“Our focus on cost management resulted in a $26.4 million reduction in selling, general, and administrative expenses year over year on a 9.2% growth in revenue. We also took steps to realize greater efficiencies longer term by opening a new distribution center in Hong Kong this quarter,” said Tom Liguori, Chief Financial Officer, Avnet. “We reduced net working capital days and remain on schedule for achieving our long term target of 70 days. We continued implementing our capital allocation strategy by repurchasing 3.3 million shares this quarter, and we increased our quarterly dividend by more than 5% to $0.20 per share for a total return to shareholders of $179.8 million.”
Additional First Quarter Fiscal 2019 Highlights
- The Electronic Components business sales rose 9.4% year over year to $4.7 billion with operating margins of 3.4%
- Premier Farnell sales rose 7.2% to $379 million, with operating margins rising to 10.8% compared with 9.2% last year
- Asia continued to deliver the strongest growth by region with year-over-year sales rising 18%
- Sales in the Americas rose 7.3% year over year and operating margin continued to improve as recovery continues in the Americas
- Book-to-bill ratio at the end of the quarter remained positive at greater than 1.0
- Cash and cash equivalents at the end of the quarter was $365.9 million; net debt (total debt less cash and cash equivalents) was $1.20 billion
- Cash used for operations was $85 million primarily for inventory to support second quarter sales
- Received $120 million of additional proceeds from finalizing the sale price of the Technology Solutions Business, which was used to repurchase shares
- Expanded share repurchase authorization by $500 million, repurchased 3.3 million shares, and increased quarterly dividend by 5.3% to $0.20 per share for a total return to shareholders of $179.8 million during the quarter
Other Highlights
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Won five prestigious awards from the following organizations:
- Nordic Semiconductor ASA named Avnet Distributor of the Year
- Received the Supplier Excellence Award for Outstanding Distributor from L3 Technologies CS-West Division
- Panasonic Batteries named Avnet Distributor of the Year in Europe
- Magazin Elektronik named EBV, a division of Avnet, Distributor of the Year in Europe, based on a customer poll
- Harwin named Abacus, a division of Avnet, Distributor of the Year in Europe
- Named Jo Ann Jenkins, CEO of AARP, to the company's Board of Directors where she will serve on the audit and corporate governance committees
- Announced a multi-year partnership with Not Impossible Labs and debuted its first product, Music: Not Impossible, at the Life is Beautiful music festival. Music: Not Impossible uses sophisticated vibration technology to create a more inclusive and enhanced live music experience for the deaf, allowing the deaf and hearing communities to enjoy music together
Outlook for the Second Quarter of Fiscal 2019 Ending on December 29, 2018
| Guidance Range | Midpoint | |||
| Sales | $4.9B - $5.3B | $5.1B | ||
| Non-GAAP Diluted EPS (1) | $0.98 - $1.08 | $1.03 | ||
| Estimated Tax Rate | 19% - 23% | 21% |
|
(1) |
A reconciliation of non-GAAP guidance to GAAP guidance is presented in the “Non-GAAP Financial Information” section of this press release. |
