MERRIMACK, N.H.--(BUSINESS WIRE)--Connection (PC Connection, Inc.; NASDAQ: CNXN), a leading information technology solutions provider to business, government, healthcare, and education markets, is pleased to announce that it has once again been named to the Forbes America’s Best Employers list. Connection ranked #13 out of 400 organizations on the 2024 list of America’s Best Midsize Employers, climbing higher in the rankings from its #88 spot in 2023. Tim McGrath, President and CEO of Connection said, “It’ ...

PC Connection, Inc. (NASDAQ:CNXN) Q4 2023 Earnings Conference Call February 14, 2024 4:30 PM ET Company Participants Samantha Smith - Investor Relations Timothy McGrath - President and Chief Executive Officer Thomas Baker - Senior Vice President, Chief Financial Officer, and Treasurer Conference Call Participants Anthony Lebiedzinski - Sidoti & Company Adam Tindle - Raymond James Operator Good afternoon, and welcome to the Fourth Quarter 2023 Connection's Earnings Conference Call. My name is Justin, and I w ...

PC Connection, Inc. (NASDAQ:CNXN) Q3 2023 Earnings Conference Call November 1, 2023 4:30 PM ET Company Participants Samantha Smith - Investor Relations Timothy McGrath - President and Chief Executive Officer Thomas Baker - Senior Vice President, Chief Financial Officer, and Treasurer Conference Call Participants Anthony Lebiedzinski - Sidoti & Company, LLC Jake Norrison - Raymond James Operator Good afternoon, and welcome to the Third Quarter Connections Earnings Conference Call. My name is James, and I wil ...

Financial Performance - Net sales for Q3 2023 were $693,086, a decrease of 10.6% compared to $775,692 in Q3 2022[16] - Gross profit for Q3 2023 was $131,888, down from $136,626 in Q3 2022, reflecting a gross margin of 19.0%[16] - Net income for Q3 2023 increased to $25,598, compared to $23,206 in Q3 2022, representing a growth of 10.3%[18] - Basic earnings per share for Q3 2023 were $0.97, up from $0.88 in Q3 2022, indicating a year-over-year increase of 10.2%[16] - Total income before taxes for Q3 2023 was $34,710, compared to $32,047 in Q3 2022, marking an increase of 8.3%[16] - Comprehensive income for Q3 2023 was $25,752, compared to $23,206 in Q3 2022, reflecting an increase of 11.1%[18] - Net income for the nine months ended September 30, 2023, was $59,493,000, a decrease of 15.4% compared to $70,396,000 for the same period in 2022[22] - For the nine months ended September 30, 2023, total net sales were $2,154.2 million, a decrease of $238.3 million or 10.0% compared to $2,392.5 million in the prior year[120] Expenses and Charges - The company reported restructuring and other charges of $44 in Q3 2023, while there were no such charges in Q3 2022[16] - The company recorded restructuring and other charges of $2,687,000 for the nine months ended September 30, 2023, primarily related to workforce reductions[32] - SG&A expenses for Q3 2023 decreased by $5.1 million, or 4.8%, to $99.8 million, with SG&A as a percentage of net sales increasing to 14.4% from 13.5%[87] - Selling, general and administrative (SG&A) expenses for the nine months ended September 30, 2023, decreased in dollars but increased as a percentage of net sales, with total SG&A expenses at $304.1 million, reflecting a 0.4% decrease year-over-year[129] Cash Flow and Investments - Net cash provided by operating activities increased significantly to $185,665,000 for the nine months ended September 30, 2023, compared to $15,689,000 for the same period in 2022[22] - Cash and cash equivalents at the end of the period were $240,509,000, up from $116,190,000 at the end of September 30, 2022[22] - Cash provided by operating activities was $185.7 million for the nine months ended September 30, 2023, significantly higher than $15.7 million for the same period in 2022[152] - Cash used in investing activities for the nine months ended September 30, 2023 was $48.7 million for U.S. Government treasury securities and $7.4 million for property and equipment, compared to $7.0 million in the prior year period[158] Segment Performance - Business Solutions segment generated $732,231 in sales for the nine months ended September 30, 2023, compared to $893,083 in the same period of 2022, reflecting a decrease of about 18%[48] - The Company’s Accessories segment sales for the nine months ended September 30, 2023, were $245,317, compared to $299,113 in the same period of 2022, reflecting a decline of approximately 18%[48] - The Software segment reported sales of $225,483 for the nine months ended September 30, 2023, compared to $218,981 in the same period of 2022, indicating a growth of about 3%[48] - Enterprise Solutions segment net sales were $276.6 million, a decrease of $28.9 million or 9.5%, primarily due to declines in accessories, software, and desktops[102] - Public Sector Solutions segment net sales increased by $35.2 million or 8.1%, driven by a $42.3 million increase in federal government sales[124] Challenges and Future Outlook - The company faced challenges including increased shipping costs and potential service interruptions from third-party shippers, which could impact margins[12] - Future investments in IT products may be affected by macroeconomic factors such as rising inflation and changing interest rates[12] - The company is evaluating additional restructuring activities for the fourth quarter of 2023 and beyond[32] - The company expects to continue its strategic initiatives, including potential new product offerings and market expansions, although specific details were not provided[72] Balance Sheet and Financial Ratios - Total assets as of September 30, 2023, were $1,181,427, an increase from $1,134,125 as of September 30, 2022[64] - The Company had no outstanding borrowings under its $50,000 credit facility as of September 30, 2023, indicating full availability for future borrowings[70] - The funded debt ratio must not exceed 2.0 to 1.0, and as of September 30, 2023, there were no outstanding borrowings, thus not limiting potential borrowings[167] - Minimum consolidated net worth requirement was calculated at $591.2 million as of September 30, 2023, while actual consolidated stockholders' equity was $819.2 million[168]

PC Connection, Inc. (NASDAQ:CNXN) Q2 2023 Earnings Conference Call August 2, 2023 5:00 PM ET Company Participants Samantha Smith - Investor Relations Tim McGrath - President and Chief Executive Officer Tom Baker - Chief Financial Officer Conference Call Participants Anthony Lebiedzinski - Sidoti Operator Good day and thank you for standing by. Welcome to the PC Connection Second Quarter 2023 Earnings Conference Call. [Operator Instructions] Please be advised that today’s conference is being recorded. I woul ...

PART I FINANCIAL INFORMATION [ITEM 1. FINANCIAL STATEMENTS](index=4&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) Unaudited statements show year-over-year declines in revenue and net income for Q2 and H1 2023, though assets and operating cash flow improved [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2023, total assets increased to $1.16 billion, driven by a rise in cash, while stockholders' equity also grew Balance Sheet Highlights | Balance Sheet Highlights | June 30, 2023 ($ thousands) | December 31, 2022 ($ thousands) | | :--- | :--- | :--- | | **Total Current Assets** | 1,021,933 | 953,792 | | Cash and cash equivalents | 243,983 | 122,930 | | Inventories, net | 159,734 | 208,682 | | **Total Assets** | **1,164,275** | **1,099,826** | | **Total Current Liabilities** | 347,305 | 310,517 | | **Total Liabilities** | 370,155 | 333,651 | | **Total Stockholders' Equity** | **794,120** | **766,175** | [Condensed Consolidated Statements of Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Net sales and net income declined in both the second quarter and first six months of 2023 compared to the prior year Q2 Income Statement | Income Statement (Q2) | Three Months Ended June 30, 2023 ($ thousands) | Three Months Ended June 30, 2022 ($ thousands) | | :--- | :--- | :--- | | Net sales | 733,547 | 828,509 | | Gross profit | 127,777 | 136,901 | | Income from operations | 25,071 | 34,770 | | Net income | 19,697 | 25,398 | | Diluted EPS | $0.75 | $0.96 | H1 Income Statement | Income Statement (H1) | Six Months Ended June 30, 2023 ($ thousands) | Six Months Ended June 30, 2022 ($ thousands) | | :--- | :--- | :--- | | Net sales | 1,461,092 | 1,616,853 | | Gross profit | 250,073 | 265,207 | | Income from operations | 43,188 | 64,905 | | Net income | 33,895 | 47,190 | | Diluted EPS | $1.28 | $1.79 | [Condensed Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Stockholders' equity increased to $794.1 million, driven by net income which offset stock repurchases and dividend payments - For the six months ended June 30, 2023, total stockholders' equity **increased by $27.9 million**, from $766.2 million to $794.1 million[19](index=19&type=chunk) - Key activities impacting equity in H1 2023 included **net income of $33.9 million**, **stock repurchases of $5.4 million**, and **dividend declarations of $4.2 million**[19](index=19&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) The company generated strong operating cash flow of $135.4 million in H1 2023, a significant reversal from the cash used in H1 2022 H1 Cash Flow Summary | Cash Flow Summary (H1) | Six Months Ended June 30, 2023 ($ thousands) | Six Months Ended June 30, 2022 ($ thousands) | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | 135,445 | (8,395) | | Net cash used in investing activities | (4,860) | (4,565) | | Net cash used in financing activities | (9,532) | (454) | | **Increase (decrease) in cash** | **121,053** | **(13,414)** | [Notes to Unaudited Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Notes detail accounting policies, segment performance, and restructuring charges related to a workforce reduction - The company recorded **restructuring charges of $1.7 million for Q2 2023** and **$2.6 million for H1 2023**, primarily related to an involuntary reduction in its headquarter workforce[27](index=27&type=chunk)[28](index=28&type=chunk)[29](index=29&type=chunk) - The company has a **$50 million credit facility** that expires in March 2025, which can be increased to $80 million, and as of June 30, 2023, there were **no outstanding borrowings**[58](index=58&type=chunk)[59](index=59&type=chunk) Net Sales by Segment (H1 2023) | Net Sales by Segment (H1 2023) | Amount ($ thousands) | | :--- | :--- | | Business Solutions | 534,141 | | Enterprise Solutions | 601,096 | | Public Sector Solutions | 325,855 | | **Total net sales** | **1,461,092** | Operating Income by Segment (H1 2023) | Operating Income by Segment (H1 2023) | Amount ($ thousands) | | :--- | :--- | | Business Solutions | 35,384 | | Enterprise Solutions | 14,033 | | Public Sector Solutions | 1,679 | | Headquarters/Other | (7,908) | | **Total operating income** | **43,188** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses a challenging quarter with decreased net sales, improved gross margin, and strong liquidity [Results of Operations](index=24&type=section&id=Results%20of%20Operations) Q2 and H1 2023 sales declined due to weakness in notebooks, though the Public Sector segment grew and gross margin percentage improved - The company incurred **restructuring charges of $1.7 million in Q2 2023** and **$2.6 million in H1 2023** related to workforce reductions, with no similar charges in 2022[82](index=82&type=chunk)[84](index=84&type=chunk) Key Metrics (Q2 2023 vs Q2 2022) | Key Metrics (Q2 2023 vs Q2 2022) | Q2 2023 | Q2 2022 | | :--- | :--- | :--- | | Net Sales | $733.5M | $828.5M | | Gross Margin % | 17.4% | 16.5% | | SG&A % of Sales | 13.8% | 12.3% | | Income from Operations % | 3.4% | 4.2% | Net Sales Change by Segment (Q2 2023 vs Q2 2022) | Net Sales Change by Segment (Q2 2023 vs Q2 2022) | $ Change (M) | % Change | | :--- | :--- | :--- | | Enterprise Solutions | $(61.8) | (17.7)% | | Business Solutions | $(67.4) | (20.5)% | | Public Sector Solutions | $34.2 | 22.6% | | **Total** | **$(95.0)** | **(11.5)%** | [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains a strong liquidity position with $244.0 million in cash, an undrawn credit facility, and an improved cash conversion cycle - As of June 30, 2023, the company had **$244.0 million in cash and cash equivalents** and **no outstanding borrowings** under its $50.0 million credit facility[128](index=128&type=chunk)[130](index=130&type=chunk) - The company declared and paid two quarterly cash dividends of **$0.08 per share** in H1 2023 and another $0.08 dividend was declared on August 2, 2023[134](index=134&type=chunk) Cash Conversion Cycle (in days) | Cash Conversion Cycle (in days) | June 30, 2023 | June 30, 2022 | | :--- | :--- | :--- | | Days of sales outstanding (DSO) | 68 | 66 | | Days of supply in inventory (DIO) | 24 | 29 | | Days of purchases outstanding (DPO) | (42) | (37) | | **Cash conversion cycle** | **50** | **58** | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=41&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes to market risks are reported since the year-end 2022 disclosure - **No material changes** related to market risks have occurred since December 31, 2022[157](index=157&type=chunk) [Item 4. Controls and Procedures](index=42&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2023, with no material changes to internal controls - Management concluded that as of June 30, 2023, the company's **disclosure controls and procedures were effective**[159](index=159&type=chunk) - **No changes in internal control over financial reporting** occurred during the quarter that materially affected, or are reasonably likely to materially affect, these controls[160](index=160&type=chunk) PART II OTHER INFORMATION [Item 1. Legal Proceedings](index=43&type=section&id=Item%201.%20Legal%20Proceedings) Ongoing legal proceedings from the ordinary course of business are not expected to have a material adverse effect - The outcomes of ordinary course legal proceedings and claims are **not expected to have a material, adverse effect** on the Company's financial position, results of operations, and/or cash flows[55](index=55&type=chunk)[163](index=163&type=chunk) [Item 1A. Risk Factors](index=43&type=section&id=Item%201A.%20Risk%20Factors) A new risk factor has been identified concerning the company's use of artificial intelligence and machine learning technologies - A **new risk factor** has been introduced regarding the use of artificial intelligence and machine learning, citing potential negative impacts from incorrectly designed models, regulatory scrutiny, and ethical concerns[164](index=164&type=chunk)[165](index=165&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=44&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased approximately $2.0 million of its common stock in Q2 2023, with $32.3 million remaining under its buyback program - The company's board has authorized an aggregate of $80.0 million for its stock repurchase program, and as of June 30, 2023, **$32.3 million was still available** for repurchases[169](index=169&type=chunk) Stock Repurchases (Q2 2023) | Stock Repurchases (Q2 2023) | Value | | :--- | :--- | | Total Shares Purchased | 49,538 | | Average Price Paid Per Share | $39.75 | | Total Cost (approx.) | $2.0 million | [Item 5. Other Information](index=44&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated Rule 10b5-1 trading agreements during the second quarter of 2023 - **No directors or officers** adopted or terminated a Rule 10b5-1 trading agreement during the second quarter of 2023[170](index=170&type=chunk) [Item 6. Exhibits](index=45&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the report, including officer certifications and interactive data files - Exhibits filed include the Fourth Amendment to the Credit and Security Agreement, certifications by the CEO and CFO pursuant to Sarbanes-Oxley Sections 302 and 906, and Inline XBRL documents[172](index=172&type=chunk)[173](index=173&type=chunk)

PC Connection, Inc. (NASDAQ:CNXN) Q1 2023 Earnings Conference Call May 4, 2023 4:30 PM ET Company Participants Timothy McGrath - President and Chief Executive Officer Thomas Baker - Senior Vice President and Chief Financial Officer Conference Call Participants Anthony Lebiedzinski - Sidoti & Company Jake Norrison - Raymond James Operator Good afternoon and welcome to the First Quarter 2023 Connection Earnings Conference Call. At this time, all participants are in listen-only mode. Following the prepared rem ...

101.INS ** Inline XBRL Instance Document* - The Instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document. 101.SCH** Inline XBRL Taxonomy Extension Schema Document. 101.CAL** Inline XBRL Taxonomy Calculation Linkbase Document. 101.DEF** Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB** Inline XBRL Taxonomy Label Linkbase Document. 101.PRE** Inline XBRL Taxonomy Presentation Linkbase Document. 104 ** Cover Page Intera ...

● various franchisers, office supply superstores, and national computer retailers, such as Office Depot and Staples; and INTELLECTUAL PROPERTY RIGHTS Our Public Sector Solutions segment is heavily regulated and, as a result, our need for compliance awareness and business and employee support is significant. Specifically, our Public Sector Solutions segment is governed by various laws and regulations, including but not limited to laws and regulations relating to: the formation, administration, and performanc ...

Financial Data and Key Metrics Changes - Gross profit declined 2.1% to $124.3 million in Q4 2022, but gross margins increased by 110 basis points to 17% compared to Q4 2021, reflecting a shift in product mix [13][14] - For the full year 2022, net sales increased by 8% to $3.1 billion, gross profit grew by 13.3% to $526.2 million, and diluted earnings per share rose by 27.2% to $3.37 compared to 2021 [14] - Q4 operating income was $23.9 million, down 23.6% from $31.3 million a year ago, with net income decreasing by 15.9% to $18.8 million [29][44] Business Line Data and Key Metrics Changes - In the Enterprise Solutions segment, Q4 net sales were $334.5 million, a decrease of 8.9% from $367.3 million a year ago, while gross profit decreased by 6.2% to $47.3 million [16] - The Business Solutions segment reported Q4 net sales of $280.7 million, down 7.5% from $303.5 million, but gross profit increased by 3.6% to $60 million [30] - Public Sector Solutions saw Q4 net sales of $117.3 million, a decrease of 9.4%, with federal government sales increasing by 46% year-over-year [31] Market Data and Key Metrics Changes - The endpoint device categories experienced a nearly 15% decline in revenue as customers shifted priorities and became more cautious with IT spending [28] - The finance vertical market revenue grew by 13% year-over-year, while retail revenue increased by 11% year-over-year [32] Company Strategy and Development Direction - The company’s strategy focuses on aligning with shifting customer dynamics in technology deployment, emphasizing advanced technology solutions and integrated services [12][27] - The company aims to improve operational efficiency and manage costs while investing in technical resources to support customer needs [33][46] Management Comments on Operating Environment and Future Outlook - Management noted that customers are being more deliberate in spending due to economic uncertainty, with expectations for endpoint device demand to remain challenged in the first half of 2023 [36][42] - There is optimism regarding growth in advanced technology investments, particularly in the federal sector, with expectations for a return to growth in the second half of 2023 [20][42] Other Important Information - The company announced a $25 million increase in its stock repurchase program and a quarterly dividend of $0.08 per share [34] - Cash flow from operations decreased to $34.9 million from $57.8 million year-over-year, attributed to an increase in accounts receivable [18][45] Q&A Session Summary Question: Are there meaningful customer cancellations or postponements for IT projects? - Management indicated that while the economic backdrop affects enterprise customers, there have not been significant cancellations, although some projects have been delayed [48] Question: Is there any meaningful pricing pressure expected? - Management noted that while there have been supplier price increases, they have successfully passed these on to customers without facing significant pricing pressure [49] Question: How is the PC cycle expected to play out this year? - Management expects the slowdown in device demand to continue in the first half of 2023, with a return to normal upgrade cycles anticipated in the second half [51]