Exhibit 99.1
For More Information Contact:
Media Relations: Investor Relations:
Jennifer Baier Ria Marie Carlson
Ingram Micro Inc. Ingram Micro Inc.
(714) 382-2692 (714) 382-4400
jennifer.baier@ingrammicro.com ria.carlson@ingrammicro.com
INGRAM MICRO REPORTS THIRD QUARTER 2001 RESULTS
Higher gross margin and additional expense reductions drive
sequential improvements in operating margin and income, excluding special items
SANTA ANA, Calif., Oct. 30, 2001-- Ingram Micro Inc. (NYSE: IM), the
largest global wholesale provider of technology products and supply chain
management services, today announced financial results for the third quarter
ended Sept. 29, 2001.
Sales and net income before special items were within the range of
guidance the company issued three months ago. Net sales were $5.83 billion
versus $7.56 billion in the year-ago quarter, while net income before special
items was $5.4 million or $0.04 per share. Including the special items, the
company posted a net loss of $13.3 million or $0.09 per share versus net income
of $38.9 million or $0.26 per share in the comparable period last year.
"Our efforts to streamline business processes and lower costs are
beginning to pay off," said Kent B. Foster, chairman and chief executive
officer, Ingram Micro Inc. "Our emphasis on a lower cost structure had a
favorable impact on operating margin and income during the quarter. Despite the
economic environment, Ingram Micro continues to carefully manage the business
and tighten controls. Gross margin increased, and net income before special
items doubled compared to last quarter. Our best-in-class balance sheet
continues to strengthen, with inventory at a five-year low, turns at record
highs, and a total debt-to-capitalization ratio that is the lowest in the IT
distribution industry."
Additional Third Quarter Highlights
o Gross margin improved to 5.27 percent, 14 basis points higher than the
year-ago quarter and a sequential increase of two basis points.
o Operating expenses were reduced $39.2 million compared with the fourth
quarter of 2000 or a sequential improvement of $9.6 million.
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2-2-2 Ingram Micro Reports Third Quarter 2001 Results
o Income from operations, before special items, was $25.5 million, a
sequential improvement of $1.6 million despite lower sales. Income from
operations in the third quarter of 2000 was $87.2 million.
o Inventory, at $1.63 billion, was 44 percent lower than at the end of the
2000 fiscal year. Inventory days on hand were 27 versus 33 a year ago,
while turns reached 14, the highest in the company's history.
o Total debt (including off-balance sheet debt) was $624 million, a
reduction of $831 million or 57 percent since the end of the 2000 fiscal
year and at the lowest level since the end of 1997. The total
debt-to-capitalization ratio of 25 percent is the lowest since the
company's initial public offering five years ago.
o Special items, totaling $31.1 million before tax, include $11.7 million of
reorganization costs, $10.2 million for the write-off of capitalized
software, and $9.2 million related to reserves recorded for claims filed
with one of the company's prior credit insurance companies, which is being
liquidated. The expected annual reduction in operating costs resulting
from the reorganization and software write-off is $15 to $20 million.
"We're pleased that the company's performance met the expectations we
established at the start of the quarter," said Thomas A. Madden, executive vice
president and chief financial officer, Ingram Micro Inc. "The Sept. 11
terrorist attacks did not have a significant impact on our financial results
this quarter. Our entire business mobilized immediately to help customers and
manufacturers."
Madden added, "the year-over-year sales comparisons were affected by the
weak demand for technology products widely reported throughout the world."
Compared with the third quarter of 2000, worldwide net sales were down 23
percent, or approximately 22 percent before the adjustment for European
exchange rates. U.S. sales were 56 percent of the worldwide total or $3.25
billion, 31 percent less than a year ago. European sales were $1.53 billion (26
percent of the total), an increase of two percent in local currencies but a 5
percent decline in U.S. dollars. For geographic regions outside the United
States and Europe, net sales fell 13 percent to $1.05 billion (18 percent of
the total).
Worldwide operating income before special items increased sequentially to
$25.5 million as the company began to realize the benefits of its streamlining
actions, but declined 71 percent compared with the third quarter of last year
because of sluggish demand. Of this amount, operating income in the U.S. was
$29.1 million, 30 percent higher than the second quarter of 2001 but 64 percent
lower than last year's third quarter, while Europe posted an operating loss of
$2.7 million. The other geographic regions posted an
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3-3-3 Ingram Micro Reports Third Quarter 2001 Results
aggregate operating loss before special items of approximately $925,000, with
operating profits in Canada and Latin America offset by losses in the
developing Asia-Pacific market.
Third quarter depreciation expense was $24.0 million and amortization was
$5.2 million, resulting in earnings before interest, income tax, depreciation
and amortization (EBITDA) of $54.7 million, excluding special items.
Year-to-Date Results
For the 39 weeks ended Sept. 29, 2001, net sales totaled $19.04 billion, a
decline of 16 percent (14 percent before the adjustment for European exchange
rates) versus the comparable period a year ago. Regional nine-month sales were
$10.56 billion in the U.S.; $5.15 billion in Europe; and $3.33 billion in the
other geographic regions. Overall, gross margin improved 36 basis points, from
4.93 percent in the comparable period to 5.29 percent. Income from operations
before special items was $119.8 million. Net income excluding special items was
$34.4 million compared with $96.6 million in 2000. Including special items,
nine-month net income was $1.1 million in 2001 versus $168.3 million in 2000,
which included gains from the sale of securities and from the repurchase of
debentures.
Outlook for the Fourth Quarter
The following statements are based on the company's current expectations
and internal plan. These statements are forward-looking and actual results may
differ materially, as outlined in the company's periodic filings with the SEC.
According to the company's forecast for the fourth quarter ending Dec. 29,
2001, sales are expected to range from $5.7 to $6.2 billion, with net income
before any special items ranging from $6.0 to $15.0 million, or $0.04 to $0.10
per diluted share.
"Industry research indicates that demand is not likely to return until next
year, so we are taking a cautious outlook on revenue," said Foster. "However, we
will continue to strengthen key areas of our business. We have created
opportunities to spur growth, such as the introduction of new technologies and
product offerings, and emphasized fee-based services. Additional reductions in
operating expenses will equate to a more competitive cost structure, and our
ongoing discipline with gross margins and inventory management will enhance
profitability. We are clearly the preferred supply chain management services
partner to the technology industry."
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4-4-4 Ingram Micro Reports Third Quarter 2001 Results
Conference Call and Webcast
Additional information about Ingram Micro's financial results will be
presented in a conference call today at 5 p.m. EST. To listen to the conference
call via telephone, call (888) 455-0750 (toll-free within the United States and
Canada) or (712) 271-3621 (other countries) and mention "Ingram Micro." A live
Webcast of the conference call will also be available on the Investor Relations
page of the Ingram Micro Web site, located at www.ingrammicro.com/corp. A
replay of the conference call will be available for one week through the Web
site or by calling (800) 678-3180 or (402) 220-3063 (outside the United States
or 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 that involve certain risks, including,
without limitation: risks and difficulties similar to those when integrating
operations and personnel in acquisitions; intense competition in the US, Canada
and internationally; the severe downturn in economic conditions continues or
worsens; continued pricing and margin pressures; failure to adjust costs in a
timely fashion in response to a sudden decrease in demand; the potential for
declines in inventory values and continued restrictive vendor terms and
conditions; the potential decline as well as seasonal variations in demand for
Ingram Micro's products and services; unavailability of adequate capital;
inability to manage future adverse industry trends; failure of information
systems; significant credit loss resulting from significant credit exposure to
reseller customers and negative trends in their businesses; interest rate and
foreign currency fluctuations; impact of governmental controls and political or
economic instability on foreign operations; changes in local, regional, and
global economic conditions and practices; dependency on key individuals and
inability to retain personnel; product supply shortages; the potential
termination of a supply agreement with a major supplier; difficulties and risks
associated with acquisitions; rapid product improvement and technological
change and resulting obsolescence risks; dependency on independent shipping
companies; and the changes in terms 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
Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2001;
other risks or uncertainties may be detailed from time to time in Ingram
Micro's future SEC filings.
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/corp.
# # #
01- 38
(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)
September 29, December 30,
2001 2000
------------- ------------
ASSETS
Current assets:
Cash $ 106,103 $ 150,560
Investment in available-for-sale securities 26,229 52,897
Accounts receivable, including retained
interest in securitized receivables, net 2,351,398 2,352,672
Inventories 1,630,612 2,919,117
Other current assets 277,399 294,838
------------ ------------
Total current assets 4,391,741 5,770,084
Property and equipment, net 303,735 350,829
Goodwill, net 421,101 430,853
Other 57,521 57,216
------------ ------------
Total assets $ 5,174,098 $ 6,608,982
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 2,481,013 $ 3,725,080
Accrued expenses 335,012 350,111
Current maturities of long-term debt 24,587 42,774
------------ ------------
Total current liabilities 2,840,612 4,117,965
Convertible debentures 399 220,035
Other long-term debt 184,313 282,809
Senior subordinated notes 205,381 -
Other 83,825 113,781
------------ ------------
Total liabilities 3,314,530 4,734,590
Stockholders' equity 1,859,568 1,874,392
------------ ------------
Total liabilities and stockholders' equity $ 5,174,098 $ 6,608,982
============ ============
INGRAM MICRO INC.
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CONSOLIDATED STATEMENT OF INCOME
(Dollars in 000s, except per share data)
(Unaudited)
Thirteen Weeks Ended Thirty-nine Weeks Ended
September 29, September 30, September 29, September 30,
2001 2000 2001 2000
------------ ------------- ------------- -------------
Net sales $5,833,417 $7,558,652 $19,044,182 $22,650,061
Cost of sales 5,525,777 7,170,801 18,036,737 21,534,502
------------ ----------- ----------- -------------
Gross profit 307,640 387,851 1,007,445 1,115,559
Selling, general and administrative expenses 282,172 300,692 887,633 881,478
------------ ----------- ----------- -------------
Income from operations before reorganization
costs and special charges 25,468 87,159 119,812 234,081
Reorganization costs and special charges 31,138 - 50,194 -
------------ ----------- ----------- -------------
Income (loss) from operations (5,670) 87,159 69,618 234,081
Interest and other expense (income) 16,398 24,259 63,412 (34,358)
------------ ----------- ----------- -------------
Income (loss) before income taxes (22,068) 62,900 6,206 268,439
Provision for (benefit from) income taxes (8,739) 24,059 2,514 102,538
------------ ----------- ----------- -------------
Income (loss) before extraordinary items (13,329) 8,841 3,692 165,901
Extraordinary gain (loss) on repurchase of
debentures (net of $0, $60, $(1,634)
and $1,468 in income taxes, respectively) - 98 (2,610) 2,414
------------ ----------- ----------- -------------
Net income (loss) $ (13,329) $ 38,939 $ 1,082 $ 168,315
============ =========== =========== =============
Diluted earnings per share $ (0.09) $ 0.26 $ 0.01 $ 1.13
============ =========== =========== =============
Diluted weighted average shares outstanding 147,791,050 149,632,660 149,602,060 148,762,669
============ =========== =========== =============