PC nection(US:CNXN)2025-10-29 20:05Financial Performance - Net sales for Q3 2025 were $709.1 million, a decrease of 2.2% year over year[6] - Net income decreased by 8.6% to $24.7 million, or $0.97 per diluted share, compared to $27.1 million, or $1.02 per diluted share, in Q3 2024[4] - Nine-month net sales increased by 3.7% year over year, with net income decreasing by 5.1% to $63.0 million[12] - Net sales for the three months ended September 30, 2025, were $709,068, a decrease of 2.3% compared to $724,717 in the same period of 2024[29] - Net income for the three months ended September 30, 2025, was $24,740, down from $27,059 in 2024, resulting in diluted earnings per share of $0.97 compared to $1.02[29] - Net income for Q3 2025 decreased by 9% to $24,740,000 compared to $27,059,000 in Q3 2024[33] - Adjusted Net Income for the nine months ended September 30, 2025, was $65,143,000, a slight decrease of 0% from $65,428,000 in the same period of 2024[36] - Diluted Earnings per Share for the nine months ended September 30, 2025, was $2.45, a decrease of 2% from $2.50 in the same period of 2024[36] Segment Performance - Business Solutions segment net sales increased by 1.7% to $256.8 million, with gross profit up 7.8% to $68.0 million and a gross margin of 26.5%[7] - Public Sector Solutions segment net sales decreased by 24.3% to $132.5 million, with gross profit down 12.4% to $22.8 million[8] - Enterprise Solutions segment net sales increased by 7.7% to $319.8 million, with gross profit up 3.4% to $47.8 million[8] Profitability Metrics - Gross profit increased by 2.4% to a record $138.6 million, with a gross margin of 19.6%, up 90 basis points year over year[4] - Gross profit for the three months ended September 30, 2025, was $138,645, representing a gross margin of 19.6%, compared to $135,406 and a gross margin of 18.7% in 2024[29] - EBITDA for Q3 2025 was $33,154,000, down 5% from $35,020,000 in Q3 2024[33] - Adjusted EBITDA for the last twelve months ended September 30, 2025, was $122,730,000, a slight decrease of 1% from $123,591,000 in the previous year[33] Expenses and Cash Flow - Selling, general and administrative expenses increased to $108.4 million, representing 15.3% of net sales, compared to 14.5% in the prior year[10] - Cash and cash equivalents and short-term investments were $399.2 million as of September 30, 2025, down from $442.6 million at the end of 2024[11] - Total current assets as of September 30, 2025, were $1,174,082, an increase from $1,166,850 as of December 31, 2024[30] - Total assets increased to $1,305,520 as of September 30, 2025, compared to $1,299,354 as of December 31, 2024[30] - Cash and cash equivalents at the end of the period were $187,845, up from $167,511 at the end of the same period in 2024[31] - Net cash provided by operating activities for the three months ended September 30, 2025, was $64,149, compared to $52,944 in 2024[31] Other Financial Metrics - The company reported severance expenses of $2,930 for the nine months ended September 30, 2025, compared to $415 in the same period of 2024[29] - Severance expenses for the nine months ended September 30, 2025, totaled $2,930,000, a significant increase of 606% from $415,000 in the same period of 2024[36] - The company experienced a decrease in interest income, netting $3,689 for the three months ended September 30, 2025, down from $4,837 in 2024[29] - Interest income decreased by 24% to $(3,737,000) in Q3 2025, compared to $(4,888,000) in Q3 2024[33] - Interest expense increased significantly by 153% to $162,000 in Q3 2025, compared to $64,000 in Q3 2024[33] - The company recorded a legal settlement income of $1,700,000 in Q3 2024, which was not repeated in Q3 2025[34]