Tech Data 2014 Annual Report Download - page 7

Table of Contents
demand, or vendor distribution policies. Overall, we believe that our diversified and evolving product portfolio will provide a solid platform for
continued growth.
We continually evolve our product line in order to provide our customers with access to the latest technology products. However, from time to
time, the demand for certain products that we sell exceeds the supply available from the vendor. In such cases, we generally receive an allocation
of the available products. We believe that our ability to compete is not adversely affected by these periodic shortages and the resulting
allocations.
We believe that our vendor agreements are in the form customarily used by manufacturers and distributors. Agreements typically contain
provisions that allow termination by either party upon a short notice period. In most instances, a vendor who elects to terminate a distribution
agreement will repurchase the vendor’s products carried in the distributor’s inventory.
Most of our vendor agreements also allow for stock rotation and price protection provisions. Stock rotation rights give us the ability, subject to
certain limitations, to return for credit or exchange a portion of those inventory items purchased from the vendor. Price protection situations
occur when a vendor credits us for declines in inventory value resulting from the vendor’s price reductions. Along with our inventory
management policies and practices, these provisions reduce our risk of loss due to slow-moving inventory, vendor price reductions, product
updates or obsolescence.
Sometimes the industry practices discussed above are not embodied in agreements and do not protect us in all cases from declines in inventory
value. However, we believe that these practices provide a significant level of protection from such declines, although no assurance can be given
that such practices will continue or that they will adequately protect us against declines in inventory value. We sell products in various countries
throughout the world, and product categories may vary from region to region. Our consolidated revenue mix may fluctuate between and within
our operating segments as well as within our product categories. These fluctuations can be influenced by our diversification strategies, new
product offerings and supply and demand fluctuations within our operating regions.
Our consolidated net sales for fiscal 2014 and 2013 within our strategic focus categories approximated the following:
Our strategic focus categories include the following products:
We generated approximately 21% , 21% and 25% of our consolidated net sales in fiscal 2014, 2013 and 2012, respectively, from products
purchased from Hewlett-Packard Company. In addition, approximately 13% and 12% of our consolidated net sales in fiscal 2014 and 2013 were
from products purchased from Apple, Inc. There were no other vendors that accounted for 10% or more of our consolidated net sales in fiscal
2014, 2013 or 2012.
Customers and Services
Our products are purchased directly from vendors in significant quantities and are marketed to an active reseller base of approximately 115,000
VARs, direct marketers, retailers and corporate resellers. While we sell products in various countries
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2014 2013
Broadline 46% 47%
Data Center 23% 21%
Software 18% 19%
Mobility 9% 8%
Consumer Electronics 4% 5%
• Broadline - We define our broadline category to include, among other products, notebooks, tablets, desktop systems, printers, supplies
and components.
• Data Center - We define our data center category to include products such as servers, server accessories, networking products, storage
hardware and networking support services.
• Software - We define our software category as a broad variety of applications containing computer instructions or data that can be
stored electronically. We offer a variety of software products, such as virtualization software, security software (firewalls, intrusion,
detection and encryption), desktop application software, operating system software, utilities software and software service and support.
• Mobility - We define our mobility category to include mobile handsets, navigation devices, aircards, SIM cards and other mobility-
related accessories.
• Consumer Electronics - We define our consumer electronics category to include car and home audio / visual equipment, blue-ray and
DVD players, televisions and related accessories, cameras and related accessories, gaming and home appliances.