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Avnet reports first-quarter fiscal year 2010 results
Avnet EM reported $2.44 billion in sales in the first quarter of fiscal year 2010, reflecting better than normal seasonality and beating revenue expectations for the operating group.
-- EDN, 10/30/2009 9:05:00 AM
Avnet Inc has reported revenue of $4.36 billion for the first quarter fiscal 2010 ended October 3, 2009, representing a decrease of 3.1% over the first quarter fiscal 2009 and a 0.6% decrease excluding the impact of changes in foreign currency exchange rates. On a pro forma (organic) basis, revenue declined 6.5% over the prior year first quarter. Net income for the first quarter fiscal 2010 was $50.9 million, or $0.33 per share on a diluted basis, as compared with net income of $90.3 million, or $0.59 per share on a diluted basis, for the first quarter last year. Included in the current and prior year quarters are restructuring, integration and other items amounting to $16.3 million after-tax, or $0.11 per share on a diluted basis, and $11.4 million after-tax, or $0.08 per share on a diluted basis, respectively.
Excluding these items in both periods, net income for the current year first quarter was $67.2 million, or $0.44 per share on a diluted basis, as compared with $101.7 million, or $0.67 per share on a diluted basis, in the prior year period. Due to the Company's 52/53-week fiscal calendar, the results for the first quarter of fiscal year 2010 included a fourteenth week as compared with the typical thirteen weeks.
Operating income for the first quarter fiscal 2010 was $89.0 million as compared with operating income of $154.6 million in the year-ago quarter. Restructuring, integration and other items amounted to $18.1 million and $9.9 million in the current and prior year quarters, respectively. Excluding these charges, operating income for the first quarter fiscal 2010 was $107.1 million as compared with $164.5 million in last year's first quarter. Operating income as a percentage of sales, excluding the items noted above, was 2.46% in the current year first quarter as compared with 2.26% in the prior year fourth quarter and 3.66% in the prior year first quarter.
Roy Vallee, Chairman and Chief Executive Officer, commented, "While the impact of the global economic slowdown remained evident in our year-over-year revenue decline, our better than expected sequential growth rates provides additional confidence that the business environment is improving. Both operating groups delivered revenue growth at a rate that was above normal seasonality, even excluding the estimated $400 million beneficial impact of the extra week in this fiscal period. This increased volume, combined with higher productivity and record asset velocity, drove a 399 basis point sequential improvement in return on working capital, demonstrating the operating leverage we have built into our model."
Highlights for Avnet's Electronics Marketing (EM) business are as follows:
• Avnet EM reported $2.44 billion in sales in the first quarter of fiscal year 2010, reflecting better than normal seasonality and beating revenue expectations for the operating group.
• Avnet EM’s consistent focus on profitable growth meant the group was able to show improved return on working capital (ROWC) sequentially.
• Avnet EM’s guidance for the second quarter of fiscal year 2010 suggests margin expansion. Avnet EM had a strong book-to-bill ratio for the quarter, and is pleased by the pace of bookings thus far in October.
• Avnet EM sales in the Americas and EMEA region decreased 20.5% and 10.6% respectively, year over year on a reported basis; Avnet EM sales in Asia increased 3.0% year over year on a reported basis.
• Avnet EM operating income was $81.4 million in the first quarter fiscal year 2010 from $138.7 million in the same quarter fiscal year 2009.
