Ingram Micro 2001 Annual Report Download - page 5

compared to a year ago. At the same time, we achieved good rebates and discounts, as our customers and vendors
recognized the value we provide. And we aggressively managed excess and obsolete inventory. Our achievements in inventory
management, in fact, have been particularly impressive. We reduced inventory by approximately $1.3 billion from the
previous year-end.
We believe there is still room for gross margin expansion over the long term as we continue to demonstrate our value to our
customers and vendors, increase fee-based revenues, and enhance the mix of customers, products and geography.
CONNECTING TO THE FUTURE
One of the positive results of a slow economic environment is that it unleashes creativity, especially in a company like ours
with a history of innovation. Connecting the right solutions and the right products to the right customers is an important
philosophy behind our strategic initiatives.
Through IM-Logistics, we continued to expand opportunities that allow us to leverage our expertise and infrastructure and
provide fee-based fulfillment services for companies like Amazon.com and Intuit. During the launch of Windows XP, the
IM-Logistics Division moved more than 800,000 units, most of it shipped directly from the manufacturer without touching a
warehouse, to approximately 7,500 retail locations. Innovative steps like these do more than help us gain market share, they
affirm our leadership position in the industry.
Ingram Micro also has the resources that enable value-added resellers (VAR) to sell new technologies, adopt new business
models and provide effective go-to-market programs for vendors. We celebrated the grand opening of our Solution Center, a
development testing and training facility for enterprise solutions. We announced plans to offer wireless networking, Internet
infrastructure, storage area network solutions, and bundled services. And, we added a new VAR community, SMB Alliance, to
VentureTech Network and Partnership America, furthering our commitment to investing in the resources necessary to develop
tools, training and business opportunities that will help VARs do business more effectively.
SETTING THE COURSE
In setting our plans for the future, the strategies we developed this year affected every level of our organization. We
strengthened our executive team with the addition of Thomas A. Madden, executive vice president and chief financial officer.
Tom, a veteran of finance and strategy, joined Ingram Micro in July 2001, replacing Michael J. Grainger, who was promoted to
president and chief operating officer earlier in the year.
We further leveraged our existing management team when we united our U.S. and Canada regions to become Ingram Micro
North America. Kevin M. Murai was named president of the new North America region as Asger Falstrup became president,
Ingram Micro Latin America. By sharing best practices across country borders and capturing economies of scale, we have the
inside track toward maximizing our success as a service organization.
Finally, we said goodbye to board members Don H. Davis, Jr. and Philip M. Pfeffer, and welcomed new members Dale R. Laurance and
Michael T. Smith. They are all visionaries whose experience and steadfast commitment to our company help us remain on course.
THE JOURNEY AHEAD
Oliver Wendell Holmes once noted that the great thing in this world is not so much where we are, but in what direction we
are moving. Our work is far from over. We must continue to manage expenses tightly and identify additional areas of our business
where we can streamline costs by improving processes, sharing resources and automating more of our operations.
As always, vision will play a critical role in our success and leadership. And so will the dedication of our incredibly talented
and experienced people. I believe that technology will once again emerge as the most dynamic, exciting and fastest growing
segment of our economy. While no one can be sure of exactly when that will occur, when it does, we are better positioned
than ever to capitalize on the opportunities.
Kent B. Foster
Chairman and Chief Executive Officer
7
GROSS MARGINS
6%
4%
2%
SG&A EXPENSES
Q4 Q1 Q2 Q3 Q4
2000 2001 2001 2001 2001
Q1 Q2 Q3 Q4 FY
2000 2000 2000 2000 2001
INVENTORY DAYS
Q4 Q1 Q2 Q3 Q4
2000 2001 2001 2001 2001
330
320
310
300
290
280
270
‘97 ‘98 ‘99 ‘00 ‘01
2,000
1,500
1,000
500
TOTAL DEBT
$ MILLIONS$ MILLIONS
6
OFF BALANCE SHEET
40
30
20
10