Connection (PC Connection, Inc.; NASDAQ: CNXN),
an industry-leading national technology solutions provider of a full
range of information technology (IT) solutions to business, government,
and education markets, today announced results for the quarter ended
March 31, 2017. Net sales for the quarter ended March 31, 2017 increased
by 17.2% to $670.6 million, compared to $572.4 million for the prior
year quarter. Net income for the quarter ended March 31, 2017 decreased
by 18.0% to $7.4 million, or $0.28 per diluted share, compared to net
income of $9.1 million, or $0.34 per diluted share for the prior year
Earnings before interest, taxes, depreciation and amortization, adjusted
for stock-based compensation expense and rebranding, acquisition and
restructuring costs ("Adjusted EBITDA") totaled $92.1 million for the
twelve months ended March 31, 2017, compared to $90.8 million for the
twelve months ended March 31, 2016.
Quarterly Performance by Segment:
Quarterly Sales by Product Mix:
Overall gross profit increased by $4.5 million, or 5.5%, in the first
quarter of 2017, compared to the prior year quarter. Consolidated gross
margin, as a percentage of net sales, decreased to 12.9% in the first
quarter of 2017, compared to 14.4% for the prior year quarter.
Selling, general and administrative dollars increased in the first
quarter of 2017 to $75.3 million from $67.0 million in the prior year
quarter, with variable cost increasing due to higher levels of gross
profit. We also had three months of Softmart SG&A in the current
quarter. We continue to invest in technical solution sales capabilities
and expect SG&A expenses to rise accordingly. However, we are highly
focused on improving efficiencies and streamlining wherever possible.
The Company generated significant cash flow during the quarter ended
March 31, 2017. Total cash was $65.8 million at March 31, 2017, compared
to $49.2 million at December 31, 2016. During the quarter we paid a $9.0
million special dividend to shareholders. Days sales outstanding were 48
days at March 31, 2017, and inventory turns were 25 turns in the first
quarter of 2017.
"We are encouraged with the acceleration of our top line during the
quarter. We saw strong growth in software, networking communications,
workforce productivity, and services," said Tim McGrath, President and
Chief Executive Officer. "With this market share growth, we remain
focused on gross margin improvements, operating expense management, and
our strategic plan to help our customers solve their business challenges
with advanced technology solutions," concluded Mr. McGrath.
Non-GAAP Financial Information
Adjusted EBITDA is a non-GAAP financial measure. This information is
included to provide information with respect to the Company's operating
performance and earnings. Non-GAAP measures are not a substitute for
GAAP measures and should be considered together with the GAAP financial
measures. Our non-GAAP financial measures may not be comparable to other
similarly titled measures of other companies.
NASDAQ: CNXN), is the combined corporate brand name for PC Connection,
Inc., a Fortune 1000 company, along with its subsidiaries: PC Connection
Sales, GovConnection, and MoreDirect, reflecting the Company's mission
to connect people with technology that enhances growth, elevates
productivity, and empowers innovation. Headquartered in Merrimack, NH
with offices throughout the United States, the Company continues to
deliver custom-configured computer systems overnight from our ISO
9001:2008 certified technical configuration lab at our distribution
center in Wilmington, OH. In addition, the Company has over 2,500
technical certifications to ensure that we can solve the most complex
issues of our customers. Connection also services international
customers through its GlobalServe subsidiary, a global IT procurement
and service management company. Investors and media can find more
information about Connection at http://ir.pcconnection.com.
Connection - Business Solutions (800-800-5555), (the original business
of PC Connection,) operating through our PC Connection Sales Corp.
subsidiary, is a rapid-response provider of IT products and services
serving primarily the small- and medium-sized business sector. It offers
more than 300,000 brand-name products through its staff of technically
trained sales account managers, publications, and its website at www.connection.com.
Connection - Public Sector Solutions (800-800-0019), our GovConnection,
Inc. subsidiary, is a rapid-response provider of IT products and
services to federal, state, and local government agencies and
educational institutions through specialized account managers,
publications, and online at www.connection.com/publicsector.
Connection - Enterprise Solutions (561-237-3300), www.connection.com/enterprise,
our MoreDirect, Inc. subsidiary, provides corporate technology buyers
with best-in-class IT solutions, in-depth IT supply-chain expertise, and
access to over 300,000 products and 1,600 vendors through TRAXX™, a
proprietary cloud-based eProcurement system. The team's engineers,
software licensing specialists, and project managers help reduce the
cost and complexity of buying hardware, software, and services
throughout the entire IT lifecycle.
"Safe Harbor" Statement Under the Private Securities Litigation Reform
Act of 1995: This release contains forward-looking statements that are
based on currently available information, operating plans, and
projections about future events and trends. Terms such as "believe,"
"expect," "intend," "plan," "estimate," "anticipate," "may," "should,"
"will," or similar statements or variations of such terms are intended
to identify forward-looking statements, although not all forward-looking
statements include such terms. Forward-looking statements inherently
involve risks and uncertainties that could cause actual results to
differ materially from those predicted in such forward-looking
statements. Such risks and uncertainties, include, but are not limited
to, the impact of changes in market demand and the overall level of
economic activity and environment, or in the level of business
investment in information technology products, competitive products and
pricing, product availability and market acceptance, new products,
market acceptance of the Company's new branding, fluctuations in
operating results, the ability of the Company to manage personnel levels
in response to fluctuations in revenue, and other risks detailed in the
Company's filings with the Securities and Exchange Commission, including
under the caption "Risk Factors" in the Company's Annual Report on Form
10-K filed with the Securities and Exchange Commission for the year
ended December 31, 2016. More specifically, the statements in this
release concerning the Company's outlook for selling, general, and
administrative expenses, the Company's efforts in improving efficiencies
and streamlining its business and other statements of a non-historical
basis (including statements regarding the Company's ability to increase
market share and enhance long-term shareholder value, and integrate its
two acquisitions in an effective manner, and the Company's continuing
investments in technical solution sales capabilities) are
forward-looking statements that involve certain risks and uncertainties.
Such risks and uncertainties include the ability to realize market
demand for and competitive pricing pressures on the products and
services marketed by the Company, the continued acceptance of the
Company's distribution channel by vendors and customers, continuation of
key vendor and customer relationships and support programs, the ability
of the Company to gain or maintain market share, and the ability of the
Company to hire and retain qualified sales representatives and other
essential personnel. The Company assumes no obligation to update the
information in this press release or revise any forward-looking
statements, whether as a result of any new information, future events,
or otherwise, except as required by law.
(2) Acquisition, rebranding, and restructuring costs relate to our
2016 acquisitions, the re-branding of the Company to "Connection,"
severance related to internal restructuring, duplicate costs
incurred with the move of our Chicago-area facility, and in 2015,
duplicate costs incurred with the transition to our new
View source version on businesswire.com: http://www.businesswire.com/news/home/20170420006444/en/
[ Back To NFVZone's Homepage ]