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PCM Reports Third Quarter Results

Stocks in this article: PCMI

PCM, Inc. (NASDAQ: PCMI), a leading technology solutions provider, today reported financial results for the third quarter of 2013. Consolidated net sales for Q3 2013 were $348.5 million, a decrease of $4.0 million, or 1%, from $352.5 million in Q3 2012. Consolidated gross profit for Q3 2013 increased $1.2 million, or 2%, to $49.6 million from $48.4 million in Q3 2012. Consolidated gross profit margin was 14.2% in Q3 2013, up from 13.7% in Q3 2012. EBITDA (as defined below) remained relatively unchanged at $7.1 million in each of Q3 2013 and Q3 2012. Consolidated operating profit for Q3 2013 increased $0.1 million, or 4%, to $4.1 million compared to $4.0 million for Q3 2012. Consolidated net income increased $0.1 million, or 6%, to $1.9 million in Q3 2013 compared to $1.8 million for Q3 2012. Diluted EPS for Q3 2013 was $0.16 compared to diluted EPS of $0.15 for Q3 2012, an increase of 7%.

Commenting on the Company’s third quarter results, Frank Khulusi, Chairman, President and CEO of PCM, Inc. said, “I am proud of the way our team performed in Q3, despite a very challenging demand environment. On the heels of an excellent Q2, we faced headwinds in several of our businesses. For instance, while our federal government business grew, it was hampered by the sequestration and uncertainty surrounding the government shut-down and debt ceiling debates in Washington. Our MacMall business was negatively impacted by customers deferring purchases as they anticipated Apple’s major CPU and tablet product releases, which for the first time in recent history are taking place primarily in a calendar Q4. Finally, we mentioned on our Q2 conference call that our services business would be impacted by a software upgrade at a key solution partner in the healthcare space. We anticipated this issue could impact our consolidated results by approximately $0.03 per share but it ultimately impacted our results by $0.05 per share. In addition, we continue to execute on our rebranding strategy, which in the third quarter cost us approximately $0.7 million or $0.03 per share in related expenses. We believe this rebranding strategy over time will help us maximize our efficiencies and growth opportunities. While to date the market has not improved markedly from Q3 we believe that many of these challenges will abate in the near term. Despite those headwinds, we were able to grow our gross margin and operating profit by improving our product mix and continuing to be disciplined on expenses.”

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