Table of Contents

SECURITIES AND EXCHANGE COMMISSION

FORM 8-K

CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): July 30, 2003

AVNET, INC.

New York

1-4224		11-1890605
(Commission File Number)		(I.R.S. Employer Identification No.)

2211 South 47th Street, Phoenix, Arizona				85034
(Address of principal executive offices)				(Zip Code)

(480) 643-2000

Not Applicable

 

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	Item 5. Other Events.
	Item 7. Financial Statements and Exhibits.
SIGNATURE

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Table of Contents

Item 5. Other Events.

     Reconciliation of Non-GAAP financial information contained in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section of the Company’s Annual Report on Form 10-K for the fiscal year ended June 28, 2002, Quarterly Report on Form 10-Q for the fiscal quarter ended September 27, 2002 and Quarterly Report on Form 10-Q for the fiscal quarter ended December 27, 2002. In addition to disclosing financial results that are determined in accordance with generally accepted accounting principles (GAAP), the Company also discloses pro forma or non-GAAP results of operations that exclude certain items. Management believes that providing this additional information is useful to investors to better assess and understand operating performance, especially when comparing results with previous periods or forecasting performance for future periods. Management believes the pro forma measures also help indicate underlying trends in the business. Management also uses pro forma measures to establish operational goals and, in some cases, for measuring performance for compensation purposes.

Avnet, Inc.
Index of Reconciliation Schedules

Page #		Description		Periods covered		Schedule(s)
Form 10-K for the Year Ended June 28, 2002
21-22		Per share impact of special charge activity (quarterly and fiscal year impacts)		Fiscal years 2000 through 2002		1 through 10
23-24		Gross profit margins, operating expense as a percentage of sales and operating profit margins before and after special charge activity		Fiscal years 2000 through 2002		1 through 3
24		Annualized operating expense reductions, including pro forma adjustment for VEBA Group operating expenses		2nd quarter of fiscal 2001 and 4th quarter of fiscal 2002		11
24-25		Operating margin by segment, before and after special charge activity		4th quarter of fiscal 2002 and 4th quarter of fiscal 2001		12
25-26		Income from continuing operations, net income and per share amounts before and after special charge activity		Fiscal years 2000 through 2002		1 through 3
Form 10-Q for Quarter Ended September 27, 2002
15		Reconciliation of gross profit margins, before and after special charge activity, for the five quarters ended September 27, 2002 (trough of industry down-cycle) and for the six quarters ended June 29, 2001 (most recent industry up-cycle)		Quarter ended March 31, 2000 through quarter ended September 27, 2002		13
15-16		Operating expenses, operating expenses as a percentage of sales, operating income (loss), net income (loss) and earnings (loss) per share for the quarter ended June 28, 2002, before and after special charge activity		Quarter ended June 28, 2002		6
15		Operating expenses for the second quarter of fiscal 2001, including pro forma adjustment for VEBA Group operating expenses and the elimination of goodwill amortization		Quarter ended December 29, 2000		11
17		Operating margin by segment, before and after special charge activity		Quarter ended June 28, 2002		12
17		$1.6 billion pro forma debt reduction since second quarter of fiscal 2001, assuming asset securitization as debt		Quarter ended December 29, 2000 and quarter ended September 27, 2002		14
Form 10-Q for Quarter Ended December 27, 2002
16-18		Operating expenses, operating expenses as a percentage of sales, operating income (loss), operating income (loss) as a percentage of sales, net income (loss) and earnings (loss) per share for the quarter ended December 27, 2002, before and after special charge activity		Quarter ended December 27, 2002		5
16		Quarterly operating expense reduction, including pro forma adjustment for VEBA Group operating expenses, the elimination of goodwill amortization and the impact of changes in foreign currency exchange rates.		Quarter ended December 29, 2000 and quarter ended December 27, 2002		15
16-18		Operating expenses, operating expenses as a percentage of sales, operating income (loss), operating income (loss) as a percentage of sales, net income (loss) and earnings (loss) per share for the first half ended December 27, 2002, before and after special charge activity.		First half ended December 27, 2002		4
18		$1.88 billion pro forma debt reduction since second quarter of fiscal 2001, assuming drawings under asset securitization as debt		Quarter ended December 29, 2000 and quarter ended December 27, 2002		14

 

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SCHEDULE 1

AVNET, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(THOUSANDS EXCEPT PERCENTAGES AND PER SHARE DATA)

				FISCAL YEAR ENDED JUNE 28, 2002 (1)
				REPORTED				SPECIAL				ADJUSTED
				RESULTS				ITEMS				RESULTS
Sales				$	8,920,248			$	—			$	8,920,248
Cost of sales					7,697,434				(21,600	)			7,675,834
Gross profit					1,222,814				(21,600	)			1,244,414
		Gross profit percentage			13.71	%							13.95	%
Selling, general and administrative expenses					1,225,799				(58,023	)			1,167,776
		SG&A expenses as percentage of sales			13.74	%							13.09	%
Operating income (loss)					(2,985	)			79,623				76,638
		Operating income (loss) as percentage of sales			-0.03	%							0.86	%
Other income, net					6,755				—				6,755
Interest expense					(124,583	)			—				(124,583	)
Loss before income taxes					(120,813	)			79,623				(41,190	)
Income tax benefit					(36,377	)			17,539				(18,838	)
Loss before cumulative effect of change in accounting principle					(84,436	)			62,084				(22,352	)
Cumulative effect of change in accounting principle					(580,495	)			—				(580,495	)
Net loss					($664,931	)		$	62,084				($602,847	)
Net loss per share before cumulative effect of change in accounting principle:
	Basic				($0.71	)		$	0.52				($0.19	)
	Diluted				($0.71	)		$	0.52				($0.19	)
Net loss per share:
	Basic				($5.61	)		$	0.52				($5.09	)
	Diluted				($5.61	)		$	0.52				($5.09	)
Shares used to compute loss per share:
	Basic				118,561				118,561				118,561
	Diluted				118,561				118,561				118,561

(1)		The results for the fiscal year shown above exclude the impact of incremental special charges related to the value of assets acquired in connection with the acquisition of Kent Electronics, which was accounted for as a “Pooling-of-Interests,” the impairment of investments in Internet-related businesses and severance costs. The special charges amounted to $79.6 million pre-tax ($21.6 million included in cost of sales and $58.0 million included in selling, general and administrative expenses), $62.1 million after tax and $0.52 per diluted share.

 

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SCHEDULE 2

AVNET, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(THOUSANDS EXCEPT PERCENTAGES AND PER SHARE DATA)

				FISCAL YEAR ENDED JUNE 29, 2001 (1)
				REPORTED				SPECIAL				ADJUSTED
				RESULTS				ITEMS				RESULTS
Sales				$	12,814,010			$	—			$	12,814,010
Cost of sales					10,948,484				(80,596	)			10,867,888
Gross profit					1,865,526				(80,596	)			1,946,122
		Gross profit percentage			14.56	%							15.19	%
Selling, general and administrative expenses					1,611,874				(246,889	)			1,364,985
		SG&A expenses as percentage of sales			12.58	%							10.65	%
Operating income					253,652				327,485				581,137
		Operating income as percentage of sales			1.98	%							4.54	%
Other income, net					25,495				—				25,495
Interest expense					(191,895	)			—				(191,895	)
Income before income taxes					87,252				327,485				414,737
Income tax provision					87,155				90,793				177,948
Income from continuing operations					97				236,692				236,789
Income from discontinued operations, net of tax					15,305				—				15,305
Net income				$	15,402			$	236,692			$	252,094
Earnings per share from continuing operations:
	Basic			$	0.00			$	2.02			$	2.02
	Diluted			$	0.00			$	1.99			$	1.99
Net earnings per share:
	Basic			$	0.13			$	2.02			$	2.15
	Diluted			$	0.13			$	1.99			$	2.12
Shares used to compute earnings per share:
	Basic				117,263				117,263				117,263
	Diluted				118,815				118,815				118,815

(1)		The results for the fiscal year shown above exclude the impact of incremental special charges related to the acquisition and integration of Kent Electronics, which was accounted for as a “Pooling-of-Interests,” and other integration, restructuring and cost cutting initiatives taken in response to business conditions. The special charges amounted to $327.5 million pre-tax ($80.6 million included in cost of sales and $246.9 million included in selling, general and administrative expenses), $236.7 million after-tax and $1.99 per diluted share.

 

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SCHEDULE 3

AVNET, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(THOUSANDS EXCEPT PERCENTAGES AND PER SHARE DATA)

				FISCAL YEAR ENDED JUNE 30, 2000 (1)
				REPORTED				SPECIAL				ADJUSTED
				RESULTS				ITEMS				RESULTS
Sales				$	9,915,042			$	—			$	9,915,042
Cost of sales					8,470,257				(11,787	)			8,458,470
Gross profit					1,444,785				(11,787	)			1,456,572
		Gross profit percentage			14.57	%							14.69	%
Selling, general and administrative expenses					1,076,793				(37,177	)			1,039,616
		SG&A expenses as percentage of sales			10.86	%							10.49	%
Operating income					367,992				48,964				416,956
		Operating income as percentage of sales			3.71	%							4.21	%
Other income, net					10,452				—				10,452
Interest expense					(94,798	)			—				(94,798	)
Income before income taxes					283,646				48,964				332,610
Income tax provision					121,082				18,538				139,620
Income from continuing operations					162,564				30,426				192,990
Income from discontinued operations, net of tax					828				—				28
Net income				$	163,392			$	30,426			$	193,818
Earnings per share from continuing operations:
	Basic			$	1.52			$	0.29			$	1.81
	Diluted			$	1.50			$	0.28			$	1.78
Net earnings per share:
	Basic			$	1.53			$	0.29			$	1.82
	Diluted			$	1.51			$	0.28			$	1.79
Shares used to compute earnings per share:
	Basic				106,627				106,627				106,627
	Diluted				108,257				108,257				108,257

(1)		The results for the fiscal year shown above exclude the impact of incremental special charges associated with: (a) the integration of Marshall Industries, SEI Eurotronics and Macro into EM; (b) the integration of JBA Computer Solutions into CM North America; (c) the reorganization of EM Asia; (d) the reorganization of EM’s European operations including costs related to the consolidation of EM’s European warehousing operations; and (e) costs incurred in connection with certain litigation brought by the Company. The special charges amounted to $49.0 million pre-tax ($11.8 million included in cost of sales and $37.2 million included in selling, general and administrative expenses), $30.4 million after-tax and $0.28 per diluted share.

 

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SCHEDULE 4

AVNET, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(THOUSANDS EXCEPT PERCENTAGES AND PER SHARE DATA)

				FIRST HALF ENDED DECEMBER 27, 2002
				REPORTED				SPECIAL				ADJUSTED
				RESULTS				ITEMS (1)				RESULTS
Sales				$	4,520,555			$	—			$	4,520,555
Cost of sales					3,907,370				—				3,907,370
Gross profit					613,185				—				613,185
		Gross profit percentage			13.56	%							13.56	%
Selling, general and administrative expenses					668,424				(106,765	)			561,659
		SG&A expenses as percentage of sales			14.79	%							12.42	%
Operating income (loss)					(55,239	)			106,765				51,526
		Operating income (loss) as percentage of sales			-1.22	%							1.14	%
Other income, net					10,596				—				10,596
Interest expense					(51,337	)			—				(51,337	)
Income (loss) before income taxes					(95,980	)			106,765				10,785
Income tax provision (benefit)					(36,835	)			41,016				4,181
Net income (loss)					($59,145	)		$	65,749			$	6,604
Net earnings (loss) per share:
	Basic				($0.49	)		$	0.55			$	0.06
	Diluted				($0.49	)		$	0.55			$	0.06
Shares used to compute earnings (loss) per share:
	Basic				119,419				119,419				119,419
	Diluted				119,419				119,419				119,419

(1)		The results for the first half ended December 27, 2002 shown above include the impact of incremental special charges recorded in connection with cost cutting initiatives including severance costs, charges for consolidation of facilities and write-offs of certain capitalized IT-related initiatives. The special charges amounted to $106.8 million pre-tax (all of which is included in selling, general and administrative expenses), $65.7 million after-tax and $0.55 per diluted share.

 

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SCHEDULE 5

AVNET, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(THOUSANDS EXCEPT PERCENTAGES AND PER SHARE DATA)

				SECOND QUARTER ENDED DECEMBER 27, 2002
				REPORTED				SPECIAL				ADJUSTED
				RESULTS				ITEMS (1)				RESULTS
Sales				$	2,346,665			$	—			$	2,346,665
Cost of sales					2,031,099				—				2,031,099
Gross profit					315,566				—				315,566
		Gross profit percentage			13.45	%							13.45	%
Selling, general and administrative expenses					390,758				(106,765	)			283,993
		SG&A expenses as percentage of sales			16.65	%							12.10	%
Operating income (loss)					(75,192	)			106,765				31,573
		Operating income (loss) as percentage of sales			-3.20	%							1.35	%
Other income, net					4,658				—				4,658
Interest expense					(24,306	)			—				(24,306	)
Income (loss) before income taxes					(94,840	)			106,765				11,925
Income tax provision (benefit)					(36,183	)			41,016				4,833
Net income (loss)					($58,657	)		$	65,749			$	7,092
Net earnings (loss) per share:
	Basic				($0.49	)		$	0.55			$	0.06
	Diluted				($0.49	)		$	0.55			$	0.06
Shares used to compute earnings (loss) per share:
	Basic				119,419				119,419				119,419
	Diluted				119,419				119,419				119,419

(1)		The results for the second quarter ended December 27, 2002 shown above include the impact of incremental special charges recorded in connection with cost cutting initiatives including severance costs, charges for consolidation of facilities and write-offs of certain capitalized IT-related initiatives. The special charges amounted to $106.8 million pre-tax (all of which is included in selling, general and administrative expenses), $65.7 million after-tax and $0.55 per diluted share.

 

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SCHEDULE 6

AVNET, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(THOUSANDS EXCEPT PERCENTAGES AND PER SHARE DATA)

				FOURTH QUARTER ENDED JUNE 28, 2002 (1)
				REPORTED				SPECIAL				ADJUSTED
				RESULTS				ITEMS				RESULTS
Sales				$	2,144,752			$	—			$	2,144,752
Cost of sales					1,862,105				(21,600	)			1,840,505
Gross profit					282,647				(21,600	)			304,247
		Gross profit percentage			13.18	%							14.19	%
Selling, general and administrative expenses					336,074				(58,023	)			278,051
		SG&A expenses as percentage of sales			15.67	%							12.96	%
Operating income (loss)					(53,427	)			79,623				26,196
		Operating income (loss) as percentage of sales			-2.49	%							1.22	%
Other income, net					2,005				—				2,005
Interest expense					(26,451	)			—				(26,451	)
Income (loss) before income taxes					(77,873	)			79,623				1,750
Income tax provision (benefit)					(16,472	)			17,539				1,067
Net income (loss)					($61,401	)		$	62,084			$	683
Net earnings (loss) per share:
	Basic				($0.51	)		$	0.52			$	0.01
	Diluted				($0.51	)		$	0.52			$	0.01
Shares used to compute earnings (loss) per share:
	Basic				119,397				119,397				119,397
	Diluted				119,397				119,397				119,397

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(1)

The results for the fourth quarter shown above exclude the impact of incremental special charges related to the value of assets acquired in connection with the acquisition of Kent Electronics, which was accounted for as a “Pooling-of-Interests,” the impairment of investments in Internet-related businesses and severance costs. The special charges amounted to $79.6 million pre-tax ($21.6 million included in cost of sales and $58.0 million included in selling, general and administrative expenses), $62.1 million after tax and $0.52 per diluted share.

 

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SCHEDULE 7

AVNET, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(THOUSANDS EXCEPT PERCENTAGES AND PER SHARE DATA)

				FOURTH QUARTER ENDED JUNE 29, 2001 (1)
				REPORTED				SPECIAL				ADJUSTED
				RESULTS				ITEMS				RESULTS
Sales				$	2,537,755			$	—			$	2,537,755
Cost of sales					2,225,323				(80,596	)			2,144,727
Gross profit					312,432				(80,596	)			393,028
		Gross profit percentage			12.31	%							15.49	%
Selling, general and administrative expenses					590,058				(246,889	)			343,169
		SG&A expenses as percentage of sales			23.25	%							13.52	%
Operating income (loss)					(277,626	)			327,485				49,859
		Operating income (loss) as percentage of sales			-10.94	%							1.96	%
Other income, net					8,397				—				8,397
Interest expense					(46,328	)			—				(46,328	)
Income (loss) before income taxes					(315,557	)			327,485				11,928
Income tax provision (benefit)					(84,521	)			90,793				6,272
Income (loss) from continuing operations					(231,036	)			236,692				5,656
Loss from discontinued operations, net of tax					(5,111	)			—				(5,111	)
Net income (loss)					($236,147	)		$	236,692			$	545
Net earnings (loss) per share:
	Basic				($2.01	)		$	2.01			$	0.00
	Diluted				($2.01	)		$	2.01			$	0.00
Shares used to compute earnings (loss) per share:
	Basic				117,697				117,697				117,697
	Diluted				117,697				117,697				117,697

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(1)

The results for the fourth quarter shown above exclude the impact of incremental special charges related to the acquisition and integration of Kent Electronics, which was accounted for as a “Pooling-of-Interests,” and other integration, restructuring and cost cutting initiatives taken in response to business conditions. The special charges amounted to $327.5 million pre-tax ($80.6 million included in cost of sales and $246.9 million included in selling, general and administrative expenses), $236.7 million after-tax and $2.01 per diluted share.

 

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SCHEDULE 8

AVNET, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(THOUSANDS EXCEPT PERCENTAGES AND PER SHARE DATA)

				THIRD QUARTER ENDED MARCH 31, 2000 (1)
				REPORTED				SPECIAL				ADJUSTED
				RESULTS				ITEMS				RESULTS
Sales				$	2,884,498			$	—			$	2,884,498
Cost of sales					2,459,921				(1,496	)			2,458,425
Gross profit					424,577				(1,496	)			426,073
		Gross profit percentage			14.72	%							14.77	%
Selling, general and administrative expenses					314,517				(13,327	)			301,190
		SG&A expenses as percentage of sales			10.90	%							10.44	%
Operating income					110,060				14,823				124,883
		Operating income as percentage of sales			3.82	%							4.33	%
Other income, net					1,403				—				1,403
Interest expense					(29,203	)			—				(29,203	)
Income before income taxes					82,260				14,823				97,083
Income tax provision					34,755				5,946				40,701
Income from continuing operations					47,505				8,877				56,382
Loss from discontinued operations, net of tax					(971	)			—				(971	)
Net income				$	46,534			$	8,877			$	55,411
Net earnings per share:
	Basic			$	0.41			$	0.08			$	0.49
	Diluted			$	0.41			$	0.08			$	0.49
Shares used to compute earnings per share:
	Basic				112,351				112,351				112,351
	Diluted				114,168				114,168				114,168

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(1)

The results for the third quarter shown above exclude the impact of incremental special charges related to the (a) the integration Eurotronics BV and SEI Macro Group into EM EMEA; (b) the integration of JBA Computer Solutions into CM North America; and (c) costs related to the consolidation of EM’s European warehousing operations. The special charges amounted to $14.8 million pre-tax ($1.5 million included in cost of sales and $13.3 million included in selling, general and administrative expenses), $8.9 million after tax and $0.08 per diluted share.

 

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Table of Contents

SCHEDULE 9

AVNET, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(THOUSANDS EXCEPT PERCENTAGES AND PER SHARE DATA)

				SECOND QUARTER ENDED DECEMBER 31, 1999 (1)
				REPORTED				SPECIAL				ADJUSTED
				RESULTS				ITEMS				RESULTS
Sales				$	2,276,245			$	—			$	2,276,245
Cost of sales					1,958,733				(10,291	)			1,948,442
Gross profit					317,512				(10,291	)			327,803
		Gross profit percentage			13.95	%							14.40	%
Selling, general and administrative expenses					268,040				(17,739	)			250,301
		SG&A expenses as percentage of sales			11.78	%							11.00	%
Operating income					49,472				28,030				77,502
		Operating income as percentage of sales			2.17	%							3.40	%
Other income, net					3,362				—				3,362
Interest expense					(20,309	)			—				(20,309	)
Income before income taxes					32,525				28,030				60,555
Income tax provision					14,944				10,457				25,401
Income from continuing operations					17,581				17,573				35,154
Income from discontinued operations, net of tax					1,235				—				1,235
Net income				$	18,816			$	17,573			$	36,389
Net earnings per share:
	Basic			$	0.18			$	0.16			$	0.34
	Diluted			$	0.18			$	0.16			$	0.34
Shares used to compute earnings per share:
	Basic				106,588				106,588				106,588
	Diluted				107,833				107,833				107,833

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(1)

The results for the second quarter shown above exclude the impact of incremental special charges related to the (a) the integration of Marshall Industries into the Company’s EM and AC operations; (b) the reorganization of the Company’s EM Asian operations; (c) costs related to the consolidation of the Company’s EM European warehousing operations; and (d) costs incurred in connection with certain litigation initiated by the Company. The special charges amounted to $28.0 million pre-tax ($10.3 million included in cost of sales and $17.7 million included in selling, general and administrative expenses), $17.6 million after tax and $0.16 per diluted share.

 

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SCHEDULE 10

AVNET, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(THOUSANDS EXCEPT PERCENTAGES AND PER SHARE DATA)

				FIRST QUARTER ENDED OCTOBER 1, 1999 (1)
				REPORTED				SPECIAL				ADJUSTED
				RESULTS				ITEMS				RESULTS
Sales				$	1,804,523			$	—			$	1,804,523
Cost of sales					1,542,880				—				1,542,880
Gross profit					261,643				—				261,643
		Gross profit percentage			14.50	%							14.50	%
Selling, general and administrative expenses					207,730				(6,111	)			201,619
		SG&A expenses as percentage of sales			11.51	%							11.17	%
Operating income					53,913				6,111				60,024
		Operating income as percentage of sales			2.99	%							3.33	%
Other income, net					2,595				—				2,595
Interest expense					(12,444	)			—				(12,444	)
Income before income taxes					44,064				6,111				50,175
Income tax provision					19,122				2,135				21,257
Income from continuing operations					24,942				3,976				28,918
Loss from discontinued operations, net of tax					(887	)			—				(887	)
Net income				$	24,055			$	3,976			$	28,031
Net earnings per share:
	Basic			$	0.25			$	0.04			$	0.29
	Diluted			$	0.25			$	0.04			$	0.29
Shares used to compute earnings per share:
	Basic				94,737				94,737				94,737
	Diluted				95,455				95,455				95,455

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(1)

The results for the first quarter shown above exclude the impact of incremental special charges related to the reorganization of the Company’s EM European operations. The special charges amounted to $6.1 million pre-tax (all of which is included in selling, general and administrative expenses), $4.0 million after tax and $0.04 per diluted share.

 

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SCHEDULE 11

AVNET, INC.
PRO FORMA FINANCIAL STATEMENTS FOR SECOND QUARTER OF FISCAL 2001
AND COMPARATIVE ANNUALIZED EXPENSE REDUCTION — 2ND QUARTER FISCAL 2001 TO 4TH QUARTER FISCAL 2002
(THOUSANDS)

Second quarter of fiscal 2001 operating expenses, as reported								$	351,632
	Pro forma adjustments:
		VEBA Group operating expenses from September 29, 2000 through acquisition date (1)							15,716
		Remove amortization of goodwill (2)							(8,817	)
Second quarter of fiscal 2001 operating expense, pro forma								$	358,531
Second quarter of fiscal 2001 operating expense, pro forma and annualized								$	1,434,124
Fourth quarter of fiscal 2002 operating expenses, excluding special charges (Schedule 6)				$	278,051
Fourth quarter of fiscal 2002 operating expenses, excluding special charges and annualized									1,112,204
		Annualized reduction in operating expenses since second quarter of fiscal 2001						$	321,920

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(1)		In October 2000, Avnet completed the acquisition of certain European operations of the VEBA Electronics Group consisting of (a) the Germany-headquartered EBV Group, including EBV Elektronik and WBC, and Atlas Services Europe and (b) the Germany-based RKE Systems (collectively, the “VEBA Group”). The results of operations of the VEBA Group are included in Avnet’s consolidated results of operations from the acquisition date forward. The pro forma adjustment noted above adds the VEBA Group’s estimated operating expenses for the period from the end of Avnet’s first quarter to the acquisition date in order to portray Avnet’s operating expenses as if the acquisition had occurred on the first day of the quarter.
(2)		Effective at the beginning of fiscal 2002, Avnet adopted Statement of Financial Accounting Standards No. 142 (“SFAS 142”), “Goodwill and Other Intangible Assets,” which requires, among other things, that goodwill no longer be amortized. The pro forma adjustment noted above removes $8.8 million of goodwill amortization costs from the reported operating expenses for the second quarter of fiscal 2001.

 

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SCHEDULE 12

AVNET, INC.
OPERATING PROFIT (LOSS) MARGIN BY SEGMENT
BEFORE AND AFTER SPECIAL CHARGE ACTIVITY
(THOUSANDS EXCEPT PERCENTAGES)

				Second Quarter Ended December 27, 2002
				Including				Special				Excluding
				Special Charges				Charges				Special Charges
Sales
	EM			$	1,204,074			$	—			$	1,204,074
	CM				682,910				—				682,910
	AC				459,681				—				459,681
	Corp.				—				—				—
		Avnet, Inc.		$	2,346,665			$	—			$	2,346,665
Operating income (loss)
	EM			$	(61,585	)		$	84,096			$	22,511
	CM				(3,043	)			19,103				16,060
	AC				3,393				2,209				5,602
	Corp.				(13,957	)			1,357				(12,600	)
		Avnet, Inc.		$	(75,192	)		$	106,765			$	31,573
Operating income (loss) margin
	EM				-5.11	%							1.87	%
	CM				-0.45	%							2.35	%
	AC				0.74	%							1.22	%
	Corp.				N/A								N/A
		Avnet, Inc.			-3.20	%							1.35	%

				Fourth Quarter Ended June 28, 2002
				Including				Special				Excluding
				Special Charges				Charges				Special Charges
Sales
	EM			$	1,216,640			$	—			$	1,216,640
	CM				570,846				—				570,846
	AC				357,266				—				357,266
	Corp.				—				—				—
		Avnet, Inc.		$	2,144,752			$	—			$	2,144,752
Operating income (loss)
	EM			$	5,268			$	12,811			$	18,079
	CM				(12,366	)			31,336				18,970
	AC				(3,372	)			1,191				(2,181	)
	Corp.				(42,957	)			34,285				(8,672	)
		Avnet, Inc.		$	(53,427	)		$	79,623			$	26,196
Operating income (loss) margin
	EM				0.43	%							1.49	%
	CM				-2.17	%							3.32	%
	AC				-0.94	%							-0.61	%
	Corp.				N/A								N/A
		Avnet, Inc.			-2.49	%							1.22	%

 

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SCHEDULE 12
(continued)

AVNET, INC.
OPERATING PROFIT (LOSS) MARGIN BY SEGMENT
BEFORE AND AFTER SPECIAL CHARGE ACTIVITY
(THOUSANDS EXCEPT PERCENTAGES)

				Fourth Quarter Ended June 29, 2001
				Including				Special				Excluding
				Special Charges				Charges				Special Charges
Sales
	EM			$	1,553,866			$	—			$	1,553,866
	CM				619,738				—				619,738
	AC				364,151				—				364,151
	Corp.				—				—				—
		Avnet, Inc.		$	2,537,755			$	—			$	2,537,755
Operating income (loss)
	EM			$	(55,448	)		$	96,912			$	41,464
	CM				(2,350	)			17,062				14,712
	AC				11,950				5,000				16,950
	Corp.				(231,778	)			208,511				(23,267	)
		Avnet, Inc.		$	(277,626	)		$	327,485			$	49,859
Operating income (loss) margin
	EM				-3.57	%							2.67	%
	CM				-0.38	%							2.37	%
	AC				3.28	%							4.65	%
	Corp.				N/A								N/A
		Avnet, Inc.			-10.94	%							1.96	%

				Year Ended June 28, 2002
				Including				Special				Excluding
				Special Charges				Charges				Special Charges
Sales
	EM			$	4,841,923			$	—			$	4,841,923
	CM				2,399,246				—				2,399,246
	AC				1,679,079				—				1,679,079
	Corp.				—				—				—
		Avnet, Inc.		$	8,920,248			$	—			$	8,920,248
Operating income (loss)
	EM			$	9,895			$	12,811			$	22,706
	CM				31,603				31,336				62,939
	AC				41,665				1,191				42,856
	Corp.				(86,148	)			34,285				(51,863	)
		Avnet, Inc.		$	(2,985	)		$	79,623			$	76,638
Operating income (loss) margin
	EM				0.20	%							0.47	%
	CM				1.32	%							2.62	%
	AC				2.48	%							2.55	%
	Corp.				N/A								N/A
		Avnet, Inc.			-0.03	%							0.86	%

 

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SCHEDULE 13

AVNET, INC.
GROSS PROFIT MARGINS
BEFORE AND AFTER SPECIAL CHARGE ACTIVITY
(THOUSANDS EXCEPT PERCENTAGES)

									Gross Profit																Gross profit margin percentages
					Sales				As reported				Special Charges								Adjusted				As reported				Adjusted
Quarter ended September 27, 2002						2,173,890				297,619				—								297,619				13.69	%			13.69	%
Quarter ended June 28, 2002						2,144,752				282,647				21,600		(1)						304,247				13.18	%			14.19	%
Quarter ended March 29, 2002						2,214,451				310,988				—								310,988				14.04	%			14.04	%
Quarter ended December 28, 2001						2,359,850				318,617				—								318,617				13.50	%			13.50	%
Quarter ended September 28, 2001						2,201,195				310,562				—								310,562				14.11	%			14.11	%
	Totals for five quarters ended
			September 27, 2002			11,094,138				1,520,433				21,600								1,542,033				13.70	%			13.90	%
Quarter ended June 29, 2001						2,537,755				312,432				80,596		(2)						393,028				12.31	%			15.49	%
Quarter ended March 30, 2001						3,457,170				522,760				—								522,760				15.12	%			15.12	%
Quarter ended December 29, 2000						3,630,494				542,761				—								542,761				14.95	%			14.95	%
Quarter ended September 29, 2000						3,188,591				487,573				—								487,573				15.29	%			15.29	%
Quarter ended June 30, 2000						2,949,777				441,054				—								441,054				14.95	%			14.95	%
Quarter ended March 31, 2000						2,884,498				424,577				1,496		(3)						426,073				14.72	%			14.77	%
		Totals for six quarters ended June 29, 2001				18,648,285				2,731,157				82,092								2,813,249				14.65	%			15.09	%

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(1)		See Schedule 6 for discussion of special charges
(2)		See Schedule 7 for discussion of special charges
(3)		See Schedule 8 for discussion of special charges

 

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SCHEDULE 14

AVNET, INC.
PRO FORMA DEBT REDUCTION
ASSUMING DRAWINGS ON ACCOUNTS RECEIVABLE SECURITIZATION PROGRAM AS DEBT
(THOUSANDS)

Debt at December 29, 2000			$	3,323,287
Drawings under accounts receivable securitization at December 29, 2000 (1)				—
	Pro forma debt at December 29, 2000							3,323,287
Debt at September 27, 2002				1,633,757
Drawings under accounts receivable securitization at September 27, 2002 (1)				100,000
	Pro forma debt at September 27, 2002							1,733,757
	Reduction in debt, including accounts receivable securitization — December 29, 2000 to September 27, 2002						$	1,589,530
Debt at December 27, 2002				1,390,355
Drawings under accounts receivable securitization at December 27, 2002 (1)				50,000
	Pro forma debt at December 27, 2002						$	1,440,355
	Reduction in debt, including accounts receivable securitization — December 29, 2000 to December 27, 2002						$	1,882,932

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(1)

Avnet has an accounts receivable securitization program whereby it sells an interest in a pool of its trade accounts receivable. The purpose of the program is to provide Avnet with an additional source of liquidity at interest rates more favorable than it could receive through other forms of financing. At December 27, 2002, September 27, 2002 and December 29, 2000, the Company had sold $50.0 million, $100.0 million and $0, respectively, of receivables under the program. This is reflected as a reduction of receivables, with the proceeds used to pay down debt, in the Company’s consolidated balance sheets.

 

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SCHEDULE 15

AVNET, INC.
PRO FORMA FINANCIAL STATEMENTS FOR SECOND QUARTER OF FISCAL 2001
AND COMPARATIVE ANNUALIZED EXPENSE REDUCTION — 2ND QUARTER FISCAL 2001 TO 2ND QUARTER FISCAL 2003
(THOUSANDS)

Second quarter of fiscal 2001 operating expenses, as reported				$	351,632
	Pro forma adjustments:
		VEBA Group operating expenses from September 29, 2000 through acquisition date (1)			15,716
		Remove amortization of goodwill (2)			(8,817	)
		Second quarter of fiscal 2001 operating expense, pro forma						$	358,531
Second quarter of fiscal 2003 operating expenses, excluding special charges (Schedule 5)				$	283,993
	Pro forma adjustment:
		Adjustment to exclude the impact of changes in foreign currency exchange rates from 2nd quarter of fiscal 2001 to the 2nd quarter of fiscal 2003			(14,424	)
		Second quarter of fiscal 2003 operating expenses, pro forma							269,569
		Pro forma reduction in quarterly operating expenses						$	88,962

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(1)		In October 2000, Avnet completed the acquisition of certain European operations of the VEBA Electronics Group consisting of (a) the Germany-headquartered EBV Group, including EBV Elektronik and WBC, and Atlas Services Europe and (b) the Germany-based RKE Systems (collectively, the “VEBA Group”). The results of operations of the VEBA Group are included in Avnet’s consolidated results of operations from the acquisition date forward. The pro forma adjustment noted above adds the VEBA Group’s estimated operating expenses for the period from the end of Avnet’s first quarter to the acquisition date in order to portray Avnet’s operating expenses as if the acquisition had occurred on the first day of the quarter.
(2)		Effective at the beginning of fiscal 2002, Avnet adopted Statement of Financial Accounting Standards No. 142 (“SFAS 142”), “Goodwill and Other Intangible Assets,” which requires, among other things, that goodwill no longer be amortized. The pro forma adjustment noted above removes $8.8 million of goodwill amortization costs from the reported operating expenses for the second quarter of fiscal 2001.

 

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Item 7. Financial Statements and Exhibits.

	(a)		Inapplicable
	(b)		Inapplicable
	(c)		Exhibits: none

SIGNATURE

     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 thereunto duly authorized.

		AVNET, INC.
		(Registrant)
Date: July 30, 2003		By:		/s/ Raymond Sadowski
				Raymond Sadowski
				Senior Vice President and
				Chief Financial Officer