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Avnet, Inc. Reports First Quarter Fiscal Year 2014 Results

  Avnet, Inc. Reports First Quarter Fiscal Year 2014 Results

 Revenue Growth and Operating Leverage Drive Strong Year-Over-Year EPS Growth

Business Wire

PHOENIX -- October 24, 2013

Avnet, Inc. (NYSE:AVT) today announced results for the first quarter fiscal
year 2014 ended September28, 2013.

Q1 Fiscal 2014 Results

                             FIRST QUARTERS ENDED
                              September 28,    September 29,   
                             2013                2012                Change 
                              $ in millions, except per share data
                              
Sales                         $   6,345.5         $   5,870.1         8.1    %
                                                                             
GAAP Operating Income             179.0               100.0           79.0   %
Adjusted Operating Income         199.5               144.5           38.1   %
^(1)
                                                                             
GAAP Net Income                   120.6               100.3           20.3   %
Adjusted Net Income ^(1)          126.0               88.9            41.7   %
                                                                             
GAAP Diluted EPS              $   0.86            $   0.70            22.9   %
Adjusted Diluted EPS ^(1)     $   0.90            $   0.62            45.2   %

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

  *Sales for the quarter ended September 28, 2013 increased 8.1% year over
    year to $6.3 billion; organic revenue (as defined later in the document)
    grew 3.7% year over year and 3.5% in constant currency
  *Adjusted operating income of $199.5 million increased 38.1% year over year
    and adjusted operating income margin of 3.1% increased 68 basis points
    year over year
  *Adjusted net income of $126.0 million increased 41.7% and adjusted diluted
    earnings per share of $0.90 increased 45.2% year over year, primarily due
    to higher operating income at both operating groups as a result of revenue
    growth and the impact of cost reductions implemented in the prior fiscal
    year

Rick Hamada, Chief Executive Officer, commented, “Our team kicked off the new
fiscal year with a solid performance as both operating groups leveraged
year-over-year revenue growth into increased margins and returns. Enterprise
revenue increased 8.1% from the year ago quarter and adjusted operating income
grew approximately five times faster than revenue driven primarily by our
disciplinedapproach toportfolioactionsand expense management throughout
fiscal 2013. Adjusted operating income margin of 3.1% increased 68 basis
points year over year and return on working capital was up 458 basis points to
19.8%. This represents the first time in seven quarters that these two
important metrics expanded year over year. With our improving performance and
overall financial profile, we were also pleased to announce our decision to
initiate adividendduring our first quarter. Given our confidence in, and
commitment to, long-term shareholder value creation, we believed it was an
appropriate time to incorporate a more consistent element of returning cash to
shareholders as partof ourongoing capital allocation priorities. With four
consecutive quarters of seasonal growth and a strong balance sheet, we are
positioned to build on this performance and continue progress toward our
long-term goals.”


Avnet Electronics Marketing Results

                                             Year-over-Year Growth Rates
                             Q1 FY14               Reported       Organic
                             Revenue              Revenue          Revenue 
                             (in millions)
EM Total                     $   3,938.1           7.8       %       8.5     %
Excluding FX ^(1)                                  7.3       %       8.0     %
Americas                     $   1,199.7           -6.8      %       1.2     %
EMEA                         $   1,097.9           14.5      %       13.4    %
Excluding FX ^(1)                                  8.8       %       7.7     %
Asia                         $   1,640.5           16.6      %       11.1    %
                                                                             
                             Q1 FY14              Q1 FY13          Change  
Operating Income             $   175.8             $   149.1         17.9    %
Operating Income             4.5           %       4.1       %       38 bps
Margin

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

  *Reported revenue increased 7.8% year over year to $3.9 billion while
    organic revenue was up 8.0% in constant currency
  *After adjusting for acquisitions, the transfer of certain operations from
    EM to TS and currency, sequential revenue growth of 1.2% was at the high
    end of normal seasonality as better than expected growth in Asia offset
    seasonal declines in the western regions
  *Operating income margin of 4.5% increased 38 basis points from the year
    ago quarter primarily due to an improvement in the Americas region
  *Working capital velocity increased 4.9% year over year primarily due to an
    improvement in inventory turns
  *Return on working capital (ROWC) increased 302 basis points year over year
    due primarily to higher operating income

Mr. Hamada added, “Similar to the June quarter, EM sales were at the high end
of normal seasonality as organic revenue in constant currency increased 1.2%
sequentially with strong demand in the Asia region offsetting seasonal
declines in the western regions. Asia revenue grew 12.6% sequentially, which
helped drive EM’s year-over-year organic growth to 8.0% in constant currency.
Operating income margin was flat sequentially and increased 38 basis points
from the year ago quarter due to an improvement in the Americas region
partially offset by a decline in EMEA and the geographic mix shift to Asia.
The Asia region, which grew to represent 42% of EM sales this quarter,
delivered record revenue and operating income while driving returns to their
highest level in three years. In the EMEA region, we recently completed the
first step of our acquisition of MSC Investoren, which will strengthen our
position in semiconductor distribution and allow us to tap the embedded
systems marketplace for new growth opportunities in Europe. With a strong
competitive position and year-over-year growth rates improving, we expect to
capitalize on profitable growth opportunities and drive further improvement in
margins and returns across the EM portfolio.”


Avnet Technology Solutions Results

                                            Year-over-Year Growth Rates
                              Q1 FY14             Reported         Organic
                              Revenue             Revenue             Revenue
                              (in millions)
TS Total                      $  2,407.4          8.6      %          -3.3  %
Excluding FX ^(1)                                 8.9      %          -3.0  %
Americas                      $  1,288.9          10.7     %          -0.8  %
EMEA                          $  694.3            9.3      %          -10.5 %
Excluding FX^(1)                                  6.1      %          -13.1 %
Asia                          $  424.2            1.8      %          2.3   %
                                                                      
                              Q1 FY14             Q1 FY13             Change
Operating Income              $  62.6             $  38.7             61.9  %
Operating Income Margin       2.6         %       1.7      %          86 bps

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

  *Reported revenue increased 8.6% year over year to $2.4 billion and organic
    revenue declined 3.0% in constant currency
  *Operating income margin increased 86 basis points year over year to 2.6%
    primarily due to the improvements in the Americas and Asia regions
  *Return on working capital (ROWC) increased 632 basis points year over year
    primarily due to higher operating income
  *At a product level, year over year growth in services, storage and
    software was partially offset by a decline in servers

Mr. Hamada further added, “In the September quarter, TS revenue was within our
expected range, though at the lower end of expectations. Revenue of $2.4
billion decreased 8.1% sequentially while year-over-year organic revenue was
down 3.0% in constant currency. Organic revenue declined 11.1% sequentially in
constant currency as compared with normal seasonality of down 5 to 10 percent.
Operating income grew 61.9% from the year ago quarter driven primarily by an
improvement in gross profit and from cost reduction initiatives implemented in
fiscal 2013. At a regional level, both the Americas and Asia regions realized
significant improvements in profitability, which contributed to an 86 basis
point improvement in operating income margin from the year ago quarter. With
the transfer of EM’s reverse logistics operations to the TS services offerings
this quarter, we are further integrating our customer facing resources to
leverage our VAR base to accelerate growth in higher margin services focused
on software, education and lifecycle solutions. Despite some challenges in the
marketplace, our focus on converged solutions supported by a broad line card
and expanded services, positions us to capitalize on growth opportunities as
we enter the seasonally strong December quarter.”

Cash Flow/Dividend

  *Cash used for operations was $126 million for the quarter
  *Cash flow from operations on a rolling four quarter basis was $489 million
  *The Company paid a dividend of $0.15 per share or $21 million in total
  *Cash and cash equivalents at the end of the quarter was $866 million; net
    debt (total debt less cash and cash equivalents) was approximately $1.2
    billion

Kevin Moriarty, Chief Financial Officer, stated, “As is typical for us in a
September quarter, we used some cash for operations as working capital grew
faster than income primarily due to an increase in inventory and a decrease in
accounts payable. Even with this growth in working capital, our net days
remained consistent with the year ago quarter, our working capital velocity
improved and we exited September with $866 million of cash. We also returned
$21 million to shareholders via our recently announced dividend and have
approximately $225 million available in our share repurchase program. With our
dividend and share repurchase program in place, coupled with our strong
financial position, we are able to optimize returns for our shareholders
without impairing our ability to invest for future growth.”

Outlook For 2nd Quarter of Fiscal 2014 Ending on December 28, 2013

  *EM sales are expected to be in the range of $3.80 billion to $4.10 billion
    and TS sales are expected to be between $2.85 billion to $3.15 billion
  *After adjusting for acquisitions and changes in foreign currency exchange
    rates, the midpoint of the above guidance for EM and TS revenue would
    represent sequential growth of approximately -3% and +24%, respectively
  *Consolidated sales are forecasted to be between $6.65 billion and $7.25
    billion
  *Adjusted diluted earnings per share (“EPS”) is expected to be in the range
    of $1.05 to $1.15 per share
  *The EPS guidance assumes 139.7 million average diluted shares outstanding
    and a tax rate of 27% to 31%

The above EPS guidance excludes the amortization of intangibles and 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 second
quarter of fiscal 2014 is $1.35 to €1.00. This compares with an average
exchange rate of $1.30 to €1.00 in the second quarter of fiscal 2013 and $1.32
to €1.00 in the first quarter of fiscal 2014.

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, and 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 sales adjusted for the impact
of acquisitions and other items (as defined in the Organic Revenue section of
this document). Management believes organic 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 (i) restructuring,
integration and other charges, and (ii) amortization of acquired intangible
assets, 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 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 some cases, for
measuring performance for compensation purposes.

Management believes net income and EPS adjusted for (i) the impact of the
items described above, (ii) certain items impacting income tax expense and
(iii) the gain on legal settlement, bargain purchase and other 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 adjusted operating income (as defined above)
    divided by the sum of the monthly average balances of receivables and
    inventory less accounts payable.
  *ROCE is defined as annualized, tax effected adjusted operating income (as
    defined above) divided by the monthly average balances of interest-bearing
    debt and equity (including the impact of adjustments to operating income
    discussed above) 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, results presented in accordance with
GAAP.


First Quarter Fiscal 2014

                  First Quarter Fiscal 2014
                     Operating     Income                        Diluted
                                       Before
                     Income           Income           Net              EPS
                                       Taxes             Income
                     $ in thousands, except per share data
GAAP results         $ 178,987         $ 171,942         $ 120,624         $ 0.86
Restructuring,
integration          12,099            12,099            8,851             0.06
and other
charges
Gain on legal
settlement,
bargain              —                 (19,137   )       (11,686   )       (0.08  )
purchase and
other
Amortization
of intangible        8,394             8,394             5,702             0.04
assets
Income tax           —                —                2,496            0.02   
adjustments
Total                20,493           1,356            5,363            0.04   
adjustments
Adjusted             $ 199,480        $ 173,298        $ 125,987        $ 0.90 
results
                                                                                  

Items impacting the first quarter of fiscal 2014 consisted of the following:

  *restructuring, integration and other charges of $12.1 million pre-tax
    consisted of $4.2 million for severance, $1.2 million for facility exit
    related costs, $0.3 million for other charges, $3.0 million for other
    costs including acquisition costs, $4.2 million for integration-related
    costs, and a benefit of $0.8 million to adjust prior year restructuring
    reserves. Restructuring, integration and other charges after tax was $8.9
    million;
  *a gain on legal settlement of $19.1 million pre-tax and $11.7 million
    after tax related to an award payment received during the quarter;
  *amortization expense related to acquired intangible assets of $8.4 million
    pre-tax and $5.7 million after tax; and
  *an income tax adjustment of $2.5 million primarily related to certain
    items impacting the effective income tax rate in the first quarter of
    fiscal 2014.


First Quarter Fiscal 2013

                  First Quarter Fiscal 2013
                     Operating     Income                        Diluted
                                       Before
                     Income           Income           Net              EPS     
                                       Taxes             Income
                     $ in thousands, except per share data
GAAP results         $ 99,973          $ 108,857         $ 100,305         $  0.70
Restructuring,
integration          37,408            37,408            27,101            0.19
and other
charges
Gain on legal
settlement,
bargain              —                 (31,291   )       (31,291   )       (0.22   )
purchase and
other
Amortization
of intangible        7,088             7,088             4,962             0.03
assets
Income tax           —                —                (12,184   )       (0.08   )
adjustments
Total                44,496           13,205           (11,412   )       (0.08   )
adjustments
Adjusted             $ 144,469        $ 122,062        $ 88,893         $  0.62 
results
                                                                                   

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

  *restructuring, integration and other charges of $37.4 million pre-tax
    consisted of $25.9 million for severance, $4.0 million for facility exit
    related costs, $0.3 million for other charges, $2.8 million primarily for
    transaction costs associated with recent acquisitions, $5.0 million for
    integration-related costs, and a benefit of $0.6 million to adjust prior
    year restructuring reserves. Restructuring, integration and other charges
    after tax was $27.1 million;
  *a gain on bargain purchase of $31.3 million pre- and after tax related to
    the Internix, Inc. acquisition for which the gain was not taxable;
  *amortization expense related to acquired intangible assets of $7.1 million
    pre-tax and $5.0 million after tax; and
  *an income tax adjustment of $12.2 million primarily related to certain
    items impacting the effective income tax rate in the first quarter of
    fiscal 2013 including a favorable settlement of an income tax audit.

Organic Revenue

Organic revenue is defined as reported sales adjusted for (i) the impact of
acquisitions and divestitures by adjusting Avnet’s prior periods 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 and (ii)the impact of the transfer of a portion of
certain operations between the EM and TS operating groups, which did not have
an impact to Avnet on a consolidated basis but did impact the organic sales
for the TS and EM operating groups by $119.6 million in the first quarter of
fiscal 2013. Sales taking into account the combination of these adjustments
are referred to as “organic revenue.”

                                                      
                                            Acquisition/
                       Revenue              (Divestiture)       Organic
                       as Reported          Revenue             Revenue
                       (in thousands)
Q1 Fiscal 2014         $ 6,345,475         $   —              $ 6,345,475
                                                                
Q1 Fiscal 2013         $ 5,870,057          $   250,029         $ 6,120,086
Q2 Fiscal 2013         6,699,465            50,215              6,749,680
Q3 Fiscal 2013         6,298,699            26,922              6,325,621
Q4 Fiscal 2013         6,590,703           8,998              6,599,701
Fiscal year 2013       $ 25,458,924        $   336,164        $ 25,795,088
                                                                  

"Acquisition/ (Divestiture) Revenue" as presented in the preceding table
includes the effects of the acquisitions and divestitures included below:

Fiscal 2014
Seamless Technologies, Inc., in July 2013 in the TS Americas region
Nisko Semiconductors Ltd., in July 2013 in the EM EMEA region

Fiscal 2013
RTI Holdings, in April 2013 in the EM Asia Region
Divestiture in March 2013 of a small business in the EM Americas region
TSSLink, Inc., in December 2012 in the TS Americas region
Universal Semiconductor, Inc., in December 2012 in the EM Americas region
Genilogix, in November 2012 in the TS Americas region
Divestiture in December 2012 of a small business in the TS Asia region
Brightstar Partners, Inc., in November 2012 in the TS Americas region
Magirus AG, in October 2012 in the TS EMEA region
Tekdata Interconnections, Limited, in October 2012 in the EM EMEA region
Internix, Inc., in August 2012 in the EM Asia region
C.R.G. Electronics, Ltd., in August 2012 in the EM EMEA region
Pepperweed Consulting, in August 2012 in the TS Americas region


ROWC, ROCE and WC Velocity

The following table presents the calculation for ROWC, ROCE and WC velocity.

                             Q1 FY14                  Q1 FY13
Sales                              $  6,345,475                 $ 5,870,057
Sales,            (a)              $  25,381,900                $ 23,480,229
annualized
Adjusted
operating                          $  199,480                   $ 144,469
income (1)
Adjusted
annualized        (b)              $  797,920                   $ 577,876
operating
income
Adjusted
effective                             27.3        %               27.5       %
tax rate
(2)
Adjusted
annualized
operating         (c)              $  580,088                   $ 419,076
income,
after tax
Average
monthly
working
capital
Accounts                           $  4,680,691                 $ 4,353,226
receivable
Inventory                          $  2,465,802                 $ 2,448,301
Accounts                           $  (3,125,452  )             $ (3,015,599 )
payable
Average
working           (d)              $  4,021,041                $ 3,785,929  
capital
Average
monthly           (e)              $  5,532,305                $ 5,110,368  
total
capital
ROWC = (b)                            19.8        %               15.3       %
/ (d)
WC Velocity                           6.3                         6.2
= (a) / (d)
ROCE = (c)                            10.5        %               8.2        %
/ (e)
                                                                             
(1) See reconciliation to GAAP amounts in the preceding tables in this
Non-GAAP Financial Information section.
(2) Adjusted effective tax rate is based upon the anticipated annual effective
tax rate, excluding the tax effect of the items described above 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 29, 2013, Avnet generated revenue of $25.5 billion.
For more information, visit www.avnet.com. (AVT_IR)


AVNET, INC.
FINANCIAL HIGHLIGHTS
(MILLIONS EXCEPT PER SHARE DATA)
(UNAUDITED)
                              First Quarters Ended
                                 September 28,    September 29,
                                 2013                2012
Sales                            $   6,345.5         $   5,870.1
Income before income taxes       171.9               108.9
Net income                       120.6               100.3
Net income per share:
Basic                            $   0.88            $   0.71
Diluted                          $   0.86            $   0.70
                                                         


AVNET, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(THOUSANDS EXCEPT PER SHARE DATA)
(UNAUDITED)
                                          First Quarters Ended
                                             September 28,    September 29,
                                             2013                2012
Sales                                        $ 6,345,475         $ 5,870,057
Cost of sales                                5,610,305          5,185,680   
Gross profit                                 735,170             684,377
Selling, general and administrative          544,084             546,996
expenses
Restructuring, integration and other         12,099             37,408      
charges (Note 1*)
Operating income                             178,987             99,973
Other income (expense), net                  795                 1,483
Interest expense                             (26,977     )       (23,890     )
Gain on legal settlement, bargain            19,137             31,291      
purchase and other (Note 2*)
Income before income taxes                   171,942             108,857
Income tax provision                         51,318             8,552       
Net income                                   $ 120,624          $ 100,305   
Net earnings per share:
Basic                                        $ 0.88             $ 0.71      
Diluted                                      $ 0.86             $ 0.70      
Shares used to compute earnings per
share:
Basic                                        137,414            140,767     
Diluted                                      139,724            143,359     
Cash dividends paid per common share         $ 0.15             $ —         
* See Notes to Consolidated Statements of Operations


AVNET, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(THOUSANDS)
(UNAUDITED)

                                     September 28, 2013    June 29, 2013
Assets:
Current assets:
Cash and cash equivalents               $   865,613              $  1,009,343
Receivables, net                        4,820,070                4,868,973
Inventories                             2,510,777                2,264,341
Prepaid and other current assets        222,380                 214,221
Total current assets                    8,418,840                8,356,878
Property, plant and equipment,          505,229                  492,606
net
Goodwill                                1,290,344                1,261,288
Other assets                            343,851                 363,908
Total assets                            $   10,558,264          $  10,474,680
Liabilities and Shareholders'
Equity:
Current liabilities:
Borrowings due within one year          $   876,946              $  838,190
Accounts payable                        3,184,037                3,278,152
Accrued expenses and other              658,619                 705,102
Total current liabilities               4,719,602                4,821,444
Long-term debt                          1,202,303                1,206,993
Other long-term liabilities             140,886                 157,118
Total liabilities                       6,062,791                6,185,555
Shareholders’ equity                    4,495,473               4,289,125
Total liabilities and                   $   10,558,264          $  10,474,680
shareholders’ equity
                                                                    


AVNET, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(THOUSANDS)
(UNAUDITED)
                                          First Quarters Ended
                                             September 28,    September 29,
                                             2013                2012
Cash flows from operating activities:
Net income                                   $  120,624          $ 100,305
Non-cash and other reconciling items:
Depreciation and amortization                29,291              28,208
Deferred income taxes                        9,544               (2,889      )
Stock-based compensation                     18,730              18,905
Gain on bargain purchase                     —                   (31,291     )
Other, net                                   23,842              14,988
Changes in (net of effects from
businesses acquired):
Receivables                                  89,718              277,687
Inventories                                  (220,165    )       102,672
Accounts payable                             (128,045    )       (382,870    )
Accrued expenses and other, net              (69,730     )       (44,738     )
Net cash flows (used for) provided by        (126,191    )       80,977      
operating activities
                                                                 
Cash flows from financing activities:
(Repayments of) borrowings under
accounts receivable securitization           (32,000     )       41,000
program, net
Borrowings of bank and other debt, net       67,773              131,140
Repurchases of common stock                  —                   (128,707    )
Dividends paid on common stock               (20,620     )
Other, net                                   3,871              1,280       
Net cash flows provided by financing         19,024             44,713      
activities
                                                                 
Cash flows from investing activities:
Purchases of property, plant and             (27,384     )       (24,385     )
equipment
Cash proceeds from sale of assets            1,664               304
Acquisitions of businesses, net of           (20,950     )       (87,176     )
cash acquired
Cash proceeds from divestitures, net         —                  4,500       
of cash divested
Net cash flows used for investing            (46,670     )       (106,757    )
activities
                                                                
Effect of exchange rate changes on           10,107             17,236      
cash and cash equivalents
                                                                 
Cash and cash equivalents:
— (decrease) increase                        (143,730    )       36,169
— at beginning of period                     1,009,343          1,006,864   
— at end of period                           $  865,613         $ 1,043,033 
                                                                             


AVNET, INC.
SEGMENT INFORMATION
(MILLIONS)
(UNAUDITED)

                                          First Quarters Ended
                                             September 28,    September 29,
                                             2013                2012
Sales:
Electronics Marketing                        $  3,938.1          $  3,653.2
Technology Solutions                         2,407.4            2,216.9     
Consolidated                                 $  6,345.5         $  5,870.1  
Operating Income:
Electronics Marketing                        $  175.8            $  149.1
Technology Solutions                         62.6                38.7
Corporate                                    (38.9       )       (43.3       )
                                             199.5               144.5
Restructuring, integration and other         (12.1       )       (37.4       )
charges
Amortization of intangible assets            (8.4        )       (7.1        )
Consolidated Operating Income                $  179.0           $  100.0    
                                                                             


AVNET, INC.
NOTES TO CONSOLIDATED STATEMENTS OF OPERATIONS
FIRST QUARTER OF FISCAL 2014

          The results for the first quarter of fiscal 2014 included
          restructuring, integration and other charges of $12,099,000 pre-tax,
          $8,851,000 after tax and $0.06 per share on a diluted basis.
          Restructuring charges included therein were $5,716,000 pre-tax
          consisting of $4,202,000 for severance, $1,180,000 for facility exit
(1)    costs and fixed asset write downs, and $334,000 for other
          restructuring charges. Integration costs and other costs including
          acquisition costs were $4,157,000 pre-tax and $3,053,000 pre-tax,
          respectively. The Company recorded a benefit of $827,000 pre-tax
          primarily to adjust reserves related to prior year restructuring
          activity.
          
          The results for the first quarter of fiscal 2013 included
          restructuring, integration and other charges which totaled
          $37,408,000 pre-tax, $27,101,000 after tax and $0.19 per share on a
          diluted basis. Restructuring charges included therein were
          $30,210,000 pre-tax consisting of $25,900,000 for severance,
          $3,967,000 for facility exit costs and fixed asset write downs, and
          $343,000 for other restructuring charges. Integration costs and
          other costs including acquisition costs were $5,049,000 pre-tax and
          $2,780,000 pre-tax, respectively. The Company recorded a benefit of
          $631,000 pre-tax primarily to adjust reserves related to prior year
          restructuring activity.
          
          During the first quarter of fiscal 2014, the Company received an
          award payment from the settlement of a class action proceeding
(2)       against certain manufacturers of LCD flat panel displays resulting
          in a gain of $19.1 million before tax, $11.7 million after tax and
          $0.08 per share on a diluted basis.
          
          During the first quarter of fiscal 2013, the Company recognized a
          gain on bargain purchase of $31,291,000 before and after tax and
          $0.22 per share on a diluted basis. In August 2012, 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
          the fair value of the acquired net assets and, as a result, the
          Company recognized the gain.

Contact:

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