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CLEARWATER, Fla., Aug 19, 2010 (GlobeNewswire via COMTEX) -- Tech Data Corporation (Nasdaq:TECD), a leading distributor of IT products, today announced results for the second quarter ended July 31, 2010.
Results At A Glance
-------------------------------------------------------------------------------------------
Three
months
ended Six months
Three July 31, ended
months 2009 Six months July 31,
ended (As ended 2009 (As
July 31, Adjusted) July 31, Adjusted)
($ in millions, except per share amounts) 2010 (1) 2010 (1)
---------------------------------------------- -------- --------- ---------- ----------
Net sales $5,474.0 $5,183.7 $11,095.0 $10,174.7
Operating income $65.8 $53.9 $135.2 $101.7
Operating income margin 1.20% 1.04% 1.22% 1.00%
Net income attributable to shareholders of
Tech Data Corporation $40.9 $35.2 $86.5 $66.9
Net income per diluted share attributable to
shareholders of Tech Data Corporation $0.82 $0.70 $1.70 $1.33
(1) Effective February 1, 2010, Tech Data Corporation reclassified certain foreign currency exchange gains or losses within the accompanying Consolidated Statement of Operations to "Cost of products sold." Historically, these gains and losses were reported as a separate component of Other (income) expense titled "Net foreign currency exchange loss (gain)." Management believes this revised presentation is more consistent with how the company manages and reports the underlying transactions giving rise to these foreign currency exchange gains and losses.
Net sales for the second quarter ended July 31, 2010, were $5.47 billion, an increase of 5.6 percent from $5.18 billion in the prior-year second quarter. The strengthening of the U.S. dollar against certain foreign currencies during the second quarter of fiscal 2011, compared to the same period of the prior year, negatively impacted the year-over-year net sales comparison by approximately 6 percentage points. Operating income for the second quarter grew 22.1 percent to $65.8 million, or 1.20 percent of net sales, compared to operating income of $53.9 million, or 1.04 percent of net sales in the prior-year second quarter. Second-quarter net income attributable to shareholders of Tech Data Corporation increased 16.2 percent to $40.9 million, or $0.82 per diluted share, compared to $35.2 million, or $0.70 per diluted share in the prior-year period.
"Our second-quarter results clearly demonstrate our strategic focus on improving profitability and return on capital employed through responsible growth, and by diversifying into more specialized offerings," said Robert M. Dutkowsky, chief executive officer, Tech Data Corporation. "Despite various macroeconomic uncertainties at the start of the quarter, the IT market grew at a good pace in both of our regions, allowing us to continue our focus on net revenue growth -- growing with select customers and vendors, while shifting away from less profitable, or more capital-consuming business. This strategy has served us exceptionally well for the last several quarters, significantly improving the quality of our vendor and customer portfolios, delivering select market share gains, meaningful operating margin expansion, record earnings, and industry-leading return on capital employed. Additionally, in the second quarter, we continued to put our strong balance sheet and excess cash to good use, announcing three acquisition agreements and buying back $170 million of stock under our share repurchase programs."
Second-Quarter Financial Highlights
Six-Month Results
Net sales for the six-month period ended July 31, 2010 were $11.09 billion, an increase of 9.0 percent from $10.17 billion for the six-month period ended July 31, 2009. The strengthening of the U.S. dollar against certain foreign currencies negatively impacted the year-over-year six-month period net sales comparison by approximately 1 percentage point. On a regional basis, the Americas represented 46 percent of net sales, and increased 9.9 percent to $5.06 billion from $4.61 billion for the prior-year period. Europe represented 54 percent of net sales, and increased 8.4 percent (11.9 percent on a euro basis) to $6.03 billion from $5.57 billion for the six-month period ended July 31, 2009.
For the six-month period ended July 31, 2010, the company recorded operating income of $135.2 million, or 1.22 percent of net sales, compared with operating income of $101.7 million, or 1.00 percent of net sales, in the prior-year period. The company recorded net income attributable to shareholders of Tech Data Corporation of $86.5 million, or $1.70 per diluted share, for the six-month period ended July 31, 2010. This compared to net income attributable to shareholders of Tech Data Corporation of $66.9 million, or $1.33 per diluted share, in the prior-year period.
Business Outlook
"As we look ahead to the third quarter, we expect demand trends to continue and sales to follow a seasonal pattern, allowing us to deliver year-over-year sales growth, on a local currency basis, in both regions. While we anticipate the impact of foreign currencies to have a more pronounced effect on the fiscal year's second-half results than the first half, we are confident that our continued focus on responsible growth and excellent expense and asset management, will deliver solid results for the remainder of the fiscal year, and keep us on the trajectory to achieve our longer-term financial objectives," said Dutkowsky.
Webcast Details
Tech Data will be discussing its second-quarter results on a conference call today at 9:00 a.m. ET. A webcast of the call, including supplemental schedules, will be available to all interested parties and can be accessed at www.techdata.com (Investor Relations section). The webcast will be available for replay until 5:00 p.m. ET on Thursday, August 26, 2010.
Forward-Looking Statements
Certain matters discussed in this news release are forward-looking statements, based on the company's current expectations that involve a number of risks and uncertainties. Factors that could cause actual results to differ materially include the following: downturns in the global economy; intense competition both domestically and internationally; narrow profit margins; dependence on information systems; potential adverse effects of acquisitions; exposure to natural disasters, war and terrorism; dependence on independent shipping companies; the impact of increases in freight and handling fees charged to customers; potential impact of labor strikes; risk of declines in inventory value; product supply and availability; changes in vendor terms and conditions; loss of significant customers; credit exposure due to the deterioration in the financial condition of our customers; the inability to obtain required capital; fluctuations in interest rates; foreign currency exchange risks and exposure to foreign markets; the impact of changes in income tax and other regulatory legislation; changes in accounting rules; and the volatility of common stock. Additional discussion of these and other factors affecting the company's business and prospects is contained in the company's periodic filings with the Securities and Exchange Commission, copies of which can be obtained at the company's Investor Relations website at www.techdata.com. All information in this release is as of August 19, 2010. The company undertakes no duty to update any forward-looking statements herein to actual results or changes in the company's expectations.
About Tech Data
Tech Data Corporation (Nasdaq:TECD) is one of the world's largest distributors of technology products from leading IT hardware and software producers. Tech Data serves more than 125,000 IT solution providers in over 100 countries. Every day, these value-added resellers depend on Tech Data to cost-effectively support the technology needs of end users, including small and medium businesses (SMB), large enterprises and government agencies. Ranked 109th on the FORTUNE 500®, Tech Data generated $22.1 billion in net sales for its fiscal year ended January 31, 2010. To learn more, visit www.techdata.com.
TECH DATA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
($ in thousands, except per share amounts)
Three months ended Six months ended
July 31, July 31,
---------------------- ------------------------
2009(1) 2009(1)
(As (As
2010 Adjusted) 2010 Adjusted)
Net sales $5,473,961 $5,183,731 $11,095,016 $10,174,690
Cost of products sold 5,186,424 4,914,657 10,514,676 9,644,401
---------- ---------- ----------- -----------
Gross profit 287,537 269,074 580,340 530,289
Selling, general and
administrative expenses 221,779 215,200 445,096 428,605
---------- ---------- ----------- -----------
Operating income 65,758 53,874 135,244 101,684
Interest expense 7,329 7,135 13,917 15,025
Other (income) expense, net (94) (412) (370) (1,872)
---------- ---------- ----------- -----------
Income before income taxes 58,523 47,151 121,697 88,531
Provision for income taxes 17,691 12,141 35,221 21,928
---------- ---------- ----------- -----------
Consolidated net income 40,832 35,010 86,476 66,603
Net loss attributable to
noncontrolling interest 23 147 12 319
---------- ---------- ----------- -----------
Net income attributable to
shareholders of Tech Data
Corporation $40,855 $35,157 $86,488 $66,922
========== ========== =========== ===========
Net income per common share
attributable to
shareholders of Tech Data
Corporation:
Basic $0.82 $0.70 $1.71 $1 33
Diluted $0.82 $0.70 $1.70 $1.33
Weighted average common shares
outstanding:
Basic 49,612 50,252 50,537 50,203
Diluted 49,986 50,461 51,012 50,352
(1) Effective February 1, 2010, Tech Data Corporation reclassified certain foreign currency exchange gains or losses within the accompanying Consolidated Statement of Operations to "Cost of products sold." Historically, these gains and losses were reported as a separate component of Other (income) expense titled "Net foreign currency exchange loss (gain)." Management believes this revised presentation is more consistent with how the company manages and reports the underlying transactions giving rise to these foreign currency exchange gains and losses.
TECH DATA CORPORATION AND
SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
($ in thousands)
January
July 31, 31,
2010 2010(1)
ASSETS (Unaudited)
----------- ----------
Current assets:
Cash and cash equivalents $940,058 $1,116,579
Accounts receivable, net 2,356,816 2,593,919
Inventories 1,782,822 1,704,658
Prepaid expenses and other
assets 155,714 156,448
----------- ----------
Total current assets 5,235,410 5,571,604
Property and equipment, net 83,535 90,634
Other assets, net 177,185 167,881
----------- ----------
Total assets $5,496,130 $5,830,119
=========== ==========
LIABILITIES AND EQUITY
Current liabilities:
Revolving credit loans $76,579 $65,384
Accounts payable 2,613,435 2,799,949
Accrued expenses and other
liabilities 455,264 455,841
----------- ----------
Total current liabilities 3,145,278 3,321,174
Long-term debt, net 342,612 338,157
Other long-term liabilities 76,414 76,255
----------- ----------
Total liabilities 3,564,304 3,735,586
----------- ----------
Equity attributable to
shareholders of Tech
Data Corporation 1,926,549 2,088,895
Noncontrolling interest 5,277 5,638
----------- ----------
Total equity 1,931,826 2,094,533
----------- ----------
Total liabilities and
equity $5,496,130 $5,830,119
=========== ==========
(1) Certain reclassifications have been made to the January 31, 2010 consolidated balance sheet to conform to the July 31, 2010 consolidated balance sheet presentation. Such reclassifications had no effect on previously reported equity.
TECH DATA CORPORATION AND SUBSIDIARIES
SUPPLEMENTARY INFORMATION (UNAUDITED)
($ in thousands)
Three months ended Three months ended
July 31, 2010 July 31, 2009(1)
-------------------- --------------------
Operating Operating Operating Operating
Operating Income by Segment Income Margin Income Margin
--------- --------- --------- ---------
Americas $44,580 1.72% $35,421 1.48%
Europe 23,838 0.83% 21,286 0.76%
Stock-based compensation (2,660) (2,833)
--------- (0.05)% --------- (0.05)%
Worldwide total $65,758 $53,874
========= 1.20% ========= 1.04%
Six months ended Six months ended
July 31, 2010 July 31, 2009(1)
-------------------- --------------------
Operating Operating Operating Operating
Operating Income by Segment Income Margin Income Margin
--------- --------- --------- ---------
Americas $88,870 1.76% $60,767 1.32%
Europe 51,483 0.85% 46,548 0.84%
Stock-based compensation (5,109) (5,631)
--------- (0.05)% --------- (0.06)%
Worldwide total $135,244 $101,684
========= 1.22% ========= 1.00%
(1) Effective February 1, 2010, Tech Data Corporation reclassified certain foreign currency exchange gains or losses within the accompanying Consolidated Statement of Operations to "Cost of products sold." Historically, these gains and losses were reported as a separate component of Other (income) expense titled "Net foreign currency exchange loss (gain)." Management believes this revised presentation is more consistent with how the company manages and reports the underlying transactions giving rise to these foreign currency exchange gains and losses.
This news release was distributed by GlobeNewswire, www.globenewswire.com
SOURCE: Tech Data Corporation
CONTACT: Tech Data Corporation
Jeffery P. Howells, Executive Vice President and Chief Financial Officer
727-538-7825
jeff.howells@techdata.com
Arleen Quinones, Director, Investor Relations
and Shareholder Services
727-532-8866
arleen.quinones@techdata.com
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