Investor Relations

Press Release

Avnet Reports Fourth Quarter and Fiscal 2021 Financial Results

August 11, 2021 at 4:05 PM EDT

Corrected on August 17, 2021 from Earnings Release August 11, 2021. The correction relates solely to immaterial non-financial information presented in the press release.

Record fourth quarter sales of $5.2 billion, up 25.7% year over year with diluted EPS of $0.85

Fourth quarter adjusted diluted EPS of $1.12, up 75% year over year

PHOENIX--Aug. 11, 2021-- Avnet, Inc. (Nasdaq: AVT) today announced results for its fourth quarter and fiscal year ended July 3, 2021.

Commenting on the Company’s financial results, Avnet Chief Executive Officer Phil Gallagher stated, “In the fourth quarter, we delivered strong sales growth with record sales in our Electronic Components business and at Farnell, driving operating margin improvement approaching our 3% and 10% near-term targets, respectively. We remain well-positioned across all operating regions and are continuing to capitalize on the strong demand environment to capture additional market opportunities. Avnet’s role at the center of the technology supply chain continues to be more vital than ever. As a result, our focus on providing trusted support to our customers and suppliers is driving robust financial performance which is demonstrated in our results.”

Fiscal Fourth Quarter Key Financial Highlights:

  • Sales of $5.2 billion, up from $4.9 billion sequentially and $4.2 billion in the prior year quarter.
    • On a constant currency basis, sales grew 21.5% year over year and 6.4% sequentially.
  • GAAP diluted earnings per share of $0.85, compared with $0.53 in the prior year quarter.
    • Non-GAAP adjusted diluted earnings per share of $1.12, compared with $0.64 in the prior year quarter.
  • GAAP operating margin of 2.3% increased 221 basis points year over year.
    • Adjusted operating margin of 2.9% increased 187 basis points year over year.
  • Farnell operating margins increased 469 basis points year over year and 224 basis points sequentially to 8.3%.

     

Key Financial Metrics

($ in millions, except per share data)

Fourth Quarter Results (GAAP)

 

 

 

Jun – 21

 

Jun – 20

 

Change Y/Y

 

Mar – 21

 

Change Q/Q

 

Sales

 

$

5,226.7

 

 

$

4,159.7

 

 

25.7

%

 

$

4,916.7

 

 

6.3

%

 

Operating Income

 

 

118.0

 

 

 

1.9

 

 

6,045.9

%

 

 

87.7

 

 

34.6

%

 

Operating Income Margin

 

 

2.3

%

 

 

0.1

%

 

221

bps

 

 

1.8

%

 

48

bps

 

Diluted Earnings Per Share (EPS)

 

$

0.85

 

 

$

0.53

 

 

60.4

%

 

$

1.07

 

 

(20.6

)%

 

Fourth Quarter Results (Non-GAAP)(1)

 

 

 

Jun – 21

 

Jun – 20

 

Change Y/Y

 

Mar – 21

 

Change Q/Q

 

Sales

 

$

5,226.7

 

 

$

4,159.7

 

 

25.7

%

 

$

4,916.7

 

 

6.3

%

 

Adjusted Operating Income

 

 

151.8

 

 

 

42.9

 

 

253.7

%

 

 

110.5

 

 

37.3

%

 

Adjusted Operating Income Margin

 

 

2.9

%

 

 

1.0

%

 

187

bps

 

 

2.3

%

 

65

bps

 

Adjusted Diluted Earnings Per Share (EPS)

 

$

1.12

 

 

$

0.64

 

 

75.0

%

 

$

0.74

 

 

51.4

%

 

Segment and Geographical Mix

 

 

 

Jun – 21

 

Jun – 20

 

Change Y/Y

 

Mar – 21

 

Change Q/Q

 

Electronic Components (EC) Sales

 

$

4,785.3

 

 

$

3,867.6

 

 

23.7

%

 

$

4,520.6

 

 

5.9

%

 

EC Operating Income Margin

 

 

3.1

%

 

 

1.5

%

 

157

bps

 

 

2.6

%

 

47

bps

 

Farnell Sales

 

$

441.4

 

 

$

292.1

 

 

51.1

%

 

$

396.1

 

 

11.4

%

 

Farnell Operating Income Margin

 

 

8.3

%

 

 

3.6

%

 

469

bps

 

 

6.0

%

 

224

bps

 

Americas Sales

 

$

1,194.4

 

 

$

1,149.3

 

 

3.9

%

 

$

1,161.0

 

 

2.9

%

 

EMEA Sales

 

 

1,737.3

 

 

 

1,344.2

 

 

29.3

%

 

 

1,585.6

 

 

9.6

%

 

Asia Sales

 

 

2,295.0

 

 

 

1,666.2

 

 

37.7

%

 

 

2,170.1

 

 

5.8

%

 

TI Sales

 

 

 

Jun – 21

 

Jun – 20

 

Change Y/Y

 

Mar – 21

 

Change Q/Q

 

Sales of TI Products

 

$

-

 

 

$

322.5

 

 

-

%

 

$

1.7

 

 

-

%

 

____________________________
(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.

Additional Fourth Quarter Fiscal 2021 Highlights

  • Returned $22 million to shareholders with dividends paid during the quarter, upon increasing the dividend by 4.8% in the fiscal fourth quarter.
  • Redeemed $300 million of outstanding 3.75% notes in May 2021 and refinanced with $300 million 3.0% notes due May 2031.

Outlook for the First Quarter of Fiscal 2022 Ending on October 2, 2021

 

 

 

 

 

 

Guidance Range

 

Midpoint

Sales

 

$5.1B$5.4B

 

$5.25B

Adjusted Diluted EPS(1)

 

$1.02$1.12

 

$1.07

____________________________
(1)

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

The above guidance is based upon current market conditions and inventory availability. The mid-point of the sales guidance indicates year over year organic growth of 26% after excluding the extra week and sales of TI products in the first quarter of fiscal 2021. The above guidance also excludes amortization of intangibles, any potential restructuring, integration, and other expenses and certain income tax adjustments. The above guidance assumes an effective tax rate of between 19% and 23% as compared to 13.5% in the fourth quarter of fiscal 2021. The above guidance assumes 100 million average diluted shares outstanding and average U.S. Dollar to Euro and GBP currency exchange rates are as shown below:

 

 

 

 

 

 

 

 

 

Q1 Fiscal

 

 

 

 

 

 

2022

 

Q4 Fiscal

 

Q1 Fiscal

 

 

Guidance

 

2021

 

2021

Euro

 

$1.18

 

$1.20

 

$1.17

GBP

 

$1.39

 

$1.40

 

$1.29

Today’s Conference Call and Webcast Details

Avnet will host a quarterly webcast and teleconference today at 1:30 p.m. PT and 4:30 p.m. ET to discuss its financial results and provide a corporate update. The webcast can be accessed via Avnet’s Investor Relations web page at: https://ir.avnet.com.

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 90 days, through November 9 at 5:00 p.m. ET, and can be accessed by dialing: 877-660-6853 or 201-612-7415 and using Conference ID: 13719590.

Forward-Looking Statements

This document contains 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, with respect to the financial condition, results of operations and business of the Company. You can find many of these statements by looking for words like “believes,” “projected”, “plans,” “expects,” “anticipates,” “should,” “will,” “may,” “estimates” or similar expressions. These forward-looking statements are subject to numerous assumptions, risks and uncertainties. You should understand that the following important factors, in addition to those discussed elsewhere in the Company’s Annual Report on Form 10-K for the fiscal year ended June 27, 2020 and subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, could affect the Company’s future results of operations, and could cause those results or other outcomes to differ materially from those expressed or implied in the forward-looking statements: the scope and duration of the COVID-19 pandemic and its impact on global economic systems, access to financial markets and the Company’s employees, operations, customers, and supply chain; competitive pressures among distributors of electronic components; an industry down-cycle in semiconductors; relationships with key suppliers and allocations of products by suppliers; risks relating to the Company’s international sales and operations, including risks relating to the ability to repatriate cash, foreign currency fluctuations, inflation, duties and taxes, and compliance with international and U.S. laws; risks relating to acquisitions, divestitures and investments; adverse effects on the Company’s supply chain, operations of its distribution centers, shipping costs, third-party service providers, customers and suppliers, including as a result of issues caused by natural and weather-related disasters, pandemics and health related crisis, social unrest or warehouse modernization and relocation efforts; risks related to cyber-attacks, other privacy and security incidents and information systems, including related to current or future implementations, integrations or upgrades; general economic and business conditions (domestic, foreign and global) affecting the Company’s operations and financial performance and, indirectly, the Company’s credit ratings, debt covenant compliance, and liquidity and access to financing; geopolitical events, including the uncertainty caused by the United Kingdom’s exit from, and agreement for a new partnership with, the European Union; and legislative or regulatory changes affecting the Company’s businesses.

Any forward-looking statement speaks only as of the date on which that statement is made. Except as required by law, the Company assumes no obligation to update any forward-looking statement to reflect events or circumstances that occur after the date on which the statement is made.

About Avnet

As a leading global technology distributor and solutions provider, Avnet has served customers’ evolving needs for an entire century. We support customers at each stage of a product’s lifecycle, from idea to design and from prototype to production. Our unique position at the center of the technology value chain enables us to accelerate the design and supply stages of product development so customers can realize revenue faster. Decade after decade, Avnet helps 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)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fourth Quarters Ended

 

Years Ended

 

 

 

July 3,

 

June 27,

 

July 3,

 

June 27,

 

 

 

2021

 

2020

 

2021

 

2020

 

 

 

(Thousands, except per share data)

 

Sales

 

$

5,226,734

 

 

$

4,159,700

 

 

$

19,534,679

 

 

$

17,634,333

 

 

Cost of sales

 

 

4,581,787

 

 

 

3,684,629

 

 

 

17,294,049

 

 

 

15,570,877

 

 

Gross profit

 

 

644,947

 

 

 

475,071

 

 

 

2,240,630

 

 

 

2,063,456

 

 

Selling, general and administrative expenses

 

 

498,497

 

 

 

451,099

 

 

 

1,874,831

 

 

 

1,842,122

 

 

Restructuring, integration, impairment and other expenses

 

 

28,449

 

 

 

22,052

 

 

 

84,391

 

 

 

225,962

 

 

Operating income (loss)

 

 

118,001

 

 

 

1,920

 

 

 

281,408

 

 

 

(4,628

)

 

Other (expense) income, net

 

 

(2,955

)

 

 

7,425

 

 

 

(19,006

)

 

 

(2,215

)

 

Interest and other financing expenses, net

 

 

(23,345

)

 

 

(25,489

)

 

 

(89,473

)

 

 

(122,742

)

 

Income (loss) before taxes

 

 

91,701

 

 

 

(16,144

)

 

 

172,929

 

 

 

(129,585

)

 

Income tax expense (benefit)

 

 

6,346

 

 

 

(68,304

)

 

 

(20,185

)

 

 

(98,504

)

 

Net income (loss)

 

$

85,355

 

 

$

52,160

 

 

$

193,114

 

 

$

(31,081

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.86

 

 

$

0.53

 

 

$

1.95

 

 

$

(0.31

)

 

Diluted

 

$

0.85

 

 

$

0.53

 

 

$

1.93

 

 

$

(0.31

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used to compute earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

99,655

 

 

 

98,855

 

 

 

99,258

 

 

 

100,474

 

 

Diluted

 

 

100,630

 

 

 

99,025

 

 

 

100,168

 

 

 

100,474

 

 

Cash dividends paid per common share

 

$

0.22

 

 

$

0.21

 

 

$

0.85

 

 

$

0.84

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AVNET, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

 

 

 

 

 

 

 

 

 

 

July 3,

 

June 27,

 

 

 

2021

 

2020

 

 

 

(Thousands)

 

ASSETS

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

199,691

 

$

477,038

 

Receivables, net

 

 

3,576,130

 

 

2,928,386

 

Inventories

 

 

3,236,837

 

 

2,731,988

 

Prepaid and other current assets

 

 

150,763

 

 

191,394

 

Total current assets

 

 

7,163,421

 

 

6,328,806

 

Property, plant and equipment, net

 

 

368,452

 

 

404,607

 

Goodwill

 

 

838,105

 

 

773,734

 

Intangible assets, net

 

 

28,539

 

 

65,437

 

Operating lease assets

 

 

265,988

 

 

275,917

 

Other assets

 

 

260,917

 

 

256,696

 

Total assets

 

$

8,925,422

 

$

8,105,197

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Short-term debt

 

$

23,078

 

$

51

 

Accounts payable

 

 

2,401,357

 

 

1,754,078

 

Accrued expenses and other

 

 

572,457

 

 

472,924

 

Short-term operating lease liabilities

 

 

58,346

 

 

53,313

 

Total current liabilities

 

 

3,055,238

 

 

2,280,366

 

Long-term debt

 

 

1,191,329

 

 

1,424,791

 

Long-term operating lease liabilities

 

 

239,838

 

 

253,719

 

Other liabilities

 

 

354,833

 

 

419,923

 

Total liabilities

 

 

4,841,238

 

 

4,378,799

 

Shareholders’ equity

 

 

4,084,184

 

 

3,726,398

 

Total liabilities and shareholders’ equity

 

$

8,925,422

 

$

8,105,197

 

AVNET, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

 

 

 

 

 

 

 

 

 

Years Ended

 

 

 

July 3, 2021

 

June 27, 2020

 

 

 

(Thousands)

 

Cash flows from operating activities:

 

 

 

 

 

 

 

Net income (loss)

 

$

193,114

 

 

$

(31,081

)

 

 

 

 

 

 

 

 

 

Non-cash and other reconciling items:

 

 

 

 

 

 

 

Depreciation

 

 

90,884

 

 

 

101,100

 

 

Amortization

 

 

41,033

 

 

 

81,139

 

 

Amortization of operating lease assets

 

 

56,782

 

 

 

60,656

 

 

Deferred income taxes

 

 

14,650

 

 

 

(34,264

)

 

Stock-based compensation

 

 

29,339

 

 

 

26,832

 

 

Goodwill, long-lived asset and other impairments

 

 

15,166

 

 

 

159,346

 

 

Other, net

 

 

22,512

 

 

 

31,343

 

 

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

 

 

 

 

 

 

 

Receivables

 

 

(615,353

)

 

 

221,486

 

 

Inventories

 

 

(409,075

)

 

 

266,791

 

 

Accounts payable

 

 

620,973

 

 

 

(106,990

)

 

Accrued expenses and other, net

 

 

30,924

 

 

 

(46,176

)

 

Net cash flows provided by operating activities

 

 

90,949

 

 

 

730,182

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

Issuance of notes, net of discounts

 

 

297,660

 

 

 

 

 

Repayments of public notes

 

 

(305,077

)

 

 

(302,038

)

 

Borrowings (repayments) under accounts receivable securitization, net

 

 

22,900

 

 

 

(227,300

)

 

Borrowings (repayments) under senior unsecured credit facility, net

 

 

(231,680

)

 

 

223,058

 

 

Repayments under bank credit facilities and other debt, net

 

 

(2,789

)

 

 

(2,123

)

 

Repurchases of common stock

 

 

 

 

 

(237,842

)

 

Dividends paid on common stock

 

 

(84,309

)

 

 

(83,975

)

 

Other, net

 

 

(10,718

)

 

 

(14,330

)

 

Net cash flows used for financing activities

 

 

(314,013

)

 

 

(644,550

)

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

Purchases of property, plant and equipment

 

 

(50,363

)

 

 

(73,516

)

 

Acquisitions of assets and businesses

 

 

(18,381

)

 

 

(51,509

)

 

Other, net

 

 

7,548

 

 

 

(9,992

)

 

Net cash flows used for investing activities

 

 

(61,196

)

 

 

(135,017

)

 

Effect of currency exchange rate changes on cash and cash equivalents

 

 

6,913

 

 

 

(19,682

)

 

Cash and cash equivalents:

 

 

 

 

 

 

 

— decrease

 

 

(277,347

)

 

 

(69,067

)

 

— at beginning of period

 

 

477,038

 

 

 

546,105

 

 

— at end of period

 

$

199,691

 

 

$

477,038

 

 

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 before income taxes, (vi) adjusted diluted earnings per share, 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 expenses 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 expenses 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 (benefit), net income and diluted earnings (loss) per share adjusted for the impact of the items described above and certain items impacting other income (expense) and income tax expense (benefit) 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. Adjustment to income tax expense (benefit) and the effective income tax rate include the effect of changes in tax laws including recent tax law changes in the U.S., certain 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 net income and diluted earnings (loss) per share 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.

 

 

 

 

 

Quarters Ended

 

 

 

Fiscal Year

 

July 3,

 

April 3,

 

January 2,

 

October 3,

 

 

 

2021*

 

2021

 

2021

 

2021

 

2020

 

 

 

($ in thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP selling, general and administrative expenses

 

 

$

1,874,831

 

 

$

498,497

 

 

$

463,092

 

 

$

442,084

 

 

$

471,158

 

Amortization of intangible assets and other

 

 

 

(41,245

)

 

 

(5,370

)

 

 

(5,283

)

 

 

(10,417

)

 

 

(20,175

)

Adjusted operating expenses

 

 

 

1,833,586

 

 

 

493,127

 

 

 

457,809

 

 

 

431,667

 

 

 

450,983

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP operating income

 

 

$

281,408

 

 

$

118,001

 

 

$

87,684

 

 

$

57,221

 

 

$

18,502

 

Restructuring, integration and other expenses

 

 

 

84,391

 

 

 

28,449

 

 

 

17,574

 

 

 

11,948

 

 

 

26,420

 

Amortization of intangible assets and other

 

 

 

41,245

 

 

 

5,370

 

 

 

5,283

 

 

 

10,417

 

 

 

20,175

 

Adjusted operating income

 

 

 

407,044

 

 

 

151,820

 

 

 

110,541

 

 

 

79,586

 

 

 

65,097

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP income (loss) before income taxes

 

 

$

172,929

 

 

$

91,701

 

 

$

70,121

 

 

$

34,403

 

 

$

(23,297

)

Restructuring, integration and other expenses

 

 

 

84,391

 

 

 

28,449

 

 

 

17,574

 

 

 

11,948

 

 

 

26,420

 

Amortization of intangible assets and other

 

 

 

41,245

 

 

 

5,370

 

 

 

5,283

 

 

 

10,417

 

 

 

20,175

 

Other expenses - equity investment impairments and other

 

 

 

20,413

 

 

 

5,139

 

 

 

-

 

 

 

51

 

 

 

15,223

 

Adjusted income before income taxes

 

 

 

318,978

 

 

 

130,659

 

 

 

92,978

 

 

 

56,819

 

 

 

38,521

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP income tax expense (benefit)

 

 

$

(20,185

)

 

$

6,346

 

 

$

(37,363

)

 

$

15,240

 

 

$

(4,408

)

Restructuring, integration and other expenses

 

 

 

17,468

 

 

 

6,172

 

 

 

4,118

 

 

 

2,577

 

 

 

4,601

 

Amortization of intangible assets and other

 

 

 

9,099

 

 

 

1,025

 

 

 

1,008

 

 

 

2,037

 

 

 

5,029

 

Other expenses - equity investment impairments and other

 

 

 

90

 

 

 

38

 

 

 

-

 

 

 

26

 

 

 

26

 

Income tax benefit (expense) items, net

 

 

 

41,275

 

 

 

4,091

 

 

 

50,682

 

 

 

(10,788

)

 

 

(2,710

)

Adjusted income tax expense

 

 

 

47,747

 

 

 

17,672

 

 

 

18,445

 

 

 

9,092

 

 

 

2,538

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP net income (loss)

 

 

$

193,114

 

 

$

85,355

 

 

$

107,484

 

 

$

19,163

 

 

$

(18,889

)

Restructuring, integration and other expenses (net of tax)

 

 

 

66,923

 

 

 

22,277

 

 

 

13,456

 

 

 

9,371

 

 

 

21,819

 

Amortization of intangible assets and other (net of tax)

 

 

 

32,146

 

 

 

4,345

 

 

 

4,275

 

 

 

8,380

 

 

 

15,146

 

Other expenses - equity investment impairments and other (net of tax)

 

 

 

20,323

 

 

 

5,101

 

 

 

-

 

 

 

25

 

 

 

15,197

 

Income tax (benefit) expense items, net

 

 

 

(41,275

)

 

 

(4,091

)

 

 

(50,682

)

 

 

10,788

 

 

 

2,710

 

Adjusted net income

 

 

 

271,231

 

 

 

112,987

 

 

 

74,533

 

 

 

47,727

 

 

 

35,983

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP diluted earnings (loss) per share

 

 

$

1.93

 

 

$

0.85

 

 

$

1.07

 

 

$

0.19

 

 

$

(0.19

)

Restructuring, integration and other expenses (net of tax)

 

 

 

0.67

 

 

 

0.22

 

 

 

0.13

 

 

 

0.09

 

 

 

0.22

 

Amortization of intangible assets and other (net of tax)

 

 

 

0.32

 

 

 

0.04

 

 

 

0.04

 

 

 

0.09

 

 

 

0.15

 

Other expenses - equity investment impairments and other (net of tax)

 

 

 

0.20

 

 

 

0.05

 

 

 

-

 

 

 

0.00

 

 

 

0.15

 

Income tax (benefit) expense items, net

 

 

 

(0.41

)

 

 

(0.04

)

 

 

(0.50

)

 

 

0.11

 

 

 

0.03

 

Adjusted diluted EPS

 

 

 

2.71

 

 

 

1.12

 

 

 

0.74

 

 

 

0.48

 

 

 

0.36

 

______________________________

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

 

 

 

Quarters Ended

 

Fiscal Year

 

June 27,

 

March 28,

 

December 29,

 

September 29,

 

2020*

 

2020*

 

2020*

 

2019*

 

2019*

 

($ in thousands, except per share amounts)

GAAP selling, general and administrative expenses

$

1,842,122

 

 

$

451,099

 

 

$

469,646

 

 

$

464,873

 

 

$

456,503

 

Amortization of intangible assets and other

 

(81,555

)

 

 

(18,952

)

 

 

(21,071

)

 

 

(21,454

)

 

 

(20,078

)

Adjusted operating expenses

 

1,760,567

 

 

 

432,147

 

 

 

448,576

 

 

 

443,419

 

 

 

436,426

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP operating (loss) income

$

(4,628

)

 

$

1,920

 

 

$

(115,760

)

 

$

46,475

 

 

$

62,738

 

Restructuring, integration and other expenses

 

81,870

 

 

 

23,796

 

 

 

19,211

 

 

 

14,265

 

 

 

24,598

 

Goodwill and long-lived asset impairment expenses (benefits)

 

144,092

 

 

 

(1,744

)

 

 

145,836

 

 

 

-

 

 

 

-

 

Amortization of intangible assets and other

 

81,555

 

 

 

18,952

 

 

 

21,071

 

 

 

21,454

 

 

 

20,078

 

Adjusted operating income

 

302,889

 

 

 

42,924

 

 

 

70,358

 

 

 

82,194

 

 

 

107,414

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP (loss) income before income taxes

$

(128,107

)

 

$

(16,144

)

 

$

(158,086

)

 

$

12,086

 

 

$

34,038

 

Restructuring, integration and other expenses

 

81,870

 

 

 

23,796

 

 

 

19,211

 

 

 

14,265

 

 

 

24,598

 

Goodwill and long-lived asset impairment expenses (benefits)

 

144,092

 

 

 

(1,744

)

 

 

145,836

 

 

 

-

 

 

 

-

 

Amortization of intangible assets and other

 

81,555

 

 

 

18,952

 

 

 

21,071

 

 

 

21,454

 

 

 

20,078

 

Other expenses and early debt redemption

 

21,582

 

 

 

2,054

 

 

 

15,526

 

 

 

4,002

 

 

 

-

 

Adjusted income before income taxes

 

200,992

 

 

 

26,914

 

 

 

43,558

 

 

 

51,807

 

 

 

78,713

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP income tax expense (benefit)

$

(98,574

)

 

$

(68,304

)

 

$

(29,425

)

 

$

6,870

 

 

$

(7,714

)

Restructuring, integration and other expenses

 

18,648

 

 

 

4,659

 

 

 

4,372

 

 

 

3,377

 

 

 

6,240

 

Goodwill and long-lived asset impairment expenses

 

6,433

 

 

 

207

 

 

 

6,226

 

 

 

-

 

 

 

-

 

Amortization of intangible assets and other

 

16,119

 

 

 

3,613

 

 

 

4,307

 

 

 

3,964

 

 

 

4,235

 

Other expenses and early debt redemption

 

6,238

 

 

 

506

 

 

 

4,992

 

 

 

740

 

 

 

-

 

Income tax benefit (expense) items, net

 

47,655

 

 

 

22,996

 

 

 

15,119

 

 

 

(4,071

)

 

 

13,611

 

Adjusted income tax (benefit) expense

 

(3,481

)

 

 

(36,323

)

 

 

5,591

 

 

 

10,880

 

 

 

16,372

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP net (loss) income

$

(29,533

)

 

$

52,160

 

 

$

(128,661

)

 

$

5,216

 

 

$

41,752

 

Restructuring, integration and other expenses (net of tax)

 

63,222

 

 

 

19,137

 

 

 

14,839

 

 

 

10,888

 

 

 

18,358

 

Goodwill and long-lived asset impairment expenses (benefits) (net of tax)

 

137,659

 

 

 

(1,951

)

 

 

139,610

 

 

 

-

 

 

 

-

 

Amortization of intangible assets and other (net of tax)

 

65,436

 

 

 

15,339

 

 

 

16,764

 

 

 

17,490

 

 

 

15,843

 

Other expenses and early debt redemption (net of tax)

 

15,344

 

 

 

1,548

 

 

 

10,534

 

 

 

3,262

 

 

 

-

 

Income tax (benefit) expense items, net

 

(47,655

)

 

 

(22,996

)

 

 

(15,119

)

 

 

4,071

 

 

 

(13,611

)

Adjusted net income

 

204,473

 

 

 

63,237

 

 

 

37,967

 

 

 

40,927

 

 

 

62,341

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP diluted (loss) earnings per share

$

(0.29

)

 

$

0.53

 

 

$

(1.29

)

 

$

0.05

 

 

$

0.40

 

Restructuring, integration and other expenses (net of tax)

 

0.63

 

 

 

0.19

 

 

 

0.15

 

 

 

0.11

 

 

 

0.18

 

Goodwill and long-lived asset impairment expenses (benefits) (net of tax)

 

1.37

 

 

 

(0.02

)

 

 

1.39

 

 

 

-

 

 

 

-

 

Amortization of intangible assets and other (net of tax)

 

0.65

 

 

 

0.15

 

 

 

0.17

 

 

 

0.17

 

 

 

0.15

 

Other expenses and early debt redemption (net of tax)

 

0.15

 

 

 

0.02

 

 

 

0.11

 

 

 

0.03

 

 

 

-

 

Income tax (benefit) expense items, net

 

(0.47

)

 

 

(0.23

)

 

 

(0.15

)

 

 

0.04

 

 

 

(0.13

)

Adjusted diluted EPS

 

2.04

 

 

 

0.64

 

 

 

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.

Sales of TI Products

In December 2020, the termination of the Company’s electronic components distribution agreement with Texas Instruments (“TI”) was completed. Sales of TI products by quarter are outlined in the following table:

 

 

Fourth Quarter

 

Third Quarter

 

Second Quarter

 

First Quarter

 

Fourth Quarter

 

 

July 3,

 

April 3,

 

January 2,

 

October 3,

 

June 27,

 

 

2021

 

2021

 

2021

 

2020

 

2020

 

 

(in millions)

Sales of TI Products

 

$

-

 

$

1.7

 

$

49.6

 

$

241.0

 

$

322.5

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 periods (if necessary) 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. Additionally, fiscal 2021 sales are adjusted for the estimated impact of the extra week of sales in the first quarter of fiscal 2021 due to the 14-week fiscal first quarter and the 53-week fiscal year. Organic sales in constant currency is defined as organic sales (as defined above) excluding the impact of changes in foreign currency exchange rates.

As a result of declining sales due to the termination of the TI distribution agreement discussed further above, organic sales growth rates have also been adjusted to exclude sales of TI products.

The following table presents the reconciliation of reported sales to organic sales for the fourth quarter and full year of fiscal 2021.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended

 

Year Ended

 

 

Sales

 

 

 

 

Organic

 

 

 

 

 

 

 

 

 

 

 

 

Organic

 

 

As Reported

 

 

 

Sales

 

Sales

 

 

 

Organic

 

 

 

Sales

 

 

and Organic

 

TI Sales

 

Adj for TI

 

As Reported

 

Estimated

 

Sales

 

TI Sales

 

Adj for TI

 

 

Q4-Fiscal

 

Q4-Fiscal

 

Q4-Fiscal

 

Q4-Fiscal

 

Extra

 

Q4-Fiscal

 

Q4-Fiscal

 

Q4-Fiscal

 

 

2021

 

2021(1)

 

2021(1)

 

2021

 

Week(2)

 

2021

 

2021(1)

 

2021(1)

 

 

(in millions)

Avnet

 

$

5,226.7

 

$

 

$

5,226.7

 

$

19,534.7

 

$

306.0

 

$

19,228.7

 

$

292.2

 

$

18,936.5

Avnet by region

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Americas

 

$

1,194.4

 

$

 

$

1,194.4

 

$

4,662.5

 

$

77.0

 

$

4,585.5

 

$

82.9

 

$

4,502.6

EMEA

 

 

1,737.3

 

 

 

 

1,737.3

 

 

6,149.9

 

 

97.0

 

 

6,052.9

 

 

124.2

 

 

5,928.7

Asia

 

 

2,295.0

 

 

 

 

2,295.0

 

 

8,722.3

 

 

132.0

 

 

8,590.3

 

 

85.1

 

 

8,505.2

Avnet by segment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EC

 

$

4,785.3

 

$

 

$

4,785.3

 

$

18,030.5

 

$

284.0

 

$

17,746.5

 

$

292.2

 

$

17,454.3

Farnell

 

 

441.4

 

 

 

 

441.4

 

 

1,504.2

 

 

22.0

 

 

1,482.2

 

 

 

 

1,482.2

_____________________
(1)

Sales adjusted for the impact of the termination of the TI distribution contract.

(2)

The impact of the additional week of sales in the first quarter of fiscal 2021 is estimated.

The following table presents reported and organic sales growth rates for the fourth quarter and full year of fiscal 2021 compared to fiscal 2020.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended

 

Year Ended

 

 

 

 

 

 

Sales

 

Organic

 

 

 

 

 

 

 

 

 

Organic

 

 

 

 

 

As Reported

 

Sales

 

 

 

Sales

 

 

 

Organic

 

Sales

 

 

Sales

 

and Organic

 

Adj for TI

 

 

 

As Reported

 

 

 

Sales

 

Adj for TI

 

 

As Reported

 

Year-Year %

 

Year-Year %

 

Sales

Year-Year %

 

Organic

 

Year-Year %

 

Year-Year %

 

 

and Organic

 

Change in

 

Change in

 

As Reported

Change in

 

Sales

 

Change in

 

Change in

 

 

Year-Year

 

Constant

 

Constant

 

Year-Year

Constant

 

Year-Year

 

Constant

 

Constant

 

 

% Change

 

Currency

 

Currency(1)

 

% Change

Currency

 

% Change

 

Currency

 

Currency(1)

Avnet

 

25.7

%

 

21.5

%

 

31.7

%

 

10.8

 

%

8.0

%

 

9.0

%

 

6.3

%

 

14.8

%

Avnet by region

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Americas

 

3.9

%

 

3.9

%

 

12.3

%

 

(2.0

)

%

(2.0

)%

 

(3.6

)%

 

(3.6

)%

 

2.8

%

EMEA

 

29.3

 

 

18.2

 

 

28.7

 

 

6.9

 

 

(0.4

)

 

5.2

 

 

(2.1

)

 

5.4

 

Asia

 

37.7

 

 

36.9

 

 

48.2

 

 

22.4

 

 

21.7

 

 

20.6

 

 

19.8

 

 

30.8

 

Avnet by segment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EC

 

23.7

%

 

20.0

%

 

30.9

%

 

10.3

 

%

7.8

%

 

8.6

%

 

6.0

%

 

15.3

%

Farnell

 

51.1

 

 

41.1

 

 

41.1

 

 

16.2

 

 

11.2

 

 

14.5

 

 

9.5

 

 

9.5

 

_____________________
(1)

Sales growth rates excluding the impact of the termination of the TI distribution agreement.

Historical Segment Financial Information

 

 

 

 

 

Fiscal 2021

 

 

 

 

Quarters Ended

 

 

 

 

Fourth Quarter

 

Third Quarter

 

Second Quarter

 

First Quarter

 

 

Fiscal Year

 

July 3,

 

January 2,

 

January 2,

 

October 3,

 

 

2021*

 

2021

 

2021

 

2021

 

2020

 

 

(in millions)

Sales:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Electronic Components

 

$

18,030.5

 

 

$

4,785.3

 

 

$

4,520.6

 

 

$

4,342.4

 

 

$

4,382.2

 

Farnell

 

 

1,504.2

 

 

 

441.4

 

 

 

396.1

 

 

 

325.8

 

 

 

340.9

 

Avnet sales

 

$

19,534.7

 

 

$

5,226.7

 

 

$

4,916.7

 

 

$

4,668.2

 

 

$

4,723.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Electronic Components

 

$

454.8

 

 

$

147.8

 

 

$

118.6

 

 

$

103.9

 

 

$

84.4

 

Farnell

 

 

86.9

 

 

 

36.5

 

 

 

23.9

 

 

 

14.6

 

 

 

12.0

 

 

 

 

541.7

 

 

 

184.3

 

 

 

142.5

 

 

 

118.5

 

 

 

96.4

 

Corporate expenses

 

 

(134.7

)

 

 

(32.5

)

 

 

(31.9

)

 

 

(39.0

)

 

 

(31.3

)

Restructuring, integration and other expenses

 

 

(84.4

)

 

 

(28.4

)

 

 

(17.6

)

 

 

(11.9

)

 

 

(26.4

)

Amortization of acquired intangible assets and other

 

 

(41.2

)

 

 

(5.4

)

 

 

(5.3

)

 

 

(10.4

)

 

 

(20.2

)

Avnet operating income

 

$

281.4

 

 

$

118.0

 

 

$

87.7

 

 

$

57.2

 

 

$

18.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales by geographic area:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Americas

 

$

4,662.5

 

 

$

1,194.4

 

 

$

1,161.0

 

 

$

1,101.5

 

 

$

1,205.7

 

EMEA

 

 

6,149.9

 

 

 

1,737.3

 

 

 

1,585.6

 

 

 

1,346.3

 

 

 

1,480.7

 

Asia

 

 

8,722.3

 

 

 

2,295.0

 

 

 

2,170.1

 

 

 

2,220.4

 

 

 

2,036.7

 

Avnet sales

 

$

19,534.7

 

 

$

5,226.7

 

 

$

4,916.7

 

 

$

4,668.2

 

 

$

4,723.1

 

________________________________

* May not foot/cross foot due to rounding

                             

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fiscal Year 2020

 

 

 

 

Quarters Ended

 

 

 

 

Fourth Quarter

 

Third Quarter

 

Second Quarter

 

First Quarter

 

 

Fiscal Year

 

June 27,

 

March 28,

 

December 28,

 

September 28,

 

 

2020*

 

2020*

 

2020*

 

2019

 

2019

 

 

(in millions)

Sales:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Electronic Components

 

$

16,340.1

 

 

$

3,867.6

 

 

$

3,974.7

 

 

$

4,203.6

 

 

$

4,294.2

 

Farnell

 

 

1,294.2

 

 

 

292.1

 

 

 

335.1

 

 

 

331.2

 

 

 

335.8

 

Avnet

 

$

17,634.3

 

 

$

4,159.7

 

 

$

4,309.8

 

 

$

4,534.8

 

 

$

4,630.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Electronic Components

 

$

349.1

 

 

$

58.9

 

 

$

84.8

 

 

$

93.1

 

 

$

112.3

 

Farnell

 

 

75.5

 

 

 

10.4

 

 

 

23.4

 

 

 

20.0

 

 

 

21.8

 

 

 

 

424.6

 

 

 

69.3

 

 

 

108.2

 

 

 

113.1

 

 

 

134.1

 

Corporate expenses

 

 

(121.6

)

 

 

(26.3

)

 

 

(37.8

)

 

 

(30.9

)

 

 

(26.7

)

Restructuring, integration and other expenses

 

 

(81.9

)

 

 

(23.8

)

 

 

(19.2

)

 

 

(14.3

)

 

 

(24.6

)

Goodwill and long-lived asset impairment expenses

 

 

(144.1

)

 

 

1.7

 

 

 

(145.8

)

 

 

-

 

 

 

-

 

Amortization of acquired intangible assets and other

 

 

(81.6

)

 

 

(19.0

)

 

 

(21.1

)

 

 

(21.4

)

 

 

(20.1

)

Avnet operating (loss) income

 

$

(4.6

)

 

$

1.9

 

 

$

(115.8

)

 

$

46.5

 

 

$

62.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales by geographic area:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Americas

 

$

4,755.3

 

 

$

1,149.3

 

 

$

1,203.6

 

 

$

1,186.6

 

 

$

1,215.8

 

EMEA

 

 

5,753.4

 

 

 

1,344.2

 

 

 

1,512.5

 

 

 

1,425.8

 

 

 

1,470.9

 

Asia

 

 

7,125.6

 

 

 

1,666.2

 

 

 

1,593.7

 

 

 

1,922.4

 

 

 

1,943.3

 

Avnet

 

$

17,634.3

 

 

$

4,159.7

 

 

$

4,309.8

 

 

$

4,534.8

 

 

$

4,630.0

 

________________________________

* May not foot/cross foot due to rounding

                                       

Guidance Reconciliation

The following table presents the reconciliation of non-GAAP adjusted diluted earnings per share guidance to the expected GAAP diluted earnings per share guidance for the first quarter of fiscal 2022.

 

 

Low End of

 

High End of

 

 

 

Guidance Range

 

Guidance Range

 

 

 

 

 

 

 

 

 

Adjusted diluted earnings per share guidance

 

$

1.02

 

 

$

1.12

 

 

Restructuring, integration and other expense (net of tax)

 

 

(0.08

)

 

 

(0.04

)

 

Amortization of intangibles and other (net of tax)

 

 

(0.04

)

 

 

(0.02

)

 

Income tax expense adjustments

 

 

(0.05

)

 

 

0.05

 

 

GAAP diluted earnings per share guidance

 

$

0.85

 

 

$

1.11

 

 

 

 

Investor Relations Contacts
Joe Burke, 480-643-7431
Joseph.Burke@avnet.com

Media Relations Contact
Jeanne Forbis, 480-643-7499
Jeanne.Forbis@Avnet.com

Source: Avnet, Inc.