PC Mall Reports Third Quarter 2012 Results
PC Mall, Inc. (NASDAQ:MALL), a leading technology solutions provider, today reported financial results for the third quarter of 2012. Consolidated net sales for Q3 2012 were $364.6 million, a decrease of $2.9 million from $367.5 million in Q3 2011, and was impacted by a $6.3 million decrease in sales to promotional companies under a vendor program change in Q4 2011 by a large vendor. Excluding the effect of this program change, our sales grew $3.4 million, or 1% compared to Q3 2011. Consolidated gross profit for Q3 2012 decreased $1.8 million to $48.4 million from $50.2 million in Q3 2011. Consolidated gross profit margin was 13.3% in Q3 2012 compared to 13.7% in Q3 2011. EBITDA (as defined below), which includes $0.7 million of severance and restructuring related costs for Q3 2012, increased $0.7 million to $7.1 million from $6.4 million in Q3 2011. Consolidated operating profit for Q3 2012, which includes $1.0 million of severance and restructuring related costs, increased $0.1 million to $4.0 million compared to $3.9 million for Q3 2011. Consolidated net income, which includes $0.6 million, net of tax, of severance and restructuring related costs, remained flat at $1.8 million for Q3 2012 compared to Q3 2011. Diluted EPS for Q3 2012 was $0.15 compared to diluted EPS of $0.14 for Q3 2011. Excluding severance and restructuring related costs, adjusted EPS was $0.20.
Commenting on the Company’s third quarter results, Frank Khulusi, Chairman, President and CEO of PC Mall, Inc. said, “I am pleased that despite a demand environment that was not as robust as expected, we were able to grow our sales over last year, net of the impact a vendor program change had on our results. Continuing economic uncertainties led customers to defer or scale back their spending on IT, but our teams did a tremendous job being attentive to our customers’ needs, and continued to focus on our growing services and solutions business while building long term relationships with customers by helping them to optimize their IT environments. Our services revenues grew 11% year over year, a reflection of customers increasingly embracing outsourcing and our own success in bringing these solutions to our customers. While we do not think this slow-down in IT spending is permanent, we do expect that it will continue for at least the next two quarters, and have continued reducing our fixed cost structure. In the third quarter, we took actions we expect will result in $3.9 million of annualized cost savings, bringing the total actions we have taken this year to $7.3 million of expected annualized cost savings. We currently expect to take further actions in the fourth quarter that will result in at least $1.3 million of additional expected annualized cost savings. We also believe that our cost structure will benefit from the unification of our commercial brands, which is discussed below. Our EBITDA, net of restructuring costs, was $7.8 million in Q3, and for the 9 months ended September 30 our EBITDA net of restructuring costs totaled approximately $18.8 million. We intend to continue to reduce our overall cost structure, while we make selective investments in our services capabilities, people and technologies.”
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