Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Jul. 31, 2018 | |
Document And Entity Information | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | PCCC | |
Entity Registrant Name | PC CONNECTION INC | |
Entity Central Index Key | 1,050,377 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 26,702,507 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Current Assets: | ||
Cash and cash equivalents | $ 68,680 | $ 49,990 |
Accounts receivable, net | 463,994 | 449,682 |
Inventories, net | 107,449 | 106,753 |
Prepaid expenses and other current assets | 6,279 | 5,737 |
Income taxes receivable | 933 | 3,933 |
Total current assets | 647,335 | 616,095 |
Property and equipment, net | 46,012 | 41,491 |
Goodwill | 73,602 | 73,602 |
Intangibles assets, net | 10,284 | 11,025 |
Long-term accounts receivable | 1,890 | |
Other assets | 1,831 | 5,638 |
Total Assets | 780,954 | 747,851 |
Current Liabilities: | ||
Accounts payable | 200,940 | 194,257 |
Accrued expenses and other liabilities | 28,915 | 31,096 |
Accrued payroll | 23,458 | 22,662 |
Total current liabilities | 253,313 | 248,015 |
Deferred income taxes | 16,125 | 15,696 |
Other liabilities | 1,855 | 1,888 |
Total Liabilities | 271,293 | 265,599 |
Stockholders' Equity: | ||
Common stock | 287 | 287 |
Additional paid-in capital | 115,224 | 114,154 |
Retained earnings | 414,396 | 383,673 |
Treasury stock, at cost | (20,246) | (15,862) |
Total Stockholders' Equity | 509,661 | 482,252 |
Total Liabilities and Stockholders' Equity | $ 780,954 | $ 747,851 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Condensed Consolidated Statements of Income | ||||
Net sales | $ 706,570 | $ 749,792 | $ 1,331,465 | $ 1,420,386 |
Cost of sales | 599,102 | 650,122 | 1,127,625 | 1,233,983 |
Gross profit | 107,468 | 99,670 | 203,840 | 186,403 |
Selling, general and administrative expenses | 82,521 | 77,230 | 163,421 | 152,511 |
Income from operations | 24,947 | 22,440 | 40,419 | 33,892 |
Interest income, net | 182 | 9 | 298 | 28 |
Income before taxes | 25,129 | 22,449 | 40,717 | 33,920 |
Income tax provision | (6,903) | (8,864) | (11,191) | (12,903) |
Net income | $ 18,226 | $ 13,585 | $ 29,526 | $ 21,017 |
Earnings per common share: | ||||
Basic | $ 0.68 | $ 0.51 | $ 1.10 | $ 0.79 |
Diluted | $ 0.68 | $ 0.51 | $ 1.10 | $ 0.78 |
Shares used in computation of earnings per common share: | ||||
Basic | 26,685 | 26,761 | 26,760 | 26,729 |
Diluted | 26,820 | 26,893 | 26,868 | 26,879 |
CONDENSED CONSOLIDATED STATEME4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Cash Flows from Operating Activities: | ||
Net income | $ 29,526 | $ 21,017 |
Adjustments to reconcile net income to net cash provided by (used for) operating activities: | ||
Depreciation and amortization | 6,729 | 5,710 |
Provision for doubtful accounts | 694 | 613 |
Stock-based compensation expense | 465 | 385 |
Deferred income taxes | 429 | 164 |
Changes in assets and liabilities: | ||
Accounts receivable | 1,452 | (15,169) |
Inventories | (11,565) | (27,691) |
Prepaid expenses, income tax receivables and other current assets | 2,326 | (2,548) |
Other non-current assets | (1,997) | (4,077) |
Accounts payable | 6,163 | 8,930 |
Accrued expenses and other liabilities | 7,296 | 2,908 |
Net cash provided by (used for) operating activities | 41,518 | (9,758) |
Cash Flows used for Investing Activities: | ||
Purchases of equipment | (9,927) | (4,531) |
Net cash used for investing activities | (9,927) | (4,531) |
Cash Flows used for Financing Activities: | ||
Proceeds from short-term borrowings | 859 | |
Repayment of short-term borrowings | (859) | |
Purchase of treasury shares | (4,384) | |
Dividend payment | (9,122) | (9,041) |
Exercise of stock options | 1,678 | |
Issuance of stock under Employee Stock Purchase Plan | 605 | 603 |
Net cash (used for) provided by financing activities | (12,901) | (6,760) |
Increase (decrease) in cash and cash equivalents | 18,690 | (21,049) |
Cash and cash equivalents, beginning of period | 49,990 | 49,180 |
Cash and cash equivalents, end of period | 68,680 | 28,131 |
Non-cash Investing and Financing Activities: | ||
Accrued capital expenditures | 1,281 | 662 |
Supplemental Cash Flow Information: | ||
Income taxes paid | $ 8,309 | $ 15,705 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 2018 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | Note 1–Basis of Presentation The accompanying unaudited condensed consolidated financial statements of PC Connection, Inc. and its subsidiaries (the “Company,” “we,” “us,” or “our”) have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission regarding interim financial reporting and in accordance with accounting principles generally accepted in the United States of America. Such principles were applied on a basis consistent with the accounting policies described in our Annual Report on Form 10-K for the year ended December 31, 2017, filed with the Securities and Exchange Commission (the “SEC”), other than the adoption of Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers” (“ASC 606”) under the modified retrospective method as of January 1, 2018, as discussed below. The accompanying condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements contained in our Annual Report on Form 10-K. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of the results of operations for the interim periods reported and of the Company’s financial condition as of the date of the interim balance sheet. The Company considers events or transactions that occur after the balance sheet date but before the financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. Subsequent events have been evaluated through the date of issuance of these financial statements. The operating results for the three and six months ended June 30, 2018 may not be indicative of the results expected for any succeeding quarter or the entire year ending December 31, 2018. Revenue Recognition On January 1, 2018, we adopted ASC 606, which replaced existing revenue recognition rules with a comprehensive revenue measurement and recognition standard and expanded disclosure requirements. See Adoption of Recently Issued Accounting Standards in this footnote for additional information. Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services. We enter into contracts that can include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations. In most instances, when several performance obligations are aggregated into one single transaction, these performance obligations are fulfilled at the same point of time. We account for an arrangement when it has approval and commitment from both parties, the rights are identified, the contract has commercial substance, and collectability of consideration is probable. We generally obtain oral or written purchase authorizations from our customers for a specified amount of product at a specified price, which constitutes an arrangement. Revenue is recognized at the amount expected to be collected, net of any taxes collected from customers, which are subsequently remitted to governmental authorities. We generally invoice for our products at the time of shipping, and accordingly there is not a significant financing component included in our arrangements. Nature of Products and Services Information technology (“IT”) products typically represent a distinct performance obligation, and revenue is recognized at the point in time when control is transferred to the customer which varies based on terms of the arrangement. We recognize revenue as the principal in the transaction with the customer (i.e., on a gross basis), as we control the product prior to delivery to the customer and derive the economic benefits from the sales transaction given our control over customer pricing. We do not recognize revenue for goods that remain in our physical possession before the customer has the ability to direct the use of, and obtain substantially all of the remaining benefits from the products, the goods are ready for physical transfer to and identified as belonging to the customer, and when we have no ability to use the product or to direct it to another customer. Licenses for on premise software provide the customer with a right to take possession of the software. Customers may purchase perpetual licenses or enter into subscriptions to the licensed software. We are the principal in these transactions and recognize revenue for the on premise license at the point in time when the software is made available to the customer and upon the commencement of the term of the software or when the renewal term begins, as applicable. For certain on premise licenses for security software, the customer derives substantially all of the benefit from these arrangements through the third-party delivered software maintenance which provides software updates and other support services. We do not have control over the delivery of these performance obligations, and accordingly we are the agent in these transactions. We recognize revenue for security software net of the related costs of sales at the point in time when our vendor and customer accept the terms and conditions in the sales arrangement. Cloud products allow customers to use hosted software over the contractual period without taking possession of the software and are provided on a subscription basis. We do not exercise control over these products and therefore are an agent in these transactions. We recognize revenue for cloud products net of the related costs of sales at the point in time when our vendor and customer accept the terms and conditions in the sales arrangements. Certain software sales include on premise licenses that are combined with software maintenance. Software maintenance conveys rights to updates, bug fixes and help desk, and other support services transferred over the underlying contract period. On premise licenses are considered distinct performance obligations when sold with the software maintenance, as we sell these separately. We recognize revenue related to the software maintenance as the agent in these transactions because we do not have control over the on-going software maintenance service. Revenue allocated to software maintenance is recognized at the point in time when our vendor and customer accept the terms and conditions in the sales arrangements. Certain of our larger customers are offered the opportunity by vendors to purchase software licenses and maintenance under enterprise agreements (“EAs”). Under EAs, customers are considered to be compliant with applicable license requirements for the ensuing year, regardless of changes to their employee base. Customers are charged an annual true-up fee for changes in the number of users over the year. With most EAs, our vendors will transfer the license and bill the customer directly, paying resellers, such as us an agency fee or commission on these sales. We record these agency fees as a component of net sales as earned and there is no corresponding cost of sales amount. In certain instances, we invoice the customer directly under an EA and account for the individual items sold based on the nature of each item. Our vendors typically dictate how the EA will be sold to the customer. We also offer extended service plans (“ESP”) on IT products, both as part of the initial arrangement and separately from the IT products. We recognize revenue related to ESP as the agent in the transaction because we do not have control over the on-going ESP service. Revenue allocated to ESP is recognized at the point in time when our vendor and customer accept the terms and conditions in the sales arrangement. We use our own engineering personnel in projects involving the design and installation of systems and networks, and we also engage third-party service providers to perform warranty maintenance, implementations, asset disposal, and other services. Service revenue is recognized in general over time as we perform the underlying services and satisfy our performance obligations. We evaluate such engagements to determine whether we are the principal or the agent in each transaction. For those transactions in which we do not control the service, we act as an agent and recognize the transaction revenue on a net basis at a point in time when the vendor and customer accept the terms and conditions in the sales arrangement. All amounts billed to a customer in a sales transaction related to shipping and handling, if any, represent revenues earned for the goods provided, and these amounts have been included in net sales. Costs related to such shipping and handling billing are classified as cost of sales. Sales are reported net of sales, use, or other transaction taxes that are collected from customers and remitted to taxing authorities. Significant Judgments Our contracts with customers often include promises to transfer multiple products or services to a customer. Determining whether we are the agent or the principal and whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. We estimate SSP for each distinct performance obligation when a single arrangement contains multiple performance obligations and the fulfillment occurs at different points of times. We maximize the use of observable inputs in the determination of the estimate for SSP for the items that we do not sell separately, including on-premises license sold with software maintenance, and IT products sold with ESP. In instances where SSP is not directly observable, such as when we do not sell the product or service separately, we determine the SSP using information that may include market conditions and other observable inputs. We provide our customers with a limited thirty-day right of return which is generally limited to defective merchandise. Revenue is recognized at delivery and a reserve for sales returns is recorded. We make estimates of product returns based on significant historical experience and record our sales return reserves as a reduction of revenues and either as reduction of accounts receivable or, for customers who have already paid, as accrued expenses. Description of Revenue We disaggregate revenue from our arrangements with customers by type of products and services, as we believe this method best depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. The following table represents a disaggregation of revenue from arrangements with customers for the three months ended June 30, 2018 and 2017, along with the reportable segment for each category. Three Months Ended June 30, 2018 Business Enterprise Public Sector Total Notebooks/Mobility $ 81,999 $ 68,545 $ 35,261 $ 185,805 Software 38,375 37,363 11,043 86,781 Desktops 28,399 30,006 18,762 77,167 Servers/Storage 27,303 24,295 16,499 68,097 Net/Com products 29,140 20,124 11,115 60,379 Other hardware/services 64,826 120,732 42,783 228,341 Total net sales $ 270,042 $ 301,065 $ 135,463 $ 706,570 Three Months Ended June 30, 2017 Business Enterprise Public Sector Total Notebooks/Mobility $ 75,900 $ 49,964 $ 34,340 $ 160,204 Software 70,075 80,815 22,179 173,069 Desktops 29,685 24,171 21,321 75,177 Servers/Storage 30,304 19,120 13,994 63,418 Net/Com products 24,777 19,999 16,186 60,962 Other hardware/services 65,679 108,008 43,275 216,962 Total net sales $ 296,420 $ 302,077 $ 151,295 $ 749,792 The following table represents a disaggregation of revenue from arrangements with customers for the six months ended June 30, 2018 and 2017, along with the reportable segment for each category. Six Months Ended June 30, 2018 Business Enterprise Public Sector Total Notebooks/Mobility $ 153,728 $ 131,983 $ 59,159 $ 344,870 Software 72,799 65,804 17,906 156,509 Desktops 56,690 61,232 28,836 146,758 Servers/Storage 58,804 48,838 33,638 141,280 Net/Com products 56,166 32,492 23,873 112,531 Other hardware/services 135,133 217,960 76,424 429,517 Total net sales $ 533,320 $ 558,309 $ 239,836 $ 1,331,465 Six Months Ended June 30, 2017 Business Enterprise Public Sector Total Notebooks/Mobility $ 148,778 $ 99,964 $ 60,630 $ 309,372 Software 129,878 135,697 36,805 302,380 Desktops 56,145 50,142 61,176 167,463 Servers/Storage 56,807 40,774 26,180 123,761 Net/Com products 47,746 36,470 33,710 117,926 Other hardware/services 130,699 191,948 76,837 399,484 Total net sales $ 570,053 $ 554,995 $ 295,338 $ 1,420,386 Contract Balances The following table provides information about contract liability from arrangements with customers as of June 30, 2018 and January 1, 2018: June 30, 2018 January 1, 2018 Contract liability, which are included in "Accrued expenses and other liabilities" $ 8,433 $ 2,914 Significant changes in the contract liability balances during the three and six months ended June 30, 2018 are as follows (in thousands): Three Months Ended June 30, Balances at April 1, 2018 $ 3,087 Reclassification of the beginning contract liability to revenue, as the result of performance obligations satisfied (1,830) Cash received in advance and not recognized as revenue 7,176 Balances at June 30, 2018 $ 8,433 Six Months Ended June 30, Balances at January 1, 2018 $ 2,914 Reclassification of the beginning contract liability to revenue, as the result of performance obligations satisfied (2,976) Cash received in advance and not recognized as revenue 8,495 Balances at June 30, 2018 $ 8,433 Use of Estimates in the Preparation of Financial Statements The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions. These estimates and assumptions affect the amounts reported in the accompanying condensed consolidated financial statements. Actual results could differ from those estimates. Comprehensive Income We had no items of comprehensive income, other than our net income for each of the periods presented. Adoption of Recently Issued Accounting Standards On May 28, 2014, the Financial Accounting Standards Board, or the FASB, issued ASC 606, which amends the existing accounting standards for revenue recognition and expanded our disclosure requirements. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. On January 1, 2018 we adopted ASC 606 using the modified retrospective transition method which resulted in an adjustment at January 1, 2018, to retained earnings for the cumulative effect of applying the standard to all contracts not completed as of the adoption date. Upon adoption we recorded $1,197 as an increase to retained earnings. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. The adoption resulted in an acceleration of the timing of revenue recognized for certain transactions where product that remained in our possession has been recognized as of the transaction date when all revenue recognition criteria have been met. The following table presents the effect of the adoption of ASC 606 on our condensed consolidated balance sheet as of January 1, 2018: Adjustments Balance at Due to ASU Balance at December 31, 2017 2014-09 January 1, 2018 Balance Sheet Assets Accounts receivable, net $ 449,682 $ 14,568 $ 464,250 Inventories 106,753 (10,869) 95,884 Prepaid expenses and other current assets 5,737 (132) 5,605 Long-term accounts receivable — 1,890 1,890 Other assets 5,638 (3,914) 1,724 Liabilities Accounts payable 194,257 (62) 194,195 Accrued expenses and other liabilities 31,096 (312) 30,784 Accrued payroll 22,662 291 22,953 Deferred income taxes 15,696 429 16,125 Stockholders' Equity Retained earnings $ 383,673 $ 1,197 $ 384,870 In addition to the timing of revenue recognition impacted by the above described transactions, upon adoption of ASC 606, the amount of revenue to be recognized prospectively was affected by the presentation of revenue transactions as an agent instead of principal in the following transactions: Revenue related to the sale of cloud products as well as certain security software is now being recognized net of costs of sales as we determined that we act as an agent in these transactions. These sales are recorded on a net basis at a point in time when our vendor and the customer accept the terms and conditions in the sales arrangement. In addition, we sell third-party software maintenance that is delivered over time either separately or bundled with the software license. We have determined that software maintenance is a distinct performance obligation that we do not control, and accordingly, we act as an agent in these transactions and will recognize the related revenue on a net basis under ASC 606. We previously recognized revenue for cloud products, security software, and software maintenance on a gross basis (i.e., acting as a principal). This change reduced both net sales and cost of sales with no impact on reported gross profit as compared to our prior accounting policies. The following tables present the effect of the adoption of ASC 606 on our condensed consolidated income statement and balance sheet and for the three and six months ended June 30, 2018 and as of June 30, 2018, respectively: Three Months Ended June 30, 2018 Six Months Ended June 30, 2018 Balances without Balances without As Adoption of As Adoption of Reported Adjustments ASC 606 Reported Adjustments ASC 606 Income statement Revenues Net sales $ 706,570 $ 113,199 $ 819,769 $ 1,331,465 $ 188,757 $ 1,520,222 Costs and expenses Cost of sales 599,102 111,797 710,899 1,127,625 187,965 1,315,590 Income from operations 24,947 1,081 26,028 40,419 584 41,003 Income before taxes 25,129 1,081 26,210 40,717 584 41,301 Net income 18,226 784 19,010 29,526 422 29,948 June 30, 2018 Balances without As Adoption of Reported Adjustments ASC 606 Balance Sheet Assets Accounts receivable, net $ 463,994 $ (11,014) $ 452,980 Inventories 107,449 10,301 117,750 Prepaid expenses and other current assets 6,279 125 6,404 Long-term receivables 1,890 (1,890) — Other assets 1,831 3,464 5,295 Liabilities Accrued expenses and other liabilities $ 28,915 $ 2,613 $ 31,528 Accrued payroll 23,458 (134) 23,324 Deferred income taxes 16,125 (267) 15,858 Stockholders' Equity Retained earnings $ 414,396 $ (775) $ 413,621 We have elected the use of certain practical expedients in our adoption of the new standard, which includes continuing to record revenue reported net of applicable taxes imposed on the related transaction and the application of the new standard to all arrangements not completed as of the adoption date. We have also elected to use the practical expedient to not account for the shipping and handling as separate performance obligations. Adoptions of the standard related to revenue recognition had no net impact on our condensed consolidated statement of cash flows. Recently Issued Financial Accounting Standards In February 2016, the FASB issued ASU 2016-02, Leases . The new standard establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than twelve months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. We are currently assessing the potential impact of the adoption of ASU 2016-02 on our consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment , which simplifies the accounting for goodwill impairments by eliminating step two from the goodwill impairment test. Instead, 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. ASU 2017-04 also clarifies the requirements for excluding and allocating foreign currency translation adjustments to reporting units related to an entity's testing of reporting units for goodwill impairment and clarifies that an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. The new standard is effective for fiscal years beginning January 1, 2020 for both interim and annual reporting periods. We are currently assessing the potential impact of the adoption of ASC 2017-04 on our consolidated financial statements. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share | |
Earnings Per Share | Note 2–Earnings Per Share Basic earnings per common share is computed using the weighted average number of shares outstanding. Diluted earnings per share is computed using the weighted average number of shares outstanding adjusted for the incremental shares attributable to non-vested stock units and stock options outstanding, if dilutive. The following table sets forth the computation of basic and diluted earnings per share: Three Months Ended Six Months Ended June 30, 2018 2017 2018 2017 Numerator: Net income $ 18,226 $ 13,585 $ 29,526 $ 21,017 Denominator: Denominator for basic earnings per share 26,685 26,761 26,760 26,729 Dilutive effect of employee stock awards 135 132 108 150 Denominator for diluted earnings per share 26,820 26,893 26,868 26,879 Earnings per share: Basic $ 0.68 $ 0.51 $ 1.10 $ 0.79 Diluted $ 0.68 $ 0.51 $ 1.10 $ 0.78 For the three and six months ended June 30, 2018 and 2017, we had no outstanding non-vested stock units that were excluded from the computation of diluted earnings per share because including them would have had an anti-dilutive effect. |
SEGMENT AND RELATED DISCLOSURES
SEGMENT AND RELATED DISCLOSURES | 6 Months Ended |
Jun. 30, 2018 | |
Segment and Related Disclosures | |
Segment and Related Disclosures | Note 3–Segment and Related Disclosures The internal reporting structure used by our chief operating decision maker (“CODM”) to assess performance and allocate resources determines the basis for our reportable operating segments. Our CODM is our Chief Executive Officer, and he evaluates operations and allocates resources based on a measure of operating income. Our operations are organized under three reportable segments—the Business Solutions segment, which serves primarily small- and medium-sized businesses; the Enterprise Solutions segment, which serves primarily medium-to-large corporations; and the Public Sector Solutions segment, which serves primarily federal, state, and local governmental and educational institutions. In addition, the Headquarters/Other group provides services in areas such as finance, human resources, information technology, marketing, and product management. Most of the operating costs associated with the Headquarters/Other group functions are charged to the operating segments based on their estimated usage of the underlying functions. We report these charges to the operating segments as “Allocations.” Certain headquarters costs relating to executive oversight and other fiduciary functions that are not allocated to the operating segments are included under the heading of Headquarters/Other in the tables below. Segment information applicable to our reportable operating segments for the three and six months ended June 30, 2018 and 2017 is shown below: Three Months Ended Six Months Ended June 30, June 30, June 30, June 30, 2018 2017 2018 2017 Net sales: Business Solutions $ 270,042 $ 296,420 $ 533,320 $ 570,053 Enterprise Solutions 301,065 302,077 558,309 554,995 Public Sector Solutions 135,463 151,295 239,836 295,338 Total net sales $ 706,570 $ 749,792 $ 1,331,465 $ 1,420,386 Operating income (loss): Business Solutions $ 10,648 $ 11,280 $ 20,130 $ 19,887 Enterprise Solutions 17,291 14,331 29,969 23,388 Public Sector Solutions 514 (11) (2,611) (2,624) Headquarters/Other (3,506) (3,160) (7,069) (6,759) Total operating income 24,947 22,440 40,419 33,892 Interest income, net 182 9 298 28 Income before taxes $ 25,129 $ 22,449 $ 40,717 $ 33,920 Selected operating expense: Depreciation and amortization: Business Solutions $ 154 $ 149 $ 328 $ 303 Enterprise Solutions 563 548 1,045 1,142 Public Sector Solutions 32 42 66 81 Headquarters/Other 2,679 2,116 5,290 4,184 Total depreciation and amortization $ 3,428 $ 2,855 $ 6,729 $ 5,710 Total assets: Business Solutions $ 261,419 $ 243,312 $ 261,419 $ 243,312 Enterprise Solutions 447,911 377,992 447,911 377,992 Public Sector Solutions 68,679 70,938 68,679 70,938 Headquarters/Other 2,945 21,087 2,945 21,087 Total assets $ 780,954 $ 713,329 $ 780,954 $ 713,329 The assets of our three operating segments presented above consist primarily of accounts receivable, net intercompany receivable, goodwill, and other intangibles. Assets reported under the Headquarters/Other group are managed by corporate headquarters, including cash, inventory, property and equipment, and intercompany balance, net. Total assets for the Headquarters/Other group are presented net of intercompany balance eliminations of $22,882 as of June 30, 2018. Our capital expenditures consist largely of IT hardware and software purchased to maintain or upgrade our management information systems. These information systems serve all of our segments, to varying degrees, and accordingly, our CODM does not evaluate capital expenditures on a segment basis. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies | |
Commitments And Contingencies | Note 4–Commitments and Contingencies We are subject to various legal proceedings and claims, including patent infringement claims, which have arisen during the ordinary course of business. In the opinion of management, the outcome of such matters is not expected to have a material effect on our financial position, results of operations, and cash flows. We are subject to audits by states on sales and income taxes, employment matters, and other assessments. Additional liabilities for these and other audits could be assessed, and such outcomes could have a material, negative impact on our financial position, results of operations, and cash flows. |
BANK BORROWINGS
BANK BORROWINGS | 6 Months Ended |
Jun. 30, 2018 | |
Bank Borrowings | |
Bank Borrowings | Note 5–Bank Borrowing We have a $50,000 credit facility collateralized by our accounts receivable that expires in February 2022. This facility can be increased, at our option, to $80,000 for approved acquisitions or other uses authorized by the lender on substantially the same terms. Amounts outstanding under this facility bear interest at the one-month London Interbank Offered Rate, or LIBOR, plus a spread based on our funded debt ratio, or in the absence of LIBOR, the prime rate (5.00% at June 30, 2018). The one-month LIBOR rate at June 30, 2018 was 2.09%. The credit facility includes various customary financial ratios and operating covenants, including minimum net worth and maximum funded debt ratio requirements, and default acceleration provisions. The credit facility does not include restrictions on future dividend payments. Funded debt ratio is the ratio of average outstanding advances under the credit facility to Adjusted EBITDA (Earnings Before Interest Expense, Taxes, Depreciation, Amortization, and Special Charges). The maximum allowable funded debt ratio under the agreement is 2.0 to 1.0. Decreases in our consolidated Adjusted EBITDA could limit our potential borrowings under the credit facility. We had no outstanding bank borrowings at June 30, 2018 or December 31, 2017, and accordingly, the entire $50,000 facility was available for borrowings under the credit facility. |
BASIS OF PRESENTATION (Tables)
BASIS OF PRESENTATION (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Schedule of disaggregation of revenue from contracts with customers | Three Months Ended June 30, 2018 Business Enterprise Public Sector Total Notebooks/Mobility $ 81,999 $ 68,545 $ 35,261 $ 185,805 Software 38,375 37,363 11,043 86,781 Desktops 28,399 30,006 18,762 77,167 Servers/Storage 27,303 24,295 16,499 68,097 Net/Com products 29,140 20,124 11,115 60,379 Other hardware/services 64,826 120,732 42,783 228,341 Total net sales $ 270,042 $ 301,065 $ 135,463 $ 706,570 Three Months Ended June 30, 2017 Business Enterprise Public Sector Total Notebooks/Mobility $ 75,900 $ 49,964 $ 34,340 $ 160,204 Software 70,075 80,815 22,179 173,069 Desktops 29,685 24,171 21,321 75,177 Servers/Storage 30,304 19,120 13,994 63,418 Net/Com products 24,777 19,999 16,186 60,962 Other hardware/services 65,679 108,008 43,275 216,962 Total net sales $ 296,420 $ 302,077 $ 151,295 $ 749,792 The following table represents a disaggregation of revenue from arrangements with customers for the six months ended June 30, 2018 and 2017, along with the reportable segment for each category. Six Months Ended June 30, 2018 Business Enterprise Public Sector Total Notebooks/Mobility $ 153,728 $ 131,983 $ 59,159 $ 344,870 Software 72,799 65,804 17,906 156,509 Desktops 56,690 61,232 28,836 146,758 Servers/Storage 58,804 48,838 33,638 141,280 Net/Com products 56,166 32,492 23,873 112,531 Other hardware/services 135,133 217,960 76,424 429,517 Total net sales $ 533,320 $ 558,309 $ 239,836 $ 1,331,465 Six Months Ended June 30, 2017 Business Enterprise Public Sector Total Notebooks/Mobility $ 148,778 $ 99,964 $ 60,630 $ 309,372 Software 129,878 135,697 36,805 302,380 Desktops 56,145 50,142 61,176 167,463 Servers/Storage 56,807 40,774 26,180 123,761 Net/Com products 47,746 36,470 33,710 117,926 Other hardware/services 130,699 191,948 76,837 399,484 Total net sales $ 570,053 $ 554,995 $ 295,338 $ 1,420,386 |
Schedule of information on contract liability | The following table provides information about contract liability from arrangements with customers as of June 30, 2018 and January 1, 2018: June 30, 2018 January 1, 2018 Contract liability, which are included in "Accrued expenses and other liabilities" $ 8,433 $ 2,914 Significant changes in the contract liability balances during the three and six months ended June 30, 2018 are as follows (in thousands): Three Months Ended June 30, Balances at April 1, 2018 $ 3,087 Reclassification of the beginning contract liability to revenue, as the result of performance obligations satisfied (1,830) Cash received in advance and not recognized as revenue 7,176 Balances at June 30, 2018 $ 8,433 Six Months Ended June 30, Balances at January 1, 2018 $ 2,914 Reclassification of the beginning contract liability to revenue, as the result of performance obligations satisfied (2,976) Cash received in advance and not recognized as revenue 8,495 Balances at June 30, 2018 $ 8,433 |
ASU 2014-09 | |
Schedule of the effect of the adoption of ASU 2014-09 | The following table presents the effect of the adoption of ASC 606 on our condensed consolidated balance sheet as of January 1, 2018: Adjustments Balance at Due to ASU Balance at December 31, 2017 2014-09 January 1, 2018 Balance Sheet Assets Accounts receivable, net $ 449,682 $ 14,568 $ 464,250 Inventories 106,753 (10,869) 95,884 Prepaid expenses and other current assets 5,737 (132) 5,605 Long-term accounts receivable — 1,890 1,890 Other assets 5,638 (3,914) 1,724 Liabilities Accounts payable 194,257 (62) 194,195 Accrued expenses and other liabilities 31,096 (312) 30,784 Accrued payroll 22,662 291 22,953 Deferred income taxes 15,696 429 16,125 Stockholders' Equity Retained earnings $ 383,673 $ 1,197 $ 384,870 The following tables present the effect of the adoption of ASC 606 on our condensed consolidated income statement and balance sheet and for the three and six months ended June 30, 2018 and as of June 30, 2018, respectively: Three Months Ended June 30, 2018 Six Months Ended June 30, 2018 Balances without Balances without As Adoption of As Adoption of Reported Adjustments ASC 606 Reported Adjustments ASC 606 Income statement Revenues Net sales $ 706,570 $ 113,199 $ 819,769 $ 1,331,465 $ 188,757 $ 1,520,222 Costs and expenses Cost of sales 599,102 111,797 710,899 1,127,625 187,965 1,315,590 Income from operations 24,947 1,081 26,028 40,419 584 41,003 Income before taxes 25,129 1,081 26,210 40,717 584 41,301 Net income 18,226 784 19,010 29,526 422 29,948 June 30, 2018 Balances without As Adoption of Reported Adjustments ASC 606 Balance Sheet Assets Accounts receivable, net $ 463,994 $ (11,014) $ 452,980 Inventories 107,449 10,301 117,750 Prepaid expenses and other current assets 6,279 125 6,404 Long-term receivables 1,890 (1,890) — Other assets 1,831 3,464 5,295 Liabilities Accrued expenses and other liabilities $ 28,915 $ 2,613 $ 31,528 Accrued payroll 23,458 (134) 23,324 Deferred income taxes 16,125 (267) 15,858 Stockholders' Equity Retained earnings $ 414,396 $ (775) $ 413,621 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share | |
Computation of Basic and Diluted Earnings Per Share | The following table sets forth the computation of basic and diluted earnings per share: Three Months Ended Six Months Ended June 30, 2018 2017 2018 2017 Numerator: Net income $ 18,226 $ 13,585 $ 29,526 $ 21,017 Denominator: Denominator for basic earnings per share 26,685 26,761 26,760 26,729 Dilutive effect of employee stock awards 135 132 108 150 Denominator for diluted earnings per share 26,820 26,893 26,868 26,879 Earnings per share: Basic $ 0.68 $ 0.51 $ 1.10 $ 0.79 Diluted $ 0.68 $ 0.51 $ 1.10 $ 0.78 |
SEGMENT AND RELATED DISCLOSUR12
SEGMENT AND RELATED DISCLOSURES (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Segment and Related Disclosures | |
Segment Information Applicable to Reportable Operating Segments | Segment information applicable to our reportable operating segments for the three and six months ended June 30, 2018 and 2017 is shown below: Three Months Ended Six Months Ended June 30, June 30, June 30, June 30, 2018 2017 2018 2017 Net sales: Business Solutions $ 270,042 $ 296,420 $ 533,320 $ 570,053 Enterprise Solutions 301,065 302,077 558,309 554,995 Public Sector Solutions 135,463 151,295 239,836 295,338 Total net sales $ 706,570 $ 749,792 $ 1,331,465 $ 1,420,386 Operating income (loss): Business Solutions $ 10,648 $ 11,280 $ 20,130 $ 19,887 Enterprise Solutions 17,291 14,331 29,969 23,388 Public Sector Solutions 514 (11) (2,611) (2,624) Headquarters/Other (3,506) (3,160) (7,069) (6,759) Total operating income 24,947 22,440 40,419 33,892 Interest income, net 182 9 298 28 Income before taxes $ 25,129 $ 22,449 $ 40,717 $ 33,920 Selected operating expense: Depreciation and amortization: Business Solutions $ 154 $ 149 $ 328 $ 303 Enterprise Solutions 563 548 1,045 1,142 Public Sector Solutions 32 42 66 81 Headquarters/Other 2,679 2,116 5,290 4,184 Total depreciation and amortization $ 3,428 $ 2,855 $ 6,729 $ 5,710 Total assets: Business Solutions $ 261,419 $ 243,312 $ 261,419 $ 243,312 Enterprise Solutions 447,911 377,992 447,911 377,992 Public Sector Solutions 68,679 70,938 68,679 70,938 Headquarters/Other 2,945 21,087 2,945 21,087 Total assets $ 780,954 $ 713,329 $ 780,954 $ 713,329 |
BASIS OF PRESENTATION - Disaggr
BASIS OF PRESENTATION - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Disaggregation of revenue | ||||
Net sales | $ 706,570 | $ 1,331,465 | ||
Notebooks/Mobility | ||||
Disaggregation of revenue | ||||
Net sales | 185,805 | 344,870 | ||
Software | ||||
Disaggregation of revenue | ||||
Net sales | 86,781 | 156,509 | ||
Desktops | ||||
Disaggregation of revenue | ||||
Net sales | 77,167 | 146,758 | ||
Servers/Storage | ||||
Disaggregation of revenue | ||||
Net sales | 68,097 | 141,280 | ||
Net/Com products | ||||
Disaggregation of revenue | ||||
Net sales | 60,379 | 112,531 | ||
Other hardware/services | ||||
Disaggregation of revenue | ||||
Net sales | 228,341 | 429,517 | ||
Business Solutions | ||||
Disaggregation of revenue | ||||
Net sales | 270,042 | 533,320 | ||
Business Solutions | Notebooks/Mobility | ||||
Disaggregation of revenue | ||||
Net sales | 81,999 | 153,728 | ||
Business Solutions | Software | ||||
Disaggregation of revenue | ||||
Net sales | 38,375 | 72,799 | ||
Business Solutions | Desktops | ||||
Disaggregation of revenue | ||||
Net sales | 28,399 | 56,690 | ||
Business Solutions | Servers/Storage | ||||
Disaggregation of revenue | ||||
Net sales | 27,303 | 58,804 | ||
Business Solutions | Net/Com products | ||||
Disaggregation of revenue | ||||
Net sales | 29,140 | 56,166 | ||
Business Solutions | Other hardware/services | ||||
Disaggregation of revenue | ||||
Net sales | 64,826 | 135,133 | ||
Enterprise Solutions | ||||
Disaggregation of revenue | ||||
Net sales | 301,065 | 558,309 | ||
Enterprise Solutions | Notebooks/Mobility | ||||
Disaggregation of revenue | ||||
Net sales | 68,545 | 131,983 | ||
Enterprise Solutions | Software | ||||
Disaggregation of revenue | ||||
Net sales | 37,363 | 65,804 | ||
Enterprise Solutions | Desktops | ||||
Disaggregation of revenue | ||||
Net sales | 30,006 | 61,232 | ||
Enterprise Solutions | Servers/Storage | ||||
Disaggregation of revenue | ||||
Net sales | 24,295 | 48,838 | ||
Enterprise Solutions | Net/Com products | ||||
Disaggregation of revenue | ||||
Net sales | 20,124 | 32,492 | ||
Enterprise Solutions | Other hardware/services | ||||
Disaggregation of revenue | ||||
Net sales | 120,732 | 217,960 | ||
Public Sector Solutions | ||||
Disaggregation of revenue | ||||
Net sales | 135,463 | 239,836 | ||
Public Sector Solutions | Notebooks/Mobility | ||||
Disaggregation of revenue | ||||
Net sales | 35,261 | 59,159 | ||
Public Sector Solutions | Software | ||||
Disaggregation of revenue | ||||
Net sales | 11,043 | 17,906 | ||
Public Sector Solutions | Desktops | ||||
Disaggregation of revenue | ||||
Net sales | 18,762 | 28,836 | ||
Public Sector Solutions | Servers/Storage | ||||
Disaggregation of revenue | ||||
Net sales | 16,499 | 33,638 | ||
Public Sector Solutions | Net/Com products | ||||
Disaggregation of revenue | ||||
Net sales | 11,115 | 23,873 | ||
Public Sector Solutions | Other hardware/services | ||||
Disaggregation of revenue | ||||
Net sales | 42,783 | 76,424 | ||
Calculated under Revenue Guidance in Effect before Topic 606 | ||||
Disaggregation of revenue | ||||
Net sales | $ 819,769 | $ 749,792 | $ 1,520,222 | $ 1,420,386 |
Calculated under Revenue Guidance in Effect before Topic 606 | Notebooks/Mobility | ||||
Disaggregation of revenue | ||||
Net sales | 160,204 | 309,372 | ||
Calculated under Revenue Guidance in Effect before Topic 606 | Software | ||||
Disaggregation of revenue | ||||
Net sales | 173,069 | 302,380 | ||
Calculated under Revenue Guidance in Effect before Topic 606 | Desktops | ||||
Disaggregation of revenue | ||||
Net sales | 75,177 | 167,463 | ||
Calculated under Revenue Guidance in Effect before Topic 606 | Servers/Storage | ||||
Disaggregation of revenue | ||||
Net sales | 63,418 | 123,761 | ||
Calculated under Revenue Guidance in Effect before Topic 606 | Net/Com products | ||||
Disaggregation of revenue | ||||
Net sales | 60,962 | 117,926 | ||
Calculated under Revenue Guidance in Effect before Topic 606 | Other hardware/services | ||||
Disaggregation of revenue | ||||
Net sales | 216,962 | 399,484 | ||
Calculated under Revenue Guidance in Effect before Topic 606 | Business Solutions | ||||
Disaggregation of revenue | ||||
Net sales | 296,420 | 570,053 | ||
Calculated under Revenue Guidance in Effect before Topic 606 | Business Solutions | Notebooks/Mobility | ||||
Disaggregation of revenue | ||||
Net sales | 75,900 | 148,778 | ||
Calculated under Revenue Guidance in Effect before Topic 606 | Business Solutions | Software | ||||
Disaggregation of revenue | ||||
Net sales | 70,075 | 129,878 | ||
Calculated under Revenue Guidance in Effect before Topic 606 | Business Solutions | Desktops | ||||
Disaggregation of revenue | ||||
Net sales | 29,685 | 56,145 | ||
Calculated under Revenue Guidance in Effect before Topic 606 | Business Solutions | Servers/Storage | ||||
Disaggregation of revenue | ||||
Net sales | 30,304 | 56,807 | ||
Calculated under Revenue Guidance in Effect before Topic 606 | Business Solutions | Net/Com products | ||||
Disaggregation of revenue | ||||
Net sales | 24,777 | 47,746 | ||
Calculated under Revenue Guidance in Effect before Topic 606 | Business Solutions | Other hardware/services | ||||
Disaggregation of revenue | ||||
Net sales | 65,679 | 130,699 | ||
Calculated under Revenue Guidance in Effect before Topic 606 | Enterprise Solutions | ||||
Disaggregation of revenue | ||||
Net sales | 302,077 | 554,995 | ||
Calculated under Revenue Guidance in Effect before Topic 606 | Enterprise Solutions | Notebooks/Mobility | ||||
Disaggregation of revenue | ||||
Net sales | 49,964 | 99,964 | ||
Calculated under Revenue Guidance in Effect before Topic 606 | Enterprise Solutions | Software | ||||
Disaggregation of revenue | ||||
Net sales | 80,815 | 135,697 | ||
Calculated under Revenue Guidance in Effect before Topic 606 | Enterprise Solutions | Desktops | ||||
Disaggregation of revenue | ||||
Net sales | 24,171 | 50,142 | ||
Calculated under Revenue Guidance in Effect before Topic 606 | Enterprise Solutions | Servers/Storage | ||||
Disaggregation of revenue | ||||
Net sales | 19,120 | 40,774 | ||
Calculated under Revenue Guidance in Effect before Topic 606 | Enterprise Solutions | Net/Com products | ||||
Disaggregation of revenue | ||||
Net sales | 19,999 | 36,470 | ||
Calculated under Revenue Guidance in Effect before Topic 606 | Enterprise Solutions | Other hardware/services | ||||
Disaggregation of revenue | ||||
Net sales | 108,008 | 191,948 | ||
Calculated under Revenue Guidance in Effect before Topic 606 | Public Sector Solutions | ||||
Disaggregation of revenue | ||||
Net sales | 151,295 | 295,338 | ||
Calculated under Revenue Guidance in Effect before Topic 606 | Public Sector Solutions | Notebooks/Mobility | ||||
Disaggregation of revenue | ||||
Net sales | 34,340 | 60,630 | ||
Calculated under Revenue Guidance in Effect before Topic 606 | Public Sector Solutions | Software | ||||
Disaggregation of revenue | ||||
Net sales | 22,179 | 36,805 | ||
Calculated under Revenue Guidance in Effect before Topic 606 | Public Sector Solutions | Desktops | ||||
Disaggregation of revenue | ||||
Net sales | 21,321 | 61,176 | ||
Calculated under Revenue Guidance in Effect before Topic 606 | Public Sector Solutions | Servers/Storage | ||||
Disaggregation of revenue | ||||
Net sales | 13,994 | 26,180 | ||
Calculated under Revenue Guidance in Effect before Topic 606 | Public Sector Solutions | Net/Com products | ||||
Disaggregation of revenue | ||||
Net sales | 16,186 | 33,710 | ||
Calculated under Revenue Guidance in Effect before Topic 606 | Public Sector Solutions | Other hardware/services | ||||
Disaggregation of revenue | ||||
Net sales | $ 43,275 | $ 76,837 |
BASIS OF PRESENTATION - Contrac
BASIS OF PRESENTATION - Contract Balances (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2018 | Jan. 02, 2018 | |
Change in contract liability | |||
Beginning balance - Contract liability | $ 3,087 | $ 2,914 | |
Reclassification of the beginning contract liability to revenue, as the result of performance obligations satisfied | (1,830) | (2,976) | |
Cash received in advance and not recognized as revenue | 7,176 | 8,495 | |
Ending balance - Contract liability | 8,433 | 8,433 | |
Accrued expenses and other liabilities | |||
Contract liabilities | |||
Contract liability | $ 8,433 | $ 8,433 | $ 2,914 |
BASIS OF PRESENTATION - Effect
BASIS OF PRESENTATION - Effect of Adoption of ASU 2014-09 (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Jan. 02, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | |
REVENUES | |||||||
Net sales | $ 706,570 | $ 1,331,465 | |||||
Costs and expenses | |||||||
Cost of sales | 599,102 | 1,127,625 | |||||
Income from operations | 24,947 | $ 22,440 | 40,419 | $ 33,892 | |||
Income before taxes | 25,129 | 22,449 | 40,717 | 33,920 | |||
Net income | 18,226 | 13,585 | 29,526 | 21,017 | |||
ASSETS | |||||||
Accounts receivable, net | 463,994 | 463,994 | $ 464,250 | $ 449,682 | |||
Inventories, net | 107,449 | 107,449 | 95,884 | 106,753 | |||
Prepaid expenses and other current assets | 6,279 | 6,279 | 5,605 | 5,737 | |||
Long-term accounts receivable | 1,890 | 1,890 | 1,890 | ||||
Other assets | 1,831 | 1,831 | 1,724 | 5,638 | |||
LIABILITIES | |||||||
Accounts payable | 200,940 | 200,940 | 194,195 | 194,257 | |||
Accrued expenses and other liabilities | 28,915 | 28,915 | 30,784 | 31,096 | |||
Accrued payroll | 23,458 | 23,458 | 22,953 | 22,662 | |||
Deferred income taxes | 16,125 | 16,125 | 16,125 | 15,696 | |||
STOCKHOLDERS' EQUITY | |||||||
Retained earnings | 414,396 | 414,396 | $ 384,870 | $ 383,673 | |||
Difference between Revenue Guidance in Effect before and after Topic 606 | ASU 2014-09 | |||||||
REVENUES | |||||||
Net sales | 113,199 | 188,757 | |||||
Costs and expenses | |||||||
Cost of sales | 111,797 | 187,965 | |||||
Income from operations | 1,081 | 584 | |||||
Income before taxes | 1,081 | 584 | |||||
Net income | 784 | 422 | |||||
ASSETS | |||||||
Accounts receivable, net | (11,014) | (11,014) | $ 14,568 | ||||
Inventories, net | 10,301 | 10,301 | (10,869) | ||||
Prepaid expenses and other current assets | 125 | 125 | (132) | ||||
Long-term accounts receivable | (1,890) | (1,890) | 1,890 | ||||
Other assets | 3,464 | 3,464 | (3,914) | ||||
LIABILITIES | |||||||
Accounts payable | (62) | ||||||
Accrued expenses and other liabilities | 2,613 | 2,613 | (312) | ||||
Accrued payroll | (134) | (134) | 291 | ||||
Deferred income taxes | (267) | (267) | 429 | ||||
STOCKHOLDERS' EQUITY | |||||||
Retained earnings | (775) | (775) | $ 1,197 | ||||
Calculated under Revenue Guidance in Effect before Topic 606 | |||||||
REVENUES | |||||||
Net sales | 819,769 | 749,792 | 1,520,222 | 1,420,386 | |||
Costs and expenses | |||||||
Cost of sales | 710,899 | 1,315,590 | |||||
Income from operations | 26,028 | 22,440 | 41,003 | 33,892 | |||
Income before taxes | 26,210 | $ 22,449 | 41,301 | $ 33,920 | |||
Net income | 19,010 | 29,948 | |||||
ASSETS | |||||||
Accounts receivable, net | 452,980 | 452,980 | |||||
Inventories, net | 117,750 | 117,750 | |||||
Prepaid expenses and other current assets | 6,404 | 6,404 | |||||
Other assets | 5,295 | 5,295 | |||||
LIABILITIES | |||||||
Accrued expenses and other liabilities | 31,528 | 31,528 | |||||
Accrued payroll | 23,324 | 23,324 | |||||
Deferred income taxes | 15,858 | 15,858 | |||||
STOCKHOLDERS' EQUITY | |||||||
Retained earnings | $ 413,621 | $ 413,621 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Numerator: | ||||
Net income | $ 18,226 | $ 13,585 | $ 29,526 | $ 21,017 |
Denominator: | ||||
Denominator for basic earnings per share | 26,685 | 26,761 | 26,760 | 26,729 |
Dilutive effect of employee stock awards | 135 | 132 | 108 | 150 |
Denominator for diluted earnings per share | 26,820 | 26,893 | 26,868 | 26,879 |
Earnings per share: | ||||
Basic | $ 0.68 | $ 0.51 | $ 1.10 | $ 0.79 |
Diluted | $ 0.68 | $ 0.51 | $ 1.10 | $ 0.78 |
Additional Disclosure | ||||
Employee stock awards excluded from computation of diluted earnings per share | 0 | 0 | 0 | 0 |
SEGMENT AND RELATED DISCLOSUR17
SEGMENT AND RELATED DISCLOSURES - Segment Information Applicable to Reportable Operating Segments (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($)segment | Jun. 30, 2017USD ($) | Dec. 31, 2017USD ($) | |
Segment Reporting Information | |||||
Number of reportable segments | segment | 3 | ||||
Number of operating segments | segment | 3 | ||||
Net sales: | |||||
Net sales | $ 706,570 | $ 1,331,465 | |||
Operating income (loss): | |||||
Operating income (loss) | 24,947 | $ 22,440 | 40,419 | $ 33,892 | |
Interest income, net | 182 | 9 | 298 | 28 | |
Income before taxes | 25,129 | 22,449 | 40,717 | 33,920 | |
Depreciation and amortization: | |||||
Depreciation and amortization | 3,428 | 6,729 | 5,710 | ||
Total assets: | |||||
Total assets | 780,954 | 780,954 | $ 747,851 | ||
Goodwill | 73,602 | 73,602 | $ 73,602 | ||
Business Solutions | |||||
Net sales: | |||||
Net sales | 270,042 | 533,320 | |||
Enterprise Solutions | |||||
Net sales: | |||||
Net sales | 301,065 | 558,309 | |||
Public Sector Solutions | |||||
Net sales: | |||||
Net sales | 135,463 | 239,836 | |||
Operating Segments | Business Solutions | |||||
Net sales: | |||||
Net sales | 270,042 | 533,320 | |||
Operating income (loss): | |||||
Operating income (loss) | 10,648 | 20,130 | |||
Depreciation and amortization: | |||||
Depreciation and amortization | 154 | 328 | |||
Total assets: | |||||
Total assets | 261,419 | 261,419 | |||
Operating Segments | Enterprise Solutions | |||||
Net sales: | |||||
Net sales | 301,065 | 558,309 | |||
Operating income (loss): | |||||
Operating income (loss) | 17,291 | 29,969 | |||
Depreciation and amortization: | |||||
Depreciation and amortization | 563 | 1,045 | |||
Total assets: | |||||
Total assets | 447,911 | 447,911 | |||
Operating Segments | Public Sector Solutions | |||||
Net sales: | |||||
Net sales | 135,463 | 239,836 | |||
Operating income (loss): | |||||
Operating income (loss) | 514 | (2,611) | |||
Depreciation and amortization: | |||||
Depreciation and amortization | 32 | 66 | |||
Total assets: | |||||
Total assets | 68,679 | 68,679 | |||
Headquarters/Other | |||||
Operating income (loss): | |||||
Operating income (loss) | (3,506) | (7,069) | |||
Depreciation and amortization: | |||||
Depreciation and amortization | 2,679 | 5,290 | |||
Total assets: | |||||
Assets net of intercompany balance eliminations | 2,945 | 2,945 | |||
Intersegment Elimination | |||||
Total assets: | |||||
Total assets | (22,882) | (22,882) | |||
Calculated under Revenue Guidance in Effect before Topic 606 | |||||
Net sales: | |||||
Net sales | 819,769 | 749,792 | 1,520,222 | 1,420,386 | |
Operating income (loss): | |||||
Operating income (loss) | 26,028 | 22,440 | 41,003 | 33,892 | |
Interest income, net | 9 | 28 | |||
Income before taxes | $ 26,210 | 22,449 | $ 41,301 | 33,920 | |
Depreciation and amortization: | |||||
Depreciation and amortization | 2,855 | 5,710 | |||
Total assets: | |||||
Total assets | 713,329 | 713,329 | |||
Calculated under Revenue Guidance in Effect before Topic 606 | Business Solutions | |||||
Net sales: | |||||
Net sales | 296,420 | 570,053 | |||
Calculated under Revenue Guidance in Effect before Topic 606 | Enterprise Solutions | |||||
Net sales: | |||||
Net sales | 302,077 | 554,995 | |||
Calculated under Revenue Guidance in Effect before Topic 606 | Public Sector Solutions | |||||
Net sales: | |||||
Net sales | 151,295 | 295,338 | |||
Calculated under Revenue Guidance in Effect before Topic 606 | Operating Segments | Business Solutions | |||||
Net sales: | |||||
Net sales | 296,420 | 570,053 | |||
Operating income (loss): | |||||
Operating income (loss) | 11,280 | 19,887 | |||
Depreciation and amortization: | |||||
Depreciation and amortization | 149 | 303 | |||
Total assets: | |||||
Total assets | 243,312 | 243,312 | |||
Calculated under Revenue Guidance in Effect before Topic 606 | Operating Segments | Enterprise Solutions | |||||
Net sales: | |||||
Net sales | 302,077 | 554,995 | |||
Operating income (loss): | |||||
Operating income (loss) | 14,331 | 23,388 | |||
Depreciation and amortization: | |||||
Depreciation and amortization | 548 | 1,142 | |||
Total assets: | |||||
Total assets | 377,992 | 377,992 | |||
Calculated under Revenue Guidance in Effect before Topic 606 | Operating Segments | Public Sector Solutions | |||||
Net sales: | |||||
Net sales | 151,295 | 295,338 | |||
Operating income (loss): | |||||
Operating income (loss) | (11) | (2,624) | |||
Depreciation and amortization: | |||||
Depreciation and amortization | 42 | 81 | |||
Total assets: | |||||
Total assets | 70,938 | 70,938 | |||
Calculated under Revenue Guidance in Effect before Topic 606 | Headquarters/Other | |||||
Operating income (loss): | |||||
Operating income (loss) | (3,160) | (6,759) | |||
Depreciation and amortization: | |||||
Depreciation and amortization | 2,116 | 4,184 | |||
Total assets: | |||||
Assets net of intercompany balance eliminations | $ 21,087 | $ 21,087 |
BANK BORROWINGS (Detail)
BANK BORROWINGS (Detail) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Dec. 31, 2017 | |
Subordinated Borrowing | ||
Line of credit, borrowing capacity | $ 50,000 | |
Credit facility, expiration date | Feb. 1, 2022 | |
Line of credit, maximum borrowing capacity | $ 80,000 | |
Debt instrument, description of variable rate basis | one-month LIBOR | |
Debt ratio | 2 | |
Line of credit, outstanding borrowing | $ 0 | $ 0 |
Line of credit, available for borrowing | $ 50,000 | |
Prime Rate | ||
Subordinated Borrowing | ||
Debt instrument, interest rate | 5.00% | |
One-month LIBOR rate | ||
Subordinated Borrowing | ||
Debt instrument, interest rate | 2.09% |