Avnet Inc. Reports Fourth Quarter and Full Year Fiscal 2003 Results; Positive Cash Flow Generation Continues.Business Editors/High-Tech Writers PHOENIX--(BUSINESS WIRE)--Aug. 6, 2003 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 fourth quarter and fiscal 2003 year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. results. On revenues of $2.19 billion for the fourth quarter of fiscal 2003, the company reported net income of $11.5 million, or $0.10 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. Net income increased $72.9 million, or $0.61 per share on a diluted basis, over the fourth quarter of fiscal 2002 net loss. The fourth quarter of fiscal 2002 included special charges totaling $79.6 million pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta , $62.1 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. and $0.52 per share on a diluted basis. Excluding the impact of these prior year special charges, fiscal 2003 fourth quarter net income increased by $10.8 million, or $0.09 per share on a diluted basis, as compared with the fourth quarter of fiscal 2002. 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. for the quarter was $31.7 million, up $85.1 million year-over-year (up $5.5 million excluding the impact of the fiscal 2002 special charges discussed above) as operating income margin increased to 1.45%. For fiscal 2003, Avnet reported revenues of $9.05 billion, up 1.4% as compared with $8.92 billion in fiscal 2002. The company reported a net loss, including special charges, of $46.1 million, or $0.39 per share on a diluted basis, for fiscal 2003. Excluding special charges, the company recorded net income of $27.8 million, or $0.23 per share on a diluted basis. This compares with a fiscal 2002 net loss before cumulative effect of change in accounting principle of $84.4 million, or $0.71 per share on a diluted basis (a net loss of $22.3 million, or $0.19 per share on a diluted basis excluding special charges). Electronics Marketing (EM) revenues of $1.25 billion for the current year fourth quarter and $4.99 billion for the year both grew by 3% year-over-year. Computer Marketing (CM) revenues of $586 million and $2.43 billion for the current year fourth quarter and fiscal year, respectively, were up 3% and 1% year-over-year. Applied Computing computing - computer (AC) revenues of $349 million for the current year fourth quarter and $1.63 billion for the fiscal year were down 2% and 3%, respectively, as compared with the prior year fourth quarter and fiscal year. Commenting on the company's operating results, 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, "Revenues came in below our expectations due to a slight sequential One after the other in some consecutive order such as by name or number. decline in EM sales as compared with an expected slight increase. However, EM's operating income and margin came in stronger than expected. Revenue performance from Computer Marketing and Applied Computing came in largely as expected. This is the second consecutive quarter of slight year-over-year revenue growth for the enterprise, and despite the sequential sales decline, we continue to see stability in the technology markets we serve." Vallee continued, "Gross profit margin Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. improved sequentially se·quen·tial adj. 1. Forming or characterized by a sequence, as of units or musical notes. 2. Sequent. se·quen , and expenses continued to decline. Operating income margin was up year-over-year for the fourth consecutive quarter (excluding the impact of special charges) as we continue to make positive strides in improving productivity across the enterprise." Vallee went on to say, "Although our earnings rose sequentially and year-over-year, they remain unacceptable in absolute terms (Alg.) such as are known, or which do not contain the unknown quantity. See also: Absolute . Consequently, we are aggressively engaged in efforts to further streamline streamline, path of a fluid flowing steadily and without appreciable turbulence. A body is said to be streamlined if its shape offers the least possible resistance to a current of air, water, or other fluid. the enterprise and lower our cost structure. Our Computer Marketing and Applied Computing operating groups are being merged to form Avnet Technology Solutions, and we are centralizing cen·tral·ize v. cen·tral·ized, cen·tral·iz·ing, cen·tral·iz·es v.tr. 1. To draw into or toward a center; consolidate. 2. the company's internal information technology resources. These changes should allow us to further enhance profitability while maintaining the important value we bring to the markets we serve." Ray Sadowski, chief financial officer, stated, "Including some actions already taken during the June June: see month. 2003 quarter, we expect to reduce expenses by roughly $90 million from the March 2003 run-rate. We currently estimate that we will incur To become subject to and liable for; to have liabilities imposed by act or operation of law. Expenses are incurred, for example, when the legal obligation to pay them arises. An individual incurs a liability when a money judgment is rendered against him or her by a court. special charges of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $50 million of which $25 million are cash-related and the balance are non-cash. We are actively implementing these cost reductions which we expect to be mostly completed by the end of December December: see month. 2003. Therefore, this expected 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. cost reduction should take full effect by our third quarter of fiscal 2004. The final charges associated with this initiative could vary from these estimates as the reductions are implemented and will be updated 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 our September September: see month. 2003 results. Although we currently expect that the majority of the special charges will be recorded during the September 2003 quarter, there is a possibility that some of the charges will not be recorded until the December 2003 quarter." The company reported that it further reduced net debt (debt less cash) during the June 2003 quarter as it generated free cash flow (as defined later in this release) of $105.2 million. For fiscal years 2003 and 2002, the company generated free cash flow of $637.6 million and $869.0 million, respectively. Total cash and cash equivalents at the close of the June 2003 quarter were $395 million, and total debt was $1.47 billion. From the prior year ending balances, total debt and net debt fell 20% and 36%, respectively (including as debt $0 and $200 million, respectively, of drawings under the company's accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying securitization Securitization The process of creating a financial instrument by combining other financial assets and then marketing them to investors. Notes: Mortgage backed securities are a perfect example of securitization. May also be spelled as "securitisation. program in June 2003 and June 2002) while cash and cash equivalents rose $236 million, or nearly 150%. Commenting on Avnet's fiscal year results, Sadowski said, "The company improved its pre-tax results by $41.4 million. Excluding the impact of special charges, the company increased pre-tax income by $82.0 million, from a loss of $41.2 million in fiscal 2002 to income of $40.8 million in fiscal 2003 on essentially flat sales." Providing guidance on the September 2003 quarter, Vallee stated, "We expect revenues from both Electronics Marketing and Avnet Technology Solutions to be higher benefiting somewhat from the additional week as our fiscal calendar calls for 14 weeks during the September 2003 quarter. As a result, we expect enterprise revenues to be in the range of $2.25 to $2.35 billion. Factoring in an additional week of expenses due to our fiscal calendar, and assuming a more normalized tax rate in the 30% to 35% range as well as lower anticipated other income, earnings per share in the September 2003 quarter should range between $0.08 and $0.11, excluding the impact of incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. special charges associated with the 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). discussed above." 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 with, data presented in accordance with GAAP. Reconciliations of the company's analysis of results to GAAP for the fiscal years ended June 2003 and June 2002, and the quarter ended June 2002 are attached. The company's determination of free cash flow referenced earlier is illustrated in the table below. Amounts for the full fiscal year ended June 27, 2003 are taken directly from the attached Statement of Cash Flows and the amounts for the quarter are derived de·rive v. de·rived, de·riv·ing, de·rives v.tr. 1. To obtain or receive from a source. 2. by subtracting the amounts from the Statement of Cash Flows for the first nine months of the fiscal year from the year-end results.
Fiscal Fiscal
Year Year Quarter
Ended Ended Ended
6/27/03 6/28/02 6/27/03
------- ------- -------
Net cash flows provided from operating
activities $651.9 $976.3 $98.6
Purchases of property, plant and equipment (34.2) (87.2) (7.6)
Cash proceeds from sales of property, plant and
equipment 16.4 3.4 7.4
Acquisition of operations, net (9.2) (34.1) (1.7)
Effect of exchange rates on cash and cash
equivalent 13.2 12.9 8.5
Cash dividends - (26.5) -
Other, net financing activities (.5) 24.2 -
------- ------- -------
Free cash flow $637.6 $869.0 $105.2
======= ======= =======
Teleconference Webcast and Upcoming Events Avnet will host a webcast of its quarterly teleconference today at 5 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 August and September: The Raymond James  This article or section is written like an .Please help [ rewrite this article] from a neutral point of view. Mark blatant advertising for , using . Midwest Midwest or Middle West, region of the United States centered on the western Great Lakes and the upper-middle Mississippi valley. It is a somewhat imprecise term that has been applied to the northern section of the land between the Appalachians Mini-Conference on Aug. 21, 2003, and the SG Cowen Cowen is the name of: Places:
The process by which the corporation communicates with its investors. Web site at www.ir.avnet.com. 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 "will," "expect," "anticipate," and "believe." 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 effects of additional actions taken to lower costs, including the combination of Computer Marketing and Applied Computing discussed above, 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 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 2002 and the Form 10-Q Form 10-Q See 10-Q. for the quarter ended March 28, 2003. 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. Additional Information Phoenix-based Avnet Inc. 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, embedded systems Embedded systems Computer systems that cannot be programmed by the user because they are preprogrammed for a specific task and are buried within the equipment they serve. and computer products from leading manufacturers. Serving customers in 68 countries, Avnet also delivers services such as inventory management, supply-chain services, bill-of-materials analysis, systems integration and engineering design assistance. A Fortune 500 company, Avnet's revenues for fiscal 2003 (year ended June 27, 2003) were $9.05 billion. Please feel free to 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)
INCLUDING SPECIAL ITEMS (1) FOURTH QUARTERS ENDED
----------------------
JUNE 27, JUNE 28,
2003 2002 (1)
--------- ------------
Sales $2,187.4 $2,144.8
Income (loss) before income taxes 14.1 (77.9)
Net income (loss) 11.5 (61.4)
Net income (loss) per share:
Basic $0.10 ($0.51)
Diluted $0.10 ($0.51)
EXCLUDING SPECIAL ITEMS FOURTH QUARTERS ENDED
----------------------
JUNE 27, JUNE 28,
2003 2002
--------- ------------
Sales $2,187.4 $2,144.8
Income (loss) before income taxes 14.1 1.7
Net income (loss) 11.5 0.7
Net income (loss) per share:
Basic $0.10 $0.01
Diluted $0.10 $0.01
(1) Fiscal 2002 fourth quarter results shown above include the impact
of imcremental special charges related to the value of assets
acquired in connection with the acquisition of Kent Electronics,
which was accounted for as a "Pooling-of-Interests," the
impairment of investments in Internet-related businesses and
severance costs. The special charges amounted to $79.6 million
pre-tax ($21.6 million included in cost of sales and $58.0 million
included in operating expenses) and $62.1 million after-tax. The
impact on diluted earnings per share was $0.52 for the fourth
quarter.
See the Consolidated Statements of Operations included herein for
further disclosure of the impacts of this special item.
AVNET INC.
(MILLIONS EXCEPT PER SHARE DATA)
INCLUDING SPECIAL ITEMS (1)(2)(3) FISCAL YEARS ENDED
----------------------
JUNE 27, JUNE 28,
2003 (1) 2002 (2)(3)
--------- ------------
Sales $9,048.4 $8,920.2
Loss before income taxes (79.4) (120.8)
Net loss (46.1) (84.4)
Net loss per share:
Basic ($0.39) ($0.71)
Diluted ($0.39) ($0.71)
EXCLUDING SPECIAL ITEMS FISCAL YEARS ENDED
----------------------
JUNE 27, JUNE 28,
2003 2002 (2)
--------- ------------
Sales $9,048.4 $8,920.2
Income (loss) before income taxes 40.8 (41.2)
Net income (loss) 27.8 (22.3)
Net earnings (loss) per share:
Basic $0.23 ($0.19)
Diluted $0.23 ($0.19)
(1) The results for fiscal 2003 shown above include the impact of
incremental special charges recorded in the second quarter in
connection with cost cutting initiatives including severance
costs, charges for consolidation of facilities and write-offs of
certain capitalized IT-related initiatives. The special charges in
the second quarter amounted to $106.8 million pre-tax (all of
which is included in selling, general and administrative
expenses), $65.7 million after-tax and $0.55 per diluted share.
The results for 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 Aug. 15, 2003 and $220.1
million of its 8.20% Notes due Oct. 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 special items
on the results for fiscal 2003 amounted to $120.3 million pre-tax,
$73.9 million after-tax and $0.62 per diluted share. See the
Consolidated Statements of Operations included herein for further
disclosure of the impacts of these special items.
(2) Fiscal 2002 results shown above include the impact of incremental
special charges related to the value of assets acquired in
connection with the acquisition of Kent Electronics, which was
accounted for as a "Pooling-of-Interests," the impairment of
investments in Internet-related businesses and severance costs.
The special charges amounted to $79.6 million pre-tax ($21.6
million included in cost of sales and $58.0 million included in
operating expenses) and $62.1 million after-tax. The impact on
diluted earnings per share was $0.52.
(3) The above operating information for fiscal 2002 excludes the
cumulative effect of change in accounting principle for the
impairment of goodwill recorded as a result of the adoption of
Statement of Financial Accounting Standards No. 142, "Goodwill and
Other Intangibles," for which further detail can be found on the
attached Consolidated Statements of Operations.
AVNET INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(THOUSANDS EXCEPT PER SHARE DATA)
FOURTH QUARTERS ENDED
--------------------------------------------
JUNE 28, 2002 (1)
--------------------------------
JUNE 27, REPORTED SPECIAL ADJUSTED
2003 RESULTS ITEMS RESULTS
----------- ----------- -------- -----------
Sales $2,187,419 $2,144,752 $- $2,144,752
Cost of sales 1,892,761 1,862,105 (21,600) 1,840,505
----------- ----------- -------- -----------
Gross profit 294,658 282,647 21,600 304,247
Selling, general and
administrative expenses 262,939 336,074 (58,023) 278,051
----------- ----------- -------- -----------
Operating income (loss) 31,719 (53,427) 79,623 26,196
Other income, net 9,217 2,005 - 2,005
Interest expense (26,863) (26,451) - (26,451)
----------- ----------- -------- -----------
Income (loss) before
income taxes 14,073 (77,873) 79,623 1,750
Income tax provision
(benefit) 2,536 (16,472) 17,539 1,067
----------- ----------- -------- -----------
Net income (loss) $11,537 ($61,401) $62,084 $683
=========== =========== ======== ===========
Net earnings (loss) per
share:
Basic $0.10 ($0.51) $0.52 $0.01
=========== =========== ======== ===========
Diluted $0.10 ($0.51) $0.52 $0.01
=========== =========== ======== ===========
Shares used to compute
earnings (loss) per
share:
Basic 119,500 119,397 119,397 119,397
=========== =========== ======== ===========
Diluted 119,577 119,397 119,397 119,397
=========== =========== ======== ===========
(1) Fiscal 2002 fourth quarter results shown above include the impact
of incremental special charges related to the value of assets
acquired in connection with the acquisition of Kent Electronics,
which was accounted for as a "Pooling-of-Interests," the
impairment of investments in Internet-related businesses and
severance costs. The special charges amounted to $79.6 million
pre-tax ($21.6 million included in cost of sales and $58.0 million
included in operating expenses) and $62.1 million after-tax. The
impact on diluted earnings per share was $0.52 for the fourth
quarter.
AVNET INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(THOUSANDS EXCEPT PER SHARE DATA)
FISCAL YEARS ENDED
---------------------------------
JUNE 27, 2003 (1)
---------------------------------
REPORTED SPECIAL ADJUSTED
RESULTS ITEMS RESULTS
----------- --------- -----------
Sales $9,048,442 $- $9,048,442
Cost of sales 7,833,487 - 7,833,487
----------- --------- -----------
Gross profit 1,214,955 - 1,214,955
Selling, general and administrative
expenses 1,202,226 (106,765) 1,095,461
----------- --------- -----------
Operating income (loss) 12,729 106,765 119,494
Other income, net 26,204 - 26,204
Interest expense (104,851) - (104,851)
Debt extinguishment costs (13,487) 13,487 -
----------- --------- -----------
Income (loss) before income taxes (79,405) 120,252 40,847
Income tax provision (benefit) (33,289) 46,350 13,061
----------- --------- -----------
Income (loss) before cumulative effect
of change in accounting principle (46,116) 73,902 27,786
Cumulative effect of change in
accounting principle - - -
----------- --------- -----------
Net income (loss) ($46,116) $73,902 $27,786
=========== ========= ===========
Earnings (loss) per share before
cumulative effect of change in
accounting principle:
Basic ($0.39) $0.62 $0.23
=========== ========= ===========
Diluted ($0.39) $0.62 $0.23
=========== ========= ===========
Net earnings (loss) per share:
Basic ($0.39) $0.62 $0.23
=========== ========= ===========
Diluted ($0.39) $0.62 $0.23
=========== ========= ===========
Shares used to compute earnings
(loss) per share:
Basic 119,456 119,456 119,456
=========== ========= ===========
Diluted 119,456 119,456 119,456
=========== ========= ===========
FISCAL YEARS ENDED
---------------------------------
JUNE 28, 2002 (2)
-------------------- -----------
REPORTED SPECIAL ADJUSTED
RESULTS ITEMS RESULTS
----------- -------- -----------
Sales $8,920,248 $- $8,920,248
Cost of sales 7,697,434 (21,600) 7,675,834
----------- -------- -----------
Gross profit 1,222,814 21,600 1,244,414
Selling, general and administrative
expenses 1,225,799 (58,023) 1,167,776
----------- -------- -----------
Operating income (loss) (2,985) 79,623 76,638
Other income, net 6,755 - 6,755
Interest expense (124,583) - (124,583)
Debt extinguishment costs - - -
----------- -------- -----------
Income (loss) before income taxes (120,813) 79,623 (41,190)
Income tax provision (benefit) (36,377) 17,539 (18,838)
----------- -------- -----------
Income (loss) before cumulative effect
of change in accounting principle (84,436) 62,084 (22,352)
Cumulative effect of change in
accounting principle (580,495) - (580,495)
----------- -------- -----------
Net income (loss) ($664,931) $62,084 ($602,847)
=========== ======== ===========
Earnings (loss) per share before
cumulative effect of change in
accounting principle:
Basic ($0.71) $0.52 ($0.19)
=========== ======== ===========
Diluted ($0.71) $0.52 ($0.19)
=========== ======== ===========
Net earnings (loss) per share:
Basic ($5.61) $0.52 ($5.09)
=========== ======== ===========
Diluted ($5.61) $0.52 ($5.09)
=========== ======== ===========
Shares used to compute earnings
(loss) per share:
Basic 118,561 118,561 118,561
=========== ======== ===========
Diluted 118,561 118,561 118,561
=========== ======== ===========
(1) The results for fiscal 2003 shown above include the impact of
incremental special charges recorded in the second quarter in
connection with cost cutting initiatives including severance
costs, charges for consolidation of facilities and write-offs of
certain capitalized IT-related initiatives. The special charges in
the second quarter amounted to $106.8 million pre-tax (all of
which is included in selling, general and administrative
expenses), $65.7 million after-tax and $0.55 per diluted share.
The results for 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 Aug. 15, 2003 and $220.1
million of its 8.20% Notes due Oct. 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 special items
on the results for fiscal 2003 amounted to $120.3 million pre-tax,
$73.9 million after-tax and $0.62 per diluted share.
(2) Fiscal 2002 results shown above include the impact of incremental
special charges related to the value of assets acquired in
connection with the acquisition of Kent Electronics, which was
accounted for as a "Pooling-of-Interests," the impairment of
investments in Internet-related businesses and severance costs.
The special charges amounted to $79.6 million pre-tax ($21.6
million included in cost of sales and $58.0 million included in
operating expenses) and $62.1 million after-tax. The impact on
diluted earnings per share was $0.52.
AVNET INC.
CONSOLIDATED BALANCE SHEETS
(THOUSANDS)
JUNE 27, JUNE 28,
2003 (1) 2002 (1)
----------- -----------
Assets:
Current assets:
Cash and cash equivalents (2) $395,467 $159,234
Receivables, net 1,471,806 1,374,017
Inventories 1,097,580 1,417,305
Other 161,237 254,976
----------- -----------
Total current assets 3,126,090 3,205,532
Property, plant & equipment, net 250,412 349,924
Goodwill 857,110 844,597
Other assets 265,939 281,901
----------- -----------
Total assets 4,499,551 4,681,954
----------- -----------
Less liabilities:
Current liabilities:
Borrowings due within one year 187,656 59,309
Accounts payable 802,039 891,234
Accrued expenses and other 316,355 326,293
----------- -----------
Total current liabilities 1,306,050 1,276,836
Long-term debt, less due within one year 1,278,399 1,565,836
Other long-term liabilities 82,580 34,772
----------- -----------
Total liabilities 2,667,029 2,877,444
----------- -----------
Shareholders' equity $1,832,522 $1,804,510
=========== ===========
(1) The company has an accounts receivable securitization program
whereby it sells an interest in a pool of its trade accounts
receivable to third party conduits through a wholly owned
bankruptcy-remote special purpose entity that is consolidated for
financial reporting purposes. The purpose of the program is to
provide the company with an additional source of liquidity at
interest rates more favorable than it could receive through other
forms of financing. At June 27, 2003 and June 28, 2002, the
company had sold $0 million and $200.0 million, respectively, of
receivables under the program. This is reflected as a reduction of
receivables, with the proceeds used to pay down debt, in the above
consolidated balance sheets.
(2) At June 27, 2003, cash and cash equivalents include $78.5 million
of restricted cash held in an escrow account. This cash will be
used to repay the remaining $41.0 million in principal outstanding
on the 6.45% Notes due Aug. 15, 2003 and the remaining $29.9
million in principal outstanding on the 8.20% Notes due Oct. 17,
2003 plus the remaining interest payments on this debt through its
maturity.
AVNET INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(THOUSANDS)
FISCAL YEARS ENDED
JUNE 27, JUNE 28,
2003 2002
--------- ----------
Cash flows from:
Operations:
Net loss ($46,116) ($664,931)
Cumulative effect of change in accounting
principle - 580,495
--------- ----------
Loss before cumulative effect of change in
accounting principle (46,116) (84,436)
Add non-cash and other reconciling items:
Depreciation and amortization 88,839 103,879
Deferred taxes (21,606) 10,828
Other, net 106,812 121,240
--------- ----------
127,929 151,511
Receivables 140,656 433,863
Inventories 387,081 552,621
Payables, accruals and other, net (3,788) (161,690)
--------- ----------
Net cash flows provided from operating
activities 651,878 976,305
--------- ----------
Financing:
Reduced drawings under accounts receivable
securitization program (200,000) (150,000)
Issuance of notes in public offering, net of
issuance costs 465,313 394,328
Repayment of notes (379,197) (528,969)
Repayment of commercial paper and bank debt,
net (285,795) (517,924)
Repayment of other debt, net (1,686) (4,482)
Cash dividends - (26,546)
Other, net (474) 24,225
--------- ----------
Net cash flows used for financing
activities (401,839) (809,368)
--------- ----------
Investing:
Purchases of property, plant, and equipment (34,169) (87,173)
Cash proceeds from sales of property, plant
and equipment 16,379 3,423
Acquisition of operations, net (9,210) (34,091)
--------- ----------
Net cash flows used for investing
activities (27,000) (117,841)
--------- ----------
Effect of exchange rates on cash and cash
equivalents 13,194 12,859
--------- ----------
Cash and cash equivalents:
increase 236,233 61,955
at beginning of year 159,234 97,279
--------- ----------
at end of period $395,467 $159,234
========= ==========
AVNET INC.
SEGMENT INFORMATION
(MILLIONS)
FOURTH QUARTERS ENDED FISCAL YEARS ENDED
------------------------ ------------------------
JUNE 27, JUNE 28, JUNE 27, JUNE 28,
SALES 2003 2002 2003 2002
---------------- --------- --------- --------- ---------
Electronics
Marketing $1,252.2 $1,216.6 $4,988.4 $4,841.9
Computer
Marketing 586.2 570.9 2,429.4 2,399.2
Applied
Computing 349.0 357.3 1,630.6 1,679.1
--------- --------- --------- ---------
Consolidated $2,187.4 $2,144.8 $9,048.4 $8,920.2
========= ========= ========= =========
OPERATING INCOME (LOSS)
-----------------------
Electronics
Marketing $34.1 $18.1 $101.9 $22.7
Computer
Marketing 4.3 19.0 40.6 63.0
Applied
Computing 0.7 (2.2) 15.6 42.8
Corporate (7.4) (8.7) (38.6) (51.9)
--------- --------- --------- ---------
Consolidated
Before Special
Charges 31.7 26.2 119.5 76.6
Special Charges - ($79.6) ($106.8) ($79.6)
--------- --------- --------- ---------
Consolidated $31.7 ($53.4) $12.7 ($3.0)
========= ========= ========= =========
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