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):   July 28, 2010

PC Connection, Inc.	
(Exact name of registrant as specified in charter)	

Delaware	0-23827	02-0513618	
(State or other juris-
diction of incorporation)	(Commission
File Number)	(IRS Employer
Identification No.)	

Rt. 101A, 730 Milford Road
Merrimack, NH	03054	
(Address of principal executive offices)	(Zip Code)	

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

N/A	
(Former name or former address, if changed since last report)	

⃞  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 July 28, 2010, PC Connection, Inc. announced its financial results for the quarter ended June 30, 2010.  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
 	(d)	Exhibits	
 	 	 	 	
 	 	The following exhibit relating to Item 2.02 shall be deemed to be furnished, and not filed:	
 	 	 	 	
 	 	99.1	Press Release issued by PC Connection, Inc. on July 28, 2010.	

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:	July 28, 2010	PC CONNECTION, INC.	
 	 	 	
 	 	By:	/s/ Jack Ferguson	
 	 	 	Jack Ferguson	
 	 	 	Executive Vice President, Treasurer, and	
 	 	 	Chief Financial Officer	

EXHIBIT INDEX

Exhibit No.	Description	
 	 	
99.1	Press release issued by PC Connection, Inc. on July 28, 2010.	

Exhibit 99.1

PC Connection, Inc. Reports Second Quarter Results

MERRIMACK, N.H.--(BUSINESS WIRE)--July 28, 2010--PC Connection, Inc. (NASDAQ: PCCC)

SECOND QUARTER SUMMARY:
Q2 net sales: $477.5 million, up 27% year over year
SG&A: 9.9% of net sales, improved from 11.2% last year
Operating income: $8.5 million, or 1.8% of net sales
Diluted earnings per share: $0.18 per share

PC Connection, Inc. (NASDAQ: PCCC), a leading direct marketer of information technology (IT) products and services, today announced results for the quarter ended June 30, 2010. Net sales for the three months ended June 30, 2010 were $477.5 million, an increase of $100.3 million or 26.6%, compared to $377.3 million for the three months ended June 30, 2009. Net income for the quarter was $5.0 million, or $0.18 per share, compared to net loss of $6.5 million, or $0.24 per share, for the corresponding prior year period.

The quarter ended June 30, 2009 included $12.1 million of special charges related primarily to the write-off of a software development project that reduced earnings and earnings per share. Pro forma net income, excluding these special charges, for the quarter ended June 30, 2009 was $1.1 million, or $0.04 per share. The Company did not record any special charges for the second quarter of 2010. A reconciliation between net loss on a GAAP basis and pro forma net income for the three months ended June 30, 2009 is provided in a table below immediately following the Consolidated Statements of Operations.

Net sales for the six months ended June 30, 2010 were $885.8 million, an increase of $182.3 million or 25.9%, compared to $703.5 million for the six months ended June 30, 2009. Net income for the six months ended June 30, 2010 was $7.5 million, or $0.27 per share, compared to net loss of $8.1 million, or $0.30 per share, for the six months ended June 30, 2009. The six-month period ended June 30, 2009 included special charges that reduced earnings and earnings per share. Pro forma net income, excluding these special charges, for the six months ended June 30, 2009 was $71 thousand, or substantially break-even on a per share basis. The Company did not record any special charges for the six months ended June 30, 2010. A reconciliation between net loss on a GAAP basis and pro forma net income for the six months ended June 30, 2009 is provided in a table below immediately following the Consolidated Statements of Operations.

As noted in last quarter’s earnings release, the Company formed a new sales company, PC Connection Express, Inc., to focus on the specialized requirements of the consumer and small office/home office ("SOHO") markets. This new company began operations in mid-January 2010. Prior to its formation, consumer and SOHO sales were reported within the Company’s small- and medium-sized business (SMB) segment. In order to facilitate comparison with current period results, 2009 revenues and gross margins for the SMB segment have been restated on a pro forma basis to exclude consumer and SOHO sales.

Quarterly Sales by Segment:
Net sales for the SMB business segment increased by 26.1%, to $190.7 million compared to the second quarter pro forma sales of 2009. Sales to small- and medium-sized businesses experienced significant growth across most product lines and market sectors as the IT demand environment remained strong, similar to this year’s first quarter.
Net sales for MoreDirect, Inc., the Company’s Large Account segment, increased year-over-year by 36.2% to $149.4 million, representing this segment’s largest quarterly sales performance. Large account customers substantially increased their IT spending due to the release of pent-up IT demand and PC refresh. New customer acquisitions also contributed to the year-over-year increase.
Net sales to government and education customers (Public Sector segment) increased year-over-year by 32.8% to $120.6 million, representing this segment’s largest quarterly sales performance. Sales to both federal government and education customers increased for the third straight quarter by double-digit percentages primarily due to increased contract sales made to federal government and higher education customers.
Net sales to consumers and SOHO customers by PC Connection Express were $16.8 million in the second quarter of 2010, compared to $25.5 million of comparable sales in the second quarter of 2009, which were previously reported within the SMB segment. This company’s new website, www.pcconnectionexpress.com , was launched in mid January, and expanded efforts continue to increase customer visits to this site.

Quarterly Sales by Product Mix:
Notebooks and PDAs sales, the Company’s largest product category, increased by 59% year over year and accounted for 18% of net sales in the second quarter of 2010 compared to 14% of net sales for the second quarter of 2009. Higher unit sales for the quarter, associated with the PC refresh and pent-up IT demand, drove the year-over-year growth as average selling prices, or ASPs, experienced a slight increase year over year.
Desktops/servers sales increased by 36% year over year, accounting for 16% of net sales in the second quarter of 2010 compared to 14% of net sales for the second quarter of 2009. Desktop sales grew as a result of increased unit sales associated with the PC refresh and pent-up IT demand. Server sales grew as a result of increased unit sales and higher ASPs.
Net/com products sales increased by 28% year over year, accounting for 10% of net sales in the second quarter of 2010 and 2009. Net/com sales benefitted this past quarter from increased investments in IT infrastructure.
Memory and system enhancement sales grew 43% year over year and accounted for 4% of net sales in the second quarter of 2010 and 2009. The large increase was driven substantially by the year-over-year increase in desktop and notebook sales experienced in the second quarter of 2010.

Overall gross profit dollars increased by $11.6 million, or 26%, in the second quarter of 2010 compared to the prior year quarter due to higher revenues. Consolidated gross profit margin, as a percentage of net sales, was 11.7% in the second quarter of 2010 compared to 11.8% in the prior year quarter. Higher software referral agency fee revenues largely offset lower invoice product margins in the second quarter of 2010 compared to the prior year quarter. Both the SMB and Large Account segments improved gross profit margins in the second quarter compared to the prior year period, however, consolidated gross profit margin was largely unchanged.

Overall annualized sales productivity increased by 33% in the second quarter of 2010 compared to the second quarter of 2009. Sales productivity in the Public Sector, SMB, and Large Account segments increased by 35%, 36%, and 37%, respectively, in the second quarter of 2010 compared to the prior year period primarily due to the year-over-year revenue increases. On a consolidated basis, the total number of sales representatives was 588 at June 30, 2010, compared to 603 at June 30, 2009, and 583 at March 31, 2010.

Total selling, general and administrative expenses for the quarter increased year over year by $5.4 million, or 12.8%, but decreased as a percentage of net sales to 9.9% for the second quarter of 2010 from 11.2% for the second quarter of 2009. The year-over-year dollar increase was primarily attributable to the increased variable compensation associated with increased operating results. The year-over-year decrease in SG&A as a percentage of net sales was due to the higher level of sales in the second quarter of 2010 and improved expense management.

“We are pleased by the continued improvement in our overall sales growth and performance,” said Patricia Gallup, Chairman and Chief Executive Officer. “During the quarter, the Company experienced the second largest quarterly sales level in its history, and achieved significant increases in both operating income and earnings per share. We believe we can continue to increase market share and, as the economy improves, grow our business and enhance long-term shareholder value.”

About PC Connection, Inc.

PC Connection, Inc., a Fortune 1000 company, operates through four sales companies: PC Connection Sales Corporation, MoreDirect, Inc., GovConnection, Inc., and PC Connection Express, Inc., headquartered in Merrimack, NH, Boca Raton, FL, Rockville, MD, and Portsmouth, NH, respectively. All four companies can deliver custom-configured computer systems overnight from PC Connection Services’ ISO 9001:2000 certified technical configuration lab at its 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 the small- and medium-sized business sector, is a rapid-response provider of IT products and services. It offers more than 180,000 brand-name products through its staff of technically trained sales account managers and catalog telesales representatives, catalogs, and publications, and its website at  www.pcconnection.com .

MoreDirect, Inc. (561-237-3300), www.moredirect.com, provides corporate technology buyers with a comprehensive web-based e-procurement solution and in-depth IT supply-chain expertise, serving as a one-stop source by aggregating more than 300,000 products from the inventories of leading IT wholesale distributors and manufacturers. MoreDirect’s TRAXX™ system is a seamless end-to-end interface that empowers clients to electronically source, evaluate, compare prices, and track related technology product purchases in real-time.

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 .

PC Connection Express, Inc. (888-800-0323) is a rapid-response provider of computer products and consumer electronics to home, home office, and small office users. Customers can purchase the best-known brands in the industry online at  www.pcconnectionexpress.com  or order by calling a trained sales specialist. The subsidiary includes the MacConnection brand (800-800-2222), one of Apple’s largest authorized online resellers at www.macconnection.com .

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 Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission for the quarter ended March 31, 2010. More specifically, the statements in this release concerning the Company’s outlook for 2010 and other statements of a non-historical basis (including statements regarding the Company’s ability to grow its business and increase 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 Company's distribution channel by vendors and customers, continuation of key vendor and customer relationships and support programs, and the ability of the Company to hire and retain qualified sales representatives and other essential personnel. The Company assumes no 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 June 30,	 	2010	 	2009	 	 	 	
(Dollars and shares in thousands, except operating
data, price/earnings ratio, and per share data)	 	 	 	% of
Net Sales	 	 	 	% of
Net Sales	 	%
Change	 	

Operating Data:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net sales	 	$	477,546	 	 	 	 	$	377,262	 	 	 	 	27	%	 	 	 	
Diluted earnings (loss) per share	 	$	0.18	 	 	 	 	$	(0.24	)	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross profit margin	 	 	11.7	%	 	 	 	 	11.8	%	 	 	 	 	 	 	 	
Operating margin	 	 	1.8	%	 	 	 	 	(2.6	)%	 	 	 	 	 	 	 	
Return on equity (1)	 	 	8.4	%	 	 	 	 	(11.2	)%	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Catalogs distributed	 	 	2,247,000	 	 	 	 	 	2,822,000	 	 	 	 	(20	)%	 	 	 	
Orders entered (2)	 	 	331,700	 	 	 	 	 	333,900	 	 	 	 	(1	)%	 	 	 	
Average order size (2)	 	$	1,777	 	 	 	 	$	1,413	 	 	 	 	26	%	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Inventory turns (1)	 	 	27	 	 	 	 	 	23	 	 	 	 	 	 	 	 	
Days sales outstanding	 	 	49	 	 	 	 	 	47	 	 	 	 	 	 	 	 	

Product Mix:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Notebooks & PDAs	 	$	86,145	 	 	18	%	 	$	54,336	 	 	14	%	 	59	%	 	 	 	
Desktops/Servers	 	 	73,021	 	 	16	 	 	 	53,735	 	 	14	 	 	36	%	 	 	 	
Software	 	 	62,335	 	 	13	 	 	 	56,765	 	 	15	 	 	10	%	 	 	 	
Video, Imaging & Sound	 	 	53,044	 	 	11	 	 	 	46,322	 	 	12	 	 	15	%	 	 	 	
Net/Com Products	 	 	49,001	 	 	10	 	 	 	38,335	 	 	10	 	 	28	%	 	 	 	
Storage Devices	 	 	38,960	 	 	8	 	 	 	31,010	 	 	8	 	 	26	%	 	 	 	
Printers & Printer Supplies	 	 	38,867	 	 	8	 	 	 	32,008	 	 	9	 	 	21	%	 	 	 	
Memory & System Enhancements	 	 	18,483	 	 	4	 	 	 	12,905	 	 	4	 	 	43	%	 	 	 	
Accessories/Other	 	 	57,690	 	 	12	 	 	 	51,846	 	 	14	 	 	11	%	 	 	 	
 	 	$	477,546	 	 	100	%	 	$	377,262	 	 	100	%	 	27	%	 	 	 	

Net Sales of Enterprise Server and Networking Products (included in the above Product Mix):	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	$	178,129	 	 	37	%	 	$	144,211	 	 	38	%	 	24	%	 	 	 	

Stock Performance Indicators:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Actual shares outstanding	 	 	26,721	 	 	 	 	 	26,864	 	 	 	 	 	 	 	 	
Total book value per share	 	$	9.06	 	 	 	 	$	8.48	 	 	 	 	 	 	 	 	
Tangible book value per share	 	$	7.19	 	 	 	 	$	6.63	 	 	 	 	 	 	 	 	
Closing price	 	$	6.06	 	 	 	 	$	5.25	 	 	 	 	 	 	 	 	
Market capitalization	 	$	161,929	 	 	 	 	$	141,036	 	 	 	 	 	 	 	 	
Pro forma trailing price/earnings ratio (3)	 	 	12	 	 	 	 	 	21	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
(1) Annualized	 	 	 	
(2) Does not reflect cancellations or returns	 	 	 	
(3) Earnings calculation is based on the last four quarters and excludes special charges.	 	 	 	

 	 	 	 	 	 	 	 	 	 	
REVENUE AND MARGIN INFORMATION	 	
For the Three Months Ended June 30,	 	2010	 	 	2009	 	 	
 	 	Net
Sales	 	Gross
Margin (%)	 	Net
Sales	 	Gross
Margin (%)	 	
(Dollars in thousands)	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	
PC Connection Sales Corporation (SMB) (1)	 	$	190,661	 	14.4	%	 	$	151,254	 	14.2	%	 	 	
MoreDirect (Large Account)	 	 	149,411	 	10.5	 	 	 	109,674	 	10.3	 	 	 	
GovConnection (Public Sector)	 	 	120,639	 	9.5	 	 	 	90,851	 	9.6	 	 	 	
PC Connection Express (Consumer/SOHO) (1)	 	 	16,835	 	8.7	 	 	 	25,483	 	10.8	 	 	 	
Total	 	$	477,546	 	11.7	%	 	$	377,262	 	11.8	%	 	 	
 	 	 	 	 	 	 	 	 	 	 	
(1) 2009 results are pro forma due to the launch in early 2010 of new Consumer/SOHO sales company.	 	 	

CONSOLIDATED STATEMENTS OF OPERATIONS	
Three Months Ended June 30,	 	2010	 	 	2009	 	
(amounts in thousands, except per share data)	 	Amount	 	% of Net
Sales	 	Amount	 	% of Net
Sales	
 	 	 	 	 	 	 	 	 	
Net sales	 	$	477,546	 	 	100.0	%	 	$	377,262	 	 	100.0	%	
Cost of sales	 	 	421,564	 	 	88.3	 	 	 	332,920	 	 	88.2	 	
Gross profit	 	 	55,982	 	 	11.7	 	 	 	44,342	 	 	11.8	 	
 	 	 	 	 	 	 	 	 	
Selling, general and administrative expenses	 	 	47,501	 	 	9.9	 	 	 	42,118	 	 	11.2	 	
Special charges	 	 	-	 	 	-	 	 	 	12,064	 	 	3.2	 	
Income (loss) from operations	 	 	8,481	 	 	1.8	 	 	 	(9,840	)	 	(2.6	)	
 	 	 	 	 	 	 	 	 	
Interest expense	 	 	(95	)	 	-	 	 	 	(152	)	 	-	 	
Other, net	 	 	35	 	 	-	 	 	 	160	 	 	-	 	
Income tax (provision) benefit	 	 	(3,398	)	 	(0.7	)	 	 	3,373	 	 	0.9	 	
Net income (loss)	 	$	5,023	 	 	1.1	%	 	 	($6,459	)	 	(1.7	)%	

Earnings (loss) per common share:	 	 	 	 	 	 	 	 	
Basic	 	$	0.19	 	 	 	 	$	(0.24	)	 	 	
Diluted	 	$	0.18	 	 	 	 	$	(0.24	)	 	 	
 	 	 	 	 	 	 	 	 	
Weighted average common shares outstanding:	 	 	 	 	 	 	 	 	
Basic	 	 	27,116	 	 	 	 	 	26,819	 	 	 	
Diluted	 	 	27,156	 	 	 	 	 	26,819	 	 	 	

 	
CONSOLIDATED STATEMENTS OF OPERATIONS	
 	 	 	 	 	
Six Months Ended June 30,	 	2010	 	2009	
(amounts in thousands, except per share data)	 	Amount	 	% of Net
Sales	 	Amount	 	% of Net
Sales	
 	 	 	 	 	 	 	 	 	
Net sales	 	$	885,808	 	 	100.0	%	 	$	703,483	 	 	100.0	%	
Cost of sales	 	 	781,175	 	 	88.2	 	 	 	617,530	 	 	87.8	 	
Gross profit	 	 	104,633	 	 	11.8	 	 	 	85,953	 	 	12.2	 	
 	 	 	 	 	 	 	 	 	
Selling, general and administrative expenses	 	 	91,975	 	 	10.4	 	 	 	85,407	 	 	12.1	 	
Special charges	 	 	-	 	 	-	 	 	 	12,955	 	 	1.9	 	
Income (loss) from operations	 	 	12,658	 	 	1.4	 	 	 	(12,409	)	 	(1.8	)	
 	 	 	 	 	 	 	 	 	
Interest expense	 	 	(194	)	 	-	 	 	 	(286	)	 	-	 	
Other, net	 	 	110	 	 	-	 	 	 	359	 	 	0.1	 	
Income tax (provision) benefit	 	 	(5,117	)	 	(0.6	)	 	 	4,258	 	 	0.6	 	
Net income (loss)	 	$	7,457	 	 	0.8	%	 	 	($8,078	)	 	(1.1	)%	

Earnings (loss) per common share:	 	 	 	 	 	 	 	 	
Basic	 	$	0.27	 	 	 	 	$	(0.30	)	 	 	
Diluted	 	$	0.27	 	 	 	 	$	(0.30	)	 	 	
 	 	 	 	 	 	 	 	 	
Weighted average common shares outstanding:	 	 	 	 	 	 	 	 	
Basic	 	 	27,136	 	 	 	 	 	26,819	 	 	 	
Diluted	 	 	27,175	 	 	 	 	 	26,819	 	 	 	

 	
A RECONCILIATION BETWEEN GAAP AND PRO FORMA RESULTS	
This information is being provided so as to allow for a comparison of our operating results without special charges.	
 	 	 	 	 	 	 	 	 	
June 30,	 	Three Months Ended	 	Six Months Ended	
(amounts in thousands)	 	2010	 	2009	 	2010	 	2009	
 	 	 	 	 	 	 	 	 	
GAAP net income (loss)	 	$	5,023	 	 	($6,459	)	 	$	7,457	 	 	($8,078	)	
Special charges (after tax):	 	 	 	 	 	 	 	 	
Software development write-off and related charges	 	 	-	 	 	7,378	 	 	 	-	 	 	7,378	 	
Management restructuring	 	 	-	 	 	195	 	 	 	-	 	 	771	 	
Total special charges (after tax)	 	 	-	 	 	7,573	 	 	 	-	 	 	8,149	 	
 	 	 	 	 	 	 	 	 	
Pro forma net income	 	$	5,023	 	$	1,114	 	 	$	7,457	 	$	71	 	

 	
CONSOLIDATED BALANCE SHEETS	 	June 30,	 	December 31,	
(amounts in thousands)	 	2010	 	2009	
 	 	 	 	 	
ASSETS	 	 	 	 	
Current Assets:	 	 	 	 	
Cash and cash equivalents	 	$	49,820	 	 	$	46,297	 	
Accounts receivable, net	 	 	229,170	 	 	 	218,095	 	
Inventories	 	 	67,243	 	 	 	67,391	 	
Deferred income taxes	 	 	3,746	 	 	 	3,386	 	
Income taxes receivable	 	 	667	 	 	 	935	 	
Prepaid expenses and other current assets	 	 	3,849	 	 	 	2,750	 	
Total current assets	 	 	354,495	 	 	 	338,854	 	
Property and equipment, net	 	 	11,092	 	 	 	12,420	 	
Goodwill	 	 	48,060	 	 	 	48,060	 	
Other intangibles, net	 	 	1,856	 	 	 	1,279	 	
Other assets	 	 	358	 	 	 	482	 	
Total Assets	 	$	415,861	 	 	$	401,095	 	

LIABILITIES AND STOCKHOLDERS’ EQUITY	 	 	 	 	
Current Liabilities:	 	 	 	 	
Current maturities of capital lease obligation to affiliate	 	$	824	 	 	$	780	 	
Accounts payable	 	 	127,736	 	 	 	125,120	 	
Accrued expenses and other liabilities	 	 	23,923	 	 	 	20,441	 	
Accrued payroll	 	 	10,306	 	 	 	8,843	 	
Total current liabilities	 	 	162,789	 	 	 	155,184	 	
Deferred income taxes	 	 	4,561	 	 	 	3,849	 	
Capital lease obligation to affiliate, less current maturities	 	 	2,407	 	 	 	2,830	 	
Other liabilities	 	 	3,980	 	 	 	3,966	 	
Total Liabilities	 	 	173,737	 	 	 	165,829	 	
Stockholders’ Equity:	 	 	 	 	
Common stock	 	 	274	 	 	 	274	 	
Additional paid-in capital	 	 	97,645	 	 	 	97,213	 	
Retained earnings	 	 	148,571	 	 	 	141,114	 	
Treasury stock at cost	 	 	(4,366	)	 	 	(3,335	)	
Total Stockholders’ Equity	 	 	242,124	 	 	 	235,266	 	
Total Liabilities and Stockholders’ Equity	 	$	415,861	 	 	$	401,095	 	

 	
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY	
Six Months Ended June 30, 2010 (amounts in thousands)	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Common Stock	 	Additional	 	Retained	 	Treasury Stock	 	 	
 	 	Shares	 	Amount	 	Paid-In Capital	 	Earnings	 	Shares	 	Amount	 	Total	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance – December 31, 2009	 	27,375	 	$	274	 	$	97,213	 	 	$	141,114	 	(527	)	 	 	($3,335	)	 	$	235,266	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Stock-based compensation expense	 	-	 	 	-	 	 	743	 	 	 	-	 	-	 	 	 	-	 	 	 	743	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Repurchase of common stock for treasury	 	-	 	 	-	 	 	-	 	 	 	-	 	(208	)	 	 	(1,399	)	 	 	(1,399	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Nonvested stock awards	 	-	 	 	-	 	 	(368	)	 	 	-	 	58	 	 	 	368	 	 	 	-	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Issuance of common stock under Employee	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Stock Purchase Plan	 	23	 	 	-	 	 	135	 	 	 	-	 	-	 	 	 	-	 	 	 	135	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Tax shortfall from stock-based compensation	 	-	 	 	-	 	 	(78	)	 	 	-	 	-	 	 	 	-	 	 	 	(78	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income and comprehensive income	 	-	 	 	-	 	 	-	 	 	 	7,457	 	-	 	 	 	-	 	 	 	7,457	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance – June 30, 2010	 	27,398	 	$	274	 	$	97,645	 	 	$	148,571	 	(677	)	 	$	(4,366	)	 	$	242,124	 	

 	 	
CONSOLIDATED STATEMENTS OF CASH FLOWS	 	
Six Months Ended June 30, (amounts in thousands)	 	 	2010	 	 	 	2009	 	 	
 	 	 	 	 	 	
Cash Flows from Operating Activities:	 	 	 	 	 	
 	 	 	 	 	 	
Net income (loss)	 	$	7,457	 	 	$	(8,078	)	 	
Adjustments to reconcile net income (loss) to net cash provided by operating activities:	 	 	 	 	 	
 	 	 	 	 	 	
Non-cash portion of special charges	 	 	-	 	 	 	11,625	 	 	
Depreciation and amortization	 	 	2,891	 	 	 	3,536	 	 	
Provision for doubtful accounts	 	 	1,177	 	 	 	1,233	 	 	
Deferred income taxes	 	 	352	 	 	 	(2,638	)	 	
Stock-based compensation expense	 	 	743	 	 	 	646	 	 	
Income tax deficiency from stock-based compensation	 	 	(78	)	 	 	(103	)	 	
Loss on disposal of fixed assets	 	 	3	 	 	 	15	 	 	
 	 	 	 	 	 	
Changes in assets and liabilities:	 	 	 	 	 	
Accounts receivable	 	 	(12,252	)	 	 	15,734	 	 	
Inventories	 	 	148	 	 	 	2,923	 	 	
Prepaid expenses and other current assets	 	 	(831	)	 	 	(2,599	)	 	
Other non-current assets	 	 	124	 	 	 	(111	)	 	
Accounts payable	 	 	1,853	 	 	 	596	 	 	
Accrued expenses and other liabilities	 	 	4,959	 	 	 	2,277	 	 	
Net cash provided by operating activities	 	 	6,546	 	 	 	25,056	 	 	

Cash Flows from Investing Activities:	 	 	 	 	 	
 	 	 	 	 	 	
Purchases of property and equipment	 	 	(1,380	)	 	 	(4,369	)	 	
Net cash used for investing activities	 	 	(1,380	)	 	 	(4,369	)	 	

Cash Flows from Financing Activities:	 	 	 	 	 	
 	 	 	 	 	 	
Proceeds from short-term borrowings	 	 	-	 	 	 	1,545	 	 	
Repayment of short-term borrowings	 	 	-	 	 	 	(1,545	)	 	
Purchase of treasury shares	 	 	(1,399	)	 	 	(178	)	 	
Repayment of capital lease obligation	 	 	(379	)	 	 	(340	)	 	
Issuance of stock under Employee Stock Purchase Plan	 	 	135	 	 	 	138	 	 	
Net cash used for financing activities	 	 	(1,643	)	 	 	(380	)	 	
Increase in cash and cash equivalents	 	 	3,523	 	 	 	20,307	 	 	
Cash and cash equivalents, beginning of period	 	 	46,297	 	 	 	47,003	 	 	
Cash and cash equivalents, end of period	 	$	49,820	 	 	$	67,310	 	 	

CONTACT:
PC Connection, Inc.
Stephen Baldridge, 603-683-2322
Sr. Vice President of Finance & Corporate Controller