Record Annual Revenues and Net Income SANTA ANA, Calif., Feb. 15
/PRNewswire-FirstCall/ -- Ingram Micro Inc. (NYSE:IM), the world's
largest technology distributor, today announced financial results
for the fourth quarter and fiscal year of 2006 (ended Dec. 30,
2006). Worldwide sales for the fourth quarter were $8.85 billion,
an 11-percent increase from $7.96 billion in the prior-year period.
The translation impact of the relatively stronger European
currencies had an approximate three-percentage-point positive
effect on comparisons to the prior year. Sales for the 2006 fiscal
year were $31.36 billion, a 9-percent increase over 2005 and an
all-time record. Fourth-quarter net income was $91.7 million or
$0.53 per diluted share. This includes stock-based compensation
expense related to the adoption of Statement of Financial
Accounting Standards No. 123R of $6.7 million or approximately
$0.03 per diluted share. The fourth-quarter results also include
the following items that were not factored into the company's
guidance for the quarter: * A favorable legal settlement of
approximately $4 million, or a benefit of $0.02 per diluted share,
reflecting a recovery from a customer bankruptcy. * A reduction of
the effective tax rate from 28.0 percent for the first nine months
of 2006 to 27.6 percent for the full year, based primarily on the
end-of-year mix of profits across various tax jurisdictions,
resulting in a benefit of $0.01 per diluted share. * An increase in
outstanding shares to approximately 174 million compared to 171
million disclosed in the company's guidance, which had a negative
impact of approximately $0.01 per diluted share. * Complications in
migrating to a new warehouse management system in Germany, which
had a negative impact of approximately $0.03 to $0.04 per diluted
share relative to the estimates included in the company's
fourth-quarter guidance. In addition, pending legislation in
Brazil, if enacted into law before the company files its 2006 Form
10-K later this month, is likely to adversely impact the company's
fourth-quarter results. The potential impact is not included in
these reported results. More detail is found under "Legal Matters"
in this news release. In the prior-year period, net income based on
generally accepted accounting principles (GAAP) was $84.4 million,
or $0.51 per diluted share. These results included major-program
and integration costs of $8.2 million related to the company's
outsourcing and optimization plan in North America and the
integration of Tech Pacific, which the company acquired in November
2004. Year-ago net income on a non-GAAP basis, which excludes these
costs, was $90.0 million, or $0.54 per diluted share. "We closed
the year with record annual sales and income," said Gregory M.
Spierkel, chief executive officer, Ingram Micro Inc. "For the
fourth quarter, sales hit a quarterly record and all four regions
reported operating margins of more than 150 basis points for the
first time in company history. Nearly every country performed well.
While issues in Germany clouded our income performance during the
quarter, the warehouse management system is now running
effectively. We believe the upgraded system will drive a more
efficient and productive operation for Germany and the region."
Additional Fourth-Quarter Highlights For additional detail
regarding the results outlined below, please refer to the financial
statements and schedules attached to this news release or visit
http://www.ingrammicro.com/. Regional Sales * North American sales
were $3.68 billion (42 percent of total revenues), an increase of
12 percent versus the $3.27 billion reported in the year-ago
quarter. * European sales (in U.S. dollars) were $3.23 billion (36
percent of total revenues), an increase of 7 percent versus the
$3.01 billion in the year-ago quarter. The translation impact of
the relatively stronger European currencies had an approximate
9-percentage-point positive impact on comparisons to the prior
year. * Asia-Pacific sales were $1.50 billion (17 percent of total
revenues) or an increase of 20 percent versus the $1.25 billion
reported in year-ago quarter. * Latin American sales were $444
million (5 percent of total revenues), an increase of 6 percent
versus the $420 million in the year-ago quarter. Gross Margin Gross
margin was 5.45 percent, a decrease of 16 basis points versus the
prior-year quarter, but a sequential increase of five basis points.
The decrease versus the prior year is due in large part to
operational issues resulting from the conversion to a new warehouse
management system in Germany, as well as competitive pricing in
North America and Europe relative to the prior year period.
Operating Expenses Total operating expenses were $340.7 million, or
3.85 percent of revenues, versus $314.4 million, or 3.95 percent of
revenues, in the year-ago quarter. The current-quarter expenses
included $6.7 million of the non-cash stock compensation described
above and approximately $2.2 million in incremental technology
enhancements, which were not included in the prior-year results.
For comparison purposes, non-GAAP operating expenses in the
year-ago period, excluding the $8.2 million in major-program and
integration costs, were $306.2 million, or 3.85 percent of
revenues. Operating Income Worldwide operating income was $141.7
million, or 1.60 percent of revenues. The aggregate impact of the
non-cash stock compensation and technology enhancement expense
items noted above was approximately 10 basis points. Operating
income in the prior-year quarter was $131.7 million or 1.66 percent
of revenues. For comparison purposes, non-GAAP operating income in
the year-ago period, excluding major-program and integration costs
was $139.9 million, or 1.76 percent of revenues. The stock-based
compensation expense is presented as a separate reconciling amount
in the company's segment reporting; therefore, this expense is
included in the worldwide operating results but not in the
operating results of the regions. * North American operating income
was $64.6 million or 1.76 percent of revenues versus $55.1 million
or 1.68 percent of revenues in the year-ago quarter. For comparison
purposes, in the year-ago period, North American operating income
on a non-GAAP basis, which excludes major-program costs, was $60.7
million or 1.85 percent of revenues. * European operating income
was $49.2 million or 1.52 percent of revenues versus $57.1 million
or 1.90 percent of revenues in the year-ago quarter. For comparison
purposes, in the year-ago period, European operating income on a
non-GAAP basis was $57.1 million or 1.89 percent of revenues. The
year-over-year decline in operating income is attributable to
complications in migrating to the new warehouse management system
in Germany, as well as competitive pricing pressures relative to
the prior-year period. * Asia-Pacific operating income was $22.8
million or 1.52 percent of revenues versus $8.9 million or 0.71
percent in the year-ago quarter. For comparison purposes, in the
year-ago period, Asia-Pacific operating income on a non-GAAP basis,
which excluded integration costs related to the acquisition of Tech
Pacific, was $11.5 million or 0.92 percent of revenues. * Latin
American operating income was $11.8 million or 2.66 percent of
revenues versus $10.6 million or 2.54 percent of revenues in the
year-ago quarter. Other income and expenses for the quarter
increased to $16.0 million versus $10.8 million in the year-ago
period primarily due to higher market interest rates and additional
working capital associated with higher sales. Total depreciation
and amortization was $15.7 million. Capital expenditures were
approximately $11.0 million. Balance Sheet * The cash balance at
the end of the quarter was $333 million, a 3-percent increase from
the $324 million balance at the end of 2005. * Total debt was $510
million, a decrease of $95 million from year-end 2005. At year end,
the debt balance excludes $69 million of receivables that were sold
under a factoring facility. Debt-to-capitalization was 15 percent,
a decrease of five percentage points versus the end of 2005. *
Inventory was $2.68 billion compared to $2.21 billion at the end of
the prior year. * Working capital days were 22 compared to 21 at
the end of the prior year. "I'm pleased with the performance of our
business units, particularly in light of the transition issues in
Germany," said William D. Humes, executive vice president and chief
financial officer, Ingram Micro Inc. "Sales growth was strong in
all parts of the world -- from the U.S. to Mexico, Italy, India and
China -- with robust growth in the North American and Asia-Pacific
regions driving sales above our guidance range and analysts'
expectations." Legal Matters As previously disclosed in SEC
filings, the company's Brazilian subsidiary has been assessed for
commercial taxes on its purchase of imported software for the
period January to September 2002. The principal amount of the tax
assessed for this period is $5.9 million. It has been management's
opinion, based upon existing law and the opinion of outside legal
counsel, that the company has valid defenses to the assessment of
these taxes for the 2002 assessed period, as well as any subsequent
periods. Accordingly, no reserve has been established previously
for such potential losses. However, proposed changes to the tax law
were approved by the Brazilian legislature on February 6, 2007, and
submitted to the president for signature on February 9, 2007. If
enacted, it is management's opinion, based upon the opinion of
outside legal counsel, that the company likely will be required to
take a charge of approximately $33 million or $0.19 per diluted
share, which represents $5.9 million of tax for the 2002 assessed
period and $27.1 million of potential tax assessment for the period
from October 2002 through December 2005. The pending statute
provides that no tax is due on such software importation after Jan.
1, 2006. While the tax authorities may seek to impose interest and
penalties in addition to the tax assessed, the company continues to
believe, based on the opinion of outside legal counsel, that it has
valid defenses to the assessment of interest and penalties, which
as of Dec. 30, 2006, potentially amount to approximately $41.6
million. Therefore, the company currently does not anticipate
establishing an additional reserve for interest and penalties.
Management cannot assess the likelihood of the legislation in its
current form being signed by the president. Therefore, the company
anticipates that the $33 million charge relating to the commercial
taxes will be recorded if and when the legislation is enacted. If
the pending legislation is enacted prior to the filing of the
company's 2006 Form 10-K, the charge will be recorded in the fiscal
quarter ended Dec. 30, 2006. If, however, the legislation is
enacted after the filing of the company's 2006 Form 10-K, the
charge will be recorded in the period in which the legislation is
enacted. Fiscal Year Results Fiscal 2006 sales and net income hit
record levels. Of the $31.36 billion in worldwide sales for the
year ended Dec. 30, 2006, North America generated 43 percent of
revenues at $13.58 billion (an 11-percent increase over the prior
year); Europe generated 34 percent of revenues at $10.75 billion (a
3-percent increase over the prior year); Asia-Pacific generated 18
percent of revenues at $5.54 billion (a 14-percent increase over
the prior year); and Latin America generated 5 percent of revenues
at $1.48 billion (a 12-percent increase over the prior year). The
full-year gross margin was 5.37 percent, a decrease of 10 basis
points versus 2005. Worldwide operating income for the full year
was $422.4 million or 1.35 percent of revenues versus $362.2
million or 1.26 percent of revenues for 2005. The 2006 full-year
results included $28.9 million of non-cash stock compensation
expenses and approximately $10.3 million of incremental technology
enhancement costs, which were not included in the prior-year
results. The combined effect of these incremental items represents
approximately 13 basis points of sales for the twelve-month period.
For comparison purposes, operating income on a non-GAAP basis,
excluding major-program costs of $39.2 million, was $401.4 million,
or 1.39 percent of revenues, in the prior-year period. Net income
was $265.8 million or $1.56 per diluted share versus $216.9 million
or $1.32 per diluted share in 2005. For comparison purposes,
full-year net income on a non-GAAP basis -- which excludes
major-program and integration costs and special items -- was $248.4
million or $1.51 per diluted share in the prior year. Capital
expenditures for the full year were $39.2 million, while
depreciation and amortization was $61.2 million. Outlook for the
First Quarter The following statements are based on the company's
current expectations and internal forecasts. These statements are
forward-looking and actual results may differ materially, as
outlined in the company's periodic filings with the Securities and
Exchange Commission. The company's expected results for the first
quarter 2007, ending March 31, 2007, include: * Revenue of $8.10
billion to $8.35 billion. * Net income of $63 million to $70
million, or $0.36 to $0.40 per diluted share. The expected results
are based on approximately 175 million weighted average shares
outstanding and a 28-percent effective tax rate, and excludes the
potential impact of the Brazilian legal matter discussed above.
"Our first-quarter guidance reflects normal seasonality with a
generally solid demand environment throughout the world," said
Spierkel. "The system issues relating to the German warehouse
operations are largely behind us, with customer-service metrics
back to normal levels. Now, the country's focus will now be
directed toward regaining market share and driving sales. The
worldwide initiatives we developed and executed over the last 18
months provided the backbone for superior performance during 2006,
and we expect these will serve us equally well into 2007. We are
looking ahead, focused on growth, superior execution and
innovation." Conference Call and Webcast Additional information
about Ingram Micro's financial results will be presented in a
conference call with presentation slides today at 5 p.m. EST. To
listen to the conference call webcast and view the accompanying
presentation slides, visit the company's Web site at
http://www.ingrammicro.com/ (Investor Relations section). The
conference call is also accessible by telephone at (888) 455-0750
(toll-free within the United States and Canada) or (517) 308-9002
(other countries). The replay of the conference call with
presentation slides will be available for one week at
http://www.ingrammicro.com/ (Investor Relations section) or by
calling (800) 678-3180 or (402) 220-3063 outside the United States
and Canada. Cautionary Statement for the Purpose of the Safe Harbor
Provisions of the Private Securities Litigation Reform Act of 1995
The matters in this press release that are forward-looking
statements, including but not limited to statements about future
revenues, sales levels, operating income, margins, stock-based
compensation expense, integration costs, cost synergies, operating
efficiencies, profitability, market share and rates of return, are
based on current management expectations that involve certain risks
which, if realized, in whole or in part, could cause such
expectations to fail to be achieved and have a material adverse
effect on Ingram Micro's business, financial condition and results
of operations, including, without limitation: (1) intense
competition, regionally and internationally, including competition
from alternative business models, such as manufacturer-to-end-user
selling, which may lead to reduced prices, lower sales or reduced
sales growth, lower gross margins, extended payment terms with
customers, increased capital investment and interest costs, bad
debt risks and product supply shortages; (2) integration of our
acquired businesses and similar transactions involve various risks
and difficulties -- our operations may be adversely impacted by an
acquisition that (i) is not suited for us, (ii) is improperly
executed, or (iii) substantially increases our debt; (3) foreign
exchange rate fluctuations, devaluation of a foreign currency,
adverse governmental controls or actions, political or economic
instability, or disruption of a foreign market, and other related
risks of our international operations may adversely impact our
operations in that country or globally; (4) we may not achieve the
objectives of our process improvement efforts or be able to
adequately adjust our cost structure in a timely fashion to remain
competitive, which may cause our profitability to suffer; (5) our
failure to attract new sources of profitable business from
expansion of products or services or risks associated with entry
into new markets, including geographies, products and services,
could negatively impact our future operating results; (6) an
interruption or failure of or disruptions due to changes to our
information systems or subversion of access or other system
controls may result in a significant loss of business, assets, or
competitive information and may adversely impact our results of
operations; (7) significant changes in supplier terms, such as
higher thresholds on sales volume before distributors may qualify
for discounts and/or rebates, the overall reduction in the amount
of incentives available, reduction or termination of price
protection, return levels, or other inventory management programs,
or reductions in payment terms, may adversely impact our results of
operations or financial condition; (8) termination of a supply or
services agreement with a major supplier or product supply
shortages may adversely impact our results of operations; (9)
changes in, or interpretations of, tax rules and regulations may
adversely affect our effective tax rates or we may be required to
pay additional tax assessments; (10) we cannot predict with
certainty, the outcome of the SEC and U.S. Attorney's inquiries or
assessments by Brazilian taxing authorities; (11) if there is a
downturn in economic conditions for an extended period of time, it
will likely have an adverse impact on our business; (12) we may
experience loss of business from one or more significant customers,
and an increased risk of credit loss as a result of reseller
customers' businesses being negatively impacted by dramatic changes
in the information technology products and services industry as
well as intense competition among resellers -- increased losses, if
any, may not be covered by credit insurance or we may not be able
to obtain credit insurance at reasonable rates or at all; (13)
rapid product improvement and technological change resulting in
inventory obsolescence or changes in demand may result in a decline
in value of a portion of our inventory; (14) future terrorist or
military actions could result in disruption to our operations or
loss of assets, in certain markets or globally; (15) the loss of a
key executive officer or other key employees, or changes affecting
the work force such as government regulations, collective
bargaining agreements or the limited availability of qualified
personnel, could disrupt operations or increase our cost structure;
(16) changes in our credit rating or other market factors may
increase our interest expense or other costs of capital, or capital
may not be available to us on acceptable terms to fund our working
capital needs; (17) our failure to adequately adapt to industry
changes and to manage potential growth and/or contractions could
negatively impact our future operating results; (18) future
periodic assessments required by current or new accounting
standards such as those relating to long-lived assets, goodwill and
other intangible assets and expensing of stock options may result
in additional non-cash charges; (19) seasonal variations in the
demand for products and services, as well as the introduction of
new products, may cause variations in our quarterly results; and
(20) the failure of certain shipping companies to deliver product
to us, or from us to our customers, may adversely impact our
results of operations. Ingram Micro has instituted in the past and
continues to institute changes to its strategies, operations and
processes to address these risk factors and to mitigate their
impact on Ingram Micro's results of operations and financial
condition. However, no assurances can be given that Ingram Micro
will be successful in these efforts. For a further discussion of
significant factors to consider in connection with forward-looking
statements concerning Ingram Micro, reference is made to Item 1A
Risk Factors of Ingram Micro's Annual Report on Form 10-K for the
year ended December 31, 2005; other risks or uncertainties may be
detailed from time to time in Ingram Micro's future SEC filings.
Ingram Micro disclaims any duty to update any forward-looking
statements. About Ingram Micro Inc. As a vital link in the
technology value chain, Ingram Micro creates sales and
profitability opportunities for vendors and resellers through
unique marketing programs, outsourced logistics services, technical
support, financial services, and product aggregation and
distribution. The company serves 140 countries and is the only
global broadline IT distributor with operations in Asia. Visit
http://www.ingrammicro.com/. (C) 2007 Ingram Micro Inc. All rights
reserved. Ingram Micro and the registered Ingram Micro logo are
trademarks used under license by Ingram Micro Inc. Ingram Micro
Inc. Consolidated Balance Sheet (Dollars in 000s) (Unaudited)
December 30, December 31, 2006 2005 ASSETS Current assets: Cash and
cash equivalents $333,339 $324,481 Trade accounts receivable, net
3,316,723 3,186,115 Inventories 2,682,558 2,208,660 Other current
assets 413,453 352,042 Total current assets 6,746,073 6,071,298
Property and equipment, net 171,435 179,435 Goodwill 643,714
638,416 Other 143,085 145,841 Total assets $7,704,307 $7,034,990
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts
payable $3,788,605 $3,476,845 Accrued expenses 440,383 479,422
Current maturities of long-term debt 238,793 149,217 Total current
liabilities 4,467,781 4,105,484 Long-term debt, less current
maturities 270,714 455,650 Other liabilities 45,337 35,258 Total
liabilities 4,783,832 4,596,392 Stockholders' equity 2,920,475
2,438,598 Total liabilities and stockholders' equity $7,704,307
$7,034,990 Ingram Micro Inc. Consolidated Statement of Income
(Dollars in 000s, except per share data) (Unaudited) Thirteen Weeks
Ended December 30, December 31, 2006 2005 Net sales $8,852,793
$7,956,500 Cost of sales 8,370,426 7,510,340 Gross profit 482,367
446,160 Operating expenses: Selling, general and administrative(1)
340,710 309,119 Reorganization costs (credits) (23) 5,317 340,687
314,436 Income from operations 141,680 131,724 Interest and other
16,047 10,825 Income before income taxes 125,633 120,899 Provision
for income taxes 33,891 36,542 Net income $91,742 $84,357 Diluted
earnings per share: Net income $0.53 $0.51 Diluted weighted average
shares outstanding 174,065,664 166,516,907 (1) Stock-based
compensation expense of $6,702 was recognized for the thirteen
weeks ended December 30, 2006 in accordance with Statement of
Financial Accounting Standards No. 123 (revised 2004), "Share-Based
Payment," which was adopted effective January 1, 2006. Ingram Micro
Inc. Consolidated Statement of Income (Dollars in 000s, except per
share data) (Unaudited) Fifty-two Weeks Ended December 30, December
31, 2006 2005 Net sales $31,357,477 $28,808,312 Cost of sales
29,672,192 27,233,334 Gross profit 1,685,285 1,574,978 Operating
expenses: Selling, general and administrative(1) 1,264,568
1,196,516 Reorganization costs (credits) (1,727) 16,276 1,262,841
1,212,792 Income from operations 422,444 362,186 Interest and other
55,111 60,249 Income before income taxes 367,333 301,937 Provision
for income taxes 101,567 85,031 Net income $265,766 $216,906
Diluted earnings per share: Net income $1.56 $1.32 Diluted weighted
average shares outstanding 170,875,794 164,331,166 (1) Stock-based
compensation expense of $28,875 was recognized for the fifty-two
weeks ended December 30, 2006 in accordance with Statement of
Financial Accounting Standards No. 123 (revised 2004), "Share-Based
Payment," which was adopted effective January 1, 2006. Ingram Micro
Inc. Supplementary Information Reconciliation of GAAP to Non-GAAP
Financial Measures (Dollars in 000s, except per share data)
(Unaudited) Thirteen Weeks Ended December 31, 2005 Non-GAAP As
Reported Financial Under GAAP Special Items Measure Operating
expenses $314,436 (d) $(8,190) (a) $306,246 (d) Income from
operations 131,724 8,190 (a) 139,914 Net income 84,357 5,662 (b)
90,019 Diluted earnings per share $0.51 $0.03 (c) $0.54 (a)
Includes: (1) costs associated with the Company's outsourcing and
optimization plan in North America, comprised of reorganization
costs of $3,330, primarily related to employee termination benefits
for workforce reductions and lease exit costs for facility
consolidations, and $2,251 charged to selling, general and
administrative expenses, primarily comprised of consulting,
retention and other transition costs, as well as incremental
depreciation of fixed assets resulting from the reduction in useful
lives to coincide with the facility closures; and (2) costs
associated with the integration of Tech Pacific in Asia-Pacific,
comprised of reorganization costs of $2,034, primarily related to
employee termination benefits for workforce reductions and lease
exit costs for facility consolidations, and $622 charged to
selling, general and administrative expenses, primarily comprised
of consulting and incremental depreciation of fixed assets
resulting from the reduction in useful lives to coincide with the
facility closures; and (3) partially offset by a credit adjustment
of $47 in Europe for lower than expected costs to settle lease
obligations related to previous actions. (b) Includes adjustments
noted in footnote (a) above, less estimated income taxes, as well
the reversal of deferred tax liabilities of $184 related to the
gain on sale of available-for-sale securities in 1999 and 2000. (c)
Includes adjustments noted in footnote (b) above on a per share
basis, calculated by dividing the adjusted amounts by the diluted
weighted average shares outstanding of 166,516,907. (d) As a
percentage of net sales, GAAP operating expenses for the thirteen
weeks ended December 31, 2005 represented 3.95% and non-GAAP
operating expenses represented 3.85%. For comparative purposes,
operating expenses for the thirteen weeks ended December 30, 2006
represented 3.85% of net sales. Ingram Micro Inc. Supplementary
Information Reconciliation of GAAP to Non-GAAP Financial Measures
(Dollars in 000s, except per share data) (Unaudited) Fifty-two
Weeks Ended December 31, 2005 Non-GAAP As Reported Financial Under
GAAP Special Items Measure Operating expenses $1,212,792 (d)
$(39,211) (a) $1,173,581 (d) Income from operations 362,186 39,211
(a) 401,397 Net income 216,906 31,459 (b) 248,365 Diluted earnings
per share $1.32 $0.19 (c) $1.51 (a) Includes: (1) costs associated
with the Company's outsourcing and optimization plan in North
America, comprised of reorganization costs of $9,649, primarily
related to employee termination benefits for workforce reductions,
lease exit costs for facility consolidations and an adjustment
related to a previous action for a higher than expected lease
obligation, and $16,933 charged to selling, general and
administrative expenses, primarily comprised of consulting,
retention and other transition costs, as well as incremental
depreciation of fixed assets resulting from the reduction in useful
lives to coincide with the facility closures; and (2) costs
associated with the integration of Tech Pacific in Asia-Pacific,
comprised of reorganization costs of $6,709, primarily related to
employee termination benefits for workforce reductions and lease
exit costs for facility consolidations, and $6,002 charged to
selling, general and administrative expenses, primarily comprised
of consulting, retention and other costs associated with the
integration, as well as incremental depreciation of fixed assets
resulting from the reduction in useful lives to coincide with the
facility closures associated with the integration; and (3)
partially offset by credit adjustments of $82 in Europe for lower
than expected costs to settle lease obligations related to previous
actions. (b) Includes adjustments noted in footnote (a) above as
well as a pre-tax charge of $8,413 on the redemption of the
Company's senior subordinated notes and termination of related
interest-rate swap agreements, less estimated income taxes related
to these items; and an income tax benefit of $2,385 for the
reversal of previously accrued state income taxes related to gains
on the sale of securities in 1999 and 2000. (c) Includes
adjustments noted in footnote (b) above on a per share basis
calculated by dividing the adjusted amounts by the diluted weighted
average shares outstanding of 164,331,166. (d) As a percentage of
net sales, GAAP operating expenses for the fifty-two weeks ended
December 31, 2005 represented 4.21% and non-GAAP operating expenses
represented 4.07%. For comparative purposes, operating expenses for
the fifty-two weeks ended December 30, 2006 represented 4.03% of
net sales. Ingram Micro Inc. Supplementary Information Income from
Operations (Dollars in 000s) (Unaudited) Thirteen Weeks Ended
December 30, 2006 Operating Operating Net Sales Income Margin North
America $3,676,471 $64,632 1.76% Europe 3,232,104 49,152 1.52%
Asia-Pacific 1,500,655 22,793 1.52% Latin America 443,563 11,805
2.66% Reconciling amount (stock-based compensation under SFAS 123R)
-- (6,702) -- Consolidated Total $8,852,793 $141,680 1.60% Ingram
Micro Inc. Supplementary Information Income from Operations
(Dollars in 000s) (Unaudited) Thirteen Weeks Ended December 31,
2005 GAAP Non-GAAP Operating Special Operating Net Sales Income
Items (a) Income North America $3,273,477 $55,075 $5,581 $60,656
Europe 3,012,510 57,106 (47) 57,059 Asia-Pacific 1,250,149 8,882
2,656 11,538 Latin America 420,364 10,661 -- 10,661 Consolidated
Total $7,956,500 $131,724 $8,190 $139,914 GAAP Non-GAAP Operating
Special Operating Margin Items Margin (b) North America 1.68% 0.17%
1.85% Europe 1.90% (0.01%) 1.89% Asia-Pacific 0.71% 0.21% 0.92%
Latin America 2.54% -- 2.54% Consolidated Total 1.66% 0.10% 1.76%
(a) Special items in 2005 include: (1) costs associated with the
Company's outsourcing and optimization plan in North America,
comprised of reorganization costs of $3,330, primarily related to
employee termination benefits for workforce reductions and lease
exit costs for facility consolidations, and $2,251 charged to
selling, general and administrative expenses, primarily comprised
of consulting, retention and other transition costs, as well as
incremental depreciation of fixed assets resulting from the
reduction in useful lives to coincide with the facility closures;
and (2) costs associated with the integration of Tech Pacific in
Asia-Pacific, comprised of reorganization costs of $2,034,
primarily related to employee termination benefits for workforce
reductions and lease exit costs for facility consolidations, and
$622 charged to selling, general and administrative expenses,
primarily comprised of consulting and incremental depreciation of
fixed assets resulting from the reduction in useful lives to
coincide with the facility closures; and (3) partially offset by a
credit adjustment of $47 in Europe for lower than expected costs to
settle lease obligations related to previous actions. (b) Non-GAAP
operating margin is calculated by dividing non-GAAP operating
income by net sales. Ingram Micro Inc. Supplementary Information
Income from Operations (Dollars in 000s) (Unaudited) Fifty-two
Weeks Ended December 30, 2006 Operating Operating Net Sales Income
Margin North America $13,584,978 $225,183 1.66% Europe 10,753,995
126,823 1.18% Asia-Pacific 5,537,485 69,373 1.25% Latin America
1,481,019 29,940 2.02% Reconciling amount (stock-based compensation
under SFAS 123R) -- (28,875) -- Consolidated Total $31,357,477
$422,444 1.35% Ingram Micro Inc. Supplementary Information Income
from Operations (Dollars in 000s) (Unaudited) Fifty-two Weeks Ended
December 31, 2005 GAAP Non-GAAP Operating Special Operating Net
Sales Income Items (a) Income North America $12,216,790 $157,624
$26,582 $184,206 Europe 10,424,026 143,377 (82) 143,295
Asia-Pacific 4,843,135 39,768 12,711 52,479 Latin America 1,324,361
21,417 -- 21,417 Consolidated Total $28,808,312 $362,186 $39,211
$401,397 GAAP Non-GAAP Operating Special Operating Margin Items
Margin (b) North America 1.29% 0.22% 1.51% Europe 1.38% (0.01%)
1.37% Asia-Pacific 0.82% 0.26% 1.08% Latin America 1.62% -- 1.62%
Consolidated Total 1.26% 0.13% 1.39% (a) Special items in 2005
include: (1) costs associated with the Company's outsourcing and
optimization plan in North America, comprised of reorganization
costs of $9,649, primarily related to employee termination benefits
for workforce reductions, lease exit costs for facility
consolidations and an adjustment related to a previous action for a
higher than expected lease obligation, and $16,933 charged to
selling, general and administrative expenses, primarily comprised
of consulting, retention and other transition costs, as well as
incremental depreciation of fixed assets resulting from the
reduction in useful lives to coincide with the facility closures;
and (2) costs associated with the integration of Tech Pacific in
Asia-Pacific, comprised of reorganization costs of $6,709,
primarily related to employee termination benefits for workforce
reductions and lease exit costs for facility consolidations, and
$6,002 charged to selling, general and administrative expenses,
primarily comprised of consulting, retention and other costs
associated with the integration, as well as incremental
depreciation of fixed assets resulting from the reduction in useful
lives to coincide with the facility closures associated with the
integration; and (3) partially offset by credit adjustments of $82
in Europe for lower than expected costs to settle lease obligations
related to previous actions. (b) Non-GAAP operating margin is
calculated by dividing non-GAAP operating income by net sales.
DATASOURCE: Ingram Micro Inc. CONTACT: Media, Jim Trainor,
+1-714-382-2378, , or Chris Kelly, +1-714-382-3355, , or Investors,
Ria Marie Carlson, +1-714-382-4400, , or Kay Leyba,
+1-714-382-4175, , all of Ingram Micro Inc. Web site:
http://www.ingrammicro.com/
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