Tech Data 2014 Annual Report Download - page 9

Table of Contents
competition from other distributors as well as vendors. However, we believe vendors will continue to sell their products through distributors,
such as Tech Data, due to our ability to provide them with access to our broad customer base and serve them in a highly cost-effective and
efficient manner. Our logistics capabilities, as well as our sales and marketing, credit and product management expertise allow our vendors to
expand their market coverage, while lowering their selling, inventory and fulfillment costs.
Employees
On January 31, 2014, we had approximately 9,100 employees (as measured on a full-time equivalent basis). Certain of our employees in various
countries outside of the United States are subject to laws providing representation rights to employees on workers' councils. Our success depends
on the talent and dedication of our employees and we strive to attract, hire, develop and retain outstanding employees. We believe we realize
significant benefits from having a strong and seasoned management team with many years of experience in technology distribution and related
industries. We consider relations with our employees to be good.
Foreign and Domestic Operations and Export Sales
We operate predominately in a single industry segment as a distributor of technology products, logistics management, and other value-added
services. While we operate primarily in one industry, we manage our business in two geographic segments: the Americas (including North
America and South America) and Europe.
Over the past several years, we have entered new geographic markets, expanded our presence in existing markets and exited certain markets
based upon our assessment of, among other factors, our earnings potential and the risk exposure in those markets, including foreign currency
exchange, regulatory and political risks. To the extent we decide to close any of our operations, we may incur charges and operating losses
related to such closures and recognize a portion of our accumulated other comprehensive income in connection with such a disposition. For
information on our net sales, operating income and identifiable assets by geographic region, see Note 14 of Notes to Consolidated Financial
Statements.
Asset Management
We manage our inventories in a manner that allows us to maintain sufficient quantities to achieve high order fill rates while attempting to stock
only those products in high demand that have a rapid turnover rate. Our business, like that of other distributors, is subject to the risk that the
value of inventory will be impacted adversely by suppliers’ price reductions or by technological changes affecting the usefulness or desirability
of the products comprising the inventory. Our contracts with most of our vendors provide price protection and stock rotation privileges to reduce
the risk of loss due to manufacturer price reductions and slow moving or obsolete inventory. In the event of a vendor price reduction, we
generally receive a credit for the impact on products in inventory and we have the right to rotate a certain percentage of purchases, subject to
certain limitations. Historically, price protection and stock rotation privileges, as well as our inventory management procedures, have helped
reduce the risk of loss of inventory value.
We attempt to control losses on credit sales by closely monitoring customers’ creditworthiness through our IT systems, which contain detailed
information on each customer’s payment history and other relevant information. In certain countries, we have obtained credit insurance that
insures a percentage of the credit extended by us to certain customers against possible loss. The Company also uses floorplan financing
arrangements as an additional approach to mitigate credit risk. Customers who qualify for credit terms are typically granted net 30-day payment
terms in the Americas. While credit terms in Europe vary by country, the vast majority of customers are granted credit terms ranging from 30 to
60 days. We also sell products on a prepayment, credit card and cash-on-delivery basis. In addition, certain of the Company’s vendors subsidize
floorplan financing arrangements for the benefit of our customers.
Additional Information Available
Our principal Internet address is www.techdata.com . We provide our annual and quarterly reports free of charge on www.techdata.com, as soon
as reasonably practicable after they are electronically filed with, or furnished to, the Securities and Exchange Commission (“SEC”). We provide
a link to all SEC filings where current reports on Form 8-K and any amendments to previously filed reports may be accessed, free of charge.
Information on Tech Data’s website is not incorporated into this Form 10-K or the Company’s other securities filings and is not a part of them.
Executive Officers
The following table sets forth the name, age and title of each of the persons who were serving as executive officers of Tech Data as of March 26,
2014:
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