Exhibit 99
CDW Achieves Record Fourth Quarter and Full Year Results
VERNON HILLS, Ill.--(BUSINESS WIRE)--Jan. 25, 2005--CDW
Corporation (NASDAQ:CDWC):
Fourth quarter 2004 highlights:
-- Average daily sales: $23.5 million, up 10.0% year-over-year
-- Sales: $1.5 billion, up 11.7% year-over-year
-- Net income: $62.7 million, up 41% year-over-year
-- Earnings per share: $0.73, up 43% year-over-year
Full year 2004 highlights:
-- Average daily sales: $22.4 million, up 22% year-over-year
-- Sales: $5.7 billion, up 23% year-over-year
-- Net income: $241 million, up 38% year-over-year
-- Earnings per share: $2.79, up 37% year-over year
CDW Corporation (NASDAQ:CDWC) achieved its highest fourth quarter
sales and earnings per share and full year sales and earnings per
share in the company's history in 2004.
Fourth quarter sales totaled $1.5 billion, an increase of 11.7
percent versus the prior year quarter. Fourth quarter net income was
$62.7 million, an increase of 41 percent versus the fourth quarter of
2003. Diluted earnings per share were $0.73 in the fourth quarter of
2004, an increase of 43 percent compared to earnings per share of
$0.51 in the fourth quarter of 2003. The fourth quarter of 2003
included $8.6 million after tax ($14.3 million pre-tax), or $0.10 per
diluted share, of transaction and integration expenses relating to the
September 2003 purchase of selected U.S. assets and the Canadian
operations of Micro Warehouse.
CDW also achieved record sales and earnings per share for full
year 2004. Sales totaled $5.7 billion for full year 2004, an increase
of 23 percent versus full year 2003. Included in full year 2004 were
sales made by former members of the Micro Warehouse sales force who
joined CDW in September 2003 in conjunction with the Micro Warehouse
transactions. Net income for 2004 was $241 million, an increase of 38
percent versus 2003. Diluted earnings per share were $2.79 in 2004, an
increase of 37 percent compared to earnings per share of $2.03 in
2003. Full year 2003 included $13.5 million after tax ($22.3 million
pre-tax), or $0.16 per diluted share, of transaction and integration
expenses relating to the September 2003 purchase of selected U.S.
assets and the Canadian operations of Micro Warehouse.
"Our record-breaking results validate the continued strength of
our customer-relationship focused business model, and the commitment
of our coworkers to both innovate and improve productivity on a daily
basis," said John A. Edwardson, chairman and chief executive officer.
"CDW is well positioned to continue to gain market share in a
fragmented industry and profitably outpace market growth."
Fourth Quarter Financial Highlights:
Average daily sales for the fourth quarter of 2004 were $23.549
million compared to $21.411 million in the fourth quarter of 2003,
representing a 10.0 percent increase. Total sales in the fourth
quarter of 2004 were $1.507 billion compared to $1.349 billion in the
prior period. The fourth quarter of 2004 had 64 billing days and the
fourth quarter of 2003 had 63 billing days.
-- Fourth quarter of 2004 average daily sales for the corporate
sector were $18.035 million compared to $16.592 million,
representing an 8.7 percent increase over last year. Total
corporate sector sales in the fourth quarter of 2004 were
$1.154 billion compared to $1.045 billion in the fourth
quarter of 2003.
-- Fourth quarter of 2004 average daily sales for the public
sector were $5.514 million compared to $4.819 million,
representing a 14.4 percent increase over last year. Total
public sector sales in the fourth quarter of 2004 were $353
million compared to $304 million in the fourth quarter of
2003.
-- In the fourth quarter of 2004, double-digit growth was
achieved in total unit volume. Notebook CPUs, desktop CPUs,
server CPUs, software, and data storage unit volume growth
increased more than 20 percent.
-- Direct web sales were $389 million in the fourth quarter of
2004, representing a 29 percent increase compared to the same
period a year ago, and comprised 26 percent of total sales.
Gross profit margin was 14.8 percent this quarter compared to 14.4
percent in the same period of 2003, primarily due to an increase in
vendor volume rebates and an increase in cooperative advertising funds
classified as a reduction of cost of sales, partially offset by a
higher level of sales to federal government customers in the public
sector segment.
Selling and administrative expenses as a percentage of sales were
6.5 percent in the fourth quarter of 2004 compared to 7.7 percent in
the fourth quarter of 2003. Selling and administrative expenses in the
fourth quarter of 2003 included $13.3 million of transaction and
integration expenses related to the Micro Warehouse transactions.
Excluding these expenses, and therefore on a non-GAAP basis, selling
and administrative expenses were 6.7 percent of sales in the fourth
quarter of 2003. The decrease in selling and administrative expenses
as a percentage of sales in the fourth quarter of 2004 is primarily
the result of the company's ongoing efforts to improve productivity
and continue to control the growth in selling and administrative
expenses. The non-GAAP selling and administrative expenses information
is included to provide meaningful comparisons to prior periods.
December 2004 average daily sales were $24.840 million, compared
to $22.689 million in December 2003, representing a 9.5 percent
increase. Total December 2004 sales were $546 million compared to $476
million in the prior period. December 2004 had 22 billing days and
December 2003 had 21 billing days. The corporate and public sector
segments both generated solid growth in December 2004.
Full Year Financial Highlights:
Average daily sales for 2004 were $22.413 million compared to
$18.365 million in 2003, representing a 22.0 percent increase. Total
sales in 2004 were $5.738 billion compared to $4.665 billion in 2003.
The year 2004 had 256 billing days and 2003 had 254 billing days.
-- Full year 2004 average daily sales for the corporate sector
were $17.216 million compared to $14.077 million, representing
a 22.3 percent increase over last year. Total corporate sector
sales in 2004 were $4.407 billion compared to $3.575 million
in 2003.
-- Full year 2004 average daily sales for the public sector were
$5.197 million compared to $4.288 million, representing a 21.2
percent increase over last year. Total public sector sales in
2004 were $1.330 billion compared to $1.089 billion in 2003.
-- Direct web sales were $1.526 billion in the full year 2004,
representing a 44 percent increase compared to the same period
a year ago, and comprised 27 percent of total sales.
Gross profit margin was 15.2 percent in 2004 compared to 14.4
percent in 2003, primarily due to an increase in vendor volume
rebates, an increase in cooperative advertising funds classified as a
reduction of cost of sales, and an increase in net service contract
revenue.
Selling and administrative expenses as a percentage of sales were
6.7 percent in 2004 compared to 7.0 percent in 2003. Selling and
administrative expenses in 2003 included $20.2 million of transaction
and integration expenses related to the Micro Warehouse transactions.
Excluding these expenses, and therefore on a non-GAAP basis, selling
and administrative expenses were 6.5 percent of sales in 2003. The
increase in selling and administrative expenses in 2004 is primarily
the result of continued investment in expanding CDW's sales force and
increases in certain administrative functions to support a larger
business. The non-GAAP selling and administrative expenses information
is included to provide meaningful comparisons to prior periods.
Recognition:
As previously announced, CDW was named by FORTUNE magazine to its
"100 Best Companies to Work For" annual list for the seventh
consecutive year. Ranked 14th this year, CDW has been one of the top
15 companies on this list for six consecutive years. CDW has remained
the list's highest-ranked FORTUNE 500 company for three consecutive
years. In the newly-created midsize category of companies with 2,501
to 10,000 employees, CDW ranked fifth.
Edwardson said, "Based on the ongoing efforts of our coworkers, we
will continue to build upon our core competencies, develop new
initiatives to stay ahead of the market, and increase productivity
across the entire company."
The company plans to release January sales on Thursday, February
10, 2005.
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) (NASDAQ:CDWC), ranked No. 376 on the FORTUNE 500, is a
leading provider of technology products and services for business,
government and education. CDW is a principal source of technology from
top name brands such as Adobe, APC, Apple, Cisco, HP, IBM, Microsoft,
Sony, Symantec, Toshiba and ViewSonic.
CDW was founded in 1984 and today employs approximately 3,800
coworkers. In 2004, the company generated sales of $5.7 billion. CDW's
direct model offers one-on-one relationships with knowledgeable
account managers; purchasing by telephone, fax, the company's
award-winning CDW.com web site, customized CDW@work(TM) extranets,
CDWG.com web site and macwarehouse.com web site; custom configured
solutions and same day shipping; and pre- and post-sales technical
support, with approximately 120 factory-trained and A+ certified
technicians on staff.
A live web cast of CDW's management discussion of the fourth
quarter and 2004 results will be available at www.cdw.com/investor.
The web cast will begin today, January 25, 2005, at 8:30 a.m. ET /
7:30 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 847-371-2262.
CDW CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
Three Months Ended Years Ended
December 31, December 31,
----------------------- -----------------------
2004 2003 2004 2003
----------- ----------- ----------- -----------
Net sales $1,507,127 $1,348,916 $5,737,774 $4,664,616
Cost of sales 1,283,952 1,155,194 4,867,650 3,990,824
----------- ----------- ----------- -----------
Gross profit 223,175 193,722 870,124 673,792
Selling and
administrative
expenses 98,514 103,477 386,563 325,205
Net advertising
expense 23,293 17,287 90,802 64,129
----------- ----------- ----------- -----------
Income from operations 101,368 72,958 392,759 284,458
Interest income 2,722 1,554 8,968 7,225
Other expense, net (408) (869) (1,867) (2,119)
----------- ----------- ----------- -----------
Income before income
taxes 103,682 73,643 399,860 289,564
Income tax provision 40,983 29,089 158,415 114,378
----------- ----------- ----------- -----------
Net income $ 62,699 $ 44,554 $ 241,445 $ 175,186
=========== =========== =========== ===========
Earnings per share:
Basic $ 0.75 $ 0.54 $ 2.90 $ 2.10
=========== =========== =========== ===========
Diluted $ 0.73 $ 0.51 $ 2.79 $ 2.03
=========== =========== =========== ===========
Weighted-average
number of common
shares outstanding:
Basic 83,168 83,218 83,391 83,329
=========== =========== =========== ===========
Diluted 86,184 86,542 86,552 86,175
=========== =========== =========== ===========
Dividends per share $ 0.00 $ 0.00 $ 0.36 $ 0.30
=========== =========== =========== ===========
CDW CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
December 31, December 31,
2004 2003
------------ ------------
Assets
Current assets:
Cash, cash equivalents and
marketable securities $ 478,197 $ 397,635
Accounts receivable, net of
allowance for doubtful accounts
of $9,890 and $10,057 respectively 580,035 444,000
Merchandise inventory 213,222 183,890
Miscellaneous receivables 24,364 28,517
Deferred income taxes 13,718 12,147
Prepaid expenses 6,901 3,994
------------ ------------
Total current assets 1,316,437 1,070,183
Marketable securities 125,663 164,725
Property and equipment, net 68,595 62,323
Other assets 10,477 14,401
------------ ------------
Total assets $ 1,521,172 $ 1,311,632
============ ============
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 168,061 $ 149,074
Accrued expenses and other
current liabilities 111,457 99,389
------------ ------------
Total current liabilities 279,518 248,463
Minority interest - 1,985
Shareholders' equity:
Total shareholders' equity 1,241,654 1,061,184
------------ ------------
Total liabilities and
shareholders' equity $ 1,521,172 $ 1,311,632
============ ============
Note: Certain prior period amounts have been reclassified to conform
with the current period's presentation.
CDW CORPORATION AND SUBSIDIARIES
SEGMENT REPORTING INFORMATION
(in thousands)
Three Months Ended December 31, 2004
---------------------------------------------------
Corporate Public Eliminations Consolidated
Sector
---------------------------------------------------
External customer
sales $ 1,154,211 $ 352,916 $ - $ 1,507,127
Transfers between
segments 323,804 - (323,804) -
------------ ------------ ------------ ------------
Total net sales $ 1,478,015 $ 352,916 $ (323,804) $ 1,507,127
============ ============ ============ ============
Income from
operations $ 92,071 $ 9,297 $ - $ 101,368
============ ============ ============
Net interest
income and
other expense 2,314
------------
Income before
income taxes $ 103,682
============
Total assets $ 1,454,378 $ 194,700 $ (127,906) $ 1,521,172
============ ============ ============ ============
Three Months Ended December 31, 2003
---------------------------------------------------
Corporate Public Eliminations Consolidated
Sector
---------------------------------------------------
External customer
sales $ 1,045,317 $ 303,599 $ - $ 1,348,916
Transfers between
segments 270,741 - (270,741) -
------------ ------------ ------------ ------------
Total net sales $ 1,316,058 $ 303,599 $ (270,741) $ 1,348,916
============ ============ ============ ============
Income from
operations $ 63,730 $ 9,228 $ - $ 72,958
============ ============ ============
Net interest
income and
other expense 685
------------
Income before
income taxes $ 73,643
============
Total assets $ 1,309,970 $ 175,034 $ (173,372) $ 1,311,632
============ ============ ============ ============
CDW CORPORATION AND SUBSIDIARIES
SEGMENT REPORTING INFORMATION
(in thousands)
Year Ended December 31, 2004
---------------------------------------------------
Corporate Public Eliminations Consolidated
Sector
---------------------------------------------------
External customer
sales $ 4,407,339 $ 1,330,435 $ - $ 5,737,774
Transfers between
segments 1,259,812 - (1,259,812) -
------------ ------------ ------------ ------------
Total net sales $ 5,667,151 $ 1,330,435 $(1,259,812) $ 5,737,774
============ ============ ============ ============
Income from
operations $ 354,119 $ 38,640 $ - $ 392,759
============ ============ ============
Net interest
income and
other expense 7,101
------------
Income before
income taxes $ 399,860
============
Total assets $ 1,454,378 $ 194,700 $ (127,906) $ 1,521,172
============ ============ ============ ============
Year Ended December 31, 2003
---------------------------------------------------
Corporate Public Eliminations Consolidated
Sector
---------------------------------------------------
External customer
sales $ 3,575,483 $ 1,089,133 $ - $ 4,664,616
Transfers between
segments 1,030,704 - (1,030,704) -
------------ ------------ ------------ ------------
Total net sales $ 4,606,187 $ 1,089,133 $(1,030,704) $ 4,664,616
============ ============ ============ ============
Income from
operations $ 256,557 $ 27,901 $ - $ 284,458
============ ============ ============
Net interest
income and
other expense 5,106
------------
Income before
income taxes $ 289,564
============
Total assets $ 1,309,970 $ 175,034 $ (173,372) $ 1,311,632
============ ============ ============ ============
CDW CORPORATION AND SUBSIDIARIES
OPERATING DATA
Three Months Ended Years Ended
December 31, December 31,
------------------------------------------------
2004 2003 2004 2003
------------------------------------------------
% of sales to
commercial
customers (1) 98.4% 97.5% 98.1% 97.9%
Number of invoices
processed 1,529,386 1,550,258 6,302,462 5,431,041
Average invoice size $1,056 $941 $984 $916
Direct web sales
(000's) $388,753 $300,982 $1,525,712 $1,056,761
Sales force, end of
period 2,012 1,924 2,012 1,924
Annualized inventory
turnover (2) 24 22 24 24
Accounts receivable -
days sales outstanding 35 30 37 35
- ----------------------------------------------------------------------
(1) Commercial customers are defined as public sector and
corporate customers excluding consumers.
(2) Starting in the third quarter of 2004, annualized inventory
turnover is computed on an average daily basis. Prior periods have
been restated using the new method.
CONTACT: CDW Corporation
Cindy Klimstra (Investors), 847-968-0268
or
Gary Ross (Media), 847-371-5048