CDW Corp Files 10-Q for Period Ending March 31, 2024

TL;DR

<b>CDW Corp filed its Q1 2024 10-Q report, detailing financial performance and corporate information.</b>

AI Summary

CDW Corp (CDW) filed a Quarterly Report (10-Q) with the SEC on May 1, 2024. CDW Corp filed its 10-Q report for the quarterly period ended March 31, 2024. The filing covers the period from January 1, 2024, to March 31, 2024. The company's principal executive offices are located at 200 N Milwaukee Avenue, Vernon Hills, IL 60061. CDW Corp was formerly known as VH Holdings, Inc., with a name change on June 5, 2007. The filing includes financial data for the periods ending March 31, 2024, December 31, 2023, and March 31, 2023.

Why It Matters

For investors and stakeholders tracking CDW Corp, this filing contains several important signals. This 10-Q filing provides investors with the latest quarterly financial statements and disclosures, crucial for understanding CDW Corp's current performance and outlook. The detailed financial information, including balance sheets and income statements for the period ending March 31, 2024, allows for analysis of revenue trends, profitability, and debt levels compared to prior periods.

Risk Assessment

Risk Level: medium — CDW Corp shows moderate risk based on this filing. The company's financial health and performance are subject to market conditions and competitive pressures within the technology solutions and services industry, as indicated by its SIC code 5961 (Retail - Catalog & Mail-Order Houses).

Analyst Insight

Review the detailed financial statements in the 10-Q to assess CDW Corp's revenue growth, profitability margins, and debt management strategies for Q1 2024.

Key Numbers

• 2024-03-31 — Reporting Period End Date (Quarterly period ended March 31, 2024)
• 2024-05-01 — Filing Date (Date the 10-Q was filed)
• 2024-01-01 — Quarter Start Date (Beginning of the reporting period)
• 2023-03-31 — Prior Year Period End Date (Comparison period for financial data)

Key Players & Entities

• CDW Corp (company) — Filer of the 10-Q report
• VH Holdings, Inc. (company) — Former name of CDW Corp
• 200 N Milwaukee Avenue, Vernon Hills, IL 60061 (company) — Business and mailing address

FAQ

Industry Context

CDW Corp operates within the technology solutions and services sector, providing a broad range of IT products and services to business, government, education, and healthcare customers.

Regulatory Implications

As a publicly traded company, CDW Corp is subject to the reporting requirements of the Securities and Exchange Commission (SEC), including the filing of quarterly (10-Q) and annual (10-K) reports.

What Investors Should Do

1. Analyze the consolidated balance sheets for March 31, 2024, and December 31, 2023, to understand changes in assets, liabilities, and equity.
2. Review the consolidated statements of operations for the three months ended March 31, 2024, and 2023, to identify revenue and profitability trends.
3. Examine the consolidated statements of cash flows for the three months ended March 31, 2024, and 2023, to assess the company's cash generation and usage.

Key Dates

• 2024-03-31: Quarterly Period End — End of the reporting period for the 10-Q
• 2024-05-01: Filing Date — Date the 10-Q was officially submitted to the SEC

Year-Over-Year Comparison

This filing represents the first quarterly report (10-Q) for CDW Corp in the fiscal year 2024, following the annual report (10-K) for the fiscal year ended December 31, 2023.

Key Financial Figures

• $0.01 — ich registered Common stock, par value $0.01 per share CDW Nasdaq Global Select Mark

Filing Documents

• cdw-20240331.htm (10-Q) — 1153KB
• cdw-2024331x10qxex101.htm (EX-10.1) — 52KB
• cdw-2024331x10qxex311.htm (EX-31.1) — 10KB
• cdw-2024331x10qxex312.htm (EX-31.2) — 10KB
• cdw-2024331x10qxex321.htm (EX-32.1) — 3KB
• cdw-2024331x10qxex322.htm (EX-32.2) — 3KB
• cdw-20240331_g1.jpg (GRAPHIC) — 673KB
• 0001402057-24-000088.txt (&nbsp;) — 6913KB
• cdw-20240331.xsd (EX-101.SCH) — 32KB
• cdw-20240331_cal.xml (EX-101.CAL) — 49KB
• cdw-20240331_def.xml (EX-101.DEF) — 93KB
• cdw-20240331_lab.xml (EX-101.LAB) — 401KB
• cdw-20240331_pre.xml (EX-101.PRE) — 254KB
• cdw-20240331_htm.xml (XML) — 935KB

FINANCIAL INFORMATION

PART I FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements: Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023 3 Consolidated Statements of Operations for the Three Months Ended March 31, 2024 and 2023 4 Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2024 and 2023 5 Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2024 and 2023 6 Consolidated Statements of Stockholders' Equity for the Three Months Ended March 31, 2024 and 2023 7

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 8

Management ' s Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management ' s Discussion and Analysis of Financial Condition and Results of Operations 17

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 27

Controls and Procedures

Item 4. Controls and Procedures 27

OTHER INFORMATION

PART II OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings 29

Risk Factors

Item 1A. Risk Factors 29

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 29

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities 29

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 29

Other Information

Item 5. Other Information 29

Exhibits

Item 6. Exhibits 30 SIGNATURES 31 Table of Contents

—FINANCIAL INFORMATION

PART I—FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements CDW CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (dollars and shares in millions, except per share amounts) March 31, 2024 December 31, 2023 Assets (unaudited) Current assets: Cash and cash equivalents $ 803.8 $ 588.7 Accounts receivable, net of allowance for credit losses of $ 30.2 and $ 28.8 , respectively 4,310.4 4,567.5 Merchandise inventory 670.8 668.1 Miscellaneous receivables 482.2 470.5 Prepaid expenses and other 366.6 410.2 Total current assets 6,633.8 6,705.0 Operating lease right-of-use assets 135.1 128.8 Property and equipment, net 190.2 195.5 Goodwill 4,409.8 4,413.4 Other intangible assets, net 1,331.2 1,369.7 Other assets 492.7 472.2 Total Assets $ 13,192.8 $ 13,284.6 Liabilities and Stockholders' Equity Current liabilities: Accounts payable-trade $ 2,741.1 $ 2,881.0 Accounts payable-inventory financing 384.8 430.9 Current maturities of long-term debt 604.7 613.1 Contract liabilities 469.5 487.4 Accrued expenses and other current liabilities: Compensation 250.7 303.0 Advertising 136.0 119.9 Sales and income taxes 110.1 52.4 Other 564.1 554.3 Total current liabilities 5,261.0 5,442.0 Long-term liabilities: Debt 5,027.6 5,031.8 Deferred income taxes 161.7 171.4 Operating lease liabilities 167.5 164.0 Other liabilities 436.3 432.9 Total long-term liabilities 5,793.1 5,800.1 Commitments and contingencies (Note 9) Stockholders' equity: Preferred stock, $ 0.01 par value, 100.0 shares authorized; no shares issued or outstanding for both periods — — Common stock, $ 0.01 par value, 1,000.0 shares authorized; 134.4 and 134.1 shares outstanding, respectively 1.3 1.3 Paid-in capital 3,745.0 3,691.3 Accumulated deficit ( 1,474.2 ) ( 1,525.5 ) Accumulated other comprehensive loss ( 133.4 ) ( 124.6 ) Total stockholders' equity 2,138.7 2,042.5 Total Liabilities and Stockholders' Equity $ 13,192.8 $ 13,284.6 The accompanying notes are an integral part of the Consolidated Fina

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (dollars in millions, except per share data, unless otherwise noted) 1. Description of Business and Summary of Significant Accounting Policies Description of Business CDW Corporation ("Parent"), a Fortune 500 company and member of the S&P 500 Index, is a leading multi-brand provider of information technology ("IT") solutions to small, medium and large business, government, education and healthcare customers in the United States ("US"), the United Kingdom ("UK") and Canada. The Company's broad array of offerings ranges from discrete hardware and software products to integrated IT solutions and services that include on-premise and cloud capabilities across hybrid infrastructure, digital experience and security. Throughout this report, the terms the "Company" and "CDW" refer to Parent and its 100% owned subsidiaries. Parent has two 100% owned subsidiaries, CDW LLC and CDW Finance Corporation. CDW LLC is an Illinois limited liability company that, together with its 100% owned subsidiaries, holds all material assets and conducts all business activities and operations of the Company. CDW Finance Corporation is a Delaware corporation formed for the sole purpose of acting as co-issuer of certain debt obligations and does not hold any material assets or engage in any business activities or operations. Basis of Presentation The accompanying unaudited interim Consolidated Financial Statements as of March 31, 2024 and for the three months ended March 31, 2024 and 2023 (the "Consolidated Financial Statements") have been prepared in conformity with accounting principles generally accepted in the United States of America ("US GAAP") and the rules and regulations of the US Securities and Exchange Commission (the "SEC") for interim financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with US GAAP have been condensed or omitted pursuant to the rules and r

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (dollars in millions, except per share data, unless otherwise noted) periods within fiscal years beginning after December 15, 2024. Entities are required to apply the amendments on a retrospective basis. The Company is currently evaluating the impact this ASU will have on its disclosures. 3. Accounts Receivable and Contract Balances Accounts Receivable The following table details the total accounts receivable recognized and the related classification on the Consolidated Balance Sheets: March 31, 2024 December 31, 2023 Accounts receivable, current (1) $ 4,310.4 $ 4,567.5 Accounts receivable, noncurrent (2) 405.1 337.5 Total accounts receivable $ 4,715.5 $ 4,905.0 (1) Accounts receivable, current are presented within Accounts receivable, net of allowance for credit losses on the Consolidated Balance Sheets. (2) Accounts receivable, noncurrent are presented within Other assets on the Consolidated Balance Sheets. From time to time, the Company transfers certain accounts receivable, without recourse, to third-party financial companies as a method to reduce the Company's credit exposure and accelerate cash collections. Such transfers are recognized as a sale and the related accounts receivable is derecognized from the Consolidated Balance Sheet upon receipt of payment from the third-party financing company. During the three months ended March 31, 2024 and 2023, the Company sold approximately $ 93 million and $ 124 million of accounts receivable, respectively. Contract Balances Contract assets and liabilities represent the difference in the timing of revenue recognition from receipt of cash from customers. Contract assets represent revenue recognized on performance obligations satisfied or partially satisfied for which the Company has no unconditional right to consideration. Contract liabilities consist of payments received from customers, or such consideration that is contractually due, in advance of providing

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (dollars in millions, except per share data, unless otherwise noted) from its designated suppliers. The Company does not incur any interest or other incremental expenses associated with these agreements as balances are paid when they are due. Additionally, the Company has no involvement in establishing the terms or conditions of the arrangements between its suppliers and the financial institutions. The amounts outstanding under these agreements as of March 31, 2024 and December 31, 2023 were $ 385 million and $ 431 million, respectively, and are separately presented as Accounts payable-inventory financing on the Consolidated Balance Sheets. The majority of such outstanding amounts relates to a floorplan sub-facility that is incorporated in the Company's Revolving Loan Facility, as defined within Note 6 (Debt). A portion of the Company's availability under the Revolving Loan Facility is reserved to cover the obligation to pay the financial institution. For additional information regarding the Revolving Loan Facility, see Note 6 (Debt). 5. Financial Instruments The Company does not hold or issue derivative financial instruments for trading or speculative purposes. The Company's indebtedness creates interest rate risk on its variable-rate debt. The Company may use derivative financial instruments to manage its exposure to interest rate risk. For additional information, see Note 6 (Debt). The Company has interest rate collar agreements that provide for a contractually specified interest rate cap and an interest rate floor based on a Secured Overnight Financing Rate ("SOFR"). The Company receives payment from the counterparty if SOFR is greater than the cap or pays the counterparty if SOFR is below the floor. If SOFR is between the floor and cap, no payment is due to either party. There were no new interest rate collar agreements executed during the three months ended March 31, 2024. As of March 31, 2024 and December 31

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (dollars in millions, except per share data, unless otherwise noted) 6. Debt March 31, 2024 December 31, 2023 Maturity Date Interest Rate Amount Amount Credit Facility Senior unsecured revolving loan facility December 2026 Variable $ — $ — Term Loan Senior unsecured term loan facility December 2026 Variable 634.5 634.5 Unsecured Senior Notes Senior notes due 2024 December 2024 5.500 % 575.0 575.0 Senior notes due 2025 May 2025 4.125 % 600.0 600.0 Senior notes due 2026 December 2026 2.670 % 1,000.0 1,000.0 Senior notes due 2028 April 2028 4.250 % 600.0 600.0 Senior notes due 2028 December 2028 3.276 % 500.0 500.0 Senior notes due 2029 February 2029 3.250 % 700.0 700.0 Senior notes due 2031 December 2031 3.569 % 1,000.0 1,000.0 Total unsecured senior notes 4,975.0 4,975.0 Receivable financing liability 43.3 56.9 Other long-term obligations 5.9 6.9 Unamortized deferred financing fees ( 26.4 ) ( 28.4 ) Current maturities of long-term debt ( 604.7 ) ( 613.1 ) Total long-term debt $ 5,027.6 $ 5,031.8 As of March 31, 2024, the Company is in compliance with the covenants under its credit agreements and indentures. Credit Facility The Company has a variable rate senior unsecured revolving loan facility (the "Revolving Loan Facility") from which it may draw tranches denominated in US dollars, British pounds or Euros. The interest rate is based on SOFR plus a spread adjustment and a margin based on the Company's senior unsecured rating. The Revolving Loan Facility is used by the Company for borrowings, issuances of letters of credit and floorplan financing. As of March 31, 2024, the Company could have borrowed up to an additional $ 1.3 billion under the Revolving Loan Facility. As of March 31, 2024, the Revolving Loan Facility had $ 348 million reserved for the floorplan sub-facility. Term Loan The senior unsecured term loan facility (the "Term Loan Facility") has a variable interest rate. The interes

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (dollars in millions, except per share data, unless otherwise noted) derecognition of the accounts receivable. The proceeds from these arrangements are recognized as a liability and the associated accounts receivable remains on the Consolidated Balance Sheet until the liability is settled. The Company did not execute any transfers under these agreements during the three months ended March 31, 2024. Fair Value The fair values of the unsecured senior notes were estimated using quoted market prices for identical liabilities that are traded in over-the-counter secondary markets. The fair value of the Term Loan Facility was estimated using dealer quotes and other market observable inputs for comparable liabilities. The unsecured senior notes and Term Loan Facility were classified as Level 2 within the fair value hierarchy. The carrying value of the Revolving Loan Facility approximates fair value. The approximate fair values and related carrying values of the Company's long-term debt, including current maturities and excluding unamortized discount and unamortized deferred financing costs, were as follows: March 31, 2024 December 31, 2023 Fair value $ 5,320.4 $ 5,348.2 Carrying value 5,658.7 5,673.3 7. Income Taxes Income tax expense was $ 61 million and $ 66 million for the three months ended March 31, 2024 and 2023, respectively. The effective tax rate, expressed by calculating the income tax expense as a percentage of Income before income taxes, was 21.9 % and 22.3 % for the three months ended March 31, 2024 and 2023, respectively. The effective tax rate for both the three months ended March 31, 2024 and March 31, 2023 differed from the US federal statutory rate of 21.0% primarily due to state and local income taxes, partially offset by excess tax benefits on equity-based compensation. 8. Earnings Per Share The numerator for both basic and diluted earnings per share is Net income. The denominator for basic earn

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