-- 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 --
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
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241031098147/en/
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
Arrow Electronics (NYSE:ARW)
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