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Avnet Reports Second Quarter Fiscal 2021 Financial Results

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$4.7 billion in sales, $0.19 EPS and $0.48 adjusted EPS exceeded guidance

Third consecutive quarter of operating margin improvement

Avnet, Inc. (Nasdaq: AVT) today announced results for its second quarter ended January 2, 2021.

Fiscal Second Quarter Key Financial Highlights:

  • Sales of $4.7 billion up from $4.5 billion in the prior year quarter, supported by record sales in Asia of $2.2 billion, up 16% year over year.

    • On constant currency basis, organic sales increased 4.8% after adjusting for 14 weeks of activity in the prior quarter.

  • GAAP diluted earnings per share of $0.19, compared with a GAAP diluted loss per share of $0.19 in the prior quarter, a 200% increase.

    • Non-GAAP adjusted diluted earnings per share of $0.48, compared with $0.36 in the prior quarter, a 33% increase.

  • Farnell operating margins increased sequentially 97 basis points to 4.5%.

  • GAAP operating income margin of 1.2%, compared with 0.4% the prior quarter, and an adjusted operating income margin of 1.7%, compared with 1.4% in the prior quarter.

  • Achieved net working capital of 75 days, generating $85 million of cash flow from operations.

  • Sales of Texas Instruments (TI) products were $50 million compared with $399 million in the prior year.

    • When excluding TI, organic sales grew 9.3% year over year on a constant currency basis.

CEO Commentary

"Improvements in our Farnell, EMEA and Americas businesses, complemented by a record revenue quarter in Asia, reflect our continued progress in driving operational efficiencies and enhancing key business lines through strategic investments. We’ve seen tangible results from this back to the basics strategy over the past two quarters with increased sales, improving returns on capital and a stronger balance sheet. As a result, we are better positioned today to manage our backlog and working capital to navigate uncertainties resulting from COVID-19," said Avnet Chief Executive Officer Phil Gallagher. "I am incredibly proud of our team’s resilience amidst the challenges this past year. They’ve delivered significant value in providing uninterrupted service at a global scale and in working collaboratively with our customers and suppliers to manage forecasts, navigate current market dynamics and mitigate supply chain risk."

Key Financial Metrics

($ in millions, except per share data)

Second Quarter Results (GAAP)

Dec – 20

Dec – 19

Change Y/Y

Sep – 20

Change Q/Q

Sales

$

4,668.2

$

4,534.8

2.9

%

$

4,723.1

(1.2)

%

Operating Income

57.2

46.5

23.1

%

18.5

209.3

%

Operating Income Margin

1.2

%

1.0

%

21

bps

0.4

%

84

bps

Diluted Earnings (Loss) Per Share (EPS)

$

0.19

$

0.05

280.0

%

$

(0.19)

200.0

%

Second Quarter Results (Non-GAAP)(1)

Dec – 20

Dec – 19

Change Y/Y

Sep – 20

Change Q/Q

Sales

$

4,668.2

$

4,534.8

2.9

%

$

4,723.1

(1.2)

%

Adjusted Operating Income

79.6

82.2

(3.2)

%

65.1

22.3

%

Adjusted Operating Income Margin

1.7

%

1.8

%

(11)

bps

1.4

%

32

bps

Adjusted Diluted Earnings Per Share (EPS)

$

0.48

$

0.40

20.0

%

$

0.36

33.3

%

Segment and Geographical Mix

Dec – 20

Dec – 19

Change Y/Y

Sep – 20

Change Q/Q

Electronic Components (EC) Sales

$

4,342.4

$

4,203.6

3.3

%

$

4,382.2

(0.9)

%

EC Operating Income Margin

2.4

%

2.2

%

17

bps

1.9

%

46

bps

Farnell Sales

$

325.8

$

331.2

(1.6)

%

$

340.9

(4.4)

%

Farnell Operating Income Margin

4.5

%

6.0

%

(155)

bps

3.5

%

97

bps

Americas Sales

$

1,101.5

$

1,186.6

(7.2)

%

$

1,205.7

(8.7)

%

EMEA Sales

1,346.3

1,425.8

(5.6)

%

1,480.7

(9.1)

%

Asia Sales

2,220.4

1,922.4

15.5

%

2,036.7

9.0

%

TI Sales

Dec – 20

Dec – 19

Change Y/Y

Sep – 20

Change Q/Q

Sales of TI Products

$

49.6

$

399.2

(87.6)

%

$

241.0

(79.4)

%

_________________________

(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.

CFO Commentary

"During the second quarter, we delivered sales of $4.7 billion and adjusted diluted earnings per share of $0.48, driven by strong execution and a streamlined cost structure that has allowed us to achieve increased revenue without adding significant operating expense. Our year over year top line growth and careful working capital management enabled us to achieve our goal of 75 net working capital days," said Avnet CFO Tom Liguori. "Our $75 million operating expense reduction plan was fully implemented in the quarter, driving our ninth consecutive quarter of positive operating cash flows. We remain on track to achieve our $245 million operating expense reduction plan by the end of fiscal year 2022. We are delivering improved financial and competitive performance, building Avnet’s core distribution business while still strategically investing in Farnell, where we see tremendous opportunity to deliver profitable growth."

Additional Second Quarter Fiscal 2021 Updates

  • Returned $21 million to shareholders with dividends paid during the quarter.

  • Achieved highest quarterly transportation revenue in 6 quarters in the Americas and Asia.

  • Farnell selected as the authorized global distributor for National Instruments (NI).

  • Avnet rejoined the Electronic Components Industry Association (ECIA) as a distributor member.

  • Named Infineon’s Best Performance GC Distribution Partner, Greater China PSS and Industrial Power Control Greater China.

  • Named Micron’s Top EBU Demand Creation and Leading Automotive Tier One.

Outlook for the Third Quarter of Fiscal 2021 Ending on April 3, 2021

Guidance Range

Midpoint

Sales

$4.3B – $4.7B

$4.5B

Non-GAAP Diluted EPS(1)

$0.52 – $0.58

$0.55

_________________________

(1)

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

The above guidance is based upon market conditions existing as of today, seasonally lower revenues in Asia, gross margin improvement due to the mix shift from Asia to Americas and EMEA, and ongoing cost reduction programs. It excludes amortization of intangibles, any potential restructuring, integration, and other expenses and certain income tax adjustments. The above sales guidance assumes approximately $50 million in lower sales of Texas Instruments products as compared to the second quarter of fiscal 2021. The above guidance assumes 100 million average diluted shares outstanding and average U.S. Dollar to Euro and GBP currency exchange rates are as shown below:

Q3 Fiscal

2021

Q2 Fiscal

Q3 Fiscal

Guidance

2021

2020

Euro

$1.21

$1.19

$1.10

GBP

$1.36

$1.32

$1.28

Today’s Conference Call and Webcast Details

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

Those who would still like to participate in the live call can dial 877-407-8112 or 201-689-8840. A replay of the conference call will be available for 90 days, through April 27, 2021 at 5:00 p.m. ET, and can be accessed by dialing: 877-660-6853 or 201-612-7415 and using Conference ID: 13713922.

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," "plans," "expects," "anticipates," "should," "will," "may," "estimates" or similar expressions. These forward-looking statements are subject to numerous assumptions, risks and uncertainties. You should understand that 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 27, 2020 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: the scope and duration of the COVID-19 pandemic and its impact on global economic systems, access to financial markets and the Company’s employees, operations, customers, and supply chain; competitive pressures among distributors of electronic components; an industry down-cycle in semiconductors; relationships with key suppliers and allocations of products by suppliers; risks relating to the Company’s international sales and operations, including risks relating to the ability to repatriate cash, foreign currency fluctuations, duties and taxes, and compliance with international and U.S. laws; risks relating to acquisitions, divestitures and investments; adverse effects on the Company’s supply chain, operations of its distribution centers, shipping costs, third-party service providers, customers and suppliers, including as a result of issues caused by natural and weather-related disasters, pandemics and health related crisis, social unrest or warehouse modernization and relocation efforts; risks related to cyber-attacks and the Company’s information systems, including related to current or future implementations; 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, and liquidity and access to financing; geopolitical events, including the uncertainty caused by the United Kingdom’s exit from, and agreement for a new partnership with, the European Union; and legislative or regulatory changes affecting the Company’s businesses.

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

About Avnet

Avnet is a global electronic components distributor with extensive design, product, marketing and supply chain expertise for customers and suppliers at every stage of the product lifecycle. For the past 100 years, Avnet has helped 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)

Second Quarters Ended

Six Months Ended

January 2,

December 28,

January 2,

December 28,

2021

2019

2021

2019

(Thousands, except per share data)

Sales

$

4,668,172

$

4,534,806

$

9,391,232

$

9,164,814

Cost of sales

4,156,919

4,009,193

8,363,899

8,095,362

Gross profit

511,253

525,613

1,027,333

1,069,452

Selling, general and administrative expenses

442,084

464,873

913,241

921,377

Restructuring, integration and other expenses

11,948

14,265

38,369

38,863

Operating income

57,221

46,475

75,723

109,212

Other (expense) income, net

(1,333

)

(1,963

)

(20,831

)

2,969

Interest and other financing expenses, net

(21,485

)

(33,904

)

(43,787

)

(67,535

)

Income before taxes

34,403

10,608

11,105

44,646

Income tax expense (benefit)

15,240

6,940

10,831

(774

)

Net income

$

19,163

$

3,668

$

274

$

45,420

Earnings per share:

Basic

$

0.19

$

0.04

$

0.00

$

0.45

Diluted

$

0.19

$

0.04

$

0.00

$

0.44

Shares used to compute earnings per share:

Basic

98,937

100,431

98,917

101,781

Diluted

99,932

101,302

99,897

102,839

Cash dividends paid per common share

$

0.21

$

0.21

$

0.42

$

0.42

AVNET, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

January 2,

June 27,

2021

2020

(Thousands)

ASSETS

Current assets:

Cash and cash equivalents

$

376,333

$

477,038

Receivables, net

3,105,317

2,928,386

Inventories

2,816,421

2,731,988

Prepaid and other current assets

156,375

191,394

Total current assets

6,454,446

6,328,806

Property, plant and equipment, net

403,270

404,607

Goodwill

834,795

773,734

Intangible assets, net

38,812

65,437

Operating lease assets

284,886

275,917

Other assets

248,104

256,696

Total assets

$

8,264,313

$

8,105,197

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:

Short-term debt

$

311,800

$

51

Accounts payable

1,935,661

1,754,078

Accrued expenses and other

520,463

472,924

Short-term operating lease liabilities

58,400

53,313

Total current liabilities

2,826,324

2,280,366

Long-term debt

895,639

1,424,791

Long-term operating lease liabilities

259,599

253,719

Other liabilities

372,018

419,923

Total liabilities

4,353,580

4,378,799

Shareholders’ equity

3,910,733

3,726,398

Total liabilities and shareholders’ equity

$

8,264,313

$

8,105,197

AVNET, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

Six Months Ended

January 2, 2021

December 28, 2019

(Thousands)

Cash flows from operating activities:

Net income

$

274

$

45,420

Non-cash and other reconciling items:

Depreciation

44,002

49,822

Amortization

30,474

41,257

Amortization of operating lease assets

28,111

31,354

Deferred income taxes

(311

)

(15,518

)

Stock-based compensation

15,331

14,503

Asset impairment expense

15,166

Other, net

17,004

22,157

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

Receivables

(94,831

)

185,598

Inventories

51,185

94,182

Accounts payable

130,768

(52,711

)

Accrued expenses and other, net

(29,779

)

(71,858

)

Net cash flows provided by operating activities

207,394

344,206

Cash flows from financing activities:

Borrowings (repayments) under accounts receivable securitization, net

11,800

(35,400

)

Repayments under senior unsecured credit facility, net

(239,430

)

(1,376

)

Repayments under bank credit facilities and other debt, net

(1,480

)

(1,301

)

Repurchases of common stock

(198,630

)

Dividends paid on common stock

(41,512

)

(42,426

)

Other, net

(2,301

)

(4,887

)

Net cash flows used for financing activities

(272,923

)

(284,020

)

Cash flows from investing activities:

Purchases of property, plant and equipment

(30,022

)

(44,252

)

Acquisitions of assets

(18,371

)

(51,509

)

Other, net

725

(13,098

)

Net cash flows used for investing activities

(47,668

)

(108,859

)

Effect of currency exchange rate changes on cash and cash equivalents

12,492

(8,622

)

Cash and cash equivalents:

— decrease

(100,705

)

(57,295

)

— at beginning of period

477,038

546,105

— at end of period

$

376,333

$

488,810

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 tax expense, (v) adjusted income from continuing operations, (vi) adjusted diluted earnings per share from continuing operations, and (vii) sales adjusted for the impact of significant acquisitions and other items (as defined in the Organic Sales section of this document).

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

Management believes that operating income and operating expenses adjusted for restructuring, integration and other expenses, goodwill and intangible asset impairment expenses and amortization of acquired intangible assets and other, are useful measures to help investors better assess and understand the Company’s operating performance. This is especially the case when comparing results with previous periods or forecasting performance for future periods, primarily because management views the excluded items to be outside of Avnet’s normal operating results or non-cash in nature. Management analyzes operating income and operating expenses without the impact of these items as an indicator of ongoing margin performance and underlying trends in the business. Management also uses these non-GAAP measures to establish operational goals and, in most cases, for measuring performance for compensation purposes. Management measures operating income for its reportable segments excluding restructuring, integration and other expenses, goodwill and intangible asset impairment expenses and amortization of acquired intangible assets and other.

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

Management also believes income tax expense (benefit), net income and diluted earnings (loss) per share adjusted for the impact of the items described above and certain items impacting other income (expense) and income tax expense (benefit) are useful to investors because they provide a measure of the Company’s net profitability on a more comparable basis to historical periods and provide a more meaningful basis for forecasting future performance. Adjustment to income tax expense (benefit) and the effective income tax rate include the effect of changes in tax laws including recent tax law changes in the U.S., 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 income from continuing operations and diluted earnings (loss) per share from continuing operations 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. All amounts below relate to Avnet’s continuing operations.

Fiscal

Quarters Ended

Year to Date

January 2,

October 3,

2021*

2021

2020

($ in thousands, except per share amounts)

GAAP selling, general and administrative expenses

$

913,241

$

442,084

$

471,158

Amortization of intangible assets and other

(30,592

)

(10,417

)

(20,175

)

Adjusted operating expenses

882,649

431,667

450,983

GAAP operating income

$

75,723

$

57,221

$

18,502

Restructuring, integration and other expenses

38,369

11,948

26,420

Amortization of intangible assets and other

30,592

10,417

20,175

Adjusted operating income

144,683

79,586

65,097

GAAP income (loss) before income taxes

$

11,105

$

34,403

$

(23,297

)

Restructuring, integration and other expenses

38,369

11,948

26,420

Amortization of intangible assets and other

30,592

10,417

20,175

Other expenses - equity investment impairments

15,274

51

15,223

Adjusted income before income taxes

95,340

56,819

38,521

GAAP income tax expense (benefit)

$

10,831

$

15,240

$

(4,408

)

Restructuring, integration and other expenses

7,178

2,577

4,601

Amortization of intangible assets and other

7,066

2,037

5,029

Other expenses - equity investment impairments

52

26

26

Income tax expense items, net

(13,498

)

(10,788

)

(2,710

)

Adjusted income tax expense

11,629

9,092

2,538

GAAP net income (loss)

$

274

$

19,163

$

(18,889

)

Restructuring, integration and other expenses (net of tax)

31,191

9,371

21,819

Amortization of intangible assets and other (net of tax)

23,526

8,380

15,146

Other expenses - equity investment impairments (net of tax)

15,222

25

15,197

Income tax expense items, net

13,498

10,788

2,710

Adjusted net income

83,711

47,727

35,983

GAAP diluted earnings (loss) per share

$

0.00

$

0.19

$

(0.19

)

Restructuring, integration and other expenses (net of tax)

0.31

0.09

0.22

Amortization of intangible assets and other (net of tax)

0.24

0.09

0.15

Other expenses - equity investment impairments (net of tax)

0.15

-

0.15

Income tax expense items, net

0.14

0.11

0.03

Adjusted diluted EPS

0.84

0.48

0.36

_________________________

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

Quarters Ended

Fiscal Year

June 27,

March 28,

December 29,

September 29,

2020*

2020*

2020*

2019*

2019*

($ in thousands, except per share amounts)

GAAP selling, general and administrative expenses

$

1,842,122

$

451,099

$

469,646

$

464,873

$

456,503

Amortization of intangible assets and other

(81,555

)

(18,952

)

(21,071

)

(21,454

)

(20,078

)

Adjusted operating expenses

1,760,567

432,147

448,576

443,419

436,426

GAAP operating (loss) income

$

(4,628

)

$

1,920

$

(115,760

)

$

46,475

$

62,738

Restructuring, integration and other expenses

81,870

23,796

19,211

14,265

24,598

Goodwill and intangible asset impairment expenses (benefits)

144,092

(1,744

)

145,836

-

-

Amortization of intangible assets and other

81,555

18,952

21,071

21,454

20,078

Adjusted operating income

...

302,889

42,924

70,358

82,194

107,414

GAAP (loss) income before income taxes

$

(128,107

)

$

(16,144

)

$

(158,086

)

$

12,086

$

34,038

Restructuring, integration and other expenses

81,870

23,796

19,211

14,265

24,598

Goodwill and intangible asset impairment expenses (benefits)

144,092

(1,744

)

145,836

-

-

Amortization of intangible assets and other

81,555

18,952

21,071

21,454

20,078

Other expenses and early debt redemption

21,582

2,054

15,526

4,002

-

Adjusted income before income taxes

200,992

26,914

43,558

51,807

78,713

GAAP income tax expense (benefit)

$

(98,574

)

$

(68,304

)

$

(29,425

)

$

6,870

$

(7,714

)

Restructuring, integration and other expenses

18,648

4,659

4,372

3,377

6,240

Goodwill and intangible asset impairment expenses

6,433

207

6,226

-

-

Amortization of intangible assets and other

16,119

3,613

4,307

3,964

4,235

Other expenses and early debt redemption

6,238

506

4,992

740

-

Income tax benefit (expense) items, net

47,655

22,996

15,119

(4,071

)

13,611

Adjusted income tax (benefit) expense

(3,481

)

(36,323

)

5,591

10,880

16,372

GAAP net (loss) income

$

(29,533

)

$

52,160

$

(128,661

)

$

5,216

$

41,752

Restructuring, integration and other expenses (net of tax)

63,222

19,137

14,839

10,888

18,358

Goodwill and intangible asset impairment expenses (benefits) (net of tax)

137,659

(1,951

)

139,610

-

-

Amortization of intangible assets and other (net of tax)

65,436

15,339

16,764

17,490

15,843

Other expenses and early debt redemption (net of tax)

15,344

1,548

10,534

3,262

-

Income tax (benefit) expense items, net

(47,655

)

(22,996

)

(15,119

)

4,071

(13,611

)

Adjusted net income

204,473

63,237

37,967

40,927

62,341

GAAP diluted (loss) earnings per share

$

(0.29

)

$

0.53

$

(1.29

)

$

0.05

$

0.40

Restructuring, integration and other expenses (net of tax)

0.63

0.19

0.15

0.11

0.18

Goodwill and intangible asset impairment expenses (benefits) (net of tax)

1.37

(0.02

)

1.39

-

-

Amortization of intangible assets and other (net of tax)

0.65

0.15

0.17

0.17

0.15

Other expenses and early debt redemption (net of tax)

0.15

0.02

0.11

0.03

-

Income tax (benefit) expense items, net

(0.47

)

(0.23

)

(0.15

)

0.04

(0.13

)

Adjusted diluted EPS

2.04

0.64

0.38

0.40

0.60

_________________________

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

Sales of TI Products

In December, the termination of the Company’s electronic components distribution agreement with Texas Instruments ("TI") was completed. Sales of TI products by quarter are outlined in the following table:

Second Quarter

First Quarter

Fourth Quarter

Third Quarter

Second Quarter

January 2,

October 3,

June 27,

March 28,

December 28,

2021

2020

2020

2020

2019

(in millions)

Sales of TI Products

$

49.6

$

241.0

$

322.5

$

400.6

$

399.2

Organic Sales

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

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

The following table presents the reconciliation of reported sales to organic sales for the second quarter and first six months of fiscal 2021.

Quarter Ended

Six Months Ended

Sales

Organic

Organic

As Reported

Sales

Sales

Organic

Sales

and Organic

TI Sales

Adj for TI

As Reported

Estimated

Sales

TI Sales

Adj for TI

Q2-Fiscal

Q2-Fiscal

Q2-Fiscal

Q2-Fiscal

Extra

Q2-Fiscal

Q2-Fiscal

Q2-Fiscal

2021

2021(1)

2021(1)

2021

Week(2)

2021

2021(1)

2021(1)

(in millions)

Avnet

$

4,668.2

$

49.6

$

4,618.6

$

9,391.2

$

306.0

$

9,085.2

$

290.6

$

8,794.6

Avnet by region

Americas

$

1,101.5

$

14.0

$

1,087.5

$

2,307.1

$

77.0

$

2,230.1

$

82.5

$

2,147.6

EMEA

1,346.3

20.8

1,325.5

2,827.0

97.0

2,730.0

123.7

2,606.3

Asia

2,220.4

14.8

2,205.6

4,257.1

132.0

4,125.1

84.4

4,040.7

Avnet by segment

EC

$

4,342.4

$

49.6

$

4,292.8

$

8,724.5

$

284.0

$

8,440.5

$

290.6

$

8,149.9

Farnell

325.8

325.8

666.7

22.0

644.7

644.7

_________________________

(1)

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

(2)

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

The following table presents reported and organic sales growth rates for the second quarter and first six months of fiscal 2021 compared to fiscal 2020.

Quarter Ended

Six Months Ended

Sales

Organic

Organic

As Reported

Sales

Sales

Organic

Sales

Sales

and Organic

Adj for TI

As Reported

Sales

Adj for TI

As Reported

Year-Year %

Year-Year %

Sales

Year-Year %

Organic

Year-Year %

Year-Year %

and Organic

Change in

Change in

As Reported

Change in

Sales

Change in

Change in

Year-Year

Constant

Constant

Year-Year

Constant

Year-Year

Constant

Constant

% Change

Currency

Currency(1)

% Change

Currency

% Change

Currency

Currency(1)

Avnet

2.9

%

0.7

%

9.3

%

2.5

%

0.7

%

(0.9

)

%

(2.7

)

%

3.7

%

Avnet by region

Americas

(7.2

)

%

(7.2

)

%

(0.5

)

%

(4.0

)

%

(4.0

)

%

(7.2

)

%

(7.2

)

%

(2.7

)

%

EMEA

(5.6

)

(11.4

)

(4.5

)

(2.4

)

(7.4

)

(5.8

)

(10.8

)

(6.2

)

Asia

15.5

14.6

25.7

10.1

9.6

6.7

6.2

15.1

Avnet by segment

EC

3.3

%

1.1

%

10.5

%

2.7

%

0.9

%

(0.7

)

%

(2.4

)

%

4.5

%

Farnell

(1.6

)

(4.5

)

(4.5

)

(0.1

)

(2.5

)

(3.3

)

(5.8

)

(5.8

)

_________________________

(1)

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

Historical Segment Financial Information

Fiscal 2021

Fiscal

Second Quarter

First Quarter

Year to Date

January 2,

October 3,

2021*

2021

2020

(in millions)

Sales:

Electronic Components

$

8,724.5

$

4,342.4

$

4,382.2

Farnell

666.7

325.8

340.9

Avnet sales

$

9,391.2

$

4,668.2

$

4,723.1

Operating income:

Electronic Components

$

188.4

$

103.9

$

84.4

Farnell

26.6

14.6

12.0

215.0

118.5

96.4

Corporate expenses

(70.3

)

(39.0

)

(31.3

)

Restructuring, integration and other expenses

(38.4

)

(11.9

)

(26.4

)

Amortization of acquired intangible assets and other

(30.6

)

(10.4

)

(20.2

)

Avnet operating income

$

75.7

$

57.2

$

18.5

Sales by geographic area:

Americas

$

2,307.1

$

1,101.5

$

1,205.7

EMEA

2,827.0

1,346.3

1,480.7

Asia

4,257.1

2,220.4

2,036.7

Avnet sales

$

9,391.2

$

4,668.2

$

4,723.1

_________________________

* May not foot/cross foot due to rounding

Fiscal Year 2020

Quarters Ended

Fourth Quarter

Third Quarter

Second Quarter

First Quarter

Fiscal Year

June 27,

March 28,

December 28,

September 28,

2020*

2020*

2020*

2019

2019

(in millions)

Sales:

Electronic Components

$

16,340.1

$

3,867.6

$

3,974.7

$

4,203.6

$

4,294.2

Farnell

1,294.2

292.1

335.1

331.2

335.8

Avnet

$

17,634.3

$

4,159.7

$

4,309.8

$

4,534.8

$

4,630.0

Operating income (loss):

Electronic Components

$

349.1

$

58.9

$

84.8

$

93.1

$

112.3

Farnell

75.5

10.4

23.4

20.0

21.8

424.6

69.3

108.2

113.1

134.1

Corporate expenses

(121.6

)

(26.3

)

(37.8

)

(30.9

)

(26.7

)

Restructuring, integration and other expenses

(81.9

)

(23.8

)

(19.2

)

(14.3

)

(24.6

)

Goodwill and intangible asset impairment expenses

(144.1

)

1.7

(145.8

)

-

-

Amortization of acquired intangible assets and other

(81.6

)

(19.0

)

(21.1

)

(21.4

)

(20.1

)

Avnet operating (loss) income

$

(4.6

)

$

1.9

$

(115.8

)

$

46.5

$

62.7

Sales by geographic area:

Americas

$

4,755.3

$

1,149.3

$

1,203.6

$

1,186.6

$

1,215.8

EMEA

5,753.4

1,344.2

1,512.5

1,425.8

1,470.9

Asia

7,125.6

1,666.2

1,593.7

1,922.4

1,943.3

Avnet

$

17,634.3

$

4,159.7

$

4,309.8

$

4,534.8

$

4,630.0

_________________________

* 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 third quarter of fiscal 2021.

Low End of

High End of

Guidance Range

Guidance Range

Adjusted diluted earnings per share guidance

$

0.52

$

0.58

Restructuring, integration and other expense (net of tax)

(0.12

)

(0.08

)

Amortization of intangibles and other (net of tax)

(0.09

)

(0.07

)

Income tax expense adjustments

(0.05

)

0.05

GAAP diluted earnings per share guidance

$

0.26

$

0.48

View source version on businesswire.com: https://www.businesswire.com/news/home/20210127005796/en/

Contacts

Investor Relations Contact

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

Media Relations Contact

Jeanne Forbis, 480-643-7499
jeanne.forbis@avnet.com