TECH-DATA POSTS RECORD SALES AS COMPANIES CUT BACK

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TECH-DATA POSTS RECORD SALES AS COMPANIES CUT BACK

 user 2008-05-29 at 2:43:45 pm Views: 44
  • #20227
    http://www2.tbo.com/content/2008/may/23/bz-tech-data-posts-record-sales-even-as-companies-/#
    Tech Data Posts Record Sales Even As Companies Cut Back
    Published:
    May , 2008 TAMPA – Despite soaring freight costs and a cooling
    technology market, Tech Data Corp. managed to post record sales for an
    eighth time, comparing each quarter to a year before.It was quite a
    feat for the Clearwater-based distributor of computers and other
    technology products because its main line of work consists of two
    things highly susceptible to bad economic times, said its chief
    executive, Bob Dutkowsky.”The company is executing very, very well,”
    Dutkowsky said. “There are some serious things we’re working on, but we
    feel good about a lot of parts of the company.”

    That’s amid big challenges.
    First,
    Tech Data is in the business of buying technology products and selling
    them to big computer retailers and technology installers, then taking a
    small cut of the proceeds as a distribution fee. So tough economic
    times cause customers to rein in spending, which is out of Tech Data’s
    control.Dutkowsky said it’s even happening in his own office. “My
    assistant would like a new printer, but the current one works fine, so
    I said we could wait a couple quarters and then maybe get a new one,”
    he said.

    Second, computer distributors like Tech Data
    traditionally pay for many shipping costs, which are soaring lately
    because of high diesel and jet fuel prices. “That comes right out of
    our bottom line,” he said.To cut costs and cope with rising prices, the
    company has launched a series of back-office changes, some as mundane
    as switching from cardboard box and Styrofoam packaging to paper-padded
    envelopes for small items like computer mice. It’s also overhauling
    software in its warehouses and sales operations to boost volume.That
    helped Tech Data’s revenue grow 12.3 percent compared with the quarter
    before, rising to $6.07 billion in its first fiscal quarter ended April
    30, from $5.4 billion the same quarter a year ago.Normally, profits in
    the computer distribution business are razor thin. Tech Data’s profit
    rose to $23 million, compared with $9.9 million in the quarter a year
    before, when the company took some restructuring charges.Tech Data
    employs about 8,500 people worldwide, including about 200 new employees
    in Europe from companies it acquired there. The company employs about
    1,600 in the Tampa Bay area.Stock in Tech Data fell a penny Thursday to
    close at $36.89.