What changed in this filing

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Item 1. Financial Statements

2024-05-01 compared with 2023-11-01 · 102 added, 146 removed, 269 unchanged (48% of the section changed)

4 unchanged sentences

(amounts in thousands)

September 30,

Current Assets:

22 unchanged sentences

Retained earnings

Accumulated other comprehensive income

Accumulated other comprehensive (loss) income

Treasury stock, at cost

7 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

Cost of sales

2 unchanged sentences

Income from operations

Other income, net

Interest income, net

Income before taxes

8 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

Other comprehensive income:

Unrealized gains on available-for-sale investments, net of tax of $( 41 )

Other comprehensive loss:

Unrealized losses on available-for-sale investments, net of tax of $ 38

Comprehensive income

4 unchanged sentences

(amounts in thousands)

Three Months Ended September 30, 2023

Three Months Ended March 31, 2024

Accumulated Other

1 unchanged sentence

Paid-In Capital

Comprehensive Income

Balance - June 30, 2023

Comprehensive (Loss) Income

Balance - December 31, 2023

Stock-based compensation expense

1 unchanged sentence

Shares withheld for taxes paid on stock awards

Repurchase of common stock for treasury

Dividend declaration ($ 0.10 per share)

Other comprehensive income, net of tax

Balance - September 30, 2023

Nine Months Ended September 30, 2023

Other comprehensive loss, net of tax

Balance - March 31, 2024

Three Months Ended March 31, 2023

Accumulated Other

1 unchanged sentence

Paid-In Capital

Comprehensive Income

Comprehensive (Loss) Income

Balance - December 31, 2022

3 unchanged sentences

Repurchase of common stock for treasury

Issuance of common stock under Employee Stock Purchase Plan

Dividend declaration ($ 0.08 per share)

Other comprehensive income, net of tax

Balance - September 30, 2023

Three Months Ended September 30, 2022

Treasury Shares

Paid-In Capital

Balance - June 30, 2022

Stock-based compensation expense

Restricted stock units vested

Shares withheld for taxes paid on stock awards

Balance - September 30, 2022

Nine Months Ended September 30, 2022

Treasury Shares

Paid-In Capital

Balance - December 31, 2021

Stock-based compensation expense

Restricted stock units vested

Shares withheld for taxes paid on stock awards

Balance - September 30, 2022

Balance - March 31, 2023

See notes to unaudited condensed consolidated financial statements.

3 unchanged sentences

(amounts in thousands)

Nine Months Ended

September 30,

Three Months Ended

Cash Flows provided by Operating Activities:

3 unchanged sentences

Stock-based compensation expense

Amortization of discount on short-term investments

Loss on disposal of fixed assets

8 unchanged sentences

Purchases of short-term investments

Maturities of short-term investments

Purchases of property and equipment

5 unchanged sentences

Dividend payments

Issuance of stock under Employee Stock Purchase Plan

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

1 unchanged sentence

Increase in cash and cash equivalents

Cash and cash equivalents, beginning of year

Cash and cash equivalents, beginning of period

Cash and cash equivalents, end of period

20 unchanged sentences

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

The operating results for the three and nine months ended September 30, 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 months ended March 31, 2024 may not be indicative of the results expected for any succeeding quarter or the entire year ending December 31, 2024.

Use of Estimates in the Preparation of Financial Statements

5 unchanged sentences

Actual results could differ from those estimates and assumptions.

Cash and Cash Equivalents

Cash and Cash Equivalents and Investments

The Company considers all highly liquid short-term investments with original maturities of 90 days or less to be cash equivalents.

4 unchanged sentences

The Company classifies investments as short-term when their remaining contractual maturities are one year or less from the balance sheet date, and as long-term when the investment has a remaining contractual maturity of more than one year from the balance sheet date.

The Company records investments at fair value with unrealized gains and losses recorded as a component of accumulated other comprehensive income.

The Company records investments at fair value with unrealized gains and losses recorded as a component of accumulated other comprehensive (loss) income on the condensed consolidated balance sheets.

Included in interest income, net on the condensed consolidated statements of income is interest income on cash equivalents and short-term investments of $ 4,565 and $ 1,308 for the three months ended March 31, 2024 and 2023, respectively.

Treasury Stock, at Cost

The total repurchases for the nine months ended September 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.

The total repurchases for the three months ended March 31, 2024 were recorded as treasury stock of $ 188 .

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.

The total repurchases for the three months ended March 31, 2023 were recorded as treasury stock of $ 3,423 .

Restructuring and Other Charges

The restructuring and other charges recorded for the three and nine months ended September 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 and other liabilities in the consolidated balance sheets as of September 30, 2023.

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

There were no restructuring and other charges recorded for the three months ended March 31, 2024.

The restructuring and other charges recorded for the three months ended March 31, 2023 were primarily related to an involuntary reduction in our headquarter workforce and included cash severance and other related termination benefits.

The Company is currently evaluating additional restructuring activities for the second quarter of 2024 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 September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Employee separations

1 unchanged sentence

Total restructuring and other charges

Included in accrued expenses and other liabilities as of September 30, 2023 was $ 772 related to unpaid termination benefits.

Included in accrued expenses and other liabilities on the condensed consolidated balance sheets as of March 31, 2024 was $ 210 related to unpaid termination benefits.

Recently Issued Financial Accounting Standards

In March 2020, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) 2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting .

This guidance provides temporary optional expedients and exceptions to the U.S.

GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from the London Interbank Offered Rate, or LIBOR, and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rate.

This ASU is applied prospectively and becomes effective immediately upon the transition from LIBOR.

The Company’s secured credit facility agreement references LIBOR, which is expected to be discontinued as a result of reference rate reform.

The amendments are effective as of March 12, 2020 through December 31, 2022;

however, ASU 2022-06, Reference Rate Reform (Topic 848):

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

The Company adopted this standard in the second quarter of 2023.

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

In November 2023, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.

This guidance is intended to improve segment reporting disclosures on both an interim and annual basis, primarily through enhanced disclosures about significant segment expenses.

This ASU is effective for the Company’s annual reporting periods beginning January 1, 2024, and for interim reporting periods beginning January 1, 2025, with early adoption permitted.

The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statement disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.

This guidance is intended to improve the transparency of income tax disclosures through, among other things, enhancement of the disclosure requirements within the rate reconciliation, as well as increased income tax disaggregation disclosures.

This ASU is effective for the Company’s annual reporting periods beginning January 1, 2025, with early adoption permitted.

The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statement disclosures.

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 September 30, 2023 and 2022, along with the segment for each category (in thousands).

Three Months Ended September 30, 2023

Public Sector

Notebooks/Mobility

Servers/Storage

Net/Com Products

Displays and Sound

Other Hardware/Services

Total net sales

Three Months Ended September 30, 2022

Public Sector

Notebooks/Mobility

Servers/Storage

Net/Com Products

Displays and Sound

Other Hardware/Services

Total net sales

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

Nine Months Ended September 30, 2023

The following tables represent a disaggregation of revenue from arrangements with customers for the three months ended March 31, 2024 and 2023, along with the segment for each category (in thousands).

Three Months Ended March 31, 2024

Public Sector

5 unchanged sentences

Total net sales

Nine Months Ended September 30, 2022

Three Months Ended March 31, 2023

Public Sector

6 unchanged sentences

Contract Balances

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

September 30, 2023

The following table provides information about contract liabilities from arrangements with customers as of March 31, 2024 and December 31, 2023 (in thousands).

March 31, 2024

December 31, 2023

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

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

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

Changes in the contract liability balances during the three months ended March 31, 2024 and 2023 are as follows (in thousands):

Balance at December 31, 2023

1 unchanged sentence

Amounts recognized as revenue as performance obligations satisfied

Balance at September 30, 2023

Balance at March 31, 2024

Balance at December 31, 2022

1 unchanged sentence

Amounts recognized as revenue as performance obligations satisfied

Balance at September 30, 2022

Balance at March 31, 2023

Note 3–Fair Value Measurements

Cash equivalents and short-term investments consist of the following (in thousands):

September 30, 2023

March 31, 2024

Amortized Cost

1 unchanged sentence

Unrealized Losses

Cash and cash equivalents:

Cash equivalents:

Money market funds

Government treasury securities

Short-term investments:

4 unchanged sentences

Unrealized Losses

Cash and cash equivalents:

Cash equivalents:

Money market funds

Short-term investments:

Government treasury securities

Investments with maturities of 90 days or less from the date of purchase are classified as cash equivalents;

2 unchanged sentences

All short-term investments had stated maturity dates of less than one year.

The Company has recorded the securities at fair value in its condensed consolidated balance sheets and unrealized gains and losses are reported as a component of accumulated other comprehensive income.

The Company has recorded the securities at fair value on its condensed consolidated balance sheets and unrealized gains and losses are reported as a component of accumulated other comprehensive income.

The amount of realized gains and losses reclassified into earnings and the related adjustments to deferred taxes are based on the specific identification of the securities sold or securities that reached maturity date.

8 unchanged sentences

Unobservable inputs that are supported by little or no market activities and are based on significant assumptions and estimates.

As of September 30, 2023 and December 31, 2022, the fair value of the Company’s investments were all measured using level 1 inputs.

As of March 31, 2024 and December 31, 2023, the fair value of the Company’s investments were all measured using level 1 inputs.

Note 4–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 September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Denominator for basic earnings per share

2 unchanged sentences

Earnings per share:

For the three and nine months ended September 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.

For the three months ended March 31, 2024 and 2023, 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 5 – 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 September 30, 2023 was $ 209 and a corresponding lease liability of $ 209 associated with related party leases.

As of September 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 nine months ended September 30, 2023 and 2022 (dollars in thousands):

Three Months Ended September 30, 2023

Nine Months Ended September 30, 2023

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

Three Months Ended September 30, 2022

Nine Months Ended September 30, 2022

As of March 31, 2024, 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, 2024 and 2023 (dollars in thousands):

Three Months Ended March 31, 2024

Three Months Ended March 31, 2023

Related Parties

10 unchanged sentences

Capitalized operating leases

As of September 30, 2023, future lease payments over the remaining term of capitalized operating leases were as follows (in thousands):

As of March 31, 2024, 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 nine months ended September 30, 2023

2024, excluding the three months ended March 31, 2024

Imputed interest

Lease liability balance at September 30, 2023

As of September 30, 2023, the ROU asset had a balance of $ 4,934 .

The long-term lease liability was $ 3,638 and the short-term lease liability, which is included in accrued expenses and other liabilities in the consolidated balance sheets, was $ 1,912 .

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 .

Lease liability balance at March 31, 2024

As of March 31, 2024, the right-of-use, or ROU, asset had a balance of $ 4,020 .

The long-term lease liability was $ 2,760 and the short-term lease liability, which is included in accrued expenses and other liabilities on the condensed consolidated balance sheets, was $ 1,849 .

As of December 31, 2023, the ROU asset had a balance of $ 4,340 .

The long-term lease liability was $ 3,181 and the short-term lease liability, which is included in accrued expenses and other liabilities on the condensed consolidated balance sheets, was $ 1,733 .

Note 6–Segment Information

1 unchanged sentence

The Company’s CODM is its Chief Executive Officer, and he evaluates operations and allocates resources based on a measure of operating income.

The Company’s operations are organized under three segments—the Business Solutions segment, which serves primarily small- to medium-sized businesses;

the Enterprise Solutions segment, which serves primarily medium-to-large corporations;

The Company’s operations are organized under three segments—the Enterprise Solutions segment, which serves primarily medium-to-large corporations;

the Business Solutions segment, which serves primarily small- to medium-sized businesses;

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

4 unchanged sentences

Net sales presented below exclude inter-segment product revenues.

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

Segment information applicable to the Company’s operating segments for the three months ended March 31, 2024 and 2023 is shown below (in thousands):

Three Months Ended

Nine Months Ended

September 30,

Business Solutions

Enterprise Solutions

Business Solutions

Public Sector Solutions

1 unchanged sentence

Operating income (loss):

Business Solutions

Enterprise Solutions

Business Solutions

Public Sector Solutions

1 unchanged sentence

Total operating income

Other income, net

Interest income, net

Income before taxes

1 unchanged sentence

Depreciation and amortization:

Business Solutions

Enterprise Solutions

Business Solutions

Public Sector Solutions

2 unchanged sentences

Total assets:

Business Solutions

Enterprise Solutions

Business Solutions

Public Sector Solutions

1 unchanged sentence

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 and cash equivalents, inventories, property and equipment, ROU assets, and intercompany balance, net.

As of September 30, 2023 and 2022, total assets for the Headquarters/Other group were presented net of intercompany balance eliminations of $ 58,864 and $ 62,154 , respectively.

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

As of March 31, 2024 and 2023, total assets for the Headquarters/Other group were presented net of intercompany balance eliminations of $ 15,039 and $ 60,176 , respectively.

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

These information systems serve all of the Company’s segments, to varying degrees, and accordingly, the CODM does not evaluate capital expenditures on a segment-by-segment basis.

Note 7–Accumulated Other Comprehensive Income (Loss)

Accumulated other comprehensive income (loss), which is included as a component of stockholders’ equity, is comprised of unrealized gains (losses) on short-term investments, net of tax.

The changes in accumulated other comprehensive income (loss) were as follows (in thousands):

Three Months Ended

March 31, 2024

Balance - December 31, 2023

Other comprehensive income (loss) before reclassifications, net of tax

Less amounts reclassified from accumulated other comprehensive income (loss), net of tax

Net other comprehensive income (loss)

Balance - March 31, 2024

Three Months Ended

March 31, 2023

Balance - December 31, 2022

Other comprehensive income (loss) before reclassifications, net of tax

Less amounts reclassified from accumulated other comprehensive income (loss), net of tax

Net other comprehensive income (loss)

Balance - March 31, 2023

Note 8–Commitments and Contingencies

5 unchanged sentences

The Company has a $ 50,000 credit facility collateralized by its account receivables that expires March 31, 2025 .

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 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 ( 8.50 % at September 30, 2023).

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.

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

As of March 31, 2024, 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 nine months ended September 30, 2023, the Company borrowed incremental amounts that were each repaid in full.

These borrowings for the nine months ended September 30, 2023 totaled $ 70,877 ;

During the three months ended March 31, 2024 and 2023, the Company borrowed incremental amounts that were each repaid in full.

These borrowings for the three months ended March 31, 2024 and 2023 totaled $ 8,349 and $ 59,310 , respectively;

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 September 30, 2023 or 2022, and accordingly, the entire $ 50,000 credit facility was available for borrowings on such date.

The Company had no outstanding borrowings under the credit facility as of March 31, 2024 or 2023, 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