First Quarter 1996 Earnings Release CDW COMPUTER CENTERS REPORTS RECORD FIRST QUARTER SALES First Quarter Highlights: Eleventh consecutive quarter of sequential sales growth as a public company Net sales increases 46% to $206,705,000 Net income rises 32% to $5,534,000 Pro forma net income, excluding the impact of the non-recurring exit charge, rises 79% to $7,486,000 Operating margin, excluding the impact of the exit charge, increases to 5.6% of net sales Announced plan to acquire 27 acres of vacant land for facility relocation and expansion Financial Summary Quarter Ended 3/31/96 3/31/95 % Change Net Sales (000’s) $206,705 $141,356 46% Income from Operations (000’s) 8,291 6,596 26% Net Income (000’s) 5,534 4,184 32% Net Income Per Share 0.38 0.30 27% Pro-forma - Excluding Exit Charge Income from Operations (000’s) 11,491 6,596 74% Net Income (000’s) 7,486 4,184 79% Net Income Per Share 0.52 0.30 73% Number of Orders Shipped 299,930 234,339 28% Average Order Size $689 $603 14% # account managers, end of period 237 152 56% Catalogs Mailed (000’s) 12,907 7,433 74% Pages of National Advertising Placed 150 118 27% Customers Serviced-Quarter 146,739 118,410 24% Customers Serviced-TTM 395,829 n/a "While we recognize our first quarter results as an accomplishment, we realize that in our quest to make 1996 our best year ever, we must remain attentive to customer service and improving all facets of our business." --- Michael P. Krasny, Chairman and Chief Executive Officer Buffalo Grove, Illinois, April 17, 1996 --- CDW Computer Centers, Inc. ("CDW") today announced record sales for the first quarter ended March 31, 1996, fueled by strong sales of notebook, laptop and desktop computers and a higher average order size. Net sales for the first quarter increased 46% to $206,705,000 from $141,356,000 in the same period of 1995. Pre-tax earnings for the quarter were reduced by $3,200,000, which includes a $4,000,000 non-recurring charge for the estimated costs of exiting the Company’s current facility and a related $800,000 reduction in the executive incentive bonus pool. Net income totaled $5,534,000 a 32% increase over $4,184,000 in the first quarter of 1995. Earnings per share of $0.38 for the first quarter of 1996 increased 27% from $0.30 in the same period of 1995. Pro forma net income and earnings per share, excluding the impact of the exit charge, were $7,486,000 and $0.52, representing increases of 79% and 73% respectively, over the first quarter of 1995. "Significant productivity gains and robust sales of high-end notebook/laptop computers were among the main drivers of our first quarter performance," said Michael P. Krasny, chairman and chief executive officer. "Sales per employee increased to $1,466,000 in the quarter, a 9% increase over $1,346,000 in the same quarter a year ago. Sales of notebook/laptop computers increased 70% over the first quarter of 1995 and represent 26% of first quarter 1996 net sales." The Company announced previously that it has entered into a contract to purchase land in Vernon Hills, Illinois for the purpose of constructing a combined telemarketing, warehouse, showroom and corporate office facility to meet space demands related to continued strong sales growth. In conjunction with the move to the new facility, the Company will vacate and endeavor to sublease its current facility. The non-recurring charge for exit costs of $4,000,000 represents an estimate of the costs the Company will incur to vacate and sublease its existing leased facility. The exit charge effectively reduces the amount of the executive incentive bonus pool which is based upon a percentage of the increase in operating income over the prior year. Thus, the executive incentive bonus pool for the quarter ended March 31, 1996 was $242,000 versus $1,042,000, which would have been incurred on a pro-forma basis excluding the exit charge. "We are excited about our plans for the new Vernon Hills facility. We are progressing with the required regulatory approvals and hope to break ground within the next 90 days. We look for a smooth transition to our new building which should enable us to retain our proven operating model," Krasny said. "In addition to notebook/laptop computers, we experienced solid gains in communication products, desktop computers and software which increased 89%, 59% and 49% respectively," said Gregory C. Zeman, president. "Demand for high end notebooks was strong, with limited supplies throughout the quarter. Notebook/laptop demand, as well as continuing increases in sales of desktops, contributed to our higher average order size in the quarter." Gross profit margin of 12.9% improved slightly over recent periods. Operating profit margin, excluding the impact of the exit charge, improved to 5.6% versus 4.7% in the year-ago quarter. The improved operating margin is attributable to reduced selling and administrative costs as a percentage of net sales resulting from continued improvements in employee productivity, re-negotiated telephone rates, improved collections of cooperative advertising reimbursements from vendors and the leveraging of certain fixed costs over a higher sales volume. "We continue to increase our catalog circulation. Total PC catalog circulation grew 86% to over 11 million catalogs and Mac catalog circulation grew 11% to 1.7 million catalogs. We completed the quarter with 237 account managers, an increase of 20 from December 31, 1995," Zeman added. Annualized inventory turnover improved to approximately 26 for the three months ended March 31, 1996 versus 21 in the year-ago period. The improvement was due, in part, to limited availability of certain products from manufacturers and a lower level of inventory in transit as of March 31, 1996. Working capital was approximately $105 million with approximately $55 million in cash, cash equivalents and marketable securities. CDW had no long-term debt as of March 31, 1996. "We are optimistic about the remainder of 1996," said Krasny. "We are confident that we are taking all the necessary steps to continue our strong growth. Continuous refinements to customer service, marketing, operations and asset management should help keep us on track toward our 1996 goals. Our expansion should provide the capacity necessary to reach our goals beyond 1996." CDW Computer Centers, Inc. is a leading direct marketer of brand name microcomputer products. Inbound and outbound telemarketers are dedicated to providing superior customer service at the best price. CDW offers a broad range of over 20,000 MS-DOS/Microsoft Windows and Apple/Macintosh-based microcomputer products, including hardware, peripherals, accessories, networking and software. Customers can place orders and obtain product information by calling a CDW account manager at 1-800-884-4CDW, or by visiting CDW on the Internet at http://www.cdw.com. The Company's common stock is traded on the Nasdaq National Market under the symbol CDWC. For more information about CDW: Fax 1 800 PRO-INFO and enter the code -- CDW. Visit CDW on the Internet at http://www.cdw.com eMail CDW Investor Relations at shserv@admin.cdw.com. Telephone CDW Corporate Offices at 847 419-8234. CDW COMPUTER CENTERS, INC. AND SUBSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share data) (unaudited) Three Months Ended March 31, 1996 1995 Net sales $206,705 $141,356 Cost of sales 180,058 123,042 ---------- ---------- Gross profit 26,647 18,314 Selling and administrative expenses 14,356 11,718 Exit Charge 4,000 - ---------- ---------- Income from operations 8,291 6,596 Interest income (expense), net 835 308 Other income (expense) (54) 12 ---------- ---------- Income before income taxes 9,072 6,916 Income tax provision 3,538 2,732 ---------- ---------- Net income $5,534 $4,184 ========== ========== Net income per share $0.38 $0.30 ========== ========== Weighted average number of common and common equivalent shares outstanding 14,432 13,807 CDW COMPUTER CENTERS, INC. AND SUBSIDIARY CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share data) (unaudited) March 31, December 31, 1996 1995 ASSETS Current assets: Cash, cash equivalents and Marketable Securities $54,781 $57,169 Accounts receivable, net of alowance for doubtful accounts of $700 and $625, respectively 45,097 38,527 Merchandise inventory 28,050 27,422 Other current assets 2,923 2,568 Deferred income taxes 1,502 1,175 ---------- ---------- Total current assets 132,353 126,861 Property and equipment, net 3,393 3,474 Deferred taxes and other assets 3,885 3,560 ---------- ---------- Total assets $139,631 $133,895 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $13,421 $19,436 Accrued expenses and other liabilities 10,394 8,298 Accrued exit costs 4,000 - ---------- ---------- Total current liabilities 27,815 27,734 Stockholders' equity 111,816 106,161 ---------- ---------- Total liabilities and stockholders' equity $139,631 $133,895 ========== ========== At The Company FINANCIAL RELATIONS BOARD - CHICAGO Harry J. Harczak, Jr. Julie Creed Michael Rosenbaum Jeff Wilhoit Laura Kuhlmann-Doerer Chief Financial Officer Analyst Contact General Inquiries Media Inquiries (847) 419-6226 (312) 266-7800 (312) 266-7800 (312) 266-7800