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Ingram Micro Holding Corporation(INGM) - 2024 Q3 - Quarterly Report
INGMIngram Micro Holding Corporation(INGM)2024-11-12 21:19
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Financial Performance - Net sales for the thirteen weeks ended September 28, 2024, were 11,762,628,adecreaseof1.411,762,628, a decrease of 1.4% compared to 11,925,373 for the same period in 2023[9] - Gross profit for the thirteen weeks ended September 28, 2024, was 845,492,downfrom845,492, down from 854,844 in the prior year, reflecting a gross margin of approximately 7.2%[9] - Net income for the thirteen weeks ended September 28, 2024, was 76,969,adecreaseof11.376,969, a decrease of 11.3% from 86,783 in the same period last year[11] - Basic and diluted earnings per share for the thirteen weeks ended September 28, 2024, were 0.35,comparedto0.35, compared to 0.39 for the same period in 2023[9] - Operating expenses for the thirteen weeks ended September 28, 2024, were 627,318,slightlyupfrom627,318, slightly up from 623,352 in the prior year[9] - Income from operations for the thirteen weeks ended September 28, 2024, was 218,174,upfrom218,174, up from 212,402 in 2023, representing a 2.0% increase[82] Equity and Liabilities - Total stockholders' equity increased to 3,613,905asofSeptember28,2024,from3,613,905 as of September 28, 2024, from 3,506,289 at December 30, 2023[7] - The company reported total liabilities and stockholders' equity of 18,562,723asofSeptember28,2024,comparedto18,562,723 as of September 28, 2024, compared to 18,420,314 at December 30, 2023[7] - Total debt decreased to 3,838,451millionfrom3,838,451 million from 3,923,608 million, with a significant repayment of 150,000millionontheTermLoanCreditFacility[65]CashFlowandCapitalExpenditures−Cashprovidedbyoperatingactivitiesforthequarterwas150,000 million on the Term Loan Credit Facility[65] Cash Flow and Capital Expenditures - Cash provided by operating activities for the quarter was 23,878,000, a decrease from 59,764,000intheprioryear,indicatingadeclineofapproximately6059,764,000 in the prior year, indicating a decline of approximately 60%[20] - Total capital expenditures for the quarter were 106,643,000, down from 164,986,000inthesameperiodlastyear,showingareductionofabout35164,986,000 in the same period last year, showing a reduction of about 35%[20] - Capital expenditures for the thirteen weeks ended September 28, 2024, totaled 36,972, a decrease of 39.2% from 60,779inthesameperiodof2023[82]ForeignCurrencyandAdjustments−Thecompanyexperiencedaforeigncurrencytranslationadjustmentgainof60,779 in the same period of 2023[82] Foreign Currency and Adjustments - The company experienced a foreign currency translation adjustment gain of 85,371 for the thirteen weeks ended September 28, 2024, compared to a loss of 107,689inthesameperiodlastyear[11]−Thecompanyreportedaforeigncurrencytranslationadjustmentlossof107,689 in the same period last year[11] - The company reported a foreign currency translation adjustment loss of 107,689,000 for the quarter ended September 30, 2023[16] - The company recorded a net foreign currency exchange loss of 9,322forthethirteenweeksendedSeptember28,2024,comparedtoalossof9,322 for the thirteen weeks ended September 28, 2024, compared to a loss of 10,033 for the same period in 2023[51] Tax and Legal Matters - The effective tax rate for the Thirteen Weeks Ended September 28, 2024, was 35.4%, up from 27.9% for the same period in 2023[70] - The Brazilian subsidiary faces tax assessments totaling Brazilian Reais 40,606 (7,460)inprincipalandpenalties,withareasonablypossiblelossofBrazilianReais764,917(7,460) in principal and penalties, with a reasonably possible loss of Brazilian Reais 764,917 (140,530)[75] - The company has recorded a contingent liability related to a fine of €19,500 imposed by the French Competition Authority, with approximately 20,000alreadypaid[75]−Thecompanyisinvolvedinvariousongoinglegalclaimsandinvestigations,whichmaymateriallyaffectitsfinancialconditionandresultsofoperations[73]MarketStrategyandOperations−Thecompanyplanstocontinueexpandingitsmarketpresenceandintegratingnewtechnologiesintoitsplatform[5]−Thecompanyisfocusedonretainingkeypersonnelandadaptingtoindustrychanges,includingsupplyconstraintsintechnologycategories[5]−Thecompanyoperatesinfourgeographicsegments:NorthAmerica,EMEA,Asia−Pacific,andLatinAmerica,withsegmentprofitmeasuredbyincomefromoperations[78]ShareholderReturns−Thecompanydeclareddividendsof20,000 already paid[75] - The company is involved in various ongoing legal claims and investigations, which may materially affect its financial condition and results of operations[73] Market Strategy and Operations - The company plans to continue expanding its market presence and integrating new technologies into its platform[5] - The company is focused on retaining key personnel and adapting to industry changes, including supply constraints in technology categories[5] - The company operates in four geographic segments: North America, EMEA, Asia-Pacific, and Latin America, with segment profit measured by income from operations[78] Shareholder Returns - The company declared dividends of 10,462,000 in the previous year, which decreased to 6,174,000inthecurrentyear,indicatingareductionofabout416,174,000 in the current year, indicating a reduction of about 41%[20] - Cash dividends paid to minority interest stockholders were 6,174 for the thirty-nine weeks ended September 28, 2024, compared to 10,462forthesameperiodin2023[34]EmployeeCompensationandAwards−Thecompanyrecognizedcompensationexpenseforcashawardsamountingto10,462 for the same period in 2023[34] Employee Compensation and Awards - The company recognized compensation expense for cash awards amounting to 6,087 for the thirteen weeks ended September 28, 2024, compared to 6,057forthesameperiodin2023[44]−AsofSeptember28,2024,theunrecognizedcompensationcostsrelatedtocashawardswere6,057 for the same period in 2023[44] - As of September 28, 2024, the unrecognized compensation costs related to cash awards were 39,328, expected to be recognized over a remaining weighted-average period of approximately 1.6 years[44] - Ingram Micro reported a total of 67,598 cash awards non-vested as of December 30, 2023, with 1,895 granted and 851 vested by March 30, 2024, resulting in 67,316 non-vested awards[43] Interest Rate Exposure - Company is exposed to interest rate changes on long-term debt, with a potential annual expense increase of approximately 8,817ordecreaseof8,817 or decrease of 12,600 for a 1% change in interest rates[143] - Each one-eighth percentage point change in interest rates would result in a change of approximately 5,825inannualinterestexpenseundertheTermLoanCreditFacilityandABLCreditFacilities[143]−Companyaimstofinanceitsbusinessatcompetitiveinterestrateswhilemoderatingexposuretointerestcostvolatility[143]−FollowingthecessationofLIBORonJune30,2023,thecompanyamendedagreementstoestablisha5.3175,825 in annual interest expense under the Term Loan Credit Facility and ABL Credit Facilities[143] - Company aims to finance its business at competitive interest rates while moderating exposure to interest cost volatility[143] - Following the cessation of LIBOR on June 30, 2023, the company amended agreements to establish a 5.317% upper limit on SOFR interest rates[143] Miscellaneous - The company revised its cash flow statement for the thirty-nine weeks ended September 30, 2023, to correct previously identified errors[39] - The company completed an IPO on October 25, 2024, issuing 11,600,000 shares at 22.00 per share, resulting in net proceeds of approximately $233,110 after expenses[87]