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): February 18, 2005
__________________________
PC MALL, INC.
(Exact Name of Registrant as Specified in its Charter)
__________________________
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Delaware | 000-25790 | 95-4518700 |
(State or other jurisdiction of | (Commission file Number) | (I.R.S. Employer |
2555 West 190th Street, Suite 201
Torrance, California 90504
(Address of Principal Executive Offices) (Zip Code)
(310) 354-5600
(Registrant’s telephone number,
including area code)
(Former Name or Former Address, if Changed Since Last Report)
__________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] 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 February 18, 2005, PC Mall, Inc..com, Inc. issued an earnings release announcing its financial results for the quarter and year ended December 31, 2004. A copy of the earnings release is attached hereto as Exhibit 99.1 and is incorporated by reference herein.
The information in this Current Report on Form 8-K, including the exhibit attached hereto, is furnished pursuant to Item 2.02 and shall not be deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section.
Item 9.01 Financial Statements and Exhibits
(c) Exhibits
99.1 Press Release dated February 18, 2005
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.
Date: February 18, 2005 | PC MALL, INC. | ||
By: | /s/Ted Sanders Ted Sanders Chief Executive Officer |
Index to Exhibits
Exhibit | Description |
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99.1 | Press Release dated February 18, 2005
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EXHIBIT 99.1
Contact:
Frank Khulusi, Chairman, President and CEO
Ted Sanders, CFO
PC Mall, Inc.
(310) 354-5600
or
Budd Zuckerman, (303) 415-0200
Genesis Select.
PC MALL REPORTS RECORD QUARTERLY SALES OF $325 MILLION UP 12 PERCENT FROM Q4 2003.
ANNUAL SALES PASS THE $1 BILLION MARK.
Highlights:
- Record quarterly sales of $325.4 million which represents 12 percent growth from Q4 2003.
- Record annual sales of $1.157 billion, reaching and passing the $1 billion mark.
- eCOST.com sales for the quarter increased 59 percent from Q4 2003 to $58.3 million.
- Consolidated GAAP earnings per share for the quarter were $0.00 (includes $0.10 per share of Sarbanes-Oxley consulting charges, non-cash stock-based compensation and software write-off) compared with Q4 2003 EPS of $0.09 diluted earnings per share.
- Core business (excludes eCOST.com and Onsale.com) pro forma diluted earnings per share were $0.14 (excluding special charges) compared with Q4 2003 core business pro forma EPS of $0.11.
- Corporate sales for the quarter increased 13 percent from Q4 2003.
- Corporate and public sector account manager sales-force increased 12 percent from Q4 2003.
Torrance, California -- February 18, 2004 -- PC Mall, Inc. (NASDAQ:MALL - news) today reported record fourth quarter sales of $325.4 million, up 12 percent from Q4 2003 sales of $289.9 million. Consolidated results in the quarter were breakeven versus diluted earnings per share of $0.09 in Q4 2003. On a non-GAAP basis, pro forma consolidated diluted earnings per share for Q4 2004 were $0.10, which excludes $0.10 per share of Sarbanes-Oxley consulting charges, non-cash stock-based compensation expense and software write-offs, net of tax ("special charges"). This compares with pro forma earnings per share for Q4 2003 of $0.10 which excludes non-cash stock-based compensation expense of $0.01 per share.
Core business segment (excluding eCOST.com and Onsale.com) sales for the quarter were $266.4 million, up five percent from $253.4 million for the same period last year. Core business earnings for Q4 2004 were $0.04 per share compared with Q4 2003 earnings of $0.10 per share. On a non-GAAP basis core business pro forma earnings for Q4 2004 which excludes special charges were $0.14 per share. This compares with non-GAAP core business pro forma earnings for Q4 2003 of $0.11 per share. Reconciliations between consolidated net income on a GAAP basis and pro forma net income excluding special charges and between core business GAAP net income and pro forma net income excluding special charges are provided in tables immediately following the Consolidated Statement of Operations.
Frank Khulusi, Chairman, President and CEO of PC Mall, Inc. said, "We achieved record quarterly sales and crossed the $1 billion annual sales mark for the first time in Company history. During the quarter, we continued to experience growth in our core business commercial sales, an area of strategic emphasis, largely due to our Canadian call center which serves the U.S. market. Our eCOST.com subsidiary also experienced continued growth as it continued to improve the efficiency of its advertising and promotional activities. We are proud of our record quarterly sales and growth rate and believe that these factors further our position with our vendors and commercial customers as one of the leading companies in our industry."
Khulusi continued, "While we continued to impact our short term results by investing in building our sales-force, we were able to expand our core business operating margin on a pro forma non-GAAP basis for the quarter to 1.4 percent of sales, up 40 basis points from 1.0 percent of sales in Q4 2003. We expect to continue to expand our Canadian sales force during 2005 within the remaining vacant space of the existing call center at a cost to short-term results."
Consolidated Q4 2004 sales increased 12 percent from Q4 2003 to $325.4 million from $289.9 million. Corporate sales for the quarter grew 13 percent and eCOST.com's sales grew 59 percent. Growth in these areas of strategic focus was partially offset by year-over-year declines in Q4 consumer sales of six percent and government sales of seven percent. The decline in government sales resulted from an unrepeated unusually large $3 million order received in Q4 2003 and increased sales of software licenses which are recorded on a net basis.
Consolidated gross profit for Q4 2004 rose 16 percent, or $5.5 million, from Q4 2003. The increase in gross profit resulted from an increase in sales and a 39 basis point increase in gross margin. Gross profit margins as a percentage of sales increased to 12.5 percent from 12.1 percent in Q4 2003 and 12.3 percent in Q3 2004. The increase in Q4 2004 gross profit margin from Q4 2003 is primarily the result of increased vendor consideration received by the Company as a percentage of net sales. Core business gross profit increased 51 basis points of sales to 13.0 percent of sales from 12.4 percent of sales in Q4 2003 due to pricing initiatives as well as additional vendor consideration received during the quarter. eCOST.com also increased its margin by 65 basis points of sales to 10.3 percent of sales for Q4 2004 from 9.7 percent of sales for Q4 2003. eCOST.com's improved margin reflects higher vendor consideration, partially offset by promotional offers. The Company's gross profit percentage will vary from quarter to quarter depending on the continuation of key vendor support programs as well as product mix, pricing strategies and other factors.
Consolidated selling, general and administrative expenses ("SG&A") as a percentage of sales for Q4 2004 increased to 10.2 percent of sales from 9.1 percent of sales in Q4 2003 primarily due to the special charges, which totaled 0.7 percent of sales.
Advertising expenses increased by $0.4 million to $6.9 million in Q4 2004, primarily due to a $1.0 million increase in advertising by eCOST.com. Advertising spending by the core business declined by $0.7 million, substantially offsetting eCOST.com's spending increase. The core business advertising savings in Q4 2004 were partially redeployed to fund the expansion of the corporate and public sector sales-force.
Corporate and public sector account manager headcount included in SG&A at the end of Q4 2004 amounted to 649 employees, up 71 managers from Q4 2003 but down 37 account managers from Q3 2004. Average tenure for a corporate and public sector account manager at the end of Q4 2004 was 22 months with 10 percent of the corporate and public sector workforce in training, 54 percent with less than one year experience and 71 percent with less than two years experience.Total account managers including those focusing on corporate, public sector and consumer customers numbered 818 at the end of Q4 2004, up 72 managers from Q4 2003 but down 3 managers from Q3 2004.
Khulusi stated, "Our focus for 2005 will be weighted towards initiatives designed to enhance the productivity of the sales-force we have added during the past two years. These initiatives include: an advanced training program for our existing sales-force focusing on enterprise products; compensation programs emphasizing achieving tenure milestones; and additional technology tools intended to enhance productivity."
eCOST.com's Q4 2004 sales increased 59 percent over the same period last year to $58.3 million from $36.6 million in Q4 2003. Twelve month active customers at the end of Q4 2004 rose 77 percent over Q4 2003, and new customers acquired during the quarter increased 73 percent over the same period last year. During the quarter, eCOST.com launched three new product categories and a new membership program to enhance repeat purchases and customer loyalty. In connection with our proposed distribution of eCOST.com's common stock to our stockholders, we currently expect the distribution to occur early in Q2 2005.
Cash and cash equivalents at the end of the quarter were $22.5 million. Accounts receivable at December 31, 2004 rose by $23.0 million from December 31, 2003, reflecting increased sales on account to corporate and government customers during the period. Inventories of $80.7 million at December 31, 2004 was essentially unchanged from December 31, 2003, increasing only $0.1 million. Accounts payable declined $14.0 million from December 31, 2003, as the Company took advantage of increased vendor early pay discounts. Borrowings under PC Mall's line of credit increased by $22.8 million at the end of the year from December 31, 2003. However, working capital rose $25.6 million to $53.8 million at December 31, 2004 from $28.2 million at December 31, 2003.
Non-GAAP Measures
As described below, the pro forma results contained herein for the consolidated business and the core business, which are a supplement to financial results based on generally accepted accounting principles, exclude Sarbanes-Oxley consulting charges, non-cash stock-based compensation charges and other non-recurring charges. The Company believes that the presentation of results excluding these items provides meaningful supplemental information to both management and investors that is indicative of the Company's consolidated and core business operating results across reporting periods. The Company includes a full income statement reconciliation of these non-GAAP measures to provide a more complete view of their effect on results.
* * *
Conference Call
Management will be holding a conference call on Friday, February 18, 2005 at 9:00 a.m. Eastern time (6:00 a.m. PST) to discuss fourth quarter results. To listen to PC Mall's management discussion of the fourth quarter results live, access the PC Mall website,www.pcmall.com, and click on the Investor Relations section.
A conference call replay will be available immediately following the call until March 11, 2005 and can be accessed by calling: (888) 286-8010 and inputting pass code 95248644.
About PC Mall
PC Mall, Inc. together with its subsidiaries (the Company), is a rapid response supplier of technology solutions for business, government and educational institutions as well as consumers. More than 100,000 different products from companies such as Apple, HP, IBM, and Microsoft are marketed to business customers using relationship based selling, direct marketing, catalogs and the Internet (http://www.pcmall.com, http://www.macmall.com, http://www.pcmallgov.com). Customer orders are rapidly filled by the Company's distribution center strategically located near FedEx's main hub or by PC Mall's extensive network of distributors, one of the largest networks in the industry.
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements include the statements regarding the Company's expectations, hopes or intentions regarding the future, including but not limited to statements regarding cash position, expense reductions, leverage, sales growth, market share and customer acquisition, gross profit, corporate and public sector sales initiatives, the effect of the Company's reinvestment in its sales force, the prospects for the Company's OnSale.com and eCOST.com subsidiaries; to the timing of the proposed distribution of eCOST.com's common stock to our stockholders; growth of the professional and engineering services business, enterprise market, seasonality, and operating results for the fourth quarter and 2004 fiscal year. Forward-looking statements involve certain risks and uncertainties, and actual results may differ materially from those discussed in any such statement. Among the factors that could cause actual results to differ materially are the following: uncertainties relating to the relationship of increases in account managers and productivity; decreases in revenue related to corporate and public sector sales; increased competition and pricing pressures; availability of third party suppliers at reasonable prices; increased expenses, increased costs from online initiatives; risks due to shifts in market demand or price erosion of owned inventory, inability to convert back orders to completed sales, and the exchange rate between the U.S. and the Canadian dollar; inability to maintain adequate internal controls to produce reliable financial statements; and inability of eCOST.com to successfully develop operational and administrative infrastructure to support their separation from PC Mall. Additional factors that could cause actual results to differ are discussed under the heading "Certain Factors Affecting Future Results" and in other sections of the Company's Form 10-K for the 2003 fiscal year, on file with the Securities and Exchange Commission, and in its other periodic reports filed from time to time with the Commission. Additional risk factors relating to eCOST.com's business are discussed in eCOST.com's registration statement on Form S-1 (No. 333-115199), filed with the Securities and Exchange Commission, and in its other periodic reports filed from time to time with the Commission. All forward-looking statements in this document are made as of the date hereof, based on information available to the Company as of the date hereof, and the Company assumes no obligation to update any forward-looking statement.
# # #
-Financial Tables Follow-
PC MALL, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(unaudited, in thousands except per share data)
December 31, December 31,
2004 2003 2004 2003
Net sales $ 325,352 $ 289,932 $ 1,157,253 $ 975,586
Cost of goods sold 284,807 254,930 1,011,787 848,791
Gross profit 40,545 35,002 145,466 126,795
Selling, general and administrative expenses:
Selling, general and administrative expenses 30,916 26,189 112,050 97,173
Non-cash stock-based compensation expense 450 145 1,921 294
eCOST.com non-recurring charges - - 653 -
Software write-off 560 - 560 -
Sarbanes-Oxley implementation 1,201 - 1,678 -
Total selling, general and administrative expenses 33,127 26,334 116,862 97,467
Advertising expense 6,916 6,554 25,279 23,305
Income from operations 502 2,114 3,325 6,023
Interest expense, net 619 494 1,977 1,325
Income (loss) before income taxes (117) 1,620 1,348 4,698
Income tax provision (benefit) (15) 515 567 1,655
Income (loss) before minority interest (102) 1,105 781 3,043
Minority interest 60 - 232 -
Net income $ (42) $ 1,105 $ 1,013 $ 3,043
Earnings (loss) per share
Basic $ (0.00) $ 0.10 $ 0.09 $ 0.29
Diluted $ (0.00) $ 0.09 $ 0.08 $ 0.26
Shares used in computing per share
(in thousands)
Basic 11,375 10,833 11,119 10,651
Diliuted 11,375 11,978 12,144 11,636
PC MALL, INC.
IMPACT OF NON-GAAP PRO FORMA ADJUSTMENTS ON NET INCOME
(unaudited, in thousands except per share data)
Non-GAAP Non-GAAP
2004 Pro Forma Non-GAAP 2003 Pro Forma Non-GAAP
As Reported Adjustments Pro Forma As Reported Adjustments Pro Forma
Net sales $ 325,352 $ - $ 325,352 $ 289,932 $ - $ 289,932
Cost of goods sold 284,807 - 284,807 254,930 - 254,930
Gross profit 40,545 - 40,545 35,002 - 35,002
Selling, general and administrative
expenses:
Selling, general and administrative
expenses 30,916 - 30,916 26,189 - - 26,189
Non-cash stock-based compensation 450 (450)(b) - 145 (145)(b) -
eCOST.com non-recurring charges - - - - - -
Software write-off 560 (560)(c) - - - - -
Sarbanes-Oxley implementation 1,201 (1,201)(a) - - - -
Total selling, general and administrative
expenses 33,127 (2,211) 30,916 26,334 (145) 26,189
Advertising expense 6,916 - 6,916 6,554 - 6,554
Income from operations 502 2,211 2,713 2,114 145 2,259
Interest expense, net 619 - 619 494 - 494
Income (loss) before income taxes (117) 2,211 2,094 1,620 145 1,765
Income tax provision (15) 929 914 515 55 570
Income (loss) before minority interest (102) 1,282 1,180 1,105 90 1,195
Minority interest 60 (14) 46 - - -
Net income (loss) $ (42) $ 1,268 $ 1,226 $ 1,105 $ 90 $ 1,195
Earnings (loss) per share
Basic $ (0.00) $ 0.11 $ 0.11 $ 0.10 $ 0.01 $ 0.11
Diluted $ (0.00) $ 0.10 $ 0.10 $ 0.09 $ 0.01 $ 0.10
Shares used in computing per share
(in thousands)
Basic 11,375 11,375 11,375 10,833 10,833 10,833
Diluted 11,375 12,307 12,307 11,978 11,978 11,978
(a) Consulting fees associated with internal controls assessment pursuant to Sarbanes-Oxley rule 404.
(b) Non-cash stock-based compensation expense for eCOST.com options recognized as a result of the initial public offering, as well as non-cash stock-based compensation expenses associated with the issuance of a warrant to a public relations firm.
(c) Write-off of capitalized CRM application software due to replacement software.
PC MALL, INC.
IMPACT OF NON-GAAP PRO FORMA ADJUSTMENTS ON NET INCOME
(unaudited, in thousands except per share data)
Non-GAAP Non-GAAP
2004 Pro Forma Non-GAAP 2003 Pro Forma Non-GAAP
As Reported Adjustments Pro Forma As Reported Adjustments Pro Forma
Net sales $ 1,157,253 $ - $ 1,157,253 $ 975,586 $ - $ 975,586
Cost of goods sold 1,011,787 - 1,011,787 848,791 - 848,791
Gross profit 145,466 - 145,466 126,795 - - 126,795
Selling, general and administrative expenses:
Selling, general and administrative expenses 112,050 - 112,050 97,173 - 97,173
Non-cash stock-based compensation 1,921 (1,921)(c) - 294 (294)(c) -
eCOST.com non-recurring charges 653 (653)(a) - - - -
Software write-off 560 (560)(d) - - - - -
Sarbanes-Oxley implementation 1,678 (1,678)(b) - - - - -
Total selling, general and administrative expenses 116,862 (4,812) 112,050 97,467 (294) 97,173
Advertising expense 25,279 - 25,279 23,305 - 23,305
Income from operations 3,325 4,812 8,137 6,023 294 6,317
Interest expense, net 1,977 - 1,977 1,325 - 1,325
Income before income taxes 1,348 4,812 6,160 4,698 294 4,992
Income tax provision 567 2,021 2,588 1,655 112 1,767
Income before minority interest 781 2,791 3,572 3,043 182 3,225
Minority interest 232 (173) 59 - - -
Net income $ 1,013 $ 2,618 $ 3,631 $ 3,043 $ 182 $ 3,225
Earnings per share
Basic $ 0.09 $ 0.24 $ 0.33 $ 0.29 $ 0.02 $ 0.30
Diluted $ 0.08 $ 0.22 $ 0.30 $ 0.26 $ 0.02 $ 0.28
Shares used in computing per share
(in thousands)
Basic 11,119 11,119 11,119 10,651 10,651 10,651
Diluted 12,144 12,144 12,144 11,636 11,636 11,636
(a) Other non-recurring charges associated with eCOST.com.
(b) Consulting fees associated with internal controls assessment pursuant to Sarbanes-Oxley rule 404.
(c) Non-cash stock-based compensation expense for eCOST.com options recognized as a result of the initial public offering, as well as non-cash stock-based compensation expenses associated with the issuance of a warrant to a public relations firm.
(d) Write-off of capitalized CRM application software due to replacement software.
PC MALL, INC.
CORE BUSINESS STATEMENT OF OPERATIONS
(unaudited, in thousands except per share data)
December 31, December 31,
2004 2003 2004 2003
Net sales $ 266,411 $ 253,366 $ 977,626 $ 865,530
Cost of goods sold 231,904 221,854 851,426 750,817
Gross profit 34,507 31,512 126,200 114,713
Selling, general and administrative expenses:
Selling, general and administrative expenses 26,058 23,435 97,607 88,009
Non-cash stock-based compensation expense 325 145 509 294
eCOST.com non-recurring charges - - - -
Software write-off 560 - 560 -
Sarbanes-Oxley implementation 1,201 - 1,577 -
Total selling, general and administrative expenses 28,144 23,580 100,253 88,303
Advertising expense 4,788 5,498 18,849 20,047
Income from operations 1,575 2,434 7,098 6,363
Interest expense, net 680 494 2,043 1,325
Income before income taxes 895 1,940 5,055 5,038
Income tax provision 375 683 2,123 1,774
Income before minority interest 520 1,257 2,932 3,264
Minority interest - - - - -
Net income $ 520 $ 1,257 $ 2,932 $ 3,264
Earnings per share
Basic $ 0.05 $ 0.12 $ 0.26 $ 0.31
Diluted $ 0.04 $ 0.10 $ 0.24 $ 0.28
Shares used in computing per share
(in thousands)
Basic 11,375 10,833 11,119 10,651
Diluted 12,307 11,978 12,144 11,636
PC MALL, INC.
IMPACT OF NON-GAAP PRO FORMA ADJUSTMENTS ON CORE BUSINESS NET INCOME
(unaudited, in thousands except per share data)
Non-GAAP Non-GAAP
2004 Pro Forma Non-GAAP 2003 Pro Forma Non-GAAP
As Reported Adjustments Pro Forma As Reported Adjustments Pro Forma
Net sales $ 266,411 $ - $ 266,411 $ 253,366 $ - $ 253,366
Cost of goods sold 231,904 - 231,904 221,854 - 221,854
Gross profit 34,507 - 34,507 31,512 - 31,512
Selling, general and administrative expenses:
Selling, general and administrative expenses 26,058 - 26,058 23,435 - 23,435
Non-cash stock-based compensation 325 (325)(a) - - 145 (145)(a) - -
eCOST.com non-recurring charges - - - - - - -
Software write-off 560 (560)(c) - - - - -
Sarbanes-Oxley implementation 1,201 (1,201)(b) - - - -
Total selling, general and administrative expenses 28,144 (2,086) 26,058 23,580 (145) 23,435
Advertising expense 4,788 4,788 5,498 - 5,498
Income from operations 1,575 2,086 3,661 2,434 145 2,579
Interest expense, net 680 680 494 - 494
Income before income taxes 895 2,086 2,981 1,940 145 2,085
Income tax provision 375 876 1,251 683 51 734
Income before minority interest 520 1,210 1,730 1,257 94 1,351
Minority interest - - - - - - - -
Net income $ 520 $ 1,210 $ 1,730 $ 1,257 $ 94 $ 1,351
Earnings per share
Basic $ 0.05 $ 0.11 $ 0.15 $ 0.12 $ 0.01 $ 0.12
Diluted $ 0.04 $ 0.10 $ 0.14 $ 0.10 $ 0.01 $ 0.11
Shares used in computing per share
(in thousands)
Basic �� 11,375 11,375 11,375 10,833 10,833 10,833
Diluted 12,307 12,307 12,307 11,978 11,978 11,978
(a) Non-cash stock-based compensation expense for warrants issued to a public relations firm.
(b) Consulting fees associated with internal controls assessment pursuant to Sarbanes-Oxley rule 404.
(c) Write-off of capitalized CRM application software due to replacement software.
PC MALL, INC.
IMPACT OF NON-GAAP PRO FORMA ADJUSTMENTS ON CORE BUSINESS NET INCOME
(unaudited, in thousands except per share data)
Non-GAAP Non-GAAP
2004 Pro Forma Non-GAAP 2003 Pro Forma Non-GAAP
As Reported Adjustments Pro Forma As Reported Adjustments Pro Forma
Net sales $ 977,626 $ - $ 977,626 $ 865,530 $ - $ 865,530
Cost of goods sold 851,426 - 851,426 750,817 - 750,817
Gross profit 126,200 - 126,200 114,713 - - 114,713
Selling, general and administrative expenses:
Selling, general and administrative expenses 97,607 - 97,607 88,009 - 88,009
Non-cash stock-based compensation 509 (509)(a) - - 294 (294)(a) - -
eCOST.com non-recurring charges - - - - - - -
Software write-off 560 (560)(c) - - - - -
Sarbanes-Oxley implementation 1,577 (1,577)(b) - - - - -
Total selling, general and administrative expenses 100,253 (2,646) 97,607 88,303 (294) 88,009
Advertising expense 18,849 - 18,849 20,047 - 20,047
Income from operations 7,098 2,646 9,744 6,363 294 6,657
Interest expense, net 2,043 - 2,043 1,325 - 1,325
Income before income taxes 5,055 2,646 7,701 5,038 294 5,332
Income tax provision 2,123 1,111 3,234 1,774 104 1,878
Income before minority interest 2,932 1,535 4,467 3,264 190 3,454
Minority interest - - - - - - - -
Net income $ 2,932 $ 1,535 $ 4,467 $ 3,264 $ 190 $ 3,454
Earnings per share
Basic $ 0.26 $ 0.14 $ 0.40 $ 0.31 $ 0.02 $ 0.32
Diluted $ 0.24 $ 0.13 $ 0.37 $ 0.28 $ 0.02 $ 0.30
Shares used in computing per share
(in thousands)
Basic 11,119 11,119 11,119 10,651 10,651 10,651
Diluted 12,144 12,144 12,144 11,636 11,636 11,636
(a) Non-cash stock-based compensation expense for warrants issued to a public relations firm.
(b) Consulting fees associated with internal controls assessment pursuant to Sarbanes-Oxley rule 404.
(c) Write-off of capitalized CRM application software due to replacement software.
PC MALL, INC.
CONSOLIDATED BALANCE SHEET
(in thousands, except share data)
December 31, 2004
(unaudited) December 31, 2003
Assets
Current assets:
Cash and cash equivalents $ 22,465 $ 7,819
Accounts receivable, net of allowance for doubtful accounts 94,432 71,401
Inventories 80,651 80,542
Prepaid expenses and other current assets 6,489 3,909
Deferred income taxes �� 4,087 3,578
Total current assets 208,124 167,249
Property and equipment, net 9,393 10,438
Goodwill, net 1,405 861
Deferred income taxes 12,162 9,269
Other assets 1,210 1,353
Total assets $ 232,294 $ 189,170
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 69,902 $ 83,856
Accrued expenses and other current liabilities 22,631 16,621
Deferred revenue 12,276 11,348
Line of credit 49,027 26,202
Notes payable - current portion 500 1,000
Total current liabilities 154,336 139,027
Notes payable 2,750 250
Total liabilities 157,086 139,277
Minority interest 4,297 - -
Stockholders' equity:
Preferred stock, $.001 par value; 5,000,000 shares
authorized; none issued and outstanding - -
Common stock, $.001 par value; 30,000,000 shares
authorized 11,851,115 and 11,165,399
shares issued and 11,556,915 and 10,871,199
outstanding, respectively 12 11
Additional paid-in capital 99,172 78,032
Deferred stock-based compensation (1,333) -
Treasury stock, at cost: 294,200 shares (1,015) (1,015)
Translation adjustment 198 1
Retained earnings (accumulated deficit) (26,123) (27,136)
Total stockholders' equity 70,911 49,893
$ 232,294 $ 189,170