Headquarters: 1600 E. St. Andrew Place, Santa Ana
Employees: 15,000; 970 in OC
Business: Technology distributor
Market value as of April 1: $2.8 billion
Revenue for 12 months ended Dec. 31: $35 billion, up 12%
Net income for 12 months ended Dec. 31: $275.9 million, up 4%
Year in review:
Ingram Micro, the largest distributor of technology products, has been bracing for a slowdown.
Stalling economic growth has companies spending less on computers, software and other tech gear.
Ingram has been working to diversify in search of profits and mitigate the effects of a slowdown.
It pushed further into services last year, offering the tech resellers it serves lines of credit and help finding workers.
It also offers help with marketing, tech support and getting more money out of product warranties.
The company helps resellers set up outsourcing operations of their own, manage inventories and do other tasks that leverage Ingram’s best assets,a huge network of 100 warehouses.
Ingram made a push for its own line of computer-related gear, called V7, which has been sold in Europe for more than a decade. It partners with manufacturers in Asia to make mice, keyboards, flat-panel monitors, ink for printers, notebook computer cases and other office gear as a private label line.
2007 was another record-setting year with sales of $35 billion and profits of $276 million.
The company ramped up its focus on getting customers in China this past year after first entering the Asian market with its 2004 buy of Australian distributor Tech Pacific for nearly $500 million.
“We placed a big bet on this region that has paid off handsomely,” Chief Executive Gregory Spierkel said in a conference call earlier this year.
He predicts the Asia-Pacific region “may be Ingram’s largest in a few years.”
Ingram also tapped South America for sales, where it gets bigger profits.
It opened an office in Buenos Aires, Argentina, with some 35 workers,its second go-round in the city.
Ingram first set up shop there in 1999 but left three years later after the Argentinean peso crashed.
The company saw a hiccup in Germany, when a warehouse management system had some glitches and caused a bit of a lag. Things since have improved.
What’s ahead:
A more cautious outlook for the first quarter.
Ingram is expecting sales of $8.75 billion to $9 billion, below the $9.1 billion Wall Street originally was looking for. The company’s looking for profits of $63 million to $71 million. Analysts had expected $78 million.
The slower sales come from an expectation that companies in the U.S. and Europe would be spending less this year.
Falling prices and the need to maintain profits or find new sources of them again will be a factor for Ingram this year.
Ingram may have to tweak operations to cut costs after a lot of spending on expansion and acquisitions.
“In the months ahead, our primary focus will be on tightly managing expenses, while continuing to cultivate areas that drive growth,” Spierkel said. “Eliminating excess cost in all areas of the company will be top priorities in the coming months.”
Spierkel said such cost-saving moves would be “small steps.”
Wall Street’s Take:
There are big concerns among analysts about the company’s outlook and the potential for slower growth.
“Ingram has not guided this softly since the bursting of the Internet bubble in 2001,” said Robert Anastasi, analyst at Raymond James Associates Inc. in St. Petersburg, Fla. “The magnitude of deterioration is a huge surprise and cannot be ignored for the rest of the tech industry.”
Even so, most analysts urge their clients to buy shares.
Anastasi kept his “strong buy” rating for the stock.
For 2008, they expect sales of $36 billion, up 3% from 2007, and profits of $270 million, down 2%.
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Sarah Tolkoff
WHO’S IN CHARGE
GREGORY SPIERKEL
Chief executive, Ingram Micro
Joined Company:
1997
Education:
bachelor’s from Carleton University, Ottawa; master’s in business from Georgetown University
Career:
Prior to Ingram, spent 11 years at Canada’s Mitel Networks Corp., a maker of phone systems, software and electronics. Got his start in 1979 at Bell Canada, working on one of the first e-mail systems.
Notable:
Played hockey and curling until age 17. Says he wasn’t “NHL material.” He worked for a time in iron ore mines, doing a number of duties including driving giant mining trucks. His uncle is the founder of Cirque du Soleil.
