Quarterly sales grew 12% year over year to $5.05 billion; GAAP diluted EPS of $0.33 decreased 30%; Adjusted diluted EPS of $1.04 rose 33%
Second Quarter Key Financial Highlights
- Sales rose 11.7% year over year (13.1% in constant currency) to $5.05 billion
- GAAP diluted EPS from continuing operations decreased 30% year over year to $0.33
o Non-GAAP adjusted diluted EPS rose 33% year over year to $1.04
o Foreign exchange rates negatively impacted adjusted diluted EPS by $0.02
- GAAP operating income rose 18% year over year to $96.1 million
o Adjusted operating income rose 28% year over year to $178.8 million
- GAAP operating income margin was 1.9%, up from 1.8% a year ago
o Adjusted operating income margin was 3.5%, up from 3.1% a year ago
- Returned $197 million to shareholders with $175 million of share repurchases and dividends of $22 million
"Our second quarter results demonstrate the tremendous progress we are making in transforming Avnet into a global technology solutions company," said Avnet CEO Bill Amelio. "Even with the current uncertainties in Asia, Avnet posted strong gains in revenue and profitability compared to a year ago. Our unique ecosystem approach is really starting to pay off with our suppliers and customers. With the addition of Softweb Solutions, we now have the software and hardware to deliver an end-to-end IoT capability that can lower costs, speed time to market, and reduce complexity for our customers."
"This quarter, we continued to execute broadly across our stated goals including accelerating the Americas, optimizing our cost structure and reducing share count," stated Tom Liguori, Avnet Chief Financial Officer. "We delivered year-over-year, double-digit sales growth while reducing selling, general and administrative expenses by $12 million. Our diluted share count decreased by 10 million shares year over year or 8%. Our remaining buyback authorization stands at $440 million at the end of the quarter which we will utilize appropriately to signal our continued confidence in Avnet's long-term outlook."
Additional Second Quarter Fiscal 2019 Highlights and Key Developments
- Expanded Avnet's Internet of Things (IoT) capabilities with the acquisition of Softweb Solutions. The integration of Softweb's best-of-breed artificial intelligence (AI) software for IoT applications, along with its data services and digital process capabilities, provides Avnet with rapid design, development, and deployment capabilities that can help customers increase efficiency, speed time to market and help their businesses transform.
- Capitalized on the significance of electronica, a leading trade show for electronics, by building Avnet City. This was the first time Avnet used an industry event to bring together under one exhibit the expanse of Avnet's end-to-end ecosystem. The well-received Avnet exhibit included community-oriented events hosted by Hackster.io and element14, and demonstrations highlighting the Company's innovation capabilities, including robotics, AI and virtual reality.
- Demonstrated at CES the depth and breadth of Avnet's IoT R&D resources including its role as a lead partner for Microsoft Azure Sphere; the unveiling of Avnet's SmartEdge Agile, which is ideal for developing machine learning applications such as predictive maintenance and remote monitoring; and Avnet's SmartEdge Industrial IoT Gateway, which is designed for automation applications that require strong end-to-end security.
- Generated $72 million of cash flow from continuing operations during the quarter.
- Recorded restructuring, integration and other expenses of $62 million during the second quarter primarily for non-cash impairment and severance costs. These charges were incurred in connection with the continued transformation of our IT, distribution center and business operations including the re-prioritization of our IT initiatives and resources. Second quarter transformation projects are expected to deliver approximately $10 million in savings per quarter once fully implemented.
Awards and Notable Recognition Received During the Quarter
- Received ROHM Semiconductor's Global Distributor Award
- Named Supplier of the Year by L3 Technologies for the second year in a row
- Received Infineon's Top Distributor Award in Asia and Greater China
- Recognized by Micron with the Most Valuable Demand Creation Distributor Award in Asia
- Received several TE Connectivity awards in China/Asia for Excellent Solution Design and Growth
For the full press release, please visit: https://news.avnet.com/press-release/avnet/avnet-reports-second-quarter-fiscal-2019-financial-results
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Avnet is a global technology solutions provider with an extensive ecosystem delivering design, product, marketing and supply chain expertise for customers at every stage of the product lifecycle. We transform ideas into intelligent solutions, reducing the time, cost and complexities of bringing products to market. For nearly a century, Avnet has helped its customers and suppliers around the world realize the transformative possibilities of technology. Learn more about Avnet at www.avnet.com.