Note 17 - Segment Information

3 Months Ended

Mar. 31, 2025

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

17.          Segment Information:

The Company distributes software developed by others through resellers indirectly to customers worldwide.  We also resell computer software and hardware developed by others and provide technical services directly to customers worldwide.

FASB ASC Topic 280, “Segment Reporting,” requires that public companies report profits and losses and certain other information on their “reportable operating segments” in their annual and interim financial statements. The internal organization used by the public company’s Chief Operating Decision Maker (“CODM”) to assess performance and allocate resources determines the basis for reportable operating segments. The Company’s Chief Executive Officer, who has been identified as the Company’s CODM, evaluates the performance of both reportable segments based on operating income. Net sales, gross profit, and operating expenses are also monitored closely. This information is used to measure segment profitability, allocate resources, and make budgeting and forecasting decisions about the reportable segments. The CODM also uses these measures to monitor trends in year over year performance comparisons, sequential quarter performance comparisons, and to compare actual results to forecasts. More disaggregated information about operating expense is generally only reviewed by the CODM on a consolidated basis. Operating income represents net sales less costs of sales, excluding depreciation and amortization expense and operating expenses. Net sales and cost of sales, excluding depreciation and amortization expense are directly attributed to each segment. The majority of operating expenses are also directly attributed to each segment, while certain other operating expenses are allocated to the segments in a reasonable manner considering the specific facts and circumstances of the expenses being allocated.

The Company is organized into two reportable operating segments. The “Distribution” segment distributes technical software to corporate resellers, VARs, consultants and systems integrators worldwide. The “Solutions” segment is a provider of cloud solutions and value-added reseller of software, hardware and services to customers worldwide. The Company's reportable segments are based on products and services delivered, and the Company's CODM decides how to assess performance and allocate resources based on segment.

Segment income is based on segment revenue less the respective segment’s cost of revenues as well as segment direct costs (including such items as payroll costs and payroll related costs, such as profit sharing, incentive awards and insurance) and excluding general and administrative expenses not attributed to an individual segment business unit. The Company only identifies accounts receivable, vendor prepayments, inventory, goodwill and intangible assets by segment as shown below as “Selected Assets” by segment; it does not allocate its other assets, including capital expenditures by segment. The following segment reporting information of the Company is provided:

	Three months ended
	March 31,
	2025			2024
Net Sales:
Distribution	$	132,162		$	86,822
Solutions		5,882			5,600
		138,044			92,422
Cost of Sales:
Distribution	$	111,764		$	72,607
Solutions		2,884			2,795
		114,648			75,402
Direct Costs:
Distribution	$	9,462		$	7,376
Solutions		1,470			1,381
		10,932			8,757
Segment Income: (1)
Distribution	$	10,936		$	6,839
Solutions		1,528			1,424
Segment Income		12,464			8,263
General and administrative	$	5,823		$	3,766
Acquisition related costs		126			123
Depreciation and amortization expense		1,737			871
Interest, net		186			203
Foreign currency transaction loss		(580	)		(85	)
Change in fair value of acquisition contingent consideration		(136	)		—
Income before taxes	$	4,248		$	3,621

(1) Excludes general corporate expenses including acquisition related costs, amortization and depreciation expense, interest, foreign currency transaction loss, and change in fair value of acquisition contingent consideration.

	As of		As of
	March 31,		December 31,
Selected Assets by Segment:	2025		2024
Distribution	$	293,604	$	394,809
Solutions		21,715		21,882
Segment Select Assets		315,319		416,691
Corporate Assets		54,734		52,488
Total Assets	$	370,053	$	469,179

Geographic areas and net sales mix related to operations for the three months ended March 31, 2025 and 2024 were as follows. Revenue is allocated to a geographic area based on the location of the sale, which is generally the customer’s country of domicile.

	Three months ended
	March 31, 2025
	Distribution		Solutions		Total
Geography
USA	$	105,088	$	1,954	$	107,042
Europe and United Kingdom		18,594		3,779		22,373
Canada		8,480		149		8,629
Total net sales	$	132,162	$	5,882	$	138,044
Timing of Revenue Recognition
Transferred at a point in time where the Company is principal (1)	$	118,988	$	4,299	$	123,287
Transferred at a point in time where the Company is agent (2)		13,174		1,583		14,757
Total net sales	$	132,162	$	5,882	$	138,044

	Three months ended
	March 31, 2024
	Distribution		Solutions		Total
Geography
USA	$	62,364	$	1,908	$	64,272
Europe and United Kingdom		18,285		3,406		21,691
Canada		6,173		286		6,459
Total net sales	$	86,822	$	5,600	$	92,422
Timing of Revenue Recognition
Transferred at a point in time where the Company is principal (1)	$	75,733	$	3,558	$	79,291
Transferred at a point in time where the Company is agent (2)		11,089		2,042		13,131
Total net sales	$	86,822	$	5,600	$	92,422

(1) Includes net sales from third-party hardware and software products.

(2) Includes net sales from third-party maintenance, software support and services.

Geographic identifiable assets related to operations as of  March 31, 2025 and  December 31, 2024 were as follows.

	March 31,		December 31,
Identifiable Assets by Geographic Areas	2025		2024
USA	$	221,465	$	278,957
Canada		31,440		34,352
Europe and United Kingdom		117,148		155,870
Total	$	370,053	$	469,179