Company Announcements

Arrow Electronics Reports Third-Quarter 2021 Results

-- Record Gross Profit, Operating Income, and Earnings per Share --

-- Third-Quarter Earnings Per Share of $4.00; Non-GAAP Earnings Per Share of $4.04 --

CENTENNIAL, Colo.--(BUSINESS WIRE)--Nov. 4, 2021-- Arrow Electronics, Inc. (NYSE:ARW) today reported third-quarter 2021 sales of $8.51 billion, an increase of 18 percent from sales of $7.23 billion in the third quarter of 2020. Third-quarter net income was $290 million, or $4.00 per share on a diluted basis, compared with a net income of $166 million, or $2.13 per share on a diluted basis, in the third quarter of 2020. Non-GAAP net income1 was $293 million, or $4.04 per share on a diluted basis, in the third quarter of 2021, compared with non-GAAP net income of $162 million, or $2.08 per share on a diluted basis, in the third quarter of 2020.

“Arrow’s unwavering commitment to our customers’ success continues to foster expanding opportunities for our own business in the areas of supply chain as a service, designed and engineered value-enhancing solutions, and secure management of mission-critical software workloads,” said Michael J. Long, chairman, president, and chief executive officer. “The value we deliver to customers and suppliers is inexorably linked to the value we capture for all of our stakeholders, which is enabling us to navigate through the near-term supply challenges. We expect component supply to remain well below demand in the coming quarters and through the better part of 2022.”

Global components third-quarter sales of $6.62 billion reflected an increase of 25 percent year over year and non-GAAP sales increased 24 percent year over year. Asia-Pacific components third-quarter sales increased 16 percent year over year and non-GAAP sales in the region increased 15 percent year over year. Americas components third-quarter sales increased 33 percent year over year. Europe components third-quarter sales increased 33 percent year over year and non-GAAP sales in the region increased 32 percent year over year. Global components third-quarter operating income was $385 million, and third-quarter non-GAAP operating income was $392 million.

“While global components sales were limited by product supply, we were able to attach higher value to those sales than ever before as shown by our margin expansion,” Mr. Long said. “Arrow has never worked harder to help alleviate our customers' and suppliers’ biggest problems with respect to getting components to manufacturing and products to market.”

Global enterprise computing solutions third-quarter sales of $1.89 billion reflected a decrease of 2 percent year over year and non-GAAP sales decreased 3 percent year over year. Europe enterprise computing solutions third-quarter sales increased 5 percent year over year and non-GAAP sales in the region increased 3 percent year over year. Americas enterprise computing solutions third-quarter sales decreased 6 percent year over year. Global enterprise computing solutions third-quarter operating income was $77 million, and third-quarter non-GAAP operating income was $79 million.

“Demand for complex IT solutions continues to grow, and we expect to see significant upside in this area when near-term project postponements and incompletions resulting from supply chain challenges are resolved,” said Mr. Long.

“We are taking advantage of the current environment to enhance the returns profile of our business while further solidifying our balance sheet. Our return on invested capital increased year over year for the sixth straight quarter, and our leverage ratios are at the lowest levels in ten years,” said Chris Stansbury, senior vice president and chief financial officer. “Our strong profitability, positive cash flow from operations, 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 $250 million of shares for the second consecutive quarter. Our current repurchase authorization stands at approximately $413 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.

FOURTH-QUARTER 2021 OUTLOOK

  • Consolidated sales of $8.55 billion to $9.15 billion, with global components sales of $6.35 billion to $6.65 billion, and global enterprise computing solutions sales of $2.2 billion to $2.5 billion
  • Net income per share on a diluted basis of $4.19 to $4.35, and non-GAAP net income per share on a diluted basis1 of $4.37 to $4.53
  • Average tax rate of approximately 23.5 percent compared to the long-term range of 23 to 25 percent
  • Average diluted shares outstanding of 71 million
  • Interest expense of approximately $32 million
  • Expecting average USD-to-Euro exchange rate of $1.16 to €1; changes in foreign currencies to decrease sales by approximately $15 million, and earnings per share on a diluted basis by $.01 compared to the fourth quarter of 2020

Fourth-Quarter 2021 Outlook

 

Reported GAAP
measure

Intangible amortization
expense

Restructuring &
integration charges

Non-GAAP measure

Net income per diluted share

$4.19 - $4.35

$.09

$.09

$4.37 - $4.53

Please refer to the CFO commentary, which can be found at investor.arrow.com, as a supplement to the company’s earnings release.

Arrow Electronics guides innovation forward for over 180,000 leading technology manufacturers and service providers. With 2020 sales of $29 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 fourth quarter of fiscal 2021, 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 and 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: potential adverse effects of the ongoing global COVID-19 pandemic, including actions taken to contain or treat COVID-19, industry conditions, changes in product supply, pricing and customer demand, competition, other vagaries in the global components and global enterprise computing solutions markets, changes in relationships with key suppliers, increased profit margin pressure, foreign currency fluctuation, changes in legal and regulatory matters, non-compliance with certain regulations, such as export, anti-trust, 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 periodic reports on Form 10-K and Form 10-Q and subsequent filings made 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 relating to sales, gross profit, operating income, income before income taxes, provision for income taxes, net income, and net income per basic and diluted share.

The company provides non-GAAP sales, gross profit, operating income, income before income taxes, provision for income taxes, net income, 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, the impact of notes receivable reserves and recoveries related to the AFS business (referred to as “AFS notes receivable reserves and recoveries”), identifiable intangible asset amortization, restructuring, integration, and other charges, impairments of long-lived assets, the impact of wind down, gains and losses on investments, the impact of tax legislation changes, and pension settlement gains and losses.

The company believes that such non-GAAP financial information is useful to investors to assist in assessing and understanding the company’s operating performance and underlying trends in the company’s business because management considers these items referred to above to be outside the company’s core operating results. This non-GAAP financial information is among the primary indicators management uses as a basis for evaluating the company’s financial and operating performance. In addition, the company’s Board of Directors may use this non-GAAP financial information in evaluating management performance and setting management compensation.

The presentation of non-GAAP financial information is not meant to be considered in isolation or as a substitute for, or alternative to, sales, operating income, net income and net income per basic and diluted share determined in accordance with GAAP. Analysis of results and outlook on a non-GAAP basis should be used as a complement to, and in conjunction with, 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

Nine Months Ended

 

October 2, 2021

September 26, 2020

October 2, 2021

September 26, 2020

 

 

 

 

 

Sales

$

8,512,391

 

$

7,231,260

 

$

25,460,941

 

$

20,219,171

 

Cost of sales

7,436,619

 

6,442,670

 

22,454,954

 

17,951,727

 

Gross profit

1,075,772

 

788,590

 

3,005,987

 

2,267,444

 

Operating expenses:

 

 

 

 

Selling, general, and administrative expenses

625,883

 

504,211

 

1,802,534

 

1,539,520

 

Depreciation and amortization

48,054

 

46,732

 

146,924

 

140,654

 

Impairments

 

2,305

 

4,482

 

7,223

 

Restructuring, integration, and other charges (credits)

(3,030

)

(2,840

)

7,157

 

6,948

 

 

670,907

 

550,408

 

1,961,097

 

1,694,345

 

Operating income

404,865

 

238,182

 

1,044,890

 

573,099

 

Equity in earnings of affiliated companies

1,151

 

61

 

2,185

 

308

 

Gain (loss) on investments, net

1,386

 

2,726

 

10,905

 

(3,183

)

Employee benefit plan (expense) credit, net

(1,256

)

595

 

(3,924

)

(1,687

)

Interest and other financing expense, net

(32,667

)

(30,461

)

(97,008

)

(105,596

)

Income before income taxes

373,479

 

211,103

 

957,048

 

462,941

 

Provision for income taxes

82,929

 

44,707

 

218,068

 

113,453

 

Consolidated net income

290,550

 

166,396

 

738,980

 

349,488

 

Noncontrolling interests

523

 

336

 

1,991

 

1,121

 

Net income attributable to shareholders

$

290,027

 

$

166,060

 

$

736,989

 

$

348,367

 

 

 

 

 

 

Net income per share:

 

 

 

 

Basic

$

4.05

 

$

2.15

 

$

10.04

 

$

4.42

 

Diluted

$

4.00

 

$

2.13

 

$

9.92

 

$

4.39

 

 

 

 

 

 

Weighted-average shares outstanding:

 

 

 

 

Basic

71,671

 

77,390

 

73,426

 

78,807

 

Diluted

72,571

 

78,086

 

74,313

 

79,404

 

ARROW ELECTRONICS, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands except par value)

(Unaudited)

 

 

 

 

October 2, 2021

December 31, 2020

 

 

 

ASSETS

 

 

Current assets:

 

 

Cash and cash equivalents

$

215,932

 

$

373,615

 

Accounts receivable, net

9,329,427

 

9,205,343

 

Inventories

3,834,988

 

3,287,308

 

Other current assets

345,317

 

286,633

 

Total current assets

13,725,664

 

13,152,899

 

Property, plant, and equipment, at cost:

 

 

Land

5,691

 

7,940

 

Buildings and improvements

188,205

 

207,614

 

Machinery and equipment

1,537,671

 

1,553,371

 

 

1,731,567

 

1,768,925

 

Less: Accumulated depreciation and amortization

(1,026,172

)

(969,320

)

Property, plant, and equipment, net

705,395

 

799,605

 

Investments in affiliated companies

69,022

 

76,358

 

Intangible assets, net

204,458

 

233,819

 

Goodwill

2,090,248

 

2,115,469

 

Other assets

635,673

 

675,761

 

Total assets

$

17,430,460

 

$

17,053,911

 

LIABILITIES AND EQUITY

 

 

Current liabilities:

 

 

Accounts payable

$

8,005,207

 

$

7,937,889

 

Accrued expenses

1,142,753

 

1,034,361

 

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

353,915

 

158,633

 

Total current liabilities

9,501,875

 

9,130,883

 

Long-term debt

2,039,761

 

2,097,940

 

Other liabilities

651,196

 

676,136

 

 

 

 

Equity:

 

 

Shareholders’ equity:

 

 

Common stock, par value $1:

 

 

Authorized - 160,000 shares in both 2021 and 2020

 

 

Issued - 125,424 shares in both 2021 and 2020

125,424

 

125,424

 

Capital in excess of par value

1,183,009

 

1,165,850

 

Treasury stock (55,370 and 50,581 shares in 2021 and 2020, respectively), at cost

(3,380,984

)

(2,776,821

)

Retained earnings

7,416,740

 

6,679,751

 

Accumulated other comprehensive loss

(165,711

)

(104,885

)

Total shareholders’ equity

5,178,478

 

5,089,319

 

Noncontrolling interests

59,150

 

59,633

 

Total equity

5,237,628

 

5,148,952

 

Total liabilities and equity

$

17,430,460

 

$

17,053,911

 

ARROW ELECTRONICS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

 

Quarter Ended

 

October 2, 2021

September 26, 2020

Cash flows from operating activities:

 

 

Consolidated net income

$

290,550

 

$

166,396

 

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

 

 

Depreciation and amortization

48,054

 

46,732

 

Amortization of stock-based compensation

7,639

 

6,285

 

Equity in earnings of affiliated companies

(1,151

)

(61

)

Deferred income taxes

(2,715

)

(7,369

)

Impairments

 

2,305

 

Gain on investments, net

(1,301

)

(2,727

)

Other

1,539

 

3,995

 

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

 

 

Accounts receivable, net

(545,314

)

87,402

 

Inventories

(211,554

)

207,646

 

Accounts payable

413,992

 

(176,973

)

Accrued expenses

91,481

 

(41,889

)

Other assets and liabilities

23,026

 

(17,015

)

Net cash provided by operating activities

114,246

 

274,727

 

Cash flows from investing activities:

 

 

Acquisition of property, plant, and equipment

(21,176

)

(30,013

)

Other

373

 

(9,116

)

Net cash used for investing activities

(20,803

)

(39,129

)

Cash flows from financing activities:

 

 

Change in short-term and other borrowings

(1,155

)

(78,966

)

Proceeds from long-term bank borrowings, net

154,994

 

328

 

Proceeds from exercise of stock options

3,621

 

2,233

 

Repurchases of common stock

(250,221

)

(153,011

)

Net cash used for financing activities

(92,761

)

(229,416

)

Effect of exchange rate changes on cash

(28,820

)

15,009

 

Net increase (decrease) in cash and cash equivalents

(28,138

)

21,191

 

Cash and cash equivalents at beginning of period

244,070

 

205,828

 

Cash and cash equivalents at end of period

$

215,932

 

$

227,019

 

ARROW ELECTRONICS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

 

Nine Months Ended

 

October 2, 2021

September 26, 2020

Cash flows from operating activities:

 

 

Consolidated net income

$

738,980

 

$

349,488

 

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

 

 

Depreciation and amortization

146,924

 

140,654

 

Amortization of stock-based compensation

29,606

 

28,602

 

Equity in earnings of affiliated companies

(2,185

)

(308

)

Deferred income taxes

9,354

 

38,976

 

Impairments

4,482

 

7,223

 

Loss (gain) on investments, net

(10,820

)

3,198

 

Other

3,190

 

4,043

 

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

 

 

Accounts receivable, net

(262,272

)

533,570

 

Inventories

(581,766

)

260,573

 

Accounts payable

136,329

 

(228,000

)

Accrued expenses

174,583

 

29,154

 

Other assets and liabilities

4,685

 

(7,336

)

Net cash provided by operating activities

391,090

 

1,159,837

 

Cash flows from investing activities:

 

 

Acquisition of property, plant, and equipment

(62,285

)

(89,555

)

Proceeds from sale of property, plant, and equipment

22,171

 

 

Other

373

 

(14,582

)

Net cash used for investing activities

(39,741

)

(104,137

)

Cash flows from financing activities:

 

 

Change in short-term and other borrowings

(15,986

)

(86,155

)

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

289,235

 

(411,362

)

Redemption of notes

(130,860

)

(209,366

)

Proceeds from exercise of stock options

44,938

 

5,963

 

Repurchases of common stock

(661,548

)

(384,750

)

Settlement of forward-starting interest rate swap

 

(48,378

)

Other

(159

)

(141

)

Net cash used for financing activities

(474,380

)

(1,134,189

)

Effect of exchange rate changes on cash

(34,652

)

5,405

 

Net decrease in cash and cash equivalents

(157,683

)

(73,084

)

Cash and cash equivalents at beginning of period

373,615

 

300,103

 

Cash and cash equivalents at end of period

$

215,932

 

227,019

 

ARROW ELECTRONICS, INC.

NON-GAAP SALES RECONCILIATION

(In thousands)

(Unaudited)

 

 

Quarter Ended

 

 

October 2, 2021

September 26, 2020

% Change

 

 

 

 

Consolidated sales, as reported

$

8,512,391

$

7,231,260

17.7

%

Impact of changes in foreign currencies

54,931

 

Non-GAAP consolidated sales

$

8,512,391

$

7,286,191

16.8

%

 

 

 

 

Global components sales, as reported

$

6,623,926

$

5,307,737

24.8

%

Impact of changes in foreign currencies

34,663

 

Non-GAAP global components sales

$

6,623,926

$

5,342,400

24.0

%

 

 

 

 

Americas components sales, as reported

$

2,018,551

$

1,515,962

33.2

%

Impact of changes in foreign currencies

78

 

Non-GAAP Americas components sales

$

2,018,551

$

1,516,040

33.1

%

 

 

 

 

Asia components sales, as reported

$

3,009,390

$

2,595,103

16.0

%

Impact of changes in foreign currencies

18,496

 

Non-GAAP Asia components sales

$

3,009,390

$

2,613,599

15.1

%

 

 

 

 

Europe components sales, as reported

$

1,595,985

$

1,196,672

33.4

%

Impact of changes in foreign currencies

16,089

 

Non-GAAP Europe components sales

$

1,595,985

$

1,212,761

31.6

%

 

 

 

 

Global ECS sales, as reported

$

1,888,465

$

1,923,523

(1.8

)%

Impact of changes in foreign currencies

20,268

 

Non-GAAP global ECS sales

$

1,888,465

$

1,943,791

(2.8

)%

 

 

 

 

Americas ECS sales, as reported

$

1,203,663

$

1,273,791

(5.5

)%

Impact of changes in foreign currencies

5,769

 

Non-GAAP Americas ECS sales

$

1,203,663

$

1,279,560

(5.9

)%

 

 

 

 

Europe ECS sales, as reported

$

684,802

$

649,732

5.4

%

Impact of changes in foreign currencies

14,499

 

Non-GAAP Europe ECS sales

$

684,802

$

664,231

3.1

%

ARROW ELECTRONICS, INC.

NON-GAAP SALES RECONCILIATION

(In thousands)

(Unaudited)

 

 

Nine Months Ended

 

 

October 2, 2021

September 26, 2020

% Change

 

 

 

 

Consolidated sales, as reported

$

25,460,941

$

20,219,171

25.9

%

Impact of changes in foreign currencies

476,218

 

Non-GAAP Consolidated sales

$

25,460,941

$

20,695,389

23.0

%

 

 

 

 

Global components sales, as reported

$

19,677,940

$

14,579,593

35.0

%

Impact of changes in foreign currencies

298,100

 

Non-GAAP Global components sales

$

19,677,940

$

14,877,693

32.3

%

 

 

 

 

Americas components sales, as reported

$

5,690,480

$

4,557,661

24.9

%

Impact of changes in foreign currencies

425

 

Non-GAAP Americas components sales

$

5,690,480

$

4,558,086

24.8

%

 

 

 

 

Asia components sales, as reported

$

9,332,211

$

6,396,853

45.9

%

Impact of changes in foreign currencies

60,105

 

Non-GAAP Asia components sales

$

9,332,211

$

6,456,958

44.5

%

 

 

 

 

Europe components sales, as reported

$

4,655,249

$

3,625,079

28.4

%

Impact of changes in foreign currencies

237,570

 

Non-GAAP Europe components sales

$

4,655,249

$

3,862,649

20.5

%

 

 

 

 

Global ECS sales, as reported

$

5,783,001

$

5,639,578

2.5

%

Impact of changes in foreign currencies

178,118

 

Non-GAAP Global ECS sales

$

5,783,001

$

5,817,696

(0.6

)%

 

 

 

 

Americas ECS sales, as reported

$

3,522,356

$

3,625,735

(2.9

)%

Impact of changes in foreign currencies

37,655

 

Non-GAAP Americas ECS sales

$

3,522,356

$

3,663,390

(3.8

)%

 

 

 

 

Europe ECS sales, as reported

$

2,260,645

$

2,013,843

12.3

%

Impact of changes in foreign currencies

140,463

 

Non-GAAP Europe ECS sales

$

2,260,645

$

2,154,306

4.9

%

ARROW ELECTRONICS, INC.

NON-GAAP EARNINGS RECONCILIATION

(In thousands except per share data)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended October 2, 2021

 

Reported

GAAP

measure

Intangible

amortization

expense

Restructuring

& Integration

charges

AFS Reserves & Recoveries

Impairments

Impact of Wind Down

Other(1)

Non-GAAP

measure

Sales

$

8,512,391

 

$

$

 

$

 

$

$

 

$

 

$

8,512,391

 

Gross Profit

1,075,772

 

 

 

 

 

1,075,772

 

Operating income

404,865

 

9,202

(3,030

)

 

 

 

411,037

 

Income before income taxes

373,479

 

9,202

(3,030

)

 

 

(1,386

)

378,265

 

Provision for income taxes

82,929

 

2,353

(689

)

 

 

(334

)

84,259

 

Consolidated net income

290,550

 

6,849

(2,341

)

 

 

(1,052

)

294,006

 

Noncontrolling interests

523

 

147

 

 

 

 

670

 

Net income attributable to shareholders

$

290,027

 

$

6,702

$

(2,341

)

$

 

$

$

 

$

(1,052

)

$

293,336

 

Net income per diluted share (3)

$

4.00

 

$

0.09

$

(0.03

)

$

 

$

$

 

$

(0.01

)

$

4.04

 

Effective tax rate (4)

22.2

%

 

 

 

 

 

 

22.3

%

 

 

 

 

 

 

 

 

 

Three months ended September 26, 2020

 

Reported

GAAP

measure

Intangible

amortization

expense

Restructuring

& Integration

charges

AFS Reserves & Recoveries

Impairments

Impact of Wind Down

Other(3)

Non-GAAP

measure

Sales

$

7,231,260

 

$

$

 

$

 

$

$

 

$

 

$

7,231,260

 

Gross Profit

788,590

 

 

 

(475

)

 

788,115

 

Operating income

238,182

 

9,352

(2,840

)

(233

)

2,305

(2,487

)

 

244,279

 

Income before income taxes

211,103

 

9,352

(2,840

)

(233

)

2,305

(2,478

)

(4,495

)

212,714

 

Provision for income taxes

44,707

 

2,396

(665

)

(56

)

556

(583

)

3,797

 

50,152

 

Consolidated net income

166,396

 

6,956

(2,175

)

(177

)

1,749

(1,895

)

(8,292

)

162,562

 

Noncontrolling interests

336

 

146

 

 

 

 

482

 

Net income attributable to shareholders

$

166,060

 

$

6,810

$

(2,175

)

$

(177

)

$

1,749

$

(1,895

)

$

(8,292

)

$

162,080

 

Net income per diluted share (4)

$

2.13

 

$

0.09

$

(0.03

)

$

 

$

0.02

$

(0.02

)

$

(0.11

)

$

2.08

 

Effective tax rate (5)

21.2

%

 

 

 

 

 

 

23.6

%

ARROW ELECTRONICS, INC.

NON-GAAP EARNINGS RECONCILIATION

(In thousands except per share data)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine months ended October 2, 2021

 

Reported

GAAP

measure

Intangible

amortization

expense

Restructuring

& Integration

charges

AFS Reserves & Recoveries

Impairments

Impact of Wind Down

Other(2)

Non-GAAP

measure

Sales

$

25,460,941

 

$

$

$

 

$

$

 

$

 

$

25,460,941

 

Gross Profit

3,005,987

 

 

 

 

3,005,987

 

Operating income

1,044,890

 

27,844

7,157

 

4,482

 

 

1,084,373

 

Income before income taxes

957,048

 

27,844

7,157

 

4,482

 

(10,724

)

985,807

 

Provision for income taxes

218,068

 

7,120

1,487

 

1,078

 

(2,581

)

225,172

 

Consolidated net income

738,980

 

20,724

5,670

 

3,404

 

(8,143

)

760,635

 

Noncontrolling interests

1,991

 

447

 

 

 

2,438

 

Net income attributable to shareholders

$

736,989

 

$

20,277

$

5,670

$

 

$

3,404

$

 

$

(8,143

)

$

758,197

 

Net income per diluted share (4)

$

9.92

 

$

0.27

$

0.08

$

 

$

0.05

$

 

$

(0.11

)

$

10.20

 

Effective tax rate (5)

22.8

%

 

 

 

 

 

 

22.8

%

 

 

 

 

 

 

 

 

 

Nine months ended September 26, 2020

 

Reported

GAAP

measure

Intangible

amortization

expense

Restructuring

& Integration

charges

AFS Reserves & Recoveries

Impairments

Impact of Wind Down

Other(3)

Non-GAAP

measure

Sales

$

20,219,171

 

$

$

$

 

$

$

 

$

 

$

20,219,171

 

Gross Profit

2,267,444

 

 

(11,171

)

 

2,256,273

 

Operating income

573,099

 

29,041

6,948

(956

)

7,223

(14,311

)

 

601,044

 

Income before income taxes

462,941

 

29,041

6,948

(956

)

7,223

(14,292

)

1,414

 

492,319

 

Provision for income taxes

113,453

 

7,461

2,219

(231

)

2,356

(3,245

)

1,608

 

123,621

 

Consolidated net income

349,488

 

21,580

4,729

(725

)

4,867

(11,047

)

(194

)

368,698

 

Noncontrolling interests

1,121

 

420

 

 

 

1,541

 

Net income attributable to shareholders

$

348,367

 

$

21,160

$

4,729

$

(725

)

$

4,867

$

(11,047

)

$

(194

)

$

367,157

 

Net income per diluted share (4)

$

4.39

 

$

0.27

$

0.06

$

(0.01

)

$

0.06

$

(0.14

)

$

 

$

4.62

 

Effective tax rate (5)

24.5

%

 

 

 

 

 

 

25.1

%

 

 

 

 

 

 

 

 

 

(1) Other includes gain on investments, net.

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

(3) Other includes (gain) loss on investments, net, non-recurring tax items, and pension settlement gain.

(4) In all periods presented the sum of the components for 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 by GAAP measure and as a non-GAAP measure.

ARROW ELECTRONICS, INC.

SEGMENT INFORMATION

(In thousands)

(Unaudited)

 

 

 

 

Quarter Ended

Nine Months Ended

 

October 2, 2021

September 26, 2020

October 2, 2021

September 26, 2020

Sales:

 

 

 

 

Global components

$

6,623,926

 

$

5,307,737

 

$

19,677,940

 

$

14,579,593

 

Global ECS

1,888,465

 

1,923,523

 

5,783,001

 

5,639,578

 

Consolidated

$

8,512,391

 

$

7,231,260

 

$

25,460,941

 

$

20,219,171

 

Operating income (loss):

 

 

 

 

Global components (a)

$

385,353

 

$

203,603

 

$

1,001,772

 

$

550,206

 

Global ECS (b)

76,793

 

82,529

 

235,251

 

197,883

 

Corporate (c)

(57,281

)

(47,950

)

(192,133

)

(174,990

)

Consolidated

$

404,865

 

$

238,182

 

$

1,044,890

 

$

573,099

 

(a)

Global components operating income includes $12.5 million and $2.4 million related to proceeds from legal settlements for the first nine months of 2021 and 2020, respectively, and $4.5 million in impairment charges related to various long lived assets for the first nine months of 2021.

(b)

Global ECS operating income for the first nine months of 2020 includes $4.9 million in impairment charges related to various long-lived assets, and reserves and other adjustments of approximately $29.9 million primarily related to foreign tax and other loss contingencies. These reserves are principally associated with transactional taxes on activity from several prior years, not significant to any one year.

(c)

Corporate operating income includes restructuring, integration, and other charges (credits) of $(3.0) million and $7.2 million for the third quarter and first nine months of 2021, respectively, and $(2.8) million and $6.9 million for the third quarter and first nine months of 2020, respectively, and $2.3 million of impairment charges related to long-lived assets for the third quarter and first nine months of 2020.

NON-GAAP SEGMENT RECONCILIATION

 

 

 

 

Quarter Ended

Nine Months Ended

 

October 2, 2021

September 26, 2020

October 2, 2021

September 26, 2020

 

 

 

 

 

Global components operating income, as reported

$

385,353

$

203,603

 

$

1,001,772

$

550,206

 

Intangible assets amortization expense

6,974

7,014

 

20,973

21,653

 

Impairments

 

4,482

 

Impact of wind down

(2,487

)

(14,311

)

AFS notes receivable recoveries

(233

)

(956

)

Global components non-GAAP operating income

$

392,327

$

207,897

 

$

1,027,227

$

556,592

 

 

 

 

 

 

Global ECS operating income, as reported

$

76,793

$

82,529

 

$

235,251

$

197,883

 

Intangible assets amortization expense

2,228

2,338

 

6,871

7,388

 

Impairments

 

4,918

 

Global ECS non-GAAP operating income

$

79,021

$

84,867

 

$

242,122

$

210,189

 

 

Steven O’Brien,
Vice President, Investor Relations
303-824-4544

John Hourigan,
Vice President, Global Communications
303-824-4586

Source: Arrow Electronics, Inc.