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Tech Data Corporation Reports Fourth Quarter and Fiscal Year 2020 Results

Tech Data (NASDAQ: TECD) (the “Company”) today announced its financial results for the fourth quarter and fiscal year ended January 31, 2020.

 
Fourth quarter ended January 31, Twelve months ended January 31,
($ in millions,
except per share amounts)

2020

2019

Y/Y Change

2020

2019

Y/Y Change

Net Sales

$10,380.8

$10,464.5

-1%

$36,998.4

$37,239.0

-1%

Gross profit

$666.2

$649.1

3%

$2,297.6

$2,255.9

2%

Gross margin

6.42%

6.20%

22 bps

6.21%

6.06%

15 bps

SG&A expenses (GAAP)*

$438.6

$414.5

6%

$1,691.3

$1,648.9

3%

% of net sales

4.22%

3.96%

26 bps

4.57%

4.43%

14 bps

SG&A expenses (Non-GAAP)*

$414.2

$388.3

7%

$1,603.2

$1,548.0

4%

% of net sales

3.99%

3.71%

28 bps

4.33%

4.16%

17 bps

Operating income (GAAP)*

$218.1

$166.1

31%

$582.3

$493.8

18%

Operating margin (GAAP)*

2.10%

1.59%

51 bps

1.57%

1.33%

24 bps

Operating income (Non-GAAP)*

$252.0

$260.9

-3%

$694.4

$707.9

-2%

Operating margin (Non-GAAP)*

2.43%

2.49%

-6 bps

1.88%

1.90%

-2 bps

Net income (GAAP)*

$149.1

$116.8

28%

$374.5

$340.6

10%

Net income (Non-GAAP)*

$175.5

$171.1

3%

$458.8

$435.9

5%

EPS - diluted (GAAP)*

$4.15

$3.11

33%

$10.27

$8.89

16%

EPS - diluted (Non-GAAP)*

$4.88

$4.55

7%

$12.58

$11.38

11%

* Twelve months ended January 31, 2019 includes a $25 million benefit ($18 million net of tax; $0.47 cents per diluted share) from the collection of an accounts receivable balance previously considered uncollectible.

A reconciliation of GAAP to non-GAAP financial measures is presented in the financial tables of this press release.

Regional Financial Highlights:

Fourth quarter ended January 31, Twelve months ended January 31,
($ in millions)

2020

2019

Y/Y Change

2020

2019

Y/Y Change

AMERICAS

Net Sales

$4,291.8

$4,241.7

1%

$16,600.0

$16,041.1

3%

% of WW net sales

41%

41%

45%

43%

Operating income (GAAP)*

$89.1

$105.0

-15%

$333.2

$366.6

-9%

% of net sales

2.08%

2.47%

-39 bps

2.01%

2.29%

-28 bps

Operating income (Non-GAAP)*

$113.1

$125.2

-10%

$405.1

$431.3

-6%

% of net sales

2.63%

2.95%

-32 bps

2.44%

2.69%

-25 bps

EUROPE

Net Sales

$5,760.6

$5,895.1

-2%

$19,132.0

$20,026.1

-4%

% of WW net sales

56%

56%

52%

54%

Operating income (GAAP)

$131.9

$109.1

21%

$272.5

$195.4

39%

% of net sales

2.29%

1.85%

44 bps

1.42%

0.98%

44 bps

Operating income (Non-GAAP)

$140.8

$133.4

6%

$306.1

$287.5

6%

% of net sales

2.44%

2.26%

18 bps

1.60%

1.44%

16 bps

ASIA PACIFIC

Net Sales

$328.4

$327.7

0%

$1,266.4

$1,171.8

8%

% of WW net sales

3%

3%

3%

3%

Operating income (loss) (GAAP)

$5.6

($40.2)

NM

$8.8

($36.7)

NM

% of net sales

1.69%

-12.26%

NM

0.69%

-3.13%

NM

Operating income (Non-GAAP)

$6.1

$9.7

-37%

$15.0

$17.9

-16%

% of net sales

1.87%

2.97%

-110 bps

1.18%

1.53%

-35 bps

* Twelve months ended January 31, 2019 includes a $25 million benefit ($18 million net of tax; $0.47 cents per diluted share) from the collection of an accounts receivable balance previously considered uncollectible.

Note: WW = worldwide

Stock-based compensation expense was $8.5 million, an increase of $0.7 million, compared to the prior-year quarter. 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).

Financial Highlights for the Fourth Quarter Ended January 31, 2020:

  • Worldwide net sales were $10.4 billion, a decrease of 1 percent compared to the prior-year quarter. On a constant currency basis, net sales were flat.
    • Americas: Net sales were $4.3 billion, an increase of 1 percent compared to the prior-year quarter. On a constant currency basis, net sales increased 1 percent.
    • Europe: Net sales were $5.8 billion, a decrease of 2 percent compared to the prior-year quarter. On a constant currency basis, net sales were flat.
    • Asia Pacific: Net sales were $0.3 billion, flat compared to the prior-year quarter. On a constant currency basis, net sales were also flat.
    • The following vendor represented 10 percent or more of worldwide net sales in the fourth quarter: Apple Inc. 19 percent.
  • Net cash generated by operations during the quarter was $180 million. The cash conversion cycle was 15 days, equal to the year-ago period.

Financial Highlights for the Fiscal Year Ended January 31, 2020:

  • Worldwide net sales were $37.0 billion, a decrease of 1 percent compared to the prior year. On a constant currency basis, net sales increased 2 percent.
    • Americas: Net sales were $16.6 billion, an increase of 3 percent compared to the prior year. On a constant currency basis, net sales increased 4 percent.
    • Europe: Net sales were $19.1 billion, a decrease of 4 percent compared to the prior year. On a constant currency basis, net sales were flat.
    • Asia Pacific: Net sales were $1.3 billion, an increase of 8 percent compared to the prior year. On a constant currency basis, net sales increased 10 percent.
  • Net cash generated by operations during the fiscal year was $593 million.
  • At January 31, 2020, the company had approximately $1.9 billion of goodwill and acquired intangibles.
  • Return on invested capital for the trailing twelve months was 13 percent, compared to 12 percent in the prior year. Adjusted return on invested capital for the trailing twelve months was 15 percent, compared to 14 percent in the year-ago period.

“Our fourth quarter capped a momentous year for Tech Data,” said Rich Hume, chief executive officer. “For the fiscal year 2020, we delivered a strong financial performance while making strategic progress and continuing to deliver higher value to our channel partners, colleagues and shareholders. We ended the year by reaching our biggest milestone yet—the agreement to be acquired by Apollo. We look forward to completing the transaction and working with the Apollo team to accelerate investments in our business.”

Subsequent Events

Tech Data previously announced its entry into a definitive agreement (the “Merger Agreement”) with Tiger Midco, LLC (“Parent”), an affiliate of funds managed by affiliates of Apollo Global Management (NYSE: APO), a leading global alternative investment manager (“Apollo”).

The Merger Agreement provides that Parent will acquire all of the outstanding shares of Tech Data common stock for $145 per share in cash. Tech Data filed Current Reports on Form 8-K on November 13, 2019 and November 29, 2019 providing further information with respect to the Merger Agreement and the Amendment No. 1 thereto. On February 12, 2020 Tech Data’s shareholders voted to approve and adopt the Merger Agreement at a special meeting of shareholders, which was one of the conditions to the closing of the merger. The closing of the merger remains subject to the satisfaction or waiver of other customary closing conditions. The transaction is expected to close during the first half of 2020, subject to the receipt of regulatory approvals.

For additional information on the merger, please see Tech Data’s definitive proxy statement filed on January 10, 2020 as supplemented by the Current Report on Form 8-K filed on February 4, 2020.

As previously announced, due to the pending transaction with affiliates of Apollo, Tech Data does not plan to host an earnings conference call nor provide forward-looking guidance.

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, goodwill impairment, value-added tax assessments and related interest expense, gain on disposal of subsidiary, tax indemnifications, changes in deferred tax valuation allowances and the impact of U.S. 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.

Forward-Looking Statements

This communication includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.

Such forward-looking statements are inherently uncertain, and shareholders and other potential investors must recognize that actual results may differ materially from Tech Data’s expectations as a result of a variety of factors. Such forward-looking statements are based upon management’s current expectations and include known and unknown risks, uncertainties and other factors, many of which Tech Data is unable to predict or control, that may cause Tech Data’s actual results, performance, or plans to differ materially from any future results, performance or plans expressed or implied by such forward-looking statements. Risks and uncertainties related to the proposed merger include, but are not limited to, the occurrence of any event, change or other circumstance that could give rise to the termination of the merger agreement; the failure of the parties to satisfy conditions to completion of the proposed merger, including the failure of the parties to obtain required regulatory approvals; the risk that regulatory or other approvals are delayed or are subject to terms and conditions that are not anticipated; and the risks, uncertainties, and other factors detailed from time to time in Tech Data’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed or furnished with the Securities and Exchange Commission (the “SEC”).

Many of these factors are beyond Tech Data’s control. Tech Data cautions investors that any forward-looking statements made by Tech Data are not guarantees of future performance. Tech Data disclaims any obligation to update any such factors or to announce publicly the results of any revisions to any of the forward-looking statements to reflect future events or developments.

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. 88 on the Fortune 500® and has been named one of Fortune’s World’s Most Admired Companies for 11 straight years. To find out more, visit www.techdata.com or follow us on Twitter, LinkedIn, Facebook and Instagram.

TECH DATA CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

 
Three months ended January 31,Twelve months ended January 31,

2020

2019

2020

2019

Net sales

$

10,380,809

$

10,464,501

$

36,998,421

$

37,238,950

Cost of products sold

9,714,578

9,815,353

34,700,774

34,983,051

Gross profit

666,231

649,148

2,297,647

2,255,899

Operating expenses:
Selling, general and administrative expenses

438,559

414,540

1,691,311

1,648,895

Acquisition, integration and restructuring expenses

9,953

21,121

26,030

87,920

Goodwill impairment

47,434

47,434

Legal settlements and other, net

(351

)

(633

)

(15,406

)

Gain on disposal of subsidiary

(1,390

)

(6,746

)

448,161

483,095

1,715,318

1,762,097

Operating income

218,070

166,053

582,329

493,802

Interest expense

17,729

27,345

86,005

106,725

Other expense, net

5,235

6,013

11,786

13,792

Income before income taxes

195,106

132,695

484,538

373,285

Provision for income taxes

46,026

15,896

110,038

32,705

Net income

$

149,080

$

116,799

$

374,500

$

340,580

 
Earnings per share
Basic

$

4.19

$

3.13

$

10.35

$

8.94

Diluted

$

4.15

$

3.11

$

10.27

$

8.89

Weighted average common shares outstanding:
Basic

35,564

37,316

36,186

38,094

Diluted

35,928

37,577

36,460

38,317

TECH DATA CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

(In thousands, except par value and share amounts)

 

January 31,

January 31,

2020

2019

ASSETS(unaudited)
 
Current assets:
Cash and cash equivalents

$

841,366

$

799,123

Accounts receivable, net

6,192,203

6,241,740

Inventories

3,042,541

3,297,385

Prepaid expenses and other assets

362,182

354,601

Total current assets

10,438,292

10,692,849

Property and equipment, net

287,150

274,917

Goodwill and intangible assets, net

2,067,933

1,843,848

Other assets, net

475,234

174,938

Total assets

$

13,268,609

$

12,986,552

 
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable

$

7,259,246

$

7,496,466

Accrued expenses and other liabilities

1,112,457

1,000,126

Revolving credit loans and current maturities of long-term debt, net

112,882

110,368

Total current liabilities

8,484,585

8,606,960

Long-term debt, less current maturities

1,338,136

1,300,554

Other long-term liabilities

326,433

142,315

Total liabilities

$

10,149,154

$

10,049,829

 
Shareholders’ equity:
Common stock, par value $0.0015; 200,000,000 shares authorized; 59,245,585 shares issued at January 31, 2020 and 2019

$

89

$

89

Additional paid-in capital

855,020

844,206

Treasury stock, at cost (23,819,230 and 22,305,464 shares at January 31, 2020 and 2019)

(1,198,132

)

(1,037,872

)

Retained earnings

3,461,014

3,086,514

Accumulated other comprehensive income

1,464

43,786

Total shareholders' equity

3,119,455

2,936,723

Total liabilities and shareholders' equity

$

13,268,609

$

12,986,552

TECH DATA CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

(In thousands)

(Unaudited)

 
Twelve months ended January 31,

2020

2019

Cash flows from operating activities:
Cash received from customers

$

48,892,924

$

47,836,136

Cash paid to vendors and employees

(48,118,538

)

(47,263,258

)

Interest paid, net

(87,886

)

(97,293

)

Income taxes paid

(93,410

)

(95,450

)

Net cash provided by operating activities

593,090

380,135

Cash flows from investing activities:
Proceeds from sale of business, net of cash divested

8,985

Acquisition of businesses, net of cash acquired

(209,923

)

(124,223

)

Expenditures for property and equipment

(48,352

)

(40,995

)

Software and software development costs

(36,470

)

(20,419

)

Other

4,491

4,943

Net cash used in investing activities

(290,254

)

(171,709

)

Cash flows from financing activities:
Borrowings on long-term debt

300,000

Principal payments on long-term debt

(345,177

)

(208,591

)

Cash paid for debt issuance costs

(4,341

)

Net repayments on revolving credit loans

(9,005

)

(11,288

)

Payments for employee withholdings on equity awards

(9,428

)

(7,102

)

Proceeds from the reissuance of treasury stock

1,660

1,771

Acquisition of noncontrolling interest

(7,553

)

Repurchases of common stock

(170,191

)

(107,025

)

Other

529

Net cash used in financing activities

(243,506

)

(332,235

)

Effect of exchange rate changes on cash and cash equivalents

(17,087

)

(32,696

)

Net increase (decrease) in cash and cash equivalents

42,243

(156,505

)

Cash and cash equivalents at beginning of year

799,123

955,628

Cash and cash equivalents at end of year

$

841,366

$

799,123

 
Reconciliation of net income to net cash provided by operating activities:
Net income

$

374,500

$

340,580

Adjustments to reconcile net income to net cash provided by operating activities:
Goodwill impairment

47,434

Gain on disposal of subsidiary

(1,390

)

(6,746

)

Depreciation and amortization

153,099

158,997

Provision for losses on accounts receivable

21,081

9,903

Stock-based compensation expense

32,187

31,513

Accretion of debt discount and debt issuance costs

4,042

3,841

Deferred income taxes

19,187

(12,482

)

Changes in operating assets and liabilities, net of acquisitions and disposition:
Accounts receivable

159,569

(512,385

)

Inventories

213,344

(480,001

)

Prepaid expenses and other assets

66,777

13,581

Accounts payable

(406,839

)

852,369

Accrued expenses and other liabilities

(42,467

)

(66,469

)

Total adjustments

218,590

39,555

Net cash provided by operating activities

$

593,090

$

380,135

TECH DATA CORPORATION AND SUBSIDIARIES

GAAP TO NON-GAAP RECONCILIATION

(In thousands)

Three months ended January 31, 2020

Americas (1)Europe (1)Asia Pacific (1)Stock
Compensation
Expense
Consolidated
Net Sales

$ 4,291,774

$ 5,760,643

$ 328,392

$ 10,380,809

Operating income (GAAP) (1)

$ 89,095

$ 131,893

$ 5,562

$ (8,480)

$ 218,070

Acquisition, integration and restructuring expenses

8,275

1,196

19

463

9,953

Legal settlements and other, net

(351)

(351)

Acquisition-related intangible assets amortization expense

16,058

6,448

1,306

23,812

Tax indemnifications

1,295

(750)

545

Total non-GAAP operating income adjustments

$ 23,982

$ 8,939

$ 575

$ 463

$ 33,959

Operating income (non-GAAP)

$ 113,077

$ 140,832

$ 6,137

$ (8,017)

$ 252,029

Operating margin (GAAP)

2.08%

2.29%

1.69%

2.10%

Operating margin (non-GAAP)

2.63%

2.44%

1.87%

2.43%

 
(1) GAAP operating income does not include stock compensation expense at the regional level.
 
 

Three months ended January 31, 2019

Americas (1)Europe (1)Asia Pacific (1)Stock
Compensation
Expense
Consolidated
Net Sales

$ 4,241,714

$ 5,895,072

$ 327,715

$ 10,464,501

Operating income (GAAP) (1)

$ 104,966

$ 109,083

$ (40,177)

$ (7,819)

$ 166,053

Acquisition, integration and restructuring expenses

6,145

13,293

1,348

335

21,121

Goodwill impairment

47,434

47,434

Acquisition-related intangible assets amortization expense

13,414

7,977

1,315

22,706

Tax indemnifications

708

3,033

(202)

3,539

Total non-GAAP operating income adjustments

$ 20,267

$ 24,303

$ 49,895

$ 335

$ 94,800

Operating income (non-GAAP)

$ 125,233

$ 133,386

$ 9,718

$ (7,484)

$ 260,853

Operating margin (GAAP)

2.47%

1.85%

-12.26%

1.59%

Operating margin (non-GAAP)

2.95%

2.26%

2.97%

2.49%

 
(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)

 

Twelve months ended January 31, 2020

Americas (1)

Europe (1)

Asia Pacific (1)

Stock
Compensation
Expense

Consolidated

Net Sales

$

16,600,023

$

19,132,040

$

1,266,358

$

36,998,421

Operating income (GAAP) (1)

$

333,233

$

272,498

$

8,785

$

(32,187

)

$

582,329

Acquisition, integration and restructuring expenses

16,078

8,424

1,065

463

26,030

Legal settlements and other, net

(633

)

(633

)

Acquisition-related intangible assets amortization expense

56,376

25,305

5,236

86,917

Gain on disposal of subsidiary

(1,390

)

(1,390

)

Tax indemnifications

1,295

(103

)

1,192

Total non-GAAP operating income adjustments

$

71,821

$

33,634

$

6,198

$

463

$

112,116

Operating income (non-GAAP)

$

405,054

$

306,132

$

14,983

$

(31,724

)

$

694,445

Operating margin (GAAP)

2.01

%

1.42

%

0.69

%

1.57

%

Operating margin (non-GAAP)

2.44

%

1.60

%

1.18

%

1.88

%

 
(1) GAAP operating income does not include stock compensation expense at the regional level.
 

Twelve months ended January 31, 2019

Americas (1)Europe (1)Asia Pacific (1)Stock
Compensation
Expense
Consolidated
Net Sales

$

16,041,103

$

20,026,057

$

1,171,790

$

37,238,950

Operating income (GAAP) (1)

$

366,637

$

195,375

$

(36,697

)

$

(31,513

)

$

493,802

Acquisition, integration and restructuring expenses

25,206

57,755

2,378

2,581

87,920

Goodwill impairment

47,434

47,434

Legal settlements and other, net

(15,406

)

-

(15,406

)

Acquisition-related intangible assets amortization expense

54,196

31,673

5,379

91,248

Gain on disposal of subsidiary

(6,746

)

(6,746

)

Tax indemnifications

708

9,484

(558

)

9,634

Total non-GAAP operating income adjustments

$

64,704

$

92,166

$

54,633

$

2,581

$

214,084

Operating income (non-GAAP)

$

431,341

$

287,541

$

17,936

$

(28,932

)

$

707,886

Operating margin (GAAP)

2.29

%

0.98

%

-3.13

%

1.33

%

Operating margin (non-GAAP)

2.69

%

1.44

%

1.53

%

1.90

%

 
(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)

 
Selling, general and administrative expenses ("SG&A")

Three months ended January 31,

2020

2019

Net Sales

$

10,380,809

$

10,464,501

SG&A Expenses (GAAP)

$

438,559

$

414,540

Tax indemnifications

(545

)

(3,539

)

Acquisition-related intangible assets amortization expense

(23,812

)

(22,706

)

SG&A Expenses (non-GAAP)

$

414,202

$

388,295

 
SG&A Expenses (GAAP) %

4.22

%

3.96

%

SG&A Expenses (non-GAAP) %

3.99

%

3.71

%

 
 

Twelve months ended January 31,

2020

2019

Net Sales

$

36,998,421

$

37,238,950

SG&A Expenses (GAAP)

$

1,691,311

$

1,648,895

Tax indemnifications

(1,192

)

(9,634

)

Acquisition-related intangible assets amortization expense

(86,917

)

(91,248

)

SG&A Expenses (non-GAAP)

$

1,603,202

$

1,548,013

 
SG&A Expenses (GAAP) %

4.57

%

4.43

%

SG&A Expenses (non-GAAP) %

4.33

%

4.16

%

TECH DATA CORPORATION AND SUBSIDIARIES

GAAP TO NON-GAAP RECONCILIATION

(In thousands)

 
Three months ended January 31,

2020

2019

Net Income

Diluted EPS

Net Income

Diluted EPS

GAAP Results

$149,080

$4.15

$116,799

$3.11

Acquisition, integration and restructuring expenses

9,953

0.27

21,121

0.56

Goodwill impairment

47,434

1.26

Legal settlements and other, net

(351)

(0.01)

Acquisition-related intangible assets amortization expense

23,812

0.66

22,706

0.60

Tax indemnifications

545

0.02

3,539

0.09

Income tax effect of tax indemnifications

(545)

(0.02)

(3,539)

(0.09)

Income tax effect of other adjustments above

(8,307)

(0.23)

(8,815)

(0.23)

Change in deferred tax valuation allowances

1,300

0.04

(2,914)

(0.08)

Impact of US tax reform

(25,234)

(0.67)

Non-GAAP Results

$175,487

$4.88

$171,097

$4.55

Twelve months ended January 31,

2020

2019

Net Income

Diluted EPS

Net Income

Diluted EPS

GAAP Results

$374,500

$10.27

$340,580

$8.89

Acquisition, integration and restructuring expenses

26,030

0.71

87,920

2.29

Goodwill impairment

47,434

1.24

Legal settlements and other, net

(633)

(0.02)

(15,406)

(0.40)

Gain on disposal of subsidiary

(1,390)

(0.04)

(6,746)

(0.18)

Value added tax assessments and related interest expense

-

-

(928)

(0.02)

Acquisition-related intangible assets amortization expense

86,917

2.38

91,248

2.38

Tax indemnifications

1,192

0.03

9,634

0.25

Income tax effect of tax indemnifications

(1,192)

(0.03)

(9,634)

(0.25)

Income tax effect of other adjustments above

(27,949)

(0.76)

(39,925)

(1.04)

Income tax benefit from acquisition settlement

(13,046)

(0.34)

Change in deferred tax valuation allowances

1,300

0.04

(5,987)

(0.16)

Impact of US tax reform

(49,234)

(1.28)

Non-GAAP Results

$458,775

$12.58

$435,910

$11.38

TECH DATA CORPORATION AND SUBSIDIARIES

GAAP TO NON-GAAP RECONCILIATION

(In thousands)

Return on Invested Capital (ROIC)

Twelve months ended January 31,
TTM Net Operating Profit After Tax (NOPAT)*:

2020

2019

Operating income

$

582,329

$

493,802

Income taxes on operating income (1)

(132,246

)

(43,264

)

NOPAT

$

450,083

$

450,538

 
Average Invested Capital:
Short-term debt (5-qtr end average)

$

119,613

$

116,931

Long-term debt (5-qtr end average)

1,305,606

1,402,967

Shareholders' Equity (5-qtr end average)

2,965,998

2,883,085

Total average capital

4,391,217

4,402,983

Less: Cash (5-qtr end average)

(828,080

)

(707,933

)

Average invested capital less average cash

$

3,563,137

$

3,695,050

ROIC

13

%

12

%

 
* Trailing Twelve Months is abbreviated as TTM.
(1) Income taxes on operating income was calculated using the trailing twelve months effective tax rate.

Adjusted Return on Invested Capital (ROIC)

Twelve months ended January 31,
TTM Net Operating Profit After Tax (NOPAT), as adjusted*:

2020

2019

Non-GAAP operating income (1)

$

694,445

$

707,886

Income taxes on non-GAAP operating income (2)

(160,477

)

(181,704

)

NOPAT, as adjusted

$

533,968

$

526,182

 
Average Invested Capital, as adjusted:
Short-term debt (5-qtr end average)

$

119,613

$

116,931

Long-term debt (5-qtr end average)

1,305,606

1,402,967

Shareholders' Equity (5-qtr end average)

2,965,998

2,883,085

Tax effected impact of non-GAAP adjustments (3)

57,561

88,879

Total average capital, as adjusted

4,448,778

4,491,862

Less: Cash (5-qtr end average)

(828,080

)

(707,933

)

Average invested capital less average cash

$

3,620,698

$

3,783,929

Adjusted ROIC

15

%

14

%

 * Trailing Twelve Months is abbreviated as TTM.

(1) Represents operating income as adjusted to exclude acquisition, integration and restructuring expenses, legal settlements and other, net, gain on disposal of subsidiary, value added tax assessments, acquisition-related intangible assets amortization expense, goodwill impairment and tax indemnifications.

(2) Income taxes on non-GAAP operating income was calculated using the trailing twelve 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.

Contacts:

Investor Contact
Arleen Quinones
Corporate Vice President, Investor Relations & Corporate Communications
+1 727.532.8866
arleen.quinones@techdata.com

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