Exhibit 99
CDW Reports First Quarter Results
Company Achieves Record Quarterly Sales, Gross Profit and
Operating Income
VERNON HILLS, Ill.--(BUSINESS WIRE)--April 24, 2007--CDW
Corporation (NASDAQ: CDWC):
-- Sales: $1.859 billion, up 17.0% year-over-year
-- Average daily sales: $29.049 million, up 17.0% year-over-year
-- Gross profit: $301.3 million, up 18.7% year-over-year
-- Operating income: $118.0 million, up 25.2% year-over-year
-- Net income: $76.8 million, up 24.5% year-over-year
-- Diluted earnings per share: $0.96, up 28.0% year-over-year
CDW Corporation (NASDAQ: CDWC) a leading provider of technology
products and services to business, government and education, today
announced record quarterly sales, gross profit and operating income in
the first quarter of 2007. The Company previously announced March 2007
and first quarter of 2007 sales results.
"Our strong results demonstrate the progress we are making to
leverage our 2006 investments, which include the geographic
realignment of medium and large customer accounts in the corporate
sector and the acquisition of Berbee Information Networks," said John
A. Edwardson, chairman and chief executive officer. "Thanks to the
determined efforts of our CDW coworkers, we grew approximately three
times the market rate of growth and achieved solid profitability in
all operating segments. While we are pleased with our record quarter,
we remain focused on executing our growth strategies, leveraging our
expanded infrastructure and finding innovative ways to continue to
profitably take market share. Most importantly, our future success
will be driven by our increasing ability to be a single source
provider of IT products and services and continuing to provide an
unmatched experience for our customers."
Total sales in the first quarter of 2007 were $1.859 billion
compared to $1.589 billion in the first quarter of 2006, an increase
of 17.0 percent. Average daily sales in the first quarter of 2007 were
$29.049 million compared to $24.822 million in the first quarter of
2006, representing a 17.0 percent increase. There were 64 billing days
in both the first quarter of 2007 and the first quarter of 2006.
CDW completed the acquisition of Berbee Information Networks on
October 11, 2006. Total sales for the first quarter of 2006 do not
include Berbee sales, while the first quarter of 2007 sales include
Berbee sales. Excluding Berbee sales in the first quarter of 2007, and
therefore on a non-GAAP basis, total sales were $1.716 billion, an
increase of 8.0 percent compared to total sales of $1.589 billion for
the first quarter of 2006 and average daily sales for the first
quarter of 2007 were $26.819 million, an increase of 8.0 percent
compared to average daily sales for the first quarter of 2006 of
$24.822 million.
First Quarter of 2007 Highlights:
-- Total corporate sector segment sales in the first quarter of
2007 were $1.219 billion compared to $1.150 billion in the
first quarter of 2006, representing an increase of 6.0
percent. First quarter of 2007 average daily sales for the
corporate sector segment were $19.047 million compared to
$17.972 million in the first quarter of 2006, representing an
increase of 6.0 percent.
-- Total public sector segment sales in the first quarter of 2007
were $497.4 million compared to $438.4 million in the first
quarter of 2006, representing an increase of 13.4 percent.
First quarter of 2007 average daily sales for the public
sector segment were $7.772 million compared to $6.851 million
in the first quarter of 2006, representing an increase of 13.4
percent.
-- While CDW did not own Berbee prior to October 11, 2006, the
Company is providing comparative information for Berbee. Total
Berbee sales in the first quarter of 2007 were $142.7 million
compared to $84.3 million in the first quarter of 2006,
representing an increase of 69.3 percent. First quarter of
2007 average daily sales for Berbee were $2.229 million
compared to $1.317 million in the first quarter of 2006,
representing an increase of 69.3 percent. Compared to the
corporate sector and public sector segments, Berbee's business
model is more project oriented, which can result in a greater
degree of variability in sales on a monthly basis.
-- Product categories that achieved the strongest year-over-year
unit volume growth for the first quarter of 2007 were notebook
computers, data storage, software, video and input devices.
Product categories exclude Berbee sales.
-- Direct web sales in the first quarter of 2007 were $550.8
million, representing a 10.0 percent increase compared to the
prior year, and comprised 32.1 percent of total sales
excluding Berbee. Berbee's sales are not made on the web due
to the higher services component of the sales.
Gross profit for the first quarter of 2007 was $301.3 million
compared to $253.9 million in the first quarter of 2006, representing
an 18.7 percent increase. Gross profit margin was 16.2 percent of
sales in the first quarter of 2007 compared to 16.0 percent of sales
in the first quarter of 2006. The increase was primarily due to an
increased level of vendor incentives, increased commission revenue and
the inclusion of Berbee, partially offset by a lower amount of
cooperative advertising funds classified as a reduction of cost of
sales and a slightly lower product margin.
Selling and administrative expenses as a percentage of sales were
8.3 percent in the first quarter of 2007 compared to 8.1 percent in
the first quarter of 2006 and increased $25.4 million. The increase in
selling and administrative expenses in the first quarter of 2007 was
primarily due to the inclusion of Berbee's operating expenses and
increased payroll costs as a result of continued investment in
expanding CDW's sales force.
Advertising expense was $29.2 million, representing 1.6 percent of
sales in the first quarter of 2007 compared to $30.9 million,
representing 2.0 percent of sales in the first quarter of 2006.
Advertising expense was slightly lower in the first quarter of 2007
versus the prior year primarily due to a lower amount of cooperative
advertising funds reclassified as a reduction of cost of sales.
Operating margin was 6.3 percent in the first quarter of 2007
compared to 5.9 percent in the first quarter of 2006.
Net income was $76.8 million in the first quarter of 2007 compared
to $61.7 million in the first quarter of 2006, an increase of 24.5
percent. Diluted earnings per share were $0.96 in the first quarter of
2007 compared to diluted earnings per share of $0.75 in the first
quarter of 2006.
During the first quarter of 2007, CDW repurchased 254,000 shares
of common stock at an average price of $63.53 per share for an
aggregate purchase price of $16 million. Under the current share
repurchase program approved in April 2006 for the repurchase of 5.0
million shares, 2.9 million shares remain available for purchase.
The company plans to release April sales on Wednesday, May 9,
2007. April 2006 had 20 billing days and April 2007 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), ranked No. 342 on the FORTUNE 500, is a leading provider
of technology solutions for business, government and education. CDW is
a principal source of technology products and services including top
name brands such as Acer, Adobe, APC, Apple, Cisco, Fujitsu, HP, IBM,
Lenovo, Microsoft, Panasonic, Quantum, Samsung, Sony, Symantec and
ViewSonic. CDW's direct model offers customers one-on-one
relationships with knowledgeable account managers and access to
approximately 820 on-staff engineers and advanced technology
specialists who customize solutions for customers' complex technology
needs. CDW also provides same-day product shipping and post-sales
technical support.
CDW was founded in 1984 and employs approximately 5,640 coworkers.
In 2006, the company generated sales of $6.8 billion. For more
information, visit CDW.com.
A live web cast of CDW's management discussion of the first
quarter of 2007 results will be available at www.cdw.com/investor. The
web cast will begin today, April 24, 2007, 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 is a registered trademark and CDW@work is a trademark of CDW
Corporation. Other company and product names may be trademarks of
their respective owners.
CDW CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
Three Months Ended March 31,
------------------------------
2007 2006
-------------- --------------
Net sales $ 1,859,118 $ 1,588,629
Cost of sales 1,557,799 1,334,740
-------------- --------------
Gross profit 301,319 253,889
Selling and administrative expenses 154,185 128,748
Advertising expense 29,179 30,895
-------------- --------------
Income from operations 117,955 94,246
Interest income 4,364 5,207
Other expense, net (405) (962)
-------------- --------------
Income before income taxes 121,914 98,491
Income tax provision 45,134 36,813
-------------- --------------
Net income $ 76,780 $ 61,678
============== ==============
Earnings per share:
Basic $ 0.98 $ 0.77
============== ==============
Diluted $ 0.96 $ 0.75
============== ==============
Weighted-average number of common
shares outstanding:
Basic 78,606 80,004
============== ==============
Diluted 80,224 81,973
============== ==============
CDW CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
March 31, December 31, March 31,
2007 2006 2006
------------ ------------ ------------
Assets
Current assets:
Cash, cash equivalents and
marketable securities $ 480,170 $ 351,596 $ 541,019
Accounts receivable, net of
allowance for doubtful
accounts of $10,047,
$9,995, and $9,564,
respectively 835,302 850,002 659,914
Merchandise inventory 282,960 261,858 257,554
Miscellaneous receivables 46,198 55,881 53,550
Deferred income taxes 15,061 15,060 11,766
Prepaid expenses and other
current assets 21,289 15,139 15,669
------------ ------------ ------------
Total current assets 1,680,980 1,549,536 1,539,472
Marketable securities 30,000 40,000 65,463
Property and equipment, net 177,197 171,448 112,329
Goodwill and other intangible
assets, net 181,092 183,094 4,483
Other assets 7,943 7,349 7,247
------------ ------------ ------------
Total assets $ 2,077,212 $ 1,951,427 $ 1,728,994
============ ============ ============
Liabilities and Shareholders'
Equity
Current liabilities:
Accounts payable $ 392,212 $ 354,307 $ 301,996
Accrued expenses and other
current liabilities 192,229 175,074 145,372
------------ ------------ ------------
Total current
liabilities 584,441 529,381 447,368
Long-term liabilities 34,969 34,881 24,999
Shareholders' equity:
Total shareholders'
equity 1,457,802 1,387,165 1,256,627
------------ ------------ ------------
Total liabilities
and shareholders'
equity $ 2,077,212 $ 1,951,427 $ 1,728,994
============ ============ ============
CDW CORPORATION AND SUBSIDIARIES
SEGMENT REPORTING INFORMATION
(in thousands)
Three Months Ended March 31, 2007
---------------------------------------------------------
Corporate Public Headquarters
Sector Sector Berbee / Other Consolidated
----------- --------- --------- ------------ ------------
Net sales $1,219,041 $497,396 $142,681 $ - $ 1,859,118
=========== ========= ========= ============ ============
Income
(loss) from
operations $ 97,236 $ 25,223 $ 5,204 $ (9,708) $ 117,955
=========== ========= ========= ============
Net interest
income and
other
expense 3,959
------------
Income
before
income
taxes $ 121,914
============
Total assets $ 531,414 $270,997 $302,999 $ 971,802 $ 2,077,212
=========== ========= ========= ============ ============
Three Months Ended March 31, 2006
---------------------------------------------------------
Corporate Public Headquarters
Sector Sector Berbee / Other Consolidated
----------- --------- --------- ------------ ------------
Net sales $1,150,184 $438,445 $ - $ - $ 1,588,629
=========== ========= ========= ============ ============
Income
(loss) from
operations $ 89,298 $ 14,703 $ - $ (9,755) $ 94,246
=========== ========= ========= ============
Net interest
income and
other
expense 4,245
------------
Income
before
income
taxes $ 98,491
============
Total assets $ 559,669 $242,193 $ - $ 927,132 $ 1,728,994
=========== ========= ========= ============ ============
CDW CORPORATION AND SUBSIDIARIES
OPERATING DATA
Three Months Ended
March 31,
--------------------------
2007 2006
--------------------------
Direct web sales (000's) $550,844 $500,967
Sales force, end of period 2,662 2,128
Annualized inventory turnover 25 24
Accounts receivable - days sales outstanding 40 37
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CONTACT: CDW
Investor Inquiries
Cindy Klimstra
Vice President, Investor Relations
(847) 968-0268
or
Media Inquiries
Gary Ross
Sr. Manager, Corporate Communications
(847) 371-5048