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United States securities and exchange commission logo
August 31, 2022
Thomas Baker
Chief Financial Officer
PC Connection, Inc.
730 Milford Rd.
Merrimack, New Hampshire 03054
Re: PC Connection, Inc.
Form 10-K for the
Year Ended December 31, 2021
Filed March 14,
2022
Form 10-Q for the
Quarterly Period Ended June 30, 2022
Filed August 4,
2022
File No. 000-23827
Dear Mr. Baker:
We have limited our review of your filing to the financial
statements and related
disclosures and have the following comments. In some of our comments, we
may ask you to
provide us with information so we may better understand your disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to these comments, we may have additional comments.
Form 10-Q for the Interim Period Ended June 30, 2022
Management's Discussion and Analysis of Financial Condition and Results
of Operations
Results of Operations, page 15
1. You state changes in
customer and product mix affected your gross margin percentage.
Please expand your
disclosure to explain with more specificity why and how.
Liquidity and Capital Resources
Summary of Sources and Uses of Cash, page 22
2. Your disclosure appears
to focus on how net cash used in operating activities was derived
for each period as
presented in the statement of cash flows. Pursuant to Item 303 of
Regulation S-K, your
discussion should be an analysis of why operating cash changed
Thomas Baker
PC Connection, Inc.
August 31, 2022
Page 2
from period to period. That is, your analysis should be on the reasons
operating cash went
from cash provided of $31.8 million in 2021 to cash used of $8.4
million in 2022. In
performing your analysis, note that references to results, noncash
items and working
capital items may not provide a sufficient basis to understand how
operating cash actually
was affected between periods. For example, an increase in accounts
receivable due to an
increased level of sales as you cited does not appear to directly
change cash. Refer to the
introductory paragraph of section IV.B and paragraph B.1 of Release
No. 33-8350 for
guidance. Please revise your disclosure as appropriate.
3. We note your accounts receivable balance at June 30, 2022 is over 20%
of your net sales
for the twelve months ended the same date, and that it was just over
15% of annual net
sales at December 31, 2017. Please explain to us why the accounts
receivable balance has
become a larger percentage of your net sales. It appears your accounts
receivable has
been a consistent negative adjustment in arriving at your net cash
flows of operating
activities on a three months basis in each quarter from the quarter
ended September 30,
2020 through the quarter ended June 30, 2022. In connection with the
previous sentence
and along with the first sentence, please explain to us how your days
of sales outstanding
at December 31, 2021 and June 30, 2022 has decreased from the
respective corresponding
period ended amount.
In closing, we remind you that the company and its management are
responsible for the
accuracy and adequacy of their disclosures, notwithstanding any review,
comments, action or
absence of action by the staff.
You may contact Amy Geddes at 202-551-3304 or Doug Jones at 202-551-3309
with any
questions.
FirstName LastNameThomas Baker Sincerely,
Comapany NamePC Connection, Inc.
Division of
Corporation Finance
August 31, 2022 Page 2 Office of Trade &
Services
FirstName LastName