Connection reported fourth quarter and full-year sales growth in its three business segments in fiscal 2016. The I.T. equipment and services company, which sells through e-commerce, a paper catalog and sales reps, expects to grow its global small to medium-sized business segment this year with a late 2016 acquisition.
Connection, the new brand name announced by PC Connection Inc. last fall, acquired in October GlobalServe, an I.T. procurement and service management company. GlobalServe operates a portal for its customers’ global I.T. needs, including delivery, reporting, pricing and logistics, Tim McGrath, Connection president and CEO, told analysts on the company’s year-end earnings call last week.
The procurement platform is designed to simplify “our customers’ global I.T. procurement and reduces their cost. And now with the latest release of the software, OneSource, we can offer this global capability to our SMB customers. We believe that this acquisition gives us true competitive advantage in the marketplace and we expect that this will be an important component of our overall future growth strategy,” McGrath told analysts, according to a transcript of the call from Seeking Alpha.
Connection operates three segments, led by its Business Solutions unit that sells I.T. products and services to small to medium-sized businesses. Its Public Sector unit sells I.T. products and services to federal, state and local government agencies and educational institutions. Both units sell through sales reps, catalogs and online, at Connection.com and GovConnection.com, respectively.
The Enterprise segment offers corporate clients products, software and supply chain services through TRAXX, its cloud-based e-procurement system.
Connection does not break out e-commerce sales.
For the fourth quarter, Connection, No. 107 in the 2017 B2B E-Commerce 300, reported:
- Sales to small and mid-sized businesses of $276.37 million, up 5.2% from $262.64 million.
- Sales to large account clients of $288.8 million, up 4.3% from $277.0 million.
- Sales to public sector clients of $170.4 million, up 17.7% from $144.7 million.
- Total sales of $735.5 million, up 7.5% from $684.3 million.
- Net income of $13.0 million compared with net income of $13.6 million in the same period in fiscal 2015.
For the full year, Connection did not break out total sales for its SMB, large account and public sector segments. But, based on quarterly reports filed with the U.S. Securities and Exchange Commission, B2BecNews calculates those sales as follows:
- Sales to small and mid-sized businesses of $1.12 billion, up 7.7% from $1.04 billion in fiscal 2015.
- Sales to large account clients of $982.0 million, up 2.2% from $961.1 billion.
- Sales to public sector clients of $589.4 million, up 3.0% from $572.4 million.
The company also reported for the full year:
- Total sales of $2.692 billion, up 4.6% from $2.573 billion.
- Net income of $48.1 million, compared with net income of $46.8 million in fiscal 2015.
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