Cdw Corporation · NASDAQ:CDW
Cdw — Q1 2015 Earnings Presentation
18 slides from Cdw's earnings presentation, May 7, 2015
Slide 1: CDW Corporation Webcast Conference Call
CDW Corporation Webcast Conference Call May 7, 2015 CDW.com | 800.800.4239
Slide 2: Today's Agenda
Today's Agenda ▪ 1st Quarter Results ▪ Key Performance Drivers ▪ Financial Results ▪ Outlook ▪ Q&A 2
Slide 3: Disclaimers
Disclaimers This presentation contains forward-looking statements, which are any predications, projections, or other statements about future events. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could materially differ
Slide 4: Excellent 1st Quarter Financial Performance
Excellent 1st Quarter Financial Performance ▪ Net sales up 3.9% to $2.76 billion ▪ Adjusted EBITDA up 8.8% to $210.8 million ▪ Non-GAAP Net Income Per Diluted Share up 19.5% to $0.56 4
Slide 5: Results Demonstrate Strength of Model
Results Demonstrate Strength of Model Highlights power of: ▪ Balanced portfolio of channels ▪ Broad product and solution suite ▪ Impact of mix on profitability 5
Slide 6: Balanced Portfolio Drove Topline
Balanced Portfolio Drove Topline (Unaudited) ($ in millions) Three Months Ended March 31, Corporate: 2015 2014 % Change * Medium / Large $ 1,313.9 $ 1,274.8 3.1% Small Business 260.1 230.8 12.7 Total Corporate $ 1,574.0 $ 1,505.6 4.5 Public: Government $ 288.6 $ 254.2 13.5 Education 343.6 321.6 6.8
Slide 7: First Quarter Financial Results
First Quarter Financial Results (Unaudited) ($ in millions, except per share amounts) Three Months Ended March 31, 2015 2014 % Change Net Sales $ 2,755.2 $ 2,652.3 3.9% Avg Daily Net Sales $ 43.7 $ 42.1 3.9 Gross Profit $ 456.5 $ 425.2 7.4 % of Net Sales 16.6% 16.0% SG&A/Advertising $ 304.9 $ 289.4
Slide 8: First Quarter Adjusted SG&A
First Quarter Adjusted SG&A (Unaudited) ($ in millions) Three Months Ended March 31, 2015 2014 % Change Reported SG&A, including advertising: $ 304.9 $ 289.4 Adjustments: Secondary-offering-related expenses — (0.4) Non-cash equity-based compensation (4.7) (3.3) Other expenses (1) (2.0) (2.2) Litigat
Slide 9: Adjusted EBITDA
Adjusted EBITDA (Unaudited) ($ in millions) Three Months Ended March 31, 2015 2014 Adjusted EBITDA * $ 210.8 $ 193.7 Adjustments to reconcile Adjusted EBITDA to income from operations (1): Depreciation and amortization (2) (52.5) (52.0) Non-cash equity-based compensation (4.7) (3.3) Secondary-offeri
Slide 10: Interest, Taxes and Non-GAAP Net Income
Interest, Taxes and Non-GAAP Net Income (Unaudited) ($ in millions, except per share amounts) Three Months Ended March 31, 2015 2014 % Change Interest expense, net $ (44.8) $ (50.1) (10.7)% Other income, net $ 4.5 $ 0.5 nm* Income tax expense $ (32.3) $ (29.9) 8.1% Net income $ 54.7 $ 50.9 7.5% Non-
Slide 11: Non-GAAP Net Income
Non-GAAP Net Income (Unaudited) ($ in millions) Three Months Ended March 31, 2015 2014 Net income $ 54.7 $ 50.9 Amortization of intangibles (1) 40.3 40.3 Non-cash equity-based compensation 4.7 3.3 Net loss on extinguishments of long-term debt 24.3 5.4 Interest expense adjustment related to extinguis
Slide 12: Debt and ABL Availability
Debt and ABL Availability (Unaudited) ($ in millions) 3/31/2015 12/31/2014 3/31/2014 Cash and Cash Equivalents $ 447.4 $ 344.5 $ 306.7 Total Debt $ 3,206.2 $ 3,190.0 $ 3,172.4 Senior Secured Debt $ 1,509.7 $ 1,513.5 $ 1,850.1 Net Debt (Total Debt net of Cash and Cash Equivalents) $ 2,758.8 $ 2,845.5
Slide 13: Cash Conversion Cycle
Cash Conversion Cycle (Unaudited) 3/31/2015 12/31/2014 3/31/2014 Days of sales outstanding (DSO) * 45 42 44 Days of supply in inventory (DIO) * 13 13 14 Days purchases outstanding (DPO) * (37) (34) (36) Cash Conversion Cycle * 21 21 22 * Based on a rolling three-month average. 13
Slide 14: Four Capital Allocation Priorities
Four Capital Allocation Priorities Priorities Objectives Actions Increase Dividends Annually 59% increase to $0.27/share Target 30% payout of FCF in 5 years Maintain Net Leverage Ratio (1) ~2.5 to 3.0 times Currently at 3.0x (2) Net Leverage Ratio Supplement Organic Growth Minority investment with M
Slide 15: Capital Allocation Priorities Support Refreshed Medium Term Targets
Capital Allocation Priorities Support Refreshed Medium Term Targets Through 2015 2016-2018 Net Sales U.S. IT growth + U.S. IT growth +200 - Growth 200-300bps 300bps Adjusted Mid-7% Margin Mid-7% Margin EBITDA Leverage Deleverage ~1/3 to Maintain net debt/adj. 1/2x per year until 3.0x EBITDA ratio at
Slide 16: Thoughts on Modeling 2015
Thoughts on Modeling 2015 For P&L currently look for: ▪ First half/second half net sales balance ~47-48/52-53% ▪ Gross margin for balance of the year below Q1 level ▪ Q2 adjusted SG&A growth higher than sales growth ▪ Full year Adjusted EBITDA margin in the mid-7% range ▪ Full year book interest in
Slide 17: Questions and Answers
al Questions and Answers DU PEOPLE WHO GET IT 4 |
Slide 18: Adjusted EBITDA to Net Income Reconciliation
Adjusted EBITDA to Net Income Reconciliation (Unaudited) ($ in millions) Three Months Ended March 31, 2015 2014 Net income $ 54.7 $ 50.9 Depreciation and amortization 52.5 52.0 Income tax expense 32.3 29.9 Interest expense, net 44.8 50.1 EBITDA 184.3 182.9 Adjustments: Non-cash equity-based compensa