Avnet, Inc. (Nasdaq: AVT) today announced results for its second quarter ended January 2, 2021.
Fiscal Second Quarter Key Financial Highlights:
- Sales of $4.7 billion up from $4.5 billion in the prior year quarter, supported by record sales in Asia of $2.2 billion, up 16% year over year.
- On constant currency basis, organic sales increased 4.8% after adjusting for 14 weeks of activity in the prior quarter.
- GAAP diluted earnings per share of $0.19, compared with a GAAP diluted loss per share of $0.19 in the prior quarter, a 200% increase.
- Non-GAAP adjusted diluted earnings per share of $0.48, compared with $0.36 in the prior quarter, a 33% increase.
- Farnell operating margins increased sequentially 97 basis points to 4.5%.
- GAAP operating income margin of 1.2%, compared with 0.4% the prior quarter, and an adjusted operating income margin of 1.7%, compared with 1.4% in the prior quarter.
- Achieved net working capital of 75 days, generating $85 million of cash flow from operations.
- Sales of Texas Instruments (TI) products were $50 million compared with $399 million in the prior year.
- When excluding TI, organic sales grew 9.3% year over year on a constant currency basis.
“Improvements in our Farnell, EMEA and Americas businesses, complemented by a record revenue quarter in Asia, reflect our continued progress in driving operational efficiencies and enhancing key business lines through strategic investments. We’ve seen tangible results from this back to the basics strategy over the past two quarters with increased sales, improving returns on capital and a stronger balance sheet. As a result, we are better positioned today to manage our backlog and working capital to navigate uncertainties resulting from COVID-19,” said Avnet Chief Executive Officer Phil Gallagher. “I am incredibly proud of our team’s resilience amidst the challenges this past year. They’ve delivered significant value in providing uninterrupted service at a global scale and in working collaboratively with our customers and suppliers to manage forecasts, navigate current market dynamics and mitigate supply chain risk.”
“During the second quarter, we delivered sales of $4.7 billion and adjusted diluted earnings per share of $0.48, driven by strong execution and a streamlined cost structure that has allowed us to achieve increased revenue without adding significant operating expense. Our year over year top line growth and careful working capital management enabled us to achieve our goal of 75 net working capital days,” said Avnet CFO Tom Liguori. “Our $75 million operating expense reduction plan was fully implemented in the quarter, driving our ninth consecutive quarter of positive operating cash flows. We remain on track to achieve our $245 million operating expense reduction plan by the end of fiscal year 2022. We are delivering improved financial and competitive performance, building Avnet’s core distribution business while still strategically investing in Farnell, where we see tremendous opportunity to deliver profitable growth.”
Additional Second Quarter Fiscal 2021 Updates
- Returned $21 million to shareholders with dividends paid during the quarter.
- Achieved highest quarterly transportation revenue in 6 quarters in the Americas and Asia.
- Farnell selected as the authorized global distributor for National Instruments (NI).
- Avnet rejoined the Electronic Components Industry Association (ECIA) as a distributor member.
- Named Infineon’s Best Performance GC Distribution Partner, Greater China PSS and Industrial Power Control Greater China.
- Named Micron’s Top EBU Demand Creation and Leading Automotive Tier One.
The full release can be found here.