ARROW ELECTRONICS, INC.
7459 S. LIMA STREET
ENGLEWOOD, CO 80112
303-824-4000
ARROW ELECTRONICS REPORTS THIRD-QUARTER NON-GAAP EARNINGS PER SHARE OF $1.40
-- Third-Quarter Sales Grew 11% Over Prior Year --
-- Non-GAAP Diluted Earnings Per Share Advanced 19% Over Prior Year --
FOR IMMEDIATE RELEASE
ENGLEWOOD, Colo. -- October 29, 2014 -- Arrow Electronics, Inc. (NYSE:ARW) today reported third-quarter 2014 net income of $146.9 million, or $1.47 per share on a diluted basis, compared with net income of $96.8 million, or $.95 per share on a diluted basis in the third quarter of 2013. Excluding certain items1 in the third quarters of both 2014 and 2013, net income would have been $140.2 million, or $1.40 per share on a diluted basis, in the third quarter of 2014 compared with net income of $119.9 million, or $1.18 per share on a diluted basis, in the third quarter of 2013. Third-quarter sales of $5.61 billion increased 11 percent from sales of $5.05 billion in the prior year. Sales, as adjusted, increased 6 percent year over year.
“In the third quarter we again produced outstanding results and invested in our long-term strategic sales-related initiatives. Earnings per share of $1.40 were above our expectations, with sales of $5.6 billion at the high end of our guidance. Both of our global components and enterprise computing solutions segments delivered sales and operating income growth. The stable, slow-growth demand environment for global components matched our expectations. Our focus on the higher value portion of the datacenter has aligned our enterprise computing solutions business with the faster growth areas of IT spending,” said Michael J. Long, chairman, president, and chief executive officer.
Global components third-quarter sales of $3.73 billion increased 8 percent year over year. Sales, as adjusted, grew 5 percent year over year. Americas components sales increased 2 percent year over year. Europe components sales grew 4 percent year over year, and the region grew year over year for the sixth consecutive quarter on an as-adjusted basis. Components sales in the Asia-Pacific region increased 18 percent year over year.
Global enterprise computing solutions third-quarter sales of $1.88 billion grew 19 percent year over year. Sales, as adjusted, grew 7 percent year over year with growth in both Americas and Europe. Both regions continued to experience very strong growth in software and services, while storage and networking also delivered growth.
“Returns advanced over the prior year for the fourth consecutive quarter. Cash flow from operations on a trailing 12-month basis was $431 million as we continue to exceed our cash flow target,” said Paul J. Reilly, executive vice president, finance and operations, and chief financial officer. “The strong management of our balance sheet and cash flow provided us with the opportunity to return approximately $50 million to shareholders through our stock repurchase program in the third quarter, approximately $55 million, thus far, in the fourth quarter, and approximately $230 million on a trailing 12-month basis.”
NINE-MONTH RESULTS
Arrow’s net income for the first nine months of 2014 was $381.9 million, or $3.80 per share on a diluted basis, compared with net income of $264.6 million, or $2.53 per share on a diluted basis in the first nine months of 2013. Excluding certain items1 in both the first nine months of 2014 and 2013, net income would have been $408.6 million, or $4.06 per share on a diluted basis, in the first nine months of 2014 compared with net income of $347.0 million, or $3.32 per share on a diluted basis, in the first nine months of 2013. In the first nine months of 2014, sales of $16.4 billion increased 8 percent from sales of $15.2 billion in the first nine months of 2013. Sales in the first nine months of 2014, as adjusted, increased 2 percent year over year.
1 A reconciliation of non-GAAP adjusted financial measures including sales, as adjusted, operating income, as adjusted, net income attributable to shareholders, as adjusted, and net income per share, as adjusted to GAAP financial measures is presented in the reconciliation tables included herein.
GUIDANCE
“As we look to the fourth quarter, order patterns are unchanged and the supply chain remains well managed. We expect normal seasonality for our global components and enterprise computing solutions businesses. We believe that total sales will be between $6.1 billion and $6.5 billion, with global components sales between $3.4 billion and $3.6 billion and global enterprise computing solutions sales between $2.7 billion and $2.9 billion. As a result of this outlook, we expect earnings per share, on a diluted basis, excluding any charges to be in the range of $1.75 to $1.87 per share. Our guidance assumes an average tax rate in the range of 27 to 29 percent, average diluted shares outstanding are expected to be 99 million, and the average USD to Euro exchange rate for the fourth quarter is 1.25 to 1. At the midpoints of our fourth-quarter guidance ranges, full-year 2014 sales and earnings per share, on a diluted basis, excluding any charges would grow 6 percent and 17 percent, respectively, compared to full-year 2013, with returns increasing year over year, and cash flow from operations of approximately $450 million,” said Mr. Reilly.
Please refer to the CFO commentary, which can be found at www.arrow.com/investor, as a supplement to the company’s earnings release.
Arrow Electronics (www.arrow.com) is a global provider of products, services and solutions to industrial and commercial users of electronic components and enterprise computing solutions. Arrow serves as a supply channel partner for more than 100,000 original equipment manufacturers, contract manufacturers and commercial customers through a global network of more than 460 locations in 58 countries.
# # #
| Contact: | Steven O’Brien |
| | Director, Investor Relations |
| | 303-824-4544 |
| | |
| | Paul J. Reilly |
| | Executive Vice President, Finance and Operations, and |
| | Chief Financial Officer |
| | 631-847-1872 |
| | |
| Media Contact: | John Hourigan |
| | Vice President, Global Communications |
| | 303-824-4586 |
Information Relating to Forward-Looking Statements
This press release includes forward-looking statements that 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: industry conditions, the company's implementation of its new enterprise resource planning system, 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, the effects of additional actions taken to become more efficient or lower costs, risks related to the integration of acquired businesses, changes in legal and regulatory matters, and the company’s ability to generate additional cash flow. Forward-looking statements are those statements which are not statements of historical fact. These forward-looking statements can be identified by forward-looking words such as "expects," "anticipates," "intends," "plans," "may," "will," "believes," "seeks," "estimates," and similar expressions. 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.
For a further discussion of factors to consider in connection with these forward-looking statements, investors should refer to Item 1A Risk Factors of the company’s Form 10-Q for the quarterly period ended September 27, 2014, as well as the company’s Annual Report on Form 10-K for the year ended December 31, 2013.
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, operating income, net income attributable to shareholders, and net income per basic and diluted share. The company provides sales on a non-GAAP basis adjusted for the impact of changes in foreign currencies and the impact of acquisitions by adjusting the company's prior periods to include the sales of businesses acquired as if the acquisitions had occurred at the beginning of the period presented (referred to as "impact of acquisitions"). Operating income, net income attributable to shareholders, and net income per basic and diluted share are adjusted for certain charges, credits, gains, and losses that the company believes impact the comparability of its results of operations. These charges, credits, gains, and losses arise out of the company’s efficiency enhancement initiatives, acquisitions (including intangible assets amortization expense), sale of investment, prepayment of debt, and adjustments related to certain tax matters. A reconciliation of the company’s non-GAAP financial information to GAAP is set forth in the tables below.
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 this additional 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.
ARROW ELECTRONICS, INC.
(In thousands except per share data)
(Unaudited)
NON-GAAP SALES RECONCILIATION
| | | Quarter Ended | | |
| | | September 27, 2014 | | September 28, 2013 | | % Change |
| | | | | | | | | | |
| Consolidated sales, as reported | | $ | 5,613,216 | | | $ | 5,048,211 | | | | 11.2 | % |
| Impact of changes in foreign currencies | | | - | | | | (2,798 | ) | | | | |
| Impact of acquisitions | | | 14,748 | | | | 273,612 | | | | | |
| Consolidated sales, as adjusted | | $ | 5,627,964 | | | $ | 5,319,025 | | | | 5.8 | % |
| | | | | | | | | | | | | |
| Global components sales, as reported | | $ | 3,731,289 | | | $ | 3,467,285 | | | | 7.6 | % |
| Impact of changes in foreign currencies | | | - | | | | 2,784 | | | | | |
| Impact of acquisitions | | | 11,289 | | | | 81,348 | | | | | |
| Global components sales, as adjusted | | $ | 3,742,578 | | | $ | 3,551,417 | | | | 5.4 | % |
| | | | | | | | | | | | | |
| Europe components sales, as reported | | $ | 949,232 | | | $ | 915,086 | | | | 3.7 | % |
| Impact of changes in foreign currencies | | | - | | | | 3,074 | | | | | |
| Impact of acquisitions | | | - | | | | 7,199 | | | | | |
| Europe components sales, as adjusted | | $ | 949,232 | | | $ | 925,359 | | | | 2.6 | % |
| | | | | | | | | | | | | |
| Global ECS sales, as reported | | $ | 1,881,927 | | | $ | 1,580,926 | | | | 19.0 | % |
| Impact of changes in foreign currencies | | | - | | | | (5,582 | ) | | | | |
| Impact of acquisitions | | | 3,459 | | | | 192,264 | | | | | |
| Global ECS sales, as adjusted | | $ | 1,885,386 | | | $ | 1,767,608 | | | | 6.7 | % |
| | | | | | | | | | | | | |
| Europe ECS sales, as reported | | $ | 619,045 | | | $ | 440,065 | | | | 40.7 | % |
| Impact of changes in foreign currencies | | | - | | | | (1,515 | ) | | | | |
| Impact of acquisitions | | | - | | | | 139,337 | | | | | |
| Europe ECS sales, as adjusted | | $ | 619,045 | | | $ | 577,887 | | | | 7.1 | % |
| | | |
| | | |
| | | Nine Months Ended | | |
| | | September 27, 2014 | | September 28, 2013 | | % Change |
| | | | | | | | | | |
| Consolidated sales, as reported | | $ | 16,371,795 | | | $ | 15,203,925 | | | | 7.7 | % |
| Impact of changes in foreign currencies | | | - | | | | 105,039 | | | | | |
| Impact of acquisitions | | | 98,790 | | | | 868,818 | | | | | |
| Consolidated sales, as adjusted | | $ | 16,470,585 | | | $ | 16,177,782 | | | | 1.8 | % |
| | | | | | | | | | | | | |
| Global components sales, as reported | | $ | 10,721,814 | | | $ | 10,058,555 | | | | 6.6 | % |
| Impact of changes in foreign currencies | | | - | | | | 73,098 | | | | | |
| Impact of acquisitions | | | 62,887 | | | | 241,052 | | | | | |
| Global components sales, as adjusted | | $ | 10,784,701 | | | $ | 10,372,705 | | | | 4.0 | % |
| | | | | | | | | | | | | |
| Europe components sales, as reported | | $ | 2,923,093 | | | $ | 2,703,471 | | | | 8.1 | % |
| Impact of changes in foreign currencies | | | - | | | | 78,761 | | | | | |
| Impact of acquisitions | | | - | | | | 24,238 | | | | | |
| Europe components sales, as adjusted | | $ | 2,923,093 | | | $ | 2,806,470 | | | | 4.2 | % |
| | | | | | | | | | | | | |
| Global ECS sales, as reported | | $ | 5,649,981 | | | $ | 5,145,370 | | | | 9.8 | % |
| Impact of changes in foreign currencies | | | - | | | | 31,941 | | | | | |
| Impact of acquisitions | | | 35,903 | | | | 627,766 | | | | | |
| Global ECS sales, as adjusted | | $ | 5,685,884 | | | $ | 5,805,077 | | | | (2.1 | )% |
| | | | | | | | | | | | | |
| Europe ECS sales, as reported | | $ | 2,061,057 | | | $ | 1,583,975 | | | | 30.1 | % |
| Impact of changes in foreign currencies | | | - | | | | 50,450 | | | | | |
| Impact of acquisitions | | | - | | | | 475,747 | | | | | |
| Europe ECS sales, as adjusted | | $ | 2,061,057 | | | $ | 2,110,172 | | | | (2.3 | )% |
ARROW ELECTRONICS, INC.
(In thousands except per share data)
(Unaudited)
NON-GAAP EARNINGS RECONCILIATION
| | | Quarter Ended | | Nine Months Ended |
| | | September 27, 2014 | | September 28, 2013 | | September 27, 2014 | | September 28, 2013 |
| | | | | | | | | | | | | |
| Operating income, as reported | | $ | 199,816 | | | $ | 162,736 | | | $ | 585,825 | | | $ | 456,163 | |
| Intangible assets amortization expense | | | 11,108 | | | | 8,936 | | | | 32,925 | | | | 26,762 | |
| Restructuring, integration, and other charges | | | 3,935 | | | | 22,568 | | | | 25,181 | | | | 74,402 | |
| Operating income, as adjusted | | $ | 214,859 | | | $ | 194,240 | | | $ | 643,931 | | | $ | 557,327 | |
| | | | | | | | | | | | | | | | | |
| Net income attributable to shareholders, as reported | | $ | 146,864 | | | $ | 96,779 | | | $ | 381,868 | | | $ | 264,589 | |
| Intangible assets amortization expense | | | 9,086 | | | | 7,074 | | | | 26,860 | | | | 21,219 | |
| Restructuring, integration, and other charges | | | 2,556 | | | | 16,077 | | | | 18,102 | | | | 52,260 | |
| Gain on sale of investment | | | (18,269 | ) | | | - | | | | (18,269 | ) | | | - | |
| Loss on prepayment of debt | | | - | | | | - | | | | - | | | | 2,627 | |
| Settlement of tax matters: | | | | | | | | | | | | | | | | |
| Income taxes | | | - | | | | - | | | | - | | | | 5,362 | |
| Interest (net of taxes) | | | - | | | | - | | | | - | | | | 939 | |
| Net income attributable to shareholders, as adjusted | | $ | 140,237 | | | $ | 119,930 | | | $ | 408,561 | | | $ | 346,996 | |
| | | | | | | | | | | | | | | | | |
| Net income per basic share, as reported | | $ | 1.49 | | | $ | .96 | | | $ | 3.84 | | | $ | 2.56 | |
| Intangible assets amortization expense | | | .09 | | | | .07 | | | | .27 | | | | .21 | |
| Restructuring, integration, and other charges | | | .03 | | | | .16 | | | | .18 | | | | .51 | |
| Gain on sale of investment | | | (.19 | ) | | | - | | | | (.18 | ) | | | - | |
| Loss on prepayment of debt | | | - | | | | - | | | | - | | | | .03 | |
| Settlement of tax matters: | | | | | | | | | | | | | | | | |
| Income taxes | | | - | | | | - | | | | - | | | | .05 | |
| Interest (net of taxes) | | | - | | | | - | | | | - | | | | .01 | |
| Net income per basic share, as adjusted | | $ | 1.42 | | | $ | 1.19 | | | $ | 4.11 | | | $ | 3.36 | |
| | | | | | | | | | | | | | | | | |
| Net income per diluted share, as reported | | $ | 1.47 | | | $ | .95 | | | $ | 3.80 | | | $ | 2.53 | |
| Intangible assets amortization expense | | | .09 | | | | .07 | | | | .27 | | | | .20 | |
| Restructuring, integration, and other charges | | | .03 | | | | .16 | | | | .18 | | | | .50 | |
| Gain on sale of investment | | | (.18 | ) | | | - | | | | (.18 | ) | | | - | |
| Loss on prepayment of debt | | | - | | | | - | | | | - | | | | .03 | |
| Settlement of tax matters: | | | | | | | | | | | | | | | | |
| Income taxes | | | - | | | | - | | | | - | | | | .05 | |
| Interest (net of taxes) | | | - | | | | - | | | | - | | | | .01 | |
| Net income per diluted share, as adjusted | | $ | 1.40 | | | $ | 1.18 | | | $ | 4.06 | | | $ | 3.32 | |
The sum of the components for basic and diluted net income per share, as adjusted, may not agree to totals, as presented, due to rounding.
ARROW ELECTRONICS, INC.
(In thousands except per share data)
(Unaudited)
SEGMENT INFORMATION
| | | Quarter Ended | | Nine Months Ended |
| | | September 27, 2014 | | September 28, 2013 | | September 27, 2014 | | September 28, 2013 |
| Sales: | | | | | | | | | | | | |
| Global components | | $ | 3,731,289 | | | $ | 3,467,285 | | | $ | 10,721,814 | | | $ | 10,058,555 | |
| Global ECS | | | 1,881,927 | | | | 1,580,926 | | | | 5,649,981 | | | | 5,145,370 | |
| Consolidated | | $ | 5,613,216 | | | $ | 5,048,211 | | | $ | 16,371,795 | | | $ | 15,203,925 | |
| | | | | | | | | | | | | | | | | |
| Operating income (loss): | | | | | | | | | | | | | | | | |
| Global components | | $ | 179,451 | | | $ | 164,096 | | | $ | 500,239 | | | $ | 432,534 | |
| Global ECS | | | 69,172 | | | | 59,757 | | | | 229,320 | | | | 202,070 | |
| Corporate (a) | | | (48,807 | ) | | | (61,117 | ) | | | (143,734 | ) | | | (178,441 | ) |
| Consolidated | | $ | 199,816 | | | $ | 162,736 | | | $ | 585,825 | | | $ | 456,163 | |
| (a) | Includes restructuring, integration, and other charges of $3.9 million and $25.2 million for the third quarter and first nine months of 2014 and $22.6 million and $74.4 million for the third quarter and first nine months of 2013, respectively. |
NON-GAAP SEGMENT RECONCILIATION
| | | Quarter Ended | | Nine Months Ended |
| | | September 27, 2014 | | September 28, 2013 | | September 27, 2014 | | September 28, 2013 |
| Global components operating income, as reported | | $ | 179,451 | | | $ | 164,096 | | | $ | 500,239 | | | $ | 432,534 | |
| Intangible assets amortization expense | | | 5,493 | | | | 4,993 | | | | 16,499 | | | | 14,948 | |
| Global components operating income, as adjusted | | $ | 184,944 | | | $ | 169,089 | | | $ | 516,738 | | | $ | 447,482 | |
| | | | | | | | | | | | | | | | | |
| Global ECS operating income, as reported | | $ | 69,172 | | | $ | 59,757 | | | $ | 229,320 | | | $ | 202,070 | |
| Intangible assets amortization expense | | | 5,615 | | | | 3,943 | | | | 16,426 | | | | 11,814 | |
| Global ECS operating income, as adjusted | | $ | 74,787 | | | $ | 63,700 | | | $ | 245,746 | | | $ | 213,884 | |
ARROW ELECTRONICS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except per share data)
(Unaudited)
| | | Quarter Ended | | Nine Months Ended |
| | | September 27, 2014 | | September 28, 2013 | | September 27, 2014 | | September 28, 2013 |
| | | | | | | | | | | | | |
| Sales | | $ | 5,613,216 | | | $ | 5,048,211 | | | $ | 16,371,795 | | | $ | 15,203,925 | |
| Costs and expenses: | | | | | | | | | | | | | | | | |
| Cost of sales | | | 4,884,529 | | | | 4,376,551 | | | | 14,191,759 | | | | 13,200,621 | |
| Selling, general, and administrative expenses | | | 485,864 | | | | 453,920 | | | | 1,453,675 | | | | 1,376,199 | |
| Depreciation and amortization | | | 39,072 | | | | 32,436 | | | | 115,355 | | | | 96,540 | |
| Restructuring, integration, and other charges | | | 3,935 | | | | 22,568 | | | | 25,181 | | | | 74,402 | |
| | | | 5,413,400 | | | | 4,885,475 | | | | 15,785,970 | | | | 14,747,762 | |
| Operating income | | | 199,816 | | | | 162,736 | | | | 585,825 | | | | 456,163 | |
| Equity in earnings of affiliated companies | | | 2,192 | | | | 1,884 | | | | 4,790 | | | | 5,227 | |
| Gain on sale of investment | | | 29,743 | | | | - | | | | 29,743 | | | | - | |
| Loss on prepayment of debt | | | - | | | | - | | | | - | | | | 4,277 | |
| Interest and other financing expense, net | | | 27,522 | | | | 27,167 | | | | 86,079 | | | | 86,896 | |
| Income before income taxes | | | 204,229 | | | | 137,453 | | | | 534,279 | | | | 370,217 | |
| Provision for income taxes | | | 57,377 | | | | 40,490 | | | | 152,175 | | | | 105,260 | |
| Consolidated net income | | | 146,852 | | | | 96,963 | | | | 382,104 | | | | 264,957 | |
| Noncontrolling interests | | | (12 | ) | | | 184 | | | | 236 | | | | 368 | |
| Net income attributable to shareholders | | $ | 146,864 | | | $ | 96,779 | | | $ | 381,868 | | | $ | 264,589 | |
| Net income per share: | | | | | | | | | | | | | | | | |
| Basic | | $ | 1.49 | | | $ | .96 | | | $ | 3.84 | | | $ | 2.56 | |
| Diluted | | $ | 1.47 | | | $ | .95 | | | $ | 3.80 | | | $ | 2.53 | |
| Weighted average shares outstanding: | | | | | | | | | | | | | | | | |
| Basic | | | 98,631 | | | | 100,750 | | | | 99,336 | | | | 103,269 | |
| Diluted | | | 99,866 | | | | 101,669 | | | | 100,609 | | | | 104,426 | |
ARROW ELECTRONICS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands except par value)
| | | September 27, 2014 | | December 31, 2013 |
| | | (Unaudited) | | | |
| ASSETS | | | | | | |
| Current assets: | | | | | | |
| Cash and cash equivalents | | $ | 258,233 | | | $ | 390,602 | |
| Accounts receivable, net | | | 5,060,959 | | | | 5,769,759 | |
| Inventories | | | 2,242,774 | | | | 2,167,287 | |
| Other current assets | | | 267,732 | | | | 258,122 | |
| | | | | | | | | |
| Total current assets | | | 7,829,698 | | | | 8,585,770 | |
| | | | | | | | | |
| Property, plant, and equipment, at cost: | | | | | | | | |
| Land | | | 23,867 | | | | 24,051 | |
| Buildings and improvements | | | 143,837 | | | | 142,583 | |
| Machinery and equipment | | | 1,127,650 | | | | 1,113,987 | |
| | | | 1,295,354 | | | | 1,280,621 | |
| Less: Accumulated depreciation and amortization | | | (660,643 | ) | | | (648,232 | ) |
| Property, plant, and equipment, net | | | 634,711 | | | | 632,389 | |
| | | | | | | | | |
| Investments in affiliated companies | | | 68,056 | | | | 67,229 | |
| Intangible assets, net | | | 421,710 | | | | 426,069 | |
| Cost in excess of net assets of companies acquired | | | 2,076,692 | | | | 2,039,293 | |
| Other assets | | | 280,659 | | | | 310,133 | |
| | | | | | | | | |
| Total assets | | $ | 11,311,526 | | | $ | 12,060,883 | |
| | | | | | | | | |
| LIABILITIES AND EQUITY | | | | | | | | |
| Current liabilities: | | | | | | | | |
| Accounts payable | | $ | 3,806,702 | | | $ | 4,503,200 | |
| Accrued expenses | | | 650,779 | | | | 774,868 | |
| Short-term borrowings, including current portion of long-term debt | | | 17,473 | | | | 23,878 | |
| | | | | | | | | |
| Total current liabilities | | | 4,474,954 | | | | 5,301,946 | |
| | | | | | | | | |
| Long-term debt | | | 2,211,037 | | | | 2,226,132 | |
| Other liabilities | | | 374,507 | | | | 347,977 | |
| | | | | | | | | |
| Equity: | | | | | | | | |
| Shareholders' equity: | | | | | | | | |
| Common stock, par value $1: | | | | | | | | |
| Authorized – 160,000 shares in both 2014 and 2013 | | | | | | | | |
| Issued – 125,424 shares in both 2014 and 2013 | | | 125,424 | | | | 125,424 | |
| Capital in excess of par value | | | 1,076,124 | | | | 1,071,075 | |
| Treasury stock (27,375 and 25,488 shares in 2014 and 2013, respectively), at cost | | | (1,055,827 | ) | | | (920,528 | ) |
| Retained earnings | | | 4,060,577 | | | | 3,678,709 | |
| Accumulated other comprehensive income | | | 39,898 | | | | 225,552 | |
| | | | | | | | | |
| Total shareholders' equity | | | 4,246,196 | | | | 4,180,232 | |
| | | | | | | | | |
| Noncontrolling interests | | | 4,832 | | | | 4,596 | |
| | | | | | | | | |
| Total equity | | | 4,251,028 | | | | 4,184,828 | |
| | | | | | | | | |
| Total liabilities and equity | | $ | 11,311,526 | | | $ | 12,060,883 | |
ARROW ELECTRONICS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
| | | Quarter Ended |
| | | September 27, 2014 | | September 28, 2013 |
| Cash flows from operating activities: | | | | | | |
| Consolidated net income | | $ | 146,852 | | | $ | 96,963 | |
| Adjustments to reconcile consolidated net income to net cash provided by operations: | | | | | | | | |
| Depreciation and amortization | | | 39,072 | | | | 32,436 | |
| Amortization of stock-based compensation | | | 11,116 | | | | 11,465 | |
| Equity in earnings of affiliated companies | | | (2,192 | ) | | | (1,884 | ) |
| Deferred income taxes | | | (4,611 | ) | | | (4,237 | ) |
| Restructuring, integration, and other charges | | | 2,556 | | | | 16,077 | |
| Gain on sale of investment | | | (18,269 | ) | | | - | |
| Excess tax benefits from stock-based compensation arrangements | | | (729 | ) | | | (320 | ) |
| Other | | | 657 | | | | 559 | |
| Change in assets and liabilities, net of effects of acquired businesses: | | | | | | | | |
| Accounts receivable | | | (41,481 | ) | | | 225,379 | |
| Inventories | | | 32,740 | | | | (34,314 | ) |
| Accounts payable | | | (222,128 | ) | | | (237,258 | ) |
| Accrued expenses | | | (42,228 | ) | | | (30,161 | ) |
| Other assets and liabilities | | | 31,421 | | | | 6,427 | |
| | | | | | | | | |
| Net cash provided by (used for) operating activities | | | (67,224 | ) | | | 81,132 | |
| | | | | | | | | |
| Cash flows from investing activities: | | | | | | | | |
| Cash consideration paid for acquired businesses | | | (69,298 | ) | | | (34,010 | ) |
| Acquisition of property, plant, and equipment | | | (25,878 | ) | | | (31,904 | ) |
| Proceeds from sale of investment | | | 40,542 | | | | - | |
| | | | | | | | | |
| Net cash used for investing activities | | | (54,634 | ) | | | (65,914 | ) |
| | | | | | | | | |
| Cash flows from financing activities: | | | | | | | | |
| Change in short-term and other borrowings | | | 661 | | | | 5,457 | |
| Proceeds from (repayment of) long-term bank borrowings, net | | | 109,800 | | | | (157,600 | ) |
| Proceeds from exercise of stock options | | | 2,692 | | | | 18,073 | |
| Excess tax benefits from stock-based compensation arrangements | | | 729 | | | | 320 | |
| Repurchases of common stock | | | (50,600 | ) | | | (303 | ) |
| | | | | | | | | |
| Net cash provided by (used for) financing activities | | | 63,282 | | | | (134,053 | ) |
| | | | | | | | | |
| Effect of exchange rate changes on cash | | | 7,873 | | | | 24,734 | |
| Net decrease in cash and cash equivalents | | | (50,703 | ) | | | (94,101 | ) |
| Cash and cash equivalents at beginning of period | | | 308,936 | | | | 345,891 | |
| Cash and cash equivalents at end of period | | $ | 258,233 | | | $ | 251,790 | |
ARROW ELECTRONICS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
| | | Nine Months Ended |
| | | September 27, 2014 | | September 28, 2013 |
| Cash flows from operating activities: | | | | | | |
| Consolidated net income | | $ | 382,104 | | | $ | 264,957 | |
| Adjustments to reconcile consolidated net income to net cash provided by operations: | | | | | | | | |
| Depreciation and amortization | | | 115,355 | | | | 96,540 | |
| Amortization of stock-based compensation | | | 31,283 | | | | 24,247 | |
| Equity in earnings of affiliated companies | | | (4,790 | ) | | | (5,227 | ) |
| Deferred income taxes | | | 11,368 | | | | 15,311 | |
| Restructuring, integration, and other charges | | | 18,102 | | | | 52,260 | |
| Gain on sale of investment | | | (18,269 | ) | | | - | |
| Excess tax benefits from stock-based compensation arrangements | | | (6,977 | ) | | | (6,937 | ) |
| Other | | | 2,029 | | | | 2,809 | |
| Change in assets and liabilities, net of effects of acquired businesses: | | | | | | | | |
| Accounts receivable | | | 556,445 | | | | 386,542 | |
| Inventories | | | (97,929 | ) | | | (94,180 | ) |
| Accounts payable | | | (632,191 | ) | | | (361,349 | ) |
| Accrued expenses | | | (150,165 | ) | | | (204,013 | ) |
| Other assets and liabilities | | | 9,883 | | | | 64,685 | |
| | | | | | | | | |
| Net cash provided by operating activities | | | 216,248 | | | | 235,645 | |
| | | | | | | | | |
| Cash flows from investing activities: | | | | | | | | |
| Cash consideration paid for acquired businesses | | | (129,522 | ) | | | (43,392 | ) |
| Acquisition of property, plant, and equipment | | | (87,881 | ) | | | (85,465 | ) |
| Proceeds from sale of investment | | | 40,542 | | | | - | |
| Other | | | - | | | | (3,000 | ) |
| | | | | | | | | |
| Net cash used for investing activities | | | (176,861 | ) | | | (131,857 | ) |
| | | | | | | | | |
| Cash flows from financing activities: | | | | | | | | |
| Change in short-term and other borrowings | | | (9,243 | ) | | | (22,282 | ) |
| Repayment of long-term bank borrowings, net | | | (10,200 | ) | | | (242,900 | ) |
| Net proceeds from note offering | | | - | | | | 591,156 | |
| Redemption of senior notes | | | - | | | | (338,184 | ) |
| Proceeds from exercise of stock options | | | 21,013 | | | | 30,368 | |
| Excess tax benefits from stock-based compensation arrangements | | | 6,977 | | | | 6,937 | |
| Repurchases of common stock | | | (189,411 | ) | | | (312,613 | ) |
| | | | | | | | | |
| Net cash used for financing activities | | | (180,864 | ) | | | (287,518 | ) |
| | | | | | | | | |
| Effect of exchange rate changes on cash | | | 9,108 | | | | 25,836 | |
| Net decrease in cash and cash equivalents | | | (132,369 | ) | | | (157,894 | ) |
| Cash and cash equivalents at beginning of period | | | 390,602 | | | | 409,684 | |
| Cash and cash equivalents at end of period | | $ | 258,233 | | | $ | 251,790 | |
