Insight Enterprises, Inc. · NASDAQ:NSIT
Insight Enterprises — Q1 2020 Earnings Presentation
17 slides from Insight Enterprises's earnings presentation, May 7, 2020
Slide 1: Insight Enterprises, Inc. First Quarter 2020 Earnings Conference Call and Webcast
Insight Enterprises, Inc. First Quarter 2020 Earnings Conference Call and Webcast Insight Presentation Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2020 Insight Direct USA, Inc. All Rights Reserved. 1
Slide 2: Agenda
Agenda • Opening Comments • CEO Commentary • Liquidity and Debt Covenants • First Quarter 2020 Financial Results • CFO Commentary • Financial results by region • Taxes and cash flow • Closing Comments Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2020 Insight Direct USA, Inc. All
Slide 3: Disclosures
Disclosures • Safe harbor statement This presentation includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 related to Insight’s plans and expectations. Statements that are not historical facts, including those related to Covid-19, our futur
Slide 4: Our Response to COVID-19
Our Response to COVID-19 Supply Connected Workforce Cloud + Data Center Digital Innovation Chain Optimization Transformation Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2020 Insight Direct USA, Inc. All Rights Reserved. 4
Slide 5: Solutions Focused for 2020
Solutions Focused for 2020 We are well positioned to help clients evolve to meet today’s challenges Today’s Solutions Outcomes challenges • Supply Chain Optimization • Cost optimization • Connected Workforce • Improved productivity Efficient Supply Chain • Cloud and Data Center • Business agility,
Slide 6: Q1 2020 Year over Year Results
Q1 2020 Year over Year Results Net Sales Gross Profit Gross Margin +27% YoY +31% YoY +50 bps YoY $0.33B 15.2% $2.14B 2019 2020 2019 2020 2019 2020 SG&A % of Net Sales Adj EFO* Adj Diluted EPS* +120 bps YoY +9% YoY +11% YoY 12.5% $67M $1.30 2019 2020 2019 2020 2019 2020 GAAP Earnings from operations
Slide 7: Q1 2020 Highlights
Q1 2020 Highlights • Financial Performance in line with expectations • Integration of PCM • 90% of PCM clients migrated onto IT systems • Expect to exit 2020 ~$50-$55 million in annualized run-rate savings towards our 2-year commitment of $70 million • Uncertain economic environment • Bookings trend
Slide 8: CFO Commentary
CFO Commentary • Liquidity and Debt Covenants • Financial results by region • Taxes and cash flow Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2020 Insight Direct USA, Inc. All Rights Reserved. 8
Slide 9: Liquidity and Debt Covenants
Liquidity and Debt Covenants Fixed Charge Coverage 300,000 Twelve Months Ended 258,803 Mar 31, 250,000 US Dollar in $000s 2020 2019 200,000 Adjusted Consolidated EBITDA: 150,000 Net Income $ 154,041 $ 170,259 3.81x Interest Expense 36,709 21,620 100,000 67,952 Taxes 48,838 48,818 50,000 Depreciation
Slide 10: North America | Financial Results
Q1 2020 North America | Financial Results Net Sales Gross Profit Gross Margin +35% YoY +41% YoY +60 bps YoY $1.67B $257M 15.3% 2019 2020 2019 2020 2019 2020 SG&A % of Net Sales Adj EFO* Sales Mix +160 bps YoY +12% YoY 14% 12.6% Hardware $55M 18% Software 68% Services 2019 2020 2019 2020 GAAP Earning
Slide 11: EMEA | Financial Results
Q1 2020 EMEA | Financial Results Net Sales Gross Profit Gross Margin +10% YoY in constant $** +6% YoY in constant $** -60 bps YoY $59M $0.42B 14.0% 2019 2020 2019 2020 2019 2020 SG&A % of Net Sales Adj EFO* Sales Mix -10 bps YoY -6% YoY in constant $** 10% Hardware 42% Software 12.0% $9M 48% Service
Slide 12: APAC | Financial Results
Q1 2020 APAC | Financial Results Net Sales Gross Profit Gross Margin +3% YoY in constant $** +16% YoY in constant $** +220 bps YoY $51M $10M 19.0% 2019 2020 2019 2020 2019 2020 SG&A % of Net Sales Adj EFO* Sales Mix +140 bps YoY +20% YoY in constant $** 15% 14.6% 24% Hardware $2M Software Services 6
Slide 13: Cash Flows and Cash Cycle
Q1 2020 | Cash Flows and Cash Cycle Net cash from operations Adj Free Cash Flow* $85M $93M 2019 2020 2019 2020 Days sales outstanding Days inventory outstanding Days purchases outstanding +12 days YoY +0 days YoY +4 days YoY 77 104 11 2019 2020 2019 2020 2019 2020 * Adjusted Non-GAAP excludes severa
Slide 14: Closing Commentary
Closing Commentary Manage Today Transform Tomorrow Clients Suppliers Supply Connected Workforce Cloud + Data Center Digital Innovation Chain Optimization Transformation Product- Outcome- focused based CapEx OpEx Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2020 Insight Direct USA
Slide 15: Appendix – Reconciliation of GAAP to Non-GAAP Financial Measures
Appendix – Reconciliation of GAAP to Non-GAAP Financial Measures Three Months Ended Mar 31, US Dollar in $000s, except per share data 2020 2019 Adjusted Consolidated Earnings from Operations: GAAP consolidated EFO $ 52,863 $ 57,039 Severance and restructuring expenses 2,144 370 Acquisition and integ
Slide 16: Reconciliation of GAAP to Non-GAAP Financial Measures (continued)
Appendix – Reconciliation of GAAP to Non-GAAP Financial Measures (continued) Three Months Ended Mar 31, US Dollar in $000s 2020 2019 Adjusted North America Earnings from Operations: GAAP EFO from North America segment $ 42,341 $ 45,326 Severance and restructuring expenses 2,122 331 Acquisition and i
Slide 17: Reconciliation of GAAP to Non-GAAP Financial Measures (continued)
Appendix – Reconciliation of GAAP to Non-GAAP Financial Measures (continued) Twelve Months Ended Mar 31, US Dollar in $000s 2020 2019 Return on invested capital: GAAP consolidated EFO $ 236,418 $ 240,082 Severance and restructuring expenses 7,199 2,151 Acquisition and integration related expenses 12