CDW Government business grows

Reseller CDW has seen significant growth in sales through its government division, according to financial results released early today. CDW Government, the firm's public-sector arm, reported a 12.2 percent rise in third quarter public-sector revenue, from $493.5 million last year to $553.6 million.

Jim Shanks, president of CDW-G, attributed the third quarter increase in federal sales to the end of the government’s fiscal year, when agencies traditionally rush to spend remaining appropriated funds. Shanks also credited the company’s focus on funded opportunities as a factor. Shanks reported a strong pickup in business in September, heavily weighted to the end of the month.

He declined to specify the percentage of federal revenue growth apart from the public sector as a whole. The sector also includes state and local governments and health care and educational institutions.

Overall, CDW generated third quarter sales of $1.67 billion, a 10.5 percent increase over last year’s third quarter revenue of $1.51 billion. Third quarter net income grew 12.2 percent to $73.1 million from $65.2 million in the year-earlier period.

During the company’s earnings conference call, John Edwardson, chairman and chief executive officer of CDW, said the company would re-invest some of its proceeds into a distribution and configuration facility in North Las Vegas, Nev. That facility is scheduled to open by the end of this year. Edwardson described it as one way in which the company is preparing for expected future growth.

Additionally, he cited investment in the company’s customer segmentation strategy. As part of that plan, CDW consolidated 10,000 health care accounts in July into a sales group in the company’s public-sector business.