Arrow Electronics Business Continuity Deb Rims
View all news July 30, 2020 -- Cash Provided by Operating Activities of $418 Million -- -- Announces Additional $600 Million Share Repurchase Program -- CENTENNIAL, Colo.--(BUSINESS WIRE)-- Arrow Electronics, Inc. (NYSE:ARW) today reported second-quarter 2020 sales of $6.61 billion, a decrease of 10 percent from sales of $7.34 billion in the second quarter of 2019. Second-quarter sales, as adjusted, decreased 8 percent year over year. Second-quarter net income of $133 million, or $1.68 per share on a diluted basis, compared with a net loss of $(549) million, or $(6.48) per share on a diluted basis, in the second quarter of 2019. Excluding certain items1, net income, as adjusted, was $126 million, or $1.59 per share on a diluted basis, in the second quarter of 2020, compared with net income, as adjusted, of $137 million, or $1.60 per share on a diluted basis, in the second quarter of 2019. "Arrow has again proven to be a source of reliability and stability for suppliers and customers amidst supply chain disruptions and an uncertain economic backdrop. Our efforts to expand our engineering and design expertise both prior to and during the COVID-19 pandemic are helping customers quickly get back to business," said Michael J. Long, chairman, president, and chief executive officer. "In turn, our vital position in the technology ecosystem, and our ever-expanding capabilities drove results above our expectations." Global components second-quarter sales of $4.72 billion decreased 10 percent year over year. Sales, as adjusted, decreased 8 percent year over year. Asia-Pacific components sales increased 7 percent year over year. Europe components sales decreased 21 percent year over year. Sales in the region, as adjusted, decreased 18 percent year over year. Americas components sales decreased 21 percent year over year. Sales in the region, as adjusted, decreased 18 percent year over year. Global components second-quarter operating income was $182 million. Second-quarter operating income, as adjusted, was $177 million. "Arrow is harnessing data from billions of transactions with thousands of customers to sell and deliver the products and solutions that our customers want when they need them," continued Mr. Long. "Sales were above the high end of our expectation driven by Asia that has seen a remarkable rebound in manufacturing activity due to earlier pandemic onset and recovery." Global enterprise computing solutions second-quarter sales of $1.89 billion decreased 9 percent year over year. Sales, as adjusted, decreased 8 percent year over year. Europe enterprise computing solutions sales decreased 6 percent year over year. Sales in the region, as adjusted, decreased 4 percent year over year. Americas enterprise computing solutions sales decreased 11 percent year over year. Global enterprise computing solutions second-quarter operating income was $73 million. Second-quarter operating income, as adjusted, was $80 million. "In terms of product segments, demand remains strong for the software, cloud, and security solutions needed to enable business continuity and remote working," said Mr. Long. "We continue to evolve our portfolio to areas with greater long-term growth potential." "With financial returns improving and the effective management of our balance sheet and cash flow, we enhanced our commitment to returning excess cash to shareholders through a new $600 million repurchase authorization," said Chris Stansbury, senior vice president and chief financial officer. "Our liquidity position remains the best in our company's history and improved further, with more than $3.2 billion of undrawn committed borrowing capacity in addition to cash on hand." 1 A reconciliation of non-GAAP adjusted financial measures, including sales, gross profit, operating income, net income attributable to shareholders, and net income per share, as adjusted, to GAAP financial measures is presented in the reconciliation tables included herein. THIRD-QUARTER 2020 OUTLOOK Third-Quarter 2020 Outlook Reported GAAP Intangible amortization Restructuring & Non-GAAP measure Net income per diluted share $1.34 - $1.50 $0.10 $0.10 $1.54 - $1.70 Please refer to the CFO commentary, which can be found at investor.arrow.com, as a supplement to the company's earnings release. Arrow Electronics guides innovation forward for over 175,000 leading technology manufacturers and service providers. With 2019 sales of $29 billion, Arrow develops technology solutions that improve business and daily life. Learn more at fiveyearsout.com. Information Relating to Forward-Looking Statements This press release includes forward-looking statements 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: potential adverse effects of the ongoing global coronavirus pandemic, including actions taken to contain or treat the coronavirus, industry conditions, changes in product supply, pricing and customer demand, competition, other vagaries in the global components and global ECS markets, changes in relationships with key suppliers, increased profit margin pressure, changes in legal and regulatory matters, non-compliance with certain regulations, such as export, anti-trust, and anti-corruption laws, foreign tax and other loss contingencies, and the company's ability to generate cash flow. For a further discussion of these and other factors that could cause the company's future results to differ materially from any forward-looking statements, see the section entitled "Risk Factors" in the company's Annual Report on Form 10-K for the year ended December 31, 2019 and the risk factor update in Form 10-Q for the quarter ended June 27, 2020. 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. 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, gross profit, and operating expenses as adjusted for the impact of changes in foreign currencies (referred to as "changes in foreign currencies") by re-translating prior period results at current period foreign exchange rates, the impact of dispositions by adjusting the company's operating results for businesses disposed, as if the dispositions had occurred at the beginning of the earliest period presented (referred to as "dispositions"), the impact of the company's personal computer and mobility asset disposition business (referred to as "wind down"), the impact of inventory write-downs related to the digital business (referred to as "digital inventory write-downs and recoveries"), and the impact of the notes receivable reserves and inventory write-downs related to the AFS business (referred to as "AFS notes receivable reserves and recoveries" and "AFS inventory write-downs and recoveries," respectively). Operating income is adjusted to exclude identifiable intangible asset amortization, restructuring, integration, and other charges, loss on disposition of businesses, net, AFS notes receivable reserves and credits and inventory write-downs and recoveries, digital inventory write-downs and recoveries, the impact of non-cash charges related to goodwill, trade names, and long-lived assets, and the impact of wind down. Net income attributable to shareholders, and net income per basic and diluted share are adjusted to exclude identifiable intangible asset amortization, restructuring, integration, and other charges, loss on disposition of businesses, net, AFS notes receivable reserves and credits and inventory write-downs and recoveries, digital inventory write-downs and recoveries, net gains and losses on investments, the impact of non-cash charges related to goodwill, trade names, and long-lived assets, certain tax adjustments, and the impact of wind down. 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 Six Months Ended June 27, 2020 June 29, 2019 June 27, 2020 June 29, 2019 Sales $ 6,606,494 $ 7,344,548 $ 12,987,911 $ 14,500,539 Cost of sales 5,856,031 6,529,639 11,509,057 12,823,942 Gross profit 750,463 814,909 1,478,854 1,676,597 Operating expenses: Selling, general, and administrative expenses 501,470 599,212 1,035,309 1,155,288 Depreciation and amortization 46,812 46,982 93,922 94,508 Loss on disposition of businesses, net — — — 866 Impairments 4,918 697,993 4,918 697,993 Restructuring, integration, and other charges 650 19,912 9,788 31,572 553,850 1,364,099 1,143,937 1,980,227 Operating income (loss) 196,613 (549,190 ) 334,917 (303,630 ) Equity in earnings (losses) of affiliated companies (283 ) 382 247 (1,085 ) Gain (loss) on investments, net 10,901 1,390 (5,909 ) 6,738 Employee benefit plan expense (1,173 ) (1,139 ) (2,282 ) (2,278 ) Interest and other financing expense, net (31,867 ) (51,563 ) (75,135 ) (103,544 ) Income (loss) before income taxes 174,191 (600,120 ) 251,838 (403,799 ) Provision (benefit) for income taxes 40,854 (52,369 ) 68,746 1,538 Consolidated net income (loss) 133,337 (547,751 ) 183,092 (405,337 ) Noncontrolling interests 533 1,215 785 2,894 Net income (loss) attributable to shareholders $ 132,804 $ (548,966 ) $ 182,307 $ (408,231 ) Net income (loss) per share: Basic $ 1.69 $ (6.48 ) $ 2.29 $ (4.80 ) Diluted $ 1.68 $ (6.48 ) $ 2.28 $ (4.80 ) Weighted-average shares outstanding: Basic 78,677 84,652 79,527 85,022 Diluted 79,226 84,652 80,113 85,022 ARROW ELECTRONICS, INC. CONSOLIDATED BALANCE SHEETS (In thousands except par value) (Unaudited) June 27, 2020 December 31, 2019 ASSETS Current assets: Cash and cash equivalents $ 205,828 $ 300,103 Accounts receivable, net 7,954,038 8,482,687 Inventories 3,420,912 3,477,120 Other current assets 213,190 266,249 Total current assets 11,793,968 12,526,159 Property, plant, and equipment, at cost: Land 7,743 7,793 Buildings and improvements 188,563 173,370 Machinery and equipment 1,501,919 1,481,525 1,698,225 1,662,688 Less: Accumulated depreciation and amortization (900,035) (859,578) Property, plant, and equipment, net 798,190 803,110 Investments in affiliated companies 80,756 86,942 Intangible assets, net 249,528 271,903 Goodwill 2,052,128 2,061,322 Other assets 629,891 651,360 Total assets $ 15,604,461 $ 16,400,796 LIABILITIES AND EQUITY Current liabilities: Accounts payable $ 6,967,180 $ 7,046,221 Accrued expenses 920,929 880,507 Short-term borrowings, including current portion of long-term debt 244,323 331,431 Total current liabilities 8,132,432 8,258,159 Long-term debt 2,098,369 2,640,129 Other liabilities 623,712 636,115 Commitments and contingencies Equity: Shareholders' equity: Common stock, par value $1: Authorized - 160,000 shares in both 2020 and 2019, respectively Issued - 125,424 shares in both 2020 and 2019, respectively 125,424 125,424 Capital in excess of par value 1,151,895 1,150,006 Treasury stock (47,806 and 44,804 shares in 2020 and 2019, respectively), at cost (2,542,629) (2,332,548) Retained earnings 6,277,620 6,131,248 Accumulated other comprehensive loss (317,489) (262,211) Total shareholders' equity 4,694,821 4,811,919 Noncontrolling interests 55,127 54,474 Total equity 4,749,948 4,866,393 Total liabilities and equity $ 15,604,461 $ 16,400,796 ARROW ELECTRONICS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) Quarter Ended June 27, 2020 June 29, 2019 Cash flows from operating activities: Consolidated net income (loss) $ 133,337 $ (547,751 ) Adjustments to reconcile consolidated net income (loss) to net cash provided by operations: Depreciation and amortization 46,812 46,982 Amortization of stock-based compensation 8,397 8,539 Equity in (earnings) losses of affiliated companies 283 (382 ) Deferred income taxes 13,732 (78,814 ) Impairments 4,918 697,993 Gain on investments, net (10,885 ) (1,390 ) Other 253 6,381 Change in assets and liabilities, net of effects of acquired and disposed businesses: Accounts receivable, net (112,437 ) (54,436 ) Inventories (80,465 ) 143,740 Accounts payable 292,024 193,832 Accrued expenses 102,369 (21,102 ) Other assets and liabilities 19,907 11,826 Net cash provided by operating activities 418,245 405,418 Cash flows from investing activities: Proceeds from disposition of businesses — 9,460 Acquisition of property, plant, and equipment (31,571 ) (47,821 ) Net cash used for investing activities (31,571 ) (38,361 ) Cash flows from financing activities: Change in short-term and other borrowings 77,165 (66,112 ) Repayments of long-term bank borrowings, net (123,113 ) (216,046 ) Redemption of notes (209,366 ) — Proceeds from exercise of stock options 1,750 2,691 Repurchases of common stock (72,750 ) (146,999 ) Settlement of forward-starting interest rate swap (48,378 ) — Other (141 ) (147 ) Net cash used for financing activities (374,833 ) (426,613 ) Effect of exchange rate changes on cash (7,011 ) (22,354 ) Net increase (decrease) in cash and cash equivalents 4,830 (81,910 ) Cash and cash equivalents at beginning of period 200,998 351,899 Cash and cash equivalents at end of period $ 205,828 $ 269,989 ARROW ELECTRONICS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) Six Months Ended June 27, 2020 June 29, 2019 Cash flows from operating activities: Consolidated net income (loss) $ 183,092 $ (405,337) Adjustments to reconcile consolidated net income (loss) to net cash provided by operations: Depreciation and amortization 93,922 94,508 Amortization of stock-based compensation 22,317 27,629 Equity in (earnings) losses of affiliated companies (247) 1,085 Deferred income taxes 46,345 (71,846) Impairments 4,918 697,993 (Gain) loss on investments, net 5,925 (6,738) Other 48 11,956 Change in assets and liabilities, net of effects of acquired and disposed businesses: Accounts receivable, net 446,168 895,553 Inventories 52,927 278,142 Accounts payable (51,027) (1,346,176) Accrued expenses 71,043 (71,394) Other assets and liabilities 9,679 (28,956) Net cash provided by operating activities 885,110 76,419 Cash flows from investing activities: Proceeds from disposition of businesses — 9,460 Acquisition of property, plant, and equipment (59,542) (81,636) Other (5,466) 2,940 Net cash used for investing activities (65,008) (69,236) Cash flows from financing activities: Change in short-term and other borrowings (7,189) (173,356) Proceeds from (repayments of) long-term bank borrowings, net (411,690) 118,977 Redemption of notes (209,366) — Proceeds from exercise of stock options 3,730 9,622 Repurchases of common stock (231,739) (200,924) Settlement of forward-starting interest rate swap (48,378) — Other (141) (147) Net cash used for financing activities (904,773) (245,828) Effect of exchange rate changes on cash (9,604) (693) Net decrease in cash and cash equivalents (94,275) (239,338) Cash and cash equivalents at beginning of period 300,103 509,327 Cash and cash equivalents at end of period $ 205,828 $ 269,989 ARROW ELECTRONICS, INC. NON-GAAP SALES RECONCILIATION (In thousands) (Unaudited) Quarter Ended June 27, 2020 June 29, 2019 % Change Consolidated sales, as reported $ 6,606,494 $ 7,344,548 (10.0 ) % Impact of changes in foreign currencies — (65,177 ) Impact of wind down — (77,914 ) Consolidated sales, as adjusted $ 6,606,494 $ 7,201,457 (8.3 ) % Global components sales, as reported $ 4,721,255 $ 5,270,935 (10.4 ) % Impact of changes in foreign currencies — (40,092 ) Impact of wind down — (77,914 ) Global components sales, as adjusted $ 4,721,255 $ 5,152,929 (8.4 ) % Americas Components sales, as reported $ 1,488,901 $ 1,876,799 (20.7 ) % Impact of changes in foreign currencies — (2,372 ) Impact of wind down — (60,860 ) Americas Components sales, as adjusted $ 1,488,901 $ 1,813,567 (17.9 ) % Europe components sales, as reported $ 1,118,417 $ 1,415,888 (21.0 ) % Impact of changes in foreign currencies — (29,548 ) Impact of wind down — (17,054 ) Europe components sales, as adjusted $ 1,118,417 $ 1,369,286 (18.3 ) % Asia components sales, as reported $ 2,113,937 $ 1,978,248 6.9 % Impact of changes in foreign currencies — (8,172 ) Asia components sales, as adjusted $ 2,113,937 $ 1,970,076 7.3 % Global ECS sales, as reported $ 1,885,239 $ 2,073,613 (9.1 ) % Impact of changes in foreign currencies — (25,085 ) Global ECS sales, as adjusted $ 1,885,239 $ 2,048,528 (8.0 ) % Europe ECS sales, as reported $ 661,983 $ 701,157 (5.6 ) % Impact of changes in foreign currencies — (14,983 ) Europe ECS sales, as adjusted $ 661,983 $ 686,174 (3.5 ) % Americas ECS sales, as reported $ 1,223,256 $ 1,372,456 (10.9 ) % Impact of changes in foreign currencies — (10,102 ) Americas ECS sales, as adjusted $ 1,223,256 $ 1,362,354 (10.2 ) % ARROW ELECTRONICS, INC. NON-GAAP SALES RECONCILIATION (In thousands) (Unaudited) Six Months Ended June 27, 2020 June 29, 2019 % Change Consolidated sales, as reported $ 12,987,911 $ 14,500,539 (10.4 ) % Impact of changes in foreign currencies — (138,687 ) Impact of wind down and dispositions — (172,109 ) Consolidated sales, as adjusted $ 12,987,911 $ 14,189,743 (8.5 ) % Global components sales, as reported $ 9,271,856 $ 10,462,862 (11.4 ) % Impact of changes in foreign currencies — (88,771 ) Impact of wind down — (160,968 ) Global components sales, as adjusted $ 9,271,856 $ 10,213,123 (9.2 ) % Americas Components sales, as reported $ 3,041,699 $ 3,783,828 (19.6 ) % Impact of changes in foreign currencies — (3,760 ) Impact of wind down — (123,726 ) Americas Components sales, as adjusted $ 3,041,699 $ 3,656,342 (16.8 ) % Europe components sales, as reported $ 2,428,407 $ 2,919,254 (16.8 ) % Impact of changes in foreign currencies — (69,049 ) Impact of wind down — (37,242 ) Europe components sales, as adjusted $ 2,428,407 $ 2,812,963 (13.7 ) % Asia components sales, as reported $ 3,801,750 $ 3,759,780 1.1 % Impact of changes in foreign currencies — (15,962 ) Asia components sales, as adjusted $ 3,801,750 $ 3,743,818 1.5 % Global ECS sales, as reported $ 3,716,055 $ 4,037,677 (8.0 ) % Impact of changes in foreign currencies — (49,916 ) Impact of dispositions — (11,141 ) Global ECS sales, as adjusted $ 3,716,055 $ 3,976,620 (6.6 ) % Europe ECS sales, as reported $ 1,364,111 $ 1,464,314 (6.8 ) % Impact of changes in foreign currencies — (33,663 ) Impact of dispositions — (11,141 ) Europe ECS sales, as adjusted $ 1,364,111 $ 1,419,510 (3.9 ) % Americas ECS sales, as reported $ 2,351,944 $ 2,573,363 (8.6 ) % Impact of changes in foreign currencies — (16,253 ) Americas ECS sales, as adjusted $ 2,351,944 $ 2,557,110 (8.0 ) % ARROW ELECTRONICS, INC. NON-GAAP EARNINGS RECONCILIATION (In thousands except per share data) (Unaudited) Three months ended June 27, 2020 Reported Intangible Restructuring AFS Write Digital Impairments(1) Impact of Wind Other(2) Non-GAAP Sales $ 6,606,494 $ — $ — $ — $ — $ — $ — $ — $ 6,606,494 Gross Profit 750,463 — — — — — (10,696 ) — 739,767 Operating income 196,613 9,734 650 197 — 4,918 (11,824 ) — 200,288 Income before income taxes 174,191 9,734 650 197 — 4,918 (11,814 ) (10,901 ) 166,975 Provision for income taxes 40,854 2,501 313 47 — 1,800 (2,662 ) (2,631 ) 40,222 Consolidated net income 133,337 7,233 337 150 — 3,118 (9,152 ) (8,270 ) 126,753 Noncontrolling interests 533 137 — — — — — — 670 Net income attributable to shareholders $ 132,804 $ 7,096 $ 337 $ 150 $ — $ 3,118 $ (9,152 ) $ (8,270 ) 126,083 Net income per diluted share(6) $ 1.68 $ 0.09 $ — $ — $ — $ 0.04 $ (0.12 ) $ (0.10 ) $ 1.59 Effective tax rate 23.5 % 24.1 % Three months ended June 29, 2019 Reported Intangible amortization Restructuring AFS Write Digital Impairments(4) Impact of Wind Other(2) Non-GAAP Sales $ 7,344,548 $ — $ — $ — $ — $ — $ (77,914 ) $ — $ 7,266,634 Gross Profit 814,909 — — 1,868 20,114 — 4,305 — 841,196 Operating income (loss) (549,190 ) 8,665 19,906 15,851 20,114 623,085 104,219 — 242,650 Income (loss) before income taxes (600,120 ) 8,665 19,906 15,851 20,114 623,085 104,229 (1,390 ) 190,340 Provision for income taxes (52,369 ) 2,463 4,865 3,910 4,962 64,246 24,730 (382 ) 52,425 Consolidated net income (loss) (547,751 ) 6,202 15,041 11,941 15,152 558,839 79,499 (1,008 ) 137,915 Noncontrolling interests 1,215 140 — — — — — — 1,355 Net income (loss) attributable to shareholders $ (548,966 ) $ 6,062 $ 15,041 $ 11,941 $ 15,152 $ 558,839 $ 79,499 $ (1,008 ) $ 136,560 Net income (loss) per diluted share(6) $ (6.48 ) $ 0.07 $ 0.18 $ 0.14 $ 0.18 $ 6.60 $ 0.94 $ (0.01 ) $ 1.60 Effective tax rate 8.7 % 27.5 % ARROW ELECTRONICS, INC. NON-GAAP EARNINGS RECONCILIATION (In thousands except per share data) (Unaudited) Six months ended June 27, 2020 Reported GAAP Intangible Restructuring AFS Write Digital Impairments(1) Impact of Non- Other(2) Non-GAAP Sales $ 12,987,911 $ — $ — $ — $ — $ — $ — $ — $ — $ 12,987,911 Gross Profit 1,478,854 — — — — — (10,696 ) — — 1,468,158 Operating income 334,917 19,689 9,788 (723 ) — 4,918 (11,824 ) — — 356,765 Income before income taxes 251,838 19,689 9,788 (723 ) — 4,918 (11,814 ) — 5,909 279,605 Provision for income taxes 68,746 5,065 2,884 (175 ) — 1,800 (2,662 ) (3,615 ) 1,426 73,469 Consolidated net income 183,092 14,624 6,904 (548 ) — 3,118 (9,152 ) 3,615 4,483 206,136 Noncontrolling interests 785 274 — — — — — — — 1,059 Net income attributable to shareholders $ 182,307 $ 14,350 $ 6,904 $ (548 ) $ — $ 3,118 $ (9,152 ) $ 3,615 $ 4,483 $ 205,077 Net income per diluted share(6) $ 2.28 $ 0.18 $ 0.09 $ (0.01 ) $ — $ 0.04 $ (0.11 ) $ 0.05 $ 0.06 $ 2.56 Effective tax rate 27.3 % 26.3 % Six months ended June 29, 2019 Reported GAAP Intangible Restructuring AFS Write Digital Impairments(4) Impact of Non- Other(5) Non-GAAP Sales $ 14,500,539 $ — $ — $ — $ — $ — $ (160,968 ) $ — $ — $ 14,339,571 Gross Profit 1,676,597 — — 1,868 20,114 — (3,822 ) — — 1,694,757 Operating income (loss) (303,630 ) 17,807 30,992 15,851 20,114 623,085 114,415 — 866 519,500 Income (loss) before income taxes (403,799 ) 17,807 30,992 15,851 20,114 623,085 114,572 — (5,872 ) 412,750 Provision for income taxes 1,538 5,003 7,576 3,910 4,962 64,246 27,258 (3,502 ) (1,701 ) 109,290 Consolidated net income (loss) (405,337 ) 12,804 23,416 11,941 15,152 558,839 87,314 3,502 (4,171 ) 303,460 Noncontrolling interests 2,894 282 — — — — — — — 3,176 Net income (loss) attributable to shareholders $ (408,231 ) $ 12,522 $ 23,416 $ 11,941 $ 15,152 $ 558,839 $ 87,314 $ 3,502 $ (4,171 ) $ 300,284 Net income (loss) per diluted share(6) $ (4.80 ) $ 0.15 $ 0.28 $ 0.14 $ 0.18 $ 6.57 $ 1.03 $ 0.04 $ (0.05 ) $ 3.50 Effective tax rate (0.4 ) % 26.5 % (1) Impairments includes $4,918 in impairment charges related to various other long-lived assets unrelated to the personal computer and mobility asset disposition business. (2) Other includes (gain) loss on investments, net (3) Amounts for restructuring, integration, and other charges, and identifiable intangible asset amortization related to the personal computer and mobility asset disposition business are included in "impact of wind down" above. (4) Impairments include goodwill impairments of $570,175, tradename impairments of $46,000, and $6,910 in impairment charges related to various other long-lived assets. (5) Other includes loss on disposition of businesses, net and gain on investments, net. (6) For the three months and six months ended June 29, 2019, the non-GAAP net income per diluted share calculation includes 649 thousand shares and 758 thousand shares, respectively, that were excluded from the GAAP net income per diluted share calculation. Additionally, in all periods presented the sum of the components for diluted EPS, as adjusted may not agree to totals, as presented, due to rounding. ARROW ELECTRONICS, INC. SEGMENT INFORMATION (In thousands) (Unaudited) Quarter Ended Six Months Ended June 27, 2020 June 29, 2019 June 27, 2020 June 29, 2019 Sales: Global components $ 4,721,255 $ 5,270,935 $ 9,271,856 $ 10,462,862 Global ECS 1,885,239 2,073,613 3,716,055 4,037,677 Consolidated $ 6,606,494 $ 7,344,548 $ 12,987,911 $ 14,500,539 Operating income (loss): Global components $ 181,836 $ (566,116 ) $ 346,603 $ (331,584 ) Global ECS (a) 72,921 98,388 115,354 185,106 Corporate (b) (58,144 ) (81,462 ) (127,040 ) (157,152 ) Consolidated $ 196,613 $ (549,190 ) $ 334,917 $ (303,630 ) (a) Includes reserves and other adjustments of approximately $29.9 million primarily related to foreign tax and other loss contingencies for the first six months of 2020. These reserves are principally associated with transactional taxes on activity from several prior years, not significant to any one year. (b) Includes restructuring, integration, and other charges of $0.7 million and $9.8 million for the second quarter and first six months of 2020, and $19.9 million and $31.6 million for the second quarter and first six months of 2019, respectively. NON-GAAP SEGMENT RECONCILIATION Quarter Ended Six Months Ended June 27, 2020 June 29, 2019 June 27, 2020 June 29, 2019 Global components operating income (loss), as reported $ 181,836 $ (566,116) $ 346,603 $ (331,584) Intangible assets amortization expense (c) 7,259 5,807 14,639 12,060 Impairments — 623,085 — 623,085 Impact of wind-down (c) (11,824) 104,213 (11,824) 113,835 AFS notes receivable reserve 197 15,851 (723) 15,851 Digital inventory reserve — 20,114 — 20,114 Global components operating income, as adjusted $ 177,468 $ 202,954 $ 348,695 $ 453,361 Global ECS operating income, as reported $ 72,921 $ 98,388 $ 115,354 $ 185,106 Intangible assets amortization expense 2,475 2,858 5,050 5,747 Impairments 4,918 — 4,918 — Global ECS operating income, as adjusted $ 80,314 $ 101,246 $ 125,322 $ 190,853 (c) Impact of wind down includes intangible asset amortization expense related to the personal computer and mobility asset disposition business. Impact of wind down excludes restructuring, integration, and other charges as they are reported on the corporate entity. View source version on businesswire.com: https://www.businesswire.com/news/home/20200730005322/en/ Steven O'Brien, Media Contact: Source: Arrow Electronics, Inc. Categories: Press Releases View all news Arrow Electronics Reports Second-Quarter 2020 Results
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Vice President, Investor Relations
303-824-4544
John Hourigan,
Vice President, Global Communications
303-824-4586
Source: https://investor.arrow.com/news/press-release-details/2020/Arrow-Electronics-Reports-Second-Quarter-2020-Results/default.aspx
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