What changed in this filing

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

2020-08-10 compared with 2020-04-30 · 37 added, 54 removed, 37 unchanged (71% of the section changed)

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For a description of our market risks, see Item 7A.

“Quantitative and Qualitative Disclosures About Market Risk”

in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019.

In the quarter ending March 31, 2020, we identified an additional risk that could materially adversely impact our business, financial condition, results of operations and cash flows, which has been included in “Part II –

Other Information”

of this Form 10-Q.

“Quantitative and Qualitative Disclosures About Market Risk” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019.

See also “Part II – Other Information” of this Form 10-Q.

No other material changes have occurred in our market risks since December 31, 2019.

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AND SUBSIDIARIES

PART I―FINANCIAL INFORMATION

Item 4 - CONTROLS AND PROCEDURE S

Disclosure Controls and Procedures

Our management, with the participation of the Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2020.

The term “disclosure controls and procedures,”

as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by the company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in the SEC's rules and forms.

Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

Our management, with the participation of the Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2020.

The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by the company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in the SEC's rules and forms.

Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

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Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the fiscal quarter ended March 31, 2020 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

In response to the COVID-19 pandemic, we have undertaken measures to protect our employees, partners, and clients, including encouraging employees to work remotely.

In 2017, we began the process of implementing a new company-wide ERP system as part of a multi-year plan to integrate and upgrade our systems and processes.

The system became operational in May 2020.

As the implementation of the new ERP system has now been largely completed, we have experienced certain changes to our processes and procedures which, in turn, have resulted in changes to the design and operation of certain internal controls over financial reporting.

We believe the necessary steps have been taken to monitor and maintain appropriate internal control over financial reporting during this period of change and we will continue to evaluate the operating effectiveness of related key controls during subsequent periods.

While we ultimately expect the new ERP system to strengthen our internal financial controls by automating certain manual processes and standardizing business processes and reporting across our organization, management will continue to evaluate and monitor our internal controls as each of the affected areas evolves.

Furthermore, in response to the COVID-19 pandemic, we have undertaken measures to protect our employees, partners, and clients, including encouraging employees to work remotely.

These changes have compelled us to modify some of our control procedures, however, those changes have so far not been material.

Except for the changes as described in detail above, there were no additional changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the fiscal quarter ended June 30, 2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATIO N

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In addition to other information set forth in this report, you should carefully consider the factors discussed in Item 1A.

“Risk Factors”

in our Annual Report on Form 10-K for the year ended December 31, 2019, which could materially affect our business, financial position, and results of operations.

“Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2019, as supplemented by the below risk factor, which could materially affect our business, financial position, and results of operations.

The COVID-19 pandemic has heightened, and in some cases manifested, certain of the risks we normally face in operating our business, including those disclosed in the Annual Report, and the risk factor disclosure in the Annual Report is qualified by the information relating to COVID-19 that is described in this Quarterly Report on Form 10-Q.

We identified an additional risk in the current period that was not included in our Annual Report.

The continued spread of COVID-19 and the imposition of related public health measures and restrictions may materially adversely impact our business, financial condition, results of operations and cash flows.

The spread of COVID-19 and the imposition of related public health measures and restrictions have, and may in the future, further materially adversely impact our business, financial condition, results of operations and cash flows.

In December 2019, the 2019 novel coronavirus surfaced in Wuhan, China.

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The impacts of the outbreak are unknown and rapidly evolving.

The COVID-19 pandemic has caused certain disruptions to our business and operations and could cause material disruptions to our business and operations in the future as a result of, among other things, quarantines, worker illness, worker absenteeism as a result of illness or other factors, social distancing measures and other travel, health-related, business or other restrictions.

The COVID-19 pandemic has caused material disruptions to our business and operations and could cause material disruptions to our business and operations in the future as a result of, among other things, quarantines, worker illness, worker absenteeism as a result of illness or other factors, social distancing measures and other travel, health-related, business or other restrictions.

We rely on third-party suppliers and manufacturers.

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Certain of our customers have been, and may in the future be, required to close down or operate at a lower capacity.

It is possible we could experience a decrease in orders as a result of the pandemic.

We may also experience delays in collecting amounts owed to us.

This widespread health crisis has adversely affected the global economy, and may result in an economic downturn that could impact demand for our products.

To date the outbreak has not had a material adverse impact on our operations.

However, the future impact of the outbreak is highly uncertain and cannot be predicted, and there is no assurance that the outbreak will not have a material adverse impact on the future results of the Company.

The extent of the impact will depend on future developments, including actions taken to contain the coronavirus.

Item 2 –

Unregistered Sales of Equity Securities and Use of Proceeds

The following table sets forth certain information with respect to repurchases of our common stock during the quarter ended March 31, 2020.

ISSUER PURCHASES OF EQUITY SECURITIES

Total Number of Shares Purchased

Average Price Paid per Share

Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)(2)

Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1)

(in thousands)

January 1 - January 31, 2020

February 1 - February 29, 2020

March 1 - March 31, 2020

In December 2018, our Board of Directors announced a share repurchase program of our common stock authorizing up to $25 million in share repurchases to be added to our previous publicly-announced share repurchase programs.

There is no fixed termination date for this repurchase program.

Purchases may be made in open-market transactions, block transactions on or off an exchange, or in privately negotiated transactions.

We have repurchased in aggregate approximately 2.6 million shares of our common stock for approximately $42 million pursuant to Board-approved programs.

Item 6 - Exhibit s

Certification of the Company’s President and Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification of the Company’s Senior Vice President and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification of the Company’s President and Chief Executive Officer pursuant to 18 U.S.C.

We have experienced, and may continue to experience, a decrease in orders as a result of the pandemic.

We have also experienced, and may continue to experience, delays in collecting amounts owed to us.

This widespread health crisis has adversely affected the global economy, and may result in a sustained economic downturn that could impact demand for our products going forward.

The future impact of the outbreak is highly uncertain and cannot be predicted, and there is no assurance that the outbreak will not have a material adverse impact on the future results of the Company.

The extent of the impact will depend on future developments, including actions taken to contain COVID-19.

Item 6 - Exhibits

Certification of the Company’s President and Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification of the Company’s Senior Vice President and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification of the Company’s President and Chief Executive Officer pursuant to 18 U.S.C.

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Certification of the Company’s Senior Vice President and Chief Financial Officer pursuant to 18 U.S.C.

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 .

XBRL Instance Document.

XBRL Taxonomy Extension Schema Document.

XBRL Taxonomy Calculation Linkbase Document.

XBRL Taxonomy Extension Definition Linkbase Document

XBRL Taxonomy Label Linkbase Document.

XBRL Taxonomy Presentation Linkbase Document.

2020 Stock Inventive Plan (incorporated by reference to the Company’s Current Report on FormDef14A filed with the SEC on April 29, 2020).

Inline XBRL Instance Document* - The Instance document does not appear in the interactive data file because its XBRL tages are embedded within the inline XBRL document.

Inline XBRL Taxonomy Extension Schema Document.

Inline XBRL Taxonomy Calculation Linkbase Document.

Inline XBRL Taxonomy Extension Definition Linkbase Document

Inline XBRL Taxonomy Label Linkbase Document.

Inline XBRL Taxonomy Presentation Linkbase Document.

Cover Page Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101).

* Filed herewith.

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Attached as Exhibit 101 to this report are the following formatted in XBRL (Extensible Business Reporting Language):

(i) Condensed Consolidated Balance Sheets at March 31, 2020 and December 31, 2019, (ii) Condensed Consolidated Statements of Income for the three months ended March 31, 2020 and March 31, 2019 , (iii) Condensed Consolidated Statements of Stockholders’

Equity at March 31, 2020 and December 31, 2019, (iv) Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2020 and March 31, 2019, and (v) Notes to Unaudited Condensed Consolidated Financial Statements.

(i) Condensed Consolidated Balance Sheets at June 30, 2020 and December 31, 2019, (ii) Condensed Consolidated Statements of Income for the three and six months ended June 30, 2020 and June 30, 2019, (iii) Condensed Consolidated Statements of Stockholders’ Equity at June 30, 2020 and December 31, 2019, (iv) Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2020 and June 30, 2019, and (v) Notes to Unaudited Condensed Consolidated Financial Statements.

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 thereunto duly authorized.

PC CONNECTION, INC.

April 30, 2020

August 10, 2020

/s/ TIMOTHY J.

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(Duly Authorized Officer)

April 30, 2020

August 10, 2020

/s/ THOMAS C.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 3. Quantitative and Qualitative Disclosures About Market Risk