Annual Revenues Surpass $28.8 Billion
Net Income Hits a Fourth-Quarter Record, Driving EPS to $0.51 (GAAP) or $0.54 (non-GAAP)
SANTA ANA, Calif., Feb. 14 /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 2005 (ended Dec. 31, 2005).
Worldwide sales for the fourth quarter were $7.96 billion, a 7-percent increase from $7.45 billion in the prior-year period. The translation impact of the relatively weaker European currencies had an approximate four-percentage-point negative effect on comparisons to the prior year. Sales for the 2005 fiscal year were $28.81 billion, a 13-percent increase over 2004.
Fourth-quarter net income and earnings per share hit fourth quarter records. Net income based on generally accepted accounting principles (GAAP) was $84.4 million or $0.51 per diluted share. Net income includes major-program and integration costs of $8.2 million (approximately $5.6 million net of tax or $0.03 per diluted share) related to the company's outsourcing and optimization plan in North America ($5.6 million) and the integration of Tech Pacific ($2.6 million), which the company acquired in November 2004. In the year-ago quarter, GAAP net income was $79.2 million, or $0.48 per diluted share, which includes benefits totaling $14.2 million, or $0.08 per diluted share, as described in the special items section below.
Net income on a non-GAAP basis, which excludes the costs identified above, was $90.0 million, or $0.54 per diluted share, a fourth-quarter record. Year-ago net income on a non-GAAP basis, which excludes the benefits described in the special items section below, was $65.0 million, or $0.40 per diluted share. A reconciliation of these non-GAAP items to GAAP net income can be found in the tables attached to this press release.
"I'm pleased to end the year on a high note after delivering solid results throughout 2005," said Gregory M. Spierkel, chief executive officer, Ingram Micro Inc. "A strong December, coupled with exemplary cost containment, drove the better-than-expected bottom-line results for the quarter. We posted the highest sales in five years and the initiatives we have developed over the last several quarters are driving superior performance. For the full year, net income on a non-GAAP basis hit an all-time high and every region exceeded 100 basis points of non-GAAP operating income for the first time in company history. We now have four strong engines throughout the world, with each region contributing to our profitability and growth."
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 www.ingrammicro.com.
* Regional Sales
- North American sales were $3.27 billion (41 percent of total
revenues), an increase of 4 percent versus year-ago sales of
$3.14 billion.
- European sales were $3.01 billion (38 percent of total revenues)
versus $2.99 billion in the year-ago quarter. Sales in U.S. dollars
were up 1 percent over the prior-year period. The translation impact
of the relatively weaker European currencies had an approximate 9-
percentage-point negative impact on comparisons to the prior year.
- Asia-Pacific sales were $1.25 billion (16 percent of total revenues)
or an increase of 27 percent versus the $986 million reported in the
prior-year period, primarily driven by the full-quarter benefits in
2005 of the company's acquisition of Tech Pacific, which closed on
November 10, 2004.
- Latin American sales reached a historic high of $420 million
(5 percent of total revenues), an increase of 25 percent versus
year-ago sales of $337 million.
* Gross Margin
- Gross margin was 5.61 percent, down slightly from the year-ago
quarter but a sequential increase of 12 basis points, aided by the
company's strong end-of-year Ingram Micro Logistics business within
North America.
* Operating Expenses
- Operating expenses were $314.4 million or 3.95 percent of revenues
versus $310.8 million or 4.17 percent of revenues in the year-ago
period.
- For comparison purposes, non-GAAP operating expenses excluding
major-program and integration costs in 2005 were $306.2 million or
3.85 percent of revenues. In the prior year period, non-GAAP
operating expenses excluding benefits relating to the favorable
resolution of lease termination costs related to actions taken in
prior years was $311.2 million or 4.18 percent of revenues.
* Operating Income
- Worldwide operating income was $131.7 million or 1.66 percent of
revenues versus $108.7 million or 1.46 percent of revenues in the
year-ago period. For comparison purposes, operating income on a
non-GAAP basis, which excludes major-program and integration costs,
was $139.9 million, or 1.76 percent of revenues. In 2004,
fourth-quarter operating income on a non-GAAP basis was
$108.3 million or 1.45 percent of revenues, excluding benefits
relating to the favorable resolution of lease termination costs
related to actions taken in prior years.
- North American operating income was $55.1 million or 1.68 percent of
revenues versus $37.9 million or 1.21 percent of revenues in the
year-ago quarter. For comparison purposes, North American operating
income on a non-GAAP basis, which excludes major-program costs
related to the company's outsourcing and optimization plan, was
$60.7 million or 1.85 percent of revenues versus $38.1 million or
1.21 percent of revenues in the prior-year period.
- European operating income was $57.1 million or 1.90 percent of
revenues versus $57.9 million or 1.94 percent of revenues in the
year-ago quarter. For comparison purposes, European operating income
on a non-GAAP basis, which excludes benefits in both 2005 and 2004
related to favorable resolution of prior years' reorganization
liabilities, was $57.1 million or 1.89 percent of revenues versus
$57.2 million or 1.91 percent of revenues, respectively.
- Asia-Pacific operating income was $8.9 million or 0.71 percent of
revenues versus $7.2 million or 0.73 percent in the year-ago quarter.
On a non-GAAP basis, Asia-Pacific operating income excluding
integration costs related to the acquisition of Tech Pacific was
$11.5 million or 0.92 percent of revenues.
- Latin American operating income was $10.7 million or a record
2.54 percent of revenues versus $5.8 million or 1.71 percent of
revenues in the year-ago quarter.
* Other income and expenses
- Net other expenses of $10.8 million were recorded for the quarter,
which benefited from foreign currency gains of approximately
$1.5 million, as well as interest savings from the repurchase of the
company's senior subordinated notes in the third quarter of 2005.
The prior-year quarter generated net other income of $6.4 million,
which included a foreign exchange gain of $18.8 million related to
the currency hedging of the company's Australian dollar-denominated
purchase of Tech Pacific.
* Total depreciation was $13.6 million.
* Capital expenditures were approximately $11.5 million.
Balance Sheet
- The cash balance at the end of the quarter was $324 million, a
19 percent decrease from the $398 million balance at the end of 2004.
The decrease in cash is primarily due to sales growth and the
acquisition of AVAD.
- Inventory was $2.21 billion or 27 days on hand compared to
$2.18 billion or 28 days on hand at the end of the prior year.
- Working capital days were 21 compared to 22 for third quarter 2005,
and 19 at the end of the prior year.
- Total debt was $605 million or 20 percent of total capitalization, a
slightly higher capitalization level than a year ago due to higher
sales volume, the acquisition of AVAD, and higher working capital
days associated with the change in the mix of business.
"Our fourth-quarter performance is a continuation of the positive momentum that we've been building over the last several quarters," said William D. Humes, executive vice president and chief financial officer, Ingram Micro Inc. "The quarter's sales approached the high end of the range of guidance issued in October, while net income and EPS exceeded our range. The significant improvement in operating income is due, in part, to the North American outsourcing and optimization initiative announced in April 2005, a better margin mix from new business models such as AVAD, as well as our Six Sigma efforts throughout the world."
Details on Special Items
As indicated above, fourth-quarter results were affected by special items of $8.2 million, or approximately $5.6 million net of tax, which includes a benefit of $0.2 million for the reversal of previously accrued income taxes related to gains on the sale of securities. The special items of $8.2 million are comprised of major-program costs of $5.6 million primarily related to severance, lease exit costs, incremental accelerated depreciation, consulting, retention and other transition expenses, associated with the company's previously announced North American outsourcing and optimization plan; and, integration costs of $2.6 million, primarily associated with closing redundant facilities, workforce reductions, consulting, relocation and other integration actions related to the acquisition of Tech Pacific in November 2004.
Last year's fourth-quarter results were affected by benefits that included: $1.1 million for the reversal of previously accrued income taxes related to gains realized on the sale of securities; a foreign-exchange gain of $18.8 million (approximately $12.8 million net of tax) related to currency hedging of the company's Australian dollar-denominated purchase of Tech Pacific; and $0.4 million (approximately $0.3 million net of tax) related to the favorable resolution of lease terminations costs.
Fiscal Year Results
Of the $28.81 billion in worldwide sales for the 52 weeks ended Dec. 31, 2005, North America generated 42 percent of revenues at $12.22 billion (a 4-percent increase over the prior year); Europe generated 36 percent of revenues at $10.42 billion (a 6-percent increase over the prior year); Asia-Pacific generated 17 percent of revenues at $4.84 billion (a 77-percent increase, which primarily reflects the addition of Tech Pacific); and Latin America generated 5 percent of revenues at $1.32 billion (a 20-percent increase). The full-year gross margin was 5.47 percent, a slight decrease of 4 basis points versus 2004.
Worldwide operating income was $362.2 million or 1.26 percent of revenues versus $283.4 million or 1.11 percent of revenues for 2004. Operating income on a non-GAAP basis in 2005 -- which excludes major-program and integration costs of $39.2 million related to the company's outsourcing and optimization plan in North America and the integration of the Tech Pacific acquisition -- was $401.4 million or 1.39 percent of revenues. In 2004, operating income on a non-GAAP basis was $280.5 million or 1.10 percent of revenues.
Net income based on GAAP was $216.9 million or $1.32 per diluted share versus $219.9 million or $1.38 per diluted share in 2004. For 2005, net income based on GAAP includes major-program and integration costs described above, as well as a loss of $8.4 million ($6.0 million net of tax or $0.04 per diluted share) related to the repurchase of the company's senior subordinated notes and termination of related interest-rate swap agreements in the third quarter and $2.4 million for the reversal of previously accrued income taxes related to gains on the sale of securities. For 2004, net income based on GAAP includes the following benefits totaling $58.8 million or $0.37 per diluted share: $41.1 million or $0.26 per diluted share for the reversal of previously accrued income taxes related to the gains realized on the sale of securities; foreign-exchange gains of $23.1 million ($15.7 million after tax or $0.10 per diluted share) related to currency hedging of the company's Australian dollar-denominated purchase of Tech Pacific; and $2.9 million ($2.0 million net of tax or $0.01 per diluted share) primarily related to the favorable resolution of lease termination costs previously reserved under the profit-enhancement program announced in 2002.
Non-GAAP net income, which excludes the special items listed above, was $248.4 million in 2005 -- a company record and a 54-percent increase over the $161.1 million in 2004 -- while earnings per diluted share were $1.51 in 2005 versus $1.01 per diluted share in 2004.
Capital expenditures for the full year were $38.8 million, while depreciation was $53.7 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.
According to the company's guidance for the first quarter ending April 1, 2006:
* Sales are expected to range from $7.3 billion to $7.5 billion.
* Net income is expected to range from $54 million to $59 million, or $0.32 to $0.35 per diluted share, which includes approximately $8 million or $0.03 per share for the currently estimated amount of non-cash stock-based compensation expense resulting from the expected adoption of Statement of Financial Accounting Standards No. 123 (Revised 2004), Share-Based Payment, in the first quarter 2006. For comparison purposes, 2005 did not include these expenses. The effect of this expense for the full year 2006 is expected to be approximately $30 million or $0.13 per share.
* The weighted average shares outstanding is expected to be approximately 170 million and the effective tax rate for first quarter 2006 is expected to be 28%.
"Our first-quarter guidance reflects normal seasonality, coupled with the continued translation impact of the relatively weaker European currencies, which are about 7-percent softer than this time last year," said Spierkel. "The push for 2006 will be driving growth through superior execution and differentiation. We need to proactively pursue sales in our core business and in the new areas of AIDC/POS, consumer electronics, and service offerings. I'm optimistic -- the regional markets are steady, our vendors and customers continue to see the value we bring to their businesses, and our diversification efforts have positioned us well."
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. EDT. To listen to the conference call webcast and view the accompanying presentation slides, visit the company's Web site at 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 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 our information systems or subversion of access or other system controls may result in a significant loss of business, assets, or competitive information; (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; (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 Exhibit 99.01 of Ingram Micro's Annual Report on Form 10-K for the year ended January 1, 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 100 countries and is the only global IT distributor with operations in Asia. Visit www.ingrammicro.com.
(C) 2006 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 31, January 1,
2005 2005
ASSETS
Current assets:
Cash $324,481 $398,423
Trade accounts receivable, net 3,186,115 3,037,417
Inventories 2,208,660 2,175,185
Other current assets 352,042 471,137
Total current assets 6,071,298 6,082,162
Property and equipment, net 179,435 199,133
Goodwill 638,416 559,665
Other 145,841 85,777
Total assets $7,034,990 $6,926,737
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $3,476,845 $3,536,880
Accrued expenses 479,422 607,684
Current maturities of long-term debt 149,217 168,649
Total current liabilities 4,105,484 4,313,213
Long-term debt, less current
maturities 455,650 346,183
Other liabilities 35,258 26,531
Total liabilities 4,596,392 4,685,927
Stockholders' equity 2,438,598 2,240,810
Total liabilities and stockholders'
equity $7,034,990 $6,926,737
Ingram Micro Inc.
Consolidated Statement of Income
(Dollars in 000s, except per share data)
(Unaudited)
Thirteen Weeks Ended
December 31, 2005 January 1, 2005
Net sales $7,956,500 $7,453,423
Costs of sales 7,510,340 7,033,900
Gross profit 446,160 419,523
Operating expenses:
Selling, general and
administrative 309,119 311,229
Reorganization costs 5,317 (440)
314,436 310,789
Income from operations 131,724 108,734
Interest and other 10,825 (6,416)
Income before income taxes 120,899 115,150
Provision for income taxes 36,542 35,952
Net income $84,357 $79,198
Diluted earnings per share:
Net income $0.51 $0.48
Diluted weighted average
shares outstanding 166,516,907 163,423,394
Ingram Micro Inc.
Consolidated Statement of Income
(Dollars in 000s, except per share data)
(Unaudited)
Fifty-two Weeks Ended
December 31, 2005 January 1, 2005
Net sales $28,808,312 $25,462,071
Costs of sales 27,233,334 24,060,029
Gross profit 1,574,978 1,402,042
Operating expenses:
Selling, general and
administrative 1,196,516 1,121,571
Reorganization costs 16,276 (2,896)
1,212,792 1,118,675
Income from operations 362,186 283,367
Interest and other 60,249 20,091
Income before income taxes 301,937 263,276
Provision for income taxes 85,031 43,375
Net income $216,906 $219,901
Diluted earnings per share:
Net income $1.32 $1.38
Diluted weighted average
shares outstanding 164,331,166 159,680,040
Ingram Micro Inc.
Supplementary Information
Reconciliation of Non-GAAP to GAAP Financial Measures
(Dollars in 000s, except per share data)
(Unaudited)
Thirteen Weeks Ended December 31, 2005
Non-GAAP
As Reported Special Financial
Under GAAP Items Measure
Operating expenses $314,436 $(8,190) (a) $306,246 (g)
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
Thirteen Weeks Ended January 1, 2005
Non-GAAP
As Reported Special Financial
Under GAAP Items Measure
Operating expenses $310,789 $440 (d) $311,229 (h)
Income from operations 108,734 (440) (d) 108,294
Net income 79,198 (14,213) (e) 64,985
Diluted earnings per share $0.48 $(0.08) (f) $0.40
(a) Includes 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 incremental
depreciation of fixed assets resulting from the reduction in useful
lives to coincide with the facility closures, consulting, retention,
and other transition costs; and 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 partially offset by net credit adjustments of $47 in Europe for
lower than expected costs to settle obligations related to previous
actions.
(b) Includes adjustments noted in footnote (a) above, net of estimated
taxes, as well as the reversal of deferred tax liabilities of $184
related to the gain on sale of available-for-sale securities.
(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) Includes net adjustments to reorganization costs of $440 primarily
for favorable resolution of lease termination costs related to
actions taken in prior years.
(e) Includes adjustments noted in footnote (d) above, net of estimated
taxes, as well as a foreign-exchange gain of $18,843 ($12,813, net
of estimated taxes) related to the forward currency hedge of the
Company's Australian-dollar denominated purchase of Tech Pacific and
the reversal of deferred tax liabilities of $1,100 related to the
gain on sale of available-for-sale securities.
(f) Includes adjustments noted in footnote (e) above on a per share
basis calculated by dividing the adjusted amounts by the diluted
weighted average shares outstanding of 163,423,394.
(g) As a percentage of net sales, GAAP operating expenses for the
thirteen weeks ended December 31, 2005 represent 3.95% and non-GAAP
operating expenses represent 3.85%.
(h) As a percentage of net sales, GAAP operating expenses for the
thirteen weeks ended January 1, 2005 represent 4.17% and non-GAAP
operating expenses represent 4.18%.
Ingram Micro Inc.
Supplementary Information
Reconciliation of Non-GAAP to GAAP Financial Measures
(Dollars in 000s, except per share data)
(Unaudited)
Fifty-two Weeks Ended December 31, 2005
Non-GAAP
As Reported Special Financial
Under GAAP Items Measure
Operating expenses $1,212,792 $(39,211) (a) $1,173,581
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
Fifty-two Weeks Ended January 1, 2005
Non-GAAP
As Reported Special Financial
Under GAAP Items Measure
Operating expenses $1,118,675 $2,896 (d) $1,121,571
Income from operations 283,367 (2,896) (d) 280,471
Net income 219,901 (58,769) (e) 161,132
Diluted earnings per share $1.38 $(0.37) (f) $1.01
(a) Includes 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 and lease exit costs for facility
consolidations, and $16,933 charged to selling, general and
administrative expenses, primarily comprised of incremental
depreciation of fixed assets resulting from the reduction in useful
lives to coincide with the facility closures, consulting, retention,
and other transition costs; and 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 and
incremental depreciation of fixed assets resulting from the reduction
in useful lives to coincide with the facility closures; partially
offset by net credit adjustments of $82 in Europe for lower than
expected costs to settle obligations related to previous actions.
(b) Includes adjustments noted in footnote (a) above, net of estimated
taxes, as well as a loss of $8,413 ($5,973, net of estimated taxes)
on the redemption of the Company's senior subordinated notes and
termination of related interest-rate swap agreements and the reversal
of deferred tax liabilities of $2,385 related to the gain on sale of
available-for-sale securities.
(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) Includes net adjustments to reorganization costs of $2,896 primarily
for favorable resolution of lease termination costs related to
actions taken in prior years.
(e) Includes adjustments noted in footnote (d) above, net of estimated
taxes, as well as foreign-exchange gain of $23,120 ($15,722, net of
estimated taxes) related to the forward currency hedge of the
Company's Australian-dollar denominated purchase of Tech Pacific and
the reversal of deferred tax liabilities of $41,078 related to the
gain on sale of available-for-sale securities.
(f) Includes adjustments noted in footnote (e) above on a per share basis
calculated by dividing the adjusted amounts by the diluted weighted
average shares outstanding of 159,680,040.
Ingram Micro Inc.
Supplementary Information
Income from Operations
(Dollars in 000s)
(Unaudited)
Thirteen Weeks Ended December 31, 2005
Special Non-GAAP
Operating Items Operating
Net Sales Income (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
$7,956,500 $131,724 $8,190 $139,914
Non-GAAP
Operating Special Operating
Margin Items Margin (c)
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%
1.66% 0.10% 1.76%
Thirteen Weeks Ended January 1, 2005
Special Non-GAAP
Operating Items Operating
Net Sales Income (b) Income
North America $3,140,906 $37,891 $259 $38,150
Europe 2,989,144 57,867 (699) 57,168
Asia-Pacific 986,176 7,215 -- 7,215
Latin America 337,197 5,761 -- 5,761
$7,453,423 $108,734 $(440) $108,294
Non-GAAP
Operating Special Operating
Margin Items Margin (c)
North America 1.21% 0.00% 1.21%
Europe 1.94% (0.03%) 1.91%
Asia-Pacific 0.73% -- 0.73%
Latin America 1.71% -- 1.71%
1.46% (0.01%) 1.45%
(a) Special items in 2005 include 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 incremental
depreciation of fixed assets resulting from the reduction in useful
lives to coincide with the facility closures, consulting, retention,
and other transition costs; and 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; partially
offset by net credit adjustments of $47 in Europe for lower than
expected costs to settle obligations related to previous actions.
(b) Special items in 2004 include net adjustments to reorganization costs
of $440 (credit of $699 in Europe, partially offset by a charge of
$259 in North America), primarily related to actions taken in prior
years for lower than expected costs associated with facility
consolidations.
(c) 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 31, 2005
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
$28,808,312 $362,186 $39,211 $401,397
Non-GAAP
Operating Special Operating
Margin Items Margin (c)
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%
1.26% 0.13% 1.39%
Fifty-two Weeks Ended January 1, 2005
Non-GAAP
Operating Special Operating
Net Sales Income Items (b) Income
North America $11,776,679 $130,321 $(2,234) $128,087
Europe 9,839,185 129,754 (978) 128,776
Asia-Pacific 2,741,608 9,796 316 10,112
Latin America 1,104,599 13,496 -- 13,496
$25,462,071 $283,367 $(2,896) $280,471
Non-GAAP
Operating Special Operating
Margin Items Margin (c)
North America 1.11% (0.02%) 1.09%
Europe 1.32% (0.01%) 1.31%
Asia-Pacific 0.36% 0.01% 0.37%
Latin America 1.22% -- 1.22%
1.11% (0.01%) 1.10%
(a) Special items in 2005 include costs associated with the Company's
outsourcing and optimization plan in North America, comprised costs
of $9,649 primarily related to employee termination benefits for
workforce reductions and lease exit costs for facility of
reorganization consolidations, and $16,933 charged to selling,
general and administrative expenses, primarily comprised of
incremental depreciation of fixed assets resulting from the reduction
in useful lives to coincide with the facility closures, consulting,
retention, and other transition costs; and 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 and
incremental depreciation of fixed assets resulting from the reduction
in useful lives to coincide with the facility closures; partially
offset by net credit adjustments of $82 in Europe for lower than
expected costs to settle obligations related to previous actions.
(b) Special items in 2004 include net adjustments to reorganization costs
of $2,896 (credit of $2,234 in North America and $978 in Europe,
associated with facility consolidations.
(c) Non-GAAP operating margin is calculated by dividing non-GAAP
operating income by net sales.
SOURCE Ingram Micro Inc.
02/14/2006
CONTACT: Media, Chris Kelly, +1-714-382-3355,
chris.kelly@ingrammicro.com, or Investors, Ria Marie Carlson, +1-714-382-4400,
ria.carlson@ingrammicro.com, or Kay Leyba, +1-714-382-4175,
kay.leyba@ingrammicro.com, all of Ingram Micro Inc.
Web site: http://www.ingrammicro.com
(IM)