Reversing Historical Trends in Technology Distribution, Ingram Micro Realized Sequential Increases in Gross Profit Margin to Lead Industry Transition
SANTA ANA, Calif., Aug. 1 /PRNewswire/ -- Ingram Micro Inc. (NYSE:IM)
, the largest global wholesale provider of technology products and services, today announced financial results for its second quarter ended July 1, 2000. Net income for the period was $33.2 million or $0.22 per share, increasing 34 percent compared to net income from operations in the first quarter 2000 of $24.7 million or $0.17 per share. During the second quarter, the company significantly improved its gross profit margin, compared to the first quarter 2000, increasing it 26 basis points to 4.96 percent of net sales and driving an improvement in net income from operations. Net income in the second quarter 1999 was $50.3 million or $0.34 per share.
"As the industry leader, we're committed to transforming the value proposition for technology distribution," said Kent B. Foster, chairman and chief executive officer, Ingram Micro Inc. "Our primary objective is to build long-term value with our customers and vendors in order to be the most effective partner to reach the global technology market."
Net sales for the second quarter 2000 grew 7 percent to $7.30 billion. For the same period, net sales in the U.S. region grew 4 percent to $4.46 billion. Net sales in the European region grew 7 percent to $1.71 billion and grew approximately 19 percent in local currencies. For geographic regions outside the United States and Europe, net sales increased 24 percent to $1.12 billion.
"We made a conscious decision this quarter to drive profitability throughout our organization," said Foster. "It began with pricing policy changes and continued with improved terms and conditions, more efficient inventory management and a focus on increasing productivity through automated processes. As a result, we have experienced a shift in how we approach all aspects of our business."
For the first six months of 2000, the company's net sales grew 12 percent, reaching $15.09 billion. Net income was $129.4 million or $0.87 per share, compared to net income for the first six months of 1999 of $92.6 million or $0.63 per share. Totals for Ingram Micro's net income include gains from the sale of securities in the first quarter 2000 and from the repurchase of company debentures. Excluding these gains, net income was $57.7 million or $0.39 per share for the first two quarters of 2000, compared to $88.8 million or $0.60 per share for the same period in 1999.
Ingram Micro's financial position continued to improve at the end of the second quarter 2000. Total inventory decreased 26 percent from the end of fiscal 1999 to $2.55 billion. The company's balance sheet debt also declined $312 million from the end of fiscal 1999 to $1.04 billion, resulting in a balance sheet debt to capitalization ratio of 36 percent.
About Ingram Micro Inc.
Ingram Micro Inc. is the largest global wholesale provider of technology solutions, products and services. The company operates in 34 countries with sales exceeding $29 billion for the past four reported quarters. Ingram Micro's global regions offer e-commerce solutions, logistics services, and technology product distribution and marketing to more than 175,000 technology solution providers and manufacturers. The company is focused on maximizing shareowner value and achieving customer satisfaction by continuously innovating the IT supply chain. Visit http://www.ingrammicro.com/.
Ingram Micro is a trademark used under license by Ingram Micro Inc. All other logos, brand names and product names are trademarks of their respective companies.
INGRAM MICRO INC.
CONSOLIDATED BALANCE SHEET
(Dollars in 000s, except per share data)
(Unaudited)
July 1, January 1,
2000 2000
ASSETS
Current assets:
Cash $149,070 $128,152
Investment in available-for-sale securities -- 142,338
Accounts receivable, including retained
interest in securitized receivables, net 2,621,031 2,853,509
Inventories 2,553,659 3,471,565
Other current assets 364,017 373,365
Total current assets 5,687,777 6,968,929
Investment in available-for-sale securities 201,856 474,525
Property and equipment, net 328,820 316,643
Goodwill, net 441,486 455,473
Other 76,486 56,357
Total assets $6,736,425 $8,271,927
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $3,400,474 $4,322,303
Accrued expenses 273,934 317,283
Current maturities of long-term debt 55,215 31,020
Total current liabilities 3,729,623 4,670,606
Convertible debentures 383,190 440,943
Other long-term debt 597,695 876,172
Other 175,736 317,361
Total liabilities 4,886,244 6,305,082
Stockholders' equity 1,850,181 1,966,845
Total liabilities and stockholders' equity $6,736,425 $8,271,927
INGRAM MICRO INC.
CONSOLIDATED STATEMENT OF INCOME
(Dollars in 000s, except per share data)
(Unaudited)
Thirteen Weeks Ended Twenty-six Weeks Ended
July 1, July 3, July 1, July 3,
2000 1999 2000 1999
Net sales $7,295,059 $6,804,813 $15,091,409 $13,530,088
Cost of sales 6,933,547 6,436,985 14,363,701 12,803,006
Gross profit 361,512 367,828 727,708 727,082
Selling, general
and administrative
expenses 285,121 258,175 580,786 525,684
Income from operations
before reorganization
costs 76,391 109,653 146,922 201,398
Reorganization costs -- 2,050 -- 8,284
Income from operations 76,391 107,603 146,922 193,114
Interest and other
(income) expenses 22,832 27,985 (58,617) 52,349
Income before
income taxes 53,559 79,618 205,539 140,765
Provision for
income taxes 20,503 29,279 78,479 51,950
Income before
extraordinary items 33,056 50,339 127,060 88,815
Extraordinary gain on
repurchase of
debentures (net of
$113, $1,408 and
$2,405 in income
taxes, respectively) 187 -- 2,316 3,778
Net income $33,243 $50,339 $129,376 $92,593
Diluted earnings
per share $0.22 $0.34 $0.87 $0.63
Diluted weighted
average shares
outstanding 149,700,725 148,066,808 148,435,200 148,126,198
Source: Ingram Micro Inc.
Contact: media relations, Jennifer Baier Marchetta, 714-382-2692,
jennifer.marchetta@ingrammicro.com, or investor relations, Kim Strohm,
714-382-4400, kim.strohm@ingrammicro.com, both of Ingram Micro Inc.
Website: http://www.ingrammicro.com/