Climb Global Solutions Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Segment Information

Segment Information

6 Months Ended

Jun. 30, 2018

13. Segment Information:

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 CODM is the Interim 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 United States 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 the Canadian operations provide the same products and services to similar clients and are considered together when the Company’s 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 an individual segment 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. The following segment reporting information of the Company is provided:


	(Unaudited) Six months ended June 30,					(Unaudited) Three months ended June 30,
	2018		2017		2018		2017
Revenue:
Lifeboat Distribution	$	75,163	$	69,175	$	38,324	$	35,341
TechXtend		9,303		7,937		5,590		3,680
		84,466		77,112		43,914		39,021
Gross Profit:
Lifeboat Distribution		11,461		11,455		5,277		5,612
TechXtend		1,932		1,876		1,221		960
		13,393		13,331		6,498		6,572
Direct Costs:
Lifeboat Distribution		4,222		4,276		2,187		2,171
TechXtend		895		889		495		417
		5,117		5,165		2,682		2,588
Segment Income Before Taxes: (1)
Lifeboat Distribution		7,239		7,179		3,090		3,441
TechXtend		1,037		987		726		543
Segment Income Before Taxes		8,276		8,166		3,816		3,984

General and administrative		5,229		4,645		2,616		2,254
Separation expense		2,446		—		2,446		—
Interest, net		449		321		210		173
Foreign currency translation		(2)		(50)		(3)		(50)
Income (loss) before taxes	$	1,048	$	3,792	$	(1,039)	$	1,853

(1) Excludes general corporate expenses including separation, interest, and foreign currency translation expenses.


	As of		As of
	June 30,		December 31,
	(Unaudited)
Selected Assets by Segment:	2018		2017

Lifeboat Distribution	$	64,424	$	72,806
TechXtend		19,802		21,200
Segment Select Assets		84,226		94,006
Corporate Assets		13,174		8,279
Total Assets	$	97,400	$	102,285


Disaggregation of revenue	Six Months Ended				Three months ended
	June 30,		June 30,		June 30,		June 30,
	2018		2017		2018		2017
Lifeboat Distribution

Hardware and software product	$	67,596	$	61,878	$	35,173	$	31,767
Software - security & highly interdependent with support		3,249		2,699		1,163		1,196
Maintenance, support & other services		4,318		4,598		1,988		2,378
Net Sales	$	75,163	$	69,175	$	38,324	$	35,341

TechXtend

Hardware and software product	$	8,377	$	6,984	$	4,938	$	3,165
Software - security & highly interdependent with support		347		315		330		267
Maintenance, support & other services		579		638		322		248
Net Sales	$	9,303	$	7,937	$	5,590	$	3,680