Tech Data 2013 Annual Report Download - page 33

Table of Contents
Quarterly Data—Seasonality
Our quarterly operating results have fluctuated significantly in the past and will likely continue to do so in the future as a result of currency
fluctuations and seasonal variations in the demand for the products and services we sell. Narrow operating margins may magnify the impact of
these factors on our operating results. Recent historical seasonal variations have included an increase in European demand during our fiscal fourth
quarter and decreased demand in other fiscal quarters, particularly quarters that include summer months. Given that the majority of our net sales are
derived from Europe, our consolidated results closely follow the seasonality trends in Europe. Additionally, the life cycles of major products, as
well as the impact of future acquisitions and divestitures, may also materially impact our business, financial condition, or results of operations (see
Note 16 of Notes to Consolidated Financial Statements for further information regarding our quarterly results).
Liquidity and Capital Resources
Our discussion of liquidity and capital resources includes an analysis of our cash flows and capital structure for all periods presented.
Cash Flows
The following table summarizes Tech Data’s Consolidated Statement of Cash Flows for the fiscal years ended January 31, 2013, 2012 and 2011:
As a distribution company, our business requires significant investment in working capital, particularly accounts receivable and inventory, partially
financed through our accounts payable to vendors. Overall, as our sales volume increases, our net investment in working capital typically increases,
which, in general, results in decreased cash flow from operating activities. Conversely, when sales volume decreases, our net investment in working
capital typically decreases, which, in general, results in increased cash flow from operating activities. Another important driver of our operating
cash flows is our cash conversion cycle (also referred to as “net cash days”). Our net cash days are defined as days of sales outstanding in accounts
receivable (“DSO”) plus days of supply on hand in inventory (“DOS”), less days of purchases outstanding in accounts payable (“DPO”). We
manage our cash conversion cycle on a daily basis throughout the year and our reported financial results reflect that cash conversion cycle at the
balance sheet date. The following table presents the components of our cash conversion cycle, in days, as of January 31, 2013, 2012 and 2011:
Net cash provided by operating activities was $120.8 million in fiscal 2013 compared to $524.9 million of cash provided by operating activities in
fiscal 2012. The decrease in cash resulting from operating activities in fiscal 2013 compared to the same period of the prior year can be primarily
attributed to i) the timing of both cash receipts from our customers and payments to our vendors, and ii) an increase in inventory levels. Net cash
provided by operating activities was $524.9 million in fiscal 2012 compared to $176.1 million of cash provided by operating activities in fiscal
2011. The change in cash resulting from operating activities in fiscal 2012 compared to the same period of the prior year can be attributed to i) a
significant reduction in our inventory levels, and ii) the timing of both cash receipts from our customers and payments to our vendors.
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Years ended January 31,
2013 2012 2011
(In thousands)
(As restated) (As restated)
Net cash provided by (used in):
Operating activities
$
120,753
$
524,906
$
176,129
Investing activities
(345,677
)
(69,122
)
(167,144
)
Financing activities
80,294
(670,841
)
(211,185
)
Effect of exchange rate changes on cash and cash equivalents
(1,068
)
(21,279
)
(2,633
)
Net decrease in cash and cash equivalents
$
(145,698
)
$
(236,336
)
$
(204,833
)
As of January 31,
2013 2012 2011
Days of sales outstanding 39 37 38
Days of supply in inventory 29
27 34
Days of purchases outstanding (47)
(43) (46)
Cash conversion cycle (days) 21
21 26