Avnet Reports Third Quarter Fiscal 2020 Financial Results

Avnet, Inc. (Nasdaq: AVT) today announced results for its third fiscal quarter ended March 28, 2020.

Third Quarter Key Financial Highlights:

  • Sales of $4.3 billion compared with $4.7 billion a year ago.
  • GAAP diluted loss per share from continuing operations of $1.29, compared with EPS of $0.87 a year ago.
    • Non-GAAP adjusted diluted EPS of $0.38 compared with $1.09 a year ago.
    • Foreign exchange rates negatively impacted adjusted diluted EPS by $0.03, compared to prior year.
    • Incurred $160 million of goodwill and other impairment expenses due to the impacts of the COVID-19 outbreak and the corresponding decline in Avnet’s share price.
  • GAAP operating loss totaled $115.8 million, compared with GAAP operating income of $153.1 million a year ago.
    • Adjusted operating income declined 60.5% year over year to $70.4 million.
  • GAAP operating loss margin was 2.7%, compared with GAAP operating income margin of 3.3% a year ago.
    • Adjusted operating income margin was 1.6%, compared with 3.8% a year ago.
  • Cash flow from operations of $98 million, and totaled $777 million over the trailing four quarter period.
  • Improved debt profile with revolving debt reduction of $92 million, with net debt of $1.19 billion at the end of the quarter.

CEO Commentary

“Our third quarter results validated the resilience of our business model,” said Avnet CEO Bill Amelio. “We generated strong cash flow and revenues while adjusting our priorities to respond swiftly and effectively to the COVID-19 pandemic and ensure business continuity for all our stakeholders. Our first priority is the safety of our employees globally, and we quickly enacted protective and preventative measures to promote the health and safety of our employees while continuing to support the needs of our customers, suppliers, and business partners.”

Key Financial Metrics

($ in millions, except per share data)

Third Quarter Results (GAAP)

Mar – 20

Mar – 19

Change Y/Y

Dec – 19

Change Q/Q

Sales

$

4,309.8

$

4,698.8

(8.3)

%

$

4,534.8

(5.0)

%

Operating (Loss) Income

(115.8)

153.1

(175.6)

%

46.5

(349.1)

%

Operating (Loss) Income Margin

(2.7)

%

3.3

%

(595)

bps

1.0

%

(371)

bps

Diluted (Loss) Earnings Per Share

$

(1.29)

$

0.87

(248.3)

%

$

0.05

(2,680.0)

%

Third Quarter Results (Non-GAAP)(1)

Mar – 20

Mar – 19

Change Y/Y

Dec – 19

Change Q/Q

Sales

$

4,309.8

$

4,698.8

(8.3)

%

$

4,534.8

(5.0)

%

Adjusted Operating Income

70.4

178.1

(60.5)

%

82.2

(14.4)

%

Adjusted Operating Income Margin

1.6

%

3.8

%

(216)

bps

1.8

%

(18)

bps

Adjusted Diluted Earnings Per Share

$

0.38

$

1.09

(65.1)

%

$

0.40

(5.0)

%

Segment and Geographical Mix

Mar – 20

Mar – 19

Change Y/Y

Dec – 19

Change Q/Q

Electronic Components (EC) Sales

$

3,974.7

$

4,331.3

(8.2)

%

$

4,203.6

(5.5)

%

EC Operating Income Margin

2.1

%

3.5

%

(141)

bps

2.2

%

(9)

bps

Farnell Sales

$

335.1

$

367.5

(8.8)

%

$

331.2

1.2

%

Farnell Operating Income Margin

7.0

%

12.4

%

(545)

bps

6.0

%

94

bps

Americas Sales

$

1,203.6

$

1,297.2

(7.2)

%

$

1,186.6

1.4

%

EMEA Sales

1,512.5

1,740.9

(13.1)

%

1,425.8

6.1

%

Asia Sales

1,593.7

1,660.7

(4.0)

%

1,922.4

(17.1)

%

______________________________

(1)

A reconciliation of non-GAAP financial measures to GAAP financial measures is presented in the “Non-GAAP Financial Information” section of this press release.

CFO Commentary

“Despite headwinds including the outbreak of COVID-19, we generated cash flow from operations totaling $98 million in the third quarter and delivered quarterly sales of $4.3 billion,” said Avnet CFO Tom Liguori. “These results showed the strength of our counter-cyclical balance sheet and our ability to adapt quickly to current conditions. We reprioritized our capital allocation plan to conserve cash and manage our debt, including $92 million in debt reduction with net debt of $1.19 billion at the end of the quarter. We are resolutely focused on managing our working capital and generating cash during this period.”

Additional Third Quarter Fiscal 2020 Updates

  • Returned $58 million to shareholders with $37 million in share repurchases and $21 million in dividends paid during the quarter.
  • Announced that Avnet will redeem $300 million of its outstanding 5.875% notes at the end of April 2020.
  • Continued strong demand in aerospace and defense end markets, while auto and industrial end markets experienced weakness.
  • Expanded North America business with Micron franchise; Micron is the 4th largest Semiconductor Company in the world.
  • Announced exclusive global distribution deal with Sequans Communications for modem component Monarch Go, enabling new IoT devices to launch on Verizon with no additional testing required, significantly reducing time to market.
  • Won ON Semiconductor’s 2019 Distributor of the Year award globally, as well as in the Americas and for Silica.

COVID-19: Business Updates

During the third quarter, Avnet accelerated customers’ abilities to provide life-saving medical solutions by utilizing the Company’s end-to-end ecosystem in the fight against COVID-19. Employees in our Electronic Components business, Avnet Integrated, and Farnell all worked closely with our customers and partners to source, assemble, integrate and service medical devices and peripherals that enabled them to focus resources where they were needed most.

In addition, in the fourth quarter Avnet continues to respond to the COVID-19 outbreak in the following ways:

  • Avnet and Hackster.io are joining forces with the United Nations Development Programme (UNDP) and twelve leading technology companies to launch the COVID-19 Detect and Protect Challenge. The goal is to design low-cost and easily deployable technology that helps detect and prevent COVID-19 outbreaks in developing countries.
  • Enabling a major vacuum company to start producing ventilators by delivering prototyping and testing materials for the printed circuit boards designed into its new ventilator.
  • Joining with one of the biggest EMS in Italy and other companies that are producing the first 1,000 pieces of a new open-source pulmonary mechanical ventilator leveraging Raspberry Pi and Multicomp products.
  • Enabling a leading manufacturer to help meet the UK’s National Health Service’s 10x increase in demand for paraPAC ventilators by assisting with components needed for the prototype.
  • Directly supporting COVID-19 relief efforts by donating everything from personal protective equipment for medical professionals to 3D printers, to local, direct contributions in hard-hit communities.

Update on Guidance

Avnet is continuing to serve the needs of its suppliers, customers, and business partners and remains confident in its liquidity position. However, the Company is unable to predict the extent to which the global COVID-19 pandemic may impact its business operations, financial performance, and the results of operations for the next quarter. Therefore, Avnet will not be issuing guidance for the fourth quarter of fiscal 2020 ending on June 27, 2020.

Today’s Conference Call and Webcast Details

Avnet will host a quarterly webcast and teleconference today at 1:30 p.m. AZ / PDT and 4:30 p.m. EDT to discuss its financial results and provide a corporate update. The webcast can be accessed via Avnet’s Investor Relations web page at: www.ir.avnet.com, or from the following link Avnet Earnings Call Webcast and Slides.

Due to increased call volumes globally, the wait times when dialing in by phone may be longer than usual. Therefore, Avnet suggests using the webcast link above instead of the conference call line to avoid any delays. Those who would still like to participate in the live call can dial 877-407-8112 or 201-689-8840. A replay of the conference call will be available for 30 days, through May 27 at 5:00 p.m. EDT, and can be accessed by dialing: 877-660-6853 or 201-612-7415 and using Conference ID: 13700077. The webcast will be available for 90 days.

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,” “intend,” “estimate,” “forecast,” “expect,” “feel,” “believe,” “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 scope and duration of the COVID-19 outbreak and its impact on global economic systems, financial markets and Avnet’s operations, employees, customers and supply chain; Avnet’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; implementing and maintaining IT systems; supplier losses and changes to supplier programs; an industry down-cycle in electronic components including semiconductors; declines in sales; changes in business conditions and the economy in general; disruptions to the business resulting from pandemics, epidemics or other health related crisis (such as COVID-19 outbreak); changes in market demand and pricing pressures; any material changes in the allocation of product or price discounts 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 Avnet’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.

About Avnet

Avnet is a global technology solutions provider with an extensive ecosystem delivering design, product, marketing and supply chain expertise for customers at every stage of the product lifecycle. We transform ideas into intelligent solutions, reducing the time, cost and complexities of bringing products to market. For nearly a century, Avnet has helped its customers and suppliers around the world realize the transformative possibilities of technology. Learn more about Avnet at www.avnet.com. (AVT_IR)

AVNET, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

Third Quarters Ended

Nine Months Ended

March 28,

March 30,

March 28,

March 30,

2020

2019

2020

2019

(Thousands, except per share data)

Sales

$

4,309,818

$

4,698,824

$

13,474,632

$

14,837,683

Cost of sales

3,790,885

4,074,629

11,886,247

12,946,706

Gross profit

518,933

624,195

1,588,385

1,890,977

Selling, general and administrative expenses

469,646

468,171

1,391,024

1,415,040

Goodwill and intangible asset impairment expense

145,836

145,836

Restructuring, integration and other expenses

19,211

2,939

58,073

79,986

Operating (loss) income

(115,760

)

153,085

(6,548

)

395,951

Other (expense) income, net

(12,608

)

8,731

(8,162

)

9,424

Interest and other financing expenses, net

(29,718

)

(36,253

)

(97,254

)

(100,064

)

Income (loss) from continuing operations before taxes

(158,086

)

125,563

(111,964

)

305,311

Income tax (benefit) expense

(29,425

)

30,628

(30,270

)

90,072

Income (loss) from continuing operations, net of tax

(128,661

)

94,935

(81,694

)

215,239

Loss from discontinued operations, net of tax

(6,887

)

(1,548

)

(7,066

)

Net (loss) income

$

(128,661

)

$

88,048

$

(83,242

)

$

208,173

Earnings (loss) per share - basic:

Continuing operations

$

(1.29

)

$

0.87

$

(0.81

)

$

1.93

Discontinued operations

(0.06

)

(0.01

)

(0.06

)

Net (loss) income per share basic

$

(1.29

)

$

0.81

$

(0.82

)

$

1.87

Earnings (loss) per share - diluted:

Continuing operations

$

(1.29

)

$

0.87

$

(0.81

)

$

1.91

Discontinued operations

(0.06

)

(0.01

)

(0.06

)

Net (loss) income per share diluted

$

(1.29

)

$

0.81

$

(0.82

)

$

1.85

Shares used to compute earnings per share:

Basic

99,479

108,074

101,013

111,222

Diluted

99,479

108,822

101,013

112,252

Cash dividends paid per common share

$

0.21

$

0.20

$

0.63

$

0.60

AVNET, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

March 28,

June 29,

2020

2019

(Thousands)

ASSETS

Current assets:

Cash and cash equivalents

$

402,655

$

546,105

Receivables, net

2,987,791

3,168,369

Inventories

2,745,219

3,008,424

Prepaid and other current assets

180,956

153,438

Total current assets

6,316,621

6,876,336

Property, plant and equipment, net

413,371

452,171

Goodwill

760,939

876,728

Intangible assets, net

77,306

143,520

Operating lease assets

271,243

Other assets

250,248

215,801

Total assets

$

8,089,728

$

8,564,556

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:

Short-term debt

$

399,965

$

300,538

Accounts payable

1,733,673

1,864,342

Accrued expenses and other

418,654

413,696

Short-term operating lease liabilities

55,496

Total current liabilities

2,607,788

2,578,576

Long-term debt

1,194,240

1,419,922

Long-term operating lease liabilities

247,539

Other liabilities

362,883

425,585

Total liabilities

4,412,450

4,424,083

Shareholders’ equity

3,677,278

4,140,473

Total liabilities and shareholders’ equity

$

8,089,728

$

8,564,556

AVNET, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

Nine Months Ended

March 28, 2020

March 30, 2019

(Thousands)

Cash flows from operating activities:

Net (loss) income

$

(83,242

)

$

208,173

Less: Loss from discontinued operations, net of tax

(1,548

)

(7,066

)

Income (loss) from continuing operations

(81,694

)

215,239

Non-cash and other reconciling items:

Depreciation

75,535

72,692

Amortization

62,240

63,123

Amortization of operating lease assets

46,560

Deferred income taxes

(42,529

)

45,286

Stock-based compensation

20,757

24,204

Goodwill and intangible asset impairment

145,836

Other, net

35,000

42,786

Changes in (net of effects from businesses acquired and divested):

Receivables

150,095

436,382

Inventories

227,996

(125,410

)

Accounts payable

(112,923

)

(399,526

)

Accrued expenses and other, net

(84,263

)

(118,347

)

Net cash flows provided by operating activities - continuing operations

442,610

256,429

Net cash flows used for operating activities - discontinued operations

(56,284

)

Net cash flows provided by operating activities

442,610

200,145

Cash flows from financing activities:

Borrowings (repayments) under accounts receivable securitization, net

(127,400

)

342,000

Repayments under bank credit facilities and other debt, net

(1,639

)

(11,386

)

Borrowings (repayments) under senior unsecured credit facility, net

(1,194

)

85,005

Repurchases of common stock

(235,830

)

(447,901

)

Dividends paid on common stock

(63,235

)

(66,188

)

Other, net

(15,132

)

10,042

Net cash flows used for financing activities - continuing operations

(444,430

)

(88,428

)

Net cash flows used for financing activities

(444,430

)

(88,428

)

Cash flows from investing activities:

Purchases of property, plant and equipment

(61,156

)

(101,383

)

Acquisitions of businesses, net of cash acquired

(51,509

)

(66,458

)

Other, net

(12,547

)

42,069

Net cash flows used for investing activities - continuing operations

(125,212

)

(125,772

)

Net cash flows provided by investing activities - discontinued operations

123,473

Net cash flows used for investing activities

(125,212

)

(2,299

)

Effect of currency exchange rate changes on cash and cash equivalents

(16,418

)

(5,291

)

Cash and cash equivalents:

— (decrease) increase

(143,450

)

104,127

— at beginning of period

546,105

621,125

— at end of period

$

402,655

$

725,252

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 certain non-GAAP financial information including (i) adjusted operating income, (ii) adjusted operating expenses, (iii) adjusted other income (expense), (iv) adjusted income tax expense, (v) adjusted income from continuing operations, (vi) adjusted diluted earnings per share from continuing operations, and (vii) sales adjusted for the impact of significant 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 “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 on sales, income or expense items for subsidiaries reporting in currencies other than the U.S. Dollar, the Company adjusts the average exchange rates used in current periods to be consistent with the average exchange rates in effect during the comparative period.

Management believes that operating income and operating expenses adjusted for restructuring, integration and other expenses, goodwill and intangible asset impairment expense and amortization of acquired intangible assets and other, are useful measures to help investors better assess and understand the Company’s operating performance. This is especially the case 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 most cases, for measuring performance for compensation purposes. Management measures operating income for its reportable segments excluding restructuring, integration and other expenses, goodwill and intangible asset impairment expense and amortization of acquired intangible assets and other.

Additional non-GAAP metrics management uses is adjusted operating income margin, which is defined as adjusted operating income (as defined above) divided by sales.

Management also believes income tax expense, income from continuing operations and diluted earnings per share from continuing operations adjusted for the impact of the items described above and certain items impacting other income (expense) and income tax expense are useful to investors because they provide a measure of the Company’s net profitability on a more comparable basis to historical periods and provide a more meaningful basis for forecasting future performance. Adjustments to income tax expense and the effective income tax rate include the effect of changes in tax laws including recent tax law changes in the U.S., changes in valuation allowances and unrecognized tax benefits, income tax audit settlements and adjustments to the adjusted interim effective tax rate based upon the expected annual adjusted effective tax rate. Additionally, because of management’s focus on generating shareholder value, of which net profitability is a primary driver, management believes income from continuing operations and diluted earnings per share from continuing operations excluding the impact of these items provides an important measure of the Company’s net profitability for the investing public.

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. All amounts below relate to Avnet’s continuing operations.

Fiscal

Quarters Ended

Year to Date

March 28,

December 29,

September 29,

2020*

2020*

2019*

2019*

($ in thousands, except per share amounts)

GAAP selling, general and administrative expenses - continuing operations

$

1,391,024

$

469,646

$

464,873

$

456,503

Amortization of intangible assets and other - continuing operations

(62,603

)

(21,071

)

(21,454

)

(20,078

)

Adjusted operating expenses - continuing operations

1,328,420

448,576

443,419

436,426

GAAP operating (loss) income - continuing operations

$

(6,548

)

$

(115,760

)

$

46,475

$

62,738

Restructuring, integration and other expenses - continuing operations

58,073

19,211

14,265

24,598

Goodwill and intangible asset impairment expense - continuing operations

145,836

145,836

-

-

Amortization of intangible assets and other - continuing operations

62,603

21,071

21,454

20,078

Adjusted operating income - continuing operations

259,965

70,358

82,194

107,414

GAAP (loss) income before income taxes- continuing operations

$

(111,964

)

$

(158,086

)

$

12,086

$

34,038

Restructuring, integration and other expenses - continuing operations

58,073

19,211

14,265

24,598

Goodwill and intangible asset impairment expense - continuing operations

145,836

145,836

-

-

Amortization of intangible assets and other - continuing operations

62,603

21,071

21,454

20,078

Other expenses - continuing operations

19,528

15,526

4,002

-

Adjusted income before income taxes - continuing operations

174,078

43,558

51,807

78,713

GAAP income tax expense (benefit) - continuing operations

$

(30,270

)

$

(29,425

)

$

6,870

$

(7,714

)

Restructuring, integration and other expenses - continuing operations

13,989

4,372

3,377

6,240

Goodwill and intangible asset impairment expense - continuing operations

6,226

6,226

-

-

Amortization of intangible assets and other - continuing operations

12,506

4,307

3,964

4,235

Other expenses - continuing operations

5,732

4,992

740

-

Income tax benefit (expense) items, net - continuing operations

24,659

15,119

(4,071

)

13,611

Adjusted income tax expense - continuing operations

32,843

5,591

10,880

16,372

GAAP (loss) income - continuing operations

$

(81,694

)

$

(128,661

)

$

5,216

$

41,752

Restructuring, integration and other expenses (net of tax) - continuing operations

44,084

14,839

10,888

18,358

Goodwill and intangible asset impairment expense (net of tax) - continuing operations

139,610

139,610

-

-

Amortization of intangible assets and other (net of tax) - continuing operations

50,097

16,764

17,490

15,843

Other expenses (net of tax) - continuing operations

13,796

10,534

3,262

-

Income tax (benefit) expense items, net - continuing operations

(24,659

)

(15,119

)

4,071

(13,611

)

Adjusted income - continuing operations

141,235

37,967

40,927

62,341

GAAP diluted (loss) earnings per share - continuing operations

$

(0.81

)

$

(1.29

)

$

0.05

$

0.40

Restructuring, integration and other expenses (net of tax) - continuing operations

0.44

0.15

0.11

0.18

Goodwill and intangible asset impairment expense (net of tax) - continuing operations

1.38

1.39

-

-

Amortization of intangible assets and other (net of tax) - continuing operations

0.50

0.17

0.17

0.15

Other expenses (net of tax) - continuing operations

0.14

0.11

0.03

-

Income tax (benefit) expense items, net - continuing operations

(0.25

)

(0.15

)

0.04

(0.13

)

Adjusted diluted EPS - continuing operations

1.40

0.38

0.40

0.60

______________________________
* May not foot/cross foot due to rounding and differences in average diluted shares between quarterly periods compared to the fiscal year to date.

Fiscal

Quarters Ended

Year to Date

June 29,

March 30,

December 29,

September 29,

2019*

2019*

2019*

2018*

2018

($ in thousands, except per share amounts)

GAAP selling, general and administrative expenses - continuing operations

$

1,874,651

$

459,611

$

468,171

$

471,723

$

475,146

Amortization of intangible assets and other - continuing operations

(84,257

)

(20,737

)

(22,080

)

(20,513

)

(20,927

)

Adjusted operating expenses - continuing operations

1,790,393

438,872

446,092

451,210

454,219

GAAP operating income (loss) - continuing operations

$

365,911

$

(30,040

)

$

153,085

$

96,050

$

146,816

Restructuring, integration and other expenses - continuing operations

108,144

28,158

2,939

62,260

14,788

Goodwill and intangible asset impairment expense - continuing operations

137,396

137,396

-

-

-

Amortization of intangible assets and other - continuing operations

84,257

20,737

22,080

20,513

20,927

Adjusted operating income - continuing operations

695,708

156,252

178,103

178,823

182,531

GAAP income (loss) before income taxes- continuing operations

$

242,268

$

(63,043

)

$

125,563

$

64,916

$

114,831

Restructuring, integration and other expenses - continuing operations

108,144

28,158

2,939

62,260

14,788

Goodwill and intangible asset impairment expense - continuing operations

137,396

137,396

-

-

-

Amortization of intangible assets and other - continuing operations

84,257

20,737

22,080

20,513

20,927

Other expenses - continuing operations

509

509

-

-

-

Adjusted income before income taxes - continuing operations

572,574

123,758

150,581

147,689

150,546

GAAP income tax expense (benefit) - continuing operations

$

62,157

$

(27,915

)

$

30,628

$

28,141

$

31,302

Restructuring, integration and other expenses - continuing operations

26,746

7,455

306

15,665

3,320

Goodwill and intangible asset impairment expense - continuing operations

18,566

18,566

-

-

-

Amortization of intangible assets and other - continuing operations

17,986

4,382

4,747

4,379

4,478

Other expenses - continuing operations

57

57

-

-

-

Income tax (expense) benefit items, net - continuing operations

(8,143

)

20,896

(4,059

)

(16,742

)

(8,238

)

Adjusted income tax expense - continuing operations

117,369

23,441

31,622

31,443

30,862

GAAP income (loss) - continuing operations

$

180,111

$

(35,128

)

$

94,935

$

36,775

$

83,529

Restructuring, integration and other expenses (net of tax) - continuing operations

81,398

20,703

2,633

46,595

11,468

Goodwill and intangible asset impairment expense (net of tax) - continuing operations

118,830

118,830

-

-

-

Amortization of intangible assets and other (net of tax) - continuing operations

66,271

16,355

17,333

16,134

16,449

Other expenses (net of tax) - continuing operations

452

452

-

-

-

Income tax expense (benefit) items, net - continuing operations

8,143

(20,896

)

4,059

16,742

8,238

Adjusted income - continuing operations

455,205

100,316

118,960

116,246

119,684

GAAP diluted earnings (loss) per share - continuing operations

$

1.63

$

(0.33

)

$

0.87

$

0.33

$

0.72

Restructuring, integration and other expenses (net of tax) - continuing operations

0.74

0.20

0.02

0.42

0.10

Goodwill and intangible asset impairment expense (net of tax) - continuing operations

1.07

1.13

-

-

-

Amortization of intangible assets and other (net of tax) - continuing operations

0.60

0.15

0.16

0.14

0.14

Other expenses (net of tax) - continuing operations

-

-

-

-

-

Income tax expense (benefit) items, net - continuing operations

0.07

(0.20

)

0.04

0.15

0.07

Adjusted diluted EPS - continuing operations

4.11

0.95

1.09

1.04

1.03

______________________________
* May not foot/cross foot due to rounding and differences in average diluted shares between quarterly periods compared to the fiscal year to date.

Organic Sales

Organic sales is defined as sales adjusted for the impact of significant acquisitions, divestitures and other items by adjusting Avnet’s prior and current (if necessary) 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. Organic sales in constant currency is defined as organic sales (as defined above) excluding the impact of changes in foreign currency exchange rates.

The following table presents reported and organic sales growth rates for the third quarter of fiscal 2020 compared to fiscal 2019.

Third Quarters Ended

As Reported

Sales

Sales

As Reported

and Organic

as Reported

as Reported

and

Year-Year %

and Organic

and Organic

Organic

Change in

Fiscal

Fiscal

Year-Year

Constant

2020

2019

% Change

Currency

(Dollars in millions)

Avnet

$

4,309.8

$

4,698.8

(8.3)

%

(7.3)

%

Avnet by region

Americas

$

1,203.6

$

1,297.2

(7.2)

%

(7.2)

%

EMEA

1,512.5

1,740.9

(13.1)

(10.4)

Asia

1,593.7

1,660.7

(4.0)

(4.2)

Avnet by operating group

EC

$

3,974.7

$

4,331.3

(8.2)

%

(7.3)

%

Farnell

335.1

367.5

(8.8)

(7.6)

Historical Segment Financial Information

Fiscal Year 2020

Quarters Ended

Third Quarter

Second Quarter

First Quarter

Fiscal Year

March 28,

December 28,

September 28,

2020*

2020*

2019

2019

(in millions)

Sales:

Electronic Components

$

12,472.5

$

3,974.7

$

4,203.6

$

4,294.2

Farnell

1,002.1

335.1

331.2

335.8

Avnet sales

$

13,474.6

$

4,309.8

$

4,534.8

$

4,630.0

Operating income (loss):

Electronic Components

$

290.3

$

84.8

$

93.1

$

112.3

Farnell

65.1

23.4

20.0

21.8

355.4

108.2

113.1

134.1

Corporate expenses

(95.4

)

(37.8

)

(30.9

)

(26.7

)

Restructuring, integration and other expenses

(58.1

)

(19.2

)

(14.3

)

(24.6

)

Goodwill and intangible asset impairment expense

(145.8

)

(145.8

)

-

-

Amortization of acquired intangible assets and other

(62.6

)

(21.1

)

(21.4

)

(20.1

)

Avnet operating income (loss)

$

(6.5

)

$

(115.8

)

$

46.5

$

62.7

Sales by geographic area:

Americas

$

3,605.9

$

1,203.6

$

1,186.6

$

1,215.8

EMEA

4,409.3

1,512.5

1,425.8

1,470.9

Asia

5,459.4

1,593.7

1,922.4

1,943.3

Avnet sales

$

13,474.6

$

4,309.8

$

4,534.8

$

4,630.0

Fiscal Year 2019

Quarters Ended

Fourth Quarter

Third Quarter

Second Quarter

First Quarter

Fiscal Year

June 29,

March 30,

December 29,

September 29,

2019*

2019

2019

2018

2018

(in millions)

Sales:

Electronic Components

$

18,060.3

$

4,337.5

$

4,331.3

$

4,680.7

$

4,710.8

Farnell

1,458.3

343.4

367.5

368.3

379.1

Avnet sales

$

19,518.6

$

4,680.9

$

4,698.8

$

5,049.0

$

5,089.9

Operating income:

Electronic Components

$

614.9

$

141.1

$

153.3

$

158.6

$

161.9

Farnell

159.3

33.2

45.7

39.6

40.8

774.2

174.3

199.0

198.2

202.7

Corporate expenses

(78.5

)

(18.0

)

(20.9

)

(19.4

)

(20.2

)

Restructuring, integration and other expenses

(108.1

)

(28.2

)

(2.9

)

(62.3

)

(14.8

)

Goodwill and intangible asset impairment expense

(137.4

)

(137.4

)

-

-

-

Amortization of acquired intangible assets and other

(84.3

)

(20.7

)

(22.1

)

(20.5

)

(20.9

)

Avnet operating income (loss)

$

365.9

$

(30.0

)

$

153.1

$

96.0

$

146.8

Sales by geographic area:

Americas

$

5,135.8

$

1,266.3

$

1,297.2

$

1,300.4

$

1,271.8

EMEA

6,762.9

1,638.5

1,740.9

1,668.6

1,714.9

Asia

7,619.9

1,776.1

1,660.7

2,080.0

2,103.2

Avnet sales

$

19,518.6

$

4,680.9

$

4,698.8

$

5,049.0

$

5,089.9

______________________________
* May not foot/cross foot due to rounding

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