Avnet Reports Second Quarter Fiscal 2019 Financial Results

Quarterly sales grew 12% year over year to $5.05 billion; GAAP diluted EPS of $0.33 decreased 30%; Adjusted diluted EPS of $1.04 rose 33%

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PHOENIX - Media
OutReach - 25 January 2019 - Avnet, Inc.
(Nasdaq: AVT) today announced results for the
second quarter ended December 29, 2018.

Second
Quarter Key Financial Highlights

• Sales rose 11.7% year over year (13.1% in constant currency) to
  $5.05 billion
• GAAP diluted EPS from continuing operations decreased 30% year
  over year to $0.33

o   
Non-GAAP adjusted diluted EPS rose 33% year over year to $1.04

o   
Foreign exchange rates negatively impacted adjusted diluted EPS by
$0.02

• GAAP operating income rose 18% year over year to $96.1 million

o   
Adjusted operating income rose 28% year over year to $178.8
million

• GAAP operating income margin was 1.9%, up from 1.8% a year ago

o   
Adjusted operating income margin was 3.5%, up from 3.1% a year ago

• Returned $197 million to shareholders with $175 million of share
  repurchases and dividends of $22 million

CEO
Commentary

“Our
second quarter results demonstrate the tremendous progress we are making in
transforming Avnet into a global technology solutions company,” said Avnet CEO
Bill Amelio. “Even with the current uncertainties in Asia, Avnet posted strong
gains in revenue and profitability compared to a year ago. Our unique ecosystem
approach is really starting to pay off with our suppliers and customers. With
the addition of Softweb Solutions, we now have the software and hardware to
deliver an end-to-end IoT capability that can lower costs, speed time to
market, and reduce complexity for our customers.”

CFO Commentary

“This quarter, we continued to execute
broadly across our stated goals including accelerating the Americas, optimizing
our cost structure and reducing share count,” stated Tom Liguori, Avnet Chief
Financial Officer. “We delivered year-over-year, double-digit sales growth
while reducing selling, general and administrative expenses by $12 million. Our
diluted share count decreased by 10 million shares year over year or 8%. Our
remaining buyback authorization stands at $440 million at the end of the
quarter which we will utilize appropriately to signal our continued confidence
in Avnet’s long-term outlook.”

Additional Second Quarter
Fiscal 2019 Highlights and Key Developments

• Expanded
  Avnet’s Internet of Things (IoT) capabilities with the acquisition of Softweb
  Solutions. The integration of Softweb’s best-of-breed artificial intelligence
  (AI) software for IoT applications, along with its data services and digital
  process capabilities, provides Avnet with rapid design, development, and
  deployment capabilities that can help customers increase efficiency, speed time
  to market and help their businesses transform.
• Capitalized
  on the significance of electronica, a leading trade show for electronics, by building
  Avnet City. This was the first time Avnet used an industry event to bring
  together under one exhibit the expanse of Avnet’s end-to-end ecosystem. The
  well-received Avnet exhibit included community-oriented events hosted by
  Hackster.io and element14, and demonstrations highlighting the Company’s
  innovation capabilities, including robotics, AI and virtual reality.
• Demonstrated
  at CES the depth and breadth of Avnet’s IoT R&D resources including its
  role as a lead partner for Microsoft Azure Sphere; the unveiling of Avnet’s SmartEdge
  Agile, which is ideal for developing machine learning
  applications such as predictive maintenance and remote monitoring; and Avnet’s
  SmartEdge Industrial IoT Gateway, which is designed for automation applications
  that require strong end-to-end security.
• Generated
  $72 million of cash flow from continuing operations during the quarter.
• Recorded
  restructuring, integration and other expenses of $62 million during the second
  quarter primarily for non-cash impairment and severance costs. These charges
  were incurred in connection with the continued transformation of our IT,
  distribution center and business operations including the re-prioritization of
  our IT initiatives and resources. Second quarter transformation projects are
  expected to deliver approximately $10 million in savings per quarter once fully
  implemented.

Awards and Notable
Recognition Received During the Quarter

• Received
  ROHM Semiconductor’s Global Distributor Award
• Named
  Supplier of the Year by L3 Technologies for the second year in a row
• Received
  Infineon’s Top Distributor Award in Asia and Greater China
• Recognized
  by Micron with the Most Valuable Demand Creation Distributor Award in Asia
• Received
  several TE Connectivity awards in China/Asia for Excellent Solution Design and
  Growth

For the full
press release, please visit: https://news.avnet.com/press-release/avnet/avnet-reports-second-quarter-fiscal-2019-financial-results

 

All brands and trade names are trademarks or registered trademarks, and
are the properties of their respective owners. Avnet disclaims any proprietary
interest in marks other than its own.

 

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About Avnet

Avnet
is a global technology solutions provider with an extensive ecosystem
delivering design, product, marketing and supply chain expertise for customers
at every stage of the product lifecycle. We transform ideas into intelligent
solutions, reducing the time, cost and complexities of bringing products to
market. For nearly a century, Avnet has helped its customers and suppliers
around the world realize the transformative possibilities of technology. Learn
more about Avnet at www.avnet.com.