PC Connection Posts Higher Sales, Profit

By Jessica Davis  |  Print this article Print


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The national VAR saw particular strength in sales to large accounts, which grew to $132.5 million, 18 percent higher than in the same period last year.

PC Connection, a national VAR, posted higher net income based on higher fourth-quarter and full-year sales, with strength in large account sales. The company's share price was largely unaffected by the results, rising just 1 percent at closing on Jan. 26, a day after PC Connection announced its earnings.

The company, based in Merrimack, N.H., reported net sales of $432 million for the fourth quarter compared with $399 million for the same period a year ago. Net income for the quarter came in at $4.6 million compared with $11,000 for the same period a year ago, as special charges in 2005 stymied profits that year.

PC Connection reported net sales for the year of $1.64 billion compared with $1.44 billion for the previous year. Net income for the year registered at $13.8 million compared with $4.4 million for the previous year.

"We are pleased with the company's 2006 performance for both the fourth quarter and the year," Patricia Gallup, chairman and CEO of PC Connection, said in a statement. "We added significantly to the number of new and active accounts, improved gross margins, and increased our earnings per share."

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The company noted that in the fourth quarter, net sales for its SMB (small and midsize business) segment increased by 3.6 percent to $231.6 million compared with the same quarter in 2005. At the same time, net sales to large account customers increased by 18 percent to $132.5 million compared with the same quarter a year ago.

Networking and communications products grew by 24.9 percent year over year to 9.4 percent of net sales in the fourth quarter of 2006 due to an increase in infrastructure, switching and routing solutions sales. Sales of accessories and other products increased 11.6 percent year over year to 11 percent of net sales, due to higher attachment sales of services and companion products. Meanwhile, net sales to government and education customers increased by 8.1 percent to $67.9 million compared with the fourth quarter of 2005.

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Notebook and PDA sales stayed hot during the fourth quarter, accounting for 16.9 percent of net sales compared to 17.3 percent for the same period a year ago. Desktop computers and servers accounted for 14 percent of net sales in the fourth quarter of 2006 compared to 14.4 percent of net sales for the corresponding quarter the previous year. Video, imaging and sound accounted for 13.2 percent in the fourth quarter compared to 13.7 percent a year ago.

Jessica Davis covers the channel for eWeek and Channel Insider. Her technology journalism career began well before anyone heard of the World Wide Web and has included stints at Infoworld, Electronic News/EDN, and the Philadelphia Business Journal. Her work has also appeared on CNN and Forbes.com. She has covered hardware, software and networking, as well as the business side of technology. She has won several journalism awards, including a national ASBPE award for best staff-written column, and was named Marketing Computers hardest working tech journalist on their inaugural list of top tech journalists. Jessica can be reached at jessica.davis@ziffdavisenterprise.com

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