Press Release

Insight Enterprises, Inc. Reports Fourth Quarter And Full Year 2016 Results

February 8, 2017 4:00 PM EST

TEMPE, ARIZ.-- Insight Enterprises, Inc. (Nasdaq:NSIT) (the "Company") today reported results of operations for the quarter and full year ended December 31, 2016.

  • Net sales up 6% to $1.47 billion for the fourth quarter.
  • Earnings from operations up 33% to $40.7 million for the fourth quarter.

In the fourth quarter of 2016, consolidated net sales were $1.47 billion, up 6% year over year. This improvement was driven by solid top-line growth in each of the Company's geographic operating segments, including organic growth in hardware, software and services on a global basis. Consolidated net sales for the full year 2016 were $5.49 billion, up 2% year over year. Excluding the effects of fluctuating foreign currency exchange rates, consolidated net sales for the full year 2016 increased 4%, with growth of 4% reported by each of North America and EMEA, while APAC's net sales were flat year over year.

"Our fourth quarter top-line results reflect solid sales execution in our core business as well as the validation of our strategy to expand our value-added services offerings globally, as evidenced by the double-digit organic growth reported in this important category," stated Ken Lamneck, President and Chief Executive Officer. "With the acquisition of Ignia in the third quarter of 2016 and Datalink in January of 2017, our portfolio of offerings for 2017 is stronger than ever, with deep technical and consulting capabilities around data center, hybrid Cloud, application development and workforce enablement," stated Lamneck.

Consolidated earnings from operations in the fourth quarter of 2016 increased 33% year over year to $40.7 million and diluted earnings per share increased to $0.59 compared to $0.50 for the fourth quarter of 2015. Consolidated earnings from operations for the full year increased 18% year over year to $148.8 million and diluted earnings per share increased 17% to $2.32 compared to $1.98 for 2015. Adjusted diluted earnings per share was $0.72 in the fourth quarter of 2016 compared to $0.57 reported in the fourth quarter of last year. Adjusted diluted earnings per share for the full year 2016 was $2.52 compared to $2.11 reported in 2015.*

"I am pleased with our team's execution in 2016. We delivered top-line growth overall, gaining market share in key categories in North America and EMEA. Just as important, our focus on profitability and tight cost management discipline allowed us to deliver double-digit earnings from operations growth for the full year 2016," stated Lamneck. "As we head into 2017, we believe that our strong foundation, built on strategic and operational discipline, combined with Datalink's deep technical talent and complementary offerings, will position us well to deliver value to our clients, partners and shareholders in 2017."

KEY HIGHLIGHTS

Results for the Quarter:

  • Consolidated net sales of $1.5 billion for the fourth quarter of 2016 increased 6% compared to the fourth quarter of 2015.
    • Net sales in North America of $1.1 billion were up 6% year over year;
    • Net sales in EMEA of $361.8 million increased 6% year over year; and
    • Net sales in APAC of $48.5 million increased 7% year over year.
  • Excluding the effects of fluctuating foreign currency exchange rates, consolidated net sales increased 8% year over year, with net sales growth in North America, EMEA and APAC of 6%, 17% and 5%, respectively, year over year.
  • Consolidated gross profit of $191.0 million increased 6% compared to the fourth quarter of 2015, with consolidated gross margin remaining flat at 13.0% of net sales.
    • Gross profit in North America of $133.6 million (12.6% gross margin) increased 6% year over year;
    • Gross profit in EMEA of $48.9 million (13.5% gross margin) increased 2% year over year; and
    • Gross profit in APAC of $8.5 million (17.6% gross margin) increased 17% year over year.
  • Excluding the effects of fluctuating foreign currency exchange rates, consolidated gross profit increased 9% year over year, and gross profit in North America, EMEA and APAC increased 6%, 14% and 15%, respectively, year over year.
  • Consolidated earnings from operations increased 33% compared to the fourth quarter of 2015 to $40.7 million, or 2.8% of net sales.
    • Earnings from operations in North America increased 20% year over year to $29.2 million, or 2.8% of net sales;
    • Earnings from operations in EMEA increased 114% year over year to $9.3 million, or 2.6% of net sales; and
    • Earnings from operations in APAC increased 11% year over year to $2.2 million, or 4.6% of net sales.
  • Excluding the effects of fluctuating foreign currency exchange rates, consolidated earnings from operations increased 37% year over year, and earnings from operations in North America, EMEA and APAC increased 20%, 162% and 11%, respectively, year over year.
  • Adjusted consolidated earnings from operations increased 37% year over year to $45.9 million, or 3.1% of net sales for the fourth quarter of 2016.*
  • Consolidated net earnings and diluted earnings per share for the fourth quarter of 2016 were $21.1 million and $0.59, respectively, at an effective tax rate of 45.7%, which reflects the effect of a change in tax law that was enacted in December 2016 related to the taxation of foreign currency translation gains or losses arising from qualified business units and the effect of non-deductible acquisition-related expenses incurred during the fourth quarter of 2016.
  • Adjusted consolidated net earnings and diluted earnings per share for the fourth quarter of 2016 were $26.0 million and $0.72, respectively.*

Results for the Year:

  • Consolidated net sales of $5.5 billion for 2016 increased 2% compared to 2015.
    • Net sales in North America of $4.0 billion were up 4% year over year;
    • Net sales in EMEA of $1.3 billion decreased 2% year to year; and
    • Net sales in APAC of $175.1 million decreased 2% year to year.
  • Excluding the effects of fluctuating foreign currency exchange rates, consolidated net sales increased 4% year over year, with net sales growth in each of North America and EMEA of 4% year over year, while net sales in APAC remained flat year over year.
  • Consolidated gross profit of $743.1 million increased 4% compared to 2015, with consolidated gross margin increasing approximately 20 basis points to 13.5% of net sales.
    • Gross profit in North America of $525.5 million (13.2% gross margin) increased 5% year over year;
    • Gross profit in EMEA of $185.7 million (13.9% gross margin) was flat year over year; and
    • Gross profit in APAC of $31.9 million (18.2% gross margin) increased 12% year over year.
  • Excluding the effects of fluctuating foreign currency exchange rates, consolidated gross profit increased 6% year over year, and gross profit in North America, EMEA and APAC increased 5%, 7% and 14%, respectively, year over year.
  • Consolidated earnings from operations increased 18% compared to 2015 to $148.8 million, or 2.7% of net sales.
    • Earnings from operations in North America increased 13% year over year to $116.9 million, or 2.9% of net sales;
    • Earnings from operations in EMEA increased 44% year over year to $23.9 million, or 1.8% of net sales; and
    • Earnings from operations in APAC increased 32% year over year to $8.0 million, or 4.6% of net sales.
  • Excluding the effects of fluctuating foreign currency exchange rates, consolidated earnings from operations increased 20% year over year, and earnings from operations in North America, EMEA and APAC increased 13%, 60% and 33%, respectively, year over year.
  • Adjusted consolidated earnings from operations increased 19% year over year to $157.5 million, or 2.9% of net sales, for 2016.*
  • Consolidated net earnings and diluted earnings per share for 2016 were $84.7 million and $2.32, respectively, at an effective tax rate of 39.3%, which reflects the tax law change and non-deductible acquisition-related expenses incurred during the fourth quarter of 2016 noted previously.
  • Adjusted consolidated net earnings and diluted earnings per share for 2016 were $92.0 million and $2.52, respectively.*

* In discussing financial results for the three months and years ended December 31, 2016 and 2015 in this press release, the Company refers to certain financial measures that are not 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." Adjusted measures exclude (i) severance and restructuring expenses recorded in all periods, (ii) certain acquisition-related expenses and the gain recorded on an asset held for sale during 2016, (iii) a non-cash real estate impairment recorded during 2015 on real estate that was sold in 2016 and (iv) the tax effects of each of these items. 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.

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 2017, with the addition of Datalink, which the Company acquired on January 6, 2017, the Company expects its business to deliver sales growth of 12% to 15% compared to 2016. The Company also expects Adjusted diluted earnings per share for the full year 2017 to be between $2.80 and $2.90.

This outlook for 2017 assumes:

  • amortization expense associated with acquired intangible assets of $16.7 million;
  • an effective tax rate of approximately 37%; and
  • capital expenditures of $15 to $20 million.

This outlook does not assume any severance and restructuring or acquisition-related expenses. Due to the inherent difficulty of forecasting these types of expenses, which impact net earnings and diluted earnings per share, the Company is unable to reasonably estimate the related 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 2017 forecast.

CONFERENCE CALL AND WEBCAST

The Company will host a conference call and live web cast today at 5:00 p.m. ET to discuss fourth quarter and full year 2016 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://nsit.client.shareholder.com/events.cfm, and a replay of the web cast will be available on the Company's web site for a limited time following the call. To listen to the live web cast by telephone, call 1-877-402-8904 if located in the U.S., 678-809-1029 for international callers, and enter the access code 62071750. NSIT-F

USE OF NON-GAAP FINANCIAL MEASURES

The non-GAAP financial measures (referred to as Adjusted consolidated earnings from operations, Adjusted consolidated net earnings and Adjusted diluted earnings per share) exclude (i) severance and restructuring expenses recorded in all periods, (ii) certain acquisition-related expenses and the gain recorded on an asset held for sale during 2016, (iii) a non-cash real estate impairment recorded during 2015 on real estate that was sold in 2016 and (iv) the tax effects of each of these items. 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. These non-GAAP measures are used 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 December 31,

    Years Ended December 31,
   

 

     

Insight Enterprises, Inc .

 

2016

  2015   change       2016   2015   change
Net sales   $ 1,467,583   $ 1,387,185   6 %       $ 5,485,515   $ 5,373,090   2 %
Gross profit   $ 190,969   $ 180,853   6 %       $ 743,102   $ 716,332   4 %
Gross margin     13%     13%   -           13.5%     13.3%   20 bps
Selling and administrative expenses   $ 145,066   $ 147,310   (2 %)       $ 585,243   $ 584,906   -  
Severance and restructuring expenses   $ 1,527   $ 2,995   (49 %)       $ 4,580   $ 4,907   (7 %)
Acquisition-related expenses   $ 3,706   $ -   *         $ 4,447   $ -   *  
Earnings from operations   $ 40,670   $ 30,548   33 %       $ 148,832   $ 126,519   18 %
Net earnings   $ 21,100   $ 18,576   14 %       $ 84,690   $ 75,851   12 %
Diluted earnings per share   $ 0.59   $ 0.5   18 %       $ 2.32   $ 1.98   17 %
                                         

North America

                                       
Net sales   $ 1,057,353   $ 999,737   6 %       $ 3,971,828   $ 3,823,528   4 %
Gross profit   $ 133,552   $ 125,833   6 %       $ 525,481   $ 501,563   5 %
Gross margin     12.6%     12.6%   -           13.2%     13.1%   10 bps
Selling and administrative expenses   $ 100,169   $ 101,375   (1 %)       $ 401,316   $ 396,603   1 %
Severance and restructuring expenses   $ 515   $ 253   104 %       $ 2,966   $ 1,126   163 %
Acquisition-related expenses   $ 3,703   $ -   *         $ 4,278   $ -   *  
Earnings from operations   $ 29,165   $ 24,205   20 %       $ 116,921   $ 103,834   13 %
                                         

EMEA

                                       
Net sales   $ 361,760   $ 342,034   6 %       $ 1,338,560   $ 1,371,137   (2 %)
Gross profit   $ 48,877   $ 47,712   2 %       $ 185,687   $ 186,287   -  
Gross margin     13.5%     13.9%   (40 bps)         13.9%     13.6%   30 bps
Selling and administrative expenses   $ 38,606   $ 40,647   (5 %)       $ 160,269   $ 165,879   (3 %)
Severance and restructuring expenses   $ 1,009   $ 2,742   (63 %)       $ 1,496   $ 3,781   (60 %)
Earnings from operations   $ 9,262   $ 4,323   114 %       $ 23,922   $ 16,627   44 %
                                         

APAC

                                       
Net sales   $ 48,470   $ 45,414   7 %       $ 175,127   $ 178,425   (2 %)
Gross profit   $ 8,540   $ 7,308   17 %       $ 31,934   $ 28,482   12 %
Gross margin     17.6%     16.1%   150 bps         18.2%     16%   220 bps
Selling and administrative expenses   $ 6,291   $ 5,288   19 %       $ 23,658   $ 22,424   6 %
Severance and restructuring expenses   $ 3   $ -   *         $ 118   $ -   *  
Acquisition-related expenses   $ 3   $ -   *         $ 169   $ -   *  
Earnings from operations   $ 2,243   $ 2,020   11 %       $ 7,989   $ 6,058   32 %

* Percentage change not considered meaningful.

     

 

 

North America

    EMEA     APAC
                 
    Three Months Ended       Three Months Ended       Three Months Ended
    December 31,       December 31,       December 31,
                     

Sales Mix

  2016   2015  

%
change*

      2016   2015  

%
change*

      2016   2015  

%
change*

Hardware   62 %   60 %   8 %       34 %   38 %   (6 %)       11 %   12 %   (1 %)
Software   32 %   34 %   1 %       62 %   59 %   12 %       77 %   85 %   (3 %)
Services   6 %   6 %   7 %       4 %   3 %   30 %       12 %   3 %   274 %
    100 %   100 %   6 %       100 %   100 %   6 %       100 %   100 %   7 %
                                                               
   

 

 

North America

    EMEA     APAC

 

 

 

                           
    Years Ended     Years Ended     Years Ended
    December 31,     December 31,     December 31,
                 

Sales Mix

  2016   2015  

%
change*

    2016   2015  

%
change*

      2016   2015

%
change*

Hardware   62 %   61 %   5 %       36 %   39 %   (9 %)       11 %   8 %   32 %
Software   31 %   32 %   -         61 %   58 %   1 %       82 %   89 %   (9 %)
Services   7 %   7 %   10 %       3 %   3 %   15 %       7 %   3 %   107 %
    100 %   100 %   4 %       100 %   100 %   (2 %)       100 %   100 %   (2 %)
     

* 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 and web cast are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements, including the Company's expected 2017 financial results, including sales growth rates and diluted earnings per share, and the assumptions relating thereto, including the Company's amortization expense associated with acquired intangible assets, effective tax rate and capital expenditures for 2017, the strength of the Company's offerings and capabilities, the Company's integration of Datalink Corporation ("Datalink") and the Company's ability to deliver value to its clients, partners and shareholders 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 "Risk Factors" in Part I, Item 1A of the Company's Annual Report on Form 10-K for the year ended December 31, 2015 and in other of the Company's filings with the Securities and Exchange Commission:

  • risks associated with the acquisition and integration of Datalink into the Company's operations, processes and systems, including:
  • the Company may be unable to achieve expected synergies and operating efficiencies in connection with the acquisition within the expected time frames or at all and to successfully integrate Datalink's operations into those of the Company;
  • such integration may be more difficult, time consuming or costly than expected and may disrupt the Company's current plans and operations;
  • revenues following the transaction may be lower than expected;
  • operating costs, customer loss and business disruption (including, without limitation, difficulties in maintaining relationships with employees, customers, clients or suppliers) may be greater than expected following the transaction;
  • Datalink and/or the Company may be adversely affected by other economic, business, and/or competitive factors; and
  • the Company may not be able to retain the key employees of Datalink;
  • 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 related marketing funds and purchasing incentives;
  • changes in the IT industry and/or rapid changes in technology;
  • possible significant fluctuations in the Company's future operating results;
  • general economic conditions;
  • the risks associated with the Company's international operations;
  • the security of the Company's electronic and other confidential information;
  • disruptions in the Company's IT systems and voice and data networks;
  • failure to comply with the terms and conditions of the Company's commercial and public sector contracts;
  • the Company's reliance on commercial delivery services;
  • the Company's dependence on certain personnel;
  • exposure to changes in, interpretations of, or enforcement trends related to tax rules and regulations; and
  • intellectual property infringement claims and challenges to the Company's registered trademarks and trade names.

Additionally, there may be other risks that are otherwise described from time to time in the reports that the Company files with the Securities and Exchange Commission. Any forward-looking statements in this release 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

   

Years Ended

 

 

December 31,

   

December 31,

 
          2016     2015           2016     2015  
                                     
Net sales       $ 1,467,583   $ 1,387,185         $ 5,485,515   $ 5,373,090  
Costs of goods sold   1,276,614     1,206,332           4,742,413     4,656,758  
Gross profit   190,969     180,853           743,102     716,332  
Operating expenses:                              
Selling and administrative expenses   145,066     147,310           585,243     584,906  
Severance and restructuring expenses   1,527     2,995           4,580     4,907  
Acquisition-related expenses   3,706     -           4,447     -  
Earnings from operations   40,670     30,548           148,832     126,519  
Non-operating (income) expense:                            
Interest income   (282 )   (172 )         (1,066 )   (783 )
Interest expense   2,271     1,706           8,628     7,224  
Net foreign currency exchange (gain) loss   (520 )   535           522     (393 )
Other expense, net   311     326           1,290     1,295  
Earnings before income taxes   38,890     28,153           139,458     119,176  
Income tax expense   17,790     9,577           54,768     43,325  
Net earnings       $ 21,100   $ 18,576         $ 84,690   $ 75,851  
                                     
                                     
Net earnings per share:                              
Basic       $ 0.59   $ 0.5         $ 2.35   $ 2  
Diluted       $ 0.59   $ 0.5         $ 2.32   $ 1.98  
                                     
                                     
Shares used in per share calculations:                            
Basic         35,479     37,099           36,102     37,984  
Diluted         35,963     37,429           36,438     38,275  
 
 

INSIGHT ENTERPRISES, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(In thousands)

(Unaudited)

 
       

December 31,

       
       

2016

      2015
                 
ASSETS                      
Current assets:                      
Cash and cash equivalents       $ 202,882       $ 187,978  
Accounts receivable, net         1,436,742         1,315,094  
Inventories         148,203         119,820  
Inventories not available for sale         68,619         51,756  
Other current assets         127,159         77,011  
Total current assets         1,983,605         1,751,659  
                       
Property and equipment, net         70,910         88,281  
Goodwill         62,645         56,195  
Intangible assets, net         20,707         26,983  
Deferred income taxes         52,347         62,986  
Other assets         29,086         27,913  
        $ 2,219,300       $ 2,014,017  
                       
LIABILITIES AND STOCKHOLDERS' EQUITY                  
Current liabilities:                      
Accounts payable - trade       $ 1,070,259       $ 905,464  
Accounts payable - inventory financing facility         154,930         106,327  
Accrued expenses and other current liabilities         151,895         144,633  
Current portion of long-term debt         480         1,535  
Deferred revenue         61,098         50,166  
Total current liabilities         1,438,662         1,208,125  
                       
Long-term debt         40,251         89,000  
Deferred income taxes         900         239  
Other liabilities         26,044         30,911  
          1,505,857         1,328,275  
Stockholders' equity:                      
Preferred stock         -         -  
Common stock         355         371  
Additional paid-in capital         309,650         316,686  
Retained earnings         459,537         408,721  
Accumulated other comprehensive loss - foreign currency translation adjustments         (56,099 )       (40,036 )
Total stockholders' equity         713,443         685,742  
        $ 2,219,300       $ 2,014,017  
                       
 

INSIGHT ENTERPRISES, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

 

   

Years Ended December 31

      2016     2015
Cash flows from operating activities:      
Net earnings     $ 84,690       $ 75,851  
Adjustments to reconcile net earnings to net cash provided by operating activities:      
Depreciation and amortization of property and equipment       27,493         26,649  
Amortization of intangible assets       10,637         11,308  
Non-cash real estate impairment       -         800  
Provision for losses on accounts receivable       2,452         6,761  
Write-downs of inventories       2,934         3,997  
Write-off of property and equipment       -         535  
Non-cash stock-based compensation       11,058         8,922  
Excess tax benefit from employee gains on stock-based compensation       (323 )       (592 )
Deferred income taxes       10,517         5,174  
Gain on sale of real estate       (338 )       -  
Changes in assets and liabilities:                  
Increase in accounts receivable       (168,966 )       (47,206 )
Increase in inventories       (50,712 )       (9,214 )
Increase in other assets       (50,130 )       (26,714 )
Increase in accounts payable       193,582         113,594  
Increase in deferred revenue       10,633         2,927  
Increase in accrued expenses and other liabilities       12,278         7,718  
Net cash provided by operating activities       95,805         180,510  
Cash flows from investing activities:                
Acquisition of Ignia, net of cash acquired       (10,804 )       -  
Acquisition of BlueMetal, net of cash acquired       507         (44,221 )
Purchases of property and equipment       (12,266 )       (13,416 )
Proceeds from sale of real estate, net       1,378         -  
Net cash used in investing activities       (21,185 )       (57,637 )
Cash flows from financing activities:                
Borrowings on senior revolving credit facility       772,218         686,410  
Repayments on senior revolving credit facility       (772,218 )       (686,410 )
Borrowings on accounts receivable securitization financing facility       2,802,000         1,897,100  
Repayments on accounts receivable securitization financing facility       (2,851,500 )       (1,869,100 )
Repayments under other financing agreements       (1,309 )       (543 )
Payments on capital lease obligations       (445 )       (223 )
Net borrowings (repayments) under inventory financing facility       48,603         (16,454 )
Payment of deferred financing fees       (3,360 )       -  
Excess tax benefit from employee gains on stock-based compensation       323         592  
Payment of payroll taxes on stock-based compensation through shares withheld       (2,219 )       (2,265 )
Repurchases of common stock       (50,000 )       (91,843 )
Net cash used in financing activities       (57,907 )       (82,736 )
Foreign currency exchange effect on cash and cash equivalent balances       (1,809 )       (16,683 )
Increase in cash and cash equivalents       14,904         23,454  
Cash and cash equivalents at beginning of year       187,978         164,524  
Cash and cash equivalents at end of year     $ 202,882       $ 187,978  
       
 

INSIGHT ENTERPRISES, INC. AND SUBSIDIARIES

Reconciliation of GAAP to Non-GAAP Financial Measures

(In thousands, except per share data)

(unaudited)

 
   

Three Months Ended

Years Ended

 

 

December 31,

December 31,

 

 

 

                         
        2016   2015       2016   2015

Adjusted Consolidated Earnings from Operations:

                         
GAAP     $ 40,670     $ 30,548       $ 148,832   $ 126,519  
Severance and restructuring expenses   1,527       2,995         4,580     4,907  
Acquisition-related expenses   3,706       -         4,447     -  
Non-cash real estate impairment   -       -         -     800  
Gain on sale of real estate for which a non-cash   -       -         (338 )   -  
impairment charge was previously reported                            
Non-GAAP     $ 45,903     $ 33,543       $ 157,521   $ 132,226  
                                   

Adjusted Consolidated Net Earnings:

                           
GAAP     $ 21,100     $ 18,576       $ 84,690   $ 75,851  
Severance and restructuring expenses   1,527       2,995         4,580     4,907  
Acquisition-related expenses   3,706       -         4,447     -  
Non-cash real estate impairment.   -       -         -     800  
Gain on sale of real estate for which a non-cash   -       -         (338 )   -  
impairment charge was previously reported                            
Income taxes on non-GAAP adjustments   (331

)

 

  (177 )       (1,414 )   (867 )
Non-GAAP     $ 26,002     $ 21,394       $ 91,965   $ 80,691  
                                   

Adjusted Consolidated Diluted EPS:

                           
GAAP     $ 0.59     $ 0.5       $ 2.32   $ 1.98  
Severance and restructuring expenses   0.04       0.08         0.13     0.13  
Acquisition-related expenses   0.1       -         0.12     -  
Non-cash real estate impairment   -       -         -     0.02  
Gain on sale of real estate for which a non-cash   -       -         (0.01 )   -  
impairment charge was previously reported                            
Income taxes on non-GAAP adjustments   (0.01

)

 

  (0.01 )       (0.04 )   (0.02 )
Non-GAAP     $ 0.72     $ 0.57       $ 2.52   $ 2.11  
     
       

 

   

Three Months Ended

  Years Ended

 

   

December 31,

  December 31,

 

      2016     2015     2016   2015

Adjusted North America Earnings from Operations:

     
GAAP     $ 29,165     $ 24,205     $ 116,921   $ 103,834
Severance and restructuring expenses       515       253       2,966     1,126
Acquisition-related expenses       3,703       -       4,278     -
Non-cash real estate impairment       -       -       -     800
Gain on sale of real estate for which a non-cash       -       -       (338 )   -
impairment charge was previously reported                          
Non-GAAP     $ 33,383     $ 24,458     $ 123,827   $ 105,760
                               

Adjusted EMEA Earnings from Operations:

                         
GAAP     $ 9,262     $ 4,323     $ 23,922   $ 16,627
Severance and restructuring expenses       1,009       2,742       1,496     3,781
Non-GAAP     $ 10,271     $ 7,065     $ 25,418   $ 20,408
                               

Adjusted APAC Earnings from Operations:

                         
GAAP     $ 2,243     $ 2,020     $ 7,989   $ 6,058
Severance and restructuring expenses       3       -       118     -
Acquisition-related expenses       3       -       169     -
Non-GAAP     $ 2,249     $ 2,020     $ 8,276   $ 6,058

 

Contacts

Insight Enterprises, Inc.
Glynis Bryan, 480.333.3390
Chief Financial Officer
glynis.bryan@insight.com

Helen Johnson
Senior VP, Finance
Tel. 480.333.3234
helen.johnson@insight.com