I would now like to turn the floor over to Vince Keenan, Avnet's Vice President of Investor Relations.

Good morning and welcome to Avnet's Second Quarter of Fiscal Year 2018 Business and Financial Update. As we provide the highlights for our second quarter fiscal year 2018. Please note that in the accompanying remarks we have excluded certain items including ERP accelerated depreciation, intangible, asset amortization expense, restructuring, integration and other items and certain discrete income tax adjustments from all periods covered in our non-GAAP results. When we refer to constant currency or the impact of foreign currency, we mean the impact due to the change in foreign currency exchange rates when translating Avnet's non-U.S. dollar based financial statements into U.S. dollars. When we refer to organic sales, we have adjusted the prior period to include the impact of acquisitions. In addition, when addressing return on capital employed, return on working capital and working capital velocity, the definitions are included in the non-GAAP financial information section of our earnings press release available on website at www.ir.avnet.com Before we get started with the presentation from Avnet management, I would like to review Avnet's Safe Harbor statement. This call contains certain forward-looking statements which are statements addressing future financial and operating results of Avnet. There are several factors that could cause actual results to differ materially from those described in the forward-looking statements. More detailed information about these and other factors are set forth in Avnet's filings with the Securities and Exchange Commission. In just a few moments, Bill Amelio, Avnet's CEO, will provide Avnet's second quarter fiscal year 2018 highlights. Following Bill, our Interim Chief Financial Officer, Ken Jacobson, will review some additional financial highlights and provide third quarter and full-year fiscal 2018 guidance. Also here today to take any questions you may have related to Avnet's business operations is Phil Gallagher, President, Electronic Components. With that, let me introduce Mr. Bill Amelio to discuss Avnet's second quarter fiscal 2018 business highlights.

Thank you, Vincent. Hello, everyone. Thank you for taking the time to be with us and your interest in Avnet. We build on our progress that we made in the first quarter of fiscal 2018 as revenues came at a high end of guidance. Our adjusted EPS exceeded guidance in both gross profit and adjusted operating margin increased from the September quarter. Revenue of $4.5 billion increased 5.8% year-over-year with organic revenue increasing 1.9% in constant currency. Both the Americas and Asia region exceeded expectation. When combined with continued growth in EMEA region help offset the supplier program changes as electronic components revenue increased 4% year-over-year and 10.2% year-over-year when you exclude the impact of those channel shifts. At Premier Farnell, organic revenue in constant increased 7.7% year-over-year driven by double digit growth in our Asia region. Our cost reduction initiative continue to gain traction as operating expenses declined $40 million or 2.9% sequentially, which contributed to a 17 basis points sequential increase in adjusted operating income margin. Ken will go over more financial details later in the call. However, I want to give you some highlights of our achievements in electronic components Americas region this quarter. As discussed in our October call, the Americas region which was disproportionately impacted by supplier program changes, as well as their ERP disruption has brought about and many other metrics were beginning to improve. This quarter, I am happy to report that the continued upward trend in performance metrics is having a positive impact on the Americas regions financial performance. Year-over-year reported revenue growth improved from a declined of 16% in the September quarter to the decline of 5.7% in the December quarter. Demand and creation metrics continue to improve as design registrations were up both sequentially and year-over-year, and the cumulative design…

Thank you, Bill, and hello, everyone. In our December quarter, reported revenue grew nearly 6% year-over-year while organic revenue increased nearly 2% in constant currency. When you exclude the negative impact of the previously announced supplier program changes, revenue would have increased 7.5% year-over-year in constant currency. At Premier Farnell, which is acquired in mid October of fiscal 2017, organic revenue grew 12.3% year-over-year or 7.7% in constant currency. Gross profit of $602 million increased $16 million or 2.8% year-over-year, primarily due to a full quarter of Premier Farnell result in the second quarter of fiscal 2018. Gross profit margin at 13.3% increased 18 basis points sequentially, primarily due to improvements in the western region of electronic component. Adjusted operating expenses of $457 million increased $35 million from the year ago quarter, primarily due to the acquisition of Premier Farnell and changes in foreign currency exchange rates. Sequentially, operating expenses decreased $14 million, or nearly 3% on a reported basis. Of the $14 million sequential reduction, approximately $10 million is attributable to our cost reduction initiative for an annualized impact of $40 million. Since exiting our previous fiscal year, the quarterly operating expense run rate has been reduced by nearly 4% or $18.6 million on a reported basis. This reduction trend is net of the increase in operating expenses incurred as a result of year-over-year organic sales growth. Our reduced operating expense in December quarter further demonstrates our commitment to accelerating our cost reduction initiative. And 60% of our $140 million of annualized cost saving has been achieved in the first half of fiscal year with the remaining savings to be realized in the second half of fiscal 2018. Adjusted operating income of $146 million increased nearly $4 million from the September quarter and adjusted operating income margin was up…

[Operator Instructions] Our first question comes from the line of Jim Suva with Citi. Please go ahead with your question.

Thank you very much and congratulation to you and your team there, really nice to -- nice to see the turnaround and profitability in sales. A quick question, you posted for the December quarter operating margin in your EM group of about 3.1% about I think it might be right there. That is down year-over-year, of course you had some chip suppliers leave as well as some chip suppliers coming in ERP system and such and you also have restructuring going on. So my question is going forward do you anticipate that number to be stable at that, go higher, and if so, if does go higher, can you help us quantify so we don't get too ahead of our sales because I think a year ago it was in mid 4% range. Thank you very much.

Sure. I'll give a little color to that. This is Bill. And thanks for your comments there Jim, appreciate it. With respect to our long range planning target it haven't changed what we gave you last quarter was by 2020 we expect somewhere between 4.5% or 5% operating income margin so that's remain the same. And we were hoping to have a nice glide path to that number as each quarter goes by. So we are looking to get continued improvement. If you look at Premier Farnell, we had improvement there, we bought the property, and it was in 67% operating income range now it is closer to 10% range. And we are seeing strengthening across all of our regions in the core business including the Americas which is great sign of the fact that we will have improved operating income moving forward.

With that improvement do you think you can get back up to those historical ranges in a 4%? Or I guess the concern is with the vendor consolidation or the chip consolidation, is pricing and margin a little bit different than they what have been in historically?

No doubt that we have pressure from gross profit from supplier consolidation. However, with our four pillar strategy that I laid out earlier in the call, we believe that going to position us well, getting more of our business digitally focused which is not just ecommerce but it's also digitizing our own business so we can take more OpEx out. Rightsizing the company and maximizing usage of the ecosystem as well as the transformation project that's well underway. Let me speak to that for a just moment. We are about half way through the transformation project and we are heading where we expect to believe with respect to savings which include both growth project as well as cost reduction projects and we see that those four things is helping us shore up our margins going forward and being able to offset what we've seen as far as pressure from the suppliers.

Our next question comes from the line of Adrienne Colby with Deutsche Bank. Please go ahead with your question.

Hi. Thanks for taking my questions. I was wondering if you could tell us what book-to-bill was in the quarter.

Sure. Book-to-bill across all that net was well over 1.1 and in some cases I'd say the average of a company about 1.16 so really healthy outlook for the business right now. So we are pretty excited about with the future of product.

Great. So my question would be organic growth is accelerated sequentially from about 2% to 1% despite what seems to be an otherwise pretty positive or healthy demand environment and what you mentioned we are improving declines in the Americas. Can you help us to define the dynamics in the quarter and maybe the weakening you are seeing in the EMEA region in terms of your expectation they are going forward.

Okay. Couple points I make on that. First, if you take out the supplier impact that we have we grew at the company at 7.8% so that's I think an important metric to look at. So when you normalize that it would be six suppliers we had a pretty healthy growth. Regarding EMEA specifically, look, we had 18 quarters of growth in EMEA, we have now lapped double digit growth year so it's not surprising that it has come down a little bit but that's -- I would still say EMEA is on fire for us and we were taking share, we've been able to win lots of customers and will replacing all the sockets that we've lost with respect to some of the supplier dislocation. So we are pretty bullish around what's going on in EMEA.

Our next question comes from the line of Matt Sheerin with Stifel. Please go ahead with your question.

Yes. Thanks. Just following up on that question regarding this current business environment. If you look at your guidance, it actually looks like you are seeing accelerated organic growth above seasonal. So could you give us an idea of what you are expecting per region relative to normal seasonality?

We usually don't break it out in that sort of detail. I'd tell you what we think overall as guidance; we are roughly in line with what we think the seasonality is. So I am just call -- I don't think you are going to give a change in seasonality. As you know, we are a different business than we were a couple of years ago. And when we do our Analyst Day we will be real specific about what we think the seasonality is by quarter, we will lay that out for you.

Hey, Matt. This is Phil. I'll jump into that -- just by region outlook if you will, I mean we thought about the Americas, September was going to be tough quarter, we feel confident coming out of December quarter in Americas. And we think that's going to continue, as Bill pointing out the positive book-to-bill backlog is growing and we are gaining more customers as far as confidence here at home in Americas. Europe - Europe continued to be strong, and as for last question that the Bill commented on, we are lapping on our comp at this point in Europe but definitely we see positive, continued positive in the March quarter. In Asia Pac, even with Chinese New Year, okay, the outlook in Asia is looking very positive. So I think I don't want to be - -and it's tough to define what seasonality is or with all the business change and the climate changes, the application to the market, I think we got to look in the venture if I got to readjust some of our own seasonality based on the new model we have moving forward. But I don't want to get into additional color. All regions really, really good at this point in time.

Okay, very helpful. And then just regarding the operating margin opportunities going forward to that 4.5 plus, is that primarily improvements from North America? It sounds like by region North America maybe actually the lower of the three regions. So -- and is that the opportunity as you go forward or there are some -- I guess with improving Farnell integration in Europe you still have some room to go there as well.

Yes, no, I wouldn't just point to Americas. But clearly Americas is an important part of recovery of our [OI] percent but it's also these four pillars that I described impact every one of the businesses across. So every one of the regions and business unit across Avnet.

Okay. Our next question comes from the line of Adam Tindle with Raymond James. Please go ahead with your question.

Okay, thanks and good morning. I just wanted to circle back to the earlier question on supplier dynamics and pressure. I think you previously mentioned that the changes from TI are going to be out of the model by the end of calendar 2017. So just wanted confirm that is still the case and maybe for Phil, what are you seeing from other suppliers? I think you mentioned in the prepared comments you actually had some upside to margin in the quarter due to payment of a supplier program and margin in the core business in the western region improved so it doesn't sound to me like other suppliers are moving to pressure price or reduce margin. Am I understanding that correctly?

Yes. I'll take that. 2017 marks the end of the TI model change. We generally don't like to talk specifically to suppliers and they are still great supplier for us moving forward no doubt. One of our top ones. As far as the model change, the common question we have, no, we don't see other suppliers following through. As a matter fact with some of the other changes we have had to our line card, we see other suppliers really doubling down with us on demand generation registration to design wins I think we noted in the script. Actually where we have had model changes or line card changes, we replaced all those sockets, and the number sockets in registration and design wins now we know the gestation period of taking of anywhere from 8 months to 18 months for us to see that revenue come back into play. But we feel really confident where we are at today and never comfortable but really confident in where we are today with the current supplier base.

Yes. I'd add to that Adam that the highlight that we've added six new franchises in electronics component this quarter and we experienced this regional coverage of additional four suppliers and at Premier Farnell we added nine new franchises. So I think we are gaining momentum when it comes to the suppliers.

Okay. That's really helpful clarification. Just one follow up on the guidance particular the EPS guidance. I think you are implying operating profit dollar or kind of somewhere in $1.70 to $1.80 range for both Q3 and Q4. I maybe missing something below the operating line so please correct me if I am wrong. But why wouldn't we see more of a decline in the June quarter based on the implied revenue decline. I don't think regional mix is typically favorable and it seems like there is little incremental cost cuts. So just trying to understand the expectations and linearity to the back half of the year for profit dollars. Thanks.

Yes. Adam, this is Ken. I would say you are in the ballpark from an operating income perspective. And I guess how I would characterize it is I think they typically from an EPS perspective from a Q3 to Q4 or second March and June quarter we have typically been around flattish not a significant decline so two point about the cost cut being some -- the rest of the back half loaded that kind of make up some of the lower GP from available decline.

Our next question comes from the line of William Stein with SunTrust. Please go ahead with your question.

Great, thanks. First regarding the last topic. It seems to be that the implied guide for Q4 is little bit below historically what you have done in terms of normal seasonality. I know there was comment earlier that it's different now. Does this just fit into that narrative of the seasonality being different today given all the changes in last year or two? Or does it reflect some incremental conservatism or anything else?

I think it's more of predictability of seasonality is still kind of shifting target but we think that it is in line with what we are seeing right now and if we see a strong Q3 and have to change that and get to Q4 guidance we will, but right now we feel good with the range we've given. Our track record is kind of being coming in the higher end of that range but we feel pretty confident right now.

I'd also point out that in our guidance also include the nice sequential improvement operating income margin. We went up 41 basis points versus the historic range and 35 to 45. And I think that's consistent with electronics components historic performance with the experience of the mix shift to higher margin western region. So I'll give you a little bit color on, our thoughts on the seasonality.

It's really helpful. Just a couple quick follow ups. First, there was an inventory build sequentially and even year-over-year it was even more significant on a dollars basis. That was sort of surprising to me given the number one, you are improving what was the main issue right that you've improved this ERP implementation, you normally expect to see inventories coming to a more tame situation so are shortages influencing that or something else -- what's causing this?

I'll give you a little color and I'll let Phil jump in as well. Couple things that we -- definitely things that we've done. One for example we expands SKU count and the inventory in Premier Farnell now as you would recall if you profile that versus their nearest competitors we didn't have as many as SKUs now we are adding more in order for us to gain more business and we will get a big pay off for that. That's a good thing Second thing is we implemented the first ERP system since the Americas one highly successful in Europe and we had inventories build up in order to make sure that we were prepared for any glitch that might occur which didn't occur because we had essentially knock on wood, a flawless implication and to those are primary reasons why the inventory went up a bit and our game plan going forward support that by bringing down working capital and working capital day.

Yes. Let me add to that. Well, and you mentioned in the Americas and ERP and hey we are still working through the right. So we are gaining improvements there. We are going to continue to see improvements as well. We are helping all the industries that we track and that you track. Another thing is lead time. And Bill kind of alluded to that. Our lead times are not coming in. Lead times are out. Our book-to-bill is solid, in case we got to grow -- it's perfect inventory, they support the book-to-bill in the backlog we have going to the March June quarter. So we feel pretty good with the inventory level right now by the way. And we don't see them increasing in the March quarter by any stretch of the imagination. It's really there just to support the growth and the lead time issue as well as Bill mentioned to boost implementation ERP in Europe.

Our next question is come from the line of Shawn Harrison with Longbow. Please go ahead with your question.

Good morning. Wanted to start first about he linearity of I guess the remaining cost cuts. It looks like there is $50 million annualized. How is that split between the margins in June quarters?

Yes. I guess I would say that it's more back loaded to the June quarter and we got about 60% so I would say kind of directionally you get another 15% in the third quarter and then the remaining 25% in the fourth quarter.

Okay. And then if I may follow up, you just touched on this briefly earlier and then in the prepared remarks, the new sockets one that comment that essentially saying those that have left at and now you found other suppliers now let's replace those. And you are at a point of ramping just fulfillment revenue or was the comment on your design registration associated with that business. Just trying to get better triangulation of kind of what those comments actually mean to revenue growth let say.

I'll say few comments and let Phil want to chime in as well. It means that we've -- sockets that we lost we will now replace them with design registration with other supplier on our line card. However, as you know, it takes anywhere from 6 months to 18 months to convert design registration into a design win and get the revenue for it. So the point is we made great progress on being able to design in others in the line card and be able to make up the losses that we have with those supplier shift.

No, I can share -- it wasn't our new supplier. It really most of our current suppliers so they have a similar technology. We don't have any one supplier apart from maybe an FBGA supplier that is excludes from the technology standpoint. So it's gaps and overlaps with the line card. Some of the size we moved to different model or change their line card or their channel strategy. We have others supplier that have those similar technologies that we can move forward with. And that's what we do. We just double down our resources with them and as they did back with us.

For the demonstration of the breadth of our line card and as Phil pointed out that we don't have any gap. We actually have the ability to be able to shift pretty quickly with respect to our design resources.

Our next question is comes from line of Steven Fox with Cross Research. Please go ahead with your question.

Thanks. Good morning. First question, you mentioned that you have added SKUs to Premier Farnell and you also mentioned I think it was 9 suppliers that joined the Premier Farnell for their line card source, hoping to get just a little bit more color. How much can you give on in terms of how much this SKUs account went up, how much just from using internal relationship at the cross Premier Farnell and how much was related to some of these new suppliers. And then I had a follow up.

So I have a lot there, Steve. [Multi Speakers] I'll take a try at. So what we did was we profile the industry and we looked and said okay where this Premier Farnell stack up with respect to SKU counts versus where they compete against and we were short. So what we did was we analyzed where the highest runners were and we are systematically putting those higher runners and we are continuing to add as long as we see that there is a payback and return and as you see with the growth out of Premier Farnell and increased profitability, it's a good bet for us. And we will continue to do that. With respect to the nine suppliers and franchise, some of that, the fact we have the ability to utilize some of the supply lines that are in Avnet and therefore we are able to now win in Premier Farnell because of the relationship between Premier Farnell and Avnet. So I'd give you this kind of number as far as you can't go, in half a year we added about 50,000 SKUs to give roughly like number.

And most of that was by leveraging existing relationships that Avnet already had?

No, most of were actually -- it is the relationship from Premier Farnell and Avnet. Some of that works from Avnet but most of it from Premier Farnell.

Okay, thanks. And then can you provide a little bit more color on just the exact level of growth in terms of design wins and how it compared to maybe the last quarter or two?

We'll have to get back to you on that. I don't have that one right in front for me but we will get that offline, we will have it for you later.

Yes. Steve, I don't have that data point in front of me but we will give you it one way.

Okay and then just very last question if you could, just give us a sense when you look at the guidance for the full year now versus prior, how much exactly was related to currencies on the top line versus 90 days ago?

Yes. I would say currency is driving a little bit, the rate went up but we also have fair amount of what the dollar sales in Europe. So there are some little bit of washing of FX because although there are some declines and some improvements because of the stronger euro so I don't think it's biggest driver of that.

Our next question is come from the line of Mark Delaney with Goldman Sachs. Please go ahead with your question.

Yes, good morning. And thanks for the opportunity to ask question. My first question is on the 2018 revenue guidance. I think the company took up its revenue guidance by $400 million at the midpoint. Can you help us better understand what the key drivers are? Is there incremental $400 million versus company's prior expectation? And if any of that is going from the Marvell win that the company talked about last quarter, or if not shifting this year what should we think about that comment?

Yes. Let me take a shot at that, Mark. Thanks. This is Phil. We are just seeing -- we are seeing generally good organic growth right. And Europe as we touched on earlier is continue to show strength, good strength in both you have automotive by the way and I should note automotive in all regions we are seeing good growth. And as well in the industrial segment. So we are seeing good organic growth in Europe, accelerated continued growth as we talked about earlier in Asia Pac and as we talk our Americas numbers are starting to get better and that is helping tremendously, okay on not only the Bill pointed earlier on the top line but also on the bottom line as we get more help in the Americas. So that's about it. I wouldn't say Marvell win big one, I think that will start to have a bigger impact towards in the balance of the calendar year but that wouldn't be -- some of that would be in there but not a whole lot at this point in time, Mark.

That's helpful color, Phil. Thanks for that and for my follow up question and I am hoping just to better understand the SG&A dollars for the March quarter. I think traditionally in the March quarter is maybe $5 up $10 million or so or some years you may have a little bit more than that, but with incremental cost cuts that are coming, I have been expecting it to be relatively flat. But when I try back it into the guidance, it seems like maybe SG&A dollars are more like $15 million to $20 million sequentially. So maybe just help me understand the SG&A line a little bit better and maybe trade-offs around gross margin so we can better understand the guidance. Thank you.

Sure. Yes, this is Ken. I would say that one thing is to think about it is on your OpEx line, do have some FX impact there and then you have the volume as well. So those two things are driving up a little bit. You are right that historically it is up and then there is still some net savings there from the cost reduction actions we talked about.

Thank you. This concludes our question-and-answer session. I'd like to turn the floor back over to management for closing comments.

Thank you for participating in our earnings call today. Our second quarter fiscal 2018 earnings press release can be accessed at a downloadable PDF format at our website www.ir.avnet.com. Thank you.

Thank you. This concludes today's conference. You may disconnect your lines at this time. And thank you for your participation.