SEC Filing | Avnet, Inc.

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Table of Contents

UNITED STATES

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 March 28, 2020

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission File #1-4224

AVNET, INC.

(Exact name of registrant as specified in its charter)


New York				11-1890605
(State or other jurisdiction				(IRS Employer
of incorporation or organization)				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.)

N/A

(Former name, former address and former fiscal year, if changed since last report.)

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol	Name of Each Exchange on Which registered:
Common stock, par value $1.00 per share	AVT	Nasdaq Global Select Market

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 ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes þ No ◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer ☑		Accelerated Filer ☐
Non-accelerated Filer ☐		Smaller Reporting Company ☐
Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

As of April 23, 2020, the total number of shares outstanding of the registrant’s Common Stock was 98,746,669 shares, net of treasury shares.

Table of Contents

AVNET, INC. AND SUBSIDIARIES

INDEX

	Page No.
PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Consolidated Balance Sheets at March 28, 2020 and June 29, 2019	2

Consolidated Statements of Operations for the third quarters and nine months ended March 28, 2020 and March 30, 2019	3

Consolidated Statements of Comprehensive Income for the third quarters and nine months ended March 28, 2020 and March 30, 2019	4

Consolidated Statements of Shareholders’ Equity for the third quarters and nine months ended March 28, 2020 and March 30, 2019	5

Consolidated Statements of Cash Flows for the nine months ended March 28, 2020 and March 30, 2019	6

Notes to Consolidated Financial Statements	7

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	22

Item 3. Quantitative and Qualitative Disclosures About Market Risk	32

Item 4. Controls and Procedures	33

PART II. OTHER INFORMATION

Item 1. Legal Proceedings	33

Item 1A. Risk Factors	33

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	34

Item 6. Exhibits	35

Signature Page	36

Table of Contents

PART I

FINANCIAL INFORMATION

Item 1.

Financial Statements

AVNET, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)


	March 28,		June 29,
	2020		2019
	(Thousands, except share
	amounts)
ASSETS
Current assets:
Cash and cash equivalents	$	402,655	$	546,105
Receivables, less allowances of $50,874 and $53,499, respectively		2,987,791		3,168,369
Inventories		2,745,219		3,008,424
Prepaid and other current assets		180,956		153,438
Total current assets		6,316,621		6,876,336
Property, plant and equipment, net		413,371		452,171
Goodwill		760,939		876,728
Intangible assets, net		77,306		143,520
Operating lease assets (Note 5)		271,243		—
Other assets		250,248		215,801
Total assets	$	8,089,728	$	8,564,556
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Short-term debt	$	399,965	$	300,538
Accounts payable		1,733,673		1,864,342
Accrued expenses and other		418,654		413,696
Short-term operating lease liabilities (Note 5)		55,496		—
Total current liabilities		2,607,788		2,578,576
Long-term debt		1,194,240		1,419,922
Long-term operating lease liabilities (Note 5)		247,539		—
Other liabilities		362,883		425,585
Total liabilities		4,412,450		4,424,083
Commitments and contingencies (Note 7)
Shareholders’ equity:
Common stock $1.00 par; authorized 300,000,000 shares; issued 98,760,983 shares and 104,037,769 shares, respectively		98,761		104,038
Additional paid-in capital		1,587,294		1,573,005
Retained earnings		2,390,425		2,767,469
Accumulated other comprehensive loss		(399,202)		(304,039)
Total shareholders’ equity		3,677,278		4,140,473
Total liabilities and shareholders’ equity	$	8,089,728	$	8,564,556

See notes to consolidated financial statements.

Table of Contents

AVNET, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


	Third Quarters Ended				Nine Months Ended
	March 28,		March 30,		March 28,		March 30,
	2020		2019		2020		2019
	(Thousands, except per share amounts)
Sales	$	4,309,818	$	4,698,824	$	13,474,632	$	14,837,683
Cost of sales		3,790,885		4,074,629		11,886,247		12,946,706
Gross profit		518,933		624,195		1,588,385		1,890,977
Selling, general and administrative expenses		469,646		468,171		1,391,024		1,415,040
Goodwill and intangible asset impairment expense		145,836		—		145,836		—
Restructuring, integration and other expenses		19,211		2,939		58,073		79,986
Operating (loss) income		(115,760)		153,085		(6,548)		395,951
Other (expense) income, net		(12,608)		8,731		(8,162)		9,424
Interest and other financing expenses, net		(29,718)		(36,253)		(97,254)		(100,064)
Income (loss) from continuing operations before taxes		(158,086)		125,563		(111,964)		305,311
Income tax (benefit) expense		(29,425)		30,628		(30,270)		90,072
Income (loss) from continuing operations, net of tax		(128,661)		94,935		(81,694)		215,239
Loss from discontinued operations, net of tax		—		(6,887)		(1,548)		(7,066)
Net (loss) income		(128,661)		88,048		(83,242)		208,173

Earnings (loss) per share - basic:
Continuing operations	$	(1.29)	$	0.87	$	(0.81)	$	1.93
Discontinued operations		—		(0.06)		(0.01)		(0.06)
Net (loss) income per share basic		(1.29)		0.81		(0.82)		1.87

Earnings (loss) per share - diluted:
Continuing operations	$	(1.29)	$	0.87	$	(0.81)	$	1.91
Discontinued operations		—		(0.06)		(0.01)		(0.06)
Net (loss) income per share diluted		(1.29)		0.81		(0.82)		1.85

Shares used to compute earnings per share:
Basic		99,479		108,074		101,013		111,222
Diluted		99,479		108,822		101,013		112,252
Cash dividends paid per common share	$	0.21	$	0.20	$	0.63	$	0.60

See notes to consolidated financial statements.

Table of Contents

AVNET, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


	Third Quarters Ended				Nine Months Ended
	March 28,		March 30,		March 28,		March 30,
	2020		2019		2020		2019
	(Thousands)
Net (loss) income	$	(128,661)	$	88,048	$	(83,242)	$	208,173
Other comprehensive (loss) income, net of tax:
Foreign currency translation and other		(96,351)		1,193		(105,311)		(55,203)
Pension adjustments, net		3,167		1,249		10,148		6,212
Total comprehensive (loss) income	$	(221,845)	$	90,490	$	(178,405)	$	159,182

See notes to consolidated financial statements.

Table of Contents

AVNET, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(Unaudited)


									Accumulated
	Common		Common		Additional				Other		Total
	Stock-		Stock-		Paid-In		Retained		Comprehensive		Shareholders’
	Shares		Amount		Capital		Earnings		(Loss) Income		Equity
	(Thousands)
Balance, June 29, 2019		104,038	$	104,038	$	1,573,005	$	2,767,469	$	(304,039)	$	4,140,473
Net income		—		—		—		41,752		—		41,752
Translation adjustments and other		—		—		—		—		(102,146)		(102,146)
Pension liability adjustments, net		—		—		—		—		3,813		3,813
Cash dividends		—		—		—		(21,451)		—		(21,451)
Repurchases of common stock		(2,631)		(2,631)		—		(109,504)		—		(112,135)
Stock-based compensation		64		64		7,701		—		—		7,765
Balance, September 28, 2019		101,471	$	101,471	$	1,580,706	$	2,678,266	$	(402,372)	$	3,958,071
Net income		—		—		—		3,668		—		3,668
Translation adjustments and other		—		—		—		—		93,186		93,186
Pension liability adjustments, net		—		—		—		—		3,168		3,168
Cash dividends		—		—		—		(20,975)		—		(20,975)
Repurchases of common stock		(2,135)		(2,135)		—		(85,423)		—		(87,558)
Stock-based compensation		13		13		7,760		—		—		7,773
Balance, December 28, 2019		99,349	$	99,349	$	1,588,466	$	2,575,536	$	(306,018)	$	3,957,333
Net loss		—		—		—		(128,661)		—		(128,661)
Translation adjustments and other		—		—		—		—		(96,351)		(96,351)
Pension liability adjustments, net		—		—		—		—		3,167		3,167
Cash dividends		—		—		—		(20,810)		—		(20,810)
Repurchases of common stock		(1,104)		(1,104)		—		(35,640)		—		(36,744)
Stock-based compensation		516		516		(1,172)		—		—		(656)
Balance, March 28, 2020		98,761	$	98,761	$	1,587,294	$	2,390,425	$	(399,202)	$	3,677,278


									Accumulated
	Common		Common		Additional				Other		Total
	Stock-		Stock-		Paid-In		Retained		Comprehensive		Shareholders’
	Shares		Amount		Capital		Earnings		(Loss) Income		Equity
	(Thousands)
Balance, June 30, 2018		115,825	$	115,825	$	1,528,713	$	3,235,894	$	(195,351)	$	4,685,081
Net income		—		—		—		83,724		—		83,724
Translation adjustments and other		—		—		—		—		8,801		8,801
Pension liability adjustments, net		—		—		—		—		756		756
Cash dividends		—		—		—		(22,932)		—		(22,932)
Repurchases of common stock		(3,315)		(3,315)		—		(153,582)		—		(156,897)
Effects of new accounting principles		—		—		—		(3,832)		—		(3,832)
Stock-based compensation		521		521		25,851		—		—		26,372
Balance, September 29, 2018		113,031	$	113,031	$	1,554,564	$	3,139,272	$	(185,794)	$	4,621,073
Net income		—		—		—		36,401		—		36,401
Translation adjustments and other		—		—		—		—		(65,197)		(65,197)
Pension liability adjustments, net		—		—		—		—		4,207		4,207
Cash dividends		—		—		—		(21,769)		—		(21,769)
Repurchases of common stock		(4,116)		(4,116)		—		(170,967)		—		(175,083)
Stock-based compensation		36		36		9,069		—		—		9,105
Balance, December 29, 2018		108,951	$	108,951	$	1,563,633	$	2,982,937	$	(246,784)	$	4,408,737
Net income		—		—		—		88,048		—		88,048
Translation adjustments and other		—		—		—		—		1,193		1,193
Pension liability adjustments, net		—		—		—		—		1,249		1,249
Cash dividends		—		—		—		(21,487)		—		(21,487)
Repurchases of common stock		(2,816)		(2,816)		—		(114,421)		—		(117,237)
Stock-based compensation		519		519		1,450		—		—		1,969
Balance, March 30, 2019		106,654	$	106,654	$	1,565,083	$	2,935,077	$	(244,342)	$	4,362,472

See notes to consolidated financial statements.

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AVNET, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Nine Months Ended
	March 28,		March 30,
	2020		2019
	(Thousands)
Cash flows from operating activities:
Net (loss) income	$	(83,242)	$	208,173
Less: Loss from discontinued operations, net of tax		(1,548)		(7,066)
Income (loss) from continuing operations		(81,694)		215,239

Non-cash and other reconciling items:
Depreciation		75,535		72,692
Amortization		62,240		63,123
Amortization of operating lease assets		46,560		—
Deferred income taxes		(42,529)		45,286
Stock-based compensation		20,757		24,204
Goodwill and intangible asset impairment		145,836		—
Other, net		35,000		42,786
Changes in (net of effects from businesses acquired and divested):
Receivables		150,095		436,382
Inventories		227,996		(125,410)
Accounts payable		(112,923)		(399,526)
Accrued expenses and other, net		(84,263)		(118,347)
Net cash flows provided by operating activities - continuing operations		442,610		256,429
Net cash flows used for operating activities - discontinued operations		—		(56,284)
Net cash flows provided by operating activities		442,610		200,145

Cash flows from financing activities:
Borrowings (repayments) under accounts receivable securitization, net		(127,400)		342,000
Repayments under bank credit facilities and other debt, net		(1,639)		(11,386)
Borrowings (repayments) under senior unsecured credit facility, net		(1,194)		85,005
Repurchases of common stock		(235,830)		(447,901)
Dividends paid on common stock		(63,235)		(66,188)
Other, net		(15,132)		10,042
Net cash flows used for financing activities - continuing operations		(444,430)		(88,428)
Net cash flows used for financing activities		(444,430)		(88,428)

Cash flows from investing activities:
Purchases of property, plant and equipment		(61,156)		(101,383)
Acquisitions of businesses, net of cash acquired		(51,509)		(66,458)
Other, net		(12,547)		42,069
Net cash flows used for investing activities - continuing operations		(125,212)		(125,772)
Net cash flows provided by investing activities - discontinued operations		—		123,473
Net cash flows used for investing activities		(125,212)		(2,299)

Effect of currency exchange rate changes on cash and cash equivalents		(16,418)		(5,291)

Cash and cash equivalents:
— (decrease) increase		(143,450)		104,127
— at beginning of period		546,105		621,125
— at end of period	$	402,655	$	725,252

See notes to consolidated financial statements.

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AVNET, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

1. Basis of presentation and new accounting pronouncements

In the opinion of management, the accompanying unaudited interim consolidated financial statements contain all adjustments necessary to present fairly Avnet, Inc. and its consolidated subsidiaries’ (collectively, the “Company” or “Avnet”) financial position, results of operations, comprehensive income and cash flows. All such adjustments are of a normal recurring nature.

The preparation of financial statements in accordance with generally accepted accounting principles in the United States (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements. Actual results may differ from these estimates and assumptions.

Interim results of operations are not necessarily indicative of the results to be expected for the full fiscal year. The information included in this Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 29, 2019.

Certain reclassifications have been made in prior periods to conform to the current period presentation.

Recently adopted accounting pronouncements

The Company adopted Accounting Standards Update (“ASU”) No. 2016-02, “Leases (Topic 842),” and its related amendments (collectively “ASC 842”) on June 30, 2019 (the first day of fiscal 2020) using the modified transition approach without restating the comparative period consolidated financial statements. The standard requires lessees to recognize a right-of-use asset and a short-term and long-term lease liability for all leases.

The adoption of ASC 842 did not have a material impact on the Company’s consolidated statements of operations or retained earnings. The Company elected the package of practical expedients permitted under the transition guidance that allowed, among other things, the historical lease classification to be carried forward without reassessment and the hindsight practical expedient. The Company elected to not separate lease and non-lease components for its real estate leases. Refer to Note 5 for additional disclosures related to leases.

In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815) - Targeted Improvements to Accounting for Hedging Activities” and its related amendments (collectively “ASC 815”), which improves the financial reporting of hedging relationships to better portray the economic results of an entity’s risk management activities in its financial statements and makes certain targeted improvements to simplify the qualification and application of hedge accounting compared to historical GAAP. This update is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The adoption of ASC 815 in the first quarter of fiscal 2020 did not have an impact on the Company’s consolidated financial statements.

Recently issued accounting pronouncements

In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU No. 2020-04”), which provides optional guidance to ease the potential burden in accounting for reference rate reform on financial reporting. The new guidance provides optional expedients and exceptions for applying generally accepted accounting principles to transactions affected by reference rate reform if certain criteria are met. The company is currently evaluating the potential effects of adopting the provisions of ASU No. 2020-04.

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AVNET, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

In January 2020, the FASB issued ASU No. 2020-01 - Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)-Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 (“ASU No.2020-01”), which clarifies the interaction of the accounting for certain equity securities, equity method investments, and certain derivatives. ASU No. 2020-01 will be effective for the Company in the first quarter of fiscal 2022, and early adoption is permitted. The Company is currently evaluating the potential effects of adopting the provisions of ASU No. 2020-01.

In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes (Topic 740), (“ASU No. 2019-12”) which removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. ASU No. 2019-12 will be effective for the Company in the first quarter of fiscal 2022, and early adoption is permitted. Depending on the amendment, adoption may be applied on the retrospective, modified retrospective or prospective basis. The Company is currently evaluating the potential effects of adopting the provisions of ASU No. 2019-12.

In August 2018, the FASB issued ASU No. 2018-15, Intangibles—Goodwill and Other— Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force) ("ASU No. 2018-15"). ASU No. 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop internal-use software. ASU No. 2018-15 is effective for the Company in the first quarter of fiscal 2021, with early adoption permitted, and is to be applied either retrospectively or prospectively. The Company is currently evaluating the potential effects of adopting the provisions of ASU No. 2018-15.

In August 2018, the FASB issued ASU No. 2018-14, Compensation-Retirement Benefits-Defined Benefit Plans-General (Subtopic 715-20): Disclosure Framework-Changes to the Disclosure Requirements for Defined Benefit Plans (“ASU No. 2018-14”). The new guidance modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans, including removing certain previous disclosure requirements, adding certain new disclosure requirements, and clarifying certain other disclosure requirements. ASU No. 2018-14 will be effective for the Company in the first quarter of fiscal 2022, and early adoption is permitted. The Company’s planned adoption of ASU No. 2018-14 is not expected to have an impact on the Company’s consolidated financial statements.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU No. 2016-13") and also issued subsequent amendments to the initial guidance: ASU No. 2018-19, ASU No. 2019-04, ASU No. 2019-05, and ASU No. 2019-11 (collectively, Topic 326). Topic 326 revises the methodology for measuring credit losses on financial instruments and the timing of when such losses are recorded. Topic 326 is effective for the Company in the first quarter of fiscal 2021, with early adoption permitted, and is to be applied using a modified retrospective approach. The Company is currently evaluating the potential effects of adopting the provisions of Topic 326.

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AVNET, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

2. Acquisitions and discontinued operations

Acquisitions

In the second quarter of fiscal 2020, the Company completed two acquisitions. The impact of these acquisitions was not material to the Company’s consolidated balance sheets or statements of operations and as a result, the Company has not disclosed the preliminary allocation of purchase price or the pro-forma impact of the acquisition.

See Note 3 for further discussion of impairment considerations related to goodwill and long-lived assets.

Discontinued Operations

In February 2017, the Company completed the sale of its Technology Solutions business (“TS business”) to Tech Data Corporation (the “Buyer”). The TS business and the financial impacts of the divestiture are classified as discontinued operations in all periods presented. In August 2018, the Company executed a settlement agreement with the Buyer resulting in a final sales price increase of $120.0 million and a final geographic allocation of the TS business sales price for tax reporting purposes. This incremental consideration received from the sale of the TS business as well as cash settlements from the resolution of indemnification claims and other cash reimbursements have been classified as cash flows from discontinued operations investing activities. Income tax payments related to the gain on sale of the TS business have been classified as cash flows from discontinued operations operating activities.

Under the contractual terms of the sale of the TS business, the Company has indemnified the Buyer for certain liabilities including tax related matters, which may result in future indemnification expenses and indemnification payments to the Buyer depending upon the outcome of those matters subject to indemnification.

3. Goodwill and intangible assets

Goodwill

The following table presents the change in goodwill by reportable segment for the nine months ended March 28, 2020.


	Electronic
	Components		Farnell		Total
	(Thousands)
Carrying value at June 29, 2019 ⁽¹⁾	$	390,896	$	485,832	$	876,728
Additions from acquisitions		30,562		—		30,562
Impairment of goodwill		(120,475)		—		(120,475)
Foreign currency translation		(5,970)		(19,906)		(25,876)
Carrying value at March 28, 2020 ⁽¹⁾	$	295,013	$	465,926	$	760,939

(1)Includes accumulated impairment of $1,045,110 from fiscal 2009, $181,440 from fiscal 2018 and $137,396 from fiscal 2019

The Company evaluates each quarter if facts and circumstances indicate that it is more likely than not that the fair value of its reporting units is less than their carrying value, which would require the Company to perform an interim goodwill impairment test. Indicators the Company evaluates to determine whether an interim goodwill impairment test is necessary include, but are not limited to, (i) a sustained decrease in share price or market capitalization as of any fiscal quarter end, (ii) changes in macroeconomic or industry environments, (iii) the results of and the amount of time passed since the last goodwill impairment test and (iv) the long-term expected financial performance of its reporting units.

Table of Contents

AVNET, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Intangible Assets

The following table presents the Company’s acquired intangible assets at March 28, 2020 and June 29, 2019, respectively.


	March 28, 2020						June 29, 2019
	Acquired		Accumulated		Net Book		Acquired		Accumulated		Net Book
	Amount ⁽¹⁾		Amortization		Value		Amount		Amortization		Value
	(Thousands)
Customer related	$	290,199	$	(247,495)	$	42,704	$	292,266	$	(208,329)	$	83,937
Trade name		50,627		(29,810)		20,817		52,760		(24,752)		28,008
Technology and other		52,674		(38,889)		13,785		63,753		(32,178)		31,575
	$	393,500	$	(316,194)	$	77,306	$	408,779	$	(265,259)	$	143,520

(1)Includes intangible asset impairment of $17,494 in the third quarter of fiscal 2020

Intangible asset amortization expense from continuing operations was $21.0 million and $21.9 million for the third quarters of fiscal 2020 and 2019, respectively, and $62.2 million and $63.1 million for the first nine months of fiscal 2020 and 2019, respectively. Intangible assets have a weighted average remaining useful life of approximately 2 years. The following table presents the estimated future amortization expense for the remainder of fiscal 2020 and the next five fiscal years (in thousands):


Fiscal Year
Remainder of fiscal 2020	$	18,708
2021		36,410
2022		12,610
2023		4,795
2024		1,472
2025		3,311
Total	$	77,306

Goodwill and intangible asset impairment expense

An interim goodwill impairment test was performed as of March 28, 2020. The macroeconomic impacts of the global coronavirus pandemic (“COVID-19”) and the corresponding decline in the Company’s share price below tangible book value, were indicators in the third quarter of fiscal 2020, that goodwill was potentially not recoverable.

The Company recorded non-cash goodwill impairment expense of $120.5 million during the third quarter of fiscal 2020, related to reporting units in the Electronic Components (EC) reportable segment including goodwill in the Americas and goodwill associated with recent acquisitions. The impairment of goodwill in such reporting units was primarily the result of COVID-19 related impacts including the significant decline in market capitalization during the quarter as well as a reduction in expected future operating results.

In assessing goodwill for impairment in the third quarter of fiscal 2020, the Company was required to make significant judgments related to the fair value of its reporting units. The Company used a combination of an income approach, specifically a discounted cash flow methodology, and a market approach to estimate the fair value of its reporting units. The discounted cash flow methodology includes market participant assumptions for, among other factors, forecasted sales, gross profit margins, operating expenses, cash flows, perpetual growth rates and long-term discount rates, all of which required judgments and estimates by management that are inherently uncertain. The market approach methodology required significant assumptions related to comparable transactions, market multiples, capital structure and control

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premiums. The interim goodwill impairment testing results were also reconciled with the Company’s market capitalization on and around March 28, 2020, as the final step in the impairment testing.

The Company also performed asset impairment testing over long-lived assets, including intangible assets and property, plant and equipment, as of March 28, 2020 due primarily to the same indicators that led to the interim goodwill impairment testing. As a result of such long-lived asset impairment testing, the Company recorded $25.3 million in impairment expense substantially all related to intangible assets.

Other impairment expense

During the third quarter of fiscal 2020, the Company also recorded $15.3 million of equity investment impairment expense classified within other (expense) income, net in the consolidated statements of operations.

4. Debt

Short-term debt consists of the following (carrying balances in thousands):


	March 28,		June 29,		March 28,		June 29,
	2020		2019		2020		2019
	Interest Rate				Carrying Balance
Bank credit facilities and other	4.76	%	1.02	%	$	65	$	538
Accounts receivable securitization program (due August 2020)	1.71	%	—			99,900		—
Public notes due June 2020	5.88	%	5.88	%		300,000		300,000
Short-term debt					$	399,965	$	300,538

Bank credit facilities and other consists primarily of various committed and uncommitted lines of credit and other forms of bank debt with financial institutions utilized primarily to support the working capital requirements of the Company including its foreign operations.

The Company has a trade accounts receivable securitization program (the “Securitization Program”) in the United States with a group of financial institutions to allow the Company to transfer, on an ongoing revolving basis, an undivided interest in a designated pool of trade accounts receivable, to provide security or collateral for borrowings up to a maximum of $500 million. The Securitization Program does not qualify for off balance sheet accounting treatment and any borrowings under the Securitization Program are recorded as debt in the consolidated balance sheets. Under the Securitization Program, the Company legally sells and isolates certain U.S. trade accounts receivable into a wholly owned and consolidated bankruptcy remote special purpose entity. Such receivables, which are recorded within “Receivables” in the consolidated balance sheets, totaled $756.7 million and $857.3 million at March 28, 2020 and June 29, 2019, respectively. The Securitization Program contains certain covenants relating to the quality of the receivables sold. The Securitization Program also requires the Company to maintain certain minimum interest coverage and leverage ratios, which the Company was in compliance with as of March 28, 2020, and June 29, 2019. Interest on borrowings is calculated using a one-month LIBOR rate plus a spread of 0.75%. The facility fee on the unused balance of the facility is up to 0.35%.

On March 31, 2020, the Company notified Wells Fargo Bank, N.A., as Trustee, that it has elected to redeem on April 30, 2020, all of its outstanding 5.875% Notes due June 15, 2020 (“Notes”) at a make-whole redemption price in accordance with the terms of the Notes and the indenture. On April 30, 2020, the Company redeemed $300 million in principal amount of the Notes with a combination of cash on hand and by drawing on its existing $1.25 billion senior unsecured revolving credit facility, which is scheduled to mature on June 28, 2023. The make-whole premium for the early redemption was not material.

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Long-term debt consists of the following (carrying balances in thousands):

March 28,

June 29,

March 28,

June 29,

2020

2019

2020

2019