Management believes this non-GAAP measurement is useful to investors since duringthe quarter presentedthe Company incurred charges that affected the Company`s performance related to an unusually loweffective tax rate in comparison to its historical effective tax rate and theincurrence ofrestructuring charges. A lower effective tax rate in a loss position results in adecrease to the taxbenefit; however, in an income position, a lower effective tax rate results in a smaller tax expense.ICRInvestor Relations:Don Duffy / Raphael Gross, 203-682-8200orMedia:Liz Brady, 203-682-8200Copyright Business Wire 2009. Consolidated First Quarter Highlights:* Net sales for Q1 2009 were $259.3 million, down 23% year-over-year (YOY) * Gross profit for Q1 2009 was $37.5 million, down 17% YOY * Gross profit margin for the quarter was 14.5% vs. 13.5% in Q1 2008 * Diluted EPS for the quarter was $0.08 per share vs. $0.21 in Q1 2008 * Operating cash flow was $19.0 million in Q1 2009 * We purchased 430,374 shares of our common stock in Q1 2009 at an average priceof $3.80 per shareTORRANCE, Calif.--(Business Wire)--PC Mall, Inc. (NASDAQ:MALL) today reported first quarter financial results.Consolidated net sales for Q1 2009 were $259.3 million, a $77.3 million or 23%decrease from consolidated net sales of $336.6 million in Q1 2008. Consolidatedgross profit for Q1 2009 decreased 17% to $37.5 million from $45.3 million in Q12008.
Consolidated gross profit margin was 14.5% for Q1 2009 compared to 13.5%for Q1 2008. Consolidated operating profit for Q1 2009 decreased 67% to $2.1million, compared to $6.2 million for Q1 2008. Consolidated net income for Q12009 was $1.0 million compared to $3.0 million in Q1 2008, a decrease of $2.0million or 66%. Diluted EPS for Q1 2009 was $0.08 compared to diluted EPS of$0.21 for Q1 2008 Frank Khulusi, Chairman, President and CEO of PC Mall, Inc.
said, "In the firstquarter, demand was under significant pressure as commercial and public sectorclients delayed the approval of IT budgets, which we believe was driven byongoing economic uncertainty. Though the environment remained challenging duringthe entire quarter, we continued to execute on our strategy of containing costswhile making strategic investments. I am proud of the way our team has executedduring these challenging times. We remain focused on exceeding our customers`expectations as a value added provider of comprehensive IT solutions. We believeour value proposition is as strong as it has ever been and we continue to bededicated to optimizing our results in the current environment while positioningourselves for future growth." Segment ResultsSMBQ1 2009 net sales for our SMB segment were $89.5 million compared to $130.6million in Q1 2008, a decrease of $41.1 million, or 32%, primarily due tocontinued softening in IT spending by small and medium sized businesses and adecrease of $8 million in lower margin volume iPod sales to certain customers.
SMB gross profit decreased by $4.8 million, or 30%, to $11.3 million in Q1 2009compared to $16.1 million in Q1 2008 resulting primarily from decreased SMB netsales discussed above. SMB gross profit margin increased by 30 basis points to12.6% in Q1 2009 compared to 12.3% in Q1 2008 primarily due to the reduction inlower margin volume iPod sales to certain customers discussed above. SMB operating profit in Q1 2009 decreased by $2.4 million, or 30%, to $5.4million compared to $7.8 million in Q1 2008. The decrease in SMB operatingprofit in Q1 2009 was primarily due to the decrease in gross profit discussedabove, partially offset by a $2.2 million decrease in SMB personnel costs. The$2.2 million decrease in SMB personnel costs resulted from decreased variablecommission and bonus expenses, a reduction in headcount and a one-time $0.6million benefit related to the Canadian government labor subsidy program.
MMEQ1 2009 net sales for our MME segment were $84.9 million compared to $102.9million in Q1 2008, a decrease of $18.0 million, or 18%. This decrease wasprimarily due to continued softening demand by customers in the mid-marketenterprise sector in Q1 2009. Product revenues declined by 24% in Q1 of 2009compared to Q1 of 2008, while service revenues increased by 7% in Q1 2009compared to Q1 2008. Service revenues represented 27% of MME net sales in Q12009 compared to 21% of MME net sales in Q1 2008.