Avnet Reports Third Quarter Fiscal 2019 Financial Results

PHOENIX – April 2019 – Avnet, Inc. (Nasdaq: AVT
[5]) today announced results for the third fiscal quarter ended March
30, 2019.

THIRD QUARTER KEY FINANCIAL HIGHLIGHTS

* Delivered sales of $4.70 billion, in line with guidance

o    In constant currency, sales rose 1.2% compared to the year ago
period

* GAAP diluted EPS from continuing operations totaled $0.87

o    Adjusted diluted EPS was $1.09, up 4.8% sequentially and 6.9% from
a year ago

* GAAP operating income margin of 3.3%, was up 136 basis points
sequentially

o    Adjusted operating income margin was 3.8%, up from 3.6% a year ago

* Cash flow from operations totaled $269 million
* Premier Farnell (Farnell) adjusted operating margin rose to 12.4%
from 10.8% in the prior year
* IoT pipeline now exceeds $600 million, and has expanded to new
markets including industrial equipment and manufacturing
* Returned $139 million to shareholders with $117 million of share
repurchases and dividends totaling $22 million

CEO COMMENTARY

“I am pleased with the strong execution we demonstrated this quarter,”
said Avnet CEO Bill Amelio. “We saw continued strength in our Americas
and EMEA regions and solid performance in the higher margin interconnect
and passives segment. Overall, we improved operating income and earnings
per share and expanded our operating margins compared to a year ago.
These results demonstrate the progress of our transformation and the
value our unique ecosystem is delivering to our customers. With
continued increases in our solutions pipeline and strong execution
momentum, we are well positioned to achieve our long-term growth targets
and deliver sustained shareholder returns.”

CFO COMMENTARY

“We executed well this quarter reducing costs, expanding operating
margin and growing EPS, all while facing macro-economic headwinds in
Asia as well as the Brexit uncertainties which impacted Farnell growth,”
stated Tom Liguori, Avnet Chief Financial Officer. “Farnell still
delivered a strong improvement in operating margin, which rose to 12.4%
from 10.8% a year ago, supporting the transformational potential of this
business longer term. We generated significant operating cash flow this
quarter and returned $139 million to shareholders through stock buybacks
and dividend.”

ADDITIONAL THIRD QUARTER FISCAL 2019 HIGHLIGHTS AND KEY DEVELOPMENTS

* Aligned with BitPay, the largest global blockchain payment provider,
to accept cryptocurrency for products and services further breaking down
the barriers facing customers who are striving to bring their ideas to
market.
* Announced Avnet Direct Connect, a new service that delivers powerful
financial efficiencies where Avnet handles all the hardware integration,
configuration, QA testing and system delivery allowing customers to
focus on their software-based innovation.
* Teamed up with Octonion and Orange to launch a customized, modular
‘plug and play’ Avnet SmartEdge Agile IoT device using Octonion’s
Brainium meta-sensing (AI) software designed for the LTE-M network.
* Released a new development board based upon Xilinx technology, which
offers engineers and makers a price-competitive development platform for
rapidly prototyping breakthrough ideas in AI, IoT and robotics for smart
home, automotive and industrial control applications.
* Completed the sale of real estate in Europe, which generated $41
million of cash flow and a gain on sale of $15 million.

AWARDS AND NOTABLE RECOGNITION RECEIVED DURING THE QUARTER

* Named among the “World’s Most Admired Companies” for 2019, marking
the 14th time that the company has been recognized by FORTUNE for its
strongly positive reputation
* Named one of the World’s Most Ethical Companies in 2019 by the
Ethisphere ® Institute, a global leader in defining and advancing the
standards of ethical business practices
* Won Preferred Partner Award from Kitron (EBV Elektronik, which
operates in Europe, Israel and South Africa)
* Awarded Global Supplier of the Year and Supplier of the Year in EMEA
(Avnet Silica) by ON Semiconductor
* Garnered the UK and Ireland Distributor of the Year award (Avnet
Silica) from STMicroelectronics
* Won the 2018 TDK Senten Manten award (Farnell Europe); which
translates as “Perfect Result”
* Received 2018 Business Award (Avnet Taiwan) from Askey Computer
Corporation
* Won Fulfillment Excellence 2018 Supplier Award (Avnet China) from ABB