Tech Data Corporation Reports Fourth Quarter and Fiscal Year 2018 Results
Tech Data Corporation Reports Fourth Quarter and Fiscal Year 2018 Results
CLEARWATER, Fla., March 8, 2018 /PRNewswire/ -- Tech Data (NASDAQ: TECD) (the "Company") today announced its financial results for the fourth quarter ended January 31, 2018.
Fourth quarter ended January 31, Fiscal year ended January 31,
-------------------------------- -----------------------------
($ in millions, 2018 2017 Y/Y 2018 2017 Y/Y
except per share amounts) Change Change
------------------------ ------ ------
Net Sales $11,092.5 $7,427.5 49% $36,775.0 $26,234.9 40%
Operating income (GAAP) $151.9 $103.1 47% $410.1 $291.9 40%
Operating margin (GAAP) 1.37% 1.39% -2 bps 1.12% 1.11% 1 bps
Operating income (Non-GAAP) $216.0 $122.1 77% $602.7 $338.9 78%
Operating margin (Non-GAAP) 1.95% 1.64% 31 bps 1.64% 1.29% 35 bps
Net income (GAAP) $1.3 $78.8 -98% $116.6 $195.1 -40%
Net income (Non-GAAP) $134.7 $87.0 55% $348.3 $225.2 55%
EPS - diluted (GAAP) $0.03 $2.22 -99% $3.05 $5.51 -45%
EPS - diluted (Non-GAAP) $3.50 $2.45 43% $9.11 $6.36 43%
----------------------- ----- ----- --- ----- ----- ---
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, 2018:
-- Net sales were $11.1 billion, an increase of 49 percent compared to the
prior-year quarter. The increase in net sales is primarily due to the
addition of the Technology Solutions business acquired from Avnet, Inc.
on February 27, 2017 ("Technology Solutions"). On a constant currency
basis, net sales increased 40 percent.
-- Americas: Net sales were $4.3 billion (39 percent of worldwide net
sales), an increase of 59 percent compared to the prior-year
quarter. The increase in net sales is primarily attributed to the
addition of Technology Solutions. On a constant currency basis, net
sales increased 58 percent.
-- Europe: Net sales were $6.5 billion (58 percent of worldwide net
sales), an increase of 37 percent compared to the prior-year
quarter. The increase in net sales is primarily attributed to the
addition of Technology Solutions. On a constant currency basis, net
sales increased 24 percent.
-- Asia Pacific: Net sales were $0.3 billion (3 percent of worldwide
net sales). Asia Pacific net sales are attributed to the addition of
Technology Solutions.
-- Gross profit was $616.9 million, an increase of $245.8 million, or 66
percent compared to the prior-year quarter. As a percentage of net
sales, gross profit was 5.56 percent compared to 5.00 percent in the
prior-year quarter. The increase in gross profit and gross margin
percentage is primarily due to the addition of Technology Solutions.
-- Selling, general and administrative expenses ("SG&A") were $429.0
million, or 3.87 percent of net sales, compared to $253.9 million, or
3.42 percent of net sales in the prior-year quarter. Non-GAAP SG&A was
$400.9 million, an increase of $152.0 million, or 61 percent, compared
to the prior-year quarter. As a percentage of net sales, non-GAAP SG&A
was 3.61 percent, compared to 3.35 percent in the prior-year quarter.
The increase in both dollars and percentage of net sales, on a GAAP and
non-GAAP basis, is primarily due to the addition of Technology
Solutions.
-- Worldwide operating income was $151.9 million, or 1.37 percent of net
sales compared to $103.1 million or 1.39 percent of net sales in the
prior-year quarter. Non-GAAP operating income was $216.0 million, an
increase of $93.8 million, or 77 percent, compared to the prior-year
quarter. As a percentage of net sales, non-GAAP operating income was
1.95 percent, an improvement of 31 basis points over the prior-year
quarter.
-- Americas: Operating income was $53.9 million, or 1.26 percent of net
sales, compared to $39.3 million, or 1.45 percent of net sales in
the prior-year quarter. Non-GAAP operating income was $85.1 million,
an increase of $37.7 million, or 80 percent, compared to the
prior-year quarter. As a percentage of net sales, non-GAAP operating
income was 1.98 percent, an improvement of 23 basis points over the
prior-year quarter.
-- Europe: Operating income was $100.4 million, or 1.55 percent of net
sales, compared to $66.7 million, or 1.41 percent of net sales in
the prior-year quarter. Non-GAAP operating income was $130.4
million, an increase of $52.7 million, or 68 percent, compared to
the prior-year quarter. As a percentage of net sales, non-GAAP
operating income was 2.02 percent, an improvement of 37 basis points
over the prior-year quarter.
-- Asia Pacific: Operating income was $5.7 million, or 1.69 percent of
net sales. Non-GAAP operating income was $7.5 million, or 2.21
percent of net sales.
-- Stock-based compensation expense was $8.2 million, an increase of
$5.2 million, compared to the prior-year quarter. This includes $1.2
million of acquisition and integration-related stock compensation
expense. 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).
-- Net income was $1.3 million, compared to $78.8 million in the prior-year
quarter. Net income for the current quarter includes $95.4 million of
income tax expenses incurred as a result of the transition tax and
impact on deferred taxes from the U.S. Tax Cuts and Jobs Act enacted in
December 2017. Non-GAAP net income was $134.7 million, an increase of
$47.7 million, or 55 percent, compared to the prior-year quarter.
-- Earnings per share on a diluted basis ("EPS") were $0.03, compared to
$2.22 in the prior year quarter. Non-GAAP EPS was $3.50, an increase of
$1.05, or 43 percent compared to the prior-year quarter.
-- Net cash generated by operations during the quarter was $657 million.
Financial Highlights for the Fiscal Year Ended January 31, 2018:
-- Net sales were $36.8 billion, an increase of 40 percent compared to the
prior year. The increase in net sales is primarily due to the addition
of Technology Solutions. On a constant currency basis, net sales
increased 38 percent.
-- Americas: Net sales were $16.0 billion (43 percent of worldwide net
sales), an increase of 54 percent compared to the prior year. The
increase in net sales is primarily due to the addition of Technology
Solutions. On a constant currency basis, net sales increased 53
percent.
-- Europe: Net sales were $19.7 billion (54 percent of worldwide net
sales), an increase of 24 percent compared to the prior year. The
increase in net sales is primarily due to the addition of Technology
Solutions. On a constant currency basis, net sales increased 21
percent.
-- Asia Pacific: Net sales were $1.1 billion (3 percent of worldwide
net sales). Asia Pacific net sales are attributed to the addition of
Technology Solutions.
-- Gross profit was $2.1 billion, an increase of $813.7 million, or 62
percent compared to the prior year. As a percentage of net sales, gross
profit was 5.75 percent compared to 4.96 percent in the prior year. The
increase in gross profit and gross margin percentage is primarily due to
the addition of Technology Solutions.
-- Selling, general and administrative expenses ("SG&A") were $1.6 billion,
or 4.38 percent of net sales, compared to $984.2 million, or 3.75
percent of net sales in the prior year. Non-GAAP SG&A was $1.5 billion,
an increase of $549.9 million, or 57 percent, compared to the prior
year. As a percentage of net sales, non-GAAP SG&A was 4.11 percent,
compared to 3.67 percent in the prior year. The increase in both dollars
and percentage of net sales, on a GAAP and non-GAAP basis, is primarily
due to the addition of Technology Solutions.
-- Worldwide operating income was $410.1 million, or 1.12 percent of net
sales compared to $291.9 million or 1.11 percent of net sales in the
prior year. Non-GAAP operating income was $602.7 million, an increase of
$263.8 million, or 78 percent, compared to the prior year. As a
percentage of net sales, non-GAAP operating income was 1.64 percent, an
improvement of 35 basis points over the prior year.
-- Americas: Operating income was $248.4 million, or 1.56 percent of
net sales, compared to $144.2 million, or 1.39 percent of net sales
in the prior year. Non-GAAP operating income was $333.7 million, an
increase of $173.7 million, or 109 percent, compared to the prior
year. As a percentage of net sales, non-GAAP operating income was
2.09 percent, an improvement of 55 basis points over the prior year.
-- Europe: Operating income was $173.6 million, or 0.88 percent of net
sales, compared to $161.6 million, or 1.02 percent of net sales in
the prior year. Non-GAAP operating income was $271.3 million, an
increase of $78.4 million, or 41 percent, compared to the prior
year. As a percentage of net sales, non-GAAP operating income was
1.38 percent compared to 1.22 percent in the prior year.
-- Asia Pacific: Operating income was $17.5 million, or 1.57 percent of
net sales. Non-GAAP operating income was $23.3 million, or 2.09
percent of net sales.
-- Stock-based compensation expense was $29.4 million, an increase of
$15.4 million, compared to the prior year. This includes $3.8
million of acquisition and integration-related stock compensation
expense. 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).
-- Net income was $116.6 million, compared to $195.1 million in the prior
year. Net income for the current fiscal year includes $95.4 million of
income tax expenses incurred as a result of the transition tax and
impact on deferred taxes from the U.S. Tax Cuts and Jobs Act. Non-GAAP
net income was $348.3 million, an increase of $123.0 million, or 55
percent, compared to the prior year.
-- Earnings per share on a diluted basis ("EPS") were $3.05, compared to
$5.51 in the prior year. Non-GAAP EPS was $9.11, an increase of $2.75,
or 43 percent compared to the prior year.
-- Net cash generated by operations during the fiscal year was $1.1
billion.
-- Return on invested capital for the trailing twelve months was 5 percent,
compared to 13 percent in the prior year. Adjusted return on invested
capital for the trailing twelve months was 12 percent, compared to 14
percent in the prior year.
"Our strong fourth-quarter performance completes a historic and transformational year for Tech Data," said Robert M. Dutkowsky, chairman and chief executive officer. "During fiscal 2018, we closed the acquisition of Avnet's Technology Solutions business and introduced the new Tech Data - a global company that is redefining technology distribution with a unique end-to-end product and services portfolio and highly specialized skills. Fiscal 2018 was also a year of significant strategic and financial progress, posting the highest sales, non-GAAP earnings and cash flow from operations in our history and revealing the enhanced earnings power and strong cash flow profile of the new Tech Data. This strong financial performance enabled us to pay down $850 million of debt and attain our post-acquisition target leverage ratio well ahead of our 18 to 24-month plan. Our employees, customers and vendor partners are excited about the value the new Tech Data brings to the market today, as well as the future promise of our company."
Business Outlook
Please note, the Business Outlook for worldwide net sales provided below is based on the new revenue recognition standard ("ASC 606") that the Company adopted as of February 1, 2018.
-- For the quarter ending April 30, 2018, the Company anticipates worldwide
net sales to be in the range of $8.0 billion to $8.3 billion.
-- For the quarter ending April 30, 2018, the Company anticipates EPS to be
in the range of $0.37 to $0.67 and non-GAAP EPS to be in the range of
$1.30 to $1.60.
-- This guidance assumes an average U.S. dollar to euro exchange rate of
$1.22 to EUR1.00.
-- This guidance assumes weighted average diluted shares outstanding of
38.6 million.
-- For the quarter ending April 30, 2018, the Company anticipates its
effective tax rate will be in the range of 27 percent to 29 percent. For
the fiscal year ending January 31, 2019, the Company expects its
effective tax rate will be in the range of 26 percent to 28 percent,
primarily related to the decrease in the U.S. federal income tax rate as
a result of the U.S. Tax Cuts and Jobs Act.
Webcast Details
Tech Data will hold a conference call today at 9:00 a.m. (ET) to discuss its financial results for the fourth quarter and fiscal year ended January 31, 2018. 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, acquisition-related financing expenses, changes in deferred tax valuation allowances and the impact of US 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
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, which may relate to the Technology Solutions business, 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.
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, 2017, 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. 107 on the Fortune 500® and has been named one of Fortune's "World's Most Admired Companies" for nine straight years. To find out more, visit www.techdata.com or follow us on Twitter, LinkedIn, and Facebook.
Contacts:
Charles V. Dannewitz, Executive Vice President,Chief Financial Officer
727-532-8028 (chuck.dannewitz@techdata.com)
Arleen Quiñones, Corporate Vice President, Investor Relations and Corporate Communications
727-532-8866 (arleen.quinones@techdata.com)
TECH DATA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Three months ended Year ended
January 31, January 31,
----------- -----------
2018 2017 2018 2017
Net sales $11,092,529 $7,427,510 $36,775,011 $26,234,876
Cost of products sold 10,475,668 7,056,483 34,659,390 24,932,949
---------- --------- ---------- ----------
Gross profit 616,861 371,027 2,115,621 1,301,927
Operating expenses:
Selling, general and administrative expenses 428,965 253,941 1,608,961 984,152
Acquisition, integration and restructuring expenses 34,341 13,969 136,272 28,966
LCD settlements and other, net - - (41,343) (4,142)
Value added tax assessments 1,652 - 1,652 1,049
----- --- ----- -----
464,958 267,910 1,705,542 1,010,025
------- ------- --------- ---------
Operating income 151,903 103,117 410,079 291,902
Interest expense 27,002 15,446 112,207 36,810
Other (income) expense, net 162 (1,152) (1,212) (1,669)
--- ------ ------ ------
Income before income taxes 124,739 88,823 299,084 256,761
Provision for income taxes 123,479 10,001 182,443 61,666
------- ------ ------- ------
Net income $1,260 $78,822 $116,641 $195,095
====== ======= ======== ========
Earnings per share:
Basic $0.03 $2.24 $3.07 $5.54
===== ===== ===== =====
Diluted $0.03 $2.22 $3.05 $5.51
===== ===== ===== =====
Weighted average common shares outstanding:
Basic 38,194 35,224 37,957 35,194
====== ====== ====== ======
Diluted 38,529 35,512 38,216 35,428
====== ====== ====== ======
TECH DATA CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(In thousands, except par value and share amounts)
January 31, January 31,
2018 2017
ASSETS (unaudited)
----------
Current assets:
Cash and cash equivalents $955,628 $2,125,591
Accounts receivable, net 5,783,666 3,047,927
Inventories 3,065,218 2,118,902
Prepaid expenses and other assets 288,178 119,906
------- -------
Total current assets 10,092,690 7,412,326
Property and equipment, net 279,091 74,239
Goodwill 969,168 199,021
Intangible assets, net 1,086,772 130,676
Other assets, net 224,915 115,604
------- -------
Total assets $12,652,636 $7,931,866
=========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $6,947,282 $3,844,532
Accrued expenses and other liabilities 917,174 493,199
Revolving credit loans and current maturities of long-term debt, net 132,661 373,123
------- -------
Total current liabilities 7,997,117 4,710,854
Long-term debt, less current maturities 1,505,248 989,924
Other long-term liabilities 228,779 61,200
------- ------
Total liabilities $9,731,144 $5,761,978
---------- ----------
Shareholders' equity:
Common stock, par value $0.0015; 200,000,000 shares authorized; 59,245,585 $89 $89
shares issued at Januray 31, 2018 and January 31, 2017
Additional paid-in capital 827,301 686,042
Treasury stock, at cost (21,083,972 and 24,018,983 shares at January 31, (940,124) (1,070,994)
2018 and January 31, 2017)
Retained earnings 2,745,934 2,629,293
Accumulated other comprehensive income (loss) 288,292 (74,542)
------- -------
Total shareholders' equity 2,921,492 2,169,888
--------- ---------
Total liabilities and shareholders' equity $12,652,636 $7,931,866
=========== ==========
TECH DATA CORPORATION AND SUBSIDIARIES
GAAP TO NON-GAAP RECONCILIATION
(In thousands)
Three months ended January 31, 2018
-----------------------------------
Americas?(1)? Europe?(1)? APAC?(1)? Stock Consolidated
Compensation
Expense
---
Net Sales $4,291,488 $6,463,007 $338,034 $11,092,529
========== ========== ======== ===========
GAAP operating income?(1)? $53,924 $100,439 $5,704 $(8,164) $151,903
Acquisition, integration and restructuring expenses 16,990 15,807 322 1,222 34,341
Acquisition-related intangible assets amortization expense 13,664 6,434 1,431 21,529
Value added tax assessments 494 1,158 1,652
Tax indemnifications 6,526 6,526
Total non-GAAP operating income adjustments $31,148 $29,925 $1,753 $1,222 $64,048
------- ------- ------ ------ -------
Non-GAAP operating income $85,072 $130,364 $7,457 $(6,942) $215,951
======= ======== ====== ======= ========
GAAP operating margin 1.26% 1.55% 1.69% 1.37%
Non-GAAP operating margin 1.98% 2.02% 2.21% 1.95%
?(1)? GAAP operating income does not include stock compensation expense at the regional level.
Three months ended January 31, 2017
-----------------------------------
Americas?(1)? Europe?(1)? Stock Consolidated
Compensation
Expense
---
Net Sales $2,707,286 $4,720,224 $7,427,510
========== ========== ==========
GAAP operating income?(1)? $39,316 $66,728 $(2,927) $103,117
Acquisition, integration and restructuring expenses 7,496 6,473 13,969
Acquisition-related intangible assets amortization expense 580 4,483 5,063
Total non-GAAP operating income adjustments $8,076 $10,956 $19,032
------ ------- -------
Non-GAAP operating income $47,392 $77,684 $(2,927) $122,149
======= ======= ======= ========
GAAP operating margin 1.45% 1.41% 1.39%
Non-GAAP operating margin 1.75% 1.65% 1.64%
?(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)
Year ended January 31, 2018
---------------------------
Americas?(1)? Europe?(1)? APAC?(1)? Stock Consolidated
Compensation
Expense
---
Net Sales $15,949,959 $19,713,942 $1,111,110 $36,775,011
=========== =========== ========== ===========
GAAP operating income?(1)? $248,350 $173,611 $17,499 $(29,381) $410,079
Acquisition, integration and restructuring expenses 75,563 56,192 753 3,764 136,272
Acquisition-related intangible assets amortization expense 51,994 32,509 5,015 89,518
LCD settlements and other, net (42,659) 1,316 - (41,343)
Value added tax assessments 494 1,158 - 1,652
Tax indemnifications 6,526 - 6,526
Total non-GAAP operating income adjustments $85,392 $97,701 $5,768 $3,764 $192,625
------- ------- ------ ------ --------
Non-GAAP operating income $333,742 $271,312 $23,267 $(25,617) $602,704
======== ======== ======= ======== ========
GAAP operating margin 1.56% 0.88% 1.57% 1.12%
Non-GAAP operating margin 2.09% 1.38% 2.09% 1.64%
?(1)? GAAP operating income does not include stock compensation expense at the regional level.
Year ended January 31, 2017
---------------------------
Americas?(1)? Europe?(1)? Stock Consolidated
Compensation
Expense
---
Net Sales $10,384,523 $15,850,353 $26,234,876
=========== =========== ===========
GAAP operating income?(1)? $144,246 $161,603 $(13,947) $291,902
Acquisition, integration and restructuring expenses 17,998 10,968 28,966
Acquisition-related intangible assets amortization expense 2,320 18,839 21,159
LCD settlements and other, net (4,142) - (4,142)
Value added tax assessments (407) 1,456 1,049
Total non-GAAP operating income adjustments $15,769 $31,263 $ - $47,032
------- ------- ------------------------- -------
Non-GAAP operating income $160,015 $192,866 $(13,947) $338,934
======== ======== ======== ========
GAAP operating margin 1.39% 1.02% 1.11%
Non-GAAP operating margin 1.54% 1.22% 1.29%
?(1)? GAAP operating income does not include stock compensation expense at the regional level.
Selling, general and administrative expenses ("SG&A") Three months ended January 31,
------------------------------
2018 2017
---- ----
Net Sales $11,092,529 $7,427,510
=========== ==========
GAAP SG&A 428,965 253,941
Tax indemnifications (6,526) -
Acquisition-related intangible assets amortization expense (21,529) (5,063)
Non-GAAP SG&A $400,910 $248,878
======== ========
GAAP SG&A percentage of net sales 3.87% 3.42%
Non- GAAP SG&A percentage of net sales 3.61% 3.35%
Year ended January 31,
----------------------
2018 2017
---- ----
Net Sales $36,775,011 $26,234,876
=========== ===========
GAAP SG&A 1,608,961 984,152
Tax indemnifications (6,526) -
Acquisition-related intangible assets amortization expense (89,518) (21,159)
Non-GAAP SG&A $1,512,917 $962,993
========== ========
GAAP SG&A percentage of net sales 4.38% 3.75%
Non- GAAP SG&A percentage of net sales 4.11% 3.67%
Three months ended January 31,
------------------------------
2018 2017
---- ----
Net Income Diluted EPS Net Income Diluted EPS
GAAP Results $1,260 $0.03 $78,822 $2.22
Acquisition, integration and restructuring expenses 34,341 0.89 13,969 0.39
Acquisition-related intangible assets amortization expense 21,529 0.56 5,063 0.14
Acquisition-related financing expenses - - 8,476 0.24
Value added tax assessments and related interest expense 2,568 0.07 - -
Tax indemnifications 6,526 0.17 - -
Income tax effect of tax indemnifications (6,526) (0.17) - -
Income tax effect of other adjustments above (21,565) (0.56) (6,864) (0.19)
Change in deferred tax valuation allowances 1,224 0.03 (12,455) (0.35)
Impact of US tax reform 95,369 2.48 - -
Non-GAAP results $134,726 $3.50 $87,011 $2.45
======== ===== ======= =====
Year ended January 31,
----------------------
2018 2017
---- ----
Net Income Diluted EPS Net Income Diluted EPS
GAAP Results $116,641 $3.05 $195,095 $5.51
Acquisition, integration and restructuring expenses 136,272 3.57 28,966 0.82
Acquisition-related intangible assets amortization expense 89,518 2.34 21,159 0.60
LCD settlements and other, net (41,020) (1.07) (4,142) (0.12)
Value added tax assessments and related interest expense 2,568 0.06 1,386 0.04
Acquisition-related financing expenses 8,807 0.23 11,890 0.33
Tax indemnifications 6,526 0.17 - -
Income tax effect of tax indemnifications (6,526) (0.17) - -
Income tax effect of other adjustments above (61,113) (1.60) (16,652) (0.47)
Change in deferred tax valuation allowances 1,224 0.03 (12,455) (0.35)
Impact of US tax reform 95,369 2.50 - -
Non-GAAP results $348,266 $9.11 $225,247 $6.36
======== ===== ======== =====
Return on Invested Capital (ROIC)
Twelve months ended January 31,
TTM Net Operating Profit After Tax (NOPAT)*: 2018 2017
---- ----
Operating income $410,079 $291,902
Income taxes on operating income?(1)? (250,151) (70,106)
NOPAT $159,928 $221,796
======== ========
Average Invested Capital:
Short-term debt (5-qtr average) $314,154 $157,496
Long-term debt (5-qtr average) 1,580,778 407,275
Shareholders' Equity (5-qtr average) 2,605,736 2,102,222
--------- ---------
Total average capital 4,500,668 2,666,993
Less: Cash (5-qtr average) (1,107,734) (974,221)
---------- --------
Average invested capital less average cash $3,392,934 $1,692,772
========== ==========
ROIC 5% 13%
* Trailing Twelve Months is abbreviated as TTM.
?(1)? Income taxes on operating income was calculated using the trailing 12 months effective tax rate during the respective periods.
Adjusted Return on Invested Capital (ROIC)
Twelve months ended January 31,
TTM Net Operating Profit After Tax (NOPAT), as adjusted *: 2018 2017
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Non-GAAP operating income?(1)? $602,704 $338,934
Income taxes on non-GAAP operating income?(2)? (184,370) (97,354)
NOPAT, as adjusted $418,334 $241,580
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Average Invested Capital, as adjusted:
Short-term debt (5-qtr average) $314,154 $157,496
Long-term debt (5-qtr average) 1,580,778 407,275
Shareholders' Equity (5-qtr average) 2,605,736 2,102,222
Tax effected impact of non-GAAP adjustments?(3)? 94,193 1,157
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Total average capital, as adjusted 4,594,861 2,668,150
Less: Cash (5-qtr average) (1,107,734) (974,221)
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Average invested capital less average cash $3,487,127 $1,693,929
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Adjusted ROIC 12% 14%
* Trailing Twelve Months is abbreviated as TTM.
?(1)? Represents operating income as adjusted to exclude acquisition, integration and restructuring expenses, LCD settlements and other, net, value added tax assessments and acquisition-related intangible assets
amortization expense
?(2)? Income taxes on non-GAAP operating income was calculated using the trailing 12 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.
Guidance Reconciliation
Three months ending April 30, 2018
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Low end of High end of
guidance range guidance range
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Earnings per share - diluted $0.37 $0.67
Acquisition, integration and restructuring expenses 0.62 0.62
Acquisition-related intangible assets amortization expense 0.61 0.61
Income tax effect of the above adjustments (0.30) (0.30)
Non-GAAP earnings per share - diluted $1.30 $1.60
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SOURCE Tech Data Corporation
