Avnet, Inc. Reports Second Quarter Fiscal Year 2013 Results

  Avnet, Inc. Reports Second Quarter Fiscal Year 2013 Results

          Sequential Growth Drives Significant Increase in Earnings

Business Wire

PHOENIX -- January 24, 2013

Avnet, Inc. (NYSE:AVT) today announced results for the second quarter fiscal
year 2013 ended December 29, 2012.

Q2 Fiscal 2013 Results

                      SECOND QUARTERS ENDED
                                                            
                         December 29,           December 31,
                         2012                   2011                   Change
                         $ in millions, except for per share data
Sales                    $   6,699.5            $   6,693.6            0.1   %
                                                                       
GAAP Operating               195.6                  230.9              -15.3 %
Income
Adjusted Operating           220.5                  265.4              -16.9 %
Income ^(1)
                                                                       
GAAP Net Income              137.5                  147.0              -6.5  %
Adjusted Net                 140.0                  172.0              -18.6 %
Income ^(1)
                                                                       
                                                                       
GAAP Diluted EPS         $   0.99               $   0.98               1.0   %
Adjusted Diluted         $   1.01               $   1.15               -12.2 %
EPS ^(1)
                                                                       

           A reconciliation of non-GAAP financial measures to GAAP financial
  ^(1)  measures is presented in the Non-GAAP Financial Information section
           in this press release.
           

  *Sales for the quarter ended December 29, 2012 were essentially flat year
    over year at $6.70 billion; pro forma revenue declined 5.7% year over year
    and 4.8% in constant currency
  *Adjusted operating income of $220.5 million declined 16.9% year over year
    and adjusted operating income margin of 3.3% declined 67 basis points;
    sequentially, adjusted operating income and operating income margin were
    up 60.5% and 95 basis points, respectively
  *Adjusted diluted earnings per share of $1.01 declined 12.2% year over
    year, but increased 71.2% sequentially driven by significant profit growth
    in the Technology Solutions (TS) segment

Rick Hamada, Chief Executive Officer, commented, “Our overall Q2 results
reflect a stronger than expected performance despite some continuing concerns
on the longer term macroeconomic environment. Our team was able to leverage
our recent resource alignment activities along with a few bright spots in
technology spending into significant sequential improvements in EPS, margins
and returns. In the December quarter, sequential growth returned to seasonal
trends after below seasonal growth over the past two quarters as revenue
exceeded expectations at both operating groups. Driven by stronger than
expected calendar year end spending on IT infrastructure at TS and
accelerating growth in our Asia components business, revenue grew over 14%
sequentially in reported dollars while pro forma revenue was up 9% in constant
dollars. Combined with the cost reductions implemented, this top line growth
resulted in sequential adjusted operating income growing four times faster
than revenue and adjusted operating income margin increasing 95 basis points
to 3.3%. While our performance this quarter attests to the leverage in our
model, our served markets continue to reflect an uneven recovery as questions
around global growth trends persist. In this environment, we will continue to
react quickly to changes in market conditions and apply our value based
management discipline across the portfolio to drive continued progress toward
our long-term goals.”

Avnet Electronics Marketing Results

                                          Year-over-Year Growth Rates
                            Q2 FY13               Reported      Pro Forma
                            Revenue               Revenue           Revenue
                            (in millions)
EM Total                    $  3,673.5              2.2   %         -2.2     %
Excluding FX ^(1)                                   3.5   %         -0.9     %
Americas                    $  1,264.9              -9.8  %         -12.8    %
EMEA                        $  914.3                -3.1  %         -4.5     %
Excluding FX ^(1)                                   0.9   %         -0.7     %
Asia                        $  1,494.3              19.5  %         10.9     %
                                                                             
                                                                             
                            Q2 FY13               Q2 FY12           Change
Operating Income            $  140.1              $ 174.9           -19.9    %
Operating Income               3.8      %           4.9   %         -105 bps
Margin
                                                                             

  ^(1)  Year-over-year revenue growth rate excluding the impact of changes
           in foreign currency exchange rates.
           

  *Reported revenue increased 2.2% year over year to $3.67 billion; pro forma
    revenue declined 2.2% year over year and 0.9% in constant dollars
  *Operating income margin decreased 105 basis points year over year to 3.8%
    primarily due to the temporary benefit from the hard disk drive shortages
    in the year ago quarter and the impact of the geographic mix shift to the
    Asia region combined with lower profitability in the western regions
  *Working capital (defined as receivables plus inventory less accounts
    payables) declined 5.8% sequentially primarily due to an 8% reduction in
    inventory as decreases in receivables and accounts payables essentially
    offset one another
  *Return on working capital (ROWC) was down 358 basis points year over year
    due primarily to lower operating income

Mr. Hamada added, “Although EM’s sequential pro forma revenue decline was in
line with normal seasonality, we continue to see different stages of recovery
by region coming out of the components supply chain correction. In our Asia
region, which exceeded expectations this quarter, the notable growth in our
high volume fulfillment business drove year-over-year growth comparisons into
double digit territory for the first time in six quarters. In EMEA, pro forma
revenue declined 8.5% sequentially in constant currency, but was down less
than 1% from the year ago quarter. In the Americas region, revenue declined
1.8% sequentially and was down 12.8% year over year, on a pro forma basis,
primarily due to a decision to exit the lower margin commercial components
business in Latin America. On a year-over-year basis, operating income margin
was down 105 basis points primarily due to the positive, yet temporary, margin
lift of hard disk drive shortages in the year ago quarter, lower profitability
in the western regions, which have not fully recovered, and a geographic mix
shift to Asia in the current quarter. We are encouraged that our bookings
strengthened throughout the quarter and our book to bill ratio closed above
parity in all three regions, which suggests inventory levels are properly
aligned at our customers. Although the uncertain market landscape continues,
we feel well positioned to take advantage of any strengthening in our core
industrial end markets as we continue progress toward our long-term goals.”

Avnet Technology Solutions Results

                                           Year-over-Year Growth Rates
                             Q2 FY13               Reported      Pro Forma
                             Revenue               Revenue           Revenue
                             (in millions)
TS Total                     $  3,026.0              -2.3  %         -9.6    %
Excluding FX ^(1)                                    -1.8  %         -9.1    %
Americas                     $  1,598.3              -3.0  %         -6.1    %
EMEA                         $  963.8                -4.2  %         -19.7   %
Excluding FX ^(1)                                    -2.2  %         -18.0   %
Asia                         $  463.9                4.6   %         4.6     %
                                                                             
                                                                             
                             Q2 FY13               Q2 FY12           Change
Operating Income             $  108.0              $ 118.9           -9.2    %
Operating Income                3.6      %           3.8   %         -27 bps
Margin
                                                                             

  ^(1)  Year-over-year revenue growth rate excluding the impact of changes
           in foreign currency exchange rates.
           

  *Reported revenue declined 2.3% year over year to $3.0 billion and pro
    forma revenue decreased 9.6% in reported dollars and 9.1% in constant
    dollars; sequentially, revenue increased 36% on a reported basis and 27%
    on a pro forma basis in constant dollars
  *Software, storage and services grew over 35% sequentially while storage
    and services led the portfolio elements that increased year over year
  *Operating income margin decreased by 27 basis points year over year and
    was up 202 basis points sequentially to 3.6% driven by the strong sales
    growth
  *Return on working capital (ROWC) decreased 800 basis points year over year
    primarily due to lower operating income and increased over 2,500 basis
    points sequentially due to the strong profit growth

Mr. Hamada further added, “In the December quarter, TS revenue increased 36%
sequentially and pro forma revenue grew 27% in constant dollars, slightly
above the high end of normal seasonality. Revenue growth was higher than
expected as customers were more willing to spend their IT budget dollars after
two quarters of below seasonal growth. In North America, our data suggests
that many of the IT projects that were delayed at the end of September were
completed in the December quarter, which helped drive TS’ higher than expected
growth. This strong revenue growth, when coupled with expense actions taken in
prior quarters, combined to drive sequential operating income dollars and
margin up 214% and 202 basis points, respectively. The sequential improvement
in profitability was consistent across the business as all three regions
improved both gross profit and operating income margins meaningfully. While
this quarter represented significant progress in TS’ financial performance, we
remain committed to build on this performance and deliver more consistent
results as we continue progress toward our long-term goals. In the first half
of fiscal 2013, we have invested in new growth opportunities by completing
several acquisitions that will strengthen our competitive position and enhance
the breadth of services we can offer to and through VAR partners. While
macroeconomic uncertainties could continue to weigh on IT spending, we feel
strongly that our competitive position and focus on solutions selling
positions us to leverage future growth into improved financial performance.”

Cash Flow/Buyback

  *Cash generated from operations was $326.4 million for the quarter and
    $690.3 million on a rolling four quarter basis
  *During the quarter, 2.5 million shares were repurchased under the $750
    million share repurchase program for an aggregate cost of $68.9 million.
    Since the program began in August 2011 through the end of the second
    fiscal quarter of 2013, 17.9 million shares have been repurchased for an
    aggregate cost of $525.5 million
  *Cash and cash equivalents at the end of the quarter was $815.3 million;
    net debt (total debt less cash and cash equivalents) was $1.18 billion

Kevin Moriarty, Chief Financial Officer, stated, “The strong operating income
performance and solid working capital management combined to generate $326
million of cash from operations during the quarter. Overall, the team did an
effective job of managing resources as a 6.3% decline in inventory, excluding
the impact of acquisitions and foreign currency, contributed to a 5.4 day
sequential reduction in the cash conversion cycle and a half turn improvement
in working capital velocity. Through the first six months of the fiscal year,
we have generated $407 million in cash from operations which, when combined
with our strong balance sheet, provides ample liquidity to invest in
profitable growth going forward.”

Outlook For 3rd Quarter of Fiscal 2013 Ending on March 30, 2013

  *EM sales are expected to be in the range of $3.625 billion to $3.925
    billion and TS sales are expected to be between $2.325 billion and $2.625
    billion
  *Consolidated sales are forecasted to be between $5.95 billion and $6.55
    billion
  *Adjusted diluted earnings per share (“EPS”) is expected to be in the range
    of $0.81 to $0.91 per share
  *The EPS guidance assumes 138.0 million average diluted shares outstanding
    used to determine earnings per share and a tax rate of 27% to 31%

The above EPS guidance does not include any potential restructuring charges or
any charges related to acquisitions and post-closing integration activities.
In addition, the above guidance assumes that the average Euro to U.S. Dollar
currency exchange rate for the third quarter of fiscal 2013 is $1.34 to €1.00.
This compares with an average exchange rate of $1.31 to €1.00 in the third
quarter of fiscal 2012 and $1.30 to €1.00 in the second quarter of fiscal
2013.

Forward-Looking Statements

This document contains certain "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. These statements are based on
management's current expectations and are subject to uncertainty and changes
in facts and circumstances. The forward-looking statements herein include
statements addressing future financial and operating results of Avnet and may
include words such as "will," "anticipate," "estimate," "forecast," "expect,"
believe," and "should," and other words and terms of similar meaning in
connection with any discussions of future operating or financial performance,
business prospects or market conditions. Actual results may vary materially
from the expectations contained in the forward-looking statements.

The following factors, among others, could cause actual results to differ
materially from those described in the forward-looking statements: the
Company's ability to retain and grow market share and to generate additional
cash flow, risks associated with any acquisition activities and the successful
integration of acquired companies, declines in sales, changes in business
conditions and the economy in general, changes in market demand and pricing
pressures, any material changes in the allocation of product or product
rebates by suppliers, allocations of products by suppliers, other competitive
and/or regulatory factors affecting the businesses of Avnet generally.

More detailed information about these and other factors is set forth in
Avnet's filings with the Securities and Exchange Commission, including the
Company's reports on Form 10-K, Form 10-Q and Form 8-K. Except as required by
law, Avnet is under no obligation to update any forward-looking statements,
whether as a result of new information, future events or otherwise.

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 in this document certain non-GAAP financial
information including adjusted operating income, adjusted net income and
adjusted diluted earnings per share, as well as revenue adjusted for the
impact of acquisitions and other items (as defined in the Pro forma (Organic)
Revenue section of this document). Management believes pro forma revenue is a
useful measure for evaluating current period performance as compared with
prior periods and for understanding underlying trends.

Management believes that operating income adjusted for restructuring,
integration and other items is a useful measure to help investors better
assess and understand the Company’s operating performance, especially 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. 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 some cases, for
measuring performance for compensation purposes.

Management believes net income and EPS adjusted for the impact of the items
described above is useful to investors because it provides a measure of the
Company’s net profitability on a more comparable basis to historical periods
and provides a more meaningful basis for forecasting future performance.
Additionally, because of management’s focus on generating shareholder value,
of which net profitability is a primary driver, management believes net income
and EPS excluding the impact of these items provides an important measure of
the Company’s net results of operations for the investing public.

Other metrics management monitors in its assessment of business performance
include return on working capital (ROWC), return on capital employed (ROCE)
and working capital velocity (WC velocity).

  *ROWC is defined as annualized operating income, excluding restructuring,
    integration and other items, divided by the sum of the monthly average
    balances of receivables and inventory less accounts payable.
  *ROCE is defined as annualized, tax effected operating income, excluding
    restructuring, integration and other items, divided by the monthly average
    balances of interest-bearing debt and equity (including the impact of
    restructuring, integration, impairment charges and other items) less cash
    and cash equivalents.
  *WC velocity is defined as annualized sales divided by the sum of the
    monthly average balances of receivable and inventory less accounts
    payable.

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

Second Quarter Fiscal 2013

                 
                     Second Quarter Ended Fiscal 2013
                                                                   Diluted
                     Op Income         Pre-tax             Net Income          EPS
                    $ in thousands, except per share data
GAAP results         $ 195,573         $ 168,894           $ 137,481           $ 0.99
Restructuring,
integration            24,906            24,906              19,885              0.14
and other
charges
Gain on
bargain              -                   (59     )           (23     )           0.00
purchase and
other
Income tax           -                 -                   (17,366 )          (0.12 )
adjustments
Total                 24,906           24,847            2,496             0.02  
adjustments
Adjusted             $ 220,479         $ 193,741          $ 139,977          $ 1.01  
results
                                                                               

Items impacting the second quarter of fiscal 2013 consisted of the following:

  *Restructuring, integration and other charges of $24.9 million pre-tax
    consisted of $8.5 million for facility exit-related costs, $7.6 million
    for integration-related costs, $7.3 million for severance, $3.0 million
    for transaction costs associated with recent acquisitions, $0.3 million
    for other charges, and a credit of $1.8 million to adjust prior year
    restructuring reserves no longer required;
  *A net gain consisting of an adjustment of $1.7 million pre-tax to increase
    the gain on bargain purchase recorded in the first quarter of fiscal 2013
    to adjust the net assets acquired, partially offset by a loss on
    divestiture of $1.7 million pre-tax related to a small business in TS
    Asia; and
  *An income tax adjustment of $17.4 million primarily related to a favorable
    settlement of a U.S. income tax audit for an acquired company.

Second Quarter Fiscal 2012

                 
                     Second Quarter Ended Fiscal 2012
                                                               Diluted
                     Op Income         Pre-tax           Net               EPS
                                                         Income
                    $ in thousands, except per share data
GAAP results         $ 230,889         $ 208,038         $ 147,023         $  0.98
Restructuring,
integration            34,505            34,505            23,563             0.16
and other
charges
Other                  -                 1,399             854                0.01
Income tax            -                -                539               -
adjustments
Total                 34,505           35,904           24,956            0.17
adjustments
Adjusted             $ 265,394         $ 243,942         $ 171,979         $  1.15
results
                                                                              

Items impacting the second quarter of fiscal 2012 consisted of the following:

  *Restructuring, integration and other charges of $34.5 million pre-tax
    related to cost reduction actions initiated during the second quarter and
    acquisition and integration charges associated with acquired businesses.
    The charges consisted of $19.8 million for severance, $7.4 million for
    facility exit costs, $3.4 million for integration costs, $3.1 million for
    transaction costs, $1.7 million for other restructuring charges, and a
    reversal of $0.9 million to adjust prior year restructuring reserves;
  *$1.4 million pre-tax related to the write-down of a small investment and
    the write-off of deferred financing costs associated with the early
    retirement of a credit facility; and
  *An income tax adjustment of $0.5 million primarily related to the
    combination of a favorable audit settlement and release of a valuation
    allowance on certain deferred tax assets which were determined to be
    realizable, mostly offset by changes to existing tax positions primarily
    for transfer pricing.

Pro Forma (Organic) Revenue

Pro forma or Organic revenue is defined as reported revenue adjusted for (i)
the impact of acquisitions by adjusting Avnet’s prior periods to include the
sales of businesses acquired as if the acquisitions had occurred at the
beginning of fiscal 2012 and (ii) the impact of the transfer of a business
from TS Americas to EM Americas, which did not have an impact to Avnet on a
consolidated basis but did impact the pro forma sales for the groups by
approximately $6 million in the second quarter of fiscal 2012. Sales taking
into account the combination of these adjustments are referred to as “pro
forma sales” or “organic sales.”

                                                    
                                           Acquisition/
                    Revenue                                       Pro forma
                                           Divested
                    as Reported            Revenue                Revenue
                    (in thousands)
Q1 Fiscal          $ 5,870,057            $  203,666             $ 6,073,723
2013
Q2 Fiscal           6,699,465              3,530                6,702,995
2013
Fiscal year        $ 12,569,522           $  207,196             $ 12,776,718
2013
                                                                  
Q1 Fiscal          $ 6,426,006            $  403,319             $ 6,829,325
2012
Q2 Fiscal            6,693,573               411,077               7,104,650
2012
Q3 Fiscal            6,280,557               313,469               6,594,026
2012
Q4 Fiscal           6,307,386              229,990              6,537,376
2012
Fiscal year        $ 25,707,522           $  1,357,855           $ 27,065,377
2012
                                                                    

“Acquisition Revenue” as presented in the preceding table includes the
acquisitions listed below.

                                                    
Acquired Business                     Operating                 Acquisition
                                      Group                     Date
Tekdata Interconnections,             EM                        October 2012
Limited
Magirus AG                            TS                        October 2012
Brightstar Partners, Inc. and         TS                        November 2012
BPS Software
Genilogix                             TS                        November 2012
                                                                

ROWC, ROCE and WC Velocity

The following table presents the calculation for ROWC, ROCE and WC velocity
(dollars in thousands).

                                                  
                                 Q2 FY13                        Q2 FY12
                                                                
Sales                           $ 6,699,465                    $ 6,693,573
Sales, annualized      (a)         26,797,859                     26,774,293
                                                                
Adjusted operating                220,479                        265,394
income (1)
Adjusted operating     (b)         881,917                        1,061,576
income, annualized
Adjusted effective                27.47      %                   29.43      %
tax rate (2)
Adjusted operating
income, net after      (c)       $ 639,654                      $ 749,154
tax
                                                                
Average monthly
working capital
    Accounts                    $ 4,662,211                    $ 4,565,435
    receivable
    Inventory                     2,362,990                      2,622,126
    Accounts payable             (3,037,915 )                  (3,109,372 )
    Average working    (d)       $ 3,987,286                   $ 4,078,189  
    capital
                                                                
Average monthly        (e)       $ 5,405,464                   $ 5,246,036  
total capital
                                                                
                                                                
ROWC = (b) / (d)                  22.12      %                   26.03      %
WC Velocity = (a) /               6.72                           6.57
(d)
ROCE = (c ) / (e)                 11.83      %                   14.28      %
                                                                

  ^(1)  See reconciliation to GAAP amounts in the preceding tables in this
           Non-GAAP Financial Information Section.
           
           Adjusted effective tax rate is based upon a year-to-date (full
           fiscal year rate for FY12) calculation excluding restructuring,
    ^(2)   integration and other charges and tax adjustments as described in
           the reconciliation to GAAP amounts in this Non-GAAP Financial
           Information Section.
           

Teleconference Webcast and Upcoming Events

Avnet will host a Webcast of its quarterly teleconference today at 2:00 p.m.
Eastern Time. The live Webcast event, as well as other financial information
including financial statement reconciliations of GAAP and non-GAAP financial
measures, will be available through www.ir.avnet.com. Please log onto the site
15 minutes prior to the start of the event to register or download any
necessary software. An archive copy of the presentation will also be available
after the Webcast.

For a listing of Avnet’s upcoming events and other information, please visit
Avnet’s investor relations website at www.ir.avnet.com.

About Avnet

Avnet, Inc. (NYSE:AVT), a Fortune 500 company, is one of the largest
distributors of electronic components, computer products and embedded
technology serving customers globally. Avnet accelerates its partners' success
by connecting the world's leading technology suppliers with a broad base of
customers by providing cost-effective, value-added services and solutions. For
the fiscal year ended June 30, 2012, Avnet generated revenue of $25.7 billion.
For more information, visit www.avnet.com. (AVT_IR)

AVNET, INC.
FINANCIAL HIGHLIGHTS
(MILLIONS EXCEPT PER SHARE DATA)

                               SECOND QUARTERS ENDED
                                   December 29,     December 31,
                                   2012 *               2011 *
                                                        
Sales                              $  6,699.5           $  6,693.6
                                                        
Income before income taxes            168.9                208.0
                                                        
Net income                            137.5                147.0
                                                        
Net income per share:
Basic                              $  1.01              $  1.00
Diluted                            $  0.99              $  0.98


                                   FIRST HALVES ENDED
                                   December 29,         December 31,
                                   2012 *               2011 *
                                                        
Sales                              $  12,569.5          $  13,119.6
                                                        
Income before income taxes            277.8                403.9
                                                        
Net income                            237.8                286.1
                                                        
Net income per share:
Basic                              $  1.71              $  1.91
Diluted                            $  1.69              $  1.88
                                                        
* See Notes to Consolidated Statements of Operations.



AVNET, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(THOUSANDS EXCEPT PER SHARE DATA)

                 SECOND QUARTERS ENDED             FIRST HALVES ENDED
                   DECEMBER 29,    DECEMBER 31,      DECEMBER 29,     DECEMBER 31,
                   2012 *            2011 *            2012 *             2011 *
                                                                          
Sales              $ 6,699,465       $ 6,693,573       $ 12,569,522       $ 13,119,579
Cost of sales       5,931,002       5,909,439       11,116,682       11,581,848 
                                                                          
Gross profit         768,463           784,134           1,452,840          1,537,731
                                                                          
Selling,
general and          547,984           518,740           1,094,980          1,049,273
administrative
expenses
Restructuring,
integration
and other           24,906          34,505          62,314           34,505     
charges (Note
1 *)
Operating            195,573           230,889           295,546            453,953
income
                                                                          
Other income         1,060             742               2,543              (4,634     )
(expense), net
Interest             (27,798   )       (22,194   )       (51,688    )       (44,065    )
expense
Gain on
bargain
purchase and         59                (1,399    )       31,350             (1,399     )
other (Note 2
*)
                                                                       
Income before        168,894           208,038           277,751            403,855
income taxes
                                                                          
Income tax           31,413            61,015            39,965             117,802
provision
                                                                       
Net income         $ 137,481        $ 147,023        $ 237,786         $ 286,053    
                                                                          
Net earnings
per share:
Basic              $ 1.01           $ 1.00           $ 1.71            $ 1.91       
Diluted            $ 0.99           $ 0.98           $ 1.69            $ 1.88       

Shares used to
compute
earnings per
share:
Basic               136,776         147,188         138,772          149,729    
Diluted             138,575         149,666         140,967          152,086    
                                                                          
* See Notes to Consolidated Statements of Operations.
                 
                 

AVNET, INC.
CONSOLIDATED BALANCE SHEETS
(THOUSANDS)

                                       DECEMBER 29,     JUNE 30,
                                           2012                 2012
                                                                
Assets:
Current assets:
Cash and cash equivalents                  $ 815,279            $ 1,006,864
Receivables, net                             5,161,446            4,607,324
Inventories                                  2,223,836            2,388,642
Prepaid and other current assets            249,218             251,609
Total current assets                         8,449,779            8,254,439
Property, plant and equipment, net           491,936              461,230
Goodwill                                     1,248,903            1,100,621
Other assets                                358,912             351,576
                                                                
Total assets                                10,549,530          10,167,866
                                                                
Less liabilities:
Current liabilities:
Borrowings due within one year               490,270              872,404
Accounts payable                             3,565,375            3,230,765
Accrued expenses and other                  714,350             695,483
Total current liabilities                    4,769,995            4,798,652
Long-term debt                               1,508,196            1,271,985
Other long-term liabilities                 165,442             191,497
                                                                
Total liabilities                           6,443,633           6,262,134
                                                                
Shareholders' equity                       $ 4,105,897          $ 3,905,732
                                                                  
                                                                  

AVNET, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(THOUSANDS)

                                        FIRST HALVES ENDED
                                            DECEMBER 29,      DECEMBER 31,
                                            2012                  2011
Cash flows from operating
activities:
                                                                  
Net income                                  $ 237,786             $ 286,053
                                                                  
Non-cash and other reconciling
items:
Depreciation and amortization                 57,840                44,653
Deferred income taxes                         532                   9,156
Stock-based compensation                      27,684                22,395
Gain on bargain purchase and other            (31,350   )           1,399
Other, net                                    30,829                34,081
                                                                  
Changes in (net of effects from
businesses acquired):
Receivables                                   (399,943  )           (99,251  )
Inventories                                   246,192               2,681
Accounts payable                              250,862               46,590
Accrued expenses and other, net              (13,024   )          (101,942 )
                                                                  
Net cash flow provided by operating          407,408             245,815  
activities
                                                                  
Cash flows from financing
activities:
Issuance of notes in public                   349,258               -
offering, net of issuance cost
(Repayments of) borrowings under
accounts receivable securitization            (366,000  )           450,000
program, net
(Repayments of) proceeds from bank            (172,481  )           18,034
debt, net
Proceeds from (repayments of) other           647                   (509     )
debt, net
Repurchases of common stock                   (207,192  )           (220,951 )
Other, net                                   3,351               776      
                                                                  
Net cash flows (used for) provided           (392,417  )          247,350  
by financing activities
                                                                  
Cash flows from investing
activities:
Purchases of property, plant, and             (55,298   )           (70,850  )
equipment
Cash proceeds from sales of                   37                    114
property, plant and equipment
Acquisitions of operations, net of            (170,960  )           (107,573 )
cash acquired
Proceeds from divestitures, net of           3,613               -        
cash divested
                                                                  
Net cash flows used for investing            (222,608  )          (178,309 )
activities
                                                                  
Effect of exchange rates on cash             16,032              (21,670  )
and cash equivalents
                                                                  
Cash and cash equivalents:
- (decrease) increase                         (191,585  )           293,186
- at beginning of period                     1,006,864           675,334  
                                                                  
- at end of period                          $ 815,279            $ 968,520  
                                                                             
                                                                             

AVNET, INC.
SEGMENT INFORMATION
(MILLIONS)
               
                  SECOND QUARTERS ENDED         FIRST HALVES ENDED
                 
                   DECEMBER      DECEMBER        DECEMBER 29,   DECEMBER 31,
                   29,             31,
SALES:             2012            2011            2012             2011
                                                                    
Electronics        $ 3,673.5       $ 3,595.6       $ 7,326.6        $ 7,411.9
Marketing
                                                                    
Technology           3,026.0         3,098.0         5,242.9          5,707.7
Solutions
                                                                 
Consolidated       $ 6,699.5      $ 6,693.6      $ 12,569.5      $ 13,119.6 
                                                                    
OPERATING
INCOME (LOSS):
                                                                    
Electronics        $ 140.1         $ 174.9         $ 286.4          $ 366.1
Marketing
                                                                    
Technology           108.0           118.9           142.3            183.9
Solutions
                                                                    
Corporate           (27.6   )      (28.4   )      (70.9    )      (61.5    )
                                                                    
                   $ 220.5         $ 265.4         $ 357.8          $ 488.5
                                                                    
Restructuring,
integration         (24.9   )      (34.5   )      (62.3    )      (34.5    )
and other
charges
                                                                    
Consolidated       $ 195.6        $ 230.9        $ 295.5         $ 454.0    
                                                                    

AVNET, INC.
NOTES TO CONSOLIDATED STATEMENTS OF OPERATIONS
SECOND QUARTER AND FIRST HALF OF FISCAL 2013
    
      The results for the second quarter of fiscal 2013 included
      restructuring, integration and other charges which totaled $24,906,000
      pre-tax, $19,885,000 after tax and $0.14 per share on a diluted basis.
      Restructuring charges included therein were $16,109,000 pre-tax
(1)   consisting of $7,295,000 for severance, $8,516,000 for facility exit
      costs and $298,000 for other restructuring charges. Integration costs
      and acquisition transaction costs were $7,575,000 pre-tax and $3,012,000
      pre-tax, respectively. In addition, the Company recorded a credit of
      $1,790,000 pre-tax to adjust reserves related to prior year
      restructuring activity that were no longer required.
      
      The results for the first half of fiscal 2013 included restructuring,
      integration and other charges which totaled $62,314,000 pretax,
      $46,986,000 after tax and $0.33 per share on a diluted basis.
      Restructuring charges included therein were $46,319,000 pre-tax
      consisting of $33,195,000 for severance, $12,652,000 for facility exit
      costs and $472,000 for other restructuring charges. Integration costs
      and acquisition transaction costs were $12,624,000 pre-tax and
      $5,792,000 pre-tax, respectively. In addition, the Company recorded a
      credit of $2,421,000 pre-tax to adjust reserves related to prior year
      restructuring activity that were no longer required.
      
      Severance charges recorded in the first half of fiscal 2013 related to
      over 800 employees in sales, administrative and support functions in
      connection with the cost reduction actions taken in all three regions in
      both operating groups with employee reductions of approximately 560 in
      EM, 225 in TS and the remaining in business support functions. Facility
      exit costs for vacated facilities related to fourteen facilities in the
      Americas, ten in EMEA and five in Asia and consisted of reserves for
      remaining lease liabilities and the write-down of fixed assets.
      
      The results for the second quarter and first half of fiscal 2012
      included restructuring, integration and other charges which totaled
      $34,505,000 pre-tax, $23,563,000 after tax and $0.16 per share on a
      diluted basis. Restructuring charges included therein were $28,938,000
      pre-tax consisting of $19,792,000 for severance, $7,406,000 for facility
      exit costs and $1,740,000 for other restructuring charges, primarily
      other onerous lease liabilities. Integration costs and acquisition
      transaction costs were $3,449,000 pre-tax and $3,066,000 pre-tax,
      respectively. In addition, the Company recorded the reversal of $948,000
      pre-tax to adjust reserves related to prior year restructuring activity
      which were no longer required.
      
      Severance charges recorded in the second quarter of fiscal 2012 related
      to over 350 employees in sales, administrative and finance functions in
      connection with the cost reduction actions taken in all three regions in
      both operating groups with employee reductions of approximately 250 in
      EM and 100 in TS. Facility exit costs for vacated facilities related to
      nine facilities in the Americas, three in EMEA and two in Asia and
      consisted of reserves for remaining lease liabilities and the write-down
      of leasehold improvements and other fixed assets.
      
      During the first quarter of fiscal 2013, the Company acquired Internix,
      Inc., a company publicly traded on the Tokyo Stock Exchange, through a
      tender offer. After assessing the assets acquired and liabilities
      assumed, the consideration paid was below book value even though the
      price paid per share represented a premium to the trading levels at that
      time. Accordingly, the Company recognized a gain on bargain purchase of
(2)   $31,291,000 pre- and after tax and $0.22 per share on a diluted basis in
      the first quarter of fiscal 2013. During the second quarter of fiscal
      2013, the Company determined an adjustment to the net assets acquired
      was required and, as a result, recorded an increase to the gain on
      bargain purchase of $1,727,000 pre- and after tax and $0.01 per share on
      a diluted basis for a total gain on bargain purchase related to Internix
      for the first half of fiscal 2013 of $33,018,000 pre- and after tax and
      $0.23 per share on a diluted basis.
      
      Also during the second quarter of fiscal 2013, the Company divested of a
      small business in TS Asia for which it recognized a loss of $1,667,000
      pre-tax, $1,704,000 after tax and $0.01 per share on a diluted basis
      which was recorded in “gain on bargain purchase and other.” The
      combination of this loss and the gain on bargain purchase noted above
      resulted in the gain of $59,000 pretax in “gain on bargain purchase and
      other” for the second quarter of fiscal 2013 and a gain of $31,350,000
      for the first half of fiscal 2013.
      
      During the first half of fiscal 2012, the Company recognized other
      charges of $1,399,000 pre-tax, $854,000 after tax and $0.01 per share on
      a diluted basis, which related to a write-down of an investment in a
      small technology company and the write-off of certain deferred financing
      costs associated with the early termination of a credit facility.

Contact:

Investor Relations Contact:
Avnet, Inc.
Vincent Keenan
Investor Relations
(480) 643-7053
investorrelations@avnet.com
 
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