Tech Data Reports Second Quarter Fiscal Year 2020 Results

Date : 08/29/2019 @ 10:00AM
Source : Business Wire
Stock : Tech Data Corporation (TECD)
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Tech Data Reports Second Quarter Fiscal Year 2020 Results

Tech Data (NASDAQ:TECD)
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Tech Data (NASDAQ: TECD) (the “Company”) today announced its financial results for the second quarter ended July 31, 2019.

Second quarter ended July 31,

Six months ended July 31,

($ in millions,except per share amounts)

2019

2018

Y/Y Change

2019

 

2018

 

Y/Y Change

Net Sales

$9,092.2

$8,886.1

2%

$17,498.7

 

$17,434.4

 

0%

 

 

 

 

 

 

 

 

Gross profit

$561.7

$527.0

7%

$1,071.0

 

$1,050.1

 

2%

Gross margin

6.18%

5.93%

25 bps

6.12%

 

6.02%

 

10 bps

 

 

 

 

 

 

 

 

SG&A expenses (GAAP)

$431.7

$415.3

4%

$837.5

 

$837.7

 

0%

% of net sales

4.75%

4.67%

8 bps

4.79%

 

4.80%

 

-1 bps

 

 

 

 

 

 

 

 

SG&A expenses (Non-GAAP)

$410.2

$392.1

5%

$794.9

 

$791.1

 

0%

% of net sales

4.51%

4.41%

10 bps

4.54%

 

4.54%

 

0 bps

 

 

 

 

 

 

 

 

Operating income (GAAP)

$124.7

$110.4

13%

$222.4

 

$180.9

 

23%

Operating margin (GAAP)

1.37%

1.24%

13 bps

1.27%

 

1.04%

 

23 bps

 

 

 

 

 

 

 

 

Operating income (Non-GAAP)

$151.4

$135.0

12%

$276.2

 

$259.0

 

7%

Operating margin (Non-GAAP)

1.67%

1.52%

15 bps

1.58%

 

1.49%

 

9 bps

 

 

 

 

 

 

 

 

Net income (GAAP)

$79.3

$75.9

4%

$134.7

 

$109.6

 

23%

Net income (Non-GAAP)

$98.6

$77.7

27%

$174.5

 

$148.5

 

18%

 

 

 

 

 

 

 

 

EPS - diluted (GAAP)

$2.16

$1.97

10%

$3.64

 

$2.84

 

28%

EPS - diluted (Non-GAAP)

$2.69

$2.01

34%

$4.72

 

$3.85

 

23%

A reconciliation of GAAP to non-GAAP financial measures is presented in the financial tables of this press release.

This information is also available on the Investor Relations section of Tech Data’s website at www.techdata.com/investor.

“We are pleased to report that Tech Data delivered an outstanding second quarter performance marked by broad-based improvement across our geographies. A stable demand environment, combined with strong execution by our teams, resulted in a number of key achievements, including: solid sales growth in constant currency, double-digit growth in operating income and earnings per share, positive cash flow, and an industry-leading return on invested capital,” said Rich Hume, chief executive officer. “We achieved all of this while continuing to advance our strategy, invest for the future and return cash to our shareholders in the form of share repurchases. The Board’s authorization of an additional $200 million share repurchase reflects our continued confidence in our business and commitment to creating value for our shareholders.”

Regional Financial Highlights for the Second Quarter Ended July 31, 2019:

Second quarter ended July 31, Six months ended July 31, ($ in millions)

2019

2018

Y/Y Change

2019

 

2018

 

Y/Y Change

AMERICAS     Net Sales

$4,316.7

$4,043.3

7%

$8,105.9

 

$7,661.5

 

6%

% of WW net sales

47%

46%

 

46%

 

44%

 

 

 

 

 

 

 

 

 

 

Operating income (GAAP)

$93.1

$87.9

6%

$161.7

 

$149.3

 

8%

% of net sales

2.16%

2.17%

-1 bps

2.00%

 

1.95%

 

5 bps

 

 

 

 

 

 

 

 

Operating income (Non-GAAP)

$107.9

$95.4

13%

$192.6

 

$181.4

 

6%

% of net sales

2.50%

2.36%

14 bps

2.38%

 

2.37%

 

1 bps

EUROPE

 

 

 

 

 

 

 

 

Net Sales

$4,439.6

$4,549.1

-2%

$8,749.1

 

$9,210.8

 

-5%

% of WW net sales

49%

51%

 

50%

 

53%

 

 

 

 

 

 

 

 

 

 

Operating income (GAAP)

$37.6

$29.1

29%

$74.1

 

$46.4

 

60%

% of net sales

0.85%

0.64%

21 bps

0.85%

 

0.50%

 

35 bps

 

 

 

 

 

 

 

 

Operating income (Non-GAAP)

$47.3

$44.3

7%

$92.9

 

$88.0

 

6%

% of net sales

1.07%

0.97%

10 bps

1.06%

 

0.96%

 

10 bps

ASIA PACIFIC

 

 

 

 

 

 

 

 

Net Sales

$335.9

$293.6

14%

$643.6

 

$562.1

 

15%

% of WW net sales

4%

3%

 

4%

 

3%

 

 

 

 

 

 

 

 

 

 

Operating income (GAAP)

$2.1

$1.3

57%

$2.9

 

$0.7

 

297%

% of net sales

0.62%

0.45%

17 bps

0.46%

 

0.13%

 

33 bps

 

 

 

 

 

 

 

 

Operating income (Non-GAAP)

$4.3

$2.5

71%

$7.1

 

$3.6

 

98%

% of net sales

1.28%

0.86%

42 bps

1.10%

 

0.64%

 

46 bps

Note: WW = worldwide Stock-based compensation expense was $8.1 million, an increase of $0.1 million, compared to the prior-year quarter. These expenses are excluded from the regional operating results and presented as a separate line item in the company’s segment reporting (see the GAAP to non-GAAP reconciliation in the financial tables of this press release).

  • Net sales were $9.1 billion, an increase of 2 percent compared to the prior-year quarter. On a constant currency basis, net sales increased 5 percent.
    • Americas: Net sales were $4.3 billion, an increase of 7 percent compared to the prior-year quarter. On a constant currency basis, net sales also increased 7 percent.
    • Europe: Net sales were $4.4 billion, a decrease of 2 percent compared to the prior-year quarter. On a constant currency basis, net sales increased 2 percent.
    • Asia Pacific: Net sales were $0.3 billion, an increase of 14 percent compared to the prior-year quarter. On a constant currency basis, net sales increased 17 percent.
  • Net cash generated by operations during the quarter was $40 million.
  • Return on invested capital for the trailing twelve months was 13 percent, compared to 5 percent in the prior year. Adjusted return on invested capital for the trailing twelve months was 15 percent, compared to 11 percent in the comparable period.
  • “Year to date, we generated $103 million in cash from operations, returned $118 million to our shareholders through share repurchases, and for the trailing twelve month period earned an adjusted return on invested capital of 15 percent,” said Chuck Dannewitz, executive vice president, chief financial officer. “We also took steps to optimize our liquidity and financial profile, as we continue to rigorously review our capital structure to enhance shareholder value.”
  • Business Outlook
  • For the quarter ending October 31, 2019, the Company anticipates:
    • Worldwide net sales to be in the range of $9.2 billion to $9.5 billion
    • EPS to be in the range of $2.33 to $2.63 and non-GAAP EPS to be in the range of $2.85 to $3.15
    • An effective tax rate in the range of 24 percent to 25 percent
  • This guidance assumes an average U.S. dollar to euro exchange rate of $1.12 to €1.00 which compares to $1.16 to €1.00 in the year-ago period.

Webcast Details

Tech Data will hold a conference call today at 9:00 a.m. (ET) to discuss its financial results for the second quarter ended July 31, 2019. A webcast of the call, including supplemental schedules, will be available to all interested parties and can be obtained at www.techdata.com/investor. The webcast will be available for replay for three months.

Non-GAAP Financial Information

The non-GAAP financial information contained in this release is included with the intention of providing investors a more complete understanding of the Company’s operational results and trends, but should only be used in conjunction with results reported in accordance with Generally Accepted Accounting Principles (“GAAP”). Certain non-GAAP measures presented in this release or other releases, presentations and similar documents issued by the Company include sales, income or expense items as adjusted for the impact of changes in foreign currencies (referred to as “constant currency”), non-GAAP operating income, non-GAAP operating margin, non-GAAP net income, non-GAAP earnings per diluted share and Adjusted Return on Invested Capital. Certain non-GAAP measures also exclude acquisition-related intangible assets amortization expense, benefits associated with legal settlements, acquisition, integration and restructuring expenses, value-added tax assessments and related interest expense, gain on disposal of subsidiary, tax indemnifications and changes in deferred tax valuation allowances. A detailed reconciliation of the adjustments between results calculated using GAAP and non-GAAP in this release is contained in the attached financial schedules. This information can also be obtained from the Company’s Investor Relations website at www.techdata.com/investor.

Forward-Looking Statements

Certain statements in this communication may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements, including statements regarding Tech Data’s plans, objectives, expectations and intentions, Tech Data’s financial results and estimates and/or business prospects, involve a number of risks and uncertainties and actual results could differ materially from those projected. These forward looking statements are based on current expectations, estimates, forecasts, and projections about the operating environment, economies and markets in which Tech Data operates and the beliefs and assumptions of our management. Words such as “expects,” “anticipates,” “targets,” “goals,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” variations of such words, and similar expressions are intended to identify such forward looking statements. In addition, any statements that refer to projections of Tech Data’s future financial performance, our anticipated growth and trends in our businesses, and other characterizations of future events or circumstances, are forward looking statements. These forward looking statements are only predictions and are subject to risks, uncertainties, and assumptions. Therefore, actual results may differ materially and adversely from those expressed in any forward looking statements.

For additional information with respect to risks and other factors which could occur, see Tech Data’s Annual Report on Form 10-K for the year ended January 31, 2019, including Part I, Item 1A, “Risk Factors” therein, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other securities filings with the Securities and Exchange Commission (the “SEC”) that are available at the SEC’s website at www.sec.gov and other securities regulators. Readers are cautioned not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. Many of these factors are beyond Tech Data’s control. Unless otherwise required by applicable securities laws, Tech Data disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Tech Data undertakes no duty to update any forward looking statements contained herein to reflect actual results or changes in Tech Data’s expectations.

About Tech Data

Tech Data connects the world with the power of technology. Our end-to-end portfolio of products, services and solutions, highly specialized skills, and expertise in next-generation technologies enable channel partners to bring to market the products and solutions the world needs to connect, grow and advance. Tech Data is ranked No. 88 on the Fortune 500® and has been named one of Fortune’s World’s Most Admired Companies for 10 straight years. To find out more, visit www.techdata.com or follow us on Twitter, LinkedIn, Facebook and Instagram.

TECH DATA CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

  Three months ended July 31, Six months ended July 31,

2019

 

2018

 

2019

 

2018

Net sales

$ 9,092,244

$ 8,886,101

$ 17,498,668

$ 17,434,420

Cost of products sold

8,530,594

8,359,071

16,427,639

16,384,273

Gross profit

561,650

527,030

1,071,029

1,050,147

Operating expenses: Selling, general and administrative expenses

431,694

415,319

837,510

837,680

Acquisition, integration, and restructuring expenses

5,209

13,297

11,430

46,522

Legal settlements and other, net —

(5,234)

(282)

(8,199)

Gain on disposal of subsidiary —

(6,717)

(6,717)

436,903

416,665

848,658

869,286

Operating income

124,747

110,365

222,371

180,861

Interest expense

20,986

28,053

47,243

53,975

Other expense, net

2,896

901

2,203

2,818

Income before income taxes

100,865

81,411

172,925

124,068

Provision for income taxes

21,615

5,545

38,275

14,503

Net income

$ 79,250

$ 75,866

$ 134,650

$ 109,565

  Earnings per share: Basic

$ 2.17

$ 1.97

$ 3.67

$ 2.86

Diluted

$ 2.16

$ 1.97

$ 3.64

$ 2.84

Weighted average common shares outstanding: Basic

36,476

38,428

36,739

38,356

Diluted

36,661

38,566

36,964

38,565

TECH DATA CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

(In thousands, except par value and share amounts)

  July 31, January 31,

2019

2019

ASSETS (unaudited)   Current assets: Cash and cash equivalents

$ 738,265

$ 799,123

Accounts receivable, net

5,390,102

6,241,740

Inventories

3,115,899

3,297,385

Prepaid expenses and other assets

360,027

354,601

Total current assets

9,604,293

10,692,849

Property and equipment, net

273,128

274,917

Goodwill

880,657

892,990

Intangible assets, net

899,076

950,858

Other assets, net

397,901

174,938

Total assets

$ 12,055,055

$ 12,986,552

  LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable

$ 6,459,858

$ 7,496,466

Accrued expenses and other liabilities

987,418

1,000,126

Revolving credit loans and current maturities of long-term debt, net

128,453

110,368

Total current liabilities

7,575,729

8,606,960

Long-term debt, less current maturities

1,297,212

1,300,554

Other long-term liabilities

292,492

142,315

Total liabilities

$ 9,165,433

$ 10,049,829

  Shareholders’ equity: Common stock, par value $0.0015; 200,000,000 shares authorized; 59,245,585

$ 89

$ 89

shares issued at July 31, 2019 and January 31, 2019 Additional paid-in capital

843,159

844,206

Treasury stock, at cost (23,288,420 and 22,305,464 shares at July 31, 2019 and January 31, 2019)

(1,146,289)

(1,037,872)

Retained earnings

3,221,164

3,086,514

Accumulated other comprehensive (loss) income

(28,501)

43,786

Total shareholders' equity

2,889,622

2,936,723

Total liabilities and shareholders' equity

$ 12,055,055

$ 12,986,552

TECH DATA CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

(In thousands)

(Unaudited)

  Six months ended July 31,

2019

2018

Cash flows from operating activities: Cash received from customers

$ 23,717,345

$ 22,873,693

Cash paid to vendors and employees

(23,530,536)

(22,793,148)

Interest paid, net

(46,204)

(48,829)

Income taxes paid

(37,767)

(37,179)

Net cash provided by (used in) operating activities

102,838

(5,463)

Cash flows from investing activities: Proceeds from sale of business, net of cash divested —

8,985

Acquisition of businesses, net of cash acquired —

(2,818)

Expenditures for property and equipment

(18,806)

(14,131)

Software and software development costs

(14,704)

(8,592)

Other

117

1,096

Net cash used in investing activities

(33,393)

(15,460)

Cash flows from financing activities: Principal payments on long-term debt

(7,368)

(105,845)

Cash paid for debt issuance costs

(3,909)

— Net borrowings (repayments) on revolving credit loans

19,786

(8,700)

Payments for employee tax withholdings on equity awards

(9,134)

(6,702)

Proceeds from the reissuance of treasury stock

1,002

920

Repurchases of common stock

(117,692)

— Net cash used in financing activities

(117,315)

(120,327)

Effect of exchange rate changes on cash and cash equivalents

(12,988)

(21,519)

Net decrease in cash and cash equivalents

(60,858)

(162,769)

Cash and cash equivalents at beginning of year

799,123

955,628

Cash and cash equivalents at end of period

$ 738,265

$ 792,859

Reconciliation of net income to net cash provided by (used in) operating activities: Net income

$ 134,650

$ 109,565

Adjustments to reconcile net income to net cash provided by (used in) operating activities: Gain on disposal of subsidiary —

(6,717)

Depreciation and amortization

74,759

80,399

Provision for losses on accounts receivable

14,432

6,270

Stock-based compensation expense

16,360

15,555

Accretion of debt discount and debt issuance costs

1,700

1,805

Deferred income taxes

(1,879)

(11,396)

Changes in operating assets and liabilities, net of acquisitions and disposition: Accounts receivable

737,724

602,579

Inventories

139,997

(166,800)

Prepaid expenses and other assets

(10,535)

(40,180)

Accounts payable

(923,917)

(486,900)

Accrued expenses and other liabilities

(80,453)

(109,643)

Total adjustments

(31,812)

(115,028)

Net cash provided by (used in) operating activities

$ 102,838

$ (5,463)

 

TECH DATA CORPORATION AND SUBSIDIARIES

GAAP TO NON-GAAP RECONCILIATION

(In thousands)

 

Three months ended July 31, 2019

Americas(1)

 

Europe(1)

 

Asia Pacific(1)

 

Stock Compensation Expense

 

Consolidated

Net Sales

$ 4,316,731

$ 4,439,627

$ 335,886

$ 9,092,244

Operating income (GAAP) (1)

$ 93,085

$ 37,649

$ 2,068

$ (8,055)

$ 124,747

Acquisition, integration and restructuring expenses

1,341

3,229

639

-

5,209

Acquisition-related intangible assets amortization expense

13,440

6,430

1,312

21,182

Tax indemnifications

-

-

265

265

Total non-GAAP operating income adjustments

$ 14,781

$ 9,659

$ 2,216

$ -

$ 26,656

Operating income (non-GAAP)

$ 107,866

$ 47,308

$ 4,284

$ (8,055)

$ 151,403

Operating margin (GAAP)

2.16%

0.85%

0.62%

1.37%

Operating margin (non-GAAP)

2.50%

1.07%

1.28%

1.67%

  (1) GAAP operating income does not include stock compensation expense at the regional level.  

Three months ended July 31, 2018

Americas(1)

 

Europe(1)

 

Asia Pacific(1)

 

Stock Compensation Expense

 

Consolidated

Net Sales

$ 4,043,331

$ 4,549,127

$ 293,643

$ 8,886,101

Operating income (GAAP) (1)

$ 87,930

$ 29,085

$ 1,318

$ (7,968)

$ 110,365

Acquisition, integration and restructuring expenses

(844)

13,342

131

668

13,297

Legal settlements and other, net

(5,234)

-

-

(5,234)

Acquisition-related intangible assets amortization expense

13,570

7,727

1,418

22,715

Gain on disposal of subsidiary

-

(6,717)

-

(6,717)

Tax indemnifications

-

910

(356)

554

Total non-GAAP operating income adjustments

$ 7,492

$ 15,262

$ 1,193

$ 668

$ 24,615

Operating income (non-GAAP)

$ 95,422

$ 44,347

$ 2,511

$ (7,300)

$ 134,980

Operating margin (GAAP)

2.17%

0.64%

0.45%

1.24%

Operating margin (non-GAAP)

2.36%

0.97%

0.86%

1.52%

  (1) GAAP operating income does not include stock compensation expense at the regional level.

TECH DATA CORPORATION AND SUBSIDIARIES

GAAP TO NON-GAAP RECONCILIATION

(In thousands)

 

Six months ended July 31, 2019

Americas (1)

 

Europe (1)

 

Asia Pacific (1)

 

Stock Compensation Expense

 

Consolidated

Net Sales

$ 8,105,929

$ 8,749,127

$ 643,612

$ 17,498,668

Operating income (GAAP) (1)

$ 161,718

$ 74,069

$ 2,944

$ (16,360)

$ 222,371

Acquisition, integration and restructuring expenses

4,252

6,253

925

-

11,430

Legal settlements and other, net

(282)

-

-

(282)

Acquisition-related intangible assets amortization expense

26,880

12,545

2,636

42,061

Tax indemnifications

-

-

585

585

Total non-GAAP operating income adjustments

$ 30,850

$ 18,798

$ 4,146

$ -

$ 53,794

Operating income (non-GAAP)

$ 192,568

$ 92,867

$ 7,090

$ (16,360)

$ 276,165

Operating margin (GAAP)

2.00%

0.85%

0.46%

1.27%

Operating margin (non-GAAP)

2.38%

1.06%

1.10%

1.58%

  (1) GAAP operating income does not include stock compensation expense at the regional level.  

Six months ended July 31, 2018

Americas (1)

 

Europe (1)

 

Asia Pacific (1)

 

Stock Compensation Expense

 

Consolidated

Net Sales

$ 7,661,537

$ 9,210,829

$ 562,054

$ 17,434,420

Operating income (GAAP) (1)

$ 149,272

$ 46,403

$ 741

$ (15,555)

$ 180,861

Acquisition, integration and restructuring expenses

13,072

31,330

452

1,668

46,522

Legal settlements and other, net

(8,199)

-

-

(8,199)

Acquisition-related intangible assets amortization expense

27,213

16,056

2,750

46,019

Gain on disposal of subsidiary

-

(6,717)

-

(6,717)

Tax indemnifications

-

910

(356)

554

Total non-GAAP operating income adjustments

$ 32,086

$ 41,579

$ 2,846

$ 1,668

$ 78,179

Operating income (non-GAAP)

$ 181,358

$ 87,982

$ 3,587

$ (13,887)

$ 259,040

Operating margin (GAAP)

1.95%

0.50%

0.13%

1.04%

Operating margin (non-GAAP)

2.37%

0.96%

0.64%

1.49%

  (1) GAAP operating income does not include stock compensation expense at the regional level.

TECH DATA CORPORATION AND SUBSIDIARIES

GAAP TO NON-GAAP RECONCILIATION

(In thousands)

      Selling, general and administrative expenses ("SG&A")     Three months ended July 31,    

2019

2018

Net Sales    

$ 9,092,244

$ 8,886,101

SG&A Expenses (GAAP)    

$ 431,694

$ 415,319

Tax indemnifications    

(265)

(554)

Acquisition-related intangible assets amortization expense    

(21,182)

(22,715)

SG&A Expenses (non-GAAP)    

$ 410,247

$ 392,050

      SG&A Expenses (GAAP) %    

4.75%

4.67%

SG&A Expenses (non-GAAP) %    

4.51%

4.41%

                Six months ended July 31,    

2019

2018

Net Sales    

$ 17,498,668

$ 17,434,420

SG&A Expenses (GAAP)    

$ 837,510

$ 837,680

Tax indemnifications    

(585)

(554)

Acquisition-related intangible assets amortization expense    

(42,061)

(46,019)

SG&A Expenses (non-GAAP)    

$ 794,864

$ 791,107

      SG&A Expenses (GAAP) %    

4.79%

4.80%

SG&A Expenses (non-GAAP) %    

4.54%

4.54%

TECH DATA CORPORATION AND SUBSIDIARIES

GAAP TO NON-GAAP RECONCILIATION

(In thousands)

  Three months ended July 31,

2019

 

2018

Net Income   Diluted EPS   Net Income   Diluted EPS GAAP Results

$79,250

 

$2.16

 

$75,866

 

$1.97

Acquisition, integration and restructuring expenses

5,209

 

0.14

 

13,297

 

0.34

Legal settlements and other, net

-

 

-

 

(5,234)

 

(0.13)

Acquisition-related intangible assets amortization expense

21,182

 

0.58

 

22,715

 

0.59

Gain on disposal of subsidiary

-

 

-

 

(6,717)

 

(0.17)

Tax indemnifications

265

 

0.01

 

554

 

0.01

Income tax effect of tax indemnifications

(265)

 

(0.01)

 

(554)

 

(0.01)

Income tax effect of other adjustments above

(7,015)

 

(0.19)

 

(9,404)

 

(0.25)

Income tax benefit from acquisition settlement

-

 

-

 

(12,839)

 

(0.34)

        Non-GAAP Results

$98,626

 

$2.69

 

$77,684

 

$2.01

    Six months ended July 31,

2019

 

2018

Net Income   Diluted EPS   Net Income   Diluted EPS GAAP Results

$134,650

 

$3.64

 

$109,565

 

$2.84

Acquisition, integration and restructuring expenses

11,430

 

0.31

 

46,522

 

1.21

Legal settlements and other, net

(282)

 

(0.01)

 

(8,199)

 

(0.21)

Acquisition-related intangible assets amortization expense

42,061

 

1.14

 

46,019

 

1.19

Gain on disposal of subsidiary

-

 

-

 

(6,717)

 

(0.17)

Tax indemnifications

585

 

0.02

 

554

 

0.01

Value added tax assessments and related interest expense

-

 

-

 

(928)

 

(0.02)

Income tax effect of tax indemnifications

(585)

 

(0.02)

 

(554)

 

(0.01)

Income tax effect of other adjustments above

(13,336)

 

(0.36)

 

(22,312)

 

(0.58)

Income tax benefit from acquisition settlement

-

 

-

 

(12,839)

 

(0.34)

Change in deferred tax valuation allowances

-

 

-

 

(2,600)

 

(0.07)

        Non-GAAP Results

$174,523

 

$4.72

 

$148,511

 

$3.85

TECH DATA CORPORATION AND SUBSIDIARIES

GAAP TO NON-GAAP RECONCILIATION

(In thousands)

Return on Invested Capital (ROIC)

  Twelve months ended July 31, TTM Net Operating Profit After Tax (NOPAT)*:

2019

2018

Operating income

$ 535,312

$ 412,331

Income taxes on operating income (1)

(71,618)

(211,261)

NOPAT

$ 463,694

$ 201,070

  Average Invested Capital: Short-term debt (5-qtr end average)

$ 117,825

$ 188,558

Long-term debt (5-qtr end average)

1,319,914

1,604,359

Shareholders' Equity (5-qtr end average)

2,886,150

2,819,394

Total average capital

4,323,889

4,612,311

Less: Cash (5-qtr end average)

(754,845)

(737,995)

Average invested capital less average cash

$ 3,569,044

$ 3,874,316

ROIC

13%

5%

  * Trailing Twelve Months is abbreviated as TTM. (1) Income taxes on operating income was calculated using the trailing twelve months effective tax rate.

Adjusted Return on Invested Capital (ROIC)

Twelve months ended July 31, TTM Net Operating Profit After Tax (NOPAT), as adjusted*:

2019

2018

Non-GAAP operating income (1)

$ 725,011

$ 610,691

Income taxes on non-GAAP operating income (2)

(177,649)

(172,797)

NOPAT, as adjusted

$ 547,362

$ 437,894

  Average Invested Capital, as adjusted: Short-term debt (5-qtr end average)

$ 117,825

$ 188,558

Long-term debt (5-qtr end average)

1,319,914

1,604,359

Shareholders' Equity (5-qtr end average)

2,886,150

2,819,394

Tax effected impact of non-GAAP adjustments (3)

45,223

95,231

Total average capital, as adjusted

4,369,112

4,707,542

Less: Cash (5-qtr end average)

(754,845)

(737,995)

Average invested capital less average cash

$ 3,614,267

$ 3,969,547

Adjusted ROIC

15%

11%

*

Trailing Twelve Months is abbreviated as TTM.

(1)

Represents operating income as adjusted to exclude acquisition, integration and restructuring expenses, legal settlements and other, net, gain on disposal of subsidiary, value added tax assessments, acquisition-related intangible assets amortization expense, goodwill impairment and tax indemnifications.

(2)

Income taxes on non-GAAP operating income was calculated using the trailing twelve months effective tax rate adjusted for the impact of non-GAAP adjustments during the respective periods.

(3)

Represents the 5 quarter average of the year-to-date impact of non-GAAP adjustments.

TECH DATA CORPORATION AND SUBSIDIARIES

GAAP TO NON-GAAP RECONCILIATION

Guidance Reconciliation

 

Three months ending October 31, 2019

Low end of guidance range

High end of guidance range

Earnings per share - diluted

$2.33

$2.63

Acquisition-related amortization of intangibles

0.58

0.58

Acquisition, integration and restructuring expenses

0.12

0.12

Income tax effect of the above adjustments

(0.18)

(0.18)

Non-GAAP earnings per share - diluted

$2.85

$3.15

 

Investor Contact Tania Almond Investor Relations Director +1 727.538.7064 tania.almond@techdata.com

Media Contact Bobby Eagle Director, External Communications +1 727.538.5864 bobby.eagle@techdata.com

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