Avnet Announces Sales and Earnings Below Expectations; Teleconference Scheduled for Thursday Morning.Business Editors & High-Tech Writers PHOENIX--(BUSINESS WIRE)--Oct. 3, 2001 Avnet Inc. (NYSE NYSE See: New York Stock Exchange :AVT AVT avian arginine vasotocin. See vasotocin. ) announced that sales for its first quarter of fiscal 2002 ended Sept. 28, 2001 will be below previously forecasted levels. The company reported that consolidated sales for the quarter just ended will be approximately $2.2 billion, down 31% and 13%, respectively, as compared with the first quarter of last year and the most recent fourth quarter of fiscal 2001. The company had previously anticipated that sales would be down in the 5% to 10% range as compared with the fourth quarter of fiscal 2001. Based upon actual results for July and August, and preliminary sales for the month of September, the company expects that diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the are likely to be a loss in the range of $0.17 to $0.20. These results take into account the positive impact related to the discontinuance Cessation; ending; giving up. The discontinuance of a lawsuit, also known as a dismissal or a non-suit, is the voluntary or involuntary termination of an action. DISCONTINUANCE, pleading. A chasm or interruption in the pleading. 2. of amortization of goodwill pursuant to recent changes in U.S. 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 amounting to approximately $0.08 per share. The company attributed the earnings shortfall primarily to a more significant than expected decline in revenues at its Electronics Marketing (EM) group, whose sales for the first quarter of fiscal 2002 are expected to be down 44% as compared with the first quarter of last year and down 20% as compared with the fourth quarter of fiscal 2001. EM continues to be affected by the well publicized pub·li·cize tr.v. pub·li·cized, pub·li·ciz·ing, pub·li·ciz·es To give publicity to. Adj. 1. publicized - made known; especially made widely known publicised severe decline in demand for electronic components. Sales at Avnet's other two operating groups, Applied Computing computing - computer (AC) and Computer Marketing (CM), have also been negatively impacted by business conditions, but to a much lesser extent. Sales at AC are approximately 7% above the fourth quarter of fiscal 2001, while CM's sales are about 8% below the fourth quarter of fiscal 2001. Avnet's sales from the combination of its two computer businesses, AC and CM, were down approximately 3% on a sequential quarterly basis, slightly below previous expectations. The company indicated that, due to cost reductions already underway, it has reduced its annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. 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. by approximately $175 million, as compared with expense levels at the end of the December 2000 quarter. And, in response to current revenue levels, additional actions were taken at the end of September 2001 that will reduce expenses by another $40 million on an annualized basis. This will bring total annual expense savings to approximately $215 million, as compared with expenses as of the end of the December 2000 quarter. These cost reductions exclude a significant decline in interest expense as a result of the company's reducing its debt by approximately $1 billion since the end of December 2000. This reduction in debt has been fueled primarily by a significant decrease in working capital in response to the slowdown in business. Roy Vallee, Avnet's chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , stated, "Our results for the quarter reflect the extremely difficult environment in which we are operating. We have taken, and continue to take, appropriate actions in response to these market conditions. "We have substantially reduced our cost structure and asset base in the last nine months as we respond to the most severe downturn in the history of the electronics industry and prepare for the future." Vallee further commented, "As we look at the December quarter, which is typically a seasonally strong quarter in our computer business, we expect to see an increase in sales at CM and AC. On the component side of our business, we continue to see positive signs that business may have bottomed, but the strength and timing of the recovery cannot yet be predicted. "We experienced a positive book-to-bill ratio Book-to-Bill Ratio The technology industry's demand-to-supply ratio for orders on a "firm's book" to number of orders filled. Notes: This ratio tells whether the company has more orders than it can deliver (if greater than 1), has the same amount of orders that it can during the September 2001 quarter at EM Asia, and we saw 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" bookings growth at EM Americas, offset by a significant decline in bookings at EM in Europe." Vallee added, "Even though the impact of the tragic events of Sept. 11 are not yet known, Avnet's overall revenue in the December 2001 quarter should grow sequentially for the first time in this calendar year. "And, as a result of the expected increase in sales and the significant cost reductions we have made, we anticipate sequential earnings growth in the December 2001 quarter. We will provide further guidance on our regular investors teleconference later this month when we release our actual results." Conference Call The company also announced that it would hold an investors teleconference to discuss business conditions. Details of the call are as follows: -- Date: Thursday, Oct. 4, 2001 -- Time: 11 a.m. ET / 10 a.m. CT / 9 a.m. MT / 8 a.m. PT -- Phone: 719/457-2649 Vallee will comment on the company's expected results for its first quarter of fiscal 2002 and on current business conditions. In addition, a live Internet broadcast will be available via Avnet's Web site at http://www.avnet.com/ on the Investor Relations Investor relations The process by which the corporation communicates with its investors. home page under Calendar of Events. The teleconference will also be archived to the Avnet Web site. Individuals who do not have an opportunity to participate in the teleconference can access the replay approximately 2-3 hours after the call ends. The replay will be available until close of business on Friday, Oct. 12, 2001. -- Replay No.: 719/457-0820 -- Confirmation No.: 450806 Additional Information Phoenix-based Avnet, a Fortune 500 company, is one of the world's largest distributors of semiconductors, interconnect, 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 63 countries, Avnet markets, inventories and adds value to these products and provides world-class supply-chain management and engineering services. Avnet's Web site is located at www.avnet.com. Forward-Looking Statement 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. This news release contains certain "forward-looking statements" 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 the forward-looking statements. The forward-looking statements herein include statements addressing future financial and operating results of Avnet. The following factors, among others, could cause actual results to differ materially from those described in the forward-looking statements: changes in business conditions and the economy in general, changes in market demand and pricing pressures, allocations of products by suppliers, failure to obtain and retain expected synergies from newly acquired businesses, 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 the Annual Report 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. for fiscal 2001. Avnet is under no obligation to (and expressly disclaims any such obligation to) update or alter any forward-looking statements, whether as a result of new information, future events or otherwise. |
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