Avnet Reports Third Quarter Fiscal 2020 Financial Results

Third quarter sales of $4.3 billion

Operating cash flow of $98 million; improved debt profile with debt reduction of $92 million

PHOENIX — (BUSINESS WIRE) — April 27, 2020 — Avnet, Inc. (Nasdaq: AVT) today announced results for its third fiscal quarter ended March 28, 2020.

Third Quarter Key Financial Highlights:

  • Sales of $4.3 billion compared with $4.7 billion a year ago.
  • GAAP diluted loss per share from continuing operations of $1.29, compared with EPS of $0.87 a year ago.
    • Non-GAAP adjusted diluted EPS of $0.38 compared with $1.09 a year ago.
    • Foreign exchange rates negatively impacted adjusted diluted EPS by $0.03, compared to prior year.
    • Incurred $160 million of goodwill and other impairment expenses due to the impacts of the COVID-19 outbreak and the corresponding decline in Avnet’s share price.
  • GAAP operating loss totaled $115.8 million, compared with GAAP operating income of $153.1 million a year ago.
    • Adjusted operating income declined 60.5% year over year to $70.4 million.
  • GAAP operating loss margin was 2.7%, compared with GAAP operating income margin of 3.3% a year ago.
    • Adjusted operating income margin was 1.6%, compared with 3.8% a year ago.
  • Cash flow from operations of $98 million, and totaled $777 million over the trailing four quarter period.
  • Improved debt profile with revolving debt reduction of $92 million, with net debt of $1.19 billion at the end of the quarter.

CEO Commentary

“Our third quarter results validated the resilience of our business model,” said Avnet CEO Bill Amelio. “We generated strong cash flow and revenues while adjusting our priorities to respond swiftly and effectively to the COVID-19 pandemic and ensure business continuity for all our stakeholders. Our first priority is the safety of our employees globally, and we quickly enacted protective and preventative measures to promote the health and safety of our employees while continuing to support the needs of our customers, suppliers, and business partners.”

Key Financial Metrics

($ in millions, except per share data)

Third Quarter Results (GAAP)

 

 

Mar – 20

 

Mar – 19

 

Change Y/Y

 

Dec – 19

 

Change Q/Q

Sales

 

$

4,309.8

 

 

$

4,698.8

 

 

(8.3)

%

 

$

4,534.8

 

 

(5.0)

%

Operating (Loss) Income

 

 

(115.8)

 

 

 

153.1

 

 

(175.6)

%

 

 

46.5

 

 

(349.1)

%

Operating (Loss) Income Margin

 

 

(2.7)

%

 

 

3.3

%

 

(595)

bps

 

 

1.0

%

 

(371)

bps

Diluted (Loss) Earnings Per Share

 

$

(1.29)

 

 

$

0.87

 

 

(248.3)

%

 

$

0.05

 

 

(2,680.0)

%

Third Quarter Results (Non-GAAP) (1)

 

 

Mar – 20

 

Mar – 19

 

Change Y/Y

 

Dec – 19

 

Change Q/Q

Sales

 

$

4,309.8

 

 

$

4,698.8

 

 

(8.3)

%

 

$

4,534.8

 

 

(5.0)

%

Adjusted Operating Income

 

 

70.4

 

 

 

178.1

 

 

(60.5)

%

 

 

82.2

 

 

(14.4)

%

Adjusted Operating Income Margin

 

 

1.6

%

 

 

3.8

%

 

(216)

bps

 

 

1.8

%

 

(18)

bps

Adjusted Diluted Earnings Per Share

 

$

0.38

 

 

$

1.09

 

 

(65.1)

%

 

$

0.40

 

 

(5.0)

%

Segment and Geographical Mix

 

 

Mar – 20

 

Mar – 19

 

Change Y/Y

 

Dec – 19

 

Change Q/Q

Electronic Components (EC) Sales

 

$

3,974.7

 

 

$

4,331.3

 

 

(8.2)

%

 

$

4,203.6

 

 

(5.5)

%

EC Operating Income Margin

 

 

2.1

%

 

 

3.5

%

 

(141)

bps

 

 

2.2

%

 

(9)

bps

Farnell Sales

 

$

335.1

 

 

$

367.5

 

 

(8.8)

%

 

$

331.2

 

 

1.2

%

Farnell Operating Income Margin

 

 

7.0

%

 

 

12.4

%

 

(545)

bps

 

 

6.0

%

 

94

bps

Americas Sales

 

$

1,203.6

 

 

$

1,297.2

 

 

(7.2)

%

 

$

1,186.6

 

 

1.4

%

EMEA Sales

 

 

1,512.5

 

 

 

1,740.9

 

 

(13.1)

%

 

 

1,425.8

 

 

6.1

%

Asia Sales

 

 

1,593.7

 

 

 

1,660.7

 

 

(4.0)

%

 

 

1,922.4

 

 

(17.1)

%

______________________________

(1)

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

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