Insight Enterprises, Inc. (NASDAQ: NSIT) (the “Company”)
today reported financial results for the quarter ended March 31,
2024. Highlights include:
- Gross profit increased 13% year over year to a record $440.9
million with gross margin expanding 170 basis points to a first
quarter record 18.5%
- Insight Core services gross profit grew 24% year over year
- Cloud gross profit grew 33% year over year
- First quarter record results:
- Earnings from operations increased 29% year over year to $100.0
million
- Adjusted earnings from operations increased 30% year over year
to $121.8 million
- Diluted earnings per share of $1.74 increased 30% year over
year
- Adjusted diluted earnings per share of $2.37 increased 33% year
over year
In the first quarter of 2024, net sales increased 2%, year over
year, and we achieved record gross profit of $440.9 million, an
increase of 13%, year over year. Gross margin expanded 170 basis
points compared to the first quarter of 2023, to a first quarter
record of 18.5%. Earnings from operations of $100.0 million
increased 29% compared to $77.5 million in the first quarter of
2023. Adjusted earnings from operations of $121.8 million increased
30% compared to $94.0 million in the first quarter of 2023.
Consolidated net earnings were $67.0 million, or 2.8% of net sales,
in the first quarter of 2024, and Adjusted consolidated net
earnings were $83.4 million, or 3.5% of net sales. Diluted earnings
per share for the quarter was $1.74, up 30%, year over year, and
Adjusted diluted earnings per share was another first quarter
record of $2.37, up 33%, year over year.
“We are pleased to announce another record setting first quarter
with very strong performance in our key strategic areas of cloud
and Insight Core services, fortified by continued operating expense
discipline,” stated Joyce Mullen, President and Chief Executive
Officer. “We also achieved several first quarter records including
gross profit, gross margin and Adjusted diluted earnings per share,
demonstrating we are executing well against our strategic objective
of becoming the leading solutions integrator,” Mullen stated.
KEY HIGHLIGHTS
Results for the Quarter:
- Consolidated net sales for the first quarter of 2024 of $2.4
billion increased 2%, year over year, when compared to the first
quarter of 2023. Product net sales was flat, year to year, while
services net sales increased 17%, year over year.
- Net sales in North America increased 4%, year over year, to
$1.9 billion;
- Product net sales increased 2%, year over year, to $1.6
billion;
- Services net sales increased 12%, year over year, to $318.5
million;
- Net sales in EMEA decreased 3%, year to year, to $412.8
million; and
- Net sales in APAC decreased 2%, year to year, to $61.8
million.
- Excluding the effects of fluctuating foreign currency exchange
rates, consolidated net sales increased 2%, year over year, with
increases in net sales in North America and APAC of 4% and 1% year
over year, respectively, partially offset by a decrease in net
sales in EMEA of 6% year to year.
- Consolidated gross profit increased 13% compared to the first
quarter of 2023 to $440.9 million, with consolidated gross margin
expanding 170 basis points to a first quarter record of 18.5% of
net sales. Product gross profit decreased 1%, year to year, and
services gross profit increased 27%, year over year. Cloud gross
profit grew 33%, year over year, and Insight Core Services gross
profit increased 24%, year over year. By segment, gross profit:
- increased 11% in North America, year over year, to $349.8
million (18.4% gross margin);
- increased 23% in EMEA, year over year, to $75.0 million (18.2%
gross margin); and
- increased 5% in APAC, year over year, to $16.1 million (26.0%
gross margin).
- Excluding the effects of fluctuating foreign currency exchange
rates, consolidated gross profit was up 12%, year over year, with
gross profit growth in North America, EMEA and APAC of 11%, 20% and
8%, respectively, year over year.
- Consolidated earnings from operations increased 29% compared to
the first quarter of 2023 to $100.0 million, or 4.2% of net sales.
By segment, earnings from operations:
- increased 33% in North America, year over year, to $84.0
million, or 4.4% of net sales;
- increased 9% in EMEA, year over year, to $11.2 million, or 2.7%
of net sales; and
- increased 20% in APAC, year over year, to $4.8 million, or 7.7%
of net sales.
- Excluding the effects of fluctuating foreign currency exchange
rates, consolidated earnings from operations were up 28%, year over
year, with increased earnings from operations in North America,
EMEA and APAC of 33%, 5% and 22%, year over year,
respectively.
- Adjusted earnings from operations increased 30% compared to the
first quarter of 2023 to $121.8 million, or 5.1% of net sales. By
segment, Adjusted earnings from operations:
- increased 31% in North America, year over year, to $102.8
million, or 5.4% of net sales;
- increased 22% in EMEA, year over year, to $14.0 million, or
3.4% of net sales; and
- increased 20% in APAC, year over year, to $5.0 million, or 8.0%
of net sales.
- Excluding the effects of fluctuating foreign currency exchange
rates, Adjusted consolidated earnings from operations were up 29%,
year over year, with increased Adjusted earnings from operations in
North America, EMEA and APAC of 31%, 17% and 22%, respectively,
year over year.
- Consolidated net earnings and diluted earnings per share for
the first quarter of 2024 were $67.0 million and $1.74,
respectively, at an effective tax rate of 24.0%.
- Adjusted consolidated net earnings and Adjusted diluted
earnings per share for the first quarter of 2024 were $83.4 million
and $2.37, respectively. Excluding the effects of fluctuating
foreign currency exchange rates, Adjusted diluted earnings per
share increased 32% year over year.
In discussing financial results for the three months ended March
31, 2024 and 2023 in this press release, the Company refers to
certain financial measures that are adjusted from the financial
results prepared in accordance with United States generally
accepted accounting principles (“GAAP”). When referring to non-GAAP
measures, the Company refers to them as “Adjusted.” See “Use of
Non-GAAP Financial Measures” for additional information. A tabular
reconciliation of financial measures prepared in accordance with
GAAP to the non-GAAP financial measures is included at the end of
this press release.
In some instances, the Company refers to changes in net sales,
gross profit, earnings from operations and Adjusted earnings from
operations on a consolidated basis and in North America, EMEA and
APAC excluding the effects of fluctuating foreign currency exchange
rates. In addition, the Company refers to changes in Adjusted
diluted earnings per share on a consolidated basis excluding the
effects of fluctuating foreign currency exchange rates. In
computing these changes and percentages, the Company compares the
current year amount as translated into U.S. dollars under the
applicable accounting standards to the prior year amount in local
currency translated into U.S. dollars utilizing the weighted
average translation rate for the current period.
The tax effect of Adjusted amounts referenced herein were
computed using the statutory tax rate for the taxing jurisdictions
in the operating segment in which the related expenses were
recorded, adjusted for the effects of valuation allowances on net
operating losses in certain jurisdictions.
GUIDANCE
For the full year 2024, the Company now expects Adjusted diluted
earnings per share to be between $10.60 and $10.90. We expect to
deliver gross profit growth in the mid to high teens and expect
that our gross margin will be approximately 19%.
This outlook assumes:
- interest expense of $52 to $54 million;
- an effective tax rate of 26% for the full year;
- capital expenditures of $50 to $55 million; and
- an average share count for the full year of 35.3 million
shares.
This outlook excludes acquisition-related intangibles
amortization expense of approximately $60 million, assumes no
acquisition or integration related expenses, transformation or
severance and restructuring expenses, net and no significant change
in our debt instruments or the macroeconomic environment. Due to
the inherent difficulty of forecasting some of these types of
expenses, which impact net earnings, diluted earnings per share and
selling and administrative expenses, the Company is unable to
reasonably estimate the impact of such expenses, if any, to net
earnings, diluted earnings per share and selling and administrative
expenses. Accordingly, the Company is unable to provide a
reconciliation of GAAP to non-GAAP diluted earnings per share for
the full year 2024 forecast.
CONFERENCE CALL AND WEBCAST
The Company will host a conference call and live webcast today
at 9:00 a.m. ET to discuss first quarter 2024 results of
operations. A live webcast of the conference call (in listen-only
mode) will be available on the Company’s web site at
http://investor.insight.com/, and a replay of the webcast will be
available on the Company’s web site for a limited time following
the call. To access the live conference call, please register in
advance using the event link on the Company's web site. Upon
registering, participants will receive dial-in information via
email, as well as a unique registrant ID, event passcode, and
detailed instructions regarding how to join the call.
USE OF NON-GAAP FINANCIAL MEASURES
The non-GAAP financial measures are referred to as “Adjusted”.
Adjusted earnings from operations, Adjusted net earnings and
Adjusted diluted earnings per share exclude (i) severance and
restructuring expenses, net, (ii) certain executive recruitment and
hiring related expenses, (iii) amortization of intangible assets,
(iv) transformation costs, (v) certain acquisition and integration
related expenses, (vi) gains and losses from revaluation of
acquisition related earnout liabilities, and (vii) the tax effects
of each of these items, as applicable. Transformation costs
represent costs we are incurring to transform our business, to help
us achieve our strategic objectives, including becoming a leading
solutions integrator. The Company excludes these items when
internally evaluating earnings from operations, tax expense, net
earnings and diluted earnings per share for the Company and
earnings from operations for each of the Company’s operating
segments. Adjusted diluted earnings per share also includes the
impact of the benefit from the note hedge where the Company’s
average stock price for the first quarter of 2024 was in excess of
$68.32, which is the initial conversion price of the convertible
senior notes. Adjusted EBITDA excludes (i) interest expense, (ii)
income tax expense, (iii) depreciation and amortization of property
and equipment, (iv) amortization of intangible assets, (v)
severance and restructuring expenses, net, (vi) certain executive
recruitment and hiring related expenses, (vii) transformation
costs, (viii) certain acquisition and integration related expenses,
(ix) certain third-party data center service outage related
expenses and recoveries, and (x) gains and losses from revaluation
of acquisition related earnout liabilities. Adjusted return on
invested capital (“ROIC”) excludes (i) severance and restructuring
expenses, net, (ii) certain executive recruitment and hiring
related expenses, (iii) amortization of intangible assets, (iv)
transformation costs, (v) certain acquisition and integration
related expenses, (vi) certain third-party data center service
outage related expenses and recoveries, (vii) gains and losses from
revaluation of acquisition related earnout liabilities, and (viii)
the tax effects of each of these items, as applicable.
These non-GAAP measures are used by the Company and its
management to evaluate financial performance against budgeted
amounts, to calculate incentive compensation, to assist in
forecasting future performance and to compare the Company’s results
to those of the Company’s competitors. The Company believes that
these non-GAAP financial measures are useful to investors because
they allow for greater transparency, facilitate comparisons to
prior periods and the Company’s competitors’ results and assist in
forecasting performance for future periods. These non-GAAP
financial measures are not prepared in accordance with GAAP and may
be different from non-GAAP financial measures presented by other
companies. Non-GAAP financial measures should not be considered as
a substitute for, or superior to, measures of financial performance
prepared in accordance with GAAP.
FINANCIAL SUMMARY
TABLE
(DOLLARS IN THOUSANDS, EXCEPT
PER SHARE DATA)
(UNAUDITED)
Three Months Ended
March 31,
2024
2023
change
Insight Enterprises, Inc.
Net sales:
Products
$
1,963,955
$
1,967,645
—%
Services
$
415,530
$
356,302
17%
Total net sales
$
2,379,485
$
2,323,947
2%
Gross profit
$
440,928
$
391,315
13%
Gross margin
18.5
%
16.8
%
170 bps
Selling and administrative expenses
$
337,434
$
310,001
9%
Severance and restructuring expenses
$
2,227
$
3,802
(41%)
Acquisition and integration related
expenses
$
1,281
$
51
> 100%
Earnings from operations
$
99,986
$
77,461
29%
Net earnings
$
67,027
$
49,972
34%
Diluted earnings per share
$
1.74
$
1.34
30%
Sales Mix
**
Hardware
48
%
57
%
(15%)
Software
35
%
28
%
30%
Services
17
%
15
%
17%
100
%
100
%
2%
North America
Net sales:
Products
$
1,586,306
$
1,550,436
2%
Services
$
318,516
$
283,528
12%
Total net sales
$
1,904,822
$
1,833,964
4%
Gross profit
$
349,843
$
315,144
11%
Gross margin
18.4
%
17.2
%
120 bps
Selling and administrative expenses
$
262,920
$
248,820
6%
Severance and restructuring expenses
$
1,619
$
3,087
(48%)
Acquisition and integration related
expenses
$
1,281
$
51
> 100%
Earnings from operations
$
84,023
$
63,186
33%
Sales Mix
**
Hardware
52
%
63
%
(14%)
Software
31
%
22
%
51%
Services
17
%
15
%
12%
100
%
100
%
4%
EMEA
Net sales:
Products
$
339,566
$
377,451
(10%)
Services
$
73,275
$
49,553
48%
Total net sales
$
412,841
$
427,004
(3%)
Gross profit
$
75,033
$
60,888
23%
Gross margin
18.2
%
14.3
%
390 bps
Selling and administrative expenses
$
63,305
$
49,905
27%
Severance and restructuring expenses
$
538
$
702
(23%)
Earnings from operations
$
11,190
$
10,281
9%
Sales Mix
**
Hardware
33
%
38
%
(16%)
Software
49
%
50
%
(5%)
Services
18
%
12
%
48%
100
%
100
%
(3%)
APAC
Net sales:
Products
$
38,083
$
39,758
(4%)
Services
$
23,739
$
23,221
2%
Total net sales
$
61,822
$
62,979
(2%)
Gross profit
$
16,052
$
15,283
5%
Gross margin
26.0
%
24.3
%
170 bps
Selling and administrative expenses
$
11,209
$
11,276
(1)%
Severance and restructuring expenses
$
70
$
13
> 100%
Earnings from operations
$
4,773
$
3,994
20%
Sales Mix
**
Hardware
12
%
16
%
(29%)
Software
50
%
47
%
4%
Services
38
%
37
%
2%
100
%
100
%
(2%)
**
Change in sales mix represents
growth/decline in category net sales on a U.S. dollar basis and
does not exclude the effects of fluctuating foreign currency
exchange rates
FORWARD-LOOKING INFORMATION
Certain statements in this release and the related conference
call, webcast and presentation are “forward-looking statements”
within the meaning of the Private Securities Litigation Reform Act
of 1995. Forward-looking statements, including those related to the
impact of inflation and higher interest rates, the Company’s future
financial performance and results of operations, including gross
profit growth, Adjusted diluted earnings per share, and Adjusted
selling and administrative expenses, as well as the Company’s other
key performance indicators, the Company’s anticipated effective tax
rate, capital expenditures, and expected average share count, the
Company’s expectation that the majority of holders of our
convertible senior notes (the “Notes”) will not opt to convert
their Notes early, the Company’s expectations regarding cash flow,
the Company’s expectations regarding supply constraints and
shipment of backlog, future trends in the IT market, the Company’s
business strategy and strategic initiatives, which are inherently
subject to risks and uncertainties, some of which cannot be
predicted or quantified. Future events and actual results could
differ materially from those set forth in, contemplated by, or
underlying the forward-looking statements. There can be no
assurances that the results discussed by the forward-looking
statements will be achieved, and actual results may differ
materially from those set forth in the forward-looking statements.
Some of the important factors that could cause the Company’s actual
results to differ materially from those projected in any
forward-looking statements include, but are not limited to, the
following, which are discussed in the Company’s filings with the
Securities and Exchange Commission (the “SEC”), including in the
“Risk Factors” sections of the Company’s most recently filed
periodic report on Form 10-K and subsequent filings with the
SEC:
- actions of our competitors, including manufacturers and
publishers of products we sell;
- our reliance on our partners for product availability,
competitive products to sell and marketing funds and purchasing
incentives, which can change significantly in the amounts made
available and in the requirements year over year;
- our ability to keep pace with rapidly evolving technological
advances and the evolving competitive marketplace;
- general economic conditions, economic uncertainties and changes
in geopolitical conditions, including the possibility of a
recession or a decline in market activity as a result of the
ongoing conflicts in Ukraine and Gaza;
- changes in the IT industry and/or rapid changes in
technology;
- our ability to provide high quality services to our
clients;
- our reliance on independent shipping companies;
- the risks associated with our international operations;
- supply constraints for products;
- natural disasters or other adverse occurrences, including
public health issues such as pandemics or epidemics;
- disruptions in our IT systems and voice and data networks;
- cyberattacks, outages, or third-party breaches of data privacy
as well as related breaches of government regulations;
- intellectual property infringement claims and challenges to our
registered trademarks and trade names;
- potential liability and competitive risk based on the
development, adoption, and use of Generative Artificial
Intelligence;
- legal proceedings, client audits and failure to comply with
laws and regulations;
- risks of termination, delays in payment, audits and
investigations related to our public sector contracts;
- exposure to changes in, interpretations of, or enforcement
trends related to tax rules and regulations;
- our potential to draw down a substantial amount of
indebtedness;
- the conditional conversion feature of the Notes, which has been
triggered, and may adversely affect the Company’s financial
condition and operating results;
- the Company is subject to counterparty risk with respect to
certain hedge and warrant transactions entered into in connection
with the issuance of the Notes (the "Call Spread
Transactions");
- increased debt and interest expense and the possibility of
decreased availability of funds under our financing
facilities;
- possible significant fluctuations in our future operating
results as well as seasonality and variability in client
demands;
- potential contractual disputes with our clients and third-party
suppliers;
- our dependence on certain key personnel and our ability to
attract, train and retain skilled teammates;
- risks associated with the integration and operation of acquired
businesses, including achievement of expected synergies and
benefits; and
- future sales of the Company’s common stock or equity-linked
securities in the public market could lower the market price for
our common stock.
Additionally, there may be other risks that are otherwise
described from time to time in the reports that the Company files
with the SEC. Any forward-looking statements in this release, the
related conference call, webcast and presentation speak only as of
the date on which they are made and should be considered in light
of various important factors, including the risks and uncertainties
listed above, as well as others. The Company assumes no obligation
to update, and, except as may be required by law, does not intend
to update, any forward-looking statements. The Company does not
endorse any projections regarding future performance that may be
made by third parties.
INSIGHT ENTERPRISES, INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
OPERATIONS
(IN THOUSANDS, EXCEPT PER
SHARE DATA)
(UNAUDITED)
Three Months Ended
March 31,
2024
2023
Net sales:
Products
$
1,963,955
$
1,967,645
Services
415,530
356,302
Total net sales
2,379,485
2,323,947
Costs of goods sold:
Products
1,771,584
1,772,729
Services
166,973
159,903
Total costs of goods sold
1,938,557
1,932,632
Gross profit
440,928
391,315
Operating expenses:
Selling and administrative expenses
337,434
310,001
Severance and restructuring expenses
2,227
3,802
Acquisition and integration related
expenses
1,281
51
Earnings from operations
99,986
77,461
Non-operating expense (income):
Interest expense, net
12,557
10,348
Other (income) expense, net
(763
)
752
Earnings before income taxes
88,192
66,361
Income tax expense
21,165
16,389
Net earnings
$
67,027
$
49,972
Net earnings per share:
Basic
$
2.06
$
1.48
Diluted
$
1.74
$
1.34
Shares used in per share calculations:
Basic
32,596
33,706
Diluted
38,435
37,207
INSIGHT ENTERPRISES, INC. AND
SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS
(In THOUSANDS)
(UNAUDITED)
March 31, 2024
December 31,
2023
ASSETS
Current assets:
Cash and cash equivalents
$
379,111
$
268,730
Accounts receivable, net
3,573,253
3,568,290
Inventories
169,457
184,605
Contract assets, net
100,648
120,518
Other current assets
218,882
189,158
Total current assets
4,441,351
4,331,301
Long-term contract assets, net
121,994
132,780
Property and equipment, net
208,365
210,061
Goodwill
680,876
684,345
Intangible assets, net
354,146
369,687
Long-term accounts receivable
618,672
412,666
Other assets
141,835
145,510
$
6,567,239
$
6,286,350
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable – trade
$
2,422,632
$
2,255,183
Accounts payable – inventory financing
facilities
227,062
231,850
Accrued expenses and other current
liabilities
517,707
538,346
Current portion of long-term debt
331,566
348,004
Total current liabilities
3,498,967
3,373,383
Long-term debt
550,006
592,517
Deferred income taxes
23,306
27,588
Long-term accounts payable
566,233
353,794
Other liabilities
173,236
203,335
4,811,748
4,550,617
Stockholders’ equity:
Preferred stock
—
—
Common stock
325
326
Additional paid-in capital
326,539
328,607
Retained earnings
1,482,330
1,448,412
Accumulated other comprehensive loss –
foreign currency translation adjustments
(53,703
)
(41,612
)
Total stockholders’ equity
1,755,491
1,735,733
$
6,567,239
$
6,286,350
INSIGHT ENTERPRISES, INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
Three Months Ended
March 31,
2024
2023
Cash flows from operating activities:
Net earnings
$
67,027
$
49,972
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation and amortization
21,886
14,663
Provision for losses on accounts
receivable
3,246
1,484
Non-cash stock-based compensation
8,043
6,896
Deferred income taxes
(4,423
)
(4,284
)
Amortization of debt issuance costs
1,224
1,213
Other adjustments
2,471
2,122
Changes in assets and liabilities:
(Increase) decrease in accounts
receivable
(25,294
)
197,918
Decrease (increase) in inventories
12,115
(1,146
)
Decrease in contract assets
32,142
45
Increase in long-term accounts
receivable
(206,154
)
(14,434
)
Increase in other assets
(26,821
)
(8,405
)
Increase (decrease) in accounts
payable
184,511
(76,783
)
Increase in long-term accounts payable
212,577
18,568
Decrease in accrued expenses and other
liabilities
(35,371
)
(27,669
)
Net cash provided by operating
activities:
247,179
160,160
Cash flows from investing activities:
Purchases of property and equipment
(6,482
)
(9,106
)
Net cash used in investing activities:
(6,482
)
(9,106
)
Cash flows from financing activities:
Borrowings on ABL revolving credit
facility
1,144,826
1,016,980
Repayments on ABL revolving credit
facility
(1,186,997
)
(1,140,774
)
Net (repayments) borrowings under
inventory financing facilities
(4,545
)
108,257
Repurchases of common stock
(35,000
)
(117,129
)
Repayment of principal on the Notes
(16,895
)
—
Earnout and acquisition related
payments
(18,296
)
—
Other payments
(8,360
)
(7,988
)
Net cash used in financing activities:
(125,267
)
(140,654
)
Foreign currency exchange effect on cash,
cash equivalents and restricted cash balances
(5,074
)
1,652
Increase in cash, cash equivalents and
restricted cash
110,356
12,052
Cash, cash equivalents and restricted cash
at beginning of period
270,785
165,718
Cash, cash equivalents and restricted cash
at end of period
$
381,141
$
177,770
INSIGHT ENTERPRISES, INC. AND
SUBSIDIARIES
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL MEASURES
(IN THOUSANDS, EXCEPT PER
SHARE DATA)
(UNAUDITED)
Three Months Ended
March 31,
2024
2023
Adjusted Consolidated Earnings from
Operations:
GAAP consolidated EFO
$
99,986
$
77,461
Amortization of intangible assets
14,925
8,310
Other*
6,839
8,186
Adjusted non-GAAP consolidated EFO
$
121,750
$
93,957
GAAP EFO as a percentage of net sales
4.2
%
3.3
%
Adjusted non-GAAP EFO as a percentage of
net sales
5.1
%
4.0
%
Adjusted Consolidated Net
Earnings:
GAAP consolidated net earnings
$
67,027
$
49,972
Amortization of intangible assets
14,925
8,310
Other*
6,839
8,186
Income taxes on non-GAAP adjustments
(5,439
)
(4,201
)
Adjusted non-GAAP consolidated net
earnings
$
83,352
$
62,267
GAAP net earnings as a percentage of net
sales
2.8
%
2.2
%
Adjusted non-GAAP net earnings as a
percentage of net sales
3.5
%
2.7
%
Adjusted Diluted Earnings Per
Share:
GAAP diluted EPS
$
1.74
$
1.34
Amortization of intangible assets
0.39
0.22
Other
0.18
0.22
Income taxes on non-GAAP adjustments
(0.14
)
(0.11
)
Impact of benefit from note hedge
0.20
0.11
Adjusted non-GAAP diluted EPS
$
2.37
$
1.78
Shares used in diluted EPS calculation
38,435
37,207
Impact of benefit from Note hedge
(3,228
)
(2,310
)
Shares used in Adjusted non-GAAP diluted
EPS calculation
35,207
34,897
Adjusted North America Earnings from
Operations:
GAAP EFO from North America segment
$
84,023
$
63,186
Amortization of intangible assets
13,146
7,785
Other*
5,615
7,337
Adjusted non-GAAP EFO from North America
segment
$
102,784
$
78,308
GAAP EFO as a percentage of net sales
4.4
%
3.4
%
Adjusted non-GAAP EFO as a percentage of
net sales
5.4
%
4.3
%
Adjusted EMEA Earnings from
Operations:
GAAP EFO from EMEA segment
$
11,190
$
10,281
Amortization of intangible assets
1,670
412
Other
1,154
836
Adjusted non-GAAP EFO from EMEA
segment
$
14,014
$
11,529
GAAP EFO as a percentage of net sales
2.7
%
2.4
%
Adjusted non-GAAP EFO as a percentage of
net sales
3.4
%
2.7
%
Adjusted APAC Earnings from
Operations:
GAAP EFO from APAC segment
$
4,773
$
3,994
Amortization of intangible assets
109
113
Other
70
13
Adjusted non-GAAP EFO from APAC
segment
$
4,952
$
4,120
GAAP EFO as a percentage of net sales
7.7
%
6.3
%
Adjusted non-GAAP EFO as a percentage of
net sales
8.0
%
6.5
%
Adjusted EBITDA:
GAAP consolidated net earnings
$
67,027
$
49,972
Interest expense
15,269
11,688
Income tax expense
21,165
16,389
Depreciation and amortization of property
and equipment
6,961
6,353
Amortization of intangible assets
14,925
8,310
Other*
6,839
8,186
Adjusted non-GAAP EBITDA
$
132,186
$
100,898
GAAP consolidated net earnings as a
percentage of net sales
2.8
%
2.2
%
Adjusted non-GAAP EBITDA as a percentage
of net sales
5.6
%
4.3
%
*
Includes transformation costs of
$2.3 million and $4.0 million for the three months ended March 31,
2024 and 2023, respectively.
INSIGHT ENTERPRISES, INC. AND
SUBSIDIARIES
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL MEASURES
(IN THOUSANDS, EXCEPT PER
SHARE DATA)
(UNAUDITED)
Twelve Months Ended
March 31,
2024
2023
Adjusted return on invested
capital:
GAAP consolidated EFO
$
442,320
$
411,312
Amortization of intangible assets
42,846
33,277
Other5
34,754
26,421
Adjusted non-GAAP consolidated EFO
519,920
471,010
Income tax expense1
135,179
122,463
Adjusted non-GAAP consolidated EFO, net of
tax
$
384,741
$
348,547
Average stockholders’ equity2
$
1,651,965
$
1,596,949
Average debt2
739,136
744,068
Average cash2
(252,769
)
(145,661
)
Invested Capital
$
2,138,332
$
2,195,356
Adjusted non-GAAP ROIC (from GAAP
consolidated EFO)3
15.31
%
13.86
%
Adjusted non-GAAP ROIC (from non-GAAP
consolidated EFO)4
17.99
%
15.88
%
1
Assumed tax rate of 26.0%.
2
Average of previous five
quarters.
3
Computed as GAAP consolidated
EFO, net of tax of $115,003 and $106,941 for the twelve months
ended March 31, 2024 and 2023, respectively, divided by invested
capital.
4
Computed as Adjusted non-GAAP
consolidated EFO, net of tax, divided by invested capital.
5
Includes transformation costs of
$14.8 million and $16.4 million for the twelve months ended March
31, 2024 and 2023, respectively. Includes certain third-party data
center service outage related expenses, net of recoveries of $5.0
million for the twelve months ended March 31, 2024.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240502929174/en/
GLYNIS BRYAN CHIEF FINANCIAL OFFICER TEL. 480.333.3390
EMAIL glynis.bryan@insight.com
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