Annual report pursuant to Section 13 and 15(d)

Industry, Segment and Geographic Information

v2.4.0.8
Industry, Segment and Geographic Information
 12 Months Ended
Dec. 31, 2013
Industry, Segment and Geographic Information  
Industry, Segment and Geographic Information

Note 11.  Industry, Segment and Geographic 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 in the USA and Canada.  We also operate a sales branch in Europe to serve our customers in this region of the world.

 

Geographic revenue and identifiable assets related to operations as of and for the years ended December 31, 2013, 2012 and 2011 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.  No one country other than the USA represents more than 10% of net sales for 2013, 2012 or 2011.

 

 

 

2013

 

2012

 

2011

 

Net sales to Unaffiliated Customers:

 

 

 

 

 

 

 

USA

 

$

254,337

 

$

251,991

 

$

209,946

 

Canada

 

21,602

 

22,245

 

18,672

 

Rest of the world

 

24,451

 

22,821

 

21,551

 

Total

 

$

300,390

 

$

297,057

 

$

250,169

 

 

 

 

2013

 

2012

 

2011

 

Identifiable Assets by Geographic Areas at December 31,

 

 

 

 

 

 

 

USA

 

$

87,025

 

$

85,503

 

$

69,309

 

Canada

 

7,735

 

5,942

 

5,552

 

Total

 

$

94,760

 

$

91,445

 

$

74,861

 

 

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 Company’s Chief Operating Decision Maker (CODM) to assess performance and allocate resources determines the basis for reportable operating segments. The Company’s CODM is the Chief Executive Officer.

 

The Company is organized into two reportable operating segments.  The “Lifeboat Distribution” segment distributes technical software to corporate resellers, value added resellers (VARs), consultants and systems integrators worldwide.  The “TechXtend” segment is a value-added reseller of software, hardware and services for corporations, government organizations and academic institutions in the USA and Canada.

 

As permitted by FASB ASC Topic 280, the Company has utilized the aggregation criteria in combining its operations in Canada with the domestic segments as they provide the same products and services to similar clients and are considered together when the CODM decides how to allocate resources.

 

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 a business unit. The Company only identifies accounts receivable and inventory by segment as shown below as “Selected Assets” by segment; it does not allocate its other assets, including capital expenditures by segment.

 

 

 

Year ended

 

 

 

December 31,

 

 

 

2013

 

2012

 

2011

 

Revenue:

 

 

 

 

 

 

 

Lifeboat Distribution

 

$

237,632

 

$

217,342

 

$

192,720

 

TechXtend

 

62,758

 

79,715

 

57,449

 

 

 

300,390

 

297,057

 

250,169

 

Gross Profit:

 

 

 

 

 

 

 

Lifeboat Distribution

 

$

17,448

 

$

15,818

 

$

16,804

 

TechXtend

 

6,907

 

8,074

 

6,437

 

 

 

24,355

 

23,892

 

23,241

 

Direct Costs:

 

 

 

 

 

 

 

Lifeboat Distribution

 

$

4,717

 

$

4,512

 

$

4,715

 

TechXtend

 

3,280

 

3,567

 

3,058

 

 

 

7,997

 

8,079

 

7,773

 

Segment Income Before Taxes:

 

 

 

 

 

 

 

Lifeboat Distribution

 

$

12,731

 

$

11,306

 

$

12,089

 

TechXtend

 

3,627

 

4,507

 

3,379

 

Segment Income Before Taxes

 

16,358

 

15,813

 

15,468

 

 

 

 

 

 

 

 

 

General and administrative

 

7,508

 

7,298

 

6,850

 

Interest income

 

562

 

557

 

368

 

Foreign currency translation gains

 

—

 

17

 

1

 

Income before taxes

 

$

9,412

 

$

9,089

 

$

8,987

 

 

 

 

As of 
December 
31, 2013

 

As of 
December 
31,2012

 

Selected Assets By Segment:

 

 

 

 

 

Lifeboat Distribution

 

$

30,630

 

$

30,258

 

TechXtend

 

41,487

 

44,698

 

Segment Select Assets

 

72,117

 

74,956

 

Corporate Assets

 

22,643

 

16,489

 

Total Assets

 

$

94,760

 

$

91,445

 

 

The Company had three customers that accounted for more than 10% of total sales for 2013. For the year ended December 31, 2013, Software House International Corporation (“SHI”), CDW Corporation (“CDW”), Insight Enterprises, Inc. (“Insight”) and accounted for 14.9%, 13.8% and 12.2%, respectively, of consolidated net sales and, as of December 31, 2013, 12.7, 12.3% and 9.5%, respectively, of total net accounts receivable. For the year ended December 31, 2013 Dell/Quest Software was the only individual vendor from whom our purchases exceeded 10% of our total purchases and accounted for 10.2% of our total purchases. For the year ended December 31, 2012, SHI, CDW, and Insight accounted for 13.4%, 12.4% and 11.1%, respectively, of consolidated net sales. For the year ended December 31, 2012 Dell/Quest Software was the only individual vendor from whom our purchases exceeded 10% of our total purchases and accounted for 13.4% of our total purchases.   For the year ended December 31, 2011, CDW, Insight and SHI accounted for 14.0%, 11.0% and 10.5%, respectively, of consolidated net sales. .  For the year ended December 31, 2011, Veeam and Quest accounted for 12.6% and 11.2%, respectively, of our total purchases. Our top five customers accounted for 48%, 44%, and 42% of consolidated net sales in 2013, 2012 and 2011, respectively.