Avnet, Inc. Reports Second Quarter Fiscal Year 2014 Results

Rick Hamada, Chief Executive Officer, commented, “We are encouraged by the overall progress in our financial performance this quarter as we exceeded our original expectations for both revenue and earnings while also experiencing continued momentum in our year-over-year organic growth. In the December quarter, strong demand for IT infrastructure in our TS Americas region and continued growth in our Asia components business drove revenue above our expectations at both operating groups. Revenue grew 17.0% sequentially to a record $7.4 billion and year-over-year organic growth improved for a third consecutive quarter to 8.2%. The growth in revenue, combined with continued expense and working capital discipline, drove operating margins and return on working capital to 3.6% and 24.0%, respectively, our highest level in six quarters. With growth now evident in many of our served markets, we expect to build on this performance and leverage future growth into higher margins and returns across our portfolio.”


Avnet Electronics Marketing Results

				Year-over-Year Growth Rates
	Q2 FY14 Sales			Reported Sales			Organic Sales
	(in millions)
EM Total	$	4,154.8		13.1		%	11.9	%
Excluding FX ⁽¹⁾				12.7		%	11.4	%
Americas	$	1,204.4		-4.8		%	3.2	%
EMEA	$	1,217.0		33.1		%	18.0	%
Excluding FX ⁽¹⁾				27.4		%	13.0	%
Asia	$	1,733.4		16.0		%	14.4	%

	Q2' FY14			Q2' FY13			Change
Operating Income	$	171.7		$	143.0		20.1	%
Operating Income Margin	4.1		%	3.9		%	24 bps


(1)		Year-over-year sales growth rate excluding the impact of changes in foreign currency exchange rates.

Reported sales increased 13.1% year over year to $4.2 billion while organic sales were up 11.4% in constant currency
Sequential sales growth of 1.6% (in constant currency) was above the Company's expectations and the high end of normal seasonality due to better than expected growth in the high volume fulfillment business in Asia
Operating income margin increased 24 basis points year over year to 4.1% primarily due to improvements in the Americas and Asia regions
Working capital (defined as receivables plus inventory less accounts payables) increased 5.2% sequentially due to the acquisition of MSC and a decrease in payables as EM continued its strong inventory management discipline; excluding acquisitions and the impact of currency, inventory declined 4.9%
Return on working capital (ROWC) increased 236 basis points year over year primarily due to higher operating income

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