Ingram Micro APAC sales down 24 percent

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Ingram Micro APAC sales down 24 percent

Worldwide sales for the quarter were US$6.75 billion, a 21-percent decrease from US$8.58 billion in the prior-year period.

Asia-Pacific sales were US$1.38 billion (20 percent of total revenues), a decrease of 24 percent versus the US$1.81 billion reported in the year-ago quarter.

The translation impact of the relatively weaker regional currencies had an approximate 12-percentage-point negative effect on comparisons to the prior year. 

"Given we are a publicly listed company, unfortunately, I am not able to comment on our results," said Jay Miley, vice president and managing director, A/NZ, Ingram Micro.

However, he did say that in local currencies, APAC's results were down 12 percent on the top line. 

"The US$ was very weak in Q1 last year, and this explains approximately 1/2 of the US$ revenue decline," he said.

Gregory Spierkel, chief executive officer, Ingram Micro said with the recession now affecting all regions, he did not expect a pick-up in sales for several more months, perhaps for the remainder of the year.

He also said he didn't feel the market getting worse at this stage and expected second-quarter sales to follow a historical seasonal pattern.

"While the soft macroeconomic environment continues to dampen sales, we are making excellent progress toward improving long-term profitability and re-shaping our business to help us emerge from the downturn stronger and more agile," said Spierkel.

"During the quarter, we deployed optimisation plans in every region, which will generate significant business improvements in the coming months.

"At the same time, we continue to invest in our future, improving our business mix and developing better systems that improve customer service, marketing and e-commerce. For example, we recently announced agreements to acquire two distributors in the Asia-Pacific region that strengthen our capabilities in the enterprise and data-capture markets.

"The economy is not preventing us from making small, yet strategically significant acquisitions in markets where it makes sense. We're carefully balancing the needs of today with actions to create a more prosperous future."

Net income for the first quarter was US$27.5 million, or US$0.17 per diluted share, which includes costs of approximately US$0.06 per diluted share related to expense-reduction programs in each region.

Net income was US$64.1 million, or US$0.37 per diluted share, in the prior-year period.

"We expect year-over-year sales comparisons to be negatively affected by the translation impact of relatively weaker foreign currencies as well as the timing of the Easter holidays, which occurred in the first quarter in 2008 and in the second quarter this year," said Spierkel.

"We should see additional benefits of our expense-reduction programs. The results of last year's program are now fully realised, generating annualised benefits of more than US$20 million.

"We're beginning to gain traction with the program that we announced during the first quarter of this year, which generated some savings during the first quarter and is expected to have a greater impact in the second quarter and thereafter, reaching its annualised run-rate of US$100 million to US$120 million by the end of the year.

"Total costs of this program are expected to range from US$45 million to US$65 million, with the majority of the remaining costs incurred by the end of the third quarter.

"I'm confident that the actions we're taking today will make us stronger and more profitable when demand returns," Spierkel added.

Additional First Quarter Highlights

Regional Sales:

North American sales were US$2.77 billion (41 percent of total revenues), a decrease of 16 percent versus the US$3.29 billion posted a year ago.

EMEA sales were US$2.27 billion (34 percent of total revenues), a decrease of 26 percent versus the US$3.07 billion in the year-ago quarter. The translation impact of the relatively weaker European currencies had an approximate 14-percentage-point negative effect on comparisons to the prior year.

Asia-Pacific sales were US$1.38 billion (20 percent of total revenues), a decrease of 24 percent versus the US$1.81 billion reported in the year-ago quarter. The translation impact of the relatively weaker regional currencies had an approximate 12-percentage-point negative effect on comparisons to the prior year.

Latin American sales were US$321 million (5 percent of total revenues), a decrease of 21 percent compared to the US$407 million posted a year ago. The translation impact of the relatively weaker regional currencies had an approximate 18-percentage-point negative effect on comparisons to the prior year.

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