About PC Connection, Inc.
You won't see a store on every street corner, but PC Connection is just a click away. Doing business as Connection, the company is a leading direct marketer of computer products and IT solutions in the US, selling hardware, software, networking devices, services, and peripherals. It offers more than 425,000 items from manufacturers such as Apple, HP, and Microsoft as well as a range of IT services. Through its websites, catalogs, and direct sales force, Connection targets small and midsized businesses, large corporations, government agencies, and educational institutions, as well as individual consumers. The company dropped "PC" from its tradestyle in 2016 to reflect its mission of connecting people to technology and its range of products.
PC Connection provides comprehensive IT solutions to companies and organizations, including the design, enablement, management, and servicing of their IT hardware and software suites. Products include computers, data center solutions, software, peripheral equipment, networking, and more.
The company provides these services through three reportable segments based on client size. The largest of the three segments, Enterprise Solutions, provides services to large corporates and generates roughly 45% of total sales. Business Solutions serves SMEs and accounts for more than 35% of sales. And the Public Sector Solutions segment targets federal governments, higher education, grade schools, and local governments; it brings in the other 20% of sales.
In terms of what's selling, Notebooks/Mobility products account for about 25% of sales. Accessories, Software, Desktops, Servers/Storage, Display and Sound, and Net/Com Products account for about 10% each. Other Hardware/Services bring in the rest.
PC Connection operates through eight locations in addition to its 283,000-square-foot distribution and fulfillment complex in Wilmington, Ohio, and distribution centers in Kenne and Merrimack, New Hampshire; Marlborough, Massachusetts; Rockville, Maryland; Dakota Dunes, South Dakota; Boca Raton, Florida; and Itasca, Illinois. PC Connection is headquartered in Merrimack, New Hampshire.
Sales and Marketing
PC Connection connects with customers through direct marketing channels, including telemarketing and field sales, internet sales through its four e-commerce sites, and inbound telesales. The online retailer spends about $16 million a year on advertising.
PC Connection depends on a small number of suppliers and their adverse performance could impact on the company's position. Five vendors constitute about 60% of the company's product purchases, including Ingram, more than 20%, Synnex, more than 10%, Tech Data some 10%, and HP more than 5%. Products purchased from HP account for about 20% of PC Connection's revenue.
Eight consecutive years of sales growth was interrupted in 2018, with PC Connection's sales falling 7% to $2.7 billion. The decrease was a result of new revenue recognition rules; under previous rules the company's sales would have risen 7% to $3.1 billion, a new high.
The company's net income has been increasing consistently but unspectacularly over the last five years. In 2018 its net income rose 18% to $64.6 million thanks to stronger gross margins and higher other income. Gross margins were boosted by higher invoice selling margins on software and higher sales of high-margin advances solution sales, partially offset by an increase in personnel costs.
PC Connection's cash on hand grew $41.7 million during 2018, ending the year at $91.7 million. The company's operations generated $86.8 million while its investing activities used $21.2 million and its financing used $23.9 million. PC Connection's main cash uses in 2018 were equipment purchases, share repurchases, and dividends.
PC Connection is focused on maintaining strong customer relations by providing good service. The company acquires products for resale both directly from manufacturers and increasingly indirectly through distributors and other sources.
Looking beyond hardware and software sales, PC Connection is emphasizing service offerings that are geared to business customers. The company's salespeople typically stay at the company a long time -- more than six years on average -- helping develop deep sector knowledge and forging long-lasting relationships with clients. The sales teams, which are growing in size, are supported by increasing numbers of engineering, technical, and admin staff.
730 MILFORD RD
Merrimack, NH 03054-4612
Phone: 1 (603) 683-2000
Employer Type: Publicly Owned
Stock Symbol: CNXN
Stock Exchange: , NASDAQ
Vice Chairman: Joseph A. Baute
Chairman and Chief Administrative Officer: Patricia Gallup
President and CEO: Timothy J. McGrath
Employees (This Location): 10
Employees (All Locations): 2,513
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Dakota Dunes, SD