UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
___________________________

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported):   July 28, 2016

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

⃞ 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 July 28, 2016, PC Connection, Inc. announced its financial results for the quarter ended June 30, 2016.  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

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.

EXHIBIT INDEX

Exhibit 99.1

PC Connection, Inc. Reports Second Quarter 2016 Results

SECOND QUARTER SUMMARY:

• Net sales up 8% y/y
• Gross margin 13.9%, an increase of 70 basis points
• Diluted EPS: $0.47, up 7% y/y
• Adjusted EPS excluding special charges: $0.49, up 11% y/y
• Completed Softmart acquisition

MERRIMACK, N.H.--(BUSINESS WIRE)--July 28, 2016--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 June 30, 2016. The Q2 results include one month of activity for Softmart, Inc. which was acquired on May 27, 2016. Softmart is a national solution provider of hardware, software, and services, and annual revenues are approximately $200 million. Softmart has significant expertise with Microsoft, and has built a team of cloud experts, in addition to having attained Microsoft Tier 1 Cloud Solution Provider status.

Net sales for the second quarter of 2016 increased by 7.7% to $676.2 million, compared to $627.6 million for the prior year quarter. Gross profit increased by 13.1% from $83.0 million to $93.9 million primarily due to an increase in gross margin from 13.2% to 13.9% in the second quarter of 2016. Net income for the quarter ended June 30, 2016 increased by 7.1% to $12.5 million, or $0.47 per diluted share, compared to net income of $11.6 million, or $0.44 per diluted share for the prior year quarter.

The second quarter 2016 results include $0.8 million of acquisition and restructuring costs. This charge includes professional fees related to the Softmart acquisition, severance related to internal restructuring activities, and duplicate costs incurred in our office move from Itasca, Illinois to Schaumburg, Illinois. The Company will continue to evaluate additional restructuring in the third quarter. In addition, the Company will break out amortization of acquired intangible assets in the income statement, which is estimated to be approximately $0.3 million per quarter. Earnings per share, adjusted for acquisition costs, restructuring charges, and amortization of acquired intangibles, increased to $0.49 cents per share for the quarter ended June 30, 2016, compared to $0.44 cents per share for the prior year quarter.

Net sales for the six months ended June 30, 2016 were $1,248.6 million, an increase of $39.7 million or 3.3%, compared to $1,208.9 million for the six months ended June 30, 2015. Net income for the six months ended June 30, 2016 increased by 6.5% to $21.5 million, or $0.81 per diluted share, compared to net income of $20.2 million, or $0.76 per diluted share, for the six months ended June 30, 2015. Earnings before interest, taxes, acquisition and restructuring costs, depreciation and amortization, and stock-based compensation expense (“Adjusted EBITDA”) totaled $93.1 million for the twelve months ended June 30, 2016, compared to $84.1 million for the twelve months ended June 30, 2015.

Quarterly Performance by Segment:

• Net sales for the SMB segment increased by 8.3% to $280.8 million in the second quarter of 2016, compared to the prior year quarter. Softmart’s revenues for June are included in SMB since most of their customer base falls into this segment. Gross margin increased by 78 basis points to 16.2% due to strong performance in advanced technology solution categories, which contributed to a 13.8% increase in gross profit.
• Net sales for the Large Account segment increased by 12.0% to $259.6 million in the second quarter of 2016, compared to the prior year quarter. Strong performance in software generated most of the increase.
• Net sales to the Public Sector segment were basically unchanged at $135.7 million in the second quarter of 2016, compared to the prior year quarter. Gross margin improved by 149 basis points due to increased software and net/com sales; this resulted in a 13.7% increase in gross profit.

Quarterly Sales by Product Mix:

• Notebook/mobility sales, the Company’s largest product category, increased by 6% year over year and accounted for 23% of net sales in the second quarter of 2016 compared to 24% of net sales in the prior year quarter. Mobility continues to be a strategic focus area for customers in each of our three segments.
• Software sales increased by 35% year over year and accounted for 22% of net sales in the second quarter of 2016 compared to 18% of net sales in the prior year quarter. We experienced growth in cloud-based offerings, security, and virtualization.

Overall gross profit increased by $10.9 million, or 13.1%, in the second quarter of 2016, compared to the prior year quarter. Consolidated gross margin, as a percentage of net sales, increased to 13.9% for the second quarter of 2016, compared to 13.2% for the prior year quarter.

Selling, general and administrative expenses, excluding acquisition costs, restructuring charges, and amortization of acquired intangibles, increased in the second quarter of 2016 to $71.9 million from $63.1 million in the prior year quarter, with variable cost increasing due to higher levels of gross profit. 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.

Total cash was $47.3 million at June 30, 2016, compared to $80.2 million at December 31, 2015. The primary cause of the decline was the $34 million acquisition price for Softmart. Days sales outstanding were 45 days at June 30, 2016, and inventory turns were 22 turns in the second quarter of 2016.

“The Softmart acquisition solidifies our position as one of Microsoft’s largest partners, and it provides us with enhanced cloud and services capabilities," said Timothy McGrath, President and Chief Executive Officer. "Our strong revenue and gross profit performance drove significant growth in net income this 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 and Adjusted EPS are non-GAAP financial measures. 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. In addition, the company has over 2,500 technical certifications to ensure that we can solve the most complex issues of our customers. 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. 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.

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“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, 2015. 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.

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CONTACT:
PC Connection, Inc.
Joseph Driscoll, 603-683-2505
Senior Vice President, Treasurer and Chief Financial Officer