What changed in this filing

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Item 1. Financial Statements

2022-08-04 compared with 2022-05-05 · 88 added, 36 removed, 230 unchanged (35% of the section changed)

35 unchanged sentences

Three Months Ended

Six Months Ended

Cost of sales

1 unchanged sentence

Income from operations

Other expenses, net

Other income, net

Income before taxes

7 unchanged sentences

(amounts in thousands)

Three Months Ended March 31, 2022

Three Months Ended June 30, 2022

Treasury Shares

Paid-In Capital

Balance - March 31, 2022

Stock-based compensation expense

Restricted stock units vested

Shares withheld for taxes paid on stock awards

Balance - June 30, 2022

Six Months Ended June 30, 2022

Treasury Shares

Paid-In Capital

Balance - December 31, 2021

2 unchanged sentences

Shares withheld for taxes paid on stock awards

Balance - June 30, 2022

See notes to unaudited condensed consolidated financial statements.

Three Months Ended June 30, 2021

Treasury Shares

Paid-In Capital

Balance - March 31, 2021

Three Months Ended 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

4 unchanged sentences

Shares withheld for taxes paid on stock awards

Balance - March 31, 2021

Balance - June 30, 2021

See notes to unaudited condensed consolidated financial statements.

3 unchanged sentences

(amounts in thousands)

Three Months Ended

Six Months Ended

Cash Flows (used in) provided by Operating Activities:

21 unchanged sentences

Net cash used in financing activities

Decrease 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:

2 unchanged sentences

Income taxes paid

Interest paid

See notes to unaudited condensed consolidated financial statements.

9 unchanged sentences

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, 2021, 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.

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 for the year ended December 31, 2021.

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.

1 unchanged sentence

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

The operating results for the three months ended March 31, 2022 may not be indicative of the results expected for any succeeding quarter or the entire year ending December 31, 2022.

The operating results for the three and six months ended June 30, 2022 may not be indicative of the results expected for any succeeding quarter or the entire year ending December 31, 2022.

Use of Estimates in the Preparation of Financial Statements

16 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, 2022 and 2021, along with the reportable segment for each category.

Three Months Ended March 31, 2022

The following tables represent a disaggregation of revenue from arrangements with customers for the three months ended June 30, 2022 and 2021, along with the reportable segment for each category.

Three Months Ended June 30, 2022

Public Sector

5 unchanged sentences

Total net sales

Three Months Ended March 31, 2021

Three Months Ended June 30, 2021

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, 2022 and 2021, along with the reportable segment for each category.

Six Months Ended June 30, 2022

Public Sector

Notebooks/Mobility

Servers/Storage

Net/Com Products

Displays and Sound

Other Hardware/Services

Total net sales

Six Months Ended June 30, 2021

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, 2022 and December 31, 2021.

March 31, 2022

The following table provides information about contract liabilities from arrangements with customers as of June 30, 2022 and December 31, 2021.

June 30, 2022

December 31, 2021

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

Changes in the contract liability balances during the three months ended March 31, 2022 and 2021 are as follows:

Changes in the contract liability balances during the six months ended June 30, 2022 and 2021 are as follows:

Balance at December 31, 2021

1 unchanged sentence

Amounts recognized as revenue as performance obligations satisfied

Balance at March 31, 2022

Balance at June 30, 2022

Balance at December 31, 2020

1 unchanged sentence

Amounts recognized as revenue as performance obligations satisfied

Balance at March 31, 2021

Balance at June 30, 2021

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, 2022 and 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.

For the three and six months ended June 30, 2022 and 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 March 31, 2022 was $ 2,025 and a corresponding lease liability of $ 2,025 associated with related party leases.

As of March 31, 2022, 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, 2022 and 2021:

Three Months Ended March 31, 2022

Three Months Ended March 31, 2021

Included in the right-of-use asset (“ROU asset”) as of June 30, 2022 was $ 1,730 and a corresponding lease liability of $ 1,730 associated with related party leases.

As of June 30, 2022, 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, 2022 and 2021:

Three Months Ended June 30, 2022

Six Months Ended June 30, 2022

Related Parties

10 unchanged sentences

Capitalized operating leases

As of March 31, 2022, future lease payments over the remaining term of capitalized operating leases were as follows:

Three Months Ended June 30, 2021

Six Months Ended June 30, 2021

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, 2022, future lease payments over the remaining term of capitalized operating leases were as follows:

For the Years Ended December 31,

Related Parties

2022, excluding the three months ended March 31, 2022

2022, excluding the six months ended June 30, 2022

Imputed interest

Lease liability balance at March 31, 2022

As of March 31, 2022, the ROU asset had a balance of $ 9,201 .

Lease liability balance at June 30, 2022

As of June 30, 2022, the ROU asset had a balance of $ 8,267 .

The long-term lease liability was $ 5,242 and the short-term lease liability, which is included in accrued expenses and other liabilities in the consolidated balance sheets, was $ 3,641 .

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

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 .

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 the Company’s reportable operating segments for the three months ended March 31, 2022 and 2021 is shown below:

Segment information applicable to the Company’s reportable operating segments for the three and six months ended June 30, 2022 and 2021 is shown below:

Three Months Ended

Six Months Ended

Business Solutions

23 unchanged sentences

The assets of the Company’s 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, ROU assets, and intercompany balance, net.

As of March 31, 2022 and 2021, total assets for the Headquarters/Other group were presented net of intercompany balance eliminations of $ 50,234 , and $ 48,026 , respectively.

Assets reported under the Headquarters/Other group are managed by corporate headquarters, including cash and cash equivalents, inventories, property and equipment, ROU assets, and intercompany balance, net.

As of June 30, 2022 and 2021, total assets for the Headquarters/Other group were presented net of intercompany balance eliminations of $ 41,439 , and $ 37,457 , respectively.

The Company’s capital expenditures consist largely of IT hardware and software purchased to maintain or upgrade our management information systems.

9 unchanged sentences

the lender on substantially the same terms.

Amounts outstanding under this facility bear interest at greatest of (i) the prime rate ( 3.50 % on March 31, 2022), (ii) the federal funds effective rate plus 0.50 % per annum and (iii) the one-month London Interbank Offered Rate, plus 1.00 % per annum, provided that the Alternate Base Rate shall at no time be less than 0 % per annum.

Amounts outstanding under this facility bear interest at the one-month LIBOR, plus a spread based on our funded debt ratio, or in the absence of LIBOR, the prime rate ( 4.75 % at June 30, 2022).

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 the Company’s consolidated trailing twelve months Adjusted EBITDA could limit its potential borrowing capacity under the credit facility.

As of March 31, 2022, the Company was in compliance with all financial covenants contained in the agreement governing the credit facility.

On February 3, 2022, the Company borrowed $ 1,385 under the credit facility, which was fully repaid on February 4, 2022.

The Company had no outstanding bank borrowings for the quarter ended March 31, 2022 or 2021, and accordingly, the entire $ 50,000 facility was available for borrowings under the credit facility on such date.

As of June 30, 2022, the Company was in compliance with all financial covenants contained in the agreement governing the credit facility.

During the first half of 2022, the Company borrowed $ 26,054 under the credit facility, which was fully repaid prior to the quarter ended June 30, 2022.

The Company had no outstanding borrowings under the credit facility as of June 30, 2022 or 2021, and accordingly, the entire $ 50,000 credit facility was available for borrowings on such date.

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