Avnet 2002 Annual Report Download - page 42

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Liquidity
The following table highlights the Company's liquidity and related ratios for the past two years:
COMPARATIVE ANALYSIS Ì LIQUIDITY
(Dollars in millions)
Percentage
Years Ended Change
June 28, 2002 June 29, 2001 2002 to 2001
Current Assets ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $3,205.5 $3,747.5 (14.5%)
Quick AssetsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,533.2 1,726.8 (11.2%)
Current Liabilities ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,276.8 2,570.0 (50.3%)
Working Capital ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,928.7 1,177.4 63.8%
Total DebtÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,625.1 2,221.6 (26.8%)
Total CapitalÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3,429.7 4,596.2 (25.4%)
Quick Ratio ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1.2:1 0.7:1
Working Capital Ratio ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2.5:1 1.5:1
Debt to Total CapitalÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 47.4% 48.3%
The Company's quick assets at June 28, 2002 totaled $1.533 billion as compared with $1.727 billion at
June 29, 2001. This decrease in quick assets of 11.2% was due primarily to the utilization of cash available
throughout the year to partially pay down outstanding debt and due to the reduction of receivables outstanding
resulting from the decrease in sales, the impact of the Company's accounts receivable securitization program
as described previously and the Company's eÅorts to manage working capital. Quick assets exceeded the
Company's current liabilities by $256.4 million as compared with a deÑcit of $843.2 million at the end of 2001.
Working capital at June 28, 2002 was $1.929 billion as compared with $1.177 billion at the end of 2001. At
June 28, 2002, to support each dollar of current liabilities, the Company had $1.20 of quick assets and $1.31 of
other current assets as compared with $0.67 of quick assets and $0.79 of other current assets at the end of
2001. The improvement in these ratios year-over-year is directly related to the liquidation of debt by the
Company throughout 2002. Additionally, at the end of 2001, the Company had classiÑed as current a total of
$796.8 million of debt related to both the Kent 4.5% Convertible Notes due 2004, substantially all of which
were ""put'' back to the Company in 2002, and amounts outstanding under a long-term bank facility the
Company was in the process of renegotiating at the end of 2001.
On August 15, 2001, the Company announced that it would look to more eÅectively deploy its cash to
fuel future earnings growth and deliver increased shareholder value by discontinuing the payment of its cash
dividend eÅective after its dividend payment made on January 2, 2002.
Currently, the Company does not have any material commitments for capital expenditures.
Long-Term Contractual Obligations
The Company has the following contractual obligations outstanding as of June 28, 2002 (in millions):
Due in Less Due in Due in Due After
Total than 1 Year 1-3 Years 4-5 Years 5 Years
Long-term debt, including amounts due
within one year ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $1,618.1 $ 59.3 $1,154.0 $400.8 $ 4.0
Operating leases ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 220.7 51.0 75.5 43.2 51.0
$1,838.8 $110.3 $1,229.5 $444.0 $55.0
As discussed in ""Capital Structure,'' the Company has two interest rate swaps outstanding on one of its
Ñxed rate debt instruments which have yielded, in accordance with SFAS 133, as amended, a fair value
31