Document and Entity Information
Document and Entity Information Document - shares | 9 Months Ended | |
Mar. 28, 2020 | Apr. 23, 2020 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 28, 2020 | |
Document Transition Report | false | |
Entity File Number | 1-4224 | |
Entity Registrant Name | AVNET, INC. | |
Entity Incorporation, State or Country Code | NY | |
Entity Tax Identification Number | 11-1890605 | |
Entity Address, Address Line One | 2211 South 47th Street | |
Entity Address, City or Town | Phoenix | |
Entity Address, State or Province | AZ | |
Entity Address, Postal Zip Code | 85034 | |
City Area Code | 480 | |
Local Phone Number | 643-2000 | |
Title of 12(b) Security | Common stock, par value $1.00 per share | |
Trading Symbol | AVT | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 98,746,669 | |
Entity Central Index Key | 0000008858 | |
Current Fiscal Year End Date | --06-27 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 28, 2020 | Jun. 29, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 402,655 | $ 546,105 |
Receivables, less allowances of $50,874 and $53,499, respectively | 2,987,791 | 3,168,369 |
Inventories | 2,745,219 | 3,008,424 |
Prepaid and other current assets | 180,956 | 153,438 |
Total current assets | 6,316,621 | 6,876,336 |
Property, plant and equipment, net | 413,371 | 452,171 |
Goodwill | 760,939 | 876,728 |
Intangible assets, net | 77,306 | 143,520 |
Operating lease assets (Note 5) | 271,243 | |
Other assets | 250,248 | 215,801 |
Total assets | 8,089,728 | 8,564,556 |
Current liabilities: | ||
Short-term debt | 399,965 | 300,538 |
Accounts payable | 1,733,673 | 1,864,342 |
Accrued expenses and other | 418,654 | 413,696 |
Short-term operating lease liabilities (Note 5) | 55,496 | |
Total current liabilities | 2,607,788 | 2,578,576 |
Long-term debt | 1,194,240 | 1,419,922 |
Long-term operating lease liabilities (Note 5) | 247,539 | |
Other liabilities | 362,883 | 425,585 |
Total liabilities | 4,412,450 | 4,424,083 |
Commitments and contingencies (Note 7) | ||
Shareholders' equity: | ||
Common stock $1.00 par; authorized 300,000,000 shares; issued 98,760,983 shares and 104,037,769 shares, respectively | 98,761 | 104,038 |
Additional paid-in capital | 1,587,294 | 1,573,005 |
Retained earnings | 2,390,425 | 2,767,469 |
Accumulated other comprehensive loss | (399,202) | (304,039) |
Total shareholders' equity | 3,677,278 | 4,140,473 |
Total liabilities and shareholders' equity | $ 8,089,728 | $ 8,564,556 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Mar. 28, 2020 | Jun. 29, 2019 |
Current assets: | ||
Allowance for doubtful accounts receivable, current (in dollars) | $ 50,874 | $ 53,499 |
Stockholders' equity: | ||
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares, issued | 98,760,983 | 104,037,769 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 28, 2020 | Mar. 30, 2019 | Mar. 28, 2020 | Mar. 30, 2019 | |
Income Statement [Abstract] | ||||
Sales | $ 4,309,818 | $ 4,698,824 | $ 13,474,632 | $ 14,837,683 |
Revenue, Product and Service [Extensible List] | us-gaap:TechnologyServiceMember | us-gaap:TechnologyServiceMember | us-gaap:TechnologyServiceMember | us-gaap:TechnologyServiceMember |
Cost of sales | $ 3,790,885 | $ 4,074,629 | $ 11,886,247 | $ 12,946,706 |
Cost, Product and Service [Extensible List] | us-gaap:TechnologyServiceMember | us-gaap:TechnologyServiceMember | us-gaap:TechnologyServiceMember | us-gaap:TechnologyServiceMember |
Gross profit | $ 518,933 | $ 624,195 | $ 1,588,385 | $ 1,890,977 |
Selling, general and administrative expenses | 469,646 | 468,171 | 1,391,024 | 1,415,040 |
Goodwill and intangible asset impairment | 145,836 | 145,836 | ||
Restructuring, integration and other expenses | 19,211 | 2,939 | 58,073 | 79,986 |
Operating (loss) income | (115,760) | 153,085 | (6,548) | 395,951 |
Other (expense) income, net | (12,608) | 8,731 | (8,162) | 9,424 |
Interest and other financing expenses, net | (29,718) | (36,253) | (97,254) | (100,064) |
Income (loss) from continuing operations before taxes | (158,086) | 125,563 | (111,964) | 305,311 |
Income tax (benefit) expense | (29,425) | 30,628 | (30,270) | 90,072 |
Income (loss) from continuing operations, net of tax | (128,661) | 94,935 | (81,694) | 215,239 |
Loss from discontinued operations, net of tax | (6,887) | (1,548) | (7,066) | |
Net (loss) income | $ (128,661) | $ 88,048 | $ (83,242) | $ 208,173 |
Earnings (loss) per share: | ||||
Basic (loss) earnings per share-continuing operations | $ (1.29) | $ 0.87 | $ (0.81) | $ 1.93 |
Basic loss per share-discontinued operations | (0.06) | (0.01) | (0.06) | |
Basic (loss) earnings per share | (1.29) | 0.81 | (0.82) | 1.87 |
Diluted (loss) earnings per share-continuing operations | (1.29) | 0.87 | (0.81) | 1.91 |
Diluted loss per share-discontinued operations | (0.06) | (0.01) | (0.06) | |
Diluted (loss) earnings per share | $ (1.29) | $ 0.81 | $ (0.82) | $ 1.85 |
Shares used to compute earnings per share: | ||||
Basic | 99,479 | 108,074 | 101,013 | 111,222 |
Diluted | 99,479 | 108,822 | 101,013 | 112,252 |
Cash dividends paid per common share | $ 0.21 | $ 0.20 | $ 0.63 | $ 0.60 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 28, 2020 | Mar. 30, 2019 | Mar. 28, 2020 | Mar. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net (loss) income | $ (128,661) | $ 88,048 | $ (83,242) | $ 208,173 |
Other comprehensive income (loss), net of tax: | ||||
Foreign currency translation and other | (96,351) | 1,193 | (105,311) | (55,203) |
Pension adjustments, net | 3,167 | 1,249 | 10,148 | 6,212 |
Total comprehensive (loss) income | $ (221,845) | $ 90,490 | $ (178,405) | $ 159,182 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive (Loss) Income | Total |
Stockholders' Equity Attributable to Parent, Beginning Balance at Jun. 30, 2018 | $ 115,825 | $ 1,528,713 | $ 3,235,894 | $ (195,351) | $ 4,685,081 |
Shares issued Beginning Balance at Jun. 30, 2018 | 115,825,000 | ||||
Net (loss) income | 83,724 | 83,724 | |||
Translation adjustments and other | 8,801 | 8,801 | |||
Pension liability adjustment, net | 756 | 756 | |||
Cash dividends | (22,932) | (22,932) | |||
Repurchases of common stock | $ (3,315) | (153,582) | (156,897) | ||
Repurchase of common stock (in shares) | (3,315,000) | ||||
Stock-based compensation | $ 521 | 25,851 | 26,372 | ||
Stock-based compensation (in shares) | 521,000 | ||||
Shares issued Ending Balance at Sep. 29, 2018 | 113,031,000 | ||||
Stockholders' Equity Attributable to Parent, Ending Balance at Sep. 29, 2018 | $ 113,031 | 1,554,564 | 3,139,272 | (185,794) | 4,621,073 |
Stockholders' Equity Attributable to Parent, Beginning Balance at Jun. 30, 2018 | $ 115,825 | 1,528,713 | 3,235,894 | (195,351) | 4,685,081 |
Shares issued Beginning Balance at Jun. 30, 2018 | 115,825,000 | ||||
Net (loss) income | 208,173 | ||||
Pension liability adjustment, net | 6,212 | ||||
Shares issued Ending Balance at Mar. 30, 2019 | 106,654,000 | ||||
Stockholders' Equity Attributable to Parent, Ending Balance at Mar. 30, 2019 | $ 106,654 | 1,565,083 | 2,935,077 | (244,342) | 4,362,472 |
Effects of new accounting principles | (3,832) | (3,832) | |||
Stockholders' Equity Attributable to Parent, Beginning Balance at Sep. 29, 2018 | $ 113,031 | 1,554,564 | 3,139,272 | (185,794) | 4,621,073 |
Shares issued Beginning Balance at Sep. 29, 2018 | 113,031,000 | ||||
Net (loss) income | 36,401 | 36,401 | |||
Translation adjustments and other | (65,197) | (65,197) | |||
Pension liability adjustment, net | 4,207 | 4,207 | |||
Cash dividends | (21,769) | (21,769) | |||
Repurchases of common stock | $ (4,116) | (170,967) | (175,083) | ||
Repurchase of common stock (in shares) | (4,116,000) | ||||
Stock-based compensation | $ 36 | 9,069 | 9,105 | ||
Stock-based compensation (in shares) | 36,000 | ||||
Shares issued Ending Balance at Dec. 29, 2018 | 108,951,000 | ||||
Stockholders' Equity Attributable to Parent, Ending Balance at Dec. 29, 2018 | $ 108,951 | 1,563,633 | 2,982,937 | (246,784) | 4,408,737 |
Net (loss) income | 88,048 | 88,048 | |||
Translation adjustments and other | 1,193 | 1,193 | |||
Pension liability adjustment, net | 1,249 | 1,249 | |||
Cash dividends | (21,487) | (21,487) | |||
Repurchases of common stock | $ (2,816) | (114,421) | (117,237) | ||
Repurchase of common stock (in shares) | (2,816,000) | ||||
Stock-based compensation | $ 519 | 1,450 | 1,969 | ||
Stock-based compensation (in shares) | 519,000 | ||||
Shares issued Ending Balance at Mar. 30, 2019 | 106,654,000 | ||||
Stockholders' Equity Attributable to Parent, Ending Balance at Mar. 30, 2019 | $ 106,654 | 1,565,083 | 2,935,077 | (244,342) | 4,362,472 |
Stockholders' Equity Attributable to Parent, Beginning Balance at Jun. 29, 2019 | $ 104,038 | 1,573,005 | 2,767,469 | (304,039) | $ 4,140,473 |
Shares issued Beginning Balance at Jun. 29, 2019 | 104,038,000 | 104,037,769 | |||
Net (loss) income | 41,752 | $ 41,752 | |||
Translation adjustments and other | (102,146) | (102,146) | |||
Pension liability adjustment, net | 3,813 | 3,813 | |||
Cash dividends | (21,451) | (21,451) | |||
Repurchases of common stock | $ (2,631) | (109,504) | (112,135) | ||
Repurchase of common stock (in shares) | (2,631,000) | ||||
Stock-based compensation | $ 64 | 7,701 | 7,765 | ||
Stock-based compensation (in shares) | 64,000 | ||||
Shares issued Ending Balance at Sep. 28, 2019 | 101,471,000 | ||||
Stockholders' Equity Attributable to Parent, Ending Balance at Sep. 28, 2019 | $ 101,471 | 1,580,706 | 2,678,266 | (402,372) | 3,958,071 |
Stockholders' Equity Attributable to Parent, Beginning Balance at Jun. 29, 2019 | $ 104,038 | 1,573,005 | 2,767,469 | (304,039) | $ 4,140,473 |
Shares issued Beginning Balance at Jun. 29, 2019 | 104,038,000 | 104,037,769 | |||
Net (loss) income | $ (83,242) | ||||
Pension liability adjustment, net | $ 10,148 | ||||
Shares issued Ending Balance at Mar. 28, 2020 | 98,761,000 | 98,760,983 | |||
Stockholders' Equity Attributable to Parent, Ending Balance at Mar. 28, 2020 | $ 98,761 | 1,587,294 | 2,390,425 | (399,202) | $ 3,677,278 |
Stockholders' Equity Attributable to Parent, Beginning Balance at Sep. 28, 2019 | $ 101,471 | 1,580,706 | 2,678,266 | (402,372) | 3,958,071 |
Shares issued Beginning Balance at Sep. 28, 2019 | 101,471,000 | ||||
Net (loss) income | 3,668 | 3,668 | |||
Translation adjustments and other | 93,186 | 93,186 | |||
Pension liability adjustment, net | 3,168 | 3,168 | |||
Cash dividends | (20,975) | (20,975) | |||
Repurchases of common stock | $ (2,135) | (85,423) | (87,558) | ||
Repurchase of common stock (in shares) | (2,135,000) | ||||
Stock-based compensation | $ 13 | 7,760 | 7,773 | ||
Stock-based compensation (in shares) | 13,000 | ||||
Shares issued Ending Balance at Dec. 28, 2019 | 99,349,000 | ||||
Stockholders' Equity Attributable to Parent, Ending Balance at Dec. 28, 2019 | $ 99,349 | 1,588,466 | 2,575,536 | (306,018) | 3,957,333 |
Net (loss) income | (128,661) | (128,661) | |||
Translation adjustments and other | (96,351) | (96,351) | |||
Pension liability adjustment, net | 3,167 | 3,167 | |||
Cash dividends | (20,810) | (20,810) | |||
Repurchases of common stock | $ (1,104) | (35,640) | (36,744) | ||
Repurchase of common stock (in shares) | (1,104,000) | ||||
Stock-based compensation | $ 516 | (1,172) | $ (656) | ||
Stock-based compensation (in shares) | 516,000 | ||||
Shares issued Ending Balance at Mar. 28, 2020 | 98,761,000 | 98,760,983 | |||
Stockholders' Equity Attributable to Parent, Ending Balance at Mar. 28, 2020 | $ 98,761 | $ 1,587,294 | $ 2,390,425 | $ (399,202) | $ 3,677,278 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Mar. 28, 2020 | Mar. 30, 2019 | |
Cash flows from operating activities: | ||
Net (loss) income | $ (83,242) | $ 208,173 |
Less: Loss from discontinued operations, net of tax | (1,548) | (7,066) |
Income (loss) from continuing operations, net of tax | (81,694) | 215,239 |
Non-cash and other reconciling items: | ||
Depreciation | 75,535 | 72,692 |
Amortization | 62,240 | 63,123 |
Amortization of Operating Lease Assets | 46,560 | |
Deferred income taxes | (42,529) | 45,286 |
Stock-based compensation | 20,757 | 24,204 |
Goodwill and intangible asset impairment | 145,836 | |
Other, net | 35,000 | 42,786 |
Changes in (net of effects from businesses acquired and divested): | ||
Receivables | 150,095 | 436,382 |
Inventories | 227,996 | (125,410) |
Accounts payable | (112,923) | (399,526) |
Accrued expenses and other, net | (84,263) | (118,347) |
Net cash flows provided by operating activities - continuing operations | 442,610 | 256,429 |
Net cash flows used for operating activities - discontinued operations | (56,284) | |
Net cash flows provided by operating activities | 442,610 | 200,145 |
Cash flows from financing activities: | ||
Borrowings (repayments) under accounts receivable securitization, net | (127,400) | 342,000 |
Repayments under bank credit facilities and other debt, net | (1,639) | (11,386) |
Borrowings (repayments) under senior unsecured credit facility, net | (1,194) | 85,005 |
Repurchases of common stock | (235,830) | (447,901) |
Dividends paid on common stock | (63,235) | (66,188) |
Other, net | (15,132) | 10,042 |
Net cash flows used for financing activities - continuing operations | (444,430) | (88,428) |
Net cash flows used for financing activities | (444,430) | (88,428) |
Cash flows from investing activities: | ||
Purchases of property, plant and equipment | (61,156) | (101,383) |
Acquisitions of businesses, net of cash acquired | (51,509) | (66,458) |
Other, net | (12,547) | 42,069 |
Net cash flows used for investing activities - continuing operations | (125,212) | (125,772) |
Net cash flows provided by investing activities - discontinued operations | 123,473 | |
Net cash flows used for investing activities | (125,212) | (2,299) |
Effect on currency exchange rate changes on cash and cash equivalents | (16,418) | (5,291) |
Cash and cash equivalents: | ||
(Decrease) increase | (143,450) | 104,127 |
Cash and cash equivalents at beginning of year | 546,105 | 621,125 |
Cash and cash equivalents at end of year | $ 402,655 | $ 725,252 |
Basis of presentation and new a
Basis of presentation and new accounting pronouncements | 9 Months Ended |
Mar. 28, 2020 | |
Basis of presentation and new accounting pronouncements | |
Basis of presentation and new accounting pronouncements | 1. Basis of presentation and new accounting pronouncements In the opinion of management, the accompanying unaudited interim consolidated financial statements contain all adjustments necessary to present fairly Avnet, Inc. and its consolidated subsidiaries’ (collectively, the “Company” or “Avnet”) financial position, results of operations, comprehensive income and cash flows. All such adjustments are of a normal recurring nature. The preparation of financial statements in accordance with generally accepted accounting principles in the United States (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements. Actual results may differ from these estimates and assumptions. Interim results of operations are not necessarily indicative of the results to be expected for the full fiscal year. The information included in this Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 29, 2019. Certain reclassifications have been made in prior periods to conform to the current period presentation. Recently adopted accounting pronouncements The Company adopted Accounting Standards Update (“ASU”) No. 2016-02, “Leases (Topic 842),” The adoption of ASC 842 did not have a material impact on the Company’s consolidated statements of operations or retained earnings. The Company elected the package of practical expedients permitted under the transition guidance that allowed, among other things, the historical lease classification to be carried forward without reassessment and the hindsight practical expedient. The Company elected to not separate lease and non-lease components for its real estate leases. Refer to Note 5 for additional disclosures related to leases. In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815) - Targeted Improvements to Accounting for Hedging Activities” Recently issued accounting pronouncements In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting In January 2020, the FASB issued ASU No. 2020-01 - Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)-Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes (Topic 740) In August 2018, the FASB issued ASU No. 2018-15, Intangibles—Goodwill and Other— Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force) In August 2018, the FASB issued ASU No. 2018-14, Compensation-Retirement Benefits-Defined Benefit Plans-General (Subtopic 715-20): Disclosure Framework-Changes to the Disclosure Requirements for Defined Benefit Plans In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments |
Acquisitions and discontinued o
Acquisitions and discontinued operations | 9 Months Ended |
Mar. 28, 2020 | |
Acquisitions and discontinued operations | |
Acquisitions and Discontinued operations | 2. Acquisitions and discontinued operations Acquisitions In the second quarter of fiscal 2020, the Company completed two acquisitions. The impact of these acquisitions was not material to the Company’s consolidated balance sheets or statements of operations and as a result, the Company has not disclosed the preliminary allocation of purchase price or the pro-forma impact of the acquisition. See Note 3 for further discussion of impairment considerations related to goodwill and long-lived assets. Discontinued Operations In February 2017, the Company completed the sale of its Technology Solutions business (“TS business”) to Tech Data Corporation (the “Buyer”). The TS business and the financial impacts of the divestiture are classified as discontinued operations in all periods presented. In August 2018, the Company executed a settlement agreement with the Buyer resulting in a final sales price increase of $120.0 million and a final geographic allocation of the TS business sales price for tax reporting purposes. This incremental consideration received from the sale of the TS business as well as cash settlements from the resolution of indemnification claims and other cash reimbursements have been classified as cash flows from discontinued operations investing activities. Income tax payments related to the gain on sale of the TS business have been classified as cash flows from discontinued operations operating activities. Under the contractual terms of the sale of the TS business, the Company has indemnified the Buyer for certain liabilities including tax related matters, which may result in future indemnification expenses and indemnification payments to the Buyer depending upon the outcome of those matters subject to indemnification. |
Goodwill and intangible assets
Goodwill and intangible assets | 9 Months Ended |
Mar. 28, 2020 | |
Goodwill and intangible assets | |
Goodwill and intangible assets | 3. Goodwill and intangible assets Goodwill The following table presents the change in goodwill by reportable segment for the nine months ended March 28, 2020. Electronic Components Farnell Total (Thousands) Carrying value at June 29, 2019 (1) $ 390,896 $ 485,832 $ 876,728 Additions from acquisitions 30,562 — 30,562 Impairment of goodwill (120,475) — (120,475) Foreign currency translation (5,970) (19,906) (25,876) Carrying value at March 28, 2020 (1) $ 295,013 $ 465,926 $ 760,939 (1) Includes accumulated impairment of $1,045,110 from fiscal 2009, $181,440 from fiscal 2018 and $137,396 from fiscal 2019 The Company evaluates each quarter if facts and circumstances indicate that it is more likely than not that the fair value of its reporting units is less than their carrying value, which would require the Company to perform an interim goodwill impairment test. Indicators the Company evaluates to determine whether an interim goodwill impairment test is necessary include, but are not limited to, (i) a sustained decrease in share price or market capitalization as of any fiscal quarter end, (ii) changes in macroeconomic or industry environments, (iii) the results of and the amount of time passed since the last goodwill impairment test and (iv) the long-term expected financial performance of its reporting units. Intangible Assets The following table presents the Company’s acquired intangible assets at March 28, 2020 and June 29, 2019, respectively. March 28, 2020 June 29, 2019 Acquired Accumulated Net Book Acquired Accumulated Net Book Amount (1) Amortization Value Amount Amortization Value (Thousands) Customer related $ 290,199 $ (247,495) $ 42,704 $ 292,266 $ (208,329) $ 83,937 Trade name 50,627 (29,810) 20,817 52,760 (24,752) 28,008 Technology and other 52,674 (38,889) 13,785 63,753 (32,178) 31,575 $ 393,500 $ (316,194) $ 77,306 $ 408,779 $ (265,259) $ 143,520 (1) Includes intangible asset impairment of $17,494 in the third quarter of fiscal 2020 Intangible asset amortization expense from continuing operations was $21.0 million and $21.9 million for the third quarters of fiscal 2020 and 2019, respectively, and $62.2 million and $63.1 million for the first nine months of fiscal 2020 and 2019, respectively. Intangible assets have a weighted average remaining useful life of approximately 2 years. The following table presents the estimated future amortization expense for the remainder of fiscal 2020 and the next five fiscal years (in thousands): Fiscal Year Remainder of fiscal 2020 $ 18,708 2021 36,410 2022 12,610 2023 4,795 2024 1,472 2025 3,311 Total $ 77,306 Goodwill and intangible asset impairment expense An interim goodwill impairment test was performed as of March 28, 2020. The macroeconomic impacts of the global coronavirus pandemic (“COVID-19”) and the corresponding decline in the Company’s share price below tangible book value, were indicators in the third quarter of fiscal 2020, that goodwill was potentially not recoverable. The Company recorded non-cash goodwill impairment expense of $120.5 million during the third quarter of fiscal 2020, related to reporting units in the Electronic Components (EC) reportable segment including goodwill in the Americas and goodwill associated with recent acquisitions. The impairment of goodwill in such reporting units was primarily the result of COVID-19 related impacts including the significant decline in market capitalization during the quarter as well as a reduction in expected future operating results. In assessing goodwill for impairment in the third quarter of fiscal 2020, the Company was required to make significant judgments related to the fair value of its reporting units. The Company used a combination of an income approach, specifically a discounted cash flow methodology, and a market approach to estimate the fair value of its reporting units. The discounted cash flow methodology includes market participant assumptions for, among other factors, forecasted sales, gross profit margins, operating expenses, cash flows, perpetual growth rates and long-term discount rates, all of which required judgments and estimates by management that are inherently uncertain. The market approach methodology required significant assumptions related to comparable transactions, market multiples, capital structure and control premiums. The interim goodwill impairment testing results were also reconciled with the Company’s market capitalization on and around March 28, 2020, as the final step in the impairment testing. The Company also performed asset impairment testing over long-lived assets, including intangible assets and property, plant and equipment, as of March 28, 2020 due primarily to the same indicators that led to the interim goodwill impairment testing. As a result of such long-lived asset impairment testing, the Company recorded $25.3 million in impairment expense substantially all related to intangible assets. Other impairment expense During the third quarter of fiscal 2020, the Company also recorded $15.3 million of equity investment impairment expense classified within other (expense) income, net in the consolidated statements of operations. |
Debt
Debt | 9 Months Ended |
Mar. 28, 2020 | |
Debt | |
Debt | 4. Debt Short-term debt consists of the following (carrying balances in thousands): March 28, June 29, March 28, June 29, 2020 2019 2020 2019 Interest Rate Carrying Balance Bank credit facilities and other 4.76 % 1.02 % $ 65 $ 538 Accounts receivable securitization program (due August 2020) 1.71 % — 99,900 — Public notes due June 2020 5.88 % 5.88 % 300,000 300,000 Short-term debt $ 399,965 $ 300,538 Bank credit facilities and other consists primarily of various committed and uncommitted lines of credit and other forms of bank debt with financial institutions utilized primarily to support the working capital requirements of the Company including its foreign operations. The Company has a trade accounts receivable securitization program (the “Securitization Program”) in the United States with a group of financial institutions to allow the Company to transfer, on an ongoing revolving basis, an undivided interest in a designated pool of trade accounts receivable, to provide security or collateral for borrowings up to a maximum of $500 million. The Securitization Program does not qualify for off balance sheet accounting treatment and any borrowings under the Securitization Program are recorded as debt in the consolidated balance sheets. Under the Securitization Program, the Company legally sells and isolates certain U.S. trade accounts receivable into a wholly owned and consolidated bankruptcy remote special purpose entity. Such receivables, which are recorded within “Receivables” in the consolidated balance sheets, totaled $756.7 million and $857.3 million at March 28, 2020 and June 29, 2019, respectively. The Securitization Program contains certain covenants relating to the quality of the receivables sold. The Securitization Program also requires the Company to maintain certain minimum interest coverage and leverage ratios, which the Company was in compliance with as of March 28, 2020, and June 29, 2019. Interest on borrowings is calculated using a one-month LIBOR rate plus a spread of 0.75%. The facility fee on the unused balance of the facility is up to 0.35%. On March 31, 2020, the Company notified Wells Fargo Bank, N.A., as Trustee, that it has elected to redeem on April 30, 2020, all of its outstanding 5.875% Notes due June 15, 2020 (“Notes”) at a make-whole redemption price in accordance with the terms of the Notes and the indenture. On April 30, 2020, the Company redeemed $300 million in principal amount of the Notes with a combination of cash on hand and by drawing on its existing $1.25 billion senior unsecured revolving credit facility, which is scheduled to mature on June 28, 2023. The make-whole premium for the early redemption was not material. Long-term debt consists of the following (carrying balances in thousands): March 28, June 29, March 28, June 29, 2020 2019 2020 2019 Interest Rate Carrying Balance Revolving credit facilities: Accounts receivable securitization program — 3.15 % $ — $ 227,300 Credit Facility (due June 2023) — 5.68 % — 1,100 Public notes due: December 2021 3.75 % 3.75 % 300,000 300,000 December 2022 4.88 % 4.88 % 350,000 350,000 April 2026 4.63 % 4.63 % 550,000 550,000 Other long-term debt 1.18 % 1.00 % 1,559 403 Long-term debt before discount and debt issuance costs 1,201,559 1,428,803 Discount and debt issuance costs – unamortized (7,319) (8,881) Long-term debt $ 1,194,240 $ 1,419,922 The Company has a five-year $1.25 billion senior unsecured revolving credit facility (the “Credit Facility”) with a syndicate of banks, consisting of revolving credit facilities and the issuance of up to $200.0 million of letters of credit and up to $300.0 million of loans in certain approved currencies, which expires in June 2023. Subject to certain conditions, the Credit Facility may be increased up to $1.50 billion. Under the Credit Facility, the Company may select from various interest rate options, currencies and maturities. The Credit Facility contains certain covenants including various limitations on debt incurrence, share repurchases, dividends, investments and capital expenditures. The Credit Facility also includes financial covenants requiring the Company to maintain minimum interest coverage and leverage ratios, which the Company was in compliance with as of March 28, 2020 and June 29, 2019. As of March 28, 2020 and June 29, 2019, there were $1.6 million and $4.0 million, respectively, in letters of credit issued under the Credit Facility. As of March 28, 2020, the carrying value and fair value of the Company’s total debt was $1.59 billion and $1.60 billion, respectively. At June 29, 2019, the carrying value and fair value of the Company’s total debt was $1.72 billion and $1.78 billion, respectively. Fair value for the public notes was estimated based upon quoted market prices and for other forms of debt fair value approximates carrying value due to the market based variable nature of the interest rates on those debt facilities. |
Operating leases
Operating leases | 9 Months Ended |
Mar. 28, 2020 | |
Leases [Abstract] | |
Leases | 5. Leases Substantially all the Company’s leases are classified as operating leases and are predominately related to real property for distribution centers, office space and integration facilities with a lease term of up to 18 years. The Company’s equipment leases are primarily for automobiles and equipment, and are not material to the consolidated financial statements. The Company determines if an arrangement contains a lease at inception based on whether it conveys the right to control the use of an identified asset in exchange for consideration. Lease right-of-use assets (“operating lease assets”) and associated liabilities (“operating lease liabilities”) are recognized at the commencement date of the lease based on the present value of lease payments over the lease term. Certain lease agreements may include one or more options to extend or terminate a lease. Lease terms are inclusive of these options if it is reasonably certain that the Company will exercise such options. The Company’s leases generally do not provide a readily determinable implicit borrowing rate, as such, the discount rate used to calculate present value is based upon an estimate of the Company’s secured borrowing rate. The estimated secured borrowing rates used at the date of adoption for each lease varies in accordance with the lease term and the currency of the lease payments. Lease cost is recognized on a straight-line basis over the lease term and is included as a component of “Selling, general, and administrative expenses” in the consolidated statements of operations. Lease payments are primarily fixed; however, certain lease agreements contain variable payments, which are expensed as incurred and not included in the measurement of operating lease assets and liabilities. The components of lease cost related to the Company’s operating leases were as follows (in thousands): Third Quarter Nine Months Ended Ended March 28, 2020 Operating lease cost $ 19,257 $ 57,633 Variable lease cost 5,496 15,594 Total lease cost $ 24,753 $ 73,227 Future minimum operating lease payments as of March 28, 2020 are as follows (in thousands): Fiscal Year Remainder of fiscal 2020 $ 19,735 2021 58,995 2022 49,061 2023 42,079 2024 32,965 Thereafter 167,259 Total future operating lease payments 370,094 Total imputed interest on operating lease liabilities (67,059) Total operating lease liabilities $ 303,035 Prior to the Company’s adoption of ASC 842, future minimum operating lease payments as of June 29, 2019 were as follows (in thousands) on an undiscounted basis and excluding non-lease components: Fiscal Year 2020 $ 68,710 2021 52,225 2022 42,069 2023 32,245 2024 23,305 Thereafter 85,196 Total lease payments $ 303,750 Other information pertaining to operating leases consists of the following: Operating Lease Term and Discount Rate Weighted-average remaining lease term in years 9.6 Weighted-average discount rate 3.8 % Supplemental cash flow information related to the Company’s operating leases for the nine months ended March 28, 2020 was as follows (in thousands): Supplemental Cash Flow Information: Cash paid for operating lease liabilities $ 46,418 Operating lease assets obtained from new operating lease liabilities 30,750 |
Derivative financial instrument
Derivative financial instruments | 9 Months Ended |
Mar. 28, 2020 | |
Derivative financial instruments | |
Derivative financial instruments | 6. Derivative financial instruments Many of the Company’s subsidiaries purchase and sell products in currencies other than their functional currencies. This subjects the Company to the risks associated with fluctuations in foreign currency exchange rates. The Company reduces this risk by utilizing natural hedging (e.g., offsetting receivables and payables in the same foreign currency) as well as by creating offsetting positions through the use of derivative financial instruments, primarily forward foreign exchange contracts typically with maturities of less than 60 days (“economic hedges”), but no longer than one year. The Company continues to have exposure to foreign currency risks to the extent they are not economically hedged. The Company adjusts any economic hedges to fair value through the consolidated statements of operations primarily within “Other (expense) income, net.” The fair value of forward foreign exchange contracts, which are based upon Level 2 criteria under the ASC 820 fair value hierarchy, are classified in the captions “Prepaid and other current assets” or “Accrued expenses and other,” as applicable, in the accompanying consolidated balance sheets as of March 28, 2020 and June 29, 2019. The Company’s master netting and other similar arrangements with various financial institutions related to derivative financial instruments allow for the right of offset. The Company’s policy is to present derivative financial instruments with the same counterparty as either a net asset or liability when the right of offset exists. The Company generally does not hedge its investments in its foreign operations. The Company does not enter into derivative financial instruments for trading or speculative purposes and monitors the financial stability and credit standing of its counterparties. The Company’s foreign currency exposure relates primarily to international transactions where the currency collected from customers can be different from the currency used to purchase from suppliers. The Company’s foreign operations transactions are denominated primarily in the following currencies: U.S. Dollar, Euro, British Pound, Japanese Yen, Chinese Yuan, Taiwan Dollar, Canadian Dollar and Mexican Peso. The Company also, to a lesser extent, has foreign operations transactions in other EMEA and Asia foreign currencies. The fair values of forward foreign currency exchange contracts not receiving hedge accounting treatment recorded in the Company’s consolidated balance sheets are as follows: March 28, June 29, 2020 2019 (Thousands) Prepaid and other current assets $ 15,614 $ 5,511 Accrued expenses and other 14,147 6,154 The amounts recorded to other (expense) income, net, related to derivative financial instruments for economic hedges are as follows: Third Quarters Ended Nine Months Ended March 28, March 30, March 28, March 30, 2020 2019 2020 2019 (Thousands) Net derivative financial instrument (loss) gain $ (3,247) $ (398) $ 7,856 $ (17) Under the Company’s economic hedging policies, gains and losses on the derivative financial instruments are classified within the same line item in the consolidated statements of operations as the remeasurement of the underlying assets or liabilities being economically hedged. |
Commitments and contingencies
Commitments and contingencies | 9 Months Ended |
Mar. 28, 2020 | |
Commitments and contingencies | |
Commitments and contingencies | 7. Commitments and contingencies From time to time, the Company may become a party to, or be otherwise involved in various lawsuits, claims, investigations and other legal proceedings arising in the ordinary course of conducting its business. While litigation is subject to inherent uncertainties, management does not anticipate that any such matters will have a material adverse effect on the Company’s financial condition, liquidity or results of operations. The Company is also currently subject to various pending and potential legal matters and investigations relating to compliance with governmental laws and regulations, including import/export and environmental matters. For certain of these matters it is not possible to determine the ultimate outcome, and the Company cannot reasonably estimate the maximum potential exposure or the range of possible loss for such matters due primarily to being in the early stages of the related proceedings and investigations. The Company currently believes that the resolution of such matters will not have a material adverse effect on the Company’s financial position or liquidity but could possibly be material to its results of operations in any one reporting period. As of March 28, 2020 and June 29, 2019, the Company had aggregate estimated liabilities of $14.7 million classified within accrued expenses and other for such compliance-related matters that were reasonably estimable as of such dates. |
Income taxes
Income taxes | 9 Months Ended |
Mar. 28, 2020 | |
Income taxes | |
Income taxes | 8. Income taxes The Company’s effective tax rate on its loss from continuing operations before taxes was 18.6% in the third quarter of fiscal 2020. During the third quarter of fiscal 2020, the Company’s effective tax rate was unfavorably impacted primarily by (i) the impairment of goodwill that is not deductible for tax purposes, partially offset by (ii) the release of unrecognized tax benefit reserves net of settlements. During the third quarter of fiscal 2019, the Company’s effective tax rate on its income from continuing operations before taxes was 24.4%. During the third quarter of fiscal 2019, the Company’s effective tax rate was unfavorably impacted primarily by (i) an increase due to the impact from recently issued U.S. income tax regulations, partially offset by (ii) decreases in unrecognized tax benefits due to the expiration of the statute of limitations in various jurisdictions. For the first nine months of fiscal 2020, the Company’s effective tax rate on its loss from continuing operations before income taxes was 27.0%. The effective tax rate for the first nine months of fiscal 2020 was favorably impacted primarily by (i) the release of unrecognized tax benefit reserves net of settlements and (ii) the mix of income in lower tax jurisdictions, partially offset by (iii) goodwill impairment expense that is not deductible for tax purposes and (iv) a valuation allowance against interest deduction deferred tax assets. During the first nine months of fiscal 2019, the Company’s effective tax rate on its income from continuing operations before taxes was 29.5%. The effective tax rate for the first nine months of fiscal 2019 was unfavorably impacted primarily by (i) an adjustment to the transition tax on unremitted foreign earnings recorded under the requirements of recent U.S. tax law changes (the “Act”) , (ii) net increases in unrecognized tax benefits, and (iii) an increase due to the impact from recently issued U.S. income tax regulations associated with the Act, partially offset by (iv) an adjustment to the deferred tax impacts of the Act, (v) the mix of income in lower tax jurisdictions, and (vi) the release of valuation allowances against deferred tax assets that were deemed to be realizable. The Company’s effective tax rate may change in future periods due to changes in tax laws and issuance of additional guidance and regulations of tax laws. The Company has considered the expected impact of COVID-19 in evaluating the need for valuation allowances and unrecognized tax benefit reserves. The United States enacted the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The CARES Act is an approximately $2 trillion emergency economic stimulus package in response to the COVID-19 outbreak, which among other things contains numerous income tax provisions. Some of these tax provisions are expected to be effective retroactively for years ending before the date of enactment. The Company analyzed the impact of the CARES Act and does not foresee a significant impact on its consolidated financial position, results of operations, effective tax rate and cash flows. |
Pension and retirement plan
Pension and retirement plan | 9 Months Ended |
Mar. 28, 2020 | |
Pension and retirement plan | |
Pension and retirement plans | 9. Pension plan The Company has a noncontributory defined benefit pension plan that covers substantially all current or former U.S. employees (the “Plan”). Components of net periodic pension cost for the Plan was as follows: Third Quarters Ended Nine Months Ended March 28, March 30, March 28, March 30, 2020 2019 2020 2019 (Thousands) Service cost $ 3,786 $ 3,582 $ 11,358 $ 11,050 Total net periodic pension cost within selling, general and administrative expenses 3,786 3,582 11,358 11,050 Interest cost 5,638 8,010 16,914 21,238 Expected return on plan assets (12,668) (16,003) (38,003) (42,605) Amortization of prior service cost (credit) 534 (392) 1,603 (1,178) Recognized net actuarial loss 3,658 2,091 10,972 7,161 Total net periodic pension benefit within other (expense) income, net (2,838) (6,294) (8,514) (15,384) Net periodic pension cost (benefit) $ 948 $ (2,712) $ 2,844 $ (4,334) The Company expects to make contributions to the Plan of $4.0 million during the remainder of fiscal 2020. The Company made $4.0 million of contributions during the first nine months of fiscal 2020. |
Shareholders' equity
Shareholders' equity | 9 Months Ended |
Mar. 28, 2020 | |
Shareholders' equity | |
Shareholders' equity | 10. Shareholders’ equity Share repurchase program In August 2019, the Company’s Board of Directors amended the Company’s existing share repurchase program, increasing the cumulative total of authorized share repurchases to $2.95 billion of common stock in the open market or through privately negotiated transactions. The timing and actual number of shares repurchased will depend on a variety of factors such as share price, expected liquidity, expected compliance with financial debt convents, corporate and regulatory requirements, and prevailing market conditions. During the third quarter and nine months ended March 28, 2020, the Company repurchased 1.1 million and 5.9 million shares, respectively, under this program for a total cost of $36.7 million and $236.4 million, respectively. As of March 28, 2020, the Company had $469.0 million remaining under its share repurchase authorization. As a result of the economic uncertainty caused by COVID-19, the Company has temporarily suspended share repurchases. Common stock dividend In February 2020, the Company’s Board of Directors approved a dividend of $0.21 per common share and dividend payments of $20.8 million were made in March 2020. During the nine months ended March 28, 2020, the Company paid dividends of $0.63 per common share and $63.2 million in total. |
Earnings per share
Earnings per share | 9 Months Ended |
Mar. 28, 2020 | |
Earnings per share | |
Earnings per share | 11. Earnings per share Third Quarters Ended Nine Months Ended March 28, March 30, March 28, March 30, 2020 2019 2020 2019 (Thousands, except per share data) Numerator: Income (loss) from continuing operations $ (128,661) $ 94,935 $ (81,694) $ 215,239 Loss from discontinued operations, net of tax — (6,887) (1,548) (7,066) Net (loss) income $ (128,661) $ 88,048 $ (83,242) $ 208,173 Denominator: Weighted average common shares for basic earnings per share 99,479 108,074 101,013 111,222 Net effect of dilutive stock based compensation awards — 748 — 1,030 Weighted average common shares for diluted earnings per share 99,479 108,822 101,013 112,252 Basic (loss) earnings per share - continuing operations $ (1.29) $ 0.87 $ (0.81) $ 1.93 Basic loss per share - discontinued operations — (0.06) (0.01) (0.06) Basic (loss) earnings per share $ (1.29) $ 0.81 $ (0.82) $ 1.87 Diluted (loss) earnings per share - continuing operations $ (1.29) $ 0.87 $ (0.81) $ 1.91 Diluted loss per share - discontinued operations — (0.06) (0.01) (0.06) Diluted (loss) earnings per share $ (1.29) $ 0.81 $ (0.82) $ 1.85 Stock options excluded from earnings per share calculation due to anti-dilutive effect 1,431 528 1,018 410 For the three and nine months ended March 28, 2020, the diluted net loss per share is the same as basic net loss per share as the effects of 208,399 and 775,060 potential common shares, respectively, would be anti-dilutive. |
Additional cash flow informatio
Additional cash flow information | 9 Months Ended |
Mar. 28, 2020 | |
Additional cash flow information | |
Additional cash flow information | 12. Additional cash flow information Non-cash investing and financing activities and supplemental cash flow information were as follows: Nine Months Ended March 28, March 30, 2020 2019 (Thousands) Non-cash Investing Activities: Capital expenditures incurred but not paid $ 5,366 $ 10,310 Non-cash Financing Activities: Unsettled share repurchases — $ 4,740 Supplemental Cash Flow Information: Interest $ 88,472 $ 87,845 Income tax payments - continuing and discontinued operations 14,689 150,765 Included in cash and cash equivalents as of March 28, 2020 and June 29, 2019 was $4.1 million and $9.4 million, respectively, of cash equivalents, which was primarily comprised of investment grade money market funds and overnight time deposits. |
Segment information
Segment information | 9 Months Ended |
Mar. 28, 2020 | |
Segment information | |
Segment information | 13. Segment information Electronic Components (“EC”) and Farnell (“Farnell”) are the Company’s reportable segments (“operating groups”). EC markets and sells semiconductors and interconnect, passive and electromechanical devices and integrated components to a diverse customer base serving many end-markets. Farnell distributes electronic components and related products to the electronic system design community utilizing multi-channel sales and marketing resources. Third Quarters Ended Nine Months Ended March 28, March 30, March 28, March 30, 2020 2019 2020 2019 (Thousands) Sales: Electronic Components $ 3,974,669 $ 4,331,351 $ 12,472,484 $ 13,722,890 Farnell 335,149 367,473 1,002,148 1,114,793 4,309,818 4,698,824 13,474,632 14,837,683 Operating income (loss): Electronic Components $ 84,841 $ 153,319 $ 290,271 $ 473,783 Farnell 23,350 45,651 65,109 126,088 108,191 198,970 355,380 599,871 Corporate (37,833) (20,866) (95,416) (60,414) Restructuring, integration and other expenses (19,211) (2,939) (58,073) (79,986) Goodwill and intangible asset impairment expense (145,836) — (145,836) — Amortization of acquired intangible assets and other (21,071) (22,080) (62,603) (63,520) Operating (loss) income $ (115,760) $ 153,085 $ (6,548) $ 395,951 Sales, by geographic area: Americas (1) $ 1,203,605 $ 1,297,220 $ 3,605,944 $ 3,869,435 EMEA (2) 1,512,476 1,740,916 4,409,258 5,124,409 Asia/Pacific (3) 1,593,737 1,660,688 5,459,430 5,843,839 Sales $ 4,309,818 $ 4,698,824 $ 13,474,632 $ 14,837,683 (1) Includes sales from the United States of $1.11 billion and $1.22 billion for the third quarters ended March 28, 2020 and March 30, 2019, respectively. Includes sales from the United States of $3.37 billion and $3.61 billion for the first nine months of fiscal 2020 and 2019, respectively. (2) Includes sales from Germany and Belgium of $568.0 million and $278.3 million, respectively, for the third quarter ended March 28, 2020, and $1.69 billion and $837.7 million, respectively, for the first nine months of fiscal 2020. Includes sales from Germany and Belgium of $666.2 million and $311.9 million, respectively, for the third quarter ended March 30, 2019, and $2.00 billion and $868.2 million, respectively, for the first nine months of fiscal 2019. (3) Includes sales from China (including Hong Kong), Taiwan and Singapore of $524.1 million, $649.7 million and $239.3 million, respectively, for the third quarter ended March 28, 2020, and $1.76 billion, $2.39 billion and $722.7 million, respectively, for the first nine months of fiscal 2020. Includes sales from China (including Hong Kong), Taiwan and Singapore of $565.5 million, $659.7 million and $237.2 million, respectively, for the third quarter ended March 30, 2019, and $1.93 billion, $2.47 billion and $779.5 million, respectively, for the first nine months of fiscal 2019. March 28, June 29, 2020 2019 (Thousands) Property, plant, and equipment, net, by geographic area: Americas (1) $ 193,859 $ 213,802 EMEA (2) 183,903 200,379 Asia/Pacific 35,609 37,990 Property, plant, and equipment, net $ 413,371 $ 452,171 (1) Includes property, plant and equipment, net, of $189.0 million and $209.9 million as of March 28, 2020 and June 29, 2019, respectively, in the United States. (2) Includes property, plant and equipment, net, of $86.2 million, $71.5 million and $22.8 million in Germany, the United Kingdom and Belgium, respectively, as of March 28, 2020; and $95.2 million, $70.5 million and $25.2 million in Germany, the United Kingdom and Belgium, respectively, as of June 29, 2019. |
Restructuring expenses
Restructuring expenses | 9 Months Ended |
Mar. 28, 2020 | |
Restructuring expenses | |
Restructuring expenses | 14. Restructuring expenses Fiscal 2020 During fiscal 2020, the Company undertook restructuring actions in order to improve operating efficiencies and further integrate the acquisition of Farnell. Restructuring expenses are included as a component of restructuring, integration and other expenses in the consolidated statements of operations. The activity related to the restructuring liabilities and asset impairments associated with restructuring activities established during fiscal 2020 is presented in the following table: Facility and Contract Asset Severance Exit Costs Impairments Total (Thousands) Fiscal 2020 restructuring expenses $ 26,895 $ 3,066 $ 7,111 $ 37,072 Cash payments (18,141) (798) — (18,939) Non-cash amounts — — (7,111) (7,111) Other, principally foreign currency translation (68) (39) — (107) Balance at March 28, 2020 $ 8,686 $ 2,229 $ — $ 10,915 Severance expense recorded in the first nine months of fiscal 2020 related to the reduction, or planned reduction, of approximately 400 employees, primarily in executive management, operations, information technology, warehouse, sales and business support functions. Asset impairments relate primarily to software long-lived assets that were impaired as a result of the restructuring of information technology operations including the re-prioritization of information technology initiatives and resources. Of the $37.1 million in restructuring expenses recorded during the first nine months of fiscal 2020, $28.9 million related to EC, $6.3 million related to Farnell and $1.9 million related to Corporate. The Company expects the majority of the remaining severance amounts to be paid by the end of fiscal 2020. Fiscal 2019 and prior During fiscal 2019 and prior, the Company incurred restructuring expenses related to various restructuring actions intended to achieve planned synergies from acquired businesses and to reduce future operating expenses. The following table presents the activity during the first nine months of fiscal 2020 related to the remaining restructuring liabilities from continuing operations established during fiscal 2019 and prior: Facility and Contract Severance Exit Costs Total (Thousands) Balance at June 29, 2019 $ 21,537 $ 5,381 $ 26,918 Cash payments (13,465) (3,294) (16,759) Changes in estimates, net (3,448) 373 (3,075) Other, principally foreign currency translation (548) (118) (666) Balance at March 28, 2020 $ 4,076 $ 2,342 $ 6,418 The Company expects the majority of the remaining amounts to be paid by the end of fiscal 2020. |
Basis of presentation and new_2
Basis of presentation and new accounting pronouncements (Policies) | 9 Months Ended |
Mar. 28, 2020 | |
Basis of presentation and new accounting pronouncements | |
Basis of presentation | In the opinion of management, the accompanying unaudited interim consolidated financial statements contain all adjustments necessary to present fairly Avnet, Inc. and its consolidated subsidiaries’ (collectively, the “Company” or “Avnet”) financial position, results of operations, comprehensive income and cash flows. All such adjustments are of a normal recurring nature. The preparation of financial statements in accordance with generally accepted accounting principles in the United States (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements. Actual results may differ from these estimates and assumptions. Interim results of operations are not necessarily indicative of the results to be expected for the full fiscal year. The information included in this Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 29, 2019. Certain reclassifications have been made in prior periods to conform to the current period presentation. |
New accounting pronouncements | Recently adopted accounting pronouncements The Company adopted Accounting Standards Update (“ASU”) No. 2016-02, “Leases (Topic 842),” The adoption of ASC 842 did not have a material impact on the Company’s consolidated statements of operations or retained earnings. The Company elected the package of practical expedients permitted under the transition guidance that allowed, among other things, the historical lease classification to be carried forward without reassessment and the hindsight practical expedient. The Company elected to not separate lease and non-lease components for its real estate leases. Refer to Note 5 for additional disclosures related to leases. In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815) - Targeted Improvements to Accounting for Hedging Activities” Recently issued accounting pronouncements In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting In January 2020, the FASB issued ASU No. 2020-01 - Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)-Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes (Topic 740) In August 2018, the FASB issued ASU No. 2018-15, Intangibles—Goodwill and Other— Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force) In August 2018, the FASB issued ASU No. 2018-14, Compensation-Retirement Benefits-Defined Benefit Plans-General (Subtopic 715-20): Disclosure Framework-Changes to the Disclosure Requirements for Defined Benefit Plans In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments |
Goodwill and intangible assets
Goodwill and intangible assets (Tables) | 9 Months Ended |
Mar. 28, 2020 | |
Goodwill and intangible assets | |
Change in goodwill balances by reportable segment | Electronic Components Farnell Total (Thousands) Carrying value at June 29, 2019 (1) $ 390,896 $ 485,832 $ 876,728 Additions from acquisitions 30,562 — 30,562 Impairment of goodwill (120,475) — (120,475) Foreign currency translation (5,970) (19,906) (25,876) Carrying value at March 28, 2020 (1) $ 295,013 $ 465,926 $ 760,939 (1) Includes accumulated impairment of $1,045,110 from fiscal 2009, $181,440 from fiscal 2018 and $137,396 from fiscal 2019 |
Company's identifiable acquired intangible assets | March 28, 2020 June 29, 2019 Acquired Accumulated Net Book Acquired Accumulated Net Book Amount (1) Amortization Value Amount Amortization Value (Thousands) Customer related $ 290,199 $ (247,495) $ 42,704 $ 292,266 $ (208,329) $ 83,937 Trade name 50,627 (29,810) 20,817 52,760 (24,752) 28,008 Technology and other 52,674 (38,889) 13,785 63,753 (32,178) 31,575 $ 393,500 $ (316,194) $ 77,306 $ 408,779 $ (265,259) $ 143,520 (1) Includes intangible asset impairment of $17,494 in the third quarter of fiscal 2020 |
Estimated future amortization expense | The following table presents the estimated future amortization expense for the remainder of fiscal 2020 and the next five fiscal years (in thousands): Fiscal Year Remainder of fiscal 2020 $ 18,708 2021 36,410 2022 12,610 2023 4,795 2024 1,472 2025 3,311 Total $ 77,306 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Mar. 28, 2020 | |
Debt | |
Short-term debt | Short-term debt consists of the following (carrying balances in thousands): March 28, June 29, March 28, June 29, 2020 2019 2020 2019 Interest Rate Carrying Balance Bank credit facilities and other 4.76 % 1.02 % $ 65 $ 538 Accounts receivable securitization program (due August 2020) 1.71 % — 99,900 — Public notes due June 2020 5.88 % 5.88 % 300,000 300,000 Short-term debt $ 399,965 $ 300,538 |
Long-term debt | Long-term debt consists of the following (carrying balances in thousands): March 28, June 29, March 28, June 29, 2020 2019 2020 2019 Interest Rate Carrying Balance Revolving credit facilities: Accounts receivable securitization program — 3.15 % $ — $ 227,300 Credit Facility (due June 2023) — 5.68 % — 1,100 Public notes due: December 2021 3.75 % 3.75 % 300,000 300,000 December 2022 4.88 % 4.88 % 350,000 350,000 April 2026 4.63 % 4.63 % 550,000 550,000 Other long-term debt 1.18 % 1.00 % 1,559 403 Long-term debt before discount and debt issuance costs 1,201,559 1,428,803 Discount and debt issuance costs – unamortized (7,319) (8,881) Long-term debt $ 1,194,240 $ 1,419,922 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Mar. 28, 2020 | |
Leases [Abstract] | |
Schedule of lease cost | The components of lease cost related to the Company’s operating leases were as follows (in thousands): Third Quarter Nine Months Ended Ended March 28, 2020 Operating lease cost $ 19,257 $ 57,633 Variable lease cost 5,496 15,594 Total lease cost $ 24,753 $ 73,227 |
Schedule of future minimum operating lease payments | Future minimum operating lease payments as of March 28, 2020 are as follows (in thousands): Fiscal Year Remainder of fiscal 2020 $ 19,735 2021 58,995 2022 49,061 2023 42,079 2024 32,965 Thereafter 167,259 Total future operating lease payments 370,094 Total imputed interest on operating lease liabilities (67,059) Total operating lease liabilities $ 303,035 |
Minimum operating lease commitments principally for buildings | Prior to the Company’s adoption of ASC 842, future minimum operating lease payments as of June 29, 2019 were as follows (in thousands) on an undiscounted basis and excluding non-lease components: Fiscal Year 2020 $ 68,710 2021 52,225 2022 42,069 2023 32,245 2024 23,305 Thereafter 85,196 Total lease payments $ 303,750 |
Schedule of other information pertaining to operating leases | Operating Lease Term and Discount Rate Weighted-average remaining lease term in years 9.6 Weighted-average discount rate 3.8 % |
Schedule of supplemental cash flow information | Supplemental cash flow information related to the Company’s operating leases for the nine months ended March 28, 2020 was as follows (in thousands): Supplemental Cash Flow Information: Cash paid for operating lease liabilities $ 46,418 Operating lease assets obtained from new operating lease liabilities 30,750 |
Derivative financial instrume_2
Derivative financial instruments (Tables) | 9 Months Ended |
Mar. 28, 2020 | |
Derivative financial instruments | |
Schedule of derivative instruments in the balance sheet | March 28, June 29, 2020 2019 (Thousands) Prepaid and other current assets $ 15,614 $ 5,511 Accrued expenses and other 14,147 6,154 |
Schedule of gain (loss) on derivatives | Third Quarters Ended Nine Months Ended March 28, March 30, March 28, March 30, 2020 2019 2020 2019 (Thousands) Net derivative financial instrument (loss) gain $ (3,247) $ (398) $ 7,856 $ (17) |
Pension and retirement plans (T
Pension and retirement plans (Tables) | 9 Months Ended |
Mar. 28, 2020 | |
Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract] | |
Components of net periodic pension costs | Third Quarters Ended Nine Months Ended March 28, March 30, March 28, March 30, 2020 2019 2020 2019 (Thousands) Service cost $ 3,786 $ 3,582 $ 11,358 $ 11,050 Total net periodic pension cost within selling, general and administrative expenses 3,786 3,582 11,358 11,050 Interest cost 5,638 8,010 16,914 21,238 Expected return on plan assets (12,668) (16,003) (38,003) (42,605) Amortization of prior service cost (credit) 534 (392) 1,603 (1,178) Recognized net actuarial loss 3,658 2,091 10,972 7,161 Total net periodic pension benefit within other (expense) income, net (2,838) (6,294) (8,514) (15,384) Net periodic pension cost (benefit) $ 948 $ (2,712) $ 2,844 $ (4,334) |
Earnings per share (Tables)
Earnings per share (Tables) | 9 Months Ended |
Mar. 28, 2020 | |
Earnings per share | |
Basic and diluted earnings per share calculation | Third Quarters Ended Nine Months Ended March 28, March 30, March 28, March 30, 2020 2019 2020 2019 (Thousands, except per share data) Numerator: Income (loss) from continuing operations $ (128,661) $ 94,935 $ (81,694) $ 215,239 Loss from discontinued operations, net of tax — (6,887) (1,548) (7,066) Net (loss) income $ (128,661) $ 88,048 $ (83,242) $ 208,173 Denominator: Weighted average common shares for basic earnings per share 99,479 108,074 101,013 111,222 Net effect of dilutive stock based compensation awards — 748 — 1,030 Weighted average common shares for diluted earnings per share 99,479 108,822 101,013 112,252 Basic (loss) earnings per share - continuing operations $ (1.29) $ 0.87 $ (0.81) $ 1.93 Basic loss per share - discontinued operations — (0.06) (0.01) (0.06) Basic (loss) earnings per share $ (1.29) $ 0.81 $ (0.82) $ 1.87 Diluted (loss) earnings per share - continuing operations $ (1.29) $ 0.87 $ (0.81) $ 1.91 Diluted loss per share - discontinued operations — (0.06) (0.01) (0.06) Diluted (loss) earnings per share $ (1.29) $ 0.81 $ (0.82) $ 1.85 Stock options excluded from earnings per share calculation due to anti-dilutive effect 1,431 528 1,018 410 |
Additional cash flow informat_2
Additional cash flow information (Tables) | 9 Months Ended |
Mar. 28, 2020 | |
Additional cash flow information | |
Interest and income taxes paid | Nine Months Ended March 28, March 30, 2020 2019 (Thousands) Non-cash Investing Activities: Capital expenditures incurred but not paid $ 5,366 $ 10,310 Non-cash Financing Activities: Unsettled share repurchases — $ 4,740 Supplemental Cash Flow Information: Interest $ 88,472 $ 87,845 Income tax payments - continuing and discontinued operations 14,689 150,765 |
Segment information (Tables)
Segment information (Tables) | 9 Months Ended |
Mar. 28, 2020 | |
Segment information | |
Table of the Company's segments and the related financial information for each | Third Quarters Ended Nine Months Ended March 28, March 30, March 28, March 30, 2020 2019 2020 2019 (Thousands) Sales: Electronic Components $ 3,974,669 $ 4,331,351 $ 12,472,484 $ 13,722,890 Farnell 335,149 367,473 1,002,148 1,114,793 4,309,818 4,698,824 13,474,632 14,837,683 Operating income (loss): Electronic Components $ 84,841 $ 153,319 $ 290,271 $ 473,783 Farnell 23,350 45,651 65,109 126,088 108,191 198,970 355,380 599,871 Corporate (37,833) (20,866) (95,416) (60,414) Restructuring, integration and other expenses (19,211) (2,939) (58,073) (79,986) Goodwill and intangible asset impairment expense (145,836) — (145,836) — Amortization of acquired intangible assets and other (21,071) (22,080) (62,603) (63,520) Operating (loss) income $ (115,760) $ 153,085 $ (6,548) $ 395,951 Sales, by geographic area: Americas (1) $ 1,203,605 $ 1,297,220 $ 3,605,944 $ 3,869,435 EMEA (2) 1,512,476 1,740,916 4,409,258 5,124,409 Asia/Pacific (3) 1,593,737 1,660,688 5,459,430 5,843,839 Sales $ 4,309,818 $ 4,698,824 $ 13,474,632 $ 14,837,683 (1) Includes sales from the United States of $1.11 billion and $1.22 billion for the third quarters ended March 28, 2020 and March 30, 2019, respectively. Includes sales from the United States of $3.37 billion and $3.61 billion for the first nine months of fiscal 2020 and 2019, respectively. (2) Includes sales from Germany and Belgium of $568.0 million and $278.3 million, respectively, for the third quarter ended March 28, 2020, and $1.69 billion and $837.7 million, respectively, for the first nine months of fiscal 2020. Includes sales from Germany and Belgium of $666.2 million and $311.9 million, respectively, for the third quarter ended March 30, 2019, and $2.00 billion and $868.2 million, respectively, for the first nine months of fiscal 2019. (3) Includes sales from China (including Hong Kong), Taiwan and Singapore of $524.1 million, $649.7 million and $239.3 million, respectively, for the third quarter ended March 28, 2020, and $1.76 billion, $2.39 billion and $722.7 million, respectively, for the first nine months of fiscal 2020. Includes sales from China (including Hong Kong), Taiwan and Singapore of $565.5 million, $659.7 million and $237.2 million, respectively, for the third quarter ended March 30, 2019, and $1.93 billion, $2.47 billion and $779.5 million, respectively, for the first nine months of fiscal 2019. |
Table of Assets by reportable segment and long-lived assets by geographic area | March 28, June 29, 2020 2019 (Thousands) Property, plant, and equipment, net, by geographic area: Americas (1) $ 193,859 $ 213,802 EMEA (2) 183,903 200,379 Asia/Pacific 35,609 37,990 Property, plant, and equipment, net $ 413,371 $ 452,171 (1) Includes property, plant and equipment, net, of $189.0 million and $209.9 million as of March 28, 2020 and June 29, 2019, respectively, in the United States. (2) Includes property, plant and equipment, net, of $86.2 million, $71.5 million and $22.8 million in Germany, the United Kingdom and Belgium, respectively, as of March 28, 2020; and $95.2 million, $70.5 million and $25.2 million in Germany, the United Kingdom and Belgium, respectively, as of June 29, 2019. |
Restructuring expenses (Tables)
Restructuring expenses (Tables) | 9 Months Ended |
Mar. 28, 2020 | |
Fiscal Year 2020 Restructuring Liabilities | |
Restructuring Cost and Reserve [Line Items] | |
Activity related to the restructuring reserves | Facility and Contract Asset Severance Exit Costs Impairments Total (Thousands) Fiscal 2020 restructuring expenses $ 26,895 $ 3,066 $ 7,111 $ 37,072 Cash payments (18,141) (798) — (18,939) Non-cash amounts — — (7,111) (7,111) Other, principally foreign currency translation (68) (39) — (107) Balance at March 28, 2020 $ 8,686 $ 2,229 $ — $ 10,915 |
Fiscal Year 2019 And Prior Restructuring Liabilities | |
Restructuring Cost and Reserve [Line Items] | |
Activity related to the restructuring reserves | Facility and Contract Severance Exit Costs Total (Thousands) Balance at June 29, 2019 $ 21,537 $ 5,381 $ 26,918 Cash payments (13,465) (3,294) (16,759) Changes in estimates, net (3,448) 373 (3,075) Other, principally foreign currency translation (548) (118) (666) Balance at March 28, 2020 $ 4,076 $ 2,342 $ 6,418 |
Basis of presentation and new_3
Basis of presentation and new accounting pronouncements (Details) | 9 Months Ended |
Mar. 28, 2020 | |
Basis of presentation and new accounting pronouncements | |
Lease, Practical Expedients, Package [true false] | true |
Lease, Practical Expedient, Use of Hindsight [true false] | true |
Acquisitions and discontinued_2
Acquisitions and discontinued operations - Acquisitions (Details) | 3 Months Ended |
Dec. 28, 2019item | |
Acquisitions and discontinued operations | |
Number of Businesses Acquired | 2 |
Acquisitions and discontinued_3
Acquisitions and discontinued operations - Discontinued Operations (Details) $ in Millions | Aug. 25, 2018USD ($) |
Disposal Group, Disposed of by Sale, Not Discontinued Operations | TS Business | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Final closing adjustment | $ 120 |
Goodwill and intangible asset_2
Goodwill and intangible assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Mar. 28, 2020 | Mar. 28, 2020 | Jun. 29, 2019 | Jun. 30, 2018 | Jul. 04, 2009 | |
Carrying amount of goodwill, by reportable segment | |||||
Carrying value | $ 876,728 | ||||
Additions from acquisitions | 30,562 | ||||
Impairment of goodwill | $ (120,500) | (120,475) | |||
Foreign currency translation | (25,876) | ||||
Carrying value | 760,939 | 760,939 | |||
Accumulated Impairment | $ 137,396 | $ 181,440 | $ 1,045,110 | ||
Electronic Components | |||||
Carrying amount of goodwill, by reportable segment | |||||
Carrying value | 390,896 | ||||
Additions from acquisitions | 30,562 | ||||
Impairment of goodwill | (120,475) | ||||
Foreign currency translation | (5,970) | ||||
Carrying value | 295,013 | 295,013 | |||
Farnell | |||||
Carrying amount of goodwill, by reportable segment | |||||
Carrying value | 485,832 | ||||
Additions from acquisitions | 0 | ||||
Foreign currency translation | (19,906) | ||||
Carrying value | $ 465,926 | $ 465,926 |
Goodwill and intangible asset_3
Goodwill and intangible assets Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 28, 2020 | Jun. 29, 2019 | |
Finite-Lived Intangible Assets [Line Items] | ||
Acquired amount | $ 393,500 | $ 408,779 |
Accumulated Amortization | (316,194) | (265,259) |
Net Book Value | 77,306 | 143,520 |
Intangible asset impairment | 17,494 | |
Customer related | ||
Finite-Lived Intangible Assets [Line Items] | ||
Acquired amount | 290,199 | 292,266 |
Accumulated Amortization | (247,495) | (208,329) |
Net Book Value | 42,704 | 83,937 |
Trade name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Acquired amount | 50,627 | 52,760 |
Accumulated Amortization | (29,810) | (24,752) |
Net Book Value | 20,817 | 28,008 |
Technology and other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Acquired amount | 52,674 | 63,753 |
Accumulated Amortization | (38,889) | (32,178) |
Net Book Value | $ 13,785 | $ 31,575 |
Goodwill and intangible asset_4
Goodwill and intangible assets Textuals (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 28, 2020 | Mar. 30, 2019 | Mar. 28, 2020 | Mar. 30, 2019 | |
Goodwill and intangible assets | ||||
Goodwill impairment expense | $ 120,500 | $ 120,475 | ||
Weighted average life of intangible assets | 2 years | |||
Intangible asset amortization expense | $ 21,000 | $ 21,900 | $ 62,240 | $ 63,123 |
Impairment of long lived assets including intangible assets | 25,300 | |||
Investment impairment | $ 15,300 |
Goodwill and intangible asset_5
Goodwill and intangible assets (Estimated Future Amortization Expense) (Details) - USD ($) $ in Thousands | Mar. 28, 2020 | Jun. 29, 2019 |
Fiscal Year: | ||
Remainder of fiscal 2020 | $ 18,708 | |
2021 | 36,410 | |
2022 | 12,610 | |
2023 | 4,795 | |
2024 | 1,472 | |
2025 | 3,311 | |
Net Book Value | $ 77,306 | $ 143,520 |
Debt - short-term debt (Details
Debt - short-term debt (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Mar. 28, 2020 | Jun. 29, 2019 | Apr. 30, 2020 | |
Components of short-term debt | |||
Short-term debt | $ 399,965 | $ 300,538 | |
Bank credit facilities and other | |||
Components of short-term debt | |||
Short-term Debt, Weighted Average Interest Rate | 4.76% | 1.02% | |
Short-term debt | $ 65 | $ 538 | |
Maximum borrowing amount | $ 1,250,000 | ||
Accounts receivable securitization program | |||
Components of short-term debt | |||
Short-term Debt, Weighted Average Interest Rate | 1.71% | ||
Short-term debt | $ 99,900 | ||
Notes Due June 2020 | |||
Components of short-term debt | |||
Short-term Debt, Weighted Average Interest Rate | 5.88% | 5.88% | |
stated interest rate | 5.875% | ||
Short-term debt | $ 300,000 | $ 300,000 | |
Debt redeemed | $ 300,000 |
Debt - long-term debt (Details)
Debt - long-term debt (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Mar. 28, 2020 | Jun. 29, 2019 | |
Debt Instrument [Line Items] | ||
Long-term debt before discount and debt issuance costs | $ 1,201,559 | $ 1,428,803 |
Discount and debt issuance costs - unamortized | (7,319) | (8,881) |
Long-term debt | $ 1,194,240 | $ 1,419,922 |
Revolving credit facilities | Accounts receivable securitization program | ||
Debt Instrument [Line Items] | ||
Long-term Debt, Weighted Average Interest Rate | 3.15% | |
Long-term debt before discount and debt issuance costs | $ 227,300 | |
Revolving credit facilities | Credit Facility | ||
Debt Instrument [Line Items] | ||
Long-term debt, stated interest rate | 5.68% | |
Long-term debt before discount and debt issuance costs | $ 1,100 | |
Notes due | Notes Due December 2021 | ||
Debt Instrument [Line Items] | ||
Long-term debt, stated interest rate | 3.75% | 3.75% |
Long-term debt before discount and debt issuance costs | $ 300,000 | $ 300,000 |
Notes due | Notes Due December 2022 | ||
Debt Instrument [Line Items] | ||
Long-term debt, stated interest rate | 4.88% | 4.88% |
Long-term debt before discount and debt issuance costs | $ 350,000 | $ 350,000 |
Notes due | Notes Due April 2026 | ||
Debt Instrument [Line Items] | ||
Long-term debt, stated interest rate | 4.63% | 4.63% |
Long-term debt before discount and debt issuance costs | $ 550,000 | $ 550,000 |
Notes due | Other long-term debt | ||
Debt Instrument [Line Items] | ||
Long-term Debt, Weighted Average Interest Rate | 1.18% | 1.00% |
Long-term debt before discount and debt issuance costs | $ 1,559 | $ 403 |
Debt (Textuals) (Details)
Debt (Textuals) (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Mar. 28, 2020 | Apr. 30, 2020 | Jun. 29, 2019 | |
Company's total debt | |||
Debt, Long-term and Short-term, Combined Amount | $ 1,590 | $ 1,720 | |
Total fair value | 1,600 | 1,780 | |
Bank credit facilities and other | |||
Debt Instrument [Line Items] | |||
Maximum borrowing amount | $ 1,250 | ||
Revolving credit facilities | Accounts receivable securitization program | |||
Debt Instrument [Line Items] | |||
Maximum borrowing amount | 500 | ||
Accounts Receivable from Securitization | $ 756.7 | 857.3 | |
Line of Credit Facility, Commitment Fee Percentage | 0.35% | ||
Revolving credit facilities | Accounts receivable securitization program | one-month LIBOR | |||
Debt Instrument [Line Items] | |||
Spread over base rate | 0.75% | ||
Revolving credit facilities | Credit Facility | |||
Debt Instrument [Line Items] | |||
Maximum borrowing amount | $ 1,250 | ||
Term | 5 years | ||
Line of credit facility contingent increase to maximum borrowing capacity | $ 1,500 | ||
Letter of Credit | Credit Facility | |||
Debt Instrument [Line Items] | |||
Maximum borrowing amount | 200 | ||
Letters of credit outstanding, amount | 1.6 | $ 4 | |
Notes Payable In Certain Approved Currencies | Credit Facility | |||
Debt Instrument [Line Items] | |||
Maximum borrowing amount | $ 300 |
Leases (Details)
Leases (Details) $ in Thousands | 3 Months Ended | 9 Months Ended |
Mar. 28, 2020USD ($) | Mar. 28, 2020USD ($) | |
Lease Cost | ||
Operating lease cost | $ 19,257 | $ 57,633 |
Variable lease cost | 5,496 | 15,594 |
Total lease cost | $ 24,753 | $ 73,227 |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Lease term | 18 years | 18 years |
Leases (Operating Lease Commitm
Leases (Operating Lease Commitments) (Details) - USD ($) $ in Thousands | Mar. 28, 2020 | Jun. 29, 2019 |
Leases [Abstract] | ||
Remainder of fiscal 2020 | $ 19,735 | |
2021 | 58,995 | |
2022 | 49,061 | |
2023 | 42,079 | |
2024 | 32,965 | |
Thereafter | 167,259 | |
Total future operating lease payments | 370,094 | |
Total imputed interest on operating lease liabilities | (67,059) | |
Total operating lease liabilities | $ 303,035 | |
2020 | $ 68,710 | |
2021 | 52,225 | |
2022 | 42,069 | |
2023 | 32,245 | |
2024 | 23,305 | |
Thereafter | 85,196 | |
Total | $ 303,750 |
Leases (Other Lease Information
Leases (Other Lease Information) (Details) $ in Thousands | 9 Months Ended |
Mar. 28, 2020USD ($) | |
Leases [Abstract] | |
Operating lease weighted-average remaining lease term | 9 years 7 months 6 days |
Operating lease weighted-average discount rate | 3.80% |
Cash paid for operating lease liabilities | $ 46,418 |
Operating lease assets obtained from new operating lease liabilities | $ 30,750 |
Derivative financial instrume_3
Derivative financial instruments Textuals (Details) - USD ($) | 9 Months Ended | |
Mar. 28, 2020 | Jun. 29, 2019 | |
Derivative fair value | ||
Derivative assets fair value | $ 15,614,000 | $ 5,511,000 |
Derivative liabilities fair value | $ 14,147,000 | $ 6,154,000 |
Minimum | Foreign Exchange Forward | ||
Derivatives, Fair Value [Line Items] | ||
Maximum maturity of foreign exchange contracts (less than one year) | 60 days | |
Maximum | Foreign Exchange Forward | ||
Derivatives, Fair Value [Line Items] | ||
Maximum maturity of foreign exchange contracts (less than one year) | 1 year |
Derivative financial instrume_4
Derivative financial instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 28, 2020 | Mar. 30, 2019 | Mar. 28, 2020 | Mar. 30, 2019 | |
Derivative financial instruments | ||||
Net derivative financial instrument (loss) gain | $ (3,247) | $ (398) | $ 7,856 | $ (17) |
Commitments and contingencies (
Commitments and contingencies (Textuals) (Details) - USD ($) $ in Millions | Mar. 28, 2020 | Jun. 29, 2019 |
Loss Contingency, Estimate [Abstract] | ||
Estimate of possible loss | $ 14.7 | $ 14.7 |
Income taxes (Details)
Income taxes (Details) | 3 Months Ended | 9 Months Ended | ||
Mar. 28, 2020 | Mar. 30, 2019 | Mar. 28, 2020 | Mar. 30, 2019 | |
Income taxes | ||||
Effective tax rate | (18.60%) | 24.40% | (27.00%) | 29.50% |
Pension and retirement plans (P
Pension and retirement plans (Periodic Pension Cost) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 28, 2020 | Mar. 30, 2019 | Mar. 28, 2020 | Mar. 30, 2019 | |
Components of net periodic pension costs | ||||
Service cost | $ 3,786 | $ 3,582 | $ 11,358 | $ 11,050 |
Interest cost | 5,638 | 8,010 | 16,914 | 21,238 |
Expected return on plan assets | (12,668) | (16,003) | (38,003) | (42,605) |
Amortization of prior service cost (credit) | 534 | (392) | 1,603 | (1,178) |
Recognized net actuarial loss | 3,658 | 2,091 | 10,972 | 7,161 |
Net periodic pension cost (benefit) | 948 | (2,712) | 2,844 | (4,334) |
Selling, General and Administrative Expenses | ||||
Components of net periodic pension costs | ||||
Net periodic pension cost (benefit) | 3,786 | 3,582 | 11,358 | 11,050 |
Other Income, net | ||||
Components of net periodic pension costs | ||||
Net periodic pension cost (benefit) | (2,838) | $ (6,294) | (8,514) | $ (15,384) |
Plan | ||||
Components of net periodic pension costs | ||||
Contributions | 4,000 | |||
Estimated future employer pension plan contributions | $ 4,000 | $ 4,000 |
Shareholders' equity (Share rep
Shareholders' equity (Share repurchase program textuals) (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Mar. 28, 2020 | Feb. 22, 2020 | Mar. 28, 2020 | Mar. 30, 2019 | Mar. 28, 2020 | Mar. 30, 2019 | |
Shareholders' equity | ||||||
Authorized repurchase of common stock under Share Repurchase Program | $ 2,950,000 | $ 2,950,000 | $ 2,950,000 | |||
Shares repurchased during period (in shares) | 1.1 | 5.9 | ||||
Cost of repurchase | $ 36,700 | $ 236,400 | ||||
Remaining authorized repurchase amount | 469,000 | $ 469,000 | $ 469,000 | |||
Cash dividends paid per common share | $ 0.21 | $ 0.21 | $ 0.20 | $ 0.63 | $ 0.60 | |
Dividends paid on common stock | $ 20,800 | $ 63,235 | $ 66,188 |
Earnings per share (Details)
Earnings per share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Mar. 28, 2020 | Dec. 28, 2019 | Sep. 28, 2019 | Mar. 30, 2019 | Dec. 29, 2018 | Sep. 29, 2018 | Mar. 28, 2020 | Mar. 30, 2019 | |
Numerator: | ||||||||
Income (loss) from continuing operations | $ (128,661) | $ 94,935 | $ (81,694) | $ 215,239 | ||||
Loss from discontinued operations, net of tax | (6,887) | (1,548) | (7,066) | |||||
Net (loss) income | $ (128,661) | $ 3,668 | $ 41,752 | $ 88,048 | $ 36,401 | $ 83,724 | $ (83,242) | $ 208,173 |
Denominator: | ||||||||
Weighted average common shares for basic earnings per share | 99,479,000 | 108,074,000 | 101,013,000 | 111,222,000 | ||||
Net effect of dilutive stock based compensation awards | 748,000 | 1,030,000 | ||||||
Weighted average common shares for diluted earnings per share | 99,479,000 | 108,822,000 | 101,013,000 | 112,252,000 | ||||
Basic (loss) earnings per share - continuing operations | $ (1.29) | $ 0.87 | $ (0.81) | $ 1.93 | ||||
Basic loss per share-discontinued operations | (0.06) | (0.01) | (0.06) | |||||
Basic (loss) earnings per share | (1.29) | 0.81 | (0.82) | 1.87 | ||||
Diluted (loss) earnings per share - continuing operations | (1.29) | 0.87 | (0.81) | 1.91 | ||||
Diluted loss per share-discontinued operations | (0.06) | (0.01) | (0.06) | |||||
Diluted (loss) earnings per share | $ (1.29) | $ 0.81 | $ (0.82) | $ 1.85 | ||||
antidilutive Securities | 208,399 | 775,060 | ||||||
Stock Options | ||||||||
Denominator: | ||||||||
antidilutive Securities | 1,431,000 | 528,000 | 1,018,000 | 410,000 |
Additional cash flow informat_3
Additional cash flow information (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Mar. 28, 2020 | Mar. 30, 2019 | Jun. 29, 2019 | |
Interest and income taxes paid | |||
Capital expenditures incurred but not paid | $ 5,366 | $ 10,310 | |
Unsettled share repurchases | 4,740 | ||
Interest | 88,472 | 87,845 | |
Income tax payments - continuing and discontinued operations | 14,689 | $ 150,765 | |
Cash equivalents | $ 4,100 | $ 9,400 |
Segment information (Details)
Segment information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 28, 2020 | Mar. 30, 2019 | Mar. 28, 2020 | Mar. 30, 2019 | |
Sales, by segment | ||||
Sales | $ 4,309,818 | $ 4,698,824 | $ 13,474,632 | $ 14,837,683 |
Operating income (expense): | ||||
Restructuring, integration and other expenses | (19,211) | (2,939) | (58,073) | (79,986) |
Goodwill and intangible asset impairment expense | (145,836) | (145,836) | ||
Amortization of acquired intangible assets and other | (21,071) | (22,080) | (62,603) | (63,520) |
Operating (loss) income | (115,760) | 153,085 | (6,548) | 395,951 |
Segment | ||||
Operating income (expense): | ||||
Operating (loss) income | 108,191 | 198,970 | 355,380 | 599,871 |
Corporate | ||||
Operating income (expense): | ||||
Corporate | (37,833) | (20,866) | (95,416) | (60,414) |
Electronic Components | Segment | ||||
Sales, by segment | ||||
Sales | 3,974,669 | 4,331,351 | 12,472,484 | 13,722,890 |
Operating income (expense): | ||||
Operating (loss) income | 84,841 | 153,319 | 290,271 | 473,783 |
Farnell | Segment | ||||
Sales, by segment | ||||
Sales | 335,149 | 367,473 | 1,002,148 | 1,114,793 |
Operating income (expense): | ||||
Operating (loss) income | $ 23,350 | $ 45,651 | $ 65,109 | $ 126,088 |
Segment information (Sales, by
Segment information (Sales, by geographic area) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 28, 2020 | Mar. 30, 2019 | Mar. 28, 2020 | Mar. 30, 2019 | |
Sales, by geographic area: | ||||
Sales | $ 4,309,818 | $ 4,698,824 | $ 13,474,632 | $ 14,837,683 |
Americas | ||||
Sales, by geographic area: | ||||
Sales | 1,203,605 | 1,297,220 | 3,605,944 | 3,869,435 |
United States | ||||
Sales, by geographic area: | ||||
Sales | 1,110,000 | 1,220,000 | 3,370,000 | 3,610,000 |
EMEA | ||||
Sales, by geographic area: | ||||
Sales | 1,512,476 | 1,740,916 | 4,409,258 | 5,124,409 |
Germany | ||||
Sales, by geographic area: | ||||
Sales | 568,000 | 666,200 | 1,690,000 | 2,000,000 |
Belgium | ||||
Sales, by geographic area: | ||||
Sales | 278,300 | 311,900 | 837,700 | 868,200 |
Asia Pacific | ||||
Sales, by geographic area: | ||||
Sales | 1,593,737 | 1,660,688 | 5,459,430 | 5,843,839 |
Taiwan | ||||
Sales, by geographic area: | ||||
Sales | 649,700 | 659,700 | 2,390,000 | 2,470,000 |
China (including Hong Kong) | ||||
Sales, by geographic area: | ||||
Sales | 524,100 | 565,500 | 1,760,000 | 1,930,000 |
SINGAPORE | ||||
Sales, by geographic area: | ||||
Sales | $ 239,300 | $ 237,200 | $ 722,700 | $ 779,500 |
Segment information (Property,
Segment information (Property, plant and equipment, net, by geographic area) (Details) - USD ($) $ in Thousands | Mar. 28, 2020 | Jun. 29, 2019 |
Property, plant and equipment, net, by geographic area | ||
Property, plant and equipment, net | $ 413,371 | $ 452,171 |
Americas | ||
Property, plant and equipment, net, by geographic area | ||
Property, plant and equipment, net | 193,859 | 213,802 |
United States | ||
Property, plant and equipment, net, by geographic area | ||
Property, plant and equipment, net | 189,000 | 209,900 |
EMEA | ||
Property, plant and equipment, net, by geographic area | ||
Property, plant and equipment, net | 183,903 | 200,379 |
Germany | ||
Property, plant and equipment, net, by geographic area | ||
Property, plant and equipment, net | 86,200 | 95,200 |
United Kingdom | ||
Property, plant and equipment, net, by geographic area | ||
Property, plant and equipment, net | 71,500 | 70,500 |
Belgium | ||
Property, plant and equipment, net, by geographic area | ||
Property, plant and equipment, net | 22,800 | 25,200 |
Asia Pacific | ||
Property, plant and equipment, net, by geographic area | ||
Property, plant and equipment, net | $ 35,609 | $ 37,990 |
Restructuring expenses (Details
Restructuring expenses (Details) $ in Thousands | 9 Months Ended |
Mar. 28, 2020USD ($) | |
Fiscal Year 2020 Restructuring Liabilities | |
Activity related to the restructuring reserves | |
Restructuring expenses | $ 37,072 |
Cash payments | (18,939) |
Non-cash amounts | (7,111) |
Other, principally foreign currency translation | (107) |
Ending Balance | 10,915 |
Fiscal Year 2019 And Prior Restructuring Liabilities | |
Activity related to the restructuring reserves | |
Beginning Balance | 26,918 |
Cash payments | (16,759) |
Changes in estimates, net | (3,075) |
Other, principally foreign currency translation | (666) |
Ending Balance | 6,418 |
Severance | Fiscal Year 2020 Restructuring Liabilities | |
Activity related to the restructuring reserves | |
Restructuring expenses | 26,895 |
Cash payments | (18,141) |
Other, principally foreign currency translation | (68) |
Ending Balance | 8,686 |
Severance | Fiscal Year 2019 And Prior Restructuring Liabilities | |
Activity related to the restructuring reserves | |
Beginning Balance | 21,537 |
Cash payments | (13,465) |
Changes in estimates, net | (3,448) |
Other, principally foreign currency translation | (548) |
Ending Balance | 4,076 |
Facility and Contract Exit Costs | Fiscal Year 2020 Restructuring Liabilities | |
Activity related to the restructuring reserves | |
Restructuring expenses | 3,066 |
Cash payments | (798) |
Other, principally foreign currency translation | (39) |
Ending Balance | 2,229 |
Facility and Contract Exit Costs | Fiscal Year 2019 And Prior Restructuring Liabilities | |
Activity related to the restructuring reserves | |
Beginning Balance | 5,381 |
Cash payments | (3,294) |
Changes in estimates, net | 373 |
Other, principally foreign currency translation | (118) |
Ending Balance | 2,342 |
Asset Impairments | Fiscal Year 2020 Restructuring Liabilities | |
Activity related to the restructuring reserves | |
Restructuring expenses | 7,111 |
Non-cash amounts | $ (7,111) |
Restructuring expenses (Textual
Restructuring expenses (Textuals) (Details) $ in Thousands | 9 Months Ended | |
Mar. 28, 2020USD ($)employee | Jun. 29, 2019USD ($) | |
Minimum | ||
Restructuring Cost and Reserve [Line Items] | ||
Number of employee reductions under Severance charges | employee | 400 | |
Fiscal Year 2020 Restructuring Liabilities | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring expenses | $ 37,072 | |
Restructuring Reserve | 10,915 | |
Fiscal Year 2020 Restructuring Liabilities | Electronic Components | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring expenses | 28,900 | |
Fiscal Year 2020 Restructuring Liabilities | Farnell | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring expenses | 6,300 | |
Fiscal Year 2020 Restructuring Liabilities | Corporate | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring expenses | 1,900 | |
Fiscal Year 2019 And Prior Restructuring Liabilities | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring Reserve | $ 6,418 | $ 26,918 |