Today’s Conference Call and Webcast Details:
Avnet will host a quarterly teleconference and webcast today at 1:30 p.m. PDT. To participate in the live call, dial 877-407-8112 or 201-689-8840. The slides can be accessed by following this link: AVNET EARNINGS CALL WEBCAST AND SLIDES or via Avnet’s Investor Relations web page at https://ir.avnet.com/. A replay of the conference call will be available for 30 days, through November 25 at 2:00 p.m. PT, and can be accessed by dialing: 877-660-6853 or 201-612-7415 and using Conference ID: 13683601.
Forward-Looking Statements
This document contains certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements are based on management’s current expectations and are subject to uncertainty and changes in facts and circumstances. The forward-looking statements herein include statements addressing future financial and operating results of Avnet and may include words such as “will,” “anticipate,” “intend,” “estimate,” “forecast,” “expect,” “feel,” “believe,” “should,” and other words and terms of similar meaning in connection with any discussions of future operating or financial performance, business prospects or market conditions. Actual results may differ materially from the expectations contained in the forward-looking statements.
The following factors, among others, could cause actual results to differ materially from those described in the forward-looking statements: Avnet’s ability to retain and grow market share and to generate additional cash flow, risks associated with any acquisition activities and the successful integration of acquired companies, implementing and maintaining ERP systems, supplier losses and changes to supplier programs, an industry down-cycle in semiconductors, declines in sales, changes in business conditions and the economy in general, changes in market demand and pricing pressures, any material changes in the allocation of product or price discounts by suppliers, and other competitive and/or regulatory factors affecting the businesses of Avnet generally.
More detailed information about these and other factors is set forth in Avnet’s filings with the Securities and Exchange Commission, including Avnet’s reports on Form 10-K, Form 10-Q and Form 8-K. Except as required by law, Avnet is under no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.
About Avnet
Avnet is a global technology solutions provider with an extensive ecosystem delivering design, product, marketing and supply chain expertise for customers at every stage of the product lifecycle. We transform ideas into intelligent solutions, reducing the time, cost and complexities of bringing products to market. For nearly a century, Avnet has helped its customers and suppliers around the world realize the transformative possibilities of technology. Learn more about Avnet at www.avnet.com. (AVT_IR)
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AVNET, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) |
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| First Quarters Ended | ||||||||
| September 29, | September 30, | |||||||
| 2018 | 2017 | |||||||
| (Thousands, except per share data) | ||||||||
| Sales | $ | 5,089,879 | $ | 4,660,943 | ||||
| Cost of sales | 4,453,129 | 4,048,388 | ||||||
| Gross profit | 636,750 | 612,555 | ||||||
| Selling, general and administrative expenses | 475,146 | 501,593 | ||||||
| Restructuring, integration and other expenses | 14,788 | 46,394 | ||||||
| Operating income | 146,816 | 64,568 | ||||||
| Other income (expense), net | (1,892 | ) | 18,921 | |||||
| Interest and other financing expenses, net | (30,093 | ) | (22,015 | ) | ||||
| Income from continuing operations before taxes | 114,831 | 61,474 | ||||||
| Income tax expense | 31,302 | 3,292 | ||||||
| Income from continuing operations, net of tax | 83,529 | 58,182 | ||||||
| Income from discontinued operations, net of tax | 195 | 121 | ||||||
| Net income | $ | 83,724 | $ | 58,303 | ||||
| Earnings per share - basic: | ||||||||
| Continuing operations | $ | 0.73 | $ | 0.48 | ||||
| Discontinued operations | 0.00 | 0.00 | ||||||
| Net income per share basic | $ | 0.73 | $ | 0.48 | ||||
| Earnings per share - diluted: | ||||||||
| Continuing operations | $ | 0.72 | $ | 0.47 | ||||
| Discontinued operations | 0.00 | 0.00 | ||||||
| Net income per share diluted | $ | 0.72 | $ | 0.47 | ||||
| Shares used to compute earnings per share: | ||||||||
| Basic | 115,260 | 122,685 | ||||||
| Diluted | 116,471 | 123,984 | ||||||
| Cash dividends paid per common share | $ | 0.20 | $ | 0.18 | ||||
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AVNET, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) |
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| September 29, | June 30, | |||||
| 2018 | 2018 | |||||
| (Thousands) | ||||||
| ASSETS | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | $ | 365,852 | $ | 621,125 | ||
| Receivables, net | 3,682,512 | 3,641,139 | ||||
| Inventories | 3,395,194 | 3,141,822 | ||||
| Prepaid and other current assets | 114,432 | 206,513 | ||||
| Total current assets | 7,557,990 | 7,610,599 | ||||
| Property, plant and equipment, net | 525,873 | 522,909 | ||||
| Goodwill | 982,306 | 980,872 | ||||
| Intangible assets, net | 199,379 | 219,913 | ||||
| Other assets | 188,226 | 262,552 | ||||
| Total assets | $ | 9,453,774 | $ | 9,596,845 | ||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||
| Current liabilities: | ||||||
| Short-term debt | $ | 10,626 | $ | 165,380 | ||
| Accounts payable | 2,352,771 | 2,269,478 | ||||
| Accrued expenses and other | 501,435 | 534,603 | ||||
| Total current liabilities | 2,864,832 | 2,969,461 | ||||
| Long-term debt | 1,554,722 | 1,489,219 | ||||
| Other liabilities | 413,147 | 453,084 | ||||
| Total liabilities | 4,832,701 | 4,911,764 | ||||
| Shareholders’ equity | 4,621,073 | 4,685,081 | ||||
| Total liabilities and shareholders’ equity | $ | 9,453,774 | $ | 9,596,845 | ||
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AVNET, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) |
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| Three Months Ended | ||||||||
| September 29, 2018 | September 30, 2017 | |||||||
| (Thousands) | ||||||||
| Cash flows from operating activities: | ||||||||
| Net income | $ | 83,724 | $ | 58,303 | ||||
| Less: Income from discontinued operations, net of tax | 195 | 121 | ||||||
| Income from continuing operations | 83,529 | 58,182 | ||||||
| Non-cash and other reconciling items: | ||||||||
| Depreciation | 25,389 | 38,263 | ||||||
| Amortization | 20,810 | 25,506 | ||||||
| Deferred income taxes | 36,830 | (23,436 | ) | |||||
| Stock-based compensation | 9,044 | 8,609 | ||||||
| Other, net | 14,994 | 4,902 | ||||||
| Changes in (net of effects from businesses acquired and divested): | ||||||||
| Receivables | (19,292 | ) | (32,409 | ) | ||||
| Inventories | (269,649 | ) | (266,998 | ) | ||||
| Accounts payable | 95,119 | 37,252 | ||||||
| Accrued expenses and other, net | (81,753 | ) | 22,140 | |||||
| Net cash flows used for operating activities - continuing operations | (84,979 | ) | (127,989 | ) | ||||
| Net cash flows used for operating activities - discontinued operations | — | — | ||||||
| Net cash flows used for operating activities | (84,979 | ) | (127,989 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Borrowings (repayments) under accounts receivable securitization, net | (40,000 | ) | 28,000 | |||||
| Repayments under senior unsecured credit facility, net | (50,330 | ) | (92,471 | ) | ||||
| Repayments under bank credit facilities and other debt, net | (1,217 | ) | (24,888 | ) | ||||
| Repurchases of common stock | (149,094 | ) | (68,113 | ) | ||||
| Dividends paid on common stock | (22,932 | ) | (22,012 | ) | ||||
| Other, net | 17,328 | (579 | ) | |||||
| Net cash flows used for financing activities - continuing operations | (246,245 | ) | (180,063 | ) | ||||
| Net cash flows used for financing activities - discontinued operations | — | — | ||||||
| Net cash flows used for financing activities | (246,245 | ) | (180,063 | ) | ||||
| Cash flows from investing activities: | ||||||||
| Purchases of property, plant and equipment | (41,007 | ) | (26,659 | ) | ||||
| Acquisitions of businesses, net of cash acquired | — | (14,661 | ) | |||||
| Other, net | 65 | 1,211 | ||||||
| Net cash flows used for investing activities - continuing operations | (40,942 | ) | (40,109 | ) | ||||
| Net cash flows provided by investing activities - discontinued operations | 120,000 | 45,391 | ||||||
| Net cash flows provided by investing activities | 79,058 | 5,282 | ||||||
| Effect of currency exchange rate changes on cash and cash equivalents | (3,107 | ) | 6,065 | |||||
| Cash and cash equivalents: | ||||||||
| — decrease | (255,273 | ) | (296,705 | ) | ||||
| — at beginning of period | 621,125 | 836,384 | ||||||
| — at end of period | $ | 365,852 | $ | 539,679 | ||||
Non-GAAP Financial Information
