SEGMENT INFORMATION

9 Months Ended

Sep. 30, 2024

Segment Information

Segment and Related Disclosures

Note 6–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 Enterprise Solutions segment, which serves primarily medium-to-large corporations; the Business Solutions segment, which serves primarily small- to medium-sized businesses; 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 nine months ended September 30, 2024 and 2023 is shown below (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Net sales:
Enterprise Solutions	$	296,970	$	276,566	$	878,437	$	877,662
Business Solutions		252,631		269,021		786,698		803,162
Public Sector Solutions		175,116		147,499		428,086		473,354
Total net sales	$	724,717	$	693,086	$	2,093,221	$	2,154,178
Operating income (loss):
Enterprise Solutions	$	10,280	$	11,230	$	26,357	$	25,263
Business Solutions		20,065		21,040		58,083		56,424
Public Sector Solutions		4,342		4,117		1,706		5,796
Headquarters/Other		(4,646)		(4,365)		(11,722)		(12,273)
Total operating income		30,041		32,022		74,424		75,210
Interest income, net		4,837		2,688		14,053		5,848
Other income		1,700		—		1,700		—
Income before taxes	$	36,578	$	34,710	$	90,177	$	81,058
Selected operating expense:
Depreciation and amortization:
Enterprise Solutions	$	215	$	391	$	641	$	1,238
Business Solutions		155		156		465		473
Public Sector Solutions		22		22		68		61
Headquarters/Other		2,887		2,720		8,644		7,684
Total depreciation and amortization	$	3,279	$	3,289	$	9,818	$	9,456
Total assets:
Enterprise Solutions					$	717,143	$	676,694
Business Solutions						553,881		481,483
Public Sector Solutions						117,728		110,919
Headquarters/Other						(103,007)		(87,669)
Total assets					$	1,285,745	$	1,181,427

The assets of the Company’s three operating segments presented above consist primarily of accounts receivable, net intercompany receivables, goodwill, and other intangibles, net. Assets reported under the Headquarters/Other group are managed by corporate headquarters, including cash and cash equivalents, short-term investments, inventories, property and equipment, ROU assets, and intercompany balance, net. As of September 30, 2024 and 2023, total assets for the Headquarters/Other group were presented net of intercompany balance eliminations of $64,994 and $58,864, 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.