Ingram Micro Inc. is a longtime Orange County heavyweight that’s seen a slow and steady climb.
Chief Executive Greg Spierkel once joked that Ingram Micro is “the largest organization in the U.S. that no one has ever heard of.”
The Santa Ana company, the world’s top distributor of technology products, electronics and software, has seen growth accelerate in recent years as it has found more business by providing services to its reseller customers.
For the three years ended June 30, Ingram Micro’s revenue has grown at a 37% clip. The company counted about $32.8 billion in sales for the year ended June, up from $24 billion for the same period in 2004.
Ingram Micro got a nod by Fortune magazine on its recent annual ranking of the 500 largest publicly traded U.S. companies.
It was the highest ranking local company on the list at No. 70, up from No. 72 a year earlier.
Ingram Micro pushed further into services last year, offering the tech resellers it serves help in finding workers, marketing and getting more money out of product warranties.
The company has had to get smarter about how it does business.
It instituted a cost cutting program back in 2005 that resulted in hundreds of job cuts and savings,roughly $25 million initially, according to Chris Osentowski, director of business process outsourcing.
After it outsourced jobs in customer service, tech support and accounting to India and the Philippines a few years ago, Ingram Micro found a way to capitalize on its experience setting up operations abroad.
It’s now looking to help customers set up their own outsourcing operations.
Online retailer Buy.com of Aliso Viejo, a rival of kingpin Amazon.com, has signed on, Osentowski said.
Ingram Micro also announced plans this year to provide technology services to a unit of Best Buy Co. that serves businesses and consumers.
Best Buy plans to tap a network of some 700 subcontractors, vetted by Ingram, which it can call on to serve small and midsize business customers.
The subcontractors do contract and licensing renewals, maintenance, service warranties and network security audits, among other IT tasks.
Ingram collects a “finder’s fee,” or a small amount of money, every time a Best Buy business customer calls on an Ingram subcontractor.
The company runs on the slimmest of profits,it nets pennies on the dollar.
In addition to services, it’s been looking to pad profits by distributing consumer technologies and devices that get higher margins.
Ingram Micro’s bread-and-butter business distributing computers, peripheral devices and other desktop-based gear is quickly changing as consumers,not businesses,become the big drivers of growth.
The strategy positions the company “at the forefront of two significant trends: the continuing convergence of commercial and consumer technologies and the growing importance of retailers in the marketplace,” Spierkel told the Business Journal.
In June, the company said it would spend $96 million for Scottsdale-based DBL Distributing Inc., which distributes consumer electronics accessories such as cables and speakers to stores.
DBL sees higher profits on the products it handles,more than double those of Ingram Micro, according to the company.
Ingram Micro also got DBL’s some 300 customers as part of the deal.
Meanwhile, the company took a hit in the second quarter, posting a 2.6% drop in profit to $52.4 million, versus a year earlier. Sales rose 11% in the quarter to about $8.2 billion.
Ingram Micro posted a $15 million charge in the quarter related to a Securities and Exchange Commission investigation into transactions with antivirus software maker McAfee Inc. during 1998 to 2000.
The SEC said Ingram Micro failed to maintain adequate records for some of the transactions.
The company also announced at that time that its president and chief operating officer, Kevin Murai, plans to step down at the end of this year in order to care for his extended family in Toronto.
Shares fell nearly 10% on the news. For the year, the company’s stock is down nearly 5% with a recent market value of $3.4 billion.
Alain Moni & #233;, executive vice president and president of Ingram Micro Asia-Pacific, replaced Murai.
Management of Ingram’s Asia-Pacific region will be split among two regional executives who are set to report to Moni & #233;, the company said.
But the third quarter should be better. The company is forecasting a 20% rise in profit because of strong demand in Asia and other regions. The company expects to earn $67 million to $71 million.
Sales are forecasted at $8.3 billion to $8.5 billion.
Analysts had expected profits of about $64 million on sales of $8 billion for the current quarter.
THE NUMBERS
Three-year growth: 37%
Yearly sales through June 30: $32.8 billion
Yearly profit: $239.6 million
Market value: $3.4 billion
Employees: 13,700, 924 in OC
Company: technology products distributor
