What changed in this filing

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Item 1. Financial Statements

2021-11-04 compared with 2021-08-05 · 61 added, 54 removed, 265 unchanged (30% of the section changed)

4 unchanged sentences

(amounts in thousands)

September 30,

Current Assets:

29 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Cost of sales

2 unchanged sentences

Income from operations

Other income, net

Other (expenses) income, net

Income before taxes

7 unchanged sentences

(amounts in thousands)

Three months ended June 30, 2021

Three Months Ended September 30, 2021

Treasury Shares

Paid-In Capital

Balance - March 31, 2021

Balance - June 30, 2021

Stock-based compensation expense

1 unchanged sentence

Shares withheld for taxes paid on stock awards

Balance - June 30, 2021

Six months ended June 30, 2021

Balance - September 30, 2021

Nine Months Ended September 30, 2021

Treasury Shares

4 unchanged sentences

Shares withheld for taxes paid on stock awards

Balance - June 30, 2021

Balance - September 30, 2021

See notes to unaudited condensed consolidated financial statements.

Three months ended June 30, 2020

Three Months Ended September 30, 2020

Treasury Shares

Paid-In Capital

Balance - March 31, 2020

Balance - June 30, 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

Balance - September 30, 2020

Nine Months Ended September 30, 2020

Treasury Shares

6 unchanged sentences

Repurchase of common stock for treasury

Balance - June 30, 2020

Balance - September 30, 2020

See notes to unaudited condensed consolidated financial statements.

3 unchanged sentences

(amounts in thousands)

Six Months Ended

Nine Months Ended

September 30,

Cash Flows provided by Operating Activities:

21 unchanged sentences

Net cash used in financing activities

Increase in cash and cash equivalents

(Decrease) increase in cash and cash equivalents

Cash and cash equivalents, beginning of year

Cash and cash equivalents, end of year

Cash and cash equivalents, end of period

Non-cash Investing and Financing Activities:

11 unchanged sentences

The accompanying unaudited condensed consolidated financial statements of PC Connection, Inc.

and its subsidiaries (the “Company”) 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 the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed with the Securities and Exchange Commission (the “SEC”).

and its subsidiaries (the “Company”) have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) regarding interim financial reporting and in accordance with accounting principles generally accepted in the United States of America (U.S.GAAP).

Such principles were applied on a basis consistent with the accounting policies described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC.

The accompanying condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements contained in the Company’s Annual Report on Form 10-K.

2 unchanged sentences

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, 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 nine months ended September 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

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.

The preparation of financial statements in conformity with U.S.GAAP requires management to make estimates and assumptions.

These estimates and assumptions affect the reported amounts and disclosures of assets and liabilities and the reported amounts and disclosures of revenue and expenses during the period.

13 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 June 30, 2021 and 2020, along with the reportable segment for each category.

Three Months Ended June 30, 2021

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

Three Months Ended September 30, 2021

Public Sector

5 unchanged sentences

Total net sales

Three Months Ended June 30, 2020

Three Months Ended September 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

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

Nine Months Ended September 30, 2021

Public Sector

5 unchanged sentences

Total net sales

Six Months Ended June 30, 2020

Nine Months Ended September 30, 2020

Public Sector

6 unchanged sentences

Contract Balances

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

June 30, 2021

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

September 30, 2021

December 31, 2020

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

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

Changes in the contract liability balances during the nine months ended September 30, 2021 and 2020 are as follows:

Balances at December 31, 2020

1 unchanged sentence

Amounts recognized as revenue as performance obligations satisfied

Balances at June 30, 2021

Balances at September 30, 2021

Balances at December 31, 2019

1 unchanged sentence

Amounts recognized as revenue as performance obligations satisfied

Balances at June 30, 2020

Balances at September 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 June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Denominator for basic earnings per share

2 unchanged sentences

Earnings per share:

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.

For the three months and nine months ended September 30, 2021, 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 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

Included in the right-of-use asset (“ROU asset”) as of September 30, 2021 was $ 2,608 and a corresponding lease liability of $ 2,608 associated with related party leases.

As of September 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 nine months ended September 30, 2021 and 2020:

Three Months Ended September 30, 2021

Nine Months Ended September 30, 2021

Related Parties

10 unchanged sentences

Capitalized operating leases

Three months ended June 30, 2020

Six months ended June 30, 2020

Three Months Ended September 30, 2020

Nine Months Ended September 30, 2020

Related Parties

10 unchanged sentences

Capitalized operating leases

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

As of September 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 six months ended June 30, 2021

2021, excluding the nine months ended September 30, 2021

Imputed interest

Lease liability balance at June 30, 2021

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

Lease liability balance at September 30, 2021

As of September 30, 2021, the ROU asset had a balance of $ 10,218 .

The long-term lease liability was $ 7,353 and the short-term lease liability, which is included in accrued expenses and other liabilities in the consolidated balance sheets, was $ 3,502 .

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

As of September 30, 2020, the ROU asset had a balance of $ 13,768 .

The long-term lease liability was $ 10,579 and the short-term lease liability, which is included in accrued expenses and other liabilities in the consolidated balance sheets, was $ 3,989 .

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 and six months ended June 30, 2021 and 2020 is shown below:

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

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

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 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.

As of September 30, 2021 and 2020, total assets for the Headquarters/Other group were presented net of intercompany balance eliminations of $ 39,209 and $ 60,802 , respectively.

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

2 unchanged sentences

The Company is 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, adverse effect on our financial position, results of operations, and/or cash flows.

The outcome of such matters is not expected to have a material, adverse effect on our financial position, results of operations, and/or cash flows.

The Company is subject to audits by states on sales and income taxes, employment matters, and other assessments.

4 unchanged sentences

on substantially the same terms.

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).

Amounts outstanding under this facility bear interest at the one-month LIBOR ( 0.08 % at September 30, 2021), plus a spread based on our funded debt ratio, or in the absence of LIBOR, the prime rate ( 3.25 % at September 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.

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 trailing twelve months Adjusted EBITDA (Earnings Before Interest Expense, Taxes, Depreciation, Amortization, and Special Charges).

Funded debt ratio is the ratio of average outstanding advances under the credit facility for a given quarter to our consolidated trailing twelve months 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 trailing twelve months Adjusted EBITDA could limit our potential borrowing capacity under 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.

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

As of September 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