Arrow Electronics Reports Fourth-Quarter and Year-End 2016 Results
-- Record Full-Year Sales and Earnings Per Share --
-- Fourth-Quarter Earnings Per Share of $1.81; Non-GAAP Earnings Per Share of $2.00 --
Arrow Electronics, Inc. (NYSE:ARW) today reported fourth-quarter 2016 net income of $165 million, or $1.81 per share on a
diluted basis, compared with net income of $158 million, or $1.69 per share on a diluted basis, in the fourth quarter of 2015.
Excluding certain items1, net income would have been $182 million, or $2.00 per share on a diluted basis, in the fourth
quarter of 2016, compared with net income of $182 million, or $1.94 per share on a diluted basis, in the fourth quarter of 2015.
Fourth-quarter sales of $6.44 billion decreased 5 percent from sales of $6.75 billion in the prior year. In the fourth quarter of
2016, changes in foreign currencies had negative impacts on growth of approximately $91 million or 1 percent on sales and $.04 or 2
percent on earnings per share on a diluted basis compared to the fourth quarter of 2015.
“Our digital transformation and IoT solutions spanning from sensor to sunset helped drive record full-year sales and earnings
per share,” said Michael J. Long, chairman, president, and chief executive officer. “Our customers value our comprehensive
portfolio of electronic components and embedded computing, datacenter, cloud, and reverse logistics solutions.”
Global components fourth-quarter sales of $4 billion grew 9 percent year over year. Fourth-quarter sales, as adjusted, grew 10
percent year over year. Americas components sales grew 4 percent year over year. Asia-Pacific components sales grew 22 percent year
over year. Europe components sales declined 1 percent year over year. Sales in the region, as adjusted, grew 2 percent year over
year. “Global components sales exceeded the high end of our expectations and were propelled by our investments in customer-facing
sales and engineering resources,” said Mr. Long.
Global enterprise computing solutions fourth-quarter sales of $2.45 billion declined 21 percent year over year. Sales when
compared to the fourth quarter of 2015 were unfavorably impacted by approximately $250 million due to a later calendar start to the
fourth quarter of 2016, and by approximately $250 million from a decrease in hardware sales offset by an increase in software
sales, which are recognized on a net basis. “Full-year 2016 global enterprise computing solutions operating income grew 4 percent
year over year, and we believe this is the best measure of our business,” added Mr. Long.
FULL-YEAR RESULTS
Arrow’s net income for 2016 was $523 million, or $5.68 per share on a diluted basis, compared with net income of $498 million,
or $5.20 per share on a diluted basis, in 2015. Excluding certain items1, net income would have been $610 million, or
$6.63 per share on a diluted basis, in 2016 compared with net income of $592 million, or $6.19 per share on a diluted basis, in
2015. In 2016, sales of $23.83 billion increased 2 percent from sales of $23.28 billion in 2015. In 2016, changes in foreign
currencies had negative impacts on growth of approximately $202 million, or 1 percent on sales, and $.08, or 1 percent, on earnings
per share on a diluted basis compared to 2015.
“We delivered record results in 2016, and our business is increasingly differentiated from the competition. We have a built a
solid foundation for 2017 and into the future,” said Mr. Long.
“Cash flow from operations was $356 million in 2016 approximating our cash flow target,” said Chris Stansbury, senior vice
president and chief financial officer. “In the fourth quarter we reduced net leverage and we returned approximately $49 million to
shareholders through our stock repurchase program. In 2016 we returned approximately $200 million to shareholders through our stock
repurchase program. We had approximately $520 million of remaining authorization under our share repurchase programs at the end of
the year.”
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
“As we look to the first quarter, we believe that total sales will be between $5.375 billion and $5.775 billion, with global
components sales between $3.775 billion and $3.975 billion, and global enterprise computing solutions sales between $1.6 billion
and $1.8 billion. As a result of this outlook, we expect earnings per share on a diluted basis, to be in the range of $1.18 to
$1.30, and earnings per share on a diluted basis, excluding any charges, to be in the range of $1.37 to $1.49 per share. Our
guidance assumes an average tax rate in the range of 27 to 29 percent and average diluted shares outstanding are expected to be 91
million. We are expecting the average USD-to-Euro exchange rate for the first quarter to be approximately $1.07 to €1. We estimate
changes in foreign currencies will have negative impacts on growth of approximately $70 million, or 1 percent on sales, and $.03,
or 2 percent, on earnings per share on a diluted basis compared to the first quarter of 2016,” 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 (www.arrow.com) is a global provider of products, services and solutions to
industrial and commercial users of electronic components and enterprise computing solutions. Arrow serves as a supply channel
partner for more than 125,000 original equipment manufacturers, contract manufacturers and commercial customers through a global
network of more than 465 locations serving over 90 countries.
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, 2016.
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 on a non-GAAP basis
adjusted for the impact of changes in foreign currencies and the impact of acquisitions by adjusting the company's operating
results for businesses acquired, including the amortization expense related to acquired intangible assets, as if the acquisitions
had occurred at the beginning of the earliest period presented (referred to as "impact of acquisitions"). Operating income, net
income attributable to shareholders, and net income per basic and diluted share are adjusted for certain charges, credits, gains,
and losses that the company believes impact the comparability of its results of operations. These charges, credits, gains, and
losses arise out of the company’s efficiency enhancement initiatives, acquisitions (including intangible assets amortization
expense), loss on prepayment of debt, and (gain)/loss on investments. 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 |
|
|
Year Ended |
|
|
|
December 31, 2016 |
|
|
December 31, 2015 |
|
|
December 31, 2016 |
|
|
December 31, 2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales |
|
|
$ |
6,442,891 |
|
|
$ |
6,751,342 |
|
|
$ |
23,825,261 |
|
|
$ |
23,282,020 |
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales |
|
|
|
5,619,543 |
|
|
|
5,912,376 |
|
|
|
20,681,062 |
|
|
|
20,246,770 |
Selling, general, and administrative expenses |
|
|
|
518,329 |
|
|
|
529,089 |
|
|
|
2,052,863 |
|
|
|
1,986,249 |
Depreciation and amortization |
|
|
|
37,679 |
|
|
|
37,900 |
|
|
|
159,195 |
|
|
|
155,754 |
Restructuring, integration, and other charges |
|
|
|
12,441 |
|
|
|
17,666 |
|
|
|
73,602 |
|
|
|
68,765 |
|
|
|
|
6,187,992 |
|
|
|
6,497,031 |
|
|
|
22,966,722 |
|
|
|
22,457,538 |
Operating income |
|
|
|
254,899 |
|
|
|
254,311 |
|
|
|
858,539 |
|
|
|
824,482 |
Equity in earnings of affiliated companies |
|
|
|
2,179 |
|
|
|
2,147 |
|
|
|
7,573 |
|
|
|
7,037 |
Gain on sale of investment |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,008 |
Loss on prepayment of debt |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,943 |
Interest and other financing expense, net |
|
|
|
38,887 |
|
|
|
34,442 |
|
|
|
150,715 |
|
|
|
135,401 |
Other expense, net |
|
|
|
— |
|
|
|
1,500 |
|
|
|
— |
|
|
|
3,000 |
Income before income taxes |
|
|
|
218,191 |
|
|
|
220,516 |
|
|
|
715,397 |
|
|
|
692,183 |
Provision for income taxes |
|
|
|
53,233 |
|
|
|
61,108 |
|
|
|
190,674 |
|
|
|
191,697 |
Consolidated net income |
|
|
|
164,958 |
|
|
|
159,408 |
|
|
|
524,723 |
|
|
|
500,486 |
Noncontrolling interests |
|
|
|
440 |
|
|
|
916 |
|
|
|
1,973 |
|
|
|
2,760 |
Net income attributable to shareholders |
|
|
$ |
164,518 |
|
|
$ |
158,492 |
|
|
$ |
522,750 |
|
|
$ |
497,726 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
|
1.84 |
|
|
|
1.71 |
|
|
|
5.75 |
|
|
|
5.26 |
Diluted |
|
|
|
1.81 |
|
|
|
1.69 |
|
|
|
5.68 |
|
|
|
5.20 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
|
89,596 |
|
|
|
92,731 |
|
|
|
90,960 |
|
|
|
94,608 |
Diluted |
|
|
|
90,692 |
|
|
|
94,039 |
|
|
|
92,033 |
|
|
|
95,686 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARROW ELECTRONICS, INC. |
CONSOLIDATED BALANCE SHEETS |
(In thousands except par value) |
|
|
|
|
|
|
|
|
|
|
December 31, 2016 |
|
|
December 31, 2015 |
ASSETS |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
|
$ |
534,320 |
|
|
|
$ |
273,090 |
|
Accounts receivable, net |
|
|
|
6,746,687 |
|
|
|
|
6,161,418 |
|
Inventories, net |
|
|
|
2,855,645 |
|
|
|
|
2,466,490 |
|
Other current assets |
|
|
|
180,069 |
|
|
|
|
285,473 |
|
Total current assets |
|
|
|
10,316,721 |
|
|
|
|
9,186,471 |
|
Property, plant, and equipment, at cost: |
|
|
|
|
|
|
Land |
|
|
|
23,456 |
|
|
|
|
23,547 |
|
Buildings and improvements |
|
|
|
175,141 |
|
|
|
|
162,011 |
|
Machinery and equipment |
|
|
|
1,297,657 |
|
|
|
|
1,250,115 |
|
|
|
|
|
1,496,254 |
|
|
|
|
1,435,673 |
|
Less: Accumulated depreciation and amortization |
|
|
|
(739,955 |
) |
|
|
|
(735,495 |
) |
Property, plant, and equipment, net |
|
|
|
756,299 |
|
|
|
|
700,178 |
|
Investments in affiliated companies |
|
|
|
88,401 |
|
|
|
|
73,376 |
|
Intangible assets, net |
|
|
|
336,882 |
|
|
|
|
389,326 |
|
Goodwill |
|
|
|
2,392,220 |
|
|
|
|
2,368,832 |
|
Other assets |
|
|
|
315,843 |
|
|
|
|
303,747 |
|
Total assets |
|
|
$ |
14,206,366 |
|
|
|
$ |
13,021,930 |
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Accounts payable |
|
|
$ |
5,774,151 |
|
|
|
$ |
5,192,665 |
|
Accrued expenses |
|
|
|
821,244 |
|
|
|
|
819,463 |
|
Short-term borrowings, including current portion of long-term debt |
|
|
|
93,827 |
|
|
|
|
44,024 |
|
Total current liabilities |
|
|
|
6,689,222 |
|
|
|
|
6,056,152 |
|
Long-term debt |
|
|
|
2,696,334 |
|
|
|
|
2,380,575 |
|
Other liabilities |
|
|
|
355,190 |
|
|
|
|
390,392 |
|
Equity: |
|
|
|
|
|
|
Shareholders' equity: |
|
|
|
|
|
|
Common stock, par value $1: |
|
|
|
|
|
|
Authorized – 160,000 shares in both 2016 and 2015 |
|
|
|
|
|
|
Issued – 125,424 shares in both 2016 and 2015 |
|
|
|
125,424 |
|
|
|
|
125,424 |
|
Capital in excess of par value |
|
|
|
1,112,114 |
|
|
|
|
1,107,314 |
|
Treasury stock (36,511 and 34,501 shares in 2016 and 2015, respectively), at
cost |
|
|
|
(1,637,476 |
) |
|
|
|
(1,480,069 |
) |
Retained earnings |
|
|
|
5,197,230 |
|
|
|
|
4,674,480 |
|
Accumulated other comprehensive loss |
|
|
|
(383,854 |
) |
|
|
|
(284,706 |
) |
Total shareholders' equity |
|
|
|
4,413,438 |
|
|
|
|
4,142,443 |
|
Noncontrolling interests |
|
|
|
52,182 |
|
|
|
|
52,368 |
|
Total equity |
|
|
|
4,465,620 |
|
|
|
|
4,194,811 |
|
Total liabilities and equity |
|
|
$ |
14,206,366 |
|
|
|
$ |
13,021,930 |
|
|
|
|
|
|
|
|
|
ARROW ELECTRONICS, INC. |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
(In thousands) |
(Unaudited) |
|
|
|
|
|
|
|
Quarter Ended |
|
|
|
December 31, 2016 |
|
|
December 31, 2015 |
Cash flows from operating activities: |
|
|
|
|
|
|
Consolidated net income |
|
|
$ |
164,958 |
|
|
|
$ |
159,408 |
|
Adjustments to reconcile consolidated net income to net cash provided by
operations: |
|
|
|
|
|
|
Depreciation and amortization |
|
|
|
37,679 |
|
|
|
|
37,900 |
|
Amortization of stock-based compensation |
|
|
|
10,042 |
|
|
|
|
13,491 |
|
Equity in earnings of affiliated companies |
|
|
|
(2,179 |
) |
|
|
|
(2,147 |
) |
Deferred income taxes |
|
|
|
(2,061 |
) |
|
|
|
(21,048 |
) |
Excess tax benefits from stock-based compensation arrangements |
|
|
|
(96 |
) |
|
|
|
(48
|
) |
Other |
|
|
|
1,508 |
|
|
|
|
2,837 |
|
Change in assets and liabilities, net of effects of acquired businesses: |
|
|
|
|
|
|
Accounts receivable |
|
|
|
(972,399 |
) |
|
|
|
(1,125,272 |
) |
Inventories |
|
|
|
(286,306 |
) |
|
|
|
2,100 |
|
Accounts payable |
|
|
|
1,095,530 |
|
|
|
|
1,352,100 |
|
Accrued expenses |
|
|
|
149,935 |
|
|
|
|
128,867 |
|
Other assets and liabilities |
|
|
|
23,443 |
|
|
|
|
(4,053 |
) |
Net cash provided by operating activities |
|
|
|
220,054 |
|
|
|
|
544,135 |
|
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
Purchase price adjustment (cash consideration paid for acquired businesses) |
|
|
|
4,195 |
|
|
|
|
(1,821 |
) |
Acquisition of property, plant, and equipment |
|
|
|
(38,354 |
) |
|
|
|
(41,744 |
) |
Proceeds from sale of facilities |
|
|
|
— |
|
|
|
|
3,496 |
|
Net cash used for investing activities |
|
|
|
(34,159 |
) |
|
|
|
(40,069 |
) |
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
Change in short-term and other borrowings |
|
|
|
16,743 |
|
|
|
|
(42,576 |
) |
Repayment of long-term bank borrowings, net |
|
|
|
(7,000 |
) |
|
|
|
(366,700 |
) |
Proceeds from exercise of stock options |
|
|
|
2,281 |
|
|
|
|
178 |
|
Excess tax benefits from stock-based compensation arrangements |
|
|
|
96 |
|
|
|
|
48 |
|
Repurchases of common stock |
|
|
|
(49,268 |
) |
|
|
|
(149,833 |
) |
Other |
|
|
|
(190 |
) |
|
|
|
(1,937 |
) |
Net cash used for financing activities |
|
|
|
(37,338 |
) |
|
|
|
(560,820 |
) |
Effect of exchange rate changes on cash |
|
|
|
1,348 |
|
|
|
|
(6,900 |
) |
Net increase (decrease) in cash and cash equivalents |
|
|
|
149,905 |
|
|
|
|
(63,654 |
) |
Cash and cash equivalents at beginning of period |
|
|
|
384,415 |
|
|
|
|
336,744 |
|
Cash and cash equivalents at end of period |
|
|
$ |
534,320 |
|
|
|
$ |
273,090 |
|
|
|
|
|
|
|
|
|
ARROW ELECTRONICS, INC. |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
(In thousands) |
|
|
|
|
Year Ended |
|
|
|
December 31, 2016 |
|
|
December 31, 2015 |
Cash flows from operating activities: |
|
|
|
|
|
|
Consolidated net income |
|
|
$ |
524,723 |
|
|
|
$ |
500,486 |
|
Adjustments to reconcile consolidated net income to net cash provided by
operations: |
|
|
|
|
|
|
Depreciation and amortization |
|
|
|
159,195 |
|
|
|
|
155,754 |
|
Amortization of stock-based compensation |
|
|
|
39,825 |
|
|
|
|
47,274 |
|
Equity in earnings of affiliated companies |
|
|
|
(7,573 |
) |
|
|
|
(7,037 |
) |
Deferred income taxes |
|
|
|
28,130 |
|
|
|
|
5,833 |
|
Gain on sale of investment |
|
|
|
— |
|
|
|
|
(2,008 |
) |
Excess tax benefits from stock-based compensation arrangements |
|
|
|
(5,049 |
) |
|
|
|
(5,911 |
) |
Other |
|
|
|
5,972 |
|
|
|
|
10,894 |
|
Change in assets and liabilities, net of effects of acquired businesses: |
|
|
|
|
|
|
Accounts receivable |
|
|
|
(636,944 |
) |
|
|
|
(68,990 |
) |
Inventories |
|
|
|
(403,980 |
) |
|
|
|
(42,790 |
) |
Accounts payable |
|
|
|
582,165 |
|
|
|
|
33,398 |
|
Accrued expenses |
|
|
|
47,020 |
|
|
|
|
56,139 |
|
Other assets and liabilities |
|
|
|
22,322 |
|
|
|
|
(27,963 |
) |
Net cash provided by operating activities |
|
|
|
355,806 |
|
|
|
|
655,079 |
|
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
Cash consideration paid for acquired businesses |
|
|
|
(64,751 |
) |
|
|
|
(514,731 |
) |
Acquisition of property, plant, and equipment |
|
|
|
(164,695 |
) |
|
|
|
(154,800 |
) |
Proceeds from sale of facilities |
|
|
|
— |
|
|
|
|
3,496 |
|
Proceeds from sale of investment |
|
|
|
— |
|
|
|
|
2,008 |
|
Other |
|
|
|
(12,000 |
) |
|
|
|
— |
|
Net cash used for investing activities |
|
|
|
(241,446 |
) |
|
|
|
(664,027 |
) |
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
Change in short-term and other borrowings |
|
|
|
48,684 |
|
|
|
|
(46,645 |
) |
Proceeds from (repayment of) long-term bank borrowings, net |
|
|
|
313,000 |
|
|
|
|
(128,000 |
) |
Net proceeds from note offering |
|
|
|
— |
|
|
|
|
688,162 |
|
Redemption of notes |
|
|
|
— |
|
|
|
|
(254,313 |
) |
Proceeds from exercise of stock options |
|
|
|
18,967 |
|
|
|
|
14,900 |
|
Excess tax benefits from stock-based compensation arrangements |
|
|
|
5,049 |
|
|
|
|
5,911 |
|
Repurchases of common stock |
|
|
|
(216,446 |
) |
|
|
|
(356,434 |
) |
Other |
|
|
|
(3,190 |
) |
|
|
|
(7,768 |
) |
Net cash provided by (used for) financing activities |
|
|
|
166,064 |
|
|
|
|
(84,187 |
) |
Effect of exchange rate changes on cash |
|
|
|
(19,194 |
) |
|
|
|
(34,130 |
) |
Net increase (decrease) in cash and cash equivalents |
|
|
|
261,230 |
|
|
|
|
(127,265 |
) |
Cash and cash equivalents at beginning of period |
|
|
|
273,090 |
|
|
|
|
400,355 |
|
Cash and cash equivalents at end of period |
|
|
$ |
534,320 |
|
|
|
$ |
273,090 |
|
|
|
|
|
|
|
|
|
|
ARROW ELECTRONICS, INC. |
|
NON-GAAP SALES RECONCILIATION |
|
(In thousands) |
|
(Unaudited) |
|
|
|
|
Quarter Ended |
|
|
|
|
|
|
|
December 31, 2016 |
|
|
December 31, 2015 |
|
|
% Change |
|
|
|
|
|
|
|
|
|
|
|
Consolidated sales, as reported |
|
|
$ |
6,442,891 |
|
|
$ |
6,751,342 |
|
|
|
(4.6 |
)
|
%
|
Impact of changes in foreign currencies |
|
|
|
— |
|
|
|
(91,058 |
) |
|
|
|
|
Impact of acquisitions |
|
|
|
— |
|
|
|
66,777 |
|
|
|
|
|
Consolidated sales, as adjusted |
|
|
$ |
6,442,891 |
|
|
$ |
6,727,061 |
|
|
|
(4.2 |
)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Global components sales, as reported |
|
|
$ |
3,995,491 |
|
|
$ |
3,668,804 |
|
|
|
8.9 |
|
%
|
Impact of changes in foreign currencies |
|
|
|
— |
|
|
|
(26,949 |
) |
|
|
|
|
Impact of acquisitions |
|
|
|
— |
|
|
|
4,850 |
|
|
|
|
|
Global components sales, as adjusted |
|
|
$ |
3,995,491 |
|
|
$ |
3,646,705 |
|
|
|
9.6 |
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Europe components sales, as reported |
|
|
$ |
963,349 |
|
|
$ |
972,125 |
|
|
|
(0.9 |
)
|
%
|
Impact of changes in foreign currencies |
|
|
|
— |
|
|
|
(28,341 |
) |
|
|
|
|
Impact of acquisitions |
|
|
|
— |
|
|
|
143 |
|
|
|
|
|
Europe components sales, as adjusted |
|
|
$ |
963,349 |
|
|
$ |
943,927 |
|
|
|
2.1 |
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Asia components sales, as reported |
|
|
$ |
1,487,816 |
|
|
$ |
1,215,242 |
|
|
|
22.4 |
|
%
|
Impact of changes in foreign currencies |
|
|
|
— |
|
|
|
786 |
|
|
|
|
|
Impact of acquisitions |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
Asia components sales, as adjusted |
|
|
$ |
1,487,816 |
|
|
$ |
1,216,028 |
|
|
|
22.4 |
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Global ECS sales, as reported |
|
|
$ |
2,447,400 |
|
|
$ |
3,082,538 |
|
|
|
(20.6 |
)
|
%
|
Impact of changes in foreign currencies |
|
|
|
— |
|
|
|
(64,108 |
) |
|
|
|
|
Impact of acquisitions |
|
|
|
— |
|
|
|
61,927 |
|
|
|
|
|
Global ECS sales, as adjusted |
|
|
$ |
2,447,400 |
|
|
$ |
3,080,357 |
|
|
|
(20.5 |
)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Europe ECS sales, as reported |
|
|
$ |
818,363 |
|
|
$ |
1,054,926 |
|
|
|
(22.4 |
)
|
%
|
Impact of changes in foreign currencies |
|
|
|
— |
|
|
|
(70,254 |
) |
|
|
|
|
Impact of acquisitions |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
Europe ECS sales, as adjusted |
|
|
$ |
818,363 |
|
|
$ |
984,672 |
|
|
|
(16.9 |
)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Americas ECS sales, as reported |
|
|
$ |
1,629,037 |
|
|
$ |
2,027,612 |
|
|
|
(19.7 |
)
|
%
|
Impact of changes in foreign currencies |
|
|
|
— |
|
|
|
6,145 |
|
|
|
|
|
Impact of acquisitions |
|
|
|
— |
|
|
|
61,927 |
|
|
|
|
|
Americas ECS sales, as adjusted |
|
|
$ |
1,629,037 |
|
|
$ |
2,095,684 |
|
|
|
(22.3 |
)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARROW ELECTRONICS, INC. |
|
NON-GAAP SALES RECONCILIATION |
|
(In thousands) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended |
|
|
|
|
|
|
|
December 31, 2016 |
|
|
December 31, 2015 |
|
|
% Change |
|
|
|
|
|
|
|
|
|
|
|
Consolidated sales, as reported |
|
|
$ |
23,825,261 |
|
|
$ |
23,282,020 |
|
|
|
2.3 |
|
%
|
Impact of changes in foreign currencies |
|
|
|
— |
|
|
|
(201,764 |
) |
|
|
|
|
Impact of acquisitions |
|
|
|
48,148 |
|
|
|
680,798 |
|
|
|
|
|
Consolidated sales, as adjusted |
|
|
$ |
23,873,409 |
|
|
$ |
23,761,054 |
|
|
|
0.5 |
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Global components sales, as reported |
|
|
$ |
15,408,839 |
|
|
$ |
14,405,793 |
|
|
|
7.0 |
|
%
|
Impact of changes in foreign currencies |
|
|
|
— |
|
|
|
(79,175 |
) |
|
|
|
|
Impact of acquisitions |
|
|
|
9,711 |
|
|
|
338,553 |
|
|
|
|
|
Global components sales, as adjusted |
|
|
$ |
15,418,550 |
|
|
$ |
14,665,171 |
|
|
|
5.1 |
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Europe components sales, as reported |
|
|
$ |
4,086,607 |
|
|
$ |
3,874,744 |
|
|
|
5.5 |
|
%
|
Impact of changes in foreign currencies |
|
|
|
— |
|
|
|
(52,718 |
) |
|
|
|
|
Impact of acquisitions |
|
|
|
— |
|
|
|
104,634 |
|
|
|
|
|
Europe components sales, as adjusted |
|
|
$ |
4,086,607 |
|
|
$ |
3,926,660 |
|
|
|
4.1 |
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Asia components sales, as reported |
|
|
$ |
5,400,429 |
|
|
$ |
4,720,210 |
|
|
|
14.4 |
|
%
|
Impact of changes in foreign currencies |
|
|
|
— |
|
|
|
(22,458 |
) |
|
|
|
|
Impact of acquisitions |
|
|
|
— |
|
|
|
211,745 |
|
|
|
|
|
Asia components sales, as adjusted |
|
|
$ |
5,400,429 |
|
|
$ |
4,909,497 |
|
|
|
10.0 |
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Global ECS sales, as reported |
|
|
$ |
8,416,422 |
|
|
$ |
8,876,227 |
|
|
|
(5.2 |
)% |
|
Impact of changes in foreign currencies |
|
|
|
— |
|
|
|
(122,589 |
) |
|
|
|
|
Impact of acquisitions |
|
|
|
38,437 |
|
|
|
342,245 |
|
|
|
|
|
Global ECS sales, as adjusted |
|
|
$ |
8,454,859 |
|
|
$ |
9,095,883 |
|
|
|
(7.0 |
)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Europe ECS sales, as reported |
|
|
$ |
2,686,078 |
|
|
$ |
2,913,995 |
|
|
|
(7.8 |
)
|
%
|
Impact of changes in foreign currencies |
|
|
|
— |
|
|
|
(111,522 |
) |
|
|
|
|
Impact of acquisitions |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
Europe ECS sales, as adjusted |
|
|
$ |
2,686,078 |
|
|
$ |
2,802,473 |
|
|
|
(4.2
|
)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Americas ECS sales, as reported |
|
|
$ |
5,730,344 |
|
|
$ |
5,962,232 |
|
|
|
(3.9 |
)
|
%
|
Impact of changes in foreign currencies |
|
|
|
— |
|
|
|
(11,067 |
) |
|
|
|
|
Impact of acquisitions |
|
|
|
38,437 |
|
|
|
342,245 |
|
|
|
|
|
Americas ECS sales, as adjusted |
|
|
$ |
5,768,781 |
|
|
$ |
6,293,410 |
|
|
|
(8.3 |
)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
ARROW ELECTRONICS, INC. |
NON-GAAP EARNINGS RECONCILIATION |
(In thousands except per share data) |
(Unaudited) |
|
Three months ended December 31, 2016 |
|
|
|
Reported
GAAP
measure
|
|
|
Intangible
amortization
expense |
|
|
Restructuring
& Integration
charges |
|
|
Other* |
|
|
Non-GAAP
measure |
Operating income |
|
|
$ |
254,899 |
|
|
|
$ |
13,634 |
|
|
$ |
12,441 |
|
|
$ |
— |
|
|
$ |
280,974 |
|
Income before income taxes |
|
|
|
218,191 |
|
|
|
|
13,634 |
|
|
|
12,441 |
|
|
|
— |
|
|
|
244,266 |
|
Provision for income taxes |
|
|
|
53,233 |
|
|
|
|
4,870 |
|
|
|
3,733 |
|
|
|
— |
|
|
|
61,836 |
|
Consolidated net income |
|
|
|
164,958 |
|
|
|
|
8,764 |
|
|
|
8,708 |
|
|
|
— |
|
|
|
182,430 |
|
Noncontrolling interests |
|
|
|
440 |
|
|
|
|
336 |
|
|
|
— |
|
|
|
— |
|
|
|
776 |
|
Net income attributable to shareholders |
|
|
$ |
164,518 |
|
|
|
$ |
8,428 |
|
|
$ |
8,708 |
|
|
$ |
— |
|
|
$ |
181,654 |
|
Net income per diluted share |
|
|
|
1.81 |
|
|
|
|
0.09 |
|
|
|
0.10 |
|
|
|
— |
|
|
|
2.00 |
|
Effective tax rate |
|
|
|
24.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
25.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended December 31, 2015 |
|
|
|
Reported
GAAP
measure |
|
|
Intangible
amortization
expense |
|
|
Restructuring
& Integration
charges |
|
|
Other* |
|
|
Non-GAAP
measure |
Operating income |
|
|
$ |
254,311 |
|
|
|
|
11,743 |
|
|
|
17,666 |
|
|
|
— |
|
|
|
283,720 |
|
Income before income taxes |
|
|
|
220,516 |
|
|
|
|
11,743 |
|
|
|
17,666 |
|
|
|
1,500 |
|
|
|
251,425 |
|
Provision for income taxes |
|
|
|
61,108 |
|
|
|
|
2,206 |
|
|
|
4,467 |
|
|
|
579 |
|
|
|
68,360 |
|
Consolidated net income |
|
|
|
159,408 |
|
|
|
|
9,537 |
|
|
|
13,199 |
|
|
|
921 |
|
|
|
183,065 |
|
Noncontrolling interests |
|
|
|
916 |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
916 |
|
Net income attributable to shareholders |
|
|
$ |
158,492 |
|
|
|
|
9,537 |
|
|
|
13,199 |
|
|
|
921 |
|
|
|
182,149 |
|
Net income per diluted share |
|
|
|
1.69 |
|
|
|
|
0.10 |
|
|
|
0.14 |
|
|
|
0.01 |
|
|
|
1.94 |
|
Effective tax rate |
|
|
|
27.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
27.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2016 |
|
|
|
Reported
GAAP
measure |
|
|
Intangible
amortization
expense |
|
|
Restructuring
& Integration
charges |
|
|
Other* |
|
|
Non-GAAP
measure |
Operating income |
|
|
$ |
858,539 |
|
|
|
|
54,886 |
|
|
|
73,602 |
|
|
|
— |
|
|
|
987,027 |
|
Income before income taxes |
|
|
|
715,397 |
|
|
|
|
54,886 |
|
|
|
73,602 |
|
|
|
— |
|
|
|
843,885 |
|
Provision for income taxes |
|
|
|
190,674 |
|
|
|
|
17,226 |
|
|
|
22,977 |
|
|
|
— |
|
|
|
230,877 |
|
Consolidated net income |
|
|
|
524,723 |
|
|
|
|
37,660 |
|
|
|
50,625 |
|
|
|
— |
|
|
|
613,008 |
|
Noncontrolling interests |
|
|
|
1,973 |
|
|
|
|
1,275 |
|
|
|
— |
|
|
|
— |
|
|
|
3,248 |
|
Net income attributable to shareholders |
|
|
$ |
522,750 |
|
|
|
|
36,385 |
|
|
|
50,625 |
|
|
|
— |
|
|
|
609,760 |
|
Net income per diluted share |
|
|
|
5.68 |
|
|
|
|
0.40 |
|
|
|
0.55 |
|
|
|
— |
|
|
|
6.63 |
|
Effective tax rate |
|
|
|
26.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
27.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2015 |
|
|
|
Reported
GAAP
measure |
|
|
Intangible
amortization
expense |
|
|
Restructuring
& Integration
charges |
|
|
Other* |
|
|
Non-GAAP
measure |
Operating income |
|
|
$ |
824,482 |
|
|
|
|
51,036 |
|
|
|
68,765 |
|
|
|
— |
|
|
|
944,283 |
|
Income before income taxes |
|
|
|
692,183 |
|
|
|
|
51,036 |
|
|
|
68,765 |
|
|
|
3,935 |
|
|
|
815,919 |
|
Provision for income taxes |
|
|
|
191,697 |
|
|
|
|
9,780 |
|
|
|
17,461 |
|
|
|
1,952 |
|
|
|
220,890 |
|
Consolidated net income |
|
|
|
500,486 |
|
|
|
|
41,256 |
|
|
|
51,304 |
|
|
|
1,983 |
|
|
|
595,029 |
|
Noncontrolling interests |
|
|
|
2,760 |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,760 |
|
Net income attributable to shareholders |
|
|
$ |
497,726 |
|
|
|
|
41,256 |
|
|
|
51,304 |
|
|
|
1,983 |
|
|
|
592,269 |
|
Net income per diluted share |
|
|
|
5.20 |
|
|
|
|
0.43 |
|
|
|
0.54 |
|
|
|
0.02 |
|
|
|
6.19 |
|
Effective tax rate |
|
|
|
27.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
27.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*Other includes gain/loss on sale of investments and loss on
prepayment of debt. |
|
|
ARROW ELECTRONICS, INC. |
SEGMENT INFORMATION |
(In thousands) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
Quarter Ended |
|
|
Year Ended |
|
|
|
December 31, 2016 |
|
|
December 31, 2015 |
|
|
December 31, 2016 |
|
|
December 31, 2015 |
Sales: |
|
|
|
|
|
|
|
|
|
|
|
|
Global components |
|
|
$ |
3,995,491 |
|
|
|
$ |
3,668,804 |
|
|
|
$ |
15,408,839 |
|
|
|
$ |
14,405,793 |
|
Global ECS |
|
|
|
2,447,400 |
|
|
|
|
3,082,538 |
|
|
|
|
8,416,422 |
|
|
|
|
8,876,227 |
|
Consolidated |
|
|
$ |
6,442,891 |
|
|
|
$ |
6,751,342 |
|
|
|
$ |
23,825,261 |
|
|
|
$ |
23,282,020 |
|
Operating income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
Global components |
|
|
$ |
161,804 |
|
|
|
$ |
149,940 |
|
|
|
$ |
686,466 |
|
|
|
$ |
649,396 |
|
Global ECS |
|
|
|
158,011 |
|
|
|
|
173,919 |
|
|
|
|
441,803 |
|
|
|
|
424,063 |
|
Corporate (a) |
|
|
|
(64,916 |
) |
|
|
|
(69,548 |
) |
|
|
|
(269,730 |
) |
|
|
|
(248,977 |
) |
Consolidated |
|
|
$ |
254,899 |
|
|
|
$ |
254,311 |
|
|
|
$ |
858,539 |
|
|
|
$ |
824,482 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
|
Includes restructuring, integration, and other charges of $12.4 million and $73.6
million for the fourth quarter and Year Ended 2016 and $17.7 million and $68.8 million for the fourth quarter and Year Ended
2015, respectively. |
|
|
|
|
NON-GAAP SEGMENT RECONCILIATION |
|
|
|
|
|
|
|
|
|
|
Quarter Ended |
|
|
Year Ended |
|
|
|
December 31, 2016 |
|
|
December 31, 2015 |
|
|
December 31, 2016 |
|
|
December 31, 2015 |
Global components operating income, as reported |
|
|
$161,804 |
|
|
|
$ |
149,940 |
|
|
|
$ |
686,466 |
|
|
|
$ |
649,396 |
Intangible assets amortization expense |
|
|
7,497 |
|
|
|
6,657 |
|
|
|
31,621 |
|
|
|
27,125 |
Global components operating income, as adjusted |
|
|
$169,301 |
|
|
|
$ |
156,597 |
|
|
|
$ |
718,087 |
|
|
|
$ |
676,521 |
Global ECS operating income, as reported |
|
|
$158,011 |
|
|
|
$ |
173,919 |
|
|
|
$ |
441,803 |
|
|
|
$ |
424,063 |
Intangible assets amortization expense |
|
|
6,137 |
|
|
|
5,086 |
|
|
|
23,265 |
|
|
|
23,911 |
Global ECS operating income, as adjusted |
|
|
$164,148 |
|
|
|
$ |
179,005 |
|
|
|
$ |
465,068 |
|
|
|
$ |
447,974 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Arrow Electronics, Inc.
Steven O’Brien,
Vice President, Investor Relations
303-824-4544
or
Media Contact:
John Hourigan,
Vice President, Global Communications
303-824-4586
View source version on businesswire.com: http://www.businesswire.com/news/home/20170207005618/en/