<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) January 26, 2000
A V N E T, I N C.
(Exact name of Registrant as Specified in its Charter)
New York 1-4224 11-1890605
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
2211 South 47th Street, Phoenix, Arizona 85034
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code (480) 643-2000
<PAGE> 2
Item 5. Other Events
The following Press Release of Avnet, Inc. was issued January 26, 2000. Such
Press Release is filed as Exhibit 99 attached hereto.
Item 7. Financial Statements and Exhibits
(a) Inapplicable.
(b) Inapplicable.
(c) Exhibits:
27 Financial Data Schedule (electronic filing
only)
99 Press Release of Avnet, Inc.
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)
/s/ Raymond Sadowski
Date: January 26, 2000 By: __________________________
Raymond Sadowski
Senior Vice President and
Chief Financial Officer
2
<PAGE> 3
EXHIBIT INDEX
Exhibit Number Description of Exhibit
27 Financial Data Schedule (electronic
filing only)
99 Press Release of Avnet, Inc. issued
January 26, 2000
3
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-2000
<PERIOD-START> JUL-03-1999
<PERIOD-END> DEC-31-1999
<CASH> 71,529
<SECURITIES> 0
<RECEIVABLES> 1,434,155
<ALLOWANCES> 35,814
<INVENTORY> 1,624,726
<CURRENT-ASSETS> 3,178,951
<PP&E> 571,642
<DEPRECIATION> 307,474
<TOTAL-ASSETS> 4,392,438
<CURRENT-LIABILITIES> 1,592,129
<BONDS> 1,069,202
0
0
<COMMON> 45,048
<OTHER-SE> 1,686,058
<TOTAL-LIABILITY-AND-EQUITY> 4,392,438
<SALES> 3,757,094
<TOTAL-REVENUES> 3,757,094
<CGS> 3,243,622
<TOTAL-COSTS> 3,664,492
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 27,600
<INCOME-PRETAX> 67,823
<INCOME-TAX> 30,545
<INCOME-CONTINUING> 37,278
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 37,278
<EPS-BASIC> 0.98
<EPS-DILUTED> 0.97
</TABLE>
<PAGE> 1
EXHIBIT 99
[AVNET, INC. letterhead]
PRESS RELEASE
JANUARY 26, 2000
AVNET REPORTS SECOND QUARTER RESULTS AND
SUCCESSFUL INTEGRATION OF MARSHALL INDUSTRIES
Phoenix, Arizona -- Avnet, Inc. (NYSE:AVT) reported results today for its second
quarter and first half ended December 31, 1999 which included the impact of its
October 20, 1999 acquisition of Marshall Industries, the largest acquisition in
the history of the electronic components distribution industry. Net income,
excluding special charges described below was $32.7 million, or $0.79 per share
on a diluted basis, in the second quarter of fiscal 2000 as compared with $26.5
million, or $0.74 per share on a diluted basis, in last year's second quarter.
Sales for the second quarter of fiscal 2000 were a record $2.10 billion, up 38%
as compared with sales of $1.53 billion in the second quarter of last year.
Including the special charges referred to below, the current year's second
quarter net income was $15.1 million, or $0.37 per share on a diluted basis.
For the first half of fiscal 2000, Avnet reported net income, excluding special
charges, of $58.8 million, or $1.53 per share on a diluted basis, as compared
with net income, excluding special charges, of $57.9 million, or $1.59 per share
on a diluted basis, in the first half of last year. Sales for the first half of
the current fiscal year were $3.76 billion as compared with $3.11 billion in the
first half of last year.
Included in the Company's current year second quarter results are $28.0 million
pre-tax ($17.7 million included in operating expenses and $10.3 included in cost
of sales) and $17.6 million after-tax, or $0.42 per share on a diluted basis, of
incremental special charges associated with the integration of Marshall
Industries ($18.4 million pre-tax), the reorganization of the Company's
Electronics Marketing Asian operations ($5.4 million pre-tax), and costs related
to the consolidation of the Company's Electronics Marketing European warehousing
operations and costs incurred in connection with its lawsuit against Wyle
Laboratories, Inc. ($4.2 million pre-tax). The charges related to the
integration of Marshall Industries and the reorganization of the Asian
operations include severance, inventory reserves required related to supplier
terminations, real property lease terminations, employee and facility relocation
costs, special incentive payments and other items.
<PAGE> 2
The results for the first half of fiscal 2000 also include $6.1 million pre-tax
(included in operating expenses), $4.0 million after-tax and $0.11 per share on
a diluted basis of incremental special charges recorded in the first quarter
associated with the reorganization of the Company's Electronics Marketing
European operations consisting primarily of costs related to the consolidation
of warehousing operations. These charges were for severance, adjustment of the
carrying value of fixed assets, real property lease terminations and other
items. Including the special charges referred to above, the first half of fiscal
2000 net income and diluted earnings per share were $37.3 million and $0.97,
respectively. Diluted earnings per share for the first half of fiscal 2000 is
less by $0.03 than the sum of the applicable amounts for the first and second
quarters due to the effect of the issuance of shares in connection with the
acquisition of Marshall Industries and the amount of the special items.
The comparative first half of fiscal 1999 results mentioned above do not include
$26.5 million pre-tax, $15.7 million after-tax and $0.43 per share on a diluted
basis of incremental special charges recorded in the first quarter associated
principally with the reorganization of the Company's Electronics Marketing
European operations. Approximately $18.6 million of the pre-tax charge was
included in operating expenses and $7.9 million was included in cost of sales.
These charges included severance, inventory reserves required related to
supplier terminations and other items. Including these charges, the first half
of fiscal 1999 net income and diluted earnings per share were $42.2 million and
$1.16, respectively.
Roy Vallee, Avnet's Chairman and CEO, stated that excluding the impact of
acquisitions and divestitures, second quarter fiscal 2000 sales were
approximately 9% higher than a year ago, and up roughly 2% on a sequential
quarterly basis. He further stated that with the acquisition of Marshall
Industries, Avnet has regained the number one position in the strategically
important North American electronic components distribution market. Mr. Vallee
went on to say that he was pleased by the rapid and highly successful
integration of Marshall which included the full merger of computer systems and
sales forces within forty-five days following the acquisition. He further added
that the successful integration of Marshall and the other cost savings actions
taken in connection with the reorganization of Electronics Marketing has
resulted in sequential operating margin improvement and the lowest ratio of
operating expenses to sales in the Company's history.
Sales for Electronics Marketing ("EM") in the second quarter of fiscal 2000 were
a record $1.51 billion as compared with $1.15 billion in last year's second
quarter and $1.23 billion in the first quarter of fiscal 2000. EM's operating
income, excluding special charges and before allocation of corporate
headquarters' expenses, was $74.6 million as compared with $61.5 million and
$59.3 million in the second quarter of last year and the first quarter of the
current year, respectively. On a pro forma basis, EM's sales (excluding the
impact of acquisitions, divestitures and Avnet Applied Computing which was
separated into its own group) were up approximately 16% and 1% as compared with
the second quarter of last year and the first quarter of the current year.
2
<PAGE> 3
The Computer Marketing Group's ("CMG") sales in the second quarter of fiscal
2000 were $459.5 million, up approximately 23% as compared with $375.0 million
in last year's second quarter and up approximately 7% as compared with sales of
$428.3 in the first quarter of fiscal 2000. CMG's operating income before the
allocation of corporate headquarters' expenses was $8.5 million in the current
year's second quarter as compared with $9.5 million and $8.6 million in the
second quarter of last year and the first quarter of the current fiscal year,
respectively.
Avnet Applied Computing ("AAC"), which was successfully launched by combining
certain segments from EM's and CMG's operations, started operating in North
America as of the beginning of the second quarter of fiscal 2000 and will begin
operating in Europe and Asia by the end of the current fiscal year. AAC's sales
and operating income (North America only) were $136.4 million and $4.2 million,
respectively, in the second quarter of fiscal 2000. AAC sales for Europe and
Asia in the second quarter of fiscal 2000, which were included in EM's sales
indicated above, were approximately $132.3 million and $9.2 million,
respectively, making AAC's global sales approximately $277.9 million.
Phoenix, Arizona-based Avnet, Inc., a Fortune 300 company with annual sales
exceeding $6.4 billion ($9.0 billion pro forma including acquisitions), is one
of the world's largest distributors of semiconductor, interconnect, passive and
electromechanical components and computer products from the industry's leading
manufacturers. Serving customers in 60 countries, Avnet markets, inventories and
adds value to these products and provides world-class supply-chain integration,
engineering design and technical services. The Company's Web site is located at
www.avnet.com.
3
<PAGE> 4
AVNET, INC.
(MILLIONS EXCEPT PER SHARE DATA)
INCLUDING SPECIAL ITEMS (1) SECOND QUARTERS ENDED
DECEMBER 31, JANUARY 1,
1999(1) 1999 % CHANGE
----------- ---------- ---------
Sales $2,102.8 $1,526.9 + 38%
Income before income taxes 28.4 45.9 - 38%
Net income 15.1 26.5 - 43%
Earnings per share:
Basic $0.37 $0.74 - 50%
Diluted $0.37 $0.74 - 50%
EXCLUDING SPECIAL ITEMS(1) SECOND QUARTERS ENDED
DECEMBER 31, JANUARY 1,
1999(1) 1999 % CHANGE
----------- ---------- ---------
Sales $2,102.8 $1,526.9 + 38%
Income before income taxes 56.5 45.9 + 23%
Net income 32.7 26.5 + 23%
Earnings per share:
Basic $0.80 $0.74 + 8%
Diluted $0.79 $0.74 + 7%
(1) Fiscal 2000 second quarter results include the impact of incremental
special charges associated with the integration of Marshall Industries,
the reorganization of the Company's Electronics Marketing Asian operations,
costs related to the consolidation of the Company's Electronics Marketing
European warehousing operations and costs incurred in connection with its
lawsuit against Wyle Laboratories, Inc. amounting to $28.0 million
pre-tax, $17.6 million after-tax and $0.42 per share on a diluted basis.
4
<PAGE> 5
AVNET, INC.
(MILLIONS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
INCLUDING SPECIAL ITEMS(1)(2) FIRST HALVES ENDED
------------------
DECEMBER 31, JANUARY 1,
1999(1) 1999(2) % CHANGE
------------ ---------- --------
<S> <C> <C> <C>
Sales $3,757.1 $3,108.5 +21%
Income before income taxes 67.8 74.6 -9%
Net income 37.3 42.2 -12%
Earnings per share:
Basic $ 0.98 $ 1.17 -16%
Diluted $ 0.97 $ 1.16 -16%
</TABLE>
<TABLE>
<CAPTION>
EXCLUDING SPECIAL ITEMS(1)(2) FIRST HALVES ENDED
------------------
DECEMBER 31, JANUARY 1,
1999(1) 1999(2) % CHANGE
------------ ---------- --------
<S> <C> <C> <C>
Sales $3,757.1 $3,108.5 +21%
Income before income taxes 102.0 101.1 +1%
Net income 58.8 57.9 +2%
Earnings per share:
Basic $ 1.54 $ 1.60 -4%
Diluted $ 1.53 $ 1.59 -4%
</TABLE>
(1) Fiscal 2000 first half results include the second quarter special charges
referred to in note 1 on page 3 and first quarter special charges
associated with the reorganization of the Company's Electronics Marketing
European operations amounting to $6.1 million pre-tax, $4.0 million
after-tax and $0.11 per share on a diluted basis. The total special charges
for the first half of fiscal 2000 amounted to $34.1 million pre-tax, $21.6
million after-tax and $0.53 per share on a diluted basis.
(2) Fiscal 1999 first half special items consist of the impact of incremental
special charges (recorded in the first quarter) associated with the
reorganization of the Company's Electronics Marketing Group amounting to
$26.5 million pre-tax, $15.7 million after-tax and $0.43 per share on a
diluted basis.
5
<PAGE> 6
AVNET, INC.
CONSOLIDATED STATEMENTS OF INCOME
(THOUSANDS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
SECOND QUARTERS ENDED
--------------------------
DECEMBER 31, JANUARY 1,
1999(1) 1999
------------ -----------
<S> <C> <C>
Sales $2,102,771 $1,526,902
Cost of sales 1,820,102 1,298,112
---------- ----------
Gross profit 282,669 228,790
Operating expenses 238,509 170,614
---------- ----------
Operating income 44,160 58,176
Other income, net 2,007 753
Interest expense (17,734) (13,021)
---------- ----------
Income before income taxes 28,433 45,908
Income taxes 13,301 19,374
---------- ----------
Net income $ 15,132 $ 26,534
========== ==========
Earnings per share:
Basic $ 0.37 $ 0.74
========== ==========
Diluted $ 0.37 $ 0.74
========== ==========
Shares used to compute
earnings per share:
Basic 41,117 35,629
========== ==========
Diluted 41,415 36,004
========== ==========
</TABLE>
(1) Fiscal 2000 second quarter results include the impact of incremental
special charges associated with the integration of Marshall Industries, the
reorganization of the Company's Electronics Marketing Asian operations,
costs related to the consolidation of the Company's Electronics Marketing
European warehousing operations and costs incurred in connection with its
law suit against Wyle Laboratories, Inc. amounting to $28.0 million
pre-tax, $17.6 million after-tax and $0.42 per share on a diluted basis.
6
<PAGE> 7
AVNET, INC.
CONSOLIDATED STATEMENTS OF INCOME
(THOUSANDS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
FIRST HALVES ENDED
------------------
DECEMBER 31, JANUARY 1,
1999(1) 1999(2)
------------ ----------
<S> <C> <C>
Sales $3,757,094 $3,108,505
Cost of sales 3,243,622 2,647,805
------------ ----------
Gross profit 513,472 460,700
Operating expenses 420,869 361,398
------------ ----------
Operating income 92,603 99,302
Other income, net 2,820 1,446
Interest expense (27,600) (26,169)
------------ ----------
Income before income taxes 67,823 74,579
Income taxes 30,545 32,387
------------ ----------
Net income $ 37,278 $ 42,192
============ ==========
Earnings per share:
Basic $ 0.98 $ 1.17
============ ==========
Diluted $ 0.97 $ 1.16
============ ==========
Shares used to compute earnings per share:
Basic 38,158 36,029
============ ==========
Diluted 38,410 36,480
============ ==========
</TABLE>
(1) Fiscal 2000 first half results include the second quarter special charges
referred to in note 1 on page 5 and first quarter special charges
associated with the reorganization of the Company's Electronics Marketing
European operations amounting to $6.1 million pre-tax, $4.0 million
after-tax and $0.11 per share on a diluted basis. The total special charges
for the first half of fiscal 2000 amounted to $34.1 million pre-tax, $21.6
million after-tax and $0.53 per share on a diluted basis.
(2) Fiscal 1999 first half special items consist of the impact of incremental
special charges (recorded in the first quarter) associated with the
reorganization of the Company's Electronics Marketing Group amounting to
$26.5 million pre-tax, $15.7 million after-tax and $0.43 per share on a
diluted basis.
7
<PAGE> 8
CONSOLIDATED BALANCE SHEETS
(THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER 31, JULY 2,
1999 1999
------------ ----------
<S> <C> <C>
Assets:
Current assets:
Cash and cash equivalents $71,529 $311,982
Receivables 1,398,341 960,639
Inventories 1,624,726 997,247
Other 84,355 43,455
---------- ----------
Total current assets 3,178,951 2,313,323
Property, plant & equipment 264,168 194,012
Goodwill 762,542 385,648
Other assets 186,777 91,714
---------- ----------
Total assets 4,392,438 2,984,697
---------- ----------
Less liabilities:
Current liabilities:
Borrowings due within one year 617,103 288
Accounts payable 742,994 480,377
Accrued expenses and other 232,033 315,198
---------- ----------
Total current liabilities 1,592,130 795,863
Long-term debt, less due within one year 1,069,202 791,226
---------- ----------
Total liabilities 2,661,332 1,587,089
---------- ----------
Shareholders' equity $1,731,106 $1,397,608
========== ==========
</TABLE>
8
