Insight Enterprises 8K Reports Second Quarter 2010 Results | NSIT 4 Aug 10

Exhibit 99.1



FOR IMMEDIATE RELEASE		Nasdaq: NSIT

INSIGHT ENTERPRISES, INC. REPORTS SECOND QUARTER
2010 RESULTS

TEMPE, Ariz. — August 4, 2010 — Insight Enterprises, Inc. (Nasdaq: NSIT)(the “Company”) today reported results of operations for the quarter ended June 30, 2010.

Second Quarter Highlights

For the second quarter of 2010 compared to the second quarter of 2009:

	•		Net sales increased 23% to $1.3 billion.

	•		Gross profit increased 18% to $173.8 million.

	•		Earnings from operations increased 104% to $44.7 million, or 3.5% of net sales.

	•		Net earnings from continuing operations increased 109% to $26.9 million.

	•		Diluted earnings per share from continuing operations increased 107% to $0.58.

“I’m happy to report that continued strengthening of IT demand globally coupled with operating leverage led to strong year to year growth in both sales and profitability in our business,” stated Ken Lamneck, President and Chief Executive Officer. “We are extremely pleased with these results and are proud of our team’s execution during the quarter,” added Lamneck.

SEGMENT OVERVIEW

In North America, net sales were $865.5 million for the second quarter of 2010, up 21% from the second quarter of 2009. Net sales of hardware and software increased 27% and 21%, respectively, year over year, while net sales in the services category declined 15% year to year. Gross profit was up 20% year over year at $119.6 million with gross margin declining 20 basis points to 13.8% from 14.0% in the prior year quarter. Selling and administrative expenses in North America were $86.4 million during the second quarter of 2010, compared to $86.0 million in the second quarter of 2009. Selling and administrative expenses in the second quarter of 2010 include approximately $225,000 of professional fees and costs associated with the restatement remediation and ongoing litigation. Comparatively, selling and administrative expenses in the second quarter of 2009 included $2.6 million of professional fees and costs associated with the trade credits investigation and restatement quantification. Further, selling and administrative expenses in the three months ended June 30, 2010 were reduced by $2.9 million upon the collection of a single account receivable which we had specifically reserved as doubtful during the fourth quarter of 2009. The North America segment recorded $943,000 of severance and restructuring charges during the second quarter of 2010. There were no such charges in North America in the

- MORE -

Insight Enterprises, Inc. 6820 South Harl Avenue Tempe, Arizona 85283 480-902-1001 FAX 480-760-8958


Insight Q2 2010 Results, Page 2		August 4, 2010

second quarter of last year. As a result, earnings from operations in North America were $32.3 million, or 3.7% of net sales, in the second quarter of 2010, compared to $13.8 million in the second quarter of 2009.

The Company’s EMEA operating segment reported net sales of $359.2 million for the second quarter of 2010, up 28% in U.S. dollars compared to the second quarter of 2009. Excluding the effects of foreign currency movements, net sales were up 36%. Net sales of hardware grew 13% year over year, software sales increased 34% and services sales grew by 31% compared to the second quarter of last year, all in U.S. dollars. Excluding the effects of foreign currency movements, hardware sales increased 18%, software sales increased 44% and services net sales increased 39% year over year. Gross profit was up 11% in U.S. dollars, 19% excluding the effects of foreign currency movements, while gross margin decreased to 12.9% for the second quarter of 2010 from 14.9% in the prior year quarter. Selling and administrative expenses in EMEA in the second quarter of 2010 were up 8%, or $2.7 million, compared to the second quarter of 2009 in U.S. dollars and, excluding the effects of foreign currency movements, were up 14% year over year. EMEA also recorded $375,000 in severance and restructuring expenses, net of adjustments, in the quarter ended June 30, 2010, compared to $1.9 million in severance and restructuring charges recorded during the second quarter of 2009. As a result, earnings from operations in EMEA were $9.6 million, or 2.7% of net sales, in the second quarter of 2010 compared to $6.1 million in the second quarter of 2009.

The Company’s APAC operating segment reported net sales of $52.9 million for the second quarter of 2010, up 25% from the second quarter of 2009 in U.S. dollars, 14% excluding the effects of foreign currency movements. Gross profit was $7.7 million, an increase of 22% year over year in U.S. dollars, 10% excluding the effects of foreign currency movements, while gross margin decreased to 14.6% for the second quarter of 2010 from 14.9% in the prior year quarter. Selling and administrative expenses in APAC increased 22% year over year in U.S. dollars, 8% excluding the effects of foreign currency movements. The APAC segment recorded no severance and restructuring charges during the quarter ended June 30, 2010, compared to $230,000 in severance and restructuring charges recorded during the second quarter of 2009. As a result, earnings from operations in APAC were $2.7 million, or 5.2% of net sales, in the second quarter of 2010, compared to $2.0 million in the second quarter of 2009.

UPDATED GUIDANCE

Given stronger than expected financial performance in the first half of the year, the Company now anticipates that diluted earnings per share for the full year of 2010 will be between $1.30 and $1.40. This outlook reflects the following assumptions:

•

Continued strong demand for hardware technology in North America partially offset by:

	•		a decline in sales of services in 2010 due to the completion of a significant services engagement in 2009 that has not yet been fully replaced in 2010; and

	•		an effective tax rate of approximately 36% — 39% for 2010, up from 26% in 2009.

CONFERENCE CALL AND WEBCAST

The Company will host a conference call and live web cast today at 5:00 p.m. ET to discuss second quarter 2010 results of operations. A live web cast of the conference call (in listen-only mode) will be available on the Company’s web site atwww.insight.com, and a replay of the web cast will be available on the Company’s web site for a limited time following the call. To listen to the live web cast by telephone, call 1-800-573-4840 if located in the U.S., 617-224-4326 for international callers, and enter the access code 47083274.

- MORE -

Insight Enterprises, Inc. 6820 South Harl Avenue Tempe, Arizona 85283 480-902-1001 FAX 480-760-8958


Insight Q2 2010 Results, Page 3		August 4, 2010

Financial Summary Table
(in thousands, except per share data and percentages)


	Three Months Ended June 30,							Six Months Ended June 30,
	2010		2009		% change			2010		2009		% change
Insight Enterprises, Inc.
Net sales	$	1,277,618	$	1,037,162		23	%	$	2,326,998	$	1,988,322		17	%
Gross profit	$	173,805	$	147,844		18	%	$	318,850	$	279,616		14	%
Earnings from operations	$	44,657	$	21,849		104	%	$	61,920	$	13,931		344	%
Net earnings from continuing operations	$	26,914	$	12,893		109	%	$	36,079	$	6,096		492	%
Diluted EPS from continuing operations	$	0.58	$	0.28		107	%	$	0.77	$	0.13		492	%

North America
Net sales	$	865,501	$	713,531		21	%	$	1,553,795	$	1,373,632		13	%
Gross profit	$	119,624	$	99,748		20	%	$	218,571	$	192,791		13	%
Earnings from operations	$	32,315	$	13,768		135	%	$	46,399	$	5,845		694	%

EMEA
Net sales	$	359,210	$	281,241		28	%	$	676,503	$	551,966		23	%
Gross profit	$	46,483	$	41,773		11	%	$	87,744	$	77,677		13	%
Earnings from operations	$	9,617	$	6,059		59	%	$	12,408	$	6,640		87	%

APAC
Net sales	$	52,907	$	42,390		25	%	$	96,700	$	62,724		54	%
Gross profit	$	7,698	$	6,323		22	%	$	12,535	$	9,148		37	%
Earnings from operations	$	2,725	$	2,022		35	%	$	3,113	$	1,446		115	%


	North America									EMEA									APAC
	Three Months Ended									Three Months Ended									Three Months Ended
	June 30,									June 30,									June 30,
Sales Mix	2010			2009			% change*			2010			2009			% change*			2010			2009			% change*
Hardware		61	%		58	%		27	%		27	%		31	%		13	%		1	%		2	%		(41	%)
Software		33	%		33	%		21	%		72	%		68	%		34	%		96	%		97	%		24	%
Services		6	%		9	%		(15	%)		1	%		1	%		31	%		3	%		1	%		160	%

		100	%		100	%		21	%		100	%		100	%		28	%		100	%		100	%		25	%


*		Represents growth/decline in category net sales on a dollar basis.

- MORE -

Insight Enterprises, Inc. 6820 South Harl Avenue Tempe, Arizona 85283 480-902-1001 FAX 480-760-8958


Insight Q2 2010 Results, Page 4		August 4, 2010

FORWARD-LOOKING INFORMATION

Certain statements in this release and the related conference call and Web cast are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements, including the Company’s estimated diluted earnings per share for 2010, the Company’s effective tax rate for 2010 and assumptions related to demand for hardware technology in North America and expectations of a decline in sales of services in 2010 due to the non-recurrence of a significant services engagement, are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. Future events and actual results could differ materially from those set forth in, contemplated by, or underlying the forward-looking statement. Some of the important factors that could cause the Company’s actual results to differ materially from those projected in any forward-looking statements, include, but are not limited to, the following, which are discussed in “Risk Factors” in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2009:

	•		the Company’s reliance on partners for product availability, marketing funds, purchasing incentives and competitive products to sell;

	•		changes in the information technology industry and/or rapid changes in product standards;

	•		general economic conditions, including concerns regarding the Company’s ability to collect its accounts receivable and credit constraints;

	•		disruptions in the Company’s information technology systems and voice and data networks, including its system upgrade and the migration of acquired businesses to its information technology systems and voice and data networks;

	•		actions of the Company’s competitors, including manufacturers and publishers of products it sells;

	•		stockholder litigation and regulatory proceedings related to the restatement of the Company’s consolidated financial statements;

	•		the integration and operation of acquired businesses, including the Company’s ability to achieve expected benefits of the acquisitions;

	•		the variability and seasonality of the Company’s net sales and gross profit;

	•		the risks associated with international operations;

	•		exposure to changes in, or interpretations of, tax rules and regulations;

	•		exposure to foreign currency exchange risks;

	•		changes in the overall capital markets that could increase the Company’s borrowing costs or reduce future availability of financing;

	•		failure to comply with the terms and conditions of the Company’s public sector contracts;

	•		the Company’s dependence on key personnel; and

	•		intellectual property infringement claims and challenges to the Company’s registered trademarks and trade names.

Additionally, there may be other risks that are otherwise described from time to time in the reports that the Company files with the SEC. Any forward-looking statements in this release should be considered in light of various important factors, including the risks and uncertainties listed above, as well as others. The Company assumes no obligation to update, and does not intend to update, any forward-looking statements. The Company does not endorse any projections regarding future performance made by third parties.


Contacts:	Glynis Bryan	Helen Johnson
	Chief Financial Officer	Senior VP, Treasurer
	Tel. 480-333-3390	Tel. 480-333-3234
	Emailglynis.bryan@insight.com	Emailhelen.johnson@insight.com

- MORE -

Insight Enterprises, Inc. 6820 South Harl Avenue Tempe, Arizona 85283 480-902-1001 FAX 480-760-8958


Insight Q2 2010 Results, Page 5		August 4, 2010

INSIGHT ENTERPRISES, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2010			2009			2010			2009
Net sales	$	1,277,618		$	1,037,162		$	2,326,998		$	1,988,322
Costs of goods sold		1,103,813			889,318			2,008,148			1,708,706

Gross profit		173,805			147,844			318,850			279,616
Operating expenses:
Selling and administrative expenses		127,830			123,865			255,541			257,208
Severance and restructuring expenses		1,318			2,130			1,389			8,477

Earnings from operations		44,657			21,849			61,920			13,931
Non-operating (income) expense:
Interest income		(179	)		(188	)		(306	)		(288	)
Interest expense		1,691			1,988			4,058			4,088
Net foreign currency exchange loss (gain)		404			(162	)		613			(213	)
Other expense, net		403			202			749			481

Earnings from continuing operations before income taxes		42,338			20,009			56,806			9,863
Income tax expense		15,424			7,116			20,727			3,767

Net earnings from continuing operations		26,914			12,893			36,079			6,096
Net earnings from a discontinued operation		—			2,801			—			2,801

Net earnings	$	26,914		$	15,694		$	36,079		$	8,897


Net earnings per share — Basic:
Net earnings from continuing operations	$	0.58		$	0.28		$	0.78		$	0.13
Net earnings from a discontinued operation		—			0.06			—			0.06

Net earnings per share	$	0.58		$	0.34		$	0.78		$	0.19


Net earnings per share — Diluted:
Net earnings from continuing operations	$	0.58		$	0.28		$	0.77		$	0.13
Net earnings from a discontinued operation		—			0.06			—			0.06

Net earnings per share	$	0.58		$	0.34		$	0.77		$	0.19


Shares used in per share calculations:
Basic		46,238			45,853			46,156			45,781

Diluted		46,739			46,336			46,691			46,023

- MORE -

Insight Enterprises, Inc. 6820 South Harl Avenue Tempe, Arizona 85283 480-902-1001 FAX 480-760-8958


Insight Q2 2010 Results, Page 6		August 4, 2010

INSIGHT ENTERPRISES, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands)
(Unaudited)


	June 30,		December 31,
	2010		2009
ASSETS
Current assets:
Cash and cash equivalents	$	98,140	$	68,066
Accounts receivable, net		1,003,807		998,770
Inventories		95,458		77,694
Inventories not available for sale		28,552		47,722
Deferred income taxes		30,489		35,750
Other current assets		36,509		32,318

Total current assets		1,292,955		1,260,320

Property and equipment, net		143,222		150,103
Goodwill		16,474		15,829
Intangible assets, net		73,277		82,483
Deferred income taxes		76,140		78,489
Other assets		18,980		16,097

	$	1,621,048	$	1,603,321


LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	802,409	$	695,549
Accrued expenses and other current liabilities		171,534		212,276
Current portion of long-term debt		885		875
Deferred revenue		47,038		54,135

Total current liabilities		1,021,866		962,835

Long-term debt		82,904		149,349
Deferred income taxes		2,554		3,054
Other liabilities		23,416		20,509

		1,130,740		1,135,747

Stockholders’ equity:
Preferred stock		—		—
Common stock		462		460
Additional paid-in capital		373,837		372,021
Retained earnings		109,943		73,864
Accumulated other comprehensive income — foreign currency translation adjustments		6,066		21,229

Total stockholders’ equity		490,308		467,574

	$	1,621,048	$	1,603,321

- MORE -

Insight Enterprises, Inc. 6820 South Harl Avenue Tempe, Arizona 85283 480-902-1001 FAX 480-760-8958


Insight Q2 2010 Results, Page 7		August 4, 2010

INSIGHT ENTERPRISES, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)


	Six Months Ended June 30,
	2010			2009*
Cash flows from operating activities:
Net earnings	$	36,079		$	8,897
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization		19,020			19,277
Provision for losses on accounts receivable		(423	)		1,328
Write-downs of inventories		2,764			3,882
Non-cash stock-based compensation		2,862			7,165
Non-cash gain from arbitrated claim, net of tax		—			(2,801	)
Excess tax benefit from employee gains on stock-based compensation		(908	)		—
Deferred income taxes		6,572			211
Changes in assets and liabilities:
(Increase) decrease in accounts receivable		(49,556	)		146,816
(Increase) decrease in inventories		(2,146	)		23,315
Increase in other current assets		(4,184	)		(8,292	)
Increase in other assets		(3,344	)		(1,022	)
Increase in accounts payable		153,368			4,544
Decrease in deferred revenue		(3,848	)		(3,763	)
Decrease in accrued expenses and other liabilities		(27,218	)		(806	)

Net cash provided by operating activities		129,038			198,751

Cash flows from investing activities:
Acquisition of Calence, net of cash acquired		(5,123	)		(12,834	)
Purchases of property and equipment		(8,311	)		(8,345	)

Net cash used in investing activities		(13,434	)		(21,179	)

Cash flows from financing activities:
Borrowings on senior revolving credit facility		514,000			529,873
Repayments on senior revolving credit facility		(580,000	)		(638,373	)
Borrowings on accounts receivable securitization financing facility		25,000			145,000
Repayments on accounts receivable securitization financing facility		(25,000	)		(145,000	)
Payments on capital lease obligation		(435	)		—
Net (repayments) borrowings under inventory financing facility		(8,123	)		1,210
Payment of deferred financing fees		—			(531	)
Proceeds from sales of common stock under employee stock plans		35			—
Excess tax benefit from employee gains on stock-based compensation		908			—
Payment of payroll taxes on stock-based compensation through shares withheld		(1,246	)		(398	)

Net cash used in financing activities		(74,861	)		(108,219	)

Foreign currency exchange effect on cash flows		(10,669	)		1,292

Increase in cash and cash equivalents		30,074			70,645
Cash and cash equivalents at beginning of period		68,066			49,175

Cash and cash equivalents at end of period	$	98,140		$	119,820


*		Certain amounts in the consolidated statement of cash flows for the six months ended June 30, 2009 have been reclassified to conform to the presentation for the six months ended June 30, 2010.

- ### -

Insight Enterprises, Inc. 6820 South Harl Avenue Tempe, Arizona 85283 480-902-1001 FAX 480-760-8958

Insight Enterprises (NSIT) 8-KInsight Enterprises, Inc. Reports Second Quarter 2010 Results