Ingram Micro Posts Better-Than-Expected Results

Ingram Micro continued on the roll it established in early 2005, reporting on Tuesday sales of $28.81 billion for the fiscal year ended Dec. 31, 2005, a 13 percent increase over sales in 2004. The company also reported a record-high net income for the fourth quarter, also ended Dec. 31, of $84.4 million compared with $79.2 million for the same period in 2004. Worldwide sales for the fourth quarter were $7.96 billion, a 7 percent increase from $7.45 billion in the prior-year period.

Officials attributed the company's fourth-quarter performance to a stronger-than-expected December and a strong focus on cost containment. Overall sales for the quarter were the highest in five years and were due primarily to outsourcing and the distributor's optimization initiative, according to company officials.

"The quarter's sales approached the high end of the range of guidance issued in October, while net income and EPS exceeded our range," said William D. Humes, Ingram Micro's executive vice president and chief financial officer. "The improvement in operating income is due, in part, to the North American outsourcing and optimization initiative announced in April 2005, a better margin mix from new business models such as AVAD, as well as our Six Sigma efforts throughout the world."

Ingram's North American fourth-quarter sales were $3.27 billion, an increase of 4 percent, vs. year-ago sales of $3.14 billion. European sales were $3.01 billion (38 percent of total revenue) vs. $2.99 billion in the year-ago quarter. Sales in U.S. dollars were up 1 percent over the prior-year period. The translation impact of the relatively weaker European currencies had an approximate nine percentage-point negative impact on comparisons to the prior year.

Offering guidance for this year's first quarter ending April 1, 2006, company officials said they expect sales to be in the $7.3 billion to $7.5 billion range, with net income expected to range from $54 million to $59 million, or 32 cents to 35 cents per share.

"Our first-quarter guidance reflects normal seasonality, coupled with the continued translation impact of the relatively weaker European currencies, which are about 7 percent softer than this time last year," said Ingram Micro CEO Greg Spierkel. "The push for 2006 will be driving growth through superior execution and differentiation. We need to proactively pursue sales in our core business and in the new areas of AIDC/POS, consumer electronics and service offerings."