Avnet(US:AVT)2022-08-10 23:50Financial Data and Key Metrics Changes - For Q4 2022, the company reported revenues of $6.4 billion, up 21.9% year-over-year, and adjusted EPS of $2.07 compared to $1.12 in the prior year quarter [18][19] - For the fiscal year, total sales reached $24.3 billion, a 24.5% increase year-over-year, with a record GAAP EPS of $6.94 and adjusted EPS of $6.93 [19][20] - Operating margins for the fiscal year were 3.9%, with Q4 margins at 4.5% [6][19] Business Line Data and Key Metrics Changes - Electronic Components achieved revenues of $5.9 billion in Q4, up 23.9% year-over-year, while Farnell had record revenues of $442 million in Q4, with operating margins of 14.2% [22][24] - Farnell's full-year revenues increased by 20.2% year-over-year, with significant investments in inventory and e-commerce capabilities [15][23] Market Data and Key Metrics Changes - The company experienced strong demand in industrial, automotive, transportation, and aerospace sectors, with a notable 34% year-over-year growth in the Americas and EMEA on a constant currency basis [12][24] - Asia saw its fifth consecutive quarter of growth, reaching nearly $10 billion in sales for the fiscal year [12] Company Strategy and Development Direction - The company is focused on leveraging demand creation capabilities, supply chain services, and enhancing digital offerings to drive growth [16][30] - Investments in inventory and employee compensation are aimed at maintaining competitiveness in a challenging labor market [8][19] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing supply chain challenges due to lingering COVID-19 impacts and inflation, but expressed confidence in the company's ability to adapt and deliver value [11][30] - The outlook for Q1 2023 includes revenue guidance of $6.2 billion to $6.5 billion, with expectations of continued strength in Asia [29][30] Other Important Information - The company returned $25 million to shareholders in dividends, representing an 18% increase year-over-year, and repurchased $102 million of shares in Q4 [26] - The liquidity position remains strong, with cash and equivalents of $153.7 million and $1.4 billion in available lines of credit [25] Q&A Session Summary Question: Inventory composition and shortages - Management expressed confidence in inventory levels and quality, noting mixed lead times across different product categories [34][35] Question: Demand trends in semiconductor markets - Management indicated that while some areas are softening, demand remains strong in aerospace, defense, and industrial sectors [37][39] Question: Revenue guidance and inventory growth - The guidance for Q1 reflects expected sales demand and inventory timing, with a focus on supporting growth in Asia [41][42] Question: Pricing versus volume growth - The majority of growth was attributed to volume, with pricing inflation contributing approximately 7-8% to revenue growth [44][45] Question: Margin expectations and capital allocation - Management discussed the impact of pricing on margins and indicated plans for increased CapEx focused on digital tools and e-commerce [57][60] Question: Book-to-bill trends - Both segments maintained positive book-to-bill ratios, although there was a slight moderation compared to previous quarters [71][72]