CLEARWATER, Fla.–(BUSINESS WIRE)–Tech Data (NASDAQ: TECD) (the “Company”) today announced its financial results for the third quarter ended October 31, 2019.
| Third quarter ended October 31, | Nine months ended October 31, | |||||
| ($ in millions, except per share amounts) |
2019 |
2018 |
Y/Y Change |
2019 |
2018 |
Y/Y Change |
| Net Sales |
$9,118.9 |
$9,340.0 |
-2% |
$26,617.6 |
$26,774.4 |
-1% |
|
|
|
|
|
|
|
|
| Gross profit |
$560.4 |
$556.6 |
1% |
$1,631.4 |
$1,606.8 |
2% |
| Gross margin |
6.15% |
5.96% |
19 bps |
6.13% |
6.00% |
13 bps |
|
|
|
|
|
|
|
|
| SG&A expenses (GAAP)* |
$415.2 |
$396.7 |
5% |
$1,252.8 |
$1,234.4 |
1% |
| % of net sales |
4.55% |
4.25% |
30 bps |
4.71% |
4.61% |
10 bps |
|
|
|
|
|
|
|
|
| SG&A expenses (Non-GAAP)* |
$394.1 |
$368.6 |
7% |
$1,189.0 |
$1,159.7 |
3% |
| % of net sales |
4.32% |
3.95% |
37 bps |
4.47% |
4.33% |
14 bps |
|
|
|
|
|
|
|
|
| Operating income (GAAP)* |
$141.9 |
$146.9 |
-3% |
$364.3 |
$327.7 |
11% |
| Operating margin (GAAP)* |
1.56% |
1.57% |
-1 bps |
1.37% |
1.22% |
15 bps |
|
|
|
|
|
|
|
|
| Operating income (Non-GAAP)* |
$166.3 |
$188.0 |
-12% |
$442.4 |
$447.0 |
-1% |
| Operating margin (Non-GAAP)* |
1.82% |
2.01% |
-19 bps |
1.66% |
1.67% |
-1 bps |
|
|
|
|
|
|
|
|
| Net income (GAAP)* |
$90.8 |
$114.2 |
-21% |
$225.4 |
$223.8 |
1% |
| Net income (Non-GAAP)* |
$108.8 |
$116.3 |
-6% |
$283.3 |
$264.8 |
7% |
|
|
|
|
|
|
|
|
| EPS – diluted (GAAP)* |
$2.52 |
$2.96 |
-15% |
$6.15 |
$5.80 |
6% |
| EPS – diluted (Non-GAAP)* |
$3.02 |
$3.02 |
0% |
$7.73 |
$6.87 |
13% |
* Third quarter ended October 31, 2018 includes a $25 million benefit ($18 million net of tax; $0.47 cents per diluted share) from the collection of an accounts receivable balance previously considered uncollectible.
A reconciliation of GAAP to non-GAAP financial measures is presented in the financial tables of this press release.
This information is also available on the Investor Relations section of Tech Data’s website at www.techdata.com/investor.
| Third quarter ended October 31, | Nine months ended October 31, | |||||
| ($ in millions) |
2019 |
2018 |
Y/Y |
2019 |
2018 |
Y/Y |
| AMERICAS |
|
|
|
|
|
|
| Net Sales |
$4,202.3 |
$4,137.9 |
2% |
$12,308.2 |
$11,799.4 |
4% |
| % of WW net sales |
46% |
44% |
|
46% |
44% |
|
|
|
|
|
|
|
|
|
| Operating income (GAAP)* |
$82.4 |
$112.4 |
-27% |
$244.1 |
$261.7 |
-7% |
| % of net sales |
1.96% |
2.72% |
-76 bps |
1.98% |
2.22% |
-24 bps |
|
|
|
|
|
|
|
|
| Operating income (Non-GAAP)* |
$99.4 |
$124.8 |
-20% |
$292.0 |
$306.1 |
-5% |
| % of net sales |
2.37% |
3.01% |
-64 bps |
2.37% |
2.59% |
-22 bps |
| EUROPE |
|
|
|
|
|
|
| Net Sales |
$4,622.3 |
$4,920.2 |
-6% |
$13,371.4 |
$14,131.0 |
-5% |
| % of WW net sales |
51% |
53% |
|
50% |
53% |
|
|
|
|
|
|
|
|
|
| Operating income (GAAP) |
$66.5 |
$39.9 |
67% |
$140.6 |
$86.3 |
63% |
| % of net sales |
1.44% |
0.81% |
63 bps |
1.05% |
0.61% |
44 bps |
|
|
|
|
|
|
|
|
| Operating income (Non-GAAP) |
$72.4 |
$66.2 |
9% |
$165.3 |
$154.1 |
7% |
| % of net sales |
1.57% |
1.34% |
23 bps |
1.24% |
1.09% |
15 bps |
| ASIA PACIFIC |
|
|
|
|
|
|
| Net Sales |
$294.4 |
$282.0 |
4% |
$938.0 |
$844.1 |
11% |
| % of WW net sales |
3% |
3% |
|
4% |
3% |
|
|
|
|
|
|
|
|
|
| Operating income (GAAP) |
$0.3 |
$2.7 |
-90% |
$3.2 |
$3.5 |
-7% |
| % of net sales |
0.09% |
0.97% |
-88 bps |
0.34% |
0.41% |
-7 bps |
|
|
|
|
|
|
|
|
| Operating income (Non-GAAP) |
$1.8 |
$4.6 |
-62% |
$8.8 |
$8.2 |
8% |
| % of net sales |
0.60% |
1.64% |
-104 bps |
0.94% |
0.97% |
-3 bps |
Regional Financial Highlights:
* Third quarter ended October 31, 2018 includes a $25 million benefit from the collection of an accounts receivable balance previously considered uncollectible.
Note: WW = worldwide
Stock-based compensation expense was $7.3 million, a decrease of $0.8 million, compared to the prior-year quarter. These expenses are excluded from the regional operating results and presented as a separate line item in the company’s segment reporting (see the GAAP to non-GAAP reconciliation in the financial tables of this press release).
“We delivered solid third quarter results while continuing to execute on our strategy and portfolio optimization actions,” said Rich Hume, chief executive officer. “In Q3, we also announced our intention to acquire DLT Solutions, a premier software and cloud solutions aggregator focused on the U.S. public sector. This acquisition reflects our strategy of delivering higher value – strengthening our end-to-end portfolio and accelerating our capabilities in next-generation technologies.”
Subsequent Events
On November 13, 2019, Tech Data announced it had entered into a definitive agreement (the “Merger Agreement”) to be acquired by Tiger Midco, LLC, an affiliate of funds managed by affiliates of Apollo Global Management, Inc. (NYSE: APO), a leading global alternative investment manager (“Apollo”). The Merger Agreement provides that Tiger Midco, LLC will acquire all of the outstanding shares of Tech Data common stock for $130 per share in cash. Tech Data filed a Current Report on Form 8-K on November 13, 2019 providing further information with respect to the Merger Agreement. As previously announced, due to the pending acquisition by affiliates of the Apollo Funds, Tech Data does not plan to host an earnings conference call nor provide forward-looking guidance.
Non-GAAP Financial Information
The non-GAAP financial information contained in this release is included with the intention of providing investors a more complete understanding of the Company’s operational results and trends, but should only be used in conjunction with results reported in accordance with Generally Accepted Accounting Principles (“GAAP”). Certain non-GAAP measures presented in this release or other releases, presentations and similar documents issued by the Company include sales, income or expense items as adjusted for the impact of changes in foreign currencies (referred to as “constant currency”), non-GAAP operating income, non-GAAP operating margin, non-GAAP net income, non-GAAP earnings per diluted share and Adjusted Return on Invested Capital. Certain non-GAAP measures also exclude acquisition-related intangible assets amortization expense, benefits associated with legal settlements, acquisition, integration and restructuring expenses, value-added tax assessments and related interest expense, gain on disposal of subsidiary, tax indemnifications, changes in deferred tax valuation allowances and the impact of U.S. tax reform. A detailed reconciliation of the adjustments between results calculated using GAAP and non-GAAP in this release is contained in the attached financial schedules. This information can also be obtained from the Company’s Investor Relations website at www.techdata.com/investor.
Forward-Looking Statements
This communication includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
Such forward-looking statements are inherently uncertain, and shareholders and other potential investors must recognize that actual results may differ materially from Tech Data’s expectations as a result of a variety of factors. Such forward-looking statements are based upon management’s current expectations and include known and unknown risks, uncertainties and other factors, many of which Tech Data is unable to predict or control, that may cause Tech Data’s actual results, performance, or plans to differ materially from any future results, performance or plans expressed or implied by such forward-looking statements. Risks and uncertainties related to the proposed merger include, but are not limited to, the occurrence of any event, change or other circumstance that could give rise to the termination of the merger agreement; the failure of the parties to satisfy conditions to completion of the proposed merger, including the failure of Tech Data’s shareholders to approve the proposed merger or the failure of the parties to obtain required regulatory approvals; the risk that regulatory or other approvals are delayed or are subject to terms and conditions that are not anticipated; and the risks, uncertainties, and other factors detailed from time to time in Tech Data’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed or furnished with the Securities and Exchange Commission (the “SEC”).
Many of these factors are beyond Tech Data’s control. Tech Data cautions investors that any forward-looking statements made by Tech Data are not guarantees of future performance. Tech Data disclaims any obligation to update any such factors or to announce publicly the results of any revisions to any of the forward-looking statements to reflect future events or developments.
No Offer or Solicitation
This communication shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities, in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.
About Tech Data
Tech Data connects the world with the power of technology. Our end-to-end portfolio of products, services and solutions, highly specialized skills, and expertise in next-generation technologies enable channel partners to bring to market the products and solutions the world needs to connect, grow and advance. Tech Data is ranked No. 88 on the Fortune 500® and has been named one of Fortune’s World’s Most Admired Companies for 10 straight years. To find out more, visit www.techdata.com or follow us on Twitter, LinkedIn, Facebook and Instagram.
|
TECH DATA CORPORATION AND SUBSIDIARIES |
|||||||||||||||
|
CONSOLIDATED STATEMENT OF OPERATIONS |
|||||||||||||||
| (In thousands, except per share amounts) | |||||||||||||||
|
(Unaudited) |
|||||||||||||||
| Three months ended October 31, | Nine months ended October 31, | ||||||||||||||
|
2019 |
2018 |
2019 |
2018 |
||||||||||||
| Net sales |
$ |
9,118,944 |
|
$ |
9,340,029 |
|
$ |
26,617,612 |
|
$ |
26,774,449 |
|
|||
| Cost of products sold |
|
8,558,557 |
|
|
8,783,425 |
|
|
24,986,196 |
|
|
25,167,698 |
|
|||
| Gross profit |
|
560,387 |
|
|
556,604 |
|
|
1,631,416 |
|
|
1,606,751 |
|
|||
| Operating expenses: | |||||||||||||||
| Selling, general and administrative expenses |
|
415,242 |
|
|
396,675 |
|
|
1,252,752 |
|
|
1,234,355 |
|
|||
| Acquisition, integration, and restructuring expenses |
|
4,647 |
|
|
20,277 |
|
|
16,077 |
|
|
66,799 |
|
|||
| Legal settlements and other, net |
— |
|
(7,207 |
) |
|
(282 |
) |
|
(15,406 |
) |
|||||
| Gain on disposal of subsidiary |
|
(1,390 |
) |
|
(29 |
) |
|
(1,390 |
) |
|
(6,746 |
) |
|||
|
|
418,499 |
|
|
409,716 |
|
|
1,267,157 |
|
|
1,279,002 |
|
||||
| Operating income |
|
141,888 |
|
|
146,888 |
|
|
364,259 |
|
|
327,749 |
|
|||
| Interest expense |
|
21,033 |
|
|
25,405 |
|
|
68,276 |
|
|
79,380 |
|
|||
| Other expense, net |
|
4,348 |
|
|
4,961 |
|
|
6,551 |
|
|
7,779 |
|
|||
| Income before income taxes |
|
116,507 |
|
|
116,522 |
|
|
289,432 |
|
|
240,590 |
|
|||
| Provision for income taxes |
|
25,737 |
|
|
2,306 |
|
|
64,012 |
|
|
16,809 |
|
|||
| Net income |
$ |
90,770 |
|
$ |
114,216 |
|
$ |
225,420 |
|
$ |
223,781 |
|
|||
| Earnings per share: | |||||||||||||||
| Basic |
$ |
2.54 |
|
$ |
2.98 |
|
$ |
6.19 |
|
$ |
5.83 |
|
|||
| Diluted |
$ |
2.52 |
|
$ |
2.96 |
|
$ |
6.15 |
|
$ |
5.80 |
|
|||
| Weighted average common shares outstanding: | |||||||||||||||
| Basic |
|
35,720 |
|
|
38,358 |
|
|
36,395 |
|
|
38,357 |
|
|||
| Diluted |
|
35,968 |
|
|
38,526 |
|
|
36,630 |
|
|
38,559 |
||||
|
TECH DATA CORPORATION AND SUBSIDIARIES |
||||||||
|
CONSOLIDATED BALANCE SHEET |
||||||||
|
(In thousands, except par value and share amounts) |
||||||||
| October 31, | January 31, | |||||||
|
2019 |
2019 |
|||||||
| ASSETS | (unaudited) | |||||||
| Current assets: | ||||||||
| Cash and cash equivalents |
$ |
964,146 |
|
$ |
799,123 |
|
||
| Accounts receivable, net |
|
5,768,940 |
|
|
6,241,740 |
|
||
| Inventories |
|
3,145,381 |
|
|
3,297,385 |
|
||
| Prepaid expenses and other assets |
|
341,075 |
|
|
354,601 |
|
||
| Total current assets |
|
10,219,542 |
|
|
10,692,849 |
|
||
| Property and equipment, net |
|
275,013 |
|
|
274,917 |
|
||
| Goodwill |
|
888,165 |
|
|
892,990 |
|
||
| Intangible assets, net |
|
884,560 |
|
|
950,858 |
|
||
| Other assets, net |
|
427,456 |
|
|
174,938 |
|
||
| Total assets |
$ |
12,694,736 |
|
$ |
12,986,552 |
|
||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable |
$ |
6,963,941 |
|
$ |
7,496,466 |
|
||
| Accrued expenses and other liabilities |
|
1,030,457 |
|
|
1,000,126 |
|
||
| Revolving credit loans and current maturities of long-term debt, net |
|
123,271 |
|
|
110,368 |
|
||
| Total current liabilities |
|
8,117,669 |
|
|
8,606,960 |
|
||
| Long-term debt, less current maturities |
|
1,294,186 |
|
|
1,300,554 |
|
||
| Other long-term liabilities |
|
314,596 |
|
|
142,315 |
|
||
| Total liabilities |
$ |
9,726,451 |
|
$ |
10,049,829 |
|
||
| Shareholders’ equity: | ||||||||
| Common stock, par value $0.0015; 200,000,000 shares authorized; 59,245,585 shares issued at October 31, 2019 and January 31, 2019 |
$ |
89 |
|
$ |
89 |
|
||
| Additional paid-in capital |
|
846,636 |
|
|
844,206 |
|
||
| Treasury stock, at cost (23,798,037 and 22,305,464 shares at October 31, 2019 | ||||||||
| and January 31, 2019) |
|
(1,195,148 |
) |
|
(1,037,872 |
) |
||
| Retained earnings |
|
3,311,934 |
|
|
3,086,514 |
|
||
| Accumulated other comprehensive income |
|
4,774 |
|
|
43,786 |
|
||
| Total shareholders’ equity |
|
2,968,285 |
|
|
2,936,723 |
|
||
| Total liabilities and shareholders’ equity |
$ |
12,694,736 |
|
$ |
12,986,552 |
|||
|
TECH DATA CORPORATION AND SUBSIDIARIES |
|||||||
|
CONSOLIDATED STATEMENT OF CASH FLOWS |
|||||||
|
(In thousands) |
|||||||
|
(Unaudited) |
|||||||
| Nine months ended October 31, | |||||||
|
2019 |
2018 |
||||||
| Cash flows from operating activities: | |||||||
| Cash received from customers |
$ |
35,335,867 |
|
$ |
34,190,821 |
|
|
| Cash paid to vendors and employees |
|
(34,774,608 |
) |
|
(33,891,567 |
) |
|
| Interest paid, net |
|
(79,482 |
) |
|
(82,829 |
) |
|
| Income taxes paid |
|
(69,174 |
) |
|
(67,107 |
) |
|
| Net cash provided by operating activities |
|
412,603 |
|
|
149,318 |
|
|
| Cash flows from investing activities: | |||||||
| Proceeds from sale of business, net of cash divested |
— |
|
8,985 |
|
|||
| Acquisition of businesses, net of cash acquired |
— |
|
(124,223 |
) |
|||
| Expenditures for property and equipment |
|
(30,503 |
) |
|
(24,830 |
) |
|
| Software and software development costs |
|
(21,147 |
) |
|
(15,323 |
) |
|
| Other |
|
315 |
|
|
1,105 |
|
|
| Net cash used in investing activities |
|
(51,335 |
) |
|
(154,286 |
) |
|
| Cash flows from financing activities: | |||||||
| Borrowings on long-term debt |
|
300,000 |
|
— |
|||
| Principal payments on long-term debt |
|
(311,925 |
) |
|
(207,854 |
) |
|
| Cash paid for debt issuance costs |
|
(4,341 |
) |
— |
|||
| Net borrowings (repayments) on revolving credit loans |
|
15,035 |
|
|
(9,274 |
) |
|
| Payments for employee tax withholdings on equity awards |
|
(9,337 |
) |
|
(6,988 |
) |
|
| Proceeds from the reissuance of treasury stock |
|
1,450 |
|
|
1,322 |
|
|
| Acquisition of noncontrolling interest |
|
(7,553 |
) |
— |
|||
| Repurchases of common stock |
|
(166,992 |
) |
|
(43,798 |
) |
|
| Other |
|
529 |
|
— |
|||
| Net cash used in financing activities |
|
(183,134 |
) |
|
(266,592 |
) |
|
| Effect of exchange rate changes on cash and cash equivalents |
|
(13,111 |
) |
|
(37,589 |
) |
|
| Net increase (decrease) in cash and cash equivalents |
|
165,023 |
|
|
(309,149 |
) |
|
| Cash and cash equivalents at beginning of year |
|
799,123 |
|
|
955,628 |
|
|
| Cash and cash equivalents at end of period |
$ |
964,146 |
|
$ |
646,479 |
|
|
| Reconciliation of net income to net cash provided by operating activities: | |||||||
| Net income |
$ |
225,420 |
|
$ |
223,781 |
|
|
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
| Gain on disposal of subsidiary |
|
(1,390 |
) |
|
(6,746 |
) |
|
| Depreciation and amortization |
|
112,726 |
|
|
119,641 |
|
|
| Provision for losses on accounts receivable |
|
19,176 |
|
|
11,545 |
|
|
| Stock-based compensation expense |
|
23,707 |
|
|
23,694 |
|
|
| Accretion of debt discount and debt issuance costs |
|
3,195 |
|
|
2,983 |
|
|
| Deferred income taxes |
|
4,577 |
|
|
(11,567 |
) |
|
| Changes in operating assets and liabilities, net of acquisitions and disposition: | |||||||
| Accounts receivable |
|
372,594 |
|
|
(309,390 |
) |
|
| Inventories |
|
113,168 |
|
|
(397,692 |
) |
|
| Prepaid expenses and other assets |
|
38,991 |
|
|
(3,720 |
) |
|
| Accounts payable |
|
(443,413 |
) |
|
474,214 |
|
|
| Accrued expenses and other liabilities |
|
(56,148 |
) |
|
22,575 |
|
|
| Total adjustments |
|
187,183 |
|
|
(74,463 |
) |
|
| Net cash provided by operating activities |
$ |
412,603 |
|
$ |
149,318 |
||
|
TECH DATA CORPORATION AND SUBSIDIARIES |
|||||||||||||||||||
|
GAAP TO NON-GAAP RECONCILIATION |
|||||||||||||||||||
|
(In thousands) |
|||||||||||||||||||
|
Three months ended October 31, 2019 |
|||||||||||||||||||
|
Americas(1) |
Europe (1) |
Asia Pacific (1) |
Stock Compensation Expense |
Consolidated | |||||||||||||||
| Net Sales |
$ |
4,202,320 |
|
$ |
4,622,270 |
|
$ |
294,354 |
|
$ |
9,118,944 |
|
|||||||
| Operating income (GAAP) (1) |
$ |
82,420 |
|
$ |
66,536 |
|
$ |
279 |
|
$ |
(7,347 |
) |
$ |
141,888 |
|
||||
| Acquisition, integration and restructuring expenses |
|
3,551 |
|
|
975 |
|
|
121 |
|
|
– |
|
|
4,647 |
|
||||
| Acquisition-related intangible assets amortization expense |
|
13,438 |
|
|
6,312 |
|
|
1,294 |
|
|
21,044 |
|
|||||||
| Gain on disposal of subsidiary |
|
– |
|
|
(1,390 |
) |
|
– |
|
|
(1,390 |
) |
|||||||
| Tax indemnifications |
|
– |
|
|
– |
|
|
62 |
|
|
62 |
|
|||||||
| Total non-GAAP operating income adjustments |
$ |
16,989 |
|
$ |
5,897 |
|
$ |
1,477 |
|
$ |
– |
|
$ |
24,363 |
|
||||
| Operating income (non-GAAP) |
$ |
99,409 |
|
$ |
72,433 |
|
$ |
1,756 |
|
$ |
(7,347 |
) |
$ |
166,251 |
|
||||
| Operating margin (GAAP) |
|
1.96 |
% |
|
1.44 |
% |
|
0.09 |
% |
|
1.56 |
% |
|||||||
| Operating margin (non-GAAP) |
|
2.37 |
% |
|
1.57 |
% |
|
0.60 |
% |
|
1.82 |
% |
|||||||
| (1) GAAP operating income does not include stock compensation expense at the regional level. | |||||||||||||||||||
|
Three months ended October 31, 2018 |
|||||||||||||||||||
|
|
Americas (1) | Europe (1) | Asia Pacific (1) | Stock Compensation Expense |
Consolidated | ||||||||||||||
| Net Sales |
$ |
4,137,852 |
|
$ |
4,920,156 |
|
$ |
282,021 |
|
$ |
9,340,029 |
|
|||||||
| Operating income (GAAP) (1) |
$ |
112,399 |
|
$ |
39,889 |
|
$ |
2,739 |
|
$ |
(8,139 |
) |
$ |
146,888 |
|
||||
| Acquisition, integration and restructuring expenses |
|
5,989 |
|
|
13,132 |
|
|
578 |
|
|
578 |
|
|
20,277 |
|
||||
| Legal settlements and other, net |
|
(7,207 |
) |
|
– |
|
|
– |
|
|
(7,207 |
) |
|||||||
| Acquisition-related intangible assets amortization expense |
|
13,569 |
|
|
7,640 |
|
|
1,314 |
|
|
22,523 |
|
|||||||
| Gain on disposal of subsidiary |
|
– |
|
|
(29 |
) |
|
– |
|
|
(29 |
) |
|||||||
| Tax indemnifications |
|
– |
|
|
5,541 |
|
|
– |
|
|
5,541 |
|
|||||||
| Total non-GAAP operating income adjustments |
$ |
12,351 |
|
$ |
26,284 |
|
$ |
1,892 |
|
$ |
578 |
|
$ |
41,105 |
|
||||
| Operating income (non-GAAP) |
$ |
124,750 |
|
$ |
66,173 |
|
$ |
4,631 |
|
$ |
(7,561 |
) |
$ |
187,993 |
|
||||
| Operating margin (GAAP) |
|
2.72 |
% |
|
0.81 |
% |
|
0.97 |
% |
|
1.57 |
% |
|||||||
| Operating margin (non-GAAP) |
|
3.01 |
% |
|
1.34 |
% |
|
1.64 |
% |
|
2.01 |
% |
|||||||
| (1) GAAP operating income does not include stock compensation expense at the regional level. | |||||||||||||||||||
|
TECH DATA CORPORATION AND SUBSIDIARIES |
|||||||||||||||||||
|
GAAP TO NON-GAAP RECONCILIATION |
|||||||||||||||||||
|
(In thousands) |
|||||||||||||||||||
|
Nine months ended October 31, 2019 |
|||||||||||||||||||
| Americas (1) | Europe (1) | Asia Pacific (1) | Stock Compensation Expense |
Consolidated | |||||||||||||||
| Net Sales |
$ |
12,308,249 |
|
$ |
13,371,397 |
|
$ |
937,966 |
|
$ |
26,617,612 |
|
|||||||
| Operating income (GAAP) (1) |
$ |
244,138 |
|
$ |
140,605 |
|
$ |
3,223 |
|
$ |
(23,707 |
) |
$ |
364,259 |
|
||||
| Acquisition, integration and restructuring expenses |
|
7,803 |
|
|
7,228 |
|
|
1,046 |
|
|
– |
|
|
16,077 |
|
||||
| Legal settlements and other, net |
|
(282 |
) |
|
– |
|
|
– |
|
|
(282 |
) |
|||||||
| Acquisition-related intangible assets amortization expense |
|
40,318 |
|
|
18,857 |
|
|
3,930 |
|
|
63,105 |
|
|||||||
| Gain on disposal of subsidiary |
|
– |
|
|
(1,390 |
) |
|
– |
|
|
(1,390 |
) |
|||||||
| Tax indemnifications |
|
– |
|
|
– |
|
|
647 |
|
|
647 |
|
|||||||
| Total non-GAAP operating income adjustments |
$ |
47,839 |
|
$ |
24,695 |
|
$ |
5,623 |
|
$ |
– |
|
$ |
78,157 |
|
||||
| Operating income (non-GAAP) |
$ |
291,977 |
|
$ |
165,300 |
|
$ |
8,846 |
|
$ |
(23,707 |
) |
$ |
442,416 |
|
||||
| Operating margin (GAAP) |
|
1.98 |
% |
|
1.05 |
% |
|
0.34 |
% |
|
1.37 |
% |
|||||||
| Operating margin (non-GAAP) |
|
2.37 |
% |
|
1.24 |
% |
|
0.94 |
% |
|
1.66 |
% |
|||||||
| (1) GAAP operating income does not include stock compensation expense at the regional level. | |||||||||||||||||||
|
Nine months ended October 31, 2018 |
|||||||||||||||||||
| Americas (1) | Europe (1) | Asia Pacific (1) | Stock Compensation Expense |
Consolidated | |||||||||||||||
| Net Sales |
$ |
11,799,389 |
|
$ |
14,130,985 |
|
$ |
844,075 |
|
$ |
26,774,449 |
|
|||||||
| Operating income (GAAP) (1) |
$ |
261,671 |
|
$ |
86,292 |
|
$ |
3,480 |
|
$ |
(23,694 |
) |
$ |
327,749 |
|
||||
| Acquisition, integration and restructuring expenses |
|
19,061 |
|
|
44,462 |
|
|
1,030 |
|
|
2,246 |
|
|
66,799 |
|
||||
| Legal settlements and other, net |
|
(15,406 |
) |
|
– |
|
|
– |
|
|
(15,406 |
) |
|||||||
| Acquisition-related intangible assets amortization expense |
|
40,782 |
|
|
23,696 |
|
|
4,064 |
|
|
68,542 |
|
|||||||
| Gain on disposal of subsidiary |
|
– |
|
|
(6,746 |
) |
|
– |
|
|
(6,746 |
) |
|||||||
| Tax indemnifications |
|
– |
|
|
6,451 |
|
|
(356 |
) |
|
6,095 |
|
|||||||
| Total non-GAAP operating income adjustments |
$ |
44,437 |
|
$ |
67,863 |
|
$ |
4,738 |
|
$ |
2,246 |
|
$ |
119,284 |
|
||||
| Operating income (non-GAAP) |
$ |
306,108 |
|
$ |
154,155 |
|
$ |
8,218 |
|
$ |
(21,448 |
) |
$ |
447,033 |
|
||||
| Operating margin (GAAP) |
|
2.22 |
% |
|
0.61 |
% |
|
0.41 |
% |
|
1.22 |
% |
|||||||
| Operating margin (non-GAAP) |
|
2.59 |
% |
|
1.09 |
% |
|
0.97 |
% |
|
1.67 |
% |
|||||||
| (1) GAAP operating income does not include stock compensation expense at the regional level. | |||||||||||||||||||
|
TECH DATA CORPORATION AND SUBSIDIARIES |
|||||||||
|
GAAP TO NON-GAAP RECONCILIATION |
|||||||||
|
(In thousands) |
|||||||||
| Selling, general and administrative expenses (“SG&A”) | Three months ended October 31, | ||||||||
|
2019 |
2018 |
||||||||
| Net Sales |
$ |
9,118,944 |
|
$ |
9,340,029 |
|
|||
| SG&A Expenses (GAAP) |
$ |
415,242 |
|
$ |
396,675 |
|
|||
| Tax indemnifications |
|
(62 |
) |
|
(5,541 |
) |
|||
| Acquisition-related intangible assets amortization expense |
|
(21,044 |
) |
|
(22,523 |
) |
|||
| SG&A Expenses (non-GAAP) |
$ |
394,136 |
|
$ |
368,611 |
|
|||
| SG&A Expenses (GAAP) % |
|
4.55 |
% |
|
4.25 |
% |
|||
| SG&A Expenses (non-GAAP) % |
|
4.32 |
% |
|
3.95 |
% |
|||
| Nine months ended October 31, | |||||||||
|
2019 |
2018 |
||||||||
| Net Sales |
$ |
26,617,612 |
|
$ |
26,774,449 |
|
|||
| SG&A Expenses (GAAP) |
$ |
1,252,752 |
|
$ |
1,234,355 |
|
|||
| Tax indemnifications |
|
(647 |
) |
|
(6,095 |
) |
|||
| Acquisition-related intangible assets amortization expense |
|
(63,105 |
) |
|
(68,542 |
) |
|||
| SG&A Expenses (non-GAAP) |
$ |
1,189,000 |
|
$ |
1,159,718 |
|
|||
| SG&A Expenses (GAAP) % |
|
4.71 |
% |
|
4.61 |
% |
|||
| SG&A Expenses (non-GAAP) % |
|
4.47 |
% |
|
4.33 |
% |
|||
|
TECH DATA CORPORATION AND SUBSIDIARIES |
||||||||
|
GAAP TO NON-GAAP RECONCILIATION |
||||||||
|
(In thousands) |
||||||||
| Three months ended October 31, | ||||||||
|
2019 |
2018 |
|||||||
| Net Income | Diluted EPS | Net Income | Diluted EPS | |||||
| GAAP Results |
$90,770 |
|
$2.52 |
|
$114,216 |
|
$2.96 |
|
| Acquisition, integration and restructuring expenses |
4,647 |
|
0.13 |
|
20,277 |
|
0.53 |
|
| Legal settlements and other, net |
– |
|
– |
|
(7,207) |
|
(0.19) |
|
| Acquisition-related intangible assets amortization expense |
21,044 |
|
0.59 |
|
22,523 |
|
0.58 |
|
| Gain on disposal of subsidiary |
(1,390) |
|
(0.04) |
|
(29) |
|
– |
|
| Tax indemnifications |
62 |
|
– |
|
5,541 |
|
0.14 |
|
| Income tax effect of tax indemnifications |
(62) |
|
– |
|
(5,541) |
|
(0.14) |
|
| Income tax effect of other adjustments above |
(6,306) |
|
(0.18) |
|
(8,798) |
|
(0.23) |
|
| Income tax benefit from acquisition settlement |
– |
|
– |
|
(207) |
|
– |
|
| Change in deferred tax valuation allowances |
– |
|
– |
|
(473) |
|
(0.01) |
|
| Impact of US tax reform |
– |
|
– |
|
(24,000) |
|
(0.62) |
|
|
|
|
|
|
|
|
|
||
| Non-GAAP Results |
$108,765 |
|
$3.02 |
|
$116,302 |
|
$3.02 |
|
| Nine months ended October 31, | ||||||||
|
2019 |
2018 |
|||||||
| Net Income | Diluted EPS | Net Income | Diluted EPS | |||||
| GAAP Results |
$225,420 |
|
$6.15 |
|
$223,781 |
|
$5.80 |
|
| Acquisition, integration and restructuring expenses |
16,077 |
|
0.44 |
|
66,799 |
|
1.73 |
|
| Legal settlements and other, net |
(282) |
|
(0.01) |
|
(15,406) |
|
(0.40) |
|
| Acquisition-related intangible assets amortization expense |
63,105 |
|
1.72 |
|
68,542 |
|
1.78 |
|
| Gain on disposal of subsidiary |
(1,390) |
|
(0.04) |
|
(6,746) |
|
(0.17) |
|
| Tax indemnifications |
647 |
|
0.02 |
|
6,095 |
|
0.16 |
|
| Value added tax assessments and related interest expense |
– |
|
– |
|
(928) |
|
(0.02) |
|
| Income tax effect of tax indemnifications |
(647) |
|
(0.02) |
|
(6,095) |
|
(0.16) |
|
| Income tax effect of other adjustments above |
(19,642) |
|
(0.53) |
|
(31,110) |
|
(0.81) |
|
| Income tax benefit from acquisition settlement |
– |
|
– |
|
(13,046) |
|
(0.34) |
|
| Change in deferred tax valuation allowances |
– |
|
– |
|
(3,073) |
|
(0.08) |
|
| Impact of US tax reform |
– |
|
– |
|
(24,000) |
|
(0.62) |
|
| Non-GAAP Results |
$283,288 |
$7.73 |
$264,813 |
$6.87 |
||||
| TECH DATA CORPORATION AND SUBSIDIARIES | ||||||||
| GAAP TO NON-GAAP RECONCILIATION | ||||||||
|
(In thousands) |
||||||||
| Return on Invested Capital (ROIC) | ||||||||
| Twelve months ended October 31, | ||||||||
| TTM Net Operating Profit After Tax (NOPAT)*: |
2019 |
2018 |
||||||
| Operating income |
$ |
530,312 |
|
$ |
479,652 |
|
||
| Income taxes on operating income (1) |
|
(100,387 |
) |
|
(184,189 |
) |
||
| NOPAT |
$ |
429,925 |
|
$ |
295,463 |
|
||
| Average Invested Capital: | ||||||||
| Short-term debt (5-qtr end average) |
$ |
119,103 |
|
$ |
117,542 |
|
||
| Long-term debt (5-qtr end average) |
|
1,298,291 |
|
|
1,504,148 |
|
||
| Shareholders’ Equity (5-qtr end average) |
|
2,909,665 |
|
|
2,840,505 |
|
||
| Total average capital |
|
4,327,059 |
|
|
4,462,195 |
|
||
| Less: Cash (5-qtr end average) |
|
(789,103 |
) |
|
(660,638 |
) |
||
| Average invested capital less average cash |
$ |
3,537,956 |
|
$ |
3,801,557 |
|
||
| ROIC |
|
12 |
% |
|
8 |
% |
||
| * Trailing Twelve Months is abbreviated as TTM. | ||||||||
| (1) Income taxes on operating income was calculated using the trailing twelve months effective tax rate. | ||||||||
Contacts
Investor Contact
Tania Almond
Investor Relations Director
+1 727.538.7064
tania.almond@techdata.com
Media Contact
Bobby Eagle
Director, External Communications
+1 727.538.5864
bobby.eagle@techdata.com
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