PCM Rakes In Revenue After Its M&A Spree

Months after it made several big splashes in the acquisitions market, fast-growing solutions provider giant PCM is reaping the benefits of its new additions.

PCM, based in El Segundo, Calif., reported record net first-quarter sales Thursday of $498 million, up 68 percent, beating expectations by nearly $9 million. It also reported earnings per share of 17 cents, which also exceeded expectations, by 2 cents.

Last November, PCM -- No. 29 on CRN’s 2015 Solution Provider 500 list -- bought the $800 million North American business-to-business assets of Systemax, including its coveted TigerDirect brand. Earlier in 2015, PCM acquired $393 million solution provider En Pointe and $111 million Canadian MSP Acrodex. On Thursday, Chairman and CEO Frank Khulusi said that with those deals, PCM acquired "strategic assets at attractive valuations."

[Related: PCM CEO: Acquisitions Have Drawn Vendors’ Attention]

"We're very bullish about the year and our future," Khulusi said on the company’s call with analysts after PCM released its first-quarter numbers following the market close. The acquired firms, he added, increased the company’s customer base and capabilities "in every segment of our business."

After what Khulusi called a "great start" to the year, PCM is "now focused on reaping the benefits of our improved position in the marketplace," added the company's president, Jay Miley. That, Miley said, includes the ability to cross-sell a variety of solutions to customers.

Miley also said PCM will continue its goal of reducing costs beyond the $10 million in annualized savings it achieved during the first quarter.

Earlier this year, Khulusi said the acquisitions drew more attention from PCM's vendor partners, saying at the time that they "really believe in us and are willing to invest at levels they haven't historically in order to ensure our success going forward."

On Thursday, PCM said commercial sector sales grew 48 percent, to $384.4 million. Meanwhile, public sector sales nearly doubled, to $72.5 million, while the new Canadian business sector, made possible by its acquisitions of Aerodex and the Canadian unit of the TigerDirect assets, took in $41.2 million.

PCM also got a boost in sales of services. Among its public sector clients, services rose a significant 38 percent during the quarter and accounted for 3 percent of all sales to that sector, PCM said. Meanwhile, in Canada, services accounted for 14 percent of sales among its newfound clients.

After the first-quarter successes, PCM is focused on "aggressively" growing earnings, said Khulusi, who expects "robust" second-quarter sales in the range of $580 million to $600 million.

He also raised the company’s full-year expectations on net sales to a range of $2.2 billion to $2.25 billion, which would represent a jump of 32 percent to 35 percent. Full-year guidance on earnings per share was also raised, from $1.27 to $1.40.

The numbers led to a very bright, optimistic outlook from Khulusi in PCM’s earnings statement.

"The new PCM enjoys the strongest strategic position in our history, and I am increasingly excited about our future," the CEO said.