Avnet Inc. Reports Fourth Quarter and Fiscal Year 2005 Results.PHOENIX -- Annual Revenue Growth of 8% Net Income Up Sharply 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 revenues of $11.07 billion for fiscal 2005, ended July July: see month. 2, 2005, up 8.0% over fiscal 2004 revenues of $10.24 billion. Net income for fiscal 2005 was $168.2 million, or $1.39 per share on a diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. basis, as compared with net income of $72.9 million, or $0.60 per share on a diluted basis in fiscal 2004, which included certain charges that are further described in the accompanying ac·com·pa·ny v. ac·com·pa·nied, ac·com·pa·ny·ing, ac·com·pa·nies v.tr. 1. To be or go with as a companion. 2. financial statements. Fiscal 2005 net income and 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 of $168.2 million and $1.39, respectively, were up 34% as compared with fiscal 2004 net income of $125.6 million, or $1.04 per share, excluding such charges in fiscal 2004. Fiscal 2005 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. of $321.3 million grew 58.9% as compared with fiscal 2004 operating income of $202.2 million, including certain charges in fiscal 2004. Fiscal 2005 operating income grew 24.6% as compared with fiscal 2004 operating income of $257.9 million, excluding these charges. Operating income as a percent of sales was 2.90% in fiscal 2005, an increase of 38 basis points over fiscal year 2004 operating income margin of 2.52%, excluding the charges noted above in fiscal 2004. This represents the third consecutive year of growth in both operating income and operating income margin. Revenue for fourth quarter fiscal 2005 was $2.83 billion representing an increase of 6.9% over fourth quarter fiscal 2004 and an increase of 2.4% sequentially se·quen·tial adj. 1. Forming or characterized by a sequence, as of units or musical notes. 2. Sequent. se·quen over third quarter fiscal 2005. Excluding the impact of foreign currency translation, fourth quarter fiscal 2005 sales were up 5.5% year over year and up 3.8% sequentially. Net income for fourth quarter fiscal 2005 was $47.3 million, or $0.39 per share on a diluted basis, as compared with prior year net income of $48.7 million, or $0.40 per share on a diluted basis. Fiscal 2005 fourth quarter diluted earnings per share were positively impacted by approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $0.02 due to a lower income tax provision for the year as a result of the final mix of profits for the fiscal year by country with varying statutory tax rates. Operating income for fourth quarter fiscal 2005 was $85.7 million, essentially flat as compared with operating income of $85.8 million in the year ago quarter. Operating income as a percent of sales was 3.03% in the fourth quarter of fiscal 2005, which was down 21 basis points from last year's fourth quarter. Even though TS operating income for the fourth quarter grew significantly year over year, it was not enough to offset the decline experienced by EM, which was due primarily to the lingering lin·ger v. lin·gered, lin·ger·ing, lin·gers v.intr. 1. To be slow in leaving, especially out of reluctance; tarry. See Synonyms at stay1. 2. impact of the mid-cycle inventory correction CORRECTION,punishment. Chastisement by one having authority of a person who has committed some offence, for the purpose of bringing him to legal subjection. 2. It is chiefly exercised in a parental manner, by parents, or those who are placed in loco parentis. and higher corporate expenses due to Sarbanes-Oxley compliance efforts. 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, chairman and chief executive officer, commented, "We are pleased with how we performed during fiscal year 2005 given that the start of this fiscal year coincided with the beginning of an electronics components mid-cycle inventory correction. Our focus on value-based management allowed Electronics Marketing to react quickly to the market conditions and weather this short cycle with improved financial performance. Electronics Marketing's solid performance coupled with another record year for Technology Solutions allowed us to achieve the best performance in three years in revenue, operating income and return on capital, and we closed out the quarter with record working capital velocity 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. ." The company generated $51.1 million of free cash flow (as defined later in this release) during the fourth quarter of fiscal 2005, bringing the total free cash flow for fiscal year 2005 to $425.7 million. As a result, the company ended the quarter with $638 million of cash and cash equivalents and net debt (total debt less cash and cash equivalents) of $607 million, the lowest net debt has been since the fourth quarter of fiscal 1999. Ray Sadowski, chief financial officer, stated: "I am very proud of the team's ability to generate significant free cash flow in a year of 8% revenue growth. With the significant amount of cash on hand we were able to pay off most of the debt Memec had outstanding at the closing of the Memec acquisition on July 5, 2005, and immediately begin to realize interest expense synergies of at least $10 million annually." Operating Groups Electronics Marketing (EM) sales of $1.62 billion in the fourth quarter fiscal 2005 were up 1.5% sequentially and up 0.8% on a year over year basis. Excluding the impact of foreign currency translation, EM sales for fourth quarter fiscal 2005 were up 3.1% sequentially and were down 0.8% on a year over year basis. On a sequential One after the other in some consecutive order such as by name or number. quarterly basis, EM sales in the Americas A·mer·i·cas , the See America. and Asia increased 6.2% and 3.0%, respectively. EM 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. sales decreased 4.0% in delivered U.S. dollars on a sequential basis, but were flat in constant dollars. EM operating income of $65.3 million for fourth quarter fiscal 2005 was 6.1% higher than the prior sequential quarter operating income of $61.5 million. Technology Solutions (TS) sales of $1.20 billion in the fourth quarter fiscal 2005 were up 16.4% year over year and 3.7% sequentially. Excluding the impact of foreign currency translation, TS sales for fourth quarter fiscal 2005 were up 15.3% on a year over year basis and 4.7% sequentially. On a year over year basis, TS fourth quarter sales in the Americas, EMEA and Asia increased 19.5%, 2.8% and 56.4%, respectively. TS operating income was $37.4 million, a 53.2% increase as compared with fourth quarter fiscal 2004 operating income of $24.4 million, and its operating income margin of 3.11% increased by 75 basis points over the prior year fourth quarter. Vallee added, "At Technology Solutions, we saw another strong quarterly performance as operating income grew 53% on sales growth of 16% year over year. The focus that TS has had on developing 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. customer automation tools has set them apart from the competition. For the quarter, EM achieved record levels of inventory turns and working capital velocity. As we head into fiscal year 2006, and the integration of the Memec acquisition, we are poised to leverage the scale and scope of the combined entities to lower our cost structure and increase our profit and return metrics, thereby accelerating the achievement of our long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. financial goals." Memec Integration The integration of Memec is proceeding on track with all activities expected to be completed by the end of fiscal year 2006. Synergy The enhanced result of two or more people, groups or organizations working together. In other words, one and one equals three! It comes from the Greek "synergia," which means joint work and cooperative action. benefits are expected to be at least $130 million including $10 million related to reduced net interest expense on debt retired upon closing the transaction. The Americas team has completed the integration of its inventory, IT systems, facilities and workforce. In the EMEA region, the integration of Memec's inventory is also complete. During the second quarter, both the EMEA and Asia regions should complete the integration of the IT systems. The vast majority of the workforce and facility consolidation in EMEA and Asia will be complete by the end of the March 2006 quarter with the remainder completed by the June June: see month. 2006 quarter. Vallee commented, "One of our primary goals for the integration was to act as quickly as possible to minimize In a graphical environment, to hide an application that is currently displayed on screen. For example, in Windows and Mac, the application's window is removed from the screen and represented by an icon on the Windows Taskbar. In the Mac, the icon is placed in the Dock. See Win Minimize windows. the impact to our customers, suppliers and employees. Our teams have demonstrated their integration expertise as we have essentially completed the integration in the Americas within just 30 days following the close of the acquisition." The ultimate cash outlays Outlays Payments on obligations in the form of cash, checks, the issuance of bonds or notes, or the maturing of interest coupons. associated with the integration of Memec, which are expected to include severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when , facility closures and other integration costs, are estimated to be less than $100 million. The majority of these costs are expected to relate to Memec activities, which will flow through goodwill and not impact the statement of income. Outlook Looking forward to Avnet's first quarter fiscal 2006, management expects revenues for Electronics Marketing to be in the range of $2.11 billion to $2.16 billion and we anticipate sales for Technology Solutions to be in the range of $1.09 billion to $1.14 billion. Therefore, Avnet's 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 $3.20 billion to $3.30 billion for first quarter fiscal 2006. This revenue guidance takes into account the impact of the Memec acquisition which was completed on July 5, 2005. EM's sales guidance is negatively impacted by approximately $40 million due to a couple of factors related to the Memec acquisition. First, due to the timing of closing of the acquisition, one day of Memec shipments in July were included in Memec's pre-close results of operations and are therefore excluded from Avnet's first quarter fiscal 2006 results. More importantly, due to the merging of certain warehouse operations immediately following the close, it was necessary to expedite ex·pe·dite tr.v. ex·pe·dit·ed, ex·pe·dit·ing, ex·pe·dites 1. To speed up the progress of; accelerate. 2. certain shipments originally scheduled for early July into June in order to ensure meeting commitments to customers. As a result of the anticipated sales, management expects earnings to be in the range of $0.30 to $0.35 per share. The earnings per share guidance does not include the charges associated with the Memec integration, the expensing of stock-based compensation or the amortization of intangibles Property that is a "right" such as a patent, Copyright, or trademark, or one that is lacking physical existence, such as good will. associated with the acquisition of Memec. In addition, the earnings per share assumes an effective tax rate of 33% based upon the projected mix of profits by country of the combined businesses. 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. This press 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 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 continue to successfully execute To run a program, which causes the computer to carry out its instructions. See executable code, instruction and EXE file. execute - execution the integration plans, 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 any forward-looking statements, whether as a result of new information, future events or otherwise. Non-GAAP 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 certain non-GAAP financial information including adjusted operating income, adjusted net income and adjusted diluted earnings per share. The non-GAAP financial information is used to reflect the company's results of operations excluding certain items that have arisen from 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 debt 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. activities in the periods presented. Management believes that operating income adjusted for restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. is useful to investors to assess and understand operating performance, especially when comparing results with previous periods or forecasting performance for future periods, primarily because management views the excluded items to be outside of Avnet's normal operating results. Management analyzes operating income without the impact of restructuring costs as an indicator Indicator Anything used to predict future financial or economic trends. Notes: In the context of technical analysis, an indicator is a mathematical calculation based on a securities price and/or volume. The result is used to predict future prices. of ongoing operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: performance and underlying trends in the business. Management also uses this non-GAAP measure to establish operational goals and, in some cases, for measuring performance for compensation purposes. Management similarly believes net income and diluted earnings per share adjusted for the 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. impact of restructuring and other costs is useful to investors because it provides a measure of the company's net profitability on a more comparable basis to historical periods and provides a more meaningful basis for forecasting future performance. Additionally, because of management's focus on generating shareholder value, of which net profitability is a primary driver, management believes net income and diluted EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. excluding the after-tax impact of restructuring charges provides an important measure of the company's net results of operations for the investing public. However, analysis of results and outlook on a 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. For the periods presented in this release, restructuring and other charges only impacted the prior fiscal year periods. Reconciliations of the company's reported results to the results adjusted for these items are included in the following table (in thousands, except for per share data) along with comparable data for the current fiscal year periods:
Fourth Quarters Ended Fiscal Years Ended
July 2, July 3, July 2, July 3,
2005 2004 2005 2004
---------- --------- --------- ---------
Operating Income
----------------
As reported $85,736 $85,778 $321,316 $202,247
Restructuring charges - - - 55,618
---------- --------- --------- ---------
As adjusted $85,736 $85,778 $321,316 $257,865
========== ========= ========= =========
Net Income
----------
As reported $47,250 $48,671 $168,239 $72,897
Restructuring charge
and debt extinguishment
costs, net of tax - - - 52,752
---------- --------- --------- ---------
As adjusted $47,250 $48,671 $168,239 $125,649
========== ========= ========= =========
Diluted EPS
-----------
As reported $0.39 $0.40 $1.39 $0.60
Restructuring charges
and debt extinguishment
costs, net of tax - - - 0.44
---------- --------- --------- ---------
As adjusted $0.39 $0.40 $1.39 $1.04
========== ========= ========= =========
The following table summarizes the company's cash flow activity for the fourth quarter and fiscal year ended July 2, 2005, including the company's computation Computation is a general term for any type of information processing that can be represented mathematically. This includes phenomena ranging from simple calculations to human thinking. of free cash flow and a reconciliation of this metric to the nearest GAAP measures of net income and net cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses . Management's computation of free cash flow consists of net cash flow from operations plus cash flows generated from or used for purchases and sales of property, plant and equipment, acquisitions of operations, effects of exchange rates on cash and cash equivalents and other financing activities. Management believes that the non-GAAP metric of free cash flow is a useful measure to help management and investors better assess and understand the company's operating performance, and sources and uses of cash. Management also believes the analysis of free cash flow assists in identifying underlying trends in the business. Computations of free cash flow may differ from company to company. Therefore, the analysis of free cash flow should be used as a complement to, and in conjunction with, the company's consolidated statements of cash flows presented in the accompanying financial statements. Management also analyzes cash flow from operations based upon its three primary components noted in the table below: net income, non-cash and other reconciling items and cash flow generated from working capital. Similar to free cash flow, management believes that this breakout is an important measure to help management and investors to understand the trends in the company's cash flows, including the impact of management's focus on asset utilization utilization, n 1. the extent to which a given group uses a particular service in a specified period. Although usually expressed as the number of services used per year per 100 or per 1000 persons eligible for the service, utilization rates may be and efficiency through reductions in the net balance of 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 , inventories and accounts payable.
Quarter Ended Fiscal Year Ended
July 2, 2005 July 2, 2005
---------------- -----------------
(thousands)
Net income $47,250 $168,239
Non-cash and other reconciling
items 60,023 172,595
Cash flow generated from working
capital (excluding cash and
cash equivalents) (29,616) 121,002
---------------- -----------------
Net cash flow from operations 77,657 461,836
Cash flow generated from (used
for):
Purchases of property, plant
and equipment (9,081) (31,338)
Cash proceeds from sales of
property, plant and
equipment 146 7,271
Acquisition of operations,
net (2,465) (3,563)
Effect of exchange rates on
cash and cash equiv. (16,535) (10,816)
Other, net financing
activities 1,351 2,274
---------------- -----------------
Net free cash flow $51,073 $425,664
================ =================
Teleconference Webcast and Upcoming Events Avnet will host a webcast of its quarterly teleconference today at 2 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, will be available 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. For a listing of Avnet's upcoming events and other information, please visit Avnet's Investor Relations Investor relations The process by which the corporation communicates with its investors. Web site at www.ir.avnet.com. About Avnet Avnet enables success from the center of the technology industry, providing cost-effective cost-effective, n the minimal expenditure of dollars, time, and other elements necessary to achieve the health care result deemed necessary and appropriate. services and solutions vital to a broad base of more than 100,000 customers and 300 suppliers. The company markets, distributes and adds value to a wide variety of electronic components, enterprise computer products and embedded Inserted into. See embedded system. subsystems. Through its premier market position, Avnet brings a breadth Breadth The percentage of assets or stocks advancing relative to those unchanged or declining. Also the number of independent forecasts available per year. A stock picker forecasting returns to 100 stocks every quarter exhibits a breadth of 400, assuming each forecast is and depth of capabilities that help its trading partners accelerate growth and realize cost efficiencies. Avnet and Memec generated combined revenue in excess of $13 billion in the past year through sales in 69 countries. Visit Avnet's Investor Relations Web site at www.ir.avnet.com or contact us at investorrelations@avnet.com.
AVNET INC.
(MILLIONS EXCEPT PER SHARE DATA)
FOURTH QUARTERS ENDED
--------------------------------
JULY 2, JULY 3,
2005 2004
------------- -------------
Sales $2,825.4 $2,643.0
Income before income taxes 65.0 65.4
Net income 47.3 48.7
Net income per share:
Basic $0.39 $0.40
Diluted $0.39 $0.40
FISCAL YEARS ENDED
--------------------------------
JULY 2, JULY 3,
2005 (2) 2004 (1)(2)
------------- -------------
Sales $11,066.8 $10,244.7
Income before income taxes 239.8 98.4
Net income 168.2 72.9
Net income per share:
Basic $1.39 $0.61
Diluted $1.39 $0.60
(1) The results for fiscal 2004 shown above include the impact of
restructuring and other charges recorded in the first and second
quarters in connection with cost-cutting initiatives and the
combination of the Computer Marketing and Applied Computing
operating groups into one operating group called Technology
Solutions. These restructuring and other charges amounted to
$55.6 million pre-tax (all of which was included in operating
expenses), $38.5 million after tax and $0.32 per diluted share.
See the Consolidated Statements of Operations included herein for
further disclosure of the nature and impacts of these
restructuring and other charges. The results for fiscal 2004 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 Feb. 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 the
restructuring and debt extinguishment costs on the results for
fiscal 2004 amounted to $72.0 million pre-tax, $52.8 million
after tax and $0.44 per diluted share.
(2) Due to Avnet's fiscal calendar, the 12 months ended July 2,
2005, contained 52 weeks while the 12 months ended July 3, 2004,
contained 53 weeks.
AVNET INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(THOUSANDS EXCEPT PER SHARE DATA)
FOURTH QUARTERS ENDED FISCAL YEARS ENDED
----------------------- -------------------------
JULY 2, JULY 3, JULY 2, JULY 3,
2005 2004 2005 (2) 2004 (1)(2)
----------- ----------- ------------ ------------
Sales $2,825,401 $2,643,041 $11,066,816 $10,244,741
Cost of sales 2,454,476 2,275,028 9,607,833 8,879,888
----------- ----------- ------------ ------------
Gross profit 370,925 368,013 1,458,983 1,364,853
Selling, general
and administrative
expenses 285,189 282,235 1,137,667 1,106,988
Restructuring
charges (1) - - - 55,618
----------- ----------- ------------ ------------
Operating income 85,736 85,778 321,316 202,247
Other income, net 1,253 (43) 3,499 7,094
Interest expense (21,968) (20,389) (85,056) (94,573)
Debt extinguishment
costs (1) - - - (16,370)
----------- ----------- ------------ ------------
Income before
income taxes 65,021 65,346 239,759 98,398
Income tax
provision 17,771 16,675 71,520 25,501
----------- ----------- ------------ ------------
Net income $47,250 $48,671 $168,239 $72,897
=========== =========== ============ ============
Net earnings per
share:
Basic $0.39 $0.40 $1.39 $0.61
=========== =========== ============ ============
Diluted $0.39 $0.40 $1.39 $0.60
=========== =========== ============ ============
Shares used to
compute earnings
per share:
Basic 120,746 120,507 120,629 120,086
=========== =========== ============ ============
Diluted 121,755 122,087 121,469 121,252
=========== =========== ============ ============
(1) The results for fiscal 2004 shown above include the impact of
restructuring and other charges recorded in the first and second
quarters in connection with cost-cutting initiatives and the
combination of the Computer Marketing and Applied Computing
operating groups into one operating group called Technology
Solutions. These charges included severance costs, charges for
consolidation of certain owned and leased facilities, write-offs
of certain capitalized IT-related initiatives, the impairment of
certain owned assets in the company's European operations and the
write-off of remaining unamortized deferred loan costs associated
with the company's multiyear credit facility terminated in
September 2003. These restructuring and other charges amounted to
$55.6 million pre-tax, $38.5 million after tax and $0.32 per
diluted share.
The results for fiscal 2004 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 Feb. 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 the restructuring and debt
extinguishment costs on the results for fiscal 2004 amounted to
$72.0 million pre-tax, $52.8 million after tax and $0.44 per
diluted share.
(2) Due to Avnet's fiscal calendar, the fiscal year ended July 2,
2005, contained 52 weeks while the fiscal year ended July 3, 2004,
contained 53 weeks.
AVNET INC.
CONSOLIDATED BALANCE SHEETS
(THOUSANDS)
JULY 2, JULY 3,
2005 2004
----------- -----------
Assets:
Current assets:
Cash and cash equivalents $637,867 $312,667
Receivables, net 1,888,627 1,743,962
Inventories 1,224,698 1,364,037
Other 31,775 63,320
----------- -----------
Total current assets 3,782,967 3,483,986
Property, plant and equipment, net 157,428 187,339
Goodwill 895,300 894,882
Other assets 262,520 297,444
----------- -----------
Total assets 5,098,215 4,863,651
----------- -----------
Less liabilities:
Current liabilities:
Borrowings due within one year 61,298 160,660
Accounts payable 1,296,713 1,099,703
Accrued expenses and other 359,507 384,630
----------- -----------
Total current liabilities 1,717,518 1,644,993
Long-term debt, less due within one year 1,183,195 1,196,160
Other long-term liabilities 100,469 69,072
----------- -----------
Total liabilities 3,001,182 2,910,225
----------- -----------
Shareholders' equity $2,097,033 $1,953,426
=========== ===========
AVNET INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(THOUSANDS)
FISCAL YEARS ENDED
JULY 2, JULY 3,
2005 2004
--------- ---------
Cash flows from:
Operations:
Net income $168,239 $72,897
Add non-cash and other reconciling items:
Depreciation and amortization 61,746 64,540
Deferred income taxes 63,734 (2,815)
Non-cash restructuring and other charges - 31,409
Other, net 47,115 47,649
Receivables (168,892) (271,311)
Inventories 144,004 (240,520)
Accounts payable 191,270 285,386
Accrued expenses and other, net (45,380) 77,414
--------- ---------
Net cash flows provided from operating
activities 461,836 64,649
--------- ---------
Financing:
Issuance of notes in public offering, net
of issuance costs - 292,500
Repayment of notes (89,589) (444,245)
(Repayment of) proceeds from bank debt, net (10,789) 55,974
Repayment of other debt, net (86) (504)
Other, net 2,274 13,914
--------- ---------
Net cash flows used for financing
activities (98,190) (82,361)
--------- ---------
Investing:
Purchases of property, plant, and equipment (31,338) (28,623)
Cash proceeds from sales of property, plant
and equipment 7,271 5,229
Acquisition of operations, net (3,563) (50,528)
--------- ---------
Net cash flows used for investing
activities (27,630) (73,922)
--------- ---------
Effect of exchange rates on cash and cash
equivalents (10,816) 8,834
--------- ---------
Cash and cash equivalents:
increase 325,200 (82,800)
at beginning of period 312,667 395,467
--------- ---------
at end of period $637,867 $312,667
========= =========
AVNET INC.
SEGMENT INFORMATION
(MILLIONS)
FOURTH QUARTER ENDED FISCAL YEARS ENDED
------------------------ -----------------------
JULY 2, JULY 3, JULY 2, JULY 3,
SALES 2005 2004 2005 2004
---------------- ----------- ----------- ----------- ----------
Electronics
Marketing $1,620.5 $1,608.1 $6,259.0 $5,892.4
Technology
Solutions 1,204.9 1,034.9 4,807.8 4,352.3
----------- ----------- ----------- ----------
Consolidated $2,825.4 $2,643.0 $11,066.8 $10,244.7
=========== =========== =========== ==========
OPERATING INCOME
(LOSS)
----------------
Electronics
Marketing $65.3 $75.3 $233.1 $212.5
Technology
Solutions 37.4 24.4 147.7 98.9
Corporate (17.0) (13.9) (59.5) (53.6)
----------- ----------- ----------- ----------
Consolidated Before
Restructuring and
Other Charges 85.7 85.8 321.3 257.8
Restructuring and
Other Charges - - - (55.6)
----------- ----------- ----------- ----------
Consolidated $85.7 $85.8 $321.3 $202.2
=========== =========== =========== ==========
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