Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 28, 2024 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | --- | --- | --- | |-------------------------------------------------------------------------------------------|------------------------------------------------|------------------- ...

Core Insights - Avnet (AVT) reported better-than-expected results for the first quarter of fiscal 2025, with earnings of 92 cents per share, surpassing the Zacks Consensus Estimate of 85 cents and management's guidance of 80-90 cents per share. However, this represents a 42.9% decline year over year due to decreased revenues [1][4]. Financial Performance - Revenues for the fiscal first quarter were $5.6 billion, exceeding the high end of the company's guidance of $5.25-$5.55 billion and the Zacks Consensus Estimate of $5.41 billion. Year-over-year, revenues declined by 11.6% [2][4]. - The Electronic Components segment's revenues decreased by 11.1% year over year but increased by 1.3% sequentially to $5.26 billion, while Farnell sales fell 17.6% year over year and 7.5% sequentially to $347.1 million [5]. - From a regional perspective, sales increased by 6.2% in Asia to $2.61 billion, but declined by 27.7% in EMEA to $1.67 billion and by 15.5% in the Americas to $1.33 billion [6]. Operating Metrics - Adjusted operating income was $168.9 million, down 35.4% year over year. The operating income for the Electronic Components segment fell 27.8% to $197 million, while Farnell's operating income dropped 88.9% to $2 million [6]. - The adjusted operating margin shrank by 112 basis points to 3% from the year-ago quarter, with the Electronic Components segment's margin contracting by 86 basis points to 3.8% and Farnell's margin declining by 366 basis points to 0.5% [7]. Balance Sheet and Cash Flow - As of September 30, 2024, Avnet had cash and cash equivalents of $267.5 million, down from $310.9 million at the end of the previous quarter. Long-term debt remained flat at $2.43 billion [8]. - The company generated nearly $106.3 million in cash from operational activities during the fiscal first quarter [8]. Shareholder Returns and Future Guidance - In the quarter, Avnet repurchased approximately $100 million worth of shares, representing more than 2% of shares outstanding, and returned $28.9 million to shareholders in dividends [9]. - For the second quarter of fiscal 2025, Avnet anticipates revenues in the range of $5.4-$5.7 billion, with non-GAAP earnings expected between 80-90 cents per share [9].

Financial Data and Key Metrics Changes - The company achieved sales of over $5.6 billion and adjusted EPS of $0.92, both exceeding the high end of guidance [5][24] - Sales decreased by 12% year-over-year but increased by 1% sequentially [24][25] - Gross margin was 10.8%, down 97 basis points year-over-year and 72 basis points sequentially [26] - Adjusted operating income was $169 million with an adjusted operating margin of 3% [29] Business Line Data and Key Metrics Changes - Electronic Components sales declined 11% year-over-year but increased 1% sequentially [25] - Farnell sales decreased 18% year-over-year and 8% sequentially [26][15] - The Asia region saw a 14% sequential increase and a 6% year-over-year increase in sales, driven by strength in server and data center markets [12][25] Market Data and Key Metrics Changes - EMEA sales declined 28% year-over-year, while Americas sales decreased 16% [25] - Demand in aerospace and defense increased sequentially in EMEA but remained flat year-over-year [13] - The global book-to-bill ratio remains below parity, with Asia showing the strongest ratio [7] Company Strategy and Development Direction - The company is focusing on cost control and managing working capital while preparing for market recovery [6][18] - There is an emphasis on improving the Farnell business under new leadership, with restructuring efforts underway [15][17] - The company is optimistic about future growth opportunities in AI-related projects and the overall market recovery [21][22] Management's Comments on Operating Environment and Future Outlook - Management believes the market correction may continue for another quarter or two, with expectations for modest improvement in the second half of fiscal 2025 [55][74] - The company is seeing some positive indicators, including a return to year-on-year growth in Asia and an increase in turns business [22][75] - Management remains confident in the company's ability to adapt and thrive through market changes [23] Other Important Information - The company generated over $100 million in cash flow from operations during the quarter [5] - Inventory levels increased due to foreign currency exchange rates, but the company aims to reduce inventory days to the 80s by the end of the fiscal year [33][34] - The quarterly dividend was increased by approximately 6% to $0.33 per share, and share buyback authorization was expanded to $600 million [37][38] Q&A Session Summary Question: Understanding Asia's Return to Year-over-Year Growth - Management noted that growth in Asia is not solely driven by data center opportunities but includes increases in consumer, communication, and industrial sectors [42][43] Question: Farnell's Future and EBIT Target - Management expressed confidence in Farnell's model returning to double-digit EBIT, despite current challenges [44][45] Question: Market Correction Outlook - Management believes the market correction may last another quarter or two, with expectations for improvement in early 2025 [55] Question: Impact of WT Micro Acquisition - Management refrained from commenting on competitive dynamics but acknowledged the potential for synergies [57] Question: Operating Margin Impact from FX and Mix - Management indicated that FX had a 150 to 200 basis point impact on margins, with a focus on returning to double-digit margins over time [58][59] Question: Guidance for December Quarter - Management anticipates modest regional growth in December, despite typical seasonal declines in Europe [63][64] Question: Inventory Management - Management acknowledged the need to reduce inventory levels while also seizing market opportunities [68][71] Question: End Market Exposure - Management provided rough estimates of end market exposure, indicating a diversified customer base across various sectors [79][80]

Avnet First Quarter Fiscal Year 2025 Financial Results /\VNET October 30, 2024 Safe Harbor Statement This document contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, with respect to the financial condition, results of operations, and business of the Company. You can find many of these statements by looking for words like "believes," "projected", "plans," "expects," "anticipates," ...

Core Insights - Avnet reported $5.6 billion in revenue for the quarter ended September 2024, reflecting a year-over-year decline of 11.6% and an EPS of $0.92 compared to $1.61 a year ago, with a revenue surprise of +3.68% over the Zacks Consensus Estimate of $5.41 billion and an EPS surprise of +8.24% over the consensus estimate of $0.85 [1] Financial Performance Metrics - Sales for Farnell were $347.10 million, below the average estimate of $364.55 million, representing a year-over-year decline of 17.6% [3] - Sales for Electronic Components reached $5.26 billion, exceeding the average estimate of $5.04 billion, with a year-over-year change of -11.1% [3] - Operating income for Electronic Components was $197.40 million, surpassing the estimated $177.78 million [3] - Operating income for Farnell was $1.90 million, significantly lower than the average estimate of $13.23 million [3] - Corporate expenses reported an operating loss of -$30.30 million, slightly worse than the estimated loss of -$29.47 million [3] Stock Performance - Avnet's shares have returned +1.9% over the past month, compared to the Zacks S&P 500 composite's +1.8% change, with a current Zacks Rank of 3 (Hold), indicating potential performance in line with the broader market [4]

Avnet (AVT) came out with quarterly earnings of $0.92 per share, beating the Zacks Consensus Estimate of $0.85 per share. This compares to earnings of $1.61 per share a year ago. These figures are adjusted for nonrecurring items. This quarterly report represents an earnings surprise of 8.24%. A quarter ago, it was expected that this distributor of electronic components would post earnings of $0.95 per share when it actually produced earnings of $1.22, delivering a surprise of 28.42%. Over the last four quar ...

Exhibit 99.1 Avnet Reports First Quarter 2025 Financial Results First quarter sales of $5.6 billion and diluted EPS of $0.66 Adjusted diluted EPS of $0.92 Cash flow from operations of $838 million over past four quarters PHOENIX – October 30, 2024 – Avnet, Inc. (Nasdaq: AVT) today announced results for its first quarter ended September 28, 2024. "In the first quarter, our sales and earnings exceeded the upper end of our guidance range led by a return to growth in our Asia region. We continue to focus on imp ...

Alvotech (NASDAQ: ALVO), a global biotech company specializing in the development and manufacture of biosimilar medicines for patients worldwide, announced today that the European Medicines Agency (EMA) has accepted a Marketing Authorization Application for AVT03, a proposed biosimilar candidate to Prolia® and Xgeva® (denosumab). “EMA acceptance marks an important step towards making AVT03 available to patients and caregivers in Europe,” said Joseph McClellan, Chief Scientific Officer of Alvotech. “Successf ...

The approvals process is anticipated to be completed in the third quarter of 2025 REYKJAVIK, Iceland and LONDON, Aug. 15, 2024 (GLOBE NEWSWIRE) -- Alvotech (NASDAQ: ALVO), a global biotech company specializing in the development and manufacture of biosimilar medicines for patients worldwide and Advanz Pharma, a UK headquartered global pharmaceutical company with a strategic focus on specialty, hospital, and rare disease medicines in Europe, today announced that the European Medicines Agency (EMA) has accept ...

[PART I](index=3&type=section&id=PART%20I) [Item 1. Business](index=3&type=section&id=Item%201.%20Business) Avnet, Inc. is a global electronic component distributor and solutions provider, serving diverse customers across over 140 countries through its Electronic Components (EC) and Farnell operating groups - Avnet, Inc. is a leading global electronic component technology distributor and solutions provider, serving customers in over 140 countries for more than a century[15](index=15&type=chunk) - The company operates through two primary groups: Electronic Components (EC) for high/medium-volume customers and Farnell for lower-volume customers needing quick access to components, tools, and test products, primarily via e-commerce[16](index=16&type=chunk)[18](index=18&type=chunk)[24](index=24&type=chunk) 2024 Net Sales by Product Category | Product Category | % of EC Net Sales (2024) | % of Farnell Net Sales (2024) | | :--------------- | :----------------------- | :---------------------------- | | Semiconductors | ~85% | ~16% | | IP&E Components | ~14% | ~45% | | Computers | ~1% | ~5% (Single-board) | | Other Products | - | ~34% | Consolidated Sales by Major Product Category (Fiscal Years) | Product Category | June 29, 2024 (Millions) | July 1, 2023 (Millions) | July 2, 2022 (Millions) | | :--------------- | :----------------------- | :---------------------- | :---------------------- | | Semiconductors | $19,030.3 | $21,366.5 | $18,380.2 | | IP&E | $3,745.9 | $4,150.6 | $4,639.1 | | Computers | $382.8 | $520.8 | $663.2 | | Other | $598.1 | $499.0 | $628.2 | | **Total Sales** | **$23,757.1** | **$26,536.9** | **$24,310.7** | - As of June 29, 2024, Avnet's global workforce totaled approximately **15,462 employees** across 48 countries, with significant presence in EMEA (**6,494**), Asia (**4,674**), and the Americas (**4,294**)[35](index=35&type=chunk) - The company emphasizes competitive and fair compensation, comprehensive benefits via its THRIVE program, career development, health and safety, and Diversity, Equity, and Inclusion (DEI) initiatives, including a Global DEI Council and Employee Resource Groups[36](index=36&type=chunk)[37](index=37&type=chunk)[38](index=38&type=chunk)[40](index=40&type=chunk)[41](index=41&type=chunk) [Organizational Structure](index=3&type=section&id=Organizational%20Structure) Avnet operates with two primary, globally managed groups: Electronic Components (EC) and Farnell, supported by regional sales and marketing units - Avnet operates with two primary groups: Electronic Components (EC) and Farnell, both having operations in the Americas, EMEA, and Asia/Pacific regions[16](index=16&type=chunk) - Each operating group has its own management and distinct financial reporting, while regional divisions primarily serve as sales and marketing units[16](index=16&type=chunk) [Electronic Components](index=3&type=section&id=Electronic%20Components) The EC group serves high and medium-volume customers, distributing semiconductors and other components with comprehensive lifecycle support for various markets - The EC group primarily serves high and medium-volume customers, distributing semiconductors, IP&E components, and other integrated/embedded components[18](index=18&type=chunk) - EC offers comprehensive support throughout the product lifecycle, including design, supply chain, programming, logistics, and post-sales services for markets like industrial, automotive, defense, and aerospace[18](index=18&type=chunk) EC Net Sales by Product (2024) | Product Category | % of EC Net Sales (2024) | | :--------------- | :----------------------- | | Semiconductor | ~85% | | IP&E Components | ~14% | | Computers | ~1% | [Farnell](index=5&type=section&id=Farnell) Farnell supports lower-volume customers by providing quick access to electronic components, tools, and industrial automation products, primarily through e-commerce - Farnell supports lower-volume customers, providing quick access to electronic components, kits, tools, industrial automation, and test/measurement products, primarily through e-commerce[24](index=24&type=chunk) Farnell Net Sales by Product (2024) | Product Category | % of Farnell Net Sales (2024) | | :---------------------- | :---------------------------- | | Semiconductor | ~16% | | IP&E Components | ~45% | | Single-board computers | ~5% | | Other products/services | ~34% | [Major Products](index=5&type=section&id=Major%20Products) Avnet's competitive strength lies in its broad supplier base, with semiconductors, IP&E, and computers being major product categories contributing to consolidated sales - The breadth and quality of Avnet's supplier base is a competitive strength, with products from one supplier accounting for approximately **10% of consolidated sales** in fiscal years 2024 and 2023[25](index=25&type=chunk) Consolidated Sales by Major Product Category (Fiscal Years) | Product Category | June 29, 2024 (Millions) | July 1, 2023 (Millions) | July 2, 2022 (Millions) | | :--------------- | :----------------------- | :---------------------- | :---------------------- | | Semiconductors | $19,030.3 | $21,366.5 | $18,380.2 | | IP&E | $3,745.9 | $4,150.6 | $4,639.1 | | Computers | $382.8 | $520.8 | $663.2 | | Other | $598.1 | $499.0 | $628.2 | | **Total Sales** | **$23,757.1** | **$26,536.9** | **$24,310.7** | [Competition & Markets](index=7&type=section&id=Competition%20%26%20Markets) The electronic components industry is highly competitive, with key factors including inventory, product selection, pricing, and value-added services - The electronic components industry is highly competitive, with major competitors including Arrow Electronics, Future Electronics, World Peace Group, and WT Microelectronics for EC, and Mouser Electronics, Digi-Key Electronics, and RS Components for Farnell[29](index=29&type=chunk) - Key competitive factors include inventory availability, product selection, pricing, and value-added services like design support, supply chain management, and materials management[30](index=30&type=chunk)[31](index=31&type=chunk) [Seasonality](index=7&type=section&id=Seasonality) Avnet's business is not materially impacted by seasonality, except for geographic sales shifts affecting gross profit and operating income margins - Avnet's business is not materially impacted by seasonality, except for shifts in geographic sales trends from Asia in the first half of a fiscal year to the Americas and EMEA in the second half, affecting gross profit and operating income margins[32](index=32&type=chunk) [Human Capital](index=7&type=section&id=Human%20Capital) Avnet's global workforce of approximately 15,462 employees is supported by competitive compensation, comprehensive benefits, career development, and strong DEI initiatives - As of June 29, 2024, Avnet's global workforce comprised approximately **15,462 employees** across 48 countries, with **4,294** in the Americas, **6,494** in EMEA, and **4,674** in Asia[35](index=35&type=chunk) - The company focuses on competitive and fair compensation, comprehensive benefits through its THRIVE program, career development, health and safety, and Diversity, Equity, and Inclusion (DEI) initiatives[36](index=36&type=chunk)[37](index=37&type=chunk)[38](index=38&type=chunk)[40](index=40&type=chunk) - DEI efforts are overseen by a Global DEI Council, and the Board of Directors was **30% women** and **50% racially/ethnically diverse** as of June 29, 2024. Executive incentive compensation includes DEI performance goals[40](index=40&type=chunk) - Employee engagement is measured through regular global surveys, achieving a **71.6% participation rate** in fiscal 2024, an increase from fiscal 2023[42](index=42&type=chunk) [Available Information](index=11&type=section&id=Available%20Information) Avnet's financial reports, proxy statements, and corporate governance documents are publicly available through the SEC and the company's investor relations website - Avnet files its annual, quarterly, and current reports, proxy statements, and other documents with the U.S. Securities and Exchange Commission (SEC), available on the SEC's website and Nasdaq[43](index=43&type=chunk) - Company filings and corporate governance information, including Corporate Governance Guidelines, Code of Conduct, and Board committee charters, are also available on Avnet's investor relations website[43](index=43&type=chunk)[44](index=44&type=chunk) [Item 1A. Risk Factors](index=13&type=section&id=Item%201A.%20Risk%20Factors) Avnet faces diverse risks including business and operational challenges, international uncertainties, financial constraints, and threats to information systems and data security - Forward-looking statements are subject to numerous assumptions, risks, and uncertainties, and actual results could differ materially from expectations[46](index=46&type=chunk) - Business and operations risks include changes in customer needs and consumption models (e.g., AI technology), semiconductor industry fluctuations, geopolitical uncertainty leading to shortages, and potential disruptions to key supplier and customer relationships[48](index=48&type=chunk)[49](index=49&type=chunk)[50](index=50&type=chunk)[51](index=51&type=chunk) Semiconductor Sales as % of Consolidated Sales | Fiscal Year | % of Consolidated Sales | | :---------- | :---------------------- | | 2024 | ~80% | | 2023 | ~81% | | 2022 | ~76% | - International operations, accounting for approximately **77% of sales in fiscal 2024**, are subject to risks like fund repatriation restrictions, foreign currency fluctuations, non-compliance with various international laws, trade restrictions, and economic/political instability[54](index=54&type=chunk)[55](index=55&type=chunk)[56](index=56&type=chunk)[59](index=59&type=chunk) - Financial risks include inventory value declines due to technological change or oversupply, accounts receivable defaults, liquidity and capital resource constraints, and limitations imposed by financing covenants[66](index=66&type=chunk)[70](index=70&type=chunk)[71](index=71&type=chunk)[74](index=74&type=chunk) - General risks encompass negative impacts from economic or geopolitical uncertainty (e.g., military conflicts, inflation), intense competition, and challenges in employee retention and hiring[89](index=89&type=chunk)[91](index=91&type=chunk)[94](index=94&type=chunk)[96](index=96&type=chunk) [Forward-Looking Statements and Risk Factors](index=13&type=section&id=Forward-Looking%20Statements%20and%20Risk%20Factors) The report contains forward-looking statements subject to numerous assumptions, risks, and uncertainties, with no obligation for the company to update them unless legally required - The report contains forward-looking statements subject to numerous assumptions, risks, and uncertainties, and actual results may differ materially from those expressed or implied[46](index=46&type=chunk) - The company does not undertake to update forward-looking statements, except as required by law[46](index=46&type=chunk) [Business and Operations Risks](index=15&type=section&id=Business%20and%20Operations%20Risks) Risks include changes in customer demand, semiconductor industry cycles, supply chain disruptions, and reliance on key supplier relationships impacting financial results - Changes in customer product demands, consumption models, and technology (e.g., AI) could negatively impact billings and financial results[48](index=48&type=chunk) - The semiconductor industry's cyclical fluctuations, geopolitical uncertainties, and supply chain challenges can lead to product shortages, extended lead times, and order cancellations[49](index=49&type=chunk) Semiconductor Sales as % of Consolidated Sales | Fiscal Year | % of Consolidated Sales | | :---------- | :---------------------- | | 2024 | ~80% | | 2023 | ~81% | | 2022 | ~76% | - Disruptions to key supplier relationships, including termination of agreements or changes in contract terms (e.g., price protection, return rights), could adversely affect the company's business and profitability[50](index=50&type=chunk)[51](index=51&type=chunk) [Risks related to international operations](index=17&type=section&id=Risks%20related%20to%20international%20operations) International operations face risks from fund repatriation restrictions, currency fluctuations, regulatory non-compliance, trade restrictions, and geopolitical instability Sales from Operations Outside the United States | Fiscal Year | % of Total Sales | | :---------- | :--------------- | | 2024 | ~77% | | 2023 | ~76% | | 2022 | ~77% | - Risks include restrictions on repatriating funds, foreign currency and interest rate fluctuations, non-compliance with various foreign regulations (data privacy, anti-corruption, import/export), and economic/political instability[54](index=54&type=chunk)[55](index=55&type=chunk)[59](index=59&type=chunk) - Tariffs, trade restrictions, and sanctions (e.g., related to China, Hong Kong, Russia-Ukraine conflict) could lead to losses, increased costs, material shortages, and higher operational expenses[56](index=56&type=chunk)[58](index=58&type=chunk) [Internal information systems failures](index=19&type=section&id=Internal%20information%20systems%20failures) Failures or difficulties in upgrading internal information systems could adversely affect global operations, internal controls, financial reporting, and online sales attractiveness - The company relies on multiple information systems for global operations, and failures or difficulties in upgrading these systems could adversely affect business, internal controls, and financial reporting[60](index=60&type=chunk) - System interruptions and delays, especially for online sales, could reduce the attractiveness of products and services[61](index=61&type=chunk) [Logistics disruptions](index=19&type=section&id=Logistics%20disruptions) Major interruptions at distribution centers or from third-party transportation providers could lead to delays, increased expenses, and negative impacts on business and reputation - Major interruptions at distribution centers or disruptions from third-party transportation providers could cause delays, increased expenses, and adverse impacts on business, operations, and reputation[62](index=62&type=chunk) [Data security and privacy threats](index=21&type=section&id=Data%20security%20and%20privacy%20threats) Increasingly sophisticated cybersecurity threats and non-compliance with data privacy laws pose significant liability, reputational harm, and adverse financial effects - Increasingly frequent and sophisticated cybersecurity threats (e.g., phishing, ransomware, AI-driven attacks) pose significant potential liability and reputational harm, despite implemented security controls[64](index=64&type=chunk)[65](index=65&type=chunk) - Failure to comply with cybersecurity, data privacy, and data protection laws could lead to fines, litigation, and adverse effects on business and financial condition[65](index=65&type=chunk) [Financial Risks](index=21&type=section&id=Financial%20Risks) Financial risks include inventory value declines, accounts receivable defaults, liquidity constraints, financing covenant restrictions, and changes in tax laws - Inventory value declines due to technological change, new products, decreased demand, or oversupply pose a risk, despite supplier protections which may not fully compensate for losses[66](index=66&type=chunk)[69](index=69&type=chunk) - Accounts receivable defaults, especially during economic downturns, could adversely affect the company's business, operating results, financial condition, or liquidity[70](index=70&type=chunk) - Liquidity and capital resources constraints, including reliance on external financing, are subject to market conditions, interest rate fluctuations, and debt ratings, potentially leading to higher financing costs or reduced access to capital[71](index=71&type=chunk)[72](index=72&type=chunk)[73](index=73&type=chunk) - Financing covenants and restrictions in credit facilities and indentures limit the company's ability to grant liens, make restricted payments (e.g., dividends, share repurchases), incur additional debt, or engage in certain transactions[74](index=74&type=chunk)[75](index=75&type=chunk) - Changes in tax laws and regulations, including the OECD's Base Erosion and Profit Shifting Project (Pillar Two), could adversely affect cash flow, share buyback costs, and the effective tax rate, with Pillar Two expected to impact taxes in fiscal year 2025[76](index=76&type=chunk)[77](index=77&type=chunk)[78](index=78&type=chunk) - Constraints on internal controls, due to human error or circumvention, could lead to material misstatements, harm the company's brand, and result in sanctions or investigations[79](index=79&type=chunk)[81](index=81&type=chunk) - Strategic acquisitions and investments involve risks such as integration difficulties, unexpected costs, and diversion of management attention, potentially impacting profitability[82](index=82&type=chunk) [Legal and Regulatory Risks](index=27&type=section&id=Legal%20and%20Regulatory%20Risks) Legal proceedings and non-compliance with environmental regulations could result in substantial costs, management distraction, and adverse effects on operations and reputation - Legal proceedings, including intellectual property, commercial, and product liability matters, could result in substantial costs, diversion of management efforts, and adverse effects on operations and reputation[83](index=83&type=chunk)[86](index=86&type=chunk) - Non-compliance with environmental regulations, which may impose liability without fault, could lead to substantial costs, fines, civil/criminal sanctions, and reputational harm[87](index=87&type=chunk)[88](index=88&type=chunk) [General Risk Factors](index=29&type=section&id=General%20Risk%20Factors) General risks include economic and geopolitical uncertainty, inflation, intense competition, and challenges in attracting and retaining qualified employees - Economic or geopolitical uncertainty and health crises can lead to decreased sales, margins, and earnings, increased logistics costs, demand uncertainty, and global supply chain disruptions[89](index=89&type=chunk) - Inflation could affect profitability and cash flows due to higher wages, operating expenses, financing costs, and supplier prices, which may not be passed on to customers[91](index=91&type=chunk)[92](index=92&type=chunk) - Intense competition, including from new competitors and direct sales efforts by suppliers, could cause deterioration of gross profit margins and overall profitability[94](index=94&type=chunk)[95](index=95&type=chunk) - Challenges in identifying, hiring, training, developing, and retaining qualified employees, exacerbated by immigration restrictions and workforce trends, are critical to the company's success[96](index=96&type=chunk) [Item 1B. Unresolved Staff Comments](index=31&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) This item is not applicable to the company - The company has no unresolved staff comments to report[97](index=97&type=chunk) [Item 1C. Cybersecurity](index=31&type=section&id=Item%201C.%20Cybersecurity) Avnet's comprehensive cybersecurity program, managed by the GC&C team, aligns with NIST and ISO27001 frameworks, includes third-party risk oversight, and is regularly updated to the Audit Committee - Avnet's Global Cybersecurity & Compliance (GC&C) team manages a comprehensive cybersecurity program, aligning with NIST Cyber Security Framework and ISO27001 standards[98](index=98&type=chunk)[99](index=99&type=chunk)[101](index=101&type=chunk) - The program includes policies for safe data processing, storage, and transmission, and oversees third-party service provider cybersecurity risks through evaluations and certifications[98](index=98&type=chunk)[101](index=101&type=chunk) - The Audit Committee receives quarterly updates on the cybersecurity program, incidents, and threat landscape, with management providing updates to the senior executive team[101](index=101&type=chunk)[102](index=102&type=chunk) - Regular security testing includes external penetration tests and maturity assessments, quarterly self-assessments, and ongoing internal audits. Employee training covers annual tabletop exercises, biennial computer-based training, and monthly phishing simulations[103](index=103&type=chunk) [Item 2. Properties](index=35&type=section&id=Item%202.%20Properties) Avnet owns approximately 2.0 million square feet and leases 4.0 million square feet globally, with key facilities supporting warehousing, value-added operations, and corporate functions - Avnet owns approximately **2.0 million square feet** and leases approximately **4.0 million square feet** of space, with about **25%** located in the United States[105](index=105&type=chunk) Key Facilities and Primary Use | Location | Footage (Approximate) | Ownership | Primary Use | | :------------------- | :-------------------- | :-------- | :----------------------------------------------- | | Bernburg, Germany | 680,000 | Owned | EC warehousing and value-added operations | | Chandler, Arizona | 400,000 | Owned | EC warehousing and value-added operations | | Tongeren, Belgium | 390,000 | Owned | EC warehousing and value-added operations | | Leeds, United Kingdom| 360,000 | Leased | Farnell warehousing and value-added operations | | Poing, Germany | 300,000 | Owned | EC warehousing and value-added operations | | Chandler, Arizona | 230,000 | Leased | EC warehousing, integration, value-added operations | | Gaffney, South Carolina| 220,000 | Owned | Farnell warehousing | | Hong Kong, China | 210,000 | Leased | EC warehousing | | Phoenix, Arizona | 180,000 | Leased | Corporate and EC Americas headquarters | | Taipei, Taiwan | 33,000 | Leased | EC warehousing | [Item 3. Legal Proceedings](index=35&type=section&id=Item%203.%20Legal%20Proceedings) Avnet regularly assesses legal and environmental matters, concluding no specific public disclosure is required, with appropriate accruals made for estimable costs - Avnet regularly assesses legal proceedings and environmental matters, concluding that no specific pending legal proceeding requires public disclosure[108](index=108&type=chunk) - Management believes that estimable costs for environmental and other legal proceedings have been appropriately accrued in the consolidated financial statements[108](index=108&type=chunk) - Resolution of current legal matters is not expected to materially affect financial position or liquidity, but could be material to results of operations in any single reporting period[109](index=109&type=chunk) [Item 4. Mine Safety Disclosures](index=36&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - The company has no mine safety disclosures to report[110](index=110&type=chunk) [PART II](index=37&type=section&id=PART%20II) [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=37&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Avnet's common stock trades on Nasdaq, with future dividends determined by the Board, and the company repurchased $162.7 million of common stock in fiscal 2024 under its $600 million plan - Avnet's common stock is listed on the Nasdaq Global Select Market under the symbol AVT[111](index=111&type=chunk) - Future dividends are at the discretion of the Board of Directors, dependent on financial condition, results of operations, and capital requirements, and may be restricted by debt facilities[111](index=111&type=chunk) - As of August 2, 2024, there were **1,309 registered holders** of Avnet's common stock[112](index=112&type=chunk) Issuer Purchases of Equity Securities (Q4 Fiscal 2024) | Period | Total Shares Purchased | Average Price Paid per Share | Value Remaining Under Plan | | :--------------------- | :--------------------- | :--------------------------- | :------------------------- | | March 31 – April 27 | — | — | $232,484,000 | | April 28 – May 25 | 560,000 | $53.17 | $202,707,000 | | May 26 – June 29 | 920,000 | $53.23 | $153,734,000 | - The company repurchased **$162.7 million** of common stock in fiscal 2024 under a **$600 million** share repurchase plan, with **$153.7 million** remaining as of June 29, 2024[116](index=116&type=chunk)[149](index=149&type=chunk)[165](index=165&type=chunk) [Market Information](index=37&type=section&id=Market%20Information) Avnet's common stock is publicly traded on the Nasdaq Global Select Market under the ticker symbol AVT - Avnet's common stock is traded on the Nasdaq Global Select Market under the symbol AVT[111](index=111&type=chunk) [Dividends](index=37&type=section&id=Dividends) Future dividends are at the Board of Directors' discretion, based on financial performance, capital needs, and potential restrictions from debt facilities - Future dividends are subject to the Board of Directors' discretion, based on financial condition, results, capital requirements, and debt facility restrictions[111](index=111&type=chunk) [Record Holders](index=37&type=section&id=Record%20Holders) As of August 2, 2024, there were 1,309 registered holders of Avnet's common stock - As of August 2, 2024, there were **1,309 registered holders** of Avnet's common stock[112](index=112&type=chunk) [Stock Performance Graphs and Cumulative Total Returns](index=37&type=section&id=Stock%20Performance%20Graphs%20and%20Cumulative%20Total%20Returns) The report provides a 5-year cumulative total return comparison of Avnet's stock against the Nasdaq Composite Index and a customized peer group - The report includes a graph comparing Avnet's 5-year cumulative total return against the Nasdaq Composite Index and a customized peer group (Agilysys Inc., Arrow Electronics Inc., Insight Enterprises Inc., Scansource Inc., and TD Synnex Corporation)[112](index=112&type=chunk) Cumulative 5-Year Total Return (Indexed to $100 on 6/29/2019) | Date | Avnet, Inc. | Nasdaq Composite | Peer Group | | :--------- | :---------- | :--------------- | :--------- | | 6/29/2019 | $100 | $100 | $100 | | 6/27/2020 | $58.93 | $123.12 | $97.85 | | 7/3/2021 | $92.88 | $186.10 | $195.13 | | 7/2/2022 | $100.49 | $142.44 | $173.37 | | 7/1/2023 | $123.19 | $178.08 | $213.64 | | 6/29/2024 | $128.95 | $230.80 | $248.09 | [Issuer Purchases of Equity Securities](index=38&type=section&id=Issuer%20Purchases%20of%20Equity%20Securities) The Board approved a $600 million share repurchase plan, under which the company bought back $162.7 million of common stock in fiscal 2024 - The Board of Directors approved a share repurchase plan of up to **$600 million** of common stock[116](index=116&type=chunk) Issuer Purchases of Equity Securities (Q4 Fiscal 2024) | Period | Total Shares Purchased | Average Price Paid per Share | Value Remaining Under Plan | | :--------------------- | :--------------------- | :--------------------------- | :------------------------- | | March 31 – April 27 | — | — | $232,484,000 | | April 28 – May 25 | 560,000 | $53.17 | $202,707,000 | | May 26 – June 29 | 920,000 | $53.23 | $153,734,000 | - During fiscal 2024, the company repurchased **$162.7 million** of common stock under the plan[149](index=149&type=chunk) [Item 6. [Reserved]](index=39&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and contains no information [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=39&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Avnet's fiscal 2024 saw a 10.5% sales decrease to $23.76 billion and a 35.3% net income drop to $498.7 million due to market downturns, offset by improved operating cash flow of $690.0 million from working capital reductions - The global electronic components market experienced a downturn in the second half of calendar year 2023, marked by decreased sales due to elevated customer inventory and lower underlying demand[125](index=125&type=chunk) Key Financial Highlights (Fiscal Years) | Metric | June 29, 2024 (Millions) | July 1, 2023 (Millions) | Variance ($) | Variance (%) | | :--------------------------- | :----------------------- | :---------------------- | :----------- | :----------- | | Sales | $23,757 | $26,537 | $(2,780) | (10.5)% | | Gross profit | $2,766 | $3,182 | $(416) | (13.1)% | | Operating income | $844 | $1,187 | $(342) | (28.9)% | | Adjusted operating income | $900 | $1,221 | $(321) | (26.3)% | | Net income | $499 | $771 | $(272) | (35.3)% | | Diluted earnings per share | $5.43 | $8.26 | $(2.83) | (34.3)% | | Gross profit margin | 11.6% | 12.0% | (35)bps | (0.4)% | | Operating income margin | 3.6% | 4.5% | (92)bps | (0.9)% | | Adjusted operating income margin | 3.8% | 4.6% | (81)bps | (0.8)% | - Sales for fiscal 2024 decreased by **10.5% to $23.76 billion**, primarily due to reduced sales volume from the market downturn and an unfavorable product mix of lower-priced electronic components[129](index=129&type=chunk) - Net cash provided by operating activities significantly increased to **$690.0 million** in fiscal 2024 from a net cash use of **$713.7 million** in fiscal 2023, driven by improvements in working capital[148](index=148&type=chunk) - The company repaid **$156.5 million** in debt during fiscal 2024 and repurchased **$162.7 million** of common stock[149](index=149&type=chunk) [Industry outlook](index=41&type=section&id=Industry%20outlook) The global electronic components market is experiencing a downturn since mid-2023 due to elevated customer inventory and decreased demand, impacting future sales and earnings - The global electronic components market is experiencing a downturn since the second half of calendar year 2023, characterized by decreased sales due to elevated customer inventory and lower demand[125](index=125&type=chunk) - The company expects sales in the first quarter of fiscal 2025 to be flat to **5% lower** than the fourth quarter of fiscal 2024, negatively impacting operating income and diluted EPS[125](index=125&type=chunk) [Sales](index=41&type=section&id=Sales) Fiscal 2024 sales decreased by 10.5% to $23.76 billion, driven by reduced volumes across all regions and an unfavorable product mix in both EC and Farnell segments Sales Performance (Fiscal 2024 vs. 2023) | Metric | June 29, 2024 (Millions) | July 1, 2023 (Millions) | Variance ($) | Variance (%) | Constant Currency Change (%) | | :----- | :----------------------- | :---------------------- | :----------- | :----------- | :--------------------------- | | Total | $23,757.1 | $26,536.9 | $(2,780) | (10.5)% | (10.9)% | Sales by Operating Group (Fiscal 2024 vs. 2023) | Operating Group | June 29, 2024 (Millions) | % of Total | July 1, 2023 (Millions) | % of Total | Year-Year % Change | Constant Currency Change (%) | | :-------------- | :----------------------- | :--------- | :---------------------- | :--------- | :----------------- | :--------------------------- | | EC | $22,160.0 | 93.3% | $24,802.6 | 93.5% | (10.7)% | (11.0)% | | Farnell | $1,597.1 | 6.7% | $1,734.3 | 6.5% | (7.9)% | (9.3)% | Sales by Geographic Region (Fiscal 2024 vs. 2023) | Geographic Region | June 29, 2024 (Millions) | % of Total | July 1, 2023 (Millions) | % of Total | Year-Year % Change | Constant Currency Change (%) | | :---------------- | :----------------------- | :--------- | :---------------------- | :--------- | :----------------- | :--------------------------- | | Americas | $5,919.2 | 24.9% | $6,807.7 | 25.7% | (13.1)% | (13.1)% | | EMEA | $8,395.0 | 35.3% | $9,229.4 | 34.8% | (9.0)% | (11.4)% | | Asia | $9,442.9 | 39.8% | $10,499.8 | 39.5% | (10.1)% | (9.0)% | - EC sales decreased **10.7%** (**11.0% in constant currency**) due to sales volume decreases across all regions and an unfavorable product mix. Farnell sales decreased **7.9%** due to lower demand, partially offset by increased demand for single-board computers[130](index=130&type=chunk) [Gross Profit](index=42&type=section&id=Gross%20Profit) Gross profit and margin decreased primarily due to lower sales volumes and a product mix shift towards lower-margin electronic components across both operating groups Gross Profit Performance (Fiscal 2024 vs. 2023) | Metric | June 29, 2024 (Millions) | July 1, 2023 (Millions) | Variance ($) | Variance (%) | | :---------------- | :----------------------- | :---------------------- | :----------- | :----------- | | Gross profit | $2,766.4 | $3,182.1 | $(415.7) | (13.1)% | | Gross profit margin | 11.6% | 12.0% | (35)bps | (0.4)% | - The decrease in gross profit and margin was primarily due to lower sales volumes and an increase in product mix towards lower-margin electronic components[131](index=131&type=chunk)[132](index=132&type=chunk) - EC gross profit margin decreased due to a shift to lower-margin components, while Farnell's margin decreased due to lower sales of higher-margin components and the unwinding of component shortage pricing premiums[134](index=134&type=chunk) [Selling, General and Administrative Expenses](index=44&type=section&id=Selling%2C%20General%20and%20Administrative%20Expenses) SG&A expenses decreased due to lower variable operating costs and restructuring actions, but increased as a percentage of sales and gross profit, indicating reduced operating leverage SG&A Expenses Performance (Fiscal 2024 vs. 2023) | Metric | June 29, 2024 (Millions) | July 1, 2023 (Millions) | Variance ($) | Variance (%) | | :----------------------------------- | :----------------------- | :---------------------- | :----------- | :----------- | | Selling, general and administrative expenses | $1,869.5 | $1,967.3 | $(97.8) | (5.0)% | | SG&A as % of sales | 7.9% | 7.4% | +0.5% | | | SG&A as % of gross profit | 67.6% | 61.8% | +5.8% | | - The decrease in SG&A expenses was primarily due to lower variable operating expenses associated with decreased sales volumes and restructuring actions, partially offset by inflation and foreign currency impacts[135](index=135&type=chunk) - SG&A as a percentage of sales and gross profit increased due to lower sales and gross profit without a proportional reduction in SG&A, indicating lower operating leverage[136](index=136&type=chunk) [Restructuring, Integration and Other Expenses](index=44&type=section&id=Restructuring%2C%20Integration%20and%20Other%20Expenses) In fiscal 2024, the company incurred $52.55 million in restructuring and integration expenses, including severance for approximately 600 employees, targeting $110 million in annual cost reductions Restructuring, Integration and Other Expenses (Fiscal Years) | Expense Category | June 29, 2024 (Millions) | July 1, 2023 (Millions) | | :----------------------------------- | :----------------------- | :---------------------- | | Restructuring, integration, and other expenses | $52.55 | $28.04 | - In fiscal 2024, the company recorded **$39.5 million** in restructuring costs, primarily for severance related to a reduction of approximately **600 employees**, aiming for **$110 million** in annual expense reductions across Farnell, EC, and corporate[137](index=137&type=chunk)[343](index=343&type=chunk) - Integration expenses of **$13.1 million** related to warehouse consolidation, and other expenses of **$5.5 million** were for potential M&A activity. A **$5.5 million** benefit was recorded for environmental remediation reserves[137](index=137&type=chunk) [Operating Income](index=44&type=section&id=Operating%20Income) Operating income and margin decreased significantly due to lower gross profit, a disproportionate SG&A reduction, and higher restructuring and integration expenses Operating Income Performance (Fiscal 2024 vs. 2023) | Metric | June 29, 2024 (Millions) | July 1, 2023 (Millions) | Variance ($) | Variance (%) | | :--------------------------- | :----------------------- | :---------------------- | :----------- | :----------- | | Operating income | $844.4 | $1,186.8 | $(342.4) | (28.9)% | | Operating income margin | 3.6% | 4.5% | (92)bps | (0.9)% | | Adjusted operating income | $900.0 | $1,220.9 | $(320.8) | (26.3)% | | Adjusted operating income margin | 3.8% | 4.6% | (81)bps | (0.8)% | - The decrease in operating income and margin was primarily due to lower gross profit from reduced sales and an unfavorable gross margin, without a proportionate decrease in SG&A expenses, and higher restructuring/integration expenses[141](index=141&type=chunk) - EC operating income decreased **19.7% to $947.6 million**, and Farnell operating income decreased **60.8% to $64.8 million**, both due to lower sales and gross margin without proportional SG&A reductions[142](index=142&type=chunk) [Interest and Other Financing Expenses, Net and Other (Expense) Income, Net](index=46&type=section&id=Interest%20and%20Other%20Financing%20Expenses%2C%20Net%20and%20Other%20%28Expense%29%20Income%2C%20Net) Interest and other financing expenses increased due to higher borrowings and rates, while other income shifted to an expense primarily from foreign currency translation losses Interest and Other Financing Expenses, Net (Fiscal Years) | Metric | June 29, 2024 (Millions) | July 1, 2023 (Millions) | Variance ($) | Variance (%) | | :--------------------------------------- | :----------------------- | :---------------------- | :----------- | :----------- | | Interest and other financing expenses, net | $282.9 | $250.9 | $32.0 | 12.8% | - The increase in interest and other financing expenses was due to higher outstanding borrowings and increased average borrowing rates[143](index=143&type=chunk) Other (Expense) Income, Net (Fiscal Years) | Metric | June 29, 2024 (Millions) | July 1, 2023 (Millions) | Variance ($) | Variance (%) | | :------------------------- | :----------------------- | :---------------------- | :----------- | :----------- | | Other (expense) income, net | $(15.7) | $9.9 | $(25.6) | (258.8)% | - The shift to other expenses was primarily due to foreign currency translation losses[143](index=143&type=chunk) [Gain on Legal Settlements and Other](index=46&type=section&id=Gain%20on%20Legal%20Settlements%20and%20Other) The company recorded significant gains from capacitor manufacturer settlements in fiscal 2024 and 2023, with a non-cash pension settlement expense in fiscal 2023 Gain on Legal Settlements and Other (Fiscal Years) | Metric | June 29, 2024 (Millions) | July 1, 2023 (Millions) | Variance ($) | Variance (%) | | :------------------------------- | :----------------------- | :---------------------- | :----------- | :----------- | | Gain on legal settlements and other | $86.5 | $37.0 | $49.5 | 133.5% | - The company recorded gains of **$86.5 million** in fiscal 2024 and **$74.4 million** in fiscal 2023 from settlements of claims against capacitor manufacturers[144](index=144&type=chunk)[328](index=328&type=chunk) - In fiscal 2023, a non-cash settlement expense of **$37.4 million** was recognized related to a pension liability de-risking strategy[144](index=144&type=chunk) [Income Tax](index=46&type=section&id=Income%20Tax) Income tax expense decreased due to lower pre-tax income, and the effective tax rate slightly declined due to a favorable income mix in lower tax foreign jurisdictions Income Tax Expense and Effective Tax Rate (Fiscal Years) | Metric | June 29, 2024 (Millions) | July 1, 2023 (Millions) | Variance ($) | Variance (%) | | :------------------- | :----------------------- | :---------------------- | :----------- | :----------- | | Income tax expense | $133.6 | $212.0 | $(78.4) | (37.0)% | | Effective tax rate | 21.1% | 21.6% | (45)bps | (0.5)% | - The decrease in the effective tax rate was primarily due to the mix of income in lower tax foreign jurisdictions, partially offset by increases to unrecognized tax benefit reserves[145](index=145&type=chunk) [Net Income](index=46&type=section&id=Net%20Income) Net income and diluted earnings per share significantly decreased in fiscal 2024, reflecting the overall market downturn and reduced profitability Net Income and Diluted EPS (Fiscal Years) | Metric | June 29, 2024 (Millions) | July 1, 2023 (Millions) | Variance ($) | Variance (%) | | :------------------------- | :----------------------- | :---------------------- | :----------- | :----------- | | Net income | $498.7 | $770.8 | $(272.1) | (35.3)% | | Diluted earnings per share | $5.43 | $8.26 | $(2.83) | (34.3)% | [Liquidity and Capital Resources](index=48&type=section&id=Liquidity%20and%20Capital%20Resources) Operating cash flow significantly improved to $690.0 million in fiscal 2024, driven by working capital improvements, enabling debt repayments and share repurchases while maintaining strong compliance with financing covenants - Net cash provided by operating activities increased by **$1.40 billion** year-over-year to **$690.0 million** in fiscal 2024, primarily due to improvements in cash used for working capital[148](index=148&type=chunk) - The company made net debt repayments of **$156.5 million** and repurchased **$162.7 million** of common stock in fiscal 2024[149](index=149&type=chunk) - Avnet uses diverse financing arrangements, including public debt, bank loans, a revolving credit facility, and an accounts receivable securitization program, to fund operations and manage costs[151](index=151&type=chunk) - As of June 29, 2024, the company was in compliance with all covenants under its Credit Facility and Securitization Program, which include limitations on debt, share repurchases, dividends, and a required leverage ratio[155](index=155&type=chunk)[156](index=156&type=chunk) Cash and Cash Equivalents (Fiscal Year End) | Metric | June 29, 2024 (Millions) | July 1, 2023 (Millions) | | :---------------------- | :----------------------- | :---------------------- | | Total Cash & Equivalents | $310.9 | $288.2 | | Held outside U.S. | $179.6 | $194.5 | - Combined availability under the Credit Facility and Securitization Program was **$844.5 million** as of June 29, 2024[161](index=161&type=chunk) Contractual Obligations as of June 29, 2024 (Millions) | Contractual Obligations | Total | Less than 1 year | 1-3 years | 3-5 years | More than 5 years | | :--------------------------- | :--------- | :--------------- | :-------- | :-------- | :---------------- | | Long-term debt obligations | $2,910.9 | $492.7 | $550.0 | $1,245.5 | $622.7 | | Interest expense on long-term debt | $493.9 | $134.9 | $211.0 | $78.2 | $69.8 | | Operating lease obligations | $266.8 | $60.0 | $81.0 | $41.8 | $84.0 | [Critical Accounting Policies](index=54&type=section&id=Critical%20Accounting%20Policies) Avnet's critical accounting policies involve significant judgments and estimates, particularly concerning inventory valuation and the complex accounting for income taxes - Avnet's critical accounting policies involve significant judgments and estimates, particularly for the valuation of inventories and accounting for income taxes[169](index=169&type=chunk) - Inventories are recorded at the lower of cost or estimated net realizable value, with regular evaluations for demand, obsolescence, and market prices, considering supplier protections[170](index=170&type=chunk)[171](index=171&type=chunk) - Accounting for income taxes requires judgment in determining tax expense, unrecognized tax benefit liabilities, deferred tax assets/liabilities, and valuation allowances, based on future taxable income and tax planning strategies[172](index=172&type=chunk)[173](index=173&type=chunk)[176](index=176&type=chunk) [Recently Issued Accounting Pronouncements](index=56&type=section&id=Recently%20Issued%20Accounting%20Pronouncements) New accounting standards, ASU No. 2023-09 (Income Taxes) and ASU No. 2023-07 (Segment Reporting), will enhance disclosures and improve segment reporting in future fiscal years - ASU No. 2023-09 (Income Taxes) will be effective for the company in fiscal year 2026, requiring enhanced tax disclosures[177](index=177&type=chunk) - ASU No. 2023-07 (Segment Reporting) will be effective for the company in fiscal year 2025, improving segment disclosure requirements[178](index=178&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=56&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Avnet manages interest rate and foreign currency exchange rate risks through financial arrangements, including economic hedges and short-term forward contracts, maintaining a mix of fixed and floating rate debt - Avnet uses financial arrangements, including economic hedges, to reduce earnings and cash flow volatility from changes in interest rates and foreign currency exchange rates[179](index=179&type=chunk)[184](index=184&type=chunk) Scheduled Debt Maturities as of June 29, 2024 (Millions) | Liabilities | 2025 | 2026 | 2027 | 2028 | 2029 | Thereafter | Total | | :---------------- | :----- | :----- | :--- | :----- | :--- | :--------- | :--------- | | Fixed rate debt | $2.7 | $550.0 | $— | $500.0 | $— | $622.7 | $1,675.4 | | Floating rate debt| $490.0 | $— | $— | $745.5 | $— | $— | $1,235.5 | Debt Carrying and Fair Values with Average Interest Rates (Millions) | Liabilities | Carrying Value (June 29, 2024) | Fair Value (June 29, 2024) | Average Interest Rate (June 29, 2024) | | :---------------- | :----------------------------- | :------------------------- | :------------------------------------ | | Fixed rate debt | $1,675.4 | $1,621.1 | 5.0% | | Floating rate debt| $1,235.5 | $1,235.5 | 5.5% | - Foreign currency exposure is managed through natural hedging and derivative financial instruments, primarily forward foreign currency exchange contracts with maturities typically less than 60 days[184](index=184&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=59&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents Avnet's consolidated financial statements for fiscal years 2024, 2023, and 2022, with an unqualified opinion from KPMG LLP on both financial statements and internal control effectiveness - The section includes Avnet's Consolidated Financial Statements: Balance Sheets, Statements of Operations, Comprehensive Income, Shareholders' Equity, and Cash Flows for fiscal years 2024, 2023, and 2022[187](index=187&type=chunk) - KPMG LLP, the independent registered public accounting firm, issued an unqualified opinion on the consolidated financial statements and the effectiveness of internal control over financial reporting as of June 29, 2024[188](index=188&type=chunk)[189](index=189&type=chunk) - The critical audit matter identified was the evaluation of accounting for income taxes, requiring complex auditor judgment and specialized tax professionals[197](index=197&type=chunk)[198](index=198&type=chunk) [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=67&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) There have been no changes in or disagreements with accountants on accounting and financial disclosure - The company reports no changes in or disagreements with accountants on accounting and financial disclosure[347](index=347&type=chunk) [Item 9A. Controls and Procedures](index=67&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that disclosure controls and internal control over financial reporting were effective as of June 29, 2024, with no material changes in Q4 fiscal 2024 - The CEO and CFO concluded that Avnet's disclosure controls and procedures were effective as of June 29, 2024[348](index=348&type=chunk) - Management assessed and concluded that the company maintained effective internal control over financial reporting as of June 29, 2024, based on the 2013 COSO framework[349](index=349&type=chunk) - KPMG LLP audited and confirmed the effectiveness of the company's internal controls over financial reporting[350](index=350&type=chunk) - No material changes to internal control over financial reporting occurred during the fourth quarter of fiscal 2024[351](index=351&type=chunk) [Item 9B. Other Information](index=67&type=section&id=Item%209B.%20Other%20Information) No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the three months ended June 29, 2024 - No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the three months ended June 29, 2024[352](index=352&type=chunk) [Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=67&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to the company - The company has no disclosures regarding foreign jurisdictions that prevent inspections[352](index=352&type=chunk) [PART III](index=106&type=section&id=PART%20III) [Item 10. Directors, Executive Officers and Corporate Governance](index=106&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance, including the updated Insider Trading Policy, is incorporated by reference from the November 22, 2024, proxy statement - Information for this item is incorporated by reference from the company's definitive proxy statement for the Annual Meeting of Stockholders on November 22, 2024[353](index=353&type=chunk) - The company has an Insider Trading Policy, updated as of June 1, 2024, designed to ensure compliance with insider trading laws and exchange listing standards[353](index=353&type=chunk) [Item 11. Executive Compensation](index=106&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation is incorporated by reference from the company's definitive proxy statement for the Annual Meeting of Stockholders on November 22, 2024 - Information for this item is incorporated by reference from the company's definitive proxy statement for the Annual Meeting of Stockholders on November 22, 2024[354](index=354&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=106&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information on security ownership of beneficial owners and management is incorporated by reference from the company's definitive proxy statement for the Annual Meeting of Stockholders on November 22, 2024 - Information for this item is incorporated by reference from the company's definitive proxy statement for the Annual Meeting of Stockholders on November 22, 2024[354](index=354&type=chunk) [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=106&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information regarding certain relationships, related transactions, and director independence is incorporated by reference from the company's definitive proxy statement for the Annual Meeting of Shareholders on November 22, 2024 - Information for this item is incorporated by reference from the company's definitive proxy statement for the Annual Meeting of Shareholders on November 22, 2024[355](index=355&type=chunk) [Item 14. Principal Accounting Fees and Services](index=106&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information regarding principal accounting fees and services is incorporated by reference from the company's definitive proxy statement for the Annual Meeting of Stockholders on November 22, 2024 - Information for this item is incorporated by reference from the company's definitive proxy statement for the Annual Meeting of Stockholders on November 22, 2024[356](index=356&type=chunk) [PART IV](index=106&type=section&id=PART%20IV) [Item 15. Exhibits and Financial Statement Schedules](index=106&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists financial statements, supplementary data, and a comprehensive index of exhibits including organizational documents, debt instruments, and compensation plans - The financial statements and supplementary data are listed under Item 8 of this Report[357](index=357&type=chunk) - Exhibits include the Restated Certificate of Incorporation, By-laws, Description of Registrant's Securities, various Indentures for Notes, and forms of Officer's Certificates for debt terms[357](index=357&type=chunk)[358](index=358&type=chunk)[359](index=359&type=chunk)[360](index=360&type=chunk) - Executive compensation plans and arrangements, such as letter agreements, change of control agreements, severance plans, and stock compensation plans, are also listed as exhibits[361](index=361&type=chunk)[362](index=362&type=chunk)[363](index=363&type=chunk)[365](index=365&type=chunk) - Bank agreements, including the Securitization Program and the Credit Facility, along with their amendments, are detailed[366](index=366&type=chunk)[367](index=367&type=chunk)[368](index=368&type=chunk) - Other exhibits include the Insider Trading Policy, List of Subsidiaries, Consent of KPMG LLP, Power of Attorney, and various certifications (e.g., Sarbanes-Oxley Act)[369](index=369&type=chunk)[370](index=370&type=chunk) [Item 16. Form 10-K Summary](index=113&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item is not applicable to the company - The company states that Item 16, Form 10-K Summary, is not applicable[370](index=370&type=chunk)