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Non-Tech : Ingram Micro

IM 38.89

0.0%

Dec 13 4:00 PM EST

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To: E_K_S who wrote (528)	2/19/2000 6:41:00 AM
From: Dale Stempson	Read Replies (1) of 576

RE: Inventory If I noted it correctly from the CC, provisions for excess and slow-moving inventory normally run between 0.12% and 0.13% of sales. The large $48 million provision for Q4 equates to about 0.62% of sales. There was considerable CC discussion of the various unusual charges taken, but I can't recall for certain if IM commented on whether the percentage would likely return to normal in Q1. I doubt it will. They did state in their earnings report: "The company has implemented and is continually refining changes to its pricing strategy, inventory management processes and participation in vendor-subsidized programs that are expected to demonstrate significant progress in reducing the impact of these costs on profitability as early as the first half of 2000." Perhaps IM's presentation of this issue in their press release is a little misleading. On one hand it seems they want folks to view this as an unusual one time charge, and on the other hand it appears the charges will continue going forward and that they hope to be successful implementing process changes in order to reduce the number "as early as the first half of 2000." Regards - Dale

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