PC Connection Inc (CNXN, Financial), a leading information technology solutions provider, released its earnings report for the third quarter ended September 30, 2023, on November 1, 2023. Despite a decrease in net sales, the company reported a record quarter for net income and earnings per share.
Financial Highlights
Net sales for the quarter decreased by 10.6% year over year, while gross profit decreased by 3.5%. However, the company's net income increased by 10.3% to a record $25.6 million. Diluted earnings per share also saw a significant increase, rising by 10.4% to reach $0.97.
PC Connection Inc (CNXN, Financial) reported a record gross margin of 19.0%, an expansion of 142 basis points compared to the prior year quarter. The company's board of directors declared a quarterly dividend of $0.08 per share on the company’s common stock, payable on December 1, 2023, to shareholders of record as of November 14, 2023.
CEO Commentary
“We executed well against our strategic priorities including improving our mix of advanced technologies and integrated solutions. Record gross margins and cashflow, combined with our improved operational efficiencies, enabled us to deliver record earnings per share of $0.97 cents during the third quarter” said Timothy McGrath, President and Chief Executive Officer of Connection.
Performance by Segment
The Business Solutions segment saw a decrease in net sales by 14.8% to $269.0 million in Q3 2023, compared to $315.8 million in the prior year quarter. The Public Sector Solutions segment also experienced a decrease in net sales by 4.4% to $147.5 million in Q3 2023, compared to $154.4 million in the prior year quarter. The Enterprise Solutions segment reported a decrease in net sales by 9.5% to $276.6 million in Q3 2023, compared to $305.5 million in the prior year quarter.
Financial Position
As of September 30, 2023, PC Connection Inc (CNXN, Financial) had cash and cash equivalents, and short-term investments totaling $289.4 million, compared to $116.2 million at September 30, 2022.
Outlook
Despite the decrease in net sales, PC Connection Inc (CNXN, Financial) has demonstrated resilience with its increase in net income and earnings per share. The company's strategic execution and operational efficiencies have contributed to its financial performance, and it remains committed to delivering value to its shareholders.
Explore the complete 8-K earnings release (here) from PC Connection Inc for further details.
