SANTA ANA, Calif., April 26, 2012 /PRNewswire/ -- Ingram Micro Inc.
(NYSE: IM), the world's largest technology distributor and
supply-chain services provider, today announced financial results
for the 2012 first quarter ended Mar.
31, 2012.
Worldwide sales of $8.64 billion
were 1 percent lower than last year's record first quarter revenues
of $8.72 billion, largely reflecting
the translation effect of foreign currencies, which had a negative
impact of 1 percent on the prior year comparison.
Worldwide gross profit was $467.6
million (5.41 percent of total sales), compared with
$454.1 million (5.21 percent of total
sales) in the 2011 first quarter. 2012 first quarter gross
margin benefited by approximately 10 basis points from residual
favorable pricing impacts from hard disk drives, predominantly in
North America.
2012 first quarter net income increased to $90.0 million, or 58
cents per diluted share, which includes an aggregate benefit
of approximately 15 cents per diluted
share, for the following items:
- A net discrete tax benefit of $28.5
million, or 18 cents per
diluted share, substantially all of which relates to the write-off
of the historical tax basis the company has maintained in one of
its Latin American subsidiary holding companies, which was realized
in the quarter;
- A negative impact from charges totaling $3.1 million pretax, or 1
cent per diluted share, in costs associated with the
transition of the company's chief executive officer and
implementation of various cost-cutting initiatives during the
quarter; and
- Losses of $4.8 million pretax, or
2 cents per diluted share, due to the
foreign-currency translation impact on Euro-based inventory
purchases in the company's pan-European entity, which designates
the United States dollar as its
functional currency. The foreign-currency related charge is a
function of the timing of currency fluctuations within the quarter
and should be recovered as the inventory is sold subsequent to the
first quarter. This is similar to the company's experience in
previous years, including the 2011 first quarter when the company
incurred $4.9 million in foreign
currency losses for the same reason.
2011 first quarter net income was $56.3
million, or 34 cents per
diluted share, which included a benefit of approximately
$5 million, or 2 cents per diluted share, related to a release
of certain bad debt reserves in North
America and a negative impact of $4.9
million, or 2 cents per
diluted share, related to foreign currency translation losses as
detailed above.
Further detail can be found in the financial statements and
schedules attached to this news release or at
www.ingrammicro.com.
Key 2012 first quarter highlights:
- North America demonstrated
strong leverage with operating income increasing 18 percent on a 3
percent increase in sales, driven in-part by additional benefit
from favorable hard disk drive pricing, double digit sales growth
in the company's specialty business portfolio and improvements in
the fee-for-service logistics business. 2012 first quarter North
American results also include costs of $2.5
million, or 7 basis points of North American sales,
associated with the company's CEO transition.
- Sales in Latin America hit an
all-time high for a first quarter and the region increased its
already solid operating profitability.
- Asia Pacific sales hit an
all-time first quarter high, led by double digit growth in
China and India.
- Australia improved gross
margins and reduced its operating loss compared with the 2011 first
quarter.
- Europe's year-over-year
decrease in sales was tempered by relative strength in Germany and the United Kingdom, both of which experienced
modest sales growth versus the 2011 first quarter.
- Working capital days were 25, within the company's targeted
range of 22 to 26 days.
"We continued the positive momentum with which we exited
2011, delivering solid first quarter results highlighted by
improved profitability and strong sales in our higher margin
businesses," said Alain Monie,
president and chief executive officer, Ingram Micro Inc. "We opened
the year well and we are beginning to reap the rewards from our
efforts on many fronts. We still have areas for improvement and I
look forward to building on our momentum and driving continued
execution towards our strategic and financial goals."
Bill Humes, chief operating and
financial officer, commented: "The team did a good job delivering
an overall return on invested capital for the quarter that was well
above our weighted average cost of capital and maintaining working
capital days within our targeted range of 22 to 26 days. We will
continue to invest in the business to drive even stronger returns
through accelerated growth and higher margin products and
solutions, while effectively managing our operating expense
leverage."
Outlook
For the 2012 second quarter, sales are expected to be flat to
slightly up sequentially. 2012 second quarter gross margin is
expected to trend down sequentially, reflecting the removal of the
residual benefit from hard disk drive pricing realized in the 2012
first quarter, as well as normal seasonal declines such as lower
fee-based logistics business.
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. ET. To listen
to the conference call webcast and view the accompanying
presentation slides, visit the company's website at
www.ingrammicro.com (Investor Relations section). The conference
call is also accessible by telephone at (877) 960-9067 (toll-free
within the United States and
Canada) or (210) 839-8501 (other
countries), passcode "Ingram Micro."
The replay of the conference call with presentation slides will
be available for one week at www.ingrammicro.com (Investor
Relations section) or by calling (866) 465-0333 or (203) 369-1415
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 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) 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 earnings; (2) changes in macro-economic 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; (3) we continually
experience intense competition across all markets for our products
and services; (4) we operate a global business that exposes us to
risks associated with conducting business in multiple
jurisdictions; (5) our failure to adequately adapt to IT industry
changes could negatively impact our future operating results; (6)
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; (7) 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; (8)
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; (9) 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;
(10) 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; (11) failure to retain and recruit key personnel would
harm our ability to meet key objectives; (12) 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; (13) 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; (14) 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; (15) changes in accounting rules could
adversely affect our future operating results; and (16) 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
Dec. 31, 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 145 countries on six
continents with the world's most comprehensive portfolio of IT
products and services. Visit www.ingrammicro.com.
© 2012 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
|
(Amounts in 000s)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
March
31,
|
|
December 31,
|
|
2012
|
|
2011
|
|
|
|
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and
cash equivalents
|
$991,159
|
|
$891,403
|
Trade
accounts receivable, net
|
3,880,991
|
|
4,465,329
|
Inventory
|
3,180,233
|
|
2,942,164
|
Other
current assets
|
348,293
|
|
319,506
|
|
|
|
|
Total
current assets
|
8,400,676
|
|
8,618,402
|
|
|
|
|
Property
and equipment, net
|
337,798
|
|
323,261
|
Intangible
assets, net
|
71,107
|
|
73,330
|
Other
assets
|
118,465
|
|
131,523
|
|
|
|
|
Total
assets
|
$8,928,046
|
|
$9,146,516
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$4,625,686
|
|
$4,893,437
|
Accrued
expenses
|
394,484
|
|
524,010
|
Short-term
debt and current maturities of long-term debt
|
88,286
|
|
92,428
|
|
|
|
|
Total
current liabilities
|
5,108,456
|
|
5,509,875
|
|
|
|
|
Long-term
debt, less current maturities
|
300,000
|
|
300,000
|
Other
liabilities
|
83,345
|
|
63,864
|
|
|
|
|
Total
liabilities
|
5,491,801
|
|
5,873,739
|
|
|
|
|
Stockholders' equity
|
3,436,245
|
|
3,272,777
|
|
|
|
|
Total
liabilities and stockholders' equity
|
$8,928,046
|
|
$9,146,516
|
|
|
|
|
Ingram
Micro Inc.
|
Consolidated Statement of Income
|
(Amounts in 000s, except per share
data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks Ended
|
|
March
31, 2012
|
|
April
2, 2011
|
|
|
|
|
Net
sales
|
$8,635,381
|
|
$8,723,712
|
Cost of
sales
|
8,167,824
|
|
8,269,640
|
Gross
profit
|
467,557
|
|
454,072
|
|
|
|
|
Operating
expenses:
|
|
|
|
Selling,
general and administrative
|
362,949
|
|
354,287
|
Reorganization costs (credits)
|
557
|
|
(269)
|
|
363,506
|
(a)
|
354,018
|
|
|
|
|
Income
from operations
|
104,051
|
|
100,054
|
|
|
|
|
Interest
and other:
|
|
|
|
Interest
income
|
(3,766)
|
|
(1,373)
|
Interest
expense
|
11,729
|
|
13,195
|
Net
foreign currency exchange loss
|
5,566
|
|
3,009
|
Other
|
1,932
|
|
3,818
|
|
15,461
|
|
18,649
|
|
|
|
|
Income
before income taxes
|
88,590
|
|
81,405
|
|
|
|
|
Provision
for (benefit from) income taxes
|
(1,383)
|
(b)
|
25,095
|
|
|
|
|
Net
income
|
$89,973
|
|
$56,310
|
|
|
|
|
Diluted
earnings per share
|
$0.58
|
|
$0.34
|
|
|
|
|
Diluted
weighted average
|
|
|
|
shares
outstanding
|
154,584
|
|
164,444
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) The
thirteen weeks ended March 31, 2012 included net reorganization
costs of $557 (0.01% of consolidated net sales)
|
comprised
of $301 in Asia-Pacific (0.02% of Asia-Pacific net sales), $224 in
Latin America (0.05% of Latin America net sales),
|
and $32 in
North America, primarily for employee termination for workforce
reductions. Also included in SG&A
expenses
|
and
recorded as part of the North America results was $2,500 (0.03% of
consolidated net sales and 0.07% of North America
|
net sales)
of costs associated with the transition of our chief executive
officer. These charges aggregate to approximately
|
$0.01 per
diluted share.
|
|
|
|
|
|
|
|
(b) The benefit from income taxes in the
thirteen weeks ended March 31, 2012 included net discrete benefits
of approximately
|
$28,500,
or $0.18 per diluted share, primarily related to the write-off of
the historical tax basis of the investment we have
|
maintained
in one of our Latin American subsidiary holding companies, realized
in the current period.
|
|
|
|
|
|
|
|
|
Ingram
Micro Inc.
|
Supplementary Information
|
Income
from Operations
|
(Amounts in 000s)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks Ended March 31, 2012
|
|
|
|
|
Operating
|
|
Operating
|
|
|
Net
Sales
|
|
Income
(a)
|
|
Margin
|
|
|
|
|
|
|
|
North
America
|
|
$3,606,947
|
|
$69,649
|
|
1.93%
|
Europe
|
|
2,647,056
|
|
22,000
|
|
0.83%
|
Asia-Pacific
|
|
1,949,752
|
|
14,420
|
|
0.74%
|
Latin
America
|
|
431,626
|
|
7,428
|
|
1.72%
|
Stock-based compensation expense
|
|
-
|
|
(9,446)
|
|
-
|
|
|
|
|
|
|
|
Consolidated Total
|
|
$8,635,381
|
|
$104,051
|
|
1.20%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks Ended April 2, 2011
|
|
|
|
|
Operating
|
|
Operating
|
|
|
Net
Sales
|
|
Income
|
|
Margin
|
|
|
|
|
|
|
|
North
America
|
|
$3,506,433
|
|
$59,148
|
|
1.69%
|
Europe
|
|
2,876,233
|
|
32,082
|
|
1.12%
|
Asia-Pacific
|
|
1,933,996
|
|
8,214
|
|
0.42%
|
Latin
America
|
|
407,050
|
|
6,267
|
|
1.54%
|
Stock-based compensation expense
|
|
-
|
|
(5,657)
|
|
-
|
|
|
|
|
|
|
|
Consolidated Total
|
|
$8,723,712
|
|
$100,054
|
|
1.15%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
See note (a) on the consolidated statement of income.
|
|
|
|
|
|
|
|
|
|
|
(Logo: http://photos.prnewswire.com/prnh/20100107/IMLOGO)
SOURCE Ingram Micro Inc.