Avnet 2002 Annual Report Download - page 30

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Results from Operations
The tables below provide a year-over-year summary of the results from operations for the Company and
its operating units.
THREE-YEAR OPERATING UNIT ANALYSIS: SALES AND OPERATING INCOME (LOSS)
Years Ended Percent Change
June 28, % of June 29, % of June 30, % of 2002 to 2001 to
2002 Total 2001 Total 2000 Total 2001 2000
(Dollars in millions)
Sales by Operating Unit:
EM ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $4,841.9 54.3% $ 8,286.6 64.7% $7,105.2 71.7% (41.6)% 16.6%
CM ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2,399.2 26.9% 2,855.6 22.3% 2,139.4 21.6% (16.0)% 33.5%
ACÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,679.1 18.8% 1,671.8 13.0% 670.4 6.7% 0.4% 149.4%
$8,920.2 $12,814.0 $9,915.0 (30.4)% 29.2%
Sales by Geographic Area:
AmericasÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $5,295.2 59.4% $ 8,746.0 68.3% $7,420.9 74.9% (39.5)% 17.9%
EMEA ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2,900.3 32.5% 3,511.6 27.4% 2,055.9 20.7% (17.4)% 70.8%
Asia ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 724.7 8.1% 556.4 4.3% 438.2 4.4% 30.2% 27.0%
$8,920.2 $12,814.0 $9,915.0 (30.4)% 29.2%
Operating Income (Loss)
by Operating Unit:
EM ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 22.7 $ 532.3 $ 421.7 (95.7)% 26.2%
CM ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 63.0 86.4 57.9 (27.1)% 49.2%
ACÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 42.8 63.9 20.5 (33.0)% 211.7%
Corporate ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (51.9) (101.4) (83.1) 48.8% (22.0)%
Operating income before special
charges ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 76.6 581.2 417.0 (86.8)% 39.4%
Special chargesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (79.6) (327.5) (49.0) 75.7% (568.4)%
$ (3.0) $ 253.7 $ 368.0 (101.2)% (31.1)%
The results of operations for 2002 reÖected dramatically diÅerent results from the prior year across nearly
every category of operational performance. Similarly, the Ñrst half of 2001 was substantially diÅerent than the
second half as the signiÑcant decline in market conditions referenced previously began in the December 2000
quarter (the second quarter of Ñscal 2001). The results for the Ñrst half of 2001 reÖected a strong electronic
component distribution industry where the Company posted both record revenues and earnings. The results for
the second half of 2001 and all of 2002 were then negatively aÅected by an abrupt and severe downturn in the
electronic components industry, compounded by a general slowdown in the global economic environment.
Company results reÖect these factors as, despite revenue growth and operating income growth before special
items over the course of both 2000 and 2001, the Company experienced declines in revenues, gross proÑt
margins, operating income margins, net income margins, and for the Ñrst time in over four decades, recorded a
net loss from continuing operations in 2002.
Most signiÑcantly impacted was EM, which showed signiÑcant deterioration in both sales and operating
income (before special charges) in 2002 as compared with 2001 and 2000. The dramatic drop in sales in 2002
is directly related to the sharp decline in semiconductor sales on a global level. This may also be indicative of a
technology industry shift in revenue mix away from the Americas, which declined year-over-year, partly
toward the Asia region where Avnet's 2002 operations were also bolstered by the acquisition of Sunrise late in
2001.
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