Avnet grows sales by nearly 39% in FY11

Phoenix, Ariz. — Avnet Inc. has increased its sales by 38.5 percent in fiscal year, ended July 2, 2011, compared to the previous fiscal year, reaching $26.5 billion thanks to several acquisitions and organic growth. Pro forma revenue increased 17.1 percent year over year.

“We began our fiscal year with three significant value-creating acquisitions that expanded our global footprint in higher growth markets and increased our customer base and franchised supplier line card. These investments, combined with double-digit, year-over-year organic growth, added over $7 billion to our top-line,” stated Rick Hamada, chief executive officer. “Adjusted operating income grew 1.4 times faster than revenue to over $1 billion, driven by operating leverage and acquisition synergies. As a result, return on capital employed (ROCE) improved 76 basis points year over year to 15.4 percent, which is within our target range of 14 percent -16 percent for the full fiscal year.”

For its fourth quarter FY2011, Avnet’s revenue reached a record of $6.91 billion, increasing 32.6 percent year over year. Pro forma revenue increased 13.5 percent.

Due to these record-breaking results, Avnet’s management and the Board of Directors have authorized a $500-million share repurchase program. The decision to buy back stock is a direct result of the company’s long-term financial discipline that has created improved cash generation, said Avnet.

Avnet EM results

Avnet Electronic Marketing’s fourth quarter FY11 revenue grew 26.8 percent year over year, achieving record sales of $3.96 billion with the EMEA and Asia regions, excluding Japan, delivering double-digit organic growth.

“EM closed the fiscal year with a strong fourth quarter as gross profit margin, operating income margin and economic profit dollars increased both sequentially and year over year,” stated Hamada “Revenue grew 26.8 percent year over year to $3.96 billion, which represented the seventh consecutive quarter of double-digit growth.”

Avnet Electronic Marketing’s book-to-bill ratio dropped below one in the June quarter for the first time in nine quarters, as concerns over supply-chain disruptions related to the Japan disasters lessened and lead times reduced, said Avnet.

“It appears the concerns over slowing economic growth and more normalized lead times are influencing customers to be cautious placing new orders,” stated Hamada. “With operating margins at the high end of our target range and ROWC above our goal, we expect EM to continue to solidly grow economic profit.”

For the first quarter of fiscal 2012, Avnet expects EM sales to be in the range of $3.75 billion to $4.05 billion. Consolidated sales are projected to reach between $6.25 billion to $6.85 billion.

“While it appears that the global economic recovery may be slowing, the technology markets we serve continue to lead the recovery and we are vigilantly monitoring customer and supplier input as we enter the second half of the calendar year,” stated Hamada. “As we begin fiscal 2012, we are committed to building on the momentum from fiscal 2011 as we move beyond the major integrations in fiscal 2011 and start to capitalize on the expanded profitable growth opportunities in both operating groups.”