Exhibit 99.1
Arrow Electronics Reports Third-Quarter 2016 Results
-- Record Third-Quarter Sales of $5.94 billion --
-- Earnings Per Share of $1.28; Non-GAAP Earnings Per Share of $1.56 --
CENTENNIAL, Colo.--(BUSINESS WIRE)--November 3, 2016--Arrow Electronics, Inc. (NYSE:ARW) today reported third-quarter 2016 net income of $118 million, or $1.28 per share on a diluted basis, compared with net income of $109 million, or $1.15 per share on a diluted basis, in the third quarter of 2015. Excluding certain items1, net income would have been $143 million, or $1.56 per share on a diluted basis, in the third quarter of 2016, compared with net income of $133 million, or $1.40 per share on a diluted basis, in the third quarter of 2015. Third-quarter sales of $5.94 billion increased 4 percent from sales of $5.7 billion in the prior year.
“Our strong execution drove record third-quarter sales for both our global components and global enterprise computing solutions businesses,” said Michael J. Long, chairman, president, and chief executive officer. “Our results this quarter continue to show our leadership position at the forefront of innovation for digital commerce, cloud, and IoT.”
Global components third-quarter sales of $3.9 billion grew 6 percent year over year. Americas components sales were flat year over year. Asia-Pacific components sales grew 16 percent year over year. Europe components sales grew 2 percent year over year. “Our investments in customer-facing sales and engineering resources over the last two years contributed to our strong growth in the Asia-Pacific region during the third quarter,” said Mr. Long.
Global enterprise computing solutions third-quarter sales of $2.03 billion grew 1 percent year over year. Sales, as adjusted, declined 1 percent year over year. Americas sales grew 6 percent year over year. Sales in the region, as adjusted, grew 1 percent year over year. Europe sales declined 10 percent year over year. Sales in the region, as adjusted, declined 6 percent year over year. “Enterprise computing solutions operating income grew 13 percent year over year, and we believe our profit growth shows the increasing value we are delivering to customers and suppliers,” added Mr. Long.
“Cash flow from operations was $24 million in the third quarter and $680 million over the last 12 months as we continue to exceed our cash flow target,” said Chris Stansbury, senior vice president and chief financial officer. “During the quarter, we returned approximately $117 million to shareholders through our stock repurchase program. We had approximately $169 million of remaining authorization under our share repurchase program at the end of the third quarter.”
NINE-MONTH RESULTS
Arrow’s net income for the first nine months of 2016 was $358 million, or $3.87 per share on a diluted basis, compared with net income of $339 million, or $3.52 per share on a diluted basis in the first nine months of 2015. Excluding certain items1, net income would have been $428 million, or $4.63 per share on a diluted basis, in the first nine months of 2016 compared with net income of $410 million, or $4.26 per share on a diluted basis, in the first nine months of 2015. In the first nine months of 2016, sales of $17.38 billion increased 5 percent from sales of $16.53 billion in the first nine months of 2015.
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, we believe that total sales will be between $6.3 billion and $6.7 billion, with global components sales between $3.7 billion and $3.9 billion, and global enterprise computing solutions sales between $2.6 billion and $2.8 billion. As a result of this outlook, we expect earnings per share on a diluted basis, to be in the range of $1.68 to $1.84, and earnings per share on a diluted basis, excluding any charges, to be in the range of $1.92 to $2.08 per share. Our guidance assumes an average tax rate in the range of 25 to 27 percent and average diluted shares outstanding are expected to be 91 million. Due to timing of some discreet items, we anticipate our fourth-quarter average tax rate will be below our usual 27 to 29 percent range, but full-year 2016 average tax rate will be within the 27 to 29 percent range. We are expecting the average USD-to-Euro exchange rate for the fourth quarter to be approximately $1.11 to €1. At the midpoints of our fourth-quarter guidance ranges, full-year 2016 earnings per share, on a diluted basis, excluding certain items1, would total approximately $6.62 and grow 7 percent compared to full-year 2015. Full-year 2016 sales would total approximately $23.88 billion and would grow 3 percent compared to full-year 2015,” said Mr. Stansbury.
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 (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 serving over 85 countries.
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 Annual Report on Form 10-K for the year ended December 31, 2015.
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 operating results for businesses acquired, including the amortization expense related to acquired intangible assets, as if the acquisitions had occurred at the beginning of the earliest 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), loss on prepayment of debt, and (gain)/loss on investments. 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. |
| CONSOLIDATED STATEMENTS OF OPERATIONS |
| (In thousands except per share data) |
| (Unaudited) |
| |
| | Quarter Ended | | Nine Months Ended |
| | Oct. 1,
2016 | | Sep. 26,
2015 | | Oct. 1,
2016 | | Sep. 26,
2015 |
| | | | | | | | | | | | |
| Sales | | $ | 5,936,092 | | $ | 5,698,304 | | $ | 17,382,370 | | $ | 16,530,678 |
| Costs and expenses: | | | | | | | | | | | | |
| Cost of sales | | | 5,162,930 | | | 4,955,937 | | | 15,061,519 | | | 14,334,394 |
| Selling, general, and administrative expenses | | | 510,017 | | | 497,876 | | | 1,534,534 | | | 1,457,160 |
| Depreciation and amortization | | | 40,194 | | | 40,941 | | | 121,516 | | | 117,854 |
| Restructuring, integration, and other charges | | | 24,267 | | | 17,756 | | | 61,161 | | | 51,099 |
| | | 5,737,408 | | | 5,512,510 | | | 16,778,730 | | | 15,960,507 |
| Operating income | | | 198,684 | | | 185,794 | | | 603,640 | | | 570,171 |
| Equity in earnings of affiliated companies | | | 1,311 | | | 1,674 | | | 5,394 | | | 4,890 |
| Gain on sale of investment | | | - | | | - | | | - | | | 2,008 |
| Interest and other financing expense, net | | | 37,229 | | | 35,409 | | | 111,828 | | | 100,959 |
| Other expense, net | | | - | | | - | | | - | | | 4,443 |
| Income before income taxes | | | 162,766 | | | 152,059 | | | 497,206 | | | 471,667 |
| Provision for income taxes | | | 44,931 | | | 41,755 | | | 137,441 | | | 130,589 |
| Consolidated net income | | | 117,835 | | | 110,304 | | | 359,765 | | | 341,078 |
| Noncontrolling interests | | | 108 | | | 1,060 | | | 1,533 | | | 1,844 |
| Net income attributable to shareholders | | $ | 117,727 | | $ | 109,244 | | $ | 358,232 | | $ | 339,234 |
| Net income per share: | | | | | | | | | | | | |
Basic | | $ | 1.29 | | $ | 1.16 | | $ | 3.92 | | $ | 3.56 |
| Diluted | | $ | 1.28 | | $ | 1.15 | | $ | 3.87 | | $ | 3.52 |
| Weighted average shares outstanding: | | | | | | | | | | | | |
| Basic | | | 90,937 | | | 94,302 | | | 91,412 | | | 95,277 |
| Diluted | | | 91,938 | | | 95,363 | | | 92,487 | | | 96,302 |
| |
| ARROW ELECTRONICS, INC. |
| CONSOLIDATED BALANCE SHEETS |
| (In thousands except par value) |
| |
| | Oct. 1,
2016 | | Dec. 31,
2015 |
| | (Unaudited) | | |
| ASSETS | | | | | |
| Current assets: | | | | | | |
| Cash and cash equivalents | | $ | 384,415 | | $ | 273,090 |
| Accounts receivable, net | | | 5,912,085 | | | 6,161,418 |
| Inventories, net | | | 2,605,408 | | | 2,466,490 |
| Other current assets | | | 289,356 | | | 285,473 |
| Total current assets | | | 9,191,264 | | | 9,186,471 |
| Property, plant, and equipment, at cost: | | | | | | |
| Land | | | 23,864 | | | 23,547 |
| Buildings and improvements | | | 174,127 | | | 162,011 |
| Machinery and equipment | | | 1,353,862 | | | 1,250,115 |
| | | 1,551,853 | | | 1,435,673 |
| Less: Accumulated depreciation and amortization | | | (801,340) | | | (735,495) |
| Property, plant, and equipment, net | | | 750,513 | | | 700,178 |
| Investments in affiliated companies | | | 89,059 | | | 73,376 |
| Intangible assets, net | | | 355,968 | | | 389,326 |
| Goodwill | | | 2,441,846 | | | 2,368,832 |
| Other assets | | | 309,393 | | | 303,747 |
| Total assets | | $ | 13,138,043 | | $ | 13,021,930 |
| LIABILITIES AND EQUITY | | | | | | |
| Current liabilities: | | | | | | |
| Accounts payable | | $ | 4,747,227 | | $ | 5,192,665 |
| Accrued expenses | | | 698,525 | | | 819,463 |
| Short-term borrowings, including current portion of long-term debt | | | 77,348 | | | 44,024 |
| Total current liabilities | | | 5,523,100 | | | 6,056,152 |
| | | | | | |
| Long-term debt | | | 2,704,851 | | | 2,380,575 |
| Other liabilities | | | 429,631 | | | 390,392 |
| Equity: | | | | | | |
| Shareholders' equity: | | | | | | |
| Common stock, par value $1: | | | | | | |
| Authorized – 160,000 shares in both 2016 and 2015 | | | | | | |
| Issued – 125,424 shares in both 2016 and 2015 | | | 125,424 | | | 125,424 |
| Capital in excess of par value | | | 1,102,697 | | | 1,107,314 |
| Treasury stock (35,838 and 34,501 shares in 2016 and 2015, respectively), at cost | | | (1,590,818) | | | (1,480,069) |
| Retained earnings | | | 5,032,712 | | | 4,674,480 |
| Accumulated other comprehensive loss | | | (244,511) | | | (284,706) |
| Total shareholders' equity | | | 4,425,504 | | | 4,142,443 |
| Noncontrolling interests | | | 54,957 | | | 52,368 |
| Total equity | | | 4,480,461 | | | 4,194,811 |
| Total liabilities and equity | | $ | 13,138,043 | | $ | 13,021,930 |
| |
| ARROW ELECTRONICS, INC. |
| CONSOLIDATED STATEMENTS OF CASH FLOWS |
| (In thousands) |
| (Unaudited) |
| |
| | Quarter Ended |
| | Oct. 1,
2016 | | Sep. 26,
2015 |
| Cash flows from operating activities: | | | | | | |
| Consolidated net income | | $ | 117,835 | | $ | 110,304 |
| Adjustments to reconcile consolidated net income to net cash provided by (used for) operations: | | | | | | |
| Depreciation and amortization | | | 40,194 | | | 40,941 |
| Amortization of stock-based compensation | | | 10,508 | | | 11,777 |
| Equity in earnings of affiliated companies | | | (1,311) | | | (1,674) |
| Deferred income taxes | | | 2,522 | | | 375 |
| Excess tax benefits from stock-based compensation arrangements | | | (14) | | | (21) |
| Other | | | 1,510 | | | 1,475 |
| Change in assets and liabilities, net of effects of acquired businesses: | | | | | | |
| Accounts receivable | | | (193,791) | | | (22,871) |
| Inventories | | | (95,184) | | | 37,935 |
| Accounts payable | | | 93,313 | | | (298,552) |
| Accrued expenses | | | 11,826 | | | 26,638 |
| Other assets and liabilities | | | 37,016 | | | (14,821) |
| Net cash provided by (used for) operating activities | | | 24,424 | | | (108,494) |
| | | | | | |
| Cash flows from investing activities: | | | | | | |
| Cash consideration paid for acquired businesses | | | (23,473) | | | (42,236) |
| Acquisition of property, plant, and equipment | | | (38,005) | | | (44,236) |
| Other | | | - | | | - |
| Net cash used for investing activities | | | (61,478) | | | (86,472) |
| Cash flows from financing activities: | | | | | | |
| Change in short-term and other borrowings | | | (35,670) | | | (252) |
| Proceeds from long-term bank borrowings, net | | | 87,000 | | | 204,300 |
| Proceeds from exercise of stock options | | | 1,842 | | | 248 |
| Excess tax benefits from stock-based compensation arrangements | | | 14 | | | 21 |
| Repurchases of common stock | | | (120,345) | | | (50,177) |
| Other | | | - | | | (2,831) |
| Net cash provided by(used for)financing activities | | | (67,159) | | | 151,309 |
| Effect of exchange rate changes on cash | | | (7,143) | | | (19,320) |
| Net decrease in cash and cash equivalents | | | (111,356) | | | (62,977) |
| Cash and cash equivalents at beginning of period | | | 495,771 | | | 399,721 |
| Cash and cash equivalents at end of period | | $ | 384,415 | | $ | 336,744 |
| |
| ARROW ELECTRONICS, INC. |
| CONSOLIDATED STATEMENTS OF CASH FLOWS |
| (In thousands) |
| (Unaudited) |
| |
| | Nine Months Ended |
| | Oct. 1,
2016 | | Sep. 26,
2015 |
| Cash flows from operating activities: | | | | | | |
| Consolidated net income | | $ | 359,765 | | $ | 341,078 |
| Adjustments to reconcile consolidated net income to net cash provided by operations: | | | | | | |
| Depreciation and amortization | | | 121,516 | | | 117,854 |
| Amortization of stock-based compensation | | | 29,783 | | | 33,783 |
| Equity in earnings of affiliated companies | | | (5,394) | | | (4,890) |
| Deferred income taxes | | | 30,191 | | | 26,881 |
| Gain on sale of investment | | | - | | | (2,008) |
| Excess tax benefits from stock-based compensation arrangements | | | (4,953) | | | (5,863) |
| Other | | | 4,464 | | | 8,057 |
| Change in assets and liabilities, net of effects of acquired businesses: | | | | | | |
| Accounts receivable | | | 335,455 | | | 1,056,282 |
| Inventories | | | (117,674) | | | (44,890) |
| Accounts payable | | | (513,365) | | | (1,318,702) |
| Accrued expenses | | | (102,915) | | | (72,728) |
| Other assets and liabilities | | | (1,121) | | | (23,910) |
| Net cash provided by operating activities | | | 135,752 | | | 110,944 |
| | | | | | |
| Cash flows from investing activities: | | | | | | |
| Cash consideration paid for acquired businesses | | | (68,946) | | | (512,910) |
| Acquisition of property, plant, and equipment | | | (126,341) | | | (113,056) |
| Other | | | (12,000) | | | 2,008 |
| Net cash used for investing activities | | | (207,287) | | | (623,958) |
| Cash flows from financing activities: | | | | | | |
| Change in short-term and other borrowings | | | 31,941 | | | (4,069) |
| Proceeds from long-term bank borrowings, net | | | 320,000 | | | 238,700 |
| Net proceeds from note offering | | | - | | | 688,162 |
| Redemption of notes | | | - | | | (254,313) |
| Proceeds from exercise of stock options | | | 16,686 | | | 14,722 |
| Excess tax benefits from stock-based compensation arrangements | | | 4,953 | | | 5,863 |
| Repurchases of common stock | | | (167,178) | | | (206,601) |
| Other | | | (3,000) | | | (5,831) |
| Net cash provided by financing activities | | | 203,402 | | | 476,633 |
| Effect of exchange rate changes on cash | | | (20,542) | | | (27,230) |
| Net increase (decrease) in cash and cash equivalents | | | 111,325 | | | (63,611) |
| Cash and cash equivalents at beginning of period | | | 273,090 | | | 400,355 |
| Cash and cash equivalents at end of period | | $ | 384,415 | | $ | 336,744 |
| |
| ARROW ELECTRONICS, INC. |
| NON-GAAP SALES RECONCILIATION |
| (In thousands) |
| (Unaudited) |
| |
| | Quarter Ended | | |
| | Oct. 1,
2016 | | Sep. 26,
2015 | | % Change |
| | | | | | | | |
| Consolidated sales, as reported | | $ | 5,936,092 | | $ | 5,698,304 | | 4.2% |
| Impact of changes in foreign currencies | | | - | | | (32,830) | | |
| Impact of acquisitions | | | 1,387 | | | 73,098 | | |
| Consolidated sales, as adjusted | | $ | 5,937,479 | | $ | 5,738,572 | | 3.5% |
| | | | | | | | |
| Global components sales, as reported | | $ | 3,904,447 | | $ | 3,692,051 | | 5.8% |
| Impact of changes in foreign currencies | | | - | | | (8,287) | | |
| Impact of acquisitions | | | 1,387 | | | 10,532 | | |
| Global components sales, as adjusted | | $ | 3,905,834 | | $ | 3,694,296 | | 5.7% |
| | | | | | | | |
| Europe components sales, as reported | | $ | 1,008,135 | | $ | 992,623 | | 1.6% |
| Impact of changes in foreign currencies | | | - | | | (10,411) | | |
| Impact of acquisitions | | | - | | | 5,825 | | |
| Europe components sales, as adjusted | | $ | 1,008,135 | | $ | 988,037 | | 2.0% |
| | | | | | | | |
| Asia components sales, as reported | | $ | 1,436,316 | | $ | 1,241,190 | | 15.7% |
| Impact of changes in foreign currencies | | | - | | | 1,691 | | |
| Impact of acquisitions | | | - | | | - | | |
| Asia components sales, as adjusted | | $ | 1,436,316 | | $ | 1,242,881 | | 15.6% |
| | | | | | | | |
| Global ECS sales, as reported | | $ | 2,031,645 | | $ | 2,006,253 | | 1.3% |
| Impact of changes in foreign currencies | | | - | | | (24,543) | | |
| Impact of acquisitions | | | - | | | 62,567 | | |
| Global ECS sales, as adjusted | | $ | 2,031,645 | | $ | 2,044,277 | | (0.6%) |
| | | | | | | | |
| Europe ECS sales, as reported | | $ | 539,932 | | $ | 599,128 | | (9.9%) |
| Impact of changes in foreign currencies | | | - | | | (26,725) | | |
| Impact of acquisitions | | | - | | | - | | |
| Europe ECS sales, as adjusted | | $ | 539,932 | | $ | 572,403 | | (5.7%) |
| |
| Americas ECS sales, as reported | | $ | 1,491,713 | | $ | 1,407,125 | | 6.0% |
| Impact of changes in foreign currencies | | | - | | | 2,182 | | |
| Impact of acquisitions | | | - | | | 62,567 | | |
| Americas ECS sales, as adjusted | | $ | 1,491,713 | | $ | 1,471,874 | | 1.3% |
| ARROW ELECTRONICS, INC. |
| NON-GAAP SALES RECONCILIATION |
| (In thousands) |
| (Unaudited) |
| | | |
| | Nine Months Ended | | |
| | Oct. 1,
2016 | | Sep. 26,
2015 | | % Change |
| | | | | | | | |
| Consolidated sales, as reported | | $ | 17,382,370 | | $ | 16,530,678 | | 5.2% |
| Impact of changes in foreign currencies | | | - | | | (111,315) | | |
| Impact of acquisitions | | | 48,148 | | | 614,020 | | |
| Consolidated sales, as adjusted | | $ | 17,430,518 | | $ | 17,033,383 | | 2.3% |
| | | | | | | | |
| Global components sales, as reported | | $ | 11,413,348 | | $ | 10,736,989 | | 6.3% |
| Impact of changes in foreign currencies | | | - | | | (52,310) | | |
| Impact of acquisitions | | | 9,711 | | | 333,703 | | |
| Global components sales, as adjusted | | $ | 11,423,059 | | $ | 11,018,382 | | 3.7% |
| | | | | | | | |
| Europe components sales, as reported | | $ | 3,123,258 | | $ | 2,902,619 | | 7.6% |
| Impact of changes in foreign currencies | | | - | | | (23,407) | | |
| Impact of acquisitions | | | - | | | 104,491 | | |
| Europe components sales, as adjusted | | $ | 3,123,258 | | $ | 2,983,703 | | 4.7% |
| | | | | | | | |
| Asia components sales, as reported | | $ | 3,912,613 | | $ | 3,504,969 | | 11.6% |
| Impact of changes in foreign currencies | | | - | | | (24,297) | | |
| Impact of acquisitions | | | - | | | 211,745 | | |
| Asia components sales, as adjusted | | $ | 3,912,613 | | $ | 3,692,417 | | 6.0% |
| | | | | | | | |
| Global ECS sales, as reported | | $ | 5,969,022 | | $ | 5,793,689 | | 3.0% |
| Impact of changes in foreign currencies | | | - | | | (59,006) | | |
| Impact of acquisitions | | | 38,437 | | | 280,317 | | |
| Global ECS sales, as adjusted | | $ | 6,007,459 | | $ | 6,015,000 | | (0.1%) |
| | | | | | | | |
| Europe ECS sales, as reported | | $ | 1,867,715 | | $ | 1,859,069 | | 0.5% |
| Impact of changes in foreign currencies | | | - | | | (41,268) | | |
| Impact of acquisitions | | | - | | | - | | |
| Europe ECS sales, as adjusted | | $ | 1,867,715 | | $ | 1,817,801 | | 2.7% |
| |
| Americas ECS sales, as reported | | $ | 4,101,307 | | $ | 3,934,620 | | 4.2% |
| Impact of changes in foreign currencies | | | - | | | (17,737) | | |
| Impact of acquisitions | | | 38,437 | | | 280,317 | | |
| Americas ECS sales, as adjusted | | $ | 4,139,744 | | $ | 4,197,200 | | (1.4%) |
| |
| ARROW ELECTRONICS, INC. |
| NON-GAAP EARNINGS RECONCILIATION |
| (In thousands except per share data) |
| (Unaudited) |
| |
| Three months ended October 1, 2016 |
| |
| | | Reported
GAAP
measure | | | Intangible
amortization
expense | | | Restructuring
& Integration
charges | | | Other* | | | Non-GAAP
measure |
| Operating income | | $ | 198,684 | | $ | 13,893 | | $ | 24,267 | | $ | - | | $ | 236,844 |
| Income before income taxes | | | 162,766 | | | 13,893 | | | 24,267 | | | - | | | 200,926 |
| Provision for income taxes | | | 44,931 | | | 4,959 | | | 7,439 | | | - | | | 57,329 |
| Consolidated net income | | | 117,835 | | | 8,934 | | | 16,828 | | | - | | | 143,597 |
Noncontrolling interests | | | 108 | | | 347 | | | - | | | - | | | 455 |
| Net income attributable to shareholders | | $ | 117,727 | | $ | 8,587 | | $ | 16,828 | | $ | - | | $ | 143,142 |
| Net income per diluted share | | | 1.28 | | | .09 | | | .18 | | | - | | | 1.56 |
| Effective tax rate | | | 27.6% | | | | | | | | | | | | 28.5% |
| | | | | | | | | | | | | | | | |
| Three months ended September 26, 2015 |
| | | | | | | | | | | | | | | |
| | | Reported
GAAP
measure | | | Intangible
amortization
expense | | | Restructuring
& Integration
charges | | | Other* | | | Non-GAAP
measure |
| Operating income | | $ | 185,794 | | | 14,269 | | | 17,756 | | | - | | | 217,819 |
| Income before income taxes | | | 152,059 | | | 14,269 | | | 17,756 | | | - | | | 184,084 |
| Provision for income taxes | | | 41,755 | | | 2,748 | | | 5,114 | | | - | | | 49,617 |
| Consolidated net income | | | 110,304 | | | 11,521 | | | 12,642 | | | - | | | 134,467 |
Noncontrolling interests | | | 1,060 | | | - | | | - | | | - | | | 1,060 |
| Net income attributable to shareholders | | $ | 109,244 | | | 11,521 | | | 12,642 | | | - | | | 133,407 |
| Net income per diluted share | | | 1.15 | | | .12 | | | .13 | | | - | | | 1.40 |
| Effective tax rate | | | 27.5% | | | | | | | | | | | | 27.0% |
| | | | | | | | | | | | | | | | |
| Nine months ended October 1, 2016 |
| | | | | | | | | | | | | | | |
| | | Reported
GAAP
measure | | | Intangible
amortization
expense | | | Restructuring
& Integration
charges | | | Other* | | | Non-GAAP
measure |
| Operating income | | $ | 603,640 | | | 41,252 | | | 61,161 | | | - | | | 706,053 |
| Income before income taxes | | | 497,206 | | | 41,252 | | | 61,161 | | | - | | | 599,619 |
| Provision for income taxes | | | 137,441 | | | 12,357 | | | 19,242 | | | - | | | 169,040 |
| Consolidated net income | | | 359,765 | | | 28,895 | | | 41,919 | | | - | | | 430,579 |
Noncontrolling interests | | | 1,533 | | | 940 | | | - | | | - | | | 2,473 |
| Net income attributable to shareholders | | $ | 358,232 | | | 27,955 | | | 41,919 | | | - | | | 428,106 |
| Net income per diluted share | | | 3.87 | | | .30 | | | .45 | | | - | | | 4.63 |
| Effective tax rate | | | 27.6% | | | | | | | | | | | | 28.2% |
| | | | | | | | | | | | | | | | |
| Nine months ended September 26, 2015 |
| | | | | | | | | | | | | | | |
| | | Reported
GAAP
measure | | | Intangible
amortization
expense | | | Restructuring
& Integration
charges | | | Other* | | | Non-GAAP
measure |
| Operating income | | $ | 570,171 | | | 39,293 | | | 51,099 | | | - | | | 660,563 |
| Income before income taxes | | | 471,667 | | | 39,293 | | | 51,099 | | | 2,435 | | | 564,494 |
| Provision for income taxes | | | 130,589 | | | 7,574 | | | 12,993 | | | 1,373 | | | 152,529 |
| Consolidated net income | | | 341,078 | | | 31,719 | | | 38,106 | | | 1,062 | | | 411,965 |
Noncontrolling interests | | | 1,844 | | | - | | | - | | | - | | | 1,844 |
| Net income attributable to shareholders | | $ | 339,234 | | | 31,719 | | | 38,106 | | | 1,062 | | | 410,121 |
| Net income per diluted share | | | 3.52 | | | .33 | | | .40 | | | .01 | | | 4.26 |
| Effective tax rate | | | 27.7% | | | | | | | | | | | | 27.0% |
*Other includes gain/loss on sale of investments and loss on prepayment of debt. |
| |
| ARROW ELECTRONICS, INC. |
| SEGMENT INFORMATION |
| (In thousands) |
| (Unaudited) |
| |
| | Quarter Ended | | Nine Months Ended |
| | Oct. 1,
2016 | | Sep. 26,
2015 | | Oct. 1,
2016 | | Sep. 26,
2015 |
| Sales: | | | | | | | | | | | | |
| Global components | | $ | 3,904,447 | | $ | 3,692,051 | | $ | 11,413,348 | | $ | 10,736,989 |
| Global ECS | | | 2,031,645 | | | 2,006,253 | | | 5,969,022 | | | 5,793,689 |
| Consolidated | | $ | 5,936,092 | | $ | 5,698,304 | | $ | 17,382,370 | | $ | 16,530,678 |
| | | | | | | | | | | | |
| Operating income (loss): | | | | | | | | | | | | |
| Global components | | $ | 175,507 | | $ | 164,744 | | $ | 524,662 | | $ | 499,456 |
| Global ECS | | | 96,181 | | | 84,233 | | | 283,792 | | | 250,144 |
| Corporate (a) | | | (73,004) | | | (63,183) | | | (204,814) | | | (179,429) |
| Consolidated | | $ | 198,684 | | $ | 185,794 | | $ | 603,640 | | $ | 570,171 |
| (a) | | Includes restructuring, integration, and other charges of $24.3 million and $61.2 million for the third quarter and nine months ended 2016 and $17.8 million and $51.1 million for the third quarter and nine months ended 2015, respectively. |
| |
NON-GAAP SEGMENT RECONCILIATION |
| |
| | Quarter Ended | | Nine Months Ended |
| | Oct. 1,
2016 | | Sep. 26,
2015 | | Oct. 1,
2016 | | Sep. 26,
2015 |
| Global components operating income, as reported | | $ | 175,507 | | $ | 164,744 | | $ | 524,662 | | $ | 499,456 |
| Intangible assets amortization expense | | | 7,679 | | | 7,540 | | | 24,124 | | | 20,468 |
| Global components operating income, as adjusted | | $ | 183,186 | | $ | 172,284 | | $ | 548,786 | | $ | 519,924 |
| | | | | | | | | | | | |
| Global ECS operating income, as reported | | $ | 96,181 | | $ | 84,233 | | $ | 283,792 | | $ | 250,144 |
| Intangible assets amortization expense | | | 6,214 | | | 6,729 | | | 17,128 | | | 18,825 |
| Global ECS operating income, as adjusted | | $ | 102,395 | | $ | 90,962 | | $ | 300,920 | | $ | 268,969 |
CONTACT:
Arrow Electronics, Inc.
Steven O’Brien, 303-824-4544
Director, Investor Relations
or
Media Contact:
John Hourigan, 303-824-4586
Vice President, Global Communications
