Arrow Electronics Reports Second-Quarter 2022 Results

-- Record Sales, Gross Profit, Operating Income, and Earnings Per Share --

-- Second-Quarter Earnings Per Share of $5.54; Non-GAAP Earnings Per Share of $5.78 --

CENTENNIAL, Colo.--()--Arrow Electronics, Inc. (NYSE:ARW) today reported second-quarter 2022 sales of $9.46 billion, an increase of 10 percent from sales of $8.56 billion in the second quarter of 2021. Second-quarter net income was $370 million, or $5.54 per share on a diluted basis, compared with net income of $241 million, or $3.23 per share on a diluted basis, in the second quarter of 2021. Non-GAAP net income1 was $386 million, or $5.78 per share on a diluted basis, in the second quarter of 2022, compared with non-GAAP net income of $249 million, or $3.34 per share on a diluted basis, in the second quarter of 2021. In the second quarter of 2022, changes in foreign currencies had negative impacts on growth of approximately $291 million on sales and $0.17 on earnings per share on a diluted basis compared to the second quarter of 2021.

We’ve continued to build and deliver on our record performance for the past several quarters. While market conditions are challenging, they also provide ample opportunities to demonstrate Arrow's commitment to the success of our customers and suppliers,” said Sean Kerins, president, and chief executive officer. “Thanks to the dedication and focused execution of our team, we delivered all-time record quarterly sales, gross profit, operating income, and earnings per share while in the face of ongoing supply and demand imbalance.”

Global components second-quarter sales of $7.46 billion reflected an increase of 13 percent year over year and non-GAAP sales increased 16 percent year over year. Asia-Pacific components second-quarter sales increased 1 percent year over year. Americas components second-quarter sales increased 26 percent year over year. Europe components second-quarter sales increased 21 percent year over year and non-GAAP sales in the region increased 37 percent year over year. Global components second-quarter operating income was $524 million, and second-quarter non-GAAP operating income was $531 million.

Demand for electronic components and associated design, engineering and supply chain services remained strong. Past investments to enhance our capabilities, especially in the areas of engineering and supply chain capabilities, have led to advancements in profit performance. This is proof positive that we are uniquely positioned to help our customers navigate today’s challenges,” said Mr. Kerins.

Global enterprise computing solutions second-quarter sales of $2.00 billion reflected an increase of 2 percent year over year and non-GAAP sales increased 8 percent year over year. Europe enterprise computing solutions second-quarter sales increased 7 percent year over year and non-GAAP sales in the region increased 21 percent year over year. Americas enterprise computing solutions second-quarter sales decreased 1 percent year over year. Global enterprise computing solutions second-quarter operating income was $84 million, and second-quarter non-GAAP operating income was $86 million.

Global demand for more complex, enterprise IT content was healthy, and while supply constraints represented a headwind to hardware sales, we saw strength in our software and cloud portfolios. We continue to see strength in cloud, software and enterprise solutions and are well positioned for the transition to IT-as-a-Service,” said Mr. Kerins.

Our return on invested capital remains favorable, and our leverage ratios are near their lowest levels in ten years,” said Rick Seidlitz, vice president and interim principal financial officer. “Our strong profitability and the effective management of our balance sheet enabled us to deliver on our commitment to return cash to shareholders through the repurchase of approximately $225 million of shares in the second quarter of 2022. Our current repurchase authorization stands at approximately $288 million.”

1

 

A reconciliation of non-GAAP financial measures, including sales, gross profit, operating income, net income attributable to shareholders, and net income per share, to GAAP financial measures is presented in the reconciliation tables included herein.

THIRD-QUARTER 2022 OUTLOOK

  • Consolidated sales of $8.92 billion to $9.52 billion, with global components sales of $7.17 billion to $7.47 billion, and global enterprise computing solutions sales of $1.75 billion to $2.05 billion
  • Net income per share on a diluted basis of $5.11 to $5.27, and non-GAAP net income per share on a diluted basis of $5.27 to $5.43
  • Average tax rate of approximately 23.5 percent compared to the long-term range of 23 to 25 percent
  • Average diluted shares outstanding of 65 million
  • Interest expense of approximately $46 million
  • Expecting average USD-to-Euro exchange rate of $1.02 to €1; changes in foreign currencies to decrease sales by approximately $350 million, and earnings per share on a diluted basis by $.25 compared to the second quarter of 2021

Third-Quarter 2022 Outlook

 

Reported GAAP
measure

Intangible amortization
expense

Restructuring &
integration charges

Non-GAAP measure

Net income per diluted share

$5.11 to $5.27

$.10

$.06

$5.27 to $5.43

Please refer to the CFO commentary, 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 comply with its disclosure obligations under Regulation Fair Disclosure.

Arrow Electronics guides innovation forward for over 220,000 leading technology manufacturers and service providers. With 2021 sales of $34 billion, Arrow develops technology solutions that improve business and daily life. Learn more at fiveyearsout.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 2022 such as sales, net income per diluted share, non-GAAP net income per diluted share, average tax rate, average diluted shares outstanding, interest expense, average USD-to-Euro exchange rate, impact to sales due to changes in foreign currencies, intangible amortization expense per diluted share, restructuring & integration charges per diluted share, and expectation regarding market demand. These 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: disruptions or inefficiencies in the supply chain, including any potential adverse effects of the ongoing global COVID-19 pandemic, impacts of the conflict in Ukraine, industry conditions, changes in product supply, pricing and customer demand, competition, other vagaries in the global components and the global enterprise computing solutions (“ECS”) markets, economic conditions, including changes in inflation rates, tax rates, or the availability of capital, 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, and the company's ability to generate 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, gross profit, operating income, income before income taxes, provision for income taxes, 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") by re-translating prior-period results at current period foreign exchange rates, identifiable intangible asset amortization, restructuring, integration, and other charges, pension settlement loss and net gains and losses on investments. Management believes that providing this additional information is useful to the reader to better assess and understand the company’s operating performance, especially when comparing results with previous periods, primarily because management typically monitors the business adjusted for these items in addition to GAAP results. However, analysis of results on a non-GAAP basis should be used as a complement to, and in conjunction with, and not as a substitute for data presented in accordance with GAAP. A reconciliation of the company’s non-GAAP financial information to GAAP is set forth in the tables below.

ARROW ELECTRONICS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands except per share data)

(Unaudited)

 

 

 

 

 

 

 

 

 

Quarter Ended

 

Six Months Ended

 

July 2, 2022

 

July 3, 2021

 

July 2, 2022

 

July 3, 2021

 

 

 

 

 

 

 

 

Sales

$

9,460,842

 

 

$

8,562,631

 

 

$

18,534,967

 

 

$

16,948,550

 

Cost of sales

 

8,224,628

 

 

 

7,562,526

 

 

 

16,091,249

 

 

 

15,018,335

 

Gross profit

 

1,236,214

 

 

 

1,000,105

 

 

 

2,443,718

 

 

 

1,930,215

 

Operating expenses:

 

 

 

 

 

 

 

Selling, general, and administrative expenses

 

653,640

 

 

 

602,084

 

 

 

1,297,565

 

 

 

1,176,651

 

Depreciation and amortization

 

47,252

 

 

 

48,539

 

 

 

95,557

 

 

 

98,870

 

Restructuring, integration, and other charges

 

2,494

 

 

 

8,960

 

 

 

7,392

 

 

 

14,669

 

 

 

703,386

 

 

 

659,583

 

 

 

1,400,514

 

 

 

1,290,190

 

Operating income

 

532,828

 

 

 

340,522

 

 

 

1,043,204

 

 

 

640,025

 

Equity in earnings of affiliated companies

 

2,165

 

 

 

190

 

 

 

3,008

 

 

 

1,034

 

Gain (loss) on investments, net

 

(9,744

)

 

 

6,726

 

 

 

(7,733

)

 

 

9,519

 

Employee benefit plan expense, net

 

(835

)

 

 

(1,438

)

 

 

(1,724

)

 

 

(2,668

)

Interest and other financing expense, net

 

(38,506

)

 

 

(30,685

)

 

 

(72,491

)

 

 

(64,341

)

Income before income taxes

 

485,908

 

 

 

315,315

 

 

 

964,264

 

 

 

583,569

 

Provision for income taxes

 

114,413

 

 

 

74,113

 

 

 

226,773

 

 

 

135,139

 

Consolidated net income

 

371,495

 

 

 

241,202

 

 

 

737,491

 

 

 

448,430

 

Noncontrolling interests

 

1,161

 

 

 

561

 

 

 

2,408

 

 

 

1,468

 

Net income attributable to shareholders

$

370,334

 

 

$

240,641

 

 

$

735,083

 

 

$

446,962

 

Net income per share:

 

 

 

 

 

 

 

Basic

$

5.60

 

 

$

3.27

 

 

$

10.98

 

 

$

6.02

 

Diluted

$

5.54

 

 

$

3.23

 

 

$

10.84

 

 

$

5.94

 

Weighted-average shares outstanding:

 

 

 

 

 

 

 

Basic

 

66,078

 

 

 

73,693

 

 

 

66,964

 

 

 

74,294

 

Diluted

 

66,851

 

 

 

74,611

 

 

 

67,797

 

 

 

75,197

 

ARROW ELECTRONICS, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands except par value)

(Unaudited)

 

 

 

 

 

July 2, 2022

 

December 31, 2021

 

 

 

 

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

225,596

 

 

$

222,194

 

Accounts receivable, net

 

10,851,466

 

 

 

11,123,946

 

Inventories

 

4,886,562

 

 

 

4,201,965

 

Other current assets

 

460,808

 

 

 

345,218

 

Total current assets

 

16,424,432

 

 

 

15,893,323

 

Property, plant, and equipment, at cost:

 

 

 

Land

 

5,691

 

 

 

5,736

 

Buildings and improvements

 

184,677

 

 

 

186,097

 

Machinery and equipment

 

1,528,875

 

 

 

1,523,919

 

 

 

1,719,243

 

 

 

1,715,752

 

Less: Accumulated depreciation and amortization

 

(1,093,656

)

 

 

(1,032,941

)

Property, plant, and equipment, net

 

625,587

 

 

 

682,811

 

Investments in affiliated companies

 

65,732

 

 

 

63,695

 

Intangible assets, net

 

175,854

 

 

 

195,029

 

Goodwill

 

2,020,574

 

 

 

2,080,371

 

Other assets

 

582,271

 

 

 

620,311

 

Total assets

$

19,894,450

 

 

$

19,535,540

 

LIABILITIES AND EQUITY

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

9,162,534

 

 

$

9,617,084

 

Accrued expenses

 

1,244,505

 

 

 

1,326,386

 

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

 

626,048

 

 

 

382,619

 

Total current liabilities

 

11,033,087

 

 

 

11,326,089

 

Long-term debt

 

2,856,490

 

 

 

2,244,443

 

Other liabilities

 

606,590

 

 

 

624,162

 

 

 

 

 

Equity:

 

 

 

Shareholders’ equity:

 

 

 

Common stock, par value $1:

 

 

 

Authorized - 160,000 shares in both 2022 and 2021

 

 

 

Issued - 125,424 shares in both 2022 and 2021

 

125,424

 

 

 

125,424

 

Capital in excess of par value

 

1,198,530

 

 

 

1,189,845

 

Treasury stock (60,821 and 57,358 shares in 2022 and 2021, respectively), at cost

 

(4,080,505

)

 

 

(3,629,265

)

Retained earnings

 

8,523,031

 

 

 

7,787,948

 

Accumulated other comprehensive loss

 

(426,014

)

 

 

(191,657

)

Total shareholders’ equity

 

5,340,466

 

 

 

5,282,295

 

Noncontrolling interests

 

57,817

 

 

 

58,551

 

Total equity

 

5,398,283

 

 

 

5,340,846

 

Total liabilities and equity

$

19,894,450

 

 

$

19,535,540

 

ARROW ELECTRONICS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

 

Quarter Ended

 

July 2, 2022

 

July 3, 2021

Cash flows from operating activities:

 

 

 

Consolidated net income

$

371,495

 

 

$

241,202

 

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

 

 

 

Depreciation and amortization

 

47,252

 

 

 

48,539

 

Amortization of stock-based compensation

 

13,885

 

 

 

8,744

 

Equity in earnings of affiliated companies

 

(2,165

)

 

 

(190

)

Deferred income taxes

 

(8,036

)

 

 

(1,594

)

Loss (gain) on investments, net

 

9,744

 

 

 

(6,726

)

Other

 

1,680

 

 

 

4,759

 

Change in assets and liabilities:

 

 

 

Accounts receivable, net

 

(464,917

)

 

 

(313,735

)

Inventories

 

(294,990

)

 

 

(357,065

)

Accounts payable

 

162,366

 

 

 

562,461

 

Accrued expenses

 

103,764

 

 

 

79,459

 

Other assets and liabilities

 

(22,660

)

 

 

15,526

 

Net cash provided by (used for) operating activities

 

(82,582

)

 

 

281,380

 

Cash flows from investing activities:

 

 

 

Acquisition of property, plant, and equipment

 

(16,974

)

 

 

(20,929

)

Other

 

373

 

 

 

 

Net cash used for investing activities

 

(16,601

)

 

 

(20,929

)

Cash flows from financing activities:

 

 

 

Change in short-term and other borrowings

 

310,315

 

 

 

(2,379

)

Proceeds (payments) from long-term bank borrowings, net

 

65,000

 

 

 

(20,433

)

Proceeds from exercise of stock options

 

4,370

 

 

 

15,226

 

Repurchases of common stock

 

(219,532

)

 

 

(250,708

)

Other

 

(137

)

 

 

(159

)

Net cash provided by (used for) financing activities

 

160,016

 

 

 

(258,453

)

Effect of exchange rate changes on cash

 

(78,028

)

 

 

14,371

 

Net increase (decrease) in cash and cash equivalents

 

(17,195

)

 

 

16,369

 

Cash and cash equivalents at beginning of period

 

242,791

 

 

 

227,701

 

Cash and cash equivalents at end of period

$

225,596

 

 

$

244,070

 

ARROW ELECTRONICS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

 

Six Months Ended

 

July 2, 2022

 

July 3, 2021

Cash flows from operating activities:

 

 

 

Consolidated net income

$

737,491

 

 

$

448,430

 

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

 

 

 

Depreciation and amortization

 

95,557

 

 

 

98,870

 

Amortization of stock-based compensation

 

31,236

 

 

 

21,967

 

Equity in earnings of affiliated companies

 

(3,008

)

 

 

(1,034

)

Deferred income taxes

 

(6,684

)

 

 

12,069

 

Loss (gain) on investments, net

 

7,733

 

 

 

(9,519

)

Other

 

2,366

 

 

 

6,133

 

Change in assets and liabilities:

 

 

 

Accounts receivable, net

 

(34,207

)

 

 

283,042

 

Inventories

 

(755,892

)

 

 

(370,212

)

Accounts payable

 

(315,459

)

 

 

(277,663

)

Accrued expenses

 

60,123

 

 

 

83,102

 

Other assets and liabilities

 

(102,086

)

 

 

(18,341

)

Net cash provided by (used for) operating activities

 

(282,830

)

 

 

276,844

 

Cash flows from investing activities:

 

 

 

Acquisition of property, plant, and equipment

 

(36,244

)

 

 

(41,109

)

Proceeds from sale of property, plant, and equipment

 

 

 

 

22,171

 

Proceeds from collections of notes receivable

 

20,542

 

 

 

 

Net cash used for investing activities

 

(15,702

)

 

 

(18,938

)

Cash flows from financing activities:

 

 

 

Change in short-term and other borrowings

 

296,022

 

 

 

(14,831

)

Proceeds from long-term bank borrowings, net

 

910,000

 

 

 

134,241

 

Redemption of notes

 

(350,000

)

 

 

(130,860

)

Proceeds from exercise of stock options

 

15,672

 

 

 

41,317

 

Repurchases of common stock

 

(483,963

)

 

 

(411,327

)

Other

 

(137

)

 

 

(159

)

Net cash provided by (used for) financing activities

 

387,594

 

 

 

(381,619

)

Effect of exchange rate changes on cash

 

(85,660

)

 

 

(5,832

)

Net increase (decrease) in cash and cash equivalents

 

3,402

 

 

 

(129,545

)

Cash and cash equivalents at beginning of period

 

222,194

 

 

 

373,615

 

Cash and cash equivalents at end of period

$

225,596

 

 

$

244,070

 

ARROW ELECTRONICS, INC.

NON-GAAP SALES RECONCILIATION

(In thousands)

(Unaudited)

 

Quarter Ended

 

 

 

July 2, 2022

 

July 3, 2021

 

% Change

 

 

 

 

 

 

Consolidated sales, as reported

$

9,460,842

 

$

8,562,631

 

 

10.5

%

Impact of changes in foreign currencies

 

 

 

(290,517

)

 

 

Non-GAAP consolidated sales

$

9,460,842

 

$

8,272,114

 

 

14.4

%

 

 

 

 

 

 

Global components sales, as reported

$

7,461,552

 

$

6,610,761

 

 

12.9

%

Impact of changes in foreign currencies

 

 

 

(191,715

)

 

 

Non-GAAP global components sales

$

7,461,552

 

$

6,419,046

 

 

16.2

%

 

 

 

 

 

 

Americas components sales, as reported

$

2,479,362

 

$

1,970,756

 

 

25.8

%

Impact of changes in foreign currencies

 

 

 

(1,950

)

 

 

Non-GAAP Americas components sales

$

2,479,362

 

$

1,968,806

 

 

25.9

%

 

 

 

 

 

 

Asia components sales, as reported

$

3,173,786

 

$

3,149,343

 

 

0.8

%

Impact of changes in foreign currencies

 

 

 

(23,348

)

 

 

Non-GAAP Asia components sales

$

3,173,786

 

$

3,125,995

 

 

1.5

%

 

 

 

 

 

 

Europe components sales, as reported

$

1,808,404

 

$

1,490,662

 

 

21.3

%

Impact of changes in foreign currencies

 

 

 

(166,417

)

 

 

Non-GAAP Europe components sales

$

1,808,404

 

$

1,324,245

 

 

36.6

%

 

 

 

 

 

 

Global ECS sales, as reported

$

1,999,290

 

$

1,951,870

 

 

2.4

%

Impact of changes in foreign currencies

 

 

 

(98,802

)

 

 

Non-GAAP global ECS sales

$

1,999,290

 

$

1,853,068

 

 

7.9

%

 

 

 

 

 

 

Americas ECS sales, as reported

$

1,160,796

 

$

1,167,355

 

 

(0.6

) %

Impact of changes in foreign currencies

 

 

 

(7,312

)

 

 

Non-GAAP Americas ECS sales

$

1,160,796

 

$

1,160,043

 

 

0.1

%

 

 

 

 

 

 

Europe ECS sales, as reported

$

838,494

 

$

784,515

 

 

6.9

%

Impact of changes in foreign currencies

 

 

 

(91,490

)

 

 

Non-GAAP Europe ECS sales

$

838,494

 

$

693,025

 

 

21.0

%

ARROW ELECTRONICS, INC.

NON-GAAP SALES RECONCILIATION

(In thousands)

(Unaudited)

 

Six Months Ended

 

 

 

July 2, 2022

 

July 3, 2021

 

% Change

 

 

 

 

 

 

Consolidated sales, as reported

$

18,534,967

 

$

16,948,550

 

 

9.4

%

Impact of changes in foreign currencies

 

 

 

(442,068

)

 

 

Non-GAAP Consolidated sales

$

18,534,967

 

$

16,506,482

 

 

12.3

%

 

 

 

 

 

 

Global components sales, as reported

$

14,660,627

 

$

13,054,014

 

 

12.3

%

Impact of changes in foreign currencies

 

 

 

(292,016

)

 

 

Non-GAAP Global components sales

$

14,660,627

 

$

12,761,998

 

 

14.9

%

 

 

 

 

 

 

Americas components sales, as reported

$

4,819,905

 

$

3,671,929

 

 

31.3

%

Impact of changes in foreign currencies

 

 

 

(2,722

)

 

 

Non-GAAP Americas components sales

$

4,819,905

 

$

3,669,207

 

 

31.4

%

 

 

 

 

 

 

Asia components sales, as reported

$

6,105,315

 

$

6,322,821

 

 

(3.4

) %

Impact of changes in foreign currencies

 

 

 

(23,978

)

 

 

Non-GAAP Asia components sales

$

6,105,315

 

$

6,298,843

 

 

(3.1

) %

 

 

 

 

 

 

Europe components sales, as reported

$

3,735,407

 

$

3,059,264

 

 

22.1

%

Impact of changes in foreign currencies

 

 

 

(265,316

)

 

 

Non-GAAP Europe components sales

$

3,735,407

 

$

2,793,948

 

 

33.7

%

 

 

 

 

 

 

Global ECS sales, as reported

$

3,874,340

 

$

3,894,536

 

 

(0.5

) %

Impact of changes in foreign currencies

 

 

 

(150,052

)

 

 

Non-GAAP Global ECS sales

$

3,874,340

 

$

3,744,484

 

 

3.5

%

 

 

 

 

 

 

Americas ECS sales, as reported

$

2,208,645

 

$

2,318,693

 

 

(4.7

) %

Impact of changes in foreign currencies

 

 

 

(9,765

)

 

 

Non-GAAP Americas ECS sales

$

2,208,645

 

$

2,308,928

 

 

(4.3

) %

 

 

 

 

 

 

Europe ECS sales, as reported

$

1,665,695

 

$

1,575,843

 

 

5.7

%

Impact of changes in foreign currencies

 

 

 

(140,287

)

 

 

Non-GAAP Europe ECS sales

$

1,665,695

 

$

1,435,556

 

 

16.0

%

ARROW ELECTRONICS, INC.

NON-GAAP EARNINGS RECONCILIATION

(In thousands except per share data)

(Unaudited)

 

Three months ended July 2, 2022

 

Reported
GAAP
measure

 

Intangible
amortization
expense

 

Restructuring
& Integration
charges

 

Other(1)

 

Non-GAAP
measure

Sales

$

9,460,842

 

 

$

 

$

 

$

 

 

$

9,460,842

 

Gross Profit

 

1,236,214

 

 

 

 

 

 

 

 

 

 

1,236,214

 

Operating income

 

532,828

 

 

 

8,830

 

 

2,494

 

 

 

 

 

544,152

 

Income before income taxes

 

485,908

 

 

 

8,830

 

 

2,494

 

 

9,744

 

 

 

506,976

 

Provision for income taxes

 

114,413

 

 

 

2,263

 

 

362

 

 

2,356

 

 

 

119,394

 

Consolidated net income

 

371,495

 

 

 

6,567

 

 

2,132

 

 

7,388

 

 

 

387,582

 

Noncontrolling interests

 

1,161

 

 

 

133

 

 

 

 

 

 

 

1,294

 

Net income attributable to shareholders

$

370,334

 

 

$

6,434

 

$

2,132

 

$

7,388

 

 

$

386,288

 

Net income per diluted share (3)

$

5.54

 

 

$

0.10

 

$

0.03

 

$

0.11

 

 

$

5.78

 

Effective tax rate (4)

 

23.5

%

 

 

 

 

 

 

 

 

23.6

%

 

 

 

 

 

 

 

 

 

 

Three months ended July 3, 2021

 

Reported
GAAP
measure

 

Intangible
amortization
expense

 

Restructuring
& Integration
charges(5)

 

Other(2)

 

Non-GAAP
measure

Sales

$

8,562,631

 

 

$

 

$

 

$

 

 

$

8,562,631

 

Gross Profit

 

1,000,105

 

 

 

 

 

 

 

 

 

 

1,000,105

 

Operating income

 

340,522

 

 

 

9,316

 

 

8,960

 

 

 

 

 

358,798

 

Income before income taxes

 

315,315

 

 

 

9,316

 

 

8,960

 

 

(6,545

)

 

 

327,046

 

Provision for income taxes

 

74,113

 

 

 

2,382

 

 

2,088

 

 

(1,575

)

 

 

77,008

 

Consolidated net income

 

241,202

 

 

 

6,934

 

 

6,872

 

 

(4,970

)

 

 

250,038

 

Noncontrolling interests

 

561

 

 

 

150

 

 

 

 

 

 

 

711

 

Net income attributable to shareholders

$

240,641

 

 

$

6,784

 

$

6,872

 

$

(4,970

)

 

$

249,327

 

Net income per diluted share (3)

$

3.23

 

 

$

0.09

 

$

0.09

 

$

(0.07

)

 

$

3.34

 

Effective tax rate (4)

 

23.5

%

 

 

 

 

 

 

 

 

23.5

%

ARROW ELECTRONICS, INC.

NON-GAAP EARNINGS RECONCILIATION

(In thousands except per share data)

(Unaudited)

Six months ended July 2, 2022

 

 

 

 

 

 

 

 

 

 

 

Reported
GAAP
measure

 

Intangible
amortization
expense

 

Restructuring
& Integration
charges

 

Other(1)

 

Non-GAAP
measure

Sales

$

18,534,967

 

 

$

 

$

 

$

 

 

$

18,534,967

 

Gross Profit

 

2,443,718

 

 

 

 

 

 

 

 

 

 

2,443,718

 

Operating income

 

1,043,204

 

 

 

17,848

 

 

7,392

 

 

 

 

 

1,068,444

 

Income before income taxes

 

964,264

 

 

 

17,848

 

 

7,392

 

 

7,733

 

 

 

997,237

 

Provision for income taxes

 

226,773

 

 

 

4,573

 

 

1,567

 

 

1,870

 

 

 

234,783

 

Consolidated net income

 

737,491

 

 

 

13,275

 

 

5,825

 

 

5,863

 

 

 

762,454

 

Noncontrolling interests

 

2,408

 

 

 

273

 

 

 

 

 

 

 

2,681

 

Net income attributable to shareholders

$

735,083

 

 

$

13,002

 

$

5,825

 

$

5,863

 

 

$

759,773

 

Net income per diluted share (3)

$

10.84

 

 

$

0.19

 

$

0.09

 

$

0.09

 

 

$

11.21

 

Effective tax rate (4)

 

23.5

%

 

 

 

 

 

 

 

 

23.5

%

 

 

 

 

 

 

 

 

 

 

Six months ended July 3, 2021

 

Reported
GAAP
measure

 

Intangible
amortization
expense

 

Restructuring
& Integration
charges(5)

 

Other(2)

 

Non-GAAP
measure

Sales

$

16,948,550

 

 

$

 

$

 

$

 

 

$

16,948,550

 

Gross Profit

 

1,930,215

 

 

 

 

 

 

 

 

 

 

1,930,215

 

Operating income

 

640,025

 

 

 

18,642

 

 

14,669

 

 

 

 

 

673,336

 

Income before income taxes

 

583,569

 

 

 

18,642

 

 

14,669

 

 

(9,338

)

 

 

607,542

 

Provision for income taxes

 

135,139

 

 

 

4,767

 

 

3,254

 

 

(2,247

)

 

 

140,913

 

Consolidated net income

 

448,430

 

 

 

13,875

 

 

11,415

 

 

(7,091

)

 

 

466,629

 

Noncontrolling interests

 

1,468

 

 

 

300

 

 

 

 

 

 

 

1,768

 

Net income attributable to shareholders

$

446,962

 

 

$

13,575

 

$

11,415

 

$

(7,091

)

 

$

464,861

 

Net income per diluted share (3)

$

5.94

 

 

$

0.18

 

$

0.15

 

$

(0.09

)

 

$

6.18

 

Effective tax rate (4)

 

23.2

%

 

 

 

 

 

 

 

 

23.2

%

(1)

 

Other includes loss on investments, net.

(2)

 

Other includes gain on investments, net and pension settlement loss.

(3)

 

The sum of the components for 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 by GAAP measure and as a non-GAAP measure.

(5)

 

Restructuring & Integration charges include impairment related to various long-lived assets

ARROW ELECTRONICS, INC.

SEGMENT INFORMATION

(In thousands)

(Unaudited)

 

 

 

 

 

Quarter Ended

 

Six Months Ended

 

July 2, 2022

 

July 3, 2021

 

July 2, 2022

 

July 3, 2021

Sales:

 

 

 

 

 

 

 

Global components

$

7,461,552

 

 

$

6,610,761

 

 

$

14,660,627

 

 

$

13,054,014

 

Global ECS

 

1,999,290

 

 

 

1,951,870

 

 

 

3,874,340

 

 

 

3,894,536

 

Consolidated

$

9,460,842

 

 

$

8,562,631

 

 

$

18,534,967

 

 

$

16,948,550

 

Operating income (loss):

 

 

 

 

 

 

 

Global components (a)

$

524,494

 

 

$

327,036

 

 

$

1,023,836

 

 

$

616,419

 

Global ECS

 

83,970

 

 

 

81,099

 

 

 

169,768

 

 

 

158,458

 

Corporate (b)

 

(75,636

)

 

 

(67,613

)

 

 

(150,400

)

 

 

(134,852

)

Consolidated

$

532,828

 

 

$

340,522

 

 

$

1,043,204

 

 

$

640,025

 

(a)

 

Global components operating income includes $8.2 million and $12.5 million related to proceeds from legal settlements for the second quarter and first six months of 2021, respectively.

(b)

 

Corporate operating income includes restructuring, integration, and other charges of $2.5 million and $7.4 million for the second quarter and first six months of 2022, respectively, and $4.5 million and $10.2 million for the second quarter and first six months of 2021, respectively.

NON-GAAP SEGMENT RECONCILIATION

 

 

 

 

 

Quarter Ended

 

Six Months Ended

 

July 2, 2022

 

July 3, 2021

 

July 2, 2022

 

July 3, 2021

 

 

 

 

 

 

 

 

Global components operating income, as reported

$

524,494

 

$

327,036

 

$

1,023,836

 

$

616,419

Intangible assets amortization expense

 

6,739

 

 

6,995

 

 

13,612

 

 

13,999

Restructuring, integration, and other charges

 

 

 

4,482

 

 

 

 

4,482

Global components non-GAAP operating income

$

531,233

 

$

338,513

 

$

1,037,448

 

$

634,900

 

 

 

 

 

 

 

 

Global ECS operating income, as reported

$

83,970

 

$

81,099

 

$

169,768

 

$

158,458

Intangible assets amortization expense

 

2,091

 

 

2,321

 

 

4,236

 

 

4,643

Global ECS non-GAAP operating income

$

86,061

 

$

83,420

 

$

174,004

 

$

163,101

 

Contacts

Contact:
Richard Seidlitz,
Vice President, Principal Accounting Officer, Interim Principal Financial Officer
303-305-4936

Media Contact:
John Hourigan,
Vice President, Global Communications
303-824-4586

Contacts

Contact:
Richard Seidlitz,
Vice President, Principal Accounting Officer, Interim Principal Financial Officer
303-305-4936

Media Contact:
John Hourigan,
Vice President, Global Communications
303-824-4586