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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported):
February 28, 2001
INGRAM MICRO INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 1-12203
(State of incorporation or organization) (Commission File Number)
62-1644402
(I.R.S. Employer Identification No.)
1600 E. St. Andrew Place
Santa Ana, CA 92799-5125
(Address, including zip code of Registrant's principal executive offices)
Registrant's telephone number, including area code: (714) 566-1000
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Item 7. Financial Statements and Exhibits
Exhibit No. Description
99.1 Press Release dated February 28, 2001
Item 9. Regulation FD Disclosure
On February 28, 2001, Ingram Micro Inc. (the "Registrant") issued a press
release announcing its financial results for the fourth quarter and fifty-two
weeks ended December 30, 2000. A copy of the press release is attached hereto as
Exhibit 99.1, the text of which is incorporated by reference herein.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
INGRAM MICRO INC
By: /s/ James E. Anderson, Jr.
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Name: James E. Anderson, Jr.
Title: Senior Vice President, Secretary
and General Counsel
Date: February 28, 2001
Exhibit 99.1
For More Information Contact:
Media Relations: Investor Relations:
Jennifer Baier Marchetta Kim Strohm
Ingram Micro Inc. Ingram Micro Inc.
714-382-1403 714-382-4400
jennifer.marchetta@ingrammicro.com kim.strohm@ingrammicro.com
INGRAM MICRO REPORTS FOURTH QUARTER AND
FULL-YEAR RESULTS
Company posts continued operating profit advances, hitting the mark for solid
year-end financial performance amid soft fourth-quarter demand
SANTA ANA, Calif., Feb. 28, 2001 - Ingram Micro Inc. (NYSE: IM), the
largest global wholesale provider of technology products and supply chain
management services, today announced financial results for its fourth quarter
ended Dec. 30, 2000.
Net income was $57.9 million or $0.39 per share for the fourth quarter
2000. For the quarter, profits from operations improved significantly to $119.4
million compared with a loss from operations in the same period for 1999 of
$45.9 million. The improvement in profitability was driven largely by continued
increases in the company's gross profit margin, which was 5.46 percent of net
sales for the fourth quarter 2000. Results for the fourth quarter 1999 included
both larger-than-usual provisions for excess inventory, vendor-sponsored
programs and doubtful accounts, and a significant investment gain of $125.2
million, net of tax, producing net income of $75.0 million or $0.51 per share.
"Given the rapid changes in technology market demand, we maintained our
focus on operating profit and ended this quarter with solid financial
performance," said Kent B. Foster, chairman and chief executive officer, Ingram
Micro Inc. "Ingram Micro stayed its course, focusing on the right mix of
services and product solutions to take full advantage of our profit
opportunities. Ingram Micro's management team and processes are operating well
and I'm pleased with the work we've done."
Net sales for the fourth quarter 2000 grew 3 percent to a record $8.07
billion. Adjusting for the difference in European exchange rates in 1999 and
2000, net sales growth for the fourth quarter 2000 would have been approximately
8 percent. For the same period, net sales in the U.S. region grew 7 percent to
$4.66 billion. Net sales in the European region grew 5 percent in local
currencies but, due to currency weakness, declined 10 percent in U.S. dollars to
$2.11 billion. For geographic regions outside the United States and Europe, net
sales increased 15 percent to $1.29 billion.
"As a global organization, Ingram Micro started the year 2000 with the
right objectives in mind," said Michael J. Grainger, president and chief
operating officer, Ingram Micro Inc. "We led the industry in reversing the
historical decline in gross margins to drive increased profitability and we
moved quickly. This proves Ingram Micro can thrive in varying market and
operating conditions."
For the fourth quarter 2000 the U.S. region delivered $85.7 million of
income from operations and the European region delivered $28.8 million of income
from operations. Geographic regions outside the U.S. and Europe delivered $4.9
million of income from operations for the same period. The Canadian and Latin
American regions delivered solid operating results, while the Asia-Pacific
region had an operating loss for the quarter.
Depreciation expense was $23.0 million, and amortization was $5.7 million
for the fourth quarter 2000, resulting in earnings before interest, income tax,
depreciation and amortization (EBITDA) of $148.1 million.
Fiscal Year 2000 Results
For the full-year 2000, Ingram Micro's net sales grew 9 percent, reaching
$30.72 billion. Adjusting for the difference in European exchange rates in 1999
and 2000, net sales growth for the full-year 2000 would have been approximately
13 percent.
Net income for 2000 was $226.2 million or $1.52 per share, compared with
net income for 1999 of $183.4 million or $1.24 per share. Net income for both
years includes gains, net of tax, from the sale of securities and the repurchase
of company debentures totaling $71.8 million in 2000 and $129.0 million in 1999.
Excluding these gains, net income was $154.4 million or $1.04 per share for
2000. Income from operations for the full-year 2000 was $353.4 million compared
with $200.0 million for 1999.
Global e-commerce sales of $8 billion represented more than 25 percent of
total sales for 2000.
Balance Sheet Results
"The management of our balance sheet this year was a success story for
Ingram Micro. We showed a consistent ability to manage our working capital,
creating financial stability and the capacity for growth. Ingram Micro's balance
sheet is a clear competitive advantage," Grainger said.
During the fourth quarter, the company kept inventory at historically low
levels relative to sales. Although net sales grew compared to 1999, inventory
declined 16 percent from the end of 1999 to the end of 2000 and the company
maintained consistent levels of trade payables and days of sales outstanding
with its customers, reducing its need for working capital. Based on this
rigorous management of the balance sheet, on- and off-balance sheet debt at
year-end 2000 totaled $1.46 billion, which is a reduction of 10 percent compared
to year-end 1999, producing a total debt-to-capitalization ratio of 44 percent.
Business Outlook for the First Quarter 2001
The following statements are based on current expectations and the
company's internal plan. These statements are forward-looking and, as outlined
in the company's periodic filings with the SEC, actual results may differ
materially.
"We are cautious about the economic outlook and its impact on technology
spending during 2001. For the first quarter of 2001, we are experiencing a
significant slowdown in demand in the U.S. technology market and expect sales to
decline compared to the first quarter of 2000. Therefore, our emphasis is on
driving improvements in our operating efficiencies and, at the same time,
maintaining the significant progress we achieved to increase gross margins in
2000. We will also continue to explore the right profitable growth options,"
Foster said.
The company's current internal plan is for sales of approximately $7.3 to
$7.6 billion for the first quarter ending March 31, 2001, with estimated net
income for the first quarter of fiscal 2001 ranging from $22 to $27 million, or
$0.15 to $0.18 per diluted share.
"Last year we made a conscious decision to help our vendor partners and
customers reduce costs in the technology supply chain, and increase their
profitability and operating performance," Foster said. "As a result, we were
able to be fairly compensated for the value that Ingram Micro brings to their
businesses. Ingram Micro's value to our customers and partners will continue to
increase with innovative service offerings, new products that target emerging
technology markets and excellence in our overall operations."
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 that involve certain risks, including,
without limitation: intense competition; continued pricing and margin pressures;
failure to adjust costs in response to a sudden decrease in demand; the
potential for continued restrictive vendor terms and conditions; the potential
decline as well as seasonal variations in demand for Ingram Micro's products;
unavailability of adequate capital; management of growth; reliability of
information systems; foreign currency fluctuations; dependency on key
individuals; product supply shortages; the potential termination of a supply
agreement with a major supplier; acquisitions; rapid product improvement and
technological change, and resulting obsolescence risks; risk of credit loss;
dependency on independent shipping companies; and the termination of subsidized
floor plan financing.
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 these and other
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 fiscal year ended January 1, 2000; other
risks or uncertainties may be detailed from time to time in Ingram Micro's
future SEC filings.
More Information About Ingram Micro's Financial Results
Additional information about Ingram Micro's fourth quarter financial
results will be presented in a conference call on Wednesday, Feb. 28, 2001,
scheduled for 5 p.m. EST (2 p.m. PST). To listen to the conference call via
telephone, call 888/455-9640 or 630/395-0017 (outside the United States or
Canada). The conference call password is "Ingram Micro." Following the
conclusion of the conference call, an audio file of the call will be posted for
approximately one week on the financials page of the Ingram Micro Web site,
located at www.ingrammicro.com. A recorded version of the conference call also
will be available via telephone at 7 p.m. EST (4 p.m. PST) for approximately one
week. To hear the recording, call 800/678-3180 or 402/220-3063 (outside the
United States or Canada).
About Ingram Micro Inc.
Ingram Micro Inc. is the largest global wholesale provider of technology
products and supply chain management services. The company operates in 36
countries with sales of $30.7 billion for the fiscal year 2000. Ingram Micro's
global regions provide the distribution of technology products and services,
marketing development and supply chain management services to more than 175,000
technology solution providers and 1,700 manufacturers. The company is focused on
maximizing shareowner value and achieving customer satisfaction through
innovation in the information technology supply chain. Visit
www.ingrammicro.com.
# # #
01-07
(c) 2001 Ingram Micro Inc. All rights reserved. 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.
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CONSOLIDATED BALANCE SHEET
(Dollars in 000s)
(Unaudited)
December 30, January 1,
2000 2000
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ASSETS
Current assets:
Cash $ 150,560 $ 128,152
Investment in available-for-sale securities 52,897 142,338
Accounts receivable, including retained
interest in securitized receivables, net 2,352,672 2,853,509
Inventories 2,919,117 3,471,565
Other current assets 294,838 373,365
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Total current assets 5,770,084 6,968,929
Property and equipment, net 350,829 316,643
Goodwill, net 430,853 455,473
Other 57,216 530,882
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Total assets $ 6,608,982 $ 8,271,927
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 3,725,080 $ 4,322,303
Accrued expenses 350,111 317,283
Current maturities of long-term debt 42,774 31,020
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Total current liabilities 4,117,965 4,670,606
Convertible debentures 220,035 440,943
Other long-term debt 282,809 876,172
Deferred income taxes and other liabilities 113,781 317,361
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Total liabilities 4,734,590 6,305,082
Stockholders' equity 1,874,392 1,966,845
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Total liabilities and stockholders' equity $ 6,608,982 $ 8,271,927
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INGRAM MICRO INC.
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CONSOLIDATED STATEMENT OF INCOME
(Dollars in 000s, except per share data)
(Unaudited)
Thirteen Weeks Ended Fifty-two Weeks Ended
December 30, January 1, December 30, January 1,
2000 2000 2000 2000
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Net sales $ 8,065,088 $ 7,828,461 $ 30,715,149 $ 28,068,642
Cost of sales 7,624,349 7,541,268 29,158,851 26,732,479
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Gross profit 440,739 287,193 1,556,298 1,336,163
Selling, general and
administration expenses 321,383 323,723 1,202,861 1,115,854
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Income (loss) from operations
before reorganization costs 119,356 (36,530) 353,437 220,309
Reorganization costs - 9,346 - 20,305
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Income (loss) from operations 119,356 (45,876) 353,437 200,004
Interest and other expense (income) 25,286 (170,853) (9,072) (90,489)
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Income before income taxes 94,070 124,977 362,509 290,493
Provision for income taxes 36,218 49,989 138,756 110,852
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Income before extraordinary items 57,852 74,988 223,753 179,641
Extraordinary gain on repurchase of
debentures (net of $1, $0, $1,469
and $2,405 in income taxes,
respectively) 6 - 2,420 3,778
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Net income $ 57,858 $ 74,988 $ 226,173 $ 183,419
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Diluted earnings per share $ 0.39 $ 0.51 $ 1.52 $ 1.24
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Diluted weighted average shares
outstanding 149,263,615 146,753,472 148,640,991 147,784,712
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