Ingram Micro Reports 2021 First Quarter Financial Results

All Lines of Business Deliver Strong Double-Digit Growth in Net Sales, Gross and Operating Profits

Acquisition by Platinum Equity Expected to Close at the end of the 2021 Second Quarter

IRVINE, Calif.--(BUSINESS WIRE)-- Ingram Micro Inc. today announced financial results for the 2021 first quarter ended Apr. 3, 2021. The company said its business is benefiting from strong demand for the technology products and services necessary to support the “next normal” with new and innovative solutions to facilitate hybrid working, learning and general everyday living environments. This continued demand, along with the global shift to greater reliance on e-commerce related activities and heightened demand for cloud-based platforms and offerings, helped drive strong double-digit growth in net sales and gross and operating profitability across all lines of business.

Worldwide 2021 first quarter net sales were $13.4 billion, an increase of nearly $2.5 billion, or 23 percent in USD. The translation of foreign currencies compared to 2020 had a positive impact on 2021 first quarter net sales of 4.3 percent. 2021 first quarter gross profit increased by $189 million, or 24 percent, to $984 million, with gross margin growing to 7.32 percent. This compares to net sales of $11 billion, gross profit of $795 million and gross margin of 7.26 percent for the 2020 first quarter. 2021 first quarter non-GAAP operating income increased by more than $100 million to $264 million, or 1.96 percent of net sales, up 51 basis-points over last year, with non-GAAP net income for the 2021 first quarter increasing more than $75 million to $178 million. This compares to 2020 first quarter non-GAAP operating income of $158 million, or 1.45 percent of net sales, and non-GAAP net income of $101 million. 2021 first quarter GAAP operating income was $246 million, or 1.83 percent of net sales, and GAAP net income was $173 million (with the primary GAAP to non-GAAP difference made up of pre-tax amortization expense of $16 million and our Pan-European entity’s foreign currency exchange gain of $8 million). This compares to 2020 first quarter GAAP operating income and net income of $140 million, or 1.28 percent of net sales, and $91 million, respectively.

The company said Platinum Equity’s acquisition of Ingram Micro from HNA Technology Co., Ltd. is expected to close at the end of the 2021 second quarter.

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 periods covered in this release. 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. These non-GAAP financial measures also exclude tax benefits related to research and development credit in 2020. Non-GAAP net income also excludes the impact of foreign currency exchange gains or losses related to the translation effect on Euro-based inventory purchases in Ingram Micro’s pan-European entity. 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.

© 2021 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 Sheets
(Amounts in 000s)
(Unaudited)
 
 
April 3, January 2,

 

2021

 

2021

 
ASSETS
Current assets:
Cash and cash equivalents

$

1,040,303

$

1,410,468

Trade accounts receivable, net

 

7,623,449

 

8,478,281

Inventory

 

4,905,643

 

4,645,902

Other current assets

 

612,883

 

607,999

 
Total current assets

 

14,182,278

 

15,142,650

 
Property and equipment, net

 

452,827

 

459,308

Operating lease right-of-use assets

 

509,509

 

-

Goodwill

 

976,633

 

975,375

Intangible assets, net

 

191,540

 

210,206

Other assets

 

383,650

 

397,374

 
Total assets

$

16,696,437

$

17,184,913

 
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Accounts payable

$

8,428,854

$

9,687,427

Accrued expenses

 

979,381

 

1,272,145

Short-term debt and current maturities of long-term debt

 

73,818

 

79,032

Short-term operating lease liabilities

 

132,553

 

-

 
Total current liabilities

 

9,614,606

 

11,038,604

 
Long-term debt, less current maturities

 

1,435,744

 

931,579

Long-term operating lease liabilities, net of current portion

 

388,828

 

-

Other liabilities

 

210,049

 

193,970

 
Total liabilities

 

11,649,227

 

12,164,153

 
Stockholder's equity

 

5,047,210

 

5,020,760

 
Total liabilities and stockholder's equity

$

16,696,437

$

17,184,913

Ingram Micro Inc.
Consolidated Statements of Income
(Amounts in 000s)
(Unaudited)
 
 
Thirteen Weeks Ended
April 3, 2021 March 28, 2020
 
Net sales

$

13,444,547

 

$

10,951,448

 

Cost of sales

 

12,460,426

 

 

10,156,047

 

Gross profit

 

984,121

 

 

795,401

 

 
Operating expenses:
Selling, general and administrative

 

722,242

 

 

639,477

 

Amortization of intangible assets

 

15,807

 

 

15,463

 

 

738,049

 

 

654,940

 

 
Income from operations

 

246,072

 

 

140,461

 

 
Other (income) expense:
Interest income

 

(6,448

)

 

(4,442

)

Interest expense

 

19,197

 

 

24,643

 

Net foreign currency exchange gain

 

(7,549

)

 

(7,414

)

Other

 

7,547

 

 

6,759

 

 

12,747

 

 

19,546

 

 
Income before income taxes

 

233,325

 

 

120,915

 

 
Provision for income taxes

 

60,567

 

 

29,586

 

 
Net income

$

172,758

 

$

91,329

 

Ingram Micro Inc.

Consolidated Statements of Cash Flows

(Amounts in 000s)

(Unaudited)

 
Thirteen Weeks Ended
April 3, 2021 March 28, 2020
 
Cash flows from operating activities:
Net income

$

172,758

 

$

91,329

 

Adjustments to reconcile net income to cash (used) provided by operating activities:
Depreciation and amortization

 

49,430

 

 

46,533

 

(Gain) loss on marketable securities, net

 

(2,799

)

 

8,906

 

Loss (gain) on sale of property and equipment

 

126

 

 

(358

)

Revaluation of other consideration for acquisitions

 

-

 

 

224

 

Noncash charges for interest and bond discount amortization

 

533

 

 

660

 

Amortization of operating lease assets

 

38,956

 

 

-

 

Deferred income taxes

 

18,201

 

 

35,358

 

Changes in operating assets and liabilities, net of effects of acquisitions:
Trade accounts receivable

 

797,340

 

 

882,436

 

Inventory

 

(292,815

)

 

37,407

 

Other assets

 

(568,164

)

 

(18,744

)

Accounts payable

 

(859,690

)

 

(544,938

)

Change in book overdrafts

 

(298,823

)

 

(337,665

)

Operating lease liabilities

 

527,218

 

 

-

 

Accrued expenses

 

(249,849

)

 

(189,709

)

Cash (used) provided by operating activities

 

(667,578

)

 

11,439

 

 
Cash flows from investing activities:
Capital expenditures

 

(28,990

)

 

(33,670

)

Purchase of marketable securities, net

 

(3,748

)

 

(905

)

Proceeds from sale of property and equipment

 

449

 

 

569

 

Acquisitions, net of cash acquired

 

(12,589

)

 

(18,260

)

Cash used by investing activities

 

(44,878

)

 

(52,266

)

 
Cash flows from financing activities:
Other consideration for acquisitions

 

(160

)

 

-

 

Dividends paid to shareholders

 

(120,899

)

 

(124,785

)

Net proceeds from revolving and other credit facilities

 

492,325

 

 

118,568

 

Cash provided (used) by financing activities

 

371,266

 

 

(6,217

)

 
Effect of exchange rate changes on cash and cash equivalents

 

(28,975

)

 

(33,312

)

 
Decrease in cash and cash equivalents

 

(370,165

)

 

(80,356

)

 
Cash and cash equivalents, beginning of period

 

1,410,468

 

 

671,821

 

 
Cash and cash equivalents, end of period

$

1,040,303

 

$

591,465

 

Ingram Micro Inc.
Supplementary Information
Income from Operations - Reconciliation of GAAP to Non-GAAP Information
(Amounts in Millions)
(Unaudited)
 
 
Thirteen Weeks Ended
April 3, 2021 March 28, 2020
 
Net Sales

$

13,444.5

 

$

10,951.4

 

 
GAAP Operating Income

$

246.1

 

$

140.5

 

Reorganization, integration and transition costs

 

3.9

 

 

2.5

 

Settlement of a class action lawsuit

 

(2.1

)

 

-

 

Amortization of intangible assets

 

15.8

 

 

15.5

 

 
Non-GAAP Operating Income

$

263.7

 

$

158.5

 

 
 
 
GAAP Operating Margin

 

1.83

%

 

1.28

%

Non-GAAP Operating Margin

 

1.96

%

 

1.45

%

 
Ingram Micro Inc.
Supplementary Information
Reconciliation of GAAP to Non-GAAP Financial Measures
(Amounts in Millions)
(Unaudited)
 
 
Thirteen Weeks Ended
April 3, 2021 March 28, 2020
 
Net Income Net Income
 
As Reported Under GAAP

$

172.8

 

$

91.3

 

Reorganization, integration and transition costs

 

1.9

 

 

1.6

 

Settlement of a class action lawsuit

 

(1.0

)

 

-

 

Amortization of intangible assets

 

7.7

 

 

10.1

 

Pan-Europe foreign currency exchange gain

 

(3.7

)

 

(0.2

)

Tax benefit on research and development credit

 

-

 

 

(1.7

)

 
Non-GAAP Financial Measure

$

177.7

 

$

101.1

 

 
 
 
 
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.