Avnet Reports Fourth Quarter and Fiscal 2020 Financial Results

Today’s Conference Call and Webcast Details

Avnet will host a quarterly webcast and teleconference today at 1:30 p.m. PDT and 4:30 p.m. EDT to discuss its financial results and provide a corporate update. The webcast can be accessed via Avnet’s Investor Relations web page at: www.ir.avnet.com, or from the following link Avnet Earnings Call Webcast and Slides.

Those who would still like to participate in the live call can dial 877-407-8112 or 201-689-8840. A replay of the conference call will be available for 30 days, through September 5 at 5:00 p.m. EDT, and can be accessed by dialing: 877-660-6853 or 201-612-7415 and using Conference ID: 13705277. The webcast will be available for 90 days.

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: the scope and duration of the COVID-19 outbreak and its impact on global economic systems, financial markets and Avnet’s operations, employees, customers and supply chain; 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 IT systems; supplier losses and changes to supplier programs; an industry down-cycle in electronic components including semiconductors; declines in sales; changes in business conditions and the economy in general; disruptions to the business resulting from pandemics, epidemics or other health related crisis (such as COVID-19 outbreak); 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 electronic components distributor with extensive design, product, marketing and supply chain expertise for customers and suppliers at every stage of the product lifecycle. 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)

AVNET, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fourth Quarters Ended

 

Years Ended

 

 

 

June 27,

 

June 29,

 

June 27,

 

June 29,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

 

 

(Thousands, except per share data)

 

Sales

 

$

4,159,700

 

 

$

4,680,909

 

 

$

17,634,333

 

 

$

19,518,592

 

 

Cost of sales

 

 

3,684,629

 

 

 

4,085,784

 

 

 

15,570,877

 

 

 

17,032,490

 

 

Gross profit

 

 

475,071

 

 

 

595,125

 

 

 

2,063,456

 

 

 

2,486,102

 

 

Selling, general and administrative expenses

 

 

451,099

 

 

 

459,611

 

 

 

1,842,122

 

 

 

1,874,651

 

 

Restructuring, integration, impairment and other expenses

 

 

22,052

 

 

 

165,554

 

 

 

225,962

 

 

 

245,540

 

 

Operating income (loss)

 

 

1,920

 

 

 

(30,040

)

 

 

(4,628

)

 

 

365,911

 

 

Other income (expense), net

 

 

7,425

 

 

 

1,807

 

 

 

(737

)

 

 

11,231

 

 

Interest and other financing expenses, net

 

 

(25,489

)

 

 

(34,810

)

 

 

(122,742

)

 

 

(134,874

)

 

Income (loss) from continuing operations before taxes

 

 

(16,144

)

 

 

(63,043

)

 

 

(128,107

)

 

 

242,268

 

 

Income tax (benefit) expense

 

 

(68,304

)

 

 

(27,915

)

 

 

(98,574

)

 

 

62,157

 

 

Income (loss) from continuing operations, net of tax

 

 

52,160

 

 

 

(35,128

)

 

 

(29,533

)

 

 

180,111

 

 

Income (loss) from discontinued operations, net of tax

 

 

 

 

 

3,292

 

 

 

(1,548

)

 

 

(3,774

)

 

Net income (loss)

 

$

52,160

 

 

$

(31,836

)

 

$

(31,081

)

 

$

176,337

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) per share - basic:

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

0.53

 

 

$

(0.33

)

 

$

(0.29

)

 

$

1.64

 

 

Discontinued operations

 

 

 

 

 

0.03

 

 

 

(0.02

)

 

 

(0.03

)

 

Net income (loss) per share basic

 

$

0.53

 

 

$

(0.30

)

 

$

(0.31

)

 

$

1.61

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) per share - diluted:

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

0.53

 

 

$

(0.33

)

 

$

(0.29

)

 

$

1.63

 

 

Discontinued operations

 

 

 

 

 

0.03

 

 

 

(0.02

)

 

 

(0.04

)

 

Net income (loss) per share diluted

 

$

0.53

 

 

$

(0.30

)

 

$

(0.31

)

 

$

1.59

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used to compute earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

98,855

 

 

 

105,615

 

 

 

100,474

 

 

 

109,820

 

 

Diluted

 

 

99,025

 

 

 

105,615

 

 

 

100,474

 

 

 

110,798

 

 

Cash dividends paid per common share

 

$

0.21

 

 

$

0.20

 

 

$

0.84

 

 

$

0.80

 

 

AVNET, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

 

 

 

 

 

 

 

 

 

 

June 27,

 

June 29,

 

 

 

2020

 

2019

 

 

 

(Thousands)

 

ASSETS

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

477,038

 

$

546,105

 

Receivables, net

 

 

2,928,386

 

 

3,168,369

 

Inventories

 

 

2,731,988

 

 

3,008,424

 

Prepaid and other current assets

 

 

191,394

 

 

153,438

 

Total current assets

 

 

6,328,806

 

 

6,876,336

 

Property, plant and equipment, net

 

 

404,607

 

 

452,171

 

Goodwill

 

 

773,734

 

 

876,728

 

Intangible assets, net

 

 

65,437

 

 

143,520

 

Operating lease assets

 

 

275,917

 

 

 

Other assets

 

 

256,696

 

 

215,801

 

Total assets

 

$

8,105,197

 

$

8,564,556

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Short-term debt

 

$

51

 

$

300,538

 

Accounts payable

 

 

1,754,078

 

 

1,864,342

 

Accrued expenses and other

 

 

472,924

 

 

413,696

 

Short-term operating lease liabilities

 

 

53,313

 

 

 

Total current liabilities

 

 

2,280,366

 

 

2,578,576

 

Long-term debt

 

 

1,424,791

 

 

1,419,922

 

Long-term operating lease liabilities

 

 

253,719

 

 

 

Other liabilities

 

 

419,923

 

 

425,585

 

Total liabilities

 

 

4,378,799

 

 

4,424,083

 

Shareholders’ equity

 

 

3,726,398

 

 

4,140,473

 

Total liabilities and shareholders’ equity

 

$

8,105,197

 

$

8,564,556

 

 

 

 

 

 

 

 

 

 

AVNET, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

 

 

Years Ended

 

 

 

June 27, 2020

 

June 29, 2019

 

 

 

(Thousands)

 

Cash flows from operating activities:

 

 

 

 

 

 

 

Net (loss) income

 

$

(31,081

)

 

$

176,337

 

 

Less: Loss from discontinued operations, net of tax

 

 

(1,548

)

 

 

(3,774

)

 

Income (loss) from continuing operations

 

 

(29,533

)

 

 

180,111

 

 

 

 

 

 

 

 

 

 

Non-cash and other reconciling items:

 

 

 

 

 

 

 

Depreciation

 

 

101,100

 

 

 

97,160

 

 

Amortization

 

 

81,139

 

 

 

83,682

 

 

Amortization of operating lease assets

 

 

60,656

 

 

 

 

 

Deferred income taxes

 

 

(34,264

)

 

 

33,801

 

 

Stock-based compensation

 

 

26,832

 

 

 

30,098

 

 

Goodwill, long-lived, intangible asset and other impairments

 

 

144,092

 

 

 

192,083

 

 

Other, net

 

 

45,049

 

 

 

(21,265

)

 

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

 

 

 

 

 

 

 

Receivables

 

 

221,486

 

 

 

464,981

 

 

Inventories

 

 

266,791

 

 

 

81,929

 

 

Accounts payable

 

 

(106,990

)

 

 

(377,855

)

 

Accrued expenses and other, net

 

 

(46,176

)

 

 

(173,671

)

 

Net cash flows provided by operating activities - continuing operations

 

 

730,182

 

 

 

591,054

 

 

Net cash flows used for operating activities - discontinued operations

 

 

 

 

 

(56,284

)

 

Net cash flows provided by operating activities

 

 

730,182

 

 

 

534,770

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

Borrowings (repayments) under accounts receivable securitization, net

 

 

(227,300

)

 

 

122,300

 

 

Borrowings (repayments) under bank credit facilities and other debt, net

 

 

(2,123

)

 

 

(61,738

)

 

Borrowings (repayments) under senior unsecured credit facility, net

 

 

223,058

 

 

 

505

 

 

Repayments of public notes

 

 

(302,038

)

 

 

 

 

Repurchases of common stock

 

 

(237,842

)

 

 

(568,712

)

 

Dividends paid on common stock

 

 

(83,975

)

 

 

(87,158

)

 

Other, net

 

 

(14,330

)

 

 

12,127

 

 

Net cash flows used for financing activities - continuing operations

 

 

(644,550

)

 

 

(582,676

)

 

Net cash flows used for financing activities

 

 

(644,550

)

 

 

(582,676

)

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

Purchases of property, plant and equipment

 

 

(73,516

)

 

 

(122,690

)

 

Acquisitions of businesses, net of cash acquired

 

 

(51,509

)

 

 

(56,417

)

 

Other, net

 

 

(9,992

)

 

 

30,422

 

 

Net cash flows used for investing activities - continuing operations

 

 

(135,017

)

 

 

(148,685

)

 

Net cash flows provided by investing activities - discontinued operations

 

 

 

 

 

123,473

 

 

Net cash flows used for investing activities

 

 

(135,017

)

 

 

(25,212

)

 

Effect of currency exchange rate changes on cash and cash equivalents

 

 

(19,682

)

 

 

(1,902

)

 

Cash and cash equivalents:

 

 

 

 

 

 

 

— decrease

 

 

(69,067

)

 

 

(75,020

)

 

— at beginning of period

 

 

546,105

 

 

 

621,125

 

 

— at end of period

 

$

477,038

 

 

$

546,105

 

 

 

 

 

 

 

 

 

 

Non-GAAP Financial Information

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