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Acquisitions | 6 Months Ended
--- | ---
Dec. 31, 2016
Business Combinations [Abstract] |
Acquisitions | Acquisitions KBZ On September 4, 2015, the Company acquired substantially all the assets of KBZ Communications, Inc. ("KBZ"), a Cisco Authorized Distributor specializing in video conferencing, services, and cloud. KBZ is part of the Company's Worldwide Barcode, Networking and Security operating segment. This acquisition enables the Company to enhance its focus on Cisco’s solutions, combining the strengths of both companies to provide a more robust portfolio of products, solutions and services. Under the asset purchase agreement, the Company acquired the assets of KBZ for a cash payment of $64.6 million. The Company acquired $3.1 million of cash during the acquisition, resulting in $61.5 million net cash paid for KBZ. Per the asset purchase agreement, a portion of the purchase price was placed into escrow to indemnify the Company of any pre-acquisition damages. As of December 31, 2016, the balance available in escrow was $5.0 million. The purchase price of this acquisition was allocated to the assets acquired and liabilities assumed based on their estimated fair values on the transaction date. Pro forma results of operations have not been presented for this acquisition because the results of this acquisition are not material to our consolidated results. The purchase price allocation is as follows:
| KBZ
| (in thousands)
Receivables, net | $ | 63,131 |
Inventory | 11,227 |
Other Current Assets | 10,303 |
Property and equipment, net | 677 |
Goodwill | 21,639 |
Identifiable intangible assets | 18,400 |
Other non-current assets | 1,399 |
| $ | 126,776 |
Accounts payable | $ | 48,271 |
Accrued expenses and other current liabilities | 14,863 |
Other long-term liabilities | 2,167 |
Consideration transferred, net of cash acquired | 61,475 |
| $ | 126,776 |
Intangible assets acquired include trade names, customer relationships, and non-compete agreements. Intelisys On August 29, 2016, the Company acquired substantially all the assets of Intelisys, a technology services company with voice, data, cable, wireless, and cloud services. Intelisys is part of the Company's Worldwide Communications and Services operating segment. With this acquisition, the Company broadens its capabilities in the telecom and cloud services market and generates the opportunity for high-growth recurring revenue. Under the asset purchase agreement, the Company structured the purchase transaction with an initial cash payment of approximately $84.6 million, which consisted of an initial purchase price of $83.6 million and $1.0 million for additional net assets acquired at closing, plus four additional annual cash installments based on a form of adjusted EBITDA for the periods ending June 30, 2017 through June 30, 2020. The Company acquired $0.8 million of cash during the acquisition, resulting in $83.8 million net cash paid for Intelisys initially. Per the asset purchase agreement, a portion of the purchase price was placed into escrow to indemnify the Company of any pre-acquisition damages. As of December 31, 2016, the balance available in escrow was $8.5 million. The purchase price of this acquisition was allocated to the assets acquired and liabilities assumed based on their estimated fair values on the transaction date. The goodwill balance is primarily attributed to entering the recurring revenue telecom and cloud services market and expanded market opportunities to grow recurring revenue streams. Goodwill in its entirety is expected to be deductible for tax purposes.
| Intelisys
| (in thousands)
Receivables, net | $ | 21,655 |
Other current assets | 1,547 |
Property and equipment, net | 5,298 |
Goodwill | 109,005 |
Identifiable intangible assets | 63,110 |
Other non-current assets | 1,839 |
| $ | 202,454 |
Accounts payable | $ | 21,063 |
Accrued expenses and other current liabilities | 2,587 |
Contingent consideration | 95,000 |
Consideration transferred, net of cash acquired | 83,804 |
| $ | 202,454 |
Following the acquisition date, Intelisys contributed the following results to the Condensed Consolidated Income Statement for the quarter and six months ended December 31, 2016.
| Quarter ended December 31, 2016 |  | Six months ended December 31, 2016
Net Sales | $ | 8,487 |  |  | $ | 11,350 |
Amortization of intangible assets | 1,585 |  |  | 2,115 |
Change in fair value of contingent consideration | 2,337 |  |  | 3,167 |
Operating income (loss) | (151 | ) |  | (286 | )
Net income (loss) | $ | 311 |  |  | $ | 11 |
The following tables summarize the Company's unaudited consolidated pro forma results of operations as though the acquisition happened on July 1, 2015. The pro forma consolidated financial statements do not necessarily reflect what the combined company's financial condition or results from operations would have been had the acquisition occurred on the dates indicated. They also may not be useful in predicting the future financial condition and results of operations of the combined company. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors. For the two months ended August 31, 2016 and the quarter and six months ended December 31, 2015, the Company has not provided for a change in fair value of contingent consideration.
| Quarter ended December 31, 2016 |  | Six months ended December 31, 2016
| (in thousands, except per share data) |  | (in thousands, except per share data)
| As Reported, Consolidated |  | Pro forma, Consolidated (1) |  | As Reported, Consolidated |  | Pro forma, Consolidated (2)
Net Sales | $ | 904,792 |  |  | $ | 904,792 |  |  | $ | 1,837,357 |  |  | $ | 1,842,573 |
Operating income | 23,275 |  |  | 23,358 |  |  | 46,150 |  |  | 47,602 |
Net Income | 23,036 |  |  | 23,119 |  |  | 37,852 |  |  | 38,937 |
Earnings per share: |  |  |  |  |  |  |
Basic | $ | 0.92 |  |  | $ | 0.92 |  |  | $ | 1.49 |  |  | $ | 1.54 |
Diluted | $ | 0.91 |  |  | $ | 0.91 |  |  | $ | 1.48 |  |  | $ | 1.53 |
(1) Pro forma results add back $0.1 million of acquisition costs for the quarter ended December 31, 2016. (2) Pro forma results include actual results from Intelisys for the two months ended August 31, 2016. Adjustments include additional amortization and depreciation expense as if the fair value of identifiable intangible assets, including software, had been recorded on July 1, 2015. On a gross basis, operating income includes additional amortization expense of $1.1 million and additional depreciation expense of $0.2 million for the six months ended December 31, 2016. Net income, net of tax, includes additional amortization expense of $0.7 million and additional depreciation expense of $0.1 million for the six months ended December 31, 2016. Adjustments also include additional income tax expense of $0.8 million and adding back acquisition costs of $0.5 million.
| Quarter ended December 31, 2015 |  | Six months ended December 31, 2015
| (in thousands, except per share data) |  | (in thousands, except per share data)
| As Reported, Consolidated |  | Pro forma, Consolidated (3) |  | As Reported, Consolidated |  | Pro forma, Consolidated (4)
Net Sales | $ | 993,522 |  |  | $ | 1,000,440 |  |  | $ | 1,864,350 |  |  | $ | 1,878,491 |
Operating income | 31,852 |  |  | 32,821 |  |  | 56,293 |  |  | 59,371 |
Net Income | 20,656 |  |  | 21,152 |  |  | 36,652 |  |  | 38,471 |
Earnings per share: |  |  |  |  |  |  |
Basic | $ | 0.78 |  |  | $ | 0.79 |  |  | $ | 1.35 |  |  | $ | 1.42 |
Diluted | $ | 0.77 |  |  | $ | 0.79 |  |  | $ | 1.34 |  |  | $ | 1.40 |
(3) Includes actual results for Intelisys for the quarter ended December 31, 2015. On a gross basis, operating income includes additional amortization expense was $1.6 million and additional depreciation expense was $0.3 million for the quarter ended December 31, 2015. Net income, net of tax, includes additional amortization expense was $1.0 million and additional depreciation expense was $0.2 million for the quarter ended December 31, 2015. Adjustments also include additional income tax expense of $1.1 million. (4) Includes actual results for Intelisys for the six months ended December 31, 2015. On a gross basis, operating income includes additional amortization expense of $3.2 million and additional depreciation expense of $0.5 million for the six months ended December 31, 2015. Net income, net of tax, includes additional amortization expense of $2.0 million and additional depreciation expense of $0.3 million for the six months ended December 31, 2015. Adjustments also include additional income tax expense of $2.6 million.

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=65885119&loc=d3e1497-128463 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=65885119&loc=d3e1490-128463 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=65885119&loc=d3e1392-128463 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e7008-128479 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=65885119&loc=d3e1486-128463 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e6927-128479 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=73530397&loc=d3e4845-128472 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 7 -URI http://asc.fasb.org/extlink&oid=65885119&loc=d3e1524-128463 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e7000-128479 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=73530397&loc=d3e4922-128472 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=73530397&loc=d3e4934-128472 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=73530397&loc=d3e4926-128472 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 4A -URI http://asc.fasb.org/extlink&oid=73530397&loc=SL65897772-128472 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=65885119&loc=d3e1383-128463 Reference 15: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e6996-128479 + Details
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