Insight Enterprises, Inc. (Nasdaq:NSIT) (the
“Company”) today reported results of operations for the quarter and
full year ended December 31, 2016.
- Net sales up 6% to $1.47 billion for the fourth quarter.
- Earnings from operations up 33% to $40.7 million for the fourth
quarter.
In the fourth quarter of 2016, consolidated net sales were $1.47
billion, up 6% year over year. This improvement was driven by
solid top-line growth in each of the Company’s geographic operating
segments, including organic growth in hardware, software and
services on a global basis. Consolidated net sales for the
full year 2016 were $5.49 billion, up 2% year over year.
Excluding the effects of fluctuating foreign currency exchange
rates, consolidated net sales for the full year 2016 increased 4%,
with growth of 4% reported by each of North America and EMEA, while
APAC’s net sales were flat year over year.
“Our fourth quarter top-line results reflect solid sales
execution in our core business as well as the validation of our
strategy to expand our value-added services offerings globally, as
evidenced by the double-digit organic growth reported in this
important category,” stated Ken Lamneck, President and Chief
Executive Officer. “With the acquisition of Ignia in the
third quarter of 2016 and Datalink in January of 2017, our
portfolio of offerings for 2017 is stronger than ever, with deep
technical and consulting capabilities around data center, hybrid
Cloud, application development and workforce enablement,” stated
Lamneck.
Consolidated earnings from operations in the fourth quarter of
2016 increased 33% year over year to $40.7 million and diluted
earnings per share increased to $0.59 compared to $0.50 for the
fourth quarter of 2015. Consolidated earnings from operations
for the full year increased 18% year over year to $148.8 million
and diluted earnings per share increased 17% to $2.32 compared to
$1.98 for 2015. Adjusted diluted earnings per share was $0.72
in the fourth quarter of 2016 compared to $0.57 reported in the
fourth quarter of last year. Adjusted diluted earnings per
share for the full year 2016 was $2.52 compared to $2.11 reported
in 2015.*
“I am pleased with our team’s execution in 2016. We
delivered top-line growth overall, gaining market share in key
categories in North America and EMEA. Just as important, our
focus on profitability and tight cost management discipline allowed
us to deliver double-digit earnings from operations growth for the
full year 2016,” stated Lamneck. “As we head into 2017, we
believe that our strong foundation, built on strategic and
operational discipline, combined with Datalink’s deep technical
talent and complementary offerings, will position us well to
deliver value to our clients, partners and shareholders in
2017.”
KEY HIGHLIGHTS
Results for the Quarter:
- Consolidated net sales of $1.5 billion for the fourth quarter
of 2016 increased 6% compared to the fourth quarter of 2015.
- Net sales in North America of $1.1 billion were up 6% year over
year;
- Net sales in EMEA of $361.8 million increased 6% year over
year; and
- Net sales in APAC of $48.5 million increased 7% year over
year.
- Excluding the effects of fluctuating foreign currency exchange
rates, consolidated net sales increased 8% year over year, with net
sales growth in North America, EMEA and APAC of 6%, 17% and 5%,
respectively, year over year.
- Consolidated gross profit of $191.0 million increased 6%
compared to the fourth quarter of 2015, with consolidated gross
margin remaining flat at 13.0% of net sales.
- Gross profit in North America of $133.6 million (12.6% gross
margin) increased 6% year over year;
- Gross profit in EMEA of $48.9 million (13.5% gross margin)
increased 2% year over year; and
- Gross profit in APAC of $8.5 million (17.6% gross margin)
increased 17% year over year.
- Excluding the effects of fluctuating foreign currency exchange
rates, consolidated gross profit increased 9% year over year, and
gross profit in North America, EMEA and APAC increased 6%, 14% and
15%, respectively, year over year.
- Consolidated earnings from operations increased 33% compared to
the fourth quarter of 2015 to $40.7 million, or 2.8% of net
sales.
- Earnings from operations in North America increased 20% year
over year to $29.2 million, or 2.8% of net sales;
- Earnings from operations in EMEA increased 114% year over year
to $9.3 million, or 2.6% of net sales; and
- Earnings from operations in APAC increased 11% year over year
to $2.2 million, or 4.6% of net sales.
- Excluding the effects of fluctuating foreign currency exchange
rates, consolidated earnings from operations increased 37% year
over year, and earnings from operations in North America, EMEA and
APAC increased 20%, 162% and 11%, respectively, year over
year.
- Adjusted consolidated earnings from operations increased 37%
year over year to $45.9 million, or 3.1% of net sales for the
fourth quarter of 2016.*
- Consolidated net earnings and diluted earnings per share for
the fourth quarter of 2016 were $21.1 million and $0.59,
respectively, at an effective tax rate of 45.7%, which reflects the
effect of a change in tax law that was enacted in December 2016
related to the taxation of foreign currency translation gains or
losses arising from qualified business units and the effect of
non-deductible acquisition-related expenses incurred during the
fourth quarter of 2016.
- Adjusted consolidated net earnings and diluted earnings per
share for the fourth quarter of 2016 were $26.0 million and $0.72,
respectively.*
Results for the Year:
- Consolidated net sales of $5.5 billion for 2016 increased 2%
compared to 2015.
- Net sales in North America of $4.0 billion were up 4% year over
year;
- Net sales in EMEA of $1.3 billion decreased 2% year to year;
and
- Net sales in APAC of $175.1 million decreased 2% year to
year.
- Excluding the effects of fluctuating foreign currency exchange
rates, consolidated net sales increased 4% year over year, with net
sales growth in each of North America and EMEA of 4% year over
year, while net sales in APAC remained flat year over year.
- Consolidated gross profit of $743.1 million increased 4%
compared to 2015, with consolidated gross margin increasing
approximately 20 basis points to 13.5% of net sales.
- Gross profit in North America of $525.5 million (13.2% gross
margin) increased 5% year over year;
- Gross profit in EMEA of $185.7 million (13.9% gross margin) was
flat year over year; and
- Gross profit in APAC of $31.9 million (18.2% gross margin)
increased 12% year over year.
- Excluding the effects of fluctuating foreign currency exchange
rates, consolidated gross profit increased 6% year over year, and
gross profit in North America, EMEA and APAC increased 5%, 7% and
14%, respectively, year over year.
- Consolidated earnings from operations increased 18% compared to
2015 to $148.8 million, or 2.7% of net sales.
- Earnings from operations in North America increased 13% year
over year to $116.9 million, or 2.9% of net sales;
- Earnings from operations in EMEA increased 44% year over year
to $23.9 million, or 1.8% of net sales; and
- Earnings from operations in APAC increased 32% year over year
to $8.0 million, or 4.6% of net sales.
- Excluding the effects of fluctuating foreign currency exchange
rates, consolidated earnings from operations increased 20% year
over year, and earnings from operations in North America, EMEA and
APAC increased 13%, 60% and 33%, respectively, year over year.
- Adjusted consolidated earnings from operations increased 19%
year over year to $157.5 million, or 2.9% of net sales, for
2016.*
- Consolidated net earnings and diluted earnings per share for
2016 were $84.7 million and $2.32, respectively, at an effective
tax rate of 39.3%, which reflects the tax law change and
non-deductible acquisition-related expenses incurred during the
fourth quarter of 2016 noted previously.
- Adjusted consolidated net earnings and diluted earnings per
share for 2016 were $92.0 million and $2.52,
respectively.*
* In discussing financial results for the three months and years
ended December 31, 2016 and 2015 in this press release, the Company
refers to certain financial measures that are not prepared in
accordance with United States generally accepted accounting
principles (“GAAP”). When referring to non-GAAP measures, the
Company refers to such measures as “Adjusted.” Adjusted
measures exclude (i) severance and restructuring expenses recorded
in all periods, (ii) certain acquisition-related expenses and the
gain recorded on an asset held for sale during 2016, (iii) a
non-cash real estate impairment recorded during 2015 on real estate
that was sold in 2016 and (iv) the tax effects of each of these
items. See “Use of Non-GAAP Financial Measures” for
additional information. A tabular reconciliation of financial
measures prepared in accordance with GAAP to the non-GAAP financial
measures is included at the end of this press release.
The Company refers to changes in net sales, gross profit and
earnings from operations on a consolidated basis and in North
America, EMEA and APAC excluding the effects of fluctuating foreign
currency exchange rates. In computing these changes and
percentages, the Company compares the current year amount as
translated into U.S. dollars under the applicable accounting
standards to the prior year amount in local currency translated
into U.S. dollars utilizing the weighted average translation rate
for the current period.
The tax effect of Adjusted amounts referenced herein were
computed using the statutory tax rate for the taxing jurisdictions
in the operating segment in which the related expenses were
recorded, adjusted for the effects of valuation allowances on net
operating losses in certain jurisdictions.
GUIDANCE
For the full year 2017, with the addition of Datalink, which the
Company acquired on January 6, 2017, the Company expects its
business to deliver sales growth of 12% to 15% compared to
2016. The Company also expects Adjusted diluted earnings per
share for the full year 2017 to be between $2.80 and
$2.90.
This outlook for 2017 assumes:
- amortization expense associated with acquired intangible assets
of $16.7 million;
- an effective tax rate of approximately 37%; and
- capital expenditures of $15 to $20 million.
This outlook does not assume any severance and restructuring or
acquisition-related expenses. Due to the inherent difficulty
of forecasting these types of expenses, which impact net earnings
and diluted earnings per share, the Company is unable to reasonably
estimate the related impact of such expenses, if any, to net
earnings and diluted earnings per share. Accordingly, the
Company is unable to provide a reconciliation of GAAP to non-GAAP
diluted earnings per share for the full year 2017
forecast.
CONFERENCE CALL AND WEBCAST
The Company will host a conference call and live
web cast today at 5:00 p.m. ET to discuss fourth quarter and full
year 2016 results of operations. A live web cast of the
conference call (in listen-only mode) will be available on the
Company’s web site at
http://nsit.client.shareholder.com/events.cfm, and a replay of the
web cast will be available on the Company’s web site for a limited
time following the call. To listen to the live web cast by
telephone, call 1-877-402-8904 if located in the U.S., 678-809-1029
for international callers, and enter the access code 62071750.
NSIT-F
USE OF NON-GAAP FINANCIAL
MEASURES
The non-GAAP financial measures (referred to as Adjusted
consolidated earnings from operations, Adjusted consolidated net
earnings and Adjusted diluted earnings per share) exclude (i)
severance and restructuring expenses recorded in all periods, (ii)
certain acquisition-related expenses and the gain recorded on an
asset held for sale during 2016, (iii) a non-cash real estate
impairment recorded during 2015 on real estate that was sold in
2016 and (iv) the tax effects of each of these items. The
Company excludes these items when internally evaluating earnings
from operations, tax expense, net earnings and diluted earnings per
share for the Company and earnings from operations for each of the
Company’s operating segments. These non-GAAP measures are
used to evaluate financial performance against budgeted amounts, to
calculate incentive compensation, to assist in forecasting future
performance and to compare the Company’s results to those of the
Company’s competitors. The Company believes that these
non-GAAP financial measures are useful to investors because they
allow for greater transparency, facilitate comparisons to prior
periods and the Company’s competitors’ results and assist in
forecasting performance for future periods. These non-GAAP
financial measures are not prepared in accordance with GAAP and may
be different from non-GAAP financial measures presented by other
companies. Non-GAAP financial measures should not be
considered as a substitute for, or superior to, measures of
financial performance prepared in accordance with GAAP.
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Financial Summary Table |
(dollars in thousands, except per share
data) |
(Unaudited) |
|
|
Three Months Ended December
31, |
|
Years Ended December
31, |
Insight
Enterprises, Inc. |
2016 |
|
2015 |
|
change |
|
2016 |
|
2015 |
|
change |
Net sales |
$ |
1,467,583 |
|
$ |
1,387,185 |
|
6 |
% |
|
$ |
5,485,515 |
|
$ |
5,373,090 |
|
2 |
% |
Gross profit |
$ |
190,969 |
|
$ |
180,853 |
|
6 |
% |
|
$ |
743,102 |
|
$ |
716,332 |
|
4 |
% |
Gross margin |
|
13.0 |
% |
|
13.0 |
% |
- |
|
|
|
13.5 |
% |
|
13.3 |
% |
20 |
bps |
Selling and
administrative expenses |
$ |
145,066 |
|
$ |
147,310 |
|
(2 |
%) |
|
$ |
585,243 |
|
$ |
584,906 |
|
- |
|
Severance and
restructuring expenses |
$ |
1,527 |
|
$ |
2,995 |
|
(49 |
%) |
|
$ |
4,580 |
|
$ |
4,907 |
|
(7 |
%) |
Acquisition-related
expenses |
$ |
3,706 |
|
$ |
- |
|
* |
|
|
$ |
4,447 |
|
$ |
- |
|
* |
|
Earnings from
operations |
$ |
40,670 |
|
$ |
30,548 |
|
33 |
% |
|
$ |
148,832 |
|
$ |
126,519 |
|
18 |
% |
Net earnings |
$ |
21,100 |
|
$ |
18,576 |
|
14 |
% |
|
$ |
84,690 |
|
$ |
75,851 |
|
12 |
% |
Diluted earnings per
share |
$ |
0.59 |
|
$ |
0.50 |
|
18 |
% |
|
$ |
2.32 |
|
$ |
1.98 |
|
17 |
% |
|
|
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|
North
America |
|
|
|
|
|
|
|
|
Net sales |
$ |
1,057,353 |
|
$ |
999,737 |
|
6 |
% |
|
$ |
3,971,828 |
|
$ |
3,823,528 |
|
4 |
% |
Gross profit |
$ |
133,552 |
|
$ |
125,833 |
|
6 |
% |
|
$ |
525,481 |
|
$ |
501,563 |
|
5 |
% |
Gross margin |
|
12.6 |
% |
|
12.6 |
% |
- |
|
|
|
13.2 |
% |
|
13.1 |
% |
10 |
bps |
Selling and
administrative expenses |
$ |
100,169 |
|
$ |
101,375 |
|
(1 |
%) |
|
$ |
401,316 |
|
$ |
396,603 |
|
1 |
% |
Severance and
restructuring expenses |
$ |
515 |
|
$ |
253 |
|
104 |
% |
|
$ |
2,966 |
|
$ |
1,126 |
|
163 |
% |
Acquisition-related
expenses |
$ |
3,703 |
|
$ |
- |
|
* |
|
|
$ |
4,278 |
|
$ |
- |
|
* |
|
Earnings from
operations |
$ |
29,165 |
|
$ |
24,205 |
|
20 |
% |
|
$ |
116,921 |
|
$ |
103,834 |
|
13 |
% |
|
|
|
|
|
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|
|
EMEA |
|
|
|
|
|
|
|
|
Net sales |
$ |
361,760 |
|
$ |
342,034 |
|
6 |
% |
|
$ |
1,338,560 |
|
$ |
1,371,137 |
|
(2 |
%) |
Gross profit |
$ |
48,877 |
|
$ |
47,712 |
|
2 |
% |
|
$ |
185,687 |
|
$ |
186,287 |
|
- |
|
Gross margin |
|
13.5 |
% |
|
13.9 |
% |
(40 |
bps) |
|
|
13.9 |
% |
|
13.6 |
% |
30 |
bps |
Selling and
administrative expenses |
$ |
38,606 |
|
$ |
40,647 |
|
(5 |
%) |
|
$ |
160,269 |
|
$ |
165,879 |
|
(3 |
%) |
Severance and
restructuring expenses |
$ |
1,009 |
|
$ |
2,742 |
|
(63 |
%) |
|
$ |
1,496 |
|
$ |
3,781 |
|
(60 |
%) |
Earnings from
operations |
$ |
9,262 |
|
$ |
4,323 |
|
114 |
% |
|
$ |
23,922 |
|
$ |
16,627 |
|
44 |
% |
|
|
|
|
|
|
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|
|
APAC |
|
|
|
|
|
|
|
|
Net sales |
$ |
48,470 |
|
$ |
45,414 |
|
7 |
% |
|
$ |
175,127 |
|
$ |
178,425 |
|
(2 |
%) |
Gross profit |
$ |
8,540 |
|
$ |
7,308 |
|
17 |
% |
|
$ |
31,934 |
|
$ |
28,482 |
|
12 |
% |
Gross margin |
|
17.6 |
% |
|
16.1 |
% |
150 |
bps |
|
|
18.2 |
% |
|
16.0 |
% |
220 |
bps |
Selling and
administrative expenses |
$ |
6,291 |
|
$ |
5,288 |
|
19 |
% |
|
$ |
23,658 |
|
$ |
22,424 |
|
6 |
% |
Severance and
restructuring expenses |
$ |
3 |
|
$ |
- |
|
* |
|
|
$ |
118 |
|
$ |
- |
|
* |
|
Acquisition-related
expenses |
$ |
3 |
|
$ |
- |
|
* |
|
|
$ |
169 |
|
$ |
- |
|
* |
|
Earnings from
operations |
$ |
2,243 |
|
$ |
2,020 |
|
11 |
% |
|
$ |
7,989 |
|
$ |
6,058 |
|
32 |
% |
* Percentage change not considered
meaningful.
|
North America |
|
EMEA |
|
APAC |
|
Three Months Ended December 31, |
|
Three Months Ended December 31, |
|
Three Months Ended December 31, |
Sales Mix |
2016 |
|
2015 |
|
% change* |
|
2016 |
|
2015 |
|
% change* |
|
2016 |
|
2015 |
|
% change* |
Hardware |
62 |
% |
|
60 |
% |
|
8 |
% |
|
34 |
% |
|
38 |
% |
|
(6 |
%) |
|
11 |
% |
|
12 |
% |
|
(1 |
%) |
Software |
32 |
% |
|
34 |
% |
|
1 |
% |
|
62 |
% |
|
59 |
% |
|
12 |
% |
|
77 |
% |
|
85 |
% |
|
(3 |
%) |
Services |
6 |
% |
|
6 |
% |
|
7 |
% |
|
4 |
% |
|
3 |
% |
|
30 |
% |
|
12 |
% |
|
3 |
% |
|
274 |
% |
|
100 |
% |
|
100 |
% |
|
6 |
% |
|
100 |
% |
|
100 |
% |
|
6 |
% |
|
100 |
% |
|
100 |
% |
|
7 |
% |
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
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|
|
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|
|
|
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|
|
North America |
|
EMEA |
|
APAC |
|
Years Ended December 31, |
|
Years Ended December 31, |
|
Years Ended December 31, |
Sales Mix |
2016 |
|
2015 |
|
% change* |
|
2016 |
|
2015 |
|
% change* |
|
2016 |
|
2015 |
|
% change* |
Hardware |
62 |
% |
|
61 |
% |
|
5 |
% |
|
36 |
% |
|
39 |
% |
|
(9 |
%) |
|
11 |
% |
|
8 |
% |
|
32 |
% |
Software |
31 |
% |
|
32 |
% |
|
- |
|
|
61 |
% |
|
58 |
% |
|
1 |
% |
|
82 |
% |
|
89 |
% |
|
(9 |
%) |
Services |
7 |
% |
|
7 |
% |
|
10 |
% |
|
3 |
% |
|
3 |
% |
|
15 |
% |
|
7 |
% |
|
3 |
% |
|
107 |
% |
|
100 |
% |
|
100 |
% |
|
4 |
% |
|
100 |
% |
|
100 |
% |
|
(2 |
%) |
|
100 |
% |
|
100 |
% |
|
(2 |
%) |
|
|
|
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* Represents growth/decline in category net sales on a U.S.
dollar basis and does not exclude the effects of fluctuating
foreign currency exchange rates.
FORWARD-LOOKING INFORMATION
Certain statements in this release and the related conference
call and web cast are “forward-looking statements” within the
meaning of the Private Securities Litigation Reform Act of
1995. Forward-looking statements, including the Company’s
expected 2017 financial results, including sales growth rates and
diluted earnings per share, and the assumptions relating thereto,
including the Company’s amortization expense associated with
acquired intangible assets, effective tax rate and capital
expenditures for 2017, the strength of the Company’s offerings and
capabilities, the Company’s integration of Datalink Corporation
(“Datalink”) and the Company’s ability to deliver value to its
clients, partners and shareholders are inherently subject to risks
and uncertainties, some of which cannot be predicted or
quantified. Future events and actual results could differ
materially from those set forth in, contemplated by, or underlying
the forward-looking statements. There can be no assurances
that the results discussed by the forward-looking statements will
be achieved, and actual results may differ materially from those
set forth in the forward-looking statements. Some of the
important factors that could cause the Company’s actual results to
differ materially from those projected in any forward-looking
statements, include, but are not limited to, the following, which
are discussed in “Risk Factors” in Part I, Item 1A of the Company’s
Annual Report on Form 10-K for the year ended December 31, 2015 and
in other of the Company’s filings with the Securities and Exchange
Commission:
- risks associated with the acquisition and integration of
Datalink into the Company's operations, processes and systems,
including:
- the Company may be unable to achieve expected synergies and
operating efficiencies in connection with the acquisition within
the expected time frames or at all and to successfully integrate
Datalink's operations into those of the Company;
- such integration may be more difficult, time consuming or
costly than expected and may disrupt the Company's current plans
and operations;
- revenues following the transaction may be lower than
expected;
- operating costs, customer loss and business disruption
(including, without limitation, difficulties in maintaining
relationships with employees, customers, clients or suppliers) may
be greater than expected following the transaction;
- Datalink and/or the Company may be adversely affected by other
economic, business, and/or competitive factors; and
- the Company may not be able to retain the key employees of
Datalink;
- actions of the Company’s competitors, including manufacturers
and publishers of products the Company sells;
- the Company’s reliance on partners for product availability,
competitive products to sell and related marketing funds and
purchasing incentives;
- changes in the IT industry and/or rapid changes in
technology;
- possible significant fluctuations in the Company’s future
operating results;
- general economic conditions;
- the risks associated with the Company’s international
operations;
- the security of the Company’s electronic and other confidential
information;
- disruptions in the Company’s IT systems and voice and data
networks;
- failure to comply with the terms and conditions of the
Company’s commercial and public sector contracts;
- the Company’s reliance on commercial delivery services;
- the Company’s dependence on certain personnel;
- exposure to changes in, interpretations of, or enforcement
trends related to tax rules and regulations; and
- intellectual property infringement claims and challenges to the
Company’s registered trademarks and trade names.
Additionally, there may be other risks that are otherwise
described from time to time in the reports that the Company files
with the Securities and Exchange Commission. Any
forward-looking statements in this release should be considered in
light of various important factors, including the risks and
uncertainties listed above, as well as others. The Company
assumes no obligation to update, and, except as may be required by
law, does not intend to update, any forward-looking
statements. The Company does not endorse any projections
regarding future performance that may be made by third parties.
|
INSIGHT ENTERPRISES, INC. AND
SUBSIDIARIES |
Consolidated Statements of
Operations |
(In thousands, except per share
data) |
(Unaudited) |
|
|
Three Months Ended
December 31, |
|
|
Years Ended December
31, |
|
|
|
2016 |
|
|
2015 |
|
|
|
2016 |
|
|
2015 |
|
Net sales |
$ |
1,467,583 |
|
$ |
1,387,185 |
|
|
$ |
5,485,515 |
|
$ |
5,373,090 |
|
Costs of goods
sold |
|
1,276,614 |
|
|
1,206,332 |
|
|
|
4,742,413 |
|
|
4,656,758 |
|
Gross
profit |
|
190,969 |
|
|
180,853 |
|
|
|
743,102 |
|
|
716,332 |
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling
and administrative expenses |
|
145,066 |
|
|
147,310 |
|
|
|
585,243 |
|
|
584,906 |
|
Severance
and restructuring expenses |
|
1,527 |
|
|
2,995 |
|
|
|
4,580 |
|
|
4,907 |
|
Acquisition-related expenses |
|
3,706 |
|
|
- |
|
|
|
4,447 |
|
|
- |
|
Earnings
from operations |
|
40,670 |
|
|
30,548 |
|
|
|
148,832 |
|
|
126,519 |
|
Non-operating (income)
expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income |
|
(282 |
) |
|
(172 |
) |
|
|
(1,066 |
) |
|
(783 |
) |
Interest
expense |
|
2,271 |
|
|
1,706 |
|
|
|
8,628 |
|
|
7,224 |
|
Net
foreign currency exchange (gain) loss |
|
(520 |
) |
|
535 |
|
|
|
522 |
|
|
(393 |
) |
Other
expense, net |
|
311 |
|
|
326 |
|
|
|
1,290 |
|
|
1,295 |
|
Earnings
before income taxes |
|
38,890 |
|
|
28,153 |
|
|
|
139,458 |
|
|
119,176 |
|
Income tax expense |
|
17,790 |
|
|
9,577 |
|
|
|
54,768 |
|
|
43,325 |
|
Net earnings |
$ |
21,100 |
|
$ |
18,576 |
|
|
$ |
84,690 |
|
$ |
75,851 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per
share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.59 |
|
$ |
0.50 |
|
|
$ |
2.35 |
|
$ |
2.00 |
|
Diluted |
$ |
0.59 |
|
$ |
0.50 |
|
|
$ |
2.32 |
|
$ |
1.98 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in per
share calculations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
35,479 |
|
|
37,099 |
|
|
|
36,102 |
|
|
37,984 |
|
Diluted |
|
35,963 |
|
|
37,429 |
|
|
|
36,438 |
|
|
38,275 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INSIGHT ENTERPRISES, INC. AND
SUBSIDIARIES |
Consolidated Balance Sheets |
(In thousands) |
(Unaudited) |
|
|
December 31, |
|
|
2016 |
|
2015 |
|
ASSETS |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and
cash equivalents |
$ |
202,882 |
|
$ |
187,978 |
|
Accounts
receivable, net |
|
1,436,742 |
|
|
1,315,094 |
|
Inventories |
|
148,203 |
|
|
119,820 |
|
Inventories not available for sale |
|
68,619 |
|
|
51,756 |
|
Other
current assets |
|
127,159 |
|
|
77,011 |
|
Total
current assets |
|
1,983,605 |
|
|
1,751,659 |
|
|
|
|
|
|
|
|
Property and equipment,
net |
|
70,910 |
|
|
88,281 |
|
Goodwill |
|
62,645 |
|
|
56,195 |
|
Intangible assets,
net |
|
20,707 |
|
|
26,983 |
|
Deferred income
taxes |
|
52,347 |
|
|
62,986 |
|
Other assets |
|
29,086 |
|
|
27,913 |
|
|
$ |
2,219,300 |
|
$ |
2,014,017 |
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
Accounts
payable – trade |
$ |
1,070,259 |
|
$ |
905,464 |
|
Accounts
payable – inventory financing facility |
|
154,930 |
|
|
106,327 |
|
Accrued
expenses and other current liabilities |
|
151,895 |
|
|
144,633 |
|
Current
portion of long-term debt |
|
480 |
|
|
1,535 |
|
Deferred
revenue |
|
61,098 |
|
|
50,166 |
|
Total
current liabilities |
|
1,438,662 |
|
|
1,208,125 |
|
|
|
|
|
|
|
|
Long-term debt |
|
40,251 |
|
|
89,000 |
|
Deferred income
taxes |
|
900 |
|
|
239 |
|
Other liabilities |
|
26,044 |
|
|
30,911 |
|
|
|
1,505,857 |
|
|
1,328,275 |
|
Stockholders’
equity: |
|
|
|
|
|
|
Preferred
stock |
|
- |
|
|
- |
|
Common
stock |
|
355 |
|
|
371 |
|
Additional paid-in capital |
|
309,650 |
|
|
316,686 |
|
Retained
earnings |
|
459,537 |
|
|
408,721 |
|
Accumulated other comprehensive loss – foreign currency translation
adjustments |
|
(56,099 |
) |
|
(40,036 |
) |
Total
stockholders’ equity |
|
713,443 |
|
|
685,742 |
|
|
$ |
2,219,300 |
|
$ |
2,014,017 |
|
|
|
|
|
|
|
|
INSIGHT ENTERPRISES, INC. AND
SUBSIDIARIES |
|
Consolidated Statements of Cash
Flows |
|
(In thousands) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
Years Ended December 31, |
|
|
2016 |
|
2015 |
|
Cash flows from
operating activities: |
|
|
|
|
|
|
Net
earnings |
$ |
84,690 |
|
$ |
75,851 |
|
Adjustments to reconcile net earnings to net cash provided by
operating activities: |
|
|
|
|
|
|
Depreciation and amortization of property and equipment |
|
27,493 |
|
|
26,649 |
|
Amortization of intangible assets |
|
10,637 |
|
|
11,308 |
|
Non-cash
real estate impairment |
|
- |
|
|
800 |
|
Provision
for losses on accounts receivable |
|
2,452 |
|
|
6,761 |
|
Write-downs of inventories |
|
2,934 |
|
|
3,997 |
|
Write-off
of property and equipment |
|
- |
|
|
535 |
|
Non-cash
stock-based compensation |
|
11,058 |
|
|
8,922 |
|
Excess
tax benefit from employee gains on stock-based compensation |
|
(323 |
) |
|
(592 |
) |
Deferred
income taxes |
|
10,517 |
|
|
5,174 |
|
Gain on
sale of real estate |
|
(338 |
) |
|
- |
|
Changes
in assets and liabilities: |
|
|
|
|
|
|
Increase
in accounts receivable |
|
(168,966 |
) |
|
(47,206 |
) |
Increase
in inventories |
|
(50,712 |
) |
|
(9,214 |
) |
Increase
in other assets |
|
(50,130 |
) |
|
(26,714 |
) |
Increase
in accounts payable |
|
193,582 |
|
|
113,594 |
|
Increase
in deferred revenue |
|
10,633 |
|
|
2,927 |
|
Increase
in accrued expenses and other liabilities |
|
12,278 |
|
|
7,718 |
|
Net cash
provided by operating activities |
|
95,805 |
|
|
180,510 |
|
Cash flows from
investing activities: |
|
|
|
|
|
|
Acquisition of Ignia, net of cash acquired |
|
(10,804 |
) |
|
- |
|
Acquisition of BlueMetal, net of cash acquired |
|
507 |
|
|
(44,221 |
) |
Purchases
of property and equipment |
|
(12,266 |
) |
|
(13,416 |
) |
Proceeds
from sale of real estate, net |
|
1,378 |
|
|
- |
|
Net cash
used in investing activities |
|
(21,185 |
) |
|
(57,637 |
) |
Cash flows from
financing activities: |
|
|
|
|
|
|
Borrowings on senior revolving credit facility |
|
772,218 |
|
|
686,410 |
|
Repayments on senior revolving credit facility |
|
(772,218 |
) |
|
(686,410 |
) |
Borrowings on accounts receivable securitization financing
facility |
|
2,802,000 |
|
|
1,897,100 |
|
Repayments on accounts receivable securitization financing
facility |
|
(2,851,500 |
) |
|
(1,869,100 |
) |
Repayments under other financing agreements |
|
(1,309 |
) |
|
(543 |
) |
Payments
on capital lease obligations |
|
(445 |
) |
|
(223 |
) |
Net
borrowings (repayments) under inventory financing facility |
|
48,603 |
|
|
(16,454 |
) |
Payment
of deferred financing fees |
|
(3,360 |
) |
|
- |
|
Excess
tax benefit from employee gains on stock-based compensation |
|
323 |
|
|
592 |
|
Payment
of payroll taxes on stock-based compensation through shares
withheld |
|
(2,219 |
) |
|
(2,265 |
) |
Repurchases of common stock |
|
(50,000 |
) |
|
(91,843 |
) |
Net cash
used in financing activities |
|
(57,907 |
) |
|
(82,736 |
) |
Foreign currency
exchange effect on cash and cash equivalent balances |
|
(1,809 |
) |
|
(16,683 |
) |
Increase in cash and
cash equivalents |
|
14,904 |
|
|
23,454 |
|
Cash and cash
equivalents at beginning of year |
|
187,978 |
|
|
164,524 |
|
Cash and cash
equivalents at end of year |
$ |
202,882 |
|
$ |
187,978 |
|
|
|
|
|
|
|
|
INSIGHT ENTERPRISES, INC. AND
SUBSIDIARIES |
Reconciliation of GAAP to Non-GAAP Financial
Measures |
(In thousands, except per share
data) |
(unaudited) |
|
|
Three Months Ended December
31, |
|
Years Ended December
31, |
|
|
|
2016 |
|
|
2015 |
|
|
2016 |
|
|
2015 |
|
Adjusted
Consolidated Earnings from Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP |
$ |
40,670 |
|
$ |
30,548 |
|
$ |
148,832 |
|
$ |
126,519 |
|
Severance and
restructuring expenses |
|
1,527 |
|
|
2,995 |
|
|
4,580 |
|
|
4,907 |
|
Acquisition-related
expenses |
|
3,706 |
|
|
- |
|
|
4,447 |
|
|
- |
|
Non-cash real estate
impairment |
|
- |
|
|
- |
|
|
- |
|
|
800 |
|
Gain on
sale of real estate for which a non-cash impairment charge was
previously reported |
|
- |
|
|
- |
|
|
(338 |
) |
|
- |
|
Non-GAAP |
$ |
45,903 |
|
$ |
33,543 |
|
$ |
157,521 |
|
$ |
132,226 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
Consolidated Net Earnings: |
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP |
$ |
21,100 |
|
$ |
18,576 |
|
$ |
84,690 |
|
$ |
75,851 |
|
Severance and
restructuring expenses |
|
1,527 |
|
|
2,995 |
|
|
4,580 |
|
|
4,907 |
|
Acquisition-related
expenses |
|
3,706 |
|
|
- |
|
|
4,447 |
|
|
- |
|
Non-cash real estate
impairment. |
|
- |
|
|
- |
|
|
- |
|
|
800 |
|
Gain on sale of real
estate for which a non-cash impairment charge was previously
reported |
|
- |
|
|
- |
|
|
(338 |
) |
|
- |
|
Income taxes on
non-GAAP adjustments |
|
(331 |
) |
|
(177 |
) |
|
(1,414 |
) |
|
(867 |
) |
Non-GAAP |
$ |
26,002 |
|
$ |
21,394 |
|
$ |
91,965 |
|
$ |
80,691 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
Consolidated Diluted EPS: |
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP |
$ |
0.59 |
|
$ |
0.50 |
|
$ |
2.32 |
|
$ |
1.98 |
|
Severance and
restructuring expenses |
|
0.04 |
|
|
0.08 |
|
|
0.13 |
|
|
0.13 |
|
Acquisition-related
expenses |
|
0.10 |
|
|
- |
|
|
0.12 |
|
|
- |
|
Non-cash real estate
impairment |
|
- |
|
|
- |
|
|
- |
|
|
0.02 |
|
Gain on sale of real
estate for which a non-cash impairment charge was previously
reported |
|
- |
|
|
- |
|
|
(0.01 |
) |
|
- |
|
Income taxes on
non-GAAP adjustments |
|
(0.01 |
) |
|
(0.01 |
) |
|
(0.04 |
) |
|
(0.02 |
) |
Non-GAAP |
$ |
0.72 |
|
$ |
0.57 |
|
$ |
2.52 |
|
$ |
2.11 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December
31, |
|
Years Ended December
31, |
|
|
|
2016 |
|
|
2015 |
|
|
2016 |
|
|
2015 |
|
Adjusted North
America Earnings from Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP |
$ |
29,165 |
|
$ |
24,205 |
|
$ |
116,921 |
|
$ |
103,834 |
|
Severance and
restructuring expenses |
|
515 |
|
|
253 |
|
|
2,966 |
|
|
1,126 |
|
Acquisition-related
expenses |
|
3,703 |
|
|
- |
|
|
4,278 |
|
|
- |
|
Non-cash real estate
impairment |
|
- |
|
|
- |
|
|
- |
|
|
800 |
|
Gain on sale of real
estate for which a non-cash impairment charge was previously
reported |
|
- |
|
|
- |
|
|
(338 |
) |
|
- |
|
Non-GAAP |
$ |
33,383 |
|
$ |
24,458 |
|
$ |
123,827 |
|
$ |
105,760 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EMEA
Earnings from Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP |
$ |
9,262 |
|
$ |
4,323 |
|
$ |
23,922 |
|
$ |
16,627 |
|
Severance and
restructuring expenses |
|
1,009 |
|
|
2,742 |
|
|
1,496 |
|
|
3,781 |
|
Non-GAAP |
$ |
10,271 |
|
$ |
7,065 |
|
$ |
25,418 |
|
$ |
20,408 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted APAC
Earnings from Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP |
$ |
2,243 |
|
$ |
2,020 |
|
$ |
7,989 |
|
$ |
6,058 |
|
Severance and
restructuring expenses |
|
3 |
|
|
- |
|
|
118 |
|
|
- |
|
Acquisition-related
expenses |
|
3 |
|
|
- |
|
|
169 |
|
|
- |
|
Non-GAAP |
$ |
2,249 |
|
$ |
2,020 |
|
$ |
8,276 |
|
$ |
6,058 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contacts:
Glynis Bryan
Chief Financial Officer
Tel. 480.333.3390
Email glynis.bryan@insight.com
Helen Johnson
Senior VP, Finance
Tel. 480.333.3234
Email helen.johnson@insight.com
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