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CDW 8-K Report, Financial Results (Feb 7, 2024)

Reports
Earnings & Results·Other Events·Exhibits & Filings
Filing Date
Filed February 7, 2024
Period End
February 7, 2024
Security
CDW
In the record · 2016–202610-K1110-Q328-K113

CDW filed 11 annual reports (10-K), 32 quarterly reports (10-Q) and 113 current reports (8-K) between 2016 and 2026.

  1. Material agreement8-K · Mar ’17Mar ’17
  2. Material agreement8-K · Aug ’20Aug ’20
  3. Leadership change8-K · Feb ’23Feb ’23
  4. Leadership change8-K · Oct ’26Oct ’26

01—Abstract

Summary

Summary of the 8-K filed February 7, 2024. Cited figures are marked; the original filing is the authoritative source.

CDW Corporation reported fourth quarter and full year 2023 results in a press release furnished as Exhibit 99.1.

For the fourth quarter, net sales were $5,018.5 milliona, down 7.7% from $5,438.3 million a year earlier, with gross profit of $1,153.8 million (down 2.3%) and gross profit margin rising to 23.0% from 21.7%. Net income was $296.1 million, up 3.1%, and diluted EPS was $2.18, up 4.3%; non-GAAP diluted EPS was $2.57. The company attributed the sales decline across all segments to customers reducing or delaying hardware spend amid economic uncertainty.

For the full year, net sales were $21,376.0 millionb, down 10.0%, net income was $1,104.3 million (down 0.9%), and diluted EPS was $8.10 versus $8.13. Cash flows from operating activities were $1,598.7 million, and free cash flow was $1,450.5 million, per the exhibit's reconciliation. Management said it expects to outpace US IT market growth by 200 to 300 basis points on a constant currency basis in 2024.

Capital return actions were also announced. The Board declared a quarterly cash dividend of $0.62c per common share, payable March 12, 2024 to holders of record on February 26, 2024, which the release describes as 5 percent higher than the prior year. The Board also authorized a $750 million increase to the share repurchase program, which is incremental to the approximately $338 million remaining under the prior program as of December 31, 2023.

The filing furnishes results rather than filing them, and the fourth-quarter and full-year figures are presented alongside non-GAAP measures reconciled to US GAAP in the exhibit. Year-end total debt was $5,644.9 milliond against cash of $588.7 million, and revolver availability was $1,208.1 million.

02—Key points

Key Highlights

  1. Q4 2023 net sales fell 7.7% to $5,018.5 million, with declines in all operating segments, which management attributed to customers reducing or delaying hardware spend.
  2. Q4 2023 gross profit margin rose to 23.0% from 21.7%, driven mainly by a more favorable contribution of netted-down revenue, primarily software as a service.
  3. Q4 2023 diluted EPS was $2.18, up 4.3%, and non-GAAP diluted EPS was $2.57, up 2.8%.
  4. Full-year 2023 net sales declined 10.0% to $21,376.0 million, and full-year diluted EPS was $8.10 versus $8.13 in 2022.
  5. Full-year 2023 operating cash flow was $1,598.7 million and free cash flow was $1,450.5 million, per the exhibit's reconciliation.
  6. Board declared a quarterly cash dividend of $0.62 per share, 5 percent higher than the prior year, payable March 12, 2024.
  7. Board authorized a $750 million increase to the share repurchase program, incremental to about $338 million remaining as of December 31, 2023.

03—Questions

Frequently Asked Questions

  1. How did CDW's sales perform in the fourth quarter and full year of 2023?

    Fourth-quarter net sales were $5,018.5 million, down 7.7% from $5,438.3 million, and full-year net sales were $21,376.0 million, down 10.0% from $23,748.7 million. The filing says all operating segments declined, and it attributes the drop to customers reducing or delaying hardware spend amid economic uncertainty.

  2. Did profitability improve despite lower sales?

    Partially. Gross profit margin increased to 23.0% in Q4 2023 from 21.7% and to 21.8% for the full year from 19.7%, mainly due to a more favorable contribution of netted-down revenue. However, full-year operating income fell 3.1% to $1,680.9 million and full-year net income fell 0.9% to $1,104.3 million.

  3. What capital return actions did CDW announce?

    The Board declared a quarterly cash dividend of $0.62 per common share, payable March 12, 2024 to stockholders of record on February 26, 2024. It also authorized a $750 million increase to the share repurchase program, which is incremental to the approximately $338 million remaining as of December 31, 2023.

  4. What outlook did management provide for 2024?

    Management said it remains well-positioned to continue outpacing US IT market growth by 200 to 300 basis points on a constant currency basis in 2024.

  5. What was CDW's liquidity position at year-end 2023?

    The filing reports cash and cash equivalents of $588.7 million, total debt of $5,644.9 million, and revolver availability of $1,208.1 million, for combined cash plus revolver availability of $1,796.8 million.

04—Continue

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