CDW sees 6.7 percent 2Q sales growth; acquires U.K. firm
VERNON HILLS - CDW reported second quarter 2015 net sales increased 6.7 percent as the technology services company saw growing demand in both its corporate and public sections.
In addition, the company said it has acquired U.K. based U.K.-based IT company Kelway for approximately $431 million.
Total net sales in the second quarter of 2015 were $3.3 billion, up from compared to $3.1 billion in the second quarter of 2014, the company reported. Total net sales in its corporate segment in the quarter $1.7 billion, 6.3 percent higher than the same period last year. The company said sales to medium and large companies grew 7 percent during that time, whole small business sales grew at 3 percent.
Total net sales in the public segment were $1.4 billion in the quarter, 8.1 percent higher than the second quarter of 2014. Government sales increased almost 23 percent, the company reported, while education sales increased 4 percent and health care sales increased 3 percent.
The strong sales, in addition to the company's acquisition in November 2014 of U.K.-based IT company Kelway for approximately $431 million, helped it strong showing this quarter.
CDW also said it has purchased the remaining stake in Kelway after acquiring a 35 percent share of the company in November, 2014. Kelway serves more than 4,500 customers across the U.K. While roughly 90 percent of its sales are derived from the UK, Kelway's cross-border supply chain relationships enable it to meet its UK-based customers' international needs in more than 80 countries. The acquisition accelerates CDW's ability to provide IT solutions to U.S.-based customers with international locations, the company said.
CDW will consolidate approximately $80 million of Kelway net debt for its 100 percent interest in the company.
"Our strong top line and profitability performance in a challenging market was driven by the combined power of our balanced portfolio of channels and breadth of offerings, including our ability to bring newer, innovative technologies to our customers and the success of our three part strategy for growth," said Thomas E. Richards, chairman and chief executive officer of CDW. "This performance reinforces our confidence in our strategy and capital allocation actions, including today's dividend declaration and purchase of the remaining 65 percent of Kelway."
Richards said company growth for the remainder of the year should be 200 to 300 basis points above the market.
"We remain laser-focused on execution and meeting the needs of our more than 250,000 customers in the US, Canada and now the UK and remaining the partner of choice for more than 1,000 leading and emerging technology brands as the technology market continues to evolve," he said.
The company's board of directors also approved a quarterly cash dividend 6.75 cents per share, 59 percent higher than the cash dividend paid in September 2014. It will be paid Sept. 10 to shareholders of record as of the close of business on Aug. 25.