AVNET INC Files 10-Q for Period Ending March 30, 2024

TL;DR

<b>AVNET INC filed its Q3 2024 10-Q report, detailing financial performance for the quarter ending March 30, 2024.</b>

AI Summary

AVNET INC (AVT) filed a Quarterly Report (10-Q) with the SEC on May 3, 2024. AVNET INC filed its quarterly report (10-Q) for the period ending March 30, 2024. The filing covers the third quarter of fiscal year 2024. The company's fiscal year ends on June 29. AVNET INC is incorporated in New York. The company's primary business is wholesale of electronic parts and equipment.

Why It Matters

For investors and stakeholders tracking AVNET INC, this filing contains several important signals. This filing provides investors with the latest financial data and operational updates for AVNET INC, crucial for assessing the company's performance and future outlook. Understanding the details within this 10-Q allows stakeholders to evaluate AVNET INC's financial health, profitability, and any potential risks or opportunities.

Risk Assessment

Risk Level: low — AVNET INC shows low risk based on this filing. The filing is a standard quarterly report (10-Q) and does not contain any immediate red flags or significant negative developments.

Analyst Insight

Review the detailed financial statements and management discussion within the 10-Q to understand AVNET INC's performance trends and strategic initiatives.

Key Numbers

• 2024-03-30 — Period End Date (CONFORMED PERIOD OF REPORT)
• 2024-05-03 — Filing Date (FILED AS OF DATE)
• 0629 — Fiscal Year End (FISCAL YEAR END)
• 5065 — SIC Code (STANDARD INDUSTRIAL CLASSIFICATION)

Key Players & Entities

• AVNET INC (company) — CONFORMED NAME
• 2024-03-30 (date) — CONFORMED PERIOD OF REPORT
• 2024-05-03 (date) — FILED AS OF DATE
• 0000008858 (company) — CENTRAL INDEX KEY
• 5065 (industry_code) — STANDARD INDUSTRIAL CLASSIFICATION
• NY (state) — STATE OF INCORPORATION
• 0629 (date) — FISCAL YEAR END
• PHOENIX (city) — BUSINESS ADDRESS CITY

FAQ

Industry Context

AVNET INC operates in the wholesale of electronic parts and equipment sector. This filing provides insights into its performance within this industry.

Regulatory Implications

As a publicly traded company, AVNET INC is required to file quarterly reports (10-Q) with the SEC under the Securities Exchange Act of 1934.

What Investors Should Do

1. Analyze the financial statements (balance sheet, income statement, cash flow) for the quarter ended March 30, 2024.
2. Review the Management's Discussion and Analysis of Financial Condition and Results of Operations for narrative insights.
3. Compare key financial metrics with previous periods and industry benchmarks.

Key Dates

• 2024-03-30: Quarterly Period End — End of the reporting period for the 10-Q filing.
• 2024-05-03: Filing Date — Date AVNET INC submitted the 10-Q to the SEC.

Year-Over-Year Comparison

This is the 10-Q filing for the period ending March 30, 2024, following previous filings for the fiscal year 2024.

Key Financial Figures

• $1.00 — h registered: Common stock, par value $1.00 per share AVT Nasdaq Global Select

Filing Documents

• avt-20240330x10q.htm (10-Q) — 1570KB
• avt-20240330xex31d1.htm (EX-31.1) — 15KB
• avt-20240330xex31d2.htm (EX-31.2) — 15KB
• avt-20240330xex32d1.htm (EX-32.1) — 8KB
• avt-20240330xex32d2.htm (EX-32.2) — 8KB
• 0000008858-24-000020.txt (&nbsp;) — 6513KB
• avt-20240330.xsd (EX-101.SCH) — 34KB
• avt-20240330_cal.xml (EX-101.CAL) — 47KB
• avt-20240330_def.xml (EX-101.DEF) — 143KB
• avt-20240330_lab.xml (EX-101.LAB) — 333KB
• avt-20240330_pre.xml (EX-101.PRE) — 255KB
• avt-20240330x10q_htm.xml (XML) — 1276KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements (Unaudited)

Item 1. Financial Statements (Unaudited) Consolidated Balance Sheets at March 30, 2024, and July 1, 2023 2 Consolidated Statements of Operations for the third quarters and nine months ended March 30, 2024, and April 1, 2023 3 Consolidated Statements of Comprehensive Income for the third quarters and nine months ended March 30, 2024, and April 1, 2023 4 Consolidated Statements of Shareholders' Equity for the third quarters and nine months ended March 30, 2024, and April 1, 2023 5 Consolidated Statements of Cash Flows for the nine months ended March 30, 2024, and April 1, 2023 6

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 7

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 17

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 24

Controls and Procedures

Item 4. Controls and Procedures 25

OTHER INFORMATION

PART II. OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings 25

Risk Factors

Item 1A. Risk Factors 26

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 26

Exhibits

Item 6. Exhibits 27 Signature Page 28 1 Table of Contents PART I FINANCIAL INFORMATION Item 1.

Financial Statements

Financial Statements AVNET, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited) March 30, July 1, 2024 2023 (Thousands, except share amounts) ASSETS Current assets: Cash and cash equivalents $ 218,473 $ 288,230 Receivables 4,315,063 4,763,788 Inventories 5,751,872 5,465,031 Prepaid and other current assets 200,428 233,804 Total current assets 10,485,836 10,750,853 Property, plant and equipment, net 561,560 441,557 Goodwill 780,506 780,629 Operating lease assets 219,572 221,698 Other assets 277,763 282,422 Total assets $ 12,325,237 $ 12,477,159 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Short-term debt $ 548,519 $ 70,636 Accounts payable 3,324,043 3,373,820 Accrued expenses and other 565,047 753,130 Short-term operating lease liabilities 55,063 51,792 Total current liabilities 4,492,672 4,249,378 Long-term debt 2,406,421 2,988,029 Long-term operating lease liabilities 183,427 190,621 Other liabilities 253,620 297,462 Total liabilities 7,336,140 7,725,490 Commitments and contingencies (Note 7) Shareholders' equity: Common stock $ 1.00 par; authorized 300,000,000 shares; issued 90,395,434 shares and 91,504,053 shares, respectively 90,395 91,504 Additional paid-in capital 1,709,747 1,691,334 Retained earnings 3,625,012 3,378,212 Accumulated other comprehensive loss ( 436,057 ) ( 409,381 ) Total shareholders' equity 4,989,097 4,751,669 Total liabilities and shareholders' equity $ 12,325,237 $ 12,477,159 See notes to consolidated financial statements. 2 Table of Contents AVNET, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Third Quarters Ended Nine Months Ended March 30, April 1, March 30, April 1, 2024 2023 2024 2023 (Thousands, except per share amounts) Sales $ 5,653,591 $ 6,514,619 $ 18,194,153 $ 19,982,273 Cost of sa

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. Basis of presentation and new accounting pronouncements In the opinion of management, the accompanying unaudited interim consolidated financial statements contain all adjustments necessary to present fairly Avnet, Inc. and its consolidated subsidiaries' (collectively, the "Company" or "Avnet") financial position, results of operations, comprehensive income, and cash flows. All such adjustments are of a normal recurring nature. Certain reclassifications have been made to fiscal 2023 balances to correspond to the fiscal 2024 consolidated financial statement presentation. Preparing financial statements in accordance with generally accepted accounting principles in the United States ("GAAP") requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements. Actual results may differ from these estimates and assumptions. Interim results of operations do not necessarily indicate the results to be expected for the full fiscal year. The information included in this Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company's Annual Report on Form 10-K for the fiscal year ended July 1, 2023. Recently adopted accounting pronouncements In September 2022, the FASB issued ASU No. 2022-04, Liabilities (subtopic 405-50): Supplier Finance Programs ("ASU No. 2022-04") to enhance the transparency of certain supplier finance programs to assist financial statement users in understanding the effect of such programs on a company's working capital, liquidity, and cash flows. The new guidance requires qualitative and quantitative disclosure sufficient to enable users of the financial statements to understand the nature, activity during the period, changes from period to period, and potential magnitude of such programs. The Company adopted this guidance in the first quarter of fiscal 2024, e

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) 2. Working capital Receivables The Company's receivables and allowance for credit losses were as follows: March 30, July 1, 2024 2023 (Thousands) Receivables $ 4,427,588 $ 4,876,631 Allowance for Credit Losses $ ( 112,525 ) $ ( 112,843 ) The Company had the following activity in the allowance for credit losses during the first nine months of fiscal 2024 and fiscal 2023: March 30, April 1, 2024 2023 (Thousands) Balance at beginning of the period $ 112,843 $ 113,902 Credit Loss Provisions 7,920 9,079 Credit Loss Recoveries ( 812 ) ( 140 ) Receivables Write Offs ( 6,784 ) ( 14,868 ) Foreign Currency Effect and Other ( 642 ) 2,249 Balance at end of the period $ 112,525 $ 110,222 Inventories The Company's inventories are primarily comprised of electronic components purchased from the Company's suppliers, which are available for sale to customers in the normal course of the Company's electronic component distribution business. Classified within inventories are electronic components held for supply chain service engagements where the Company is acting as an agent on behalf of an Original Equipment Manufacturer or in some cases the component supplier. Given that these supply chain services involve purchasing and warehousing components as part of the services, the Company classifies the underlying components within inventories on the consolidated balance sheets. Components held for supply chain services where the Company is acting as an agent represented approximately 11 % of inventories as of March 30, 2024, and approximately 8 % of inventories as of July 1, 2023. 3. Goodwill The following table presents the change in goodwill by reportable segment for the first nine months ended March 30, 2024. Electronic Components Farnell Total (Thousands) Carrying value at July 1, 2023 (1) $ 296,829 $ 483,800 $ 780,629 Foreign currency

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) 4. Debt Short-term debt consists of the following (carrying balances in thousands): March 30, July 1, March 30, July 1, 2024 2023 2024 2023 Interest Rate Carrying Balance Revolving credit facilities: Accounts receivable securitization program (due December 2024) 6.18 % — $ 475,700 $ — Other short-term debt 5.61 % 5.08 % 72,819 70,636 Short-term debt $ 548,519 $ 70,636 The Company has a trade accounts receivable securitization program (the "Securitization Program") in the United States with a group of financial institutions. The Securitization Program allows the Company to transfer, on an ongoing revolving basis, an undivided interest in a designated pool of trade accounts receivable, to provide security or collateral for borrowings of up to $ 700 million. The Securitization Program does not qualify for off balance sheet accounting treatment and any borrowings under the Securitization Program are recorded as debt in the consolidated balance sheets. Under the Securitization Program, the Company legally sells and isolates certain U.S. trade accounts receivable into a wholly owned and consolidated bankruptcy remote special purpose entity. Such receivables, which are recorded within "Receivables" in the consolidated balance sheets, totaled $ 1.13 billion and $ 1.27 billion at March 30, 2024, and July 1, 2023, respectively. The Securitization Program contains certain covenants relating to the quality of the receivables sold. Other short-term debt consists of various committed and uncommitted lines of credit and other forms of bank debt with financial institutions utilized primarily to support the ongoing working capital requirements of the Company, including its foreign operations. Long-term debt consists of the following (carrying balances in thousands): March 30, July 1, March 30, July 1, 2024 2023 2024 2023 Interest Rate Carrying Balance

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) The Company has a five-year $ 1.50 billion revolving credit facility (the "Credit Facility") with a syndicate of banks, which expires in August 2027. It consists of revolving credit facilities and the issuance of up to $ 200.0 million of letters of credit and up to $ 300.0 million of loans in certain approved currencies. As of March 30, 2024, and July 1, 2023, there were $ 0.9 million in letters of credit issued under the Credit Facility. Under the Credit Facility, the Company may select from various interest rate options, currencies, and maturities. The Credit Facility contains certain covenants, including various limitations on debt incurrence, share repurchases, dividends, investments, and capital expenditures. The Credit Facility also includes a financial covenant requiring the Company to maintain a leverage ratio not to exceed a certain threshold, which the Company was in compliance with as of March 30, 2024, and July 1, 2023. As of March 30, 2024, the carrying value and fair value of the Company's total debt was $ 2.95 billion and $ 2.90 billion, respectively. At July 1, 2023, the carrying value and fair value of the Company's total debt was $ 3.06 billion and $ 2.98 billion, respectively. Fair value for public notes was estimated based on quoted market prices (Level 1) and, for other forms of debt, fair value approximates carrying value due to the market based variable nature of the interest rates on those debt facilities (Level 2). 5. Leases Substantially all the Company's leases are classified as operating leases and are predominately related to real property for distribution centers, office space, and integration facilities with a lease term of up to 14 years. The Company's equipment leases are primarily for automobiles and distribution center equipment and are not material to the consolidated financial statements. The components of lease cost related to the Company's operating leases were as

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) Other information pertaining to operating leases consists of the following: Nine Months Ended March 30, April 1, 2024 2023 Operating Lease Term and Discount Rate Weighted-average remaining lease term in years 7.7 8.4 Weighted-average discount rate 3.8 % 3.8 % Supplemental Cash Flow Information (in thousands) Cash paid for operating lease liabilities $ 42,996 $ 43,030 Operating lease assets obtained from new operating lease liabilities $ 42,544 $ 34,318 6. Derivative financial instruments Many of the Company's subsidiaries purchase and sell products in currencies other than their functional currencies, which subjects the Company to the risks associated with fluctuations in currency exchange rates. This foreign currency exposure relates primarily to international transactions where the currency collected from customers can be different from the currency used to purchase from suppliers. The Company's foreign operations transactions are denominated primarily in the following currencies: U.S. Dollar, Euro, British Pound, Japanese Yen, Chinese Yuan, Taiwan Dollar, Canadian Dollar, and Mexican Peso. The Company also, to a lesser extent, has foreign operations transactions in other EMEA and Asian foreign currencies. The Company uses economic hedges to reduce this risk utilizing natural hedging ( i.e. , offsetting receivables and payables in the same foreign currency) and creating offsetting positions using derivative financial instruments (primarily forward foreign exchange contracts typically with maturities of less than 60 days , but no longer than one year ). The Company continues to have exposure to foreign currency risks to the extent they are not economically hedged. The fair value of forward foreign exchange contracts is based on Level 2 criteria under the ASC 820 fair value hierarchy. The Company's master netting and other similar arrangements with various financial

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) The locations and fair values of the Company's derivative financial instruments in the Company's consolidated balance sheets are as follows: March 30, July 1, 2024 2023 (Thousands) Economic hedges Prepaid and other current assets $ 8,456 $ 69,104 Accrued expenses and other $ 12,144 $ 68,594 Cross-currency swap Other liabilities $ 24,134 $ 22,849 The locations of derivative financial instruments on the Company's consolidated statements of operations are as follows: Third Quarters Ended Nine Months Ended March 30, April 1, March 30, April 1, 2024 2023 2024 2023 (Thousands) Economic hedges Other (expense) income, net $ ( 1,134 ) $ 18,359 $ (21,867) $ 29,543 Cross currency swap Interest and other financing expense, net $ 1,116 $ ( 524 ) $ 3,352 $ (524) 7. Commitments and contingencies From time to time, the Company may become a party to, or be otherwise involved in, various lawsuits, claims, investigations, and other legal proceedings arising in the ordinary course of conducting its business. While litigation is subject to inherent uncertainties, management does not anticipate that any such matters will have a material adverse effect on the Company's financial condition, liquidity, or results of operations. The Company is also currently subject to various pending and potential legal matters and investigations relating to compliance with governmental laws and regulations. For certain of these matters, it is not possible to determine the ultimate outcome, and the Company cannot reasonably estimate the maximum potential exposure or the range of possible loss, particularly regarding matters in early stages. The Company currently believes that the resolution of such matters will not have a material adverse effect on the Company's financial position or liquidity but could possibly be

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