Weak demand from both businesses and consumers led to a disappointing third quarter for PC Connection, Inc.
The computer supplies marketer generated $308.7 million in sales, compared with $404.9 million for the same period in 2000. Net income plummeted from $10.3 million last year at this time to $1.9 million. The quarter ended Sept. 30.
In response, the firm will tweak its marketing and “aggressively seek cost reductions wherever possible,” said Ken Koppel, CEO of the Merrimack, NH-based firm,, in a statement.
However, Koppel added that sales to government and education customers were “bright spots this quarter.”
Overall, roughly 297,000 orders were entered in the three-month period, compared with 374,000 last year. The average order size dropped from $1,272 to $1,259.
Network computer systems, although they fell from 25% to 22.% of total net sales, remained the biggest sellers. Desktop and server computer systems totaled 12% of net sales, compared with 15.1% during the third quarter last year.
PC Connection distributed 9.8 million catalogs during the quarter, compared with 10.5 million last year.
The firm’s managed account program produced 82% of the total revenue during the quarter, compared with 78% last year. The number of outbound sales account managers has risen in a year from 467 to 496.
“PC Connection’s balance sheet remains strong, with cash balances in excess of $50 million,” said Wayne Wilson, COO, in a statement. “Inventory levels have been driven down to $41 million with inventory turns of 23 times a year.”
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