Arrow Electronics Reports Second-Quarter 2019 Results

— Cash Provided by Operating Activities of $405 Million —

— Repurchased $150 Million of Common Stock —

CENTENNIAL, Colo.–(BUSINESS WIRE)–Arrow Electronics, Inc. (NYSE:ARW) today reported second-quarter 2019 sales of $7.34 billion, a decrease of 1 percent from sales of $7.39 billion in the second quarter of 2018. Second-quarter sales, as adjusted, increased 2 percent year over year. The company reported a second-quarter net loss of $549 million, or $(6.48) per share on a diluted basis, compared with net income of $170 million, or $1.92 per share on a diluted basis, in the second quarter of 2018. Excluding certain items1, net income would have been $137 million, or $1.60 per share on a diluted basis, in the second quarter of 2019, compared with net income of $194 million, or $2.19 per share on a diluted basis, in the second quarter of 2018. In the second quarter of 2019, changes in foreign currencies negatively impacted growth by approximately $148 million or 2 percent on sales and $.06 or 2 percent on earnings per share on a diluted basis compared to the second quarter of 2018.

Global components second-quarter sales of $5.27 billion were flat year over year. Sales, as adjusted, increased 2 percent year over year. Europe components sales decreased 2 percent year over year. Sales in the region, as adjusted, increased 4 percent year over year. Asia-Pacific components sales increased 4 percent year over year. Americas components sales decreased 3 percent year over year. Global components second-quarter operating loss was $562 million. Second-quarter operating income, excluding amortization of intangibles expense, as adjusted, was $207 million.

“Despite facing challenging market conditions in the second quarter, and an ongoing inventory correction, we are encouraged by the significant progress we continue to make in executing our long-term strategy,” said Michael J. Long, chairman, president, and chief executive officer. “We are leveraging our integrated solutions and expanded reach to drive innovation forward for our customers, and remain committed to continuing to expand engineering services and lead the convergence of information technology with operational technology. We are confident that the steps we are taking today to strengthen our focus on the key technology areas of smart cities, smart homes, and smart connected vehicles, will not only enhance shareholder value, but also improve people’s lives.”

Global enterprise computing solutions second-quarter sales of $2.07 billion decreased 2 percent year over year. Sales, as adjusted, increased 1 percent year over year. Europe enterprise computing solutions sales decreased 3 percent year over year. Sales in the region, as adjusted, increased 5 percent year over year. Americas enterprise computing solutions sales decreased 1 percent year over year. Sales in the region, as adjusted, were flat year over year. Global enterprise computing solutions second-quarter operating income was $98 million. Second-quarter operating income, excluding amortization of intangibles expense, as adjusted, totaled $101 million.

“Arrow is committed to capitalizing on opportunities available to us, and to that end, we continue to align and evolve our enterprise computing solutions business toward advanced, higher-value software-led solutions,” said Mr. Long. “We are pleased that our infrastructure software and security solutions again produced healthy growth on a year-over-year basis in the second quarter.”

“Second-quarter cash provided by operating activities was $405 million. As we advance our efforts to reduce working capital and use our strong, countercyclical cash flow to position the company for long-term profit acceleration when market conditions improve, we also remain focused on preserving near-term profitability. We have commenced our previously announced cost optimization program, and are executing on our plan to drive efficiencies while generating approximately $130 million in annualized cost savings,” said Chris Stansbury, senior vice president and chief financial officer. “We remain committed to returning excess cash to shareholders. Consistent with this commitment, we returned approximately $150 million to shareholders through our stock repurchase program during the second quarter. At the end of the quarter, we had approximately $539 million of remaining authorization under our share repurchase program.”

1 A reconciliation of non-GAAP adjusted financial measures, including sales, as adjusted, operating income, as adjusted, net income attributable to shareholders, as adjusted, and net income per share, as adjusted, to GAAP financial measures is presented in the reconciliation tables included herein.

GUIDANCE

“Our third-quarter outlook excludes the financial results from the PC and mobility asset disposition business. As we look to the third quarter, we expect total sales to range between $6.850 billion and $7.250 billion, with global components sales between $4.925 billion and $5.125 billion, and global enterprise computing solutions sales between $1.925 billion and $2.125 billion. As a result of this outlook, we expect earnings per share on a diluted basis to range from $.97 to $1.09, and earnings per share on a diluted basis, excluding certain items1, to range from $1.62 to $1.74 per share. Our guidance assumes interest expense will total approximately $54 million. Our guidance also assumes an average tax rate at the high end of the long-term range of 23.5 percent to 25.5 percent, and average diluted shares outstanding of approximately 85 million. We are expecting the average USD-to-Euro exchange rate for the third quarter to be approximately $1.12 to €1. We estimate changes in foreign currencies will have a negative impact on growth of approximately $90 million, or 1 percent on sales, and $.05, or 2 percent, on earnings per share on a diluted basis compared to the third quarter of 2018,” said Mr. Stansbury.

Please refer to the CFO commentary, which can be found at investor.arrow.com, as a supplement to the company’s earnings release.

Arrow Electronics guides innovation forward for over 200,000 leading technology manufacturers and service providers. With 2018 sales of $30 billion, Arrow develops technology solutions that improve business and daily life. Learn more at fiveyearsout.com.

Information Relating to Forward-Looking Statements

This press release includes forward-looking statements that are subject to numerous assumptions, risks, and uncertainties, which could cause actual results or facts to differ materially from such statements for a variety of reasons, including, but not limited to: industry conditions, the company’s implementation of its new enterprise resource planning system, changes in product supply, pricing and customer demand, competition, other vagaries in the global components and global enterprise computing solutions markets, changes in relationships with key suppliers, increased profit margin pressure, the effects of additional actions taken to become more efficient or lower costs, risks related to the integration of acquired businesses, changes in legal and regulatory matters, and the company’s ability to generate additional cash flow. Forward-looking statements are those statements which are not statements of historical fact. These forward-looking statements can be identified by forward-looking words such as “expects,” “anticipates,” “intends,” “plans,” “may,” “will,” “believes,” “seeks,” “estimates,” and similar expressions. Shareholders and other readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. The company undertakes no obligation to update publicly or revise any of the forward-looking statements.

For a further discussion of factors to consider in connection with these forward-looking statements, investors should refer to Item 1A Risk Factors of the company’s Annual Report on Form 10-K for the year ended Dec. 31, 2018.

Certain Non-GAAP Financial Information

In addition to disclosing financial results that are determined in accordance with accounting principles generally accepted in the United States (“GAAP”), the company also provides certain non-GAAP financial information relating to sales, operating income, net income attributable to shareholders, and net income per basic and diluted share.

The company provides sales, gross profit, and operating expense on a non-GAAP basis adjusted for the impact of changes in foreign currencies (referred to as “impact of changes in foreign currencies”) by re-translating prior period results at current period foreign exchange rates, the impact of dispositions by adjusting the company’s operating results for businesses disposed, as if the dispositions had occurred at the beginning of the earliest period presented (referred to as “impact of dispositions”), the impact of the company’s personal computer and mobility asset disposition business (referred to as “impact of wind down”), the impact of inventory reserves related to the digital business (referred to as “impact of digital inventory reserve”), and the impact of the notes receivable and inventory reserve related to the AFS business (referred to as “AFS notes receivable reserve” and “AFS inventory reserve,” respectively). Operating income is adjusted to exclude identifiable intangible asset amortization, restructuring, integration, and other charges, and loss on disposition of businesses, net, AFS notes receivable and inventory reserve, digital inventory reserve, the impact of non-cash charges related to goodwill, tradenames, and property, plant and equipment, and the impact of wind down. Net income attributable to shareholders, and net income per basic and diluted share are adjusted to exclude identifiable intangible asset amortization, restructuring, integration, and other charges, and loss on disposition of businesses, net, AFS notes receivable and inventory reserve, digital inventory reserve, the impact of non-cash charges related to goodwill, tradenames, and property, plant and equipment, the impact of wind down, and the impact of U.S. tax reform. A reconciliation of the company’s non-GAAP financial information to GAAP is set forth in the tables below.

The company believes that such non-GAAP financial information is useful to investors to assist in assessing and understanding the company’s operating performance and underlying trends in the company’s business because management considers these items referred to above to be outside the company’s core operating results. This non-GAAP financial information is among the primary indicators management uses as a basis for evaluating the company’s financial and operating performance. In addition, the company’s Board of Directors may use this non-GAAP financial information in evaluating management performance and setting management compensation.

The presentation of this additional non-GAAP financial information is not meant to be considered in isolation or as a substitute for, or alternative to, sales, operating income, net income and net income per basic and diluted share determined in accordance with GAAP. Analysis of results and outlook on a non-GAAP basis should be used as a complement to, and in conjunction with, data presented in accordance with GAAP.

ARROW ELECTRONICS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands except per share data)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended

 

Six Months Ended

 

 

June 29, 2019

 

June 30, 2018

 

June 29, 2019

 

June 30, 2018

 

 

 

 

 

 

 

 

 

Sales

 

$

7,344,548

 

 

$

7,392,528

 

 

$

14,500,539

 

 

$

14,268,141

 

Cost of sales

 

6,529,639

 

 

6,459,708

 

 

12,823,942

 

 

12,466,377

 

Gross profit

 

814,909

 

 

932,820

 

 

1,676,597

 

 

1,801,764

 

Operating expenses:

 

 

 

 

 

 

 

 

Selling, general, and administrative expenses

 

599,212

 

 

580,388

 

 

1,155,288

 

 

1,143,357

 

Depreciation and amortization

 

46,982

 

 

46,422

 

 

94,508

 

 

93,669

 

Loss on disposition of businesses, net

 

 

 

 

 

866

 

 

1,562

 

Impairments

 

697,993

 

 

 

 

697,993

 

 

 

Restructuring, integration, and other charges

 

19,912

 

 

19,183

 

 

31,572

 

 

40,354

 

 

 

1,364,099

 

 

645,993

 

 

1,980,227

 

 

1,278,942

 

Operating income (loss)

 

(549,190

)

 

286,827

 

 

(303,630

)

 

522,822

 

Equity in earnings (losses) of affiliated companies

 

382

 

 

517

 

 

(1,085

)

 

(156

)

Gain (loss) on investments, net

 

1,390

 

 

(2,563

)

 

6,738

 

 

(5,015

)

Employee benefit plan expense

 

1,139

 

 

1,257

 

 

2,278

 

 

2,488

 

Interest and other financing expense, net

 

51,563

 

 

60,803

 

 

103,544

 

 

105,982

 

Income (loss) before income taxes

 

(600,120

)

 

222,721

 

 

(403,799

)

 

409,181

 

Provision (benefit) for income taxes

 

(52,369

)

 

51,681

 

 

1,538

 

 

98,271

 

Consolidated net income (loss)

 

(547,751

)

 

171,040

 

 

(405,337

)

 

310,910

 

Noncontrolling interests

 

1,215

 

 

1,125

 

 

2,894

 

 

1,901

 

Net income (loss) attributable to shareholders

 

$

(548,966

)

 

$

169,915

 

 

$

(408,231

)

 

$

309,009

 

 

 

 

 

 

 

 

 

 

Net income (loss) per share:

 

 

 

 

 

 

 

 

Basic

 

$

(6.48

)

 

$

1.94

 

 

$

(4.80

)

 

$

3.52

 

Diluted

 

$

(6.48

)

 

$

1.92

 

 

$

(4.80

)

 

$

3.48

 

 

 

 

 

 

 

 

 

 

Weighted-average shares outstanding:

 

 

 

 

 

 

 

 

Basic

 

84,652

 

 

87,802

 

 

85,022

 

 

87,878

 

Diluted

 

84,652

 

 

88,652

 

 

85,022

 

 

88,841

 

ARROW ELECTRONICS, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands except par value)

(Unaudited)

 

 

 

 

 

June 29, 2019

 

December 31, 2018

 

 

 

 

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

269,989

 

 

$

509,327

 

Accounts receivable, net

7,976,603

 

 

8,945,463

 

Inventories

3,596,613

 

 

3,878,678

 

Other current assets

267,151

 

 

274,832

 

Total current assets

12,110,356

 

 

13,608,300

 

Property, plant, and equipment, at cost:

 

 

 

Land

7,873

 

 

7,882

 

Buildings and improvements

156,124

 

 

158,712

 

Machinery and equipment

1,443,901

 

 

1,425,933

 

 

1,607,898

 

 

1,592,527

 

Less: Accumulated depreciation and amortization

(793,981

)

 

(767,827

)

Property, plant, and equipment, net

813,917

 

 

824,700

 

Investments in affiliated companies

86,157

 

 

83,693

 

Intangible assets, net

290,236

 

 

372,644

 

Goodwill

2,067,499

 

 

2,624,690

 

Other assets

656,204

 

 

270,418

 

Total assets

$

16,024,369

 

 

$

17,784,445

 

LIABILITIES AND EQUITY

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

6,245,068

 

 

$

7,631,879

 

Accrued expenses

853,735

 

 

912,292

 

Short-term borrowings, including current portion of long-term debt

279,158

 

 

246,257

 

Total current liabilities

7,377,961

 

 

8,790,428

 

Long-term debt

3,157,274

 

 

3,239,115

 

Other liabilities

666,419

 

 

378,536

 

Commitments and contingencies

 

 

 

Equity:

 

 

 

Shareholders’ equity:

 

 

 

Common stock, par value $1:

 

 

 

Authorized – 160,000 shares in both 2019 and 2018, respectively

 

 

 

Issued – 125,424 shares in both 2019 and 2018, respectively

125,424

 

 

125,424

 

Capital in excess of par value

1,136,649

 

 

1,135,934

 

Treasury stock (42,283 and 40,233 shares in 2019 and 2018, respectively), at cost

(2,139,743

)

 

(1,972,254

)

Retained earnings

5,927,104

 

 

6,335,335

 

Accumulated other comprehensive loss

(280,709

)

 

(299,449

)

Total shareholders’ equity

4,768,725

 

 

5,324,990

 

Noncontrolling interests

53,990

 

 

51,376

 

Total equity

4,822,715

 

 

5,376,366

 

Total liabilities and equity

$

16,024,369

 

 

$

17,784,445

 

ARROW ELECTRONICS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

 

Quarter Ended

 

June 29, 2019

 

June 30, 2018

Cash flows from operating activities:

 

 

 

Consolidated net income (loss)

$

(547,751

)

 

$

171,040

 

Adjustments to reconcile consolidated net income (loss) to net cash provided by (used for) operations:

 

 

 

Depreciation and amortization

46,982

 

 

46,422

 

Amortization of stock-based compensation

8,539

 

 

12,619

 

Equity in losses of affiliated companies

(382

)

 

(517

)

Deferred income taxes

(78,814

)

 

15,524

 

Impairments

697,993

 

 

 

(Gain) loss on investments, net

(1,390

)

 

2,563

 

Other

6,381

 

 

2,140

 

Change in assets and liabilities, net of effects of acquired and disposed businesses:

 

 

 

Accounts receivable

(54,436

)

 

(863,490

)

Inventories

143,740

 

 

(239,297

)

Accounts payable

193,832

 

 

451,093

 

Accrued expenses

(21,102

)

 

21,571

 

Other assets and liabilities

11,826

 

 

(29,440

)

Net cash provided by (used for) operating activities

405,418

 

 

(409,772

)

Cash flows from investing activities:

 

 

 

Cash consideration paid for acquired businesses, net of cash acquired

 

 

(96

)

Proceeds from disposition of businesses

9,460

 

 

 

Acquisition of property, plant, and equipment

(47,821

)

 

(31,816

)

Other

 

 

(3,500

)

Net cash used for investing activities

(38,361

)

 

(35,412

)

Cash flows from financing activities:

 

 

 

Change in short-term and other borrowings

(66,112

)

 

77,995

 

(Payments) proceeds from long-term bank borrowings, net

(216,046

)

 

157,948

 

Proceeds from exercise of stock options

2,691

 

 

993

 

Repurchases of common stock

(146,999

)

 

(20,038

)

Other

(147

)

 

(156

)

Net cash provided by (used for) financing activities

(426,613

)

 

216,742

 

Effect of exchange rate changes on cash

(22,354

)

 

10,317

 

Net decrease in cash and cash equivalents

(81,910

)

 

(218,125

)

Cash and cash equivalents at beginning of period

351,899

 

 

548,644

 

Cash and cash equivalents at end of period

269,989

 

 

330,519

 

ARROW ELECTRONICS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

 

Six Months Ended

 

June 29, 2019

 

June 30, 2018

Cash flows from operating activities:

 

 

 

Consolidated net income (loss)

$

(405,337

)

 

$

310,910

 

Adjustments to reconcile consolidated net income (loss) to net cash provided by (used for) operations:

 

 

 

Depreciation and amortization

94,508

 

 

93,669

 

Amortization of stock-based compensation

27,629

 

 

25,662

 

Equity in losses of affiliated companies

1,085

 

 

156

 

Deferred income taxes

(71,846

)

 

12,706

 

Impairments

697,993

 

 

 

(Gain) loss on investments, net

(6,738

)

 

5,015

 

Other

11,956

 

 

5,605

 

Change in assets and liabilities, net of effects of acquired and disposed businesses:

 

 

 

Accounts receivable

895,553

 

 

(73,647

)

Inventories

278,142

 

 

(499,917

)

Accounts payable

(1,346,176

)

 

(240,725

)

Accrued expenses

(71,394

)

 

(516

)

Other assets and liabilities

(28,956

)

 

(123,767

)

Net cash provided by (used for) operating activities

76,419

 

 

(484,849

)

Cash flows from investing activities:

 

 

 

Cash consideration paid for acquired businesses, net of cash acquired

 

 

(331,563

)

Proceeds from disposition of businesses

9,460

 

 

34,291

 

Acquisition of property, plant, and equipment

(81,636

)

 

(66,551

)

Other

2,940

 

 

(8,000

)

Net cash used for investing activities

(69,236

)

 

(371,823

)

Cash flows from financing activities:

 

 

 

Change in short-term and other borrowings

(173,356

)

 

59,613

 

Proceeds from long-term bank borrowings, net

118,977

 

 

759,334

 

Redemption of notes

 

 

(300,000

)

Proceeds from exercise of stock options

9,622

 

 

5,985

 

Repurchases of common stock

(200,924

)

 

(72,551

)

Other

(147

)

 

(156

)

Net cash provided by (used for) financing activities

(245,828

)

 

452,225

 

Effect of exchange rate changes on cash

(693

)

 

4,883

 

Net decrease in cash and cash equivalents

(239,338

)

 

(399,564

)

Cash and cash equivalents at beginning of period

509,327

 

 

730,083

 

Cash and cash equivalents at end of period

$

269,989

 

 

$

330,519

 

ARROW ELECTRONICS, INC.

NON-GAAP SALES RECONCILIATION

(In thousands)

(Unaudited)

 

Quarter Ended

 

 

 

June 29, 2019

 

June 30, 2018

 

% Change

 

 

 

 

 

 

Consolidated sales, as reported

$

7,344,548

 

 

$

7,392,528

 

 

(0.6

)%

Impact of changes in foreign currencies

 

 

(147,506

)

 

 

Impact of dispositions and wind down

(77,914

)

 

(113,445

)

 

 

Consolidated sales, as adjusted

$

7,266,634

 

 

$

7,131,577

 

 

1.9

%

 

 

 

 

 

 

Global components sales, as reported

$

5,270,935

 

 

$

5,284,364

 

 

(0.3

)%

Impact of changes in foreign currencies

 

 

(99,842

)

 

 

Impact of dispositions and wind down

(77,914

)

 

(100,372

)

 

 

Global components sales, as adjusted

$

5,193,021

 

 

$

5,084,150

 

 

2.1

%

 

 

 

 

 

 

Americas Components sales, as reported

$

1,876,799

 

 

$

1,937,882

 

 

(3.2

)%

Impact of changes in foreign currencies

 

 

(1,611

)

 

 

Impact of dispositions and wind down

(60,860

)

 

(73,962

)

 

 

Americas Components sales, as adjusted

$

1,815,939

 

 

$

1,862,309

 

 

(2.5

)%

 

 

 

 

 

 

Europe components sales, as reported

$

1,415,888

 

 

$

1,447,972

 

 

(2.2

)%

Impact of changes in foreign currencies

 

 

(81,728

)

 

 

Impact of dispositions and wind down

(17,054

)

 

(26,410

)

 

 

Europe components sales, as adjusted

$

1,398,834

 

 

$

1,339,834

 

 

4.4

%

 

 

 

 

 

 

Asia components sales, as reported

$

1,978,248

 

 

$

1,898,510

 

 

4.2

%

Impact of changes in foreign currencies

 

 

(16,503

)

 

 

Asia components sales, as adjusted

$

1,978,248

 

 

$

1,882,007

 

 

5.1

%

 

 

 

 

 

 

Global ECS sales, as reported

$

2,073,613

 

 

$

2,108,164

 

 

(1.6

)%

Impact of changes in foreign currencies

 

 

(47,664

)

 

 

Impact of dispositions

 

 

(13,073

)

 

 

Global ECS sales, as adjusted

$

2,073,613

 

 

$

2,047,427

 

 

1.3

%

 

 

 

 

 

 

Europe ECS sales, as reported

$

701,157

 

 

$

721,130

 

 

(2.8

)%

Impact of changes in foreign currencies

 

 

(38,339

)

 

 

Impact of dispositions

 

 

(13,073

)

 

 

Europe ECS sales, as adjusted

$

701,157

 

 

$

669,718

 

 

4.7

%

 

 

 

 

 

 

Americas ECS sales, as reported

$

1,372,456

 

 

$

1,387,034

 

 

(1.1

)%

Impact of changes in foreign currencies

 

 

(9,325

)

 

 

Americas ECS sales, as adjusted

$

1,372,456

 

 

$

1,377,709

 

 

(0.4

)%

ARROW ELECTRONICS, INC.

NON-GAAP SALES RECONCILIATION

(In thousands)

(Unaudited)

 

Six Months Ended

 

 

 

June 29, 2019

 

June 30, 2018

 

% Change

 

 

 

 

 

 

Consolidated sales, as reported

$

14,500,539

 

 

$

14,268,141

 

 

1.6

%

Impact of changes in foreign currencies

 

 

(344,336

)

 

 

Impact of dispositions and wind down

(172,109

)

 

(261,608

)

 

 

Consolidated sales, as adjusted

$

14,328,430

 

 

$

13,662,197

 

 

4.9

%

 

 

 

 

 

 

Global components sales, as reported

$

10,462,862

 

 

$

10,214,296

 

 

2.4

%

Impact of changes in foreign currencies

 

 

(229,563

)

 

 

Impact of dispositions and wind down

(160,968

)

 

(207,784

)

 

 

Global components sales, as adjusted

$

10,301,894

 

 

$

9,776,949

 

 

5.4

%

 

 

 

 

 

 

Americas Components sales, as reported

$

3,783,828

 

 

$

3,734,580

 

 

1.3

%

Impact of changes in foreign currencies

 

 

(4,138

)

 

 

Impact of dispositions and wind down

(123,726

)

 

(152,354

)

 

 

Americas Components sales, as adjusted

$

3,660,102

 

 

$

3,578,088

 

 

2.3

%

 

 

 

 

 

 

Europe components sales, as reported

$

2,919,254

 

 

$

2,926,358

 

 

(0.2

)%

Impact of changes in foreign currencies

 

 

(196,117

)

 

 

Impact of dispositions and wind down

(37,242

)

 

(55,430

)

 

 

Europe components sales, as adjusted

$

2,882,012

 

 

$

2,674,811

 

 

7.7

%

 

 

 

 

 

 

Asia components sales, as reported

$

3,759,780

 

 

$

3,553,358

 

 

5.8

%

Impact of changes in foreign currencies

 

 

(29,308

)

 

 

Asia components sales, as adjusted

$

3,759,780

 

 

$

3,524,050

 

 

6.7

%

 

 

 

 

 

 

Global ECS sales, as reported

$

4,037,677

 

 

$

4,053,845

 

 

(0.4

)%

Impact of changes in foreign currencies

 

 

(114,773

)

 

 

Impact of dispositions

(11,141

)

 

(53,824

)

 

 

Global ECS sales, as adjusted

$

4,026,536

 

 

$

3,885,248

 

 

3.6

%

 

 

 

 

 

 

Europe ECS sales, as reported

$

1,464,314

 

 

$

1,471,400

 

 

(0.5

)%

Impact of changes in foreign currencies

 

 

(94,054

)

 

 

Impact of dispositions

(11,141

)

 

(26,331

)

 

 

Europe ECS sales, as adjusted

$

1,453,173

 

 

$

1,351,015

 

 

7.6

%

 

 

 

 

 

 

Americas ECS sales, as reported

$

2,573,363

 

 

$

2,582,445

 

 

(0.4

)%

Impact of changes in foreign currencies

 

 

(20,719

)

 

 

Impact of dispositions

 

 

(27,493

)

 

 

Americas ECS sales, as adjusted

$

2,573,363

 

 

$

2,534,233

 

 

1.5

%

ARROW ELECTRONICS, INC.

NON-GAAP EARNINGS RECONCILIATION

(In thousands except per share data)

(Unaudited)

 

Three months ended June 29, 2019

 

Reported

GAAP

measure

Intangible

amortization

expense

Restructuring

& Integration

charges

AFS Write

Downs

Digital Write

Downs

Impairments(1)

Impact of

Wind Down(6)

Other(2)

Non-GAAP

measure

Sales

$

7,344,548

 

$

 

$

 

$

 

$

 

$

 

$

(77,914

)

$

 

$

7,266,634

 

Gross Profit

814,909

 

 

 

1,868

 

20,114

 

 

4,305

 

 

841,196

 

Operating income

(549,190

)

8,665

 

19,906

 

15,851

 

20,114

 

623,085

 

104,219

 

 

242,650

 

Income before income taxes

(600,120

)

8,665

 

19,906

 

15,851

 

20,114

 

623,085

 

104,229

 

(1,390

)

190,340

 

Provision for income taxes

(52,369

)

2,463

 

4,865

 

3,910

 

4,962

 

64,246

 

24,730

 

(382

)

52,425

 

Consolidated net income

(547,751

)

6,202

 

15,041

 

11,941

 

15,152

 

558,839

 

79,499

 

(1,008

)

137,915

 

Noncontrolling interests

1,215

 

140

 

 

 

 

 

 

 

1,355

 

Net income attributable to shareholders

$

(548,966

)

$

6,062

 

$

15,041

 

$

11,941

 

$

15,152

 

$

558,839

 

$

79,499

 

$

(1,008

)

$

136,560

 

Net income per diluted share(5)

$

(6.48

)

$

0.07

 

$

0.18

 

$

0.14

 

$

0.18

 

$

6.60

 

$

0.94

 

$

(0.01

)

$

1.60

 

Effective tax rate

8.7

%

 

 

 

 

 

 

 

27.5

%

 

Three months ended June 30, 2018

 

Reported

GAAP

measure

Intangible

amortization

expense

Restructuring

& Integration

charges

AFS Write

Downs

Digital Write

Downs

Impairments

Impact of

Wind Down(6)

Other(2)

Non-GAAP

measure

Sales

$

7,392,528

 

$

 

$

 

$

 

$

 

$

 

$

(100,372

)

$

 

$

7,292,156

 

Gross Profit

932,820

 

 

 

 

 

 

(17,079

)

 

915,741

 

Operating income

286,827

 

9,161

 

11,654

 

 

 

 

9,482

 

 

317,124

 

Income before income taxes

222,721

 

9,161

 

11,654

 

 

 

 

9,536

 

2,563

 

255,635

 

Provision for income taxes

51,681

 

2,540

 

2,893

 

 

 

 

2,545

 

631

 

60,290

 

Consolidated net income

171,040

 

6,621

 

8,761

 

 

 

 

6,991

 

1,932

 

195,345

 

Noncontrolling interests

1,125

 

149

 

 

 

 

 

 

 

1,274

 

Net income attributable to shareholders

$

169,915

 

$

6,472

 

$

8,761

 

$

 

$

 

$

 

$

6,991

 

$

1,932

 

$

194,071

 

Net income per diluted share

$

1.92

 

$

0.07

 

$

0.10

 

$

 

$

 

$

 

$

0.08

 

$

0.02

 

$

2.19

 

Effective tax rate

23.2

%

 

 

 

 

 

 

 

23.6

%

Contacts

Steven O’Brien

Vice President, Investor Relations

303-824-4544

Media Contact: John Hourigan,

Vice President, Global Communications

303-824-4586

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