Quarterly report pursuant to Section 13 or 15(d)

Segment Information

v3.20.2
Segment Information
 9 Months Ended
Sep. 30, 2020
Segment Information  
Segment Information

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)

 

 

Nine months ended September 30,

 

Three months ended September 30,

 

 

2020

  

2019

  

2020

  

2019

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Climb Channel Solutions

 

$

168,537

 

$

136,189

 

$

57,059

 

$

48,815

TechXtend

 

 

11,587

 

 

11,708

 

 

3,860

 

 

3,548

 

 

 

180,124

 

 

147,897

 

 

60,919

 

 

52,363

Gross Profit:

 

 

 

 

 

 

 

 

 

 

 

 

Climb Channel Solutions

 

$

20,390

 

$

19,708

 

$

6,585

 

$

6,386

TechXtend

 

 

2,125

 

 

2,400

 

 

652

 

 

669

 

 

 

22,515

 

 

22,108

 

 

7,237

 

 

7,055

Direct Costs:

 

 

 

 

 

 

 

 

 

 

 

 

Climb Channel Solutions

 

$

8,387

 

$

7,520

 

$

2,993

 

$

2,481

TechXtend

 

 

992

 

 

1,124

 

 

275

 

 

316

 

 

 

9,379

 

 

8,644

 

 

3,268

 

 

2,797

Segment Income Before Taxes: (1)

 

 

 

 

 

 

 

 

 

 

 

 

Climb Channel Solutions

 

$

12,003

 

$

12,188

 

$

3,592

 

$

3,905

TechXtend

 

 

1,133

 

 

1,276

 

 

377

 

 

353

Segment Income Before Taxes

 

 

13,136

 

 

13,464

 

 

3,969

 

 

4,258

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

$

7,890

 

$

7,531

 

$

2,889

 

$

2,290

Legal and financial advisory expenses, net - unsolicited bid and related matters

 

 

1,752

 

 

 —

 

 

(81)

 

 

 —

Acquisition related costs

 

 

982

 

 

 —

 

 

344

 

 

 —

Interest, net

 

 

105

 

 

416

 

 

19

 

 

118

Foreign currency transaction gain

 

 

211

 

 

39

 

 

(67)

 

 

(52)

Income before taxes

 

$

2,828

 

$

6,388

 

$

769

 

$

2,034

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

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

 

 

 

 

 

 

 

 

 

 

    

(Unaudited)

    

 

    

 

 

As of

 

As of 

 

 

 

September 30,

 

December 31,

 

Selected Assets by Segment:

 

2020

 

2019

 

 

 

 

 

 

 

 

 

Climb Channel Solutions

 

$

86,593

 

$

99,602

 

TechXtend

 

 

2,962

 

 

5,603

 

Segment Select Assets

 

 

89,555

 

 

105,205

 

Corporate Assets

 

 

46,653

 

 

21,076

 

Total Assets

 

$

136,208

 

$

126,281

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine months ended

 

Three months ended

 

 

 

(Unaudited)

 

(Unaudited)

 

Disaggregation of Revenue:

 

September 30,

 

September 30,

 

September 30,

 

September 30,

 

 

 

2020

 

2019

 

2020

 

2019

 

Climb Channel Solutions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hardware, software and other products

 

$
155,039

 

$
122,967

 

$
52,706

 

$
44,308

 

Software - security & highly interdependent with support

 

 
5,775

 

 
5,162

 

 
2,042

 

 
1,670

 

Maintenance, support & other services

 

 
7,723

 

 
8,060

 

 
2,311

 

 
2,837

 

Net Sales

 

$
168,537

 

$
136,189

 

$
57,059

 

$
48,815

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TechXtend

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hardware, software and other products

 

$
10,912

 

$

10,515

 

$
3,664

 

$

3,200

 

Software - security & highly interdependent with support

 

 
64

 

 

255

 

 
17

 

 

128

 

Maintenance, support & other services

 

 
611

 

 

938

 

 
179

 

 

220

 

Net Sales

 

$
11,587

 

$
11,708

 

$
3,860

 

$
3,548