cdw-20240331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-35985

CDW CORPORATION

(Exact name of registrant as specified in its charter)


Delaware						26-0273989
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

200 N. Milwaukee Avenue
Vernon Hills, Illinois						60061
(Address of principal executive offices)						(Zip Code)

(847) 465-6000

(Registrant’s telephone number, including area code)

None

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $0.01 per share	CDW	Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

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.

☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

As of April 26, 2024, there were 134,397,680 shares of common stock, $0.01 par value, outstanding.

CDW CORPORATION AND SUBSIDIARIES

FORM 10-Q

TABLE OF CONTENTS


		Page
PART I	FINANCIAL INFORMATION
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	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27
Item 4.	Controls and Procedures	27
PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	29
Item 1A.	Risk Factors	29
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	29
Item 3.	Defaults Upon Senior Securities	29
Item 4.	Mine Safety Disclosures	29
Item 5.	Other Information	29
Item 6.	Exhibits	30
SIGNATURES		31

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PART I—FINANCIAL INFORMATION

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 Financial Statements.

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CDW CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (dollars and shares in millions, except per-share amounts) (unaudited)
	Three Months Ended March 31,
		2024		2023
Net sales		$	4,872.7	$	5,103.1
Cost of sales		3,809.4		4,013.7
Gross profit		1,063.3		1,089.4
Selling and administrative expenses		735.3		734.1
Operating income		328.0		355.3
Interest expense, net		(51.3)		(57.7)
Other expense, net		(0.1)		(1.3)
Income before income taxes		276.6		296.3
Income tax expense		(60.5)		(66.2)
Net income		$	216.1	$	230.1

Net income per common share:
Basic		$	1.61	$	1.70
Diluted		$	1.59	$	1.68

Weighted-average common shares outstanding:
Basic		134.4		135.6
Diluted		136.0		137.3

The accompanying notes are an integral part of the Consolidated Financial Statements.

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CDW CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (dollars in millions) (unaudited)
	Three Months Ended March 31,
		2024		2023
Net income		$	216.1	$	230.1
Other comprehensive income (loss), net of tax:
Unrealized gain from cash flow hedge