PCM, Inc. (PCMI) Tops Q2 EPS by 27c, Revenues Miss; Boosts FY EPS Outlook

PCM, Inc. (NASDAQ: PCMI) reported Q2 EPS of $0.82, $0.27 better than the analyst estimate of $0.55. Revenue for the quarter came in at $546.4 million versus the consensus estimate of $569.98 million.

• Gross Profit Margin Increased 120 Basis Points to 16.5%
• Operating Profit Margin Increased 140 Basis Points to 2.4%
• Non-GAAP EBITDA Margin Increased 130 Basis Points to 3.5%
• Diluted EPS Increased 256% to $0.64
• Non-GAAP Adjusted EPS Increased 116% to $0.82

Frank Khulusi, Chairman and CEO of PCM, Inc., stated, “Coming on the heels of a great Q1, I am very pleased with our fantastic results in the second quarter. We achieved record gross profit, gross margin and adjusted EPS through solid execution in our strategic areas of focus and investment. During the quarter we increased our focus on higher margin sales such as managed services, advanced technologies, cloud, and security solutions, and in some cases walked away from some low-margin volume business we identified as unprofitable. These moves helped us achieve our highest ever gross margin of 16.5%, 120 basis points higher than the same quarter last year, and resulted in a slight reduction in sales, an outcome we’re happy with as our gross profit increased 6% from the same quarter last year. Reflecting strong expense discipline, consolidated SG&A expenses declined by 3% despite the 6% increase in gross profit. All of this resulted in us reaching on a non-GAAP basis adjusted EBITDA of $19 million, an adjusted EBITDA margin of 3.5%, and adjusted EPS of $0.82, all significant bottom line achievements we’re proud of. Additionally, this increased profitability combined with our focus on working capital management resulted in approximately $33 million of increased operating cash flow and nearly $36 million in further reductions in our net debt, which has now declined by nearly $69 million since the end of 2017. I would like to thank all my fellow co-workers at PCM for their hard work, die-hard dedication, and significant contribution to these record results.”

Commenting on PCM’s outlook, Mr. Khulusi concluded, “Due to our strong performance year to date as well as having a solid outlook for the rest of the year, we are increasing our 2018 guidance for non-GAAP earnings per share by $0.20 to a range of $2.20 - $2.30. We are also increasing our gross margin guidance for the year to a new range of 15.60% to 15.85% on revised sales growth guidance of low single digits, reflecting our focus on more profitable sales.”

For earnings history and earnings-related data on PCM, Inc. (PCMI) click here.

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