Earnings release
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Exhibit 99.1 Investor Relations Contact:Thomas Baker, 603.683.2505Senior Vice President, CFO, and Treasurertom@connection.com CONNECTION (CNXN)REPORTS THIRD QUARTER 2026 RESULTS THIRD QUARTER SUMMARY: FIRST NINE MONTHS OF 2026 SUMMARY: ● Net sales: $874.3 million, up 23.3% y/y● Gross billings: $1.3 billion, up 19.4% y/y1 ● Gross profit: $161.9 million, up 16.7% y/y● Gross margin: 18.5%, down 110 basis points y/y● Net income: $31.5 million, up 27.2% y/y● Diluted EPS: $1.24, compared to $0.97 y/y● Adjusted Diluted EPS: $1.24, compared to $0.972 ● Net sales: $2.5 billion, up 12.9% y/y● Gross billings: $3.5 billion, up 12.8% y/y1 ● Gross profit: $452.1 million, up 12.0% y/y● Gross margin: 18.5%, down 10 basis points y/y● Net income: $81.8 million, up 29.9% y/y● Diluted EPS: $3.23, compared to $2.45 y/y● Adjusted Diluted EPS: $3.31, compared to $2.532 Merrimack, NH—October 28, 2026—Connection (PC Connection, Inc.; NASDAQ: CNXN), a leading informationtechnology solutions provider to business, government, healthcare and education markets, today announced resultsfor the third quarter ended September 30, 2026. The Company also announced that its Board of Directors declared aquarterly dividend of $0.20 per share of the Company’s common stock. Payment will be made on November 27,2026, to shareholders of record on November 10, 2026. “Connection delivered record net sales, gross billings, and gross profit in the third quarter, translating strong customerdemand and disciplined execution into earnings growth,” said Timothy McGrath, Chief Executive Officer. McGrathcontinued, “AI is expanding the opportunities across the technology lifecycle, and our expertise brings the rightsolutions together to help customers realize the value. We believe our integrated capabilities position us well todeepen customer relationships, deliver sustained profitable growth and long-term shareholder value.” Third Quarter of 2026 Results: Net sales for the quarter ended September 30, 2026 increased by 23.3% year over year. Gross billings increased by19.4% to $1.3 billion, compared to $1.1 billion in the third quarter of 20251. Gross profit increased by 16.7% to $161.9million, compared to $138.6 million for the third quarter of 2025, and gross margin decreased 110 basis points to18.5%, compared to the prior year quarter. Net income increased 27.2% to $31.5 million, or $1.24 per diluted share,compared to $24.7 million, or $0.97 per diluted share, for the third quarter of 2025. Performance by Segment: ● Net sales for the Business Solutions segment increased by 27.8% to $328.2 million in the third quarter of2026, compared to $256.8 million in the prior year quarter. Gross billings increased by 22.1% to $522.7million, compared to $428.2 million in the prior year quarter1. Gross profit increased by 14.9% to $78.2 million,compared to $68.0 million in the prior year quarter. Gross margin decreased by 270 basis points to 23.8% forthe third quarter of 2026. 1 Gross billings is the total dollar value of goods and services billed during the period, net of customer returns, credit memos, and any applicable sales or other taxes andinclude agency fees, and freight. As certain transactions are recognized on a net basis, gross billings include amounts not recognized in net sales.2 Adjusted Diluted Earnings per Share and Adjusted EBITDA are non-GAAP measures. See page 9 for definitions and reconciliations of these measures.
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● Net sales for the Public Sector Solutions segment increased by 4.6% to $138.6 million in the third quarter of2026, compared to $132.5 million in the prior year quarter. Gross billings increased by 6.8% to $233.3 million,compared to $218.5 million in the prior year quarter1. Gross profit increased by 2.9% to $23.5 million,compared to $22.8 million in the prior year quarter. Gross margin decreased by 30 basis points to 16.9% forthe third quarter of 2026. ● Net sales for the Enterprise Solutions segment increased by 27.4% to $407.5 million in the third quarter of2026, compared to $319.8 million in the prior year quarter. Gross billings increased by 23.1% to $521.2million, compared to $423.3 million in the prior year quarter1. Gross profit increased by 26.0% to $60.2 million,compared to $47.8 million in the prior year quarter. Gross margin decreased by 10 basis points to 14.8% forthe third quarter of 2026. Sales by Product Mix: ● Notebooks/mobility and desktop sales increased by 27% year over year and accounted for 46% of net sales inthe third quarter of 2026, compared to 45% of net sales in the third quarter of 2025. ● Software sales increased by 23% year over year and accounted for 13% of net sales in the third quarter ofboth 2026 and 2025. ● Servers/storage sales increased by 45% year over year and accounted for 9% of net sales in the third quarterof 2026, compared to 7% of net sales in the third quarter of 2025. ● Networking sales increased by 43% year over year and accounted for 8% of net sales in the third quarter of2026, compared to 7% of net sales in the third quarter of 2025. ● Accessories sales increased by 4% year over year and accounted for 10% of net sales in the third quarter of2026, compared to 12% of net sales in the third quarter of 2025. Selling, general and administrative (“SG&A”) expenses increased in the third quarter of 2026 by 11.5% to $120.9million from $108.4 million in the prior year quarter. SG&A as a percentage of net sales decreased to 13.8%,compared to 15.3% in the prior year quarter. Interest income in the third quarter of 2026 was $2.5 million, compared to $3.7 million in the third quarter of 2025. Cash and cash equivalents and short-term investments were $343.3 million as of September 30, 2026, compared to$406.7 million as of December 31, 2025. Nine Months of 2026 Results: Net sales for the nine months ended September 30, 2026 increased by 12.9%, compared to the nine months endedSeptember 30, 2025. Gross billings increased by 12.8% to $3.5 billion, compared to $3.1 billion for the nine monthsended September 30, 20251. Gross profit increased by 12.0% to $452.1 million, compared to $403.7 million for thenine months ended September 30, 2025, and gross margin decreased 10 basis points to 18.5%, compared to thenine months ended September 30, 2025. Net income for the nine months ended September 30, 2026 increased by29.9% to $81.8 million, or $3.23 per diluted share, compared to net income of $63.0 million, or $2.45 per dilutedshare, for the nine months ended September 30, 2025. Adjusted Diluted Earnings per Share2 increased to $3.31 pershare for the nine months ended September 30, 2026, compared to $2.53 per share for the nine months endedSeptember 30, 2025. Earnings before interest, taxes, depreciation and amortization, adjusted for stock-based compensation expense,restructuring and other charges and non-routine legal settlements (“Adjusted EBITDA”)2 increased 1 Gross billings is the total dollar value of goods and services billed during the period, net of customer returns, credit memos, and any applicable sales or other taxes andinclude agency fees, and freight. As certain transactions are recognized on a net basis, gross billings include amounts not recognized in net sales.2 Adjusted Diluted Earnings per Share and Adjusted EBITDA are non-GAAP measures. See page 9 for definitions and reconciliations of these measures.
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26% to $155.2 million for the twelve months ended September 30, 2026, compared to $122.7 million for the twelvemonths ended September 30, 2025. Conference Call and Webcast Connection will host a conference call and live web cast today, October 28, 2026 at 4:30 p.m. EDT to discuss its thirdquarter financial results. For participants who would like to participate via telephone, please register here to receivethe dial-in number along with a unique PIN number that is required to access the call. A web-cast of the conferencecall, which will be broadcast live via the Internet, and a copy of this press release, can be accessed on Connection’swebsite at ir.connection.com. For those unable to participate in the live call, a replay of the webcast will be availableat ir.connection.com approximately 90 minutes after the completion of the call and will be accessible on the site forapproximately one year. Non-GAAP Financial Information EBITDA, Adjusted EBITDA, LTM Adjusted EBITDA, Adjusted Net Income and Adjusted Diluted Earnings per Share are non-GAAP financial measures. These measures are included to provide additional information with respect to the Company’s operating performance and earnings. Non-GAAP measures are not a substitute for GAAP measures and should be considered together with the GAAP financial measures. Our non-GAAP financial measures may not be comparable to similarly titled measures of other companies. Definitions for each Non-GAAP measure and a reconciliation to their most directly comparable GAAP measures are available in the tables at the end of this release. About Connection PC Connection, Inc. and its subsidiaries, dba Connection, (www.connection.com; NASDAQ: CNXN) is a Fortune1000 company headquartered in Merrimack, NH. With offices throughout the United States, Connection deliverscustom-configured IT solutions from its ISO 9001:2015 SOC 2 Type 2 certified Technology Integration and DistributionCenter in Wilmington, OH. In addition, the Company has more than 5,000 professional certifications to ensure that itcan solve the most complex issues of its customers. Connection also services international customers through itsGlobalServe subsidiary, a global IT procurement and service management company. Investors and media can findmore information about Connection at http://ir.connection.com. Connection Business Solutions (800.800.5555) is a rapid-response provider of IT products and services servingprimarily the small- and medium-sized business sector. It offers more than 460,000 brand-name products through itsstaff of technically trained sales account managers, publications, and its website at www.connection.com. Connection–Enterprise Solutions (561.237.3300), www.connection.com/enterprise, provides corporate technologybuyers with best-in-class IT solutions, in-depth IT supply-chain expertise, and real-time access to over 460,000 productsand 1,600 vendors through MarkITplace®, a proprietary next-generation, cloud-based supply chain solution. The team’sengineers, software licensing specialists, and subject matter experts help reduce the cost and complexity of buyinghardware, software, and services throughout the entire IT lifecycle. Connection Public Sector Solutions (800.800.0019), is a rapid-response provider of IT products and services to federal,state, and local government agencies and educational institutions through specialized account managers, publications, andonline at www.connection.com/publicsector. Cautionary Note Regarding Forward-Looking Statements This earnings release contains forward-looking statements within the meaning of Section 27A of the Securities Act of1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-lookingstatements generally relate to future events or our future financial or operating performance and include statementsconcerning, among other things, our future financial results, business plans (including statements regarding newproducts and services we may offer and future expenditures, costs and investments), liabilities, impairment charges,competition and the expected impact of current macroeconomic
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conditions on our businesses and results of operations. You can generally identify forward-looking statementsbecause they may contain words such as “may,” “will,” “would,” “should,” “expects,” “plans,” “could,” “intends,” “target,”“projects,” “believes,” “estimates,” “anticipates,” “potential” or “continue” or the negative of these words or other similarterms or expressions that concern our expectations, strategy, plans or intentions, although not all forward-lookingstatements include such terms. These statements reflect our current views and are based on assumptions as of thedate of this release. Such assumptions are based upon internal estimates and other analysis of current marketconditions and trends, management’s expectations, plans and strategies, economic conditions and other factors.These statements are subject to known and unknown risks, uncertainties and other factors that may cause our actualresults, performance or achievements to be materially different from expectations or results projected or implied byforward-looking statements.Such differences may result from actions taken by us, including expense reduction or strategic initiatives (includingreductions in force, capital investments and new or expanded product offerings or services), the execution of ourbusiness plans (including our inventory management, cost structure and management and other personnel decisions)or other business decisions, as well as from developments beyond our control, including: ● macroeconomic factors facing the global economy, including disruptions in or increased volatility of the capitalmarkets, changes in trade policy, which may include the imposition of tariffs or other trade barriers, economicsanctions and economic slowdowns or recessions, government shutdowns, the impact of conflicts in Iran and theMiddle East, changes in tax policy, rising inflation and changing interest rates modifying our potential forinvestment income and the timing thereof or reducing the level of investment our customers are willing to make inIT products; ● supply constraints, such as the global memory (DRAM and NAND) shortage; ● substantial competition reducing our market share; ● significant price competition reducing our profit margins; ● the loss of any of our major vendors adversely affecting the number or type of products we may offer; ● virtualization of information technology resources and applications, including networks, servers, applications, anddata storage disrupting or altering our traditional distribution models; ● service interruptions at third party shippers negatively impacting our ability to deliver the products we offer to ourcustomers; ● increases in shipping and postage costs reducing our margins and adversely affecting our results of operations; ● loss of key persons or the inability to attract, train and retain qualified personnel adversely affecting our ability tooperate our business; and ● cyberattacks or the failure to safeguard personal information and our IT systems resulting in liability and harm toour reputation. Additional factors include those described in our Annual Report on Form 10-K for the year ended December 31, 2025,including under the captions “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition andResults of Operations,” and “Business,” in our subsequent Quarterly Reports on Form 10-Q, including under thecaptions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results ofOperations,” and in the other subsequent filings we make with the Securities and Exchange Commission from time totime. A forward-looking statement is neither a prediction nor a guarantee of future events or circumstances. You should notplace undue reliance on the forward-looking statements included in this release. We assume no obligation to updateany of these forward-looking statements, or to update the reasons actual results could differ materially from thoseanticipated, to reflect circumstances or events that occur after the statements are made except as required by law.
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CONSOLIDATED SELECTED FINANCIAL INFORMATION At or for the Three Months Ended September 30, 2026 2025 % ChangeOperating Data:Net sales (in thousands) $ 874,313 $ 709,068 23%Diluted earnings per share $ 1.24 $ 0.97 28% Gross margin 18.5% 19.6%Operating margin 4.7% 4.3% Inventory turns (1) 14 18Days sales outstanding (2) 74 74 % of % ofProduct Mix: Net Sales Net SalesNotebooks/Mobility 32% 34%Desktops 14 11Software 13 13Accessories 10 12Servers/Storage 9 7Net/Com Products 8 7Displays and Sound 8 9Other Hardware/Services 6 7 Total Net Sales 100% 100% Stock Performance Indicators:Actual shares outstanding (in thousands) 25,248 25,326Closing price $ 90.23 $ 61.99Market capitalization (in thousands) $ 2,278,127 $ 1,569,959Trailing price/earnings ratio 22.3 19.2LTM Net Income (in thousands) $ 102,561 $ 83,731LTM Adjusted EBITDA (3) (in thousands) $ 155,170 $ 122,730 (1) Represents the annualized cost of goods sold for the period divided by the average inventory for the prior four-month period. (2) Represents the trade receivable at the end of the period divided by average daily net sales for the same three-month period. (3) LTM Adjusted EBITDA is a non-GAAP measure defined as EBITDA (earnings before interest, taxes, depreciation andamortization) adjusted for stock-based compensation, severance expenses and non-routine legal settlements for the lasttwelve months. See page 8 for a reconciliation. REVENUE AND MARGIN INFORMATION For the Three Months Ended September 30, 2026 2025 Net Gross Net Gross (amounts in thousands) Sales Margin Sales MarginEnterprise Solutions $ 407,476 14.8% $ 319,744 14.9%Business Solutions 328,223 23.8 256,841 26.5Public Sector Solutions 138,614 16.9 132,483 17.2 Total $ 874,313 18.5% $ 709,068 19.6%
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CONDENSED CONSOLIDATED STATEMENTS OF INCOME Three Months Ended September 30, Nine Months Ended September 30 (amounts in thousands, except per share data) 2026 2025 2026 2025Net sales $ 874,313 $ 709,068 $ 2,450,175 $ 2,169,807Cost of sales 712,452 570,423 1,998,104 1,766,085Gross profit 161,861 138,645 452,071 403,722Selling, general and administrative expenses 120,881 108,379 344,794 325,107Severance expenses — — 3,060 2,930Income from operations 40,980 30,266 104,217 75,685Interest income, net 2,467 3,689 8,355 10,805Other income — — — 76Income tax provision (11,989) (9,215) (30,723) (23,556 Net income $ 31,458 $ 24,740 $ 81,849 $ 63,010 Earnings per common share:Basic $ 1.25 $ 0.98 $ 3.25 $ 2.46 Diluted $ 1.24 $ 0.97 $ 3.23 $ 2.45 Shares used in computation of earnings per common share:Basic 25,241 25,354 25,223 25,609 Diluted 25,441 25,489 25,362 25,734
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CONDENSED CONSOLIDATED BALANCE SHEETS September 30, December 31, (amounts in thousands) 2026 2025ASSETSCurrent Assets:Cash and cash equivalents $ 124,597 $ 193,221Short-term investments 218,717 213,457Accounts receivable, net 789,590 648,020Inventories, net 226,599 143,567Prepaid expenses and other current assets 23,718 22,607Total current assets 1,383,221 1,220,872Property and equipment, net 45,569 46,912Right-of-use assets 7,541 1,569Goodwill 73,602 73,602Intangibles, net 450 989Other assets 5,915 6,981 Total Assets $ 1,516,298 $ 1,350,925 LIABILITIES AND STOCKHOLDERS’ EQUITYCurrent Liabilities:Accounts payable $ 413,156 $ 338,202Accrued payroll 36,800 30,939Accrued expenses and other liabilities 58,240 51,251Total current liabilities 508,196 420,392Deferred income taxes 20,261 19,905Non-current operating lease liabilities 6,712 498 Total Liabilities 535,169 440,795Stockholders’ Equity:Common stock 296 295Additional paid-in capital 151,805 144,608Retained earnings 972,606 905,890Accumulated other comprehensive (loss) income (414) 78Treasury stock, at cost (143,164) (140,741) Total Stockholders’ Equity 981,129 910,130 Total Liabilities and Stockholders’ Equity $ 1,516,298 $ 1,350,925
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Three Months EndedSeptember 30, Nine Months EndedSeptember 30, (amounts in thousands) 2026 2025 2026 2025Cash Flows provided by (used in) Operating Activities:Net income $ 31,458 $ 24,740 $ 81,849 $ 63,010Adjustments to reconcile net income to net cash provided by (used in)operating activities:Depreciation and amortization 2,640 2,888 8,173 8,853Adjustments to credit losses reserve 1,414 175 3,210 1,233Stock-based compensation expense 2,658 2,433 7,950 7,102Deferred income taxes 1,335 3,185 487 3,185Amortization of discount on short-term investments, net (669) 60 (2,113) (1,612)Gain on sale of short-term investments — — — (76)Loss on disposal of fixed assets 75 10 149 30Changes in assets and liabilities:Accounts receivable (64,181) 20,158 (144,780) (6,504)Inventories (21,504) (1,531) (83,032) (39,964)Prepaid expenses and other current assets (2,185) (712) (1,111) (4,854)Other non-current assets 426 (2,174) 1,066 (3,803)Accounts payable 35,177 8,537 74,505 11,905Accrued expenses and other liabilities 23,079 6,380 13,828 (485) Net cash provided by (used in) operating activities 9,723 64,149 (39,819) 38,020Cash Flows (used in) provided by Investing Activities:Purchases of short-term investments (55,505) (103,216) (161,155) (155,574)Proceeds from sale of short-term investments — — — 108,763Maturities of short-term investments 54,169 51,328 157,385 101,328Purchases of property and equipment (2,076) (1,870) (5,991) (5,201) Net cash (used in) provided by investing activities (3,412) (53,758) (9,761) 49,316Cash Flows used in Financing Activities:Proceeds from short-term borrowings — — — 732Repayment of short-term borrowings — — — (732)Purchase of common stock for treasury shares — (5,066) (2,481) (65,530)Payments for excise tax on purchase of common stock for treasuryshares — — (678) (36)Dividend payments (5,048) (3,799) (15,133) (11,519)Issuance of common stock under Employee Stock Purchase Plan — — 602 619Payment of payroll taxes on stock-based compensation through shareswithheld (383) (425) (1,354) (1,343)Net cash used in financing activities (5,431) (9,290) (19,044) (77,809)Increase (decrease) in cash and cash equivalents 880 1,101 (68,624) 9,527Cash and cash equivalents, beginning of period 123,717 186,744 193,221 178,318 Cash and cash equivalents, end of period $ 124,597 $ 187,845 $ 124,597 $ 187,845 Non-cash Investing and Financing Activities:Accrued purchases of property and equipment $ 534 $ 866 $ 534 $ 866Accrued purchase of treasury shares $ —$ 123 $ —$ 123Accrued excise tax on treasury purchases $ —$ 615 $ —$ 615
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EBITDA AND ADJUSTED EBITDA A reconciliation of EBITDA and Adjusted EBITDA to Net Income is detailed below. Adjusted EBITDA is defined as EBITDA (defined as earnings before interest, taxes, depreciation and amortization) adjusted for stock-based compensation, severance expenses and non-routine legal settlements. Both EBITDA and Adjusted EBITDA are considered non-GAAP financial measures. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position, or cash flows that either includes or excludes amounts that are not normally included or excluded in the most directly comparable measure calculated and presented in accordance with GAAP. We believe that EBITDA and Adjusted EBITDA provide helpful information with respect to our operating performance including our ability to fund our future capital expenditures and working capital requirements. Adjusted EBITDA also provides helpful information as it is the primary measure used in certain financial covenants contained in our credit agreement. When analyzing our operating performance, investors should use EBITDA and Adjusted EBITDA in addition to, and not as alternatives for Net income or any other performance measure presented in accordance with GAAP. Our non-GAAP financial measures may not be comparable to other similarly titled measures of other companies. Three Months Ended September 30, LTM Ended September 30, (1) (amounts in thousands) 2026 2025 % Change 2026 2025 % ChangeNet income $ 31,458 $ 24,740 27% $ 102,561 $ 83,731 22%Depreciation and amortization 2,640 2,888 (9) 11,023 12,019 (8)Income tax expense 11,989 9,215 30 37,173 30,145 23Interest income (2,515) (3,737) (33) (12,003) (15,638) (23)Interest expense 48 48 — 82 162 (49)EBITDA 43,620 33,154 32 138,836 110,419 26Severance expenses (2) — — — 6,143 2,930 110Stock-based compensation 2,658 2,433 9 10,191 9,381 9 Adjusted EBITDA $ 46,278 $ 35,587 30% $ 155,170 $ 122,730 26% (1) LTM: Last twelve months (2) Severance expenses and other charges in 2026 consisted of voluntary retirement offering and internal restructuring activitiesand in 2025 consisted of internal restructuring activities. ADJUSTED NET INCOME AND ADJUSTED DILUTED EARNINGS PER SHARE A reconciliation of Adjusted Net Income to Net Income is detailed below. Adjusted Net Income is defined as Net Income plus severance expenses, net of tax plus or minus loss or income from non-routine legal settlements. A reconciliation of Adjusted Diluted Earnings per Share to Diluted Earnings per Share is detailed below. Adjusted Diluted Earnings per Share is defined as diluted earnings per share adjusted for severance expenses, net of tax. Adjusted Net Income and Adjusted Diluted Earnings Per Share are considered non-GAAP financial measures (see note above in EBITDA and Adjusted EBITDA for a description of non-GAAP financial measures). The Company believes that Adjusted Net Income and Adjusted Diluted Earnings per Share provide helpful information with respect to the Company's operating performance. When analyzing our operating performance, investors should use Adjusted Net Income and Adjusted Diluted Earnings per Share in addition to, and not as alternatives for Net income and Diluted Earnings per Share or any other performance measure presented in accordance with GAAP. Our non-GAAP financial measures may not be comparable to other similarly titled measures of other companies. Three Months Ended September 30, Nine Months Ended September 30, (amounts in thousands, except per share data)2026 2025 % Change 2026 2025 % ChangeNet income $ 31,458 $ 24,740 27% $ 81,849 $ 63,010 30%Severance expenses (1) — — — 3,060 2,930 4Tax benefit — — — (835) (797) 5Adjusted Net Income 31,458 24,740 27 84,074 65,143 29Diluted shares 25,441 25,489 25,362 25,734 Diluted Earnings per Share $ 1.24 $ 0.97 28% $ 3.23 $ 2.45 32% Adjusted Diluted Earnings per Share $ 1.24 $ 0.97 28% $ 3.31 $ 2.53 31% (1) Severance expenses and other charges in 2026 consisted of voluntary retirement offering and internal restructuring activitiesand in 2025 consisted of internal restructuring activities.