Arrow Electronics Reports Third-Quarter 2024 Results

-- Sales of $6.8 billion, at high-end of guidance range --

-- Third-Quarter Earnings Per Diluted Share of $1.88; Non-GAAP Earnings Per Diluted Share of $2.38 --

CENTENNIAL, Colo.--()--Arrow Electronics, Inc. (NYSE:ARW) today announced financial results for its third quarter of 2024.

In the third quarter, the company continued to execute well in a challenging environment. While the cyclical correction continues in our global components business, we saw enterprise IT spending gain momentum,” said Sean Kerins, Arrow’s president and chief executive officer. “I am pleased that we delivered revenue above the midpoint of our guidance range and non-GAAP earnings per diluted share ahead of our expectations,” said Mr. Kerins.

 

 

 

 

 

 

 

 

 

 

 

 

 

Arrow Consolidated

 

 

Quarter Ended

 

Nine Months Ended

 

 

 

September 28,

 

 

September 30,

 

 

September 28,

 

 

September 30,

(in millions except per share data)

 

 

2024

 

 

2023

 

 

2024

 

 

2023

Consolidated sales

 

$

6,823

 

$

8,007

 

$

20,640

 

$

25,258

Net income attributable to shareholders

 

 

101

 

 

199

 

 

293

 

 

709

Net income per diluted share

 

 

1.88

 

 

3.53

 

 

5.42

 

 

12.28

Non-GAAP net income attributable to shareholders (1)

 

 

128

 

 

233

 

 

410

 

 

757

Non-GAAP net income per diluted share

 

 

2.38

 

 

4.14

 

 

7.59

 

 

13.12

In the third quarter of 2024, sales decreased 15 percent year over year. Changes in foreign currencies had a positive impact on growth of approximately $37 million on sales and $0.02 on earnings per share on a diluted basis compared to the third quarter of 2023.

Global Components

In our global components business, the broader ecosystem inventory correction persists. Given the market environment, we remain focused on our suppliers and customers while managing the operational factors within our control,” said Mr. Kerins.

 

 

 

 

 

 

 

 

 

 

 

 

 

Global Components

 

 

Quarter Ended

 

Nine Months Ended

 

 

 

September 28,

 

 

September 30,

 

 

September 28,

 

 

September 30,

(in millions)

 

 

2024

 

 

2023

 

 

2024

 

 

2023

Global components sales

 

$

4,946

 

$

6,245

 

$

15,170

 

$

19,784

Global components operating income

 

 

189

 

 

379

 

 

624

 

 

1,178

Global components non-GAAP operating income

 

 

193

 

 

386

 

 

654

 

 

1,198

In the third quarter of 2024, global components sales decreased 21 percent year over year. Americas components third-quarter sales decreased 12 percent year over year. EMEA components third-quarter sales decreased 35 percent year over year and decreased 36 percent year over year on a constant currency basis. Asia-Pacific components third-quarter sales decreased 15 percent year over year.

Global Enterprise Computing Solutions

We saw better momentum and strong sales growth in our global ECS business, highlighted by a healthy market for hybrid cloud solutions, steady market dynamics in Europe, and an improving trajectory for us in North America,” said Mr. Kerins.

 

 

 

 

 

 

 

 

 

 

 

 

 

Global Enterprise Computing Solutions (ECS)

 

 

Quarter Ended

 

Nine Months Ended

 

 

 

September 28,

 

 

September 30,

 

 

September 28,

 

 

September 30,

(in millions)

 

 

2024

 

 

2023

 

 

2024

 

 

2023

Global ECS sales

 

$

1,877

 

$

1,762

 

$

5,471

 

$

5,474

Global ECS operating income

 

 

76

 

 

55

 

 

250

 

 

222

Global ECS non-GAAP operating income

 

 

77

 

 

56

 

 

253

 

 

226

In the third quarter of 2024, global ECS sales increased 7 percent year over year and increased 6 percent year over year on a constant currency basis. EMEA ECS third-quarter sales increased 13 percent year over year and increased 11 percent year over year on a constant currency basis. Americas ECS third-quarter sales increased 2 percent year over year.

Other Financial Information

In the third quarter, we reduced inventory levels by approximately $125 million, or $1.3 billion over the last 12 months. We also generated $81 million in cash flow from operations and repurchased $50 million of shares,” said Raj Agrawal, Arrow’s senior vice president and chief financial officer.

In line with our ongoing efforts to simplify our operations, we are restructuring the business to drive additional cost savings,” said Mr. Agrawal.

In addition to actions taken to date, the company estimates total restructuring expenses over the next two years of $185 million, including costs of $135 million for efficiency initiatives, as well as costs of approximately $50 million to exit certain lines of non-core business. The company has identified opportunities to reduce annual operating expenses by the end of 2026 by approximately $90 million to $100 million, primarily related to reorganizing and consolidating certain areas of the company’s operations.

1 A reconciliation of non-GAAP financial measures to GAAP financial measures is presented in the reconciliation tables included herein.

Fourth-Quarter 2024 Outlook

  • Consolidated sales of $6.67 billion to $7.27 billion, with global components sales of $4.50 billion to $4.90 billion, and global enterprise computing solutions sales of $2.17 billion to $2.37 billion
  • Net income per share on a diluted basis of $1.35 to $1.55, and non-GAAP net income per share on a diluted basis of $2.48 to $2.68
  • Average tax rate in the range of 23 to 25 percent
  • Interest expense of approximately $60 million to $65 million
  • Changes in foreign currencies to increase sales by approximately $60 million, and earnings per share on a diluted basis by $0.02 compared to the fourth quarter of 2023
  • Changes in foreign currencies to have no impact on growth in sales or earnings per share on a diluted basis compared to the third quarter of 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fourth-Quarter 2024 GAAP to non-GAAP Outlook Reconciliation

NON-GAAP SALES RECONCILIATION

 

 

Quarter Ended

 

 

 

Quarter Ended

 

 

 

 

December 31,

 

December 31,

 

 

 

December 31,

 

September 28,

 

 

(in billions)

 

2024

 

2023

 

% Change

 

2024

 

2024

 

% Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Global components sales, GAAP

 

$

4.50 - 4.90

 

$

5.64

 

(20%) - (13%)

 

$

4.50 - 4.90

 

$

4.95

 

(9%) - (1%)

Impact of changes in foreign currencies

 

 

 

 

0.04

 

 

 

 

 

 

 

 

Global components sales, constant currency

 

$

4.50 - 4.90

 

$

5.68

 

(21%) - (14%)

 

$

4.50 - 4.90

 

$

4.95

 

(9%) - (1%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Global ECS sales, GAAP

 

$

2.17 - 2.37

 

$

2.21

 

(2%) - 7%

 

$

2.17 - 2.37

 

$

1.88

 

15% - 26%

Impact of changes in foreign currencies

 

 

 

 

0.02

 

 

 

 

 

 

 

 

Global ECS sales, constant currency

 

$

2.17 - 2.37

 

$

2.23

 

(3%) - 6%

 

$

2.17 - 2.37

 

$

1.88

 

15% - 26%

 

 

 

 

 

 

 

 

 

 

 

 

 

NON-GAAP EARNINGS RECONCILIATION

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported GAAP measure

 

Intangible amortization

expense

 

Restructuring &

integration charges

 

Non-GAAP measure

Net income per diluted share

 

 

$1.35 to $1.55

 

 

$0.10

 

 

$1.03

 

 

$2.48 to $2.68

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 third-quarter 2024 financial results on Oct. 31, 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/487434328. 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 (NYSE:ARW) sources and engineers technology solutions for thousands of leading manufacturers and service providers. With global 2023 sales of $33 billion, Arrow’s portfolio enables technology across major industries and markets. 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 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, the timing of the completion of the Operating Expense Efficiency Plan (the “Plan”) and Arrow’s estimated costs and expected operating expense reductions from the Plan, industry trends 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: the incurrence of additional charges not currently contemplated and failure to realize contemplated cost savings due to unanticipated events that may occur, including in connection with the implementation of the Plan; 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; restructuring activities and impacts thereof; 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, provision for income taxes, consolidated net income, noncontrolling interest, 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; write downs (reversals) to inventory related to the wind down of a business within the global components reportable segment (“impact of wind down”); 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 Analysis 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

 

Nine Months Ended

 

 

 

September 28, 2024

 

 

September 30, 2023

 

 

September 28, 2024

 

 

September 30, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

$

6,823,319

 

 

$

8,007,019

 

 

$

20,640,447

 

 

$

25,257,963

 

Cost of sales

 

 

6,038,491

 

 

 

7,027,422

 

 

 

18,151,349

 

 

 

22,098,495

 

Gross profit

 

 

784,828

 

 

 

979,597

 

 

 

2,489,098

 

 

 

3,159,468

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general, and administrative

 

 

534,508

 

 

 

563,150

 

 

 

1,670,429

 

 

 

1,822,783

 

Depreciation and amortization

 

 

40,592

 

 

 

45,005

 

 

 

123,356

 

 

 

137,948

 

Restructuring, integration, and other

 

 

34,466

 

 

 

31,359

 

 

 

121,859

 

 

 

44,252

 

 

 

 

609,566

 

 

 

639,514

 

 

 

1,915,644

 

 

 

2,004,983

 

Operating income

 

 

175,262

 

 

 

340,083

 

 

 

573,454

 

 

 

1,154,485

 

Equity in earnings of affiliated companies

 

 

1,002

 

 

 

1,392

 

 

 

1,912

 

 

 

4,373

 

Gain (loss) on investments, net

 

 

3,757

 

 

 

(6,159

)

 

 

(760

)

 

 

4,649

 

Loss on extinguishment of debt

 

 

 

 

 

 

 

 

(1,657

)

 

 

 

Employee benefit plan expense, net

 

 

(979

)

 

 

(854

)

 

 

(2,892

)

 

 

(2,510

)

Interest and other financing expense, net

 

 

(62,947

)

 

 

(82,180

)

 

 

(209,442

)

 

 

(246,672

)

Income before income taxes

 

 

116,095

 

 

 

252,282

 

 

 

360,615

 

 

 

914,325

 

Provision for income taxes

 

 

15,198

 

 

 

52,241

 

 

 

66,996

 

 

 

201,168

 

Consolidated net income

 

 

100,897

 

 

 

200,041

 

 

 

293,619

 

 

 

713,157

 

Noncontrolling interests

 

 

330

 

 

 

1,382

 

 

 

753

 

 

 

4,189

 

Net income attributable to shareholders

 

$

100,567

 

 

$

198,659

 

 

$

292,866

 

 

$

708,968

 

Net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

1.90

 

 

$

3.57

 

 

$

5.48

 

 

$

12.43

 

Diluted

 

$

1.88

 

 

$

3.53

 

 

$

5.42

 

 

$

12.28

 

Weighted-average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

53,010

 

 

 

55,597

 

 

 

53,476

 

 

 

57,021

 

Diluted

 

 

53,475

 

 

 

56,298

 

 

 

53,999

 

 

 

57,715

 

ARROW ELECTRONICS, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands except par value)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

September 28, 2024

 

December 31, 2023

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

248,000

 

 

$

218,053

 

Accounts receivable, net

 

 

11,726,601

 

 

 

12,238,073

 

Inventories

 

 

4,529,655

 

 

 

5,187,225

 

Other current assets

 

 

1,022,620

 

 

 

684,126

 

Total current assets

 

 

17,526,876

 

 

 

18,327,477

 

Property, plant, and equipment, at cost:

 

 

 

 

 

 

Land

 

 

5,691

 

 

 

5,691

 

Buildings and improvements

 

 

193,315

 

 

 

195,579

 

Machinery and equipment

 

 

1,648,708

 

 

 

1,632,606

 

 

 

 

1,847,714

 

 

 

1,833,876

 

Less: Accumulated depreciation and amortization

 

 

(1,354,179

)

 

 

(1,303,136

)

Property, plant, and equipment, net

 

 

493,535

 

 

 

530,740

 

Investments in affiliated companies

 

 

61,506

 

 

 

62,741

 

Intangible assets, net

 

 

105,313

 

 

 

127,440

 

Goodwill

 

 

2,084,160

 

 

 

2,050,426

 

Other assets

 

 

663,259

 

 

 

627,344

 

Total assets

 

$

20,934,649

 

 

$

21,726,168

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

9,392,389

 

 

$

10,070,015

 

Accrued expenses

 

 

1,668,633

 

 

 

1,463,915

 

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

 

 

909,826

 

 

 

1,653,954

 

Total current liabilities

 

 

11,970,848

 

 

 

13,187,884

 

Long-term debt

 

 

2,363,241

 

 

 

2,153,553

 

Other liabilities

 

 

564,483

 

 

 

507,424

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

Shareholders’ equity:

 

 

 

 

 

 

Common stock, par value $1:

 

 

 

 

 

 

Authorized - 160,000 shares in both 2024 and 2023

 

 

 

 

 

 

Issued - 58,059 and 57,691 shares in 2024 and 2023, respectively

 

 

58,059

 

 

 

57,691

 

Capital in excess of par value

 

 

582,572

 

 

 

553,340

 

Treasury stock (5,472 and 3,880 shares in 2024 and 2023, respectively), at cost

 

 

(506,157

)

 

 

(297,745

)

Retained earnings

 

 

6,083,083

 

 

 

5,790,217

 

Accumulated other comprehensive loss

 

 

(254,460

)

 

 

(298,039

)

Total shareholders’ equity

 

 

5,963,097

 

 

 

5,805,464

 

Noncontrolling interests

 

 

72,980

 

 

 

71,843

 

Total equity

 

 

6,036,077

 

 

 

5,877,307

 

Total liabilities and equity

 

$

20,934,649

 

 

$

21,726,168

 

ARROW ELECTRONICS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

Quarter Ended

 

 

September 28, 2024

 

September 30, 2023

Cash flows from operating activities:

 

 

 

 

 

 

Consolidated net income

 

$

100,897

 

 

$

200,041

 

Adjustments to reconcile consolidated net income to net cash provided by operations:

 

 

 

 

 

 

Depreciation and amortization

 

 

40,592

 

 

 

45,005

 

Amortization of stock-based compensation

 

 

8,487

 

 

 

6,519

 

Equity in earnings of affiliated companies

 

 

(1,002

)

 

 

(1,392

)

Deferred income taxes

 

 

(12,889

)

 

 

(19,639

)

Loss (gain) on investments, net

 

 

(3,686

)

 

 

6,159

 

Other

 

 

(670

)

 

 

1,092

 

Change in assets and liabilities, net of effects of acquired businesses:

 

 

 

 

 

 

Accounts receivable, net

 

 

(701,168

)

 

 

260,749

 

Inventories

 

 

169,211

 

 

 

(383,647

)

Accounts payable

 

 

550,797

 

 

 

157,482

 

Accrued expenses

 

 

(83,506

)

 

 

127,235

 

Other assets and liabilities

 

 

13,495

 

 

 

(77,897

)

Net cash provided by operating activities

 

 

80,558

 

 

 

321,707

 

Cash flows from investing activities:

 

 

 

 

 

 

Acquisition of property, plant, and equipment

 

 

(18,519

)

 

 

(20,670

)

Other

 

 

10,677

 

 

 

 

Net cash used for investing activities

 

 

(7,842

)

 

 

(20,670

)

Cash flows from financing activities:

 

 

 

 

 

 

Change in short-term and other borrowings

 

 

549,451

 

 

 

603,693

 

Proceeds from (repayments of) long-term bank borrowings, net

 

 

(613,449

)

 

 

(557,308

)

Net proceeds from note offering

 

 

494,886

 

 

 

 

Redemption of notes

 

 

(500,000

)

 

 

 

Proceeds from exercise of stock options

 

 

585

 

 

 

443

 

Repurchases of common stock

 

 

(51,051

)

 

 

(203,491

)

Other

 

 

(899

)

 

 

 

Net cash used for financing activities

 

 

(120,477

)

 

 

(156,663

)

Effect of exchange rate changes on cash

 

 

82,752

 

 

 

(51,462

)

Net increase in cash and cash equivalents

 

 

34,991

 

 

 

92,912

 

Cash and cash equivalents at beginning of period

 

 

213,009

 

 

 

240,382

 

Cash and cash equivalents at end of period

 

$

248,000

 

 

$

333,294

 

ARROW ELECTRONICS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

Nine Months Ended

 

 

September 28, 2024

 

September 30, 2023

Cash flows from operating activities:

 

 

 

 

 

 

Consolidated net income

 

$

293,619

 

 

$

713,157

 

Adjustments to reconcile consolidated net income to net cash provided by operations:

 

 

 

 

 

 

Depreciation and amortization

 

 

123,356

 

 

 

137,948

 

Amortization of stock-based compensation

 

 

30,187

 

 

 

34,868

 

Equity in earnings of affiliated companies

 

 

(1,912

)

 

 

(4,373

)

Deferred income taxes

 

 

(20,287

)

 

 

(53,038

)

Loss on extinguishment of debt

 

 

1,657

 

 

 

 

Loss (gain) on investments, net

 

 

1,077

 

 

 

(4,649

)

Other

 

 

4,194

 

 

 

4,078

 

Change in assets and liabilities, net of effects of acquired businesses:

 

 

 

 

 

 

Accounts receivable, net

 

 

512,394

 

 

 

1,585,521

 

Inventories

 

 

662,685

 

 

 

(525,020

)

Accounts payable

 

 

(687,015

)

 

 

(1,355,777

)

Accrued expenses

 

 

189,537

 

 

 

(88,348

)

Other assets and liabilities

 

 

(305,543

)

 

 

(25,660

)

Net cash provided by operating activities

 

 

803,949

 

 

 

418,707

 

Cash flows from investing activities:

 

 

 

 

 

 

Acquisition of property, plant, and equipment

 

 

(70,155

)

 

 

(57,775

)

Other

 

 

17,129

 

 

 

10,962

 

Net cash used for investing activities

 

 

(53,026

)

 

 

(46,813

)

Cash flows from financing activities:

 

 

 

 

 

 

Change in short-term and other borrowings

 

 

(595,069

)

 

 

802,032

 

Proceeds from (repayments of) long-term bank borrowings, net

 

 

60,158

 

 

 

(566,734

)

Net proceeds from note offering

 

 

989,564

 

 

 

496,268

 

Redemption of notes

 

 

(1,000,000

)

 

 

(300,000

)

Proceeds from exercise of stock options

 

 

5,353

 

 

 

16,824

 

Repurchases of common stock

 

 

(214,352

)

 

 

(719,708

)

Settlement of forward-starting interest rate swap

 

 

 

 

 

56,711

 

Other

 

 

(1,040

)

 

 

(142

)

Net cash used for financing activities

 

 

(755,386

)

 

 

(214,749

)

Effect of exchange rate changes on cash

 

 

34,410

 

 

 

(766

)

Net increase in cash and cash equivalents

 

 

29,947

 

 

 

156,379

 

Cash and cash equivalents at beginning of period

 

 

218,053

 

 

 

176,915

 

Cash and cash equivalents at end of period

 

$

248,000

 

 

$

333,294

 

ARROW ELECTRONICS, INC.

NON-GAAP SALES RECONCILIATION

(In thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended

 

 

 

 

 

September 28, 2024

 

September 30, 2023

 

% Change

 

 

 

 

 

 

 

 

 

 

 

Consolidated sales, as reported

 

$

6,823,319

 

$

8,007,019

 

 

(14.8

)

%

Impact of changes in foreign currencies

 

 

 

 

36,708

 

 

 

 

Consolidated sales, constant currency

 

$

6,823,319

 

$

8,043,727

 

 

(15.2

)

%

 

 

 

 

 

 

 

 

 

 

Global components sales, as reported

 

$

4,946,059

 

$

6,245,192

 

 

(20.8

)

%

Impact of changes in foreign currencies

 

 

 

 

24,592

 

 

 

 

Global components sales, constant currency

 

$

4,946,059

 

$

6,269,784

 

 

(21.1

)

%

 

 

 

 

 

 

 

 

 

 

Americas components sales, as reported

 

$

1,638,459

 

$

1,869,934

 

 

(12.4

)

%

Impact of changes in foreign currencies

 

 

 

 

(809

)

 

 

 

Americas components sales, constant currency

 

$

1,638,459

 

$

1,869,125

 

 

(12.3

)

%

 

 

 

 

 

 

 

 

 

 

Asia components sales, as reported

 

$

2,017,814

 

$

2,387,835

 

 

(15.5

)

%

Impact of changes in foreign currencies

 

 

 

 

2,433

 

 

 

 

Asia components sales, constant currency

 

$

2,017,814

 

$

2,390,268

 

 

(15.6

)

%

 

 

 

 

 

 

 

 

 

 

EMEA components sales, as reported

 

$

1,289,786

 

$

1,987,423

 

 

(35.1

)

%

Impact of changes in foreign currencies

 

 

 

 

22,968

 

 

 

 

EMEA components sales, constant currency

 

$

1,289,786

 

$

2,010,391

 

 

(35.8

)

%

 

 

 

 

 

 

 

 

 

 

Global ECS sales, as reported

 

$

1,877,260

 

$

1,761,827

 

 

6.6

 

%

Impact of changes in foreign currencies

 

 

 

 

12,116

 

 

 

 

Global ECS sales, constant currency

 

$

1,877,260

 

$

1,773,943

 

 

5.8

 

%

 

 

 

 

 

 

 

 

 

 

Americas ECS sales, as reported

 

$

1,033,115

 

$

1,015,924

 

 

1.7

 

%

Impact of changes in foreign currencies

 

 

 

 

(645

)

 

 

 

Americas ECS sales, constant currency

 

$

1,033,115

 

$

1,015,279

 

 

1.8

 

%

 

 

 

 

 

 

 

 

 

 

EMEA ECS sales, as reported

 

$

844,145

 

$

745,903

 

 

13.2

 

%

Impact of changes in foreign currencies

 

 

 

 

12,761

 

 

 

 

EMEA ECS sales, constant currency

 

$

844,145

 

$

758,664

 

 

11.3

 

%

ARROW ELECTRONICS, INC.

NON-GAAP SALES RECONCILIATION

(In thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended

 

 

 

 

 

September 28, 2024

 

September 30, 2023

 

% Change

 

 

 

 

 

 

 

 

 

 

 

Consolidated sales, as reported

 

$

20,640,447

 

$

25,257,963

 

 

(18.3

)

%

Impact of changes in foreign currencies

 

 

 

 

(6,154

)

 

 

 

Consolidated sales, constant currency

 

$

20,640,447

 

$

25,251,809

 

 

(18.3

)

%

 

 

 

 

 

 

 

 

 

 

Global components sales, as reported

 

$

15,169,507

 

$

19,783,867

 

 

(23.3

)

%

Impact of changes in foreign currencies

 

 

 

 

(24,213

)

 

 

 

Global components sales, constant currency

 

$

15,169,507

 

$

19,759,654

 

 

(23.2

)

%

 

 

 

 

 

 

 

 

 

 

Americas components sales, as reported

 

$

4,807,991

 

$

6,169,949

 

 

(22.1

)

%

Impact of changes in foreign currencies

 

 

 

 

(2,994

)

 

 

 

Americas components sales, constant currency

 

$

4,807,991

 

$

6,166,955

 

 

(22.0

)

%

 

 

 

 

 

 

 

 

 

 

Asia components sales, as reported

 

$

5,975,729

 

$

7,226,871

 

 

(17.3

)

%

Impact of changes in foreign currencies

 

 

 

 

(39,533

)

 

 

 

Asia components sales, constant currency

 

$

5,975,729

 

$

7,187,338

 

 

(16.9

)

%

 

 

 

 

 

 

 

 

 

 

EMEA components sales, as reported

 

$

4,385,787

 

$

6,387,047

 

 

(31.3

)

%

Impact of changes in foreign currencies

 

 

 

 

18,314

 

 

 

 

EMEA components sales, constant currency

 

$

4,385,787

 

$

6,405,361

 

 

(31.5

)

%

 

 

 

 

 

 

 

 

 

 

Global ECS sales, as reported

 

$

5,470,940

 

$

5,474,096

 

 

(0.1

)

%

Impact of changes in foreign currencies

 

 

 

 

18,059

 

 

 

 

Global ECS sales, constant currency

 

$

5,470,940

 

$

5,492,155

 

 

(0.4

)

%

 

 

 

 

 

 

 

 

 

 

Americas ECS sales, as reported

 

$

2,904,933

 

$

3,014,544

 

 

(3.6

)

%

Impact of changes in foreign currencies

 

 

 

 

(3,184

)

 

 

 

Americas ECS sales, constant currency

 

$

2,904,933

 

$

3,011,360

 

 

(3.5

)

%

 

 

 

 

 

 

 

 

 

 

EMEA ECS sales, as reported

 

$

2,566,007

 

$

2,459,552

 

 

4.3

 

%

Impact of changes in foreign currencies

 

 

 

 

21,243

 

 

 

 

EMEA ECS sales, constant currency

 

$

2,566,007

 

$

2,480,795

 

 

3.4

 

%

ARROW ELECTRONICS, INC.

NON-GAAP EARNINGS RECONCILIATION

(In thousands except per share data)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended September 28, 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

 

$

175,262

 

$

7,308

 

$

34,466

 

$

(1,857

)

 

$

$

 

 

$

215,179

 

Income before income taxes

 

 

116,095

 

 

7,308

 

 

34,466

 

 

(1,857

)

 

 

 

(3,757

)

 

 

152,255

 

Provision for income taxes

 

 

15,198

 

 

1,819

 

 

8,592

 

 

(444

)

 

 

 

(902

)

 

 

24,263

 

Consolidated net income

 

 

100,897

 

 

5,489

 

 

25,874

 

 

(1,413

)

 

 

 

(2,855

)

 

 

127,992

 

Noncontrolling interests

 

 

330

 

 

136

 

 

 

 

 

 

 

 

 

 

 

466

 

Net income attributable to shareholders

 

$

100,567

 

$

5,353

 

$

25,874

 

$

(1,413

)

 

$

$

(2,855

)

 

$

127,526

 

Net income per diluted share (4)

 

$

1.88

 

$

0.10

 

$

0.48

 

$

(0.03

)

 

$

$

(0.05

)

 

$

2.38

 

Effective tax rate (5)

 

 

13.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

15.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended September 30, 2023

 

 

 

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

 

$

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 (4)

 

$

3.53

 

$

0.10

 

$

0.43

 

$

 

$

$

0.08

 

$

4.14

 

Effective tax rate (5)

 

 

20.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

21.2

%

ARROW ELECTRONICS, INC.

NON-GAAP EARNINGS RECONCILIATION

(In thousands except per share data)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine months ended September 28, 2024

 

 

 

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

 

$

573,454

 

$

22,310

 

$

121,859

 

$

10,229

 

$

 

$

 

$

727,852

 

Income before income taxes

 

 

360,615

 

 

22,310

 

 

121,859

 

 

10,229

 

 

 

 

2,417

 

 

517,430

 

Provision for income taxes

 

 

66,996

 

 

5,562

 

 

30,820

 

 

2,447

 

 

 

 

580

 

 

106,405

 

Consolidated net income

 

 

293,619

 

 

16,748

 

 

91,039

 

 

7,782

 

 

 

 

1,837

 

 

411,025

 

Noncontrolling interests

 

 

753

 

 

406

 

 

 

 

 

 

 

 

 

 

1,159

 

Net income attributable to shareholders

 

$

292,866

 

$

16,342

 

$

91,039

 

$

7,782

 

$

 

$

1,837

 

$

409,866

 

Net income per diluted share (4)

 

$

5.42

 

$

0.30

 

$

1.69

 

$

0.14

 

$

 

$

0.03

 

$

7.59

 

Effective tax rate (5)

 

 

18.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

20.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine months ended September 30, 2023

 

 

 

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

 

$

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 (4)

 

$

12.28

 

$

0.30

 

$

0.58

 

$

 

$

0.02

 

 

$

(0.06

)

 

$

13.12

 

Effective tax rate (5)

 

 

22.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

22.1

%

______________________________

(1) Includes write downs (reversals) of inventory related to the wind down of a business.

(2) Other includes loss (gain) on investments, net.

(3) Other includes loss (gain) on investments, net and loss on extinguishment of debt.

(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

 

Nine Months Ended

 

 

September 28,

 

September 30,

 

September 28,

 

September 30,

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Sales:

 

 

 

 

 

 

 

 

 

 

 

 

Global components

 

$

4,946,059

 

 

$

6,245,192

 

 

$

15,169,507

 

 

$

19,783,867

 

Global ECS

 

 

1,877,260

 

 

 

1,761,827

 

 

 

5,470,940

 

 

 

5,474,096

 

Consolidated

 

$

6,823,319

 

 

$

8,007,019

 

 

$

20,640,447

 

 

$

25,257,963

 

Operating income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

Global components (a)

 

$

188,600

 

 

$

379,053

 

 

$

624,363

 

 

$

1,177,906

 

Global ECS (b)

 

 

75,614

 

 

 

54,624

 

 

 

249,654

 

 

 

221,951

 

Corporate (c)

 

 

(88,952

)

 

 

(93,594

)

 

 

(300,563

)

 

 

(245,372

)

Consolidated

 

$

175,262

 

 

$

340,083

 

 

$

573,454

 

 

$

1,154,485

 

(a)

Global components operating income includes a reversal of $1.9 million and charges of $10.2 million in inventory write downs related to the wind down of a business for the third quarter and first nine months of 2024. 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.

(b)

For the third quarter and first nine months of 2023, global ECS operating income includes charges of $21.9 million and $25.4 million, respectively, to increase the allowance for credit losses related to one customer. For the first nine months of 2024, global ECS operating income includes a reversal of $20.0 million for aged receivables that were collected, related to the same customer, which was taken during the second quarter of 2024.

(c)

Corporate operating loss includes restructuring, integration, and other charges of $34.5 million and $121.9 million for the third quarter and first nine months of 2024, respectively, and $31.4 million and $44.3 million for the third quarter and first nine months of 2023, respectively.

NON-GAAP SEGMENT RECONCILIATION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended

 

Nine Months Ended

 

 

September 28,

 

September 30,

 

September 28,

 

September 30,

 

 

2024

 

 

2023

 

2024

 

2023

Global components operating income, as reported

 

$

188,600

 

 

$

379,053

 

$

624,363

 

$

1,177,906

Intangible assets amortization expense

 

 

6,247

 

 

 

6,640

 

 

19,134

 

 

20,064

Impact of wind down to inventory

 

 

(1,857

)

 

 

 

 

10,229

 

 

Global components non-GAAP operating income

 

$

192,990

 

 

$

385,693

 

$

653,726

 

$

1,197,970

 

 

 

 

 

 

 

 

 

 

 

 

 

Global ECS operating income, as reported

 

$

75,614

 

 

$

54,624

 

$

249,654

 

$

221,951

Intangible assets amortization expense

 

 

1,061

 

 

 

1,223

 

 

3,176

 

 

3,687

Global ECS non-GAAP operating income

 

$

76,675

 

 

$

55,847

 

$

252,830

 

$

225,638

 

Contacts

Investors:
Brad Windbigler,
Treasurer and Vice President, Investor Relations
720-654-9893

Media:
John Hourigan,
Vice President, Public Affairs and Corporate Marketing
303-824-4586

Contacts

Investors:
Brad Windbigler,
Treasurer and Vice President, Investor Relations
720-654-9893

Media:
John Hourigan,
Vice President, Public Affairs and Corporate Marketing
303-824-4586