Avnet, Inc.
Oct 27, 2011

Avnet, Inc. Reports First Quarter Fiscal Year 2012 Results

Growth Slows, TS Improves, Buyback Begins

PHOENIX--(BUSINESS WIRE)-- Avnet, Inc. (NYSE:AVT) today announced results for the first quarter fiscal year 2012 ended October 1, 2011.

Q1 Fiscal 2012 Results

            First Quarter Ended
October 1,       October 2,      
2011 2010 Change
  $ in millions, except per share data
Sales $ 6,426.0 $ 6,182.4 3.9 %
 
GAAP Operating Income $ 223.1 $ 194.5 14.7 %
Adjusted Operating Income (1) $ 223.1 $ 222.5 0.2 %
 
GAAP Net Income $ 139.0 $ 138.2 0.6 %
Adjusted Net Income (1) $ 139.0 $ 142.7 -2.6 %
 
GAAP Diluted EPS $ 0.90 $ 0.90 0.0 %
Adjusted Diluted EPS (1) $ 0.90 $ 0.93 -3.2 %
 

(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.

 

Rick Hamada, Chief Executive Officer, commented, "Our team delivered a strong Q1 performance despite a challenging macro environment. After seven consecutive quarters of strong year-over-year growth, our business slowed this quarter as pro forma revenue was roughly flat year over year in constant currency. While Q1 is typically our weakest revenue quarter, the actual sequential revenue decline we experienced this year was more than normal seasonality due primarily to the double-digit sequential revenue declines experienced in our EMEA region at both operating groups after adjusting for the impact of acquisitions and currency. As a result, adjusted operating income came in roughly flat as compared with last year and operating income margin declined 13 basis points. Although it is difficult to forecast future demand in the current macro economic environment, we are encouraged by the speed with which the electronics supply chain is rebalancing and the relative strength of our computer business outside of EMEA. We remain confident that our experience through many industry cycles will continue to serve us well as we work through the current environment and we continue to focus on driving long-term shareholder value creation."

Avnet Electronics Marketing Results

                  Year-over-Year Growth Rates
Q1 FY12 Reported       Pro forma
Revenue Revenue Revenue (2)
(in millions)
 
Total

 

$ 3,816.3 5.4 % -0.1 %
Excluding FX (1)

 

2.3 % -3.1 %
Americas

 

$ 1,383.2 9.8 % 0.3 %
EMEA

 

$ 1,123.8 4.1 % -
Excluding FX (1)

 

-4.6 % -
Asia

 

$ 1,309.3 2.2 % -3.9 %
 
Q1 FY12 Q1 FY11 Change  
Operating Income

 

$ 191.2   $ 192.1   $ (0.9 )
Operating Income Margin

 

  5.01 %   5.31 % -30 bps  
 

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

(2) Pro forma growth rates for EM EMEA are not presented as revenue comparisons to prior year were not impacted by acquisitions.

 

Mr. Hamada added, "EM sales were negatively impacted by the current supply chain correction as pro forma revenue declined 7% sequentially as compared with a typical range of up 1% to down 3%. While EMEA was our relatively weakest region, we also saw slightly lower than expected revenue in America and Asia. Despite these challenges, operating income was roughly flat with the year ago quarter and operating income margin of 5.0% was within our long-term target range. EM's book to bill ratio declined sequentially in the September quarter, but has shown some improvement through the first three weeks of October. It appears that customers are rapidly adjusting their inventory and backlog to an environment of slower growth and shorter product lead times. We remain focused on delivering margins and returns within our target range through these cycles."

Avnet Technology Solutions Results

                  Year-over-Year Growth Rates
Q1 FY12 Reported       Pro forma
Revenue Revenue Revenue
(in millions)
 
Total

 

$ 2,609.7 1.9 % 9.7 %
Excluding FX (1)

 

-1.3 % 6.3 %
Americas

 

$ 1,388.4 -5.0 % 13.3 %
EMEA

 

$ 778.5 -3.6 % -5.9 %
Excluding FX (1)

 

-10.4 % -12.5 %
Asia

 

$ 442.8 51.4 % 35.6 %
 
Q1 FY12 Q1 FY11 Change  
Operating Income

 

$ 65.0   $ 56.7