CDW Corp Form 8-K Summary
Business Context and Reporting Period
This Current Report on Form 8-K was filed by CDW Corporation on February 2, 2012. The filing discloses preliminary year-end financial results for the fiscal year ended December 31, 2011, and announces a proposed private offering of senior notes.
Key Financial Metrics
- Net Sales: Estimated to have increased approximately 9% in 2011 compared to 2010, achieving record levels.
- Adjusted EBITDA Margin: Estimated between 7.4% and 7.5% for 2011.
- Debt and Liquidity: As of December 31, 2011, long-term debt (GAAP) net of cash and cash equivalents was less than $4 billion. There were no borrowings under the senior secured revolving credit facility.
- Cash Flow Obligations: An estimated excess cash flow payment of $201.0 million is required under the senior secured term loan facility in 2012.
Material Changes and Debt Repayment
The company reports record net sales and Adjusted EBITDA for 2011. Regarding debt obligations, CDW intends to make an optional term loan prepayment of $120.0 million on or before February 3, 2012, to partially satisfy the $201.0 million excess cash flow payment. The remaining balance is due within 10 business days of the filing of the Annual Report on Form 10-K.
Guidance, Outlook, and Risks
- Capital Markets Activity: CDW intends to offer $130.0 million in aggregate principal amount of additional 8.5% senior notes due 2019 in a private offering exempt from registration.
- Unaudited Data: All fourth quarter and year-end results are preliminary, unaudited, and subject to finalization. They have not been reviewed by the independent registered public accounting firm.
- Non-GAAP Measures: Adjusted EBITDA is a non-GAAP measure; investors are directed to the Form 10-Q for reconciliation details.
Investor Verification Checklist
- Verify the finalized 2011 net sales and Adjusted EBITDA figures in the upcoming Form 10-K.
- Confirm the exact amount of the excess cash flow payment once the 2011 Form 10-K is filed.
- Review the final terms and closing status of the $130 million 8.5% senior notes offering.
- Check the reconciliation of net income to Adjusted EBITDA in the subsequent quarterly or annual reports.