February 16, 2011

CDW Reports Full Year and Fourth Quarter Results for 2010 - Company Achieves Record Annual Sales and Adjusted EBITDA

Full year 2010 highlights:

  • Record sales of $8.801 billion, up 22.9 percent year-over-year
  • Record Adjusted EBITDA of $601.8 million, up 29.3 percent year-over-year
  • Sales growth significantly faster than market

Fourth quarter 2010 highlights:

  • Sales of $2.269 billion, up 15.5 percent year-over-year
  • Fourth consecutive quarter of year-over-year double digit sales growth
  • Adjusted EBITDA of $145.9 million, up 20.9 percent year-over-year
  • Reduced 2014-2015 aggregate debt maturities from $3.4 billion to $1.7 billion

VERNON HILLS, Ill. – February 16, 2011 – CDW Corporation, a leading multi-brand technology solutions provider to business, government and education, today announced fourth quarter and full year 2010 results.

“2010 was a record year for sales, gross profit and Adjusted EBITDA. By staying focused on the customer throughout the downturn, we were able to grow significantly faster than the IT market when customer spending picked up,” said John A. Edwardson, chairman and chief executive officer. “I’m particularly proud of our 6200 plus coworkers, who provide industry leading customer service and delivered significant productivity improvements in 2010 as measured by sales per coworker.”

“We achieved strong double digit revenue growth across our corporate and public segments, and in our hardware, software and services categories,” continued Thomas E. Richards, president and chief operating officer. “We delivered these strong top-line results while improving our Adjusted EBITDA margin from 6.5 percent in 2009 to 6.8 percent in 2010 and making investments in the business and coworkers.”

“As we enter 2011, we plan to accelerate our investment in selling resources and service delivery capabilities so that we continue to profitably outpace market growth,” added Edwardson.

Fourth Quarter of 2010:

Total sales in the fourth quarter of 2010 were $2.269 billion compared to $1.964 billion in the fourth quarter of 2009, an increase of 15.5 percent. Average daily sales in the fourth quarter of 2010 were $36.0 million compared to $31.2 million in the fourth quarter of 2009, also representing a 15.5 percent increase. There were 63 billing days in both the fourth quarter of 2010 and the fourth quarter of 2009.

  • Total Corporate segment sales in the fourth quarter of 2010 were $1.299 billion compared to $1.087 billion in the fourth quarter of 2009, representing an increase of 19.5 percent. Sales growth in the Corporate segment was driven by strong performance in both the Medium/Large sales channel and our Small Business sales channel.
  • Total Public segment sales in the fourth quarter of 2010 were $858 million compared to $790 million in the fourth quarter of 2009, representing an increase of 8.6 percent. Sales growth in our Public segment was led by especially strong performance in our Healthcare sales channel.

Gross profit for the fourth quarter of 2010 was $356.8 million compared to $302.6 million in the fourth quarter of 2009, representing an increase of 17.9 percent. Gross profit margin was 15.7 percent in the fourth quarter of 2010 compared to 15.4 percent in the same period of 2009, as the year-over-year gross margin percent improved for the third consecutive quarter. The increase in gross profit margin was primarily due to favorable price/mix.

Total SG+A including Advertising expense was $275.6 million in the fourth quarter of 2010 compared to $244.0 million in the fourth quarter of 2009, representing an increase of 12.9 percent. The increase in total SG+A expenses in the fourth quarter of 2010 was primarily due to increased sales and other variable compensation costs such as incentive bonuses consistent with higher sales and gross profit along with increased advertising expense.

Adjusted EBITDA was $145.9 million in the fourth quarter of 2010 compared to $120.6 million in the fourth quarter of 2009, representing an increase of 20.9 percent. Adjusted EBITDA margin was 6.4 percent in the fourth quarter of 2010 compared to 6.1 percent in the fourth quarter of 2009.

The company was able to take advantage of favorable credit markets in the fourth quarter to issue $500 million of 8% senior secured notes due 2018, the proceeds of which issuance were used to pay down the company¡¦s Term Loan due 2014. In addition, the company was able simultaneously to extend the maturity of $1.1 billion of its remaining Term Loan from 2014 to 2017. The combination of these transactions reduced the company¡¦s 2014-2015 aggregate debt maturities from $3.4 billion to $1.7 billion which provides the company with additional financial flexibility.

Full Year 2010:

Total sales for 2010 were an all time record $8.801 billion, compared to $7.163 billion in 2009, an increase of 22.9 percent. Average daily sales for 2010 were $34.7 million compared to $28.2 million in 2009, also representing a 22.9 percent increase. There were 254 billing days in both 2010 and 2009.

  • Total Corporate segment sales in 2010 were $4.834 billion compared to $3.818 billion in 2009, representing an increase of 26.6 percent. Sales growth in the Corporate segment was driven by strong performance in both our Medium/Large sales channel and the Small Business sales channel.
  • Total Public segment sales in 2010 were $3.561 billion compared to $3.035 billion in 2009, representing an increase of 17.3 percent. Sales growth in the Public segment was lead by especially strong performance in our Healthcare sales channel.
  • Major product categories that achieved some of the strongest year-over-year growth in 2010 were software, netcomm, and notebook/mobile devices.

Gross profit for 2010 was $1.391 billion compared to $1.133 billion in 2009, representing an increase of 22.8 percent. Gross profit margin was 15.8 percent in both 2010 and 2009, as the year-over-year gross margin percent improved in the last three quarters of 2010, after a challenging comparison in the first quarter of 2010. The increase in gross profit margin in the last three quarters of the year was primarily due to favorable price/mix.

Total SG+A including Advertising expense was $1038.1 million in 2010 as compared to $923.0 million in 2009, representing an increase of 12.5 percent. The increase in total SG+A expenses in 2010 was primarily due to increased sales and other variable compensation costs such as incentive bonuses consistent with higher sales and gross profit.

Adjusted EBITDA reached an all time record $601.8 million in 2010 compared to $465.4 million in 2009, representing an increase of 29.3 percent. The Adjusted EBITDA margin was 6.8 percent in 2010 compared to 6.5 percent in 2009.

Forward Looking Statement

The information contained in this release contains “forward-looking statements” within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements may involve risks and uncertainties that could cause actual results to differ materially from those described in such statements. These risks and uncertainties include, among others, the risk factors or uncertainties identified from time to time in CDW Corporation’s filings with the Securities and Exchange Commission (“SEC”). Although CDW believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Reference is made to a more complete discussion of forward-looking statements and applicable risks contained under the captions “Forward-Looking Statements” and “Risk Factors” in CDW Corporation’s Registration Statement on Form S-4 (333-169258) filed with the SEC and declared effective by the SEC on October 25, 2010 and other subsequent filings with the SEC. CDW undertakes no obligation to update or revise any of its forward-looking statements, whether as a result of new information, future events or otherwise.

Non-GAAP Financial Information

EBITDA and Adjusted EBITDA are non-GAAP financial measures. We believe that EBITDA and Adjusted EBITDA provide helpful information with respect to the company’s operating performance and cash flows including CDW’s ability to meet our future debt service, capital expenditures, and working capital requirements. Adjusted EBITDA also provides helpful information as it is the primary measure used in certain financial covenants contained in the company’s credit agreements. Reconciliations of EBITDA and Adjusted EBITDA to net loss for the three months and the full year ended December 31, 2010 and 2009 are included in the attached schedules.

About CDW

CDW is a leading provider of technology solutions for business, government, education and healthcare. Ranked No. 38 on Forbes’ list of America’s Largest Private Companies, CDW features dedicated account managers who help customers choose the right technology products and services to meet their needs. The company’s technology specialists offer expertise in designing customized solutions, while its advanced technology engineers assist customers with the implementation and long-term management of those solutions. Areas of focus include software, network communications, notebooks/mobile devices, data storage, video monitors, desktops, and printers and solutions such as virtualization, collaboration, security, mobility, data center optimization and cloud computing. CDW was founded in 1984 and employs more than 6,200 coworkers. In 2010, the company generated sales of $8.8 billion. For more information, visit CDW.com.

A live web cast of CDW’s management discussion of the fourth quarter and 2010 results will be available at www.cdw.com/investor. The web cast will begin today, February 16, 2011, at 11:00 a.m. ET / 10:00 a.m. CT. An audio replay of the call will also be available at www.cdw.com/investor for approximately two weeks.

Additional financial and operational data is provided in a series of supplemental slides available at www.cdw.com/investor.



For more information about CDW:

Visit CDW on the Internet at http://www.cdw.com. Contact CDW Investor Relations via the Internet at investorrelations@cdw.com.

CDW is a registered trademark of CDW LLC.

Investor Inquiries Media Inquiries
Collin Kebo Mary Viola
Vice President, Financial Planning Sr. Director, Corporate Communications
847-419-6328 847-968-0743
investorrelations@cdw.com  


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