Insight Enterprises, Inc. (Nasdaq:NSIT) (the
“Company”) today reported results of operations for the quarter
ended June 30, 2017.
- Net sales up 16% to $1.68 billion.
- Gross profit up 20% to $251.4 million.
- Earnings from operations up 19% to $69.3 million.
- Diluted earnings per share of $1.11, up 16% year over
year.
In the second quarter of 2017, consolidated net sales were up
16% year over year, reflecting both solid organic growth and the
addition of Datalink to our business.
Gross margin expansion and effective cost control in our core
business, combined with a positive contribution from the Datalink
business acquired in January 2017, led to a 19% year over year
increase in consolidated earnings from operations in the second
quarter of 2017.
Diluted earnings per share increased to $1.11 compared to $0.96
for the second quarter of 2016. Adjusted diluted earnings per
share was $1.14 in the second quarter of 2017 compared to $0.97
reported in the second quarter of last year.*
“I am pleased to report that strong sales execution and
operational discipline in a stable and growing IT market allowed us
to deliver record results in the first half of 2017,” stated Ken
Lamneck, President and Chief Executive Officer. “As we head
into the second half of 2017, we believe our growing cloud, data
center and supply chain offerings, combined with our strong
operational focus, will position us well to continue to gain market
share and deliver value to our stakeholders,” stated
Lamneck.
KEY HIGHLIGHTS
- Consolidated net sales of $1.68 billion for the second quarter
of 2017 increased 16% compared to the second quarter of 2016.•
Net sales in North America of $1.3 billion were up 24% year
over year;• Net sales in EMEA of $346.1 million decreased 4%
year to year; and• Net sales in APAC of $56.7 million
decreased 3% year to year.
- Excluding the effects of fluctuating foreign currency exchange
rates, consolidated net sales increased 17% year over year, with
net sales growth in North America and EMEA of 24% and 1%,
respectively, and a decline in APAC of 3% year to year.
- Consolidated gross profit of $251.4 million increased 20%
compared to the second quarter of 2016, with consolidated gross
margin increasing to 14.9% of net sales.• Gross profit in
North America of $182.8 million (14.3% gross margin) increased 27%
year over year;• Gross profit in EMEA of $55.7 million (16.1%
gross margin) increased 1% year over year; and• Gross profit
in APAC of $12.9 million (22.7% gross margin) increased 19% year
over year.
- Excluding the effects of fluctuating foreign currency exchange
rates, consolidated gross profit increased 22% year over year, and
gross profit in North America, EMEA and APAC increased 28%, 8% and
19%, respectively, year over year.
- Consolidated earnings from operations increased 19% compared to
the second quarter of 2016 to $69.3 million, or 4.1% of net sales.
• Earnings from operations in North America increased
21% year over year to $50.4 million, or 3.9% of net sales;•
Earnings from operations in EMEA increased 16% year over year
to $13.5 million, or 3.9% of net sales; and• Earnings from
operations in APAC increased 10% year over year to $5.4 million, or
9.6% 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 22%, 20% and 9%, respectively, year over year.
- Adjusted consolidated earnings from operations increased 20%
year over year to $70.6 million, or 4.2% of net sales, for the
second quarter of 2017.*
- Consolidated net earnings and diluted earnings per share for
the second quarter of 2017 were $40.3 million and $1.11,
respectively, at an effective tax rate of 37.7%.
- Adjusted consolidated net earnings and Adjusted diluted
earnings per share for the second quarter of 2017 were $41.2
million and $1.14, respectively.** In discussing financial results
for the three and six months ended June 30, 2017 and 2016 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, (ii) certain acquisition-related expenses,
(iii) a gain on sale of real estate in the 2016 periods and (iv)
the tax effects 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, the Company now expects its business to
deliver sales growth of 17% to 19% compared to 2016. The
Company is also increasing its Adjusted diluted earnings per share
outlook for the full year of 2017 to $3.15 to $3.25.
This outlook assumes an effective tax rate of approximately 38%
for the balance of 2017.
This outlook also excludes severance and restructuring and
acquisition-related expenses incurred during the first half of 2017
and those that may be incurred during the balance of 2017, as well
as an approximate $3 million non-cash charge as a result of the
sale of the Company’s Russia business in mid July 2017. Due
to the inherent difficulty of forecasting severance and
restructuring and acquisition-related expenses, which impact net
earnings and diluted earnings per share, the Company is unable to
reasonably estimate the future 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 second quarter 2017 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 58891539.
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, (ii) certain
acquisition-related expenses, (iii) a gain on sale of real estate
in the 2016 periods and (iv) the tax effects 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.
|
FINANCIAL SUMMARY
TABLE(DOLLARS IN THOUSANDS, EXCEPT PER SHARE
DATA)(UNAUDITED) |
|
|
Three Months Ended June
30, |
Six Months Ended June 30, |
|
|
2017 |
|
|
2016 |
|
change |
|
2017 |
|
|
2016 |
|
change |
Insight Enterprises, Inc. |
Net sales |
$ |
1,684,032 |
|
$ |
1,456,234 |
|
16 |
% |
$ |
3,161,575 |
|
$ |
2,625,216 |
|
20 |
% |
Gross profit |
$ |
251,379 |
|
$ |
209,217 |
|
20 |
% |
$ |
459,606 |
|
$ |
370,325 |
|
24 |
% |
Gross margin |
|
14.9 |
% |
|
14.4 |
% |
50 bps |
|
14.5 |
% |
|
14.1 |
% |
40 bps |
Selling and administrative expenses |
$ |
180,752 |
|
$ |
150,186 |
|
20 |
% |
$ |
358,384 |
|
$ |
296,305 |
|
21 |
% |
Severance and restructuring expenses |
$ |
1,022 |
|
$ |
909 |
|
12 |
% |
$ |
5,717 |
|
$ |
2,265 |
|
152 |
% |
Acquisition-related expenses |
$ |
276 |
|
$ |
- |
|
* |
|
$ |
3,223 |
|
|
- |
|
* |
|
Earnings from operations |
$ |
69,329 |
|
$ |
58,122 |
|
19 |
% |
$ |
92,282 |
|
$ |
71,755 |
|
29 |
% |
Net earnings |
$ |
40,255 |
|
$ |
35,067 |
|
15 |
% |
$ |
54,103 |
|
$ |
41,955 |
|
29 |
% |
Diluted earnings per share |
$ |
1.11 |
|
$ |
0.96 |
|
16 |
% |
$ |
1.50 |
|
$ |
1.13 |
|
33 |
% |
|
|
|
|
|
|
|
North America |
Net sales |
$ |
1,281,312 |
|
$ |
1,036,254 |
|
24 |
% |
$ |
2,392,264 |
|
$ |
1,863,142 |
|
28 |
% |
Gross profit |
$ |
182,786 |
|
$ |
143,368 |
|
27 |
% |
$ |
341,087 |
|
$ |
255,111 |
|
34 |
% |
Gross margin |
|
14.3 |
% |
|
13.8 |
% |
50 bps |
|
14.3 |
% |
|
13.7 |
% |
60 bps |
Selling and administrative expenses |
$ |
131,560 |
|
$ |
101,261 |
|
30 |
% |
$ |
262,570 |
|
$ |
201,302 |
|
30 |
% |
Severance and restructuring expenses |
$ |
543 |
|
$ |
591 |
|
(8 |
%) |
$ |
1,647 |
|
$ |
1,808 |
|
(9 |
%) |
Acquisition-related expenses |
$ |
276 |
|
$ |
- |
|
* |
|
$ |
3,223 |
|
|
- |
|
* |
|
Earnings from operations |
$ |
50,407 |
|
$ |
41,516 |
|
21 |
% |
$ |
73,647 |
|
$ |
52,001 |
|
42 |
% |
|
|
|
|
|
|
|
Sales Mix |
|
|
** |
|
|
** |
Hardware |
|
63 |
% |
|
61 |
% |
27 |
% |
|
63 |
% |
|
62 |
% |
32 |
% |
Software |
|
29 |
% |
|
32 |
% |
13 |
% |
|
28 |
% |
|
31 |
% |
17 |
% |
Services |
|
8 |
% |
|
7 |
% |
43 |
% |
|
9 |
% |
|
7 |
% |
51 |
% |
|
|
100 |
% |
|
100 |
% |
24 |
% |
|
100 |
% |
|
100 |
% |
28 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EMEA |
Net sales |
$ |
346,060 |
|
$ |
361,708 |
|
(4 |
%) |
$ |
676,415 |
|
$ |
665,068 |
|
2 |
% |
Gross profit |
$ |
55,733 |
|
$ |
55,076 |
|
1 |
% |
$ |
98,279 |
|
$ |
98,502 |
|
- |
|
Gross margin |
|
16.1 |
% |
|
15.2 |
% |
90 bps |
|
14.5 |
% |
|
14.8 |
% |
(30 bps) |
Selling and administrative expenses |
$ |
41,772 |
|
$ |
43,091 |
|
(3 |
%) |
$ |
81,915 |
|
$ |
83,770 |
|
(2 |
%) |
Severance and restructuring expenses |
$ |
479 |
|
$ |
318 |
|
51 |
% |
$ |
4,009 |
|
$ |
342 |
|
* |
|
Earnings from operations |
$ |
13,482 |
|
$ |
11,667 |
|
16 |
% |
$ |
12,355 |
|
$ |
14,390 |
|
(14 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales Mix |
|
|
** |
|
|
** |
Hardware |
|
36 |
% |
|
31 |
% |
11 |
% |
|
39 |
% |
|
35 |
% |
14 |
% |
Software |
|
60 |
% |
|
66 |
% |
(12 |
%) |
|
58 |
% |
|
62 |
% |
(5 |
%) |
Services |
|
4 |
% |
|
3 |
% |
4 |
% |
|
3 |
% |
|
3 |
% |
11 |
% |
|
|
100 |
% |
|
100 |
% |
(4 |
%) |
|
100 |
% |
|
100 |
% |
2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Percentage change not considered meaningful.**
Change in sales mix 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.
|
FINANCIAL SUMMARY TABLE
(CONTINUED)(DOLLARS IN THOUSANDS, EXCEPT
PER SHARE DATA)(UNAUDITED) |
|
|
Three Months Ended June
30, |
Six Months Ended June 30, |
|
|
2017 |
|
|
2016 |
|
change |
|
|
2017 |
|
|
2016 |
|
change |
APAC |
Net sales |
$ |
56,660 |
|
$ |
58,272 |
|
(3 |
%) |
|
$ |
92,896 |
|
$ |
97,006 |
|
(4 |
%) |
Gross profit |
$ |
12,860 |
|
$ |
10,773 |
|
19 |
% |
|
$ |
20,240 |
|
$ |
16,712 |
|
21 |
% |
Gross margin |
|
22.7 |
% |
|
18.5 |
% |
420 bps |
|
|
21.8 |
% |
|
17.2 |
% |
460 bps |
Selling and administrative expenses |
$ |
7,420 |
|
$ |
5,834 |
|
27 |
% |
|
$ |
13,899 |
|
$ |
11,233 |
|
24 |
% |
Severance and restructuring expenses |
$ |
- |
|
$ |
- |
|
- |
|
|
$ |
61 |
|
$ |
115 |
|
(47 |
%) |
Earnings from operations |
$ |
5,440 |
|
$ |
4,939 |
|
10 |
% |
|
$ |
6,280 |
|
$ |
5,364 |
|
17 |
% |
|
|
|
|
|
|
|
Sales Mix |
|
|
** |
|
|
** |
Hardware |
|
12 |
% |
|
9 |
% |
28 |
% |
|
|
12 |
% |
|
9 |
% |
21 |
% |
Software |
|
78 |
% |
|
87 |
% |
(13 |
%) |
|
|
77 |
% |
|
87 |
% |
(15 |
%) |
Services |
|
10 |
% |
|
4 |
% |
158 |
% |
|
|
11 |
% |
|
4 |
% |
190 |
% |
|
|
100 |
% |
|
100 |
% |
(3 |
%) |
|
|
100 |
% |
|
100 |
% |
(4 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
** Change in sales mix 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
Adjusted diluted earnings per share, and the assumptions relating
thereto, including the Company’s effective tax rate for 2017, its
expected non-cash loss on the sale of its Russia business, and the
Company’s expectations of gaining market share and closing out 2017
strong 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, 2016 and in other of the
Company’s filings with the Securities and Exchange
Commission:
- 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 information technology (“IT”) industry and/or
rapid changes in technology;
- risks associated with the integration and operation of acquired
businesses;
- possible significant fluctuations in the Company’s future
operating results;
- the risks associated with the Company’s international
operations;
- general economic conditions;
- increased debt and interest expense and decreased availability
of funds under the Company’s financing facilities;
- 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;
- accounts receivable risks, including increased credit loss
experience or extended payment terms with the Company’s
clients;
- the Company’s reliance on independent shipping companies;
- the Company’s dependence on certain personnel;
- natural disasters or other adverse occurrences;
- exposure to changes in, interpretations of, or enforcement
trends related to tax rules and regulations;
- intellectual property infringement claims and challenges to the
Company’s registered trademarks and trade names; and
- legal proceedings and audits and failure to comply with laws
and regulations.
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
SUBSIDIARIESCONSOLIDATED STATEMENTS OF
OPERATIONS(IN THOUSANDS, EXCEPT PER SHARE
DATA)(UNAUDITED) |
|
|
Three Months Ended June
30, |
|
|
Six Months Ended June
30, |
|
|
|
2017 |
|
|
2016 |
|
|
|
2017 |
|
|
2016 |
|
Net sales |
$ |
1,684,032 |
|
$ |
1,456,234 |
|
|
$ |
3,161,575 |
|
$ |
2,625,216 |
|
Costs of goods
sold |
|
1,432,653 |
|
|
1,247,017 |
|
|
|
2,701,969 |
|
|
2,254,891 |
|
Gross
profit |
|
251,379 |
|
|
209,217 |
|
|
|
459,606 |
|
|
370,325 |
|
Operating
expenses: |
|
|
|
|
Selling and
administrative expenses |
|
180,752 |
|
|
150,186 |
|
|
|
358,384 |
|
|
296,305 |
|
Severance and
restructuring expenses |
|
1,022 |
|
|
909 |
|
|
|
5,717 |
|
|
2,265 |
|
Acquisition-related expenses |
|
276 |
|
|
- |
|
|
|
3,223 |
|
|
- |
|
Earnings
from operations |
|
69,329 |
|
|
58,122 |
|
|
|
92,282 |
|
|
71,755 |
|
Non-operating (income)
expense: |
|
|
|
|
Interest
income |
|
(205 |
) |
|
(216 |
) |
|
|
(636 |
) |
|
(466 |
) |
Interest
expense |
|
4,326 |
|
|
1,992 |
|
|
|
8,259 |
|
|
3,840 |
|
Net foreign
currency exchange loss (gain) |
|
251 |
|
|
(153 |
) |
|
|
631 |
|
|
463 |
|
Other expense,
net |
|
326 |
|
|
359 |
|
|
|
641 |
|
|
627 |
|
Earnings
before income taxes |
|
64,631 |
|
|
56,140 |
|
|
|
83,387 |
|
|
67,291 |
|
Income tax expense |
|
24,376 |
|
|
21,073 |
|
|
|
29,284 |
|
|
25,336 |
|
Net earnings |
$ |
40,255 |
|
$ |
35,067 |
|
|
$ |
54,103 |
|
$ |
41,955 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per
share: |
|
|
|
|
Basic |
$ |
1.13 |
|
$ |
0.96 |
|
|
$ |
1.52 |
|
$ |
1.14 |
|
Diluted |
$ |
1.11 |
|
$ |
0.96 |
|
|
$ |
1.50 |
|
$ |
1.13 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in per
share calculations: |
|
|
|
|
Basic |
|
35,765 |
|
|
36,380 |
|
|
|
35,684 |
|
|
36,728 |
|
Diluted |
|
36,169 |
|
|
36,612 |
|
|
|
36,177 |
|
|
36,999 |
|
|
INSIGHT ENTERPRISES, INC. AND
SUBSIDIARIESCONSOLIDATED BALANCE
SHEETS(IN
THOUSANDS)(UNAUDITED) |
|
|
June 30, |
|
December 31, |
|
2017 |
|
2016 |
ASSETS |
|
|
|
|
|
|
|
|
Current
assets: |
|
|
|
|
|
|
|
|
Cash and
cash equivalents |
$ |
194,783 |
|
$ |
202,882 |
|
Accounts
receivable, net |
|
1,821,694 |
|
|
1,436,742 |
|
Inventories |
|
210,496 |
|
|
148,203 |
|
Inventories not available for sale |
|
61,856 |
|
|
68,619 |
|
Other
current assets |
|
212,228 |
|
|
127,159 |
|
Total
current assets |
|
2,501,057 |
|
|
1,983,605 |
|
|
|
|
Property and equipment,
net |
|
77,486 |
|
|
70,910 |
|
Goodwill |
|
127,226 |
|
|
62,645 |
|
Intangible assets,
net |
|
107,006 |
|
|
20,707 |
|
Deferred income
taxes |
|
40,434 |
|
|
52,347 |
|
Other assets |
|
65,258 |
|
|
29,086 |
|
|
$ |
2,918,467 |
|
$ |
2,219,300 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
Current
liabilities: |
|
|
Accounts
payable – trade |
$ |
1,288,764 |
|
$ |
1,070,259 |
|
Accounts
payable – inventory financing facility |
|
203,901 |
|
|
154,930 |
|
Accrued
expenses and other current liabilities |
|
174,381 |
|
|
151,895 |
|
Current
portion of long-term debt |
|
14,644 |
|
|
480 |
|
Deferred
revenue |
|
115,764 |
|
|
61,098 |
|
Total
current liabilities |
|
1,797,454 |
|
|
1,438,662 |
|
|
|
|
Long-term debt |
|
286,219 |
|
|
40,251 |
|
Deferred income
taxes |
|
702 |
|
|
900 |
|
Other liabilities |
|
48,090 |
|
|
26,044 |
|
|
|
2,132,465 |
|
|
1,505,857 |
|
Stockholders’
equity: |
|
|
|
|
|
|
|
|
Preferred
stock |
|
- |
|
|
- |
|
Common
stock |
|
358 |
|
|
355 |
|
Additional paid-in capital |
|
311,848 |
|
|
309,650 |
|
Retained
earnings |
|
513,640 |
|
|
459,537 |
|
Accumulated other comprehensive loss – foreign currency translation
adjustments |
|
(39,844 |
) |
|
(56,099 |
) |
Total
stockholders’ equity |
|
786,002 |
|
|
713,443 |
|
|
$ |
2,918,467 |
|
$ |
2,219,300 |
|
|
INSIGHT ENTERPRISES, INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH
FLOWS (IN
THOUSANDS)(UNAUDITED) |
|
|
Six Months Ended
June 30, |
|
2017 |
|
2016 |
Cash flows from
operating activities: |
|
|
|
|
|
|
|
Net
earnings |
$ |
54,103 |
|
|
$ |
41,955 |
|
Adjustments to reconcile net earnings to net cash used in operating
activities: |
|
|
Depreciation and amortization of property and equipment of |
|
12,729 |
|
|
|
13,963 |
|
Amortization of intangible assets |
|
8,433 |
|
|
|
6,499 |
|
Provision for losses on accounts receivable |
|
2,225 |
|
|
|
1,255 |
|
Write-downs of inventories |
|
1,077 |
|
|
|
1,164 |
|
Non-cash stock-based compensation |
|
6,749 |
|
|
|
5,283 |
|
Deferred income taxes |
|
(25 |
) |
|
|
1,662 |
|
Gain on sale of real estate |
|
- |
|
|
|
(338 |
) |
Changes
in assets and liabilities, net of acquisitions: |
|
|
Increase in accounts receivable |
|
(230,762 |
) |
|
|
(178,019 |
) |
Increase in inventories |
|
(54,276 |
) |
|
|
(28,604 |
) |
Increase in other assets |
|
(64,875 |
) |
|
|
(12,563 |
) |
Increase in accounts payable |
|
163,451 |
|
|
|
131,886 |
|
Increase in deferred revenue |
|
4,944 |
|
|
|
1,208 |
|
(Decrease) increase in accrued expenses and other liabilities |
|
(3,039 |
) |
|
|
10,027 |
|
Net cash used in operating activities |
|
(99,266 |
) |
|
|
(4,622 |
) |
Cash flows from
investing activities: |
|
|
Purchases
of property and equipment |
|
(10,274 |
) |
|
|
(4,974 |
) |
Proceeds
from sale of real estate, net |
|
- |
|
|
|
1,378 |
|
Acquisition of Ignia and BlueMetal, net of cash acquired |
|
(35 |
) |
|
|
507 |
|
Acquisition of Datalink, net of cash and cash equivalents
acquired |
|
(180,859 |
) |
|
|
- |
|
Net cash used in investing activities |
|
(191,168 |
) |
|
|
(3,089 |
) |
Cash flows from
financing activities: |
|
|
Borrowings on senior revolving credit facility |
|
386,609 |
|
|
|
261,920 |
|
Repayments on senior revolving credit facility |
|
(386,609 |
) |
|
|
(261,920 |
) |
Borrowings on accounts receivable securitization financing
facility |
|
1,802,889 |
|
|
|
962,000 |
|
Repayments on accounts receivable securitization financing
facility |
|
(1,718,389 |
) |
|
|
(966,000 |
) |
Borrowings under Term Loan A |
|
175,000 |
|
|
|
- |
|
Repayments under Term Loan A |
|
(4,375 |
) |
|
|
- |
|
Repayments under other financing agreements |
|
(3,957 |
) |
|
|
(632 |
) |
Payments
on capital lease obligations |
|
(255 |
) |
|
|
(100 |
) |
Net
borrowings under inventory financing facility |
|
25,470 |
|
|
|
49,356 |
|
Payment
of debt issuance costs |
|
(1,123 |
) |
|
|
(2,819 |
) |
Payment
of payroll taxes on stock-based compensation through shares
withheld |
|
(4,548 |
) |
|
|
(2,126 |
) |
Repurchases of common stock |
|
- |
|
|
|
(48,467 |
) |
Net cash provided by (used in) financing activities |
|
270,712 |
|
|
|
(8,788 |
) |
Foreign currency
exchange effect on cash and cash equivalent balances. |
|
11,623 |
|
|
|
3,666 |
|
Decrease in cash and
cash equivalents |
|
(8,099 |
) |
|
|
(12,833 |
) |
Cash and cash
equivalents at beginning of period |
|
202,882 |
|
|
|
187,978 |
|
Cash and cash
equivalents at end of period |
$ |
194,783 |
|
|
$ |
175,145 |
|
|
INSIGHT ENTERPRISES, INC. AND
SUBSIDIARIESRECONCILIATION OF GAAP TO NON-GAAP
FINANCIAL MEASURES (IN THOUSANDS, EXCEPT PER SHARE
DATA)(UNAUDITED) |
|
|
Three Months
Ended June 30, |
Six Months Ended June
30, |
|
|
2017 |
|
|
2016 |
|
|
|
2017 |
|
|
2016 |
|
Adjusted Consolidated Earnings from
Operations: |
GAAP consolidated EFO |
$ |
69,329 |
|
$ |
58,122 |
|
|
$ |
92,282 |
|
$ |
71,755 |
|
Severance and restructuring expenses |
|
1,022 |
|
|
909 |
|
|
|
5,717 |
|
|
2,265 |
|
Gain on sale of real estate for which a non-cash impairment charge
was previously reported |
|
- |
|
|
(338 |
) |
|
|
- |
|
|
(338 |
) |
Acquisition-related expenses |
|
276 |
|
|
- |
|
|
|
3,223 |
|
|
- |
|
Adjusted non-GAAP EFO |
$ |
70,627 |
|
$ |
58,693 |
|
|
$ |
101,222 |
|
$ |
73,682 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Consolidated Net
Earnings: |
GAAP consolidated net earnings |
$ |
40,255 |
|
$ |
35,067 |
|
|
$ |
54,103 |
|
$ |
41,955 |
|
Severance and restructuring expenses |
|
1,022 |
|
|
909 |
|
|
|
5,717 |
|
|
2,265 |
|
Gain on sale of real estate for which a non-cash impairment charge
was previously reported |
|
- |
|
|
(338 |
) |
|
|
- |
|
|
(338 |
) |
Acquisition-related expenses |
|
276 |
|
|
- |
|
|
|
3,223 |
|
|
- |
|
Income taxes on non-GAAP adjustments |
|
(310 |
) |
|
(135 |
) |
|
|
(1,597 |
) |
|
(637 |
) |
Adjusted non-GAAP net earnings |
$ |
41,243 |
|
$ |
35,503 |
|
|
$ |
61,446 |
|
$ |
43,245 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Consolidated Diluted
EPS: |
GAAP consolidated diluted EPS |
$ |
1.11 |
|
$ |
0.96 |
|
|
$ |
1.50 |
|
$ |
1.13 |
|
Severance and restructuring expenses |
|
0.03 |
|
|
0.02 |
|
|
|
0.16 |
|
|
0.06 |
|
Gain on sale of real estate for which a non-cash impairment charge
was previously reported |
|
- |
|
|
(0.01 |
) |
|
|
- |
|
|
(0.01 |
) |
Acquisition-related expenses |
|
0.01 |
|
|
- |
|
|
|
0.09 |
|
|
- |
|
Income taxes on non-GAAP adjustments |
|
(0.01 |
) |
|
- |
|
|
|
(0.05 |
) |
|
(0.01 |
) |
Adjusted non-GAAP consolidated diluted EPS |
$ |
1.14 |
|
$ |
0.97 |
|
|
$ |
1.70 |
|
$ |
1.17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted North America Earnings from
Operations: |
GAAP EFO from North America segment |
$ |
50,407 |
|
$ |
41,516 |
|
|
$ |
73,647 |
|
$ |
52,001 |
|
Severance and restructuring expenses |
|
543 |
|
|
591 |
|
|
|
1,647 |
|
|
1,808 |
|
Gain on sale of real estate for which a non-cash impairment charge
was previously reported |
|
- |
|
|
(338 |
) |
|
|
- |
|
|
(338 |
) |
Acquisition-related expenses |
|
276 |
|
|
- |
|
|
|
3,223 |
|
|
- |
|
Adjusted non-GAAP EFO from North America segment |
$ |
51,226 |
|
$ |
41,769 |
|
|
$ |
78,517 |
|
$ |
53,471 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EMEA Earnings from
Operations: |
GAAP EFO from EMEA segment |
$ |
13,482 |
|
$ |
11,667 |
|
|
$ |
12,355 |
|
$ |
14,390 |
|
Severance and restructuring expenses |
|
479 |
|
|
318 |
|
|
|
4,009 |
|
|
342 |
|
Adjusted non-GAAP EFO from EMEA segment |
$ |
13,961 |
|
$ |
11,985 |
|
|
$ |
16,364 |
|
$ |
14,732 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted APAC Earnings from
Operations: |
GAAP EFO from APAC segment |
$ |
5,440 |
|
$ |
4,939 |
|
|
$ |
6,280 |
|
$ |
5,364 |
|
Severance and restructuring expenses |
|
- |
|
|
- |
|
|
|
61 |
|
|
115 |
|
Adjusted non-GAAP EFO from APAC segment |
$ |
5,440 |
|
$ |
4,939 |
|
|
$ |
6,341 |
|
$ |
5,479 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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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