Exhibit 99
CDW Achieves Record First Quarter Results
VERNON HILLS, Ill.--(BUSINESS WIRE)--April 19, 2005--CDW
Corporation (NASDAQ:CDWC):
First quarter of 2005 highlights:
-- Average daily sales: $23.048 million, up 10.4% year-over-year
-- Sales: $1.475 billion, up 10.4% year-over-year
-- Net income: $61.4 million, up 11.0% year-over-year
-- Diluted earnings per share: $0.72, up 14.3% year-over-year
CDW Corporation (NASDAQ:CDWC) achieved record first quarter sales,
net income and earnings per share in the first quarter of 2005.
First quarter sales totaled $1.475 billion, an increase of 10.4
percent versus the prior year quarter. First quarter net income was
$61.4 million, an increase of 11.0 percent versus the first quarter of
2004. Diluted earnings per share were $0.72 in the first quarter of
2005, an increase of 14.3 percent compared to earnings per share of
$0.63 in the first quarter of 2004.
"First quarter of 2005 was another solid quarter for CDW. We
continued to outpace market growth, take market share profitably, and
maintain our track record of consistent performance," said John A.
Edwardson, chairman and chief executive officer. "Our results were
driven by our unique business model that offers customers diversified
product selection and solutions, speed of delivery, and the highest
level of responsive service."
Average daily sales for the first quarter of 2005 were $23.048
million compared to $20.886 million in the first quarter of 2004,
representing a 10.4 percent increase. Total sales in the first quarter
of 2005 were $1.475 billion compared to $1.337 billion in the prior
period, representing more than $100 million of growth. The first
quarter of 2005 and the first quarter of 2004 both had 64 billing
days.
-- First quarter of 2005 average daily sales for the corporate
sector were $18.376 million compared to $17.018 million,
representing an 8.0 percent increase over last year. Total
corporate sector sales in the first quarter of 2005 were
$1.176 billion compared to $1.089 billion in the first quarter
of 2004.
-- First quarter of 2005 average daily sales for the public
sector were $4.672 million compared to $3.868 million,
representing a 20.8 percent increase over last year. Total
public sector sales in the first quarter of 2005 were $299.0
million compared to $247.6 million in the first quarter of
2004.
-- In the first quarter of 2005, double-digit growth was achieved
in total unit volume. Notebook CPUs, desktop CPUs, server
CPUs, software, data storage and video unit volume growth
increased more than 20 percent.
-- Direct web sales were $436 million in the first quarter of
2005, representing a 21 percent increase compared to the same
period a year ago, and comprised 30 percent of total sales.
-- March 2005 average daily sales were $23.556 million, compared
to $21.419 million in March 2004, representing a 10.0 percent
increase. Total March 2005 sales were $541.8 million compared
to $492.6 million in the prior period. March 2005 and March
2004 both had 23 billing days. Both the corporate and public
sector segments generated growth in March 2005.
Gross profit margin was 15.35 percent in the first quarter of 2005
compared to 15.30 percent in the same period of 2004. The increase was
primarily due to a larger amount of cooperative advertising funds
classified as a reduction of cost of sales, as an increase in
cooperative advertising funds were received to support an increase in
marketing spending. This impact was partially offset by a lower level
of vendor incentives and a restructuring of customer delivery,
insurance and handling charges.
Selling and administrative expenses as a percentage of sales were
6.9 percent in the first quarter of 2005 compared to 7.2 percent in
the first quarter of 2004. The decrease in selling and administrative
expenses as a percentage of sales in the first quarter of 2005 is
primarily the result of $2.6 million of Micro Warehouse transition
expenses in the first quarter of 2004 that did not repeat in 2005.
During the first quarter of 2005, CDW repurchased 2.257 million
shares of common stock at an average price of $57.69 per share for an
aggregate purchase price of $130 million. Under the current share
repurchase program approved in July 2004 for the repurchase of 4.0
million shares, 2.5 million shares were repurchased from July 2004
through March 31, 2005, at a total cost of $142 million and an average
price of $57.77 per share.
Revised operating segment reporting
CDW continues to have two reportable operating segments:
corporate, which is primarily comprised of business customers, but
also includes consumers, and public sector, which is comprised of
federal, state and local government entities, and educational
institutions. Beginning in the first quarter of 2005, CDW management
revised the operating segments which reflect the basis for making
operating decisions and assessing performance.
Under the revised structure, centralized logistics and
headquarters functions that were formerly provided by the corporate
segment to the public sector segment were separated from the corporate
segment. The logistics functions include purchasing, distribution, and
fulfillment services to support both the corporate and public sector
segments, and costs and intercompany charges associated with the
logistics function are fully allocated to both of the operating
segments based on a percent of sales. The centralized headquarters
functions provide services in areas such as accounting, information
technology, marketing, legal, and coworker services. Certain of the
headquarters functions are allocated to the operating segments based
on a percent of sales. Those headquarters function costs that are not
allocated to the operating segments are included under the heading of
"Headquarters/Other" in the segment information.
The segment reporting information included in the attached
financial information reflects the revised segment reporting structure
for the first quarter of 2005. The first quarter of 2004 segment
information has been restated to reflect the revised segment reporting
structure. The attached addendum to the financial information provides
segment reporting information in both the revised and previously
reported structures for each quarter in 2004.
Recognition:
-- As previously announced, CDW was named No. 347 on FORTUNE
Magazine's "FORTUNE 500" list. In addition, the company scored
within the top ten percent of all FORTUNE 500 companies in
several categories measuring profitability and performance:
-- No. 8 in profit growth over the past ten years
-- No. 15 in revenues per dollar of assets
-- No. 28 in total return to shareholders for the past ten
years
-- No. 45 in revenues per employee
-- As previously announced, CDW earned the top ranking in its
industry in FORTUNE magazine's "America's Most Admired
Companies." In the Wholesalers: Electronics and Office
Equipment industry, CDW ranked first in seven of the eight
attributes measured, including Innovation, Employee Talent,
Use of Corporate Assets, Social Responsibility, Quality of
Management, Financial Soundness, and Long-Term Investment
Value.
The company plans to release April sales on Tuesday, May 10, 2005.
April 2004 had 22 billing days and April 2005 will have 21 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) (NASDAQ:CDWC), ranked No. 347 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 4,000
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 first
quarter of 2005 results will be available at www.cdw.com/investor. The
web cast will begin today, April 19, 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 847-419-6328.
CDW CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
Three Months Ended
March 31,
-----------------------
2005 2004
----------- -----------
Net sales $1,475,082 $1,336,689
Cost of sales 1,248,653 1,132,226
----------- -----------
Gross profit 226,429 204,463
Selling and administrative expenses 102,238 96,066
Net advertising expense 26,461 18,217
----------- -----------
Income from operations 97,730 90,180
Interest income 3,179 1,837
Other expense, net (370) (411)
----------- -----------
Income before income taxes 100,539 91,606
Income tax provision 39,142 36,313
----------- -----------
Net income $ 61,397 $ 55,293
=========== ===========
Earnings per share:
Basic $ 0.74 $ 0.66
=========== ===========
Diluted $ 0.72 $ 0.63
=========== ===========
Weighted-average number of
common shares outstanding:
Basic 82,621 83,819
=========== ===========
Diluted 85,309 87,275
=========== ===========
CDW CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
March 31, December 31, March 31,
2005 2004 2004
----------- ------------ -----------
Assets
Current assets:
Cash, cash equivalents and
marketable securities $ 590,247 $ 478,197 $ 489,229
Accounts receivable, net of
allowance for doubtful
accounts of $9,887, $9,890
and $10,025 respectively 571,052 580,035 472,000
Merchandise inventory 205,413 213,222 172,563
Miscellaneous receivables 27,214 24,364 25,340
Deferred income taxes 13,718 13,718 12,147
Prepaid expenses 5,660 6,901 3,061
----------- ------------ -----------
Total current assets 1,413,304 1,316,437 1,174,340
Marketable securities 86,142 125,426 172,799
Property and equipment, net 77,818 68,595 61,574
Other assets 10,715 10,477 15,876
----------- ------------ -----------
Total assets $1,587,979 $ 1,520,935 $1,424,589
=========== ============ ===========
Liabilities and Shareholders'
Equity
Current liabilities:
Accounts payable $ 262,296 $ 168,061 $ 178,951
Accrued expenses and other
current liabilities 139,384 111,457 104,811
----------- ------------ -----------
Total current
liabilities 401,680 279,518 283,762
Minority interest - - 2,156
Shareholders' equity:
Total shareholders'
equity 1,186,299 1,241,417 1,138,671
----------- ------------ -----------
Total liabilities
and shareholders'
equity $1,587,979 $ 1,520,935 $1,424,589
=========== ============ ===========
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 March 31, 2005
-------------------------------------------------
Corporate Public Headquarters/
Sector Sector Other Consolidated
------------ --------- ------------- ------------
Net sales $1,176,094 $298,988 $ - $1,475,082
============ ========= ============= ============
Income from
operations $ 90,578 $ 15,133 $ (7,981) $ 97,730
============ ========= =============
Net interest income
and other expense 2,809
------------
Income before income
taxes $ 100,539
============
Total assets $ 474,398 $202,641 $ 910,940 $1,587,979
============ ========= ============= ============
Three Months Ended March 31, 2004
-------------------------------------------------
Corporate Public Headquarters/
Sector Sector Other Consolidated
------------ --------- ------------- ------------
Net sales $1,089,122 $247,567 $ - $1,336,689
============ ========= ============= ============
Income from
operations $ 88,453 $ 10,542 $ (8,815) $ 90,180
============ ========= =============
Net interest income
and other expense 1,426
------------
Income before income
taxes $ 91,606
============
Total assets $ 415,858 $180,544 $ 828,187 $1,424,589
============ ========= ============= ============
NOTE: The first quarter of 2004 segment information has been restated
to reflect the revised segment reporting structure for the first
quarter of 2005.
CDW CORPORATION AND SUBSIDIARIES
OPERATING DATA
- ----------------------------------------------------------------------
Three Months Ended March 31,
-------------------------------
2005 2004
-------------------------------
% of sales to commercial customers (1) 98.5% 97.6%
Number of invoices processed 1,641,328 1,650,008
Average invoice size $961 $877
Direct web sales (000's) $436,477 $361,787
Sales force, end of period 1,985 1,809
Annualized inventory turnover (2) 23 24
Accounts receivable - days sales
outstanding 35 32
- ----------------------------------------------------------------------
(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.
ADDENDUM
CDW CORPORATION AND SUBSIDIARIES
SEGMENT REPORTING INFORMATION
(in thousands)
RESTATED:
Three Months Ended March 31, 2004
-------------------------------------------------
Corporate Public Headquarters/
Sector Sector Other Consolidated
------------ --------- ------------- ------------
Net sales $1,089,122 $247,567 $ - $1,336,689
============ ========= ============= ============
Income from
operations $ 88,453 $ 10,542 $ (8,815) $ 90,180
============ ========= =============
Net interest income
and other expense 1,426
------------
Income before income
taxes $ 91,606
============
Total assets $ 415,858 $180,544 $ 828,187 $1,424,589
============ ========= ============= ============
AS PREVIOUSLY REPORTED:
Three Months Ended March 31, 2004
------------------------------------------------
Public
Corporate Sector Eliminations Consolidated
------------------------------------------------
External customer
sales $1,089,122 $247,567 $ - $1,336,689
Transfers between
segments 229,625 - (229,625) -
----------- --------- ------------- ------------
Total net sales $1,318,747 $247,567 $(229,625) $1,336,689
=========== ========= ============= ============
Income from
operations $ 85,232 $ 4,948 $ - $ 90,180
=========== ========= =============
Net interest income
and other expense 1,426
------------
Income before income
taxes $ 91,606
============
Total assets $1,422,857 $180,544 $(178,812) $1,424,589
=========== ========= ============= ============
CDW CORPORATION AND SUBSIDIARIES
SEGMENT REPORTING INFORMATION
(in thousands)
RESTATED:
Three Months Ended June 30, 2004
------------------------------------------------
Corporate Public Headquarters/
Sector Sector Other Consolidated
----------- --------- ------------- ------------
Net sales $1,067,783 $315,121 $ - $1,382,904
=========== ========= ============= ============
Income from
operations $ 85,481 $ 15,617 $ (5,951) $ 95,147
=========== ========= =============
Net interest income
and other expense 1,450
------------
Income before income
taxes $ 96,597
============
Total assets $ 424,852 $185,750 $ 820,454 $1,431,056
=========== ========= ============= ============
AS PREVIOUSLY REPORTED:
Three Months Ended June 30, 2004
------------------------------------------------
Public
Corporate Sector Eliminations Consolidated
------------------------------------------------
External customer
sales $1,067,783 $315,121 $ - $1,382,904
Transfers between
segments 302,461 - (302,461) -
----------- --------- ------------- ------------
Total net sales $1,370,244 $315,121 $(302,461) $1,382,904
=========== ========= ============= ============
Income from
operations $ 86,237 $ 8,910 $ - $ 95,147
=========== ========= =============
Net interest income
and other expense 1,450
------------
Income before income
taxes $ 96,597
============
Total assets $1,393,151 $185,750 $(147,845) $1,431,056
=========== ========= ============= ============
CDW CORPORATION AND SUBSIDIARIES
SEGMENT REPORTING INFORMATION
(in thousands)
RESTATED:
Three Months Ended September 30, 2004
------------------------------------------------
Corporate Public Headquarters/
Sector Sector Other Consolidated
----------- --------- ------------- ------------
Net sales $1,096,222 $414,832 $ - $1,511,054
=========== ========= ============= ============
Income from
operations $ 87,955 $ 24,846 $ (6,737) $ 106,064
=========== ========= =============
Net interest income
and other expense 1,911
------------
Income before income
taxes $ 107,975
============
Total assets $ 433,703 $193,329 $ 892,300 $1,519,332
=========== ========= ============= ============
AS PREVIOUSLY REPORTED:
Three Months Ended September 30, 2004
------------------------------------------------
Public
Corporate Sector Eliminations Consolidated
------------------------------------------------
External customer
sales $1,096,222 $414,832 $ - $1,511,054
Transfers between
segments 403,922 - (403,922) -
----------- --------- ------------- ------------
Total net sales $1,500,144 $414,832 $(403,922) $1,511,054
=========== ========= ============= ============
Income from
operations $ 90,579 $ 15,485 $ - $ 106,064
=========== ========= =============
Net interest income
and other expense 1,911
------------
Income before income
taxes $ 107,975
============
Total assets $1,450,106 $193,329 $(124,103) $1,519,332
=========== ========= ============= ============
CDW CORPORATION AND SUBSIDIARIES
SEGMENT REPORTING INFORMATION
(in thousands)
RESTATED:
Three Months Ended December 31, 2004
------------------------------------------------
Corporate Public Headquarters/
Sector Sector Other Consolidated
----------- --------- ------------- ------------
Net sales $1,154,211 $352,916 $ - $1,507,127
=========== ========= ============= ============
Income from
operations $ 91,324 $ 16,713 $ (6,669) $ 101,368
=========== ========= =============
Net interest income
and other expense 2,314
------------
Income before income
taxes $ 103,682
============
Total assets $ 454,367 $194,700 $ 871,868 $1,520,935
=========== ========= ============= ============
AS PREVIOUSLY REPORTED:
Three Months Ended December 31, 2004
------------------------------------------------
Public
Corporate Sector Eliminations Consolidated
------------------------------------------------
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 $1,454,141 $194,700 $(127,906) $1,520,935
=========== ========= ============= ============
CONTACT: CDW Corporation
Cindy Klimstra (Investor Relations), 847-968-0268
or
Gary Ross (Media Inquiries), 847-371-5048