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Segment Information
3 Months Ended
Mar. 31, 2019
Segment Reporting [Abstract]  
Segment Information

11.Segment Information

 

We operate in three reportable geographic operating segments: North America; EMEA; and APAC.  Our offerings in North America and certain countries in EMEA and APAC include IT hardware, software and services.  Our offerings in the remainder of our EMEA and APAC segments are largely software and certain software-related services.

The following table summarizes net sales by offering for North America, EMEA and APAC including the effect of the reclassifications on the previously reported net sales by sales mix amounts for the three months ended March 31, 2019 and 2018 (in thousands):

 

 

 

North America

 

 

EMEA

 

 

APAC

 

 

 

Three Months Ended

March 31,

 

 

Three Months Ended

March 31,

 

 

Three Months Ended

March 31,

 

Sales Mix

 

2019

 

 

2018

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hardware

 

$

748,337

 

 

$

873,341

 

 

$

171,525

 

 

$

187,010

 

 

$

6,518

 

 

$

7,160

 

Software

 

 

322,079

 

 

 

261,060

 

 

 

183,148

 

 

 

190,202

 

 

 

35,065

 

 

 

39,019

 

Services

 

 

172,025

 

 

 

143,979

 

 

 

35,502

 

 

 

29,922

 

 

 

11,267

 

 

 

10,801

 

 

 

$

1,242,441

 

 

$

1,278,380

 

 

$

390,175

 

 

$

407,134

 

 

$

52,850

 

 

$

56,980

 

All significant intercompany transactions are eliminated upon consolidation, and there are no differences between the accounting policies used to measure profit and loss for our segments or on a consolidated basis.  Net sales are defined as net sales to external clients.  None of our clients exceeded ten percent of consolidated net sales for the three months ended March 31, 2019 or 2018.

A portion of our operating segments’ selling and administrative expenses arise from shared services and infrastructure that we have historically provided to them in order to realize economies of scale and to use resources efficiently.  These expenses, collectively identified as corporate charges, include senior management expenses, internal audit, legal, tax, insurance services, treasury and other corporate infrastructure expenses.  Charges are allocated to our operating segments, and the allocations have been determined on a basis that we considered to be a reasonable reflection of the utilization of services provided to or benefits received by the operating segments.  

 

The following tables present our results of operations by reportable operating segment for the periods indicated (in thousands):

 

 

 

Three Months Ended March 31, 2019

 

 

 

North America

 

 

EMEA

 

 

APAC

 

 

Consolidated

 

Net sales:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Products

 

$

1,070,416

 

 

$

354,673

 

 

$

41,583

 

 

$

1,466,672

 

Services

 

 

172,025

 

 

 

35,502

 

 

 

11,267

 

 

 

218,794

 

Total net sales

 

 

1,242,441

 

 

 

390,175

 

 

 

52,850

 

 

 

1,685,466

 

Costs of goods sold:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Products

 

 

974,701

 

 

 

324,038

 

 

 

38,569

 

 

 

1,337,308

 

Services

 

 

85,133

 

 

 

9,154

 

 

 

5,399

 

 

 

99,686

 

Total costs of goods sold

 

 

1,059,834

 

 

 

333,192

 

 

 

43,968

 

 

 

1,436,994

 

Gross profit

 

 

182,607

 

 

 

56,983

 

 

 

8,882

 

 

 

248,472

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling and administrative expenses

 

 

136,950

 

 

 

47,145

 

 

 

6,968

 

 

 

191,063

 

Severance and restructuring expenses

 

 

331

 

 

 

(85

)

 

 

124

 

 

 

370

 

Earnings from operations

 

$

45,326

 

 

$

9,923

 

 

$

1,790

 

 

$

57,039

 

 

 

 

Three Months Ended March 31, 2018

 

 

 

North America

 

 

EMEA

 

 

APAC

 

 

Consolidated

 

Net sales:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Products

 

$

1,134,401

 

 

$

377,212

 

 

$

46,179

 

 

$

1,557,792

 

Services

 

 

143,979

 

 

 

29,922

 

 

 

10,801

 

 

 

184,702

 

Total net sales

 

 

1,278,380

 

 

 

407,134

 

 

 

56,980

 

 

 

1,742,494

 

Costs of goods sold:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Products

 

 

1,028,970

 

 

 

343,019

 

 

 

42,997

 

 

 

1,414,986

 

Services

 

 

74,039

 

 

 

8,065

 

 

 

5,141

 

 

 

87,245

 

Total costs of goods sold

 

 

1,103,009

 

 

 

351,084

 

 

 

48,138

 

 

 

1,502,231

 

Gross profit

 

 

175,371

 

 

 

56,050

 

 

 

8,842

 

 

 

240,263

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling and administrative expenses

 

 

132,640

 

 

 

48,283

 

 

 

7,257

 

 

 

188,180

 

Severance and restructuring expenses

 

 

443

 

 

 

1,074

 

 

 

127

 

 

 

1,644

 

Earnings from operations

 

$

42,288

 

 

$

6,693

 

 

$

1,458

 

 

$

50,439

 

 

The following is a summary of our total assets by reportable operating segment (in thousands):

 

 

 

March 31,

2019

 

 

December 31,

2018

 

North America

 

$

2,640,942

 

 

$

2,660,886

 

EMEA

 

 

614,556

 

 

 

611,338

 

APAC

 

 

114,156

 

 

 

98,959

 

Corporate assets and intercompany eliminations, net

 

 

(613,187

)

 

 

(595,236

)

Total assets

 

$

2,756,467

 

 

$

2,775,947

 

 

We recorded the following pre-tax amounts, by reportable operating segment, for depreciation and amortization in the accompanying consolidated financial statements (in thousands):

 

 

 

Three Months Ended

March 31,

 

 

 

2019

 

 

2018

 

Depreciation and amortization of property and

   equipment:

 

 

 

 

 

 

 

 

North America

 

$

3,957

 

 

$

4,298

 

EMEA

 

 

955

 

 

 

1,003

 

APAC

 

 

132

 

 

 

132

 

 

 

 

5,044

 

 

 

5,433

 

Amortization of intangible assets:

 

 

 

 

 

 

 

 

North America

 

 

3,636

 

 

 

3,360

 

EMEA

 

 

69

 

 

 

74

 

APAC

 

 

118

 

 

 

177

 

 

 

 

3,823

 

 

 

3,611

 

Total

 

$

8,867

 

 

$

9,044