Channelstar Media
  • Twitter
  • LinkedIn

Tech Data Corporation reports fourth quarter and fiscal year 2016 results

Reports Record Q4 and Annual Non-GAAP Earnings per Share

CLEARWATER, Fla., (March 04, 2016) — Tech Data Corporation (NASDAQ: TECD) (the “Company”) today announced its financial results for the fourth quarter ended January 31, 2016.

Three months ended January 31, Twelve months ended January 31,
($ in millions,
except per share amounts)
2016 2015 2016 2015
Net Sales $7,483.6 $7,339.5 $26,379.8 $27,670.6
Operating income (GAAP) $145.2 $101.7 $401.4 $267.6
Operating margin (GAAP) 1.94% 1.39% 1.52% 0.97%
Operating income (Non-GAAP) $116.8 $111.7 $319.1 $308.0
Operating margin (Non-GAAP) 1.56% 1.52% 1.21% 1.11%
Net income (GAAP) $96.1 $80.7 $265.7 $175.2
Net income (Non-GAAP) $80.9 $74.9 $208.2 $190.8
EPS – diluted (GAAP) $2.72 $2.11 $7.36 $4.57
EPS – diluted (Non-GAAP) $2.29 $1.96 $5.77 $4.97

A reconciliation of GAAP to non-GAAP financial measures is presented in the financial tables of this press release.

This information is also available on the Investor Relations section of Tech Data’s website at www.techdata.com/investor.

Financial Highlights for the Fourth Quarter Ended January 31, 2016:

  • Net sales were $7.5 billion, an increase of 2 percent compared to the prior-year quarter. On a constant currency basis, and excluding from the prior period net sales generated in Chile, Peru and Uruguay (“exited operations”) due to the Company’s previously announced exit from those countries, net sales increased 11 percent.
    • The Americas: Net sales were $2.7 billion (36 percent of worldwide net sales), an increase of 5 percent compared to the prior-year quarter. On a constant currency basis, and excluding from the prior period net sales generated in the exited operations, net sales grew approximately  11 percent.
    • Europe: Net sales were $4.8 billion (64 percent of worldwide net sales), essentially flat compared to the prior-year quarter. On a constant currency basis, net sales grew approximately 11 percent.
  • Gross profit was $354.6 million, or 4.74 percent of net sales, compared to $372.3 million, or 5.07 percent of net sales in the prior-year quarter. On a constant currency basis, gross profit improved approximately $10.4 million, or 3 percent.
  • Non-GAAP SG&A was $237.8 million, or 3.18 percent of net sales, compared to $260.5 million, or 3.55 percent of net sales in the prior-year quarter. On a constant currency basis, non-GAAP SG&A declined approximately $4.9 million, or 2 percent.
  • Non-GAAP operating income was $116.8 million, or 1.56 percent of net sales, compared to $111.7 million, or 1.52 percent of net sales in the prior-year quarter. On a constant currency basis, non-GAAP operating income increased approximately $15.4 million, or 14 percent.
    • The Americas: Non-GAAP operating income was $38.8 million, or 1.44 percent of net sales, compared to $39.3 million, or 1.53 percent of net sales in the prior-year quarter. On a constant currency basis, non-GAAP operating income increased approximately $0.6 million, or 1 percent over the prior-year quarter.
    • Europe: Non-GAAP operating income was $81.5 million, or 1.70 percent of net sales, compared to $76.4 million, or 1.60 percent of net sales in the prior-year quarter. On a constant currency basis, non-GAAP operating income increased approximately $14.3 million, or 19 percent over the prior-year quarter.
    • Stock-based compensation expense was $3.5 million, compared to $4.0 million in the prior-year quarter. These expenses are excluded from the regional non-GAAP 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).
  • Non-GAAP net income was $80.9 million, or $2.29 per diluted share, compared to $74.9 million or $1.96 per diluted share in the prior-year quarter. On a constant currency basis, non-GAAP net income improved approximately $13.6 million (approximately 18 percent), or $0.55 per diluted share (approximately 28 percent).
  • Net cash used by operations during the fourth quarter was $32 million.

Financial Highlights for the Fiscal Year Ended January 31, 2016:

  • Net sales were $26.4 billion, a decrease of approximately 5 percent compared to the prior year. On a constant currency basis, and excluding from the prior period net sales generated in the exited operations, consolidated net sales increased approximately 7 percent.
    • The Americas: Net sales were $10.4 billion (39 percent of worldwide net sales), essentially flat compared to the prior-year. On a constant currency basis, and excluding from the prior year net sales generated in the exited operations, net sales grew approximately 4 percent.
    • Europe: Net sales were $16.0 billion (61 percent of worldwide net sales), a decrease of  7 percent from the prior year. On a constant currency basis, net sales grew approximately 8 percent.
  • Gross profit was $1.3 billion, or 4.88 percent of net sales, compared to $1.4 billion, or 5.04 percent of net sales in the prior year. On a constant currency basis, gross profit improved approximately $35.8 million, or 3 percent year-over-year.
  • Non-GAAP SG&A was $967.6 million, or 3.67 percent of net sales, compared to $1.1 billion, or 3.92 percent of net sales in the prior year. On a constant currency basis, non-GAAP SG&A declined approximately $13.7 million, or 1 percent year-over-year.
  • Non-GAAP operating income was $319.1 million, or 1.21 percent of net sales, compared to $308.0 million, or 1.11 percent of net sales in the prior year. On a constant currency basis, non-GAAP operating income increased approximately $49.5 million, or 16 percent year-over-year.
    • The Americas: Non-GAAP operating income was $139.8 million, or 1.35 percent of net sales, compared to $146.0 million, or 1.40 percent of net sales in the prior year. On a constant currency basis, non-GAAP operating income decreased approximately $3.5  million, or 2 percent year-over-year.
    • Europe: Non-GAAP operating income was $194.1 million, or 1.21 percent of net sales, compared to $175.6 million, or 1.02 percent of net sales in the prior year. On a constant currency basis, non-GAAP operating income grew approximately $54.2 million, or 31 percent year-over-year.
    • Stock-based compensation expense was $14.9 million, compared to $13.7 million in the prior year. These expenses are excluded from the regional non-GAAP 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).
  • Non-GAAP net income was $208.2 million, or $5.77 per diluted share, compared to $190.8 million or $4.97 per diluted share in the prior year. On a constant currency basis, non-GAAP net income improved approximately $44.0 million (approximately 23 percent), or $1.53 per diluted share (approximately 31 percent).
  • For fiscal year 2016, net cash provided by operations was $189 million.
  • Return on invested capital on a non-GAAP basis for the trailing twelve months was 13 percent compared to 11 percent in the prior year.

“Our fourth-quarter results marked a strong finish to an excellent fiscal year for Tech Data. Building upon the positive momentum of the first nine months, our teams in both regions executed well in Q4, delivering higher-than-expected sales and record fourth-quarter non-GAAP earnings per share,” said Robert M. Dutkowsky, chief executive officer. “At the beginning of the fiscal year, we set out to optimize our operations and leverage our infrastructure by aligning our resources with more strategic, higher-growth areas. This focus enabled us to achieve all of our aspirational financial objectives in fiscal 2016. We gained share in selected markets, improved non-GAAP operating and net income, and grew non-GAAP earnings per share by 16 percent to the highest level in our company’s history, despite experiencing significant foreign currency headwinds throughout the year.”

“Additionally, we delivered a return on invested capital of 13 percent in fiscal 2016—a year-over-year improvement of 200 basis points,” continued Dutkowsky. “We also generated $189 million of operating cash flow and returned $147 million to shareholders through share repurchases, bringing our cumulative share repurchases to $1.3 billion, or nearly 46% of total shares issued. Tech Data’s strong fiscal 2016 performance validates our strategy and firmly positions us to leverage new opportunities in the evolving IT marketplace on behalf of our customers, vendor partners, shareholders, and employees.”
Business Outlook

  • For the quarter ending April 30, 2016, the Company anticipates worldwide net sales to be in the range of $5.85 billion to $6.05 billion. This guidance assumes year-over-year constant currency net sales growth of low-to-mid-single digits in both regions, and an average U.S. dollar to euro exchange rate of $1.08 to €1.00.
  • For the quarter ending April 30, 2016, the Company anticipates non-GAAP earnings per diluted share to be in the range of $0.90 to $0.98.
  •  This guidance assumes weighted average diluted shares outstanding of 35.4 million and a non-GAAP effective tax rate to be in the range of 30 percent to 32 percent.

Webcast Details
A webcast of today’s conference call to discuss its financial results for the fourth quarter ended January 31, 2016. including supplemental schedules, is available to all interested parties and can be obtained at www.techdata.com/investor. The webcast will be available for replay for three months.

— ENDS —

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”) and the impact of the exit of certain country operations. Certain non-GAAP measures also exclude acquisition-related intangible assets amortization expense, benefits associated with legal settlements, value-added tax assessment matters, a loss on disposal of subsidiaries, and restatement and remediation-related expenses. 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
This press release includes “forward-looking statements” within the meaning of the federal securities laws and regulations, including those regarding the Company’s business outlook. These statements are subject to risks and uncertainties, including the risks identified in the Company’s most recent Annual Report on Form 10-K filed March 26, 2015. A number of important factors could cause actual events and results to differ materially from those contained in or implied by the forward-looking statements. Forward-looking statements reflect management’s analysis as of the filing date of this press release. The Company does not undertake to update or revise these statements to reflect subsequent developments.

About Tech Data
Tech Data Corporation is one of the world’s largest wholesale distributors of technology products, services and solutions. Its advanced logistics capabilities and value added services enable 105,000 resellers to efficiently and cost effectively support the diverse technology needs of end users in more than 100 countries. Tech Data generated $26.4 billion in net sales for the fiscal year ended January 31, 2016. It is ranked No. 107 on the Fortune 500® and one of Fortune’s “World’s Most Admired Companies.”  To learn more, visit www.techdata.com, or follow on Facebook and Twitter.

Contacts:
Charles V. Dannewitz, Executive Vice President and Chief Financial Officer
Tel: 001 727-532-8028
Email: chuck.dannewitz@techdata.com
or
Arleen Quiñones, Vice President, Investor Relations and Corporate Communications
Tel: 001 727-532-8866
Email: arleen.quinones@techdata.com