CDW Holding (BXE) H2 2023 earnings summary

Executive summary

• FY2023 revenue fell 26.2% to US$109.2m; the year swung to a US$1.4m net loss from US$14.2m profit in FY2022, amid weaker demand, segment restructuring and a delayed POS model launch.

• Management is shifting LCD products toward higher-margin large displays, restructuring Office Automation, diversifying manufacturing locations and developing Life Sciences and other businesses.

Financial highlights

• Revenue was US$109.218m, down from US$147.992m; gross profit decreased to US$18.716m from US$25.675m, while gross profit margin was not stated.

• Loss before tax was US$0.998m versus FY2022 profit before tax of US$16.108m; net loss was US$1.419m versus net profit of US$14.241m.

• Basic and diluted loss per share were both 0.48 US cents; FY2022 EPS was 6.43 US cents basic and 6.36 US cents diluted.

• FY2022 results included a US$10.315m gain on deemed disposal of ABio; FY2023 other income was US$0.445m versus US$2.464m in FY2022.

• Expenses declined 8.9% to US$19.7m; distribution costs fell to US$2.448m from US$4.160m, while administrative expenses were US$17.277m versus US$17.502m.

Outlook and guidance

• Philippines operations resumed in November 2023, with manufacturing slated to begin in Q2 FY2024; expansion options in Vietnam are being explored, alongside cooperation with a Thailand production partner.

• A delayed POS model is expected to resume mass production in FY2024; a newly secured display-backlight contract for an upcoming entertainment console is expected to support prospects.

• Notebook display demand is expected to recover in or after 2025 as replacement cycles return; the transition toward large vehicle and virtual-reality displays may take time and limit near-term prospects.

• Nihon Trim water-system sales are targeted for further growth in FY2024; licensed electric boat propulsion sales are planned to start in 2024.

• Life Sciences plans further antibody research and evaluation following anti-Cripto-1 gene modification; LANFA commercialization possibilities include cosmetic ingredients and chemical products, with a Japan patent application filed.