Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - CDW Corp | d8k.htm |
Exhibit 99
CDW CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in millions)
(unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||
| 2010 | 2009 | % Change | 2010 | 2009 | % Change | |||||||||||||||||||
| Net sales |
$ | 2,374.4 | $ | 1,963.4 | 20.9 | % | $ | 6,531.8 | $ | 5,198.1 | 25.7 | % | ||||||||||||
| Cost of sales |
2,006.0 | 1,662.1 | 20.7 | 5,497.7 | 4,367.8 | 25.9 | ||||||||||||||||||
| Gross profit |
368.4 | 301.3 | 22.3 | 1,034.1 | 830.3 | 24.5 | ||||||||||||||||||
| Selling and administrative expenses |
235.8 | 203.4 | 15.9 | 689.7 | 599.4 | 15.1 | ||||||||||||||||||
| Advertising expense |
28.0 | 27.6 | 1.4 | 72.9 | 79.6 | (8.4 | ) | |||||||||||||||||
| Goodwill impairment |
— | — | — | — | 235.0 | nm | ||||||||||||||||||
| Income (loss) from operations |
104.6 | 70.3 | 48.8 | 271.5 | (83.7 | ) | nm | |||||||||||||||||
| Interest expense, net |
(105.1 | ) | (108.3 | ) | 3.0 | (288.7 | ) | (317.4 | ) | 9.1 | ||||||||||||||
| Gain on extinguishment of long-term debt |
— | — | — | 9.2 | — | nm | ||||||||||||||||||
| Other income, net |
0.2 | 0.4 | (61.8 | ) | 0.3 | 2.7 | (89.9 | ) | ||||||||||||||||
| Loss before income taxes |
(0.3 | ) | (37.6 | ) | 99.1 | (7.7 | ) | (398.4 | ) | 98.1 | ||||||||||||||
| Income tax benefit |
— | 12.6 | (99.6 | ) | 2.6 | 62.4 | (95.8 | ) | ||||||||||||||||
| Net loss |
$ | (0.3 | ) | $ | (25.0 | ) | 98.9 | % | $ | (5.1 | ) | $ | (336.0 | ) | 98.5 | % | ||||||||
Page 1 of 6
CDW CORPORATION AND SUBSIDIARIES
EBITDA AND ADJUSTED EBITDA
(dollars in millions)
(unaudited)
We have included reconciliations of EBITDA and Adjusted EBITDA for the three and nine months ended September 30, 2010 and 2009 and the trailing twelve months ended September 30, 2010 below. EBITDA is defined as earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA, which is a measure defined in our credit agreements, means EBITDA adjusted for certain items which are described in the table below. Both EBITDA and Adjusted EBITDA are considered non-GAAP financial measures. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position, or cash flows that either excludes or includes amounts that are not normally included or excluded in the most directly comparable measure calculated and presented in accordance with GAAP. We believe that EBITDA and Adjusted EBITDA provide helpful information with respect to our operating performance and cash flows including our 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 our credit agreements.
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||
| 2010 | 2009 | % Change | 2010 | 2009 | % Change | |||||||||||||||||||
| Net loss |
$ | (0.3 | ) | $ | (25.0 | ) | $ | (5.1 | ) | $ | (336.0 | ) | ||||||||||||
| Depreciation and amortization |
53.3 | 55.2 | 158.5 | 165.1 | ||||||||||||||||||||
| Income tax benefit |
— | (12.6 | ) | (2.6 | ) | (62.4 | ) | |||||||||||||||||
| Interest expense, net |
105.1 | 108.3 | 288.7 | 317.4 | ||||||||||||||||||||
| EBITDA |
158.1 | 125.9 | 439.5 | 84.1 | ||||||||||||||||||||
| Adjustments: |
||||||||||||||||||||||||
| Goodwill impairment |
— | — | — | 235.0 | ||||||||||||||||||||
| Non-cash equity-based compensation |
(1.0 | ) | 3.9 | 7.4 | 12.1 | |||||||||||||||||||
| Sponsor fee |
1.3 | 1.3 | 3.8 | 3.8 | ||||||||||||||||||||
| Consulting and debt-related professional fees |
2.8 | 3.8 | 8.4 | 10.4 | ||||||||||||||||||||
| Gain on extinguishment of long-term debt |
— | — | (9.2 | ) | — | |||||||||||||||||||
| Other adjustments (1) |
2.4 | (0.1 | ) | 6.1 | (0.7 | ) | ||||||||||||||||||
| Adjusted EBITDA |
$ | 163.6 | $ | 134.8 | 21.4 | % | $ | 456.0 | $ | 344.7 | 32.3 | % | ||||||||||||
| (1) | Other adjustments include certain severance and retention costs, equity investment gains and losses and the gain related to the sale of Informacast software and equipment in the first quarter of 2009. |
| Twelve
Months Ended September 30, 2010 |
||||
| Net loss |
$ | (42.4 | ) | |
| Depreciation and amortization |
211.6 | |||
| Income tax benefit |
(28.1 | ) | ||
| Interest expense, net |
402.9 | |||
| EBITDA |
544.0 | |||
| Adjustments: |
||||
| Goodwill impairment |
6.8 | |||
| Non-cash equity-based compensation |
11.3 | |||
| Sponsor fee |
5.0 | |||
| Consulting and debt-related professional fees |
12.1 | |||
| Gain on extinguishment of long-term debt |
(9.2 | ) | ||
| Other adjustments (2) |
6.6 | |||
| Adjusted EBITDA |
$ | 576.6 | ||
| (2) | Other adjustments include certain severance and retention costs and equity investment gains and losses. |
Page 2 of 6
CDW CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in millions)
(unaudited)
| September 30, 2010 |
December 31, 2009 |
September 30, 2009 |
||||||||||
| Assets |
||||||||||||
| Current assets: |
||||||||||||
| Cash, cash equivalents and marketable securities |
$ | 67.0 | $ | 88.0 | $ | 265.5 | ||||||
| Accounts receivable, net of allowance for doubtful accounts of $5.0, $6.3, and $7.5, respectively |
1,119.8 | 1,006.7 | 965.6 | |||||||||
| Merchandise inventory |
304.9 | 257.8 | 261.3 | |||||||||
| Miscellaneous receivables |
145.5 | 127.8 | 139.3 | |||||||||
| Deferred income taxes |
23.2 | 40.0 | 38.9 | |||||||||
| Prepaid expenses and other |
49.2 | 37.5 | 48.6 | |||||||||
| Total current assets |
1,709.6 | 1,557.8 | 1,719.2 | |||||||||
| Property and equipment, net |
147.7 | 165.8 | 173.8 | |||||||||
| Goodwill |
2,208.1 | 2,207.4 | 2,206.9 | |||||||||
| Other intangible assets, net |
1,829.6 | 1,951.4 | 1,992.1 | |||||||||
| Deferred financing costs, net |
77.0 | 91.2 | 84.3 | |||||||||
| Other assets |
2.9 | 2.4 | 2.4 | |||||||||
| Total assets |
$ | 5,974.9 | $ | 5,976.0 | $ | 6,178.7 | ||||||
| Liabilities and Shareholders’ Deficit |
||||||||||||
| Current liabilities: |
||||||||||||
| Accounts payable |
$ | 587.0 | $ | 292.3 | $ | 437.5 | ||||||
| Current maturities of long-term debt and capital leases |
22.6 | 22.6 | 22.6 | |||||||||
| Accrued expenses and other liabilities |
396.7 | 319.6 | 342.0 | |||||||||
| Total current liabilities |
1,006.3 | 634.5 | 802.1 | |||||||||
| Long-term liabilities: |
||||||||||||
| Debt and capital leases |
4,270.5 | 4,599.3 | 4,605.0 | |||||||||
| Deferred income taxes |
652.4 | 694.7 | 725.9 | |||||||||
| Other liabilities |
82.8 | 92.2 | 76.6 | |||||||||
| Total long-term liabilities |
5,005.7 | 5,386.2 | 5,407.5 | |||||||||
| Total shareholders’ deficit |
(37.1 | ) | (44.7 | ) | (30.9 | ) | ||||||
| Total liabilities and shareholders’ deficit |
$ | 5,974.9 | $ | 5,976.0 | $ | 6,178.7 | ||||||
Page 3 of 6
CDW CORPORATION AND SUBSIDIARIES
NET SALES DETAIL
(dollars in millions)
(unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||
| 2010 | 2009 | % Change | 2010 | 2009 | % Change | |||||||||||||||||||
| Corporate: |
||||||||||||||||||||||||
| Medium / Large |
$ | 973.7 | $ | 739.5 | 31.7 | % | $ | 2,831.3 | $ | 2,143.8 | 32.1 | % | ||||||||||||
| Small Business |
251.0 | 196.6 | 27.6 | 703.5 | 587.7 | 19.7 | ||||||||||||||||||
| Total Corporate |
$ | 1,224.7 | $ | 936.1 | 30.8 | % | $ | 3,534.8 | $ | 2,731.5 | 29.4 | % | ||||||||||||
| Public: |
||||||||||||||||||||||||
| Government |
$ | 397.1 | $ | 415.6 | (4.5 | )% | $ | 1,020.7 | $ | 898.6 | 13.6 | % | ||||||||||||
| Education |
392.5 | 338.2 | 16.1 | 958.4 | 817.8 | 17.2 | ||||||||||||||||||
| Healthcare |
262.1 | 194.5 | 34.7 | 723.8 | 529.0 | 36.8 | ||||||||||||||||||
| Total Public |
$ | 1,051.7 | $ | 948.3 | 10.9 | % | $ | 2,702.9 | $ | 2,245.4 | 20.4 | % | ||||||||||||
| Other |
$ | 98.0 | $ | 79.0 | 24.1 | % | $ | 294.1 | $ | 221.2 | 32.9 | % | ||||||||||||
| Total Net Sales |
$ | 2,374.4 | $ | 1,963.4 | 20.9 | % | $ | 6,531.8 | $ | 5,198.1 | 25.7 | % | ||||||||||||
Page 4 of 6
CDW CORPORATION AND SUBSIDIARIES
DEBT AND WORKING CAPITAL INFORMATION
(dollars in millions)
(unaudited)
| September 30, 2010 |
December 31, 2009 |
September 30, 2009 |
||||||||||
| Debt and ABL Availability |
||||||||||||
| Cash, cash equivalents and marketable securities |
$ | 67.0 | $ | 88.0 | $ | 265.5 | ||||||
| Total debt (1) |
$ | 4,352.0 | $ | 4,646.9 | $ | 4,716.9 | ||||||
| Net senior secured debt |
$ | 2,356.6 | $ | 2,618.9 | $ | 2,511.5 | ||||||
| Borrowing base (2) |
$ | 960.4 | $ | 855.5 | $ | 759.1 | ||||||
| Revolving credit availability |
$ | 547.4 | $ | 229.8 | $ | 224.7 | ||||||
| Cash plus revolving credit availability |
$ | 614.4 | $ | 317.8 | $ | 490.2 | ||||||
| Credit Agreement Coverage Ratios |
||||||||||||
| Senior secured leverage ratio (net basis) |
4.1 | 5.6 | 5.3 | |||||||||
| Total net leverage ratio |
7.4 | 9.8 | 9.3 | |||||||||
| Working Capital |
||||||||||||
| Days of sales outstanding (DSO) (3) |
43 | 46 | 41 | |||||||||
| Days of supply in inventory (DIO) (3) |
15 | 15 | 15 | |||||||||
| Days of purchases outstanding (DPO) (3) |
(25 | ) | (20 | ) | (22 | ) | ||||||
| Cash conversion cycle (3) |
33 | 41 | 34 | |||||||||
| (1) | Includes capital lease obligations and amounts owed under trade financing agreements |
| (2) | Amount in effect at quarter end |
| (3) | Based on a rolling three month average |
Page 5 of 6
CDW CORPORATION AND SUBSIDIARIES
CASH FLOW INFORMATION
(dollars in millions)
(unaudited)
| Nine Months Ended September 30, | ||||||||
| 2010 | 2009 | |||||||
| Cash flows from operating activities |
$ | 397.6 | $ | 234.2 | ||||
| Cash flows from investing activities |
(82.9 | ) | (77.8 | ) | ||||
| Cash flows from financing activities |
(335.8 | ) | (5.8 | ) | ||||
| Effect of exchange rate changes on cash and cash equivalents |
0.1 | 0.5 | ||||||
| Net (decrease) increase in cash and cash equivalents |
(21.0 | ) | 151.1 | |||||
| Cash and cash equivalents – beginning of period |
88.0 | 94.4 | ||||||
| Cash and cash equivalents – end of period |
$ | 67.0 | $ | 245.5 | ||||
| Supplementary disclosure of cash flow information: |
||||||||
| Interest paid, including cash settlements on interest rate swap agreements |
$ | 221.7 | $ | 231.2 | ||||
| Taxes paid, net |
$ | 32.6 | $ | 12.0 | ||||
Page 6 of 6