8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

     CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported):
July 21, 2006

INGRAM MICRO INC. (Exact Name of Registrant as Specified in Its Charter)

Delaware
(State of Incorporation
or organization) 1-12203
(Commission File
Number) 62-1644402
(I.R.S. Employer
Identification No.)

1600 E. St. Andrew Place
Santa Ana, CA 92799-5125
(Address, including zip code of Registrant’s principal executive offices)

Registrant’s telephone number, including area code: (714) 566-1000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement.

      On July 21, 2006, we entered into an amendment to our July 29, 2004 receivables facility with General Electric Capital Corporation (“GECC”) (the “second amendment”). The second amendment (1) extends the final maturity date from March 31, 2008 to July 30, 2010, (2) increases the maximum amount of the advances available under the facility from $600 million to $650 million, (3) makes changes to certain negative and other covenants to which we are subject, including removal and waiver of a previous covenant performance requirement, and (4) reduces certain recurring and non-recurring fees payable by us to GECC under the facility.

      The description of the provisions of the second amendment set forth above is qualified in its entirety by reference to the full and complete terms contained in the second amendment, which is filed as Exhibit 10.1 to this Form 8-K and incorporated into this Item 1.01 by reference.

Item 2.02 Results of Operations and Financial Condition.

     On July 25, 2006, we issued a press release announcing our financial results for the period ended July 1, 2006 and our outlook for the third quarter ending September 30, 2006. A copy of the press release, together with the related financial schedules, are attached hereto as Exhibit 99.1, the text of which are incorporated by reference into this Item 2.02 of this Form 8-K. This press release, together with the related financial schedules, are not to be deemed “filed” for purposes of Section 18 of the Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing, or to form a part of our public disclosure in the United States or otherwise.

GAAP to Non-GAAP Reconciliation

     Our disclosure of financial results for the thirteen and twenty-six weeks ended July 2, 2005 and July 1, 2006, respectively, contained herein are prepared in accordance with generally accepted accounting principles (“GAAP”) and for comparative purposes, is accompanied by disclosures and financial measures that are not prepared in conformity with GAAP. These non-GAAP disclosures include certain adjustments not reflected in the GAAP presentations that primarily relate to the following:

• Costs associated with our outsourcing and optimization plan in North America which was announced in April 2005. These program costs, which aggregated approximately $10.5 million and $16.3 million for the thirteen and twenty-six weeks ended July 2, 2005, respectively, included reorganization costs, primarily consisting of severance and lease exit costs as well as costs charged to selling, general and administrative expenses, primarily consisting of consulting, retention and other direct transition expenses.
  
  
• Costs associated with the integration of our acquisition of Tech Pacific with Ingram Micro. These costs, which aggregated approximately $3.5 million and $7.5 million for the thirteen and twenty-six weeks ended July 2, 2005, respectively, included reorganization costs, primarily consisting of severance and lease exit costs for associates and facilities of Ingram Micro made redundant by the acquisition. In addition, these included costs charged to selling, general and administrative expenses, primarily

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consisting of consulting, retention, relocation and other direct integration expenses, as well as incremental depreciation of fixed assets resulting from the reduction in useful lives to coincide with the facility closures associated with the integration.



• Reversal of income tax accruals. A benefit of $2.2 million associated with the favorable resolution of previously accrued income taxes related to the gains realized on the sale of securities was recognized during the second quarter of 2005.

     Non-GAAP operating expenses, non-GAAP operating income, non-GAAP operating margin, non-GAAP net income, and non-GAAP earnings per share are the primary indicators management uses internally to conduct and measure its business and evaluate the performance of its consolidated operations and geographic operating segments. Management believes these measures are useful information to investors because it provides a meaningful comparison to prior periods and may be more indicative of the level of future results.

     These non-GAAP financial measures are used in addition to and in conjunction with results presented in accordance with GAAP. These non-GAAP financial measures reflect an additional way of viewing aspects of our operations that, when viewed with our GAAP results and the accompanying reconciliations to corresponding GAAP financial measures, provide a more complete understanding of factors and trends affecting our business. These non-GAAP measures should be considered as a supplement to, and not as a substitute for, or superior to, the corresponding measures calculated in accordance with GAAP.

     The non-GAAP disclosures and the non-GAAP adjustments, including the basis for excluding such adjustments and the impact on our operations, are outlined below:

     Non-GAAP Operating Expenses and Non-GAAP Operating Income (in Dollars and as a Percentage of Net Sales). GAAP operating expenses and operating income for the thirteen and twenty-six weeks ended July 2, 2005 were impacted by the costs associated with our outsourcing and optimization plan in North America and costs associated with the integration of our Tech Pacific acquisition with Ingram Micro. Management views these actions as discrete programs designed to improve processes, utilize resources more efficiently, effectively integrate an acquired business, and enhance the overall profitability of our company on a sustainable basis. We track the progress on these initiatives and the related costs to ensure they are managed effectively. The economic substance behind our decision to use these non-GAAP operating expense and operating income measures is that the costs incurred on these programs were incremental to operations in the normal course of business, were incurred over a relatively short program period (generally less than 18 months) and are not

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expected to recur now that the programs are completed. Therefore, their inclusion may distort historical trends. Additionally, amounts could vary significantly from period to period based on the timing of specific actions under these programs and management could not reasonably predict the amount of these costs on a quarterly basis. Because the amounts could not be reasonably predicted on a quarterly basis, management has not included these costs in its previously announced earnings outlooks. Management uses these non-GAAP operating expense and operating income measures along with the related GAAP measures to conduct and measure its business against internally developed objectives and evaluate the performance of its consolidated operations and geographic operating segments. Management believes these measures are useful information to investors because they provide meaningful comparisons to prior periods, management’s previous outlooks, and the analysts’ own financial models, which may exclude the costs of these actions. Material limitations associated with the use of these measures as compared to the GAAP measures of operating expenses and operating income is that they do not reflect all period costs included in operating expenses and operating income associated with these actions and as such may not be comparable to other companies with similar actions who present such costs differently. To compensate for these limitations, management believes that it is appropriate to consider operating expenses and operating income determined under GAAP as well as on a non-GAAP basis.

     Non-GAAP Net Income and Non-GAAP Earnings Per Share. GAAP net income and earnings per share for the thirteen and twenty-six weeks ended July 2, 2005 were impacted by all of the items impacting the non-GAAP measures discussed above, as well as a benefit associated with the favorable resolution of previously accrued income taxes related to the gains realized on the sale of such securities. Non-GAAP earnings per share excludes the after-tax impact of all these items on a per share basis and is calculated by dividing non-GAAP net income by weighted average shares outstanding calculated on a fully diluted basis. The economic substance behind our decision to use the non-GAAP net income and earnings per share measures, which exclude the estimated after-tax impact of the outsourcing and optimization plan in North America, the integration of Tech Pacific and the one-time tax benefit associated with the reversal of certain tax accruals, is that the costs and tax impact related to these programs and actions were incremental to operations in the normal course of business, related costs were incurred over a relatively short program period (generally less than 18 months), the related costs are not expected to recur now that the programs are completed. Therefore, their inclusion may distort historical trends. Additionally, amounts could vary significantly from period to period based on the timing of specific actions under these programs. As a result, management could not reasonably predict the amount of these costs on a quarterly basis. Because the amounts could not be reasonably predicted on a quarterly basis, management has not included these items in its previously announced earnings outlooks. Management uses the non-GAAP net income and earnings per share measures along with the related GAAP measures to conduct and measure its business

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against internally developed objectives and evaluate the performance of its consolidated operations. Management believes these non-GAAP measures are useful information to investors because it provides a meaningful comparison to prior periods, management’s previous outlooks, and the analysts’ own financial models, which may exclude the impacts of these items. Material limitations associated with the use of these non-GAAP measures as compared to the GAAP measures of net income and earnings per share is that it does not reflect all costs included in net income and earnings per share associated with these items and as such may not be comparable to other companies with similar items who present related costs differently. To compensate for these limitations, management believes that it is appropriate to consider net income and earnings per share determined under GAAP as well as on a non-GAAP basis.

Item 9.01 Financial Statements and Exhibits.

Exhibit No.	Description
10.1	Amendment No. 2 dated as of July 21, 2006 to Receivables Sale Agreement and Receivables Funding Agreement dated as of July 29, 2004
99.1	Press Release dated July 25, 2006 and related financial schedules.

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SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

INGRAM MICRO INC.
By:	/s/ Larry C. Boyd
Name:	Larry C. Boyd
Title:	Senior Vice President, Secretary and General Counsel

Date: July 25, 2006

EX-10.1

EXHIBIT 10.1

AMENDMENT NO. 2

Dated as of July 21, 2006

to

RECEIVABLES SALE AGREEMENT

and

RECEIVABLES FUNDING AGREEMENT

Dated as of July 29, 2004

     THIS AMENDMENT NO. 2 (this “Amendment”) is entered into as of July 21, 2006 by and among INGRAM FUNDING INC., a Delaware corporation (the “Borrower”), INGRAM MICRO INC., a Delaware corporation (“Ingram Micro”), individually, as originator and as servicer (in such capacity, the “Servicer”), and GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation (the “Lender”) as parties to the Sale Agreement and/or the Funding Agreement, as applicable, each as referred to below. Capitalized terms used in this Amendment which are not otherwise defined herein shall have the meanings given such terms in Annex X to the Funding Agreement and the Sale Agreement.

RECITALS:

     WHEREAS, Ingram Micro, individually and as an originator, and the Borrower are parties to that certain Receivables Sale Agreement, dated as of July 29, 2004, as amended by Amendment No. 1 thereto, dated as of March 22, 2006 (the “Sale Agreement”);

     WHEREAS, the Borrower, the Servicer and the Lender are parties to that certain Receivables Funding Agreement, dated as of July 29, 2004, as amended by Amendment No. 1 thereto, dated as of March 22, 2006 (the “Funding Agreement”);

     WHEREAS, many of the defined terms used in the Sale Agreement and Funding Agreement are set forth in Annex X attached thereto (“Annex X”); and

     WHEREAS, Annex 5.02(a) to the Funding Agreement (“Annex 5.02(a)”) calls for the delivery of certain financial information;

     WHEREAS, the parties hereto desire to amend Annex X, Annex 5.02(a), the Funding Agreement and the Sale Agreement on the terms set forth herein;

     NOW, THEREFORE, in consideration of the premises set forth above, the terms and conditions contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Ingram Micro, the Borrower and the Lender hereby agree as follows.

     Section 1. Amendments. As of the Effective Date (as hereafter defined), and subject to the satisfaction of the conditions precedent set forth in Section 2 hereof, the parties hereto agree as follows:

     1.1 The Sale Agreement is hereby amended by deleting the proviso to the third sentence of Section 2.01(c) .

     1.2 The Funding Agreement is hereby amended as follows:

      (a) Section 2.02(c) is hereby amended by deleting “July 29, 2006” in the third line and replacing it with “the Final Advance Date”, by deleting “$600,000,000” in the fourth line and replacing it with “$650,000,000” and by deleting “and (ii) prior to any such increase being effective, the Borrower shall pay to the Lender a fee in an amount equal to the product of (x) the amount by which the Commitment is being increased and (y) the percentage specified as the Commitment Increase Fee Percentage in the Fee Letter” as well as the “(i)” at the beginning of the phrase immediately preceding such deleted text.

     (b) Section 5.03(g) is amended by adding the following new sentence at the end thereof:

“It is agreed that the Borrower is permitted to participate in the consolidated cash management system maintained by the Parent as contemplated by (and in compliance with the requirements of) clause (c) of Article XV of the Borrower’s Amended and Restated Certificate of Incorporation, and that doing so does not constitute a lending transaction or advance of credit prohibited by this subsection (g).”

     (c) Section 5.03 (h) is amended by adding the following new sentences at the end thereof:

“The Borrower will not permit the sum of (i) the aggregate principal amount of all Subordinated Loans from all Originators and (ii) the aggregate principal amount of all Advances outstanding on any date to exceed an amount equal to the aggregate Outstanding Balance of the Transferred Receivables on such date. It is agreed that the Borrower may incur Subordinated Loans pursuant to the Subordinated Notes to evidence dividends or other distributions of capital payable that have been declared in compliance with Section 5.03(g); provided that the Borrower shall give 15 days’ prior notice to the Lender of its intention to incur Subordinated Loans for such purpose, and such notice shall specify the amount of the dividend or other distribution of capital, and the total amount of Subordinated Loans that would be outstanding

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after giving effect thereto (assuming no other increase or decrease in the principal amount of the Subordinated Loans between the date of such notice and the payment thereof).”

     (d) Section 5.03 is further amended by adding a new subsection (l) at the end thereof reading as follows:

     (l) The Borrower shall not at any time permit its equity capital to be less than $35,000,000.

1.3 Annex X is hereby amended as follows:

     (a) The definition of “Commitment” is amended by deleting “Five Hundred Million ($500,000,000)” and replacing it with “Five Hundred Fifty Million ($550,000,000)”.

     (b) The definition of “Final Advance Date” is amended by deleting “March 31, 2008” and replacing it with “July 30, 2010”.

     (c) The definition of “Unused Commitment Fee” is amended by deleting “0.375%” in clause (ii) and replacing it with “0.25%” .

1.4 Annex 5.02(a) is hereby amended by re-lettering subsection (c) through (e) as subsections (d) through (f) and inserting the following as subsection (c):

“(c) Quarterly Financials of the Borrower. As soon as available, and in any event within sixty (60) days after the end of each fiscal quarter (other than the last quarter of such fiscal year), financial information regarding the Borrower, consisting of its unaudited balance sheet as of the close of such fiscal quarter and the related statements of income and cash flows for that portion of the fiscal year ending as of the close of such fiscal quarter, all prepared in accordance with GAAP, subject to normal year-end audit adjustments and the absence of footnotes. Such financial information shall be accompanied by the certification of the president, chief financial officer or treasurer of the Borrower that (A) such financial information presents fairly in accordance with GAAP the financial position and results of operations of the Borrower, in each case as at the end of such quarter and for the period then ended (subject to (i) the qualifications referred to at the end of the immediately preceding sentence and (ii) any residual effect of the matters referred to in Section 9 of Amendment No. 2 to this Agreement dated as of July 21, 2006), (B) any other information presented is true, correct and complete in all material respects and (C) as of the date of the financials, there was no

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Incipient Termination Event or Termination Event in existence as of such time or, if an Incipient Termination Event or Termination Event shall have occurred and be continuing, describing the nature thereof and all efforts the Borrower has taken or proposes to take with respect thereto.”

     Section 2. Conditions of Effectiveness of this Amendment. This Amendment shall become effective as of the date hereof (the “Effective Date”) when, and only when:

     2.1 The Lender shall have received counterparts of this Amendment and the Amendment to the Fee Letter, dated as of July 21, 2006 (the “Fee Letter Amendment”), duly executed by each of the parties hereto.

     2.2 The Lender shall have received written reaffirmation of the July 29, 2004 true sale/non-consolidation opinion from counsel to Ingram Micro and the Borrower, in form and substance satisfactory to the Lender.

     2.3 The Borrower shall have executed and delivered to the Lender a new Revolving Note, dated as of the Effective Date, or a date no earlier than five days before the Effective Date, in the amount of $650,000,000.

     2.4 Each of the following conditions shall have been satisfied:

     (a) each representation and warranty by the Borrower contained in the Sale Agreement and the Funding Agreement (each as amended hereby) and in each other Related Document shall be true and correct in all material respects as of the date hereof, except to the extent that such representation or warranty expressly relates solely to an earlier date;

     (b) no Incipient Termination Event or Termination Event hereunder or any “Event of Default” under (and as defined in) the Credit Agreement (as in effect on the date hereof) shall have occurred and be continuing or would result after giving effect to any of the transactions contemplated on the date hereof;

     (c) each representation and warranty by Ingram Micro contained in the Sale Agreement (as amended hereby) and in each other Related Document shall be true and correct as of the date hereof, except to the extent that such representation or warranty expressly relates solely to an earlier date; and

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     (d) the Borrower shall pay to the Lender the Extension Fee (as defined in the Fee Letter).

     Section 3. Representations and Warranties. Each of Ingram Micro and the Borrower hereby represents and warrants that this Amendment and each of the Sale Agreement and the Funding Agreement, each as amended hereby, constitute legal, valid and binding obligations of such Person and are enforceable against such Person in accordance with their respective terms subject to (i) applicable bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting the enforcement of creditors’ rights generally, from time to time in effect and (ii) general principles of equity (whether enforcement is sought by a proceeding in equity or at law).

     Section 4. Reference to and Effect on Related Documents.

     4.1 Upon the effectiveness of this Amendment pursuant to Section 2 hereof, on and after the Effective Date, each reference to the Funding Agreement, Sale Agreement, Annex X and Annex 5.02(a) in any of the Related Documents shall mean and be a reference to the Funding Agreement, the Sale Agreement, Annex X and Annex 5.02(a), as amended hereby.

     4.2 Except as specifically set forth above, the Sale Agreement, the Funding Agreement, Annex X and Annex 5.02(a), and all other documents, instruments and agreements executed and/or delivered in connection therewith, shall remain in full force and effect, and are hereby ratified and confirmed.

     4.3 The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of the Borrower or the Lender nor constitute a waiver of any provision of any of the Related Documents, or any other documents, instruments and agreements executed and/or delivered in connection therewith.

     Section 5. Headings. Section headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose.

     Section 6. Counterparts. This Amendment may be executed by one or more of the parties to this Amendment on any number of separate counterparts and all of said counterparts taken together shall be deemed to constitute one and the same instrument.

     Section 7. Entire Agreement. This Amendment, taken together with the Sale Agreement, the Funding Agreement, the Fee Letter and all of the other Related Documents, embodies the entire agreement and

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understanding of the parties hereto and supersedes all prior agreements and understandings, written and oral, relating to the subject matter hereof.

     Section 8. Governing Law. This Amendment shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and performed in such State and any applicable laws of the United States of America.

Section 9. Waiver. The Lender hereby waives any Termination Event (including any Event of Servicer Termination or any Purchase Termination Event) resulting from (a) the books and records, reports and financial statements of the Borrower having reflected the amount of Transferred Receivables as an amount equal to the amount of the Net Receivables Balance and (b) the aggregate principal amount of the Subordinated Loans having exceeded the limitation set forth in the proviso to Section 2.01(c) of the Sale Agreement (as in effect prior to giving effect to this Amendment), it being understood and agreed that such waiver is effective only for and in respect of periods prior to the date hereof and are one-time waivers only. Nothing herein shall obligate the Lenders to grant any future waivers or consents.

     Section 10. No Course of Dealing. The Lender has entered into this Amendment on the express understanding with the Borrower and Ingram Micro that in entering into this Amendment, it is not establishing any course of dealing with the Borrower and Ingram Micro. The rights of the Lender to require strict performance with all the terms and conditions of the Sale Agreement and the Funding Agreement, as amended by this Amendment and the other Related Documents, shall not in any way be impaired by the execution of this Amendment. The Lender shall not be obligated in any manner to execute any further amendments or waivers, and if such waivers or amendments are requested in the future, assuming the terms and conditions thereof are acceptable to them, the Lender may require the payment of fees in connection therewith.

[Remainder of page intentionally left blank.]

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     IN WITNESS WHEREOF, this Amendment has been duly executed as of the day and year first above written.

INGRAM MICRO INC., individually, as an
Originator and as the Servicer
By:	/s/ Kevin M. Murai
	Name:	Kevin M. Murai
	Title:	President and Chief Operating Officer

INGRAM FUNDING INC., as Borrower
By:	/s/ Kevin M. Murai
	Name:	Kevin M. Murai
	Title:	President

GENERAL ELECTRIC CAPITAL
CORPORATION, as Lender
By:	/s/ Eugene Seip
	Name:	Eugene Seip
	Title:	Duly Authorized Signatory

Signature Page

to

Amendment No. 2

EX-99.1

EXHIBIT 99.1

For More Information Contact:
Media:	Investors:
Ingram Micro Inc.	Ingram Micro Inc.
Jim Trainor (714) 382-2378	Ria Marie Carlson (714) 382-4400
jim.trainor@ingrammicro.com	ria.carlson@ingrammicro.com
Chris Kelly (714) 382-3355	Kay Leyba (714) 382-4175
chris.kelly@ingrammicro.com	kay.leyba@ingrammicro.com

INGRAM MICRO REPORTS SECOND QUARTER 2006 RESULTS
Record second-quarter sales
Double-Digit Sales and Operating Income Growth in North America, Asia Pacific and Latin
America

     SANTA ANA, Calif., July 25, 2006 — Ingram Micro Inc. (NYSE: IM), the world’s largest technology distributor, today announced financial results for the second quarter, which ended July 1, 2006.

     Worldwide sales hit the highest second-quarter level in company history, reaching $7.40 billion, an 8-percent increase from $6.84 billion in the prior-year period.

     Second-quarter net income increased 29 percent to $53.8 million, or $0.32 per diluted share, which includes stock-based compensation expense of $7.7 million or approximately $0.03 per diluted share related to the 2006 adoption of Statement of Financial Accounting Standards No. 123 (revised 2004), Share-Based Payment (SFAS 123R), in second quarter of 2006.

     In the prior-year period, net income based on generally accepted accounting principles (GAAP) was $41.7 million or $0.26 per diluted share, which included: (1) major-program and integration costs of $14.0 million (approximately $9.6 million net of tax) related to the company’s outsourcing and optimization plan in North America and the integration of the Tech Pacific acquisition, and (2) a benefit of $2.2 million for the favorable resolution of previously accrued income taxes related to the gains realized on the sale of securities.

     Year-ago net income on a non-GAAP basis -- which excludes the major-program costs, integration costs and the tax benefit noted above -- was $49.1 million or $0.30 per diluted share. A reconciliation of these non-GAAP items to GAAP net income can be found in the tables attached to this press release.

     “We delivered a solid quarter, with double-digit sales and operating income increases in three of our four regions,” said Gregory M. Spierkel, chief executive officer, Ingram Micro Inc. “The market environment in Europe was challenging during the quarter, as reported by many of our peers, but we were able to mitigate single-market obstacles through our diversified global footprint and expansion into adjacencies. We continue to

execute well and invest in the needs of our customers, helping them expand their reach and develop new business opportunities.”

Additional Second-Quarter Highlights

For more detail regarding the results outlined below, please refer to the financial statements and schedules attached to this news release or visit www.ingrammicro.com.

Regional Sales

• North American sales were $3.33 billion (45 percent of total revenues), an increase of 14 percent versus a year ago, of which approximately three percentage points resulted from the AVAD acquisition completed in July 2005.
  
  
• European sales were $2.39 billion (32 percent of total revenues), down slightly versus a year ago. The average foreign currency exchange rates between the U.S. dollar and European currencies were relatively flat with the prior year, having an immaterial impact on sales growth.
  
  
• Asia-Pacific sales were $1.34 billion (18 percent of total revenues), an increase of 12 percent versus a year ago.
  
  
• Latin American sales were $332 million (5 percent of total revenues), an increase of 10 percent versus a year ago.

Gross Margin

Gross margin was 5.30 percent, 4 basis points lower than first-quarter levels and 7 basis points lower than the year-ago quarter primarily due to the competitive environment in Europe.

Operating Expenses

• On a GAAP basis, total operating expenses were $303.7 million, or 4.11 percent of revenues, versus $296.2 million, or 4.33 percent of revenues, in the year-ago quarter. The results for the current quarter included $7.7 million of non-cash stock compensation expenses, as described previously, and approximately $3.3 million in incremental technology enhancements, which were not included in the prior-year results.
  
  
• For comparison purposes, non-GAAP operating expenses in the year-ago period, excluding the $14.0 million in major-program and integration costs, were $282.2 million, or 4.13 percent of revenues.

Operating Income

     Worldwide operating income on a GAAP basis was $88.0 million or 1.19 percent of revenues which includes approximately $7.7 million or 10 basis points related to stock-based compensation expense, compared

3-3-3 Ingram Micro Reports Second Quarter 2006 Results

to $71.3 million or 1.04 percent of revenues in the year-ago quarter. For comparison purposes, worldwide operating income in the year-ago period, excluding major-program and integration costs, was $85.3 million, or 1.25 percent of revenues.

     The stock-based compensation expense associated with the adoption of SFAS 123R is presented as a separate reconciling amount in the company’s segment reporting; therefore, this expense is included in the worldwide operating results but not in the operating results of the regions.

• North American operating income on a GAAP basis was $53.4 million or 1.60 percent of revenues, versus $28.9 million or 0.99 percent of revenues in the year-ago quarter. For comparison purposes, in the year-ago period, North American operating income, excluding major-program costs, was $39.4 million or 1.35 percent of revenues.
  
  
• European operating income was $19.6 million, or 0.82 percent of revenues, versus $28.3 million, or 1.17 percent of revenues, in the year-ago quarter.
  
  
• Asia-Pacific operating income on a GAAP basis was $16.1 million, or 1.20 percent of revenues, versus $10.9 million or 0.91 percent of revenues, in the year-ago quarter. For comparison purposes, in the year-ago period, Asia-Pacific operating income excluding major-program and integration costs was $14.4 million or 1.20 percent of revenues.
  
  
• Latin American operating income was $6.6 million, or 2.00 percent of revenues, versus $3.2 million, or 1.05 percent of revenues, in the year-ago quarter.

Other expenses for the quarter were $13.3 million, which is down five percent from the year-ago period.

Total depreciation and amortization was $15.1 million.

Capital expenditures were $7.7 million.

Balance Sheet Highlights

The cash balance at the end of the quarter was $497 million, an increase of $173 million from the end of 2005. Total debt was $650 million, an increase of $45 million from year-end. Debt-to-capitalization was 20 percent and in line with year end.

Inventory was $2.06 billion compared with $2.21 billion at the end of the year, which is flat at 27 days on hand.

Working capital days were 23, an increase of two days from year-end 2005, reflecting a greater mix of consumer and retail sales, but a one-day improvement from first quarter 2006.

4-4-4 Ingram Micro Reports Second Quarter 2006 Results

     “We were able to deliver on our goals despite an intense competitive environment,” said William D. Humes, executive vice president and chief financial officer, Ingram Micro Inc. “This is the eleventh consecutive quarter of meeting or exceeding our original guidance. The two American regions performed exceptionally well, with North America demonstrating strong operating leverage resulting from the cost savings realized from its outsourcing and optimization program and Latin America more than doubling operating income on 10 percent sales growth. While the European region faced market challenges caused by specific vendor actions during the quarter, it executed well and our research indicates that the region continues to outperform its competition. We’re pleased with our performances throughout the world, but there is still plenty of room for improvement.”

Six-Month Period

     For the six months ended July 1, 2006, worldwide sales were $14.99 billion, an 8-percent increase over the $13.89 billion reported a year ago. Regional sales were $6.53 billion for North America (a 12-percent increase versus the prior-year period); $5.10 billion for Europe (an increase of one percent in U.S. dollars, to which the translation impact of weaker European currencies had an approximate 5 percentage-point negative effect on comparisons to the prior year); $2.68 billion for Asia-Pacific (an increase of 12 percent versus the prior-year period); and $689 million for Latin America (an increase of 19 percent versus the prior-year period).

     Worldwide GAAP operating income for the six-month period was $186.9 million, or 1.25 percent of revenues, versus $147.5 million, or 1.06 percent of revenues, reported a year ago. For comparison purposes, six-month operating income in the year- ago period excluding major-program costs, integration costs and special items was $171.3 million or 1.23 percent of revenues.

     Six-month net income on a GAAP basis was $115.5 million, or $0.68 per diluted share, compared to $84.1 million, or $0.52 per diluted share, a year ago. For comparison purposes, six-month net income in the year-ago period excluding major-program costs, integration costs and special items was $98.4 million or $0.60 per diluted share.

Outlook for the Third Quarter

     The following statements are based on the company’s current expectations and internal forecasts. These statements are forward-looking and actual results may differ materially, as outlined in the company’s periodic filings with the Securities and Exchange Commission.

For third quarter 2006 ending Sept. 30, 2006, Ingram Micro expects:

• Revenue of $7.3 billion to $7.5 billion.

5-5-5 Ingram Micro Reports Second Quarter 2006 Results

• 
  Net income of $49 million to $56 million, or $0.29 to $0.33 per diluted share, which includes approximately $8 million or $0.03 per share for the effect of non-cash stock-based compensation expense in the third quarter 2006, as well as approximately $5 million in incremental costs for IT enhancements, primarily related to the outsourcing of our application development function. For comparison purposes, 2005 did not include these expenses.
  
  
• The weighted average shares outstanding is expected to be approximately 170 million and the effective tax rate for the third quarter and for the remainder of the year is currently estimated to be 28 percent.

     “Demand continues to be solid throughout the world, with competitive pressures affecting pricing in certain markets,” said Spierkel. “Our guidance reflects year-over-year sales growth of 5 to 8 percent. Sequentially, we expect sales to be relatively flat, in line with seasonal norms. In Europe, third quarter is seasonally soft due to the summer holidays and, while the competitive pressures from recent vendor actions will ease over time, we believe that the environment may remain challenging for the near term. In addition, the North American market continues to be highly competitive, especially on larger accounts in the United States. Looking ahead, we see opportunities for growth and profit improvement in every region. I’m enthusiastic about the future.”

Conference Call and Webcast

     Additional information about Ingram Micro’s financial results will be presented in a conference call with presentation slides today at 5 p.m. EDT. To listen to the conference call and view the accompanying presentation slides, visit the company’s Web site at www.ingrammicro.com (Investor Relations section). The conference call is also accessible by telephone at (888) 455-0750 (toll-free within the United States and Canada) or (517) 308-9002 (other countries).

     The replay of the conference call with presentation slides will be available for one week at www.ingrammicro.com (Investor Relations section) or by calling (800) 678-3180 or (402) 220-3063 outside the United States and Canada.

Cautionary Statement for the Purpose of the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995

The matters in this press release that are forward-looking statements, including but not limited to statements about future revenues, sales levels, operating income, margins, stock-based compensation expense, integration costs, cost synergies, operating efficiencies, profitability, market share and rates of return, are based on current management expectations that involve certain risks which, if realized, in whole or in part, could cause such expectations to fail to be achieved and have a material adverse effect on Ingram Micro's business, financial condition and results of operations, including, without limitation: (1) intense competition, regionally and internationally, including competition from alternative business models, such as manufacturer-to-end-user selling, which may lead to reduced prices, lower sales or reduced sales growth, lower gross margins, extended payment terms with customers, increased capital investment and interest costs, bad debt risks and product supply shortages; (2) integration of our acquired businesses and similar transactions involve various risks and difficulties -- our operations may be adversely impacted by an acquisition that (i) is not suited for

6-6-6 Ingram Micro Reports Second Quarter 2006 Results

us, (ii) is improperly executed, or (iii) substantially increases our debt; (3) foreign exchange rate fluctuations, devaluation of a foreign currency, adverse governmental controls or actions, political or economic instability, or disruption of a foreign market, and other related risks of our international operations may adversely impact our operations in that country or globally; (4) we may not achieve the objectives of our process improvement efforts or be able to adequately adjust our cost structure in a timely fashion to remain competitive, which may cause our profitability to suffer; (5) our failure to attract new sources of profitable business from expansion of products or services or risks associated with entry into new markets, including geographies, products and services, could negatively impact our future operating results; (6) an interruption or failure of our information systems or subversion of access or other system controls may result in a significant loss of business, assets, or competitive information; (7) significant changes in supplier terms, such as higher thresholds on sales volume before distributors may qualify for discounts and/or rebates, the overall reduction in the amount of incentives available, reduction or termination of price protection, return levels, or other inventory management programs, or reductions in payment terms, may adversely impact our results of operations or financial condition; (8) termination of a supply or services agreement with a major supplier or product supply shortages may adversely impact our results of operations; (9) changes in, or interpretations of, tax rules and regulations may adversely affect our effective tax rates or we may be required to pay additional tax assessments; (10) we cannot predict with certainty, the outcome of the SEC and U.S. Attorney’s inquiries; (11) if there is a downturn in economic conditions for an extended period of time, it will likely have an adverse impact on our business; (12) we may experience loss of business from one or more significant customers, and an increased risk of credit loss as a result of reseller customers' businesses being negatively impacted by dramatic changes in the information technology products and services industry as well as intense competition among resellers --increased losses, if any, may not be covered by credit insurance or we may not be able to obtain credit insurance at reasonable rates or at all; (13) rapid product improvement and technological change resulting in inventory obsolescence or changes in demand may result in a decline in value of a portion of our inventory; (14) future terrorist or military actions could result in disruption to our operations or loss of assets, in certain markets or globally; (15) the loss of a key executive officer or other key employees, or changes affecting the work force such as government regulations, collective bargaining agreements or the limited availability of qualified personnel, could disrupt operations or increase our cost structure; (16) changes in our credit rating or other market factors may increase our interest expense or other costs of capital, or capital may not be available to us on acceptable terms to fund our working capital needs; (17) our failure to adequately adapt to industry changes and to manage potential growth and/or contractions could negatively impact our future operating results; (18) future periodic assessments required by current or new accounting standards such as those relating to long-lived assets, goodwill and other intangible assets and expensing of stock options may result in additional non-cash charges; (19) seasonal variations in the demand for products and services, as well as the introduction of new products, may cause variations in our quarterly results; and (20) the failure of certain shipping companies to deliver product to us, or from us to our customers, may adversely impact our results of operations.

Ingram Micro has instituted in the past and continues to institute changes to its strategies, operations and processes to address these risk factors and to mitigate their impact on Ingram Micro's results of operations and financial condition. However, no assurances can be given that Ingram Micro will be successful in these efforts. For a further discussion of significant factors to consider in connection with forward-looking statements concerning Ingram Micro, reference is made to Item 1A Risk Factors of Ingram Micro's Annual Report on Form 10-K for the year ended December 31, 2005; other risks or uncertainties may be detailed from time to time in Ingram Micro's future SEC filings. Ingram Micro disclaims any duty to update any forward-looking statements.

About Ingram Micro Inc.

     As a vital link in the technology value chain, Ingram Micro creates sales and profitability opportunities for vendors and resellers through unique marketing programs, outsourced logistics services, technical support, financial services, and product aggregation and distribution. The company serves 140 countries and is the only global IT distributor with operations in Asia. Visit www.ingrammicro.com.

# # #

©2006 Ingram Micro Inc. All rights reserved. Ingram Micro and the registered Ingram Micro logo are trademarks used under license by Ingram Micro Inc.

Ingram Micro Inc.
Consolidated Balance Sheet
(Dollars in 000s)
(Unaudited)

	July 1, 2006		December 31, 2005
ASSETS
Current assets:
Cash and cash equivalents	$	496,629	$	324,481
Trade accounts receivable, net		2,969,137		3,186,115
Inventories		2,062,824		2,208,660
Other current assets		394,511		352,042
Total current assets		5,923,101		6,071,298
Property and equipment, net		173,886		179,435
Goodwill		642,627		638,416
Other		146,743		145,841
Total assets	$	6,886,357	$	7,034,990
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	3,126,484	$	3,476,845
Accrued expenses		412,243		479,422
Current maturities of long-term debt		161,413		149,217
Total current liabilities		3,700,140		4,105,484
Long-term debt, less current maturities		488,238		455,650
Other liabilities		41,744		35,258
Total liabilities		4,230,122		4,596,392
Stockholders' equity		2,656,235		2,438,598
Total liabilities and stockholders' equity	$	6,886,357	$	7,034,990

Page 1

Ingram Micro Inc.
Consolidated Statement of Income
(Dollars in 000s, except per share data)
(Unaudited)

	Thirteen Weeks Ended
	July 1, 2006			July 2, 2005
Net sales	$	7,395,566		$	6,840,486
Costs of sales		7,003,907			6,472,944
Gross profit		391,659			367,542
Operating expenses:
Selling, general and administrative (1)		303,685			289,954
Reorganization costs		(25	)		6,286
		303,660			296,240
Income from operations		87,999			71,302
Interest and other		13,305			14,060
Income before income taxes		74,694			57,242
Provision for income taxes		20,914			15,544
Net income	$	53,780		$	41,698
Diluted earnings per share:
Net income	$	0.32		$	0.26
Diluted weighted average
shares outstanding		169,603,121			162,583,150

(1)
	Stock-based compensation expense recognized in accordance with Statement of Financial Accounting Standards No. 123 (revised 2004), "Share-Based Payment," which was adopted effective January 1, 2006, was $7,690 for the thirteen weeks ended July 1, 2006.

Page 2

Ingram Micro Inc.
Consolidated Statement of Income
(Dollars in 000s, except per share data)
(Unaudited)

	Twenty-six Weeks Ended
	July 1, 2006			July 2, 2005
Net sales	$	14,994,411		$	13,892,478
Costs of sales		14,197,208			13,145,463
Gross profit		797,203			747,015
Operating expenses:
Selling, general and administrative (1)		610,836			590,509
Reorganization costs		(549	)		8,978
		610,287			599,487
Income from operations		186,916			147,528
Interest and other		26,498			28,763
Income before income taxes		160,418			118,765
Provision for income taxes		44,917			34,616
Net income	$	115,501		$	84,149
Diluted earnings per share:
Net income	$	0.68		$	0.52
Diluted weighted average
shares outstanding		169,432,501			163,157,683

(1)
	Stock-based compensation expense recognized in accordance with Statement of Financial Accounting Standards No. 123 (revised 2004), "Share-Based Payment," which was adopted effective January 1, 2006, was $15,643 for the twenty-six weeks ended July 1, 2006.

Page 3

Ingram Micro Inc.
Supplementary Information
Reconciliation of GAAP to Non-GAAP Financial Measures
(Dollars in 000s, except per share data)
(Unaudited)

	Thirteen Weeks Ended July 2, 2005
	As Reported Under GAAP			Special Items				Non-GAAP Financial Measure
Operating expenses	$	296,240	(d)	$	(13,975	)	(a)	$	282,265	(d)
Income from operations		71,302			13,975		(a)		85,277
Net income		41,698			7,442		(b)		49,140
Diluted earnings per share	$	0.26		$	0.04		(c)	$	0.30

(a)	Includes: (1) costs associated with the Company's outsourcing and optimization plan in North America, comprised of reorganization costs of $4,869, primarily related to employee termination benefits for workforce reductions, and $5,646 charged to selling, general and administrative expenses, primarily comprised of consulting and retention expenses; and (2) costs associated with the integration of Tech Pacific in Asia-Pacific, comprised of reorganization costs of $1,438, primarily related to employee termination benefits for workforce reductions and lease exit costs for facility consolidations, and $2,043 charged to selling, general and administrative expenses, primarily comprised of consulting and other costs associated with the integration, as well as incremental depreciation of fixed assets resulting from the reduction in useful lives to coincide with the facility closures associated with the integration; (3) partially offset by a credit adjustment of $21 in Europe for lower than expected costs to settle a lease obligation related to a previous action.
(b)	Includes adjustments noted in footnote (a) above, net of estimated income taxes, and an income tax benefit of $2,201 for the reversal of previously accrued state income taxes related to gains on the sale of securities in 1999 and 2000.
(c)	Includes adjustments noted in footnote (b) above on a per share basis, calculated by dividing the adjusted amounts by the diluted weighted average shares outstanding of 162,583,150.
(d)	As a percentage of net sales, GAAP operating expenses for the thirteen weeks ended July 2, 2005 represent 4.33% and non-GAAP operating expenses represent 4.13%. For comparative purposes, operating expenses for the thirteen weeks ended July 1, 2006 represent 4.11% of net sales.

Page 4

Ingram Micro Inc.
Supplementary Information
Reconciliation of GAAP to Non-GAAP Financial Measures
(Dollars in 000s, except per share data)
(Unaudited)

	Twenty-six Weeks Ended July 2, 2005
	As Reported Under GAAP			Special Items				Non-GAAP Financial Measure
Operating expenses	$	599,487	(d)	$	(23,806	)	(a)	$	575,681	(d)
Income from operations		147,528			23,806		(a)		171,334
Net income		84,149			14,225		(b)		98,374
Diluted earnings per share	$	0.52		$	0.08		(c)	$	0.60

(a)	Includes: (1) costs associated with the Company's outsourcing and optimization plan in North America, comprised of reorganization costs of $5,610, primarily related to employee termination benefits for workforce reductions and an adjustment related to a previous action for a higher than expected lease obligation, and $10,674 charged to selling, general and administrative expenses, primarily comprised of consulting and retention expenses; and (2) costs associated with the integration of Tech Pacific in Asia-Pacific, comprised of reorganization costs of $3,389, primarily related to employee termination benefits for workforce reductions and lease exit costs for facility consolidations, and $4,154 charged to selling, general and administrative expenses, primarily comprised of consulting, retention and other costs associated with the integration, as well as incremental depreciation of fixed assets resulting from the reduction in useful lives to coincide with the facility closures associated with the integration; (3) partially offset by a credit adjustment of $21 in Europe for lower than expected costs to settle a lease obligation related to a previous action.
(b)	Includes adjustments noted in footnote (a) above, net of estimated income taxes, and an income tax benefit of $2,201 for the reversal of previously accrued state income taxes related to gains on the sale of securities in 1999 and 2000.
(c)	Includes adjustments noted in footnote (b) above on a per share basis calculated by dividing the adjusted amounts by the diluted weighted average shares outstanding of 163,157,683.
(d)	As a percentage of net sales, GAAP operating expenses for the thirteen weeks ended July 2, 2005 represent 4.32% and non-GAAP operating expenses represent 4.14%. For comparative purposes, operating expenses for the twenty-six weeks ended July 1, 2006 represent 4.07% of net sales.

Page 5

Ingram Micro Inc.
Supplementary Information
Income from Operations
(Dollars in 000s)
(Unaudited)

	Thirteen Weeks Ended July 1, 2006
	Net Sales		Operating Income			Operating Margin
North America	$	3,327,164	$	53,392		1.60	%
Europe		2,394,191		19,558		0.82	%
Asia-Pacific		1,342,367		16,114		1.20	%
Latin America		331,844		6,625		2.00	%
Reconciling amount (stock-based compensation
under SFAS 123R)		-		(7,690	)	-
Consolidated Total	$	7,395,566	$	87,999		1.19	%

Page 6

Ingram Micro Inc.
Supplementary Information
Income from Operations
(Dollars in 000s)
(Unaudited)

	Thirteen Weeks Ended July 2, 2005
	Net Sales		GAAP Operating Income			Special Items (a)			Non-GAAP Operating Income
North America	$	2,917,924	$	28,898		$	10,515		$	39,413
Europe		2,421,502		28,299			(21	)		28,278
Asia-Pacific		1,199,483		10,929			3,481			14,410
Latin America		301,577		3,176			-			3,176
Consolidated Total	$	6,840,486	$	71,302		$	13,975		$	85,277
			GAAP Operating Margin			Special Items			Non-GAAP Operating Margin (b)
North America				0.99	%		0.36	%		1.35	%
Europe				1.17	%		(0.00	%)		1.17	%
Asia-Pacific				0.91	%		0.29	%		1.20	%
Latin America				1.05	%		-			1.05	%
Consolidated Total				1.04	%		0.21	%		1.25	%

(a)

Special items in 2005 include: (1) costs associated with the Company's outsourcing and optimization plan in North America, comprised of reorganization costs of $4,869, primarily related to employee termination benefits for workforce reductions, and $5,646 charged to selling, general and administrative expenses, primarily comprised of consulting and retention expenses; and (2) costs associated with the integration of Tech Pacific in Asia-Pacific, comprised of reorganization costs of $1,438, primarily related to employee termination benefits for workforce reductions and lease exit costs for facility consolidations, and $2,043 charged to selling, general and administrative expenses, primarily comprised of consulting and other costs associated with the integration, as well as incremental depreciation of fixed assets resulting from the reduction in useful lives to coincide with the facility closures associated with the integration; (3) partially offset by a credit adjustment of $21 in Europe for lower than expected costs to settle a lease obligation related to a previous action.

(b)

Non-GAAP operating margin is calculated by dividing non-GAAP operating income by net sales.

Page 7

Ingram Micro Inc.
Supplementary Information
Income from Operations
(Dollars in 000s)
(Unaudited)

	Twenty-six Weeks Ended July 1, 2006
	Net Sales		Operating Income			Operating Margin
North America	$	6,533,759	$	105,252		1.61	%
Europe		5,096,818		54,079		1.06	%
Asia-Pacific		2,675,199		29,646		1.11	%
Latin America		688,635		13,582		1.97	%
Reconciling amount (stock-based compensation
under SFAS 123R)		-		(15,643	)	-
Consolidated Total	$	14,994,411	$	186,916		1.25	%

Page 8

Ingram Micro Inc.
Supplementary Information
Income from Operations
(Dollars in 000s)
(Unaudited)

	Twenty-six Weeks Ended July 2, 2005
	Net Sales		GAAP Operating Income			Special Items (a)			Non-GAAP Operating Income
North America	$	5,857,210	$	58,799		$	16,284		$	75,083
Europe		5,069,689		65,301			(21	)		65,280
Asia-Pacific		2,385,141		17,003			7,543			24,546
Latin America		580,438		6,425			-			6,425
Consolidated Total	$	13,892,478	$	147,528		$	23,806		$	171,334
			GAAP Operating Margin			Special Items			Non-GAAP Operating Margin (b)
North America				1.00	%		0.28	%		1.28	%
Europe				1.29	%		(0.00	%)		1.29	%
Asia-Pacific				0.71	%		0.32	%		1.03	%
Latin America				1.11	%		-			1.11	%
Consolidated Total				1.06	%		0.17	%		1.23	%

(a)

Special items in 2005 include: (1) costs associated with the Company's outsourcing and optimization plan in North America, comprised of reorganization costs of $5,610, primarily related to employee termination benefits for workforce reductions and an adjustment related to a previous action for a higher than expected lease obligation, and $10,674 charged to selling, general and administrative expenses, primarily comprised of consulting and retention expenses; and (2) costs associated with the integration of Tech Pacific in Asia-Pacific, comprised of reorganization costs of $3,389, primarily related to employee termination benefits for workforce reductions and lease exit costs for facility consolidations, and $4,154 charged to selling, general and administrative expenses, primarily comprised of consulting, retention and other costs associated with the integration, as well as incremental depreciation of fixed assets resulting from the reduction in useful lives to coincide with the facility closures associated with the integration; (3) partially offset by a credit adjustment of $21 in Europe for lower than expected costs to settle a lease obligation related to a previous action.

(b)

Non-GAAP operating margin is calculated by dividing non-GAAP operating income by net sales.

Page 9