Avnet, Inc.
Apr 26, 2012

Avnet, Inc. Reports Third Quarter Fiscal Year 2012 Results

Progress at Both Operating Groups Consistent with Expectations

PHOENIX--(BUSINESS WIRE)-- Avnet, Inc. (NYSE:AVT) today announced results for the third quarter fiscal year 2012 ended March 31, 2012.

   

Q3 Fiscal 2012 Results

Third Quarter Ended
March 31,     April 2,    
2012 2011 Change
  $ in millions, except per share data
Sales $ 6,280.6 $ 6,672.4 -5.9 %
 
GAAP Operating Income $ 216.8 $ 240.7 -10.0 %
Adjusted Operating Income (1) $ 235.4 $ 257.0 -8.4 %
 
GAAP Net Income $ 147.6 $ 151.0 -2.3 %
Adjusted Net Income (1) $ 151.6 $ 169.7 -10.7 %
 
GAAP Diluted EPS $ 1.00 $ 0.98 2.0 %
Adjusted Diluted EPS (1) $ 1.03 $ 1.10 -6.4 %
 
 

(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.

 

Rick Hamada, Chief Executive Officer, commented, "Although the current economic environment and rate of recovery varies in each region, our team was able to deliver results for our third quarter that were in line with our expectations. To put our results in perspective, a year ago we were near the peak of the V-shaped recovery that helped drive strong levels of profitability at Electronics Marketing and Avnet in total. The subsequent supply chain inventory correction, which has led to negative organic growth at EM in the first three quarters of this fiscal year, appears to be nearing an end as EM's sequential revenue growth has returned to a more normalized seasonal level and its book to bill ratio finished at parity for the quarter. In addition to their sequential revenue growth of 4.5%, the EM team grew operating income 2.5 times faster than revenue and return on working capital increased 379 basis points from the December quarter. At Technology Solutions, which was coming off its typically strong December quarter, the continued focus on improving performance and the benefits from restructuring initiatives resulted in year-over-year operating income growth of 19% even though revenue declined $223 million, or 8%. Additionally, TS improved both gross profit and operating income margins 80 basis points and 60 basis points, respectively, from the year ago quarter."

 

Avnet Electronics Marketing Results

        Year-over-Year Growth Rates
Q3 FY12 Reported     Pro forma
Revenue Revenue Revenue (2)
(in millions)
 
Total

 

$ 3,756.8 -4.3 % -10.0 %
Excluding FX (1)

 

-3.1 % -8.9 %
Americas

 

$ 1,458.4 10.8 % -0.4 %
EMEA

 

$ 1,091.7 -17.8 % -17.9 %
Excluding FX (1)

 

-14.2 % -14.3 %
Asia

 

$ 1,206.7 -5.8 % -12.6 %
 
Q3 FY12 Q3 FY11 Change
Operating Income

 

$ 194.3   $ 224.8   $ (30.5 )
Operating Income Margin

 

  5.17 %   5.73 % -56 bps
 

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

(2) Pro forma revenue is defined later in this release.
 

Mr. Hamada added, "For EM, the first three quarters of fiscal 2012 were all about adjusting to the inventory correction that negatively impacted all three regions. With more normal seasonal growth trends returning in the March quarter, particularly in the western regions, EM grew operating income 11%, improved working capital velocity 10% and increased economic profit 44% from the December quarter. More importantly, for the full nine months, gross profit margins have remained relatively steady and operating income margin was back within our target range while inventory levels at the end of the quarter were consistent with our growth expectations going forward. The inventory correction had a more muted impact on our financial performance as a result of EM's vigilant control of expense and working capital, combined with increased traction in organic growth initiatives. These actions put us in a strong competitive position across our end markets as we begin to exit this correction. With the book to bill strengthening across all three regions, we expect to build on this performance and grow faster than the markets we serve and translate that growth into higher EPS and increased shareholder value."

 

Avnet Technology Solutions Results

        Year-over-Year Growth Rates
Q3 FY12 Reported     Pro forma
Revenue Revenue Revenue (2)
(in millions)
 
Total

 

$ 2,523.7 -8.1 % -5.2 %
Excluding FX (1)

 

-7.3 % -4.3 %
Americas

 

$ 1,369.6 -9.1 % -2.2 %
EMEA

 

$ 744.8 -12.1 % -14.3 %
Excluding FX (1)

 

-9.0 % -11.3 %
Asia

 

$ 409.3 4.0 % -
 
Q3 FY12 Q3 FY11 Change
Operating Income

 

$ 67.9   $ 57.3   $ 10.6  
Operating Income Margin

 

  2.69 %   2.09 % 60 bps
 

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

(2) Pro forma growth rate for Asia is not applicable.
 

Mr. Hamada further added, "TS continued the progress of the past two quarters as improved margins and returns in EMEA and continued strong performance in the Americas combined to drive a third consecutive quarter of year-over-year improvement in margins and returns. In EMEA, our continuing focus on profitable growth and restructuring initiatives combined to drive operating income up 69% from the year ago quarter even as pro forma sales in constant currency declined 11% as gross profit and operating margins increased 119 basis points and 87 basis points, respectively. In the Americas, gross profit and operating margins improved 94 basis points and 67 basis points, respectively, driving return on working capital up 669 basis points year over year; well above our target. We further expanded our breadth of services focused on solutions selling with the acquisition of Ascendant Technology while strengthening our lifecycle management offerings with the addition of Canvas Systems. As demand for datacenter solutions and cloud technology create more opportunities for the channel, we continue to increase the value we deliver to our VAR partners in mature markets and expand the breadth of products and services we can offer in higher growth developing markets."

Cash Flow/Buyback

Ray Sadowski, Chief Financial Officer, stated, "Electronics Marketing's strong cash flow generation driven by the combination of improved profitability and higher working capital velocity was somewhat offset by the typical seasonal usage at Technology Solutions resulting in overall cash flow generated from operations of $24 million for the quarter. This brings cash flow from operations during the last four quarters to $551 million. We also continued investing in value-creating acquisitions as we completed five acquisitions during the quarter."

Outlook For 4th Quarter of Fiscal 2012 Ending on June 30, 2012

The above adjusted diluted 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 fourth quarter of fiscal 2012 is $1.31 to €1.00. This compares with an average exchange rate of $1.44 to €1.00 in the fourth quarter of fiscal 2011 and $1.31 to €1.00 in the third quarter of fiscal 2012.

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, 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, 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. 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 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 and other items (as defined in the Pro forma (Organic) Revenue section of this release). 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.

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).

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.

 

Third Quarter Fiscal 2012

    Third Quarter Ended Fiscal 2012
            Diluted
Op Income Pre-tax Net Income EPS

 

$ in thousands, except per share data
GAAP results $ 216,774 $ 200,923 $ 147,562 $ 1.00
Restructuring, integration and other charges 18,609 18,609 13,692 0.10
Gain on bargain purchase - (4,460 ) (4,460 ) (0.03 )
Income tax adjustments   -   -     (5,168 )   (0.04 )
Total adjustments   18,609   14,149     4,064     0.03  
Adjusted results $ 235,383 $ 215,072   $ 151,626   $ 1.03  
 

Items impacting the third quarter of fiscal 2012 consisted of the following:

 

Third Quarter Fiscal 2011

    Third Quarter Ended Fiscal 2011
            Diluted
Op Income Pre-tax Net Income EPS
  $ in thousands, except per share data
GAAP results $ 240,737 $ 213,161 $ 151,031 $ 0.98
Restructuring, integration and other charges 16,273 16,273 11,887 0.08
Loss on investments - 6,308 3,857 0.02
Income tax adjustments   -   -   2,959   0.02
Total adjustments

 

  16,273   22,581   18,703   0.12
Adjusted results $ 257,010 $ 235,742 $ 169,734 $ 1.10
 

Items impacting the third quarter of fiscal 2011 consisted of the following:

Pro Forma (Organic) Revenue

Pro forma or Organic revenue is defined as reported revenue adjusted for (i) the impact of acquisitions by adjusting Avnet's prior periods to include the sales of businesses acquired as if the acquisitions had occurred at the beginning of fiscal 2011; (ii) the impact of a fiscal 2011 divestiture by adjusting Avnet's prior periods to exclude the sales of the business divested as if the divestiture had occurred at the beginning of fiscal 2011; and (iii) the impact of a transfer of the Latin America computing components business from TS Americas to EM Americas that occurred in the first quarter of fiscal 2012, which did not have an impact to Avnet on a consolidated basis but did impact the pro forma sales for the groups by $123 million in the third quarter of fiscal 2011. Sales taking into account the combination of these adjustments is referred to as "pro forma sales" or "organic sales".

           

 

Acquisition /

 

Revenue

Divested

Pro forma

as Reported Revenue Revenue
(in thousands)
Q1 Fiscal 2012

 

$ 6,426,006 $ 121,731 $ 6,547,737
Q2 Fiscal 2012

 

6,693,573 86,014 6,779,587
Q3 Fiscal 2012

 

  6,280,557   11,824   6,292,381
YTD Fiscal year 2012

 

$ 19,400,136 $ 219,569 $ 19,619,705
 
Q1 Fiscal 2011

 

$ 6,182,388 $ 133,550 $ 6,315,938
Q2 Fiscal 2011

 

6,767,495 64,580 6,832,075
Q3 Fiscal 2011

 

6,672,404 176,564 6,848,968
Q4 Fiscal 2011

 

  6,912,126   192,075   7,104,201
Fiscal year 2011

 

$ 26,534,413 $ 566,769 $ 27,101,182
 

"Acquisition Revenue" as presented in the preceding table includes the acquisitions listed below. The preceding table also reflects the divestiture of New ProSys Corp. which occurred in January 2011.

                   
Acquired Business Operating Group Acquisition Date
Unidux EM July 2010
Broadband EM October 2010
Eurotone EM October 2010
Center Cell EM November 2010
itX Group Ltd TS January 2011
Amosdec TS July 2011
Prospect Technology EM August 2011
JC Tally Trading & subsidiary EM August 2011
DE2 EM November 2011
Round2 Tech EM January 2012
Unidux Electronics Limited (Singapore) EM January 2012
Canvas Systems TS January 2012
Pinnacle Data Systems EM January 2012
Acquisition of controlling interest in a non-wholly owned entity EM January 2012
 

ROWC, ROCE and WC Velocity

The following table presents the calculation for ROWC, ROCE and WC velocity (dollars in thousands).

           
 
Q3 FY 12 Q3 FY 11
 
Sales

 

6,280,557 6,672,404
Sales, annualized (a) 25,122,226 26,689,616
 
Adjusted operating income (1)

 

235,383 257,010
Adjusted operating income, annualized (b) 941,532 1,028,042
Adjusted effective tax rate (2)

 

29.35 % 27.97 %
Adjusted operating income, net after tax (c) 665,193 740,499
 
Average monthly working capital (3)
Accounts receivable

 

4,542,093 4,588,626
Inventory

 

2,540,034 2,587,019
Accounts payable

 

(3,172,879 ) (3,288,341 )
Average working capital (d) 3,909,248   3,887,305  
 
Average monthly total capital (3) (e) 5,179,911   4,903,072  
 
 
ROWC = (b) / (d)

 

24.08 % 26.45 %
WC Velocity = (a) / (d)

 

6.43 6.87
ROCE = (c ) / (e)

 

12.84 % 15.10 %
 
 

(1) See reconciliation to GAAP amounts in the preceding tables in this Non-GAAP Financial Information Section.

 

(2) Adjusted effective tax rate is based upon a year-to-date (full fiscal year rate for FY11) calculation excluding restructuring, integration and other charges and tax adjustments as described in the reconciliation to GAAP amounts in this Non-GAAP Financial Information Section.

 
(3) For averaging purposes, the working capital and total capital for Bell Micro was included as of the beginning of fiscal 2011.
 

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), a Fortune 500 Company, 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 2, 2011, Avnet generated revenue of $26.5 billion. For more information, visit www.avnet.com. (AVT_IR)

 
AVNET, INC.
FINANCIAL HIGHLIGHTS
(MILLIONS EXCEPT PER SHARE DATA)
       
 
 

THIRD QUARTERS ENDED

 
MARCH 31, APRIL 2,
2012 * 2011 *
 
Sales $ 6,280.6 $ 6,672.4
 
Income before income taxes 200.9 213.2
 
Net income 147.6 151.0
 
Net income per share:
Basic $ 1.02 $ 0.99
Diluted $ 1.00 $ 0.98
 
 
 
 

NINE MONTHS ENDED

 
MARCH 31, APRIL 2,
2012 * 2011 *
 
Sales $ 19,400.1 $ 19,622.3
 
Income before income taxes 604.8 621.0
 
Net income 433.6 430.2
 
Net income per share:
Basic $ 2.93 $ 2.82
Diluted $ 2.88 $ 2.79
 
 

* See Notes to Consolidated Statements of Operations at end of the release.

 
 
AVNET, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(THOUSANDS EXCEPT PER SHARE DATA)
             
 
 
THIRD QUARTERS ENDED NINE MONTHS ENDED
 
MARCH 31, APRIL 2, MARCH 31, APRIL 2,
2012 * 2011 * 2012 * 2011 *
 
Sales $ 6,280,557 $ 6,672,404 $ 19,400,136 $ 19,622,287
Cost of sales   5,526,753     5,885,789     17,108,601     17,339,333  
 
Gross profit 753,804 786,615 2,291,535 2,282,954
 

 

Selling, general and administrative expenses

518,421 529,605 1,567,694 1,546,701

Restructuring, integration and other charges (Note 1 *)

18,609 16,273 53,114 73,452
       
Operating income 216,774 240,737 670,727 662,801
 
Other income (expense), net 3,245 2,289 (1,389 ) 5,268
Interest expense (23,556 ) (23,557 ) (67,621 ) (69,830 )
Gain on bargain purchase and other (Note 2 *) 4,460 (6,308 ) 3,061 22,715
       
Income before income taxes 200,923 213,161 604,778 620,954
 
Income tax provision 53,361 62,130 171,163 190,715
       
Net income $ 147,562   $ 151,031   $ 433,615   $ 430,239  
 
Net earnings per share:
Basic $ 1.02   $ 0.99   $ 2.93   $ 2.82  
Diluted $ 1.00   $ 0.98   $ 2.88   $ 2.79  
 

Shares used to compute earnings per share:

Basic   145,126     152,859     148,195     152,333  
Diluted   147,245     154,611     150,472     154,172  
 

* See Notes to Consolidated Statements of Operations at end of the release.

 
 
AVNET, INC.
CONSOLIDATED BALANCE SHEETS
(THOUSANDS)
       
 
 
 
MARCH 31, JULY 2,
  2012   2011
 
Assets:
Current assets:
Cash and cash equivalents $ 940,101 $ 675,334
Receivables, net 4,658,805 4,764,293
Inventories 2,490,285 2,596,470
Prepaid and other current assets   216,058   191,110
Total current assets 8,305,249 8,227,207
Property, plant and equipment, net 458,118 419,173
Goodwill 1,081,686 885,072
Other assets   312,504   374,117
 
Total assets   10,157,557   9,905,569
 
Less liabilities:
Current liabilities:
Borrowings due within one year 934,450 243,079
Accounts payable 3,237,490 3,561,633
Accrued expenses and other   653,785   673,016
Total current liabilities 4,825,725 4,477,728
Long-term debt 1,183,793 1,273,509
Other long-term liabilities   96,260   98,262
 
Total liabilities   6,105,778   5,849,499
 
Shareholders' equity $ 4,051,779 $ 4,056,070
 
 
AVNET, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(THOUSANDS)
       
 
NINE MONTHS ENDED
MARCH 31, APRIL 2,
  2012     2011  
Cash flows from operating activities:
 
Net income $ 433,615 $ 430,239
 
Non-cash and other reconciling items:
Depreciation and amortization 70,775 59,100
Deferred income taxes 28,438 (12,284 )
Stock-based compensation 28,786 25,015
Gain on bargain purchase and other (3,061 ) (22,715 )
Other, net 47,473 45,348
 
Changes in (net of effects from businesses acquired):
Receivables 75,999 (391,624 )
Inventories 75,751 (262,696 )
Accounts payable (352,108 ) 45,038
Accrued expenses and other, net   (136,232 )   81,209  
 
Net cash flows provided by (used for) operating activities   269,436     (3,370 )
 
Cash flows from financing activities:
Borrowings under accounts receivable securitization program, net 590,000 485,000
Repayment of notes - (109,600 )
(Repayment of) proceeds from bank debt, net (11,527 ) 42,238
(Repayment of) proceeds from other debt, net (493 ) 13,572
Repurchases of common stock (248,840 ) -
Other, net   5,555     3,231  
 
Net cash flows provided by financing activities   334,695     434,441  
 
Cash flows from investing activities:
Purchases of property, plant, and equipment (95,388 ) (105,221 )

Cash proceeds from sales of property, plant and equipment

580 2,356
Acquisitions of operations, net of cash acquired (229,524 ) (690,997 )
Cash proceeds from divestitures   -     10,458  
 
Net cash flows used for investing activities   (324,332 )   (783,404 )
 
Effect of exchange rates on cash and cash equivalents   (15,032 )   41,980  
 
Cash and cash equivalents:

- Increase (decrease)

264,767 (310,353 )

- at beginning of period

  675,334     1,092,102  
 

- at end of period

$ 940,101   $ 781,749  
 
               
AVNET, INC.
SEGMENT INFORMATION
(MILLIONS)
 
 
 
THIRD QUARTERS ENDED NINE MONTHS ENDED
 
 
MARCH 31, APRIL 2, MARCH 31, APRIL 2,
SALES:   2012     2011     2012     2011  
 
Electronics Marketing $ 3,756.9 $ 3,925.2 $ 11,168.7 $ 11,104.5
 
Technology Solutions 2,523.7 2,747.2 8,231.4 8,517.8
       
Consolidated $ 6,280.6   $ 6,672.4   $ 19,400.1   $ 19,622.3  
 
 
 
 
OPERATING INCOME (LOSS):
 
Electronics Marketing $ 194.3 $ 224.8 $ 560.3 $ 600.3
 
Technology Solutions 67.9 57.3 251.9 219.2
 
Corporate   (26.8 )   (25.1 )   (88.4 )   (83.2 )
 
 
$ 235.4 $ 257.0 $ 723.8 $ 736.3
 
Restructuring, integration and other charges   (18.6 )   (16.3 )   (53.1 )   (73.5 )
 
Consolidated $ 216.8   $ 240.7   $ 670.7   $ 662.8  
 

AVNET, INC.
NOTES TO CONSOLIDATED STATEMENTS OF OPERATIONS
THIRD QUARTER AND FIRST NINE MONTHS OF FISCAL 2012

(1) The results for the third quarter of fiscal 2012 included restructuring, integration and other charges which totaled $18,609,000 pre-tax, $13,691,000 after tax and $0.10 per share on a diluted basis. Restructuring charges included therein were $11,217,000 pre-tax consisting of $6,731,000 for severance, $3,118,000 for facility exit costs and fixed asset write downs, and $1,368,000 for other restructuring charges. Integration costs and acquisition transaction costs were $3,988,000 pre-tax and $4,196,000 pre-tax, respectively. In addition, the Company recorded a credit of $793,000 pre-tax primarily to adjust reserves related to prior year restructuring activity which were no longer required.

Results for the first nine months of fiscal 2012 included restructuring, integration and other charges which totaled $53,114,000 pre-tax, $38,463,000 after tax and $0.25 per share on a diluted basis. Restructuring charges included therein were $40,156,000 pre-tax consisting of $26,523,000 for severance, $10,525,000 for facility exit costs and fixed asset write downs and $3,108,000 for other restructuring charges. Integration costs and acquisition transaction costs were $7,438,000 pre-tax and $7,262,000 pre-tax, respectively. In addition, the Company recorded a credit of $1,742,000 pre-tax primarily to adjust reserves related to prior year restructuring activity which were no longer required.

Severance charges recorded in the first nine months of fiscal 2012 related to over 550 employees in sales, administrative and finance functions in connection with the cost reduction actions taken in all three regions in both operating groups with employee reductions of approximately 350 in EM and 200 in TS. Facility exit costs for vacated facilities related to nine facilities in the Americas, five in EMEA and twelve in Asia and consisted of reserves for remaining lease liabilities and the write-down of leasehold improvements and other fixed assets.

The results for the third quarter of fiscal 2011 included restructuring, integration and other charges which totaled $16,273,000 pre-tax, $11,887,000 after tax and $0.08 per share on a diluted basis and were incurred primarily in connection with the acquisitions and integrations of acquired businesses. The charges included restructuring charges consisting of severance of $4,427,000 pre-tax and facility exit related costs, fixed asset write downs and related costs of $3,293,000 pre-tax which were incurred primarily as a result of the integration activities associated with the acquisitions. The Company also recognized integration costs of $7,969,000 pre-tax, acquisition transaction costs of $3,529,000 pre-tax, other charges of $902,000 pre-tax and a reversal of $3,847,000 pre-tax, primarily related to the reversal of restructuring reserves established in prior years which were no longer needed.

Results for the first nine months of fiscal 2011 included restructuring, integration and other charges which totaled $73,452,000 pre-tax, $52,876,000 after tax and $0.34 per share on a diluted basis and consisted of $23,361,000 pre-tax for severance, $16,259,000 pre-tax for facilities related costs, fixed asset write downs and related costs, $24,066,000 pre-tax for integration costs, $15,597,000 pre-tax for transactions costs associated with acquisitions and $1,848,000 pre-tax for other charges as well as a reversal of $7,679,000 pre-tax primarily related to the release of liabilities associated with a prior acquisition and to adjust reserves related to prior year restructuring activity that were no longer needed.

(2) During the third quarter of fiscal 2012, the Company acquired Unidux Electronics Limited (UEL), a Singapore publicly traded electronics component distributor, through a tender offer. The consideration paid was below the fair value of the acquired net assets and, as a result, the Company recognized a gain on bargain purchase of $4,460,000 pre- and after tax and $0.03 per share on a diluted basis.

In addition to the gain on bargain purchase mentioned above, during the first nine months of fiscal 2012, the Company recognized other charges of $1,399,000 pre-tax, $854,000 after tax and $0.01 per share on a diluted basis, which related to a write-down of an investment in a small technology company and the write-off of certain deferred financing costs associated with the early termination of a credit facility.

During the third quarter of fiscal 2011, the Company recognized a loss of $6,308,000 pre-tax, $3,857,000 after tax and $0.02 per share on a diluted basis related to the write down of investments in smaller technology start-up companies.

In addition to the loss mentioned above, during the first nine months of fiscal 2011, the Company recognized a gain on bargain purchase related to the acquisition of Unidux, Inc., a Japanese publicly traded electronics component distributor. The consideration paid was below the fair value of the acquired net assets and, as a result, the Company recognized a gain on bargain purchase of $30,990,000 pre- and after tax, and $0.20 per share on a diluted basis. The Company also recognized other charges of $1,967,000 pre-tax, $1,413,000 after tax and $0.01 per share on a diluted basis primarily related to the write-down of two buildings in EMEA.

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

Source: Avnet, Inc.

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