"During the third quarter of this year we continued to deliver robust improvement in gross and operating margins leading to the strongest earnings per share for a third quarter in more than a decade," said Alain Monié,
Monié added, "We continue to make progress on our transaction to join the
Third Quarter Results of Operations
Worldwide 2016 third quarter sales of
2016 third quarter GAAP operating income was
2016 third quarter non-GAAP operating income was
On a GAAP basis, return on invested capital for the trailing 12 months was 7.7 percent compared to 6.3 percent in the 2015 third quarter. On a non-GAAP basis, return on invested capital for the trailing 12 month period was 10.9 percent, more than 300 basis points above the company weighted average cost of capital, and up compared to 10.6 percent in the similar trailing 12 month period last year.
Conference Call and Webcast
As noted in the press release issued on
Non-GAAP Disclosures
In addition to GAAP results,
The non-GAAP measures noted above are primary indicators that
A reconciliation of GAAP to non-GAAP financial measures for the periods presented is attached to this press release.
About
Cautionary Statement for the Purpose of the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995
The matters in this communication that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act 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
© 2016
Ingram Micro Inc. | ||||||||
Consolidated Balance Sheet | ||||||||
(Amounts in 000s) | ||||||||
(Unaudited) | ||||||||
October 1, | January 2, | |||||||
2016 | 2016 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 689,076 | $ | 935,267 | ||||
Trade accounts receivable, net | 5,270,505 | 5,663,754 | ||||||
Inventory | 3,839,219 | 3,457,016 | ||||||
Other current assets | 556,152 | 475,813 | ||||||
Total current assets | 10,354,952 | 10,531,850 | ||||||
Property and equipment, net | 384,610 | 381,414 | ||||||
Goodwill | 946,289 | 843,001 | ||||||
Intangible assets, net | 429,035 | 374,674 | ||||||
Other assets | 179,055 | 169,750 | ||||||
Total assets | $ | 12,293,941 | $ | 12,300,689 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 6,024,197 | $ | 6,353,511 | ||||
Accrued expenses | 639,727 | 620,501 | ||||||
Short-term debt and current maturities of long-term debt | 534,213 | 134,103 | ||||||
Total current liabilities | 7,198,137 | 7,108,115 | ||||||
Long-term debt, less current maturities | 792,576 | 1,090,702 | ||||||
Other liabilities | 162,436 | 134,086 | ||||||
Total liabilities | 8,153,149 | 8,332,903 | ||||||
Stockholders' equity | 4,140,792 | 3,967,786 | ||||||
Total liabilities and stockholders' equity | $ | 12,293,941 | $ | 12,300,689 | ||||
Ingram Micro Inc. | ||||||||
Consolidated Statement of Income | ||||||||
(Amounts in 000s, except per share data) | ||||||||
(Unaudited) | ||||||||
Thirteen Weeks Ended | ||||||||
October 1, 2016 | October 3, 2015 | |||||||
Net sales | $ | 10,226,826 | $ | 10,515,880 | ||||
Cost of sales | 9,511,447 | 9,852,297 | ||||||
Gross profit | 715,379 | 663,583 | ||||||
Operating expenses: | ||||||||
Selling, general and administrative | 550,270 | 510,990 | ||||||
Amortization of intangible assets | 20,574 | 14,206 | ||||||
Reorganization costs | 7,471 | 18,958 | ||||||
578,315 | 544,154 | |||||||
Income from operations | 137,064 | 119,429 | ||||||
Other expense (income): | ||||||||
Interest income | (1,956 | ) | (991 | ) | ||||
Interest expense | 19,640 | 18,429 | ||||||
Net foreign currency exchange loss | 3,728 | 12,264 | ||||||
Other | 3,020 | 313 | ||||||
24,432 | 30,015 | |||||||
Income before income taxes | 112,632 | 89,414 | ||||||
Provision for income taxes | 34,109 | 24,492 | ||||||
Net income | $ | 78,523 | $ | 64,922 | ||||
Diluted earnings per share | $ | 0.52 | $ | 0.42 | ||||
Diluted weighted average shares outstanding | 151,918 | 154,742 | ||||||
Ingram Micro Inc. | ||||||||
Consolidated Statement of Income | ||||||||
(Amounts in 000s, except per share data) | ||||||||
(Unaudited) | ||||||||
Thirty-nine Weeks Ended | ||||||||
October 1, 2016 | October 3, 2015 | |||||||
Net sales | $ | 29,686,033 | $ | 31,713,584 | ||||
Cost of sales | 27,620,012 | 29,775,715 | ||||||
Gross profit | 2,066,021 | 1,937,869 | ||||||
Operating expenses: | ||||||||
Selling, general and administrative | 1,673,279 | 1,526,340 | ||||||
Amortization of intangible assets | 73,220 | 47,226 | ||||||
Reorganization costs | 31,727 | 29,234 | ||||||
Impairment of internally developed software | - | 115,856 | ||||||
Loss on sale of affiliate | 14,878 | - | ||||||
1,793,104 | 1,718,656 | |||||||
Income from operations | 272,917 | 219,213 | ||||||
Other expense (income): | ||||||||
Interest income | (5,214 | ) | (2,650 | ) | ||||
Interest expense | 58,264 | 61,799 | ||||||
Net foreign currency exchange loss | 12,842 | 26,540 | ||||||
Other | 10,218 | 7,256 | ||||||
76,110 | 92,945 | |||||||
Income before income taxes | 196,807 | 126,268 | ||||||
Provision for income taxes | 61,733 | 52,364 | ||||||
Net income | $ | 135,074 | $ | 73,904 | ||||
Diluted earnings per share | $ | 0.89 | $ | 0.47 | ||||
Diluted weighted average shares outstanding | 151,836 | 158,016 | ||||||
Ingram Micro Inc. | |||||||||||
Consolidated Statement of Cash Flows | |||||||||||
(Amounts in 000s) | |||||||||||
(Unaudited) | |||||||||||
Thirty-nine Weeks Ended | |||||||||||
October 1, 2016 | October 3, 2015 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | 135,074 | $ | 73,904 | |||||||
Adjustments to reconcile net income to cash (used) provided by operating activities: | |||||||||||
Depreciation and amortization | 151,374 | 113,435 | |||||||||
Stock-based compensation | 29,564 | 28,291 | |||||||||
Excess tax benefit from stock-based compensation | (8,437 | ) | (4,334 | ) | |||||||
Gain on sale of property and equipment | (1,606 | ) | (272 | ) | |||||||
Impairment of internally developed software | - | 115,856 | |||||||||
Loss on sale of affiliate | 14,878 | - | |||||||||
Noncash charges for interest and bond discount amortization | 2,500 | 2,212 | |||||||||
Deferred income taxes | (1,152 | ) | 1,553 | ||||||||
Changes in operating assets and liabilities, net of effects of acquisitions: | |||||||||||
Trade accounts receivable | 529,205 | 1,078,501 | |||||||||
Inventory | (355,948 | ) | 400,880 | ||||||||
Other current assets | (63,572 | ) | (107,241 | ) | |||||||
Accounts payable | (400,839 | ) | (663,616 | ) | |||||||
Change in book overdrafts | (61,653 | ) | (70,825 | ) | |||||||
Accrued expenses | (106,288 | ) | (2,463 | ) | |||||||
Cash (used) provided by operating activities | (136,900 | ) | 965,881 | ||||||||
Cash flows from investing activities: | |||||||||||
Capital expenditures | (80,229 | ) | (99,022 | ) | |||||||
Sale of marketable securities, net | 4,700 | 5,000 | |||||||||
Proceeds from sale of property and equipment | 1,237 | 1,145 | |||||||||
Proceeds from sale of affiliate | 27,847 | - | |||||||||
Acquisitions, net of cash acquired | (173,311 | ) | (100,855 | ) | |||||||
Cash used by investing activities | (219,756 | ) | (193,732 | ) | |||||||
Cash flows from financing activities: | |||||||||||
Proceeds from exercise of stock options | 3,296 | 10,279 | |||||||||
Repurchase of Class A Common Stock | - | (205,608 | ) | ||||||||
Excess tax benefit from stock-based compensation | 8,437 | 4,334 | |||||||||
Other consideration for acquisitions | (2,091 | ) | (2,358 | ) | |||||||
Dividends paid to shareholders | - | (15,196 | ) | ||||||||
Net proceeds from (repayments of) revolving and other credit facilities | 87,160 | (301,156 | ) | ||||||||
Cash provided (used) by financing activities | 96,802 | (509,705 | ) | ||||||||
Effect of exchange rate changes on cash and cash equivalents | 13,663 | (9,904 | ) | ||||||||
Increase (decrease) in cash and cash equivalents | (246,191 | ) | 252,540 | ||||||||
Cash and cash equivalents, beginning of period | 935,267 | 692,777 | |||||||||
Cash and cash equivalents, end of period | $ | 689,076 | $ | 945,317 | |||||||
Ingram Micro Inc. |
Supplementary Information |
Income from Operations - Reconciliation of GAAP to Non-GAAP Information |
(Amounts in Millions) |
(Unaudited) |
Thirteen Weeks Ended October 1, 2016 | |||||||||||||||||||||||||
North America | Europe | Asia-Pacific | Latin America | Stock-based Compensation |
Consolidated Total |
||||||||||||||||||||
Net Sales | $ | 4,522.0 | $ | 2,748.2 | $ | 2,318.2 | $ | 638.4 | $ | - | $ | 10,226.8 | |||||||||||||
GAAP Operating Income | $ | 91.7 | $ | 2.5 | $ | 41.0 | $ | 11.6 | $ | (9.7 | ) | $ | 137.1 | ||||||||||||
Reorganization, integration and transition costs | 11.8 | 5.6 | 0.0 | 1.5 | - | 18.9 | |||||||||||||||||||
Amortization of intangible assets | 10.2 | 8.7 | 1.8 | (0.1 | ) | - | 20.6 | ||||||||||||||||||
Non-GAAP Operating Income | $ | 113.7 | $ | 16.8 | $ | 42.8 | $ | 13.0 | $ | (9.7 | ) | $ | 176.6 | ||||||||||||
GAAP Operating Margin | 2.03 | % | 0.09 | % | 1.77 | % | 1.82 | % | 1.34 | % | |||||||||||||||
Non-GAAP Operating Margin | 2.51 | % | 0.61 | % | 1.85 | % | 2.04 | % | 1.73 | % | |||||||||||||||
Thirteen Weeks Ended October 3, 2015 | |||||||||||||||||||||||||
North America | Europe | Asia-Pacific | Latin America | Stock-based Compensation | Consolidated Total | ||||||||||||||||||||
Net Sales | $ | 4,477.1 | $ | 2,928.5 | $ | 2,528.1 | $ | 582.2 | $ | - | $ | 10,515.9 | |||||||||||||
GAAP Operating Income | $ | 88.7 | $ | 2.6 | $ | 31.8 | $ | 7.1 | $ | (10.8 | ) | $ | 119.4 | ||||||||||||
Reorganization, integration and transition costs | 14.3 | 7.7 | 7.0 | 1.3 | - | 30.3 | |||||||||||||||||||
Amortization of intangible assets | 8.1 | 3.2 | 2.0 | 0.9 | - | 14.2 | |||||||||||||||||||
Estimated settlement of employee related taxes | - | 4.7 | - | - | - | 4.7 | |||||||||||||||||||
Non-GAAP Operating Income | $ | 111.1 | $ | 18.2 | $ | 40.8 | $ | 9.3 | $ | (10.8 | ) | $ | 168.6 | ||||||||||||
GAAP Operating Margin | 1.98 | % | 0.09 | % | 1.26 | % | 1.21 | % | 1.14 | % | |||||||||||||||
Non-GAAP Operating Margin | 2.48 | % | 0.62 | % | 1.61 | % | 1.59 | % | 1.60 | % | |||||||||||||||
Ingram Micro Inc. |
Supplementary Information |
Income from Operations - Reconciliation of GAAP to Non-GAAP Information |
(Amounts in Millions) |
(Unaudited) |
Thirty-nine Weeks Ended October 1, 2016 | |||||||||||||||||||||||||||||||||
North America | Europe | Asia-Pacific | Latin America | Stock-based Compensation |
Impairment of Internally Developed Software |
Loss on Sale of Affiliate |
Consolidated Total |
||||||||||||||||||||||||||
Net Sales | $ | 12,837.7 | $ | 8,189.5 | $ | 6,769.7 | $ | 1,889.1 | $ | - | $ | - | $ | - | $ | 29,686.0 | |||||||||||||||||
GAAP Operating Income (Loss) | $ | 219.1 | $ | (21.2 | ) | $ | 94.9 | $ | 24.6 | $ | (29.6 | ) | $ | - | $ | (14.9 | ) | $ | 272.9 | ||||||||||||||
Reorganization, integration and transition costs | 45.7 | 26.7 | 1.2 | 4.2 | - | - | - | 77.8 | |||||||||||||||||||||||||
Amortization of intangible assets | 35.9 | 28.0 | 5.8 | 3.6 | - | - | - | 73.3 | |||||||||||||||||||||||||
Loss on sale of affiliate | - | - | - | - | - | - | 14.9 | 14.9 | |||||||||||||||||||||||||
Settlement of a class action lawsuit | (3.8 | ) | - | - | - | - | - | - | (3.8 | ) | |||||||||||||||||||||||
Non-GAAP Operating Income | $ | 296.9 | $ | 33.5 | $ | 101.9 | $ | 32.4 | $ | (29.6 | ) | $ | - | $ | - | $ | 435.1 | ||||||||||||||||
GAAP Operating Margin | 1.71 | % | (0.26 | %) | 1.40 | % | 1.30 | % | 0.92 | % | |||||||||||||||||||||||
Non-GAAP Operating Margin | 2.31 | % | 0.41 | % | 1.51 | % | 1.72 | % | 1.47 | % | |||||||||||||||||||||||
Thirty-nine Weeks Ended October 3, 2015 | |||||||||||||||||||||||||||||||||
North America |
Europe | Asia-Pacific | Latin America | Stock-based Compensation |
Impairment of Internally Developed Software |
Consolidated Total |
|||||||||||||||||||||||||||
Net Sales | $ | 13,537.2 | $ | 8,857.8 | $ | 7,553.9 | $ | 1,764.7 | $ | - | $ | - | $ | 31,713.6 | |||||||||||||||||||
GAAP Operating Income | $ | 223.6 | $ | 20.9 | $ | 94.4 | $ | 24.5 | $ | (28.3 | ) | $ | (115.9 | ) | $ | 219.2 | |||||||||||||||||
Reorganization, integration and transition costs | 28.6 | 15.9 | 9.3 | 3.5 | - | - | 57.3 | ||||||||||||||||||||||||||
Amortization of intangible assets | 28.9 | 11.3 | 5.7 | 1.3 | - | - | 47.2 | ||||||||||||||||||||||||||
Estimated settlement of employee related taxes | - | 4.7 | - | - | - | - | 4.7 | ||||||||||||||||||||||||||
Impairment of internally developed software | - | - | - | - | - | 115.9 | 115.9 | ||||||||||||||||||||||||||
Non-GAAP Operating Income | $ | 281.1 | $ | 52.8 | $ | 109.4 | $ | 29.3 | $ | (28.3 | ) | $ | - | $ | 444.3 | ||||||||||||||||||
GAAP Operating Margin | 1.65 | % | 0.24 | % | 1.25 | % | 1.39 | % | 0.69 | % | |||||||||||||||||||||||
Non-GAAP Operating Margin | 2.08 | % | 0.60 | % | 1.45 | % | 1.66 | % | 1.40 | % | |||||||||||||||||||||||
Ingram Micro Inc. | |||||||
Supplementary Information | |||||||
Reconciliation of GAAP to Non-GAAP Financial Measures | |||||||
(Amounts in Millions, except per share data) | |||||||
(Unaudited) | |||||||
Thirteen Weeks Ended October 1, 2016 | |||||||
Diluted | |||||||
Net Income | Earnings per Share (a) | ||||||
As Reported Under GAAP | $ | 78.5 | $ | 0.52 | |||
Reorganization, integration and transition costs | 13.4 | 0.09 | |||||
Amortization of intangible assets | 14.6 | 0.09 | |||||
Pan-Europe foreign currency exchange loss | 0.9 | 0.01 | |||||
Non-GAAP Financial Measure | $ | 107.4 | $ | 0.71 | |||
Thirteen Weeks Ended October 3, 2015 | |||||||
Diluted | |||||||
Net Income | Earnings per Share (a) | ||||||
As Reported Under GAAP | $ | 64.9 | $ | 0.42 | |||
Reorganization, integration and transition costs | 22.4 | 0.15 | |||||
Amortization of intangible assets | 10.5 | 0.07 | |||||
Estimated settlement of employee related taxes | 3.5 | 0.02 | |||||
Pan-Europe foreign currency exchange loss | 1.7 | 0.01 | |||||
Non-GAAP Financial Measure | $ | 103.0 | $ | 0.67 | |||
(a) | Amounts above are net of applicable income taxes and per share impacts are calculated by dividing net income amount by the diluted weighted average shares outstanding of 151.9 and 154.7 for the thirteen weeks ended October 1, 2016 and October 3, 2015, respectively. | |
Ingram Micro Inc. | |||||||||
Supplementary Information | |||||||||
Reconciliation of GAAP to Non-GAAP Financial Measures | |||||||||
(Amounts in Millions, except per share data) | |||||||||
(Unaudited) | |||||||||
Thirty-nine Weeks Ended October 1, 2016 | |||||||||
Diluted | |||||||||
Net Income | Earnings per Share (a) | ||||||||
As Reported Under GAAP | $ | 135.1 | $ | 0.89 | |||||
Reorganization, integration and transition costs | 56.0 | 0.37 | |||||||
Amortization of intangible assets | 52.3 | 0.34 | |||||||
Loss on sale of affiliate | 10.2 | 0.07 | |||||||
Settlement of a class action lawsuit | (2.6 | ) | (0.02 | ) | |||||
Pan-Europe foreign currency exchange loss | 1.1 | 0.01 | |||||||
Non-GAAP Financial Measure | $ | 252.1 | $ | 1.66 | |||||
Thirty-nine Weeks Ended October 3, 2015 | |||||||||
Diluted | |||||||||
Net Income | Earnings per Share (a) | ||||||||
As Reported Under GAAP | $ | 73.9 | $ | 0.47 | |||||
Reorganization, integration and transition costs | 42.1 | 0.27 | |||||||
Amortization of intangible assets | 34.4 | 0.22 | |||||||
Estimated settlement of employee related taxes | 3.5 | 0.02 | |||||||
Impairment of internally developed software | 99.7 | 0.63 | |||||||
Pan-Europe foreign currency exchange loss | 5.2 | 0.03 | |||||||
Non-GAAP Financial Measure | $ | 258.8 | $ | 1.64 | |||||
(a) | Amounts above are net of applicable income taxes and per share impacts are calculated by dividing net income amount by the diluted weighted average shares outstanding of 151.8 and 158.0 for the thirty-nine weeks ended October 1, 2016 and October 3, 2015, respectively. | |
Ingram Micro Inc. | ||||||
Supplementary Information | ||||||
Reconciliation of GAAP to Non-GAAP Financial Measures | ||||||
(Amounts in Millions) | ||||||
(Unaudited) | ||||||
Fifty-two Weeks Ended October 1, 2016 | ||||||
As Reported Under | Special | Non-GAAP | ||||
GAAP | Items* | Financial Measure | ||||
Income from operations | $469.0 | $205.3 | $674.3 | |||
Effective tax rate | 28.0% | 31.9% | 29.2% | |||
NOPAT (a) | $337.5 | $139.9 | $477.4 | |||
Average invested capital (b) | $4,370.9 | $4,370.9 | ||||
Return on invested capital (c) | 7.7% | 10.9% | ||||
(a) | NOPAT is net operating profit after tax for the trailing twelve month period ended October 1, 2016, and is calculated by reducing income from operations by the effective tax rate for the period (provision for income taxes divided by income before income taxes). | |
(b) | Average invested capital equals the average of equity plus debt less cash as of the beginning and end of each quarter in the period. | |
(c) | Return on invested capital is defined as the trailing twelve months net operating profit after tax divided by the average invested capital. | |
* | Special items include reorganization, acquisitions, integration and transition costs, including those associated with the company's previously announced cost savings programs, and the amortization of intangible assets. They also include a loss of $15 million on the sale of affiliate, a gain of $4 million related to a legal settlement and a charge of $5 million related to an impairment of internally developed software. | |
Ingram Micro Inc. | ||||||
Supplementary Information | ||||||
Reconciliation of GAAP to Non-GAAP Financial Measures | ||||||
(Amounts in Millions) | ||||||
(Unaudited) | ||||||
Fifty-three Weeks Ended October 3, 2015 | ||||||
As Reported Under GAAP | Special Items* | Non-GAAP Financial Measure | ||||
Income from operations | $420.2 | $270.6 | $690.8 | |||
Effective tax rate | 30.0% | 24.8% | 28.0% | |||
NOPAT (a) | $294.2 | $203.4 | $497.6 | |||
Average invested capital (b) | $4,687.4 | $4,687.4 | ||||
Return on invested capital (c) | 6.3% | 10.6% | ||||
(a) | NOPAT is net operating profit after tax for the trailing twelve month period ended October 3, 2015, and is calculated by reducing income from operations by the effective tax rate for the period (provision for income taxes divided by income before income taxes). | |
(b) | Average invested capital equals the average of equity plus debt less cash as of the beginning and end of each quarter in the period. | |
(c) | Return on invested capital is defined as the trailing twelve months net operating profit after tax divided by the average invested capital. | |
* | Special items include reorganization, acquisitions, integration and transition costs, including those associated with the company's previously announced cost savings programs, and the amortization of intangible assets. They also include a charge of $5 million for an estimated settlement of employee benefit taxes assessed in Europe, a charge of $116 million related to an impairment of internally developed software resulting from the company's decision to stop its global ERP deployment and a benefit of $3 million related to the receipt of an LCD flat panel class action settlement in 2014. | |
For More Information Contact:
Investors:
(714) 382-5013
damon.wright@ingrammicro.com
Source: