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Note 16 - Segment Information
 9 Months Ended
Sep. 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. The Company's reportable segments are based on products and services delivered, and the Company's CODM decides how to assess performance and allocate resources based on segment.

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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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Nine months ended

  

Three months ended

 

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September 30,

  

September 30,

 

​

 

2024

  

2023

  

2024

  

2023

 

Net Sales:

 

​

  

​

  

​

  

​

 

Distribution

 $286,523  $226,905  $111,861  $72,227 

Solutions

  17,324   18,324   7,488   6,230 

​

  303,847   245,229   119,349   78,457 

Gross Profit:

 

​

  

​

  

​

  

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Distribution

 $51,454  $35,472  $21,557  $11,671 

Solutions

  8,379   7,704   2,700   2,603 

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  59,833   43,176   24,257   14,274 

Direct Costs:

 

​

  

​

  

​

  

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Distribution

 $23,342  $15,225  $8,430  $5,249 

Solutions

  4,013   3,844   1,330   1,226 

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  27,355   19,069   9,760   6,475 

Segment Income Before Taxes: (1)

 

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Distribution

 $28,112  $20,247  $13,127  $6,422 

Solutions

  4,366   3,860   1,370   1,377 

Segment Income Before Taxes

  32,478   24,107   14,497   7,799 

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General and administrative

 $12,078  $12,861  $4,177  $3,647 

Acquisition related costs

  1,201   277   609   246 

Depreciation and amortization expense

  2,933   1,934   1,197   617 

Interest, net

  755   760   198   318 

Foreign currency transaction loss

  (688)  (100)  (442)  (140)

Change in fair value of acquisition contingent consideration

  (1,152)  —   (1,152)  — 

Income before taxes

 $15,181  $9,695  $7,118  $3,467 

 

(1)

Excludes general corporate expenses including interest and foreign currency transaction loss

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As of

  

As of

 

​

 

September 30,

  

December 31,

 

Selected Assets by Segment:

 

2024

  

2023

 

​

 

​

  

​

 

Distribution

 $306,914  $242,927 

Solutions

  21,860   37,992 

Segment Select Assets

  328,774   280,919 

Corporate Assets

  43,166   54,179 

Total Assets

 $371,940  $335,098 

 

Geographic areas and net sales mix related to operations for the three and nine months ended September 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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Nine months ended

  

Three months ended

 
  

September 30, 2024

  

September 30, 2024

 

​

 

Distribution

  

Solutions

  

Total

  

Distribution

  

Solutions

  

Total

 

Geography

         

​

          

​

 

USA

 $208,462  $6,808  $215,270  $78,012  $3,818  $81,830 

Europe and United Kingdom

  62,135   9,702   71,837   29,494   3,418   32,912 

Canada

  15,926   814   16,740   4,355   252   4,607 

Total net sales

 $286,523  $17,324  $303,847  $111,861  $7,488  $119,349 

​

 

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​

  

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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)

 $253,027  $10,969  $263,996  $101,561  $5,074  $106,635 

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

  33,496   6,355   39,851   10,300   2,414   12,714 

Total net sales

 $286,523  $17,324  $303,847  $111,861  $7,488  $119,349 

 

  

Nine months ended

  

Three months ended

 
  

September 30, 2023

  

September 30, 2023

 

​

 

Distribution

  

Solutions

  

Total

  

Distribution

  

Solutions

  

Total

 

Geography

         

​

          

​

 

USA

 $180,278  $9,908  $190,186  $60,891  $3,605  $64,496 

Europe and United Kingdom

  28,903   7,508   36,411   6,353   2,418   8,771 

Canada

  17,724   908   18,632   4,983   207   5,190 

Total net sales

 $226,905  $18,324  $245,229  $72,227  $6,230  $78,457 

​

 

​

  

​

  

​

  

​

  

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Timing of Revenue Recognition

         

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

 $200,027  $13,290  $213,317  $63,587  $4,422  $68,009 

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

  26,878   5,034   31,912   8,640   1,808   10,448 

Total net sales

 $226,905  $18,324  $245,229  $72,227  $6,230  $78,457 

 

(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  September 30, 2024 and  December 31, 2023 were as follows.

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​

 

September 30,

  

December 31,

 

Identifiable Assets by Geographic Areas

 

2024

  

2023

 

USA

 $226,717  $171,080 

Canada

  25,345   23,994 

Europe and United Kingdom

  119,878   140,024 

Total

 $371,940  $335,098