Sunday, June 24, 2018
Business

Tech Data rebounds with better-than-expected earnings, new growth plans

Tech Data Corp. is making it clear that an accounting debacle that haunted the company for months is no longer holding it down.

The technology distributor, Tampa Bay's biggest public company by revenue, closed its fiscal year with record quarterly sales, record quarterly profits and a forecast to continue its year-over-year growth into the next fiscal year.

"We've been at this for 40 years, and this is the most sales we've ever had in a quarter. That doesn't just happen," CEO Bob Dutkowsky said in an interview with the Tampa Bay Times after releasing financial results Wednesday morning. "The net bottom line is this was a really good quarter for Tech Data."

Underscoring his enthusiasm, Dutkowsky pointed to a 45,000-square-foot addition to the company's Clearwater headquarters that is opening this summer. Dutkowsky said the extra space will allow Tech Data to be nimble enough to respond to whatever is hot in IT, such as adding more networking storage experts.

"We have 1,700 (employees) in Clearwater now," he said. "We don't talk about projected (hiring), but we wouldn't be adding a building unless we thought there was an opportunity for adding a different mix of people here on campus."

Shares in Tech Data rose about 7 percent in trading early Wednesday after the company reported better-than-expected net income of $109.8 million for the quarter ended Jan. 31. Its per-share earnings of $2.87 were up 145 percent from $1.17 a share in the prior-year quarter.

Quarterly sales were about $8 billion, up 7 percent from $7.4 billion in the prior-year period.

Dutkowsky cited strong sales in both divisions: the Americas and Europe. A more stable European climate and new product introductions helped provide the boost, he said. The company's breadth of products and relationships allows it to pivot on market demands, whether it's a rush for the latest iPhone, servers, hardware or the current craze of businesses to put more of their computing in cloud-based networking.

He highlighted one recent deal to distribute products from Good Technology, which sells mobile security software to protect companies sharing internal documents, emails and other information between a data center and a remote-end user, such as a cellphone or a tablet.

For the fiscal year, Tech Data reported a 6 percent increase in net sales to $26.8 billion. Net income was $179.9 million, or $4.71 per share, compared to last year's profits of $176.3 million, or $4.50 per share.

Throughout 2013, the company was hamstrung by an investigation into misstated revenues in vendor accounting within its United Kingdom subsidiary. The probe, completed earlier this year, triggered new financial statements for fiscal years 2011, 2012 and 2013.

Tech Data shares closed at $64.83, up $3.34, or more than 5 percent.

Jeff Harrington can be reached at (727) 893-8242 or [email protected]

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