Strategy in TECH...
The Associated Press is reporting that Ingram Micro, Inc., best known as parent company to custom integration distributor AVAD, has been sold to Tianjin Tianhai, a Chinese Shipping company in a deal worth roughly $6 billion. The all-cash deal works out to approximately $38.90 per Ingram Micro share, well over its previous close of $29.42.
Ingram Micro, Inc. reported results for the second quarter and first half of their current fiscal year and it would be easy to be confused by these results. Why? Well, sales were down 3.2%, operating earnings dropped an astonishing 98%, and last year’s net income plunged into a net loss this year. Yet CEO Alain Monié said in accompanying materials, “Our teams are doing a great job…”
Ingram Micro, Inc. released the financial results for their fiscal third quarter (the period ending Sept. 27, 2014) showing generally positive results. Sales for the quarter increased to $11.2 billion, a $1 billion or 11% increase over the $10.2 billion for the same period last year. According to Ingram Micro CEO Alain Monié, the increase was due primarily to “new wins” and “strong market share.”
But while gross profits were up, gross margins, operating income, and net income were all down for the period…and that fact led us to take a closer look.
In a story that has largely flown under the radar in our industry but is being widely discussed at street level, Ingram Micro has announced plans it calls its “global organizational effectiveness program” that, among other things, calls for substantial layoffs in its North American operations. These layoffs will hit a division that is one of our industry’s largest distributors of custom integration products, known to most of us as AVAD.
