Ingram Micro 2010 Annual Report Download - page 37

Download and view the complete annual report

Please find page 37 of the 2010 Ingram Micro annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 96

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96

The following table sets forth certain items from our consolidated statement of income as a percentage of net
sales, for each of the fiscal years indicated.
2010 2009 2008
Net sales............................................... 100.00% 100.00% 100.00%
Cost of sales ............................................ 94.53 94.34 94.35
Gross profit ............................................ 5.47 5.66 5.65
Operating expenses:
Selling, general and administrative .......................... 4.07 4.53 4.41
Impairment of goodwill .................................. — 0.01 2.16
Reorganization costs .................................... 0.00 0.12 0.05
Income (loss) from operations ............................... 1.40 1.00 (0.97)
Other expense, net ....................................... 0.13 0.09 0.14
Income (loss) before income taxes ............................ 1.27 0.91 (1.11)
Provision for income taxes ................................. 0.35 0.23 0.04
Net income (loss) ........................................ 0.92% 0.68% (1.15)%
Results of Operations for the Years Ended January 1, 2011, January 2, 2010 and January 3, 2009
Our consolidated net sales were $34,588,984, $29,515,446 and $34,362,152 in 2010, 2009 and 2008,
respectively, representing an increase of 17.2% in 2010 compared to 2009 and a decrease of 14.1% in 2009
compared to 2008. Regionally, net sales from our North American operations were $14,549,103, $12,326,555 and
$14,191,995 in 2010, 2009 and 2008, respectively, representing an increase of 18.0% in 2010 compared to 2009 and
a decrease of 13.1% in 2009 compared to 2008. Net sales from our EMEA operations were $10,871,237, $9,483,328
and $11,534,968 in 2010, 2009 and 2008, respectively, representing an increase of 14.6% in 2010 compared to 2009
and a decrease of 17.8% in 2009 compared to 2008. Net sales from our Asia Pacific operations were $7,570,403,
$6,243,455 and $6,904,640 in 2010, 2009 and 2008, respectively, representing an increase of 21.3% in 2010
compared to 2009 and a decrease of 9.6% in 2009 compared to 2008. Net sales from our Latin American operations
were $1,598,241, $1,462,108 and $1,730,549 in 2010, 2009 and 2008, respectively, representing an increase of
9.3% in 2010 compared to 2009 and a decrease of 15.5% in 2009 compared to 2008. The significant increase in our
consolidated and regional net sales in 2010 compared to 2009 primarily reflected the solid demand for technology
products and services brought about by the improving global economy, as well as our continued global efforts to
expand our line card and enhance our service levels with customers we serve in the IT market. With the global
economy improving, our consolidated net sales in 2010 reached levels comparable to pre-recession periods. The
translation impact of the fluctuations in foreign currencies compared to the U.S. dollar negatively impacted our
EMEA regional net sales by approximately four percentage points in 2010 compared to 2009 and positively
impacted our regional net sales by approximately eight percentage points in Asia Pacific and approximately six
percentage points in Latin America. Foreign currency exchange rates did not have a material impact in comparing
our consolidated net sales in 2010 to 2009, as the general strengthening of currencies in Asia Pacific and Latin
America were offset by an overall weakening of European currencies. Our small but strategic acquisitions of CCD
in the fourth quarter of 2009, Albora in the second quarter of 2010 and interAct in the third quarter of 2010 in
EMEA, and VAD and Vantex in the second quarter of 2009 and Asiasoft in the second quarter of 2010 in Asia
Pacific did not have a material impact in comparing our regional and consolidated net sales in 2010 to 2009. Latin
America’s net sales in 2010 were negatively impacted by approximately one percent as sales in our Brazilian
operation contracted year-over-year in light of operational challenges we have recently faced in that country.
However, we are making structural, management and process changes in Brazil to address these issues going
forward.
The significant decline in our consolidated net sales of 14.1% in 2009 compared to 2008, as well as the
year-over-year declines in each region for the same period, primarily reflected the overall decline in demand for IT
products and services globally resulting from the severe economic downturn. The softness in demand for IT
29