Avnet Reports Third Quarter Fiscal 2022 Financial Results

Rhea-AI Summary

Avnet reported third-quarter sales of $6.5 billion, a 32% increase year-over-year and 11% sequentially. Diluted EPS rose to $1.84, with adjusted EPS at $2.15. Operating margins improved for both Electronic Components (4.4%) and Farnell (14.9%). The Americas saw a 40.2% sales rise, while overall demand for supply chain orchestration contributed to strong performance. For Q4, the company anticipates sales between $6.0B and $6.4B, with adjusted EPS guidance of $1.90 to $2.00.

Positive

• Sales increased by 32% year-over-year to $6.5 billion.
• Diluted EPS reached $1.84, up 72% from the previous year.
• Adjusted diluted EPS grew 190.5% year-over-year to $2.15.
• Operating margin for Farnell improved to 14.9%, a record high.
• Returned $25.6 million to shareholders via dividends, with a 23.8% year-over-year increase.

Negative

• Geopolitical uncertainty may affect future performance.
• Guidance indicates potential challenges with market conditions and inventory availability.

Third quarter sales of $6.5 billion, up 32% year over year and 11% sequentially

Diluted EPS of $1.84 and adjusted diluted EPS of $2.15

Electronic Components and Farnell operating margins increased to 4.4% and 14.9%, respectively

PHOENIX--(BUSINESS WIRE)-- Avnet, Inc. (Nasdaq: AVT) today announced results for its third quarter ended April 2, 2022.

Commenting on the Company’s financial results, Avnet Chief Executive Officer Phil Gallagher stated, “We are pleased to report another strong quarter of sales and operating margin growth. Farnell achieved record operating margin as our continued investments in inventory breadth and e-commerce capabilities continue to pay off. Supported by increased sales, the Americas expanded operating margins for the fifth consecutive quarter. Growing demand for supply chain orchestration is driving strong financial performance across our global business. Looking ahead to the fourth quarter, amid the backdrop of geopolitical uncertainty, we continue to anticipate a favorable demand environment and expect to sustain strong margins from our recently implemented operating improvements.”

Fiscal Third Quarter Key Financial Highlights:

• Sales of $6.5 billion, up from $5.9 billion sequentially and $4.9 billion in the prior year quarter.
  • On a constant currency basis, sales grew 35.7% year over year and 11.4% sequentially.
• GAAP diluted earnings per share of $1.84, compared with $1.07 in the prior year quarter.
  • Non-GAAP adjusted diluted earnings per share of $2.15, compared with $0.74 in the prior year quarter.
• Farnell operating margins increased 123 basis points sequentially to 14.9%.
• Electronic Components operating margins increased 92 basis points sequentially to 4.4%, supported by growth in EMEA and the Americas and better than expected results in Asia.
• Returned $25.6 million to shareholders in dividends, with the dividend payout increasing 23.8% year over year.

Key Financial Metrics
($ in millions, except per share data)
Third Quarter Results (GAAP)
		Mar – 22				Mar – 21				Change Y/Y			Dec – 21				Change Q/Q
Sales		$	6,488.1			$	4,916.7			32.0	%		$	5,865.2			10.6	%
Operating Income			274.4				87.7			213.0	%			211.7			29.6	%
Operating Income Margin			4.2	%			1.8	%		245	bps			3.6	%		62	bps
Diluted Earnings Per Share (EPS)		$	1.84			$	1.07			72.0	%		$	1.50			22.7	%
Third Quarter Results (Non-GAAP)(1)
		Mar – 22				Mar – 21				Change Y/Y			Dec – 21				Change Q/Q
Sales		$	6,488.1			$	4,916.7			32.0	%		$	5,865.2			10.6	%
Adjusted Operating Income			303.7				110.5			174.8	%			215.5			41.0	%
Adjusted Operating Income Margin			4.7	%			2.3	%		243	bps			3.7	%		101	bps
Adjusted Diluted Earnings Per Share (EPS)		$	2.15			$	0.74			190.5	%		$	1.51			42.4	%
Segment and Geographical Mix
		Mar – 22				Mar – 21				Change Y/Y			Dec – 21				Change Q/Q
Electronic Components (EC) Sales		$	6,019.1			$	4,520.6			33.2	%		$	5,424.3			11.0	%
EC Operating Income Margin			4.4	%			2.6	%		178	bps			3.5	%		92	bps
Farnell Sales		$	469.0			$	396.1			18.4	%		$	440.9			6.4	%
Farnell Operating Income Margin			14.9	%			6.0	%		886	bps			13.7	%		123	bps
Americas Sales		$	1,627.2			$	1,161.0			40.2	%		$	1,391.5			16.9	%
EMEA Sales			2,185.7				1,585.6			37.9	%			1,840.8			18.7	%
Asia Sales			2,675.2				2,170.1			23.3	%			2,632.9			1.6	%

_________________________

(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.

Outlook for the Fourth Quarter of Fiscal 2022 Ending on July 2, 2022
		Guidance Range		Midpoint
Sales		$6.0B – $6.4B		$6.2B
Adjusted Diluted EPS(1)		$1.90 – $2.00		$1.95

_________________________

(1)	A reconciliation of non-GAAP guidance to GAAP guidance is presented in the “Non-GAAP Financial Information” section of this press release.

The above guidance is based upon current market conditions and inventory availability, the current state of COVID restrictions and geopolitical events. The above guidance excludes amortization of intangibles, the possibility of increased COVID restrictions, any additional expense associated with the Russian-Ukraine conflict and certain income tax adjustments. The above guidance assumes an effective tax rate of between 21% and 25%. The above guidance assumes 99 million average diluted shares outstanding and currency exchange rates versus the U.S. Dollar as shown in the table below:

		Q4 Fiscal
		2022		Q3 Fiscal		Q4 Fiscal
		Guidance		2022		2021
Euro		$1.08		$1.12		$1.20
GBP		$1.30		$1.34		$1.40

Today’s Conference Call and Webcast Details

Avnet will host a quarterly webcast and teleconference today at 1:30 p.m. PT and 4:30 p.m. ET to discuss its financial results and provide a corporate update. The webcast can be accessed via Avnet’s Investor Relations web page at: https://ir.avnet.com.

Those who would still like to participate in the live call can dial 877-407-8112 or 201-689-8840. A replay of the conference call will be available for 90 days, through July 26, 2022 at 5:00 p.m. ET, and can be accessed by dialing: 877-660-6853 or 201-612-7415 and using Conference ID: 13726985.

Forward-Looking Statements

This document contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, with respect to the financial condition, results of operations and business of the Company. You can find many of these statements by looking for words like “believes,” “projected”, “plans,” “expects,” “anticipates,” “should,” “will,” “may,” “estimates” or similar expressions. These forward-looking statements are subject to numerous assumptions, risks and uncertainties. The following important factors, in addition to those discussed elsewhere in the Company’s Annual Report on Form 10-K for the fiscal year ended July 3, 2021 and subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, could affect the Company’s future results of operations, and could cause those results or other outcomes to differ materially from those expressed or implied in the forward-looking statements: geopolitical events and military conflicts; pandemics and other health-related crises, including COVID-19; competitive pressures among distributors of electronic components; an industry down-cycle in semiconductors; relationships with key suppliers and allocations of products by suppliers; risks relating to the Company’s international sales and operations, including risks relating to the ability to repatriate cash, foreign currency fluctuations, inflation, duties and taxes, and compliance with international and U.S. laws; risks relating to acquisitions, divestitures and investments; adverse effects on the Company’s supply chain, operations of its distribution centers, shipping costs, third-party service providers, customers and suppliers, including as a result of issues caused by military conflicts, natural and weather-related disasters, pandemics and health related crisis, warehouse modernization and relocation efforts; risks related to cyber-attacks, other privacy and security incidents and information systems failures, including related to current or future implementations, integrations or upgrades; general economic and business conditions (domestic, foreign and global) affecting the Company’s operations and financial performance and, indirectly, the Company’s credit ratings, debt covenant compliance, liquidity and access to financing; constraints on employee retention and hiring; and legislative or regulatory changes affecting the Company’s businesses.

Any forward-looking statement speaks only as of the date on which that statement is made. Except as required by law, the Company assumes no obligation to update any forward-looking statement to reflect events or circumstances that occur after the date on which the statement is made.

About Avnet

As a leading global technology distributor and solutions provider, Avnet has served customers’ evolving needs for an entire century. We support customers at each stage of a product’s lifecycle, from idea to design and from prototype to production. Our unique position at the center of the technology value chain enables us to accelerate the design and supply stages of product development so customers can realize revenue faster. Decade after decade, Avnet helps its customers and suppliers around the world realize the transformative possibilities of technology. Learn more about Avnet at www.avnet.com. (AVT_IR)

AVNET, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
		Third Quarters Ended								Nine Months Ended
		April 2,				April 3,				April 2,				April 3,
		2022				2021				2022				2021
		(Thousands, except per share data)
Sales		$	6,488,143			$	4,916,714			$	17,938,055			$	14,307,945
Cost of sales			5,675,110				4,348,364				15,752,295				12,712,262
Gross profit			813,033				568,350				2,185,760				1,595,683
Selling, general and administrative expenses			512,364				463,092				1,499,904				1,376,333
Russian-Ukraine conflict related expenses			26,261				—				26,261				—
Restructuring, integration and other expenses			—				17,574				5,272				55,943
Operating income			274,408				87,684				654,323				163,407
Other (expense) income, net			(469	)			4,779				858				(16,052	)
Interest and other financing expenses, net			(25,914	)			(22,342	)			(70,388	)			(66,128	)
Income before taxes			248,025				70,121				584,793				81,227
Income tax expense (benefit)			64,608				(37,363	)			139,237				(26,532	)
Net income		$	183,417			$	107,484			$	445,556			$	107,759
Earnings per share:
Basic		$	1.86			$	1.08			$	4.50			$	1.09
Diluted		$	1.84			$	1.07			$	4.44			$	1.08
Shares used to compute earnings per share:
Basic			98,659				99,542				99,113				99,125
Diluted			99,486				100,247				100,296				100,013
Cash dividends paid per common share		$	0.26			$	0.21			$	0.74			$	0.63

AVNET, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
		April 2,			July 3,
		2022			2021
		(Thousands)
ASSETS
Current assets:
Cash and cash equivalents		$	199,457		$	199,691
Receivables			4,164,573			3,576,130
Inventories			3,680,821			3,236,837
Prepaid and other current assets			172,792			150,763
Total current assets			8,217,643			7,163,421
Property, plant and equipment, net			323,420			368,452
Goodwill			805,384			838,105
Intangible assets, net			15,975			28,539
Operating lease assets			245,149			265,988
Other assets			174,102			260,917
Total assets		$	9,781,673		$	8,925,422
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Short-term debt		$	424,182		$	23,078
Accounts payable			2,968,845			2,401,357
Accrued expenses and other			616,079			572,457
Short-term operating lease liabilities			56,682			58,346
Total current liabilities			4,065,788			3,055,238
Long-term debt			922,041			1,191,329
Long-term operating lease liabilities			216,609			239,838
Other liabilities			320,515			354,833
Total liabilities			5,524,953			4,841,238
Shareholders’ equity			4,256,720			4,084,184
Total liabilities and shareholders’ equity		$	9,781,673		$	8,925,422

AVNET, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
		Nine Months Ended
		April 2, 2022				April 3, 2021
		(Thousands)
Cash flows from operating activities:
Net income		$	445,556			$	107,759
Non-cash and other reconciling items:
Depreciation			65,719				67,462
Amortization			12,034				35,730
Amortization of operating lease assets			40,298				42,054
Deferred income taxes			1,423				11,510
Stock-based compensation			28,638				22,293
Impairments			—				15,166
Other, net			47,667				7,558
Changes in (net of effects from businesses acquired and divested):
Receivables			(880,957	)			(405,700	)
Inventories			(549,999	)			63,017
Accounts payable			628,822				224,151
Accrued expenses and other, net			141,381				6,526
Net cash flows (used) provided by operating activities			(19,418	)			197,526
Cash flows from financing activities:
Borrowings under accounts receivable securitization, net			57,400				—
Repayments under senior unsecured credit facility, net			—				(232,347	)
Borrowings (repayments) under bank credit facilities and other debt, net			117,982				(2,192	)
Repurchases of common stock			(88,952	)			—
Dividends paid on common stock			(73,253	)			(62,400	)
Other, net			(16,853	)			(11,455	)
Net cash flows used for financing activities			(3,676	)			(308,394	)
Cash flows from investing activities:
Purchases of property, plant and equipment			(33,679	)			(39,001	)
Acquisitions of assets and businesses			—				(18,371	)
Proceeds from liquidation of Company owned life insurance policies			84,343				—
Other, net			724				6,201
Net cash flows provided (used) for investing activities			51,388				(51,171	)
Effect of currency exchange rate changes on cash and cash equivalents			(28,528	)			7,750
Cash and cash equivalents:
— decrease			(234	)			(154,289	)
— at beginning of period			199,691				477,038
— at end of period		$	199,457			$	322,749

Non-GAAP Financial Information

In addition to disclosing financial results that are determined in accordance with generally accepted accounting principles in the United States (“GAAP”), the Company also discloses certain non-GAAP financial information including (i) adjusted operating income, (ii) adjusted operating expenses, (iii) adjusted other income (expense), (iv) adjusted income before income taxes, (v) adjusted income tax expense (benefit), (vi) adjusted diluted earnings per share, and (vii) sales adjusted for the impact of significant acquisitions and other items (as defined in the Organic Sales section of this document).

There are also references to the impact of foreign currency in the discussion of the Company’s results of operations. When the U.S. Dollar strengthens and the stronger exchange rates of the current year are used to translate the results of operations of Avnet’s subsidiaries denominated in foreign currencies, the resulting impact is a decrease in U.S. Dollars of reported results. Conversely, when the U.S. Dollar weakens and the weaker exchange rates of the current year are used to translate the results of operations of Avnet’s subsidiaries denominated in foreign currencies, the resulting impact is an increase in U.S. Dollars of reported results. In the discussion of the Company’s results of operations, results excluding this impact are referred to as “constant currency.” Management believes organic sales and sales in constant currency are useful measures for evaluating current period performance as compared with prior periods and for understanding underlying trends. In order to determine the translation impact of changes in foreign currency exchange rates on sales, income or expense items for subsidiaries reporting in currencies other than the U.S. Dollar, the Company adjusts the average exchange rates used in current periods to be consistent with the average exchange rates in effect during the comparative period.

Management believes that operating income and operating expenses adjusted for restructuring, integration and other expenses, Russian-Ukraine conflict related expenses, goodwill and intangible asset impairment expenses and amortization of acquired intangible assets and other, are useful measures to help investors better assess and understand the Company’s operating performance. This is especially the case when comparing results with previous periods or forecasting performance for future periods, primarily because management views the excluded items to be outside of Avnet’s normal operating results or non-cash in nature. Management analyzes operating income and operating expenses without the impact of these items as an indicator of ongoing margin performance and underlying trends in the business. Management also uses these non-GAAP measures to establish operational goals and, in most cases, for measuring performance for compensation purposes. Management measures operating income for its reportable segments excluding restructuring, integration and other expenses, Russian-Ukraine conflict related expenses, goodwill and intangible asset impairment expenses and amortization of acquired intangible assets and other.

Additional non-GAAP metrics management uses is adjusted operating income margin, which is defined as adjusted operating income (as defined above) divided by sales.

Management also believes income tax expense (benefit), net income and diluted earnings (loss) per share adjusted for the impact of the items described above and certain items impacting other income (expense) and income tax expense (benefit) are useful to investors because they provide a measure of the Company’s net profitability on a more comparable basis to historical periods and provide a more meaningful basis for forecasting future performance. Adjustments to income tax expense (benefit) and the effective income tax rate include the effect of changes in tax laws, certain changes in valuation allowances and unrecognized tax benefits, income tax audit settlements and adjustments to the adjusted interim effective tax rate based upon the expected annual adjusted effective tax rate. Additionally, because of management’s focus on generating shareholder value, of which net profitability is a primary driver, management believes net income (loss) and diluted earnings (loss) per share excluding the impact of these items provides an important measure of the Company’s net profitability for the investing public.

Any analysis of results and outlook on a non-GAAP basis should be used as a complement to, and in conjunction with, results presented in accordance with GAAP.

			Fiscal				Quarters Ended
			Year to Date				April 2,				January 1,				October 2,
			2022*				2022*				2022*				2021*
			($ in thousands, except per share amounts)
GAAP selling, general and administrative expenses			$	1,499,904			$	512,364			$	501,363				486,178
Amortization of intangible assets and other				(12,109	)			(3,074	)			(3,796	)			(5,239	)
Adjusted operating expenses				1,487,795				509,290				497,567				480,939
GAAP operating income			$	654,323			$	274,408			$	211,672				168,243
Restructuring, integration and other expenses				5,272				-				-				5,272
Russian-Ukraine conflict related expenses				26,261				26,261				-				-
Amortization of intangible assets and other				12,109				3,074				3,796				5,239
Adjusted operating income				697,965				303,743				215,468				178,754
GAAP income before income taxes			$	584,793			$	248,025			$	191,779				144,990
Restructuring, integration and other expenses				5,272				-				-				5,272
Russian-Ukraine conflict related expenses				26,261				26,261				-				-
Amortization of intangible assets and other				12,109				3,074				3,796				5,239
Other expenses				441				-				-				441
Adjusted income before income taxes				628,876				277,360				195,575				155,942
GAAP income tax expense			$	139,237			$	64,608			$	40,958				33,672
Restructuring, integration and other expenses				1,012				-				-				1,012
Russian-Ukraine conflict related expenses				6,836				6,836				-				-
Amortization of intangible assets and other				2,369				667				704				998
Other expenses				136				-				-				136
Income tax (expense) benefit items, net				(8,766	)			(8,613	)			2,917				(3,070	)
Adjusted income tax expense				140,824				63,498				44,579				32,748
GAAP net income			$	445,556			$	183,417			$	150,821				111,318
Restructuring, integration and other expenses (net of tax)				4,260				-				-				4,260
Russian-Ukraine conflict related expenses (net of tax)				19,425				19,425				-				-
Amortization of intangible assets and other (net of tax)				9,740				2,407				3,092				4,241
Other expenses (net of tax)				305				-				-				305
Income tax expense (benefit) items, net				8,766				8,613				(2,917	)			3,070
Adjusted net income				488,052				213,862				150,996				123,194
GAAP diluted earnings per share			$	4.44			$	1.84			$	1.50				1.10
Restructuring, integration and other expenses (net of tax)				0.04				-				-				0.04
Russian-Ukraine conflict related expenses (net of tax)				0.19				0.20				-				-
Amortization of intangible assets and other (net of tax)				0.10				0.02				0.03				0.04
Other expenses (net of tax)				0.00				-				-				0.00
Income tax expense (benefit) items, net				0.09				0.09				(0.03	)			0.03
Adjusted diluted EPS				4.87				2.15				1.51				1.22

_________________

* May not foot/cross foot due to rounding.

					Quarters Ended
	Fiscal Year				July 3,				April 3,				January 2,				October 3,
	2021*				2021				2021				2021				2020
	($ in thousands, except per share amounts)
GAAP selling, general and administrative expenses	$	1,874,831			$	498,497			$	463,092			$	442,084			$	471,158
Amortization of intangible assets and other		(41,245	)			(5,370	)			(5,283	)			(10,417	)			(20,175	)
Adjusted operating expenses		1,833,586				493,127				457,809				431,667				450,983
GAAP operating income	$	281,408			$	118,001			$	87,684			$	57,221			$	18,502
Restructuring, integration and other expenses		84,391				28,449				17,574				11,948				26,420
Amortization of intangible assets and other		41,245				5,370				5,283				10,417				20,175
Adjusted operating income		407,044				151,820				110,541				79,586				65,097
GAAP income (loss) before income taxes	$	172,929			$	91,701			$	70,121			$	34,403			$	(23,297	)
Restructuring, integration and other expenses		84,391				28,449				17,574				11,948				26,420
Amortization of intangible assets and other		41,245				5,370				5,283				10,417				20,175
Other expenses - equity investment impairments and other		20,413				5,139				-				51				15,223
Adjusted income before income taxes		318,978				130,659				92,978				56,819				38,521
GAAP income tax expense (benefit)	$	(20,185	)		$	6,346			$	(37,363	)		$	15,240			$	(4,408	)
Restructuring, integration and other expenses		17,468				6,172				4,118				2,577				4,601
Amortization of intangible assets and other		9,099				1,025				1,008				2,037				5,029
Other expenses - equity investment impairments and other		90				38				-				26				26
Income tax benefit (expense) items, net		41,275				4,091				50,682				(10,788	)			(2,710	)
Adjusted income tax expense		47,747				17,672				18,445				9,092				2,538
GAAP net income (loss)	$	193,114			$	85,355			$	107,484			$	19,163			$	(18,889	)
Restructuring, integration and other expenses (net of tax)		66,923				22,277				13,456				9,371				21,819
Amortization of intangible assets and other (net of tax)		32,146				4,345				4,275				8,380				15,146
Other expenses - equity investment impairments and other (net of tax)		20,323				5,101				-				25				15,197
Income tax (benefit) expense items, net		(41,275	)			(4,091	)			(50,682	)			10,788				2,710
Adjusted net income		271,231				112,987				74,533				47,727				35,983
GAAP diluted earnings (loss) per share	$	1.93			$	0.85			$	1.07			$	0.19			$	(0.19	)
Restructuring, integration and other expenses (net of tax)		0.67				0.22				0.13				0.09				0.22
Amortization of intangible assets and other (net of tax)		0.32				0.04				0.04				0.09				0.15
Other expenses - equity investment impairments and other (net of tax)		0.20				0.05				-				0.00				0.15
Income tax (benefit) expense items, net		(0.41	)			(0.04	)			(0.50	)			0.11				0.03
Adjusted diluted EPS		2.71				1.12				0.74				0.48				0.36

_________________

* May not foot/cross foot due to rounding and differences in average diluted shares between quarterly periods compared to the fiscal year to date.

Organic Sales

Organic sales is defined as sales adjusted for the impact of significant acquisitions, divestitures and other items by adjusting Avnet’s prior and current periods (if necessary) to include the sales of acquired businesses and exclude the sales of divested businesses as if the acquisitions and divestitures had occurred at the beginning of the earliest period presented. Additionally, fiscal 2021 sales are adjusted for the estimated impact of the extra week of sales in the first quarter of fiscal 2021 due to the 14-week fiscal first quarter and the 53-week fiscal year. Organic sales in constant currency is defined as organic sales (as defined above) excluding the impact of changes in foreign currency exchange rates.

As a result of declining sales due to the termination of the TI distribution agreement in December 2020, organic sales growth rates have also been adjusted to exclude sales of TI products.

Reported sales were the same as organic sales for the third quarter and first nine months of fiscal 2022. The following table presents the reconciliation of reported sales to organic sales for the third quarter and first nine months of fiscal 2021.

		Quarter Ended										Nine Months Ended
		Sales							Organic						Estimated									Organic
		As Reported							Sales			Sales			Extra			Organic						Sales
		and Organic			TI Sales				Adj for TI			As Reported			Week in			Sales			TI Sales			Adj for TI
		Q3-Fiscal			Q3-Fiscal				Q3-Fiscal			Q3-Fiscal			Fiscal			Q3-Fiscal			Q3-Fiscal			Q3-Fiscal
		2021			2021(1)				2021(1)			2021			2021(2)			2021			2021(1)			2021(1)
		(in millions)
Avnet		$	4,916.7		$	1.7			$	4,915.0		$	14,307.9		$	306.0		$	14,001.9		$	292.2		$	13,709.7
Avnet by region
Americas		$	1,161.0		$	0.4			$	1,160.6		$	3,468.1		$	77.0		$	3,391.1		$	82.9		$	3,308.2
EMEA			1,585.6			0.5				1,585.1			4,412.6			97.0			4,315.6			124.2			4,191.4
Asia			2,170.1			0.8				2,169.3			6,427.2			132.0			6,295.2			85.1			6,210.1
Avnet by segment
EC		$	4,520.6		$	1.7			$	4,518.9		$	13,245.1		$	284.0		$	12,961.1		$	292.2		$	12,668.9
Farnell			396.1			—				396.1			1,062.8			22.0			1,040.8			—			1,040.8

_________________

(1)	Sales adjusted for the impact of the termination of the TI distribution contract.
(2)	The impact of the additional week of sales in the first quarter of fiscal 2021 is estimated.

The following table presents reported and organic sales growth rates for the third quarter and first nine months of fiscal 2022 compared to fiscal 2021.

		Quarter Ended									Nine Months Ended
								Organic															Organic
					Sales			Sales						Sales						Organic			Sales
					As Reported			Adj for TI						As Reported						Sales			Adj for TI
		Sales			Year-Year %			Year-Year %			Sales			Year-Year %			Organic			Year-Year %			Year-Year %
		As Reported			Change in			Change in			As Reported			Change in			Sales			Change in			Change in
		Year-Year			Constant			Constant			Year-Year			Constant			Year-Year			Constant			Constant
		% Change			Currency			Currency(1)			% Change			Currency			% Change			Currency			Currency(1)
Avnet		32.0	%		35.7	%		35.7	%		25.4	%		26.9	%		28.1	%		29.6	%		32.4	%
Avnet by region
Americas		40.2	%		40.2	%		40.2	%		23.3	%		23.3	%		26.1	%		26.1	%		29.3	%
EMEA		37.9			47.6			47.7			30.9			35.0			33.8			38.0			42.1
Asia		23.3			24.5			24.5			22.7			23.3			25.3			25.9			27.6
Avnet by segment
EC		33.2	%		36.9	%		36.9	%		25.1	%		26.7	%		27.9	%		29.5	%		32.5	%
Farnell		18.4			21.8			21.8			28.4			28.6			31.2			31.3			31.3

________________

(1)	Sales growth rates excluding the impact of the termination of the TI distribution agreement.

Historical Segment Financial Information
						Fiscal 2022
						Quarters Ended
		Fiscal				Third Quarter				Second Quarter				First Quarter
		Year to Date				April 2,				January 1,				October 2,
		2022*				2022*				2022				2021
		(in millions)
Sales:
Electronic Components		$	16,572.9			$	6,019.1			$	5,424.3			$	5,129.5
Farnell			1,365.1				469.0				440.9				455.2
Avnet sales		$	17,938.1			$	6,488.1			$	5,865.2			$	5,584.7
Operating income:
Electronic Components		$	616.4			$	265.0			$	188.9			$	162.4
Farnell			179.6				69.8				60.2				49.6
			796.0				334.8				249.1				212.0
Corporate expenses			(98.0	)			(31.1	)			(33.6	)			(33.3	)
Restructuring, integration and other expenses			(5.3	)			-				-				(5.3	)
Russian-Ukraine conflict related expenses			(26.3	)			(26.3	)			-				-
Amortization of acquired intangible assets and other			(12.1	)			(3.1	)			(3.8	)			(5.2	)
Avnet operating income		$	654.3			$	274.4			$	211.7			$	168.2
Sales by geographic area:
Americas		$	4,277.6			$	1,627.2			$	1,391.5			$	1,258.8
EMEA			5,774.1				2,185.7				1,840.8				1,747.6
Asia			7,886.4				2,675.2				2,632.9				2,578.3
Avnet sales		$	17,938.1			$	6,488.1			$	5,865.2			$	5,584.7

____________

* May not foot/cross foot due to rounding.

					Fiscal Year 2021
					Quarters Ended
						Fourth Quarter				Third Quarter				Second Quarter				First Quarter
		Fiscal Year				July 3,				April 3,				January 2,				October 3,
		2021*				2021				2021				2021				2020
		(in millions)
Sales:
Electronic Components		$	18,030.5			$	4,785.3			$	4,520.6			$	4,342.4			$	4,382.2
Farnell			1,504.2				441.4				396.1				325.8				340.9
Avnet		$	19,534.7			$	5,226.7			$	4,916.7			$	4,668.2			$	4,723.1
Operating income:
Electronic Components		$	454.8			$	147.8			$	118.6			$	103.9			$	84.4
Farnell			86.9				36.5				23.9				14.6				12.0
			541.7				184.3				142.5				118.5				96.4
Corporate expenses			(134.7	)			(32.5	)			(31.9	)			(39.0	)			(31.3	)
Restructuring, integration and other expenses			(84.4	)			(28.4	)			(17.6	)			(11.9	)			(26.4	)
Amortization of acquired intangible assets and other			(41.2	)			(5.4	)			(5.3	)			(10.4	)			(20.2	)
Avnet operating income		$	281.4			$	118.0			$	87.7			$	57.2			$	18.5
Sales by geographic area:
Americas		$	4,662.5			$	1,194.4			$	1,161.0			$	1,101.5			$	1,205.7
EMEA			6,149.9				1,737.3				1,585.6				1,346.3				1,480.7
Asia			8,722.3				2,295.0				2,170.1				2,220.4				2,036.7
Avnet		$	19,534.7			$	5,226.7			$	4,916.7			$	4,668.2			$	4,723.1

_____________

* May not foot/cross foot due to rounding.

Guidance Reconciliation

The following table presents the reconciliation of non-GAAP adjusted diluted earnings per share guidance to the expected GAAP diluted earnings per share guidance for the fourth quarter of fiscal 2022.

		Low End of				High End of
		Guidance Range				Guidance Range
Adjusted diluted earnings per share guidance		$	1.90			$	2.00
Amortization of intangibles and other (net of tax)			(0.02	)			(0.03	)
Income tax expense adjustments			0.45				0.35
GAAP diluted earnings per share guidance		$	2.33			$	2.32

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220427005728/en/

Investor Relations Contacts

Joe Burke, 480-643-7431

Joseph.Burke@avnet.com

Media Relations Contact

Jeanne Forbis, 480-643-7499

Jeanne.Forbis@Avnet.com

Source: Avnet

FAQ

What are Avnet's third quarter 2022 earnings results?

Avnet reported $6.5 billion in sales, a 32% increase year-over-year, with diluted EPS of $1.84 and adjusted EPS of $2.15.

What is Avnet's guidance for the fourth quarter of fiscal 2022?

Avnet expects sales between $6.0 billion and $6.4 billion and adjusted diluted EPS of $1.90 to $2.00.

How did Avnet's operating margins change in Q3 2022?

Operating margins for Electronic Components increased to 4.4%, while Farnell achieved 14.9%, both showing significant improvement.

How much did Avnet return to shareholders in dividends?

Avnet returned $25.6 million in dividends, marking a 23.8% year-over-year increase.

What geographic regions contributed to Avnet's sales growth?

Sales growth was notable in the Americas with a 40.2% increase, and also strong performance in EMEA and Asia.