Insight Enterprises, Inc. Reports Third Quarter 2016 Results
October 27 2016 - 4:01PM
Insight Enterprises, Inc. (NASDAQ:NSIT) (the
“Company”) today reported results of operations for the quarter
ended September 30, 2016.
In the third quarter of 2016, consolidated net sales were $1.39
billion, up 4% year over year. This improvement was driven by
an increase in net sales reported in all three of the Company’s
operating segments, including the generation of more than $1
billion of net sales by the Company’s North America operating
segment during the third quarter.
Consolidated earnings from operations in the third quarter of
2016 increased 12% year over year to $36.4 million and diluted
earnings per share increased to $0.60 compared to $0.56 for the
third quarter of 2015. Adjusted diluted earnings per share
was $0.62 in the third quarter of 2016 compared to $0.59 reported
in the third quarter of last year.*
"I am pleased to report another strong quarterly performance in
our business. Each of our operating segments delivered solid
top-line growth, and we continued to manage expenses, which drove
strong earnings growth year over year,” stated Ken Lamneck,
President and Chief Executive Officer. “The market is stable,
and our business is healthy. We believe we are well
positioned heading into the fourth quarter to meet our financial
and operational objectives for the full year,” added Lamneck.
KEY HIGHLIGHTS
- Consolidated net sales of $1.39 billion for the third quarter
of 2016 increased 4% compared to the third quarter of 2015.
- Net sales in North America of $1.05 billion were up 3% year
over year;
- Net sales in EMEA of $311.7 million increased 6% year over
year; and
- Net sales in APAC of $29.7 million increased 13% year over
year.
- Excluding the effects of fluctuating foreign currency exchange
rates, consolidated net sales increased 6% year over year, with net
sales growth in North America, EMEA and APAC of 3%, 16% and 11%,
respectively, year over year.
- Consolidated gross profit of $181.8 million remained relatively
flat compared to the third quarter of 2015, with consolidated gross
margin decreasing approximately 50 basis points to 13.1% of net
sales.
- Gross profit in North America of $136.8 million (13.0% gross
margin) increased 1% year over year;
- Gross profit in EMEA of $38.3 million (12.3% gross margin)
decreased 6% year to year; and
- Gross profit in APAC of $6.7 million (22.5% gross margin)
increased 26% year over year.
- Excluding the effects of fluctuating foreign currency exchange
rates, consolidated gross profit increased 2% year over year, and
gross profit in North America, EMEA and APAC increased 1%, 3% and
22%, respectively, year over year.
- Consolidated earnings from operations increased 12% compared to
the third quarter of 2015 to $36.4 million, or 2.6% of net sales.
- Earnings from operations in North America increased 13% year
over year to $35.8 million, or 3.4% of net sales;
- Earnings from operations in EMEA decreased 74% year to year to
$270,000, or 0.1% of net sales; and
- Earnings from operations in APAC increased $360,000 year over
year to $382,000, or 1.3% of net sales.
- Excluding the effects of fluctuating foreign currency exchange
rates, consolidated earnings from operations increased 13% year
over year, and earnings from operations in North America and APAC
increased 13% and 1,585%, respectively, year over year, while
earnings from operations in EMEA declined 48% year to year.
- Adjusted consolidated earnings from operations increased 8.6%
year over year to $37.2 million, or 2.7% of net sales for the third
quarter of 2016.*
- Consolidated net earnings and diluted earnings per share for
the third quarter of 2016 were $21.6 million and $0.60,
respectively, at an effective tax rate of 35.0%.
- Adjusted consolidated net earnings and Adjusted diluted
earnings per share were $22.2 million and $0.62, respectively, for
the third quarter of 2016.*
* 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 nine months ended September 30,
2016 and 2015. When referring to non-GAAP measures, the
Company refers to such measures as “Adjusted.” Adjusted
measures exclude severance and restructuring expenses recorded in
all periods and the gain recorded in the second quarter of 2016 on
an asset held for sale, as well as the tax effect of these
items. 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 year to date 2016 financial performance, the
Company is maintaining its outlook that it expects net sales in
2016 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 $2.40 to $2.45.
Excluding the gain recorded on an asset held for sale and severance
and restructuring expenses recorded during the nine months ended
September 30, 2016, Adjusted diluted earnings per share for the
full year 2016 is expected to be between $2.45 to $2.50.*
This outlook reflects an effective tax rate in the fourth
quarter of approximately 37% - 38%. This outlook excludes
severance and restructuring expenses and the gain on building sale
recorded during the 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 5:30 p.m. ET to discuss third 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 4412980.
NSIT-F
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 September 30, |
|
Nine
Months Ended September 30, |
Insight
Enterprises, Inc. |
|
|
2016 |
|
|
|
2015 |
|
|
|
change |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
change |
|
Net sales |
|
$ |
1,392,716 |
|
|
$ |
1,342,195 |
|
|
|
4 |
% |
|
$ |
4,017,932 |
|
|
$ |
3,985,905 |
|
|
|
1 |
% |
Gross profit |
|
$ |
181,808 |
|
|
$ |
182,251 |
|
|
|
- |
|
|
$ |
552,133 |
|
|
$ |
535,479 |
|
|
|
3 |
% |
Gross margin |
|
|
13.1 |
% |
|
|
13.6 |
% |
|
|
(50 bps) |
|
|
13.7 |
% |
|
|
13.4 |
% |
|
|
30 bps |
Selling and administrative
expenses |
|
$ |
144,613 |
|
|
$ |
148,796 |
|
|
|
(3 |
%) |
|
$ |
440,918 |
|
|
$ |
437,596 |
|
|
|
1 |
% |
Severance and
restructuring expenses |
|
$ |
788 |
|
|
$ |
817 |
|
|
|
(4 |
%) |
|
$ |
3,053 |
|
|
$ |
1,912 |
|
|
|
60 |
% |
Earnings from
operations |
|
$ |
36,407 |
|
|
$ |
32,638 |
|
|
|
12 |
% |
|
$ |
108,162 |
|
|
$ |
95,971 |
|
|
|
13 |
% |
Net earnings |
|
$ |
21,635 |
|
|
$ |
20,825 |
|
|
|
4 |
% |
|
$ |
63,590 |
|
|
$ |
57,275 |
|
|
|
11 |
% |
Diluted earnings per
share |
|
$ |
0.60 |
|
|
$ |
0.56 |
|
|
|
7 |
% |
|
$ |
1.74 |
|
|
$ |
1.49 |
|
|
|
17 |
% |
|
|
|
|
|
|
|
|
North
America |
|
|
|
|
|
|
|
Net sales |
|
$ |
1,051,333 |
|
|
$ |
1,022,432 |
|
|
|
3 |
% |
|
$ |
2,914,475 |
|
|
$ |
2,823,791 |
|
|
|
3 |
% |
Gross profit |
|
$ |
136,818 |
|
|
$ |
135,998 |
|
|
|
1 |
% |
|
$ |
391,929 |
|
|
$ |
375,730 |
|
|
|
4 |
% |
Gross margin |
|
|
13.0 |
% |
|
|
13.3 |
% |
|
|
(30 bps) |
|
|
13.4 |
% |
|
|
13.3 |
% |
|
|
10 bps |
Selling and administrative
expenses |
|
$ |
100,420 |
|
|
$ |
103,793 |
|
|
|
(3 |
%) |
|
$ |
301,722 |
|
|
$ |
295,228 |
|
|
|
2 |
% |
Severance and
restructuring expenses |
|
$ |
643 |
|
|
$ |
618 |
|
|
|
4 |
% |
|
$ |
2,451 |
|
|
$ |
873 |
|
|
|
181 |
% |
Earnings from
operations |
|
$ |
35,755 |
|
|
$ |
31,587 |
|
|
|
13 |
% |
|
$ |
87,756 |
|
|
$ |
79,629 |
|
|
|
10 |
% |
|
|
|
|
|
|
|
|
EMEA |
|
|
|
|
|
|
|
Net sales |
|
$ |
311,732 |
|
|
$ |
293,635 |
|
|
|
6 |
% |
|
$ |
976,800 |
|
|
$ |
1,029,103 |
|
|
|
(5 |
%) |
Gross profit |
|
$ |
38,308 |
|
|
$ |
40,949 |
|
|
|
(6 |
%) |
|
$ |
136,810 |
|
|
$ |
138,575 |
|
|
|
(1 |
%) |
Gross margin |
|
|
12.3 |
% |
|
|
13.9 |
% |
|
|
(160 bps) |
|
|
14.0 |
% |
|
|
13.5 |
% |
|
|
50 bps |
Selling and administrative
expenses |
|
$ |
37,893 |
|
|
$ |
39,721 |
|
|
|
(5 |
%) |
|
$ |
121,663 |
|
|
$ |
125,232 |
|
|
|
(3 |
%) |
Severance and
restructuring expenses |
|
$ |
145 |
|
|
$ |
199 |
|
|
|
(27 |
%) |
|
$ |
487 |
|
|
$ |
1,039 |
|
|
|
(53 |
%) |
Earnings from
operations |
|
$ |
270 |
|
|
$ |
1,029 |
|
|
|
(74 |
%) |
|
$ |
14,660 |
|
|
$ |
12,304 |
|
|
|
19 |
% |
|
|
|
|
|
|
|
|
APAC |
|
|
|
|
|
|
|
Net sales |
|
$ |
29,651 |
|
|
$ |
26,128 |
|
|
|
13 |
% |
|
$ |
126,657 |
|
|
$ |
133,011 |
|
|
|
(5 |
%) |
Gross profit |
|
$ |
6,682 |
|
|
$ |
5,304 |
|
|
|
26 |
% |
|
$ |
23,394 |
|
|
$ |
21,174 |
|
|
|
10 |
% |
Gross margin |
|
|
22.5 |
% |
|
|
20.3 |
% |
|
|
220 bps |
|
|
18.5 |
% |
|
|
15.9 |
% |
|
|
260 bps |
Selling and administrative
expenses |
|
$ |
6,300 |
|
|
$ |
5,282 |
|
|
|
19 |
% |
|
$ |
17,533 |
|
|
$ |
17,136 |
|
|
|
2 |
% |
Severance and
restructuring expenses |
|
$ |
- |
|
|
$ |
- |
|
|
|
- |
|
|
$ |
115 |
|
|
$ |
- |
|
|
|
** |
|
Earnings from
operations |
|
$ |
382 |
|
|
$ |
22 |
|
|
|
1,636 |
% |
|
$ |
5,746 |
|
|
$ |
4,038 |
|
|
|
42 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America |
|
EMEA |
|
APAC |
|
|
Three Months
Ended |
|
Three Months
Ended |
|
Three Months
Ended |
|
|
September
30, |
|
September
30, |
|
September
30, |
Sales
Mix |
|
2016 |
|
2015 |
|
%
change* |
|
2016 |
|
2015 |
|
%
change* |
|
2016 |
|
2015 |
|
%
change* |
Hardware |
|
62 |
% |
|
63 |
% |
|
2 |
% |
|
41 |
% |
|
46 |
% |
|
(5 |
%) |
|
16 |
% |
|
13 |
% |
|
32 |
% |
Software |
|
31 |
% |
|
30 |
% |
|
3 |
% |
|
56 |
% |
|
51 |
% |
|
16 |
% |
|
75 |
% |
|
82 |
% |
|
4 |
% |
Services |
|
7 |
% |
|
7 |
% |
|
12 |
% |
|
3 |
% |
|
3 |
% |
|
6 |
% |
|
9 |
% |
|
5 |
% |
|
116 |
% |
|
|
100 |
% |
|
100 |
% |
|
3 |
% |
|
100 |
% |
|
100 |
% |
|
6 |
% |
|
100 |
% |
|
100 |
% |
|
13 |
% |
|
|
|
|
|
|
|
|
|
|
* Represents growth/decline in
category net sales on a U.S. dollar basis and does not exclude the
effects of fluctuating foreign currency exchange rates. |
** 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 full year 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 in the
fourth quarter, and the state of the IT market as well as the
Company’s ability to deliver on its financial and operational
objectives 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 results described in forward-looking statements
will be achieved, and actual results could differ materially from
those suggested by 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 September
30, |
|
|
Nine Months
Ended September 30, |
|
|
|
2016 |
|
2015 |
|
|
2016 |
|
2015 |
|
Net sales |
|
$ |
1,392,716 |
|
$ |
1,342,195 |
|
|
$ |
4,017,932 |
|
$ |
3,985,905 |
|
Costs of goods sold |
|
|
1,210,908 |
|
|
1,159,944 |
|
|
|
3,465,799 |
|
|
3,450,426 |
|
Gross profit |
|
|
181,808 |
|
|
182,251 |
|
|
|
552,133 |
|
|
535,479 |
|
Operating expenses: |
|
|
|
|
|
Selling and administrative
expenses |
|
|
144,613 |
|
|
148,796 |
|
|
|
440,918 |
|
|
437,596 |
|
Severance and restructuring
expenses |
|
|
788 |
|
|
817 |
|
|
|
3,053 |
|
|
1,912 |
|
Earnings from operations |
|
|
36,407 |
|
|
32,638 |
|
|
|
108,162 |
|
|
95,971 |
|
Non-operating (income)
expense: |
|
|
|
|
|
Interest income |
|
|
(318 |
) |
|
(265 |
) |
|
|
(784 |
) |
|
(611 |
) |
Interest expense |
|
|
2,517 |
|
|
2,062 |
|
|
|
6,357 |
|
|
5,518 |
|
Net foreign currency exchange
(gain) loss |
|
|
579 |
|
|
(1,561 |
) |
|
|
1,042 |
|
|
(928 |
) |
Other expense, net |
|
|
352 |
|
|
357 |
|
|
|
979 |
|
|
969 |
|
Earnings before income taxes |
|
|
33,277 |
|
|
32,045 |
|
|
|
100,568 |
|
|
91,023 |
|
Income tax expense |
|
|
11,642 |
|
|
11,220 |
|
|
|
36,978 |
|
|
33,748 |
|
Net earnings |
|
$ |
21,635 |
|
$ |
20,825 |
|
|
$ |
63,590 |
|
$ |
57,275 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per
share: |
|
|
|
|
|
Basic |
|
$ |
0.61 |
|
$ |
0.56 |
|
|
$ |
1.75 |
|
$ |
1.50 |
|
Diluted |
|
$ |
0.60 |
|
$ |
0.56 |
|
|
$ |
1.74 |
|
$ |
1.49 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in per share
calculations: |
|
|
|
|
|
Basic |
|
|
35,474 |
|
|
37,095 |
|
|
|
36,310 |
|
|
38,279 |
|
Diluted |
|
|
35,790 |
|
|
37,351 |
|
|
|
36,596 |
|
|
38,557 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INSIGHT
ENTERPRISES, INC. AND SUBSIDIARIES |
CONSOLIDATED
BALANCE SHEETS |
(IN
THOUSANDS) |
(UNAUDITED) |
|
|
|
|
|
|
|
|
|
|
|
September 30, 2016 |
|
|
December
31, 2015 |
|
ASSETS |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
175,695 |
|
|
$ |
187,978 |
|
Accounts receivable, net |
|
|
1,162,424 |
|
|
|
1,315,094 |
|
Inventories |
|
|
175,195 |
|
|
|
119,820 |
|
Inventories not available for
sale |
|
|
52,301 |
|
|
|
51,756 |
|
Other current assets |
|
|
101,235 |
|
|
|
77,011 |
|
Total current assets |
|
|
1,666,850 |
|
|
|
1,751,659 |
|
|
|
|
|
Property and equipment,
net |
|
|
76,614 |
|
|
|
88,281 |
|
Goodwill |
|
|
62,936 |
|
|
|
56,195 |
|
Intangible assets,
net |
|
|
22,529 |
|
|
|
26,983 |
|
Deferred income taxes |
|
|
59,034 |
|
|
|
62,986 |
|
Other assets |
|
|
28,840 |
|
|
|
27,913 |
|
|
|
$ |
1,916,803 |
|
|
$ |
2,014,017 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable – trade |
|
$ |
617,763 |
|
|
$ |
905,464 |
|
Accounts payable – inventory
financing facility |
|
|
135,783 |
|
|
|
106,327 |
|
Accrued expenses and other current
liabilities |
|
|
140,695 |
|
|
|
144,633 |
|
Current portion of long-term
debt |
|
|
533 |
|
|
|
1,535 |
|
Deferred revenue |
|
|
42,774 |
|
|
|
50,166 |
|
Total current liabilities |
|
|
937,548 |
|
|
|
1,208,125 |
|
|
|
|
|
Long-term debt |
|
|
243,372 |
|
|
|
89,000 |
|
Deferred income taxes |
|
|
1,042 |
|
|
|
239 |
|
Other liabilities |
|
|
30,821 |
|
|
|
30,911 |
|
|
|
|
1,212,783 |
|
|
|
1,328,275 |
|
Stockholders’ equity: |
|
|
|
|
|
|
|
|
Preferred stock |
|
|
- |
|
|
|
- |
|
Common stock |
|
|
355 |
|
|
|
371 |
|
Additional paid-in capital |
|
|
306,933 |
|
|
|
316,686 |
|
Retained earnings |
|
|
438,437 |
|
|
|
408,721 |
|
Accumulated other comprehensive
loss – foreign currency translation adjustments |
|
|
(41,705 |
) |
|
|
(40,036 |
) |
Total stockholders’ equity |
|
|
704,020 |
|
|
|
685,742 |
|
|
|
$ |
1,916,803 |
|
|
$ |
2,014,017 |
|
|
|
|
|
|
|
|
|
|
INSIGHT
ENTERPRISES, INC. AND SUBSIDIARIES |
CONSOLIDATED
STATEMENTS OF CASH FLOWS |
(IN
THOUSANDS) |
(UNAUDITED) |
|
|
|
|
|
Nine Months Ended September
30, |
|
|
2016 |
|
2015 |
Cash flows from operating
activities: |
|
|
|
|
|
|
|
|
Net earnings |
|
$ |
63,590 |
|
|
$ |
57,275 |
|
Adjustments to reconcile net
earnings to net cash (used in) provided by operating
activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
30,097 |
|
|
|
28,426 |
|
Non-cash real estate
impairment |
|
|
- |
|
|
|
800 |
|
Provision for losses on accounts
receivable |
|
|
1,401 |
|
|
|
4,139 |
|
Write-downs of inventories |
|
|
2,297 |
|
|
|
2,834 |
|
Write-off of property and
equipment |
|
|
- |
|
|
|
72 |
|
Non-cash stock-based
compensation |
|
|
8,308 |
|
|
|
6,685 |
|
Excess tax benefit from employee
gains on stock-based compensation |
|
|
(293 |
) |
|
|
(544 |
) |
Deferred income taxes |
|
|
3,424 |
|
|
|
2,463 |
|
Gain on sale of real estate |
|
|
(338 |
) |
|
|
- |
|
Changes in assets and
liabilities: |
|
|
|
|
|
|
|
|
Decrease in accounts
receivable |
|
|
133,289 |
|
|
|
168,781 |
|
Increase in inventories |
|
|
(59,707 |
) |
|
|
(13,508 |
) |
Increase in other assets |
|
|
(22,713 |
) |
|
|
(3,077 |
) |
Decrease in accounts payable |
|
|
(278,097 |
) |
|
|
(212,289 |
) |
Decrease in deferred revenue |
|
|
(6,645 |
) |
|
|
(4,181 |
) |
Increase (decrease) in accrued
expenses and other liabilities |
|
|
244 |
|
|
|
(13,234 |
) |
Net cash (used in) provided by
operating activities |
|
|
(125,143 |
) |
|
|
24,642 |
|
Cash flows from investing
activities: |
|
|
|
|
|
|
|
|
Purchases of property and
equipment |
|
|
(9,714 |
) |
|
|
(10,804 |
) |
Proceeds from sale of real estate,
net |
|
|
1,378 |
|
|
|
- |
|
Acquisition of Ignia, net of cash
acquired |
|
|
(10,804 |
) |
|
|
- |
|
Acquisition of BlueMetal, net of
cash acquired |
|
|
507 |
|
|
|
- |
|
Net cash used in investing
activities |
|
|
(18,633 |
) |
|
|
(10,804 |
) |
Cash flows from financing
activities: |
|
|
|
|
|
|
|
|
Borrowings on senior revolving
credit facility |
|
|
534,920 |
|
|
|
511,410 |
|
Repayments on senior revolving
credit facility |
|
|
(506,420 |
) |
|
|
(511,410 |
) |
Borrowings on accounts receivable
securitization financing facility |
|
|
1,947,000 |
|
|
|
1,388,100 |
|
Repayments on accounts receivable
securitization financing facility |
|
|
(1,822,000 |
) |
|
|
(1,364,100 |
) |
Repayments under other financing
agreements |
|
|
(1,309 |
) |
|
|
(543 |
) |
Payments on capital lease
obligations |
|
|
(270 |
) |
|
|
(167 |
) |
Net borrowings under inventory
financing facility |
|
|
29,456 |
|
|
|
53,708 |
|
Payment of deferred financing
fees |
|
|
(3,360 |
) |
|
|
- |
|
Excess tax benefit from employee
gains on stock-based compensation |
|
|
293 |
|
|
|
544 |
|
Payment of payroll taxes on
stock-based compensation through shares withheld |
|
|
(2,159 |
) |
|
|
(2,137 |
) |
Repurchases of common stock |
|
|
(50,000 |
) |
|
|
(91,843 |
) |
Net cash provided by (used in)
financing activities |
|
|
126,151 |
|
|
|
(16,438 |
) |
Foreign currency exchange
effect on cash and cash equivalent balances |
|
|
5,342 |
|
|
|
(13,790 |
) |
Decrease in cash and cash
equivalents |
|
|
(12,283 |
) |
|
|
(16,390 |
) |
Cash and cash equivalents
at beginning of period |
|
|
187,978 |
|
|
|
164,524 |
|
Cash and cash equivalents
at end of period |
|
$ |
175,695 |
|
|
$ |
148,134 |
|
|
|
|
|
|
|
|
|
|
INSIGHT
ENTERPRISES, INC. AND SUBSIDIARIES |
RECONCILIATION
OF GAAP TO NON-GAAP FINANCIAL MEASURES |
(IN THOUSANDS,
EXCEPT PER SHARE DATA) |
(UNAUDITED) |
|
|
|
Three
Months Ended September 30, |
|
|
Nine Months
Ended September 30, |
|
|
|
2016 |
|
|
2015 |
|
|
2016 |
|
|
2015 |
|
Adjusted
Consolidated Earnings from Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP |
|
$ |
36,407 |
|
|
$ |
32,638 |
|
|
$ |
108,162 |
|
|
$ |
95,971 |
|
Severance and
restructuring expenses |
|
|
788 |
|
|
|
817 |
|
|
|
3,053 |
|
|
|
1,912 |
|
Non-cash real estate
impairment |
|
|
- |
|
|
|
800 |
|
|
|
- |
|
|
|
800 |
|
Gain on sale of real
estate for which a non-cash impairment charge was previously
reported |
|
|
- |
|
|
|
- |
|
|
|
(338 |
) |
|
|
- |
|
Non-GAAP |
|
$ |
37,195 |
|
|
$ |
34,255 |
|
|
$ |
110,877 |
|
|
$ |
98,683 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
Consolidated Net Earnings: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP |
|
$ |
21,635 |
|
|
$ |
20,825 |
|
|
$ |
63,590 |
|
|
$ |
57,275 |
|
Severance and
restructuring expenses |
|
|
788 |
|
|
|
817 |
|
|
|
3,053 |
|
|
|
1,912 |
|
Non-cash real estate
impairment |
|
|
- |
|
|
|
800 |
|
|
|
- |
|
|
|
800 |
|
Gain on sale of real
estate for which a non-cash impairment charge was previously
reported |
|
|
- |
|
|
|
- |
|
|
|
(338 |
) |
|
|
- |
|
Income taxes on non-GAAP
adjustments |
|
|
(234 |
) |
|
|
(559 |
) |
|
|
(871 |
) |
|
|
(690 |
) |
Non-GAAP |
|
$ |
22,189 |
|
|
$ |
21,883 |
|
|
$ |
65,434 |
|
|
$ |
59,297 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
Consolidated Diluted EPS: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP |
|
$ |
0.60 |
|
|
$ |
0.56 |
|
|
$ |
1.74 |
|
|
$ |
1.49 |
|
Severance and
restructuring expenses |
|
|
0.02 |
|
|
|
0.02 |
|
|
|
0.08 |
|
|
|
0.05 |
|
Non-cash real estate
impairment |
|
|
- |
|
|
|
0.02 |
|
|
|
- |
|
|
|
0.02 |
|
Gain on sale of real
estate for which a non-cash impairment charge was previously
reported |
|
|
- |
|
|
|
- |
|
|
|
(0.01 |
) |
|
|
- |
|
Income taxes on non-GAAP
adjustments |
|
|
- |
|
|
|
(0.01 |
) |
|
|
(0.02 |
) |
|
|
(0.02 |
) |
Non-GAAP |
|
$ |
0.62 |
|
|
$ |
0.59 |
|
|
$ |
1.79 |
|
|
$ |
1.54 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted North
America Earnings from Operations: |
|
|
|
|
|
GAAP |
|
$ |
35,755 |
|
|
$ |
31,587 |
|
|
$ |
87,756 |
|
|
$ |
79,629 |
|
Severance and
restructuring expenses |
|
|
643 |
|
|
|
618 |
|
|
|
2,451 |
|
|
|
873 |
|
Non-cash real estate
impairment |
|
|
- |
|
|
|
800 |
|
|
|
- |
|
|
|
800 |
|
Gain on sale of real
estate for which a non-cash impairment charge was previously
reported |
|
|
- |
|
|
|
- |
|
|
|
(338 |
) |
|
|
- |
|
Non-GAAP |
|
$ |
36,398 |
|
|
$ |
33,005 |
|
|
$ |
89,869 |
|
|
$ |
81,302 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EMEA
Earnings from Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP |
|
$ |
270 |
|
|
$ |
1,029 |
|
|
$ |
14,660 |
|
|
$ |
12,304 |
|
Severance and
restructuring expenses |
|
|
145 |
|
|
|
199 |
|
|
|
487 |
|
|
|
1,039 |
|
Non-GAAP |
|
$ |
415 |
|
|
$ |
1,228 |
|
|
$ |
15,147 |
|
|
$ |
13,343 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted APAC
Earnings from Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP |
|
$ |
382 |
|
|
$ |
22 |
|
|
$ |
5,746 |
|
|
$ |
4,038 |
|
Severance and
restructuring expenses |
|
|
- |
|
|
|
- |
|
|
|
115 |
|
|
|
- |
|
Non-GAAP |
|
$ |
382 |
|
|
$ |
22 |
|
|
$ |
5,861 |
|
|
$ |
4,038 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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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