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Note 17 - Segment Information
 9 Months Ended
Sep. 30, 2026
Notes to Financial Statements  
Segment Reporting [Text Block]

17.          Segment Information:

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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.

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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 segment 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 only reviewed by the CODM on a consolidated basis. Segment 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.

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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.

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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:

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Nine months ended

  

Three months ended

 
  

September 30,

  

September 30,

 
  

2026

  

2025

  

2026

  

2025

 

Net Sales:

            

Distribution

 $556,531  $439,584  $211,652  $154,413 

Solutions

  20,359   19,087   8,654   6,930 
   576,890   458,671   220,306   161,343 

Cost of Sales:

            

Distribution

 $477,694  $373,737  $182,175  $132,013 

Solutions

  9,530   9,497   5,121   3,597 
   487,224   383,234   187,296   135,610 

Direct Costs:

            

Distribution

 $39,053  $29,944  $13,171  $9,826 

Solutions

  4,893   4,708   1,538   1,605 
   43,946   34,652   14,709   11,431 

Segment Income: (1)

            

Distribution

 $39,784  $35,903  $16,306  $12,574 

Solutions

  5,936   4,882   1,995   1,728 

Segment Income

  45,720   40,785   18,301   14,302 
                 

General and administrative

 $17,928  $14,687  $6,163  $4,795 

Acquisition related costs

  437   733   118   594 

Depreciation and amortization expense

  6,131   5,696   2,068   1,976 

Interest, net

  834   562   416   224 

Foreign currency transaction gain (loss)

  522   (566)  498   2 

Change in fair value of acquisition contingent consideration

  —   (1,374)  —   (860)

Income before taxes

 $22,580  $18,291  $10,866  $6,303 

 

(1)

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

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As of

  

As of

 
  

September 30,

  

December 31,

 

Selected Assets by Segment:

 

2026

  

2025

 
       

Distribution

 $396,606  $375,024 

Solutions

  24,744   22,124 

Segment Select Assets

  421,350   397,148 

Corporate Assets

  97,059   63,085 

Total Assets

 $518,409  $460,233 

 

Geographic areas and net sales mix related to operations for the three and nine months ended September 30, 2026 and 2025 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.

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Nine months ended

  

Three months ended

 
  

September 30, 2026

  

September 30, 2026

 
  

Distribution

  

Solutions

  

Total

  

Distribution

  

Solutions

  

Total

 

Geography

                      

USA

 $445,084  $7,634  $452,718  $164,379  $3,803  $168,182 

United Kingdom

  59,194   11,455   70,649   30,197   4,246   34,443 

Europe

  22,337   792   23,129   8,697   471   9,168 

Canada

  29,916   478   30,394   8,379   134   8,513 

Total net sales

 $556,531  $20,359  $576,890  $211,652  $8,654  $220,306 
                   

Timing of Revenue Recognition

                      

Transferred at a point in time where the Company is principal (1)

 $517,944  $15,008  $532,952  $197,096  $6,852  $203,948 

Transferred at a point in time where the Company is agent (2)

  38,587   5,351   43,938   14,556   1,802   16,358 

Total net sales

 $556,531  $20,359  $576,890  $211,652  $8,654  $220,306 

 

  

Nine months ended

  

Three months ended

 
  

September 30, 2025

  

September 30, 2025

 
  

Distribution

  

Solutions

  

Total

  

Distribution

  

Solutions

  

Total

 

Geography

                      

USA

 $345,023  $6,622  $351,645  $125,573  $2,442  $128,015 

United Kingdom

  49,746   11,282   61,028   11,206   3,900   15,106 

Europe

  20,476   682   21,158   8,610   468   9,078 

Canada

  24,339   501   24,840   9,024   120   9,144 

Total net sales

 $439,584  $19,087  $458,671  $154,413  $6,930  $161,343 
                   

Timing of Revenue Recognition

                      

Transferred at a point in time where the Company is principal (1)

 $402,385  $13,942  $416,327  $143,222  $5,177  $148,399 

Transferred at a point in time where the Company is agent (2)

  37,199   5,145   42,344   11,191   1,753   12,944 

Total net sales

 $439,584  $19,087  $458,671  $154,413  $6,930  $161,343 

 

(1)

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

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(2)

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

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Geographic identifiable assets related to operations as of  September 30, 2026 and  December 31, 2025 were as follows.

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September 30,

  

December 31,

 

Identifiable Assets by Geographic Areas

 

2026

  

2025

 

USA

 $334,169  $266,238 

United Kingdom

 $99,996  $125,191 

Europe

  49,105   37,031 

Canada

  35,139   31,773 

Total

 $518,409  $460,233