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   Technology StocksTECD - Tech Data

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To: Dale Stempson who wrote (560)12/2/1999 12:21:00 AM
From: Dale Stempson
   of 584
Computer-Distributor Tech Data Profits Lower

Wednesday December 1 5:28 PM ET

By Michael Connor

MIAMI (Reuters) - Tech Data Corp. (NasdaqNM:TECD - news), the world's No. 2 computer-goods
distributor, on Wednesday reported lower quarterly profits and said Y2K fears among its big corporate
customers were hurting sales and earnings.

Shares of Tech Data, beaten down in recent months along with those of other computer-equipment
middlemen, fell more than 16 percent following the news. The shares later recovered a bit but ended down
$1-3/16 at $23-5/16 on the Nasdaq stock market.

The Clearwater, Fla.-based company also said its president and chief operating officer, Anthony Ibarguen,
was quitting to join a venture capital group in Pennsylvania.

Tech Data's net income for the fiscal third quarter, ended Oct. 31, totaled $33 million, or 60 cents per
diluted share, down from $34.1 million, or 63 cents per share, in the same quarter a year earlier.

The per-share earnings were a penny ahead of the 59 cents projected by analysts surveyed by First
Call/Thomson Financial, which tracks brokerage estimates.

Tech Data's sales in the quarter grew to $4.31 billion from $3.28 billion a year earlier. The company said its
sales growth and profitability were strong across all regions.

U.S. sales grew 44 percent and represented a majority of the company's sales. Sales grew only 14 percent
in Europe, where Tech Data faces competitive pricing. Sales in other international markets grew 60 percent.
Europe represented 39 percent of total sales, while international markets were 7 percent.

Tech Data executives said after the earnings release that worries among corporate buyers about possible
Y2K computer problems were hurting its fourth quarter. But they expressed confidence that business would
pick up next year.

Sales for the fourth quarter, ending in January, will be about $4.7 billion, and earnings will be 64 to 69
cents a share, below Wall Street expectations, Chief Financial Officer Jeffery Howells said.

``We think Year-2000 is costing us a few hundred million (in sales) in the quarter. That's the sole
reason...,' said Chief Executive Steven Raymund.

He said sales at Tech Data, a global distributor of 75,000 computer products, were growing well among
medium and small businesses, which do not face the same Y2K worries as big corporations with elaborate
computer systems.

The Tech Data executives said they expect per-share profits in the next fiscal year to grow 20 percent over
the year ending in January.

``I think there will be a snapback (in sales),' Raymund said. He said in an interview that earnings might
increase even more, but he could not confidently predict profit margins and sales rates. ``As a starting point,
it makes sense to look at $2.80 a share,' he said.

Before Wednesday's news, analysts had expected the company to earn between $2.90 and $3 per share in
the fiscal year ending in January 2001.

Shares of Tech Data, Ingram Micro (NYSE:IM - news) and other big computer-equipment distributors have
been beaten down by narrowing profit margins, shifting business conditions, and investor fears that the
Internet may eliminate many middleman functions.

But Raymund said Tech Data's online business had topped $2 billion and was growing as
computer-equipment manufacturers trim the ranks of distributors they use and outsource many central tasks.

Tech Data said it would not replace its outgoing president Ibarguen, who is joining Internet Capital Group
Inc. (NasdaqNM:ICGE - news). Nestor Cano, Tech Data's executive vice president of U.S. sales and
marketing, was promoted to president of the Americas responsible for U.S., Canadian and Latin American

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To: GS_Wall Street who wrote (576)12/17/1999 6:57:00 PM
From: PeterGx
   of 584
Greg -

the numbers on this company look pretty attractive at these levels. I am guessing that once the Y2K spending freeze is over their business will return to normal growth levels (about 20%). If that happens, I would think that the stock could double in a year. Any feelings on what this issue?


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To: PeterGx who wrote (578)12/18/1999 2:40:00 PM
From: GS_Wall Street
   of 584
Peter, I have invested in a couple of distributors in different sectors semiconductors, computers, cell phones, and clothing. One thing they all have in common is they move large amounts of money around, they have lots of competition and they trade a low P/E ratio relative to the industry.

Now if your timing is right and you are in an earnings up cycle you can get some P/E expansion maybe from 8 or 9 to 14 to 15, but beyond that gains are small and slow.

That being said I don't own anymore distributor companies. And if I did it would be for very short period of times. The last two times I was involved in TECD it was for less than two weeks each time.

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To: GS_Wall Street who wrote (579)12/18/1999 11:12:00 PM
From: PeterGx
   of 584
Thanks Greg -

I think that this company has been beaten more that it's condition warrants. I like their strategy of expanding their global presence. In light that Latin America and especially Europe are poised for strong growth in hi-tech, I think that TECD can grow its revenues and earnings above the 20% annual rate. That ought to bring them closer to IBM's P/E of 25 from it's current sub 10 level. It seems like an attractive addition to a portfolio. I see money shifting around during the first part of 2000 - out of the hyperachieving Net and e-tailers into more modestly priced second-tier Tech and Net players like TECD. One can hardly envision AMZN, EBAY, YHOO, ORCL, etc without the suppliers' and distributors' backbone. Yet, while their business fortunes are closely related, the two sectors' economic success is widely disparate. I think that the gap will tend to narrow and TECD should benefit (to the tune of 30-50% I think)

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To: PeterGx who wrote (578)12/27/1999 2:07:00 PM
From: Sofa Kingdom
   of 584
I certainly hope you are right. I agree on Y2K being over-blown. I agree with your statement about pent up demand for computer equipment that will come in Q1 - Q2. TECD is bound to garner a portion of it.

If Y2K does turn into more issues than anticipated this demand won't go away, merely push off to later quarters. Distributors have to stay in lock-step with customer demand. If demand is erratic so is their business.

Windows 2000 will assuredly raise the bar (again) for system requirements. That will also create more demand for equipment. Its due out soon. Again this demand could be postponed by MS having too much late-beta in their released product.

I've been in the computer bus. 16 years and have done bus. with TECD for most of it. As distributors go they are good. The computer distribution bus. itself is not a reliable one. High turn business. With equipment becoming obsolete so fast it has to be murder to miss the mark on any product and have inventory (that loses value in a heartbeat).

Unless TECD goes on the acq. trail or gets an exclusive on a high demand product (or some other new un-anticipated business)they probably won't rocket up. Doubling their stock price is more than I expect. I do hope it does break my expectations and does double. Better to expect less and get the good surprise than the obverse.

-Sofa Kingdom

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To: Sofa Kingdom who wrote (581)12/29/1999 7:29:00 PM
From: PeterGx
   of 584
Wow! the stock's up 30% since my first post 2 weeks ago.
Not bad! but what now? Do I take my profits or do I stick with it? I'll act like one of those Bozzo analysts and toss out a target of 30 (?!) :-)

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To: PeterGx who wrote (582)12/29/1999 8:38:00 PM
From: Jon Klaus
   of 584
Hold--it will see 50 in 2000.

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From: Jack Kline1/6/2008 11:00:39 AM
   of 584
Does anyone follow Tech Data (TECD) or Ingram Micro (IM)? I'm wondering if this is the time to Short IM big time. Our experience recently suggests they are having a major IT problem and are unable to produce on-line catalogs for their customers. Is this a signal for a deeper IT problem including inventory and financial processing?

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