TECH-DATA POSTS RECORD SALES…………

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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.

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May 29, 2008 at 2:42 PM