Tech Data: making more with less 23 November, 2009 By Mark Cox

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"It's safe to say that Tech Data is having a good year in a tough environment," said Bob. Dutkowsky, chief executive officer, Tech Data Corporation. "Even amid a sales decline of 14 percent, we've driven an 18 percent increase in operating income. Our disciplined execution has driven results in a soft IT market." This culminated in a record for the quarter earnings of 84 cents per share.

Dutkowsky was also bullish in discussing the present quarter. The company's out look is that net sales for the fourth quarter ending January 31, 2010 are anticipated to increase in the low-to-mid single digit range year-over-year. Dutkowsky said that while progress is inconsistent across the IT industry as a whole, it is clear the IT outlook is positive for the first time in 4 quarters, which puts Tech Data and its solid operating metrics in a very enviable position as IT spending increases.

There is also clear evidence of momentum, Dutkowsky said. It happened towards the latter part of October, and October finished as a strong month in both North America and Europe. North America may be somewhat more stable here, Dutkosky suggested, as while IT spending part in the Americas has stabilized and seems to be picking up slightly, some regions in Europe he believes have not reached the bottom yet.

Dutkowsky also said there was good positive feedback about business from their recent meeting of premier resellers at their TechSelect event.

"It's more of a tone you get from a big group like that, but the mood of the mob there was that there is more opportunity in the market today than there was several quarters ago," he said.

Dutkowsky said that in the Americas, while their net sales declined 14.5 percent to $7.1 billion from $8.3 billion for the prior-year period, the decline was showing signs of moderation, and there was solid improvement in operating margins both year over year and sequentially. All product areas were down year over year, with no segment bucking the general trend. And the proportion of business done among their different customer groups -- with VARs doing half the total business -- was consistent with what it had been historically, with each group also awakening now at about the same rate.

"We are being selective about the business we take," Dutkowsky said. "The business that doesn't meet our operating metrics, we are prepared to let that business go."

Dutkowsky also suggested Tech Data's god cash position leaves it well placed to acquire other companies, on the heels of European acquisitions in this past year.

"We have a playbook on how to acquire companies and integrate them into our structure quickly," he said.