Resilient Margins Reinforce Integrity of the Strategy, Cash Flow Enhances Strategic Flexibility
|
(Dollars in millions, except per share amounts and percentage) |
Three Months Ended |
Nine Months Ended |
||||||||||||||
|
|
2024 |
|
|
2023 |
|
% Chg. |
|
2024 |
|
|
2023 |
|
% Chg. |
|||
|
|
$ |
5,516.6 |
|
$ |
5,628.3 |
|
(2.0 |
) |
$ |
15,812.7 |
|
$ |
16,357.5 |
|
(3.3 |
) |
|
Gross Profit |
$ |
1,200.7 |
|
$ |
1,227.7 |
|
(2.2 |
) |
$ |
3,447.1 |
|
$ |
3,498.6 |
|
(1.5 |
) |
|
Gross Profit Margin |
|
21.8 |
% |
|
21.8 |
% |
|
|
21.8 |
% |
|
21.4 |
% |
|
||
|
Operating Income |
$ |
481.6 |
|
$ |
478.4 |
|
0.7 |
|
$ |
1,242.7 |
|
$ |
1,245.9 |
|
(0.3 |
) |
|
Non-GAAP Operating Income1 |
$ |
534.0 |
|
$ |
556.3 |
|
(4.0 |
) |
$ |
1,447.8 |
|
$ |
1,520.4 |
|
(4.8 |
) |
|
Net Income |
$ |
316.4 |
|
$ |
315.5 |
|
0.3 |
|
$ |
813.6 |
|
$ |
808.2 |
|
0.7 |
|
|
Non-GAAP Net Income1 |
$ |
354.9 |
|
$ |
369.4 |
|
(3.9 |
) |
$ |
954.5 |
|
$ |
997.1 |
|
(4.3 |
) |
|
Net Income per Diluted Share |
$ |
2.34 |
|
$ |
2.32 |
|
1.0 |
|
$ |
6.00 |
|
$ |
5.92 |
|
1.3 |
|
|
Non-GAAP Net Income per Diluted Share1 |
$ |
2.63 |
|
$ |
2.72 |
|
(3.2 |
) |
$ |
7.04 |
|
$ |
7.31 |
|
(3.6 |
) |
|
Average Daily Sales2 |
$ |
86.2 |
|
$ |
89.3 |
|
(3.5 |
) |
$ |
82.4 |
|
$ |
85.6 |
|
(3.8 |
) |
|
1 Non-GAAP measures used in this release that are not based on accounting principles generally accepted in |
||||||||||||||||
|
2 Defined as Net sales divided by the number of selling days. There were 64 and 63 selling days for the three months ended |
||||||||||||||||
"The team's value as a trusted advisor and ability to meet our customers' most pressing needs drove strong performance in cloud and end-point solutions," said
"Persistent economic uncertainty and growing complexity in the technology landscape resulted in elongated customer decision making and delays in projects," said
"In this evolving and dynamic business environment, our value proposition is stronger than ever as customers turn to CDW to help them address mission-critical IT and operational needs across the full IT solutions stack and lifecycle. We continue to target exceeding US IT market growth by 200 to 300 basis points on a constant currency basis. To achieve this, we remain laser focused on meeting the needs of our more than 250,000 customers around the globe and remaining the partner of choice for more than 1,000 leading and emerging technology brands as the IT market evolves," concluded Leahy.
Third Quarter of 2024 Highlights:
Net sales in the third quarter of 2024 were
-
Corporate segment Net sales of
$2,161 million , 4.4 percent lower than 2023. -
Small Business segment Net sales of
$380 million , 1.2 percent lower than 2023. -
Public segment Net sales of
$2,336 million , 5.1 percent lower than 2023. Public results were primarily driven by decrease in Net sales to Government and Education customers of 12.3 percent and 4.5 percent, respectively, partially offset by an increase in Net sales to Healthcare customers of 3.1 percent. -
Net sales for CDW's
UK and Canadian operations, combined as "Other" for financial reporting purposes, were$640 million , 4.8 percent higher than 2023.
Gross profit in the third quarter of 2024 was
Selling and administrative expenses were
Operating income was
Interest expense, net includes interest expense and interest income. Interest expense, net was
The effective tax rate was 26.0 percent in the third quarter of 2024, compared to 24.8 percent in the third quarter of 2023, which resulted in income tax expense of
Net income remained consistent at
Weighted-average diluted shares outstanding were 135 million for the third quarter of 2024, compared to 136 million for the third quarter of 2023. Net income per diluted share for the third quarter of 2024 was
Forward-Looking Statements
This release contains "forward-looking statements" within the meaning of the federal securities laws. All statements other than statements of historical fact are forward-looking statements. These statements relate to analyses and other information, which are based on forecasts of future results or events and estimates of amounts not yet determinable. These statements also relate to our future prospects, growth, developments and business strategies. We claim the protection of The Private Securities Litigation Reform Act of 1995 for all forward-looking statements in this release.
These forward-looking statements are identified by the use of terms and phrases such as "anticipate," "assume," "believe," "estimate," "expect," "goal," "intend," "plan," "potential," "predict," "project," "target" and similar terms and phrases or future or conditional verbs such as "could," "may," "should," "will," and "would." However, these words are not the exclusive means of identifying such statements. Although we believe that our plans, intentions and other expectations reflected in or suggested by such forward-looking statements are reasonable, we cannot assure you that we will achieve those plans, intentions or expectations. All forward-looking statements are subject to risks and uncertainties that may cause actual results or events to differ materially from those that we expected.
Important factors that could cause actual results or events to differ materially from our expectations, or cautionary statements, are disclosed under the sections entitled "Risk Factors" and "Trends and Key Factors Affecting our Financial Performance" included in our Annual Report on Form 10-K for the year ended
We caution you that the important factors referenced above may not reflect all of the factors that could cause actual results or events to differ from our expectations. In addition, we cannot assure you that we will realize the results or developments we expect or anticipate or, even if substantially realized, that they will result in the consequences or affect us or our operations in the way we expect. The forward-looking statements included in this release are made only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.
Non-GAAP Financial Information
Generally, a non-GAAP financial measure is a numerical measure of a company's performance or financial condition that either excludes or includes amounts that are not normally included or excluded in the most directly comparable measure calculated and presented in accordance with US GAAP. Non-GAAP measures used by management may differ from similar measures used by other companies, even when similar terms are used to identify such measures.
Our non-GAAP performance measures include Non-GAAP operating income, Non-GAAP operating income margin, Non-GAAP net income, Non-GAAP net income per diluted share and Net sales on a constant currency basis, and our non-GAAP financial condition measures include Free cash flow and Adjusted free cash flow. These non-GAAP performance measures and non-GAAP financial condition measures are collectively referred to as "non-GAAP financial measures."
Non-GAAP operating income excludes, among other things, charges related to the amortization of acquisition-related intangible assets, equity-based compensation and the associated payroll taxes, acquisition and integration expenses, transformation initiatives and workplace optimization. Non-GAAP operating income margin is defined as Non-GAAP operating income as a percentage of Net sales. Non-GAAP net income and Non-GAAP net income per diluted share exclude, among other things, charges related to acquisition-related intangible asset amortization, equity-based compensation, acquisition and integration expenses, transformation initiatives, workplace optimization and the associated tax effects of each. Net sales on a constant currency basis is defined as Net sales excluding the impact of foreign currency translation on Net sales. Free cash flow is defined as Net cash provided by operating activities less capital expenditures. Adjusted free cash flow is defined as Free cash flow adjusted to include certain cash flows from financing activities incurred in the normal course of operations or as capital expenditures.
We believe our non-GAAP performance measures provide analysts, investors and management with useful information regarding the underlying operating performance of our business, as they remove the impact of items that management believes are not reflective of underlying operating performance. Management uses these measures to evaluate period-over-period performance as management believes they provide a more comparable measure of the underlying business. We also present non-GAAP financial condition measures as we believe they provide analysts, investors and management with more information regarding our liquidity and capital resources. Certain non-GAAP financial measures are also used to determine certain components of performance-based compensation.
Our outlook includes non-GAAP financial measures because certain reconciling items are dependent on future events that either cannot be controlled, such as currency impacts or interest rates, or reliably predicted because they are not part of our underlying performance, such as refinancing activities or acquisition and integration expenses.
The financial statement tables that accompany this press release include a reconciliation of non-GAAP financial measures to the most comparable US GAAP financial measures.
About CDW
Webcast
CDWPR-FI
|
CDW CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (dollars and shares in millions, except per-share amounts) (unaudited) |
||||||||||||||||||||||
|
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||||||||
|
|
|
|
2024 |
|
|
|
2023 |
|
|
% Change |
|
|
2024 |
|
|
|
2023 |
|
|
% Change |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Net sales |
|
$ |
5,516.6 |
|
|
$ |
5,628.3 |
|
|
(2.0 |
)% |
|
$ |
15,812.7 |
|
|
$ |
16,357.5 |
|
|
(3.3 |
)% |
|
Cost of sales |
|
|
4,315.9 |
|
|
|
4,400.6 |
|
|
(1.9 |
) |
|
|
12,365.6 |
|
|
|
12,858.9 |
|
|
(3.8 |
) |
|
Gross profit |
|
|
1,200.7 |
|
|
|
1,227.7 |
|
|
(2.2 |
) |
|
|
3,447.1 |
|
|
|
3,498.6 |
|
|
(1.5 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Selling and administrative expenses |
|
|
719.1 |
|
|
|
749.3 |
|
|
(4.0 |
) |
|
|
2,204.4 |
|
|
|
2,252.7 |
|
|
(2.1 |
) |
|
Operating income |
|
|
481.6 |
|
|
|
478.4 |
|
|
0.7 |
|
|
|
1,242.7 |
|
|
|
1,245.9 |
|
|
(0.3 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Interest expense, net |
|
|
(54.4 |
) |
|
|
(57.4 |
) |
|
(5.2 |
) |
|
|
(158.0 |
) |
|
|
(173.3 |
) |
|
(8.8 |
) |
|
Other income (expense), net |
|
|
0.4 |
|
|
|
(1.2 |
) |
|
nm* |
|
|
(0.8 |
) |
|
|
(3.1 |
) |
|
(74.2 |
) |
|
|
Income before income taxes |
|
|
427.6 |
|
|
|
419.8 |
|
|
1.9 |
|
|
|
1,083.9 |
|
|
|
1,069.5 |
|
|
1.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Income tax expense |
|
|
(111.2 |
) |
|
|
(104.3 |
) |
|
6.6 |
|
|
|
(270.3 |
) |
|
|
(261.3 |
) |
|
3.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Net income |
|
$ |
316.4 |
|
|
$ |
315.5 |
|
|
0.3 |
% |
|
$ |
813.6 |
|
|
$ |
808.2 |
|
|
0.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Net income per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Basic |
|
$ |
2.37 |
|
|
$ |
2.35 |
|
|
0.7 |
% |
|
$ |
6.07 |
|
|
$ |
6.00 |
|
|
1.2 |
% |
|
Diluted |
|
$ |
2.34 |
|
|
$ |
2.32 |
|
|
1.0 |
% |
|
$ |
6.00 |
|
|
$ |
5.92 |
|
|
1.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Weighted-average common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Basic |
|
|
133.5 |
|
|
|
134.1 |
|
|
|
|
|
134.0 |
|
|
|
134.8 |
|
|
|
||
|
Diluted |
|
|
134.9 |
|
|
|
135.9 |
|
|
|
|
|
135.5 |
|
|
|
136.4 |
|
|
|
||
|
*nm - Not meaningful |
||||||||||||||||||||||
|
CDW CORPORATION AND SUBSIDIARIES NET SALES DETAIL (dollars in millions) (unaudited) |
|||||||||||||||||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||||||||||
|
|
|
2024 |
|
|
2023 |
|
% Change(i) |
|
Average
|
|
|
2024 |
|
|
2023 |
|
% Change(i) |
|
Average
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Corporate |
$ |
2,161.2 |
|
$ |
2,226.5 |
|
(2.9 |
)% |
|
(4.4 |
)% |
|
$ |
6,492.3 |
|
$ |
6,675.2 |
|
(2.7 |
)% |
|
(3.2 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Small Business |
|
379.7 |
|
|
378.4 |
|
0.3 |
|
|
(1.2 |
) |
|
|
1,143.5 |
|
|
1,186.0 |
|
(3.6 |
) |
|
(4.1 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Public: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Government |
|
691.0 |
|
|
775.7 |
|
(10.9 |
) |
|
(12.3 |
) |
|
|
1,873.4 |
|
|
2,008.4 |
|
(6.7 |
) |
|
(7.2 |
) |
|
Education |
|
995.7 |
|
|
1,026.7 |
|
(3.0 |
) |
|
(4.5 |
) |
|
|
2,609.9 |
|
|
2,719.2 |
|
(4.0 |
) |
|
(4.5 |
) |
|
Healthcare |
|
649.0 |
|
|
619.7 |
|
4.7 |
|
|
3.1 |
|
|
|
1,820.4 |
|
|
1,802.4 |
|
1.0 |
|
|
0.5 |
|
|
Total Public |
|
2,335.7 |
|
|
2,422.1 |
|
(3.6 |
) |
|
(5.1 |
) |
|
|
6,303.7 |
|
|
6,530.0 |
|
(3.5 |
) |
|
(4.0 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Other |
|
640.0 |
|
|
601.3 |
|
6.4 |
|
|
4.8 |
|
|
|
1,873.2 |
|
|
1,966.3 |
|
(4.7 |
) |
|
(5.2 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Total Net sales |
$ |
5,516.6 |
|
$ |
5,628.3 |
|
(2.0 |
)% |
|
(3.5 |
)% |
|
$ |
15,812.7 |
|
$ |
16,357.5 |
|
(3.3 |
)% |
|
(3.8 |
)% |
| (i) |
There were 64 and 63 selling days for the three months ended |
|
CDW CORPORATION AND SUBSIDIARIES TIMING OF REVENUE RECOGNITION (dollars in millions) (unaudited) |
||||||||||||||
|
|
Three Months Ended |
|||||||||||||
|
|
Corporate |
|
Small Business |
|
Public |
|
Other |
|
Total |
|||||
|
Timing of Revenue Recognition |
|
|
|
|
|
|
|
|
|
|||||
|
Transferred at a point in time where CDW is principal |
$ |
1,799.8 |
|
$ |
328.1 |
|
$ |
2,053.4 |
|
$ |
539.7 |
|
$ |
4,721.0 |
|
Transferred at a point in time where CDW is agent |
|
197.5 |
|
|
37.0 |
|
|
160.0 |
|
|
33.6 |
|
|
428.1 |
|
Transferred over time where CDW is principal |
|
163.9 |
|
|
14.6 |
|
|
122.3 |
|
|
66.7 |
|
|
367.5 |
|
Total Net sales |
$ |
2,161.2 |
|
$ |
379.7 |
|
$ |
2,335.7 |
|
$ |
640.0 |
|
$ |
5,516.6 |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
Three Months Ended |
|||||||||||||
|
|
Corporate |
|
Small Business |
|
Public |
|
Other |
|
Total |
|||||
|
Timing of Revenue Recognition |
|
|
|
|
|
|
|
|
|
|||||
|
Transferred at a point in time where CDW is principal |
$ |
1,861.9 |
|
$ |
333.1 |
|
$ |
2,169.3 |
|
$ |
520.3 |
|
$ |
4,884.6 |
|
Transferred at a point in time where CDW is agent |
|
192.9 |
|
|
37.1 |
|
|
143.9 |
|
|
25.8 |
|
|
399.7 |
|
Transferred over time where CDW is principal |
|
171.7 |
|
|
8.2 |
|
|
108.9 |
|
|
55.2 |
|
|
344.0 |
|
Total Net sales |
$ |
2,226.5 |
|
$ |
378.4 |
|
$ |
2,422.1 |
|
$ |
601.3 |
|
$ |
5,628.3 |
|
|
Nine Months Ended |
|||||||||||||
|
|
Corporate |
|
Small Business |
|
Public |
|
Other |
|
Total |
|||||
|
Timing of Revenue Recognition |
|
|
|
|
|
|
|
|
|
|||||
|
Transferred at a point in time where CDW is principal |
$ |
5,409.5 |
|
$ |
997.0 |
|
$ |
5,561.3 |
|
$ |
1,593.8 |
|
$ |
13,561.6 |
|
Transferred at a point in time where CDW is agent |
|
585.5 |
|
|
110.3 |
|
|
402.7 |
|
|
95.6 |
|
|
1,194.1 |
|
Transferred over time where CDW is principal |
|
497.3 |
|
|
36.2 |
|
|
339.7 |
|
|
183.8 |
|
|
1,057.0 |
|
Total Net sales |
$ |
6,492.3 |
|
$ |
1,143.5 |
|
$ |
6,303.7 |
|
$ |
1,873.2 |
|
$ |
15,812.7 |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
Nine Months Ended |
|||||||||||||
|
|
Corporate |
|
Small Business |
|
Public |
|
Other |
|
Total |
|||||
|
Timing of Revenue Recognition |
|
|
|
|
|
|
|
|
|
|||||
|
Transferred at a point in time where CDW is principal |
$ |
5,614.6 |
|
$ |
1,053.3 |
|
$ |
5,858.6 |
|
$ |
1,718.1 |
|
$ |
14,244.6 |
|
Transferred at a point in time where CDW is agent |
|
563.3 |
|
|
106.8 |
|
|
362.1 |
|
|
80.9 |
|
|
1,113.1 |
|
Transferred over time where CDW is principal |
|
497.3 |
|
|
25.9 |
|
|
309.3 |
|
|
167.3 |
|
|
999.8 |
|
Total Net sales |
$ |
6,675.2 |
|
$ |
1,186.0 |
|
$ |
6,530.0 |
|
$ |
1,966.3 |
|
$ |
16,357.5 |
|
CDW CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (dollars in millions) |
||||||||
|
|
|
|
|
|
|
|||
|
Assets |
(unaudited) |
|
|
|
(unaudited) |
|||
|
|
|
|
|
|
|
|||
|
Current assets: |
|
|
|
|
|
|||
|
Cash and cash equivalents |
$ |
946.7 |
|
$ |
588.7 |
|
$ |
440.7 |
|
Short-term investments |
|
211.7 |
|
|
— |
|
|
— |
|
Accounts receivable, net of allowance for credit losses
of |
|
4,894.0 |
|
|
4,567.5 |
|
|
4,418.5 |
|
Merchandise inventory |
|
682.5 |
|
|
668.1 |
|
|
706.4 |
|
Miscellaneous receivables |
|
520.1 |
|
|
470.5 |
|
|
489.7 |
|
Prepaid expenses and other |
|
406.6 |
|
|
410.2 |
|
|
403.1 |
|
Total current assets |
|
7,661.6 |
|
|
6,705.0 |
|
|
6,458.4 |
|
|
|
|
|
|
|
|||
|
Operating lease right-of-use assets |
|
129.2 |
|
|
128.8 |
|
|
133.1 |
|
Property and equipment, net |
|
193.1 |
|
|
195.5 |
|
|
194.9 |
|
|
|
4,424.5 |
|
|
4,413.4 |
|
|
4,417.4 |
|
Other intangible assets, net |
|
1,259.7 |
|
|
1,369.7 |
|
|
1,384.9 |
|
Other assets |
|
708.6 |
|
|
472.2 |
|
|
286.6 |
|
Total assets |
$ |
14,376.7 |
|
$ |
13,284.6 |
|
$ |
12,875.3 |
|
|
|
|
|
|
|
|||
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
|||
|
|
|
|
|
|
|
|||
|
Current liabilities: |
|
|
|
|
|
|||
|
Accounts payable - trade |
$ |
3,179.9 |
|
$ |
2,881.0 |
|
$ |
2,616.7 |
|
Accounts payable - inventory financing |
|
357.0 |
|
|
430.9 |
|
|
620.0 |
|
Current maturities of long-term debt |
|
423.2 |
|
|
613.1 |
|
|
40.0 |
|
Contract liabilities |
|
474.7 |
|
|
487.4 |
|
|
438.9 |
|
Accrued expenses and other current liabilities |
|
1,023.8 |
|
|
1,029.6 |
|
|
1,066.5 |
|
Total current liabilities |
|
5,458.6 |
|
|
5,442.0 |
|
|
4,782.1 |
|
|
|
|
|
|
|
|||
|
Long-term liabilities: |
|
|
|
|
|
|||
|
Debt |
|
5,607.5 |
|
|
5,031.8 |
|
|
5,661.5 |
|
Deferred income taxes |
|
145.1 |
|
|
171.4 |
|
|
171.8 |
|
Operating lease liabilities |
|
158.7 |
|
|
164.0 |
|
|
168.8 |
|
Other liabilities |
|
657.5 |
|
|
432.9 |
|
|
281.1 |
|
Total long-term liabilities |
|
6,568.8 |
|
|
5,800.1 |
|
|
6,283.2 |
|
|
|
|
|
|
|
|||
|
Total stockholders’ equity |
|
2,349.3 |
|
|
2,042.5 |
|
|
1,810.0 |
|
Total liabilities and stockholders’ equity |
$ |
14,376.7 |
|
$ |
13,284.6 |
|
$ |
12,875.3 |
|
CDW CORPORATION AND SUBSIDIARIES DEBT AND WORKING CAPITAL INFORMATION (dollars in millions) (unaudited) |
|||||||||||
|
|
|
|
|
|
|
||||||
|
Debt and Revolver Availability |
|
|
|
|
|
||||||
|
Cash and cash equivalents |
$ |
946.7 |
|
|
$ |
588.7 |
|
|
$ |
440.7 |
|
|
Short-term investments |
|
211.7 |
|
|
|
— |
|
|
|
— |
|
|
Total debt |
|
6,030.7 |
|
|
|
5,644.9 |
|
|
|
5,701.5 |
|
|
Net debt(i) |
|
4,872.3 |
|
|
|
5,056.2 |
|
|
|
5,260.8 |
|
|
Revolver availability |
|
1,254.4 |
|
|
|
1,208.1 |
|
|
|
942.4 |
|
|
Cash plus revolver availability |
|
2,201.1 |
|
|
|
1,796.8 |
|
|
|
1,383.1 |
|
|
|
|
|
|
|
|
||||||
|
Working Capital(ii) |
|
|
|
|
|
||||||
|
Days of sales outstanding |
|
79 |
|
|
|
77 |
|
|
|
73 |
|
|
Days of supply in inventory |
|
14 |
|
|
|
13 |
|
|
|
14 |
|
|
Days of purchases outstanding |
|
(76 |
) |
|
|
(73 |
) |
|
|
(72 |
) |
|
Cash conversion cycle |
|
17 |
|
|
|
17 |
|
|
|
15 |
|
| (i) |
Defined as Total debt minus Cash and cash equivalents and Short-term investments |
|
| (ii) |
Based on a rolling three-month average |
|
CDW CORPORATION AND SUBSIDIARIES CASH FLOW INFORMATION (dollars in millions) (unaudited) |
||||||||
|
|
|
Nine Months Ended
|
||||||
|
|
|
|
2024 |
|
|
|
2023 |
|
|
|
|
|
|
|
||||
|
Net cash provided by operating activities |
|
$ |
932.0 |
|
|
$ |
1,062.2 |
|
|
|
|
|
|
|
||||
|
Capital expenditures |
|
|
(94.0 |
) |
|
|
(114.7 |
) |
|
Purchases of short-term investments |
|
|
(211.1 |
) |
|
|
— |
|
|
Other cash flows used in investing activities |
|
|
(0.4 |
) |
|
|
(81.2 |
) |
|
Net cash used in investing activities |
|
|
(305.5 |
) |
|
|
(195.9 |
) |
|
|
|
|
|
|
||||
|
Net change in accounts payable - inventory financing |
|
|
(73.9 |
) |
|
|
165.4 |
|
|
Other cash flows used in financing activities |
|
|
(196.8 |
) |
|
|
(905.1 |
) |
|
Net cash used in financing activities |
|
|
(270.7 |
) |
|
|
(739.7 |
) |
|
|
|
|
|
|
||||
|
Effect of exchange rate changes on cash and cash equivalents |
|
|
2.2 |
|
|
|
(1.1 |
) |
|
Net increase in cash and cash equivalents |
|
|
358.0 |
|
|
|
125.5 |
|
|
Cash and cash equivalents - beginning of period |
|
|
588.7 |
|
|
|
315.2 |
|
|
Cash and cash equivalents - end of period |
|
$ |
946.7 |
|
|
$ |
440.7 |
|
|
|
|
|
|
|
||||
|
Supplementary disclosure of cash flow information: |
|
|
|
|
||||
|
Interest paid |
|
$ |
(146.9 |
) |
|
$ |
(141.2 |
) |
|
Income taxes paid, net |
|
$ |
(279.1 |
) |
|
$ |
(285.1 |
) |
|
CDW CORPORATION AND SUBSIDIARIES NON-GAAP FINANCIAL MEASURE RECONCILIATIONS |
||||||||||||||||||||||||
|
CDW has included reconciliations of Non-GAAP operating income, Non-GAAP operating income margin, Non-GAAP net income, Non-GAAP net income per diluted share and Net sales on a constant currency basis for the three and nine months ended |
||||||||||||||||||||||||
|
CDW CORPORATION AND SUBSIDIARIES NON-GAAP OPERATING INCOME AND NON-GAAP OPERATING INCOME MARGIN (dollars in millions) (unaudited) |
||||||||||||||||||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
|||||||||||||||||||||
|
|
2024 |
|
% of Net
|
|
2023 |
|
% of Net
|
|
2024 |
|
% of Net
|
|
2023 |
|
% of Net
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Operating income, as reported |
$ |
481.6 |
|
8.7 |
% |
|
$ |
478.4 |
|
|
8.5 |
% |
|
$ |
1,242.7 |
|
7.9 |
% |
|
$ |
1,245.9 |
|
7.6 |
% |
|
Amortization of intangibles(i) |
|
37.7 |
|
|
|
|
37.3 |
|
|
|
|
|
113.2 |
|
|
|
|
116.2 |
|
|
||||
|
Equity-based compensation |
|
2.7 |
|
|
|
|
26.0 |
|
|
|
|
|
50.8 |
|
|
|
|
71.6 |
|
|
||||
|
Transformation initiatives(ii) |
|
8.3 |
|
|
|
|
6.4 |
|
|
|
|
|
23.1 |
|
|
|
|
16.0 |
|
|
||||
|
Acquisition and integration expenses |
|
0.5 |
|
|
|
|
7.1 |
|
|
|
|
|
2.1 |
|
|
|
|
24.7 |
|
|
||||
|
Workplace optimization(iii) |
|
2.2 |
|
|
|
|
(0.4 |
) |
|
|
|
|
9.5 |
|
|
|
|
42.5 |
|
|
||||
|
Other adjustments |
|
1.0 |
|
|
|
|
1.5 |
|
|
|
|
|
6.4 |
|
|
|
|
3.5 |
|
|
||||
|
Non-GAAP operating income |
$ |
534.0 |
|
9.7 |
% |
|
$ |
556.3 |
|
|
9.9 |
% |
|
$ |
1,447.8 |
|
9.2 |
% |
|
$ |
1,520.4 |
|
9.3 |
% |
| (i) |
Includes amortization expense for acquisition-related intangible assets, primarily customer relationships, customer contracts and trade names. |
|
| (ii) |
Includes costs related to strategic transformation initiatives focused on optimizing various operations and systems. |
|
| (iii) |
Includes costs related to the workforce reduction program and charges related to the reduction of our real estate lease portfolio. |
|
CDW CORPORATION AND SUBSIDIARIES NON-GAAP NET INCOME AND NON-GAAP NET INCOME PER DILUTED SHARE (dollars and shares in millions, except per-share amounts) (unaudited) |
||||||||||||||||||||||||||||||
|
|
Three Months Ended |
|
|
|||||||||||||||||||||||||||
|
|
2024 |
|
2023 |
|
|
|||||||||||||||||||||||||
|
|
Income before Income Taxes |
|
Income Tax Expense(i) |
|
Net Income |
|
Effective Tax Rate |
|
Income before Income Taxes |
|
Income Tax Expense(i) |
|
Net Income |
|
Effective Tax Rate |
|
Net Income % Change |
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
US GAAP, as reported |
$ |
427.6 |
|
$ |
(111.2 |
) |
|
$ |
316.4 |
|
26.0 |
% |
|
$ |
419.8 |
|
|
$ |
(104.3 |
) |
|
$ |
315.5 |
|
|
24.8 |
% |
|
0.3 |
% |
|
Amortization of intangibles(ii) |
|
37.7 |
|
|
(9.8 |
) |
|
|
27.9 |
|
|
|
|
37.3 |
|
|
|
(9.7 |
) |
|
|
27.6 |
|
|
|
|
|
|||
|
Equity-based compensation |
|
2.7 |
|
|
(0.3 |
) |
|
|
2.4 |
|
|
|
|
26.0 |
|
|
|
(10.3 |
) |
|
|
15.7 |
|
|
|
|
|
|||
|
Transformation initiatives(iii) |
|
8.3 |
|
|
(2.1 |
) |
|
|
6.2 |
|
|
|
|
6.4 |
|
|
|
(1.7 |
) |
|
|
4.7 |
|
|
|
|
|
|||
|
Acquisition and integration expenses |
|
0.5 |
|
|
(0.1 |
) |
|
|
0.4 |
|
|
|
|
7.1 |
|
|
|
(1.8 |
) |
|
|
5.3 |
|
|
|
|
|
|||
|
Workplace optimization(iv) |
|
2.2 |
|
|
(0.6 |
) |
|
|
1.6 |
|
|
|
|
(0.4 |
) |
|
|
— |
|
|
|
(0.4 |
) |
|
|
|
|
|||
|
Other adjustments |
|
0.1 |
|
|
(0.1 |
) |
|
|
— |
|
|
|
|
1.5 |
|
|
|
(0.5 |
) |
|
|
1.0 |
|
|
|
|
|
|||
|
Non-GAAP |
$ |
479.1 |
|
$ |
(124.2 |
) |
|
$ |
354.9 |
|
25.9 |
% |
|
$ |
497.7 |
|
|
$ |
(128.3 |
) |
|
$ |
369.4 |
|
|
25.8 |
% |
|
(3.9 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Net income per diluted share |
|
|
|
|
$ |
2.34 |
|
|
|
|
|
|
|
$ |
2.32 |
|
|
|
|
|
||||||||||
|
Non-GAAP net income per diluted share |
|
|
|
|
$ |
2.63 |
|
|
|
|
|
|
|
$ |
2.72 |
|
|
|
|
|
||||||||||
|
Shares used in computing US GAAP and Non-GAAP net income per diluted share |
|
|
|
|
|
134.9 |
|
|
|
|
|
|
|
|
135.9 |
|
|
|
|
|
||||||||||
| (i) |
Income tax on non-GAAP adjustments includes excess tax benefits associated with equity-based compensation. |
|
| (ii) |
Includes amortization expense for acquisition-related intangible assets, primarily customer relationships, customer contracts and trade names. |
|
| (iii) |
Includes costs related to strategic transformation initiatives focused on optimizing various operations and systems. |
|
| (iv) |
Includes costs related to the workforce reduction program and charges related to the reduction of our real estate lease portfolio. |
|
CDW CORPORATION AND SUBSIDIARIES NON-GAAP NET INCOME AND NON-GAAP NET INCOME PER DILUTED SHARE (dollars and shares in millions, except per-share amounts) (unaudited) |
||||||||||||||||||||||||||||
|
|
Nine Months Ended |
|
|
|||||||||||||||||||||||||
|
|
2024 |
|
2023 |
|
|
|||||||||||||||||||||||
|
|
Income before Income Taxes |
|
Income Tax Expense(i) |
|
Net Income |
|
Effective Tax Rate |
|
Income before Income Taxes |
|
Income Tax Expense(i) |
|
Net Income |
|
Effective Tax Rate |
|
Net Income % Change |
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
US GAAP, as reported |
$ |
1,083.9 |
|
$ |
(270.3 |
) |
|
$ |
813.6 |
|
24.9 |
% |
|
$ |
1,069.5 |
|
$ |
(261.3 |
) |
|
$ |
808.2 |
|
24.4 |
% |
|
0.7 |
% |
|
Amortization of intangibles(ii) |
|
113.2 |
|
|
(29.4 |
) |
|
|
83.8 |
|
|
|
|
116.2 |
|
|
(30.2 |
) |
|
|
86.0 |
|
|
|
|
|||
|
Equity-based compensation |
|
50.8 |
|
|
(23.4 |
) |
|
|
27.4 |
|
|
|
|
71.6 |
|
|
(32.7 |
) |
|
|
38.9 |
|
|
|
|
|||
|
Transformation initiatives(iii) |
|
23.1 |
|
|
(6.0 |
) |
|
|
17.1 |
|
|
|
|
16.0 |
|
|
(4.2 |
) |
|
|
11.8 |
|
|
|
|
|||
|
Acquisition and integration expenses |
|
2.1 |
|
|
(0.5 |
) |
|
|
1.6 |
|
|
|
|
24.7 |
|
|
(6.4 |
) |
|
|
18.3 |
|
|
|
|
|||
|
Workplace optimization(iv) |
|
9.5 |
|
|
(2.5 |
) |
|
|
7.0 |
|
|
|
|
42.5 |
|
|
(11.1 |
) |
|
|
31.4 |
|
|
|
|
|||
|
Other adjustments |
|
5.5 |
|
|
(1.5 |
) |
|
|
4.0 |
|
|
|
|
3.5 |
|
|
(1.0 |
) |
|
|
2.5 |
|
|
|
|
|||
|
Non-GAAP |
$ |
1,288.1 |
|
$ |
(333.6 |
) |
|
$ |
954.5 |
|
25.9 |
% |
|
$ |
1,344.0 |
|
$ |
(346.9 |
) |
|
$ |
997.1 |
|
25.8 |
% |
|
(4.3 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net income per diluted share, as reported |
|
|
|
|
$ |
6.00 |
|
|
|
|
|
|
|
$ |
5.92 |
|
|
|
|
|||||||||
|
Non-GAAP net income per diluted share |
|
|
|
|
$ |
7.04 |
|
|
|
|
|
|
|
$ |
7.31 |
|
|
|
|
|||||||||
|
Shares used in computing US GAAP and Non-GAAP net income per diluted share |
|
|
|
|
|
135.5 |
|
|
|
|
|
|
|
|
136.4 |
|
|
|
|
|||||||||
| (i) |
Income tax on non-GAAP adjustments includes excess tax benefits associated with equity-based compensation. |
|
| (ii) |
Includes amortization expense for acquisition-related intangible assets, primarily customer relationships, customer contracts and trade names. |
|
| (iii) |
Includes costs related to strategic transformation initiatives focused on optimizing various operations and systems. |
|
| (iv) |
Includes costs related to the workforce reduction program and charges related to the reduction of our real estate lease portfolio. |
|
CDW CORPORATION AND SUBSIDIARIES NET SALES ON A CONSTANT CURRENCY BASIS (dollars in millions) (unaudited) |
||||||||||||||||||||||||
|
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||||||||||
|
|
|
|
2024 |
|
|
2023 |
|
% Change(i) |
|
Average Daily Sales % Change(i) |
|
|
2024 |
|
|
2023 |
|
% Change(i) |
|
Average Daily Sales % Change(i) |
||||
|
Net sales, as reported |
|
$ |
5,516.6 |
|
$ |
5,628.3 |
|
(2.0 |
)% |
|
(3.5 |
)% |
|
$ |
15,812.7 |
|
$ |
16,357.5 |
|
(3.3 |
)% |
|
(3.8 |
)% |
|
Foreign currency translation(ii) |
|
|
— |
|
|
6.6 |
|
|
|
|
|
|
— |
|
|
27.2 |
|
|
|
|
||||
|
Net sales, on a constant currency basis |
|
$ |
5,516.6 |
|
$ |
5,634.9 |
|
(2.1 |
)% |
|
(3.6 |
)% |
|
$ |
15,812.7 |
|
$ |
16,384.7 |
|
(3.5 |
)% |
|
(4.0 |
)% |
| (i) |
There were 64 and 63 selling days for the three months ended |
|
| (ii) |
Represents the effect of translating the prior year results of CDW |
|
CDW CORPORATION AND SUBSIDIARIES FREE CASH FLOW AND ADJUSTED FREE CASH FLOW (dollars in millions) (unaudited) |
|||||||
|
|
Nine Months Ended |
||||||
|
|
|
2024 |
|
|
|
2023 |
|
|
Net cash provided by operating activities |
$ |
932.0 |
|
|
$ |
1,062.2 |
|
|
Capital expenditures |
|
(94.0 |
) |
|
|
(114.7 |
) |
|
Free cash flow |
|
838.0 |
|
|
|
947.5 |
|
|
Net change in accounts payable - inventory financing |
|
(73.9 |
) |
|
|
165.4 |
|
|
Adjusted free cash flow(i) |
$ |
764.1 |
|
|
$ |
1,112.9 |
|
| (i) |
Defined as Net cash provided by operating activities less capital expenditures, adjusted to include cash flows from financing activities that relate to the purchase of inventory. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20241030091489/en/
Investor Inquiries
Steven O’Brien
Vice President, Investor Relations
(847) 968-0238
investorrelations@cdw.com
Media Inquires
Vice President, Corporate Communications
(847) 419-7411
mediarelations@cdw.com
Source:
