Arrow Electronics Reports Second-Quarter 2024 Results

View all news Arrow Electronics Reports Second-Quarter 2024 Results August 01, 2024 -- Sales of $6.9 billion, exceeding guidance -- -- Second-Quarter Earnings Per Diluted Share of $2.01; Non-GAAP Earnings Per Diluted Share of $2.78 -- Arrow Electronics, Inc. (NYSE:ARW) today announced financial results for its second quarter of 2024. “We continued to execute well in an evolving market environment, delivering second-quarter sales and non-GAAP earnings per diluted share comfortably ahead of our guided ranges,” said Sean Kerins, Arrow’s president and chief executive officer. “In addition, our value-added offerings in global components as well as better momentum in enterprise computing solutions contributed to our overall operating margin stability in the quarter,” said Mr. Kerins. Arrow Consolidated Quarter Ended Six Months Ended June 29, July 1, June 29, July 1, (in millions except per share data) 2024 2023 2024 2023 Consolidated sales $ 6,893 $ 8,515 $ 13,817 $ 17,251 Net income attributable to shareholders 109 237 192 510 Net income per diluted share 2.01 4.12 3.53 8.74 Non-GAAP net income attributable to shareholders (1) 150 251 282 524 Non-GAAP net income per diluted share 2.78 4.37 5.18 8.98 Both GAAP and non-GAAP earnings per share in the second quarter of 2024 include a $0.29 benefit and a $20 million operating income benefit related to the collection of certain aged receivables related to one customer in the ECS segment. In the second quarter of 2024, sales decreased 19 percent year over year. Changes in foreign currencies had a negative impact on growth of approximately $52.2 million on sales and $0.05 on earnings per share on a diluted basis compared to the second quarter of 2023. Global Components “Across many of the segments in which we compete, we’re seeing signs of incremental improvement in leading indicators, with book-to-bill ratios advancing across all regions and bookings growing sequentially. Though the automotive and broader industrial markets are still experiencing softness, we now believe we’re in the later stages of the industry’s cyclical correction,” said Mr. Kerins. Global Components Quarter Ended Six Months Ended June 29, July 1, June 29, July 1, (in millions) 2024 2023 2024 2023 Global components sales $ 5,032 $ 6,683 $ 10,223 $ 13,539 Global components operating income, as reported 210 381 436 799 Global components non-GAAP operating income 218 388 461 812 In the second quarter of 2024, global components sales decreased 25 percent year over year. Americas components second-quarter sales decreased 24 percent year over year. EMEA components second-quarter sales decreased 33 percent year over year and decreased 32 percent year over year on a constant currency basis. Asia-Pacific components second-quarter sales decreased 18 percent year over year and decreased 17 percent year over year on a constant currency basis. Global Enterprise Computing Solutions “Our enterprise computing solutions business delivered year-over-year billings growth as we continued to capitalize on the market’s transition to IT as a service. We benefited from another solid quarter in EMEA along with improving activity levels in North America,” said Mr. Kerins. Global Enterprise Computing Solutions (ECS) Quarter Ended Six Months Ended June 29, July 1, June 29, July 1, (in millions) 2024 2023 2024 2023 Global ECS sales $ 1,861 $ 1,832 $ 3,594 $ 3,712 Global ECS operating income, as reported 103 86 174 167 Global ECS non-GAAP operating income 104 87 176 170 In the second quarter of 2024, global ECS sales increased 2 percent year over year. EMEA ECS second-quarter sales increased 8 percent year over year and increased 9 percent year over year on a constant currency basis. Americas ECS second-quarter sales decreased 4 percent year over year and decreased 3 percent year over year on a constant currency basis. Other Financial Metrics “In the second quarter, we managed our working capital in line with market conditions, reducing inventory levels by approximately $140 million, or $1.2 billion over the last nine months,” said Raj Agrawal, Arrow’s senior vice president and chief financial officer. “We also generated $320 million in cash flow from operations, providing us capital allocation flexibility, and enabling $50 million in share repurchases during the quarter.” 1 A reconciliation of non-GAAP financial measures to GAAP financial measures is presented in the reconciliation tables included herein. Third-Quarter 2024 Outlook Consolidated sales of $6.37 billion to $6.97 billion, with global components sales of $4.70 billion to $5.10 billion, and global enterprise computing solutions sales of $1.67 billion to $1.87 billion Net income per share on a diluted basis of $1.70 to $1.90, and non-GAAP net income per share on a diluted basis of $2.10 to $2.30 Average tax rate in the range of 23 to 25 percent Interest expense of approximately $70 million Changes in foreign currencies to increase sales by approximately $7 million, and to have no impact on earnings per share on a diluted basis compared to the third quarter of 2023 Changes in foreign currencies to increase quarter-over-quarter growth in sales by $30 million and earnings per share on a diluted basis by $0.02 compared to the second quarter of 2024 Third-Quarter 2024 GAAP to non-GAAP Outlook Reconciliation NON-GAAP SALES RECONCILIATION Quarter Ended Quarter Ended September 28, September 30, September 28, June 29, (in billions) 2024 2023 % Change 2024 2024 % Change Global components sales, GAAP $ 4.70 - 5.10 $ 6.25 (25%) - (18%) $ 4.70 - 5.10 $ 5.03 (7%) - 1% Impact of changes in foreign currencies — — — 0.02 Global components sales, constant currency $ 4.70 - 5.10 $ 6.25 (25%) - (18%) $ 4.70 - 5.10 $ 5.05 (7%) - 1% Global ECS sales, GAAP $ 1.67 - 1.87 $ 1.76 (5%) - 6% $ 1.67 - 1.87 $ 1.86 (10%) - 0% Impact of changes in foreign currencies — 0.01 — 0.01 Global ECS sales, constant currency $ 1.67 - 1.87 $ 1.77 (6%) - 6% $ 1.67 - 1.87 $ 1.87 (11%) - 0% NON-GAAP EARNINGS RECONCILIATION Intangible amortization Restructuring & Reported GAAP measure expense integration charges Non-GAAP measure Net income per diluted share $1.70 to $1.90 $0.10 $0.30 $2.10 to $2.30 Earnings Presentation Please refer to the earnings presentation, which can be found at investor.arrow.com , as a supplement to the company’s earnings release. The company uses its website as a tool to disclose important information about the company and to comply with its disclosure obligations under Regulation Fair Disclosure. Webcast and Conference Call Information Arrow Electronics will host a conference call to discuss second-quarter 2024 financial results on August 1, 2024, at 1:00 PM ET. A live webcast of the conference call will be available via the events section of investor.arrow.com or by accessing the webcast link directly at https://events.q4inc.com/attendee/244342075 . Shortly after the conclusion of the conference call, a webcast replay will be available on the Arrow website for one year. About Arrow Electronics Arrow Electronics guides innovation forward for thousands of leading technology manufacturers and service providers. With 2023 sales of $33 billion, Arrow develops technology solutions that help improve business and daily life. Learn more at arrow.com . Information Relating to Forward-Looking Statements This press release includes “forward-looking” statements, as the term is defined under the federal securities laws, including but not limited to statements regarding: Arrow’s future financial performance, including its outlook on financial results for the third quarter of fiscal 2024 such as sales, net income per diluted share, non-GAAP net income per diluted share, average tax rate, interest and other expense, impact to sales due to changes in foreign currencies, intangible amortization expense per diluted share, restructuring & integration charges per diluted share, and expectations regarding market demand and conditions and shareholder returns. These and other forward-looking statements are subject to numerous assumptions, risks, and uncertainties, which could cause actual results or facts to differ materially from such statements for a variety of reasons, including, but not limited to: unfavorable economic conditions; disruptions or inefficiencies in the supply chain; political instability and changes; impacts of military conflict and sanctions; industry conditions; changes in product supply, pricing and customer demand; competition; other vagaries in the global components and the global ECS markets; deteriorating economic conditions, including economic recession, inflation, tax rates, foreign currency exchange rates, or the availability of capital; the effects of natural or man-made catastrophic events; changes in relationships with key suppliers; increased profit margin pressure; changes in legal and regulatory matters; non-compliance with certain regulations, such as export, antitrust, and anti-corruption laws; foreign tax and other loss contingencies; breaches of security or privacy of business information and information system failures, including related to current or future implementations, integrations and upgrades; outbreaks, epidemics, pandemics, or public health crises; and the company's ability to generate positive cash flow. For a further discussion of these and other factors that could cause the company's future results to differ materially from any forward-looking statements, see the section entitled “Risk Factors” in the company's most recent Quarterly Report on Form 10-Q and the company's most recent Annual Report on Form 10-K, as well as in other filings the company makes with the Securities and Exchange Commission. Shareholders and other readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. The company undertakes no obligation to update publicly or revise any of the forward-looking statements. Certain Non-GAAP Financial Information In addition to disclosing financial results that are determined in accordance with accounting principles generally accepted in the United States (“GAAP”), the company also provides certain non-GAAP financial information. The company provides the following non-GAAP metrics: sales, operating income (including by business segment), income before income taxes, net income attributable to shareholders, effective tax rate and net income per share on a diluted basis. The foregoing non-GAAP measures are adjusted by certain of the following, as applicable: impact of changes in foreign currencies (referred to as “changes in foreign currencies” or “on a constant currency basis”) by re-translating prior-period results at current period foreign exchange rates; identifiable intangible asset amortization, restructuring, integration, and other charges; net gains and losses on investments; impact of wind down to inventory; loss on extinguishment of debt; and impact of tax legislation changes. Management believes that providing this additional information is useful to the reader to better assess and understand the company’s operating performance and future prospects in the same manner as management, especially when comparing results with previous periods. Management typically monitors the business as adjusted for these items, in addition to GAAP results, to understand and compare operating results across accounting periods, for internal budgeting purposes, for short- and long-term operating plans, and to evaluate the company's financial performance. However, analysis of results on a non-GAAP basis should be used as a complement to, in conjunction with, and not as a substitute for, data presented in accordance with GAAP. For further discussion of our non-GAAP measures and related adjustments, refer to the section entitled “Management’s Discussion and Analysi s of 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. ARROW ELECTRONICS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands except per share data) (Unaudited) Quarter Ended Six Months Ended June 29, 2024 July 1, 2023 June 29, 2024 July 1, 2023 Sales $ 6,892,868 $ 8,514,516 $ 13,817,128 $ 17,250,944 Cost of sales 6,046,424 7,448,467 12,112,858 15,071,073 Gross profit 846,444 1,066,049 1,704,270 2,179,871 Operating expenses: Selling, general, and administrative 552,595 617,202 1,135,921 1,259,633 Depreciation and amortization 41,037 46,264 82,764 92,943 Restructuring, integration, and other 40,537 10,333 87,393 12,893 634,169 673,799 1,306,078 1,365,469 Operating income 212,275 392,250 398,192 814,402 Equity in earnings of affiliated companies 1,254 3,061 910 2,981 (Loss) gain on investments, net (4,615 ) 497 (4,517 ) 10,808 Loss on extinguishment of debt (1,657 ) — (1,657 ) — Employee benefit plan expense, net (980 ) (803 ) (1,913 ) (1,656 ) Interest and other financing expense, net (66,891 ) (84,834 ) (146,495 ) (164,492 ) Income before income taxes 139,386 310,171 244,520 662,043 Provision for income taxes 29,762 72,380 51,798 148,927 Consolidated net income 109,624 237,791 192,722 513,116 Noncontrolling interests 926 1,232 423 2,807 Net income attributable to shareholders $ 108,698 $ 236,559 $ 192,299 $ 510,309 Net income per share: Basic $ 2.03 $ 4.17 $ 3.56 $ 8.84 Diluted $ 2.01 $ 4.12 $ 3.53 $ 8.74 Weighted-average shares outstanding: Basic 53,640 56,720 53,944 57,726 Diluted 54,181 57,355 54,496 58,409 ARROW ELECTRONICS, INC. CONSOLIDATED BALANCE SHEETS (In thousands except par value) (Unaudited) June 29, 2024 December 31, 2023 ASSETS Current assets: Cash and cash equivalents $ 213,009 $ 218,053 Accounts receivable, net 10,886,501 12,238,073 Inventories 4,654,793 5,187,225 Other current assets 1,010,942 684,126 Total current assets 16,765,245 18,327,477 Property, plant, and equipment, at cost: Land 5,691 5,691 Buildings and improvements 190,109 195,579 Machinery and equipment 1,623,869 1,632,606 1,819,669 1,833,876 Less: Accumulated depreciation and amortization (1,319,945 ) (1,303,136 ) Property, plant, and equipment, net 499,724 530,740 Investments in affiliated companies 60,400 62,741 Intangible assets, net 112,470 127,440 Goodwill 2,052,701 2,050,426 Other assets 617,226 627,344 Total assets $ 20,107,766 $ 21,726,168 LIABILITIES AND EQUITY Current liabilities: Accounts payable $ 8,770,862 $ 10,070,015 Accrued expenses 1,687,273 1,463,915 Short-term borrowings, including current portion of long-term debt 860,538 1,653,954 Total current liabilities 11,318,673 13,187,884 Long-term debt 2,479,313 2,153,553 Other liabilities 495,730 507,424 Equity: Shareholders’ equity: Common stock, par value $1: Authorized - 160,000 shares in both 2024 and 2023 Issued - 58,046 and 57,691 shares in 2024 and 2023 58,046 57,691 Capital in excess of par value 574,530 553,340 Treasury stock (5,101 and 3,880 shares in 2024 and 2023, respectively), at cost (456,123 ) (297,745 ) Retained earnings 5,982,516 5,790,217 Accumulated other comprehensive loss (415,666 ) (298,039 ) Total shareholders’ equity 5,743,303 5,805,464 Noncontrolling interests 70,747 71,843 Total equity 5,814,050 5,877,307 Total liabilities and equity $ 20,107,766 $ 21,726,168 ARROW ELECTRONICS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) Quarter Ended June 29, 2024 July 1, 2023 Cash flows from operating activities: Consolidated net income $ 109,624 $ 237,791 Adjustments to reconcile consolidated net income to net cash provided by (used for) operations: Depreciation and amortization 41,037 46,264 Amortization of stock-based compensation 8,253 8,852 Equity in earnings of affiliated companies (1,254 ) (3,061 ) Deferred income taxes (4,597 ) (25,869 ) Loss on extinguishment of debt 1,657 — Loss (gain) on investments, net 4,750 (497 ) Other 3,675 1,665 Change in assets and liabilities, net of effects of acquired businesses: Accounts receivable, net 155,886 (377,117 ) Inventories 130,661 58,148 Accounts payable (160,026 ) (8,558 ) Accrued expenses 251,990 (83,267 ) Other assets and liabilities (221,475 ) 18,845 Net cash provided by (used for) operating activities 320,181 (126,804 ) Cash flows from investing activities: Acquisition of property, plant, and equipment (22,101 ) (16,991 ) Other 1,313 95 Net cash used for investing activities (20,788 ) (16,896 ) Cash flows from financing activities: Change in short-term and other borrowings (434,845 ) 344,389 Proceeds from (repayments of) long-term bank borrowings, net 196,575 (43,786 ) Net proceeds from note offering 494,678 (2,332 ) Redemption of notes (500,000 ) — Proceeds from exercise of stock options 1,839 10,447 Repurchases of common stock (75,353 ) (212,416 ) Settlement of forward-starting interest rate swap — 56,711 Other (141 ) (142 ) Net cash (used for) provided by financing activities (317,247 ) 152,871 Effect of exchange rate changes on cash (11,947 ) 25,657 Net (decrease) increase in cash and cash equivalents (29,801 ) 34,828 Cash and cash equivalents at beginning of period 242,810 205,554 Cash and cash equivalents at end of period $ 213,009 $ 240,382 ARROW ELECTRONICS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) Six Months Ended June 29, 2024 July 1, 2023 Cash flows from operating activities: Consolidated net income $ 192,722 $ 513,116 Adjustments to reconcile consolidated net income to net cash provided by operations: Depreciation and amortization 82,764 92,943 Amortization of stock-based compensation 21,700 28,349 Equity in earnings of affiliated companies (910 ) (2,981 ) Deferred income taxes (7,398 ) (33,399 ) Loss on extinguishment of debt 1,657 — Loss (gain) on investments, net 4,763 (10,808 ) Other 4,864 2,986 Change in assets and liabilities, net of effects of acquired businesses: Accounts receivable, net 1,213,562 1,324,772 Inventories 493,474 (141,373 ) Accounts payable (1,237,812 ) (1,513,259 ) Accrued expenses 273,043 (215,583 ) Other assets and liabilities (319,038 ) 52,237 Net cash provided by operating activities 723,391 97,000 Cash flows from investing activities: Acquisition of property, plant, and equipment (51,636 ) (37,105 ) Other 6,452 10,962 Net cash used for investing activities (45,184 ) (26,143 ) Cash flows from financing activities: Change in short-term and other borrowings (1,144,520 ) 198,339 Proceeds from (repayments of) long-term bank borrowings, net 673,607 (9,426 ) Net proceeds from note offering 494,678 496,268 Redemption of notes (500,000 ) (300,000 ) Proceeds from exercise of stock options 4,768 16,381 Repurchases of common stock (163,301 ) (516,217 ) Settlement of forward-starting interest rate swap — 56,711 Other (141 ) (142 ) Net cash used for financing activities (634,909 ) (58,086 ) Effect of exchange rate changes on cash (48,342 ) 50,696 Net (decrease) increase in cash and cash equivalents (5,044 ) 63,467 Cash and cash equivalents at beginning of period 218,053 176,915 Cash and cash equivalents at end of period $ 213,009 $ 240,382 ARROW ELECTRONICS, INC. NON-GAAP SALES RECONCILIATION (In thousands) (Unaudited) Quarter Ended June 29, 2024 July 1, 2023 % Change Consolidated sales, as reported $ 6,892,868 $ 8,514,516 (19.0 ) % Impact of changes in foreign currencies — (52,232 ) Consolidated sales, constant currency $ 6,892,868 $ 8,462,284 (18.5 ) % Global components sales, as reported $ 5,032,031 $ 6,682,882 (24.7 ) % Impact of changes in foreign currencies — (44,642 ) Global components sales, constant currency $ 5,032,031 $ 6,638,240 (24.2 ) % Americas components sales, as reported $ 1,572,840 $ 2,066,562 (23.9 ) % Impact of changes in foreign currencies — (1,513 ) Americas components sales, constant currency $ 1,572,840 $ 2,065,049 (23.8 ) % Asia components sales, as reported $ 2,019,697 $ 2,462,841 (18.0 ) % Impact of changes in foreign currencies — (17,330 ) Asia components sales, constant currency $ 2,019,697 $ 2,445,511 (17.4 ) % EMEA components sales, as reported $ 1,439,494 $ 2,153,479 (33.2 ) % Impact of changes in foreign currencies — (25,799 ) EMEA components sales, constant currency $ 1,439,494 $ 2,127,680 (32.3 ) % Global ECS sales, as reported $ 1,860,837 $ 1,831,634 1.6 % Impact of changes in foreign currencies — (7,590 ) Global ECS sales, constant currency $ 1,860,837 $ 1,824,044 2.0 % Americas ECS sales, as reported $ 964,070 $ 1,000,506 (3.6 ) % Impact of changes in foreign currencies — (1,709 ) Americas ECS sales, constant currency $ 964,070 $ 998,797 (3.5 ) % EMEA ECS sales, as reported $ 896,767 $ 831,128 7.9 % Impact of changes in foreign currencies — (5,881 ) EMEA ECS sales, constant currency $ 896,767 $ 825,247 8.7 % ARROW ELECTRONICS, INC. NON-GAAP SALES RECONCILIATION (In thousands) (Unaudited) Six Months Ended June 29, 2024 July 1, 2023 % Change Consolidated sales, as reported $ 13,817,128 $ 17,250,944 (19.9 ) % Impact of changes in foreign currencies — (42,862 ) Consolidated sales, constant currency $ 13,817,128 $ 17,208,082 (19.7 ) % Global components sales, as reported $ 10,223,448 $ 13,538,675 (24.5 ) % Impact of changes in foreign currencies — (48,805 ) Global components sales, constant currency $ 10,223,448 $ 13,489,870 (24.2 ) % Americas components sales, as reported $ 3,169,532 $ 4,300,015 (26.3 ) % Impact of changes in foreign currencies — (2,185 ) Americas components sales, constant currency $ 3,169,532 $ 4,297,830 (26.3 ) % Asia components sales, as reported $ 3,957,915 $ 4,839,036 (18.2 ) % Impact of changes in foreign currencies — (41,966 ) Asia components sales, constant currency $ 3,957,915 $ 4,797,070 (17.5 ) % EMEA components sales, as reported $ 3,096,001 $ 4,399,624 (29.6 ) % Impact of changes in foreign currencies — (4,654 ) EMEA components sales, constant currency $ 3,096,001 $ 4,394,970 (29.6 ) % Global ECS sales, as reported $ 3,593,680 $ 3,712,269 (3.2 ) % Impact of changes in foreign currencies — 5,943 Global ECS sales, constant currency $ 3,593,680 $ 3,718,212 (3.3 ) % Americas ECS sales, as reported $ 1,871,818 $ 1,998,620 (6.3 ) % Impact of changes in foreign currencies — (2,539 ) Americas ECS sales, constant currency $ 1,871,818 $ 1,996,081 (6.2 ) % EMEA ECS sales, as reported $ 1,721,862 $ 1,713,649 0.5 % Impact of changes in foreign currencies — 8,482 EMEA ECS sales, constant currency $ 1,721,862 $ 1,722,131 (0.0 ) % ARROW ELECTRONICS, INC. NON-GAAP EARNINGS RECONCILIATION (In thousands except per share data) (Unaudited) Three months ended June 29, 2024 Reported Intangible Restructuring, Impact of Non GAAP amortization Integration Wind recurring Non-GAAP measure expense and other Down (1) tax items Other (2) measure Operating income $ 212,275 $ 7,456 $ 40,537 $ 1,627 $ — $ — 261,895 Income before income taxes 139,386 7,456 40,537 1,627 — 6,272 195,278 Net income attributable to shareholders $ 108,698 $ 5,457 $ 30,323 $ 1,238 $ — $ 4,766 $ 150,482 Net income per diluted share (4) $ 2.01 $ 0.10 $ 0.56 $ 0.02 $ — $ 0.09 $ 2.78 Effective tax rate (5) 21.4 % 22.4 % Three months ended July 1, 2023 Reported Intangible Restructuring, Impact of Non GAAP amortization Integration Wind recurring Non-GAAP measure expense and other Down (1) tax items Other (3) measure Operating income $ 392,250 $ 7,908 $ 10,333 $ — $ — $ — $ 410,491 Income before income taxes 310,171 7,908 10,333 — — (497 ) 327,915 Net income attributable to shareholders $ 236,559 $ 5,780 $ 7,736 $ — $ 942 $ (378 ) $ 250,639 Net income per diluted share (4) $ 4.12 $ 0.10 $ 0.13 $ — $ 0.02 $ (0.01 ) $ 4.37 Effective tax rate (5) 23.3 % 23.1 % ARROW ELECTRONICS, INC. NON-GAAP EARNINGS RECONCILIATION (In thousands except per share data) (Unaudited) Six months ended June 29, 2024 Reported Intangible Restructuring, Impact of Non GAAP amortization Integration Wind recurring Non-GAAP measure expense and other Down (1) tax items Other (2) measure Operating income $ 398,192 $ 15,002 $ 87,393 $ 12,086 $ — $ — $ 512,673 Income before income taxes 244,520 15,002 87,393 12,086 — 6,174 365,175 Net income attributable to shareholders $ 192,299 $ 10,989 $ 65,165 $ 9,195 $ — $ 4,692 $ 282,340 Net income per diluted share (4) $ 3.53 $ 0.20 $ 1.20 $ 0.17 $ — $ 0.09 $ 5.18 Effective tax rate (5) 21.2 % 22.5 % Six months ended July 1, 2023 Reported Intangible Restructuring, Impact of Non GAAP amortization Integration Wind recurring Non-GAAP measure expense and other Down (1) tax items Other (3) measure Operating income $ 814,402 $ 15,888 $ 12,893 $ — $ — $ — $ 843,183 Income before income taxes 662,043 15,888 12,893 — — (10,808 ) 680,016 Net income attributable to shareholders $ 510,309 $ 11,616 $ 9,576 $ — $ 942 $ (8,218 ) $ 524,225 Net income per diluted share (4) $ 8.74 $ 0.20 $ 0.16 $ — $ 0.02 $ (0.14 ) $ 8.98 Effective tax rate (5) 22.5 % 22.5 % (1) Includes write downs of inventory related to the wind down of a business. (2) Other includes loss (gain) on investments, net and loss on extinguishment of debt. (3) Other includes loss (gain) on investments, net. (4) The sum of the components for non-GAAP diluted EPS, as adjusted may not agree to totals, as presented, due to rounding. (5) The items as shown in this table, represent the reconciling items for the tax rate as reported and as a non-GAAP measure. ARROW ELECTRONICS, INC. SEGMENT INFORMATION (In thousands) (Unaudited) Quarter Ended Six Months Ended June 29, 2024 July 1, 2023 June 29, 2024 July 1, 2023 Sales: Global components $ 5,032,031 $ 6,682,882 $ 10,223,448 $ 13,538,675 Global ECS 1,860,837 1,831,634 3,593,680 3,712,269 Consolidated $ 6,892,868 $ 8,514,516 $ 13,817,128 $ 17,250,944 Operating income (loss): Global components (a) $ 210,201 $ 381,314 $ 435,763 $ 798,853 Global ECS (b) 102,581 86,228 174,040 167,327 Corporate (c) (100,507 ) (75,292 ) (211,611 ) (151,778 ) Consolidated $ 212,275 $ 392,250 $ 398,192 $ 814,402 (a) Global components operating income includes charges of $1.6 million and $12.1 million in inventory write downs related to the wind down of a business for the second quarter and first six months of 2024, respectively. (b) Global ECS operating income includes a $20.0 million benefit related to the reversal of an allowance for credit losses due to the collection of certain aged receivables for the second quarter and first six months of 2024. (c) Corporate operating (loss) includes restructuring, integration, and other charges of $40.5 million and $87.4 million for the second quarter and first six months of 2024, respectively, and $10.3 million and $12.9 million for the second quarter and first six months of 2023, respectively. NON-GAAP SEGMENT RECONCILIATION Quarter Ended Six Months Ended June 29, 2024 July 1, 2023 June 29, 2024 July 1, 2023 Global components operating income, as reported $ 210,201 $ 381,314 $ 435,763 $ 798,853 Intangible assets amortization expense 6,399 6,679 12,887 13,424 Impact of wind down to inventory 1,627 — 12,086 — Global components non-GAAP operating income $ 218,227 $ 387,993 $ 460,736 $ 812,277 Global ECS operating income, as reported $ 102,581 $ 86,228 $ 174,040 $ 167,327 Intangible assets amortization expense 1,057 1,229 2,115 2,464 Global ECS non-GAAP operating income $ 103,638 $ 87,457 $ 176,155 $ 169,791 Source: Arrow Electronics Categories: Press Releases View all news