Bob...here are the PCCC Earnings (beat First Call est. by a penny):
MERRIMACK, N.H.--(BUSINESS WIRE)--April 26, 1999--
FIRST QUARTER HIGHLIGHTS:
-- 33.4% growth in net sales
-- 50.9% growth in outbound sales
-- 116.8% growth in Internet sales
-- 20.3% growth in average order size
PC Connection, Inc. (NASDAQ:PCCC) today announced net income of
$4.4 million, or $.28 per share, for the quarter ended March 31, 1999,
compared to pro forma net income of $3.0 million, or $.20 per share,
for the corresponding quarter a year ago, an increase of $.08 per
share, or 40%. The year ago period included a one-time charge of
approximately $870,000, or $.04 per share, relating to the
acceleration in the vesting period of the Company's stock options from
seven years to four years in connection with the Company's initial
public offering. Net sales were $225.0 million for the first quarter
of 1999, compared to $168.6 million for the corresponding quarter a
year ago, an increase of $56.3 million, or 33.4%.
Patricia Gallup, Chairman and Chief Executive Officer, said,
"This was another great quarter for PC Connection with year-over-year
growth across the board. We achieved these strong results while
continuing to invest in our Internet E-Commerce initiatives, and while
continuing to aggressively grow our outbound corporate telemarketing
program. We believe that the strategic investments we are making will
help ensure PC Connection's ability to effectively capitalize on the
demand we are currently seeing from small- and medium-sized businesses
throughout the U.S."
Total outbound sales increased 50.9% to $128.7 million in the
first quarter of 1999, compared to $85.3 million in the year ago
quarter. These sales represent a 14% sequential increase over the
fourth quarter of 1998. Inbound sales in the first quarter increased
8.3% to $84.3 million. The average outbound and inbound account
representative generated $2.0 million and $2.5 million, respectively,
in annualized net sales during the 1999 quarter.
Internet sales processed directly online during the first quarter
of 1999 were $12.0 million, or 5.4% of net sales, representing a 13.1%
sequential increase over the fourth quarter of 1998. First quarter
online sales grew 116.8% over the comparable quarter in 1998. First
quarter sales sourced from the company's web site, including orders
processed online and web-generated phone orders, were approximately
$27.0 million in 1999, or 12.0% of net sales, and representing a
sequential increase of 17.2% over the fourth quarter of 1998.
Ms. Gallup continued, "During the quarter we accelerated our
sales recruiting efforts, and continued to hire experienced senior
management in our Product Management and Sales areas. We believe these
initiatives will make our merchandising and sales efforts even more
effective."
Wayne Wilson, President and Chief Operating Officer said, "We
continue to see volume gains in the corporate managed account area and
benefit from our ongoing staff increases. During the first quarter
alone, we added a net of 60 outbound corporate telemarketing account
managers, raising the total to 260, a 30% increase in one quarter. We
believe that the small- and medium-sized business (SMB) market
continues to represent a huge opportunity as we aggressively build our
outbound telemarketing business."
Mr. Wilson went on to say, "PC Connection mailed a near record
number of catalogs this quarter which helped in our prospecting
efforts. Further, our reputation for rapid delivery of competitively
priced technology solutions is leading new customers to us daily. The
strength of our operating business is evident when measured by other
key operating metrics. The number of active customers in the first
quarter grew 35.6% to 709,000, orders entered grew 15% to 430,000, and
average order size increased 20.3% to $628."
Computer systems and memory accounted for 47.3% of net sales and
continued to be the fastest growing product category in the first
quarter, up 52.9% from the year ago quarter. Peripherals, software and
networking/communications grew by 26.3%, 12.7% and 4.2%, respectively,
over the year ago quarter. Computer system average selling price (ASP)
declines in the first quarter were modest compared to the fourth
quarter of 1998 at approximately 1% despite a year-over-year average
selling price decline of 9%. Notebook ASPs were stable sequentially
while improving 5% year-over-year to offset continuing declines in
desktop ASPs.
Gross profit margin as a percentage of net sales decreased from
13.0% in the first quarter of 1998, to 12.0% in the first quarter of
1999. This decrease was due primarily to the continued growth in
systems sales and growth in outbound telemarketing sales which
generally carry lower margins. The Company's gross profit margin as a
percentage of net sales may vary by quarter based upon vendor support
programs, product mix, pricing strategies, market conditions and other
factors.
Continued growth in unit volumes and an increase in average order
size to $628 enabled the Company to continue to leverage its operating
expenses. Total selling, general, and administrative expenses, as a
percentage of net sales, decreased from 10.0% (on a pro forma basis)
in the first quarter of 1998, to 8.8% in the first quarter of 1999.
Gallup concluded, "We believe we have a fundamentally sound
operating model based on the established, long-term relationships we
have with hundreds of thousands of small- and medium-sized business
customers. In addition, our extensive manufacturer relationships allow
us to directly offer our business customers virtually any technology
product they want. Whether a customer is using our E-commerce Web
sites, working with our outbound corporate telemarketing account
managers, or using our telemarketing supported catalogs, PC Connection
is there providing the value-added service and technology solutions
customers need - around the clock, 7 days a week."
PC Connection, Inc. is a leading direct marketer of over 25,000
brand-name computer-related products through its catalogs PC
Connection (1-800-800-5555) and MacConnection (1-800-800-2222), its
comprehensive web site, and its outbound telemarketing division. The
company is often recognized for its role as a critical information
link between manufacturers of computer products and end users. For the
second year, PC Connection received the highest ranking of any
computer reseller on the list of the "100 Most Influential Companies
in the Computer Industry," published in PC Magazine. The Company was
founded in 1982 and has sales facilities in Merrimack, Keene, Dover
and Hudson, New Hampshire.
PC Connection's full-service distribution and
custom-configuration center is located in Wilmington, Ohio, providing
customers with fully configured computer systems for convenient
overnight delivery.
"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 competitive products and pricing, product demand and market
acceptance, new products, fluctuations in operating results and other
risks detailed under the caption "Risk Factors" in the Company's 1998
Form 10-K filed with the Securities and Exchange Commission for the
year ended December 31, 1998.
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