0001558370-23-017247 | 10-Q | XBRL Viewer

REVENUE

9 Months Ended

Sep. 30, 2023

Note 2–Revenue

The Company disaggregates revenue from its arrangements with customers by type of products and services, as it believes this method best depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors.

The following tables represent a disaggregation of revenue from arrangements with customers for the three months ended September 30, 2023 and 2022, along with the segment for each category (in thousands).


	Three Months Ended September 30, 2023
	Business Solutions		Enterprise Solutions		Public Sector Solutions		Total
Notebooks/Mobility	$	82,777	$	91,643	$	46,898	$	221,318
Desktops		17,695		32,822		16,281		66,798
Software		34,863		29,158		13,287		77,308
Servers/Storage		25,863		13,153		11,307		50,323
Net/Com Products		38,672		25,699		17,964		82,335
Displays and Sound		24,299		26,175		20,367		70,841
Accessories		26,335		32,501		12,590		71,426
Other Hardware/Services		18,517		25,415		8,805		52,737
Total net sales	$	269,021	$	276,566	$	147,499	$	693,086


	Three Months Ended September 30, 2022
	Business Solutions		Enterprise Solutions		Public Sector Solutions		Total
Notebooks/Mobility	$	120,689	$	95,017	$	60,960	$	276,666
Desktops		21,151		37,045		13,113		71,309
Software		36,965		36,996		12,186		86,147
Servers/Storage		27,016		15,857		12,213		55,086
Net/Com Products		27,732		19,625		8,189		55,546
Displays and Sound		28,377		30,011		20,633		79,021
Accessories		33,007		46,051		17,808		96,866
Other Hardware/Services		20,879		24,908		9,264		55,051
Total net sales	$	315,816	$	305,510	$	154,366	$	775,692

The following tables represent a disaggregation of revenue from arrangements with customers for the nine months ended September 30, 2023 and 2022, along with the segment for each category (in thousands).


	Nine Months Ended September 30, 2023
	Business Solutions		Enterprise Solutions		Public Sector Solutions		Total
Notebooks/Mobility	$	265,777	$	293,551	$	172,903	$	732,231
Desktops		55,468		96,536		48,669		200,673
Software		103,267		85,953		36,263		225,483
Servers/Storage		72,759		44,365		33,253		150,377
Net/Com Products		95,560		74,958		53,517		224,035
Displays and Sound		70,766		80,217		50,354		201,337
Accessories		81,576		121,190		42,551		245,317
Other Hardware/Services		57,989		80,892		35,844		174,725
Total net sales	$	803,162	$	877,662	$	473,354	$	2,154,178


	Nine Months Ended September 30, 2022
	Business Solutions		Enterprise Solutions		Public Sector Solutions		Total
Notebooks/Mobility	$	374,298	$	333,764	$	185,021	$	893,083
Desktops		68,459		134,541		44,368		247,368
Software		111,440		79,578		27,963		218,981
Servers/Storage		78,878		43,085		31,441		153,404
Net/Com Products		74,789		66,060		22,856		163,705
Displays and Sound		92,170		104,822		53,263		250,255
Accessories		100,904		151,786		46,423		299,113
Other Hardware/Services		63,672		76,225		26,739		166,636
Total net sales	$	964,610	$	989,861	$	438,074	$	2,392,545

Contract Balances

The following table provides information about contract liabilities from arrangements with customers as of September 30, 2023 and December 31, 2022 (in thousands).


	September 30, 2023		December 31, 2022
Contract liabilities, which are included in "Accrued expenses and other liabilities"	$	3,826	$	4,266

Changes in the contract liability balances during the nine months ended September 30, 2023 and 2022 are as follows (in thousands):


	2023
Balance at December 31, 2022	$	4,266
Cash received in advance and not recognized as revenue		15,207
Amounts recognized as revenue as performance obligations satisfied		(15,647)
Balance at September 30, 2023	$	3,826

	2022
Balance at December 31, 2021	$	8,628
Cash received in advance and not recognized as revenue		18,943
Amounts recognized as revenue as performance obligations satisfied		(22,544)
Balance at September 30, 2022	$	5,027

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 9
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-9

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 10
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-10

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 15
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-15

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-13

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Name Accounting Standards Codification
-Topic 606
-Publisher FASB
-URI https://asc.fasb.org//606/tableOfContent

+ Details

EARNINGS PER SHARE

9 Months Ended

Sep. 30, 2023

Earnings Per Share

Earnings Per Share

Note 4–Earnings Per Share

Basic earnings per common share is computed using the weighted average number of shares outstanding. Diluted earnings per share is computed using the weighted average number of shares outstanding adjusted for the incremental shares attributable to non-vested stock units and stock options outstanding, if dilutive.

The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share data):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Numerator:
Net income	$	25,598	$	23,206	$	59,493	$	70,396
Denominator:
Denominator for basic earnings per share		26,262		26,279		26,281		26,267
Dilutive effect of employee stock awards		172		176		125		165
Denominator for diluted earnings per share		26,434		26,455		26,406		26,432
Earnings per share:
Basic	$	0.97	$	0.88	$	2.26	$	2.68
Diluted	$	0.97	$	0.88	$	2.25	$	2.66

For the three and nine months ended September 30, 2023 and 2022, the Company had no outstanding non-vested stock units that were excluded from the computation of diluted earnings per share because including them would have had an anti-dilutive effect.

BASIS OF PRESENTATION

9 Months Ended

Sep. 30, 2023

Basis of Presentation

Basis of Presentation

Note 1–Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of PC Connection, Inc. and its subsidiaries, or the Company, have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission, or SEC, regarding interim financial reporting and in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP. Such principles were applied on a basis consistent with the accounting policies described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of the results of operations for the interim periods reported and of the Company’s financial condition as of the date of the interim balance sheet. The Company considers events or transactions that occur after the balance sheet date but before the financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. Subsequent events have been evaluated through the date of issuance of these financial statements. The operating results for the three and nine months ended September 30, 2023 may not be indicative of the results expected for any succeeding quarter or the entire year ending December 31, 2023.

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts and disclosures of assets and liabilities and the reported amounts and disclosures of revenue and expenses during the period. Management bases its estimates and judgments on the information available at the time and various other assumptions believed to be reasonable under the circumstances. By nature, estimates are subject to an inherent degree of uncertainty. Actual results could differ from those estimates and assumptions.

Cash and Cash Equivalents

The Company considers all highly liquid short-term investments with original maturities of 90 days or less to be cash equivalents. The carrying value of the Company’s cash equivalents approximates fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Investments

At the time of purchase, the Company determines the appropriate classification of investments based upon its intent with regard to such investments. All of the Company’s investments are classified as available-for-sale. The Company classifies investments as short-term when their remaining contractual maturities are one year or less from the balance sheet date, and as long-term when the investment has a remaining contractual maturity of more than one year from the balance sheet date. The Company records investments at fair value with unrealized gains and losses recorded as a component of accumulated other comprehensive income.

Treasury Stock, at Cost

The total repurchases for the nine months ended September 30, 2023 were recorded as treasury stock of $5,446. Such cost reflects the applicable one percent excise tax imposed by the Inflation Reduction Act of 2022 on the net value of certain stock repurchases made after December 31, 2022.

Restructuring and Other Charges

The restructuring and other charges recorded for the three and nine months ended September 30, 2023 were primarily related to an involuntary reduction in our headquarter workforce and included cash severance and other related termination benefits. These costs will be paid within a year of termination and any unpaid balances are included in accrued expenses and other liabilities in the consolidated balance sheets as of September 30, 2023. The Company is currently evaluating additional restructuring activities for the fourth quarter of 2023 and beyond.

Restructuring and other charges are presented separately from selling, general and administrative expenses. Costs incurred were as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Employee separations	$	17	$	—	$	2,416	$	—
Other charges		27		—		271		—
Total restructuring and other charges	$	44	$	—	$	2,687	$	—

Included in accrued expenses and other liabilities as of September 30, 2023 was $772 related to unpaid termination benefits.

Recently Issued Financial Accounting Standards

In March 2020, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This guidance provides temporary optional expedients and exceptions to the U.S. GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from the London Interbank Offered Rate, or LIBOR, and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rate. This ASU is applied prospectively and becomes effective immediately upon the transition from LIBOR. The Company’s secured credit facility agreement references LIBOR, which is expected to be discontinued as a result of reference rate reform. The amendments are effective as of March 12, 2020 through December 31, 2022; however, ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 has extended the effective date through December 31, 2024. The Company adopted this standard in the second quarter of 2023. The adoption of this ASU along with the related expedients did not have a material impact on the Company’s condensed consolidated financial statements.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands	Common Stock	Additional Paid-In Capital	Retained Earnings	Accumulated Other Comprehensive Income	Treasury Shares	Total
Balance at Dec. 31, 2021	$ 290	$ 122,354	$ 605,766		$ (45,937)	$ 682,473
Balance (in shares) at Dec. 31, 2021	29,025
Balance - Treasury Shares (in shares) at Dec. 31, 2021					(2,773)
Stock-based compensation expense		4,072				4,072
Restricted stock units vested	$ 1	(1)
Restricted stock units vested (in shares)	36
Shares withheld for taxes paid on stock awards		(834)				(834)
Net Income (Loss)			70,396			70,396
Balance at Sep. 30, 2022	$ 291	125,591	676,162		$ (45,937)	756,107
Balance (in shares) at Sep. 30, 2022	29,061
Balance - Treasury Shares (in shares) at Sep. 30, 2022					(2,773)
Balance at Jun. 30, 2022	$ 290	124,690	652,956		$ (45,937)	731,999
Balance (in shares) at Jun. 30, 2022	29,045
Balance - Treasury Shares (in shares) at Jun. 30, 2022					(2,773)
Stock-based compensation expense		1,282				1,282
Restricted stock units vested	$ 1	(1)
Restricted stock units vested (in shares)	16
Shares withheld for taxes paid on stock awards		(380)				(380)
Net Income (Loss)			23,206			23,206
Balance at Sep. 30, 2022	$ 291	125,591	676,162		$ (45,937)	756,107
Balance (in shares) at Sep. 30, 2022	29,061
Balance - Treasury Shares (in shares) at Sep. 30, 2022					(2,773)
Balance at Dec. 31, 2022	$ 291	125,784	686,037		$ (45,937)	766,175
Balance (in shares) at Dec. 31, 2022	29,123
Balance - Treasury Shares (in shares) at Dec. 31, 2022					(2,773)
Issuance of common stock under Employee Stock Purchase Plan		537				537
Issuance of common stock under Employee Stock Purchase Plan (in shares)	13
Stock-based compensation expense		5,425				5,425
Restricted stock units vested	$ 1	(1)
Restricted stock units vested (in shares)	38
Shares withheld for taxes paid on stock awards		(870)				(870)
Repurchase of common stock for treasury					$ (5,446)	(5,446)
Repurchase of common stock for treasury (in shares)					(129)
Dividend declaration			(6,307)			(6,307)
Net Income (Loss)			59,493			59,493
Other comprehensive income, net of tax				$ 154		154
Balance at Sep. 30, 2023	$ 292	130,875	739,223	154	$ (51,383)	819,161
Balance (in shares) at Sep. 30, 2023	29,174
Balance - Treasury Shares (in shares) at Sep. 30, 2023					(2,902)
Balance at Jun. 30, 2023	$ 291	129,486	715,726		$ (51,383)	794,120
Balance (in shares) at Jun. 30, 2023	29,158
Balance - Treasury Shares (in shares) at Jun. 30, 2023					(2,902)
Stock-based compensation expense		1,789				1,789
Restricted stock units vested	$ 1	(1)
Restricted stock units vested (in shares)	16
Shares withheld for taxes paid on stock awards		(399)				(399)
Dividend declaration			(2,101)			(2,101)
Net Income (Loss)			25,598			25,598
Other comprehensive income, net of tax				154		154
Balance at Sep. 30, 2023	$ 292	$ 130,875	$ 739,223	$ 154	$ (51,383)	$ 819,161
Balance (in shares) at Sep. 30, 2023	29,174
Balance - Treasury Shares (in shares) at Sep. 30, 2023					(2,902)

FAIR VALUE MEASUREMENTS

9 Months Ended

Sep. 30, 2023

Fair Value Measurements

Fair Value Measurements

Note 3–Fair Value Measurements

Cash equivalents and short-term investments consist of the following (in thousands):


	September 30, 2023
	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
Cash and cash equivalents:
Money market funds	$	167,852	$	—	$	—	$	167,852
U.S. Government treasury securities		49,368		—		—		49,368
Short-term investments:
U.S. Government treasury securities		48,699		195		—		48,894
Total	$	265,919	$	195	$	—	$	266,114

	December 31, 2022
	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
Cash and cash equivalents:
Money market funds	$	96,386	$	—	$	—	$	96,386
Total	$	96,386	$	—	$	—	$	96,386

Investments with maturities of 90 days or less from the date of purchase are classified as cash equivalents; investments with maturities of greater than 90 days from the date of purchase but less than one year are generally classified as short-term investments; and investments with maturities of one year or greater from the date of purchase are generally classified as long-term investments. All short-term investments had stated maturity dates of less than one year. The Company has recorded the securities at fair value in its condensed consolidated balance sheets and unrealized gains and losses are reported as a component of accumulated other comprehensive income. The amount of realized gains and losses reclassified into earnings and the related adjustments to deferred taxes are based on the specific identification of the securities sold or securities that reached maturity date.

Fair Value

The Company measures certain financial assets at fair value. Fair value is determined based upon the exit price that would be received to sell an asset in an orderly transaction between market participants, as determined by either the principal market or the most advantageous market. Inputs used in the valuation techniques are classified based on a three-level hierarchy, as follows:

●

Level 1 inputs: Quoted prices for identical assets or liabilities in active markets;

●

Level 2 inputs: Observable inputs other than those described as Level 1; and

●

Level 3 inputs: Unobservable inputs that are supported by little or no market activities and are based on significant assumptions and estimates.

As of September 30, 2023 and December 31, 2022, the fair value of the Company’s investments were all measured using level 1 inputs.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

LEASES

9 Months Ended

Sep. 30, 2023

Leases

Leases

Note 5–Leases

The Company leases certain facilities from a related party, which is a company affiliated with us through common ownership. Included in the right-of-use, or ROU, asset as of September 30, 2023 was $209 and a corresponding lease liability of $209 associated with related party leases.

As of September 30, 2023, there were no additional operating leases that have not yet commenced. Refer to the following table for quantitative information related to the Company’s leases for the three and nine months ended September 30, 2023 and 2022 (dollars in thousands):


	Three Months Ended September 30, 2023						Nine Months Ended September 30, 2023
	Related Parties		Others		Total		Related Parties		Others		Total
Lease Cost
Capitalized operating lease cost	$	313	$	500	$	813	$	940	$	1,799	$	2,739
Short-term lease cost		107		161		268		321		297		618
Total lease cost	$	420	$	661	$	1,081	$	1,261	$	2,096	$	3,357

Other Information
Cash paid for amounts included in the measurement of lease liabilities and capitalized operating leases:
Operating cash flows	$	313	$	542	$	855	$	940	$	1,787	$	2,727

Weighted-average remaining lease term (in years):
Capitalized operating leases								0.17		3.15		3.04

Weighted-average discount rate:
Capitalized operating leases								3.92%		4.07%		4.05%

	Three Months Ended September 30, 2022						Nine Months Ended September 30, 2022
	Related Parties		Others		Total		Related Parties		Others		Total
Lease Cost
Capitalized operating lease cost	$	313	$	693	$	1,006	$	940	$	2,112	$	3,052
Short-term lease cost		107		58		165		321		100		421
Total lease cost	$	420	$	751	$	1,171	$	1,261	$	2,212	$	3,473

Other Information
Cash paid for amounts included in the measurement of lease liabilities and capitalized operating leases:
Operating cash flows	$	313	$	713	$	1,026	$	940	$	2,147	$	3,087

Weighted-average remaining lease term (in years):
Capitalized operating leases								1.17		4.26		3.78

Weighted-average discount rate:
Capitalized operating leases								3.92%		4.03%		4.02%

As of September 30, 2023, future lease payments over the remaining term of capitalized operating leases were as follows (in thousands):


For the Years Ended December 31,		Related Parties		Others		Total
2023, excluding the nine months ended September 30, 2023	$	315	$	373	$	688
2024		163		1,723		1,886
2025		163		1,650		1,813
2026		163		957		1,120
2027		1		236		237
Thereafter		—		161		161
	$	805	$	5,100	$	5,905

Imputed interest						(355)
Lease liability balance at September 30, 2023					$	5,550

As of September 30, 2023, the ROU asset had a balance of $4,934. The long-term lease liability was $3,638 and the short-term lease liability, which is included in accrued expenses and other liabilities in the consolidated balance sheets, was $1,912. As of September 30, 2022, the ROU asset had a balance of $8,495. The long-term lease liability was $5,620 and the short-term lease liability, which is included in accrued expenses and other liabilities in the consolidated balance sheets, was $3,471.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Condensed Consolidated Statements of Income
Net sales	$ 693,086	$ 775,692	$ 2,154,178	$ 2,392,545
Cost of sales	561,198	639,066	1,772,217	1,990,712
Gross profit	131,888	136,626	381,961	401,833
Selling, general and administrative expenses	99,822	104,887	304,064	305,189
Restructuring and other charges	44		2,687
Income from operations	32,022	31,739	75,210	96,644
Other income, net	2,688	308	5,848	319
Income before taxes	34,710	32,047	81,058	96,963
Income tax provision	(9,112)	(8,841)	(21,565)	(26,567)
Net income	$ 25,598	$ 23,206	$ 59,493	$ 70,396
Earnings per common share:
Basic	$ 0.97	$ 0.88	$ 2.26	$ 2.68
Diluted	$ 0.97	$ 0.88	$ 2.25	$ 2.66
Shares used in computation of earnings per common share:
Basic	26,262	26,279	26,281	26,267
Diluted	26,434	26,455	26,406	26,432

LEASES - Future Lease Payments (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022	Sep. 30, 2022
Future lease payments over the remaining term of capitalized operating leases
2023, excluding the nine months ended September 30, 2023	$ 688
2024	1,886
2025	1,813
2026	1,120
2027	237
Thereafter	161
Total	5,905
Imputed interest	(355)
Lease liability balance	5,550
Right-of-use assets	4,934	$ 7,558	$ 8,495
Long-term lease liability	3,638	$ 4,994	5,620
Short-term lease liability	$ 1,912		$ 3,471
Current operating lease liability, Statement of Financial Position	Accrued expenses and other liabilities		Accrued expenses and other liabilities
Related Parties
Future lease payments over the remaining term of capitalized operating leases
2023, excluding the nine months ended September 30, 2023	$ 315
2024	163
2025	163
2026	163
2027	1
Total	805
Lease liability balance	209
Right-of-use assets	209
Others
Future lease payments over the remaining term of capitalized operating leases
2023, excluding the nine months ended September 30, 2023	373
2024	1,723
2025	1,650
2026	957
2027	236
Thereafter	161
Total	$ 5,100

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Pay vs Performance Disclosure
Net Income (Loss)	$ 25,598	$ 23,206	$ 59,493	$ 70,396

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

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+ Details

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares	3 Months Ended	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2023
Condensed Consolidated Statement of Changes in Stockholders' Equity
Dividend declaration	$ 0.08	$ 0.08

BANK BORROWINGS

9 Months Ended

Sep. 30, 2023

Bank Borrowings

Bank Borrowings

Note 8–Bank Borrowings

The Company has a $50,000 credit facility collateralized by its account receivables that expires March 31, 2025. This facility can be increased, at the Company’s option, to $80,000 for permitted acquisitions or other uses authorized by

the lender on substantially the same terms. Amounts outstanding under this facility bear interest at the daily Bloomberg Short-Term Bank Yield Index, or BSBY Rate, plus a spread based on the Company’s funded debt ratio, or in the absence of BSBY Rate, the prime rate (8.50% at September 30, 2023). The credit facility includes various customary financial ratios and operating covenants, including minimum net worth and maximum funded debt ratio requirements, and default acceleration provisions. The credit facility does not include restrictions on future dividend payments. Funded debt ratio is the ratio of average outstanding advances under the credit facility for a given quarter to consolidated trailing twelve months Adjusted Earnings Before Interest Expense, Taxes, Depreciation, Amortization, and Special Charges, or Adjusted EBITDA. The maximum allowable funded debt ratio under the agreement is 2.0 to 1.0. Decreases in the Company’s consolidated trailing twelve months Adjusted EBITDA could limit its potential borrowing capacity under the credit facility. As of September 30, 2023, the Company was in compliance with all financial covenants contained in the agreement governing the credit facility.

Cash receipts are automatically applied against any outstanding borrowings. During the nine months ended September 30, 2023, the Company borrowed incremental amounts that were each repaid in full. These borrowings for the nine months ended September 30, 2023 totaled $70,877; however, at no time were the outstanding borrowings greater than the $50,000 limit under the credit facility. The Company had no outstanding borrowings under the credit facility as of September 30, 2023 or 2022, and accordingly, the entire $50,000 credit facility was available for borrowings on such date.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

SEGMENT INFORMATION - Segment Information Applicable to Reportable Operating Segments (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023 USD ($) segment	Sep. 30, 2022 USD ($) segment	Sep. 30, 2023 USD ($) segment	Sep. 30, 2022 USD ($) segment	Dec. 31, 2022 USD ($)
Segment Reporting Information
Number of reportable segments \| segment	3	3	3	3
Number of operating segments \| segment	3	3	3	3
Net sales:
Net sales	$ 693,086	$ 775,692	$ 2,154,178	$ 2,392,545
Operating income (loss):
Operating income (loss)	32,022	31,739	75,210	96,644
Other expenses, net	2,688	308	5,848	319
Income before taxes	34,710	32,047	81,058	96,963
Depreciation and amortization:
Depreciation and amortization	3,289	3,020	9,456	9,000
Total assets:
Total assets	1,181,427	1,134,125	1,181,427	1,134,125	$ 1,099,826
Business Solutions
Net sales:
Net sales	269,021	315,816	803,162	964,610
Enterprise Solutions
Net sales:
Net sales	276,566	305,510	877,662	989,861
Public Sector Solutions
Net sales:
Net sales	147,499	154,366	473,354	438,074
Operating Segments \| Business Solutions
Net sales:
Net sales	269,021	315,816	803,162	964,610
Operating income (loss):
Operating income (loss)	21,040	19,278	56,424	62,230
Depreciation and amortization:
Depreciation and amortization	156	167	473	502
Total assets:
Total assets	481,483	451,872	481,483	451,872
Operating Segments \| Enterprise Solutions
Net sales:
Net sales	276,566	305,510	877,662	989,861
Operating income (loss):
Operating income (loss)	11,230	12,401	25,263	42,103
Depreciation and amortization:
Depreciation and amortization	391	482	1,238	1,517
Total assets:
Total assets	676,694	647,592	676,694	647,592
Operating Segments \| Public Sector Solutions
Net sales:
Net sales	147,499	154,366	473,354	438,074
Operating income (loss):
Operating income (loss)	4,117	4,211	5,796	4,156
Depreciation and amortization:
Depreciation and amortization	22	20	61	59
Total assets:
Total assets	110,919	113,820	110,919	113,820
Headquarters/Other
Operating income (loss):
Operating income (loss)	(4,365)	(4,151)	(12,273)	(11,845)
Depreciation and amortization:
Depreciation and amortization	2,720	2,351	7,684	6,922
Total assets:
Assets net of intercompany balance eliminations	(87,669)	(79,159)	(87,669)	(79,159)
Intersegment Elimination
Total assets:
Total assets	$ (58,864)	$ (62,154)	$ (58,864)	$ (62,154)

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Sep. 30, 2023
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2023	Oct. 25, 2023
Document And Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Sep. 30, 2023
Entity File Number	0-23827
Entity Registrant Name	PC CONNECTION, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	02-0513618
Entity Address, Address Line One	730 Milford Road
Entity Address, City or Town	Merrimack
Entity Address, State or Province	NH
Entity Address, Postal Zip Code	03054
City Area Code	603
Local Phone Number	683-2000
Title of 12(b) Security	Common Stock, $0.01 par value
Trading Symbol	CNXN
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		26,271,521
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q3
Entity Central Index Key	0001050377
Amendment Flag	false

SEGMENT INFORMATION (Tables)

9 Months Ended

Sep. 30, 2023

Segment Information

Segment information applicable to reportable operating segments

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, 2023 and 2022 is shown below (in thousands):


	Three Months Ended				Nine Months Ended
	September 30,		September 30,		September 30,		September 30,
	2023		2022		2023		2022
Net sales:
Business Solutions	$	269,021	$	315,816	$	803,162	$	964,610
Enterprise Solutions		276,566		305,510		877,662		989,861
Public Sector Solutions		147,499		154,366		473,354		438,074
Total net sales	$	693,086	$	775,692	$	2,154,178	$	2,392,545
Operating income (loss):
Business Solutions	$	21,040	$	19,278	$	56,424	$	62,230
Enterprise Solutions		11,230		12,401		25,263		42,103
Public Sector Solutions		4,117		4,211		5,796		4,156
Headquarters/Other		(4,365)		(4,151)		(12,273)		(11,845)
Total operating income		32,022		31,739		75,210		96,644
Other income, net		2,688		308		5,848		319
Income before taxes	$	34,710	$	32,047	$	81,058	$	96,963
Selected operating expense:
Depreciation and amortization:
Business Solutions	$	156	$	167	$	473	$	502
Enterprise Solutions		391		482		1,238		1,517
Public Sector Solutions		22		20		61		59
Headquarters/Other		2,720		2,351		7,684		6,922
Total depreciation and amortization	$	3,289	$	3,020	$	9,456	$	9,000
Total assets:
Business Solutions					$	481,483	$	451,872
Enterprise Solutions						676,694		647,592
Public Sector Solutions						110,919		113,820
Headquarters/Other						(87,669)		(79,159)
Total assets					$	1,181,427	$	1,134,125

BASIS OF PRESENTATION (Policies)

9 Months Ended

Sep. 30, 2023

Summary of Significant Accounting Policies

Principles of Consolidation

Use of Estimates in the Preparation of Financial Statements

Cash and Cash Equivalents

Investments

Treasury Stock, at Cost

Restructuring and other charges

Restructuring and Other Charges

Restructuring and other charges are presented separately from selling, general and administrative expenses. Costs incurred were as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Employee separations	$	17	$	—	$	2,416	$	—
Other charges		27		—		271		—
Total restructuring and other charges	$	44	$	—	$	2,687	$	—

Included in accrued expenses and other liabilities as of September 30, 2023 was $772 related to unpaid termination benefits.

Recently Issued Financial Accounting Standards

- Definition

Disclosure of accounting policy for investment in financial asset.

+ References + Details

REVENUE (Tables)

9 Months Ended

Sep. 30, 2023

Revenue

Schedule of disaggregation of revenue from contracts with customers


	Three Months Ended September 30, 2023
	Business Solutions		Enterprise Solutions		Public Sector Solutions		Total
Notebooks/Mobility	$	82,777	$	91,643	$	46,898	$	221,318
Desktops		17,695		32,822		16,281		66,798
Software		34,863		29,158		13,287		77,308
Servers/Storage		25,863		13,153		11,307		50,323
Net/Com Products		38,672		25,699		17,964		82,335
Displays and Sound		24,299		26,175		20,367		70,841
Accessories		26,335		32,501		12,590		71,426
Other Hardware/Services		18,517		25,415		8,805		52,737
Total net sales	$	269,021	$	276,566	$	147,499	$	693,086


	Three Months Ended September 30, 2022
	Business Solutions		Enterprise Solutions		Public Sector Solutions		Total
Notebooks/Mobility	$	120,689	$	95,017	$	60,960	$	276,666
Desktops		21,151		37,045		13,113		71,309
Software		36,965		36,996		12,186		86,147
Servers/Storage		27,016		15,857		12,213		55,086
Net/Com Products		27,732		19,625		8,189		55,546
Displays and Sound		28,377		30,011		20,633		79,021
Accessories		33,007		46,051		17,808		96,866
Other Hardware/Services		20,879		24,908		9,264		55,051
Total net sales	$	315,816	$	305,510	$	154,366	$	775,692


	Nine Months Ended September 30, 2023
	Business Solutions		Enterprise Solutions		Public Sector Solutions		Total
Notebooks/Mobility	$	265,777	$	293,551	$	172,903	$	732,231
Desktops		55,468		96,536		48,669		200,673
Software		103,267		85,953		36,263		225,483
Servers/Storage		72,759		44,365		33,253		150,377
Net/Com Products		95,560		74,958		53,517		224,035
Displays and Sound		70,766		80,217		50,354		201,337
Accessories		81,576		121,190		42,551		245,317
Other Hardware/Services		57,989		80,892		35,844		174,725
Total net sales	$	803,162	$	877,662	$	473,354	$	2,154,178


	Nine Months Ended September 30, 2022
	Business Solutions		Enterprise Solutions		Public Sector Solutions		Total
Notebooks/Mobility	$	374,298	$	333,764	$	185,021	$	893,083
Desktops		68,459		134,541		44,368		247,368
Software		111,440		79,578		27,963		218,981
Servers/Storage		78,878		43,085		31,441		153,404
Net/Com Products		74,789		66,060		22,856		163,705
Displays and Sound		92,170		104,822		53,263		250,255
Accessories		100,904		151,786		46,423		299,113
Other Hardware/Services		63,672		76,225		26,739		166,636
Total net sales	$	964,610	$	989,861	$	438,074	$	2,392,545

Schedule of changes in contract liability balances

The following table provides information about contract liabilities from arrangements with customers as of September 30, 2023 and December 31, 2022 (in thousands).


	September 30, 2023		December 31, 2022
Contract liabilities, which are included in "Accrued expenses and other liabilities"	$	3,826	$	4,266

Changes in the contract liability balances during the nine months ended September 30, 2023 and 2022 are as follows (in thousands):


	2023
Balance at December 31, 2022	$	4,266
Cash received in advance and not recognized as revenue		15,207
Amounts recognized as revenue as performance obligations satisfied		(15,647)
Balance at September 30, 2023	$	3,826

	2022
Balance at December 31, 2021	$	8,628
Cash received in advance and not recognized as revenue		18,943
Amounts recognized as revenue as performance obligations satisfied		(22,544)
Balance at September 30, 2022	$	5,027

BANK BORROWINGS (Details) - USD ($) $ in Thousands	9 Months Ended
BANK BORROWINGS (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022
Subordinated Borrowing
Line of credit, borrowing capacity	$ 50,000
Credit facility, expiration date	Mar. 31, 2025
Line of credit, maximum borrowing capacity	$ 80,000
Proceeds from short-term borrowings	70,877	$ 36,463
Line of credit, outstanding borrowing	0	0
Line of credit, available for borrowing	$ 50,000	$ 50,000
Maximum
Subordinated Borrowing
Debt ratio	2.0
Prime Rate
Subordinated Borrowing
Debt instrument, interest rate	8.50%

REVENUE - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Disaggregation of revenue
Net sales	$ 693,086	$ 775,692	$ 2,154,178	$ 2,392,545
Notebooks/Mobility
Disaggregation of revenue
Net sales	221,318	276,666	732,231	893,083
Desktops
Disaggregation of revenue
Net sales	66,798	71,309	200,673	247,368
Software
Disaggregation of revenue
Net sales	77,308	86,147	225,483	218,981
Servers/Storage
Disaggregation of revenue
Net sales	50,323	55,086	150,377	153,404
Net/Com Products
Disaggregation of revenue
Net sales	82,335	55,546	224,035	163,705
Displays and Sound
Disaggregation of revenue
Net sales	70,841	79,021	201,337	250,255
Accessories
Disaggregation of revenue
Net sales	71,426	96,866	245,317	299,113
Other Hardware/Services
Disaggregation of revenue
Net sales	52,737	55,051	174,725	166,636
Business Solutions
Disaggregation of revenue
Net sales	269,021	315,816	803,162	964,610
Business Solutions \| Notebooks/Mobility
Disaggregation of revenue
Net sales	82,777	120,689	265,777	374,298
Business Solutions \| Desktops
Disaggregation of revenue
Net sales	17,695	21,151	55,468	68,459
Business Solutions \| Software
Disaggregation of revenue
Net sales	34,863	36,965	103,267	111,440
Business Solutions \| Servers/Storage
Disaggregation of revenue
Net sales	25,863	27,016	72,759	78,878
Business Solutions \| Net/Com Products
Disaggregation of revenue
Net sales	38,672	27,732	95,560	74,789
Business Solutions \| Displays and Sound
Disaggregation of revenue
Net sales	24,299	28,377	70,766	92,170
Business Solutions \| Accessories
Disaggregation of revenue
Net sales	26,335	33,007	81,576	100,904
Business Solutions \| Other Hardware/Services
Disaggregation of revenue
Net sales	18,517	20,879	57,989	63,672
Enterprise Solutions
Disaggregation of revenue
Net sales	276,566	305,510	877,662	989,861
Enterprise Solutions \| Notebooks/Mobility
Disaggregation of revenue
Net sales	91,643	95,017	293,551	333,764
Enterprise Solutions \| Desktops
Disaggregation of revenue
Net sales	32,822	37,045	96,536	134,541
Enterprise Solutions \| Software
Disaggregation of revenue
Net sales	29,158	36,996	85,953	79,578
Enterprise Solutions \| Servers/Storage
Disaggregation of revenue
Net sales	13,153	15,857	44,365	43,085
Enterprise Solutions \| Net/Com Products
Disaggregation of revenue
Net sales	25,699	19,625	74,958	66,060
Enterprise Solutions \| Displays and Sound
Disaggregation of revenue
Net sales	26,175	30,011	80,217	104,822
Enterprise Solutions \| Accessories
Disaggregation of revenue
Net sales	32,501	46,051	121,190	151,786
Enterprise Solutions \| Other Hardware/Services
Disaggregation of revenue
Net sales	25,415	24,908	80,892	76,225
Public Sector Solutions
Disaggregation of revenue
Net sales	147,499	154,366	473,354	438,074
Public Sector Solutions \| Notebooks/Mobility
Disaggregation of revenue
Net sales	46,898	60,960	172,903	185,021
Public Sector Solutions \| Desktops
Disaggregation of revenue
Net sales	16,281	13,113	48,669	44,368
Public Sector Solutions \| Software
Disaggregation of revenue
Net sales	13,287	12,186	36,263	27,963
Public Sector Solutions \| Servers/Storage
Disaggregation of revenue
Net sales	11,307	12,213	33,253	31,441
Public Sector Solutions \| Net/Com Products
Disaggregation of revenue
Net sales	17,964	8,189	53,517	22,856
Public Sector Solutions \| Displays and Sound
Disaggregation of revenue
Net sales	20,367	20,633	50,354	53,263
Public Sector Solutions \| Accessories
Disaggregation of revenue
Net sales	12,590	17,808	42,551	46,423
Public Sector Solutions \| Other Hardware/Services
Disaggregation of revenue
Net sales	$ 8,805	$ 9,264	$ 35,844	$ 26,739

REVENUE - Contract Balances (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Change in contract liability
Beginning balance - Contract liability	$ 4,266	$ 8,628
Cash received in advance and not recognized as revenue	15,207	18,943
Amounts recognized as revenue as performance obligations satisfied	(15,647)	(22,544)
Ending balance - Contract liability	3,826	$ 5,027
Accrued expenses and other liabilities
Contract liabilities
Contract liabilities	$ 3,826		$ 4,266

COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2023

Commitments and Contingencies

Commitments and Contingencies

Note 7–Commitments and Contingencies

The Company is subject to various legal proceedings and claims, which have arisen during the ordinary course of business. The outcomes of such matters are not expected to have a material, adverse effect on the Company’s financial position, results of operations, and/or cash flows.

The Company is subject to audits by states on sales and income taxes, employment matters, and other assessments. Additional liabilities for these and other audits could be assessed, but such outcomes are not expected to have a material, adverse impact on the Company’s financial position, results of operations, and/or cash flows.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Cash Flows provided by (used in) Operating Activities:
Net income	$ 59,493	$ 70,396
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	9,456	9,000
Adjustments to credit losses reserve	1,814	2,658
Stock-based compensation expense	5,425	4,072
Loss on disposal of fixed assets	563	16
Changes in assets and liabilities:
Accounts receivable	20,869	(41,782)
Inventories	66,439	(6,761)
Prepaid expenses, income tax receivable, and other current assets	(9,556)	(79)
Other non-current assets	234	5
Accounts payable	31,648	(23,268)
Accrued expenses and other liabilities	(720)	1,432
Net cash provided by operating activities	185,665	15,689
Cash Flows used in Investing Activities:
Purchases of short-term investments	(48,699)
Purchases of property and equipment	(7,355)	(6,975)
Net cash used in investing activities	(56,054)	(6,975)
Cash Flows used in Financing Activities:
Proceeds from short-term borrowings	70,877	36,463
Repayment of short-term borrowings	(70,877)	(36,463)
Purchase of common stock for treasury shares	(5,392)
Dividend payments	(6,307)
Issuance of stock under Employee Stock Purchase Plan	537
Payments of payroll taxes on stock-based compensation through shares withheld	(870)	(834)
Net cash used in financing activities	(12,032)	(834)
Increase in cash and cash equivalents	117,579	7,880
Cash and cash equivalents, beginning of year	122,930	108,310
Cash and cash equivalents, end of period	240,509	116,190
Non-cash Investing and Financing Activities:
Accrued purchases of property and equipment	408	362
Accrued excise tax on treasury purchases	54
Supplemental Cash Flow Information:
Income taxes paid	34,251	30,759
Interest paid	$ 19	$ 4

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Current Assets:
Cash and cash equivalents	$ 240,509	$ 122,930
Short-term investments	48,894
Accounts receivable, net	587,597	610,280
Inventories, net	142,243	208,682
Income taxes receivable	7,388
Prepaid expenses and other current assets	14,068	11,900
Total current assets	1,040,699	953,792
Property and equipment, net	57,638	59,171
Right-of-use assets	4,934	7,558
Goodwill	73,602	73,602
Intangible, net	3,733	4,648
Other assets	821	1,055
Total Assets	1,181,427	1,099,826
Current Liabilities:
Accounts payable	264,502	232,638
Accrued payroll	26,363	24,071
Accrued expenses and other liabilities	49,098	53,808
Total current liabilities	339,963	310,517
Deferred income taxes	18,011	17,970
Noncurrent operating lease liabilities	3,638	4,994
Other liabilities	654	170
Total Liabilities	362,266	333,651
Stockholders' Equity:
Common stock	292	291
Additional paid-in capital	130,875	125,784
Retained earnings	739,223	686,037
Accumulated other comprehensive income	154
Treasury stock, at cost	(51,383)	(45,937)
Total Stockholders' Equity	819,161	766,175
Total Liabilities and Stockholders' Equity	$ 1,181,427	$ 1,099,826

EARNINGS PER SHARE (Tables)

9 Months Ended

Sep. 30, 2023

Earnings Per Share

Computation of basic and diluted earnings per share

The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share data):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Numerator:
Net income	$	25,598	$	23,206	$	59,493	$	70,396
Denominator:
Denominator for basic earnings per share		26,262		26,279		26,281		26,267
Dilutive effect of employee stock awards		172		176		125		165
Denominator for diluted earnings per share		26,434		26,455		26,406		26,432
Earnings per share:
Basic	$	0.97	$	0.88	$	2.26	$	2.68
Diluted	$	0.97	$	0.88	$	2.25	$	2.66

CONDENSED CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2023
Condensed Consolidated Statements Of Other Comprehensive Income
Unrealized gains on available-for-sale investments, tax	$ (41)	$ (41)

FAIR VALUE MEASUREMENTS (Tables)

9 Months Ended

Sep. 30, 2023

Fair Value Measurements

Schedule of available-for-sale investments within cash equivalents and short-term investments

Cash equivalents and short-term investments consist of the following (in thousands):


	September 30, 2023
	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
Cash and cash equivalents:
Money market funds	$	167,852	$	—	$	—	$	167,852
U.S. Government treasury securities		49,368		—		—		49,368
Short-term investments:
U.S. Government treasury securities		48,699		195		—		48,894
Total	$	265,919	$	195	$	—	$	266,114

	December 31, 2022
	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
Cash and cash equivalents:
Money market funds	$	96,386	$	—	$	—	$	96,386
Total	$	96,386	$	—	$	—	$	96,386

LEASES (Tables)

9 Months Ended

Sep. 30, 2023

Leases

Schedule of lease cost


	Three Months Ended September 30, 2023						Nine Months Ended September 30, 2023
	Related Parties		Others		Total		Related Parties		Others		Total
Lease Cost
Capitalized operating lease cost	$	313	$	500	$	813	$	940	$	1,799	$	2,739
Short-term lease cost		107		161		268		321		297		618
Total lease cost	$	420	$	661	$	1,081	$	1,261	$	2,096	$	3,357

Other Information
Cash paid for amounts included in the measurement of lease liabilities and capitalized operating leases:
Operating cash flows	$	313	$	542	$	855	$	940	$	1,787	$	2,727

Weighted-average remaining lease term (in years):
Capitalized operating leases								0.17		3.15		3.04

Weighted-average discount rate:
Capitalized operating leases								3.92%		4.07%		4.05%

	Three Months Ended September 30, 2022						Nine Months Ended September 30, 2022
	Related Parties		Others		Total		Related Parties		Others		Total
Lease Cost
Capitalized operating lease cost	$	313	$	693	$	1,006	$	940	$	2,112	$	3,052
Short-term lease cost		107		58		165		321		100		421
Total lease cost	$	420	$	751	$	1,171	$	1,261	$	2,212	$	3,473

Other Information
Cash paid for amounts included in the measurement of lease liabilities and capitalized operating leases:
Operating cash flows	$	313	$	713	$	1,026	$	940	$	2,147	$	3,087

Weighted-average remaining lease term (in years):
Capitalized operating leases								1.17		4.26		3.78

Weighted-average discount rate:
Capitalized operating leases								3.92%		4.03%		4.02%

Schedule of future lease payments on capitalized operating leases

As of September 30, 2023, future lease payments over the remaining term of capitalized operating leases were as follows (in thousands):


For the Years Ended December 31,		Related Parties		Others		Total
2023, excluding the nine months ended September 30, 2023	$	315	$	373	$	688
2024		163		1,723		1,886
2025		163		1,650		1,813
2026		163		957		1,120
2027		1		236		237
Thereafter		—		161		161
	$	805	$	5,100	$	5,905

Imputed interest						(355)
Lease liability balance at September 30, 2023					$	5,550

LEASES - Lease Cost and Other Information (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($) lease	Sep. 30, 2022 USD ($)	Dec. 31, 2022 USD ($)
Leases
Right-of-use assets	$ 4,934	$ 8,495	$ 4,934	$ 8,495	$ 7,558
Lease liability	5,550		$ 5,550
Number of additional operating or financing leases not yet commenced \| lease			0
Lease Cost
Capitalized operating lease cost	813	1,006	$ 2,739	3,052
Short-term lease cost	268	165	618	421
Total lease cost	1,081	1,171	3,357	3,473
Cash paid for amounts included in the measurement of lease liabilities and capitalized operating leases:
Operating cash flows	$ 855	$ 1,026	$ 2,727	$ 3,087
Weighted-average remaining lease term - Capitalized operating leases (in years)	3 years 14 days	3 years 9 months 10 days	3 years 14 days	3 years 9 months 10 days
Weighted-average discount rate - Capitalized operating leases	4.05%	4.02%	4.05%	4.02%
Related Parties
Leases
Right-of-use assets	$ 209		$ 209
Lease liability	209		209
Lease Cost
Capitalized operating lease cost	313	$ 313	940	$ 940
Short-term lease cost	107	107	321	321
Total lease cost	420	420	1,261	1,261
Cash paid for amounts included in the measurement of lease liabilities and capitalized operating leases:
Operating cash flows	$ 313	$ 313	$ 940	$ 940
Weighted-average remaining lease term - Capitalized operating leases (in years)	2 months 1 day	1 year 2 months 1 day	2 months 1 day	1 year 2 months 1 day
Weighted-average discount rate - Capitalized operating leases	3.92%	3.92%	3.92%	3.92%
Others
Lease Cost
Capitalized operating lease cost	$ 500	$ 693	$ 1,799	$ 2,112
Short-term lease cost	161	58	297	100
Total lease cost	661	751	2,096	2,212
Cash paid for amounts included in the measurement of lease liabilities and capitalized operating leases:
Operating cash flows	$ 542	$ 713	$ 1,787	$ 2,147
Weighted-average remaining lease term - Capitalized operating leases (in years)	3 years 1 month 24 days	4 years 3 months 3 days	3 years 1 month 24 days	4 years 3 months 3 days
Weighted-average discount rate - Capitalized operating leases	4.07%	4.03%	4.07%	4.03%

BASIS OF PRESENTATION (Tables)

9 Months Ended

Sep. 30, 2023

Basis of Presentation

Schedule of restructuring and other charges

Restructuring and other charges are presented separately from selling, general and administrative expenses. Costs incurred were as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Employee separations	$	17	$	—	$	2,416	$	—
Other charges		27		—		271		—
Total restructuring and other charges	$	44	$	—	$	2,687	$	—

FAIR VALUE MEASUREMENTS - Available-for-Sale Investments (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Debt Securities, Available-for-Sale [Line Items]
Amortized Cost	$ 265,919	$ 96,386
Unrealized Gains	195
Fair Value	$ 266,114	$ 96,386
Fair value hierarchy - Level 1	us-gaap:FairValueInputsLevel1Member	us-gaap:FairValueInputsLevel1Member
Money market funds \| Cash and cash equivalents
Debt Securities, Available-for-Sale [Line Items]
Amortized Cost	$ 167,852	$ 96,386
Fair Value	167,852	$ 96,386
U.S. Government treasury securities \| Cash and cash equivalents
Debt Securities, Available-for-Sale [Line Items]
Amortized Cost	49,368
Fair Value	49,368
U.S. Government treasury securities \| Short-term investments
Debt Securities, Available-for-Sale [Line Items]
Amortized Cost	48,699
Unrealized Gains	195
Fair Value	$ 48,894

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-2

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-2

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (aa)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-2

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (aaa)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-2

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-2

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)
-Publisher FASB
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+ Details

EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Numerator:
Net Income (Loss)	$ 25,598	$ 23,206	$ 59,493	$ 70,396
Denominator:
Denominator for basic earnings per share	26,262	26,279	26,281	26,267
Dilutive effect of unvested employee stock awards	172	176	125	165
Denominator for diluted earnings per share	26,434	26,455	26,406	26,432
Earnings per share:
Basic	$ 0.97	$ 0.88	$ 2.26	$ 2.68
Diluted	$ 0.97	$ 0.88	$ 2.25	$ 2.66
Additional Disclosure
Employee stock awards excluded from computation of diluted earnings per share	0	0	0	0

BASIS OF PRESENTATION - Restructuring and Other Charges (Details) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2023 USD ($)	Sep. 30, 2023 USD ($)
Restructuring and other charges
Restructuring and other charges	$ 44	$ 2,687
Accrued employee termination benefits	772	772
Treasury stock
Common stock repurchases as treasury stock including excise tax		$ 5,446
Excise tax rate on certain stock repurchases		1.00%
Employee separations
Restructuring and other charges
Restructuring and other charges	17	$ 2,416
Other charges
Restructuring and other charges
Restructuring and other charges	$ 27	$ 271

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References + Details

CONDENSED CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Condensed Consolidated Statements Of Other Comprehensive Income
Net Income (Loss)	$ 25,598	$ 23,206	$ 59,493	$ 70,396
Other comprehensive income
Unrealized gains on available-for-sale investments, net of tax of $(41)	154		154
Comprehensive income	$ 25,752	$ 23,206	$ 59,647	$ 70,396

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

+ Details

SEGMENT INFORMATION

9 Months Ended

Sep. 30, 2023

Segment Information

Segment Information

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 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.


	Three Months Ended				Nine Months Ended
	September 30,		September 30,		September 30,		September 30,
	2023		2022		2023		2022
Net sales:
Business Solutions	$	269,021	$	315,816	$	803,162	$	964,610
Enterprise Solutions		276,566		305,510		877,662		989,861
Public Sector Solutions		147,499		154,366		473,354		438,074
Total net sales	$	693,086	$	775,692	$	2,154,178	$	2,392,545
Operating income (loss):
Business Solutions	$	21,040	$	19,278	$	56,424	$	62,230
Enterprise Solutions		11,230		12,401		25,263		42,103
Public Sector Solutions		4,117		4,211		5,796		4,156
Headquarters/Other		(4,365)		(4,151)		(12,273)		(11,845)
Total operating income		32,022		31,739		75,210		96,644
Other income, net		2,688		308		5,848		319
Income before taxes	$	34,710	$	32,047	$	81,058	$	96,963
Selected operating expense:
Depreciation and amortization:
Business Solutions	$	156	$	167	$	473	$	502
Enterprise Solutions		391		482		1,238		1,517
Public Sector Solutions		22		20		61		59
Headquarters/Other		2,720		2,351		7,684		6,922
Total depreciation and amortization	$	3,289	$	3,020	$	9,456	$	9,000
Total assets:
Business Solutions					$	481,483	$	451,872
Enterprise Solutions						676,694		647,592
Public Sector Solutions						110,919		113,820
Headquarters/Other						(87,669)		(79,159)
Total assets					$	1,181,427	$	1,134,125

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 September 30, 2023 and 2022, total assets for the Headquarters/Other group were presented net of intercompany balance eliminations of $58,864 and $62,154, 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.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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+ Details