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Note 16 - Segment Information
 6 Months Ended
Jun. 30, 2024
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]

16.          Segment Information:

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The Company distributes software developed by others through resellers indirectly to customers worldwide.  We also resell computer software and hardware developed by others and provide technical services directly to customers worldwide.

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FASB ASC Topic 280, “Segment Reporting,” requires that public companies report profits and losses and certain other information on their “reportable operating segments” in their annual and interim financial statements. The internal organization used by the public company’s Chief Operating Decision Maker (“CODM”) to assess performance and allocate resources determines the basis for reportable operating segments. The Company’s Chief Executive Officer, who has been identified as the Company’s CODM, primarily uses operating income as the measure of profit or loss to assess segment performance and allocate resources. Operating income represents net sales less costs of sales, excluding depreciation and amortization expense and operating expenses. Net sales and cost of sales, excluding depreciation and amortization expense are directly attributed to each segment. The majority of operating expenses are also directly attributed to each segment, while certain other operating expenses are allocated to the segments in a reasonable manner considering the specific facts and circumstances of the expenses being allocated.

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The Company is organized into two reportable operating segments. The “Distribution” segment distributes technical software to corporate resellers, value added resellers (VARs), consultants and systems integrators worldwide. The “Solutions” segment is a provider of cloud solutions and value-added reseller of software, hardware and services to customers worldwide.

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As permitted by FASB ASC Topic 280, the Company has utilized the aggregation criteria in combining its operations in Canada, Europe and the United Kingdom with the domestic segments as the international operations provide the same products and services to similar clients and are considered together when the Company’s CODM decides how to allocate resources.

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Segment income is based on segment revenue less the respective segment’s cost of revenues as well as segment direct costs (including such items as payroll costs and payroll related costs, such as profit sharing, incentive awards and insurance) and excluding general and administrative expenses not attributed to an individual segment business unit. The Company only identifies accounts receivable, vendor prepayments, inventory, goodwill and intangible assets by segment as shown below as “Selected Assets” by segment; it does not allocate its other assets, including capital expenditures by segment. The following segment reporting information of the Company is provided:

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Six months ended

  

Three months ended

 

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June 30,

  

June 30,

 

​

 

2024

  

2023

  

2024

  

2023

 

Net Sales:

 

​

  

​

  

​

  

​

 

Distribution

 $174,663  $154,678  $87,842  $76,128 

Solutions

  9,835   12,093   4,234   5,604 

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  184,498   166,771   92,076   81,732 

Gross Profit:

 

​

  

​

  

​

  

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Distribution

 $29,898  $23,801  $15,683  $11,074 

Solutions

  5,679   5,100   2,875   2,619 

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  35,577   28,901   18,558   13,693 

Direct Costs:

 

​

  

​

  

​

  

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Distribution

 $14,912  $9,976  $7,535  $5,010 

Solutions

  2,683   2,618   1,302   1,317 

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  17,595   12,594   8,837   6,327 

Segment Income Before Taxes: (1)

 

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Distribution

 $14,986  $13,825  $8,148  $6,064 

Solutions

  2,996   2,482   1,573   1,302 

Segment Income Before Taxes

  17,982   16,307   9,721   7,366 

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General and administrative

 $7,901  $9,212  $4,137  $5,240 

Acquisition related costs

  592   31   469   9 

Depreciation and amortization expense

  1,736   1,317   865   604 

Interest, net

  557   441   354   330 

Foreign currency transaction loss

  (246)  40   (162)  (4)

Income before taxes

 $8,064  $6,228  $4,442  $1,839 

 

(1)

Excludes general corporate expenses including interest and foreign currency transaction loss

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As of

  

As of

 

​

 

June 30,

  

December 31,

 

Selected Assets by Segment:

 

2024

  

2023

 

​

 

​

  

​

 

Distribution

 $200,974  $242,927 

Solutions

  34,471   37,992 

Segment Select Assets

  235,445   280,919 

Corporate Assets

  67,325   54,179 

Total Assets

 $302,770  $335,098 

 

Geographic areas and net sales mix related to operations for the three and six months ended June 30, 2024 and 2023 were as follows. Revenue is allocated to a geographic area based on the location of the sale, which is generally the customer’s country of domicile.

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Six months ended

  

Three months ended

 
  

June 30, 2024

  

June 30, 2024

 

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Distribution

  

Solutions

  

Total

  

Distribution

  

Solutions

  

Total

 

Geography

         

​

          

​

 

USA

 $130,450  $2,989  $133,439  $68,087  $1,081  $69,168 

Europe and United Kingdom

  32,642   6,284   38,926   14,357   2,877   17,234 

Canada

  11,571   562   12,133   5,398   276   5,674 

Total net sales

 $174,663  $9,835  $184,498  $87,842  $4,234  $92,076 

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​

  

​

  

​

  

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Timing of Revenue Recognition

         

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​

 

Transferred at a point in time where the Company is principal (1)

 $151,467  $5,894  $157,361  $75,735  $2,336  $78,071 

Transferred at a point in time where the Company is agent (2)

  23,196   3,941   27,137   12,107   1,898   14,005 

Total net sales

 $174,663  $9,835  $184,498  $87,842  $4,234  $92,076 

 

  

Six months ended

  

Three months ended

 
  

June 30, 2023

  

June 30, 2023

 

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Distribution

  

Solutions

  

Total

  

Distribution

  

Solutions

  

Total

 

Geography

         

​

          

​

 

USA

 $119,387  $6,303  $125,690  $62,644  $2,637  $65,281 

Europe and United Kingdom

  22,550   5,089   27,639   7,134   2,589   9,723 

Canada

  12,741   701   13,442   6,350   378   6,728 

Total net sales

 $154,678  $12,093  $166,771  $76,128  $5,604  $81,732 

​

 

​

  

​

  

​

  

​

  

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​

 

Timing of Revenue Recognition

         

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​

 

Transferred at a point in time where the Company is principal (1)

 $136,439  $8,869  $145,308  $67,872  $4,036  $71,908 

Transferred at a point in time where the Company is agent (2)

  18,239   3,224   21,463   8,256   1,568   9,824 

Total net sales

 $154,678  $12,093  $166,771  $76,128  $5,604  $81,732 

 

(1)

Includes net sales from third-party hardware and software products.

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(2)

Includes net sales from third-party maintenance, software support and services.

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Geographic identifiable assets related to operations as of  June 30, 2024 and  December 31, 2023 were as follows.

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June 30,

  

December 31,

 

Identifiable Assets by Geographic Areas

 

2024

  

2023

 

USA

 $155,976  $171,080 

Canada

  26,537   23,994 

Europe and United Kingdom

  120,257   140,024 

Total

 $302,770  $335,098