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, 2020

16. 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 Chief Executive Officer.

The Company is organized into two reportable operating segments. The “Climb Channel Solutions” segment (formerly Lifeboat Distribution) 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)				(Unaudited)
	Six months ended June 30,				Three months ended June 30,
	2020		2019		2020		2019
Revenue:
Climb Channel Solutions	$	111,479	$	87,376	$	54,213	$	47,320
TechXtend		7,727		8,158		2,373		3,356
		119,206		95,534		56,586		50,676
Gross Profit:
Climb Channel Solutions	$	13,806	$	13,322	$	6,643	$	7,124
TechXtend		1,473		1,731		471		695
		15,279		15,053		7,114		7,819
Direct Costs:
Climb Channel Solutions	$	5,371	$	5,039	$	2,734	$	2,555
TechXtend		717		808		255		370
		6,088		5,847		2,989		2,925
Segment Income Before Taxes: (1)
Climb Channel Solutions	$	8,435	$	8,283	$	3,909	$	4,569
TechXtend		756		923		216		325
Segment Income Before Taxes		9,191		9,206		4,125		4,894

General and administrative	$	5,024	$	5,241	$	2,623	$	2,647
Legal and financial advisory expenses - unsolicited bid and related matters		1,833		—		509		—
Acquisition related costs		638		—		235		—
Interest, net		86		298		24		129
Foreign currency transaction gain		276		91		161		29
Income before taxes	$	2,058	$	4,354	$	943	$	2,405

(1)

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


	(Unaudited)
	As of		As of
	June 30,		December 31,
Selected Assets by Segment:	2020		2019

Climb Channel Solutions	$	74,302	$	99,602
TechXtend		3,306		5,603
Segment Select Assets		77,608		105,205
Corporate Assets		58,306		21,076
Total Assets	$	135,914	$	126,281


	Six months ended				Three months ended
	(Unaudited)				(Unaudited)
Disaggregation of Revenue:	June 30,		June 30,		June 30,		June 30,
	2020		2019		2020		2019
Climb Channel Solutions

Hardware, software and other products	$	102,332	$	78,660	$	49,838	$	42,807
Software - security & highly interdependent with support		3,733		3,494		1,807		1,656
Maintenance, support & other services		5,414		5,222		2,568		2,857
Net Sales	$	111,479	$	87,376	$	54,213	$	47,320

TechXtend

Hardware, software and other products	$	7,248	$	7,314	$	2,159	$	2,977
Software - security & highly interdependent with support		47		126		19		71
Maintenance, support & other services		432		718		195		308
Net Sales	$	7,727	$	8,158	$	2,373	$	3,356