Large companies involved in healthcare and other industries drove up 2015 sales for PC Connection Inc., a direct marketer of computers and related gear to businesses, government agencies and consumers. While total online and offline sales increased 8.5%, sales to healthcare and other large organizations grew 22.8%.
The company says it had “significant growth” in sales to healthcare companies, helping to rack up the highest quarterly revenue ever posted by PC Connection’s large account segment. The company sells I.T. products, systems and services to large corporate customers through its wholly owned subsidiary MoreDirect Inc., which engages customers through its e-commerce site, MoreDirect.com, and through Traxx, its cloud-based procurement system.
“Healthcare, which is our largest vertical today, continues to drive demand for us,” PC Connection CEO Tim McGrath said in a conference call with stock analysts last week, according to a transcript of the call from Seeking Alpha.
PC Connection doesn’t break out online B2B sales, but the B2B E-Commerce 300 estimates its 2015 online sales to businesses at $926.3 million, 36% of total sales of $2.573 billion. The B2B E-Commerce 300 is published by Vertical Web Media, which also publishes B2BecNews.
PC Connection also has two other wholly owned subsidiaries: PC Connection Sales Corp., which caters to small and midsized businesses as well as consumers, and GovConnection Inc., which sells to educational institutions and federal, state and local government agencies.
PC Connection, the company’s original business unit, sells more than 300,000 I.T. products through e-commerce sites PCConnection.com and, for Apple Inc. products, MacConnection.com. It also sells through technically trained sales managers, print catalogs and other publications.
GovConnection sells through its e-commerce site, GovConnection.com, and through specialized account managers, catalogs and other publications.
By product category, PC Connection says orders for notebook computers and mobile devices—its largest product category—accounted for 20% of sales in 2015. Orders for Internet-based products, security and virtualization items within the company’s Software category, also drove growth, McGrath told analysts. The sale of virtualization products involves items like online storage and networking servers that pool multiple storage and server resources, expanding the power of systems without making them appear more complicated to the end-user.
During the fourth quarter ended Dec. 31, PC Connection also reported:
- Net sales of $684.3 million, up 8.5% from $630.8 million a year earlier;
- Net income of $13.6 million, up 14.3% from $11.9 million;
- Net sales to its small and midsized business customers increased 0.4% to $262.65 million from $261.66 million.
- Net sales to large companies increased 22.8% to $276.98 million from $225.61 million.
- Net sales to the government agencies and schools increased 0.8% to $144.7 million from 143.5 million.
For the 12 months ended Dec.31, PC Connection reported:
- Net sales of $2.57 billion, a 4.5% increase from $2.46 billion during this time last year;
- Net income of $46.8 million, up 9.7% from $42.7 million;
- The company also spent $296,000 in start-up costs for a new distribution center that opened at the end of the third quarterQ3. PC Connection did not say where the new distribution center is located.
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