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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Tech Data Corporation | NASDAQ:TECD | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 144.90 | 144.85 | 145.00 | 0 | 01:00:00 |
|
|
|
☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
Title of each class
|
|
Trading symbol
|
|
Name of each exchange which registered
|
Common stock, par value $.0015 per share
|
|
TECD
|
|
NASDAQ
|
Large Accelerated Filer
|
☒
|
Accelerated Filer
|
☐
|
|
|
|
|
Non-accelerated Filer
|
☐
|
Smaller Reporting Company Filer
|
☐
|
|
|
|
|
|
|
Emerging Growth Company
|
☐
|
Class
|
Outstanding at May 28, 2020
|
Common stock, par value $.0015 per share
|
35,658,571
|
|
|
|
PAGE
|
PART I.
|
|
|
ITEM 1.
|
||
|
||
|
||
|
||
|
||
|
||
|
||
ITEM 2.
|
||
ITEM 3.
|
||
ITEM 4.
|
||
PART II.
|
||
ITEM 1.
|
||
ITEM 1A.
|
||
ITEM 2.
|
||
ITEM 3.
|
||
ITEM 4.
|
||
ITEM 5.
|
||
ITEM 6.
|
||
|
April 30, 2020
|
|
January 31, 2020
|
||||
ASSETS
|
(Unaudited)
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
828,941
|
|
|
$
|
841,366
|
|
Accounts receivable, less allowances of $80,400 and $79,440
|
5,367,227
|
|
|
6,192,203
|
|
||
Inventories
|
3,066,273
|
|
|
3,042,541
|
|
||
Prepaid expenses and other assets
|
388,790
|
|
|
362,182
|
|
||
Total current assets
|
9,651,231
|
|
|
10,438,292
|
|
||
Property and equipment, net
|
280,736
|
|
|
287,150
|
|
||
Goodwill
|
975,923
|
|
|
973,257
|
|
||
Intangible assets, net
|
1,052,033
|
|
|
1,094,676
|
|
||
Other assets, net
|
416,685
|
|
|
475,234
|
|
||
Total assets
|
$
|
12,376,608
|
|
|
$
|
13,268,609
|
|
|
|
|
|
||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
6,393,221
|
|
|
$
|
7,259,246
|
|
Accrued expenses and other liabilities
|
1,122,656
|
|
|
1,112,457
|
|
||
Revolving credit loans and current maturities of long-term debt, net
|
108,157
|
|
|
112,882
|
|
||
Total current liabilities
|
7,624,034
|
|
|
8,484,585
|
|
||
Long-term debt, less current maturities
|
1,337,541
|
|
|
1,338,136
|
|
||
Other long-term liabilities
|
308,542
|
|
|
326,433
|
|
||
Total liabilities
|
9,270,117
|
|
|
10,149,154
|
|
||
Commitments and contingencies (Note 10)
|
|
|
|
||||
Shareholders’ equity:
|
|
|
|
||||
Common stock, par value $.0015; 200,000,000 shares authorized; 59,245,585 shares issued at April 30, 2020 and January 31, 2020
|
89
|
|
|
89
|
|
||
Additional paid-in capital
|
838,882
|
|
|
855,020
|
|
||
Treasury stock, at cost (23,587,200 and 23,819,230 shares at April 30, 2020 and January 31, 2020)
|
(1,186,461
|
)
|
|
(1,198,132
|
)
|
||
Retained earnings
|
3,509,079
|
|
|
3,461,014
|
|
||
Accumulated other comprehensive (loss) income
|
(55,098
|
)
|
|
1,464
|
|
||
Total shareholders' equity
|
3,106,491
|
|
|
3,119,455
|
|
||
Total liabilities and shareholders' equity
|
$
|
12,376,608
|
|
|
$
|
13,268,609
|
|
|
Three months ended April 30,
|
||||||
|
2020
|
|
2019
|
||||
Net sales
|
$
|
8,175,174
|
|
|
$
|
8,406,424
|
|
Cost of products sold
|
7,643,515
|
|
|
7,897,045
|
|
||
Gross profit
|
531,659
|
|
|
509,379
|
|
||
Operating expenses:
|
|
|
|
||||
Selling, general and administrative expenses
|
427,863
|
|
|
405,534
|
|
||
Acquisition, integration and restructuring expenses
|
17,681
|
|
|
6,221
|
|
||
|
445,544
|
|
|
411,755
|
|
||
Operating income
|
86,115
|
|
|
97,624
|
|
||
Interest expense
|
17,034
|
|
|
26,257
|
|
||
Other expense (income), net
|
8,948
|
|
|
(693
|
)
|
||
Income before income taxes
|
60,133
|
|
|
72,060
|
|
||
Provision for income taxes
|
12,068
|
|
|
16,660
|
|
||
Net income
|
$
|
48,065
|
|
|
$
|
55,400
|
|
Earnings per share:
|
|
|
|
||||
Basic
|
$
|
1.35
|
|
|
$
|
1.50
|
|
Diluted
|
$
|
1.34
|
|
|
$
|
1.49
|
|
Weighted average common shares outstanding:
|
|
|
|
||||
Basic
|
35,688
|
|
|
37,011
|
|
||
Diluted
|
36,002
|
|
|
37,247
|
|
|
Three months ended April 30,
|
||||||
|
2020
|
|
2019
|
||||
Net income
|
$
|
48,065
|
|
|
$
|
55,400
|
|
Other comprehensive loss:
|
|
|
|
||||
Foreign currency translation adjustment, net of tax
|
(56,547
|
)
|
|
(40,523
|
)
|
||
Unrealized loss on cash flow hedges, net of tax
|
(15
|
)
|
|
(211
|
)
|
||
Other comprehensive loss
|
(56,562
|
)
|
|
(40,734
|
)
|
||
Total comprehensive (loss) income
|
$
|
(8,497
|
)
|
|
$
|
14,666
|
|
|
Common Stock
|
|
Additional
paid-in capital |
|
Treasury
stock |
|
Retained
earnings |
|
Accumulated other comprehensive income (loss)
|
|
Total
shareholders' equity |
|||||||||||||||
|
Shares
|
|
Amount
|
|
||||||||||||||||||||||
Balance at January 31, 2020
|
59,246
|
|
|
$
|
89
|
|
|
$
|
855,020
|
|
|
$
|
(1,198,132
|
)
|
|
$
|
3,461,014
|
|
|
$
|
1,464
|
|
|
$
|
3,119,455
|
|
Issuance of treasury stock for benefit plan and equity-based awards exercised
|
—
|
|
|
—
|
|
|
(22,445
|
)
|
|
11,671
|
|
|
—
|
|
|
—
|
|
|
(10,774
|
)
|
||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
6,307
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,307
|
|
||||||
Total other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(56,562
|
)
|
|
(56,562
|
)
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
48,065
|
|
|
—
|
|
|
48,065
|
|
||||||
Balance at April 30, 2020
|
59,246
|
|
|
$
|
89
|
|
|
$
|
838,882
|
|
|
$
|
(1,186,461
|
)
|
|
$
|
3,509,079
|
|
|
$
|
(55,098
|
)
|
|
$
|
3,106,491
|
|
|
Common Stock
|
|
Additional
paid-in capital |
|
Treasury
stock |
|
Retained
earnings |
|
Accumulated other comprehensive income (loss)
|
|
Total
shareholders' equity |
|||||||||||||||
|
Shares
|
|
Amount
|
|
||||||||||||||||||||||
Balance at January 31, 2019
|
59,246
|
|
|
$
|
89
|
|
|
$
|
844,206
|
|
|
$
|
(1,037,872
|
)
|
|
$
|
3,086,514
|
|
|
$
|
43,786
|
|
|
$
|
2,936,723
|
|
Repurchases of common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
(35,681
|
)
|
|
—
|
|
|
—
|
|
|
(35,681
|
)
|
||||||
Issuance of treasury stock for benefit plan and equity-based awards exercised
|
—
|
|
|
—
|
|
|
(16,003
|
)
|
|
7,896
|
|
|
—
|
|
|
—
|
|
|
(8,107
|
)
|
||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
8,305
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,305
|
|
||||||
Total other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(40,734
|
)
|
|
(40,734
|
)
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
55,400
|
|
|
—
|
|
|
55,400
|
|
||||||
Balance at April 30, 2019
|
59,246
|
|
|
$
|
89
|
|
|
$
|
836,508
|
|
|
$
|
(1,065,657
|
)
|
|
$
|
3,141,914
|
|
|
$
|
3,052
|
|
|
$
|
2,915,906
|
|
|
Three months ended April 30,
|
||||||
|
2020
|
|
2019
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Cash received from customers
|
$
|
11,386,818
|
|
|
$
|
11,913,347
|
|
Cash paid to vendors and employees
|
(11,356,142
|
)
|
|
(11,800,318
|
)
|
||
Interest paid, net
|
(30,207
|
)
|
|
(35,101
|
)
|
||
Income taxes paid
|
(8,198
|
)
|
|
(14,739
|
)
|
||
Net cash (used in) provided by operating activities
|
(7,729
|
)
|
|
63,189
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Expenditures for property and equipment
|
(5,596
|
)
|
|
(7,745
|
)
|
||
Software and software development costs
|
(13,944
|
)
|
|
(7,534
|
)
|
||
Proceeds from settlement of net investment hedges
|
44,377
|
|
|
—
|
|
||
Other
|
(764
|
)
|
|
(548
|
)
|
||
Net cash provided by (used in) investing activities
|
24,073
|
|
|
(15,827
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Principal borrowings (payments) on long-term debt
|
4,515
|
|
|
(5,224
|
)
|
||
Cash paid for debt issuance costs
|
—
|
|
|
(1,028
|
)
|
||
Net (repayments) borrowings on revolving credit loans
|
(472
|
)
|
|
14,227
|
|
||
Payments for employee tax withholdings on equity awards
|
(10,774
|
)
|
|
(8,602
|
)
|
||
Proceeds from the reissuance of treasury stock
|
—
|
|
|
495
|
|
||
Repurchases of common stock
|
—
|
|
|
(35,681
|
)
|
||
Other
|
(563
|
)
|
|
—
|
|
||
Net cash used in financing activities
|
(7,294
|
)
|
|
(35,813
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(21,475
|
)
|
|
(13,172
|
)
|
||
Net decrease in cash and cash equivalents
|
(12,425
|
)
|
|
(1,623
|
)
|
||
Cash and cash equivalents at beginning of year
|
841,366
|
|
|
799,123
|
|
||
Cash and cash equivalents at end of period
|
$
|
828,941
|
|
|
$
|
797,500
|
|
Reconciliation of net income to net cash (used in) provided by operating activities:
|
|
|
|
||||
Net income
|
$
|
48,065
|
|
|
$
|
55,400
|
|
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
41,991
|
|
|
37,257
|
|
||
Provision for losses on accounts receivable
|
10,832
|
|
|
1,765
|
|
||
Stock-based compensation expense
|
6,307
|
|
|
8,305
|
|
||
Accretion of debt discount and debt issuance costs
|
847
|
|
|
860
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
690,145
|
|
|
751,836
|
|
||
Inventories
|
(60,180
|
)
|
|
2,450
|
|
||
Prepaid expenses and other assets
|
(37,739
|
)
|
|
1,763
|
|
||
Accounts payable
|
(752,022
|
)
|
|
(706,381
|
)
|
||
Accrued expenses and other liabilities
|
44,025
|
|
|
(90,066
|
)
|
||
Total adjustments
|
(55,794
|
)
|
|
7,789
|
|
||
Net cash (used in) provided by operating activities
|
$
|
(7,729
|
)
|
|
$
|
63,189
|
|
|
Three months ended April 30,
|
||
|
2020
|
|
2019
|
Apple, Inc.
|
14%
|
|
13%
|
Cisco Systems, Inc.
|
12%
|
|
11%
|
HP Inc.
|
11%
|
|
10%
|
|
Three months ended April 30,
|
||||||
|
2020
|
|
2019
|
||||
(in thousands, except per share data)
|
|
|
|
||||
Net income
|
$
|
48,065
|
|
|
$
|
55,400
|
|
|
|
|
|
||||
Weighted average common shares - basic
|
35,688
|
|
|
37,011
|
|
||
Effect of dilutive securities:
|
|
|
|
||||
Equity based awards
|
314
|
|
|
236
|
|
||
Weighted average common shares - diluted
|
36,002
|
|
|
37,247
|
|
||
|
|
|
|
||||
Earnings per share:
|
|
|
|
||||
Basic
|
$
|
1.35
|
|
|
$
|
1.50
|
|
Diluted
|
$
|
1.34
|
|
|
$
|
1.49
|
|
|
Three months ended April 30,
|
|
Cumulative Amounts Incurred to Date
|
||||||||
|
2020
|
|
2019
|
|
|||||||
(in thousands)
|
|
|
|
|
|
||||||
Severance costs
|
$
|
1,379
|
|
|
$
|
4,147
|
|
|
$
|
39,773
|
|
Professional services and other costs
|
290
|
|
|
2,074
|
|
|
21,808
|
|
|||
Total
|
$
|
1,669
|
|
|
$
|
6,221
|
|
|
$
|
61,581
|
|
|
|
Three months ended April 30, 2020
|
||||||||||
|
|
Severance
|
|
Professional services and other costs
|
|
Total
|
||||||
(in thousands)
|
|
|
|
|
|
|
||||||
Balance at January 31, 2020
|
|
$
|
8,718
|
|
|
$
|
17
|
|
|
$
|
8,735
|
|
Fiscal 2021 restructuring expenses
|
|
1,379
|
|
|
290
|
|
|
1,669
|
|
|||
Cash payments
|
|
(4,187
|
)
|
|
(302
|
)
|
|
(4,489
|
)
|
|||
Foreign currency translation
|
|
(165
|
)
|
|
(1
|
)
|
|
(166
|
)
|
|||
Balance at April 30, 2020
|
|
$
|
5,745
|
|
|
$
|
4
|
|
|
$
|
5,749
|
|
As of:
|
April 30, 2020
|
|
January 31, 2020
|
||||
Senior Notes, interest at 3.70% payable semi-annually, due February 15, 2022
|
$
|
500,000
|
|
|
$
|
500,000
|
|
Senior Notes, interest at 4.95% payable semi-annually, due February 15, 2027
|
500,000
|
|
|
500,000
|
|
||
Term Loan, interest rate of 1.45% and 2.70% at April 30, 2020 and January 31, 2020, respectively
|
300,000
|
|
|
300,000
|
|
||
Other committed and uncommitted revolving credit facilities, average interest rate of 6.17% and 6.79% at April 30, 2020 and January 31, 2020, respectively
|
104,563
|
|
|
108,449
|
|
||
Other long-term debt
|
46,681
|
|
|
48,547
|
|
||
Less—unamortized debt discount and debt issuance costs
|
(5,546
|
)
|
|
(5,978
|
)
|
||
|
1,445,698
|
|
|
1,451,018
|
|
||
Less—current maturities (included as “revolving credit loans and current maturities of long-term debt, net”)
|
(108,157
|
)
|
|
(112,882
|
)
|
||
Total long-term debt
|
$
|
1,337,541
|
|
|
$
|
1,338,136
|
|
|
Shares
|
|
Nonvested at January 31, 2020
|
574,980
|
|
Vested
|
(231,256
|
)
|
Canceled
|
(2,409
|
)
|
Nonvested at April 30, 2020
|
341,315
|
|
|
Shares
|
|
Nonvested at January 31, 2020
|
363,563
|
|
Vested
|
(87,985
|
)
|
Canceled
|
(34,305
|
)
|
Nonvested at April 30, 2020
|
241,273
|
|
|
|
|
|
April 30, 2020
|
|
January 31, 2020
|
||||||||||||
|
|
|
|
Fair value measurement category
|
|
Fair value measurement category
|
||||||||||||
|
|
Balance sheet location
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net investment hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign currency forward contracts
|
|
Prepaid expenses and other assets
|
|
|
|
$
|
—
|
|
|
|
|
|
|
$
|
812
|
|
|
|
Foreign currency forward contracts
|
|
Other assets, net
|
|
|
|
—
|
|
|
|
|
|
|
24,933
|
|
|
|
||
Cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cross-currency swap
|
|
Prepaid expenses and other assets
|
|
|
|
—
|
|
|
|
|
|
|
124
|
|
|
|
||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign currency forward contracts
|
|
Prepaid expenses and other assets
|
|
|
|
3,113
|
|
|
|
|
|
|
3,675
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cross-currency swap
|
|
Accrued expenses and other liabilities
|
|
|
|
$
|
—
|
|
|
|
|
|
|
$
|
492
|
|
|
|
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign currency forward contracts
|
|
Accrued expenses and other liabilities
|
|
|
|
4,480
|
|
|
|
|
|
|
5,916
|
|
|
|
|
|
|
|
|
Three months ended April 30, 2020
|
|
|
||||||||||
Derivatives designated as net investment hedges:
|
|
Amount of gain (loss) recognized in other comprehensive income (loss)
|
|
Amount of gain (loss) reclassified from AOCI into income
|
|
Amount of gain (loss) recognized in income (amount excluded from effectiveness testing)
|
|
Location of gain (loss) recognized in income (amount excluded from effectiveness testing)
|
||||||
(in thousands)
|
|
|
|
|
|
|
|
|
||||||
Foreign currency forward contracts
|
|
$
|
24,934
|
|
|
$
|
—
|
|
|
$
|
3,316
|
|
|
Interest expense
|
|
|
Three months ended April 30, 2019
|
|
|
||||||||||
Derivatives designated as net investment hedges:
|
|
Amount of gain (loss) recognized in other comprehensive income (loss)
|
|
Amount of gain (loss) reclassified from AOCI into income
|
|
Amount of gain (loss) recognized in income (amount excluded from effectiveness testing)
|
|
Location of gain (loss) recognized in income (amount excluded from effectiveness testing)
|
||||||
(in thousands)
|
|
|
|
|
|
|
|
|
||||||
Foreign currency forward contracts
|
|
$
|
2,496
|
|
|
$
|
—
|
|
|
$
|
316
|
|
|
Interest expense
|
|
|
Three months ended April 30, 2020
|
|
|
||||||
Derivatives designated as cash flow hedges:
|
|
Amount of gain (loss) recognized in other comprehensive income (loss)
|
|
Amount of gain (loss) reclassified from AOCI into income
|
|
Location of gain (loss) reclassified from AOCI into income
|
||||
(in thousands)
|
|
|
|
|
|
|
||||
Cross-currency swap
|
|
$
|
402
|
|
|
$
|
(90
|
)
|
|
Interest expense
|
|
|
|
|
507
|
|
|
Other expense (income), net
|
|||
Total
|
|
$
|
402
|
|
|
$
|
417
|
|
|
|
|
|
Three months ended April 30, 2019
|
|
|
||||||
Derivatives designated as cash flow hedges:
|
|
Amount of gain (loss) recognized in other comprehensive income (loss)
|
|
Amount of gain (loss) reclassified from AOCI into income
|
|
Location of gain (loss) reclassified from AOCI into income
|
||||
(in thousands)
|
|
|
|
|
|
|
||||
Cross-currency swap
|
|
$
|
(575
|
)
|
|
$
|
120
|
|
|
Interest expense
|
|
|
|
|
(484
|
)
|
|
Other expense (income), net
|
|||
Total
|
|
$
|
(575
|
)
|
|
$
|
(364
|
)
|
|
|
|
Shares
|
|
Weighted-average
price per share |
|||
Treasury stock balance at January 31, 2020
|
23,819,230
|
|
|
$
|
50.30
|
|
Shares of treasury stock reissued for equity incentive plans
|
(232,030
|
)
|
|
|
||
Treasury stock balance at April 30, 2020
|
23,587,200
|
|
|
$
|
50.30
|
|
|
|
Foreign currency translation adjustment, net of taxes
|
|
Unrealized gains (losses) on cash flow hedges, net of taxes
|
|
Total
|
||||||
(in thousands)
|
|
|
|
|
|
|
||||||
Balance at January 31, 2020
|
|
$
|
1,449
|
|
|
$
|
15
|
|
|
$
|
1,464
|
|
Other comprehensive income (loss) before reclassification
|
|
(56,547
|
)
|
|
402
|
|
|
(56,145
|
)
|
|||
Reclassification of (gain) loss from AOCI into income
|
|
—
|
|
|
(417
|
)
|
|
(417
|
)
|
|||
Balance at April 30, 2020
|
|
$
|
(55,098
|
)
|
|
$
|
—
|
|
|
$
|
(55,098
|
)
|
|
|
Foreign currency translation adjustment, net of taxes
|
|
Unrealized gains (losses) on cash flow hedges, net of taxes
|
|
Total
|
||||||
(in thousands)
|
|
|
|
|
|
|
||||||
Balance at January 31, 2019
|
|
$
|
43,786
|
|
|
$
|
—
|
|
|
$
|
43,786
|
|
Other comprehensive income (loss) before reclassification
|
|
(40,523
|
)
|
|
(575
|
)
|
|
(41,098
|
)
|
|||
Reclassification of (gain) loss from AOCI into income
|
|
—
|
|
|
364
|
|
|
364
|
|
|||
Balance at April 30, 2019
|
|
$
|
3,263
|
|
|
$
|
(211
|
)
|
|
$
|
3,052
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended April 30,
|
||||||
|
2020
|
|
2019
|
||||
Net sales:
|
|
|
|
||||
Americas (1)
|
$
|
3,944,760
|
|
|
$
|
3,789,198
|
|
Europe
|
3,971,130
|
|
|
4,309,500
|
|
||
Asia-Pacific
|
259,284
|
|
|
307,726
|
|
||
Total
|
$
|
8,175,174
|
|
|
$
|
8,406,424
|
|
|
|
|
|
||||
Operating income (loss):
|
|
|
|
||||
Americas (2)
|
$
|
49,783
|
|
|
$
|
68,633
|
|
Europe
|
45,884
|
|
|
36,420
|
|
||
Asia-Pacific
|
(3,245
|
)
|
|
876
|
|
||
Stock-based compensation expense
|
(6,307
|
)
|
|
(8,305
|
)
|
||
Total
|
$
|
86,115
|
|
|
$
|
97,624
|
|
|
|
|
|
||||
Depreciation and amortization:
|
|
|
|
||||
Americas
|
$
|
28,213
|
|
|
$
|
23,649
|
|
Europe
|
11,992
|
|
|
11,510
|
|
||
Asia-Pacific
|
1,786
|
|
|
2,098
|
|
||
Total
|
$
|
41,991
|
|
|
$
|
37,257
|
|
|
|
|
|
||||
Capital expenditures:
|
|
|
|
||||
Americas
|
$
|
9,385
|
|
|
$
|
8,272
|
|
Europe
|
8,880
|
|
|
6,127
|
|
||
Asia-Pacific
|
1,275
|
|
|
880
|
|
||
Total
|
$
|
19,540
|
|
|
$
|
15,279
|
|
As of:
|
April 30, 2020
|
|
January 31, 2020
|
||||
Identifiable assets:
|
|
|
|
||||
Americas
|
$
|
5,494,992
|
|
|
$
|
6,147,771
|
|
Europe
|
6,391,331
|
|
|
6,518,761
|
|
||
Asia-Pacific
|
490,285
|
|
|
602,077
|
|
||
Total
|
$
|
12,376,608
|
|
|
$
|
13,268,609
|
|
|
|
|
|
||||
Long-lived assets:
|
|
|
|
||||
Americas (1)
|
$
|
226,234
|
|
|
$
|
231,401
|
|
Europe
|
50,124
|
|
|
51,331
|
|
||
Asia-Pacific
|
4,378
|
|
|
4,418
|
|
||
Total
|
$
|
280,736
|
|
|
$
|
287,150
|
|
|
|
|
|
||||
Goodwill & acquisition-related intangible assets, net:
|
|
|
|
||||
Americas
|
$
|
1,321,621
|
|
|
$
|
1,339,375
|
|
Europe
|
517,584
|
|
|
541,102
|
|
||
Asia-Pacific
|
51,159
|
|
|
54,090
|
|
||
Total
|
$
|
1,890,364
|
|
|
$
|
1,934,567
|
|
(1)
|
Net sales in the United States represented 89% and 88%, respectively, of the total Americas' net sales for the three months ended April 30, 2020 and 2019. Total long-lived assets in the United States represented 97% and 96%, respectively, of the Americas' total long-lived assets at April 30, 2020 and January 31, 2020.
|
(2)
|
Operating income in the Americas for the three months ended April 30, 2020 and 2019 includes acquisition, integration and restructuring expenses of $17.0 million and $2.9 million, respectively (see further discussion in Note 4 – Acquisition, Integration and Restructuring Expenses).
|
FORWARD-LOOKING STATEMENTS
|
|
OVERVIEW
|
|
•
|
Growing faster than the industry in select markets by gaining profitable market share in key geographies within select product categories with leading vendors.
|
•
|
Improving operating income by growing gross profit faster than operating costs.
|
•
|
Delivering a return on invested capital above our weighted average cost of capital.
|
•
|
Invest in next-generation technologies and delivery models such as the cloud, security, analytics/IoT, and services.
|
•
|
Strengthen our end-to-end portfolio of products, services and solutions.
|
•
|
Transform our company digitally through greater automation, which we believe will enhance the customer experience, improve productivity and reduce costs.
|
•
|
Optimize our global footprint by enhancing the operational efficiency and effectiveness of our businesses around the world. We are focused on enhancing the long-term profitability of our business and delivering a better return on invested capital through targeted actions to remove business with lower returns, which we refer to as portfolio optimization. Portfolio optimization actions allow working capital to be re-deployed in our strategic focus areas, however, those actions may have a short-term impact on revenues and gross profit.
|
NON-GAAP FINANCIAL INFORMATION
|
|
•
|
Net sales, as adjusted, which is defined as net sales adjusted for the impact of changes in foreign currencies;
|
•
|
Gross profit, as adjusted, which is defined as gross profit as adjusted for the impact of changes in foreign currencies;
|
•
|
Selling, general and administrative expenses (“SG&A”), as adjusted, which is defined as SG&A as adjusted for the impact of changes in foreign currencies;
|
•
|
Non-GAAP operating income, which is defined as operating income as adjusted to exclude acquisition, integration and restructuring expenses, legal settlements and other, net, acquisition-related intangible assets amortization expense and tax indemnifications;
|
•
|
Non-GAAP net income, which is defined as net income as adjusted to exclude acquisition, integration and restructuring expenses, legal settlements and other, net, acquisition-related intangible assets amortization expense, tax indemnifications and the income tax effects of these adjustments;
|
•
|
Non-GAAP earnings per share-diluted, which is defined as earnings per share-diluted as adjusted to exclude the per share impact of acquisition, integration and restructuring expenses, legal settlements and other, net, acquisition-related intangible assets amortization expense, tax indemnifications and the income tax effects of these adjustments.
|
RESULTS OF OPERATIONS
|
|
|
Three months ended April 30,
|
|||||
|
2020
|
|
2019
|
|||
Net sales
|
100.00
|
%
|
|
100.00
|
|
%
|
Cost of products sold
|
93.50
|
|
|
93.94
|
|
|
Gross profit
|
6.50
|
|
|
6.06
|
|
|
Operating expenses:
|
|
|
|
|
|
|
Selling, general and administrative expenses
|
5.23
|
|
|
4.82
|
|
|
Acquisition, integration and restructuring expenses
|
0.22
|
|
|
0.08
|
|
|
|
5.45
|
|
|
4.90
|
|
|
Operating income
|
1.05
|
|
|
1.16
|
|
|
Interest expense
|
0.21
|
|
|
0.31
|
|
|
Other expense (income), net
|
0.10
|
|
|
(0.01
|
)
|
|
Income before income taxes
|
0.74
|
|
|
0.86
|
|
|
Provision for income taxes
|
0.15
|
|
|
0.20
|
|
|
Net income
|
0.59
|
%
|
|
0.66
|
|
%
|
NET SALES
|
|
|
Three months ended April 30,
|
|
Change
|
|||||||||||
|
2020
|
|
2019
|
|
$
|
|
%
|
|||||||
(in millions)
|
|
|
|
|
|
|
|
|||||||
Consolidated net sales, as reported
|
$
|
8,175
|
|
|
$
|
8,406
|
|
|
$
|
(231
|
)
|
|
(2.7
|
)%
|
Impact of changes in foreign currencies
|
175
|
|
|
—
|
|
|
175
|
|
|
|
||||
Consolidated net sales, as adjusted
|
$
|
8,350
|
|
|
$
|
8,406
|
|
|
$
|
(56
|
)
|
|
(0.7
|
)%
|
|
|
|
|
|
|
|
|
|||||||
Americas net sales, as reported
|
$
|
3,945
|
|
|
$
|
3,789
|
|
|
$
|
156
|
|
|
4.1
|
%
|
Impact of changes in foreign currencies
|
25
|
|
|
—
|
|
|
25
|
|
|
|
||||
Americas net sales, as adjusted
|
$
|
3,970
|
|
|
$
|
3,789
|
|
|
$
|
181
|
|
|
4.8
|
%
|
|
|
|
|
|
|
|
|
|||||||
Europe net sales, as reported
|
$
|
3,971
|
|
|
$
|
4,309
|
|
|
$
|
(338
|
)
|
|
(7.8
|
)%
|
Impact of changes in foreign currencies
|
138
|
|
|
—
|
|
|
138
|
|
|
|
||||
Europe net sales, as adjusted
|
$
|
4,109
|
|
|
$
|
4,309
|
|
|
$
|
(200
|
)
|
|
(4.6
|
)%
|
|
|
|
|
|
|
|
|
|||||||
Asia-Pacific net sales, as reported
|
$
|
259
|
|
|
$
|
308
|
|
|
$
|
(49
|
)
|
|
(15.9
|
)%
|
Impact of changes in foreign currencies
|
12
|
|
|
—
|
|
|
12
|
|
|
|
||||
Asia-Pacific net sales, as adjusted
|
$
|
271
|
|
|
$
|
308
|
|
|
$
|
(37
|
)
|
|
(12.0
|
)%
|
•
|
The increase in Americas net sales, as adjusted, of $181 million is primarily due to growth in personal computer systems, including increased customer demand related to remote workforce enablement as a result of COVID-19. Net sales also increased due to the acquisition of DLT in November 2019. The increase in net sales was partially offset by a decrease in data center products, including impacts due to COVID-19, coupled with portfolio optimization actions which reduced total Americas net sales by approximately 2 percent.
|
•
|
The decrease in Europe net sales, as adjusted, of $200 million is primarily due to portfolio optimization actions which reduced total Europe net sales by approximately 3 percent, a decline in mobility products, as well as a decrease in data center products including impacts due to COVID-19. The decrease in net sales was partially offset by growth in personal computer systems, including increased customer demand related to remote workforce enablement as a result of COVID-19. The impact of changes in foreign currencies is primarily due to the weakening of the euro against the U.S. dollar.
|
•
|
The decrease in Asia-Pacific net sales, as adjusted, of $37 million is primarily due to a decrease in data center products, including portfolio optimization actions which reduced total Asia-Pacific net sales by approximately 12 percent and impacts due to COVID-19.
|
|
|
|
|
|
|
|
|
|
Three months ended April 30,
|
||
|
2020
|
|
2019
|
Apple, Inc.
|
14%
|
|
13%
|
Cisco Systems, Inc.
|
12%
|
|
11%
|
HP Inc.
|
11%
|
|
10%
|
GROSS PROFIT
|
|
|
|
|
|
|
|
Three months ended April 30,
|
|
Change
|
|||||||||||
|
2020
|
|
2019
|
|
$
|
|
%
|
|||||||
(in millions)
|
|
|
|
|
|
|
|
|||||||
Gross profit, as reported
|
$
|
531.7
|
|
|
$
|
509.4
|
|
|
$
|
22.3
|
|
|
4.4
|
%
|
Impact of changes in foreign currencies
|
11.6
|
|
|
—
|
|
|
11.6
|
|
|
|
||||
Gross profit, as adjusted
|
$
|
543.3
|
|
|
$
|
509.4
|
|
|
$
|
33.9
|
|
|
6.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES
|
|
|
Three months ended April 30,
|
|
Change
|
|||||||||||
|
2020
|
|
2019
|
|
$
|
|
%
|
|||||||
(in millions)
|
|
|
|
|
|
|
|
|||||||
SG&A, as reported
|
$
|
427.9
|
|
|
$
|
405.5
|
|
|
$
|
22.4
|
|
|
5.5
|
%
|
Impact of changes in foreign currencies
|
9.8
|
|
|
—
|
|
|
9.8
|
|
|
|
||||
SG&A, as adjusted
|
$
|
437.7
|
|
|
$
|
405.5
|
|
|
$
|
32.2
|
|
|
7.9
|
%
|
|
|
|
|
|
|
|
|
|||||||
SG&A as a percentage of net sales, as reported
|
5.23
|
%
|
|
4.82
|
%
|
|
|
|
41 bps
|
|
|
|
|
|
|
|
|
|
|
Three months ended April 30,
|
|
Cumulative Amounts Incurred to Date
|
||||||||
|
2020
|
|
2019
|
|
|||||||
(in millions)
|
|
|
|
|
|
||||||
Severance costs
|
$
|
1.4
|
|
|
$
|
4.1
|
|
|
$
|
39.8
|
|
Professional services and other costs
|
0.3
|
|
|
2.1
|
|
|
21.8
|
|
|||
Total
|
$
|
1.7
|
|
|
$
|
6.2
|
|
|
$
|
61.6
|
|
OPERATING INCOME
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended April 30,
|
||||||
|
2020
|
|
2019
|
||||
(in millions)
|
|
|
|
||||
Operating income
|
$
|
86.1
|
|
|
$
|
97.6
|
|
Acquisition, integration and restructuring expenses
|
17.7
|
|
|
6.2
|
|
||
Legal settlements and other, net
|
—
|
|
|
(0.3
|
)
|
||
Acquisition-related intangible assets amortization expense
|
24.5
|
|
|
21.0
|
|
||
Tax indemnifications
|
0.6
|
|
|
0.3
|
|
||
Non-GAAP operating income
|
$
|
128.9
|
|
|
$
|
124.8
|
|
•
|
The decrease in GAAP operating income of $11.5 million is primarily due to an increase in acquisition, integration and restructuring expenses, payroll costs and credit costs, partially offset by lower inventory losses.
|
•
|
The increase in non-GAAP operating income of $4.1 million is primarily due to lower inventory losses, partially offset by an increase in payroll costs and credit costs.
|
AMERICAS
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended April 30,
|
||||||
|
2020
|
|
2019
|
||||
(in millions)
|
|
|
|
||||
Operating income - Americas
|
$
|
49.8
|
|
|
$
|
68.6
|
|
Acquisition, integration and restructuring expenses
|
17.0
|
|
|
2.9
|
|
||
Legal settlements and other, net
|
—
|
|
|
(0.3
|
)
|
||
Acquisition-related intangible assets amortization expense
|
16.9
|
|
|
13.5
|
|
||
Non-GAAP operating income - Americas
|
$
|
83.7
|
|
|
$
|
84.7
|
|
•
|
The decrease in GAAP operating income of $18.8 million is primarily due to an increase in acquisition, integration and restructuring expenses, payroll costs and credit costs, partially offset by lower inventory losses.
|
•
|
The decrease in non-GAAP operating income of $1.0 million is primarily due to an increase in payroll costs and credit costs, partially offset by lower inventory losses.
|
EUROPE
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended April 30,
|
||||||
|
2020
|
|
2019
|
||||
(in millions)
|
|
|
|
||||
Operating income - Europe
|
$
|
45.9
|
|
|
$
|
36.4
|
|
Acquisition, integration and restructuring expenses
|
(0.2
|
)
|
|
3.0
|
|
||
Acquisition-related intangible assets amortization expense
|
6.3
|
|
|
6.2
|
|
||
Non-GAAP operating income - Europe
|
$
|
52.0
|
|
|
$
|
45.6
|
|
•
|
The increases in both GAAP operating income and non-GAAP operating income of $9.5 million and $6.4 million, respectively, are primarily due to lower inventory losses, partially offset by an increase in payroll costs.
|
ASIA-PACIFIC
|
|
|
|
|
|
Three months ended April 30,
|
||||||||||||
|
|
2020
|
|
2019
|
||||||||||
|
|
$ in millions
|
|
as a % of net sales
|
|
$ in millions
|
|
as a % of net sales
|
||||||
Operating (loss) income - Asia-Pacific
|
|
$
|
(3.3
|
)
|
|
(1.25
|
)%
|
|
$
|
0.9
|
|
|
0.28
|
%
|
Acquisition, integration and restructuring expenses
|
|
0.9
|
|
|
|
|
0.3
|
|
|
|
||||
Acquisition-related intangible assets amortization expense
|
|
1.3
|
|
|
|
|
1.3
|
|
|
|
||||
Tax indemnifications
|
|
0.6
|
|
|
|
|
0.3
|
|
|
|
||||
Non-GAAP operating (loss) income - Asia-Pacific
|
|
$
|
(0.5
|
)
|
|
(0.19
|
)%
|
|
$
|
2.8
|
|
|
0.91
|
%
|
|
|
•
|
The decreases in both GAAP operating income and non-GAAP operating income of $4.2 million and $3.3 million, respectively, are primarily due to a decrease in net sales volume, including impacts from COVID-19.
|
|
|
|
|
|
|
|
|
|
OPERATING INCOME BY REGION
|
|
|
Three months ended April 30,
|
||||||
|
2020
|
|
2019
|
||||
(in millions)
|
|
|
|
||||
Americas
|
$
|
49.8
|
|
|
$
|
68.6
|
|
Europe
|
45.9
|
|
|
36.4
|
|
||
Asia-Pacific
|
(3.3
|
)
|
|
0.9
|
|
||
Stock-based compensation expense
|
(6.3
|
)
|
|
(8.3
|
)
|
||
Operating income
|
$
|
86.1
|
|
|
$
|
97.6
|
|
INTEREST EXPENSE
|
|
OTHER EXPENSE (INCOME), NET
|
|
PROVISION FOR INCOME TAXES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended April 30,
|
||
|
2020
|
|
2019
|
Effective tax rate
|
20.1%
|
|
23.1%
|
NET INCOME AND EARNINGS PER SHARE-DILUTED
|
CONSOLIDATED GAAP TO NON-GAAP RECONCILIATION
|
|
|
|
|
|||||||||||
|
Net Income
|
|
Earnings per Share-Diluted
|
||||||||||||
Three months ended April 30:
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
(in millions, except per share data)
|
|
|
|
|
|
|
|
||||||||
GAAP results
|
$
|
48.1
|
|
|
$
|
55.4
|
|
|
$
|
1.34
|
|
|
$
|
1.49
|
|
Acquisition, integration and restructuring expenses
|
17.7
|
|
|
6.2
|
|
|
0.49
|
|
|
0.17
|
|
||||
Legal settlements and other, net
|
—
|
|
|
(0.3
|
)
|
|
—
|
|
|
(0.01
|
)
|
||||
Acquisition-related intangible assets amortization expense
|
24.5
|
|
|
21.0
|
|
|
0.68
|
|
|
0.56
|
|
||||
Tax indemnifications
|
0.6
|
|
|
0.3
|
|
|
0.02
|
|
|
0.01
|
|
||||
Income tax effect of tax indemnifications
|
(0.6
|
)
|
|
(0.3
|
)
|
|
(0.02
|
)
|
|
(0.01
|
)
|
||||
Income tax effect of other adjustments above
|
(10.2
|
)
|
|
(6.4
|
)
|
|
(0.29
|
)
|
|
(0.17
|
)
|
||||
Non-GAAP results
|
$
|
80.1
|
|
|
$
|
75.9
|
|
|
$
|
2.22
|
|
|
$
|
2.04
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIQUIDITY AND CAPITAL RESOURCES
|
|
Three months ended April 30:
|
2020
|
|
2019
|
||||
(in millions)
|
|
|
|
||||
Net cash (used in) provided by:
|
|
|
|
||||
Operating activities
|
$
|
(7.7
|
)
|
|
$
|
63.2
|
|
Investing activities
|
24.1
|
|
|
(15.8
|
)
|
||
Financing activities
|
(7.3
|
)
|
|
(35.8
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(21.5
|
)
|
|
(13.2
|
)
|
||
Net decrease in cash and cash equivalents
|
$
|
(12.4
|
)
|
|
$
|
(1.6
|
)
|
As of:
|
|
April 30, 2020
|
|
January 31, 2020
|
|
As of:
|
|
April 30, 2019
|
|
January 31, 2019
|
||||
DSO
|
|
60
|
|
|
54
|
|
|
DSO
|
|
59
|
|
|
54
|
|
DOS
|
|
36
|
|
|
29
|
|
|
DOS
|
|
38
|
|
|
31
|
|
DPO
|
|
(76
|
)
|
|
(68
|
)
|
|
DPO
|
|
(78
|
)
|
|
(70
|
)
|
Net cash days
|
|
20
|
|
|
15
|
|
|
Net cash days
|
|
19
|
|
|
15
|
|
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
|
|
RECENT ACCOUNTING PRONOUNCEMENTS
|
|
(a)
|
Exhibits
|
2-1(3)
|
Agreement and Plan of Merger, dated as of November 12, 2019, by and among Tech Data Corporation, Tiger Midco, LLC and Tiger Merger Sub Co.
|
|
|
2-2(4)
|
Amendment No. 1 to Agreement and Plan of Merger, dated as of November 27, 2019, by and among Tech Data Corporation, Tiger Midco, LLC and Tiger Merger Sub Co.
|
|
|
3-1(2)
|
Amended and Restated Articles of Incorporation of Tech Data Corporation filed on June 4, 2014 with the Secretary of the State of Florida
|
|
|
3-2(2)
|
Bylaws of Tech Data Corporation as adopted by the Board of Directors and approved by the Shareholders on June 4, 2014
|
|
|
10-1(1)
|
Amendment No. 1 to Term Loan Credit Agreement, dated as of April 29, 2020
|
|
|
10-2(1)
|
Amendment No. 1 to Third Amended and Restated Revolving Credit Agreement, dated as of April 29, 2020
|
|
|
10-3(1)
|
Second Amendment to the Amended and Restated Transfer and Administration Agreement, dated as of April 23, 2020
|
|
|
31-A(1)
|
Certification of Chief Executive Officer Pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
31-B(1)
|
Certification of Chief Financial Officer Pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
32-A(1)
|
Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
32-B(1)
|
Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
101(5),(6)
|
Interactive data files pursuant to Rule 405 of Regulation S-T: (i) Consolidated Balance Sheet as of April 30, 2020 and January 31, 2020; (ii) Consolidated Statement of Income for the three months ended April 30, 2020 and 2019; (iii) Consolidated Statement of Comprehensive (Loss) Income for the three months ended April 30, 2020 and 2019; (iv) Consolidated Statement of Shareholders' Equity for the three months ended April 30, 2020 and 2019 (v) Consolidated Statement of Cash Flows for the three months ended April 30, 2020 and 2019; and (vi) Notes to Consolidated Financial Statements, detail tagged.
|
|
|
104(5)
|
The cover page from the Company's Quarterly Report on Form 10-Q for the quarter ended April 30, 2020, formatted in Inline XBRL (included in Exhibit 101).
|
(1)
|
Filed herewith.
|
(2)
|
Incorporated by reference to the Exhibits included in the Company’s Form 10-Q for the quarter ended April 30, 2014, File No. 0-14625.
|
(3)
|
Incorporated by reference to the Exhibits included in the Company’s Form 8-K dated November 12, 2019, File No. 0-14625.
|
(4)
|
Incorporated by reference to the Exhibits included in the Company’s Form 8-K dated November 27, 2019, File No. 0-14625.
|
(5)
|
XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 and 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.
|
(6)
|
The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
||
/s/ RICHARD T. HUME
|
|
Chief Executive Officer, Director (principal executive officer)
|
|
June 3, 2020
|
Richard T. Hume
|
|
|
|
|
|
|
|
||
/s/ CHARLES V. DANNEWITZ
|
|
Executive Vice President, Chief Financial Officer (principal financial officer)
|
|
June 3, 2020
|
Charles V. Dannewitz
|
|
|
|
|
1 Year Tech Data Chart |
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