adjustments | 372 | 185 |
Ending Balance | $ 17,188 | $ 16,816 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Other intangibles, net (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 11,121 | $ 10,915 |
Accumulated Amortization | 1,171 | 290 |
Total | 9,950 | 10,625 |
Amortization expense | 900 | 300 |
Customer and vendor relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 10,550 | 10,361 |
Accumulated Amortization | 1,079 | 272 |
Total | 9,471 | 10,089 |
Trade name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 519 | 504 |
Accumulated Amortization | 40 | 5 |
Total | $ 479 | 499 |
Amortization period | 15 years | |
Non-compete | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 52 | 50 |
Accumulated Amortization | $ 52 | 13 |
Total | $ 37 | |
Amortization period | 1 year | |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization period | 13 years | |
Vendor relationships | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization period | 11 years | |
Vendor relationships | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization period | 15 years |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Future amortization expense (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
2022 | $ 819 | |
2023 | 819 | |
2024 | 819 | |
2025 | 819 | |
2026 | 819 | |
Thereafter | 5,855 | |
Total | $ 9,950 | $ 10,625 |
Right-of-use Asset and Lease _3
Right-of-use Asset and Lease Liability (Details) | Dec. 31, 2021 |
Minimum | |
Right-of-use Asset and Lease Liability | |
Lease term | 3 years |
Maximum | |
Right-of-use Asset and Lease Liability | |
Lease term | 11 years |
Right-of-use Asset and Lease _4
Right-of-use Asset and Lease Liability - Operating lease information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Right-of-use Asset and Lease Liability | ||
Cash paid for operating lease liabilities | $ 598 | $ 503 |
Right-of-use assets obtained in exchange for new operating lease obligations | $ 163 | $ 537 |
Weighted-average remaining lease term | 5 years 1 month 6 days | 6 years 1 month 6 days |
Weighted-average discount rate | 3.50% | 3.50% |
Right of use assets obtained in exchange through business acquisition | $ 500 |
Right-of-use Asset and Lease _5
Right-of-use Asset and Lease Liability - Maturities of lease liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Maturities of lease liabilities | ||
2022 | $ 560 | |
2023 | 598 | |
2024 | 544 | |
2025 | 554 | |
2024 | 551 | |
Thereafter | 125 | |
Total | 2,932 | |
Less: imputed interest | (647) | |
Total lease liabilities | 2,285 | |
Lease liability, current portion | 475 | $ 490 |
Lease liability, net of current portion | $ 1,810 | $ 2,167 |
Balance Sheet Detail (Details)
Balance Sheet Detail (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Equipment and leasehold improvements | ||
Equipment and leasehold improvements, gross | $ 5,205 | $ 5,019 |
Less accumulated depreciation and amortization | (3,273) | (2,711) |
Equipment and leasehold improvements, net | 1,932 | 2,308 |
Depreciation | 500 | 400 |
Equipment and capitalized software | ||
Equipment and leasehold improvements | ||
Equipment and leasehold improvements, gross | 2,627 | 2,482 |
Capitalized software | ||
Equipment and leasehold improvements | ||
Equipment and leasehold improvements, gross | 816 | 777 |
Amortization | 100 | 100 |
Leasehold improvements | ||
Equipment and leasehold improvements | ||
Equipment and leasehold improvements, gross | $ 1,762 | $ 1,760 |
Balance Sheet Detail - Accounts
Balance Sheet Detail - Accounts receivable - long term, net (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Accounts receivable - long term | ||
Total amount due from customer | $ 484 | $ 1,853 |
Less unamortized discount | (8) | (49) |
Less current portion included in accounts receivable | (398) | (1,500) |
Total of accounts receivable, long term, net | $ 78 | $ 304 |
Balance Sheet Detail - Accoun_2
Balance Sheet Detail - Accounts payable and accrued expenses and AOCI (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Accounts payable and accrued expenses | ||
Trade accounts payable | $ 125,908 | $ 107,045 |
Accrued expenses | 8,363 | 9,647 |
Accounts payable and accrued expenses | 134,271 | 116,692 |
Accumulated other comprehensive loss | (250) | (742) |
Foreign currency translation adjustments | ||
Accounts payable and accrued expenses | ||
Accumulated other comprehensive loss | $ 492 | $ 388 |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets - (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred tax assets: | ||
Accruals and reserves | $ 501 | $ 483 |
Deferred rent credit | 163 | 175 |
Depreciation and amortization | 24 | 7 |
Total deferred tax assets | 688 | 665 |
Deferred tax liabilities: | ||
Accruals and reserves | (67) | (9) |
Depreciation and amortization | (2,212) | (2,010) |
Total deferred tax liabilities | (2,279) | (2,019) |
Net deferred tax (liabilities) asset | $ (1,591) | $ (1,354) |
Income Taxes - Provision for In
Income Taxes - Provision for Income Taxes - (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Current: | ||
Federal | $ 1,692 | $ 1,339 |
State | 572 | 263 |
Foreign | 674 | 314 |
Total current income tax | 2,938 | 1,916 |
Deferred: | ||
Federal | (45) | (134) |
State | (12) | (28) |
Foreign | 285 | (8) |
Total deferred income tax | 228 | (170) |
Income tax expense | $ 3,166 | $ 1,746 |
Effective tax rate (as a percent) | 25.60% | 28.10% |
Income Taxes - Reconciliations
Income Taxes - Reconciliations and Components of Income - (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Reconciliation of difference between total tax expense and the amount computed by applying the U.S. statutory federal income tax rate to income before income taxes | ||
Statutory rate applied to pretax income | $ 2,596 | $ 1,309 |
State income taxes, net of federal income tax benefit | 442 | 182 |
Adjustment for foreign rate change | 353 | |
Other permanent items | 19 | 19 |
Acquisition related costs | 319 | |
Dividends | (17) | (19) |
Foreign income taxes over U.S. statutory rate | (18) | (1) |
GILTI, net of foreign tax credits | (38) | |
Stock compensation | (135) | (59) |
Other items | (36) | (4) |
Income tax expense | 3,166 | 1,746 |
Components of income before income taxes | ||
United States | 9,355 | 4,767 |
Foreign | 3,009 | 1,453 |
Income before provision for income taxes | $ 12,364 | $ 6,220 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits - (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Reconciliation of unrecognized tax benefits | ||
Balance | $ 49 | |
Reductions related to settlements with tax authorities | (49) | |
Interest and penalties related to uncertain tax positions | $ 0 | |
Withholding taxes related to repatriation | 0 | |
Maximum | ||
Reconciliation of unrecognized tax benefits | ||
Interest and penalties related to uncertain tax positions | $ 100 | |
Canada | ||
Reconciliation of unrecognized tax benefits | ||
Undistributed earnings | 7,400 | |
United Kingdom | ||
Reconciliation of unrecognized tax benefits | ||
Undistributed earnings | $ 2,200 |
Credit Facility (Details)
Credit Facility (Details) £ in Millions | Apr. 13, 2021GBP (£) | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Nov. 05, 2017USD ($) |
Credit Facility | ||||
Interest rate margin (as a percent) | 0.75% | |||
Uncommitted Credit Facility | ||||
Credit Facility | ||||
Maximum borrowing capacity | £ | £ 8 | |||
Interest rate margin (as a percent) | 1.85% | |||
Borrowings outstanding | $ 0 | |||
Credit Facility | ||||
Credit Facility | ||||
Maximum borrowing capacity | $ 20,000,000 | |||
Borrowings outstanding | 0 | $ 0 | ||
Interest expense | $ 100,000 | $ 100,000 | ||
Credit Facility | Index | ||||
Credit Facility | ||||
Interest rate | 2.50% | |||
Interest rate margin (as a percent) | 1.75% |
Stockholders' Equity and Stoc_3
Stockholders' Equity and Stock Based Compensation - Plans and options (Details) - $ / shares | Dec. 31, 2021 | Dec. 31, 2020 | Jun. 30, 2018 | May 31, 2018 |
Stock-based compensation | ||||
Common Stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | ||
Options outstanding | 0 | 0 | ||
Options exercisable | 0 | 0 | ||
Options reserved for future issuance (in shares) | 0 | |||
2021 Plan | ||||
Stock-based compensation | ||||
Common Stock, par value (in dollars per share) | $ 0.01 | |||
Number of shares of common stock initially available for award | 500,000 | |||
Options reserved for future issuance (in shares) | 448,043 | |||
2012 Plan | ||||
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) | 0 | 352,158 |
Stockholders' Equity and Stoc_4
Stockholders' Equity and Stock Based Compensation - Nonvested (Details) $ / shares in Units, $ in Millions | 12 Months Ended | |
Dec. 31, 2021USD ($)installment$ / sharesshares | Dec. 31, 2020USD ($)installment$ / sharesshares | |
Weighted Average Grant Date Fair Value | ||
Capitalized share-based compensation cost | $ | $ 0 | |
Selling, general and administrative expenses | ||
Weighted Average Grant Date Fair Value | ||
Share-based compensation expense | $ | $ 1.5 | $ 1.3 |
Restricted stock | ||
Shares | ||
Nonvested shares at the beginning of the period | shares | 122,792 | 63,922 |
Granted (in shares) | shares | 106,122 | 134,165 |
Vested (in shares) | shares | (84,653) | (70,613) |
Forfeited (in shares) | shares | (22,159) | (4,682) |
Nonvested shares at the end of the period | shares | 122,102 | 122,792 |
Weighted Average Grant Date Fair Value | ||
Nonvested shares at the beginning of period (in dollars per share) | $ / shares | $ 13.37 | $ 14.94 |
Granted (in dollars per share) | $ / shares | 22.96 | 14.31 |
Vested (in dollars per share) | $ / shares | 17.47 | 16.36 |
Forfeited (in dollars per share) | $ / shares | 16.14 | 16.85 |
Nonvested shares at the end of period (in dollars per share) | $ / shares | $ 18.35 | $ 13.37 |
Unrecognized compensation cost (in dollars) | $ | $ 2.1 | |
Weighted average period for recognition of unrecognized compensation cost | 2 years 9 months 18 days | |
Restricted stock | Maximum | ||
Shares | ||
Number of equal quarterly installments for vesting of awards | installment | 16 | 16 |
Defined Contribution Plan (Deta
Defined Contribution Plan (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Defined Contribution Plan | ||
Company's matching contributions equal to each employee's contribution (as a percent) | 50.00% | |
Maximum contribution of employees as a percentage of their compensation | 6.00% | |
Amount expensed | $ 0.3 | $ 0.3 |
Commitments and Contingencies (
Commitments and Contingencies (Details) | 12 Months Ended |
Dec. 31, 2021USD ($)director | |
Contingencies | |
Number of executive officers with employment agreements | director | 4 |
Period in which additional severance can be paid if there is a change in control | 12 months |
Other | |
Standby letters of credit | $ 0 |
Standby repurchase obligations or other commercial commitments | $ 0 |
Minimum | |
Contingencies | |
Period for severance payments | 6 months |
Maximum | |
Contingencies | |
Period for severance payments | 12 months |
Related Party Transactions (Det
Related Party Transactions (Detail) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Board of Directors | ||
Sales to related party | $ 300,000 | $ 100,000 |
Due from related party | 0 | $ 100,000 |
Family member of executive | ||
Sales to related party | 400,000 | |
Due from related party | 200,000 | |
Accrued referral fees | 200,000 | |
Fees expected to be settled in cash in subsequent year | $ 100,000 |
Industry, Segment and Geograp_3
Industry, Segment and Geographic Financial Information (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2021USD ($) | Sep. 30, 2021USD ($) | Jun. 30, 2021USD ($) | Mar. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Sep. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2021USD ($)segment | Dec. 31, 2020USD ($) | |
Segment reporting information | ||||||||||
Number of reportable operating segments | segment | 2 | |||||||||
Revenue | $ 75,508 | $ 68,911 | $ 75,350 | $ 62,813 | $ 71,445 | $ 60,919 | $ 56,586 | $ 62,618 | $ 282,582 | $ 251,568 |
Gross profit | $ 12,575 | $ 11,319 | $ 10,979 | $ 10,843 | $ 10,525 | $ 7,237 | $ 7,114 | $ 8,164 | 45,716 | 33,040 |
Direct Costs | 19,351 | 14,220 | ||||||||
Segment Income Before Taxes | 26,365 | 18,820 | ||||||||
General and administrative | 12,785 | 9,709 | ||||||||
Legal and financial advisory expenses, net - unsolicited bid and related matters | 1,586 | |||||||||
Acquisition related costs | 0 | 1,518 | ||||||||
Amortization and depreciation expense | 1,529 | 704 | ||||||||
Interest, net | 359 | 121 | ||||||||
Foreign currency transaction (loss) gain | (46) | 796 | ||||||||
Income before provision for income taxes | 12,364 | 6,220 | ||||||||
Lifeboat Distribution | ||||||||||
Segment reporting information | ||||||||||
Revenue | 259,360 | 233,740 | ||||||||
Gross profit | 36,526 | 29,136 | ||||||||
Direct Costs | 14,610 | 12,453 | ||||||||
Segment Income Before Taxes | 21,916 | 16,683 | ||||||||
Solutions Segment | ||||||||||
Segment reporting information | ||||||||||
Revenue | 23,222 | 17,828 | ||||||||
Gross profit | 9,190 | 3,904 | ||||||||
Direct Costs | 4,741 | 1,767 | ||||||||
Segment Income Before Taxes | $ 4,449 | $ 2,137 |
Industry, Segment and Geograp_4
Industry, Segment and Geographic Financial Information - Selected Assets by Segment (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Segment Reporting Information [Line Items] | ||
Total Assets | $ 190,752 | $ 165,533 |
Segment Total | ||
Segment Reporting Information [Line Items] | ||
Total Assets | 152,401 | 127,737 |
Corporate Assets | ||
Segment Reporting Information [Line Items] | ||
Total Assets | 38,351 | 37,796 |
Lifeboat Distribution | ||
Segment Reporting Information [Line Items] | ||
Total Assets | 133,506 | 106,930 |
Solutions Segment | ||
Segment Reporting Information [Line Items] | ||
Total Assets | $ 18,895 | $ 20,807 |
Industry, Segment and Geograp_5
Industry, Segment and Geographic Financial Information- Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | ||||||||||
Net sales | $ 75,508 | $ 68,911 | $ 75,350 | $ 62,813 | $ 71,445 | $ 60,919 | $ 56,586 | $ 62,618 | $ 282,582 | $ 251,568 |
Lifeboat Distribution | ||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||
Net sales | 259,360 | 233,740 | ||||||||
Solutions Segment | ||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||
Net sales | 23,222 | 17,828 | ||||||||
USA | ||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||
Net sales | 221,304 | 221,353 | ||||||||
USA | Lifeboat Distribution | ||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||
Net sales | 210,247 | 207,362 | ||||||||
USA | Solutions Segment | ||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||
Net sales | 11,057 | 13,991 | ||||||||
Europe and United Kingdom | ||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||
Net sales | 36,707 | 16,847 | ||||||||
Europe and United Kingdom | Lifeboat Distribution | ||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||
Net sales | 26,055 | 14,787 | ||||||||
Europe and United Kingdom | Solutions Segment | ||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||
Net sales | 10,652 | 2,060 | ||||||||
Canada | ||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||
Net sales | 24,571 | 13,368 | ||||||||
Canada | Lifeboat Distribution | ||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||
Net sales | 23,058 | 11,591 | ||||||||
Canada | Solutions Segment | ||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||
Net sales | 1,513 | 1,777 | ||||||||
Company As Principal | Transferred at Point in Time | ||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||
Net sales | 250,682 | 230,462 | ||||||||
Company As Principal | Lifeboat Distribution | Transferred at Point in Time | ||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||
Net sales | 234,322 | 214,403 | ||||||||
Company As Principal | Solutions Segment | Transferred at Point in Time | ||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||
Net sales | 16,360 | 16,059 | ||||||||
Company As Agent | Transferred at Point in Time | ||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||
Net sales | 31,900 | 21,106 | ||||||||
Company As Agent | Lifeboat Distribution | Transferred at Point in Time | ||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||
Net sales | 25,038 | 19,337 | ||||||||
Company As Agent | Solutions Segment | Transferred at Point in Time | ||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||
Net sales | $ 6,862 | $ 1,769 |
Industry, Segment and Geograp_6
Industry, Segment and Geographic Financial Information - Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Net sales to unaffiliated customers and identifiable assets by geographic areas | ||
Identifiable Assets by Geographic Areas | $ 190,752 | $ 165,533 |
USA | ||
Net sales to unaffiliated customers and identifiable assets by geographic areas | ||
Identifiable Assets by Geographic Areas | 122,445 | 114,126 |
Canada | ||
Net sales to unaffiliated customers and identifiable assets by geographic areas | ||
Identifiable Assets by Geographic Areas | 24,923 | 18,514 |
Europe and United Kingdom | ||
Net sales to unaffiliated customers and identifiable assets by geographic areas | ||
Identifiable Assets by Geographic Areas | $ 43,384 | $ 32,893 |
Industry, Segment, and Geograph
Industry, Segment, and Geographic Financial Information - Concentration (Details) - customer | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Top five customers | ||
Significant Customers and Vendors | ||
Number of customers | 5 | 5 |
Net sales | Customer concentration risk | ||
Significant Customers and Vendors | ||
Number of customers | 2 | |
Net sales | SHI | Customer concentration risk | ||
Significant Customers and Vendors | ||
Percentage of concentration risk | 17.00% | 14.00% |
Net sales | CDW | Customer concentration risk | ||
Significant Customers and Vendors | ||
Percentage of concentration risk | 18.00% | 24.00% |
Net sales | Top five customers | Customer concentration risk | ||
Significant Customers and Vendors | ||
Percentage of concentration risk | 51.00% | 52.00% |
Net accounts receivable | SHI | Customer concentration risk | ||
Significant Customers and Vendors | ||
Percentage of concentration risk | 22.00% | 9.00% |
Net accounts receivable | CDW | Customer concentration risk | ||
Significant Customers and Vendors | ||
Percentage of concentration risk | 18.00% | 19.00% |
Purchases | Vendor concentration risk | SolarWinds | ||
Significant Customers and Vendors | ||
Percentage of concentration risk | 10.00% | 12.00% |
Purchases | Vendor concentration risk | Sophos | ||
Significant Customers and Vendors | ||
Percentage of concentration risk | 20.00% | 20.00% |
Unsolicited Bid and Sharehold_2
Unsolicited Bid and Shareholder Demand (Details) - USD ($) $ / shares in Units, $ in Thousands | Apr. 23, 2020 | Apr. 16, 2020 | Dec. 31, 2021 | Dec. 31, 2020 |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Legal and financial advisory expenses | $ 1,586 | |||
Settlement Agreement with Mr. Nynens and the N&W Group | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Shares repurchased | 261,631 | 261,631 | ||
Market value (in dollars per share) | $ 13.19 | |||
Shares repurchased (as a percent) | 5.80% | |||
Shares repurchased amount | $ 3,500 | |||
Legal and financial advisory expenses | $ 0 | $ 1,600 |
Quarterly Results of Operatio_3
Quarterly Results of Operations (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Quarterly Results of Operations (Unaudited) | ||||||||||
Net sales | $ 75,508 | $ 68,911 | $ 75,350 | $ 62,813 | $ 71,445 | $ 60,919 | $ 56,586 | $ 62,618 | $ 282,582 | $ 251,568 |
Gross profit | 12,575 | 11,319 | 10,979 | 10,843 | 10,525 | 7,237 | 7,114 | 8,164 | 45,716 | 33,040 |
Net income | $ 3,447 | $ 2,440 | $ 1,791 | $ 1,520 | $ 2,527 | $ 530 | $ 581 | $ 836 | $ 9,198 | $ 4,474 |
Basic net income per share | $ 0.78 | $ 0.55 | $ 0.41 | $ 0.35 | $ 0.58 | $ 0.13 | $ 0.13 | $ 0.18 | $ 2.09 | $ 1.01 |
Diluted net income per share | $ 0.78 | $ 0.55 | $ 0.41 | $ 0.35 | $ 0.58 | $ 0.13 | $ 0.13 | $ 0.18 | $ 2.09 | $ 1.01 |
Schedule II--Valuation and Qu_2
Schedule II--Valuation and Qualifying Accounts (Details) - Allowances for accounts receivable - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Valuation and qualifying accounts | ||
Beginning Balance | $ 892 | $ 765 |
Charged to Cost and Expense | 26 | 130 |
Deductions | 37 | 3 |
Ending Balance | $ 881 | $ 892 |