First quarter sales of $5.6 billion and diluted
EPS of $0.66
Adjusted diluted EPS of $0.92
Cash flow from operations of $838 million over
past four quarters
Avnet, Inc. (Nasdaq: AVT) today announced results for its first
quarter ended September 28, 2024.
“In the first quarter, our sales and earnings exceeded the upper
end of our guidance range led by a return to growth in our Asia
region. We continue to focus on improving the performance of our
Farnell business and remain committed to improving its operating
model and profitability,” said Avnet Chief Executive Officer Phil
Gallagher. “Despite uneven market conditions, our team continues to
operate effectively, and I want to thank them for their execution
and for maintaining collaborative relationships with our customers
and suppliers. Their efforts position us well to capitalize on
profitable growth opportunities as the market recovers.”
Fiscal First Quarter Key Financial Highlights:
- Sales of $5.6 billion, compared with $6.3 billion in the prior
year quarter.
- Diluted earnings per share of $0.66, compared with $2.25 in the
prior year quarter.
- Adjusted diluted earnings per share of $0.92, compared with
$1.61 in the prior year quarter.
- Operating income margin of 2.5%, compared with 4.0% in the
prior year quarter.
- Adjusted operating income margin of 3.0%.
- Electronic Components operating income margin of 3.8%.
- Farnell operating income margin of 0.5%.
- Generated $106 million of cash flow from operations.
- Returned nearly $100 million to shareholders from share
repurchases, representing 2.1% of shares outstanding.
- Returned $29 million to shareholders in dividends.
Key Financial Metrics
($ in millions, except per share data)
First Quarter Results (GAAP)
Sep – 24
Sep – 23
Change Y/Y
Jun – 24
Change Q/Q
Sales
$
5,604.2
$
6,335.6
(11.6
)%
$
5,563.0
0.7
%
Operating Income
$
142.2
$
253.8
(44.0
)%
$
164.2
(13.4
)%
Operating Income Margin
2.5
%
4.0
%
(147
)bps
3.0
%
(41
)bps
Diluted Earnings Per Share (EPS)
$
0.66
$
2.25
(70.7
)%
$
0.91
(27.5
)%
First Quarter Results
(Non-GAAP)(1)
Sep – 24
Sep – 23
Change Y/Y
Jun – 24
Change Q/Q
Adjusted Operating Income
$
168.9
$
261.7
(35.4
)%
$
193.4
(12.7
)%
Adjusted Operating Income Margin
3.0
%
4.1
%
(112
)bps
3.5
%
(47
)bps
Adjusted Diluted Earnings Per Share
(EPS)
$
0.92
$
1.61
(42.9
)%
$
1.22
(24.6
)%
Segment and Geographical Mix
Sep – 24
Sep – 23
Change Y/Y
Jun – 24
Change Q/Q
Electronic Components (EC) Sales
$
5,257.1
$
5,914.4
(11.1
)%
$
5,187.8
1.3
%
EC Operating Income Margin
3.8
%
4.6
%
(86
)bps
4.1
%
(30
)bps
Farnell Sales
$
347.1
$
421.2
(17.6
)%
$
375.2
(7.5
)%
Farnell Operating Income Margin
0.5
%
4.2
%
(366
)bps
4.0
%
(349
)bps
Americas Sales
$
1,329.9
$
1,573.5
(15.5
)%
$
1,353.8
(1.8
)%
EMEA Sales
$
1,668.2
$
2,308.0
(27.7
)%
$
1,920.3
(13.1
)%
Asia Sales
$
2,606.1
$
2,454.1
6.2
%
$
2,288.9
13.9
%
____________________________
(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 Second Quarter of
Fiscal 2025 Ending on December 28, 2024
Guidance Range
Midpoint
Sales
$5.40B – $5.70B
$5.55B
Diluted EPS (1)
$0.80 – $0.90
$0.85
____________________________
(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 implies a sequential sales change of up
approximately 2% to down approximately 4%.
The above guidance also excludes restructuring, integration and
other expenses, foreign currency gains and losses, and certain
income tax adjustments. The above guidance assumes similar interest
expense to the first quarter of fiscal 2025 and an adjusted
effective tax rate of between 21% and 25%. The above guidance
assumes 89 million average diluted shares outstanding and average
currency exchange rates as shown in the table below:
Q2 Fiscal
2025
Q1 Fiscal
Q2 Fiscal
Guidance
2025
2024
Euro to U.S. Dollar
$1.09
$1.10
$1.08
GBP to U.S. Dollar
$1.30
$1.30
$1.24
Today’s Conference Call and Webcast Details
Avnet will host a conference call and webcast today at 9:00 a.m.
PT / Noon 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)
- Live webcast along with slides can be accessed via Avnet’s
Investor Relations website at https://ir.avnet.com
- An audio replay of the webcast will be available after the
completion of the call and archived on the website for one
year
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 June
29, 2024 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; relationships with key suppliers and
allocations of products by suppliers; 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. 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)
First Quarters Ended
September 28,
September 30,
2024
2023
(Thousands, except per share
data)
Sales
$
5,604,152
$
6,335,648
Cost of sales
4,996,785
5,587,542
Gross profit
607,367
748,106
Selling, general and administrative
expenses
438,791
487,286
Restructuring, integration, and other
expenses
26,351
7,051
Operating income
142,225
253,769
Other (expense) income, net
(3,043
)
5,960
Interest and other financing expenses,
net
(64,444
)
(70,796
)
Gain on legal settlements and other
—
86,499
Income before taxes
74,738
275,432
Income tax expense
15,782
66,164
Net income
$
58,956
$
209,268
Earnings per share:
Basic
$
0.67
$
2.29
Diluted
$
0.66
$
2.25
Shares used to compute earnings per
share:
Basic
88,092
91,495
Diluted
89,392
93,178
Cash dividends paid per common share
$
0.33
$
0.31
AVNET, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(UNAUDITED)
September 28,
June 29,
2024
2024
(Thousands)
ASSETS
Current assets:
Cash and cash equivalents
$
267,521
$
310,941
Receivables
4,575,854
4,391,187
Inventories
5,614,102
5,468,730
Prepaid and other current assets
221,767
199,694
Total current assets
10,679,244
10,370,552
Property, plant and equipment, net
584,119
568,169
Goodwill
818,858
780,984
Operating lease assets
211,736
208,971
Other assets
303,607
280,471
Total assets
$
12,597,564
$
12,209,147
LIABILITIES AND SHAREHOLDERS’
EQUITY
Current liabilities:
Short-term debt
$
524,055
$
492,711
Accounts payable
3,588,033
3,345,510
Accrued expenses and other
580,257
573,055
Short-term operating lease liabilities
55,538
53,993
Total current liabilities
4,747,883
4,465,269
Long-term debt
2,430,730
2,406,629
Long-term operating lease liabilities
175,330
173,886
Other liabilities
205,886
237,859
Total liabilities
7,559,829
7,283,643
Shareholders’ equity
5,037,735
4,925,504
Total liabilities and shareholders’
equity
$
12,597,564
$
12,209,147
AVNET, INC.
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(UNAUDITED)
First Quarters Ended
September 28,
September 30,
2024
2023
(Thousands)
Cash flows from operating activities:
Net income
$
58,956
$
209,268
Non-cash and other reconciling items:
Depreciation and amortization
19,883
21,517
Amortization of operating lease assets
13,926
13,271
Deferred income taxes
(17,572
)
5,575
Stock-based compensation
10,987
9,355
Other, net
19,337
(20,171
)
Changes in (net of effects from businesses
acquired and divested):
Receivables
(94,393
)
30,190
Inventories
(29,230
)
(371,604
)
Accounts payable
213,610
111,489
Accrued expenses and other, net
(89,179
)
(50,184
)
Net cash flows provided by (used for)
operating activities
106,325
(41,294
)
Cash flows from financing activities:
Borrowings (repayments) under accounts
receivable securitization, net
27,900
(92,100
)
(Repayments) borrowings under senior
unsecured credit facility, net
(11,353
)
243,613
Repayments under bank credit facilities
and other debt, net
(824
)
(133
)
Repurchases of common stock
(99,995
)
(24,324
)
Dividends paid on common stock
(28,861
)
(28,320
)
Other, net
3,766
1,414
Net cash flows (used for) provided by
financing activities
(109,367
)
100,150
Cash flows from investing activities:
Purchases of property, plant and
equipment
(31,776
)
(76,089
)
Other, net
330
300
Net cash flows used for investing
activities
(31,446
)
(75,789
)
Effect of currency exchange rate changes
on cash and cash equivalents
(8,932
)
7,382
Cash and cash equivalents:
— decrease
(43,420
)
(9,551
)
— at beginning of period
310,941
288,230
— at end of period
$
267,521
$
278,679
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 other income (expense), (iii) adjusted income before
income taxes, (iv) adjusted income tax expense (benefit), and (v)
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 adjusted for
restructuring, integration and other expenses, and amortization of
acquired intangible assets, is a useful measure 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 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, and amortization of
acquired intangible assets and other.
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,
foreign currency gains and losses and certain items impacting
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 effective tax rate based
upon the expected long-term 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.
Additional non-GAAP metrics management uses are adjusted
operating income margin, which is defined as adjusted operating
income divided by sales and the adjusted effective income tax rate,
which is defined as adjusted income tax expense divided by adjusted
income before income taxes.
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 2025
First Quarter
September 28, 2024
($ in thousands, except per
share amounts)
GAAP operating income
$
142,225
Restructuring, integration, and other
expenses
26,351
Amortization of intangible assets
368
Adjusted operating income
168,944
GAAP other expense, net
$
(3,043
)
Foreign currency loss
4,783
Adjusted other income, net
1,740
GAAP income before income taxes
$
74,738
Restructuring, integration, and other
expenses
26,351
Amortization of intangible assets
368
Foreign currency loss
4,783
Adjusted income before income taxes
106,240
GAAP income tax expense
$
15,782
Restructuring, integration, and other
expenses
6,657
Amortization of intangible assets
87
Foreign currency loss
1,612
Income tax expense items, net
298
Adjusted income tax expense
24,436
GAAP net income
$
58,956
Restructuring, integration, and other
expenses (net of tax)
19,694
Amortization of intangible assets (net of
tax)
281
Foreign currency loss (net of tax)
3,171
Income tax expense items, net
(298
)
Adjusted net income
81,804
GAAP diluted earnings per share
$
0.66
Restructuring, integration, and other
expenses (net of tax)
0.22
Amortization of intangible assets (net of
tax)
0.00
Foreign currency loss (net of tax)
0.04
Income tax expense items, net
(0.00
)
Adjusted diluted EPS
0.92
Quarters Ended
Fiscal Year
June 29,
March 30,
December 30,
September 30,
2024*
2024*
2024*
2023
2023
($ in thousands, except per
share amounts)
GAAP operating income
$
844,367
$
164,189
$
190,151
$
236,257
$
253,769
Restructuring, integration, and other
expenses
52,550
28,417
11,847
5,235
7,051
Amortization of intangible assets
3,130
828
712
712
878
Adjusted operating income
900,047
193,434
202,710
242,204
261,698
GAAP other (expense) income, net
$
(15,736
)
$
1,409
$
(14,707
)
$
(8,397
)
$
5,960
Foreign currency loss (gain) and other,
net
27,730
680
17,850
9,200
—
Adjusted other (expense) income, net
11,994
2,089
3,143
803
5,960
GAAP income before income taxes
$
632,263
$
101,324
$
101,948
$
153,558
$
275,432
Restructuring, integration, and other
expenses
52,550
28,417
11,847
5,235
7,051
Amortization of intangible assets
3,130
828
712
712
878
Foreign currency loss (gain) and other,
net
27,730
680
17,850
9,200
—
Gain on legal settlements and other
(86,499
)
—
—
—
(86,499
)
Adjusted income before income taxes
629,174
131,249
132,357
168,705
196,862
GAAP income tax expense
$
133,564
$
18,659
$
13,114
$
35,627
$
66,164
Restructuring, integration, and other
expenses
13,000
7,251
2,772
1,274
1,703
Amortization of intangible assets
700
185
156
156
203
Foreign currency loss (gain) and other,
net
7,373
88
5,251
2,034
—
Gain on legal settlements and other
(20,434
)
—
—
—
(20,434
)
Income tax expense items, net
4,992
(6,489
)
10,472
1,399
(390
)
Adjusted income tax expense
139,195
19,694
31,765
40,490
47,246
GAAP net income
$
498,699
$
82,665
$
88,834
$
117,931
$
209,268
Restructuring, integration, and other
expenses (net of tax)
39,550
21,166
9,075
3,961
5,348
Amortization of intangible assets (net of
tax)
2,430
643
556
556
675
Foreign currency loss (gain) and other,
net (net of tax)
20,357
592
12,599
7,166
—
Gain on legal settlements and other (net
of tax)
(66,065
)
—
—
—
(66,065
)
Income tax expense items, net
(4,992
)
6,489
(10,472
)
(1,399
)
390
Adjusted net income
489,979
111,555
100,592
128,215
149,616
GAAP diluted earnings per share
$
5.43
$
0.91
$
0.97
$
1.28
$
2.25
Restructuring, integration, and other
expenses (net of tax)
0.43
0.23
0.10
0.04
0.06
Amortization of intangible assets (net of
tax)
0.03
0.01
0.01
0.01
0.01
Foreign currency loss (gain) and other,
net (net of tax)
0.22
0.01
0.14
0.08
—
Gain on legal settlements and other (net
of tax)
(0.72
)
—
—
—
(0.71
)
Income tax expense items, net
(0.05
)
0.07
(0.11
)
(0.01
)
0.00
Adjusted diluted EPS
5.34
1.22
1.10
1.40
1.61
_______________________________
* May not foot/cross foot due to
rounding.
Sales in Constant Currency
The following table presents the percentage change in sales and
the percentage change in sales in constant currency for the first
quarter of fiscal 2025 compared to the first quarter of fiscal
2024.
Quarter Ended
September 28, 2024
Sales
Year-Year %
Sales
Change in
Year-Year
Constant
% Change
Currency
Avnet
(11.6
)%
(11.7
)%
Avnet by region
Americas
(15.5
)%
(15.5
)%
EMEA
(27.7
)%
(28.4
)%
Asia
6.2
%
6.4
%
Avnet by segment
EC
(11.1
)%
(11.2
)%
Farnell
(17.6
)%
(18.2
)%
Historical Segment Financial Information
Fiscal 2025
First Quarter
September 28, 2024
(in millions)
Sales:
Electronic Components
$
5,257.1
Farnell
347.1
Avnet sales
$
5,604.2
Operating income:
Electronic Components
$
197.4
Farnell
1.9
199.3
Corporate expenses
(30.3
)
Restructuring, integration, and other
expenses
(26.4
)
Amortization of acquired intangible
assets
(0.4
)
Avnet operating income
$
142.2
Sales by geographic area:
Americas
$
1,329.9
EMEA
1,668.2
Asia
2,606.1
Avnet sales
$
5,604.2
Quarters Ended
Fiscal
Fourth Quarter
Third Quarter
Second Quarter
First Quarter
Year
June 29,
March 30,
December 30,
September 30,
2024*
2024
2024
2023
2023
($ in millions)
Sales:
Electronic Components
$
22,160.0
$
5,187.8
$
5,245.8
$
5,812.1
$
5,914.4
Farnell
1,597.1
375.2
407.8
392.8
421.2
Avnet sales
$
23,757.1
$
5,563.0
$
5,653.6
$
6,204.9
$
6,335.6
Operating income:
Electronic Components
$
947.6
$
210.1
$
216.9
$
247.9
$
272.8
Farnell
64.8
15.1
16.3
15.7
17.7
1,012.4
225.2
233.2
263.6
290.5
Corporate expenses
(112.3)
(31.8)
(30.5)
(21.4)
(28.7)
Restructuring, integration, and other
expenses
(52.6)
(28.4)
(11.8)
(5.2)
(7.1)
Amortization of acquired intangible
assets
(3.1)
(0.8)
(0.7)
(0.7)
(0.9)
Avnet operating income
$
844.4
$
164.2
$
190.2
$
236.3
$
253.8
Sales by geographic area:
Americas
$
5,919.2
$
1,353.8
$
1,403.4
$
1,588.5
$
1,573.5
EMEA
8,395.0
1,920.3
2,053.1
2,113.6
2,308.0
Asia
9,442.9
2,288.9
2,197.1
2,502.8
2,454.1
Avnet sales
$
23,757.1
$
5,563.0
$
5,653.6
$
6,204.9
$
6,335.6
______________________________
* 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 second quarter of
fiscal 2025.
Low End of
High End of
Guidance Range
Guidance Range
Adjusted diluted earnings per share
guidance
$
0.80
$
0.90
Restructuring, integration, and other
expenses (net of tax)
(0.10
)
(0.05
)
GAAP diluted earnings per share
guidance
$
0.70
$
0.85
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241030127924/en/
Investor Relations Contact
InvestorRelations@Avnet.com
Media Relations Contact Jeanne Forbis, 480-643-7499
Jeanne.Forbis@Avnet.com
Avnet (NASDAQ:AVT)
Gráfica de Acción Histórica
De Ene 2025 a Feb 2025
Avnet (NASDAQ:AVT)
Gráfica de Acción Histórica
De Feb 2024 a Feb 2025
