Avnet, Inc. (Nasdaq: AVT) today announced results for its second fiscal quarter ended December 28, 2019.
Second Quarter Key Financial Highlights:
- Sales of $4.5 billion were in line with guidance.
- GAAP diluted EPS from continuing operations totaled $0.05, compared with $0.33 a year ago.
- Non-GAAP adjusted diluted EPS totaled $0.40 compared with $1.04 a year ago.
- Foreign exchange rates negatively impacted adjusted diluted EPS by $0.02.
- GAAP operating income totaled $46.5 million, compared with $96.1 million a year ago.
- Adjusted operating income declined 54% year over year to $82.2 million.
- GAAP operating income margin was 1.0%, compared with 1.9% a year ago.
- Adjusted operating income margin was 1.8%, compared with 3.5% a year ago.
- Achieved operating expense reduction goal of $50 million annually.
- Cash flow from operations totaled $149 million, and totaled $948 million over the trailing four quarter period.
- Returned $109 million to shareholders with $88 million in share repurchases and $21 million in dividends paid during the quarter.
- Reduced revolving debt by $144 million with net debt of $1.20 billion at the end of the quarter.
“While our second quarter results reflected the ongoing correction the industry has experienced, we saw good signs of stabilization across key geographies,” said Avnet CEO Bill Amelio. “Meanwhile, our transformation initiatives are helping drive significant cost savings and our new way of doing business will keep us nimble and better equipped to serve our customers over the long term. This includes growing our electronics components customer and supplier base while continuing to expand our ecosystem and broaden our reach into new areas.”
“Progress on key goals to manage costs and generate cash continued during the quarter as we generated $149 million of cash flow from operations and completed our $50 million annual cost reduction initiative,” stated Tom Liguori, Avnet Chief Financial Officer. “Our cash flow from operations for the last four quarters now totals $948 million. Our capital allocation this quarter continued to reflect our strategy of using cash to grow the business through acquisition, returning cash to shareholders and managing our debt during the slowdown.”
Additional Second Quarter Fiscal 2020 Highlights and Key Developments
- Completed the construction of Farnell’s new state-of-the-art distribution center in Europe. This will enable significant SKU expansion as well as cost savings. Products will begin to ship from the center in early 2020.
- Announced a new IoT Partner Program at the Consumer Electronics Show (CES) this month. The new program enables partners to leverage Avnet’s IoT Connect Platform and its ecosystem of experts to build and scale IoT solutions businesses. The program also enables developers to write to, and sell, solutions in the marketplace.
- Launched MaaXBoard, a low-cost, production-ready qualified single board computer that is ideal for embedded computing and applications that leverage AI at the edge with reduced cost and time to market. MaaXBoard is based on the NXP i.MX 8M applications processor.
- Launched Avnet Guardian 100, a new wireless edge module powered by Microsoft Azure Sphere that quickly and securely adds connectivity to existing equipment so that enterprise customers can confidently leverage the benefits of IoT to innovate and deliver a better customer experience.
- Completed the acquisition of Witekio, which strengthens Avnet’s software and IoT capabilities at the device level.
- Acquired Phoenics, a well-respected regional distributor that will complement Avnet as it adds additional customers and suppliers.
- Continued to improve the customer experience by expanding E-payment options in Europe (PayPal) and China (WeChat Pay, Alipay and Union Pay).
For the full release and tables, see here.