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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 Companys 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


The Company has been performing an interim period goodwill impairment

test given the sustained significant decline in the Companys

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 Companys

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,, at


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



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 magazines 2008

‘Fortune 500’ list. For more information, please call 480-902-1001 in

the United States or visit


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


  • 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


  • 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


  • 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


  • failure to comply with the terms and conditions of our public sector


  • 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



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
Glynis Bryan, Chief Financial

Officer, 480-333-3390
[email protected]

Johnson, SVP, Treasurer, 480-333-3234
[email protected]

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