Insight Enterprises, Inc. Announces Preliminary Second Quarter 2008 Diluted EPS of $0.57 to $0.59 Before Goodwill Impairment Charge
2008-07-24 16:45:00
Insight Enterprises, Inc. Announces Preliminary Second Quarter 2008 Diluted EPS of $0.57 to $0.59 Before Goodwill Impairment Charge
TEMPE, Ariz.–(EMWNews)–Insight Enterprises, Inc. (Nasdaq: NSIT) (the “Company”)
today announced that diluted earnings per share are expected to be
between $0.57 and $0.59, before a goodwill impairment charge but
including restructuring expenses of approximately $3.5 million. These
better-than-expected financial results were primarily driven by strong
contribution by the Company’s EMEA and APAC
operating segments, strong performance in its North America software
category resulting from sales and marketing initiatives implemented
early in the quarter, and the benefits of recent expense management
activities.
The Company has been performing an interim period goodwill impairment
test given the sustained significant decline in the Company’s
stock price. As a result, the Company currently anticipates that it will
take a non-cash, pre-tax charge of approximately $313 million during the
second quarter equal to the entire balance of goodwill recorded in its
North America operating segment. This charge will not impact the Company’s
debt covenant compliance, cash flows or ongoing financial performance.
The Company will release financial results for the quarter ended June
30, 2008, following the close of the market on Monday, August 11, 2008.
The Company will host a conference call and live webcast at 5:00 p.m. ET
to discuss the second quarter results of operations. To access the
teleconference, please dial 866-362-4831 (U.S. & Canada) or 617-597-5347
(International) and enter the participant code 65604861. The live
webcast (in listen-only mode) and subsequent replays of the conference
call will be available online on the investor relations section of our
website, insight.com, at http://www.insight.com/site/static/investor_relations.cfm.
FORWARD-LOOKING STATEMENTS
Given the overall uncertainty within the IT market and expected softness
in the second half of the year, the Company is maintaining its
previously issued outlook that full-year diluted earnings per share will
be between $1.50 and $1.60. This estimate excludes the goodwill
impairment charge, severance, restructuring and any other one-time
charges.
ABOUT INSIGHT
Insight Enterprises, Inc. is a leading provider of brand-name
information technology (“IT”)
hardware, software and services to large enterprises, small- to
medium-sized businesses and public sector institutions in North America,
Europe, the Middle East, Africa and Asia-Pacific. The Company has more
than 5,300 teammates worldwide and generated sales of $4.8 billion for
its most recent fiscal year, which ended December 31, 2007. Insight is
ranked number 477 on Fortune magazine’s 2008
‘Fortune 500’ list. For more information, please call 480-902-1001 in
the United States or visit www.insight.com.
FORWARD-LOOKING INFORMATION
Certain statements in this release and the related conference call and
webcast are “forward-looking statements”
within the meaning of the Private Securities Litigation Reform Act of
1995. Forward-looking statements, including our estimated diluted
earnings per share for 2008 excluding the goodwill impairment charge,
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 statement. Some of the important factors
that could cause our 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 our Annual
Report on Form 10-K for the year ended December 31, 2007:
-
changes in the information technology industry and/or the economic
environment;
-
our reliance on partners for product availability, marketing funds,
purchasing incentives and competitive products to sell;
-
disruptions in our information technology systems and voice and data
networks, including the system upgrade and the migration of acquired
businesses to our information technology systems and voice and data
networks;
-
the integration and operation of acquired businesses, including our
ability to achieve expected benefits of the acquisitions;
-
actions of our competitors, including manufacturers and publishers of
products we sell;
-
the informal inquiry from the Securities and Exchange Commission (“SEC”)
and stockholder litigation related to our historical stock option
granting practices and the related restatement of our consolidated
financial statements;
-
the risks associated with international operations;
-
seasonal changes in demand for sales of software licenses;
-
increased debt and interest expense and lower availability on our
financing facilities and changes in the overall capital markets that
could increase our borrowing costs or reduce future availability of
financing;
-
exposure to currency exchange risks and volatility in the U.S. dollar
exchange rate;
-
our dependence on key personnel;
-
risk that purchased goodwill or amortizable intangible assets become
impaired;
-
failure to comply with the terms and conditions of our public sector
contracts;
-
rapid changes in product standards; and
-
intellectual property infringement claims and challenges to our
registered trademarks and trade names.
Additionally, there may be other risks that are otherwise described from
time to time in the reports that we file with the SEC. 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. We assume no obligation to update, and
do not intend to update, any forward-looking statements. We do not
endorse any projections regarding future performance made by third
parties.
USE OF NON-GAAP FINANCIAL MEASURE
The non-GAAP preliminary diluted earnings per share excludes an expected
goodwill impairment charge and the tax effect of this item. We exclude
goodwill impairment charges when internally evaluating earnings from
operations, tax expense, net earnings and diluted earnings per share for
the Company and earnings from operations for the individual 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
our results to competitors’ financial
results. We believe that these non-GAAP financial measures are useful to
investors because they allow for greater transparency, facilitate
comparisons to prior periods and competitors’
results and assist in forecasting performance for future periods because
they exclude items we believe to be outside of normal operating results.
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.
Insight Enterprises, Inc., Tempe Officer, 480-333-3390 Johnson, SVP, Treasurer, 480-333-3234 |
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