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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 April 3, 2021

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 21, 2021, the total number of shares outstanding of the registrant’s Common Stock was 99,502,049 shares, net of treasury shares.

Table of Contents

AVNET, INC. AND SUBSIDIARIES

INDEX

Page No.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

Consolidated Balance Sheets at April 3, 2021 and June 27, 2020

2

Consolidated Statements of Operations for the third quarters and nine months ended April 3, 2021 and March 28, 2020

3

Consolidated Statements of Comprehensive Income for the third quarters and nine months ended April 3, 2021 and March 28, 2020

4

Consolidated Statements of Shareholders’ Equity for the third quarters and nine months ended April 3, 2021 and March 28, 2020

5

Consolidated Statements of Cash Flows for the nine months ended April 3, 2021 and March 28, 2020

6

Notes to Consolidated Financial Statements

7

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

20

Item 3. Quantitative and Qualitative Disclosures About Market Risk

29

Item 4. Controls and Procedures

29

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

30

Item 1A. Risk Factors

30

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

30

Item 6. Exhibits

31

Signature Page

32

1

Table of Contents

PART I

FINANCIAL INFORMATION

Item 1.

Financial Statements

AVNET, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)

    

April 3,

    

June 27,

 

2021

2020

 

(Thousands, except share

 

amounts)

 

ASSETS

Current assets:

Cash and cash equivalents

$

322,749

$

477,038

Receivables

 

3,365,677

 

2,928,386

Inventories

 

2,760,156

 

2,731,988

Prepaid and other current assets

 

156,023

 

191,394

Total current assets

 

6,604,605

 

6,328,806

Property, plant and equipment, net

 

381,083

 

404,607

Goodwill

 

838,460

 

773,734

Intangible assets, net

 

33,770

 

65,437

Operating lease assets

275,662

275,917

Other assets

 

232,335

 

256,696

Total assets

$

8,365,915

$

8,105,197

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:

Short-term debt

$

300,043

$

51

Accounts payable

 

2,001,743

 

1,754,078

Accrued expenses and other

526,974

472,924

Short-term operating lease liabilities

 

57,182

 

53,313

Total current liabilities

 

2,885,942

 

2,280,366

Long-term debt

 

895,913

 

1,424,791

Long-term operating lease liabilities

250,108

253,719

Other liabilities

 

396,065

 

419,923

Total liabilities

 

4,428,028

 

4,378,799

Commitments and contingencies (Note 9)

Shareholders’ equity:

Common stock $1.00 par; authorized 300,000,000 shares; issued 99,489,060 shares and 98,792,542 shares, respectively

 

99,489

 

98,793

Additional paid-in capital

 

1,611,114

 

1,594,140

Retained earnings

 

2,452,723

 

2,421,845

Accumulated other comprehensive loss

 

(225,439)

 

(388,380)

Total shareholders’ equity

 

3,937,887

 

3,726,398

Total liabilities and shareholders’ equity

$

8,365,915

$

8,105,197

See notes to consolidated financial statements.

2

Table of Contents

AVNET, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

Third Quarters Ended

Nine Months Ended

    

April 3,

    

March 28,

    

April 3,

    

March 28,

2021

2020

2021

2020

(Thousands, except per share amounts)

Sales

$

4,916,714

$

4,309,818

$

14,307,945

$

13,474,632

Cost of sales

 

4,348,364

 

3,790,885

 

12,712,262

 

11,886,247

Gross profit

 

568,350

 

518,933

 

1,595,683

 

1,588,385

Selling, general and administrative expenses

 

463,092

 

469,646

 

1,376,333

 

1,391,024

Goodwill and long-lived asset impairment expense

145,836

145,836

Restructuring, integration and other expenses

 

17,574

 

19,211

 

55,943

 

58,073

Operating income (loss)

 

87,684

 

(115,760)

 

163,407

 

(6,548)

Other income (expense), net

 

4,779

 

(12,608)

 

(16,052)

 

(9,640)

Interest and other financing expenses, net

 

(22,342)

 

(29,718)

 

(66,128)

 

(97,254)

Income (loss) before taxes

 

70,121

 

(158,086)

 

81,227

 

(113,442)

Income tax benefit

 

(37,363)

 

(29,425)

 

(26,532)

 

(30,200)

Net income (loss)

$

107,484

$

(128,661)

$

107,759

$

(83,242)

Earnings (loss) per share:

Basic

$

1.08

$

(1.29)

$

1.09

$

(0.82)

Diluted

$

1.07

$

(1.29)

$

1.08

$

(0.82)

Shares used to compute earnings per share:

Basic

 

99,542

 

99,479

 

99,125

 

101,013

Diluted

 

100,247

 

99,479

 

100,013

 

101,013

Cash dividends paid per common share

$

0.21

$

0.21

$

0.63

$

0.63

See notes to consolidated financial statements.

3

Table of Contents

AVNET, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

Third Quarters Ended

Nine Months Ended

    

April 3,

    

March 28,

     

April 3,

    

March 28,

2021

2020

2021

2020

(Thousands)

Net income (loss)

$

107,484

$

(128,661)

$

107,759

$

(83,242)

Other comprehensive income (loss), net of tax:

Foreign currency translation and other

 

(65,021)

 

(96,351)

 

145,352

 

(105,311)

Pension adjustments, net

 

3,983

 

3,167

 

17,589

 

10,148

Total comprehensive income (loss)

$

46,446

$

(221,845)

$

270,700

$

(178,405)

See notes to consolidated financial statements.

4

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 27, 2020

 

98,793

$

98,793

$

1,594,140

$

2,421,845

$

(388,380)

$

3,726,398

Net loss

 

 

 

 

(18,889)

 

 

(18,889)

Translation adjustments and other

 

 

 

 

 

90,373

 

90,373

Pension liability adjustments, net

9,623

9,623

Cash dividends

 

 

 

 

(20,756)

 

 

(20,756)

Effects of new accounting principles, net

(14,480)

(14,480)

Stock-based compensation

 

51

51

5,191

5,242

Balance, October 3, 2020

 

98,844

$

98,844

$

1,599,331

$

2,367,720

$

(288,384)

$

3,777,511

Net income

 

 

 

 

19,163

 

 

19,163

Translation adjustments and other

 

 

 

 

 

120,000

 

120,000

Pension liability adjustments, net

3,983

3,983

Cash dividends

 

 

 

 

(20,756)

 

 

(20,756)

Stock-based compensation

 

18

 

18

 

10,814

 

 

 

10,832

Balance, January 2, 2021

98,862

$

98,862

$

1,610,145

$

2,366,127

$

(164,401)

$

3,910,733

Net income

 

 

 

 

107,484

 

 

107,484

Translation adjustments and other

 

 

 

 

 

(65,021)

 

(65,021)

Pension liability adjustments, net

3,983

3,983

Cash dividends

 

 

 

 

(20,888)

 

 

(20,888)

Stock-based compensation

 

627

 

627

 

969

 

 

 

1,596

Balance, April 3, 2021

99,489

$

99,489

$

1,611,114

$

2,452,723

$

(225,439)

$

3,937,887

    

    

    

    

    

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

See notes to consolidated financial statements.

5

Table of Contents

AVNET, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

Nine Months Ended

    

April 3,

    

March 28,

2021

2020

(Thousands)

Cash flows from operating activities:

Net income (loss)

$

107,759

$

(83,242)

Non-cash and other reconciling items:

Depreciation

 

67,462

 

75,535

Amortization

 

35,730

 

62,240

Amortization of operating lease assets

42,054

46,560

Deferred income taxes

 

11,510

 

(42,529)

Stock-based compensation

 

22,293

 

20,757

Goodwill, long-lived asset and other impairments

 

15,166

 

145,836

Other, net

 

7,558

 

36,548

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

Receivables

 

(405,700)

 

150,095

Inventories

 

63,017

 

227,996

Accounts payable

 

224,151

 

(112,923)

Accrued expenses and other, net

 

6,526

 

(84,263)

Net cash flows provided by operating activities

 

197,526

 

442,610

Cash flows from financing activities:

Repayments under accounts receivable securitization, net

 

 

(127,400)

Repayments under senior unsecured credit facility, net

(232,347)

 

(1,194)

Repayments under bank credit facilities and other debt, net

 

(2,192)

 

(1,639)

Repurchases of common stock

 

 

(235,830)

Dividends paid on common stock

 

(62,400)

 

(63,235)

Other, net

 

(11,455)

 

(15,132)

Net cash flows used for financing activities

 

(308,394)

 

(444,430)

Cash flows from investing activities:

Purchases of property, plant and equipment

 

(39,001)

 

(61,156)

Acquisitions of assets

 

(18,371)

 

(51,509)

Other, net

 

6,201

 

(12,547)

Net cash flows used for investing activities

 

(51,171)

 

(125,212)

Effect of currency exchange rate changes on cash and cash equivalents

 

7,750

 

(16,418)

Cash and cash equivalents:

— decrease

(154,289)

(143,450)

— at beginning of period

477,038

546,105

— at end of period

$

322,749

$

402,655

See notes to consolidated financial statements.

6

Table of Contents

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 27, 2020.

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

Fiscal year

The Company operates on a “52/53 week” fiscal year, and fiscal 2021 contains 53 weeks compared to fiscal 2020, which contained 52 weeks. As a result, the first nine months of fiscal 2021 ended April 3, 2021, contained 40 weeks compared to the first nine months of fiscal 2020 ended March 28, 2020, which contained 39 weeks.

Recently adopted accounting pronouncements

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. The adoption of ASU No. 2018-15 in the first quarter of fiscal 2021 did not have a material 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. On June 28, 2020, the Company adopted Topic 326 using a modified retrospective approach with a cumulative effect adjustment to the opening balance of retained earnings, which increased the allowance for credit losses by $17.2 million ($14.5 million, net of tax of $2.7 million). Increases in the allowance for credit losses relate to the required change from an incurred loss model to an expected loss model, and the related change in timing of loss recognition where an allowance for credit losses is now applied at the time the asset, or pool of assets, is recognized.

7

Table of Contents

AVNET, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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. In January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848): Scope (“ASU No. 2021-01”), to clarify certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. Both ASU No. 2020-04 and ASU No. 2021-01 are effective upon issuance through December 31, 2022. The Company is currently evaluating the effects of adopting the provisions of ASU No. 2020-04, but does not currently expect a material impact on the Company’s consolidated financial statements.

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 a 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. 2018-14, 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 a material impact on the Company’s consolidated financial statements.

2. Summary of significant accounting policies

Except for the changes below, no material changes have been made to the Company’s significant accounting policies as disclosed in Note 1, Summary of Significant Accounting Policies, in its Annual Report on Form 10-K for the fiscal year ended June 27, 2020.

Receivables – Receivables, predominately comprised of trade accounts and notes receivable, are reported at amortized cost, net of the allowance for credit losses in the consolidated balance sheets. The allowance for credit losses is a valuation account that is deducted from the receivables’ amortized cost basis to present the net amount expected to be collected. The Company estimates the allowance for credit losses using relevant available information about expected credit losses, including information about historical credit losses, past events, current conditions, and other factors which may affect the collectability of receivables. Adjustments to historical loss information are made for differences in current receivable specific risk characteristics such as changes in customer behavior, economic and industry changes, or other relevant factors. Expected credit losses are estimated on a pooled basis, when similar risk characteristics exist.

3. Acquisitions

In the first quarter of fiscal 2021, the Company completed an asset acquisition. The impact of this asset acquisition was not material to the Company’s consolidated balance sheets or statements of operations.

8

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AVNET, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

4. Receivables

The Company’s receivables and allowance for credit losses were as follows:

April 3,

June 27,

2021

2020

(Thousands)

Receivables

$

3,451,466

$

2,993,404

Allowance for Credit Losses

(85,789)

(65,018)

The Company had the following activity in the allowance for credit losses during the first nine months of fiscal 2021:

April 3,

2021

(Thousands)

Balance at June 27, 2020

$

65,018

Effect of adoption of new credit loss accounting standard (Note 1)

17,205

Credit Loss Provisions

7,370

Credit Loss Recoveries

(192)

Receivables Write offs

(5,666)

Foreign Currency Effect and Other

2,054

Balance at April 3, 2021

$

85,789

5. Goodwill and intangible assets

Goodwill

The following table presents the change in goodwill by reportable segment for the nine months ended April 3, 2021.

  

Electronic

  

  

Components

Farnell

Total

(Thousands)

Carrying value at June 27, 2020 (1)

$

297,836

$

475,898

$

773,734

Foreign currency translation

 

12,142

 

52,584

 

64,726

Carrying value at April 3, 2021 (1)

$

309,978

$

528,482

$

838,460

(1)Includes accumulated impairment of $1,045,110 from fiscal 2009, $181,440 from fiscal 2018, $137,396 from fiscal 2019 and $118,731 from fiscal 2020.

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. During the third quarter of fiscal 2021, the Company concluded that an interim goodwill impairment test was not required.

9

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AVNET, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Intangible Assets

The following table presents the Company’s acquired intangible assets at April 3, 2021 and June 27, 2020, respectively.

April 3, 2021

June 27, 2020

 

Acquired

Accumulated

Net Book

 Acquired 

 Accumulated 

 Net Book 

 

    

Amount

    

Amortization

    

Value

    

Amount(1)

    

Amortization

    

Value

 

(Thousands)

 

Customer related

$

324,923

$

(312,189)

$

12,734

$

300,937

$

(266,759)

$

34,178

Trade name

 

57,259

 

(42,788)

 

14,471

 

51,698

 

(32,493)

 

19,205

Technology and other

 

57,756

 

(51,191)

 

6,565

 

53,641

 

(41,587)

 

12,054

$

439,938

$

(406,168)

$

33,770

$

406,276

$

(340,839)

$

65,437

(1)Acquired amount reduced by impairment of $17,473 from fiscal 2020.

Intangible asset amortization expense was $5.3 million and $21.0 million for the third quarters of fiscal 2021 and 2020, respectively, and $35.7 million and $62.2 million for the first nine months of fiscal 2021 and 2020, respectively. Intangible assets have a weighted average remaining useful life of less than 3 years. The following table presents the estimated future amortization expense for the remainder of fiscal 2021 and the next five fiscal years (in thousands):

Fiscal Year

    

Remainder of fiscal 2021

$

5,261

2022

15,431

2023

 

6,610

2024

 

3,156

2025

 

1,472

2026

 

1,472

Thereafter

 

368

Total

$

33,770

6. Debt

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

April 3,

June 27,

April 3,

June 27,

2021

   

2020

   

2021

   

2020

Interest Rate

Carrying Balance

 

Bank credit facilities and other

0.93

%

5.69

%

$

43

$

51

Accounts receivable securitization program

Public notes due December 2021

3.75

%

 

300,000

 

Short-term debt

$

300,043

$

51

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.

10

Table of Contents

AVNET, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

In July 2020, the Company amended and extended for one year, its 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 $450 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 $683.3 million and $703.8 million at April 3, 2021 and June 27, 2020, respectively. The Securitization Program contains certain covenants relating to the quality of the receivables sold. Interest on borrowings is calculated using a one-month LIBOR rate plus a spread of 1.05%. The facility fee on the unused balance of the facility is up to 0.40%.

During the third quarter of fiscal 2021, the Company committed to an early redemption of all $300 million of its outstanding 3.75% Public notes due December 2021. The loss on debt extinguishment, primarily related to a contractual make-whole premium, is expected to be approximately $5 million and will be classified as a component of other income (expense), net upon redemption of the notes, which is expected to occur on April 30, 2021.

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

April 3,

June 27,

April 3,

June 27,

2021

    

2020

  

2021

  

2020

Interest Rate

Carrying Balance

 

Revolving credit facilities:

Credit Facility (due June 2023)

1.28

%

$

$

230,000

Public notes due:

December 2021

3.75

%

300,000

December 2022

4.88

%

4.88

%

 

350,000

 

350,000

April 2026

4.63

%

4.63

%

550,000

550,000

Other long-term debt

1.21

%

1.19

%

 

1,312

 

1,491

Long-term debt before discount and debt issuance costs