Current Report — Form 8-K Filing Table of Contents
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Tech Data Reports First Quarter Fiscal Year 2020 Results
CLEARWATER,
Fla., (May 30, 2019) -- Tech Data (NASDAQ: TECD) (the “Company”) today announced its financial results for the first quarter ended April 30, 2019.
A reconciliation of GAAP to non-GAAP financial measures is presented in the financial tables of this press release.
“We are pleased to report a solid start to Tech Data’s fiscal year 20. In Q1 we delivered double-digit earnings per share growth, generated positive cash flow and earned an industry-leading return on invested capital – all while making good progress on our strategy and continuing to invest for the future. Our worldwide teams executed well in the quarter, despite market uncertainty,” said Rich Hume, chief executive officer. “Looking ahead, although IT market growth has slowed somewhat from the year ago levels, demand continues to be solid and we remain positive on the overall IT spending outlook.”
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Regional Financial Highlights for the First Quarter Ended April 30, 2019:
Note: NM = not meaningful, WW = worldwide
Stock-based compensation expense was $8.3 million, an increase of $0.7 million, compared to the prior-year quarter. These expenses are excluded from the regional operating results and presented as a separate line item in the company’s segment reporting (see the GAAP to non-GAAP reconciliation in the financial tables of this press
release).
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Net sales were $8.4 billion, a decrease of 2 percent compared to the prior-year quarter. On a constant currency basis, net sales increased 3 percent.
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Americas: Net sales were $3.8 billion, an increase of 5 percent compared to the prior-year quarter. On a constant currency basis, net sales increased 6 percent.
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Europe:
Net sales were $4.3 billion, a decrease of 8 percent compared to the prior-year quarter. On a constant currency basis, net sales increased 1 percent.
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Asia Pacific: Net sales were $0.3 billion, an increase of 15 percent compared to the prior-year quarter. On a constant currency basis, net sales increased 19 percent.
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Net cash generated by operations during the quarter was $63 million.
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Return on invested capital for the trailing twelve months was 13 percent, compared to 4 percent in the prior year. Adjusted return on invested capital for the trailing twelve months was 14 percent, compared to 11 percent in the prior year.
“During Q1, we generated $63 million in cash from operations, returned $36 million to our shareholders through share repurchases, and for the trailing twelve month period, earned an adjusted return on invested capital of 14 percent. In addition, we recently improved our liquidity
profile to enhance our financial strength and flexibility – all of which reflect our disciplined approach to optimizing our business and commitment to creating shareholder value,” said Chuck Dannewitz, executive vice president, chief financial officer.
Worldwide
net sales to be in the range of $8.6 billion to $8.9 billion
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EPS to be in the range of $1.53 to $1.83 and non-GAAP EPS to be in the range of $2.15 to $2.45
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An effective tax rate in the range of 24 percent to 26 percent
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This guidance assumes an average U.S. dollar to euro exchange rate of $1.12 to €1.00 which
compares to $1.17 to €1.00 in the year-ago period.
Webcast Details
Tech Data will hold a conference call today at 9:00 a.m. (ET) to discuss its financial results for the first quarter ended April 30, 2019. A webcast of the call, including supplemental schedules, will be available to all interested parties and can be obtained at www.techdata.com/investor. The webcast will be available for replay for three months.
Non-GAAP Financial Information
The non-GAAP financial information contained in this release is included with the intention of providing investors a more complete understanding
of the Company’s operational results and trends, but should only be used in conjunction with results reported in accordance with Generally Accepted Accounting Principles (“GAAP”). Certain non-GAAP measures presented in this release or other releases, presentations and similar documents issued by the Company include sales, income or expense items as adjusted for the impact of changes in foreign currencies (referred to as “constant currency”), non-GAAP operating income, non-GAAP operating margin, non-GAAP net income, non-GAAP earnings per diluted share and Adjusted Return on Invested Capital. Certain non-GAAP measures also exclude acquisition-related intangible assets amortization expense, benefits associated with legal settlements, acquisition, integration and restructuring expenses, value-added
tax assessments and related interest expense, tax indemnifications and changes in deferred tax valuation allowances. A detailed reconciliation of the adjustments between results calculated using GAAP and non-GAAP in this release is contained in the attached financial schedules. This information can also be obtained from the Company’s Investor Relations website at www.techdata.com/investor.
Forward-Looking Statements
Certain statements in this communication may contain “forward-looking statements”
within the meaning of the Private Securities Litigation Reform Act of 1995. These statements, including statements regarding Tech Data’s plans, objectives, expectations and intentions, Tech Data’s financial results and estimates and/or business prospects, involve a number of risks and uncertainties and actual results could differ materially from those projected. These forward looking statements are based on current expectations, estimates, forecasts, and projections about the operating environment, economies and markets in which Tech Data operates and the beliefs and assumptions of our management. Words such as “expects,”“anticipates,”“targets,”“goals,”“projects,”“intends,”“plans,”“believes,”“seeks,”“estimates,” variations of such words, and similar expressions are intended to identify such forward looking statements. In addition, any statements that refer to projections of Tech Data’s future
financial performance, our anticipated growth and trends in our businesses, and other characterizations of future events or circumstances, are forward looking statements. These forward looking statements are only predictions and are subject to risks, uncertainties, and assumptions. Therefore, actual results may differ materially and adversely from those expressed in any forward looking statements.
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For additional information with respect to risks and other factors which could occur, see Tech Data’s Annual Report on Form 10-K for the year ended January 31, 2019, including Part I, Item 1A, “Risk Factors” therein, Quarterly Reports on Form
10-Q, Current Reports on Form 8-K and other securities filings with the Securities and Exchange Commission (the “SEC”) that are available at the SEC’s website at www.sec.gov and other securities regulators. Readers are cautioned not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. Many of these factors are beyond Tech Data’s control. Unless otherwise required by applicable securities laws, Tech Data disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Tech Data undertakes no duty to update any forward looking statements contained herein to reflect actual results or changes in Tech Data’s expectations.
About
Tech Data
Tech Data connects the world with the power of technology. Our end-to-end portfolio of products, services and solutions, highly specialized skills, and expertise in next-generation technologies enable channel partners to bring to market the products and solutions the world needs to connect, grow and advance. Tech Data is ranked No. 88 on the Fortune 500® and has been named one of Fortune's "World's Most Admired Companies" for 10 straight years. To find out more, visit www.techdata.com or follow us on Twitter, LinkedIn, and Facebook.
