Weak demand in both the business and consumer markets led to a disappointing fourth quarter—and year--for PC Connection, Inc.
The Merrimack, NH-based direct marketer posted net sales of $273.1 million for its final quarter of 2001, compared with $345.1 million during the same period last year. The year and quarter ended on Dec. 31.
Annual sales fell to $1.18 billion, down from $1.45 billion during the prior year.
Net income plummeted by over $4 million during the quarter—to $1.4 million—compared with last year’s levels. For the year, net income declined to $7.2 million versus $31.7 million the year before.
CEO Ken Koppel said in a statement that the firm saw "some slowing in the rate of sales decline for the commercial segments during the quarter." However, he predicted that "demand will continue to be soft, at least through the first quarter of 2002."
Competitive pricing and lower demand levels also fed a decline in gross profit margin as a percentage of net sales. It totaled 10.9% during the quarter, compared with 11.9% in the previous year’s.
During the final quarter, the average order size dropped to $1,061 from $1,102 in 2000.
The firm’s outbound managed account program accounted for 79% of all sales, compared with 76% in 2000. The goal now is to improve the "quality and productivity" of the company’s 464 account managers (down from 496 last September), said Koppel.
The single largest seller continued to be notebook computer systems, which accounted for 20.5% of net sales. Desktop and service weighed in at 11.8% of sales.
