UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) April 23, 2009
AVNET, INC.
(Exact name of registrant as specified in its charter)
| New York | 1-4224 | 11-1890605 | ||
| (State or other jurisdiction | (Commission | (IRS Employer | ||
| Of incorporation) | File Number) | Identification No.) |
| 2211 South 47th Street, Phoenix, Arizona | 85034 | |
| (Address of principal executive offices) | (Zip Code) |
(480) 643-2000
(Registrant’s telephone number, including area code.)
(Registrant’s telephone number, including area code.)
N/A
(Former name and former address, if changed since last report.)
(Former name and former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions (see General Instruction
A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13.e-4(c))
Item 2.02. Results of Operations and Financial Condition.
On April 23, 2009, Avnet, Inc. issued a press release announcing its third quarter results of
operations for fiscal 2009. A copy of the press release is attached hereto as Exhibit 99.1 and is
incorporated herein by reference.
The information in this Current Report on Form 8-K and the Exhibit attached hereto is being
furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act
of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it
be deemed incorporated by reference in any filing under the Securities Act of 1933 except as shall
be expressly set forth in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
The following materials are attached as exhibits to this Current Report on Form 8-K:
| Exhibit | ||
| Number | Description | |
99.1
|
Press Release, dated April 23, 2009. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: April 23, 2009 | AVNET, INC. Registrant |
|||
| By: | /s/ Raymond Sadowski | |||
| Name: | Raymond Sadowski | |||
| Title: | Senior Vice President and Chief Financial Officer |
|||
Exhibit 99.1
|
Avnet, Inc. 2211 South 47th Street Phoenix, AZ 85034 |
PRESS RELEASE
Avnet, Inc. Reports Third Quarter Fiscal Year 2009 Results
Effective Management of Working Capital
Results in $474 million of Cash From Operations
Results in $474 million of Cash From Operations
Phoenix,
April 23, 2009 — Avnet, Inc. (NYSE:AVT) today
reported revenue of $3.70 billion for the third
quarter fiscal 2009 ended March 28, 2009, representing a decrease of 16.3% over the third quarter
fiscal 2008 and 10.5% excluding the impact of changes in foreign currency exchange rates. On a pro
forma (organic) basis, as defined in the Non-GAAP Financial Information Section, revenue was down
22.3% over the prior year third quarter. Net income for the third quarter fiscal 2009 was $18.0
million, or $0.12 per share on a diluted basis, as compared with net income of $107.2 million, or
$0.71 per share on a diluted basis, for the third quarter last year. Included in the current
quarter and year-ago quarter are restructuring, integration and other items amounting to $0.18 and
$0.05 per share on a diluted basis, respectively, as more fully described in the Non-GAAP Financial
Information section of this release. Excluding these charges in both periods, net income for the
current year third quarter was $44.8 million, or $0.30 per share on a diluted basis, as compared
with the prior year quarter’s net income of $114.8 million, or $0.76 per share on a diluted basis.
Operating income for the third quarter fiscal 2009 was $55.5 million, down 67% as compared with
operating income of $166.8 million in the year-ago quarter. Included in “Selling, general and
administrative expenses” for the current and prior year third quarters are restructuring,
integration and other charges amounting to $32.7 million and $10.9 million, respectively.
Excluding these charges, operating income for the third quarter fiscal 2009 was $88.2 million, down
50.4% as compared with $177.6 million in last year’s third quarter. Operating income as a
percentage of sales, excluding the items noted above, was 2.4% in the current year quarter as
compared with 4.0% last year. The charges in the current quarter are primarily related to
restructuring costs incurred in connection with the Company’s previously announced cost reduction
actions.
These third quarter results, excluding the impact of charges noted above, were negatively impacted
by $8.4 million of net expense in the “Other income (loss), net” category as compared with income
of $6.2 million last year. The impact on net income of these higher-than-usual “other expenses” was
partially offset by a lower effective tax rate.
Roy Vallee, Chairman and Chief Executive Officer, commented, “In our third fiscal quarter, revenues
and profits continued to deteriorate at Electronics Marketing while our Technology Solutions
operating group showed signs of stability. We continue to monitor the end markets across our
portfolio and react appropriately to align our costs and working capital to market realities. In
addition to the $200 million of annual cost reductions previously announced, we are initiating
another $25 million of annualized expense reductions which we expect to complete by the end of
September 2009, with the full benefit to be realized in the subsequent quarter. There are still
many questions on the macro economy, but the unprecedented speed with which the technology supply
chain reacted to the global demand slowdown suggests that we are getting closer to the bottom of
this cycle. We believe that with the combination of our
market position, value-based management culture and counter-cyclical balance sheet, we possess
unique attributes that allow us to continue to invest and enhance our competitive position for the
long term.”
1
Operating Group Results
Electronics Marketing (EM) sales of $2.10 billion in the third quarter fiscal 2009 were down 20.1%
year over year on a reported basis and down 15.1% when adjusted to exclude the impact of changes in
foreign currency exchange rates. On a pro forma basis, EM revenue decreased 26.4% year over year.
EM sales in the Americas, EMEA and Asia regions decreased 20.5%, 24.3% and 13.7%, respectively,
year over year on a reported basis. Excluding the impact of changes in foreign currency exchange
rates, revenue in the EMEA region was down 10.3% year over year. On a pro forma basis, EM sales in
the Americas, EMEA and Asia in the third quarter fiscal 2009 decreased 22.1%, 35.7% and 17.7%,
respectively, as compared with the year-ago quarter. EM operating income of $59.6 million for the
third quarter fiscal 2009 was down 61.2% over the prior year third quarter operating income of
$153.6 million and operating income margin of 2.8% was down 301 basis points as compared with the
prior year quarter.
Mr. Vallee added, “The decline that we experienced at EM in the December quarter accelerated during
the March quarter as the global slowdown negatively impacted the broad industrial markets that
drive our Americas and EMEA regions. In Asia however, we experienced a pickup in orders following
Chinese New Year that we believe was driven by a combination of inventory replenishment and the
positive impact of China’s stimulus package. While our cost reduction efforts are having their
expected beneficial impact, the dramatic rate of decline in revenue in the Americas and EMEA — our
most profitable regions — were major factors in the year-over-year decline in our operating income
dollars and margin for the quarter. Despite these challenges, our EM team did an excellent job
managing working capital as inventory declined 6% sequentially, and 10% on a pro forma basis
adjusted to exclude the impact of changes in foreign currency
exchange rates and the inventory increase associated with the
acquisitions of Abacus and NDI.”
Technology Solutions (TS) sales of $1.60 billion in the third quarter fiscal 2009 were down 10.8%
year over year on a reported basis and down 3.8% when adjusted to exclude the impact of changes in
foreign currency exchange rates. On a pro forma basis, TS revenue was down 16.2% year over year.
On a reported basis year over year, third quarter fiscal 2009 sales in Americas and EMEA were down
11.1% and 15.7%, respectively, while sales in Asia were up 19.2%. EMEA revenue was up 2.3%
excluding the impact of changes in foreign currency exchange rates. On a pro forma basis, third
quarter fiscal 2009 sales in the Americas and EMEA declined by 11.1% and 28.8%, respectively, while
sales in Asia were up 15.8% as compared with last year’s third quarter. TS operating income was
$42.2 million in the third quarter fiscal 2009, an increase of 2.0% as compared with the third
quarter fiscal 2008 operating income of $41.3 million, and operating income margin of 2.6%
increased by 33 basis points versus the prior year third quarter.
Mr. Vallee further added, “Technology Solutions met our expectations for both revenue and operating
income as business spending in the markets we serve, while still tepid, appears to have stabilized
over the past two quarters. We continued to see relative strength in software and services and are
also pleased with our solutions and vertical market practices that address higher growth
opportunities in the marketplace. TS year-over-year improvement in both operating income dollars
and margin was driven by an improvement in gross profit margin and benefits from our previously
announced cost reduction actions. Although we are reducing costs in response to the market
slowdown, we continue to invest in higher-growth emerging markets, new product lines, and tools and
resources that expand our solution practices and enhance the value we bring to the marketplace.”
Cash Flow
During the third quarter of fiscal 2009, the Company generated $474 million of cash from operations
and on a trailing twelve month basis has generated more than $1.0 billion. As a result, the
Company ended the quarter with $686 million of cash and cash equivalents and net debt (total debt
less cash and cash equivalents) of $354 million.
2
Ray Sadowski, Chief Financial Officer, stated, “As a result of the outstanding work of our team
around the globe, we significantly grew our cash flow from operations which allowed us to pay off
the $300 million of convertible notes that were put to us in March with cash on hand. In
addition, this strong cash flow generation, combined with our already strong liquidity position,
gives us the strategic flexibility to invest in our business, whether organically or through
acquisitions to create long-term shareholder value. We will continue to actively manage working
capital in an effort to keep our investments aligned with the expectations for growth in the
market.”
Outlook
For Avnet’s fourth quarter fiscal year 2009, management expects less-than-normal seasonality at
both EM and TS and is providing a wider range of forecasts due to the unpredictable nature of the
current economic environment. EM sales are anticipated to be in the range of $1.90 billion to
$2.20 billion and sales for TS are expected to be between $1.45 billion and $1.75 billion.
Accordingly, Avnet’s consolidated sales are forecasted to be between $3.35 billion and $3.95
billion for the fourth quarter fiscal year 2009. Management expects fourth quarter fiscal year 2009
earnings to be in the range of $0.30 to $0.38 per share. The above EPS guidance does not include
anticipated restructuring and integration charges related to the cost reductions noted earlier in
this release and the integration of businesses acquired. In addition, the above guidance assumes
that the average Euro to U.S. Dollar currency exchange rate for the fourth fiscal quarter of the
current fiscal year is $1.32 to €1.00. This compares with an average exchange rate of $1.56 to
€1.00 in the fourth quarter of fiscal 2008.
Forward Looking Statements
This press release contains certain “forward-looking statements” within the meaning of Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended. These statements are based on management’s current expectations and are subject to
uncertainty and changes in facts and circumstances. The forward-looking statements herein include
statements addressing future financial and operating results of Avnet and may include words such as
“will,” “anticipate,” “expect,” believe,” and “should,” and other words and terms of similar
meaning in connection with any discussions of future operating or financial performance or business
prospects. 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, any significant and unanticipated sales decline,
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. 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 (“GAAP”), the Company also discloses in this press release certain
non-GAAP financial information including adjusted operating income, adjusted net income and
adjusted diluted earnings per share. The Company also discloses revenue adjusted for the impact of
acquisitions (“pro forma revenue” or “organic revenue”). Management believes pro forma revenue
3
is a useful measure for evaluating current period performance as compared with prior periods and
understanding underlying trends.
Management believes that operating income adjusted for restructuring, integration and other charges
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 diluted earnings per share 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 diluted EPS excluding the impact of these items provides an important measure of the Company’s
net results of operations for the investing public. However, analysis of results and outlook on a
non-GAAP basis should be used as a complement to, and in conjunction with, data presented in
accordance with GAAP.
Items included in “Selling, general and administrative expenses” impacting third quarter fiscal
2009 results totaled $32.7 million pre-tax, $22.3 million after tax, and $0.15 per share and
consisted of restructuring and integration charges of $30.7 million pre-tax, and other charges of
$2.0 million pre-tax. In addition, the Company recognized additional tax reserves of $4.5 million,
$0.03 per share, for contingencies related to a prior acquisition partially offset by a tax
benefit.
Items impacting third quarter fiscal 2008 consisted of restructuring and integration charges which
totaled $10.9 million pre-tax, $7.5 million after-tax and $0.05 per share on a diluted basis.
| Diluted | ||||||||||||
| Op Income | Net Income | EPS | ||||||||||
| Third Quarter Ended Fiscal 2009 | $ in thousands, except per share data | |||||||||||
GAAP results |
$ | 55,473 | $ | 18,024 | $ | 0.12 | ||||||
Restructuring, integration and other charges |
32,679 | 22,272 | 0.15 | |||||||||
Additional tax reserves |
— | 4,474 | 0.03 | |||||||||
Adjusted results |
$ | 88,152 | $ | 44,770 | $ | 0.30 | ||||||
| Third Quarter Ended Fiscal 2008 | ||||||||||||
GAAP results |
$ | 166,753 | $ | 107,244 | $ | 0.71 | ||||||
Restructuring, integration and other charges |
$ | 10,857 | $ | 7,522 | $ | 0.05 | ||||||
Adjusted results |
$ | 177,610 | $ | 114,766 | $ | 0.76 | ||||||
Pro Forma (Organic) Revenue
Pro forma or Organic revenue is defined as revenue adjusted for the impact of acquisitions to
include the revenue recorded by these businesses as if the acquisitions had occurred at the
beginning of fiscal 2008. Prior period revenue adjusted for this impact is presented in the
following table:
4
| Revenue | Acquisition | Pro forma | ||||||||||
| as Reported | Revenue | Revenue | ||||||||||
| (in thousands) | ||||||||||||
Q1 Fiscal 2009 |
$ | 4,494,450 | $ | 164,481 | $ | 4,658,931 | ||||||
Q2 Fiscal 2009 |
4,269,178 | 127,917 | 4,397,095 | |||||||||
Q3 Fiscal 2009 |
3,700,836 | — | 3,700,836 | |||||||||
Fiscal 2009 YTD |
$ | 12,464,464 | $ | 292,398 | $ | 12,756,862 | ||||||
Q1 Fiscal 2008 |
$ | 4,098,718 | $ | 530,947 | $ | 4,629,665 | ||||||
Q2 Fiscal 2008 |
4,753,145 | 432,879 | 5,186,024 | |||||||||
Q3 Fiscal 2008 |
4,421,645 | 341,155 | 4,762,800 | |||||||||
Q4 Fiscal 2008 |
4,679,199 | 317,945 | 4,997,144 | |||||||||
Fiscal year 2008 |
$ | 17,952,707 | $ | 1,622,926 | $ | 19,575,633 | ||||||
“Acquisition Revenue” as presented in the preceding table includes the following acquisitions:
| Acquired Business | Operating Group | Acquisition Date | ||
Flint Distribution Ltd.
|
EM | 07/05/07 | ||
Division of Magirus Group
|
TS | 10/06/07 | ||
Betronik GmbH
|
EM | 10/31/07 | ||
ChannelWorx
|
TS | 10/31/07 | ||
Division of Acal plc Ltd.
|
TS | 12/17/07 | ||
YEL Electronics Hong Kong Ltd.
|
EM | 12/31/07 | ||
Azzurri Technology Ltd.
|
EM | 3/31/08 | ||
Horizon Technology Group plc
|
TS | 6/30/08 | ||
Source Electronics Corporation
|
EM | 6/30/08 | ||
Ontrack Solutions Pvt. Ltd.
|
TS | 7/31/08 | ||
Nippon Denso Industry Co., Ltd.
|
EM | 12/29/08 | ||
Abacus Group plc
|
EM | 01/20/09 |
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) is one of the largest distributors of electronic components, computer
products and embedded technology serving customers in more than 70 countries worldwide. Avnet
accelerates its partners’ success by connecting the world’s leading technology suppliers with a
broad base of more than 100,000 customers by providing cost-effective, value-added services and
solutions. For the fiscal year ended June 28, 2008, Avnet generated revenue of $17.95 billion. For
more information, visit www.avnet.com. (AVT_IR)
Investor Relations Contact:
Avnet, Inc.
Vincent Keenan
Investor Relations
(480) 643-7053
investorrelations@avnet.com
Vincent Keenan
Investor Relations
(480) 643-7053
investorrelations@avnet.com
5
AVNET, INC.
NOTES TO CONSOLIDATED STATEMENTS OF OPERATIONS
THIRD QUARTER AND FIRST NINE MONTHS OF FISCAL 2009
NOTES TO CONSOLIDATED STATEMENTS OF OPERATIONS
THIRD QUARTER AND FIRST NINE MONTHS OF FISCAL 2009
(1) Included in “Selling, general and administrative expenses” for the third quarter of fiscal 2009
are restructuring, integration and other charges which totaled $32,679,000 pre-tax, $22,272,000
after tax and $0.15 per share. Restructuring and integration costs of $30,683,000 pre-tax consisted
of severance and costs to exit certain facilities as part of the Company’s cost reduction actions
and charges related to the integration of recently acquired businesses. Other charges included
$1,996,000 pre-tax related to acquisition adjustments recognized after the purchase price
allocation period. In addition to the above, the Company also recognized $4,474,000, or $0.03 per
share, for additional tax reserves for contingencies related to a prior acquisition partially
offset by a tax benefit for interest on a tax settlement.
Included in “Selling, general and administrative expenses” in the third quarter and first nine
months of fiscal 2008 were restructuring, integration and other charges, amounting to $10,857,000
pre-tax, $7,522,000 after tax and $0.05 per share on a diluted basis. The charges related to the
integrations of recently acquired businesses and initial cost reductions required to improve the
performance at certain business units in the Company’s portfolio. The charges consisted primarily
of severance, incremental costs incurred during the integration period and other charges.
(2) Results for the first nine months of fiscal 2009 included impairment charges of $1,348,845,000
pre-tax, $1,314,700,000 after tax and $8.72 per share. The Company performed an analysis to
determine the impairment of goodwill and other intangible assets as of December 27, 2008 in
accordance with Statement of Accounting Financial Standards (SFAS) No. 142, “Goodwill and Other
Intangible Assets” and SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived
Assets.” The results of the analysis indicated that the fair values of four of the Company’s six
reporting units were below their carrying values as of the end of the second quarter of fiscal
2009. Accordingly, the Company recognized a non-cash goodwill impairment charge of $1,317,452,000
pre-tax and $1,283,308,000 after-tax in its second quarter of fiscal 2009 results. The Company
also concluded that the carrying value of certain intangible assets were impaired and recognized a
non-cash impairment charge of $31,393,000 pre- and after-tax and $0.21 per share. In addition,
results for the first nine months included restructuring, integration and other charges which
totaled $55,819,000 pre-tax, $40,006,000 after tax and $0.26 per share. Restructuring and
integration charges amounted to $46,902,000 pre-tax, loss on investments totaled $3,091,000 pre-tax
and other charges totaled $1,996,000 pre-tax. The Company recognized intangible asset amortization
expense of $3,830,000 related to the completion of the valuation of identifiable intangible assets
for several acquisitions which closed during the prior fiscal year. In addition to the above, the
Company also recognized a net tax benefit of $21,672,000, or $0.14 per share, in the first nine
months of fiscal 2009 primarily related to the settlement of income tax audits in Europe.
11
(3) During the first nine months of fiscal 2008, the Company recognized a gain on the sale of
assets totaling $7,477,000 pre-tax, $6,320,000 after tax and $0.04 per share on a diluted basis.
In October, the Company sold a building in the EMEA region and recognized a gain of $4,477,000 pre-
and after tax and $0.03 per share on a diluted basis. Due to local tax allowances, the building
sale was not taxable. The Company also recognized a gain of $3,000,000 pre-tax, $1,843,000
after-tax and $0.01 per share on a diluted basis for the receipt of contingent purchase price
proceeds related to a prior sale of a business.
12
AVNET, INC.
FINANCIAL HIGHLIGHTS
(MILLIONS EXCEPT PER SHARE DATA)
FINANCIAL HIGHLIGHTS
(MILLIONS EXCEPT PER SHARE DATA)
| THIRD QUARTERS ENDED | ||||||||
| MARCH 28, | MARCH 29, | |||||||
| 2009 * | 2008 * | |||||||
Sales |
$ | 3,700.8 | $ | 4,421.6 | ||||
Income before income taxes |
29.5 | 154.3 | ||||||
Net income |
18.0 | 107.2 | ||||||
Net income per share: |
||||||||
Basic |
$ | 0.12 | $ | 0.71 | ||||
Diluted |
$ | 0.12 | $ | 0.71 | ||||
| NINE MONTHS ENDED | ||||||||
| MARCH 28, | MARCH 29, | |||||||
| 2009 * | 2008 * | |||||||
Sales |
$ | 12,464.5 | $ | 13,273.5 | ||||
Income (loss) before income taxes |
(1,058.9 | ) | 514.2 | |||||
Net income (loss) |
(1,091.6 | ) | 355.0 | |||||
Net income (loss) per share: |
||||||||
Basic |
($7.24 | ) | $ | 2.36 | ||||
Diluted |
($7.24 | ) | $ | 2.33 | ||||
| * | See Notes to Consolidated Statements of Operations on Page 11. |
6
AVNET, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(THOUSANDS EXCEPT PER SHARE DATA)
CONSOLIDATED STATEMENTS OF OPERATIONS
(THOUSANDS EXCEPT PER SHARE DATA)
| THIRD QUARTERS ENDED | NINE MONTHS ENDED | |||||||||||||||
| MARCH 28, | MARCH 29, | MARCH 28, | MARCH 29, | |||||||||||||
| 2009 * | 2008 * | 2009 * | 2008 * | |||||||||||||
Sales |
$ | 3,700,836 | $ | 4,421,645 | $ | 12,464,464 | $ | 13,273,508 | ||||||||
Cost of sales |
3,238,366 | 3,842,918 | 10,884,315 | 11,571,601 | ||||||||||||
Gross profit |
462,470 | 578,727 | 1,580,149 | 1,701,907 | ||||||||||||
Selling, general and administrative
expenses (Note 1 *) |
406,997 | 411,974 | 1,230,059 | 1,162,091 | ||||||||||||
Impairment charges (Note 2 * ) |
— | — | 1,348,845 | — | ||||||||||||
Operating income (loss) |
55,473 | 166,753 | (998,755 | ) | 539,816 | |||||||||||
Other income (loss), net |
(8,364 | ) | 6,205 | (8,196 | ) | 21,766 | ||||||||||
Interest expense |
(17,608 | ) | (18,683 | ) | (51,903 | ) | (54,864 | ) | ||||||||
Gain on sale of assets (Note 3 *) |
— | — | — | 7,477 | ||||||||||||
Income (loss) before income taxes |
29,501 | 154,275 | (1,058,854 | ) | 514,195 | |||||||||||
Income tax provision |
11,477 | 47,031 | 32,730 | 159,208 | ||||||||||||
Net income (loss) |
$ | 18,024 | $ | 107,244 | ($1,091,584 | ) | $ | 354,987 | ||||||||
Net earnings (loss) per share: |
||||||||||||||||
Basic |
$ | 0.12 | $ | 0.71 | ($7.24 | ) | $ | 2.36 | ||||||||
Diluted |
$ | 0.12 | $ | 0.71 | ($7.24 | ) | $ | 2.33 | ||||||||
Shares used to compute earnings
(loss) per share: |
||||||||||||||||
Basic |
151,147 | 150,440 | 150,810 | 150,177 | ||||||||||||
Diluted |
151,147 | 151,717 | 150,810 | 152,717 | ||||||||||||
| * | See Notes to Consolidated Statements of Operations on Page 11. |
7
AVNET, INC.
CONSOLIDATED BALANCE SHEETS
(THOUSANDS)
CONSOLIDATED BALANCE SHEETS
(THOUSANDS)
| MARCH 28, | JUNE 28, | |||||||
| 2009 | 2008 | |||||||
Assets: |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 685,736 | $ | 640,449 | ||||
Receivables, net |
2,660,406 | 3,367,443 | ||||||
Inventories |
1,613,894 | 1,894,492 | ||||||
Prepaid and other current assets |
122,908 | 68,762 | ||||||
Total current assets |
5,082,944 | 5,971,146 | ||||||
Property, plant and equipment, net |
295,144 | 227,187 | ||||||
Goodwill |
569,335 | 1,728,904 | ||||||
Other assets |
298,513 | 272,893 | ||||||
Total assets |
6,245,936 | 8,200,130 | ||||||
Less liabilities: |
||||||||
Current liabilities: |
||||||||
Borrowings due within one year |
97,062 | 43,804 | ||||||
Accounts payable |
1,814,462 | 2,293,243 | ||||||
Accrued expenses and other |
509,920 | 442,545 | ||||||
Total current liabilities |
2,421,444 | 2,779,592 | ||||||
Long-term debt, less due within one year |
942,700 | 1,181,498 | ||||||
Other long-term liabilities |
134,705 | 104,349 | ||||||
Total liabilities |
3,498,849 | 4,065,439 | ||||||
Shareholders’ equity |
$ | 2,747,087 | $ | 4,134,691 | ||||
8
AVNET, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(THOUSANDS)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(THOUSANDS)
| NINE MONTHS ENDED | ||||||||
| MARCH 28, | MARCH 29, | |||||||
| 2009 | 2008 | |||||||
Cash flows from operating activities: |
||||||||
Net income (loss) |
($1,091,584 | ) | $ | 354,987 | ||||
Non-cash and other reconciling items: |
||||||||
Depreciation and amortization |
50,792 | 43,864 | ||||||
Deferred income taxes |
(86,084 | ) | 50,944 | |||||
Stock-based compensation |
14,416 | 20,412 | ||||||
Impairment charges |
1,348,845 | — | ||||||
Other, net |
29,116 | 9,275 | ||||||
Changes in (net of effects from business acquisitions): |
||||||||
Receivables |
621,999 | 116,199 | ||||||
Inventories |
247,545 | (44,928 | ) | |||||
Accounts payable |
(483,231 | ) | (237,606 | ) | ||||
Accrued expenses and other, net |
136,321 | (116,767 | ) | |||||
Net cash flows provided by operating activities |
788,135 | 196,380 | ||||||
Cash flows from financing activities: |
||||||||
Repayment of notes |
(298,059 | ) | — | |||||
Repayment of bank debt, net |
(25,185 | ) | (1,773 | ) | ||||
Repayment of other debt, net |
(6,049 | ) | (19,356 | ) | ||||
Other, net |
1,282 | 6,561 | ||||||
Net cash flows used for financing activities |
(328,011 | ) | (14,568 | ) | ||||
Cash flows from investing activities: |
||||||||
Purchases of property, plant, and equipment |
(89,252 | ) | (59,675 | ) | ||||
Cash proceeds from sales of property, plant and
equipment |
9,840 | 12,109 | ||||||
Acquisitions of operations, net of cash acquired |
(309,864 | ) | (352,703 | ) | ||||
Cash proceeds from divestiture activities |
— | 3,000 | ||||||
Net cash flows used for investing activities |
(389,276 | ) | (397,269 | ) | ||||
Effect of exchange rates on cash and cash equivalents |
(25,561 | ) | 39,569 | |||||
Cash and cash equivalents: |
||||||||
— increase (decrease) |
45,287 | (175,888 | ) | |||||
— at beginning of period |
640,449 | 557,350 | ||||||
— at end of period |
$ | 685,736 | $ | 381,462 | ||||
9
AVNET, INC.
SEGMENT INFORMATION
(MILLIONS)
SEGMENT INFORMATION
(MILLIONS)
| THIRD QUARTERS ENDED | NINE MONTHS ENDED | |||||||||||||||||
| MARCH 28, | MARCH 29, | MARCH 28, | MARCH 29, | |||||||||||||||
| 2009 | 2008 | 2009 | 2008 | |||||||||||||||
| SALES: | ||||||||||||||||||
Electronics Marketing |
$ | 2,096.6 | $ | 2,623.8 | $ | 7,065.4 | $ | 7,594.1 | ||||||||||
Technology Solutions |
1,604.2 | 1,797.8 | 5,399.1 | 5,679.4 | ||||||||||||||
Consolidated |
$ | 3,700.8 | $ | 4,421.6 | $ | 12,464.5 | $ | 13,273.5 | ||||||||||
OPERATING INCOME (LOSS): |
||||||||||||||||||
Electronics Marketing |
$ | 59.6 | $ | 153.6 | $ | 297.4 | $ | 410.3 | ||||||||||
Technology Solutions |
42.2 | 41.3 | 160.2 | 199.2 | ||||||||||||||
Corporate |
(13.6 | ) | (17.3 | ) | (51.8 | ) | (58.8 | ) | ||||||||||
| $ | 88.2 | $ | 177.6 | $ | 405.8 | $ | 550.7 | |||||||||||
Impairment charges |
— | — | (1,348.8 | ) | — | |||||||||||||
Restructuring, integration and other charges |
(32.7 | ) | (10.9 | ) | (55.8 | ) | (10.9 | ) | ||||||||||
Consolidated |
$ | 55.5 | $ | 166.7 | ($998.8 | ) | $ | 539.8 | ||||||||||
10