World's Largest Technology Distributor Expands its Consumer Electronics
Portfolio by Purchasing a Leading U.S. Provider of Accessories
SANTA ANA, Calif., June 13 /PRNewswire/ -- Ingram Micro Inc. (NYSE: IM),
the world's largest technology distributor, strengthened its position in the
consumer electronics market today with the signing of a definitive agreement
to acquire certain net assets of DBL Distributing Inc., one of the nation's
top distributors of consumer electronics (CE) accessories and related
products.
"Our acquisition of DBL Distributing is another step forward in Ingram
Micro's consumer electronics strategy," said Greg Spierkel, chief executive
officer, Ingram Micro Inc. "This strategy positions Ingram Micro at the
forefront of two significant trends: the continuing convergence of commercial
and consumer technologies and the growing importance of retailers in the
marketplace. The transaction is an example of how we plan to deploy capital
in the future -- through strategic acquisitions that spur growth, enhance
profitability and expand our addressable market."
DBL Distributing, based in Scottsdale, Ariz. with approximately 350
employees, offers a comprehensive mix of more than 17,000 consumer electronics
products to thousands of independent retailers across the United States. The
company reported 2006 sales of nearly $300 million, following four years of
double-digit sales growth, with gross and operating margins double those of
Ingram Micro's core distribution business.
"While our purchase of AVAD two years ago made us leaders in the custom
installation market, the acquisition of DBL makes us leaders in the
independent retail market," said Keith Bradley, president, Ingram Micro North
America. "This acquisition provides us with a complementary portfolio of
products and services for a new and expansive customer base. We plan to
leverage this opportunity by cross-selling our current selection of
information technology products to DBL's customers as well as offer our
customers access to DBL's extensive CE accessory products."
Bradley added that DBL Distributing will operate as a wholly owned
subsidiary of Ingram Micro Inc., maintaining the same brand name, business
model and management structure to ease the transition for customers and vendor
partners of both companies.
"DBL Distributing is excited to be a part of Ingram Micro and at the
prospect of being able to offer a wider range of information technology
products to our customer base," said David Lorsch, president and CEO of DBL
Distributing. "Our world-class management team led the company to 18 straight
years of impressive annual growth, and we're looking forward to joining with
Ingram Micro to provide the necessary resources and capital to help us
continue this legacy."
The agreement calls for a purchase price of $96 million, subject to final
working capital adjustments, and will be financed through existing borrowing
capacity. The transaction is expected to be nominally accretive to earnings
per share in 2007, building to approximately $0.03 and $0.06 in 2008 and 2009,
respectively, which assumes annual non-cash amortization expense for
intangibles of approximately $3.0 million and a combined U.S. federal and
state income tax rate of 40 percent.
DBL Distributing publishes the most comprehensive CE wholesale catalog in
the industry, highlighting a vendor base that includes renowned CE brands such
as Philips, Samsung and Sony. As part of this transaction, Ingram Micro has
also purchased NXG Technology, DBL's own exclusive brand of custom audio and
video installation products. The NXG brand includes two complete lines of
audio/video cables, three complete lines of in-wall and indoor/outdoor
speakers and a complete offering of in-wall volume controls and A/V selectors.
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.
About DBL Distributing Inc.
DBL Distributing, Inc. is one of the nation's top distributors of consumer
electronics accessories and related products, with more than 30,000 retail
customers nationwide. Headquartered in a custom-built 144,000 square foot
facility in Scottsdale, Arizona, DBL carries more than 17,000 products from
nearly 400 quality manufacturers. DBL offers same-day shipping for orders
placed by 5:00 p.m. MST, a best price for 1 or 100 piece policy and has a "no
minimum" order policy. DBL's business strategy proves that customers come
first. For more information please visit http://www.dbldistributing.com, or
call (800) 733-6766.
SOURCE Ingram Micro Inc.
06/13/2007
CONTACT: 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.
Web site: http://www.ingrammicro.com
http://www.dbldistributing.com
(IM)
.gif)