What changed in this filing

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Item 1. Financial Statements

2023-08-02 compared with 2023-05-04 · 111 added, 44 removed, 237 unchanged (40% of the section changed)

8 unchanged sentences

Inventories, net

Income taxes receivable

Prepaid expenses and other current assets

25 unchanged sentences

Three Months Ended

Six Months Ended

Cost of sales

2 unchanged sentences

Income from operations

Other income (expense), net

Other income, net

Income before taxes

7 unchanged sentences

(amounts in thousands)

Three Months Ended March 31, 2023

Three Months Ended June 30, 2023

Treasury Shares

Paid-In Capital

Balance - March 31, 2023

Stock-based compensation expense

Restricted stock units vested

Shares withheld for taxes paid on stock awards

Repurchase of common stock for treasury

Excise tax on stock repurchases

Issuance of common stock under Employee Stock Purchase Plan

Dividend declaration ($ 0.08 per share)

Balance - June 30, 2023

Six Months Ended June 30, 2023

Treasury Shares

Paid-In Capital

Balance - December 31, 2022

3 unchanged sentences

Repurchase of common stock for treasury

Excise tax on stock repurchases

Issuance of common stock under Employee Stock Purchase Plan

Dividend declaration ($ 0.08 per share)

Balance - June 30, 2023

Three Months Ended June 30, 2022

Treasury Shares

Paid-In Capital

Balance - March 31, 2022

Three Months Ended 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

4 unchanged sentences

Shares withheld for taxes paid on stock awards

Balance - March 31, 2022

Balance - June 30, 2022

See notes to unaudited condensed consolidated financial statements.

3 unchanged sentences

(amounts in thousands)

Three Months Ended

Six Months Ended

Cash Flows provided by (used in) Operating Activities:

6 unchanged sentences

Accounts receivable

Prepaid expenses and other current assets

Prepaid expenses, income tax receivable, and other current assets

Other non-current assets

3 unchanged sentences

Cash Flows used in Investing Activities:

Purchases of equipment and capitalized software

Purchases of property and equipment

Net cash used in investing activities

4 unchanged sentences

Dividend payments

Issuance of stock under Employee Stock Purchase Plan

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

4 unchanged sentences

Non-cash Investing and Financing Activities:

Accrued capital expenditures

Accrued purchases of property and equipment

Accrued excise tax on treasury purchases

Supplemental Cash Flow Information:

16 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, 2023 may not be indicative of the results expected for any succeeding quarter or the entire year ending December 31, 2023.

The operating results for the three and six months ended June 30, 2023 may not be indicative of the results expected for any succeeding quarter or the entire year ending December 31, 2023.

Use of Estimates in the Preparation of Financial Statements

5 unchanged sentences

Actual results could differ from those estimates and assumptions.

Treasury Stock, at Cost

The total repurchases for the six months ended June 30, 2023 were recorded as treasury stock of $ 5,446 .

Such cost reflects the applicable one percent excise tax imposed by the Inflation Reduction Act of 2022 on the net value of certain stock repurchases made after December 31, 2022.

Restructuring and Other Charges

The restructuring and other charges recorded in the first quarter of 2023 were primarily related to an involuntary reduction in our headquarter workforce and included cash severance and other related termination benefits.

These costs will be paid within a year of termination and any unpaid balances are included in accrued expenses as of March 31, 2023.

The restructuring and other charges recorded for the three and six months ended June 30, 2023 were primarily related to an involuntary reduction in our headquarter workforce and included cash severance and other related termination benefits.

These costs will be paid within a year of termination and any unpaid balances are included in accrued expenses as of June 30, 2023.

The Company is currently evaluating additional restructuring activities for the third quarter of 2023 and beyond.

Restructuring and other charges are presented separately from selling, general and administrative expenses.

Costs incurred were as follows (in thousands):

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Employee separations

1 unchanged sentence

Total restructuring and other charges

Included in accrued expenses and other liabilities as of March 31, 2023 was $ 308 related to unpaid termination benefits.

Included in accrued expenses and other liabilities as of June 30, 2023 was $ 1,381 related to unpaid termination benefits.

Recently Issued Financial Accounting Standards

8 unchanged sentences

Deferral of the Sunset Date of Topic 848 has extended the effective date through December 31, 2024.

The Company is currently evaluating the effect of the adoption of this standard on the Company, but does not believe the adoption will have a material effect on its consolidated financial statements.

The Company adopted this standard in the current quarter.

The adoption of this ASU along with the related expedients did not have an impact to the Company’s condensed consolidated financial statements.

Note 2–Revenue

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, 2023 and 2022, along with the segment for each category (in thousands).

Three Months Ended March 31, 2023

The following tables represent a disaggregation of revenue from arrangements with customers for the three months ended June 30, 2023 and 2022, along with the segment for each category (in thousands).

Three Months Ended June 30, 2023

Public Sector

5 unchanged sentences

Total net sales

Three Months Ended March 31, 2022

Three Months Ended June 30, 2022

Public Sector

5 unchanged sentences

Total net sales

The following tables represent a disaggregation of revenue from arrangements with customers for the six months ended June 30, 2023 and 2022, along with the segment for each category (in thousands).

Six Months Ended June 30, 2023

Public Sector

Notebooks/Mobility

Servers/Storage

Net/Com Products

Displays and Sound

Other Hardware/Services

Total net sales

Six Months Ended June 30, 2022

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, 2023 and December 31, 2022 (in thousands).

March 31, 2023

The following table provides information about contract liabilities from arrangements with customers as of June 30, 2023 and December 31, 2022 (in thousands).

June 30, 2023

December 31, 2022

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

Changes in the contract liability balances during the three months ended March 31, 2023 and 2022 are as follows (in thousands):

Changes in the contract liability balances during the six months ended June 30, 2023 and 2022 are as follows (in thousands):

Balance at December 31, 2022

1 unchanged sentence

Amounts recognized as revenue as performance obligations satisfied

Balance at March 31, 2023

Balance at June 30, 2023

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

Note 3–Earnings Per Share

2 unchanged sentences

The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share data):

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, 2023 and 2022, 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, 2023 and 2022, 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, or ROU, asset as of March 31, 2023 was $ 826 and a corresponding lease liability of $ 826 associated with related party leases.

As of March 31, 2023, 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, 2023 and 2022 (dollars in thousands):

Three Months Ended March 31, 2023

Three Months Ended March 31, 2022

Included in the right-of-use, or ROU, asset as of June 30, 2023 was $ 519 and a corresponding lease liability of $ 519 associated with related party leases.

As of June 30, 2023, 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, 2023 and 2022 (dollars in thousands):

Three Months Ended June 30, 2023

Six Months Ended June 30, 2023

Related Parties

10 unchanged sentences

Capitalized operating leases

As of March 31, 2023, future lease payments over the remaining term of capitalized operating leases were as follows (in thousands):

Three Months Ended June 30, 2022

Six Months Ended June 30, 2022

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, 2023, future lease payments over the remaining term of capitalized operating leases were as follows (in thousands):

For the Years Ended December 31,

Related Parties

2023, excluding the three months ended March 31, 2023

2023, excluding the six months ended June 30, 2023

Imputed interest

Lease liability balance at March 31, 2023

As of March 31, 2023, the ROU asset had a balance of $ 6,611 .

Lease liability balance at June 30, 2023

As of June 30, 2023, the ROU asset had a balance of $ 5,775 .

The long-term lease liability was $ 4,196 and the short-term lease liability, which is included in accrued expenses and other liabilities in the consolidated balance sheets, was $ 2,239 .

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

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 .

5 unchanged sentences

and the Public Sector Solutions segment, which serves primarily federal, state, and local government and educational institutions.

In addition, the Headquarters/Other group provides services in areas such as finance, human

resources, information technology, or IT, marketing, and product management.

In addition, the Headquarters/Other group provides services in areas such as finance, human resources, information technology, or IT, 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.

2 unchanged sentences

Net sales presented below exclude inter-segment product revenues.

Segment information applicable to the Company’s operating segments for the three months ended March 31, 2023 and 2022 is shown below (in thousands):

Segment information applicable to the Company’s operating segments for the three and six months ended June 30, 2023 and 2022 is shown below (in thousands):

Three Months Ended

Six Months Ended

Business Solutions

8 unchanged sentences

Total operating income

Other income (expense), net

Other income, net

Income before taxes

13 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 March 31, 2023 and 2022, total assets for the Headquarters/Other group were presented net of intercompany balance eliminations of $ 60,176 and $ 50,234 , respectively.

As of June 30, 2023 and 2022, total assets for the Headquarters/Other group were presented net of intercompany balance eliminations of $ 55,432 and $ 41,439 , respectively.

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

2 unchanged sentences

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.

The outcomes of such matters are not expected to have a material, adverse effect on the Company’s 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.

3 unchanged sentences

This facility can be increased, at the Company’s option, to $ 80,000 for permitted acquisitions or other uses authorized by the lender on substantially the same terms.

Amounts outstanding under this facility bear interest at the one-month LIBOR, plus a spread based on the Company’s funded debt ratio, or in the absence of LIBOR, the prime rate ( 8.00 % at March 31, 2023).

Amounts outstanding under this facility bear interest at the daily Bloomberg Short-Term Bank Yield Index, or BSBY Rate, plus a spread based on the Company’s funded debt ratio, or in the absence of BSBY Rate, the prime rate ( 8.25 % at June 30, 2023).

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, 2023, the Company was in compliance with all financial covenants contained in the agreement governing the credit facility.

During the three months ended March 31, 2023, the Company borrowed $ 59,310 under the credit facility, which was fully repaid prior to March 31, 2023.

The Company had no outstanding borrowings under the credit facility as of March 31, 2023 or 2022, and accordingly, the entire $ 50,000 credit facility was available for borrowings on such date.

As of June 30, 2023, the Company was in compliance with all financial covenants contained in the agreement governing the credit facility.

Cash receipts are automatically applied against any outstanding borrowings.

During the six months ended June 30, 2023, the Company borrowed incremental amounts that were each repaid in full.

These borrowings for the six months ended June 30, 2023 totaled $ 67,895 ;

however, at no time were the outstanding borrowings greater than the $ 50,000 limit under the credit facility.

The Company had no outstanding borrowings under the credit facility as of June 30, 2023 or 2022, 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