SANTA ANA, Calif., Oct. 17, 2011 /PRNewswire/ -- Ingram Micro Inc.
(NYSE: IM), the world's largest technology distributor and
supply-chain services provider, today provided a preliminary update
on certain expected financial results for the fiscal third quarter
that ended October 1, 2011.
Worldwide sales for the third quarter are expected to be
approximately $8.9 billion, in-line
with the company's expectations and growing modestly in local
currencies compared with both the second quarter of this year and
the third quarter of the prior year.
Third-quarter earnings per share are expected to range from a
non-GAAP $0.32 to $0.34 per share (or
$0.13 to $0.15 on a GAAP basis, which
includes the non-recurring charges described below). Earnings
per share were impacted by the following factors:
- The market-share recovery in Australia following the implementation of a
new enterprise resource planning (ERP) system is progressing at a
slower pace than the company anticipated at the start of the third
quarter. Efforts to restore revenues are requiring additional
marketing costs and competitive pricing actions.
- In Europe, demand was soft
throughout the quarter, particularly in consumer-related segments,
which led to a more competitive environment.
These factors dampened gross margins and operating leverage,
which brought earnings per share below the company's expectations
for the quarter, explained Gregory Spierkel, chief executive
officer.
"Demand in our key customer segment, which serves small and
medium businesses, remained relatively solid in most parts of the
world," Spierkel said. "Most areas of our business are
performing well, outside of the recovery efforts in Australia and the effects of the European
economy. We look forward to providing greater detail on our
operations and results during our conference call with investors on
October 27."
Expected Third-Quarter Charges
The company also expects to record third-quarter charges
totaling approximately $29 million,
or $0.19 per diluted share,
consisting of: a non-cash valuation allowance of
approximately $25 million recorded
against the company's deferred tax assets in Brazil, driven by the continuing losses
generated in that business unit; and, a charge of approximately
$4 million after tax related to the
termination of the company's interest rate swap associated with the
repayment of its $250 million term
loan, which was replaced by a more flexible $750 million revolver in September.
Preliminary Nature of Results
The company has not yet finalized financial results for the 2011
third quarter ended October 1, 2011.
The preliminary estimated financial results described in this
release are unaudited and subject to revision pending the
completion of the accounting and financial reporting processes
necessary to complete the financial closing procedures and
financial statements for the fiscal third quarter ended
October 1, 2011.
Full financial results will be reported on Thursday, October 27, 2011, after the market
close followed by a conference call with executive management at
5 p.m. ET (2
p.m. PT). To join the call, visit the investor
relations section of the company's website at www.ingrammicro.com
or call (888) 455-0750 (US toll-free) or (210) 839-8501 (outside
the United States or Canada). The call password is "Ingram
Micro."
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 are based on current management expectations. Certain
risks may cause such expectations to not be achieved and, in turn,
may have a material adverse effect on Ingram Micro's business,
financial condition and results of operations. Ingram Micro
disclaims any duty to update any forward-looking statements.
Important risk factors that could cause actual results to differ
materially from those discussed in the forward-looking statements
include, without limitation: (1) completion of our accounting and
financial reporting processes and review by our auditors; (2)
we are dependent on a variety of information systems, which, if not
properly functioning, or unavailable, could adversely disrupt our
business and harm our reputation and net sales; (3) changes in
macroeconomic conditions may negatively impact a number of risk
factors which, individually or in the aggregate, could adversely
affect our results of operations, financial condition and cash
flows; (4) we continually experience intense competition across all
markets for our products and services; (5) we operate a global
business that exposes us to risks associated with conducting
business in multiple jurisdictions; (6) our failure to adequately
adapt to IT industry changes could negatively impact our future
operating results; (7) terminations of a supply or services
agreement or a significant change in supplier terms or conditions
of sale could negatively affect our operating margins, revenue or
the level of capital required to fund our operations; (8) we have
made and expect to continue to make investments in new business
strategies and initiatives, including acquisitions, which could
disrupt our business and have an adverse effect on our operating
results; (9) substantial defaults by our customers or the loss of
significant customers could have a negative impact on our business,
results of operations, financial condition or liquidity; (10)
changes in, or interpretations of, tax rules and regulations,
changes in mix of our business amongst different tax jurisdictions,
and deterioration of the performance of our business may adversely
affect our effective income tax rates or operating margins and we
may be required to pay additional taxes and/or tax assessments, as
well as record valuation allowances relating to our deferred tax
assets; (11) changes in our credit rating or other market factors
such as adverse capital and credit market conditions or reductions
in cash flow from operations may affect our ability to meet
liquidity needs, reduce access to capital, and/or increase our
costs of borrowing; (12) failure to retain and recruit key
personnel would harm our ability to meet key objectives; (13) we
cannot predict with certainty what loss we might incur as a result
of litigation matters and contingencies that we may be involved
with from time to time; (14) we may incur material litigation,
regulatory or operational costs or expenses, and may be frustrated
in our marketing efforts, as a result of new environmental
regulations or private intellectual property enforcement disputes;
(15) we face a variety of risks in our reliance on third-party
service companies, including shipping companies for the delivery of
our products and outsourcing arrangements; (16) changes in
accounting rules could adversely affect our future operating
results; and (17) our quarterly results have fluctuated
significantly.
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 fiscal year ended
January 1, 2011; other risks or
uncertainties may be detailed from time to time in Ingram Micro's
future SEC filings.
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,
technical and financial support, managed and cloud-based services,
and product aggregation and distribution. The company is the only
global broad-based IT distributor, serving more than 150 countries
on six continents with the world's most comprehensive portfolio of
IT products and services. Visit www.ingrammicro.com.
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SOURCE Ingram Micro Inc.