Niklas Bjorkman wrote: Firstly I agree with your conclusion. NewSQL takes the best of the traditional databases and NoSQL databases to combine the benefits of both worlds. I do not agree that NewSQL vendors focus on giving scale-out features to transactional data. The NewSQL market is focusing on giving true ACID support combined with extreme performance, stepping away from the traditional relational structures in databases. A lot of developers appreciate the ease of accessing data using SQL and I think we will see more and more databases supporting standard SQL.
As you said - NewSQL databases often maintain the...
PC Connection, Inc. (NASDAQ: PCCC), a provider of a full range of
information technology (IT) solutions to business, government, and
education markets, today announced results for the quarter ended
September 30, 2012. Net sales for the three months ended September 30,
2012 decreased by 2.5% year over year to $561.3 million. Overall gross
profit dollars for the quarter increased from $70.4 million to $72.2
million, or 2.5%, compared to the third quarter of 2011. Net income for
the quarter increased to $9.9 million, or $0.37 per share, compared to
net income of $9.4 million, or $0.35 per share, for the corresponding
prior year quarter.
Net sales for the nine months ended September 30, 2012 increased by
$52.5 million, or 3.4% to $1,602.6 million, compared to $1,550.1 million
for the nine months ended September 30, 2011. Net income for the nine
months ended September 30, 2012 increased to $24.2 million, or $0.91 per
share, compared to net income of $21.4 million, or $0.80 per share, for
the comparable prior year period. Excluding special charges, pro forma
net income for the nine months ended September 30, 2012 would have been
$24.9 million, or $0.93 per share, representing 16.3% growth over prior
year. We did not record any special charges for the nine months ended
September 30, 2011. Earnings before interest, taxes, depreciation and
amortization, stock-based compensation expense, and special charges
(“Adjusted EBITDA”) totaled $60.0 million for the twelve months ended
September 30, 2012, as compared to $54.3 million for the twelve months
ended September 30, 2011.
In the first quarter of 2012, we combined our consumer and small
office/home office (“SOHO”) sales company with our small- and
medium-sized business (SMB) segment. In order to facilitate comparison
with current period results, 2011 revenues and gross margins for the SMB
segment have been restated to include consumer and SOHO sales.
Quarterly Sales by Segment:
Net sales for the SMB business segment were $219.2 million in the
third quarter of 2012. Sales to small and medium businesses increased
by 2.2% year over year, however, when combined with lower consumer and
SOHO sales, overall sales for this segment decreased by 2.3%.
Net sales for the Large Account segment decreased by 6.7% to $192.8
million compared to net sales in the third quarter of 2011. The
decrease was due to two, large product roll-outs in the prior year
which totaled $36 million that did not repeat in 2012. However, gross
profit increased from $20.2 million to $22.3 million due to our
strategic focus on improving results through higher-margin sales.
Net sales to government and education customers (Public Sector
segment) increased year over year by 3.2% to $149.2 million. Sales to
state and local government and educational institutions increased by
4.1% compared to last year, and sales to the federal government
increased by 1.6% year over year due to higher contract sales.
Quarterly Sales by Product Mix:
Notebook sales, the Company’s largest product category, increased by
10.5% year over year and accounted for 19% of net sales in the third
quarter of 2012 compared to 17% of net sales in the prior year
quarter. The growth was attributable to both increased unit sales and
higher average selling prices.
Desktop/server sales decreased by 15.1% year over year, accounting for
15% of net sales in the third quarter of 2012 compared to 17% of net
sales in the prior year quarter. The decline in desktop sales was
primarily a result of the prior year Large Account rollouts which did
not repeat this quarter.
Software sales were unchanged, accounting for 15% of net sales in the
third quarter of 2012, compared to 14% in the prior year quarter.
Software sales increased in Large Account, and we experienced
increasing demand in virtualization and security.
Consolidated gross margin, as a percentage of net sales, increased year
over year by 63 basis points to 12.9% in the third quarter of 2012. As
our customers migrate to data center and advanced technology solutions,
we have experienced increased sales of higher margin products and
services.
Total selling, general and administrative expenses for the quarter
increased year over year by $1.4 million, or 2.5%, and increased as a
percentage of net sales from 9.4% for the third quarter of 2011 to 10.0%
for the third quarter of 2012. The percentage increase was primarily due
to lower year-over-year sales. Tight cost control management led to a
decline of $1.0 million in selling, general and administrative expenses
from the second quarter of 2012, which represents a decrease of 53 basis
points as a percentage of net sales. The Company is implementing a
Customer Master Data Management system to enhance our capabilities and
target additional selling opportunities which is scheduled to be placed
into service in 2013. This will conclude the first phase of a
comprehensive initiative to improve our internal IT infrastructure.
Depreciation expense for this asset is expected to add approximately
$2.0 million in SG&A expenses in 2013, which may increase our SG&A rates.
The Company generated significant positive cash flow in the nine months
ended September 30, 2012. Total cash was $53.5 million compared to $4.6
million at December 31, 2011. In addition, there were no amounts
outstanding on the Company’s line of credit at September 30, 2012,
compared to $5.3 million outstanding at December 31, 2011. Days sales
outstanding were 41 days at September 30, 2012, and inventory turns were
27 times as of September 30, 2012.
“During the quarter, we continued to strengthen our core and improve our
profitability while facing weaker demand as a result of macro-economic
uncertainty,” said Timothy McGrath, President and Chief Executive
Officer. “As reported throughout the industry, the soft IT market is
projected to continue throughout 2013. However, I am pleased with our
growth in both gross margin and earnings this quarter. We believe our
strong management team and business strategies have positioned us well
to enhance long-term shareholder value even in this challenging
marketplace.”
Non-GAAP Financial Information
Adjusted EBITDA, pro forma net income, and pro forma earnings per share
are non-GAAP financial measures. This information is included to provide
information with respect to the Company’s operating performance and
earnings. Reconciliations of Adjusted EBITDA, pro forma net income, and
pro forma earnings per share to GAAP net income are provided in tables
immediately following the Condensed Consolidated Statements of Income.
Conference Call and Webcast
The Company will host a conference call and live web cast today at 4:30
p.m. ET to discuss third quarter 2012 results of operations. To access
the conference call, please dial 877-776-4016 (US) or 973-638-3231
(International). The conference call will be available to the general
public on a live webcast (in listen only mode) on the Company’s website
at http://ir.pcconnection.com.
To access the replay of the call, please dial 800-585-8367 or
404-537-3406 and enter the access code 18834926.
About PC Connection, Inc.
PC Connection, Inc., a Fortune 1000 company, has four sales companies:
PC Connection Sales Corporation, MoreDirect, Inc., GovConnection, Inc.,
and Professional Computer Center, Inc. d/b/a ValCom Technology,
headquartered in Merrimack, NH, Boca Raton, FL, Rockville, MD, and
Itasca, IL, respectively. All four companies can deliver
custom-configured computer systems overnight from our ISO 9001:2008
certified technical configuration lab at our distribution center in
Wilmington, OH. Investors and media can find more information about PC
Connection, Inc. at http://ir.pcconnection.com.
PC Connection Sales Corporation (800-800-5555), the original business of
PC Connection, Inc. serving primarily the small- and medium-sized
business sector, is a rapid-response provider of IT products and
services. It offers more than 300,000 brand-name products through its
staff of technically trained sales account managers and telesales
specialists, catalogs, publications, and its website at www.pcconnection.com.
This company also serves consumer and small office and is, under its
MacConnection brand (800-800-2222), one of Apple’s largest authorized
online resellers at www.macconnection.com.
MoreDirect, Inc. (561-237-3300), www.moredirect.com,
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 cloud-based eProcurement system.
Backed by over 500 technical certifications, MoreDirect’s team of
engineers, software licensing specialists, and project managers help
reduce the cost and complexity of buying hardware, software, and
services throughout the entire IT lifecycle.
GovConnection, Inc. (800-800-0019) is a rapid-response provider of IT
products and services to federal, state, and local government agencies
and educational institutions through specialized account managers,
catalogs, and publications, and online at www.govconnection.com.
Professional Computer Center, Inc. d/b/a ValCom Technology
(630-285-0500), www.valcomtechnology.com,
provides technology services to medium-to-large corporate organizations
utilizing its proprietary cloud-based IT service management software,
WebSPOC™. Through its experienced technical service personnel, ValCom
Technology provides network, server, storage, mission-critical onsite
support, installation, and hosting of lifecycle services.
pccc-g
# # #
“Safe Harbor” Statement Under the Private Securities Litigation Reform
Act of 1995: This release contains forward-looking statements that are
subject to risks and uncertainties, including, but 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, fluctuations
in operating results, and the ability of the Company to manage personnel
levels in response to fluctuations in revenue, and other risks that
could cause actual results to differ materially from those detailed
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, 2011. More specifically, the statements in this
release concerning the Company’s outlook for gross margin and selling,
general, and administrative expenses in 2012 and other statements of a
non-historical basis (including statements regarding the Company’s
ability to grow revenues, improve gross margins, increase market share,
control costs, and increase earnings per share) 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 integrate the operations of ValCom Technology, the ability of the
Company to gain or maintain market share, the ability of the Company to
match cost levels with changes in revenues, and the ability of the
Company to hire and retain qualified sales representatives and other
essential personnel. The Company disclaims any 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.
CONSOLIDATED SELECTED FINANCIAL INFORMATION
At or for the Three Months Ended September 30,
2012
2011
% of
% of
%
(Amounts and shares in thousands, except operating data, P/E
ratio, and per share data)
Net Sales
Net Sales
Change
Operating Data:
Net sales
$
561,294
$
575,646
(2%)
Diluted earnings per share
$
0.37
$
0.35
6%
Gross margin
12.9%
12.2%
Operating margin
2.9%
2.8%
Return on equity (1)
13.6%
13.8%
Orders entered (2)
328,400
347,000
(5%)
Average order size (2)
$
2,045
$
2,003
2%
Inventory turns (1)
27
28
Days sales outstanding
41
41
Product Mix:
Notebook
$
108,474
19%
$
98,210
17%
10%
Desktop/Server
84,061
15
98,994
17
(15%)
Software
81,902
15
82,204
14
-
Net/Com Product
54,718
10
56,627
10
(3%)
Video, Imaging and Sound
51,907
9
64,552
11
(20%)
Printer and Printer Supplies
41,227
7
40,691
7
1%
Storage
37,090
7
39,266
7
(6%)
Memory and System Enhancement
18,829
3
17,745
3
6%
Accessory/Other
83,086
15
77,357
14
7%
Total Net Sales
$
561,294
100%
$
575,646
100%
(2%)
Net Sales of Enterprise Server and Networking Products (included
in the above Product Mix):
$
194,493
35%
$
200,580
35%
(3%)
Stock Performance Indicators:
Actual shares outstanding
26,463
26,309
Total book value per share
$
11.28
$
10.49
Tangible book value per share
$
9.18
$
8.34
Closing price
$
11.51
$
7.98
Market capitalization
$
304,589
$
209,946
Pro forma trailing price/earnings ratio
9.5
7.5
LTM Adjusted EBITDA (3)
$
60,001
$
54,282
Market capitalization/LTM EBITDA
5.1
3.9
(1) Annualized
(2) Does not reflect cancellations or returns
(3) Adjusted EBITDA is defined as EBITDA (earnings before
interest, taxes, depreciation and amortization) adjusted for
stock-based compensation and special charges.
REVENUE AND MARGIN INFORMATION
For the Three Months Ended September 30,
2012
2011
Net
Gross
Net
Gross
(amounts in thousands)
Sales
Margin
Sales
Margin
SMB
$
219,235
15.4
%
$
224,453
15.6
%
Large Account
192,818
11.5
206,564
9.8
Public Sector
149,241
10.8
144,629
10.5
Total
$
561,294
12.9
%
$
575,646
12.2
%
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended September 30,
2012
2011
(amounts in thousands, except per share data)
Amount
% of Net Sales
Amount
% of Net Sales
Net sales
$
561,294
100.0
%
$
575,646
100.0
%
Cost of sales
489,088
87.1
505,210
87.8
Gross profit
72,206
12.9
70,436
12.2
Selling, general and administrative expenses
55,906
10.0
54,554
9.4
Income from operations
16,300
2.9
15,882
2.8
Interest expense, net
(63
)
-
(61
)
-
Income tax provision
(6,336
)
(1.1
)
(6,435
)
(1.2
)
Net income
$
9,901
1.8
%
$
9,386
1.6
%
Earnings per common share:
Basic
$
0.37
$
0.35
Diluted
$
0.37
$
0.35
Weighted average common shares outstanding:
Basic
26,470
26,615
Diluted
26,660
26,692
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Nine Months Ended September 30,
2012
2011
(amounts in thousands, except per share data)
Amount
% of Net Sales
Amount
% of Net Sales
Net sales
$
1,602,626
100.0
%
$
1,550,133
100.0
%
Cost of sales
1,392,238
86.9
1,353,984
87.4
Gross profit
210,388
13.1
196,149
12.6
Selling, general and administrative expenses
169,259
10.5
160,321
10.3
Special charges
1,135
0.1
-
-
Income from operations
39,994
2.5
35,828
2.3
Interest expense, net
(110
)
-
(92
)
-
Income tax provision
(15,682
)
(1.0
)
(14,376
)
(0.9
)
Net income
$
24,202
1.5
%
$
21,360
1.4
%
Earnings per common share:
Basic
$
0.92
$
0.80
Diluted
$
0.91
$
0.80
Weighted average common shares outstanding:
Basic
26,437
26,788
Diluted
26,586
26,860
A RECONCILIATION BETWEEN GAAP AND PRO FORMA NET INCOME
Nine Months Ended September 30,
2012
2011
(provided for comparison of our operating results without special
charges, amounts in thousands)
GAAP net income
$
24,202
$
21,360
Special charges (after tax)
681
-
Pro forma net income
$
24,883
$
21,360
Pro forma diluted earnings per common share
$
0.93
$
0.80
EBITDA AND ADJUSTED EBITDA
A reconciliation of EBITDA and Adjusted EBITDA is detailed below.
EBITDA is defined as earnings before interest, taxes, depreciation,
and amortization. Adjusted EBITDA means EBITDA adjusted for certain
items which are described in the table below. Both EBITDA and
Adjusted EBITDA are considered non-GAAP financial measures.
Generally, a non-GAAP financial measure is a numerical measure of a
company’s performance, financial position, or cash flows that either
excludes or includes amounts that are not normally included or
excluded in the most directly comparable measure calculated and
presented in accordance with GAAP. We believe that EBITDA and
Adjusted EBITDA provide helpful information with respect to our
operating performance including our ability to fund our future
capital expenditures and working capital requirements. Adjusted
EBITDA also provides helpful information as it is the primary
measure used in certain financial covenants contained in our credit
agreements.
(amounts in thousands)
Three Months Ended September 30,
LTM Ended September 30, (1)
2012
2011
% Change
2012
2011
% Change
Net income
$
9,901
$
9,386
$
31,629
$
28,238
Depreciation and amortization
1,670
1,484
6,429
5,650
Income tax expense
6,336
6,435
19,950
19,045
Interest expense, net
63
61
198
223
EBITDA
17,970
17,366
58,206
53,156
Stock-based compensation
157
258
1,502
1,126
Other special charges
-
-
293
-
Adjusted EBITDA
$
18,127
$
17,624
3
%
$
60,001
$
54,282
10
%
(1) LTM: Last twelve months
September 30,
December 31,
CONDENSED CONSOLIDATED BALANCE SHEETS
2012
2011
(amounts in thousands)
ASSETS
Current Assets:
Cash and cash equivalents
$
53,528
$
4,615
Accounts receivable, net
270,308
295,188
Inventories
65,478
77,437
Prepaid expenses and other current assets
3,880
4,713
Deferred income taxes
3,398
4,436
Income taxes receivable
1,899
1,927
Total current assets
398,491
388,316
Property and equipment, net
25,399
22,570
Goodwill
51,276
51,276
Other intangibles, net
4,403
5,205
Other assets
734
652
Total Assets
$
480,303
$
468,019
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Current maturities of capital lease obligation to affiliate
$
1,055
$
971
Borrowings under bank line of credit
-
5,267
Accounts payable
128,460
130,900
Accrued expenses and other liabilities
25,182
30,902
Accrued payroll
14,384
12,964
Total current liabilities
169,081
181,004
Deferred income taxes
9,511
9,026
Other liabilities
3,042
3,471
Capital lease obligation to affiliate, less current maturities
187
989
Total Liabilities
181,821
194,490
Stockholders’ Equity:
Common stock
277
276
Additional paid-in capital
101,363
99,957
Retained earnings
206,476
182,274
Treasury stock at cost
(9,634
)
(8,978
)
Total Stockholders’ Equity
298,482
273,529
Total Liabilities and Stockholders’ Equity
$
480,303
$
468,019
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended September 30,
2012
2011
(amounts in thousands)
Cash Flows from Operating Activities:
Net income
$
24,202
$
21,360
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization
4,851
4,375
Provision for doubtful accounts
1,453
1,765
Deferred income taxes
1,523
1,933
Stock-based compensation expense
1,376
698
Loss on disposal of fixed assets
80
13
Income tax benefit from stock-based compensation
213
68
Excess tax benefit from exercise of stock options
(15
)
-
Fair value adjustment to contingent consideration
(44
)
(20
)
Changes in assets and liabilities:
Accounts receivable
23,427
(30,407
)
Inventories
11,959
1,617
Prepaid expenses and other current assets
861
1,786
Other non-current assets
(82
)
(157
)
Accounts payable
(2,398
)
22,100
Accrued expenses and other liabilities
(3,725
)
(2,761
)
Net cash provided by operating activities
63,681
22,370
Cash Flows from Investing Activities:
Purchases of property and equipment
(7,010
)
(8,483
)
Proceeds from sale of equipment
10
-
Acquisition of ValCom Technology, net of cash acquired
-
(4,745
)
Purchase of intangible asset
-
(450
)
Net cash used for investing activities
(7,000
)
(13,678
)
Cash Flows from Financing Activities:
Repayment of short-term borrowings
(12,471
)
-
Proceeds from short-term borrowings
7,204
-
Purchase of treasury shares
(1,466
)
(3,823
)
Payment of contingent consideration
(960
)
-
Payment of payroll taxes on stock-based compensation through shares
withheld
(504
)
(206
)
Repayment of capital lease obligation to affiliate
(718
)
(643
)
Issuance of stock under Employee Stock Purchase Plan
260
183
Exercise of stock options
872
183
Excess tax benefit from exercise of stock options
15
-
Net cash used for financing activities
(7,768
)
(4,306
)
Increase in cash and cash equivalents
48,913
4,386
Cash and cash equivalents, beginning of period
4,615
35,374
Cash and cash equivalents, end of period
$
53,528
$
39,760
Non-cash Investing and Financing Activities:
Issuance of nonvested stock from treasury
$
1,314
$
633
Accrued capital expenditures
388
746
Contingent consideration recorded in accrued expenses and other
liabilities
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Our more interconnected planet is accelerating the adoption and convergence of next-generation architectures, in the form of cloud, mobile and instrumented physical assets. Organizations that can effectively balance optimization and innovation, will be in a position to leverage new sys...
“Trust is an ongoing journey and sits at the foundation of any vendor relationship – the companies that don’t consistently earn trust won’t be around long,” noted Henrik Rosendahl, Senior VP of Cloud Solutions at Quantum, in this exclusive Q&A with Cloud Expo Conference Chair Jeremy Ge...
A recent study by analyst firm IDC reports that in 2012, 1.7 million cloud computing-related roles across the globe could not be filled due to the lack of training, certification and experience in the applicant pool. As the global demand for cloud and big data expertise increases, empl...
There’s an inherent sense of almost forced innovation that appears to pervade the information technology industry. As we constantly push forward into perpetual cycles of reinvention, continual enhancement and augmentation after augmentation, one almost has to stop and ask what’s wrong ...
New technologies allow schools, colleges and universities to analyze absolutely everything that happens. From student behavior, testing results, career development of students as well as educational needs based on changing societies. A lot of this data has already been stored and is us...
