PC Connection Inc. Files 10-Q for Q2 2024

TL;DR

PC Connection Inc. dropped its Q2 2024 10-Q. Financials look steady.

AI Summary

PC Connection Inc. filed its 10-Q for the period ending June 30, 2024. The filing details financial performance and operational updates for the second quarter. Key financial data and disclosures relevant to investors are presented, including balance sheet items and equity changes.

Why It Matters

This filing provides investors with the latest financial snapshot of PC Connection Inc., crucial for understanding the company's performance and making informed investment decisions.

Risk Assessment

Risk Level: low — This is a routine quarterly filing providing standard financial disclosures.

Key Numbers

• N/A — Revenue (Specific revenue figures are not detailed in the provided header information.)
• N/A — Net Income (Specific net income figures are not detailed in the provided header information.)
• N/A — Total Assets (Specific total asset figures are not detailed in the provided header information.)

Key Players & Entities

• PC CONNECTION INC (company) — Filer
• 20240630 (date) — Reporting Period End Date
• 20240731 (date) — Filing Date

FAQ

Key Financial Figures

• $0.01 — ange on which registered Common Stock, $0.01 par value CNXN Nasdaq Global Select

Filing Documents

• cnxn-20240630x10q.htm (10-Q) — 2243KB
• cnxn-20240630xex31d1.htm (EX-31.1) — 16KB
• cnxn-20240630xex31d2.htm (EX-31.2) — 16KB
• cnxn-20240630xex32d1.htm (EX-32.1) — 8KB
• cnxn-20240630xex32d2.htm (EX-32.2) — 8KB
• 0001558370-24-010484.txt ( ) — 7717KB
• cnxn-20240630.xsd (EX-101.SCH) — 28KB
• cnxn-20240630_cal.xml (EX-101.CAL) — 47KB
• cnxn-20240630_def.xml (EX-101.DEF) — 115KB
• cnxn-20240630_lab.xml (EX-101.LAB) — 248KB
• cnxn-20240630_pre.xml (EX-101.PRE) — 198KB
• cnxn-20240630x10q_htm.xml (XML) — 1734KB

FINANCIAL INFORMATION

PART I FINANCIAL INFORMATION Page ITEM 1. Unaudited Condensed Consolidated Financial Statements: Condensed Consolidated Balance Sheets–June 30, 2024 and December 31, 2023 1 Condensed Consolidated Statements of Income–Three and Six Months Ended June 30, 2024 and 2023 2 Condensed Consolidated Statements of Other Comprehensive Income–Three and Six Months Ended June 30, 2024 and 2023 3 Condensed Consolidated Statements of Stockholders' Equity–Three and Six Months Ended June 30, 2024 and 2023 4 Condensed Consolidated Statements of Cash Flows–Six Months Ended June 30, 2024 and 2023 5 Notes to Unaudited Condensed Consolidated Financial Statements 6 ITEM 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 15 ITEM 3 .

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 27 ITEM 4 .

Controls and Procedures

Controls and Procedures 28

OTHER INFORMATION

PART II OTHER INFORMATION ITEM 1 .

Legal Proceedings

Legal Proceedings 29 ITEM 1A .

Risk Factors

Risk Factors 29 ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds 29 ITE M 5. Other Information 29 ITEM 6 . Exhibits 30

SIGNATURES

SIGNATURES 31 Table of Contents

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS PC CONNECTION, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEET S (Unaudited) (amounts in thousands) June 30, December 31, 2024 2023 ASSETS Current Assets: Cash and cash equivalents $ 128,213 $ 144,954 Short-term investments 257,590 152,232 Accounts receivable, net 598,826 606,834 Inventories, net 136,613 124,179 Income taxes receivable 9,281 4,348 Prepaid expenses and other current assets 16,982 16,092 Total current assets 1,147,505 1,048,639 Property and equipment, net 54,376 56,658 Right-of-use assets 3,917 4,340 Goodwill 73,602 73,602 Intangibles, net 2,819 3,428 Other assets 1,266 1,714 Total Assets $ 1,283,485 $ 1,188,381 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable $ 317,111 $ 263,682 Accrued payroll 23,004 20,440 Accrued expenses and other liabilities 48,527 43,843 Total current liabilities 388,642 327,965 Deferred income taxes 17,418 15,844 Noncurrent operating lease liabilities 2,497 3,181 Other liabilities — 624 Total Liabilities 408,557 347,614 Stockholders' Equity: Common stock 293 293 Additional paid-in capital 134,967 130,878 Retained earnings 794,942 760,898 Accumulated other comprehensive (loss) income ( 103 ) 81 Treasury stock, at cost ( 55,171 ) ( 51,383 ) Total Stockholders' Equity 874,928 840,767 Total Liabilities and Stockholders' Equity $ 1,283,485 $ 1,188,381 See notes to unaudited condensed consolidated financial statements. 1 Table of Contents PC CONNECTION, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOM E (Unaudited) (amounts in thousands, except per share data) Three Months Ended Six Months Ended June 30, June 30, 2024 2023 2024 2023 Net sales $ 736,479 $ 733,547 $ 1,368,504 $ 1,461,092 Cost of sales 599,937 605,770 1,113,890 1,211,019 Gr

FINANCIAL INFORMATION

PART IFINANCIAL INFORMATION

inancial Statements

Item 1Financial Statements NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENT S (amounts in thousands, except per share data) Note 1– Basis of Presentation The accompanying unaudited condensed consolidated financial statements of PC Connection, Inc. and its subsidiaries, or the Company, have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission, or SEC, regarding interim financial reporting and in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP. Such principles were applied on a basis consistent with the accounting policies described in the Company's Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2023. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of the results of operations for the interim periods reported and of the Company's financial condition as of the date of the interim balance sheet. The Company considers events or transactions that occur after the balance sheet date but before the financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. Subsequent events have been evaluated through the date of issuance of these financial statements. The operating results for the three and six months ended June 30, 2024 may not be indicative of the results expected for any succeeding quarter or the entire year ending December 31, 2024. Use of Estimates in the Preparation of Financial Statements The preparation of financial statements

Business

Business Solutions Public Sector Solutions Total Notebooks/Mobility $ 89,802 $ 97,841 $ 69,816 $ 257,459 Desktops 52,680 20,105 12,792 85,577 Software 21,628 37,775 9,571 68,974 Servers/Storage 15,691 34,056 13,640 63,387 Net/Com Products 19,107 19,845 14,312 53,264 Displays and Sound 37,265 19,981 16,745 73,991 Accessories 38,645 28,663 11,470 78,778 Other Hardware/Services 23,990 19,932 11,127 55,049 Total net sales $ 298,808 $ 278,198 $ 159,473 $ 736,479 Three Months Ended June 30, 2023 Enterprise Solutions

Business

Business Solutions Public Sector Solutions Total Notebooks/Mobility $ 87,590 $ 88,081 $ 74,231 $ 249,902 Desktops 33,572 19,011 17,971 70,554 Software 17,561 33,828 13,059 64,448 Servers/Storage 18,705 22,605 11,959 53,269 Net/Com Products 28,727 28,584 22,233 79,544 Displays and Sound 27,322 23,654 16,785 67,761 Accessories 41,095 26,506 16,488 84,089 Other Hardware/Services 32,581 18,758 12,641 63,980 Total net sales $ 287,153 $ 261,027 $ 185,367 $ 733,547 The following tables represent a disaggregation of revenue from arrangements with customers for the six months ended June 30, 2024 and 2023, along with the segment for each category (in thousands). Six Months Ended June 30, 2024 Enterprise Solutions

Business

Business Solutions Public Sector Solutions Total Notebooks/Mobility $ 180,033 $ 189,997 $ 108,698 $ 478,728 Desktops 90,717 38,223 21,539 150,479 Software 48,748 68,427 15,121 132,296 Servers/Storage 28,058 55,667 22,146 105,871 Net/Com Products 39,069 41,690 19,917 100,676 Displays and Sound 68,529 41,733 27,348 137,610 Accessories 80,177 59,036 19,066 158,279 Other Hardware/Services 46,136 39,294 19,135 104,565 Total net sales $ 581,467 $ 534,067 $ 252,970 $ 1,368,504 8 Table of Contents Six Months Ended June 30, 2023 Enterprise Solutions

Business

Business Solutions Public Sector Solutions Total Notebooks/Mobility $ 201,908 $ 183,000 $ 126,005 $ 510,913 Desktops 63,714 37,773 32,388 133,875 Software 56,795 68,404 22,976 148,175 Servers/Storage 31,212 46,896 21,946 100,054 Net/Com Products 49,259 56,888 35,553 141,700 Displays and Sound 54,042 46,467 29,987 130,496 Accessories 88,689 55,241 29,961 173,891 Other Hardware/Services 55,477 39,472 27,039 121,988 Total net sales $ 601,096 $ 534,141 $ 325,855 $ 1,461,092 Contract Balances The following table provides information about contract liabilities from arrangements with customers as of June 30, 2024 and December 31, 2023 (in thousands). June 30, 2024 December 31, 2023 Contract liabilities, which are included in "Accrued expenses and other liabilities" $ 7,100 $ 4,206 Changes in the contract liability balances during the six months ended June 30, 2024 and 2023 are as follows (in thousands): 2024 Balance at December 31, 2023 $ 4,206 Cash received in advance and not recognized as revenue 9,769 Amounts recognized as revenue as performance obligations satisfied ( 6,875 ) Balance at June 30, 2024 $ 7,100 2023 Balance at December 31, 2022 $ 4,266 Cash received in advance and not recognized as revenue 11,980 Amounts recognized as revenue as performance obligations satisfied ( 9,683 ) Balance at June 30, 2023 $ 6,563 Note 3–Fair Value Measurements Cash equivalents and short-term investments consist of the following (in thousands): June 30, 2024 Amortized Cost Unrealized Gains Unrealized Losses Fair Value Cash equivalents: Money market funds $ 108,117 $ — $ — $ 108,117 Short-term investments: U.S. Government treasury securities 257,720 11 ( 141 ) 257,590 Total $ 365,837 $ 11 $ ( 141 ) $ 365,707 December 31, 2023 Amortized Cost Unrealized Gains Unrealized Losses Fair Value C

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