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CompuCom Discloses 1H2017 Quarterly Revenues, Financial Results

Amid Office Depot’s pending $1 billion buyout of CompuCom, the IT service provider revealed its financial results for 1Q and Q2 2017 in an SEC filing.

The results show that CompuCom continues to effectively manage its latest EBITA profits even as topline revenues fall.

For the three months ended June 30, 2017:

  • Total revenues were $269.4 million, down from $283.7 million in the corresponding quarter for 2016.
  • However, net income improved considerably — reaching $6.7 million for Q2 2017, up from $3.5 million in the corresponding quarter for 2016.

For the six months ended June 30, 2017:

  • Total revenues were $528.7 million, down from $555.7 million in the corresponding first six months of 2016.
  • The company had a net loss of $1.75 million, compared to a $1.2 million profit for the first six months of 2016.

Previous Acquisition Costs

CompuCom also shared financial details for at least three acquisitions over the past year. They included:

  • January 2017: The Company acquired EXT-IOT, an Internet of Things (IoT) startup, for $2.0 million and potential future cash consideration contingent on earnings targets.
  • May 2017: The Company acquired LNS Technologies (LNS), an IT service provider, for $1.8 million in cash and potential future cash consideration contingent on earnings targets.
  • August 2016: The Company acquired 40% of the membership interests in ClearPath Holdings, LLC (ClearPath), a regional VAR and data center integrator. The company acquired an additional 15% for a cash consideration of $6.0 million in June 2017.

Office Depot and CompuCom Next Steps

Through multiple SEC filings, Office Depot has disclosed more financial information about the pending CompuCom buyout along with the target company’s financial performance.

The disclosures seek to rally investors to support a possible $750 million term loan syndication, proceeds from which would be used to refinance the outstanding debt of CompuCom, according to an SEC filing.

Office Depot is paying a lofty 10 times annual EBITDA for CompuCom. The valuation will likely be a more reasonable 7 times annual EBITDA once Office Depot realizes certain financial synergies from the deal, the two companies have indicated.

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2 Comments

Comments

    Berry:

    Well… Amazon EV/EBITDA is almost 50!!!… 🙂

      Joe Panettieri:

      Building on your observation: Amazon’s price to earnings ratio is about 250… Not exactly a value stock 😉
      -jp

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