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Arrow Electronics Reports Second-Quarter 2024 Results

-- Sales of $6.9 billion, exceeding guidance --

-- Second-Quarter Earnings Per Diluted Share of $2.01; Non-GAAP Earnings Per Diluted Share of $2.78 --

Arrow Electronics, Inc. (NYSE:ARW) today announced financial results for its second quarter of 2024.

“We continued to execute well in an evolving market environment, delivering second-quarter sales and non-GAAP earnings per diluted share comfortably ahead of our guided ranges,” said Sean Kerins, Arrow’s president and chief executive officer.

“In addition, our value-added offerings in global components as well as better momentum in enterprise computing solutions contributed to our overall operating margin stability in the quarter,” said Mr. Kerins.

 

 

 

 

 

 

 

 

 

 

 

 

 

Arrow Consolidated

 

 

Quarter Ended

 

Six Months Ended

 

 

June 29,

 

July 1,

 

June 29,

 

July 1,

(in millions except per share data)

 

2024

 

2023

 

2024

 

2023

Consolidated sales

 

$

6,893

 

$

8,515

 

$

13,817

 

$

17,251

Net income attributable to shareholders

 

 

109

 

 

237

 

 

192

 

 

510

Net income per diluted share

 

 

2.01

 

 

4.12

 

 

3.53

 

 

8.74

Non-GAAP net income attributable to shareholders (1)

 

 

150

 

 

251

 

 

282

 

 

524

Non-GAAP net income per diluted share

 

 

2.78

 

 

4.37

 

 

5.18

 

 

8.98

Both GAAP and non-GAAP earnings per share in the second quarter of 2024 include a $0.29 benefit and a $20 million operating income benefit related to the collection of certain aged receivables related to one customer in the ECS segment. In the second quarter of 2024, sales decreased 19 percent year over year. Changes in foreign currencies had a negative impact on growth of approximately $52.2 million on sales and $0.05 on earnings per share on a diluted basis compared to the second quarter of 2023.

Global Components

“Across many of the segments in which we compete, we’re seeing signs of incremental improvement in leading indicators, with book-to-bill ratios advancing across all regions and bookings growing sequentially. Though the automotive and broader industrial markets are still experiencing softness, we now believe we’re in the later stages of the industry’s cyclical correction,” said Mr. Kerins.

 

 

 

 

 

 

 

 

 

 

 

 

 

Global Components

 

 

Quarter Ended

 

Six Months Ended

 

 

June 29,

 

July 1,

 

June 29,

 

July 1,

(in millions)

 

2024

 

2023

 

2024

 

2023

Global components sales

 

$

5,032

 

$

6,683

 

$

10,223

 

$

13,539

Global components operating income, as reported

 

 

210

 

 

381

 

 

436

 

 

799

Global components non-GAAP operating income

 

 

218

 

 

388

 

 

461

 

 

812

In the second quarter of 2024, global components sales decreased 25 percent year over year. Americas components second-quarter sales decreased 24 percent year over year. EMEA components second-quarter sales decreased 33 percent year over year and decreased 32 percent year over year on a constant currency basis. Asia-Pacific components second-quarter sales decreased 18 percent year over year and decreased 17 percent year over year on a constant currency basis.

Global Enterprise Computing Solutions

“Our enterprise computing solutions business delivered year-over-year billings growth as we continued to capitalize on the market’s transition to IT as a service. We benefited from another solid quarter in EMEA along with improving activity levels in North America,” said Mr. Kerins.

 

 

 

 

 

 

 

 

 

 

 

 

 

Global Enterprise Computing Solutions (ECS)

 

 

Quarter Ended

 

Six Months Ended

 

 

June 29,

 

July 1,

 

June 29,

 

July 1,

(in millions)

 

2024

 

2023

 

2024

 

2023

Global ECS sales

 

$

1,861

 

$

1,832

 

$

3,594

 

$

3,712

Global ECS operating income, as reported

 

 

103

 

 

86

 

 

174

 

 

167

Global ECS non-GAAP operating income

 

 

104

 

 

87

 

 

176

 

 

170

In the second quarter of 2024, global ECS sales increased 2 percent year over year. EMEA ECS second-quarter sales increased 8 percent year over year and increased 9 percent year over year on a constant currency basis. Americas ECS second-quarter sales decreased 4 percent year over year and decreased 3 percent year over year on a constant currency basis.

Other Financial Metrics

“In the second quarter, we managed our working capital in line with market conditions, reducing inventory levels by approximately $140 million, or $1.2 billion over the last nine months,” said Raj Agrawal, Arrow’s senior vice president and chief financial officer. “We also generated $320 million in cash flow from operations, providing us capital allocation flexibility, and enabling $50 million in share repurchases during the quarter.”

1 A reconciliation of non-GAAP financial measures to GAAP financial measures is presented in the reconciliation tables included herein.

Third-Quarter 2024 Outlook

  • Consolidated sales of $6.37 billion to $6.97 billion, with global components sales of $4.70 billion to $5.10 billion, and global enterprise computing solutions sales of $1.67 billion to $1.87 billion
  • Net income per share on a diluted basis of $1.70 to $1.90, and non-GAAP net income per share on a diluted basis of $2.10 to $2.30
  • Average tax rate in the range of 23 to 25 percent
  • Interest expense of approximately $70 million
  • Changes in foreign currencies to increase sales by approximately $7 million, and to have no impact on earnings per share on a diluted basis compared to the third quarter of 2023
  • Changes in foreign currencies to increase quarter-over-quarter growth in sales by $30 million and earnings per share on a diluted basis by $0.02 compared to the second quarter of 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Third-Quarter 2024 GAAP to non-GAAP Outlook Reconciliation

NON-GAAP SALES RECONCILIATION

 

 

Quarter Ended

 

 

 

Quarter Ended

 

 

 

 

September 28,

 

September 30,

 

 

 

September 28,

 

June 29,

 

 

(in billions)

 

2024

 

2023

 

% Change

 

2024

 

2024

 

% Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Global components sales, GAAP

 

$

4.70 - 5.10

 

$

6.25

 

(25%) - (18%)

 

$

4.70 - 5.10

 

$

5.03

 

(7%) - 1%

Impact of changes in foreign currencies

 

 

 

 

 

 

 

 

 

 

0.02

 

 

Global components sales, constant currency

 

$

4.70 - 5.10

 

$

6.25

 

(25%) - (18%)

 

$

4.70 - 5.10

 

$

5.05

 

(7%) - 1%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Global ECS sales, GAAP

 

$

1.67 - 1.87

 

$

1.76

 

(5%) - 6%

 

$

1.67 - 1.87

 

$

1.86

 

(10%) - 0%

Impact of changes in foreign currencies

 

 

 

 

0.01

 

 

 

 

 

 

0.01

 

 

Global ECS sales, constant currency

 

$

1.67 - 1.87

 

$

1.77

 

(6%) - 6%

 

$

1.67 - 1.87

 

$

1.87

 

(11%) - 0%

 

 

 

 

 

 

 

 

 

 

 

 

 

NON-GAAP EARNINGS RECONCILIATION

 

 

 

 

 

Intangible amortization

 

Restructuring &

 

 

 

 

 

Reported GAAP measure

 

expense

 

integration charges

 

Non-GAAP measure

Net income per diluted share

 

 

$1.70 to $1.90

 

 

$0.10

 

 

$0.30

 

 

$2.10 to $2.30

Earnings Presentation

Please refer to the earnings presentation, which can be found at investor.arrow.com, as a supplement to the company’s earnings release. The company uses its website as a tool to disclose important information about the company and to comply with its disclosure obligations under Regulation Fair Disclosure.

Webcast and Conference Call Information

Arrow Electronics will host a conference call to discuss second-quarter 2024 financial results on August 1, 2024, at 1:00 PM ET.

A live webcast of the conference call will be available via the events section of investor.arrow.com or by accessing the webcast link directly at https://events.q4inc.com/attendee/244342075. Shortly after the conclusion of the conference call, a webcast replay will be available on the Arrow website for one year.

About Arrow Electronics

Arrow Electronics guides innovation forward for thousands of leading technology manufacturers and service providers. With 2023 sales of $33 billion, Arrow develops technology solutions that help improve business and daily life. Learn more at arrow.com.

Information Relating to Forward-Looking Statements

This press release includes “forward-looking” statements, as the term is defined under the federal securities laws, including but not limited to statements regarding: Arrow’s future financial performance, including its outlook on financial results for the third quarter of fiscal 2024 such as sales, net income per diluted share, non-GAAP net income per diluted share, average tax rate, interest and other expense, impact to sales due to changes in foreign currencies, intangible amortization expense per diluted share, restructuring & integration charges per diluted share, and expectations regarding market demand and conditions and shareholder returns. These and other forward-looking statements 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: unfavorable economic conditions; disruptions or inefficiencies in the supply chain; political instability and changes; impacts of military conflict and sanctions; industry conditions; changes in product supply, pricing and customer demand; competition; other vagaries in the global components and the global ECS markets; deteriorating economic conditions, including economic recession, inflation, tax rates, foreign currency exchange rates, or the availability of capital; the effects of natural or man-made catastrophic events; changes in relationships with key suppliers; increased profit margin pressure; changes in legal and regulatory matters; non-compliance with certain regulations, such as export, antitrust, and anti-corruption laws; foreign tax and other loss contingencies; breaches of security or privacy of business information and information system failures, including related to current or future implementations, integrations and upgrades; outbreaks, epidemics, pandemics, or public health crises; and the company's ability to generate positive cash flow. For a further discussion of these and other factors that could cause the company's future results to differ materially from any forward-looking statements, see the section entitled “Risk Factors” in the company's most recent Quarterly Report on Form 10-Q and the company's most recent Annual Report on Form 10-K, as well as in other filings the company makes with the Securities and Exchange Commission. 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.

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. The company provides the following non-GAAP metrics: sales, operating income (including by business segment), income before income taxes, net income attributable to shareholders, effective tax rate and net income per share on a diluted basis. The foregoing non-GAAP measures are adjusted by certain of the following, as applicable: impact of changes in foreign currencies (referred to as “changes in foreign currencies” or “on a constant currency basis”) by re-translating prior-period results at current period foreign exchange rates; identifiable intangible asset amortization, restructuring, integration, and other charges; net gains and losses on investments; impact of wind down to inventory; loss on extinguishment of debt; and impact of tax legislation changes. Management believes that providing this additional information is useful to the reader to better assess and understand the company’s operating performance and future prospects in the same manner as management, especially when comparing results with previous periods. Management typically monitors the business as adjusted for these items, in addition to GAAP results, to understand and compare operating results across accounting periods, for internal budgeting purposes, for short- and long-term operating plans, and to evaluate the company's financial performance. However, analysis of results on a non-GAAP basis should be used as a complement to, in conjunction with, and not as a substitute for, data presented in accordance with GAAP. For further discussion of our non-GAAP measures and related adjustments, refer to the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operationsin the company's most recent Quarterly Report on Form 10-Q and the company's most recent Annual Report on Form 10-K.

ARROW ELECTRONICS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands except per share data)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended

 

Six Months Ended

 

 

June 29, 2024

 

July 1, 2023

 

June 29, 2024

 

July 1, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

$

6,892,868

 

 

$

8,514,516

 

 

$

13,817,128

 

 

$

17,250,944

 

Cost of sales

 

 

6,046,424

 

 

 

7,448,467

 

 

 

12,112,858

 

 

 

15,071,073

 

Gross profit

 

 

846,444

 

 

 

1,066,049

 

 

 

1,704,270

 

 

 

2,179,871

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general, and administrative

 

 

552,595

 

 

 

617,202

 

 

 

1,135,921

 

 

 

1,259,633

 

Depreciation and amortization

 

 

41,037

 

 

 

46,264

 

 

 

82,764

 

 

 

92,943

 

Restructuring, integration, and other

 

 

40,537

 

 

 

10,333

 

 

 

87,393

 

 

 

12,893

 

 

 

 

634,169

 

 

 

673,799

 

 

 

1,306,078

 

 

 

1,365,469

 

Operating income

 

 

212,275

 

 

 

392,250

 

 

 

398,192

 

 

 

814,402

 

Equity in earnings of affiliated companies

 

 

1,254

 

 

 

3,061

 

 

 

910

 

 

 

2,981

 

(Loss) gain on investments, net

 

 

(4,615

)

 

 

497

 

 

 

(4,517

)

 

 

10,808

 

Loss on extinguishment of debt

 

 

(1,657

)

 

 

 

 

 

(1,657

)

 

 

 

Employee benefit plan expense, net

 

 

(980

)

 

 

(803

)

 

 

(1,913

)

 

 

(1,656

)

Interest and other financing expense, net

 

 

(66,891

)

 

 

(84,834

)

 

 

(146,495

)

 

 

(164,492

)

Income before income taxes

 

 

139,386

 

 

 

310,171

 

 

 

244,520

 

 

 

662,043

 

Provision for income taxes

 

 

29,762

 

 

 

72,380

 

 

 

51,798

 

 

 

148,927

 

Consolidated net income

 

 

109,624

 

 

 

237,791

 

 

 

192,722

 

 

 

513,116

 

Noncontrolling interests

 

 

926

 

 

 

1,232

 

 

 

423

 

 

 

2,807

 

Net income attributable to shareholders

 

$

108,698

 

 

$

236,559

 

 

$

192,299

 

 

$

510,309

 

Net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

2.03

 

 

$

4.17

 

 

$

3.56

 

 

$

8.84

 

Diluted

 

$

2.01

 

 

$

4.12

 

 

$

3.53

 

 

$

8.74

 

Weighted-average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

53,640

 

 

 

56,720

 

 

 

53,944

 

 

 

57,726

 

Diluted

 

 

54,181

 

 

 

57,355

 

 

 

54,496

 

 

 

58,409

 

ARROW ELECTRONICS, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands except par value)

(Unaudited)

 

 

 

 

 

 

 

 

 

June 29, 2024

 

December 31, 2023

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

213,009

 

 

$

218,053

 

Accounts receivable, net

 

 

10,886,501

 

 

 

12,238,073

 

Inventories

 

 

4,654,793

 

 

 

5,187,225

 

Other current assets

 

 

1,010,942

 

 

 

684,126

 

Total current assets

 

 

16,765,245

 

 

 

18,327,477

 

Property, plant, and equipment, at cost:

 

 

 

 

 

 

Land

 

 

5,691

 

 

 

5,691

 

Buildings and improvements

 

 

190,109

 

 

 

195,579

 

Machinery and equipment

 

 

1,623,869

 

 

 

1,632,606

 

 

 

 

1,819,669

 

 

 

1,833,876

 

Less: Accumulated depreciation and amortization

 

 

(1,319,945

)

 

 

(1,303,136

)

Property, plant, and equipment, net

 

 

499,724

 

 

 

530,740

 

Investments in affiliated companies

 

 

60,400

 

 

 

62,741

 

Intangible assets, net

 

 

112,470

 

 

 

127,440

 

Goodwill

 

 

2,052,701

 

 

 

2,050,426

 

Other assets

 

 

617,226

 

 

 

627,344

 

Total assets

 

$

20,107,766

 

 

$

21,726,168

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

8,770,862

 

 

$

10,070,015

 

Accrued expenses

 

 

1,687,273

 

 

 

1,463,915

 

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

 

 

860,538

 

 

 

1,653,954

 

Total current liabilities

 

 

11,318,673

 

 

 

13,187,884

 

Long-term debt

 

 

2,479,313

 

 

 

2,153,553

 

Other liabilities

 

 

495,730

 

 

 

507,424

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

Shareholders’ equity:

 

 

 

 

 

 

Common stock, par value $1:

 

 

 

 

 

 

Authorized - 160,000 shares in both 2024 and 2023

 

 

 

 

 

 

Issued - 58,046 and 57,691 shares in 2024 and 2023

 

 

58,046

 

 

 

57,691

 

Capital in excess of par value

 

 

574,530

 

 

 

553,340

 

Treasury stock (5,101 and 3,880 shares in 2024 and 2023, respectively), at cost

 

 

(456,123

)

 

 

(297,745

)

Retained earnings

 

 

5,982,516

 

 

 

5,790,217

 

Accumulated other comprehensive loss

 

 

(415,666

)

 

 

(298,039

)

Total shareholders’ equity

 

 

5,743,303

 

 

 

5,805,464

 

Noncontrolling interests

 

 

70,747

 

 

 

71,843

 

Total equity

 

 

5,814,050

 

 

 

5,877,307

 

Total liabilities and equity

 

$

20,107,766

 

 

$

21,726,168

 

ARROW ELECTRONICS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

Quarter Ended

 

 

June 29, 2024

 

July 1, 2023

Cash flows from operating activities:

 

 

 

 

 

 

Consolidated net income

 

$

109,624

 

 

$

237,791

 

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

 

 

 

 

 

 

Depreciation and amortization

 

 

41,037

 

 

 

46,264

 

Amortization of stock-based compensation

 

 

8,253

 

 

 

8,852

 

Equity in earnings of affiliated companies

 

 

(1,254

)

 

 

(3,061

)

Deferred income taxes

 

 

(4,597

)

 

 

(25,869

)

Loss on extinguishment of debt

 

 

1,657

 

 

 

 

Loss (gain) on investments, net

 

 

4,750

 

 

 

(497

)

Other

 

 

3,675

 

 

 

1,665

 

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

 

 

 

 

 

 

Accounts receivable, net

 

 

155,886

 

 

 

(377,117

)

Inventories

 

 

130,661

 

 

 

58,148

 

Accounts payable

 

 

(160,026

)

 

 

(8,558

)

Accrued expenses

 

 

251,990

 

 

 

(83,267

)

Other assets and liabilities

 

 

(221,475

)

 

 

18,845

 

Net cash provided by (used for) operating activities

 

 

320,181

 

 

 

(126,804

)

Cash flows from investing activities:

 

 

 

 

 

 

Acquisition of property, plant, and equipment

 

 

(22,101

)

 

 

(16,991

)

Other

 

 

1,313

 

 

 

95

 

Net cash used for investing activities

 

 

(20,788

)

 

 

(16,896

)

Cash flows from financing activities:

 

 

 

 

 

 

Change in short-term and other borrowings

 

 

(434,845

)

 

 

344,389

 

Proceeds from (repayments of) long-term bank borrowings, net

 

 

196,575

 

 

 

(43,786

)

Net proceeds from note offering

 

 

494,678

 

 

 

(2,332

)

Redemption of notes

 

 

(500,000

)

 

 

 

Proceeds from exercise of stock options

 

 

1,839

 

 

 

10,447

 

Repurchases of common stock

 

 

(75,353

)

 

 

(212,416

)

Settlement of forward-starting interest rate swap

 

 

 

 

 

56,711

 

Other

 

 

(141

)

 

 

(142

)

Net cash (used for) provided by financing activities

 

 

(317,247

)

 

 

152,871

 

Effect of exchange rate changes on cash

 

 

(11,947

)

 

 

25,657

 

Net (decrease) increase in cash and cash equivalents

 

 

(29,801

)

 

 

34,828

 

Cash and cash equivalents at beginning of period

 

 

242,810

 

 

 

205,554

 

Cash and cash equivalents at end of period

 

$

213,009

 

 

$

240,382

 

ARROW ELECTRONICS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

Six Months Ended

 

 

June 29, 2024

 

July 1, 2023

Cash flows from operating activities:

 

 

 

 

 

 

Consolidated net income

 

$

192,722

 

 

$

513,116

 

Adjustments to reconcile consolidated net income to net cash provided by operations:

 

 

 

 

 

 

Depreciation and amortization

 

 

82,764

 

 

 

92,943

 

Amortization of stock-based compensation

 

 

21,700

 

 

 

28,349

 

Equity in earnings of affiliated companies

 

 

(910

)

 

 

(2,981

)

Deferred income taxes

 

 

(7,398

)

 

 

(33,399

)

Loss on extinguishment of debt

 

 

1,657

 

 

 

 

Loss (gain) on investments, net

 

 

4,763

 

 

 

(10,808

)

Other

 

 

4,864

 

 

 

2,986

 

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

 

 

 

 

 

 

Accounts receivable, net

 

 

1,213,562

 

 

 

1,324,772

 

Inventories

 

 

493,474

 

 

 

(141,373

)

Accounts payable

 

 

(1,237,812

)

 

 

(1,513,259

)

Accrued expenses

 

 

273,043

 

 

 

(215,583

)

Other assets and liabilities

 

 

(319,038

)

 

 

52,237

 

Net cash provided by operating activities

 

 

723,391

 

 

 

97,000

 

Cash flows from investing activities:

 

 

 

 

 

 

Acquisition of property, plant, and equipment

 

 

(51,636

)

 

 

(37,105

)

Other

 

 

6,452

 

 

 

10,962

 

Net cash used for investing activities

 

 

(45,184

)

 

 

(26,143

)

Cash flows from financing activities:

 

 

 

 

 

 

Change in short-term and other borrowings

 

 

(1,144,520

)

 

 

198,339

 

Proceeds from (repayments of) long-term bank borrowings, net

 

 

673,607

 

 

 

(9,426

)

Net proceeds from note offering

 

 

494,678

 

 

 

496,268

 

Redemption of notes

 

 

(500,000

)

 

 

(300,000

)

Proceeds from exercise of stock options

 

 

4,768

 

 

 

16,381

 

Repurchases of common stock

 

 

(163,301

)

 

 

(516,217

)

Settlement of forward-starting interest rate swap

 

 

 

 

 

56,711

 

Other

 

 

(141

)

 

 

(142

)

Net cash used for financing activities

 

 

(634,909

)

 

 

(58,086

)

Effect of exchange rate changes on cash

 

 

(48,342

)

 

 

50,696

 

Net (decrease) increase in cash and cash equivalents

 

 

(5,044

)

 

 

63,467

 

Cash and cash equivalents at beginning of period

 

 

218,053

 

 

 

176,915

 

Cash and cash equivalents at end of period

 

$

213,009

 

 

$

240,382

 

ARROW ELECTRONICS, INC.

NON-GAAP SALES RECONCILIATION

(In thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended

 

 

 

 

 

June 29, 2024

 

July 1, 2023

 

% Change

 

 

 

 

 

 

 

 

 

 

 

Consolidated sales, as reported

 

$

6,892,868

 

$

8,514,516

 

 

(19.0

)

%

Impact of changes in foreign currencies

 

 

 

 

(52,232

)

 

 

 

Consolidated sales, constant currency

 

$

6,892,868

 

$

8,462,284

 

 

(18.5

)

%

 

 

 

 

 

 

 

 

 

 

Global components sales, as reported

 

$

5,032,031

 

$

6,682,882

 

 

(24.7

)

%

Impact of changes in foreign currencies

 

 

 

 

(44,642

)

 

 

 

Global components sales, constant currency

 

$

5,032,031

 

$

6,638,240

 

 

(24.2

)

%

 

 

 

 

 

 

 

 

 

 

Americas components sales, as reported

 

$

1,572,840

 

$

2,066,562

 

 

(23.9

)

%

Impact of changes in foreign currencies

 

 

 

 

(1,513

)

 

 

 

Americas components sales, constant currency

 

$

1,572,840

 

$

2,065,049

 

 

(23.8

)

%

 

 

 

 

 

 

 

 

 

 

Asia components sales, as reported

 

$

2,019,697

 

$

2,462,841

 

 

(18.0

)

%

Impact of changes in foreign currencies

 

 

 

 

(17,330

)

 

 

 

Asia components sales, constant currency

 

$

2,019,697

 

$

2,445,511

 

 

(17.4

)

%

 

 

 

 

 

 

 

 

 

 

EMEA components sales, as reported

 

$

1,439,494

 

$

2,153,479

 

 

(33.2

)

%

Impact of changes in foreign currencies

 

 

 

 

(25,799

)

 

 

 

EMEA components sales, constant currency

 

$

1,439,494

 

$

2,127,680

 

 

(32.3

)

%

 

 

 

 

 

 

 

 

 

 

Global ECS sales, as reported

 

$

1,860,837

 

$

1,831,634

 

 

1.6

 

%

Impact of changes in foreign currencies

 

 

 

 

(7,590

)

 

 

 

Global ECS sales, constant currency

 

$

1,860,837

 

$

1,824,044

 

 

2.0

 

%

 

 

 

 

 

 

 

 

 

 

Americas ECS sales, as reported

 

$

964,070

 

$

1,000,506

 

 

(3.6

)

%

Impact of changes in foreign currencies

 

 

 

 

(1,709

)

 

 

 

Americas ECS sales, constant currency

 

$

964,070

 

$

998,797

 

 

(3.5

)

%

 

 

 

 

 

 

 

 

 

 

EMEA ECS sales, as reported

 

$

896,767

 

$

831,128

 

 

7.9

 

%

Impact of changes in foreign currencies

 

 

 

 

(5,881

)

 

 

 

EMEA ECS sales, constant currency

 

$

896,767

 

$

825,247

 

 

8.7

 

%

ARROW ELECTRONICS, INC.

NON-GAAP SALES RECONCILIATION

(In thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended

 

 

 

 

 

June 29, 2024

 

July 1, 2023

 

% Change

 

 

 

 

 

 

 

 

 

 

 

Consolidated sales, as reported

 

$

13,817,128

 

$

17,250,944

 

 

(19.9

)

%

Impact of changes in foreign currencies

 

 

 

 

(42,862

)

 

 

 

Consolidated sales, constant currency

 

$

13,817,128

 

$

17,208,082

 

 

(19.7

)

%

 

 

 

 

 

 

 

 

 

 

Global components sales, as reported

 

$

10,223,448

 

$

13,538,675

 

 

(24.5

)

%

Impact of changes in foreign currencies

 

 

 

 

(48,805

)

 

 

 

Global components sales, constant currency

 

$

10,223,448

 

$

13,489,870

 

 

(24.2

)

%

 

 

 

 

 

 

 

 

 

 

Americas components sales, as reported

 

$

3,169,532

 

$

4,300,015

 

 

(26.3

)

%

Impact of changes in foreign currencies

 

 

 

 

(2,185

)

 

 

 

Americas components sales, constant currency

 

$

3,169,532

 

$

4,297,830

 

 

(26.3

)

%

 

 

 

 

 

 

 

 

 

 

Asia components sales, as reported

 

$

3,957,915

 

$

4,839,036

 

 

(18.2

)

%

Impact of changes in foreign currencies

 

 

 

 

(41,966

)

 

 

 

Asia components sales, constant currency

 

$

3,957,915

 

$

4,797,070

 

 

(17.5

)

%

 

 

 

 

 

 

 

 

 

 

EMEA components sales, as reported

 

$

3,096,001

 

$

4,399,624

 

 

(29.6

)

%

Impact of changes in foreign currencies

 

 

 

 

(4,654

)

 

 

 

EMEA components sales, constant currency

 

$

3,096,001

 

$

4,394,970

 

 

(29.6

)

%

 

 

 

 

 

 

 

 

 

 

Global ECS sales, as reported

 

$

3,593,680

 

$

3,712,269

 

 

(3.2

)

%

Impact of changes in foreign currencies

 

 

 

 

5,943

 

 

 

 

Global ECS sales, constant currency

 

$

3,593,680

 

$

3,718,212

 

 

(3.3

)

%

 

 

 

 

 

 

 

 

 

 

Americas ECS sales, as reported

 

$

1,871,818

 

$

1,998,620

 

 

(6.3

)

%

Impact of changes in foreign currencies

 

 

 

 

(2,539

)

 

 

 

Americas ECS sales, constant currency

 

$

1,871,818

 

$

1,996,081

 

 

(6.2

)

%

 

 

 

 

 

 

 

 

 

 

EMEA ECS sales, as reported

 

$

1,721,862

 

$

1,713,649

 

 

0.5

 

%

Impact of changes in foreign currencies

 

 

 

 

8,482

 

 

 

 

EMEA ECS sales, constant currency

 

$

1,721,862

 

$

1,722,131

 

 

(0.0

)

%

ARROW ELECTRONICS, INC.

NON-GAAP EARNINGS RECONCILIATION

(In thousands except per share data)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended June 29, 2024

 

 

 

Reported

 

Intangible

 

Restructuring,

 

Impact of

 

 

Non

 

 

 

 

 

 

 

 

GAAP

 

amortization

 

Integration

 

Wind

 

 

recurring

 

 

 

Non-GAAP

 

 

 

measure

 

expense

 

and other

 

Down(1)

 

 

tax items

 

Other(2)

 

measure

 

Operating income

 

$

212,275

 

$

7,456

 

$

40,537

 

$

1,627

 

$

$

 

 

261,895

 

Income before income taxes

 

 

139,386

 

 

7,456

 

 

40,537

 

 

1,627

 

 

 

6,272

 

 

195,278

 

Net income attributable to shareholders

 

$

108,698

 

$

5,457

 

$

30,323

 

$

1,238

 

$

$

4,766

 

$

150,482

 

Net income per diluted share (4)

 

$

2.01

 

$

0.10

 

$

0.56

 

$

0.02

 

$

$

0.09

 

$

2.78

 

Effective tax rate (5)

 

 

21.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

22.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended July 1, 2023

 

 

 

Reported

 

Intangible

 

Restructuring,

 

Impact of

 

 

Non

 

 

 

 

 

 

 

 

GAAP

 

amortization

 

Integration

 

Wind

 

 

recurring

 

 

 

Non-GAAP

 

 

 

measure

 

expense

 

and other

 

Down(1)

 

 

tax items

 

Other(3)

 

measure

 

Operating income

 

$

392,250

 

$

7,908

 

$

10,333

 

$

 

$

$

 

 

$

410,491

 

Income before income taxes

 

 

310,171

 

 

7,908

 

 

10,333

 

 

 

 

 

(497

)

 

 

327,915

 

Net income attributable to shareholders

 

$

236,559

 

$

5,780

 

$

7,736

 

$

 

$

942

$

(378

)

 

$

250,639

 

Net income per diluted share (4)

 

$

4.12

 

$

0.10

 

$

0.13

 

$

 

$

0.02

$

(0.01

)

 

$

4.37

 

Effective tax rate (5)

 

 

23.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

23.1

%

ARROW ELECTRONICS, INC.

NON-GAAP EARNINGS RECONCILIATION

(In thousands except per share data)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six months ended June 29, 2024

 

 

 

Reported

 

Intangible

 

Restructuring,

 

Impact of

 

 

Non

 

 

 

 

 

 

 

 

GAAP

 

amortization

 

Integration

 

Wind

 

 

recurring

 

 

 

Non-GAAP

 

 

 

measure

 

expense

 

and other

 

Down(1)

 

 

tax items

 

Other(2)

 

measure

 

Operating income

 

$

398,192

 

$

15,002

 

$

87,393

 

$

12,086

 

$

$

 

$

512,673

 

Income before income taxes

 

 

244,520

 

 

15,002

 

 

87,393

 

 

12,086

 

 

 

6,174

 

 

365,175

 

Net income attributable to shareholders

 

$

192,299

 

$

10,989

 

$

65,165

 

$

9,195

 

$

$

4,692

 

$

282,340

 

Net income per diluted share (4)

 

$

3.53

 

$

0.20

 

$

1.20

 

$

0.17

 

$

$

0.09

 

$

5.18

 

Effective tax rate (5)

 

 

21.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

22.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six months ended July 1, 2023

 

 

 

Reported

 

Intangible

 

Restructuring,

 

Impact of

 

 

Non

 

 

 

 

 

 

 

GAAP

 

amortization

 

Integration

 

Wind

 

 

recurring

 

 

 

Non-GAAP

 

 

 

measure

 

expense

 

and other

 

Down(1)

 

 

tax items

 

Other(3)

 

measure

 

Operating income

 

$

814,402

 

$

15,888

 

$

12,893

 

$

 

$

$

 

 

$

843,183

 

Income before income taxes

 

 

662,043

 

 

15,888

 

 

12,893

 

 

 

 

 

(10,808

)

 

 

680,016

 

Net income attributable to shareholders

 

$

510,309

 

$

11,616

 

$

9,576

 

$

 

$

942

$

(8,218

)

 

$

524,225

 

Net income per diluted share (4)

 

$

8.74

 

$

0.20

 

$

0.16

 

$

 

$

0.02

$

(0.14

)

 

$

8.98

 

Effective tax rate (5)

 

 

22.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

22.5

%

(1)

Includes write downs of inventory related to the wind down of a business.

(2)

Other includes loss (gain) on investments, net and loss on extinguishment of debt.

(3)

Other includes loss (gain) on investments, net.

(4)

The sum of the components for non-GAAP diluted EPS, as adjusted may not agree to totals, as presented, due to rounding.

(5)

The items as shown in this table, represent the reconciling items for the tax rate as reported and as a non-GAAP measure.

ARROW ELECTRONICS, INC.

SEGMENT INFORMATION

(In thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended

 

Six Months Ended

 

 

June 29, 2024

 

July 1, 2023

 

June 29, 2024

 

July 1, 2023

Sales:

 

 

 

 

 

 

 

 

 

 

 

 

Global components

 

$

5,032,031

 

 

$

6,682,882

 

 

$

10,223,448

 

 

$

13,538,675

 

Global ECS

 

 

1,860,837

 

 

 

1,831,634

 

 

 

3,593,680

 

 

 

3,712,269

 

Consolidated

 

$

6,892,868

 

 

$

8,514,516

 

 

$

13,817,128

 

 

$

17,250,944

 

Operating income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

Global components (a)

 

$

210,201

 

 

$

381,314

 

 

$

435,763

 

 

$

798,853

 

Global ECS (b)

 

 

102,581

 

 

 

86,228

 

 

 

174,040

 

 

 

167,327

 

Corporate (c)

 

 

(100,507

)

 

 

(75,292

)

 

 

(211,611

)

 

 

(151,778

)

Consolidated

 

$

212,275

 

 

$

392,250

 

 

$

398,192

 

 

$

814,402

 

(a)

Global components operating income includes charges of $1.6 million and $12.1 million in inventory write downs related to the wind down of a business for the second quarter and first six months of 2024, respectively.

(b)

Global ECS operating income includes a $20.0 million benefit related to the reversal of an allowance for credit losses due to the collection of certain aged receivables for the second quarter and first six months of 2024.

(c)

Corporate operating (loss) includes restructuring, integration, and other charges of $40.5 million and $87.4 million for the second quarter and first six months of 2024, respectively, and $10.3 million and $12.9 million for the second quarter and first six months of 2023, respectively.

NON-GAAP SEGMENT RECONCILIATION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended

 

Six Months Ended

 

 

June 29, 2024

 

July 1, 2023

 

June 29, 2024

 

July 1, 2023

Global components operating income, as reported

 

$

210,201

 

$

381,314

 

$

435,763

 

$

798,853

Intangible assets amortization expense

 

 

6,399

 

 

6,679

 

 

12,887

 

 

13,424

Impact of wind down to inventory

 

 

1,627

 

 

 

 

12,086

 

 

Global components non-GAAP operating income

 

$

218,227

 

$

387,993

 

$

460,736

 

$

812,277

 

 

 

 

 

 

 

 

 

 

 

 

 

Global ECS operating income, as reported

 

$

102,581

 

$

86,228

 

$

174,040

 

$

167,327

Intangible assets amortization expense

 

 

1,057

 

 

1,229

 

 

2,115

 

 

2,464

Global ECS non-GAAP operating income

 

$

103,638

 

$

87,457

 

$

176,155

 

$

169,791

 

Contacts

Investors:

Brad Windbigler,

Treasurer and Vice President, Investor Relations

720-654-9893

Media:

John Hourigan,

Vice President, Public Affairs and Corporate Marketing

303-824-4586

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