[October 23, 2014] |
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Avnet, Inc. Reports First Quarter Fiscal Year 2015 Results
PHOENIX --(Business Wire)--
Avnet, Inc. (NYSE:AVT) today announced results for the first quarter
fiscal year 2015 ended September 27, 2014.
Q1 Fiscal 2015 Results
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FIRST QUARTERS ENDED
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September 27, 2014
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September 28, 2013
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Change
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$ in millions, except per share data
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Sales
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$6,839.6
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$6,345.5
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7.8
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%
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GAAP Operating Income
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193.2
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179.0
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7.9
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%
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Adjusted Operating Income (1)
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223.7
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199.5
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12.2
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%
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GAAP Net Income
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127.9
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120.6
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6.1
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%
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Adjusted Net Income (1)
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144.2
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126.0
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14.4
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%
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GAAP Diluted EPS
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$0.91
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$0.86
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5.8
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%
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Adjusted Diluted EPS (1)
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$1.02
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$0.90
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13.3
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%
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(1) A reconciliation of non-GAAP financial measures to GAAP
financial measures is presented in the Non-GAAP Financial
Information section in this press release.
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Sales for the quarter ended September 27, 2014 increased 7.8% year
over year to $6.8 billion; organic sales (as defined later in the
document) grew 5.8% year over year and 5.6% in constant currency
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Adjusted operating income of $223.7 million increased 12.2% year over
year and adjusted operating income margin of 3.3% increased 13 basis
points year over year
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Adjusted net income of $144.2 million increased 14.4% and adjusted
diluted earnings per share of $1.02 increased 13.3% year over year
Rick Hamada, Chief Executive Officer, commented, "Our team carried the
momentum of fiscal 2014 into our new fiscal year as they leveraged
continued revenue growth into another year-over-year increase in EPS. At
an enterprise level, year-over-year organic revenue grew 5.6% in
constant dollars led by a sixth consecutive quarter of year-over-year
organic growth at Electronics Marketing (EM), along with a return to
positive growth at Technology Solutions (TS). This top-line growth,
combined with an increase in gross profit margin at EM and continued
expense efficiencies across the enterprise, resulted in operating income
growing 1.6 times faster than revenue and operating income margin
increasing 13 basis points year over year to 3.3%. Even given an
environment of heightened sensitivity to current market conditions, we
remain focused on profitable growth opportunities and will continue to
align our investments toward maintaining our momentum. With our strong
team and financial position, we have the resources to respond as needed
while continuing to return cash to shareholders via both our dividend
and disciplined share repurchase program."
Avnet Electronics Marketing Results
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Year-over-Year Growth Rates
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Q1 FY15 Sales
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Reported Sales
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Organic Sales
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(in millions)
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EM Total
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$
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4,374.1
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11.1
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%
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7.8
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%
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Excluding FX (1)
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11.1
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%
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7.8
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%
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Americas
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$
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1,214.0
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1.2
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%
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1.2
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%
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EMEA
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$
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1,302.5
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18.6
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%
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7.0
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%
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Excluding FX (1)
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18.0
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%
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6.4
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%
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Asia
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$
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1,857.6
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13.2
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%
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13.2
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%
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Q1 FY15
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Q1 FY14
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Change
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Operating Income
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$
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202.7
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$
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175.8
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15.3
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%
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Operating Income Margin
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4.6
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%
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4.5
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%
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17 bps
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(1) Year-over-year sales growth rate excluding the impact of
changes in foreign currency exchange rates.
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Reported sales increased 11.1% year over year to $4.4 billion while
organic sales were up 7.8% in constant currency
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Operating income margin increased 17 basis points year over year to
4.6% due to improvements across all three regions
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Working capital (defined as receivables plus inventory less accounts
payables) increased 2.4% sequentially and was up 8.4% year over year
primarily due to the increase in sales and the acquisition of MSC
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Return on working capital (ROWC) increased 86 basis points year over
year and decreased 150 basis points sequentially
Mr. Hamada added, "EM delivered another quarter of top-line growth that
was at the high end of expectations and normal seasonality while
expanding margins and returns year over year. In the September quarter,
revenue increased 2.3% sequentially in constant currency, primarily due
to a 10.8% increase in Asia partially offset by seasonal declines in the
western regions. On a year-over-year basis, EM's organic revenue grew
7.8% led by the Asia region, which increased over 13.2%. Operating
income grew 15.3% year over year with all three regions delivering
double digit growth and operating income margin increased 17 basis
points to 4.6%. Although September is typically a seasonally weak
quarter for EM, our team delivered another quarter of improved financial
performance across all regions. In Asia, where select high volume supply
chain engagements are driving much of the current top-line growth, the
team continues to increase returns and grow economic profit dollars. In
EMEA, our team delivered a sixth consecutive quarter of year-over-year
organic growth, and with the integration of MSC now essentially
complete, our team is back to posting year-over-year increases in both
margins and returns. In our Americas region, the team returned to modest
year-over-year revenue growth, which drove an increase in both margins
and returns. While our book to bill ratio was slightly above parity at
the end of the quarter, we are diligently monitoring our dashboards and
we remain committed to driving further improvement in our financial
performance as we continue to focus on our goals for the full fiscal
year."
Avnet Technology Solutions Results
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Year-over-Year Growth Rates
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Q1 FY15 Sales
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Reported Sales
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Organic Sales
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(in millions)
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TS Total
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$
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2,465.5
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2.4
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%
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2.4
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%
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Excluding FX (1)
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2.0
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%
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2.0
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%
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Americas
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$
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1,433.1
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11.2
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%
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11.2
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%
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EMEA
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$
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672.9
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(3.1
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)%
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(3.1
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)%
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Excluding FX(1)
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(5.8
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)%
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(5.8
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)%
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Asia
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$
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359.5
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(15.2
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)%
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(15.2
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)%
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Q1 FY15
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Q1 FY14
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Change
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Operating Income
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$
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62.4
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$
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62.6
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(0.3
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)%
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Operating Income Margin
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2.5
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%
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2.6
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%
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(7) bps
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(1) Year-over-year sales growth rate excluding the impact of
changes in foreign currency exchange rates.
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Reported sales increased 2.4% year over year to $2.5 billion and
organic sales increased 2.0% in constant currency primarily due to
strength in the Americas region
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Operating income margin decreased 7 basis points year over year
primarily due to a decline in the Americas and Asia regions partially
offset by an improvement in the EMEA region
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ROWC decreased 282 basis points year over year primarily due to lower
operating income in the Asia region
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At a product level, year-over-year growth in software, services, and
networking and security, was partially offset by a decline in
computing components
Mr. Hamada further added, "During our September quarter, TS delivered
top-line growth of 2.4% year over year driven by strength in our
Americas region, which experienced double digit organic growth for the
first time in three years. In our EMEA region, which declined 5.8% in
constant currency, mid-single digit growth in our core enterprise
distribution business was offset by a decline in our computing
components business. TS Asia was below our expectations this quarter as
revenue declined 14.6% sequentially with this weakness reflected broadly
across the region. In our TS EMEA region, our team has been driving
efficiencies as operating income margin improved both sequentially and
year over year. Going forward, we will continue to utilize our
disciplined portfolio management to ensure we are focusing our resources
on high growth opportunities in the enterprise IT ecosystem."
Cash Flow/Dividend
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Cash used for operations was $40.7 million in the September quarter
and for the trailing twelve months, cash generated from operations was
$323.0 million
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Cash and cash equivalents at the end of the quarter was $814.4
million; net debt (total debt less cash and cash equivalents) was
approximately $1.3 billion
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The Company repurchased 423,419 shares during the quarter at an
aggregate cost of $17.8 million. Entering the second quarter, the
Company had approximately $198 million remaining under the current
authorization
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The Company paid a quarterly dividend of $0.16 per share or $22.1
million
Kevin Moriarty, Chief Financial Officer, stated, "We used roughly $41
million in cash flow to fund operations for the quarter as the working
capital grew to support our organic sales growth. Despite the use of
cash during the quarter, the trailing twelve months cash flow generated
from operations improved by 36% to $323 million, and we exited the
quarter with roughly $814 million of cash on our balance sheet. Our
disciplined approach to our capital allocation priorities has positioned
us well for the recent equity market environment and, during the
quarter, we returned approximately $40 million to shareholders. In the
September quarter, we raised our quarterly dividend by 7% to an
annualized $0.64 a year, or $22 million per quarter, while also
repurchasing approximately $18 million of shares through our share
repurchase program. We began our fiscal second quarter with
approximately $198 million remaining under our currently authorized
share repurchase program, and through the first three weeks of our
second fiscal quarter have repurchased approximately $55 million of
shares. As of the end of September, we have over $2.0 billion of
liquidity to support continued organic growth initiatives, invest in
value creating M&A and shareholder returns."
Outlook for Second Quarter of Fiscal 2015
Ending on December 27, 2014
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EM sales are expected to be in the range of $4.15 billion to $4.45
billion and TS sales are expected to be in the range of $2.85 billion
to $3.15 billion
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Avnet sales are forecasted to be in the range of $7.0 billion and $7.6
billion
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Adjusted diluted earnings per share is forecasted to be in the range
of $1.15 to $1.25 per share
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The guidance assumes 139.0 million average diluted shares outstanding
and a tax rate of 27% to 31%
The above guidance excludes the amortization of intangibles and any
potential restructuring, integration and other expenses. In addition,
the above guidance assumes that the average U.S. Dollar to Euro currency
exchange rate for the second quarter of fiscal 2015 is $1.27 to €1.00.
This compares with an average exchange rate of $1.36 to €1.00 in the
second quarter of fiscal 2014 and $1.33 to €1.00 in the first quarter of
fiscal 2015.
Forward-Looking Statements
This document contains certain "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. These
statements are based on management's current expectations and are
subject to uncertainty and changes in facts and circumstances. The
forward-looking statements herein include statements addressing future
financial and operating results of Avnet and may include words such as
"will," "anticipate," "estimate," "forecast," "expect," "feel,"
"believe," and "should," and other words and terms of similar meaning in
connection with any discussions of future operating or financial
performance, business prospects or market conditions. Actual results may
differ materially from the expectations contained in the forward-looking
statements.
The following factors, among others, could cause actual results to
differ materially from those described in the forward-looking
statements: the Company's ability to retain and grow market share and to
generate additional cash flow, risks associated with any acquisition
activities and the successful integration of acquired companies,
declines in sales, changes in business conditions and the economy in
general, changes in market demand and pricing pressures, any material
changes in the allocation of product or product rebates by suppliers,
and other competitive and/or regulatory factors affecting the businesses
of Avnet generally.
More detailed information about these and other factors is set forth in
Avnet's filings with the Securities and Exchange Commission, including
the Company's reports on Form 10-K, Form 10-Q and Form 8-K. Except as
required by law, Avnet is under no obligation to update any
forward-looking statements, whether as a result of new information,
future events or otherwise.
Non-GAAP Financial Information
In addition to disclosing financial results that are determined in
accordance with generally accepted accounting principles in the United
States ("GAAP"), the Company also discloses in this document certain
non-GAAP financial information including adjusted operating income,
adjusted net income and adjusted diluted earnings per share, as well as
sales adjusted for the impact of acquisitions and other items (as
defined in the Organic Sales section of this document). Management
believes organic sales is a useful measure for evaluating current period
performance as compared with prior periods and for understanding
underlying trends.
Management believes that operating income adjusted for (i)
restructuring, integration and other expenses and (ii) amortization of
acquired intangible assets and other, is a useful measure to help
investors better assess and understand the Company's operating
performance, especially when comparing results with previous periods or
forecasting performance for future periods, primarily because management
views the excluded items to be outside of Avnet's normal operating
results or non-cash in nature. Management analyzes operating income
without the impact of these items as an indicator of ongoing margin
performance and underlying trends in the business. Management also uses
these non-GAAP measures to establish operational goals and, in some
cases, for measuring performance for compensation purposes.
Management believes net income and diluted EPS adjusted for (i) the
impact of the items described above, (ii) certain items impacting income
tax expense and (iii) the gain on legal settlement, is useful to
investors because it provides a measure of the Company's net
profitability on a more comparable basis to historical periods and
provides a more meaningful basis for forecasting future performance.
Additionally, because of management's focus on generating shareholder
value, of which net profitability is a primary driver, management
believes net income and diluted EPS excluding the impact of these items
provides an important measure of the Company's net results for the
investing public.
Other metrics management monitors in its assessment of business
performance include return on working capital (ROWC), return on capital
employed (ROCE) and working capital velocity (WC velocity).
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ROWC is defined as annualized adjusted operating income (as defined
above) divided by the sum of the monthly average balances of
receivables and inventories less accounts payable.
-
ROCE is defined as annualized, tax effected adjusted operating income
(as defined above) divided by the monthly average balances of
interest-bearing debt and equity (including the impact of adjustments
to operating income discussed above) less cash and cash equivalents.
-
WC velocity is defined as annualized sales divided by the sum of the
monthly average balances of receivables and inventories less accounts
payable.
Any analysis of results and outlook on a non-GAAP basis should be used
as a complement to, and in conjunction with, results presented in
accordance with GAAP.
First Quarter Fiscal 2015
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First Quarter Fiscal 2015
|
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Operating Income
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Income Before Income Taxes
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Net Income
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Diluted EPS*
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$ in thousands, except per share amounts
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GAAP results
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$
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193,197
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$
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168,304
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$
|
127,946
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|
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$
|
0.91
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Restructuring, integration and other expenses
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18,320
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18,320
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13,160
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0.09
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Amortization of intangible assets and other
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12,208
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12,208
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8,973
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|
0.07
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Income tax adjustments
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|
-
|
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|
-
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(5,926
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)
|
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|
(0.04
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)
|
Total adjustments
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|
30,528
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30,528
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16,207
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0.12
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|
Adjusted results
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|
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|
$
|
223,725
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|
|
|
$
|
198,832
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|
|
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$
|
144,153
|
|
|
|
$
|
1.02
|
|
* Does not foot due to rounding
|
Items impacting the first quarter of fiscal 2015 consisted of the
following:
-
Restructuring, integration and other expenses of $18.3 million before
tax consisted of $4.1 million for severance, $6.1 million for facility
exit and asset impairment related costs, $0.6 million for other
restructuring costs, $6.3 million for integration-related costs, $1.6
million for other costs, and net benefit of $0.4 million to adjust
prior restructuring liabilities. Restructuring, integration and other
expenses after tax was $13.2 million;
-
Amortization expense and other consisted of $12.2 million before tax
and $9.0 million after tax related primarily to acquired intangible
assets; and
-
A net income tax benefit of $5.9 million primarily related to certain
items impacting the effective income tax rate in the first quarter of
fiscal 2015.
Fourth Quarter Fiscal 2014
|
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|
Fourth Quarter Fiscal 2014
|
|
|
|
|
Operating Income
|
|
|
Income Before Income Taxes
|
|
|
Net Income
|
|
|
Diluted EPS
|
|
|
|
|
$ in thousands, except per share amounts
|
GAAP results
|
|
|
|
$
|
204,538
|
|
|
|
$
|
175,640
|
|
|
|
$
|
186,264
|
|
|
|
$
|
1.33
|
|
Restructuring, integration and other expenses
|
|
|
|
27,999
|
|
|
|
27,999
|
|
|
|
20,901
|
|
|
|
0.15
|
|
Foreign currency loss
|
|
|
|
-
|
|
|
|
3,315
|
|
|
|
2,022
|
|
|
|
0.01
|
|
Amortization of intangible assets and other
|
|
|
|
12,328
|
|
|
|
12,328
|
|
|
|
9,076
|
|
|
|
0.06
|
|
Income tax adjustments
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(58,187
|
)
|
|
|
(0.41
|
)
|
Total adjustments
|
|
|
|
40,327
|
|
|
|
43,642
|
|
|
|
(26,188
|
)
|
|
|
(0.19
|
)
|
Adjusted results
|
|
|
|
$
|
244,865
|
|
|
|
$
|
219,282
|
|
|
|
$
|
160,076
|
|
|
|
$
|
1.14
|
|
Items impacting the fourth quarter of fiscal 2014 consisted of the
following:
-
Restructuring, integration and other expenses of $28.0 million before
tax consisted of $14.4 million for severance, $5.2 million for
facility exit and asset impairment related costs, $8.1 million for
integration-related costs, $1.9 million for other costs, and a net
benefit of $1.6 million to adjust prior restructuring liabilities.
Restructuring, integration and other expenses after tax was $20.9
million;
-
Loss on foreign currency due to changes in the currency exchange
mechanisms available in Venezuela included within other income
(expense) of $3.3 million before tax and $2.0 million after tax;
-
Amortization expense and other consisted of $12.3 million before tax
and $9.1 million after tax related primarily to acquired intangible
assets; and
-
A net income tax benefit of $58.2 million primarily related to certain
discrete items impacting the effective income tax rate in the fourth
quarter of fiscal 2014.
First Quarter Fiscal 2014
|
|
|
|
|
|
|
|
|
|
First Quarter Fiscal 2014
|
|
|
|
|
Operating Income
|
|
|
Income Before Income Taxes
|
|
|
Net Income
|
|
|
Diluted EPS
|
|
|
|
|
$ in thousands, except per share amounts
|
GAAP results
|
|
|
|
$
|
178,987
|
|
|
|
$
|
171,942
|
|
|
|
$
|
120,624
|
|
|
|
$
|
0.86
|
|
Restructuring, integration and other expenses
|
|
|
|
12,099
|
|
|
|
12,099
|
|
|
|
8,851
|
|
|
|
0.06
|
|
Gain on legal settlement
|
|
|
|
-
|
|
|
|
(19,137
|
)
|
|
|
(11,686
|
)
|
|
|
(0.08
|
)
|
Amortization of intangible assets and other
|
|
|
|
8,394
|
|
|
|
8,394
|
|
|
|
5,702
|
|
|
|
0.04
|
|
Income tax adjustments
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,496
|
|
|
|
0.02
|
|
Total adjustments
|
|
|
|
20,493
|
|
|
|
1,356
|
|
|
|
5,363
|
|
|
|
0.04
|
|
Adjusted results
|
|
|
|
$
|
199,480
|
|
|
|
$
|
173,298
|
|
|
|
$
|
125,987
|
|
|
|
$
|
0.90
|
|
Items impacting the first quarter of fiscal 2014 consisted of the
following:
-
Restructuring, integration and other expenses of $12.1 million before
tax consisted of $4.2 million for severance, $1.2 million for facility
exit related costs, $0.3 million for other charges, $3.0 million for
other costs including acquisition costs, $4.2 million for
integration-related costs, and a net benefit of $0.8 million to adjust
prior restructuring liabilities. Restructuring, integration and other
expenses after tax was $8.9 million;
-
A gain on legal settlement of $19.1 million before tax and $11.7
million after tax related to an award payment received during the
first quarter of fiscal 2014;
-
Amortization expense and other related to acquired intangible assets
of $8.4 million before tax and $5.7 million after tax; and
-
A net income tax expense of $2.5 million primarily related to certain
items impacting the effective income tax rate in the first quarter of
fiscal 2014.
Organic Sales
Organic sales is defined as reported sales adjusted for the impact of
acquisitions and divestitures by adjusting Avnet's prior periods to
include the sales of acquired businesses and exclude the sales of
divested businesses as if the acquisitions and divestitures had occurred
at the beginning of the earliest period presented.
The following table presents the reconciliation of reported sales to
organic sales for the first quarter of fiscal 2014. For quarterly
periods after the first quarter of fiscal 2014, reported sales are
equivalent to organic sales.
Q1 Fiscal 2014
|
|
|
|
Sales As Reported Fiscal 2014
|
|
|
Acquisitions/ Divestitures
|
|
|
Organic Sales - Fiscal 2014
|
|
|
|
(in thousands)
|
Avnet, Inc.
|
|
|
|
$
|
6,345,475
|
|
|
|
$
|
119,950
|
|
|
|
$
|
6,465,425
|
EM
|
|
|
|
3,938,124
|
|
|
|
119,950
|
|
|
|
4,058,074
|
TS
|
|
|
|
2,407,351
|
|
|
|
-
|
|
|
|
2,407,351
|
EM
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas
|
|
|
|
$
|
1,199,745
|
|
|
|
$
|
-
|
|
|
|
$
|
1,199,745
|
EMEA
|
|
|
|
1,097,842
|
|
|
|
119,950
|
|
|
|
1,217,792
|
Asia
|
|
|
|
1,640,537
|
|
|
|
-
|
|
|
|
1,640,537
|
TS
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas
|
|
|
|
$
|
1,288,923
|
|
|
|
$
|
-
|
|
|
|
$
|
1,288,923
|
EMEA
|
|
|
|
694,247
|
|
|
|
-
|
|
|
|
694,247
|
Asia
|
|
|
|
424,181
|
|
|
|
-
|
|
|
|
424,181
|
"Acquisition/Divestiture" as presented in the preceding table includes
the acquisition of MSC Investoren GmbH ("MSC"), in October 2013 in the
EM EMEA region, which impacted the year-over-year sales comparisons.
ROWC, ROCE and WC Velocity
The following table (in thousands) presents the calculation for ROWC,
ROCE and WC velocity.
|
|
|
|
|
|
Q1 FY15
|
|
|
Q1 FY14
|
|
|
Q4 FY14
|
Sales
|
|
|
|
|
|
$
|
6,839,587
|
|
|
|
$
|
6,345,475
|
|
|
|
$
|
7,048,708
|
|
Sales, annualized
|
|
|
|
(a)
|
|
$
|
27,358,348
|
|
|
|
$
|
25,381,900
|
|
|
|
$
|
28,194,832
|
|
Adjusted operating income (1)
|
|
|
|
|
|
$
|
223,725
|
|
|
|
$
|
199,480
|
|
|
|
$
|
244,865
|
|
Adjusted annualized operating income
|
|
|
|
(b)
|
|
$
|
894,900
|
|
|
|
$
|
797,920
|
|
|
|
$
|
979,460
|
|
Adjusted effective tax rate (2)
|
|
|
|
|
|
27.5
|
%
|
|
|
27.9
|
%
|
|
|
27.9
|
%
|
Adjusted annualized operating income, after tax
|
|
|
|
(c)
|
|
$
|
648,803
|
|
|
|
$
|
575,460
|
|
|
|
$
|
706,387
|
|
Average monthly working capital
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
|
|
|
$
|
4,993,653
|
|
|
|
$
|
4,680,691
|
|
|
|
$
|
5,020,472
|
|
Inventories
|
|
|
|
|
|
$
|
2,729,194
|
|
|
|
$
|
2,465,802
|
|
|
|
$
|
2,632,177
|
|
Accounts payable
|
|
|
|
|
|
$
|
(3,231,037
|
)
|
|
|
$
|
(3,125,452
|
)
|
|
|
$
|
(3,208,300
|
)
|
Average working capital
|
|
|
|
(d)
|
|
$
|
4,491,810
|
|
|
|
$
|
4,021,041
|
|
|
|
$
|
4,444,349
|
|
Average monthly total capital
|
|
|
|
(e)
|
|
$
|
6,101,274
|
|
|
|
$
|
5,532,305
|
|
|
|
$
|
6,009,390
|
|
ROWC = (b) / (d)
|
|
|
|
|
|
19.9
|
%
|
|
|
19.8
|
%
|
|
|
22.0
|
%
|
WC Velocity = (a) / (d)
|
|
|
|
|
|
6.1
|
|
|
|
6.3
|
|
|
|
6.3
|
|
ROCE = (c) / (e)
|
|
|
|
|
|
10.6
|
%
|
|
|
10.4
|
%
|
|
|
11.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
See reconciliation to GAAP amounts in the preceding tables in this
Non-GAAP Financial Information section.
|
|
(2)
|
|
Adjusted effective tax rate for each quarterly period in a fiscal
year is based upon the currently anticipated annual effective tax
rate, excluding the tax effect of the items described above in the
reconciliation to GAAP amounts in this Non-GAAP Financial
Information section.
|
Teleconference and Upcoming Events
Avnet will host a quarterly teleconference today at 2:00 p.m. Eastern
Time. Financial information including financial statement
reconciliations of GAAP to non-GAAP financial measures will be available
through www.ir.avnet.com.
Please log onto the site 15 minutes prior to the start of the event to
register or download any necessary software. An archive copy of the
teleconference will also be available after the call.
For a listing of Avnet's upcoming events and other information, please
visit Avnet's investor relations website at www.ir.avnet.com.
About Avnet
Avnet, Inc. (NYSE:AVT), a Fortune 500 company, is one of the largest
distributors of electronic components, computer products and embedded
technology serving customers globally. Avnet accelerates its partners'
success by connecting the world's leading technology suppliers with a
broad base of customers by providing cost-effective, value-added
services and solutions. For the fiscal year ended June 28, 2014, Avnet
generated sales of $27.5 billion. For more information, visit www.avnet.com.
(AVT_IR)
AVNET, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
First Quarters Ended
|
|
|
|
|
September 27, 2014
|
|
|
September 28, 2013
|
|
|
|
|
(Thousands, except per share data)
|
Sales
|
|
|
|
$
|
6,839,587
|
|
|
|
$
|
6,345,475
|
|
Cost of sales
|
|
|
|
6,044,124
|
|
|
|
5,610,305
|
|
Gross profit
|
|
|
|
795,463
|
|
|
|
735,170
|
|
Selling, general and administrative expenses
|
|
|
|
583,946
|
|
|
|
544,084
|
|
Restructuring, integration and other expenses
|
|
|
|
18,320
|
|
|
|
12,099
|
|
Operating income
|
|
|
|
193,197
|
|
|
|
178,987
|
|
Other income (expense), net
|
|
|
|
(1,493
|
)
|
|
|
795
|
|
Interest expense
|
|
|
|
(23,400
|
)
|
|
|
(26,977
|
)
|
Gain on legal settlement
|
|
|
|
-
|
|
|
|
19,137
|
|
Income before income taxes
|
|
|
|
168,304
|
|
|
|
171,942
|
|
Income tax expense
|
|
|
|
40,358
|
|
|
|
51,318
|
|
Net income
|
|
|
|
$
|
127,946
|
|
|
|
$
|
120,624
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
$
|
0.93
|
|
|
|
$
|
0.88
|
|
Diluted
|
|
|
|
$
|
0.91
|
|
|
|
$
|
0.86
|
|
Shares used to compute earnings per share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
138,309
|
|
|
|
137,414
|
|
Diluted
|
|
|
|
140,850
|
|
|
|
139,724
|
|
Cash dividends paid per common share
|
|
|
|
$
|
0.16
|
|
|
|
$
|
0.15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AVNET, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
|
|
September 27, 2014
|
|
|
June 28, 2014
|
|
|
|
|
(Thousands)
|
ASSETS
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
$
|
814,371
|
|
|
|
$
|
928,971
|
Receivables, net
|
|
|
|
5,060,519
|
|
|
|
5,220,528
|
Inventories
|
|
|
|
2,705,400
|
|
|
|
2,613,363
|
Prepaid and other current assets
|
|
|
|
181,768
|
|
|
|
191,337
|
Total current assets
|
|
|
|
8,762,058
|
|
|
|
8,954,199
|
Property, plant and equipment, net
|
|
|
|
529,294
|
|
|
|
534,999
|
Goodwill
|
|
|
|
1,321,037
|
|
|
|
1,348,468
|
Intangible assets, net
|
|
|
|
167,264
|
|
|
|
184,308
|
Other assets
|
|
|
|
207,593
|
|
|
|
233,543
|
Total assets
|
|
|
|
$
|
10,987,246
|
|
|
|
$
|
11,255,517
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Short-term debt
|
|
|
|
$
|
463,251
|
|
|
|
$
|
865,088
|
Accounts payable
|
|
|
|
3,301,493
|
|
|
|
3,402,369
|
Accrued expenses and other
|
|
|
|
638,462
|
|
|
|
711,369
|
Total current liabilities
|
|
|
|
4,403,206
|
|
|
|
4,978,826
|
Long-term debt
|
|
|
|
1,625,759
|
|
|
|
1,213,814
|
Other liabilities
|
|
|
|
164,122
|
|
|
|
172,684
|
Total liabilities
|
|
|
|
6,193,087
|
|
|
|
6,365,324
|
Shareholders' equity
|
|
|
|
4,794,159
|
|
|
|
4,890,193
|
Total liabilities and shareholders' equity
|
|
|
|
$
|
10,987,246
|
|
|
|
$
|
11,255,517
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AVNET, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
September 27, 2014
|
|
|
September 28, 2013
|
|
|
|
|
(Thousands)
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
$
|
127,946
|
|
|
|
$
|
120,624
|
|
Non-cash and other reconciling items:
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
|
23,134
|
|
|
|
20,897
|
|
Amortization
|
|
|
|
11,557
|
|
|
|
8,394
|
|
Deferred income taxes
|
|
|
|
10,290
|
|
|
|
9,544
|
|
Stock-based compensation
|
|
|
|
21,698
|
|
|
|
18,730
|
|
Other, net
|
|
|
|
17,715
|
|
|
|
23,842
|
|
Changes in (net of effects from businesses acquired):
|
|
|
|
|
|
|
|
|
|
Receivables
|
|
|
|
41,525
|
|
|
|
89,718
|
|
Inventories
|
|
|
|
(165,851
|
)
|
|
|
(220,165
|
)
|
Accounts payable
|
|
|
|
(28,836
|
)
|
|
|
(128,045
|
)
|
Accrued expenses and other, net
|
|
|
|
(99,833
|
)
|
|
|
(69,730
|
)
|
Net cash flows used for operating activities
|
|
|
|
(40,655
|
)
|
|
|
(126,191
|
)
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
Borrowings (repayments) under accounts receivable securitization
program, net
|
|
|
|
60,000
|
|
|
|
(32,000
|
)
|
(Repayments) borrowings of bank and other debt, net
|
|
|
|
(41,955
|
)
|
|
|
67,773
|
|
Repurchases of common stock
|
|
|
|
(12,264
|
)
|
|
|
-
|
|
Dividends paid on common stock
|
|
|
|
(22,116
|
)
|
|
|
(20,620
|
)
|
Other, net
|
|
|
|
(2,053
|
)
|
|
|
3,871
|
|
Net cash flows (used) provided by financing activities
|
|
|
|
(18,388
|
)
|
|
|
19,024
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
Purchases of property, plant and equipment
|
|
|
|
(36,580
|
)
|
|
|
(27,384
|
)
|
Acquisitions of businesses, net of cash acquired
|
|
|
|
-
|
|
|
|
(20,950
|
)
|
Other, net
|
|
|
|
2,157
|
|
|
|
1,664
|
|
Net cash flows used for investing activities
|
|
|
|
(34,423
|
)
|
|
|
(46,670
|
)
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
|
(21,134
|
)
|
|
|
10,107
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents:
|
|
|
|
|
|
|
|
|
|
- (decrease)
|
|
|
|
(114,600
|
)
|
|
|
(143,730
|
)
|
- at beginning of period
|
|
|
|
928,971
|
|
|
|
1,009,343
|
|
- at end of period
|
|
|
|
$
|
814,371
|
|
|
|
$
|
865,613
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AVNET, INC.
SEGMENT INFORMATION
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
First Quarters Ended
|
|
|
|
|
September 27, 2014
|
|
|
September 28, 2013
|
|
|
|
|
(Millions)
|
Sales:
|
|
|
|
|
|
|
|
|
|
Electronics Marketing
|
|
|
|
$
|
4,374.1
|
|
|
|
$
|
3,938.1
|
|
Technology Solutions
|
|
|
|
2,465.5
|
|
|
|
2,407.4
|
|
Consolidated Sales
|
|
|
|
$
|
6,839.6
|
|
|
|
$
|
6,345.5
|
|
Operating Income:
|
|
|
|
|
|
|
|
|
|
Electronics Marketing
|
|
|
|
$
|
202.7
|
|
|
|
$
|
175.8
|
|
Technology Solutions
|
|
|
|
62.4
|
|
|
|
62.6
|
|
Corporate
|
|
|
|
(41.4
|
)
|
|
|
(38.9
|
)
|
|
|
|
|
223.7
|
|
|
|
199.5
|
|
Restructuring, integration and other expenses
|
|
|
|
(18.3
|
)
|
|
|
(12.1
|
)
|
Amortization of intangible assets and other
|
|
|
|
(12.2
|
)
|
|
|
(8.4
|
)
|
Operating Income
|
|
|
|
$
|
193.2
|
|
|
|
$
|
179.0
|
|
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