CDW 2001 Annual Report Download

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www.cdw.com •800-800-4239
ANNUAL REPORT 2001
CDW is…
Strong Relationships
Corporate & Public Sector Customers
Technology Solutions
Performance Driven

Table of contents

  • Page 1
    CDW is...Strong Relationships Corporate & Public Sector Customers Technology Solutions Performance Driven ANNUAL REPORT 2001 www.cdw.com • 800-800-4239

  • Page 2
    ... of the FORTUNE 500 • Nasdaq-100 Index • 100 Best Companies to Work for in America ® FORTUNE magazine Table of Contents Chairman's Letter ...2-3 Business Overview ...4-19 Financial Statements ...20-39 Report of Independent Accountants ...40 Officer, Director and Shareholder Information ...41...

  • Page 3
    ..., that orders are shipped expeditiously and accurately, and that post-sales tech support is available every day, all day, 365 days a year, and on and on. Also, our corporate philosophies are taken seriously and taught to every new coworker at CDW. We don't just post them on a wall; we work hard to...

  • Page 4
    ...'s largest direct marketer of multi-brand technology products and services, CDW is committed to working closely with its partners. Our business model is based on creating strong and lasting relationships - with our coworkers, customers, vendors, and shareholders. Coworkers CDW's core philosophy is...

  • Page 5
    ... support before and after the sale. As part of our e-commerce strategy, CDW has created customized Web sites for our customers that are actively used by more than 95,000 accounts. These extranets, CDW@workTM and CDWG@workTM, allow customers to monitor order status, track asset-tagged products, order...

  • Page 6
    ...client base is quite diverse, with the top five customers accounting for only one percent of sales in 2001. According to IDC, a division of International Data Group, the size of the U.S. technology market was greater than $250 billion in 2000. Of that total market, we estimate that CDW's addressable...

  • Page 7
    ... focused sales teams, specialized sales training, contract management teams, customized marketing initiatives, and significant upgrades to CDW•G Web site capabilities. Our e-business capabilities go beyond providing basic product information. In 2001, we launched upgrades to CDWG.com and CDWG@work...

  • Page 8
    ... information via its Web site, specialty reference guides, and Customer Technology Seminars. CDW Product Mix 2001 (Percent of Sales) Add-On Boards/ Memory 4% Video 8% Net/Comm Products 9% Input Devices 3% Other 3% Notebooks 15% Desktops 13% Printers 13% Software 17% Data Storage 15% www.cdw...

  • Page 9
    ... approved orders, even orders that require configuration, are shipped the same day they are placed. CDW provides its customers with telephone technical support 24 hours a day, seven days a week, 365 days a year. In 2001, we expanded service offerings to address the entire life cycle of technology...

  • Page 10
    ... rank of 435 on the FORTUNE 500 list as well as being added to the Nasdaq100 Index during 2001. Commitment to Customers At CDW, everything we do revolves around the customer. Every area of our business, from coworker services, finance and I.T. to marketing, operations, purchasing and sales, impacts...

  • Page 11
    ... to access their account statements, view and print invoices, and obtain contact information for their CDW credit department representative. Our sales model and commitment to operational excellence have enabled CDW to outperform the market in sales and profitability. CDW achieved record sales of...

  • Page 12
    ... a combined corporate office, distribution center and showroom facility located in Vernon Hills, Illinois, and sales offices in Mettawa, Buffalo Grove and Chicago, Illinois and Lansdowne, Virginia. Additionally, the Company markets and sells products through CDW.com and CDWG.com, its Web sites. For...

  • Page 13
    ... Company plans to expand its sales force by approximately 100 account managers, primarily in the public sector business segment, and increase the number of product category specialists. Selling and administrative expenses, excluding net advertising expenses, may increase as a percentage of net sales...

  • Page 14
    ...active account. Net sales per active commercial account, defined as public and corporate segment accounts transacting within the past twelve months, excluding consumers, grew 43.0% in 2000. The Company believes that spending by customers for networking and Internet capabilities, as well as post-Year...

  • Page 15
    ..., data processing and telephone equipment for the new Chicago, Illinois and Mettawa, Illinois sales offices and construction of the addition to the Vernon Hills distribution center. At December 31, 2001, the Company had a $5.4 million net investment in and loan to CDW Leasing, L.L.C. ("CDW-L"). CDW...

  • Page 16
    ... per share data) 2001 Net sales Cost of sales Gross profit Selling and administrative expenses Net advertising expenses Income from operations Interest income Other expense, net Income before income taxes Income tax provision Net income Earnings per share Basic Diluted Weighted average number of...

  • Page 17
    ...Vernon Hills, Illinois, sales offices in Mettawa, Buffalo Grove and Chicago, Illinois and a government sales office in Lansdowne, Virginia. Additionally, the Company markets and sells products through CDW.com and CDWG.com, its Internet sites. The Company extends credit to corporate and public sector...

  • Page 18
    ... for general corporate purposes, including issuances under various employee stock option plans. The Company accounts for the treasury shares using the cost method. Estimated fair values of marketable securities are based on quoted market prices. The Company's investments in marketable securities at...

  • Page 19
    ... certain stock-based compensation plans for the benefit of its directors and coworkers. Pursuant to these plans the Company has reserved a total of 7,169,400 common shares for future stock option grants. The plans generally include vesting requirements from 3 to 10 years and option lives of up...

  • Page 20
    ... sale of multi-brand computers and related technology products and services primarily through direct marketing. The Company has two operating segments: corporate, which is primarily comprised of corporate customers but also includes consumers, and public sector, which is comprised of federal, state...

  • Page 21
    ... Board of Directors. The Company intends to hold the repurchased shares in treasury for general corporate purposes, including issuances under various employee stock option plans. In connection with the program, the Company purchased 2,692,500 shares of its common stock during the year ended December...

  • Page 22
    ...and with the Company's Business Process Assurance manager, both privately and with management present to review accounting, auditing, internal controls and financial reporting matters. Shareholder and Corporate Information Corporate Office 200 North Milwaukee Avenue Vernon Hill, Illinois 60061 (847...