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» Ingram Micro Inc. Q4 2009 Earnings Call Transcript
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» Ingram Micro, Inc. F2Q09 (Qtr End 07/04/09) Earnings Call Transcript
Before we get started, I have a Safe Harbor announcement. During today’s discussion, we will make statements that are forward-looking. These forward-looking statements and all other statements made on the call that are not historical facts are subject to a number of risks and uncertainties. Please prefer to today’s news release and documents filed with the Securities and Exchange Commission. Specifically, the risk factors listed in item 1-A of our Form 10-K for the fiscal year ended January 2, 2010 for more information on the risks that could cause actual results to differ materially.In addition, this conference call is the property of Ingram Micro and may not be recorded or rebroadcast without specific written permission from the company. The presentation slides and a replay of this call will be available for one week on the company’s website at ingrammicro.com or by calling 800-678-3180. I'll now turn the call over to Greg Spierkel, our Chief Executive Officer. Greg? Greg ory Spierkel Thank you, Ria and good afternoon everyone. Building on our strong start in 2010, the second quarter was outstanding by virtually all accounts. Sales grew 24%, the best growth rate for any quarter in 11 years. Profit growth was even better, with both operating and net income more than doubling. In fact, net income and earnings per share hit the highest second quarter levels in our history. All regions contributed to the quarter's performance. Sales in North America and EMEA grew at double-digit pace with operating income tripling and doubling respectively while the other regions also generated strong sales growth and solid profits. Driving much of the quarter's operating leverage is our sound management of expenses which declined versus a year ago, despite the robust sales growth. We continue to reap the benefits of our cost reduction initiatives of the last two years while holding the line on day-to-day expenses. Our solid balance sheet also provides avenues for growth as we use working capital to drive demand and meet the needs of our customers.
Return on invested capital at 12% exceeded our weighted average cost of capital for the fourth consecutive quarter. Growth and profitability were also driven by greater flexibility in other targeted areas such as gross margin. We believe this was a worthwhile tradeoff given the record-breaking performance. While we plan to improve gross margins overtime, profitable growth, higher levels of income and optimal ROIC will continue to be the priorities in the near term.Before we turn to the financials, I'd like to take a moment to recognize Alain as he moves to his next opportunity. This will be his last earnings call here at Ingram Micro but the positive impact of his leadership will be felt for many years to come. He played a critical role in transforming our Asia-Pacific region from a breakeven operation to one of our company's most profitable. As worldwide President, he instituted operational improvements that set us on a path of even greater achievement. Alain, the company is better off today than when you joined seven years ago and much of that is due to you. Thank you for your foresight, your leadership and counsel. We will miss you. We wish you success in your new role. Alain Monie Thank you, Greg. My seven years at Ingram Micro have been some of the most rewarding and productive of my career. If I may have contributed to the company's performance I can tell you that I had learned a lot about how to manage in such a highly transactional business, and beyond the quality of its processes, without a doubt the people make the difference. I am impressed with the dedication, mutual support and strong values of the associates around the world. These are unique qualities that set Ingram Micro apart as the leader in this industry. Deciding to leave was one of the more difficult decisions I've had to make but I was presented with a CEO opportunity that I simply could not pass up.
I leave knowing the company is in good hands, with a first class management team. Ingram Micro will continue to lead this industry globally for many years to come. To those of you on the call, it has been an honor and a pleasure getting to know you over the years. Thank you for your support and continued interest in the company.Read the rest of this transcript for free on seekingalpha.com