PC Connection, Inc. (CNXN) Earnings Call Transcript & Summary

Ladies and gentlemen, thank you for standing by. And welcome to the PC Connection's 2020 Annual Meeting. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your speaker today, Mr. Tim McGrath, President and CEO. Please go ahead, sir.

Well, thank you. Good morning, everyone. And welcome to the PC Connection 2020 Annual Stockholder Meeting. I am Timothy McGrath, President and CEO of Connection, and I'll be presiding over this meeting. At this time, I'll call the meeting to order. Due to the public health impact of the COVID-19 pandemic and to support the health and well-being of our stockholders, employees and communities, this year, we have supplemented our in-person meeting with a courtesy dial-in or webcast for stockholders who have submitted their proxy in advance of the meeting and wish to listen to the meeting remotely rather than attending in person. Only stockholders who are here in person may vote in person or otherwise participate. However, in addition, certain members of our Board, management and other company attendees may be participating remotely by telephone, again, for health and safety reasons. I would now like to introduce the members of our Board and our company officers as well as representatives from Deloitte & Touche LLP, our external auditing firm, and WilmerHale, our external corporate counsel. Representing our Board of Directors is the Chair of our Board, Patricia Gallup. David Hall, David Beffa-Negrini, Barbara Duckett and Jack Ferguson, each of whom is also joining us remotely by phone. With me here today is our CFO, Tom Baker, who is also serving as our inspector of elections. Also joining us today remotely by phone are a number of our senior management members: Rick Gilligan, Brian Hicks, Bob Howard, Jamal Khan, Kevin McCahill, Dick Saporito, John Thomas, Chris Ward, Eric Keating and Bob Pratt. In addition, representing WilmerHale is partner, Jay Bothwick, and representing Deloitte & Touche is partner, Santiago Fernandez, each of whom is joining remotely by phone. At the conclusion of the meeting, Tom and I will be available to answer questions that any stockholder may have. I will now conduct the formal part of the meeting. Please note that various remarks that we may make about future expectations, plans and prospects for the company constitute forward-looking statements for the purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in our Risk Factors section of our most recent annual report on Form 10-K, which is on file with the SEC and as updated in our quarterly report on Form 10-Q filed with the SEC on April 30. In addition, these forward-looking statements represent the company's expectations only as of today. While the company may elect to update these forward-looking statements, it specifically disclaims any obligation to do so. Any forward-looking statements should not be relied upon as representing the company's estimates or views as of any date subsequent to today. As indicated in the notice of meeting and the accompanying proxy statement, which were mailed to all stockholders, our agenda today consists of 3 items: one, to elect 5 directors to serve until the 2021 Annual Meeting of Stockholders; two, to approve the 2020 Stock Incentive Plan; and three, to ratify the selection by the Audit Committee of Deloitte & Touche LLP as our independent registered public accounting firm for the current fiscal year. The polls for these matters will open following a brief discussion of matters and will remain open until I announce that the polls are closed. No ballots, proxies or revocations thereof or changes thereto will be accepted after the polls are closed. I will announce the preliminary results of the voting immediately following the tabulation of the voting. I have received an affidavit from our transfer agent, American Stock Transfer & Trust Company, certifying that the notice of the annual meeting and the proxy statement were sent to all stockholders of record as of April 28, 2020. The affidavit and list of stockholders entitled to vote at this meeting are available for inspection by any stockholder. Are there any stockholders present who wish to vote in person because they either have not submitted a proxy or have submitted a proxy but wish to revoke their proxy or change their vote? Mr. Baker has been appointed to act as inspector of election. Tom has reported to me that there are present at this meeting, in person or through representation by proxy, a total of at least 25,931,123 shares of common stock. Since more than a majority of the outstanding shares of capital stock are represented at this meeting, I hereby declare that a quorum exists. Turning now to the items to be voted on at the meeting. As indicated in the notice of the meeting and accompanying documents that were sent to stockholders, the first matter to be voted on by the stockholders is the election of directors to serve until the 2021 Annual Meeting of Stockholders and until their successors are duly elected and qualified. The nominees for election are: Patricia Gallup, David Hall, David Beffa-Negrini, Barbara Duckett and Jack Ferguson. The next matter to be voted on by the stockholders is the approval of the company's new 2020 Stock Incentive Plan. The number of shares of common stock that may be issued under the plan is 350,000 shares. The third and final matter to be voted on by the stockholders is the ratification of the selection by the Audit Committee of Deloitte & Touche LLP as our independent registered public accounting firm for the current fiscal year. Is there any discussion on any of these proposals before we proceed to vote? This concludes the business items on the agenda for this meeting. I hereby declare that the polls are now open for each matter to be voted upon today. Are there any ballots to be collected, Tom?

None.

Then the polls are now closed. The votes will now be tabulated, and we will announce the preliminary results of the voting. Mr. Baker has prepared and provided to me a preliminary report as to the voting of each matter -- excuse me, the voting on each matter. The final vote results will be included in the Form 8-K that will be filed within 4 business days after this meeting. On the motion to elect directors, a plurality of the votes cast at the meeting has been voted in favor of each of the nominees to be elected by the holders of capital stock. On the motion to approve the 2020 Stock Incentive Plan, a majority of the votes cast at the meeting has been voted in favor to approve the new plan. On the motion to ratify the selection by the Audit Committee of Deloitte & Touche LLP as our independent registered public accounting firm for the current fiscal year, a majority of votes cast at the meeting has been voted in favor of the ratification of the selection by the Audit Committee of Deloitte & Touche. Therefore, I hereby declare that the nominees have been duly elected as directors. Our new Stock Incentive Plan has been duly approved. And Deloitte & Touche LLP has been duly ratified as our independent registered public accounting firm for the current fiscal year. I now instruct the Secretary of the company to include in the minutes of this meeting the precise number of shares voted on each proposal. As there are no further business to come before the meeting, I declare the meeting adjourned. Thank you for your attention. Operator, at this time, we're now available to answer questions that any stockholder may have.

[Operator Instructions] And there are no questions in the queue.

I want to thank everyone for their time today and for their support. Your time and support are appreciated. Have a great day.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating, you may now disconnect. Everyone, have a great day.