EX-99.1 2 ex99-1.htm

 

EXHIBIT 99.1

 

Investor Relations:

Kim Rogers

Hayden IR

(385) 831-7337

kim@haydenir.com

 

PCM REPORTS RECORD SECOND QUARTER 2019 RESULTS

ANNOUNCED PROPOSED MERGER WITH INSIGHT

 

Gross Profit Increased to a Record $91.0 million; Gross Margin Increased to a Q2 Record 16.6%

GAAP EPS (including M&A related charges) of $0.62; Non-GAAP EPS Increased 6% to $0.87

 

El Segundo, California — August 8, 2019 — PCM, Inc. (NASDAQ: PCMI), a leading technology solutions provider, today reported financial results for the second quarter and six months ended June 30, 2019.

 

Consolidated Financial Summary

 

   Three Months Ended June 30,   Six Months Ended June 30, 
(in millions, except per share data)  2019   2018   % Change   2019   2018   % Change 
Net Sales  $548.3   $546.4    0%  $1,082.3   $1,089.3    (1)%
Gross Profit   91.0    90.4    1    174.1    174.0    0 
Gross Profit Margin   16.6%   16.5%   10 bp    16.1%   16.0%   10 bp 
SG&A Expenses  $78.1   $77.2    1   $152.8   $154.6    (1)
Operating Profit   12.9    13.2    (2)   21.3    19.4    10 
Net Income   8.2    7.9    4    12.9    10.7    20 
Non-GAAP Net Income   11.5    10.0    15    17.6    14.2    24 
                               
EBITDA   16.3    16.6    (2)   28.1    26.7    5 
Adjusted EBITDA   20.6    19.0    8    33.8    30.0    13 
                               
Diluted Earnings Per Share   0.62    0.64    (3)   0.97    0.88    10 
Adjusted Diluted Earnings Per Share   0.87    0.82    6    1.33    1.17    14 

 

Frank Khulusi, Chairman and CEO of PCM, Inc., stated, “I am very pleased with our results for the second quarter as we saw sales growth in three of our four segments, with Commercial growing 5%, Canada growing 9% and UK growing 50% year over year, while improving our gross margin to second quarter record 16.6%. Additionally, sales of services accelerated in the quarter, with commercial service sales increasing 17% and Canada service sales growing 11%. These results benefited from our investments in advanced technologies, including cloud, security, hybrid data center and collaboration, as our capabilities in these and other areas have been resonating with our customers and vendors alike. Coupled with continued focus on tight expense management, we drove an 8% increase in adjusted EBITDA.”

 

Proposed Insight Merger Transaction

 

On June 24, 2019, PCM announced that it has entered into an agreement under which Insight Enterprises (Nasdaq: NSIT) will acquire PCM for $35 per share. The transaction is expected to close in the third quarter of 2019. The press release of the announcement can be accessed at investor.pcm.com under “Press Releases.” Due to the pending transaction, the Company will not host a conference call to discuss its second quarter results and is suspending guidance.

 

Khulusi concluded, “I am excited about the pending transaction with Insight and the value that it brings to shareholders of both companies. We are working together to expeditiously close the transaction, and currently expect it to close in the third quarter of 2019.”

 

1
 

 

Results of Operations

 

Second Quarter Segment Results Summary

 

Net Sales

 

   Three Months Ended June 30,         
   2019   2018         
   Net Sales   Percentage of
Total Net Sales		   Net Sales   Percentage of
Total Net Sales		   Dollar Change   Percent
Change		 
Commercial  $431,339    79%  $410,950    75%  $20,389    5%
Public Sector   45,019    8    74,712    14    (29,693)   (40)
Canada   51,902    9    47,416    9    4,486    9 
United Kingdom   20,238    4    13,512    2    6,726    50 
Corporate & Other   (172)   —    (160)   —    (12)   8 
Consolidated  $548,326    100%  $546,430    100%  $1,896    0 

 

Consolidated net sales were $548.3 million in the three months ended June 30, 2019 compared to $546.4 million in the three months ended June 30, 2018, an increase of $1.9 million. Consolidated sales of services were $46.3 million in the three months ended June 30, 2019 compared to $42.9 million in the three months ended June 30, 2018, an increase of $3.4 million, or 8%, and represented 8% of consolidated net sales in each of the three months ended June 30, 2019 and 2018.

 

Commercial net sales were $431.3 million in the three months ended June 30, 2019 compared to $411.0 million in the three months ended June 30, 2018, an increase of $20.3 million, or 5%. Sales of services in our Commercial segment were $34.5 million in the three months ended June 30, 2019 compared to $29.4 million in the three months ended June 30, 2018, an increase of $5.1 million or 17%, and represented 8% and 7% of Commercial net sales in the three months ended June 30, 2019 and 2018, respectively. The increase in our Commercial segment net sales in the three months ended June 30, 2019 was primarily due to strong demand in the commercial business sector, partially offset by several specific, non-strategic customer deals that we elected not to pursue based on our focus on profitable growth.

 

Public Sector net sales were $45.0 million in the three months ended June 30, 2019 compared to $74.7 million in the three months ended June 30, 2018, a decrease of $29.7 million or 40%. Sales of services in our Public Sector segment were $2.3 million in the three months ended June 30, 2019 compared to $4.8 million in the three months ended June 30, 2018, a decrease of $2.5 million or 53%, and represented 5% and 6% of Public Sector net sales in the three months ended June 30, 2019 and 2018, respectively. The decrease in our Public Sector net sales in the three months ended June 30, 2019 compared to the same period in the prior year was primarily due to a 45% decrease in our state and local government and educational institution (“SLED”) business and a 24% decrease in our federal sales.

 

Canada net sales were $51.9 million in the three months ended June 30, 2019 compared to $47.4 million in the three months ended June 30, 2018, an increase of $4.5 million, or 10%. Sales of services in our Canada segment were $8.4 million in the three months ended June 30, 2019, compared to $7.5 million in the three months ended June 30, 2018, an increase of $0.9 million or 11%, and represented 16% of Canada net sales in each of the three months ended June 30, 2019 and 2018.

 

Our United Kingdom segment net sales were $20.2 million in the three months ended June 30, 2019 compared to $13.5 million in the three months ended June 30, 2018, an increase of $6.7 million, or 50%. Sales of services in our United Kingdom segment were $1.1 million in the three months ended June 30, 2019, compared to $1.2 million in the three months ended June 30, 2018, a decrease of $0.1 million or 9%, and represented 5% and 9% of United Kingdom net sales in the three months ended June 30, 2019 and 2018, respectively.

 

Gross Profit and Gross Profit Margin

 

Consolidated gross profit was $91.0 million in the three months ended June 30, 2019 compared to $90.4 million in the three months ended June 30, 2018, an increase of $0.6 million, or 1%. Consolidated gross profit margin increased to 16.6% in the three months ended June 30, 2019 from 16.5% in the same period last year.

 

2
 

 

Selling, General & Administrative Expenses

 

Consolidated SG&A expenses were $78.1 million in the three months ended June 30, 2019 compared to $77.2 million in the three months ended June 30, 2018, an increase of $0.9 million. Consolidated SG&A expenses as a percentage of net sales increased to 14.2% in the three months ended June 30, 2019 from 14.1% in the same period of last year. The increase in consolidated SG&A expenses was primarily due to a $1.5 million increase in consulting and M&A related fees and a $0.6 million increase in telecommunication expenses, partially offset by a decrease in personnel costs of $0.8 million and a decrease in advertising costs of $0.7 million.

 

Operating Profit

 

Consolidated operating profit decreased by $0.3 million to $12.9 million in the three months ended June 30, 2019 compared to $13.2 million in the same period of prior year due to the increase in SG&A expenses discussed above.

 

Income Taxes

 

Income tax expense was $2.8 million in the three months ended June 30, 2019 compared to $3.1 million in the three months ended June 30, 2018. Our effective tax rate was 25.4% compared to 28.4% in the same period prior year, with the reduction in rate primarily due to increased excess tax benefits associated with stock-based compensation over the prior year.

 

Net Income

 

Net income for the three months ended June 30, 2019 was $8.2 million compared to $7.9 million for the three months ended June 30, 2018. Diluted earnings per share was $0.62 for the three months ended June 30, 2019 compared to $0.64 in the same period of the prior year.

 

Adjusted EPS

 

Non-GAAP EPS (adjusted EPS) was $0.87 for the three months ended June 30, 2019 compared to $0.82 for the three months ended June 30, 2018.

 

Consolidated Balance Sheet and Cash Flow

 

We had cash and cash equivalents of $6.8 million at June 30, 2019 compared to $6.0 million at December 31, 2018. We had $14.5 million of net cash provided by operating activities in the six months ended June 30, 2019 compared to $72.4 million in the six months ended June 30, 2018.

 

Accounts receivable at June 30, 2019 was $498.8 million, an increase of $35.3 million from December 31, 2018. Inventory at June 30, 2019 was $52.8 million, a decrease of $8.8 million from December 31, 2018. Accounts payable at June 30, 2019 was $377.9 million, an increase of $20.7 million from December 31, 2018.

 

Cash used in investing activities in the six months ended June 30, 2019 totaled $3.3 million compared to $2.5 million in the same period of last year. Investing activities in the six months ended June 30, 2019 and 2018 were primarily related to expenditures relating to investments in our IT infrastructure.

 

Outstanding borrowings under our line of credit was $77.1 million at June 30, 2019, a decrease of $11.3 million compared to $88.4 million at December 31, 2018 as a result of the cash flow generated from our earnings combined with $10 million received from a refinancing of one of our real estate properties.

 

3
 

 

Sales Mix Summary

 

The following table sets forth our gross billed sales (net of returns) by major categories as a percentage of total gross billed sales (net of returns) for the periods presented, determined based upon our internal product code classifications:

 

   Three Months Ended June 30,   Six Months Ended June 30, 
   2019   2018   Y/Y
Sales
Growth		  

 

 

2019

   2018   Y/Y
Sales
Growth		 
Software (1)    29%   30%   (10)%   27%   28%   (7)%
Notebooks and tablets   19    18    4    19    18    6 
Desktops   9    8    7    9    8    5 
Services   8    8    6    8    8    2 
Networking   7    6    8    7    8    (7)
Display   5    5    (1)   5    5    3 
Manufacturer service and warranties (1)    5    6    (32)   5    6    (19)
Accessories   4    4    5    4    4    7 
Storage   3    4    (12)   4    3    2 
Servers   2    2    13    2    2    (3)
Input Devices   2    2    (12)   2    2    0 
Printers   2    2    (12)   2    2    (5)
Other (2)    5    5    (16)   6    6    (20)
Total   100%   100%        100%   100%     

 

 

(1) Software, including software licenses, maintenance and enterprise agreements, and manufacturer service and warranties are shown, for purposes of this table, on a gross sales billed to customers basis, net of returns and do not reflect the net down impact related to revenue recognition for sales of such products.
(2) Other includes power, supplies, consumer electronics, memory, iPod/MP3 and miscellaneous other items.

 

Non-GAAP Measures

 

We are presenting earnings before interest, taxes, depreciation and amortization expenses (EBITDA), adjusted EBITDA and non-GAAP EPS (adjusted EPS), which are financial measures that are not determined in accordance with accounting principles generally accepted in the United States of America, or GAAP. Adjusted EBITDA and adjusted EPS remove the effect of severance and restructuring related expenses related to our cost reduction initiatives and stock-based compensation, as well as uncommon, non-recurring or special items. Adjusted EPS also removes the effect of amortization of intangibles acquired in acquisitions. Depreciation and amortization expenses primarily represent an allocation to current expense of the cost of historical capital expenditures and for acquired intangible assets resulting from prior business acquisitions. EBITDA, adjusted EBITDA and adjusted EPS should be used in conjunction with other GAAP financial measures and are not presented as an alternative measure of operating results, as determined in accordance with GAAP. We believe that these non-GAAP financial measures allow a more meaningful comparison of our operating performance trends to both management and investors that is more indicative of our consolidated operating results across reporting periods. We believe that adjusted EBITDA and adjusted EPS provide a better understanding of our company’s operating performance and cash flows. A reconciliation of the non-GAAP consolidated financial measures is included in a table below.

 

About PCM, Inc.

 

PCM, Inc., through its wholly-owned subsidiaries, is a leading multi-vendor provider of technology solutions, including hardware, software and services to small, medium and enterprise businesses, state, local and federal governments and educational institutions across the United States, Canada and the UK. We generated net sales of approximately $2.2 billion in the twelve months ended June 30, 2019. For more information, please visit investor.pcm.com or call (310) 354-5600.

 

4
 

 

Important Information and Where to Find It

 

PCM has filed a definitive proxy statement with the SEC in connection with the solicitation of proxies for a special meeting of the stockholders of PCM and has mailed the definitive proxy statement to its shareholders. At the special meeting, PCM’s shareholders will be asked to approve, among other things, a proposal for the adoption the Agreement and Plan of Merger, dated as of June 23, 2019, as it may be amended from time to time by and among PCM, Insight Enterprises, Inc., a Delaware corporation, which we refer to as Insight, and Trojan Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of Insight. PCM’S STOCKHOLDERS ARE URGED TO READ PCM’S DEFINITIVE PROXY STATEMENT IN CONNECTION WITH ITS SOLICITATION OF PROXIES FOR THE SPECIAL MEETING AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT PCM, INSIGHT, AND THE PROPOSED TRANSACTION. Shareholders may obtain, free of charge, copies of the definitive proxy statement and any other documents filed by PCM with the SEC in connection with the proposed transaction at the SEC’s website (http://www.sec.gov), at PCM’s website or by writing to PCM’s Corporate Secretary at 1940 E. Mariposa Avenue, El Segundo, CA 90245.

 

Participants in Solicitation

 

PCM, Insight, and certain of their directors and executive officers may become or be deemed participants in the solicitation of proxies from PCM’s stockholders in connection with the matters discussed above. Additional information regarding persons who may, under the rules of the SEC, be deemed to be participants in the solicitation of PCM’s stockholders in connection with the proposed transaction, and who have interests, whether as security holders, directors or employees of PCM or Insight or otherwise, which may be different from those of PCM’s stockholders generally, have been provided in the proxy statement and other materials filed with the SEC. Additional information regarding PCM’s directors’ and executive officers’ respective interests in PCM by security holdings or otherwise is set forth in PCM’s Definitive Proxy Statement filed with the SEC on July 26, 2019. Investors may obtain additional information regarding the interest of such participants by reading the definitive proxy statement regarding the proposed transaction, which was filed on July 26, 2019, and other relevant materials filed with the SEC regarding the proposed transaction.

 

Forward-looking Statements

 

This press release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements include statements regarding our expectations, hopes or intentions regarding the future, including but not limited to, the effect of the announcement or pendency of the proposed acquisition by Insight Enterprises of PCM on our business relationships, operating results, financial condition and business generally and expectations of financial performance, including opportunities or expectations for top or bottom line growth, including growth in sales, gross profits, gross margins, and earnings per share. Forward-looking statements involve certain risks and uncertainties, and actual results may differ materially from those discussed in any such statement. Factors that could cause our actual results to differ materially include without limitation risks and uncertainties related to the following: risks regarding our ability to complete the proposed acquisition by Insight in a timely manner or at all and the effects of any such delay or failure on our business, financial condition, operating results, financial condition or stock price; risks associated with limitations on our ability to pursue alternative transactions pursuant to the provisions of the merger agreement with Insight; our ability to attract and retain key employees; our loss of personnel to competitors; the misappropriation or unauthorized use of our proprietary or confidential information by competitors or others; our IT infrastructure; risks associated with cyber and data security including compliance with related regulatory requirements such as the European Union General Data Protection Regulation; availability of key vendor incentives and other vendor assistance; possible discontinuance of IT licenses or authorizations used to operate our business which are provided by vendors; the potential lack of availability of government funding applicable to our Public Sector business; our ability to receive expected returns on changes in our sales and services organizations or strategic investments, including without limit, investments in security, cloud, hybrid data center, advanced technology solutions and services, our call centers and our international expansion; the relationship between the number of our account executives and productivity; decreased sales related to any of our segments, including but not limited to, potential decreases in sales resulting from the loss of or a reduction in purchases from significant customers; increased competition, including, but not limited to, increased competition from direct sales by some of our largest vendors and increased pricing pressures which affect our pricing strategy in any given period; the effect of our pricing strategy on our operating results; potential decreases in sales related to changes in our vendors products; the impact of seasonality on our sales; availability of products from third party suppliers at reasonable prices; business and other conditions in Canada, the UK and Europe and the Asia Pacific region and the related effects on our Canadian, UK and our Asia-Pacific operations, including without limitation our executive management’s lack of experience operating in some of these markets; increased expenses, including, but not limited to, interest expense, foreign currency transaction gains/losses and other expenses which may increase as a result of future inflationary pressures; our advertising, marketing and promotional efforts may be costly and may not achieve desired results; shifts in market demand or price erosion of owned inventory; other risks related to foreign currency fluctuations; warranties and indemnities we may be required to provide to third parties through our commercial and government contracts; litigation by or against us, including without limitation the litigation and other actions related to our En Pointe acquisition; and availability of financing, including availability under our existing credit lines. Additional factors that could cause our actual results to differ are discussed under the heading “Risk Factors” in Item 1A, Part II of our Form 10-Q for the period ended June 30, 2019, on file with the Securities and Exchange Commission, and in our other reports filed from time to time with the SEC. All forward-looking statements in this document are made as of the date hereof, based on information available to us as of the date hereof, and we assume no obligation to update any forward-looking statements.

 

-Financial Tables Follow-

 

5
 

 

PCM, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except per share amounts)

 

   Three Months Ended
June 30,		   Six Months Ended
June 30,		 
   2019   2018   2019   2018 
Net sales  $548,326   $546,430   $1,082,315   $1,089,262 
Cost of goods sold   457,367    456,013    908,242    915,249 
Gross profit   90,959    90,417    174,073    174,013 
Selling, general and administrative expenses   78,090    77,222    152,777    154,576 
Operating profit   12,869    13,195    21,296    19,437 
Interest expense, net   2,293    2,315    4,582    4,777 
Equity income from unconsolidated affiliate   425    129    698    304 
Income before income taxes   11,001    11,009    17,412    14,964 
Income tax expense   2,799    3,126    4,535    4,270 
Net income  $8,202   $7,883   $12,877   $10,694 
                     
Basic and Diluted Earnings Per Common Share                    
Basic  $0.67   $0.66   $1.05   $0.90 
Diluted   0.62    0.64    0.97    0.88 
                     
Weighted average number of common shares outstanding:                    
Basic   12,289    11,912    12,253    11,878 
Diluted   13,242    12,259    13,211    12,145 

 

6
 

 

PCM, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(unaudited, in thousands, except per share amounts)

 

   Three Months Ended
June 30,		   Six Months Ended
June 30,		 
   2019   2018   2019   2018 
EBITDA(a)                    
Consolidated operating profit  $12,869   $13,195   $21,296   $19,437 
Add: Consolidated depreciation expense   2,517    2,618    5,094    5,331 
Consolidated amortization expense   441    690    999    1,582 
Equity income from unconsolidated affiliate(b)   425    129    698    304 
EBITDA  $16,252   $16,632   $28,087   $26,654 
                     
EBITDA Adjustments                    
M&A, related litigation and other costs and fees(c)  $2,787   $899   $3,590   $1,139 
Stock-based compensation   770    760    1,570    1,432 
Severance and restructuring related costs(d)   490    252    775    564 
Legal settlement gain(e)   —    —    (516)   — 
Foreign exchange loss (gain)   278    417    283    187 
Total EBITDA adjustments  $4,325   $2,328   $5,702   $3,322 
                     
Adjusted EBITDA                    
EBITDA  $16,252   $16,632   $28,087   $26,654 
Add: EBITDA Adjustments   4,325    2,328    5,702    3,322 
Adjusted EBITDA  $20,577   $18,960   $33,789   $29,976 
                     
Net income                    
Income before income taxes  $11,001   $11,009   $17,412   $14,964 
Less: Income tax expense   2,799    3,126    4,535    4,270 
Net income  $8,202   $7,883   $12,877   $10,694 
                     
Income before income taxes  $11,001   $11,009   $17,412   $14,964 
Add: EBITDA Adjustments   4,325    2,328    5,702    3,322 
Amortization of purchased intangibles(f)   438    686    993    1,574 
Adjusted income before income taxes   15,764    14,023    24,107    19,860 
Less: Adjusted income tax expense(g)   4,272    3,997    6,533    5,660 
Non-GAAP net income  $11,492   $10,026   $17,574   $14,200 
                     
Diluted earnings per share                    
GAAP diluted EPS  $0.62   $0.64   $0.97   $0.88 
Non-GAAP diluted EPS   0.87    0.82    1.33    1.17 
                     
Diluted weighted average number of common shares outstanding   13,242    12,259    13,211    12,145 

 

 

(a) EBITDA — earnings from operations before interest, taxes, depreciation and amortization expenses.
(b) Represents our equity income resulting from our 49% ownership interest in the NCE.
(c) Includes costs and fees, including litigation, related to our M&A activity and other one-time consulting costs.
(d) Includes employee severance related costs related to our cost reduction initiatives, lease vacancy costs and other restructuring related costs.
(e) Relates to a gain resulting from a Canadian LCD class action settlement.
(f) Includes amortization expense for acquisition-related intangible assets, which include trademarks, trade names, non-compete agreements and customer relationships.
(g) The 2019 tax expense is based on our expected annual effective tax rate of 27.1%. Our actual effective tax rate for Q2 2019 was 25.4%. The 2018 tax expense utilized an effective tax rate of 28.9%.

 

7
 

PCM, INC.

CONSOLIDATED BALANCE SHEETS

(unaudited, in thousands, except per share amounts and share data)

 

  

June 30,

2019

  

December 31,

2018

 
ASSETS        
Current assets:          
Cash and cash equivalents  $6,835   $6,032 
Accounts receivable, net of allowances of $1,730 and $1,714   498,827    463,487 
Inventories   52,832    61,617 
Prepaid expenses and other current assets   9,170    8,535 
Total current assets   567,664    539,671 
Property and equipment, net   68,062    69,286 
Goodwill   87,397    87,226 
Intangible assets, net   7,144    8,103 
Deferred income taxes   1,384    1,483 
Investment and other assets   44,252    15,181 
Total assets  $775,903   $720,950 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY          
Current liabilities:          
Accounts payable  $377,862   $357,212 
Accrued expenses and other current liabilities   61,454    63,213 
Deferred revenue   7,115    7,966 
Line of credit   77,104    88,399 
Notes payable — current   3,569    3,283 
Total current liabilities   527,104    520,073 
Notes payable   37,569    29,507 
Other long-term liabilities   41,262    16,583 
Deferred income taxes   2,424    1,894 
Total liabilities   608,359    568,057 
Commitments and contingencies          
Stockholders’ equity:          
Preferred stock, $0.001 par value; 5,000,000 shares authorized; none issued and outstanding   —    — 
Common stock, $0.001 par value; 30,000,000 shares authorized; 17,718,443 and 17,573,700 shares issued; 12,327,791 and 12,183,048 shares outstanding   18    18 
Additional paid-in capital   139,597    138,703 
Treasury stock, at cost: 5,390,652 shares   (38,536)   (38,536)
Accumulated other comprehensive loss   (433)   (1,313)
Retained earnings   66,898    54,021 
Total stockholders’ equity   167,544    152,893 
Total liabilities and stockholders’ equity  $775,903   $720,950 

 

8
 

 

PCM, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in thousands)

 

   Six Months Ended June 30, 
   2019   2018 
Cash Flows From Operating Activities          
Net income  $12,877   $10,694 
Adjustments to reconcile net income to net cash provided by operating activities:          
Depreciation and amortization   6,093    6,913 
Equity income from unconsolidated affiliate   (698)   (304)
Distribution from equity method investee   279    162 
Provision for deferred income taxes   649    984 
Non-cash stock-based compensation   1,570    1,432 
Change in operating assets and liabilities:          
Accounts receivable   (35,340)   (82,414)
Inventories   8,785    24,980 
Prepaid expenses and other current assets   (635)   135 
Other assets   3,986    1,571 
Accounts payable   27,216    102,681 
Accrued expenses and other current liabilities   (9,477)   1,247 
Deferred revenue   (851)   4,291 
Total adjustments   1,577    61,678 
Net cash provided by operating activities   14,454    72,372 
Cash Flows From Investing Activities          
Purchases of property and equipment   (3,281)   (2,358)
Acquisition of Stack Technology   —    (166)
Net cash used in investing activities   (3,281)   (2,524)
Cash Flows From Financing Activities          
Net payments under line of credit   (11,295)   (64,478)
Borrowing under note payable   10,000    — 
Payments under notes payable   (1,656)   (1,638)
Change in book overdraft   (6,566)   1,952 
Payments of earn-out liability   —    (2,199)
Payments of obligations under capital lease   (761)   (349)
Proceeds from stock issued under stock option plans   825    261 
Payment for deferred financing costs   (108)   (43)
Payment of taxes related to net-settled stock awards   (1,504)   (450)
Net cash used in financing activities   (11,065)   (66,944)
Effect of foreign currency on cash flow   695    (514)
Net change in cash and cash equivalents   803    2,390 
Cash and cash equivalents at beginning of the period   6,032    9,113 
Cash and cash equivalents at end of the period  $6,835   $11,503 
Supplemental Cash Flow Information          
Interest paid  $4,382   $4,579 
Income taxes paid (refund), net   8,578    (1,558)
Supplemental Non-Cash Investing and Financing Activities          
Financed and accrued purchases of property and equipment   638    1,134 

 

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