Avnet (AVT)

Joe Burke SVP, Treasury and IR
Bill Amelio CEO
Tom Liguori CFO
Phil Gallagher President, Electronic Components
Adam Tindle Raymond James
Ruplu Bhattacharya Bank of America Merrill Lynch
William Stein SunTrust Robinson Humphrey
Matt Sheerin Stifel
Steven Fox Fox Advisors
Sean Harrison Loop Capital
Tim Yang Citi
Nikolay Todorov Longbow Research
Joe Quatrochi Wells Fargo
Call transcript
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Welcome to the Avnet Third Quarter Fiscal Year 2020 Earnings Call. I would now like to turn the floor over to Joe Burke, VP, Treasury and Investor Relations for Avnet.

Joe Burke

Thank you, operator. Earlier this afternoon, Avnet released financial results for the third fiscal quarter of 2020. The release is available on the Investor Relations' section of the company's website. IR slide via will earnings the well on the can today's release of website. as found Avnet's be link the copy presentation accompany that remarks as A of section in the

on Lastly, and some the and and economic that customers, this and global on particular, assumptions statements of contained its that call COVID-XX forward-looking to risks, duration news the our predict, contains in release and conference involve operations, the supply of and information impact in uncertainties, outbreak are the systems difficult scope employees, chain.

statements the filings Several are with recent detail in those are contained Such subsequent contribute that performance Form forward-looking from results described in XX-Q statements. such or not differences factors and actual the such most company's and in materially the Avnet's could of XX-K differ and could SEC. cause guarantee to

These publicly or forward-looking and after as undertakes presentation only the regarding of company no the the any this of circumstances date update this of date statements new information speak presentation. obligation forward-looking to the supply statements

led session. will Global joins by President, to Components Amelio, the and Tom Avnet's be Liguori, Phil Avnet's Electronic call Today's us in participate Gallagher, CEO; CFO. Q&A Also, Bill

With Bill? to me the Bill that, let call over turn Amelio.

Bill Amelio

for Thank quarter everyone, Joe, earnings you, and our thanks joining third call. on us to fiscal year XXXX

is Avnet it the challenges business. with impact us and our whole brought dealing through COVID-XX, Today no different. As world we're we'll the on well all to by walk has aware, the on you

quarter and EPS Our year-over-year. revenues down sequentially and third were

on logistics quarter, sequentially EMEA Americas We and about will on increased in revenues as results, our operations. our reflects impact later pricing That the in focus a our guidance original in the quarter, in as past and costs which months. for few of softer Tom particularly said, effectively talk the demand, over Softer running impacted well third as the keeping which increased as quarterly Asia related the as seasonality, the low-end call. regions met as possible our to COVID-XX our business the normal of well bit

quarter signs At you that Last good in across correction, we our despite key of some we're call, and the time, initial to stabilization the earnings starting COVID-XX see was confined geographies. quarter on Asia. ongoing days that early to still told second

During the conserve our widened to debt act cash third as quarter, COVID-XX's reach and manage quickly prudently. we

a focus operating capital on As result, our positive enabled working flow. us generate management to cash

notable the operating business, electronic quarter. The Looking and most was revenues in Asia, with orders the both sale March at were suppliers. the affected from region our to by Chinese the year-over-year quarter any down and goods margins said, early impacting material supply in component sequentially due we disruption chain, effect upstream not or further was incoming Year, New did and experience declined That our COVID-XX. of to seasonal

the to For safety business implemented impacts. our business continuity as plans any then part and mitigate workers our most distribution ensure and we foremost, centers first operational to remain

but we had freight issues. travel some continued, regions, times volumes and in had certain longer to to disruptions experienced crossing and restrictions certain porters to some border checks. with other areas, that our challenges orders related we In due lead Shipments new the minor from customers delays due and

impact meaningful on There was no bookings.

ensure rate transparency of chain. supply Our backlogs kept a quarter book-to-bill end eye to parity. ratio close at and the the We of third bookings and above integrity well the the was of on our

provide firm, to supplier diligently work our possible to partners, the appropriately. we their resources them had our visibility continue best customers could orders allowing so the We to confirm to were allocate

as saw due plants Europe in United to most auto as you we weakness of of shutdown COVID-XX. States terms In segments, the vertical in market know, and

of essential. end We as well as was saw beginning today, as defense at the the quarter. businesses, and we aerospace parts where in see medical quarter strong quarter. various are our strength the of continued and trend the in seen transportation Throughout and Our the of a they even particularly down industrial,

vertical steadiness we and in did a segment. strength necessarily, EMS segment not our see Although,

operations be electronic our component Overall, business, in quarter. during operating some the usual business as to appear as

leading uncertainty, Tom couple However, that that it later. created provide all scenarios buy. potential of a more will high-level challenges COVID-XX buying detail that is clear referring and With some possibility preparing advanced we're for mind, to in of in next of quarters. recent reports with the panic on including pull-ins to

were due Farnell, ramp shipping to but both up than to sequentially. distribution started new planned COVID-XX. slower up will new initially operating center its Turning and Farnell sales in facility in the quarter from slightly third Europe, to the margins income be progress

our During place that pronged the long-term in we plan to model, continue we execute the quarter, Farnell’s competitiveness improve and to in five success. put high-service promote

our beginning of are parts our of of listed here We in plan the plans quarter. The the X. five progress from saw on Slide signs

countries the the European Farnell slowed the as into However, once Italy started like lockdown down and well. UK,

in to IoT, offerings. interest expressed Turning investors ability IoT our to scale our

allow IoT partner do program will just us that. Our to new

operating in the number we and IoT ahead. additional the will of environment has quarter months developments partners we the Although, on changed, signed a in IoT update up you

priorities businesses, continue high our this ecosystem be leveraging long-term our for respond we business, distribution margin on current on priorities amplifying to we've work extending to the near-term while growth laid continuous we previously, core outlined capabilities, digital our our COVID-XX still we and operational the out slide, strategic driving Despite as goals operating executing pandemic. that to adapted our our the scaling environment, are on improvement. clear, To five

Overall global quarter its demonstrate the third considering commerce, impact results and the following. our challenge on believe COVID-XX we of the

strength our partners; in our business for adapt of business health changing ability our sheet; in success to our running our lastly, safety keeping plans. our flexibility as the challenges as strength and balance resilience ensuring to withstand market our supplier to to service First, efficiently possible; our maintain turmoil. business to our counter-cyclical model and our customers employees' while quality market commitment ongoing our us the and continuity allowing levels quickly for our and activating of conditions, navigate overall company's value And

The reminds longevity, and bring to employees company, been company XX able against in entire I'm what with partners last has COVID-XX. been us able collaborate of Avnet's across point years. technology the they've so for do our our together and why market to proud and the fight to of customers working to our

end-to-end specific solutions, equipment. accelerate of will In our lifesaving examples to medical and we leveraging overall ecosystem see customer's press are abilities supply our Avnet to release, medical provide ways the of increase you

of the safety of can ensure and employees. we at course, all, the of all it health we Of forefront doing our are everything to

will digits substantially look macro As that economic in high-single contract in forecast is and play to XXXX, The global IMF of countries we the will forces we XXXX. contract forecast, and to mid there that the of economy contract in the developed at the range consider in agreement the global GDP X% most unanimous the serve.

the GDP much year estimates XX% will from the in as fall quarter current that ago. a Some U.S. as annualized

great It currently unemployment with States. at depression. a know, reflects we country has since As the in job people is seen of our rate level This increased the unemployed worst is loss. an XX United the alarming million

financial uncertain macroeconomic the With will that units. these are our will of ahead, we we what results, on health will last, geographies have Well, factors face. numerous taking detail exactly the no a we are taking actions acknowledge business to will Avnet global in times the to likely across a mind, in long across environment significant we as look knows or Tom how financial we fourth recession prepare one for our impact be the that explain meaningful all and ensure and extent quarter stability current crisis the fiscal for the steps during downturn.

chain, performance our part uncertainty, encouraged for us. depend They one made we're our quarter. point in closing, many without a get key products third remember the recent plays is our by customers and in electronic won't on critical us. that the suppliers. And In to Avnet Despite supply

adapt the remain to challenges and long-term continue we business in for we our strategy. COVID-XX respond pandemic the and ahead confident the our opportunities, While to

to call the report Tom? Tom on turn financials the I'll our that, With to quarter. over for

Tom Liguori

Thank healthy good families and everyone everyone. you, their safe. I hope Bill, and afternoon, are and

what adding stop ship customers. inventory provide components components to for our countries. needed. using the one We globally, supply to procurement stock customers electronic customers' We we Let shop our plus our XXX Bill and staff. inventory a in me supply we operating critical as by how chain. And a about financing on by play We're they to said, sheet, start on are balance and strong receivables

capabilities come. All necessary will COVID-XX centered internal they resources continue are of for and no an the so as required, our sheet, managed priorities balance to Therefore, healthy be today, these and continue liquidity financial strong flexibility on, critical a and provide years customers; run in the we maintaining matter and to through environment. player chain; the to to integral and our operations, retaining our financing the supply electronics crisis, to financial we the that can economic ensuring

we actions will our to support financial these and our As each. review quarter performance, priorities third discuss I

during Turning quarter original for ranges billion to Slide within and our XX, were $X.XX. adjusted was EPS the $X.X were provided third revenues earnings Both revenues our guidance EPS the adjusted and last call. our

to likely we distribution most short throughout support needs. customer keep the our centers that of our to were teams operating able global continue While would and fall we preannounced guidance, quarter our

tax and work rate expense from income to the part of to as interest rate A business our operations, lower was tax, lower mix of our improve contributed perspective. as well with cost effort The EPS and performance. the geographic longer-term tax a

mix from Asia. higher than lower Gross XX% quarter, to margin was revenues primarily of a due of last

decline played as result We as third New of COVID-XX a to expected Year, quarter our Chinese well. Asia part revenues the a in though

the Asia pandemic. impacted region the first became by

were travel areas health manage conferences. costs. over and safety distribution quarter, our shift we These work higher, inefficiencies as freight well of centers, for costs lower and new COVID-XX.This class as sequentially operating and costs incurred patterns, in through prior and new Adjusted year additional as in to overshadowed procedures million expenses like higher $XXX included increases both the cost

difficult the we impact put net on a $XX to number precise to While related to it costs the million. is roughly COVID-XX, be additional estimate

was XX.X% rate lower tax and income. favorable adjusted Interest from expense our was of benefited a mix to debt improved position. Our due

a revenues from Texas TI quarter the our were $XX ago. sequentially, $XXX the and Instruments flat Regarding third from in million, million decline year transition,

revenues TI year. continue to as see in We decline through a calendar the we expect

to of a equity Farnell There interim million, segment. other of in to result a asset in includes included impairment which related which $XX COVID-XX, and were $XXX we a impairments expense. charge recorded impairment our of million equity of is goodwill test million intangible macroeconomic acquisitions includes As The and an of performed goodwill investments, Components charge investments. Electronic $XXX impacts no

to X.X% due lower by On of resulted in operating revenues reflects EMEA Slide were segment COVID-XX. show $X Americas and Asia typical components seasonality. we billion has revenues Year XX, primarily down sequentially New Electronic Electronic slightly Sequentially, volume. which region. from X.X% sales declined Chinese X.X%, lower components' increased, usable revenues and the margins and revenues sequentially,

Farnell in weakening in operating revenues progress million, the off Farnell due April totaled strong March to operating COVID-XX X% fairly margin team quarter impacts. the The improvement. achieved a in $XXX and showing March demand appears for with X.X% quarter sequentially. demand. began trailed be margin, up The Farnell to

of Turning and healthy ended million working our continue quarter sufficient balance balance needs and the support customers. our billion. a debt operations with XX, balance with $XXX to sheet on a cash of to the we global and cash We liquidity flows business of have capital $X.X to Slide sheet,

Our and leverage debt X.X was was gross X.X. debt ratio our net leverage ratio

Recently, $XX, share book per of tangible value to net receivables, share asked the per book remained previously the relatively charge have both a value parts us Our key quality $XX. our about Tangible investors discussed. due constant sequentially $X our we and inventory decrease value. at book was impairment of

working of quarter capital, of regularly $X billion receivable $X.X billion accounts review As we had of and March of valuations. these billion inventory. We $X end, including

and in risk programs slowdown end, quarter some mitigation attribute those of remains our receivables Asia, we I to during that receivables, We've assurance the significant experienced write-downs downturn, team. of in aging receivable markets. for credit Historically not to QX. customer we and payments. reserves healthy similar credit As or in a provide quality have of In timeliness some experience may incurred our the that EMEA

with The same goes the inventory.

sheet with processes contractual teams or capital healthy our suppliers by affected inventory, global our and daily have disciplined and balance quarterly We we by managing should market various prices. ensure aged, in performing become changes arrangements focus Our obsolete maintaining a Avnet reviews. inventories on working

Turning to Slide liquidity on XX.

position remains Our strong. liquidity

All of on our businesses working cash. and are focused managing capital generating

on cash accountability, downturn. last the reporting, well as million we flow we XXXX, and metrics to During in processes, These are put The processes operations. liquidity us actions improved we with and of managed in during throughout benefits generations. place the calendar systems XXXX and serving automated year our year put focus in place the tools cash from $XXX generation of today, pandemic reaped

the generated $XX debt straight sixth of flow the In is million cash $XX flow of to used positive down third and we million cash This shareholders. from pay operations. operations. quarter, returned We million quarter cash from the $XX of to

want we a have forward, meaning flow. to revenues inventory remind cash contribute balance Going to that we decline, which and purchases, we when positive you sheet, receivables that both collect counter-cyclical of reduce

expect the would of use when expect additional to we And cash capital. the We future, continue. revenues working that to in accommodate to improve some that

any we in board, liquidity. implement Turning possible evaluated team future, required XX, to order as for with to economic several our management scenarios and the to actions ensure identify slide a along

the As have actions. a result taken following we

focus suspended March, to and a of on continue We program buyback economic our managing cash. inventories, the result our receivables as in share We generating businesses early uncertainties.

We hires. paused M&A curtailed non-essential and services activities also outside our and

implementing are actions debt. manage to our We

For Slide on shown XX. our debt out is as background, spread maturity

mature a end for we months. the $XXX in next not not due maturity April. of The we due until another the June, which have have note We means at redeem debt which next will do December, note XX XXXX, million does

In of $X.X we lines addition, open of credit have billion.

$X by are of matures line cash operations, intend over near and U.S. our to it Overall, summer, credit billion end securitization medium-term and is and it liquidity receivable receivables. dates includes out facilities our fund the supported Our and to renew we this of maturity debt to at time. our spread

the to outlook customers our employees, to of serve business continue partners. on Turning business suppliers, despite Slide we XX, COVID-XX, needs and

not outbreak. businesses fourth extent may are unable we provide China many can what pandemic position. adversely the liquidity region we global to color COVID-XX guidance Therefore, COVID-XX is are We to the be next quarter. are the from companies, providing confident in for quarter. The we the and predict for recovering operational Like our Greater the is the for to fourth appears the quarter impact

Some parts and of uncertainty Southeast India, Japan. in remains Asia,

revenues. expect in to off drop EMEA We

given downturn revenues. that cases in America's COVID-XX restrictions. Farnell government sizable has experienced fairly continued cautious, along The region is with

However, in defense we medical and see markets. strength aerospace,

proactive months imposed the stabilize but times, as travel commerce we to expect managed operating do our near-term the We and are steps higher to as so restrictions. liquidity. in continue navigate we third to secure through performance to These incur the expenses and uncertain COVID-XX government in We quarter Avnet ahead continue the took our look to crisis.

As Avnet next years, anniversary, our and XX centennial a milestone. served said, huge customers suppliers is which is had for and Bill year

healthy team, Avnet come. management a on years As and strong keeping we're for to focused

for line With that, Operator? the let's open Q&A.


Please question comes Adam your of [Operator the Raymond proceed of first Our questions. Instructions] from line James. Tindle with

Adam Tindle

was all but it the appreciate data afternoon June. of commentary And at negative forward I by end by that the Okay, little the book-to-bill parity about a the region. ask like I into color to trends and confused want lot above points. QX, the next was of sounds region, I a thanks. Good by bit

So now first, you of on the is book-to-bill maybe April? at touch where could end

a into alluding currently June. perspective, the Thanks. largest you're And as that's maybe your we low of sequential a what seeing decline? double guidance currently And of least could semiconductor Just if at quarter, not in for about June asking level a seeing? kind here, digit sequential I'm on you think just to you're customer terms for touch was wondering that decline but I'm

Bill Amelio

a position fact still revenue. where Phil book-to-bill, with On at that year's the respect normalized if And quarter also we where said, little against do higher and billings parity previous Okay. previous against and And over backwards are that we've that we're and down. stand given have region. we sequential the the normalize on We we're in and every color the question, that one. I'll I'll Tom stand bookings, looked we to above do the definitely give by do billings moves the and book-to-bill

with book-to-bill. So that level to some we no robustness question of respect see there's

I'll and chime And that, the Tom with in revenues. on have Phil,

Tom Liguori

today? Adam. really it transpire can so and How it April, are you timing and change are June. not of however, changes guidance, events, will lot COVID-XX out reasonable, but in between is and now restrictions. And, and a not a May related Hi, giving exactly you We're on return to of what depends still lot then. ranges The work, threw sure we're

at from the perspective are $X.X is that range. billion to there. out to breakeven in everybody's our looked I I EPS billion that have the attention would an models $X.X bring

were we up, on March making at about that's if quarter. breakeven. at $XX that $XXX that's gross be from a And we'd margin, about the reduction XX% that So, that’s commentary the million range, million and

June, will have seeing the what really operating operating be in to we OpEx. we we and our of is see, projects say, said, we're end That potential The that difficult it at of performance with that for place what still performance Farnell. we liked the is

Our cash over in recent seen Asia I and be in All before generation working we seems elsewhere. Singapore, Phil turning well. is would restrictions that, India, to have reiterate Japan to remains changes stable, be all but to

of one commentary. one that is revenues, a is concerning Farnell to the The of that which in us that's near-term point part is fairly that our the is seeing sizable data downturn breakeven

Phil? that, With

Phil Gallagher

and I'll little thanks. it I Bill Tom just Tom. covered but Thanks, a well. bit Thank Yes, more, Adam. add you, really think,

a your backlog management managing in to backlog, booking have point -- process Bill's of that the book On okay. the question, rigorous we

As Bill out, above as pointed parity. were the book-to-bills,

going is also to inventory all be very to back cautious in go we're that out. Today, the coming sure

and the day-to-day of sitting and -- So, said, it. I it's right we're rigorous middle we're our with suppliers, with customers and like our working in

but the which giving schedule. be outlook, Nation offices as XXX% held limited Asia-Pac, seems is outlook, we're across it the on Asia, up, as to [ph] coming and the calm, least an pointed not a far out. at We're And really April, back as in Taiwan Bill we're seems to in First be demand back, through decent operational positive. As

the for marketplace. Americas, describe though and It's is we're shut start got bigger to part coming we down the open cautiously Italy Europe such back. then impact. Americas not as manufacturing. they where out, we're been will back want far it's we as it bring not automotive down The pointed us of managing we're -- so but optimistic as that's in not countries between Bu, to probably question and as that's Bill And it's one big European Tom a just long be, thought. the the is did up, Austria. the what our The be, fast how do Germany in

about. And we're hopeful as back that's but May with month as June and full left, that turn the really we'll of quickly that on possible,

out, some automotive pointed and medical defense well, strong, is industrial where doing we strong, we Tom parts still of transportation. the gaps As is the with the know are of got

Adam Tindle

just tangible for at intangibles Avnet. is Got helpful. follow-up, books, so in the basically And a trading And as has stock one because it. Tom. Very view a negative just the maybe market on obviously

impairments the the a you think Farnell in portion I was there no Farnell did large goodwill related mention, and quarter. is to of

market know factors test and your be seems expecting to just gating a So, that the as impairment? to you Thanks. view -- talk Farnell, about in moving forward another the you impairment expecting downturn on sizable the fairly in those segment, revenue in mentioned can I

Tom Liguori

operating Yes. We're another come would long-term, of about actually lower Farnell a impairment. of, Thanks testing that our amount terms said, or with were not That XX% we headroom has for don't even fair if did. the COVID-XX go, that. will where then available, think our know it X% would we margins Adam, still expecting up impairment. in Farnell projections. possible or I current for

to We ago very margins, good four progress XX% us. quarter. a since that's operating quarters last at was saw so were encouraging It only we

today amount always we has that right, of Farnell Avnet times book for is headroom XX. and at now, and a net fair book yes, value X.X impairment. see right And traded value So, you're

were did ended the were but that tried to position test. think impaired, in smallest all of There a We good number be vetted type and are a these there. We of the as help, we can things up uncertainty I I same conservative. that through the imagine, And auditors, exercise. of fully you know going are with Does given Adam? many companies out

Adam Tindle

I some capital It you does. one changes. allocation know last And clarification, priority mentioned

about and the me quarter I the says dividend, correct maintaining Thanks. cash what feelings me tell think if And in you're wrong. that I'm about beyond? flow your next

Tom Liguori

Yes. huge where we'll the a in few million dividend a a road. few to the going outlay, sorry, The get large quarters a it's make That let's outlay. around make the $XX said, large not environment cash in May. a it's not that. on is decision down I'm We're a now a mid-May, macro road is see dividend down Again, on the decision to weeks to but quarter.

Bill Amelio

I'd And Tom sends about don't add table, is to we be which that further out, message dividends feel to the options we on juncture goes but that, the this we Adam. Look, confidence at still the all of a we if a are paused though, company. that think points And as threat. outlay. that we see south COVID what the -- bigger still the a much buyback, solid

Adam Tindle

Bill. Thanks helpful. That's

Tom Liguori

Adam. you, Thank


of next questions. come Bhattacharya Ruplu line of Our of with from your questions Bank Please the proceed America.

Ruplu Bhattacharya

taking thanks Hi, for my questions.

additional take costs quarter? said as a How quarter. you with there that And of Tom associated we can those the OpEx? the the how think think think fourth actions in about COVID-XX Are trending $XX should Thanks. sales? cost to you in about lower OpEx in I we any million additional should general, was cost incremental percent about

Tom Liguori

Ruplu. Sure. Thanks,

is a which us, issue million protective of like to First near-term that all, personal related things $XX gear. is for freight,

done disinfecting. working distancing within distribution they're work great operate, operating, job our they've of of to cleaning, centers, rules, social continue a All but

think with returning go with freight start anticipate expect this productivity the to to June centers things as our rules, I familiar like, continue those most Meaning to would up. And will their we quarter, probably costs new we working subside start through get to of distribution normal. quarter. So fully the

For slightly the below March being would on quarter, level June same our I the or it at plan quarter.

to a revenue, Seeing forecast OpEx have revenues. percent you as of

let's range. to revenue that talked We the in million. OpEx the So leave stay that a within $XXX an I'm mid assuming side. about historically reasonable

defined On that's OpEx, with to think the going $XXX what's good plan, go to projects continue achieve Right $XXX I we we're to million our work that that. cost the the well. at forward. now, of a about end achieved. $XXX going in We up we'll $XXX fully million million number talked about believe more. with million reduction of savings or that's probably We've

one of are that, to longer the timeframe. The say thing based a type with is is work working six outsourced the savings The various take a would our some an takes And functions meaning months country I home, mode. those cost and people reason knowledge on going either to lower little new transfer at longer. longer, to moving are or little restrictions a those three that in

additional to associated to fruition. be you'll over the plan near-term, going June the we to rest million million, in costs XX And March, similar is come COVID-XX the the very next normalized, to of million that $XXX see per quarter. $XXX $XXX be with So, once get XX months, we'll

Ruplu Bhattacharya

Okay. that, Thanks on Tom. details for the

free of you Just debt, flow cash free XXXX, If to to the counter-cyclical back of flow. quarter. And forward down talked level this Thanks. that cash balance sense year? of Should fiscal about some for in go I think in we for paid delivered $X I you of you makes in your next terms billion my about delevering cash, we as uses continue Any follow-up, quarters? couple idea, the if generated fiscal you the look that guys sheet. expect

Tom Liguori


flow cash XXXX, as model just the to similar. as, XXXX So far is comparing it and

So, to I millions it's generate I'm sorry, part what XX% of of hundreds quite that not revenues $X of decline, yes, substantial. would our billion if declined level we of cash flow. the XXXX in think question? second At the XXXX, was XX%, and

Ruplu Bhattacharya

sheet. And delevering in balance the terms of

Tom Liguori


Ruplu Bhattacharya


Tom Liguori


sheet liquidity. on and really is our So, balance focus right now, the

So, of part would same in Ruplu. cash in be of to of mind, to extent a generated slowdown debt one recovery into I our comes. lot you, the Thank will the And good the June or business, anticipate it a in because a to lower. keep once to we macro, go back thing

Ruplu Bhattacharya

for Thanks you. the Thank details.


[Operator line next your of Stein with of Will Instructions] from Our questions SunTrust. come the questions. proceed Please

William Stein

question. is bookings, results falling and a providing Great. in of strong QX, and outlook for reasonable category this but taking Thanks posting for QX. outlook withdrawing Avnet an of for reasonably or sort my Many highlighting not companies an

As you think of backlog look the get it is stands for than now perhaps orders or more at when that revenue think and the about QX, concern some you could canceled pushed? you

is And Is is any turns you the flat this, that's chance would percentage revenue concern typically? as but slower the think typical up there be that points be comfortable then instead sequentially. could Or backlog, couple you with the of revenue than quarter? feel the a the pace business follow-up related in to I think

Bill Amelio

as teammates a a a packed I'll Yes. have me There's it it shot lot let Well, shot take and well. give then my in there. at

We in Phil system idea previous a how question. management Let's first start that put backlog. place. good rigorous with in that the the the mentioned

any and customers whether and outliers sudden are stricter able that would previous put the going question bookings not are to where if terms previous and and booking are their two be look as actually customer or of doing bookings can patterns discrepancy in then as a years at their well We're see to individual fact and in and we on quarter, they all the there we between say that to and what or quarters, they're determine see, given billings able to anomaly an place. know there's be additional billing term a able some in -- bookings patterns back

some position, helping some sure good only demand to want to suppliers imagine, life can customers. So, cases, concerned factories they're backlog or the as And are to good are it's make XX%, who of for us I orders. they a our orders in they sure clean think filling get with at actual to going that's the because running really in up devices go they're make their to you saving really customers when

important critically that's So to supply in chain. us all the of

what automotive the a then, orders that see is happened think look things to worse, like we respect what With happening stops. where there actually if could about we concern COVID how gets production in the

happened a cetera. in et happened curtailed we'll sector. So communication, some get that the it's recall pretty then end the that if with and of happen automotive consumer, we're user sudden, overnight, in, quickly. And industrial of what we could see kind demand that all And other almost sectors

So that's with future. what At book-to-bill in in looks going to uncertainty really happen juncture our the to is with respect this given respect solid. what's the demand concern to the

pass it Tom. to I'll

Tom Liguori

Thanks, a just April much worse. better is be difference in much is be situation, add, maybe a would May there could Bill. I between could XX. it And XX, today that different big and today March or XX, Will it

so Go really what add? that's ahead. not saying we're to And guidance. anything giving Phil, by

Phil Gallagher

products have responsible backlog good some the know. to partners the based as about of Tom. they [Indiscernible] were using, the well. for, Yes. by backlog, And, I talked we we're need. guys just be frankly, say, I our be And in would being it's as And limited you question, you really some we just customer, with think, they accountability they that responsible. really customer accountability said guys the of them again, all getting need it and we're capacity sure our to suppliers that asking on

upstream so And with customers. suppliers we're and everyday our our downstream with working

like responsible needs And of say, now. we before. is be something everybody us just right seen to have none so This

Tom Liguori

to staying in and weekly the contact what to calls up, It's people supply customers, very of you services I look of in brought our June and businesses or go flow. our Will, in that is May of what at comforting what doing them each Phil are in and one the could that impressive sales would adjusting to is the up. cash away our Phil said. businesses, having that leading add with We're ensure checking each real chain with order

really feel what in So, it humorous, Mission very of transpire this is. will five show, seconds, the that's joked back them it's which one I message Possible but is to that

getting and on good managing. sheet an story new new our the It's of company everybody's a and uncertain regardless, time. cash day, are strong. demand orders, we'll signals, liquid just keep believe balance every top And, we're new we and But, it made, keep have changes

Thanks, Will.

William Stein



from of Stifel. come Matt line with Please questions of question. proceed next your Our Sheerin the

Matt Sheerin

Yes, expected. revenue I wanted that the like about to higher thank ask sounds Texas had Instruments you. you than run-rate. $XXX million It was

expected you to be last think it quarter. down from I

that to lost on two over with So, the suppliers difficult other also, update now? give transitioning share environment update us that on it three and other you you win quarters? talked could know about next us Can gains. current I incremental business revenue you making And And you've more Phil, is see backfilling to how an this that?

Bill Amelio


course So, I’ll about a lot that of to respect With of there TI start of with the transition. questions is one, Matt. the timing

is here So for track we’re it still December what seeing by completed can you on XX. expect is

decline, most little more as bit COVID-XX. Although, of it we impact see a would with expect likely some out, to a we pointed

flat especially we’re So, sequentially.

products. we how take But some supplier going going sure replace pin with want a our customers tight got plan But revenue. fact maximize on we we which suppliers' with are doing leads replacement they make course, distributors. to on to And We've the little share or system that have and management creation to and can with longer on between across sure richer into a that. where design the revenue We're get balanced associated our lines with stay those that shifts in place, margin of pin other world make in wherever we’re win possible. takes continue active three a demand really to results bit to

to something you else do that? Phil, add want So

Phil Gallagher

part. for And good with from Yes. generation one another hear the you, thanks the to level. country is single customer, down question. to every meeting and Yes. every This of thanks. the the Bill, by have Matt, dollar processes We We're know in Great rigorous regularly customer by place. part, job, [ph] those DP regions single we

we're detail doing. the that's So, what

And process. replace business. right, pin that we're say share We've pointed as we we're for with the And just are designs where customer. new the a against Bill generation and process timeline shift, tracking right satisfied, pin, we're now okay, satisfied but to in internally I'd and pleased,

end We're put our and be comment to think I marketing of by year, I [Indiscernible] complement pleasantly our team, to point it on the come could in engagement, I plug I customer really December. think we probably and team too but hasn't the calendar planning end to, sales planning looking the it's surprised have that but that to the the we're will of sequentially. And for yes, frankly, decline by move customers really it, aren't attributed we’re obviously that fast. the if on a business

Matt Sheerin

be more happen that that the overall with you little bit Are to in a business or visibility? just expecting line no or down because might

Phil Gallagher

That shows that. go Well, ahead we're planning though. -- definitely

Bill Amelio

it every going plan It's juncture, not the just we plan tell as seeing. by or easy quarter linearly I'll to the to is I mean, of never essentially the move I it's thing would year, this but you said to line it's going end can and to putting quickly, but an we're because place gone not be of not. this year. end in -- we're at say our if it this that it, the the it's but extend reassess

Matt Sheerin

Okay. you. Thank

Phil Gallagher

modeling. We're

that's yes. financially, we're modeling So how it,

Matt Sheerin

just think engagements regarding mix weaker Is you follow-up customer which And on there? of And on against Phil. Farnell you that going pretty lot then gross be and just or that's helped up that, weaker is down. this obviously or Thanks whether because gross Okay. significantly down XX% you there like a to to comment the because work with also margin, creation was margin? looks It which drive to are particularly gross of demand changes no that obviously margin nicely Asia and my you premier quarter. there, flat could business, COVID going and

Bill Amelio

Okay. I'll holding mix. are creation talk take the On regional fact, then Tom demand question demand solid. the and about we in creation can

be. a In than little bit more robust it fact, we to even expected it's

revenues business So core be to it XX% the of and roughly still our continues it's in that way. Tom?

Tom Liguori

was of would be forward. Asia each mix Thank you their we And going to was because Sure. up down, up Matt, play bringing you're much margin gross pretty correct. individual so down seemed look what you and to mix. said are the part be you. a business, will Farnell, When most. flat flattish, slightly at And margin is gross

Matt Sheerin

much. thanks very Okay,

Tom Liguori

Thanks, Matt.


Our next Fox Fox questions line questions. of from Steven of the Advisors. come Please your proceed with

Steven Fox

curious credit Thanks collectable know Good into between guess cetera? bit EMS differences versus you a just question for collecting large more question. Can taking I of I of then supporting I the afternoon. could brought a earlier. follow-up some I small up And insight that from provide you're receivables, first collecting you business in color the talk question. a if had terms a little there's from provider. et guys question, you or my terms, customers how about was smaller

Bill Amelio

then I'll Tom if the cover And as more we've some be level that's that out a see Sure, position. it. color And -- debt our time of gets give of start into news on we we occur a customers, a this great believe from well. but do coverage amount may The to can is have thing. world, cycles and cycles, had come bad worse enough through gone through across significant we've not some gone this which is before. insurance didn't good we on We

a to fact, make level they we they comfortable sure in that audit receivables. we're standards. an the do check on fit good the our accounting basis But with pretty and And of Tom? receivables regular them on are,

Tom Liguori

that's Thanks, so receivables sign. bill. very Steve, good quarter-to-quarter, aging in our no a change

Steven Fox

I it then region? buying is Okay. to terms in like, for And a certain certain that you I I terms terms you're of of back there mean, are reports. lookout that of buying more area suspect you're potential on I'm in maybe that over seeing your color. of most one getting original right or just, appreciate in comments, now? orders maybe the is of mean, what panic

Bill Amelio

I would say on following the it.

about commodities, that SSDs, hot to the they're you're commodities got think You considering that NANDs, maybe DRAMs. on whether

then we where one that's occurring. focusing some behavior, to And on ordering So individual concern. some fare have we there customers it and "panic or double you individual think where we're of able memory customer could quickly out level be discuss is could buying" pretty to by But And case. go put customer be in assure with not that aren't orders that we and we're demand believe going helps place the we to have that when fulfilled. going that's caught terms be profile the normalize the ourselves tougher with essentially we

Steven Fox

that. general viewpoint now you're your not Right. right broadly is But speaking, seeing

Bill Amelio


either. this at If you look juncture at cancellation rates, they're not abnormal

It got solid good that So that's you backlog. indicator. another pretty tells we've a

Steven Fox

helpful. Thank very you. That's Great.


questions. come of Sean questions next your Loop proceed Capital. of from Our the Please Harrison with line

Sean Harrison

of kind kind Hi, your of afternoon of aerospace sales us could of everybody. what remind Bill trends Phil, kind versus percentage I medical or you're guess automotive defense divergent you given seeing? are

Bill Amelio


business. revenue another and the of and been that If EMS it of you streams XX% verticals look of the balance of almost at Industrial defense, represents steady the XX%, revenue, includes the diversify, and about rest gives which split aerospace call represents transportation we major we'll key in you kind it the is, XX% our it's of and have.

Sean Harrison

its currently? going on seeing you Farnell Okay. the follow-up. changes kind within in activity business? guess, Europe? of design the stronger seeing a position that is There's Is else I a you're more, weakness. solely something want where It's that there Or the greatest Farnell of -- to the just I function Are it's within in most, weakness any

Bill Amelio

is effectively things. income beginning Well, starting couple fact speed, dollars that the we're our really really expansion from web marketing the the of we're was quarter user we're Farnell spending SKU that doing our all work. the at of that that good, And the on of finished to the experience, work doing, view, to start. operating point solid a a the strong demonstrating we off

slowing then us, essentially enormous as for the saw. went into down. that and that's Italy quarter And things the created an market part And of problem others the we the as when in latter UK, went far we dark, EMEA

again with card. As think far But I come not back anything country start that, seeing hopeful as around that. up opening again, that start up the wild a it's respect again. still we're design back different as to turns we'll back And and no, activity going people work to goes,

Phil Gallagher

which our and UK good in point to March see of where right acceleration a by is in shot. point, lot that's just right to say, frankly, a confidence your now. around see that to position got Farnell we the would Bill's where. okay whatnot Yes, started to strongest we've started And you and I Europe, decline, their XX, region

Sean Harrison

may Tom, And question. if helpful. I That's last slip in Okay. one

Just you'll you'll back, inventory keep able improve somehow inventory you into think to do June Asia velocity actually Or Do into quarter? coming the be the velocity. quarter? this with level you think June it at

Tom Liguori

velocity. improve will Well, inventory we Asia think

the is think Thank will you. positive Sean implies to we're what bottom-line working achieve continue June, to I get wanting better. And capital be cash flow. that able that to in


Please Our of with come your Yang questions. Citi. proceed next Tim the from of line questions

Tim Yang

the question. Hi. Thanks for taking

weakness down Can double WPG? mentioned it a versus in You of for largest reported color the March Asia some WPG performance year-over-year. think competitor March was quarter. X% year-over-year digit your you quarter, I But on disconnect roughly provide one between growth your

Bill Amelio

one? you do take shot a that Phil, at want to

Phil Gallagher

know about we in just They be do don't a margin lower play to memory. in a They exactly the business space we different one. very course, details take size business And tends and that that I'll shot and play there. in don't substantial much Yes, processors, particularly WPG. have of we than play all market a

Asia we're as as in some. holding basket, as that So far in goes the our plus far our share the lines we own manage as

I'm it's situation. to a commodity that estimate So, going

Tim Yang

it. Got

just shift, than share a more of not marketing -- mix it's it's kind So like

Phil Gallagher

to could go in of where those I'd end play say we it products market be as Correct. parts, much. types the -- mix that Yes. processors memory don't as those

Tim Yang

original is average March achieved the early still but side? during the strong drove of going quarter guidance. midpoint that you side the on second of cost March, meet to you demand talk about March revenue would Got -- is, can I you in the a month My the guidance, you Do linking in think you that see the mentioned not quarter? achieve which demand question you. the that maybe

Bill Amelio

repeat I'm part the you of sorry. Can last that question?

Tim Yang

you the is just you that March actually performance achieve the But the drives the So the actually of or mentioned of range? guidance the the so meet March, in guidance. cannot that upside that the can beginning of that midpoint month you

Bill Amelio

they are this look tax. things you advantages tell off doing we some could faster meet the of were when at fall when Well, on notice, to it you And better end than we looked operationally, we did. some also expected. as up And going guidance than to we able not we had like

So to and that of well. helped bottom reasons the that's close the we why end, us as that along But were one did really preannouncement. we

Tim Yang

Got you.

Okay. you. Thank


with proceed line questions from Please Todorov the questions. of of your Nik Longbow next Our come Research.

Nikolay Todorov

Thanks. Good afternoon, gentlemen.

the matters Given quarters? talk can indications the for mostly Can know about the lead pricing area get times, that I please? some Farnell couple of hit of a potential here going is of outlook? the to talk of that perspective. near-term from next pricing the extended But and about you is topline that over benefit thing the

Bill Amelio

well. to as an to extend, always see course, opportunity ASPs start expand some lead times Of when that's

situation seen yet, start course, occurring goes gets tighter see will haven't occur. time We to tighter but on you that the and that and of as

Nikolay Todorov

you the expect And see aerospace allows you the in do anything to in you times. from see your cuts you business? in a exposure Typically, aerospace production that as strength forward? different think multiple going Okay. the there follow-up, about companies. major strength And that Is to mentioned strength

Bill Amelio


on not aerospace. I actually defense for that you'd us flying, medical think has that too, impact it's than aerospace, sector. about And seeing defense. that We're are clearly we all comment. same also, is because talking we up made as we're and more imagine, on planes the in not an with But

Nikolay Todorov

more. that can about end with or bit you Micron? Can Okay. market does relationship What little that sneak expanding products which for is? I entail a talk one And if that

Bill Amelio

do Micron, Yes. details, you want at especially give to any please? Absolutely. Phil,

Phil Gallagher

of Well, really Yes. is Micron response, around expanding Farnell. the we've core the the Nick Avnet and world sort got simple with on just that

Micron. real So it's that will one big of be across portfolio a the

for there. it's So win nice a us

Nikolay Todorov

Okay, Thanks. got it.


of questions the your proceed Joe next Quatrochi of question. line with Wells come from Please Fargo. Our

Joe Quatrochi

taking for question. Thanks Yes. the

categories one. should last lead products to there likely Just kind the being on point? most times or the any we this think building Are about of extended where or at see shortages

Bill Amelio

I you have which know some I the think one like supplier. couple. Well, that's And name and facilities every the to Malaysia suppliers countries have to specific a had talk of in and lockdowns, that ones the in think of by could Philippines

Joe Quatrochi

How your then relative Okay. And just do in quite you the the about one the just rate? of Fair kind housekeeping given long-term decline think rate, tax target significant quarter enough. question. March to

Tom Liguori

under XX% to estimate get has about been A total year XX%. our and long-term target it is

the rate, about good really it? Joe. within our answer feel progress Did we So, I tax

Joe Quatrochi

you. Yes. That's Thank perfect.

Tom Liguori

you. Thank


time. Amelio Gentlemen, turn call now at remarks. back closing this for the I'll there are no Bill further to questions

Bill Amelio

our are in Thank to all are say those community. that that our COVID-XX with I'd like you, operator. across And the thoughts impacted closing, global by

each day are together first to responders we're risen of make to of this who for the lives. working communities grateful the there We tirelessly fights to in dedication healthcare proud the a have virus. incredibly And come professionals, people's our with our are our and and positive challenge other and industry, employees in out have difference

continue continue things We just on evolve will we'll you developments as to Thank monitor in update our you, quarter and fourth operator. COVID-XX to the results months. closely few a fiscal


teleconference. does conclude this gentlemen, today's and Ladies

this You your you have at great your may night. time. for Thank participation disconnect lines a and