SEGMENT INFORMATION

6 Months Ended

Jun. 30, 2023

Segment Information

Segment Information

Note 5–Segment Information

The internal reporting structure used by the Company’s chief operating decision maker, or CODM, to assess performance and allocate resources determines the basis for the Company’s 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 segments—the Business Solutions segment, which serves primarily small- to 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 government and educational institutions. In addition, the Headquarters/Other group provides services in areas such as finance, human resources, information technology, or IT, 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.

Net sales presented below exclude inter-segment product revenues. Segment information applicable to the Company’s operating segments for the three and six months ended June 30, 2023 and 2022 is shown below (in thousands):

	Three Months Ended				Six Months Ended
	June 30,		June 30,		June 30,		June 30,
	2023		2022		2023		2022
Net sales:
Business Solutions	$	261,027	$	328,351	$	534,141	$	648,794
Enterprise Solutions		287,153		348,954		601,096		684,351
Public Sector Solutions		185,367		151,204		325,855		283,708
Total net sales	$	733,547	$	828,509	$	1,461,092	$	1,616,853
Operating income (loss):
Business Solutions	$	18,831	$	22,279	$	35,384	$	42,952
Enterprise Solutions		7,511		15,389		14,033		29,703
Public Sector Solutions		1,650		1,071		1,679		(55)
Headquarters/Other		(2,921)		(3,969)		(7,908)		(7,695)
Total operating income		25,071		34,770		43,188		64,905
Other income, net		1,874		15		3,160		11
Income before taxes	$	26,945	$	34,785	$	46,348	$	64,916
Selected operating expense:
Depreciation and amortization:
Business Solutions	$	158	$	168	$	317	$	335
Enterprise Solutions		423		501		847		1,035
Public Sector Solutions		20		20		39		39
Headquarters/Other		2,493		2,300		4,964		4,571
Total depreciation and amortization	$	3,094	$	2,989	$	6,167	$	5,980
Total assets:
Business Solutions					$	472,566	$	430,763
Enterprise Solutions						678,104		663,837
Public Sector Solutions						102,652		86,743
Headquarters/Other						(89,047)		(57,710)
Total assets					$	1,164,275	$	1,123,633

The assets of the Company’s 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 and cash equivalents, inventories, property and equipment, ROU assets, and intercompany balance, net. As of June 30, 2023 and 2022, total assets for the Headquarters/Other group were presented net of intercompany balance eliminations of $55,432 and $41,439, respectively. The Company’s capital expenditures consist largely of IT hardware and software purchased to maintain or upgrade its management information systems. These information systems serve all of the Company’s segments, to varying degrees, and accordingly, the CODM does not evaluate capital expenditures on a segment-by-segment basis.