Ingram Micro posts record quarter, but Australia still lagging

Monie states Australia must return to a profitable and growing business

Ingram Micro’s worldwide sales topped $US11.38 billion during the fourth quarter ending December 29, a 14 per cent increase from the same time last year.

According to the distributor, the Australian arm was continuing to experience losses, recording a charge of $US41.8 million for a valuation allowance recorded against deferred tax assets.

Ingram Micro president and CEO, Alain Monie, stated it must return Australia to a profitable, growing business.

“We will maintain our historic focus on operational excellence, while combining improvements in returns on invested capital with revenue growth. Additionally, we will continue to examine opportunities to free up and reallocate capital from underperforming businesses into areas of better returns. Our overriding objective is to drive sustainable, long-term shareholder returns," Monie said.

"While we are entering 2013 well-positioned to drive better returns on capital and reasonable revenue growth across the business, there are several key objectives on which we must deliver.”

Acquisitions of BrightPoint and Aptec contributed about $US1 billion and $US75 million respectively to fourth quarter revenues. Last July, Ingram Micro purchased BrightPoint for $US840 million. It also bought Dubai-based Aptec in August to enhance its presence in the Middle East.

Worldwide gross profit also hit a quarterly record of $US661.2 million (5.81 percent of total sales), compared with $US554.3 million (5.57 percent of total sales) in Q4 last year.

In Asia Pacific, India and China delivered double digit growth, increasing revenue for the region by 11 per cent. The Aptec acquisition contributed about 4 percentage points to the growth.

Monie said it was witnessing early returns from investments in areas such enterprise computing and IM Logistics.

"Our fourth quarter financial performance confirmed our improved execution, as the entire company responded well to the challenge to drive a sense of urgency, better execution and increased profitability across the organisation," he said.

During the 12 months to December 29, worldwide sales were $US37.8 billion, gross profit reached $US2.04 billion. This is an increase from worldwide sales of $US36.3 billion and gross profit of $US1.91 billion in 2011 12 month period.

Twelve-month net income for 2012 was $US306.0 million, or $US1.99 per diluted share, versus $US244.2 million, or $US1.53 per diluted share, for the 2011 twelve-month period.

In the year ahead, Ingram expects worldwide consolidated revenue growth will be in the low double digits, including the BrightPoint acquisition.

Ingram chief operating and financial officer, Bill Humes, said it expects to drive annual cost synergies from the BrightPoint acquisition of at least $US55 million for 2014 and accretion to non-GAAP earnings per diluted share of at least $US0.18 in 2013 and $US0.35 in 2014, excluding one-time charges and integration costs, but including additional amortisation of intangibles of approximately $US37 million.

For the first quarter 2013, it expects to experience a seasonal sequential decline in worldwide consolidated revenue consistent with the past two years and expects a seasonal sequential decline in gross margin due primarily to lower contribution from Ingram Micro logistics services.

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