PC Connection Inc. (CNXN) as of March 31, 2026 presents a balance sheet that is meaningfully asset-rich under a liquidation lens, driven primarily by liquid financial assets rather than operating assets. Total assets of $1.43B against total liabilities of $503M yield reported book equity of $922M. Under liquidation haircuts, the recovery calculus is as follows: cash and cash equivalents of $196M recover at 100%; short-term investments of $215M (U.S. Government treasury securities per MD&A) recover near par, treated here at 100% given the instrument type; accounts receivable of $661M at a 90-95% recovery yields approximately $595-628M; inventory of $194M at 60% yields $117M; PP&E of $47M at 50-70% yields $23-33M; goodwill of $74M at 0%; other intangibles of $0.7M at 0%; operating lease ROU assets of $7M at 0%; other non-current assets of $6M at 0%. Total estimated recoverable assets: approximately $1.15-1.19B. Liability stack at face value: current liabilities of $477M (including accounts payable of $396M, accrued liabilities of $53M, and accrued payroll of $28M), non-current liabilities of $26M (deferred tax liability of $20M, non-current operating lease liability of $6M). Total liabilities face value: $503M. Estimated net recovery to equity: approximately $650-690M, compared to MFFAIS-reported operating liquidation value of $568M and liquid liquidation value of $374M. The discrepancy reflects the quality of the short-term investment portfolio (near-cash U.S. Treasuries) which supports a higher recovery assumption than standard liquid haircuts. The dominant liability-side risk is the supplier finance program obligation of $96M — this figure is embedded within accounts payable at face value per ASC disclosure requirements and represents a meaningful contingent acceleration risk on wind-down since participating suppliers could demand immediate settlement. The $96M supplier finance obligation grew from $58.6M at December 31, 2025, a $37M increase in one quarter, driven by inventory build (DIO increased from 24 to 30 days). Inventory itself increased materially intra-quarter, consuming $51M of operating cash, partly offset by a $58M accounts payable build. No debt outstanding. No pension obligation. Operating lease liability of $7.4M is modest relative to asset base. Goodwill of $74M is the primary non-recoverable asset block: $66M in Enterprise Solutions, $7M in Business Solutions per the prior 10-K disclosure. The headquarters leases for Merrimack, NH are month-to-month with no written long-term agreement, which limits lease liability recognition under ASC 842 but also means no contractual protection if the landlord (a related party) terminates on short notice — this is noted in the filing but not separately XBRL-tagged as a contingent lease obligation.
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