UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
___________________________

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported):   August 1, 2013

 
Registrant’s telephone number, including area code:   (603) 683-2000

⃞ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

⃞ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

⃞ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

⃞ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02.  Results of Operations and Financial Condition

On August 1, 2013, PC Connection, Inc. announced its financial results for the quarter ended June 30, 2013.  The full text of the press release issued in connection with the announcement is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

The information in this Form 8-K (including Exhibit 99.1) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Item 9.01.  Financial Statements and Exhibits

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

EXHIBIT INDEX

Exhibit 99.1

PC Connection, Inc. Reports Second Quarter Results

SECOND QUARTER SUMMARY:

• Net sales: $557.3 million, up 2.7% year over year

• Operating margin increased to 2.8% of net sales

• Diluted earnings per share: $0.35, up 6.1% year over year

• Cash balance increased to $64 million, from $40 million at December 31, 2012

MERRIMACK, N.H.--(BUSINESS WIRE)--August 1, 2013--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 June 30, 2013. Net sales for the second quarter of 2013 were $557.3 million, an increase of 2.7% compared to $542.6 million for the second quarter of 2012. Net income for the quarter ended June 30, 2013 was $9.2 million, or $0.35 per share, compared to net income of $8.8 million, or $0.33 per share, for the corresponding prior year quarter.

Net sales for the six months ended June 30, 2013 were $1,062.7 million, an increase of $21.4 million or 2.1%, compared to $1,041.3 million for the six months ended June 30, 2012. Net income for the six months ended June 30, 2013 was $15.3 million, or $0.58 per share, compared to net income of $14.3 million, or $0.54 per share, for the six months ended June 30, 2012. Earnings before interest, taxes, depreciation and amortization, stock-based compensation expense, and special charges (“Adjusted EBITDA”) totaled $64.1 million for the twelve months ended June 30, 2013, as compared to $59.5 million for the twelve months ended June 30, 2012.

Quarterly Sales by Segment:

• Net sales for the SMB segment increased by 5.5% in the quarter to $242.2 million, compared to net sales in the second quarter of 2012. Net/com sales had the strongest growth during the quarter due to increased enterprise networking sales. SMB software sales also continue to be strong due to increased demand in security, virtualization, and operating systems software.
• Net sales for the Large Account segment of $196.2 million were relatively level compared to net sales in the second quarter of 2012. Growth in software and video, imaging, and sound sales was offset by declines in storage and net/com products. Commercial sales, which consists of SMB and Large Account sales, increased by 2.8% from the prior year quarter.
• Net sales to government and education customers (Public Sector segment) increased by 2.5% year over year to $118.9 million. Sales to state and local government and educational institutions increased by 11.3% compared to last year. Federal budget constraints led to a 22.2% decrease in federal government sales.

Net sales to healthcare customers, which are included in each of the three selling segments, increased 25% versus the prior year quarter.

Quarterly Sales by Product Mix:

• Notebook/tablet sales, the Company’s largest product category, decreased slightly by 1% year over year and accounted for 19% of net sales in the second quarter of 2013 and 2012. Large Account experienced a slight year-over-year increase in notebook/tablet sales which was more than offset by a decrease in SMB sales. Unit sales increased year over year, however the increase in volume was offset by a decline in average selling prices.
• Desktop/server sales accounted for 15% of net sales in the second quarter of 2013 and 2012. Revenues were very consistent versus prior year in each of the three segments.
• Software sales increased by 7% year over year, accounting for 16% of net sales in the second quarter of 2013 and 2012. We experienced strong growth in both our SMB and Large Account software sales.
• Net/Com Product sales increased by 8% year over year, accounting for 10% of net sales in the second quarter of 2013 and 2012. Strong growth in enterprise networking in the SMB segment contributed to the overall growth during the quarter.

Overall gross profit dollars increased by $2.3 million, or 3.3%, in the second quarter of 2013, compared to the prior year quarter. Consolidated gross margin, as a percentage of net sales, increased to 13.3% in the second quarter of 2013 compared to 13.2% in the prior year quarter.

Total selling, general and administrative expenses increased in dollars year over year, but remained flat as a percentage of net sales at 10.5% for the second quarter of 2013 and 2012. We are continuing to invest in solution sales capabilities and expect SG&A expenses to rise accordingly as the year progresses; however, we are highly focused on improving efficiencies and streamlining wherever possible.

The Company generated significant positive cash flow in the first half of 2013. Total cash was $64.2 million compared to $39.9 million at December 31, 2012. Days sales outstanding were 39 days at June 30, 2013 compared to 41 days at June 30, 2012, and inventory turns increased to 30 turns in the second quarter of 2013 compared to 28 turns in the prior year quarter.

“I am pleased with our results this quarter. We increased revenues, gross margin, operating margin, and earnings per share in a challenging environment. We had solid performance in our healthcare vertical that increased by 25%. We continue to transform our business to provide higher value technology solutions that help our customers solve their business challenges,” said Timothy McGrath, President and Chief Executive Officer. “We believe the strategies we have put in place will position us well to gain market share and enhance long-term shareholder value.”

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.

About PC Connection, Inc.

PC Connection, Inc., a Fortune 1000 company, has three sales companies: PC Connection Sales Corporation, MoreDirect, Inc., and GovConnection, Inc., headquartered in Merrimack, NH; Boca Raton, FL; and Rockville, MD; respectively. All three 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 users 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, publications, and online at www.govconnection.com.

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“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 and other costs 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, 2012. More specifically, the statements in this release concerning the Company’s outlook for selling, general, and administrative expenses in 2013, the Company’s anticipated product growth categories, and other statements of a non-historical basis (including statements regarding the Company’s ability to grow revenues, improve gross margins, increase market share, 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 gain or maintain market share, 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.

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CONTACT:
PC Connection, Inc.
Joseph Driscoll, 603-683-2322
Senior Vice President, Treasurer and Chief Financial Officer