News Release Details

View all news

Insight Enterprises, Inc. Reports Second Quarter 2021 Results

08/05/2021

Insight Enterprises, Inc. (Nasdaq: NSIT) (the “Company”) today reported financial results for the quarter ended June 30, 2021. Highlights include:

  • Net sales increased 13% year over year to $2.23 billion
  • Gross profit increased 13% year over year to $366.7 million
  • Earnings from operations increased 19% to $88.5 million and was 4.0% of net sales
  • Adjusted earnings from operations increased 6% to $97.7 million and was 4.4% of net sales
  • Diluted earnings per share of $1.58 increased 20% year over year
  • Adjusted diluted earnings per share of $1.91 increased 9% year over year
  • Increased full year 2021 guidance for Adjusted diluted earnings per share

In the second quarter of 2021, net sales increased 13%, year over year. Gross profit also increased 13% while gross margin contracted 10 basis points compared to the second quarter of 2020. Earnings from operations of $88.5 million increased 19% compared to $74.2 million in the second quarter of 2020. Adjusted earnings from operations of $97.7 million increased 6% compared to $91.8 million in the second quarter of 2020. Diluted earnings per share for the quarter were $1.58, up 20%, year over year, and adjusted diluted earnings per share were $1.91, up 9% year over year.

“I’m pleased to report that our business saw double digit top line growth across all major categories of net sales. Gross margin was 16.4%, strong performance given compression on margins due to increased hardware net sales,” stated Ken Lamneck, President and Chief Executive Officer. “Given the ongoing supply chain constraints and longer lead times required for hardware orders, we are working to ensure our clients are well positioned in the queue for fulfillment. We are pleased to see the pipeline for future sales build to healthy levels for the second half of the year and into 2022,” stated Lamneck.

KEY HIGHLIGHTS

  • Consolidated net sales for the second quarter of 2021 of $2.23 billion increased 13%, year over year, when compared to the second quarter of 2020.
    • Net sales in North America increased 14%, year over year, to $1.76 billion;
    • Net sales in EMEA increased 6%, year over year, to $417.4 million; and
    • Net sales in APAC increased 40%, year over year, to $52.5 million.
  • Excluding the effects of fluctuating foreign currency exchange rates, consolidated net sales were up 10%, year over year, with growth in net sales in North America and APAC of 13% and 24%, respectively, year over year, partially offset by a decline in EMEA of 4%, year to year.
  • Consolidated gross profit increased to $366.7 million, an increase of 13% compared to the second quarter of 2020, with consolidated gross margin contracting 10 basis points to 16.4% of net sales.
    • Gross profit in North America increased 14%, year over year, to $278.9 million (15.8% gross margin);
    • Gross profit in EMEA increased 8%, year over year, to $73.5 million (17.6% gross margin); and
    • Gross profit in APAC increased 26%, year over year, to $14.3 million (27.2% gross margin).
  • Excluding the effects of fluctuating foreign currency exchange rates, consolidated gross profit was up 9%, year over year, with gross profit growth in North America and APAC of 11% each, year over year, partially offset by a decline in EMEA of 3%, year to year.
  • Consolidated earnings from operations increased 19% compared to the second quarter of 2020 to $88.5 million, or 4.0% of net sales.
    • Earnings from operations in North America increased 23%, year over year, to $64.1 million, or 3.6% of net sales;
    • Earnings from operations in EMEA increased 8%, year over year, to $19.3 million, or 4.6% of net sales; and
    • Earnings from operations in APAC increased 19%, year over year, to $5.0 million, or 9.6% of net sales.
  • Excluding the effects of fluctuating foreign currency exchange rates, consolidated earnings from operations were up 15%, year over year, with increased earnings from operations in North America and APAC of 21% and 6%, respectively, year over year, partially offset by a decline in EMEA of 1%, year to year.
  • Adjusted earnings from operations increased 6% compared to the second quarter of 2020 to $97.7 million, or 4.4% of net sales.
    • Adjusted earnings from operations in North America increased 8%, year over year, to $72.4 million, or 4.1% of net sales;
    • Adjusted earnings from operations in EMEA decreased 2%, year to year, to $20.1 million, or 4.8% of net sales; and
    • Adjusted earnings from operations in APAC increased 16%, year over year, to $5.2 million, or 9.8% of net sales.
  • Consolidated net earnings and diluted earnings per share for the second quarter of 2021 were $58.6 million and $1.58, respectively, at an effective tax rate of 25.4%.
  • Adjusted consolidated net earnings and Adjusted diluted earnings per share for the second quarter of 2021 were $67.7 million and $1.91, respectively.

In discussing financial results for the three and six months ended June 30, 2021 and 2020 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 such measures 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 and earnings from operations on a consolidated basis and in North America, EMEA and APAC 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 2021, the Company now expects to deliver net sales growth at the high-end of the previously stated guidance, which was between 4% and 8% over the prior year, and Adjusted diluted earnings per share is now expected to be between $6.75 and $6.90.

This outlook assumes

  • interest expense between $25 million and $28 million;
  • an effective tax rate of 25% to 26% for the full year 2021;
  • capital expenditures of $65 to $75 million, including the build out of our new corporate headquarters; and
  • an average share count for the full year of 35.5 million shares.

This outlook excludes acquisition-related intangibles amortization expense of approximately $32 million and the non-cash convertible debt discount and issuance costs, reported as part of interest expense, of approximately $12 million and assumes no acquisition-related or severance and restructuring expenses. Due to the inherent difficulty of forecasting some of these types of expenses, which impact net earnings and diluted earnings per share, the Company is unable to reasonably estimate the impact of such expenses, if any, to net earnings and diluted earnings per share. Accordingly, the Company is unable to provide a reconciliation of GAAP to non-GAAP diluted earnings per share for the full year 2021 forecast.

CONFERENCE CALL AND WEBCAST

The Company will host a conference call and live web cast today at 9:00 a.m. ET to discuss second quarter 2021 results of operations. A live web cast 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 web cast 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 this event link . 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 consolidated earnings from operations, Adjusted consolidated net earnings and Adjusted diluted earnings per share exclude (i) severance and restructuring expenses, (ii) certain acquisition and integration related expenses, (iii) amortization of intangible assets, and (iv) the tax effects of each of these items, as applicable. Adjusted consolidated net earnings and Adjusted diluted earnings per share also exclude amortization of debt discount and issuance costs associated with the issuance of the Company’s convertible senior notes due 2025. 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 second quarter of 2021 was in excess of $68.32, which is the initial conversion price of the convertible senior notes. Adjusted EBITDA adds back (i) interest expense, (ii) income tax expense, (iii) depreciation and amortization of property and equipment, (iv) amortization of intangibles, (v) non-cash stock based compensation (vi) severance and restructuring expenses and (vii) certain acquisition and integration related expenses. Adjusted return on invested capital (“ROIC”) excludes (i) severance and restructuring expenses, (ii) certain acquisition and integration related expenses, (iii) impairment of construction in progress, (iv) loss on sale of property, (v) litigation settlement proceeds, and (vi) 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 June 30,

 

 

Six Months Ended June 30,

 

 

 

2021

 

 

2020

 

 

change

 

 

2021

 

 

2020

 

 

change

 

Insight Enterprises, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Products

 

$

1,889,178

 

 

$

1,672,933

 

 

13%

 

 

$

3,782,198

 

 

$

3,521,249

 

 

7%

 

Services

 

$

340,323

 

 

$

295,802

 

 

15%

 

 

$

640,371

 

 

$

591,537

 

 

8%

 

Total net sales

 

$

2,229,501

 

 

$

1,968,735

 

 

13%

 

 

$

4,422,569

 

 

$

4,112,786

 

 

8%

 

Gross profit

 

$

366,683

 

 

$

324,389

 

 

13%

 

 

$

698,157

 

 

$

649,725

 

 

7%

 

Gross margin

 

 

16.4

%

 

 

16.5

%

 

(10 bps)

 

 

 

15.8

%

 

 

15.8

%

 

 

 

Selling and administrative expenses

 

$

277,087

 

 

$

242,580

 

 

14%

 

 

$

548,277

 

 

$

511,443

 

 

7%

 

Severance and restructuring expenses

 

$

1,127

 

 

$

7,010

 

 

(84%)

 

 

$

(5,613

)

 

$

9,154

 

 

(> 100%)

 

Acquisition and integration related expenses

 

$

 

 

$

611

 

 

*

 

 

$

 

 

$

2,077

 

 

*

 

Earnings from operations

 

$

88,469

 

 

$

74,188

 

 

19%

 

 

$

155,493

 

 

$

127,051

 

 

22%

 

Net earnings

 

$

58,561

 

 

$

46,385

 

 

26%

 

 

$

101,729

 

 

$

80,346

 

 

27%

 

Diluted earnings per share

 

$

1.58

 

 

$

1.32

 

 

20%

 

 

$

2.76

 

 

$

2.27

 

 

22%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

North America

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Products

 

$

1,500,579

 

 

$

1,310,172

 

 

15%

 

 

$

2,918,806

 

 

$

2,743,821

 

 

6%

 

Services

 

$

259,050

 

 

$

228,975

 

 

13%

 

 

$

495,604

 

 

$

469,707

 

 

6%

 

Total net sales

 

$

1,759,629

 

 

$

1,539,147

 

 

14%

 

 

$

3,414,410

 

 

$

3,213,528

 

 

6%

 

Gross profit

 

$

278,897

 

 

$

244,896

 

 

14%

 

 

$

532,386

 

 

$

501,824

 

 

6%

 

Gross margin

 

 

15.8

%

 

 

15.9

%

 

(10 bps)

 

 

 

15.6

%

 

 

15.6

%

 

 

 

Selling and administrative expenses

 

$

213,900

 

 

$

187,313

 

 

14%

 

 

$

420,706

 

 

$

398,516

 

 

6%

 

Severance and restructuring expenses

 

$

878

 

 

$

4,904

 

 

(82%)

 

 

$

(6,360

)

 

$

7,026

 

 

(> 100%)

 

Acquisition and integration related expenses

 

$

 

 

$

611

 

 

*

 

 

$

 

 

$

1,873

 

 

*

 

Earnings from operations

 

$

64,119

 

 

$

52,068

 

 

23%

 

 

$

118,040

 

 

$

94,409

 

 

25%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales Mix

 

 

 

 

 

 

 

 

 

**

 

 

 

 

 

 

 

 

 

 

**

 

Hardware

 

 

66

%

 

 

66

%

 

14%

 

 

 

67

%

 

 

67

%

 

6%

 

Software

 

 

19

%

 

 

19

%

 

16%

 

 

 

19

%

 

 

18

%

 

8%

 

Services

 

 

15

%

 

 

15

%

 

13%

 

 

 

14

%

 

 

15

%

 

6%

 

 

 

 

100

%

 

 

100

%

 

14%

 

 

 

100

%

 

 

100

%

 

6%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EMEA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Products

 

$

355,392

 

 

$

340,036

 

 

5%

 

 

$

785,786

 

 

$

716,087

 

 

10%

 

Services

 

$

61,982

 

 

$

51,981

 

 

19%

 

 

$

110,424

 

 

$

94,816

 

 

16%

 

Total net sales

 

$

417,374

 

 

$

392,017

 

 

6%

 

 

$

896,210

 

 

$

810,903

 

 

11%

 

Gross profit

 

$

73,529

 

 

$

68,180

 

 

8%

 

 

$

139,564

 

 

$

126,954

 

 

10%

 

Gross margin

 

 

17.6

%

 

 

17.4

%

 

20 bps

 

 

 

15.6

%

 

 

15.7

%

 

(10 bps)

 

Selling and administrative expenses

 

$

53,957

 

 

$

48,177

 

 

12%

 

 

$

109,404

 

 

$

98,421

 

 

11%

 

Severance and restructuring expenses

 

$

240

 

 

$

2,093

 

 

(89%)

 

 

$

738

 

 

$

2,099

 

 

(65%)

 

Acquisition and integration related expenses

 

$

 

 

$

 

 

*

 

 

$

 

 

$

204

 

 

*

 

Earnings from operations

 

$

19,332

 

 

$

17,910

 

 

8%

 

 

$

29,422

 

 

$

26,230

 

 

12%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales Mix

 

 

 

 

 

 

 

 

 

**

 

 

 

 

 

 

 

 

 

 

**

 

Hardware

 

 

41

%

 

 

39

%

 

11%

 

 

 

41

%

 

 

40

%

 

12%

 

Software

 

 

44

%

 

 

48

%

 

(1%)

 

 

 

47

%

 

 

48

%

 

8%

 

Services

 

 

15

%

 

 

13

%

 

19%

 

 

 

12

%

 

 

12

%

 

16%

 

 

 

 

100

%

 

 

100

%

 

6%

 

 

 

100

%

 

 

100

%

 

11%

 

* Percentage change not considered meaningful.
** 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.

Financial Summary Table (continued)

(dollars in thousands, except per share data)

(Unaudited)

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2021

 

 

2020

 

 

change

 

 

2021

 

 

2020

 

 

change

 

APAC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Products

 

$

33,207

 

 

$

22,725

 

 

46%

 

 

$

77,606

 

 

$

61,341

 

 

27%

 

Services

 

$

19,291

 

 

$

14,846

 

 

30%

 

 

$

34,343

 

 

$

27,014

 

 

27%

 

Total net sales

 

$

52,498

 

 

$

37,571

 

 

40%

 

 

$

111,949

 

 

$

88,355

 

 

27%

 

Gross profit

 

$

14,257

 

 

$

11,313

 

 

26%

 

 

$

26,207

 

 

$

20,947

 

 

25%

 

Gross margin

 

 

27.2

%

 

 

30.1

%

 

(290 bps)

 

 

 

23.4

%

 

 

23.7

%

 

(30 bps)

 

Selling and administrative expenses

 

$

9,230

 

 

$

7,090

 

 

30%

 

 

$

18,167

 

 

$

14,506

 

 

25%

 

Severance and restructuring expenses

 

$

9

 

 

$

13

 

 

(31%)

 

 

$

9

 

 

$

29

 

 

(69%)

 

Earnings from operations

 

$

5,018

 

 

$

4,210

 

 

19%

 

 

$

8,031

 

 

$

6,412

 

 

25%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales Mix

 

 

 

 

 

 

 

 

 

**

 

 

 

 

 

 

 

 

 

 

**

 

Hardware

 

 

22

%

 

 

18

%

 

72%

 

 

 

19

%

 

 

16

%

 

46%

 

Software

 

 

41

%

 

 

42

%

 

35%

 

 

 

50

%

 

 

53

%

 

20%

 

Services

 

 

37

%

 

 

40

%

 

30%

 

 

 

31

%

 

 

31

%

 

27%

 

 

 

 

100

%

 

 

100

%

 

40%

 

 

 

100

%

 

 

100

%

 

27%

 

* Percentage change not considered meaningful.
** 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, web cast 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 our future responses to and the potential impact of coronavirus strain COVID-19 (“COVID-19”) on our Company, the Company’s future financial performance and results of operations, including Adjusted selling and administrative expenses*, the Company’s anticipated effective tax rate, capital expenditures, expected average share count, the Company’s expectations regarding cash flow, the Company’s expectations regarding current supply constraints, future trends in the IT market, including due to COVID-19, our business strategy and our strategic initiatives, 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 “Risk Factors” in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2020:

  • actions of the Company’s competitors, including manufacturers and publishers of products the Company sells;
  • the Company’s reliance on 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;
  • the duration and severity of the COVID-19 pandemic and its effects on the Company’s business, results of operations and financial condition, as well as the widespread outbreak of any other illnesses or communicable diseases;
  • general economic conditions, economic uncertainties and changes in geopolitical conditions;
  • changes in the IT industry and/or rapid changes in technology;
  • supply constraints for hardware including devices;
  • accounts receivable risks, including increased credit loss experience or extended payment terms with the Company’s clients;
  • the Company’s reliance on independent shipping companies;
  • the risks associated with the Company’s international operations;
  • natural disasters or other adverse occurrences;
  • disruptions in the Company’s IT systems and voice and data networks;
  • cyberattacks or breaches of data privacy and security regulations;
  • intellectual property infringement claims and challenges to the Company’s registered trademarks and trade names;
  • legal proceedings, including PCM related litigation, client audits and failure to comply with laws and regulations;
  • failure to comply with the terms and conditions of the Company’s commercial and public sector contracts;
  • exposure to changes in, interpretations of, or enforcement trends related to tax rules and regulations;
  • the Company’s potential to draw down a substantial amount of indebtedness;
  • the conditional conversion feature of the convertible notes, which has been triggered, may adversely affect the Company’s financial condition and operating results;
  • the accounting method for convertible debt securities that may be settled in cash, such as the convertible notes, could have a material effect on the Company’s reported financial results;
  • the Company is subject to counterparty risk with respect to the convertible note hedge transactions;
  • risks associated with the discontinuation of LIBOR as a benchmark rate;
  • increased debt and interest expense and availability of funds under the Company’s financing facilities;
  • possible significant fluctuations in the Company’s future operating results as well as seasonality and variability in customer demands;
  • the Company’s dependence on certain key personnel;
  • risks associated with the integration and operation of acquired businesses, including the 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.

* Due to the inherent difficulty of forecasting these types of expenses, the Company is unable to provide a reconciliation of GAAP to non-GAAP selling and administrative expenses for the full year 2021 forecast. NSIT-F

INSIGHT ENTERPRISES, INC. AND SUBSIDIARIES

Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

 

 

Three Months Ended

June 30,

 

 

Six Months Ended

June 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Net sales:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Products

 

 

1,889,178

 

 

$

1,672,933

 

 

$

3,782,198

 

 

$

3,521,249

 

Services

 

 

340,323

 

 

 

295,802

 

 

 

640,371

 

 

 

591,537

 

Total net sales

 

 

2,229,501

 

 

 

1,968,735

 

 

 

4,422,569

 

 

 

4,112,786

 

Costs of goods sold:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Products

 

 

1,715,729

 

 

 

1,517,947

 

 

 

3,436,987

 

 

 

3,188,185

 

Services

 

 

147,089

 

 

 

126,399

 

 

 

287,425

 

 

 

274,876

 

Total costs of goods sold

 

 

1,862,818

 

 

 

1,644,346

 

 

 

3,724,412

 

 

 

3,463,061

 

Gross profit

 

 

366,683

 

 

 

324,389

 

 

 

698,157

 

 

 

649,725

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling and administrative expenses

 

 

277,087

 

 

 

242,580

 

 

 

548,277

 

 

 

511,443

 

Severance and restructuring expenses, net

 

 

1,127

 

 

 

7,010

 

 

 

(5,613

)

 

 

9,154

 

Acquisition and integration related expenses

 

 

 

 

 

611

 

 

 

 

 

 

2,077

 

Earnings from operations

 

 

88,469

 

 

 

74,188

 

 

 

155,493

 

 

 

127,051

 

Non-operating (income) expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

9,583

 

 

 

10,219

 

 

 

19,552

 

 

 

22,045

 

Other expense (income), net

 

 

346

 

 

 

1,098

 

 

 

734

 

 

 

(465

)

Earnings before income taxes

 

 

78,540

 

 

 

62,871

 

 

 

135,207

 

 

 

105,471

 

Income tax expense

 

 

19,979

 

 

 

16,486

 

 

 

33,478

 

 

 

25,125

 

Net earnings

 

$

58,561

 

 

$

46,385

 

 

$

101,729

 

 

$

80,346

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

1.67

 

 

$

1.32

 

 

$

2.89

 

 

$

2.29

 

Diluted

 

$

1.58

 

 

$

1.32

 

 

$

2.76

 

 

$

2.27

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in per share calculations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

35,097

 

 

 

35,060

 

 

 

35,148

 

 

 

35,147

 

Diluted

 

 

37,135

 

 

 

35,260

 

 

 

36,917

 

 

 

35,453

 

INSIGHT ENTERPRISES, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(In thousands)

(Unaudited)

 

 

June 30,

2021

 

 

December 31,

2020

 

ASSETS

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

107,813

 

 

$

128,313

 

Accounts receivable, net

 

 

3,045,324

 

 

 

2,685,448

 

Inventories

 

 

214,385

 

 

 

185,650

 

Other current assets

 

 

187,707

 

 

 

177,039

 

Total current assets

 

 

3,555,229

 

 

 

3,176,450

 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

149,979

 

 

 

146,016

 

Goodwill

 

 

430,846

 

 

 

429,368

 

Intangible assets, net

 

 

232,487

 

 

 

246,915

 

Other assets

 

 

298,506

 

 

 

311,983

 

 

 

$

4,667,047

 

 

$

4,310,732

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable – trade

 

$

1,782,131

 

 

$

1,461,312

 

Accounts payable – inventory financing facilities

 

 

309,316

 

 

 

356,930

 

Accrued expenses and other current liabilities

 

 

391,557

 

 

 

408,117

 

Current portion of long-term debt

 

 

650

 

 

 

1,105

 

Total current liabilities

 

 

2,483,654

 

 

 

2,227,464

 

 

 

 

 

 

 

 

 

 

Long-term debt

 

 

483,252

 

 

 

437,581

 

Deferred income taxes

 

 

35,268

 

 

 

33,209

 

Other liabilities

 

 

263,046

 

 

 

270,049

 

 

 

 

3,265,220

 

 

 

2,968,303

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Preferred stock

 

 

 

 

 

 

Common stock

 

 

348

 

 

 

351

 

Additional paid-in capital

 

 

361,412

 

 

 

364,288

 

Retained earnings

 

 

1,050,074

 

 

 

993,245

 

Accumulated other comprehensive loss – foreign currency

translation adjustments

 

 

(10,007

)

 

 

(15,455

)

Total stockholders’ equity

 

 

1,401,827

 

 

 

1,342,429

 

 

 

$

4,667,047

 

 

$

4,310,732

 

INSIGHT ENTERPRISES, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

 

Six Months Ended

June 30,

 

 

 

2021

 

 

2020

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net earnings

 

$

101,729

 

 

$

80,346

 

Adjustments to reconcile net earnings to net cash provided by

operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

28,498

 

 

 

34,623

 

Provision for losses on accounts receivable

 

 

3,838

 

 

 

6,570

 

Non-cash stock-based compensation

 

 

9,375

 

 

 

7,241

 

Deferred income taxes

 

 

1,815

 

 

 

(1,464

)

Amortization of debt discount and issuance costs

 

 

8,375

 

 

 

8,002

 

Other adjustments

 

 

(5,308

)

 

 

2,829

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

Increase in accounts receivable

 

 

(362,109

)

 

 

(182,511

)

Increase in inventories

 

 

(31,072

)

 

 

(26,647

)

(Increase) decrease in other assets

 

 

(8,282

)

 

 

46,088

 

Increase in accounts payable

 

 

294,860

 

 

 

529,742

 

Decrease in accrued expenses and other liabilities

 

 

(36,532

)

 

 

(7,290

)

Net cash provided by operating activities

 

 

5,187

 

 

 

497,529

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Proceeds from sale of assets held for sale

 

 

27,211

 

 

 

14,218

 

Purchases of property and equipment

 

 

(16,837

)

 

 

(14,494

)

Acquisitions, net of cash and cash equivalents acquired

 

 

 

 

 

(6,406

)

Net cash provided by (used in) investing activities

 

 

10,374

 

 

 

(6,682

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Borrowings on ABL revolving credit facility

 

 

1,838,680

 

 

 

1,381,179

 

Repayments on ABL revolving credit facility

 

 

(1,798,680

)

 

 

(1,807,421

)

Net (repayments) borrowings under inventory financing facilities

 

 

(17,538

)

 

 

7,457

 

Repurchases of treasury stock

 

 

(50,000

)

 

 

(25,000

)

Other payments

 

 

(7,944

)

 

 

(6,791

)

Net cash used in financing activities

 

 

(35,482

)

 

 

(450,576

)

Foreign currency exchange effect on cash, cash equivalents and

restricted cash balances

 

 

(594

)

 

 

(814

)

(Decrease) increase in cash, cash equivalents and restricted cash

 

 

(20,515

)

 

 

39,457

 

Cash, cash equivalents and restricted cash at beginning of period

 

 

130,582

 

 

 

116,297

 

Cash, cash equivalents and restricted cash at end of period

 

$

110,067

 

 

$

155,754

 

INSIGHT ENTERPRISES, INC. AND SUBSIDIARIES

Reconciliation of GAAP to non-GAAP Financial Measures

(In thousands, except per share data)

(unaudited)

 

 

Three Months Ended

June 30,

 

 

Six Months Ended

June 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Adjusted Consolidated Earnings from Operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP consolidated EFO

 

$

88,469

 

 

$

74,188

 

 

$

155,493

 

 

$

127,051

 

Amortization of intangible assets

 

 

8,068

 

 

 

10,014

 

 

 

16,109

 

 

 

20,122

 

Other

 

 

1,127

 

 

 

7,621

 

 

 

(5,613

)

 

 

11,231

 

Adjusted non-GAAP consolidated EFO

 

$

97,664

 

 

$

91,823

 

 

$

165,989

 

 

$

158,404

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP EFO as a percentage of net sales

 

 

4.0

%

 

 

3.8

%

 

 

3.5

%

 

 

3.1

%

Adjusted non-GAAP EFO as a percentage of net sales

 

 

4.4

%

 

 

4.7

%

 

 

3.8

%

 

 

3.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Consolidated Net Earnings:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP consolidated net earnings

 

$

58,561

 

 

$

46,385

 

 

$

101,729

 

 

$

80,346

 

Amortization of intangible assets

 

 

8,068

 

 

 

10,014

 

 

 

16,109

 

 

 

20,122

 

Amortization of debt discount and issuance costs

 

 

3,013

 

 

 

2,886

 

 

 

5,996

 

 

 

5,717

 

Other

 

 

1,127

 

 

 

7,621

 

 

 

(5,613

)

 

 

11,231

 

Income taxes on non-GAAP adjustments

 

 

(3,042

)

 

 

(5,067

)

 

 

(3,961

)

 

 

(9,227

)

Adjusted non-GAAP consolidated net earnings

 

$

67,727

 

 

$

61,839

 

 

$

114,260

 

 

$

108,189

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Diluted Earnings Per Share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP diluted EPS

 

$

1.58

 

 

$

1.32

 

 

$

2.76

 

 

$

2.27

 

Amortization of intangible assets

 

 

0.21

 

 

 

0.28

 

 

 

0.43

 

 

 

0.56

 

Amortization of debt discount and issuance costs

 

 

0.08

 

 

 

0.08

 

 

 

0.16

 

 

 

0.16

 

Other

 

 

0.03

 

 

 

0.22

 

 

 

(0.15

)

 

 

0.32

 

Income taxes on non-GAAP adjustments

 

 

(0.08

)

 

 

(0.15

)

 

 

(0.11

)

 

 

(0.26

)

Impact of benefit from note hedge

 

 

0.09

 

 

 

 

 

 

0.12

 

 

 

 

Adjusted non-GAAP diluted EPS

 

$

1.91

 

 

$

1.75

 

 

$

3.21

 

 

$

3.05

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in diluted EPS calculation

 

 

37,135

 

 

 

35,260

 

 

 

36,917

 

 

 

35,453

 

Impact of benefit from note hedge

 

 

(1,660

)

 

 

 

 

 

(1,375

)

 

 

 

Shares used in Adjusted non-GAAP diluted EPS calculation

 

 

35,475

 

 

 

35,260

 

 

 

35,542

 

 

 

35,453

 

INSIGHT ENTERPRISES, INC. AND SUBSIDIARIES

Reconciliation of GAAP to NON-GAAP Financial Measures (Continued)

(In thousands, except per share data)

(unaudited)

 

 

Three Months Ended

June 30,

 

 

Six Months Ended

June 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Adjusted North America Earnings from Operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP EFO from North America segment

 

$

64,119

 

 

$

52,068

 

 

$

118,040

 

 

$

94,409

 

Amortization of intangible assets

 

 

7,440

 

 

 

9,371

 

 

 

14,857

 

 

 

18,864

 

Other

 

 

878

 

 

 

5,515

 

 

 

(6,360

)

 

 

8,899

 

Adjusted non-GAAP EFO from North America segment

 

$

72,437

 

 

$

66,954

 

 

$

126,537

 

 

$

122,172

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP EFO as a percentage of net sales

 

 

3.6

%

 

 

3.4

%

 

 

3.5

%

 

 

2.9

%

Adjusted non-GAAP EFO as a percentage of net sales

 

 

4.1

%

 

 

4.4

%

 

 

3.7

%

 

 

3.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EMEA Earnings from Operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP EFO from EMEA segment

 

$

19,332

 

 

$

17,910

 

 

$

29,422

 

 

$

26,230

 

Amortization of intangible assets

 

 

501

 

 

 

534

 

 

 

997

 

 

 

1,040

 

Other

 

 

240

 

 

 

2,093

 

 

 

738

 

 

 

2,303

 

Adjusted non-GAAP EFO from EMEA segment

 

$

20,073

 

 

$

20,537

 

 

$

31,157

 

 

$

29,573

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP EFO as a percentage of net sales

 

 

4.6

%

 

 

4.6

%

 

 

3.3

%

 

 

3.2

%

Adjusted non-GAAP EFO as a percentage of net sales

 

 

4.8

%

 

 

5.2

%

 

 

3.5

%

 

 

3.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted APAC Earnings from Operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP EFO from APAC segment

 

$

5,018

 

 

$

4,210

 

 

$

8,031

 

 

$

6,412

 

Amortization of intangible assets

 

 

127

 

 

 

109

 

 

 

255

 

 

 

218

 

Other

 

 

9

 

 

 

13

 

 

 

9

 

 

 

29

 

Adjusted non-GAAP EFO from APAC segment

 

$

5,154

 

 

$

4,332

 

 

$

8,295

 

 

$

6,659

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP EFO as a percentage of net sales

 

 

9.6

%

 

 

11.2

%

 

 

7.2

%

 

 

7.3

%

Adjusted non-GAAP EFO as a percentage of net sales

 

 

9.8

%

 

 

11.5

%

 

 

7.4

%

 

 

7.5

%

INSIGHT ENTERPRISES, INC. AND SUBSIDIARIES

Reconciliation of GAAP to NON-GAAP Financial Measures (Continued)

(In thousands, except per share data)

(unaudited)

 

 

Three Months Ended

June 30,

 

 

Six Months Ended

June 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Adjusted EBITDA:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP consolidated net earnings

 

$

58,561

 

 

$

46,385

 

 

$

101,729

 

 

$

80,346

 

Interest expense

 

 

9,676

 

 

 

10,262

 

 

 

19,762

 

 

 

22,180

 

Income tax expense

 

 

19,979

 

 

 

16,486

 

 

 

33,478

 

 

 

25,125

 

Depreciation and amortization of property and equipment

 

 

6,208

 

 

 

7,212

 

 

 

12,389

 

 

 

14,501

 

Amortization of intangible assets

 

 

8,068

 

 

 

10,014

 

 

 

16,109

 

 

 

20,122

 

Non-cash stock-based compensation

 

 

4,659

 

 

 

2,832

 

 

 

9,375

 

 

 

7,241

 

Other

 

 

1,127

 

 

 

7,621

 

 

 

(5,613

)

 

 

11,231

 

Adjusted non-GAAP EBITDA

 

$

108,278

 

 

$

100,812

 

 

$

187,229

 

 

$

180,746

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP consolidated net earnings as a percentage of net sales

 

 

2.6

%

 

 

2.4

%

 

 

2.3

%

 

 

2.0

%

Adjusted non-GAAP EBITDA as a percentage of net sales

 

 

4.9

%

 

 

5.1

%

 

 

4.2

%

 

 

4.4

%

 

 

Twelve Months Ended

June 30,

 

 

 

2021

 

 

2020

 

Adjusted return on invested capital:

 

 

 

 

 

 

 

 

GAAP consolidated EFO

 

$

300,017

 

 

$

238,489

 

Other

 

 

(3,566

)

 

 

25,286

 

Adjusted non-GAAP consolidated EFO*

 

 

296,451

 

 

 

263,775

 

Income tax expense**

 

 

77,077

 

 

 

68,582

 

Adjusted non-GAAP consolidated EFO, net of tax

 

$

219,374

 

 

$

195,193

 

Average stockholders’ equity***

 

$

1,319,534

 

 

$

1,140,093

 

Average debt***

 

 

414,685

 

 

 

586,456

 

Average cash***

 

 

(120,796

)

 

 

(116,764

)

Invested Capital

 

$

1,613,423

 

 

$

1,609,785

 

 

 

 

 

 

 

 

 

 

Adjusted non-GAAP ROIC (from GAAP consolidated EFO) ****

 

 

13.76

%

 

 

10.96

%

Adjusted non-GAAP ROIC (from non-GAAP consolidated

EFO) *****

 

 

13.60

%

 

 

12.13

%

* The adjusted non-GAAP consolidated EFO amount used for the Adjusted non-GAAP ROIC calculation does not exclude amortization of intangible assets. This calculation remains consistent with the metric utilized in management’s compensation plan.
** Assumed tax rate of 26.0%.
*** Average of previous five quarters.
**** Computed as GAAP consolidated EFO, net of tax of $78,004 and $62,007 for the twelve months ended June 30, 2021 and 2020, respectively, divided by invested capital.
***** Computed as Adjusted non-GAAP consolidated EFO, net of tax, divided by invested capital.

Glynis Bryan
Chief Financial Officer
Tel. 480.333.3390
Email glynis.bryan@insight.com

Source: Insight Enterprises Inc.

Multimedia Files:

Categories: Press Releases
View all news

Michelle Clemente
Investor Relations
480-687-6611
michelle.clemente@insight.com

Rosalind Berkley
Investor Relations
480.333.3420
Rosalind.Berkley@insight.com

Scott Walters
Media Relations
480.889.9798
scott.walters@insight.com

Transfer Agent
EQ Shareowner Services
1110 Centre Pointe Curve, Suite 101
Mendota Heights, MN 55120
800.468.9716
www.shareowneronline.com