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AVX Corp. Reports Operating Results (10-Q)

February 08, 2013 | About:
10qk

10qk

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AVX Corp. (AVX) filed Quarterly Report for the period ended 2012-12-31.

Avx Corporation has a market cap of $1.99 billion; its shares were traded at around $11.81 with a P/E ratio of 13.7 and P/S ratio of 1.4118. The dividend yield of Avx Corporation stocks is 2.54%. Avx Corporation had an annual average earning growth of 10.9% over the past 5 years.

Highlight of Business Operations:

For these derivatives designated as hedging instruments, during the three and nine months ended December 31, 2012, net pretax gains (losses) of $2,835 and $(507), respectively, were recognized in other comprehensive income (loss). In addition, during the three and nine months ended December 31, 2012, net pretax losses of $735 and $1,253, respectively, were reclassified from accumulated other comprehensive income into cost of sales (for hedging purchases), and net pretax gains (losses) of $(120) and $1,137, respectively, were reclassified from accumulated other comprehensive income into sales (for hedging sales) in the accompanying Statement of Operations. During the three and nine month periods ended December 31, 2011 and 2012, we discontinued an immaterial amount of cash flow hedges for which it was probable that a forecasted transaction would not occur.

Our sales to independent electronic distributor customers represented 40.3% of total sales for the three months ended December 31, 2012, compared to 35.0% for the three months ended December 31, 2011. Overall distributor activity increased when compared to the same period last year. This increase is reflective of demand improvements and the low inventory levels maintained by distributors in the prior year. Our sales to distributor customers involve specific ship and debit and stock rotation programs for which sales allowances are recorded as reductions in sales. Such allowance charges were $8.7 million, or 6.4% of gross sales to distributor customers, for the three months ended December 31, 2012 and $6.8 million, or 5.4% of gross sales to distributor customers, for the three months ended December 31, 2011. This increase in activity is reflective of the competitive market conditions and resulting increased pricing pressure when compared to the same period last year. Applications under such programs for the quarters ended December 31, 2012 and 2011 were approximately $8.5 million and $7.5 million, respectively.

Geographically, compared to the same period last year, sales decreased in Europe and the Americas, while increasing in Asia, tracking the overall macroeconomic conditions in these regions. Sales in the Asian market increased to 47.8% of total sales while sales in the Americas and Europe decreased to 27.1% and 25.1% of total sales, respectively. This compares to 44.9%, 27.6%, and 27.5% of total sales for the Asian, American, and European regions in the same period last year, respectively. The movement of the U.S. dollar against certain foreign currencies resulted in an unfavorable impact on sales of approximately $8.7 million when compared to the same quarter last year.

Our sales to independent electronic distributor customers represented 39.3% of total sales for the nine months ended December 31, 2012, compared to 38.3% for the nine months ended December 31, 2011. Overall distributor inventories increased when compared to the same period last year. This increase is reflective of demand improvements and the low inventory levels maintained by distributors in the prior year. Our sales to distributor customers involve specific ship and debit and stock rotation programs for which sales allowances are recorded as reductions in sales. Such allowance charges were $25.8 million, or 6.2% of gross sales to distributor customers, for the nine months ended December 31, 2012 and $21.5 million, or 4.5% of gross sales to distributor customers, for the nine months ended December 31, 2011. This increase in activity is reflective of the competitive market conditions and resulting increased pricing pressure resulting from the weaker economy when compared to the same period last year. Applications under such programs for the nine month periods ended December 30, 2012 and 2011 were approximately $25.5 million and $21.6 million, respectively.

Geographically, compared to the same period last year, sales decreased in all regions tracking the overall global macroeconomic conditions. Sales in the Asian market increased to 47.8% of total sales while sales in the Americas were unchanged at 27.4% and sales in Europe decreased to 24.8% of total sales, respectively. This compares to 45.1%, 27.4%, and 27.5% of total sales for the Asian, American, and European regions in the same period last year, respectively. The movement of the U.S. dollar against certain foreign currencies resulted in an unfavorable impact on sales of approximately $24.6 million when compared to the same period last year.

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