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 30, 2019. Ingram Micro experienced solid global demand and a strong increase in profits, led by strong double-digit sales growth in commerce and lifecycle services and cloud and an increase in profitability across all lines of business. Worldwide 2019 first quarter sales were $11.58 billion, a decrease of 2 percent in USD, with gross margin of 6.66 percent, up 33 basis points. This compares to sales of $11.76 billion and gross margin of 6.33 percent in the 2018 first quarter. The translation of foreign currencies versus last year had a negative impact of approximately 4 percentage points on worldwide sales. 2019 first quarter non-GAAP operating income was $154 million, or 1.33 percent of revenue, and non-GAAP net income was $95 million. This compares to 2018 first quarter non-GAAP operating income of $135 million, or 1.15 percent of revenue, and non-GAAP net income of $82 million. 2019 first quarter GAAP operating income and net income were $126 million, or 1.08 percent of revenue, and $77 million, respectively, including: the pre-tax negative impact of $8 million in restructuring, acquisition and transition costs and the pre-tax negative impact of $20 million in amortization expense. This compares to 2018 first quarter GAAP operating income and net income of $87 million, or 0.74 percent of revenue, and $47 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 2019 first quarter ended March 30, 2019. 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. 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.

© 2019 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)
 
March 30, December 29,
2019 2018
ASSETS
Current assets:
Cash and cash equivalents $ 553,926 $ 533,949
Trade accounts receivable, net 6,801,761 7,756,983
Inventory 4,514,009 4,509,474
Other current assets   670,120   669,044
 
Total current assets 12,539,816 13,469,450
 
Property and equipment, net 433,129 421,008
Goodwill 936,496 938,407
Intangible assets, net 296,426 316,597
Other assets   319,257   317,318
 
Total assets $ 14,525,124 $ 15,462,780
 
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Accounts payable $ 7,590,896 $ 8,578,895
Accrued expenses 904,968 835,474
Short-term debt and current maturities of long-term debt   128,119   175,215
 
Total current liabilities 8,623,983 9,589,584
 
Long-term debt, less current maturities 1,308,469 1,313,287
Other liabilities   174,004   163,806
 
Total liabilities 10,106,456 11,066,677
 
Stockholder's equity   4,418,668   4,396,103
 
Total liabilities and stockholder's equity $ 14,525,124 $ 15,462,780
 
 
                         
Ingram Micro Inc.
Consolidated Statements of Income
(Amounts in 000s)
(Unaudited)
 
Thirteen Weeks Ended
March 30, 2019 March 30, 2018
 
Net sales $ 11,575,516 $ 11,762,140
Cost of sales   10,804,055     11,017,579  
Gross profit   771,461     744,561  
 
Operating expenses:
Selling, general and administrative 625,926 618,246
Amortization of intangible assets 19,708 24,733
Reorganization costs   303     14,916  
  645,937     657,895  
 
Income from operations   125,524     86,666  
 
Other (income) expense:
Interest income (2,353 ) (5,122 )
Interest expense 27,038 27,059
Net foreign currency exchange gain (11,070 ) (5,077 )
Other   6,369     6,085  
  19,984     22,945  
 
Income before income taxes 105,540 63,721
 
Provision for income taxes   29,005     17,128  
 
Net income $ 76,535   $ 46,593  
 
 
                         
Ingram Micro Inc.
Consolidated Statements of Cash Flows
(Amounts in 000s)
(Unaudited)
 
Thirteen Weeks Ended
March 30, 2019 March 31, 2018
 
Cash flows from operating activities:
Net income $ 76,535 $ 46,593
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization 48,598 51,808
Gain on marketable securities, net (5,309 ) (1,724 )
Loss (gain) on sale of property and equipment 20 (425 )
Noncash charges for interest and bond discount amortization 578 1,002
Deferred income taxes (549 ) 12,711

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

Trade accounts receivable 1,189,276 913,663
Inventory (91,181 ) 8,970
Other current assets 641 37,033
Accounts payable (874,940 ) (444,998 )
Change in book overdrafts (94,607 ) (133,033 )
Accrued expenses   (43,094 )   (204,268 )
Cash provided by operating activities   205,968     287,332  
 
Cash flows from investing activities:
Capital expenditures (42,953 ) (31,523 )
Movements from restricted cash - 14,379
(Purchase) sale of marketable securities, net (2,095 ) 2,717
Proceeds from sale of property and equipment 337 769
Return of investment - 163
Acquisitions, net of cash acquired   -     (2,153 )
Cash used by investing activities   (44,711 )   (15,648 )
 
Cash flows from financing activities:
Settlement of stock-based awards due to Merger - (13,488 )
Other consideration for acquisitions (1,600 ) (3,609 )
Dividends paid to shareholders (82,710 ) (39,779 )
Net repayments of revolving and other credit facilities   (53,499 )   (270,303 )
Cash used by financing activities   (137,809 )   (327,179 )
 
Effect of exchange rate changes on cash and cash equivalents   (3,471 )   (9,569 )
 
Increase (decrease) in cash and cash equivalents 19,977 (65,064 )
 
Cash and cash equivalents, beginning of period   533,949     549,558  
 
Cash and cash equivalents, end of period $ 553,926   $ 484,494  
 
 
                         
Ingram Micro Inc.
Supplementary Information
Income from Operations - Reconciliation of GAAP to Non-GAAP Information
(Amounts in Millions)
(Unaudited)
 
Thirteen Weeks Ended
March 30, 2019 March 31, 2018
 
Net Sales $ 11,575.5   $ 11,762.1  
 
GAAP Operating Income $ 125.5 $ 86.7
Reorganization, integration and transition costs 8.4 23.5
Amortization of intangible assets   19.7     24.7  
 
Non-GAAP Operating Income $ 153.6   $ 134.9  
 
 
 
GAAP Operating Margin 1.08 % 0.74 %
Non-GAAP Operating Margin 1.33 % 1.15 %
 
 
                         
Ingram Micro Inc.
Supplementary Information
Reconciliation of GAAP to Non-GAAP Financial Measures
(Amounts in Millions)
(Unaudited)
 
Thirteen Weeks Ended
March 30, 2019 March 31, 2018
Net Income Net Income
 
As Reported Under GAAP $ 76.5 $ 46.6
Reorganization, integration and transition costs 6.3 16.6
Amortization of intangible assets 14.8 17.5
Pan-Europe foreign currency exchange (gain) loss   (2.5 )   1.0
 
Non-GAAP Financial Measure $ 95.1   $ 81.7

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, 2019