What changed in this filing

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Item 1. Business

2022-03-14 compared with 2021-03-16 · 152 added, 59 removed, 214 unchanged (50% of the section changed)

We are a national provider of a wide range of information technology, or IT, solutions.

We help our customers design, enable, manage, and service their IT environments.

We provide IT products, including computer systems, data center solutions, software and peripheral equipment, networking communications, and other products and accessories that we purchase from manufacturers, distributors, and other suppliers.

We also offer services involving design, configuration, and implementation of IT solutions.

We are a Fortune 1000 Global Solutions Provider that simplifies the information technology, or IT, purchasing experience, guiding the connection between people and technology.

Our dedicated Account Managers partner with customers to design, deploy, and support cutting-edge IT environments using the latest hardware, software, and services.

We provide a wide range of IT solutions, from the desktop to the cloud—including computer systems, data center solutions, software and peripheral equipment, networking communications, and other products and accessories that we purchase from manufacturers, distributors, and other suppliers.

Our Technology Solutions Group, or TSG, and state-of-the-art Technology Integration and Distribution Center, or TIDC, with ISO 9001:2015 certified technical configuration lab offer end-to-end services related to the design, configuration, and implementation of IT solutions.

Our team also provides a comprehensive portfolio of managed services and professional services.

These services are performed by our personnel and by third-party providers.

We have three operating segments, which serve primarily:

(a) small- to medium-sized businesses, or SMBs, in our Business Solutions segment, through our PC Connection Sales subsidiary, (b) large enterprise customers, in our Enterprise Solutions segment, through our MoreDirect subsidiary, and (c) federal, state, and local government and educational institutions, in our Public Sector Solutions segment, through our GovConnection subsidiary.

Our GlobalServe offering ensures worldwide coverage for our multinational customers, delivering global procurement solutions through our network of incountry suppliers in over 150 countries.

The “Connection®” brand includes Connection Business Solutions, Connection Enterprise Solutions, and Connection Public Sector Solutions, which provide IT solutions and services to small- to medium-sized businesses, or SMBs, enterprise, and public sector markets.

In September 2016, we united all of our subsidiaries into one cohesive brand, reflecting the promise of our trademark blue arc and our mission to connect people with technology that enhances growth, elevates productivity, and empowers innovation.

MoreDirect, our enterprise team, became Connection Enterprise Solutions;

PC Connection Sales Corp, our SMB-focused team, became Connection Business Solutions;

and GovConnection, our public sector team, became Connection Public Sector Solutions.

Today, these entities represent our three operating segments and their respective markets:

• Connection Enterprise Solutions (formerly MoreDirect)—serving large enterprise customers (Large Accounts)

• Connection Business Solutions (formerly PC Connection Sales Corp)—serving SMBs

• Connection Public Sector Solutions (formerly GovConnection)—serving federal, state, and local government and educational institutions.

Financial results for each of our segments are included in the financial statements attached hereto.

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We offer a broad selection of over 460,000 products at competitive prices, including products from vendors like Apple, Cisco Systems, Dell, Dell-EMC, Hewlett-Packard Inc., Hewlett-Packard Enterprise, Lenovo, Microsoft, and VMware, and we partner with more than 2,500 suppliers.

We typically leverage our state-of-the art logistic capabilities to ship product to customers the same day the order is received.

We are able to leverage our state-of-the art logistic capabilities to rapidly ship product to customers, typically the same day the order is received.

Since our founding in 1982, we have consistently served our customers’ needs by providing innovative, reliable, and timely service and technical support, and by offering an extensive assortment of industry-leading products through knowledgeable, well-trained sales and support teams.

Our strategy’s effectiveness is reflected in the recognition we have received, including being named to the Fortune 1000 and the CRN Solution Provider 500 for twenty straight years.

Over the past few years, we have received numerous awards, including the Microsoft Excellence in Operations—Double Gold Level Award for delivering market-leading operational excellence, as well as being recently named to the CRN Tech Elite 250 for the fifth year.

We believe that our ability to understand our customers’ needs and provide comprehensive and effective IT solutions has resulted in strong brand name recognition and a broad and loyal customer base.

We also believe that through our strong vendor relationships we can provide an efficient supply chain and be an effective IT solution provider for our multiple customer segments.

Our strategy’s effectiveness is reflected in the recognition we have received, including being named to the Fortune 1000 and the CRN Solution Provider 500 for twenty-one straight years.

In recent years, we have received numerous awards, including the Microsoft Excellence in Operations, Double Gold Level Award for delivering market-leading operational excellence, Aruba Federal Public Sector Partner of the Year, HPE Federal GreenLake Partner of the Year, and HP U.S.

Personal Systems National Solution Provider of the Year Award, as well as being named to the CRN Tech Elite 250 for the sixth year.

Connection has also been twice named “America’s Best-in-State Employers” by Forbes.

Connection’s technical experts hold more than 2,500 professional certifications, and the company has been awarded industry-leading partner authorizations, including Microsoft Azure Expert Managed Service Provider status and Google Cloud premier partner status.

We believe this pursuit of excellence and our ability to understand our customers’ needs and provide comprehensive and effective IT solutions has resulted in strong brand name recognition and a broad and loyal customer base.

We also believe that through our strong vendor relationships we can provide an efficient supply chain and be an effective IT solution provider for our diverse customer segments.

We strive to identify the unique needs of our corporate, government, healthcare, educational, and small business customers, and have designed our business processes to enable our customers to effectively manage their IT systems.

We provide value by offering our customers efficient design, integration, deployment, and support of their IT environments.

As of December 31, 2020, we employed 814 sales representatives, whose average tenure exceeded eight years.

As of December 31, 2021, we employed 727 sales representatives, whose average tenure exceeded nine years.

Sales representatives are responsible for managing enterprise, commercial, and public sector accounts, as specialization and a deep understanding of unique customer environments are more important than ever.

These sales representatives focus on current and prospective customers and are supported by an increasing number of engineering, technical, and administrative staff.

We believe that increasing our salesforce productivity is important to our future success, and we have increased our headcount and investments in this area accordingly.

In September 2016, we launched “Connection®”, uniting all of our subsidiaries into one cohesive brand, reflecting the promise of our trademark blue arc and our mission to connect people with technology that enhances growth, elevates productivity, and empowers innovation.

MoreDirect, our enterprise team, became Connection® Enterprise Solutions;

PC Connection Sales Corp, our SMB-focused team, became Connection® Business Solutions;

and GovConnection, our public sector team, became Connection® Public Sector Solutions.

These sales representatives focus on current and prospective customers and are supported by an increasing number of engineering, technical, and administrative staff through our Technology Solutions Group and Technical Sales Organization.

Our Industry Solutions Group, or ISG, provides our sales team and customers with insights and guidance customized to the unique needs of our vertical markets, including healthcare, retail, finance, and manufacturing.

We believe that increasing our salesforce productivity is important to our future success, and we have increased our headcount and investments in our sales and sales support teams accordingly.

We market our products and services through our websites:

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BUSINESS STRATEGIES

We believe we become our customers’ IT provider of choice by providing innovative IT solutions which meet their needs of increased productivity, mobility, virtualization, and security in a continually evolving IT environment.

We provide enhanced value by assisting them in cost-effectively maximizing business opportunities provided by new technologies and advanced service solutions.

We believe we become our customers’ IT provider of choice by calming the confusion of IT and solving complex business challenges with innovative IT solutions which meet their needs of increased productivity, mobility, virtualization, and security in a continually evolving IT environment.

We provide enhanced value by assisting our customers in cost-effectively maximizing business opportunities provided by new technologies and advanced service solutions.

The key elements of our business strategies include:

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We believe that we have earned a reputation for providing superior customer service by consistently focusing on our customers’ needs.

Empathy for the challenges technology presenting to people is at the heart of our culture and serves as a foundation for long-lasting and rewarding partnerships with organizations of every size and industry.

We have dedicated our resources to developing strong, long-term relationships with our customers by accurately assessing their IT needs, and providing scalable, high-quality solutions and services through our knowledgeable, well-trained personnel.

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We offer a broad range of IT products and solutions, including personal computers and related peripheral products, servers, storage, managed services, cloud solutions, and networking infrastructure, at costs that allow our customers to be more productive while maximizing their IT budgets.

Our advanced solution offerings include network, server, storage, and mission-

critical onsite installation and support using proprietary cloud-based service management software.

Our advanced solution offerings include network, server, storage, and mission-critical onsite installation and support using proprietary cloud-based service management software.

We offer products and enhanced service capabilities with aggressive price and performance standards, all with the convenience of one-stop shopping for technology solutions.

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Our customers seek solutions to increasingly complex IT infrastructure demands.

To better address their business needs, we have focused our solution service capabilities on seven practice areas—Converged Data Center, Networking, Mobility, Security, Cloud Solutions, Lifecycle, and Software.

These IT practice groups are responsible for understanding the infrastructure needs of our customers, and for designing cost-effective technology solutions to address them.

To better address their business needs, we have focused our solution service capabilities on several key areas:

Data and Automation, Workplace Transformation, Cloud, Cybersecurity, and Managed Services.

Our Technology Solutions Group and Technical Sales Organization are responsible for understanding the infrastructure needs of our customers, and for designing cost-effective technology solutions to address them.

We have also partnered with third-party providers to make available a range of IT support services, including asset assessment, implementation, maintenance, and disposal services.

We believe we can leverage these seven practice groups to enable us to capture a greater share of the IT expenditures of our customers.

We believe we can leverage these focus areas to enable us to capture a greater share of the IT expenditures of our customers.

● Maintaining a strong brand name and customer awareness.

Since our founding in 1982, we have built a strong brand name and customer awareness.

We have been named to the Fortune 1000 and the CRN Solution Provider 500 for each of the last twenty years.

We have been named to the Fortune 1000 and the CRN Solution Provider 500 for each of the last twenty-one years.

We actively work with our existing customers to become their IT provider of choice for products and enhanced solution services, while seeking to ensure our reputation of high-quality customer service, tailored marketing programs, and competitive pricing lead the way to expanding our share of the overall IT market.

Through the use of creative, consistent marketing activities, our goal is to strengthen the Connection brand and reinforce our reputation as a trusted IT advisor with a history of innovation and customer-centric service.

● Maintaining long-standing vendor relationships .

Our close partnerships with leading technology manufacturers and vendors provide our team with access to the latest product offerings, training assets, and support resources.

We have a history of strong relationships with vendors, and were among the first national solutions providers qualified by manufacturers to market computer systems to end users.

By working closely with our vendors to provide an efficient channel for the advertising and distribution of their products and solutions, we expect to expand market share and generate opportunities for optimizing partner incentive programs.

By working closely with our vendors to provide an efficient channel for the advertising and distribution of their products and

solutions, we expect to expand market share and generate opportunities for optimizing partner incentive programs.

We promote communication and collaboration with our partner community at every level of our organization, from Sales and Product Management to leadership.

We host a Partner Advisory Council that meets annually to share feedback and explore strategies to promote greater engagement with partners and better serve our mutual customers.

GROWTH STRATEGIES

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Through increased targeted marketing, we seek to expand the number of our active customers and generate additional sales to existing customers by providing more value-added services and solutions.

We have also developed a digital marketing capability, which includes but is not limited to digital remarketing, digital buying guides, Google shopping integration, along with social media advertising and search

engine optimization.

All of these aforementioned methods also help us fine tune and optimize our Internet marketing campaigns that focus on select markets, such as healthcare, retail, financial, and manufacturing.

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We plan to expand our cloud-based solution sales and assist our customers in navigating the complex and growing field of cloud-solution offerings.

This focus on cloud includes investing in the training and certification resources required to help our customers adopt and optimize cloud technologies.

In 2021, we secured Microsoft Azure Expert Managed Service Provider status as well as Google Cloud premier partner status—two exclusive designations that require an intensive auditing process and a proven record of delivering exceptional customer service and in-depth technical expertise around core cloud competencies.

● Pursuing strategic acquisitions and alliances.

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We invest in training programs for our service and support personnel, with an emphasis on putting customer needs and service first.

Supplementing our salesforce, our Technology Solutions Group and Technical Sales Organization offer in-depth technical support across a wide range of advanced technology solutions.

These teams of engineers and solution architects design end-to-end IT solutions tailored to our customers’ unique environments and serve as technology consultants.

Our TIDC ensures a superior customer experience, with seamless configuration, deployment, and support services.

Product support technicians assist customers with questions concerning compatibility, installation, and more difficult questions relating to product use.

The product support technicians authorize customers to return defective or incompatible products to either the manufacturer or to us for warranty service.

In-house technicians perform both warranty and non-warranty repair on most major systems and hardware products.

Using our customized information system, we transmit our customer orders either to our distribution center or to our drop-ship suppliers, depending on product availability, for processing immediately after a customer receives credit approval.

In-house TIDC technicians perform both warranty and non-warranty repair on most major systems and hardware products.

Using our customized information system, we transmit our customer orders either to our TIDC or to our drop-ship suppliers, depending on product availability, for processing immediately after a customer receives credit approval.

At our distribution center, we also perform custom configuration services, which typically includes custom imaging, the installation and integration of additional components, and other technology enhancements.

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We believe that customers respond favorably to one-on-one relationships with personalized, well-trained account managers.

Once established, these one-on-one relationships are maintained and enhanced through frequent telecommunications and targeted electronic communications, as well as other marketing materials designed to meet each customer’s specific IT needs.

Once established, these one-on-one relationships are

maintained and enhanced through frequent telecommunications and targeted electronic communications, as well as other marketing materials designed to meet each customer’s specific IT needs.

We pay most of our account managers a base annual salary plus incentive compensation.

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We believe our websites are important sales sources and communication tools for improving customer service.

Our MoreDirect subsidiary’s business process and operations are primarily Web-based.

Our Enterprise Solutions Segment’s business process and operations are primarily Web-based.

Most of its corporate customers utilize a customized Web page to quickly search, source, and track IT products.

MoreDirect’s website ( www.connection.com/enterprise ) aggregates the current available inventories of its largest IT suppliers into a single online source for its corporate customers.

Its custom designed Internet-based system, TRAXX®, provides corporate buyers with comparative pricing from several suppliers as well as special pricing arranged through the manufacturer.

Our Enterprise Solution business website ( www.connection.com/enterprise ) aggregates the current available inventories of its largest IT suppliers into a single online source for its corporate customers.

Its custom designed Internet-based system, MarkITplace®, provides corporate buyers with comparative pricing from several suppliers as well as special pricing arranged through the manufacturer.

The Internet supports three key business initiatives for us:

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Public Sector Solutions

Our brand, and each of Connection’s business segments, is supported by targeted marketing campaigns across a variety of media:

Our ISG works across all business segments to service the unique needs of healthcare, retail, finance, and manufacturing customers.

Within each of these vertical markets, our ISG experts offer technology solutions and guidance backed by real-world experience.

Our ISG combines extensive knowledge of the latest technologies, brands, and trends with industry experience that reassures our customers that we understand their businesses and their technology challenges.

Our brand, and each of our business segments, is supported by targeted marketing campaigns across a variety of media:

We utilize a series of digital programs, in conjunction with advanced data analytics, to identify prospective customers and generate new leads within our existing customer base.

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Specialty Marketing.

In addition to our digital marketing efforts, Connection maintains a strong presence at industry tradeshows and conventions across the country, including a number of healthcare and education IT conferences.

Connection also hosts a series of Technology Summits each year, with a focus on building stronger relationships with our customers and reinforcing our reputation as a trusted source of expertise.

In 2020, many of these events were cancelled due to COVID-19.

In addition to our digital marketing efforts, we maintain a strong presence at industry tradeshows and conventions across the country, including a number of healthcare and education IT conferences.

We also host a series of Technology Summits each year, with a focus on building stronger relationships with our customers and reinforcing our reputation as a trusted source of expertise.

Wherever possible we developed and hosted digital equivalents events throughout the year.

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However, no single customer accounted for more than 4% of our consolidated revenue in 2021.

While no single agency of the federal government comprised more than 3% of total sales, aggregate sales to the federal government were 4.6%, 6.9%, and 5.4% in 2020, 2019, and 2018, respectively.

While no single agency of the federal government comprised more than 4% of consolidated revenue in 2021, aggregate revenue to the federal government was 3.9%, 4.6%, and 6.9% in 2021, 2020, and 2019, respectively.

The loss of any single customer would not have a material adverse effect on any of our business segments.

In addition, we do not have individual orders in our backlog that are material to our business, and as a result, we do not believe that backlog as of any particular dates is an indication of future results.

The majority of our backlog historically has been and continues to be open cancelable purchase orders.

We do not have individual orders in our backlog that are material to our business, and as a result, we do not believe that backlog as of any particular dates is an indication of future results.

PRODUCTS AND MERCHANDISING

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sell based upon their technology and effectiveness, market demand, product features, quality, price, margins, and warranties.

The following table sets forth our percentage of net sales (in dollars) for major product categories:

The following table sets forth our percentage of net sales for major product categories:

PERCENTAGE OF

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PURCHASING AND VENDOR RELATIONS

Product purchases from Ingram Micro, Inc., our largest supplier, Synnex and HP Inc.

Product purchases from Ingram Micro, Inc., TD Synnex Corporation and Dell Inc.

accounted for approximately 23%, 23% and 12% respectively, of our total product purchases in 2021.

Product purchases from Ingram Micro, Inc., our largest supplier, Synnex and HP Inc.

Product purchases from Ingram Micro, Inc., TD Synnex Corporation and HP Inc.

accounted for approximately 21%, 15% and 12% respectively, of our total product purchases in 2020.

Product purchases from Ingram Micro, Inc., our largest supplier, Synnex and HP Inc.

Product purchases from Ingram Micro, Inc., TD Synnex Corporation and HP Inc.

accounted for approximately 21%, 14% and 8% respectively, of our total product purchases in 2019.

No other singular vendor supplied more than 10% of our total product purchases in 2021, 2020 and 2019.

In addition to these vendors, product purchases, whether purchased directly or from a wholesale distributor, from Dell and Tech Data comprised a total of 66% of our product purchases in 2020.

We believe that, while we may experience some short-term disruption if products from Ingram, Synnex, HP Inc., or any of these vendors become unavailable to us, alternative sources for these products are available.

Products manufactured by HP collectively represented approximately 18% of our net sales in 2020, 19% in 2019, and 18% in 2018.

We believe that, while we may experience some short-term disruption if products from Ingram Micro, Inc., TD Synnex Corporation, HP Inc., Dell Inc., or any of these vendors become unavailable to us, alternative sources for these products are available.

Products manufactured by HP Inc.

collectively represented approximately 15% of our net sales in 2021, 18% in 2020, and 19% in 2019.

We believe that in the event we experience either a short-term or permanent disruption of supply of HP products, such disruption would likely have a material adverse effect on our results of operations and cash flows.

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We fulfill orders from customers both from products we hold in inventory and through drop shipping arrangements with manufacturers and distributors.

At our 283,000 square foot technology integration and distribution complex in Wilmington, Ohio, we receive and ship inventory, configure and integrate technology solutions, provide depot maintenance and services, and process returned products.

At our 283,000 square foot technology TIDC in Wilmington, Ohio, we receive and ship inventory, configure and integrate technology solutions, provide depot maintenance and services, and process

returned products.

The TIDC features a state-of-the-art ISO 9001:2015-certified Configuration Lab that completed more than 500,000 custom configurations in 2021—including personal computing devices, servers, mobile devices, and networking hardware.

Our technicians maintain extensive certifications and authorizations from all major manufacturers, with more than 90% of the team holding one or more CompTIA certifications.

Through the TIDC, we are able to offer customers turnkey solutions for all of their IT needs, including hardware configuration, imaging and provisioning, asset management, remote management, white glove enrollment services, kitting, custom packaging, and depot repair services.

We also place product orders directly with manufacturers and/or distribution companies for drop shipment directly to our customers.

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Our investments in IT systems and infrastructure are designed to enable us to operate more efficiently and to provide our customers enhanced functionality.

Our investments in IT infrastructure are designed to enable us to operate more efficiently and provide our customers enhanced functionality.

In the second quarter of 2020, we deployed a new ERP system, which was the result of a multi-year planning and implementation process.

Our successfully implemented ERP system, which was the result of a multi-year planning and implementation process, enables us to operate more effectively and efficiently.

The direct marketing and sale of IT-related products is highly competitive.

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Several of our competitors are larger than we are and have substantially greater financial resources.

These and other factors related to our competitive position are discussed more fully in the “Overview” of Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in Item 1A, “Risk Factors—Substantial competition could reduce our market share and may negatively affect our business” of this Annual Report on Form 10-K.

We believe that price, product selection and availability, solutions capabilities, and service and support are the most important competitive factors in our industry.

INTELLECTUAL PROPERTY RIGHTS

Our trademarks include, among others, Connection®, PC Connection®, GovConnection®, MacConnection®, we solve IT®, Everything Overnight®, The Connection™, HealthConnection TM , Mobile Connection®, Cloud Connection®, ServiceConnection TM , ProConnection™, Education Connection®, MoreDirect A PC Connection Company®, TRAXX®, WebSPOC®, Softmart®, GlobalServe TM , Raccoon Character TM , and their related logos and all iterations thereof.

Our trademarks include, among others, Connection®, PC Connection®, GovConnection®, MacConnection®, we solve IT®, Everything Overnight®, Mobile Connection®, Cloud Connection®, Education Connection®, MoreDirect A PC Connection Company®, WebSPOC®, Softmart®, GlobalServe ®, Raccoon Character ®, and their related logos and all iterations thereof.

We intend to use and protect these and our other marks, as we deem necessary.

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We do not maintain a traditional research and development group, but we work closely with computer product manufacturers and other technology developers to stay abreast of the latest developments in computer technology, with respect to the products we both sell and use.

REGULATORY MATTERS

Our Public Sector Solutions segment is heavily regulated and, as a result, our need for compliance awareness and business and employee support is significant.

Specifically, our Public Sector Solutions segment is governed by various laws and regulations, including but not limited to laws and regulations relating to:

the formation, administration, and performance of contracts;

the security and control of information and information systems;

international trade compliance;

human trafficking;

and the mandatory disclosure of “credible evidence” of a violation of certain criminal laws receipt of significant overpayments, or violations of the civil False Claims Act.

In addition, U.S.

government contractors are generally subject to other federal and state laws and regulations, including:

We focus on the following key areas in hiring and developing our employees:

● The Federal Acquisition Regulation, or FAR, agency supplements to the FAR, and related regulations, which regulate the formation, administration, and performance of U.S.

federal government contracts;

● The False Claims Act, which allows the government and whistleblowers filing on behalf of the government to pursue treble damages, civil penalties and sanctions for the provision of false or fraudulent claims to the U.S.

federal government;

● The Truth in Negotiations Act, which requires certification and disclosure of cost and pricing data in connection with the negotiation of certain contracts, modifications, or task orders;

● The Procurement Integrity Act, which regulates access to competitor bid and proposal information, as well as certain internal government procurement sensitive information, and regulates our ability to provide compensation to certain former government procurement officials;

● Laws and regulations restricting the ability of employees of the U.S.

government to accept gifts or gratuities from a contractor;

● Post-government employment laws and regulations, which restrict the ability of a contractor to recruit and hire current employees of the U.S.

government and deploy former employees of the U.S.

● Laws, regulations, and executive orders requiring the safeguarding of and restricting the use and dissemination of information classified for national security purposes or determined to be “controlled unclassified information,” “covered defense information,” or “for official use only”;

● Laws and regulations relating to the export of certain products, services, and technical data, including requirements regarding any applicable licensing of our employees involved in such work;

● Laws, regulations, and executive orders regulating the handling, use, and dissemination of personally identifiable information in the course of performing a U.S.

government contract;

● Laws, regulations, and executive orders governing organizational conflicts of interest that may prevent us from bidding for or restrict our ability to compete for certain U.S.

government contracts because of the work that we currently perform for the U.S.

● Laws, regulations, and executive orders that mandate compliance with requirements to protect the government from risks related to our supply chain;

● Laws, regulations, and mandatory contract provisions providing protections to employees or subcontractors seeking to report alleged fraud, waste, and abuse related to a government contract;

● The Cost Accounting Standards and the Cost Principles, which impose accounting requirements that govern our right to reimbursement under certain cost-based U.S.

government contracts and require consistency of accounting practices over time.

Our Public Sector Solutions is also subject to oversight by the U.S.

Office of Federal Contract Compliance Programs, or the OFCCP, for federal contract and affirmative action compliance, including the following areas:

● affirmative action plans;

● applicant tracking;

● compliance training;

● customized affirmative action databases and forms;

● glass ceiling and compensation audits;

● desk and on-site audits;

● conciliation agreements;

● disability accessibility for applicants and employees;

● diversity initiatives;

● equal employment opportunity compliance;

● employment eligibility verification (known as “E-Verify”);

● internal affirmative action audits;

● internet recruiting and hiring processes;

● OFCCP administrative enforcement actions;

● record-keeping requirements;

● Sarbanes-Oxley Act of 2002 compliance.

federal government routinely revises its procurement practices and adopts new contract statutes, rules and regulations.

federal government has a broad range of tools available to enforce its procurement law and policies.

These include debarring or suspending a particular contractor, certain of its operations and/ or individual employees from future government business.

Individuals, on behalf of the federal government, may also bring qui tam suits against us for any alleged fraud related to payments under a U.S.

federal government contract or program.

Moreover, The U.S.

federal government generally has the ability to terminate contracts, in whole or in part, with little or no prior notice, for convenience or for default based upon performance.

In the event of termination of a contract for convenience, a contractor is normally able to recover costs already incurred on the contract and profit on those costs up to the amount authorized under the contract, but not the remaining profit that would have been earned had the contract been completed.

Such a termination could also result in the cancellation of future work on a related contract.

A termination resulting from our default could expose us to various liabilities, including excess re-procurement costs, and could have a material effect on our ability to compete for future contracts.

HUMAN CAPITAL

Our culture is reflected through our employees, who are driven to serve our customer, our partners, our communities and all of our stakeholders.

We provide our employees with diverse experiences, strong training, and engagement opportunities.

Our culture is reflected through our employees, who are driven to serve our customers, our partners, our communities and all of our stakeholders.

We provide our employees with diverse experiences, training, and engagement opportunities to build a stronger team.

Our culture—and the employees who share that culture with our customers and communities—are essential to our success and our ability to attract and retain top talent.

Our Connection Cares initiative, launched in 2021, builds on the company’s long history of inclusivity and social responsibility with working groups focused on key areas:

Employee Recognition, Charitable Giving, Sustainability, and Diversity and Inclusion.

Employees volunteer within these groups to share their ideas, conduct company-wide campaigns, and make a positive impact within our team and our wider community.

These activities, and the formal structure to support them, help ensure we are able to offer the work environment and corporate culture that today’s workforce demands.

We focus on the following key areas in hiring and developing our employees:

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We focus on skills enhancement, leadership development, innovation excellence and professional growth throughout our employees’ careers.

Our leadership program provides leadership trainnings to our high-potential emerging leaders.

● Total Awards .

Our leadership program provides leadership trainings to our high-potential emerging leaders.

● Total Rewards .

We provide market competitive compensation aligned with company performance.

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AVAILABLE INFORMATION

We are subject to the informational requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and accordingly, we file reports, proxy and information statements, and other information with the Securities and Exchange Commission, or the SEC.

We are subject to the informational requirements of the Exchange Act, and accordingly, we file reports, proxy and information statements, and other information with the Securities and Exchange Commission, or the SEC.

The SEC maintains a website (http://www.sec.gov) that contains such reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

We maintain a corporate website with the address www.connection.com.

Our website address is www.connection.com and our investor relations website is located at https://ir.connection.com/.

We are not including the information contained in our website as part of, or incorporating by reference into, this Annual Report on Form 10-K.

We make available free of charge through our website our Annual Reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K, and amendments to these reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practical after we electronically file these materials with, or otherwise furnish them to, the SEC.

In addition, we routinely post on the “Investor Relations” section of our website news releases, announcements, and other statements about our business, some of which may contain information that may be deemed material to investors.

Therefore, we encourage investors, the media, and others interested in our company to review the information we post on the “Investor Relations” section of our corporate website.

The contents of our corporate website are not, however, a part of this Annual Report on Form 10-K.

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-K

Item 1. Business