Avnet Inc has a market cap of $3.9 billion; its shares were traded at around $28.44 with a P/E ratio of 6.8 and P/S ratio of 0.2.
Highlight of Business Operations:Selling, general and administrative expenses (“SG&A expenses”) were $547.0 million in the first quarter of fiscal 2013, an increase of $16.5 million, or 3.1%, from the prior year first quarter. This $16.5 million increase consisted of (i) approximately $37 million related to an increase in expenses from businesses acquired, (ii) approximately $1.5 million related to an increase in expenses for the existing business, which was tempered by the recent cost reduction actions taken, partially offset by (iii) approximately $22 million related to a decrease due to the translation impact of changes in foreign currency exchange rates. Metrics that management monitors with respect to its operating expenses are SG&A expenses as a percentage of sales and as a percentage of gross profit. In the first quarter of fiscal 2013, SG&A expenses as a percentage of sales were 9.3% and as a percentage of gross profit were 79.9% as compared with 8.3% and 70.4%, respectively, in the first quarter of fiscal 2012. SG&A expenses as a percentage of gross profit at TS and EM increased 1,004 basis points and 687 basis points, year over year, respectively, primarily due to the decline in gross profit dollars resulting from lower sales.
During periods of weakening demand in the electronic component and enterprise computer solutions industry, the Company typically generates cash from operating activities. Conversely, the Company is also more likely to use operating cash flows for working capital requirements during periods of higher growth. During the first three months of fiscal 2013, the Company generated $81.0 million of cash from operations as revenue declined and has generated $813.8 million of cash from operations over the trailing twelve month period. Management believes that Avnet s borrowing capacity, its current cash availability and the Company s expected ability to generate operating cash flows in the future are sufficient to meet its projected financing needs.
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