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Ingram Micro: Tax Bill for Brazilian Software Imports

Ingram Micro Inc. warned it would have to take a charge to its earnings for the past few years if legislation was enacted last month in Brazil.

It was.

So here’s what it means for the Santa Ana-based technology products distributor: Ingram Micro is set to adjust first-quarter earnings to reflect a $33.3 million charge. Net income now could be $30 million to $37 million, down from an earlier projection of $63 million to $70 million.

Revenue won’t be affected.

Brazil wants to recover taxes on software imports from 2002 to 2005. After Jan. 1, 2006, taxes are not assessable.

That’s where the $33 million comes in.

Ingram Micro is appealing the taxes. Just in case, it’ll be setting aside that much plus another $42 million or so to cover potential penalties.

According to Ingram Micro, the best information it had was that its software coming into Brazil wasn’t taxable under the law at the time.

Political changes in Brazil since have muddied up the matter.


Last Jazz

Jazz Semiconductor Inc. posted its last financials as a free-standing company.

The Newport Beach chip plant operator was bought for $260 million last month by Acquicor Technology Inc. of Newport Beach, now called Jazz Technologies Inc.

For 2006, Jazz saw sales of $212.5 million generating an operating loss of $15.4 million and a net loss of $15.2 million.

The operating loss includes a chunk of fees,about $7.1 million,related to the acquisition, including: management fees to Carlyle Group and Conexant Systems Inc. of Newport Beach, which had big stakes in Jazz; expenses related to abandoning Jazz’s on-again, off-again initial public offering; the termination of a legacy stock appreciation rights plan; and other deal costs.

The company saw $23 million in depreciation and $16.3 million from termination of pacts that resulted in lost revenue to the tune of $17.5 million.

But Jazz finally got the public trading status it was long after.

Acquicor, which was founded as a blank check company by former Apple Inc. executives, including cofounder Steve Wozniak, swapped its Nasdaq moniker for “JAZ” and has a market value of about $174 million.


Tech Honorees

The Technology Council of Southern California presented its annual Technology Industry awards for 2007. Not surprisingly, it reads like a who’s who of Orange County.

George Klaus, of Irvine-based Epicor Software Corp., was named chief executive of the year. The head of the 1,800-employee business software maker has been in place since 1996 and received the same award in 2004.

Klaus’ contract with Epicor was extended last week through January 2009.

Kerry Shih of Costa Mesa’s SyncVoice Communications Inc. was named entrepreneur of the year. The company sells software to manage telecommunications networks at businesses.

Last year, SyncVoice raised $4 million in its first financing round, which has fueled its $1 million in revenue. The company has about 250 customers.

Irvine-based WebVisible was named top emerging software company for its Geneva interactive advertising software. The company has been around since 2001 providing software and technology for online advertising.

Also nominated in the category was Irvine-based Portellus Inc.

Irvine-based Broadcom Corp., whose chips are used in portable devices including phones and digital music players, was named mobile company of the year.

Networks in Motion Inc., which recently moved from Irvine to Aliso Viejo, was a nominee in the category.

Other local nominees:

n QLogic Corp. of Aliso Viejo for hardware and storage company of the year.

n Orange-based 8e6 Technologies for network and security company of the year.

n And Syspro Impact Software Inc. of Costa Mesa and Telelogic North America Inc. of Irvine, as software company of the year.

Torrance-based Technology Council of Southern California recently changed its name from the Software Council of Southern California.


More Newport Media

Newport Media Inc., the Lake Forest chip startup intent on putting broadcast TV on wireless phones and other portable devices, got another big vote of confidence last week.

I wrote last week that Newport Media faces a bit of a tough sell,interest even among the most tech-savvy consumers is slight at this early stage. But founder Mohy Abdelgany has landed $66 million in funding in less than two years.

Abdelgany also recently got a big endorsement from former boss Dwight Decker, chief executive of Conexant Systems.

Decker, who helped start the $30 million Okapi Venture Capital LLC fund in Laguna Niguel last year and founder of the Orange County Technology Action Network, was named to Newport Media’s board of directors.

“Newport Media has established itself as a driving force in mobile TV silicon, and the company’s very talented team has already achieved some impressive engineering firsts in this rapidly emerging marketplace,” Decker said.

Decker’s involvement brings an investment of know-how.

“Dwight’s market knowledge and expertise will be a great asset as we continue to advance our mobile TV technology and bring products with increased functionality and capabilities to our growing roster of customers,” said Abdelgany, who first worked with Decker in 1995 at Rockwell International, which spun off Conexant in 1999.

Abdelgany left in 2002 to work at Woburn, Mass.-based Skyworks Solutions Inc.’s Irvine operations before starting Newport Media in 2004.

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