Market Overview

PCM Reports Record Second Quarter 2018 Results and Raises Gross Margin and Non-GAAP Earnings Guidance

Share:

Gross Profit Margin Increased 120 Basis Points to 16.5%
Operating
Profit Margin Increased 140 Basis Points to 2.4%

Non-GAAP
EBITDA Margin Increased 130 Basis Points to 3.5%

Diluted EPS
Increased 256% to $0.64

Non-GAAP Adjusted EPS Increased 116%
to $0.82

PCM, Inc. (NASDAQ:PCMI), a leading technology solutions
provider, today reported financial results for the second quarter of
2018.

Second Quarter Consolidated Financial Summary

 

Three Months Ended June 30,

(in millions, except per share data)

2018

 

2017

 

% Change

Net Sales $ 546.4 $ 556.1 (2)
Gross Profit 90.4 85.1 6
Gross Profit Margin 16.5% 15.3% 120bp
Consolidated SG&A $ 77.2 $ 79.7 (3)
Operating Profit 13.2 5.4 144
Net Income 7.9 2.4 233
Non-GAAP Net Income 10.0 5.2 94
 
EBITDA 16.6 8.9 86
Adjusted EBITDA 19.0 12.2 56
 
Diluted Earnings per Share 0.64 0.18 256
Adjusted Diluted Earnings per Share 0.82 0.38 116

Frank Khulusi, Chairman and CEO of PCM, Inc., stated, "Coming on the
heels of a great Q1, I am very pleased with our fantastic results in the
second quarter. We achieved record gross profit, gross margin and
adjusted EPS through solid execution in our strategic areas of focus and
investment. During the quarter we increased our focus on higher margin
sales such as managed services, advanced technologies, cloud, and
security solutions, and in some cases walked away from some low-margin
volume business we identified as unprofitable. These moves helped us
achieve our highest ever gross margin of 16.5%, 120 basis points higher
than the same quarter last year, and resulted in a slight reduction in
sales, an outcome we're happy with as our gross profit increased 6% from
the same quarter last year. Reflecting strong expense discipline,
consolidated SG&A expenses declined by 3% despite the 6% increase in
gross profit. All of this resulted in us reaching on a non-GAAP basis
adjusted EBITDA of $19 million, an adjusted EBITDA margin of 3.5%, and
adjusted EPS of $0.82, all significant bottom line achievements we're
proud of. Additionally, this increased profitability combined with our
focus on working capital management resulted in approximately $33
million of increased operating cash flow and nearly $36 million in
further reductions in our net debt, which has now declined by nearly $69
million since the end of 2017. I would like to thank all my fellow
co-workers at PCM for their hard work, die-hard dedication, and
significant contribution to these record results."

Commenting on PCM's outlook, Mr. Khulusi concluded, "Due to our strong
performance year to date as well as having a solid outlook for the rest
of the year, we are increasing our 2018 guidance for non-GAAP earnings
per share by $0.20 to a range of $2.20 - $2.30. We are also increasing
our gross margin guidance for the year to a new range of 15.60% to
15.85% on revised sales growth guidance of low single digits, reflecting
our focus on more profitable sales."

New Accounting Standard

In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with
Customers (Topic 606)," which, along with amendments issued in 2015 and
2016, replaced most existing revenue recognition guidance under GAAP and
eliminate industry specific guidance. The core principle of the new
guidance is that an entity should recognize revenue for the transfer of
goods and services equal to an amount it expects to be entitled to
receive for those goods and services. We adopted the guidance on January
1, 2018 using the full retrospective method, which resulted in
adjustments to our consolidated statement of operations for the three
and six months ended June 30, 2017, and our consolidated statement of
cash flows for the six months ended June 30, 2017 presented herein.

Second Quarter Segment Sales Summary

 

Three Months Ended June 30,

   

2018

 

2017

  Percentage of   Percentage of Percent
(in thousands)

Net Sales

Total Net Sales

Net Sales

Total Net Sales

Dollar Change

Change

Commercial $ 410,950 75 % $ 435,893 78 %

$

(24,943

)

(6 )%
Public Sector 74,712 14 76,427 14 (1,715 ) (2 )
Canada 47,416 9 43,579 8 3,837 9
United Kingdom 13,512 2 362 13,150

NM

(1)

Corporate & Other (160 ) (179 ) 19

NM

(1)

Consolidated $ 546,430 100 % $ 556,082 100 %

$

(9,652

)

(2 )%

_______________

(1) Not meaningful.

Results of Operations

Net Sales

Consolidated net sales were $546.4 million in the three months ended
June 30, 2018 compared to $556.1 million in the three months ended June
30, 2017, a decrease of $9.7 million or 2%. Consolidated sales of
services were $42.9 million in the three months ended June 30, 2018
compared to $40.8 million in the three months ended June 30, 2017, an
increase of $2.1 million, or 5%, and represented 8% and 7% of
consolidated net sales in the three months ended June 30, 2018 and 2017,
respectively.

Commercial net sales were $411.0 million in the three months ended June
30, 2018 compared to $435.9 million in the three months ended June 30,
2017, a decrease of $24.9 million or 6%. Sales of services in our
Commercial segment were $29.4 million in the three months ended June 30,
2018 compared to $27.6 million in the three months ended June 30, 2017,
an increase of $1.8 million or 7%, and represented 7% and 6% of
Commercial net sales in the three months ended June 30, 2018 and 2017,
respectively. The decrease in our Commercial segment net sales in the
three months ended June 30, 2018 was impacted by a large, low-margin
enterprise customer project in the prior year that did not reoccur, as
well as a several specific customer deals we elected not to pursue based
on our focus on profitable growth.

Public Sector net sales were $74.7 million in the three months ended
June 30, 2018 compared to $76.4 million in the three months ended June
30, 2017, a decrease of $1.7 million or 2%, primarily due to a 22%
decrease in our federal sales, partially offset by a 5% increase in our
state and local government and educational institution ("SLED") sales.
Sales of services in our Public Sector segment were $4.8 million in the
three months ended June 30, 2018 compared to $5.8 million in the three
months ended June 30, 2017, a decrease of $1.0 million or 18%, and
represented 6% and 8% of Public Sector net sales in the three months
ended June 30, 2018 and 2017, respectively. Our federal business net
sales were negatively impacted in the quarter by the loss of a Federal
contract, which we were unwilling to rebid at a loss as we stated over
the last few quarters.

Canada net sales were $47.4 million in the three months ended June 30,
2018 compared to $43.6 million in the three months ended June 30, 2017,
an increase of $3.8 million, or 9%. Sales of services in our Canada
segment were $7.5 million in the three months ended June 30, 2018
compared to $7.4 million in the three months ended June 30, 2017, and
represented 16% and 17% of Canada net sales in the three months ended
June 30, 2018 and 2017, respectively.

Our United Kingdom segment, which officially launched in the second
quarter of 2017, generated net sales of $13.5 million in the three
months ended June 30, 2018 compared to $0.4 million in the three months
ended June 30, 2017, an increase of $13.1 million.

Gross Profit and Gross Profit Margin

Consolidated gross profit was $90.4 million in the three months ended
June 30, 2018 compared to $85.1 million in the three months ended June
30, 2017, an increase of $5.3 million, or 6%. Consolidated gross profit
margin increased to 16.5% in the three months ended June 30, 2018 from
15.3% in the same period last year. The increase in consolidated gross
profit and gross profit margin was primarily due to a shift in mix
toward higher margin solutions and service sales.

Selling, General & Administrative Expenses

Consolidated SG&A expenses were $77.2 million in the three months ended
June 30, 2018 compared to $79.7 million in the three months ended June
30, 2017, a decrease of $2.5 million or 3%. Consolidated SG&A expenses
as a percentage of net sales decreased to 14.1% in the three months
ended June 30, 2018 from 14.3% in the same period last year. The
decrease in consolidated SG&A expenses was primarily related to a $2.0
million decrease in outside service costs primarily related to the
termination of the Pakistani BPO service contract, and a $1.0 million
decrease in telecommunication costs, partially offset by an increase in
personnel costs of $1.2 million, which was primarily due to our new
United Kingdom segment.

Operating Profit

Consolidated operating profit increased 144% to $13.2 million compared
to $5.4 million in the prior year, due to the increase in gross profit
and reduction in SG&A expenses for the reasons discussed above.

Income Taxes

Income tax expense was $3.1 million in the three months ended June 30,
2018 compared to $1.2 million in the three months ended June 30, 2017.
Our effective tax rate was 28.4% compared to 33.4% in the prior year.
Income taxes in the three months ended June 30, 2018 reflected the new
lower Federal income tax rate and other factors within tax reform, while
income taxes in the three months ended June 30, 2017 benefited from $0.4
million in excess tax benefits associated with stock based compensation.

Net Income

Net income for the three months ended June 30, 2018 was $7.9 million
compared to $2.4 million for the three months ended June 30, 2017.
Diluted earnings per share was $0.64 compared to $0.18 in the prior year.

Adjusted EPS

Non-GAAP EPS (adjusted EPS) was $0.82 for the three months ended June
30, 2018 compared to $0.38 in the three months ended June 30, 2017.

Consolidated Balance Sheet and Cash Flow

We had cash and cash equivalents of $11.5 million at June 30, 2018
compared to $9.1 million at December 31, 2017. We had $72.4 million of
net cash provided by operating activities during the six months ended
June 30, 2018 compared to $6.3 million in the six months ended June 30,
2017.

Accounts receivable at June 30, 2018 was $522.1 million, an increase of
$82.4 million from December 31, 2017, primarily the result of seasonally
strong sales toward the end of the second quarter. Inventory at June 30,
2018 was $78.5 million, a decrease of $25.0 million from December 31,
2017, primarily related to the sell through of certain purchases made in
the fourth quarter of 2017. Accounts payable at June 30, 2018 was $393.9
million, an increase of $104.7 million from December 31, 2017, also
primarily the result of seasonally strong sales and related purchase
volume toward the end of the second quarter.

Cash used in investing activities during the three months ended June 30,
2018 totaled $2.5 million compared to $9.1 million during the six months
ended June 30, 2017. Investing activities for the six months ended June
30, 2018 were primarily related to expenditures relating to investments
in our IT infrastructure. Investing activities for the six months ended
June 30, 2017 were primarily related to a purchase of real property in
Woodridge, Illinois for $3.1 million, expenditures relating to
investments in our IT infrastructure, and leasehold improvements.

Within cash flows from financing activities, we paid earnout payments
totaling $2.2 million in the six months ended June 30, 2018, compared to
$6.5 million in the six months ended June 30, 2017. The earnout period
ended as of March 31, 2018.

Our outstanding borrowings under our line of credit was $149.3 million
at June 30, 2018, a $64.5 million decline compared to $213.8 million at
December 31, 2017 as a result of the cash flow generated from our
earnings combined with our focus on working capital management during
the first half of 2018.

Sales Mix

The following table sets forth our gross billed sales (net of returns)
by major categories as a percentage of total gross billed sales (net of
returns) for the periods presented, determined based upon our internal
product code classifications:

  Three Months Ended   Y/Y

June 30,

Sales

2018

 

2017

Growth

Software (1) 29 % 31 % (10 )%
Notebooks and tablets 17 18 (8 )
Desktops 8 6 18
Delivered services 8 7 5
Networking 7 6 9
Manufacturer service and warranties (1) 6 6 9
Servers 4 3 28
Storage 4 3 18
Display 4 4 4
Accessories 4 4 (17 )
Input Devices 2 2 12
Printers 2 2 (13 )
Other (2) 5 8 (20 )
Total 100 % 100 %

_______________

(1)   Software, including software licenses, maintenance and enterprise
agreements, and manufacturer service and warranties are shown, for
purposes of this table, on a gross sales billed to customers basis,
net of returns and do not reflect the net down impact related to
revenue recognition for sales of such products.
(2) Other includes power, supplies, consumer electronics, memory,
iPod/MP3 and miscellaneous other items.

Non-GAAP Measures

We are presenting earnings before interest, taxes, depreciation and
amortization expenses (EBITDA), adjusted EBITDA and non-GAAP EPS
(adjusted EPS), which are financial measures that are not determined in
accordance with accounting principles generally accepted in the United
States of America, or GAAP. Adjusted EBITDA and adjusted EPS remove the
effect of severance and restructuring related expenses related to our
cost reduction initiatives and stock-based compensation, as well as
uncommon, non-recurring or special items. Adjusted EPS also removes the
effect of amortization of intangibles acquired in acquisitions.
Depreciation and amortization expenses primarily represent an allocation
to current expense of the cost of historical capital expenditures and
for acquired intangible assets resulting from prior business
acquisitions. EBITDA, adjusted EBITDA and adjusted EPS should be used in
conjunction with other GAAP financial measures and are not presented as
an alternative measure of operating results, as determined in accordance
with GAAP. We believe that these non-GAAP financial measures allow a
more meaningful comparison of our operating performance trends to both
management and investors that is more indicative of our consolidated
operating results across reporting periods. We believe that adjusted
EBITDA and adjusted EPS provide a better understanding of our company's
operating performance and cash flows. A reconciliation of the non-GAAP
consolidated financial measures is included in a table below.

Conference Call

Management will hold a conference call, which will be webcast, on July
25, 2018 at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time) to discuss
its second quarter results. To listen to PCM management's discussion of
its second quarter results live, access http://investor.pcm.com/events-presentations.

The archived webcast can be accessed at http://investor.pcm.com
under "Events & Presentations." A replay of the conference call by phone
will be available from 7:30 p.m. ET on July 25, 2018 until August 1,
2018 and can be accessed by calling (855) 859-2056 (International (404)
537-3406) and inputting code 5475015.

About PCM, Inc.

PCM, Inc., through its wholly-owned subsidiaries, is a leading
multi-vendor provider of technology solutions, including hardware,
software and services to small, medium and enterprise businesses, state,
local and federal governments and educational institutions across the
United States, Canada and the UK. We generated net sales of $2.2 billion
in the twelve months ended June 30, 2018. For more information, please
visit investor.pcm.com or call (310) 354-5600.

Forward-looking Statements

This press release may contain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. Such
forward-looking statements include statements regarding our
expectations, hopes or intentions regarding the future, including but
not limited to, statements related to expectations of reaping the
benefits of our investments in security, cloud, hybrid data center,
managed services and advanced technologies; expectations of financial
performance, opportunities, expectations or intentions for growth in top
or bottom line operating results; expectations for non-GAAP earnings per
share; expectations for gross margins; and expectations for the full
year 2018 sales growth. Forward-looking statements involve certain risks
and uncertainties, and actual results may differ materially from those
discussed in any such statement. Factors that could cause our actual
results to differ materially include without limitation risks and
uncertainties related to the following: our ability to attract and
retain key employees; our ability to receive expected returns on changes
in our sales and services organizations or strategic investments,
including without limit, investments in security, cloud, hybrid data
center, advanced technology solutions and services, our call centers and
our international expansion; risks associated with our ability to
integrate our acquisitions; availability of key vendor incentives and
other vendor assistance; our IT infrastructure; risks associated with
cyber and data security including compliance with related regulatory
requirements such as the European Union General Data Protection
Regulation; the relationship between the number of our account
executives and productivity; decreased sales related to any of our
segments, including but not limited to, potential decreases in sales
resulting from the loss of or a reduction in purchases from significant
customers; the effect of any failure by us to continue to successfully
transition outsourced BPO services historically provided to our En
Pointe business under a service agreement we acquired in connection with
our En Pointe acquisition; possible discontinuance of IT licenses or
authorizations used to operate our business which are provided by
vendors; increased competition, including, but not limited to, increased
competition from direct sales by some of our largest vendors and
increased pricing pressures which affect our pricing strategy in any
given period; the misappropriation or unauthorized use of our
proprietary or confidential information by competitors or others; our
loss of personnel to competitors; the effect of our pricing strategy on
our operating results; potential decreases in sales related to changes
in our vendors products; the potential lack of availability of
government funding applicable to our Public Sector business; the impact
of seasonality on our sales; availability of products from third party
suppliers at reasonable prices; business and other conditions in Canada,
the UK and Europe and the Asia-Pacific region and the related effects on
our Canadian, UK and our Asia-Pacific operations, including without
limitation our executive management's lack of experience operating in
some of these markets; increased expenses, including, but not limited
to, interest expense, foreign currency transaction gains/losses and
other expenses which may increase as a result of future inflationary
pressures; our advertising, marketing and promotional efforts may be
costly and may not achieve desired results; shifts in market demand or
price erosion of owned inventory; other risks related to foreign
currency fluctuations; warranties and indemnities we may be required to
provide to third parties through our commercial contracts; litigation by
or against us, including without limitation the litigation and other
actions related to our En Pointe acquisition; and availability of
financing, including availability under our existing credit lines.
Additional factors that could cause our actual results to differ are
discussed under the heading "Risk Factors" in Item 1A, Part II of our
Form 10-Q for the period ended March 31, 2018, on file with the
Securities and Exchange Commission, and in our other reports filed from
time to time with the SEC. All forward-looking statements in this
document are made as of the date hereof, based on information available
to us as of the date hereof, and we assume no obligation to update any
forward-looking statements.

PCM, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except per share amounts)
 
  Three Months Ended   Six Months Ended
June 30, June 30,
2018   2017 2018   2017
Net sales $ 546,430 $ 556,082 $ 1,089,262 $ 1,078,842
Cost of goods sold   456,013   470,937   915,249   915,199
Gross profit 90,417 85,145 174,013 163,643
Selling, general and administrative expenses   77,222   79,741   154,576   153,528
Operating profit 13,195 5,404 19,437 10,115
Interest expense, net 2,315 1,986 4,777 3,639
Equity income from unconsolidated affiliate   129   135   304   273
Income before income taxes 11,009 3,553 14,964 6,749
Income tax expense   3,126   1,187   4,270   211
Net income $ 7,883 $ 2,366 $ 10,694 $ 6,538
 
Basic and Diluted Earnings Per Common Share
Basic $ 0.66 $ 0.19 $ 0.90 $ 0.52
Diluted 0.64 0.18 0.88 0.48
 
Weighted average number of common shares outstanding:
Basic 11,912 12,574 11,878 12,477
Diluted 12,259 13,486 12,145 13,483
 
PCM, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(unaudited, in thousands, except per share amounts)
 
  Three Months Ended   Six Months Ended
June 30, June 30,
2018   2017 2018   2017
EBITDA(a):
Consolidated operating profit $ 13,195 $ 5,404 $ 19,437 $ 10,115
Add: Consolidated depreciation expense 2,618 2,418 5,331 4,858
Consolidated amortization expense 690 973 1,582 2,055

Equity income from unconsolidated affiliate(b)

  129   135   304   273
EBITDA $ 16,632 $ 8,930 $ 26,654 $ 17,301
 
EBITDA Adjustments:
Stock-based compensation $ 760 $ 708 $ 1,432 $ 1,223
M&A and related litigation costs and fees(c) 899 1,370 1,139 1,540
Severance and restructuring related costs(d) 252 1,165 564 1,781
Foreign exchange loss   417   8   187   34
Total EBITDA adjustments $ 2,328 $ 3,251 $ 3,322 $ 4,578
 
Adjusted EBITDA
EBITDA $ 16,632 $ 8,930 $ 26,654 $ 17,301
Add: EBITDA Adjustments   2,328   3,251   3,322   4,578
Adjusted EBITDA $ 18,960 $ 12,181 $ 29,976 $ 21,879
 
Net income:
Income before income taxes $ 11,009 $ 3,553 $ 14,964 $ 6,749
Less: Income tax expense   3,126   1,187   4,270   211
Net income $ 7,883 $ 2,366 $ 10,694 $ 6,538
 
Income before income taxes $ 11,009 $ 3,553 $ 14,964 $ 6,749
Add: EBITDA Adjustments 2,328 3,251 3,322 4,578
Amortization of purchased intangibles(e) 686 969 1,574 2,047
One-time interest charge(f)     321     321
Adjusted income before income taxes 14,023 8,094 19,860 13,695
Less: Adjusted income tax expense(g)   3,997   2,914   5,660   4,930
Non-GAAP net income $ 10,026 $ 5,180 $ 14,200 $ 8,765
 
Diluted earnings per share:
GAAP diluted EPS $ 0.64 $ 0.18 $ 0.88 $ 0.48
Non-GAAP diluted EPS 0.82 0.38 1.17 0.65
 
Diluted weighted average number of common shares outstanding

12,259

13,486

12,145

 

13,483

_______________

(a)   EBITDA — earnings from continuing operations before interest, taxes,
depreciation and amortization.
(b) Represents our equity income resulting from our 49% ownership
interest in the NCE.
(c) Includes litigation costs and fees related to our acquisitions.
(d) Includes employee severance related costs related to our cost
reduction initiatives, lease vacancy costs and other restructuring
related costs.
(e) Includes amortization expense for acquisition-related intangible
assets, which include trademarks, trade names, non-compete
agreements and customer relationships.
(f) Represents interest expense levied against the company for unclaimed
property reports for periods dating back to 2003.
(g) The 2018 adjusted income tax expense assumes an estimated annual
effective tax rate of 28.5%. The 2017 adjusted income tax expense
assumes an estimated annual effective tax rate of 36.0%.
 
PCM, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands, except per share amounts and share data)
 
  June 30,   December 31,
  2018       2017  
ASSETS
Current assets:
Cash and cash equivalents $ 11,503 $ 9,113
Accounts receivable, net of allowances of $1,908 and $2,181 522,072 439,658
Inventories 78,491 103,471
Prepaid expenses and other current assets   9,198     9,333  
Total current assets 621,264 561,575
Property and equipment, net 69,707 71,551
Goodwill 87,616 87,768
Intangible assets, net 9,443 11,090
Deferred income taxes 1,495 1,759
Investment and other assets   5,193     6,509  
Total assets $ 794,718   $ 740,252  
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 393,890 $ 289,201
Accrued expenses and other current liabilities 54,413 55,040
Deferred revenue 12,204 7,913
Line of credit 149,300 213,778
Notes payable — current 3,459 3,362
Note payable related to asset held for sale        
Total current liabilities 613,266 569,294
Notes payable 31,151 32,892
Other long-term liabilities 7,710 7,338
Deferred income taxes   3,836     3,102  
Total liabilities   655,963     612,626  
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.001 par value; 5,000,000 shares authorized; none
issued and outstanding

Common stock, $0.001 par value; 30,000,000 shares authorized;
17,285,019 and 17,170,273 shares issued; 11,894,367 and 11,779,621
shares outstanding

17

17

Additional paid-in capital 135,899 134,646
Treasury stock, at cost: 5,390,652 shares (38,536 ) (38,536 )
Accumulated other comprehensive income (567 ) 251
Retained earnings   41,942     31,248  
Total stockholders' equity   138,755     127,626  
Total liabilities and stockholders' equity $ 794,718   $ 740,252  
 
PCM, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
 
  Six Months Ended June 30,
  2018       2017  
Cash Flows From Operating Activities
Net income $ 10,694 $ 6,538
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 6,913 6,913
Equity income from unconsolidated affiliate (304 ) (273 )
Distribution from equity method investee 162
Provision for deferred income taxes 984 171
Non-cash stock-based compensation 1,432 1,223
Change in operating assets and liabilities:
Accounts receivable (82,414 ) (83,825 )
Inventories 24,980 5,988
Prepaid expenses and other current assets 135 1,784
Other assets 1,571 1,294
Accounts payable 102,681 74,311
Accrued expenses and other current liabilities 1,247 (4,363 )
Deferred revenue   4,291     (3,453 )
Total adjustments   61,678     (230 )
Net cash provided by operating activities   72,372     6,308  
Cash Flows From Investing Activities
Purchases of property and equipment (2,358 ) (9,056 )
Acquisition of Stack Technology   (166 )    
Net cash used in investing activities   (2,524 )   (9,056 )
Cash Flows From Financing Activities
Net payments under line of credit (64,478 ) (86 )
Borrowing under note payable 3,139
Payments under notes payable (1,638 ) (1,992 )
Change in book overdraft 1,952 5,038
Payments of earn-out liability (2,199 ) (6,523 )
Payments of obligations under capital lease (349 ) (860 )
Proceeds from capital lease obligations 587
Proceeds from stock issued under stock option plans 261 4,722
Payment for deferred financing costs (43 ) (635 )
Payment of taxes related to net-settled stock awards   (450 )   (783 )
Net cash provided by (used in) financing activities   (66,944 )   2,607  
Effect of foreign currency on cash flow   (514 )   274  
Net change in cash and cash equivalents 2,390 133
Cash and cash equivalents at beginning of the period   9,113     7,172  
Cash and cash equivalents at end of the period $ 11,503   $ 7,305  
Supplemental Cash Flow Information
Interest paid $ 4,579 $ 3,263
Income taxes (refund) paid, net (1,558 ) 3,314
Supplemental Non-Cash Investing and Financing Activities
Financed and accrued purchases of property and equipment 1,134 14

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