Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil Hydroworld Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Avnet Reports Fourth Quarter and Fiscal 2023 Financial Results By: Avnet via Business Wire August 16, 2023 at 16:05 PM EDT Fiscal year 2023 sales of $26.5 billion and record diluted EPS of $8.26 Fourth quarter sales of $6.6 billion exceeded guidance Electronic components fourth quarter operating income margin of 5.1% Avnet, Inc. (Nasdaq: AVT) today announced results for its fourth quarter and fiscal year ended July 1, 2023. Commenting on the Company’s financial results, Avnet Chief Executive Officer Phil Gallagher stated, “Our strong financial results in fiscal 2023 demonstrate the dedication and commitment of our employees in driving profitable growth. With the breadth of our supplier line card, our diversified customer base and the strength of the end markets they serve, we are well-positioned to capitalize on the industry growth expected over the next several years. Although we can’t control near-term market conditions, our team will continue to focus on executing well in the market.” Fiscal Fourth Quarter Key Financial Highlights: Sales of $6.6 billion up 2.9% year over year from $6.4 billion. On a constant currency basis, sales increased 2.9% year over year. Diluted earnings per share of $1.68, compared with $2.51 in the prior year quarter. Adjusted diluted earnings per share of $2.06, compared with $2.07 in the prior year quarter. Higher interest expense negatively impacted year-over-year adjusted diluted earnings per share by $0.39. Operating income margin of 4.3%, decreased 14 basis points year over year. Adjusted operating income margin of 4.8%, increased 26 basis points year over year. Year-over-year adjusted operating income grew three times greater than sales. Electronic Components operating income margin of 5.1%, increased 77 basis points year over year. Farnell operating income margin of 8.1% decreased 90 basis points sequentially. Generated $234.5 million of cash flow from operations during the quarter. Returned $26.5 million to shareholders in dividends during the quarter. Fiscal 2023 Key Financial Highlights: Sales of $26.5 billion up 9.2% year over year from $24.3 billion. On a constant currency basis, sales increased 13.4% year over year. Diluted earnings per share of $8.26, compared with $6.94 in the prior year. Adjusted diluted earnings per share of $8.06, compared with $6.93 in the prior year. Higher interest expense negatively impacted year over year adjusted diluted earnings per share by $1.24. Operating income margin of 4.5%, increased 61 basis points year over year. Adjusted operating income margin of 4.6%, increased 55 basis points year over year. Year-over-year adjusted operating income grew more than 2.5 times greater than sales. Electronic Components operating income margin of 4.8%, increased 89 basis points year over year. Farnell operating income margin of 9.5% decreased 388 basis points year over year. Returned $106 million to shareholders in dividends during the fiscal year. Returned $213 million to shareholders in the fiscal year from share repurchases, representing 5.3% of outstanding shares. Key Financial Metrics ($ in millions, except per share data) Fourth Quarter Results (GAAP) Jun – 23 Jun – 22 Change Y/Y Mar – 23 Change Q/Q Sales $ 6,554.6 $ 6,372.7 2.9 % $ 6,514.6 0.6 % Operating Income $ 283.7 $ 284.7 (0.4 )% $ 313.6 (9.6 )% Operating Income Margin 4.3 % 4.5 % (14 )bps 4.8 % (48 )bps Diluted Earnings Per Share (EPS) $ 1.68 $ 2.51 (33.1 )% $ 2.03 (17.2 )% Fourth Quarter Results (Non-GAAP)(1) Jun – 23 Jun – 22 Change Y/Y Mar – 23 Change Q/Q Adjusted Operating Income $ 312.6 $ 287.6 8.7 % $ 314.5 (0.6 )% Adjusted Operating Income Margin 4.8 % 4.5 % 26 bps 4.8 % (6 )bps Adjusted Diluted Earnings Per Share (EPS) $ 2.06 $ 2.07 (0.5 )% $ 2.00 3.0 % Segment and Geographical Mix Jun – 23 Jun – 22 Change Y/Y Mar – 23 Change Q/Q Electronic Components (EC) Sales $ 6,109.2 $ 5,930.4 3.0 % $ 6,059.6 0.8 % EC Operating Income Margin 5.1 % 4.3 % 77 bps 5.0 % 4 bps Farnell Sales $ 445.4 $ 442.3 0.7 % $ 455.0 (2.1 )% Farnell Operating Income Margin 8.1 % 14.2 % (614 )bps 9.0 % (90 )bps Americas Sales $ 1,732.7 $ 1,618.4 7.1 % $ 1,714.9 1.0 % EMEA Sales $ 2,450.6 $ 2,064.0 18.7 % $ 2,393.4 2.4 % Asia Sales $ 2,371.3 $ 2,690.3 (11.9 )% $ 2,406.3 (1.5 )% _______________ (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 First Quarter of Fiscal 2024 Ending on September 30, 2023 Guidance Range Midpoint Sales $6.15B – $6.45B $6.30B Adjusted Diluted EPS $1.45 – $1.55 $1.50 The above guidance is based upon current market conditions and implies a sequential growth rate range of down 2% to down 6% and assumes a mix shift in sales to Asia from the Western regions. The above guidance also excludes restructuring, integration and other expenses, amortization of intangibles, gains on legal settlements and certain income tax adjustments. The above guidance assumes similar interest expense to the fourth quarter and an effective tax rate of between 22% and 26%. The above guidance assumes 93 million average diluted shares outstanding and average currency exchange rates as shown in the table below: Q1 Fiscal 2024 Q4 Fiscal Q1 Fiscal Guidance 2023 2023 Euro to U.S. Dollar $1.10 $1.09 $1.01 GBP to U.S. Dollar $1.28 $1.25 $1.18 Today’s Conference Call and Webcast Details Avnet will host a conference call and webcast today at 1:30 p.m. PT / 4:30 p.m. ET to discuss its financial results, provide a business update and answer questions. Live conference call: 877-407-8112 (domestic) or 201-689-8840 (international) Conference call replay available through August 23, 2023: 877-660-6853 or 201-612-7415 and using Conference ID: 13740210 Live and archived webcast can be accessed via Avnet’s Investor Relations web page at: https://ir.avnet.com 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 2, 2022 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; competitive pressures among distributors of electronic components; an industry down-cycle in semiconductors, including supply shortages; relationships with key suppliers and allocations of products by suppliers, including increased non-cancellable/non-returnable orders; accounts receivable defaults; risks relating to the Company’s international sales and operations, including risks relating to repatriating cash, foreign currency fluctuations, inflation, duties and taxes, sanctions and trade restrictions, 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, terrorist attacks, natural and weather-related disasters, pandemics and health-related crises, warehouse modernization, and relocation efforts; risks related to cyber security attacks, other privacy and security incidents, and information systems failures, including related to current or future implementations, integrations, and 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. 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 more than a century. 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) Fourth Quarters Ended Years Ended July 1, July 2, July 1, July 2, 2023 2022 2023 2022 (Thousands, except per share data) Sales $ 6,554,608 $ 6,372,653 $ 26,536,881 $ 24,310,708 Cost of sales 5,736,586 5,593,022 23,354,738 21,345,317 Gross profit 818,022 779,631 3,182,143 2,965,391 Selling, general and administrative expenses 506,322 494,943 1,967,305 1,994,847 Russian-Ukraine conflict related expenses — — — 26,261 Restructuring, integration and other expenses 28,038 — 28,038 5,272 Operating income 283,662 284,688 1,186,800 939,011 Other income (expense), net 6,456 (6,160 ) 9,908 (5,302 ) Interest and other financing expenses, net (75,056 ) (29,987 ) (250,869 ) (100,375 ) Gain on legal settlements and other (24,669 ) — 37,037 — Income before taxes 190,393 248,541 982,876 833,334 Income tax expense 35,138 1,718 212,048 140,955 Net income $ 155,255 $ 246,823 $ 770,828 $ 692,379 Earnings per share: Basic $ 1.70 $ 2.54 $ 8.37 $ 7.02 Diluted $ 1.68 $ 2.51 $ 8.26 $ 6.94 Shares used to compute earnings per share: Basic 91,493 97,309 92,043 98,662 Diluted 92,626 98,387 93,368 99,819 Cash dividends paid per common share $ 0.29 $ 0.26 $ 1.16 $ 1.00 AVNET, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) July 1, July 2, 2023 2022 (Thousands) ASSETS Current assets: Cash and cash equivalents $ 288,230 $ 153,693 Receivables 4,763,788 4,301,002 Inventories 5,465,031 4,244,148 Prepaid and other current assets 233,804 177,783 Total current assets 10,750,853 8,876,626 Property, plant and equipment, net 441,557 315,204 Goodwill 780,629 758,833 Operating lease assets 221,698 227,138 Other assets 282,422 210,731 Total assets $ 12,477,159 $ 10,388,532 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Short-term debt $ 70,636 $ 174,422 Accounts payable 3,373,820 3,431,683 Accrued expenses and other 753,130 591,020 Short-term operating lease liabilities 51,792 54,529 Total current liabilities 4,249,378 4,251,654 Long-term debt 2,988,029 1,437,400 Long-term operating lease liabilities 190,621 199,418 Other liabilities 297,462 307,300 Total liabilities 7,725,490 6,195,772 Shareholders’ equity 4,751,669 4,192,760 Total liabilities and shareholders’ equity $ 12,477,159 $ 10,388,532 AVNET, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Years Ended July 1, 2023 July 2, 2022 (Thousands) Cash flows from operating activities: Net income $ 770,828 $ 692,379 Non-cash and other reconciling items: Depreciation 82,565 87,367 Amortization 6,048 14,959 Amortization of operating lease assets 54,392 52,881 Deferred income taxes (37,060 ) (52,513 ) Stock-based compensation 38,781 36,738 Other, net 52,142 34,116 Changes in (net of effects from businesses acquired and divested): Receivables (461,117 ) (1,132,039 ) Inventories (1,173,124 ) (1,218,871 ) Accounts payable (75,943 ) 1,131,225 Accrued expenses and other, net 28,785 134,448 Net cash flows used for operating activities (713,703 ) (219,310 ) Cash flows from financing activities: Issuance of notes, net of discounts 498,615 299,973 Repayments of public notes — (354,336 ) Borrowings under accounts receivable securitization, net 258,000 274,900 Borrowings under senior unsecured credit facility, net 728,182 — Borrowings (repayments) under bank credit facilities and other debt, net (96,209 ) 235,047 Repurchases of common stock (221,730 ) (184,382 ) Dividends paid on common stock (106,325 ) (98,490 ) Other, net (5,777 ) (16,653 ) Net cash flows provided by financing activities 1,054,756 156,059 Cash flows from investing activities: Purchases of property, plant and equipment (194,674 ) (48,900 ) Proceeds from liquidation of Company owned life insurance policies — 90,384 Other, net (16,877 ) 9,815 Net cash flows (used for) provided by investing activities (211,551 ) 51,299 Effect of currency exchange rate changes on cash and cash equivalents 5,035 (34,046 ) Cash and cash equivalents: — increase (decrease) 134,537 (45,998 ) — at beginning of period 153,693 199,691 — at end of period $ 288,230 $ 153,693 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), and (vi) adjusted diluted earnings per share. 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 sales in constant currency is a useful measure 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 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 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 per share adjusted for the impact of the items described above, gain on legal settlements and other, 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 and diluted earnings 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. Quarters Ended Fiscal Year July 1, April 1, December 31, October 1, 2023* 2023* 2023 2022 2022 ($ in thousands, except per share amounts) GAAP selling, general and administrative expenses $ 1,967,305 $ 506,322 $ 498,219 $ 485,127 $ 477,636 Amortization of intangible assets and other (6,053 ) (878 ) (876 ) (1,541 ) (2,759 ) Adjusted operating expenses 1,961,252 505,444 497,343 483,586 474,877 GAAP operating income $ 1,186,800 $ 283,662 $ 313,629 $ 298,973 $ 290,537 Restructuring, integration and other expenses 28,038 28,038 — — — Amortization of intangible assets and other 6,053 878 876 1,541 2,759 Adjusted operating income 1,220,891 312,578 314,505 300,514 293,296 GAAP income before income taxes $ 982,876 $ 190,393 $ 243,587 $ 303,134 $ 245,762 Restructuring, integration and other expenses 28,038 28,038 — — — Amortization of intangible assets and other 6,053 878 876 1,541 2,759 Gain on legal settlements and other (37,037 ) 24,669 — (61,705 ) — Adjusted income before income taxes 979,931 243,978 244,463 242,970 248,521 GAAP income tax expense $ 212,048 $ 35,138 $ 56,161 $ 59,248 $ 61,501 Restructuring, integration and other expenses 6,007 6,007 — — — Amortization of intangible assets and other 1,360 207 203 345 605 Gain on legal settlements and other (8,711 ) 5,828 — (14,539 ) — Income tax expense items, net 16,453 5,583 3,529 12,287 (4,946 ) Adjusted income tax expense 227,157 52,763 59,893 57,341 57,160 GAAP net income $ 770,828 $ 155,255 $ 187,426 $ 243,886 $ 184,261 Restructuring, integration and other expenses (net of tax) 22,031 22,031 — — — Amortization of intangible assets and other (net of tax) 4,693 671 673 1,196 2,154 Gain on legal settlements and other (net of tax) (28,326 ) 18,841 — (47,166 ) — Income tax expense items, net (16,453 ) (5,583 ) (3,529 ) (12,287 ) 4,946 Adjusted net income 752,774 191,215 184,570 185,629 191,361 GAAP diluted earnings per share $ 8.26 $ 1.68 $ 2.03 $ 2.63 $ 1.93 Restructuring, integration and other expenses (net of tax) 0.24 0.24 — — �� Amortization of intangible assets and other (net of tax) 0.05 0.01 0.01 0.01 0.02 Gain on legal settlements and other (net of tax) (0.31 ) 0.20 — (0.51 ) — Income tax expense items, net (0.18 ) (0.06 ) (0.04 ) (0.13 ) 0.05 Adjusted diluted EPS 8.06 2.06 2.00 2.00 2.00 _______________ * May not foot/cross foot due to rounding. Quarters Ended Fiscal Year July 2, April 2, January 1, October 2, 2022* 2022* 2022* 2022* 2021* ($ in thousands, except per share amounts) GAAP selling, general and administrative expenses $ 1,994,847 $ 494,943 $ 512,364 $ 501,363 $ 486,178 Amortization of intangible assets and other (15,038 ) (2,929 ) (3,074 ) (3,796 ) (5,239 ) Adjusted operating expenses 1,979,809 492,014 509,290 497,567 480,939 GAAP operating income $ 939,011 $ 284,688 $ 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 15,038 2,929 3,074 3,796 5,239 Adjusted operating income 985,582 287,617 303,743 215,468 178,754 GAAP income before income taxes $ 833,334 $ 248,541 $ 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 15,038 2,929 3,074 3,796 5,239 Other expenses 4,935 4,494 — — 441 Adjusted income before income taxes 884,840 255,964 277,360 195,575 155,942 GAAP income tax expense $ 140,955 $ 1,718 $ 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 3,080 711 667 704 998 Other expenses 1,092 956 — — 136 Income tax benefit (expense) items, net 40,376 49,142 (8,613 ) 2,917 (3,070 ) Adjusted income tax expense 193,351 52,527 63,498 44,579 32,748 GAAP net income $ 692,379 $ 246,823 $ 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) 11,958 2,218 2,407 3,092 4,241 Other expenses (net of tax) 3,843 3,538 — — 305 Income tax (benefit) expense items, net (40,376 ) (49,142 ) 8,613 (2,917 ) 3,070 Adjusted net income 691,489 203,437 213,862 150,996 123,194 GAAP diluted earnings per share $ 6.94 $ 2.51 $ 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) 0.12 0.02 0.02 0.03 0.04 Other expenses (net of tax) 0.04 0.04 — — 0.00 Income tax (benefit) expense items, net (0.40 ) (0.50 ) 0.09 (0.03 ) 0.03 Adjusted diluted EPS 6.93 2.07 2.15 1.51 1.22 _______________ * May not foot/cross foot due to rounding and differences in average diluted shares between quarterly periods compared to the fiscal year. Sales in Constant Currency The following table presents reported sales growth rates and sales growth rates in constant currency for the fourth quarter and full year of fiscal 2023 compared to the fourth quarter and full year of fiscal 2022. Quarter Ended Years Ended Sales Sales Year- Sales Year- Year % Sequential % Year % Sales Change in Sales Change in Sales Change in Year-Year Constant Sequential Constant Year-Year Constant % Change Currency % Change Currency % Change Currency Avnet 2.9 % 2.9 % 0.6 % 0.4 % 9.2 % 13.4 % Avnet by region Americas 7.1 % 7.1 % 1.0 % 1.0 % 15.5 % 15.5 % EMEA 18.7 17.1 2.4 1.0 17.8 27.0 Asia (11.9 ) (10.6 ) (1.5 ) (0.7 ) (0.7 ) 1.9 Avnet by segment EC 3.0 % 3.1 % 0.8 % 0.6 % 10.2 % 14.4 % Farnell 0.7 1.0 (2.1 ) (2.9 ) (4.0 ) 0.9 Historical Segment Financial Information Quarters Ended Fiscal Fourth Quarter Third Quarter Second Quarter First Quarter Year July 1, April 1, December 31, October 1, 2023* 2023 2023 2022 2022 (in millions) Sales: Electronic Components $ 24,802.6 $ 6,109.2 $ 6,059.6 $ 6,309.5 $ 6,324.2 Farnell 1,734.3 445.4 455.0 408.0 425.9 Avnet sales $ 26,536.9 $ 6,554.6 $ 6,514.6 $ 6,717.5 $ 6,750.1 Operating income: Electronic Components $ 1,179.6 $ 310.4 $ 305.2 $ 296.7 $ 267.3 Farnell 165.5 36.1 40.9 36.9 51.6 1,345.1 346.5 346.1 333.6 318.9 Corporate expenses (124.2 ) (33.9 ) (31.6 ) (33.1 ) (25.6 ) Restructuring, integration and other expenses (28.0 ) (28.0 ) — — — Amortization of acquired intangible assets and other (6.1 ) (0.9 ) (0.9 ) (1.5 ) (2.8 ) Avnet operating income $ 1,186.8 $ 283.7 $ 313.6 $ 299.0 $ 290.5 Sales by geographic area: Americas $ 6,807.7 $ 1,732.7 $ 1,714.9 $ 1,681.2 $ 1,678.9 EMEA 9,229.4 2,450.6 2,393.4 2,255.9 2,129.5 Asia 10,499.8 2,371.3 2,406.3 2,780.4 2,941.7 Avnet sales $ 26,536.9 $ 6,554.6 $ 6,514.6 $ 6,717.5 $ 6,750.1 _______________ * May not foot/cross foot due to rounding. Fiscal Year 2022 Quarters Ended Fourth Quarter Third Quarter Second Quarter First Quarter Fiscal Year July 2, April 2, January 1, October 2, 2022* 2022* 2022 2022 2021 (in millions) Sales: Electronic Components $ 22,503.3 $ 5,930.4 $ 6,019.1 $ 5,424.3 $ 5,129.5 Farnell 1,807.4 442.3 469.0 440.9 455.2 Avnet sales $ 24,310.7 $ 6,372.7 $ 6,488.1 $ 5,865.2 $ 5,584.7 Operating income: Electronic Components $ 872.0 $ 255.6 $ 265.0 $ 188.9 $ 162.4 Farnell 242.5 62.9 69.8 60.2 49.6 1,114.5 318.5 334.8 249.1 212.0 Corporate expenses (128.9 ) (30.9 ) (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 (15.0 ) (2.9 ) (3.1 ) (3.8 ) (5.2 ) Avnet operating income $ 939.0 $ 284.7 $ 274.4 $ 211.7 $ 168.2 Sales by geographic area: Americas $ 5,896.0 $ 1,618.4 $ 1,627.2 $ 1,391.5 $ 1,258.8 EMEA 7,838.1 2,064.0 2,185.7 1,840.8 1,747.6 Asia 10,576.6 2,690.3 2,675.2 2,632.9 2,578.3 Avnet sales $ 24,310.7 $ 6,372.7 $ 6,488.1 $ 5,865.2 $ 5,584.7 _______________ * May not foot/cross foot due to rounding. Guidance Reconciliation There are no significant differences expected between the above adjusted diluted earnings per share guidance and GAAP diluted earnings per share guidance for the first quarter of fiscal 2024. View source version on businesswire.com: https://www.businesswire.com/news/home/20230816920216/en/Contacts Investor Relations Contact InvestorRelations@Avnet.com Media Relations Contact Jeanne Forbis, 480-643-7499 Jeanne.Forbis@Avnet.com Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
Avnet Reports Fourth Quarter and Fiscal 2023 Financial Results By: Avnet via Business Wire August 16, 2023 at 16:05 PM EDT Fiscal year 2023 sales of $26.5 billion and record diluted EPS of $8.26 Fourth quarter sales of $6.6 billion exceeded guidance Electronic components fourth quarter operating income margin of 5.1% Avnet, Inc. (Nasdaq: AVT) today announced results for its fourth quarter and fiscal year ended July 1, 2023. Commenting on the Company’s financial results, Avnet Chief Executive Officer Phil Gallagher stated, “Our strong financial results in fiscal 2023 demonstrate the dedication and commitment of our employees in driving profitable growth. With the breadth of our supplier line card, our diversified customer base and the strength of the end markets they serve, we are well-positioned to capitalize on the industry growth expected over the next several years. Although we can’t control near-term market conditions, our team will continue to focus on executing well in the market.” Fiscal Fourth Quarter Key Financial Highlights: Sales of $6.6 billion up 2.9% year over year from $6.4 billion. On a constant currency basis, sales increased 2.9% year over year. Diluted earnings per share of $1.68, compared with $2.51 in the prior year quarter. Adjusted diluted earnings per share of $2.06, compared with $2.07 in the prior year quarter. Higher interest expense negatively impacted year-over-year adjusted diluted earnings per share by $0.39. Operating income margin of 4.3%, decreased 14 basis points year over year. Adjusted operating income margin of 4.8%, increased 26 basis points year over year. Year-over-year adjusted operating income grew three times greater than sales. Electronic Components operating income margin of 5.1%, increased 77 basis points year over year. Farnell operating income margin of 8.1% decreased 90 basis points sequentially. Generated $234.5 million of cash flow from operations during the quarter. Returned $26.5 million to shareholders in dividends during the quarter. Fiscal 2023 Key Financial Highlights: Sales of $26.5 billion up 9.2% year over year from $24.3 billion. On a constant currency basis, sales increased 13.4% year over year. Diluted earnings per share of $8.26, compared with $6.94 in the prior year. Adjusted diluted earnings per share of $8.06, compared with $6.93 in the prior year. Higher interest expense negatively impacted year over year adjusted diluted earnings per share by $1.24. Operating income margin of 4.5%, increased 61 basis points year over year. Adjusted operating income margin of 4.6%, increased 55 basis points year over year. Year-over-year adjusted operating income grew more than 2.5 times greater than sales. Electronic Components operating income margin of 4.8%, increased 89 basis points year over year. Farnell operating income margin of 9.5% decreased 388 basis points year over year. Returned $106 million to shareholders in dividends during the fiscal year. Returned $213 million to shareholders in the fiscal year from share repurchases, representing 5.3% of outstanding shares. Key Financial Metrics ($ in millions, except per share data) Fourth Quarter Results (GAAP) Jun – 23 Jun – 22 Change Y/Y Mar – 23 Change Q/Q Sales $ 6,554.6 $ 6,372.7 2.9 % $ 6,514.6 0.6 % Operating Income $ 283.7 $ 284.7 (0.4 )% $ 313.6 (9.6 )% Operating Income Margin 4.3 % 4.5 % (14 )bps 4.8 % (48 )bps Diluted Earnings Per Share (EPS) $ 1.68 $ 2.51 (33.1 )% $ 2.03 (17.2 )% Fourth Quarter Results (Non-GAAP)(1) Jun – 23 Jun – 22 Change Y/Y Mar – 23 Change Q/Q Adjusted Operating Income $ 312.6 $ 287.6 8.7 % $ 314.5 (0.6 )% Adjusted Operating Income Margin 4.8 % 4.5 % 26 bps 4.8 % (6 )bps Adjusted Diluted Earnings Per Share (EPS) $ 2.06 $ 2.07 (0.5 )% $ 2.00 3.0 % Segment and Geographical Mix Jun – 23 Jun – 22 Change Y/Y Mar – 23 Change Q/Q Electronic Components (EC) Sales $ 6,109.2 $ 5,930.4 3.0 % $ 6,059.6 0.8 % EC Operating Income Margin 5.1 % 4.3 % 77 bps 5.0 % 4 bps Farnell Sales $ 445.4 $ 442.3 0.7 % $ 455.0 (2.1 )% Farnell Operating Income Margin 8.1 % 14.2 % (614 )bps 9.0 % (90 )bps Americas Sales $ 1,732.7 $ 1,618.4 7.1 % $ 1,714.9 1.0 % EMEA Sales $ 2,450.6 $ 2,064.0 18.7 % $ 2,393.4 2.4 % Asia Sales $ 2,371.3 $ 2,690.3 (11.9 )% $ 2,406.3 (1.5 )% _______________ (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 First Quarter of Fiscal 2024 Ending on September 30, 2023 Guidance Range Midpoint Sales $6.15B – $6.45B $6.30B Adjusted Diluted EPS $1.45 – $1.55 $1.50 The above guidance is based upon current market conditions and implies a sequential growth rate range of down 2% to down 6% and assumes a mix shift in sales to Asia from the Western regions. The above guidance also excludes restructuring, integration and other expenses, amortization of intangibles, gains on legal settlements and certain income tax adjustments. The above guidance assumes similar interest expense to the fourth quarter and an effective tax rate of between 22% and 26%. The above guidance assumes 93 million average diluted shares outstanding and average currency exchange rates as shown in the table below: Q1 Fiscal 2024 Q4 Fiscal Q1 Fiscal Guidance 2023 2023 Euro to U.S. Dollar $1.10 $1.09 $1.01 GBP to U.S. Dollar $1.28 $1.25 $1.18 Today’s Conference Call and Webcast Details Avnet will host a conference call and webcast today at 1:30 p.m. PT / 4:30 p.m. ET to discuss its financial results, provide a business update and answer questions. Live conference call: 877-407-8112 (domestic) or 201-689-8840 (international) Conference call replay available through August 23, 2023: 877-660-6853 or 201-612-7415 and using Conference ID: 13740210 Live and archived webcast can be accessed via Avnet’s Investor Relations web page at: https://ir.avnet.com 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 2, 2022 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; competitive pressures among distributors of electronic components; an industry down-cycle in semiconductors, including supply shortages; relationships with key suppliers and allocations of products by suppliers, including increased non-cancellable/non-returnable orders; accounts receivable defaults; risks relating to the Company’s international sales and operations, including risks relating to repatriating cash, foreign currency fluctuations, inflation, duties and taxes, sanctions and trade restrictions, 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, terrorist attacks, natural and weather-related disasters, pandemics and health-related crises, warehouse modernization, and relocation efforts; risks related to cyber security attacks, other privacy and security incidents, and information systems failures, including related to current or future implementations, integrations, and 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. 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 more than a century. 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) Fourth Quarters Ended Years Ended July 1, July 2, July 1, July 2, 2023 2022 2023 2022 (Thousands, except per share data) Sales $ 6,554,608 $ 6,372,653 $ 26,536,881 $ 24,310,708 Cost of sales 5,736,586 5,593,022 23,354,738 21,345,317 Gross profit 818,022 779,631 3,182,143 2,965,391 Selling, general and administrative expenses 506,322 494,943 1,967,305 1,994,847 Russian-Ukraine conflict related expenses — — — 26,261 Restructuring, integration and other expenses 28,038 — 28,038 5,272 Operating income 283,662 284,688 1,186,800 939,011 Other income (expense), net 6,456 (6,160 ) 9,908 (5,302 ) Interest and other financing expenses, net (75,056 ) (29,987 ) (250,869 ) (100,375 ) Gain on legal settlements and other (24,669 ) — 37,037 — Income before taxes 190,393 248,541 982,876 833,334 Income tax expense 35,138 1,718 212,048 140,955 Net income $ 155,255 $ 246,823 $ 770,828 $ 692,379 Earnings per share: Basic $ 1.70 $ 2.54 $ 8.37 $ 7.02 Diluted $ 1.68 $ 2.51 $ 8.26 $ 6.94 Shares used to compute earnings per share: Basic 91,493 97,309 92,043 98,662 Diluted 92,626 98,387 93,368 99,819 Cash dividends paid per common share $ 0.29 $ 0.26 $ 1.16 $ 1.00 AVNET, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) July 1, July 2, 2023 2022 (Thousands) ASSETS Current assets: Cash and cash equivalents $ 288,230 $ 153,693 Receivables 4,763,788 4,301,002 Inventories 5,465,031 4,244,148 Prepaid and other current assets 233,804 177,783 Total current assets 10,750,853 8,876,626 Property, plant and equipment, net 441,557 315,204 Goodwill 780,629 758,833 Operating lease assets 221,698 227,138 Other assets 282,422 210,731 Total assets $ 12,477,159 $ 10,388,532 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Short-term debt $ 70,636 $ 174,422 Accounts payable 3,373,820 3,431,683 Accrued expenses and other 753,130 591,020 Short-term operating lease liabilities 51,792 54,529 Total current liabilities 4,249,378 4,251,654 Long-term debt 2,988,029 1,437,400 Long-term operating lease liabilities 190,621 199,418 Other liabilities 297,462 307,300 Total liabilities 7,725,490 6,195,772 Shareholders’ equity 4,751,669 4,192,760 Total liabilities and shareholders’ equity $ 12,477,159 $ 10,388,532 AVNET, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Years Ended July 1, 2023 July 2, 2022 (Thousands) Cash flows from operating activities: Net income $ 770,828 $ 692,379 Non-cash and other reconciling items: Depreciation 82,565 87,367 Amortization 6,048 14,959 Amortization of operating lease assets 54,392 52,881 Deferred income taxes (37,060 ) (52,513 ) Stock-based compensation 38,781 36,738 Other, net 52,142 34,116 Changes in (net of effects from businesses acquired and divested): Receivables (461,117 ) (1,132,039 ) Inventories (1,173,124 ) (1,218,871 ) Accounts payable (75,943 ) 1,131,225 Accrued expenses and other, net 28,785 134,448 Net cash flows used for operating activities (713,703 ) (219,310 ) Cash flows from financing activities: Issuance of notes, net of discounts 498,615 299,973 Repayments of public notes — (354,336 ) Borrowings under accounts receivable securitization, net 258,000 274,900 Borrowings under senior unsecured credit facility, net 728,182 — Borrowings (repayments) under bank credit facilities and other debt, net (96,209 ) 235,047 Repurchases of common stock (221,730 ) (184,382 ) Dividends paid on common stock (106,325 ) (98,490 ) Other, net (5,777 ) (16,653 ) Net cash flows provided by financing activities 1,054,756 156,059 Cash flows from investing activities: Purchases of property, plant and equipment (194,674 ) (48,900 ) Proceeds from liquidation of Company owned life insurance policies — 90,384 Other, net (16,877 ) 9,815 Net cash flows (used for) provided by investing activities (211,551 ) 51,299 Effect of currency exchange rate changes on cash and cash equivalents 5,035 (34,046 ) Cash and cash equivalents: — increase (decrease) 134,537 (45,998 ) — at beginning of period 153,693 199,691 — at end of period $ 288,230 $ 153,693 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), and (vi) adjusted diluted earnings per share. 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 sales in constant currency is a useful measure 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 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 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 per share adjusted for the impact of the items described above, gain on legal settlements and other, 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 and diluted earnings 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. Quarters Ended Fiscal Year July 1, April 1, December 31, October 1, 2023* 2023* 2023 2022 2022 ($ in thousands, except per share amounts) GAAP selling, general and administrative expenses $ 1,967,305 $ 506,322 $ 498,219 $ 485,127 $ 477,636 Amortization of intangible assets and other (6,053 ) (878 ) (876 ) (1,541 ) (2,759 ) Adjusted operating expenses 1,961,252 505,444 497,343 483,586 474,877 GAAP operating income $ 1,186,800 $ 283,662 $ 313,629 $ 298,973 $ 290,537 Restructuring, integration and other expenses 28,038 28,038 — — — Amortization of intangible assets and other 6,053 878 876 1,541 2,759 Adjusted operating income 1,220,891 312,578 314,505 300,514 293,296 GAAP income before income taxes $ 982,876 $ 190,393 $ 243,587 $ 303,134 $ 245,762 Restructuring, integration and other expenses 28,038 28,038 — — — Amortization of intangible assets and other 6,053 878 876 1,541 2,759 Gain on legal settlements and other (37,037 ) 24,669 — (61,705 ) — Adjusted income before income taxes 979,931 243,978 244,463 242,970 248,521 GAAP income tax expense $ 212,048 $ 35,138 $ 56,161 $ 59,248 $ 61,501 Restructuring, integration and other expenses 6,007 6,007 — — — Amortization of intangible assets and other 1,360 207 203 345 605 Gain on legal settlements and other (8,711 ) 5,828 — (14,539 ) — Income tax expense items, net 16,453 5,583 3,529 12,287 (4,946 ) Adjusted income tax expense 227,157 52,763 59,893 57,341 57,160 GAAP net income $ 770,828 $ 155,255 $ 187,426 $ 243,886 $ 184,261 Restructuring, integration and other expenses (net of tax) 22,031 22,031 — — — Amortization of intangible assets and other (net of tax) 4,693 671 673 1,196 2,154 Gain on legal settlements and other (net of tax) (28,326 ) 18,841 — (47,166 ) — Income tax expense items, net (16,453 ) (5,583 ) (3,529 ) (12,287 ) 4,946 Adjusted net income 752,774 191,215 184,570 185,629 191,361 GAAP diluted earnings per share $ 8.26 $ 1.68 $ 2.03 $ 2.63 $ 1.93 Restructuring, integration and other expenses (net of tax) 0.24 0.24 — — �� Amortization of intangible assets and other (net of tax) 0.05 0.01 0.01 0.01 0.02 Gain on legal settlements and other (net of tax) (0.31 ) 0.20 — (0.51 ) — Income tax expense items, net (0.18 ) (0.06 ) (0.04 ) (0.13 ) 0.05 Adjusted diluted EPS 8.06 2.06 2.00 2.00 2.00 _______________ * May not foot/cross foot due to rounding. Quarters Ended Fiscal Year July 2, April 2, January 1, October 2, 2022* 2022* 2022* 2022* 2021* ($ in thousands, except per share amounts) GAAP selling, general and administrative expenses $ 1,994,847 $ 494,943 $ 512,364 $ 501,363 $ 486,178 Amortization of intangible assets and other (15,038 ) (2,929 ) (3,074 ) (3,796 ) (5,239 ) Adjusted operating expenses 1,979,809 492,014 509,290 497,567 480,939 GAAP operating income $ 939,011 $ 284,688 $ 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 15,038 2,929 3,074 3,796 5,239 Adjusted operating income 985,582 287,617 303,743 215,468 178,754 GAAP income before income taxes $ 833,334 $ 248,541 $ 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 15,038 2,929 3,074 3,796 5,239 Other expenses 4,935 4,494 — — 441 Adjusted income before income taxes 884,840 255,964 277,360 195,575 155,942 GAAP income tax expense $ 140,955 $ 1,718 $ 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 3,080 711 667 704 998 Other expenses 1,092 956 — — 136 Income tax benefit (expense) items, net 40,376 49,142 (8,613 ) 2,917 (3,070 ) Adjusted income tax expense 193,351 52,527 63,498 44,579 32,748 GAAP net income $ 692,379 $ 246,823 $ 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) 11,958 2,218 2,407 3,092 4,241 Other expenses (net of tax) 3,843 3,538 — — 305 Income tax (benefit) expense items, net (40,376 ) (49,142 ) 8,613 (2,917 ) 3,070 Adjusted net income 691,489 203,437 213,862 150,996 123,194 GAAP diluted earnings per share $ 6.94 $ 2.51 $ 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) 0.12 0.02 0.02 0.03 0.04 Other expenses (net of tax) 0.04 0.04 — — 0.00 Income tax (benefit) expense items, net (0.40 ) (0.50 ) 0.09 (0.03 ) 0.03 Adjusted diluted EPS 6.93 2.07 2.15 1.51 1.22 _______________ * May not foot/cross foot due to rounding and differences in average diluted shares between quarterly periods compared to the fiscal year. Sales in Constant Currency The following table presents reported sales growth rates and sales growth rates in constant currency for the fourth quarter and full year of fiscal 2023 compared to the fourth quarter and full year of fiscal 2022. Quarter Ended Years Ended Sales Sales Year- Sales Year- Year % Sequential % Year % Sales Change in Sales Change in Sales Change in Year-Year Constant Sequential Constant Year-Year Constant % Change Currency % Change Currency % Change Currency Avnet 2.9 % 2.9 % 0.6 % 0.4 % 9.2 % 13.4 % Avnet by region Americas 7.1 % 7.1 % 1.0 % 1.0 % 15.5 % 15.5 % EMEA 18.7 17.1 2.4 1.0 17.8 27.0 Asia (11.9 ) (10.6 ) (1.5 ) (0.7 ) (0.7 ) 1.9 Avnet by segment EC 3.0 % 3.1 % 0.8 % 0.6 % 10.2 % 14.4 % Farnell 0.7 1.0 (2.1 ) (2.9 ) (4.0 ) 0.9 Historical Segment Financial Information Quarters Ended Fiscal Fourth Quarter Third Quarter Second Quarter First Quarter Year July 1, April 1, December 31, October 1, 2023* 2023 2023 2022 2022 (in millions) Sales: Electronic Components $ 24,802.6 $ 6,109.2 $ 6,059.6 $ 6,309.5 $ 6,324.2 Farnell 1,734.3 445.4 455.0 408.0 425.9 Avnet sales $ 26,536.9 $ 6,554.6 $ 6,514.6 $ 6,717.5 $ 6,750.1 Operating income: Electronic Components $ 1,179.6 $ 310.4 $ 305.2 $ 296.7 $ 267.3 Farnell 165.5 36.1 40.9 36.9 51.6 1,345.1 346.5 346.1 333.6 318.9 Corporate expenses (124.2 ) (33.9 ) (31.6 ) (33.1 ) (25.6 ) Restructuring, integration and other expenses (28.0 ) (28.0 ) — — — Amortization of acquired intangible assets and other (6.1 ) (0.9 ) (0.9 ) (1.5 ) (2.8 ) Avnet operating income $ 1,186.8 $ 283.7 $ 313.6 $ 299.0 $ 290.5 Sales by geographic area: Americas $ 6,807.7 $ 1,732.7 $ 1,714.9 $ 1,681.2 $ 1,678.9 EMEA 9,229.4 2,450.6 2,393.4 2,255.9 2,129.5 Asia 10,499.8 2,371.3 2,406.3 2,780.4 2,941.7 Avnet sales $ 26,536.9 $ 6,554.6 $ 6,514.6 $ 6,717.5 $ 6,750.1 _______________ * May not foot/cross foot due to rounding. Fiscal Year 2022 Quarters Ended Fourth Quarter Third Quarter Second Quarter First Quarter Fiscal Year July 2, April 2, January 1, October 2, 2022* 2022* 2022 2022 2021 (in millions) Sales: Electronic Components $ 22,503.3 $ 5,930.4 $ 6,019.1 $ 5,424.3 $ 5,129.5 Farnell 1,807.4 442.3 469.0 440.9 455.2 Avnet sales $ 24,310.7 $ 6,372.7 $ 6,488.1 $ 5,865.2 $ 5,584.7 Operating income: Electronic Components $ 872.0 $ 255.6 $ 265.0 $ 188.9 $ 162.4 Farnell 242.5 62.9 69.8 60.2 49.6 1,114.5 318.5 334.8 249.1 212.0 Corporate expenses (128.9 ) (30.9 ) (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 (15.0 ) (2.9 ) (3.1 ) (3.8 ) (5.2 ) Avnet operating income $ 939.0 $ 284.7 $ 274.4 $ 211.7 $ 168.2 Sales by geographic area: Americas $ 5,896.0 $ 1,618.4 $ 1,627.2 $ 1,391.5 $ 1,258.8 EMEA 7,838.1 2,064.0 2,185.7 1,840.8 1,747.6 Asia 10,576.6 2,690.3 2,675.2 2,632.9 2,578.3 Avnet sales $ 24,310.7 $ 6,372.7 $ 6,488.1 $ 5,865.2 $ 5,584.7 _______________ * May not foot/cross foot due to rounding. Guidance Reconciliation There are no significant differences expected between the above adjusted diluted earnings per share guidance and GAAP diluted earnings per share guidance for the first quarter of fiscal 2024. View source version on businesswire.com: https://www.businesswire.com/news/home/20230816920216/en/Contacts Investor Relations Contact InvestorRelations@Avnet.com Media Relations Contact Jeanne Forbis, 480-643-7499 Jeanne.Forbis@Avnet.com
Fiscal year 2023 sales of $26.5 billion and record diluted EPS of $8.26 Fourth quarter sales of $6.6 billion exceeded guidance Electronic components fourth quarter operating income margin of 5.1%
Avnet, Inc. (Nasdaq: AVT) today announced results for its fourth quarter and fiscal year ended July 1, 2023. Commenting on the Company’s financial results, Avnet Chief Executive Officer Phil Gallagher stated, “Our strong financial results in fiscal 2023 demonstrate the dedication and commitment of our employees in driving profitable growth. With the breadth of our supplier line card, our diversified customer base and the strength of the end markets they serve, we are well-positioned to capitalize on the industry growth expected over the next several years. Although we can’t control near-term market conditions, our team will continue to focus on executing well in the market.” Fiscal Fourth Quarter Key Financial Highlights: Sales of $6.6 billion up 2.9% year over year from $6.4 billion. On a constant currency basis, sales increased 2.9% year over year. Diluted earnings per share of $1.68, compared with $2.51 in the prior year quarter. Adjusted diluted earnings per share of $2.06, compared with $2.07 in the prior year quarter. Higher interest expense negatively impacted year-over-year adjusted diluted earnings per share by $0.39. Operating income margin of 4.3%, decreased 14 basis points year over year. Adjusted operating income margin of 4.8%, increased 26 basis points year over year. Year-over-year adjusted operating income grew three times greater than sales. Electronic Components operating income margin of 5.1%, increased 77 basis points year over year. Farnell operating income margin of 8.1% decreased 90 basis points sequentially. Generated $234.5 million of cash flow from operations during the quarter. Returned $26.5 million to shareholders in dividends during the quarter. Fiscal 2023 Key Financial Highlights: Sales of $26.5 billion up 9.2% year over year from $24.3 billion. On a constant currency basis, sales increased 13.4% year over year. Diluted earnings per share of $8.26, compared with $6.94 in the prior year. Adjusted diluted earnings per share of $8.06, compared with $6.93 in the prior year. Higher interest expense negatively impacted year over year adjusted diluted earnings per share by $1.24. Operating income margin of 4.5%, increased 61 basis points year over year. Adjusted operating income margin of 4.6%, increased 55 basis points year over year. Year-over-year adjusted operating income grew more than 2.5 times greater than sales. Electronic Components operating income margin of 4.8%, increased 89 basis points year over year. Farnell operating income margin of 9.5% decreased 388 basis points year over year. Returned $106 million to shareholders in dividends during the fiscal year. Returned $213 million to shareholders in the fiscal year from share repurchases, representing 5.3% of outstanding shares. Key Financial Metrics ($ in millions, except per share data) Fourth Quarter Results (GAAP) Jun – 23 Jun – 22 Change Y/Y Mar – 23 Change Q/Q Sales $ 6,554.6 $ 6,372.7 2.9 % $ 6,514.6 0.6 % Operating Income $ 283.7 $ 284.7 (0.4 )% $ 313.6 (9.6 )% Operating Income Margin 4.3 % 4.5 % (14 )bps 4.8 % (48 )bps Diluted Earnings Per Share (EPS) $ 1.68 $ 2.51 (33.1 )% $ 2.03 (17.2 )% Fourth Quarter Results (Non-GAAP)(1) Jun – 23 Jun – 22 Change Y/Y Mar – 23 Change Q/Q Adjusted Operating Income $ 312.6 $ 287.6 8.7 % $ 314.5 (0.6 )% Adjusted Operating Income Margin 4.8 % 4.5 % 26 bps 4.8 % (6 )bps Adjusted Diluted Earnings Per Share (EPS) $ 2.06 $ 2.07 (0.5 )% $ 2.00 3.0 % Segment and Geographical Mix Jun – 23 Jun – 22 Change Y/Y Mar – 23 Change Q/Q Electronic Components (EC) Sales $ 6,109.2 $ 5,930.4 3.0 % $ 6,059.6 0.8 % EC Operating Income Margin 5.1 % 4.3 % 77 bps 5.0 % 4 bps Farnell Sales $ 445.4 $ 442.3 0.7 % $ 455.0 (2.1 )% Farnell Operating Income Margin 8.1 % 14.2 % (614 )bps 9.0 % (90 )bps Americas Sales $ 1,732.7 $ 1,618.4 7.1 % $ 1,714.9 1.0 % EMEA Sales $ 2,450.6 $ 2,064.0 18.7 % $ 2,393.4 2.4 % Asia Sales $ 2,371.3 $ 2,690.3 (11.9 )% $ 2,406.3 (1.5 )% _______________ (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 First Quarter of Fiscal 2024 Ending on September 30, 2023 Guidance Range Midpoint Sales $6.15B – $6.45B $6.30B Adjusted Diluted EPS $1.45 – $1.55 $1.50 The above guidance is based upon current market conditions and implies a sequential growth rate range of down 2% to down 6% and assumes a mix shift in sales to Asia from the Western regions. The above guidance also excludes restructuring, integration and other expenses, amortization of intangibles, gains on legal settlements and certain income tax adjustments. The above guidance assumes similar interest expense to the fourth quarter and an effective tax rate of between 22% and 26%. The above guidance assumes 93 million average diluted shares outstanding and average currency exchange rates as shown in the table below: Q1 Fiscal 2024 Q4 Fiscal Q1 Fiscal Guidance 2023 2023 Euro to U.S. Dollar $1.10 $1.09 $1.01 GBP to U.S. Dollar $1.28 $1.25 $1.18 Today’s Conference Call and Webcast Details Avnet will host a conference call and webcast today at 1:30 p.m. PT / 4:30 p.m. ET to discuss its financial results, provide a business update and answer questions. Live conference call: 877-407-8112 (domestic) or 201-689-8840 (international) Conference call replay available through August 23, 2023: 877-660-6853 or 201-612-7415 and using Conference ID: 13740210 Live and archived webcast can be accessed via Avnet’s Investor Relations web page at: https://ir.avnet.com 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 2, 2022 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; competitive pressures among distributors of electronic components; an industry down-cycle in semiconductors, including supply shortages; relationships with key suppliers and allocations of products by suppliers, including increased non-cancellable/non-returnable orders; accounts receivable defaults; risks relating to the Company’s international sales and operations, including risks relating to repatriating cash, foreign currency fluctuations, inflation, duties and taxes, sanctions and trade restrictions, 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, terrorist attacks, natural and weather-related disasters, pandemics and health-related crises, warehouse modernization, and relocation efforts; risks related to cyber security attacks, other privacy and security incidents, and information systems failures, including related to current or future implementations, integrations, and 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. 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 more than a century. 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) Fourth Quarters Ended Years Ended July 1, July 2, July 1, July 2, 2023 2022 2023 2022 (Thousands, except per share data) Sales $ 6,554,608 $ 6,372,653 $ 26,536,881 $ 24,310,708 Cost of sales 5,736,586 5,593,022 23,354,738 21,345,317 Gross profit 818,022 779,631 3,182,143 2,965,391 Selling, general and administrative expenses 506,322 494,943 1,967,305 1,994,847 Russian-Ukraine conflict related expenses — — — 26,261 Restructuring, integration and other expenses 28,038 — 28,038 5,272 Operating income 283,662 284,688 1,186,800 939,011 Other income (expense), net 6,456 (6,160 ) 9,908 (5,302 ) Interest and other financing expenses, net (75,056 ) (29,987 ) (250,869 ) (100,375 ) Gain on legal settlements and other (24,669 ) — 37,037 — Income before taxes 190,393 248,541 982,876 833,334 Income tax expense 35,138 1,718 212,048 140,955 Net income $ 155,255 $ 246,823 $ 770,828 $ 692,379 Earnings per share: Basic $ 1.70 $ 2.54 $ 8.37 $ 7.02 Diluted $ 1.68 $ 2.51 $ 8.26 $ 6.94 Shares used to compute earnings per share: Basic 91,493 97,309 92,043 98,662 Diluted 92,626 98,387 93,368 99,819 Cash dividends paid per common share $ 0.29 $ 0.26 $ 1.16 $ 1.00 AVNET, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) July 1, July 2, 2023 2022 (Thousands) ASSETS Current assets: Cash and cash equivalents $ 288,230 $ 153,693 Receivables 4,763,788 4,301,002 Inventories 5,465,031 4,244,148 Prepaid and other current assets 233,804 177,783 Total current assets 10,750,853 8,876,626 Property, plant and equipment, net 441,557 315,204 Goodwill 780,629 758,833 Operating lease assets 221,698 227,138 Other assets 282,422 210,731 Total assets $ 12,477,159 $ 10,388,532 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Short-term debt $ 70,636 $ 174,422 Accounts payable 3,373,820 3,431,683 Accrued expenses and other 753,130 591,020 Short-term operating lease liabilities 51,792 54,529 Total current liabilities 4,249,378 4,251,654 Long-term debt 2,988,029 1,437,400 Long-term operating lease liabilities 190,621 199,418 Other liabilities 297,462 307,300 Total liabilities 7,725,490 6,195,772 Shareholders’ equity 4,751,669 4,192,760 Total liabilities and shareholders’ equity $ 12,477,159 $ 10,388,532 AVNET, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Years Ended July 1, 2023 July 2, 2022 (Thousands) Cash flows from operating activities: Net income $ 770,828 $ 692,379 Non-cash and other reconciling items: Depreciation 82,565 87,367 Amortization 6,048 14,959 Amortization of operating lease assets 54,392 52,881 Deferred income taxes (37,060 ) (52,513 ) Stock-based compensation 38,781 36,738 Other, net 52,142 34,116 Changes in (net of effects from businesses acquired and divested): Receivables (461,117 ) (1,132,039 ) Inventories (1,173,124 ) (1,218,871 ) Accounts payable (75,943 ) 1,131,225 Accrued expenses and other, net 28,785 134,448 Net cash flows used for operating activities (713,703 ) (219,310 ) Cash flows from financing activities: Issuance of notes, net of discounts 498,615 299,973 Repayments of public notes — (354,336 ) Borrowings under accounts receivable securitization, net 258,000 274,900 Borrowings under senior unsecured credit facility, net 728,182 — Borrowings (repayments) under bank credit facilities and other debt, net (96,209 ) 235,047 Repurchases of common stock (221,730 ) (184,382 ) Dividends paid on common stock (106,325 ) (98,490 ) Other, net (5,777 ) (16,653 ) Net cash flows provided by financing activities 1,054,756 156,059 Cash flows from investing activities: Purchases of property, plant and equipment (194,674 ) (48,900 ) Proceeds from liquidation of Company owned life insurance policies — 90,384 Other, net (16,877 ) 9,815 Net cash flows (used for) provided by investing activities (211,551 ) 51,299 Effect of currency exchange rate changes on cash and cash equivalents 5,035 (34,046 ) Cash and cash equivalents: — increase (decrease) 134,537 (45,998 ) — at beginning of period 153,693 199,691 — at end of period $ 288,230 $ 153,693 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), and (vi) adjusted diluted earnings per share. 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 sales in constant currency is a useful measure 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 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 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 per share adjusted for the impact of the items described above, gain on legal settlements and other, 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 and diluted earnings 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. Quarters Ended Fiscal Year July 1, April 1, December 31, October 1, 2023* 2023* 2023 2022 2022 ($ in thousands, except per share amounts) GAAP selling, general and administrative expenses $ 1,967,305 $ 506,322 $ 498,219 $ 485,127 $ 477,636 Amortization of intangible assets and other (6,053 ) (878 ) (876 ) (1,541 ) (2,759 ) Adjusted operating expenses 1,961,252 505,444 497,343 483,586 474,877 GAAP operating income $ 1,186,800 $ 283,662 $ 313,629 $ 298,973 $ 290,537 Restructuring, integration and other expenses 28,038 28,038 — — — Amortization of intangible assets and other 6,053 878 876 1,541 2,759 Adjusted operating income 1,220,891 312,578 314,505 300,514 293,296 GAAP income before income taxes $ 982,876 $ 190,393 $ 243,587 $ 303,134 $ 245,762 Restructuring, integration and other expenses 28,038 28,038 — — — Amortization of intangible assets and other 6,053 878 876 1,541 2,759 Gain on legal settlements and other (37,037 ) 24,669 — (61,705 ) — Adjusted income before income taxes 979,931 243,978 244,463 242,970 248,521 GAAP income tax expense $ 212,048 $ 35,138 $ 56,161 $ 59,248 $ 61,501 Restructuring, integration and other expenses 6,007 6,007 — — — Amortization of intangible assets and other 1,360 207 203 345 605 Gain on legal settlements and other (8,711 ) 5,828 — (14,539 ) — Income tax expense items, net 16,453 5,583 3,529 12,287 (4,946 ) Adjusted income tax expense 227,157 52,763 59,893 57,341 57,160 GAAP net income $ 770,828 $ 155,255 $ 187,426 $ 243,886 $ 184,261 Restructuring, integration and other expenses (net of tax) 22,031 22,031 — — — Amortization of intangible assets and other (net of tax) 4,693 671 673 1,196 2,154 Gain on legal settlements and other (net of tax) (28,326 ) 18,841 — (47,166 ) — Income tax expense items, net (16,453 ) (5,583 ) (3,529 ) (12,287 ) 4,946 Adjusted net income 752,774 191,215 184,570 185,629 191,361 GAAP diluted earnings per share $ 8.26 $ 1.68 $ 2.03 $ 2.63 $ 1.93 Restructuring, integration and other expenses (net of tax) 0.24 0.24 — — �� Amortization of intangible assets and other (net of tax) 0.05 0.01 0.01 0.01 0.02 Gain on legal settlements and other (net of tax) (0.31 ) 0.20 — (0.51 ) — Income tax expense items, net (0.18 ) (0.06 ) (0.04 ) (0.13 ) 0.05 Adjusted diluted EPS 8.06 2.06 2.00 2.00 2.00 _______________ * May not foot/cross foot due to rounding. Quarters Ended Fiscal Year July 2, April 2, January 1, October 2, 2022* 2022* 2022* 2022* 2021* ($ in thousands, except per share amounts) GAAP selling, general and administrative expenses $ 1,994,847 $ 494,943 $ 512,364 $ 501,363 $ 486,178 Amortization of intangible assets and other (15,038 ) (2,929 ) (3,074 ) (3,796 ) (5,239 ) Adjusted operating expenses 1,979,809 492,014 509,290 497,567 480,939 GAAP operating income $ 939,011 $ 284,688 $ 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 15,038 2,929 3,074 3,796 5,239 Adjusted operating income 985,582 287,617 303,743 215,468 178,754 GAAP income before income taxes $ 833,334 $ 248,541 $ 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 15,038 2,929 3,074 3,796 5,239 Other expenses 4,935 4,494 — — 441 Adjusted income before income taxes 884,840 255,964 277,360 195,575 155,942 GAAP income tax expense $ 140,955 $ 1,718 $ 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 3,080 711 667 704 998 Other expenses 1,092 956 — — 136 Income tax benefit (expense) items, net 40,376 49,142 (8,613 ) 2,917 (3,070 ) Adjusted income tax expense 193,351 52,527 63,498 44,579 32,748 GAAP net income $ 692,379 $ 246,823 $ 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) 11,958 2,218 2,407 3,092 4,241 Other expenses (net of tax) 3,843 3,538 — — 305 Income tax (benefit) expense items, net (40,376 ) (49,142 ) 8,613 (2,917 ) 3,070 Adjusted net income 691,489 203,437 213,862 150,996 123,194 GAAP diluted earnings per share $ 6.94 $ 2.51 $ 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) 0.12 0.02 0.02 0.03 0.04 Other expenses (net of tax) 0.04 0.04 — — 0.00 Income tax (benefit) expense items, net (0.40 ) (0.50 ) 0.09 (0.03 ) 0.03 Adjusted diluted EPS 6.93 2.07 2.15 1.51 1.22 _______________ * May not foot/cross foot due to rounding and differences in average diluted shares between quarterly periods compared to the fiscal year. Sales in Constant Currency The following table presents reported sales growth rates and sales growth rates in constant currency for the fourth quarter and full year of fiscal 2023 compared to the fourth quarter and full year of fiscal 2022. Quarter Ended Years Ended Sales Sales Year- Sales Year- Year % Sequential % Year % Sales Change in Sales Change in Sales Change in Year-Year Constant Sequential Constant Year-Year Constant % Change Currency % Change Currency % Change Currency Avnet 2.9 % 2.9 % 0.6 % 0.4 % 9.2 % 13.4 % Avnet by region Americas 7.1 % 7.1 % 1.0 % 1.0 % 15.5 % 15.5 % EMEA 18.7 17.1 2.4 1.0 17.8 27.0 Asia (11.9 ) (10.6 ) (1.5 ) (0.7 ) (0.7 ) 1.9 Avnet by segment EC 3.0 % 3.1 % 0.8 % 0.6 % 10.2 % 14.4 % Farnell 0.7 1.0 (2.1 ) (2.9 ) (4.0 ) 0.9 Historical Segment Financial Information Quarters Ended Fiscal Fourth Quarter Third Quarter Second Quarter First Quarter Year July 1, April 1, December 31, October 1, 2023* 2023 2023 2022 2022 (in millions) Sales: Electronic Components $ 24,802.6 $ 6,109.2 $ 6,059.6 $ 6,309.5 $ 6,324.2 Farnell 1,734.3 445.4 455.0 408.0 425.9 Avnet sales $ 26,536.9 $ 6,554.6 $ 6,514.6 $ 6,717.5 $ 6,750.1 Operating income: Electronic Components $ 1,179.6 $ 310.4 $ 305.2 $ 296.7 $ 267.3 Farnell 165.5 36.1 40.9 36.9 51.6 1,345.1 346.5 346.1 333.6 318.9 Corporate expenses (124.2 ) (33.9 ) (31.6 ) (33.1 ) (25.6 ) Restructuring, integration and other expenses (28.0 ) (28.0 ) — — — Amortization of acquired intangible assets and other (6.1 ) (0.9 ) (0.9 ) (1.5 ) (2.8 ) Avnet operating income $ 1,186.8 $ 283.7 $ 313.6 $ 299.0 $ 290.5 Sales by geographic area: Americas $ 6,807.7 $ 1,732.7 $ 1,714.9 $ 1,681.2 $ 1,678.9 EMEA 9,229.4 2,450.6 2,393.4 2,255.9 2,129.5 Asia 10,499.8 2,371.3 2,406.3 2,780.4 2,941.7 Avnet sales $ 26,536.9 $ 6,554.6 $ 6,514.6 $ 6,717.5 $ 6,750.1 _______________ * May not foot/cross foot due to rounding. Fiscal Year 2022 Quarters Ended Fourth Quarter Third Quarter Second Quarter First Quarter Fiscal Year July 2, April 2, January 1, October 2, 2022* 2022* 2022 2022 2021 (in millions) Sales: Electronic Components $ 22,503.3 $ 5,930.4 $ 6,019.1 $ 5,424.3 $ 5,129.5 Farnell 1,807.4 442.3 469.0 440.9 455.2 Avnet sales $ 24,310.7 $ 6,372.7 $ 6,488.1 $ 5,865.2 $ 5,584.7 Operating income: Electronic Components $ 872.0 $ 255.6 $ 265.0 $ 188.9 $ 162.4 Farnell 242.5 62.9 69.8 60.2 49.6 1,114.5 318.5 334.8 249.1 212.0 Corporate expenses (128.9 ) (30.9 ) (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 (15.0 ) (2.9 ) (3.1 ) (3.8 ) (5.2 ) Avnet operating income $ 939.0 $ 284.7 $ 274.4 $ 211.7 $ 168.2 Sales by geographic area: Americas $ 5,896.0 $ 1,618.4 $ 1,627.2 $ 1,391.5 $ 1,258.8 EMEA 7,838.1 2,064.0 2,185.7 1,840.8 1,747.6 Asia 10,576.6 2,690.3 2,675.2 2,632.9 2,578.3 Avnet sales $ 24,310.7 $ 6,372.7 $ 6,488.1 $ 5,865.2 $ 5,584.7 _______________ * May not foot/cross foot due to rounding. Guidance Reconciliation There are no significant differences expected between the above adjusted diluted earnings per share guidance and GAAP diluted earnings per share guidance for the first quarter of fiscal 2024. View source version on businesswire.com: https://www.businesswire.com/news/home/20230816920216/en/
Investor Relations Contact InvestorRelations@Avnet.com Media Relations Contact Jeanne Forbis, 480-643-7499 Jeanne.Forbis@Avnet.com