Avnet 2003 Annual Report Download - page 62
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Please find page 62 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.AVNET, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Ì Continued
SFAS 150 establishes standards for classiÑcation and measurement of certain Ñnancial instruments.
SFAS 150 is eÅective for any Ñnancial instruments entered into or modiÑed after May 31, 2003 and Avnet
adopted SFAS 150, as required, for any previously existing Ñnancial instruments as of June 28, 2003. The
adoption of SFAS 150 did not have a material eÅect on the Company's consolidated Ñnancial statements.
2. Acquisitions and dispositions:
During the last three Ñscal years, the Company has completed six acquisitions Ì two in North America,
two in Europe, one in the Asia/PaciÑc region and one in the Middle East. One of the acquisitions was
completed in 2002 and Ñve of the acquisitions were completed in 2001. All acquisitions, except for the
acquisition of Kent discussed below and in Note 1, have been accounted for as purchases.
During 2003, the Company acquired the remaining 40% interest in Max India Ltd. as well as the
remaining interests in various Israeli subsidiaries of Avnet Components Israel Ltd. The Company also
completed contingent purchase price payments associated with companies acquired in previous years including
Sunrise Technology Ltd. and Avnet Italy. The acquisitions of these remaining minority interests and the
contingent purchase price payments required a total investment of $9,210,000, all of which was paid in cash.
In 2002, the Company completed the acquisition of Gamma Optronik AB, as well as certain contingent
purchase price payments associated with businesses acquired in prior Ñscal years (principally, Sunrise
Technology Ltd., RDT Technologies Ltd., PCD Italia S.r.l. and Matica S.p.A. and Savoir Technology Group,
Inc.), the acquisition of the remaining 20% interest in Kopp Electronics Limited and further investment in an
unconsolidated business. These transactions required a total investment of $34,091,000 (net of $1,462,000 of
cash on the books of Gamma Optronik AB at its acquisition date), all of which was paid in cash. Gamma
Optronik AB had sales totaling approximately $7,534,000 during its Ñscal year immediately preceding its
acquisition. The historical results of operations of the acquired company would not have had a material eÅect
on the Company's consolidated results of operations and therefore no unaudited pro forma results are
presented herein.
The acquisitions completed during 2001 consisted principally of Kent, Sunrise Technology Ltd., RDT
Technologies Ltd., certain European operations of the VEBA Electronics Group (consisting of EBV, WBC,
Atlas Logistics and RKE Systems, collectively, the ""VEBA Group'') and Savoir Technology Group, Inc.
These acquisitions, excluding the Kent acquisition which was accounted for as a ""pooling-of-interests,''
required a total investment of $876,079,000 (net of $74,423,000 of cash on the books of the companies
acquired), of which $789,599,000 was paid in cash (excluding $32,200,000 to pay oÅ pre-existing debt),
$111,065,000 was paid in Avnet stock and $714,000 was paid in Avnet stock options (net of related tax
beneÑts of $454,000), less a receivable of $25,299,000 for income tax credits related to the acquisition of the
VEBA Group. In addition, the Company paid $79,063,000 of Kent acquisition-related costs, consisting
primarily of change-in-control and other executive beneÑt-related payments and professional fees for
investment banking, legal and accounting services rendered to both Avnet and Kent. In the aggregate, the
operations acquired during 2001, excluding Kent, had sales totaling approximately $2,887,000,000 during the
Ñscal year of each such operation immediately preceding its acquisition. The historical results of operations of
the companies other than Kent that were acquired during 2001 would not have had a material eÅect on the
Company's results of operations and therefore no unaudited pro forma results are presented herein. The
Company also sold certain small non-core operations during 2001, the impact of which was not material.
During 2003, the Company and the seller of the VEBA Group resolved certain purchase price
contingencies related to this acquisition. This resolution resulted in a refund to Avnet, totaling approximately
$6,486,000, of a portion of the amount paid by Avnet at the closing of the acquisition. The refunded purchase
price was recorded as a reduction of operating expenses in the 2003 consolidated statement of operations as
the goodwill related to the VEBA Group had been written oÅ as a result of the transition impairment test
performed upon the adoption of SFAS 142 (see Note 6).
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