Avnet 2003 Annual Report Download - page 63
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Please find page 63 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
As discussed in Note 1, the accompanying consolidated Ñnancial statements and notes have been restated
to reÖect the acquisition of Kent, which was accounted for as a ""pooling-of-interests.'' Each share of Kent
common stock was converted into 0.87 shares of Avnet common stock. A total of approximately 25.3 million
Avnet common shares were issued for the outstanding stock of Kent and an additional 1.7 million shares were
reserved for issuance upon the exercise of outstanding warrants and stock options assumed in the transaction.
Kent's results of operations for the period from July 1, 2000 to June 8, 2001 and for its Ñscal year ended
April 1, 2000 were combined with Avnet's results of operations for the years ended June 29, 2001 and June 30,
2000, respectively. In addition, Kent's balance sheet as of April 1, 2000 was combined with Avnet's balance
sheet as of June 30, 2000. Therefore, an adjustment was made to retained earnings to include $8,819,000 of
net income for Kent for the three months ended June 30, 2000 as these earnings were not included in any of
the statements of operations otherwise presented. For the same three months, Kent's sales of $223,313,000
and Kent's cash Öows (used for) provided from operating, Ñnancing and investing activities of ($26,644,000),
$1,443,000 and $8,788,000, respectively, have been excluded from the consolidated statements of operations
and cash Öows, respectively. The restated Ñnancial information includes certain reclassiÑcations to conform
Kent's Ñnancial statement presentation to that of Avnet. Intercompany transactions between the combined
companies were not material.
The following table is a reconciliation of the results of operations of the previously separate Avnet and
Kent companies to reported combined results of operations for the most recent interim period preceding the
acquisition:
Avnet Before Kent Before Avnet as
Pooling Pooling Restated
(Thousands)
Nine months ended March 30, 2001
Sales ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $9,557,204 $719,051 $10,276,255
Income from continuing operations ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 205,596 25,536 231,132
Net incomeÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 205,596 45,952 251,548
Disposition of discontinued operations:
On October 10, 2000, Kent sold K*TEC Electronics Corporation (""K*TEC''), its contract manufactur-
ing operation, for $237,200,000, consisting of $175,000,000 in cash, a $50,000,000 senior secured note which
was redeemed on January 26, 2001 and a $12,200,000 unsecured note which was settled during 2002. A gain
on the sale of K*TEC of approximately $21,500,000 pre-tax, $12,889,000 after-tax, or $0.11 per diluted share,
was recorded in 2001. The net assets and operations of K*TEC are reÖected as discontinued operations in the
accompanying consolidated Ñnancial statements for 2001. Corporate and shared general and administrative
costs of the Company were not allocated to discontinued operations. The net assets and results of operations of
K*TEC were not material in 2001 and therefore the condensed Ñnancial information of the discontinued
operations has not been presented herein.
3. Accounts receivable securitization:
The Company has an accounts receivable securitization program (the ""Program'') with two Ñnancial
institutions that allows the Company to sell, on a revolving basis, an undivided interest of up to $350,000,000
in eligible U.S. receivables while retaining a subordinated interest in a portion of the receivables. The eligible
receivables are sold without legal recourse to third party conduits through a wholly owned bankruptcy-remote
special purpose entity that is consolidated for Ñnancial reporting purposes. The Company continues servicing
the sold receivables and charges the third party conduits a monthly servicing fee at market rates; accordingly,
no servicing asset or liability has been recorded. Cash received from the Program has been used primarily to
pay down outstanding external Ñnancing.
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