Avnet 2000 Annual Report Download - page 31

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AVNET, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
13. Segment information (continued): Years Ended
June 30, July 2, June 26,
(Millions) 2000 1999 1998
Sales:
Electronics Marketing $ 6,638.2 $ 4,795.1 $ 4,474.2
Computer Marketing 1,863.5 1,554.9 1,403.7
Avnet Applied Computing 670.5 — —
Video Communications — — 38.4
$ 9,172.2 $ 6,350.0 $ 5,916.3
Operating income:
Electronics Marketing $ 391.0 $ 256.1 $ 297.3
Computer Marketing 38.1 43.0 61.7
Avnet Applied Computing 20.5 — —
Video Communications — — 3.0
Corporate and special charges (115.6) (125.9) (90.8)
$ 334.0 $ 173.2 $ 271.2
Assets:
Electronics Marketing $ 3,108.0 $ 1,662.6 $ 1,695.9
Computer Marketing 655.2 489.1 423.3
Avnet Applied Computing 226.8 — —
Corporate 1,254.4 833.0 614.5
$ 5,244.4 $ 2,984.7 $ 2,733.7
Capital expenditures:
Electronics Marketing $ 40.3 $ 50.3 $ 19.8
Computer Marketing 12.2 7.7 7.1
Avnet Applied Computing 1.7 — —
Corporate 32.7 15.0 11.5
$ 86.9 $ 73.0 $ 38.4
Depreciation & amortization expense:
Electronics Marketing $ 27.1 $ 17.5 $ 17.8
Computer Marketing 7.2 6.7 5.6
Avnet Applied Computing .1 — —
Corporate 41.2 28.1 27.1
$ 75.6 $ 52.3 $ 50.5
Sales, by geographic area, are as follows:
Americas $ 6,678.1 $ 4,888.5 $ 4,748.0
EMEA (Europe, Middle East and Africa) 2,055.9 1,241.2 1,021.5
Asia/ Pacific 438.2 220.3 146.8
$ 9,172.2 $ 6,350.0 $ 5,916.3
AVNET, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
13. Segment information (continued): Years Ended
June 30, July 2, June 26,
(Millions) 2000 1999 1998
Assets, by geographic area, are as follows:
Americas $ 3,796.9 $ 2,316.3 $ 2,121.8
EMEA (Europe, Middle East and Africa) 1,165.8 535.5 525.0
Asia/ Pacific 281.7 132.9 86.9
$ 5,244.4 $ 2,984.7 $ 2,733.7
14. Non-recurring items:
Reorganization and integration charges:
During the third quarter of fiscal 2000, the Company recorded $14,823,000 pre-tax and $8,877,000 after-tax ($0.10 per share on a diluted basis) of incremental
special charges associated with: (a) the integration of Electronics B.V. (SEI) and SEI Macro Group into Electronics Marketing (“EM”) EMEA ($10,120,000 pre-
tax); (b) the integration of JBA Computer Solutions into Computer Marketing, North America ($3,146,000 pre-tax); and (c) costs related to the consolidation
of EM’s European warehousing operations ($1,557,000 pre-tax). Approximately $13,327,000 of the pre-tax charge was included in operating expenses and
$1,496,000 was included in cost of sales, which represented a non-cash write-down. These charges include severance, inventory reserves related to termina-
tion of product lines, write-downs associated with the disposal of fixed assets and other items. Of the special charges of $14,823,000 pre-tax, approximately
$7,237,000 did not require an outflow of cash and $7,586,000 required the use of cash, $2,544,000 of which had been expended at June 30, 2000.
During the second quarter of fiscal 2000, the Company recorded $28,030,000 pre-tax and $17,573,000 after-tax ($0.21 per share on a diluted basis) of incre-
mental special charges associated with: (a) the integration of Marshall Industries into the Company ($18,413,000 pre-tax); (b) the reorganization of the
Company’s Electronics Marketing Asian operations ($5,409,000 pre-tax); (c) costs related to the consolidation of the Company’s Electronics Marketing
European warehousing operations ($1,509,000 pre-tax); and (d) costs incurred in connection with certain litigation brought by the Company ($2,699,000 pre-
tax). Approximately $17,739,000 of the pre-tax charge was included in operating expenses and $10,291,000 was included in the cost of sales. The charges
related to the integration of Marshall Industries and the reorganization of the Asian operations are comprised of severance, inventory reserves required relat-
ed to supplier terminations, real property lease terminations, employee and facility relocation costs, special incentive payments and other items. Of the spe-
cial charges of $28,030,000 pre-tax, approximately $11,143,000 did not require an outflow of cash and $16,887,000 required the use of cash, $13,656,000
of which had been expended at June 30, 2000.
During the first quarter of fiscal 2000, the Company recorded $6,111,000 pre-tax and $3,976,000 after-tax ($0.06 per share on a diluted basis) of incremental
special charges associated with the reorganization of the Electronics Marketing European operations consisting primarily of costs related to the consolida-
tion of warehousing operations. The entire $6,111,000 is included in operating expenses, most of which required an outflow of cash. These charges included
severance, adjustments of the carrying value of fixed assets, real property lease terminations and other items. Substantially all of the cash associated with
this item had been expended at June 30, 2000.
The total amount of special charges recorded in fiscal 2000 amounted to $48,964,000 pre-tax ($37,177,000 included in operating expenses and $11,787,000
included in cost of sales), $30,426,000 after-tax and $0.37 per share on a diluted basis.
During the first quarter of 1999, the Company recorded $26,519,000 pre-tax and $15,740,000 after-tax ($0.21 per share on a diluted basis) of incremental
special charges associated principally with the reorganization of its EMEMEA (Europe, Middle East and Africa) operations.