Initiatives to expand the company's portfolio of products and services, geographic footprint and customer relationships throughout the world will be shared with investment community Guidance for the second quarter re-affirmedSANTA ANA, Calif., June 6, 2007 /PRNewswire-FirstCall via COMTEX News Network/ -- Ingram Micro Inc.
(NYSE: IM), the world's largest technology distributor, expects to
re-emphasize its continued focus on profitable growth at its investor
conference tomorrow by outlining a series of initiatives designed to drive
sales, enhance profitability and build shareholder value.
According to Chief Executive Officer Gregory M. Spierkel, who will lead
the meeting with members of the financial community at Ingram Micro's
corporate headquarters, "There is no structural reason why the company cannot
grow to at least $40 billion in sales and 150 basis points of annual operating
margin in three years."
Spierkel said he plans to reach these targets with a combination of core-
business enhancements and expansion into adjacencies that will further
position the company as the preeminent technology distributor. These
initiatives include:
- A broader reach into higher-margin technology segments with the launch
of an Infrastructure Technology Solutions (ITS) Division in North
America. This stand-alone unit offers dedicated resources for sales,
marketing, configuration and order management, designed to help
resellers and IT manufacturers grow their server and storage solutions
businesses. The company is authorized by respected vendors in this
space -- such as IBM, HP, Hitachi Data Systems and Quantum -- and
appointed Scott Look, an enterprise-solutions expert and former vice
president at Avnet Technology Solutions, as general manager of the
division.
- Geographic expansion into Argentina and South Africa. Operations in
Argentina are scheduled to launch next month, providing a timely entry
into a country with a stabilized economy and an information technology
market that is expected to grow greater than nine percent annually
through 2010. In South Africa, a new office in Johannesburg will open
in conjunction with the recent joint venture with MB Technologies, a
distributor of technology components to VARs, system integrators and
manufacturers throughout sub-Saharan Africa. To better reflect the
company's expanded reach into a new continent, the European business
unit will be renamed the "Europe, Middle East and Africa" (EMEA) Region.
- Further expansion in China to take advantage of the country's double-
digit economic growth. The company plans to add 100 employees to serve
customers in the networking space and in new Chinese markets.
- International expansion of AVAD, the company's specialized distributor
of high-end entertainment and automation products for the home market,
with outlets planned to open later this year in Toronto and Vancouver.
According to Spierkel, these initiatives, along with further growth and
optimization of the existing business, will drive the company's operating
performance to the following targets:
- Annual revenue growth of seven to 10 percent
- Operating income growth outpacing the rate of sales growth
- A longer-term goal of 15 percent ROIC through continuous annual
improvement
"Our growth strategy is aggressive yet attainable," said Spierkel. "The
company's expansions over the past three years have positioned us well ahead
of our chief competitors with a portfolio unmatched in the industry. I fully
expect our actions over the next three years to be at least as active, with a
focus on improving top-line growth and profitability by optimizing our core
distribution business while developing opportunities in specialty areas
outside our traditional core."
In preparation for the investor conference, the company re-affirmed sales
and income guidance for the second quarter (ending June 30, 2007). This
guidance, based on the company's current expectations and internal forecasts,
is forward-looking and actual results may differ materially, as outlined in
the company's periodic filings with the Securities and Exchange Commission.
- Sales are expected to range from $8 billion to $8.25 billion
- Net income is expected to range from $59 million to $65 million, or
$0.34 to $0.37 per diluted share
- The weighted average shares outstanding is expected to be approximately
176 million and an effective tax rate of 28 percent is estimated for the
second quarter
Ingram Micro's Investor and Analyst Day will include presentations by
corporate and regional management, a panel discussion by the specialty-unit
leaders and a tour of the AVAD showroom and distribution facility in Irvine,
Calif. The event will be Webcast live from 8:30 a.m. - 1:00 p.m. Pacific Time
tomorrow on the company's Web site at http://www.ingrammicro.com (Investor
Relations section). An archived version of the Webcast will be available on
the site for approximately one week after the conclusion of the meeting.
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,
including but not limited to statements about future revenues, sales levels,
operating income, margins, stock-based compensation expense, integration
costs, cost synergies, operating efficiencies, profitability, market share and
rates of return, are based on current management expectations that involve
certain risks which, if realized, in whole or in part, could cause such
expectations to fail to be achieved and have a material adverse effect on
Ingram Micro's business, financial condition and results of operations,
including, without limitation: (1) intense competition, regionally and
internationally, including competition from alternative business models, such
as manufacturer-to-end-user selling, which may lead to reduced prices, lower
sales or reduced sales growth, lower gross margins, extended payment terms
with customers, increased capital investment and interest costs, bad debt
risks and product supply shortages; (2) integration of our acquired businesses
and similar transactions involve various risks and difficulties -- our
operations may be adversely impacted by an acquisition that (i) is not suited
for us, (ii) is improperly executed, or (iii) substantially increases our
debt; (3) foreign exchange rate fluctuations, devaluation of a foreign
currency, adverse governmental controls or actions, political or economic
instability, or disruption of a foreign market, and other related risks of our
international operations may adversely impact our operations in that country
or globally; (4) we may not achieve the objectives of our process improvement
efforts or be able to adequately adjust our cost structure in a timely fashion
to remain competitive, which may cause our profitability to suffer; (5) our
failure to attract new sources of profitable business from expansion of
products or services or risks associated with entry into new markets,
including geographies, products and services, could negatively impact our
future operating results; (6) an interruption or failure of or disruptions due
to changes to our information systems or subversion of access or other system
controls may result in a significant loss of business, assets, or competitive
information and may adversely impact our results of operations; (7)
significant changes in supplier terms, such as higher thresholds on sales
volume before distributors may qualify for discounts and/or rebates, the
overall reduction in the amount of incentives available, reduction or
termination of price protection, return levels, or other inventory management
programs, or reductions in payment terms, may adversely impact our results of
operations or financial condition; (8) termination of a supply or services
agreement with a major supplier or product supply shortages may adversely
impact our results of operations; (9) changes in, or interpretations of, tax
rules and regulations may adversely affect our effective tax rates or we may
be required to pay additional tax assessments; (10) we cannot predict with
certainty, the outcome of the SEC and U.S. Attorney's inquiries or assessments
by Brazilian taxing authorities; (11) if there is a downturn in economic
conditions for an extended period of time, it will likely have an adverse
impact on our business; (12) we may experience loss of business from one or
more significant customers, and an increased risk of credit loss as a result
of reseller customers' businesses being negatively impacted by dramatic
changes in the information technology products and services industry as well
as intense competition among resellers -- increased losses, if any, may not be
covered by credit insurance or we may not be able to obtain credit insurance
at reasonable rates or at all; (13) rapid product improvement and
technological change resulting in inventory obsolescence or changes in demand
may result in a decline in value of a portion of our inventory; (14) future
terrorist or military actions could result in disruption to our operations or
loss of assets, in certain markets or globally; (15) the loss of a key
executive officer or other key employees, or changes affecting the work force
such as government regulations, collective bargaining agreements or the
limited availability of qualified personnel, could disrupt operations or
increase our cost structure; (16) changes in our credit rating or other market
factors may increase our interest expense or other costs of capital, or
capital may not be available to us on acceptable terms to fund our working
capital needs; (17) our failure to adequately adapt to industry changes and to
manage potential growth and/or contractions could negatively impact our future
operating results; (18) future periodic assessments required by current or new
accounting standards such as those relating to long-lived assets, goodwill and
other intangible assets and expensing of stock options may result in
additional non-cash charges; (19) seasonal variations in the demand for
products and services, as well as the introduction of new products, may cause
variations in our quarterly results; and (20) the failure of certain shipping
companies to deliver product to us, or from us to our customers, may adversely
impact our results of operations.
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 significant factors
to consider in connection with forward-looking statements concerning Ingram
Micro, reference is made to Item 1A Risk Factors of Ingram Micro's Annual
Report on Form 10-K for the year ended December 30, 2006; other risks or
uncertainties may be detailed from time to time in Ingram Micro's future SEC
filings. Ingram Micro disclaims any duty to update any forward-looking
statements.
About Ingram Micro Inc.
As a vital link in the technology value chain, Ingram Micro creates sales
and profitability opportunities for vendors and resellers through unique
marketing programs, outsourced logistics services, technical support,
financial services, and product aggregation and distribution. The company
serves more than 150 countries and is the only global broadline IT distributor
with operations in Asia. Visit http://www.ingrammicro.com.
2007 Ingram Micro Inc. All rights reserved. Ingram Micro and the
registered Ingram Micro logo are trademarks used under license by Ingram Micro
Inc.
SOURCE Ingram Micro Inc.
Media, Jim Trainor, +1-714-382-2378, jim.trainor@ingrammicro.com, or Rekha
Parthasarathy, +1-714-382-1319, rekha@ingrammicro.com, or Investors, Ria Marie
Carlson, +1-714-382-4400, ria.carlson@ingrammicro.com, or Kay Leyba, +1-714-382-4175,
kay.leyba@ingrammicro.com, all of Ingram Micro Inc.
http://www.ingrammicro.com/
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