Avnet, Inc. Reports Third Quarter Fiscal Year 2014 Results

  Avnet, Inc. Reports Third Quarter Fiscal Year 2014 Results   Continued Progress at Electronics Marketing Drives Year-Over-Year Growth in                                Revenue and EPS  Business Wire  PHOENIX -- April 24, 2014  Avnet, Inc. (NYSE:AVT) today announced results for the third quarter fiscal year 2014 ended March29, 2014.  Q3 Fiscal 2014 Results                                                   THIRD QUARTERS ENDED                          March 29, 2014      March 30, 2013      Change                           $ in millions, except per share data Sales                     $6,683.6            $6,298.7            6.1   %                                                                              GAAP Operating Income     184.8                 167.6                 10.3  % Adjusted Operating        223.8                 203.7                 9.9   % Income ^(1)                                                                              GAAP Net Income           113.9                 86.2                  32.1  % Adjusted Net Income       144.1                 131.5                 9.6   % ^(1)                                                                              GAAP Diluted EPS          $0.81                 $0.62                 30.6  % Adjusted Diluted EPS      $1.03                 $0.95                 8.4   % ^(1) ^(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 March29, 2014 increased 6.1% year over year     to $6.7 billion; organic sales (as defined later in the document) grew     3.7% year over year and 3.5% in constant currency   *Gross profit margin of 12.0% increased 61 basis points sequentially and     was essentially flat with the year ago quarter   *Adjusted operating income of $223.8 million increased 9.9% and adjusted     operating income margin of 3.3% increased 12 basis points year over year   *Adjusted net income of $144.1 million increased 9.6% and adjusted diluted     earnings per share of $1.03 increased 8.4% year over year  Rick Hamada, Chief Executive Officer, commented, “Our enterprise level results reflect a third consecutive quarter of year-over-year organic growth led by the performance of our Electronics Marketing (EM) business, which grew revenue 8.8% in its seasonally strong March quarter. This growth was somewhat offset by lower than expected revenue in our Technology Solutions (TS) business, despite the strong performance in the December quarter. TS’ organic revenue declined year over year and, as a result, our organic growth rate at the enterprise level was 3.5% in constant currency. Turning to our bottom line, adjusted operating income increased nearly 10% year over year and operating income margin was up 12 basis points to 3.3%. In line with our general expectations, we experienced strong cash flow from operations for the quarter at $358 million, which continues to bolster our balance sheet and available liquidity. We believe that our combination of resources and strategies continue to position us to build on this current performance with the clear goal of additional progress toward our long-term financial goals as companies continue to invest in technology to accelerate their success.”  Avnet Electronics Marketing Results                                                                                             Year-over-Year Growth Rates                             Q3 FY14              Reported          Organic                             Sales                Sales               Sales                             (in millions) EM Total                    $  4,133.0           8.8       %         8.0   % Excluding FX ^(1)                                8.1       %         7.2   % Americas                    $  1,193.6           (9.6      )%        (1.1  )% EMEA                        $  1,385.8           26.0      %         13.3  % Excluding FX ^(1)                                21.7      %         9.4   % Asia                        $  1,553.6           12.8      %         11.2  %                                                                                                         Q3' FY14             Q3' FY13            Change Operating Income            $  193.4             $  165.0            17.2  % Operating Income            4.7         %        4.4       %         33 bps Margin ^(1) Year-over-year sales growth rate excluding the impact of changes in foreign currency exchange rates.    *Reported sales increased 8.8% year over year to $4.1 billion while organic     sales were up 7.2% in constant currency   *Operating income margin increased 33 basis points year over year to 4.7%     primarily due to improvements in the Americas region   *Working capital (defined as receivables plus inventory less accounts     payables) declined 3.5% sequentially and was up 8.9% year over year due to     the increase in sales and the acquisition of MSC; excluding acquisitions     and the impact of currency, working capital increased 7.1% year over year   *Return on working capital (ROWC) increased 245 basis points sequentially     and 116 basis points year over year due primarily to higher operating     income  Mr. Hamada added, “EM delivered another quarter of meaningful progress toward their financial targets as both margins and returns expanded year over year for a third consecutive quarter. In the March quarter, organic revenue increased 7.2% year over year in constant dollars, driven by strong growth in the EMEA and Asia regions. On a sequential basis, EM revenue was essentially flat, and below normal seasonality, due to the expected drop off in certain high volume fulfillment engagements in EM Asia, which drove our December quarter above seasonal levels. The seasonal mix shift to the western regions and the related gross profit margin improvement combined to drive operating income up 12.7% sequentially as operating income margin improved 55 basis points to 4.7%. On a year-over-year basis, the growth in revenue, when combined with the expense actions implemented in fiscal 2013 and the first half of fiscal 2014, drove operating income margin up 33 basis points. In addition to the strong financial performance this quarter, EM continues to position for future growth as the integration of MSC, which adds a broad offering of embedded and display solutions supported by in-depth technical expertise, is proceeding as planned. With a book to bill ratio above parity in all three regions, we are confident we can continue to leverage top line growth into improved financial performance as we return EM to our target margin and returns.”  Avnet Technology Solutions Results                                                                                             Year-over-Year Growth Rates                             Q3 FY14              Reported         Organic                             Sales                Sales              Sales                             (in millions) TS Total                    $  2,550.6           2.0      %         (2.5   )% Excluding FX ^(1)                                2.6      %         (1.9   )% Americas                    $  1,373.5           5.6      %         (2.9   )% EMEA                        $  774.6             (1.1     )%        (1.1   )% Excluding FX^(1)                                 (4.9     )%        (4.9   )% Asia                        $  402.5             (3.8     )%        (3.8   )%                                                                                                         Q3' FY14             Q3' FY13           Change Operating Income            $  60.9              $  68.6            (11.3  )% Operating Income            2.4         %        2.7      %         (35) bps Margin ^(1) Year-over-year sales growth rate excluding the impact of changes in foreign currency exchange rates.    *Reported sales increased 2.0% year over year to $2.6 billion and organic     sales decreased 2.5% in reported dollars and 1.9% in constant currency   *Operating income margin decreased 35 basis points year over year due     primarily to a decline in the Americas region partially offset by an     improvement in the EMEA region   *ROWC decreased 809 basis points year over year primarily due to lower     operating income   *At a product level, year-over-year growth in networking and security, as     well as services, was partially offset by a decline in servers  Mr. Hamada further added, “Despite coming off a stronger than expected Q2 performance, our TS results did not meet our original expectations primarily due to a weaker than expected close to the quarter in our Americas region, and somewhat softer demand experienced by our computing components business in EMEA. Our Americas revenue declined 26.1% sequentially and organic revenue declined 2.9% year over year. In our EMEA region, revenue declined 18.2% sequentially and organic revenue declined 4.9% year over year in constant currency. The revenue shortfall in our higher margin Americas region strongly influenced overall TS profitability as operating income dollars and margins at the global level declined 11.3% and 35 basis points year over year, respectively. We are, however, encouraged by our performance in EMEA this quarter as their ongoing portfolio management and resource allocation actions resulted in a 65 basis points increase in operating margin year over year. We will continue to monitor our current market conditions carefully and adjust our resources as necessary to resume progress toward our long-term goals.”  Cash Flow/Dividend    *Cash generated from operations was $358.1 million for the quarter and     $470.7 million on a trailing twelve month basis   *Cash and cash equivalents at the end of the quarter was $960.1 million;     net debt (total debt less cash and cash equivalents) was approximately     $1.1 billion   *Under the $750 million stock repurchase program, the Company repurchased     31.7 thousand shares during the quarter at an aggregate cost of $1.3     million. At the end of the fiscal third quarter, the Company had     approximately $223 million remaining in the program   *The Company paid a quarterly dividend of $0.15 per share ($20.7 million)     or $62.0 million fiscal year to date  Kevin Moriarty, Chief Financial Officer, stated, “The team has done an effective job of managing working capital during a period where the linearity of our revenue did not follow historic patterns. After consuming cash last quarter to support the strong December close at TS, our cash flow from operations swung to a positive $358 million as accounts receivable declined 13% sequentially and inventory was down 2%. As a result, net debt declined $307 million sequentially and we ended the quarter with $960 million of cash on the balance sheet. With our strong balance sheet and liquidity, we remain well positioned to invest in growth opportunities while continuing to return cash to shareholders via both our dividend commitment and disciplined share repurchase program.”  Outlook for Fourth Quarter of Fiscal 2014 Ending on June 28, 2014    *EM sales are expected to be in the range of $4.05 billion to $4.35 billion     and TS sales are expected to be between $2.55 billion to $2.85 billion   *Avnet sales are forecasted to be between $6.6 billion and $7.2 billion   *Adjusted diluted earnings per share (“EPS”) is expected to be in the range     of $1.04 to $1.14 per share   *The EPS guidance assumes 140.6 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 U.S. Dollar to Euro currency exchange rate for the fourth quarter of fiscal 2014 is $1.38 to €1.00. This compares with an average exchange rate of $1.31 to €1.00 in the fourth quarter of fiscal 2013 and $1.37 to €1.00 in the third 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,” “feel,” “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 Sales section of this document). Management believes organic sales 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 expenses, and (ii) amortization of acquired intangible assets and other, 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 diluted 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 diluted EPS excluding the impact of these items provides an important measure of the Company’s net results 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.  Third Quarter      Fiscal 2014                                              Third Quarter Fiscal 2014                                       Income                       Operating     Before        Net Income    Diluted                       Income          Income                          EPS                                       Taxes                       $ in thousands, except per share amounts GAAP results          $ 184,843       $ 164,993       $ 113,851       $ 0.81 Restructuring, integration and       26,083          26,083          19,275          0.14 other expenses Gain on legal settlement, bargain               —               (2,965    )     (1,811    )     (0.01  ) purchase and other Amortization of intangible            12,868          12,868          9,043           0.06 assets and other Income tax            —              —              3,744          0.03    adjustments Total                 38,951         35,986         30,251         0.22    adjustments Adjusted              $ 223,794      $ 200,979      $ 144,102      $ 1.03  results                                                                                Items impacting the third quarter of fiscal 2014 consisted of the following:    *Restructuring, integration and other expenses of $26.1 million before tax     consisted of $15.4 million for severance, $3.9 million for facility exit     and asset impairment related costs, $2.3 million for other restructuring     costs, $3.9 million for integration-related costs, and an expense of $0.6     million to adjust prior restructuring liabilities. Restructuring,     integration and other expenses after tax was $19.3 million;   *Gain on legal settlement of $3.0 million before tax and $1.8 million after     tax related to a settlement payment received during the third quarter;   *Amortization expense and other substantially all of which related to     acquired intangible assets of $12.9 million before tax and $9.0 million     after tax; and   *Income tax adjustments of $3.7 million primarily related to certain items     impacting the effective income tax rate in the third quarter of fiscal     2014.  Second Quarter      Fiscal 2014                         Second Quarter Fiscal 2014                                        Income                        Operating     Before        Net Income    Diluted                        Income          Income                          EPS                                        Taxes                        $ in thousands, except per share amounts GAAP results           $ 221,572       $ 188,552       $ 124,864       $  0.89 Restructuring, integration and        28,442          28,442          21,746          0.15 other expenses Amortization of intangible             13,194          13,194          9,125           0.07 assets and other Income tax             —              —              8,158          0.06 adjustments Total                  41,636         41,636         39,029         0.28 adjustments Adjusted results       $ 263,208      $ 230,188      $ 163,893      $  1.17                                                                             Items impacting the second quarter of fiscal 2014 consisted of the following:    *Restructuring, integration and other expenses of $28.4 million before tax     consisted of $19.3 million for severance, $1.4 million for facility exit     and asset impairment related costs, $0.5 million for other restructuring     expenses, $1.5 million for other costs, $4.3 million for     integration-related costs, and an expense of $1.4 million to adjust prior     restructuring liabilities. Restructuring, integration and other expenses     after tax was $21.7 million;   *Amortization expense and other substantially all of which related to     acquired intangible assets of $13.2 million before tax and $9.1 million     after tax; and   *Income tax adjustments of $8.2 million primarily related to certain items     impacting the effective income tax rate in the second quarter of fiscal     2014.  Third Quarter       Fiscal 2013                                                Third Quarter Fiscal 2013                                        Income                        Operating     Before        Net Income    Diluted                        Income          Income                          EPS                                        Taxes                        $ in thousands, except per share amounts GAAP results           $ 167,610       $ 144,375       $ 86,196        $  0.62 Restructuring, integration and        27,341          27,341          25,786          0.18 other expenses Amortization of intangible             8,746           8,746           6,122           0.05 assets and other Income tax             —              —              13,371         0.10 adjustments Total                  36,087         36,087         45,279         0.33 adjustments Adjusted results       $ 203,697      $ 180,462      $ 131,475      $  0.95                                                                             Items impacting the third quarter of fiscal 2013 consisted of the following:    *Restructuring, integration and other expenses of $27.3 million before tax     consisted of restructuring costs of $23.8 million, integration costs of     $14.9 million, other costs aggregating to a net benefit of $10.8 million     and a net benefit for changes in estimates for prior restructuring     liabilities of $0.6 million;   *Amortization expense related to acquired intangible assets of $8.7 million     before tax and $6.1 million after tax; and   *Income tax adjustments of $13.4 million primarily related to increases to     valuation allowances and reserves.  Organic Sales  Organic sales 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. Sales taking into account the combination of these adjustments are referred to as “organic sales.”                              Sales              Acquisition /      Organic                          as Reported      Divestiture      Sales                                                Sales                                                (in thousands) Q1 Fiscal 2014              $ 6,345,475        $   119,950        $ 6,465,425 Q2 Fiscal 2014              7,421,854          —                  7,421,854 Q3 Fiscal 2014              6,683,616         —                 6,683,616 Fiscal year to date         $ 20,450,945      $   119,950       $ 20,570,895 2014                                                                    Q1 Fiscal 2013              $ 5,870,057        $   362,053        $ 6,232,110 Q2 Fiscal 2013              6,699,465          162,481            6,861,946 Q3 Fiscal 2013              6,298,699          143,992            6,442,691 Q4 Fiscal 2013              6,590,703         124,741           6,715,444 Fiscal year 2013            $ 25,458,924      $   793,267       $ 26,252,191                                                                       “Acquisition/Divestiture Sales” as presented in the preceding table includes the effects of the acquisitions and divestitures included below:  Fiscal 2014 MSC Investoren GmbH, in October 2013 in the EM EMEA region 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 January 2013 in the TS Americas region Universal Semiconductor, Inc., in January 2013 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 (in thousands) presents the calculation for ROWC, ROCE and WC velocity.                                        Q3 FY14             Q3 FY13 Sales                                     $  6,683,616          $ 6,298,699 Sales, annualized                 (a)     $  26,734,464         $ 25,194,796 Adjusted operating                        $  223,794            $ 203,697 income (1) Adjusted annualized               (b)     $  895,176            $ 814,788 operating income Adjusted effective tax                    28.2           %      27.5         % rate (2) Adjusted annualized operating income, after           (c)     $  642,736            $ 590,884 tax Average monthly working capital Accounts receivable                       $  5,165,610          $ 4,806,901 Inventory                                 $  2,592,568          $ 2,328,051 Accounts payable                          $  (3,250,104  )      $ (3,233,582 ) Average working capital           (d)     $  4,508,074         $ 3,901,370   Average monthly total             (e)     $  6,034,183         $ 5,376,597   capital ROWC = (b) / (d)                          19.9           %      20.9         % WC Velocity = (a) / (d)                   5.9                   6.5 ROCE = (c) / (e)                          10.7           %      11.0         %                                                                               (1) See reconciliation to GAAP amounts in the preceding tables in this Non-GAAP Financial Information section. (2) Adjusted effective tax rate for each quarterly period in a fiscal year is based upon the currently 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 sales of $25.5 billion. For more information, visit www.avnet.com. (AVT_IR)                                                       AVNET, INC.  CONSOLIDATED STATEMENTS OF OPERATIONS  (THOUSANDS EXCEPT PER SHARE DATA)  (UNAUDITED)                                                                                  Third Quarters Ended               Nine Months Ended                      March 29,       March 30,        March 29,        March 30,                      2014              2013                2014               2013 Sales                $ 6,683,616       $ 6,298,699         $ 20,450,945     $ 18,868,221 Cost of sales        5,878,704        5,542,676       18,062,230      16,659,358    Gross profit         804,912           756,023             2,388,715          2,208,863 Selling, general and          593,986           561,072             1,736,689          1,656,052 administrative expenses Restructuring, integration          26,083           27,341          66,624          89,655        and other expenses Operating            184,843           167,610             585,402            463,156 income Other income         2,511             4,106               (1,488       )     6,649 (expense), net Interest             (25,326     )     (27,341     )       (80,529      )     (79,029      ) expense Gain on legal settlement, bargain              2,965            —               22,102          31,350        purchase and other Income before        164,993           144,375             525,487            422,126 income taxes Income tax           51,142           58,179          166,148         98,144        provision Net income           $ 113,851        $ 86,196        $ 359,339       $ 323,982     Earnings per share: Basic                $ 0.82           $ 0.63          $ 2.61          $ 2.34        Diluted              $ 0.81           $ 0.62          $ 2.57          $ 2.31        Shares used to compute earnings per share: Basic                138,418          137,102         137,845         138,215       Diluted              140,179          139,015         140,015         140,316       Cash dividends paid per             $ 0.15           $ —             $ 0.45          $ —           common share                                                                                                                                                                                                                                                       AVNET, INC.  CONDENSED CONSOLIDATED BALANCE SHEETS  (THOUSANDS)  (UNAUDITED)                                                                                                                   March 29, 2014     June 29,                                                                   2013 Assets: Current assets: Cash and cash equivalents                      $ 960,149          $ 1,009,343 Receivables, net                               4,983,890          4,868,973 Inventories                                    2,510,352          2,264,341 Prepaid and other current assets               199,054           214,221 Total current assets                           8,653,445          8,356,878 Property, plant and equipment, net             522,321            492,606 Goodwill                                       1,344,389          1,261,288 Intangible assets, net                         197,829            172,212 Other assets                                   182,796           191,696 Total assets                                   $ 10,900,780      $ 10,474,680 Liabilities and Shareholders' Equity: Current liabilities: Short-term debt                                $ 848,388          $ 838,190 Accounts payable                               3,207,036          3,278,152 Accrued expenses and other                     709,130           705,102 Total current liabilities                      4,764,554          4,821,444 Long-term debt                                 1,221,977          1,206,993 Other long-term liabilities                    178,382           157,118 Total liabilities                              6,164,913          6,185,555 Shareholders’ equity                           4,735,867         4,289,125 Total liabilities and shareholders’            $ 10,900,780      $ 10,474,680 equity                                                                                                                                                                                      AVNET, INC.  CONSOLIDATED STATEMENTS OF CASH FLOWS  (THOUSANDS)  (UNAUDITED)                                                                                            Nine Months Ended                                              March 29, 2014   March 30, 2013 Cash flows from operating activities: Net income                                   $  359,339         $  323,982 Non-cash and other reconciling items: Depreciation                                 67,392             65,284 Amortization                                 33,081             23,844 Deferred income taxes                        20,850             9,037 Stock-based compensation                     33,896             35,923 Gain on bargain purchase                     —                  (31,350     ) Other, net                                   54,824             57,800 Changes in (net of effects from businesses acquired): Receivables                                  (55,853     )      (2,897      ) Inventories                                  (114,258    )      192,244 Accounts payable                             (148,825    )      (175,909    ) Accrued expenses and other, net              (46,541     )      (68,544     ) Net cash flows provided by operating         203,905           429,414      activities                                                                  Cash flows from financing activities: Issuance of notes in public offering,        —                  349,258 net of issuance cost Repayment of notes                           (300,000    )      — Borrowings (repayments) under accounts       230,000            (259,000    ) receivable securitization program, net Borrowings (repayments) of bank and          56,658             (191,775    ) other debt, net Repurchases of common stock                  (1,252      )      (207,192    ) Dividends paid on common stock               (62,009     )      — Other, net                                   10,390            4,499        Net cash flows used by financing             (66,213     )      (304,210    ) activities                                                                  Cash flows from investing activities: Purchases of property, plant and             (81,232     )      (75,415     ) equipment Acquisitions of businesses, net of           (116,882    )      (244,062    ) cash acquired Cash proceeds from divestitures, net         —                  3,613 of cash divested Other, net                                   4,058             289          Net cash flows used by investing             (194,056    )      (315,575    ) activities                                                                              Effect of exchange rate changes on           7,170             4,431        cash and cash equivalents                                                                              Cash and cash equivalents: — (decrease)                                 (49,194     )      (185,940    ) — at beginning of period                     1,009,343         1,006,864    — at end of period                           $  960,149        $  820,924                                                                                                                                                                                                               AVNET, INC.  SEGMENT INFORMATION  (MILLIONS)  (UNAUDITED)                                                                              Third Quarters Ended              Nine Months Ended                      March 29,     March 30,         March 29,      March 30,                      2014            2013*             2014             2013* Sales: Electronics          $ 4,133.0       $ 3,797.2         $ 12,225.9       $ 11,123.8 Marketing Technology           2,550.6        2,501.5          8,225.0         7,744.4     Solutions Consolidated         $ 6,683.6      $ 6,298.7        $ 20,450.9      $ 18,868.2  Sales Operating Income: Electronics          $ 193.4         $ 165.0           $ 540.9          $ 457.1 Marketing Technology           60.9            68.6              243.7            220.4 Solutions Corporate            (30.5     )     (29.9     )       (98.1      )     (100.9     )                      223.8           203.7             686.5            576.7 Restructuring, integration          (26.1     )     (27.3     )       (66.6      )     (89.7      ) and other expenses Amortization of intangible        (12.9     )     (8.7      )       (34.5      )     (23.8      ) assets and other Consolidated Operating            $ 184.8        $ 167.6          $ 585.4         $ 463.2     Income                                                                                     * Sub-totals and totals may not foot due to rounding  Contact:  Investor Relations Contact: Avnet, Inc. Vincent Keenan Investor Relations 480-643-7053 investorrelations@avnet.com