Strong Margins Reinforce Power of Strategy,
Cash Flow Enhances Strategic Flexibility
CDW Corporation (Nasdaq:CDW):
(Dollars in millions, except per share amounts and
percentage)
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
% Chg.
2024
2023
% Chg.
Net Sales
$
5,423.4
$
5,626.1
(3.6
)
$
10,296.1
$
10,729.2
(4.0
)
Gross Profit
$
1,183.1
$
1,181.5
0.1
$
2,246.4
$
2,270.9
(1.1
)
Gross Profit Margin
21.8
%
21.0
%
21.8
%
21.2
%
Operating Income
$
433.1
$
412.2
5.1
$
761.1
$
767.5
(0.8
)
Non-GAAP Operating Income1
$
510.3
$
529.8
(3.7
)
$
913.8
$
964.1
(5.2
)
Net Income
$
281.1
$
262.6
7.0
$
497.2
$
492.7
0.9
Non-GAAP Net Income1
$
338.8
$
349.0
(2.9
)
$
599.6
$
627.7
(4.5
)
Net Income per Diluted Share
$
2.07
$
1.92
7.5
$
3.66
$
3.60
1.6
Non-GAAP Net Income per Diluted Share1
$
2.50
$
2.56
(2.6
)
$
4.41
$
4.59
(3.8
)
Average Daily Sales2
$
84.7
$
87.9
(3.6
)
$
80.4
$
83.8
(4.0
)
1 Non-GAAP measures used in this release
that are not based on accounting principles generally accepted in
the United States of America ("US GAAP") are each defined and
reconciled to the most directly comparable US GAAP measure in the
attached schedules.
2 Defined as Net sales divided by the
number of selling days. There were 64 selling days for both the
three months ended June 30, 2024 and 2023. There were 128 selling
days for both the six months ended June 30, 2024 and 2023.
CDW Corporation (Nasdaq: CDW), a leading multi-brand provider of
information technology solutions to business, government, education
and healthcare customers in the United States, the United Kingdom
and Canada, today announced second quarter 2024 results. CDW also
announced the approval by its Board of Directors of a quarterly
cash dividend of $0.62 per common share to be paid on September 10,
2024 to all stockholders of record as of the close of business on
August 26, 2024.
"Within an ongoing period of limited demand, the team's value as
a trusted advisor and ability to meet our customers' most pressing
needs drove strong performance in cloud, security and services,"
said Christine A. Leahy, chair and chief executive officer, CDW.
"This performance contributed to profitability that is underpinned
by the strategic investments we have made over the past five years
to enhance customer value and our returns."
"During the quarter, economic uncertainty and increased
technology complexity continued to weigh heavily on solutions spend
while refresh needs drove broad-based demand for client devices,"
said Albert J. Miralles, chief financial officer, CDW. "Our ability
to optimize cash flow generation through effective management of
our working capital provides strategic flexibility across our
capital priorities including M&A and share repurchases."
"Customers continue to turn to CDW to address their
mission-critical IT and operational needs across the full IT
solutions stack and lifecycle. We remain well-positioned to attain
our target of exceeding US IT market growth by 200 to 300 basis
points on a constant currency basis. To achieve this, we remain
laser focused on meeting the needs of our more than 250,000
customers around the globe and remaining the partner of choice for
more than 1,000 leading and emerging technology brands as the IT
market continues to evolve," concluded Leahy.
Second Quarter of 2024
Highlights:
Net sales in the second quarter of 2024 were $5,423 million,
compared to $5,626 million in the second quarter of 2023, a
decrease of 3.6 percent both on a reported and constant currency
basis. There were 64 selling days for both the three months ended
June 30, 2024 and 2023. Continued economic uncertainty and the
complex technology landscape has led customers to be cautious and
measured in their approach to technology spending, leading to a
decline in Net sales. The second quarter of 2024 Net sales
performance included:
- Corporate segment Net sales of $2,195 million, 2.2 percent
lower than 2023.
- Small Business segment Net sales of $383 million, 3.4 percent
lower than 2023.
- Public segment Net sales of $2,243 million, 2.3 percent lower
than 2023. Public results were primarily driven by decrease in Net
sales to Government and Education customers of 6.2 percent and 0.9
percent respectively. Net sales to Healthcare customers remained
relatively consistent.
- Net sales for CDW's UK and Canadian operations, combined as
"Other" for financial reporting purposes, were $602 million, 12.7
percent lower than 2023.
Gross profit remained relatively consistent in the second
quarter of 2024 at $1,183 million, compared to $1,182 million for
the second quarter of 2023, representing an increase of 0.1
percent. Gross profit margin was 21.8 percent in the second quarter
of 2024 versus 21.0 percent in the second quarter of 2023,
representing an increase of 80 basis points. The increase in Gross
profit margin was primarily due to a higher contribution of netted
down revenue, primarily software as a service, partially offset by
an increased mix into notebooks/mobile devices.
Selling and administrative expenses were $750 million in the
second quarter of 2024, compared to $769 million in the second
quarter of 2023, representing a decrease of 2.5 percent. The
decrease was primarily due to workplace optimization costs in the
second quarter of 2023 with no similar activity in the current
quarter, partially offset by increased transformation and other
related costs.
Operating income was $433 million in the second quarter of 2024,
compared to $412 million in the second quarter of 2023,
representing an increase of 5.1 percent. Non-GAAP operating income
was $510 million in the second quarter of 2024, compared to $530
million in the second quarter of 2023, representing a decrease of
3.7 percent. Operating income margin and Non-GAAP operating income
margin were 8.0 percent and 9.4 percent, respectively, for the
second quarter of 2024 versus 7.3 percent and 9.4 percent,
respectively, for the second quarter of 2023.
Interest expense, net includes interest expense and interest
income. Interest expense, net was $52 million for second quarter of
2024, compared to $58 million for the second quarter of 2023,
representing a decrease of 10.1 percent. The decrease was primarily
due to increased interest income earned on higher average cash
balances and decreased interest expense on lower debt levels.
The effective tax rate was 26.0 percent in the second quarter of
2024, compared to 25.7 percent in the second quarter of 2023, which
resulted in income tax expense of $99 million and $91 million,
respectively. The increase in the effective tax rate was primarily
attributable to lower excess tax benefits on equity-based
compensation.
Net income was $281 million in the second quarter of 2024,
compared to $263 million in the second quarter of 2023,
representing an increase of 7.0 percent. Non-GAAP net income was
$339 million in the second quarter of 2024, compared to $349
million in the second quarter of 2023, representing a decrease of
2.9 percent.
Weighted-average diluted shares outstanding were 136 million for
the second quarter of 2024 and 2023. Net income per diluted share
for the second quarter of 2024 was $2.07, compared to $1.92 for the
second quarter of 2023, representing an increase of 7.5 percent.
Non-GAAP net income per diluted share for the second quarter of
2024 was $2.50, compared to $2.56 for the second quarter of 2023,
representing a decrease of 2.6 percent.
Forward-Looking Statements
This release contains "forward-looking statements" within the
meaning of the federal securities laws. All statements other than
statements of historical fact are forward-looking statements. These
statements relate to analyses and other information, which are
based on forecasts of future results or events and estimates of
amounts not yet determinable. These statements also relate to our
future prospects, growth, developments and business strategies. We
claim the protection of The Private Securities Litigation Reform
Act of 1995 for all forward-looking statements in this release.
These forward-looking statements are identified by the use of
terms and phrases such as "anticipate," "assume," "believe,"
"estimate," "expect," "goal," "intend," "plan," "potential,"
"predict," "project," "target" and similar terms and phrases or
future or conditional verbs such as "could," "may," "should,"
"will," and "would." However, these words are not the exclusive
means of identifying such statements. Although we believe that our
plans, intentions and other expectations reflected in or suggested
by such forward-looking statements are reasonable, we cannot assure
you that we will achieve those plans, intentions or expectations.
All forward-looking statements are subject to risks and
uncertainties that may cause actual results or events to differ
materially from those that we expected.
Important factors that could cause actual results or events to
differ materially from our expectations, or cautionary statements,
are disclosed under the sections entitled "Risk Factors" and
"Trends and Key Factors Affecting our Financial Performance"
included in our Annual Report on Form 10-K for the year ended
December 31, 2023 and from time to time in our subsequent Quarterly
Reports on Form 10-Q and our other US Securities and Exchange
Commission ("SEC") filings and public communications. These factors
include, among others, inflationary pressures; level of interest
rates; CDW's relationships with vendor partners and terms of their
agreements; continued innovations in technology by CDW's vendor
partners; the use or capabilities of artificial intelligence;
substantial competition that could reduce CDW's market share; the
continuing development, maintenance and operation of CDW's
information technology systems; potential breaches of data security
and failure to protect our information technology systems from
cybersecurity threats; potential failures to provide high-quality
services to CDW's customers; potential losses of any key personnel,
significant increases in labor costs or ineffective workforce
management; potential adverse occurrences at one of CDW's primary
facilities or third-party data centers, including as a result of
climate change; increases in the cost of commercial delivery
services or disruptions of those services; CDW's exposure to
accounts receivable and inventory risks; future acquisitions or
alliances; fluctuations in CDW's operating results; fluctuations in
foreign currency; global and regional economic and political
conditions, including the impact of pandemics such as COVID-19 and
armed conflicts; potential interruptions of the flow of products
from suppliers; decreases in spending on technology products and
services, including impacts of adverse change in government
spending policies; potential failures to comply with Public segment
contracts or applicable laws and regulations; current and future
legal proceedings, investigations and audits, including
intellectual property infringement claims; changes in laws,
including regulations or interpretations thereof, or the potential
failure to meet stakeholder expectations on environmental
sustainability and corporate responsibility matters; CDW's level of
indebtedness; restrictions imposed by agreements relating to CDW's
indebtedness on its operations and liquidity; failure to maintain
the ratings assigned to CDW's debt securities by rating agencies;
changes in, or the discontinuation of, CDW's share repurchase
program or dividend payments; and other risk factors or
uncertainties identified from time to time in CDW's filings with
the SEC. All written and oral forward-looking statements
attributable to us, or persons acting on our behalf, are expressly
qualified in their entirety by those cautionary statements as well
as other cautionary statements that are made from time to time in
our other SEC filings and public communications. You should
evaluate all forward-looking statements made in this release in the
context of these risks and uncertainties.
We caution you that the important factors referenced above may
not reflect all of the factors that could cause actual results or
events to differ from our expectations. In addition, we cannot
assure you that we will realize the results or developments we
expect or anticipate or, even if substantially realized, that they
will result in the consequences or affect us or our operations in
the way we expect. The forward-looking statements included in this
release are made only as of the date hereof. We undertake no
obligation to publicly update or revise any forward-looking
statement as a result of new information, future events or
otherwise, except as otherwise required by law.
Non-GAAP Financial Information
Generally, a non-GAAP financial measure is a numerical measure
of a company's performance or financial condition that either
excludes or includes amounts that are not normally included or
excluded in the most directly comparable measure calculated and
presented in accordance with US GAAP. Non-GAAP measures used by
management may differ from similar measures used by other
companies, even when similar terms are used to identify such
measures.
Our non-GAAP performance measures include Non-GAAP operating
income, Non-GAAP operating income margin, Non-GAAP net income,
Non-GAAP net income per diluted share and Net sales on a constant
currency basis, and our non-GAAP financial condition measures
include Free cash flow and Adjusted free cash flow. These non-GAAP
performance measures and non-GAAP financial condition measures are
collectively referred to as "non-GAAP financial measures."
Non-GAAP operating income excludes, among other things, charges
related to the amortization of acquisition-related intangible
assets, equity-based compensation and the associated payroll taxes,
acquisition and integration expenses, transformation initiatives
and workplace optimization. Non-GAAP operating income margin is
defined as Non-GAAP operating income as a percentage of Net sales.
Non-GAAP net income and Non-GAAP net income per diluted share
exclude, among other things, charges related to acquisition-related
intangible asset amortization, equity-based compensation,
acquisition and integration expenses, transformation initiatives,
workplace optimization and the associated tax effects of each. Net
sales on a constant currency basis is defined as Net sales
excluding the impact of foreign currency translation on Net sales.
Free cash flow is defined as Net cash provided by operating
activities less capital expenditures. Adjusted free cash flow is
defined as Free cash flow adjusted to include certain cash flows
from financing activities incurred in the normal course of
operations or as capital expenditures.
We believe our non-GAAP performance measures provide analysts,
investors and management with useful information regarding the
underlying operating performance of our business, as they remove
the impact of items that management believes are not reflective of
underlying operating performance. Management uses these measures to
evaluate period-over-period performance as management believes they
provide a more comparable measure of the underlying business. We
also present non-GAAP financial condition measures as we believe
they provide analysts, investors and management with more
information regarding our liquidity and capital resources. Certain
non-GAAP financial measures are also used to determine certain
components of performance-based compensation.
Our outlook includes non-GAAP financial measures because certain
reconciling items are dependent on future events that either cannot
be controlled, such as currency impacts or interest rates, or
reliably predicted because they are not part of our underlying
performance, such as refinancing activities or acquisition and
integration expenses.
The financial statement tables that accompany this press release
include a reconciliation of non-GAAP financial measures to the most
comparable US GAAP financial measures.
About CDW
CDW Corporation is a leading multi-brand provider of information
technology solutions to business, government, education and
healthcare customers in the United States, the United Kingdom and
Canada. A Fortune 500 company and member of the S&P 500 Index,
CDW helps its customers to navigate an increasingly complex IT
market and maximize return on their technology investments. For
more information about CDW, please visit www.CDW.com.
Webcast
CDW Corporation will hold a conference call today, July 31, 2024
at 7:30 a.m. CT/8:30 a.m. ET to discuss its second quarter
financial results. The conference call, which will be broadcast
live via the Internet, and a copy of this press release along with
supplemental slides used during the call, can be accessed on CDW’s
website at investor.cdw.com. For those unable to participate in the
live call, a replay of the webcast will be available at
investor.cdw.com approximately 90 minutes after the completion of
the call and will be accessible on the site for approximately one
year.
CDWPR-FI
CDW CORPORATION AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
OPERATIONS
(dollars and shares in millions,
except per-share amounts)
(unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
% Change(i)
2024
2023
% Change(i)
Net sales
$
5,423.4
$
5,626.1
(3.6
)%
$
10,296.1
$
10,729.2
(4.0
)%
Cost of sales
4,240.3
4,444.6
(4.6
)
8,049.7
8,458.3
(4.8
)
Gross profit
1,183.1
1,181.5
0.1
2,246.4
2,270.9
(1.1
)
Selling and administrative expenses
750.0
769.3
(2.5
)
1,485.3
1,503.4
(1.2
)
Operating income
433.1
412.2
5.1
761.1
767.5
(0.8
)
Interest expense, net
(52.3
)
(58.2
)
(10.1
)
(103.6
)
(115.9
)
(10.6
)
Other expense, net
(1.1
)
(0.6
)
83.3
(1.2
)
(1.9
)
(36.8
)
Income before income taxes
379.7
353.4
7.4
656.3
649.7
1.0
Income tax expense
(98.6
)
(90.8
)
8.6
(159.1
)
(157.0
)
1.3
Net income
$
281.1
$
262.6
7.0
%
$
497.2
$
492.7
0.9
%
Net income per common share:
Basic
$
2.10
$
1.95
7.4
%
$
3.70
$
3.65
1.5
%
Diluted
$
2.07
$
1.92
7.5
%
$
3.66
$
3.60
1.6
%
Weighted-average common shares
outstanding:
Basic
134.1
134.6
134.3
135.1
Diluted
135.6
136.1
135.8
136.7
(i)
There were 64 selling days for both the
three months ended June 30, 2024 and 2023. There were 128 selling
days for both the six months ended June 30, 2024 and 2023. Average
Daily Sales is defined as Net sales divided by the number of
selling days.
CDW CORPORATION AND
SUBSIDIARIES
NET SALES DETAIL
(dollars in millions)
(unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
% Change(i)
2024
2023
% Change(i)
Corporate
$
2,195.2
$
2,245.0
(2.2
)%
$
4,331.1
$
4,448.7
(2.6
)%
Small Business
382.9
396.2
(3.4
)
763.8
807.6
(5.4
)
Public:
Government
639.1
681.2
(6.2
)
1,182.4
1,232.7
(4.1
)
Education
1,017.4
1,026.8
(0.9
)
1,614.2
1,692.5
(4.6
)
Healthcare
586.8
587.1
(0.1
)
1,171.4
1,182.7
(1.0
)
Total Public
2,243.3
2,295.1
(2.3
)
3,968.0
4,107.9
(3.4
)
Other
602.0
689.8
(12.7
)
1,233.2
1,365.0
(9.7
)
Total Net sales
$
5,423.4
$
5,626.1
(3.6
)%
$
10,296.1
$
10,729.2
(4.0
)%
(i)
There were 64 selling days for both the
three months ended June 30, 2024 and 2023. There were 128 selling
days for both the six months ended June 30, 2024 and 2023. Average
Daily Sales is defined as Net sales divided by the number of
selling days.
CDW CORPORATION AND
SUBSIDIARIES
TIMING OF REVENUE
RECOGNITION
(dollars in millions)
(unaudited)
Three Months Ended June 30,
2024
Corporate
Small Business
Public
Other
Total
Timing of Revenue Recognition
Transferred at a point in time where CDW
is principal
$
1,830.4
$
337.2
$
1,992.2
$
512.0
$
4,671.8
Transferred at a point in time where CDW
is agent
193.2
34.2
134.5
30.8
392.7
Transferred over time where CDW is
principal
171.6
11.5
116.6
59.2
358.9
Total Net sales
$
2,195.2
$
382.9
$
2,243.3
$
602.0
$
5,423.4
Three Months Ended June 30,
2023
Corporate
Small Business
Public
Other
Total
Timing of Revenue Recognition
Transferred at a point in time where CDW
is principal
$
1,891.3
$
354.9
$
2,080.7
$
607.3
$
4,934.2
Transferred at a point in time where CDW
is agent
185.0
32.9
116.7
26.7
361.3
Transferred over time where CDW is
principal
168.7
8.4
97.7
55.8
330.6
Total Net sales
$
2,245.0
$
396.2
$
2,295.1
$
689.8
$
5,626.1
Six Months Ended June 30,
2024
Corporate
Small Business
Public
Other
Total
Timing of Revenue Recognition
Transferred at a point in time where CDW
is principal
$
3,609.7
$
668.9
$
3,507.9
$
1,054.1
$
8,840.6
Transferred at a point in time where CDW
is agent
388.0
73.3
242.7
62.0
766.0
Transferred over time where CDW is
principal
333.4
21.6
217.4
117.1
689.5
Total Net sales
$
4,331.1
$
763.8
$
3,968.0
$
1,233.2
$
10,296.1
Six Months Ended June 30,
2023
Corporate
Small Business
Public
Other
Total
Timing of Revenue Recognition
Transferred at a point in time where CDW
is principal
$
3,752.7
$
720.2
$
3,689.3
$
1,197.8
$
9,360.0
Transferred at a point in time where CDW
is agent
370.4
69.7
218.2
55.1
713.4
Transferred over time where CDW is
principal
325.6
17.7
200.4
112.1
655.8
Total Net sales
$
4,448.7
$
807.6
$
4,107.9
$
1,365.0
$
10,729.2
CDW CORPORATION AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
(dollars in millions)
June 30, 2024
December 31, 2023
June 30, 2023
Assets
(unaudited)
(unaudited)
Current assets:
Cash and cash equivalents
$
665.3
$
588.7
$
203.9
Accounts receivable, net of allowance for
credit losses
of $32.6, $28.8, and $26.0,
respectively
4,718.8
4,567.5
4,496.9
Merchandise inventory
724.8
668.1
789.8
Miscellaneous receivables
545.3
470.5
518.3
Prepaid expenses and other
389.4
410.2
479.1
Total current assets
7,043.6
6,705.0
6,488.0
Operating lease right-of-use assets
130.9
128.8
137.2
Property and equipment, net
186.9
195.5
194.4
Goodwill
4,409.3
4,413.4
4,428.2
Other intangible assets, net
1,295.0
1,369.7
1,424.6
Other assets
573.0
472.2
313.5
Total assets
$
13,638.7
$
13,284.6
$
12,985.9
Liabilities and Stockholders’
Equity
Current liabilities:
Accounts payable - trade
$
3,118.6
$
2,881.0
$
2,866.8
Accounts payable - inventory financing
404.2
430.9
616.2
Current maturities of long-term debt
1,203.5
613.1
42.2
Contract liabilities
451.4
487.4
442.1
Accrued expenses and other current
liabilities
1,030.4
1,029.6
1,030.0
Total current liabilities
6,208.1
5,442.0
4,997.3
Long-term liabilities:
Debt
4,424.8
5,031.8
5,721.0
Deferred income taxes
151.7
171.4
180.2
Operating lease liabilities
161.7
164.0
173.6
Other liabilities
517.5
432.9
300.6
Total long-term liabilities
5,255.7
5,800.1
6,375.4
Total stockholders’ equity
2,174.9
2,042.5
1,613.2
Total liabilities and stockholders’
equity
$
13,638.7
$
13,284.6
$
12,985.9
CDW CORPORATION AND
SUBSIDIARIES
DEBT AND WORKING CAPITAL
INFORMATION
(dollars in millions)
(unaudited)
June 30, 2024
December 31, 2023
June 30, 2023
Debt and Revolver Availability
Cash and cash equivalents
$
665.3
$
588.7
$
203.9
Total debt
5,628.3
5,644.9
5,763.2
Net debt(i)
4,963.0
5,056.2
5,559.3
Revolver availability
1,245.5
1,208.1
984.4
Cash plus revolver availability
1,910.8
1,796.8
1,188.3
Working Capital(ii)
Days of sales outstanding
72
77
67
Days of supply in inventory
13
13
14
Days of purchases outstanding
(68
)
(73
)
(67
)
Cash conversion cycle
17
17
14
(i)
Defined as Total debt minus Cash and cash
equivalents
(ii)
Based on a rolling three-month average
CDW CORPORATION AND
SUBSIDIARIES
CASH FLOW INFORMATION
(dollars in millions)
(unaudited)
Six Months Ended June
30,
2024
2023
Net cash provided by operating
activities
$
589.9
$
593.6
Capital expenditures
(60.4
)
(71.3
)
Acquisition of businesses, net of cash
acquired
(0.2
)
(75.5
)
Net cash used in investing activities
(60.6
)
(146.8
)
Net change in accounts payable - inventory
financing
(26.7
)
161.6
Other cash flows used in financing
activities
(422.9
)
(721.1
)
Net cash used in financing activities
(449.6
)
(559.5
)
Effect of exchange rate changes on cash
and cash equivalents
(3.1
)
1.4
Net increase (decrease) in cash and cash
equivalents
76.6
(111.3
)
Cash and cash equivalents - beginning of
period
588.7
315.2
Cash and cash equivalents - end of
period
$
665.3
$
203.9
Supplementary disclosure of cash flow
information:
Interest paid
$
(114.2
)
$
(117.0
)
Income taxes paid, net
$
(147.6
)
$
(174.9
)
CDW CORPORATION AND
SUBSIDIARIES
NON-GAAP FINANCIAL MEASURE
RECONCILIATIONS
CDW has included reconciliations of Non-GAAP operating income,
Non-GAAP operating income margin, Non-GAAP net income, Non-GAAP net
income per diluted share and Net sales on a constant currency basis
for the three and six months ended June 30, 2024 and 2023 below. In
addition, a reconciliation of Free cash flow and Adjusted free cash
flow is included for the six months ended June 30, 2024 and
2023.
CDW CORPORATION AND
SUBSIDIARIES
NON-GAAP OPERATING INCOME AND
NON-GAAP OPERATING INCOME MARGIN
(dollars in millions)
(unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2024
% of Net sales
2023
% of Net sales
2024
% of Net sales
2023
% of Net sales
Operating income, as reported
$
433.1
8.0
%
$
412.2
7.3
%
$
761.1
7.4
%
$
767.5
7.2
%
Amortization of intangibles(i)
37.8
37.3
75.5
78.9
Equity-based compensation
28.7
24.8
48.1
45.6
Transformation initiatives(ii)
8.7
4.6
14.8
9.6
Acquisition and integration expenses
0.9
8.7
1.6
17.6
Workplace optimization(iii)
—
42.0
7.3
42.9
Other adjustments
1.1
0.2
5.4
2.0
Non-GAAP operating income
$
510.3
9.4
%
$
529.8
9.4
%
$
913.8
8.9
%
$
964.1
9.0
%
(i)
Includes amortization expense for
acquisition-related intangible assets, primarily customer
relationships, customer contracts and trade names.
(ii)
Includes costs related to strategic
transformation initiatives focused on optimizing various operations
and systems.
(iii)
Includes costs related to the workforce
reduction program and charges related to the reduction of our real
estate lease portfolio.
CDW CORPORATION AND
SUBSIDIARIES
NON-GAAP NET INCOME
AND NON-GAAP NET INCOME PER
DILUTED SHARE
(dollars and shares in millions,
except per-share amounts)
(unaudited)
Three Months Ended June
30,
2024
2023
Income before Income
Taxes
Income Tax Expense(i)
Net Income
Effective Tax Rate
Income before Income
Taxes
Income Tax Expense(i)
Net Income
Effective Tax Rate
Net Income % Change
US GAAP, as reported
$
379.7
$
(98.6
)
$
281.1
26.0
%
$
353.4
$
(90.8
)
$
262.6
25.7
%
7.0
%
Amortization of intangibles(ii)
37.8
(9.8
)
28.0
37.3
(9.6
)
27.7
Equity-based compensation
28.7
(7.0
)
21.7
24.8
(7.1
)
17.7
Transformation initiatives(iii)
8.7
(2.3
)
6.4
4.6
(1.2
)
3.4
Acquisition and integration expenses
0.9
(0.2
)
0.7
8.7
(2.3
)
6.4
Workplace optimization(iv)
—
—
—
42.0
(10.9
)
31.1
Other adjustments
1.1
(0.2
)
0.9
0.2
(0.1
)
0.1
Non-GAAP
$
456.9
$
(118.1
)
$
338.8
25.8
%
$
471.0
$
(122.0
)
$
349.0
25.9
%
(2.9
)%
Net income per diluted share
$
2.07
$
1.92
Non-GAAP net income per diluted share
$
2.50
$
2.56
Shares used in computing US GAAP and
Non-GAAP net income per diluted share
135.6
136.1
(i)
Income tax on non-GAAP adjustments
includes excess tax benefits associated with equity-based
compensation.
(ii)
Includes amortization expense for
acquisition-related intangible assets, primarily customer
relationships, customer contracts and trade names.
(iii)
Includes costs related to strategic
transformation initiatives focused on optimizing various operations
and systems.
(iv)
Includes costs related to the workforce
reduction program and charges related to the reduction of our real
estate lease portfolio.
CDW CORPORATION AND
SUBSIDIARIES
NON-GAAP NET INCOME
AND NON-GAAP NET INCOME PER
DILUTED SHARE
(dollars and shares in millions,
except per-share amounts)
(unaudited)
Six Months Ended June
30,
2024
2023
Income before Income
Taxes
Income Tax Expense(i)
Net Income
Effective Tax Rate
Income before Income
Taxes
Income Tax Expense(i)
Net Income
Effective Tax Rate
Net Income % Change
US GAAP, as reported
$
656.3
$
(159.1
)
$
497.2
24.2
%
$
649.7
$
(157.0
)
$
492.7
24.2
%
0.9
%
Amortization of intangibles(ii)
75.5
(19.6
)
55.9
78.9
(20.5
)
58.4
Equity-based compensation
48.1
(23.1
)
25.0
45.6
(22.4
)
23.2
Transformation initiatives(iii)
14.8
(3.9
)
10.9
9.6
(2.5
)
7.1
Acquisition and integration expenses
1.6
(0.4
)
1.2
17.6
(4.6
)
13.0
Workplace optimization(iv)
7.3
(1.9
)
5.4
42.9
(11.1
)
31.8
Other adjustments
5.4
(1.4
)
4.0
2.0
(0.5
)
1.5
Non-GAAP
$
809.0
$
(209.4
)
$
599.6
25.9
%
$
846.3
$
(218.6
)
$
627.7
25.8
%
(4.5
)%
Net income per diluted share, as
reported
$
3.66
$
3.60
Non-GAAP net income per diluted share
$
4.41
$
4.59
Shares used in computing US GAAP and
Non-GAAP net income per diluted share
135.8
136.7
(i)
Income tax on non-GAAP adjustments
includes excess tax benefits associated with equity-based
compensation.
(ii)
Includes amortization expense for
acquisition-related intangible assets, primarily customer
relationships, customer contracts and trade names.
(iii)
Includes costs related to strategic
transformation initiatives focused on optimizing various operations
and systems.
(iv)
Includes costs related to the workforce
reduction program and charges related to the reduction of our real
estate lease portfolio.
CDW CORPORATION AND
SUBSIDIARIES
NET SALES ON A CONSTANT
CURRENCY BASIS
(dollars in millions)
(unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
% Change(i)
2024
2023
% Change(i)
Net sales, as reported
$
5,423.4
$
5,626.1
(3.6
)%
$
10,296.1
$
10,729.2
(4.0
)%
Foreign currency translation(ii)
—
(0.5
)
—
19.2
Net sales, on a constant currency
basis
$
5,423.4
$
5,625.6
(3.6
)%
$
10,296.1
$
10,748.4
(4.2
)%
(i)
There were 64 selling days for both the
three months ended June 30, 2024 and 2023. There were 128 selling
days for both the six months ended June 30, 2024 and 2023. Average
daily sales is defined as Net sales divided by the number of
selling days.
(ii)
Represents the effect of translating the
prior year results of CDW UK and CDW Canada at the average exchange
rates applicable in the current year.
CDW CORPORATION AND
SUBSIDIARIES
FREE CASH FLOW AND ADJUSTED
FREE CASH FLOW
(dollars in millions)
(unaudited)
Six Months Ended June
30,
2024
2023
Net cash provided by operating
activities
$
589.9
$
593.6
Capital expenditures
(60.4
)
(71.3
)
Free cash flow
529.5
522.3
Net change in accounts payable - inventory
financing
(26.7
)
161.6
Adjusted free cash flow(i)
$
502.8
$
683.9
(i)
Defined as Net cash provided by operating activities less
capital expenditures, adjusted to include cash flows from financing
activities that relate to the purchase of inventory.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240731643388/en/
Investor Inquiries Steven O’Brien
Vice President, Investor Relations (847) 968-0238
investorrelations@cdw.com
Media Inquires Sara Granack Vice
President, Corporate Communications (847) 419-7411
mediarelations@cdw.com
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