Pc Connection, Inc. · NASDAQ:CNXN
Pc Connection — Sidoti & Company Fall 2018 Conference
35 slides from Pc Connection's conference presentation, Sep 27, 2018
Slide 1: Investor Presentation, Sidoti & Company Fall 2018 Conference
Investor PresentationSidoti & Company Fall 2018 ConferenceSeptember 27th, 2018
Slide 2: Disclosures and Safe Harbor Statement
2 Disclosures Connection Proprietary & Confidential. Not for publication or redistribution © 2018 Connection All Rights Reserved. Safe Harbor StatementUnder the Private Securities Litigation Reform Act of 1995: This presentation contains forward-looking statements that are subject to risks and uncer
Slide 3: Our Mission
Our Mission As a leading Global Solutions Provider, we connect our customers with technology that:» Enhances growth » Elevates productivity » Empowers innovation 3 Connection Proprietary & Confidential. Not for publication or redistribution © 2018 Connection All Rights Reserved.
Slide 4: Fortune 1000 Global Solutions Provider
4 Fortune 1000 Global Solutions Provider Founded 1982Employees 2,500Exchange NASDAQSymbol CNXNShares Outstanding 26.9 MillionNet Sales – 2017 $ 2.9 BillionCash Balance – 12/31/17 $ 50 MillionAdjusted EBITDA – 2017 $ 94.0 MillionEPS – 2017 $ 2.04Current Price – 9/20/18 $ 38.74Market Capitalization –
Slide 5: Go-to-Market Strategy: Serving All Segments and Specializing in Verticals
5 Go-to-Market StrategyServing All Segments and Specializing in Verticals Connection Proprietary & Confidential. Not for publication or redistribution © 2018 Connection All Rights Reserved.
Slide 6: Your IT Partner for Strong Industry Partnerships
6 Your IT Partner for Strong Industry Partnerships t We allow you greater access to resources from a successful and proven expert team Microsoft Excellence in Operations Awards:• Double Gold Level, 2017• Gold Level, 2016 & 2015 HPE NSP SLED Partner of the Year, 2017Federal Enterprise Group Partner o
Slide 7: Solve Your Toughest IT Challenges with Expertise You Can Count On
7 Solve Your Toughest IT Challengeswith Expertise You Can Count On 2,500+Employees 860+Account managers 10 YearsAverage tenure 540+Engineering,services, andtechnical staff THETEAM 44,000Hours of trainingannually 2,500+Professional certifications Hundredsof training hoursper engineerevery year THEBUY
Slide 8: Committed to Understanding Customer Needs
8 Committed to Understanding Customer Needs Social, mobile, new ways to work Self-Driven Outpace competitors, meet customers’ needs Market Driven Regulatory and industry specific demands Governance Driven Cloud, always on, real-time Technology Driven Connection Proprietary & Confidential. Not for pu
Slide 9: Your IT Partner for Emerging Tech Players
9 Your IT Partner for Emerging Tech Players Flash Storage to tackle explosive data growthHyper-converged Infrastructure for the modern data center, transformed More Choices, More Options, More Relevance Cloud Computing built for cloud power in private, public, and hybrid modelsAdvances in Security p
Slide 10: Optimize Your Entire Infrastructure with a Full Line of Professional Services
10 Optimize Your Entire Infrastructure with a Full Line of Professional Services Connection Proprietary & Confidential. Not for publication or redistribution © 2018 Connection All Rights Reserved.
Slide 11: Your IT Partner for Trusted, Proven Methodology
11 Your IT Partner for Trusted, Proven Methodology Execution Excellence Throughout the Entire Solution Lifecycle Discern—Assess unique requirements for optimal efficiency and cost savings across the entire IT infrastructureDesign—Create flexible and tailored solutions for every business needDeliver—
Slide 12: Customer-Focused Investments
12 Customer-Focused Investments GlobalCapabilities SoftmartSoftware Expertise Launch of NetworkOperations Center New World Class Custom Configuration & Distribution Facility IL and PA Sales Team Expansion Connection Proprietary & Confidential. Not for publication or redistribution © 2018 Connection
Slide 13: Simplify the IT Procurement Process
13 Simplify the IT Procurement Process Services Management Tool We Have Unique and Valuable AssetsOrganizational Assets Connection Proprietary & Confidential. Not for publication or redistribution © 2018 Connection All Rights Reserved.
Slide 14: Global IT Procurement Expertise
14 Partnered with the largest global resellers, System Integrators, and VARs around the world25,000 certified IT professionalsIT services in 174 countriesIndustry recognize global asset disposal services:Built around very stringent IEEE, DoD, and EU standards Global IT Procurement ExpertiseWe Solve
Slide 15: Over 35 Years of Success and Innovation
15 2002 Initial Public OfferingNASDAQ: PCCC(now CNXN) Opened Ohio Distribution Centerand IntroducedEverything Overnight ® 2011 2010 2005 Founded National Solutions Provider CorporateIT Systems 1982 1984 2017 Launched Global Alliance with Bechtle 1990 Over 35 Years of Success and Innovation Acquired
Slide 16: Drivers of Growth
16 Digital Transformation Data Center Modernization Workplace Transformation Security Transformation Drivers of Growth Connection Proprietary & Confidential. Not for publication or redistribution © 2018 Connection All Rights Reserved.
Slide 17: Complete Support for the Complete IT Lifecycle
17 It All Adds Up to Complete Support for the Complete IT Lifecycle Enhance GrowthGain competitive advantageUtilize proven methodologyEmploy the right solutionsExtract full value of investments Elevate ProductivityModernize data centersSave time and moneyIncrease agilityFocus on needs of business Em
Slide 18: Consistent Revenue Growth 2009-2017
18 8.0% CAGR – 8 Years Consistent Revenue Growth 2009 – 2017 Net Sales Connection Proprietary & Confidential. Not for publication or redistribution © 2018 Connection All Rights Reserved. $ in millions
Slide 19: Improving Gross Margins 2009-2017
19 9.5% CAGR – 8 Years Improving Gross Margins2009 – 2017 Net Sales Connection Proprietary & Confidential. Not for publication or redistribution © 2018 Connection All Rights Reserved. $ in millions
Slide 20: Earnings Per Share 2010-2017
20 Earnings Per Share2010 – 2017 Net Sales 13.3% CAGR – 7 Years Connection Proprietary & Confidential. Not for publication or redistribution © 2018 Connection All Rights Reserved.
Slide 21: Diversified Sales by Segment 2013-2017
21 Diversified Sales by Segment2013 – 2017 Net Sales Connection Proprietary & Confidential. Not for publication or redistribution © 2018 Connection All Rights Reserved. $ in millions
Slide 22: Consistent Revenue Growth YTD Q2 2017 vs. YTD Q2 2018
22 Consistent Revenue GrowthYTD Q2 2017 vs. YTD Q2 2018 7.0% Old vs. Old (6.3%) Old vs. New Old Standard New Standard $1,520,222 Connection Proprietary & Confidential. Not for publication or redistribution © 2018 Connection All Rights Reserved. $ in thousands
Slide 23: Consistent Gross Margin Growth YTD Q2 2017 vs. YTD Q2 2018
23 Old Standard New Standard 13.1% 15.3% Consistent Gross Margin GrowthYTD Q2 2017 vs. YTD Q2 2018 Connection Proprietary & Confidential. Not for publication or redistribution © 2018 Connection All Rights Reserved.
Slide 24: Balance Sheet and Cash Flow Highlights
24 Connection Proprietary & Confidential. Not for publication or redistribution © 2018 Connection All Rights Reserved. Q2 YTD ‘18 operating cash flow of $41.5M vs. a use of ($9.8M) Q2 YTD ’17AR and AP and Accruals grew at 3% and 2%, respectivelyDebt-free169,462 shares repurchased as of Q2 YTD for $4
Slide 25: Shareholder Transactions 2011-2017
25 2017 Special Dividend $ 9.1M ($.34 per share) 2016 Special Dividend $ 9.0M ($.34 per share) 2015 Special Dividend $10.6M ($.40 per share) 2014 Special Dividend $10.5M ($.40 per share) 2013 Special Dividend $10.5M ($.40 per share) 2012 Special Dividend $10.1M ($.38 per share) 2011 Special Dividend
Slide 26: Statements from August 2nd Q2 Earnings Call
26 Statements from August 2nd Q2 Earnings Call Net Sales:" Consistent with industry trends, the IT market is estimated to grow at approximately 3% plus and our goal is to double this rate of growth""We expect Q3's new revenue standard adjustment to be similar to the $78 million adjustment that we sa
Slide 27: Why Invest in Connection
27 Recurring Revenue StreamIncreasing Revenue and ProfitsFinancial StabilityExperienced TeamGlobal Solutions ProviderLarge and Fragmented MarketTechnology Transformations Our DifferenceWhy Invest in Connection Connection Proprietary & Confidential. Not for publication or redistribution © 2018 Connec
Slide 28: Thank you!
28 Thank you! Connection Proprietary & Confidential. Not for publication or redistribution © 2018 Connection All Rights Reserved.
Slide 29: Appendix
29 Connection Proprietary & Confidential. Not for publication or redistribution © 2018 Connection All Rights Reserved. Appendix
Slide 30: Business Segments – Sales & Margin
30 Connection Proprietary & Confidential. Not for publication or redistribution © 2018 Connection All Rights Reserved. PC Connection, Inc. & SubsidiariesBusiness Segments – Sales & Margin RECONCILIATION OF CHANGES IN REVENUE STANDARD FOR SEGMENT NET SALES (Unaudited, in thousands) Three Months Ended
Slide 31: Income Statement
31 Connection Proprietary & Confidential. Not for publication or redistribution © 2018 Connection All Rights Reserved. PC Connection, Inc. & Subsidiaries Income Statement CONDENSED CONSOLIDATED STATEMENTS OF INCOME Three Months Ended June 30, Six Month Ended June 30, (amounts in thousands, except pe
Slide 32: Adjusted EBITDA
32 Connection Proprietary & Confidential. Not for publication or redistribution © 2018 Connection All Rights Reserved. PC Connection, Inc. & Subsidiaries Adjusted EBITDA EBITDA AND ADJUSTED EBITDA (amounts in thousands) LTM Ended June 30, (1) ChangeAs Presented ChangePrevious Revenue Standard 2018 2
Slide 33: Balance Sheet
33 Connection Proprietary & Confidential. Not for publication or redistribution © 2018 Connection All Rights Reserved. PC Connection, Inc. & Subsidiaries Balance Sheet CONDENSED CONSOLIDATED BALANCE SHEETS June 30, December 31, 2018 2017 (1) (amounts in millions) ASSETS Current Assets: Cash and cash
Slide 34: Cash Flow Trend
34 Connection Proprietary & Confidential. Not for publication or redistribution © 2018 Connection All Rights Reserved. PC Connection, Inc. & Subsidiaries Cash Flow Trend
Slide 35: Other Key Operating Metrics / Stock Repurchases
35 Connection Proprietary & Confidential. Not for publication or redistribution © 2018 Connection All Rights Reserved. PC Connection, Inc. & SubsidiariesOther Key Operating Metrics / Stock Repurchases CONSOLIDATED SELECTED FINANCIAL INFORMATION UNDER PREVIOUS REVENUE RECOGNITION STANDARD 2018 2017 A
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