PC Mall Turns Up the Heat for July
The Torrance, CA, direct marketer of computer hardware, software, peripherals and electronic products to business, government and educational institutions as well as individuals saw a 53.11 percent rise in its stock price between June 30 and July 28, from $4.18 to $6.40. Its strength continued the next day when it reached a 52-week high of $7.25 before closing at $6.96.
Helping fuel the run-up were record second-quarter net sales, up 7 percent from $205 million a year ago to $219 million. More good news could be found in the numbers covering the first six months of the year: $454 million versus $396 million in net sales during the six months ended June 30, 2002.
Gross profit reached $31 million for the three months ended June 30, compared with $22 million in the year-ago period. Totals for the first six months of 2003 and 2002 were $60 million and $42 million, respectively.
Other second-quarter highlights:
· Outbound business sales climbed 18 percent.
· Continued investment in its outbound sales program, with a 13 percent rise in sales headcount.
· The opening of a Canadian call center.
"We had strong earnings-per-share growth in our seasonally weakest quarter of the year," Frank Khulusi, chairman/president/CEO of PC Mall, said in the company's July 23 earnings release. He also mentioned "opening a new Canadian sales office that takes advantage of favorable employment and compensation differences."
The company offers products through catalogs under the PC Mall, MacMall, ClubMac, PC Mall Gov and eCOST.com brands as well as Web sites pcmall.com, macmall.com, clubmac.com, pcmallgov.com and ecost.com, plus other promotional materials.
During 2002 and 2001, products manufactured by Apple accounted for 23.1 percent and 24.1 percent, respectively, of the company's net sales.
The Outbound and eCOST segments were up 18 percent and 13 percent over second-quarter 2002, respectively.
The growth was offset by a decline in catalog sales, excluding ClubMac, of 18 percent versus second-quarter 2002. PC Mall Gov sales in the second quarter of 2003 were up 9 percent from the first quarter of the year due to seasonality, but were down 8 percent from the second quarter last year. Also, gross advertising expense remained nearly the same as in the second quarter last year despite an 8 percent rise in catalog circulation.
Wall Street is clearly impressed as PC Mall was one of five direct marketers of computers and computer products to be rated "strong buy" by Sky Capital LLC, which initiated research coverage of the company in July along with CDW Corp., Insight Enterprises, Systemax Inc. and PC Connection.
In other news, the ticker symbol for Cross Media Marketing changed from XMM to CMKC.