CDW Reports First Quarter 2021 Earnings
CDW Corporation (Nasdaq:CDW) reported strong Q1 2021 results, with net sales reaching $4,838 million, a 10.2% increase from $4,389 million in Q1 2020. Gross profit grew to $795 million, a 5.1% rise year-over-year, while operating income surged 31.6% to $323 million. Non-GAAP net income per diluted share rose 26.2% to $1.74. CDW's board approved a quarterly dividend of $0.40, set for June 10, 2021. The company anticipates low double-digit growth in Non-GAAP net income per diluted share for 2021, exceeding previous market growth expectations.
- Net sales increased by 10.2% to $4,838 million.
- Gross profit rose 5.1% to $795 million.
- Operating income increased by 31.6% to $323 million.
- Non-GAAP net income per diluted share grew by 26.2% to $1.74.
- Quarterly dividend of $0.40 approved for June 2021.
- None.
CDW Corporation (Nasdaq:CDW):
(Dollars in millions, except per share amounts) |
Three Months
|
Three Months
|
% Chg. |
|||||
Net Sales |
$ |
4,837.5 |
|
$ |
4,389.2 |
|
10.2 |
|
Average Daily Sales1 |
76.8 |
|
68.6 |
|
12.0 |
|
||
Gross Profit |
795.2 |
|
756.5 |
|
5.1 |
|
||
Operating Income |
323.4 |
|
245.8 |
|
31.6 |
|
||
Net Income |
232.6 |
|
167.9 |
|
38.6 |
|
||
Non-GAAP Operating Income2 |
367.7 |
|
303.9 |
|
21.0 |
|
||
Net Income per Diluted Share |
$ |
1.63 |
|
$ |
1.16 |
|
40.3 |
|
Non-GAAP Net Income per Diluted Share2 |
$ |
1.74 |
|
$ |
1.38 |
|
26.2 |
|
1 There were 63 and 64 selling days for the three months ended March 31, 2021 and 2020, respectively. |
||||||||
2 Non-GAAP measures used in this release that are not based on accounting principles generally accepted in the United States of America ("US GAAP") are each defined and reconciled to the most directly comparable US GAAP measure in the attached schedules. |
||||||||
CDW Corporation (Nasdaq: CDW), a leading multi-brand provider of information technology solutions to business, government, education and healthcare customers in the United States, the United Kingdom and Canada, today announced first quarter 2021 results. CDW also announced the approval by its Board of Directors of a quarterly cash dividend of
“The diversity of our customer end markets and our solutions portfolio drove our record first quarter results, and reinforced confidence in our strategy. During the quarter, customers focused on remote enablement and investments for the future. Technology spend rebounded in our channels most impacted last year due to the COVID-19 pandemic,” said Christine A. Leahy, president and chief executive officer, CDW. “I am extremely proud of the commitment, agility and resolve of our coworkers, who continued to successfully deliver customer outcomes and capabilities across the full technology solutions stack and lifecycle.”
“Strong operating results were amplified by share repurchases, delivering a 26 percent increase in Non-GAAP net income per diluted share," said Collin B. Kebo, chief financial officer, CDW. “Given this quarter's results and our expectations for the balance of the year, we now expect 2021 constant currency Non-GAAP net income per diluted share growth of low double-digits."
“We expect to exceed our previous 2021 outlook of outpacing the US IT market growth by 200 to 300 basis points on a constant currency basis. We will continue to execute our strategy, invest in the business, and be laser-focused on meeting the needs of our more than 250,000 customers in the United States, the United Kingdom and Canada and remaining the partner of choice for more than 1,000 leading and emerging technology brands as the technology market continues to evolve," concluded Leahy.
First Quarter of 2021 Highlights:
Total Net sales in the first quarter of 2021 were
-
Total Corporate segment Net sales of
$1,806 million , 4.0 percent lower than 2020. -
Total Small Business segment Net sales of
$433 million , 12.3 percent higher than 2020. -
Total Public segment Net sales of
$1,922 million , 28.0 percent higher than 2020. Public results were driven by an increase in Net sales to Education customers of 101.2 percent. Net sales to Government and Healthcare customers decreased 7.8 percent and 2.3 percent, respectively. -
Net sales for CDW's UK and Canadian operations, combined as "Other" for financial reporting purposes, were
$678 million , 22.6 percent higher than 2020.
Gross profit in the first quarter of 2021 was
Total selling and administrative expenses were
Operating income was
Net interest expense was
The effective tax rate was 19.5 percent in the first quarter of 2021 compared to 20.7 percent in the first quarter 2020, which resulted in tax expense of
Net income was
Weighted average diluted shares outstanding were 143 million for the first quarter of 2021, compared to 145 million for the first quarter of 2020. Net income per diluted share for the first quarter of 2021 was
Forward-Looking Statements
This release contains "forward-looking statements" within the meaning of the federal securities laws. All statements other than statements of historical fact are forward-looking statements. These statements relate to analyses and other information, which are based on forecasts of future results or events and estimates of amounts not yet determinable. These statements also relate to our future prospects, developments and business strategies. We claim the protection of The Private Securities Litigation Reform Act of 1995 for all forward-looking statements in this release.
These forward-looking statements are identified by the use of terms and phrases such as "anticipate," "assume," "believe," "estimate," "expect," "goal," "intend," "plan," "potential," "predict," "project," "target" and similar terms and phrases or future or conditional verbs such as "could," "may," "should," "will," and "would." However, these words are not the exclusive means of identifying such statements. Although we believe that our plans, intentions and other expectations reflected in or suggested by such forward-looking statements are reasonable, we cannot assure you that we will achieve those plans, intentions or expectations. All forward-looking statements are subject to risks and uncertainties that may cause actual results or events to differ materially from those that we expected.
Important factors that could cause actual results or events to differ materially from our expectations, or cautionary statements, are disclosed under the section entitled "Risk Factors" included in our Annual Report on Form 10-K for the year ended December 31, 2020 and from time to time in our subsequent Quarterly Reports on Form 10-Q and our other US Securities and Exchange Commission ("SEC") filings. These factors include, among others, the COVID-19 pandemic and actions taken in response thereto and the associated impact on our business, results of operations, cash flows, financial condition and liquidity; CDW's relationships with vendor partners and terms of their agreements; continued innovations in hardware, software and services offerings by CDW's vendor partners; substantial competition that could reduce CDW's market share; the continuing development, maintenance and operation of CDW's information technology systems; potential breaches of data security and failure to protect our information technology systems from cybersecurity threats; potential failures to provide high-quality services to CDW's customers; potential losses of any key personnel; potential adverse occurrences at one of CDW's primary facilities or customer data centers; increases in the cost of commercial delivery services or disruptions of those services; CDW's exposure to accounts receivable and inventory risks; future acquisitions or alliances; fluctuations in CDW's operating results; fluctuations in foreign currency; global and regional economic and political conditions; potential interruptions of the flow of products from suppliers; decreases in spending on technology products and services; potential failures to comply with Public segment contracts or applicable laws and regulations; current and future legal proceedings and audits; changes in laws, including regulations or interpretations thereof; CDW's level of indebtedness and ability to generate sufficient cash to service such indebtedness; restrictions imposed by agreements relating to CDW's indebtedness on its operations and liquidity; changes in, or the discontinuation of, CDW's share repurchase program or dividend payments; and other risk factors or uncertainties identified from time to time in CDW's filings with the SEC. All written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by the cautionary statements contained in the section entitled "Risk Factors" and elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2020 as well as other cautionary statements that are made from time to time in our other SEC filings and public communications. You should evaluate all forward-looking statements made in this release in the context of these risks and uncertainties.
We caution you that the important factors referenced above may not reflect all of the factors that could cause actual results or events to differ from our expectations. In addition, we cannot assure you that we will realize the results or developments we expect or anticipate or, even if substantially realiz
FAQ
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