v3.26.1
Note 17 - Segment Information
 6 Months Ended
Jun. 30, 2026
Notes to Financial Statements  
Segment Reporting [Text Block]

17.          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, evaluates the performance of both reportable segments based on segment income. Net sales, gross profit, and operating expenses are also monitored closely. This information is used to measure segment profitability, allocate resources, and make budgeting and forecasting decisions about the reportable segments. The CODM also uses these measures to monitor trends in year over year performance comparisons, sequential quarter performance comparisons, and to compare actual results to forecasts. More disaggregated information about operating expense is only reviewed by the CODM on a consolidated basis. Segment 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, 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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Six months ended

    

Three months ended

  
   

June 30,

    

June 30,

  
   

2026

    

2025

    

2026

    

2025

  

Net Sales:

                        

Distribution

   $ 344,879     $ 285,172     $ 167,777     $ 153,010  

Solutions

     11,706       12,156       6,432       6,274  
      356,585       297,328       174,209       159,284  

Cost of Sales:

                        

Distribution

   $ 295,519     $ 241,725     $ 141,773     $ 129,962  

Solutions

     4,410       5,899       2,279       3,014  
      299,929       247,624       144,052       132,976  

Direct Costs:

                        

Distribution

   $ 25,882     $ 20,119     $ 13,047     $ 10,106  

Solutions

     3,355       3,102       1,738       1,613  
      29,237       23,221       14,784       11,719  

Segment Income: (1)

                        

Distribution

   $ 23,478     $ 23,328     $ 12,958     $ 12,942  

Solutions

     3,941       3,155       2,415       1,647  

Segment Income

     27,419       26,483       15,373       14,589  
                                 

General and administrative

   $ 11,764     $ 9,891     $ 5,884     $ 4,638  

Acquisition related costs

     319       139       19       13  

Depreciation and amortization expense

     4,063       3,720       2,080       1,982  

Interest, net

     418       337       275       151  

Foreign currency transaction gain (loss)

     24       (567 )     (120 )     14  

Change in fair value of acquisition contingent consideration

     —       (515 )     —       (379 )

Income before taxes

   $ 11,715     $ 11,988     $ 7,545     $ 7,742  

 

(1)

Excludes general corporate expenses including acquisition related costs, amortization and depreciation expense, interest, foreign currency transaction (loss) gain, and change in fair value of acquisition contingent consideration.

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As of

    

As of

  
   

June 30,

    

December 31,

  

Selected Assets by Segment:

  

2026

    

2025

  
             

Distribution

   $ 355,856     $ 375,024  

Solutions

     21,303       22,124  

Segment Select Assets

     377,159       397,148  

Corporate Assets

     85,339       63,085  

Total Assets

   $ 462,498     $ 460,233  

 

Geographic areas and net sales mix related to operations for the three and six months ended June 30, 2026 and 2025 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, 2026

    

June 30, 2026

  
   

Distribution

    

Solutions

    

Total

    

Distribution

    

Solutions

    

Total

  

Geography

                                            

USA

   $ 280,706     $ 3,831     $ 284,537     $ 132,880     $ 2,289     $ 135,169  

United Kingdom

     28,997       7,209       36,206       16,928       3,737       20,665  

Europe

     13,639       322       13,961       8,357       252       8,610  

Canada

     21,537       344       21,881       9,613       154       9,766  

Total net sales

   $ 344,879     $ 11,706     $ 356,585     $ 167,777     $ 6,432     $ 174,209  
                                     

Timing of Revenue Recognition

                                            

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

   $ 320,848     $ 8,157     $ 329,005     $ 152,743     $ 4,606     $ 157,349  

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

     24,031       3,549       27,580       15,034       1,826       16,860  

Total net sales

   $ 344,879     $ 11,706     $ 356,585     $ 167,777     $ 6,432     $ 174,209  

 

   

Six months ended

    

Three months ended

  
   

June 30, 2025

    

June 30, 2025

  
   

Distribution

    

Solutions

    

Total

    

Distribution

    

Solutions

    

Total

  

Geography

                                            

USA

   $ 219,450     $ 4,180     $ 223,630     $ 114,362     $ 2,226     $ 116,588  

United Kingdom

     38,539       7,382       45,921       24,704       3,675       28,379  

Europe

     11,867       214       12,081       7,109       141       7,250  

Canada

     15,316       380       15,696       6,835       232       7,067  

Total net sales

   $ 285,172     $ 12,156     $ 297,328     $ 153,010     $ 6,274     $ 159,284  
                                     

Timing of Revenue Recognition

                                            

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

   $ 259,164     $ 8,765     $ 267,929     $ 140,176     $ 4,466     $ 144,642  

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

     26,008       3,391       29,399       12,834       1,808       14,642  

Total net sales

   $ 285,172     $ 12,156     $ 297,328     $ 153,010     $ 6,274     $ 159,284  

 

(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, 2026 and  December 31, 2025 were as follows.

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June 30,

    

December 31,

  

Identifiable Assets by Geographic Areas

  

2026

    

2025

  

USA

   $ 287,395     $ 266,238  

United Kingdom

   $ 93,546     $ 125,191  

Europe

     47,646       37,031  

Canada

     33,911       31,773  

Total

   $ 462,498     $ 460,233