Annual Report Update: PC Connection

A few tidbits from the PC Connection Annual Report:

• 89% of sales come from existing customers. This is a stunning amount, obviously helped by large business accounts.

• 54% of sales come from small businesses of 200 to 1,000 employees, down from 59% two years ago. Large accounts now comprise 30% of sales. 16% of sales come from the public sector.

• Notebook and PDA sales dropped from 21% of total two years ago to 17% today.

• EBT was just 1.4% of net sales, though this is easily the best performance of the past five years. Gross margin was just 12.2% ... this is a tough business model to make money on a consistent basis.

• Catalog circulation is just half of what it was two years ago --- and yet sales continue to increase. Catalogers --- make sure you pay close attention to this trend --- there are often serious flaws in matchback analyses that overstate catalog performance.