CDW 1Q Sales Get Lift From Berbee's Growth

CDW on Tuesday said first-quarter sales jumped 17 percent, thanks in large part to its acquisition of solution provider Berbee Information Networks.

For the quarter ended March 31, the Vernon Hills, Ill.-based direct marketer reported sales of $1.86 billion, compared with $1.59 billion a year earlier.

CDW also saw sharp profit growth in the quarter. The company posted earnings of $76.8 million, or 96 cents per diluted share, up nearly 25 percent from $61.7 million, or 75 cents per share, in the same period last year.

The results mark the first full quarter with revenue from the Berbee acquisition, which CDW closed in October. Berbee's revenue in the quarter was $142.7 million, a 69 percent gain from $84.3 million a year earlier. Excluding Berbee sales, CDW's first-quarter revenue was $1.72 billion, an 8 percent year-over-year increase.

CDW executives shed no new light on the future expansion of the company's "Berbee platform," its strategy to ramp up its services presence in local markets through the acquisition of regional solution providers.

"There is no timetable that would back us into a corner," CDW Chairman and CEO John Edwardson said in a conference call with financial analysts. "We will not have offices all 50 states. I don't think we'll need one, for example, in North Dakota. But we will serve customers in all 50 states."

CDW's corporate sector sales in the first quarter totaled $1.22 billion, a 6 percent increase, and public sector sales rose 13.4 percent to $497.4 million.

Edwardson noted that sales were strongest in the notebook, data storage, software, video and input device segments. Software sales climbed 16.3 percent, network/communications sales increased 14.8 percent, notebooks and accessories rose 13.3 percent, storage device sales gained 13.2 percent, and desktops and server revenue rose 13 percent.

During the first quarter, CDW repurchased 254,000 shares of common stock at an average price of $63.53 per share, for an aggregate purchase price of $16 million. Under the current share repurchase program approved in April 2006 for the repurchase of 5 million shares, 2.9 million shares remain available for purchase. Shares of CDW were trading at $71.16 Tuesday morning, up $3.56 per share, or 5 percent.