PC Mall, Inc F1Q09 Earnings Call Transcript

May. 6.09 | About: PCM, Inc. (PCMI)

PC Mall, Inc. (MALL) F1Q09 Earnings Call Transcript May 6, 2009 4:30 PM ET

Executives

Frank Khulusi- Chairman, President and Chief Executive Officer

Brandon Laverne- Chief Financial Officer

Kristin Rogers- Vice President of Marketing

Analysts

Brian Peterson - Raymond James & Associates

Matt Sheerin - Thomas Weisel Partners

Chris Krueger - Northland Securities

Bill Dawkins - Dawson Dawkins Incorporated

Operator

Good day ladies and gentlemen and welcome to the first quarter 2009 PC Mall Incorporated earnings conference call. On the call with us today are Frank Khulusi, Chairman, President and Chief Executive Officer; Brandon Laverne, Chief Financial Officer; Kris Rogers and Dan DeVries, Executive Vice President.

At this time, I would like to refer to the Safe Harbor statement under the Private Securities Litigation Reform Act of 1995. During this conference call, management may discuss financial projections, information, or expectations about the Company’s products or markets, or otherwise make statements about the future which statements are forward-looking and subject to a number of risks and uncertainties that could cause actual results to differ materially from statements made. These risks and uncertainties are detailed in the Company’s filings with the Securities and Exchange Commission.

I would now like to turn the call over to your host for today’s conference Mr. Frank Khulusi. Please proceed sir.

Frank Khulusi

Thank you, Beatriz and good afternoon everyone. Welcome and thank you all for participating on this call with PC Mall. Today, I will be discussing the Company's financial results for the first quarter of 2009.

As you are [undoubtfully] aware, in the first quarter, demand was under significant pressure as commercial and public sector clients delayed the approval of IT budgets, which we believe was driven by ongoing economic uncertainty. Though the environment remained challenging during the entire quarter, we did see sequential improvement in both February and March.

I am proud of the way our team is managing through these tough times and is continuing to balance near term performance and investments for long term growth.

The financial highlights for the quarter were as follows.

Net sales for Q1 2009 were $259.3 million which was down 23% year-over-year. Gross profit for Q1 2009 was $37.5 million which was down 17% year-over-year. Gross profit margin for the quarter was 14.5% versus 13.5% in Q1 2008. Diluted EPS for the quarter was $0.08 per share versus $0.21 per share in Q1 2008. Operating cash flow was $18.5 million in Q1 2009.

We purchased over 430,000 shares of our common stock in the first quarter and an average price of $3.80 per share.

Now I would like to turn the call over to Brandon Laverne, our CFO, who will present the financial results in a bit more detail. Brandon?

Brandon LaVerne

Thanks, Frank. All comparisons I will make are against Q1 2008 results unless otherwise noted.

Consolidated net sales for Q1 2009 were $259.3 million, a $77.3 million or 23% decrease from Q1 2008. Consolidated gross profit for Q1 2009 decreased 17% to $37.5 million. Consolidated gross profit margin was 14.5% for Q1 2009 compared to 13.5% last year. Consolidated operating profit for Q1 2009 decreased to $3.1 million compared to $6.2 million for Q1 2008.

Operating profit margin was 79 basis points in Q1 2009 versus 183 basis points last year. Consolidated net income for Q1 2009 was $1 million or $0.08 per share compared to $3 million or $0.21 per share last year.

I will now review our Q1 2009 segment results.

For our SMB segment, Q1 2009 net sales declined 32% to $89.5 million compared to $130.6 million in Q1 2008, primarily due to continued softening in IT spending by small and medium sized businesses and a decrease of $8 million in lower margin volume iPod sales to certain customers.

SMB gross profit decreased by 30% to 11.3 million in Q1 2009 compared to $16.1 million in Q1 2008 resulting primarily from the decreased SMB net sales. SMB gross profit margin increased by 30 basis points to 12.6% in Q1 2009 compared to 12.3% in Q1 2008 primarily due to the reduction in lower margin volume iPod sales to certain customers.

SMB operating profit in Q1 2009 also decreased by 30% to $5.4 million compared to $7.8 million in Q1 2008. The decrease in SMB operating profit in Q1 2009 was primarily due to the decrease in gross profit partially offset by a $2.2 million decrease in SMB personnel costs. These personnel costs declined resulted from decreased variable commissions and bonuses, a reduction in headcount and a one-time $600,000 benefit related to the Canadian government labor subsidy program.

Average account executive headcount during Q1 2009 in our SMB segment was 366 down 45 account executives or 11% compared to 411 in Q1 2008 but up slightly from 364 in Q4 2008. During the quarter, we continued making investments in our SMB sales force with particular focus in our Montreal and Chicago locations.

For our MME segment, Q1 2009 net sales declined 18% to $84.9 million compared to $102.9 million in Q1 2008. This decrease was primarily due to the continued softening in demand by customers in the mid-market and enterprise sector in Q1 2009. Product revenues declined by 24% while service revenues increased by 7%. Service revenues represented 27% of MME net sales in Q1 2009 compared to 21% last year.

MME gross profit decreased by 10% to $15.9 million in Q1 2009 compared to $17.6 million in Q1 2008 and MME gross profit margin increased by 160 basis points to 18.7% in Q1 2009 compared to 17.1% last year. The decrease in MME gross profit was primarily due to the decreased MME net sales but the increase in MME gross profit margin was primarily due to an increase in service revenues as a percentage of MME’s total revenues compared to last year as well as an increase in vendor consideration.

Our MME operating profit in Q1 2009 increased by 22% to $4.2 million compared to $3.4 million in Q1 2008. The improvement was primarily due to a decrease in MME personnel costs of $2.2 million, which resulted primarily from centralization of resources of $1.3 million to our Corporate & Other segment, a $400,000 decrease in variable compensation costs and a reduction in MME headcount in Q1 2009, partially offset by the decrease in MME gross profit and a $400,000 increase in bad debt expense primarily related to a single customer.

Average account executive headcount during Q1 2009 in our MME segment 101 down 10% compared to 112 in Q1 last year and down 6% from 107 during Q4 2008.

For our Public Sector segment, Q1 2009 net sales declined 23% to $27.2 million compared to $35.2 million last year. This decrease was primarily due to reduced sales in our federal government business relating to the delay in approval of the federal budget partially offset by an increase in sales in our state and local business.

Public Sector gross profit increased 2% to $3.7 million in Q1 2009 compared to $3.6 million last year. Public Sector gross profit margin increased by 320 basis points to 13.5% in Q1 2009 compared to 10.3% last year. This increase was primarily due to a stronger product mix in Q1 2009 compared to last year.

Our Public Sector segment reported an operating profit of $900,000 in Q1 2009 slight increase compared to $800,000 last year, primarily due to the increase in gross profit.

Average account executive headcount during Q1 2009 in our Public Sector segment was 79 down 20% compared to 99 in Q1 2008 and down two account executives from Q4 2008.

For our Consumer segment, Q1 2009 net sales declined 15% to $57.6 million compared to $67.8 million in Q1 2008. This decrease was primarily due to continued softness in consumer spending.

Consumer gross profit decreased by 17% to $6.6 million in Q1 2009 compared to $8 million last year. Consumer gross profit margin decreased by 30 basis points to 11.5% in Q1 2009 compared to 11.8% last year. The decrease in our Consumer gross profit was primarily due to the decrease in Consumer net sales and a decrease in our Consumer gross profit margin was primarily due to a very competitive pricing environment partially offset by sales of higher margin opportunistic product purchases we made in late 2008.

Consumer operating profit in Q1 2009 decreased by 34% to $1.8 million compared to $2.8 million last year, primarily due to the decrease in Consumer gross profit partially offset by reduction in advertising expenditures and a reduction in Consumer credit card related charges.

Average account executive headcount during Q1 2009 in our Consumer segment was 103 down 18% compared to 125 in Q1 2008 but up three reps in Q4 2008.

Corporate and other selling, general and administrative expenses includes corporate related expenses such as legal, accounting, information technology, product management and other administrative costs that are not otherwise included in our reportable operating segments. Q1 2009 Corporate and Other SG&A expenses increased by $1.6 million, or 18%, to $10.3 million from $8.7 million last year. The increase was primarily due to $1.3 million of centralization of certain resources from our MME segment, a $0.5 million of increased professional fees, which we expect will be substantially non-recurring, and investments in IT infrastructure partially offset by headcount reductions.

Accounts receivable at March 31, 2009 of $127.8 million decreased by $20.7 million from December 31, 2008 primarily due to lower open account sales during Q1 2009 compared to the end of the year.

Our Inventory of $47.5 million at March 31, 2009 represents a decrease of $20.3 million from December 31, 2008 reflecting the sell-through of seasonal and strategic purchases made in late 2008.

Outstanding borrowings under our line of credit decreased by $12.7 million to $16.3 million at March 31, 2009 compared to December 31, 2008.

Operating cash flow generated during Q1 2009 was $19 million compared to a negative operating cash flow of $16.5 million in Q1 2008. We generated $60 million in free cash flow over the last 12 months and have repurchased nearly 1.2 million shares of our common stock in an average price of $3.60 total in over $4.2 million since November 2008.

Now, I would like to turn the call over to Kris Rogers. Kris?

Kristin Rogers

Thanks Brandon. I will spend a few minutes on our segments specific results as well as other key performance indicators for our consolidated business to give you more color on our performance in this environment. I will review product mix, manufacturing and category concentration and growth rates, all of which are on a “gross” basis.

I will start by discussing the results of our segments in a little bit more detail. As Brandon indicated, net sales for SMB segment declined by 32% year-over-year $8 million of $41.1 million of a decline coming from a reduction in lower margin volume iPod sales to certain customers. The quarter showed up with a very weak January which we believe was tight to 2009 corporate budget to promote was being sold.

As the quarter continued, there was consistent improvement in sequential demand. We are able to increase gross margin in the SMB business partially due to an improvement in our sales product mix and a reduction in lower margin volume iPod sales to certain customers partially offset by a large supply sales to a single customer at lower margins.

For our SMB headcount numbers were down 11% year-over-year as we adjusted to the demand environment remained committed to our strategy investing in SMB headcount to position us for long term growth and profits.

Operating margin increased to the SMB business indicated with tight cost controls and we continue to look to more efficient support systems to allow us maintain investments while keeping cost tight.

As part of our strategy to manage through the tough demand environment, we have launched additional initiatives in our SMB business around obtaining new buying customers and as a result we added 10% more new buying customers in Q1 2009 than we did in Q1 2008. The increase in new buying customers serves as a partial offset to the slowdown and purchases from existing customers.

Our MME segment which we market under the SARCOM and Abreon brands had 18% decline in revenue year-over-year for Q1 2009. During Q1 2009 similar to SMB we added tough certain January with demand improving as it closes the quarter. Again, we believe the additional pressure on the month of January was a result of 2009 corporate budget profit is being stalled. MME product revenues declined by 24% while services revenues grew 7% over the prior year.

Despite the tough demand environment we saw a positive result in gross margin, operating margin and operating profit for MME business. Gross margins grew by 160 basis points primarily as a result of the mix shift, a strong service growth versus weaker product demand. Gross profit declined by only 10% all distributed total revenues while operating margin grew by 160 basis points and operating profit grew by 20% over the prior year as a result of a reduction in operating expenses of 17%. The reduction in operating expenses a combination of costs moving due to centralization as well direct operating cost reductions.

MME stronger gross margins reflect continued strengthen our services business which grew to 27% of MME net sales. Despite the challenging demand environment, we continued to maintain a strong pipeline for service opportunities. We continued to invest and building more service capability both on the managed service side and for professional services.

Our solutions focused in professional services, teams are working together to drive opportunity and key technology segments like storage virtualization, unified communication, security and others. We continued to invest in both MME sales and service personnel, again, positioning ourselves for long term growth as the economy improves.

In our PC Mall Gov public sector segment, revenues declined by 23% Q1 2009 over Q1 2008. Solid growth of 18% year-over-year on our state, local and education business was offset by a decline of 35% in our federal business. We have agreed that the decline in our federal business was the result of a delay in the approval of the federal budget by the federal government which ultimately was approved in March. In this bad business, we continued to see growth as a result in increase productivity as well as strength in our contract sales and in our transactional sales.

Gross profit margin grew for PC Mall Gov 324 basis points largely due to a stronger product mix for Q1 2009. Gross profit dollars were also up slightly. Operating margin increased 89 basis points due to a stronger gross profit offset by flat operating expenses as PC Mall Gov continue to invest an additional headcount for long term growth.

Sales in our consumer segment which include our MacMall, ClubMac and OnSale brands declined 15% or $10.2 million from $67.8 million in Q1 ’08 to $57.6 million in Q1 ’09. This decrease was primarily due to continued softening in consumer spending. The current economic environment continues to challenge our consumer business from a revenue perspective which has been exacerbated by an increasingly competitive pricing environment.

However, we continue to have a lot to be excited about. Last week, we launched the data of our new and much improved website platform for MacMall and are excited about many of its new features. We expect to upgrade the OnSale, ClubMac, and PC Mall websites to the new web architecture in the coming months.

At this time, I will review the product category results. With the significant pressure on demand, also our categories experienced year-over-year decline. Although we continue to see demand dollars prioritized for certain product categories like storage virtualization, unified communications and security. Other area we anticipate will be strong growth categories first in the future includes SaaS, networking and physical security.

We continue to make investment to our presales and service capabilities in those areas to enable a strong value proposition for existing and perspective customers in all commercial segments.

Our two largest product categories were Notebooks software, each of 17% as compared to 16% and 15% respectively for Q1 2008. Software sales declined 15% over Q1 2008; Notebooks sales declined 20% over Q1 2008.

Our next largest category was Desktops at 9% of sales versus 10% in Q1 2008 and down 33% in sales over Q1 2008. Storage was flat at 8% of sales with the sales declined of 14% from the prior year. Networking increased to 7% of total sales versus 6% in Q1 2008 but sales declined at a rate of 14%.

Supplies were strong growth category for us. Largely, the result of sales through a single customer discussed earlier. Growth in supplies revenue was 44%, making supplies 5% of total revenue. Another notable growth category for us is power with 11% year-over-year growth and representing 2% of our overall revenues. Separate from product sales, service sales grew overall at the Company going 7% of total revenues to 9% of total revenues with year-over-year growth rate of 7%.

As I mentioned earlier with respect to SARCOM, we are seeing more consistent demand for services and we are working hard to scale SARCOM service capability across both our SMB and public sector segments.

On the manufacture concentration standpoint on a gross consolidated basis, our top five manufacturers for Q1 2009 were Apple, HP, Lenovo, Microsoft and Cisco respectively who in aggregate represented approximately 50% of total revenues.

At a point of reference, the top five manufacturers for Q1 2008 were Apple, HP, Microsoft, Sun, and Lenovo who represented approximately 55% of our total revenues.

At this point, I will turn the call back over to Frank Khulusi. Frank?

Frank Khulusi

Thanks Kris. As I stated earlier, I am proud and aware our Company has navigated through a pretty tough demand environment early in 2009. I would like to close my comments briefly on my view of where we are going.

Well, it is hard to be certain about the future, we are cautiously optimistic that we are near at the bottom from a year-over-year demand comparison perspective. We have seen relative stability in demand thus far in Q2, but we are cautious in our outlook for the remainder of 2009. We continue to execute our strategy of containing costs while making strategic investments and I am proud of a way that our team has executed during these challenging times.

We believe our value proposition is a strongest has ever been and we continue to be dedicated to optimizing our results in the current environment while positioning ourselves for future growth.

Now, I would like to open this call for any questions you may have. Operator?

Question-and-Answer Session

Operator

(Operator Instructions) Your first question comes from the line of Brian Alexander - Raymond James.

Brian Peterson - Raymond James & Associates

This is Brian Peterson for Brian Alexander. Guys, just to start on demand, I know last call you said on the March quarter you saw some increased activity. Did that actually flow through or is some of that still out there? I am just trying to get some greater color on the stabilization that we are seeing.

Frank Khulusi

The increased activity flowed through and it resulted in sequential increase and performance both on a sales per day basis, sales per ship data as well as sales per month basis throughout the quarter.

Brian Peterson - Raymond James & Associates

How is that trending in April thus far?

Frank Khulusi

At this point, we have seen stability. We do not see any further improvement but we do not see any further deterioration.

Brian Peterson - Raymond James & Associates

Okay. If I look at the MME margins and I know the services mix is driving a lot of your expansion there. Where do you see that ultimately settling as far as a service mix as a percentage of MME revenues?

Frank Khulusi

Well, Brian, it is very hard to answer that question because we do not manage the business to a particular mix and whereas we are happy about the increase in margin or unhappy that part of that increase comes from a reduction in product revenue sales which are lower margin than services.

So, I will be the happiest guy if our margin actually decreases because hopefully that will mean that our product revenue is rebounding in the MME business.

Brian Peterson - Raymond James & Associates

Right. Okay, I know you guys mentioned the $1.7 million you expect from the savings. Can you guys maybe break out any timing of those savings or no?

Frank Khulusi

Yes, we can and we expect that roughly half of those savings will come in the second quarter and the remaining half will come slight over the third and the fourth quarter of this year.

Brian Peterson - Raymond James & Associates

Okay, great. Just lastly, how are you guys looking at capital deployment? I know you guys bought back some shares this quarter. Is that going to continue to be a priority maybe M&A or are looking to store cash? Thanks.

Frank Khulusi

We constantly evaluate between all the various tools that we have to increase shareholder value whether what the best use of capital is. So, we really cannot comment on exactly what our thought process is. Today, we continued to be opportunistic and we continued to look at acquisitions as well as we continue to have a desire to buyback stock, where that actually ends up, I cannot tell you.

Brian Peterson - Raymond James & Associates

Thanks.

Frank Khulusi

Thanks Brian. Any other questions from you, Brian?

Brian Peterson - Raymond James & Associates

No more.

Operator

Your next question comes from the line of Matt Sheerin - Thomas Weisel.

Matt Sheerin - Thomas Weisel Partners

Just following up on the question regarding demand, sounds like things have stabilized not getting much better. Historically, it looks like the June quarter is about flattish sequentially for you seasonally. Is that sort of how you are seeing it now? Do you think that maybe there is some pent-up demand as Kris pointed out? Some budgets are opening up, but are there some customers out there, Kris or Frank, that sort of are putting things on hold to see how their businesses play out?

Frank Khulusi

Absolutely, there are customers that are still putting things on hold. There are customers that have opened up. So, it is kind of you win some, you lose some and it is really coming in every day and fighting in the trenches, working on a client customers and retaining customers, but we do very well with that and with chaos comes opportunity.

So, I am very optimistic about the future. With respect to the short term future, however, it is hard to forecast. The best thing I can do right now is tell you based on what we note today. We think it is going to be flattish from Q1 to Q2, but again, much of the quarter remains in front of us.

So, I would say, Matt, that we are not looking, we are currently not anticipating a significant bump if any bump at all from the first and the second quarter.

Matt Sheerin - Thomas Weisel Partners

Okay. And to your point Frank about sort of fighting in the trenches, are you finding market share opportunities against whether it would be smaller VARs or other direct resellers because of whether they are credit issues or service issues? Are you starting to see larger customers for instance change their buying habits at all?

Frank Khulusi

Yes, we are finding larger customers and all customers, a lot of customers I should say from all market segments, change their buying habits based on a multitude of reasons, some of which are what you are articulated with respect to the current suppliers. But others and most of those reasons have to do with their own individual reasons and their concern for the economy.

Matt Sheerin - Thomas Weisel Partners

Okay. And then the services business holding up very well. Is that partly because you are continuing to grow that and take share or is that also a priority for customers whether it would be outsourcing or continuing to need that service?

Frank Khulusi

Yes and yes.

Matt Sheerin - Thomas Weisel Partners

Okay.

Frank Khulusi

We believe that we are continuing to take share. We are executing quite a bit of other people out there in the market, as well as the customers themselves especially in this tough environment who view our value added services as more interesting than ever and so we are very excited about that business and as Kris mentioned earlier, in the scripted portion of this call that we continued to invest both on an organic basis to drive organic growth and build capability and functionality that we do not have as well as to add the functionality that we do have and also look for acquisitions that complement us in that area.

Matt Sheerin - Thomas Weisel Partners

Okay. And just lastly, as you look to return to growth whether it would be in a couple of quarters from now or next year, the operating leverage in the model sounds like some of the enterprise business comes back that could hinder gross margin but you should get some very strong leverage on your SG&A as you lower costs here, correct?

Frank Khulusi

Absolutely. I mean if you look at our headcount alone I mean it did not go down on the sales side commensurate with the decrease in sales so that clearly indicates an investment from a headcount perspective relative what it could have been. We are also investing quite a bit on the IT side, quick mention by example the new MacMall site. But this is a very small example of what is a concerted effort that includes everything from our phone systems, our infrastructure to many, many other facets of what we do.

So, we are really using this opportunity to kind of full back a little bit and build for the future and we are very excited about when the market actually does come back. We think we are going to be in a very strong position.

Operator

(Operators Instructions)Your next question comes from the line of Chris Krueger - Northland Securities.

Chris Krueger - Northland Securities

A lot of my questions were already answered. You said a couple…

Frank Khulusi

You would just have to find new ones.

Chris Krueger - Northland Securities

The service business now, as you said is 27% of MME sales, right?

Frank Khulusi

Yes, correct.

Chris Krueger - Northland Securities

What was that a year ago?

Frank Khulusi

Twenty one percent.

Chris Krueger - Northland Securities

Of MME, okay, and again, understand what you are saying about MME gross margin going forward is if the product sales pick back up. We should see that go down but that would be obviously hopefully services grow as well as the overall gross margin dollars increased, correct?

Frank Khulusi

Correct.

Chris Krueger - Northland Securities

At some point, okay. What was the CapEx in the quarter?

Frank Khulusi

We do not work towards an increase in gross margin. We work towards an increase in gross profit and an increase in operating profit.

Chris Krueger - Northland Securities

As dollars, right, well, what was the CapEx in the quarter?

Brandon LaVerne

CapEx was about $1.5 million.

Frank Khulusi

Reflecting some of the investments and systems that I mentioned earlier.

Chris Krueger - Northland Securities

Alright. Last question, just more qualitative, just in general when you just look out to the next three to six months, do you feel better about the situation than you did three or four months ago of looking on this in the future?

Frank Khulusi

Absolutely. I mean January was pretty scary but the one thing that kept us stay and it was the fact that our customers were saying that they just did not have their budget approved yet. It is not like they were not going to spend and then as things have corrected at least now we can count on a certain run rate business. I mean we do not know what we do not know but we are much more relaxed than we were in at the start of this year.

Chris Krueger - Northland Securities

Alright, and last question, on public spending, is there any thoughts on the stimulus package that we are spending and if there is any potential for benefit there or any comments you are hearing from those types of customers for the next remainder of the year?

Frank Khulusi

We are probably as good as any other economies out there. No, we are not, as far as predicting what the effectiveness of the stimulus packages. I was joking. We do not know. We really do not know. We are hopeful that I mean there is a lot of money being pumped in the system and the economy. So, at some point that should help and that should mean something but that really remains to be seen. We have not started feeling the impact of that. We do not believe that the sequential increase that we experienced in the first quarter have much to do with any increase spending. We think it has to do with a little of I would not say return to sanity but more civilization in the credit markets a little bit and also the fact that the companies have to open up of their spend at some point.

The beauty of our business is that companies can defer and can defer, but at some point they are going to have to spend and when they spend a lot of what they have deferred they are going to have to catch up. It is not like they are saving. Some of them are saving especially if they lay off people but others they are going to have to really catch up with some money that they have deferred.

So, again, well, we are just like you, to a large extent, spectators. All we can do is prepare and be ready and have faith. I have great faith in this country and I know we will return with a vengeance and we will be there. We will ready to take advantage of it.

Operator

Your next question comes from the line of Bill Dawkins - Dawson Dawkins Incorporated.

Bill Dawkins - Dawson Dawkins Incorporated

Great work and for a long, long time you guys are operating this thing better than ever I have ever seen you. Since the other question has been asked, one general question with respect to Windows 7 and I do not know how much talk you will have with your customers and stuff like that in particular in respect to maybe a pent-up demand issue. But are any of your customers talking about Windows 7 and the release of that and anything that would be wrapped around that?

Kristin Rogers

It is Kris. Candidly no, I think that there is and actually to be really candid. The only people I have ever talked to that I have ever talked about Windows 7 are the OEMs and so, yes, it might come up in the conversation with HP or someone else but it is not coming up in the corporate environment. I do not think there is any pent-up demand with respect to the release and so it is not having any affect on our business whatsoever.

I wish it. I wish I could tell you that there is a pent-up in demand but there is really not.

Frank Khulusi

However, based on the future functionality that I am hearing at the positive reviews, we do expect that when it does roll out that it should have an impact on the customer base at that point and probably start forcing an upgrade cycle in a way that distant and better than what Vista did.

Bill Dawkins - Dawson Dawkins Incorporated

I was going to say, Frank, a lot of the stuff I have been reading has been saying exactly the same thing. I can remember the day when XP got launched and of course Y2K was all part of this stuff but I can remember the day when a new operating system did release some pent-up demand. I just was interested in knowing if Windows 7 was creating any event or whatsoever. Anyway, great quarter for you all.

Operator

There are no further questions at this time. I would like to turn the call over back to the President for closing remarks.

Frank Khulusi

Yes, I would like to thank you all for participating on this call and for your continued support of PC Mall. As always, I would like to remind you to call us whenever you have a need for technology products. Also do not forget to try the new features on the new data MacMall website at MacMall.com. Have a great evening.

Operator

Thank you for your participation in today’s conference. This concludes the presentation. You may now disconnect and everyone have a great day.

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