Investor Relations

Press Release

Avnet Reports Third Quarter Fiscal 2021 Financial Results

April 28, 2021 at 4:05 PM EDT

Sales of $4.9 billion, up 14% year over year with diluted EPS of $1.07

Adjusted diluted EPS of $0.74, up 95% year over year

Operating margin expansion across all regions, including Farnell

PHOENIX--(BUSINESS WIRE)--Apr. 28, 2021-- Avnet, Inc. (Nasdaq: AVT) today announced results for its third quarter ended April 3, 2021.

Fiscal Third Quarter Key Financial Highlights:

  • Sales of $4.9 billion, up from $4.7 billion sequentially and compared to $4.3 billion in the prior year quarter. Sales exceeded guidance, driven by broad end-market strength.
    • On a constant currency basis, sales grew 10.7% year over year and 4.8% sequentially.
    • Excluding Texas Instruments from both periods, sales grew 22% in constant currency year over year.
  • GAAP diluted earnings per share of $1.07, compared with a GAAP diluted loss per share of $1.29 in the prior year quarter.
    • Non-GAAP adjusted diluted earnings per share of $0.74, compared with $0.38 earnings per share in the prior year quarter.
  • GAAP operating margin was up 447 basis points to 1.8% compared with negative 2.7% in the prior year quarter.
    • Adjusted operating margin of 2.3% increased 62 basis points from 1.6% in the prior year quarter.
  • Farnell operating margins increased sequentially 154 basis points to 6.0%.
  • Sales of Texas Instruments’ products were less than $2 million compared with $400.6 million in the prior year quarter.
  • As expected, cash used for operations totaled $9.9 million in the quarter as strong demand drives investment in working capital.

CEO Commentary

“In the third quarter, the impact of our back-to-basics strategy resulted in strong execution and performance across all regions,” said Avnet Chief Executive Officer Phil Gallagher. “As we continue to navigate supply constraints, extended lead times and a shifting operating environment, our deep relationships with our partners and tight management of our backlog will continue to be of utmost importance. Our prioritization of these relationships and focus on execution to date have put Avnet on a more linear growth path. Further, our ability to enhance value through demand creation for our partners has continued to contribute to our success at the center of the technology supply chain. We remain confident in our ability to execute and create value for our customers and suppliers.”

Key Financial Metrics

($ in millions, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Third Quarter Results (GAAP)

 

 

Mar – 21

 

Mar – 20

 

Change Y/Y

 

Dec – 20

 

Change Q/Q

Sales

 

$

4,916.7

 

 

$

4,309.8

 

 

14.1

%

 

$

4,668.2

 

 

5.3

%

Operating Income (Loss)

 

 

87.7

 

 

 

(115.8)

 

 

175.7

%

 

 

57.2

 

 

53.2

%

Operating Income (Loss) Margin

 

 

1.8

%

 

 

(2.7)

%

 

447

bps

 

 

1.2

%

 

55

bps

Diluted Earnings (Loss) Per Share (EPS)

 

$

1.07

 

 

$

(1.29)

 

 

182.9

%

 

$

0.19

 

 

463.2

%

Third Quarter Results (Non-GAAP)(1)

 

 

Mar – 21

 

Mar – 20

 

Change Y/Y

 

Dec – 20

 

Change Q/Q

Sales

 

$

4,916.7

 

 

$

4,309.8

 

 

14.1

%

 

$

4,668.2

 

 

5.3

%

Adjusted Operating Income

 

 

110.5

 

 

 

70.4

 

 

57.1

%

 

 

79.6

 

 

38.9

%

Adjusted Operating Income Margin

 

 

2.3

%

 

 

1.6

%

 

62

bps

 

 

1.7

%

 

55

bps

Adjusted Diluted Earnings Per Share (EPS)

 

$

0.74

 

 

$

0.38

 

 

94.7

%

 

$

0.48

 

 

54.2

%

Segment and Geographical Mix

 

 

Mar – 21

 

Mar – 20

 

Change Y/Y

 

Dec – 20

 

Change Q/Q

Electronic Components (EC) Sales

 

$

4,520.6

 

 

$

3,974.7

 

 

13.7

%

 

$

4,342.4

 

 

4.1

%

EC Operating Income Margin

 

 

2.6

%

 

 

2.1

%

 

49

bps

 

 

2.4

%

 

23

bps

Farnell Sales

 

$

396.1

 

 

$

335.1

 

 

18.2

%

 

$

325.8

 

 

21.6

%

Farnell Operating Income Margin

 

 

6.0

%

 

 

7.0

%

 

(95)

bps

 

 

4.5

%

 

154

bps

Americas Sales

 

$

1,161.0

 

 

$

1,203.6

 

 

(3.5)

%

 

$

1,101.5

 

 

5.4

%

EMEA Sales

 

 

1,585.6

 

 

 

1,512.5

 

 

4.8

%

 

 

1,346.3

 

 

17.8

%

Asia Sales

 

 

2,170.1

 

 

 

1,593.7

 

 

36.2

%

 

 

2,220.4

 

 

(2.3)

%

TI Sales

 

 

Mar – 21

 

Mar – 20

 

Change Y/Y

 

Dec – 20

 

Change Q/Q

Sales of TI Products

 

$

1.7

 

 

$

400.6

 

 

(99.6)

%

 

$

49.6

 

 

(96.7)

%

_________________________

(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.

CFO Commentary

“In the third quarter, we grew our top line by 14% year over year and expanded operating margins for the third consecutive quarter, demonstrating the increasing value we provide to customers and suppliers as well as our continued strong execution,” said Avnet Chief Financial Officer Tom Liguori. “Over the past year, our team has successfully implemented a number of measures to strengthen our financial profile. As a more nimble and efficient organization that is investing across its business lines and geographies, Avnet is in a better position today to deliver for all stakeholders in this dynamic market.”

Additional Third Quarter Fiscal 2021 Highlights

  • Returned $21 million to shareholders with dividends paid during the quarter.
  • Awarded Best Global Performance and Best Asia Performance Awards by Amphenol.
  • Partnered with ON Semiconductor to establish a framework to help OEMs more rapidly develop end-to-end IoT solutions.
  • Kicked off 100th year anniversary celebration with the launch of Avnet’s Centennial Central platform, which details Avnet’s 100-year journey to date. To learn more, visit https://www.centennialcentral.com/.

Outlook for the Fourth Quarter of Fiscal 2021 Ending on July 3, 2021

 

 

Guidance Range

 

Midpoint

Sales

 

$4.7B$5.1B

 

$4.9B

Non-GAAP Diluted EPS(1)

 

$0.71$0.77

 

$0.74

_________________________
(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. It excludes amortization of intangibles, any potential restructuring, integration, and other expenses and certain income tax adjustments. 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:

 

 

 

 

 

 

 

 

 

Q4 Fiscal

 

 

 

 

 

 

2021

 

Q3 Fiscal

 

Q4 Fiscal

 

 

Guidance

 

2021

 

2020

Euro

 

$1.20

 

$1.20

 

$1.10

GBP

 

$1.38

 

$1.38

 

$1.24

Today’s Conference Call and Webcast Details

Avnet will host a quarterly webcast and teleconference today at 1:30 p.m. PDT and 4:30 p.m. EDT 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 July 28 at 5:00 p.m. EDT, and can be accessed by dialing: 877-660-6853 or 201-612-7415 and using Conference ID: 13716605.

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,” “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, 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

Avnet is a global electronic components distributor with extensive design, product, marketing and supply chain expertise for customers and suppliers at every stage of the product lifecycle. For the past 100 years, Avnet has helped 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)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Third Quarters Ended

 

Nine Months Ended

 

 

April 3,

 

March 28,

 

April 3,

 

March 28,

 

 

2021

 

2020

 

2021

 

2020

 

 

(Thousands, except per share data)

Sales

 

$

4,916,714

 

 

$

4,309,818

 

 

$

14,307,945

 

 

$

13,474,632

 

Cost of sales

 

 

4,348,364

 

 

 

3,790,885

 

 

 

12,712,262

 

 

 

11,886,247

 

Gross profit

 

 

568,350

 

 

 

518,933

 

 

 

1,595,683

 

 

 

1,588,385

 

Selling, general and administrative expenses

 

 

463,092

 

 

 

469,646

 

 

 

1,376,333

 

 

 

1,391,024

 

Goodwill and long-lived asset impairment expense

 

 

 

 

 

145,836

 

 

 

 

 

 

145,836

 

Restructuring, integration and other expenses

 

 

17,574

 

 

 

19,211

 

 

 

55,943

 

 

 

58,073

 

Operating income (loss)

 

 

87,684

 

 

 

(115,760

)

 

 

163,407

 

 

 

(6,548

)

Other income (expense), net

 

 

4,779

 

 

 

(12,608

)

 

 

(16,052

)

 

 

(9,640

)

Interest and other financing expenses, net

 

 

(22,342

)

 

 

(29,718

)

 

 

(66,128

)

 

 

(97,254

)

Income (loss) before taxes

 

 

70,121

 

 

 

(158,086

)

 

 

81,227

 

 

 

(113,442

)

Income tax benefit

 

 

(37,363

)

 

 

(29,425

)

 

 

(26,532

)

 

 

(30,200

)

Net income (loss)

 

$

107,484

 

 

$

(128,661

)

 

$

107,759

 

 

$

(83,242

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

1.08

 

 

$

(1.29

)

 

$

1.09

 

 

$

(0.82

)

Diluted

 

$

1.07

 

 

$

(1.29

)

 

$

1.08

 

 

$

(0.82

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used to compute earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

99,542

 

 

 

99,479

 

 

 

99,125

 

 

 

101,013

 

Diluted

 

 

100,247

 

 

 

99,479

 

 

 

100,013

 

 

 

101,013

 

Cash dividends paid per common share

 

$

0.21

 

 

$

0.21

 

 

$

0.63

 

 

$

0.63

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AVNET, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

 

 

 

 

 

 

 

 

 

April 3,

 

June 27,

 

 

2021

 

2020

 

 

(Thousands)

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

322,749

 

$

477,038

Receivables, net

 

 

3,365,677

 

 

2,928,386

Inventories

 

 

2,760,156

 

 

2,731,988

Prepaid and other current assets

 

 

156,023

 

 

191,394

Total current assets

 

 

6,604,605

 

 

6,328,806

Property, plant and equipment, net

 

 

381,083

 

 

404,607

Goodwill

 

 

838,460

 

 

773,734

Intangible assets, net

 

 

33,770

 

 

65,437

Operating lease assets

 

 

275,662

 

 

275,917

Other assets

 

 

232,335

 

 

256,696

Total assets

 

$

8,365,915

 

$

8,105,197

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Short-term debt

 

$

300,043

 

$

51

Accounts payable

 

 

2,001,743

 

 

1,754,078

Accrued expenses and other

 

 

526,974

 

 

472,924

Short-term operating lease liabilities

 

 

57,182

 

 

53,313

Total current liabilities

 

 

2,885,942

 

 

2,280,366

Long-term debt

 

 

895,913

 

 

1,424,791

Long-term operating lease liabilities

 

 

250,108

 

 

253,719

Other liabilities

 

 

396,065

 

 

419,923

Total liabilities

 

 

4,428,028

 

 

4,378,799

Shareholders’ equity

 

 

3,937,887

 

 

3,726,398

Total liabilities and shareholders’ equity

 

$

8,365,915

 

$

8,105,197

 

 

 

 

 

 

 

AVNET, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

 

 

 

 

 

 

 

 

Nine Months Ended

 

 

April 3, 2021

 

March 28, 2020

 

 

(Thousands)

Cash flows from operating activities:

 

 

 

 

 

 

Net income (loss)

 

$

107,759

 

 

$

(83,242

)

 

 

 

 

 

 

 

Non-cash and other reconciling items:

 

 

 

 

 

 

Depreciation

 

 

67,462

 

 

 

75,535

 

Amortization

 

 

35,730

 

 

 

62,240

 

Amortization of operating lease assets

 

 

42,054

 

 

 

46,560

 

Deferred income taxes

 

 

11,510

 

 

 

(42,529

)

Stock-based compensation

 

 

22,293

 

 

 

20,757

 

Goodwill, long-lived asset and other impairments

 

 

15,166

 

 

 

145,836

 

Other, net

 

 

7,558

 

 

 

36,548

 

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

 

 

 

 

 

 

Receivables

 

 

(405,700

)

 

 

150,095

 

Inventories

 

 

63,017

 

 

 

227,996

 

Accounts payable

 

 

224,151

 

 

 

(112,923

)

Accrued expenses and other, net

 

 

6,526

 

 

 

(84,263

)

Net cash flows provided by operating activities

 

 

197,526

 

 

 

442,610

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

Repayments under accounts receivable securitization, net

 

 

 

 

 

(127,400

)

Repayments under senior unsecured credit facility, net

 

 

(232,347

)

 

 

(1,194

)

Repayments under bank credit facilities and other debt, net

 

 

(2,192

)

 

 

(1,639

)

Repurchases of common stock

 

 

 

 

 

(235,830

)

Dividends paid on common stock

 

 

(62,400

)

 

 

(63,235

)

Other, net

 

 

(11,455

)

 

 

(15,132

)

Net cash flows used for financing activities

 

 

(308,394

)

 

 

(444,430

)

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

Purchases of property, plant and equipment

 

 

(39,001

)

 

 

(61,156

)

Acquisitions of assets

 

 

(18,371

)

 

 

(51,509

)

Other, net

 

 

6,201

 

 

 

(12,547

)

Net cash flows used for investing activities

 

 

(51,171

)

 

 

(125,212

)

Effect of currency exchange rate changes on cash and cash equivalents

 

 

7,750

 

 

 

(16,418

)

Cash and cash equivalents:

 

 

 

 

 

 

— decrease

 

 

(154,289

)

 

 

(143,450

)

— at beginning of period

 

 

477,038

 

 

 

546,105

 

— at end of period

 

$

322,749

 

 

$

402,655

 

 

 

 

 

 

 

 

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 from continuing operations, (vi) adjusted diluted earnings per share from continuing operations, 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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fiscal

 

Quarters Ended

 

 

 

Year to Date

 

April 3,

 

January 2,

 

October 3,

 

 

 

2021*

 

2021

 

2021

 

2020

 

 

 

($ in thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP selling, general and administrative expenses

 

 

$

1,376,333

 

 

$

463,092

 

 

$

442,084

 

 

$

471,158

 

Amortization of intangible assets and other

 

 

 

(35,875

)

 

 

(5,283

)

 

 

(10,417

)

 

 

(20,175

)

Adjusted operating expenses

 

 

 

1,340,458

 

 

 

457,809

 

 

 

431,667

 

 

 

450,983

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP operating income

 

 

$

163,407

 

 

$

87,684

 

 

$

57,221

 

 

$

18,502

 

Restructuring, integration and other expenses

 

 

 

55,943

 

 

 

17,574

 

 

 

11,948

 

 

 

26,420

 

Amortization of intangible assets and other

 

 

 

35,875

 

 

 

5,283

 

 

 

10,417

 

 

 

20,175

 

Adjusted operating income

 

 

 

255,225

 

 

 

110,541

 

 

 

79,586

 

 

 

65,097

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP income (loss) before income taxes

 

 

$

81,227

 

 

$

70,121

 

 

$

34,403

 

 

$

(23,297

)

Restructuring, integration and other expenses

 

 

 

55,943

 

 

 

17,574

 

 

 

11,948

 

 

 

26,420

 

Amortization of intangible assets and other

 

 

 

35,875

 

 

 

5,283

 

 

 

10,417

 

 

 

20,175

 

Other expenses - equity investment impairments

 

 

 

15,274

 

 

 

-

 

 

 

51

 

 

 

15,223

 

Adjusted income before income taxes

 

 

 

188,319

 

 

 

92,978

 

 

 

56,819

 

 

 

38,521

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP income tax expense (benefit)

 

 

$

(26,532

)

 

$

(37,363

)

 

$

15,240

 

 

$

(4,408

)

Restructuring, integration and other expenses

 

 

 

11,296

 

 

 

4,118

 

 

 

2,577

 

 

 

4,601

 

Amortization of intangible assets and other

 

 

 

8,074

 

 

 

1,008

 

 

 

2,037

 

 

 

5,029

 

Other expenses - equity investment impairments

 

 

 

52

 

 

 

-

 

 

 

26

 

 

 

26

 

Income tax benefit (expense) items, net

 

 

 

37,184

 

 

 

50,682

 

 

 

(10,788

)

 

 

(2,710

)

Adjusted income tax expense

 

 

 

30,074

 

 

 

18,445

 

 

 

9,092

 

 

 

2,538

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP net income (loss)

 

 

$

107,759

 

 

$

107,484

 

 

$

19,163

 

 

$

(18,889

)

Restructuring, integration and other expenses (net of tax)

 

 

 

44,647

 

 

 

13,456

 

 

 

9,371

 

 

 

21,819

 

Amortization of intangible assets and other (net of tax)

 

 

 

27,801

 

 

 

4,275

 

 

 

8,380

 

 

 

15,146

 

Other expenses - equity investment impairments (net of tax)

 

 

 

15,222

 

 

 

-

 

 

 

25

 

 

 

15,197

 

Income tax (benefit) expense items, net

 

 

 

(37,184

)

 

 

(50,682

)

 

 

10,788

 

 

 

2,710

 

Adjusted net income

 

 

 

158,245

 

 

 

74,533

 

 

 

47,727

 

 

 

35,983

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP diluted earnings (loss) per share

 

 

$

1.08

 

 

$

1.07

 

 

$

0.19

 

 

$

(0.19

)

Restructuring, integration and other expenses (net of tax)

 

 

 

0.44

 

 

 

0.13

 

 

 

0.09

 

 

 

0.22

 

Amortization of intangible assets and other (net of tax)

 

 

 

0.28

 

 

 

0.04

 

 

 

0.09

 

 

 

0.15

 

Other expenses - equity investment impairments (net of tax)

 

 

 

0.15

 

 

 

-

 

 

 

0.00

 

 

 

0.15

 

Income tax (benefit) expense items, net

 

 

 

(0.37

)

 

 

(0.50

)

 

 

0.11

 

 

 

0.03

 

Adjusted diluted EPS

 

 

 

1.58

 

 

 

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, 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:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Third Quarter

 

Second Quarter

 

First Quarter

 

Fourth Quarter

 

Third Quarter

 

 

April 3,

 

January 2,

 

October 3,

 

June 27,

 

March 28,

 

 

2021

 

2021

 

2020

 

2020

 

2020

 

 

(in millions)

Sales of TI Products

 

$

1.7

 

$

49.6

 

$

241.0

 

$

322.5

 

$

400.6

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 third quarter and first nine months of fiscal 2021.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended

 

Nine Months 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

 

 

Q3-Fiscal

 

Q3-Fiscal

 

Q3-Fiscal

 

Q3-Fiscal

 

Extra

 

Q3-Fiscal

 

Q3-Fiscal

 

Q3-Fiscal

 

 

2021

 

2021(1)

 

2021(1)

 

2021

 

Week(2)

 

2021

 

2021(1)

 

2021(1)

 

 

(in millions)

Avnet

 

$

4,916.7

 

$

1.7

 

$

4,915.0

 

$

14,307.9

 

$

306.0

 

$

14,001.9

 

$

292.2

 

$

13,709.7

Avnet by region

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Americas

 

$

1,161.0

 

$

0.4

 

$

1,160.6

 

$

3,468.1

 

$

77.0

 

$

3,391.1

 

$

82.9

 

$

3,308.2

EMEA

 

 

1,585.6

 

 

0.5

 

 

1,585.1

 

 

4,412.6

 

 

97.0

 

 

4,315.6

 

 

124.2

 

 

4,191.4

Asia

 

 

2,170.1

 

 

0.8

 

 

2,169.3

 

 

6,427.2

 

 

132.0

 

 

6,295.2

 

 

85.1

 

 

6,210.1

Avnet by segment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EC

 

$

4,520.6

 

$

1.7

 

$

4,518.9

 

$

13,245.1

 

$

284.0

 

$

12,961.1

 

$

292.2

 

$

12,668.9

Farnell

 

 

396.1

 

 

 

 

396.1

 

 

1,062.8

 

 

22.0

 

 

1,040.8

 

 

 

 

1,040.8

_________________________
(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 third quarter and first nine months of fiscal 2021 compared to fiscal 2020.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended

 

Nine Months Ended

 

 

 

 

 

Sales As

 

Organic

 

 

 

 

 

 

 

 

 

 

 

Organic

 

 

Sales As

 

Reported

 

Sales

 

 

 

 

Sales As

 

 

 

 

Organic

 

Sales

 

 

Reported

 

and Organic

 

Adj for TI

 

 

 

 

Reported

 

 

 

 

Sales

 

Adj for TI

 

 

and

 

Year-Year %

 

Year-Year %

 

Sales As

 

Year-Year %

 

Organic

 

Year-Year %

 

Year-Year %

 

 

Organic

 

Change in

 

Change in

 

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

 

14.1

 

%

 

10.7

 

%

 

22.0

%

 

6.2

 

%

 

3.9

 

%

 

3.9

 

%

 

1.6

 

%

 

9.5

 

%

Avnet by region

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Americas

 

(3.5

)

%

 

(3.5

)

%

 

4.9

%

 

(3.8

)

%

 

(3.8

)

%

 

(6.0

)

%

 

(6.0

)

%

 

(0.2

)

%

EMEA

 

4.8

 

 

 

(3.4

)

 

 

6.5

 

 

0.1

 

 

 

(6.0

)

 

 

(2.1

)

 

 

(8.2

)

 

 

(1.8

)

 

Asia

 

36.2

 

 

 

35.0

 

 

 

50.3

 

 

17.7

 

 

 

17.0

 

 

 

15.3

 

 

 

14.6

 

 

 

25.4

 

 

Avnet by segment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EC

 

13.7

 

%

 

10.5

 

%

 

22.9

%

 

6.2

 

%

 

4.0

 

%

 

3.9

 

%

 

1.7

 

%

 

10.4

 

%

Farnell

 

18.2

 

 

 

12.3

 

 

 

12.3

 

 

6.1

 

 

 

2.4

 

 

 

3.9

 

 

 

0.2

 

 

 

0.2

 

 

_________________________  
(1) Sales growth rates excluding the impact of the termination of the TI distribution agreement.

Historical Segment Financial Information

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fiscal 2021

 

 

Fiscal

 

Third Quarter

 

Second Quarter

 

First Quarter

 

 

Year to Date

 

April 3,

 

January 2,

 

October 3,

 

 

2021*

 

2021

 

2021

 

2020

 

 

(in millions)

Sales:

 

 

 

 

 

 

 

 

 

 

 

 

Electronic Components

 

$

13,245.1

 

 

$

4,520.6

 

 

$

4,342.4

 

 

$

4,382.2

 

Farnell

 

 

1,062.8

 

 

 

396.1

 

 

 

325.8

 

 

 

340.9

 

Avnet sales

 

$

14,307.9

 

 

$

4,916.7

 

 

$

4,668.2

 

 

$

4,723.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income:

 

 

 

 

 

 

 

 

 

 

 

 

Electronic Components

 

$

306.9

 

 

$

118.6

 

 

$

103.9

 

 

$

84.4

 

Farnell

 

 

50.4

 

 

 

23.9

 

 

 

14.6

 

 

 

12.0

 

 

 

 

357.3

 

 

 

142.5

 

 

 

118.5

 

 

 

96.4

 

Corporate expenses

 

 

(102.1

)

 

 

(31.9

)

 

 

(39.0

)

 

 

(31.3

)

Restructuring, integration and other expenses

 

 

(55.9

)

 

 

(17.6

)

 

 

(11.9

)

 

 

(26.4

)

Amortization of acquired intangible assets and other

 

 

(35.9

)

 

 

(5.3

)

 

 

(10.4

)

 

 

(20.2

)

Avnet operating income

 

$

163.4

 

 

$

87.7

 

 

$

57.2

 

 

$

18.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales by geographic area:

 

 

 

 

 

 

 

 

 

 

 

 

Americas

 

$

3,468.1

 

 

$

1,161.0

 

 

$

1,101.5

 

 

$

1,205.7

 

EMEA

 

 

4,412.6

 

 

 

1,585.6

 

 

 

1,346.3

 

 

 

1,480.7

 

Asia

 

 

6,427.2

 

 

 

2,170.1

 

 

 

2,220.4

 

 

 

2,036.7

 

Avnet sales

 

$

14,307.9

 

 

$

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 fourth quarter of fiscal 2021.

 

 

 

 

 

 

 

 

 

Low End of

 

High End of

 

 

Guidance Range

 

Guidance Range

 

 

 

 

 

 

 

Adjusted diluted earnings per share guidance

 

$

0.71

 

 

$

0.77

 

Restructuring, integration and other expense (net of tax)

 

 

(0.15

)

 

 

(0.10

)

Amortization of intangibles and other (net of tax)

 

 

(0.06

)

 

 

(0.03

)

Income tax expense adjustments

 

 

(0.05

)

 

 

0.05

 

GAAP diluted earnings per share guidance

 

$

0.45

 

 

$

0.69

 

 

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