Financial Data and Key Metrics Changes - Gross profit increased 4.5% year-over-year to $135.6 million, with gross margin expanding 100 basis points to 19.3% [6][9] - Total net sales were $702.9 million, down 0.8% from last year due to challenges in the public sector [6][9] - Diluted earnings per share were $0.82, an increase of 5.1%, while adjusted diluted earnings per share was $0.91, an increase of 16.7% compared to the prior year [9][13] Business Line Data and Key Metrics Changes - Business Solutions segment net sales increased 4.2% to $273.5 million, with gross profit rising 11.4% to $69.8 million [6][7] - Public Sector Solutions net sales were $90.8 million, down 36.8% from a year ago, with gross billings declining 23.7% to $170.7 million [7][8] - Enterprise Solutions net sales increased 11.9% to $338.7 million, driven by strong demand for advanced technologies [8][9] Market Data and Key Metrics Changes - Retail net sales grew 22%, financial services net sales were up 28%, and healthcare net sales grew 19% year-over-year [18][19] - The company expects to outperform the U.S. IT market by 200 basis points in 2026, with a blended growth number of around 4% for the market [22][25] Company Strategy and Development Direction - The company aims to expand its solutions-led business, deepen customer relationships, and drive profitable growth in cloud, cybersecurity, AI, and services [9][10] - The strategy includes focusing on data center modernization, digital workplace transformation, and supply chain solutions [19][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in long-term trends supporting the business, despite near-term headwinds such as memory supply constraints and inflation [10][19] - The backlog ended Q4 at its highest level since 2022, indicating strong future demand [22] Other Important Information - The company executed a voluntary retirement offering, resulting in a severance charge of $3.1 million, with expected ongoing annual cost savings of approximately $7 million to $8 million [12][14] - The board of directors authorized an additional $50 million for the existing share repurchase program and declared a $0.20 per share dividend, a 33% increase [15] Q&A Session Summary Question: What is the expected IT market growth for 2026? - Management indicated a blended growth number of around 4% for the U.S. IT market, with internal growth expectations slightly higher [25][26] Question: Why is the company reducing headcount despite a healthy IT market? - The company is realizing efficiencies from system improvements and AI-driven productivity gains, leading to headcount reductions [27][28] Question: What was the cadence of sales during Q4? - There was a marked increase in December revenue, with over 38% of the quarter's revenue occurring in that month due to customers consuming budgets before year-end [33][34] Question: Were memory supply constraints an issue in Q4? - Management noted that while there were some price increases, memory supply constraints did not significantly affect Q4 results [35][36] Question: What are the expectations for operating margins going forward? - The company anticipates improved operating leverage and aims to reach operating margins closer to 3.7% to 3.9% by the end of the year [37][38]