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Table of Contents
AVNET, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Fiscal 2007 and prior restructuring reserves
During the second half of fiscal 2007, the Company incurred certain restructuring, integration and other items
primarily as a result of cost-reduction initiatives in all three regions and the acquisition of Access on December 31,
2006 (see Note 2). The Company established and approved plans for cost reduction initiatives across the Company
and approved plans to integrate the acquired Access business into Avnet’s existing TS operations, which was
completed as of the end of fiscal 2007.
During fiscal 2007, the Company recorded restructuring charges of $13,626,000 and also recorded in
“restructuring, integration and other charges” Access integration costs of $7,331,000, the write-down of $661,000
related to an Avnet-owned building in EMEA, and the reversal of $1,739,000 related primarily to excess severance
and lease reserves, certain of which were previously established through “restructuring, integration and other
charges” in prior fiscal periods. Partially offsetting these charges was a pre-
tax benefit of $12,526,000 which resulted
from the favorable outcome of a contingent liability acquired in connection with an acquisition completed in a prior
year. The impact of both the restructuring, integration and other charges and the acquisition related benefit recorded
during fiscal 2007 was $7,353,000 pre-tax, $5,289,000 after tax and $0.03 per share on a diluted basis.
Severance charges related to Avnet personnel reductions of 96 employees in all three regions of EM and
42 employees in TS Americas and EMEA (a total of 138 employees) in administrative, finance and sales functions
associated with the cost reduction initiatives implemented during the third and fourth quarter of fiscal 2007 as part of
the Company’s continuing focus on operational efficiency and Avnet employees who were deemed redundant as a
result of the Access integration. The facility exit charges related to vacated Avnet facilities in the Americas and
Japan. Other charges consisted primarily of IT-related and other asset write-downs and other contract termination
costs. Included in the asset write-downs were Avnet software in the Americas that was made redundant as a result of
the acquisition, Avnet system hardware in EMEA that was replaced with higher capacity hardware to handle
increased capacity due to the addition of Access, and the write-down of certain capitalized construction costs
abandoned as a result of the acquisition. Other charges incurred included contractual obligations related to abandoned
activities, the write-down of an Avnet-owned building in EMEA and Access integration costs. The write-
down of the
building was based on management’s estimate of the current market value and possible selling price, net of selling
costs, for the property. The integration costs related to incremental salary costs, primarily of Access personnel, who
were retained following the close of the acquisition solely to assist in the integration of Access’s IT systems,
administrative and logistics operations into those of Avnet. These personnel had no other meaningful day-to-day
operational responsibilities outside of the integration efforts. Also included in integration costs are certain
professional fees, travel, meeting, marketing and communication costs that were incrementally incurred solely related
to the Access integration efforts.
In addition to the fiscal 2007 restructuring activity, the Company incurred restructuring charges under three
separate restructuring plans prior to fiscal 2007. The table below presents the activity during fiscal 2009 related to
reserves established as part of these restructuring plans:
74
Memec
Other
FY 2004
Restructuring charges
FY 2007
FY 2006
FY 2006
and 2003
Total
(Thousands)
Balance at June 28, 2008
$
549
$
45
$
794
$
2,571
$
3,959
Amounts utilized
(269
)
(27
)
(376
)
(1,116
)
(1,788
)
Adjustments
(60
)
—
—
—
(
60
)
Other, principally foreign currency translation
(30
)
(6
)
(5
)
(263
)
(304
)
Balance at June 27, 2009
$
190
$
12
$
413
$
1,192
$
1,807