CDW Holding (BXE) H1 2024 earnings summary

Executive summary

• 1H2024 revenue fell 22.8% YoY to US$43.7m, primarily on weaker LCD backlight demand; net loss widened to US$2.6m from US$0.6m.

• Continued customer and market challenges prompted factory consolidation, Wuxi closure and exploration of production diversification in Southeast Asia.

Financial highlights

• Revenue was US$43.749m vs US$56.674m; gross profit was US$7.583m vs US$10.094m.

• Operating loss was US$2.349m vs US$3k; loss before tax was US$2.498m vs US$299k, and net loss was US$2.562m vs US$558k.

• Distribution costs declined to US$1.043m from US$1.245m; administrative expenses were US$9.181m vs US$9.254m.

• Finance costs fell to US$149k from US$296k; income tax expense fell to US$64k from US$259k. Tax credits from loss-making subsidiaries did not fully offset tax payable by profitable subsidiaries.

Outlook and guidance

• FY2024 outlook remains cautious amid economic and market uncertainty; BLU demand challenges are expected to continue through 2024.

• OEM and Accessories resumed growth in Q2 as delayed models entered mass production; the Philippine plant is expected to begin formal production in 2H2024 and contribute to profitability next year.

• BLU test production for VR headsets has begun; new vehicle display models are planned later in 2024, while multimedia display panel production was delayed by the customer.

• Vietnam production feasibility is under review following a major customer's request; a Ho Chi Minh City representative office has been established.