Avnet 2015 Annual Report Download - page 12

TableofContents
If the Company’s internal information systems fail to function properly, or if the Company is unsuccessful in the
implementation, integration or upgrade of information systems, its business operations could suffer.
TheCompanyisdependentonitsinformationsystemstofacilitatetheday-to-dayoperationsofthebusinessandtoproduce
timely, accurate and reliable information on financial and operational results. Currently, the Company’s global operationsare
trackedwithmultipleinformationsystems,someofwhicharesubjecttoongoingITprojectsdesignedtostreamlineoroptimize
the Company’s global information systems. These IT projects are extremely complex, in part, because of a wide range of
processes,themultiplelegacysystemsusedandtheCompany’sbusinessoperations.ThereisnoguaranteethattheCompanywill
besuccessful at all times in these efforts or that there willnotbeimplementationorintegrationdifficulties thatwilladversely
affecttheCompany’sabilitytocompletebusinesstransactionsandensureaccuraterecordingandreportingoffinancialdata.In
addition,the Company may be unabletoachievetheexpectedefficienciesandcostsavingsas a result oftheITprojects,thus
negativelyimpactingtheCompany’sfinancialresults.Afailureofanyoftheseinformationsystemsinawaydescribedaboveor
material difficulties in upgrading these information systems could have an adverse effect on the Company’s business, internal
controlsandreportingobligationsunderfederalsecuritieslaws.
The Company’s acquisition strategy may not produce the expected benefits, which may adversely affect the Company’s results
of operations.
Avnethasmade,andexpectstocontinuetomake,strategicacquisitionsorinvestmentsincompaniesaroundtheworldto
furtheritsstrategicobjectivesandsupportkeybusinessinitiatives.Acquisitionsandinvestmentsinvolverisksanduncertainties,
someof which may differfromthoseassociatedwithAvnet’shistorical operations. The risks relating to suchacquisitionsand
investments include, but are not limited to, risks relating to expanding into emerging markets and business areas, adding
additional product lines and services, impacting existing customer and supplier relationships, incurring costs or liabilities
associatedwiththecompaniesacquiredanddivertingmanagement’sattentionfromexistingbusinessoperations.Asaresult,the
Company’sprofitabilitymaybenegativelyimpacted.Inaddition,theCompanymaynotbesuccessfulinintegratingtheacquired
businessesortheintegrationmaybemoredifficult,costlyortime-consumingthananticipated.Further,anylitigationrelatingtoa
potentialacquisitionwillresultinanincreaseintheexpensesassociatedwiththeacquisitionorcauseadelayincompletingthe
acquisition,therebyimpactingtheCompany’sprofitability.TheCompanymayexperiencedisruptionsthatcould,dependingon
thesizeoftheacquisition, haveanadverse effect onitsbusiness, especially whereanacquisition targetmayhavepre-existing
complianceissuesorpre-existingdeficienciesormaterialweaknessesininternalcontrolsoverfinancialreporting.Furthermore,
theCompany may not realizealloftheanticipatedbenefitsfromitsacquisitions, which could adversely affect the Company’s
financialperformance.
Major disruptions to the Company’s logistics capability could have an adverse impact on the Company’s operations.
The Company’s global logistics services are operated through specialized, centralized or outsourced distribution centers
aroundtheglobe.TheCompanyalsodependsalmostentirelyonthird-partytransportationservice providersforthedeliveryof
productstoitscustomers.Amajorinterruptionordisruptioninserviceatoneormoreofitsdistributioncentersforanyreason
(suchasinformationtechnologyissues,naturaldisasters,pandemics,orsignificantdisruptionsofservicesfromtheCompany’s
third-partytransportationproviders)couldcausecancellationsordelaysinasignificantnumberofshipmentstocustomersand,as
a result, could have an adverse impact on the Company’s business partners, and on the Company’s business, operations and
financialperformance.
If the Company sustains cyber attacks or other privacy or data security incidents that result in security breaches, it could
suffer a loss of sales and increased costs, exposure to significant liability, reputational harm and other negative consequences.
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