Ingram Micro Australia praised by global boss in Q2 results report

Ingram Micro Australia has been singled out for praise by global president and CEO, Alain Monie, in the company's worldwide second quarter financial report.

In a statement, Ingram Australia earns two honourable mentions.

Monie initially states, "I am pleased with our performance in the second quarter, as we executed well against our key objectives for the year, resulting in significant improvements across several important financial metrics ...

"We continued to improve in Australia, benefited from accretion to adjusted earnings per diluted share of $US0.10 from our new mobility business and saw gross margins expand, due in part to the investments we have made in areas such as advanced solutions, mobility, logistics services and Cloud.

"We also strengthened our balance sheet as we drove strong cash flow from operations. We are managing our growth well and we believe continued execution on our strategic initiatives to increase the ratio of our higher-margin, and better-returns businesses will result in above market growth rates, while also improving profitability and generating better shareholder returns."

Under second quarter highlights, there is a further reference: "Australia's revenue grew for the second quarter in a row and the country reduced its operating loss to less than $3 million, a significant improvement from the operating loss of $9 million in last year's second quarter and the operating loss of more than $5 million in the 2013 first quarter.

On a worldwide basis, Ingram reported sales of $US10.3 billion, up 17 per cent in US dollars, when compared with $US8.8 billion in the second quarter last year. The translation effect of foreign currencies had a de minimis influence on worldwide sales as compared with the prior year. The company's 2012 fourth quarter acquisitions of Brightpoint, Inc. (also referred to as the mobility business) and Aptec Holdings Ltd. added $US1.2 billion and $US90 million, respectively, to 2013 second quarter revenue, contributing ­­15 percentage points to the growth.

Worldwide gross profit was $US596 million (5.78 per cent of total sales), compared with $US453 million (5.16 per cent of total sales) in the 2012 second quarter. The 2013 second quarter gross margin benefited by 58 basis points from the addition of higher gross margin revenue from the company's mobility business, driven largely by its services business.

Operating income was $US114 million (1.10 per cent of total sales), compared with 2012 second quarter operating income of $US98 million (1.11 per cent of total sales). 2013 second quarter net income was $US70 million, or $US0.45 per diluted share. This compares with 2012 second quarter net income of $US61 million, or $US0.40 per diluted share.

Adjusted operating income for the 2013 second quarter was $136 million (1.32 per cent of total sales). This compares with adjusted operating income for the 2012 second quarter of $107 million (1.22 per cent of total sales). 2013 second quarter adjusted net income was $US86 million, or $US0.55 per diluted share, compared with adjusted net income of $US67 million, or $US0.43 cents per diluted share, in the 2012 second quarter, which included a discrete tax benefit of $US4.4 million, or approximately $US0.03 cents per diluted share.

2013 second quarter net income and adjusted net income benefited from $US5.8 million of discrete tax benefits, which resulted in an effective tax rate of 25.6 per cent, primarily related to a change in estimate of the amount of mobility business acquisition costs deductible for tax purposes. The discrete tax benefits in the quarter benefited earnings per diluted share and adjusted earnings per diluted share by $US0.03 cents.

Second quarter cash flow from operations was $US510 million, driven by improved profitability and a 4 day sequential improvement in working capital. This resulted in cash flow from operations of $US328 million for the six months ended June 29, 2013.

Looking ahead, Ingram stated that for the 2013 third quarter, the company expected to maintain its consolidated gross margin rate, with worldwide revenue expected to be flat to slightly up sequentially, in line with historic seasonality.

In addition, 2013 third quarter net income and adjusted net income were expected to benefit from income of about $US18 million after-tax, or $US0.11 cents per diluted share, related to a settlement from a class action proceeding seeking damages from certain manufacturers of LCD flat panel displays.