AVNET ANNOUNCES REDEMPTION OF 9 3/4% NOTES DUE FEBRUARY 15, 2008
Phoenix, AZ -- Avnet, Inc. (NYSE:AVT) today announced that it has notified JPMorgan, as trustee, that the Company has elected to redeem on October 12, 2006, all of its outstanding 9¾% Notes due February 15, 2008, at a make-whole redemption price calculated to the redemption date in accordance with the terms of the indenture covering the notes, plus accrued interest thereon to the date of redemption. Currently, $361.36 million in principal amount of the 9¾% Notes is outstanding.
The Company will fund the redemption and related costs with proceeds from the recently completed offering of $300 million aggregate principal amount of the 6.625% Notes due 2016, together with other available liquidity.
The Company also announced that it intends to terminate $200 million in interest rate swaps related to the 9¾% Notes by the end of the first fiscal quarter ending September 30, 2006.
Based on the terms of the indenture and all of the information available today, the Company expects to record in the first fiscal quarter fiscal 2007 a debt extinguishment charge in the range of $25 million - $27 million pre-tax, or approximately $0.10 - $0.11 per diluted share, for the premium to be paid to the holders of the 9¾% Notes, the costs related to the termination of interest rate swaps and the write-off of certain deferred financing costs.
Upon completion of the redemption, Avnet expects to reduce annual interest expense by approximately $18 million - $20 million pre-tax and $11 million - $12 million after tax, or $0.08 per share on a diluted basis.
Forward-Looking Statements
This press release contains certain 'forward-looking statements' within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements are based on management's current expectations and are subject to uncertainty and changes in factual 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 or business prospects. Actual results may vary materially from the expectations contained in the forward-looking statements.
About Avnet
Avnet, Inc. (NYSE:AVT) is one of the largest distributors of electronic components, computer products and technology services and solutions with more than 250 locations serving 70 countries worldwide. The company markets, distributes and optimizes the supply-chain and provides design-chain services for the products of the world's leading electronic component suppliers, enterprise computer manufacturers and embedded subsystem providers. Avnet brings a breadth and depth of capabilities, such as maximizing inventory efficiency, managing logistics, assembling products and providing engineering design assistance for its 100,000 customers, accelerating their growth through cost-effective, value-added services and solutions.
CONTACT: Avnet, Inc.
Vincent Keenan
Investor Relations
(480) 643-7053
investorrelations@avnet.com