Overall annualized sales productivity increased slightly in the third quarter of 2011 compared to the third quarter of 2010. Sales productivity in the Large Account segment increased by 1%, but was largely offset by decreases in the SMB and Public Sector segments of 1% and 6%, respectively. On a consolidated basis, the total number of sales representatives was 636 at September 30, 2011, compared to 595 at September 30, 2010, and 630 at June 30, 2011.
Total selling, general and administrative expenses for the quarter increased year over year by 15%, or $6.9 million, and increased as a percentage of net sales from 8.9% for the third quarter of 2010 to 9.4% for the third quarter of 2011. The year-over-year increase was attributable to investments in solutions sales capabilities, increased variable compensation associated with improved gross profit, increased marketing expenditures, and the inclusion of ValCom’s operating costs for the quarter.
The Company repurchased 304 thousand shares of its common stock for treasury during the quarter. Total treasury stock purchased year-to-date was 487 thousand shares at an average price of $8.28 per share. The Company also considers block repurchases directly from larger stockholders, as well as open market purchases, in carrying out its ongoing stock repurchase program.
“We achieved record third quarter revenue and made significant gains in both gross margin and operating income that outpaced our revenue growth,” said Timothy McGrath, President and Chief Executive Officer. “Our focus on margin improvement resulted in our highest quarterly operating income and earnings per share in over a decade. We believe our strong team and core business strategies position us well for future success.”About PC Connection, Inc. PC Connection, Inc., a Fortune 1000 company, owns five sales companies: PC Connection Sales Corporation, MoreDirect, Inc., GovConnection, Inc., PC Connection Express, Inc., and Professional Computer Center, Inc. d/b/a ValCom Technology, headquartered in Merrimack, NH, Boca Raton, FL, Rockville, MD, Portsmouth, NH, and Itasca, IL, respectively. All five companies can deliver custom-configured computer systems overnight from PC Connection Services’ ISO 9001:2008 certified technical configuration lab at its distribution center in Wilmington, OH. Investors and media can find more information about PC Connection, Inc. at http://ir.pcconnection.com. PC Connection Sales Corporation (800-800-5555), the original business of PC Connection, Inc. serving the small- and medium-sized business sector, is a rapid-response provider of IT products and services. It offers more than 300,000 brand-name products through its staff of technically trained sales account managers and catalog telesales representatives, catalogs, publications, and its website at www.pcconnection.com. MoreDirect, Inc. (561-237-3300), www.moredirect.com, provides corporate technology buyers with a comprehensive web-based e-procurement solution and in-depth IT supply-chain expertise, serving as a one-stop source by aggregating more than 300,000 products from the inventories of leading IT wholesale distributors and manufacturers. MoreDirect’s TRAXX™ system is a seamless end-to-end interface that empowers clients to electronically source, evaluate, compare prices, and track related technology product purchases in real-time. GovConnection, Inc. (800-800-0019) is a rapid-response provider of IT products and services to federal, state, and local government agencies and educational institutions through specialized account managers, catalogs, and publications, and online at www.govconnection.com. PC Connection Express, Inc. (888-800-0323) is a rapid-response provider of computer products and consumer electronics to home, home office, and small office users. Customers can purchase the best-known brands in the industry online at www.pcconnectionexpress.com or order by calling a trained sales specialist. The subsidiary includes the MacConnection brand (800-800-2222), one of Apple’s largest authorized online resellers at www.macconnection.com. Professional Computer Center, Inc. d/b/a ValCom Technology (630-285-0500), www.valcomtechnology.com, provides technology services to medium-to-large corporate organizations utilizing its proprietary cloud-based IT service management software, WebSPOC™. Through its experienced technical service personnel ValCom Technology provides network, server, storage, mission-critical onsite support, installation, and host of lifecycle services. pccc-g