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):   November 1, 2012

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 November 1, 2012, PC Connection, Inc. announced its financial results for the quarter ended September 30, 2012.  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 November 1, 2012.

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 1, 2012	PC CONNECTION, INC.	
 	 	 	
 	 	By:	/s/ Joseph Driscoll	
 	 	 	Joseph Driscoll	
 	 	 	Senior Vice President, Treasurer, and	
 	 	 	Chief Financial Officer	

EXHIBIT INDEX

Exhibit No.	Description	
 	 	
99.1	Press release issued by PC Connection, Inc. on November 1, 2012.	

Exhibit 99.1

PC Connection, Inc. Reports Third Quarter Results

THIRD QUARTER SUMMARY:
Diluted earnings per share: $0.37 per share, up 6% y/y
Net sales: $561.3 million, gross profit up $1.8 million y/y
Gross margin: 12.9% of net sales, increase of 63 basis points y/y
Cash balance totaled $53.5 million, up from $4.6 million at 12/31/2011

MERRIMACK, N.H.--(BUSINESS WIRE)--November 1, 2012--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 September 30, 2012. Net sales for the three months ended September 30, 2012 decreased by 2.5% year over year to $561.3 million. Overall gross profit dollars for the quarter increased from $70.4 million to $72.2 million, or 2.5%, compared to the third quarter of 2011. Net income for the quarter increased to $9.9 million, or $0.37 per share, compared to net income of $9.4 million, or $0.35 per share, for the corresponding prior year quarter.

Net sales for the nine months ended September 30, 2012 increased by $52.5 million, or 3.4% to $1,602.6 million, compared to $1,550.1 million for the nine months ended September 30, 2011. Net income for the nine months ended September 30, 2012 increased to $24.2 million, or $0.91 per share, compared to net income of $21.4 million, or $0.80 per share, for the comparable prior year period. Excluding special charges, pro forma net income for the nine months ended September 30, 2012 would have been $24.9 million, or $0.93 per share, representing 16.3% growth over prior year. We did not record any special charges for the nine months ended September 30, 2011. Earnings before interest, taxes, depreciation and amortization, stock-based compensation expense, and special charges (“Adjusted EBITDA”) totaled $60.0 million for the twelve months ended September 30, 2012, as compared to $54.3 million for the twelve months ended September 30, 2011.

In the first quarter of 2012, we combined our consumer and small office/home office (“SOHO”) sales company with our small- and medium-sized business (SMB) segment. In order to facilitate comparison with current period results, 2011 revenues and gross margins for the SMB segment have been restated to include consumer and SOHO sales.

Quarterly Sales by Segment:
Net sales for the SMB business segment were $219.2 million in the third quarter of 2012. Sales to small and medium businesses increased by 2.2% year over year, however, when combined with lower consumer and SOHO sales, overall sales for this segment decreased by 2.3%.
Net sales for the Large Account segment decreased by 6.7% to $192.8 million compared to net sales in the third quarter of 2011. The decrease was due to two, large product roll-outs in the prior year which totaled $36 million that did not repeat in 2012. However, gross profit increased from $20.2 million to $22.3 million due to our strategic focus on improving results through higher-margin sales.
Net sales to government and education customers (Public Sector segment) increased year over year by 3.2% to $149.2 million. Sales to state and local government and educational institutions increased by 4.1% compared to last year, and sales to the federal government increased by 1.6% year over year due to higher contract sales.

Quarterly Sales by Product Mix:
Notebook sales, the Company’s largest product category, increased by 10.5% year over year and accounted for 19% of net sales in the third quarter of 2012 compared to 17% of net sales in the prior year quarter. The growth was attributable to both increased unit sales and higher average selling prices.
Desktop/server sales decreased by 15.1% year over year, accounting for 15% of net sales in the third quarter of 2012 compared to 17% of net sales in the prior year quarter. The decline in desktop sales was primarily a result of the prior year Large Account rollouts which did not repeat this quarter.
Software sales were unchanged, accounting for 15% of net sales in the third quarter of 2012, compared to 14% in the prior year quarter. Software sales increased in Large Account, and we experienced increasing demand in virtualization and security.

Consolidated gross margin, as a percentage of net sales, increased year over year by 63 basis points to 12.9% in the third quarter of 2012. As our customers migrate to data center and advanced technology solutions, we have experienced increased sales of higher margin products and services.

Total selling, general and administrative expenses for the quarter increased year over year by $1.4 million, or 2.5%, and increased as a percentage of net sales from 9.4% for the third quarter of 2011 to 10.0% for the third quarter of 2012. The percentage increase was primarily due to lower year-over-year sales. Tight cost control management led to a decline of $1.0 million in selling, general and administrative expenses from the second quarter of 2012, which represents a decrease of 53 basis points as a percentage of net sales. The Company is implementing a Customer Master Data Management system to enhance our capabilities and target additional selling opportunities which is scheduled to be placed into service in 2013. This will conclude the first phase of a comprehensive initiative to improve our internal IT infrastructure. Depreciation expense for this asset is expected to add approximately $2.0 million in SG&A expenses in 2013, which may increase our SG&A rates.

The Company generated significant positive cash flow in the nine months ended September 30, 2012. Total cash was $53.5 million compared to $4.6 million at December 31, 2011. In addition, there were no amounts outstanding on the Company’s line of credit at September 30, 2012, compared to $5.3 million outstanding at December 31, 2011. Days sales outstanding were 41 days at September 30, 2012, and inventory turns were 27 times as of September 30, 2012.

“During the quarter, we continued to strengthen our core and improve our profitability while facing weaker demand as a result of macro-economic uncertainty,” said Timothy McGrath, President and Chief Executive Officer. “As reported throughout the industry, the soft IT market is projected to continue throughout 2013. However, I am pleased with our growth in both gross margin and earnings this quarter. We believe our strong management team and business strategies have positioned us well to enhance long-term shareholder value even in this challenging marketplace.”

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.

Conference Call and Webcast

The Company will host a conference call and live web cast today at 4:30 p.m. ET to discuss third quarter 2012 results of operations. To access the conference call, please dial 877-776-4016 (US) or 973-638-3231 (International). The conference call will be available to the general public on a live webcast (in listen only mode) on the Company’s website at  http://ir.pcconnection.com . To access the replay of the call, please dial 800-585-8367 or 404-537-3406 and enter the access code 18834926.

About PC Connection, Inc.

PC Connection, Inc., a Fortune 1000 company, has four sales companies: PC Connection Sales Corporation, MoreDirect, Inc., GovConnection, Inc., and Professional Computer Center, Inc. d/b/a ValCom Technology, headquartered in Merrimack, NH, Boca Raton, FL, Rockville, MD, and Itasca, IL, respectively. All four 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 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, and publications, and online at  www.govconnection.com .

Professional Computer Center, Inc. d/b/a ValCom Technology (630-285-0500), www.valcomtechnology.com, provides technology services to medium-to-large corporate organizations utilizing its proprietary cloud-based IT service management software, WebSPOC™. Through its experienced technical service personnel, ValCom Technology provides network, server, storage, mission-critical onsite support, installation, and hosting of lifecycle services.

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 Annual Report on Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 2011. More specifically, the statements in this release concerning the Company’s outlook for gross margin and selling, general, and administrative expenses in 2012 and other statements of a non-historical basis (including statements regarding the Company’s ability to grow revenues, improve gross margins, increase market share, control costs, 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 integrate the operations of ValCom Technology, the ability of the Company to gain or maintain market share, the ability of the Company to match cost levels with changes in revenues, 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.

 	
CONSOLIDATED SELECTED FINANCIAL INFORMATION	
At or for the Three Months Ended September 30,	 	2012	 	2011	 	 	
 	 	 	 	% of	 	 	 	% of	 	%	
(Amounts and shares in thousands, except operating data, P/E ratio, and per share data)	 	 	 	Net Sales	 	 	 	Net Sales	 	Change	
 	 	 	 	 	 	 	 	 	 	 	
Operating Data:	 	 	 	 	 	 	 	 	 	 	
Net sales	 	$	561,294	 	 	 	$	575,646	 	 	 	(2%)	
Diluted earnings per share	 	$	0.37	 	 	 	$	0.35	 	 	 	6%	
 	 	 	 	 	 	 	 	 	 	 	
Gross margin	 	 	12.9%	 	 	 	 	12.2%	 	 	 	 	
Operating margin	 	 	2.9%	 	 	 	 	2.8%	 	 	 	 	
Return on equity (1)	 	 	13.6%	 	 	 	 	13.8%	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	
Orders entered (2)	 	 	328,400	 	 	 	 	347,000	 	 	 	(5%)	
Average order size (2)	 	$	2,045	 	 	 	$	2,003	 	 	 	2%	
 	 	 	 	 	 	 	 	 	 	 	
Inventory turns (1)	 	 	27	 	 	 	 	28	 	 	 	 	
Days sales outstanding	 	 	41	 	 	 	 	41	 	 	 	 	

Product Mix:	 	 	 	 	 	 	 	 	 	 	
Notebook	 	$	108,474	 	19%	 	$	98,210	 	17%	 	10%	
Desktop/Server	 	 	84,061	 	15	 	 	98,994	 	17	 	(15%)	
Software	 	 	81,902	 	15	 	 	82,204	 	14	 	-	
Net/Com Product	 	 	54,718	 	10	 	 	56,627	 	10	 	(3%)	
Video, Imaging and Sound	 	 	51,907	 	9	 	 	64,552	 	11	 	(20%)	
Printer and Printer Supplies	 	 	41,227	 	7	 	 	40,691	 	7	 	1%	
Storage	 	 	37,090	 	7	 	 	39,266	 	7	 	(6%)	
Memory and System Enhancement	 	 	18,829	 	3	 	 	17,745	 	3	 	6%	
Accessory/Other	 	 	83,086	 	15	 	 	77,357	 	14	 	7%	
Total Net Sales	 	$	561,294	 	100%	 	$	575,646	 	100%	 	(2%)	
 	 	 	 	 	 	 	 	 	 	 	
Net Sales of Enterprise Server and Networking Products (included in the above Product Mix):	
 	 	 	 	 	 	 	 	 	 	 	
 	 	$	194,493	 	35%	 	$	200,580	 	35%	 	(3%)	

Stock Performance Indicators:	 	 	 	 	 	 	 	 	 	 	
Actual shares outstanding	 	 	26,463	 	 	 	 	26,309	 	 	 	 	
Total book value per share	 	$	11.28	 	 	 	$	10.49	 	 	 	 	
Tangible book value per share	 	$	9.18	 	 	 	$	8.34	 	 	 	 	
Closing price	 	$	11.51	 	 	 	$	7.98	 	 	 	 	
Market capitalization	 	$	304,589	 	 	 	$	209,946	 	 	 	 	
Pro forma trailing price/earnings ratio	 	 	9.5	 	 	 	 	7.5	 	 	 	 	
LTM Adjusted EBITDA (3)	 	$	60,001	 	 	 	$	54,282	 	 	 	 	
Market capitalization/LTM EBITDA	 	 	5.1	 	 	 	 	3.9	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	
(1) Annualized	
(2) Does not reflect cancellations or returns	
(3) Adjusted EBITDA is defined as EBITDA (earnings before interest, taxes, depreciation and amortization) adjusted for stock-based compensation and special charges.	

 	
REVENUE AND MARGIN INFORMATION	
For the Three Months Ended September 30,	 	2012	 	2011	
 	 	Net	 	Gross	 	Net	 	Gross	
(amounts in thousands)	 	Sales	 	Margin	 	Sales	 	Margin	
 	 	 	 	 	 	 	 	 	
SMB	 	$	219,235	 	15.4	%	 	$	224,453	 	15.6	%	
Large Account	 	 	192,818	 	11.5	 	 	 	206,564	 	9.8	 	
Public Sector	 	 	149,241	 	10.8	 	 	 	144,629	 	10.5	 	
Total	 	$	561,294	 	12.9	%	 	$	575,646	 	12.2	%	

 	
CONDENSED CONSOLIDATED STATEMENTS OF INCOME	
Three Months Ended September 30,	 	2012	 	2011	
(amounts in thousands, except per share data)	 	Amount	 	% of Net Sales	 	Amount	 	% of Net Sales	
 	 	 	 	 	 	 	 	 	
Net sales	 	$	561,294	 	 	100.0	%	 	$	575,646	 	 	100.0	%	
Cost of sales	 	 	489,088	 	 	87.1	 	 	 	505,210	 	 	87.8	 	
Gross profit	 	 	72,206	 	 	12.9	 	 	 	70,436	 	 	12.2	 	
 	 	 	 	 	 	 	 	 	
Selling, general and administrative expenses	 	 	55,906	 	 	10.0	 	 	 	54,554	 	 	9.4	 	
Income from operations	 	 	16,300	 	 	2.9	 	 	 	15,882	 	 	2.8	 	
 	 	 	 	 	 	 	 	 	
Interest expense, net	 	 	(63	)	 	-	 	 	 	(61	)	 	-	 	
Income tax provision	 	 	(6,336	)	 	(1.1	)	 	 	(6,435	)	 	(1.2	)	
Net income	 	$	9,901	 	 	1.8	%	 	$	9,386	 	 	1.6	%	
 	 	 	 	 	 	 	 	 	
Earnings per common share:	 	 	 	 	 	 	 	 	
Basic	 	$	0.37	 	 	 	 	$	0.35	 	 	 	
Diluted	 	$	0.37	 	 	 	 	$	0.35	 	 	 	
 	 	 	 	 	 	 	 	 	
Weighted average common shares outstanding:	 	 	 	 	 	 	 	 	
Basic	 	 	26,470	 	 	 	 	 	26,615	 	 	 	
Diluted	 	 	26,660	 	 	 	 	 	26,692	 	 	 	

 	
CONDENSED CONSOLIDATED STATEMENTS OF INCOME	
Nine Months Ended September 30,	 	2012	 	2011	
(amounts in thousands, except per share data)	 	Amount	 	% of Net Sales	 	Amount	 	% of Net Sales	
 	 	 	 	 	 	 	 	 	
Net sales	 	$	1,602,626	 	 	100.0	%	 	$	1,550,133	 	 	100.0	%	
Cost of sales	 	 	1,392,238	 	 	86.9	 	 	 	1,353,984	 	 	87.4	 	
Gross profit	 	 	210,388	 	 	13.1	 	 	 	196,149	 	 	12.6	 	
 	 	 	 	 	 	 	 	 	
Selling, general and administrative expenses	 	 	169,259	 	 	10.5	 	 	 	160,321	 	 	10.3	 	
Special charges	 	 	1,135	 	 	0.1	 	 	 	-	 	 	-	 	
Income from operations	 	 	39,994	 	 	2.5	 	 	 	35,828	 	 	2.3	 	
 	 	 	 	 	 	 	 	 	
Interest expense, net	 	 	(110	)	 	-	 	 	 	(92	)	 	-	 	
Income tax provision	 	 	(15,682	)	 	(1.0	)	 	 	(14,376	)	 	(0.9	)	
Net income	 	$	24,202	 	 	1.5	%	 	$	21,360	 	 	1.4	%	
 	 	 	 	 	 	 	 	 	
Earnings per common share:	 	 	 	 	 	 	 	 	
Basic	 	$	0.92	 	 	 	 	$	0.80	 	 	 	
Diluted	 	$	0.91	 	 	 	 	$	0.80	 	 	 	
 	 	 	 	 	 	 	 	 	
Weighted average common shares outstanding:	 	 	 	 	 	 	 	 	
Basic	 	 	26,437	 	 	 	 	 	26,788	 	 	 	
Diluted	 	 	26,586	 	 	 	 	 	26,860	 	 	 	

 	
A RECONCILIATION BETWEEN GAAP AND PRO FORMA NET INCOME	
Nine Months Ended September 30,	 	 	2012	 	 	2011	
(provided for comparison of our operating results without special charges, amounts in thousands)	 	 	 	 	
GAAP net income	 	$	24,202	 	$	21,360	
Special charges (after tax)	 	 	681	 	 	-	
Pro forma net income	 	$	24,883	 	$	21,360	
 	 	 	 	 	
Pro forma diluted earnings per common share	 	$	0.93	 	$	0.80	

 	
EBITDA AND ADJUSTED EBITDA	
 	 	 	 	 	 	 	 	 	 	 	 	 	
A reconciliation of EBITDA and Adjusted EBITDA is detailed below. EBITDA is defined as earnings before interest, taxes, depreciation, and amortization. Adjusted EBITDA means EBITDA adjusted for certain items which are described in the table below. Both EBITDA and Adjusted EBITDA are considered non-GAAP financial measures. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position, or cash flows that either excludes or includes amounts that are not normally included or excluded in the most directly comparable measure calculated and presented in accordance with GAAP. We believe that EBITDA and Adjusted EBITDA provide helpful information with respect to our operating performance including our ability to fund our future capital expenditures and working capital requirements. Adjusted EBITDA also provides helpful information as it is the primary measure used in certain financial covenants contained in our credit agreements.	
 	 	 	 	 	 	 	 	 	 	 	 	 	
(amounts in thousands)	 	Three Months Ended September 30,	 	LTM Ended September 30, (1)	
 	 	 	2012	 	 	2011	 	% Change	 	 	 	2012	 	 	2011	 	% Change	 	
Net income	 	$	9,901	 	$	9,386	 	 	 	$	31,629	 	$	28,238	 	 	
Depreciation and amortization	 	 	1,670	 	 	1,484	 	 	 	 	6,429	 	 	5,650	 	 	
Income tax expense	 	 	6,336	 	 	6,435	 	 	 	 	19,950	 	 	19,045	 	 	
Interest expense, net	 	 	63	 	 	61	 	 	 	 	198	 	 	223	 	 	
EBITDA	 	 	17,970	 	 	17,366	 	 	 	 	58,206	 	 	53,156	 	 	
Stock-based compensation	 	 	157	 	 	258	 	 	 	 	1,502	 	 	1,126	 	 	
Other special charges	 	 	-	 	 	-	 	 	 	 	293	 	 	-	 	 	
Adjusted EBITDA	 	$	18,127	 	$	17,624	 	3	%	 	$	60,001	 	$	54,282	 	10	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	
(1) LTM: Last twelve months	

 	
 	 	September 30,	 	December 31,	
CONDENSED CONSOLIDATED BALANCE SHEETS	 	 	2012	 	 	 	2011	 	
(amounts in thousands)	 	 	 	 	
 	 	 	 	 	
ASSETS	 	 	 	 	
Current Assets:	 	 	 	 	
Cash and cash equivalents	 	$	53,528	 	 	$	4,615	 	
Accounts receivable, net	 	 	270,308	 	 	 	295,188	 	
Inventories	 	 	65,478	 	 	 	77,437	 	
Prepaid expenses and other current assets	 	 	3,880	 	 	 	4,713	 	
Deferred income taxes	 	 	3,398	 	 	 	4,436	 	
Income taxes receivable	 	 	1,899	 	 	 	1,927	 	
Total current assets	 	 	398,491	 	 	 	388,316	 	
Property and equipment, net	 	 	25,399	 	 	 	22,570	 	
Goodwill	 	 	51,276	 	 	 	51,276	 	
Other intangibles, net	 	 	4,403	 	 	 	5,205	 	
Other assets	 	 	734	 	 	 	652	 	
Total Assets	 	$	480,303	 	 	$	468,019	 	
 	 	 	 	 	
LIABILITIES AND STOCKHOLDERS’ EQUITY	 	 	 	 	
Current Liabilities:	 	 	 	 	
Current maturities of capital lease obligation to affiliate	 	$	1,055	 	 	$	971	 	
Borrowings under bank line of credit	 	 	-	 	 	 	5,267	 	
Accounts payable	 	 	128,460	 	 	 	130,900	 	
Accrued expenses and other liabilities	 	 	25,182	 	 	 	30,902	 	
Accrued payroll	 	 	14,384	 	 	 	12,964	 	
Total current liabilities	 	 	169,081	 	 	 	181,004	 	
Deferred income taxes	 	 	9,511	 	 	 	9,026	 	
Other liabilities	 	 	3,042	 	 	 	3,471	 	
Capital lease obligation to affiliate, less current maturities	 	 	187	 	 	 	989	 	
Total Liabilities	 	 	181,821	 	 	 	194,490	 	
Stockholders’ Equity:	 	 	 	 	
Common stock	 	 	277	 	 	 	276	 	
Additional paid-in capital	 	 	101,363	 	 	 	99,957	 	
Retained earnings	 	 	206,476	 	 	 	182,274	 	
Treasury stock at cost	 	 	(9,634	)	 	 	(8,978	)	
Total Stockholders’ Equity	 	 	298,482	 	 	 	273,529	 	
Total Liabilities and Stockholders’ Equity	 	$	480,303	 	 	$	468,019	 	

 	 	 	 	 	
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS	 	 	 	 	
Nine Months Ended September 30,	 	 	2012	 	 	 	2011	 	
(amounts in thousands)	 	 	 	 	
Cash Flows from Operating Activities:	 	 	 	 	
Net income	 	$	24,202	 	 	$	21,360	 	
Adjustments to reconcile net income to net cash provided by operating activities:	 	 	 	 	
Depreciation and amortization	 	 	4,851	 	 	 	4,375	 	
Provision for doubtful accounts	 	 	1,453	 	 	 	1,765	 	
Deferred income taxes	 	 	1,523	 	 	 	1,933	 	
Stock-based compensation expense	 	 	1,376	 	 	 	698	 	
Loss on disposal of fixed assets	 	 	80	 	 	 	13	 	
Income tax benefit from stock-based compensation	 	 	213	 	 	 	68	 	
Excess tax benefit from exercise of stock options	 	 	(15	)	 	 	-	 	
Fair value adjustment to contingent consideration	 	 	(44	)	 	 	(20	)	
 	 	 	 	 	
Changes in assets and liabilities:	 	 	 	 	
Accounts receivable	 	 	23,427	 	 	 	(30,407	)	
Inventories	 	 	11,959	 	 	 	1,617	 	
Prepaid expenses and other current assets	 	 	861	 	 	 	1,786	 	
Other non-current assets	 	 	(82	)	 	 	(157	)	
Accounts payable	 	 	(2,398	)	 	 	22,100	 	
Accrued expenses and other liabilities	 	 	(3,725	)	 	 	(2,761	)	
Net cash provided by operating activities	 	 	63,681	 	 	 	22,370	 	
 	 	 	 	 	
Cash Flows from Investing Activities:	 	 	 	 	
Purchases of property and equipment	 	 	(7,010	)	 	 	(8,483	)	
Proceeds from sale of equipment	 	 	10	 	 	 	-	 	
Acquisition of ValCom Technology, net of cash acquired	 	 	-	 	 	 	(4,745	)	
Purchase of intangible asset	 	 	-	 	 	 	(450	)	
Net cash used for investing activities	 	 	(7,000	)	 	 	(13,678	)	
 	 	 	 	 	
Cash Flows from Financing Activities:	 	 	 	 	
Repayment of short-term borrowings	 	 	(12,471	)	 	 	-	 	
Proceeds from short-term borrowings	 	 	7,204	 	 	 	-	 	
Purchase of treasury shares	 	 	(1,466	)	 	 	(3,823	)	
Payment of contingent consideration	 	 	(960	)	 	 	-	 	
Payment of payroll taxes on stock-based compensation through shares withheld	 	 	(504	)	 	 	(206	)	
Repayment of capital lease obligation to affiliate	 	 	(718	)	 	 	(643	)	
Issuance of stock under Employee Stock Purchase Plan	 	 	260	 	 	 	183	 	
Exercise of stock options	 	 	872	 	 	 	183	 	
Excess tax benefit from exercise of stock options	 	 	15	 	 	 	-	 	
Net cash used for financing activities	 	 	(7,768	)	 	 	(4,306	)	
Increase in cash and cash equivalents	 	 	48,913	 	 	 	4,386	 	
Cash and cash equivalents, beginning of period	 	 	4,615	 	 	 	35,374	 	
Cash and cash equivalents, end of period	 	$	53,528	 	 	$	39,760	 	
 	 	 	 	 	
Non-cash Investing and Financing Activities:	 	 	 	 	
Issuance of nonvested stock from treasury	 	$	1,314	 	 	$	633	 	
Accrued capital expenditures	 	 	388	 	 	 	746	 	
Contingent consideration recorded in accrued expenses and other liabilities	 	 	-	 	 	 	1,900	 	
pccc-g

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