-- Third-Quarter Earnings Per Share of $3.53; Non-GAAP Earnings Per Share of $4.14 –
-- Revenue of $8.01 billion in line with guidance --
Arrow Electronics, Inc. (NYSE:ARW) today reported third-quarter 2023 sales of $8.01 billion, a decrease of 14 percent year over year. Third-quarter net income was $199 million, or $3.53 per share on a diluted basis, compared with net income of $342 million, or $5.27 per share on a diluted basis, in the third quarter of 2022. Non-GAAP net income1 was $233 million, or $4.14 per share on a diluted basis, in the third quarter of 2023, compared with non-GAAP net income of $354 million, or $5.45 per share on a diluted basis, in the third quarter of 2022. Both GAAP and non-GAAP earnings per share in the third quarter of 2023 included a $0.87 benefit related to cash received from a legal settlement in the global components business, and a $0.31 impact for a charge taken to increase accounts receivable reserves associated with a customer in the global enterprise computing solutions (ECS) business.
“The company executed well amidst an inventory correction in the semiconductor market and a softer information technology market, delivering non-GAAP earnings per share at the high end of our guidance range,” said Sean Kerins, Arrow’s president, and chief executive officer.
Global components third-quarter sales of $6.25 billion reflected a decrease of 14 percent year over year. Europe components third-quarter sales increased 3 percent year over year, which was a 4 percent decline in constant currency. Asia-Pacific components third-quarter sales decreased 18 percent year over year. Americas components third-quarter sales decreased 24 percent year over year. Global components third-quarter operating income was $379 million, and third-quarter non-GAAP operating income was $386 million. These results include a $62 million benefit resulting from a legal settlement recorded as a decrease to operating expenses.
“With lead times normalizing, customer inventory remained elevated, impacting order velocity and top-line results across most vertical markets. Despite the market conditions, operating margins are meaningfully higher than in prior market corrections,” said Mr. Kerins. “We were encouraged by the level of demand creation activity in the quarter and the continued traction of our supply chain services offering.”
Global ECS third-quarter sales of $1.76 billion reflected a decrease of 10 percent year over year. Europe ECS third-quarter sales increased 2 percent year over year, which was a 5 percent decline in constant currency. Americas ECS third-quarter sales decreased 18 percent year over year. Global ECS third-quarter operating income was $55 million, and third-quarter non-GAAP operating income was $56 million. These results include a $22 million charge taken to increase accounts receivable reserves associated with a customer.
“The mix in our ECS business continued to shift toward software related to infrastructure and cybersecurity, as well as cloud solutions. As a result, the business produced year-on-year billings growth albeit with a decline in sales,” said Mr. Kerins.
“Non-GAAP earnings per share after adjusting for the legal settlement and accounts receivable item, was at the high end of our guidance range,” said Raj Agrawal, senior vice president and chief financial officer. “We were pleased to generate $322 million in cash flow from operations in the third quarter. Additionally, we repurchased approximately $200 million of shares during the third quarter and now have remaining purchase authorization of approximately $622 million.”
1 A reconciliation of non-GAAP financial measures to GAAP financial measures is presented in the reconciliation tables included herein.
FOURTH-QUARTER 2023 OUTLOOK
- Consolidated sales of $7.50 billion to $8.10 billion, with global components sales of $5.40 billion to $5.80 billion, and global enterprise computing solutions sales of $2.10 billion to $2.30 billion
- Net income per share on a diluted basis of $3.30 to $3.50, and non-GAAP net income per share on a diluted basis of $3.61 to $3.81
- Average tax rate in the range of 23 to 25 percent
- Average diluted shares outstanding of ~55 million
- Interest expense in the range of approximately $90 million
- Changes in foreign currencies expected to increase year-over-year growth in sales by $54 million, and earnings per share on a diluted basis by $0.02 compared to the fourth quarter of 2022
- Changes in foreign currencies expected to decrease quarter-over-quarter growth in sales by $82 million and earnings per share on a diluted basis by $0.07 compared to the third quarter of 2023
|
Fourth-Quarter 2023 GAAP to non-GAAP Outlook Reconciliation
|
|
NON-GAAP SALES RECONCILIATION
|
|
|
|
Quarter Ended
|
|
|
|
Quarter Ended
|
|
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
December 31,
|
|
September 30,
|
|
|
|
(in billions)
|
|
2023
|
|
2022
|
|
% Change
|
|
2023
|
|
2023
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global components sales, GAAP
|
|
$
|
5.40 - 5.80
|
|
|
$
|
6.83
|
|
|
(21%) - (15%)
|
|
$
|
5.40 - 5.80
|
|
|
$
|
6.25
|
|
|
(14%) - (7%)
|
|
Impact of changes in foreign currencies
|
|
|
—
|
|
|
|
0.03
|
|
|
|
|
|
—
|
|
|
|
(0.06
|
)
|
|
|
|
Global components sales, constant currency
|
|
$
|
5.40 - 5.80
|
|
|
$
|
6.86
|
|
|
(21%) - (15%)
|
|
$
|
5.40 - 5.80
|
|
|
$
|
6.19
|
|
|
(13%) - (6%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global ECS sales, GAAP
|
|
$
|
2.10 - 2.30
|
|
|
$
|
2.50
|
|
|
(16%) - (8%)
|
|
$
|
2.10 - 2.30
|
|
|
$
|
1.76
|
|
|
19% - 31%
|
|
Impact of changes in foreign currencies
|
|
|
—
|
|
|
|
0.02
|
|
|
|
|
|
—
|
|
|
|
(0.02
|
)
|
|
|
|
Global ECS sales, constant currency
|
|
$
|
2.10 - 2.30
|
|
|
$
|
2.52
|
|
|
(17%) - (9%)
|
|
$
|
2.10 - 2.30
|
|
|
$
|
1.74
|
|
|
21% - 32%
|
|
|
|
|
|
|
|
|
|
|
|
NON-GAAP EARNINGS RECONCILIATION
|
|
|
|
|
|
Intangible amortization
|
|
Restructuring &
|
|
|
|
|
|
Reported GAAP measure
|
|
expense
|
|
integration charges
|
|
Non-GAAP measure
|
|
Net income per diluted share
|
|
$3.30 to $3.50
|
|
$0.10
|
|
$0.21
|
|
$3.61 to $3.81
|
CFO Commentary and Earnings Presentation
Please refer to the CFO commentary and 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.
Conference Call and Webcast Information
Arrow Electronics will host a conference call to discuss third-quarter 2023 financial results on Nov. 2, 2023, at 1:00 PM ET. Register online at https://conferencingportals.com/event/fEoxDDHd to obtain dial-in information for the live conference call. The conference call will also be available via live webcast at investor.arrow.com. Shortly after the conclusion of the conference call, a webcast replay will be available at investor.arrow.com.
About Arrow Electronics
Arrow Electronics guides innovation forward for over 210,000 leading technology manufacturers and service providers. With 2022 sales of $37 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 fourth quarter of fiscal 2023 such as sales, net income per diluted share, non-GAAP net income per diluted share, average tax rate, average diluted shares outstanding, 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 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; 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; 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 non-GAAP sales, operating income, income before income taxes, provision for income taxes, consolidated net income, noncontrolling interests, net income attributable to shareholders, effective tax rate and net income per share on a diluted basis, which are non-GAAP measures adjusted for the 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, 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.
|
ARROW ELECTRONICS, INC.
|
|
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
(In thousands except per share data)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
Nine Months Ended
|
|
|
|
September 30, 2023
|
|
October 1, 2022
|
|
September 30, 2023
|
|
|
October 1, 2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
$
|
8,007,019
|
|
|
$
|
9,266,432
|
|
|
$
|
25,257,963
|
|
|
$
|
27,801,399
|
|
|
Cost of sales
|
|
|
7,027,422
|
|
|
|
8,079,520
|
|
|
|
22,098,495
|
|
|
|
24,170,769
|
|
|
Gross profit
|
|
|
979,597
|
|
|
|
1,186,912
|
|
|
|
3,159,468
|
|
|
|
3,630,630
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general, and administrative expenses
|
|
|
563,150
|
|
|
|
634,353
|
|
|
|
1,822,783
|
|
|
|
1,931,918
|
|
|
Depreciation and amortization
|
|
|
45,005
|
|
|
|
46,230
|
|
|
|
137,948
|
|
|
|
141,787
|
|
|
Restructuring, integration, and other charges
|
|
|
31,359
|
|
|
|
3,635
|
|
|
|
44,252
|
|
|
|
11,027
|
|
|
|
|
|
639,514
|
|
|
|
684,218
|
|
|
|
2,004,983
|
|
|
|
2,084,732
|
|
|
Operating income
|
|
|
340,083
|
|
|
|
502,694
|
|
|
|
1,154,485
|
|
|
|
1,545,898
|
|
|
Equity in earnings of affiliated companies
|
|
|
1,392
|
|
|
|
1,718
|
|
|
|
4,373
|
|
|
|
4,726
|
|
|
(Loss) gain on investments, net
|
|
|
(6,159
|
)
|
|
|
(3,480
|
)
|
|
|
4,649
|
|
|
|
(11,213
|
)
|
|
Employee benefit plan expense, net
|
|
|
(854
|
)
|
|
|
(890
|
)
|
|
|
(2,510
|
)
|
|
|
(2,614
|
)
|
|
Interest and other financing expense, net
|
|
|
(82,180
|
)
|
|
|
(50,936
|
)
|
|
|
(246,672
|
)
|
|
|
(123,427
|
)
|
|
Income before income taxes
|
|
|
252,282
|
|
|
|
449,106
|
|
|
|
914,325
|
|
|
|
1,413,370
|
|
|
Provision for income taxes
|
|
|
52,241
|
|
|
|
105,500
|
|
|
|
201,168
|
|
|
|
332,273
|
|
|
Consolidated net income
|
|
|
200,041
|
|
|
|
343,606
|
|
|
|
713,157
|
|
|
|
1,081,097
|
|
|
Noncontrolling interests
|
|
|
1,382
|
|
|
|
1,207
|
|
|
|
4,189
|
|
|
|
3,615
|
|
|
Net income attributable to shareholders
|
|
$
|
198,659
|
|
|
$
|
342,399
|
|
|
$
|
708,968
|
|
|
$
|
1,077,482
|
|
|
Net income per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
3.57
|
|
|
$
|
5.33
|
|
|
$
|
12.43
|
|
|
$
|
16.31
|
|
|
Diluted
|
|
$
|
3.53
|
|
|
$
|
5.27
|
|
|
$
|
12.28
|
|
|
$
|
16.12
|
|
|
Weighted-average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
55,597
|
|
|
|
64,228
|
|
|
|
57,021
|
|
|
|
66,055
|
|
|
Diluted
|
|
|
56,298
|
|
|
|
64,979
|
|
|
|
57,715
|
|
|
|
66,845
|
|
|
ARROW ELECTRONICS, INC.
|
|
CONSOLIDATED BALANCE SHEETS
|
|
(In thousands except par value)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2023
|
|
December 31, 2022
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
333,294
|
|
|
$
|
176,915
|
|
|
Accounts receivable, net
|
|
|
10,663,164
|
|
|
|
12,322,717
|
|
|
Inventories
|
|
|
5,805,520
|
|
|
|
5,319,369
|
|
|
Other current assets
|
|
|
503,982
|
|
|
|
521,339
|
|
|
Total current assets
|
|
|
17,305,960
|
|
|
|
18,340,340
|
|
|
Property, plant, and equipment, at cost:
|
|
|
|
|
|
|
|
Land
|
|
|
5,691
|
|
|
|
5,691
|
|
|
Buildings and improvements
|
|
|
185,790
|
|
|
|
184,211
|
|
|
Machinery and equipment
|
|
|
1,616,937
|
|
|
|
1,583,661
|
|
|
|
|
|
1,808,418
|
|
|
|
1,773,563
|
|
|
Less: Accumulated depreciation and amortization
|
|
|
(1,272,214
|
)
|
|
|
(1,177,107
|
)
|
|
Property, plant, and equipment, net
|
|
|
536,204
|
|
|
|
596,456
|
|
|
Investments in affiliated companies
|
|
|
63,049
|
|
|
|
65,112
|
|
|
Intangible assets, net
|
|
|
134,811
|
|
|
|
159,137
|
|
|
Goodwill
|
|
|
2,021,987
|
|
|
|
2,027,626
|
|
|
Other assets
|
|
|
576,349
|
|
|
|
574,511
|
|
|
Total assets
|
|
$
|
20,638,360
|
|
|
$
|
21,763,182
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
9,090,554
|
|
|
$
|
10,460,419
|
|
|
Accrued expenses
|
|
|
1,256,815
|
|
|
|
1,339,302
|
|
|
Short-term borrowings, including current portion of long-term debt
|
|
|
1,588,662
|
|
|
|
589,883
|
|
|
Total current liabilities
|
|
|
11,936,031
|
|
|
|
12,389,604
|
|
|
Long-term debt
|
|
|
2,615,001
|
|
|
|
3,182,964
|
|
|
Other liabilities
|
|
|
533,853
|
|
|
|
579,261
|
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
Shareholders’ equity:
|
|
|
|
|
|
|
|
Common stock, par value $1:
|
|
|
|
|
|
|
|
Authorized - 160,000 shares in both 2023 and 2022
|
|
|
|
|
|
|
|
Issued - 125,424 shares in both 2023 and 2022
|
|
|
125,424
|
|
|
|
125,424
|
|
|
Capital in excess of par value
|
|
|
1,205,788
|
|
|
|
1,208,708
|
|
|
Treasury stock (71,269 and 66,175 shares in 2023 and 2022, respectively), at cost
|
|
|
(5,307,441
|
)
|
|
|
(4,637,345
|
)
|
|
Retained earnings
|
|
|
9,923,800
|
|
|
|
9,214,832
|
|
|
Accumulated other comprehensive loss
|
|
|
(462,310
|
)
|
|
|
(365,262
|
)
|
|
Total shareholders’ equity
|
|
|
5,485,261
|
|
|
|
5,546,357
|
|
|
Noncontrolling interests
|
|
|
68,214
|
|
|
|
64,996
|
|
|
Total equity
|
|
|
5,553,475
|
|
|
|
5,611,353
|
|
|
Total liabilities and equity
|
|
$
|
20,638,360
|
|
|
$
|
21,763,182
|
|
|
ARROW ELECTRONICS, INC.
|
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
(In thousands)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
|
|
September 30, 2023
|
|
October 1, 2022
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
Consolidated net income
|
|
$
|
200,041
|
|
|
$
|
343,606
|
|
|
Adjustments to reconcile consolidated net income to net cash provided by operations:
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
45,005
|
|
|
|
46,230
|
|
|
Amortization of stock-based compensation
|
|
|
6,519
|
|
|
|
3,773
|
|
|
Equity in earnings of affiliated companies
|
|
|
(1,392
|
)
|
|
|
(1,718
|
)
|
|
Deferred income taxes
|
|
|
(19,639
|
)
|
|
|
8,152
|
|
|
Loss on investments, net
|
|
|
6,159
|
|
|
|
3,480
|
|
|
Other
|
|
|
1,092
|
|
|
|
307
|
|
|
Change in assets and liabilities:
|
|
|
|
|
|
|
|
Accounts receivable, net
|
|
|
260,749
|
|
|
|
(594,767
|
)
|
|
Inventories
|
|
|
(383,647
|
)
|
|
|
(255,871
|
)
|
|
Accounts payable
|
|
|
157,482
|
|
|
|
482,061
|
|
|
Accrued expenses
|
|
|
127,235
|
|
|
|
132,636
|
|
|
Other assets and liabilities
|
|
|
(77,897
|
)
|
|
|
(26,823
|
)
|
|
Net cash provided by operating activities
|
|
|
321,707
|
|
|
|
141,066
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
Acquisition of property, plant, and equipment
|
|
|
(20,670
|
)
|
|
|
(18,536
|
)
|
|
Proceeds from collections of notes receivable
|
|
|
—
|
|
|
|
263
|
|
|
Net cash used for investing activities
|
|
|
(20,670
|
)
|
|
|
(18,273
|
)
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
Change in short-term and other borrowings
|
|
|
603,693
|
|
|
|
(19,506
|
)
|
|
(Repayments of) proceeds from long-term bank borrowings, net
|
|
|
(557,308
|
)
|
|
|
328,268
|
|
|
Proceeds from exercise of stock options
|
|
|
443
|
|
|
|
762
|
|
|
Repurchases of common stock
|
|
|
(203,491
|
)
|
|
|
(241,291
|
)
|
|
Net cash (used for) provided by financing activities
|
|
|
(156,663
|
)
|
|
|
68,233
|
|
|
Effect of exchange rate changes on cash
|
|
|
(51,462
|
)
|
|
|
(82,637
|
)
|
|
Net increase in cash and cash equivalents
|
|
|
92,912
|
|
|
|
108,389
|
|
|
Cash and cash equivalents at beginning of period
|
|
|
240,382
|
|
|
|
225,596
|
|
|
Cash and cash equivalents at end of period
|
|
$
|
333,294
|
|
|
$
|
333,985
|
|
|
ARROW ELECTRONICS, INC.
|
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
(In thousands)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
|
|
|
|
September 30, 2023
|
|
October 1, 2022
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
Consolidated net income
|
|
$
|
713,157
|
|
|
$
|
1,081,097
|
|
|
Adjustments to reconcile consolidated net income to net cash provided by (used for) operations:
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
137,948
|
|
|
|
141,787
|
|
|
Amortization of stock-based compensation
|
|
|
34,868
|
|
|
|
35,009
|
|
|
Equity in earnings of affiliated companies
|
|
|
(4,373
|
)
|
|
|
(4,726
|
)
|
|
Deferred income taxes
|
|
|
(53,038
|
)
|
|
|
1,468
|
|
|
(Gain) loss on investments, net
|
|
|
(4,649
|
)
|
|
|
11,213
|
|
|
Other
|
|
|
4,078
|
|
|
|
2,673
|
|
|
Change in assets and liabilities:
|
|
|
|
|
|
|
|
Accounts receivable, net
|
|
|
1,585,521
|
|
|
|
(628,974
|
)
|
|
Inventories
|
|
|
(525,020
|
)
|
|
|
(1,011,763
|
)
|
|
Accounts payable
|
|
|
(1,355,777
|
)
|
|
|
166,602
|
|
|
Accrued expenses
|
|
|
(88,348
|
)
|
|
|
192,759
|
|
|
Other assets and liabilities
|
|
|
(25,660
|
)
|
|
|
(128,909
|
)
|
|
Net cash provided by (used for) operating activities
|
|
|
418,707
|
|
|
|
(141,764
|
)
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
Acquisition of property, plant, and equipment
|
|
|
(57,775
|
)
|
|
|
(54,780
|
)
|
|
Proceeds from collections of notes receivable
|
|
|
237
|
|
|
|
20,805
|
|
|
Proceeds from settlement of net investment hedge
|
|
|
10,725
|
|
|
|
—
|
|
|
Net cash used for investing activities
|
|
|
(46,813
|
)
|
|
|
(33,975
|
)
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
Change in short-term and other borrowings
|
|
|
802,032
|
|
|
|
276,516
|
|
|
(Repayments of) proceeds from long-term bank borrowings, net
|
|
|
(566,734
|
)
|
|
|
1,238,268
|
|
|
Net proceeds from note offering
|
|
|
496,268
|
|
|
|
—
|
|
|
Redemption of notes
|
|
|
(300,000
|
)
|
|
|
(350,000
|
)
|
|
Proceeds from exercise of stock options
|
|
|
16,824
|
|
|
|
16,434
|
|
|
Repurchases of common stock
|
|
|
(719,708
|
)
|
|
|
(725,254
|
)
|
|
Settlement of forward-starting interest rate swap
|
|
|
56,711
|
|
|
|
—
|
|
|
Other
|
|
|
(142
|
)
|
|
|
(137
|
)
|
|
Net cash (used for) provided by financing activities
|
|
|
(214,749
|
)
|
|
|
455,827
|
|
|
Effect of exchange rate changes on cash
|
|
|
(766
|
)
|
|
|
(168,297
|
)
|
|
Net increase in cash and cash equivalents
|
|
|
156,379
|
|
|
|
111,791
|
|
|
Cash and cash equivalents at beginning of period
|
|
|
176,915
|
|
|
|
222,194
|
|
|
Cash and cash equivalents at end of period
|
|
$
|
333,294
|
|
|
$
|
333,985
|
|
ARROW ELECTRONICS, INC.
|
|
NON-GAAP SALES RECONCILIATION
|
|
(In thousands)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
|
|
|
|
September 30, 2023
|
|
October 1, 2022
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated sales, as reported
|
|
$
|
8,007,019
|
|
|
$
|
9,266,432
|
|
|
(13.6
|
)%
|
|
Impact of changes in foreign currencies
|
|
|
—
|
|
|
|
145,732
|
|
|
|
|
Consolidated sales, constant currency
|
|
$
|
8,007,019
|
|
|
$
|
9,412,164
|
|
|
(14.9
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
Global components sales, as reported
|
|
$
|
6,245,192
|
|
|
$
|
7,300,347
|
|
|
(14.5
|
)%
|
|
Impact of changes in foreign currencies
|
|
|
—
|
|
|
|
96,433
|
|
|
|
|
Global components sales, constant currency
|
|
$
|
6,245,192
|
|
|
$
|
7,396,780
|
|
|
(15.6
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
Americas components sales, as reported
|
|
$
|
1,869,934
|
|
|
$
|
2,445,647
|
|
|
(23.5
|
)%
|
|
Impact of changes in foreign currencies
|
|
|
—
|
|
|
|
32
|
|
|
|
|
Americas components sales, constant currency
|
|
$
|
1,869,934
|
|
|
$
|
2,445,679
|
|
|
(23.5
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
Asia components sales, as reported
|
|
$
|
2,387,835
|
|
|
$
|
2,918,873
|
|
|
(18.2
|
)%
|
|
Impact of changes in foreign currencies
|
|
|
—
|
|
|
|
(27,584
|
)
|
|
|
|
Asia components sales, constant currency
|
|
$
|
2,387,835
|
|
|
$
|
2,891,289
|
|
|
(17.4
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
Europe components sales, as reported
|
|
$
|
1,987,423
|
|
|
$
|
1,935,827
|
|
|
2.7
|
%
|
|
Impact of changes in foreign currencies
|
|
|
—
|
|
|
|
123,985
|
|
|
|
|
Europe components sales, constant currency
|
|
$
|
1,987,423
|
|
|
$
|
2,059,812
|
|
|
(3.5
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
Global ECS sales, as reported
|
|
$
|
1,761,827
|
|
|
$
|
1,966,085
|
|
|
(10.4
|
)%
|
|
Impact of changes in foreign currencies
|
|
|
—
|
|
|
|
49,299
|
|
|
|
|
Global ECS sales, constant currency
|
|
$
|
1,761,827
|
|
|
$
|
2,015,384
|
|
|
(12.6
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
Americas ECS sales, as reported
|
|
$
|
1,015,924
|
|
|
$
|
1,234,158
|
|
|
(17.7
|
)%
|
|
Impact of changes in foreign currencies
|
|
|
—
|
|
|
|
(3,105
|
)
|
|
|
|
Americas ECS sales, constant currency
|
|
$
|
1,015,924
|
|
|
$
|
1,231,053
|
|
|
(17.5
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
Europe ECS sales, as reported
|
|
$
|
745,903
|
|
|
$
|
731,927
|
|
|
1.9
|
%
|
|
Impact of changes in foreign currencies
|
|
|
—
|
|
|
|
52,404
|
|
|
|
|
Europe ECS sales, constant currency
|
|
$
|
745,903
|
|
|
$
|
784,331
|
|
|
(4.9
|
)%
|
|
ARROW ELECTRONICS, INC.
|
|
NON-GAAP SALES RECONCILIATION
|
|
(In thousands)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
|
|
|
|
|
|
September 30, 2023
|
|
October 1, 2022
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated sales, as reported
|
|
$
|
25,257,963
|
|
|
$
|
27,801,399
|
|
|
(9.1
|
)%
|
|
Impact of changes in foreign currencies
|
|
|
—
|
|
|
|
(74,613
|
)
|
|
|
|
Consolidated sales, constant currency
|
|
$
|
25,257,963
|
|
|
$
|
27,726,786
|
|
|
(8.9
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
Global components sales, as reported
|
|
$
|
19,783,867
|
|
|
$
|
21,960,974
|
|
|
(9.9
|
)%
|
|
Impact of changes in foreign currencies
|
|
|
—
|
|
|
|
(68,284
|
)
|
|
|
|
Global components sales, constant currency
|
|
$
|
19,783,867
|
|
|
$
|
21,892,690
|
|
|
(9.6
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
Americas components sales, as reported
|
|
$
|
6,169,949
|
|
|
$
|
7,265,552
|
|
|
(15.1
|
)%
|
|
Impact of changes in foreign currencies
|
|
|
—
|
|
|
|
(2,265
|
)
|
|
|
|
Americas components sales, constant currency
|
|
$
|
6,169,949
|
|
|
$
|
7,263,287
|
|
|
(15.1
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
Asia components sales, as reported
|
|
$
|
7,226,871
|
|
|
$
|
9,024,188
|
|
|
(19.9
|
)%
|
|
Impact of changes in foreign currencies
|
|
|
—
|
|
|
|
(115,290
|
)
|
|
|
|
Asia components sales, constant currency
|
|
$
|
7,226,871
|
|
|
$
|
8,908,898
|
|
|
(18.9
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
Europe components sales, as reported
|
|
$
|
6,387,047
|
|
|
$
|
5,671,234
|
|
|
12.6
|
%
|
|
Impact of changes in foreign currencies
|
|
|
—
|
|
|
|
49,271
|
|
|
|
|
Europe components sales, constant currency
|
|
$
|
6,387,047
|
|
|
$
|
5,720,505
|
|
|
11.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Global ECS sales, as reported
|
|
$
|
5,474,096
|
|
|
$
|
5,840,425
|
|
|
(6.3
|
)%
|
|
Impact of changes in foreign currencies
|
|
|
—
|
|
|
|
(6,329
|
)
|
|
|
|
Global ECS sales, constant currency
|
|
$
|
5,474,096
|
|
|
$
|
5,834,096
|
|
|
(6.2
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
Americas ECS sales, as reported
|
|
$
|
3,014,544
|
|
|
$
|
3,442,803
|
|
|
(12.4
|
)%
|
|
Impact of changes in foreign currencies
|
|
|
—
|
|
|
|
(19,051
|
)
|
|
|
|
Americas ECS sales, constant currency
|
|
$
|
3,014,544
|
|
|
$
|
3,423,752
|
|
|
(12.0
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
Europe ECS sales, as reported
|
|
$
|
2,459,552
|
|
|
$
|
2,397,622
|
|
|
2.6
|
%
|
|
Impact of changes in foreign currencies
|
|
|
—
|
|
|
|
12,722
|
|
|
|
|
Europe ECS sales, constant currency
|
|
$
|
2,459,552
|
|
|
$
|
2,410,344
|
|
|
2.0
|
%
|
|
ARROW ELECTRONICS, INC.
|
|
NON-GAAP EARNINGS RECONCILIATION
|
|
(In thousands except per share data)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended September 30, 2023
|
|
|
|
Reported
|
|
Intangible
|
|
Restructuring
|
|
|
|
|
|
|
|
|
|
GAAP
|
|
amortization
|
|
& Integration
|
|
|
|
|
Non-GAAP
|
|
|
|
measure
|
|
expense
|
|
charges(1)
|
|
Other(2)
|
|
measure
|
|
Operating income
|
|
$
|
340,083
|
|
|
$
|
7,863
|
|
|
$
|
31,359
|
|
|
$
|
—
|
|
|
$
|
379,305
|
|
|
Income before income taxes
|
|
|
252,282
|
|
|
|
7,863
|
|
|
|
31,359
|
|
|
|
6,159
|
|
|
|
297,663
|
|
|
Provision for income taxes
|
|
|
52,241
|
|
|
|
1,959
|
|
|
|
7,321
|
|
|
|
1,476
|
|
|
|
62,997
|
|
|
Consolidated net income
|
|
|
200,041
|
|
|
|
5,904
|
|
|
|
24,038
|
|
|
|
4,683
|
|
|
|
234,666
|
|
|
Noncontrolling interests
|
|
|
1,382
|
|
|
|
138
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,520
|
|
|
Net income attributable to shareholders
|
|
$
|
198,659
|
|
|
$
|
5,766
|
|
|
$
|
24,038
|
|
|
$
|
4,683
|
|
|
$
|
233,146
|
|
|
Net income per diluted share (3)
|
|
$
|
3.53
|
|
|
$
|
0.10
|
|
|
$
|
0.43
|
|
|
$
|
0.08
|
|
|
$
|
4.14
|
|
|
Effective tax rate (4)
|
|
|
20.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
21.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended October 1, 2022
|
|
|
|
Reported
|
|
Intangible
|
|
Restructuring
|
|
|
|
|
|
|
|
|
|
GAAP
|
|
amortization
|
|
& Integration
|
|
|
|
|
Non-GAAP
|
|
|
|
measure
|
|
expense
|
|
charges(1)
|
|
Other(2)
|
|
measure
|
|
Operating income
|
|
$
|
502,694
|
|
|
$
|
8,674
|
|
|
$
|
3,635
|
|
|
$
|
—
|
|
|
$
|
515,003
|
|
|
Income before income taxes
|
|
|
449,106
|
|
|
|
8,674
|
|
|
|
3,635
|
|
|
|
3,480
|
|
|
|
464,895
|
|
|
Provision for income taxes
|
|
|
105,500
|
|
|
|
2,219
|
|
|
|
892
|
|
|
|
841
|
|
|
|
109,452
|
|
|
Consolidated net income
|
|
|
343,606
|
|
|
|
6,455
|
|
|
|
2,743
|
|
|
|
2,639
|
|
|
|
355,443
|
|
|
Noncontrolling interests
|
|
|
1,207
|
|
|
|
125
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,332
|
|
|
Net income attributable to shareholders
|
|
$
|
342,399
|
|
|
$
|
6,330
|
|
|
$
|
2,743
|
|
|
$
|
2,639
|
|
|
$
|
354,111
|
|
|
Net income per diluted share (3)
|
|
$
|
5.27
|
|
|
$
|
0.10
|
|
|
$
|
0.04
|
|
|
$
|
0.04
|
|
|
$
|
5.45
|
|
|
Effective tax rate (4)
|
|
|
23.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
23.5
|
%
|
|
ARROW ELECTRONICS, INC.
|
|
NON-GAAP EARNINGS RECONCILIATION
|
|
(In thousands except per share data)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended September 30, 2023
|
|
|
|
Reported
|
|
Intangible
|
|
Restructuring
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
|
|
amortization
|
|
& Integration
|
|
Non-recurring
|
|
|
|
|
Non-GAAP
|
|
|
|
measure
|
|
expense
|
|
charges(1)
|
|
tax items
|
|
Other(2)
|
|
measure
|
|
Operating income
|
|
$
|
1,154,485
|
|
|
$
|
23,751
|
|
|
$
|
44,252
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,222,488
|
|
|
Income before income taxes
|
|
|
914,325
|
|
|
|
23,751
|
|
|
|
44,252
|
|
|
|
—
|
|
|
|
(4,649
|
)
|
|
|
977,679
|
|
|
Provision for income taxes
|
|
|
201,168
|
|
|
|
5,961
|
|
|
|
10,638
|
|
|
|
(942
|
)
|
|
|
(1,114
|
)
|
|
|
215,711
|
|
|
Consolidated net income
|
|
|
713,157
|
|
|
|
17,790
|
|
|
|
33,614
|
|
|
|
942
|
|
|
|
(3,535
|
)
|
|
|
761,968
|
|
|
Noncontrolling interests
|
|
|
4,189
|
|
|
|
408
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
4,597
|
|
|
Net income attributable to shareholders
|
|
$
|
708,968
|
|
|
$
|
17,382
|
|
|
$
|
33,614
|
|
|
$
|
942
|
|
|
$
|
(3,535
|
)
|
|
$
|
757,371
|
|
|
Net income per diluted share (3)
|
|
$
|
12.28
|
|
|
$
|
0.30
|
|
|
$
|
0.58
|
|
|
$
|
0.02
|
|
|
$
|
(0.06
|
)
|
|
$
|
13.12
|
|
|
Effective tax rate (4)
|
|
|
22.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22.1
|
%
|
|
Nine months ended October 1, 2022
|
|
|
|
Reported
|
|
Intangible
|
|
Restructuring
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
|
|
amortization
|
|
& Integration
|
|
Non-recurring
|
|
|
|
|
Non-GAAP
|
|
|
|
measure
|
|
expense
|
|
charges(1)
|
|
tax items
|
|
Other(2)
|
|
measure
|
|
Operating income
|
|
$
|
1,545,898
|
|
|
$
|
26,522
|
|
|
$
|
11,027
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,583,447
|
|
|
Income before income taxes
|
|
|
1,413,370
|
|
|
|
26,522
|
|
|
|
11,027
|
|
|
|
—
|
|
|
|
11,213
|
|
|
|
1,462,132
|
|
|
Provision for income taxes
|
|
|
332,273
|
|
|
|
6,792
|
|
|
|
2,459
|
|
|
|
—
|
|
|
|
2,711
|
|
|
|
344,235
|
|
|
Consolidated net income
|
|
|
1,081,097
|
|
|
|
19,730
|
|
|
|
8,568
|
|
|
|
—
|
|
|
|
8,502
|
|
|
|
1,117,897
|
|
|
Noncontrolling interests
|
|
|
3,615
|
|
|
|
398
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
4,013
|
|
|
Net income attributable to shareholders
|
|
$
|
1,077,482
|
|
|
$
|
19,332
|
|
|
$
|
8,568
|
|
|
$
|
—
|
|
|
$
|
8,502
|
|
|
$
|
1,113,884
|
|
|
Net income per diluted share (3)
|
|
$
|
16.12
|
|
|
$
|
0.29
|
|
|
$
|
0.13
|
|
|
$
|
—
|
|
|
$
|
0.13
|
|
|
$
|
16.66
|
|
|
Effective tax rate (4)
|
|
|
23.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23.5
|
%
|
| ____________________ |
|
(1) Includes charges to increase the environmental remediation reserves in the amount of $20.9 million and $23.3 million for third quarter and first nine months of 2023, respectively and $1.9 million and $2.2 million for the third quarter and first nine months of 2022, respectively.
|
|
(2) Other includes (gain) loss on investments, net.
|
|
(3) The sum of the components for non-GAAP diluted EPS, as adjusted may not agree to totals, as presented, due to rounding.
|
|
(4) 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
|
|
Nine Months Ended
|
|
|
|
September 30, 2023
|
|
October 1, 2022
|
|
September 30, 2023
|
|
October 1, 2022
|
|
Sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global components
|
|
$
|
6,245,192
|
|
|
$
|
7,300,347
|
|
|
$
|
19,783,867
|
|
|
$
|
21,960,974
|
|
|
Global ECS
|
|
|
1,761,827
|
|
|
|
1,966,085
|
|
|
|
5,474,096
|
|
|
|
5,840,425
|
|
|
Consolidated
|
|
$
|
8,007,019
|
|
|
$
|
9,266,432
|
|
|
$
|
25,257,963
|
|
|
$
|
27,801,399
|
|
|
Operating income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global components (a)
|
|
$
|
379,053
|
|
|
$
|
494,587
|
|
|
$
|
1,177,906
|
|
|
$
|
1,518,423
|
|
|
Global ECS (b)
|
|
|
54,624
|
|
|
|
83,976
|
|
|
|
221,951
|
|
|
|
253,744
|
|
|
Corporate (c)
|
|
|
(93,594
|
)
|
|
|
(75,869
|
)
|
|
|
(245,372
|
)
|
|
|
(226,269
|
)
|
|
Consolidated
|
|
$
|
340,083
|
|
|
$
|
502,694
|
|
|
$
|
1,154,485
|
|
|
$
|
1,545,898
|
|
|
(a)
|
|
Global components operating income includes $62.2 million in settlement charges recorded as a reduction to operating expense for the third quarter and first nine months of 2023. Charges to increase the allowance for credit losses increased $16.8 million and $11.0 million for the third quarter and first nine months of 2023, respectively, relative to the year-earlier periods.
|
|
(b)
|
|
Global ECS operating income includes charges to increase the allowance for credit losses, which increased by $20.0 million and $26.8 million for the third quarter and first nine months of 2023, respectively, relative to the year-earlier periods.
|
|
(c)
|
|
Corporate operating loss includes restructuring, integration, and other charges of $31.4 million and $44.3 million for the third quarter and first nine months of 2023, respectively, and $3.6 million and $11.0 million for the third quarter and first nine months of 2022, respectively.
|
|
NON-GAAP SEGMENT RECONCILIATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
Nine Months Ended
|
|
|
|
September 30, 2023
|
|
October 1, 2022
|
|
September 30, 2023
|
|
October 1, 2022
|
|
Global components operating income, as reported
|
|
$
|
379,053
|
|
|
$
|
494,587
|
|
|
$
|
1,177,906
|
|
|
$
|
1,518,423
|
|
|
Intangible assets amortization expense
|
|
|
6,640
|
|
|
|
6,691
|
|
|
|
20,064
|
|
|
|
20,303
|
|
|
Global components non-GAAP operating income
|
|
$
|
385,693
|
|
|
$
|
501,278
|
|
|
$
|
1,197,970
|
|
|
$
|
1,538,726
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global ECS operating income, as reported
|
|
$
|
54,624
|
|
|
$
|
83,976
|
|
|
$
|
221,951
|
|
|
$
|
253,744
|
|
|
Intangible assets amortization expense
|
|
|
1,223
|
|
|
|
1,983
|
|
|
|
3,687
|
|
|
|
6,219
|
|
|
Global ECS non-GAAP operating income
|
|
$
|
55,847
|
|
|
$
|
85,959
|
|
|
$
|
225,638
|
|
|
$
|
259,963
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20231102315638/en/