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):   February 2, 2011

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 February 2, 2011, PC Connection, Inc. announced its financial results for the quarter ended December 31, 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 February 2, 2011.	

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:	February 2, 2011	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 February 2, 2011.	

Exhibit 99.1

PC Connection, Inc. Reports Fourth Quarter and Full Year Results

Company Announces Record Quarterly and Annual Sales

MERRIMACK, N.H.--(BUSINESS WIRE)--February 2, 2011--PC Connection, Inc. (NASDAQ: PCCC):
FOURTH QUARTER SUMMARY:	 	 	 	FULL YEAR SUMMARY:	

Net sales: $555.6 million, up 20% y/y	 	 	 	
Net sales: $1.97 billion, up 26% y/y	

SG&A: 9.3% of net sales	 	 	 	
SG&A: 9.7% of net sales	

Operating income: $11.7 million, 2.1% of net sales	 	 	 	
Operating income: $38.7 million, 2.0% of net sales	

Diluted earnings per share: $0.26 per share	 	 	 	
Diluted earnings per share: $0.85 per share	
PC Connection, Inc. (NASDAQ: PCCC), a leading direct marketer of information technology (IT) products and services, today announced results for the quarter and year ended December 31, 2010. Net sales for the fourth quarter were $555.6 million, an increase of $92.5 million or 20.0%, compared to $463.1 million for the three months ended December 31, 2009. Net sales growth was driven primarily by the Company’s small- and medium-sized business (SMB) and Large Account segments. Net income for the three months ended December 31, 2010 was $6.9 million, or $0.26 per share, compared to net income of $4.0 million, or $0.15 per share, for the corresponding prior year period. The strong net sales and operating leverage this quarter resulted in earnings that were 73% higher than earnings in the fourth quarter of 2009.

Net sales for the year ended December 31, 2010 were $1,974.2 million, an increase of $404.5 million or 25.8%, compared to $1,569.7 million for the year ended December 31, 2009. Net income for the year ended December 31, 2010 was $23.0 million, or $0.85 per share, compared to a net loss of $1.2 million, or $0.05 per share, for the year ended December 31, 2009. The year ended December 31, 2009 included special charges that reduced earnings and earnings per share in that year. Pro forma net income for the year ended December 31, 2009, excluding these special charges, was $6.8 million, or $0.25 per share. The Company did not record any special charges in 2010. A reconciliation between net loss on a GAAP basis and pro forma net income for the year ended December 31, 2009 is provided in a table below immediately following the Consolidated Statements of Operations.

“We executed well this quarter and took advantage of an improving economy,” said Patricia Gallup, Chairman and Chief Executive Officer. “We achieved a 73% increase in net income year over year and had record-breaking sales for both the fourth quarter and the year while maintaining cost disciplines in a high-growth mode.”

As previously announced, 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. Prior to its formation, consumer and SOHO sales were generated by and reported within the Company’s SMB segment. In order to facilitate comparison with current period results, 2009 revenue and gross margin 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 28.4% to a record $245.2 million compared to the fourth quarter pro forma sales of 2009. SMB sales also increased in 2010 on a sequential basis by 17.5% over the third quarter, reflecting a strong business demand environment over the last four quarters.
Net sales for MoreDirect, Inc., the Company’s Large Account segment, increased year over year by 36.0% to $168.0 million, topping its previous record for the largest quarterly sales performance. Large account/enterprise customers have increased their IT spending due to the release of pent-up IT demand and continued PC refresh activity. Sales increased from both new and existing customers. Average order size of large account customers also increased year over year for the fifth consecutive quarter, helping to drive the higher sales.
Net sales to government and education customers (Public Sector segment) decreased year over year by 1.2% to $117.4 million. An increase in education sales was offset by a single-digit decrease in federal contract sales, as tighter stimulus funding mitigated revenues in the fourth quarter. Prior to this quarter, our Public Sector segment had experienced strong net sales growth for six straight quarters.
Net sales to consumers and SOHO customers by PC Connection Express were $24.9 million in the fourth quarter of 2010, decreasing from the $29.8 million of comparable sales in the fourth quarter of 2009. This new company is continuing its efforts to increase its visibility in the marketplace.

Quarterly Sales by Product Mix:
Notebook and PDA sales, the Company’s largest product category, increased by 38% year over year and accounted for 18% of net sales in the fourth quarter of 2010 compared to 15% of net sales in the fourth quarter of 2009. A 25% increase in unit sales for the 2010 quarter as well as an 11% increase in average selling prices, or ASPs, drove the robust year-over-year growth.
Desktop/server sales increased by 48% year over year, accounting for 17% of net sales in the fourth quarter of 2010 compared to 13% of net sales in the fourth quarter of 2009. Desktop sales grew year over year as a result of a 42% increase in unit sales and a 17% increase in ASPs. Server sales grew year over year as a result of a 35% increase in unit sales, as ASPs were largely unchanged.
Software sales increased by 32% year over year, accounting for 15% of net sales in the fourth quarter of 2010 compared to 14% of net sales in the fourth quarter of 2009. Our three primary segments each grew software sales by better than 20% year over year, with virtualization, infrastructure, and business applications as key growth areas.

Overall gross profit dollars increased by $10.8 million, or 20.6%, to $63.3 million in the fourth quarter of 2010 compared to the prior year quarter primarily due to higher revenues. Consolidated gross margin, as a percentage of net sales, increased slightly to 11.4% in the fourth quarter of 2010 compared to 11.3% in the prior year quarter. MoreDirect, the Company’s Large Account segment, improved gross margins by 40 basis points in the fourth quarter compared to the prior year period, and offset the decrease in our consumer gross margins. Gross margins for both the SMB and Public Sector were largely unchanged year over year.

Overall annualized sales productivity increased by 18% in the fourth quarter of 2010 compared to the fourth quarter of 2009. Sales productivity in the Large Account, SMB, and Public Sector segments increased by 45%, 22%, and 1%, respectively, in the fourth 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 615 at December 31, 2010, compared to 589 at December 31, 2009, and 595 at September 30, 2010.

Total selling, general and administrative expenses for the quarter increased year over year by $5.6 million, or 12.3%, but decreased as a percentage of net sales to 9.3% for the fourth quarter of 2010, from 9.9% for the fourth quarter of 2009. The year-over-year dollar increase was primarily attributable to 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 fourth quarter of 2010 as well as improved expense management.

Ms. Gallup concluded, “I am pleased with our consistent year-over-year quarterly growth in sales and earnings. PC Connection remains committed to making the investments necessary to continue to grow our business and improve operating performance. We believe the momentum we have built has positioned us well to continue our growth in this recovering economy.”

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 September 30, 2010. More specifically, the statements in this release concerning the Company’s outlook for 2011 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 December 31,	 	2010	 	2009	 	 	
(Dollars and shares in thousands, except operating data,	 	 	 	% of	 	 	 	% of	 	%	
price/earnings ratio, and per share data)	 	 	 	Net Sales	 	 	 	Net Sales	 	Change	
 	 	 	 	 	 	 	 	 	 	 	
Operating Data:	 	 	 	 	 	 	 	 	 	 	
Net sales	 	$	555,563	 	 	 	 	$	463,121	 	 	 	 	20	%	
Diluted earnings per share	 	$	0.26	 	 	 	 	$	0.15	 	 	 	 	73	%	
 	 	 	 	 	 	 	 	 	 	 	
Gross margin	 	 	11.4	%	 	 	 	 	11.3	%	 	 	 	 	
Operating margin	 	 	2.1	%	 	 	 	 	1.4	%	 	 	 	 	
Return on equity (1)	 	 	10.9	%	 	 	 	 	6.8	%	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	
Catalogs distributed	 	 	2,057,000	 	 	 	 	 	2,701,000	 	 	 	 	(24	)%	
Orders entered (2)	 	 	345,800	 	 	 	 	 	348,400	 	 	 	 	(1	)%	
Average order size (2)	 	$	1,810	 	 	 	 	$	1,572	 	 	 	 	15	%	
 	 	 	 	 	 	 	 	 	 	 	
Inventory turns (1)	 	 	23	 	 	 	 	 	24	 	 	 	 	 	
Days sales outstanding	 	 	44	 	 	 	 	 	47	 	 	 	 	 	

Product Mix:	 	 	 	 	 	 	 	 	 	 	
Notebook & PDA	 	$	97,266	 	 	18	%	 	$	70,676	 	 	15	%	 	38	%	
Desktop/Server	 	 	91,870	 	 	17	 	 	 	62,035	 	 	13	 	 	48	 	
Software	 	 	82,344	 	 	15	 	 	 	62,536	 	 	14	 	 	32	 	
Video, Imaging & Sound	 	 	69,248	 	 	12	 	 	 	68,570	 	 	15	 	 	1	 	
Net/Com Product	 	 	52,069	 	 	9	 	 	 	52,904	 	 	11	 	 	(2	)	
Printer & Printer Supplies	 	 	39,121	 	 	7	 	 	 	36,403	 	 	8	 	 	7	 	
Storage Device	 	 	36,659	 	 	7	 	 	 	37,061	 	 	8	 	 	(1	)	
Memory & System Enhancements	 	 	23,406	 	 	4	 	 	 	22,326	 	 	5	 	 	5	 	
Accessory/Other	 	 	63,580	 	 	11	 	 	 	50,610	 	 	11	 	 	26	 	
Total	 	$	555,563	 	 	100	%	 	$	463,121	 	 	100	%	 	20	%	

Net Sales of Enterprise Server and Networking Product (included in the above Product Mix):	
 	 	 	 	 	 	 	 	 	 	 	
 	 	$	201,850	 	 	36	%	 	$	186,767	 	 	40	%	 	8	%	

Stock Performance Indicators:	 	 	 	 	 	 	 	 	 	 	
Actual shares outstanding	 	 	26,653	 	 	 	 	 	26,848	 	 	 	 	 	
Total book value per share	 	$	9.67	 	 	 	 	$	8.76	 	 	 	 	 	
Tangible book value per share	 	$	7.80	 	 	 	 	$	6.93	 	 	 	 	 	
Closing price	 	$	8.86	 	 	 	 	$	6.75	 	 	 	 	 	
Market capitalization	 	$	236,146	 	 	 	 	$	181,224	 	 	 	 	 	
Pro forma trailing price/earnings ratio (3)	 	 	10	 	 	 	 	 	27	 	 	 	 	 	

(1) Annualized.	 	 	 	 	 	 	 	 	 	 	
(2) Does not reflect cancellations or returns.	 	 	 	 	 	 	 	 	 	 	
(3) Earnings calculation is based on the last four quarters and excludes special charges recognized in 2009.	

 	 	 	 	 	 	 	 	 	 	 	
REVENUE AND MARGIN INFORMATION	 	 	 	 	 	 	 	 	 	 	
For the Three Months Ended December 31,	 	2010	 	2009	 	 	
 	 	Net	 	Gross	 	Net	 	Gross	 	 	
(Dollars in thousands)	 	Sales	 	Margin (%)	 	Sales	 	Margin (%)	 	 	
 	 	 	 	 	 	 	 	 	 	 	
PC Connection Sales Corporation (SMB) (1)	 	$	245,244	 	 	13.3	%	 	$	191,044	 	 	13.3	%	 	 	
MoreDirect (Large Account)	 	 	168,023	 	 	10.1	 	 	 	123,573	 	 	9.7	 	 	 	
GovConnection (Public Sector)	 	 	117,377	 	 	10.6	 	 	 	118,749	 	 	10.6	 	 	 	
PC Connection Express (Consumer/SOHO) (1)	 	 	24,919	 	 	5.7	 	 	 	29,755	 	 	8.1	 	 	 	
Total	 	$	555,563	 	 	11.4	%	 	$	463,121	 	 	11.3	%	 	 	

(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 December 31,	 	2010	 	2009	
(amounts in thousands, except per share data)	 	Amount	 	% of Net Sales	 	Amount	 	% of Net Sales	
 	 	 	 	 	 	 	 	 	
Net sales	 	$	555,563	 	 	 	100.0	%	 	$	463,121	 	 	 	100.0	%	
Cost of sales	 	 	492,267	 	 	 	88.6	 	 	 	410,622	 	 	 	88.7	 	
Gross profit	 	 	63,296	 	 	 	11.4	 	 	 	52,499	 	 	 	11.3	 	
 	 	 	 	 	 	 	 	 	
Selling, general and administrative expenses	 	 	51,618	 	 	 	9.3	 	 	 	45,984	 	 	 	9.9	 	
Special charges	 	 	-	 	 	 	-	 	 	 	(129	)	 	 	0.0	 	
Income from operations	 	 	11,678	 	 	 	2.1	 	 	 	6,644	 	 	 	1.4	 	
 	 	 	 	 	 	 	 	 	
Interest expense	 	 	(185	)	 	 	-	 	 	 	(132	)	 	 	0.0	 	
Other, net	 	 	54	 	 	 	-	 	 	 	72	 	 	 	0.0	 	
Income tax provision	 	 	(4,669	)	 	 	(0.9	)	 	 	(2,617	)	 	 	(0.5	)	
Net income	 	$	6,878	 	 	 	1.2	%	 	$	3,967	 	 	 	0.9	%	

Earnings per common share:	 	 	 	 	 	 	 	 	
Basic	 	$	0.26	 	 	 	 	$	0.15	 	 	 	
Diluted	 	$	0.26	 	 	 	 	$	0.15	 	 	 	
 	 	 	 	 	 	 	 	 	
Weighted average common shares outstanding:	 	 	 	 	 	 	 	 	
Basic	 	 	26,821	 	 	 	 	 	27,158	 	 	 	
Diluted	 	 	26,888	 	 	 	 	 	27,183	 	 	 	

 	 	 	 	 	 	 	 	 	

CONSOLIDATED STATEMENTS OF OPERATIONS	 	 	 	 	
Years Ended December 31,	 	2010	 	2009	
(amounts in thousands, except per share data)	 	Amount	 	% of Net Sales	 	Amount	 	% of Net Sales	
 	 	 	 	 	 	 	 	 	
Net sales	 	$	1,974,198	 	 	 	100.0	%	 	$	1,569,656	 	 	 	100.0	%	
Cost of sales	 	 	1,744,298	 	 	 	88.3	 	 	 	1,384,860	 	 	 	88.2	 	
Gross profit	 	 	229,900	 	 	 	11.7	 	 	 	184,796	 	 	 	11.8	 	
 	 	 	 	 	 	 	 	 	
Selling, general and administrative expenses	 	 	191,233	 	 	 	9.7	 	 	 	172,654	 	 	 	11.0	 	
Special charges	 	 	-	 	 	 	-	 	 	 	12,826	 	 	 	0.8	 	
Income (loss) from operations	 	 	38,667	 	 	 	2.0	 	 	 	(684	)	 	 	0.0	 	
 	 	 	 	 	 	 	 	 	
Interest expense	 	 	(490	)	 	 	-	 	 	 	(517	)	 	 	0.0	 	
Other, net	 	 	213	 	 	 	-	 	 	 	524	 	 	 	0.0	 	
Income tax provision	 	 	(15,429	)	 	 	(0.8	)	 	 	(545	)	 	 	(0.1	)	
Net income (loss)	 	$	22,961	 	 	 	1.2	%	 	$	(1,222	)	 	 	(0.1	%)	

Earnings (loss) per common share:	 	 	 	 	 	 	 	 	
Basic	 	$	0.85	 	 	 	 	$	(0.05	)	 	 	
Diluted	 	$	0.85	 	 	 	 	$	(0.05	)	 	 	
 	 	 	 	 	 	 	 	 	
Weighted average common shares outstanding:	 	 	 	 	 	 	 	 	
Basic	 	 	27,007	 	 	 	 	 	26,833	 	 	 	
Diluted	 	 	27,053	 	 	 	 	 	26,833	 	 	 	

 	 	 	 	 	 	 	 	 	

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.	
 	
December 31,	 	Three Months Ended	 	Years Ended	
(amounts in thousands)	 	2010	 	2009	 	2010	 	2009	
 	 	 	 	 	 	 	 	 	
GAAP net income (loss)	 	$	6,878	 	 	$	3,967	 	 	$	22,961	 	 	 	($1,222	)	
Special charges (after tax):	 	 	 	 	 	 	 	 	
Software development write-off and related charges	 	 	-	 	 	 	-	 	 	 	-	 	 	 	7,378	 	
Management restructuring	 	 	-	 	 	 	(78	)	 	 	-	 	 	 	693	 	
Total special charges (after tax)	 	 	-	 	 	 	(78	)	 	 	-	 	 	 	8,071	 	
 	 	 	 	 	 	 	 	 	
Pro forma net income	 	$	6,878	 	 	$	3,889	 	 	$	22,961	 	 	$	6,849	 	

 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	
CONSOLIDATED BALANCE SHEETS	 	 	 	 	 	December 31,	 	 	 	December 31,	 	 	 	 	
(amounts in thousands)	 	 	 	 	 	2010	 	 	 	2009	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
ASSETS	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Current Assets:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents	 	 	 	 	 	$	35,374	 	 	 	 	$	46,297	 	 	 	 	 	
Accounts receivable, net	 	 	 	 	 	 	238,011	 	 	 	 	 	218,095	 	 	 	 	 	
Inventories	 	 	 	 	 	 	74,293	 	 	 	 	 	67,391	 	 	 	 	 	
Deferred income taxes	 	 	 	 	 	 	3,813	 	 	 	 	 	3,386	 	 	 	 	 	
Income taxes receivable	 	 	 	 	 	 	1,489	 	 	 	 	 	935	 	 	 	 	 	
Prepaid expenses and other current assets	 	 	 	 	 	 	4,210	 	 	 	 	 	2,750	 	 	 	 	 	
Total current assets	 	 	 	 	 	 	357,190	 	 	 	 	 	338,854	 	 	 	 	 	
Property and equipment, net	 	 	 	 	 	 	13,500	 	 	 	 	 	12,420	 	 	 	 	 	
Goodwill	 	 	 	 	 	 	48,060	 	 	 	 	 	48,060	 	 	 	 	 	
Other intangibles, net	 	 	 	 	 	 	1,786	 	 	 	 	 	1,279	 	 	 	 	 	
Other assets	 	 	 	 	 	 	405	 	 	 	 	 	482	 	 	 	 	 	
Total Assets	 	 	 	 	 	$	420,941	 	 	 	 	$	401,095	 	 	 	 	 	

LIABILITIES AND STOCKHOLDERS’ EQUITY	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Current Liabilities:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Current maturities of capital lease obligation to affiliate	 	 	 	$	870	 	 	 	 	$	780	 	 	 	 	 	
Accounts payable	 	 	 	 	 	 	114,632	 	 	 	 	 	125,120	 	 	 	 	 	
Accrued expenses and other liabilities	 	 	 	 	 	 	23,963	 	 	 	 	 	20,441	 	 	 	 	 	
Accrued payroll	 	 	 	 	 	 	12,652	 	 	 	 	 	8,843	 	 	 	 	 	
Total current liabilities	 	 	 	 	 	 	152,117	 	 	 	 	 	155,184	 	 	 	 	 	
Deferred income taxes	 	 	 	 	 	 	5,822	 	 	 	 	 	3,849	 	 	 	 	 	
Capital lease obligation to affiliate, less current maturities	 	 	 	 	1,960	 	 	 	 	 	2,830	 	 	 	 	 	
Other liabilities	 	 	 	 	 	 	3,403	 	 	 	 	 	3,966	 	 	 	 	 	
Total Liabilities	 	 	 	 	 	 	163,302	 	 	 	 	 	165,829	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Stockholders’ Equity:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Common stock	 	 	 	 	 	 	275	 	 	 	 	 	274	 	 	 	 	 	
Additional paid-in capital	 	 	 	 	 	 	98,871	 	 	 	 	 	97,213	 	 	 	 	 	
Retained earnings	 	 	 	 	 	 	164,075	 	 	 	 	 	141,114	 	 	 	 	 	
Treasury stock at cost	 	 	 	 	 	 	(5,582	)	 	 	 	 	(3,335	)	 	 	 	 	
Total Stockholders’ Equity	 	 	 	 	 	 	257,639	 	 	 	 	 	235,266	 	 	 	 	 	
Total Liabilities and Stockholders’ Equity	 	 	 	 	 	$	420,941	 	 	 	 	$	401,095	 	 	 	 	 	

 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY	
Year Ended December 31, 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	 	-	 	-	 	 	1,531	 	 	-	 	 	-	 	 	 	-	 	 	 	1,531	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Repurchase of common stock for treasury	 	-	 	-	 	 	-	 	 	-	 	 	(455	)	 	 	(3,067	)	 	 	(3,067	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Nonvested stock awards	 	-	 	-	 	 	(820	)	 	-	 	 	128	 	 	 	820	 	 	 	-	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Issuance of common stock under Employee	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Stock Purchase Plan	 	42	 	-	 	 	294	 	 	-	 	 	-	 	 	 	-	 	 	 	294	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Issuance of common stock under stock incentive plans,	 	 	 	 	 	 	 	 	 	 	 	 	
including income tax deficiencies	 	90	 	 	1	 	 	653	 	 	-	 	 	-	 	 	 	-	 	 	 	654	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income and comprehensive income	 	-	 	-	 	 	-	 	 	 	22,961	 	 	-	 	 	 	-	 	 	 	22,961	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance – December 31, 2010	 	27,507	 	$	275	 	$	98,871	 	 	$	164,075	 	 	(854	)	 	$	(5,582	)	 	$	257,639	 	

 	 	 	 	 	 	
 	 	 	 	 	 	
CONSOLIDATED STATEMENTS OF CASH FLOWS	 	 	 	 	 	
Years Ended December 31, (amounts in thousands)	 	 	2010	 	2009	
 	 	 	 	 	 	
Cash Flows from Operating Activities:	 	 	 	 	 	
 	 	 	 	 	 	
Net income (loss)	 	 	$	22,961	 	 	$	(1,222	)	
Adjustments to reconcile net income (loss) to net cash (used for) provided by	 	 	 	 	 	
operating activities:	 	 	 	 	 	
Non-cash portion of special charges	 	 	 	-	 	 	 	11,625	 	
Depreciation and amortization	 	 	 	5,430	 	 	 	6,796	 	
Provision for doubtful accounts	 	 	 	2,372	 	 	 	2,354	 	
Deferred income taxes	 	 	 	1,546	 	 	 	(1,476	)	
Stock-based compensation expense	 	 	 	1,531	 	 	 	1,420	 	
Income tax deficiency from stock-based compensation	 	 	 	(16	)	 	 	(106	)	
Loss on disposal of fixed assets	 	 	 	2	 	 	 	16	 	

Changes in assets and liabilities:	 	 	 	 	 	
Accounts receivable	 	 	 	(22,288	)	 	 	(34,564	)	
Inventories	 	 	 	(6,902	)	 	 	(6,578	)	
Prepaid expenses and other current assets	 	 	 	(2,014	)	 	 	1,389	 	
Other non-current assets	 	 	 	77	 	 	 	(97	)	
Accounts payable	 	 	 	(10,329	)	 	 	23,471	 	
Accrued expenses and other liabilities	 	 	 	6,768	 	 	 	2,682	 	
Net cash (used for) provided by operating activities	 	 	 	(862	)	 	 	5,710	 	

Cash Flows from Investing Activities:	 	 	 	 	 	
 	 	 	 	 	 	
Purchases of property and equipment	 	 	 	(6,387	)	 	 	(5,569	)	
Proceeds from sale of property and equipment	 	 	 	9	 	 	 	2	 	
Purchase of intangible asset	 	 	 	(800	)	 	 	-	 	
Net cash used for investing activities	 	 	 	(7,178	)	 	 	(5,567	)	

Cash Flows from Financing Activities:	 	 	 	 	 	
 	 	 	 	 	 	
Proceeds from short-term borrowings	 	 	 	9,485	 	 	 	22,401	 	
Repayment of short-term borrowings	 	 	 	(9,485	)	 	 	(22,401	)	
Purchase of treasury shares	 	 	 	(3,067	)	 	 	(425	)	
Repayment of capital lease obligation	 	 	 	(780	)	 	 	(699	)	
Exercise of stock options	 	 	 	670	 	 	 	-	 	
Issuance of stock under Employee Stock Purchase Plan	 	 	 	294	 	 	 	275	 	
Net cash used for financing activities	 	 	 	(2,883	)	 	 	(849	)	
Decrease in cash and cash equivalents	 	 	 	(10,923	)	 	 	(706	)	
Cash and cash equivalents, beginning of period	 	 	 	46,297	 	 	 	47,003	 	
Cash and cash equivalents, end of period	 	 	$	35,374	 	 	$	46,297	 	
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CONTACT:
PC Connection
Stephen Baldridge, 603-683-2322
Sr. Vice President of Finance & Corporate Controller