CDWC Cdw Corp (MM)

CDW Corporation (NASDAQ:CDWC): Average daily sales: $27.610 million, up 5.8% year-over-year Sales: $1.739 billion, up 4.1% year-over-year Diluted earnings per share: $0.98, up 11.4% year-over-year Gross profit: $267.9 million, up 5.1% year-over-year Net income: $77.7 million, up 6.3% year-over-year CDW Corporation (NASDAQ: CDWC) achieved record quarterly sales, gross profit, net income and diluted earnings per share in the third quarter of 2006. Total sales in the third quarter of 2006 were $1.739 billion compared to $1.670 billion in the third quarter of 2005, an increase of 4.1 percent. Average daily sales in the third quarter of 2006 were $27.610 million compared to $26.097 million in the third quarter of 2005, representing a 5.8 percent increase. The third quarter of 2006 had 63 billing days and the third quarter of 2005 had 64 billing days. Gross profit for the third quarter of 2006 was $267.9 million compared to $254.9 million in the third quarter of 2005, an increase of 5.1 percent. Net income increased 6.3 percent for the third quarter of 2006 to $77.7 million versus the prior year period, including the impact of the required implementation of the Financial Accounting Standards Board�s Statement of Financial Accounting Standards No. 123R (�SFAS 123R�) relating to stock options as of January 1, 2006, and a reduction in the effective tax rate. Diluted earnings per share were $0.98 in the third quarter of 2006, an increase of 11.4 percent compared to diluted earnings per share of $0.88 in the third quarter of 2005. The third quarter of 2006 included stock-based compensation expense of $2.5 million after tax ($4.0 million pre-tax), or $0.03 per diluted share due to the implementation of SFAS 123R, and $0.05 per diluted share from a lower effective tax rate. �Our third quarter performance established another set of records for CDW. We continue to focus on profitable growth and creating an unmatched experience for our customers,� said John A. Edwardson, chairman and chief executive officer. �To meet specific customer needs and maximize our sales coverage, we have increasingly segmented our customers based on industry verticals and geography over the past several years. Our long-term strategy of segmentation of the public sector has resulted in strong and profitable growth. In the first half of 2006, we applied this strategy to the corporate sector by segmenting most of our medium and large corporate customers into geographic regions, and organizing our corporate sales teams accordingly. Medium and large corporate sector account managers are continuing to build relationships with customers whose accounts have been transferred into regions. The corporate sector is still in the implementation stage and we are confident this is the right approach for the long term. We are focused on executing the segmentation strategy and accelerating growth in the corporate sector,� said Edwardson. �We are excited about our recent acquisition of Berbee Information Networks Corporation, one of the nation�s largest independent IT solution providers. Our organizations are both industry leaders committed to superior customer service and profitable growth. Together we will offer customers a single source for their core technology needs and more advanced IT services and solutions. In addition, we expect to scale Berbee�s business processes to generate additional growth opportunities,� said Edwardson. Third Quarter Highlights: Total corporate sector segment sales in the third quarter of 2006 were $1.088 billion compared to $1.117 billion in the third quarter of 2005, representing a decrease of 2.5 percent. Third quarter of 2006 average daily sales for the corporate sector segment were $17.276 million compared to $17.448 million in the third quarter of 2005, representing a decrease of 1.0 percent. Total public sector segment sales in the third quarter of 2006 were $651.1 million compared to $553.5 million in the third quarter of 2005, representing an increase of 17.6 percent. Third quarter of 2006 average daily sales for the public sector segment were $10.335 million compared to $8.649 million in the third quarter of 2005, representing an increase of 19.5 percent. Product categories that achieved the strongest year-over-year unit volume growth for the quarter on an average daily basis included notebook CPUs, software, printers, net comm, video, memory, and input devices. Direct web sales in the third quarter of 2006 were $496.3 million, representing a 9.0 percent increase compared to the same period a year ago, and comprised 28.5 percent of total sales. September 2006 sales were $593.9 million compared to $592.8 million in September 2005, representing a 0.2 percent increase. September 2006 average daily sales were $29.697 million compared to $28.228 million in the prior period, representing a 5.2 percent increase. September 2006 had 20 billing days and September 2005 had 21 billing days. In September 2006, corporate sector segment sales decreased 1.4 percent on an average daily basis and public sector segment sales increased 17.6 percent on an average daily basis. Gross profit margin was 15.4 percent in the third quarter of 2006 compared to 15.3 percent in the same period of 2005. The increase was primarily due to improved product margin. Selling and administrative expenses as a percentage of sales were 7.3 percent in the third quarter of 2006 compared to 6.8 percent in the third quarter of 2005. The increase in selling and administrative expenses in the third quarter of 2006 was primarily due to: Incremental costs of $5.0 million associated with the operations of the company�s new distribution center in North Las Vegas, Nevada, and additional leased office space in Chicago and Vernon Hills, Illinois. As previously announced, these infrastructure investments are being made to position the company for future growth. Stock-based compensation expense of $4.0 million due to the required implementation of SFAS 123R on January 1, 2006, as previously announced. Increased sales commission expense due to the achievement of a stronger gross profit margin compared to the prior year period. Increased payroll costs as a result of continued investment in expanding CDW�s sales force and additional coworkers to support a larger and growing business. Operating margin was 6.4 percent in the third quarter of 2006 compared to 6.7 percent in the third quarter of 2005. Interest income was $5.2 million for the third quarter of 2006, an increase of $1.5 million compared to the same period of 2005 due to higher interest rates. The effective tax rate for the third quarter of 2006 was 33.2 percent compared to 36.9 percent for the third quarter of 2005. The year-over-year decrease in the effective tax rate is primarily due to a $5 million tax benefit recognized in the third quarter of 2006 for the reduction of tax reserves due to the expiration of the statute of limitations for the tax year to which they relate. Share Repurchase Activity During the third quarter of 2006, CDW repurchased 300,000 shares of common stock at an average price of $52.42 per share for an aggregate purchase price of $16 million. Under the current share repurchase program approved in April 2006 for the repurchase of 5.0 million shares, 3.2 million shares remain available for purchase. CDW has returned a total of $269 million to shareholders in the first nine months of 2006 comprised of $228 million of share repurchases and an annual cash dividend of $41 million. The company plans to release October sales on Wednesday, November 8, 2006. October 2005 had 21 billing days and October 2006 will have 22 billing days. Forward Looking Statement Any forward-looking statements contained in this release are based on the Company's beliefs and expectations as of the date of this release and are subject to certain risks and uncertainties which may have a significant impact on the Company's business, operating results or financial condition. Should any risk or uncertainty materialize, or should underlying assumptions prove incorrect, actual results or outcomes may vary materially from those described in forward-looking statements. Factors affecting the Company's business and prospects are discussed in the Company's filings with the Securities and Exchange Commission. About CDW CDW�, ranked No. 343 on the FORTUNE 500, is a leading provider of technology solutions for business, government and education. CDW is a principal source of technology products and services including top name brands such as Acer, Adobe, Apple, Cisco, HP, IBM, Lenovo, Microsoft, Panasonic, Samsung, Sony, Symantec, Toshiba and ViewSonic. CDW's direct model offers customers one-on-one relationships with knowledgeable account managers and access to more than 600 on-staff engineers and advanced technology specialists who customize solutions for customers� complex technology needs. CDW also provides same-day product shipping and post-sales technical support. CDW was founded in 1984 and employs approximately 5,250 coworkers. In 2005, the company generated sales of $6.3 billion. For more information, visit CDW.com. A live web cast of CDW�s management discussion of the third quarter of 2006 results will be available at www.cdw.com/investor. The web cast will begin today, October 18, 2006, at 9:30 a.m. ET / 8:30 a.m. CT. An audio replay of the call will also be available at www.cdw.com/investor for approximately two weeks. Additional financial and operational data is provided in a series of supplemental slides available at www.cdw.com/investor. For more information about CDW: Visit CDW on the Internet at http://www.cdw.com. Contact CDW Investor Relations via the Internet at investorrelations@cdw.com or by telephone at 847-419-6328. CDW is a registered trademark and CDW@work is a trademark of CDW Corporation. Other company and product names may be trademarks of their respective owners. CDW CORPORATION AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF INCOME(in thousands, except per share data) � � Three Months EndedSeptember 30, Nine Months EndedSeptember 30, 2006 2005 2006 2005 � Net sales $ 1,739,457� $ 1,670,204� $ 4,961,544� $ 4,684,881� Cost of sales � 1,471,586� � 1,415,261� � 4,175,747� � 3,966,031� � Gross profit 267,871� 254,943� 785,797� 718,850� � Selling and administrative expenses 127,416� 112,670� 382,356� 320,233� Advertising expense � 28,964� � 29,843� � 89,866� � 85,969� � Income from operations 111,491� 112,430� 313,575� 312,648� � Interest income 5,167� 3,662� 15,866� 10,830� Other expense, net � (361) � (284) � (1,417) � (1,133) � Income before income taxes 116,297� 115,808� 328,024� 322,345� � Income tax provision � 38,563� � 42,684� � 115,501� � 120,763� � Net income $ 77,734� $ 73,124� $ 212,523� $ 201,582� � Earnings per share: Basic $ 1.00� $ 0.91� $ 2.69� $ 2.47� Diluted $ 0.98� $ 0.88� $ 2.63� $ 2.40� � Weighted-average number of common shares outstanding: � Basic � 77,890� � 80,526� � 78,956� � 81,487� Diluted � 79,459� � 82,957� � 80,674� � 83,993� � Dividends per share $ 0.00� $ 0.00� $ 0.52� $ 0.43� CDW CORPORATION AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS(in thousands) � � September 30,2006 December 31,2005 September 30,2005 � Assets � Current assets: Cash, cash equivalents and marketable securities $ 521,273� $ 571,750� $ 525,334� Accounts receivable, net of allowance for doubtful accounts of $9,574, $9,564 and $9,910 respectively 738,600� 637,245� 668,660� Merchandise inventory 285,165� 243,564� 258,720� Miscellaneous receivables 40,141� 27,848� 31,684� Deferred income taxes 16,298� 12,562� 13,718� Prepaid expenses � 15,713� � 8,274� � 5,712� � Total current assets 1,617,190� 1,501,243� 1,503,828� � Marketable securities 50,000� 39,176� 64,317� Property and equipment, net 119,263� 97,277� 92,690� Other assets � 14,449� � 11,360� � 10,709� � Total assets $ 1,800,902� $ 1,649,056� $ 1,671,544� � � Liabilities and Shareholders� Equity � Current liabilities: Accounts payable $ 340,254� $ 245,201� $ 299,866� Accrued expenses and other current liabilities � 131,996� � 122,560� � 128,595� � Total current liabilities 472,250� 367,761� 428,461� � Long-term liabilities 22,729� 16,730� 16,464� � Shareholders� equity: Total shareholders� equity � 1,305,923� � 1,264,565� � 1,226,619� � Total liabilities and shareholders� equity $ 1,800,902� $ 1,649,056� $ 1,671,544� CDW CORPORATION AND SUBSIDIARIESSEGMENT REPORTING INFORMATION(in thousands) � � Three Months Ended September 30, 2006 Corporate Sector Public Sector Headquarters / Other Consolidated � Net sales $ 1,088,364� $ 651,093� $ -� $ 1,739,457� � Income (loss) from operations $ 83,805� $ 36,867� $ (9,181) $ 111,491� � Net interest income and other expense � 4,806� � Income before income taxes $ 116,297� � Total assets $ 637,714� $ 299,297� $ 863,891� $ 1,800,902� Three Months Ended September 30, 2005 Corporate Sector Public Sector Headquarters / Other Consolidated � Net sales $ 1,116,658� $ 553,546� $ -� $ 1,670,204� � Income (loss) from operations $ 88,582� $ 32,414� $ (8,566) $ 112,430� � Net interest income and other expense � 3,378� � Income before income taxes $ 115,808� � Total assets $ 447,826� $ 271,559� $ 952,159� $ 1,671,544� CDW CORPORATION AND SUBSIDIARIESSEGMENT REPORTING INFORMATION(in thousands) � � Nine Months Ended September 30, 2006 Corporate Sector Public Sector Headquarters / Other Consolidated � Net sales $ 3,350,427� $ 1,611,117� $ -� $ 4,961,544� � Income (loss) from operations $ 261,999� $ 80,520� $ (28,944) $ 313,575� � Net interest income and other expense � 14,449� � Income before income taxes $ 328,024� � Total assets $ 637,714� $ 299,297� $ 863,891� $ 1,800,902� Nine Months Ended September 30, 2005 Corporate Sector Public Sector Headquarters / Other Consolidated � Net sales $ 3,281,442� $ 1,403,439� $ -� $ 4,684,881� � Income (loss) from operations $ 253,141� $ 84,121� $ (24,614) $ 312,648� � Net interest income and other expense � 9,697� � Income before income taxes $ 322,345� � Total assets $ 447,826� $ 271,559� $ 952,159� $ 1,671,544� CDW CORPORATION AND SUBSIDIARIESOPERATING DATA � � Three Months EndedSeptember 30, Nine Months EndedSeptember 30, 2006 2005 2006 2005 % of sales to commercial customers (1) 99.1% 99.1% 99.1% 98.8% Direct web sales (000�s) $496,275� $455,298� $1,490,764� $1,314,389� Sales force, end of period 2,211� 2,061� 2,211� 2,061� Annualized inventory turnover 24� 25� 23� 24� Accounts receivable - days sales outstanding 39� 37� 41� 39� � (1)�Commercial customers are defined as public sector and corporate customers excluding consumers. CDW Corporation (NASDAQ:CDWC): -- Average daily sales: $27.610 million, up 5.8% year-over-year -- Sales: $1.739 billion, up 4.1% year-over-year -- Diluted earnings per share: $0.98, up 11.4% year-over-year -- Gross profit: $267.9 million, up 5.1% year-over-year -- Net income: $77.7 million, up 6.3% year-over-year CDW Corporation (NASDAQ: CDWC) achieved record quarterly sales, gross profit, net income and diluted earnings per share in the third quarter of 2006. Total sales in the third quarter of 2006 were $1.739 billion compared to $1.670 billion in the third quarter of 2005, an increase of 4.1 percent. Average daily sales in the third quarter of 2006 were $27.610 million compared to $26.097 million in the third quarter of 2005, representing a 5.8 percent increase. The third quarter of 2006 had 63 billing days and the third quarter of 2005 had 64 billing days. Gross profit for the third quarter of 2006 was $267.9 million compared to $254.9 million in the third quarter of 2005, an increase of 5.1 percent. Net income increased 6.3 percent for the third quarter of 2006 to $77.7 million versus the prior year period, including the impact of the required implementation of the Financial Accounting Standards Board's Statement of Financial Accounting Standards No. 123R ("SFAS 123R") relating to stock options as of January 1, 2006, and a reduction in the effective tax rate. Diluted earnings per share were $0.98 in the third quarter of 2006, an increase of 11.4 percent compared to diluted earnings per share of $0.88 in the third quarter of 2005. The third quarter of 2006 included stock-based compensation expense of $2.5 million after tax ($4.0 million pre-tax), or $0.03 per diluted share due to the implementation of SFAS 123R, and $0.05 per diluted share from a lower effective tax rate. "Our third quarter performance established another set of records for CDW. We continue to focus on profitable growth and creating an unmatched experience for our customers," said John A. Edwardson, chairman and chief executive officer. "To meet specific customer needs and maximize our sales coverage, we have increasingly segmented our customers based on industry verticals and geography over the past several years. Our long-term strategy of segmentation of the public sector has resulted in strong and profitable growth. In the first half of 2006, we applied this strategy to the corporate sector by segmenting most of our medium and large corporate customers into geographic regions, and organizing our corporate sales teams accordingly. Medium and large corporate sector account managers are continuing to build relationships with customers whose accounts have been transferred into regions. The corporate sector is still in the implementation stage and we are confident this is the right approach for the long term. We are focused on executing the segmentation strategy and accelerating growth in the corporate sector," said Edwardson. "We are excited about our recent acquisition of Berbee Information Networks Corporation, one of the nation's largest independent IT solution providers. Our organizations are both industry leaders committed to superior customer service and profitable growth. Together we will offer customers a single source for their core technology needs and more advanced IT services and solutions. In addition, we expect to scale Berbee's business processes to generate additional growth opportunities," said Edwardson. Third Quarter Highlights: -- Total corporate sector segment sales in the third quarter of 2006 were $1.088 billion compared to $1.117 billion in the third quarter of 2005, representing a decrease of 2.5 percent. Third quarter of 2006 average daily sales for the corporate sector segment were $17.276 million compared to $17.448 million in the third quarter of 2005, representing a decrease of 1.0 percent. -- Total public sector segment sales in the third quarter of 2006 were $651.1 million compared to $553.5 million in the third quarter of 2005, representing an increase of 17.6 percent. Third quarter of 2006 average daily sales for the public sector segment were $10.335 million compared to $8.649 million in the third quarter of 2005, representing an increase of 19.5 percent. -- Product categories that achieved the strongest year-over-year unit volume growth for the quarter on an average daily basis included notebook CPUs, software, printers, net comm, video, memory, and input devices. -- Direct web sales in the third quarter of 2006 were $496.3 million, representing a 9.0 percent increase compared to the same period a year ago, and comprised 28.5 percent of total sales. -- September 2006 sales were $593.9 million compared to $592.8 million in September 2005, representing a 0.2 percent increase. September 2006 average daily sales were $29.697 million compared to $28.228 million in the prior period, representing a 5.2 percent increase. September 2006 had 20 billing days and September 2005 had 21 billing days. In September 2006, corporate sector segment sales decreased 1.4 percent on an average daily basis and public sector segment sales increased 17.6 percent on an average daily basis. Gross profit margin was 15.4 percent in the third quarter of 2006 compared to 15.3 percent in the same period of 2005. The increase was primarily due to improved product margin. Selling and administrative expenses as a percentage of sales were 7.3 percent in the third quarter of 2006 compared to 6.8 percent in the third quarter of 2005. The increase in selling and administrative expenses in the third quarter of 2006 was primarily due to: -- Incremental costs of $5.0 million associated with the operations of the company's new distribution center in North Las Vegas, Nevada, and additional leased office space in Chicago and Vernon Hills, Illinois. As previously announced, these infrastructure investments are being made to position the company for future growth. -- Stock-based compensation expense of $4.0 million due to the required implementation of SFAS 123R on January 1, 2006, as previously announced. -- Increased sales commission expense due to the achievement of a stronger gross profit margin compared to the prior year period. -- Increased payroll costs as a result of continued investment in expanding CDW's sales force and additional coworkers to support a larger and growing business. Operating margin was 6.4 percent in the third quarter of 2006 compared to 6.7 percent in the third quarter of 2005. Interest income was $5.2 million for the third quarter of 2006, an increase of $1.5 million compared to the same period of 2005 due to higher interest rates. The effective tax rate for the third quarter of 2006 was 33.2 percent compared to 36.9 percent for the third quarter of 2005. The year-over-year decrease in the effective tax rate is primarily due to a $5 million tax benefit recognized in the third quarter of 2006 for the reduction of tax reserves due to the expiration of the statute of limitations for the tax year to which they relate. Share Repurchase Activity During the third quarter of 2006, CDW repurchased 300,000 shares of common stock at an average price of $52.42 per share for an aggregate purchase price of $16 million. Under the current share repurchase program approved in April 2006 for the repurchase of 5.0 million shares, 3.2 million shares remain available for purchase. CDW has returned a total of $269 million to shareholders in the first nine months of 2006 comprised of $228 million of share repurchases and an annual cash dividend of $41 million. The company plans to release October sales on Wednesday, November 8, 2006. October 2005 had 21 billing days and October 2006 will have 22 billing days. Forward Looking Statement Any forward-looking statements contained in this release are based on the Company's beliefs and expectations as of the date of this release and are subject to certain risks and uncertainties which may have a significant impact on the Company's business, operating results or financial condition. Should any risk or uncertainty materialize, or should underlying assumptions prove incorrect, actual results or outcomes may vary materially from those described in forward-looking statements. Factors affecting the Company's business and prospects are discussed in the Company's filings with the Securities and Exchange Commission. About CDW CDW(R), ranked No. 343 on the FORTUNE 500, is a leading provider of technology solutions for business, government and education. CDW is a principal source of technology products and services including top name brands such as Acer, Adobe, Apple, Cisco, HP, IBM, Lenovo, Microsoft, Panasonic, Samsung, Sony, Symantec, Toshiba and ViewSonic. CDW's direct model offers customers one-on-one relationships with knowledgeable account managers and access to more than 600 on-staff engineers and advanced technology specialists who customize solutions for customers' complex technology needs. CDW also provides same-day product shipping and post-sales technical support. CDW was founded in 1984 and employs approximately 5,250 coworkers. In 2005, the company generated sales of $6.3 billion. For more information, visit CDW.com. A live web cast of CDW's management discussion of the third quarter of 2006 results will be available at www.cdw.com/investor. The web cast will begin today, October 18, 2006, at 9:30 a.m. ET / 8:30 a.m. CT. An audio replay of the call will also be available at www.cdw.com/investor for approximately two weeks. Additional financial and operational data is provided in a series of supplemental slides available at www.cdw.com/investor. For more information about CDW: Visit CDW on the Internet at http://www.cdw.com. Contact CDW Investor Relations via the Internet at investorrelations@cdw.com or by telephone at 847-419-6328. CDW is a registered trademark and CDW@work is a trademark of CDW Corporation. Other company and product names may be trademarks of their respective owners. -0- *T CDW CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share data) Three Months Ended Nine Months Ended September 30, September 30, ----------------------- ----------------------- 2006 2005 2006 2005 ----------- ----------- ----------- ----------- Net sales $1,739,457 $1,670,204 $4,961,544 $4,684,881 Cost of sales 1,471,586 1,415,261 4,175,747 3,966,031 ----------- ----------- ----------- ----------- Gross profit 267,871 254,943 785,797 718,850 Selling and administrative expenses 127,416 112,670 382,356 320,233 Advertising expense 28,964 29,843 89,866 85,969 ----------- ----------- ----------- ----------- Income from operations 111,491 112,430 313,575 312,648 Interest income 5,167 3,662 15,866 10,830 Other expense, net (361) (284) (1,417) (1,133) ----------- ----------- ----------- ----------- Income before income taxes 116,297 115,808 328,024 322,345 Income tax provision 38,563 42,684 115,501 120,763 ----------- ----------- ----------- ----------- Net income $ 77,734 $ 73,124 $ 212,523 $ 201,582 =========== =========== =========== =========== Earnings per share: Basic $ 1.00 $ 0.91 $ 2.69 $ 2.47 =========== =========== =========== =========== Diluted $ 0.98 $ 0.88 $ 2.63 $ 2.40 =========== =========== =========== =========== Weighted-average number of common shares outstanding: Basic 77,890 80,526 78,956 81,487 =========== =========== =========== =========== Diluted 79,459 82,957 80,674 83,993 =========== =========== =========== =========== Dividends per share $ 0.00 $ 0.00 $ 0.52 $ 0.43 =========== =========== =========== =========== *T -0- *T CDW CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) September 30, December 31, September 30, 2006 2005 2005 ------------- ------------- ------------- Assets Current assets: Cash, cash equivalents and marketable securities $ 521,273 $ 571,750 $ 525,334 Accounts receivable, net of allowance for doubtful accounts of $9,574, $9,564 and $9,910 respectively 738,600 637,245 668,660 Merchandise inventory 285,165 243,564 258,720 Miscellaneous receivables 40,141 27,848 31,684 Deferred income taxes 16,298 12,562 13,718 Prepaid expenses 15,713 8,274 5,712 ------------- ------------- ------------- Total current assets 1,617,190 1,501,243 1,503,828 Marketable securities 50,000 39,176 64,317 Property and equipment, net 119,263 97,277 92,690 Other assets 14,449 11,360 10,709 ------------- ------------- ------------- Total assets $ 1,800,902 $ 1,649,056 $ 1,671,544 ============= ============= ============= Liabilities and Shareholders' Equity Current liabilities: Accounts payable $ 340,254 $ 245,201 $ 299,866 Accrued expenses and other current liabilities 131,996 122,560 128,595 ------------- ------------- ------------- Total current liabilities 472,250 367,761 428,461 Long-term liabilities 22,729 16,730 16,464 Shareholders' equity: Total shareholders' equity 1,305,923 1,264,565 1,226,619 ------------- ------------- ------------- Total liabilities and shareholders' equity $ 1,800,902 $ 1,649,056 $ 1,671,544 ============= ============= ============= *T -0- *T CDW CORPORATION AND SUBSIDIARIES SEGMENT REPORTING INFORMATION (in thousands) Three Months Ended September 30, 2006 ---------------------------------------------------- Headquarters Corporate Public / Sector Sector Other Consolidated ----------- ----------- ------------ ------------ Net sales $1,088,364 $ 651,093 $ - $ 1,739,457 =========== =========== ============ ============ Income (loss) from operations $ 83,805 $ 36,867 $ (9,181) $ 111,491 =========== =========== ============ Net interest income and other expense 4,806 ------------ Income before income taxes $ 116,297 ============ Total assets $ 637,714 $ 299,297 $ 863,891 $ 1,800,902 =========== =========== ============ ============ *T -0- *T Three Months Ended September 30, 2005 ---------------------------------------------------- Headquarters Corporate Public / Sector Sector Other Consolidated ----------- ----------- ------------ ------------ Net sales $1,116,658 $ 553,546 $ - $ 1,670,204 =========== =========== ============ ============ Income (loss) from operations $ 88,582 $ 32,414 $ (8,566) $ 112,430 =========== =========== ============ Net interest income and other expense 3,378 ------------ Income before income taxes $ 115,808 ============ Total assets $ 447,826 $ 271,559 $ 952,159 $ 1,671,544 =========== =========== ============ ============ *T -0- *T CDW CORPORATION AND SUBSIDIARIES SEGMENT REPORTING INFORMATION (in thousands) Nine Months Ended September 30, 2006 ---------------------------------------------------- Headquarters Corporate Public / Sector Sector Other Consolidated ----------- ----------- ------------ ------------ Net sales $3,350,427 $1,611,117 $ - $ 4,961,544 =========== =========== ============ ============ Income (loss) from operations $ 261,999 $ 80,520 $ (28,944) $ 313,575 =========== =========== ============ Net interest income and other expense 14,449 ------------ Income before income taxes $ 328,024 ============ Total assets $ 637,714 $ 299,297 $ 863,891 $ 1,800,902 =========== =========== ============ ============ *T -0- *T Nine Months Ended September 30, 2005 ---------------------------------------------------- Headquarters Corporate Public / Sector Sector Other Consolidated ----------- ----------- ------------ ------------ Net sales $3,281,442 $1,403,439 $ - $ 4,684,881 =========== =========== ============ ============ Income (loss) from operations $ 253,141 $ 84,121 $ (24,614) $ 312,648 =========== =========== ============ Net interest income and other expense 9,697 ------------ Income before income taxes $ 322,345 ============ Total assets $ 447,826 $ 271,559 $ 952,159 $ 1,671,544 =========== =========== ============ ============ *T -0- *T CDW CORPORATION AND SUBSIDIARIES OPERATING DATA ---------------------------------------------------------------------- Three Months Ended Nine Months Ended September 30, September 30, ---------------------------------------------- 2006 2005 2006 2005 ---------------------------------------------- % of sales to commercial customers (1) 99.1% 99.1% 99.1% 98.8% Direct web sales (000's) $496,275 $455,298 $1,490,764 $1,314,389 Sales force, end of period 2,211 2,061 2,211 2,061 Annualized inventory turnover 24 25 23 24 Accounts receivable - days sales outstanding 39 37 41 39 ---------------------------------------------------------------------- (1) Commercial customers are defined as public sector and corporate customers excluding consumers. *T