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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT
OF 1934.
For the Quarterly Period Ended December 26, 1997Commission File #1-4224
Avnet, Inc.
(Exact name of registrant as specified in its charter)
New York 11-1890605
(State or other jurisdiction of IRS Employer I.D. Number
incorporation or organization)
80 Cutter Mill Road, Great Neck, N.Y. 11021
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code . . . . . . . 516-466-7000
Not Applicable
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
Yes x No
The number of shares outstanding of the registrant's Common Stock (net of
treasury shares) as of the close of the period covered by this report -
40,000,632 shares.
AVNET, INC. AND SUBSIDIARIES
INDEX
Part I. Financial Information Page No.
Item 1.Financial Statements:
Consolidated Balance Sheets -
December 26, 1997 and June 27, 1997 3
Consolidated Statements of Income -
First Halves Ended December 26, 1997
and December 27, 1996 4
Consolidated Statements of Income -
Second Quarters Ended December 26, 1997
and December 27, 1996 5
Consolidated Statements of Cash Flows -
First Halves Ended December 26, 1997
and December 27, 1996 6
Notes to Consolidated Financial Statements 7 - 8
Item 2.Management's Discussion and Analysis of
Financial Condition and Results of Operations 9 - 12
Item 3.Quantitative and Qualitative Disclosures
About Market Risk 12
Part II. Other Information 13 - 16
Signature Page 17
PART I - FINANCIAL INFORMATION
Item 1.Financial Statements
AVNET, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
December 26, June 27,
1997 1997
(unaudited) (audited)
Assets:
Current assets:
Cash and cash equivalents $ 54,820 $ 59,312
Receivables, less allowances of $30,399
and $27,915, respectively 848,372 800,015
Inventories (Note 3) 1,082,027 1,007,074
Other 32,002 30,035
Total current assets 2,017,221 1,896,436
Property, plant & equipment, net 149,656 181,509
Goodwill, net of accumulated amortization of
$56,427 and $49,846, respectively 469,511 476,935
Other assets 44,061 39,191
Total assets $2,680,449 $2,594,071
Liabilities:
Current liabilities:
Borrowings due within one year $ 234 $ 178
Accounts payable 446,844 433,762
Accrued expenses and other 158,304 143,513
Total current liabilities 605,382 577,453
Long-term debt, less due within one year577,124 514,426
Commitments and contingencies (Note 4)
Total liabilities 1,182,506 1,091,879
Shareholders' equity (Note 5):
Common stock $1.00 par, authorized
120,000,000 shares, issued 44,271,000
shares and 44,032,000 shares,
respectively 44,271 44,032
Additional paid-in capital 431,848 425,180
Retained earnings 1,297,419 1,215,550
Cumulative translation adjustments (30,581) (24,767)
Common stock held in treasury at cost,
4,270,000 shares and 2,927,000 shares,
respectively (245,014) (157,803)
Total shareholders' equity 1,497,943 1,502,192
Total liabilities and shareholders'
equity $2,680,449 $2,594,071
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AVNET, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(thousands, except per share data)
First Halves Ended
December 26, December 27,
1997 1996
(unaudited) (unaudited)
Sales $2,859,570 $2,613,560
Cost of sales 2,371,700 2,141,019
Gross profit 487,870 472,541
Selling, shipping, general and
administrative expenses (Note 6) 339,058 308,853
Operating income 148,812 163,688
Other income, net 682 1,049
Interest expense (16,562) (12,671)
Gain on sale of Channel Master (Note 6) 33,795 -
Income before income taxes 166,727 152,066
Income taxes 72,542 64,079
Net income $ 94,185 $ 87,987
Earnings per share:
Basic $2.32 $2.04
Diluted $2.29 $2.02
Shares used to compute earnings per share:
Basic 40,608 43,222
Diluted 41,130 43,587
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AVNET, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(thousands, except per share data)
Second Quarters Ended
December 26, December 27,
1997 1996
(unaudited) (unaudited)
Sales $1,460,738 $1,331,748
Cost of sales 1,214,826 1,091,697
Gross profit 245,912 240,051
Selling, shipping, general and
administrative expenses (Note 6) 178,019 156,083
Operating income 67,893 83,968
Other income, net 446 279
Interest expense (7,926) (5,771)
Gain on sale of Channel Master (Note 6) 33,795 -
Income before income taxes 94,208 78,476
Income taxes 42,135 32,862
Net income $ 52,073 $ 45,614
Earnings per share:
Basic $1.29 $1.06
Diluted $1.27 $1.05
Shares used to compute earnings per share:
Basic 40,382 43,018
Diluted 40,887 43,466
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AVNET, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
First Halves Ended
December 26, December 27,
1997 1996
(unaudited) (unaudited)
Cash flows from operating activities:
Net income $ 94,185 $ 87,987
Add non-cash and other reconciling items:
Depreciation and amortization 25,362 24,071
Deferred taxes (1,413) (1,205)
Other, net (Note 7) 10,800 10,213
Gain on Channel Master sale (33,795) -
95,139 121,066
Receivables (76,506) 3,604
Inventories (105,553) 7,475
Payables, accruals and other, net 46,388 74,425
Net cash flows (used for) provided from
operating activities (40,532) 206,570
Cash flows from financing activities:
Issuance of commercial paper
and bank debt, net 61,061 (119,159)
Issuance (payment) of other debt 3,033 (3,173)
Cash dividends (12,436) (13,027)
Repurchase of common stock (87,685) (31,470)
Other, net 2,783 2,183
Net cash flows (used for)
financing activities (33,244) (164,646)
Cash flows from investing activities:
Purchase of property, plant and
equipment (19,303) (24,009)
Disposition/(acquisition) of
operations, net (Note 7) 89,561 (374)
Net cash flows provided from (used
for) investing activities 70,258 (24,383)
Effect of exchange rate changes on cash
and cash equivalents (974) (226)
Cash and cash equivalents:
- increase (decrease) (4,492) 17,315
- at beginning of year 59,312 47,808
- at end of period $ 54,820 $ 65,123
Additional cash flow information (Note 7)
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AVNET, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1.In the opinion of the Company, the accompanying consolidated financial
statements contain all adjustments (consisting of normal recurring
accruals) necessary to present fairly the financial position as of
December 26, 1997 and June 27, 1997; the results of operations for the
first halves and second quarters ended December 26, 1997 and December
27, 1996; and the cash flows for the first halves ended December 26,
1997 and December 27, 1996. For further information, refer to the
consolidated financial statements and accompanying footnotes included
in the Company's Annual Report on Form 10-K for the year ended June 27,
1997.
2.The results of operations for the first half and second quarter ended
December 26, 1997 are not necessarily indicative of the results to be
expected for the full year.
3.Inventories:
(Thousands)
December 26 June 27,
1997 1997
Finished goods $ 982,472 $ 917,751
Work in process 11,815 13,714
Purchased parts and raw materials 87,740 75,609
$1,082,027 $1,007,074
4.From time to time, the Company may become liable with respect to
pending and threatened litigation, taxes, and environmental and other
matters. The Company has been designated a potentially responsible
party or has had other claims made against it in connection with
environmental clean-ups at several sites. Based upon the information
known to date, the Company believes that it has appropriately reserved
for its share of the costs of the clean-ups and it is not anticipated
that any contingent matters will have a material adverse impact on the
Company's financial condition, liquidity or results of operations.
5.Number of shares of common stock reserved for stock
option and stock incentive programs: 5,062,135
6.Included in the Company's current year second quarter results is the
gain on the sale of the Company's former Channel Master business
amounting to approximately $33.8 million before income taxes. Also
included in the current quarter results as operating expenses are $13.3
million of costs relating to the anticipated divestiture of Avnet
Industrial, the closure of the Company's Corporate Headquarters in
Great Neck, NY, and the anticipated loss on the sale of Company-owned
real estate. The net effect of these items is to increase pre-tax
income, net income, and diluted earnings per share by approximately
$20.5 million, $8.7 million, and $0.21 per share, respectively.
AVNET, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
7.Additional cash flow information:
Other non-cash and reconciling items primarily include the provision
for doubtful accounts.
Disposition/(acquisition) of operations, net, in the first half of 1998
includes primarily the cash received in connection with the sale of
Channel Master, offset somewhat by cash paid in connection with the
acquisition of ECR Sales Management, Inc., a Northwest US based
distributor of point-of-sale equipment and bar code devices which has
been made part of the Company's Penstock business. In the first half
of 1997, cash expended for the acquisition of operations includes only
the cash paid for professional and other fees associated with various
acquisitions completed during 1996.
Interest and income taxes paid in the first halves were as follows:
(Thousands)
1998 1997
Interest $ 8,265 $10,350
Income taxes $66,788 $61,747
Item 2.Management's Discussion and Analysis of Financial Condition and Results
of Operations
Results of Operations
For the second quarter of fiscal 1998 ended December 26, 1997,
consolidated sales were a record $1.461 billion, up 10% as compared with
last year's second quarter sales of $1.332 billion. However, that sales
comparison includes the sales of Channel Master for the entire second
quarter of 1997, but only minimal sales for the second quarter of 1998 due
to the disposition of Channel Master during the early part of the second
quarter - on October 10, 1997. The Electronic Marketing Group's sales,
which accounted for essentially 100% of the Company's second quarter 1998
consolidated sales, were $1.456 billion, up 14% as compared with last
year's $1.281 billion. This was due in part to stronger sales at the
Company's Computer Marketing Group, whose sales in the second quarter of
1998 were up 42% as compared with last year's second quarter. Sales of
the Electronic Marketing Group's components businesses, consisting of the
Company's OEM Marketing Group, the Industrial Marketing Group, and EMG
International, were up 6% in this year's second quarter as compared with
the prior year period. As compared with last year's second quarter, the
OEM Marketing Group's sales were up 7%, the Industrial Marketing Group's
sales were up 13%, and EMG International's sales were up 4%. Consolidated
sales were negatively impacted in the range of approximately $30 - $35
million for the second quarter of 1998 as compared with 1997 as a result
of foreign currency translation. Had foreign currency exchange rates
remained the same as in the second quarter of last year, EMG
International's second quarter 1998 sales would have been approximately
15% higher than the prior year period.
Included in the Company's current year second quarter results is the gain
on the sale of the Company's former Channel Master business amounting to
approximately $33.8 million before income taxes. Also included in the
current quarter results as operating expenses are $13.3 million of costs
relating to the anticipated divestiture of Avnet Industrial, the closure
of the Company's Corporate Headquarters in Great Neck, NY, and the
anticipated loss on the sale of Company-owned real estate. The net effect
of these items is to increase pre-tax income, net income, and diluted
earnings per share by approximately $20.5 million, $8.7 million, and $0.21
per share, respectively.
Consolidated gross profit margins of 16.8% in the second quarter of 1998
were lower by 1.2% of sales as compared with 18.0% in the second quarter
of last year. Even though operating expenses (before non-recurring costs)
as a percentage of sales of 11.3% were also lower as compared with 11.7%
in the prior year period, the decrease was not enough to offset totally
the decline in the consolidated gross profit margins. As a result,
operating income (before non-recurring costs) as a percentage of sales was
5.6% in the second quarter of 1998 as compared with 6.3% in the second
quarter of last year. Interest expense was substantially higher in the
second quarter of 1998 as compared with the prior year's quarter due
primarily to increased borrowings to fund the Company's stock repurchase
program and to fund the additional working capital requirements to support
the growth in business.
Net income in the second quarter of 1998 was $52.1 million, or $1.27 per
share on a diluted basis, as compared with $45.6 million, or $1.05 per
share on a diluted basis, in the prior year's second quarter. Excluding
the non-recurring items referred to above, net income in the second
quarter of 1998 was $43.4 million, or $1.06 per share on a diluted basis.
This apparent anomaly of slightly lower net income dollars (second quarter
1998 net income before non-recurring items as compared with the second
quarter 1997 net income) and slightly higher earnings per share is a
result of the Company's stock repurchase program as 1998 net income was
negatively impacted by the increase in interest expense resulting from the
utilization of cash to repurchase shares while earnings per share was
positively impacted by the stock repurchase program.
Consolidated sales in the first half of 1998 were $2.860 billion, up 9% as
compared with $2.614 billion in the first half of last year. The
Electronic Marketing Group's sales in the first half of 1998 were $2.821
billion, up 12% as compared with $2.516 billion in last year's first half.
Consolidated gross profit margins in the first half of 1998 were 17.1% as
compared with 18.1% in the prior year period. Even though operating
expenses (before non-recurring costs) as a percentage of sales decreased
to 11.4% in the first half of 1998 from 11.8% in the first half of last
year, the decrease was not enough to fully offset the decline in gross
profit margins. As a result, operating income (before non-recurring
costs) as a percentage of sales decreased to 5.7% in this year's first
half as compared with 6.3% in the same period last year. Interest expense
was substantially higher in the first half of 1998 as compared with the
first half of 1997 due primarily to increased borrowings to fund the
Company's stock repurchase program and to fund the additional working
capital requirements to support the growth in business.
Net income for the first half of 1998 was $94.2 million, or $2.29 per
share on a diluted basis, as compared with $88.0 million, or $2.02 per
share on a diluted basis, in the first half of last year. Excluding the
non-recurring items referred to above, net income in the first half of
1998 was $85.5 million, or $2.08 per share on a diluted basis.
Liquidity and Capital Resources
During the first half of 1998, the Company generated $95.1 million from
income before depreciation, the gain on the sale of Channel Master and
other non-cash items, and used $135.6 million for working capital needs
resulting in $40.5 million of net cash flows being used for operations.
In addition, the Company used $30.0 million for other normal business
operations including purchases of property, plant and equipment ($19.3
million) and dividends ($12.5 million), offset by positive cash flow from
other items ($1.8 million). This resulted in $70.5 million being used for
normal business operations. The Company also generated $4.9 million from
other items, including cash proceeds from the sale of Channel Master,
offset by cash used for acquisitions and acquisition related expenses
($89.6 million) and an increase in other debt ($3.0 million), offset by
cash used to repurchase common stock ($87.7 million including $5.6 million
related to purchases in 1997 which settled during the first quarter of
1998). This overall net use of cash of $65.6 million was funded by an
increase in outstanding bank debt and commercial paper ($61.1 million) and
the use of available cash ($4.5 million).
The Company's quick assets at December 26, 1997 totaled $903.2 million as
compared with $859.3 million at June 27, 1997 and exceeded the Company's
current liabilities by $297.8 million as compared with a $281.9 million
excess at June 27, 1997. Working capital at December 26, 1997 was
$1,411.8 million as compared with $1,319.0 million at June 27, 1997. At
the end of the first half, to support each dollar of current liabilities,
the Company had $1.49 of quick assets and $1.84 of other current assets
for a total of $3.33 of current assets as compared with $3.28 at June 27,
1997.
In the first quarter of 1998, the Company renegotiated its revolving
credit agreement with a syndicate of banks led by NationsBank, N.A.
("NationsBank"). The new agreement provides a five-year facility with a
line of credit of up to $700.0 million. The Company may select from
various interest rate options and maturities under this facility. The
facility will serve as a primary funding vehicle as well as a backup for
the Company's commercial paper program. At the same time, the Company
cancelled its additional credit facility with NationsBank which was
established in 1997 and which provided a line of credit up to $100.0
million.
During the first half of 1998, shareholders' equity decreased by $4.2
million to $1,497.9 million at December 26, 1997, while total debt
increased by $62.8 million to $577.4 million. As a result, the total debt
to capital ratio (shareholders' equity plus total debt) was 27.8% at
December 26, 1997 as compared with 25.5% at June 27, 1997. The Company's
favorable balance sheet ratios would facilitate additional financing if,
in the opinion of management, such financing would enhance the future
operations of the Company.
During the second quarter of 1998, the Company completed the original $200
million stock repurchase program that was authorized on August 1, 1996 by
its Board of Directors and to date, as contemplated, the Company has used
almost all of the net cash proceeds received on the sale of Channel Master
to repurchase additional shares. These additional shares that were
purchased with the proceeds from the Channel Master sale are part of the
new $250 million stock purchase program authorized by Avnet's Board of
Directors on November 19, 1997. The stock is to be purchased in the open
market from time-to-time or in directly negotiated purchases. During the
first half of 1998, the Company repurchased approximately 1.3 million
shares, bringing the cumulative total through December 27, 1997 up to
approximately 3.8 million shares. Through the end of the first half of
1998, the Company has used approximately $230 million to purchase its
shares since the initial repurchase program was authorized in August,
1996.
Certain of the Company's operations, primarily its international
subsidiaries, occasionally purchase and sell product in currencies other
than their functional currencies. This subjects the Company to the risks
associated with the fluctuations of foreign currency exchange rates. The
Company reduces this risk by utilizing natural hedging as well as by
creating offsetting positions through the use of derivative financial
instruments, primarily forward foreign exchange contracts with maturities
of less than sixty days. The market risk related to the foreign exchange
contracts is offset by the changes in valuation of the underlying items
being hedged. The amount of risk and the use of derivative financial
instruments described above is not material to the Company's financial
position or results of operations. The Company does not hedge either its
investment in its foreign operations or its floating interest rate
exposures.
With the year 2000 less than two years away, many companies, including
Avnet, will need to modify their computer systems and applications which
currently use two-digit fields to designate a year ("Year 2000 Issue").
The Company has assessed and continues to assess the impact of the Year
2000 Issue on its reporting systems and operations. The costs to modify
the existing computer systems and applications are significant; however,
they will not be material to the Company's results of operations. Although
the Company cannot control the efforts of the many third parties with which it
interfaces, it does not currently anticipate that there will be any
significant disruption of the Company's ability to transact business.
The Company has recently undertaken a study to restructure its businesses
so as to streamline its business processes and create a more competitive
cost structure. The anticipated restructuring is expected to result in
substantial savings and operating benefits for the Company, both
domestically and abroad. Since work on this effort has only recently
begun, the Company is not yet in a position to estimate the costs or
benefits to be recognized as a result of the anticipated restructuring.
Currently, the Company does not have any material commitments for capital
expenditures. The Company and the former owners of a Company-owned site
in Oxford, North Carolina have entered into a Consent Decree and Court
Order with the Environmental Protection Agency (EPA) for the environmental
clean-up of the site, the cost of which, according to the EPA's remedial
investigation and feasibility study, is estimated to be approximately $6.3
million, exclusive of the $1.5 million in EPA past costs paid by the
potentially responsible parties (PRPs). Pursuant to a Consent Decree and
Court Order entered into between the Company and the former owners of the
site, the former owners have agreed to bear at least 70% of the clean-up
costs of the site, and the Company will be responsible for not more than
30% of those costs. In addition, the Company has received notice from a
third party of its intention to seek indemnification for costs it may
incur in connection with an environmental clean-up at a site in Rush,
Pennsylvania resulting from the alleged disposal of wire insulation
material at the site by a former unit of the Company. Based upon the
information known to date, the Company believes that it has appropriately
accrued in its financial statements for its share of the costs of the
clean-up at all of the above mentioned sites. The Company has been
notified of claims made against it at an environmental clean-up site in
Huguenot, New York. At this time, the Company cannot estimate the amount
of its potential liability, if any, for clean-up costs in connection with
this site, but does not anticipate that this matter or any other
contingent matters will have a material adverse impact on the Company's
financial condition, liquidity or results of operations. The Company is
not now aware of any commitments, contingencies or events within its
control which may significantly change its ability to generate sufficient
cash from internal or external sources to meet its needs.
"Safe Harbor" statement under the Private Securities Litigation Reform Act
of 1995: Any statements made in this Report which are not historical facts
are forward-looking statements that involve risks and uncertainties.
Among the factors which could cause actual results to differ materially
are (i) major changes in business conditions and the economy in general,
(ii) risks associated with foreign operations, such as currency
fluctuations, (iii) allocations of products by suppliers, and (iv) changes
in market demand and pricing pressure.
Item 3.Quantative and Qualitative Disclosures About Market Risk
See Note 1 to the consolidated financial statements included in the
Company's Annual Report on Form 10-K for the year ended June 27, 1997 and
the Liquidity and Capital Resources section of Management's Discussion and
Analysis of Financial Condition and Results of Operations in this Form 10-
Q.
PART II - OTHER INFORMATION
Item 4.Submission of Matters to a Vote of Security-Holders
(a) The 1997 Annual Meeting of Shareholders of the Registrant was held
on November 19, 1997.
(b) Not required. Proxies were solicited by the Company pursuant to
Regulation 14 under the Securities Exchange Act of 1934, and no
solicitation in opposition to management's nominees for board of
directors was made. All of the nominees were elected.
(c) The shareholders of the Registrant were asked to vote upon (i)
adoption of the Avnet 1997 Stock Option Plan, pursuant to which non-
qualified options may be granted to employees of the Registrant,
(ii) an amendment to the Certificate of Incorporation of Avnet
increasing the number of authorized shares of Common Stock from
60,000,000 to 120,000,000, (iii) incentive compensation terms for a
key executive, (iv) ratification of the appointment of Arthur
Andersen LLP as independent auditors for the next fiscal year, and
(v) election of Directors. All proposals were adopted by the
shareholders by the following votes:
Matter For Against Abstain
Adoption of the Stock
Option Plan 29,368,241 5,368,737 234,427
Increase in Common Stock
Authorized 32,000,793 2,858,526 112,086
Incentive Compensation
Terms for a Key Executive 33,747,399 896,205 327,801
Ratification of
Appointment of Auditors 34,899,257 19,567 52,581
Election of Directors:
For Withheld
Eleanor Baum 34,859,411 111,994
Gerald Berkman 34,768,479 202,926
J. Veronica Biggins 34,830,727 140,678
Joseph Caligiuri 34,849,931 121,474
Ehud Houminer 34,857,383 114,022
Leon Machiz 34,841,310 130,095
Salvatore Nuzzo 34,852,111 119,294
Frederic Salerno 34,851,693 119,712
David Shaw 34,111,605 859,800
Roy Vallee 34,855,771 115,634
Keith Williams 34,123,168 848,237
Frederick Wood 34,852,875 118,530
(d) Not applicable.
Item 6.Exhibits and Reports on Form 8-K:
A.The following documents are filed as part of this report:
3A. Certificate of Incorporation of the Company as currently in
effect (incorporated by reference).
3B. By-Laws of the Company as currently in effect (incorporated
herein by reference to the Company's Current Report on Form 8-K
dated February 12, 1996, Exhibit 3 (ii)).
4. The total amount of securities authorized under any instrument
which defines the rights of holders of the Company's long-term
debt does not exceed 10% of the total assets of the Company and
its subsidiaries on a consolidated basis. Therefore, none of
such instruments are required to be filed as exhibits to this
Report. The Company agrees to furnish copies of such instruments
to the Commission upon request.
10. Employment Agreement effective as of June 28, 1997 between the
Company and Mr. Steven Church (incorporated herein by reference
to the Company's Current Report on Form 8-K dated February 6,
1998, Exhibit 99.1).
10A. Employment Agreement effective as of October 13, 1997 between the
Company and Mr. Brian Hilton (incorporated herein by reference to
the Company's Current Report on Form 8-K dated February 6, 1998,
Exhibit 99.2).
11. Computation of earnings per share (filed herewith)
27. Financial Data Schedule (electronic filing only)
B.Reports on Form 8-K
The Company filed a Current Report on Form 8-K bearing a cover date of
September 25, 1997 and dated November 5, 1997, whereby it filed an
Employment Agreement dated September 25, 1997 between the Company and
Mr. Roy Vallee.
EXHIBIT 11
AVNET, INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
(Thousands, except per share data)
First Halves Ended
December 26, December 27,
1997 1996
A.Basic earnings per share:
Net income $ 94,185 $ 87,987
Common shares outstanding
(weighted average) 40,608 43,222
Basic earnings per share $ 2.32 $ 2.04
B.Diluted earnings per share:
Net income $ 94,185 $ 87,987
Common shares outstanding
(weighted average) 40,608 43,222
Common equivalent shares:
Contingent shares issuable 130 143
Exercise of warrants and options
using the treasury method 392 222
Total common and common equivalent
shares 41,130 43,587
Diluted earnings per share $ 2.29 $ 2.02
For the periods ended December 26, 1997, the Company adopted Statement of
Financial Accounting Standards No. 128 ("SFAS 128"), "Earnings Per Share".
Under the new standard, Basic earnings per share is computed based on the
weighted average number of common shares outstanding and excludes any
potential dilution; Diluted earnings per share reflects potential
dilution from the exercise or conversion of securities into common stock.
Earnings per share data for all prior periods presented have been restated
to conform with the provisions of SFAS 128.
EXHIBIT 11
AVNET, INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
(Thousands, except per share data)
Second Quarters Ended
December 26, December 27,
1997 1996
A.Basic earnings per share:
Net income $ 52,073 $ 45,614
Common shares outstanding
(weighted average) 40,382 43,018
Basic earnings per share $ 1.29 $ 1.06
B.Diluted earnings per share:
Net income $ 52,073 $ 45,614
Common shares outstanding
(weighted average) 40,382 43,018
Common equivalent shares:
Contingent shares issuable 135 149
Exercise of warrants and options
using the treasury method 370 299
Total common and common equivalent
shares 40,887 43,466
Diluted earnings per share $ 1.27 $ 1.05
For the periods ended December 26, 1997, the Company adopted Statement of
Financial Accounting Standards No. 128 ("SFAS 128"), "Earnings Per Share".
Under the new standard, Basic earnings per share is computed based on the
weighted average number of common shares outstanding and excludes any
potential dilution; Diluted earnings per share reflects potential
dilution from the exercise or conversion of securities into common stock.
Earnings per share data for all prior periods presented have been restated
to conform with the provisions of SFAS 128.
S I G N A T U R E
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)
By: s/Raymond Sadowski
Raymond Sadowski
Senior Vice President,
Chief Financial Officer
and Assistant Secretary
By: s/John F. Cole
John F. Cole
Controller and Principal
Accounting Officer
February 9, 1998
Date