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 2, 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 August 2, 2012, PC Connection, Inc. announced its financial results for the quarter ended June 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 August 2, 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:	August 2, 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 August 2, 2012.	

Exhibit 99.1

PC Connection, Inc. Reports Second Quarter Results

SECOND QUARTER SUMMARY:
Diluted earnings per share: $0.33 per share, up 18% year over year
Net sales: $542.6 million, up 6% year over year
Gross profit: 13.2% of net sales, up $5 million, or 7% y/y
Cash balance increased to $63.4 million, from $4.6 million at 12/31/2011

MERRIMACK, N.H.--(BUSINESS WIRE)--August 2, 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 June 30, 2012. Net sales for the three months ended June 30, 2012 were $542.6 million, a year-over-year increase of $30.0 million or 5.9%. Net income for the quarter was $8.8 million, or $0.33 per share, compared to net income of $7.5 million, or $0.28 per share, for the corresponding prior year quarter.

Net sales for the six months ended June 30, 2012 were $1,041.3 million, an increase of $66.8 million or 6.9%, compared to $974.5 million for the six months ended June 30, 2011. Net income for the six months ended June 30, 2012 was $14.3 million, or $0.54 per share, compared to net income of $12.0 million, or $0.44 per share, for the six months ended June 30, 2011. Earnings before interest, taxes, depreciation and amortization, stock-based compensation expense, and special charges (“Adjusted EBITDA”) totaled $59.6 million for the twelve months ended June 30, 2012, as compared to $52.8 million for the twelve months ended June 30, 2011.

During 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 $229.6 million in the second quarter of 2012. Sales to small and medium businesses increased by 3.5% year over year, however, when combined with lower consumer and SOHO sales, overall sales for this segment decreased by 1.1%.
Net sales for the Large Account segment increased by 22.5% to $197.0 million compared to net sales in the second quarter of 2011. Sales for this segment increased from both new and existing customers.
Net sales to government and education customers (Public Sector segment) decreased year over year by 3.1% to $116.0 million. Sales to state and local government and educational institutions were relatively unchanged compared to last year, while sales to the federal government decreased by $4.0 million year over year.

Quarterly Sales by Product Mix:
Notebook sales, the Company’s largest product category, increased by 12% year over year and accounted for 19% of net sales in the second quarter of 2012 compared to 18% of net sales in the prior year quarter. Higher unit sales led to the growth in this product category as average selling prices were generally unchanged.
Software sales increased by 11%, accounting for 16% of net sales in the second quarter of 2012, compared to 15% in the prior year quarter. Software sales increased in both the Large Account and SMB segments.
Desktop/server sales increased slightly year over year, accounting for 15% of net sales in the second quarter of 2012 compared to 16% of net sales in the prior year quarter. Desktop sales grew primarily as a result of increased unit sales in our Large Account segment, as ASPs decreased by single digits on a rate basis.
Net/Com products continued to grow with an increase of 5% year over year, accounting for 10% of net sales in the second quarter of 2012 and 2011. Growth in this category was driven by a 19% year-over-year increase in Net/Com product sales in our Large Account segment.

Overall gross profit dollars for the quarter increased by $4.7 million, or 7%, compared to the second quarter of 2011. Consolidated gross margin, as a percentage of net sales, increased year over year by 14 basis points to 13.2% in the second quarter of 2012. Increased utilization of deal registrations and data analytic software, as well as increased sales of higher margin products and services, contributed to the margin increase. SMB and Public Sector increased their gross margin compared to the prior year quarter, while Large Account experienced a decline.

Total selling, general and administrative expenses for the quarter increased year over year by $2.4 million, or 4.5%, but improved as a percentage of net sales from 10.6% for the second quarter of 2011 to 10.5% for the second quarter of 2012. The percentage decrease was primarily due to leveraging fixed costs over a larger sales base. In the latter half of 2012, the Company is scheduled to implement a Master Data Management system which concludes 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 six months ended June 30, 2012. Total cash was $63.4 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 June 30, 2012, compared to $5.3 million outstanding at December 31, 2011. Days sales outstanding were 41 days at June 30, 2012, and inventory turns improved to 28 times as of June 30, 2012.

“I am pleased with our solid second quarter results and the continued improvement in gross margin and operating income,” said Timothy McGrath, President and Chief Executive Officer. “The macro-economic environment continues to be a challenge, which includes constrained government spending. However, we believe that our strong team and core business strategies position us well for future success.”

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 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 the consumer and small office users under its PC Connection Express brand (888-800-0323) at  www.pcconnectionexpress.com  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.

“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, 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, 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 June 30,	 	2012	 	2011	 	 	
(Amounts and shares in thousands, except operating data, P/E ratio, and per share data)	 	 	 	% of	 	 	 	% of	 	%	
 	 	 	 	Net Sales	 	 	 	Net Sales	 	Change	
 	 	 	 	 	 	 	 	 	 	 	
Operating Data:	 	 	 	 	 	 	 	 	 	 	
Net sales	 	$	542,569	 	 	 	 	$	512,561	 	 	 	 	6	%	
Diluted earnings per share	 	$	0.33	 	 	 	 	$	0.28	 	 	 	 	18	%	
 	 	 	 	 	 	 	 	 	 	 	
Gross margin	 	 	13.2	%	 	 	 	 	13.0	%	 	 	 	 	
Operating margin	 	 	2.7	%	 	 	 	 	2.4	%	 	 	 	 	
Return on equity (1)	 	 	12.6	%	 	 	 	 	11.3	%	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	
Orders entered (2)	 	 	321,100	 	 	 	 	 	340,600	 	 	 	 	(6	%)	
Average order size (2)	 	$	2,129	 	 	 	 	$	1,883	 	 	 	 	13	%	
 	 	 	 	 	 	 	 	 	 	 	
Inventory turns (1)	 	 	28	 	 	 	 	 	25	 	 	 	 	 	
Days sales outstanding	 	 	41	 	 	 	 	 	41	 	 	 	 	 	

Product Mix:	 	 	 	 	 	 	 	 	 	 	
Notebook	 	$	105,342	 	 	19	%	 	$	94,350	 	 	18	%	 	12	%	
Software	 	 	84,839	 	 	16	 	 	 	76,254	 	 	15	 	 	11	%	
Desktop/Server	 	 	82,424	 	 	15	 	 	 	81,494	 	 	16	 	 	1	%	
Net/Com Product	 	 	52,361	 	 	10	 	 	 	50,089	 	 	10	 	 	5	%	
Video, Imaging and Sound	 	 	49,764	 	 	9	 	 	 	52,326	 	 	10	 	 	(5	%)	
Storage	 	 	38,659	 	 	7	 	 	 	35,720	 	 	7	 	 	8	%	
Printer and Printer Supplies	 	 	37,143	 	 	7	 	 	 	37,557	 	 	7	 	 	(1	%)	
Memory and System Enhancement	 	 	14,985	 	 	3	 	 	 	18,713	 	 	4	 	 	(20	%)	
Accessory/Other	 	 	77,052	 	 	14	 	 	 	66,058	 	 	13	 	 	17	%	
Total Net Sales	 	$	542,569	 	 	100	%	 	$	512,561	 	 	100	%	 	6	%	
 	 	 	 	 	 	 	 	 	 	 	
Net Sales of Enterprise Server and Networking Products (included in the above Product Mix):	
 	 	 	 	 	 	 	 	 	 	 	
 	 	$	193,135	 	 	36	%	 	$	184,279	 	 	36	%	 	5	%	

Stock Performance Indicators:	 	 	 	 	 	 	 	 	 	 	
Actual shares outstanding	 	 	26,352	 	 	 	 	 	26,541	 	 	 	 	 	
Total book value per share	 	$	10.92	 	 	 	 	$	10.13	 	 	 	 	 	
Tangible book value per share	 	$	8.80	 	 	 	 	$	7.99	 	 	 	 	 	
Closing price	 	$	10.62	 	 	 	 	$	8.28	 	 	 	 	 	
Market capitalization	 	$	279,858	 	 	 	 	$	219,759	 	 	 	 	 	
Trailing price/earnings ratio	 	 	9.1	 	 	 	 	 	8.0	 	 	 	 	 	
LTM Adjusted EBITDA (3)	 	$	59,607	 	 	 	 	$	52,810	 	 	 	 	 	
Market capitalization/LTM Adjusted EBITDA	 	 	4.7	 	 	 	 	 	4.2	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	
(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 June 30,	 	2012	 	 	2011	 	
 	 	Net	 	Gross	 	Net	 	Gross	
(amounts in thousands)	 	Sales	 	Margin	 	Sales	 	Margin	
 	 	 	 	 	 	 	 	 	
SMB	 	$	229,619	 	15.5	%	 	$	232,117	 	14.8	%	
Large Account	 	 	196,947	 	11.6	 	 	 	160,717	 	12.0	 	
Public Sector	 	 	116,003	 	11.3	 	 	 	119,727	 	11.1	 	
Total	 	$	542,569	 	13.2	%	 	$	512,561	 	13.0	%	

 	
CONDENSED CONSOLIDATED STATEMENTS OF INCOME	
Three Months Ended June 30,	 	2012	 	 	2011	 	
(amounts in thousands, except per share data)	 	Amount	 	% of Net Sales	 	Amount	 	% of Net Sales	
 	 	 	 	 	 	 	 	 	
Net sales	 	$	542,569	 	 	100.0	%	 	$	512,561	 	 	100.0	%	
Cost of sales	 	 	470,998	 	 	86.8	 	 	 	445,667	 	 	87.0	 	
Gross profit	 	 	71,571	 	 	13.2	 	 	 	66,894	 	 	13.0	 	
 	 	 	 	 	 	 	 	 	
Selling, general and administrative expenses	 	 	56,903	 	 	10.5	 	 	 	54,477	 	 	10.6	 	
Income from operations	 	 	14,668	 	 	2.7	 	 	 	12,417	 	 	2.4	 	
 	 	 	 	 	 	 	 	 	
Interest expense	 	 	(64	)	 	-	 	 	 	(87	)	 	-	 	
Other, net	 	 	(29	)	 	-	 	 	 	32	 	 	-	 	
Income tax provision	 	 	(5,749	)	 	(1.1	)	 	 	(4,882	)	 	(0.9	)	
Net income	 	$	8,826	 	 	1.6	%	 	$	7,480	 	 	1.5	%	
 	 	 	 	 	 	 	 	 	
Earnings per common share:	 	 	 	 	 	 	 	 	
Basic	 	$	0.33	 	 	 	 	$	0.28	 	 	 	
Diluted	 	$	0.33	 	 	 	 	$	0.28	 	 	 	
 	 	 	 	 	 	 	 	 	
Weighted average common shares outstanding:	 	 	 	 	 	 	 	
Basic	 	 	26,403	 	 	 	 	 	26,852	 	 	 	
Diluted	 	 	26,519	 	 	 	 	 	26,923	 	 	 	

CONDENSED CONSOLIDATED STATEMENTS OF INCOME	
Six Months Ended June 30,	 	2012	 	 	2011	 	
(amounts in thousands, except per share data)	 	Amount	 	% of Net Sales	 	Amount	 	% of Net Sales	
 	 	 	 	 	 	 	 	 	
Net sales	 	$	1,041,332	 	 	100.0	%	 	$	974,487	 	 	100.0	%	
Cost of sales	 	 	903,150	 	 	86.7	 	 	 	848,774	 	 	87.1	 	
Gross profit	 	 	138,182	 	 	13.3	 	 	 	125,713	 	 	12.9	 	
 	 	 	 	 	 	 	 	 	
Selling, general and administrative expenses	 	 	113,353	 	 	10.9	 	 	 	105,767	 	 	10.9	 	
Special charges	 	 	1,135	 	 	0.1	 	 	 	-	 	 	-	 	
Income from operations	 	 	23,694	 	 	2.3	 	 	 	19,946	 	 	2.0	 	
 	 	 	 	 	 	 	 	 	
Interest expense	 	 	(64	)	 	-	 	 	 	(128	)	 	-	 	
Other, net	 	 	17	 	 	-	 	 	 	97	 	 	-	 	
Income tax provision	 	 	(9,346	)	 	(0.9	)	 	 	(7,941	)	 	(0.8	)	
Net income	 	$	14,301	 	 	1.4	%	 	$	11,974	 	 	1.2	%	
 	 	 	 	 	 	 	 	 	
Earnings per common share:	 	 	 	 	 	 	 	 	
Basic	 	$	0.54	 	 	 	 	$	0.45	 	 	 	
Diluted	 	$	0.54	 	 	 	 	$	0.44	 	 	 	
 	 	 	 	 	 	 	 	 	
Weighted average common shares outstanding:	 	 	 	 	 	 	 	
Basic	 	 	26,421	 	 	 	 	 	26,877	 	 	 	
Diluted	 	 	26,554	 	 	 	 	 	26,959	 	 	 	

A RECONCILIATION BETWEEN GAAP AND PRO FORMA NET INCOME	
Six Months Ended June 30,	 	 	 	 	 	2012	 	2011	
(provided for comparison of our operating results without special charges, amounts in thousands)	 	
 	 	 	 	 	 	 	 	 	
GAAP net income	 	 	 	 	 	$	14,301	 	$	11,974	
Special charges (after tax)	 	 	 	 	 	 	681	 	 	-	
Pro forma net income	 	 	 	 	 	$	14,982	 	$	11,974	
 	 	 	 	 	 	 	 	 	
Pro forma diluted earnings per common share	 	 	 	 	 	$	0.56	 	$	0.44	

 	
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 June 30,	 	Twelve Months Ended June 30,	
 	 	2012	 	2011	 	% Change	 	 	2012	 	2011	 	% Change	 	
Net income	 	$	8,826	 	$	7,480	 	 	 	$	31,114	 	$	27,478	 	 	
Depreciation and amortization	 	 	1,623	 	 	1,545	 	 	 	 	6,243	 	 	5,427	 	 	
Income tax expense	 	 	5,749	 	 	4,882	 	 	 	 	20,049	 	 	18,253	 	 	
Interest expense, net	 	 	64	 	 	87	 	 	 	 	305	 	 	424	 	 	
EBITDA	 	 	16,262	 	 	13,994	 	 	 	 	57,711	 	 	51,582	 	 	
Stock-based compensation	 	 	172	 	 	235	 	 	 	 	1,603	 	 	1,228	 	 	
Other special charges	 	 	-	 	 	-	 	 	 	 	293	 	 	-	 	 	
Adjusted EBITDA	 	$	16,434	 	$	14,229	 	15	%	 	$	59,607	 	$	52,810	 	13	%	

 	 	June 30,	 	December 31,	
CONDENSED CONSOLIDATED BALANCE SHEETS	 	2012	 	2011	
(amounts in thousands)	 	 	 	 	
 	 	 	 	 	
ASSETS	 	 	 	 	
Current Assets:	 	 	 	 	
Cash and cash equivalents	 	$	63,424	 	 	$	4,615	 	
Accounts receivable, net	 	 	253,734	 	 	 	295,188	 	
Inventories	 	 	74,921	 	 	 	77,437	 	
Prepaid expenses and other current assets	 	 	4,655	 	 	 	4,713	 	
Deferred income taxes	 	 	3,398	 	 	 	4,436	 	
Income taxes receivable	 	 	2,479	 	 	 	1,927	 	
Total current assets	 	 	402,611	 	 	 	388,316	 	
Property and equipment, net	 	 	24,902	 	 	 	22,570	 	
Goodwill	 	 	51,276	 	 	 	51,276	 	
Other intangibles, net	 	 	4,697	 	 	 	5,205	 	
Other assets	 	 	708	 	 	 	652	 	
Total Assets	 	$	484,194	 	 	$	468,019	 	
 	 	 	 	 	
LIABILITIES AND STOCKHOLDERS’ EQUITY	 	 	 	 	
Current Liabilities:	 	 	 	 	
Current maturities of capital lease obligation to affiliate	 	$	1,026	 	 	$	971	 	
Borrowings under bank line of credit	 	 	-	 	 	 	5,267	 	
Accounts payable	 	 	138,199	 	 	 	130,900	 	
Accrued expenses and other liabilities	 	 	31,222	 	 	 	30,902	 	
Accrued payroll	 	 	12,649	 	 	 	12,964	 	
Total current liabilities	 	 	183,096	 	 	 	181,004	 	
Deferred income taxes	 	 	9,877	 	 	 	9,026	 	
Other liabilities	 	 	3,017	 	 	 	3,471	 	
Capital lease obligation to affiliate, less current maturities	 	 	462	 	 	 	989	 	
Total Liabilities	 	 	196,452	 	 	 	194,490	 	
Stockholders’ Equity:	 	 	 	 	
Common stock	 	 	277	 	 	 	276	 	
Additional paid-in capital	 	 	100,716	 	 	 	99,957	 	
Retained earnings	 	 	196,575	 	 	 	182,274	 	
Treasury stock at cost	 	 	(9,826	)	 	 	(8,978	)	
Total Stockholders’ Equity	 	 	287,742	 	 	 	273,529	 	
Total Liabilities and Stockholders’ Equity	 	$	484,194	 	 	$	468,019	 	

 	 	 	 	 	
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS	 	 	 	 	
Six Months Ended June 30,	 	2012	 	2011	
(amounts in thousands)	 	 	 	 	
Cash Flows from Operating Activities:	 	 	 	 	
Net income	 	$	14,301	 	 	$	11,974	 	
Adjustments to reconcile net income to net cash provided by operating activities:	 	 	 	 	
Depreciation and amortization	 	 	3,181	 	 	 	2,889	 	
Provision for doubtful accounts	 	 	690	 	 	 	1,119	 	
Deferred income taxes	 	 	1,889	 	 	 	1,077	 	
Stock-based compensation expense	 	 	1,219	 	 	 	441	 	
Loss on disposal of fixed assets	 	 	85	 	 	 	13	 	
Income tax benefit (deficiency) from stock-based compensation	 	 	41	 	 	 	(6	)	
Excess tax benefit from exercise of stock options	 	 	(5	)	 	 	-	 	
Fair value adjustment to contingent consideration	 	 	(30	)	 	 	(20	)	
 	 	 	 	 	
Changes in assets and liabilities:	 	 	 	 	
Accounts receivable	 	 	40,764	 	 	 	(884	)	
Inventories	 	 	2,516	 	 	 	(845	)	
Prepaid expenses and other current assets	 	 	(494	)	 	 	(680	)	
Other non-current assets	 	 	(56	)	 	 	(165	)	
Accounts payable	 	 	7,385	 	 	 	18,925	 	
Accrued expenses and other liabilities	 	 	541	 	 	 	(962	)	
Net cash provided by operating activities	 	 	72,027	 	 	 	32,876	 	
 	 	 	 	 	
Cash Flows from Investing Activities:	 	 	 	 	
Purchases of property and equipment	 	 	(5,180	)	 	 	(6,120	)	
Proceeds from sale of equipment	 	 	4	 	 	 	-	 	
Acquisition of ValCom Technology, net of cash acquired	 	 	-	 	 	 	(4,745	)	
Purchase of intangible asset	 	 	-	 	 	 	(450	)	
Net cash used for investing activities	 	 	(5,176	)	 	 	(11,315	)	
 	 	 	 	 	
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	)	 	 	(1,477	)	
Payment of contingent consideration	 	 	(960	)	 	 	-	 	
Payment of payroll taxes on stock-based compensation through shares withheld	 	 	(308	)	 	 	(57	)	
Repayment of capital lease obligation to affiliate	 	 	(472	)	 	 	(423	)	
Issuance of stock under Employee Stock Purchase Plan	 	 	260	 	 	 	183	 	
Exercise of stock options	 	 	166	 	 	 	131	 	
Excess tax benefit from exercise of stock options	 	 	5	 	 	 	-	 	
Net cash used for financing activities	 	 	(8,042	)	 	 	(1,643	)	
Increase in cash and cash equivalents	 	 	58,809	 	 	 	19,918	 	
Cash and cash equivalents, beginning of period	 	 	4,615	 	 	 	35,374	 	
Cash and cash equivalents, end of period	 	$	63,424	 	 	$	55,292	 	
 	 	 	 	 	
Non-cash Investing and Financing Activities:	 	 	 	 	
Issuance of nonvested stock from treasury	 	$	926	 	 	$	183	 	
Accrued capital expenditures	 	 	344	 	 	 	454	 	
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