Avnet, Inc.
Aug 11, 2010

Avnet, Inc. Reports Fourth Quarter and Fiscal Year 2010 Results

Record Quarterly Revenue, EPS and Returns

PHOENIX, Aug 11, 2010 (BUSINESS WIRE) -- Avnet, Inc. (NYSE:AVT) today announced results for the fourth quarter and fiscal year 2010 ended July 3, 2010.

Three Months Ended
July 3, June 27, Net
2010 2009 Change
$ in millions, except per share data
Sales $ 5,213.8 $ 3,765.4 38.5 %
GAAP Operating Income (Loss) $ 217.1 $ (20.5 ) -
Adjusted Operating Income (1) $ 217.1 $ 85.3 154.6 %
GAAP Net Income (Loss) $ 141.1 $ (30.9 ) -
Adjusted Net Income (1) $ 141.1 $ 48.0 194.1 %
GAAP Diluted EPS $ 0.92 $ (0.20 ) -
Adjusted Diluted EPS (1) $ 0.92 $ 0.32 187.5 %

(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.

Roy Vallee, Chairman and Chief Executive Officer, commented, "The 'V'shaped cyclical recovery in the technology markets we serve continued this quarter with strong top line performance across both groups and all regions, resulting in 38.5% year-over-year growth and record revenue. The combination of record revenue, gross profit margin expansion and productivity gains drove operating income margin up sequentially and year over year at both operating groups with the EMEA region delivering the most significant improvement. Our value-based management discipline, which connects margins with working capital velocity throughout our business, resulted in return on working capital (ROWC) and return on capital employed (ROCE) above our stated financial targets. We enter fiscal 2011 prepared to build on our performance in fiscal 2010 as we begin to integrate the three acquisitions completed in July that we expect will produce at least a 12.5% return on capital employed and create shareholder value."

Avnet Electronics Marketing Results

Year over Year Growth Rates
Q410 Reported Pro forma
Revenue Revenue Revenue (2)
(in millions)
Total

$ 3,124.9 46.9 % -
Excluding FX (1)

49.6 % -
Americas

$ 989.4 39.5 % -
EMEA

$ 1,039.5 50.0 % -
Excluding FX (1)

58.7 % -
Asia

$ 1,096.0 51.2 % -
Q410 Q409 Change
Operating Income

$ 173.8 $ 57.1 $ 116.7
Operating Income Margin

5.56 % 2.69 % 287 bps

(1) Year over year revenue growth rate excluding the impact of changes in foreign currency exchange rates.

(2) Pro forma growth rates are not presented as EM revenue comparisons to prior year were not impacted by acquisitions.

Mr. Vallee added, "The demand for electronic components remained strong across all three regions as better-than-normal sequential growth resulted in year-over-year revenue growth of 47% this quarter, establishing a new record for EM. Gross profit margin improved sequentially and year over year in all three regions with the largest improvement in the EMEA region where gross profit margin increased over 100 basis points sequentially. Operating income margin improved sequentially for the fourth consecutive quarter, reaching 5.6% for the first time in two years. With operating income margin at the high end of its target range and record working capital velocity, Electronic Marketing's ROWC increased over 2,100 basis points year over year with all three regions above our stated targets. Bookings remained strong with the book to bill ratio continuing at well over 1.1 to 1 which would indicate that supply has still not caught up with demand throughout the industry."

Avnet Technology Solutions Results

Year over Year Growth Rates
Q410 Reported Pro forma
Revenue Revenue Revenue
(in millions)
Total

$ 2,088.9 27.5 % 24.8 %
Excluding FX (1)

28.6 % 25.9 %
Americas

$ 1,286.9 26.7 % -
EMEA

$ 534.6 15.0 % 13.8 %
Excluding FX (1)

21.0 % 19.7 %
Asia

$ 267.4 70.0 % 42.2 %
Q410 Q409 Change
Operating Income

$ 62.2 $ 41.2 $ 21.0
Operating Income Margin

2.98 % 2.52 % 46 bps

(1) Year over year revenue growth rate excluding the impact of changes in foreign currency exchange rates.

Mr. Vallee further added, "The technology refresh cycle that has been driving better-than-normal seasonal growth continued this quarter as TS pro forma revenue grew 10% sequentially and 25% year over year. In the Americas region, year-over-year growth rates accelerated for the third consecutive quarter while EMEA surged well into positive territory in constant currency for the first time this fiscal year. Excluding the impact of foreign currency, the TS EMEA team grew pro forma revenue 8% sequentially and nearly 20% year over year while delivering significant improvements in operating income margin. At a product level, server growth was particularly strong this quarter as revenue increased over 30% sequentially and 29% year over year. TS global generated economic profits every quarter this fiscal year with return on working capital above our stated targets while we improved our performance in EMEA and continued to invest and grow our business in Asia."

Cash Flow

Ray Sadowski, Chief Financial Officer, stated, "We had a strong quarter of cash generation as adjusted operating income grew 24% sequentially and working capital velocity remained near record levels, thereby driving cash flow from operations to $124 million for the quarter. For the year, we used only $30 million of cash for operations even though sales grew 18%. This was due to the strong performance by our team as we improved working capital velocity by 33% year over year to a record 7.8X. We ended the quarter with $1.9 billion in liquidity (cash plus availability under our credit facilities) to support continued profitable organic and M&A growth of which roughly $600 million was used to fund the three acquisitions we completed in July, including the repayment of certain debt assumed with the acquisitions."

Fiscal 2010 Full Year Results

Full Year Ended
July 3, June 27, Net
2010 2009 Change
$ in millions, except per share data
Sales $ 19,160.2 $ 16,229.9 18.1 %
GAAP Operating Income (Loss) $ 635.6 $ (1,019.0 ) -
Adjusted Operating Income (1) $ 661.0 $ 491.2 34.6 %
GAAP Net Income (Loss) $ 410.4 $ (1,129.7 ) -
Adjusted Net Income (1) $ 424.6 $ 289.4 46.7 %
GAAP Diluted EPS $ 2.68 $ (7.49 ) -
Adjusted Diluted EPS (1) $ 2.77 $ 1.92 44.3 %

(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.

Outlook For Fiscal 1st Quarter Ending on October 2, 2010

The above EPS guidance does not include any potential restructuring charges or any charges related to acquisitions and post-closing integration activities. In addition, the above guidance assumes that the average Euro to U.S. Dollar currency exchange rate for the first quarter of fiscal 2011 is $1.30 to EUR 1.00. This compares with an average exchange rate of $1.43 to EUR 1.00 in the first quarter of fiscal 2010 and $1.27 to EUR 1.00 in the fourth quarter of fiscal 2010.

Forward Looking Statements

This press release 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," "expect," 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 vary 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, any significant and unanticipated sales decline, 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, allocations of products by suppliers, 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. 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 press release certain non-GAAP financial information including adjusted operating income, adjusted net income and adjusted diluted earnings per share, as well as revenue adjusted for the impact of acquisitions ("pro forma revenue" or "organic revenue"). Management believes pro forma revenue 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 restructuring, integration and other items 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. 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 EPS adjusted for the impact of the items described above 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 EPS excluding the impact of these items provides an important measure of the Company's net results of operations for the investing public. However, analysis of results and outlook on a non-GAAP basis should be used as a complement to, and in conjunction with, data presented in accordance with GAAP.

Fiscal Year 2010

Fiscal Year Ended 2010
Diluted
Op Income Pre-tax Net Income EPS
$ in thousands, except per share data
GAAP results $ 635,600 $ 585,083 $ 410,370 $ 2.68
Restructuring, integration and other 25,419 25,419 18,789 0.12
Gain on sale of assets - (8,751 ) (5,370 ) (0.03 )
Net reduction in tax reserves - - 842 0.01
Total adjustments 25,419 16,668 14,261 0.09 (1)
Adjusted results $ 661,019 $ 601,751 $ 424,631 $ 2.77

(1)

EPS does not foot due to rounding.

Items impacting the full fiscal year 2010 consisted of the following:

Fourth Quarter and Fiscal Year 2009

Fourth Quarter Ended Fiscal 2009 Fiscal Year Ended 2009
Diluted Diluted
Op Income Pre-tax Net Income EPS Op Income Pre-tax Net Income EPS
$ in thousands, except per share data
GAAP results (1) $ (20,534 ) $ (24,220 ) $ (30,878 ) $ (0.20 ) $ (1,018,998 ) $ (1,094,968 ) $ (1,129,712 ) $ (7.49 )
Impairment charges 62,282 62,282 62,282 0.41 1,411,127 1,411,127 1,376,983 9.13
Restructuring, integration and other 43,523 43,523 25,304 0.17 99,342 99,342 65,310 0.43
Gain on sale of assets - (14,318 ) (8,727 ) (0.06 ) - (14,318 ) (8,727 ) (0.06 )
Net reduction in tax reserves - - - - - - (21,672 ) (0.14 )
Retrospective application of accounting standard - - - - (291 ) 11,894 7,250 0.05
Total adjustments 105,805 91,487 78,859 0.52 1,510,178 1,508,045 1,419,144 9.41
Adjusted results $ 85,271 $ 67,267 $ 47,981 $ 0.32 $ 491,180 $ 413,077 $ 289,432 $ 1.92
(1) As adjusted for the retrospective application of an accounting standard.

Items impacting fourth quarter of fiscal 2009 consisted of the following:

Items impacting the full fiscal year 2009 consisted of the following:

Pro Forma (Organic) Revenue

Pro forma or Organic revenue is defined as revenue adjusted for the impact of acquisitions to include the revenue recorded by these businesses as if the acquisitions had occurred at the beginning of fiscal 2009. Revenue adjusted for this impact is presented in the following table:

Revenue Acquisition Pro forma
as Reported Revenue Revenue
(in thousands)
Q1 Fiscal 2010

$ 4,355,036 $ 42,422 $ 4,397,458
Q2 Fiscal 2010

4,834,524 50,946 4,885,470
Q3 Fiscal 2010

4,756,786 25,761 4,782,547
Q4 Fiscal 2010

5,213,826 - 5,213,826
Fiscal year 2010

$ 19,160,172 $ 119,129 $ 19,279,301
Q1 Fiscal 2009

$ 4,494,450 $ 216,337 $ 4,710,787
Q2 Fiscal 2009

4,269,178 184,362 4,453,540
Q3 Fiscal 2009

3,700,836 33,135 3,733,971
Q4 Fiscal 2009 3,765,432 35,868 3,801,300
Fiscal year 2009

$ 16,229,896 $ 469,702 $ 16,699,598

"Acquisition Revenue" as presented in the preceding table includes the following acquisitions:

Acquired Business

Operating Group

Acquisition Date

Ontrack Solutions Pvt. Ltd. TS July 2008
Nippon Denso Industry Co., Ltd. EM December 2008
Abacus Group plc EM January 2009
Vanda Group TS October 2009
Sunshine Joint Stock Company TS November 2009
PT Datamation TS April 2010
Servodata HP Division TS April 2010

Teleconference Webcast and Upcoming Events

Avnet will host a Webcast of its quarterly teleconference today at 2:00 p.m. Eastern Time. The live Webcast event, as well as other financial information including financial statement reconciliations of GAAP and 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 presentation will also be available after the Webcast.

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) is one of the largest distributors of electronic components, computer products and embedded technology serving customers in more than 70 countries worldwide. Avnet accelerates its partners' success by connecting the world's leading technology suppliers with a broad base of more than 100,000 customers by providing cost-effective, value-added services and solutions. For the fiscal year ended July 3, 2010, Avnet generated revenue of $19.16 billion. For more information, visit www.avnet.com. (AVT_IR)

AVNET, INC.
FINANCIAL HIGHLIGHTS
(MILLIONS EXCEPT PER SHARE DATA)
FOURTH QUARTERS ENDED
JULY 3, JUNE 27,
2010 * 2009 *
Sales $ 5,213.8 $ 3,765.4
Income (loss) before income taxes 200.2 (24.2 )
Net income (loss) 141.1 (30.9 )
Net income (loss) per share:

Basic

$ 0.93 ($0.20 )

Diluted

$ 0.92 ($0.20 )
FISCAL YEARS ENDED
JULY 3, JUNE 27,
2010 * 2009 *
Sales $ 19,160.2 $ 16,229.9
Income (loss) before income taxes 585.1 (1,095.0 )
Net income (loss) 410.4 (1,129.7 )
Net income (loss) per share:

Basic

$ 2.71 ($7.49 )

Diluted

$ 2.68 ($7.49 )

*See Notes to Consolidated Statements of Operations on Page 13.

AVNET, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(THOUSANDS EXCEPT PER SHARE DATA)
FOURTH QUARTERS ENDED FISCAL YEARS ENDED
JULY 3, JUNE 27, JULY 3, JUNE 27,
2010 2009 * 2010 * 2009 *
Sales $ 5,213,826 $ 3,765,432 $ 19,160,172 $ 16,229,896
Cost of sales 4,568,024 3,322,588 16,879,955 14,206,903
Gross profit 645,802 442,844 2,280,217 2,022,993

Selling, general and administrative expenses

428,709 357,573 1,619,198 1,531,522
Impairment charges (Note 1 *) - 62,282 - 1,411,127

Restructuring, integration and other charges (Note 2 *)

- 43,523 25,419 99,342
Operating income (loss) 217,093 (20,534 ) 635,600 (1,018,998 )
Other (expense) income, net (1,101 ) (3,426 ) 2,480 (11,622 )
Interest expense (Note 3 *) (15,823 ) (14,578 ) (61,748 ) (78,666 )
Gain on sale of assets (Note 4 *) - 14,318 8,751 14,318
Income (loss) before income taxes 200,169 (24,220 ) 585,083 (1,094,968 )
Income tax provision (Note 5 *) 59,050 6,658 174,713 34,744
Net income (loss) $ 141,119 ($30,878 )

$ 410,370 ($1,129,712 )
Net earnings (loss) per share:
Basic $ 0.93 ($0.20 ) $ 2.71 ($7.49 )
Diluted $ 0.92 ($0.20 ) $ 2.68 ($7.49 )

Shares used to compute earnings (loss) per share:

Basic 151,958 151,161 151,629 150,898
Diluted 153,576 151,161 153,093 150,898
* See Notes to Consolidated Statements of Operations on Page 13.
AVNET, INC.
CONSOLIDATED BALANCE SHEETS
(THOUSANDS)
JULY 3, JUNE 27,
2010 2009
Assets:
Current assets:
Cash and cash equivalents $ 1,092,102 $ 943,921
Receivables, net 3,574,541 2,618,697
Inventories 1,812,766 1,411,755
Prepaid and other current assets 150,759 169,879
Total current assets 6,630,168 5,144,252
Property, plant and equipment, net 302,583 305,682
Goodwill 566,309 550,118
Other assets 283,322 273,464
Total assets 7,782,382 6,273,516
Less liabilities:
Current liabilities:
Borrowings due within one year 36,549 23,294
Accounts payable 2,862,290 1,957,993
Accrued expenses and other 540,776 474,573
Total current liabilities 3,439,615 2,455,860
Long-term debt 1,243,681 946,573
Other long-term liabilities 89,969 110,226
Total liabilities 4,773,265 3,512,659
Shareholders' equity $ 3,009,117 $ 2,760,857
AVNET, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(THOUSANDS)
FISCAL YEARS ENDED
JULY 3, JUNE 27,
2010 2009
Cash flows from operating activities:
Net income (loss) $ 410,370 ($1,129,712 )
Non-cash and other reconciling items:
Depreciation and amortization 60,643 65,781
Deferred income taxes 46,424 (92,787 )
Stock-based compensation 28,363 18,269
Impairment charges - 1,411,127
Gain on sale of assets (8,751 ) (14,318 )
Other, net 15,385 38,414
Changes in (net of effects from businesses acquired):
Receivables (1,070,302 ) 709,908
Inventories (459,917 ) 483,453
Accounts payable 963,332 (375,509 )
Accrued expenses and other, net (15,962 ) 3,409
Net cash flows (used for) provided by operating activities (30,415 ) 1,118,035
Cash flows from financing activities:
Issuance of notes in public offerings, net of issuance costs 296,469 -
Repayment of notes - (300,000 )
Repayment of bank debt, net (1,732 ) (90,444 )
Repayment of other debt, net (2,803 ) (16,361 )
Other, net 4,838 1,564
Net cash flows provided by (used for) financing activities 296,772 (405,241 )
Cash flows from investing activities:
Purchases of property, plant, and equipment (66,888 ) (110,219 )

Cash proceeds from sales of property, plant and equipment

12,015 13,157
Acquisitions and investments, net of cash acquired (69,333 ) (314,941 )
Cash proceeds from divestiture activities 11,785 14,318
Net cash flows used for investing activities (112,421 ) (397,685 )
Effect of exchange rates on cash and cash equivalents (5,755 ) (11,637 )
Cash and cash equivalents:
- increase 148,181 303,472
- at beginning of period 943,921 640,449
- at end of period $ 1,092,102 $ 943,921
AVNET, INC.
SEGMENT INFORMATION
(MILLIONS)
FOURTH QUARTERS ENDED FISCAL YEARS ENDED
JULY 3, JUNE 27, JULY 3, JUNE 27,
SALES: 2010 2009 2010 2009
Electronics Marketing $ 3,124.9 $ 2,127.4 $ 10,966.8 $ 9,192.8
Technology Solutions 2,088.9 1,638.0 8,193.4 7,037.1
Consolidated $ 5,213.8 $ 3,765.4 $ 19,160.2 $ 16,229.9
OPERATING INCOME (LOSS):
Electronics Marketing $ 173.8 $ 57.1 $ 491.6 $ 354.5
Technology Solutions 62.2 41.2 251.7 201.4
Corporate (18.9 ) (13.0 ) (82.3 ) (64.5 )
217.1 85.3 661.0 491.4
Impairment charges - (62.3 ) - (1,411.1 )

Restructuring, integration and other charges

- (43.5 ) (25.4 ) (99.3 )

Consolidated

$ 217.1 ($20.5 ) $ 635.6 ($1,019.0 )

AVNET, INC.
NOTES TO CONSOLIDATED STATEMENTS OF OPERATIONS
FOURTH QUARTER AND FISCAL YEAR 2010

(1) The Company recognized impairment charges of $62,282,000 pre- and after tax and $0.41 per share in the fourth quarter of fiscal 2009 and $1,411,127,000 pre-tax, $1,376,983,000 after tax and $9.13 per share for the full fiscal year 2009.

In the second quarter of fiscal 2009, due to a steady decline in the Company's market capitalization primarily related to the global economic downturn, the Company determined an interim impairment test was necessary. Based on the test results, the Company recognized a non-cash goodwill impairment charge of $1,317,452,000 pre-tax, $1,283,308,000 after tax and $8.51 per share to write off all goodwill related to its EM Americas, EM Asia, TS EMEA and TS Asia reporting units. The Company also evaluated the recoverability of its long-lived assets at each of the four reporting units where goodwill was deemed to be impaired. Based upon this evaluation, the Company recognized a non-cash intangible asset impairment charge of $31,393,000 pre- and after tax and $0.21 per share. The non-cash charges had no impact on the Company's compliance with debt covenants, its cash flows or available liquidity, but did have a material impact on its consolidated financial statements.

During the fourth quarter of fiscal 2009, the Company performed its annual goodwill impairment test which indicated that three of its six reporting units, including EM Asia and TS EMEA, continued to have fair values below their carrying values. As a result, the Company was required to recognize the impairment of additional goodwill which arose subsequent to the second quarter of fiscal 2009 in the EM Asia and TS EMEA reporting units. Of the non-cash goodwill impairment charges of $62,282,000 pre- and after tax and $0.41 per share recognized in the fourth quarter of fiscal 2009, $41,433,000 related to the recently acquired business in Japan, which was assigned to the EM Asia reporting unit. Accounting standards require goodwill from an acquisition to be assigned to a reporting unit and also requires goodwill to be tested on a reporting unit level, not by individual acquisition. As noted above, the fourth quarter annual impairment analysis indicated that the fair value of the EM Asia reporting unit continued to be below its carrying value. As a result, the goodwill from the acquisition was required to be impaired. The remaining $20,849,000 of the impairment charges related to additional goodwill in the TS EMEA reporting unit primarily as a result of final acquisition adjustments during the purchase price allocation period related to an acquisition for which the goodwill had been fully impaired in the second quarter of fiscal 2009.

(2) Results for the full fiscal year 2010 included restructuring, integration and other charges which totaled $25,419,000 pre-tax, $18,789,000 after tax and $0.12 per share on a diluted basis. Restructuring costs of $15,991,000 pre-tax related to the remaining cost reductions that began in fiscal 2009 and consisted of severance, facility exit costs and fixed asset write-downs associated with the exited facilities. The Company also recognized $2,931,000 of integration costs associated with acquired 14

businesses, $6,477,000 pre-tax for a value-added tax exposure in Europe related to an audit of prior years, $3,261,000 of other charges including acquisition-related costs and a credit of $3,241,000 related to the reversal of restructuring reserves established in prior periods.

Results for the fourth quarter of fiscal 2009 included restructuring, integration and other items amounting to $43,523,000 pre-tax, $25,304,000 after tax and $0.17 per share. Restructuring and integration charges of $46,720,000 pre-tax consisted primarily of severance and costs to exit certain facilities related to the Company's previously announced cost reduction actions and also included integration costs of recently acquired businesses. Other items included income of $3,197,000 pre-tax related to acquisition adjustments recognized after the end of the purchase price allocation period.

Results for the full fiscal year 2009 included restructuring, integration and other charges which totaled $99,342,000 pre-tax, $65,310,000 after tax and $0.43 per share. Restructuring and integration charges amounted to $93,622,000 pre-tax, loss on investments totaled $3,091,000 pre-tax and other items included income of $1,201,000 pre-tax related to acquisition adjustments after the purchase price allocation period. The Company recognized intangible asset amortization expense of $3,830,000 related to the completion of the valuation of identifiable intangible assets for several acquisitions which closed during the prior fiscal year.

(3) During fiscal 2010, the Company adopted authoritative guidance which changes the accounting for convertible debt that may be settled in cash. Upon adoption, there was no impact to the fiscal 2010 consolidated financial statements because the Company's $300.0 million 2% Convertible Senior Debentures, to which this standard applies, were extinguished in March of fiscal 2009. However, due to the required retrospective application to prior periods through March 2009, the Company adjusted prior year comparative financial statements which resulted in incremental pre-tax non-cash interest expense of $12,185,000 in addition to the originally reported interest expense of $66,481,000 for fiscal 2009 and recognized a reduction in pre-tax deferred financing amortization cost of $291,000 for fiscal 2009 The total impact of the retrospective application on fiscal 2009 was incremental charges of $11,894,000 pre-tax, $7,250,000 after tax and $0.05 per share on a diluted basis.

(4) In fiscal 2010 and 2009, the Company recognized a gain on sale of assets as a result of certain earn-out provisions associated with the sale of the Company's prior equity investment in Calence LLC. In fiscal 2010, the gain amounted to $8,751,000 pre-tax, $5,370,000 after tax and $0.03 per share on a diluted basis. In the fourth quarter and fiscal year 2009, the gain amounted to $14,318,000 pre-tax, $8,727,000 after tax and $0.06 per share.

(5) In fiscal 2010, the Company recognized a net increase in taxes of $842,000 and $0.01 per share on a diluted basis, related to adjustments for prior year tax returns and additional tax reserves, net of a benefit from a favorable income tax audit settlement. 15

During fiscal 2009, the Company recognized a net tax benefit of $21,672,000, or $0.14 per share, primarily related to the settlement of income tax audits in Europe.

SOURCE: Avnet, Inc.

Investor Relations Contact:
Avnet, Inc.
Vincent Keenan
Investor Relations
(480) 643-7053
investorrelations@avnet.com

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