PC Connection Relishes Best Quarter In Company’s History
Although last year's same quarter was tough to beat, PC Connection flew past expectations to record its best quarter in both revenue and earnings, the solution provider said Thursday.
The Merrimack, N.H.-based company -- No. 20 on CRN’s 2015 Solution Provider 500 -- reported $681 million in revenue, a 6.4 percent increase over the same quarter in 2014, plus earnings of $13 million, up 6.5 percent.
CEO Timothy McGrath said the numbers surpassed expectations because the third quarter of 2014 was exceptionally good. Back then, he said, the company saw growth that was significantly above industry rates. Revenue grew 10 percent while earnings surged 15 percent.
[Related: PC Connection Beats Wall Street's Profit Forecast Despite Public Sector, Desktop Sales Declines]
"We are pleased with our strong third-quarter performance,’ said McGrath, adding that the growth was led by the company's largest accounts.
Growth from the large account segments represented a jump of 20 percent year over year, to $243 million, and was spread across security, cloud services, data center virtualization and converged infrastructure solutions, McGrath said. He added that because PC Connection focused on consolidating the fragmented IT market, it was able to capitalize on the need for all of those solutions.
CFO Joe Driscoll said the company’s federal, state and K-12 education segments didn’t see growth during the quarter because of a focus on higher education and large federal project rollouts coming later than expected.
Driscoll added that thanks to the company's growth in other verticals such as health care -- which jumped 37 percent year over year -- the company's top line was still outpaced by the bottom line and exceeded expectations.
The solution provider will continue to assess merger and acquisition opportunities, along with capital allocations such as dividends and stock buy-backs, Driscoll said. He added that PC Connection still has $17.8 million remaining in previously authorized share repurchases.
McGrath said that, looking forward, the company expects moderate growth for the industry as desktop PCs and related sales decrease, opening potential sales for notebooks and other mobile devices.
"PC Connection has set a goal to continue to outpace the market," he said, by continuing to consolidate the fragmented market of IT and focusing on the complexities of the market to help customers drive business through their investments.
"Our business model is more relevant than ever as technology is more complex and more disruptive than ever," McGrath said.
PUBLISHED OCT. 29, 2015