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 |
|||||||||||||||||||
| 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.
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