PC Connection Inc. Q3 2024 Equity Update

TL;DR

PC Connection Inc. (CNXN) Q3 2024 equity accounts show changes in common stock and retained earnings.

AI Summary

PC Connection Inc. reported its third-quarter results for the period ending September 30, 2024. The company's financial statements indicate changes in its equity accounts, including common stock and retained earnings, over the first nine months of 2024 and the third quarter specifically. Specific dollar amounts for these changes are detailed within the filing.

Why It Matters

This filing provides insight into the company's capital structure and how it has evolved during the reporting period, which can affect shareholder value and future financial flexibility.

Risk Assessment

Risk Level: low — The filing is a standard quarterly report and does not contain immediate red flags or significant negative developments.

Key Numbers

• 2024-09-30 — Reporting Period End (This is the end date for the financial data presented in the 10-Q.)
• 2024-07-01 — Q3 Start Date (This marks the beginning of the third quarter for which financial data is reported.)
• 2023-01-01 — Year-to-Date Start Date (2023) (This is the start date for the comparative year-to-date period in 2023.)

Key Players & Entities

• PC CONNECTION INC (company) — Filer
• 20240930 (date) — Reporting Period End Date
• 20241030 (date) — Filing Date
• 0001050377 (company) — Central Index Key

FAQ

Key Financial Figures

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

Filing Documents

• cnxn-20240930x10q.htm (10-Q) — 2229KB
• cnxn-20240930xex31d1.htm (EX-31.1) — 16KB
• cnxn-20240930xex31d2.htm (EX-31.2) — 16KB
• cnxn-20240930xex32d1.htm (EX-32.1) — 8KB
• cnxn-20240930xex32d2.htm (EX-32.2) — 8KB
• 0001558370-24-013946.txt ( ) — 7606KB
• cnxn-20240930.xsd (EX-101.SCH) — 28KB
• cnxn-20240930_cal.xml (EX-101.CAL) — 47KB
• cnxn-20240930_def.xml (EX-101.DEF) — 106KB
• cnxn-20240930_lab.xml (EX-101.LAB) — 246KB
• cnxn-20240930_pre.xml (EX-101.PRE) — 195KB
• cnxn-20240930x10q_htm.xml (XML) — 1691KB

FINANCIAL INFORMATION

PART I FINANCIAL INFORMATION Page ITEM 1. Unaudited Condensed Consolidated Financial Statements: Condensed Consolidated Balance Sheets–September 30, 2024 and December 31, 2023 1 Condensed Consolidated Statements of Income–Three and Nine Months Ended September 30, 2024 and 2023 2 Condensed Consolidated Statements of Other Comprehensive Income–Three and Nine Months Ended September 30, 2024 and 2023 3 Condensed Consolidated Statements of Stockholders' Equity–Three and Nine Months Ended September 30, 2024 and 2023 4 Condensed Consolidated Statements of Cash Flows–Nine Months Ended September 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 28 ITEM 4 .

Controls and Procedures

Controls and Procedures 29

OTHER INFORMATION

PART II OTHER INFORMATION ITEM 1 .

Legal Proceedings

Legal Proceedings 30 ITEM 1A .

Risk Factors

Risk Factors 30 ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds 30 ITE M 5. Other Information 30 ITEM 6 . Exhibits 31

SIGNATURES

SIGNATURES 32 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) September 30, December 31, 2024 2023 ASSETS Current Assets: Cash and cash equivalents $ 167,511 $ 144,954 Short-term investments 261,603 152,232 Accounts receivable, net 585,076 606,834 Inventories, net 113,691 124,179 Income taxes receivable 7,088 4,348 Prepaid expenses and other current assets 16,757 16,092 Total current assets 1,151,726 1,048,639 Property and equipment, net 53,255 56,658 Right-of-use assets 3,460 4,340 Goodwill 73,602 73,602 Intangibles, net 2,514 3,428 Other assets 1,188 1,714 Total Assets $ 1,285,745 $ 1,188,381 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable $ 293,158 $ 263,682 Accrued payroll 28,131 20,440 Accrued expenses and other liabilities 46,164 43,843 Total current liabilities 367,453 327,965 Deferred income taxes 18,383 15,844 Noncurrent operating lease liabilities 2,030 3,181 Other liabilities 517 624 Total Liabilities 388,383 347,614 Stockholders' Equity: Common stock 293 293 Additional paid-in capital 136,326 130,878 Retained earnings 819,372 760,898 Accumulated other comprehensive income 477 81 Treasury stock, at cost ( 59,106 ) ( 51,383 ) Total Stockholders' Equity 897,362 840,767 Total Liabilities and Stockholders' Equity $ 1,285,745 $ 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 Nine Months Ended September 30, September 30, 2024 2023 2024 2023 Net sales $ 724,717 $ 693,086 $ 2,093,221 $ 2,154,178 Cost of sales 589,311 561,198 1,703,201 1,772

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 nine months ended September 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 state

Business

Business Solutions Public Sector Solutions Total Notebooks/Mobility $ 90,233 $ 91,757 $ 77,264 $ 259,254 Desktops 44,846 17,543 15,193 77,582 Software 29,847 34,478 21,706 86,031 Servers/Storage 11,866 23,106 8,696 43,668 Net/Com Products 24,530 21,186 10,340 56,056 Displays and Sound 38,316 20,682 15,981 74,979 Accessories 35,962 27,020 16,978 79,960 Other Hardware/Services 21,370 16,859 8,958 47,187 Total net sales $ 296,970 $ 252,631 $ 175,116 $ 724,717 Three Months Ended September 30, 2023 Enterprise Solutions

Business

Business Solutions Public Sector Solutions Total Notebooks/Mobility $ 91,643 $ 82,777 $ 46,898 $ 221,318 Desktops 32,822 17,695 16,281 66,798 Software 29,158 34,863 13,287 77,308 Servers/Storage 13,153 25,863 11,307 50,323 Net/Com Products 25,699 38,672 17,964 82,335 Displays and Sound 26,175 24,299 20,367 70,841 Accessories 32,501 26,335 12,590 71,426 Other Hardware/Services 25,415 18,517 8,805 52,737 Total net sales $ 276,566 $ 269,021 $ 147,499 $ 693,086 The following tables represent a disaggregation of revenue from arrangements with customers for the nine months ended September 30, 2024 and 2023, along with the segment for each category (in thousands). Nine Months Ended September 30, 2024 Enterprise Solutions

Business

Business Solutions Public Sector Solutions Total Notebooks/Mobility $ 270,266 $ 281,754 $ 185,962 $ 737,982 Desktops 135,563 55,766 36,732 228,061 Software 78,595 102,905 36,827 218,327 Servers/Storage 39,924 78,773 30,842 149,539 Net/Com Products 63,599 62,876 30,257 156,732 Displays and Sound 106,845 62,415 43,329 212,589 Accessories 116,139 86,056 36,044 238,239 Other Hardware/Services 67,506 56,153 28,093 151,752 Total net sales $ 878,437 $ 786,698 $ 428,086 $ 2,093,221 Nine Months Ended September 30, 2023 Enterprise Solutions

Business

Business Solutions Public Sector Solutions Total Notebooks/Mobility $ 293,551 $ 265,777 $ 172,903 $ 732,231 Desktops 96,536 55,468 48,669 200,673 Software 85,953 103,267 36,263 225,483 Servers/Storage 44,365 72,759 33,253 150,377 Net/Com Products 74,958 95,560 53,517 224,035 Displays and Sound 80,217 70,766 50,354 201,337 Accessories 121,190 81,576 42,551 245,317 Other Hardware/Services 80,892 57,989 35,844 174,725 Total net sales $ 877,662 $ 803,162 $ 473,354 $ 2,154,178 8 Table of Contents Contract Balances The following table provides information about contract liabilities from arrangements with customers as of September 30, 2024 and December 31, 2023 (in thousands). September 30, 2024 December 31, 2023 Contract liabilities, which are included in "Accrued expenses and other liabilities" $ 8,520 $ 4,206 Changes in the contract liability balances during the nine months ended September 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 18,544 Amounts recognized as revenue as performance obligations satisfied ( 14,230 ) Balance at September 30, 2024 $ 8,520 2023 Balance at December 31, 2022 $ 4,266 Cash received in advance and not recognized as revenue 15,207 Amounts recognized as revenue as performance obligations satisfied ( 15,647 ) Balance at September 30, 2023 $ 3,826 Note 3–Fair Value Measurements Cash equivalents and short-term investments as of September 30, 2024 and December 31, 2023 consist of the following (in thousands): September 30, 2024 Amortized Cost Unrealized Gains Unrealized Losses Fair Value Cash equivalents: Money market funds $ 144,729 $ — $ — $ 144,729 Short-term investments: U.S. Government treasury securities 260,999 604 — 261,603 Total $ 405,728 $ 604 $ — $ 406,

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