Ingram Micro Reports First Quarter Financial Results

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IRVINE, Calif.--(BUSINESS WIRE)-- Ingram Micro Inc. today announced financial results for the first quarter ended March 31, 2018. Ingram Micro experienced strong global demand, led by double-digit growth in all business lines, including technology solutions, commerce and lifecycle services and cloud. Worldwide 2018 first quarter sales were $11.76 billion, an increase of 13 percent in USD, with gross margin of 6.33 percent. This compares to sales of $10.40 billion and gross margin of 6.33 percent in the 2017 first quarter. The translation of foreign currencies versus last year had a positive impact of approximately 6 percentage points on worldwide sales. 2018 first quarter non-GAAP operating income was $135 million, or 1.15 percent of revenue, and non-GAAP net income was $82 million. This compares to 2017 first quarter non-GAAP operating income of $102 million, or 0.98 percent of revenue, and non-GAAP net income of $56 million. 2018 first quarter GAAP operating income and net income was $87 million, or 0.74 percent of revenue, and $47 million, respectively, including: the pre-tax negative impact of $24 million in restructuring, acquisition and transition costs primarily related to a global reorganization program executed during the first quarter of 2018, and the pre-tax negative impact of $25 million in amortization expense. This compares to 2017 first quarter GAAP operating income and net income of $41 million, or 0.39 percent of revenue, and $38 million, respectively.

Non-GAAP Disclosures

In addition to GAAP results, Ingram Micro is reporting non-GAAP operating income, non-GAAP operating margin and non-GAAP net income for the 2018 first quarter ended March 31, 2018. These non-GAAP measures exclude charges associated with reorganization, acquisitions, integration and transition costs, including those associated with the company’s cost savings programs, and the amortization of intangible assets. Non-GAAP net income also excludes the impact of foreign exchange gains or losses related to the translation effect on Euro-based inventory purchases in Ingram Micro’s pan-European entity. 2017 first quarter non-GAAP operating income also excludes merger costs and 2017 non-GAAP net income also excludes a non-cash tax benefit primarily related to the reversal of a valuation allowance against certain deferred tax assets in Australia. The non-GAAP measures noted above are primary indicators that Ingram Micro’s management uses internally to conduct and measure its business and evaluate the performance of its consolidated operations and operating segments. Ingram Micro’s management believes these non-GAAP financial measures are useful because they provide meaningful comparisons to prior periods and an alternate view of the impact of acquired businesses. These non-GAAP financial measures are used in addition to and in conjunction with results presented in accordance with GAAP. These non-GAAP financial measures reflect an additional way of viewing aspects of our operations that, when viewed with our GAAP results and the accompanying reconciliations to corresponding GAAP financial measures, provide a more complete understanding of factors and trends affecting Ingram Micro’s business. A material limitation associated with these non-GAAP measures as compared to the GAAP measures is that they may not be comparable to other companies with similarly titled items that present related measures differently. The non-GAAP measures should be considered as a supplement to, and not as a substitute for or superior to, the corresponding measures calculated in accordance with GAAP. A reconciliation of GAAP to non-GAAP financial measures for the periods presented is attached to this press release.

About Ingram Micro Inc.

Ingram Micro helps businesses realize the promise of technology™. It delivers a full spectrum of global technology and supply chain services to businesses around the world. Deep expertise in technology solutions, mobility, cloud, and supply chain solutions enables its business partners to operate efficiently and successfully in the markets they serve. More at www.ingrammicro.com.

© 2018 Ingram Micro Inc. All rights reserved. Ingram Micro and the registered Ingram Micro logo are trademarks used under license by Ingram Micro Inc.

                         
Ingram Micro Inc.
Consolidated Balance Sheet
(Amounts in 000s)
(Unaudited)
 
March 31, December 30,
2018 2017
ASSETS
Current assets:
Cash and cash equivalents $ 484,494 $ 549,558
Restricted cash - 14,379
Trade accounts receivable, net 6,775,869 7,626,191
Inventory 4,490,411 4,471,440
Other current assets   595,193   618,733
 
Total current assets 12,345,967 13,280,301
 
Property and equipment, net 423,976 417,439
Goodwill 973,708 990,372
Intangible assets, net 403,216 385,152
Other assets   278,090   299,879
 
Total assets $ 14,424,957 $ 15,373,143
 
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Accounts payable $ 7,257,736 $ 7,760,380
Accrued expenses 759,025 881,672
Short-term debt and current maturities of long-term debt   139,004   127,512
 
Total current liabilities 8,155,765 8,769,564
 
Long-term debt, less current maturities 1,706,637 1,982,118
Other liabilities   228,193   298,904
 
Total liabilities 10,090,595 11,050,586
 
Stockholder's equity   4,334,362   4,322,557
 
Total liabilities and stockholder's equity $ 14,424,957 $ 15,373,143
 
 
                         
Ingram Micro Inc.
Consolidated Statement of Income
(Amounts in 000s)
(Unaudited)
 
Thirteen Weeks Ended
March 31, 2018 April 1, 2017
 
Net sales $ 11,762,140 $ 10,402,939
Cost of sales   11,017,579     9,744,311  
Gross profit   744,561     658,628  
 
Operating expenses:
Selling, general and administrative 618,246 557,623
Amortization of intangible assets 24,733 22,359
Reorganization costs 14,916 4,468
Merger related costs   -     33,674  
  657,895     618,124  
 
Income from operations   86,666     40,504  
 
Other expense (income):
Interest income (5,122 ) (2,079 )
Interest expense 27,059 26,163
Net foreign currency exchange gain (5,077 ) (3,327 )
Other   6,085     4,616  
  22,945     25,373  
 
Income before income taxes 63,721 15,131
 
Provision for (benefit from) income taxes   17,128     (22,722 )
 
Net income $ 46,593   $ 37,853  
 
 
                         
Ingram Micro Inc.
Consolidated Statement of Cash Flows
(Amounts in 000s)
(Unaudited)
 
Thirteen Weeks Ended
March 31, 2018 April 1, 2017
Cash flows from operating activities:
Net income $ 46,593 $ 37,853
Adjustments to reconcile net income to cash provided (used) by operating activities:
Depreciation and amortization 51,808 49,204
Share-based compensation 3,397 3,191
Unpaid merger related costs - 33,674
Gain on marketable securities, net (1,724 ) (2,081 )
Gain on sale of property and equipment (425 ) (369 )
Noncash charges for interest and bond discount amortization 1,002 1,311
Deferred income taxes 12,711 (33,959 )
Changes in operating assets and liabilities:
Trade accounts receivable 913,663 939,970
Inventory 8,970 (21,398 )
Other current assets 37,033 42,616
Accounts payable (444,998 ) (1,202,591 )
Change in book overdrafts (133,033 ) (113,085 )
Accrued expenses   (207,665 )   (170,474 )
Cash provided (used) by operating activities   287,332     (436,138 )
 
Cash flows from investing activities:
Capital expenditures (31,523 ) (34,811 )
Movements from restricted cash 14,379 23,766
Sale of marketable securities, net 2,717 -
Realized gain on marketable securities, net - (109 )
Proceeds from sale of property and equipment 769 326
Return of investment 163 -
Acquisitions, net of cash acquired   (2,153 )   -  
Cash used by investing activities   (15,648 )   (10,828 )
 
Cash flows from financing activities:
Equity contribution from Parent - 37,500
Settlement of stock-based awards due to Merger (13,488 ) (22,145 )
Other consideration for acquisitions (3,609 ) (1,070 )
Dividend paid to shareholder (39,779 ) -
Net (repayments of) proceeds from revolving and other credit facilities   (270,303 )   89,435  
Cash (used) provided by financing activities   (327,179 )   103,720  
 
Effect of exchange rate changes on cash and cash equivalents   (9,569 )   (1,535 )
 
Decrease in cash and cash equivalents (65,064 ) (344,781 )
 
Cash and cash equivalents, beginning of period   549,558     796,164  
 
Cash and cash equivalents, end of period $ 484,494   $ 451,383  
 
 
                         
Ingram Micro Inc.
Supplementary Information
Income from Operations - Reconciliation of GAAP to Non-GAAP Information
(Amounts in Millions)
(Unaudited)
 
Thirteen Weeks Ended
March 31, 2018 April 1, 2017
 
Net Sales $ 11,762.1   $ 10,403.0  
 
GAAP Operating Income $ 86.7 $ 40.5
Reorganization, integration and transition costs 23.5 5.7
Amortization of intangible assets 24.7 22.4
Merger related costs   -     33.7  
 
Non-GAAP Operating Income $ 134.9   $ 102.3  
 
 
 
GAAP Operating Margin 0.74 % 0.39 %
Non-GAAP Operating Margin 1.15 % 0.98 %
 
 
                         
Ingram Micro Inc.
Supplementary Information
Reconciliation of GAAP to Non-GAAP Financial Measures
(Amounts in Millions)
(Unaudited)
 
Thirteen Weeks Ended
March 31, 2018 April 1, 2017
Net Income Net Income
 
As Reported Under GAAP $ 46.6 $ 37.9
Reorganization, integration and transition costs 16.6 4.3
Amortization of intangible assets 17.5 16.8
Merger related costs - 25.3
Pan-Europe foreign currency exchange loss 1.0 1.8
Reversal of a valuation allowance against certain deferred tax assets in Australia   -   (30.6 )
 
Non-GAAP Financial Measure $ 81.7 $ 55.5  

Note: Amounts above are net of applicable income taxes.

 

Ingram Micro Inc.
Damon Wright, (714) 382-5013
damon.wright@ingrammicro.com

Source: Ingram Micro Inc.

Released May 1, 2018