What changed in this filing

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Item 1. Financial Statements

2021-08-05 compared with 2021-05-07 · 90 added, 34 removed, 229 unchanged (35% of the section changed)

35 unchanged sentences

Three Months Ended

Six Months Ended

Cost of sales

Selling, general and administrative expenses

Restructuring and other charges

Income from operations

Other (expenses) income, net

Other income, net

Income before taxes

7 unchanged sentences

(amounts in thousands)

Three months ended March 31, 2021

Three months ended June 30, 2021

Treasury Shares

Paid-In Capital

Balance - March 31, 2021

Stock-based compensation expense

Restricted stock units vested

Shares withheld for taxes paid on stock awards

Balance - June 30, 2021

Six months ended June 30, 2021

Treasury Shares

Paid-In Capital

Balance - December 31, 2020

2 unchanged sentences

Shares withheld for taxes paid on stock awards

Balance - June 30, 2021

See notes to unaudited condensed consolidated financial statements.

Three months ended June 30, 2020

Treasury Shares

Paid-In Capital

Balance - March 31, 2020

Three months ended March 31, 2020

Stock-based compensation expense

Restricted stock units vested

Issuance of common stock under Employee Stock Purchase Plan

Shares withheld for taxes paid on stock awards

Balance - June 30, 2020

Six months ended June 30, 2020

Treasury Shares

3 unchanged sentences

Restricted stock units vested

Issuance of common stock under Employee Stock Purchase Plan

Shares withheld for taxes paid on stock awards

Repurchase of common stock for treasury

Balance - March 31, 2020

Balance - June 30, 2020

See notes to unaudited condensed consolidated financial statements.

3 unchanged sentences

(amounts in thousands)

Three Months Ended

Six Months Ended

Cash Flows provided by Operating Activities:

3 unchanged sentences

Stock-based compensation expense

Loss on disposal of fixed assets

Changes in assets and liabilities:

Accounts receivable

Prepaid expenses, income tax receivables and other current assets

Prepaid expenses and other current assets

Other non-current assets

6 unchanged sentences

Net cash used in investing activities

Cash Flows (used in) provided by Financing Activities:

Cash Flows used in Financing Activities:

Purchase of treasury shares

Dividend payments

Issuance of stock under Employee Stock Purchase Plan

Payment of payroll taxes on stock-based compensation through shares withheld

Net cash used in financing activities

(Decrease) increase in cash and cash equivalents

Increase in cash and cash equivalents

Cash and cash equivalents, beginning of year

19 unchanged sentences

Subsequent events have been evaluated through the date of issuance of these financial statements.

The operating results for the three months ended March 31, 2021 may not be indicative of the results expected for any succeeding quarter or the entire year ending December 31, 2021.

The operating results for the three and six months ended June 30, 2021 may not be indicative of the results expected for any succeeding quarter or the entire year ending December 31, 2021.

Use of Estimates in the Preparation of Financial Statements

15 unchanged sentences

The Company disaggregates revenue from its arrangements with customers by type of products and services, as it believes this method best depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors.

The following tables represent a disaggregation of revenue from arrangements with customers for the three months ended March 31, 2021 and 2020, along with the reportable segment for each category.

Three Months Ended March 31, 2021

The following tables represent a disaggregation of revenue from arrangements with customers for the three months ended June 30, 2021 and 2020, along with the reportable segment for each category.

Three Months Ended June 30, 2021

Public Sector

5 unchanged sentences

Total net sales

Three Months Ended March 31, 2020

Three Months Ended June 30, 2020

Public Sector

5 unchanged sentences

Total net sales

The following table represents a disaggregation of revenue from arrangements with customers for the six months ended June 30, 2021 and 2020, along with the reportable segment for each category.

Six Months Ended June 30, 2021

Public Sector

Notebooks/Mobility

Servers/Storage

Net/Com Products

Displays and Sound

Other Hardware/Services

Total net sales

Six Months Ended June 30, 2020

Public Sector

Notebooks/Mobility

Servers/Storage

Net/Com Products

Displays and Sound

Other Hardware/Services

Total net sales

Contract Balances

The following table provides information about contract liabilities from arrangements with customers as of March 31, 2021 and December 31, 2020.

March 31, 2021

The following table provides information about contract liabilities from arrangements with customers as of June 30, 2021 and December 31, 2020.

June 30, 2021

December 31, 2020

Contract liabilities, which are included in "Accrued expenses and other liabilities"

Changes in the contract liability balances during the three months ended March 31, 2021 and 2020 are as follows (in thousands):

Changes in the contract liability balances during the six months ended June 30, 2021 and 2020 are as follows (in thousands):

Balances at December 31, 2020

1 unchanged sentence

Amounts recognized as revenue as performance obligations satisfied

Balances at March 31, 2021

Balances at June 30, 2021

Balances at December 31, 2019

1 unchanged sentence

Amounts recognized as revenue as performance obligations satisfied

Balances at March 31, 2020

Balances at June 30, 2020

Note 3–Earnings Per Share

2 unchanged sentences

The following table sets forth the computation of basic and diluted earnings per share:

Three Months Ended March 31 ,

Three Months Ended June 30,

Six Months Ended June 30,

Denominator for basic earnings per share

2 unchanged sentences

Earnings per share:

For the three months ended March 31, 2021 and 2020, the Company 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.

For the three and six months ended June 30, 2021 and 2020, the Company 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.

Note 4—Leases

The Company leases certain facilities from a related party, which is a company affiliated with us through common ownership.

Included in the right-of-use asset (“ROU asset”) as of March 31, 2021 was $ 3,179 and a corresponding lease liability of $ 3,179 associated with related party leases.

As of March 31, 2021, there were no additional operating leases that have not yet commenced.

Refer to the following table for quantitative information related to the Company’s leases for the three months ended March 31, 2021 and 2020:

Three months ended March 31, 2021

Three months ended March 31, 2020

Included in the right-of-use asset (“ROU asset”) as of June 30, 2021 was $ 2,894 and a corresponding lease liability of $ 2,894 associated with related party leases.

As of June 30, 2021, there were no additional operating leases that have not yet commenced.

Refer to the following table for quantitative information related to the Company’s leases for the three and six months ended June 30, 2021 and 2020:

Three months ended June 30, 2021

Six months ended June 30, 2021

Related Parties

10 unchanged sentences

Capitalized operating leases

As of March 31, 2021, future lease payments over the remaining term of capitalized operating leases were as follows:

Three months ended June 30, 2020

Six months ended June 30, 2020

Related Parties

Capitalized operating lease cost

Short-term lease cost

Total lease cost

Other Information

Cash paid for amounts included in the measurement of lease liabilities and capitalized operating leases:

Operating cash flows

Weighted-average remaining lease term (in years):

Capitalized operating leases

Weighted-average discount rate:

Capitalized operating leases

As of June 30, 2021, future lease payments over the remaining term of capitalized operating leases were as follows:

For the Years Ended December 31,

Related Parties

2021, excluding the three months ended March 31, 2021

2021, excluding the six months ended June 30, 2021

Imputed interest

Lease liability balance at March 31, 2021

As of March 31, 2021, the ROU asset had a balance of $ 11,857 .

Lease liability balance at June 30, 2021

As of June 30, 2021, the ROU asset had a balance of $ 11,174 .

The long-term lease liability was $ 8,124 and the short-term lease liability, which is included in accrued expenses and other liabilities in the consolidated balance sheets, was $ 3,742 .

As of March 31, 2020, the ROU asset had a balance of $ 15,776 .

As of June 30, 2020, the ROU asset had a balance of $ 14,755 .

The long-term lease liability was $ 11,566 and the short-term lease liability, which is included in accrued expenses and other liabilities in the consolidated balance sheets, was $ 3,999 .

8 unchanged sentences

The Company reports 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 months ended March 31, 2021 and 2020 is shown below:

Segment information applicable to our reportable operating segments for the three and six months ended June 30, 2021 and 2020 is shown below:

Three Months Ended

Six Months Ended

Business Solutions

24 unchanged sentences

Assets reported under the Headquarters/Other group are managed by corporate headquarters, including cash, inventory, property and equipment, right-of-use assets, and intercompany balance, net.

As of March 31, 2021 and 2020, total assets for the Headquarters/Other group are presented net of intercompany balance eliminations of $ 48,026 and $ 7,024 , respectively.

As of June 30, 2021 and 2020, total assets for the Headquarters/Other group are presented net of intercompany balance eliminations of $ 37,457 and $ 29,100 , respectively.

Our capital expenditures consist largely of IT hardware and software purchased to maintain or upgrade our management information systems.

9 unchanged sentences

on substantially the same terms.

Amounts outstanding under this facility bear interest at the one-month LIBOR ( 0.11 % at March 31, 2021), plus a spread based on our funded debt ratio, or in the absence of LIBOR, the prime rate ( 3.25 % at March 31, 2021).

Amounts outstanding under this facility bear interest at the one-month LIBOR ( 0.10 % at June 30, 2021), plus a spread based on our funded debt ratio, or in the absence of LIBOR, the prime rate ( 3.25 % at June 30, 2021).

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.

3 unchanged sentences

Decreases in our consolidated trailing twelve months Adjusted EBITDA could limit our potential borrowing capacity under the credit facility.

The Company had no outstanding bank borrowings at March 31, 2021 or 2020, and accordingly, the entire $ 50,000 facility was available for borrowings under the credit facility.

As of March 31, 2021, the Company was in compliance with all financial covenants contained in the agreement governing the credit facility.

The Company had no outstanding bank borrowings at June 30, 2021 or 2020, and accordingly, the entire $ 50,000 facility was available for borrowings under the credit facility.

As of June 30, 2021, the Company was in compliance with all financial covenants contained in the agreement governing the credit facility.

PC CONNECTION, INC.

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements