SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT
OF 1934.
For the Quarterly Period Ended March 27, 1998Commission File #1-4224
Avnet, Inc.
(Exact name of registrant as specified in its charter)
New York 11-1890605
(State or other jurisdiction of IRS Employer I.D. Number
incorporation or organization)
80 Cutter Mill Road, Great Neck, N.Y. 11021
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code . . . . . . . 516-466-7000
Not Applicable
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
Yes x No
The number of shares outstanding of the registrant's Common Stock (net of
treasury shares) as of the close of the period covered by this report -
38,672,446 shares.
<PAGE>
AVNET, INC. AND SUBSIDIARIES
INDEX
Part I. Financial Information Page No.
Item 1.Financial Statements:
Consolidated Balance Sheets -
March 27, 1998 and June 27, 1997 3
Consolidated Statements of Income -
Nine Months Ended March 27, 1998
and March 28, 1997 4
Consolidated Statements of Income -
Third Quarters Ended March 27, 1998
and March 28, 1997 5
Consolidated Statements of Cash Flows -
Nine Months Ended March 27, 1998
and March 28, 1997 6
Notes to Consolidated Financial Statements 7 - 8
Item 2.Management's Discussion and Analysis of
Financial Condition and Results of Operations 9 - 12
Item 3.Quantitative and Qualitative Disclosures
About Market Risk 12
Part II. Other Information 13 - 15
Signature Page 16
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1.Financial Statements
AVNET, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
March 27, June 27,
1998 1997
(unaudited) (audited)
Assets:
Current assets:
Cash and cash equivalents $ 57,397 $ 59,312
Receivables, less allowances of $32,428
and $27,915, respectively 887,782 800,015
Inventories (Note 3) 1,104,504 1,007,074
Other 37,665 30,035
Total current assets 2,087,348 1,896,436
Property, plant & equipment, net 155,270 181,509
Goodwill, net of accumulated amortization of
$59,284 and $49,846, respectively 470,436 476,935
Other assets 52,488 39,191
Total assets $2,765,542 $2,594,071
Liabilities:
Current liabilities:
Borrowings due within one year $ 242 $ 178
Accounts payable 383,804 433,762
Accrued expenses and other 167,296 143,513
Total current liabilities 551,342 577,453
Long-term debt, less due within one year768,419 514,426
Commitments and contingencies (Note 4)
Total liabilities 1,319,761 1,091,879
Shareholders' equity (Note 5):
Common stock $1.00 par, authorized
120,000,000 shares, issued 44,328,000
shares and 44,032,000 shares, respectively44,328 44,032
Additional paid-in capital 432,778 425,180
Retained earnings 1,332,145 1,215,550
Cumulative translation adjustments (30,684) (24,767)
Common stock held in treasury at cost,
5,656,000 shares and 2,927,000 shares,
respectively (332,786) (157,803)
Total shareholders' equity 1,445,781 1,502,192
Total liabilities and shareholders'
equity $2,765,542 $2,594,071
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<PAGE>
AVNET, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(thousands, except per share data)
Nine Months Ended
March 27, March 28,
1998 1997
(unaudited) (unaudited)
Sales $4,371,691 $3,991,991
Cost of sales 3,631,578 3,275,835
Gross profit 740,113 716,156
Selling, shipping, general and
administrative expenses (Note 6) 510,631 474,159
Operating income 229,482 241,997
Other income, net (Note 6) 1,439 9,931
Interest expense (27,182) (18,903)
Gain on sale of Channel Master (Note 6) 33,795 -
Income before income taxes 237,534 233,025
Income taxes 102,674 97,635
Net income $ 134,860 $ 135,390
Earnings per share:
Basic $3.36 $3.15
Diluted $3.32 $3.12
Shares used to compute earnings per share:
Basic 40,119 43,016
Diluted 40,619 43,438
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<PAGE>
AVNET, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(thousands, except per share data)
Third Quarters Ended
March 27, March 28,
1998 1997
(unaudited) (unaudited)
Sales $1,512,121 $1,378,431
Cost of sales 1,259,878 1,134,816
Gross profit 252,243 243,615
Selling, shipping, general and
administrative expenses (Note 6) 171,573 165,306
Operating income 80,670 78,309
Other income, net (Note 6) 757 8,882
Interest expense (10,620) (6,232)
Income before income taxes 70,807 80,959
Income taxes 30,132 33,556
Net income $ 40,675 $ 47,403
Earnings per share:
Basic $1.04 $1.11
Diluted $1.03 $1.10
Shares used to compute earnings per share:
Basic 39,141 42,604
Diluted 39,598 43,141
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<PAGE>
AVNET, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
Nine Months Ended
March 27, March 28,
1998 1997
(unaudited) (unaudited)
Cash flows from operating activities:
Net income $ 134,860 $ 135,390
Add non-cash and other reconciling items:
Depreciation and amortization 37,449 36,856
Deferred taxes (2,032) (1,603)
Other, net (Note 7) 15,833 7,006
Gain on Channel Master sale (33,795) -
152,315 177,649
Receivables (124,980) (33,219)
Inventories (130,597) (1,452)
Payables, accruals and other, net (35,108) 34,668
Net cash flows (used for) provided from
operating activities (138,370) 177,646
Cash flows from financing activities:
Issuance(repayment) of commercial paper
and bank debt, net 254,535 (41,683)
Issuance (payment) of other debt 2,937 (3,909)
Cash dividends (18,526) (19,474)
Repurchase of common stock (167,419) (73,537)
Other, net 4,119 3,547
Net cash flows provided from (used for)
financing activities 75,646 (135,056)
Cash flows from investing activities:
Purchase of property, plant and
equipment (29,967) (24,976)
Disposition(acquisition) of
operations, net (Note 7) 92,034 (1,374)
Net cash flows provided from (used
for) investing activities 62,067 (26,350)
Effect of exchange rate changes on cash
and cash equivalents (1,258) (1,326)
Cash and cash equivalents:
- increase (decrease) (1,915) 14,914
- at beginning of year 59,312 47,808
- at end of period $ 57,397 $ 62,722
Additional cash flow information (Note 7)
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<PAGE>
AVNET, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1.In the opinion of the Company, the accompanying consolidated financial
statements contain all adjustments (consisting of normal recurring
accruals) necessary to present fairly the financial position as of
March 27, 1998 and June 27, 1997; the results of operations for the
nine months and third quarters ended March 27, 1998 and March 28, 1997;
and the cash flows for the nine months ended March 27, 1998 and March
28, 1997. For further information, refer to the consolidated financial
statements and accompanying footnotes included in the Company's Annual
Report on Form 10-K for the year ended June 27, 1997.
2.The results of operations for the nine months and third quarter ended
March 27, 1998 are not necessarily indicative of the results to be
expected for the full year.
3.Inventories:
(Thousands)
March 27, June 27,
1998 1997
Finished goods $1,006,407 $ 917,751
Work in process 8,273 13,714
Purchased parts and raw materials 89,824 75,609
$1,104,504 $1,007,074
4.From time to time, the Company may become liable with respect to
pending and threatened litigation, taxes, and environmental and other
matters. The Company has been designated a potentially responsible
party or has had other claims made against it in connection with
environmental clean-ups at several sites. Based upon the information
known to date, the Company believes that it has appropriately reserved
for its share of the costs of the clean-ups and it is not anticipated
that any contingent matters will have a material adverse impact on the
Company's financial condition, liquidity or results of operations.
5.Number of shares of common stock reserved for stock
option and stock incentive programs: 4,732,715
6.Included in the Company's results for the nine months ended March 27,
1998 is the gain on the sale of the Company's former Channel Master
business amounting to approximately $33,795,000 before income taxes.
Also included in the results for the nine months ended March 27, 1998
as operating expenses are $13,333,000 of costs relating to the
anticipated divestiture of Avnet Industrial, the closure of the
Company's Corporate Headquarters in Great Neck, NY, and the anticipated
loss on the sale of Company-owned real estate. The net effect of these
items is to increase pre-tax income, net income, and diluted earnings
per share by approximately $20,462,000, $8,723,000, and $0.21 per
share, respectively.
AVNET, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
6.(Continued)
Included in the Company's prior year third quarter as other income is
the gain on the sale of the Company's former Culver City, CA facility
amounting to approximately $7,578,000. Also included in the fiscal
1997 third quarter results as operating expenses are non-recurring
costs amounting to approximately $6,164,000 associated with the
relocation and consolidation of the Company's Culver City, CA and
Phoenix, AZ based operations, and the reorganization of its German,
Australian, and New Zealand operations. The net effect of these items
was to increase pre-tax income, net income and diluted earnings per
share for the prior year's third quarter by approximately $1,414,000,
$985,000 and $0.02 per share, respectively.
7.Additional cash flow information:
Other non-cash and reconciling items primarily include the provision
for doubtful accounts.
Disposition(acquisition) of operations, net, in the first nine months
of fiscal 1998 includes primarily the cash received in connection with
the sale of Channel Master. These proceeds were offset somewhat by
cash paid in connection with the acquisition of ECR Sales Management,
Inc., a Northwest US-based distributor of point-of-sale equipment and
bar code devices which has been made part of the Company's Penstock
business, the acquisition of the business of EXCEL-MAX Pte Ltd (now
known as Avnet GTDG Singapore), a Singapore-based distributor of
RF/Microwave, fiber optic, and other specialty electronic components,
and the acquisition of CiNERGi Technology and Devices Pte Ltd (now
known as Avnet CiNERGi Pte Ltd), a Singapore-based electronics
components distributor. In the first nine months of fiscal 1997, cash
expended for the acquisition of operations includes a deferred payment
relating to the acquisition of BFI-IBEXSA International, Inc. and cash
paid for professional and other fees associated with various
acquisitions completed during fiscal 1996.
Interest and income taxes paid in the first nine months were as
follows:
(Thousands)
1998 1997
Interest $28,264 $18,343
Income taxes $94,098 $92,403
<PAGE>
Item 2.Management's Discussion and Analysis of Financial Condition and Results
of Operations
Results of Operations
Consolidated sales were a record $1.512 billion for the third quarter of
fiscal 1998 ended March 27, 1998, up 10% as compared with last year's
third quarter sales of $1.378 billion. However, that sales comparison
includes the sales of Channel Master for the entire third quarter of 1997,
but no sales for the third quarter of the current fiscal year as Channel
Master was divested during the early part of the second quarter of fiscal
1998. The Electronic Marketing Group's sales of $1.512 billion were up
13% as compared with last year's $1.342 billion. This growth was led by
the Computer Marketing Group's 36% increase in sales over last year's
third quarter. As compared with last year's third quarter, sales of the
Electronic Marketing Group's components businesses, consisting of the
Company's OEM Marketing Group, the Industrial Marketing Group, and EMG
International, were up 7% while the OEM Marketing Group's sales were up
10%, the Industrial Marketing Group's sales were up 6%, and EMG
International's sales were down by almost 3%. Consolidated sales were
negatively impacted in the range of approximately $25 - $30 million for
the third quarter of 1998 as compared with 1997 as a result of foreign
currency translation. Had foreign currency exchange rates remained the
same as in the third quarter of last year, EMG International's third
quarter 1998 sales would have been approximately 6% higher than the prior
year period.
Included in the Company's prior year third quarter results as other income
was the gain on the sale of the Company's former Culver City, CA facility
amounting to approximately $7.6 million. Also included in the fiscal 1997
third quarter results as operating expenses were non-recurring costs
amounting to approximately $6.2 million associated with the relocation and
consolidation of the Company's Culver City, CA and Phoenix, AZ based
operations, and the reorganization of its German, Australian and New
Zealand operations. The net effect of these items was to increase fiscal
1997 third quarter pre-tax income, net income, and diluted earning per
share by approximately $1.4 million, $1.0 million, and $.02 per share,
respectively.
Consolidated gross profit margins of 16.7% in the third quarter of 1998
were lower by 1.0% of sales as compared with 17.7% in the third quarter of
last year. Even though operating expenses (before non-recurring costs in
fiscal year 1997) as a percentage of sales of 11.3% were also lower as
compared with 11.5% in the prior year period, the decrease was not enough
to offset totally the decline in the consolidated gross profit margins.
As a result, operating income (before non-recurring costs) as a percentage
of sales was 5.3% in the third quarter of 1998 as compared with 6.1% in
the third quarter of last year. Interest expense was substantially higher
in the third quarter of 1998 as compared with the prior year's quarter due
primarily to increased borrowings to fund the Company's stock repurchase
program and to fund the additional working capital requirements to support
the growth in business.
Net income in the third quarter of 1998 was $40.7 million, or $1.03 per
share on a diluted basis, as compared with $47.4 million, or $1.10 per
share on a diluted basis, in the prior year's third quarter. However, as
noted above, included in the results for last year's third quarter were
non-recurring items which had the net effect of increasing net income and
diluted earnings per share by approximately $1.0 million and $0.02 per
share, respectively. Before taking into account the net gain associated
with those non-recurring items, Avnet's consolidated net income in last
year's third quarter would have been $46.4 million, or $1.08 per share on
a diluted basis. Although net income excluding special items was down
approximately 12% as compared with last year's third quarter, which
included the operating results for Channel Master, diluted earnings per
share excluding special items was only 5% lower due to the impact of the
Company's stock buyback program. The sale of Channel Master did not have
a material impact on the comparative results as Channel Master's income in
last year's quarter was largely offset by the interest benefit received in
this year's quarter associated with the proceeds received on the sale.
Net income dollars in the current quarter were negatively impacted by the
increase in interest expense resulting from the utilization of cash to buy
back shares.
Consolidated sales for the first nine months of 1998 were $4.372 billion,
up 10% as compared with $3.992 billion in the first nine months of last
year. The Electronic Marketing Group's sales in the first nine months of
1998 were $4.333 billion, up 12% as compared with $3.857 billion in last
year's first nine months. Sales for the Computer Marketing Group and the
Electronic Marketing Group's components business were up 33% and 7%,
respectively, during the first nine months of the current year as compared
with the same period a year ago.
Included in the Company's fiscal 1998 year-to-date results (recorded in
the second quarter) is the gain on the sale of the Company's former
Channel Master business amounting to approximately $33.8 million before
income taxes. Also included in the current year's results (recorded in
the second quarter) as operating expenses are $13.3 million of costs
relating to the anticipated divestiture of Avnet Industrial, the closure
of the Company's Corporate Headquarters in Great Neck, NY, and the
anticipated loss on the sale of Company-owned real estate. The net effect
of these items is to increase pre-tax income, net income, and diluted
earnings per share by approximately $20.5 million, $8.7 million, and $0.21
per share, respectively.
Consolidated gross profit margins in the first nine months of 1998 were
16.9% as compared with 17.9% in the prior year period. Even though
operating expenses (before non-recurring costs) as a percentage of sales
decreased to 11.4% in the first nine months of 1998 from 11.7% in the
first nine months of last year, the decrease was not enough to fully
offset the decline in gross profit margins. As a result, operating income
(before non-recurring costs) as a percentage of sales decreased to 5.6% in
this year's first nine months as compared with 6.2% in the same period
last year. Interest expense was substantially higher in the first nine
months of 1998 as compared with the first nine months of 1997 due
primarily to increased borrowings to fund the Company's stock repurchase
program and to fund the additional working capital requirements to support
the growth in business.
Net income for the first nine months of 1998 was $134.9 million, or $3.32
per share on a diluted basis, as compared with $135.4 million, or $3.12
per share on a diluted basis, in the first nine months of last year.
Excluding the non-recurring items referred to above, net income in the
first nine months of 1998 was $126.1 million, or $3.11 per share on a
diluted basis, as compared with net income of $134.4 million, or $3.10 per
share on a diluted basis, in the prior year.
Liquidity and Capital Resources
During the first nine months of 1998, the Company generated $152.3 million
from income before depreciation, the gain on the sale of Channel Master
and other non-cash items, and used $290.7 million for working capital
needs resulting in $138.4 million of net cash flows being used for
operations. In addition, the Company used $45.6 million for other normal
business operations including purchases of property, plant and equipment
($30.0 million) and dividends ($18.5 million), offset by positive cash
flow from other items ($2.9 million). This resulted in $184.0 million
being used for normal business operations. The Company also used $72.5
million for other items, including cash used to repurchase common stock
($167.4 million including $5.6 million related to purchases in 1997 which
settled during the first quarter of 1998), offset by cash proceeds from
the sale of Channel Master, less cash used for acquisitions and
acquisition related expenses ($92.0 million) and an increase in other debt
($2.9 million). This overall net use of cash of $256.5 million was funded
by an increase in outstanding bank debt and commercial paper (almost
$254.6 million) and the use of available cash ($1.9 million).
The Company's quick assets at March 27, 1998 totaled $945.2 million as
compared with $859.3 million at June 27, 1997 and exceeded the Company's
current liabilities by $393.8 million as compared with a $281.9 million
excess at June 27, 1997. Working capital at March 27, 1998 was $1,536.0
million as compared with $1,319.0 million at June 27, 1997. At the end of
the first nine months, to support each dollar of current liabilities, the
Company had $1.72 of quick assets and $2.07 of other current assets for a
total of $3.79 of current assets as compared with $3.28 at June 27, 1997.
In the first quarter of 1998, the Company renegotiated its revolving
credit agreement with a syndicate of banks led by NationsBank, N.A.
("NationsBank"). The new agreement provides a five-year facility with a
line of credit of up to $700.0 million. The Company may select from
various interest rate options and maturities under this facility. The
facility will serve as a primary funding vehicle as well as a backup for
the Company's commercial paper program. At the same time, the Company
cancelled its additional credit facility with NationsBank which was
established in 1997 and which provided a line of credit up to $100.0
million.
During the first nine months of 1998, shareholders' equity decreased by
$56.4 million to $1,445.8 million at March 27, 1998, while total debt
increased by $254.1 million to $768.7 million. The net decrease in
shareholders' equity was comprised of net income ($134.9 million), offset
by dividends ($18.3 million), the impact of the stock repurchase program
($170.4 million) and other items ($2.6 million). As a result, the total
debt to capital ratio (shareholders' equity plus total debt) was 34.7% at
March 27, 1998 as compared with 25.5% at June 27, 1997. The Company's
favorable balance sheet ratios would facilitate additional financing if,
in the opinion of management, such financing would enhance the future
operations of the Company.
During the second quarter of 1998, the Company completed the original $200
million stock repurchase program that was authorized on August 1, 1996 by
its Board of Directors and on November 19, 1997, the Company's Board of
Directors authorized a new $250 million stock repurchase program. The
stock is to be purchased in the open market from time-to-time or in
directly negotiated purchases. During the third quarter and first nine
months of fiscal 1998, the Company repurchased approximately 1.4 million
and 2.7 million shares, respectively, bringing the cumulative total
through March 27, 1998 under both programs up to approximately 5.2 million
shares. During the current fiscal year through the end of the third
quarter, the Company has used approximately $167.4 million to purchase its
shares, and since the initial repurchase program was authorized in August,
1996, has used approximately $309.2 million. So far during the fourth
quarter of fiscal 1998 (through April 30, 1998), the Company has
repurchased almost 1.0 million additional shares.
Certain of the Company's operations, primarily its international
subsidiaries, occasionally purchase and sell product in currencies other
than their functional currencies. This subjects the Company to the risks
associated with the fluctuations of foreign currency exchange rates. The
Company reduces this risk by utilizing natural hedging (offsetting
receivables and payables) as well as by creating offsetting positions
through the use of derivative financial instruments, primarily forward
foreign exchange contracts with maturities of less than sixty days. The
market risk related to the foreign exchange contracts is offset by the
changes in valuation of the underlying items being hedged. The amount of
risk and the use of derivative financial instruments described above is
not material to the Company's financial position or results of operations.
The Company does not hedge either its investment in its foreign operations
or its floating interest rate exposures.
With the year 2000 less than two years away, many companies, including
Avnet, will need to modify their computer systems and applications which
currently use two-digit fields to designate a year ("Year 2000 Issue").
The Company has assessed and continues to assess the impact of the Year
2000 Issue on its reporting systems and operations. The costs to modify
the existing computer systems and applications are significant; however,
they will not be material to the Company's financial position or results
of operations. Although the Company cannot control the efforts of the
many third parties with which it interfaces, it does not currently
anticipate that there will be any significant disruption of the Company's
ability to transact business.
The Company has recently undertaken a study to restructure its businesses
so as to streamline its business processes and create a more competitive
cost structure. The anticipated fourth quarter fiscal 1998 restructuring
is expected to result in substantial savings and operating benefits for
the Company, both domestically and abroad. Since work on this effort has
not yet been completed, the Company is not yet in a position to estimate
the costs or benefits to be recognized as a result of the anticipated
restructuring.
Currently, the Company does not have any material commitments for capital
expenditures. The Company and the former owners of a Company-owned site
in Oxford, North Carolina have entered into a Consent Decree and Court
Order with the Environmental Protection Agency (EPA) for the environmental
clean-up of the site, the cost of which, according to the EPA's remedial
investigation and feasibility study, is estimated to be approximately $6.3
million, exclusive of the $1.5 million in EPA past costs paid by the
potentially responsible parties (PRPs). Pursuant to a Consent Decree and
Court Order entered into between the Company and the former owners of the
site, the former owners have agreed to bear at least 70% of the clean-up
costs of the site, and the Company will be responsible for not more than
30% of those costs. In addition, the Company has received notice from a
third party of its intention to seek indemnification for costs it may
incur in connection with an environmental clean-up at a site in Rush,
Pennsylvania resulting from the alleged disposal of wire insulation
material at the site by a former unit of the Company. Based upon the
information known to date, the Company believes that it has appropriately
accrued in its financial statements for its share of the costs of the
clean-up at all of the above mentioned sites. The Company has been
notified of claims made against it at an environmental clean-up site in
Huguenot, New York. At this time, the Company cannot estimate the amount
of its potential liability, if any, for clean-up costs in connection with
this site, but does not anticipate that this matter or any other
contingent matters will have a material adverse impact on the Company's
financial condition, liquidity or results of operations. The Company is
not now aware of any commitments, contingencies or events within its
control which may significantly change its ability to generate sufficient
cash from internal or external sources to meet its needs.
"Safe Harbor" statement under the Private Securities Litigation Reform Act
of 1995: Any statements made in this Report which are not historical facts
are forward-looking statements that involve risks and uncertainties.
Among the factors which could cause actual results to differ materially
are (i) major changes in business conditions and the economy in general,
(ii) risks associated with foreign operations, such as currency
fluctuations, (iii) allocations of products by suppliers, and (iv) changes
in market demand and pricing pressure.
Item 3.Quantative and Qualitative Disclosures About Market Risk
See Note 1 to the consolidated financial statements included in the
Company's Annual Report on Form 10-K for the year ended June 27, 1997 and
the Liquidity and Capital Resources section of Management's Discussion and
Analysis of Financial Condition and Results of Operations in this Form 10-
Q.
<PAGE>
PART II - OTHER INFORMATION
Item 4.Submission of Matters to a Vote of Security-Holders
None to be reported.
Item 6.Exhibits and Reports on Form 8-K:
A.The following documents are filed as part of this report:
1. Exhibits:
Exhibit No.
3A. Certificate of Incorporation of the Company as currently in
effect (incorporated by reference).
3B. By-Laws of the Company as currently in effect (incorporated
herein by reference to the Company's Current Report on Form
8-K dated February 12, 1996, Exhibit 3 (ii)).
4. The total amount of securities authorized under any
instrument which defines the rights of holders of the
Company's long-term debt does not exceed 10% of the total
assets of the Company and its subsidiaries on a consolidated
basis. Therefore, none of such instruments are required to
be filed as exhibits to this Report. The Company agrees to
furnish copies of such instruments to the Commission upon
request.
11. Computation of earnings per share (filed herewith)
27. Financial Data Schedule (electronic filing only)
B.Reports on Form 8-K
The Company filed a Current Report on Form 8-K bearing a cover date of
September 25, 1997 and dated November 5, 1997, whereby it filed an
Employment Agreement dated September 25, 1997 between the Company and
Mr. Roy Vallee.
<PAGE>
EXHIBIT 11
AVNET, INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
(Thousands, except per share data)
Nine Months Ended
March 27, March 28,
1998 1997
A.Basic earnings per share:
Net income $ 134,860 $ 135,390
Common shares outstanding
(weighted average) 40,119 43,016
Basic earnings per share $ 3.36 $ 3.15
B.Diluted earnings per share:
Net income $ 134,860 $ 135,390
Common shares outstanding
(weighted average) 40,119 43,016
Common equivalent shares:
Contingent shares issuable 121 134
Exercise of warrants and options
using the treasury method 379 288
Total common and common equivalent
shares 40,619 43,438
Diluted earnings per share $ 3.32 $ 3.12
As of the periods ended December 26, 1997, the Company adopted Statement
of Financial Accounting Standards No. 128 ("SFAS 128"), "Earnings Per
Share". Under the new standard, Basic earnings per share is computed
based on the weighted average number of common shares outstanding and
excludes any potential dilution; Diluted earnings per share reflects
potential dilution from the exercise or conversion of securities into
common stock. Earnings per share data for all prior periods presented
have been restated to conform with the provisions of SFAS 128.
<PAGE>
EXHIBIT 11
AVNET, INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
(Thousands, except per share data)
Third Quarters Ended
March 27, March 28,
1998 1997
A.Basic earnings per share:
Net income $ 40,675 $ 47,403
Common shares outstanding
(weighted average) 39,141 42,604
Basic earnings per share $ 1.04 $ 1.11
B.Diluted earnings per share:
Net income $ 40,675 $ 47,403
Common shares outstanding
(weighted average) 39,141 42,604
Common equivalent shares:
Contingent shares issuable 103 116
Exercise of warrants and options
using the treasury method 354 421
Total common and common equivalent
shares 39,598 43,141
Diluted earnings per share $ 1.03 $ 1.10
As of the periods ended December 26, 1997, the Company adopted Statement
of Financial Accounting Standards No. 128 ("SFAS 128"), "Earnings Per
Share". Under the new standard, Basic earnings per share is computed
based on the weighted average number of common shares outstanding and
excludes any potential dilution; Diluted earnings per share reflects
potential dilution from the exercise or conversion of securities into
common stock. Earnings per share data for all prior periods presented
have been restated to conform with the provisions of SFAS 128.
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S I G N A T U R E
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Avnet, Inc.
(Registrant)
By: s/Raymond Sadowski
Raymond Sadowski
Senior Vice President,
Chief Financial Officer
and Assistant Secretary
By: s/John F. Cole
John F. Cole
Controller and Principal
Accounting Officer
May 8, 1998
Date
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AND INCOME STATEMENT AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-26-1998
<PERIOD-END> MAR-27-1998
<CASH> 57,397
<SECURITIES> 0
<RECEIVABLES> 920,210
<ALLOWANCES> 32,428
<INVENTORY> 1,104,504
<CURRENT-ASSETS> 2,087,348
<PP&E> 333,676
<DEPRECIATION> 178,406
<TOTAL-ASSETS> 2,765,542
<CURRENT-LIABILITIES> 551,342
<BONDS> 768,419
0
0
<COMMON> 44,328
<OTHER-SE> 1,401,453
<TOTAL-LIABILITY-AND-EQUITY> 2,765,542
<SALES> 4,371,691
<TOTAL-REVENUES> 4,373,130
<CGS> 3,631,578
<TOTAL-COSTS> 4,142,209
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 27,182
<INCOME-PRETAX> 237,534
<INCOME-TAX> 102,674
<INCOME-CONTINUING> 134,860
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 134,860
<EPS-PRIMARY> 3.36
<EPS-DILUTED> 3.32
</TABLE>
