[October 29, 2015] |
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Avnet, Inc. Reports First Quarter Fiscal Year 2016 Results
Avnet, Inc. (NYSE:AVT) today announced results for the first quarter
fiscal year 2016 ended October 3, 2015.
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Q1 Fiscal 2016 Results
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FIRST QUARTERS ENDED
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October 3, 2015
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September 27, 2014
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Change
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$ in millions, except per share data
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Sales (1)
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$
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6,969.7
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$
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6,839.6
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1.9
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%
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Constant Currency (2)
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8.4
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%
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GAAP Operating Income
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207.0
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193.2
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7.1
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%
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Adjusted Operating Income (3)
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240.4
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223.7
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7.5
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%
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GAAP Net Income
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130.3
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127.9
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1.8
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%
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Adjusted Net Income (3)
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152.9
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144.2
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6.1
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%
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GAAP Diluted EPS
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$
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0.96
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$
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0.91
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5.5
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%
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Adjusted Diluted EPS (3)
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$
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1.12
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$
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1.02
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9.8
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%
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(1)
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Excluding the estimated sales for the extra week in the first
quarter of fiscal 2016 of approximately $525 million, year-over-year
organic sales in constant currency would have increased 0.7% and
organic sales would have declined 5.8%.
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(2)
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Year-over-year sales growth rate excluding the impact of changes in
foreign currency exchange rates.
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(3)
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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 October 3, 2015 increased 1.9% year over
year and 8.4% in constant currency to $6.97 billion (Q1 FY16 includes
an extra week of sales)
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Adjusted operating income of $240.4 million increased 7.5% year over
year and adjusted operating income margin of 3.5% increased 18 basis
points year over year
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Adjusted net income of $152.9 million increased 6.1% and adjusted
diluted earnings per share of $1.12 increased 9.8% year over year
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Adjusted diluted earnings per share was negatively impacted by
approximately $0.09, or 8.0%, from the impact of changes in foreign
currency exchange rates from the year ago quarter
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The Company repurchased approximately 3.5 million shares during the
quarter representing an aggregate investment of $145.1 million
Rick Hamada, Chief Executive Officer, commented, "Our team delivered a
strong Q1 performance starting with revenues at the high end of our
expectations for both operating groups led by growth in our EMEA region.
In constant currency, both EM and TS EMEA increased revenue over 15%
year over year and delivered strong leverage as over 80% of the
incremental gross profit dollars dropped through to operating income.
With this growth and our continued discipline in expense management,
both operating groups expanded operating income margin year over year
and adjusted diluted earnings per share increased 10% to $1.12. With
working capital velocity consistent with the year ago quarter, return on
working capital increased 100 basis points to 21% and our trailing
twelve months cash flow from operations was over $590 million. While we
continue to navigate a global marketplace with mixed economic signals
and a stronger dollar, we will continue to focus on expanding margins
and returns while maintaining our disciplined approach to capital
allocation."
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Avnet Electronics Marketing Results
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Year-over-Year
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Q1 FY16
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Growth Rates
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Sales
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Reported Sales (2)
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(in millions)
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EM Total
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$
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4,471.4
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2.2
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%
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Constant Currency (1)
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8.7
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%
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Americas
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$
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1,265.2
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4.2
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%
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EMEA
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$
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1,326.4
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1.8
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%
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Constant Currency (1)
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20.8
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%
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Asia
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$
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1,879.8
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1.2
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%
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Q1 FY16
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Q1 FY15
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Change
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Operating Income
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$
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213.0
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$
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202.7
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5.1
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%
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Operating Income Margin
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4.8
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%
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4.6
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%
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13
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bps
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(1)
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Year-over-year sales growth rate excluding the impact of changes in
foreign currency exchange rates.
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(2)
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Excluding the estimated sales for the extra week in the first
quarter of fiscal 2016 of approximately $300 million, year-over-year
organic sales in constant currency would have increased 1.8% and
organic sales would have declined 4.6%.
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Sales increased 8.7% in constant currency and reported sales increased
2.2% year over year to $4.47 billion
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Operating income increased 5.1% year over year to $213 million and
operating income margin increased 13 basis points primarily due to an
improvement in the EMEA region
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Working capital (defined as receivables plus inventories less accounts
payables) increased 5.2% sequentially in constant currency primarily
due to an increase in inventory in the Asia region to support expected
growth in high volume supply chain engagements in the December quarter
Mr. Hamada added, "In our September quarter, EM grew revenue 8.7% year
over year in constant currency as double digit growth at EM EMEA offset
slower growth in our Asia region related to select high volume supply
chain engagements. As in recent quarters, this strong growth in EMEA was
reduced to 2.2% year-over-year growth at the EM global level due to the
stronger dollar versus the year ago quarter. Our results in EMEA coupled
with our disciplined expense management combined to grow operating
income more than twice as fast as revenue and operating income margin
increased 13 basis points from the year ago quarter. EM's inventory
increased sequentially to support expected growth in high volume supply
chain engagements in our Asia region. Return on working capital is
consistent with the year ago quarter and economic profit increased 7.3%
year over year. We did see bookings moderate late in the quarter as our
book to bill ratio finished at 0.95 to 1.0, although through the first
three weeks of fiscal Q2, our book to bill ratio has improved to parity.
Excluding the estimated impact of the extra week from our fiscal Q1, our
guidance is within our normal seasonal range driven by strong growth in
high volume supply chain engagements in EM Asia and we remain committed
to driving continued improvement in our financial performance."
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Avnet Technology Solutions Results
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Year-over-Year
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Q1 FY16
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Growth Rates
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Sales
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Reported Sales (2)
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(in millions)
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TS Total
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$
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2,498.3
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1.3
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%
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Constant Currency (1)
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7.8
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%
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Americas
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$
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1,508.7
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5.3
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%
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EMEA
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$
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688.8
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2.4
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%
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Constant Currency (1)
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16.1
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%
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Asia
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$
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300.8
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(16.3
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)%
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Q1 FY16
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Q1 FY15
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Change
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Operating Income
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$
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74.5
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$
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62.4
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19.5
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%
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Operating Income Margin
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3.0
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%
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2.5
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%
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45bps
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(1)
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Year-over-year sales growth rate excluding the impact of changes in
foreign currency exchange rates.
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(2)
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Excluding the estimated sales for the extra week in the first
quarter of fiscal 2016 of approximately $225 million, year-over-year
organic sales in constant currency would have declined 1.4% and
organic sales would have declined 7.8%.
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Sales increased 7.8% in constant currency and reported sales increased
1.3% year over year to $2.50 billion
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Operating income increased 19.5% to $74.5 million and operating income
margin increased 45 basis points year over year to 3.0%
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ROWC increased 539 basis points year over year primarily due to higher
operating income in the EMEA region
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At a product level, year-over-year growth in networking and security,
software, and services was offset by a decline in computing components
Mr. Hamada further added, "TS continued to deliver improved financial
performance as operating income margin expanded year over year for a
fourth consecutive quarter and return on working capital increased 539
basis points from the year ago quarter. Key elements of this performance
included revenue growth in our core datacenter solutions business
combined with ongoing expense efficiencies. In our September quarter, TS
revenue grew 1.3% year over year, or 7.8% in constant currency, as
double digit growth at TS EMEA was offset by a significant decline in
our computing components business. TS operating income grew 19.5% year
over year led by our EMEA region where operating income more than
doubled from the year ago quarter. TS Americas grew operating income
double digits year over year while our Asia region declined due to the
decline in our computing components business and the strengthening of
the U.S. Dollar against local currencies. We believe that our computing
components revenue is stabilizing and operating income margin is
consistent with the year ago quarter as a result of our deliberate focus
on higher gross profit margin engagements. Going forward, we will
continue to focus on higher growth segments as we leverage our
investments in solution sales and help our channel partners transition
their customers to 3rd platform technologies."
Cash Flow/Dividend
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Cash used by operations was $33.7 million in the September quarter and
for the trailing twelve months cash generated from operations was
$590.8 million
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Cash and cash equivalents at the end of the quarter was $824.7
million; net debt (total debt less cash and cash equivalents) was
$1.29 billion
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During the past twelve months, the Company repurchased 7.1 million
shares, or 5.1% of outstanding shares, representing an aggregate
investment of $290.7 million, or $40.94 per share
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The Board of Directors expanded the current share repurchase
authorization program by $250 million during the quarter to an
aggregate total of $1.25 billion. Entering the second fiscal quarter,
the Company had $407.4 million remaining under the current repurchase
authorization
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The Company paid a dividend of $0.17 per share or $22.6 million during
the quarter
Kevin Moriarty, Chief Financial Officer, stated, "Our team continues to
do a good job of managing working capital as working capital velocity
remained consistent with the year ago quarter even as we continue to
invest to support growth. With increased operating income and a slow
growth environment, our trailing twelve months cash flow from operations
grew to over $590 million this quarter. Consistent with our capital
allocation priorities, which includes elements of returning cash to
shareholders, we increased our dividend for the second consecutive year
and our Board authorized an additional $250 million for our disciplined
share repurchase program. During the quarter, we invested another $145
million in our share repurchase program and have $407 million remaining
in our current authorization. Our ongoing focus on operating
efficiencies including our Avnet Advantage program, contributed to
additional leverage this quarter as our adjusted operating expense to
gross profit ratio declined 225 basis points from the year ago quarter
to 69.6%. With improving profitability and strong cash generation, we
are well positioned to invest in our growth strategies while maintaining
our discipline in how and when we return capital to shareholders."
Outlook for Second Quarter of Fiscal 2016
Ending on January 2, 2016
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EM sales are expected to be in the range of $4.10 billion to $4.40
billion and TS sales are expected to be in the range of $2.80 billion
to $3.10 billion
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Avnet sales are expected to be in the range of $6.90 billion to $7.50
billion. Excluding the estimated impact of the extra week of sales
from Q1 of fiscal 2016, the midpoint of guidance would be within the
seasonal range at EM and at the high end of the seasonal range at TS
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Adjusted diluted earnings per share is expected to be in the range of
$1.20 to $1.30 per share
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The guidance assumes 135 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 is $1.12 to €1.00. This compares with an average exchange
rate of $1.25 to €1.00 in the second 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 operating expenses, 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). There are also references to the impact of foreign
currency in the discussion of the Company's results of operations. When
the U.S. Dollar strengthens and the stronger exchange rates of the
current year are used to translate the results of operations of Avnet's
subsidiaries denominated in foreign currencies, the resulting impact is
a decrease in U.S. Dollars of reported results. Conversely, when the
U.S. Dollar weakens and the weaker exchange rates of the current year
are used to translate the results of operations of Avnet's subsidiaries
denominated in foreign currencies, the resulting impact is an increase
in U.S. Dollars of reported results. In the discussion of the Company's
results of operations, results excluding this impact are referred to as
"excluding the impact of changes in foreign currency exchange rates" or
"constant currency." Management believes organic sales and sales in
constant currency are useful measures for evaluating current period
performance as compared with prior periods and for understanding
underlying trends. In order to determine the translation impact of
changes in foreign currency exchange rates for sales, income or expense
items, the Company adjusts the exchange rates used in current periods to
be consistent with the exchange rates in effect during prior periods.
Management believes that operating income and operating expenses
adjusted for (i) restructuring, integration and other expenses and (ii)
amortization of acquired intangible assets and other, are useful
measures 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 and operating expenses 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 many cases, for measuring performance for
compensation purposes.
Additional non-GAAP metrics management uses are adjusted operating
income margin, which is defined as adjusted operating income (as defined
above) divided by sales and adjusted operating expense to gross profit
ratio, which is defined as adjusted operating expenses (as defined
above) divided by gross profit.
Management also believes net income and diluted EPS adjusted for (i) the
impact of the items described above, (ii) certain items impacting other
expense and (iii) certain items impacting income tax expense 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 profitability 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.
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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.
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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.
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Fiscal 2016
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Fiscal Year 2016
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Quarter Ended
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October 3,
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2015
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$ in thousands, except
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per share amounts
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GAAP selling, general and administrative expenses
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$
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558,556
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Amortization of intangible assets and other
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7,491
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Adjusted operating expenses
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$
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551,065
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GAAP operating income
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$
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206,962
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Restructuring, integration and other expenses
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25,958
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Amortization of intangible assets and other
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7,491
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Total adjustments
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33,449
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Adjusted operating income
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240,411
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GAAP net income
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$
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130,254
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Restructuring, integration and other expenses (net of tax)
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17,125
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Amortization of intangible assets and other (net of tax)
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5,184
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Income tax adjustments
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379
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Total adjustments to net income (net of tax)
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22,688
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Adjusted net income
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$
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152,942
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GAAP diluted EPS
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$
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0.96
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Restructuring, integration and other expenses (net of tax)
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0.12
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Amortization of intangible assets and other (net of tax)
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0.04
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Income tax adjustments
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-
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Total adjustments to diluted EPS (net of tax)
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0.16
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Adjusted EPS
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$
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1.12
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|
Fiscal 2015
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Fiscal 2015
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Quarters Ended
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June 27,
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March 28,
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December 27,
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September 27,
|
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Fiscal 2015*
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2015
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2015
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2014
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2014
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$ in thousands, except per share amounts
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GAAP selling, general and administrative expenses
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|
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$
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2,274,642
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$
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561,585
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$
|
555,148
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$
|
573,962
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$
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583,946
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Amortization of intangible assets and other
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54,049
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19,603
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11,187
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11,052
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12,208
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Adjusted operating expenses
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$
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2,220,593
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$
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541,982
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$
|
543,961
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|
$
|
562,910
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|
$
|
571,738
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|
|
|
|
|
|
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|
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GAAP operating income
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$
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827,673
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$
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180,477
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$
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203,712
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$
|
250,287
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$
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193,197
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Restructuring, integration and other expenses
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|
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90,805
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43,734
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15,494
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|
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13,257
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|
|
18,320
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Amortization of intangible assets and other
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|
|
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54,049
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19,603
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11,187
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11,052
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12,208
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Total adjustments
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144,854
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|
63,337
|
|
|
26,681
|
|
|
24,309
|
|
|
30,528
|
Adjusted operating income
|
|
|
|
972,527
|
|
|
243,814
|
|
|
230,393
|
|
|
274,596
|
|
|
223,725
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP other (expense) income, net
|
|
|
$
|
(19,043)
|
|
$
|
(3,080)
|
|
$
|
(8,945)
|
|
$
|
(5,524)
|
|
$
|
(1,493)
|
Venezuela foreign currency loss
|
|
|
|
3,737
|
|
|
3,737
|
|
|
-
|
|
|
-
|
|
|
-
|
Adjusted other (expense) income, net
|
|
|
$
|
(15,306)
|
|
$
|
657
|
|
$
|
(8,945)
|
|
$
|
(5,524)
|
|
$
|
(1,493)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total adjustments to income before income taxes
|
|
|
$
|
148,591
|
|
$
|
67,074
|
|
$
|
26,681
|
|
$
|
24,309
|
|
$
|
30,528
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income
|
|
|
$
|
571,913
|
|
$
|
158,733
|
|
$
|
121,529
|
|
$
|
163,706
|
|
$
|
127,946
|
Restructuring, integration and other expenses (net of tax)
|
|
|
|
65,897
|
|
|
30,514
|
|
|
12,035
|
|
|
10,188
|
|
|
13,160
|
Amortization of intangible assets and other (net of tax)
|
|
|
|
36,643
|
|
|
12,287
|
|
|
7,708
|
|
|
7,675
|
|
|
8,973
|
Venezuela foreign currency loss (net of tax)
|
|
|
|
3,737
|
|
|
3,737
|
|
|
-
|
|
|
-
|
|
|
-
|
Income tax adjustments
|
|
|
|
(55,101)
|
|
|
(45,770)
|
|
|
2,192
|
|
|
(5,597)
|
|
|
(5,926)
|
Total adjustments to net income (net of tax)
|
|
|
|
51,176
|
|
|
768
|
|
|
21,935
|
|
|
12,266
|
|
|
16,207
|
Adjusted net income
|
|
|
$
|
623,089
|
|
$
|
159,501
|
|
$
|
143,464
|
|
$
|
175,972
|
|
$
|
144,153
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted EPS
|
|
|
$
|
4.12
|
|
$
|
1.15
|
|
$
|
0.88
|
|
$
|
1.18
|
|
$
|
0.91
|
Restructuring, integration and other expenses (net of tax)
|
|
|
|
0.47
|
|
|
0.22
|
|
|
0.09
|
|
|
0.07
|
|
|
0.09
|
Amortization of intangible assets and other (net of tax)
|
|
|
|
0.26
|
|
|
0.09
|
|
|
0.06
|
|
|
0.06
|
|
|
0.07
|
Venezuela foreign currency loss (net of tax)
|
|
|
|
0.03
|
|
|
0.03
|
|
|
-
|
|
|
-
|
|
|
-
|
Income tax adjustments
|
|
|
|
(0.39)
|
|
|
(0.33)
|
|
|
0.02
|
|
|
(0.04)
|
|
|
(0.04)
|
Total adjustments to diluted EPS (net of tax)
|
|
|
|
0.37
|
|
|
0.01
|
|
|
0.16
|
|
|
0.09
|
|
|
0.12
|
Adjusted EPS*
|
|
|
$
|
4.49
|
|
$
|
1.16
|
|
$
|
1.04
|
|
$
|
1.27
|
|
$
|
1.02
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Does not foot due to rounding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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. Additionally, fiscal
2016 sales are adjusted for the estimated impact of the extra week of
sales in the first quarter of fiscal 2016 due to the 14-week fiscal
first quarter and 53-week fiscal year. Organic sales in constant
currency is defined as organic sales (as defined above) excluding the
impact of changes in foreign currency exchange rates as discussed above.
The following table presents the reconciliation of reported sales to
organic sales for the first quarter of fiscal 2016.
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1 Fiscal 2016
|
|
|
As Reported
|
|
|
Estimated Extra Week in Fiscal
2016 (1)
|
|
|
Organic Sales
|
|
|
|
(in thousands)
|
Avnet, Inc.
|
|
|
$
|
6,969,694
|
|
|
$
|
(525,000)
|
|
|
$
|
6,444,694
|
EM
|
|
|
|
4,471,402
|
|
|
|
(300,000)
|
|
|
|
4,171,402
|
TS
|
|
|
|
2,498,292
|
|
|
|
(225,000)
|
|
|
|
2,273,292
|
EM
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas
|
|
|
|
1,265,208
|
|
|
|
(82,000)
|
|
|
|
1,183,208
|
EMEA
|
|
|
|
1,326,436
|
|
|
|
(92,000)
|
|
|
|
1,234,436
|
Asia
|
|
|
|
1,879,758
|
|
|
|
(126,000)
|
|
|
|
1,753,758
|
TS
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas
|
|
|
|
1,508,735
|
|
|
|
(137,000)
|
|
|
|
1,371,735
|
EMEA
|
|
|
|
688,783
|
|
|
|
(65,000)
|
|
|
|
623,783
|
Asia
|
|
|
|
300,774
|
|
|
|
(23,000)
|
|
|
|
277,774
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) The impact of the additional week of sales in the first
quarter of fiscal 2016 is estimated.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
|
|
|
|
|
Organic
|
|
|
|
|
|
|
|
|
|
|
As Reported
|
|
|
|
|
|
|
|
Sales
|
|
|
|
|
Sales
|
|
Sales
|
|
Year-Year %
|
|
Organic
|
|
Organic
|
|
Year-Year %
|
|
|
|
|
As Reported
|
|
As Reported
|
|
Change in
|
|
Sales
|
|
Sales
|
|
Change in
|
|
|
|
|
Q1-Fiscal
|
|
Year-Year
|
|
Constant
|
|
Q1-Fiscal
|
|
Year-Year
|
|
Constant
|
|
|
|
|
2016
|
|
% Change
|
|
Currency
|
|
2016
|
|
% Change
|
|
Currency
|
|
|
|
|
(Dollars in thousands)
|
|
Avnet, Inc.
|
|
|
$
|
6,969,694
|
|
1.9
|
%
|
|
8.4
|
%
|
|
$
|
6,444,694
|
|
(5.8)
|
%
|
|
0.7
|
%
|
EM
|
|
|
|
4,471,402
|
|
2.2
|
|
|
8.7
|
|
|
|
4,171,402
|
|
(4.6)
|
|
|
1.8
|
|
TS
|
|
|
|
2,498,292
|
|
1.3
|
|
|
7.8
|
|
|
|
2,273,292
|
|
(7.8)
|
|
|
(1.4)
|
|
EM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas
|
|
|
$
|
1,265,208
|
|
4.2
|
%
|
|
-
|
|
|
$
|
1,183,208
|
|
(2.5)
|
%
|
|
-
|
|
EMEA
|
|
|
|
1,326,436
|
|
1.8
|
|
|
20.8
|
%
|
|
|
1,234,436
|
|
(5.2)
|
|
|
13.8
|
%
|
Asia/Pacific
|
|
|
|
1,879,758
|
|
1.2
|
|
|
-
|
|
|
|
1,753,758
|
|
(5.6)
|
|
|
-
|
|
TS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas
|
|
|
$
|
1,508,735
|
|
5.3
|
%
|
|
-
|
|
|
$
|
1,371,735
|
|
(4.3)
|
%
|
|
-
|
|
EMEA
|
|
|
|
688,783
|
|
2.4
|
|
|
16.1
|
%
|
|
|
623,783
|
|
(7.3)
|
|
|
6.4
|
%
|
Asia/Pacific
|
|
|
|
300,774
|
|
(16.3)
|
|
|
-
|
|
|
|
277,774
|
|
(22.7)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ROWC, ROCE and WC Velocity
The following tables (in thousands) presents the calculation for ROWC,
ROCE and WC velocity.
|
|
|
|
Q1 FY16
|
Sales
|
|
|
|
$
|
6,969,694
|
|
Sales, annualized (1)
|
|
(a)
|
|
$
|
26,385,270
|
|
Adjusted operating income (2)
|
|
|
|
$
|
240,411
|
|
Adjusted annualized operating income (1)
|
|
(b)
|
|
$
|
910,127
|
|
Adjusted effective tax rate (3)
|
|
|
|
|
27.5
|
%
|
Adjusted annualized operating income, after tax
|
|
(c)
|
|
$
|
659,842
|
|
Average monthly working capital
|
|
|
|
|
Accounts receivable
|
|
|
|
$
|
4,787,201
|
|
Inventories
|
|
|
|
$
|
2,745,479
|
|
Accounts payable
|
|
|
|
$
|
(3,182,154
|
)
|
Average working capital
|
|
(d)
|
|
$
|
4,350,526
|
|
Average monthly capital employed
|
|
(e)
|
|
$
|
5,909,334
|
|
ROWC = (b) / (d)
|
|
|
|
|
20.9
|
%
|
WC Velocity = (a) / (d)
|
|
|
|
|
6.1
|
|
ROCE = (c) / (e)
|
|
|
|
|
11.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FY15
|
|
Q4 FY15
|
|
Q3 FY15
|
|
Q2 FY15
|
|
Q1 FY15
|
Sales
|
|
|
|
$
|
27,924,657
|
|
|
$
|
6,796,331
|
|
|
$
|
6,736,860
|
|
|
$
|
7,551,880
|
|
|
$
|
6,839,587
|
|
Sales, annualized
|
|
(a)
|
|
$
|
27,924,657
|
|
|
$
|
27,185,324
|
|
|
$
|
26,947,440
|
|
|
$
|
30,207,520
|
|
|
$
|
27,358,348
|
|
Adjusted operating income (2)
|
|
|
|
$
|
972,527
|
|
|
$
|
243,814
|
|
|
$
|
230,393
|
|
|
$
|
274,596
|
|
|
$
|
223,725
|
|
Adjusted annualized operating income
|
|
(b)
|
|
$
|
972,527
|
|
|
$
|
975,256
|
|
|
$
|
921,572
|
|
|
$
|
1,098,384
|
|
|
$
|
894,900
|
|
Adjusted effective tax rate (3)
|
|
|
|
|
27.7
|
%
|
|
|
27.7
|
%
|
|
|
27.7
|
%
|
|
|
27.7
|
%
|
|
|
27.7
|
%
|
Adjusted annualized operating income, after tax
|
|
(c)
|
|
$
|
703,332
|
|
|
$
|
705,305
|
|
|
$
|
666,481
|
|
|
$
|
794,351
|
|
|
$
|
647,192
|
|
Average monthly working capital
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
|
$
|
5,109,326
|
|
|
$
|
4,979,668
|
|
|
$
|
5,251,882
|
|
|
$
|
5,318,083
|
|
|
$
|
4,993,653
|
|
Inventories
|
|
|
|
$
|
2,667,351
|
|
|
$
|
2,593,545
|
|
|
$
|
2,564,071
|
|
|
$
|
2,700,424
|
|
|
$
|
2,729,194
|
|
Accounts payable
|
|
|
|
$
|
(3,274,382
|
)
|
|
$
|
(3,234,283
|
)
|
|
$
|
(3,344,479
|
)
|
|
$
|
(3,437,897
|
)
|
|
$
|
(3,231,037
|
)
|
Average working capital
|
|
(d)
|
|
$
|
4,502,295
|
|
|
$
|
4,338,930
|
|
|
$
|
4,471,474
|
|
|
$
|
4,580,610
|
|
|
$
|
4,491,810
|
|
Average monthly capital employed
|
|
(e)
|
|
$
|
6,077,926
|
|
|
$
|
5,898,475
|
|
|
$
|
6,028,015
|
|
|
$
|
6,161,858
|
|
|
$
|
6,101,274
|
|
ROWC = (b) / (d)
|
|
|
|
|
21.6
|
%
|
|
|
22.5
|
%
|
|
|
20.6
|
%
|
|
|
24.0
|
%
|
|
|
19.9
|
%
|
WC Velocity = (a) / (d)
|
|
|
|
|
6.2
|
|
|
|
6.3
|
|
|
|
6.0
|
|
|
|
6.6
|
|
|
|
6.1
|
|
ROCE = (c) / (e)
|
|
|
|
|
11.6
|
%
|
|
|
12.0
|
%
|
|
|
11.1
|
%
|
|
|
12.9
|
%
|
|
|
10.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Annualized amounts are based on a 53-week fiscal year.
|
(2)
|
|
See reconciliation to GAAP amounts in the preceding tables in this
Non-GAAP Financial Information section.
|
(3)
|
|
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 income tax adjustments
quantified 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
From components to cloud and design to disposal, Avnet, Inc. (NYSE: AVT)
accelerates the success of customers who build, sell and use technology
globally by providing them with a comprehensive portfolio of innovative
products, services and solutions. Avnet is a Fortune 500 company with
revenues of $27.9 billion in fiscal year 2015. For more information,
visit www.avnet.com.
(AVT_IR)
|
|
|
|
|
|
|
|
|
AVNET, INC.
|
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
|
|
First Quarters Ended
|
|
|
|
October 3,
|
|
|
September 27,
|
|
|
|
2015
|
|
|
2014
|
|
|
|
(Thousands, except per share data)
|
Sales
|
|
|
$
|
6,969,694
|
|
|
$
|
6,839,587
|
Cost of sales
|
|
|
|
6,178,218
|
|
|
|
6,044,124
|
Gross profit
|
|
|
|
791,476
|
|
|
|
795,463
|
Selling, general and administrative expenses
|
|
|
|
558,556
|
|
|
|
583,946
|
Restructuring, integration and other expenses
|
|
|
|
25,958
|
|
|
|
18,320
|
Operating income
|
|
|
|
206,962
|
|
|
|
193,197
|
Other expense, net
|
|
|
|
(5,854)
|
|
|
|
(1,493)
|
Interest expense
|
|
|
|
(23,602)
|
|
|
|
(23,400)
|
Income before income taxes
|
|
|
|
177,506
|
|
|
|
168,304
|
Income tax expense
|
|
|
|
47,252
|
|
|
|
40,358
|
Net income
|
|
|
$
|
130,254
|
|
|
$
|
127,946
|
Earnings per share:
|
|
|
|
|
|
|
|
|
Basic
|
|
|
$
|
0.97
|
|
|
$
|
0.93
|
Diluted
|
|
|
$
|
0.96
|
|
|
$
|
0.91
|
Shares used to compute earnings per share:
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
133,783
|
|
|
|
138,309
|
Diluted
|
|
|
|
136,326
|
|
|
|
140,850
|
Cash dividends paid per common share
|
|
|
$
|
0.17
|
|
|
$
|
0.16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AVNET, INC.
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
October 3,
|
|
June 27,
|
|
|
2015
|
|
2015
|
|
|
(Thousands)
|
ASSETS
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
824,695
|
|
$
|
932,553
|
Receivables, net
|
|
|
4,903,250
|
|
|
5,054,307
|
Inventories
|
|
|
2,805,012
|
|
|
2,482,183
|
Prepaid and other current assets
|
|
|
181,566
|
|
|
173,030
|
Total current assets
|
|
|
8,714,523
|
|
|
8,642,073
|
Property, plant and equipment, net
|
|
|
579,471
|
|
|
568,779
|
Goodwill
|
|
|
1,266,337
|
|
|
1,278,756
|
Intangible assets, net
|
|
|
90,906
|
|
|
99,731
|
Other assets
|
|
|
213,219
|
|
|
210,614
|
Total assets
|
|
$
|
10,864,456
|
|
$
|
10,799,953
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
Short-term debt
|
|
$
|
1,036,413
|
|
$
|
331,115
|
Accounts payable
|
|
|
3,339,844
|
|
|
3,338,052
|
Accrued expenses and other
|
|
|
583,998
|
|
|
603,129
|
Total current liabilities
|
|
|
4,960,255
|
|
|
4,272,296
|
Long-term debt
|
|
|
1,075,752
|
|
|
1,646,501
|
Other liabilities
|
|
|
197,178
|
|
|
196,135
|
Total liabilities
|
|
|
6,233,185
|
|
|
6,114,932
|
Shareholders' equity
|
|
|
4,631,271
|
|
|
4,685,021
|
Total liabilities and shareholders' equity
|
|
$
|
10,864,456
|
|
$
|
10,799,953
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AVNET, INC.
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
October 3,
|
|
|
September 27,
|
|
|
|
2015
|
|
|
2014
|
|
|
|
(Thousands)
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
Net income
|
|
|
$
|
130,254
|
|
|
$
|
127,946
|
Non-cash and other reconciling items:
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
|
23,683
|
|
|
|
23,134
|
Amortization
|
|
|
|
6,929
|
|
|
|
11,557
|
Deferred income taxes
|
|
|
|
3,381
|
|
|
|
10,290
|
Stock-based compensation
|
|
|
|
24,350
|
|
|
|
21,698
|
Other, net
|
|
|
|
16,492
|
|
|
|
17,715
|
Changes in (net of effects from businesses acquired):
|
|
|
|
|
|
|
|
|
Receivables
|
|
|
|
105,249
|
|
|
|
41,525
|
Inventories
|
|
|
|
(324,513)
|
|
|
|
(165,851)
|
Accounts payable
|
|
|
|
18,135
|
|
|
|
(28,836)
|
Accrued expenses and other, net
|
|
|
|
(37,701)
|
|
|
|
(99,833)
|
Net cash flows used for operating activities
|
|
|
|
(33,741)
|
|
|
|
(40,655)
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
Repayment of notes
|
|
|
|
(250,000)
|
|
|
|
-
|
(Repayments) borrowings under accounts receivable securitization
program, net
|
|
|
|
(33,000)
|
|
|
|
60,000
|
Borrowings (repayments) of bank and revolving debt, net
|
|
|
|
418,551
|
|
|
|
(41,955)
|
Repurchases of common stock
|
|
|
|
(143,725)
|
|
|
|
(12,264)
|
Dividends paid on common stock
|
|
|
|
(22,612)
|
|
|
|
(22,116)
|
Other, net
|
|
|
|
(2,503)
|
|
|
|
(2,053)
|
Net cash flows used for financing activities
|
|
|
|
(33,289)
|
|
|
|
(18,388)
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
Purchases of property, plant and equipment
|
|
|
|
(31,993)
|
|
|
|
(36,580)
|
Other, net
|
|
|
|
(39)
|
|
|
|
2,157
|
Net cash flows used for investing activities
|
|
|
|
(32,032)
|
|
|
|
(34,423)
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
|
(8,796)
|
|
|
|
(21,134)
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents:
|
|
|
|
|
|
|
|
|
- (decrease)
|
|
|
|
(107,858)
|
|
|
|
(114,600)
|
- at beginning of period
|
|
|
|
932,553
|
|
|
|
928,971
|
- at end of period
|
|
|
$
|
824,695
|
|
|
$
|
814,371
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AVNET, INC.
|
SEGMENT INFORMATION
|
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
|
|
First Quarters Ended*
|
|
|
|
October 3,
|
|
|
September 27,
|
|
|
|
2015
|
|
|
2014
|
|
|
|
(Millions)
|
Sales:
|
|
|
|
|
|
|
|
|
Electronics Marketing
|
|
|
$
|
4,471.4
|
|
|
$
|
4,374.1
|
Technology Solutions
|
|
|
|
2,498.3
|
|
|
|
2,465.5
|
Avnet Sales
|
|
|
$
|
6,969.7
|
|
|
$
|
6,839.6
|
Operating Income (Expense):
|
|
|
|
|
|
|
|
|
Electronics Marketing
|
|
|
$
|
213.0
|
|
|
$
|
202.7
|
Technology Solutions
|
|
|
|
74.5
|
|
|
|
62.4
|
Corporate
|
|
|
|
(47.2)
|
|
|
|
(41.4)
|
|
|
|
|
240.4
|
|
|
|
223.7
|
Restructuring, integration and other expenses
|
|
|
|
(26.0)
|
|
|
|
(18.3)
|
Amortization of intangible assets and other
|
|
|
|
(7.5)
|
|
|
|
(12.2)
|
Operating Income
|
|
|
$
|
207.0
|
|
|
$
|
193.2
|
|
|
|
|
|
|
|
|
|
|
* Sub-totals and totals may not foot due to rounding
|
|
|
|
|
|
|
|
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20151029005510/en/
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