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Actionable news in PCCC: PC Connection, Inc.,

Pc Connection, Inc. Reports Third Quarter 2015 Results THIRD QUARTER SUMMARY:

The following excerpt is from the company's SEC filing.

Highest quarterly net sales and net income in Company history

Net sales: $680.8 million, up 6.4% year over year

Diluted earnings per share: $0.49 versus $0.46 last year

Cash balance $76.9 million

(NASDAQ: PCCC)

, a national provider of a full range of information technology (IT) solutions to business, government, healthcare, and education markets, today announced record results for the quarter ended September 30, 2015. Net sales for the th ird quarter of 2015 increased by 6.4% to $680.8 million, compared to $639.6 million for the prior year quarter. Net income for the quarter ended September 30, 2015 increased to $13.0 million, or $0.49 per diluted share, compared to net income of $12.2 million, or $0.46 per diluted share for the prior year quarter. The Company’s results are compared to a very strong prior year quarter, which had revenue growth of 10% and net income growth of 15%.

Net sales for the nine months ended September 30, 2015 were $1,889.7 million, an increase of $57.1 million or 3.1%, compared to $1,832.6 million for the nine months ended September 30, 2014. Net income for the nine months ended September 30, 2015 increased by 8.1% to $33.2 million, or $1.25 per diluted share, compared to net income of $30.7 million, or $1.16 per diluted share, for the nine months ended September 30, 2014. Earnings before interest, taxes, depreciation and amortization, adjusted for stock-based compensation expense (“Adjusted EBITDA”) totaled $85.4 million for the twelve months ended September 30, 2015, compared to $76.7 million for the twelve months ended September 30, 2014.

Quarterly Sales by Segment

Net sales for the SMB segment increased by 5.6% to $268.7 million in the third quarter of 2015, compared to the prior year quarter. The increase was due to solid growth in Mobility, Networking, and Services.

Net sales for the Large Account segment increased by 20.2% to $242.8 million in the third quarter of 2015, compared to the prior year quarter. The increase was due to strong demand for solution-based projects from enterprise customers across a number of industries and vertical markets, including significant growth in Healthcare.

Net sales to the Public Sector segment decreased by 7.6% to $169.3 million in the third quarter of 2015, compared to the prior year quarter. This segment’s results compared to very strong 2014 numbers, as Public Sector grew 21% in Q3 of 2014.

Quarterly Sales by Product Mix

Notebook/mobility sales, the Company’s largest product category, increased by 16% year over year and accounted for 24% of net sales in the third quarter of 2015 compared to 22% of net sales in the prior year quarter. Mobility continues to be a strategic focus area for customers in each of our three segments.

Software sales increased by 4% year over year and accounted for 15% of net sales in the third quarter of 2015 compared to 16% of net sales in the prior year quarter. We experienced growth in cloud-based offerings, security, and virtualization.

We experienced sales growth in advanced solutions including Networking and Storage as we continue to focus on solving our customer’s most complex business issues with technology.

Overall gross profit increased by $4.9 million, or 5.9%, in the third quarter of 2015, compared to the prior year quarter. Consolidated gross margin, as a percentage of net sales, slightly decreased to 13.0% in the third quarter of 2015, compared to 13.1% for the prior year quarter.

Selling, general and administrative dollars increased in the third quarter of 2015 to $66.7 million from $63.2 million in the prior year quarter and improved as a percentage of net sales to 9.8% due to strict cost controls. Included in these totals were $0.5 million of start-up and transition costs related to our new advanced configuration and distribution center, which was operational at the end of the third 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 nine months ended September 30, 2015. Total cash was $76.9 million at September 30, 2015, compared to $60.9 million at December 31, 2014.

“The Company had record performance in both net sales and net income this quarter. We were able to increase sales and earnings, while making solid progress towards our Company goals as a leading National Solutions Provider connecting customers with technology solutions,” said Timothy McGrath, President and Chief Executive Officer. “We believe our team and the strategies we...


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