<PAGE>
EXHIBIT 99.1
[KENT ELECTRONICS LOGO]
NEWS RELEASE
CONTACT:
Kent Electronics Corporation
Stephen J. Chapko
Executive Vice President & CFO
281-243-4000
Morgen-Walke Associates
Robert P. Jones/Theresa Vogt
Media: Brian Maddox/Ann Marie Gaschler
FOR IMMEDIATE RELEASE 212-850-5600
KENT ELECTRONICS REPORTS YEAR-OVER-YEAR AND SEQUENTIAL
REVENUE AND EARNINGS GROWTH FOR THE FISCAL SECOND QUARTER
. Reports Second Quarter Diluted Earnings Per Share Of $.32
. Continuing EPS Up 15% Sequentially
Houston, Texas, October 24, 2000 - Kent Electronics Corporation (NYSE:KNT)
today reported financial results for the fiscal second quarter and six months
ended September 30, 2000.
ON OCTOBER 10, 2000, KENT ELECTRONICS ANNOUNCED THE SALE OF K*TEC
ELECTRONICS, ITS CONTRACT MANUFACTURING DIVISION, TO THAYER-BLUM FUNDING II,
L.L.C. FOR $225 MILLION. IN ACCORDANCE WITH U.S. GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES, K*TEC HAS BEEN ACCOUNTED FOR AS A DISCONTINUED OPERATION IN THE
SECOND QUARTER ENDED SEPTEMBER 30, 2000 AND ALL PRIOR PERIODS. FOR THE PURPOSES
OF THIS RELEASE, KENT ELECTRONICS WILL ANNOUNCE SECOND QUARTER RESULTS INCLUDING
AND EXCLUDING K*TEC AS NOTED.
FISCAL SECOND QUARTER RESULTS (INCLUDING DISCONTINUED OPERATION)
Including K*TEC, Kent Electronics reported net sales of $349.4 million for
the 2001 fiscal second quarter, a 48% increase from the $236.1 million reported
in the second quarter last year and a 13% sequential increase from the first
quarter.
Gross profit reached $56.3 million, up 42% from the year-ago period and 4%
from the prior quarter. Gross margin was 16.1% compared to 16.8% in last year's
second quarter and 17.6% in the first quarter 2001. Operating income was $17.4
million or 5.0% of net sales. This compares to operating income of $7.3 million,
or 3.1% of net sales in last year's second quarter, and $15.8 million or 5.1% of
net sales in the preceding quarter.
Net earnings were $9.6 million, a substantial increase from $3.7 million in
the comparable quarter last year and a 9% sequential gain over the $8.8 million
earned in the preceding quarter. Earnings per diluted share were $.32, more than
double the $.13 reported in the second quarter last year and up 7% from the
preceding quarter.
<PAGE>
FISCAL SECOND QUARTER RESULTS (EXCLUDING DISCONTINUED OPERATION)
Net sales for the second quarter, excluding K*TEC, were $231.4 million, and
the combined revenues of Kent Components and Kent Datacomm increased 11% on a
sequential basis. The Company's two core businesses, networking and specialty
component distribution, accounted for approximately 42% and 58% of sales and
posted sequential growth of 9% and 12%, respectively. Net sales, excluding
K*TEC, but including the revenues from the redistribution assets which were sold
on May 23, 2000, were up 4% on a sequential basis.
Gross profit for the quarter was up 38% to $48.0 million from $34.8 million
in the second quarter last year, and gross margin expanded to 20.7% from 20.1%
in the second quarter last year. In the preceding quarter, gross profit was
$46.2 million or 20.7% of sales.
Operating income more than doubled to $12.8 million from $5.3 million in
fiscal 1999's second quarter and increased 16% on a sequential basis. Operating
margin was 5.5%, compared to 4.9% in the preceding quarter and 3.1% in the
similar year-ago period.
Earnings from continuing operations for the second quarter increased to
$6.8 million, a 15% sequential gain over the $5.9 million earned in the
preceding quarter and significantly above the $2.5 million reported in last
year's second quarter. Continuing earnings per share were $.23 compared to $.20
in the preceding quarter and $.09 in the fiscal 2000 second quarter.
COMMENTARY ON SECOND QUARTER RESULTS
LARRY OLSON, PRESIDENT AND CHIEF EXECUTIVE OFFICER, NOTED, "WE BELIEVE THAT
SECOND QUARTER RESULTS, EXCLUDING THE CONTRIBUTIONS OF OUR TWO RECENT
DIVESTITURES, K*TEC AND THE REDISTRIBUTION ASSETS, ARE A STRONG DEPARTURE POINT
FOR KENT. OPERATING LEVERAGE WAS SIGNIFICANT, WITH EARNINGS FROM CONTINUING
OPERATIONS UP 15% SEQUENTIALLY, ON AN 11% SEQUENTIAL SALES GAIN, EXCLUDING
REVENUES FROM THE REDISTRIBUTION ASSETS. ADDITIONALLY, WE HAVE STRENGTHENED AN
ALREADY SOLID BALANCE SHEET. ON A CONTINUING OPERATION BASIS, SECOND QUARTER
INVENTORY TURNS INCREASED TO 6.2 TIMES. ON A PRO-FORMA BASIS, REFLECTING THE
SALE OF K*TEC, CASH AND CASH EQUIVALENTS APPROXIMATE $250 MILLION, PROVIDING THE
COMPANY WITH SUBSTANTIAL RESOURCES TO FUND FUTURE GROWTH."
WITH RESPECT TO THE OPERATING ENVIRONMENT, MR. OLSON STATED, "ORDER RATES
WERE STRONG FOR OUR COMPONENTS DISTRIBUTION BUSINESS, WHICH CONTINUES TO
EXPERIENCE TIGHT SUPPLY IN CERTAIN PRODUCT CATEGORIES. KENT DATACOMM SUCCEEDED
IN INCREASING ITS SERVICE REVENUES IN THE SECOND QUARTER AND IN SETTING A NEW
RECORD FOR INCOMING ORDERS."
FIRST HALF RESULTS (INCLUDING DISCONTINUED OPERATION)
Including K*TEC Electronics, Kent had total sales of $657.7 million for the
first six months of fiscal 2001, a 49% increase from $441.2 million in last
year's six-month period. Gross profit was $110.6 million, up 54% from the prior
year, and gross margin was 16.8% compared to 16.3% in last year's first half.
Operating income reached $33.2 million, an increase of 196% from the fiscal 2000
first half. Operating margin was 5.0% compared to 2.5% in the similar year-ago
period. Net earnings were $18.4 million, or $.62 per diluted share,
substantially above the $5.6 million or $.20 per diluted share earned in the
comparable period last year.
FIRST HALF RESULTS (EXCLUDING DISCONTINUED OPERATION)
Net sales for the first half of fiscal 2001, excluding K*TEC, were $454.7
million, a 40% increase from $323.7 million in the comparable period last year.
The combined sales of Kent Components and Kent Datacomm grew by approximately
57%.
Gross profit for the six-month period grew 43% to $94.2 million from $65.7
million in the same period last year. Gross margin expanded to 20.7% from 20.3%
in the first six months of fiscal 2001.
Operating income for the period was $23.7 million, more than twice the
$10.8 million reported for last year's first half.
Earnings from continuing operations for the first six months of fiscal 2001
increased to $12.7 million, or $.43 per diluted share, compared to $5.2 million,
or $.18 per diluted share, in the same period in fiscal 2000.
2
<PAGE>
OUTLOOK
LOOKING AHEAD, MR. OLSON STATED, "KENT'S LEADING MARKET POSITION IN
SPECIALTY COMPONENT DISTRIBUTION CONTINUES TO STRENGTHEN AS PRODUCT SHORTAGES
PENALIZE SMALLER COMPETITORS. INDUSTRY ANALYSTS EXPECT THE SUPPLY/DEMAND
IMBALANCE IN PASSIVE COMPONENTS SUCH AS CAPACITORS, RESISTORS AND OSCILLATORS TO
LAST AT LEAST THROUGH THE MIDDLE OF CALENDAR YEAR 2001. OUR NETWORK INTEGRATION
BUSINESS IS BENEFITING FROM THE TREMENDOUS DEMAND FOR INCREASED BANDWIDTH AND
THE RAPID CONVERGENCE OF VOICE, DATA AND VIDEO APPLICATIONS."
"THE DIVESTITURE OF K*TEC SHOULD ENABLE KENT TO LEVERAGE THE FUNDAMENTAL
STRENGTHS OF ITS POSITION IN BOTH OF THESE DYNAMIC BUSINESSES, WHILE AT THE SAME
TIME CREATE IMPORTANT OPERATING EFFICIENCIES IN A LESS CYCLICAL AND MORE
PREDICTABLE ENVIRONMENT," MR. OLSON SAID.
"GOING FORWARD," HE ADDED, "WE EXPECT TO UTILIZE THE RESOURCES FROM THE
K*TEC SALE TO FUND THE ORGANIC AND ACQUISITION-RELATED GROWTH OF BOTH
OPERATIONS. THIS SHOULD INVOLVE CREATING A BROADER GEOGRAPHIC FOOTPRINT AS WELL
AS ADDING RELATED SERVICES."
The Company noted that even without the benefit of acquisitions, it expects
full fiscal year 2001 earnings to exceed $1.30 per diluted share.
The forward-looking statements in this press release involve risks and
uncertainties which could cause actual results, performance or trends, including
the above-mentioned estimated earnings per diluted share, to differ materially
from those expressed in the forward-looking statements. The Company believes
that all forward-looking statements made by it have a reasonable basis, but
there can be no assurance that management's expectations, beliefs or projections
as expressed in the forward-looking statements will actually occur or prove to
be correct. In addition to general industry and economic conditions, factors
that could cause actual results to differ materially from those discussed in the
forward-looking statements in this press release, include, but are not limited
to, the risks relating to forward-looking statements discussed in the Company's
Annual Report on Form 10-K for the fiscal year ended April 1, 2000, including,
but not limited to, the risks discussed under the captions "Cycles in the
Electronics Industry; General Economic Conditions," "Management of Growth,"
"Competition," "Risks Associated with Acquisitions" and "Dependence on
Significant Suppliers."
Kent Electronics is among the largest publicly traded specialty electronics
distributors and network integrators. Kent Components provides distribution and
value-added services with a focus on interconnect, passive and electromechanical
components. Kent Datacomm provides complete end-to-end networking solutions,
including design, consulting, source selection, product configuration and
installation, and warranty and technical support.
(TABLES TO FOLLOW)
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KENT ELECTRONICS CORPORATION AND SUBSIDIARIES
PRO FORMA SUPPLEMENTAL INFORMATION*
(UNAUDITED - IN THOUSANDS, EXCEPT PER SHARE DATA)
The following pro forma supplemental information excludes the effect of
reporting the divestiture of K*TEC Electronics as a discontinued operation.
This pro forma information is not prepared in accordance with U.S.
generally accepted accounting principles.
<TABLE>
<CAPTION>
Second Quarter Six Months
(Thirteen Weeks) (Twenty-Six Weeks)
September 30, October 2, September 30, October 2,
2000 1999 2000 1999
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net sales $349,390 $236,073 $657,658 $441,249
Cost of sales 293,061 196,363 547,099 369,509
-------- -------- -------- --------
Gross profit 56,329 39,710 110,559 71,740
Selling, general and
administrative expenses 38,942 32,423 77,377 60,514
-------- -------- -------- --------
Operating profit 17,387 7,287 33,182 11,226
Other income (expense)
Interest expense (2,676) (2,575) (5,385) (5,153)
Other - net 1,230 1,354 2,841 3,136
-------- -------- -------- --------
Earnings before income taxes 15,941 6,066 30,638 9,209
Income taxes 6,376 2,382 12,254 3,616
-------- -------- -------- --------
Net earnings $ 9,565 $ 3,684 $ 18,384 $ 5,593
======== ======== ======== ========
Earnings per common share:
Basic $.34 $.13 $.65 $.20
======== ======== ======== ========
Diluted $.32 $.13 $.62 $.20
======== ======== ======== ========
Weighted average shares:
Basic 28,508 27,993 28,446 27,984
======== ======== ======== ========
Diluted 29,675 28,740 29,636 28,534
======== ======== ======== ========
</TABLE>
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* Amounts prior to the second quarter of fiscal 2001 include the operating
results of the Company's wire and cable redistribution assets, which were sold
on May 23, 2000. The sale of the redistribution assets, in accordance with
U.S. generally accepted accounting principles, was not accounted for as a
discontinued operation.
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KENT ELECTRONICS CORPORATION AND SUBSIDIARIES
SCHEDULE OF NET SALES
(UNAUDITED - IN THOUSANDS)
<TABLE>
<CAPTION>
FISCAL YEAR 2000 FISCAL YEAR 2001
--------------------------------------------------------------- -------------------------------
Quarter Ending Quarter Ending Quarter Ending
------------------- 6 Mos. ------------------- 12 Mos. -------------------- 6 Mos.
7/3/99 10/2/99 Total 1/1/00 4/1/00 Total 7/1/00 9/30/00 Total
-------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Kent Components $ 70,270 $ 91,369 $161,639 $101,671 $110,469 $373,779 $119,176 $133,871 $253,047
Kent Datacomm 57,368 60,579 117,947 74,222 83,683 275,852 89,493 97,533 187,026
K*TEC Electronics 54,976 62,600 117,576 60,707 72,818 251,101 84,955 118,026 202,981
Wire & Cable
Redistribution 22,562 21,525 44,087 22,435 26,684 93,206 14,644 (40) 14,604
-------- -------- -------- -------- -------- -------- -------- -------- --------
Net Sales $205,176 $236,073 $441,249 $259,035 $293,654 $993,938 $308,268 $349,390 $657,658
======== ======== ======== ======== ======== ======== ======== ======== ========
</TABLE>
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KENT ELECTRONICS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS*
(UNAUDITED - IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
Second Quarter Six Months
(Thirteen Weeks) (Twenty-Six Weeks)
September 30, October 2, September 30, October 2,
2000 1999 2000 1999
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net sales $231,364 $173,473 $454,677 $323,673
Cost of sales 183,404 138,630 360,473 257,990
-------- -------- -------- --------
Gross profit 47,960 34,843 94,204 65,683
Selling, general and
administrative expenses 35,193 29,530 70,476 54,901
-------- -------- -------- --------
Operating profit 12,767 5,313 23,728 10,782
Other income (expense)
Interest expense (2,676) (2,575) (5,385) (5,153)
Other - net 1,230 1,354 2,841 3,136
-------- -------- -------- --------
Earnings from continuing operations
before income taxes 11,321 4,092 21,184 8,765
Income taxes 4,527 1,643 8,472 3,520
-------- -------- -------- --------
Earnings from continuing operations 6,794 2,449 12,712 5,245
Earnings from discontinued operations,
net of income taxes 2,771 1,235 5,672 348
-------- -------- -------- --------
Net earnings $ 9,565 $ 3,684 $ 18,384 $ 5,593
======== ======== ======== ========
Basic earnings per common share:
Earnings from continuing operations $ .24 $ .09 $ .45 $ .19
======== ======== ======== ========
Net earnings $ .34 $ .13 $ .65 $ .20
======== ======== ======== ========
Diluted earnings per common share:
Earnings from continuing operations $ .23 $ .09 $ .43 $ .18
======== ======== ======== ========
Net earnings $ .32 $ .13 $ .62 $ .20
======== ======== ======== ========
Weighted average shares:
Basic 28,508 27,993 28,446 27,984
======== ======== ======== ========
Diluted 29,675 28,740 29,636 28,534
======== ======== ======== ========
</TABLE>
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* Amounts prior to the second quarter of fiscal 2001 include the operating
results of the Company's wire and cable redistribution assets, which were sold
on May 23, 2000. The sale of the redistribution assets, in accordance with
U.S. generally accepted accounting principles, was not accounted for as a
discontinued operation.
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KENT ELECTRONICS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
<TABLE>
<CAPTION>
September 30,
2000 April 1,
(Unaudited) 2000
------------- ----------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents (including
temporary investments of $80,237 at
September 30 and $105,164 at April 1) $ 74,162 $101,052
Accounts receivable, net 180,909 149,161
Inventories
Materials and purchased products 117,222 124,939
Work in process 826 1,002
-------- --------
118,048 125,941
Net assets of discontinued operations 195,164 143,795
Other 8,792 12,594
-------- --------
Total current assets 577,075 532,543
PROPERTY AND EQUIPMENT
Land 4,990 4,990
Buildings 18,424 19,627
Equipment, furniture and fixtures 57,050 58,808
Leasehold improvements 855 1,541
-------- --------
81,319 84,966
Less accumulated depreciation
and amortization (28,222) (29,209)
-------- --------
53,097 55,757
OTHER ASSETS 16,344 10,429
COST IN EXCESS OF NET ASSETS ACQUIRED,
Less accumulated amortization of $6,568
at September 30 and $5,176 at April 1 101,772 103,164
-------- --------
Total assets $748,288 $701,893
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</TABLE>
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KENT ELECTRONICS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS - Continued
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
September 30,
2000 April 1,
(Unaudited) 2000
------------- --------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 98,842 $ 82,782
Accrued compensation 20,460 23,877
Other accrued liabilities 21,045 16,202
Income taxes 4,323 589
Current maturities of long-term debt 4,000 4,000
-------- --------
Total current liabilities 148,670 127,450
LONG-TERM DEBT, less current maturities 212,000 212,000
DEFERRED INCOME TAXES 11,874 11,824
LONG-TERM LIABILITIES 7,061 5,887
STOCKHOLDERS' EQUITY
Preferred stock, $1 par value per share;
authorized 2,000,000 shares; none issued --- ---
Common stock, no par value; authorized
60,000,000 shares; 28,592,853 shares issued
and 28,542,853 shares outstanding at
September 30 and 28,375,032 shares issued
and 28,325,032 shares outstanding at April 1 74,035 68,579
Additional paid-in capital 117,908 117,797
Retained earnings 177,717 159,333
-------- --------
369,660 345,709
Less common stock in treasury - at cost,
50,000 shares (977) (977)
-------- --------
368,683 344,732
-------- --------
Total liabilities and stockholders' equity $748,288 $701,893
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</TABLE>
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