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

3 Months Ended

Mar. 31, 2020

14. 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 President of our “Lifeboat Distribution” segment.

The Company is organized into two reportable operating segments. The “Lifeboat Distribution” segment distributes technical software and hardware 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, vendor prepayments 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)
	Three months ended March 31,
	2020		2019
Revenue:
Lifeboat Distribution	$	57,264	$	40,055
TechXtend		5,354		4,803
		62,618		44,858
Gross Profit:
Lifeboat Distribution	$	7,162	$	6,198
TechXtend		1,002		1,036
		8,164		7,234
Direct Costs:
Lifeboat Distribution	$	2,637	$	2,484
TechXtend		462		437
		3,099		2,921
Segment Income Before Taxes: (1)
Lifeboat Distribution	$	4,525	$	3,714
TechXtend		540		599
Segment Income Before Taxes		5,065		4,313

General and administrative	$	2,401	$	2,594
Legal and financial advisory expenses - unsolicited bid and related matters		1,323		—
Acquisition related costs		403		—
Interest, net		62		169
Foreign currency transaction gain		115		62
Income before taxes	$	1,115	$	1,950

(1)

Excludes general corporate expenses including interest and foreign currency translation expenses.


	(Unaudited)
	As of		As of
	March 31,		December 31,
Selected Assets by Segment:	2020		2019

Lifeboat Distribution	$	107,450	$	99,602
TechXtend		5,164		5,603
Segment Select Assets		112,614		105,205
Corporate Assets		17,232		21,076
Total Assets	$	129,846	$	126,281


	(Unaudited)
	Three months ended
Disaggregation of Revenue:	March 31,		March 31,
	2020		2019
Lifeboat Distribution

Hardware, software and other products	$	52,494	$	35,852
Software - security & highly interdependent with support		1,925		1,836
Maintenance, support & other services		2,845		2,367
Net Sales	$	57,264	$	40,055

TechXtend

Hardware, software and other products	$	5,089	$	4,337
Software - security & highly interdependent with support		28		56
Maintenance, support & other services		237		410
Net Sales	$	5,354	$	4,803