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Press release content from Business Wire. The AP news staff was not involved in its creation.

Tech Data Reports Third Quarter Fiscal Year 2020 Results

November 26, 2019

CLEARWATER, Fla.--(BUSINESS WIRE)--Nov 26, 2019--

Tech Data (NASDAQ: TECD) (the “Company”) today announced its financial results for the third quarter ended October 31, 2019.

 
Third quarter ended October 31,Nine months ended October 31,
($ in millions,
except per share amounts)

2019

2018

Y/Y
Change

2019

2018

Y/Y
Change
Net Sales

$9,118.9

$9,340.0

-2%

$26,617.6

$26,774.4

-1%

 

 

 

 

 

 

Gross profit

$560.4

$556.6

1%

$1,631.4

$1,606.8

2%

Gross margin

6.15%

5.96%

19 bps

6.13%

6.00%

13 bps

 

 

 

 

 

 

SG&A expenses (GAAP)*

$415.2

$396.7

5%

$1,252.8

$1,234.4

1%

% of net sales

4.55%

4.25%

30 bps

4.71%

4.61%

10 bps

 

 

 

 

 

 

SG&A expenses (Non-GAAP)*

$394.1

$368.6

7%

$1,189.0

$1,159.7

3%

% of net sales

4.32%

3.95%

37 bps

4.47%

4.33%

14 bps

 

 

 

 

 

 

Operating income (GAAP)*

$141.9

$146.9

-3%

$364.3

$327.7

11%

Operating margin (GAAP)*

1.56%

1.57%

-1 bps

1.37%

1.22%

15 bps

 

 

 

 

 

 

Operating income (Non-GAAP)*

$166.3

$188.0

-12%

$442.4

$447.0

-1%

Operating margin (Non-GAAP)*

1.82%

2.01%

-19 bps

1.66%

1.67%

-1 bps

 

 

 

 

 

 

Net income (GAAP)*

$90.8

$114.2

-21%

$225.4

$223.8

1%

Net income (Non-GAAP)*

$108.8

$116.3

-6%

$283.3

$264.8

7%

 

 

 

 

 

 

EPS - diluted (GAAP)*

$2.52

$2.96

-15%

$6.15

$5.80

6%

EPS - diluted (Non-GAAP)*

$3.02

$3.02

0%

$7.73

$6.87

13%

* Third quarter ended October 31, 2018 includes a $25 million benefit ($18 million net of tax; $0.47 cents per diluted share) from the collection of an accounts receivable balance previously considered uncollectible.

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.

 
Third quarter ended October 31,Nine months ended October 31,
($ in millions)

2019

2018

Y/Y
Change

2019

2018

Y/Y
Change

AMERICAS

 

 

 

 

 

 

Net Sales

$4,202.3

$4,137.9

2%

$12,308.2

$11,799.4

4%

% of WW net sales

46%

44%

 

46%

44%

 

 

 

 

 

 

 

Operating income (GAAP)*

$82.4

$112.4

-27%

$244.1

$261.7

-7%

% of net sales

1.96%

2.72%

-76 bps

1.98%

2.22%

-24 bps

 

 

 

 

 

 

Operating income (Non-GAAP)*

$99.4

$124.8

-20%

$292.0

$306.1

-5%

% of net sales

2.37%

3.01%

-64 bps

2.37%

2.59%

-22 bps

EUROPE

 

 

 

 

 

 

Net Sales

$4,622.3

$4,920.2

-6%

$13,371.4

$14,131.0

-5%

% of WW net sales

51%

53%

 

50%

53%

 

 

 

 

 

 

 

Operating income (GAAP)

$66.5

$39.9

67%

$140.6

$86.3

63%

% of net sales

1.44%

0.81%

63 bps

1.05%

0.61%

44 bps

 

 

 

 

 

 

Operating income (Non-GAAP)

$72.4

$66.2

9%

$165.3

$154.1

7%

% of net sales

1.57%

1.34%

23 bps

1.24%

1.09%

15 bps

ASIA PACIFIC

 

 

 

 

 

 

Net Sales

$294.4

$282.0

4%

$938.0

$844.1

11%

% of WW net sales

3%

3%

 

4%

3%

 

 

 

 

 

 

 

Operating income (GAAP)

$0.3

$2.7

-90%

$3.2

$3.5

-7%

% of net sales

0.09%

0.97%

-88 bps

0.34%

0.41%

-7 bps

 

 

 

 

 

 

Operating income (Non-GAAP)

$1.8

$4.6

-62%

$8.8

$8.2

8%

% of net sales

0.60%

1.64%

-104 bps

0.94%

0.97%

-3 bps

Regional Financial Highlights:

* Third quarter ended October 31, 2018 includes a $25 million benefit from the collection of an accounts receivable balance previously considered uncollectible.

Note: WW = worldwide
Stock-based compensation expense was $7.3 million, a decrease of $0.8 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).

“We delivered solid third quarter results while continuing to execute on our strategy and portfolio optimization actions,” said Rich Hume, chief executive officer. “In Q3, we also announced our intention to acquire DLT Solutions, a premier software and cloud solutions aggregator focused on the U.S. public sector. This acquisition reflects our strategy of delivering higher value – strengthening our end-to-end portfolio and accelerating our capabilities in next-generation technologies.”

Subsequent Events

On November 13, 2019, Tech Data announced it had entered into a definitive agreement (the “Merger Agreement”) to be acquired by Tiger Midco, LLC, an affiliate of funds managed by affiliates of Apollo Global Management, Inc. (NYSE: APO), a leading global alternative investment manager (“Apollo”). The Merger Agreement provides that Tiger Midco, LLC will acquire all of the outstanding shares of Tech Data common stock for $130 per share in cash. Tech Data filed a Current Report on Form 8-K on November 13, 2019 providing further information with respect to the Merger Agreement. As previously announced, due to the pending acquisition by affiliates of the Apollo Funds, Tech Data does not plan to host an earnings conference call nor provide forward-looking guidance.

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, gain on disposal of subsidiary, tax indemnifications, changes in deferred tax valuation allowances and the impact of U.S. tax reform. 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 communication includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.

Such forward-looking statements are inherently uncertain, and shareholders and other potential investors must recognize that actual results may differ materially from Tech Data’s expectations as a result of a variety of factors. Such forward-looking statements are based upon management’s current expectations and include known and unknown risks, uncertainties and other factors, many of which Tech Data is unable to predict or control, that may cause Tech Data’s actual results, performance, or plans to differ materially from any future results, performance or plans expressed or implied by such forward-looking statements. Risks and uncertainties related to the proposed merger include, but are not limited to, the occurrence of any event, change or other circumstance that could give rise to the termination of the merger agreement; the failure of the parties to satisfy conditions to completion of the proposed merger, including the failure of Tech Data’s shareholders to approve the proposed merger or the failure of the parties to obtain required regulatory approvals; the risk that regulatory or other approvals are delayed or are subject to terms and conditions that are not anticipated; and the risks, uncertainties, and other factors detailed from time to time in Tech Data’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed or furnished with the Securities and Exchange Commission (the “SEC”).

Many of these factors are beyond Tech Data’s control. Tech Data cautions investors that any forward-looking statements made by Tech Data are not guarantees of future performance. Tech Data disclaims any obligation to update any such factors or to announce publicly the results of any revisions to any of the forward-looking statements to reflect future events or developments.

No Offer or Solicitation

This communication shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities, in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.

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,Facebook and Instagram.

 

TECH DATA CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

Three months ended October 31,Nine months ended October 31,

2019

2018

2019

2018

Net sales

$

9,118,944

 

$

9,340,029

 

$

26,617,612

 

$

26,774,449

 

Cost of products sold

 

8,558,557

 

 

8,783,425

 

 

24,986,196

 

 

25,167,698

 

Gross profit

 

560,387

 

 

556,604

 

 

1,631,416

 

 

1,606,751

 

Operating expenses:
Selling, general and administrative expenses

 

415,242

 

 

396,675

 

 

1,252,752

 

 

1,234,355

 

Acquisition, integration, and restructuring expenses

 

4,647

 

 

20,277

 

 

16,077

 

 

66,799

 

Legal settlements and other, net

 

(7,207

)

 

(282

)

 

(15,406

)

Gain on disposal of subsidiary

 

(1,390

)

 

(29

)

 

(1,390

)

 

(6,746

)

 

418,499

 

 

409,716

 

 

1,267,157

 

 

1,279,002

 

Operating income

 

141,888

 

 

146,888

 

 

364,259

 

 

327,749

 

Interest expense

 

21,033

 

 

25,405

 

 

68,276

 

 

79,380

 

Other expense, net

 

4,348

 

 

4,961

 

 

6,551

 

 

7,779

 

Income before income taxes

 

116,507

 

 

116,522

 

 

289,432

 

 

240,590

 

Provision for income taxes

 

25,737

 

 

2,306

 

 

64,012

 

 

16,809

 

Net income

$

90,770

 

$

114,216

 

$

225,420

 

$

223,781

 

 
Earnings per share:
Basic

$

2.54

 

$

2.98

 

$

6.19

 

$

5.83

 

Diluted

$

2.52

 

$

2.96

 

$

6.15

 

$

5.80

 

Weighted average common shares outstanding:
Basic

 

35,720

 

 

38,358

 

 

36,395

 

 

38,357

 

Diluted

 

35,968

 

 

38,526

 

 

36,630

 

 

38,559

 

TECH DATA CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

(In thousands, except par value and share amounts)

 October 31,January 31,
 

2019

2019

ASSETS (unaudited)
  
Current assets: 
Cash and cash equivalents 

$

964,146

 

$

799,123

 

Accounts receivable, net 

 

5,768,940

 

 

6,241,740

 

Inventories 

 

3,145,381

 

 

3,297,385

 

Prepaid expenses and other assets 

 

341,075

 

 

354,601

 

Total current assets 

 

10,219,542

 

 

10,692,849

 

Property and equipment, net 

 

275,013

 

 

274,917

 

Goodwill 

 

888,165

 

 

892,990

 

Intangible assets, net 

 

884,560

 

 

950,858

 

Other assets, net 

 

427,456

 

 

174,938

 

Total assets 

$

12,694,736

 

$

12,986,552

 

  
  
LIABILITIES AND SHAREHOLDERS' EQUITY 
  
Current liabilities: 
Accounts payable 

$

6,963,941

 

$

7,496,466

 

Accrued expenses and other liabilities 

 

1,030,457

 

 

1,000,126

 

Revolving credit loans and current maturities of long-term debt, net 

 

123,271

 

 

110,368

 

Total current liabilities 

 

8,117,669

 

 

8,606,960

 

Long-term debt, less current maturities 

 

1,294,186

 

 

1,300,554

 

Other long-term liabilities 

 

314,596

 

 

142,315

 

Total liabilities 

$

9,726,451

 

$

10,049,829

 

  
Shareholders’ equity: 
Common stock, par value $0.0015; 200,000,000 shares authorized; 59,245,585
shares issued at October 31, 2019 and January 31, 2019
 

$

89

 

$

89

 

Additional paid-in capital 

 

846,636

 

 

844,206

 

Treasury stock, at cost (23,798,037 and 22,305,464 shares at October 31, 2019 
and January 31, 2019) 

 

(1,195,148

)

 

(1,037,872

)

Retained earnings 

 

3,311,934

 

 

3,086,514

 

Accumulated other comprehensive income 

 

4,774

 

 

43,786

 

Total shareholders' equity 

 

2,968,285

 

 

2,936,723

 

Total liabilities and shareholders' equity 

$

12,694,736

 

$

12,986,552

 

TECH DATA CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

(In thousands)

(Unaudited)

Nine months ended October 31,

2019

2018

Cash flows from operating activities:
Cash received from customers

$

35,335,867

 

$

34,190,821

 

Cash paid to vendors and employees

 

(34,774,608

)

 

(33,891,567

)

Interest paid, net

 

(79,482

)

 

(82,829

)

Income taxes paid

 

(69,174

)

 

(67,107

)

Net cash provided by operating activities

 

412,603

 

 

149,318

 

Cash flows from investing activities:
Proceeds from sale of business, net of cash divested

 

8,985

 

Acquisition of businesses, net of cash acquired

 

(124,223

)

Expenditures for property and equipment

 

(30,503

)

 

(24,830

)

Software and software development costs

 

(21,147

)

 

(15,323

)

Other

 

315

 

 

1,105

 

Net cash used in investing activities

 

(51,335

)

 

(154,286

)

Cash flows from financing activities:
Borrowings on long-term debt

 

300,000

 

Principal payments on long-term debt

 

(311,925

)

 

(207,854

)

Cash paid for debt issuance costs

 

(4,341

)

Net borrowings (repayments) on revolving credit loans

 

15,035

 

 

(9,274

)

Payments for employee tax withholdings on equity awards

 

(9,337

)

 

(6,988

)

Proceeds from the reissuance of treasury stock

 

1,450

 

 

1,322

 

Acquisition of noncontrolling interest

 

(7,553

)

Repurchases of common stock

 

(166,992

)

 

(43,798

)

Other

 

529

 

Net cash used in financing activities

 

(183,134

)

 

(266,592

)

Effect of exchange rate changes on cash and cash equivalents

 

(13,111

)

 

(37,589

)

Net increase (decrease) in cash and cash equivalents

 

165,023

 

 

(309,149

)

Cash and cash equivalents at beginning of year

 

799,123

 

 

955,628

 

Cash and cash equivalents at end of period

$

964,146

 

$

646,479

 

Reconciliation of net income to net cash provided by operating activities:
Net income

$

225,420

 

$

223,781

 

Adjustments to reconcile net income to net cash provided by operating activities:
Gain on disposal of subsidiary

 

(1,390

)

 

(6,746

)

Depreciation and amortization

 

112,726

 

 

119,641

 

Provision for losses on accounts receivable

 

19,176

 

 

11,545

 

Stock-based compensation expense

 

23,707

 

 

23,694

 

Accretion of debt discount and debt issuance costs

 

3,195

 

 

2,983

 

Deferred income taxes

 

4,577

 

 

(11,567

)

Changes in operating assets and liabilities, net of acquisitions and disposition:
Accounts receivable

 

372,594

 

 

(309,390

)

Inventories

 

113,168

 

 

(397,692

)

Prepaid expenses and other assets

 

38,991

 

 

(3,720

)

Accounts payable

 

(443,413

)

 

474,214

 

Accrued expenses and other liabilities

 

(56,148

)

 

22,575

 

Total adjustments

 

187,183

 

 

(74,463

)

Net cash provided by operating activities

$

412,603

 

$

149,318

  

TECH DATA CORPORATION AND SUBSIDIARIES

GAAP TO NON-GAAP RECONCILIATION

(In thousands)

 

Three months ended October 31, 2019

Americas (1)

Europe (1)

Asia Pacific (1)

Stock
Compensation
Expense
Consolidated
Net Sales

$

4,202,320

 

$

4,622,270

 

$

294,354

 

$

9,118,944

 

Operating income (GAAP) (1)

$

82,420

 

$

66,536

 

$

279

 

$

(7,347

)

$

141,888

 

Acquisition, integration and restructuring expenses

 

3,551

 

 

975

 

 

121

 

 

-

 

 

4,647

 

Acquisition-related intangible assets amortization expense

 

13,438

 

 

6,312

 

 

1,294

 

 

21,044

 

Gain on disposal of subsidiary

 

-

 

 

(1,390

)

 

-

 

 

(1,390

)

Tax indemnifications

 

-

 

 

-

 

 

62

 

 

62

 

Total non-GAAP operating income adjustments

$

16,989

 

$

5,897

 

$

1,477

 

$

-

 

$

24,363

 

Operating income (non-GAAP)

$

99,409

 

$

72,433

 

$

1,756

 

$

(7,347

)

$

166,251

 

Operating margin (GAAP)

 

1.96

%

 

1.44

%

 

0.09

%

 

1.56

%

Operating margin (non-GAAP)

 

2.37

%

 

1.57

%

 

0.60

%

 

1.82

%

 
(1) GAAP operating income does not include stock compensation expense at the regional level.
 
 

Three months ended October 31, 2018

 

Americas (1)Europe (1)Asia Pacific (1)Stock
Compensation
Expense
Consolidated
Net Sales

$

4,137,852

 

$

4,920,156

 

$

282,021

 

$

9,340,029

 

Operating income (GAAP) (1)

$

112,399

 

$

39,889

 

$

2,739

 

$

(8,139

)

$

146,888

 

Acquisition, integration and restructuring expenses

 

5,989

 

 

13,132

 

 

578

 

 

578

 

 

20,277

 

Legal settlements and other, net

 

(7,207

)

 

-

 

 

-

 

 

(7,207

)

Acquisition-related intangible assets amortization expense

 

13,569

 

 

7,640

 

 

1,314

 

 

22,523

 

Gain on disposal of subsidiary

 

-

 

 

(29

)

 

-

 

 

(29

)

Tax indemnifications

 

-

 

 

5,541

 

 

-

 

 

5,541

 

Total non-GAAP operating income adjustments

$

12,351

 

$

26,284

 

$

1,892

 

$

578

 

$

41,105

 

Operating income (non-GAAP)

$

124,750

 

$

66,173

 

$

4,631

 

$

(7,561

)

$

187,993

 

Operating margin (GAAP)

 

2.72

%

 

0.81

%

 

0.97

%

 

1.57

%

Operating margin (non-GAAP)

 

3.01

%

 

1.34

%

 

1.64

%

 

2.01

%

 
(1) GAAP operating income does not include stock compensation expense at the regional level.
 

TECH DATA CORPORATION AND SUBSIDIARIES

GAAP TO NON-GAAP RECONCILIATION

(In thousands)

 

Nine months ended October 31, 2019

Americas (1)Europe (1)Asia Pacific (1)Stock
Compensation
Expense
Consolidated
Net Sales

$

12,308,249

 

$

13,371,397

 

$

937,966

 

$

26,617,612

 

Operating income (GAAP) (1)

$

244,138

 

$

140,605

 

$

3,223

 

$

(23,707

)

$

364,259

 

Acquisition, integration and restructuring expenses

 

7,803

 

 

7,228

 

 

1,046

 

 

-

 

 

16,077

 

Legal settlements and other, net

 

(282

)

 

-

 

 

-

 

 

(282

)

Acquisition-related intangible assets amortization expense

 

40,318

 

 

18,857

 

 

3,930

 

 

63,105

 

Gain on disposal of subsidiary

 

-

 

 

(1,390

)

 

-

 

 

(1,390

)

Tax indemnifications

 

-

 

 

-

 

 

647

 

 

647

 

Total non-GAAP operating income adjustments

$

47,839

 

$

24,695

 

$

5,623

 

$

-

 

$

78,157

 

Operating income (non-GAAP)

$

291,977

 

$

165,300

 

$

8,846

 

$

(23,707

)

$

442,416

 

Operating margin (GAAP)

 

1.98

%

 

1.05

%

 

0.34

%

 

1.37

%

Operating margin (non-GAAP)

 

2.37

%

 

1.24

%

 

0.94

%

 

1.66

%

 
(1) GAAP operating income does not include stock compensation expense at the regional level.
 

Nine months ended October 31, 2018

Americas (1)Europe (1)Asia Pacific (1)Stock
Compensation
Expense
Consolidated
Net Sales

$

11,799,389

 

$

14,130,985

 

$

844,075

 

$

26,774,449

 

Operating income (GAAP) (1)

$

261,671

 

$

86,292

 

$

3,480

 

$

(23,694

)

$

327,749

 

Acquisition, integration and restructuring expenses

 

19,061

 

 

44,462

 

 

1,030

 

 

2,246

 

 

66,799

 

Legal settlements and other, net

 

(15,406

)

 

-

 

 

-

 

 

(15,406

)

Acquisition-related intangible assets amortization expense

 

40,782

 

 

23,696

 

 

4,064

 

 

68,542

 

Gain on disposal of subsidiary

 

-

 

 

(6,746

)

 

-

 

 

(6,746

)

Tax indemnifications

 

-

 

 

6,451

 

 

(356

)

 

6,095

 

Total non-GAAP operating income adjustments

$

44,437

 

$

67,863

 

$

4,738

 

$

2,246

 

$

119,284

 

Operating income (non-GAAP)

$

306,108

 

$

154,155

 

$

8,218

 

$

(21,448

)

$

447,033

 

Operating margin (GAAP)

 

2.22

%

 

0.61

%

 

0.41

%

 

1.22

%

Operating margin (non-GAAP)

 

2.59

%

 

1.09

%

 

0.97

%

 

1.67

%

 
(1) GAAP operating income does not include stock compensation expense at the regional level.

TECH DATA CORPORATION AND SUBSIDIARIES

GAAP TO NON-GAAP RECONCILIATION

(In thousands)

 
Selling, general and administrative expenses ("SG&A")  Three months ended October 31,
  

2019

2018

Net Sales  

$

9,118,944

 

$

9,340,029

 

SG&A Expenses (GAAP)  

$

415,242

 

$

396,675

 

Tax indemnifications  

 

(62

)

 

(5,541

)

Acquisition-related intangible assets amortization expense  

 

(21,044

)

 

(22,523

)

SG&A Expenses (non-GAAP)  

$

394,136

 

$

368,611

 

   
SG&A Expenses (GAAP) %  

 

4.55

%

 

4.25

%

SG&A Expenses (non-GAAP) %  

 

4.32

%

 

3.95

%

   
   
  Nine months ended October 31,
  

2019

2018

Net Sales  

$

26,617,612

 

$

26,774,449

 

SG&A Expenses (GAAP)  

$

1,252,752

 

$

1,234,355

 

Tax indemnifications  

 

(647

)

 

(6,095

)

Acquisition-related intangible assets amortization expense  

 

(63,105

)

 

(68,542

)

SG&A Expenses (non-GAAP)  

$

1,189,000

 

$

1,159,718

 

   
SG&A Expenses (GAAP) %  

 

4.71

%

 

4.61

%

SG&A Expenses (non-GAAP) %  

 

4.47

%

 

4.33

%

 

TECH DATA CORPORATION AND SUBSIDIARIES

GAAP TO NON-GAAP RECONCILIATION

(In thousands)

 
 Three months ended October 31,
 

2019

2018

 Net Income Diluted EPSNet Income Diluted EPS
GAAP Results 

$90,770

 

$2.52

 

$114,216

 

$2.96

Acquisition, integration and restructuring expenses 

4,647

 

0.13

 

20,277

 

0.53

Legal settlements and other, net 

-

 

-

 

(7,207)

 

(0.19)

Acquisition-related intangible assets amortization expense 

21,044

 

0.59

 

22,523

 

0.58

Gain on disposal of subsidiary 

(1,390)

 

(0.04)

 

(29)

 

-

Tax indemnifications 

62

 

-

 

5,541

 

0.14

Income tax effect of tax indemnifications 

(62)

 

-

 

(5,541)

 

(0.14)

Income tax effect of other adjustments above 

(6,306)

 

(0.18)

 

(8,798)

 

(0.23)

Income tax benefit from acquisition settlement 

-

 

-

 

(207)

 

-

Change in deferred tax valuation allowances 

-

 

-

 

(473)

 

(0.01)

Impact of US tax reform 

-

 

-

 

(24,000)

 

(0.62)

 

 

 

 

 

 

 

 

Non-GAAP Results 

$108,765

 

$3.02

 

$116,302

 

$3.02

 
    
 Nine months ended October 31,
 

2019

2018

 Net Income Diluted EPSNet Income Diluted EPS
GAAP Results 

$225,420

 

$6.15

 

$223,781

 

$5.80

Acquisition, integration and restructuring expenses 

16,077

 

0.44

 

66,799

 

1.73

Legal settlements and other, net 

(282)

 

(0.01)

 

(15,406)

 

(0.40)

Acquisition-related intangible assets amortization expense 

63,105

 

1.72

 

68,542

 

1.78

Gain on disposal of subsidiary 

(1,390)

 

(0.04)

 

(6,746)

 

(0.17)

Tax indemnifications 

647

 

0.02

 

6,095

 

0.16

Value added tax assessments and related interest expense 

-

 

-

 

(928)

 

(0.02)

Income tax effect of tax indemnifications 

(647)

 

(0.02)

 

(6,095)

 

(0.16)

Income tax effect of other adjustments above 

(19,642)

 

(0.53)

 

(31,110)

 

(0.81)

Income tax benefit from acquisition settlement 

-

 

-

 

(13,046)

 

(0.34)

Change in deferred tax valuation allowances 

-

 

-

 

(3,073)

 

(0.08)

Impact of US tax reform 

-

 

-

 

(24,000)

 

(0.62)

    
Non-GAAP Results 

$283,288

 

$7.73

$264,813

 

$6.87

  
TECH DATA CORPORATION AND SUBSIDIARIES
GAAP TO NON-GAAP RECONCILIATION
 

(In thousands)

  
Return on Invested Capital (ROIC)
 
 Twelve months ended October 31,
 TTM Net Operating Profit After Tax (NOPAT)*:

2019

2018

 Operating income

$

530,312

 

$

479,652

 

 Income taxes on operating income (1)

 

(100,387

)

 

(184,189

)

 NOPAT

$

429,925

 

$

295,463

 

  
 Average Invested Capital:
 Short-term debt (5-qtr end average)

$

119,103

 

$

117,542

 

 Long-term debt (5-qtr end average)

 

1,298,291

 

 

1,504,148

 

 Shareholders' Equity (5-qtr end average)

 

2,909,665

 

 

2,840,505

 

 Total average capital

 

4,327,059

 

 

4,462,195

 

 Less: Cash (5-qtr end average)

 

(789,103

)

 

(660,638

)

 Average invested capital less average cash

$

3,537,956

 

$

3,801,557

 

 ROIC

 

12

%

 

8

%

  
 * Trailing Twelve Months is abbreviated as TTM.
 (1) Income taxes on operating income was calculated using the trailing twelve months effective tax rate.
  
Adjusted Return on Invested Capital (ROIC) 
  
 Twelve months ended October 31,
 TTM Net Operating Profit After Tax (NOPAT), as adjusted*:

2019

2018

 Non-GAAP operating income (1)

$

703,269

 

$

662,984

 

 Income taxes on non-GAAP operating income (2)

 

(166,278

)

 

(180,184

)

 NOPAT, as adjusted

$

536,991

 

$

482,800

 

  
 Average Invested Capital, as adjusted:
 Short-term debt (5-qtr end average)

$

119,103

 

$

117,542

 

 Long-term debt (5-qtr end average)

 

1,298,291

 

 

1,504,148

 

 Shareholders' Equity (5-qtr end average)

 

2,909,665

 

 

2,840,505

 

 Tax effected impact of non-GAAP adjustments (3)

 

48,846

 

 

90,378

 

 Total average capital, as adjusted

 

4,375,905

 

 

4,552,573

 

 Less: Cash (5-qtr end average)

 

(789,103

)

 

(660,638

)

 Average invested capital less average cash

$

3,586,802

 

$

3,891,935

 

 Adjusted ROIC

 

15

%

 

12

%

  
 * Trailing Twelve Months is abbreviated as TTM.
 (1) Represents operating income as adjusted to exclude acquisition, integration and restructuring expenses, legal settlements and other, net, gain on disposal of subsidiary, value added tax assessments, acquisition-related intangible assets amortization expense, goodwill impairment and tax indemnifications.
 (2) Income taxes on non-GAAP operating income was calculated using the trailing twelve months effective tax rate adjusted for the impact of non-GAAP adjustments during the respective periods.
 (3) Represents the 5 quarter average of the year-to-date impact of non-GAAP adjustments.

 

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SOURCE: Tech Data

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PUB: 11/26/2019 06:00 AM/DISC: 11/26/2019 06:01 AM

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