Avnet, Inc. (Nasdaq: AVT) announced results for its third quarter of fiscal 2023, ending 1 April, 2023, reporting $6.5B in sales, exceeding the guidance given.

Avnet reported an operating income of $313 million, a 4.9% increase over the previous quarter and a 14.3% year over year upturn.

Newark’s contribution of $455 million in sales is an 11.5% increase from the previous quarter, while operating margin held steady sequentially at 9%. Newark’s approach to fluctuating market conditions, including working in conjunction with partner organizations to overcome global supply constraints, proved integral to this robust financial performance.

Chris Breslin, President Farnell Global and Newark, said: “There are many factors that can impact the manufacture and distribution of electronic components and we have done well to predict and prepare for these.

“Despite the impact of key product line shortages and foreign currency exchange headwinds, we have demonstrated resilience in the face of industrywide challenges. Our overall performance has proven that our approach has been the correct one for Newark and our valued customers.

“We will continue to strategically invest to expand our electronic components portfolio, which will in turn enable our customers to seize every opportunity offered by the exponential growth of an increasingly evolving market.”

Read Avnet’s Third Quarter Fiscal 2023 Financial Results in full, and find out more about how Newark supports its customers here.

Avnet, Inc. (Nasdaq: AVT) announced results for its fourth quarter ending 2 July 2022, reporting a robust quarter of year-over-year sales and operating margin growth. The results were strengthened by a record-setting fiscal year revenue from Farnell totalling $1.8 billion.

Farnell’s strong performance, with full year revenue increasing 20.2% year-over-year, was the result of notable increases in demand from the electronics, energy, security and transportation sectors.

Farnell reported fourth quarter revenues of $442 million and an operating income margin of 14.2%, which was an increase of 597 basis points year-over-year.

Farnell’s ongoing investment in stock had a positive impact with more than 18,000 new products added in the fourth quarter alone. Farnell’s expansive inventory remains a key factor in its success and is a key priority for the Avnet group. Farnell was central to Avnet’s solid operating margin of 4.5% in the quarter.

Rob Rospedzihowski, President Sales, EMEA, Farnell said: “We are pleased with this strong performance, particularly given that it was achieved amidst ongoing market uncertainties, supply chain challenges and increased lead times associated with high customer demand. We expect to build upon this momentum as we continue to make investments in our inventory, digital marketing and our e-commerce platform.”

Farnell’s commitment to enhancing customer experience on its e-commerce platform continues to yield substantive results. Nearly 56% of Farnell’s total sales and 72% of total orders transacted were placed through the company’s e-commerce platform this quarter.

Read Avnet’s Fourth Quarter Fiscal 2023 Financial Results in full and explore how Farnell’s support enables its customers success here.

The president of Farnell, Chris Breslin, joins a Farnell customer and supplier partner for a discussion on how to serve the unique needs of the high service distribution market. This knowledgeable group discusses the tenets of good communication, the value of delivering easy-to-consume content and the many ways that digital is changing the market. Guests on this episode include Annette Tyler, Corporate Director of Distribution at Amphenol; Tracey Dawson, Managing Director at Daletech; and Chris Breslin, President at Farnell.

Hosting business leaders and suppliers, Avnet’s inaugural season of Distributing Wisdom podcast analyses technological change, trends, and innovation. The first season of Distributing Wisdom is available online at www.avnet.com/distributing-wisdom-podcast, or wherever podcasts are found.

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

Farnell, the Development Distributor, has strengthened its product organisation with appointments into two key roles on its Leadership Team. Lee Turner has been appointed as Global Head of Semiconductors & Single Board Computers and Simon Meadmore appointed as Global Head of IP&E (Inter-connect, Passives and Electro-mechanical). Both Lee and Simon will report to Chris Breslin, President of Farnell’s global businesses. Farnell operates as Newark in North America and element14 in APAC.

Lee joined Farnell in 2016 as Global Head of Operations – Sales, Marketing & Technical. As Global Head of Semiconductors & SBC, Lee is responsible for ensuring that customers and manufacturers continue to view Farnell as their global distributor of choice and the provider of cutting edge Semiconductor and SBC technologies. Lee has 25 years’ experience in the electronics industry and has held prior leadership roles in supplier development, product marketing and sales.

Simon has been with Farnell for 15 years and moves to the role of Global Head of IP&E having previously led  Farnell’s Semiconductor & SBC product segment. In his new role, Simon is responsible for leading the global product and supplier strategy for this important category. Simon has extensive experience in supplier facing roles at Farnell and previously at Pace Micro Technology. He is a member of the Chartered Institute of Purchasing and Supply (CIPS).

Chris was promoted to the president of Farnell's global businesses in June 2018. He has global responsibility for the direction, operations and growth of the $1B+ Avnet business unit, including identifying and leveraging synergies between Farnell and Avnet. He brings the experience, knowledge of the business and leadership style that will help Farnell continue to grow. Chris reports to Pete Bartolotta, chief transformation officer.

Chris joined Farnell in July of 2014 as chief product officer, and during his tenure, globalizedFarnell’s asset and product organization and greatly improved the company’s customer proposition by adding several dozen new suppliers. Most recently he served as senior vice president for global product at Farnell.

Prior to Farnell, Chris spent five years as the chief operating officer for Crescent Electric Supply Company, one of the largest electrical wholesalers in North America. He was responsible for the company’s $1B P&L, and grew their operating profit significantly over three years. Chris also spent 14 years at Arrow Electronics in various management positions.

Chris graduated from Fordham University Bronx, NY, with dual concentration and a Bachelor of Science in finance and marketing. He earned a Master of Business Administration in international business from Manhattan College, plus completed the Advanced Management Program at the Wharton School of the University of Pennsylvania.

Location: USA

Languages: English

Areas of expertise: Role of High service distributors and the value they add for customers; Farnell’s Product Strategy and geographic reach; IoT, Raspberry Pi, and the booming “Maker” market

To arrange a media interview please contact our PR agency.

Farnell, the Development Distributor, has received the Gold Award for Best Global Performance FY 2019 from TDK. The award recognises excellence in key areas such as business performance, inventory management and operations, delivered globally through Farnell’s regional business: Farnell in EMEA, Newark in North America and element14 in Asia Pacific.

Farnell has held a global franchise with TDK for over 15 years and has built a strong relationship during this period, focused on delivering value for Premier Farnell customers and TDK.

Chris Breslin, President of Farnell, global said: “This award is testament to the strong relationship we have built with TDK as one of our key supplier partners. It is important to us to support our supplier partners, and help them deliver against their strategy, whilst providing our customers with access to market leading components to support their design and production journeys. I am delighted that our continued focus on delivering a multichannel route to market and close working relationship with TDK has been recognized with this award.”

Dietmar Jaeger, General Manager of Global Sales Distribution at TDK added: “I am happy to be able to present the award to Farnell's global businessses this year, seeing the positive impact of the Avnet-Farnell relationship. Farnell has been our strong partner in Europe for so many years, and now this is paying off globally.”

The award was presented to Farnell at EDS in Las Vegas during May.

TDK products are available from Newark.

Third Quarter Key Financial Highlights

• Delivered sales of $4.70 billion, in line with guidance
  • In constant currency, sales rose 1.2% compared to the year ago period
• GAAP diluted EPS from continuing operations totaled $0.87
  • 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
  • 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.”

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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 14^th 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

Outlook for the Fourth Quarter of Fiscal 2019 Ending on June 29, 2019

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Avnet’s fourth quarter fiscal 2019 guidance reflects sales similar to the third quarter with a change in mix that includes a slight sequential uptick in Asia sales offset by macro headwinds in the Western regions. This change in sales mix is expected to result in a sequential decline to gross profit with a corresponding reduction in EPS. At the midpoint of guidance, this would represent a 6.6% decline in sales YoY and 5.1% adjusted diluted EPS growth YoY.

The above guidance is also based upon market conditions existing at the end of the third quarter of fiscal 2019 and excludes any acquisitions, results of discontinued operations, amortization of intangibles, accelerated depreciation, any potential restructuring, integration, and other expenses and certain income tax adjustments including certain impacts of the recent tax law changes in the U.S. The above guidance assumes 107 million average diluted shares outstanding and average U.S. Dollar to Euro and GBP currency exchange rates are as shown below:

Forward-Looking Statements

This document contains certain “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. These statements are based on management’s current expectations and are subject to uncertainty and changes in facts and circumstances. The forward-looking statements herein include statements addressing future financial and operating results of Avnet and may include words such as “will,” “anticipate,” “intend,” “estimate,” “forecast,” “expect,” “feel,” “believe,” “should,” and other words and terms of similar meaning in connection with any discussions of future operating or financial performance, business prospects or market conditions. Actual results may differ materially from the expectations contained in the forward-looking statements.

The following factors, among others, could cause actual results to differ materially from those described in the forward-looking statements: Avnet’s ability to retain and grow market share and to generate additional cash flow, risks associated with any acquisition activities and the successful integration of acquired companies, implementing and maintaining IT systems, supplier losses and changes to supplier programs, an industry down-cycle in semiconductors, declines in sales, changes in business conditions and the economy in general, changes in market demand and pricing pressures, any material changes in the allocation of product or price discounts by suppliers, and other competitive and/or regulatory factors affecting the businesses of Avnet generally.

More detailed information about these and other factors is set forth in Avnet’s filings with the Securities and Exchange Commission, including Avnet’s reports on Form 10-K, Form 10-Q and Form 8-K. Except as required by law, Avnet is under no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

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 tax expense, (v) adjusted income from continuing operations, (vi) adjusted diluted earnings per share, and (vii) sales adjusted for the impact of 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, goodwill impairment expense 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 well as other income (expense) excluding certain amounts 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 many cases, for measuring performance for compensation purposes. Management measures operating income for our reportable segments excluding restructuring, integration and other expenses, goodwill impairment expense 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, income from continuing operations and diluted earnings per share from continuing operations adjusted for the impact of the items described above and certain items impacting other expense and income tax expense 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 and the effective income tax rate include the effect of changes in tax laws including recent tax law changes in the U.S., 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 income from continuing operations and diluted earnings per share from continuing operations 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. All amounts below relate to Avnet’s continuing operations.

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