What changed in this filing

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Item 1. Financial Statements

2025-04-30 compared with 2024-10-30 · 129 added, 189 removed, 249 unchanged (56% of the section changed)

4 unchanged sentences

(amounts in thousands)

September 30,

Current Assets:

3 unchanged sentences

Inventories, net

Income taxes receivable

Prepaid expenses and other current assets

10 unchanged sentences

Deferred income taxes

Noncurrent operating lease liabilities

Non-current operating lease liabilities

Other liabilities

13 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

Cost of sales

Selling, general and administrative expenses

Restructuring and other charges

Severance expenses

Income from operations

10 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

Other comprehensive income:

Unrealized gains on available-for-sale investments, net of tax of $( 154 ) and $( 105 ) for the three and nine months ended September 30, 2024, respectively, and net of tax of $( 41 ) for the three and nine months ended September 30, 2023, respectively

Other comprehensive loss:

Unrealized losses on available-for-sale investments, net of tax of $ 30 and $ 38 for the three months ended March 31, 2025 and 2024, respectively

Comprehensive income

4 unchanged sentences

(amounts in thousands)

Three Months Ended September 30, 2024

Accumulated Other

Treasury Shares

Paid-In Capital

Comprehensive Income (Loss)

Balance - June 30, 2024

Stock-based compensation expense

Restricted stock units vested

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, 2024

Nine Months Ended September 30, 2024

Three Months Ended March 31, 2025

Accumulated Other

7 unchanged sentences

Repurchase of common stock for treasury

Issuance of common stock under Employee Stock Purchase Plan

Dividend declaration ($ 0.15 per share)

Other comprehensive income, net of tax

Balance - September 30, 2024

Three Months Ended September 30, 2023

Accumulated Other

Treasury Shares

Paid-In Capital

Comprehensive Income (Loss)

Balance - June 30, 2023

Stock-based compensation expense

Restricted stock units vested

Shares withheld for taxes paid on stock awards

Dividend declaration ($ 0.08 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, 2025

Three Months Ended March 31, 2024

Accumulated Other

7 unchanged sentences

Repurchase of common stock for treasury

Issuance of common stock under Employee Stock Purchase Plan

Dividend declaration ($ 0.10 per share)

Other comprehensive income, net of tax

Balance - September 30, 2023

Other comprehensive loss, net of tax

Balance - March 31, 2024

See notes to unaudited condensed consolidated financial statements.

3 unchanged sentences

(amounts in thousands)

Nine Months Ended

September 30,

Cash Flows provided by Operating Activities:

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

Three Months Ended

Cash Flows (used in) provided by Operating Activities:

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

Depreciation and amortization

1 unchanged sentence

Stock-based compensation expense

Deferred income taxes

Amortization of discount on short-term investments

Amortization of discount on short-term investments, net

Gain on sale of short-term investments

Loss on disposal of fixed assets

1 unchanged sentence

Accounts receivable

Prepaid expenses, income tax receivable, and other current assets

Prepaid expenses and other current assets

Other non-current assets

1 unchanged sentence

Accrued expenses and other liabilities

Net cash provided by operating activities

Cash Flows used in Investing Activities:

Net cash (used in) provided by operating activities

Cash Flows provided by (used in) Investing Activities:

Purchases of short-term investments

Proceeds from sale of short-term investments

Maturities of short-term investments

Purchases of property and equipment

Net cash used in investing activities

Net cash provided by (used in) investing activities

Cash Flows used in Financing Activities:

3 unchanged sentences

Dividend payments

Issuance of stock under Employee Stock Purchase Plan

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

5 unchanged sentences

Accrued purchases of property and equipment

Accrued purchase of treasury shares

Accrued excise tax on treasury purchases

17 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, 2024 may not be indicative of the results expected for any succeeding quarter or the entire year ending December 31, 2024.

The operating results for the three months ended March 31, 2025 may not be indicative of the results expected for any succeeding quarter or the entire year ending December 31, 2025.

Certain amounts in the prior period’s condensed consolidated financial statements have been reclassified to conform with the current period presentation.

Use of Estimates in the Preparation of Financial Statements

13 unchanged sentences

The Company records investments at fair value with unrealized gains and losses recorded as a component of accumulated other comprehensive 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 $ 4,840 and $ 14,060 for the three and nine months ended September 30, 2024, respectively, and $ 2,684 and $ 5,866 for the three and nine months ended September 30, 2023, respectively.

Included in interest income, net on the condensed consolidated statements of income is interest income on cash equivalents and short-term investments of $ 3,801 and $ 4,565 for the three months ended March 31, 2025 and 2024, respectively.

Treasury Stock, at Cost

The total repurchases for the nine months ended September 30, 2024 and 2023 were recorded as treasury stock of $ 7,723 and $ 5,446 , respectively.

The total repurchases for the three months ended March 31, 2025 and 2024 were recorded as treasury stock of $ 45,162 and $ 188 , respectively.

Such costs reflect 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 for the three and nine months ended September 30, 2024 and 2023 were primarily related to an involuntary reduction in the Company’s headquarter workforce and included cash severance and other related termination benefits.

No amounts related to these costs are included in accrued expenses and other liabilities as all such amounts have been paid as of September 30, 2024.

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,

Employee separations

Other charges

Total restructuring and other charges

On April 30, 2025, the Company announced that its Board of Directors authorized a $ 50,000 increase to the share repurchase program, which was incremental to the approximately $ 14,919 remaining as of March 31, 2025.

Severance Expenses

The severance expenses recorded for the three months ended March 31, 2025 were related to an involuntary reduction in the Company’s workforce to lower the Company’s cost structure and included cash severance and other related termination benefits.

The majority of these costs are expected to be paid within a year of termination.

Included in accrued expenses and other liabilities on the condensed consolidated balance sheets as of March 31, 2025 was $ 2,858 related to unpaid severance expenses.

Recently Issued Financial Accounting Standards

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):

In December 2023, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.

2 unchanged sentences

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

In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses .

This guidance is intended to provide more detailed disclosure about certain costs and expenses presented in the income statement, including inventory purchases, employee compensation, selling expenses, and depreciation expense.

This ASU is effective for the Company’s annual reporting periods beginning January 1, 2027, and for interim reporting periods beginning January 1, 2028, with early adoption permitted.

The Company is currently evaluating the impact of the adoption of this standard on its 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 September 30, 2024 and 2023, along with the segment for each category (in thousands).

Three Months Ended September 30, 2024

Public Sector

Notebooks/Mobility

Servers/Storage

Net/Com Products

Displays and Sound

Other Hardware/Services

Total net sales

Three Months Ended September 30, 2023

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, 2024 and 2023, along with the segment for each category (in thousands).

Nine Months Ended September 30, 2024

The following tables represent a disaggregation of revenue from arrangements with customers for the three months ended March 31, 2025 and 2024, along with the segment for each category (in thousands).

Three Months Ended March 31, 2025

Public Sector

5 unchanged sentences

Total net sales

Nine Months Ended September 30, 2023

Three Months Ended March 31, 2024

Public Sector

6 unchanged sentences

Contract Balances

The following table provides information about contract liabilities from arrangements with customers as of September 30, 2024 and December 31, 2023 (in thousands).

September 30, 2024

The following table provides information about contract liabilities from arrangements with customers as of March 31, 2025 and December 31, 2024 (in thousands).

March 31, 2025

December 31, 2024

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

Changes in the contract liability balances during the nine months ended September 30, 2024 and 2023 are as follows (in thousands):

Changes in the contract liability balances during the three months ended March 31, 2025 and 2024 are as follows (in thousands):

Balance at December 31, 2024

1 unchanged sentence

Amounts recognized as revenue as performance obligations satisfied

Balance at September 30, 2024

Balance at March 31, 2025

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

Note 3–Fair Value Measurements

Cash equivalents and short-term investments as of September 30, 2024 and December 31, 2023 consist of the following (in thousands):

September 30, 2024

Cash equivalents and short-term investments as of March 31, 2025 and December 31, 2024 consist of the following (in thousands):

March 31, 2025

Amortized Cost

28 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, 2024 and December 31, 2023, the fair value of the Company’s investments were all measured using level 1 inputs.

As of March 31, 2025 and December 31, 2024, the fair value of the Company’s investments were all measured using level 1 inputs.

Note 4–Earnings Per Share

1 unchanged sentence

Diluted earnings per share is computed using the weighted average number of shares outstanding adjusted for the incremental shares attributable to non-vested stock units and stock options outstanding, if dilutive.

The following table sets forth the computation of basic and diluted earnings per share for the three and nine months ended September 30, 2024 and 2023 (in thousands, except per share data):

Three Months Ended September 30,

Nine Months Ended September 30,

The following table sets forth the computation of basic and diluted earnings per share for the three months ended March 31, 2025 and 2024 (in thousands, except per share data):

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, 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.

For the three months ended March 31, 2025 and 2024, 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 it through common ownership.

As of September 30, 2024, there were no additional significant 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, 2024 and 2023 (dollars in thousands):

Three Months Ended September 30, 2024

Nine Months Ended September 30, 2024

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, 2023

Nine Months Ended September 30, 2023

As of March 31, 2025, there were no additional significant 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, 2025 and 2024 (dollars in thousands):

Three Months Ended March 31, 2025

Three Months Ended March 31, 2024

Related Parties

10 unchanged sentences

Capitalized operating leases

As of September 30, 2024, future lease payments over the remaining term of capitalized operating leases were as follows (in thousands):

As of March 31, 2025, future lease payments over the remaining term of capitalized operating leases were as follows (in thousands):

For the Years Ended December 31,

2024, excluding the nine months ended September 30, 2024

2025, excluding the three months ended March 31, 2025

Imputed interest

Lease liability balance at September 30, 2024

As of September 30, 2024, the right-of-use, or ROU, asset had a balance of $ 3,460 .

Lease liability balance at March 31, 2025

As of March 31, 2025, the right-of-use, or ROU, asset had a balance of $ 2,808 .

The long-term lease liability was $ 1,066 and the short-term lease liability, which is included in accrued expenses and other liabilities on the condensed consolidated balance sheets, was $ 1,969 .

1 unchanged sentence

The long-term lease liability was $ 1,552 and the short-term lease liability, which is included in accrued expenses and other liabilities on the condensed consolidated balance sheets, was $ 1,805 .

Note 6–Accumulated Other Comprehensive Income

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

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

Three Months Ended

March 31, 2025

Balance - December 31, 2024

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

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

Net other comprehensive loss

Balance - March 31, 2025

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, net of tax

Net other comprehensive loss

Balance - March 31, 2024

Included in amounts reclassified from accumulated other comprehensive income, net of tax for the three months ended March 31, 2025 is $ 76 of realized gain, which is included in “Other income” on the unaudited condensed consolidated statements of income.

Note 7–Segment Information

The internal reporting structure used by the Company’s chief operating decision maker, or CODM, to assess performance and allocate resources determines the basis for the Company’s operating segments.

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

The Company’s operations are organized under three reporting 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.

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.

In addition, the Headquarters/Other provides services in areas such as finance, human resources, IT, marketing, and product management.

Most of the operating costs associated with the Headquarters/Other functions are charged to the operating segments based on their estimated usage of the underlying functions.

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.

Headquarters/Other amounts that are not allocated to the operating segments are shown as reconciling items in the tables below.

The Company’s CODM is its Chief Executive Officer, and he assesses the segments’ performance by using each segments’ operating income (which includes certain corporate overhead allocations attributable to each of the segments).

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, 2024 and 2023 is shown below (in thousands):

Three Months Ended September 30,

Nine Months Ended September 30,

Enterprise Solutions

Business Solutions

Public Sector Solutions

Total net sales

The CODM uses operating income for each segment in the annual budget, periodic forecasting, and quarterly results processes.

Segment information applicable to the Company’s operating segments and the related reconciliations to consolidated amounts for the three months ended March 31, 2025 and 2024 are shown below (in thousands):

Three Months Ended March 31, 2025

Public Sector

Cost of sales

Personnel costs

Allocated corporate overhead

Depreciation and amortization

Other segment expenses 1

Operating income (loss)

Enterprise Solutions

Business Solutions

Public Sector Solutions

Headquarters/Other

Total operating income

Unallocated Headquarters/Other expenses

Interest income, net

Income before taxes

Selected operating expense:

Segment assets

Headquarters/Other assets

Consolidated assets

Three Months Ended March 31, 2024

Public Sector

Cost of sales

Personnel costs

Allocated corporate overhead

Depreciation and amortization

Enterprise Solutions

Business Solutions

Public Sector Solutions

Headquarters/Other

Total depreciation and amortization

Total assets:

Enterprise Solutions

Business Solutions

Public Sector Solutions

Headquarters/Other

Other segment expenses 1

Operating income (loss)

Unallocated Headquarters/Other expenses

Interest income, net

Income before taxes

Segment assets

Headquarters/Other assets

Consolidated assets

1) Other segment expenses for each of the reportable segments include service contracts/subscriptions, professional fees, facilities operations, credit card fees, and other miscellaneous expenses .

The assets of the Company’s three operating segments presented above consist primarily of accounts receivable, net intercompany receivables, goodwill, and other intangibles, net.

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 September 30, 2024 and 2023, total assets for the Headquarters/Other group were presented net of intercompany balance eliminations of $ 64,994 and $ 58,864 , respectively.

Assets reported under the Headquarters/Other 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, 2025 and 2024, total assets for the Headquarters/Other were presented net of intercompany balance eliminations of $ 61,063 and $ 15,039 , 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

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

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

Nine Months Ended

September 30, 2024

Balance - December 31, 2023

Other comprehensive income before reclassifications, net of tax

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

Net other comprehensive income

Balance - September 30, 2024

Nine Months Ended

September 30, 2023

Balance - December 31, 2022

Other comprehensive income before reclassifications, net of tax

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

Net other comprehensive income

Balance - September 30, 2023

Note 8–Commitments and Contingencies

4 unchanged sentences

Note 9–Bank Borrowings

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 ( 8.00 % at September 30, 2024).

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 for a given quarter to consolidated trailing twelve months Adjusted Earnings Before Interest Expense, Taxes, Depreciation, Amortization, and Special Charges, or Adjusted EBITDA.

The maximum allowable funded debt ratio under the agreement is 2.0 to 1.0.

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, 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, 2024 and 2023, the Company borrowed incremental amounts that were each repaid in full.

These borrowings for the nine months ended September 30, 2024 and 2023 totaled $ 25,204 and $ 70,877 , respectively;

The Company previously had a $ 50,000 credit facility collateralized by its account receivables that expired March 31, 2025 that the Company elected not to renew or replace.

Amounts outstanding under the credit facility bore 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 ( 7.50 % at March 31, 2025).

Cash receipts were automatically applied against any outstanding borrowings.

During the three months ended March 31, 2025 and 2024, the Company borrowed incremental amounts that were each repaid in full.

These borrowings for the three months ended March 31, 2025 and 2024 totaled $ 732 and $ 8,349 , 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, 2024 or 2023, 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 immediately prior to the expiration of the credit facility, or as of March 31, 2024.

Note 10–Supplier Finance Programs

The Company has agreements with third-party financial institutions, instituted by request of participating suppliers, that allow for the ability to finance payment obligations from the Company.

The third-party financial institutions have separate arrangements with the Company’s suppliers and provide them with the option to request early payment for invoices confirmed by the Company.

The Company does not determine the terms or conditions of the arrangements between the third-parties and its suppliers and receives no compensation from the third-party financial institutions.

The Company’s obligation to its suppliers, including amounts due and scheduled payment dates, are not impacted by the suppliers’ decisions to finance amounts under the arrangements.

The payment terms under these arrangements are typical with industry standards and range from 30 to 50 days .

The agreements with the financial institutions are collateralized by the inventory purchased through the financing agreements.

The Company’s outstanding payment obligations under the supplier finance programs, which are included in accounts payable on the condensed consolidated balance sheets, were $ 50,668 and $ 47,763 at March 31, 2025 and December 31, 2024, respectively.

The rollforward of the Company’s outstanding obligations confirmed as valid under the supplier finance programs for the three months ended March 31, 2025 is as follows (in thousands):

Confirmed obligations outstanding at December 31, 2024

Invoices confirmed

Confirmed invoices paid

Confirmed obligations outstanding at March 31, 2025

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