Press release

CORRECTING and REPLACING Arrow Electronics Reports Fourth-Quarter and Full-Year 2022 Results

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In the FIRST-QUARTER 2023 OUTLOOK section, the final bullet has been updated. Also, in the First-Quarter 2023 GAAP to non-GAAP Outlook Reconciliation table, in the Global components sales, constant currency line, the second % change column has been updated.

The updated release reads:

ARROW ELECTRONICS REPORTS FOURTH-QUARTER AND FULL-YEAR 2022 RESULTS

— Fourth-Quarter Earnings Per Share of $5.66; Non-GAAP Earnings Per Share of $5.69 —

— Announces Additional $1 Billion Share Repurchase Authorization —

Arrow Electronics, Inc. (NYSE:ARW) today reported fourth-quarter 2022 sales of $9.32 billion, an increase of 3 percent year over year, and an increase of 8 percent year over year on a constant currency basis1.Fourth-quarter 2022 net income was $349 million, or $5.66 per share on a diluted basis, compared with net income of $371 million, or $5.26 per share on a diluted basis, in the fourth quarter of 2021. Non-GAAP net income1 was $351 million, or $5.69 per share on a diluted basis, in the fourth quarter of 2022, compared with non-GAAP net income of $379 million, or $5.37 per share on a diluted basis, in the fourth quarter of 2021. In the fourth quarter of 2022, changes in foreign currencies had negative impacts on growth of approximately $357 million on sales and $0.19 on earnings per share on a diluted basis compared to the fourth quarter of 2021.

“I am pleased to report that this was another great quarter. Both our global components and global enterprise computing solutions businesses performed well in market conditions that remain challenging,” said Sean Kerins, Arrow’s president and chief executive officer. “Our dedicated team helped us deliver strong quarterly sales, gross profit, operating income, and earnings per share.”

Global components fourth-quarter sales of $6.83 billion reflected an increase of 2 percent year over year, and an increase of 6 percent year over year on a constant currency basis. Americas components fourth-quarter sales increased 9 percent year over year. Europe components fourth-quarter sales increased 23 percent year over year, and increased 38 percent year over year on a constant currency basis. Asia-Pacific components fourth-quarter sales decreased 14 percent year over year. Global components fourth-quarter operating income was $443 million and fourth-quarter non-GAAP operating income was $449 million.

“Demand for electronic components and associated design, engineering and supply chain services generally remained healthy in the Americas and Europe regions, but we experienced softer demand in Asia, particularly in China. We are proud to service a variety of industries and provide products from a diverse group of suppliers to a diverse group of customers around the world,” said Mr. Kerins.

Global enterprise computing solutions (“ECS”) fourth-quarter sales of $2.50 billion reflected an increase of 7 percent year over year, and an increase of 12 percent year over year on a constant currency basis. Europe enterprise computing solutions fourth-quarter sales increased 11 percent year over year, and increased 24 percent year over year on a constant currency basis. Americas enterprise computing fourth-quarter sales increased 4 percent year over year. Global enterprise computing solutions fourth-quarter operating income was $155 million. Fourth-quarter non-GAAP operating income was $156 million.

“Hardware supply constraints are easing, and demand remained strong for most of our key technology categories. We continue to see strength in cloud, IT-as-a-Service and enterprise software adoption, and we were pleased with the results of the business,” said Mr. Kerins.

“Enhancing shareholder value remains a top priority,” said Raj Agrawal, senior vice president and chief financial officer. “Our strong financial returns and the effective management of our balance sheet have enabled us to deliver on our commitment to return cash to shareholders by repurchasing $300 million of shares during the fourth quarter. We are also pleased to announce that our Board of Directors has approved an additional $1 billion to our repurchase authorization2. Returning cash to shareholders through our stock repurchase plan remains one of our priorities, and this new authorization reflects that commitment.”

FULL-YEAR RESULTS

Full-year 2022 sales of $37.12 billion increased 8 percent year over year, and increased 11 percent year over year on a constant currency basis. Net income for 2022 was $1.43 billion, or $21.80 per share on a diluted basis, compared with net income of $1.11 billion, or $15.10 per share on a diluted basis, for 2021. Non-GAAP net incomewas $1.47 billion, or $22.38 per share on a diluted basis, in 2022 compared with non-GAAP net income of $1.14 billion, or $15.50 per share on a diluted basis, for 2021. In 2022, changes in foreign currencies had negative impacts on growth of approximately $1.18 billion on sales, and $0.53 on earnings per share on a diluted basis compared to 2021.

“In 2022, we delivered the best financial results in the history of the company. Throughout the year, we continued to make investments to support our customer needs, and we continued to grow and generate strong shareholder returns in the process,” said Mr. Kerins. “We continue to have confidence in the business and Arrow’s long-term growth potential.”

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

2 See additional information related to the company’s share repurchase program located at page 3 of this press release.

FIRST-QUARTER 2023 OUTLOOK

  • Consolidated sales of $8.33 billion to $8.93 billion, with global components sales of $6.55 billion to $6.85 billion, and global enterprise computing solutions sales of $1.78 billion to $2.08 billion
  • Net income per share on a diluted basis of $4.24 to $4.44, and non-GAAP net income per share on a diluted basis of $4.40 to $4.60
  • Average tax rate of approximately 23.5 percent compared to the long-term range of 23 to 25 percent
  • Average diluted shares outstanding of 59.5 million
  • Interest expense of approximately $68 million
  • Expecting the average USD-to-Euro exchange rate to be $1.07 to €1 compared to $1.12 to €1 in the first quarter of 2022
  • Changes in foreign currencies to decrease sales by approximately $182 million, and earnings per share on a diluted basis by $0.13 compared to the first quarter of 2022
  • Changes in foreign currencies to increase quarter-over-quarter growth in sales by $175 million and earnings per share on a diluted basis by $0.11 compared to the fourth quarter of 2022
  • On a constant currency basis, our first-quarter guidance implies a sequential growth rate range of down 2 percent to 6 percent for global components and down 18 percent to 30 percent for global enterprise computing solutions, when compared to the fourth quarter of 2022

First-Quarter 2023 GAAP to non-GAAP Outlook Reconciliation

 

NON-GAAP SALES RECONCILIATION

 

 

Quarter Ended

 

Quarter Ended

 

(in billions)

April 1, 2023

April 2, 2022

% Change

April 1, 2023

December

31, 2022

% Change

 

 

 

 

 

 

 

Global components sales, GAAP

$6.55 – 6.85

$

7.20

 

(9)% – (5)%

$6.55 – 6.85

$

6.83

(4%) – 0%

Impact of changes in foreign currencies

 

(0.13

)

 

 

0.13

 

Global components sales, constant currency

$6.55 – 6.85

$

7.07

 

(7)% – (3)%

$6.55 – 6.85

$

6.96

(6%) – (2)%

 

 

 

 

 

 

 

Global ECS sales, GAAP

$1.78 – 2.08

$

1.88

 

(5%) – 11%

$1.78 – 2.08

$

2.50

(29)% – (17)%

Impact of changes in foreign currencies

 

(0.05

)

 

 

0.05

 

Global ECS sales, constant currency

$1.78 – 2.08

$

1.83

 

(3%) – 14%

$1.78 – 2.08

$

2.55

(30)% – (18)%

NON-GAAP EARNINGS RECONCILIATION

 

Reported GAAP

measure

Intangible amortization

expense

Restructuring &

integration charges

Non-GAAP measure

Net income per diluted share

$4.24 to $4.44

$0.10

$0.06

$4.40 to $4.60

Please refer to the CFO commentary, which can be found at investor.arrow.com, as a supplement to the company’s earnings release. The company uses its website as a tool to disclose important information about the company and comply with its disclosure obligations under Regulation Fair Disclosure.

Arrow Electronics guides innovation forward for over 210,000 leading technology manufacturers and service providers. With 2022 sales of $37 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 first quarter of fiscal 2023, 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 expectations regarding customer and market demand and trends, supply chain constraints, business strategy, and shareholder returns. 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: unfavorable economic conditions; disruptions or inefficiencies in the supply chain, including any potential adverse effects of the ongoing global COVID-19 pandemic; political instability; impacts of military conflict, including the conflict in Ukraine; industry conditions; changes in product supply, pricing and customer demand; competition; other vagaries in the global components and the global enterprise computing solutions 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; and the company’s ability to generate cash flow. For a further discussion of these and other factors that could cause the company’s future results to differ materially from any forward-looking statements, see the section entitled “Risk Factors” in the company’s most recent Annual Report on Form 10-K, as well as in other filings the company makes with the Securities and Exchange Commission. Shareholders and other readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. The company undertakes no obligation to update publicly or revise any of the forward-looking statements.

Certain Non-GAAP Financial Information

In addition to disclosing financial results that are determined in accordance with accounting principles generally accepted in the United States (“GAAP”), the company also provides certain non-GAAP financial information. The company provides non-GAAP sales, gross profit, operating income, income before income taxes, provision for income taxes, consolidated net income, noncontrolling interests, net income attributable to shareholders, effective tax rate and net income per share on a diluted basis, which are non-GAAP measures adjusted for the impact of changes in foreign currencies (referred to as “changes in foreign currencies” 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, pension settlement loss and net gains and losses on investments. Management believes that providing this additional information is useful to the reader to better assess and understand the company’s operating performance 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.

Share Repurchase Program

The expansion of our share repurchase program occurred on January 31, 2023 and will permit the company to continue repurchasing shares of its common stock as market and business conditions warrant through open market purchases, privately negotiated transactions or otherwise in accordance with applicable federal securities laws, including through Rule 10b5-1 trading plans and under Rule 10b-18 of the Securities and Exchange Act of 1934, as amended. Repurchases may continue from time to time, as conditions permit, until the number of shares authorized to be repurchased have been acquired, or until the authorization to repurchase is terminated, whichever occurs first, and the company has no obligation to repurchase any amount under the program.

ARROW ELECTRONICS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands except per share data)

 

 

 

 

 

Quarter Ended

Year Ended

 

December 31, 2022

December 31, 2021

December 31, 2022

December 31, 2021

 

(Unaudited)

(Unaudited)

 

 

Sales

$

9,323,023

 

$

9,016,077

 

$

37,124,422

 

$

34,477,018

 

Cost of sales

 

8,117,028

 

 

7,819,699

 

 

32,287,797

 

 

30,274,653

 

Gross profit

 

1,205,995

 

 

1,196,378

 

 

4,836,625

 

 

4,202,365

 

Operating expenses:

 

 

 

 

Selling, general, and administrative expenses

 

635,090

 

 

632,496

 

 

2,567,008

 

 

2,435,030

 

Depreciation and amortization

 

45,595

 

 

48,196

 

 

187,382

 

 

195,120

 

Restructuring, integration, and other charges

 

2,714

 

 

3,754

 

 

13,741

 

 

15,393

 

 

 

683,399

 

 

684,446

 

 

2,768,131

 

 

2,645,543

 

Operating income

 

522,596

 

 

511,932

 

 

2,068,494

 

 

1,556,822

 

Equity in earnings of affiliated companies

 

2,938

 

 

1,323

 

 

7,664

 

 

3,508

 

Gain (loss) on investments, net

 

8,356

 

 

2,046

 

 

(2,857

)

 

12,951

 

Employee benefit plan expense, net

 

(889

)

 

(1,256

)

 

(3,503

)

 

(5,180

)

Interest and other financing expense, net

 

(62,221

)

 

(34,719

)

 

(185,648

)

 

(131,727

)

Income before income taxes

 

470,780

 

 

479,326

 

 

1,884,150

 

 

1,436,374

 

Provision for income taxes

 

116,719

 

 

107,838

 

 

448,992

 

 

325,906

 

Consolidated net income

 

354,061

 

 

371,488

 

 

1,435,158

 

 

1,110,468

 

Noncontrolling interests

 

4,659

 

 

280

 

 

8,274

 

 

2,271

 

Net income attributable to shareholders

$

349,402

 

$

371,208

 

$

1,426,884

 

$

1,108,197

 

 

 

 

 

 

Net income per share:

 

 

 

 

Basic

$

5.71

 

$

5.34

 

$

22.01

 

$

15.29

 

Diluted

$

5.66

 

$

5.26

 

$

21.80

 

$

15.10

 

 

 

 

 

 

Weighted-average shares outstanding:

 

 

 

 

Basic

 

61,175

 

 

69,556

 

 

64,838

 

 

72,472

 

Diluted

 

61,739

 

 

70,550

 

 

65,453

 

 

73,385

 

ARROW ELECTRONICS, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands except par value)

 

 

 

 

December 31, 2022

December 31, 2021

 

 

 

ASSETS

 

 

Current assets:

 

 

Cash and cash equivalents

$

176,915

 

$

222,194

 

Accounts receivable, net

 

12,322,717

 

 

11,123,946

 

Inventories

 

5,319,369

 

 

4,201,965

 

Other current assets

 

521,339

 

 

345,218

 

Total current assets

 

18,340,340

 

 

15,893,323

 

Property, plant, and equipment, at cost:

 

 

Land

 

5,691

 

 

5,736

 

Buildings and improvements

 

184,211

 

 

186,097

 

Machinery and equipment

 

1,583,661

 

 

1,523,919

 

 

 

1,773,563

 

 

1,715,752

 

Less: Accumulated depreciation and amortization

 

(1,177,107

)

 

(1,032,941

)

Property, plant, and equipment, net

 

596,456

 

 

682,811

 

Investments in affiliated companies

 

65,112

 

 

63,695

 

Intangible assets, net

 

159,137

 

 

195,029

 

Goodwill

 

2,027,626

 

 

2,080,371

 

Other assets

 

574,511

 

 

620,311

 

Total assets

$

21,763,182

 

$

19,535,540

 

LIABILITIES AND EQUITY

 

 

Current liabilities:

 

 

Accounts payable

$

10,460,419

 

$

9,617,084

 

Accrued expenses

 

1,339,302

 

 

1,326,386

 

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

 

589,883

 

 

382,619

 

Total current liabilities

 

12,389,604

 

 

11,326,089

 

Long-term debt

 

3,182,964

 

 

2,244,443

 

Other liabilities

 

579,261

 

 

624,162

 

Equity:

 

 

Shareholders’ equity:

 

 

Common stock, par value $1:

 

 

Authorized – 160,000 shares in both 2022 and 2021

 

 

Issued – 125,424 shares in both 2022 and 2021

 

125,424

 

 

125,424

 

Capital in excess of par value

 

1,208,708

 

 

1,189,845

 

Treasury stock (66,175 and 57,358 shares in 2022 and 2021, respectively), at cost

 

(4,637,345

)

 

(3,629,265

)

Retained earnings

 

9,214,832

 

 

7,787,948

 

Accumulated other comprehensive loss

 

(365,262

)

 

(191,657

)

Total shareholders’ equity

 

5,546,357

 

 

5,282,295

 

Noncontrolling interests

 

64,996

 

 

58,551

 

Total equity

 

5,611,353

 

 

5,340,846

 

Total liabilities and equity

$

21,763,182

 

$

19,535,540

 

ARROW ELECTRONICS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

 

Quarter Ended

 

December 31, 2022

December 31, 2021

Cash flows from operating activities:

 

 

Consolidated net income

$

354,061

 

$

371,488

 

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

 

 

Depreciation and amortization

 

45,595

 

 

48,196

 

Amortization of stock-based compensation

 

7,921

 

 

6,511

 

Equity in earnings of affiliated companies

 

(2,938

)

 

(1,323

)

Deferred income taxes

 

(14,518

)

 

15,395

 

Gain on investments, net

 

(8,356

)

 

(2,013

)

Other

 

939

 

 

757

 

Change in assets and liabilities:

 

 

Accounts receivable, net

 

(801,426

)

 

(1,846,887

)

Inventories

 

(154,022

)

 

(378,839

)

Accounts payable

 

779,217

 

 

1,630,583

 

Accrued expenses

 

(90,566

)

 

217,358

 

Other assets and liabilities

 

(7,220

)

 

(33,333

)

Net cash provided by operating activities

 

108,687

 

 

27,893

 

Cash flows from investing activities:

 

 

Acquisition of property, plant, and equipment

 

(24,056

)

 

(20,766

)

Other

 

320

 

 

389

 

Net cash used for investing activities

 

(23,736

)

 

(20,377

)

Cash flows from financing activities:

 

 

Change in short-term and other borrowings

 

(17,700

)

 

28,924

 

Repayments of long-term bank borrowings, net

 

(5,018

)

 

(289,922

)

Net proceeds from note offerings

 

 

 

495,134

 

Proceeds from exercise of stock options

 

906

 

 

2,044

 

Repurchases of common stock

 

(324,233

)

 

(250,000

)

Settlement of forward-starting interest rate swap

 

 

 

24,896

 

Net cash provided by (used for) financing activities

 

(346,045

)

 

11,076

 

Effect of exchange rate changes on cash

 

104,024

 

 

(12,330

)

Net increase (decrease) in cash and cash equivalents

 

(157,070

)

 

6,262

 

Cash and cash equivalents at beginning of period

 

333,985

 

 

215,932

 

Cash and cash equivalents at end of period

$

176,915

 

$

222,194

 

ARROW ELECTRONICS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

 

 

Year Ended

 

December 31, 2022

December 31, 2021

Cash flows from operating activities:

 

 

Consolidated net income

$

1,435,158

 

$

1,110,468

 

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

 

 

Depreciation and amortization

 

187,382

 

 

195,120

 

Amortization of stock-based compensation

 

42,930

 

 

36,117

 

Equity in (earnings) losses of affiliated companies

 

(7,664

)

 

(3,508

)

Deferred income taxes

 

(13,050

)

 

24,749

 

Loss (gain) on investments, net

 

2,857

 

 

(12,833

)

Other

 

3,612

 

 

8,429

 

Change in assets and liabilities:

 

 

Accounts receivable, net

 

(1,430,400

)

 

(2,109,159

)

Inventories

 

(1,165,785

)

 

(960,605

)

Accounts payable

 

945,819

 

 

1,766,912

 

Accrued expenses

 

102,193

 

 

391,941

 

Other assets and liabilities

 

(136,129

)

 

(28,648

)

Net cash provided by (used for) operating activities

 

(33,077

)

 

418,983

 

Cash flows from investing activities:

 

 

Acquisition of property, plant, and equipment

 

(78,836

)

 

(83,051

)

Proceeds from sale of property, plant, and equipment

 

 

 

22,171

 

Proceeds from collections of notes receivable

 

21,125

 

 

762

 

Net cash used for investing activities

 

(57,711

)

 

(60,118

)

Cash flows from financing activities:

 

 

Change in short-term and other borrowings

 

258,816

 

 

12,938

 

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

 

1,233,250

 

 

(687

)

Redemption of notes

 

(350,000

)

 

(130,860

)

Net proceeds from note offering

 

 

 

495,134

 

Proceeds from exercise of stock options

 

17,340

 

 

46,982

 

Repurchases of common stock

 

(1,049,487

)

 

(911,548

)

Settlement of forward-starting interest rate swap

 

 

 

24,896

 

Other

 

(137

)

 

(159

)

Net cash provided by (used for) used for financing activities

 

109,782

 

 

(463,304

)

Effect of exchange rate changes on cash

 

(64,273

)

 

(46,982

)

Net increase (decrease) in cash and cash equivalents

 

(45,279

)

 

(151,421

)

Cash and cash equivalents at beginning of year

 

222,194

 

 

373,615

 

Cash and cash equivalents at end of year

$

176,915

 

$

222,194

 

ARROW ELECTRONICS, INC.

NON-GAAP SALES RECONCILIATION

(In thousands)

(Unaudited)

 

 

Quarter Ended

 

 

December 31, 2022

December 31, 2021

%

Change

 

 

 

 

Consolidated sales, as reported

$

9,323,023

$

9,016,077

 

3.4

%

Impact of changes in foreign currencies

 

 

(356,580

)

 

Consolidated sales, constant currency

$

9,323,023

$

8,659,497

 

7.7

%

 

 

 

 

Global components sales, as reported

$

6,827,029

$

6,679,577

 

2.2

%

Impact of changes in foreign currencies

 

 

(246,723

)

 

Global components sales, constant currency

$

6,827,029

$

6,432,854

 

6.1

%

 

 

 

 

Americas components sales, as reported

$

2,326,995

$

2,137,386

 

8.9

%

Impact of changes in foreign currencies

 

 

(3,093

)

 

Americas components sales, constant currency

$

2,326,995

$

2,134,293

 

9.0

%

 

 

 

 

Asia components sales, as reported

$

2,543,294

$

2,948,594

 

(13.7

) %

Impact of changes in foreign currencies

 

 

(71,987

)

 

Asia components sales, constant currency

$

2,543,294

$

2,876,607

 

(11.6

) %

 

 

 

 

Europe components sales, as reported

$

1,956,740

$

1,593,597

 

22.8

%

Impact of changes in foreign currencies

 

 

(171,643

)

 

Europe components sales, constant currency

$

1,956,740

$

1,421,954

 

37.6

%

 

 

 

 

Global ECS sales, as reported

$

2,495,994

$

2,336,500

 

6.8

%

Impact of changes in foreign currencies

 

 

(109,857

)

 

Global ECS sales, constant currency

$

2,495,994

$

2,226,643

 

12.1

%

 

 

 

 

Americas ECS sales, as reported

$

1,404,224

$

1,356,598

 

3.5

%

Impact of changes in foreign currencies

 

 

(10,277

)

 

Americas ECS sales, constant currency

$

1,404,224

$

1,346,321

 

4.3

%

 

 

 

 

Europe ECS sales, as reported

$

1,091,770

$

979,902

 

11.4

%

Impact of changes in foreign currencies

 

 

(99,580

)

 

Europe ECS sales, constant currency

$

1,091,770

$

880,322

 

24.0

%

 

 

 

 

ARROW ELECTRONICS, INC.

NON-GAAP SALES RECONCILIATION

(In thousands)

(Unaudited)

 

 

 

 

Year Ended

 

 

December 31, 2022

December 31, 2021

%

Change

 

 

 

 

Consolidated sales, as reported

$

37,124,422

$

34,477,018

 

7.7

%

Impact of changes in foreign currencies

 

 

(1,178,364

)

 

Consolidated sales, constant currency

$

37,124,422

$

33,298,654

 

11.5

%

 

 

 

 

Global components sales, as reported

$

28,788,003

$

26,357,517

 

9.2

%

Impact of changes in foreign currencies

 

 

(811,975

)

 

Global components sales, constant currency

$

28,788,003

$

25,545,542

 

12.7

%

 

 

 

 

Americas components sales, as reported

$

9,592,547

$

7,827,866

 

22.5

%

Impact of changes in foreign currencies

 

 

(9,068

)

 

Americas components sales, constant currency

$

9,592,547

$

7,818,798

 

22.7

%

 

 

 

 

Asia components sales, as reported

$

11,567,482

$

12,280,805

 

(5.8

) %

Impact of changes in foreign currencies

 

 

(141,010

)

 

Asia components sales, constant currency

$

11,567,482

$

12,139,795

 

(4.7

) %

 

 

 

 

Europe components sales, as reported

$

7,627,974

$

6,248,846

 

22.1

%

Impact of changes in foreign currencies

 

 

(661,897

)

 

Europe components sales, constant currency

$

7,627,974

$

5,586,949

 

36.5

%

 

 

 

 

Global ECS sales, as reported

$

8,336,419

$

8,119,501

 

2.7

%

Impact of changes in foreign currencies

 

 

(366,389

)

 

Global ECS sales, constant currency

$

8,336,419

$

7,753,112

 

7.5

%

 

 

 

 

Americas ECS sales, as reported

$

4,847,027

$

4,878,954

 

(0.7

) %

Impact of changes in foreign currencies

 

 

(25,737

)

 

Americas ECS sales, constant currency

$

4,847,027

$

4,853,217

 

(0.1

) %

 

 

 

 

Europe ECS sales, as reported

$

3,489,392

$

3,240,547

 

7.7

%

Impact of changes in foreign currencies

 

 

(340,652

)

 

Europe ECS sales, constant currency

$

3,489,392

$

2,899,895

 

20.3

%

ARROW ELECTRONICS, INC.

NON-GAAP EARNINGS RECONCILIATION

(In thousands except per share data)

(Unaudited)

 

Three months ended December 31, 2022

 

Reported

GAAP

measure

Intangible

amortization

expense

Restructuring

& Integration

charges

Other(1)

Non-GAAP

measure

Operating income

$

522,596

 

$

8,170

$

2,714

$

 

$

533,480

 

Income before income taxes

 

470,780

 

 

8,170

 

2,714

 

(8,356

)

 

473,308

 

Provision for income taxes

 

116,719

 

 

2,056

 

472

 

(2,003

)

 

117,244

 

Consolidated net income

 

354,061

 

 

6,114

 

2,242

 

(6,353

)

 

356,064

 

Noncontrolling interests

 

4,659

 

 

127

 

 

 

 

4,786

 

Net income attributable to shareholders

$

349,402

 

$

5,987

$

2,242

$

(6,353

)

$

351,278

 

Net income per diluted share(5)

$

5.66

 

$

0.10

$

0.04

$

(0.10

)

$

5.69

 

Effective tax rate (3)

 

24.8

%

 

 

 

 

24.8

%

 

 

 

 

 

 

Three months ended December 31, 2021

 

Reported

GAAP

measure

Intangible

amortization

expense

Restructuring

& Integration

charges

Other(1)

Non-GAAP

measure

Operating income

$

511,932

 

$

9,086

$

3,754

$

 

$

524,772

 

Income before income taxes

 

479,326

 

 

9,086

 

3,754

 

(2,046

)

 

490,120

 

Provision for income taxes

 

107,838

 

 

2,337

 

854

 

(492

)

 

110,537

 

Consolidated net income

 

371,488

 

 

6,749

 

2,900

 

(1,554

)

 

379,583

 

Noncontrolling interests

 

280

 

 

143

 

 

 

 

423

 

Net income attributable to shareholders

$

371,208

 

$

6,606

$

2,900

$

(1,554

)

$

379,160

 

Net income per diluted share(5)

$

5.26

 

$

0.09

$

0.04

$

(0.02

)

$

5.37

 

Effective tax rate (3)

 

22.5

%

22.6

%

ARROW ELECTRONICS, INC.

NON-GAAP EARNINGS RECONCILIATION

(In thousands except per share data)

(Unaudited)

 

Year ended December 31, 2022

 

Reported

GAAP

measure

Intangible

amortization

expense

Restructuring

& Integration

charges

Other(1)

Non-GAAP

measure

Operating income

$

2,068,494

 

$

34,692

$

13,741

$

 

$

2,116,927

 

Income before income taxes

 

1,884,150

 

 

34,692

 

13,741

 

2,857

 

 

1,935,440

 

Provision for income taxes

 

448,992

 

 

8,848

 

2,931

 

708

 

 

461,479

 

Consolidated net income

 

1,435,158

 

 

25,844

 

10,810

 

2,149

 

 

1,473,961

 

Noncontrolling interests

 

8,274

 

 

525

 

 

 

 

8,799

 

Net income attributable to shareholders

$

1,426,884

 

$

25,319

$

10,810

$

2,149

 

$

1,465,162

 

Net income per diluted share(5)

$

21.80

 

$

0.39

$

0.17

$

0.03

 

$

22.38

 

Effective tax rate (3)

 

23.8

%

 

 

 

 

23.8

%

 

 

 

 

 

 

Year ended December 31, 2021

 

Reported

GAAP

measure

Intangible

amortization

expense

Restructuring

& Integration

charges (4)

Other(2)

Non-GAAP

measure

Operating income

$

1,556,822

 

$

36,930

$

15,393

$

 

$

1,609,145

 

Income (loss) before income taxes

 

1,436,374

 

 

36,930

 

15,393

 

(12,770

)

 

1,475,927

 

Provision for income taxes

 

325,906

 

 

9,457

 

3,419

 

(3,073

)

 

335,709

 

Consolidated net income (loss)

 

1,110,468

 

 

27,473

 

11,974

 

(9,697

)

 

1,140,218

 

Noncontrolling interests

 

2,271

 

 

590

 

 

 

 

2,861

 

Net income attributable to shareholders

$

1,108,197

 

$

26,883

$

11,974

$

(9,697

)

$

1,137,357

 

Net income (loss) per diluted share(5)

$

15.10

 

$

0.37

$

0.16

$

(0.13

)

$

15.50

 

Effective tax rate (3)

 

22.7

%

 

 

 

 

22.7

%

(1)

Other includes (gain) loss on investments, net.

(2)

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

(3)

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.

(4)

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

(5)

The sum of components for diluted EPS, as adjusted, may not agree to totals, as presented, due to rounding.

ARROW ELECTRONICS, INC.

SEGMENT INFORMATION

(In thousands)

(Unaudited)

 

 

 

 

Quarter Ended

Year Ended

 

December 31, 2022

December 31, 2021

December 31, 2022

December 31, 2021

Sales:

 

 

 

 

Global components

$

6,827,029

 

$

6,679,577

 

$

28,788,003

 

$

26,357,517

 

Global ECS

 

2,495,994

 

 

2,336,500

 

 

8,336,419

 

 

8,119,501

 

Consolidated

$

9,323,023

 

$

9,016,077

 

$

37,124,422

 

$

34,477,018

 

Operating income (loss):

 

 

 

 

Global components (a)

$

442,702

 

$

430,415

 

$

1,961,125

 

$

1,432,187

 

Global ECS

 

154,775

 

 

154,852

 

 

408,519

 

 

390,103

 

Corporate (b)

 

(74,881

)

 

(73,335

)

 

(301,150

)

 

(265,468

)

Consolidated

$

522,596

 

$

511,932

 

$

2,068,494

 

$

1,556,822

 

(a)

Global components operating income for year ended December 31, 2021 includes $12.5 million related to proceeds from legal settlements and $4.5 million in restructuring, integration, and other charges.

(b)

Corporate operating income includes restructuring, integration, and other charges of $2.7 million and $13.7 million for the fourth quarter and year ended December 31, 2022, respectively, and $3.8 million and $10.9 million for the fourth quarter and year ended December 31, 2021, respectively.

NON-GAAP SEGMENT RECONCILIATION

 

 

 

 

Quarter Ended

Year Ended

 

December 31,

2022

December 31,

2021

December 31,

2022

December 31,

2021

Global components operating income, as reported

$

442,702

$

430,415

$

1,961,125

$

1,432,187

Intangible assets amortization expense

 

6,702

 

6,942

 

27,005

 

27,915

Restructuring, integration, and other charges

 

 

 

 

4,482

Global components non-GAAP operating income

$

449,404

$

437,357

$

1,988,130

$

1,464,584

Global ECS operating income, as reported

$

154,775

$

154,852

$

408,519

$

390,103

Intangible assets amortization expense

 

1,468

 

2,144

 

7,687

 

9,015

Global ECS non-GAAP operating income

$

156,243

$

156,996

$

416,206

$

399,118