SEGMENT INFORMATION

9 Months Ended

Sep. 30, 2020

Segment Information

Segment Information

Note 5–Segment Information

The internal reporting structure used by the Company’s chief operating decision maker (“CODM”) to assess performance and allocate resources determines the basis for our reportable operating segments. The Company’s CODM is its Chief Executive Officer, and he evaluates operations and allocates resources based on a measure of operating income.

The Company’s operations are organized under three reportable segments—the Business Solutions segment, which serves primarily small- and medium-sized businesses; the Enterprise Solutions segment, which serves primarily medium-to-large corporations; and the Public Sector Solutions segment, which serves primarily federal, state, and local governmental 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. The Company reports 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.

Segment information applicable to our reportable operating segments for the three and nine months ended September 30, 2020 and 2019 is shown below:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Net sales:
Business Solutions	$	230,985	$	273,756	$	700,859	$	797,740
Enterprise Solutions		259,767		278,295		839,943		871,969
Public Sector Solutions		162,000		177,359		373,801		433,698
Total net sales	$	652,752	$	729,410	$	1,914,603	$	2,103,407
Operating income (loss):
Business Solutions	$	8,827	$	13,533	$	21,579	$	38,509
Enterprise Solutions		14,843		16,346		45,233		50,927
Public Sector Solutions		3,165		7,082		(1,964)		4,677
Headquarters/Other		(5,758)		(4,324)		(12,533)		(11,744)
Total operating income		21,077		32,637		52,315		82,369
Interest (expense) income, net		(17)		62		80		444
Income before taxes	$	21,060	$	32,699	$	52,395	$	82,813
Selected operating expense:
Depreciation and amortization:
Business Solutions	$	159	$	149	$	477	$	447
Enterprise Solutions		697		613		2,057		1,858
Public Sector Solutions		15		22		45		68
Headquarters/Other		2,962		2,323		7,756		7,811
Total depreciation and amortization	$	3,833	$	3,107	$	10,335	$	10,184
Total assets:
Business Solutions					$	343,010	$	300,360
Enterprise Solutions						551,914		488,867
Public Sector Solutions						123,520		90,437
Headquarters/Other						(15,110)		(9,016)
Total assets					$	1,003,334	$	870,648

The assets of our three operating segments presented above consist primarily of accounts receivable, net intercompany receivable, goodwill, and other intangibles. Assets reported under the Headquarters/Other group are managed by corporate headquarters, including cash, inventory, property and equipment, right-of-use assets, and intercompany balance, net. As of September 30, 2020 and 2019, total assets for the Headquarters/Other group are presented net of intercompany balance eliminations of $60,802 and $36,077, respectively. Our capital expenditures consist largely of IT hardware and software purchased to maintain or upgrade our management information systems. These information systems serve all of our segments, to varying degrees, and accordingly, our CODM does not evaluate capital expenditures on a segment-by-segment basis.