Exhibit 99.1
For More Information Contact:
Media Relations: Investor Relations:
Jennifer Baier or Cambria Morgan Ria Marie Carlson
Ingram Micro Inc. Ingram Micro Inc.
(714) 382-2190 (714) 382-4400
Cambria_Morgan@benjamingroup.com ria.carlson@ingrammicro.com
INGRAM MICRO REPORTS FIRST QUARTER 2002 RESULTS
Earnings before reorganization costs and special items exceed expectations
SANTA ANA, Calif., April 25, 2002-- Ingram Micro Inc. (NYSE: IM), the largest
global wholesale provider of technology products and supply chain management
services, today announced financial results for the first quarter ended March
30, 2002.
Net sales were $5.62 billion versus $7.19 billion in the first quarter of
last year, a decline of 22 percent, with net income of $13.5 million or $0.09
per share (before reorganization costs, gain on the sale of securities and the
cumulative effect of the adoption of a new accounting standard).
"Income and earnings per share before reorganization costs and special
items surpassed the guidance we issued in February," explained Kent B. Foster,
chairman and chief executive officer, Ingram Micro Inc. "Gross margins
increased significantly - reaching the highest point since the end of 2000 -
and operating expenses were down $44.3 million compared with a year ago. We
also continued our superb management of working capital, with debt at the
lowest level in five years and inventory metrics holding steady near last
quarter's record achievements."
During the quarter, the company recorded reorganization costs of $3.4
million ($2.1 million after taxes), related primarily to facility
consolidations and workforce reductions in conjunction with the company's
global restructuring plan, as well as a gain on the sale of securities totaling
$6.5 million ($4.1 million after taxes). Income including these items was $15.5
million or $0.10 per share, compared to $26.4 million or $0.18 per share in the
year-ago quarter.
As previously announced, the company adopted Statement of Financial
Accounting Standard No. 142, "Goodwill and Other Intangible Assets" (SFAS 142),
during the first quarter of 2002, which requires that goodwill be reviewed for
impairment upon adoption. As a result, the company recorded a one-time,
non-cash charge of $280.9 million, net of income taxes, or $1.84 per share, for
the cumulative effect of adopting SFAS 142. This was within the estimated range
of $260 million to $290 million previously disclosed with the company's 2001
year-end results. Including the impact of adopting this accounting standard,
net losses were $265.4 million or $1.74 per share.
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2/2/2 Ingram Micro Reports First Quarter 2002 Results
Additional First Quarter Highlights
o Gross margin was 5.41 percent, seven basis points higher than the
year-ago quarter and a 16-basis-point sequential improvement.
o Operating expenses were $269.4 million, $44.3 million less than the
year-ago quarter and $15.6 million less than the fourth quarter of
last year - the result of rigorous cost controls and the
restructuring actions the company announced last year. Previously,
operating expenses included approximately $5 million per quarter for
goodwill amortization, which has been eliminated in accordance with
SFAS 142.
o Income from operations, before reorganization costs, was $34.2
million versus $70.5 million a year ago.
o Earnings before interest, income tax, depreciation and amortization
(EBITDA) was $54.8 million, excluding reorganization costs and
special items, compared with $99.5 million a year ago.
o Depreciation was $20.6 million and capital expenditures were $15.6
million.
o Inventory was $1.5 billion, 35 percent lower than a year ago.
Inventory turns and days on hand remained relatively stable
sequentially at 14 and 26, respectively. A year ago, inventory turns
were 12 and days on hand were 31.
o Total debt (including off-balance sheet debt of $155 million
associated with accounts receivable financing programs) was $503
million, a reduction of 26 percent since the end of 2001 and 62
percent less than the $1.3 billion a year ago. The total
debt-to-capitalization ratio (including the off-balance sheet
financing) was 24 percent.
"The company's intense focus on profitability helped us exceed
expectations this quarter," said Thomas A. Madden, executive vice president and
chief financial officer, Ingram Micro Inc. "Intelligent pricing, new
fee-for-service accounts, and solid vendor rebates, discounts and marketing
achievements helped boost the gross margin, while we continued to reduce
operating expenses through tighter controls and business process improvements.
At the same time, we fought the challenging economic environment and delivered
revenues within our guidance range. Although prior-year sales comparisons
continue to be difficult because of the demand environment currently
experienced by most technology-related companies, the sequential sales decline
of nine percent fits seasonal patterns."
The company combined the U.S. and Canadian regions at the beginning of the
year, and now reports consolidated North American results. North American sales
were $3.12 billion or 56 percent of the worldwide total, compared with combined
sales in the U.S. and Canada of $4.35 billion in the first quarter of last
year, a decline of 28 percent. European sales were 31 percent of the total at
$1.76 billion, a decline of 14 percent (11 percent in local currencies)
compared with sales of $2.05 billion
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3/3/3 Ingram Micro Reports First Quarter 2002 Results
a year ago. For geographic regions outside North America and Europe - which
includes Latin America and Asia-Pacific - net sales were $740 million (13
percent of the total), a decline of six percent versus last year.
Worldwide operating income before reorganization costs was $34.2 million,
down 51 percent versus the year-ago quarter, while the operating margin was
0.61 percent of revenues, consistent with the fourth quarter of last year
despite the sequential sales decline. Geographically, operating income before
reorganization costs was $24.3 million for North America, a decline of 54
percent compared with last year; $14.0 million for Europe, a decline of 41
percent versus a year ago; and an aggregated operating loss of $4.1 million for
the other international regions, a 28 percent improvement over last year
despite the economic difficulties in Argentina.
"Our better-than-expected operational performance got 2002 off to a solid
start," said Foster. "We are pleased with the results, but not satisfied. We
plan to improve our financial performance this year by further reducing
expenses, expanding the supply chain services business and developing new
opportunities for profitable growth. The achievements we make toward these
three objectives will provide a foundation for future earnings power and
enhanced value for our shareowners."
Outlook for the Second 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
Securities and Exchange Commission.
According to the company's forecast for the second quarter ending June 29,
2002, sales are expected to range from $5.25 billion to $5.40 billion, with net
income before any reorganization costs and special items ranging from $6.0
million to $9.0 million, or $0.04 to $0.06 per diluted share.
"We do not expect strong demand to return in the second quarter and
predicting the timing of an upturn is difficult," said Madden. "We're hearing
similar forecasts from our IT peers and industry experts throughout the world.
As a result, our sales guidance for the second quarter reflects a normal
sequential decline from four to seven percent. If the typical seasonal trends
continue, sales in the third quarter would be relatively flat sequentially,
followed by a sequential up-tick in the mid-single digits for the fourth
quarter."
Conference Call and Webcast
Additional information about Ingram Micro's financial results will be
presented in a conference call today at 5 p.m. EDT. To listen to the conference
call via telephone, call (888) 455-0750 (toll-free within the United States and
Canada) or (630) 395-0022 (other countries) and mention "Ingram Micro."
- more -
4/4/4 Ingram Micro Reports First Quarter 2002 Results
To listen to the call via a live audio webcast, visit the Investor Relations
page of the Ingram Micro Web site, located at www.ingrammicro.com/corp. The
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
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 are
based on current management expectations that involve certain risks, including,
without limitation: intense competition in the U.S., Canada and
internationally; the severe downturn in economic conditions (particularly
purchases of technology products) may continue or worsen; future terrorist or
military actions; 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; adverse impact of governmental
controls and actions and political or economic instability on foreign
operations; changes in local, regional, and global economic conditions and
practices; dependence 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 integrating operations
and personnel in acquisitions; disruptions due to reorganization activities;
rapid product improvement and technological change and resulting obsolescence
risks; and dependence on independent shipping companies.
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 year ended December 29, 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 37
countries with sales of more than $25 billion for the fiscal year 2001. Ingram
Micro's global regions provide the distribution of technology products and
services, marketing development and supply chain management services to nearly
170,000 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.
# # #
02-10
(C)2002 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)
March 30, December 29,
2002 2001
------------ ------------
ASSETS
Current assets:
Cash $ 379,513 $ 273,059
Investment in available-for-sale securities - 24,031
Accounts receivable, including retained
interest in securitized receivables, net 2,030,866 2,297,957
Inventories 1,505,183 1,623,628
Other current assets 215,101 238,171
------------ ------------
Total current assets 4,130,663 4,456,846
Property and equipment, net 295,385 303,833
Goodwill, net 224,588 508,227
Other 35,990 33,101
------------ ------------
Total assets $ 4,686,626 $ 5,302,007
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 2,336,504 $ 2,607,145
Accrued expenses 287,777 279,669
Current maturities of long-term debt 150,466 252,803
------------ ------------
Total current liabilities 2,774,747 3,139,617
Convertible debentures 410 405
Senior subordinated notes 197,573 204,899
Other 103,349 89,788
------------ ------------
Total liabilities 3,076,079 3,434,709
Stockholders' equity 1,610,547 1,867,298
------------ ------------
Total liabilities and stockholders' equity $ 4,686,626 $ 5,302,007
============ ============
INGRAM MICRO INC.
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CONSOLIDATED STATEMENT OF INCOME
(Dollars in 000s, except per share data)
(Unaudited)
Thirteen Weeks Ended
March 30, March 31,
2002 2001
------------- -------------
Net sales $ 5,616,551 $ 7,193,489
Cost of sales 5,312,884 6,809,294
------------- -------------
Gross profit 303,667 384,195
Selling, general and administrative expenses 269,419 313,725
------------- -------------
Income from operations before reorganization costs 34,248 70,470
Reorganization costs 3,410 -
------------- -------------
Income from operations 30,838 70,470
------------- -------------
Other income (expense):
Gain on sale of available-for-sale securities 6,535 -
Interest and other (12,838) (27,496)
------------- -------------
(6,303) (27,496)
------------- -------------
Income before income taxes and cumulative effect of adoption
of new accounting standard 24,535 42,974
Provision for income taxes 9,078 16,545
------------- -------------
Income before cumulative effect of adoption of new accounting standard 15,457 26,429
Cumulative effect of adoption of new accounting standard, net of income taxes (280,861) -
------------- -------------
Net income (loss) $ (265,404) $ 26,429
============= =============
Diluted earnings per share:
Income before cumulative effect of adoption of new accounting standard $ 0.10 $ 0.18
Cumulative effect of adoption of new accounting standard (1.84) -
------------- -------------
Net income (loss) $ (1.74) $ 0.18
============= =============
Diluted weighted average shares outstanding 152,689,927 149,347,433
============= =============
INGRAM MICRO INC.
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SUPPLEMENTARY SCHEDULE
(Dollars in thousands)
(Unaudited)
Thirteen Weeks Ended
------------------------------------------------------------
March 31, June 30, September 29, December 29, Full Year
2001 2001 2001 2001 2001
------------ ------------ ------------ ------------ ------------
North America:
Net sales $ 4,354,582 $ 3,691,474 $ 3,523,641 $ 3,312,307 $ 14,882,004
============ ============ ============ ============ ============
Operating income:
Excluding reorganization costs and special items $ 52,343 $ 25,896 $ 30,767 $ 40,623 $ 149,629
============ ============ ============ ============ ============
Including reorganization costs and special items $ 52,343 $ 7,713 $ 8,712 $ 35,905 $ 104,673
============ ============ ============ ============ ============
Other International:
Net sales $ 789,495 $ 752,132 $ 779,249 $ 827,213 $ 3,148,089
============ ============ ============ ============ ============
Operating income (loss):
Excluding reorganization costs and special items $ (5,668) $ (3,675) $ (2,578) $ (7,690) $ (19,611)
============ ============ ============ ============ ============
Including reorganization costs and special items $ (5,668) $ (3,675) $ (7,371) $ (8,671) $ (25,385)
============ ============ ============ ============ ============
NOTE:
The above represents restated 2001 financial information to reflect the
combination of the U.S. and Canadian regions into a consolidated North
American region, which was effective at the beginning of the first quarter
of 2002. The Canadian region was previously included in the Company's Other
International segment, which now includes Latin America and Asia-Pacific.