Avnet, Inc. Reports Third Quarter Fiscal 2004 Results; Accelerating Growth Propels Revenue and Profitability.Business Editors/High-Tech Writers PHOENIX--(BUSINESS WIRE)--April 29, 2004 Avnet Avnet, Inc. (NYSE: AVT) is a technology B2B distributor headquartered in Phoenix, Arizona. The company states on their website that:
See: New York Stock Exchange :AVT AVT avian arginine vasotocin. See vasotocin. ) today reported that revenues for its third quarter of fiscal 2004, ended April 3, 2004, were $2.64 billion, up 13% from the prior year third quarter, and up 3% sequentially se·quen·tial adj. 1. Forming or characterized by a sequence, as of units or musical notes. 2. Sequent. se·quen . The Company reported net income in the third quarter of fiscal 2004 of $26.7 million, or $0.22 per share, as compared with $1.5 million, or $0.01 per share, in last year's third quarter, with both periods including charges associated with the early extinguishment The destruction or cancellation of a right, a power, a contract, or an estate. Extinguishment is sometimes confused with merger, though there is a clear distinction between them. of debt. Excluding such charges, net income increased to $40.9 million, or $0.34 per share, in the third quarter of fiscal 2004, which represents an improvement of $0.26 per share over the year-ago net income of $0.08 per share. The earnings for the third quarter of fiscal 2004 were positively impacted by a reduction in the Company's effective tax rate to 27% for the fiscal year primarily as a result of the Company's mix of profits globally. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. more than doubled to $73.9 million in the third quarter of fiscal 2004 as compared with $36.2 million in the prior year third quarter. Operating income as a percent of sales increased 125 basis points from 1.55% in the third quarter of fiscal 2003 to 2.80% in the current quarter. The third quarter of fiscal 2004 represents the seventh consecutive year-over-year improvement in quarterly operating income dollars and operating income margin excluding restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). and other charges. Electronics Marketing (EM) sales of $1.59 billion grew 20% sequentially and 24% as compared with the third quarter of last year. The growth in EM was driven by all three regions with Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). , Middle
East and Africa (EMEA (Europe, Middle East, Africa) Refers to that region of the world. For example, one might see products packaged differently for the UK, EMEA and Asia Pacific markets. ) recording the highest sequential One after the other in some consecutive order such as by name or number. sales growth of
36% while the Americas A·mer·i·cas , theSee America. region grew 15% and Asia grew 4% driven primarily by normal seasonal factors. EM Asia continued to show strong year-over-year growth as revenue increased 44% as compared with the third quarter of fiscal 2003. Technology Solutions (TS) sales of $1.05 billion were down seasonally by 14% from the prior sequential quarter and flat as compared with the prior year. TS's year-over-year sales comparison takes into account its previously announced decision to exit certain low margin engagements which in last year's third quarter amounted to approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $90 million of revenue, or roughly $100 million in current U.S. dollars. Commenting on the Company's sales for the quarter, Chairman and Chief Executive Officer, Roy Roy, city (1990 pop. 24,603), Weber co., N Utah, near Great Salt Lake; settled by Mormons 1877, inc. 1937. Computer equipment is manufactured, and many residents work at nearby Hill Air Force Base. Vallee, stated: "The increase in EM sales across all geographies demonstrates that Avnet is enjoying a significant uplift from the technology industry recovery. In addition to continued robust year-over-year growth in Asia, we are encouraged by the double digit Noun 1. double digit - a two-digit integer; from 10 to 99 integer, whole number - any of the natural numbers (positive or negative) or zero; "an integer is a number that is not a fraction" growth on both a sequential and year-over-year basis in EMEA and the Americas. These growth rates Growth Rates The compounded annualized rate of growth of a company's revenues, earnings, dividends, or other figures. Notes: Remember, historically high growth rates don't always mean a high rate of growth looking into the future. , coupled with another quarter of strengthening orders, indicate that the markets we serve are continuing to improve." EM's operating income of $63.6 million grew 58% on a sequential basis and was 108% higher than the third quarter of fiscal 2003. EM's operating income margin of 4.0% represented significant improvement as compared with 3.0% in the prior sequential quarter and 2.4% in last year's third quarter. TS's operating income of $25.8 million was down $4.6 million, or 15%, from the prior sequential quarter but was 35% higher than the comparable quarter in fiscal 2003. Operating income margin of 2.5% was essentially flat with the prior sequential quarter and 65 basis points better than the third quarter of the prior year. Mr. Vallee noted: "The impact of our lower cost structure coupled with improving market conditions was evident in the strong results at EM. More specifically, the restructuring within EM EMEA has had a dramatic impact as its operating profitability, both in terms of dollars and margin, is now comparable with North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. . Additionally, TS grew operating income significantly over last year despite flat sales due primarily to the planned reduction in low margin business that has been underway for the last three quarters. These performances have driven enterprise operating profit margin Operating profit margin The ratio of operating profit to net sales. to its highest level in three years." During the third quarter of fiscal 2004, the Company issued $300 million of 2% Convertible Senior Debentures due 2034. The Company used the net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). of $292.5 million for the early redemption The liberation of an estate in real property from a mortgage. Redemption is the process by which land that has been mortgaged or pledged is bought back or reclaimed. It is accomplished through a payment of the debt owed or a fulfillment of the other conditions. of $273.4 million of the $360 million outstanding principal amount of its 7 7/8% Notes due February February: see month. 15, 2005. In connection with this transaction, Avnet recorded a charge in the third quarter of approximately $16.4 million pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta and $14.2 million after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. , or $0.12 per share, for the premium paid to holders of the 7 7/8% Notes and other related expenses. During the quarter, the Company also utilized cash on hand to repay the $100 million of 6 7/8% notes that matured on March 15, 2004. Ray Sadowski, Chief Financial Officer, stated: "We capitalized Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. on the attractive terms the convertible market offered to refinance Refinance 1. When a business or person revises their payment schedule for repaying debt. 2. Replacing an older loan with a new loan offering better terms. Notes: When a business refinances they typically extend the maturity date. some of our higher interest debt at lower rates. Through this transaction we were able to extend the term of our debt a minimum of five years while reducing our interest expense by approximately $20 million pre-tax per year thereby positively impacting earnings per share by approximately $0.12 per share annually beginning in the June June: see month. 2004 quarter." The Company reported that revenue, gross profit and operating income per employee grew significantly as compared with the prior year third quarter. Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. as a percentage of gross profit decreased to its lowest level in three years, coming in slightly below 80% in the third quarter of fiscal 2004. In addition, Electronics Marketing working capital (consisting of trade receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed plus inventory less accounts payable) velocity reached record levels with inventory turnover exceeding 5 turns in the current quarter. Mr. Sadowski further commented: "Our 'Driving Value' initiative continues to positively impact our business operations Business operations are those activities involved in the running of a business for the purpose of producing value for the stakeholders. Compare business processes. The outcome of business operations is the harvesting of value from assets as evidenced by the fact that our Net Operating Profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. After Tax (NOPAT NOPAT Net Operating Profit After Tax ) return on working capital ratio nearly doubled over the year-ago quarter. With the third straight quarter of sequential revenue growth we have been able to accelerate the increase in both our operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: and return on capital metrics metrics Managed care A popular term for standards by which the quality of a product, service, or outcome of a particular form of Pt management is evaluated. See TQM. ." Mr. Vallee provided guidance for the fourth quarter of Avnet's fiscal 2004 by stating: "We expect EM revenues to grow by 1-4% sequentially as the industry continues to recover and TS revenues to grow by 2-5% sequentially. These growth rates take into account the current value of the Euro to the U.S. dollar, which is roughly 5% below the average rate reflected in our results for the March 2004 quarter. Therefore, Avnet consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: sales should be in the range of $2.65 to $2.75 billion in the fourth quarter of fiscal 2004. We expect earnings to increase sequentially and be in the range of $0.35 - $0.40 per share." For the first three quarters of fiscal 2004, Avnet reported sales of $7.60 billion as compared with $6.86 billion in the first three quarters of fiscal 2003. The Company also reported net income of $24.2 million, or $0.20 per share, for the first three quarters of fiscal 2004 as compared with a net loss of $57.7 million, or $0.48 per share, in the comparable period of fiscal 2003, both periods including restructuring and other charges and debt extinguishment costs. Excluding such charges, net income for the first three quarters of fiscal 2004 was $77.0 million, or $0.64 per share as compared with net income of $16.2 million, or $0.13 per share, for the same period in the prior year. Forward Looking Statements This press release contains certain "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements are based on management's current expectations and are subject to uncertainty and changes in factual circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or . The forward-looking statements herein include statements addressing future financial and operating results of Avnet and may include words such as "anticipate", "expect", believe", and "should". Actual results may vary 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 Company's ability to retain and grow market share, the Company's ability to generate additional cash flow, any significant and unanticipated sales decline, changes in business conditions and the economy in general, changes in market demand and pricing pressures, allocations of products by suppliers, and other competitive and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. 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 the Company's reports on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. and Form 10-Q Form 10-Q See 10-Q. . Avnet is under no obligation to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise. Non-GAAP and Pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma Financial Information In addition to disclosing financial results that are determined in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ), the Company also discloses pro forma or non-GAAP results of operations that exclude certain items. Management believes that providing this additional information is useful to investors to better assess and understand operating performance, especially when comparing results with previous periods or forecasting performance for future periods. Management believes the pro forma measures also help indicate underlying trends in the business. Management also uses pro forma measures to establish operational goals and, in some cases, for measuring performance for compensation purposes. However, analysis of results and outlook on a pro forma or non-GAAP basis should be used as a complement to, and in conjunction conjunction, in astronomy conjunction, in astronomy, alignment of two celestial bodies as seen from the earth. Conjunction of the moon and the planets is often determined by reference to the sun. with, data presented in accordance with GAAP. Reconciliations of the Company's analysis of results to GAAP for the current quarter and year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. are attached. Teleconference Webcast and Upcoming Events Avnet will host a Webcast of its quarterly teleconference today at 5:00 p.m. Eastern Time. The live Webcast event, as well as other financial information including financial statement reconciliations of GAAP and non-GAAP financial measures, can be accessed through www.ir.avnet.com. Please log onto the site 15 minutes prior to the start of the event to register or download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. any necessary software. An archive (1) A file that contains one or more compressed files. Most archive formats are also capable of storing folders in order to reconstruct the file/folder relationship when decompressed. See archive formats. copy of the presentation will also be available after the webcast. Avnet will present at the following investor conferences in May: The JPMorgan Technology and Telecom Conference on May 4, 2004, and the Global Technology Distribution Council Investor Relations Investor relations The process by which the corporation communicates with its investors. Conference on May 18. For a listing of conference details and how to access each available webcast, along with additional upcoming events and other information, please visit Avnet's investor relations website at www.ir.avnet.com. Additional Information Phoenix, Arizona-based Avnet, Inc., a Fortune 500 company with fiscal year 2003 sales (year ended June 27, 2003) of $9.05 billion, is one of the world's largest distributors of semiconductors, interconnect (1) To attach one device to another. (2) A physical port (plug, socket) or wireless port (transmitter, receiver) used to attach one device to another. , passive and electromechanical The use of electricity to run moving parts. Disk drives, printers and motors are examples. Electromechanical systems must be designed for the eventual deterioration of moving components that wear over time. The first TVs were electromechanical systems (see video/TV history). components, enterprise network and computer equipment, and embedded Inserted into. See embedded system. sub-systems from leading manufacturers. Serving customers in 68 countries, Avnet markets, inventories and adds value to these products and provides world-class world-class adj. 1. Ranking among the foremost in the world; of an international standard of excellence; of the highest order: a world-class figure skater. 2. supply-chain management and engineering services. Please feel free to visit Avnet's Investor Relations Website at www.ir.avnet.com or contact us at investorrelations@avnet.com.
AVNET, INC.
(MILLIONS EXCEPT PER SHARE DATA)
INCLUDING DEBT EXTINGUISHMENT
COSTS (1) (2) THIRD QUARTERS ENDED
--------------------
APRIL 3, MARCH 28,
2004 (1) 2003 (2)
-------- --------
Sales $2,639.6 $2,340.5
Income before income taxes 36.6 2.5
Net income 26.7 1.5
Net income per share:
Basic $ 0.22 $ 0.01
Diluted $ 0.22 $ 0.01
----------------------------------------------------------------------
EXCLUDING DEBT
EXTINGUISHMENT COSTS THIRD QUARTERS ENDED
--------------------
APRIL 3, MARCH 28,
2004 2003
-------- --------
Sales $2,639.6 $2,340.5
Income before income taxes 53.0 16.0
Net income 40.9 9.6
Net income per share:
Basic $ 0.34 $ 0.08
Diluted $ 0.34 $ 0.08
(1) The results for the third quarter of fiscal 2004 shown above
include the impact of debt extinguishment costs associated with
the Company's cash tender offer completed during the third quarter
for $273.4 million of the 7 7/8% Notes due February 15, 2005.
These charges amounted to $16.4 million pre-tax, $14.2 million
after-tax and $0.12 per diluted share. See the Consolidated
Statements of Operations included herein for further disclosure of
the impacts of these charges.
(2) The results for the third quarter of fiscal 2003 shown above
include the impact of debt extinguishment costs associated with
the Company's cash tender offers and repurchases completed during
the third quarter for $159.0 million of the 6.45% Notes due August
15, 2003 and $220.1 million of the 8.20% Notes due October 17,
2003. These charges amounted to $13.5 million pre-tax, $8.2
million after-tax and $0.07 per diluted share. See the
Consolidated Statements of Operations included herein for further
disclosure of the impacts of these charges.
AVNET, INC.
(MILLIONS EXCEPT PER SHARE DATA)
INCLUDING RESTRUCTURING AND DEBT
EXTINGUISHMENT COSTS (1) (2)
NINE MONTHS ENDED
-----------------
APRIL 3, MARCH 28,
2004 (1) 2003 (2)
-------- --------
Sales $7,601.7 $6,861.0
Income (loss) before income taxes 33.1 (93.5)
Net Income (loss) 24.2 (57.7)
Net Income (loss) per share:
Basic $ 0.20 ($0.48)
Diluted $ 0.20 ($0.48)
----------------------------------------------------------------------
EXCLUDING RESTRUCTURING AND DEBT
EXTINGUISHMENT COSTS
NINE MONTHS ENDED
-------------------
APRIL 3, MARCH 28,
2004 2003
-------- --------
Sales $7,601.7 $6,861.0
Income before income taxes 105.0 26.8
Net income 77.0 16.2
Net income per share:
Basic $ 0.64 $ 0.13
Diluted $ 0.64 $ 0.13
(1) The results for the first nine months of fiscal 2004 shown above
include the impact of restructuring and other charges recorded in
both the first and second quarters. These charges were recorded in
connection with cost cutting initiatives and the previously
announced combination of the Computer Marketing and Applied
Computing operating groups into one operating group now called
Technology Solutions. These restructuring and other charges
amounted to $55.6 million pre-tax (all of which is included in
operating expenses), $38.6 million after-tax and $0.32 per diluted
share. The first nine months of fiscal 2004 shown above also
include the impact of debt extinguishment costs associated with
the Company's cash tender offer completed during the third quarter
for $273.4 million of the 7 7/8% Notes due February 15, 2005.
These charges amounted to $16.4 million pre-tax, $14.2 million
after-tax and $0.12 per diluted share.
The total impact of these charges on the results for the first
nine months of fiscal 2004 amounted to $72.0 million pre-tax,
$52.8 million after-tax and $0.44 per diluted share. See the
Consolidated Statements of Operations included herein for further
disclosure of the impacts of these charges.
(2) The results for the first nine months of fiscal 2003 shown above
include the impact of restructuring and other charges recorded in
connection with cost cutting initiatives including severance
costs, charges for consolidation of facilities and write-offs of
certain capitalized IT-related initiatives. The restructuring and
other charges amounted to $106.8 million pre-tax (all of which is
included in operating expenses), $65.7 million after-tax and
$0.54 per diluted share. The results for the first nine months of
fiscal 2003 shown above also include the impact of debt
extinguishment costs associated with the Company's cash tender
offers and repurchases completed during the third quarter for
$159.0 million of its 6.45% Notes due August 15, 2003 and $220.1
million of its 8.20% Notes due October 17, 2003. These charges
amounted to $13.5 million pre-tax, $8.2 million after-tax and
$0.07 per diluted share.
The total impact of these charges on the results for the first
nine months of fiscal 2003 amounted to $120.3 million pre-tax,
$73.9 million after-tax and $0.61 per diluted share. See the
Consolidated Statements of Operations included herein for further
disclosure of the impacts of these charges.
AVNET, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(THOUSANDS EXCEPT PER SHARE DATA)
THIRD QUARTER ENDED
----------------------------------
APRIL 3, 2004 (1)
---------------------------------
REPORTED DEBT EXT. ADJUSTED
RESULTS COSTS RESULTS
----------- --------- -----------
Sales $2,639,589 $ - $2,639,589
Cost of sales 2,281,006 - 2,281,006
---------- --------- ----------
Gross profit 358,583 - 358,583
Selling, general and administrative
expenses 284,731 - 284,731
---------- --------- ----------
Operating
income 73,852 - 73,852
Other income,
net 2,900 - 2,900
Interest
expense (23,817) - (23,817)
Debt extinguishment costs (1) (2) (16,370) 16,370 -
---------- -------- ----------
Income before
income taxes 36,565 16,370 52,935
Income tax
provision 9,915 2,155 12,070
----------- -------- -----------
Net income $ 26,650 $ 14,215 $ 40,865
========== ======== ==========
Net earnings
per share:
Basic $ 0.22 $ 0.12 $ 0.34
========== ======== ==========
Diluted $ 0.22 $ 0.12 $ 0.34
========== ======== ==========
Shares used to compute earnings
per share:
Basic 120,332 120,332 120,332
========== ======== ==========
Diluted 121,909 121,909 121,909
========== ======== ==========
THIRD QUARTER ENDED
----------------------------------
MARCH 28, 2003 (2)
---------------------------------
REPORTED DEBT EXT. ADJUSTED
RESULTS COSTS RESULTS
----------- --------- -----------
Sales $2,340,468 $ - $2,340,468
Cost of sales 2,033,356 - 2,033,356
---------- -------- ----------
Gross profit 307,112 - 307,112
Selling, general and administrative
expenses 270,863 - 270,863
---------- -------- ----------
Operating income 36,249 - 36,249
Other income, net 6,390 - 6,390
Interest expense (26,650) - (26,650)
Debt extinguishment
costs (1) (2) (13,487) 13,487 -
---------- -------- ----------
Income before income taxes 2,502 13,487 15,989
Income tax provision 1,010 5,335 6,345
------------ -------- -----------
Net income $ 1,492 $ 8,152 $ 9,644
========== ======== ==========
Net earnings per share:
Basic $ 0.01 $ 0.07 $ 0.08
========== ======== ==========
Diluted $ 0.01 $ 0.07 $ 0.08
========== ======== ==========
Shares used to compute earnings
per share:
Basic 119,486 119,486 119,486
========== ======== ==========
Diluted 119,571 119,571 119,571
========== ======== ==========
(1) The results for the third quarter of fiscal 2004 shown above
include the impact of debt extinguishment costs associated with
the Company's cash tender offer completed during the third quarter
for $273.4 million of the 7 7/8% Notes due February 15, 2005.
These charges amounted to $16.4 million pre-tax, $14.2 million
after-tax and $0.12 per diluted share.
(2) The results for the third quarter of fiscal 2003 shown above
include the impact of debt extinguishment costs associated with
the Company's cash tender offers and repurchases completed during
the third quarter for $159.0 million of its 6.45% Notes due August
15, 2003 and $220.1 million of its 8.20% Notes due October 17,
2003. These charges amounted to $13.5 million pre-tax, $8.2
million after-tax and $0.07 per diluted share.
AVNET, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(THOUSANDS EXCEPT PER SHARE DATA)
NINE MONTHS ENDED
----------------------------------
APRIL 3, 2004 (1) (2)
---------------------------------
RESTRUCT-
REPORTED URING AND ADJUSTED
RESULTS OTHER CHGS. RESULTS
---------- ----------- ----------
Sales $7,601,699 $ - $7,601,699
Cost of sales 6,604,860 - 6,604,860
---------- -------- ----------
Gross profit 996,839 - 996,839
Selling, general and administrative
expenses 824,752 - 824,752
Restructuring and other
charges (1) (3) 55,618 (55,618) -
---------- -------- ----------
Operating income (loss) 116,469 55,618 172,087
Other income, net 7,137 - 7,137
Interest expense (74,184) - (74,184)
Debt extinguishment
costs (1) (3) (16,370) 16,370 -
---------- -------- ----------
Income (loss) before income taxes 33,052 71,988 105,040
Income tax provision (benefit) 8,826 19,236 28,062
----------- -------- -----------
Net income (loss) $ 24,226 $ 52,752 $ 76,978
=========== ======== ===========
Net earnings (loss) per share:
Basic $ 0.20 $ 0.44 $ 0.64
========== ======== ==========
Diluted $ 0.20 $ 0.44 $ 0.64
========== ======== ==========
Shares used to compute
earnings (loss) per share:
Basic 119,946 119,946 119,946
========== ======== ==========
Diluted 120,921 120,921 120,921
========== ======== ==========
NINE MONTHS ENDED
----------------------------------
MARCH 28, 2003 (3)
----------------------------------
RESTRUCT-
REPORTED URING AND ADJUSTED
RESULTS OTHER CHGS. RESULTS
----------- ----------- ----------
Sales $6,861,023 $ - $6,861,023
Cost of sales 5,940,726 - 5,940,726
---------- --------- ----------
Gross profit 920,297 - 920,297
Selling, general and administrative
expenses 832,522 - 832,522
Restructuring and other
charges (1) (3) 106,765 (106,765) -
---------- --------- ----------
Operating income (loss) (18,990) 106,765 87,775
Other income, net 16,987 - 16,987
Interest expense (77,988) - (77,988)
Debt extinguishment
costs (1) (3) (13,487) 13,487 -
---------- --------- ----------
Income (loss) before income taxes (93,478) 120,252 26,774
Income tax provision (benefit) (35,825) 46,350 10,525
------------ --------- -----------
Net income (loss) ($57,653) $ 73,902 $ 16,249
========== ========= ==========
Net earnings (loss) per share:
Basic ($0.48) $ 0.61 $ 0.13
========== ========= ==========
Diluted ($0.48) $ 0.61 $ 0.13
========== ========= ==========
Shares used to compute earnings
(loss) per share:
Basic 119,441 119,441 119,441
========== ========= ==========
Diluted 119,441 119,441 119,441
========== ========= ==========
(1) The results for the first nine months of fiscal 2004 shown above
include the impact of restructuring and other charges recorded in
both the first and second quarters. These charges were recorded in
connection with cost cutting initiatives and the previously
announced combination of the Computer Marketing and Applied
Computing operating groups into one operating group now called
Technology Solutions. These charges include severance costs,
charges for consolidation of certain owned and leased facilities,
write-offs of certain capitalized IT-related initiatives, the
impairment in the second quarter of certain owned assets in the
Company's European operations and the write-off in the first
quarter of the remaining unamortized deferred loan costs
associated with the Company's multi-year credit facility
terminated in September. These restructuring and other charges in
the first half of fiscal 2004 amounted to $55.6 million pre-tax,
$38.6 million after-tax and $0.32 per diluted share.
The first nine months of fiscal 2004 shown above also include the
impact of debt extinguishment costs associated with the Company's
cash tender offer completed during the third quarter for $273.4
million of the 7 7/8% Notes due February 15, 2005. These charges
amounted to $16.4 million pre-tax, $14.2 million after-tax and
$0.12 per diluted share.
The total impact of these charges on the results for the first
nine months of fiscal 2004 amounted to $72.0 million pre-tax,
$52.8 million after-tax and $0.44 per diluted share.
(2) The results for the first nine months of fiscal 2003 shown above
include the impact of restructuring and other charges recorded in
connection with cost cutting initiatives including severance
costs, charges for consolidation of facilities and write-offs of
certain capitalized IT-related initiatives. The restructuring and
other charges amounted to $106.8 million pre-tax, $65.7 million
after-tax and $0.54 per diluted share. The results for the first
nine months of fiscal 2003 shown above also include the impact of
debt extinguishment costs associated with the Company's cash
tender offers and repurchases completed during the third quarter
for $159.0 million of its 6.45% Notes due August 15, 2003 and
$220.1 million of its 8.20% Notes due October 17, 2003. These
charges amounted to $13.5 million pre-tax, $8.2 million after-tax
and $0.07 per diluted share.
The total impact of these charges on the results for the first
nine months of fiscal 2003 amounted to $120.3 million pre-tax,
$73.9 million after tax and $0.61 per diluted share.
AVNET, INC.
CONSOLIDATED BALANCE SHEETS
(THOUSANDS)
APRIL 3, JUNE 27,
2004 2003
---------- ----------
Assets:
Current assets:
Cash and cash equivalents $ 351,400 $ 395,467
Receivables, net 1,731,436 1,471,806
Inventories 1,292,144 1,097,580
Other 82,139 161,237
---------- ----------
Total current assets 3,457,119 3,126,090
Property, plant and equipment, net 198,577 250,412
Goodwill 861,798 857,110
Other assets 271,183 265,939
---------- ----------
Total assets 4,788,677 4,499,551
---------- ----------
Less liabilities:
Current liabilities:
Borrowings due within one year 142,300 187,656
Accounts payable 1,101,434 802,039
Accrued expenses and other 310,589 316,355
---------- ----------
Total current liabilities 1,554,323 1,306,050
Long-term debt, less due within one year 1,214,845 1,278,399
Other long-term liabilities 69,420 82,580
---------- ----------
Total liabilities 2,838,588 2,667,029
---------- ----------
Shareholders' equity $1,950,089 $1,832,522
========== ==========
AVNET, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(THOUSANDS)
NINE MONTHS ENDED
---------------------
APRIL 3, MARCH 28,
2004 2003
--------- ---------
Cash flows from:
Operations:
Net Income (loss) $ 24,226 ($57,653)
Add non-cash and other reconciling items:
Depreciation and amortization 50,550 69,191
Deferred taxes (449) (35,501)
Non-cash restructuring and other charges 31,409 59,027
Other, net 33,805 33,444
--------- ---------
139,541 68,508
Receivables (233,771) 88,026
Inventories (160,695) 341,038
Accounts payable 276,799 (76,085)
Accrued expenses and other, net 42,463 131,750
--------- ---------
Net cash flows provided from operating
activities 64,337 553,237
--------- ---------
Financing:
Reduced drawings under accounts receivable
securitization program - (200,000)
Issuance of notes in public offering, net of
issuance costs 292,500 465,312
Repayment of notes (444,245) (379,197)
Proceeds from (repayment of) commercial
paper and bank debt, net 38,282 (275,246)
Proceeds from (repayment of) other debt, net (2) (1,274)
Other, net 13,299 (461)
--------- ---------
Net cash flows used for financing
activities (100,166) (390,866)
--------- ---------
Investing:
Purchases of property, plant, and equipment (19,378) (26,595)
Cash proceeds from sales of property, plant
and equipment 1,470 9,014
Acquisition of operations, net (1,448) (7,504)
--------- ---------
Net cash flows used for investing
activities (19,356) (25,085)
--------- ---------
Effect of exchange rates on cash and cash
equivalents 11,118 4,684
--------- ---------
Cash and cash equivalents:
increase (decrease) (44,067) 141,970
at beginning of year 395,467 159,234
--------- ---------
at end of period $ 351,400 $ 301,204
========= =========
AVNET, INC.
SEGMENT INFORMATION
(MILLIONS)
THIRD QUARTERS ENDED NINE MONTHS ENDED
--------------------- -------------------
APRIL 3, MARCH 28, APRIL 3, MARCH 28,
SALES 2004 2003 2004 2003
--------------------------- ----------- -------- --------- ---------
Electronics Marketing $ 1,594.2 $1,290.3 $4,284.3 $3,736.1
Technology Solutions 1,045.4 1,050.2 3,317.4 3,124.9
----------- --------- --------- ---------
Consolidated $ 2,639.6 $2,340.5 $7,601.7 $6,861.0
=========== ========= ========= =========
OPERATING INCOME (LOSS)
---------------------------
Electronics Marketing $ 63.6 $ 30.5 $ 137.2 $ 67.7
Technology Solutions 25.8 19.1 74.4 51.2
Corporate (15.5) (13.4) (39.5) (31.1)
--------- -------- -------- --------
Consolidated Before
Restructuring and
Other Charges 73.9 36.2 172.1 87.8
Restructuring and Other
Charges - - (55.6) (106.8)
--------- -------- -------- --------
Consolidated $ 73.9 $ 36.2 $ 116.5 ($19.0)
========= ======== ======== ========
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