What changed in this filing

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Item 1. Financial Statements

2022-11-04 compared with 2022-08-04 · 60 added, 55 removed, 263 unchanged (30% of the section changed)

ITEM 1 FINANCIAL STATEMENTS

FINANCIAL STATEMENTS

PC CONNECTION, INC.

2 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

11 unchanged sentences

(amounts in thousands)

Three Months Ended June 30, 2022

Three Months Ended September 30, 2022

Treasury Shares

Paid-In Capital

Balance - March 31, 2022

Balance - June 30, 2022

Stock-based compensation expense

1 unchanged sentence

Shares withheld for taxes paid on stock awards

Balance - June 30, 2022

Six Months Ended June 30, 2022

Balance - September 30, 2022

Nine Months Ended September 30, 2022

Treasury Shares

4 unchanged sentences

Shares withheld for taxes paid on stock awards

Balance - June 30, 2022

Balance - September 30, 2022

See notes to unaudited condensed consolidated financial statements.

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.

3 unchanged sentences

(amounts in thousands)

Six Months Ended

Cash Flows (used in) provided by Operating Activities:

Adjustments to reconcile net income to net cash (used in) provided by operating activities:

Nine Months Ended

September 30,

Cash Flows provided by Operating Activities:

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

8 unchanged sentences

Accrued expenses and other liabilities

Net cash (used in) provided by operating activities

Net cash provided by operating activities

Cash Flows used in Investing Activities:

8 unchanged sentences

Net cash used in financing activities

(Decrease) increase in cash and cash equivalents

Increase (decrease) in cash and cash equivalents

Cash and cash equivalents, beginning of year

20 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, 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 nine months ended September 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 June 30, 2022 and 2021, along with the reportable segment for each category.

Three Months Ended June 30, 2022

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

Three Months Ended September 30, 2022

Public Sector

5 unchanged sentences

Total net sales

Three Months Ended June 30, 2021

Three Months Ended September 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

The following table represents a disaggregation of revenue from arrangements with customers for the nine months ended September 30, 2022 and 2021, along with the reportable segment for each category.

Nine Months Ended September 30, 2022

Public Sector

5 unchanged sentences

Total net sales

Six Months Ended June 30, 2021

Nine Months Ended September 30, 2021

Public Sector

6 unchanged sentences

Contract Balances

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

June 30, 2022

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

September 30, 2022

December 31, 2021

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

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

Changes in the contract liability balances during the nine months ended September 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 June 30, 2022

Balance at September 30, 2022

Balance at December 31, 2020

1 unchanged sentence

Amounts recognized as revenue as performance obligations satisfied

Balance at June 30, 2021

Balance at September 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 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, 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 nine months ended September 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 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

Included in the right-of-use asset (“ROU asset”) as of September 30, 2022 was $ 1,432 and a corresponding lease liability of $ 1,432 associated with related party leases.

As of September 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 nine months ended September 30, 2022 and 2021:

Three Months Ended September 30, 2022

Nine Months Ended September 30, 2022

Related Parties

10 unchanged sentences

Capitalized operating leases

Three Months Ended June 30, 2021

Six Months Ended June 30, 2021

Three Months Ended September 30, 2021

Nine Months Ended September 30, 2021

Related Parties

10 unchanged sentences

Capitalized operating leases

As of June 30, 2022, future lease payments over the remaining term of capitalized operating leases were as follows:

As of September 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 six months ended June 30, 2022

2022, excluding the nine months ended September 30, 2022

Imputed interest

Lease liability balance at June 30, 2022

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

Lease liability balance at September 30, 2022

As of September 30, 2022, the ROU asset had a balance of $ 8,495 .

The long-term lease liability was $ 5,620 and the short-term lease liability, which is included in accrued expenses and other liabilities in the consolidated balance sheets, was $ 3,471 .

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

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 .

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 and six months ended June 30, 2022 and 2021 is shown below:

Segment information applicable to the Company’s reportable operating segments for the three and nine months ended September 30, 2022 and 2021 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 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.

As of September 30, 2022 and 2021, total assets for the Headquarters/Other group were presented net of intercompany balance eliminations of $ 62,154 , and $ 39,209 , respectively.

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

1 unchanged sentence

Note 6–Commitments and Contingencies

The Company is subject to various legal proceedings and claims, including patent infringement claims, which have arisen during the ordinary course of business.

The Company is subject to various legal proceedings and claims, which have arisen during the ordinary course of business.

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

5 unchanged sentences

the lender on substantially the same terms.

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).

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 ( 6.25 % at September 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 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.

AND SUBSIDIARIES

PART I―FINANCIAL INFORMATION

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

During the nine months ended September 30, 2022, the Company borrowed $ 36,463 under the credit facility, which was fully repaid prior to September 30, 2022.

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

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