PC Connection, Inc (PCCC) has reported 18 percent fall in profit for the quarter ended Mar. 31, 2017. The company has earned $7.43 million, or $0.28 a share in the quarter, compared with $9.06 million, or $0.34 a share for the same period last year. Revenue during the quarter grew 17.16 percent to $670.59 million from $572.39 million in the previous year period. Gross margin for the quarter contracted 143 basis points over the previous year period to 12.93 percent. Total expenses were 98.29 percent of quarterly revenues, up from 97.35 percent for the same period last year. That has resulted in a contraction of 94 basis points in operating margin to 1.71 percent.
Operating income for the quarter was $11.45 million, compared with $15.16 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $14.54 million compared with $17.87 million in the prior year period. At the same time, adjusted EBITDA margin contracted 95 basis points in the quarter to 2.17 percent from 3.12 percent in the last year period.
“We are encouraged with the acceleration of our top line during the quarter. We saw strong growth in software, networking communications, workforce productivity, and services,” said Tim McGrath, President and Chief Executive Officer. “With this market share growth, we remain focused on gross margin improvements, operating expense management, and our strategic plan to help our customers solve their business challenges with advanced technology solutions,” concluded Mr. McGrath.
Operating cash flow improves
PC Connection, Inc has generated cash of $25.42 million from operating activities during the quarter, up 8.33 percent or $1.96 million, when compared with the last year period. The company has spent $1.49 million cash to meet investing activities during the quarter as against cash outgo of $2.08 million in the last year period.
The company has spent $7.36 million cash to carry out financing activities during the quarter as against cash outgo of $10.60 million in the last year period.
Cash and cash equivalents stood at $65.76 million as on Mar. 31, 2017, down 27.73 percent or $25.23 million from $90.98 million on Mar. 31, 2016.
Working capital increases marginally
PC Connection, Inc has recorded an increase in the working capital over the last year. It stood at $339.22 million as at Mar. 31, 2017, up 2.11 percent or $7.01 million from $332.21 million on Mar. 31, 2016. Current ratio was at 2.60 as on Mar. 31, 2017, down from 3.18 on Mar. 31, 2016.
Cash conversion cycle (CCC) has decreased to 31 days for the quarter from 44 days for the last year period. Days sales outstanding went down to 49 days for the quarter compared with 52 days for the same period last year.
Days inventory outstanding has decreased to 8 days for the quarter compared with 19 days for the previous year period. At the same time, days payable outstanding was almost stable at 26 days for the quarter, when compared with the previous year period.
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