Tech Data posts $420 million of debt, $940 million of cash at July 31

By Jennifer Lanning Drey

Portland, Ore., Aug. 19 - Tech Data Corp. ended the second quarter of fiscal 2011 with total debt of $420 million and cash of $940 million, Jeffery Howells, its chief financial officer, reported Thursday during Tech Data's quarterly earnings conference call.

"The company continues to enjoy excellent liquidity and financial flexibility with a cash position of $940 million and a net cash position of $520 million at July 31," Howells said.

Tech Data had funds available for use under its credit facilities of $868 million at quarter-end.

During the second quarter, Tech Data continued to put its balance sheet and excess cash to good use, announcing three acquisition agreements and using $170 million to buy back stock, Robert Dutkowsky, the company's chief executive officer, said during the call.

A key component of Tech Data's strategy is to grow the business by bringing in new technologies while gaining new customers in more locations, he said.

The company generated $196 million of cash from operations during the three months ended July 31.

Tech Data reported second-quarter net sales of $5.47 billion, representing a 5.6% increase from net sales of $5.18 billion in the second quarter of fiscal 2010. The company said the strengthening of the U.S. dollar against foreign currencies in the second quarter negatively impacted the year-over-year net sales comparison by six percentage points.

"Tech Data delivered another strong quarter, marked by broad-based improvements across both of our regions," Dutkowsky said.

Looking ahead to the third quarter, the company expects demand trends to continue and sales to follow seasonal patterns, which should allow the company to post year-over-year sales growth on a local currency basis in both regions, he said.

Foreign currencies are likely to have a more pronounced affect on the company's results in the second half of the fiscal year, but Tech Data is confident its focus on growth, combined with expense and asset management, will allow it to deliver strong results for the year, he said.

Tech Data, based in Clearwater, Fla., distributes information technology products and logistics management services.

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