Avnet Scores Record-Breaker

Electronic News, Oct 30, 2000 by Heidi Elliott

Sales up 79 percent from a year ago for its fiscal Q1 2001

You've heard it before from other publicly held distributors, you're hearing it again from Avnet Inc. -- the September quarter was another record-breaker in sales and net income.

"We continue to perform -- even overperform," said Roy Vallee, chief executive officer of Avnet, to analysts during the company's conference call to discuss earnings. He noted that Avnet has issued preannouncements of better-than-expected results for the last three quarters, and the company has outperformed analysts' expectations for the quarter for the past four consecutive quarters.

For the three months ending in September, Avnet had record sales of almost $3 billion, up 79 percent from $1.7 billion in sales a year ago. Including special charges, the prior year's net income and diluted earnings per share were $22.1 million and 31 cents, respectively. Net income for the quarter, which is the first quarter of Avnet's fiscal year, was a record $75.6 million, or 81 cents per diluted share -- more than double the net income (excluding special charges) of $26.1 million, or 37 cents per diluted share. First-quarter fiscal net income was 189 percent higher than a year ago. Diluted earnings per share rose 119 percent over the year-ago quarter.

These results do not include Avnet's portion of the VEBA Electronics LLC sale, which is expected to close this week.

Avnet is the latest distributor to announce record results. Other public distributors -- including Arrow Electronics, All American Semiconductor, Jaco Electronics, Kent Electronics and Nu Horizons Electronics -- have experienced stellar financials for their summer quarters, normally the most sluggish quarter because of the summer slowdown, particularly in Europe.

In releasing the results, Vallee added, "These outstanding results were achieved even though our first fiscal quarter is usually impacted by the typical industry summer slowdown thus providing further evidence that the electronic components industry environment continues to be very healthy. Our results also reflect benefits from our recent successful acquisition activity."

Geographically, North American sales soared; European sales slipped a bit and the rest of the world sales went up a bit. Each of the company's three groups (Electronics Marketing, Computer Marketing and Applied Computing) performed well during the quarter.