UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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) November 15, 2005
PC Connection, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Delaware
(State or Other Jurisdiction of Incorporation)
0-23827 | 02-0513618 | |
(Commission File Number) | (IRS Employer Identification No.) |
Rt. 101A, 730 Milford Road Merrimack, NH | 03054 | |
(Address of Principal Executive Offices) | (Zip Code) |
(603) 683-2000
(Registrants Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨ | 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 8.01 | Other Events and Required FD Disclosure |
On November 15, 2005, PC Connection, Inc., a Delaware corporation, is planning to participate in the Raymond James IT Supply Chain Conference and will be discussing various aspects of its business. During the course of those discussions, certain limited financial information and other limited facts of its business will be presented to investors. This information is included below as an Exhibit.
Item 9.01 | Financial Statements and Exhibits |
(c) | Exhibits |
99.1 | Presentation for Raymond James IT Supply Chain Conference. |
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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.
Date: November 15, 2005 |
REGISTRANT | |||||||
PC CONNECTION, INC. | ||||||||
By: | /s/ JACK FERGUSON | |||||||
Jack Ferguson Treasurer and Interim Chief Financial Officer |
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EXHIBIT INDEX
Exhibit |
Description | |
99.1 | Presentation for Raymond James IT Supply Chain Conference. |
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RAYMOND JAMES IT SUPPLY CHAIN CONFERENCE November 15, 2005 Patricia Gallup, Chairman & Chief Executive Officer Stephen Baldridge, VP of Finance & Corporate Controller |
Under the Private Securities Litigation Reform Act of 1995: This presentation 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, 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 other risks detailed under the caption Factors That May Affect Future Results and Financial
Condition in the Companys 2005 Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission for the quarter ended September 30, 2005. More specifically, the statements
in this presentation concerning the Companys outlook for 2005 and the statements concerning the Companys gross margin percentage, productivity, selling and administrative costs, and other statements of a non-historical basis (including statements regarding implementing strategies for future growth, the ability of the Company to improve sales productivity and increase
its market 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 Companys distribution channel by vendors and customers, continuation of key vendor
relationships and support programs and the ability of the Company to hire
and retain qualified sales representatives and other essential
personnel. Safe Harbor Statement |
Fortune
1000 Founded 1982 Employees 1,440 Exchange NASDAQ Symbol PCCC Shares Outstanding 25.2 Million Float 8.1 Million 2004 Sales $1.35 Billion Market Capitalization $137 Million Total Book Value Per Share $6.79 Tangible Book Value Per Share $4.63 Closing Price9/30/05 $5.44 |
Corporate Structure PC Connection, Inc. PC Connection, Inc. (Holding Company) (Holding Company) GovConnection, Inc. GovConnection, Inc. Federal Government State, Local, Education PC Connection PC Connection Sales Corporation Sales Corporation (dba PC Connection) (dba PC Connection ) ) Small-and Medium-Sized Businesses MoreDirect, Inc. MoreDirect, Inc. Medium-to-Large Businesses ServiceConnection, Inc. ServiceConnection , Inc. , Inc. IT Services and Solutions Merrimack Services Corporation Merrimack Services Corporation (dba PC Connection Services) (dba PC Connection Services) Sales Support Services |
Company Overview Multi-branded strategy that leads with solution-selling Sales and sales support subsidiaries targeting specific segments More than 100,000 brand-name products and solutions from more than 1,400 manufacturers Major vendor partners; long-standing alliances HP, Apple, Toshiba, Sony, IBM/Lenovo, Microsoft, Cisco, Symantec
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Customer Focus Companies with less than 500 employees Consumers Sales supports customers without IT departments Strategy Telephonic/digital solution selling Rapid response and solution selling of IT products and services Marketing In-bound and out-bound sales; Business-to-Business; Business-to-Consumer Catalog; activation/reactivation, Web Growth: Year-over-year growth Q304Q305 of 3.9% Increase number of sales reps (410) Lead with solutions and service packages |
Customer Focus The Public Sector; in-house IT Federal K-12 State and Local Higher Ed Strategy Solution-selling; contract selling; teaming Marketing Field sales, out-bound tele-sales, catalog, Web, tradeshows/events Growth: Year-over-year growth Q304 Q305 of 12.1% Increase number of sales reps (105) Continuing to add vendors; expanding government contract vehicles
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Customer Focus Companies with 500+ employees Technical IT department Strategy Field sales model Low SG&A rate Marketing Customer tie-in via TRAXX ® e-procurement system TRAXX aggregates IT solution procurement over the Web Growth: Year-over-year growth Q304Q305 of 3.8% Increase number of established field people (70) Increase high-end equipment sales using ServiceConnection |
New subsidiary of PC Connection, Inc. Customer Focus: Small-to-large businesses Strategy Skuable services to businesses with <500 employees Warranty Support 24x7 Help Desk Remote Monitoring Remote Backup Professional services to businesses with 500+ employees Data Migration Active Data Upgrade Cable Support Installations Growth: Sell services across all sales organizations |
Subsidiary supporting all sales and service companies Product Management Purchasing Distribution Human Resources Sales Support Finance Marketing Administration Web Facilities Advertising Lower SG&A through consolidating subsidiary support Rapid response support for sales One solution call center for all sales organizations Merrimack Services Corporation dba PC Connection Services |
Multi-branded Strategy |
Amherst Technologies focused on products and services to medium-to-large corporations Assets incorporated into various subsidiaries New sales and services certifications from leading enterprise vendors IBM, HP, Cisco and other high-end systems certifications Recent Acquisition Update |
Growth Strategies Summary Increase solutions offerings Increase number of sales representatives Expand public sector contract vehicles Lower SG&A through IT automation of sales-related systems Improve overall sales productivity Continually look for opportunities to acquire companies that augment our customer base and adds sales talent |
Financial Summary Stephen Baldridge, VP of Finance & Corporate Controller |
Operating Results Consolidated $ 0.25 $ 0.18 $ 0.11 $ 0.08 EPS (GAAP) 0.6% 0.4% 0.8% 0.5% % of Net Sales $ 6,231 $ 4,436 $ 2,817 $ 1,924 Net Income 1.1% 0.8% 1.4% 1.0% % of Net Sales 10,972 8,599 4,841 3,696 Operating Income 3,583 853 1,800 853 Special Charges 9.4% 10.6% 9.3% 10.1% % of Net Sales 94,938 110,326 32,765 37,531 SG&A Expenses 10.8% 11.5% 11.2% 11.3% % of Net Sales 109,493 119,778 39,406 42,080 Gross Profit $ 1,014,235 $ 1,045,685 $ 351,265 $ 371,124 Net Sales Sept 04 YTD Sept 05 YTD Q3 2004 Q3 2005 (Amounts in thousands except EPS) |
Product Mix Q3 2005 vs. Q3 2004 100.0% 100.0% 9.6% 10.6% Accessories/Other 5.4% 4.9% Memory & System Enhancements 11.8% 11.8% Video, Imaging, & Sound 10.6% 10.8% Printers & Printer Supplies 7.3% 7.8% Net/Com Products 11.9% 12.1% Software 7.9% 8.7% Storage Devices 13.9% 13.9% Desktops/Servers 21.6% 19.4% Notebooks & PDAs 2004 % of Net Sales 2005 % of Net Sales |
Net
Sales by Segment $207,424 $66,359 $53,852 $200,325 $76,366 $47,160 $194,058 $77,942 $63,355 $207,296 $78,457 $64,957 $195,943 $77,458 $77,864 $203,493 $80,382 $87,249 $0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 $400,000 Public Sector Large Account SMB ($ amounts in thousands) 2004 2005 Q1 2004 2005 Q2 2004 2005 Q3 |
Gross Margin % of Sales 11.2% 11.3% Consolidated 10.2% 9.8% Large Account 9.8% 9.2% Public Sector 12.2% 12.9% SMB Q3 2004 Q3 2005 |
SG&A % of Sales Note: SG&A rates exclude special charges; 2004 and 2005 include increases of 0.4% and 1.0%, respectively, from EITF reclassification. ( FY 04 and FY 05 include EITF) 10.2% 9.5% 9.8% 10.6% 8.0% 9.0% 10.0% 11.0% FY 2002 FY 2003 FY 2004 Sept 05 YTD |
Operating Margin % of Sales 0.7% 0.6% 1.2% 0.9% 1.4% 1.0% 0.0% 0.2% 0.4% 0.6% 0.8% 1.0% 1.2% 1.4% 1.6% 2004 2005 Q1 2004 2005 Q2 2004 2005 Q3 |
Diluted Earnings Per Share $0.00 $0.02 $0.04 $0.06 $0.08 $0.10 $0.12 $0.14 $0.16 $0.18 2004 2005 Q2 2004 2005 Q3 2004 2005 Q1 $0.05 $0.04 $0.09 $0.06 $0.11 $0.08 |
Working Capital Metrics 3.8% 8.3% Debt/Capital Ratio $18,511 $10,588 Cash Flow from Operations 16 20 Inventory Turns 41 46 Days Sales Outstanding Q3 04 Q3 05 |
we
solve IT |