This is the Ingram Micro announcement of a restructuring. Note this market related comment: ''We expect record net sales for the first quarter of 1999 despite a market that has changed dramatically throughout the first quarter,''.
Thursday March 11, 1:27 am Eastern Time
Company Press Release
SOURCE: Ingram Micro Inc.
Ingram Micro Redefines Business Model to Address Changes in Marketplace
Company Announces Preliminary First Quarter Results
SANTA ANA, Calif., March 11 /PRNewswire/ -- Ingram Micro Inc. today
announced that it is implementing changes to its business model to
streamline operations and re-organizing resources to better serve its
customers. These changes stem from one of the company's key objectives for 1999, which is to evaluate current business practices and re-align the company to improve efficiency and increase service levels. Given recent conditions in the marketplace, the company has accelerated these efforts.
''We expect record net sales for the first quarter of 1999 despite a
market that has changed dramatically throughout the first quarter,''
said Jerre L. Stead, chairman and chief executive officer of Ingram
Micro Inc. ''Many near-term factors, including Year 2000 fears and
continuing economic issues, are creating cautious buying trends in
Europe, Latin America and Asia. In addition, there is intense margin
pressure, primarily in the United States, which is related directly to
increased price competition and not related to changes in the way
computers are brought to market,'' Stead continued. ''As the leader in
technology distribution, Ingram Micro is adapting to these changes
swiftly to further leverage emerging business trends, including
electronic commerce and logistics services for our vendor partners.''
The company is accelerating a number of actions to increase flexibility
and service and maximize costs and efficiencies. Outside of the United
States, the company has been increasing its cost effectiveness through
attrition and personnel redeployment since late 1998. Initiatives to
maximize cost savings and efficiencies are now being intensified due to
the softness in sales during the first quarter of 1999.
In the United States, the company is instituting many structural
changes, including the closing of its California-based consolidation
center, re-alignment of its sales force and the creation of a
merchandising organization that integrates its purchasing, vendor sales
and product marketing functions. In addition, new programs and process
improvements to increase productivity are being deployed in its
distribution centers. These and other changes are reducing the company's
worldwide work force by approximately 1,400 positions. The company
expects to begin to realize cost-savings from these changes in the
second quarter of 1999.
Based on analysis of quarter-to-date results and current business
conditions, Ingram Micro expects net sales for the 1999 first quarter to
be between $6.5 and $6.7 billion, growing 26 to 30 percent over the same
period last year. The company expects net income for the quarter to
range from $40 to $45 million or $0.27 to $0.30 per share prior to any
one-time costs for reductions in work force.
Forward-Looking Statements
Certain statements in this press release may be forward-looking
statements that involve risks and uncertainties. Words such as
''anticipates,'' ''intends,'' ''plans,'' ''believes,'' ''seeks,''
''estimates'' and variations of such words and similar expressions are
intended to identify such forward-looking statements. These statements
are based on current expectations and projections about the technology
distribution industry and assumptions made by Ingram Micro's management
and are not guarantees of future performance. Therefore, actual events
and results may differ materially from those expressed or forecasted in
the forward-looking statements due to factors such as those identified
in Exhibit 99.1 of Ingram Micro's annual report on Form 10-K for the
fiscal year ended Jan. 3, 1998. Other risks or uncertainties may be
detailed from time to time in Ingram Micro's future Securities and
Exchange Commission filings. Ingram Micro undertakes no obligation to
update any forward-looking statements in press releases.
About Ingram Micro Inc.
Ingram Micro Inc. (NYSE: IM - news), headquartered in Santa Ana, Calif.,
is the world's largest wholesale distributor of technology products and
services, and is a leading provider of assembly and integration services
with 1998 sales of $22.0 billion. The company and its subsidiaries
operate in 31 countries and distribute more than 200,000 products to
more than 140,000 resellers in 130 countries. Ingram Micro can be found
at www.ingrammicro.com.
Ingram Micro is a trademark used under license by Ingram Micro Inc.
SOURCE: Ingram Micro Inc.
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