Exhibit 99.1
Arrow Electronics Reports Record Annual Revenue
-- Fourth Quarter Sales Advance 18% Year-over-Year --
-- Cash Flow from Operations of $288 Million in the Current Quarter --
MELVILLE, N.Y.--(BUSINESS WIRE)--Feb. 22, 2007--Arrow Electronics,
Inc. (NYSE:ARW) today reported fourth quarter 2006 net income of
$128.1 million ($1.05 and $1.04 per share on a basic and diluted
basis, respectively) on sales of $3.49 billion, compared with net
income of $74.4 million ($.62 and $.60 per share on a basic and
diluted basis, respectively) on sales of $2.96 billion in the fourth
quarter of 2005. Consolidated sales grew 18% over the fourth quarter
of 2005, or 8% on a pro forma basis including the impact of
acquisitions.
Results for the fourth quarter of 2006 include a number of items
that were not included in the company's guidance and impact their
comparability:
-- The company settled certain tax matters covering multiple
years during the fourth quarter of 2006. As such, the company
recorded a reduction in the provision for income taxes of
$46.2 million and related interest expense of $6.9 million
($4.2 million net of related taxes) in the fourth quarter. The
impact on net income was an increase of $50.4 million, of
which $1.9 million related to the fourth quarter of 2006.
-- During the fourth quarter of 2006, the company made the
decision to expand and accelerate a strategic initiative that
includes the introduction of a worldwide ERP system. The
impact on net income was a decrease of $3.6 million. The
company expects that future costs of this initiative will be
offset by further cost efficiencies within its business and,
as such, does not expect this initiative to be dilutive to
future earnings.
-- During the fourth quarter of 2006, the company completed the
valuation of identifiable intangibles associated with
acquisitions completed in the fourth quarter of 2005.
Accordingly, the company recorded the related amortization
expense for the full year in the fourth quarter of 2006. The
impact on net income was a decrease of $1.6 million, of which
$.4 million related to the fourth quarter of 2006.
-- The company recorded restructuring charges and costs
associated with pre-acquisition warranty and environmental
claims. The impact of these various items was a decrease of
$7.8 million in net income.
Excluding the aforementioned items net income for the quarter
ended December 31, 2006 would have been $92.2 million ($.75 per share
on both a basic and diluted basis). Included in the fourth quarter of
2005 were restructuring charges and a loss on the prepayment of debt.
The impact on net income was a decrease of $3.0 million. Excluding
these items, net income for the quarter ended December 31, 2005 would
have been $77.4 million ($.65 and $.63 per share on a basic and
diluted basis).
"We ended an exceptional year with another very strong quarter,
again posting impressive financial results and industry-leading levels
of profitability. Sales and operating income grew to their highest
fourth quarter levels since 2000. Outstanding working capital
management drove operating cash flow of $288 million with return on
invested capital greater than our cost of capital for the 12th
consecutive quarter," said William E. Mitchell, chairman, president
and chief executive officer, Arrow Electronics, Inc.
"We saw sales at record levels in 2006 with market share gains in
all of our businesses. Our continued pursuit of operational excellence
enabled us to grow earnings at a faster pace than sales for the fourth
consecutive year. We achieved our highest return on working capital
since 2000 and generated a return on invested capital in excess of our
cost of capital for the third consecutive year. In the past four years
annual net income, excluding items impacting comparability, has
advanced from $15 million to $362 million, earnings per share have
grown at a compound annual growth rate of 110%, our return on invested
capital has more than tripled and cash flow from operations has
totaled over $1 billion, all while investing in growing our business.
We continue to create value for our shareholders, employees, customers
and suppliers," he added.
Worldwide components sales increased 15%, or 10% on a pro forma
basis including the impact of acquisitions, over the fourth quarter of
2005. "We gained market share in global components on a year-over-year
basis. Sales in Europe and Asia Pacific reached record fourth quarter
levels, while strong working capital management and progress on
efficiency initiatives resulted in Europe's highest fourth quarter
return on working capital in five years and a record low level of
working capital to sales for a fourth quarter in Asia Pacific. In
North America, our core business serving small and medium sized
customers performed well and we reached our second highest level of
profits since 2000, all in the face of the well-publicized broad
market weakness in the large customer base," stated Mr. Mitchell.
Worldwide computer products sales increased 27%, while sales for
our enterprise computing solutions business increased 5% on a pro
forma basis including the impact of acquisitions, over the fourth
quarter of 2005. "Strong performance in all product segments led us to
our 12th consecutive quarter of year-over-year growth, and continued
industry leading levels of profitability and returns. As we enter
2007, execution of our strategic initiatives in this very important
business segment have resulted in a much stronger organization.
Organically and through acquisitions, we have significantly expanded
our geographic reach with a leadership position now in 17 countries.
We have strengthened our relationships with industry leading
suppliers, gained market share in the fastest growing segments of the
markets, and expanded our product offerings into the rapidly growing
and increasingly important security and networking software arena, all
creating value for our employees and our business partners," said
Mr. Mitchell.
The company has made the decision to expand and accelerate an
important strategic initiative to be more efficient and effective. In
connection with this initiative, the company will introduce a
worldwide ERP system in order to provide its employees with a single
common infrastructure to best serve its customers and suppliers. "We
are laying the foundation for increasing globalization in our business
thereby creating greater value for our business partners, as well as
our shareholders. This strategic initiative is expected to facilitate
the most efficient processes around the world and empower our
employees with the right tools to be more productive while providing
superior levels of service. This initiative will have a significant
positive impact on our long-term performance, resulting in improved
cash flow and a more efficient, effective and profitable
organization," said Mr. Mitchell. Implementation will occur in phases
and is expected to be completed in four years. In 2007, the cash flow
impact of this initiative is expected to be $70 to $80 million. The
company will finance this initiative with cash flow from operations
and does not expect these activities to be dilutive to earnings going
forward.
Also included in the results for the fourth quarter of 2006 is
$3.4 million ($2.4 million net of related taxes or $.02 per share on
both a basic and diluted basis) related to the expensing of stock
options in accordance with the provisions of Financial Accounting
Standards Board Statement No. 123 (revised 2004), "Share Based
Payment" ("FASB Statement No. 123R"). No such charge was recorded in
2005.
"Based upon the information known to us today, we believe that
sales in the first quarter will be between $3.525 and $3.725 billion,"
said Paul J. Reilly, senior vice president and chief financial
officer. "In our worldwide components business we expect continued
strength in our small and medium sized customer base while our large
customers continue to work down their inventory positions, resulting
in worldwide components sales between $2.775 and $2.875 billion. We
anticipate traditional seasonality in our computer products business
to be offset, in part, by the impact of the Alternative Technology,
Inc. and InTechnology plc acquisitions, resulting in worldwide
computer products sales between $750 and $850 million. Earnings per
share, on a diluted basis, are expected to be in the range of $.72 to
$.76. This represents an increase of 6% to 12% year-over-year," added
Mr. Reilly.
FULL YEAR RESULTS
Arrow's net income for 2006 was $388.3 million ($3.19 and $3.16
per share on a basic and diluted basis, respectively) on sales of
$13.58 billion, compared with net income of $253.6 million ($2.15 and
$2.09 per share on a basic and diluted basis, respectively) on sales
of $11.16 billion for 2005.
Net income for 2006 includes a number of items that were not
included in the company's guidance and impact their comparability:
-- The company settled certain tax matters covering multiple
years during the fourth quarter of 2006. As such, the company
recorded a reduction in the provision for income taxes and
related interest expense in the fourth quarter. The impact on
net income was an increase of $50.4 million, of which $7.5
million related to the full year 2006. Going forward, the
company expects an annual reduction in income taxes of $5.8
million and a reduction in related interest expense of $2.6
million ($1.5 million net of related taxes).
-- During the fourth quarter of 2006, the company made the
decision to expand and accelerate a strategic initiative that
includes the introduction of a worldwide ERP system. The
impact on net income was a decrease of $3.6 million.
-- The company recorded restructuring charges and costs
associated with pre-acquisition warranty and environmental
claims. The impact of these various items was a decrease of
$11.7 million in net income.
-- The company recorded a loss on prepayment of debt related to
the redemption of certain of its zero coupon convertible
debentures due in 2021 and on the repurchase of certain of its
7% Senior Notes due in January 2007, which have since been
fully repaid. The impact on net income was a decrease of $1.6
million.
Excluding these items, net income would have been $362.4 million
($2.98 and $2.95 per share on a basic and diluted basis, respectively)
for 2006. Included in the results for 2006 is $13.0 million ($8.5
million net of related taxes or $.07 per share on both a basic and
diluted basis) related to the expensing of stock options in accordance
with the provisions of FASB Statement No. 123R. No such charge was
recorded in 2005.
Net income for 2005 includes restructuring charges totaling $12.7
million ($7.3 million net of related taxes or $.06 and $.05 per share
on a basic and diluted basis, respectively), a loss of $4.3 million
($2.6 million net of related taxes or $.02 and $.01 per share on a
basic and diluted basis, respectively) associated with the prepayment
of approximately $179 million of the company's debt, a write-down of
an investment of $3.0 million ($.03 per share on both a basic and
diluted basis), and an acquisition indemnification credit of $1.7
million ($1.3 million net of related taxes or $.01 per share on a
basic basis). Excluding these items, net income would have been $265.3
million ($2.25 and $2.18 per share on a basic and diluted basis,
respectively) for 2005.
Arrow Electronics (www.arrow.com) is a global provider of
products, services and solutions to industrial and commercial users of
electronic components and computer products. Headquartered in
Melville, New York, Arrow serves as a supply channel partner for more
than 600 suppliers and 140,000 original equipment manufacturers,
contract manufacturers and commercial customers through a global
network of over 260 locations in 55 countries and territories.
Certain Non-GAAP Financial Information
In addition to disclosing results that are determined in
accordance with Generally Accepted Accounting Principles ("GAAP"), the
company provides certain non-GAAP financial information relating to
operating income, net income and net income per basic and diluted
share, each as adjusted for certain charges, credits and losses that
the company believes impact the comparability of its results of
operations. These charges, credits and losses arise out of the
settlement of certain tax matters, the company's efficiency
enhancement initiatives, the company's acquisitions of other
companies, the prepayment of debt, and the write-down of an
investment. A reconciliation of the company's non-GAAP financial
information to GAAP is set forth in the table 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 the charges, credits and losses
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, 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.
EARNINGS RECONCILIATION
(In thousands except per share data)
Three Months Ended Year Ended
December 31, December 31,
------------------- -------------------
2006 2005 2006 2005
--------- --------- --------- ---------
Operating income, as reported $141,379 $134,769 $606,225 $480,258
Restructuring charges 5,411 3,719 11,829 12,716
Pre-acquisition warranty
claim 2,837 - 2,837 -
Pre-acquisition
environmental matters 1,449 - 1,449 -
Amortization of intangible
assets 1,207 - - -
Acquisition indemnification
credit - - - (1,672)
--------- --------- --------- ---------
Operating income, as adjusted $152,283 $138,488 $622,340 $491,302
--------- --------- --------- ---------
Net income, as reported $128,071 $ 74,446 $388,331 $253,609
Restructuring charges 5,062 2,294 8,977 7,310
Pre-acquisition warranty
claim 1,861 - 1,861 -
Pre-acquisition
environmental matters 867 - 867 -
Amortization of intangible
assets 1,207 - - -
Impact of settlement of
tax matters
Income Taxes:
January to September 30,
2006 (4,312) - - -
2005 and prior (40,426) - (40,426) -
Interest (net of taxes):
January to September 30,
2006 (1,327) - - -
2005 and prior (2,431) - (2,431) -
Loss on prepayment of debt - 677 1,558 2,596
Write-down of investment - - - 3,019
Acquisition indemnification
credit - - - (1,267)
--------- --------- --------- ---------
Net income, as adjusted $ 88,572 $ 77,417 $358,737 $265,267
--------- --------- --------- ---------
Net income per basic share,
as reported $ 1.05 $ .62 $ 3.19 $ 2.15
Restructuring charges .04 .03 .07 .06
Pre-acquisition warranty
claim .02 - .02 -
Pre-acquisition
environmental matters .01 - .01 -
Amortization of intangible
assets .01 - - -
Impact of settlement of
tax matters
Income Taxes:
January to September 30,
2006 (.04) - - -
2005 and prior (.33) - (.33) -
Interest (net of taxes):
January to September 30,
2006 (.01) - - -
2005 and prior (.02) - (.02) -
Loss on prepayment of debt - - .01 .02
Write-down of investment - - - .03
Acquisition indemnification
credit - - - (.01)
--------- --------- --------- ---------
Net income per basic share,
as adjusted $ .72 $ .65 $ 2.95 $ 2.25
--------- --------- --------- ---------
Net income per diluted share,
as reported $ 1.04 $ .60 $ 3.16 $ 2.09
Restructuring charges .04 .03 .07 .05
Pre-acquisition warranty
claim .02 - .02 -
Pre-acquisition
environmental matters .01 - .01 -
Amortization of intangible
assets .01 - - -
Impact of settlement of
tax matters
Income Taxes:
January to September 30,
2006 (.04) - - -
2005 and prior (.33) - (.33) -
Interest (net of taxes):
January to September 30,
2006 (.01) - - -
2005 and prior (.02) - (.02) -
Loss on prepayment of debt - - .01 .01
Write-down of investment - - - .03
--------- --------- --------- ---------
Net income per diluted share,
as adjusted $ .72 $ .63 $ 2.92 $ 2.18
--------- --------- --------- ---------
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.
During the fourth quarter of 2006, the company initiated a global
ERP effort to standardize processes worldwide and adopt best-in-class
capabilities. During 2006, the company recorded, as a component of
selling, general and administrative expenses, expenses of $6.0 million
($3.6 million net of related taxes or $.03 per share on both a basic
and diluted basis) for incremental costs related to the implementation
of the global ERP system. Excluding the impact of such expenses,
earnings per share for the fourth quarter would have been $.75 on both
a basic and diluted basis and earnings per share for the year ended
December 31, 2006 would have been $2.98 and $2.95 per share on a basic
and diluted basis, respectively.
Effective January 1, 2006, the company adopted the provisions of
Financial Accounting Standards Board Statement No. 123 (revised 2004),
"Share Based Payment" ("FASB Statement No. 123R"). The company adopted
the modified prospective transition method provided for under FASB
Statement No. 123R and, accordingly, has not restated prior period
amounts. As a result of adopting FASB Statement No. 123R, the company
recorded a charge of $3.4 million ($2.4 million net of related taxes
or $.02 per share on both a basic and diluted basis) and $13.0 million
($8.5 million net of related taxes or $.07 per share on both a basic
and diluted basis) for the three months and year ended December 31,
2006, respectively, related to the expensing of stock options. The
pre-tax compensation expense is included in selling, general and
administrative expenses.
In computing net income per diluted share for the year ended
December 31, 2006, net income was increased by $524 thousand for
interest (net of taxes) related to the zero coupon convertible
debentures ("convertible debentures") which are dilutive common stock
equivalents. In addition, the diluted average number of shares
outstanding for the year ended December 31, 2006 includes 467,000
shares related to the convertible debentures.
In computing net income per diluted share for the three months and
year ended December 31, 2005, net income was increased by $916
thousand and $5.2 million, respectively, for interest (net of taxes)
related to the convertible debentures which are dilutive common stock
equivalents. In addition, the diluted average number of shares
outstanding for the three months and year ended December 31, 2005
includes 3,390,000 shares and 4,906,000 shares, respectively, related
to the convertible debentures.
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 ongoing planned implementation of
its new global financial system and new enterprise resource planning
system, changes in product supply, pricing and customer demand,
competition, other vagaries in the electronic components and computer
products markets, changes in relationships with key suppliers,
increased profit margin pressure, the effects of additional actions
taken to become more efficient or lower costs, the company's ability
to generate additional cash flow and the other risks described from
time to time in the company's reports to the Securities and Exchange
Commission (including the company's Annual Report on Form 10-K and
Quarterly Reports on Form 10-Q). Forward-looking statements are those
statements, which are not statements of historical fact. You can
identify these forward-looking statements 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.
ARROW ELECTRONICS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except per share data)
Three Months Ended Year Ended
December 31, December 31,
----------------------- -------------------------
2006 2005 2006 2005
----------- ----------- ------------ ------------
Sales $3,493,320 $2,959,610 $13,577,112 $11,164,196
----------- ----------- ------------ ------------
Costs and expenses:
Cost of products
sold 2,981,977 2,512,818 11,545,719 9,424,586
Selling, general
and administrative
expenses 346,542 297,372 1,362,149 1,200,826
Depreciation and
amortization 13,725 10,932 46,904 47,482
Restructuring
charges 5,411 3,719 11,829 12,716
Pre-acquisition
warranty claim 2,837 - 2,837 -
Pre-acquisition
environmental
matters 1,449 - 1,449 -
Acquisition
indemnification
credit - - - (1,672)
----------- ----------- ------------ ------------
3,351,941 2,824,841 12,970,887 10,683,938
----------- ----------- ------------ ------------
Operating income 141,379 134,769 606,225 480,258
Equity in earnings of
affiliated companies 1,681 1,479 5,221 4,492
Loss on prepayment of
debt - 1,133 2,605 4,342
Write-down of
investment - - - 3,019
Interest expense, net 16,733 21,062 90,564 91,828
----------- ----------- ------------ ------------
Income before income
taxes and minority
interest 126,327 114,053 518,277 385,561
Provision for
(benefit from)
income taxes (2,377) 39,478 128,457 131,248
----------- ----------- ------------ ------------
Income before
minority interest 128,704 74,575 389,820 254,313
Minority interest 633 129 1,489 704
----------- ----------- ------------ ------------
Net income $ 128,071 $ 74,446 $ 388,331 $ 253,609
----------- ----------- ------------ ------------
Net income per share:
Basic $ 1.05 $ .62 $ 3.19 $ 2.15
----------- ----------- ------------ ------------
Diluted $ 1.04 $ .60 $ 3.16 $ 2.09
----------- ----------- ------------ ------------
Average number of
shares outstanding:
Basic 122,190 119,482 121,667 117,819
Diluted 123,191 124,646 123,181 124,080
ARROW ELECTRONICS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands except par value)
December 31,
--------------------------
2006 2005
------------- ------------
ASSETS
Current assets:
Cash and cash equivalents $ 337,730 $ 580,661
Accounts receivable, net 2,710,321 2,316,932
Inventories 1,691,536 1,494,982
Prepaid expenses and other assets 156,034 124,899
------------- ------------
Total current assets 4,895,621 4,517,474
------------- ------------
Property, plant and equipment, at cost:
Land 41,810 41,855
Buildings and improvements 167,157 160,012
Machinery and equipment 481,689 426,239
------------- ------------
690,656 628,106
Less: Accumulated depreciation and
amortization (428,283) (392,641)
------------- ------------
Property, plant and equipment, net 262,373 235,465
------------- ------------
Investments in affiliated companies 41,960 38,959
Cost in excess of net assets of companies
acquired 1,231,281 1,053,266
Other assets 238,337 199,753
------------- ------------
Total assets $ 6,669,572 $ 6,044,917
------------- ------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,795,089 $ 1,628,568
Accrued expenses 446,238 434,644
Short-term borrowings, including current
portion of long-term debt 262,783 268,666
------------- ------------
Total current liabilities 2,504,110 2,331,878
------------- ------------
Long-term debt 976,774 1,138,981
Other liabilities 192,129 201,172
Shareholders' equity:
Common stock, par value $1:
Authorized - 160,000 shares in 2006 and
2005
Issued - 122,626 and 120,286 shares in
2006 and 2005, respectively 122,626 120,286
Capital in excess of par value 943,958 861,880
Retained earnings 1,787,746 1,399,415
Foreign currency translation adjustment 155,166 13,308
------------- ------------
3,009,496 2,394,889
Less: Treasury stock (207 and 272 shares
in 2006 and 2005, respectively),
at cost (5,530) (7,278)
Unamortized employee stock awards - (2,395)
Other (7,407) (12,330)
------------- ------------
Total shareholders' equity 2,996,559 2,372,886
------------- ------------
Total liabilities and shareholders'
equity $ 6,669,572 $ 6,044,917
------------- ------------
ARROW ELECTRONICS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Three Months Ended
December 31,
---------------------
2006 2005
---------- ----------
Cash flows from operating activities:
Net income $ 128,071 $ 74,446
Adjustments to reconcile net income to net cash
provided by operations:
Depreciation and amortization 13,725 10,932
Amortization of deferred financing costs and
discount on notes 656 793
Amortization of restricted stock and
performance awards 1,546 1,744
Amortization of employee stock options 3,420 -
Accretion of discount on zero coupon
convertible debentures - 1,532
Deferred income taxes 10,802 21,826
Restructuring charges 5,062 2,294
Pre-acquisition warranty claim and
environmental matters 2,728 -
Equity in earnings of affiliated companies (1,681) (1,479)
Impact of settlement of tax matters (50,376) -
Minority interest 633 129
Loss on prepayment of debt - 677
Change in assets and liabilities, net of
effects of acquired businesses:
Accounts receivable 65,685 (35,579)
Inventories (17,044) (45,514)
Prepaid expenses and other assets (14,392) (12,228)
Accounts payable 175,257 101,575
Accrued expenses (29,788) (13,715)
Other (6,503) (939)
---------- ----------
Net cash provided by operating activities 287,801 106,494
---------- ----------
Cash flows from investing activities:
Acquisition of property, plant and equipment (24,408) (13,390)
Cash consideration paid for acquired businesses (156,775) (154,374)
Other 59 (2,395)
---------- ----------
Net cash used for investing activities (181,124) (170,159)
---------- ----------
Cash flows from financing activities:
Change in short-term borrowings (31,747) 2,958
Change in long-term debt (55) (363)
Repurchase of senior notes - (27,762)
Proceeds from exercise of stock options 5,489 12,821
Excess tax benefits from stock-based
compensation arrangements 175 -
---------- ----------
Net cash used for financing activities (26,138) (12,346)
---------- ----------
Effect of exchange rate changes on cash 4,340 3,005
---------- ----------
Net increase (decrease) in cash and cash
equivalents 84,879 (73,006)
Cash and cash equivalents at beginning of period 252,851 653,667
---------- ----------
Cash and cash equivalents at end of period $ 337,730 $ 580,661
---------- ----------
ARROW ELECTRONICS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Year Ended
December 31,
---------------------
2006 2005
---------- ----------
Cash flows from operating activities:
Net income $ 388,331 $ 253,609
Adjustments to reconcile net income to net cash
provided by operations:
Depreciation and amortization 46,904 47,482
Amortization of deferred financing costs and
discount on notes 2,808 3,589
Amortization of restricted stock and
performance awards 8,289 6,953
Amortization of employee stock options 12,979 -
Accretion of discount on zero coupon
convertible debentures 876 8,698
Excess tax benefits from stock-based
compensation arrangements (6,661) -
Deferred income taxes (9,433) 21,920
Restructuring charges 8,977 7,310
Pre-acquisition warranty claim and
environmental matters 2,728 -
Acquisition indemnification credit - (1,267)
Equity in earnings of affiliated companies (5,221) (4,492)
Write-down of investment - 3,019
Impact of settlement of tax matters (50,376) -
Minority interest 1,489 704
Loss on prepayment of debt 1,558 2,596
Change in assets and liabilities, net of
effects of acquired businesses:
Accounts receivable (202,135) (188,235)
Inventories (119,612) 11,707
Prepaid expenses and other assets (25,131) (17,300)
Accounts payable 52,561 258,485
Accrued expenses 13,784 (11,738)
Other (1,875) (492)
---------- ----------
Net cash provided by operating activities 120,840 402,548
---------- ----------
Cash flows from investing activities:
Acquisition of property, plant and equipment (66,078) (33,179)
Proceeds from sale of facilities - 18,353
Cash consideration paid for acquired businesses (176,235) (178,998)
Purchase of short-term investments - (230,456)
Proceeds from sale of short-term investments - 389,056
Other 3,652 2,429
---------- ----------
Net cash used for investing activities (238,661) (32,795)
---------- ----------
Cash flows from financing activities:
Change in short-term borrowings (22,298) 11,994
Change in long-term debt (15,687) (2,400)
Repurchase of senior notes (4,268) (27,762)
Repurchase of zero coupon convertible
debentures (156,330) (152,449)
Proceeds from exercise of stock options 59,194 82,176
Excess tax benefits from stock-based
compensation arrangements 6,661 -
---------- ----------
Net cash used for financing activities (132,728) (88,441)
---------- ----------
Effect of exchange rate changes on cash 7,618 (5,945)
---------- ----------
Net increase (decrease) in cash and cash
equivalents (242,931) 275,367
Cash and cash equivalents at beginning of year 580,661 305,294
---------- ----------
Cash and cash equivalents at end of year $ 337,730 $ 580,661
---------- ----------
ARROW ELECTRONICS, INC.
SEGMENT INFORMATION
(In thousands)
Three Months Ended Year Ended
December 31, December 31,
----------------------- -------------------------
2006 2005 2006 2005
----------- ----------- ------------ ------------
Sales:
Electronic
components $2,659,018 $2,302,599 $10,818,421 $ 8,825,774
Computer products 834,302 657,011 2,758,691 2,338,422
----------- ----------- ------------ ------------
Consolidated $3,493,320 $2,959,610 $13,577,112 $11,164,196
----------- ----------- ------------ ------------
Operating income
(loss):
Electronic
components $ 135,798 $ 124,542 $ 595,643 $ 457,832
Computer products 43,834 38,191 126,638 124,381
Corporate (a) (38,253) (27,964) (116,056) (101,955)
----------- ----------- ------------ ------------
Consolidated $ 141,379 $ 134,769 $ 606,225 $ 480,258
----------- ----------- ------------ ------------
Effective January 1, 2006, the OEM Computing Solutions business,
which was previously included in the worldwide computer products
business, was transitioned into the company's worldwide components
business to further leverage customer overlap and to take advantage of
greater opportunities for selling synergies. Prior period segment data
was adjusted to conform with the current period presentation.
(a) Includes a charge related to a pre-acquisition warranty claim of
$2.8 million and a charge related to pre-acquisition
environmental matters arising out of the company's purchase of
Wyle of $1.4 million for the three months and year ended December
31, 2006. Also includes stock option expense of $3.4 million and
$13.0 million, resulting from the company's adoption of Statement
No. 123R, and restructuring charges of $5.4 million and $11.8
million for the three months and year ended December 31, 2006,
respectively. Includes restructuring charges of $3.7 million and
$12.7 million for the three months and year ended December 31,
2005, respectively, as well as an acquisition indemnification
credit of $1.7 million for the year ended December 31, 2005.
CONTACT: Arrow Electronics, Inc.
Ira M. Birns, 631-847-1657
Vice President & Treasurer
or
Paul J. Reilly, 631-847-1872
Senior Vice President & Chief Financial Officer
or
Media:
Jacqueline F. Strayer, 631-847-2101
Vice President, Corporate Communications