Insight Enterprises, Inc. Reports Second Quarter 2016 Results
August 03 2016 - 4:00PM
Insight Enterprises, Inc. (Nasdaq:NSIT) (the
“Company”) today reported results of operations for the quarter
ended June 30, 2016.
In the second quarter of 2016, consolidated net sales were $1.46
billion, up 2% year over year. This improvement was primarily
driven by an increase in net sales reported in the Company’s North
America operating segment, which generated more than $1 billion of
net sales during the second quarter.
Consolidated gross profit was $209.2 million in the second
quarter of 2016, up 9% year over year. This increase reflects
gross margin expansion in all three of the Company’s operating
segments.
Consolidated earnings from operations increased 35% year over
year to $58.1 million and diluted earnings per share increased to
$0.96 compared to $0.67 reported in the second quarter of
2015. Adjusted diluted earnings per share was $0.97 in the
second quarter of 2016 compared to $0.68 reported in the second
quarter of last year.*
“In the second quarter, I am pleased to report that our global
team came together exceptionally well to deliver on our financial
objectives. Each of our operating segments drove high single
digit or better gross profit growth year over year in constant
currency while continuing to control discretionary expenses, which
led to strong earnings growth for the quarter,” stated Ken Lamneck,
President and Chief Executive Officer. “As we enter the
second half of 2016, we believe we are well positioned to continue
to win in the marketplace and deliver on our commitments to our
clients, teammates and shareholders,” added Lamneck.
KEY HIGHLIGHTS
- Consolidated net sales of $1.46 billion for the second quarter
of 2016 increased 2% compared to the second quarter of 2015.
- Net sales in North America of $1.04 billion were up 6% year
over year;
- Net sales in EMEA of $361.7 million decreased 5% year to year;
and
- Net sales in APAC of $58.3 million decreased 10% year to
year.
- Excluding the effects of fluctuating foreign currency exchange
rates, consolidated net sales increased 3% year over year, and net
sales in North America were up 6% year over year, while net sales
in EMEA and APAC decreased 2% and 7%, respectively, year to
year.
- Consolidated gross profit of $209.2 million increased 9%
compared to the second quarter of 2015, with consolidated gross
margin increasing approximately 100 basis points to 14.4% of net
sales.
- Gross profit in North America of $143.4 million (13.8% gross
margin) increased 12% year over year;
- Gross profit in EMEA of $55.1 million (15.2% gross margin)
increased 4% year over year; and
- Gross profit in APAC of $10.8 million (18.5% gross margin)
increased 4% year over year.
- Excluding the effects of fluctuating foreign currency exchange
rates, consolidated gross profit increased 11% year over year, and
gross profit in North America, EMEA and APAC increased 12%, 8% and
7%, respectively, year over year.
- Consolidated earnings from operations increased 35% compared to
the second quarter of 2015 to $58.1 million, or 4.0% of net
sales.
- Earnings from operations in North America increased 42% year
over year to $41.5 million, or 4.0% of net sales;
- Earnings from operations in EMEA increased 22% year over year
to $11.7 million, or 3.2% of net sales; and
- Earnings from operations in APAC increased 19% year over year
to $4.9 million, or 8.5% of net sales.
- Excluding the effects of fluctuating foreign currency exchange
rates, consolidated earnings from operations increased 37% year
over year, and earnings from operations in North America, EMEA and
APAC increased 42%, 29% and 21%, respectively, year over
year.
- Adjusted consolidated earnings from operations increased 35%
year over year to $58.7 million, or 4.0% of net sales for the
second quarter of 2016.*
- Consolidated net earnings and diluted earnings per share for
the second quarter of 2016 were $35.1 million and $0.96,
respectively, at an effective tax rate of 37.5%.
- Adjusted consolidated net earnings and Adjusted diluted
earnings per share were $35.5 million and $0.97, respectively, for
the second quarter of 2016.*
- The Company repurchased approximately 1.3 million shares of its
common stock at a total cost of approximately $35.0 million during
the second quarter of 2016.
- On June 23, 2016, the Company entered into amendments to its
senior revolving credit facility and its accounts receivable
securitization financing facility that increased the combined
maximum borrowing capacity available to the Company by $50 million
and extended the maturity dates of the agreements to 2021 and 2019,
respectively. In addition, the Company entered into an
amendment to its inventory financing facility that increased the
maximum capacity available to the Company under the facility by $75
million and extended the maturity date to 2021.
* In this press release, the Company refers to financial
measures that are not prepared in accordance with United States
generally accepted accounting principles (“GAAP”) in discussing
financial results for the three and six months ended June 30, 2016
and 2015. When referring to non-GAAP measures, the Company
refers to such measures as “Adjusted.” Adjusted measures
exclude the gain recorded in the second quarter of 2016 on an asset
held for sale and severance and restructuring expenses recorded in
all periods. A tabular reconciliation of financial measures
prepared in accordance with GAAP to non-GAAP financial measures is
included at the end of this press release.
The Company refers to changes in net sales, gross profit and
earnings from operations on a consolidated basis and in North
America, EMEA and APAC excluding the effects of fluctuating foreign
currency exchange rates. In computing these changes and
percentages, the Company compares the current year amount as
translated into U.S. dollars under the applicable accounting
standards to the prior year amount in local currency translated
into U.S. dollars utilizing the weighted average translation rate
for the current period.
The tax effect of Adjusted amounts referenced herein were
computed using the statutory tax rate for the taxing jurisdictions
in the operating segment in which the related expenses were
recorded, adjusted for the effects of valuation allowances on net
operating losses in certain jurisdictions.
GUIDANCE
Given the Company’s first half 2016 financial performance, the
Company is maintaining its outlook that net sales in 2016 are
expected to grow in the low single digit range year over year, and
the Company is increasing its GAAP diluted earnings per share
outlook for the full year 2016 to a range of $2.33 to $2.43.
Excluding the gain recorded in the second quarter of 2016 on an
asset held for sale and severance and restructuring expenses
recorded during the six months ended June 30, 2016, Adjusted
diluted earnings per share for the full year 2016 is expected to be
between $2.37 and $2.47.*
This outlook reflects:
- an effective tax rate of approximately 37% - 38%; and
- capital expenditures of $10 to $15 million for the full
year.
The per share effects of the items excluded from Adjusted
diluted earnings per share are included in the tabular
reconciliation of financial measures prepared in accordance with
GAAP to non-GAAP financial measures at the end of this press
release.
CONFERENCE CALL AND WEBCAST
The Company will host a conference call and live webcast today
at 5:00 p.m. ET to discuss second quarter 2016 results of
operations. A live web cast of the conference call (in
listen-only mode) will be available on the Company’s web site at
http://nsit.client.shareholder.com/events.cfm, 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 1-877-402-8904 if located in the U.S., 678-809-1029
for international callers, and enter the access code 54135793.
USE OF NON-GAAP FINANCIAL
MEASURES
The non-GAAP financial measures (referred to as Adjusted
consolidated earnings from operations, Adjusted consolidated net
earnings and Adjusted diluted earnings per share) exclude severance
and restructuring expenses and a gain on the sale of real estate
for which a non-cash impairment charge was previously reported as
well as the tax effect of these items. The Company excludes
these items when internally evaluating earnings from operations,
tax expense, net earnings and diluted earnings per share for the
Company and earnings from operations for each of the Company’s
operating segments. These non-GAAP measures are used to
evaluate financial performance against budgeted amounts, to
calculate incentive compensation, to assist in forecasting future
performance and to compare the Company’s results to those of the
Company’s competitors. The Company believes that these
non-GAAP financial measures are useful to investors because they
allow for greater transparency, facilitate comparisons to prior
periods and the Company’s competitors’ results and assist in
forecasting performance for future periods. These non-GAAP
financial measures are not prepared in accordance with GAAP and may
be different from non-GAAP financial measures presented by other
companies. Non-GAAP financial measures should not be
considered as a substitute for, or superior to, measures of
financial performance prepared in accordance with GAAP.
FINANCIAL
SUMMARY TABLE |
(DOLLARS IN
THOUSANDS, EXCEPT PER SHARE DATA) |
(UNAUDITED) |
|
|
|
|
Three
Months Ended June 30, |
|
Six Months
Ended June 30, |
Insight Enterprises,
Inc. |
2016 |
|
2015 |
|
change |
|
2016 |
|
2015 |
|
change |
Net sales |
$ |
1,456,234 |
|
|
$ |
1,424,031 |
|
|
|
2 |
% |
|
$ |
2,625,216 |
|
|
$ |
2,643,710 |
|
|
|
(1 |
%) |
Gross profit |
$ |
209,217 |
|
|
$ |
191,415 |
|
|
|
9 |
% |
|
$ |
370,325 |
|
|
$ |
353,228 |
|
|
|
5 |
% |
Gross margin |
|
14.4 |
% |
|
|
13.4 |
% |
|
100 bps |
|
14.1 |
% |
|
|
13.4 |
% |
|
70 bps |
Selling and administrative
expenses |
$ |
150,186 |
|
|
$ |
148,004 |
|
|
|
1 |
% |
|
$ |
296,305 |
|
|
$ |
288,800 |
|
|
|
3 |
% |
Severance and
restructuring expenses |
$ |
909 |
|
|
$ |
372 |
|
|
|
144 |
% |
|
$ |
2,265 |
|
|
$ |
1,095 |
|
|
|
107 |
% |
Earnings from
operations |
$ |
58,122 |
|
|
$ |
43,039 |
|
|
|
35 |
% |
|
$ |
71,755 |
|
|
$ |
63,333 |
|
|
|
13 |
% |
Net earnings |
$ |
35,067 |
|
|
$ |
25,499 |
|
|
|
38 |
% |
|
$ |
41,955 |
|
|
$ |
36,450 |
|
|
|
15 |
% |
Diluted earnings per
share |
$ |
0.96 |
|
|
$ |
0.67 |
|
|
|
43 |
% |
|
$ |
1.13 |
|
|
$ |
0.93 |
|
|
|
22 |
% |
|
|
|
|
|
|
|
North America |
|
|
|
|
|
|
Net sales |
$ |
1,036,254 |
|
|
$ |
978,650 |
|
|
|
6 |
% |
|
$ |
1,863,142 |
|
|
$ |
1,801,359 |
|
|
|
3 |
% |
Gross profit |
$ |
143,368 |
|
|
$ |
128,216 |
|
|
|
12 |
% |
|
$ |
255,111 |
|
|
$ |
239,732 |
|
|
|
6 |
% |
Gross margin |
|
13.8 |
% |
|
|
13.1 |
% |
|
70 bps |
|
13.7 |
% |
|
|
13.3 |
% |
|
40 bps |
Selling and administrative
expenses |
$ |
101,261 |
|
|
$ |
99,033 |
|
|
|
2 |
% |
|
$ |
201,302 |
|
|
$ |
191,435 |
|
|
|
5 |
% |
Severance and
restructuring expenses |
$ |
591 |
|
|
$ |
(150 |
) |
|
|
** |
|
|
$ |
1,808 |
|
|
$ |
255 |
|
|
|
609 |
% |
Earnings from
operations |
$ |
41,516 |
|
|
$ |
29,333 |
|
|
|
42 |
% |
|
$ |
52,001 |
|
|
$ |
48,042 |
|
|
|
8 |
% |
|
|
|
|
|
|
|
EMEA |
|
|
|
|
|
|
Net sales |
$ |
361,708 |
|
|
$ |
380,626 |
|
|
|
(5 |
%) |
|
$ |
665,068 |
|
|
$ |
735,468 |
|
|
|
(10 |
%) |
Gross profit |
$ |
55,076 |
|
|
$ |
52,815 |
|
|
|
4 |
% |
|
$ |
98,502 |
|
|
$ |
97,626 |
|
|
|
1 |
% |
Gross margin |
|
15.2 |
% |
|
|
13.9 |
% |
|
130 bps |
|
14.8 |
% |
|
|
13.3 |
% |
|
150 bps |
Selling and administrative
expenses |
$ |
43,091 |
|
|
$ |
42,754 |
|
|
|
1 |
% |
|
$ |
83,770 |
|
|
$ |
85,511 |
|
|
|
(2 |
%) |
Severance and
restructuring expenses |
$ |
318 |
|
|
$ |
522 |
|
|
|
(39 |
%) |
|
$ |
342 |
|
|
$ |
840 |
|
|
|
(59 |
%) |
Earnings from
operations |
$ |
11,667 |
|
|
$ |
9,539 |
|
|
|
22 |
% |
|
$ |
14,390 |
|
|
$ |
11,275 |
|
|
|
28 |
% |
|
|
|
|
|
|
|
APAC |
|
|
|
|
|
|
Net sales |
$ |
58,272 |
|
|
$ |
64,755 |
|
|
|
(10 |
%) |
|
$ |
97,006 |
|
|
$ |
106,883 |
|
|
|
(9 |
%) |
Gross profit |
$ |
10,773 |
|
|
$ |
10,384 |
|
|
|
4 |
% |
|
$ |
16,712 |
|
|
$ |
15,870 |
|
|
|
5 |
% |
Gross margin |
|
18.5 |
% |
|
|
16.0 |
% |
|
250 bps |
|
17.2 |
% |
|
|
14.8 |
% |
|
240 bps |
Selling and administrative
expenses |
$ |
5,834 |
|
|
$ |
6,217 |
|
|
|
(6 |
%) |
|
$ |
11,233 |
|
|
$ |
11,854 |
|
|
|
(5 |
%) |
Severance and
restructuring expenses |
$ |
- |
|
|
$ |
- |
|
|
|
** |
|
|
$ |
115 |
|
|
$ |
- |
|
|
** |
Earnings from
operations |
$ |
4,939 |
|
|
$ |
4,167 |
|
|
|
19 |
% |
|
$ |
5,364 |
|
|
$ |
4,016 |
|
|
|
34 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America Three Months Ended June
30, |
|
EMEA Three Months Ended June
30, |
|
APAC
Three Months Ended June 30, |
Sales Mix |
|
2016 |
|
2015 |
|
%
change* |
|
2016 |
|
2015
|
|
%
change* |
|
2016 |
|
2015 |
|
% change* |
Hardware |
|
61 |
% |
|
60 |
% |
|
|
8 |
% |
|
31 |
% |
|
32 |
% |
|
|
(8 |
%) |
|
9 |
% |
|
5 |
% |
|
|
49 |
% |
Software |
|
32 |
% |
|
33 |
% |
|
|
2 |
% |
|
66 |
% |
|
66 |
% |
|
|
(5 |
%) |
|
87 |
% |
|
92 |
% |
|
|
(15 |
%) |
Services |
|
7 |
% |
|
7 |
% |
|
|
11 |
% |
|
3 |
% |
|
2 |
% |
|
|
34 |
% |
|
4 |
% |
|
3 |
% |
|
|
21 |
% |
|
|
100 |
% |
|
100 |
% |
|
|
6 |
% |
|
100 |
% |
|
100 |
% |
|
|
(5 |
%) |
|
100 |
% |
|
100 |
% |
|
|
(10 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Represents growth/decline in
category net sales on a U.S. dollar basis and does not exclude the
effects of foreign currency movements. |
** Percentage change not considered
meaningful. |
|
FORWARD-LOOKING INFORMATION
Certain statements in this release and the related conference
call and webcast are “forward-looking statements” within the
meaning of the Private Securities Litigation Reform Act of
1995. Forward-looking statements, including the Company’s
expected 2016 financial results, including top-line growth rates
and diluted earnings per share, and the assumptions relating
thereto, including the Company’s effective tax rate and capital
expenditures, and the Company’s position in the IT industry,
ability to deliver on its commitments and trends and opportunities
relating thereto, 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 statements. There can be no assurances
that the results discussed by the forward-looking statements will
be achieved, and actual results may differ materially from those
set forth in the forward-looking statements. 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,
2015:
- actions of the Company’s competitors, including manufacturers
and publishers of products the Company sells;
- the Company’s reliance on partners for product availability,
competitive products to sell and related marketing funds and
purchasing incentives;
- changes in the IT industry and/or rapid changes in
technology;
- possible significant fluctuations in the Company’s future
operating results;
- general economic conditions;
- the risks associated with the Company’s international
operations;
- the security of the Company’s electronic and other confidential
information;
- disruptions in the Company’s IT systems and voice and data
networks;
- failure to comply with the terms and conditions of the
Company’s commercial and public sector contracts;
- the Company’s reliance on commercial delivery services;
- the Company’s dependence on certain personnel;
- exposure to changes in, interpretations of, or enforcement
trends related to tax rules and regulations; 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 Securities and Exchange Commission. 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, except as may be required by
law, does not intend to update, any forward-looking
statements. The Company does not endorse any projections
regarding future performance that may be made by third parties.
INSIGHT
ENTERPRISES, INC. AND SUBSIDIARIES |
CONSOLIDATED
STATEMENTS OF OPERATIONS |
(IN THOUSANDS,
EXCEPT PER SHARE DATA) |
(UNAUDITED) |
|
|
|
|
|
|
Three
Months Ended June
30, |
|
|
Six Months
Ended June
30, |
|
|
|
2016 |
|
2015 |
|
|
2016 |
|
2015 |
|
Net sales |
|
$ |
1,456,234 |
|
$ |
1,424,031 |
|
|
$ |
2,625,216 |
|
$ |
2,643,710 |
|
Costs of goods sold |
|
|
1,247,017 |
|
|
1,232,616 |
|
|
|
2,254,891 |
|
|
2,290,482 |
|
Gross profit |
|
|
209,217 |
|
|
191,415 |
|
|
|
370,325 |
|
|
353,228 |
|
Operating expenses: |
|
|
|
|
|
Selling and administrative
expenses |
|
|
150,186 |
|
|
148,004 |
|
|
|
296,305 |
|
|
288,800 |
|
Severance and restructuring
expenses |
|
|
909 |
|
|
372 |
|
|
|
2,265 |
|
|
1,095 |
|
Earnings from operations |
|
|
58,122 |
|
|
43,039 |
|
|
|
71,755 |
|
|
63,333 |
|
Non-operating (income)
expense: |
|
|
|
|
|
Interest income |
|
|
(216 |
) |
|
(192 |
) |
|
|
(466 |
) |
|
(346 |
) |
Interest expense |
|
|
1,992 |
|
|
1,718 |
|
|
|
3,840 |
|
|
3,456 |
|
Net foreign currency exchange
(gain) loss |
|
|
(153 |
) |
|
20 |
|
|
|
463 |
|
|
633 |
|
Other expense, net |
|
|
359 |
|
|
281 |
|
|
|
627 |
|
|
612 |
|
Earnings before income taxes |
|
|
56,140 |
|
|
41,212 |
|
|
|
67,291 |
|
|
58,978 |
|
Income tax expense |
|
|
21,073 |
|
|
15,713 |
|
|
|
25,336 |
|
|
22,528 |
|
Net earnings |
|
$ |
35,067 |
|
$ |
25,499 |
|
|
$ |
41,955 |
|
$ |
36,450 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per
share: |
|
|
|
|
|
Basic |
|
$ |
0.96 |
|
$ |
0.67 |
|
|
$ |
1.14 |
|
$ |
0.94 |
|
Diluted |
|
$ |
0.96 |
|
$ |
0.67 |
|
|
$ |
1.13 |
|
$ |
0.93 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in per share
calculations: |
|
|
|
|
|
Basic |
|
|
36,380 |
|
|
38,067 |
|
|
|
36,728 |
|
|
38,870 |
|
Diluted |
|
|
36,612 |
|
|
38,326 |
|
|
|
36,999 |
|
|
39,160 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INSIGHT
ENTERPRISES, INC. AND SUBSIDIARIES |
CONSOLIDATED
BALANCE SHEETS |
(IN
THOUSANDS) |
(UNAUDITED) |
|
|
|
|
|
|
|
|
June
30, |
|
December
31, |
|
|
|
2016 |
|
2015 |
|
ASSETS |
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
175,145 |
|
$ |
187,978 |
|
Accounts receivable, net |
|
|
1,476,184 |
|
|
1,315,094 |
|
Inventories |
|
|
145,929 |
|
|
119,820 |
|
Inventories not available for
sale |
|
|
51,613 |
|
|
51,756 |
|
Other current assets |
|
|
89,323 |
|
|
77,011 |
|
Total current assets |
|
|
1,938,194 |
|
|
1,751,659 |
|
|
|
|
|
Property and equipment,
net |
|
|
80,737 |
|
|
88,281 |
|
Goodwill |
|
|
55,688 |
|
|
56,195 |
|
Intangible assets,
net |
|
|
20,507 |
|
|
26,983 |
|
Deferred income taxes |
|
|
61,213 |
|
|
62,986 |
|
Other assets |
|
|
30,201 |
|
|
27,913 |
|
|
|
$ |
2,186,540 |
|
$ |
2,014,017 |
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
Accounts payable – trade |
|
$ |
1,030,869 |
|
$ |
905,464 |
|
Accounts payable – inventory
financing facility |
|
|
155,683 |
|
|
106,327 |
|
Accrued expenses and other current
liabilities |
|
|
148,671 |
|
|
144,633 |
|
Current portion of long-term
debt |
|
|
1,288 |
|
|
1,535 |
|
Deferred revenue |
|
|
50,179 |
|
|
50,166 |
|
Total current liabilities |
|
|
1,386,690 |
|
|
1,208,125 |
|
|
|
|
|
Long-term debt |
|
|
86,045 |
|
|
89,000 |
|
Deferred income taxes |
|
|
155 |
|
|
239 |
|
Other liabilities |
|
|
32,900 |
|
|
30,911 |
|
|
|
|
1,505,790 |
|
|
|
1,328,275 |
|
Stockholders’ equity: |
|
|
|
|
|
|
|
|
|
Preferred stock |
|
|
- |
|
|
- |
|
Common stock |
|
|
355 |
|
|
371 |
|
Additional paid-in capital |
|
|
304,455 |
|
|
316,686 |
|
Retained earnings |
|
|
417,814 |
|
|
408,721 |
|
Accumulated other comprehensive
loss – foreign currency translation adjustments |
|
|
(41,874 |
) |
|
(40,036 |
) |
Total stockholders’ equity |
|
|
680,750 |
|
|
685,742 |
|
|
|
$ |
2,186,540 |
|
$ |
2,014,017 |
|
|
|
|
|
|
|
|
|
INSIGHT
ENTERPRISES, INC. AND SUBSIDIARIES |
CONSOLIDATED
STATEMENTS OF CASH FLOWS |
(IN
THOUSANDS) |
(UNAUDITED) |
|
|
|
Six Months Ended June 30, |
|
|
2016 |
|
|
2015 |
|
Cash flows from operating
activities: |
|
|
|
|
|
|
|
Net earnings |
$ |
41,955 |
|
|
$ |
36,450 |
|
Adjustments to reconcile net
earnings to net cash (used in) provided by operating
activities: |
|
|
Depreciation and amortization |
|
20,462 |
|
|
|
19,001 |
|
Provision for losses on accounts
receivable |
|
1,255 |
|
|
|
1,962 |
|
Write-downs of inventories |
|
1,164 |
|
|
|
1,473 |
|
Non-cash stock-based
compensation |
|
5,283 |
|
|
|
4,627 |
|
Excess tax benefit from employee
gains on stock-based compensation |
|
(286 |
) |
|
|
(543 |
) |
Deferred income taxes |
|
1,662 |
|
|
|
94 |
|
Gain on sale of real estate |
|
(338 |
) |
|
|
- |
|
Changes in assets and
liabilities: |
|
|
Increase in accounts
receivable |
|
(178,019 |
) |
|
|
(167,600 |
) |
Increase in inventories |
|
(28,604 |
) |
|
|
(48,376 |
) |
Increase in other assets |
|
(12,563 |
) |
|
|
(11,542 |
) |
Increase in accounts payable |
|
131,886 |
|
|
|
263,120 |
|
Increase (decrease) in deferred
revenue |
|
1,208 |
|
|
|
(438 |
) |
Increase (decrease) in accrued
expenses and other liabilities |
|
10,027 |
|
|
|
(1,904 |
) |
Net cash (used in) provided by
operating activities |
|
(4,908 |
) |
|
|
96,324 |
|
Cash flows from investing
activities: |
|
|
|
|
|
|
|
Purchases of property and
equipment |
|
(4,974 |
) |
|
|
(6,552 |
) |
Proceeds from sale of real estate,
net |
|
1,378 |
|
|
|
- |
|
Acquisition of BlueMetal, net of
cash acquired |
|
507 |
|
|
|
- |
|
Net cash used in investing
activities |
|
(3,089 |
) |
|
|
(6,552 |
) |
Cash flows from financing
activities: |
|
|
|
|
|
|
|
Borrowings on senior revolving
credit facility |
|
261,920 |
|
|
|
243,910 |
|
Repayments on senior revolving
credit facility |
|
(261,920 |
) |
|
|
(227,410 |
) |
Borrowings on accounts receivable
securitization financing facility |
|
962,000 |
|
|
|
781,100 |
|
Repayments on accounts receivable
securitization financing facility |
|
(966,000 |
) |
|
|
(808,100 |
) |
Repayments under other financing
agreements |
|
(632 |
) |
|
|
- |
|
Payments on capital lease
obligations |
|
(100 |
) |
|
|
(110 |
) |
Net borrowings under inventory
financing facility |
|
49,356 |
|
|
|
28,171 |
|
Payment of deferred financing
fees |
|
(2,819 |
) |
|
|
- |
|
Excess tax benefit from employee
gains on stock-based compensation |
|
286 |
|
|
|
543 |
|
Payment of payroll taxes on
stock-based compensation through shares withheld |
|
(2,126 |
) |
|
|
(2,117 |
) |
Repurchases of common stock |
|
(48,467 |
) |
|
|
(85,951 |
) |
Net cash used in financing
activities |
|
(8,502 |
) |
|
|
(69,964 |
) |
Foreign currency exchange
effect on cash and cash equivalent balances |
|
3,666 |
|
|
|
(8,824 |
) |
(Decrease) increase in
cash and cash equivalents |
|
(12,833 |
) |
|
|
10,984 |
|
Cash and cash equivalents
at beginning of period |
|
187,978 |
|
|
|
164,524 |
|
Cash and cash equivalents
at end of period |
$ |
175,145 |
|
|
$ |
175,508 |
|
|
|
|
|
|
|
|
|
INSIGHT
ENTERPRISES, INC. AND SUBSIDIARIES |
RECONCILIATION
OF GAAP TO NON-GAAP FINANCIAL MEASURES |
(IN THOUSANDS,
EXCEPT PER SHARE DATA) |
(UNAUDITED) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June
30, |
|
|
Six
Months Ended June 30, |
|
|
|
2016 |
|
|
2015 |
|
|
2016 |
|
|
2015 |
|
Consolidated
Earnings from Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP |
|
$ |
58,122 |
|
|
$ |
43,039 |
|
|
$ |
71,755 |
|
|
$ |
63,333 |
|
Severance and
restructuring expenses |
|
|
909 |
|
|
|
372 |
|
|
|
2,265 |
|
|
|
1,095 |
|
Gain on sale of real
estate for which a non-cash impairment charge was previously
reported |
|
|
(338 |
) |
|
|
- |
|
|
|
(338 |
) |
|
|
- |
|
Non-GAAP |
|
$ |
58,693 |
|
|
$ |
43,411 |
|
|
$ |
73,682 |
|
|
$ |
64,428 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Net
Earnings: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP |
|
$ |
35,067 |
|
|
$ |
25,499 |
|
|
$ |
41,955 |
|
|
$ |
36,450 |
|
Severance and
restructuring expenses |
|
|
909 |
|
|
|
372 |
|
|
|
2,265 |
|
|
|
1,095 |
|
Gain on sale of real
estate for which a non-cash impairment charge was previously
reported |
|
|
(338 |
) |
|
|
- |
|
|
|
(338 |
) |
|
|
- |
|
Income taxes on non-GAAP
adjustments |
|
|
(135 |
) |
|
|
36 |
|
|
|
(637 |
) |
|
|
(131 |
) |
Non-GAAP |
|
$ |
35,503 |
|
|
$ |
25,907 |
|
|
$ |
43,245 |
|
|
$ |
37,414 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
Diluted EPS: |
|
|
|
|
|
GAAP |
|
$ |
0.96 |
|
|
$ |
0.67 |
|
|
$ |
1.13 |
|
|
$ |
0.93 |
|
Severance and
restructuring expenses |
|
|
0.02 |
|
|
|
0.01 |
|
|
|
0.06 |
|
|
|
0.03 |
|
Gain on sale of real
estate for which a non-cash impairment charge was previously
reported |
|
|
(0.01 |
) |
|
|
- |
|
|
|
(0.01 |
) |
|
|
- |
|
Income taxes on non-GAAP
adjustments |
|
|
- |
|
|
|
0.00 |
|
|
|
(0.01 |
) |
|
|
0.00 |
|
Non-GAAP |
|
$ |
0.97 |
|
|
$ |
0.68 |
|
|
$ |
1.17 |
|
|
$ |
0.96 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America
Earnings from Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP |
|
$ |
41,516 |
|
|
$ |
29,333 |
|
|
$ |
52,001 |
|
|
$ |
48,042 |
|
Severance and
restructuring expenses |
|
|
591 |
|
|
|
(150 |
) |
|
|
1,808 |
|
|
|
255 |
|
Gain on sale of real
estate for which a non-cash impairment charge was previously
reported |
|
|
(338 |
) |
|
|
- |
|
|
|
(338 |
) |
|
|
- |
|
Non-GAAP |
|
$ |
41,769 |
|
|
$ |
29,183 |
|
|
$ |
53,471 |
|
|
$ |
48,297 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EMEA Earnings from
Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP |
|
$ |
11,667 |
|
|
$ |
9,539 |
|
|
$ |
14,390 |
|
|
$ |
11,275 |
|
Severance and
restructuring expenses |
|
|
318 |
|
|
|
522 |
|
|
|
342 |
|
|
|
840 |
|
Non-GAAP |
|
$ |
11,985 |
|
|
$ |
10,061 |
|
|
$ |
14,732 |
|
|
$ |
12,115 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
APAC Earnings from
Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP |
|
$ |
4,939 |
|
|
$ |
4,167 |
|
|
$ |
5,364 |
|
|
$ |
4,016 |
|
Severance and
restructuring expenses |
|
|
- |
|
|
|
- |
|
|
|
115 |
|
|
|
- |
|
Non-GAAP |
|
$ |
4,939 |
|
|
$ |
4,167 |
|
|
$ |
5,479 |
|
|
$ |
4,016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONTACTS:
GLYNIS BRYAN
CHIEF FINANCIAL OFFICER
TEL. 480.333.3390
EMAIL glynis.bryan@insight.com
HELEN JOHNSON
SENIOR VP, FINANCE
TEL. 480.333.3234
EMAIL helen.johnson@insight.com
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