Sales, Net Income and Earnings Per Diluted Share Reach Record Third-Quarter Levels
Company Completes Another $100 Million Share Repurchase Program
CLEARWATER, Fla., Nov. 21, 2011 (GLOBE NEWSWIRE) -- Tech Data Corporation (Nasdaq:TECD), a leading distributor of IT products, today announced results for the third quarter ended October 31, 2011.
| Results At A Glance | ||||
| ($ in millions, except per share amounts) |
Three months ended October 31, 2011 |
Three months ended October 31, 2010 |
Nine months ended October 31, 2011 |
Nine months ended October 31, 2010 |
| Net sales | $6,594.0 | $6,163.8 | $19,375.6 | $17,258.8 |
| Operating income | $89.6 | $81.0 | $244.0 | $216.2 |
| Operating income margin | 1.36% | 1.31% | 1.26% | 1.25% |
| Net income attributable to shareholders of Tech Data Corporation | $53.5 | $50.5 | $152.3 | $136.9 |
| Net income per diluted share attributable to shareholders of Tech Data Corporation | $1.26 | $1.07 | $3.37 | $2.76 |
Net sales for the third quarter ended October 31, 2011, were $6.59 billion, an increase of 7 percent from $6.16 billion in the prior-year third quarter. The strengthening of certain foreign currencies against the U.S. dollar, compared to the same period of the prior year, positively impacted the year-over-year net sales comparison by approximately 3 percentage points. Sequentially, net sales for the third quarter ended October 31, 2011, increased 2 percent over the second quarter. Weaker foreign currencies during the third quarter negatively impacted the sequential growth by approximately 2 percentage points.
Operating income for the third quarter was $89.6 million, or 1.36 percent of net sales. This compared to operating income of $81.0 million, or 1.31 percent of net sales in the prior-year third quarter. Third-quarter net income attributable to shareholders of Tech Data Corporation increased 6 percent to $53.5 million, or $1.26 per diluted share compared to $50.5 million, or $1.07 per diluted share for the prior-year period.
"Tech Data posted record third-quarter results despite some very challenging market conditions," said Robert M. Dutkowsky, chief executive officer, Tech Data Corporation. "Demonstrating the resiliency of our business model, our teams in both regions successfully navigated a moderating demand environment - selecting pockets of opportunity and delivering year-over-year sales and earnings growth. Our performance this quarter demonstrates once again how our strategic focus on execution, innovation and diversification has strengthened our value proposition in the marketplace and helped deliver improved results throughout the up and down cycles. The completion of another $100 million in share repurchases during the quarter contributed to our 12th consecutive quarter of double-digit earnings per share growth and brought our cumulative share repurchases to $900 million since 2005. In addition, for the last 12 months, we have generated return on invested capital of 15 percent, strongly reinforcing our commitment to shareholder value creation."
Third-Quarter Financial Highlights
- Net sales in the Americas (including North America and Latin America) were $2.78 billion, or 42 percent of worldwide net sales, representing an increase of 3 percent over the prior-year third quarter. Net sales in Europe totaled $3.81 billion, or 58 percent of worldwide net sales, representing an increase of 10 percent (6 percent increase on a euro basis) over the prior-year third quarter.
- Gross margin for the third quarter was 5.23 percent compared to 5.26 percent in the prior-year third quarter.
- Selling, general and administrative expenses (SG&A) were $255.2 million, or 3.87 percent of net sales compared to $243.2 million, or 3.95 percent of net sales in the prior-year third quarter.The increase in SG&A expenses, on a dollar basis, was primarily attributable to costs to support growth and the impact of stronger foreign currencies. As a percentage of net sales, however, SG&A declined 8 basis points year-over-year due to leverage achieved on higher sales.
- Operating income in the Americas for the third quarter was $52.6 million, or 1.89 percent of net sales compared to $46.1 million, or 1.71 percent of net sales in the prior-year third quarter. In Europe, the company generated operating income of $39.7 million, or 1.04 percent of net sales compared to operating income of $37.1 million, or 1.07 percent of net sales in the prior-year third quarter. Stock-based compensation expense is not included in the regional segment reporting results. This expense is presented as a separate line item in the company's segment reporting (see "Supplementary Information" table attached).
- Cash provided by operations totaled $144 million for the third quarter and $394 million for the nine months ended October 31, 2011.
Nine-months Results
Net sales for the nine-month period ended October 31, 2011, were $19.38 billion, an increase of 12 percent from $17.26 billion for the nine-month period ended October 31, 2010. The strengthening of certain foreign currencies against the U.S. dollar positively impacted the year-over-year nine-month period net sales comparison by approximately 5 percentage points. On a regional basis, net sales in the Americas represented 42 percent of worldwide net sales and increased 4 percent to $8.09 billion from $7.76 billion for the prior-year period. Europe represented 58 percent of worldwide net sales and increased 19 percent (11 percent on a euro basis) to $11.28 billion from $9.50 billion for the nine-month period ended October 31, 2010.
For the nine-month period ended October 31, 2011, the company recorded operating income of $244.0 million, or 1.26 percent of net sales, compared with operating income of $216.2 million, or 1.25 percent of net sales, in the prior-year period. The company recorded net income attributable to shareholders of Tech Data Corporation of $152.3 million, or $3.37 per diluted share, for the nine-month period ended October 31, 2011. This compared to net income attributable to shareholders of Tech Data Corporation of $136.9 million, or $2.76 per diluted share, in the prior-year period.
Business Outlook
"For the fourth quarter, we are planning, in both regions, for flat to low single-digit sales growth in local currencies. We will continue our focus on responsible growth and on the quality of the revenue opportunities we pursue, taking into consideration our gross and operating margin goals. In Europe, we are currently realigning our resources to more closely match our cost structure and our skills portfolio with market opportunities, which will result in incremental costs of approximately $15 million in the fourth quarter. Despite this, we still expect a solid fourth quarter and another record-setting year for Tech Data," said Dutkowsky.
Webcast Details
Tech Data will discuss its third-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. The webcast will be available for replay for three months.
Cautionary Statement
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: global economic and political instability, competition, narrow margins, dependence on information systems, acquisitions and dispositions, exposure to natural disasters, war and terrorism, dependence on independent shipping companies, impact of policy changes, labor strikes, risk of declines in inventory value, product availability, vendor terms and conditions, loss of significant customers, customer credit exposure, need for liquidity and capital resources, fluctuations in interest rates, foreign currency exchange rates, exposure to foreign markets, international operations, changes in income tax and other regulatory legislation, potential adverse effects of litigation or regulatory enforcement action, changes in accounting rules, and the volatility of common stock price. 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 November 21, 2011. 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 wholesale distributors of technology products. Its advanced logistics capabilities and value added services enable 125,000 resellers in more than 100 countries to efficiently and cost effectively support the diverse technology needs of end users. Tech Data generated $24.4 billion in net sales for the fiscal year ended January 31, 2011 and is ranked 109th on the Fortune 500®. To learn more, visit www.techdata.com.
The Tech Data Corporation logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=10666
|
TECH DATA CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF INCOME (UNAUDITED) (In thousands, except per share amounts) |
||||||||||||||
|
Three months ended October 31, |
Nine months ended October 31, |
|||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||
| Net sales | $6,593,983 | $6,163,762 | $19,375,572 | $17,258,778 | ||||||||||
| Cost of products sold | 6,249,236 | 5,839,560 | 18,356,525 | 16,354,236 | ||||||||||
| Gross profit | 344,747 | 324,202 | 1,019,047 | 904,542 | ||||||||||
| Selling, general and administrative expenses | 255,178 | 243,230 | 775,020 | 688,326 | ||||||||||
| Operating income | 89,569 | 80,972 | 244,027 | 216,216 | ||||||||||
| Interest expense | 8,378 | 7,739 | 25,108 | 21,656 | ||||||||||
| Other expense (income), net | 428 | 122 | 882 | (248) | ||||||||||
| Income before income taxes | 80,763 | 73,111 | 218,037 | 194,808 | ||||||||||
| Provision for income taxes | 23,600 | 21,948 | 60,398 | 57,169 | ||||||||||
| Consolidated net income | 57,163 | 51,163 | 157,639 | 137,639 | ||||||||||
| Net income attributable to noncontrolling interest | (3,644) | (705) | (5,312) | (693) | ||||||||||
| Net income attributable to shareholders of Tech Data Corporation | $ 53,519 | $ 50,458 | $ 152,327 | $ 136,946 | ||||||||||
| Net income per common share attributable to shareholders of Tech Data Corporation: | ||||||||||||||
| Basic | $1.27 | $1.08 | $3.42 | $2.78 | ||||||||||
| Diluted | $1.26 | $1.07 | $3.37 | $2.76 | ||||||||||
| Weighted average common shares outstanding | ||||||||||||||
| Basic | 42,104 | 46,672 | 44,602 | 49,234 | ||||||||||
| Diluted | 42,554 | 47,069 | 45,157 | 49,684 | ||||||||||
|
TECH DATA CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET (In thousands) |
||||||
| ASSETS |
October 31, 2011 |
January 31, 2011 |
||||
| (Unaudited) | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | $899,666 | $839,934 | ||||
| Accounts receivable, net | 2,928,041 | 2,896,671 | ||||
| Inventories | 1,961,299 | 2,205,394 | ||||
| Prepaid expenses and other assets | 213,952 | 181,147 | ||||
| Total current assets | 6,002,958 | 6,123,146 | ||||
| Property and equipment, net | 88,092 | 94,315 | ||||
| Other assets, net | 319,583 | 270,831 | ||||
| Total assets | $6,410,633 | $6,488,292 | ||||
| LIABILITIES AND EQUITY | ||||||
| Current liabilities: | ||||||
| Accounts payable | $3,295,867 | $3,223,962 | ||||
| Accrued expenses and other liabilities | 520,751 | 562,638 | ||||
| Revolving credit loans and current maturities of long-term debt, net | 411,909 | 434,435 | ||||
| Total current liabilities | 4,228,527 | 4,221,035 | ||||
| Long-term debt, net | 61,223 | 60,076 | ||||
| Other long-term liabilities | 76,864 | 68,754 | ||||
| Total liabilities | 4,366,614 | 4,349,865 | ||||
| Equity attributable to shareholders of Tech Data Corporation | 2,014,355 | 2,114,466 | ||||
| Noncontrolling interest | 29,664 | 23,961 | ||||
| Total equity | 2,044,019 | 2,138,427 | ||||
| Total liabilities and equity | $6,410,633 | $6,488,292 | ||||
| TECH DATA CORPORATION AND SUBSIDIARIES | ||||||||
| SUPPLEMENTARY INFORMATION (UNAUDITED) | ||||||||
| (In thousands) | ||||||||
|
Three months ended October 31, 2011 |
Three months ended October 31, 2010 |
|||||||
| Operating Income by Segment |
Operating Income |
Operating Margin |
Operating Income |
Operating Margin |
||||
| Americas | $52,638 | 1.89% | $46,148 | 1.71% | ||||
| Europe | 39,718 | 1.04% | 37,110 | 1.07% | ||||
| Stock-based compensation | (2,787) | (.04)% | (2,286) | (.04)% | ||||
| Worldwide total | $89,569 | 1.36% | $80,972 | 1.31% | ||||
|
Nine months ended October 31, 2011 |
Nine months ended October 31, 2010 |
|||||||
| Operating Income by Segment |
Operating Income |
Operating Margin |
Operating Income |
Operating Margin |
||||
| Americas | $148,146 | 1.83% | $135,018 | 1.74% | ||||
| Europe | 103,850 | .92% | 88,593 | .93% | ||||
| Stock-based compensation | (7,969) | (.04)% | (7,395) | (.04)% | ||||
| Worldwide total | $244,027 | 1.26% | $216,216 | 1.25% | ||||
| Return on Invested Capital (ROIC) | ||||
| ($ in millions) | ||||
|
Twelve months ended October 31, 2011 |
Twelve months ended October 31, 2010 |
|||
| Net Operating Profit After Tax (NOPAT): | ||||
| Operating Income – GAAP | $362 | $309 | ||
| Tax Provision | 98 | 80 | ||
| NOPAT – GAAP | $264 | $229 | ||
| Average Invested Capital: | ||||
| Short-term debt (5-qtr average) | $364 | $92 | ||
| Long-term debt (5-qtr average) | 128 | 350 | ||
| Shareholders' Equity (5-qtr average) | 2,140 | 2,050 | ||
| Total average capital | 2,632 | 2,492 | ||
| Less: Cash (5-qtr average) | (832) | (982) | ||
| Average capital less average cash | $1,800 | $1,510 | ||
| ROIC – as reported | 15% | 15% | ||
| Net Cash | ||||
| ($ in millions) | ||||
| October 31, 2011 | January 31, 2011 | |||
| Cash | $900 | $840 | ||
| Current debt, excluding convertible debentures | 63 | 93 | ||
| Long-term debt | 61 | 60 | ||
| Convertible debentures (net of discount) (1) | 349 | 341 | ||
| Total debt | 473 | 494 | ||
| Net Cash (Cash less total debt) | $427 | $346 | ||
| In December 2006, $350 million of convertible debentures were issued. Shown net of discount of $1 million and $9 million for October 31, 2011 and January 31, 2011, respectively. | ||||