Annual report pursuant to Section 13 and 15(d)

Industry, Segment and Geographic Information

v2.4.0.6
Industry, Segment and Geographic Information
 12 Months Ended
Dec. 31, 2012
Industry, Segment and Geographic Information  
Industry, Segment and Geographic Information

10.  Industry, Segment and Geographic Information

 

The Company resells computer software and hardware developed by others and provides technical services directly to customers in the United States 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, 2012, 2011 and 2010 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 United Sates represents more than 10% of net sales for 2012, 2011 or 2010.

 

 

 

2012

 

2011

 

2010

 

Net sales to Unaffiliated Customers:

 

 

 

 

 

 

 

United States

 

$

251,991

 

$

209,946

 

$

174,180

 

Canada

 

22,245

 

18,672

 

15,048

 

Other

 

22,821

 

21,551

 

17,502

 

Total

 

$

297,057

 

$

250,169

 

$

206,730

 

 

 

 

2012

 

2011

 

2010

 

Identifiable Assets by Geographic Areas at December 31,

 

 

 

 

 

 

 

United States

 

$

85,503

 

$

69,309

 

$

64,237

 

Canada

 

5,942

 

5,552

 

4,446

 

Total

 

$

91,445

 

$

74,861

 

$

68,683

 

 

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 primarily in the United States and Canada.  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 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,

 

 

 

2012

 

2011

 

2010

 

Revenue:

 

 

 

 

 

 

 

Lifeboat Distribution

 

$

217,342

 

$

192,720

 

$

149,151

 

TechXtend

 

79,715

 

57,449

 

57,579

 

 

 

297,057

 

250,169

 

206,730

 

Gross Profit:

 

 

 

 

 

 

 

Lifeboat Distribution

 

$

15,818

 

$

16,804

 

$

13,703

 

TechXtend

 

8,074

 

6,437

 

6,307

 

 

 

23,892

 

23,241

 

20,010

 

Direct Costs:

 

 

 

 

 

 

 

Lifeboat Distribution

 

$

4,512

 

$

4,715

 

$

3,934

 

TechXtend

 

3,567

 

3,058

 

2,932

 

 

 

8,079

 

7,773

 

6,866

 

Segment Income Before Taxes:

 

 

 

 

 

 

 

Lifeboat Distribution

 

$

11,306

 

$

12,089

 

$

9,769

 

TechXtend

 

4,507

 

3,379

 

3,375

 

Segment Income Before Taxes

 

15,813

 

15,468

 

13,144

 

 

 

 

 

 

 

 

 

General and administrative

 

7,298

 

6,850

 

6,341

 

Interest income

 

557

 

368

 

405

 

Foreign currency translation gains

 

17

 

1

 

2

 

Income before taxes

 

$

9,089

 

$

8,987

 

$

7,210

 

 

 

 

 

 

 

 

Selected Assets By Segment:

 

 

 

 

 

 

Lifeboat Distribution

 

$

30,258

 

$

29,314

 

 

TechXtend

 

44,698

 

27,881

 

 

Segment Select Assets

 

74,956

 

57,195

 

 

Corporate Assets

 

16,489

 

17,666

 

 

Total Assets

 

$

91,445

 

$

74,861

 

 

 

The Company had three customers that accounted for more than 10% of total sales for 2012. For the year ended December 31, 2012, Software House International, CDW Corporation, and Insight accounted for 13.4%, 12.4% and 11.1%, respectively, of consolidated net sales and, as of December 31, 2012, 12.0%, 9.6%, and 8.3%, respectively, of total net accounts receivable. For the year ended December 31, 2011, CDW Corporation, Insight and Software House International accounted for 14.0%, 11.0% and 10.5%, respectively. For the year ended December 31, 2010, CDW Corporation accounted for 15.8% of consolidated net sales.  Our top five customers accounted for 44%, 42%, and 44% of consolidated net sales in 2012, 2011 and 2010, respectively.