NASDAQ$CNXN

PC Connection Inc · Q2 2020 earnings

Q2 2020 earnings · · Investor relations

Briefing

Revenue and net income decreased due to the impact of the COVID-19 pandemic and the deployment of a new ERP system.

Connection's Q2 2020 results were adversely affected by the COVID-19 pandemic and the deployment of a new ERP system, leading to a decrease in revenue and net income. Net sales decreased by 25.8% to $550.0 million, and net income decreased by 67.7% to $7.6 million, or $0.29 per diluted share.

  • Net sales decreased by 25.8% to $550.0 million compared to the prior year quarter.
  • Net income decreased by 67.7% to $7.6 million, or $0.29 per diluted share, compared to the prior year quarter.
  • The deployment of a new ERP system adversely affected the second quarter results.
  • Healthcare vertical market saw strong demand for telemedicine and remote access solutions.

Headline financials

Total Revenue

$550M

Previous: $741M-25.8%
EPS (adj)

$0.32

Previous: $0.89-64.0%
Gross Margin

16.2%

Previous: 15.8%+2.5%
Operating Margin

1.9%

Previous: 4.4%-56.8%
Inventory Turns

12

Previous: 17-29.4%
Days Sales Outstanding

68

Previous: 55+23.6%
Capital Expenditures

-$8.21M

Previous: -$13.9M+40.8%
Free Cash Flow

-$571K

Previous: $9.79M-105.8%
Net Income

$7.64M

Previous: $23.7M-67.7%
Operating Income

$10.6M

Previous: $32.3M-67.2%
Gross Profit

$89M

Previous: $117M-23.9%
Cash & Equivalents

$166M

Previous: $69.7M+137.9%
Total Assets

$954M

Previous: $912M+4.7%
Stock-Based Comp

$624K

Previous: $564K+10.6%

Revenue & EPS history

PC Connection · Revenue · Quarterly

$550M

Q2 2020-25.8%vs Q2 2019
Beat estimate in 14 of 16 quarters(88%)
ActualEstimate

Revenue by segment

PC Connection · $550M total across 3 segments · Q2 2020

  • Enterprise Solutions
    $247M
  • Business Solutions
    $191M
  • Public Sector Solutions
    $112M

Forward guidance

The reality of a post-COVID-19 world is still unclear, but we believe Connection is exceptionally well positioned to continue to assist our customers in adopting the technologies they need to drive business continuity, strengthen security, reimagine the workplace, and transform their businesses to meet the challenges of the future.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q2 2020

Historical avgQ2 2020

+1.3%

Avg return

Earnings day

+0.7%

Avg return

5 days after

+1.6%

Avg return

30 days after

60%

39 / 65 earnings

Positive

+21.8%

Q2 2019

Best reaction

-24.3%

Q4 2019

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026+2.6%+3.1%+9.8%
Q4 2025+9.1%+8.4%+0.9%
Q3 2025-1.3%-3.8%-4.7%
Q1 2025+7.0%+9.8%+5.4%
Q4 2024-10.8%-8.6%-11.2%
Q3 2024-8.0%-2.7%+4.9%
Q2 2024+6.7%-0.3%+3.8%
Q1 2024-4.3%+0.2%+9.1%
Q4 2023+8.5%+5.6%+0.3%
Q3 2023+5.3%+11.8%+11.8%
Q2 2023+5.5%+8.5%+9.2%
Q1 2023-2.8%-2.0%+16.5%
Q4 2022-14.2%-13.5%-11.3%
Q3 2022-7.4%-5.3%+5.5%
Q2 2022+2.5%+3.0%+2.2%
Q1 2022-3.5%-6.2%-8.7%
Q4 2021+15.2%+10.9%+18.4%
Q3 2021+6.9%+1.9%-6.5%
Q2 2021-0.6%+2.3%+3.8%
Q1 2021-1.1%-3.7%+1.4%
Q4 2020-10.3%-9.7%-10.0%
Q3 2020+3.7%-5.9%-8.0%
Q2 2020-0.7%+0.4%-4.1%
Q1 2020+6.9%-7.2%+0.7%
Q4 2019-24.3%-19.8%-22.1%
Q3 2019+11.5%+12.8%+12.6%
Q2 2019+21.8%+12.4%+7.7%
Q1 2019+1.3%-4.0%-13.3%
Q4 2018+19.4%+19.1%+15.7%
Q3 2018-7.9%-5.9%-5.4%
Q2 2018+11.3%+12.5%+16.8%
Q1 2018+9.6%+9.9%+10.6%
Q4 2017+0.7%-3.9%+3.7%
Q3 2017+0.1%+0.7%-1.7%
Q2 2017-5.4%-5.2%-10.6%
Q1 2017+3.2%+7.9%-3.4%
Q4 2016+2.5%+0.3%-1.0%
Q3 2016-6.4%-6.5%+9.1%
Q2 2016+2.1%+1.4%+5.0%
Q1 2016-0.2%
Q4 2015-0.4%
Q3 2015-0.4%
Q2 2015-1.2%
Q1 2015-1.5%
Q4 2014-0.3%
Q3 2014+1.6%
Q2 2014+1.4%
Q1 2014+2.1%
Q4 2013+2.2%
Q3 2013+0.0%
Q2 2013-4.0%
Q1 2013+0.6%
Q4 2012+3.1%
Q3 2012-4.6%
Q2 2012+1.9%
Q1 2011+4.1%
Q1 2012+1.5%
Q4 2009-0.7%
Q4 2011-0.7%
Q3 2010+1.0%
Q3 2011+1.0%
Q4 2010+7.0%
Q2 2011+7.0%
Q2 2010+7.0%
Q1 2010+5.6%

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