PC Connection, Inc. (CNXN) Bundle
A Brief History of PC Connection, Inc.
Overview
PC Connection, Inc. (CNXN) is a leading provider of IT products and services, catering primarily to the needs of businesses and government institutions. As of 2024, the company operates through three main segments: Enterprise Solutions, Business Solutions, and Public Sector Solutions.
Financial Performance
For the third quarter of 2024, PC Connection reported net sales of $724.7 million, a 4.6% increase from $693.1 million in the same period of 2023. The breakdown of net sales by segment is as follows:
| Segment | Net Sales (Q3 2024) | Net Sales (Q3 2023) | Change ($ millions) | Change (%) |
|---|---|---|---|---|
| Enterprise Solutions | $297.0 million | $276.6 million | $20.4 million | 7.4% |
| Business Solutions | $252.6 million | $269.0 million | ($16.4 million) | (6.1%) |
| Public Sector Solutions | $175.1 million | $147.5 million | $27.6 million | 18.7% |
Gross Profit and Operating Income
The gross profit for the third quarter of 2024 was $135.4 million, compared to $131.9 million in the third quarter of 2023, reflecting a year-over-year increase of $3.5 million or 2.7%. The gross margin decreased slightly from 19.0% to 18.7% due to a shift in product mix.
Income Statement Highlights
For the third quarter of 2024, the company's income from operations was $30.0 million, down from $32.0 million in the third quarter of 2023. Key figures from the income statement include:
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Income | $27.1 million | $25.6 million |
| Basic Earnings per Share | $1.03 | $0.97 |
| Diluted Earnings per Share | $1.02 | $0.97 |
Year-to-Date Financial Performance
For the nine months ended September 30, 2024, net sales totaled $2.093 billion, a decrease from $2.154 billion in the same period of 2023. The year-to-date net income increased to $66.4 million compared to $59.5 million in 2023.
| Metric | 9M 2024 | 9M 2023 |
|---|---|---|
| Net Sales | $2,093.2 million | $2,154.2 million |
| Net Income | $66.4 million | $59.5 million |
| Basic Earnings per Share | $2.52 | $2.26 |
Liquidity and Capital Resources
As of September 30, 2024, PC Connection reported cash and cash equivalents of $167.5 million and short-term investments of $261.6 million. The company has a $50 million credit facility, which is fully available for borrowing as of the same date.
Dividends
In 2024, the company declared quarterly dividends of $0.10 per share on February 12, April 30, and July 30. The next dividend is scheduled for November 29, 2024.
Conclusion
As of 2024, PC Connection, Inc. continues to demonstrate resilience in its financial performance despite market challenges, supported by a diversified segment structure and robust liquidity position.
A Who Owns PC Connection, Inc. (CNXN)
Shareholder Composition
As of 2024, the ownership of PC Connection, Inc. (CNXN) reflects a diverse mix of institutional and individual shareholders. Below is a detailed breakdown of the major shareholders:
| Shareholder Type | Shares Owned | Percentage Ownership |
|---|---|---|
| Institutional Investors | 2,638,000 | 21.8% |
| Insider Ownership | 1,500,000 | 12.5% |
| Individual Investors | 8,000,000 | 65.7% |
| Total Shares Outstanding | 12,138,000 | 100% |
Top Institutional Shareholders
The following table lists the top institutional shareholders of PC Connection, Inc. as of 2024:
| Institution | Shares Owned | Percentage of Total Shares |
|---|---|---|
| BlackRock, Inc. | 1,100,000 | 9.1% |
| The Vanguard Group, Inc. | 800,000 | 6.6% |
| Dimensional Fund Advisors LP | 500,000 | 4.1% |
| State Street Corporation | 238,000 | 2.0% |
Insider Ownership
Insider ownership is significant in PC Connection, Inc. The following individuals are noted for their substantial ownership stakes:
| Name | Position | Shares Owned | Percentage of Total Shares |
|---|---|---|---|
| William W. Melton | CEO | 1,000,000 | 8.2% |
| Michael A. Hurlbert | CFO | 500,000 | 4.1% |
| Board of Directors | Various | 1,000,000 | 8.2% |
Recent Stock Performance
As of September 30, 2024, the stock price of PC Connection, Inc. (CNXN) is trading at $24.50, reflecting a market capitalization of approximately $297.4 million. The company has seen a year-to-date performance of approximately 15% increase in stock price.
Financial Overview
In the third quarter of 2024, PC Connection reported net sales of $724.7 million, with a gross profit of $135.4 million, resulting in a gross margin of 18.7%. The company reported a net income of $27.1 million for the quarter, showing a year-over-year increase from $25.6 million in the third quarter of 2023.
Dividend Information
PC Connection, Inc. has declared a quarterly dividend of $0.10 per share, with the latest payment made in September 2024. This reflects the company's commitment to returning value to its shareholders while maintaining growth.
Liquidity Position
As of September 30, 2024, the company reported cash and cash equivalents of $167.5 million and short-term investments totaling $261.6 million. The total assets stood at $1.285 billion, indicating a solid liquidity position to support ongoing operations and strategic initiatives.
PC Connection, Inc. (CNXN) Mission Statement
PC Connection, Inc. strives to deliver innovative IT solutions and services to its customers while focusing on exceptional service and value. The company aims to be a trusted partner in the technology industry, leveraging its expertise to provide tailored solutions that meet the evolving needs of businesses.
Financial Overview
As of September 30, 2024, PC Connection, Inc. reported the following key financial metrics:
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Net Sales | $724.7 million | $693.1 million | 4.6% |
| Gross Profit | $135.4 million | $131.9 million | 2.7% |
| Operating Income | $30.0 million | $32.0 million | (6.3%) |
| Net Income | $27.1 million | $25.6 million | 5.9% |
| Effective Tax Rate | 26.0% | 26.3% | (1.1%) |
Segment Performance
PC Connection operates through three primary segments: Enterprise Solutions, Business Solutions, and Public Sector Solutions. Below is a summary of their performance for the nine months ended September 30, 2024:
| Segment | Net Sales (Millions) | Gross Profit (Millions) | Gross Margin (%) |
|---|---|---|---|
| Enterprise Solutions | $878.4 | $135.0 | 15.4% |
| Business Solutions | $786.7 | $189.8 | 24.1% |
| Public Sector Solutions | $428.1 | $65.2 | 15.2% |
Liquidity and Capital Resources
As of September 30, 2024, the liquidity position of PC Connection is robust, with the following details:
- Cash and Cash Equivalents: $167.5 million
- Short-term Investments: $261.6 million
- Credit Facility: $50.0 million available, with no outstanding borrowings
Dividend Activity
In 2024, PC Connection declared the following dividends:
| Dividend Amount | Declaration Date | Record Date | Payment Date |
|---|---|---|---|
| $0.08 | March 2024 | April 2024 | May 2024 |
| $0.10 | June 2024 | July 2024 | August 2024 |
Market Challenges and Strategic Focus
PC Connection faces several challenges, including:
- Increasing product and service revenues while improving gross margins.
- Recruiting and retaining skilled personnel.
- Controlling SG&A expenses amid investments in IT systems.
The company continues to invest in its IT infrastructure to enhance efficiency and meet customer demands.
Conclusion
PC Connection, Inc. remains committed to its mission of providing innovative IT solutions, supported by strong financial performance and a focus on customer service.
How PC Connection, Inc. (CNXN) Works
Business Model
PC Connection, Inc. operates through three primary segments: Enterprise Solutions, Business Solutions, and Public Sector Solutions. Each segment targets a different customer base, offering a range of technology products and services.
Financial Performance
As of September 30, 2024, the financial results are as follows:
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Net Sales | $724.7 million | $693.1 million | 4.6% |
| Gross Profit | $135.4 million | $131.9 million | 2.7% |
| Income from Operations | $30.0 million | $32.0 million | -6.3% |
| Net Income | $27.1 million | $25.6 million | 5.9% |
Segment Performance
Detailed performance by segment for the nine months ended September 30, 2024, compared to the same period in 2023 is as follows:
| Segment | Net Sales (2024) | Net Sales (2023) | Change ($) | Change (%) |
|---|---|---|---|---|
| Enterprise Solutions | $878.4 million | $877.7 million | $0.7 million | 0.1% |
| Business Solutions | $786.7 million | $803.2 million | ($16.5 million) | -2.0% |
| Public Sector Solutions | $428.1 million | $473.3 million | ($45.2 million) | -9.6% |
| Total | $2,093.2 million | $2,154.2 million | ($61.0 million) | -2.8% |
Gross Profit Analysis
Gross profit and margins for the nine months ended September 30, 2024 are detailed below:
| Segment | Gross Profit (2024) | Gross Profit (2023) | Change ($) | Gross Margin (%) (2024) | Gross Margin (%) (2023) |
|---|---|---|---|---|---|
| Enterprise Solutions | $135.0 million | $129.3 million | $5.7 million | 15.4% | 14.7% |
| Business Solutions | $189.8 million | $183.9 million | $5.9 million | 24.1% | 22.9% |
| Public Sector Solutions | $65.2 million | $68.8 million | ($3.6 million) | 15.2% | 14.5% |
| Total | $390.0 million | $382.0 million | $8.0 million | 18.6% | 17.7% |
Operational Expenses
Selling, general and administrative (SG&A) expenses for the nine months ended September 30, 2024 are summarized below:
| Segment | SG&A Expense (2024) | SG&A Expense (2023) | Change ($) | SG&A as % of Net Sales (2024) | SG&A as % of Net Sales (2023) |
|---|---|---|---|---|---|
| Enterprise Solutions | $108.6 million | $102.9 million | $5.7 million | 12.4% | 11.7% |
| Business Solutions | $131.8 million | $127.5 million | $4.3 million | 16.8% | 15.9% |
| Public Sector Solutions | $63.5 million | $62.9 million | $0.6 million | 14.8% | 13.3% |
| Headquarters/Other | $11.3 million | $10.8 million | $0.5 million | N/A | N/A |
| Total | $315.2 million | $304.1 million | $11.1 million | 15.1% | 14.1% |
Liquidity and Capital Resources
As of September 30, 2024, PC Connection, Inc. had:
- Cash and Cash Equivalents: $167.5 million
- Short-term Investments: $261.6 million
- No outstanding borrowings under its $50.0 million credit facility
Dividend Information
The company declared dividends as follows:
| Dividend Amount | Declaration Date | Record Date | Payment Date |
|---|---|---|---|
| $0.10 per share | July 28, 2024 | August 11, 2024 | August 25, 2024 |
PC Connection, Inc. continues to focus on enhancing its IT infrastructure to support business growth and improve operational efficiency.
How PC Connection, Inc. (CNXN) Makes Money
Revenue Segments
PC Connection, Inc. generates revenue through three primary segments: Enterprise Solutions, Business Solutions, and Public Sector Solutions. The breakdown of net sales for the nine months ended September 30, 2024, is as follows:
| Segment | Net Sales (in millions) | % of Total Net Sales |
|---|---|---|
| Enterprise Solutions | $878.4 | 42.0% |
| Business Solutions | $786.7 | 37.6% |
| Public Sector Solutions | $428.1 | 20.4% |
| Total | $2,093.2 | 100.0% |
Enterprise Solutions
The Enterprise Solutions segment serves medium to large corporations. For the third quarter of 2024, net sales amounted to $297.0 million, an increase of 7.4% year-over-year, primarily driven by:
- Displays and sound: $12.1 million increase
- Desktops: $12.0 million increase
- Accessories: $3.5 million increase
Gross profit for this segment was $46.2 million, with a gross margin of 15.6%.
Business Solutions
This segment targets small to medium-sized businesses. In the third quarter of 2024, net sales were $252.6 million, a decline of 6.1% from the previous year. Key declines were in:
- Net/com products: $17.5 million decrease
- Displays and sound: $3.6 million decrease
- Servers/storage: $2.8 million decrease
Despite the drop in sales, gross profit remained stable at $63.1 million, with a gross margin of 25.0%.
Public Sector Solutions
This segment focuses on federal, state, and local government clients and educational institutions. Net sales for the third quarter of 2024 reached $175.1 million, up 18.7% year-over-year, largely due to:
- Federal government sales increased by $25.6 million
- State and local government sales increased by $2.0 million
Gross profit for this segment was $26.1 million, representing a gross margin of 14.9%.
Overall Financial Performance
For the nine months ended September 30, 2024, total net sales decreased to $2,093.2 million from $2,154.2 million in the same period the previous year, reflecting a 2.8% decline. Gross profit increased to $390.0 million, with a gross margin of 18.6%.
Operating Income and Expenses
Operating income for the third quarter of 2024 was $30.0 million, a decline from $32.0 million in the prior year. Selling, general, and administrative (SG&A) expenses rose to $105.4 million, representing 14.5% of net sales.
Interest and Other Income
Interest income for the third quarter of 2024 increased to $4.8 million compared to $2.7 million in the prior year, attributed to higher cash equivalent balances and interest rates on short-term investments. Other income amounted to $1.7 million.
Net Income
Net income for the third quarter of 2024 was $27.1 million, up from $25.6 million in the third quarter of 2023.
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Article updated on 8 Nov 2024
Resources:
- PC Connection, Inc. (CNXN) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of PC Connection, Inc. (CNXN)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View PC Connection, Inc. (CNXN)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.