Ingram Micro Holding Corporation(INGM) - 2025 Q1 - Quarterly Results

First Quarter 2025 Financial Highlights Overview & Management Commentary Ingram Micro reported strong Q1 2025 results with $12.3 billion net sales and $0.61 non-GAAP EPS, reflecting strategic execution Q1 2025 Performance vs. Guidance | Metric | Actual Result | Guidance Range | | :--- | :--- | :--- | | Net Sales (Millions) | $12,281 | $11,425 - $11,825 | | Gross Profit (Millions) | $828.8 | $785 - $835 | | Non-GAAP Diluted EPS ($) | $0.61 | $0.51 - $0.61 | - Management attributes the strong performance to proven execution during market volatility and targeted investments in automation and the AI-powered Xvantage platform[2] - The company repaid an incremental $125 million of its term loan during the quarter[3] - The quarterly dividend was increased by 2.7% to $0.076 per share[3] Consolidated Financial Results Consolidated net sales rose 8.3% to $12.3 billion, with gross margin declining to 6.75% but operating income increasing to $200.9 million Consolidated Financials (Q1 2025 vs. Q1 2024) | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales (Millions) | $12,280.8 | $11,334.9 | +8.3% | | Gross Profit (Millions) | $828.8 | $834.9 | -0.7% | | Gross Margin (%) | 6.75% | 7.37% | -62 bps | | Income from Operations (Millions) | $200.9 | $170.1 | +18.1% | | Net Income (Millions) | $69.2 | $49.6 | +39.5% | | Non-GAAP Net Income (Millions) | $144.2 | $135.2 | +6.6% | | Diluted EPS ($) | $0.29 | $0.22 | +31.8% | | Non-GAAP Diluted EPS ($) | $0.61 | $0.61 | 0.0% | - The year-over-year decrease in gross margin was driven by a sales mix shift towards lower-margin client/endpoint solutions, large enterprise customers, and the lower-margin Asia-Pacific region[5] - Foreign currency translation had a negative impact of approximately 2.4% on the year-over-year net sales comparison[5] - Cash used in operations was $200.4 million, compared to $100.3 million in the prior year, partly due to a strategic investment in inventory ahead of potential cost increases[6] Regional Performance North America North America net sales grew 9.8% to $4.4 billion, with operating income increasing to $84.4 million and margin improving to 1.90% North America Performance (Q1 2025 vs. Q1 2024) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Sales (Billions) | $4.4 | $4.0 | | Income from Operations (Millions) | $84.4 | $59.9 | | Operating Margin (%) | 1.90% | 1.48% | - Sales growth was driven by client and endpoint solutions (PCs, tablets) and advanced solutions (server, infrastructure software, cybersecurity), as well as cloud-based solutions[7] EMEA EMEA net sales increased 0.6% to $3.4 billion, with operating income rising to $57.3 million and margin improving to 1.67% EMEA Performance (Q1 2025 vs. Q1 2024) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Sales (Billions) | $3.4 | $3.4 | | Income from Operations (Millions) | $57.3 | $49.0 | | Operating Margin (%) | 1.67% | 1.44% | - Foreign currency translation had an approximate 2% negative impact on year-over-year net sales[9] Asia-Pacific Asia-Pacific net sales grew 20.1% to $3.6 billion, but operating income declined to $46.3 million due to mix shift and competition Asia-Pacific Performance (Q1 2025 vs. Q1 2024) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Sales (Billions) | $3.6 | $3.0 | | Income from Operations (Millions) | $46.3 | $50.6 | | Operating Margin (%) | 1.28% | 1.68% | - The decrease in operating margin was primarily due to a mix shift towards the lower-margin China market, a higher concentration of mobility sales, and a competitive market in India[12] Latin America Latin America net sales decreased 8.5% to $0.8 billion due to currency, while operating income remained stable at $23.0 million Latin America Performance (Q1 2025 vs. Q1 2024) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Sales (Billions) | $0.8 | $0.9 | | Income from Operations (Millions) | $23.0 | $24.5 | | Operating Margin (%) | 2.86% | 2.78% | - The 8.5% decrease in net sales was primarily driven by an 8.2% negative impact from currency translation rates[13] Business Outlook and Shareholder Returns Fiscal Second Quarter 2025 Outlook Q2 2025 outlook projects net sales between $11.765 billion and $12.165 billion, with non-GAAP diluted EPS between $0.53 and $0.63 Q2 2025 Guidance | Metric | Low | High | | :--- | :--- | :--- | | Net sales (Millions) | $11,765 | $12,165 | | Gross profit (Millions) | $800 | $850 | | Non-GAAP Diluted EPS ($) | $0.53 | $0.63 | - The Q2 2025 guidance assumes an effective non-GAAP tax rate of approximately 29% and 235.2 million diluted shares outstanding[16] Dividend The board approved a 2.7% increase in quarterly cash dividend to $0.076 per share, payable June 3, 2025 - The Board of Directors declared a cash dividend of $0.076 per share, a 2.7% increase from the prior quarterly dividend of $0.074[17] - The dividend is payable on June 3, 2025, to stockholders of record as of May 20, 2025[17] Financial Statements Condensed Consolidated Balance Sheets Total assets were $18.63 billion as of March 29, 2025, with liabilities decreasing to $14.77 billion and equity increasing to $3.86 billion Key Balance Sheet Items | Account | March 29, 2025 (Thousands) | December 28, 2024 (Thousands) | | :--- | :--- | :--- | | Cash and cash equivalents | $881,637 | $918,401 | | Inventory | $5,036,283 | $4,699,483 | | Total current assets | $15,648,116 | $15,801,177 | | Total assets | $18,628,470 | $18,779,690 | | Accounts payable | $9,616,860 | $10,005,824 | | Long-term debt | $3,031,637 | $3,168,280 | | Total liabilities | $14,765,767 | $15,045,815 | | Total stockholders' equity | $3,862,703 | $3,733,875 | Condensed Consolidated Statements of Income Net sales reached $12.28 billion, with gross profit at $828.8 million; operating income rose to $200.9 million, and net income increased 39.5% Income Statement Summary (Thirteen Weeks Ended) | Account | March 29, 2025 (Thousands) | March 30, 2024 (Thousands) | | :--- | :--- | :--- | | Net sales | $12,280,843 | $11,334,934 | | Gross profit | $828,762 | $834,938 | | Income from operations | $200,864 | $170,121 | | Income before income taxes | $100,403 | $76,681 | | Net income | $69,189 | $49,552 | | Diluted earnings per share ($) | $0.29 | $0.22 | Condensed Consolidated Statements of Cash Flows Cash used in operations was $200.4 million, primarily due to working capital changes, while financing activities provided $96.8 million Cash Flow Summary (Thirteen Weeks Ended) | Activity | March 29, 2025 (Thousands) | March 30, 2024 (Thousands) | | :--- | :--- | :--- | | Cash used in operating activities | ($200,430) | ($100,266) | | Cash provided by investing activities | $58,291 | $24,107 | | Cash provided by financing activities | $96,759 | $3,516 | | Decrease in cash and cash equivalents | ($36,764) | ($90,913) | - Key financing activities included a $125 million repayment of Term Loans and paying $17.4 million in dividends[32] Supplemental Information Reconciliation of Non-GAAP Financial Measures This section reconciles GAAP to non-GAAP financial measures, showing adjustments for items like amortization and restructuring costs Reconciliation of Net Income to Non-GAAP Net Income (Q1 2025) | Description | Amount (Thousands) | | :--- | :--- | | Net income (GAAP) | $69,189 | | Amortization of intangibles | $21,430 | | Restructuring costs | $1,933 | | Net foreign currency exchange loss | $23,717 | | Integration, transition and operational improvement costs | $34,083 | | Other adjustments (compensation, etc.) | $19,582 | | Tax impact of adjustments | ($25,754) | | Non-GAAP Net Income | $144,180 | Reconciliation of GAAP EPS to Non-GAAP EPS (Q1 2025) | Description | Per Share Amount ($) | | :--- | :--- | | Diluted EPS (GAAP) | $0.29 | | Amortization of intangibles | $0.09 | | Restructuring costs | $0.01 | | Net foreign currency exchange loss | $0.10 | | Integration, transition and operational improvement costs | $0.15 | | Other adjustments (compensation, etc.) | $0.08 | | Tax impact of adjustments | ($0.11) | | Non-GAAP Diluted EPS | $0.61 | - The company states it is unable to provide a reconciliation for its forward-looking non-GAAP EPS guidance because certain items are difficult to predict and estimate[41]