8-K

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549___________________________

FORM 8-KCURRENT REPORTPURSUANT TO SECTION 13 OR 15(d) OFTHE SECURITIES EXCHANGE ACT OF 1934Date of Report (Date of earliest event reported):   April 30, 2015

PC Connection, Inc.

(Exact name of registrant as specified in charter)

Delaware	0-23827	02-0513618
(State or other juris- diction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

Rt. 101A, 730 Milford Road Merrimack, NH	03054
(Address of principal executive offices)	(Zip Code)

 
Registrant’s telephone number, including area code:   (603) 683-2000

N/A

(Former name or former address, if changed since last report)

⃞ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

⃞ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

⃞ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

⃞ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02.  Results of Operations and Financial Condition

          On April 30, 2015, PC Connection, Inc. announced its financial results for the quarter ended March 31, 2015.  The full text of the press release issued in connection with the announcement is furnished as Exhibit 99.1 to this Current Report on Form 8-K.  

          The information in this Form 8-K (including Exhibit 99.1) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Item 9.01.  Financial Statements and Exhibits

          (d)       Exhibits

                      The following exhibit relating to Item 2.02 shall be deemed to be furnished, and not filed:

                       99.1       Press Release issued by PC Connection, Inc. on April 30, 2015.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date:	April 30, 2015	PC CONNECTION, INC.
		By:	/s/ Joseph Driscoll
			Joseph Driscoll
			Senior Vice President, Treasurer and
			Chief Financial Officer

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press release issued by PC Connection, Inc. on April 30, 2015.

EX-99.1

Exhibit 99.1

PC Connection, Inc. Reports First Quarter 2015 Results

FIRST QUARTER SUMMARY:

• Net income up 20% year over year
• Net sales: $581.3 million, up 3.8% year over year
• Diluted earnings per share: $0.32 versus $0.27 last year
• Cash balance increased to $79.9 million

MERRIMACK, N.H.--(BUSINESS WIRE)--April 30, 2015--PC Connection, Inc. (NASDAQ: PCCC), a national provider of a full range of information technology (IT) solutions to business, government, healthcare, and education markets, today announced results for the quarter ended March 31, 2015. Net sales for the first quarter of 2015 increased by 3.8% to $581.3 million, compared to $559.8 million for the prior year quarter. Net income for the quarter ended March 31, 2015 increased by 20.4% to $8.6 million, or $0.32 per diluted share, compared to net income of $7.1 million, or $0.27 per diluted share for the prior year quarter.

Earnings before interest, taxes, depreciation and amortization, adjusted for stock-based compensation expense (“Adjusted EBITDA”) totaled $83.1 million for the twelve months ended March 31, 2015, compared to $69.5 million for the year ended March 31, 2014.

Quarterly Sales by Segment:

• Net sales for the SMB segment decreased by 1.4% to $249.9 million in the first quarter of 2015, compared to the prior year quarter. The decrease was due to a double-digit percentage decrease in desktops. Sales of notebooks, the largest SMB category, increased by 3.2% compared to the prior year quarter.
• Net sales for the Large Account segment increased by 4.2% to $209.5 million in the first quarter of 2015, compared to the prior year quarter. Servers and software had strong growth during this quarter at 83.5% and 25.8%, respectively. Commercial sales, which consists of SMB and Large Account sales, increased by 1.1% from the prior year quarter.
• Net sales to the Public Sector segment increased by 15.7% to $121.9 million in the first quarter of 2015, compared to the prior year quarter. Sales to state and local government and educational institutions increased by 3.9%, compared to the prior year quarter, while sales to the federal government increased by 47.6%. Servers and notebook/tablet sales were strong in this segment with an increase of 455.5% and 32.7%, respectively.

Quarterly Sales by Product Mix:

• Notebook/tablet sales, the Company’s largest product category, increased by 4% year over year and accounted for 22% of net sales in the first quarter of 2015 and 2014. Public Sector experienced strong year-over-year growth in notebook/tablet sales.
• Software sales increased by 7% year over year and accounted for 16% of net sales in the first quarter of 2015 compared to 15% of net sales in the prior year quarter. We experienced strong growth in security and cloud-based offerings.
• Server product sales increased by 84% year over year and accounted for 7% of net sales in the first quarter of 2015 compared to 4% of net sales in the prior year quarter. We experienced significant sales growth in both our Public Sector and Large Account segments in this product category.
• Storage sales increased by 26% year over year and accounted for 6% of net sales in the first quarter of 2015 compared to 5% of net sales in the prior year quarter. We experienced significant sales growth in both our Large Account and SMB segments in this product category.

Overall gross profit dollars increased by $4.8 million, or 6.5%, in the first quarter of 2015, compared to the prior year quarter. Consolidated gross margin, as a percentage of net sales, increased to 13.3% in the first quarter of 2015, compared to 13.0% in the prior year quarter as a result of increased demand in advanced technologies that generate relatively higher margins.

Total selling, general and administrative dollars increased in the first quarter of 2015 to $63.4 million from $61.1 million in the prior year quarter, but remained unchanged as a percentage of net sales at 10.9% due to leveraging our fixed costs over higher net sales. Variable SG&A increased year over year due to the higher levels of sales and gross profit achieved in the first quarter of 2015. We continue to invest in technical solution sales capabilities and expect SG&A expenses to rise accordingly. However, we are highly focused on improving efficiencies and streamlining wherever possible.

The Company generated significant cash flow during the quarter ended March 31, 2015. Total cash was $79.9 million at March 31, 2015, compared to $60.9 million at December 31, 2014. Days sales outstanding were 41 days at March 31, 2015, and inventory turns were 25 turns in the first quarter of 2015.

“We are pleased with our performance this quarter,” said Timothy McGrath, President and Chief Executive Officer. “An increase in demand for higher-margin data center products was a key contributor to our 20% growth in net income. In addition, good working capital management created positive cash flow of $19 million in the quarter. We believe our team and the strategies we have in place position us well to gain market share and increase long-term shareholder value.”

Non-GAAP Financial Information

Adjusted EBITDA is a non-GAAP financial measure. This information is included to provide information with respect to the Company’s operating performance and earnings.

About PC Connection, Inc.

PC Connection, Inc., a Fortune 1000 company, has three wholly owned sales subsidiaries: PC Connection Sales Corporation, MoreDirect, Inc., and GovConnection, Inc., headquartered in Merrimack, NH; Boca Raton, FL; and Rockville, MD; respectively. All three companies can deliver custom-configured computer systems overnight from our ISO 9001:2008 certified technical configuration lab at our distribution center in Wilmington, OH. Investors and media can find more information about PC Connection, Inc. at http://ir.pcconnection.com.

PC Connection Sales Corporation (800-800-5555), the original business of PC Connection, Inc. serving primarily the small- and medium-sized business sector, is a rapid-response provider of IT products and services. It offers more than 300,000 brand-name products through its staff of technically trained sales account managers, catalogs, publications, and its website at www.pcconnection.com. This company also serves consumer and small office users and is, under its MacConnection brand (800-800-2222), one of Apple’s largest authorized online resellers at www.macconnection.com.

MoreDirect, Inc. (561-237-3300), www.moredirect.com, provides corporate technology buyers with best-in-class IT solutions, in-depth IT supply-chain expertise, and access to over 300,000 products and 1,600 vendors through TRAXX™, our proprietary cloud-based eProcurement system. Backed by over 500 technical certifications, MoreDirect’s team of engineers, software licensing specialists, and project managers help reduce the cost and complexity of buying hardware, software, and services throughout the entire IT lifecycle.

GovConnection, Inc. (800-800-0019) is a rapid-response provider of IT products and services to federal, state, and local government agencies and educational institutions through specialized account managers, catalogs, publications, and online at www.govconnection.com.

pccc-g

# # #

“Safe Harbor” Statement Under the Private Securities Litigation Reform Act of 1995: This release contains forward-looking statements that are subject to risks and uncertainties, including, but not limited to, the impact of changes in market demand and the overall level of economic activity and environment, or in the level of business investment in information technology products, competitive products and pricing, product availability and market acceptance, new products, fluctuations in operating results, and the ability of the Company to manage costs in response to fluctuations in revenue, and other risks that could cause actual results to differ materially from expectations, including those detailed under the caption “Risk Factors” in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 2014. More specifically, the statements in this release concerning the Company’s outlook for selling, general, and administrative expenses, the Company’s efforts in improving efficiencies and streamlining its business and other statements of a non-historical basis (including statements regarding the Company’s ability to increase market share and enhance long-term shareholder value and the Company’s continuing investments in technical solution sales capabilities) are forward-looking statements that involve certain risks and uncertainties. Such risks and uncertainties include the ability to realize market demand for and competitive pricing pressures on the products and services marketed by the Company, the continued acceptance of the Company's distribution channel by vendors and customers, continuation of key vendor and customer relationships and support programs, the ability of the Company to gain or maintain market share, and the ability of the Company to hire and retain qualified sales representatives and other essential personnel. The Company disclaims any obligation to update the information in this press release or revise any forward-looking statements, whether as a result of any new information, future events, or otherwise.

CONSOLIDATED SELECTED FINANCIAL INFORMATION
At or for the Three Months Ended March 31,		2015					2014
				% of					% of		%
(Amounts and shares in thousands, except operating data, P/E ratio, and per share data)				Net Sales					Net Sales		Change
Operating Data:
Net sales	$	581,259				$	559,760				4	%
Diluted earnings per share	$	0.32				$	0.27				19	%
Gross margin		13.3	%				13.0	%
Operating margin		2.4	%				2.1	%
Return on equity (1)		12.6	%				11.6	%
Inventory turns		25					27
Days sales outstanding		41					39
Product Mix:
Notebooks/Tablets	$	126,948		22	%	$	121,947		22	%	4	%
Software		91,662		16			85,908		15		7	%
Desktops		60,481		10			70,857		12		(15	%)
Net/Com Products		51,563		9			54,064		10		(5	%)
Video, Imaging & Sound		49,955		8			48,749		9		2	%
Printer & Printer Supplies		39,825		7			37,045		7		8	%
Servers		39,649		7			21,539		4		84	%
Storage		36,059		6			28,653		5		26	%
Memory & System Enhancements		15,745		3			16,557		3		(5	%)
Accessories/Services/Other		69,372		12			74,441		13		(7	%)
Total Net Sales	$	581,259		100	%	$	559,760		100	%	4	%
Stock Performance Indicators:
Actual shares outstanding		26,351					26,206
Total book value per share	$	13.77				$	12.48
Tangible book value per share	$	11.76				$	10.43
Closing price	$	26.09				$	20.32
Market capitalization	$	687,498				$	532,506
Trailing price/earnings ratio		15.7					14.6
LTM Adjusted EBITDA (2)	$	83,101				$	69,525
Adjusted market capitalization/LTM Adjusted EBITDA (3)		7.3					6.7
(1) Based on last twelve months' net income.
(2) Adjusted EBITDA is defined as EBITDA (earnings before interest, taxes, depreciation and amortization) adjusted for stock-based compensation.
(3) Adjusted market capitalization is defined as gross market capitalization less cash balance.
REVENUE AND MARGIN INFORMATION
For the Three Months Ended March 31,		2015					2014
	Net			Gross		Net			Gross
(amounts in thousands)	Sales			Margin		Sales			Margin
SMB	$	249,874		15.5	%	$	253,471		14.9	%
Large Account		209,459		12.0			200,932		12.0
Public Sector		121,926		11.2			105,357		10.5
Total	$	581,259		13.3	%	$	559,760		13.0	%

CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended March 31,				2015					2014
(amounts in thousands, except per share data)				Amount			% of Net Sales		Amount			% of Net Sales
Net sales				$	581,259		100.0	%	$	559,760			100.0	%
Cost of sales					503,646		86.6			486,913			87.0
Gross profit					77,613		13.3			72,847			13.0
Selling, general and administrative expenses					63,434		10.9			61,101			10.9
Income from operations					14,179		2.4			11,746			2.1
Interest/other expense, net					1		-			(10	)		-
Income tax provision					(5,596	)	(0.9	)		(4,605	)		(0.8	)
Net income				$	8,584		1.5	%	$	7,131			1.3	%
Earnings per common share:
Basic				$	0.33				$	0.27
Diluted				$	0.32				$	0.27
Shares used in the computation of earnings per common share:
Basic					26,346					26,202
Diluted					26,593					26,485
EBITDA AND ADJUSTED EBITDA
A reconciliation of EBITDA and Adjusted EBITDA is detailed below. Adjusted EBITDA is defined as EBITDA (earnings before interest, taxes, depreciation and amortization) adjusted for stock-based compensation. Both EBITDA and Adjusted EBITDA are considered non-GAAP financial measures. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position, or cash flows that either includes or excludes amounts that are not normally included or excluded in the most directly comparable measure calculated and presented in accordance with GAAP. We believe that EBITDA and Adjusted EBITDA provide helpful information with respect to our operating performance including our ability to fund our future capital expenditures and working capital requirements. Adjusted EBITDA also provides helpful information as it is the primary measure used in certain financial covenants contained in our credit agreements.
(amounts in thousands)	Three Months Ended March 31,								LTM Ended March 31, (1)
		2015			2014		% Change			2015			2014		% Change
Net income	$	8,584		$	7,131				$	44,134		$	36,715
Depreciation and amortization		2,192			2,077					8,206			7,539
Income tax expense		5,596			4,605					29,678			24,193
Interest/other expense, net		(1	)		10					75			109
EBITDA		16,371			13,823					82,093			68,556
Stock-based compensation		238			159					1,008			969
Adjusted EBITDA	$	16,609		$	13,982		19	%	$	83,101		$	69,525		20	%
(1) LTM: Last twelve months

	March 31,			December 31,
CONDENSED CONSOLIDATED BALANCE SHEETS		2015			2014
(amounts in thousands)
ASSETS
Current Assets:
Cash and cash equivalents	$	79,882		$	60,909
Accounts receivable, net		284,851			293,027
Inventories		71,274			90,917
Deferred income taxes		7,749			7,749
Prepaid expenses and other current assets		6,153			5,332
Income taxes receivable		2,348			212
Total current assets		452,257			458,146
Property and equipment, net		28,102			27,861
Goodwill		51,276			51,276
Other intangibles, net		1,743			1,953
Other assets		673			724
Total Assets	$	534,051		$	539,960
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	116,211		$	124,893
Accrued expenses and other liabilities		18,871			22,011
Accrued payroll		14,931			17,793
Total current liabilities		150,013			164,697
Deferred income taxes		18,870			18,803
Other liabilities		2,296			2,452
Total Liabilities		171,179			185,952
Stockholders’ Equity:
Common stock		282			282
Additional paid-in capital		107,236			106,956
Retained earnings		271,216			262,632
Treasury stock at cost		(15,862	)		(15,862	)
Total Stockholders’ Equity		362,872			354,008
Total Liabilities and Stockholders’ Equity	$	534,051		$	539,960

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended March 31,	2015			2014
(amounts in thousands)
Cash Flows from Operating Activities:
Net income	$	8,584		$	7,131
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		2,192			2,077
Provision for doubtful accounts		733			128
Stock-based compensation expense		238			159
Deferred income taxes		67			64
Excess tax benefit from exercise of equity awards		(59	)		(34	)
Changes in assets and liabilities:
Accounts receivable		7,443			22,070
Inventories		19,643			7,722
Prepaid expenses and other current assets		(2,957	)		2,317
Other non-current assets		51			28
Accounts payable		(8,627	)		(15,205	)
Accrued expenses and other liabilities		(6,093	)		(2,682	)
Net cash provided by operating activities		21,215			23,775
Cash Flows from Investing Activities:
Purchases of equipment		(2,278	)		(1,466	)
Proceeds from sale of equipment		-			9
Net cash used for investing activities		(2,278	)		(1,457	)
Cash Flows from Financing Activities:
Excess tax benefit from exercise of equity awards		59			34
Exercise of stock options		20			16
Payment of payroll taxes on stock-based compensation through shares withheld		(43	)		(34	)
Net cash provided by financing activities		36			16
Increase in cash and cash equivalents		18,973			22,334
Cash and cash equivalents, beginning of period		60,909			42,547
Cash and cash equivalents, end of period	$	79,882		$	64,881
Non-cash Investing Activities:
Accrued capital expenditures	$	149		$	358
Supplemental Cash Flow Information:
Income taxes paid	$	8,818		$	1,063

pccc-g

CONTACT:
PC Connection, Inc.
Joseph Driscoll, 603-683-2322
Senior Vice President, Treasurer and Chief Financial Officer