PCM To Hire 100 Salespeople Over Next 12 Months To Drive SMB, Public Sector Business

PCM expects to hire 100 salespeople over the next year to drive sales of advanced solutions and gain market share in the U.S. and Canada.

"The second-quarter results validate our strategic position as a larger, more profitable, and increasingly sophisticated player in a growing industry," said Frank Khulusi, chairman and CEO of PCM, during the company's earnings call Wednesday. "I am increasingly confident that we will capture a larger share of the IT solutions market."

The El Segundo, Calif.-based company, No. 28 on the 2016 CRN Solution Provider 500, delivered strong top-line growth in the most recent quarter, with sales climbing 21 percent to $581 million, due to the company's acquisitions of En Pointe, Acrodex and the North American technology solutions business of Systemax.

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Net income for the quarter ended June 30 skyrocketed from $249,000 last year to $7.41 million this year, or 63 cents per share. On a non-GAAP basis, earnings from continuing operations soared 246.4 percent to $8.01 million, or 66 cents per share. That clobbered a Zacks Investment Research forecast of 38 cents per share.

Wall Street sent PCM shares soaring, with the stock climbing 26 percent in after-hours trading Wednesday to $14.90 per share. Earnings were released after the market closed Wednesday.

PCM's endpoint technologies, advanced technologies and Microsoft practice groups performed exceptionally well last quarter, PCM President Jay Miley said during the earnings call. The company's entire go-to-market staff is now fully trained in both PCM's legacy offerings and the offerings recently brought over as part of the En Pointe, Acrodex and Systemax acquisitions, Miley said.

Miley said PCM will continue to focus on gaining U.S. and Canadian market share by shifting investments and redeploying resources toward advanced solutions. One area where PCM has seen a healthy return on its personnel allocation is pre-sales engineering, according to Khulusi.

To that end, Miley said PCM will next month open an outbound sales center in Rio Rancho, N.M., to support and grow the company's public sector and SMB client base. SMB clients have shown the most willingness to adopt cloud, Miley said, as well as emerging technologies in other spaces such as mobility.

PCM expects to employ at least 100 salespeople at the site by August 2017, and more than 220 by August 2019. Going forward, Khulusi anticipates that PCM will have sales opportunity around cloud as well as the Internet of Things, which he said will be prevalent despite it not completely taking hold yet.

"The breakneck pace of acceleration is more than it's ever been," Khulusi said. "With that comes opportunity for people in our space."

PCM saw sales in its commercial segment climb by 19 percent from $373.2 million last year to $445 million this year due to investments in advanced technologies and software. Public sector sales, however, fell by 6 percent from $105.7 million last year to $99 million this year due mostly to a $5.8 million reduction in sales to a single federal customer.

And Canada sales – which comprises the Acrodex assets as well as the Canadian portion of Systemax's TigerDirect business – came in at $37 million.

PCM saw growth across the board, with year-over-year notebook and tablet sales up 31 percent, desktop sales up 30 percent and software sales up 11 percent. The company's top vendors are Microsoft, Cisco Systems, HP Inc., Dell, Apple, Hewlett Packard Enterprise and Lenovo, which collectively represented 67 percent of PCM's gross billed revenue in the quarter, said CFO Brandon LaVerne.

For the coming quarter, PCM expects adjusted earnings of between 29 cents per share and 35 cents per share on sales of between $545 million and $560 million. Analysts from Thomson Reuters were projecting earnings of 31 cents per share on sales of $549.7 million.