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PCM Inc. Declares Stellar Results In Fourth Quarter

|Includes:PCM, Inc. (PCMI)

A technology solutions provider, PCM Inc. (NASDAQ: PCMI), formerly known as PC Mall Inc., announced its Q4, 2012 results on Feburary 28th. The company reported net sales of $382 million which was up by $2.2 million from sales of Q4 2011. Consolidated gross profits for the period were increased by $0.1 million to $50.50 million while GP margin for the group declined. Due to constrained demand, the MME segment's quarter net sales declined by 5 percent to $155.1 million. Product sales were pulled down by as much as 7 percent while services sales went up by 5 percent. During this quarter, the gross profit in that segment increased by $0.1 million while operating profits increased by $1.0. A highly productive sales force in the SMB segment managed to maintain profitability for the segment. Its net sales were up 7 percent to $122.7 as against the $114.2 million for the fourth quarter of last year. Due to a decrease in selling margins and vendor consideration, GP for this segment decreased by $0.1 million to $16.9 million. GP margin declined by 13.8 percent. Operating profits hiked by $0.2 million to $9.5 million.

The company's CEO and Chairman Frank Khulusi, said the year 2012 was a relatively difficult year in terms of demand being "far from ideal" he said. This was mainly because of the relatively slow growth of the U.S. market and the overall gloomy economic perspective in the European countries. These problems have caused recurrent deferrals of the purchase orders but still the company managed to increase its sales by 8 percent compared to the Q3 this year. The results were strong due to a "tight cost control" and a "solid execution" of the management teams, said Khulusi, who is also the President of the company.

A range of other internal targets on the reorganization and re-branding initiative of the company, were also achieved this quarter. The company's earnings before interest, tax and dividends rose by 18% and operating income hiked by 339 percent. PCMI also reached significant milestones of consolidating, and streamlining of its brands. Khulusi admired the efforts of his company, saying the team worked closely with customers as well as partners to ensure a seamless changeover to the new organizational structure.

Khulusi also pointed out his company's continuing commitment to expand its services footprint by proactively seeking avenues of value additions to its nationwide consumer base. The new and reorganized PCMI will be able to offer premium quality service through consultative selling and other marketing strategies. Such advancements will also make it possible for the company to strengthen demand patterns.

Consolidated balance sheet of the firm for the year ended December 31st 2012, showed signs of improvement as accounts receivables declined by $5.2 million to $202.8 million. Its inventory declined $10.5 million to $68.9 million due to seasonal fluctuations in demand. Working capital was $10.4 million more than the last year, while capital expenditure declined drastically to $9.4 million as against a total outlay of $28 million incurred during the year ended December, 2012.

The company also plans to launch a cloud data center based in the area of Columbus, Ohio, which shows that it is committed to deliver best in class managed service capabilities. PCMI was rated as the top managed service provider in the MSPmentor 501 Global of Nine Lives Media.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Stocks: PCMI