SANTA ANA, Calif., July 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 second quarter ended June 30,
2012.
Worldwide sales, which were essentially flat in U.S. dollars at
$8.78 billion when compared with
$8.75 billion for the second quarter
last year, demonstrated relatively strong local currency growth in
all regions. The translation effect of foreign currencies had a
negative impact of 5 percent on worldwide sales growth as compared
with the prior year.
Worldwide gross profit was $452.7
million (5.16 percent of total sales), compared with
$459.2 million (5.25 percent of total
sales) in the 2011 second quarter. 2012 second quarter gross profit
was lower than the year earlier period primarily due to a greater
mix of sales in high-volume, lower margin products and in lower
margin customer segments, as well as a competitive selling
environment.
2012 second quarter net income was $61.3
million, or 40 cents per
diluted share, which includes an aggregate net positive impact of
1 cent per diluted share for the
following items:
- A negative impact from acquisition-related costs totaling
approximately $4.0 million pretax, or
2 cents per diluted share;
- A negative impact from charges totaling $2.1 million pretax, or 1
cent per diluted share, primarily related to asset
impairments associated with the closure of our operations in
Argentina;
- A positive impact from a net gain of $1.6 million pretax, or 1
cent per diluted share, due to the foreign-currency
translation impact on Euro-based inventory purchases in the
company's pan-European purchasing entity, which designates
the United States dollar as its
functional currency; and
- A positive impact from a net discrete tax benefit totaling
approximately $4.4 million, or
3 cents per diluted share, recognized
in the quarter as a result of the lapse of the statute of
limitations and its impact on a tax-related reserve in Australia, and positive adjustments resulting
from the resolution of portions of an Internal Revenue Service
audit in the U.S.
2011 second quarter net income was $59.7
million, or 37 cents per
diluted share, which included a positive impact of a net gain of
$2.6 million pretax, or 1 cent per diluted share, due to the
foreign-currency translation impact on Euro-based inventory
purchases in the company's pan-European entity.
Further detail can be found in the financial statements and
schedules attached to this news release or at
www.ingrammicro.com.
Key 2012 second quarter highlights:
- North America's sales grew
year-over-year for the 10th consecutive quarter, up 2
percent versus the year earlier period, driven in part by
double-digit growth in the region's specialty businesses of DBL
accessories, data capture/point of sale and physical security, as
well as solid sales increases in the company's higher value
enterprise technology offerings.
- Sales in Latin America hit an
all-time high for a second quarter growing 14 percent, despite a 13
percentage point negative impact to sales growth from the
translation impact of weaker local currencies.
- Asia Pacific sales were up 4
percent in U.S. dollars, but were much stronger in local
currencies, considering the negative 5 percent impact to sales
growth from the translation of weaker local currencies. Sales for
the region reached an all-time second quarter high, driven by
strong double-digit growth in China and India.
- In Europe, while sales were
down in U.S. dollars by 7 percent, demand was solid in local
currencies led by double-digit growth in Germany and the United Kingdom. The translation impact of
weaker local currencies negatively affected growth by 10 percentage
points.
- During the second quarter, the company purchased 2.7 million
shares of Ingram Micro stock for an aggregate of $50 million. Since the 3-year, $400 million repurchase program was announced on
Oct. 28, 2010, 15.2 million shares
have been purchased for an aggregate of $275.9 million.
- Working capital days were 25, within the company's targeted
range of 22 to 26 days.
"We had another solid quarter, with strong sales in many
countries, particularly relative to overall IT spending," said
Alain Monie, president and chief
executive officer, Ingram Micro Inc. "We are executing on our
strategic initiatives. We continue to invest organically in
the business across all regions to fuel future accelerated growth
in higher margin markets and the business is absorbing these
investments while still generating solid operating margins. We are
also delivering on our M&A strategy to accelerate our presence
in high-growth and higher value markets, as we recently announced
the signing of a definitive agreement to acquire BrightPoint Inc.,
a global leader in providing device lifecycle services to the
mobility industry. We are moving the business in the right
direction and we remain highly focused on driving further
improvements across the company."
Bill Humes, chief operating and
financial officer, commented: "As illustrated by strong operating
expense leverage, we are doing a good job aligning costs with the
level and mix of sales in each region. Our relatively robust local
currency growth rates are being fueled in-part by high-volume sales
of lower gross margin products. The cost to serve these
markets is low and the working capital dynamics and contribution
margin are acceptable, leading to solid returns on investment. I am
pleased with our performance in what continues to be a challenging
selling environment throughout much of the world and look forward
to our continued execution on our stated financial and strategic
initiatives."
Six-Month Period
For the six months ended June 30,
2012, worldwide sales were $17.4
billion, with gross profit of $920.3
million (5.28 percent of total sales), compared with
worldwide sales of $17.5 billion,
with gross profit of $913.3 million
(5.23 percent of total sales) for last year's six-month
period. Six-month net income for 2012 was $151.2 million, or 98
cents per diluted share, versus $116.0 million, or 71
cents per diluted share, for the 2011 six-month period.
Outlook
Given the current macroeconomic environment, the company expects
sales for the 2012 third quarter to be flat sequentially with the
2012 second quarter and expects gross margins to remain under
pressure. The company will also incur incremental interest
costs of approximately $2 million in
the third quarter associated with the bridge financing facility
entered into at the time of the BrightPoint acquisition
announcement.
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 (800) 369-2005 (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 (888) 562-2781 or (402) 998-1437
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.
We also face a variety of risks associated with our recently
announced signing of a definitive agreement to acquire BrightPoint
Inc., including: our ability to timely complete the
transaction, if at all; our ability to complete the transaction
considering the various closing conditions, including those
conditions related to regulatory approvals and BrightPoint
shareholder approval; the financial performance of BrightPoint and
Ingram Micro through the completion of the merger; BrightPoint's
business may not perform as expected due to transaction-related
uncertainty or other factors; the ability of BrightPoint and Ingram
Micro to retain relationships with customers, vendors and carriers;
management's ability to execute its plans, strategies and
objectives for future operations, including the execution of
integration plans; growth of the mobility industry;
uncertainties relating to litigation, including pending
and future BrightPoint shareholder lawsuits related to the proposed
or completed transaction; and other unknown, underestimated and/or
undisclosed commitments or liabilities; our ability
to maintain access to adequate levels of capital at reasonable
rates and to enter into and consummate the senior unsecured bridge
loan facility for up to $300 million
for which we have entered into a commitment letter; and our
ability to achieve the expected benefits and manage the expected
costs of the transaction.
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)
|
|
|
|
|
|
|
|
|
|
June
30,
|
|
December 31,
|
|
2012
|
|
2011
|
|
|
|
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and
cash equivalents
|
$
981,244
|
|
$
891,403
|
Trade
accounts receivable, net
|
3,689,677
|
|
4,465,329
|
Inventory
|
3,194,271
|
|
2,942,164
|
Other
current assets
|
336,398
|
|
319,506
|
|
|
|
|
Total
current assets
|
8,201,590
|
|
8,618,402
|
|
|
|
|
Property
and equipment, net
|
344,287
|
|
323,261
|
Intangible
assets, net
|
67,521
|
|
73,330
|
Other
assets
|
139,443
|
|
131,523
|
|
|
|
|
Total
assets
|
$
8,752,841
|
|
$
9,146,516
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
4,408,717
|
|
$
4,893,437
|
Accrued
expenses
|
422,176
|
|
524,010
|
Short-term
debt and current maturities of long-term debt
|
143,437
|
|
92,428
|
|
|
|
|
Total
current liabilities
|
4,974,330
|
|
5,509,875
|
|
|
|
|
Long-term
debt, less current maturities
|
320,470
|
|
300,000
|
Other
liabilities
|
79,583
|
|
63,864
|
|
|
|
|
Total
liabilities
|
5,374,383
|
|
5,873,739
|
|
|
|
|
Stockholders' equity
|
3,378,458
|
|
3,272,777
|
|
|
|
|
Total
liabilities and stockholders' equity
|
$
8,752,841
|
|
$
9,146,516
|
Ingram
Micro Inc.
|
Consolidated Statement of Income
|
(Amounts in 000s, except per share
data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks Ended
|
|
June
30, 2012
|
|
July 2,
2011
|
|
|
|
|
Net
sales
|
$
8,777,895
|
|
$
8,749,025
|
Cost of
sales
|
8,325,165
|
|
8,289,793
|
Gross
profit
|
452,730
|
|
459,232
|
|
|
|
|
Operating
expenses:
|
|
|
|
Selling,
general and administrative
|
354,106
|
|
362,084
|
Reorganization costs
|
839
|
|
-
|
|
354,945
|
|
362,084
|
|
|
|
|
Income
from operations
|
97,785
|
|
97,148
|
|
|
|
|
Interest
and other:
|
|
|
|
Interest
income
|
(2,200)
|
|
(1,251)
|
Interest
expense
|
11,577
|
|
14,318
|
Net
foreign currency exchange loss (gain)
|
1,794
|
|
(2,974)
|
Other
|
3,156
|
|
3,233
|
|
14,327
|
|
13,326
|
|
|
|
|
Income
before income taxes
|
83,458
|
|
83,822
|
|
|
|
|
Provision
for income taxes
|
22,184
|
|
24,091
|
|
|
|
|
Net
income
|
$
61,274
|
|
$
59,731
|
|
|
|
|
Diluted
earnings per share
|
$
0.40
|
|
$
0.37
|
|
|
|
|
Diluted
weighted average
|
|
|
|
shares
outstanding
|
154,020
|
|
162,673
|
Ingram
Micro Inc.
|
Consolidated Statement of Income
|
(Amounts in 000s, except per share
data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Twenty-six Weeks Ended
|
|
June
30, 2012
|
|
July 2,
2011
|
|
|
|
|
Net
sales
|
$
17,413,276
|
|
$
17,472,737
|
Cost of
sales
|
16,492,989
|
|
16,559,433
|
Gross
profit
|
920,287
|
|
913,304
|
|
|
|
|
Operating
expenses:
|
|
|
|
Selling,
general and administrative
|
717,055
|
|
716,371
|
Reorganization costs (credits)
|
1,396
|
|
(269)
|
|
718,451
|
|
716,102
|
|
|
|
|
Income
from operations
|
201,836
|
|
197,202
|
|
|
|
|
Interest
and other:
|
|
|
|
Interest
income
|
(5,966)
|
|
(2,624)
|
Interest
expense
|
23,306
|
|
27,513
|
Net
foreign currency exchange loss
|
7,360
|
|
35
|
Other
|
5,088
|
|
7,051
|
|
29,788
|
|
31,975
|
|
|
|
|
Income
before income taxes
|
172,048
|
|
165,227
|
|
|
|
|
Provision
for income taxes
|
20,801
|
|
49,186
|
|
|
|
|
Net
income
|
$
151,247
|
|
$
116,041
|
|
|
|
|
Diluted
earnings per share
|
$
0.98
|
|
$
0.71
|
|
|
|
|
Diluted
weighted average
|
|
|
|
shares
outstanding
|
154,435
|
|
163,828
|
Ingram
Micro Inc.
|
Supplementary Information
|
Income
from Operations
|
(Amounts in 000s)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks Ended June 30, 2012
|
|
|
|
|
Operating
|
|
Operating
|
|
|
Net
Sales
|
|
Income
|
|
Margin
|
|
|
|
|
|
|
|
North
America
|
|
$
3,837,244
|
|
$
68,729
|
|
1.79%
|
Europe
|
|
2,460,141
|
|
14,913
|
|
0.61%
|
Asia-Pacific
|
|
2,038,112
|
|
14,835
|
|
0.73%
|
Latin
America
|
|
442,398
|
|
4,437
|
|
1.00%
|
Stock-based compensation expense
|
|
-
|
|
(5,129)
|
|
-
|
|
|
|
|
|
|
|
Consolidated Total
|
|
$
8,777,895
|
|
$
97,785
|
|
1.11%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks Ended July 2, 2011
|
|
|
|
|
Operating
|
|
Operating
|
|
|
Net
Sales
|
|
Income
|
|
Margin
|
|
|
|
|
|
|
|
North
America
|
|
$
3,760,429
|
|
$
67,589
|
|
1.80%
|
Europe
|
|
2,640,120
|
|
16,914
|
|
0.64%
|
Asia-Pacific
|
|
1,961,844
|
|
16,496
|
|
0.84%
|
Latin
America
|
|
386,632
|
|
6,480
|
|
1.68%
|
Stock-based compensation expense
|
|
-
|
|
(10,331)
|
|
-
|
|
|
|
|
|
|
|
Consolidated Total
|
|
$
8,749,025
|
|
$
97,148
|
|
1.11%
|
Ingram
Micro Inc.
|
Supplementary Information
|
Income
from Operations
|
(Amounts in 000s)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twenty-six Weeks Ended June 30,
2012
|
|
|
|
|
Operating
|
|
Operating
|
|
|
Net
Sales
|
|
Income
|
|
Margin
|
|
|
|
|
|
|
|
North
America
|
|
$
7,444,191
|
|
$
138,377
|
|
1.86%
|
Europe
|
|
5,107,197
|
|
36,914
|
|
0.72%
|
Asia-Pacific
|
|
3,987,864
|
|
29,255
|
|
0.73%
|
Latin
America
|
|
874,024
|
|
11,865
|
|
1.36%
|
Stock-based compensation expense
|
|
-
|
|
(14,575)
|
|
-
|
|
|
|
|
|
|
|
Consolidated Total
|
|
$
17,413,276
|
|
$
201,836
|
|
1.16%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twenty-six Weeks Ended July 2, 2011
|
|
|
|
|
Operating
|
|
Operating
|
|
|
Net
Sales
|
|
Income
|
|
Margin
|
|
|
|
|
|
|
|
North
America
|
|
$
7,266,862
|
|
$
126,736
|
|
1.74%
|
Europe
|
|
5,516,354
|
|
48,997
|
|
0.89%
|
Asia-Pacific
|
|
3,895,840
|
|
24,710
|
|
0.63%
|
Latin
America
|
|
793,681
|
|
12,747
|
|
1.61%
|
Stock-based compensation expense
|
|
-
|
|
(15,988)
|
|
-
|
|
|
|
|
|
|
|
Consolidated Total
|
|
$
17,472,737
|
|
$
197,202
|
|
1.13%
|
(Logo:
http://photos.prnewswire.com/prnh/20100107/IMLOGO)
SOURCE Ingram Micro Inc.