Avnet, Inc. engages in the distribution and sale of electronic components. It operates through the Electronics Components (EC) and Premier Farnell (FC) segments. The Electronics Components segment markets and sells semiconductors, interconnect, passive and electromechanical devices and integrated components. The Premier Farnell segment distributes electronic components and related products to the electronic system design community utilizing multi-channel sales and marketing resources. The company was founded by Charles Avnet in 1921 and is headquartered in Phoenix, AZ.
Economic weakness and geopolitical uncertainty could adversely affect the Company’s results and prospects.
The Company experiences significant competitive pressure, which may negatively impact its results.
Changes in customer needs and consumption models could significantly affect the Company’s operating results.
The Company’s non-U.S. locations represent a significant portion of its sales and, consequently, the Company is exposed to risks associated with operating internationally that could adversely affect the Company’s operating results.
If the Company’s internal information systems fail to function properly, or if the Company is unsuccessful in the implementation, integration or upgrade of information systems, its business operations could suffer.
The Company’s acquisition strategy may not produce the expected benefits, which may adversely affect the Company’s results of operations.
Major disruptions to the Company’s logistics capability could have an adverse impact on the Company’s operations.
Declines in the value of the Company’s inventory or unexpected order cancellations by the Company’s customers could adversely affect its business, results of operations, financial condition and liquidity.
Substantial defaults by the Company’s customers or suppliers on its accounts receivable or the loss of significant customers could have a significant negative impact on the Company’s business, results of operations, financial condition or liquidity.
The Company may not have adequate or cost-effective liquidity or capital resources which could adversely affect the Company’s operations.
In order to be successful, the Company must attract, retain, train, motivate and develop key employees, and failure to do so could adversely impact the Company’s results and strategic initiatives.
The Company may become involved in legal proceedings that could cause it to incur substantial costs, divert management’s efforts or require it to pay substantial damages or licensing fees.
Changes in tax rules and regulations, changes in interpretation of tax rules and regulations, changes in business performance or unfavorable assessments from tax audits could adversely affect the Company’s effective tax rates, deferred taxes, financial condition and results of operations.
If the Company fails to maintain effective internal controls, it may not be able to report its financial results accurately or timely, or prevent or detect fraud, which could have an adverse effect on the Company’s business or the market price of the Company’s securities.
Failure to comply with the requirements of environmental regulations could adversely affect the Company’s business.
The table below provides a comparison of reported and organic sales for fiscal 2019 to fiscal 2018 sales to allow readers to better assess and understand the Company’s sales performance by operating group on a more comparable basis.
Avnet’s sales for fiscal 2019 were $19.52 billion, an increase of $481.7 million, or 2.5%, from fiscal 2018 sales of $19.04 billion. Sales in constant currency increased 4.4% year over year with both operating groups in all three regions contributing to the increase.
EC sales in fiscal 2019 were $18.06 billion, representing a 2.9% increase over fiscal 2018 sales. Sales in constant currency increased 4.8% year over year and all three regions contributed to sales growth of 3.1%, 4.7%, and 5.7% in the Americas, EMEA and Asia, respectively. From a sales by product perspective, sales of IP&E products grew faster than semiconductors.