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

Good day, and thank you for standing by. Welcome to the Connection 2025 Annual Meeting of Stockholders. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to turn the conference over to your speaker for today, Tim McGrath. Please go ahead.

Well, thank you [Audio Gap] for this meeting. At this time, I'll call the meeting to order. We have, again, this year, supplemented our in-person meeting with a courtesy dial-in for stockholders who have submitted their proxy in advance of the meeting and wish to listen remotely rather than attending in person. Only stockholders who are here in person may vote in person or otherwise participate. Now I'd like to introduce the members of our Board, our company officers as well as representatives of Deloitte & Touche LLP, our external auditing firm and WilmerHale, our external corporate counsel who are all either joining this meeting by phone or in [Audio Gap] David Beffa-Negrini, Barbara Duckett, Jack Ferguson, and Gary Kinyon. Also with us today is our CFO and Inspector of Elections, Tom Baker as well as a number of our senior... [Technical Difficulty]

One moment please stand by. Pardon me, speakers, we're now able to hear you.

Thank you. So pardon that interruption.

And pardon me, speakers, you're silent again. Are you able to hear us?

Good morning. Sorry for that brief interruption. I will now commence the formal part of the meeting. I've received an affidavit from Broadridge Financial Solutions certifying that the Notice of the Annual Meeting and proxy statement were sent to all stockholders of record as of March 17, 2025. This affidavit and the list of stockholders entitled to vote at this meeting are available for inspection by any stockholder. Our first order of business at this meeting is to determine whether the shares represented at the meeting, either in person or by proxy, are sufficient to constitute a quorum. For the purpose of this transacting business, Mr. Baker has been appointed to act as Inspector of Election. Mr. Baker has reported to me that there are present at the meeting in person or through representation by proxy, a total of at least 24,796,514 shares of common stock. Since more than a majority of the outstanding shares of capital stock are represented at the meeting, I hereby declare that a quorum exists. Turning now to the items to be voted on at this meeting. As indicated in the notice of the meeting and accompanying proxy statement, which were mailed to all stockholders, our agenda today consists of 6 items. Number one, to elect 6 directors to serve until the 2026 Annual Meeting of Stockholders. Number two, to approve on an advisory basis, the compensation of our named executive officers. Number three, to hold an advisory vote on the frequency of future executive compensation advisory votes. Number four, to approve an amendment to the company's 2020 stock incentive plan, increasing the number of shares of common stock authorized for issuance under the plan from 1,252,500 to 1,652,500. Number five, to approve an amendment to the Company's Amended and Restated 1997 Employee Stock Purchase Plan, increasing the number of shares of common stock authorized for issuance under such plan from 1,302,500 to 1,352,500. And number six, to ratify the selection by the Audit Committee of Deloitte & Touche LLP as our independent registered public accounting firm for the year ended December 31, 2025. The polls for these matters will open following a brief discussion of these 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'll announce the preliminary results of voting immediately following the tabulation of the voting. Are there any stockholders present who wish to either 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? The first matter to be voted on by the stockholders is the election of directors to serve until the 2026 Annual Meeting of Stockholders and until their successors are duly elected and qualified. The nominees for election are Patricia Gallup, David Beffa-Negrini, Jay Bothwick, Barbara Duckett, Jack Ferguson and Gary Kinyon. The next matter to be voted on by the stockholders is the approval on an advisory basis of the compensation of our named executive officers. The proxy statement for the meeting contains the text of the resolution that stockholders are asked to approve. The next matter to be voted on by the stockholders is the frequency of future executive compensation advisory votes. The proxy statement for the meeting contains the text of the resolution that stockholders are asked to approve. The next matter to be voted on by the stockholders is the amendment of the Company's 2020 Stock Incentive Plan to increase the number of shares of common stock that may be issued from 1,252,500 to 1,652,500 representing an increase of 400,000 shares. The next matter to be voted on by the stockholders is the amendment of the Company's Amended and Restated 1997 Employee Stock Purchase Plan to increase the number of shares of common stock that may be issued from 1,302,500 to 1,352,500, representing an increase of 50,000 shares. The final matter to be voted on by stockholders is the ratification of the selection of the Audit Committee of Deloitte & Touche LLP as our independent registered public accounting firm for the current fiscal year. Are there any questions or other discussions of any of these proposals before we proceed to vote? This concludes the business items on the agenda for the meeting. I hereby declare that the polls are now open. [Voting]

So for each matter to be voted upon today, are there any ballots to be collected? The polls are now closed. The votes will be tabulated, and we will announce the preliminary results of the voting. Mr. Baker has prepared and provided to me a preliminary report of 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 votes cast at the meeting has been voted in favor of each of the nominees to be elected. On the advisory resolution approving the compensation of our named executive officers a majority of the votes cast at the meeting has been voted in favor of approving the compensation of our named executive officers. On the motion to hold an advisory vote on the frequency of future executive compensation advisory votes, a majority of the votes cast at the meeting has been voted in favor of holding executive compensation advisory votes every 3 years. On the motion to approve the amendment of the 2020 stock incentive plan, a majority of the votes cast at the meeting has been voted in favor of approving the amendment. On the motion to approve the amendment to the amended and restated 1997 employee stock purchase plan, a majority of votes cast at the meeting has been voted in favor of approving the amendments. On the motion to ratify the selection by audit -- 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 the votes cast at the meeting has been voted in favor of the ratification. Therefore, I hereby declare that the nominees have been duly elected as directors, the compensation of our named executive officers has been approved on an advisory basis. Shareholders have approved holding an advisory vote on the compensation of our named executive officers every 3 years. The amendment to our stock incentive plan and employee stock purchase plan have been duly approved. And Deloitte & Touche LLP has been duly ratified as our independent registered public accounting firm for the current fiscal year. I will now instruct the Secretary of the company to include in the minutes of this meeting the precise number of shares voted on each proposal. There is no further business to come before the meeting, I declare the formal portion of the meeting adjourned. I want to thank everyone for their time and attention today. The meeting is adjourned. Have a great day.

Thank you all for joining today's meeting. You may now disconnect.