UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)


þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: ~~September 30, 2007~~March 31, 2008


þo		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 0-25092

INSIGHT ENTERPRISES, INC.

(Exact name of registrant as specified in its charter)


Delaware		86-0766246
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

1305 West Auto Drive, Tempe, Arizona 85284
(Address of principal executive offices) (Zip Code)

(480) 902-1001
(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yesþ Noo

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a ~~non-accelerated filer.~~smaller reporting company. See ~~definition~~definitions of ~~“accelerated filer and large~~“large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

~~Large accelerated filer~~þ ~~Accelerated filer~~o


Large accelerated filerþ	Accelerated filero	Non-accelerated filero	Smaller reporting companyo
		(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yeso Noþ

The number of shares outstanding of the issuer’s common stock as of ~~November 2, 2007~~May 5, 2008 was ~~48,435,172.~~46,877,452.

INSIGHT ENTERPRISES, INC.

FORWARD-LOOKING INFORMATION

Certain statements in this Quarterly Report on Form 10-Q, including statements in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part I, Item 2 of this report, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may include: projections of matters that affect net sales, gross profit, operating expenses, earnings from continuing operations, non-operating income and expenses, earnings from a discontinued ~~operations,~~operation, net earnings or cash flows, the payment of accrued expenses and liabilities and costs or gains that may result from post-closing adjustments pertaining to business ~~acquisitions;~~acquisitions or dispositions; effects of acquisitions or dispositions; projections of capital ~~expenditures~~expenditures; our effective tax rate and ~~growth;~~earnings per share in 2008; hiring plans; plans for future operations; the availability of financing and our needs or plans relating thereto; plans relating to our products and services; the effect of new accounting principles or changes in accounting policies; the effect of guaranty and indemnification obligations; projections about the outcome of ongoing tax audits; statements related to accounting estimates, including estimated stock option and other equity award forfeitures, and deferred compensation cost amortization periods; statements of belief; and statements of assumptions underlying any of the foregoing. Forward-looking statements are identified by such words as “believe,” “anticipate,” “expect,” “estimate,” “intend,” “plan,” “project,” “will,” “may” and variations of such words and similar expressions, and are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. Future events and actual results could differ materially from those set forth in, contemplated by, or underlying the forward-looking statements. There can be no assurances that the events discussed in the forward-looking statements will occur, and actual results could differ materially from those suggested by the forward-looking statements. Some of the important factors that could cause our actual results to differ materially from those projected in any forward-looking statements include, but are not limited to, the ~~following, which are discussed~~following:

changes in ~~“Risk Factors”~~the information technology industry and/or the economic environment;

our reliance on partners for product availability, marketing funds, purchasing incentives and competitive products to sell;

disruptions in ~~Part I, Item 1A~~our information technology systems and voice and data networks, including our system upgrade and the migration of acquired businesses to our information technology systems and voice and data networks;

the integration and operation of acquired businesses, including our ability to achieve expected benefits of the acquisitions;

actions of our ~~Annual Report~~competitors, including manufacturers and publishers of products we sell;

the informal inquiry from the Securities and Exchange Commission (“SEC”) and stockholder litigation related to our historical stock option granting practices and the related restatement of our consolidated financial statements;

the risks associated with international operations;

seasonal changes in demand for sales of software licenses;

increased debt and interest expense and lower availability on ~~Form 10-K/A for~~our financing facilities and changes in the ~~year ended December 31, 2006:~~overall capital markets that could increase our borrowing costs or reduce future availability of financing;

	•		~~changes in the information technology industry and/or the economic environment;~~

	•		~~our reliance on suppliers for product availability, marketing funds, purchasing incentives and competitive products to sell;~~

	•		~~disruptions in our information technology and voice and data networks, including migration of Software Spectrum to our information technology and voice and data networks;~~

	•		~~the integration and operation of Software Spectrum, including our ability to achieve the expected benefits of the acquisition;~~

	•		~~actions of our competitors, including manufacturers and publishers of products we sell;~~

	•		the informal inquiry from the Securities and Exchange Commission (“SEC”) and the fact that we could be subject to stockholder litigation related to our historical stock option granting practices and the related restatement of our consolidated financial statements;

	•		~~securities laws and regulations, including potential risk resulting from our evaluation of internal controls under the Sarbanes-Oxley Act of 2002;~~

	•		~~the risks associated with international operations;~~

	•		~~sales of software licenses are subject to seasonal changes in demand;~~

	•		~~increased debt and interest expense and lower availability on our financing facilities;~~

	•		~~increased exposure to currency exchange risks;~~

	•		~~our dependence on key personnel;~~

	•		~~risk that purchased goodwill or amortizable intangible assets become impaired;~~

	•		~~our failure to comply with the terms and conditions of our public sector contracts;~~

	•		~~risks associated with our very limited experience in outsourcing business functions to India;~~

	•		~~rapid changes in product standards; and~~

	•		~~intellectual property infringement claims.~~

exposure to currency exchange risks and volatility in the U.S. dollar exchange rate;

our dependence on key personnel;

risk that purchased goodwill or amortizable intangible assets become impaired;

failure to comply with the terms and conditions of our public sector contracts;

rapid changes in product standards; and

intellectual property infringement claims and challenges to our registered trademarks and trade names.

Additionally, there may be other risks that are otherwise described from time to time in the reports that we file with the SEC.

In addition, these forward-looking statements include statements regarding the informal inquiry commenced by the SEC and a stockholder’s demand to inspect our books and records pursuant to Section 220 of

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements.

INSIGHT ENTERPRISES, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)

(unaudited)


					March 31,		December 31,
	September 30,		December 31,		2008		2007
	2007		2006
ASSETS
Current assets:
Cash and cash equivalents	$	53,086	$	54,697	$	105,696	$	56,718
Accounts receivable, net of allowances for doubtful accounts of $22,884 and $23,211, respectively		814,444		994,892
Accounts receivable, net of allowances for doubtful accounts of $21,379 and $22,831, respectively						812,371		1,072,612
Inventories		102,232		97,751		88,869		98,863
Inventories not available for sale		17,414		31,112		27,251		21,450
Deferred income taxes		19,550		20,770		21,792		22,020
Other current assets		20,508		32,359		36,975		38,916

Total current assets		1,027,234		1,231,581		1,092,954		1,310,579

Property and equipment, net of accumulated depreciation of $102,786 and $91,589, respectively		156,893		145,778
Property and equipment, net of accumulated depreciation of $115,206 and $107,577, respectively						158,541		158,467
Goodwill		305,006		296,781		311,995		306,742
Intangible assets, net of accumulated amortization of $11,757 and $3,811, respectively		82,276		86,929
Intangible assets, net of accumulated amortization of $14,937 and $12,262, respectively						79,329		80,922
Deferred income taxes		396		927		181		392
Other long-term assets		18,832		18,269
Other assets						13,189		10,076

	$	1,590,637	$	1,780,265	$	1,656,189	$	1,867,178


LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	477,322	$	611,367	$	465,736	$	685,578
Accrued expenses and other current liabilities		93,385		136,401		113,057		113,891
Current portion of long-term debt		15,000		15,000		—		15,000
Deferred revenue		25,697		40,728		40,004		42,885
Line of credit		—		15,000

Total current liabilities		611,404		818,496		618,797		857,354

Long-term debt		152,000		224,250		203,500		187,250
Long-term deferred income taxes		26,121		25,517
Other long-term liabilities		28,911		21,652
Deferred income taxes						31,272		27,305
Other liabilities						20,339		20,075

		818,436		1,089,915		873,908		1,091,984


Commitments and contingencies (Note 9)
Commitments and contingencies (Note 10)

Stockholders’ equity:
Preferred stock, $0.01 par value, 3,000 shares authorized; no shares issued		—		—		—		—
Common stock, $0.01 par value, 100,000 shares authorized; 49,503 shares at September 30, 2007 and 48,868 shares at December 31, 2006 issued and outstanding		495		489
Common stock, $0.01 par value, 100,000 shares authorized; 48,169 shares at March 31, 2008 and 48,458 shares at December 31, 2007 issued and outstanding,						482		485
Additional paid-in capital		391,571		363,308		384,386		386,139
Retained earnings		335,219		297,664		343,086		340,641
Accumulated other comprehensive income – foreign currency translation adjustment		44,916		28,889
Accumulated other comprehensive income — foreign currency translation adjustments						54,327		47,929

Total stockholders’ equity		772,201		690,350		782,281		775,194

	$	1,590,637	$	1,780,265	$	1,656,189	$	1,867,178

INSIGHT ENTERPRISES, INC.

CONSOLIDATED STATEMENTS OF EARNINGS

(in thousands, except per share data)

(unaudited)


	Three Months Ended						Nine Months Ended						Three Months Ended
	September 30,						September 30,						March 31,
	2007			2006			2007			2006			2008			2007
Net sales	$	1,109,705		$	857,919		$	3,517,129		$	2,371,089		$	1,107,789		$	1,123,975
Costs of goods sold		959,859			744,590			3,029,295			2,058,508			954,634			970,800

Gross profit		149,846			113,329			487,834			312,581			153,155			153,175
Operating Expenses:
Selling and administrative expenses		130,820			88,211			398,902			243,850			132,954			129,758
Severance and restructuring expenses		—			729			2,841			729			1,900			—

Earnings from operations		19,026			24,389			86,091			68,002			18,301			23,417

Non-operating (income) expense:
Interest income		(1,509	)		(1,650	)		(5,803	)		(3,658	)		(601	)		(658	)
Interest expense		3,937			1,264			14,463			2,333			2,716			4,305
Net foreign currency exchange loss (gain)		849			(214	)		(2,807	)		(190	)
Net foreign currency exchange gain														(937	)		(654	)
Other expense, net		428			422			1,141			742			319			217

Earnings from continuing operations before income taxes		15,321			24,567			79,097			68,775			16,804			20,207
Income tax expense		6,225			7,857			30,896			23,454			6,284			7,911

Net earnings from continuing operations		9,096			16,710			48,201			45,321			10,520			12,296
Net earnings from discontinued operations, net of taxes of $0, $350, $111 and $2,174		—			530			171			3,486
Gain on sale of discontinued operations, net of taxes of $0, $0, $3,135 and $5,978		—			—			4,801			9,144

Net earnings from discontinued operations		—			530			4,972			12,630
Net earnings from a discontinued operation														—			4,972

Net earnings	$	9,096		$	17,240		$	53,173		$	57,951		$	10,520		$	17,268


Net earnings per share — Basic:
Net earnings from continuing operations	$	0.18		$	0.35		$	0.98		$	0.94		$	0.22		$	0.25
Net earnings from discontinued operations		—			0.01			0.10			0.26
Net earnings from a discontinued operation														—			0.10

Net earnings per share	$	0.18		$	0.36		$	1.08		$	1.20		$	0.22		$	0.35


Net earnings per share — Diluted:
Net earnings from continuing operations	$	0.18		$	0.34		$	0.97		$	0.94		$	0.22		$	0.25
Net earnings from discontinued operations		—			0.01			0.10			0.26
Net earnings from a discontinued operation														—			0.10

Net earnings per share	$	0.18		$	0.35		$	1.07		$	1.20		$	0.22		$	0.35


Shares used in per share calculations:
Basic		49,530			48,411			49,213			48,230			48,540			49,010

Diluted		50,711			48,658			49,801			48,375			48,905			49,291

INSIGHT ENTERPRISES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)


	Nine Months Ended September 30,						Three Months Ended March 31,
	2007			2006			2008			2007
Cash flows from operating activities:
Net earnings from continuing operations	$	48,201		$	45,321		$	10,520		$	12,296
Plus: net earnings from discontinued operations		4,972			12,630
Plus: net earnings from a discontinued operation								—			4,972

Net earnings		53,173			57,951			10,520			17,268
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization		25,960			14,819			8,464			8,913
Provision for losses on accounts receivable		1,725			2,101			668			884
Write-downs of inventories		5,744			6,892			1,697			1,654
Non-cash stock-based compensation		8,927			10,101			2,439			2,265
Gain on sale of discontinued operations		(7,937	)		(15,122	)
Gain on sale of discontinued operation								—			(7,937	)
Excess tax benefit from employee gains on stock-based compensation		(445	)		(1,035	)		(108	)		(41	)
Deferred income taxes		2,355			22,035			4,441			(2,676	)
Changes in assets and liabilities:
Decrease (increase) in accounts receivable		186,033			(10,538	)
(Increase) decrease in inventories		(2,509	)		25,399
Decrease (increase) in other current assets		12,704			(16,627	)
Decrease in accounts receivable								275,543			182,155
Decrease (increase) in inventories								2,554			(3,989	)
Decrease in other current assets								2,691			2,360
Increase in other assets		(1,944	)		(20,953	)		(195	)		(5,993	)
(Decrease) increase in accounts payable		(142,794	)		20,885
Decrease in inventories financing facility		—			(11,819	)
Decrease in accounts payable								(238,788	)		(135,422	)
Decrease in deferred revenue		(15,175	)		(3,193	)		(3,927	)		(12,768	)
(Decrease) increase in accrued expenses and other liabilities		(26,788	)		24,762
Increase (decrease) in accrued expenses and other liabilities								1,160			(7,294	)

Net cash provided by operating activities		99,029			105,658			67,159			39,379

Cash flows from investing activities:
Proceeds from sale of discontinued operations		28,631			46,500
Acquisition of Software Spectrum, net of cash acquired		—			(323,009	)
Proceeds from sale of a discontinued operation, net of direct expenses								(900	)		28,694
Purchases of property and equipment		(27,611	)		(26,383	)		(6,441	)		(8,376	)

Net cash provided by (used in) investing activities		1,020			(302,892	)
Net cash (used in) provided by investing activities								(7,341	)		20,318

Cash flows from financing activities:
Repayments on short-term financing facility		—			(45,000	)
Borrowings on long-term financing facility		540,000			202,000			122,000			121,000
Repayments on long-term financing facility		(601,000	)		(20,000	)		(117,000	)		(163,000	)
Borrowings on term loan		—			75,000
Repayments on term loan		(11,250	)		—			(3,750	)		(3,750	)
Net (repayments) borrowings on line of credit		(15,000	)		691
Net repayments on line of credit								—			(7,000	)
Proceeds from sales of common stock under employee stock plans								2,976			2,363
Excess tax benefit from employee gains on stock-based compensation		445			1,035			108			41
Proceeds from sales of common stock under employee stock plans		24,342			14,140
Repurchase of common stock		(22,336	)		—
Decrease in book overdrafts		(23,856	)		—
Payment of payroll taxes on stock-based compensation through shares withheld								(1,943	)		—
Repurchases of common stock								(14,999	)		—
Increase (decrease) in book overdrafts								458			(31,456	)

Net cash (used in) provided by financing activities		(108,655	)		227,866

Cash flows from discontinued operations:
Net cash used in operating activities		—			(8,885	)
Net cash provided by investing activities		—			11,710
Net cash used in financing activities		—			(2,696	)		(12,150	)		(81,802	)

Net cash provided by discontinued operations		—			129
Foreign currency exchange effect on cash flows								1,310			(432	)

Foreign currency exchange effect on cash flow		6,995			5,165

(Decrease) increase in cash and cash equivalents		(1,611	)		35,926
Increase (decrease) in cash and cash equivalents								48,978			(22,537	)
Cash and cash equivalents at beginning of period		54,697			35,145			56,718			54,697

Cash and cash equivalents at end of period	$	53,086		$	71,071		$	105,696		$	32,160

INSIGHT ENTERPRISES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1. Basis of Presentation and Recently Issued Accounting Pronouncements

We are a leading provider of brand-name information technology (“IT”) hardware, software and services to large enterprises, ~~small-to~~small- to medium-sized businesses (“SMB”) and public sector institutions in North America, Europe, the Middle East, Africa and Asia-Pacific. ~~We operate~~The Company is organized in the following three ~~reportable geographic~~ operating ~~segments: North America; EMEA (Europe, the Middle East and Africa); and APAC (Asia-Pacific).~~ segments, which are primarily defined by their related geographies:


Operating Segment		Geography
North America		United States and Canada

EMEA		Europe, Middle East and Africa

APAC		Asia-Pacific

Currently, our offerings in North America and the United Kingdom include brand-name IT hardware, software and services. Our offerings in the remainder of our EMEA segment and in APAC currently only include software and select software-related services.

~~The~~In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments necessary to present fairly our financial position as of ~~September 30, 2007,~~March 31, 2008, our results of operations for the three ended March 31, 2008 and ~~nine months ended September 30,~~ 2007 ~~and 2006~~ and our cash flows for the ~~nine~~three months ended ~~September 30, 2007~~March 31, 2008 and ~~2006.~~2007. The consolidated balance sheet as of December 31, ~~2006~~2007 was derived from the audited consolidated balance sheet at such date. The accompanying unaudited consolidated financial statements and notes have been prepared in accordance with the rules and regulations promulgated by the Securities and Exchange Commission (“SEC”) and consequently do not include all of the disclosures normally required by United States generally accepted accounting principles (“GAAP”).

The results of operations for such interim periods are not necessarily indicative of results for the full year, due in part to the seasonal nature of the business. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements, including the related notes thereto, in our Annual Report on Form ~~10-K/A~~10-K for the year ended December 31, ~~2006.~~2007.

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements. Additionally, these estimates and assumptions affect the reported amounts of net sales and expenses during the reported period. Actual results could differ from those estimates. On an on-going basis, we evaluate our estimates, including those related to allowances for doubtful accounts, write-downs of inventories, litigation-related obligations, valuation allowances for deferred tax assets and impairment of goodwill if indicators of potential impairment exist.

The consolidated financial statements include the accounts of Insight Enterprises, Inc. and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. References to “the Company,” “we,” “us,” “our” and other similar words refer to Insight Enterprises, Inc. and its consolidated subsidiaries, unless the context suggests otherwise.

Recently Issued Accounting Pronouncements

~~There~~Other than the partial adoption of Statement of Financial Accounting Standard No. 157 “Fair Value Measurements” (“SFAS No. 157”) effective January 1, 2008, as discussed in Note 8, there have been no material changes or additions to the recently issued accounting pronouncements as previously reported in Note 1 to our Consolidated Financial Statements in Part II, Item 8 of our Annual Report on Form ~~10-K/A~~10-K for the year ended December 31, ~~2006~~2007 which affect ~~the Company’s~~or may affect our financial statements.

INSIGHT ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

2. Net Earnings from Continuing Operations Per Share (“EPS”)

Basic EPS is computed by dividing net earnings from continuing operations available to common stockholders by the weighted-average number of common shares outstanding during each quarter. Diluted EPS ~~includes~~is computed on the basis of the weighted average number of shares of common stock plus the effect of ~~stock options assumed to be exercised and restricted stock~~dilutive potential common shares outstanding during the period using the treasury stock method. Dilutive potential common shares include outstanding stock options, restricted stock awards and restricted stock units. A reconciliation of the denominators of the basic and diluted EPS calculations ~~is as~~ follows (in thousands, except per share data):


	Three Months Ended				Nine Months Ended				Three Months Ended
	September 30,				September 30,				March 31,
	2007		2006		2007		2006		2008		2007
Numerator:
Net earnings from continuing operations	$	9,096	$	16,710	$	48,201	$	45,321	$	10,520	$	12,296


Denominator:
Weighted-average shares used to compute basic EPS		49,530		48,411		49,213		48,230		48,540		49,010
Dilutive potential common shares due to dilutive options and restricted stock, net of tax effect		1,181		247		588		145		365		281

Weighted-average shares used to compute diluted EPS		50,711		48,658		49,801		48,375		48,905		49,291


Net earnings from continuing operations per share:
Basic	$	0.18	$	0.35	$	0.98	$	0.94	$	0.22	$	0.25

Diluted	$	0.18	$	0.34	$	0.97	$	0.94	$	0.22	$	0.25

INSIGHT ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

As of January 1, 2007 (the date we adopted FIN 48) and September 30, 2007, the Company had approximately $10,300,000 and $13,300,000, respectively, of unrecognized tax benefits. Of these amounts, approximately $1,500,000 and $2,400,000, respectively, relate to accrued interest.

Our policy to classify interest and penalties relating to uncertain tax positions as a component of income tax expense in our consolidated statement of earnings did not change as a result of implementing the provisions of FIN 48.

As of January 1, 2007, if recognized, $1,100,000 of the liability associated with uncertain tax positions would affect the Company’s effective tax rate. The remaining $9,200,000 balance arose from business combinations that, if recognized, ultimately would be recorded as an adjustment to goodwill or a receivable with no effect on the Company’s effective tax rate.

Several of our subsidiaries, including most U.S. subsidiaries, are currently under audit for various tax years between 2002 and 2005. It is reasonably possible that the examination phase of some of these audits may conclude in the next 12 months and that the related unrecognized tax benefits for certain tax positions will significantly decrease. However, based on the status of the examinations, an estimate of the range of reasonably possible outcomes cannot be made at this time.

We, including our subsidiaries, file income tax returns in the U.S. federal jurisdiction, and many state and local and non-U.S. jurisdictions. In the U.S., federal income tax returns for 2004 ~~and 2005 are currently under examination. Any subsequent years~~through 2007 remain open to examination. For U.S. state and local as well as non-U.S. jurisdictions, the statute of limitations generally varies between three and 10ten years.

6. Severance, Restructuring and Acquisition Integration Activities

Severance Costs Expensed in 2008

During the three months ended March 31, 2008, North America, EMEA and APAC recorded severance expense related to on-going restructuring efforts to reduce operating expenses related to support functions. The following table details the changes in these liabilities during the three months ended March 31, 2008 (in thousands):


	North America			EMEA			APAC			Consolidated
Severance costs	$	1,009		$	869		$	22		$	1,900
Cash payments		(566	)		(259	)		(12	)		(837	)

Balance at March 31, 2008	$	443		$	610		$	10		$	1,063

All remaining outstanding obligations are expected to be paid during the year ending December 31, 2008 and are therefore included in accrued expenses and other current liabilities.

Severance Costs Expensed in 2007

During the year ended December 31, 2007, North America, EMEA and APAC recorded severance expense of $2,960,000, $177,000 and $64,000, respectively, primarily associated with the retirement of our chief financial officer. Of the severance amounts expensed in 2007, EMEA paid $177,000 during 2007. The following table details the changes in these liabilities during the three months ended March 31, 2008 (in thousands):


	North America			APAC			Consolidated
Balance at December 31, 2007	$	2,960		$	64		$	3,024
Cash payments		(118	)		(33	)		(151	)

Balance at March 31, 2008	$	2,842		$	31		$	2,873

All remaining outstanding obligations are expected to be paid during the year ending December 31, 2008 and are therefore included in accrued expenses and other current liabilities.

Acquisition-Related ~~Cost~~Costs Capitalized in 2006 as a Cost of Acquisition of Software Spectrum

~~During the year ended December 31,~~In 2006, we recorded $9,738,000 of employee termination ~~costs~~benefits and $1,676,000 of facility based costs in connection with ~~our~~the integration of Software ~~Spectrum, of which $10,525,000 was still accrued at December 31, 2006.~~Spectrum. These costs were accounted for under EITF Issue No. 95-3, “Recognition of Liabilities in Connection with Purchase Business Combinations,” and were based on the integration plans that ~~have been~~were committed to by management. Accordingly, these costs were recognized as a liability assumed in the purchase business combination and included in the allocation of the ~~purchase price~~cost to acquire Software Spectrum.

The employee termination ~~costs~~benefits relate to severance payments for Software Spectrum teammates in North America and EMEA who have been or will be terminated in connection with integration plans. The facilities based costs relate to future lease payments or lease termination costs associated with vacating certain Software Spectrum facilities in EMEA.

~~The following table details the changes in these liabilities during the nine months ended September 30, 2007 (in thousands):~~

North America EMEA Consolidated
Balance at December 31, 2006 $ 997 $ 9,528 $ 10,525
Foreign currency translation adjustments — 506 506
Cash payments (394 ) (4,760 ) (5,154 )

Balance at September 30, 2007 $ 603 $ 5,274 $ 5,877

INSIGHT ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

~~Severance~~The following table details the changes in these liabilities during the three months ended March 31, 2008 (in thousands):

North America EMEA Consolidated
Balance at December 31, 2007 $ 543 $ 4,395 $ 4,938
Foreign currency translation adjustments — 224 224
Cash payments (38 ) (41 ) (79 )

Balance at March 31, 2008 $ 505 $ 4,578 $ 5,083

In the accompanying consolidated balance sheet at March��31, 2008, $2,469,000 is expected to be paid in 2008 and ~~restructuring activities expensed~~is therefore included in accrued expenses and other current liabilities, and $2,614,000 is expected to be paid after 2008 and is therefore included in other liabilities (long-term).

Restructuring Costs Expensed in 2005

During the year ended December 31, 2005, ~~our EMEA operations~~Insight UK moved into a new facility ~~in the United Kingdom~~ and recorded facilities-based restructuring costs of ~~$7,458,000, of which $6,447,000 represented~~$7,458,000.

The following table details the ~~present value of~~changes in this liability during the remaining lease obligations on the previous lease and $1,011,000 represented duplicate rent expense for the new facility for the last half of 2005. At December 31, 2006, the balance of these restructuring accruals was $6,468,000. During the ninethree months ended September 30, 2007, adjustments of $157,000 and $158,000 were recorded to reflect the accretion of interest for the present value of the remaining lease obligations and fluctuations in the British pound sterling exchange rates, respectively. Cash payments of $3,543,000 were made during the nine months ended September 30, 2007, resulting in an accrual balance of $3,240,000 at September 30, 2007. March 31, 2008 (in thousands):

EMEA
Balance at December 31, 2007 $ 2,425
Adjustments 27
Cash payments (408 )

Balance at March 31, 2008 $ 2,044

In the accompanying consolidated balance sheet at ~~September 30, 2007, all amounts are~~March 31, 2008, the remaining accrual of $2,044,000 is expected to be paid ~~within the next year~~in 2008 and ~~are~~is therefore included in accrued expenses and other current liabilities.

7. Stock-Based Compensation

~~On January 1, 2006, we adopted Statement of Financial Accounting Standards No. 123 (revised 2004), “~~~~Share Based Payment~~” (“SFAS No. 123R”), which requires stock-based compensation to be measured based on the fair value of the award on the date of grant and the corresponding expense to be recognized over the period during which an employee is required to provide service in exchange for the award. In March 2005, the SEC issued Staff Accounting Bulletin No. 107, “~~Share-Based Payment~~” (“SAB No. 107”), relating to SFAS No. 123R. We have applied the provisions of SAB No. 107 in our adoption of SFAS No. 123R. Prior to January 1, 2006, we issued stock options and restricted stock shares. After January 1, 2006, we have elected to issue service-based and performance-based restricted stock units (“RSUs”) instead of stock options and restricted stock shares.

We recorded the following pre-tax amounts for stock-based compensation, by operating segment, in our consolidated financial statements (in thousands):

Three Months Ended Nine Months Ended
September 30, September 30,
2007 2006 2007 2006
North America $ 2,889 $ 2,567 $ 7,754 $ 8,253
EMEA 612 263 1,456 831
APAC 45 — 83 —

Total Continuing Operations $ 3,546 $ 2,830 $ 9,293 $ 9,084

Discontinued Operations $ — $ — $ — $ 1,017

~~Accounting for Stock Options After SFAS No. 123R Implementation~~

There were no stock options granted during the three months ended September 30, 2007 or 2006, and we do not currently plan to grant any stock options in 2007. The current expense for all outstanding stock options granted prior to January 1, 2006, net of estimated forfeitures, has been recognized in our consolidated statements of earnings for the three and nine months ended September 30, 2007 and 2006. Forfeitures were estimated and will be revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

For the three months ended September 30, 2007 and 2006, we recorded in continuing operations stock-based compensation expense related to stock options, net of forfeitures, of $1,024,000 and $1,867,000, respectively. For the nine months ended September 30, 2007 and 2006, we recorded in continuing operations stock-based compensation expense related to stock options, net of forfeitures, of $3,065,000 and $6,494,000, respectively. Included in these amounts for the three and nine months ended September 30, 2007 is $281,000 and $366,000, respectively, of cash payments made in May through August 2007 to teammates whose stock options expired during the period that registration statements for our stock plans were suspended. As of September 30, 2007, total

Three Months Ended
March 31,
2008 2007
North America $ 1,652 $ 1,886
EMEA 735 365
APAC 52 14

Total $ 2,439 $ 2,265

INSIGHT ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

Stock Options

For the three months ended March 31, 2008 and 2007, we recorded stock-based compensation expense related to stock options, net of an estimate of forfeitures, of $538,000 and $1,267,000, respectively, in continuing operations. As of March 31, 2008, total compensation cost related to nonvested stock options not yet recognized is ~~$1,098,000,~~$1,184,000, which is expected to be recognized over the next ~~0.37~~1.31 years on a weighted-average basis.

We used the criteria in SFAS No. 123R to calculate and establish the beginning balance of the additional paid-in capital pool (“APIC pool”) related to the tax effects of employee stock-based compensation and to determine the subsequent effect on the APIC pool and consolidated statements of cash flows of the tax effects of employee stock-based compensation awards that were outstanding upon adoption of SFAS No. 123R.

The following table summarizes our stock option activity during the three months ended ~~September 30, 2007:~~March 31, 2008:


								Weighted									Weighted
								Average									Average
						Aggregate		Remaining							Aggregate		Remaining
	Number			Weighted Average		Intrinsic Value		Contractual		Number			Weighted Average		Intrinsic Value		Contractual
	Outstanding			Exercise Price		(in-the-money options)		Life (in years)		Outstanding			Exercise Price		(in-the-money options)		Life (in years)
Outstanding at the beginning of period		4,814,327		$	19.18						3,621,130		$	19.33
Granted		—		$	—						—			—
Exercised		(1,245,782	)	$	18.82	$	6,063,187				(333,283	)		14.76	$	1,035,202

Expired		(33,992	)	$	13.18						(522,063	)		21.97
Forfeited		(8,665	)	$	19.88						(20,058	)		18.62

Outstanding at the end of period		3,525,888		$	19.37	$	22,995,110		2.14		2,745,726			19.39	$	502,205		1.85

Exercisable at the end of period		2,617,956		$	19.38	$	17,121,804		2.12		2,233,544			19.62	$	495,123		1.57

Vested and expected to vest		3,497,853		$	19.37	$	22,806,761		0.09		2,708,580			19.41	$	501,981		1.84

INSIGHT ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

~~vested. Recipients~~On January 23, 2008, the Compensation Committee of ~~RSUs do not have voting or dividend rights until~~our Board of Directors approved a special long-term incentive award for the ~~vesting conditions are satisfied~~Chief Executive Officer, the President of our North America/APAC operating segments and ~~shares are released.~~the President of our EMEA operating segment. The approved grant level targets were as follows:

~~Starting in 2006, we have elected to issue service-based and performance-based RSUs instead of stock options and restricted stock shares.~~
• Richard A. Fennessy, President and Chief Executive Officer — 300,000 RSUs;
• Mark T. McGrath, President, North America/APAC — 150,000 RSUs; and
• Stuart A. Fenton, President, EMEA — 100,000 RSUs.

The ~~number of RSUs ultimately awarded under~~plan provides for the ~~performance-based RSUs will vary based on whether we achieve certain financial results. We will record compensation expense each period based on our estimate of the most probable number~~award of RSUs that will be issued ~~under~~based upon achievement of specific stock price hurdles within specific timeframes (the 20-day average closing price of Insight stock must be at or above a stock price hurdle and within the ~~grants~~defined timeframes for any tranche to be awarded):

	•		20% awarded if stock price hurdle of $25.00 is achieved by February 15, 2009;

	•		30% awarded if stock price hurdle of $30.00 is achieved between February 16, 2009 and February 15, 2010; and

	•		50% awarded if stock price hurdle of $35.00 is achieved between February 16, 2010 and February 15, 2011.

If all or some hurdles are not achieved, 33% of ~~performance-based RSUs. Additionally,~~ the ~~compensation expense is adjusted~~remaining award (i.e., any shares not issued for ~~our estimate~~achievement of ~~forfeitures.~~

the stock price hurdles set forth above) will be made on February 15, 2013, assuming continued employment. Vesting of the RSUs awarded will occur 50% at the time of the award and 50% on the first anniversary of the award date. If a change in control as defined in the 2007 Omnibus Plan occurs, all units that have been issued by achievement of stock price hurdles will automatically vest, and units that have not been issued will be forfeited. For the three months ended ~~September 30, 2007 and 2006,~~March 31, 2008, we recorded ~~in continuing operations~~ stock-based compensation expense ~~net of forfeitures,~~ related to ~~restricted stock shares and~~these RSUs of $2,522,000 and $963,000, respectively. For the nine months ended September 30, 2007 and 2006, we recorded in continuing operations stock-based compensation expense, net of forfeitures, related to restricted stock shares and RSUs of $6,228,000 and $2,590,000, respectively.$193,000. As of ~~September 30, 2007,~~March 31, 2008, total compensation cost ~~related to nonvested restricted stock shares and RSUs~~ not yet recognized related to these RSUs was $6,246,000 of the $36,134,000 total discussed above. Such compensation expense is ~~$8,354,000, which is expected to be~~being recognized over the ~~next 0.83 years on a weighted-average basis.~~period January 2008 through February 2014.

The following table summarizes our restricted stock activity, including restricted stock shares and RSUs, during the three months ended ~~September 30, 2007:~~March 31, 2008:

Weighted Average
Grant Date Fair
Number Value Fair Value
Nonvested at the beginning of period 1,353,770 $ 20.72
Granted — $ —
Vested (43,199 ) $ 20.69 $ 1,029,864 ^(a)

Forfeited (37,987 ) $ 20.73

Nonvested at the end of period 1,272,584 $ 20.72 $ 32,845,393 ^(b)

Expected to vest 1,150,113 $ 29,684,416 ^(b)

Weighted Average
Number Grant Date Fair Value Fair Value
Nonvested at the beginning of period 1,108,857 $ 20.29
Granted 1,349,344 15.87
Vested, including shares withheld to cover taxes (381,470 ) 20.43 $ 6,943,685 ^(a)

Forfeited (51,710 ) 20.16

Nonvested at the end of period 2,025,021 17.31 $ 35,437,867 ^(b)

Expected to vest 1,641,671 $ 28,729,242 ^(b)


^(a)		The fair value of vested restricted stock shares and RSUs represents the total pre-tax fair value, based on the closing stock price on the day of vesting, which would have been received by holders of restricted stock shares and RSUs had all such holders sold their underlying shares on that date.

^(b)		The aggregate fair value of the nonvested restricted stock shares and the RSUs expected to vest represents the total pre-tax fair value, based on our closing stock price of ~~$25.81~~$17.50 as of ~~September 30, 2007,~~March 31, 2008, which would have been received by holders of restricted stock shares and RSUs had all such holders sold their underlying shares on that date.

During the three months ended March 31, 2008, the RSUs that vested for teammates in the United States were net-share settled such that we withheld shares with value equivalent to the teammates’ minimum statutory United States tax obligation for the applicable income and other employment taxes and remitted the cash to the appropriate taxing authorities. The total shares withheld during the three months ended March 31, 2008 of 274,792 was based on the value of the RSUs on their vesting date as determined by our closing stock price on such date. For the three months ended March 31, 2008, total payments for the employees’ tax obligations to the taxing authorities were $1,943,000 and are reflected as a financing activity within the Consolidated Statements of Cash Flows. These net-share settlements had the effect of repurchases of common stock as they reduced and retired the number of shares that would have otherwise been issued as a result of the vesting and did not represent an expense to us.

INSIGHT ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

8. Fair Value Measurements

In September 2006, FASB issued SFAS No. 157, which provides guidance for determining fair value to measure assets and liabilities. The standard also responds to investors’ requests for more information about (1) the extent to which companies measure assets and liabilities at fair value, (2) the information used to measure fair value, and (3) the effect that fair-value measurements have on earnings. SFAS No. 157 will apply whenever another standard requires (or permits) assets or liabilities to be measured at fair value. The standard does not expand the use of fair value to any new circumstances. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. On February 12, 2008, the FASB issued FASB Staff Position (“FSP”) FAS 157-2, which delays the effective date of SFAS No. 157 for all nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually), until fiscal years beginning after November 15, 2008 and interim periods within those fiscal years for items within the scope of the FSP.

Our partial adoption of SFAS No. 157 on January 1, 2008, for financial assets and liabilities and for nonfinancial assets or liabilities that are measured on a recurring basis, did not have any effect on our consolidated financial statements. As of March 31, 2008, we have no nonfinancial assets or liabilities that are measured on a recurring basis and our financial assets or liabilities generally consist of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses and other current liabilities. The estimated fair values of our cash and cash equivalents is determined based on quoted prices in active markets for identical assets. The fair value of the other financial assets and liabilities is based on the value that would be received or paid in an orderly transaction between market participants and approximates the carrying value due to their nature and short duration.

9. Share Repurchase Program

On ~~January 26, 2006,~~November 14, 2007, we announced that our Board of Directors had authorized the purchase of up to $50,000,000 of our common ~~stock.~~stock through September 30, 2008. During the three months ended ~~September 30, 2007,~~March 31, 2008, we purchased in open market transactions ~~887,000~~867,900 shares of our common stock at a total cost of ~~$22,336,026~~$14,998,997 (an average price of ~~$25.18~~$17.28 per share). All shares repurchased have been retired as of ~~September 30, 2007 have been retired.~~March 31, 2008. Subsequent to ~~September 30, 2007,~~March 31, 2008 through May 5, 2008, we repurchased ~~the remainder~~an additional $20,631,539 of the ~~$50.0 million~~$50,000,000 of common stock authorized under the program. ~~The~~During 2008, the total ~~repurchase~~repurchases under this program through May 5, 2008 represented approximately ~~1.96 million~~2,324,300 shares at an average price of ~~$25.57~~$15.33 per share.

9.10. Commitments and Contingencies

Contractual

~~We have entered~~In July 2007, we signed a statement of work with a third party that was engaged to assist us in integrating into our IT system our hardware, services and software distribution operations in the U.S., Canada, EMEA and APAC. During the quarter ended March 31, 2008, we renegotiated the contract to include a ~~sponsorship agreement through 2013~~new scope of work, whereby we agreed to engage the third party on current and future IT related projects. As a result of this renegotiation, previously reported commitments as of December 31, 2007 totaling $14,400,000 over the next two years were settled with a $3,100,000 payment made in April 2008. The new commitments approximate $4,000,000 over the ~~Valley of the Sun Bowl Foundation, d/b/a Insight Bowl, which is the not-for-profit entity that conducts the Insight Bowl post-season intercollegiate football game. We have committed~~next 18 to ~~pay an aggregate amount of approximately $9,650,000 through 2013 for sponsorship arrangements, ticket purchases and miscellaneous expenses.~~24 months.

INSIGHT ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

We have committed to pay the Arizona Cardinals an aggregate amount of approximately $9,900,000 through February 2014 for advertising and marketing events at the University of Phoenix stadium, the home of the Arizona Cardinals.

In July 2007, we signed a Statement of Work with Wipro Limited (“Wipro”) to assist us in integrating our hardware, services and software distribution operations in U.S., Canada, EMEA and APAC on mySAP. We have committed to pay Wipro an aggregate amount of approximately $17,350,000 based on certain milestones in 2007 through 2009, as set forth in the Statement of Work.

Employment Contracts

We have employment contracts with certain officers and management teammates under which severance payments would become payable and accelerated vesting of stock-based compensation would occur in the event of specified terminations without cause or terminations under certain circumstances after a change in control. If such persons were terminated without cause or under certain circumstances after a change of control, and the severance payments under the current employment agreements were to become payable, the severance payments would generally ~~be equal~~range from three months of the teammate’s salary up to ~~either one or~~ two times the ~~teammates’~~teammate’s annual salary and bonus. ~~Additionally, we would record additional compensation expense for the acceleration of the vesting of any stock-based compensation.~~

On May 2, 2007, we announced the retirement of Stanley Laybourne, the Company’s chief financial officer, secretary and treasurer and a member of our Board of Directors. In connection with his retirement, we have agreed to provide him payments and benefits consistent with those required for termination without cause under his existing employment agreement. Accordingly, we expect to pay him a lump sum severance payment equal to two times his base salary plus two times his 2006 bonus. The total severance amount related to this retirement is estimated to be approximately $2,842,000, including non-cash stock-based compensation expense for a 90-day extension of the post termination exercise period for stock options, all of which was recorded as severance expense during the nine months ended September 30, 2007.

Guaranties

In the ordinary course of business, we may guarantee the indebtedness of our subsidiaries to vendors and clients. We have not recorded specific liabilities for these guaranties in the consolidated financial statements because we have recorded the underlying liabilities associated with the guaranties. In the event we are required to perform under the related contracts, we believe the cost of such performance would not have a material adverse effect on our consolidated financial position or results of operations.

Indemnifications

InFrom time to time, in the ordinary course of business, we enter into contractual arrangements under which we ~~may~~ agree to indemnify either our ~~client~~clients or a third-party service ~~provider~~providers in the arrangement from certain losses incurred relating to services performed on our behalf or for losses arising from defined events, which may include litigation or claims relating to past performance. These arrangements include, but are not limited to, ~~our indemnification of our officers and directors to the maximum extent under the laws of the State of Delaware,~~ the indemnification of our ~~lessors~~landlords for certain claims arising from our use of leased facilities, and the indemnification of the lenders that provide our credit facilities for certain claims arising from their extension of credit to us. Such indemnification obligations may not be subject to maximum loss clauses. Management believes that payments, if any, related to these indemnifications are not probable at September 30, 2007 and, if incurred, would be immaterial. Accordingly, we have not accrued any liabilities related to such indemnifications in our consolidated interim financial statements.

~~INSIGHT ENTERPRISES, INC.~~
~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~
~~(unaudited)~~

In connection with our sale of Direct Alliance in June 2006, the sale agreement contains certain indemnification provisions pursuant to which we are required to indemnify the buyer for a limited period of time for liabilities, losses or expenses arising out of breaches of covenants and certain breaches of representations and warranties relating to the condition of the business prior to and at the time of sale. ~~Management believes that payments related to these indemnifications, if any, are not probable at September 30, 2007 and, if incurred, would not be material.~~

The sale agreement for our sale of PC Wholesale in March 2007 contains certain indemnification provisions pursuant to which we are required to indemnify the buyer for a limited period of time for liabilities, losses or expenses arising out of breaches of covenants and certain breaches of representations and warranties relating to the condition of the business prior to and at the time of sale.

Management believes that payments, if any, related to these indemnifications ~~if any,~~ are not probable at ~~September 30, 2007~~March 31, 2008 and, if incurred, would not be material. Accordingly, we have not accrued any liabilities related to such indemnifications in our consolidated financial statements.

Legal Proceedings

We are party to various legal proceedings arising in the ordinary course of business, including ~~asserted~~ preference payment claims asserted in client bankruptcy proceedings, claims of alleged infringement of patents, trademarks, copyrights and other intellectual property rights, ~~and~~ claims of alleged non-compliance with contract ~~provisions.~~provisions and claims related to alleged violations of laws and regulations.

INSIGHT ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

In accordance with SFAS No. 5, “Accounting for Contingencies” (“SFAS No. 5”), we make a provision for a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These provisions are reviewed at least quarterly and are adjusted to reflect the effects of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to a particular claim. Although litigation is inherently unpredictable, we believe that we have adequate provisions for ~~any~~ probable and estimable losses. It is possible, nevertheless, that the results of our operations or cash flows could be materially and adversely affected in any particular period by the resolution of a legal proceeding. Legal expenses related to defense, negotiations, settlements, rulings and advice of outside legal counsel are expensed as incurred.

In October 2006, we received a letter of informal inquiry from the SEC requesting certain documents relating to our historical stock option grants and practices. We have cooperated with the SEC and will continue to do so. We cannot predict the outcome of this inquiry.

~~In June 2006, our subsidiary,~~ Software Spectrum, Inc., was named as a defendant in a civil lawsuit, Allocco v. Gardner (Superior Court, County of San Diego), regarding certain software resale transactions with Peregrine Systems, Inc. (“Peregrine”). The subsidiary was named as successor to Corporate Software & Technology, Inc. (“CS&T”), and the complaint alleges that during October 2000 CS&T participated in or aided and abetted a fraudulent scheme by Peregrine to inflate Peregrine’s stock price. Pursuant to the terms of the agreement by which we acquired Software Spectrum, Inc. from Level 3 Communications, Inc. (“Level 3”, the former corporate parent of Software Spectrum, Inc.), Level 3 has agreed to indemnify, defend and hold us harmless for this matter. The discovery process is on-going, and the defendant strongly disputes any allegations of participation in fraudulent behavior. On our behalf, Level 3 is vigorously defending this matter.

~~Software Spectrum, Inc., also~~ as successor to CS&T, is party to litigation brought in the Belgian courts regarding a dispute over the terms of a tender awarded by the Belgian Ministry of Defence (“MOD”) in November 2000. In February 2001, CS&T brought a breach of contract suit against MOD in the Court of First Instance in Brussels and claimed breach of contract damages in the amount of approximately $150,000. MOD counterclaimed against CS&T for cost to cover in the amount of approximately $2,700,000, and, in July 2002, CS&T added a Belgian subsidiary of Microsoft as a defendant. We believe that MOD’s counterclaims are unfounded, and we have filed a defense to the counterclaim. The proceedings are currently stayed. We cannot make an estimate of the possible loss or range of loss, if any, related to this claim.

On March 10, 2008, TeleTech Holdings, Inc. (“Teletech”) sent us a demand for arbitration pursuant to the Stock Purchase Agreement (“SPA”) entered into between the parties, whereby TeleTech acquired Direct Alliance Corporation (“DAC”), a former subsidiary of Insight, effective June 30, 2006. TeleTech claims that it is entitled to a $5,000,000 “clawback” under the SPA relating to the non-renewal of an agreement between DAC and one of its clients. We dispute Teletech’s allegations and intend to vigorously ~~defending~~defend this matter. In recording the ~~claim.~~disposition of DAC on June 30, 2006, we deferred $5,000,000 as a contingent gain on sale related to this clawback. As such, amounts paid to Teletech under the clawback provision, if any, would not have any effect on our results of operations.

~~INSIGHT ENTERPRISES, INC.~~
~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~
~~(unaudited)~~As previously disclosed, on April 1, 2008, we completed the acquisition of Calence pursuant to an agreement and plan of merger (the “Merger Agreement”), a related support agreement (the “Support Agreement”) and other ancillary agreements. In April 2008, in connection with an investigation being conducted by the United States Department of Justice (the “DOJ”), Calence received a subpoena from the Office of the Inspector General of the Federal Communications Commission (the “FCC”) requesting documents related to the award, by the Universal Service Administration Company (“USAC”), of funds under the E-Rate program to a participating school district. The E-Rate program provides schools and libraries with discounts to obtain affordable telecommunications and internet access. No allegations have been made against Calence, and we are cooperating with the FCC, USAC and the DOJ and are in the process of responding to the subpoena. Pursuant to the Merger Agreement and the Support Agreement, the former owners of Calence have agreed to indemnify us for certain damages that may arise out of or result from this matter, including our fees and expenses for responding to the subpoena.

Contingencies Related to Third-Party Review

From time to time, we are subject to potential claims and assessments from third parties. We are also subject to various governmental, client and vendor audits. We continually assess whether or not such claims have merit and warrant accrual under the “probable and estimable” criteria of SFAS No. 5. Where appropriate, we accrue estimates of anticipated liabilities in the consolidated financial statements. Such estimates are subject to change and may affect our results of operations and our cash flows.

~~10. Discontinued Operations~~INSIGHT ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

~~PC Wholesale~~11. Discontinued Operation

On March 1, 2007, we completed the sale of PC Wholesale, a division of our North America operating ~~segment that sells to other resellers.~~segment. The ~~transaction generated proceeds of $28.7 million, including~~ net assets sold ~~that are subject to certain post-closing adjustments. We expect to have resolution~~generated net cash proceeds of $27,794,000. For the ~~post-closing adjustments by~~three months ended March 31, 2007, the ~~end of 2007, which may result in additional~~ gain ~~recorded~~ on ~~the sale. The~~ sale of PC Wholesale ~~is consistent with our strategic plan~~of $7,937,000, $4,801,000 net of taxes, and PC Wholesale’s earnings during the quarter of $282,000, $171,000 net of taxes, are classified as a discontinued operation. In the fourth quarter of 2007, we ~~concluded that selling IT products to other resellers is not~~resolved certain post-closing contingencies and recognized an additional gain on the sale of PC Wholesale of $350,000, $264,000 net of taxes. This resolution required a ~~core element~~cash payment of ~~our growth strategy.~~$900,000 during the first quarter of 2008.

In accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” (“SFAS No. 144”), ~~we have accounted for PC Wholesale as a discontinued operation, and~~ we have reported the results of operations of PC Wholesale as a discontinued operation in the consolidated statements of earnings for all periods presented. We did not allocate interest general corporate overhead expense or non-specific vendor funding to the discontinued operation. PC Wholesale’s accounts receivable and inventory was approximately $15.0 million and $6.0 million, respectively, at December 31, 2006. Other assets and liabilities of PC Wholesale included in the consolidated balance sheets as of December 31, 2006 were not material.

The following amounts for the three and nine months ended September 30, 2007 and 2006, respectively, represent PC Wholesale’s results of operations. The following amounts have been segregated from continuing operations and reflected as a discontinued operation (in thousands):

Three Months Ended Nine Months Ended
September 30, September 30,
2007 2006 2007 2006
Net sales $ — $ 60,673 $ 30,142 $ 173,510
Costs of goods sold — 58,451 29,092 167,235

Gross profit — 2,222 1,050 6,275
Selling and administrative expenses — 1,342 768 3,966

Earnings from discontinued operation before income taxes — 880 282 2,309
Income tax expense — 350 111 916

Net earnings from discontinued operation $ — $ 530 $ 171 $ 1,393

~~Direct Alliance~~

On June 30, 2006, we completed the sale of 100% of the outstanding stock of Direct Alliance for a purchase price of $46,500,000, subject to a working capital adjustment. The purchase price did not include real estate and intercompany receivables, which had an estimated fair value of $49,400,000 (book value of $43,237,000) and were distributed to us immediately prior to closing. In addition to payment of the purchase price, the buyer is obligated to make a one-time bonus payment to us if Direct Alliance achieves certain gross profit levels for the year ended December 31, 2006 (“Earn Out”). Additionally, the buyer is entitled to a claw

~~INSIGHT ENTERPRISES, INC.~~
~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~
~~(unaudited)~~

back of the purchase price of up to $5,000,000 if certain Direct Alliance client contracts are not renewed on terms prescribed in the sale agreement. The Company is in the process of negotiating the final resolution of the Earn Out and the claw back, which may result in additional gain recorded on the sale. Additionally, on June 30, 2006, we paid $2,696,000 to the holders of 1,997,500 exercised Direct Alliance stock options. If additional gain is recorded on the sale as a result of final resolution of the Earn Out and clawback, additional amounts will also be paid to the holders of 1,997,500 exercised Direct Alliance stock options.

In accordance with SFAS No. 144, we have reported the results of operations of Direct Alliance as a discontinued operation in the consolidated statements of earnings for all periods presented. We did not allocate interest or general corporate overhead expense to the discontinued operation.

~~11.~~12. Segment Information

We operate in three reportable geographic operating segments: North America; EMEA; and APAC. Currently, our offerings in North America and the United Kingdom include brand-name IT hardware, software and services. Our offerings in the remainder of our EMEA segment and in APAC currently only include software and select software-related services.

~~Statement of Financial Accounting Standards~~SFAS No. 131, “Disclosure About Segments of an Enterprise and Related Information” (“SFAS No. 131”), requires disclosures of certain information regarding operating segments, products and services, geographic areas of operation and major clients. The method for determining what information to report under SFAS No. 131 is based upon the “management approach,” or the way that management organizes the operating segments within a company, for which separate financial information is evaluated regularly by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources. Our CODM is our Chief Executive Officer.

All intercompany transactions are eliminated upon consolidation, and there are no differences between the accounting policies used to measure profit and loss for our segments and on a consolidated basis. Net sales are defined as net sales to external clients. None of our clients exceeded ten percent of consolidated net sales for the three ~~and nine~~ months ended ~~September 30, 2007.~~March 31, 2008.

A portion of our operating segments’ selling and administrative expenses arise from shared services and infrastructure that we have historically provided to them in order to realize economies of scale and to use resources efficiently. These expenses, collectively identified as corporate charges, include senior management expenses, internal audit, legal, tax, insurance services, treasury and other corporate infrastructure expenses. Charges are allocated to our operating segments, and the allocations have been determined on a basis that we considered to be a reasonable reflection of the utilization of services provided to or benefits received by the operating segments.

INSIGHT ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

The tables below present information about our reportable operating segments as of and for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2008 and 2007 ~~and 2006~~ (in thousands):

Three Months Ended September 30, 2007
North America EMEA APAC Consolidated
Net sales $ 817,747 $ 264,679 $ 27,279 $ 1,109,705
Costs of goods sold 708,729 228,965 22,165 959,859

Gross profit 109,018 35,714 5,114 149,846
Operating expenses:
Selling and administrative expenses 93,742 33,165 3,913 130,820

Earnings from operations $ 15,276 $ 2,549 $ 1,201 $ 19,026

Non-operating expense, net 3,705

Earnings from continuing operations before income taxes 15,321
Income tax expense 6,225

Net earnings from continuing operations 9,096
Net earnings from discontinued operations —

Net earnings $ 9,096

Total assets $ 2,198,755 $ 393,211 $ 39,393 $ 1,590,637 *

Three Months Ended March 31, 2008
North America EMEA APAC Consolidated
Net sales $ 766,424 $ 318,222 $ 23,143 $ 1,107,789
Costs of goods sold 662,409 272,847 19,378 954,634

Gross profit 104,015 45,375 3,765 153,155
Operating expenses:
Selling and administrative expenses 91,219 37,552 4,183 132,954
Severance and restructuring expenses 1,009 869 22 1,900

Earnings from operations $ 11,787 $ 6,954 $ (440 ) 18,301

Non-operating expense, net 1,497

Earnings from continuing operations before income taxes 16,804
Income tax expense 6,284

Net earnings from continuing operations 10,520
Net earnings from a discontinued operation —

Net earnings $ 10,520

Total assets at period end $ 2,241,799 $ 455,927 $ 44,456 $ 1,656,189 *


*		Consolidated total assets include corporate assets and intercompany eliminations for a net reduction of ~~$1,040,722.~~$1,085,993.

Three Months Ended September 30, 2006
North America EMEA APAC Consolidated
Net sales $ 694,284 $ 157,115 $ 6,520 $ 857,919
Costs of goods sold 603,360 135,702 5,528 744,590

Gross profit 90,924 21,413 992 113,329
Operating expenses:
Selling and administrative expenses 70,023 17,481 707 88,211
Severance and restructuring expenses 508 221 — 729

Earnings from operations $ 20,393 $ 3,711 $ 285 24,389

Non-operating income, net (178 )

Earnings from continuing operations before income taxes 24,567
Income tax expense 7,857

Net earnings from continuing operations 16,710
Net earnings from discontinued operations 530

Net earnings $ 17,240

Total assets $ 1,909,860 $ 327,299 $ 32,466 $ 1,536,585 *

Three Months Ended March 31, 2007
North America EMEA APAC Consolidated
Net sales $ 777,201 $ 327,376 $ 19,398 $ 1,123,975
Costs of goods sold 665,285 288,905 16,610 970,800

Gross profit 111,916 38,471 2,788 153,175
Operating expenses:
Selling and administrative expenses 94,770 32,011 2,977 129,758

Earnings from operations $ 17,146 $ 6,460 $ (189 ) 23,417

Non-operating expense, net 3,210

Earnings from continuing operations before income taxes 20,207
Income tax expense 7,911

Net earnings from continuing operations 12,296
Net earnings from a discontinued operation 4,972

Net earnings $ 17,268

Total assets at period end $ 1,974,243 $ 420,658 $ 32,201 $ 1,554,963 *


*		Consolidated total assets include corporate assets and intercompany eliminations for a net reduction of ~~$733,040.~~$872,139.

INSIGHT ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

Nine Months Ended September 30, 2007
North America EMEA APAC Consolidated
Net sales $ 2,518,847 $ 923,958 $ 74,324 $ 3,517,129
Costs of goods sold 2,163,724 804,733 60,838 3,029,295

Gross profit 355,123 119,225 13,486 487,834
Operating expenses:
Selling and administrative expenses 289,605 98,646 10,651 398,902
Severance and restructuring expenses 2,841 — — 2,841

Earnings from operations $ 62,677 $ 20,579 $ 2,835 86,091

Non-operating expense, net 6,994

Earnings from continuing operations before income taxes 79,097
Income tax expense 30,896

Net earnings from continuing operations 48,201
Net earnings from discontinued operations 4,972

Net earnings $ 53,173

Total assets $ 2,198,755 $ 393,211 $ 39,393 $ 1,590,637 *

13. Subsequent Event

On April 1, 2008, we completed the acquisition of Calence for a cash purchase price of $125,000,000, plus a preliminary working capital adjustment of $4,000,000, net of cash acquired, subject to final post-closing adjustments. Up to an additional $35,000,000 of purchase price consideration may be due if Calence achieves certain performance targets over the next four years. We have also assumed existing debt totaling approximately $7,400,000, of which $7,100,000 was repaid by us at closing. In addition, on April 1, 2008, we entered into a new five-year $300,000,000 senior revolving credit facility, which replaced our existing $75,000,000 revolving credit facility and our term loan facility. The Calence acquisition was funded, in part, using borrowings under the new facility.


*		~~Consolidated total assets include corporate assets and intercompany eliminations for a net reduction of $1,040,722.~~

Nine Months Ended September 30, 2006
North America EMEA APAC Consolidated
Net sales $ 1,972,186 $ 392,383 $ 6,520 $ 2,371,089
Costs of goods sold 1,717,031 335,949 5,528 2,058,508

Gross profit 255,155 56,434 992 312,581
Operating expenses:
Selling and administrative expenses 197,105 46,038 707 243,850
Severance and restructuring expenses 508 221 — 729

Earnings from operations $ 57,542 $ 10,175 $ 285 68,002

Non-operating income, net (773 )

Earnings from continuing operations before income taxes 68,775
Income tax expense 23,454

Net earnings from continuing operations 45,321
Net earnings from discontinued operations 12,630

Net earnings $ 57,951

Total assets $ 1,909,860 $ 327,299 $ 32,466 $ 1,536,585 *


*		~~Consolidated total assets include corporate assets and intercompany eliminations for a net reduction of $733,040.~~

INSIGHT ENTERPRISES, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion should be read in conjunction with the consolidated financial statements and the related notes that appear elsewhere in this Quarterly Report onForm 10-Q.

Quarterly Overview

Currently, our offerings in North America and the United Kingdom include brand name IT hardware, software and services. Our offerings in the remainder of our EMEA segment and in APAC currently only include software and select software-related services.

~~Net~~On a consolidated basis, net sales for the three months ended ~~September 30,~~March 31, 2008 decreased 1% to $1.1 billion compared to the three months ended March 31, 2007, ~~increased 29% to $1.11 billion~~while gross profit remained flat at $153.2 million in both periods. Net earnings from ~~$857.9 million~~continuing operations for the three months ended ~~September 30, 2006, due primarily to an increase in software sales attributable~~March 31, 2008 decreased 14% and diluted earnings per share from continuing operations decreased 12% compared to the ~~acquisition~~three months ended March 31, 2007. Results of ~~Software Spectrum. Net earnings~~operations for the three months ended ~~September 30, 2007 decreased 47%~~March 31, 2008 include the effect of severance and restructuring expenses of $1.9 million, $1.1 million net of tax, related to ~~$9.1 million from $17.2 million~~on-going restructuring efforts within the Company. Results of continuing operations for the three months ended September 30, 2006, and diluted earnings per share decreased to $0.18 for the three months ended September 30, 2007 from $0.35 for the three months ended September 30, 2006. Net earnings and diluted earnings per share for the three months ended September 30,March 31, 2007 include expenses of ~~$2.5~~$5.7 million, ~~$1.5~~$3.5 million net of tax, for professional fees associated with our stock option review.

Net sales in North America decreased 1% to $766.4 million primarily due to a softer U.S. IT market and a double digit decrease year over year in our net sales to SMB clients, as we continued to address certain integration issues with our system upgrade that commenced in the second half of 2007. Gross margin in North America decreased by approximately 80 basis points from the first quarter of 2007 primarily due to lower net sales to SMB clients, which are generally conducted at higher gross margins, and decreases in product margins, including vendor funding, primarily driven by market pricing pressures. Earnings from operations in North America were $5.4 million lower than the first quarter of 2007. These 2008 results include $1.0 million in severance and restructuring expenses, while the first quarter 2007 results include $5.2 million in professional fees and costs associated with our stock option review. Thus, excluding the effects of the stock option review, ~~(for further discussion see Note 2~~our North American results were substantially lower in the first quarter of 2008 compared to the first quarter of 2007.

Net sales in EMEA decreased 3% to $318.2 million reflecting a decline in hardware sales in the United Kingdom partially offset by the foreign currency benefit of the weak U.S. dollar compared to the various European currencies in which we do business. Within the United Kingdom, while the market conditions are challenging and show signs of continued weakness going into the second quarter, we believe that the majority of the net sales decline in the first quarter was related to internal sales execution issues early in the quarter. We addressed these issues immediately, and, as a result, saw stronger results in March compared to the first two months of the quarter. Additionally, in the United Kingdom (the largest market in our ~~Consolidated Financial Statements~~EMEA segment) there were two less shipping days in ~~Part II, Item 8~~the quarter compared to the first quarter of ~~our Annual Report~~last year. Gross margin in EMEA increased to 14.3% from 11.8% in the first quarter of last year resulting from strong software category performance and a continued migration to fee based software programs. Earnings from operations in the EMEA segment increased 8% compared to the first quarter of 2007 to $7.0 million reflecting higher gross profit partially offset by increases in selling and administrative expenses from increased headcount and severance expenses of $869,000.

Net sales in APAC increased 19% to $23.1 million with gross margin on ~~Form 10-K/A for the year ended December 31, 2006)~~these sales of 16.3%. ~~Net earnings and diluted earnings per share for~~The loss from operations in this segment during the three months ended ~~September 30, 2006 include severance~~March 31, 2008 of $440,000 reflected the typical seasonality of this business and ~~restructuring expenses~~the hiring of ~~$729,000, $454,000 net of tax, associated with the elimination of Insight positions as part of our integration and expense reduction plans.~~

~~Net sales for the nine months ended September 30, 2007 increased 48% to $3.52 billion from $2.37 billion for the nine months ended September 30, 2006, due primarily to an increase in~~incremental experienced software sales ~~attributable to~~and support teammates in this segment during the acquisition of Software Spectrum. Net earnings for the nine months ended September 30, 2007 decreased 8% to $53.2 million from $58.0 million for the nine months ended September 30, 2006 and diluted earnings per share decreased to $1.07 for the nine months ended September 30, 2007 from $1.20 for the nine months ended September 30, 2006. Net earnings and diluted earnings per share for the nine months ended September 30, 2007 include the following items:quarter.

INSIGHT ENTERPRISES, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)

	•		~~gain on sale of a discontinued operation of $7.9 million, $4.8 million net of tax;~~

	•		~~expenses of $12.5 million, $7.6 million net of tax, for professional fees associated with our stock option review; and~~

	•		~~$2.8 million, $1.7 million net of tax, for severance expense.~~

Net earnings and diluted earnings per share for the nine months ended September 30, 2006 include the gain on the sale of a discontinued operation of $15.1 million, $9.1 million net of tax, and severance and restructuring expenses of $729,000, $454,000 net of tax, associated with the elimination of Insight positions as part of our integration and expense reduction plans.

~~Overviews of each of our operating segments are discussed below and reconciliations~~Reconciliations of segment results of operations to consolidated results of operations can be found in Note 1112 to ~~our~~the Consolidated Financial Statements ~~provided~~ in Part I, Item 1 of this report.

On April 1, 2008, we completed the acquisition of Calence, LLC (“Calence”), one of the nation’s largest independent technology solutions providers specializing in Cisco networking solutions, advanced communications and managed services, for a cash purchase price of $125.0 million, plus a preliminary working capital adjustment of $4.0 million, net of cash acquired, subject to final post-closing adjustments. Up to an additional $35.0 million of purchase price consideration may be due if Calence achieves certain performance targets over the next four years. We have also assumed existing debt totaling approximately $7.4 million, of which $7.1 million was repaid by us at closing. This acquisition is consistent with our vision and strategy to become a global value added reseller (“G-VAR”) through continued investment in certain key technology categories, including networking and advanced communications.

Our discussion and analysis of financial condition and results of operations is intended to assist in the understanding of our consolidated financial statements, the changes in certain key items in those consolidated

~~INSIGHT ENTERPRISES, INC.~~
~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION~~
~~AND RESULTS OF OPERATIONS (continued)~~

financial statements from ~~year~~period to ~~year~~period and the primary factors that contributed to those changes, as well as how certain critical accounting estimates affect our ~~consolidated financial statements.~~Consolidated Financial Statements.

~~Our North America net sales increased 18% from $694.3 million~~Updated Guidance

Given the challenges that we faced during the first quarter and the uncertain macro-economic outlook for 2008, we are updating the forward looking statements that we disclosed in our Annual Report on Form 10-K for the year ended December 31, 2007. We expect full-year diluted earnings per share to be between $1.50 and $1.60 with approximately 50% coming in the ~~three months ended September 30, 2006 to $817.7 million in~~first half of the ~~three months ended September 30, 2007, due primarily to an increase in software sales attributable to the acquisition of Software Spectrum. We experienced a significant, but seasonal, decline in~~year. This estimate includes no severance, restructuring or other one-time charges. Our outlook reflects our software sales during the three months ended September 30, 2007 as compared to the three months ended June 30, 2007. Year-over-year software growth was 64%, due primarily to the acquisition of Software Spectrum, and we grew hardware sales by 5% and services sales by 42% over the prior year. Also included in our North America segment results was $2.5 million, $1.5 million net of tax, of professional fees associated with our stock option review. Overall, North America earnings from operations decreased 25% from $20.4 millionexpectations at this time for the ~~three months ended September 30, 2006 to $15.3 million for~~balance of 2008, but the ~~three months ended September 30, 2007.~~

~~Our EMEA operations recognized net sales~~factors that ~~were up from $157.1 million~~could affect performance are numerous, and short-term results in the three months ended September 30, 2006 to $264.7 million in the three months ended September 30, 2007, due primarily to the acquisition of Software Spectrum. EMEA was also affected by the significant, but seasonal, decline in software sales during the three months ended September 30, 2007 as compared to the three months ended June 30, 2007 but posted strong results across the hardwarethis difficult economy will be more volatile and services categories. Within EMEA, during the three months ended September 30, 2007, our software category grew 183%, due primarily to the acquisition of Software Spectrum, hardware sales grew 16%, and services grew 226% over the prior year. Overall EMEA earnings from operations decreased 31% from $3.7 million for the three months ended September 30, 2006 to $2.5 million for the three months ended September 30, 2007.

Our APAC segment continues to perform very well and contributed net sales of $27.3 million, gross profit of $5.1 million and earnings from operations of $1.2 million for the three months ended September 30, 2007. Although this operating segment, which was added as a result of the acquisition of Software Spectrum in September 2006, represents a small percentage of our consolidated results, we continue to be excited about the growth opportunities this region brings.

Software Spectrum’s results of operations are included in our consolidated results of operations after the close of the acquisition on September 7, 2006. In the last 23 days of September 2006, Software Spectrum contributed $97.7 million in net sales and $2.4 million in earnings from operations to our consolidated results.unpredictable than usual.

Critical Accounting Estimates

General

Our consolidated financial statements have been prepared in accordance with ~~United States~~U.S. generally accepted accounting principles (“GAAP”). For a summary of significant accounting policies, see Note 1 to the Consolidated Financial Statements in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2007. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, net sales ~~costs of goods sold~~ and expenses. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. ~~Members of our senior management have discussed the development, selection and disclosure of these estimates with the Audit Committee of our Board of Directors.~~ Actual results, however, may differ from estimates we have made. Members of our senior management have discussed the critical accounting estimates and related disclosures with the Audit Committee of our Board of Directors.

Impairment of Goodwill

SFAS No. 142, “Goodwill and Other Intangible Assets,” requires that goodwill be tested for impairment at the reporting unit level on an annual basis and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying value. Multiple valuation techniques can be used to assess the fair value of the reporting unit. All of these techniques include the use of estimates and assumptions that are unpredictable and inherently uncertain. Changes in these estimates and assumptions could materially affect the determination of fair value and/or goodwill impairment. The Company has three reporting units which are equivalent to our operating segments. At March 31, 2008, our goodwill balance was $312.0 million, which represents the purchase price in excess of the net amount assigned to assets acquired and liabilities assumed by Insight in connection with previous acquisitions, adjusted for changes in foreign currency exchange rates. We tested goodwill for impairment during the fourth quarter of 2007. At that time, we concluded that the fair value of each of our reporting units was in excess of the carrying value. Our next annual impairment test is scheduled to be performed in the fourth quarter of 2008.

INSIGHT ENTERPRISES, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)

In ~~addition~~consideration of the current market conditions in which we operate and the decline in our overall market capitalization resulting from decreases in the market price of Insight’s publicly traded common stock, we evaluated whether events (“triggering events”) had occurred during the first quarter that would require us to perform an interim period goodwill impairment test in accordance with SFAS No. 142. It was our conclusion that as of the end of the first quarter no triggering events had occurred as there had been no events or changes in circumstances which we believe would more likely than not reduce the fair value of our reporting units below their respective carrying values. However, a sustained significant decline in our stock price subsequent to March 31, 2008 could indicate a triggering event has occurred and require us to perform an interim period goodwill impairment test in accordance with SFAS No. 142. This could result in us recording a non-cash charge for a partial or total impairment of our goodwill balance. This non-cash charge would not impact our cash balance, debt covenant compliance or ongoing financial performance.

There have been no other changes to the items disclosed as critical accounting estimates in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form ~~10-K/A~~10-K for the year ended December 31, ~~2006,~~2007.

RESULTS OF OPERATIONS

The following table sets forth for the periods presented certain financial data as a percentage of net sales for the three months ended March 31, 2008 and 2007. As discussed in Note 11 to the Consolidated Financial Statements in Part I, Item 1 of this report, we ~~adopted Financial Accounting Standards Board (“FASB”) Interpretation No. 48, “~~~~Accounting~~have reported the results of operations of PC Wholesale, which we sold on March 1, 2007, along with the gain on sale of PC Wholesale, as a discontinued operation in the Consolidated Statements of Earnings for ~~Uncertainty in Income Taxes — an interpretation of FASB Statement No. 109” (“FIN 48”) on January 1, 2007. FIN 48 clarifies~~ the ~~accounting and reporting for uncertainties in income tax~~three months ended March 31, 2007:

Three Months Ended
March 31,
2008 2007

Net sales 100.0 % 100.0 %
Costs of goods sold 86.2 86.4

Gross profit 13.8 13.6
Selling and administrative expenses 12.0 11.5
Severance and restructuring expenses 0.2 —

Earnings from operations 1.6 2.1
Non-operating expense, net 0.1 0.3

Earnings from continuing operations before income taxes 1.5 1.8
Income tax expense 0.6 0.7

Net earnings from continuing operations 0.9 1.1
Net earnings from a discontinued operation — 0.4

Net earnings 0.9 % 1.5 %

INSIGHT ENTERPRISES, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)

law. This interpretation prescribes a comprehensive model for the financial statement recognition, measurement, presentation and disclosure of uncertain tax positions taken or expected to be taken in income tax returns.

~~RESULTS OF OPERATIONS~~

~~The following table sets forth for the periods presented certain financial data as a percentage of net sales for the three and nine months ended September 30, 2007 and 2006:~~

Three Months Ended Nine Months Ended
September 30, September 30,
2007 2006 2007 2006
Net sales 100.0 % 100.0 % 100.0 % 100.0 %
Costs of goods sold 86.5 86.8 86.1 86.8

Gross profit 13.5 13.2 13.9 13.2
Selling and administrative expenses 11.8 10.3 11.3 10.3
Severance and restructuring expenses — 0.1 0.1 —

Earnings from operations 1.7 2.8 2.5 2.9
Non-operating (income) expense:
Interest income (0.1 ) (0.2 ) (0.2 ) (0.1 )
Interest expense 0.3 0.1 0.4 0.1
Net foreign currency exchange loss (gain) 0.1 — (0.1 ) —
Other expense, net — — 0.1 —

Earnings from continuing operations before income taxes 1.4 2.9 2.3 2.9
Income tax expense 0.6 1.0 0.9 1.0

Net earnings from continuing operations 0.8 1.9 1.4 1.9
Net earnings from discontinued operations — 0.1 0.1 0.5

Net earnings 0.8 % 2.0 % 1.5 % 2.4 %

Net Sales. Net sales for the three months ended ~~September 30, 2007 increased 29%~~March 31, 2008 decreased 1% compared to ~~$1.11 billion from $857.9 million for~~ the three months ended ~~September 30, 2006. The increase in sales is due primarily to an increase in software sales following the acquisition of Software Spectrum on September 7, 2006.~~March 31, 2007. Our net sales by operating segment were as follows (dollars in thousands):


	Three Months Ended							Nine Months Ended							Three Months Ended
	September 30,				%			September 30,				%			March 31,				%
	2007		2006		Change			2007		2006		Change			2008		2007		Change
North America	$	817,747	$	694,284		18	%	$	2,518,847	$	1,972,186		28	%	$	766,424	$	777,201		(1	%)
EMEA		264,679		157,115		69	%		923,958		392,383		135	%		318,222		327,376		(3	%)
APAC		27,279		6,520		318	%		74,324		6,520		1,040	%		23,143		19,398		19	%

Consolidated	$	1,109,705	$	857,919		29	%	$	3,517,129	$	2,371,089		48	%
Consolidated.															$	1,107,789	$	1,123,975		(1	%)

INSIGHT ENTERPRISES, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)

~~2007 from $613,000 for the three months ended September 30, 2006, excluding the 23 calendar days of Software Spectrum’s results during the three months ended September 30, 2006.~~

The increase in EMEA net sales for the three and nine months ended September 30, 2007 compared to the same periods in 2006 is due primarily to an increase in software sales attributable to the September 2006 acquisition of Software Spectrum, which was only included for 23 calendar days in the three and nine months ended September 30, 2006. EMEA was also affected by the significant, but seasonal, decline in software sales during the three months ended September 30, 2007 as compared to the three months ended June 30, 2007 but posted strong results across the hardware and services categories. Within EMEA, for the three months ended September 30, 2007, our software category grew 183%, due primarily to the acquisition of Software Spectrum, hardware sales grew 16%, and services grew 226% over the prior year. EMEA had 530 account executives at September 30, 2007, an increase from 291 at September 30, 2006 due primarily to the acquisition of Software Spectrum. Net sales per account executive in EMEA increased 16% to $517,000 for the three months ended September 30, 2007 from $446,000 for the three months ended September 30, 2006, excluding the 23 calendar days of Software Spectrum’s results during the three months ended September 30, 2006.

APAC’s net sales for the three months ended September 30, 2007 were $27.3 million. We were pleased with the results of our APAC segment which continues to overachieve against internal expectations.

~~Percentage of net sales by category for North America, EMEA and APAC were as follows for the three months ended September 30, 2007 and 2006:~~

North America EMEA APAC
Three Months Ended Three Months Ended Three Months Ended
September 30, September 30, September 30,
Sales Mix 2007 2006 2007 2006 2007 2006
Notebooks and PDAs 12 % 13 % 11 % 15 % — —
Desktops and Servers 12 % 14 % 9 % 12 % — —
Network and Connectivity 12 % 13 % 5 % 7 % — —
Storage Devices 6 % 8 % 4 % 7 % — —
Printers 6 % 7 % 4 % 6 % — —
Memory and Processors 4 % 5 % 2 % 3 % — —
Supplies and Accessories 4 % 6 % 4 % 6 % — —
Monitors and Video 5 % 5 % 5 % 7 % — —
Miscellaneous 7 % 7 % 3 % 5 % — —

Hardware 68 % 78 % 47 % 68 % — —
Software 29 % 20 % 52 % 31 % 100 % 100 %
Services 3 % 2 % 1 % 1 % — —

100 % 100 % 100 % 100 % 100 % 100 %

~~INSIGHT ENTERPRISES, INC.~~
~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION~~
~~AND RESULTS OF OPERATIONS (continued)~~

~~Percentage of net sales by category for North America, EMEA and APAC were as follows for the nine months ended September 30, 2007 and 2006:~~

North America EMEA APAC
Nine Months Ended Nine Months Ended Nine Months Ended
September 30, September 30, September 30,
Sales Mix 2007 2006 2007 2006 2007 2006
Notebooks and PDAs 11 % 13 % 9 % 16 % — —
Desktops and Servers 12 % 15 % 7 % 13 % — —
Network and Connectivity 11 % 15 % 4 % 8 % — —
Storage Devices 6 % 8 % 4 % 7 % — —
Printers 5 % 7 % 4 % 8 % — —
Memory and Processors 4 % 5 % 2 % 4 % — —
Supplies and Accessories 5 % 7 % 4 % 7 % — —
Monitors and Video 5 % 6 % 4 % 8 % — —
Miscellaneous 6 % 6 % 2 % 6 % — —

Hardware 65 % 82 % 40 % 77 % — —
Software 32 % 15 % 60 % 22 % 100 % 100 %
Services 3 % 3 % <1 % 1 % — —

100 % 100 % 100 % 100 % 100 % 100 %

In general, we continue to experience declines in average selling prices for most of our hardware product categories, which requires us to sell more units in order to maintain or increase the level of sales. With the acquisition of Software Spectrum, our product mix changed significantly as noted above, with software representing a much greater percentage of our net sales. Currently, our offerings in North America and the United Kingdom include brand name IT hardware, software and services. Our offerings in the remainder of our EMEA segment and in APAC currently only include software and select software-related services.

~~Gross Profit.~~~~The increase~~ Beginning in sales of software licenses for which we receive only an agency fee, as well as sales of software maintenance contracts and third-party warranties for which only the gross profit is recorded as net sales, makes period-to-period comparability of net sales and costs of goods sold more difficult. As a result, we believe that gross profit is a more reliable measure of business performance and is more useful in comparing period-to-period trends than net sales. Gross profit increased 32% to $149.8 million for the three months ended ~~September 30, 2007 from $113.3 million~~March 31, 2008, we have combined servers with storage in reporting our sales mix and are reporting desktops separately to conform with how we internally analyze our results. All prior period information has been reclassified for comparative purposes.

Gross Profit. Gross profit was flat compared to the three months ended ~~September 30, 2006, due primarily to the acquisition of Software Spectrum. As~~March 31, 2007, with a ~~percentage of net sales,~~slight increase in gross profit increased to 13.5% for the three months ended September 30, 2007 from 13.2% for the three months ended September 30, 2006. Gross profit increased 56% to $487.8 million for the nine months ended September 30, 2007 from $312.6 million for the nine months ended September 30, 2006, due primarily to the acquisition of Software Spectrum. As a percentage of net sales, gross profit increased to 13.9% for the nine months ended September 30, 2007 from 13.2% for the nine months ended September 30, 2006.

margin. Our gross profit and gross profit as a percentage of net sales by operating segment for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2008 and 2007 ~~and 2006~~ were as follows (dollars in thousands):


	Three Months Ended September 30,										Nine Months Ended September 30,										Three Months Ended March 31,
			% of					% of					% of					% of					% of Net					% of Net
			Net					Net					Net					Net			2008		Sales			2007		Sales
	2007		Sales			2006		Sales			2007		Sales			2006		Sales
North America	$	109,018		13.3	%	$	90,924		13.1	%	$	355,123		14.1	%	$	255,155		12.9	%	$	104,015		13.6	%	$	111,916		14.4	%
EMEA		35,714		13.5	%		21,413		13.6	%		119,225		12.9	%		56,434		14.4	%		45,375		14.3	%		38,471		11.8	%
APAC		5,114		18.7	%		992		15.2	%		13,486		18.1	%		992		15.2	%		3,765		16.3	%		2,788		14.4	%

Consolidated	$	149,846		13.5	%	$	113,329		13.2	%	$	487,834		13.9	%	$	312,581		13.2	%	$	153,155		13.8	%	$	153,175		13.6	%

INSIGHT ENTERPRISES, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)

North America’s gross profit increased for the three months ended September 30, 2007 by 20% to $109.0 million from $90.9 million for the three months ended September 30, 2006. Gross profit per account executive decreased 1% from $82,000 for the three months ended September 30, 2006, excluding the 23 calendar days of Software Spectrum’s results, to $81,000 for the three months ended September 30, 2007. As a percentage of net sales, gross profit increased to 13.3% for the three months ended September 30, 2007 from 13.1% for the three months ended September 30, 2006 due primarily to increases in agency fees for Microsoft enterprise software agreement renewals offset partially by decreases in product margin, which includes vendor funding, and decreases in freight margin. North America’s gross profit increased for the nine months ended September 30, 2007 by 39% to $355.1 million from $255.2 million for the nine months ended September 30, 2006. As a percentage of net sales, gross profit increased to 14.1% for the nine months ended September 30, 2007 from 12.9% for the nine months ended September 30, 2006 due primarily to increases in agency fees for Microsoft enterprise software agreement renewals, decreases in inventory write-downs and increases in the sales of services. These increases were offset partially by decreases in product margin, which includes vendor funding, decreases in freight margin and decreases in supplier discounts.

EMEA’s gross profit increased for the three months ended September 30, 2007 by 67% to $35.7 million from $21.4 million for the three months ended September 30, 2006. Gross profit per account executive increased 9% from $64,000 for the three months ended September 30, 2006, excluding the 23 calendar days of Software Spectrum’s results, to $70,000 for the three months ended September 30, 2007. As a percentage of net sales, gross profit decreased to 13.5% for the three months ended September 30, 2007 from 13.6% for the three months ended September 30, 2006 due primarily to decreases in product margin, which includes vendor funding, and decreases in freight margin. These decreases in gross margin were offset partially by increases in agency fees for Microsoft enterprise software agreement renewals. EMEA’s gross profit increased for the nine months ended September 30, 2007 by 111% to $119.2 million from $56.4 million for the nine months ended September 30, 2006. As a percentage of net sales, gross profit decreased to 12.9% for the nine months ended September 30, 2007 from 14.4% for the nine months ended September 30, 2006 due primarily to decreases in product margin, which includes vendor funding, decreases in supplier discounts and decreases in freight margin. These decreases in gross margin were offset partially by increases in agency fees for Microsoft enterprise software agreement renewals.

APAC reported gross profit of $5.1 million and $13.5 million for the three and nine months ended September 30, 2007, respectively. As a percentage of net sales, gross profit was 18.7% and 18.1% for the three and nine months ended September 30, 2007, respectively.

Operating Expenses.

Selling and Administrative Expenses.Selling and administrative expenses increased inapproximately 3% for the ~~2007 periods~~three months ended March 31, 2008 compared to the ~~2006 periods due primarily to the acquisition of Software Spectrum.~~three months ended March 31, 2007. Selling and administrative expenses as a percent of net sales by operating segment for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2008 and 2007 ~~and 2006~~ were as follows (dollars in thousands):


	Three Months Ended September 30,										Nine Months Ended September 30,
			% of					% of					% of					% of			Three Months Ended March 31,
			Net					Net					Net					Net					% of Net					% of Net
	2007		Sales			2006		Sales			2007		Sales			2006		Sales			2008		Sales			2007		Sales
North America	$	93,742		11.5	%	$	70,023		10.1	%	$	289,605		11.5	%	$	197,105		10.0	%	$	91,219		11.9	%	$	94,770		12.2	%
EMEA		33,165		12.5	%		17,481		11.1	%		98,646		10.7	%		46,038		11.7	%		37,552		11.8	%		32,011		9.8	%
APAC		3,913		14.3	%		707		10.8	%		10,651		14.3	%		707		10.8	%		4,183		18.1	%		2,977		15.3	%

Consolidated	$	130,820		11.8	%	$	88,211		10.3	%	$	398,902		11.3	%	$	243,850		10.3	%	$	132,954		12.0	%	$	129,758		11.5	%

INSIGHT ENTERPRISES, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)

~~North America selling and administrative expenses increased 34% to $93.7 million~~Interest Expense.Interest expense for the three months ended ~~September 30,~~March 31, 2008 and 2007 ~~from $70.0 million for the three months ended September 30, 2006 due primarily to:~~

	•		~~increases in salaries and wages of approximately $15.2 million due mainly to the acquisition of Software Spectrum;~~

	•		~~$2.5 million in professional fees associated with our stock option review; and~~

	•		~~amortization of intangible assets acquired with the acquisition of Software Spectrum of $1.3 million.~~

North America selling and administrative expenses increased 47% to $289.6 million for the nine months ended September 30, 2007 from $197.1 million for the nine months ended September 30, 2006 due primarily to:

	•		increases in salaries and wages of approximately $56.5 million due mainly to the acquisition of Software Spectrum, increases in sales incentive programs and increases in bonus expenses due to increased overall financial performance;

	•		~~$12.5 million in professional fees associated with our stock option review;~~

	•		~~amortization of intangible assets acquired with the acquisition of Software Spectrum of $4.5 million; and~~

	•		~~other integration-related expenses, such as travel and professional fees.~~

North America’s selling and administrative expenses as a percentage of net sales increased for the three and nine months ended September 30, 2007 due primarily to Software Spectrum’s results being included for only part of September of 2006, the highest volume month of the quarter for the software business given the higher concentration of sales in the last month of each quarter. As such, the relationships between selling and administrative expenses to net sales in the 2006 periods were skewed.

EMEA selling and administrative expenses increased 90% to $33.2 million for the three months ended September 30, 2007 from $17.5 million for the three months ended September 30, 2006 due primarily to:

	•		increases in salaries and wages of $9.9 million, primarily resulting from the acquisition of Software Spectrum, increases in sales incentive plans and bonus expenses due to increased overall financial performance;

	•		~~increases in expenses of $2.5 million related to additional facilities resulting from the acquisition of Software Spectrum;~~

	•		~~amortization of intangible assets acquired with the acquisition of Software Spectrum of $782,000; and~~

	•		~~costs of $425,000 associated with the initial stages of our mySAP upgrade in EMEA that were not capitalizable.~~

EMEA selling and administrative expenses increased 114% to $98.6 million for the nine months ended September 30, 2007 from $46.0 million for the nine months ended September 30, 2006 due primarily to:

	•		increases in salaries and wages of approximately $34.7 million due mainly to the acquisition of Software Spectrum, increases in sales incentive plans and bonus expenses due to increased overall financial performance;

	•		~~increases in expenses of $6.1 million related to additional facilities resulting from the acquisition of Software Spectrum;~~

	•		~~amortization of intangible assets acquired with the acquisition of Software Spectrum of $1.8 million;~~

	•		~~$638,000 in professional fees associated with our stock option review;~~

	•		~~costs of $494,000 associated with the initial stages of our mySAP upgrade in EMEA that were not capitalizable; and~~

	•		~~other integration-related expenses, such as travel and professional fees.~~

~~INSIGHT ENTERPRISES, INC.~~
~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION~~
~~AND RESULTS OF OPERATIONS (continued)~~

EMEA’s selling and administrative expenses as a percentage of net sales increased for the three months ended September 30, 2007 due primarily to Software Spectrum’s results being included for only part of September of 2006, the highest volume month of the quarter for the software business given the higher concentration of sales in the last month of each quarter. As such, the relationship between selling and administrative expenses to net sales in the three months ended September 30, 2006 period was skewed. EMEA’s selling and administrative expenses as a percentage of net sales decreased for the nine months ended September 30, 2007 due primarily to the significant increase in net sales.

APAC’s selling and administrative expenses were $3.9 million and $10.7 million, respectively, for the three and nine months ended September 30, 2007. As a percentage of net sales, selling and administrative expenses were 14.3% for both the three and nine months ended September 30, 2007.

~~Severance and restructuring expenses.~~During the nine months ended September 30, 2007, severance expense of $2.8 million was recorded in our North America operating segment in connection with the retirement of our chief financial officer. During the three and nine months ended September 30, 2006, North America and EMEA recorded severance expense of $508,000 and $221,000, respectively, associated with the elimination of Insight positions as part of our integration and expense reduction plans.

~~Interest Income.~~Interest income of $1.5 million and $1.7 million for the three months ended September 30, 2007 and 2006, respectively, and $5.8 million and $3.7 million for the nine months ended September 30, 2007 and 2006, respectively, was generated through short-term investments. The increase in interest income is due to a generally higher level of cash available to be invested in short-term investments and increases in short-term interest rates earned on those investments during the three and nine months ended September 30, 2007.

~~Interest Expense.~~Interest expense of $3.9 million and $1.3 million for the three months ended September 30, 2007 and 2006, respectively, and $14.5 million and $2.3 million for the nine months ended September 30, 2007 and 2006, respectively, primarily relates to borrowings under our financing facilities. The ~~increase~~decrease in interest expense is due primarily to ~~increased~~decreases in interest rates and reductions in weighted average borrowings ~~outstanding~~outstanding. In conjunction with our refinancing of our existing term loan and revolving credit facility on April 1, 2008 discussed in Note 4 to the Consolidated Financial Statements in Part I, Item 1 if this report, we expect to record a loss on debt extinguishment of $591,000 in the ~~three and nine months ended September~~quarter ending June 30, ~~2007~~2008 to ~~fund the acquisition~~write off a portion of ~~Software Spectrum in September 2006 and increases in~~our debt issue costs to interest ~~rates.~~expense.

Net Foreign Currency Exchange ~~Loss (Gain)~~Gains. ~~Net~~These gains result from foreign currency exchange loss was $849,000 for the three months ended September 30, 2007 compared to a net foreign currency exchange gain of $214,000 for the three months ended September 30, 2006. Net foreign currency exchange gain was $2.8 million for the nine months ended September 30, 2007 compared to $190,000 for the nine months ended September 30, 2006. These net gains and losses result from fluctuations in foreign currency exchange rates for transactions, denominated in currencies other than the functional currency of the Insight business unit that is party to the transaction. Such transactions consist primarily of trade receivables and payables in the normal course of business, including intercompany balances that are not considered long-term in nature. The increase in the net foreign currency exchange ~~loss~~gain is due primarily to increases in the volume of business transacted outside of the U.S. and the continued decline in the value of the U.S. dollar against currencies we transact business in, most notably the weak U.S. dollar compared to the Euro during the three months ended September 30, 2007 is due to foreign currency transaction losses incurred in our APAC segment primarily resulting from the effect of the weakening U.S. Dollar to the Australian Dollar on the U.S. Dollar denominated receivables for our Australian operations. As compared to the three months ended June 30, 2007, there was a significant decrease in inter-currency transactions in EMEA and Canada, which had driven the prior quarter gain.March 31, 2008.

Other Expense, Net. Other expense, net, was $428,000 and $422,000 for the three months ended September 30, 2007 and 2006, respectively, and $1.1 million and $742,000 for the nine months ended September 30, 2007 and 2006, respectively. These amounts consistconsists primarily of bank fees associated with our financing facilities and cash ~~management.~~management and were not considered material during the three months ended March 31, 2008 or 2007.

Income Tax ~~Expense~~Expense.. Our effective tax rate from continuing operations for the three months ended ~~September 30, 2007 was 40.6% compared~~March 31, 2008 decreased to ~~32.0%~~37.4% from 39.1% for the three months ended ~~September 30, 2006.~~ March 31, 2007 primarily due to a decrease in non-deductible expenses related to executive compensation and a smaller increase in tax reserves for the three months ended March 31, 2008 compared to that recorded for the three months ended March 31, 2007.

Earnings from a Discontinued Operation. As discussed in Note 11 to the Consolidated Financial Statements in Part I, Item 1 of this report, we have reported the results of operations of PC Wholesale, which we sold on March 1, 2007, along with the gain on sale of PC Wholesale as a discontinued operation in the Consolidated Statements of Earnings for the three months ended March 31, 2007.

Liquidity and Capital Resources

The following table sets forth certain consolidated cash flow information for the three months ended March 31, 2008 and 2007 (in thousands):

Three Months Ended
March 31,
2008 2007

Net cash provided by operating activities $ 67,159 $ 39,379
Net cash (used in) provided by investing activities (7,341 ) 20,318
Net cash used in financing activities (12,150 ) (81,802 )
Foreign currency exchange effect on cash flow 1,310 (432 )

Increase (decrease) in cash and cash equivalents 48,978 (22,537 )
Cash and cash equivalents at beginning of period 56,718 54,697

Cash and cash equivalents at end of period $ 105,696 $ 32,160

Cash and Cash Flow

Our primary uses of cash in the past few years have been to fund acquisitions, working capital requirements and capital expenditures and to repurchase our common stock. We generated very strong operating cash flows for the three months ended March 31, 2008. Operating activities provided $67.2 million in cash, a 71% increase over the three months ended March 31, 2007. Our strong operating cash flows enabled us to fund $15.0 million of repurchases of our common stock during the quarter and increase our cash balance by $49.0 million. Capital expenditures were $6.4 million for the quarter, a 23% decrease over the three months ended March 31, 2007, primarily related to expenditures for our system upgrade. Additionally, the three months ended March 31, 2008 benefited from a $1.3 million positive effect of foreign currency exchange rates on cash flow.

INSIGHT ENTERPRISES, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)

We sold PC Wholesale in March 2007 and have presented it as a discontinued operation. Excluding net earnings, amounts related to the ~~effective tax rate~~discontinued operation have not been removed from ~~continuing operations was due primarily to a tax benefit recorded in~~the cash flow statement for the three months ended ~~September 30, 2006 related to~~March 31, 2007 because the ~~reversal of accrued income taxes resulting from the determination that a reserve previously recorded for potential tax exposures was no longer necessary. Additionally, the effective tax rate~~effect is higher in three months ended September 30, 2007 due to an increase in non-deductible expenses related to executive compensation. Our effective tax rate from continuing operations for the nine months ended September 30, 2007 was 39.1% compared to 34.1% for the nine months ended September 30, 2006. The increase in the effective tax rate from continuing operations was due primarily to a decrease in tax reserves in the first quarter of 2006 due to the closing of an audit, a tax benefit recorded in the second quarter of 2006 for an internal initiative that reduced certain state taxes, the reversal of accrued income taxes in the third quarter of 2006 resulting from the determination that a reserve previously recorded for potential tax exposures was no longer necessary and an increase in non-deductible expenses related to executive compensation in 2007.

~~Earnings from Discontinued Operations~~. On March 1, 2007, we completed the sale of PC Wholesale and on June 30, 2006, we completed the sale of Direct Alliance. Accordingly, the results of operations attributable to PC Wholesale and Direct Alliance for all periods presented have been classified as discontinued operations.immaterial. See Note 1011 to the Consolidated Financial Statements in Part I, Item 1 of this report for further discussion.

~~Liquidity and Capital Resources~~

~~The following table sets forth certain consolidated cash flow information for the nine months ended September 30, 2007 and 2006 (in thousands):~~

Nine Months Ended
September 30,
2007 2006
Net cash provided by operating activities $ 99,029 $ 105,658
Net cash provided by (used in) investing activities 1,020 (302,892 )
Net cash (used in) provided by financing activities (108,655 ) 227,866
Net cash provided by discontinued operations — 129
Foreign currency exchange effect on cash flow 6,995 5,165

(Decrease) increase in cash and cash equivalents (1,611 ) 35,926
Cash and cash equivalents at beginning of period 54,697 35,145

Cash and cash equivalents at end of period $ 53,086 $ 71,071

~~Cash and Cash Flow~~

Our primary uses of cash in the past few years have been to fund our working capital requirements, capital expenditures, repurchases of our common stock and repayments of debt incurred to fund acquisitions.

Net cash provided by operating activities.~~Net cash provided by~~Cash flows from operations for the ~~nine~~three months ended ~~September 30,~~March 31, 2008 and 2007 resulted primarily from ~~decreases in accounts receivable,~~ net earnings ~~from continuing operations~~ before depreciation, amortization and non-cash stock-based ~~compensation.~~compensation expense as well as decreases in accounts receivable. These increases in operating cash ~~flow~~flows were partially offset by decreases in accounts ~~payable, accrued expenses and other liabilities.~~payable. The ~~decreased~~decreases in accounts receivable and accounts payable ~~can be~~are due to primarily ~~attributed~~ to ~~the seasonal~~a decrease in net sales. Cash flows from operations for the nine months ended September 30, 2006 resulted primarily from net earnings from continuing operations before depreciation and amortization, decreases in inventories and increases in accounts payable. Inventories decreased due primarily to decreases in inventories not available for sale, which represent inventories segregated pursuant to binding customer contracts, which will be recorded as net sales ~~when the criteria for sales recognition are met. Accounts payable increased due~~compared to the ~~timing of payments at period end.~~prior year.

Our consolidated cash flow operating metrics for the ~~nine months~~quarter ended ~~September 30,~~March 31, 2008 and 2007 ~~and 2006~~ are as follows:

~~INSIGHT ENTERPRISES, INC.~~
~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION~~
~~AND RESULTS OF OPERATIONS (continued)~~

Nine Months Ended
September 30,
2007 2006
Days sales outstanding in ending accounts receivable (“DSOs”)^(a)
63 82
Annualized inventory turns, excluding inventories not available for sale^(b)
40 23
Days purchases outstanding in ending accounts payable (“DPOs”)^(c)
43 51

2008 2007
Days sales outstanding in ending accounts receivable (“DSOs”)^(a)
67 64
Inventory turns (excluding inventories not available for sale)^(b)
41 40
Days purchases outstanding in ending accounts payable (“DPOs”)^(c)
44 42


(a)		Calculated as the balance of accounts receivable, net at the end of the period divided by daily net sales. Daily net sales is calculated as net sales for the ~~nine-month period~~quarter divided by ~~270 days.~~91 days in 2008 and 90 days in 2007.

(b)		Calculated as annualized costs of goods sold divided by average inventories. Average inventories is calculated as the sum of the balances of inventories at the beginning of the quarter plus inventories ~~plus ending inventories~~at the end of quarter divided by two.

(c)		Calculated as the balances of accounts payable ~~plus inventories financing facility~~ at the end of the period divided by daily costs of goods sold. Daily costs of goods sold is calculated as costs of goods sold for the ~~nine-month period~~quarter divided by ~~270 days.~~91 days in 2008 and 90 days in 2007.

The ~~decrease~~increase in DSOs ~~and in DPOs~~ from the ~~nine~~three months ended ~~September 30, 2006~~March 31, 2007 is due primarily to ~~including Software Spectrum~~a higher percentage of accounts receivable in foreign operations with longer net terms. On lower net sales ~~from only September 7, 2006, which negatively affected these metrics for~~and related costs of goods sold during the ~~nine~~three months ended ~~September 30, 2006. The increase in inventory turns is primarily due~~March 31, 2008 compared to the ~~fact that Software Spectrum operations require very little inventory. The $17.4 million~~three months ended March 31, 2007, DPOs increased reflecting enhanced management of ~~inventories not available for sale at September 30, 2007 represents inventories segregated pursuant to binding client contracts, which will be recorded as net sales when~~working capital during the ~~criteria for sales recognition are met.~~2008 first quarter.

Assuming ~~net~~ sales continue to increase in the future, we expect that cash flow from operations will be used, at least partially, to fund working capital as we typically pay our ~~suppliers~~partners on average terms that are shorter than the average terms granted to our clients in order to take advantage of supplier discounts.

Net cash (used in) provided by ~~(used in)~~ investing activities. ~~Net cash provided by investing activities~~Capital expenditures of $6.4 million and $8.4 million for the ~~nine~~three months ended ~~September 30,~~March 31, 2008 and 2007, was $1.0 million, which consisted of net proceeds of $28.6 million from the sale of a discontinued operation, offset partially by capital expenditures of $27.6 million. Capital expenditures for the nine months ended September 30, 2007respectively, primarily related to investments to upgrade our IT systems, ~~to mySAP,~~ including capitalized costs of software developed for internal use, IT equipment and software licenses. Cash used in investing activities for the nine months ended September 30, 2006 was $302.9 million, primarily for the purchase of Software Spectrum and capital expenditures, which consisted primarily of capitalized costs of computer software developed for internal use and IT equipment. These uses of cash were offset by $46.5 million of proceeds from the sale of a discontinued operation. We expect total capital expenditures in ~~2007~~2008 to be between ~~$30~~$30.0 million and ~~$35~~$35.0 million. During the three months ended March 31, 2007, we received $28.7 million ~~primarily~~for the sale of PC Wholesale. During the three months ended March 31, 2008, we made a payment of $900,000 to resolve certain post-closing contingencies related to ~~IT investments, including~~ the ~~continued deployment~~sale of ~~the mySAP upgrade.~~PC Wholesale.

~~Net cash (used in) provided by financing activities~~.Net cash used in financing activities ~~for~~. During the ~~nine~~three months ended ~~September 30, 2007 was $108.7 million.~~March 31, 2008, we funded repurchases of $15.0 million of our common stock. These uses of cash were partially offset by $3.0 million of proceeds from sales of common stock under employee stock plans. During the ~~nine~~three months ended ~~September 30,~~March 31, 2007, cash used in financing activities was primarily for net repayments of outstanding debt of ~~$87.3~~$52.8 million and ~~decreases~~a decrease in book overdrafts of ~~$23.9 million. Cash~~$31.5 million, partially offset by $2.4 million provided by financing activities for the nine months ended September 30, 2006 was $227.9 million, primarily from the financing obtained for the acquisition of Software Spectrum, which was partially financed by new term loan borrowings of $75.0 million under our amended and restated credit facility and $173.0 million under our amended accounts receivable securitization financing facility. During the nine months ended September 30, 2006, cash was primarily used to make repayments on our financing facilities and line of credit, offset partially by cash received from proceeds of sales of common stock under employee stock plans and excess tax benefit from employee gains on stock-based compensation. During the nine months ended September 30, 2007 and 2006, cash of $24.3 million and $14.1 million, respectively, was provided by common stock issuances as a result of stock option exercises.

On January 26, 2006, we announced that our Board of Directors had authorized the purchase of up to $50,000,000 of our common stock. During the three months ended September 30, 2007, we purchased in open market transactions 887,000 shares of our common stock at a total cost of $22,336,026 (an average price of

INSIGHT ENTERPRISES, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)

~~$25.18~~On November 14, 2007, we announced that our Board of Directors had authorized the purchase of up to $50.0 million of our common stock through September 30, 2008. During the three months ended March 31, 2008, we purchased in open market transactions 867,900 shares of our common stock at a total cost of approximately $15.0 million (an average price of $17.28 per share). All shares repurchased have been ~~retired.~~retired as of March 31, 2008. Subsequent to ~~September 30, 2007,~~March 31, 2008 through May 5, 2008, we repurchased ~~the remainder~~an additional $20.6 million of the $50.0 million of common stock authorized ~~for repurchase. The~~under the program. During 2008, the total ~~repurchase~~repurchases under this program through May 5, 2008 represented approximately ~~1.96~~2.3 million shares at an average price of ~~$25.57~~$15.33 per share.

On April 1, 2008, we entered into a new five-year $300.0 million senior revolving credit facility, which replaced our existing $75.0 million revolving credit facility and our term loan facility. The Calence acquisition was funded, in part, using borrowings under the new facility. Amounts outstanding under the new revolving line of credit will bear interest, payable quarterly, at a floating rate equal to the prime rate or, at our option, a LIBOR rate plus a pre-determined spread of 0.75% to 1.75%. In addition, we pay a commitment fee on the unused portion of the line of 0.175% to 0.35%. We have an outstanding letter of credit that reduces the availability on the revolving line of credit by $25.0 million. After finalizing the purchase of Calence on April 1, 2008, $106.0 million was available under the new revolving line of credit. In conjunction with this refinancing, we did not amend our accounts receivable securitization facility which expires September 7, 2009, on which we had $8.3 million available at April 1, 2008.

We anticipate that cash flows from operations, together with the funds available under our financing facilities will be adequate to support our presently anticipated cash and working capital requirements for operations over the next twelve months. Additionally, we expect to use any excess cash primarily to reduce outstanding debt ~~incurred in connection with the acquisition of Software Spectrum,~~and to fund additional acquisitions and/or ~~repurchase~~repurchases of our common stock. As part of our long-term growth strategy, we intend to consider additional acquisition opportunities from time to time, which may require additional debt or equity financing.

Cash and cash equivalents held by foreign subsidiaries are generally subject to U.S. income taxation upon repatriation to the U.S. For foreign entities not treated as branches for U.S. tax purposes, we do not provide for U.S. income taxes on the undistributed earnings of these subsidiaries as earnings are reinvested and, in the opinion of management, will continue to be reinvested indefinitely outside of the U.S.

~~As part of our long-term growth strategy, we intend to consider additional acquisition opportunities from time to time, which may require additional debt or equity financing.~~

See Note 7 to our Consolidated Financial Statements in Part II, Item 8 of our Annual Report on Form 10-K/A for the year ended December 31, 2006 for a description of our financing facilities, including terms, amounts outstanding, amounts available and weighted average borrowings and interest rates during the year ended December 31, 2006. As of ~~September 30, 2007,~~March 31, 2008, we had ~~$77.2~~approximately $37.0 million in cash and ~~$75.0 million available under~~cash equivalents resident in our accounts receivable securitization facility and line of credit, respectively. Additionally, our line of credit has a feature that allows us to increase availability under our line of credit by an additional $37.5 million, upon request. Our financing facilities contain various covenants, including the requirement that we comply with leverage and minimum fixed charge ratio requirements. In addition, our credit facilities prohibit the payment of cash dividends without the lenders’ consent and require that we provide annual and quarterly financial information. If we fail to comply with these covenants, the lenders would be able to demand payment within a specified period of time. We are in compliance with all of our covenants at September 30, 2007.foreign subsidiaries.

Off Balance Sheet Arrangements

We have entered into off-balance sheet arrangements, which include guaranties and indemnifications, as defined by the SEC’s Final Rule 67, “Disclosure in Management’s Discussion and Analysis About Off-Balance Sheet Arrangements and Aggregate Contractual Obligations.” The guaranties and indemnifications are discussed in Note 1410 to our Consolidated Financial Statements in Part ~~II,~~I, Item 81 of ~~our Annual Report on Form 10-K/A for the year ended December 31, 2006.~~this report. We believe that none of our off-balance sheet arrangements has, or is reasonably likely to have, a material current or future effect on our financial condition, results of operations, liquidity, capital expenditures or capital resources.

Recently Issued Accounting Pronouncements

~~There~~Other than the partial adoption of Statement of Financial Accounting Standard No. 157 “Fair Value Measurements” (“SFAS No. 157”) effective January 1, 2008, as discussed in Note 8, there have been no material changes or additions to the recently issued accounting pronouncements as previously reported in Note 1 to our Consolidated Financial Statements in Part II, Item 8 of our Annual Report on Form ~~10-K/A~~10-K for the year ended December 31, ~~2006~~2007 which ~~effect the Company’s~~affect or may affect our financial statements.

INSIGHT ENTERPRISES, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)

Contractual Obligations

At March 31, 2008, our contractual obligations were as follows (in thousands):


	Payments due by period
			Less than		1-3		3-5		More than 5
	Total		1 Year		Years		Years		Years
Long-Term Debt (a)	$	203,500	$	—	$	151,000	$	52,500	$	—
Operating lease obligations (b)		62,499		13,260		19,125		14,043		16,071
Severance and restructuring obligations (c)		11,063		8,449		2,614		—		—
Other contractual obligations (d)		50,817		19,186		18,636		4,950		8,045

Total	$	327,879	$	40,895	$	191,375	$	71,493	$	24,116


(a)		On April 1, 2008, we entered into a new five-year $300.0 million senior revolving credit facility, which replaced our existing revolving credit facility and our term loan facility. As such, amounts included in our contractual obligations table above have been updated to reflect the $52.5 million outstanding at March 31, 2008 under our term loan as due in April 2013, the date at which the new senior revolving credit facility matures. Long-term debt also includes our accounts receivable securitization facility that expires September 2009. See further discussion in Note 4 to the Consolidated Financial Statements in Part I, Item 1 of this report.

(b)		As there were no material changes in our operating lease obligations during the quarter, amounts included in the table above reflect our operating lease obligations as of December 31, 2007 as reported in Part II, Item 7 of our Annual Report on From 10-K for the year ended December 31, 2007.

(c)		As a result of approved severance and restructuring plans, we expect future cash expenditures related to employee termination benefits and facilities based costs. See further discussion in Note 6 to the Consolidated Financial Statements in Part I, Item 1 of this report.

(d)		For those other contractual obligations that did not change materially from December 31, 2007, the table above includes:

	I.		Estimated interest payments of $11.6 million in 2008 and 2009, respectively, based on the current debt balance of $202.3 million at December 31, 2007 under the asset backed securitization facility, revolving credit facility and term loan multiplied by the December 31, 2007 weighted average interest rate of 5.8% per annum.

	II.		Amounts totaling $8.4 million over the next six years to the Valley of the Sun Bowl Foundation for sponsorship of the Insight Bowl and $8.8 million over the next eight years for advertising and marketing events with the Arizona Cardinals NFL team at the University of Phoenix stadium. See further discussion in Note 15 to the Consolidated Financial Statements in Part II, Item 8 of our Annual Report on From 10-K for the year ended December 31, 2007.

	III.		During the year ended December 31, 2005, we adopted FIN No. 47 which states that companies must recognize a liability for the fair value of a legal obligation to perform asset-retirement activities that are conditional on a future event if the amount can be reasonably estimated. We estimate that we will owe $3.2 million in future years in connection with these obligations.


		In July 2007, we signed a statement of work with a third party that was engaged to assist us in integrating into our IT system our hardware, services and software distribution operations in the U.S., Canada, EMEA and APAC. During the quarter ended March 31, 2008, we renegotiated the contract to include a new scope of work, whereby we agreed to engage the third party on current and future IT related projects. As a result of this renegotiation, previously reported commitments as of December 31, 2007 totaling $14.4 million over the next two years were settled with a $3.1 million payment made in April 2008. The new commitments approximate $4.0 million over the next 18 to 24 months.

INSIGHT ENTERPRISES, INC.

The table above also excludes $13.5 million of liabilities under FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes,” as we are unable to reasonably estimate the ultimate amount of timing of settlement. See further discussion in Note 11 to the Consolidated Financial Statements in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2007.

Although we set purchase targets with our partners tied to the amount of supplier reimbursements we receive, we have no material contractual purchase obligations.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

There have been no material changes in our reported market risks, as described in “Quantitative and Qualitative Disclosures About Market Risk” in Part II, Item 7A of our Annual Report on Form ~~10-K/A~~10-K for the year ended December 31, ~~2006.~~2007.

Item 4. Controls and Procedures.

~~(a)~~ Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, as of the end of the period ofcovered in this report, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) and determined that as ~~a result~~ of ~~the material weakness in internal control over financial reporting described below, as of September 30, 2007~~March 31, 2008 our disclosure controls and procedures were ~~not~~ effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in ~~SEC~~the SEC’s rules and ~~forms.~~

~~The Public Company Accounting Oversight Board’s Auditing Standard No. 2 defines a material weakness as a significant deficiency, or a combination of significant deficiencies,~~forms, and that results in there being a more than remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected. The Company identified a material weakness in its internal control over financial reporting as of December 31, 2006, arising from the combined effect of the following control deficiencies in Company’s accounting for equity based awards:

	•		~~Inadequate policies and procedures to determine the grant date and exercise price of equity awards;~~

	•		~~Inadequate supervision and training for personnel involved in the stock option granting process; and~~

	•		~~Inadequate documentation and monitoring of the application of accounting policies and procedures regarding equity awards.~~

~~As a result of financial statement errors attributable~~such information is accumulated and communicated to ~~the material weakness described above, we filed a comprehensive Form 10-K/A for the fiscal year ended December 31, 2006 in which we restated~~ our ~~consolidated statements of earnings, of stockholders’ equity~~management, including our Chief Executive Officer and comprehensive income and of cash flows for the years ended December 31, 2005 and 2004, our consolidated balance sheet as of December 31, 2005 and selected consolidated financial data for the years ended December 31, 2005, 2004, 2003 and 2002, and for each of the quarters in the year ended December 31, 2005 and the quarters ended March 31, and September 30, 2006.

~~Subsequent~~Chief Financial Officer, to December 31, 2006, we have begun taking several steps to remediate the material weakness described above. We have implemented or are in the process of implementing internal control improvements in the following areas:

	•		implementing new policies and procedures to ensure compliance with accounting principles applicable to equity compensation, including restricted stock grants, and through training and additions to the staff;

	•		~~developing an equity compensation training program for all teammates involved in the award of and accounting for equity compensation;~~

	•		~~restructuring reporting responsibility for the administration of our equity compensation programs; and~~

	•		~~adopting a written policy governing the award of equity compensation, including standardizing documentation of approvals of all relevant terms of equity compensation awards.~~

~~INSIGHT ENTERPRISES, INC.~~

The Compensation Committee of our Board of Directors, which was newly constituted in May 2007, has already revised some of its policies and will now only approve equity compensation grants at meetings and not by written consent. The Compensation Committee also has improved the process for documenting its actions and ensuring theallow timely ~~reporting of its actions to the Board of Directors.~~decisions regarding required disclosure.

~~(b)~~ Changes in Internal Control ~~Over~~over Financial Reporting

~~Other than the steps being taken to remediate the material weakness described above, there~~There was no change in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended ~~September 30, 2007~~March 31, 2008 that has materially affected, or is reasonably likely to materially affect, ~~the Company’s~~our internal control over financial reporting.

~~(c)~~ Inherent Limitations of Disclosure Controls and Internal Control Over Financial Reporting

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to risks that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Part II –— OTHER INFORMATION

Item 1. Legal Proceedings.

We are party to various legal proceedings arising in the ordinary course of business, including ~~asserted~~ preference payment claims asserted in client bankruptcy proceedings, claims of alleged infringement of patents, trademarks, copyrights and other intellectual property rights, ~~and~~ claims of alleged non-compliance with contract ~~provisions.~~ provisions and claims related to alleged violations of laws and regulations.

In accordance with SFAS No. 5, “Accounting for Contingencies” (“SFAS No. 5”), we make a provision for a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These provisions are reviewed at least quarterly and are adjusted to reflect the effects of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to a particular claim. Although litigation is inherently unpredictable, we believe that we have adequate provisions for any probable and estimable losses. It is possible, nevertheless, that the results of our operations or cash flows could be materially and adversely affected in any particular period by the resolution of a legal proceeding. Legal expenses related to defense, negotiations, settlements, rulings and advice of outside legal counsel are expensed as incurred.

~~INSIGHT ENTERPRISES, INC.~~

~~Software Spectrum, Inc., also~~ as successor to CS&T, is party to litigation brought in the Belgian courts regarding a dispute over the terms of a tender awarded by the Belgian Ministry of Defence (“MOD”) in November 2000. In February 2001, CS&T brought a breach of contract suit against MOD in the Court of First Instance in Brussels and claimed breach of contract damages in the amount of approximately $150,000. MOD counterclaimed against CS&T for cost to cover in the amount of approximately ~~$2,700,000,~~$2.7 million, and, in July 2002, CS&T added a Belgian subsidiary of Microsoft as a defendant. We believe that MOD’s counterclaims are unfounded, and we have filed a defense to the counterclaim. The proceedings are currently stayed. We cannot make an estimate of the possible loss or range of loss, if any, related to this claim.

On March 10, 2008, TeleTech Holdings, Inc. (“Teletech”) sent us a demand for arbitration pursuant to the Stock Purchase Agreement (“SPA”) entered into between the parties, whereby TeleTech acquired Direct Alliance Corporation (“DAC”), a former subsidiary of Insight, effective June 30, 2006. TeleTech claims that it is entitled to a $5.0 million “clawback” under the SPA relating to the non-renewal of an agreement between DAC and one of its clients. We dispute Teletech’s allegations and intend to vigorously ~~defending~~defend this matter. In recording the ~~claim.~~disposition of DAC on June 30, 2006, we deferred the $5.0 million as a contingent gain on sale related to this clawback. As such, amounts paid to Teletech under the clawback provision, if any, would not have any effect on our results of operations.

As previously disclosed, on April 1, 2008, we completed the acquisition of Calence pursuant to an agreement and plan of merger (the “Merger Agreement”), a related support agreement (the “Support Agreement”) and other ancillary agreements. In April 2008, in connection with an investigation being conducted by the United States Department of Justice (the “DOJ”), Calence received a subpoena from the Office of the Inspector General of the Federal Communications Commission (the “FCC”) requesting documents related to the award, by the Universal Service Administration Company (“USAC”), of funds under the E-Rate program to a participating school district. The E-Rate program provides schools and libraries with discounts to obtain affordable telecommunications and internet access. No allegations have been made against Calence, and we are cooperating with the FCC, USAC and the DOJ and are in the process of responding to the subpoena. Pursuant to the Merger Agreement and the Support Agreement, the former owners of Calence have agreed to indemnify us for certain damages that may arise out of or result from this matter, including our fees and expenses for responding to the subpoena.

Item 1A. Risk Factors.

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, Item 1A, “Risk Factors”, in our Annual Report on Form ~~10-K/A~~10-K for the year ended December 31, ~~2006,~~2007, which could materially affect our business, financial condition or future results. The risks described in our Annual Report on Form ~~10-K/A~~10-K are not the only risks facing our company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially adversely affect our business, financial condition or operating results.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

There were no unregistered sales of equity securities during the three months ended ~~September 30, 2007.~~March 31, 2008.

INSIGHT ENTERPRISES, INC.

We have never paid a cash dividend on our common ~~stock, and our financing facilities prohibit the payment of cash dividends without the lenders’ consent.~~stock.

Issuer Purchases of Equity Securities

(c) (d)
(a) Total Number of Shares Approximate Dollar Value
Total Number (b) Purchased as Part of of Shares That May Yet be
of Shares Average Price Publicly Announced Purchased Under the Plans
Period Purchased Paid per Share Plans or Programs or Programs
July 1, 2007 through July 31, 2007 — $ — — $ 50,000,000
August 1, 2007 through August 31, 2007 — — — 50,000,000
September 1, 2007 through September 30, 2007 887,000 25.18 887,000 $ 27,663,974

Total 887,000 $ 25.18 887,000


					(c)		(d)
	(a)				Total Number of Shares		Approximate Dollar Value
	Total Number		(b)		Purchased as Part of		of Shares That May Yet be
	of Shares		Average Price		Publicly Announced		Purchased Under the Plans
Period	Purchased		Paid per Share		Plans or Programs		or Programs
January 1, 2008 through January 31, 2008		—	$	—		—	$	50,000,000
February 1, 2008 through February 29, 2008		—		—		—		50,000,000
March 1, 2008 through March 31, 2008		867,900		17.28		867,900	$	35,000,000

Total		867,900	$	17.28		867,900

On ~~January 26, 2006,~~November 14, 2007, we announced that our Board of Directors had authorized the purchase of up to ~~$50,000,000~~$50.0 million of our common ~~stock.~~stock through September 30, 2008. During the three months ended ~~September 30, 2007,~~March 31, 2008, we purchased in open market transactions ~~887,000~~867,900 shares of our common stock at a total cost of ~~$22,336,026~~$15.0 million (an average price of ~~$25.18~~$17.28 per share). All shares repurchased have been ~~retired.~~retired as of March 31, 2008. Subsequent to ~~September 30, 2007,~~March 31, 2008 through May 5, 2008, we repurchased ~~the remainder~~an additional $20.6 million of the $50.0 million of common stock authorized under the program. ~~The~~During 2008, the total ~~repurchase~~repurchases under this program through May 5, 2008 represented approximately ~~1.96~~2.3 million shares at an average price of ~~$25.57~~$15.33 per share.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Submission of Matters to a Vote of Security Holders.

None.


Exhibit No.		Description

3.1		Composite Certificate of Incorporation of Insight Enterprises, Inc. (incorporated by reference to Exhibit 3.1 of our Annual Report on Form 10-K for the year ended December 31, 2005 filed on February 17, 2006, File No. 0-25092).

3.2		Amended and Restated Bylaws of the Insight Enterprises, Inc. (incorporated by reference to Exhibit ~~99.1~~3.1 of our ~~Current Report~~current report on Form 8-K filed on ~~May 7, 2007,~~January 14, 2008, File No. 0-25092).

4.1		Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 of our Registration Statement on Form S-1 (No. 33-86142) declared effective January 24, 1995).

4.2		Stockholder Rights Agreement and Exhibits A and B (incorporated by reference to Exhibit 4.1 of our Current Report on Form 8-K filed on March 17, 1999, File No. 0-25092).

10.1		~~Employment~~ Agreement ~~between~~and Plan of Merger, dated January 24, 2008, among Insight Enterprises, Inc., Insight Networking Services, LLC and ~~Steven R. Andrews~~Calence, LLC (incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K filed on January 28, 2008, File No. 0-25092).

10.2		Support Agreement, dated ~~September 12, 2007.~~January 24, 2008, among Insight Enterprises, Inc., Avnet, Inc., Calence Holdings, Inc., Michael F. Fong, Timothy J. Porthouse, Richard J. Lesniak, Jr., Mary Donna Rives Lesniak, The Richard J. Lesniak Irrevocable Trust, and the Mary Donna Lesniak Irrevocable Trust (incorporated by reference to Exhibit 10.2 of our Current Report on Form 8-K filed on January 28, 2008, File No. 0-25092).

10.3		Second Amended and Restated Credit Agreement, dated as of April 1, 2008, among Insight Enterprises, Inc., the European Borrowers (as defined therein), the lenders party thereto, J.P. Morgan Europe Limited, as European Agent, Wells Fargo Bank, National Association and U.S. Bank National Association, as Co-Syndication Agents, and JPMorgan Chase Bank, National Association, as Administrative Agent (incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K filed on April 4, 2008, File No. 0-25092).

31.1		Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.

31.2		Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.

32.1		Section 1350 Certification of Chief Executive Officer and Chief Financial Officer.

INSIGHT ENTERPRISES, INC.

EXHIBIT INDEX


Exhibit No.		Description

3.1		Composite Certificate of Incorporation of Insight Enterprises, Inc. (incorporated by reference to Exhibit 3.1 of our Annual Report on Form 10-K for the year ended December 31, 2005 filed on February 17, 2006, File No. 0-25092).

3.2		Amended and Restated Bylaws of the Insight Enterprises, Inc. (incorporated by reference to Exhibit 3.1 of our current report on Form 8-K filed on January 14, 2008, File No. 0-25092).

4.1		Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 of our Registration Statement on Form S-1 (No. 33-86142) declared effective January 24, 1995).

4.2		Stockholder Rights Agreement and Exhibits A and B (incorporated by reference to Exhibit 4.1 of our Current Report on Form 8-K filed on March 17, 1999, File No. 0-25092).

10.1		Agreement and Plan of Merger, dated January 24, 2008, among Insight Enterprises, Inc., Insight Networking Services, LLC and Calence, LLC (incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K filed on January 28, 2008, File No. 0-25092).

10.2		Support Agreement, dated January 24, 2008, among Insight Enterprises, Inc., Avnet, Inc., Calence Holdings, Inc., Michael F. Fong, Timothy J. Porthouse, Richard J. Lesniak, Jr., Mary Donna Rives Lesniak, The Richard J. Lesniak Irrevocable Trust, and the Mary Donna Lesniak Irrevocable Trust (incorporated by reference to Exhibit 10.2 of our Current Report on Form 8-K filed on January 28, 2008, File No. 0-25092).

10.3		Second Amended and Restated Credit Agreement, dated as of April 1, 2008, among Insight Enterprises, Inc., the European Borrowers (as defined therein), the lenders party thereto, J.P. Morgan Europe Limited, as European Agent, Wells Fargo Bank, National Association and U.S. Bank National Association, as Co-Syndication Agents, and JPMorgan Chase Bank, National Association, as Administrative Agent (incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K filed on April 4, 2008, File No. 0-25092).

31.1		Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.

31.2		Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.

32.1		Section 1350 Certification of Chief Executive Officer and Chief Financial Officer.


			Page

PART I — Financial Information

Item 1 –— Financial Statements:

Consolidated Balance Sheets (unaudited) - ~~September 30, 2007~~March 31, 2008 and December 31, ~~2006~~2007			51

Consolidated Statements of Earnings (unaudited) - Three ~~and Nine~~ Months Ended ~~September 30,~~March 31, 2008 and 2007 ~~and 2006~~			62

Consolidated Statements of Cash Flows (unaudited) - ~~Nine~~Three Months Ended ~~September 30,~~March 31, 2008 and 2007 ~~and 2006~~			73

Notes to Consolidated Financial Statements (unaudited)			84

Item 2 –— Management’s Discussion and Analysis of Financial Condition and Results of Operations			2117

Item 3 –— Quantitative and Qualitative Disclosures About Market Risk			3227

Item 4 –— Controls and Procedures			3227

PART II — Other Information

Item 1 –— Legal Proceedings			3327

Item 1A –— Risk Factors			3428

Item 2 –— Unregistered Sales of Equity Securities and Use of Proceeds			3428

Item 3 –— Defaults Upon Senior Securities			3429

Item 4 –— Submission of Matters to a Vote of Security Holders			3429

Item 5 –— Other Information			3529

Item 6 –— Exhibits			3530

Signatures			3631

Certifications			3732

~~EX-10.1~~Exhibit 31.1
~~EX-31.1~~Exhibit 31.2
~~EX-31.2~~
~~EX-32.1~~Exhibit 32.1


	North America		EMEA		APAC		Consolidated
Balance at December 31, 2006	$	217,469	$	62,714	$	16,598	$	296,781
Adjustments		2,298		4,392		1,535		8,225

Balance at September 30, 2007	$	219,767	$	67,106	$	18,133	$	305,006


	North America			EMEA		APAC		Consolidated
Balance at December 31, 2007	$	219,909		$	68,725	$	18,108	$	306,742
Adjustments		(501	)		4,971		783		5,253

Balance at March 31, 2008	$	219,408		$	73,696	$	18,891	$	311,995


	Options Outstanding						Options Exercisable
			Weighted Average
Range of			Remaining		Weighted Average				Weighted Average
Exercise	Number of Options		Contractual Life		Exercise Price Per		Number of Options		Exercise Price Per
Prices	Outstanding		(in years)		Share		Exercisable		Share
$6.95 – 18.35		707,023		2.21	$	15.20		635,870	$	15.22
18.36 – 19.35		890,834		2.29	$	18.73		551,578	$	18.76
19.50 – 19.90		733,355		2.27	$	19.84		499,023	$	19.84
19.92 – 21.25		743,863		1.67	$	20.92		480,672	$	20.92
21.30 – 41.00		450,813		2.34	$	23.83		450,813	$	23.83

		3,525,888		2.14	$	19.37		2,617,956	$	19.38


	Options Outstanding						Options Exercisable
			Weighted		Weighted				Weighted
			Average		Average				Average
Range of	Number of		Remaining		Exercise		Number of		Exercise
Exercise	Options		Contractual		Price Per		Options		Price Per
Prices	Outstanding		Life (in years)		Share		Exercisable		Share
$7.05 - 18.35		552,631		2.71	$	16.83		328,205	$	16.20
18.36 - 19.35		748,138		1.78		18.80		537,048		18.88
19.50 - 19.90		728,655		1.77		19.84		661,989		19.86
19.93 - 21.25		622,277		1.23		20.87		612,277		20.88
21.30 - 41.00		94,025		2.19		25.82		94,025		25.83

		2,745,726		1.85		19.39		2,233,544		19.62


	EMEA
Balance at December 31, 2007	$	2,425
Adjustments		27
Cash payments		(408	)

Balance at March 31, 2008	$	2,044

	•		Richard A. Fennessy, President and Chief Executive Officer — 300,000 RSUs;

	•		Mark T. McGrath, President, North America/APAC — 150,000 RSUs; and

	•		Stuart A. Fenton, President, EMEA — 100,000 RSUs.


				Weighted Average
				Grant Date Fair
	Number			Value		Fair Value
Nonvested at the beginning of period		1,353,770		$	20.72
Granted		—		$	—
Vested		(43,199	)	$	20.69	$	1,029,864	^(a)

Forfeited		(37,987	)	$	20.73

Nonvested at the end of period		1,272,584		$	20.72	$	32,845,393	^(b)

Expected to vest		1,150,113				$	29,684,416	^(b)


				Weighted Average
	Number			Grant Date Fair Value		Fair Value
Nonvested at the beginning of period		1,108,857		$	20.29
Granted		1,349,344			15.87
Vested, including shares withheld to cover taxes		(381,470	)		20.43	$	6,943,685	^(a)

Forfeited		(51,710	)		20.16

Nonvested at the end of period		2,025,021			17.31	$	35,437,867	^(b)

Expected to vest		1,641,671				$	28,729,242	^(b)


	Three Months Ended September 30, 2007
	North America		EMEA		APAC		Consolidated
Net sales	$	817,747	$	264,679	$	27,279	$	1,109,705
Costs of goods sold		708,729		228,965		22,165		959,859

Gross profit		109,018		35,714		5,114		149,846
Operating expenses:
Selling and administrative expenses		93,742		33,165		3,913		130,820

Earnings from operations	$	15,276	$	2,549	$	1,201	$	19,026

Non-operating expense, net								3,705

Earnings from continuing operations before income taxes								15,321
Income tax expense								6,225

Net earnings from continuing operations								9,096
Net earnings from discontinued operations								—

Net earnings							$	9,096


Total assets	$	2,198,755	$	393,211	$	39,393	$	1,590,637	*


	Three Months Ended March 31, 2008
	North America		EMEA		APAC			Consolidated
Net sales	$	766,424	$	318,222	$	23,143		$	1,107,789
Costs of goods sold		662,409		272,847		19,378			954,634

Gross profit		104,015		45,375		3,765			153,155
Operating expenses:
Selling and administrative expenses		91,219		37,552		4,183			132,954
Severance and restructuring expenses		1,009		869		22			1,900

Earnings from operations	$	11,787	$	6,954	$	(440	)		18,301

Non-operating expense, net									1,497

Earnings from continuing operations before income taxes									16,804
Income tax expense									6,284

Net earnings from continuing operations									10,520
Net earnings from a discontinued operation									—

Net earnings								$	10,520


Total assets at period end	$	2,241,799	$	455,927	$	44,456		$	1,656,189	*


	Three Months Ended September 30, 2006
	North America		EMEA		APAC		Consolidated
Net sales	$	694,284	$	157,115	$	6,520	$	857,919
Costs of goods sold		603,360		135,702		5,528		744,590

Gross profit		90,924		21,413		992		113,329
Operating expenses:
Selling and administrative expenses		70,023		17,481		707		88,211
Severance and restructuring expenses		508		221		—		729

Earnings from operations	$	20,393	$	3,711	$	285		24,389

Non-operating income, net								(178	)

Earnings from continuing operations before income taxes								24,567
Income tax expense								7,857

Net earnings from continuing operations								16,710
Net earnings from discontinued operations								530

Net earnings							$	17,240


Total assets	$	1,909,860	$	327,299	$	32,466	$	1,536,585	*


	Three Months Ended March 31, 2007
	North America		EMEA		APAC			Consolidated
Net sales	$	777,201	$	327,376	$	19,398		$	1,123,975
Costs of goods sold		665,285		288,905		16,610			970,800

Gross profit		111,916		38,471		2,788			153,175
Operating expenses:
Selling and administrative expenses		94,770		32,011		2,977			129,758

Earnings from operations	$	17,146	$	6,460	$	(189	)		23,417

Non-operating expense, net									3,210

Earnings from continuing operations before income taxes									20,207
Income tax expense									7,911

Net earnings from continuing operations									12,296
Net earnings from a discontinued operation									4,972

Net earnings								$	17,268


Total assets at period end	$	1,974,243	$	420,658	$	32,201		$	1,554,963	*


	Nine Months Ended September 30, 2007
	North America		EMEA		APAC		Consolidated
Net sales	$	2,518,847	$	923,958	$	74,324	$	3,517,129
Costs of goods sold		2,163,724		804,733		60,838		3,029,295

Gross profit		355,123		119,225		13,486		487,834
Operating expenses:
Selling and administrative expenses		289,605		98,646		10,651		398,902
Severance and restructuring expenses		2,841		—		—		2,841

Earnings from operations	$	62,677	$	20,579	$	2,835		86,091

Non-operating expense, net								6,994

Earnings from continuing operations before income taxes								79,097
Income tax expense								30,896

Net earnings from continuing operations								48,201
Net earnings from discontinued operations								4,972

Net earnings							$	53,173


Total assets	$	2,198,755	$	393,211	$	39,393	$	1,590,637	*


	Nine Months Ended September 30, 2006
	North America		EMEA		APAC		Consolidated
Net sales	$	1,972,186	$	392,383	$	6,520	$	2,371,089
Costs of goods sold		1,717,031		335,949		5,528		2,058,508

Gross profit		255,155		56,434		992		312,581
Operating expenses:
Selling and administrative expenses		197,105		46,038		707		243,850
Severance and restructuring expenses		508		221		—		729

Earnings from operations	$	57,542	$	10,175	$	285		68,002

Non-operating income, net								(773	)

Earnings from continuing operations before income taxes								68,775
Income tax expense								23,454

Net earnings from continuing operations								45,321
Net earnings from discontinued operations								12,630

Net earnings							$	57,951


Total assets	$	1,909,860	$	327,299	$	32,466	$	1,536,585	*

	•		Professional fees associated with the review of our historical stock option practices of $5.2 million in the three months ended March 31, 2007 of which there were none in the three months ended March 31, 2008;

	•		Decreases in marketing expenses of $1.4 million from the three months ended March 31, 2007; and

	•		Decreases in commissions of approximately $700,000 due to lower net sales during the three months ended March 31, 2008.

	•		Salaries and wages, employee-related expenses and contract labor, which increased approximately $6 million due to increases in sales incentive programs, increases in recruitment costs and employee headcount; and

	•		Costs associated with the planning and preparation stages of our system upgrade in EMEA of approximately $1 million; offset by

	•		Decreases in professional, legal and accounting fees of approximately $1 million.


	2008		2007
Days sales outstanding in ending accounts receivable (“DSOs”)^(a)		67		64
Inventory turns (excluding inventories not available for sale)^(b)		41		40
Days purchases outstanding in ending accounts payable (“DPOs”)^(c)		44		42


Date: ~~November 9, 2007~~May 8, 2008	INSIGHT ENTERPRISES, INC.

	By:	/s/ Richard A. Fennessy
		Richard A. Fennessy
		President and Chief Executive Officer (Duly Authorized Officer)


	By:	/s/ ~~Stanley Laybourne~~Glynis A. Bryan
		~~Stanley Laybourne~~Glynis A. Bryan
		Chief Financial Officer ~~Secretary~~ ~~and Treasurer~~ (Principal Financial Officer)