Avnet, Inc.
Apr 25, 2013

Avnet, Inc. Reports Third Quarter Fiscal Year 2013 Results

Continues on Path Towards Long-Term Goals

PHOENIX--(BUSINESS WIRE)-- Avnet, Inc. (NYSE:AVT) today announced results for the third quarter fiscal year 2013 ended March 30, 2013.

Q3 Fiscal 2013 Results

       
THIRD QUARTERS ENDED
 
March 30, March 31,
  2013   2012 Change
$ in millions, except for per share data
Sales $ 6,298.7 $ 6,280.6 0.3 %
 
GAAP Operating Income 167.6 216.8 -22.7 %
Adjusted Operating Income (1) 195.0 235.4 -17.2 %
 
GAAP Net Income 86.2 147.6 -41.6 %
Adjusted Net Income (1) 125.4 151.6 -17.3 %
 
 
GAAP Diluted EPS $ 0.62 $ 1.00 -38.0 %
Adjusted Diluted EPS (1) $ 0.90 $ 1.03 -12.6 %
 

(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, "Our team delivered both top and bottom line results that met our expectations and were generally in line with normal seasonal patterns while we continue to navigate through an ongoing uneven economic recovery. On a regional basis, both operating groups experienced year-over-year organic revenue declines in the higher-margin western regions for the fifth consecutive quarter. Strongly influenced by this, our adjusted operating income margin declined 65 basis points year over year and adjusted earnings per share declined 12.6%. As a result, we are continuing to drive actions for margin improvement including new annualized cost reductions of approximately $40 million that are expected to be completed by the end of our fourth fiscal quarter. This will now bring our cumulative cost reductions in fiscal 2013 to approximately $140 million. While these cost reductions are designed to contribute to improving our operating income margins, the rate of improvement will depend on market trends going forward. We remain positioned to leverage future growth into higher margins and returns, and are committed to drive continued progress toward our long-term goals across our portfolio no matter what course the recovery takes."

Avnet Electronics Marketing Results

        Year-over-Year Growth Rates
Q3 FY13 Reported   Pro Forma
Revenue Revenue Revenue
(in millions)
EM Total $ 3,797.2 1.1 % -2.2 %
Excluding FX (1) 1.6 % -1.7 %
Americas $ 1,320.1 -9.5 % -12.3 %
EMEA $ 1,100.1 0.8 % -0.7 %

Excluding FX (1)

0.0 % -1.4 %

 

Asia $ 1,377.0 14.1 % 8.4 %
 
 
Q3 FY13 Q3 FY12 Change
Operating Income $ 162.1 $ 194.3 -16.6 %
Operating Income Margin 4.3 % 5.2 % -90 bps
 

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

Mr. Hamada added, "In the March quarter, EM's pro forma revenue increased 2.9% sequentially, which is below the low end of our typical seasonal growth of 4% to 7%. The EMEA region delivered its typically strong March quarter as pro forma revenue grew 18% sequentially in constant dollars while the Americas region was up 3% and Asia declined 8%. The seasonal mix shift to the western regions and the related gross profit margin improvement combined to drive operating income up 16% sequentially as operating income margin improved 46 basis points to 4.3%. On a year-over-year basis, operating income margin was down 90 basis points primarily due to the slower pace of recovery in the western regions and increased competitive pressure in the EMEA region. While our book to bill ratio closed slightly above parity in all three regions, we continue to operate in a supply chain environment characterized by relatively short and stable lead times that encourages customers to take a conservative approach to managing inventory. As previously mentioned, we stay committed to portfolio actions that align resources with local market conditions and continue our progress toward our long-term goals."

Avnet Technology Solutions Results

      Year-over-Year Growth Rates
Q3 FY13 Reported   Pro Forma
Revenue Revenue Revenue
(in millions)
TS Total $ 2,501.5 -0.9 % -8.4 %
Excluding FX (1) -0.8 % -8.3 %
Americas $ 1,300.1 -5.1 % -7.6 %
EMEA $ 783.0 5.1 % -14.6 %
Excluding FX (1) 5.1 % -14.6 %
Asia $ 418.4 2.2 % 3.1 %
 
 
Q3 FY13 Q3 FY12 Change
Operating Income $ 62.8 $ 67.9 -7.5 %
Operating Income Margin 2.5 % 2.7 % -18 bps
 

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

Mr. Hamada further added, "Even as TS experienced its typical sequential decline coming off the seasonally strong December quarter, pro forma revenue declined over 8% year over year due to continued sluggish growth in the western regions. Pro forma revenue in the EMEA region declined 15% year over year while the Americas region was down 8%. Even with this revenue decline in the western regions, TS operating income margin declined only 18 basis points year over year as both EMEA and the Americas region increased gross profit margin and benefitted from cost reduction actions taken in response to business conditions. In an IT market experiencing disparate revenue trends by region, TS continues to make good progress toward our long-term goals while positioning for future growth. In the Americas, our VAR partners are embracing the investments we have made in new services businesses while the integration of Magirus' customer facing resources in Europe provides an enhanced platform to capitalize on cross selling opportunities including enhanced offerings in converged solutions. With expanded capabilities focused on high growth technologies and a broader suite of services offerings, we feel strongly that we can increase the value we bring to the channel and build on this performance."

Cash Flow/Buyback

Kevin Moriarty, Chief Financial Officer, stated, "Even though the macroeconomic environment remains a challenge, the team has done an effective job of managing working capital and continues to be proactive on efficiency and expense actions. Electronics Marketing's continued working capital discipline was somewhat offset by the typical seasonal usage at Technology Solutions resulting in overall cash flow generated from operations of $22 million for the quarter. This brings cash flow generated from operations to $689 million over the last four quarters. Even though the end markets continue to be challenging, our profitability and consistent cash flow generation remain strong, providing us with opportunities to capitalize on new value-creating acquisitions as well as future investments in our own stock."

Outlook for 4th Quarter of Fiscal 2013 Ending on June 30, 2013

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 fourth quarter of fiscal 2013 is $1.31 to €1.00. This compares with an average exchange rate of $1.28 to €1.00 in the fourth quarter of fiscal 2012 and $1.32 to €1.00 in the third quarter of fiscal 2013.

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," 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 document 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 document). 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).

Any 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 2013

  Third Quarter Ended Fiscal 2013
            Diluted
Op Income Pre-tax Net Income EPS
  $ in thousands, except per share data
GAAP results $ 167,610 $ 144,375 $ 86,196 $ 0.62
Restructuring, integration and other charges 27,341 27,341 25,786 0.18
Income tax adjustments   -   -   13,371   0.10
Total adjustments   27,341   27,341   39,157   0.28
Adjusted results $ 194,951 $ 171,716 $ 125,353 $ 0.90
 

Items impacting the third quarter of fiscal 2013 consisted of the following:

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 13,691 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     4,063     0.03  
Adjusted results $ 235,383 $ 215,072   $ 151,625   $ 1.03  
 

Items impacting the third quarter of fiscal 2012 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 2012 (ii) the impact of a divestiture of a small business in TS Asia, and (iii) the impact of the transfer of a business from TS Americas to EM Americas, which did not have an impact to Avnet on a consolidated basis but did impact the pro forma sales for the groups by approximately $7 million in the third quarter of fiscal 2012. Sales taking into account the combination of these adjustments are referred to as "pro forma sales" or "organic sales."

    Revenue     Acquisition / Divested   Pro forma
as Reported Revenue Revenue
(in thousands)
Q1 Fiscal 2013

 

$ 5,870,057 $ 222,785 $ 6,092,842
Q2 Fiscal 2013

 

6,699,465 22,954 6,722,419
Q3 Fiscal 2013

 

  6,298,699   -   6,298,699
YTD Fiscal year 2013

 

$ 18,868,221 $ 245,739 $ 19,113,960
 
Q1 Fiscal 2012

 

$ 6,426,006 $ 420,232 $ 6,846,238
Q2 Fiscal 2012

 

6,693,573 426,351 7,119,924
Q3 Fiscal 2012

 

6,280,557 331,967 6,612,524
Q4 Fiscal 2012

 

  6,307,386   248,589   6,555,975
Fiscal year 2012

 

$ 25,707,522 $ 1,427,139 $ 27,134,661
 

"Acquisition Revenue" as presented in the preceding table includes the effects of acquisitions and divestitures that have occurred subsequent to December 31, 2011.

ROWC, ROCE and WC Velocity

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

        Q3 FY 13     Q3 FY 12
 
Sales

 

6,298,699 6,280,557
Sales, annualized (a) 25,194,797 25,122,226
 
Adjusted operating income (1)

 

194,951 235,383
Adjusted operating income, annualized (b) 779,806 941,532
Adjusted effective tax rate (2)

 

27.30 % 29.43 %
Adjusted operating income, net after tax (c) 566,919 664,439
 
Average monthly working capital
Accounts receivable

 

4,806,901 4,542,093
Inventory

 

2,328,051 2,540,034
Accounts payable

 

(3,233,582 ) (3,172,879 )
Average working capital (d) 3,901,370   3,909,248  
 
Average monthly total capital (e) 5,376,597   5,179,911  
 
 
ROWC = (b) / (d)

 

19.99 % 24.08 %
WC Velocity = (a) / (d)

 

6.46 6.43
ROCE = (c ) / (e)

 

10.54 % 12.83 %
 

(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 FY12) 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.

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 globally. Avnet accelerates its partners' success by connecting the world's leading technology suppliers with a broad base of customers by providing cost-effective, value-added services and solutions. For the fiscal year ended June 30, 2012, Avnet generated revenue of $25.7 billion. For more information, visit www.avnet.com. (AVT_IR)

AVNET, INC.
FINANCIAL HIGHLIGHTS
(MILLIONS EXCEPT PER SHARE DATA)
         
 
 
THIRD QUARTERS ENDED
 
MARCH 30, MARCH 31,
2013 * 2012 *
 
Sales $ 6,298.7 $ 6,280.6
 
Income before income taxes 144.4 200.9
 
Net income 86.2 147.6
 
Net income per share:
Basic $ 0.63 $ 1.02
Diluted $ 0.62 $ 1.00
 
 
 
 
NINE MONTHS ENDED
 
MARCH 30, MARCH 31,
2013 * 2012 *
 
Sales $ 18,868.2 $ 19,400.1
 
Income before income taxes 422.1 604.8
 
Net income 324.0 433.6
 
Net income per share:
Basic $ 2.34 $ 2.93
Diluted $ 2.31 $ 2.88
 
*

See Notes to Consolidated Statements of Operations included herein.

 
AVNET, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(THOUSANDS EXCEPT PER SHARE DATA)
       
 
 
THIRD QUARTERS ENDED NINE MONTHS ENDED
 
MARCH 30, MARCH 31, MARCH 30, MARCH 31,
2013 * 2012 * 2013 * 2012 *
 
Sales $ 6,298,699 $ 6,280,557 $ 18,868,221 $ 19,400,136
Cost of sales   5,542,676     5,526,753     16,659,358     17,108,601  
 
Gross profit 756,023 753,804 2,208,863 2,291,535
 
Selling, general and administrative
expenses 561,072 518,421 1,656,052 1,567,694
Restructuring, integration
and other charges (Note 1 *) 27,341 18,609 89,655 53,114
       
Operating income 167,610 216,774 463,156 670,727
 
Other income (expense), net 4,106 3,245 6,649 (1,389 )
Interest expense (27,341 ) (23,556 ) (79,029 ) (67,621 )
Gain on bargain purchase and other (Note 2 *) - 4,460 31,350 3,061
       
Income before income taxes 144,375 200,923 422,126 604,778
 
Income tax provision 58,179 53,361 98,144 171,163
       
Net income $ 86,196   $ 147,562   $ 323,982   $ 433,615  
 
Net earnings per share:
Basic $ 0.63   $ 1.02   $ 2.34   $ 2.93  
Diluted $ 0.62   $ 1.00   $ 2.31   $ 2.88  
 
Shares used to compute earnings
per share:
Basic   137,102     145,126     138,215     148,195  
Diluted   139,015     147,245     140,316     150,472  
 
* See Notes to Consolidated Statements of Operations included herein.
 
AVNET, INC.
CONSOLIDATED BALANCE SHEETS
(THOUSANDS)
    MARCH 30,     JUNE 30,
  2013   2012
 
Assets:
Current assets:
Cash and cash equivalents $ 820,924 $ 1,006,864
Receivables, net 4,778,068 4,607,324
Inventories 2,284,724 2,388,642
Prepaid and other current assets   220,628   251,609
Total current assets 8,104,344 8,254,439
Property, plant and equipment, net 486,314 461,230
Goodwill 1,253,711 1,100,621
Other assets   367,129   351,576
 
Total assets   10,211,498   10,167,866
 
Less liabilities:
Current liabilities:
Borrowings due within one year 578,554 872,404
Accounts payable 3,175,466 3,230,765
Accrued expenses and other   686,570   695,483
Total current liabilities 4,440,590 4,798,652
Long-term debt 1,501,050 1,271,985
Other long-term liabilities   186,156   191,497
 
Total liabilities   6,127,796   6,262,134
 
Shareholders' equity $ 4,083,702 $ 3,905,732
 
AVNET, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(THOUSANDS)
               
 
NINE MONTHS ENDED
MARCH 30, MARCH 31,
  2013     2012  
Cash flows from operating activities:
 
Net income $ 323,982 $ 433,615
 
Non-cash and other reconciling items:
Depreciation and amortization 89,128 70,775
Deferred income taxes 9,037 28,438
Stock-based compensation 35,923 28,786
Gain on bargain purchase and other (31,350 ) (3,061 )
Other, net 57,800 47,473
 
Changes in (net of effects from businesses acquired):
Receivables (2,897 ) 75,999
Inventories 192,244 75,751
Accounts payable (175,909 ) (352,108 )
Accrued expenses and other, net   (68,544 )   (136,232 )
 
Net cash flows provided by operating activities   429,414     269,436  
 
Cash flows from financing activities:
Issuance of notes in public offering, net of issuance cost 349,258 -
(Repayments of) borrowings under accounts receivable securitization program, net (259,000 ) 590,000
(Repayments of) proceeds from bank debt, net (191,252 ) (11,527 )
(Repayment of) proceeds from other debt, net (523 ) (493 )
Repurchases of common stock (207,192 ) (248,840 )
Other, net   4,499     5,555  
 
Net cash flows provided by (used for) financing activities   (304,210 )   334,695  
 
Cash flows from investing activities:
Purchases of property, plant, and equipment (75,415 ) (95,388 )
Cash proceeds from sales of property, plant and
equipment 289 580
Acquisitions of operations, net of cash acquired (244,062 ) (229,524 )
Proceeds from divestitures, net of cash divested   3,613     -  
 
Net cash flows used for investing activities   (315,575 )   (324,332 )
 
Effect of exchange rates on cash and cash equivalents   4,431     (15,032 )
 
Cash and cash equivalents:
- Increase (decrease) (185,940 ) 264,767
- at beginning of period   1,006,864     675,334  
- at end of period $ 820,924   $ 940,101  
 
AVNET, INC.
SEGMENT INFORMATION
(MILLIONS)
           
 
 
THIRD QUARTERS ENDED NINE MONTHS ENDED
 
 
MARCH 30, MARCH 31, MARCH 30, MARCH 31,
SALES:   2013     2012     2013     2012  
 
Electronics Marketing $ 3,797.2 $ 3,756.9 $ 11,123.8 $ 11,168.7
 
Technology Solutions 2,501.5 2,523.7 7,744.4 8,231.4
       
Consolidated $ 6,298.7   $ 6,280.6   $ 18,868.2   $ 19,400.1  
 
 
 
 
OPERATING INCOME (LOSS):
 
Electronics Marketing $ 162.1 $ 194.3 $ 448.5 $ 560.3
 
Technology Solutions 62.8 67.9 205.2 251.9
 
Corporate   (30.0 )   (26.8 )   (100.9 )   (88.4 )
 
 
$ 194.9 $ 235.4 $ 552.8 $ 723.8
 
Restructuring, integration and other charges   (27.3 )   (18.6 )   (89.6 )   (53.1 )
 
Consolidated $ 167.6   $ 216.8   $ 463.2   $ 670.7  
 

AVNET, INC.

NOTES TO CONSOLIDATED STATEMENTS OF OPERATIONS

THIRD QUARTER AND FIRST NINE MONTHS OF FISCAL 2013

(1) The results for the third quarter of fiscal 2013 included restructuring, integration and other charges, which totaled $27,341,000 pre-tax, $25,786,000 after tax and $0.18 per share on a diluted basis. Restructuring charges included therein were $23,874,000 pre-tax consisting of $14,627,000 for severance, $2,165,000 for facility exit costs and fixed asset write downs, and other restructuring charges. Other restructuring charges of $7,082,000 related primarily to other onerous lease obligations that have no ongoing benefit to the Company as well as a loss of $6,634,000 recognized in the third quarter of fiscal 2013 from the write-down of the net assets and goodwill associated with the planned exit of a non-integrated business in the EM Americas region that is expected to take place in the fourth quarter of fiscal 2013. Pre-tax integration costs for the third quarter of fiscal 2013 were $14,882,000, of which $8,800,000 related to the exit of two multi-employer pension plans associated with acquired entities in Japan. Acquisition related charges and adjustments for the third quarter of fiscal 2013 were a credit of $10,840,000, consisting primarily of the reversal of an earn-out liability of $11,172,000 for which payment is no longer expected to be incurred. In addition, the Company recorded a credit of $575,000 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 2013 included restructuring, integration and other charges, which totaled $89,655,000 pre-tax, $72,772,000 after tax and $0.52 per share on a diluted basis. Restructuring charges included therein were $70,193,000 pre-tax consisting of $47,822,000 for severance, $14,817,000 for facility exit costs and fixed asset write downs, and other restructuring charges. Other restructuring charges of $7,554,000 related primarily to other onerous lease obligations that have no ongoing benefit to the Company as well as a loss of $6,634,000 recognized in the third quarter of fiscal 2013 from the write-down of the net assets and goodwill associated with the planned exit of a non-integrated business in the EM Americas region that is expected to take place in the fourth quarter of fiscal 2013. Pre-tax integration costs for the first nine months of fiscal 2013 were $27,506,000, and acquisition transactions resulted in a net credit of $5,048,000, which related to the reversal of an earn-out liability during the third quarter. In addition, the Company recorded a credit of $2,996,000 pre-tax during the first nine months of fiscal 2013 to adjust reserves related to prior year restructuring activity that were no longer required.

Severance charges recorded in the first nine months of fiscal 2013 related to 1,160 employees in sales and business support functions in connection with the cost reduction actions taken in all three regions in both operating groups with employee reductions of approximately 814 in EM, 295 in TS, and 51 in business support functions. Facility exit costs for vacated facilities related to 14 facilities in the Americas, 12 in EMEA and 6 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 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.

(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, during the first nine months of fiscal 2012, the Company recognized a loss of $1,399,000 pre-tax, $854,000 after tax and $0.01 per diluted share 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.

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

Source: Avnet, Inc.

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