PC Connection, Inc. to Acquire MoreDirect
Company Comments on Expected First Quarter Results
MERRIMACK, N. H.--( BUSINESS WIRE)--March 26, 2002--PC Connection, Inc. (NASDAQ: PCCC -news), a leading direct marketer of information technology (IT) products and solutions, today announced the signing of a definitive merger agreement under which PC Connection will acquire MoreDirect, Inc., a premier e-procurement supplier of IT products for medium-to-large corporate and government organizations nationwide. MoreDirect's Internet-based system enables corporate and government customers to efficiently source, evaluate, purchase and track a wide variety of IT products. For 2001, MoreDirect reported net sales and pre-tax income of $219 million and $9.2 million, respectively. The acquisition will be accounted for using the purchase method of accounting and will be immediately accretive to earnings. The boards of directors of both companies have unanimously approved the transaction and expect it to close within the next 30 days.

Under the terms of the agreement, PC Connection will pay the shareholders of MoreDirect approximately $21 million in cash at the closing. Prior to the closing, MoreDirect will distribute from available cash balances approximately $9 million in previously taxed but undistributed earnings. In addition, PC Connection will pay additional cash based upon MoreDirect achieving targeted levels of annual earnings before income taxes through December 31, 2004 (see attached Exhibit A). PC Connection will also escrow $10 million in cash at closing to fund a portion of these contingent payments. Certain portions of the contingent payments may be converted into PC Connection common stock at specified conversion prices between $20.80 and $40.00 per share.

Ken Koppel, Chief Executive Officer of PC Connection, Inc., said, ``We are very pleased to have MoreDirect join the PC Connection, Inc. family of companies. Russell Madris, President of MoreDirect, has built a very successful organization that services medium-to-large corporate and government customers through leveraging a high-quality sales organization with an Internet-based e-procurement solution. '' MoreDirect will operate as a wholly-owned subsidiary of PC Connection from its current facilities located in Boca Raton, Florida. The company will continue to operate under the MoreDirect trade name.

Commenting on the acquisition, Russell L. Madris, said, ``As a part of PC Connection, one of the largest and best-known IT direct marketing companies in the industry, MoreDirect will have access to additional capital, marketing programs and other resources. Our customers will benefit from PC Connection's wide range of service offerings, including overnight custom configuration, as well as their additional inventory and logistics capabilities. We believe our Internet-based e-procurement system is highly scalable, and we look forward to pursuing new growth opportunities as a subsidiary of PC Connection. '' Martin Wolf Securities LLC advised MoreDirect in connection with this transaction. Mr. Koppel added, ``The purchase of MoreDirect is consistent with PC Connection's strategy of acquiring businesses with similar corporate cultures which add new customers and management talent, and are immediately accretive to our earnings and key operating ratios. ''

Additionally, PC Connection announced that it expects its net sales in the first quarter of 2002 to be in the range of $235 million to $240 million. The Company also expects to report a loss, before special charges, in the range of $. 04 per share to $. 06 per share, and after special charges, a loss in the range of $0.06 per share to $0.08 per share. PC Connection expects to report its definitive financial results for the quarter during the week of April 15, 2002.

PC Connection's commercial business has remained virtually flat with the fourth quarter of 2001. Federal government business is expected to be up 10% over the first quarter of 2001, but down sequentially from the fourth quarter of 2001 by $32 million. The sequential decline in federal government sales was greater than previous years' historical patterns due to the unusually high federal government sales achieved in the fourth quarter of 2001. The Company remains optimistic that the federal business will have another strong year of growth in 2002.

Ken Koppel commented, ``Although we are disappointed with our projected results for the quarter, we are encouraged that the commercial business has stabilized. We are cautiously optimistic that with a stable commercial business, seasonally better quarters for our GovConnection business, and the completion of our acquisition of MoreDirect, the Company will see improved financial results in the remaining three quarters of 2002. ''

About PC Connection, Inc.

PC Connection, Inc., a Fortune 1000 company, has two sales subsidiaries, PC Connection Sales Corporation of Merrimack, NH and GovConnection, Inc. of Rockville, MD. PC Connection Sales Corporation is a rapid-response provider of IT products and solutions offering more than 100,000 brand-name products to businesses through its staff of technically trained outbound sales account managers and catalog telesales representatives, its comprehensive web sites at www.pcconnection.com and www.macconnection.com, and its catalogs PC Connection (1-800-800-5555) and MacConnection (1-800-800-2222). GovConnection, Inc. is a rapid-response provider of IT products and solutions, offering more than 100,000 brand-name products to federal, state and local agencies and educational institutions (1-800-800-0019). Both subsidiaries can deliver custom-configured computer systems overnight.

About MoreDirect, Inc.
MoreDirect, Inc. provides corporate technology buyers with a comprehensive web-based e-procurement solution and in-depth IT supply-chain expertise. MoreDirect serves as a one-stop source by aggregating more than 350,000 products from the inventories of leading IT wholesale distributors and manufacturers. MoreDirect has a web-based system that enables IT corporate buyers to view the inventories of multiple wholesale distributors and manufacturers at a single source and provides valuable IT supply-chain knowledge and asset management functionality.

``Safe Harbor'' Statement Under the Private Securities Litigation Reform Act of 1995: This release contains forward-looking statements that are subject to risks and uncertainties, including, but not limited to, the impact of changes in market demand and the overall level of economic activity, or in the level of business investment in information technology products, competitive products and pricing, product availability and market acceptance, new products, fluctuations in operating results and other risks detailed under the caption ``Factors That May Affect Future Results and Financial Condition'' in the Company's 2000 Annual Report on Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 2000. More specifically, the statements in this release concerning the accretive nature of the proposed acquisition of MoreDirect, the Company's expected net sales and losses for the quarter ending March 31, 2002 and the Company's outlook for the balance of 2002 are forward-looking statements that involve certain risks and uncertainties. Such risks and uncertainties include the ability to realize the expected advantages of the proposed merger, market demand for and competitive pricing pressures on the products and services marketed by the Company, the continued acceptance of the Company's distribution channel by vendors and customers, continuation of key vendor relationships and support programs and the ability of the Company to hire and retain qualified sales account managers and other essential personnel.

Contingent Consideration Structure
Based upon achievement of MoreDirect's Earnings Before Income Tax (EBIT) for calendar years 2002, 2003 and 2004.

Contingent Consideration Backed by Cash Escrow
--A cash escrow of $10 million. The escrow will be paid out in one installment if MoreDirect maintains EBIT for the calendar year 2002
and 2003 of at least $22 million in the aggregate.
--If MoreDirect has the aggregate EBIT for calendar year 2002 and 2003 of at least $19.8 million, and the 2003 EBIT is greater than the
2002 EBIT, the escrow payout will be prorated.
--If MoreDirect earns at least $11 million in EBIT for calendar year 2002, $5.0 million of the cash escrow will be paid out and the balance
would be paid based upon aggregate 2002 and 2003 EBIT as noted above.

Additional Contingent Consideration ($ in thousands)
Calendar Year 2002
% of Additional Payment Goal EBIT % of EBIT Amount

Floor 60% $ 7,590 41% $ 3,112 80% 10,120 41% 4,149
100% 12,650 41% 5,187 120% 15,180 44% 6,679
140% 17,710 47% 8,324 150% 18,975 50% 9,488
160% 20,240 53% 10,727 170% 21,505 56% 12,043
180% 22,770 59% 13,434 190% 24,035 62% 14,902
Ceiling 200% 25,300 65% 16,445

Calendar Year 2003
% of Additional Payment Goal EBIT % of EBIT Amount

Floor 60% $ 8,729 41% $ 3,579
80% 11,638 41% 4,772 100% 14,548 41% 5,964
120% 17,458 44% 7,681 140% 20,367 47% 9,572
150% 21,822 50% 10,911 160% 23,277 53% 12,336
170% 24,732 56% 13,849 180% 26,186 59% 15,449
190% 27,641 62% 17,137 Ceiling 200% 29,096 65% 18,912

Calendar Year 2004
% of Additional Payment Goal EBIT % of EBIT Amount

Floor 60% $10,038 41% $ 4,115 80% 13,384 41% 5,487
100% 16,730 41% 6,859 120% 20,076 44% 8,833
140% 23,422 47% 11,008 150% 25,095 50% 12,547
160% 26,768 53% 14,187 170% 28,441 56% 15,927
180% 30,114 59% 17,767 190% 31,787 62% 19,707
Ceiling 200% 33,460 65% 21,749
Note: No payout for EBIT less than 60% of goal; payout capped for 200% of goal.

Contact:
PC Connection, Inc. Mark A. Gavin, (603) 423-2451
www.pcconnection.com