Ingram's Management Present At Bank Of America Merrill Lynch Global Technology Conference (Transcript)

Ingram Micro Inc. (IM)

Bank of America Merrill Lynch Global Technology Conference

May 08, 2012 02:00 pm ET

Executives

Bill Humes - COO & CFO

Analysts

Scott Craig - Bank of America Merrill Lynch

Presentation

Scott Craig - Bank of America Merrill Lynch

I am Scott Craig and I am the hardware, storage and distributor analyst here at Bank of America Merrill Lynch. Again, welcome to the 2012 Technology Conference here, and we're excited to have Ingram Micro management with us next.

To my immediate left is Bill Humes, Chief Operating Officer and Financial Officer, a newly created role for him, and then Damon Wright here on the end, Investor Relations. And so with that we're just going to kick right in to some Q&A and I'll kind of kick it off and hopefully get some participation from the audience as well.

So thanks a lot, guys, for attending and taking the time.

Bill Humes

No, absolutely thanks a lot for inviting us. Good to be here.

Scott Craig - Bank of America Merrill Lynch

Bill, you’re not doing a presentation, but maybe from a high level step us through your handful or the company's handful of sort key focus items as we work into calendar 2012?

Bill Humes

Sure absolutely it dovetails right into our overall strategy for the first year. First and foremost and I probably heard along and talked about it over the last couple of earnings releases and earnings discussions is first and foremost is execution.

Executing first on our core strategies and core operations and working through our systems implementation and continue to effectively deploy, work on finishing that as well as optimizing the existing core business. So that's sort of the bread and butter and you have to really drive that and drive the efficiencies there as best as possible.

The other part is continue to expedite and extract the execution on our adjacent markets and adjacent products revenue. So if you think about auto identification, data capture, point of sale business one that's a great business for us, its we started back in 2004 with small acquisition in the US and a series of many acquisitions around the globe, we become, we believe the number two globally on auto-identification, data capture, point-of-sale space. So that’s great.

We continue to drive and optimize that business potentially look forward to both internal as well as external investments to continue to grow that.

Second of all would be obviously invest in the datacenter and expedite some of our business, our capabilities, our expertise in the sense of engineering for pre-consulting services as well as a lot of our authorization.

So having focused area for us in this year we are expediting some of Greenfields or internal investments to drive better capabilities to hire faster in the sense of technical experience. So we are making some internal investments there as well as look externally. So if you look our acquisitions over the last couple of years, we have a focus around the enterprise datacenter space.

Focused on mobility, mobility is very, very important and very key. So trying to drive internal investments in mobility to make it a global project. We already have some very, very nice level of revenue on tablet and other handsets around the globe; so we have very high market reading handsets in India. We have tablet sales pretty much around the globe, not in every country, but in the region. And we are doing very, very well there in that regard.

A little bit different business in the sense of little bit lower margin at this point in time, the gross margin. But the operating margin is very well. It’s very nice. It’s kind of around the company average and the return on capital is nice. So it’s a good business and we have to invest in this area of business basically so we can get the critical mass and then start tying services around there, so we think about refurbishment services.

We got activations; we continue to tie around additional services around the mobility space and tie it overall with the system convergence. So mobility obviously driving convergence between consumer and enterprise and we basically and definitely have to play. So it’s a good business and we’re focusing on expediting the overall execution in that in 2012.

Ingram Micro logistics, our fee for service business, again its an area strategically where we over the last probably 13, 14 months really worked on revamping some of the contracts and driving out more efficiencies in the process and really working on obtaining new businesses and its really operating well. But our view is drive growth and drive authorization concurrently to really drive success. Q1 was a very nice quarter for us and we expect that continue to grow with our nice pipeline of potential new business going forward.

And lastly, with execution on developing our cloud infrastructure and cloud exchange business, so as many of the people know that cloud value proposition is very similar to a hard goods or physical distribution value proposition. In the cloud there is going to be both on-premise technology; there is going to be cloud technology and support that’s going to be people that integrated that existing ERP systems or systems with cloud software and hardware computing power.

So in the end and this is very emerging in these business, but we definitely we appreciate the position where we are in right now with our competitors versus that we need to continue to execute and invest in that to become the basically the one stop shop for cloud and physical goods.

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