AVNET INC
For the period ended Mar 30, 2024. Filed May 3, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 30, 2024 · Filed May 3, 2024
AVT$79.28+3.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2023-12-30; filed 2024-02-02.
0000008858-24-000008
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-03-30; filed 2024-05-03.
0000008858-24-000020
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 75 previous paragraphs and 67 current paragraphs.
27 unchanged; 20 reworded; 20 added; 28 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 4 previous and 5 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (20)
Current report
Industry outlook
Current report
The global electronic components market has a history of cyclical downturns followed by periods of increased demand. Beginning in the second half of calendar year 2023, the industry began to experience a downturn marked by a decrease in sales due to a combination of elevated customer inventory levels and lower underlying demand for electronic components. As a result, the Company has seen elevated inventory levels and decreased sales, resulting in lower operating income. The duration of the current downturn is uncertain, although there are some encouraging signs, such as indications of potential sequential growth in Asia and increases in IP&E orders in EMEA and Farnell. The Company expects sales in the fourth quarter of fiscal 2024 to be 3% to 8% lower than third quarter sales, which will negatively impact operating income and diluted earnings per share.
Current report
Results of Operation****s
Current report
Sales of $5.65 billion for the third quarter of fiscal 2024 decreased $861.0 million, or 13.2%, as compared to $6.51 billion for the same quarter last year. Sales for the first nine months of fiscal 2024 were $18.19 billion, a decrease of $1.79 billion, or 9.0%, as compared to sales of $19.98 billion for the first nine months of fiscal 2023. The decrease in sales on both a quarterly and year-to-date comparison basis is driven by a reduction in sales volume primarily due to the on-going market downturn occurring across the electronic components industry and, to a lesser extent, an unfavorable product mix of lower priced electronic components.
Current report
EC sales of $5.25 billion in the third quarter of fiscal 2024 decreased $813.9 million, or 13.4%, from the prior year third quarter sales of $6.06 billion, with all three regions contributing to the decrease. The decrease in sales is primarily due to sales volume decreases due to the market downturn in the electronic components industry and, to a lesser extent, an unfavorable product mix of lower priced electronic components.
Current report
The Company’s gross profit is primarily affected by sales volume and geographic sales mix. Gross profit for the third quarter of fiscal 2024 was $142.6 million, or 17.6% lower than the third quarter of fiscal 2023. Gross profit for the first nine months of fiscal 2024 was $240.6 million, or 10.2% lower than the first nine months of fiscal 2023. These decreases are primarily due to sales volume decreases in both operating groups in all three regions.
Current report
Gross profit margin decreased by 62 basis points to 11.8% for the third quarter of fiscal 2024 when compared to the third quarter of fiscal 2023 and decreased by 16 basis points to 11.7% for the first nine months of fiscal 2024 when compared to the first nine months of fiscal 2023. The quarter and year to date decreases in gross profit margin are primarily due to an increase in product mix to lower margin electronic components and, to a lesser extent, shifts in geographic sales mix. Sales in the higher gross profit margin western regions represented approximately 61% of sales in the third quarter of fiscal 2024, versus 63% during the third quarter of fiscal 2023.
Current report
Selling, general, and administrative expenses (“SG&A expenses”) decreased $30.9 million or 6.2% from the third quarter of fiscal 2023 and decreased $41.7 million, or 2.9%, from the first nine months of fiscal 2023. The quarterly and year-to-date decreases in SG&A expenses are primarily due to decreases in variable operating expenses associated with the decrease in sales volumes discussed above, partially offset by increases in costs due to inflation. Additionally, the first nine months of fiscal 2024 benefited from the impact of changes in foreign currency translation rates.
Current report
During the third quarter of fiscal 2024, the Company implemented a plan to reduce SG&A expenses at Farnell and deliver $50 million to $70 million in annual benefits. Additionally, the Company began expense reduction initiatives within EC and for corporate expenses, which are expected to yield additional annual cost savings of between $40 million to $60 million when completed.
Current report
The Company recorded restructuring, integration, and other expenses of $11.8 million during the third quarter of fiscal 2024, comprised of severance and other employee-related expenses of $14.8 million for reductions in headcount, $2.3 million of integration expense for the consolidation of certain warehouses, and other costs of $0.2 million. Additionally, the Company recorded a reduction of $5.5 million to environmental remediation reserves after entering into a favorable consent decree with a state agency for a certain environmental cleanup matter. The after-tax impact of restructuring, integration, and other expenses were $9.1 million and $0.10 per share on a diluted basis. Approximately half of the planned annual expense reductions were completed by the end of the third quarter of fiscal 2024 and the remaining actions will be completed by the end of fiscal 2024.
Current report
The Company expects to incur incremental restructuring, integration, and other expenses in the fourth quarter of fiscal 2024 similar to the amounts incurred in the third quarter of fiscal 2024. See Note 14 “Restructuring expenses” to the Company’s consolidated financial statements included in this Quarterly Report on Form 10-Q.
Current report
Operating income for the third quarter of fiscal 2024 was $190.2 million, a decrease of $123.5 million or 39.4%, year over year. Operating income margin for the third quarter of fiscal 2024 was 3.4%, a decrease of 145 basis points compared to 4.8% in the third quarter of fiscal 2023. On a year-to-date basis, operating income was $680.2 million for the first nine months of fiscal 2024, a decrease of $223.0 million, or 24.7%, from the first nine months of fiscal 2023. Operating income margin was 3.7% in the first nine months of fiscal 2024, a decrease of 78 basis points compared to 4.5% in the first nine months of fiscal 2023. The decreases in operating income and operating income margin for both the quarter and year-to-date periods are primarily due to the decrease in gross profit primarily from lower sales without a proportionate decrease in SG&A expenses, as discussed above. Additionally, the Company incurred restructuring, integration, and other expenses during the third quarter and first nine months of fiscal 2024, whereas there were no such expenses in the third quarter or first nine months of fiscal 2023. Finally, the first nine months of fiscal 2024 benefited from the impact of changes in foreign currency translation rates.
Current report
Comparing the third quarter of fiscal 2024 to the third quarter of fiscal 2023, EC operating income decreased 29.0% to $216.8 million, and EC operating income margin decreased 91 basis points to 4.1%, with all three regions contributing to the decrease. Farnell operating income decreased 60.1% to $16.3 million in the third quarter of fiscal 2024 and Farnell operating income margin decreased 499 basis points year over year to 4.0%. The decreases in operating income and operating income margin in both operating groups are due to the decrease in gross profit primarily from lower sales without a proportionate decrease in SG&A expenses. Corporate operating expenses were $30.4 million in the third quarter of fiscal 2024, a decrease of 3.8% when compared with $31.6 million in the third quarter of fiscal 2023.
Current report
Income tax expenses were $13.1 million and $114.9 million for the third quarter and first nine months of fiscal 2024, respectively, reflecting an effective tax rate of 12.9% and 21.6%, respectively. In comparison, for the third quarter and first nine months of fiscal 2023, income tax expenses were $56.2 million and $176.9 million, respectively, reflecting an effective tax rate of 23.1% and 22.3%, respectively. The decrease in the effective tax rate for the third quarter of fiscal 2024 as compared to the third quarter of fiscal 2023 was primarily due to the mix of income in lower tax foreign jurisdictions and decreases to unrecognized tax benefit reserves, net of settlements. The decrease in the effective tax rate for the first nine months of fiscal 2024 as compared to the first nine months of fiscal 2023 was primarily due to the mix of income in lower tax foreign jurisdictions, partially offset by increases to unrecognized tax benefit reserves, net of settlements. See Note 8 “Income taxes” to the Company’s consolidated financial statements included in this Quarterly Report on Form 10-Q.
Current report
Operating Activities
Current report
Net cash provided by operating activities was $499 million for the third quarter of fiscal 2024. Net cash provided by operating activities was $415.7 million for the first nine months of fiscal 2024, compared to net cash used by operating activities of $948.2 million for the first nine months of fiscal 2023. The $1.4 billion increase in net cash provided by operating activities year over year is primarily due to improvements in cash used for working capital and other as working capital levels have begun to be more in line with sales, offset by lower cash provided by net income. Cash used for working capital and other was $152.6 million during the first nine months of fiscal 2024, compared to $1.70 billion during the first nine months of fiscal 2023, with the difference attributable primarily to inventories. During the first nine months of fiscal 2024, the Company used less cash for inventories as less inventory was purchased due to inventory levels already being elevated and because of lower sales. The Company also had decreases in accounts receivable due to lower sales when compared to the prior year. The Company received $90.7 million of cash from legal settlements during the first nine months of fiscal 2024 as compared to $51.2 million of cash received from legal settlements during the first nine months of fiscal 2023.
Current report
Financing Activities
Current report
Net repayments of debt totaled $106.3 million during the first nine months of fiscal 2024, including the repayment of $49.1 million under the Credit Facility and $80.1 million under the Securitization Program, offset by net proceeds of $22.9 million for other debt. This compares to $1.43 billion of net borrowing during the first nine months of the prior fiscal year. The Company paid cash dividends to shareholders of $0.93 per share, or $84.2 million, during the first nine months of fiscal 2024 as compared to $0.87 per share, or $79.8 million, during the first nine months of fiscal 2023. The Company has repurchased $86.0 million of common stock under the share repurchase plan through the third quarter of fiscal 2024 compared to $221.3 million in the same period of the prior year.
Current report
Investing Activities
Current report
The Company’s purchases of property, plant and equipment increased during the first nine months of fiscal 2024 by $62.4 million, when compared to the same period in fiscal 2023, primarily due to distribution center investments in EMEA.
Removed paragraphs (28)
Previous report
Results of Operations
Previous report
Executive Summary
Previous report
Consolidated sales decreased by $512.6 million or 7.6% to $6.20 billion, from the prior year’s second quarter sales of $6.72 billion. The decrease in sales is primarily due to softening demand for electronic components, driven in part by customers having sufficient inventory on hand to meet their near-term production requirement. The Company expects these market conditions to continue potentially throughout 2024.
Previous report
Gross profit of $706.2 million for the second quarter of fiscal 2024 decreased $77.9 million from the second quarter of fiscal 2023 primarily due to the decline in sales and to a lesser extent, unfavorable changes in sales mix.
Previous report
Second-quarter fiscal 2024 operating income was $236.3 million, down $62.7 million or 21.0% from the prior year’s second-quarter operating income of $299.0 million. Operating income margin was 3.8% in the second quarter of fiscal 2024, as compared to 4.5% in the second quarter of fiscal 2023. The year-over-year decrease in operating income and operating income margin is primarily due to lower sales and gross margins, partially offset by lower operating expenses.
Previous report
Sales of $6.20 billion for the second quarter of fiscal 2024 decreased $512.6 million, or 7.6%, as compared to $6.72 billion for the same quarter last year. The year-over-year decrease in sales is primarily due to the changing market conditions discussed above. Sales in constant currency decreased 8.7% in the second quarter of fiscal 2024 year over year.
Previous report
EC sales of $5.81 billion in the second quarter of fiscal 2024 decreased $497.4 million or 7.9% from the prior year second quarter sales of $6.31 billion with all three regions contributing to the decrease. EC sales decreased 8.9% year over year in constant currency.
Previous report
Sales for the first six months of fiscal 2024 were $12.54 billion, a decrease of $927.1 million as compared to sales of $13.47 billion for the first six months of fiscal 2023 driven by lower demand across all regions.
Previous report
Gross profit and gross profit margin were $1.45 billion and 11.6%, respectively, for the first six months of fiscal 2024 as compared with $1.55 billion and 11.5%, respectively, for the first six months of fiscal 2023.
Previous report
Selling, general and administrative expenses (“SG&A expenses”) were $464.7 million in the second quarter of fiscal 2024, a decrease of $20.4 million or 4.2% from the second quarter of fiscal 2023. The year-over-year decrease in SG&A expenses was primarily a result of declines in sales partially offset by the impact of changes in foreign currency translation rates.
Previous report
SG&A expenses for the first six months of fiscal 2024 were $952.0 million, or 7.6% of sales, as compared with $962.8 million, or 7.1% of sales, in the first six months of fiscal 2023. SG&A expenses as a percentage of gross profit for the first six months of fiscal 2024 were 65.5% as compared with 62.0% in the first six months of fiscal 2023.
Previous report
The Company recorded restructuring, integration, and other expenses of $5.2 million during the second quarter of fiscal 2024. The after-tax impact of restructuring, integration, and other expenses were $4.0 million and $0.04 per share on a diluted basis.
Previous report
The Company expects to incur approximately $15.0 million to $25.0 million of restructuring, integration and other expenses in the second half of fiscal 2024 primarily related to Farnell. The expected benefits from the Farnell restructuring actions, once completed, are $50.0 million to $70.0 million of annual operating expense reductions.
Previous report
Operating income for the second quarter of fiscal 2024 was $236.3 million, a decrease of $62.7 million or 21.0%, from the second quarter of fiscal 2023 operating income of $299.0 million. The year-over-year decrease in operating income was primarily driven by the decrease in sales, partially offset by the favorable impact from foreign currency exchange rates. Adjusted operating income for the second quarter of fiscal 2024 was $242.2 million, a decrease of $58.3 million or 19.4% from the second quarter of fiscal 2023. Operating income margin was 3.8% in the second quarter of fiscal 2024, a decrease of 64 basis points compared to 4.5% in the prior year second quarter.
Previous report
EC operating income margin decreased 43 basis points year over year to 4.3% and Farnell operating income margin decreased 504 basis points year over year to 4.0%. The decline in operating income margin in both operating groups was primarily driven by lower sales and declines in gross profit margin as discussed further above.
Previous report
Operating income for the first six months of fiscal 2024 was $490.0 million, a decrease of $99.5 million, from the first six months of fiscal 2023 operating income of $589.5 million. The year-over-year decrease in operating income was primarily due to the decrease in sales, and lower gross profit margin, partially offset by the favorable impact from foreign currency exchange rates. Adjusted operating income for the first six months of fiscal 2024 was $503.9 million, a decrease of $89.9 million or 15.1% from the first six months of fiscal 2023. Operating income margin was 3.9% in the first six months of fiscal 2024, a decrease of 47 basis points compared to 4.4% in the prior year first six months.
Previous report
The below discussion of the effective tax rate for the periods presented in the consolidated statements of operations is in comparison to the 21% U.S. statutory federal income tax rate.
Previous report
The Company’s effective tax rate on its income before taxes was 23.2% in the second quarter of fiscal 2024. During the second quarter of fiscal 2024, the Company’s effective tax rate was unfavorably impacted primarily by (i) increases to unrecognized tax benefit reserves, (ii) U.S. state taxes, partially offset by (iii) the mix of income in lower tax foreign jurisdictions.
Previous report
During the second quarter of fiscal 2023, the Company’s effective tax rate on its income before taxes was 19.5%. During the second quarter of fiscal 2023, the Company’s effective tax rate was favorably impacted primarily by (i) increases in unrecognized tax benefit reserves, partially offset by (ii) the mix of income in higher tax foreign jurisdictions.
Previous report
For the first six months of fiscal 2024, the Company’s effective tax rate on its income before taxes was 23.7%. The effective tax rate for the first six months of fiscal 2024 was unfavorably impacted primarily by (i) increases to unrecognized tax benefit reserves, (ii) U.S. state taxes, and (iii) the mix of income in higher tax foreign jurisdictions.
Previous report
During the first six months of fiscal 2023, the Company’s effective tax rate on its income before taxes was 22.0%. The effective tax rate for the first six months of fiscal 2023 was unfavorably impacted primarily by (i) the mix of income in higher tax foreign jurisdictions, partially offset by (ii) decreases to unrecognized tax benefit reserves.
Previous report
Cash Flow from Operating Activities
Previous report
During the first six months of fiscal 2024, the Company used $83.6 million of cash flow for operations compared to $966.5 million of cash used for operations in the first six months of fiscal 2023. These operating cash flows were comprised of: (i) cash flow generated from net income, adjusted for the impact of non-cash and other items, which includes depreciation and amortization expenses, deferred income taxes, stock-based compensation expense, amortization of operating lease assets, and other non-cash items, and (ii) cash flows used for working capital and other, excluding cash and cash equivalents. Cash used for working capital and other was $539.4 million during the first six months of fiscal 2024, including an increase in inventories of $610.0 million, and decreases in accounts payable of $78.1 million, and accrued expenses and other of $138.7 million, partially offset by a decrease in accounts receivable of $287.3 million. Comparatively, cash used for working capital and other was $1.48 billion during the first six months of fiscal 2023, including increases in accounts receivable of $469.7 million, and in inventories of $686.9 million, and a decrease in accounts payable of $341.2 million, partially offset by an increase in accrued expenses and other of $20.0 million.
Previous report
Cash Flow from Financing Activities
Previous report
During the first six months of fiscal 2024, the Company received net proceeds of $272.7 million under the Credit Facility, $58.6 million under the Securitization Program, and $30.8 million under other short-term debt. During the first six months of fiscal 2024, the Company paid dividends on common stock of $56.1 million and repurchased $86.0 million of common stock.
Previous report
During the first six months of fiscal 2023, the Company received net proceeds of $1.13 billion and $352.2 million under the Credit Facility and the Securitization Program, respectively, and $47.7 million under other short-term debt. During the first six months of fiscal 2023, the Company paid dividends on common stock of $53.3 million and repurchased $221.3 million of common stock.
Previous report
Cash Flow from Investing Activities
Previous report
During the first six months of fiscal 2024, the Company used $158.1 million for capital expenditures as compared to $111.4 million for capital expenditures in the first six months of fiscal 2023. The increase in capital expenditures is primarily due to distribution center expansions in EMEA.
Reworded paragraphs (20)
Previous wording
Avnet, Inc., including its consolidated subsidiaries (collectively, the “Company” or “Avnet”), is a leading global electronic component technology distributor and solutions provider that has served customers’ evolving needs for more than a century. Founded in 1921, the Company works with suppliers in every major technology segment to serve customers in more than 140 countries.
Current wording
Avnet, Inc., including its consolidated subsidiaries (collectively, the “Company” or “Avnet”), is a leading global electronic component distributor and solutions provider that has served customers’ evolving needs for more than a century. Founded in 1921, the Company works with suppliers in every major technology segment to serve customers in more than 140 countries.
Previous wording
Avnet has two primary operating groups — Electronic Components (“EC”) and Farnell (“Farnell”). Both operating groups have operations in each of the three major economic regions of the world: (i) the Americas, (ii) EMEA, and (iii) Asia. EC markets, sells, and distributes (i) semiconductors, (ii) interconnect, passive and electromechanical components, and (iii) other integrated and embedded components, to a diverse customer base serving many end-markets. Farnell distributes electronic components and industrial products to a diverse customer base utilizing multi-channel sales and marketing resources.
Current wording
Avnet has two primary operating groups — Electronic Components (“EC”) and Farnell. Both operating groups have operations in each of the three major economic regions of the world: (i) the Americas, (ii) EMEA, and (iii) Asia. EC markets, sells, and distributes (i) semiconductors, (ii) interconnect, passive and electromechanical components, and (iii) other integrated and embedded components, to a diverse customer base serving many end-markets. Farnell distributes electronic components and industrial products to a diverse customer base utilizing multi-channel sales and marketing resources.
Previous wording
The following table presents sales growth rates (declines) for the second quarter and first six months of fiscal 2024 as compared to fiscal 2023 by geographic region and operating group.
Current wording
The following table presents sales decline rates for the third quarter and first nine months of fiscal 2024 as compared to fiscal 2023, by geographic region and operating group.
Previous wording
Farnell sales for the second quarter of fiscal 2024 were $392.8 million, a decrease of $15.2 million or 3.7% from the prior year second quarter sales of $408.0 million. Farnell sales in constant currency in the second quarter of fiscal 2024 decreased by 6.0% year over year primarily due to a decline in demand for on-the-board electronic components from high service distributors and competitive pricing pressures.
Current wording
Farnell sales for the third quarter of fiscal 2024 were $407.8 million, reflecting a decrease of $47.2 million, or 10.4%, compared to the same period in the prior year. Farnell sales in constant currency for the third quarter of fiscal 2024 decreased by 11.2% year over year. The decrease in sales in the third quarter of fiscal 2024 is primarily due to lower demand, including lower demand for on-the-board electronic components, partially offset by increases in availability and demand for single board computers.
Previous wording
Gross profit for the second quarter of fiscal 2024 was $706.2 million, a decrease of $77.9 million or 9.9% from the second quarter of fiscal 2023 gross profit of $784.1 million. Gross profit margin of 11.4% decreased 29 basis points compared to the second quarter of fiscal 2023 gross profit margin of 11.7%. The decreases in gross profit and gross profit margin in the second quarter of fiscal 2024 as compared to fiscal 2023 are primarily due to decreased sales, and unfavorable shifts in product mix, respectively. EC gross profit margin decreased year over year primarily due to unfavorable product mix shifts. Farnell gross profit margin decreased year over year primarily due to the unwinding of component shortage pricing premiums, a lower sales mix of on-the-board electronic components, and from competitive pricing pressures for on-the-board components.
Current wording
EC gross profit margin decreased year over year largely due to an increase in product mix to lower margin electronic components. Farnell gross profit margin decreased year over year, primarily due to lower sales of higher margin on-the-board electronic components.
Previous wording
Metrics that management monitors with respect to its operating expenses are SG&A expenses as a percentage of sales and as a percentage of gross profit. In the second quarter of fiscal 2024, SG&A expenses were 7.5% of sales and 65.8% of gross profit, as compared with 7.2% and 61.9%, respectively, in the second quarter of fiscal 2023. The year-over-year increase in SG&A expense as a percentage of both sales and gross profit is primarily due to the decrease in sales and gross profit.
Current wording
Management monitors SG&A expenses as a percentage of sales and as a percentage of gross profit. In the third quarter of fiscal 2024, SG&A expenses were 8.3% of sales and 69.8% of gross profit, as compared with 7.6% and 61.4%, respectively, in the third quarter of fiscal 2023. SG&A expenses were 7.8% of sales and 66.8% of gross profit in the first nine months of fiscal 2024 compared with 7.3% and 61.8%, respectively, in the first nine months of fiscal 2023. The year-over-year increases in SG&A expenses as a percentage of both sales and gross profit are primarily due to the decrease in sales and gross profit without a proportional reduction in SG&A expenses, resulting in lower operating leverage.
Previous wording
During the first six months of fiscal 2024, the Company incurred restructuring costs of $2.8 million and other expenses of $9.5 million. Restructuring expenses consisted of severance costs of $2.8 million related to the reduction, or planned reduction of over 50 employees in the Company’s Farnell operating group. The after-tax impact of restructuring, integration, and other expenses were $9.3 million and $0.09 per share on a diluted basis.
Current wording
During the first nine months of fiscal 2024, the Company incurred restructuring costs of $17.6 million and integration and other expenses of $6.6 million and $5.5 million, respectively. Restructuring expenses consisted of severance and other employee-related expenses of $17.6 million associated with the reduction, or planned reduction of approximately 400 employees predominately in the Company’s Farnell operating group, integration costs of $6.6 million related to the Company’s consolidation of several smaller warehouses, and other costs of $5.5 million related to certain legal and accounting costs associated with M&A activity that did not lead to a transaction. Additionally, the Company recorded a reduction of $5.6 million, primarily related to environmental remediation reserves as discussed above. The after-tax impact of restructuring, integration, and other expenses were $18.4 million and $0.20 per share on a diluted basis.
Previous wording
Interest and other financing expenses in the second quarter of fiscal 2024 was $74.3 million, an increase of $15.3 million, as compared with interest and other financing expenses of $59.0 million in the second quarter of fiscal 2023. Interest and other financing expenses in the first six months of fiscal 2024 was $145.1 million, an increase of $41.0 million, as compared with interest and other financing expenses of $104.1 million in the first six months of fiscal 2023. The increases in interest and other financing expenses in the second quarter and first six months of fiscal 2024 compared to fiscal 2023 are primarily a result of higher outstanding borrowings and increases in average borrowing rates.
Current wording
Interest and other financing expenses in the third quarter of fiscal 2024 were $73.5 million, an increase of $1.8 million as compared to $71.7 million in the third quarter of fiscal 2023. Interest and other financing expenses in the first nine months of fiscal 2024 were $218.6 million, an increase of $42.8 million as compared to $175.8 million in the first nine months of fiscal 2023. The increases in interest and other financing expenses in the third quarter and first nine months of fiscal 2024 compared to fiscal 2023 are primarily a result of higher outstanding borrowings and increases in average borrowing rates.
Previous wording
The Company had other expenses of $8.4 million in the second quarter of fiscal 2024 compared to other income of $1.5 million in the second quarter of fiscal 2023. The $9.9 million increase in other expenses in the second quarter of fiscal 2024 was primarily due to foreign currency translation losses. The Company had other expenses of $2.4 million in the first six months of fiscal 2024, compared to other income of $1.8 million in the first six months of fiscal 2023.
Current wording
The Company had other expenses of $14.7 million in the third quarter of fiscal 2024 compared to other income of $1.7 million in the third quarter of fiscal 2023. The $16.4 million increase in other expenses in the third quarter of fiscal 2024 is primarily due to foreign currency translation losses. The Company had other expenses of $17.1 million in the first nine months of fiscal 2024, compared to other income of $3.5 million in the first nine months of fiscal 2023. The increase in other expenses is primarily due to foreign currency translation losses.
Previous wording
During the first six months of fiscal 2024 and the first six months of fiscal 2023, the Company recorded a gain on legal settlements and other of $86.5 million and $61.7 million, respectively, in connection with the settlements of claims filed against certain manufacturers of capacitors.
Current wording
During the first nine months of fiscal 2024 and the first nine months of fiscal 2023, the Company recorded a gain on legal settlements and other of $86.5 million and $61.7 million, respectively, in connection with the settlements of claims filed against certain manufacturers of capacitors.
Previous wording
As a result of the factors described in the preceding sections of this MD&A, the Company’s net income for the second quarter of fiscal 2024 was $117.9 million, or $1.28 per share on a diluted basis, as compared with $243.9 million, or $2.63 per share on a diluted basis, in the second quarter of fiscal 2023.
Current wording
As a result of the factors described above, the Company’s net income for the third quarter of fiscal 2024 was $88.8 million, or $0.97 per share on a diluted basis, as compared with $187.4 million, or $2.03 per share on a diluted basis, in the third quarter of fiscal 2023.
Previous wording
As a result of the factors described in the preceding sections of this MD&A, the Company’s net income for the first six months of fiscal 2024 was $327.2 million, or $3.54 per share on a diluted basis, as compared with $428.1 million, or $4.55 per share on a diluted basis, in the first six months of fiscal 2023.
Current wording
As a result of the factors described above, the Company’s net income for the first nine months of fiscal 2024 was $416.0 million, or $4.52 per share on a diluted basis, as compared with $615.6 million, or $6.58 per share on a diluted basis, in the first nine months of fiscal 2023.
Previous wording
The Company has various lines of credit, financing arrangements, and other forms of bank debt in the U.S. and various foreign locations to fund the short-term working capital, foreign exchange, overdraft, capital expenditure, and letter of credit needs of its wholly owned subsidiaries. Outstanding borrowings under such forms of debt at the end of second quarter of fiscal 2024 was $105.1 million.
Current wording
The Company has various lines of credit, financing arrangements, and other forms of bank debt in the U.S. and various foreign locations to fund the short-term working capital, foreign exchange, overdraft, capital expenditure, and letter of credit needs of its wholly owned subsidiaries. Outstanding borrowings under such forms of debt at the end of third quarter of fiscal 2024 was $96.4 million.
Previous wording
The Company held cash and cash equivalents of $272.9 million as of December 30, 2023, of which $178.7 million was held outside the United States. As of July 1, 2023, the Company held cash and cash equivalents of $288.2 million, of which $194.5 million was held outside of the United States.
Current wording
The Company held cash and cash equivalents of $218.5 million as of March 30, 2024, of which $114.2 million was held outside the United States. As of July 1, 2023, the Company held cash and cash equivalents of $288.2 million, of which $194.5 million was held outside of the United States.
Previous wording
During periods of weakening demand in the electronic components industry, the Company typically generates cash from operating activities. Conversely, the Company will use cash for working capital requirements during periods of higher growth. The Company generated $169.2 million in cash flows for operating activities over the trailing four fiscal quarters ended December 30, 2023.
Current wording
During periods of weakening demand in the electronic components industry, the Company typically generates cash from operating activities. Conversely, the Company will use cash for working capital requirements during periods of higher growth. The Company generated $650.3 million in cash flows from operating activities over the trailing four fiscal quarters ended March 30, 2024.
Previous wording
Liquidity is subject to many factors, such as normal business operations and general economic, financial, competitive, legislative, and regulatory factors that are beyond the Company’s control. To the extent the cash balances held in foreign locations cannot be remitted back to the U.S. in a tax efficient manner, those cash balances are generally used for ongoing working capital, including the need to purchase inventories, capital expenditures and other foreign business needs. In addition, local government regulations may restrict the Company’s ability to move funds among various locations under certain circumstances. Management does not believe such restrictions would limit the Company’s ability to pursue its intended business strategy.
Current wording
Liquidity is subject to many factors, such as normal business operations and general economic, financial, competitive, legislative, and regulatory factors that are beyond the Company’s control. Cash balances held in foreign locations that cannot be remitted back to the U.S. in a tax efficient manner are generally used for ongoing working capital, including the need to purchase inventories, capital expenditures, and other foreign business needs. In addition, local government regulations may restrict the Company’s ability to move funds among various locations under certain circumstances. Management does not believe such restrictions would limit the Company’s ability to pursue its intended business strategy.
Previous wording
As of the end of the second quarter of fiscal 2024, the Company had a combined total borrowing capacity of $2.20 billion under the Credit Facility and the Securitization Program. There were $1.09 billion of borrowings outstanding and $0.9 million in letters of credit issued under the Credit Facility, and $614.4 million outstanding under the Securitization Program, resulting in approximately $493.0 million of total committed availability as of December 30, 2023. Availability under the Securitization Program is subject to the Company having sufficient eligible trade accounts receivable in the United States to support desired borrowings.
Current wording
As of the end of the third quarter of fiscal 2024, the Company had a combined total borrowing capacity of $2.20 billion under the Credit Facility and the Securitization Program. There were $745.1 million of borrowings outstanding and $0.9 million in letters of credit issued under the Credit Facility, and $475.7 million outstanding under the Securitization Program, resulting in approximately $889.7 million of total committed availability as of March 30, 2024. Availability under the Securitization Program is subject to the Company having sufficient eligible trade accounts receivable in the United States to support desired borrowings.
Previous wording
During the second quarter and first six months of fiscal 2024, the Company had an average daily balance outstanding of approximately $1.30 billion and $1.23 billion, respectively, under the Credit Facility and approximately $612.3 million and $618.6 million, respectively, under the Securitization Program.
Current wording
During the third quarter and first nine months of fiscal 2024, the Company had an average daily balance outstanding of approximately $1.23 billion under the Credit Facility, and approximately $620.3 million and $619.2 million, respectively, under the Securitization Program.
Previous wording
As of December 30, 2023, the Company may repurchase up to an aggregate of $232.5 million of shares of the Company’s common stock through the share repurchase program approved by the Board of Directors. The Company may repurchase stock from time to time at the discretion of management, subject to strategic considerations, market conditions including share price and other factors. The Company may terminate or limit the share repurchase program at any time without prior notice. During the second quarter of fiscal 2024, the Company repurchased $59.0 million of common stock.
Current wording
As of March 30, 2024, the Company may repurchase up to an aggregate of $232.5 million of shares of the Company’s common stock through the share repurchase program approved by the Board of Directors. The Company may repurchase stock from time to time at the discretion of management, subject to strategic considerations, market conditions (including share price), and other factors. The Company may terminate or limit the share repurchase program at any time without prior notice. During the third quarter of fiscal 2024, the Company did not repurchase any shares. The Company expects to use cash to repurchase shares during the fourth quarter of fiscal 2024.
Previous wording
The Company has historically paid quarterly cash dividends on shares of its common stock, and future dividends are subject to approval by the Board of Directors. During the second quarter of fiscal 2024, the Board of Directors approved a dividend of $0.31 per share, which resulted in $27.8 million of dividend payments during the quarter.
Current wording
The Company has historically paid quarterly cash dividends on shares of its common stock, and future dividends are subject to approval by the Board of Directors. During the third quarter of fiscal 2024, the Board of Directors approved a dividend of $0.31 per share, which resulted in $28.0 million of dividend payments during the quarter.