8-K
Arrow Electronics, Inc. (ARW)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): May 2, 2024
ARROW ELECTRONICS, INC.
(Exact Name of Registrant as Specified in Charter)
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| New York | 1-4482 | 11-1806155 |
| (State or Other Jurisdiction | (Commission | (IRS Employer |
| of Incorporation) | File Number) | Identification No.) |
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|---|---|---|---|
| 9151 East Panorama Circle, | Centennial, | CO | 80112 |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (303) 824-4000
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
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|---|---|---|---|---|
| Title of each class | | Trading Symbol(s) | | Name of the exchange on which registered |
| Common Stock, $1 par value | | ARW | | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On May 2, 2024, the Registrant issued a press release announcing its first quarter 2024 earnings. A copy of the press release is attached hereto as an Exhibit (99.1).
The information in this Current Report on Form 8-K and Exhibit 99.1 attached hereto is being furnished and shall not be deemed “filed” for any purpose, including for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof, except as shall be expressly set forth by specific reference in such filing.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(d) EXHIBITS
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| Exhibit Number | Description | ||
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| 99.1 | | Earnings press release issued by Arrow Electronics, Inc., dated May 2, 2024. | |
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| 104 | | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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| | | ARROW ELECTRONICS, INC. | |
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| Date: | May 2, 2024 | By: | /s/ Carine Jean-Claude |
| | | Name: | Carine Jean-Claude |
| | | Title: | Senior Vice President, Chief Legal Officer and Secretary |
| <br><br><br><br><br><br> | | |
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| ARROW ELECTRONICS, INC.<br><br>9151 EAST PANORAMA CIRCLE<br><br>CENTENNIAL, CO 80112<br><br>303-824-4000 | | NEWS |
Exhibit 99.1
Arrow Electronics Reports First-Quarter 2024 Results
-- Sales of $6.9 billion in line with guidance --
-- First-Quarter Earnings Per Diluted Share of $1.53; Non-GAAP Earnings Per Diluted Share of $2.41 --
CENTENNIAL, Colo.--(BUSINESS WIRE)- May 2, 2024--Arrow Electronics, Inc. (NYSE:ARW) today announced financial results for its first quarter of 2024.
“We continued to execute well in a challenging market environment and delivered first-quarter sales in line with our expectations, with non-GAAP earnings per diluted share above the high end of our guidance range,” said Sean Kerins, Arrow’s president and chief executive officer.
“In the current environment, we’re focused on managing factors within our control including effective use of working capital, appropriate cost discipline, and protecting our strategic growth priorities,” said Mr. Kerins.
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| Arrow Consolidated | ||||||
| | Quarter Ended | |||||
| | | | March 30, | | | April 1, |
| (in millions except per share data) | | 2024 | | 2023 | ||
| Consolidated sales | | $ | 6,924 | | $ | 8,736 |
| Net income attributable to shareholders | | 84 | | 274 | ||
| Net income per diluted share | | | 1.53 | | | 4.60 |
| Non-GAAP net income attributable to shareholders ^(1)^ | | | 132 | | | 274 |
| Non-GAAP net income per diluted share | | | 2.41 | | | 4.60 |
In the first quarter of 2024, sales decreased 21 percent year over year. Changes in foreign currencies had an immaterial impact compared to the first quarter of 2023.
Global Components
“While the industry’s cyclical correction is ongoing, we are beginning to see improvement in leading indicators with customer inventory levels declining, our book-to-bill ratios for both semiconductors and IP&E improving in all regions and our backlog continuing to trend towards more normal levels. From an end-market perspective, we saw relative strength in transportation in the Americas, aerospace and defense in EMEA, and consumer verticals in Asia,” said Mr. Kerins.
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| Global Components | ||||||
| | Quarter Ended | |||||
| | | | March 30, | | | April 1, |
| (in millions) | | | 2024 | | 2023 | |
| Global components sales | | $ | 5,191 | | $ | 6,856 |
| Global components operating income, as reported | | 226 | | 418 | ||
| Global components non-GAAP operating income | | | 243 | | | 424 |
In the first quarter of 2024, global components sales decreased 24 percent year over year. Americas components first-quarter sales decreased 29 percent year over year. Europe components first-quarter sales decreased 26 percent year over year and decreased 27 percent year over year on a constant currency basis. Asia-Pacific components first-quarter sales decreased 18 percent year over year.
Global Enterprise Computing Solutions
“Our enterprise computing solutions business continues to navigate a mixed IT spending environment. In EMEA, we once again achieved year-on-year billings and gross profit dollar growth in the first quarter, and in North America, we continued to make progress in the market for IT-as-a-service. Looking forward we’re well-positioned to serve the growing demand for cloud and AI-driven solutions,” said Mr. Kerins.
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| <br><br><br><br><br><br> | | |
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| ARROW ELECTRONICS, INC.<br><br>9151 EAST PANORAMA CIRCLE<br><br>CENTENNIAL, CO 80112<br><br>303-824-4000 | | NEWS |
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| Global Enterprise Computing Solutions (ECS) | ||||||
| | Quarter Ended | |||||
| | | | March 30, | | | April 1, |
| (in millions) | | | 2024 | | 2023 | |
| Global ECS sales | | $ | 1,733 | | $ | 1,881 |
| Global ECS operating income, as reported | | 71 | | 81 | ||
| Global ECS non-GAAP operating income | | | 73 | | | 82 |
In the first quarter of 2024, global ECS sales decreased 8 percent year over year and decreased 9 percent year over year on a constant currency basis. Europe ECS first-quarter sales decreased 7 percent year over year and decreased 8 percent year over year on a constant currency basis. Americas ECS first-quarter sales decreased 9 percent year over year.
Other Financial Metrics
“In the first quarter, we generated $403 million in cash flow from operations,” said Raj Agrawal, Arrow’s senior vice president and chief financial officer. “Efficient working capital management enabled us to reduce inventory by $390 million in the first quarter and more than $1 billion over the past two quarters. Our strong cash flow generation continued to provide us with ample financial flexibility, and we also repurchased approximately $100 million of shares in the quarter.”
^1^ A reconciliation of non-GAAP financial measures to GAAP financial measures is presented in the reconciliation tables included herein.
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Second-Quarter 2024 Outlook
| ● | Consolidated sales of $6.20 billion to $6.80 billion, with global components sales of $4.60 billion to $5.00 billion, and global enterprise computing solutions sales of $1.60 billion to $1.80 billion | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ● | Net income per share on a diluted basis of $1.65 to $1.85, and non-GAAP net income per share on a diluted basis of $2.05 to $2.25 | |||||||||||||||
| --- | --- | |||||||||||||||
| ● | Average tax rate in the range of 23 to 25 percent | |||||||||||||||
| --- | --- | |||||||||||||||
| ● | Interest expense of approximately $75 million | |||||||||||||||
| --- | --- | |||||||||||||||
| ● | Changes in foreign currencies to decrease sales by approximately $51 million, and earnings per share on a diluted basis by $0.04 compared to the second quarter of 2023 | |||||||||||||||
| --- | --- | |||||||||||||||
| ● | Changes in foreign currencies to decrease quarter-over-quarter growth in sales by $29 million and earnings per share on a diluted basis by $0.04 compared to the first quarter of 2024 | |||||||||||||||
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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Second-Quarter 2024 GAAP to non-GAAP Outlook Reconciliation | ||||||||||||||||
| NON-GAAP SALES RECONCILIATION | ||||||||||||||||
| | Quarter Ended | | | Quarter Ended | | | ||||||||||
| | | June 29, | July 1, | | June 29, | March 30, | | | ||||||||
| (in billions) | 2024 | 2023 | % Change | 2024 | 2024 | % Change | ||||||||||
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| Global components sales, GAAP | | $ | 4.60 - 5.00 | | $ | 6.68 | (31%) - (25%) | | $ | 4.60 - 5.00 | | $ | 5.19 | (11%) - (4%) | ||
| Impact of changes in foreign currencies | | — | | (0.04) | | | — | | (0.02) | | ||||||
| Global components sales, constant currency | | $ | 4.60 - 5.00 | | $ | 6.64 | (31%) - (25%) | | $ | 4.60 - 5.00 | | $ | 5.17 | (11%) - (3%) | ||
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| Global ECS sales, GAAP | | $ | 1.60 - 1.80 | | $ | 1.83 | (13%) - (2%) | | $ | 1.60 - 1.80 | | $ | 1.73 | (8%) - 4% | ||
| Impact of changes in foreign currencies | | — | | (0.01) | | | — | | (0.01) | | ||||||
| Global ECS sales, constant currency | | $ | 1.60 - 1.80 | | $ | 1.82 | (12%) - (1%) | | $ | 1.60 - 1.80 | | $ | 1.72 | (7%) - 4% |
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|---|---|---|---|---|---|---|---|---|---|---|---|---|
| NON-GAAP EARNINGS RECONCILIATION | ||||||||||||
| | | | Intangible amortization | Restructuring & | | | ||||||
| | | Reported GAAP measure | expense | integration charges | | Non-GAAP measure | ||||||
| Net income per diluted share | | | $1.65 to $1.85 | | | $0.10 | | | $0.30 | | | $2.05 to $2.25 |
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 first-quarter 2024 financial results on May 2, 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/743613108. 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 second quarter of fiscal 2024 such as sales, net income per diluted share, non-GAAP net income per diluted share, average tax rate, average diluted
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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; breaches of security or privacy of business information; 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, gross profit, operating income (including by business segment), 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. 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; and impact of wind down to inventory. 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 Analysisof Financial Condition and Results of Operations**”** in the company's most recent Quarterly Report on Form 10-Q and the company's most recent Annual Report on Form 10-K.
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| Contacts | | |
| Investors: | | Brad Windbigler, |
| | | Treasurer and Vice President, Investor Relations |
| | | 720-654-9893 |
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| Media: | | John Hourigan, |
| | | Vice President, Public Affairs and Corporate Marketing |
| | | 303-824-4586 |
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ARROW ELECTRONICS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except per share data)
(Unaudited)
| | | | | | | |
|---|---|---|---|---|---|---|
| | | Quarter Ended | ||||
| | | March 30, 2024 | | April 1, 2023 | ||
| | | | | | | |
| Sales | | $ | 6,924,260 | | $ | 8,736,428 |
| Cost of sales | | 6,066,434 | | 7,622,606 | ||
| Gross profit | | 857,826 | | 1,113,822 | ||
| Operating expenses: | | | ||||
| Selling, general, and administrative | | 583,326 | | 642,431 | ||
| Depreciation and amortization | | 41,727 | | 46,679 | ||
| Restructuring, integration, and other | | 46,856 | | 2,560 | ||
| | | 671,909 | | 691,670 | ||
| Operating income | | 185,917 | | 422,152 | ||
| Equity in losses of affiliated companies | | (344) | | (80) | ||
| Gain on investments, net | | 98 | | 10,311 | ||
| Employee benefit plan expense, net | | (933) | | (853) | ||
| Interest and other financing expense, net | | (79,604) | | (79,658) | ||
| Income before income taxes | | 105,134 | | 351,872 | ||
| Provision for income taxes | | 22,036 | | 76,547 | ||
| Consolidated net income | | 83,098 | | 275,325 | ||
| Noncontrolling interests | | (503) | | 1,575 | ||
| Net income attributable to shareholders | | $ | 83,601 | | $ | 273,750 |
| Net income per share: | | | ||||
| Basic | | $ | 1.54 | | $ | 4.66 |
| Diluted | | $ | 1.53 | | $ | 4.60 |
| Weighted-average shares outstanding: | | | ||||
| Basic | | 54,251 | | 58,731 | ||
| Diluted | | 54,815 | | 59,479 |
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ARROW ELECTRONICS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands except par value)
(Unaudited)
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|---|---|---|---|---|---|---|
| | March 30, 2024 | December 31, 2023 | ||||
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| ASSETS | | | ||||
| Current assets: | | | ||||
| Cash and cash equivalents | | $ | 242,810 | | $ | 218,053 |
| Accounts receivable, net | | 11,062,608 | | 12,238,073 | ||
| Inventories | | 4,797,053 | | 5,187,225 | ||
| Other current assets | | 798,591 | | 684,126 | ||
| Total current assets | | 16,901,062 | | 18,327,477 | ||
| Property, plant, and equipment, at cost: | | | ||||
| Land | | 5,691 | | 5,691 | ||
| Buildings and improvements | | 196,291 | | 195,579 | ||
| Machinery and equipment | | 1,624,409 | | 1,632,606 | ||
| | | 1,826,391 | | 1,833,876 | ||
| Less: Accumulated depreciation and amortization | | (1,309,303) | | (1,303,136) | ||
| Property, plant, and equipment, net | | 517,088 | | 530,740 | ||
| Investments in affiliated companies | | 58,868 | | 62,741 | ||
| Intangible assets, net | | 119,274 | | 127,440 | ||
| Goodwill | | 2,054,536 | | 2,050,426 | ||
| Other assets | | 612,048 | | 627,344 | ||
| Total assets | | $ | 20,262,876 | | $ | 21,726,168 |
| LIABILITIES AND EQUITY | | | ||||
| Current liabilities: | | | ||||
| Accounts payable | | $ | 8,940,313 | | $ | 10,070,015 |
| Accrued expenses | | 1,474,605 | | 1,463,915 | ||
| Short-term borrowings, including current portion of long-term debt | | 945,698 | | 1,653,954 | ||
| Total current liabilities | | 11,360,616 | | 13,187,884 | ||
| Long-term debt | | 2,632,250 | | 2,153,553 | ||
| Other liabilities | | 500,672 | | 507,424 | ||
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| Equity: | | | ||||
| Shareholders’ equity: | | | ||||
| Common stock, par value $1: | | | ||||
| Authorized - 160,000 shares in both 2024 and 2023 | | | | |||
| Issued - 57,955 and 57,691 shares in 2024 and 2023 | | 57,955 | | 57,691 | ||
| Capital in excess of par value | | 565,166 | | 553,340 | ||
| Treasury stock (4,725 and 3,880 shares in 2024 and 2023, respectively), at cost | | (405,663) | | (297,745) | ||
| Retained earnings | | 5,873,818 | | 5,790,217 | ||
| Accumulated other comprehensive loss | | (392,130) | | (298,039) | ||
| Total shareholders’ equity | | 5,699,146 | | 5,805,464 | ||
| Noncontrolling interests | | 70,192 | | 71,843 | ||
| Total equity | | 5,769,338 | | 5,877,307 | ||
| Total liabilities and equity | | $ | 20,262,876 | | $ | 21,726,168 |
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ARROW ELECTRONICS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
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|---|---|---|---|---|---|---|
| | | Quarter Ended | ||||
| | March 30, 2024 | April 1, 2023 | ||||
| Cash flows from operating activities: | | | ||||
| Consolidated net income | | $ | 83,098 | | $ | 275,325 |
| Adjustments to reconcile consolidated net income to net cash provided by operations: | | | ||||
| Depreciation and amortization | | 41,727 | | 46,679 | ||
| Amortization of stock-based compensation | | 13,447 | | 19,497 | ||
| Equity in losses of affiliated companies | | 344 | | 80 | ||
| Deferred income taxes | | (2,801) | | (7,530) | ||
| Loss (gain) on investments, net | | 13 | | (10,311) | ||
| Other | | 1,189 | | 1,321 | ||
| Change in assets and liabilities, net of effects of acquired businesses: | | | | | ||
| Accounts receivable, net | | 1,057,676 | | 1,701,889 | ||
| Inventories | | 362,813 | | (199,521) | ||
| Accounts payable | | (1,077,786) | | (1,504,701) | ||
| Accrued expenses | | 21,053 | | (132,316) | ||
| Other assets and liabilities | | (97,563) | | 33,392 | ||
| Net cash provided by operating activities | | 403,210 | | 223,804 | ||
| Cash flows from investing activities: | | | | | ||
| Acquisition of property, plant, and equipment | | (29,535) | | (20,114) | ||
| Other | | | 5,139 | | | 10,867 |
| Net cash used for investing activities | | (24,396) | | (9,247) | ||
| Cash flows from financing activities: | | | | | | |
| Change in short-term and other borrowings | | (709,675) | | (146,050) | ||
| Proceeds from long-term bank borrowings, net | | 477,032 | | 34,360 | ||
| Net proceeds from note offering | | | — | | | 498,600 |
| Redemption of notes | | | — | | | (300,000) |
| Proceeds from exercise of stock options | | 2,929 | | 5,934 | ||
| Repurchases of common stock | | (87,948) | | (303,801) | ||
| Net cash used for financing activities | | (317,662) | | (210,957) | ||
| Effect of exchange rate changes on cash | | (36,395) | | 25,039 | ||
| Net increase in cash and cash equivalents | | 24,757 | | 28,639 | ||
| Cash and cash equivalents at beginning of period | | 218,053 | | 176,915 | ||
| Cash and cash equivalents at end of period | | $ | 242,810 | | $ | 205,554 |
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ARROW ELECTRONICS, INC.
NON-GAAP SALES RECONCILIATION
(In thousands)
(Unaudited)
| | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|
| | Quarter Ended | ||||||||
| | March 30, 2024 | April 1, 2023 | % Change | ||||||
| | | | | | | | | | |
| Consolidated sales, as reported | | $ | 6,924,260 | | $ | 8,736,428 | (20.7) | % | |
| Impact of changes in foreign currencies | | — | | 9,370 | | ||||
| Consolidated sales, constant currency | | $ | 6,924,260 | | $ | 8,745,798 | (20.8) | % | |
| | | | | | | | | | |
| Global components sales, as reported | | $ | 5,191,417 | | $ | 6,855,793 | (24.3) | % | |
| Impact of changes in foreign currencies | | — | | (4,163) | | ||||
| Global components sales, constant currency | | $ | 5,191,417 | | $ | 6,851,630 | (24.2) | % | |
| | | | | | | | | | |
| Americas components sales, as reported | | $ | 1,596,692 | | $ | 2,233,453 | (28.5) | % | |
| Impact of changes in foreign currencies | | — | | (672) | | ||||
| Americas components sales, constant currency | | $ | 1,596,692 | | $ | 2,232,781 | (28.5) | % | |
| | | | | | | | | | |
| Asia components sales, as reported | | $ | 1,938,218 | | $ | 2,376,195 | (18.4) | % | |
| Impact of changes in foreign currencies | | — | | (24,636) | | ||||
| Asia components sales, constant currency | | $ | 1,938,218 | | $ | 2,351,559 | (17.6) | % | |
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| Europe components sales, as reported | | $ | 1,656,507 | | $ | 2,246,145 | (26.3) | % | |
| Impact of changes in foreign currencies | | — | | 21,145 | | ||||
| Europe components sales, constant currency | | $ | 1,656,507 | | $ | 2,267,290 | (26.9) | % | |
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| Global ECS sales, as reported | | $ | 1,732,843 | | $ | 1,880,635 | (7.9) | % | |
| Impact of changes in foreign currencies | | — | | 13,533 | | ||||
| Global ECS sales, constant currency | | $ | 1,732,843 | | $ | 1,894,168 | (8.5) | % | |
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| Americas ECS sales, as reported | | $ | 907,748 | | $ | 998,114 | (9.1) | % | |
| Impact of changes in foreign currencies | | — | | (830) | | ||||
| Americas ECS sales, constant currency | | $ | 907,748 | | $ | 997,284 | (9.0) | % | |
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| Europe ECS sales, as reported | | $ | 825,095 | | $ | 882,521 | (6.5) | % | |
| Impact of changes in foreign currencies | | — | | 14,363 | | ||||
| Europe ECS sales, constant currency | | $ | 825,095 | | $ | 896,884 | (8.0) | % |
| | | |
|---|---|---|
|
| 8 |
ARROW ELECTRONICS, INC.
NON-GAAP EARNINGS RECONCILIATION
(In thousands except per share data)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Three months ended March 30, 2024 | |||||||||||||||||||
| | Reported | Intangible | Restructuring, | | | | | | | ||||||||||
| | | GAAP | | amortization | | Integration | | Impact of | | | | | Non-GAAP | ||||||
| | | measure | | expense | | and other | | Wind Down^(1)^ | | Other^(2)^ | | measure | |||||||
| Gross Profit | | $ | 857,826 | | $ | — | | $ | — | | $ | 10,459 | | $ | — | | $ | 868,285 | |
| Operating income | | | 185,917 | | | 7,546 | | | 46,856 | | | 10,459 | | | — | | | 250,778 | |
| Income before income taxes | | 105,134 | | 7,546 | | 46,856 | | 10,459 | | (98) | | 169,897 | | ||||||
| Provision for income taxes | | 22,036 | | 1,879 | | 12,014 | | 2,502 | | (24) | | 38,407 | | ||||||
| Consolidated net income | | 83,098 | | 5,667 | | 34,842 | | 7,957 | | (74) | | 131,490 | | ||||||
| Noncontrolling interests | | (503) | | 135 | | — | | — | | — | | (368) | | ||||||
| Net income attributable to shareholders | | $ | 83,601 | | $ | 5,532 | | $ | 34,842 | | $ | 7,957 | | $ | (74) | | $ | 131,858 | |
| Net income per diluted share ^(3)^ | | $ | 1.53 | | $ | 0.10 | | $ | 0.64 | | $ | 0.15 | | $ | — | | $ | 2.41 | |
| Effective tax rate ^(4)^ | | 21.0 | % | | | | | | | | 22.6 | % |
1
| | | | | | | | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Three months ended April 1, 2023 | |||||||||||||||||||
| | Reported | Intangible | Restructuring, | | | | | | | ||||||||||
| | | GAAP | | amortization | | Integration | | Impact of | | | | | Non-GAAP | ||||||
| | | measure | | expense | | and other | | Wind Down | | Other^(2)^ | | measure | |||||||
| Gross Profit | | $ | 1,113,822 | | $ | — | | $ | — | | $ | — | | $ | — | | $ | 1,113,822 | |
| Operating income | | | 422,152 | | | 7,980 | | | 2,560 | | | — | | | — | | | 432,692 | |
| Income before income taxes | | 351,872 | | 7,980 | | 2,560 | | — | | (10,311) | | 352,101 | | ||||||
| Provision for income taxes | | 76,547 | | 2,010 | | 720 | | — | | (2,471) | | 76,806 | | ||||||
| Consolidated net income | | 275,325 | | 5,970 | | 1,840 | | — | | (7,840) | | 275,295 | | ||||||
| Noncontrolling interests | | 1,575 | | 134 | | — | | — | | — | | 1,709 | | ||||||
| Net income attributable to shareholders | | $ | 273,750 | | $ | 5,836 | | $ | 1,840 | | $ | — | | $ | (7,840) | | $ | 273,586 | |
| Net income per diluted share ^(3)^ | | $ | 4.60 | | $ | 0.10 | | $ | 0.03 | | $ | — | | $ | (0.13) | | $ | 4.60 | |
| Effective tax rate ^(4)^ | | 21.8 | % | | | | | | 21.8 | % |
(1) Includes write downs of inventory related to the wind down of a business.
(2) Other includes gain 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.
| | | |
|---|---|---|
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| 9 |
ARROW ELECTRONICS, INC.
SEGMENT INFORMATION
(In thousands)
(Unaudited)
| | | | | | | |
|---|---|---|---|---|---|---|
| | Quarter Ended | |||||
| | March 30, 2024 | April 1, 2023 | ||||
| Sales: | | | | | ||
| Global components | | $ | 5,191,417 | | $ | 6,855,793 |
| Global ECS | | 1,732,843 | | 1,880,635 | ||
| Consolidated | | $ | 6,924,260 | | $ | 8,736,428 |
| Operating income (loss): | | | ||||
| Global components (a) | | $ | 225,562 | | $ | 417,539 |
| Global ECS | | 71,459 | | 81,099 | ||
| Corporate (b) | | (111,104) | | (76,486) | ||
| Consolidated | | $ | 185,917 | | $ | 422,152 |
| (a) | Global components operating income includes charges of $10.5 million in inventory write downs related to the wind down of a business. |
|---|---|
| (b) | Corporate operating income (loss) includes restructuring, integration, and other charges of $46.9 million and $2.6 million for the first quarter of 2024 and 2023, respectively. Restructuring, integration, and other charges for the first quarter of 2024 include charges of $42.8 million related to termination of personnel as a part of operating expense reduction initiatives. |
| --- | --- |
NON-GAAP SEGMENT RECONCILIATION
| | | | | | | |
|---|---|---|---|---|---|---|
| | Quarter Ended | |||||
| | March 30, 2024 | April 1, 2023 | ||||
| Global components operating income, as reported | | $ | 225,562 | | $ | 417,539 |
| Intangible assets amortization expense | | 6,488 | | 6,745 | ||
| Impact of wind down to inventory | | 10,459 | | — | ||
| Global components non-GAAP operating income | | $ | 242,509 | | $ | 424,284 |
| | | | | | | |
| Global ECS operating income, as reported | | $ | 71,459 | | $ | 81,099 |
| Intangible assets amortization expense | | 1,058 | | 1,235 | ||
| Global ECS non-GAAP operating income | | $ | 72,517 | | $ | 82,334 |
14
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| 10 |