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Segment and Related Disclosures
9 Months Ended
Sep. 30, 2013
Segment and Related Disclosures

Note 4–Segment and Related Disclosures

The internal reporting structure used by our chief operating decision maker (“CODM”) to assess performance and allocate resources determines the basis for our reportable operating segments. Our CODM is our Chairman of the Board of Directors, and she evaluates operations and allocates resources based on a measure of operating income.

Our operations are organized under three reporting segments—the SMB segment, which serves primarily small- and medium-sized businesses, consumers, and small office/home office markets; the Large Account segment, which serves primarily medium-to-large corporations; and the Public Sector 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, 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. We report 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.

 

Net sales presented below exclude inter-segment product revenues. Segment information applicable to our reportable operating segments for the three and nine months September 30, 2013 and 2012 is shown below:

 

     Three Months Ended     Nine Months Ended  
     September 30,
2013
    September 30,
2012
    September 30,
2013
    September 30,
2012
 

Net sales:

        

SMB

   $ 235,285      $ 219,235      $ 713,157      $ 674,149   

Large Account

     193,124        192,818        575,671        571,081   

Public Sector

     151,947        149,241        354,238        357,396   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total net sales

   $ 580,356      $ 561,294      $ 1,643,066      $ 1,602,626   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income (loss):

        

SMB

     8,201        7,350        24,236        21,992   

Large Account

     8,595        8,413        21,870        24,469   

Public Sector

     2,806        3,883        2,404        5,712   

Headquarters/Other

     (2,092     (3,346     (5,492     (12,179
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating income

   $ 17,510      $ 16,300      $ 43,018      $ 39,994   

Interest/other expense, net

     (39     (63     (135     (110
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before taxes

   $ 17,471      $ 16,237      $ 42,883      $ 39,884   
  

 

 

   

 

 

   

 

 

   

 

 

 

Selected Operating Expense:

        

Depreciation and amortization:

        

SMB

     2        3        4        8   

Large Account

     528        545        1,566        1,528   

Public Sector

     45        39        122        127   

Headquarters/Other

     1,100        1,083        3,319        3,188   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total depreciation and amortization

   $ 1,675      $ 1,670      $ 5,011      $ 4,851   
  

 

 

   

 

 

   

 

 

   

 

 

 

Special charges (Headquarters/Other)

   $ —        $ —        $ —        $ 1,135   

Assets at September 30, 2013:

        

SMB

         159,943     

Large Account

         226,438     

Public Sector

         59,372     

Headquarters/Other

         50,427     
      

 

 

   

Total assets

       $ 496,180     
      

 

 

   

The assets of our operating segments presented above consist primarily of accounts receivable, intercompany receivable, goodwill, and other intangibles. Assets reported under the Headquarters/Other group are managed by corporate headquarters, including cash, inventory, and property and equipment. Total assets for the Headquarters/Other group are presented net of intercompany balance eliminations of $19,916 as of September 30, 2013. Our capital expenditures consist largely of IT hardware and software purchased to maintain or upgrade our management information systems. These systems serve all of our subsidiaries, to varying degrees, and as a result, our CODM does not evaluate capital expenditures on a segment basis.

 

Senior management also monitors revenue by product mix. Net sales by product mix are presented below:

 

     Three Months Ended      Nine Months Ended  

September 30,

   2013      2012      2013      2012  

Notebook/Tablet

   $ 116,176       $ 108,474       $ 314,902       $ 298,515   

Desktop/Server

     93,440         84,061         252,176         248,928   

Software

     87,519         81,902         253,361         239,027   

Net/Com Product

     58,920         54,718         165,835         155,430   

Video, Imaging and Sound

     51,948         51,907         145,604         149,874   

Printer and Printer Supplies

     37,649         41,227         111,713         115,541   

Storage

     37,206         37,090         103,592         111,782   

Memory and System Enhancement

     19,275         18,829         49,308         50,887   

Accessory/Services/Other

     78,223         83,086         246,575         232,642   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 580,356       $ 561,294       $ 1,643,066       $ 1,602,626