Avnet(US:AVT)2023-08-17 21:42Financial Performance - Sales for fiscal 2023 were $26.54 billion, an increase of 9.2% from fiscal 2022 sales of $24.31 billion, with a constant currency increase of 13.4%[109] - Operating income for fiscal 2023 was $1.19 billion, a 26.4% increase from fiscal 2022, with an operating income margin of 4.5%[110] - Adjusted operating income for fiscal 2023 was $1.22 billion, a 23.9% increase from fiscal 2022, with an adjusted operating income margin of 4.6%[124] - Gross profit in fiscal 2023 was $3.18 billion, a 7.3% increase from fiscal 2022, with a gross profit margin of 12.0%[118] - The company's net income for fiscal 2023 was $770.8 million, with diluted earnings per share of $8.26, compared to $692.4 million and $6.94 in fiscal 2022, representing a year-over-year increase of 12.5% in net income[129] - Net income for the quarter was $770,828 thousand, compared to $692,379 thousand in the same quarter last year, reflecting an increase of about 11.3%[181] - Gross profit rose to $3,182,143 thousand, a 7.3% increase from $2,965,391 thousand year-over-year[181] - Earnings per share (diluted) increased to $8.26, up from $6.94, marking a growth of approximately 18.9%[181] Expenses and Costs - Selling, general and administrative expenses decreased by $27.5 million, or 1.4%, to $1.97 billion in fiscal 2023[119] - Interest and other financing expenses increased by $150.5 million, or 149.9%, to $250.9 million in fiscal 2023 due to higher borrowings and rates[125] - The company incurred $28.0 million in restructuring, integration, and other expenses in fiscal 2023, expecting $16.0 million in annualized operating cost savings[121] - The total income tax expense for fiscal 2023 was $212.048 million, compared to $140.955 million in fiscal 2022, reflecting an increase of 50.5%[259] - Operating lease costs for fiscal 2023 were $88.9 million, down from $94.4 million in fiscal 2022[290] Cash Flow and Working Capital - Cash flows from operating activities used $713.7 million in fiscal 2023, significantly higher than $219.3 million used in fiscal 2022, indicating increased working capital needs to support sales growth[129] - The company had cash and cash equivalents of $288.2 million as of July 1, 2023, an increase from $153.7 million a year earlier[140] - Net cash flows provided by financing activities were $1,054,756, a significant increase from $156,059 in the prior year[189] - Total cash and cash equivalents at the end of the period were $288,230, up from $153,693 at the beginning of the period, reflecting a net increase of $134,537[189] Debt and Financing - As of July 1, 2023, the company had $796.6 million in borrowings outstanding under the Credit Facility and $555.8 million under the Securitization Program, with combined availability of $846.7 million[143] - Total debt increased to $3.06 billion as of July 1, 2023, compared to $1.61 billion as of July 2, 2022[253] - The company issued notes with a net value of $498,615, compared to $299,973 in the prior year, indicating increased financing activity[189] Inventory and Receivables - The company had $5.5 billion in inventories as of July 1, 2023, with a cost of sales of $23.4 billion for the fiscal year, reflecting ongoing inventory purchases to meet customer demand[145] - Receivables increased to $4.88 billion as of July 1, 2023, compared to $4.41 billion as of July 2, 2022, while the allowance for credit losses was $112.8 million[238] Shareholder Returns - The company repurchased $221.7 million of common stock during fiscal 2023 and has an aggregate share repurchase authorization of $318.5 million[147] - The company paid dividends totaling $106.3 million in fiscal 2023, with a quarterly dividend of $0.29 per share approved in the fourth quarter[147] - Cash dividends paid per common share increased to $1.16 from $1.00, representing a 16.0% increase[181] Taxation - The effective tax rate for fiscal 2023 was 21.6%, up from 16.9% in fiscal 2022, primarily due to U.S. state taxes and valuation allowances against deferred tax assets[127] - The estimated liability for income tax contingencies was $130.5 million as of July 1, 2023, with expected cash payments of $1.0 million within the next 12 months[146] - The Company recognized deferred tax assets of $187.3 million and an income tax expense of $212.1 million for the year ended July 1, 2023[175] Assets and Liabilities - Total assets increased to $12,477,159 thousand, up from $10,388,532 thousand year-over-year, representing a growth of approximately 20.0%[179] - Total current assets reached $10,750,853 thousand, a significant increase of 21.0% from $8,876,626 thousand in the previous year[179] - Total liabilities rose to $7,725,490 thousand, up from $6,195,772 thousand, which is an increase of about 24.7%[179] - Long-term debt increased to $2,988,029 thousand, compared to $1,437,400 thousand, indicating a rise of approximately 107.7%[179] Pension and Benefits - Total net periodic pension cost for fiscal 2023 was $29.7 million, compared to a benefit of $2.9 million in fiscal 2022[282] - Contributions to the pension plan were $8.0 million in fiscal 2023, with an expectation of the same amount in fiscal 2024[283] - The fair value of plan assets decreased from $638.9 million in 2022 to $504.3 million in 2023, a decline of approximately 21%[287] Stock-Based Compensation - Stock-based compensation increased to $38,781 from $36,738, reflecting a rise in employee compensation costs[189] - The total fair value of restricted stock units vested during fiscal 2023 was $28.6 million, up from $26.6 million in fiscal 2022[301] - The company granted 0.2 million performance share units in fiscal 2023, with stock-based compensation expense of $5.6 million associated with this program[303]