Avnet 2003 Annual Report Download - page 14
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Please find page 14 of the 2003 Avnet annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.PART I
Item 1. Business*
Avnet, Inc., incorporated in New York in 1955, together with its subsidiaries (the ""Company'' or
""Avnet''), is one of the world's largest industrial distributors, based on sales, of electronic components,
enterprise network and computer equipment and embedded subsystems, with sales in 2003 of $9.05 billion.
Avnet creates a vital link in the technology supply chain that connects over 250 of the world's leading
electronic component and computer product manufacturers to a global customer base of over 100,000 original
equipment manufacturers (""OEMs''), contract manufacturers, value-added resellers (""VARs'') and end-
users. Avnet distributes electronic components and computer products as received from its suppliers or with
assembly or other value added by Avnet. Additionally, Avnet provides engineering design, materials
management and logistics services, system integration and conÑguration, and supply chain advisory services.
Organizational Structure
As of the end of 2003, the Company was comprised of three global operating groups: Electronics
Marketing (""EM''), Computer Marketing (""CM'') and Applied Computing (""AC''). Under the operating
group structure as of the end of 2003 and in the current structure discussed below, each operating group has its
own senior management team that is led by a group president and includes other senior executives within the
group that manage the group's accounting and Ñnance, information systems, facilities, warehousing and other
administrative tasks for each group as a whole. Each operating group also has distinct Ñnancial reporting that
is evaluated at the corporate level and on which operating decisions and strategic planning for the Company as
a whole are made. EM, CM and AC were the overall segments upon which Avnet's management primarily
evaluated the operations of the Company and upon which it based its operating decisions through the end of
Ñscal 2003. Divisions exist within each operating group that serve primarily as sales and marketing units to
further streamline the sales and marketing eÅorts within each operating group and to enhance each operating
group's ability to work with its customers and suppliers, generally along more speciÑc product lines or based
upon geography. However, each division relies heavily on the support services that are provided centrally
within each operating group and by centralized support at the corporate level. These divisions are speciÑcally
discussed in the operating group discussions below.
Subsequent to 2003, management announced plans to combine CM and AC into one computer products
and services operating group called Avnet Technology Solutions (""ATS''). This combination will continue to
bring to market all value propositions contained within the two former operating groups and is part of Avnet's
continued eÅorts to strengthen its market leadership position, streamline operations and produce further cost
savings. The rationalization of certain operating facilities, equipment and processes is expected to yield
signiÑcant cost savings while also stimulating new marketing opportunities for the combined group by selling
from a broader, shared line card of products and services to customers that will be served by the larger,
combined operating group. See ""Restructuring and Other Charges'' appearing in Item 7 of this Report for
further discussion of the restructuring eÅorts surrounding the combination of these two operating groups as
well as the beneÑts and cost savings that management expects will result.
A summary of each operating group, based on the three-group structure in place as of June 27, 2003, is
included below. Further Ñnancial information by segment and geography are also contained in Note 16 to the
consolidated Ñnancial statements appearing in Item 15 of this Report.
* Unless otherwise speciÑcally indicated, references in this Report to any particular year or quarter
generally are to the Company's Ñscal year period. The Company's Ñscal year ends on the Friday closest
to June 30th (Saturday closest to June 30th commencing in 2004).
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