CLEARWATER, Fla., March 19, 2015 (GLOBE NEWSWIRE) -- Tech Data Corporation (Nasdaq:TECD) (the "Company") today announced its financial results for the fourth quarter ended January 31, 2015.
| Three Months ended January 31, | Twelve Months ended January 31, | |||
|
($ in millions, except per share amounts) |
2015 | 2014 | 2015 | 2014 |
| Net Sales | $7,339.5 | $7,973.1 | $27,670.6 | $26,821.9 |
| Operating income (GAAP) | $101.7 | $97.7 | $267.6 | $227.5 |
| Operating margin (GAAP) | 1.39% | 1.23% | 0.97% | 0.85% |
| Operating income (Non-GAAP) | $111.7 | $117.3 | $308.0 | $274.9 |
| Operating margin (Non-GAAP) | 1.52% | 1.47% | 1.11% | 1.03% |
| Net income (GAAP) | $80.7 | $109.8 | $175.2 | $179.9 |
| Net income (Non-GAAP) | $74.9 | $80.4 | $190.8 | $173.0 |
| EPS - diluted (GAAP) | $2.11 | $2.87 | $4.57 | $4.71 |
| EPS - diluted (Non-GAAP) | $1.96 | $2.10 | $4.97 | $4.52 |
| 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. | ||||
Financial Highlights for the Fourth Quarter Ended January 31, 2015:
-
Net sales were $7.3 billion, a decrease of 8 percent from the prior-year quarter. Excluding the negative impact of the weakening of certain foreign currencies against the U.S. dollar, consolidated net sales were flat compared to the prior-year quarter.
- The Americas: Net sales were $2.6 billion (approximately 35 percent of worldwide net sales), a decrease of 5 percent from the prior-year quarter.
- Europe: Net sales were $4.8 billion (approximately 65 percent of worldwide net sales), a decrease of 9 percent (an increase of 1 percent in euros) from the prior-year quarter.
- Gross profit was $372.3 million, or 5.07 percent of net sales, compared to $398.0 million, or 4.99 percent of net sales in the prior-year quarter.
- Selling, general and administrative expenses ("SG&A") were $266.9 million, or 3.64 percent of net sales, compared to $288.0 million, or 3.61 percent of net sales in the prior-year quarter. Non-GAAP SG&A was $260.5 million, or 3.55 percent of net sales, compared to $280.7 million, or 3.52 percent of net sales in the prior-year quarter.
-
Worldwide operating income was $101.7 million, or 1.39 percent of net sales, compared to $97.7 million or 1.23 percent of net sales in the prior-year quarter. Non-GAAP operating income was $111.7 million, or 1.52 percent of net sales, compared to $117.3 million, or 1.47 percent of net sales in the prior-year quarter.
- The Americas: Operating income was $37.8 million, or 1.47 percent of net sales, compared to $43.6 million, or 1.62 percent of net sales in the prior-year quarter. Non-GAAP operating income was $39.3 million, or 1.53 percent of net sales, compared to $36.3 million, or 1.35 percent of net sales in the prior-year quarter.
- Europe: Operating income was $67.9 million, or 1.42 percent of net sales, compared to $56.0 million, or 1.06 percent in the prior-year quarter. Non-GAAP operating income was $76.4 million, or 1.60 percent of net sales, compared to $82.9 million, or 1.57 percent of net sales in the prior-year quarter.
- Stock-based compensation expense was $4.0 million, compared to $1.9 million in the prior-year quarter. These expenses are not included in the regional segment reported results, but are 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 income was $80.7 million, or $2.11 per diluted share, compared to $109.8 million, or $2.87 per diluted share in the prior-year quarter. Non-GAAP net income was $74.9 million, or $1.96 per diluted share, compared to $80.4 million or $2.10 per diluted share in the prior-year quarter.
- Net cash provided by operations was $177 million in the quarter.
Financial Highlights for the Fiscal Year Ended January 31, 2015:
-
Net sales for the fiscal year ended January 31, 2015 were $27.7 billion, an increase of 3 percent from the prior fiscal year. Excluding the negative impact of the weakening of certain foreign currencies against the U.S. dollar, consolidated net sales increased approximately 5 percent from the prior year period.
- The Americas: Net sales were $10.4 billion (approximately 38 percent of worldwide net sales), an increase of 2 percent from the prior fiscal year.
- Europe: Net sales were $17.3 billion (approximately 62 percent of worldwide net sales), an increase of 4 percent (an increase of 6 percent in euros) from the prior fiscal year.
- Gross profit was $1,394.0 million, or 5.04 percent of net sales, compared to $1,362.3 million, or 5.08 percent of net sales in the prior-year period.
- Selling, general and administrative expenses ("SG&A") were $1,114.2 million, or 4.03 percent of net sales, compared to $1,116.6 million, or 4.16 percent of net sales in the prior fiscal year. Non-GAAP SG&A was $1,086.0 million, or 3.92 percent of net sales, compared to $1,087.4 million, or 4.05 percent of net sales in the prior year period.
-
Worldwide operating income was $267.6 million, or 0.97 percent of net sales, compared to $227.5 million or 0.85 percent of net sales in the prior fiscal year. Non-GAAP operating income was $308.0 million, or 1.11 percent of net sales, compared to $274.9 million, or 1.03 percent of net sales in the prior year period.
- The Americas: Operating income was $145.1 million, or 1.39 percent of net sales, compared to $156.1 million, or 1.53 percent of net sales in the prior fiscal year. Non-GAAP operating income was $146.0 million, or 1.40 percent of net sales, compared to $134.0 million, or 1.32 percent of net sales in the prior year period.
- Europe: Operating income was $136.2 million, or 0.79 percent of net sales, compared to $80.2 million, or 0.48 percent in the prior fiscal year. Non-GAAP operating income was $175.6 million, or 1.02 percent of net sales, compared to $149.8 million, or 0.90 percent of net sales in the prior year period.
- Stock-based compensation expense was $13.7 million, compared to $8.9 million in the prior fiscal year. These expenses are not included in the regional segment reported results, but are 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 income was $175.2 million, or $4.57 per diluted share, compared to $179.9 million, or $4.71 per diluted share in the prior fiscal year. Non-GAAP net income was $190.8 million, or $4.97 per diluted share, compared to $173.0 million or $4.52 per diluted share in the prior year period.
- For fiscal year 2015, cash provided by operations was $119 million.
- Return on invested capital on a non-GAAP basis for the trailing twelve months was 11 percent.
"Our fourth quarter capped a successful fiscal year for Tech Data – a year in which we achieved profitable revenue growth and improved non-GAAP earnings, while making considerable progress on a number of operational fronts," said Robert M. Dutkowsky, chief executive officer. "Our focus on the market and operations produced good leverage, delivering double-digit growth in annual non-GAAP operating income, net income and earnings per share on low-single-digit net sales growth. For the fiscal year, we also earned a return on invested capital of 11 percent – more than 200 basis points above our weighted average cost of capital. In addition, we recently completed the $100 million share repurchase authorization announced in December, bringing our cumulative repurchases to $1.2 billion since fiscal year 2006, or nearly 44% of total shares issued. I am proud of our team's achievements in fiscal year 2015, but we have now turned our attention to the many opportunities that lie ahead."
Material Weakness Remediation
As described in the Company's Quarterly Report on Form 10-Q for the quarter ended October 31, 2014, the Company implemented various remedial actions to address previously identified material weaknesses in internal control over financial reporting. Management has determined that the remediation actions were effectively designed and demonstrated effective operation for a sufficient period of time to enable the Company to conclude that the previously identified material weaknesses have been remediated as of January 31, 2015.
Business Outlook
For the first quarter ending April 30, 2015, the Company expects low-single-digit year-over-year sales declines in both regions in local currency. This outlook takes into account the loss of approximately $75 million of net sales due to the Company's exit from Chile, Peru and Uruguay.The Company also expects a non-GAAP effective tax rate of 33 to 35 percent, and the average U.S. dollar to euro currency exchange rate to be $1.05 to €1.00.
Webcast Details
Tech Data will hold a conference call today at 9:00 a.m. (ET) to discuss its financial results for the fourth quarter ended January 31, 2015. 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"). Non-GAAP measures presented in this release or other releases, presentations and similar documents issued by the Company exclude acquisition-related intangible assets amortization expense, a benefit associated with a LCD settlement, a benefit related to a decrease in the accrual for a value added tax assessment, loss on disposal of subsidiaries, restatement and remediation-related expenses, a reversal of deferred tax valuation allowances and income taxes on undistributed earnings of assets held for sale. 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
This press release includes "forward-looking statements" within the meaning of the federal securities laws and regulations, including those regarding the Company's business outlook. These statements are subject to risks and uncertainties, including the risks identified in the Company's most recent Annual Report on Form 10-K filed April 9, 2014. A number of important factors could cause actual events and results to differ materially from those contained in or implied by the forward-looking statements. Forward-looking statements reflect management's analysis as of the filing date of this press release. The Company does not undertake to update or revise these statements to reflect subsequent developments.
About Tech Data
Tech Data Corporation is one of the world's largest wholesale distributors of technology products, services and solutions. Its advanced logistics capabilities and value added services enable 115,000 resellers to efficiently and cost effectively support the diverse technology needs of end users in more than 100 countries. Tech Data generated $27.7 billion in net sales for the fiscal year ended January 31, 2015. It is ranked No. 111 on the Fortune 500® and one of Fortune's "World's Most Admired Companies." To learn more, visit www.techdata.com, or follow us on Facebook and Twitter.
| TECH DATA CORPORATION AND SUBSIDIARIES | ||||
| CONSOLIDATED STATEMENT OF OPERATIONS | ||||
| (In thousands, except per share amounts) | ||||
| (unaudited) | ||||
| Three months ended | Twelve months ended | |||
| January 31, | January 31, | |||
| 2015 | 2014 | 2015 | 2014 | |
| Net sales | $ 7,339,491 | $ 7,973,107 | $ 27,670,632 | $ 26,821,904 |
| Cost of products sold | 6,967,222 | 7,575,091 | 26,276,678 | 25,459,558 |
| Gross profit | 372,269 | 398,016 | 1,393,954 | 1,362,346 |
| Operating expenses: | ||||
| Selling, general and administrative expenses | 266,890 | 288,044 | 1,114,234 | 1,116,553 |
| Restatement and remediation-related expenses | 2,365 | 24,826 | 22,043 | 53,791 |
| LCD settlements | -- | (12,597) | (5,059) | (35,511) |
| Value added tax assessment | -- | -- | (6,229) | -- |
| Loss on disposal of subsidiaries | 1,330 | -- | 1,330 | -- |
| 270,585 | 300,273 | 1,126,319 | 1,134,833 | |
| Operating income | 101,684 | 97,743 | 267,635 | 227,513 |
| Interest expense | 5,909 | 7,155 | 26,548 | 26,606 |
| Other expense (income), net | 1,061 | (1,482) | 1,903 | (3,402) |
| Income before income taxes | 94,714 | 92,070 | 239,184 | 204,309 |
| Provision for income taxes | 14,037 | (17,691) | 64,012 | 24,377 |
| Net income | $ 80,677 | $ 109,761 | $ 175,172 | $ 179,932 |
| Net income per share: | ||||
| Basic | $ 2.12 | $ 2.88 | $ 4.59 | $ 4.73 |
| Diluted | $ 2.11 | $ 2.87 | $ 4.57 | $ 4.71 |
| Weighted average common shares outstanding: | ||||
| Basic | 38,054 | 38,066 | 38,172 | 38,020 |
| Diluted | 38,282 | 38,274 | 38,354 | 38,228 |
| TECH DATA CORPORATION AND SUBSIDIARIES | ||
| CONSOLIDATED BALANCE SHEET | ||
| (In thousands, except par value and share amounts) | ||
| January 31, | January 31, | |
| 2015 | 2014 | |
| ASSETS | (unaudited) | |
| Current assets: | ||
| Cash and cash equivalents | $ 542,995 | $ 570,101 |
| Accounts receivable, less allowances of $50,143 and $58,754 | 2,811,963 | 3,215,729 |
| Inventories | 1,959,627 | 2,450,782 |
| Prepaid expenses and other assets | 161,832 | 232,423 |
| Assets held for sale | 101,706 | -- |
| Total current assets | 5,578,123 | 6,469,035 |
| Property and equipment, net | 63,104 | 77,631 |
| Other assets, net | 497,019 | 623,000 |
| Total assets | $ 6,138,246 | $ 7,169,666 |
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||
| Current liabilities: | ||
| Accounts payable | $ 3,119,618 | $ 3,959,410 |
| Accrued expenses and other liabilities | 538,758 | 614,697 |
| Revolving credit loans and current maturities of long-term debt, net | 13,303 | 43,481 |
| Liabilities held for sale | 71,447 | -- |
| Total current liabilities | 3,743,126 | 4,617,588 |
| Long-term debt, less current maturities | 353,097 | 354,121 |
| Other long-term liabilities | 81,880 | 99,346 |
| Total liabilities | $ 4,178,103 | $ 5,071,055 |
| Shareholders' equity: | ||
| Common stock, par value $0.0015; 200,000,000 shares authorized; 59,245,585 shares issued at January 31, 2015 and January 31, 2014 | $ 89 | $ 89 |
| Additional paid-in capital | 679,973 | 675,597 |
| Treasury Stock, at cost (21,866,069 and 21,177,130 shares at January 31, 2015 and January 31, 2014) | (939,143) | (894,936) |
| Retained earnings | 2,168,462 | 1,993,290 |
| Accumulated other comprehensive income | 50,762 | 324,571 |
| Total shareholders' equity | 1,960,143 | 2,098,611 |
| Total liabilities and shareholders' equity | $ 6,138,246 | $ 7,169,666 |
| TECH DATA CORPORATION AND SUBSIDIARIES | ||||
| GAAP TO NON-GAAP RECONCILIATION | ||||
| (In thousands) | ||||
| Q4 FY15 - Three months ended January 31, 2015 | ||||
| Americas(1) | Europe(1) |
Stock Compensation Expense |
Consolidated | |
| Net Sales | $ 2,563,662 | $ 4,775,829 | $ 7,339,491 | |
| GAAP operating income(1) | $ 37,776 | $ 67,878 | $ (3,970) | $ 101,684 |
| Restatement and remediation-related expenses | 36 | 2,329 | 2,365 | |
| Loss on disposal of subsidiaries | 1,330 | -- | 1,330 | |
| Acquisition-related amortization of intangibles | 170 | 6,184 | 6,354 | |
| Total non-GAAP operating income adjustments | $ 1,536 | $ 8,513 | $ 10,049 | |
| Non-GAAP operating income | $ 39,312 | $ 76,391 | $ (3,970) | $ 111,733 |
| GAAP operating margin | 1.47% | 1.42% | 1.39% | |
| Non-GAAP operating margin | 1.53% | 1.60% | 1.52% | |
| (1) GAAP operating income does not include stock compensation expense at the regional level. | ||||
| Q4 FY14 - Three months ended January 31, 2014 | ||||
| Americas (1) | Europe (1) |
Stock Compensation Expense |
Consolidated | |
| Net Sales | $ 2,699,540 | $ 5,273,567 | $ 7,973,107 | |
| GAAP operating income(1) | $ 43,627 | $ 56,025 | $ (1,909) | $ 97,743 |
| Restatement and remediation-related expenses | 5,130 | 19,696 | 24,826 | |
| LCD Settlements | (12,597) | -- | (12,597) | |
| Acquisition-related amortization of intangibles | 170 | 7,143 | 7,313 | |
| Total non-GAAP operating income adjustments | $ (7,297) | $ 26,839 | $ 19,542 | |
| Non-GAAP operating income | $ 36,330 | $ 82,864 | $ (1,909) | $ 117,285 |
| GAAP operating margin | 1.62% | 1.06% | 1.23% | |
| Non-GAAP operating margin | 1.35% | 1.57% | 1.47% | |
| (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, except per share amounts) | ||||
| Twelve months ended January 31, 2015 | ||||
| Americas(1) | Europe(1) |
Stock Compensation Expense |
Consolidated | |
| Net Sales | $ 10,406,209 | $ 17,264,423 | $ 27,670,632 | |
| GAAP operating income(1) | $ 145,107 | $ 136,196 | $ (13,668) | $ 267,635 |
| Restatement and remediation-related expenses | 3,973 | 18,070 | 22,043 | |
| LCD settlements | (5,059) | -- | (5,059) | |
| Loss on disposal of subsidiaries | 1,330 | -- | 1,330 | |
| Value added tax assessment | -- | (6,229) | (6,229) | |
| Acquisition-related amortization of intangibles | 680 | 27,585 | 28,265 | |
| Total non-GAAP operating income adjustments | $ 924 | $ 39,426 | $ 40,350 | |
| Non-GAAP operating income | $ 146,031 | $ 175,622 | $ (13,668) | $ 307,985 |
| GAAP operating margin | 1.39% | 0.79% | 0.97% | |
| Non-GAAP operating margin | 1.40% | 1.02% | 1.11% | |
| (1) GAAP operating income does not include stock compensation expense at the regional level. | ||||
| Twelve months ended January 31, 2014 | ||||
| Americas(1) | Europe(1) |
Stock Compensation Expense |
Consolidated | |
| Net Sales | $ 10,188,618 | $ 16,633,286 | $ 26,821,904 | |
| GAAP operating income(1) | $ 156,143 | $ 80,228 | $ (8,858) | $ 227,513 |
| Restatement and remediation-related expenses | 13,227 | 40,564 | 53,791 | |
| LCD settlements | (35,511) | -- | (35,511) | |
| Acquisition-related amortization of intangibles | 170 | 28,974 | 29,144 | |
| Total non-GAAP operating income adjustments | $ (22,114) | $ 69,538 | $ 47,424 | |
| Non-GAAP operating income | $ 134,029 | $ 149,766 | $ (8,858) | $ 274,937 |
| GAAP operating margin | 1.53% | 0.48% | 0.85% | |
| Non-GAAP operating margin | 1.32% | 0.90% | 1.03% | |
| (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, except per share amounts) | ||||
| Selling, general and administrative expenses ("SG&A") | Three months ended | Twelve months ended | ||
| January 31, 2015 | January 31, 2014 | January 31, 2015 | January 31, 2014 | |
| Net Sales | $ 7,339,491 | $ 7,973,107 | $ 27,670,632 | $ 26,821,904 |
| GAAP SG&A | 266,890 | 288,044 | 1,114,234 | 1,116,553 |
| Acquisition-related amortization of intangibles | (6,354) | (7,313) | (28,265) | (29,144) |
| Non-GAAP SG&A | $ 260,536 | $ 280,731 | $ 1,085,969 | $ 1,087,409 |
| GAAP SG&A percentage of net sales | 3.64% | 3.61% | 4.03% | 4.16% |
| Non- GAAP SG&A percentage of net sales | 3.55% | 3.52% | 3.92% | 4.05% |
| Three months ended | ||||||
| January 31, 2015 | January 31, 2014 | |||||
| Operating Income | Net Income | Diluted EPS | Operating Income | Net Income | Diluted EPS | |
| GAAP results | $ 101,684 | $ 80,677 | $ 2.11 | $ 97,743 | $ 109,761 | $ 2.87 |
| Restatement and remediation-related expenses | 2,365 | 1,845 | 0.05 | 24,826 | 18,381 | 0.48 |
| LCD settlements | -- | -- | -- | (12,597) | (7,810) | (0.20) |
| Loss on disposal of subsidiaries | 1,330 | 1,330 | 0.03 | -- | -- | -- |
| Value added tax assessment | -- | -- | -- | -- | -- | -- |
| Acquisition-related amortization of intangibles | 6,354 | 4,667 | 0.12 | 7,313 | 5,337 | 0.14 |
| Reversal of deferred tax valuation allowances and income taxes on undistributed earnings of assets held for sale (1) | -- | (13,601) | (0.35) | -- | (45,303) | (1.18) |
| Non-GAAP results | $ 111,733 | $ 74,918 | $ 1.96 | $ 117,285 | $ 80,366 | $ 2.10 |
| Twelve months ended | ||||||
| January 31, 2015 | January 31, 2014 | |||||
| Operating Income | Net Income | Diluted EPS | Operating Income | Net Income | Diluted EPS | |
| GAAP results | $ 267,635 | $ 175,172 | $ 4.57 | $ 227,513 | $ 179,932 | $ 4.71 |
| Restatement and remediation-related expenses | 22,043 | 16,517 | 0.43 | 53,791 | 39,038 | 1.02 |
| LCD settlements | (5,059) | (3,162) | (0.08) | (35,511) | (22,017) | (0.58) |
| Loss on disposal of subsidiaries | 1,330 | 1,330 | 0.03 | -- | -- | -- |
| Value added tax assessment | (6,229) | (6,229) | (0.16) | -- | -- | -- |
| Acquisition-related amortization of intangibles | 28,265 | 20,731 | 0.54 | 29,144 | 21,305 | 0.56 |
| Reversal of deferred tax valuation allowances and income taxes on undistributed earnings of assets held for sale (1) | -- | (13,601) | (0.36) | -- | (45,303) | (1.19) |
| Non-GAAP results | $ 307,985 | $ 190,758 | $ 4.97 | $ 274,937 | $ 172,955 | $ 4.52 |
| (1) During the fourth quarter of fiscal 2015, the company recorded income tax benefits of $19.2 million primarily related to the reversal of deferred tax valuation allowances in certain jurisdictions in Europe, partially offset by income tax expenses of $5.6 million related to undistributed earnings of assets held for sale in certain Latin American jurisdictions. | ||||||
| Twelve months ended | |
| January 31, 2015 | |
| TTM Non-GAAP Net Operating Profit After Tax (NOPAT)*: | |
| Non-GAAP Operating Income | $ 307,985 |
| Non-GAAP effective tax rate | 31.8% |
| Non-GAAP NOPAT | $ 210,172 |
| Average Invested Capital: | |
| Short-term debt (5-qtr average) | $ 40,342 |
| Long-term debt (5-qtr average) | 353,773 |
| Non-GAAP Shareholders' Equity (5-qtr average) | 2,103,329 |
| Total average capital | 2,497,444 |
| Less: Cash (5-qtr average) | (573,199) |
| Average invested capital less average cash | $ 1,924,245 |
| ROIC | 11% |
| * Trailing Twelve Months is abbreviated as TTM. | |