Company Announcements

Avnet Reports Third Quarter Fiscal 2022 Financial Results

Third quarter sales of $6.5 billion, up 32% year over year and 11% sequentially

Diluted EPS of $1.84 and adjusted diluted EPS of $2.15

Electronic Components and Farnell operating margins increased to 4.4% and 14.9%, respectively

PHOENIX--(BUSINESS WIRE)--Apr. 27, 2022-- Avnet, Inc. (Nasdaq: AVT) today announced results for its third quarter ended April 2, 2022.

Commenting on the Company’s financial results, Avnet Chief Executive Officer Phil Gallagher stated, “We are pleased to report another strong quarter of sales and operating margin growth. Farnell achieved record operating margin as our continued investments in inventory breadth and e-commerce capabilities continue to pay off. Supported by increased sales, the Americas expanded operating margins for the fifth consecutive quarter. Growing demand for supply chain orchestration is driving strong financial performance across our global business. Looking ahead to the fourth quarter, amid the backdrop of geopolitical uncertainty, we continue to anticipate a favorable demand environment and expect to sustain strong margins from our recently implemented operating improvements.”

Fiscal Third Quarter Key Financial Highlights:

  • Sales of $6.5 billion, up from $5.9 billion sequentially and $4.9 billion in the prior year quarter.
    • On a constant currency basis, sales grew 35.7% year over year and 11.4% sequentially.
  • GAAP diluted earnings per share of $1.84, compared with $1.07 in the prior year quarter.
    • Non-GAAP adjusted diluted earnings per share of $2.15, compared with $0.74 in the prior year quarter.
  • Farnell operating margins increased 123 basis points sequentially to 14.9%.
  • Electronic Components operating margins increased 92 basis points sequentially to 4.4%, supported by growth in EMEA and the Americas and better than expected results in Asia.
  • Returned $25.6 million to shareholders in dividends, with the dividend payout increasing 23.8% year over year.

Key Financial Metrics

($ in millions, except per share data)

Third Quarter Results (GAAP)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mar – 22

 

Mar – 21

 

Change Y/Y

 

Dec – 21

 

Change Q/Q

 

Sales

 

$

6,488.1

 

 

$

4,916.7

 

 

32.0

%

 

$

5,865.2

 

 

10.6

%

 

Operating Income

 

 

274.4

 

 

 

87.7

 

 

213.0

%

 

 

211.7

 

 

29.6

%

 

Operating Income Margin

 

 

4.2

%

 

 

1.8

%

 

245

bps

 

 

3.6

%

 

62

bps

 

Diluted Earnings Per Share (EPS)

 

$

1.84

 

 

$

1.07

 

 

72.0

%

 

$

1.50

 

 

22.7

%

 

Third Quarter Results (Non-GAAP)(1)

 

 

 

Mar – 22

 

Mar – 21

 

Change Y/Y

 

Dec – 21

 

Change Q/Q

 

Sales

 

$

6,488.1

 

 

$

4,916.7

 

 

32.0

%

 

$

5,865.2

 

 

10.6

%

 

Adjusted Operating Income

 

 

303.7

 

 

 

110.5

 

 

174.8

%

 

 

215.5

 

 

41.0

%

 

Adjusted Operating Income Margin

 

 

4.7

%

 

 

2.3

%

 

243

bps

 

 

3.7

%

 

101

bps

 

Adjusted Diluted Earnings Per Share (EPS)

 

$

2.15

 

 

$

0.74

 

 

190.5

%

 

$

1.51

 

 

42.4

%

 

Segment and Geographical Mix

 

 

 

Mar – 22

 

Mar – 21

 

Change Y/Y

 

Dec – 21

 

Change Q/Q

 

Electronic Components (EC) Sales

 

$

6,019.1

 

 

$

4,520.6

 

 

33.2

%

 

$

5,424.3

 

 

11.0

%

 

EC Operating Income Margin

 

 

4.4

%

 

 

2.6

%

 

178

bps

 

 

3.5

%

 

92

bps

 

Farnell Sales

 

$

469.0

 

 

$

396.1

 

 

18.4

%

 

$

440.9

 

 

6.4

%

 

Farnell Operating Income Margin

 

 

14.9

%

 

 

6.0

%

 

886

bps

 

 

13.7

%

 

123

bps

 

Americas Sales

 

$

1,627.2

 

 

$

1,161.0

 

 

40.2

%

 

$

1,391.5

 

 

16.9

%

 

EMEA Sales

 

 

2,185.7

 

 

 

1,585.6

 

 

37.9

%

 

 

1,840.8

 

 

18.7

%

 

Asia Sales

 

 

2,675.2

 

 

 

2,170.1

 

 

23.3

%

 

 

2,632.9

 

 

1.6

%

 

_________________________

(1)

A reconciliation of non-GAAP financial measures to GAAP financial measures is presented in the “Non-GAAP Financial Information” section of this press release.

Outlook for the Fourth Quarter of Fiscal 2022 Ending on July 2, 2022

 

 

 

 

 

 

Guidance Range

 

Midpoint

Sales

 

$6.0B$6.4B

 

$6.2B

Adjusted Diluted EPS(1)

 

$1.90$2.00

 

$1.95

_________________________

(1)

A reconciliation of non-GAAP guidance to GAAP guidance is presented in the “Non-GAAP Financial Information” section of this press release.

The above guidance is based upon current market conditions and inventory availability, the current state of COVID restrictions and geopolitical events. The above guidance excludes amortization of intangibles, the possibility of increased COVID restrictions, any additional expense associated with the Russian-Ukraine conflict and certain income tax adjustments. The above guidance assumes an effective tax rate of between 21% and 25%. The above guidance assumes 99 million average diluted shares outstanding and currency exchange rates versus the U.S. Dollar as shown in the table below:

 

 

Q4 Fiscal

 

 

 

 

 

 

2022

 

Q3 Fiscal

 

Q4 Fiscal

 

 

Guidance

 

2022

 

2021

Euro

 

$1.08

 

$1.12

 

$1.20

GBP

 

$1.30

 

$1.34

 

$1.40

Today’s Conference Call and Webcast Details

Avnet will host a quarterly webcast and teleconference today at 1:30 p.m. PT and 4:30 p.m. ET to discuss its financial results and provide a corporate update. The webcast can be accessed via Avnet’s Investor Relations web page at: https://ir.avnet.com.

Those who would still like to participate in the live call can dial 877-407-8112 or 201-689-8840. A replay of the conference call will be available for 90 days, through July 26, 2022 at 5:00 p.m. ET, and can be accessed by dialing: 877-660-6853 or 201-612-7415 and using Conference ID: 13726985.

Forward-Looking Statements

This document contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, with respect to the financial condition, results of operations and business of the Company. You can find many of these statements by looking for words like “believes,” “projected”, “plans,” “expects,” “anticipates,” “should,” “will,” “may,” “estimates” or similar expressions. These forward-looking statements are subject to numerous assumptions, risks and uncertainties. The following important factors, in addition to those discussed elsewhere in the Company’s Annual Report on Form 10-K for the fiscal year ended July 3, 2021 and subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, could affect the Company’s future results of operations, and could cause those results or other outcomes to differ materially from those expressed or implied in the forward-looking statements: geopolitical events and military conflicts; pandemics and other health-related crises, including COVID-19; competitive pressures among distributors of electronic components; an industry down-cycle in semiconductors; relationships with key suppliers and allocations of products by suppliers; risks relating to the Company’s international sales and operations, including risks relating to the ability to repatriate cash, foreign currency fluctuations, inflation, duties and taxes, and compliance with international and U.S. laws; risks relating to acquisitions, divestitures and investments; adverse effects on the Company’s supply chain, operations of its distribution centers, shipping costs, third-party service providers, customers and suppliers, including as a result of issues caused by military conflicts, natural and weather-related disasters, pandemics and health related crisis, warehouse modernization and relocation efforts; risks related to cyber-attacks, other privacy and security incidents and information systems failures, including related to current or future implementations, integrations or upgrades; general economic and business conditions (domestic, foreign and global) affecting the Company’s operations and financial performance and, indirectly, the Company’s credit ratings, debt covenant compliance, liquidity and access to financing; constraints on employee retention and hiring; and legislative or regulatory changes affecting the Company’s businesses.

Any forward-looking statement speaks only as of the date on which that statement is made. Except as required by law, the Company assumes no obligation to update any forward-looking statement to reflect events or circumstances that occur after the date on which the statement is made.

About Avnet

As a leading global technology distributor and solutions provider, Avnet has served customers’ evolving needs for an entire century. We support customers at each stage of a product’s lifecycle, from idea to design and from prototype to production. Our unique position at the center of the technology value chain enables us to accelerate the design and supply stages of product development so customers can realize revenue faster. Decade after decade, Avnet helps its customers and suppliers around the world realize the transformative possibilities of technology. Learn more about Avnet at www.avnet.com. (AVT_IR)

AVNET, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

 

 

Third Quarters Ended

 

Nine Months Ended

 

 

 

April 2,

 

April 3,

 

April 2,

 

April 3,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

 

(Thousands, except per share data)

 

Sales

 

$

6,488,143

 

 

$

4,916,714

 

 

$

17,938,055

 

 

$

14,307,945

 

 

Cost of sales

 

 

5,675,110

 

 

 

4,348,364

 

 

 

15,752,295

 

 

 

12,712,262

 

 

Gross profit

 

 

813,033

 

 

 

568,350

 

 

 

2,185,760

 

 

 

1,595,683

 

 

Selling, general and administrative expenses

 

 

512,364

 

 

 

463,092

 

 

 

1,499,904

 

 

 

1,376,333

 

 

Russian-Ukraine conflict related expenses

 

 

26,261

 

 

 

 

 

 

26,261

 

 

 

 

 

Restructuring, integration and other expenses

 

 

 

 

 

17,574

 

 

 

5,272

 

 

 

55,943

 

 

Operating income

 

 

274,408

 

 

 

87,684

 

 

 

654,323

 

 

 

163,407

 

 

Other (expense) income, net

 

 

(469

)

 

 

4,779

 

 

 

858

 

 

 

(16,052

)

 

Interest and other financing expenses, net

 

 

(25,914

)

 

 

(22,342

)

 

 

(70,388

)

 

 

(66,128

)

 

Income before taxes

 

 

248,025

 

 

 

70,121

 

 

 

584,793

 

 

 

81,227

 

 

Income tax expense (benefit)

 

 

64,608

 

 

 

(37,363

)

 

 

139,237

 

 

 

(26,532

)

 

Net income

 

$

183,417

 

 

$

107,484

 

 

$

445,556

 

 

$

107,759

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

1.86

 

 

$

1.08

 

 

$

4.50

 

 

$

1.09

 

 

Diluted

 

$

1.84

 

 

$

1.07

 

 

$

4.44

 

 

$

1.08

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used to compute earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

98,659

 

 

 

99,542

 

 

 

99,113

 

 

 

99,125

 

 

Diluted

 

 

99,486

 

 

 

100,247

 

 

 

100,296

 

 

 

100,013

 

 

Cash dividends paid per common share

 

$

0.26

 

 

$

0.21

 

 

$

0.74

 

 

$

0.63

 

 

AVNET, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

 

 

April 2,

 

July 3,

 

 

 

2022

 

2021

 

 

 

(Thousands)

 

ASSETS

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

199,457

 

$

199,691

 

Receivables

 

 

4,164,573

 

 

3,576,130

 

Inventories

 

 

3,680,821

 

 

3,236,837

 

Prepaid and other current assets

 

 

172,792

 

 

150,763

 

Total current assets

 

 

8,217,643

 

 

7,163,421

 

Property, plant and equipment, net

 

 

323,420

 

 

368,452

 

Goodwill

 

 

805,384

 

 

838,105

 

Intangible assets, net

 

 

15,975

 

 

28,539

 

Operating lease assets

 

 

245,149

 

 

265,988

 

Other assets

 

 

174,102

 

 

260,917

 

Total assets

 

$

9,781,673

 

$

8,925,422

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Short-term debt

 

$

424,182

 

$

23,078

 

Accounts payable

 

 

2,968,845

 

 

2,401,357

 

Accrued expenses and other

 

 

616,079

 

 

572,457

 

Short-term operating lease liabilities

 

 

56,682

 

 

58,346

 

Total current liabilities

 

 

4,065,788

 

 

3,055,238

 

Long-term debt

 

 

922,041

 

 

1,191,329

 

Long-term operating lease liabilities

 

 

216,609

 

 

239,838

 

Other liabilities

 

 

320,515

 

 

354,833

 

Total liabilities

 

 

5,524,953

 

 

4,841,238

 

Shareholders’ equity

 

 

4,256,720

 

 

4,084,184

 

Total liabilities and shareholders’ equity

 

$

9,781,673

 

$

8,925,422

 

AVNET, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

 

Nine Months Ended

 

 

 

April 2, 2022

 

April 3, 2021

 

 

 

(Thousands)

 

Cash flows from operating activities:

 

 

 

 

 

 

 

Net income

 

$

445,556

 

 

$

107,759

 

 

 

 

 

 

 

 

 

 

Non-cash and other reconciling items:

 

 

 

 

 

 

 

Depreciation

 

 

65,719

 

 

 

67,462

 

 

Amortization

 

 

12,034

 

 

 

35,730

 

 

Amortization of operating lease assets

 

 

40,298

 

 

 

42,054

 

 

Deferred income taxes

 

 

1,423

 

 

 

11,510

 

 

Stock-based compensation

 

 

28,638

 

 

 

22,293

 

 

Impairments

 

 

 

 

 

15,166

 

 

Other, net

 

 

47,667

 

 

 

7,558

 

 

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

 

 

 

 

 

 

 

Receivables

 

 

(880,957

)

 

 

(405,700

)

 

Inventories

 

 

(549,999

)

 

 

63,017

 

 

Accounts payable

 

 

628,822

 

 

 

224,151

 

 

Accrued expenses and other, net

 

 

141,381

 

 

 

6,526

 

 

Net cash flows (used) provided by operating activities

 

 

(19,418

)

 

 

197,526

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

Borrowings under accounts receivable securitization, net

 

 

57,400

 

 

 

 

 

Repayments under senior unsecured credit facility, net

 

 

 

 

 

(232,347

)

 

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

 

 

117,982

 

 

 

(2,192

)

 

Repurchases of common stock

 

 

(88,952

)

 

 

 

 

Dividends paid on common stock

 

 

(73,253

)

 

 

(62,400

)

 

Other, net

 

 

(16,853

)

 

 

(11,455

)

 

Net cash flows used for financing activities

 

 

(3,676

)

 

 

(308,394

)

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

Purchases of property, plant and equipment

 

 

(33,679

)

 

 

(39,001

)

 

Acquisitions of assets and businesses

 

 

 

 

 

(18,371

)

 

Proceeds from liquidation of Company owned life insurance policies

 

 

84,343

 

 

 

 

 

Other, net

 

 

724

 

 

 

6,201

 

 

Net cash flows provided (used) for investing activities

 

 

51,388

 

 

 

(51,171

)

 

Effect of currency exchange rate changes on cash and cash equivalents

 

 

(28,528

)

 

 

7,750

 

 

Cash and cash equivalents:

 

 

 

 

 

 

 

— decrease

 

 

(234

)

 

 

(154,289

)

 

— at beginning of period

 

 

199,691

 

 

 

477,038

 

 

— at end of period

 

$

199,457

 

 

$

322,749

 

 

Non-GAAP Financial Information

In addition to disclosing financial results that are determined in accordance with generally accepted accounting principles in the United States (“GAAP”), the Company also discloses certain non-GAAP financial information including (i) adjusted operating income, (ii) adjusted operating expenses, (iii) adjusted other income (expense), (iv) adjusted income before income taxes, (v) adjusted income tax expense (benefit), (vi) adjusted diluted earnings per share, and (vii) sales adjusted for the impact of significant acquisitions and other items (as defined in the Organic Sales section of this document).

There are also references to the impact of foreign currency in the discussion of the Company’s results of operations. When the U.S. Dollar strengthens and the stronger exchange rates of the current year are used to translate the results of operations of Avnet’s subsidiaries denominated in foreign currencies, the resulting impact is a decrease in U.S. Dollars of reported results. Conversely, when the U.S. Dollar weakens and the weaker exchange rates of the current year are used to translate the results of operations of Avnet’s subsidiaries denominated in foreign currencies, the resulting impact is an increase in U.S. Dollars of reported results. In the discussion of the Company’s results of operations, results excluding this impact are referred to as “constant currency.” Management believes organic sales and sales in constant currency are useful measures for evaluating current period performance as compared with prior periods and for understanding underlying trends. In order to determine the translation impact of changes in foreign currency exchange rates on sales, income or expense items for subsidiaries reporting in currencies other than the U.S. Dollar, the Company adjusts the average exchange rates used in current periods to be consistent with the average exchange rates in effect during the comparative period.

Management believes that operating income and operating expenses adjusted for restructuring, integration and other expenses, Russian-Ukraine conflict related expenses, goodwill and intangible asset impairment expenses and amortization of acquired intangible assets and other, are useful measures to help investors better assess and understand the Company’s operating performance. This is especially the case 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 or non-cash in nature. Management analyzes operating income and operating expenses without the impact of these items as an indicator of ongoing margin performance and underlying trends in the business. Management also uses these non-GAAP measures to establish operational goals and, in most cases, for measuring performance for compensation purposes. Management measures operating income for its reportable segments excluding restructuring, integration and other expenses, Russian-Ukraine conflict related expenses, goodwill and intangible asset impairment expenses and amortization of acquired intangible assets and other.

Additional non-GAAP metrics management uses is adjusted operating income margin, which is defined as adjusted operating income (as defined above) divided by sales.

Management also believes income tax expense (benefit), net income and diluted earnings (loss) per share adjusted for the impact of the items described above and certain items impacting other income (expense) and income tax expense (benefit) are useful to investors because they provide a measure of the Company’s net profitability on a more comparable basis to historical periods and provide a more meaningful basis for forecasting future performance. Adjustments to income tax expense (benefit) and the effective income tax rate include the effect of changes in tax laws, certain changes in valuation allowances and unrecognized tax benefits, income tax audit settlements and adjustments to the adjusted interim effective tax rate based upon the expected annual adjusted effective tax rate. Additionally, because of management’s focus on generating shareholder value, of which net profitability is a primary driver, management believes net income (loss) and diluted earnings (loss) per share excluding the impact of these items provides an important measure of the Company’s net profitability for the investing public.

Any analysis of results and outlook on a non-GAAP basis should be used as a complement to, and in conjunction with, results presented in accordance with GAAP.

 

 

 

Fiscal

 

Quarters Ended

 

 

 

Year to Date

 

April 2,

 

January 1,

 

October 2,

 

 

 

2022*

 

2022*

 

2022*

 

2021*

 

 

 

($ in thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP selling, general and administrative expenses

 

 

$

1,499,904

 

 

$

512,364

 

 

$

501,363

 

 

 

486,178

 

Amortization of intangible assets and other

 

 

 

(12,109

)

 

 

(3,074

)

 

 

(3,796

)

 

 

(5,239

)

Adjusted operating expenses

 

 

 

1,487,795

 

 

 

509,290

 

 

 

497,567

 

 

 

480,939

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP operating income

 

 

$

654,323

 

 

$

274,408

 

 

$

211,672

 

 

 

168,243

 

Restructuring, integration and other expenses

 

 

 

5,272

 

 

 

-

 

 

 

-

 

 

 

5,272

 

Russian-Ukraine conflict related expenses

 

 

 

26,261

 

 

 

26,261

 

 

 

-

 

 

 

-

 

Amortization of intangible assets and other

 

 

 

12,109

 

 

 

3,074

 

 

 

3,796

 

 

 

5,239

 

Adjusted operating income

 

 

 

697,965

 

 

 

303,743

 

 

 

215,468

 

 

 

178,754

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP income before income taxes

 

 

$

584,793

 

 

$

248,025

 

 

$

191,779

 

 

 

144,990

 

Restructuring, integration and other expenses

 

 

 

5,272

 

 

 

-

 

 

 

-

 

 

 

5,272

 

Russian-Ukraine conflict related expenses

 

 

 

26,261

 

 

 

26,261

 

 

 

-

 

 

 

-

 

Amortization of intangible assets and other

 

 

 

12,109

 

 

 

3,074

 

 

 

3,796

 

 

 

5,239

 

Other expenses

 

 

 

441

 

 

 

-

 

 

 

-

 

 

 

441

 

Adjusted income before income taxes

 

 

 

628,876

 

 

 

277,360

 

 

 

195,575

 

 

 

155,942

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP income tax expense

 

 

$

139,237

 

 

$

64,608

 

 

$

40,958

 

 

 

33,672

 

Restructuring, integration and other expenses

 

 

 

1,012

 

 

 

-

 

 

 

-

 

 

 

1,012

 

Russian-Ukraine conflict related expenses

 

 

 

6,836

 

 

 

6,836

 

 

 

-

 

 

 

-

 

Amortization of intangible assets and other

 

 

 

2,369

 

 

 

667

 

 

 

704

 

 

 

998

 

Other expenses

 

 

 

136

 

 

 

-

 

 

 

-

 

 

 

136

 

Income tax (expense) benefit items, net

 

 

 

(8,766

)

 

 

(8,613

)

 

 

2,917

 

 

 

(3,070

)

Adjusted income tax expense

 

 

 

140,824

 

 

 

63,498

 

 

 

44,579

 

 

 

32,748

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP net income

 

 

$

445,556

 

 

$

183,417

 

 

$

150,821

 

 

 

111,318

 

Restructuring, integration and other expenses (net of tax)

 

 

 

4,260

 

 

 

-

 

 

 

-

 

 

 

4,260

 

Russian-Ukraine conflict related expenses (net of tax)

 

 

 

19,425

 

 

 

19,425

 

 

 

-

 

 

 

-

 

Amortization of intangible assets and other (net of tax)

 

 

 

9,740

 

 

 

2,407

 

 

 

3,092

 

 

 

4,241

 

Other expenses (net of tax)

 

 

 

305

 

 

 

-

 

 

 

-

 

 

 

305

 

Income tax expense (benefit) items, net

 

 

 

8,766

 

 

 

8,613

 

 

 

(2,917

)

 

 

3,070

 

Adjusted net income

 

 

 

488,052

 

 

 

213,862

 

 

 

150,996

 

 

 

123,194

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP diluted earnings per share

 

 

$

4.44

 

 

$

1.84

 

 

$

1.50

 

 

 

1.10

 

Restructuring, integration and other expenses (net of tax)

 

 

 

0.04

 

 

 

-

 

 

 

-

 

 

 

0.04

 

Russian-Ukraine conflict related expenses (net of tax)

 

 

 

0.19

 

 

 

0.20

 

 

 

-

 

 

 

-

 

Amortization of intangible assets and other (net of tax)

 

 

 

0.10

 

 

 

0.02

 

 

 

0.03

 

 

 

0.04

 

Other expenses (net of tax)

 

 

 

0.00

 

 

 

-

 

 

 

-

 

 

 

0.00

 

Income tax expense (benefit) items, net

 

 

 

0.09

 

 

 

0.09

 

 

 

(0.03

)

 

 

0.03

 

Adjusted diluted EPS

 

 

 

4.87

 

 

 

2.15

 

 

 

1.51

 

 

 

1.22

_________________

* May not foot/cross foot due to rounding.

 

 

 

Quarters Ended

 

Fiscal Year

 

July 3,

 

April 3,

 

January 2,

 

October 3,

 

2021*

 

2021

 

 

2021

 

 

2021

 

 

2020

 

 

($ in thousands, except per share amounts)

GAAP selling, general and administrative expenses

$

1,874,831

 

 

$

498,497

 

 

$

463,092

 

 

$

442,084

 

 

$

471,158

 

Amortization of intangible assets and other

 

(41,245

)

 

 

(5,370

)

 

 

(5,283

)

 

 

(10,417

)

 

 

(20,175

)

Adjusted operating expenses

 

1,833,586

 

 

 

493,127

 

 

 

457,809

 

 

 

431,667

 

 

 

450,983

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP operating income

$

281,408

 

 

$

118,001

 

 

$

87,684

 

 

$

57,221

 

 

$

18,502

 

Restructuring, integration and other expenses

 

84,391

 

 

 

28,449

 

 

 

17,574

 

 

 

11,948

 

 

 

26,420

 

Amortization of intangible assets and other

 

41,245

 

 

 

5,370

 

 

 

5,283

 

 

 

10,417

 

 

 

20,175

 

Adjusted operating income

 

407,044

 

 

 

151,820

 

 

 

110,541

 

 

 

79,586

 

 

 

65,097

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP income (loss) before income taxes

$

172,929

 

 

$

91,701

 

 

$

70,121

 

 

$

34,403

 

 

$

(23,297

)

Restructuring, integration and other expenses

 

84,391

 

 

 

28,449

 

 

 

17,574

 

 

 

11,948

 

 

 

26,420

 

Amortization of intangible assets and other

 

41,245

 

 

 

5,370

 

 

 

5,283

 

 

 

10,417

 

 

 

20,175

 

Other expenses - equity investment impairments and other

 

20,413

 

 

 

5,139

 

 

 

-

 

 

 

51

 

 

 

15,223

 

Adjusted income before income taxes

 

318,978

 

 

 

130,659

 

 

 

92,978

 

 

 

56,819

 

 

 

38,521

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP income tax expense (benefit)

$

(20,185

)

 

$

6,346

 

 

$

(37,363

)

 

$

15,240

 

 

$

(4,408

)

Restructuring, integration and other expenses

 

17,468

 

 

 

6,172

 

 

 

4,118

 

 

 

2,577

 

 

 

4,601

 

Amortization of intangible assets and other

 

9,099

 

 

 

1,025

 

 

 

1,008

 

 

 

2,037

 

 

 

5,029

 

Other expenses - equity investment impairments and other

 

90

 

 

 

38

 

 

 

-

 

 

 

26

 

 

 

26

 

Income tax benefit (expense) items, net

 

41,275

 

 

 

4,091

 

 

 

50,682

 

 

 

(10,788

)

 

 

(2,710

)

Adjusted income tax expense

 

47,747

 

 

 

17,672

 

 

 

18,445

 

 

 

9,092

 

 

 

2,538

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP net income (loss)

$

193,114

 

 

$

85,355

 

 

$

107,484

 

 

$

19,163

 

 

$

(18,889

)

Restructuring, integration and other expenses (net of tax)

 

66,923

 

 

 

22,277

 

 

 

13,456

 

 

 

9,371

 

 

 

21,819

 

Amortization of intangible assets and other (net of tax)

 

32,146

 

 

 

4,345

 

 

 

4,275

 

 

 

8,380

 

 

 

15,146

 

Other expenses - equity investment impairments and other (net of tax)

 

20,323

 

 

 

5,101

 

 

 

-

 

 

 

25

 

 

 

15,197

 

Income tax (benefit) expense items, net

 

(41,275

)

 

 

(4,091

)

 

 

(50,682

)

 

 

10,788

 

 

 

2,710

 

Adjusted net income

 

271,231

 

 

 

112,987

 

 

 

74,533

 

 

 

47,727

 

 

 

35,983

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP diluted earnings (loss) per share

$

1.93

 

 

$

0.85

 

 

$

1.07

 

 

$

0.19

 

 

$

(0.19

)

Restructuring, integration and other expenses (net of tax)

 

0.67

 

 

 

0.22

 

 

 

0.13

 

 

 

0.09

 

 

 

0.22

 

Amortization of intangible assets and other (net of tax)

 

0.32

 

 

 

0.04

 

 

 

0.04

 

 

 

0.09

 

 

 

0.15

 

Other expenses - equity investment impairments and other (net of tax)

 

0.20

 

 

 

0.05

 

 

 

-

 

 

 

0.00

 

 

 

0.15

 

Income tax (benefit) expense items, net

 

(0.41

)

 

 

(0.04

)

 

 

(0.50

)

 

 

0.11

 

 

 

0.03

 

Adjusted diluted EPS

 

2.71

 

 

 

1.12

 

 

 

0.74

 

 

 

0.48

 

 

 

0.36

 

_________________

* May not foot/cross foot due to rounding and differences in average diluted shares between quarterly periods compared to the fiscal year to date.

Organic Sales

Organic sales is defined as sales adjusted for the impact of significant acquisitions, divestitures and other items by adjusting Avnet’s prior and current periods (if necessary) to include the sales of acquired businesses and exclude the sales of divested businesses as if the acquisitions and divestitures had occurred at the beginning of the earliest period presented. Additionally, fiscal 2021 sales are adjusted for the estimated impact of the extra week of sales in the first quarter of fiscal 2021 due to the 14-week fiscal first quarter and the 53-week fiscal year. Organic sales in constant currency is defined as organic sales (as defined above) excluding the impact of changes in foreign currency exchange rates.

As a result of declining sales due to the termination of the TI distribution agreement in December 2020, organic sales growth rates have also been adjusted to exclude sales of TI products.

Reported sales were the same as organic sales for the third quarter and first nine months of fiscal 2022. The following table presents the reconciliation of reported sales to organic sales for the third quarter and first nine months of fiscal 2021.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended

 

Nine Months Ended

 

 

Sales

 

 

 

 

 

Organic

 

 

 

 

Estimated

 

 

 

 

 

 

 

Organic

 

 

As Reported

 

 

 

 

Sales

 

Sales

 

Extra

 

Organic

 

 

 

Sales

 

 

and Organic

 

TI Sales

 

 

Adj for TI

 

As Reported

 

Week in

 

Sales

 

TI Sales

 

Adj for TI

 

 

Q3-Fiscal

 

Q3-Fiscal

 

 

Q3-Fiscal

 

Q3-Fiscal

 

Fiscal

 

Q3-Fiscal

 

Q3-Fiscal

 

Q3-Fiscal

 

 

2021

 

2021(1)

 

 

2021(1)

 

2021

 

2021(2)

 

2021

 

2021(1)

 

2021(1)

 

 

(in millions)

Avnet

 

$

4,916.7

 

$

1.7

 

 

$

4,915.0

 

$

14,307.9

 

$

306.0

 

$

14,001.9

 

$

292.2

 

$

13,709.7

Avnet by region

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Americas

 

$

1,161.0

 

$

0.4

 

 

$

1,160.6

 

$

3,468.1

 

$

77.0

 

$

3,391.1

 

$

82.9

 

$

3,308.2

EMEA

 

 

1,585.6

 

 

0.5

 

 

 

1,585.1

 

 

4,412.6

 

 

97.0

 

 

4,315.6

 

 

124.2

 

 

4,191.4

Asia

 

 

2,170.1

 

 

0.8

 

 

 

2,169.3

 

 

6,427.2

 

 

132.0

 

 

6,295.2

 

 

85.1

 

 

6,210.1

Avnet by segment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EC

 

$

4,520.6

 

$

1.7

 

 

$

4,518.9

 

$

13,245.1

 

$

284.0

 

$

12,961.1

 

$

292.2

 

$

12,668.9

Farnell

 

 

396.1

 

 

 

 

 

396.1

 

 

1,062.8

 

 

22.0

 

 

1,040.8

 

 

 

 

1,040.8

_________________

(1)

Sales adjusted for the impact of the termination of the TI distribution contract.

(2)

The impact of the additional week of sales in the first quarter of fiscal 2021 is estimated.

The following table presents reported and organic sales growth rates for the third quarter and first nine months of fiscal 2022 compared to fiscal 2021.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended

 

Nine Months Ended

 

 

 

 

 

 

 

Organic

 

 

 

 

 

 

 

 

 

 

 

Organic

 

 

 

 

 

Sales

 

Sales

 

 

 

 

Sales

 

 

 

 

Organic

 

Sales

 

 

 

 

 

As Reported

 

Adj for TI

 

 

 

 

As Reported

 

 

 

 

Sales

 

Adj for TI

 

 

Sales

 

Year-Year %

 

Year-Year %

 

Sales

 

Year-Year %

 

Organic

 

Year-Year %

 

Year-Year %

 

 

As Reported

 

Change in

 

Change in

 

As Reported

 

Change in

 

Sales

 

Change in

 

Change in

 

 

Year-Year

 

Constant

 

Constant

 

Year-Year

 

Constant

 

Year-Year

 

Constant

 

Constant

 

 

% Change

 

Currency

 

Currency(1)

 

% Change

 

Currency

 

% Change

 

Currency

 

Currency(1)

Avnet

 

32.0

%

 

35.7

%

 

35.7

%

 

25.4

%

 

26.9

%

 

28.1

%

 

29.6

%

 

32.4

%

Avnet by region

 

 

 

 

 

 

 

 

 

 

 

 

Americas

 

40.2

%

 

40.2

%

 

40.2

%

 

23.3

%

 

23.3

%

 

26.1

%

 

26.1

%

 

29.3

%

EMEA

 

37.9

 

 

47.6

 

 

47.7

 

 

30.9

 

 

35.0

 

 

33.8

 

 

38.0

 

 

42.1

 

Asia

 

23.3

 

 

24.5

 

 

24.5

 

 

22.7

 

 

23.3

 

 

25.3

 

 

25.9

 

 

27.6

 

Avnet by segment

 

 

 

 

 

 

 

 

 

 

 

 

EC

 

33.2

%

 

36.9

%

 

36.9

%

 

25.1

%

 

26.7

%

 

27.9

%

 

29.5

%

 

32.5

%

Farnell

 

18.4

 

 

21.8

 

 

21.8

 

 

28.4

 

 

28.6

 

 

31.2

 

 

31.3

 

 

31.3

 

________________

(1)

Sales growth rates excluding the impact of the termination of the TI distribution agreement.

Historical Segment Financial Information

 

 

 

 

 

Fiscal 2022

 

 

 

 

Quarters Ended

 

 

Fiscal

 

Third Quarter

 

Second Quarter

 

First Quarter

 

 

Year to Date

 

April 2,

 

January 1,

 

October 2,

 

 

2022*

 

2022*

 

2022

 

 

2021

 

 

 

(in millions)

Sales:

 

 

 

 

 

 

 

 

 

 

 

 

Electronic Components

 

$

16,572.9

 

 

$

6,019.1

 

 

$

5,424.3

 

 

$

5,129.5

 

Farnell

 

 

1,365.1

 

 

 

469.0

 

 

 

440.9

 

 

 

455.2

 

Avnet sales

 

$

17,938.1

 

 

$

6,488.1

 

 

$

5,865.2

 

 

$

5,584.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income:

 

 

 

 

 

 

 

 

 

 

 

 

Electronic Components

 

$

616.4

 

 

$

265.0

 

 

$

188.9

 

 

$

162.4

 

Farnell

 

 

179.6

 

 

 

69.8

 

 

 

60.2

 

 

 

49.6

 

 

 

 

796.0

 

 

 

334.8

 

 

 

249.1

 

 

 

212.0

 

Corporate expenses

 

 

(98.0

)

 

 

(31.1

)

 

 

(33.6

)

 

 

(33.3

)

Restructuring, integration and other expenses

 

 

(5.3

)

 

 

-

 

 

 

-

 

 

 

(5.3

)

Russian-Ukraine conflict related expenses

 

 

(26.3

)

 

 

(26.3

)

 

 

-

 

 

 

-

 

Amortization of acquired intangible assets and other

 

 

(12.1

)

 

 

(3.1

)

 

 

(3.8

)

 

 

(5.2

)

Avnet operating income

 

$

654.3

 

 

$

274.4

 

 

$

211.7

 

 

$

168.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales by geographic area:

 

 

 

 

 

 

 

 

 

 

 

 

Americas

 

$

4,277.6

 

 

$

1,627.2

 

 

$

1,391.5

 

 

$

1,258.8

 

EMEA

 

 

5,774.1

 

 

 

2,185.7

 

 

 

1,840.8

 

 

 

1,747.6

 

Asia

 

 

7,886.4

 

 

 

2,675.2

 

 

 

2,632.9

 

 

 

2,578.3

 

Avnet sales

 

$

17,938.1

 

 

$

6,488.1

 

 

$

5,865.2

 

 

$

5,584.7

 

____________

* May not foot/cross foot due to rounding.

 

 

 

 

Fiscal Year 2021

 

 

 

 

Quarters Ended

 

 

 

 

Fourth Quarter

 

Third Quarter

 

Second Quarter

 

First Quarter

 

 

Fiscal Year

 

July 3,

 

April 3,

 

January 2,

 

October 3,

 

 

2021*

 

2021

 

 

2021

 

 

2021

 

 

2020

 

 

 

(in millions)

Sales:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Electronic Components

 

$

18,030.5

 

 

$

4,785.3

 

 

$

4,520.6

 

 

$

4,342.4

 

 

$

4,382.2

 

Farnell

 

 

1,504.2

 

 

 

441.4

 

 

 

396.1

 

 

 

325.8

 

 

 

340.9

 

Avnet

 

$

19,534.7

 

 

$

5,226.7

 

 

$

4,916.7

 

 

$

4,668.2

 

 

$

4,723.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Electronic Components

 

$

454.8

 

 

$

147.8

 

 

$

118.6

 

 

$

103.9

 

 

$

84.4

 

Farnell

 

 

86.9

 

 

 

36.5

 

 

 

23.9

 

 

 

14.6

 

 

 

12.0

 

 

 

 

541.7

 

 

 

184.3

 

 

 

142.5

 

 

 

118.5

 

 

 

96.4

 

Corporate expenses

 

 

(134.7

)

 

 

(32.5

)

 

 

(31.9

)

 

 

(39.0

)

 

 

(31.3

)

Restructuring, integration and other expenses

 

 

(84.4

)

 

 

(28.4

)

 

 

(17.6

)

 

 

(11.9

)

 

 

(26.4

)

Amortization of acquired intangible assets and other

 

 

(41.2

)

 

 

(5.4

)

 

 

(5.3

)

 

 

(10.4

)

 

 

(20.2

)

Avnet operating income

 

$

281.4

 

 

$

118.0

 

 

$

87.7

 

 

$

57.2

 

 

$

18.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales by geographic area:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Americas

 

$

4,662.5

 

 

$

1,194.4

 

 

$

1,161.0

 

 

$

1,101.5

 

 

$

1,205.7

 

EMEA

 

 

6,149.9

 

 

 

1,737.3

 

 

 

1,585.6

 

 

 

1,346.3

 

 

 

1,480.7

 

Asia

 

 

8,722.3

 

 

 

2,295.0

 

 

 

2,170.1

 

 

 

2,220.4

 

 

 

2,036.7

 

Avnet

 

$

19,534.7

 

 

$

5,226.7

 

 

$

4,916.7

 

 

$

4,668.2

 

 

$

4,723.1

 

_____________

* May not foot/cross foot due to rounding.

Guidance Reconciliation

The following table presents the reconciliation of non-GAAP adjusted diluted earnings per share guidance to the expected GAAP diluted earnings per share guidance for the fourth quarter of fiscal 2022.

 

 

Low End of

 

High End of

 

 

 

Guidance Range

 

Guidance Range

 

Adjusted diluted earnings per share guidance

 

$

1.90

 

 

$

2.00

 

 

Amortization of intangibles and other (net of tax)

 

 

(0.02

)

 

 

(0.03

)

 

Income tax expense adjustments

 

 

0.45

 

 

 

0.35

 

 

GAAP diluted earnings per share guidance

 

$

2.33

 

 

$

2.32

 

 

 

Investor Relations Contacts
Joe Burke, 480-643-7431
Joseph.Burke@avnet.com

Media Relations Contact
Jeanne Forbis, 480-643-7499
Jeanne.Forbis@Avnet.com

Source: Avnet