Avnet (AVT) Q4 2001 earnings summary

Executive summary

• FY01 sales rose 29% to $12.814B, but a sharp second-half technology downturn and $327.5M in special charges reduced continuing-operations net income to $97K.

• Adjusted for special charges, continuing-operations net income was $236.8M and diluted EPS was $1.99; reported net income, including discontinued operations, was $15.4M.

Financial highlights

• Sales were $12.814B, up 29% YoY; gross profit was $1.866B and reported operating income was $253.7M.

• The $327.5M FY01 special charge comprised $80.6M in cost of sales and $246.9M in operating expenses; after-tax impact was $236.7M, or $1.99 per diluted share for FY.

• Q4 sales fell 27% QoQ to $2.538B; adjusted diluted EPS before special charges was $0.05 for the June quarter.

Outlook and guidance

• Management expected the economic downturn to continue pressuring sales and earnings; cost reductions were expected to continue at least through H1 FY02.

• FY02 priorities included effective cash management, higher margins, improved return on working capital, and growth in fee-based services.

• Further material acquisitions were not anticipated until recent integrations were completed and the balance sheet strengthened.