8-K
INSIGHT ENTERPRISES INC (NSIT)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 9, 2023
INSIGHT ENTERPRISES, INC.
(Exact name of registrant as specified in its charter)
_____________________________
| Delaware | 0-25092 | 86-0766246 | |
|---|---|---|---|
| (State or other jurisdiction<br><br>of incorporation) | (Commission<br><br>File Number) | (I.R.S. Employer<br><br>Identification No.) | |
| 2701 East Insight Way, | |||
| Chandler, | Arizona | 85286 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant's telephone number, including area code:
(480) 333-3000
Not Applicable
(Former name or former address, if changed since last report)
_____________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of each exchange on which registered |
|---|---|---|
| Common stock, par value $0.01 | NSIT | The NASDAQ Global Select Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
| Emerging growth company | ☐ |
|---|
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On February 9, 2023, Insight Enterprises, Inc. announced by press release its results of operations for the fourth quarter and full year ended December 31, 2022. A copy of the press release and accompanying investor presentation are attached hereto as Exhibits 99.1 and 99.2, respectively, and incorporated by reference herein. The information disclosed under this Item 2.02, including Exhibits 99.1 and 99.2 hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit<br><br>Number | Description |
|---|---|
| 99.1 | Press release dated February 9, 2023. |
| 99.2 | Investor presentation of Insight Enterprises, Inc. dated February 9, 2023. |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Insight Enterprises, Inc. | |||
|---|---|---|---|
| Date: | February 9, 2023 | By: | /s/ Rachael A. Crump |
| Rachael A. Crump | |||
| Principal Accounting Officer |
Document
EXHIBIT 99.1
| FOR IMMEDIATE RELEASE | NASDAQ: NSIT |
|---|
INSIGHT ENTERPRISES, INC. REPORTS
FOURTH QUARTER AND RECORD FULL YEAR RESULTS
CHANDLER, AZ – February 9, 2023 – Insight Enterprises, Inc. (NASDAQ: NSIT) (the “Company”) today reported financial results for the quarter and full year ended December 31, 2022. Highlights include:
•Gross profit increased 9% to $420.6 million with gross margin expanding 180 basis points to a record 16.8% for the fourth quarter and up 13% for the full year
•Earnings from operations increased 22% to $114.0 million for the fourth quarter and up 25% for the full year
•Adjusted earnings from operations increased 25% to $128.3 million for the fourth quarter and up 29% for the full year
•Diluted earnings per share of $2.13 increased 26% for the fourth quarter and up 29% for the full year
•Adjusted diluted earnings per share of $2.53 increased 25% for the fourth quarter and up 28% for the full year
In the fourth quarter of 2022, net sales decreased 2%, year to year. Gross profit increased 9% while gross margin expanded 180 basis points to a record 16.8% compared to the fourth quarter of 2021. Earnings from operations of $114.0 million increased 22% compared to $93.4 million in the fourth quarter of 2021. Adjusted earnings from operations of $128.3 million increased 25% compared to $102.9 million in the fourth quarter of 2021. Diluted earnings per share for the quarter was $2.13, up 26%, year over year. Adjusted diluted earnings per share was $2.53, up 25%, year over year.
“It is my pleasure to report that we ended 2022 with an outstanding fourth quarter that topped off record setting financial results for 2022,” stated Joyce Mullen, President and Chief Executive Officer. “These results demonstrate we are making progress towards our ambition to become the leading solutions integrator and show the resilience of our business model,” stated Mullen.
For the full year 2022, we had record results including net sales, gross profit, gross margin, earnings from operations, Adjusted earnings from operations, diluted earnings per share and Adjusted diluted earnings per share. Net sales increased 11%, year over year to $10.4 billion. Gross profit increased 13% while gross margin of 15.7% expanded 40 basis points compared to the prior year. Earnings from operations of $413.7 million increased 25% compared to $332.1 million in 2021. Adjusted earnings from operations of $466.6 million increased 29% compared to $362.5 million in 2021. Diluted earnings per share for the full year 2022 was $7.66, up 29%, year over year. Adjusted diluted earnings per share was $9.11, up 28%, year over year.
“In 2022 we delivered record net sales, gross profit, gross margin, Adjusted earnings from operations and Adjusted diluted earnings per share. And we ended the year with positive cash flow from operations of $98 million,” stated Joyce Mullen, President and Chief Executive Officer. “We are especially encouraged by our results because we achieved that stellar performance in a decelerating macro-environment in the second half of 2022,” stated Mullen.
KEY HIGHLIGHTS
Results for the Quarter:
•Consolidated net sales for the fourth quarter of 2022 of $2.5 billion decreased 2%, year to year, when compared to the fourth quarter of 2021. Product net sales decreased 4%, year to year and services net sales increased 9%, year over year.
•Net sales in North America decreased 1%, year to year, to $2.1 billion;
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| Insight Enterprises, Inc. | 2701 E. Insight Way | Chandler, Arizona 85286 | 800.467.4448 | FAX 480.760.8958 |
◦Product net sales decreased 2%, year to year, to $1.8 billion;
◦Services net sales increased 10%, year over year, to $311.8 million;
•Net sales in EMEA decreased 12%, year to year, to $375.2 million; and
•Net sales in APAC increased 2%, year over year, to $54.8 million.
•Excluding the effects of fluctuating foreign currency exchange rates, consolidated net sales were flat, year to year, with growth in net sales in APAC of 12%, year over year, and net sales in both North America and EMEA also being flat.
•Consolidated gross profit increased to $420.6 million, an increase of 9% compared to the fourth quarter of 2021, with consolidated gross margin expanding 180 basis points to a record 16.8% of net sales. Product gross profit increased 4%, year over year, and services gross profit increased 15%, year over year. Cloud gross profit increased 44% and Insight core services gross profit increased 11%, year over year.
•Gross profit in North America increased 12%, year over year, to $345.3 million (16.7% gross margin);
•Gross profit in EMEA decreased 4%, year to year, to $61.2 million (16.3% gross margin); and
•Gross profit in APAC increased 1%, year over year, to $14.1 million (25.7% gross margin).
•Excluding the effects of fluctuating foreign currency exchange rates, consolidated gross profit was up 12%, year over year, with gross profit growth in North America, EMEA and APAC of 13%, 9% and 11%, respectively, year over year.
•Consolidated earnings from operations increased 22% compared to the fourth quarter of 2021 to $114.0 million, or 4.6% of net sales.
•Earnings from operations in North America increased 30%, year over year, to $99.3 million, or 4.8% of net sales;
•Earnings from operations in EMEA decreased 14%, year to year, to $10.7 million, or 2.9% of net sales; and
•Earnings from operations in APAC decreased 10%, year to year, to $4.0 million, or 7.2% of net sales.
•Excluding the effects of fluctuating foreign currency exchange rates, consolidated earnings from operations were up 25%, year over year, with increased earnings from operations in North America of 31%, year over year, partially offset by decreased earnings from operations in EMEA and APAC of 8% and 2%, respectively, year to year.
•Adjusted earnings from operations increased 25% compared to the fourth quarter of 2021 to $128.3 million, or 5.1% of net sales.
•Adjusted earnings from operations in North America increased 32%, year over year, to $112.3 million, or 5.4% of net sales;
•Adjusted earnings from operations in EMEA decreased 10%, year to year, to $11.8 million, or 3.2% of net sales; and
•Adjusted earnings from operations in APAC decreased 11%, year to year, to $4.2 million, or 7.6% of net sales.
•Excluding the effects of fluctuating foreign currency exchange rates, Adjusted consolidated earnings from operations were up 27%, year over year, with increased Adjusted earnings from operations in North America of 33%, year over year, partially offset by decreases in Adjusted earnings from operations in EMEA and APAC of 3% and 4%, respectively, year to year.
•Consolidated net earnings and diluted earnings per share for the fourth quarter of 2022 were $77.5 million and $2.13, respectively, at an effective tax rate of 24.9%.
•Adjusted consolidated net earnings and Adjusted diluted earnings per share for the fourth quarter of 2022 were $88.2 million and $2.53, respectively. Excluding the effects of fluctuating foreign currency exchange rates, Adjusted diluted earnings per share was up 28%, year over year.
Results for the Year:
•Consolidated net sales of $10.4 billion for 2022 increased 11%, year over year, when compared to 2021.
•Net sales in North America increased 13%, year over year, to $8.5 billion;
•Net sales in EMEA was flat, year over year, at $1.7 billion; and
•Net sales in APAC increased 11%, year over year, to $234.3 million.
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| Insight Enterprises, Inc. | 2701 E. Insight Way | Chandler, Arizona 85286 | 800.467.4448 | FAX 480.760.8958 |
•Excluding the effects of fluctuating foreign currency exchange rates, consolidated net sales were up 13%, year over year, with growth in net sales in North America, EMEA and APAC of 13%, 12% and 18%, respectively, year over year.
•Consolidated gross profit increased to $1.6 billion, an increase of 13% compared to 2021, with consolidated gross margin expanding 40 basis points to 15.7% of net sales. Product gross profit and services gross profit both increased 13%, year over year. Cloud gross profit increased 29% and Insight core services gross profit increased 14%, year over year.
•Gross profit in North America increased 17%, year over year, to $1.3 billion (15.7% gross margin);
•Gross profit in EMEA decreased 4%, year to year, to $247.3 million (14.4% gross margin); and
•Gross profit in APAC increased 14%, year over year, to $61.0 million (26.0% gross margin).
•Excluding the effects of fluctuating foreign currency exchange rates, consolidated gross profit was up 16%, year over year, with gross profit growth in North America, EMEA and APAC of 17%, 6% and 22%, respectively, year over year.
•Consolidated earnings from operations increased 25% compared to 2021 to $413.7 million, or 4.0% of net sales.
•Earnings from operations in North America increased 30%, year over year, to $350.4 million, or 4.1% of net sales;
•Earnings from operations in EMEA decreased 6%, year to year, to $44.3 million, or 2.6% of net sales; and
•Earnings from operations in APAC increased 16%, year over year, to $19.0 million, or 8.1% of net sales.
•Excluding the effects of fluctuating foreign currency exchange rates, consolidated earnings from operations were up 27%, year over year, with increased earnings from operations in North America, EMEA and APAC of 31%, 4% and 24%, respectively.
•Adjusted earnings from operations increased 29% compared to 2021 to $466.6 million, or 4.5% of net sales.
•Adjusted earnings from operations in North America increased 35%, year over year, to $399.1 million, or 4.7% of net sales;
•Adjusted earnings from operations in EMEA decreased 4%, year to year, to $48.0 million, or 2.8% of net sales; and
•Adjusted earnings from operations in APAC increased 15%, year over year, to $19.6 million, or 8.3% of net sales.
•Excluding the effects of fluctuating foreign currency exchange rates, Adjusted consolidated earnings from operations were up 31%, year over year, with increased Adjusted earnings from operations in North America, EMEA and APAC of 36%, 5% and 22%, respectively.
•Consolidated net earnings and diluted earnings per share for 2022 were $280.6 million and $7.66, respectively, at an effective tax rate of 25.1%.
•Adjusted consolidated net earnings and Adjusted diluted earnings per share for 2022 were $320.2 million and $9.11, respectively. Excluding the effects of fluctuating foreign currency exchange rates, Adjusted diluted earnings per share was up 31%, year over year.
In discussing financial results for the three and twelve months ended December 31, 2022 and 2021 in this press release, the Company refers to certain financial measures that are adjusted from the financial results prepared in accordance with United States generally accepted accounting principles (“GAAP”). When referring to non-GAAP measures, the Company refers to them as “Adjusted.” See “Use of Non-GAAP Financial Measures” for additional information. A tabular reconciliation of financial measures prepared in accordance with GAAP to the non-GAAP financial measures is included at the end of this press release.
In some instances, the Company refers to changes in net sales, gross profit, earnings from operations and Adjusted diluted earnings per share on a consolidated basis and in North America, EMEA and APAC excluding the effects of fluctuating foreign currency exchange rates. In computing these changes and percentages, the Company compares the current year amount as translated into U.S. dollars under the applicable accounting standards to the prior year amount in local currency translated into U.S. dollars utilizing the weighted average translation rate for the current period.
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| Insight Enterprises, Inc. | 2701 E. Insight Way | Chandler, Arizona 85286 | 800.467.4448 | FAX 480.760.8958 |
The tax effect of Adjusted amounts referenced herein were computed using the statutory tax rate for the taxing jurisdictions in the operating segment in which the related expenses were recorded, adjusted for the effects of valuation allowances on net operating losses in certain jurisdictions.
GUIDANCE
For the full year 2023, the Company expects to deliver gross profit growth in the high single digit range and Adjusted diluted earnings per share is expected to be between $9.90 and $10.10.
This outlook assumes
•interest expense between $48 and $52 million;
•an effective tax rate of 25% to 26% for the full year;
•capital expenditures of $55 to $60 million; and
•an average share count for the full year of 34.3 million shares after an estimated completion of our planned share repurchases under our current authorization net of estimated dilution.
This outlook excludes acquisition-related intangibles amortization expense of approximately $32 million, assumes no acquisition or integration related expenses, transformation or severance and restructuring expenses, and no significant change in our debt instruments. Due to the inherent difficulty of forecasting some of these types of expenses, which impact net earnings, diluted earnings per share and selling and administrative expenses, the Company is unable to reasonably estimate the impact of such expenses, if any, to net earnings, diluted earnings per share and selling and administrative expenses. Accordingly, the Company is unable to provide a reconciliation of GAAP to non-GAAP diluted earnings per share for the full year 2023 forecast.
CONFERENCE CALL AND WEBCAST
The Company will host a conference call and live web cast today at 9:00 a.m. ET to discuss fourth quarter and full year 2022 results of operations. A live web cast of the conference call (in listen-only mode) will be available on the Company’s web site at http://investor.insight.com/, and a replay of the web cast will be available on the Company’s web site for a limited time following the call. To access the live conference call, please register in advance using this event link. Upon registering, participants will receive dial-in information via email, as well as a unique registrant ID, event passcode, and detailed instructions regarding how to join the call.
USE OF NON-GAAP FINANCIAL MEASURES
The non-GAAP financial measures are referred to as “Adjusted”. Adjusted earnings from operations, Adjusted net earnings and Adjusted diluted earnings per share exclude (i) severance and restructuring expenses, (ii) certain executive recruitment and hiring related expenses, (iii) amortization of intangible assets, (iv) transformation costs, (v) certain acquisition and integration related expenses, and (vi) the tax effects of each of these items, as applicable. Transformation costs represent costs we are incurring to transform our business, to help us achieve our strategic objectives, including becoming a leading solutions integrator. Adjusted net earnings and Adjusted diluted earnings per share for the twelve months ended December 31, 2021 also exclude amortization of debt discount and issuance costs associated with the issuance of the Company’s convertible senior notes due 2025. Effective January 1, 2022, the Company adopted ASU 2020-06 and no longer records amortization of debt discount associated with the convertible senior notes. The Company excludes these items when internally evaluating earnings from operations, tax expense, net earnings and diluted earnings per share for the Company and earnings from operations for each of the Company’s operating segments. Adjusted diluted earnings per share also includes the impact of the benefit from the note hedge where the Company’s average stock price for the fourth quarter of 2022 was in excess of $68.32, which is the initial conversion price of the convertible senior notes. Adjusted EBITDA excludes (i) interest expense, (ii) income tax expense, (iii) depreciation and amortization of property and equipment, (iv) amortization of intangible assets, (v) severance and restructuring expenses (vi) certain executive recruitment and hiring related expenses, (vii) transformation costs and (viii) certain acquisition and integration related expenses. Adjusted return on invested capital (“ROIC”) excludes (i) severance and restructuring expenses, (ii) certain executive recruitment and hiring related expenses, (iii) amortization of intangible assets, (iv) transformation costs, (v) certain acquisition and integration related expenses and (vi) the tax effects of each of these items, as applicable.
These non-GAAP measures are used by the Company and its management to evaluate financial performance against budgeted amounts, to calculate incentive compensation, to assist in forecasting future performance
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| Insight Enterprises, Inc. | 2701 E. Insight Way | Chandler, Arizona 85286 | 800.467.4448 | FAX 480.760.8958 |
and to compare the Company’s results to those of the Company’s competitors. The Company believes that these non-GAAP financial measures are useful to investors because they allow for greater transparency, facilitate comparisons to prior periods and the Company’s competitors’ results and assist in forecasting performance for future periods. 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.
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| Insight Enterprises, Inc. | 2701 E. Insight Way | Chandler, Arizona 85286 | 800.467.4448 | FAX 480.760.8958 |
FINANCIAL SUMMARY TABLE
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
| Three Months Ended<br>December 31, | Twelve Months Ended<br>December 31, | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2022 | 2021 | change | 2022 | 2021 | change | ||||||||||||||||
| Insight Enterprises, Inc. | |||||||||||||||||||||
| Net sales: | |||||||||||||||||||||
| Products | $ | 2,119,061 | $ | 2,213,690 | (4%) | $ | 8,947,787 | $ | 8,120,127 | 10% | |||||||||||
| Services | $ | 383,549 | $ | 352,333 | 9% | $ | 1,483,404 | $ | 1,315,986 | 13% | |||||||||||
| Total net sales | $ | 2,502,610 | $ | 2,566,023 | (2%) | $ | 10,431,191 | $ | 9,436,113 | 11% | |||||||||||
| Gross profit | $ | 420,559 | $ | 384,855 | 9% | $ | 1,636,567 | $ | 1,447,557 | 13% | |||||||||||
| Gross margin | 16.8% | 15.0% | 180 bps | 15.7% | 15.3% | 40 bps | |||||||||||||||
| Selling and administrative expenses | $ | 304,766 | $ | 289,855 | 5% | $ | 1,216,660 | $ | 1,117,130 | 9% | |||||||||||
| Severance and restructuring expenses | $ | 1,451 | $ | 1,583 | (8%) | $ | 4,235 | $ | (1,634) | > 100% | |||||||||||
| Acquisition and integration related expenses | $ | 326 | $ | — | * | $ | 1,972 | — | * | ||||||||||||
| Earnings from operations | $ | 114,016 | $ | 93,417 | 22% | $ | 413,700 | $ | 332,061 | 25% | |||||||||||
| Net earnings | $ | 77,477 | $ | 62,133 | 25% | $ | 280,608 | $ | 219,345 | 28% | |||||||||||
| Diluted earnings per share | $ | 2.13 | $ | 1.69 | 26% | $ | 7.66 | $ | 5.95 | 29% | |||||||||||
| North America | |||||||||||||||||||||
| Net sales: | |||||||||||||||||||||
| Products | $ | 1,760,826 | $ | 1,803,056 | (2%) | $ | 7,291,301 | $ | 6,478,637 | 13% | |||||||||||
| Services | $ | 311,780 | $ | 282,981 | 10% | $ | 1,193,091 | $ | 1,041,686 | 15% | |||||||||||
| Total net sales | $ | 2,072,606 | $ | 2,086,037 | (1%) | $ | 8,484,392 | $ | 7,520,323 | 13% | |||||||||||
| Gross profit | $ | 345,287 | $ | 307,082 | 12% | $ | 1,328,333 | $ | 1,135,450 | 17% | |||||||||||
| Gross margin | 16.7% | 14.7% | 200 bps | 15.7% | 15.1% | 60 bps | |||||||||||||||
| Selling and administrative expenses | $ | 244,965 | $ | 229,346 | 7% | $ | 973,798 | $ | 869,766 | 12% | |||||||||||
| Severance and restructuring expenses | $ | 912 | $ | 1,232 | (26%) | $ | 2,384 | $ | (3,129) | > 100% | |||||||||||
| Acquisition and integration related expenses | $ | 69 | $ | — | * | $ | 1,715 | $ | — | * | |||||||||||
| Earnings from operations | $ | 99,341 | $ | 76,504 | 30% | $ | 350,436 | $ | 268,813 | 30% | |||||||||||
| Sales Mix | ** | ||||||||||||||||||||
| Hardware | 64 | % | 70 | % | (10%) | 68 | % | 69 | % | 11% | |||||||||||
| Software | 21 | % | 16 | % | 30% | 18 | % | 17 | % | 18% | |||||||||||
| Services | 15 | % | 14 | % | 10% | 14 | % | 14 | % | 15% | |||||||||||
| 100 | % | 100 | % | (1%) | 100 | % | 100 | % | 13% | ||||||||||||
| EMEA | |||||||||||||||||||||
| Net sales: | |||||||||||||||||||||
| Products | $ | 324,625 | $ | 376,877 | (14%) | $ | 1,511,897 | $ | 1,502,176 | 1% | |||||||||||
| Services | $ | 50,558 | $ | 49,516 | 2% | $ | 200,624 | $ | 201,875 | (1%) | |||||||||||
| Total net sales | $ | 375,183 | $ | 426,393 | (12%) | $ | 1,712,521 | $ | 1,704,051 | —% | |||||||||||
| Gross profit | $ | 61,180 | $ | 63,851 | (4%) | $ | 247,269 | $ | 258,862 | (4%) | |||||||||||
| Gross margin | 16.3% | 15.0% | 130 bps | 14.4% | 15.2% | (80 bps) | |||||||||||||||
| Selling and administrative expenses | $ | 49,763 | $ | 51,150 | (3%) | $ | 200,988 | $ | 210,616 | (5%) | |||||||||||
| Severance and restructuring expenses | $ | 450 | $ | 193 | >100% | $ | 1,760 | $ | 1,328 | 33% | |||||||||||
| Acquisition and integration related expenses | $ | 257 | $ | — | * | $ | 257 | $ | — | * | |||||||||||
| Earnings from operations | $ | 10,710 | $ | 12,508 | (14%) | $ | 44,264 | $ | 46,918 | (6%) | |||||||||||
| Sales Mix | ** | ||||||||||||||||||||
| Hardware | 37 | % | 35 | % | (9%) | 38 | % | 40 | % | (3%) | |||||||||||
| Software | 50 | % | 53 | % | (17%) | 50 | % | 48 | % | 4% | |||||||||||
| Services | 13 | % | 12 | % | 2% | 12 | % | 12 | % | (1%) | |||||||||||
| 100 | % | 100 | % | (12%) | 100 | % | 100 | % | —% | - MORE - | |||||||||||
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| Insight Enterprises, Inc. | 2701 E. Insight Way | Chandler, Arizona 85286 | 800.467.4448 | FAX 480.760.8958 |
FINANCIAL SUMMARY TABLE (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
| Three Months Ended<br>December 31, | Twelve Months Ended<br>December 31, | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2022 | 2021 | change | 2022 | 2021 | change | ||||||||||
| APAC | |||||||||||||||
| Net sales: | |||||||||||||||
| Products | $ | 33,610 | $ | 33,757 | —% | $ | 144,589 | $ | 139,314 | 4% | |||||
| Services | $ | 21,211 | $ | 19,836 | 7% | $ | 89,689 | $ | 72,425 | 24% | |||||
| Total net sales | $ | 54,821 | $ | 53,593 | 2% | $ | 234,278 | $ | 211,739 | 11% | |||||
| Gross profit | $ | 14,092 | $ | 13,922 | 1% | $ | 60,965 | $ | 53,245 | 14% | |||||
| Gross margin | 25.7% | 26.0% | (30 bps) | 26.0% | 25.1% | 90 bps | |||||||||
| Selling and administrative expenses | $ | 10,038 | $ | 9,359 | 7% | $ | 41,874 | $ | 36,748 | 14% | |||||
| Severance and restructuring expenses | $ | 89 | $ | 158 | (44%) | $ | 91 | $ | 167 | (46%) | |||||
| Earnings from operations | $ | 3,965 | $ | 4,405 | (10%) | $ | 19,000 | $ | 16,330 | 16% | |||||
| Sales Mix | ** | ||||||||||||||
| Hardware | 24 | % | 27 | % | (8%) | 25 | % | 23 | % | 17% | |||||
| Software | 37 | % | 36 | % | 5% | 37 | % | 43 | % | (4%) | |||||
| Services | 39 | % | 37 | % | 7% | 38 | % | 34 | % | 24% | |||||
| 100 | % | 100 | % | 2% | 100 | % | 100 | % | 11% |
* Percentage change not considered meaningful.
** Change in sales mix represents growth/decline in category net sales on a U.S. dollar basis and does not exclude the effects of fluctuating foreign currency exchange rates
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| Insight Enterprises, Inc. | 2701 E. Insight Way | Chandler, Arizona 85286 | 800.467.4448 | FAX 480.760.8958 |
FORWARD-LOOKING INFORMATION
Certain statements in this release and the related conference call, web cast and presentation are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements, including those related to the Company’s future responses to and the potential impact of coronavirus strain COVID-19 (“COVID-19”) on the Company, the Company’s future financial performance and results of operations, including net sales growth, Adjusted diluted earnings per share, and Adjusted selling and administrative expenses, the Company’s anticipated effective tax rate, capital expenditures, and expected average share count including our expectation that we will complete our planned share repurchases in the first quarter of 2023, the Company’s expectations that note holders will not convert the Company’s convertible senior notes in the near term, the Company’s expectations regarding cash flow, the Company’s expectations regarding current supply constraints and shipment of backlog, future trends in the IT market, the Company’s business strategy and strategic initiatives, which 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 statements. There can be no assurances that the results discussed by the forward-looking statements will be achieved, and actual results may differ materially from those set forth in the forward-looking statements. Some of the important factors that could cause the Company’s 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 the Company’s filings with the Securities and Exchange Commission (the “SEC”), including in the “Risk Factors” sections of the Company’s most recently filed periodic reports on Form 10-K and Form 10-Q and subsequent filings with the SEC:
•actions of our competitors, including manufacturers and publishers of products we sell;
•our reliance on our partners for product availability, competitive products to sell and marketing funds and purchasing incentives, which can change significantly in the amounts made available and in the requirements year over year;
•our ability to keep pace with rapidly evolving technological advances and the evolving competitive marketplace
•general economic conditions, economic uncertainties and changes in geopolitical conditions, including the possibility of a recession or as a result of the ongoing war between Russia and Ukraine;
•changes in the IT industry and/or rapid changes in technology;
•our ability to provide high quality services to our clients;
•accounts receivable risks, including increased credit loss experience or extended payment terms with our clients;
•our reliance on independent shipping companies;
•the risks associated with our international operations;
•supply constraints for products;
•the duration and severity of the COVID-19 pandemic and its effects on our business, results of operations and financial condition, as well as the widespread outbreak of any other illnesses or communicable diseases;
•natural disasters or other adverse occurrences;
•disruptions in our IT systems and voice and data networks;
•cyberattacks or breaches of data privacy and security regulations;
•intellectual property infringement claims and challenges to our registered trademarks and trade names;
•legal proceedings, client audits and failure to comply with laws and regulations;
•failure to comply with the terms and conditions of our commercial and public sector contracts;
•exposure to changes in, interpretations of, or enforcement trends related to tax rules and regulations;
•our potential to draw down a substantial amount of indebtedness;
•the conditional conversion feature of our convertible senior notes (the “Notes”), which has been triggered, may adversely affect the Company’s financial condition and operating results;
•the Company is subject to counterparty risk with respect to certain hedge and warrant transactions entered into in connection with the issuance of the notes (the "Call Spread Transactions");
•increased debt and interest expense and the possibility of decreased availability of funds under our financing facilities;
•risks associated with the discontinuation of LIBOR as a benchmark rate;
•possible significant fluctuations in our future operating results as well as seasonality and variability in client demands;
•our dependence on certain key personnel and our ability to attract, train and retain skilled teammates;
| - MORE - | ||||
|---|---|---|---|---|
| Insight Enterprises, Inc. | 2701 E. Insight Way | Chandler, Arizona 85286 | 800.467.4448 | FAX 480.760.8958 |
•risks associated with the integration and operation of acquired businesses, including achievement of expected synergies and benefits; and
•future sales of the Company’s common stock or equity-linked securities in the public market could lower the market price for our common stock.
Additionally, there may be other risks that are otherwise described from time to time in the reports that the Company files with the SEC. Any forward-looking statements in this release, the related conference call, webcast and presentation speak only as of the date on which they are made and should be considered in light of various important factors, including the risks and uncertainties listed above, as well as others. The Company assumes no obligation to update, and, except as may be required by law, does not intend to update, any forward-looking statements. The Company does not endorse any projections regarding future performance that may be made by third parties.
| CONTACT: | GLYNIS BRYAN | ||||||
|---|---|---|---|---|---|---|---|
| CHIEF FINANCIAL OFFICER | |||||||
| TEL. 480.333.3390 | |||||||
| EMAIL glynis.bryan@insight.com | - MORE - | ||||||
| --- | --- | --- | --- | --- | |||
| Insight Enterprises, Inc. | 2701 E. Insight Way | Chandler, Arizona 85286 | 800.467.4448 | FAX 480.760.8958 |
INSIGHT ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
| Three Months Ended<br>December 31, | Twelve Months Ended<br>December 31, | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2022 | 2021 | 2022 | 2021 | |||||||||||
| Net sales: | ||||||||||||||
| Products | $ | 2,119,061 | $ | 2,213,690 | $ | 8,947,787 | $ | 8,120,127 | ||||||
| Services | 383,549 | 352,333 | 1,483,404 | 1,315,986 | ||||||||||
| Total net sales | 2,502,610 | 2,566,023 | 10,431,191 | 9,436,113 | ||||||||||
| Costs of goods sold: | ||||||||||||||
| Products | 1,911,469 | 2,013,825 | 8,111,252 | 7,380,908 | ||||||||||
| Services | 170,582 | 167,343 | 683,372 | 607,648 | ||||||||||
| Total costs of goods sold | 2,082,051 | 2,181,168 | 8,794,624 | 7,988,556 | ||||||||||
| Gross profit | 420,559 | 384,855 | 1,636,567 | 1,447,557 | ||||||||||
| Operating expenses: | ||||||||||||||
| Selling and administrative expenses | 304,766 | 289,855 | 1,216,660 | 1,117,130 | ||||||||||
| Severance and restructuring expenses, net | 1,451 | 1,583 | 4,235 | (1,634) | ||||||||||
| Acquisition and integration related expenses | 326 | — | 1,972 | — | ||||||||||
| Earnings from operations | 114,016 | 93,417 | 413,700 | 332,061 | ||||||||||
| Non-operating (income) expense: | ||||||||||||||
| Interest expense, net | 10,333 | 10,632 | 39,497 | 40,516 | ||||||||||
| Other expense (income), net | 511 | (157) | (230) | (1,012) | ||||||||||
| Earnings before income taxes | 103,172 | 82,942 | 374,433 | 292,557 | ||||||||||
| Income tax expense | 25,695 | 20,809 | 93,825 | 73,212 | ||||||||||
| Net earnings | $ | 77,477 | $ | 62,133 | $ | 280,608 | $ | 219,345 | ||||||
| Net earnings per share: | ||||||||||||||
| Basic | $ | 2.24 | $ | 1.78 | $ | 8.04 | $ | 6.27 | ||||||
| Diluted | $ | 2.13 | $ | 1.69 | $ | 7.66 | $ | 5.95 | ||||||
| Shares used in per share calculations: | ||||||||||||||
| Basic | 34,604 | 34,892 | 34,903 | 35,011 | ||||||||||
| Diluted | 36,336 | 36,871 | 36,620 | 36,863 | - MORE - | |||||||||
| --- | --- | --- | --- | --- | ||||||||||
| Insight Enterprises, Inc. | 2701 E. Insight Way | Chandler, Arizona 85286 | 800.467.4448 | FAX 480.760.8958 |
INSIGHT ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In THOUSANDS)
(UNAUDITED)
| December 31,<br>2022 | December 31,<br>2021 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| ASSETS | ||||||||||
| Current assets: | ||||||||||
| Cash and cash equivalents | $ | 163,637 | $ | 103,840 | ||||||
| Accounts receivable, net | 3,272,371 | 2,936,732 | ||||||||
| Inventories | 265,154 | 328,101 | ||||||||
| Other current assets | 199,506 | 199,638 | ||||||||
| Total current assets | 3,900,668 | 3,568,311 | ||||||||
| Property and equipment, net | 204,260 | 176,263 | ||||||||
| Goodwill | 493,033 | 428,346 | ||||||||
| Intangible assets, net | 204,998 | 214,788 | ||||||||
| Other assets | 309,622 | 301,372 | ||||||||
| $ | 5,112,581 | $ | 4,689,080 | |||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||
| Current liabilities: | ||||||||||
| Accounts payable – trade | $ | 1,785,076 | $ | 1,779,854 | ||||||
| Accounts payable – inventory financing facilities | 301,314 | 311,878 | ||||||||
| Accrued expenses and other current liabilities | 433,789 | 423,489 | ||||||||
| Current portion of long-term debt | 346,228 | 36 | ||||||||
| Total current liabilities | 2,866,407 | 2,515,257 | ||||||||
| Long-term debt | 291,672 | 361,570 | ||||||||
| Deferred income taxes | 32,844 | 47,073 | ||||||||
| Other liabilities | 283,590 | 255,953 | ||||||||
| 3,474,513 | 3,179,853 | |||||||||
| Stockholders’ equity: | ||||||||||
| Preferred stock | — | — | ||||||||
| Common stock | 340 | 349 | ||||||||
| Additional paid-in capital | 327,872 | 368,282 | ||||||||
| Retained earnings | 1,368,658 | 1,167,690 | ||||||||
| Accumulated other comprehensive loss – foreign currency translation adjustments | (58,802) | (27,094) | ||||||||
| Total stockholders’ equity | 1,638,068 | 1,509,227 | ||||||||
| $ | 5,112,581 | $ | 4,689,080 | - MORE - | ||||||
| --- | --- | --- | --- | --- | ||||||
| Insight Enterprises, Inc. | 2701 E. Insight Way | Chandler, Arizona 85286 | 800.467.4448 | FAX 480.760.8958 |
INSIGHT ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
| Twelve Months Ended<br>December 31, | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 2022 | 2021 | |||||||||
| Cash flows from operating activities: | ||||||||||
| Net earnings | $ | 280,608 | $ | 219,345 | ||||||
| Adjustments to reconcile net earnings to net cash provided by operating activities: | ||||||||||
| Depreciation and amortization | 56,614 | 55,421 | ||||||||
| Provision for losses on accounts receivable | 6,066 | 7,862 | ||||||||
| Non-cash stock-based compensation | 22,710 | 18,201 | ||||||||
| Deferred income taxes | (9,251) | 11,858 | ||||||||
| Amortization of debt discount and issuance costs | 6,105 | 16,875 | ||||||||
| Other adjustments | 2,035 | (3,259) | ||||||||
| Changes in assets and liabilities: | ||||||||||
| Increase in accounts receivable | (406,370) | (289,009) | ||||||||
| Decrease (increase) in inventories | 53,711 | (148,941) | ||||||||
| Decrease (increase) in other assets | 27,858 | (18,100) | ||||||||
| Increase in accounts payable | 53,607 | 303,395 | ||||||||
| Increase (decrease) in accrued expenses and other liabilities | 4,413 | (9,937) | ||||||||
| Net cash provided by operating activities: | 98,106 | 163,711 | ||||||||
| Cash flows from investing activities: | ||||||||||
| Proceeds from sale of assets | 1,346 | 31,005 | ||||||||
| Purchases of property and equipment | (70,939) | (52,079) | ||||||||
| Acquisitions, net of cash and cash equivalents acquired | (68,248) | — | ||||||||
| Net cash used in investing activities: | (137,841) | (21,074) | ||||||||
| Cash flows from financing activities: | ||||||||||
| Borrowings on ABL revolving credit facility | 4,678,212 | 3,953,496 | ||||||||
| Repayments on ABL revolving credit facility | (4,433,510) | (4,040,496) | ||||||||
| Net repayments under inventory financing facilities | (8,307) | (14,355) | ||||||||
| Repurchases of common stock | (107,922) | (50,000) | ||||||||
| Other payments | (14,466) | (10,030) | ||||||||
| Net cash provided by (used in) financing activities: | 114,007 | (161,385) | ||||||||
| Foreign currency exchange effect on cash, cash equivalents and restricted cash balances | (14,531) | (5,857) | ||||||||
| Increase (decrease) in cash, cash equivalents and restricted cash | 59,741 | (24,605) | ||||||||
| Cash, cash equivalents and restricted cash at beginning of period | 105,977 | 130,582 | ||||||||
| Cash, cash equivalents and restricted cash at end of period | $ | 165,718 | $ | 105,977 | - MORE - | |||||
| --- | --- | --- | --- | --- | ||||||
| Insight Enterprises, Inc. | 2701 E. Insight Way | Chandler, Arizona 85286 | 800.467.4448 | FAX 480.760.8958 |
INSIGHT ENTERPRISES, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
| Three Months Ended<br>December 31, | Twelve Months Ended December 31, | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2022 | 2021 | 2022 | 2021 | |||||||||||||||
| Adjusted Consolidated Earnings from Operations: | ||||||||||||||||||
| GAAP consolidated EFO | $ | 114,016 | $ | 93,417 | $ | 413,700 | $ | 332,061 | ||||||||||
| Amortization of intangible assets | 8,077 | 7,948 | 32,892 | 32,045 | ||||||||||||||
| Other | 6,172 | 1,583 | 20,018 | (1,634) | ||||||||||||||
| Adjusted non-GAAP consolidated EFO | $ | 128,265 | $ | 102,948 | $ | 466,610 | $ | 362,472 | ||||||||||
| GAAP EFO as a percentage of net sales | 4.6% | 3.6% | 4.0% | 3.5% | ||||||||||||||
| Adjusted non-GAAP EFO as a percentage of net sales | 5.1% | 4.0% | 4.5% | 3.8% | ||||||||||||||
| Adjusted Consolidated Net Earnings: | ||||||||||||||||||
| GAAP consolidated net earnings | $ | 77,477 | $ | 62,133 | $ | 280,608 | $ | 219,345 | ||||||||||
| Amortization of intangible assets | 8,077 | 7,948 | 32,892 | 32,045 | ||||||||||||||
| Amortization of debt discount and issuance costs | — | 3,079 | — | 12,124 | ||||||||||||||
| Other | 6,172 | 1,583 | 20,018 | (1,634) | ||||||||||||||
| Income taxes on non-GAAP adjustments | (3,533) | (3,209) | (13,306) | (10,325) | ||||||||||||||
| Adjusted non-GAAP consolidated net earnings | $ | 88,193 | $ | 71,534 | $ | 320,212 | $ | 251,555 | ||||||||||
| Adjusted Diluted Earnings Per Share: | ||||||||||||||||||
| GAAP diluted EPS | $ | 2.13 | $ | 1.69 | $ | 7.66 | $ | 5.95 | ||||||||||
| Amortization of intangible assets | 0.22 | 0.22 | 0.90 | 0.87 | ||||||||||||||
| Amortization of debt discount and issuance costs | — | 0.08 | — | 0.33 | ||||||||||||||
| Other | 0.17 | 0.04 | 0.55 | (0.04) | ||||||||||||||
| Income taxes on non-GAAP adjustments | (0.10) | (0.09) | (0.36) | (0.28) | ||||||||||||||
| Impact of benefit from note hedge | 0.11 | 0.09 | 0.36 | 0.27 | ||||||||||||||
| Adjusted non-GAAP diluted EPS | $ | 2.53 | $ | 2.03 | $ | 9.11 | $ | 7.10 | ||||||||||
| Shares used in diluted EPS calculation | 36,336 | 36,871 | 36,620 | 36,863 | ||||||||||||||
| Impact of benefit from note hedge | (1,459) | (1,604) | (1,466) | (1,453) | ||||||||||||||
| Shares used in Adjusted non-GAAP diluted EPS calculation | 34,877 | 35,267 | 35,154 | 35,410 | ||||||||||||||
| Adjusted North America Earnings from Operations: | ||||||||||||||||||
| GAAP EFO from North America segment | $ | 99,341 | $ | 76,504 | $ | 350,436 | $ | 268,813 | ||||||||||
| Amortization of intangible assets | 7,563 | 7,347 | 30,735 | 29,576 | ||||||||||||||
| Other | 5,376 | 1,232 | 17,910 | (3,129) | ||||||||||||||
| Adjusted non-GAAP EFO from North America segment | $ | 112,280 | $ | 85,083 | $ | 399,081 | $ | 295,260 | ||||||||||
| GAAP EFO as a percentage of net sales | 4.8 | % | 3.7 | % | 4.1 | % | 3.6 | % | ||||||||||
| Adjusted non-GAAP EFO as a percentage of net sales | 5.4 | % | 4.1 | % | 4.7 | % | 3.9 | % | - MORE - | |||||||||
| --- | --- | --- | --- | --- | ||||||||||||||
| Insight Enterprises, Inc. | 2701 E. Insight Way | Chandler, Arizona 85286 | 800.467.4448 | FAX 480.760.8958 |
INSIGHT ENTERPRISES, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
| Three Months Ended<br>December 31, | Twelve Months Ended December 31, | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2022 | 2021 | 2022 | 2021 | |||||||||||||||
| Adjusted EMEA Earnings from Operations: | ||||||||||||||||||
| GAAP EFO from EMEA segment | $ | 10,710 | $ | 12,508 | $ | 44,264 | $ | 46,918 | ||||||||||
| Amortization of intangible assets | 405 | 480 | 1,696 | 1,971 | ||||||||||||||
| Other | 707 | 193 | 2,017 | 1,328 | ||||||||||||||
| Adjusted non-GAAP EFO from EMEA segment | $ | 11,822 | $ | 13,181 | $ | 47,977 | $ | 50,217 | ||||||||||
| GAAP EFO as a percentage of net sales | 2.9 | % | 2.9 | % | 2.6 | % | 2.8 | % | ||||||||||
| Adjusted non-GAAP EFO as a percentage of net sales | 3.2 | % | 3.1 | % | 2.8 | % | 2.9 | % | ||||||||||
| Adjusted APAC Earnings from Operations: | ||||||||||||||||||
| GAAP EFO from APAC segment | $ | 3,965 | $ | 4,405 | $ | 19,000 | $ | 16,330 | ||||||||||
| Amortization of intangible assets | 109 | 121 | 461 | 498 | ||||||||||||||
| Other | 89 | 158 | 91 | 167 | ||||||||||||||
| Adjusted non-GAAP EFO from APAC segment | $ | 4,163 | $ | 4,684 | $ | 19,552 | $ | 16,995 | ||||||||||
| GAAP EFO as a percentage of net sales | 7.2 | % | 8.2 | % | 8.1 | % | 7.7 | % | ||||||||||
| Adjusted non-GAAP EFO as a percentage of net sales | 7.6 | % | 8.7 | % | 8.3 | % | 8.0 | % | ||||||||||
| Adjusted EBITDA: | ||||||||||||||||||
| GAAP consolidated net earnings | $ | 77,477 | $ | 62,133 | $ | 280,608 | $ | 219,345 | ||||||||||
| Interest expense | 11,271 | 10,907 | 41,577 | 41,198 | ||||||||||||||
| Income tax expense | 25,695 | 20,809 | 93,825 | 73,212 | ||||||||||||||
| Depreciation and amortization of property and equipment | 6,333 | 5,322 | 23,722 | 23,376 | ||||||||||||||
| Amortization of intangible assets | 8,077 | 7,948 | 32,892 | 32,045 | ||||||||||||||
| Other | 6,172 | 1,583 | 20,018 | (1,634) | ||||||||||||||
| Adjusted non-GAAP EBITDA | $ | 135,025 | $ | 108,702 | $ | 492,642 | $ | 387,542 | ||||||||||
| GAAP consolidated net earnings as a percentage of net sales | 3.1% | 2.4% | 2.7% | 2.3% | ||||||||||||||
| Adjusted non-GAAP EBITDA as a percentage of net sales | 5.4% | 4.2% | 4.7% | 4.1% | - MORE - | |||||||||||||
| --- | --- | --- | --- | --- | ||||||||||||||
| Insight Enterprises, Inc. | 2701 E. Insight Way | Chandler, Arizona 85286 | 800.467.4448 | FAX 480.760.8958 |
INSIGHT ENTERPRISES, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
| Twelve Months Ended<br><br>December 31, | ||||||
|---|---|---|---|---|---|---|
| 2022 | 2021 | |||||
| Adjusted return on invested capital: | ||||||
| GAAP consolidated EFO | $ | 413,700 | $ | 332,061 | ||
| Amortization of intangible assets | 32,892 | 32,045 | ||||
| Other | 20,018 | (1,634) | ||||
| Adjusted non-GAAP consolidated EFO* | 466,610 | 362,472 | ||||
| Income tax expense** | 121,319 | 94,243 | ||||
| Adjusted non-GAAP consolidated EFO, net of tax | $ | 345,291 | $ | 268,229 | ||
| Average stockholders’ equity*** | $ | 1,584,075 | $ | 1,417,114 | ||
| Average debt*** | 713,279 | 445,792 | ||||
| Average cash*** | (131,283) | (117,214) | ||||
| Invested Capital | $ | 2,166,071 | $ | 1,745,692 | ||
| Adjusted non-GAAP ROIC (from GAAP consolidated EFO) **** | 14.13 | % | 14.08 | % | ||
| Adjusted non-GAAP ROIC (from non-GAAP consolidated EFO) ***** | 15.94 | % | 15.37 | % |
*The adjusted non-GAAP consolidated EFO amount used for the Adjusted non-GAAP ROIC calculation excludes amortization of intangible assets. This calculation remains consistent with the metric utilized in management’s compensation plan.
** Assumed tax rate of 26.0%.
*** Average of previous five quarters.
**** Computed as GAAP consolidated EFO, net of tax of $107,562 and $86,336 for the twelve months ended December 31, 2022 and 2021, respectively, divided by invested capital.
***** Computed as Adjusted non-GAAP consolidated EFO, net of tax, divided by invested capital.
q42022-earningspresentat
Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2023 Insight Direct USA, Inc. All Rights Reserved. 1 Insight Enterprises, Inc. Fourth Quarter and Full Year 2022 Earnings Conference Call and Webcast
Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2022 Insight Direct USA, Inc. All Rights Reserved. 23 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 coronavirus strain COVID-19 (“COVID-19”), our future responses to and the impact of COVID-19 on our Company, our expectations about future financial results and the assumptions related thereto, our expectations regarding current supply constraints, our expectations regarding backlog shipments, our expectations relating to repurchases of our common stock, including the estimated completion of our planned share repurchases under our current authorization, future expected trends in the IT market and our opportunities for growth, are forward-looking statements. These forward- looking statements are subject to assumptions, risks and uncertainties which could cause actual results or future events to differ materially from such statements. The Company undertakes no obligation to update publicly or revise any of the forward-looking statements, except as otherwise required by law. More detailed information about forward-looking statements and risk factors is included in today’s press release and discussed in the Company’s most recently filed periodic reports and subsequent filings with the Securities and Exchange Commission. ◦ Non-GAAP measures This presentation will reference certain non-GAAP financial information as ‘Adjusted’. A reconciliation of non-GAAP financial measures presented in this document to our actual GAAP results is attached to the back of this presentation and included in the press release issued today, which you may find on the Investor Relations section of our website at investor.insight.com. These non-GAAP measures are used by the Company and its management to evaluate financial performance against budgeted amounts, to calculate incentive compensation, to assist in forecasting future performance and to compare the Company’s results to those of the Company’s competitors. The Company believes that these non-GAAP financial measures are useful to investors because they allow for greater transparency, facilitate comparisons to prior periods and the Company’s competitors’ results and assist in forecasting performance for future periods. 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. ◦ Constant currency In some instances, the Company refers to changes in net sales, gross profit and earnings from operations on a consolidated basis and in North America, EMEA and APAC excluding the effects of fluctuating foreign currency exchange rates. In computing these changes and percentages, the Company compares the current year amount as translated into U.S. dollars under the applicable accounting standards to the prior year amount in local currency translated into U.S. dollars utilizing the weighted average translation rate for the current period. ◦ 2017 period prior to ASC 606 adoption Effective January 1, 2018, we adopted ASU No. 2014-09, Revenue from Contracts with Customers using the modified retrospective transition method. As a result of our adoption method, the 2017 income statement was not re-stated, while the income statements in 2018 and forward reflect additional netting on certain security software items. This change in certain netting items would be <1% impact on total revenue and total cogs (no impact on gross profit) in 2017. We consider the impact insignificant for comparison purposes.
Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2022 Insight Direct USA, Inc. All Rights Reserved. 33 Table of Contents ◦ Solutions Integrator Strategy ◦ Areas of Expertise ◦ 2027 KPIs for Success ◦ Solutions at Work ◦ Fourth Quarter and Full Year 2022 Highlights and Performance ◦ Liquidity and Debt Covenants ◦ 2023 Outlook ◦ Appendix
Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2022 Insight Direct USA, Inc. All Rights Reserved. 43 Our strategy is to become THE leading SOLUTIONS INTEGRATOR The pillars of our strategy are: Solutions Integrator Systems Integrator Reseller Distributor ≠ Captivate Clients Sell Solutions Deliver Differentiation Champion our Culture
Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2022 Insight Direct USA, Inc. All Rights Reserved. 53 Well Positioned to Help Organizations
Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2022 Insight Direct USA, Inc. All Rights Reserved. 63 2027 KPIs for Success KPIs 2027** Existing: Adjusted EBITDA Margin* 6.5% - 7.0% Adjusted ROIC* >25% New Metrics: Core services GP | 5-year CAGR 16% - 20% Cloud GP | 5-year CAGR 16% - 20% Adjusted DEPS* | 5-year CAGR 19% - 22% Adjusted free cash flow as % Adjusted net income* >90% *Adjusted non-GAAP basis excludes (i) severance and restructuring expenses, (ii) certain recruitment and hiring-related expenses, (iii) amortization of intangible assets, (iv) transformation costs, (v) certain acquisition and integration-related expenses, (vi) debt discount amortization, and (vii) the tax effects of each of these items, as applicable. Due to the inherent difficulty of forecasting these adjustments, which impact net earnings, diluted earnings per share, ROIC and EBITDA, the Company is unable to reasonably estimate the impact of such adjustments, if any, to net earnings, diluted earnings per share, ROIC and EBITDA. Accordingly, the Company is unable to provide a reconciliation for the 2027 forecast of GAAP to non-GAAP net earnings, diluted earnings per share, ROIC and EBITDA ** Baseline year is 2022 Note: Insight Core services is defined as services we deliver and manage. Adjusted free cash flow is defined as cash flow from operations minus capital expenditures
Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2022 Insight Direct USA, Inc. All Rights Reserved. 73 GROSS MARGIN 16.8% up 180 bps EFO MARGIN 4.6% up 100 bps ADJUSTED EFO* MARGIN 5.1% up 110 bps Q4/Full Year 2022 Performance (Changes against prior year period) * See Appendix for reconciliation of non-GAAP measures ** Reference “Constant currency” section on slide 2 of this presentation *** For the twelve months ended December 31, 2022 Q4 2022 $2.5B decrease of 2% NET SALES MARGINS Q4 2022 $421M increase of 9% GROSS PROFIT 49% services as a % of total gross profit and 21% cloud as a % of total gross profit*** FY 2022 $10.4B increase of 11% FY 2022 $1.6B increase of 13% Q4 2022 FY 2022 GROSS MARGIN 15.7% up 40 bps EFO MARGIN 4.0% up 50 bps ADJUSTED EFO* MARGIN 4.5% up 70 bps SEGMENTS (Q4 2022) NET SALES GROSS PROFIT EFO ADJUSTED EFO* NORTH AMERICA $2.1B $345M $99M $112M decrease of 1% increase of 12% increase of 30% increase of 32% EMEA** $375M $61M $11M $12M flat YoY increase of 9% decrease of 8% decrease of 3% APAC** $55M $14M $4M $4M increase of 12% increase of 11% decrease of 2% decrease of 4% GROSS MARGIN EFO MARGIN ADJUSTED EFO* MARGIN
Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2022 Insight Direct USA, Inc. All Rights Reserved. 83 Q4/Full Year 2022 Performance (Changes against prior year period) * See Appendix for reconciliation of non-GAAP measures Q4 2022 $114M increase of 22% EARNINGS HEADCOUNT Skilled, certified consulting and service delivery professionals EARNINGS FROM OPERATIONS DILUTED EARNINGS PER SHARE FY 2022 $414M increase of 25% Q4 2022 $2.13 increase of 26% FY 2022 $7.66 increase of 29% Q4 2022 $128M increase of 25% FY 2022 $467M increase of 29% CASH CONVERSION CYCLE 40 DAYS up 9 days ADJUSTED EARNINGS FROM OPERATIONS* NET CASH FROM OPERATIONS $304M QTD/$98M YTD Days sales outstanding (DSO) +15 days Days inventory outstanding (DIO) -2 days Days purchases outstanding (DPO) -4 days Q4 2022 $2.53 increase of 25% FY 2022 $9.11 increase of 28% ADJUSTED DILUTED EARNINGS PER SHARE* CASH FLOWS AND CASH CYCLE SERVICE DELIVERY SCALE 5,500+
Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2022 Insight Direct USA, Inc. All Rights Reserved. 93 How Vivli is Enabling Scientific Discoveries to Benefit Global Health The challenge: The results: • Create a data-sharing platform to provide researchers around the globe SECURE access to a vast array of clinical trial data • Provide smooth user experience with intuitive front end • Ensure scalable and manageable platform for growth • Clinical data growth of 42% per year • More use than ever before - user growth of 20% per year • Enabling discoveries for Alzheimer's, diabetes and more The solution: • Full complement of Azure services integrated and deployed • Utilized expertise across security, application, development, user interface design and infrastructure • Ongoing management and support of the platform
Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2022 Insight Direct USA, Inc. All Rights Reserved. 103 Fortune 100 Insurance and Financial Services Provider Modernizes Security The challenge: The results: • Passwords, encryption keys and authentication information ("secrets") stored in many different locations • Delays in employee access to applications • Secrets were at risk of exposure with potential to create a security breach • Needed a better management process for the renewal of web security certificates The solution: • Implemented fully automated Vault™ clusters to help consolidate credentials through HashiCorp® Vault adoption • Onboarding for DevOps team • Automation to monitor web security certificate expiration • Self-service between multiple applications • Consolidated and secured secrets across the enterprise • Seamless auto directed self-service across applications • Eliminated numerous secret-zero scenarios • Automatically manage compliance of web security certificate renewals
Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2022 Insight Direct USA, Inc. All Rights Reserved. 113 Awards
Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2022 Insight Direct USA, Inc. All Rights Reserved. 123 2022 Industry and Partner Recognitions
Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2022 Insight Direct USA, Inc. All Rights Reserved. 133 GROSS MARGIN 16.8% up 180 bps EFO MARGIN 4.6% up 100 bps ADJUSTED EFO* MARGIN 5.1% up 110 bps Q4/Full Year 2022 Performance (Changes against prior year period) * See Appendix for reconciliation of non-GAAP measures ** Reference “Constant currency” section on slide 2 of this presentation *** For the twelve months ended December 31, 2022 Q4 2022 $2.5B decrease of 2% NET SALES MARGINS Q4 2022 $421M increase of 9% GROSS PROFIT 49% services as a % of total gross profit and 21% cloud as a % of total gross profit*** FY 2022 $10.4B increase of 11% FY 2022 $1.6B increase of 13% Q4 2022 FY 2022 GROSS MARGIN 15.7% up 40 bps EFO MARGIN 4.0% up 50 bps ADJUSTED EFO* MARGIN 4.5% up 70 bps SEGMENTS (Q4 2022) NET SALES GROSS PROFIT EFO ADJUSTED EFO* NORTH AMERICA $2.1B $345M $99M $112M decrease of 1% increase of 12% increase of 30% increase of 32% EMEA** $375M $61M $11M $12M flat YoY increase of 9% decrease of 8% decrease of 3% APAC** $55M $14M $4M $4M increase of 12% increase of 11% decrease of 2% decrease of 4% GROSS MARGIN EFO MARGIN ADJUSTED EFO* MARGIN
Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2022 Insight Direct USA, Inc. All Rights Reserved. 143 Q4/Full Year 2022 Performance (Changes against prior year period) * See Appendix for reconciliation of non-GAAP measures Q4 2022 $114M increase of 22% EARNINGS HEADCOUNT Skilled, certified consulting, and service delivery professionals EARNINGS FROM OPERATIONS DILUTED EARNINGS PER SHARE FY 2022 $414M increase of 25% Q4 2022 $2.13 increase of 26% FY 2022 $7.66 increase of 29% Q4 2022 $128M increase of 25% FY 2022 $467M increase of 29% CASH CONVERSION CYCLE 40 DAYS up 9 days ADJUSTED EARNINGS FROM OPERATIONS* NET CASH FROM OPERATIONS $304M QTD/$98M YTD Days sales outstanding (DSO) +15 days Days inventory outstanding (DIO) -2 days Days purchases outstanding (DPO) -4 days Q4 2022 $2.53 increase of 25% FY 2022 $9.11 increase of 28% ADJUSTED DILUTED EARNINGS PER SHARE* CASH FLOWS AND CASH CYCLE SERVICE DELIVERY SCALE 5,500+
Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2022 Insight Direct USA, Inc. All Rights Reserved. 153 First Half 2022 (compared to 1H 2021) • Net sales growth of 22% fueled by exceptionally strong device growth in high 30% range • Gross margin contraction of 70 bps • Cash used in operations of $442M Net Sales $4.4B $5.4B 1H 2021 1H 2022 Second Half 2022 (compared to 2H 2021) • Net sales flat year over year • Gross margin expansion of 140 bps • Cash provided by operations of $540M FY 2022 | Year of Two Halves Gross Margin 15.8% 15.1% 1H 2021 1H 2022 Gross Margin -70 bps Net Sales +22% YoY Net Sales $5.0B $5.0B 2H 2021 2H 2022 Gross Margin 14.9% 16.3% 2H 2021 2H 2022 Net Sales flat YoY Gross Margin +140 bps
Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2022 Insight Direct USA, Inc. All Rights Reserved. 163 2027 KPIs for Success KPIs 2022 2027** Existing: Adjusted EBITDA Margin* 4.7% 6.5% - 7.0% Adjusted ROIC* 15.9% >25% New Metrics: Core services GP | 5-year CAGR 14% 16% - 20% Cloud GP | 5-year CAGR 32% 16% - 20% Adjusted DEPS* | 5-year CAGR 21% 19% - 22% Adjusted free cash flow as % Adjusted net income* 8% 1H (302)% / 2H 327% >90% *Adjusted non-GAAP basis excludes (i) severance and restructuring expenses, (ii) certain recruitment and hiring-related expenses, (iii) amortization of intangible assets, (iv) transformation costs, (v) certain acquisition and integration-related expenses, (vi) debt discount amortization, and (vii) the tax effects of each of these items, as applicable. Due to the inherent difficulty of forecasting these adjustments, which impact net earnings, diluted earnings per share, ROIC and EBITDA, the Company is unable to reasonably estimate the impact of such adjustments, if any, to net earnings, diluted earnings per share, ROIC and EBITDA. Accordingly, the Company is unable to provide a reconciliation for the 2027 forecast of GAAP to non-GAAP net earnings, diluted earnings per share, ROIC and EBITDA ** Baseline year is 2022 Note: Insight Core services is defined as services Insight delivers and manages. Adjusted free cash flow is defined as cash flow from operations minus capital expenditures
Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2022 Insight Direct USA, Inc. All Rights Reserved. 173 $2.5B NET SALES decrease of 2% y/y $421M GROSS PROFIT increase of 9% y/y $10.4B* increase of 11% y/y * For the twelve months ended December 31, 2022 $1.6B* increase of 13% y/y $2.6B $2.7B $2.7B $2.5B $2.5B Q4-21 Q1-22 Q2-22 Q3-22 Q4-22 $7.1B $7.7B $8.3B $9.4B $10.4B 2018 2019 2020 2021 2022 $385M $379M $438M $399M $421M Q4-21 Q1-22 Q2-22 Q3-22 Q4-22 $1.0B $1.1B $1.3B $1.4B $1.6B 2018 2019 2020 2021 2022 15.0% 14.3% 16.0% 15.8% 16.8% 14.0% 14.7% 15.6% 15.3% 15.7% Gross Margin
Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2022 Insight Direct USA, Inc. All Rights Reserved. 183 $800M* $384M SERVICES NET SALES increase of 9% y/y $213M SERVICES GROSS PROFIT increase of 15% y/y $1.5B* increase of 13% y/y * For the twelve months ended December 31, 2022 increase of 13% y/y $352M $341M $394M $365M $384M Q4-21 Q1-22 Q2-22 Q3-22 Q4-22 $185M $176M $225M $187M $213M Q4-21 Q1-22 Q2-22 Q3-22 Q4-22 $455M $531M $625M $708M $800M 2018 2019 2020 2021 2022 $830M $999M $1,168M $1,316M $1,483M 2018 2019 2020 2021 2022 53% 52% 57% 51% 56% Gross Margin 55% 53% 53% 54% 54%
Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2022 Insight Direct USA, Inc. All Rights Reserved. 193 $65M INSIGHT CORE SERVICES GROSS PROFIT increase of 11% y/y $91M CLOUD GROSS PROFIT increase of 44% y/y $253M* increase of 14% y/y * For the twelve months ended December 31, 2022 Note: Insight Core services is defined as services Insight delivers and manages $340M* increase of 29% y/y $58M $61M $67M $59M $65M Q4-21 Q1-22 Q2-22 Q3-22 Q4-22 $142M $167M $196M $221M $253M 2018 2019 2020 2021 2022 $63M $64M $103M $82M $91M Q4-21 Q1-22 Q2-22 Q3-22 Q4-22 $134M $162M $218M $264M $340M 2018 2019 2020 2021 2022 26% 27% 28% 25% 28% Gross Margin 28% 26% 27% 27% 27%
Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2022 Insight Direct USA, Inc. All Rights Reserved. 203 ADJUSTED EARNINGS FROM OPERATIONS** increase of 25% y/y EARNINGS FROM OPERATIONS $467M* $93M $80M $130M $90M $114M Q4-21 Q1-22 Q2-22 Q3-22 Q4-22 $233M $241M $272M $332M $414M 2018 2019 2020 2021 2022 * For the twelve months ended December 31, 2022 ** See Appendix for reconciliation of non-GAAP measures $114M increase of 22% y/y $414M* increase of 25% y/y $128M $103M $90M $142M $107M $128M Q4-21 Q1-22 Q2-22 Q3-22 Q4-22 increase of 29% y/y $253M $282M $322M $362M $467M 2018 2019 2020 2021 2022
Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2022 Insight Direct USA, Inc. All Rights Reserved. 213 ADJUSTED DILUTED EARNINGS PER SHARE** increase of 25% y/y DILUTED EARNINGS PER SHARE $9.11* $1.69 $1.53 $2.42 $1.58 $2.13 Q4-21 Q1-22 Q2-22 Q3-22 Q4-22 $4.55 $4.43 $4.87 $5.95 $7.66 2018 2019 2020 2021 2022 * For the twelve months ended December 31, 2022 ** See Appendix for reconciliation of non-GAAP measures $2.13 increase of 26% y/y $7.66* increase of 29% y/y $2.53 $2.03 $1.81 $2.78 $1.99 $2.53 Q4-21 Q1-22 Q2-22 Q3-22 Q4-22 increase of 28% y/y $4.95 $5.42 $6.19 $7.10 $9.11 2018 2019 2020 2021 2022
Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2022 Insight Direct USA, Inc. All Rights Reserved. 223 Liquidity and Debt Covenants Twelve Months Ended December 31, US Dollars in $000s 2022 2021 Adjusted Consolidated EBITDA Net earnings $ 280,608 $ 219,345 Interest expense 41,577 41,198 Taxes 93,825 73,212 Depreciation and amortization of property and equipment 23,722 23,376 Amortization of intangible assets 32,892 32,045 Other* 20,018 (1,634) Adjusted consolidated EBITDA $ 492,642 $ 387,542 Net earnings as a % of net sales 2.7 % 2.3 % Adjusted consolidated EBITDA margin 4.7 % 4.1 % Add: Non-cash stock-based compensation 22,710 18,201 Less: Capital expenditures (71,072) (52,079) Adjusted consolidated EBITDAS for FCCR Ratio $ 444,280 $ 353,664 Taxes and interest** $ 118,090 $ 86,994 Fixed Charge Coverage Ratio 3.8 4.1 Fixed Charge Coverage $444,280 $118,090 EBITDA-Dividends-CAPEX Fixed Charges $— $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 $400,000 $450,000 $500,000 Total Leverage Ratio $637,900 $515,352 Consolidated Funded Indebtedness Adjusted Consolidated EBITDAS $— $300,000 $600,000 $900,000 $1,200,000 * “Other” includes (i) severance and restructuring expenses, (ii) certain executive recruitment and hiring related expenses, (iii) transformation costs, and (iv) certain acquisition and integration related expenses ** Tax expense plus interest expense less non-cash imputed interest under the Company’s inventory financing facilities and the Company’s convertible notes 3.76x 1.24x
Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2022 Insight Direct USA, Inc. All Rights Reserved. 233 Full Year 2023 Outlook Assumptions: As of February 9, 2023 Gross profit growth high single digit Adjusted diluted EPS* $9.90 - $10.10 Interest expense $48 - $52 million Effective tax rate 25% - 26% Capital expenditures $55 - $60 million Average share count 34.3 million Other Exclusions and Assumptions: • Average share count assumed after an estimated completion of our planned share repurchases under our current authorization net of estimated dilution • Excludes acquisition-related intangibles amortization expense of approximately $32 million (posted on website) • Assumes no acquisition or integration-related, transformation or severance and restructuring expenses • Assumes no significant change in our debt instruments * Adjusted diluted earnings per share excludes severance and restructuring expense and other unique items as well as amortization expense related to acquired intangibles. Due to the inherent difficulty of forecasting some of these types of expenses, which impact net earnings and diluted earnings per share, the Company is unable to reasonably estimate the impact of such expenses, if any, to net earnings and diluted earnings per share. Accordingly, the Company is unable to provide a reconciliation of GAAP to non-GAAP diluted earnings per share for the full year 2023 forecast
Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2023 Insight Direct USA, Inc. All Rights Reserved. 24 Appendix
Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2022 Insight Direct USA, Inc. All Rights Reserved. 253 FY 2022 | Financial Performance Twelve Months Ended December 31, US Dollars in $000s, except for per share data 2022 2021 Change Consolidated IEI Net sales $10,431,191 $9,436,113 11 % Net sales, constant currency* 13 % Product net sales $8,947,787 $8,120,127 10 % Services net sales $1,483,404 $1,315,986 13 % Gross profit $1,636,567 $1,447,557 13 % Gross margin 15.7 % 15.3 % 40 bps Gross profit, constant currency* 16 % Product gross profit $836,535 $739,219 13 % Services gross profit $800,032 $708,338 13 % Selling, general, and administrative expenses $1,216,660 $1,117,130 9 % Selling, general, and administrative expenses, constant currency* 11 % GAAP earnings from operations $413,700 $332,061 25 % Adjusted earnings from operations** $466,610 $362,472 29 % GAAP diluted earnings per share $7.66 $5.95 29 % Adjusted diluted earnings per share** $9.11 $7.10 28 % * Reference “Constant currency” section on slide 2 of this presentation ** See Appendix for reconciliation of non-GAAP measures
Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2022 Insight Direct USA, Inc. All Rights Reserved. 263 * See Appendix for reconciliation of non-GAAP measures Consolidated IEI Financial Metrics Three Months Ended Q4-21 Q1-22 Q2-22 Q3-22 Q4-22 Net Sales YoY 12 % 21 % 23 % 4 % (2) % Gross Margin 15.0 % 14.3 % 16.0 % 15.8 % 16.8 % GAAP EFO $93.4M $79.8M $129.6M $90.3M $114.0M GAAP EFO YoY 12 % 19 % 46 % 9 % 22 % GAAP EFO Margin 3.6 % 3.0 % 4.7 % 3.6 % 4.6 % Adjusted EFO* $102.9M $89.6M $141.7M $107.1M $128.3M Adjusted EFO* YoY 12 % 31 % 45 % 14 % 25 % Adjusted EFO* Margin 4.0 % 3.4 % 5.2 % 4.2 % 5.1 % GAAP Diluted EPS $1.69 $1.53 $2.42 $1.58 $2.13 GAAP Diluted EPS YoY 13 % 30 % 53 % 5 % 26 % Adjusted Diluted EPS* $2.03 $1.81 $2.78 $1.99 $2.53 Adjusted Diluted EPS* YoY 15 % 39 % 46 % 6 % 25 % Twelve Months Ended 2018 2019 2020 2021 2022 Net Sales YoY 6 % 9 % 8 % 13 % 11 % Gross Margin 14.0 % 14.7 % 15.6 % 15.3 % 15.7 % GAAP EFO $233.5M $240.6M $271.6M $332.1M $413.7M GAAP EFO YoY 30 % 3 % 13 % 22 % 25 % GAAP EFO Margin 3.3 % 3.1 % 3.3 % 3.5 % 4.0 % Adjusted EFO* $252.9M $281.8M $322.4M $362.5M $466.6M Adjusted EFO* YoY 19 % 11 % 14 % 12 % 29 % Adjusted EFO* Margin 3.6 % 3.6 % 3.9 % 3.8 % 4.5 % GAAP Diluted EPS $4.55 $4.43 $4.87 $5.95 $7.66 GAAP Diluted EPS YoY 82 % (3) % 10 % 22 % 29 % Adjusted Diluted EPS* $4.95 $5.42 $6.19 $7.10 $9.11 Adjusted Diluted EPS* YoY 40 % 9 % 14 % 15 % 28 %
Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2022 Insight Direct USA, Inc. All Rights Reserved. 273 * See Appendix for reconciliation of non-GAAP measures ** In constant currency for EMEA and APAC. Reference “Constant currency” section on slide 2 of this presentation GEO Financial Metrics Twelve Months Ended North America EMEA APAC Net Sales $8.5B $1.7B $234.3M Net Sales YoY** 13 % 12 % 18 % Gross Profit $1.3B $247.3M $61.0M Gross Profit YoY** 17 % 6 % 22 % Gross Margin 15.7 % 14.4 % 26.0 % Gross Margin YoY 60 bps (80) bps 90 bps SG&A % of Net Sales 11.5 % 11.7 % 17.9 % SG&A % of Net Sales YoY (10) bps (70) bps 50 bps Adjusted EFO* $399.1M $48.0M $19.6M Adjusted EFO* YoY** 35 % 5 % 22 % Three Months Ended North America EMEA APAC Net Sales $2.1B $375.2M $54.8M Net Sales YoY** (1) % — % 12 % Gross Profit $345.3M $61.2M $14.1M Gross Profit YoY** 12 % 9 % 11 % Gross Margin 16.7 % 16.3 % 25.7 % Gross Margin YoY 200 bps 130 bps (30) bps SG&A % of Net Sales 11.8 % 13.3 % 18.3 % SG&A % of Net Sales YoY 80 bps 130 bps 80 bps Adjusted EFO* $112.3M $11.8M $4.2M Adjusted EFO* YoY** 32 % (3) % (4) %
Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2022 Insight Direct USA, Inc. All Rights Reserved. 283 Services Financial Metrics Three Months Ended Q4-21 Q1-22 Q2-22 Q3-22 Q4-22 Services Revenue $352M $341M $394M $365M $384M Services Revenue YoY 17% 14% 16% 13% 9% Services Gross Profit $185M $176M $225M $187M $213M Insight Core Services Gross Profit $58M $61M $67M $59M $65M Agent Services* Gross Profit $127M $115M $157M $127M $148M Services Gross Profit YoY 14% 10% 16% 10% 15% Insight Core Services Gross Profit YoY 12% 20% 18% 9% 11% Agent Services* Gross Profit YoY 15% 6% 16% 10% 17% Services Gross Margin 53% 52% 57% 51% 56% Insight Core Services Margin 26% 27% 28% 25% 28% Agent Services* Margin 99% 100% 100% 100% 100% Twelve Months Ended 2018 2019 2020 2021 2022 Services Revenue $830M $999M $1,168M $1,316M $1,483M Services Revenue YoY 25% 20% 17% 13% 13% Services Gross Profit $455M $531M $625M $708M $800M Insight Core Services Gross Profit $142M $167M $196M $221M $253M Agent Services* Gross Profit $313M $364M $429M $487M $547M Services Gross Profit YoY 16% 17% 18% 13% 13% Insight Core Services Gross Profit YoY 10% 18% 17% 13% 14% Agent Services* Gross Profit YoY 19% 16% 18% 14% 12% Services Gross Margin 55% 53% 53% 54% 54% Insight Core Services Margin 28% 26% 27% 27% 27% Agent Services* Margin 100% 100% 100% 100% 100% Note 1: Insight Core services is defined as services Insight delivers and manages Note 2: Numbers may not foot due to immaterial rounding * Represents agent services other than those included in Insight Core services
Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2022 Insight Direct USA, Inc. All Rights Reserved. 293 Reconciliation of GAAP to Non-GAAP Financial Measures* Three Months Ended December 31, Twelve Months Ended December 31, US Dollars in $000s, except per share data 2022 2021 2020 2022 2021 Adjusted Consolidated Earnings from Operations: GAAP consolidated EFO $ 114,016 $ 93,417 $ 83,042 413,700 $ 332,061 Amortization of intangible assets 8,077 7,948 7,980 32,892 32,045 Other 6,172 1,583 1,121 20,018 (1,634) Adjusted non-GAAP consolidated EFO $ 128,265 $ 102,948 $ 92,143 $ 466,610 $ 362,472 GAAP EFO as a percentage of net sales 4.6 % 3.6 % 3.6 % 4.0 % 3.5 % Adjusted non-GAAP EFO as a percentage of net sales 5.1 % 4.0 % 4.0 % 4.5 % 3.8 % Adjusted Consolidated Net Earnings: GAAP consolidated net earnings $ 77,477 $ 62,133 $ 53,388 $ 280,608 $ 219,345 Amortization of intangible assets 8,077 7,948 7,980 32,892 32,045 Amortization of debt discount and issuance costs — 3,079 2,949 — 12,124 Other 6,172 1,583 1,121 20,018 (1,634) Income taxes on non-GAAP adjustments (3,533) (3,209) (3,021) (13,306) (10,325) Adjusted non-GAAP consolidated net earnings $ 88,193 $ 71,534 $ 62,417 $ 320,212 $ 251,555 Adjusted Diluted Earnings Per Share: GAAP diluted EPS $ 2.13 $ 1.69 $ 1.50 $ 7.66 $ 5.95 Amortization of intangible assets 0.22 0.22 0.23 0.90 0.87 Amortization of debt discount and issuance costs — 0.08 0.08 — 0.33 Other 0.17 0.04 0.03 0.55 (0.04) Income taxes on non-GAAP adjustments (0.10) (0.09) (0.08) (0.36) (0.28) Impact of benefit from note hedge 0.11 0.09 — 0.36 0.27 Adjusted non-GAAP diluted EPS $ 2.53 $ 2.03 $ 1.76 $ 9.11 $ 7.10 Shares used in diluted EPS calculation 36,336 36,871 35,523 36,620 36,863 Impact of benefit from note hedge (1,459) (1,604) — (1,466) (1,453) Shares used in Adjusted non-GAAP diluted EPS calculation 34,877 35,267 35,523 35,154 35,410 * The non-GAAP financial measures are referred to as “Adjusted”. Adjusted earnings from operations, Adjusted net earnings and Adjusted diluted earnings per share exclude (i) severance and restructuring expenses, (ii) certain executive recruitment and hiring-related expenses, (iii) amortization of intangible assets, (iv) transformation costs, (v) certain acquisition and integration-related expenses, (vi) debt discount amortization, and (vii) the tax effects of each of these items, as applicable
Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2022 Insight Direct USA, Inc. All Rights Reserved. 303 Reconciliation of GAAP to Non-GAAP Financial Measures* (continued) Three Months Ended December 31, Twelve Months Ended December 31, US Dollars in $000s 2022 2021 2022 2021 Adjusted North America Earnings from Operations: GAAP EFO from North America segment $ 99,341 $ 76,504 $ 350,436 $ 268,813 Amortization of intangible assets 7,563 7,347 30,735 29,576 Other 5,376 1,232 17,910 (3,129) Adjusted non-GAAP EFO from North America segment $ 112,280 $ 85,083 $ 399,081 $ 295,260 Adjusted EMEA Earnings from Operations: GAAP EFO from EMEA segment $ 10,710 $ 12,508 $ 44,264 $ 46,918 Amortization of intangible assets 405 480 1,696 1,971 Other 707 193 2,017 1,328 Adjusted non-GAAP EFO from EMEA segment $ 11,822 $ 13,181 $ 47,977 $ 50,217 Adjusted APAC Earnings from Operations: GAAP EFO from APAC segment $ 3,965 $ 4,405 $ 19,000 $ 16,330 Amortization of intangible assets 109 121 461 498 Other 89 158 91 167 Adjusted non-GAAP EFO from APAC segment $ 4,163 $ 4,684 $ 19,552 $ 16,995 * Adjusted earnings from operations excludes (i) severance and restructuring expenses, (ii) certain executive recruitment and hiring-related expenses, (iii) amortization of intangible assets, (iv) transformation costs, (v) certain acquisition and integration-related expenses, and (vi) the tax effects of each of these items, as applicable
Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2022 Insight Direct USA, Inc. All Rights Reserved. 313 Reconciliation of GAAP to Non-GAAP Financial Measures (continued) Twelve Months Ended December 31, Six Months Ended June 30, Six Months Ended December 31, US Dollars in $000s 2022 2022 2022 Adjusted Free Cash Flow: Net cash provided by (used in) operating activities $ 98,106 $ (441,997) $ 540,103 Less: Purchases of property and equipment 70,939 47,256 23,683 Adjusted non-GAAP free cash flow $ 27,167 $ (489,253) $ 516,420 $ 10,431,191 $ 9,436,113 Adjusted Consolidated Net Earnings: GAAP consolidated net earnings $ 280,608 $ 145,815 $ 134,793 Amortization of intangible assets 32,892 15,829 17,063 Amortization of debt discount and issuance costs — — — Other 20,018 6,017 14,001 Income taxes on non-GAAP adjustments (13,306) (5,478) (7,828) Adjusted non-GAAP consolidated net earnings $ 320,212 $ 162,183 $ 158,029 Adjusted free cash flow as % of Adjusted net earnings 8 % (302) % 327 % Adjusted free cash flow as % net earnings 10 % (336) % 383 % * The non-GAAP financial measures are referred to as “Adjusted”. Adjusted earnings from operations, Adjusted net earnings and Adjusted diluted earnings per share exclude (i) severance and restructuring expenses, (ii) certain executive recruitment and hiring-related expenses, (iii) amortization of intangible assets, (iv) transformation costs, (v) certain acquisition and integration-related expenses, (vi) debt discount amortization, and (vii) the tax effects of each of these items, as applicable
Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2022 Insight Direct USA, Inc. All Rights Reserved. 323 Reconciliation of GAAP to Non-GAAP Financial Measures (continued) * The adjusted non-GAAP consolidated EFO amount used for the Adjusted non-GAAP ROIC calculation excludes amortization of intangible assets. This calculation remains consistent with the metric utilized in management’s compensation plan ** Assumed tax rate of 26.0% *** Average of previous five quarters **** Computed as GAAP consolidated EFO, net of tax of $107,562 and $86,336 for the twelve months ended December 31, 2022 and 2021, respectively, divided by invested capital ***** Computed as Adjusted non-GAAP consolidated EFO, net of tax, divided by invested capital Twelve Months Ended December 31, US Dollars in $000s 2022 2021 Return on Invested Capital: GAAP consolidated EFO $ 413,700 $ 332,061 Amortization of intangible assets 32,892 32,045 Other 20,018 (1,634) Adjusted non-GAAP consolidated EFO* $ 466,610 $ 362,472 Income tax expense** 121,319 94,243 Adjusted non-GAAP consolidated EFO, net of tax $ 345,291 $ 268,229 Average stockholders’ equity*** $ 1,584,075 $ 1,417,114 Average debt*** 713,279 445,792 Average cash*** (131,283) (117,214) Invested Capital $ 2,166,071 $ 1,745,692 Adjusted non-GAAP ROIC (from GAAP consolidated EFO)**** 14.13 % 14.08 % Adjusted non-GAAP ROIC (from non-GAAP consolidated EFO)***** 15.94 % 15.37 %
Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2022 Insight Direct USA, Inc. All Rights Reserved. 333 Reconciliation of GAAP to Non-GAAP Financial Measures* (continued) Three Months Ended March 31, Three Months Ended June 30, Three Months Ended September 30, US Dollars in $000s, except per share data 2022 2021 2022 2021 2022 2021 Adjusted Consolidated Earnings from Operations: GAAP consolidated EFO $ 79,849 $ 67,024 $ 129,556 $ 88,469 $ 90,279 $ 83,151 Amortization of intangible assets 7,925 8,041 7,904 8,068 8,986 7,988 Other 1,783 (6,740) 4,234 1,127 7,829 2,396 Adjusted non-GAAP consolidated EFO $ 89,557 $ 68,325 $ 141,694 $ 97,664 $ 107,094 $ 93,535 GAAP EFO as a percentage of net sales 3.0 % 3.1 % 4.7 % 4.0 % 3.6% 3.4% Adjusted non-GAAP EFO as a percentage of net sales 3.4 % 3.1 % 5.2 % 4.4 % 4.2% 3.8% Adjusted Consolidated Net Earnings: GAAP consolidated net earnings $ 56,631 $ 43,168 $ 89,184 $ 58,561 $ 57,316 $ 55,483 Amortization of intangible assets 7,925 8,041 7,904 8,068 8,986 7,988 Amortization of debt discount and issuance costs — 2,983 — 3,013 — 3,049 Other 1,783 (6,740) 4,234 1,127 7,829 2,396 Income taxes on non-GAAP adjustments (2,400) (919) (3,078) (3,042) (4,295) (3,172) Adjusted non-GAAP consolidated net earnings $ 63,939 $ 46,533 $ 98,244 $ 67,727 $ 69,836 $ 65,744 Adjusted Diluted Earnings Per Share: GAAP diluted EPS $ 1.53 $ 1.18 $ 2.42 $ 1.58 $ 1.58 $ 1.51 Amortization of intangible assets 0.21 0.22 0.21 0.21 0.25 0.22 Amortization of debt discount and issuance costs — 0.08 — 0.08 — 0.08 Other 0.05 (0.18) 0.11 0.03 0.22 0.07 Income taxes on non-GAAP adjustments (0.06) (0.03) (0.08) (0.08) (0.12) (0.09) Impact of benefit from note hedge 0.08 0.03 0.12 0.09 0.06 0.08 Adjusted non-GAAP diluted EPS $ 1.81 $ 1.30 $ 2.78 $ 1.91 $ 1.99 $ 1.87 Shares used in diluted EPS calculation 36,981 36,699 36,821 37,135 36,340 36,745 Impact of benefit from note hedge (1,677) (1,039) (1,539) (1,660) (1,187) (1,509) Shares used in Adjusted non-GAAP diluted EPS calculation 35,304 35,660 35,282 35,475 35,153 35,236 * The non-GAAP financial measures are referred to as “Adjusted”. Adjusted earnings from operations, Adjusted net earnings and Adjusted diluted earnings per share exclude (i) severance and restructuring expenses, (ii) certain executive recruitment and hiring-related expenses, (iii) amortization of intangible assets, (iv) transformation costs, (v) certain acquisition and integration-related expenses, (vi) debt discount amortization, and (vii) the tax effects of each of these items, as applicable
Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2022 Insight Direct USA, Inc. All Rights Reserved. 343 Reconciliation of GAAP to Non-GAAP Financial Measures* (continued) * The non-GAAP financial measures are referred to as “Adjusted”. Adjusted earnings from operations, Adjusted net earnings and Adjusted diluted earnings per share exclude (i) severance and restructuring expenses, (ii) certain executive recruitment and hiring-related expenses, (iii) amortization of intangible assets, (iv) transformation costs, (v) certain acquisition and integration-related expenses, (vi) debt discount amortization, and (vii) the tax effects of each of these items, as applicable US Dollars in $000s, except per share data 2017 2018 2019 2020 Adjusted Consolidated Earnings from Operations: GAAP consolidated EFO $ 179,265 $ 233,483 $ 240,594 $ 271,575 Amortization of intangible assets 16,812 15,737 22,985 37,535 Other 15,977 3,706 18,268 13,278 Adjusted non-GAAP consolidated EFO $ 212,054 $ 252,926 $ 281,847 $ 322,388 GAAP EFO as a percentage of net sales 2.7 % 3.3 % 3.1 % 3.3 % Adjusted non-GAAP EFO as a percentage of net sales 3.2 % 3.6 % 3.6 % 3.9 % Adjusted Consolidated Net Earnings: GAAP consolidated net earnings $ 90,683 $ 163,677 $ 159,407 $ 172,640 Amortization of intangible assets 16,812 15,737 22,985 37,535 Amortization of debt discount and issuance costs — — 4,223 11,585 Other 15,977 3,706 18,268 13,278 Income taxes on non-GAAP adjustments (8,946) (4,767) (10,073) (15,583) Tax expense related to U.S. federal tax reform 13,363 — — — Adjusted non-GAAP consolidated net earnings $ 127,889 $ 178,353 $ 194,810 $ 219,455 Adjusted Diluted Earnings Per Share: GAAP diluted EPS $ 2.50 $ 4.55 $ 4.43 $ 4.87 Amortization of intangible assets 0.47 0.43 0.64 1.06 Amortization of debt discount and issuance costs — — 0.12 0.33 Other 0.44 0.10 0.51 0.37 Income taxes on non-GAAP adjustments (0.25) (0.13) (0.28) (0.44) Tax expense related to U.S. federal tax reform 0.37 — — — Adjusted non-GAAP diluted EPS $ 3.53 $ 4.95 $ 5.42 $ 6.19 Shares used in diluted EPS calculation 36,207 36,009 35,959 35,444 Impact of benefit from note hedge — — — — Shares used in Adjusted non-GAAP diluted EPS calculation 36,207 36,009 35,959 35,444
Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2022 Insight Direct USA, Inc. All Rights Reserved. 353 Financial Results by Offering Category US Dollars in $000s FY 2020 Q1-21 Q2-21 Q3-21 Q4-21 FY 2021 Q1-22 Q2-22 Q3-22 Q4-22 FY 2022 Consolidated IEI by Offering Category Hardware $ 5,068,073 $ 1,315,025 $ 1,350,944 $ 1,592,495 $ 1,631,046 $ 5,889,510 $ 1,673,588 $ 1,731,116 $ 1,572,275 $ 1,473,916 $ 6,450,895 Software 2,104,082 577,995 538,234 531,744 582,644 2,230,617 636,699 618,126 596,922 645,145 2,496,892 Total Products 7,172,155 1,893,020 1,889,178 2,124,239 2,213,690 8,120,127 2,310,287 2,349,242 2,169,197 2,119,061 8,947,787 Agent Services 456,746 119,587 142,955 122,632 136,513 521,687 126,049 168,373 138,617 159,546 592,585 Insight Delivered Services 711,678 180,461 197,368 200,650 215,820 794,299 214,514 225,762 226,540 224,003 890,819 Total Services 1,168,424 300,048 340,323 323,282 352,333 1,315,986 340,563 394,135 365,157 383,549 1,483,404 Total Net Sales $ 8,340,579 $ 2,193,068 $ 2,229,501 $ 2,447,521 $ 2,566,023 $ 9,436,113 $ 2,650,850 $ 2,743,377 $ 2,534,354 $ 2,502,610 $ 10,431,191 Product Cost $ 6,497,001 $ 1,721,258 $ 1,715,729 $ 1,930,096 $ 2,013,825 $ 7,380,908 $ 2,107,209 $ 2,135,895 $ 1,956,679 $ 1,911,469 $ 8,111,252 Services Cost 543,636 140,336 147,089 152,880 167,343 607,648 164,780 169,593 178,417 170,582 683,372 Total Cost of Goods Sold $ 7,040,637 $ 1,861,594 $ 1,862,818 $ 2,082,976 $ 2,181,168 $ 7,988,556 $ 2,271,989 $ 2,305,488 $ 2,135,096 $ 2,082,051 $ 8,794,624 Product Gross Profit $ 675,154 $ 171,762 $ 173,449 $ 194,143 $ 199,865 $ 739,219 $ 203,078 $ 213,347 $ 212,518 $ 207,592 $ 836,535 Services Gross Profit 624,788 159,712 193,234 170,402 184,990 708,338 175,783 224,542 186,740 212,967 800,032 Total Gross Profit $ 1,299,942 $ 331,474 $ 366,683 $ 364,545 $ 384,855 $ 1,447,557 $ 378,861 $ 437,889 $ 399,258 $ 420,559 $ 1,636,567 % of Total Net Sales Hardware 61 % 60 % 61 % 65 % 64 % 62 % 63 % 63 % 62 % 59 % 62 % Software 25 % 26 % 24 % 22 % 23 % 24 % 24 % 23 % 24 % 26 % 24 % Total Products 86 % 86 % 85 % 87 % 86 % 86 % 87 % 86 % 86 % 85 % 86 % Agent Services 5 % 5 % 6 % 5 % 5 % 6 % 5 % 6 % 5 % 6 % 6 % Insight Delivered Services 9 % 8 % 9 % 8 % 8 % 8 % 8 % 8 % 9 % 9 % 9 % Total Services 14 % 14 % 15 % 13 % 14 % 14 % 13 % 14 % 14 % 15 % 14 % % of Total Services Net Sales Agent Services 39 % 40 % 42 % 38 % 39 % 40 % 37 % 43 % 38 % 42 % 40 % Insight Delivered Services 61 % 60 % 58 % 62 % 61 % 60 % 63 % 57 % 62 % 58 % 60 % Note: Numbers may not foot or cross foot due to immaterial rounding
Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2022 Insight Direct USA, Inc. All Rights Reserved. 363 Convertible Senior Notes • Insight Convertible Senior Notes - $350 million principal • Required to settle the convertible notes principal/par value in cash • Excess required to be settled in shares resulting in dilution in GAAP reported Diluted Earnings Per Share (“DEPS”). • DEPS incremental shares for GAAP reporting purposes are not issued at the time of reporting and are a non-GAAP exclusion for the Company (up to the strike price of the warrants of $103.12). • The bond hedge effectively raises the potential dilution point of the convertible notes and call spread from $68.32 up to $103.12, as illustrated below: NSIT stock price Relevance of stock price Net shares owed on Convertible Notes Net shares received from bond hedge Net shares owed on Warrants GAAP additional dilution Non-GAAP additional dilution $ 51.56 Price at issuance of Notes — — — — — $ 68.32 Conversion price of Notes — — — — — $ 88.82 Market trigger price 1,180,606 (1,180,606) — 1,180,606 — $ 103.12 Warrants strike price 1,727,056 (1,727,056) — 1,727,056 — $ 115.00 Possible future stock price 2,077,682 (2,077,682) 529,038 2,606,720 529,038 $ 120.00 Possible future stock price 2,204,493 (2,204,493) 720,377 2,924,870 720,377 Example calculation - net shares owed on Warrants Warrants issued [a] Excess ave. share price [b] Value of excess [c = a * b] Dilutive shares [d = c / $115] $115 average share price for quarter 5,121,160 $ 11.88 $ 60,839,381 529,038