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Arrow Electronics Reports Fourth-Quarter and Full-Year 2023 Results

02/08/2024

-- Fourth-Quarter Sales In Line with Guidance --
-- Fourth-Quarter Earnings Per Share of $3.54 and Non-GAAP Earnings Per Share of $3.98, Both Above High End of Guidance --

Arrow Electronics, Inc. (NYSE:ARW) today announced financial results for its fourth quarter and fiscal year ended Dec. 31, 2023.

“The company delivered fourth-quarter sales in line with our expectations, with earnings per share above the high end of our guidance range in challenging electronic components and IT spending markets,” said Sean Kerins, Arrow’s president and chief executive officer.

“Despite excess inventory throughout the supply chain leading to softer demand in our components business, and a mixed IT spending environment for our enterprise computing solutions business, full-year 2023 results were solid. Arrow generated healthy cashflow from operations that enabled the company to repurchase approximately $750 million of shares throughout the year,” said Mr. Kerins. “Looking ahead, and given the current market dynamics, we’ll manage our cost structure and working capital prudently while continuing to remain committed to growth initiatives where our differentiation provides value to our suppliers and customers.”

 

 

 

 

 

 

 

 

 

 

 

 

 

Arrow Consolidated

 

 

Quarter Ended

 

Year Ended

 

 

 

December 31,

 

 

December 31,

 

 

December 31,

 

 

December 31,

(in millions except per share data)

 

 

2023

 

 

2022

 

 

2023

 

 

2022

Consolidated sales

 

$

7,849

 

$

9,323

 

$

33,107

 

$

37,124

Net income attributable to shareholders

 

 

195

 

 

349

 

 

904

 

 

1,427

Net income per diluted share

 

 

3.54

 

 

5.66

 

 

15.84

 

 

21.80

Non-GAAP net income attributable to shareholders(1)

 

 

219

 

 

351

 

 

977

 

 

1,465

Non-GAAP net income per diluted share

 

 

3.98

 

 

5.69

 

 

17.12

 

 

22.38

In the fourth quarter of 2023, sales decreased 16 percent year over year. Changes in foreign currencies had positive impacts on growth of approximately $126 million on sales and $0.08 on earnings per share on a diluted basis compared to the fourth quarter of 2022.

Full-year 2023 sales decreased 11 percent year over year. Changes in foreign currencies had immaterial impacts on sales and earnings per share on a diluted basis compared to 2022.

Global Components

“During the quarter, we experienced continued weakness in our industrial end markets for components. We saw relative strength in aerospace and defense, and medical device verticals in the west along with sequential growth in data center and transportation markets in Asia,” said Mr. Kerins.

 

 

 

 

 

 

 

 

 

 

 

 

 

Global Components

 

 

Quarter Ended

 

Year Ended

 

 

 

December 31,

 

 

December 31,

 

 

December 31,

 

 

December 31,

(in millions)

 

 

2023

 

 

2022

 

 

2023

 

 

2022

Global components sales

 

$

5,636

 

$

6,827

 

$

25,420

 

$

28,788

Global components operating income, as reported

 

 

281

 

 

443

 

 

1,459

 

 

1,961

Global components non-GAAP operating income

 

 

288

 

 

449

 

 

1,486

 

 

1,988

In the fourth quarter of 2023, global component sales decreased 17 percent year over year. Americas components fourth-quarter sales decreased 23 percent year over year. Europe components fourth-quarter sales decreased 14 percent year over year and decreased 17 percent year over year on a constant currency basis. Asia-Pacific components fourth-quarter sales decreased 15 percent year over year.

Global Enterprise Computing Solutions

“In our enterprise computing solutions business, momentum continued to build in infrastructure software, as-a-service solutions and related services,” said Mr. Kerins. “In EMEA, we achieved year-on-year billings growth in the fourth quarter while our North America results reflected a more muted IT spending environment.”

 

 

 

 

 

 

 

 

 

 

 

 

 

Global Enterprise Computing Solutions

 

 

Quarter Ended

 

Year Ended

 

 

 

December 31,

 

 

December 31,

 

 

December 31,

 

 

December 31,

(in millions)

 

 

2023

 

 

2022

 

 

2023

 

 

2022

Global ECS sales

 

$

2,213

 

$

2,496

 

$

7,687

 

$

8,336

Global ECS operating income, as reported

 

 

145

 

 

155

 

 

367

 

 

409

Global ECS non-GAAP operating income

 

 

146

 

 

156

 

 

372

 

 

416

In the fourth quarter of 2023, global enterprise computing solutions (“ECS”) sales decreased 11 percent year over year and decreased 13 percent year over year on a constant currency basis. Europe ECS fourth-quarter sales decreased 2 percent year over year and decreased 7 percent year over year on a constant currency basis. Americas ECS fourth-quarter sales decreased 18 percent year over year.

Other Financial Metrics

“For the full-year 2023, we generated $705 million in cash flow from operations,” said Raj Agrawal, Arrow’s senior vice president and chief financial officer. “Focusing on execution in the fourth quarter enabled us to reduce inventory by more than $600 million sequentially. We generated $287 million in cash flow from operations and repurchased approximately $50 million of shares in the fourth quarter. We now have remaining purchase authorization of approximately $580 million.”

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

First-Quarter 2024 Outlook

  • Consolidated sales of $6.70 billion to $7.30 billion, with global components sales of $5.00 billion to $5.40 billion, and global enterprise computing solutions sales of $1.70 billion to $1.90 billion
  • Net income per share on a diluted basis of $1.95 to $2.15, and non-GAAP net income per share on a diluted basis of $2.20 to $2.40
  • Average tax rate in the range of 23 to 25 percent
  • Interest expense of approximately $80 million
  • Changes in foreign currencies to increase sales by approximately $13 million, and earnings per share on a diluted basis by $0.01 compared to the first quarter of 2023
  • Changes in foreign currencies to increase quarter-over-quarter growth in sales by $31 million and earnings per share on a diluted basis by $0.02 compared to the fourth quarter of 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

First-Quarter 2024 GAAP to non-GAAP Outlook Reconciliation

 

 

NON-GAAP SALES RECONCILIATION

 

 

Quarter Ended

 

 

 

Quarter Ended

 

 

(in billions)

 

March 30, 2024

 

April 1, 2023

 

% Change

 

March 30, 2024

 

December 31, 2023

 

% Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Global components sales, GAAP

 

$

5.00 - 5.40

 

$

6.86

 

 

(27%) - (21%)

 

$

5.00 - 5.40

 

$

5.64

 

(11%) - (4%)

Impact of changes in foreign currencies

 

 

 

 

(0.01

)

 

 

 

 

 

 

0.02

 

 

Global components sales, constant currency

 

$

5.00 - 5.40

 

$

6.85

 

 

(27%) - (21%)

 

$

5.00 - 5.40

 

$

5.66

 

(12%) - (5%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Global ECS sales, GAAP

 

$

1.70 - 1.90

 

$

1.88

 

 

(10%) - 1%

 

$

1.70 - 1.90

 

$

2.21

 

(23%) - (14%)

Impact of changes in foreign currencies

 

 

 

 

0.02

 

 

 

 

 

 

 

0.01

 

 

Global ECS sales, constant currency

 

$

1.70 - 1.90

 

$

1.90

 

 

(11%) - 0%

 

$

1.70 - 1.90

 

$

2.22

 

(23%) - (14%)

 

 

NON-GAAP EARNINGS RECONCILIATION

 

 

Reported GAAP measure

 

Intangible amortization
expense

 

Restructuring &
integration charges

 

Non-GAAP measure

Net income per diluted share

 

$1.95 to $2.15

 

$0.10

 

$0.15

 

$2.20 to $2.40

 

Earnings Presentation

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

Webcast and Conference Call Information

Arrow Electronics will host a conference call to discuss fourth-quarter and full-year 2023 financial results on Feb 8, 2024, at 1:00 PM ET.

A live webcast of the conference call will be available via the events section of investor.arrow.com or by accessing the webcast link directly at https://events.q4inc.com/attendee/921341362. Shortly after the conclusion of the conference call, a webcast replay will be available on the Arrow website for one year.

Interested parties may pre-register online at https://registrations.events/direct/Q4I97132 to obtain a user-specific access code and dial-in information to access the live conference call.

About Arrow Electronics

Arrow Electronics guides innovation forward for thousands of leading technology manufacturers and service providers. With 2023 sales of $33 billion, Arrow develops technology solutions that help improve business and daily life. Learn more at arrow.com.

Information Relating to Forward-Looking Statements

This press release includes “forward-looking” statements, as the term is defined under the federal securities laws, including but not limited to statements regarding: Arrow’s future financial performance, including its outlook on financial results for the first quarter of fiscal 2024 such as sales, net income per diluted share, non-GAAP net income per diluted share, average tax rate, average diluted shares outstanding, interest and other expense, impact to sales due to changes in foreign currencies, intangible amortization expense per diluted share, restructuring & integration charges per diluted share, and expectations regarding market demand and shareholder returns. These and other forward-looking statements are subject to numerous assumptions, risks, and uncertainties, which could cause actual results or facts to differ materially from such statements for a variety of reasons, including, but not limited to: unfavorable economic conditions; disruptions or inefficiencies in the supply chain; political instability; impacts of military conflict and sanctions; industry conditions; changes in product supply, pricing and customer demand; competition; other vagaries in the global components and the global ECS markets; deteriorating economic conditions, including economic recession, inflation, tax rates, foreign currency exchange rates, or the availability of capital; the effects of natural or man-made catastrophic events; changes in relationships with key suppliers; increased profit margin pressure; changes in legal and regulatory matters; non-compliance with certain regulations, such as export, antitrust, and anti-corruption laws; foreign tax and other loss contingencies; breaches of security or privacy of business information; outbreaks, epidemics, pandemics, or public health crises; and the company's ability to generate positive cash flow. For a further discussion of these and other factors that could cause the company's future results to differ materially from any forward-looking statements, see the section entitled “Risk Factors” in the company's most recent Annual Report on Form 10-K, as well as in other filings the company makes with the Securities and Exchange Commission. Shareholders and other readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. The company undertakes no obligation to update publicly or revise any of the forward-looking statements.

Certain Non-GAAP Financial Information

In addition to disclosing financial results that are determined in accordance with accounting principles generally accepted in the United States (“GAAP”), the company also provides certain non-GAAP financial information. The company provides the following non-GAAP metrics: non-GAAP sales, operating income (included by business segment), income before income taxes, provision for income taxes, consolidated net income, noncontrolling interests, net income attributable to shareholders, effective tax rate and net income per share on a diluted basis. The foregoing non-GAAP measures are adjusted by certain of the following, as applicable: impact of changes in foreign currencies (referred to as “changes in foreign currencies” or “on a constant currency basis”) by re-translating prior-period results at current period foreign exchange rates; identifiable intangible asset amortization, restructuring, integration, and other charges; net gains and losses on investments; and impact of tax legislation changes. Management believes that providing this additional information is useful to the reader to better assess and understand the company’s operating performance and future prospects in the same manner as management, especially when comparing results with previous periods. Management typically monitors the business as adjusted for these items, in addition to GAAP results, to understand and compare operating results across accounting periods, for internal budgeting purposes, for short- and long-term operating plans, and to evaluate the company's financial performance. However, analysis of results on a non-GAAP basis should be used as a complement to, in conjunction with, and not as a substitute for, data presented in accordance with GAAP.

ARROW ELECTRONICS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended

 

Year Ended

 

 

 

December 31, 2023
(Unaudited)

 

 

December 31, 2022
(Unaudited)

 

 

December 31, 2023

 

 

December 31, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

$

7,849,157

 

 

$

9,323,023

 

 

$

33,107,120

 

 

$

37,124,422

 

Cost of sales

 

 

6,859,607

 

 

 

8,117,028

 

 

 

28,958,102

 

 

 

32,287,797

 

Gross profit

 

 

989,550

 

 

 

1,205,995

 

 

 

4,149,018

 

 

 

4,836,625

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general, and administrative expenses

 

 

590,039

 

 

 

635,090

 

 

 

2,412,822

 

 

 

2,567,008

 

Depreciation and amortization

 

 

43,168

 

 

 

45,595

 

 

 

181,116

 

 

 

187,382

 

Restructuring, integration, and other charges

 

 

39,664

 

 

 

2,714

 

 

 

83,916

 

 

 

13,741

 

 

 

 

672,871

 

 

 

683,399

 

 

 

2,677,854

 

 

 

2,768,131

 

Operating income

 

 

316,679

 

 

 

522,596

 

 

 

1,471,164

 

 

 

2,068,494

 

Equity in earnings of affiliated companies

 

 

2,034

 

 

 

2,938

 

 

 

6,407

 

 

 

7,664

 

Gain (loss) on investments, net

 

 

14,635

 

 

 

8,356

 

 

 

19,284

 

 

 

(2,857

)

Employee benefit plan expense, net

 

 

(1,267

)

 

 

(889

)

 

 

(3,777

)

 

 

(3,503

)

Interest and other financing expense, net

 

 

(82,052

)

 

 

(62,221

)

 

 

(328,724

)

 

 

(185,648

)

Income before income taxes

 

 

250,029

 

 

 

470,780

 

 

 

1,164,354

 

 

 

1,884,150

 

Provision for income taxes

 

 

53,823

 

 

 

116,719

 

 

 

254,991

 

 

 

448,992

 

Consolidated net income

 

 

196,206

 

 

 

354,061

 

 

 

909,363

 

 

 

1,435,158

 

Noncontrolling interests

 

 

1,669

 

 

 

4,659

 

 

 

5,858

 

 

 

8,274

 

Net income attributable to shareholders

 

$

194,537

 

 

$

349,402

 

 

$

903,505

 

 

$

1,426,884

 

Net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

3.58

 

 

$

5.71

 

 

$

16.03

 

 

$

22.01

 

Diluted

 

$

3.54

 

 

$

5.66

 

 

$

15.84

 

 

$

21.80

 

Weighted-average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

54,396

 

 

 

61,175

 

 

 

56,359

 

 

 

64,838

 

Diluted

 

 

55,015

 

 

 

61,739

 

 

 

57,035

 

 

 

65,453

 

ARROW ELECTRONICS, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands except par value)

 

 

 

 

 

 

 

 

 

December 31, 2023

 

December 31, 2022

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

218,053

 

 

$

176,915

 

Accounts receivable, net

 

 

12,238,073

 

 

 

12,322,717

 

Inventories

 

 

5,187,225

 

 

 

5,319,369

 

Other current assets

 

 

684,126

 

 

 

521,339

 

Total current assets

 

 

18,327,477

 

 

 

18,340,340

 

Property, plant, and equipment, at cost:

 

 

 

 

 

 

Land

 

 

5,691

 

 

 

5,691

 

Buildings and improvements

 

 

195,579

 

 

 

184,211

 

Machinery and equipment

 

 

1,632,606

 

 

 

1,583,661

 

 

 

 

1,833,876

 

 

 

1,773,563

 

Less: Accumulated depreciation and amortization

 

 

(1,303,136

)

 

 

(1,177,107

)

Property, plant, and equipment, net

 

 

530,740

 

 

 

596,456

 

Investments in affiliated companies

 

 

62,741

 

 

 

65,112

 

Intangible assets, net

 

 

127,440

 

 

 

159,137

 

Goodwill

 

 

2,050,426

 

 

 

2,027,626

 

Other assets

 

 

627,344

 

 

 

574,511

 

Total assets

 

$

21,726,168

 

 

$

21,763,182

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

10,070,015

 

 

$

10,460,419

 

Accrued expenses

 

 

1,463,915

 

 

 

1,339,302

 

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

 

 

1,653,954

 

 

 

589,883

 

Total current liabilities

 

 

13,187,884

 

 

 

12,389,604

 

Long-term debt

 

 

2,153,553

 

 

 

3,182,964

 

Other liabilities

 

 

507,424

 

 

 

579,261

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

Shareholders’ equity:

 

 

 

 

 

 

Common stock, par value $1:

 

 

 

 

 

 

Authorized - 160,000 shares in both 2023 and 2022

 

 

 

 

 

 

Issued - 57,691 and 125,424 shares in 2023 and 2022, respectively

 

 

57,691

 

 

 

125,424

 

Capital in excess of par value

 

 

553,340

 

 

 

1,208,708

 

Treasury stock (3,880 and 66,175 shares in 2023 and 2022, respectively), at cost

 

 

(297,745

)

 

 

(4,637,345

)

Retained earnings

 

 

5,790,217

 

 

 

9,214,832

 

Accumulated other comprehensive loss

 

 

(298,039

)

 

 

(365,262

)

Total shareholders’ equity

 

 

5,805,464

 

 

 

5,546,357

 

Noncontrolling interests

 

 

71,843

 

 

 

64,996

 

Total equity

 

 

5,877,307

 

 

 

5,611,353

 

Total liabilities and equity

 

$

21,726,168

 

 

$

21,763,182

 

ARROW ELECTRONICS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

Quarter Ended

 

 

December 31, 2023

 

December 31, 2022

Cash flows from operating activities:

 

 

 

 

 

 

Consolidated net income

 

$

196,206

 

 

$

354,061

 

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

 

 

 

 

 

 

Depreciation and amortization

 

 

43,168

 

 

 

45,595

 

Amortization of stock-based compensation

 

 

6,701

 

 

 

7,921

 

Equity in earnings of affiliated companies

 

 

(2,034

)

 

 

(2,938

)

Deferred income taxes

 

 

(40,942

)

 

 

(14,518

)

Gain on investments, net

 

 

(7,817

)

 

 

(8,356

)

Other

 

 

18,512

 

 

 

939

 

Change in assets and liabilities:

 

 

 

 

 

 

Accounts receivable, net

 

 

(1,396,096

)

 

 

(801,426

)

Inventories

 

 

664,333

 

 

 

(154,022

)

Accounts payable

 

 

898,395

 

 

 

779,217

 

Accrued expenses

 

 

126,949

 

 

 

(90,566

)

Other assets and liabilities

 

 

(220,633

)

 

 

(7,220

)

Net cash provided by operating activities

 

 

286,742

 

 

 

108,687

 

Cash flows from investing activities:

 

 

 

 

 

 

Acquisition of property, plant, and equipment

 

 

(25,510

)

 

 

(24,056

)

Proceeds from collections of notes receivable

 

 

 

 

 

320

 

Net cash used for investing activities

 

 

(25,510

)

 

 

(23,736

)

Cash flows from financing activities:

 

 

 

 

 

 

Change in short-term and other borrowings

 

 

63,980

 

 

 

(17,700

)

Repayments of long-term bank borrowings, net

 

 

(465,147

)

 

 

(5,018

)

Proceeds from exercise of stock options

 

 

186

 

 

 

906

 

Repurchases of common stock

 

 

(50,492

)

 

 

(324,233

)

Net cash used for financing activities

 

 

(451,473

)

 

 

(346,045

)

Effect of exchange rate changes on cash

 

 

75,000

 

 

 

104,024

 

Net decrease in cash and cash equivalents

 

 

(115,241

)

 

 

(157,070

)

Cash and cash equivalents at beginning of period

 

 

333,294

 

 

 

333,985

 

Cash and cash equivalents at end of period

 

$

218,053

 

 

$

176,915

 

ARROW ELECTRONICS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

 

 

 

 

 

 

 

 

 

Year Ended

 

 

December 31, 2023

 

December 31, 2022

Cash flows from operating activities:

 

 

 

 

 

 

Consolidated net income

 

$

909,363

 

 

$

1,435,158

 

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

 

 

 

 

 

 

Depreciation and amortization

 

 

181,116

 

 

 

187,382

 

Amortization of stock-based compensation

 

 

41,569

 

 

 

42,930

 

Equity in earnings of affiliated companies

 

 

(6,407

)

 

 

(7,664

)

Deferred income taxes

 

 

(93,980

)

 

 

(13,050

)

(Gain) loss on investments, net

 

 

(12,466

)

 

 

2,857

 

Other

 

 

22,590

 

 

 

3,612

 

Change in assets and liabilities:

 

 

 

 

 

 

Accounts receivable, net

 

 

189,425

 

 

 

(1,430,400

)

Inventories

 

 

139,313

 

 

 

(1,165,785

)

Accounts payable

 

 

(457,382

)

 

 

945,819

 

Accrued expenses

 

 

38,601

 

 

 

102,193

 

Other assets and liabilities

 

 

(246,293

)

 

 

(136,129

)

Net cash provided by (used for) operating activities

 

 

705,449

 

 

 

(33,077

)

Cash flows from investing activities:

 

 

 

 

 

 

Acquisition of property, plant, and equipment

 

 

(83,285

)

 

 

(78,836

)

Proceeds from collections of notes receivable

 

 

237

 

 

 

21,125

 

Proceeds from settlement of net investment hedge

 

 

10,725

 

 

 

 

Net cash used for investing activities

 

 

(72,323

)

 

 

(57,711

)

Cash flows from financing activities:

 

 

 

 

 

 

Change in short-term and other borrowings

 

 

866,012

 

 

 

258,816

 

(Repayments of) proceeds from long-term bank borrowings, net

 

 

(1,031,881

)

 

 

1,233,250

 

Redemption of notes

 

 

(300,000

)

 

 

(350,000

)

Net proceeds from note offering

 

 

496,268

 

 

 

 

Proceeds from exercise of stock options

 

 

17,010

 

 

 

17,340

 

Repurchases of common stock

 

 

(770,200

)

 

 

(1,049,487

)

Settlement of forward-starting interest rate swap

 

 

56,711

 

 

 

 

Other

 

 

(142

)

 

 

(137

)

Net cash (used for) provided by financing activities

 

 

(666,222

)

 

 

109,782

 

Effect of exchange rate changes on cash

 

 

74,234

 

 

 

(64,273

)

Net increase (decrease) in cash and cash equivalents

 

 

41,138

 

 

 

(45,279

)

Cash and cash equivalents at beginning of period

 

 

176,915

 

 

 

222,194

 

Cash and cash equivalents at end of period

 

$

218,053

 

 

$

176,915

 

ARROW ELECTRONICS, INC.

NON-GAAP SALES RECONCILIATION

(In thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended

 

 

 

 

December 31, 2023

 

December 31, 2022

 

% Change

 

 

 

 

 

 

 

 

 

Consolidated sales, as reported

 

$

7,849,157

 

$

9,323,023

 

 

(15.8

)%

Impact of changes in foreign currencies

 

 

 

 

126,441

 

 

 

Consolidated sales, constant currency

 

$

7,849,157

 

$

9,449,464

 

 

(16.9

)%

 

 

 

 

 

 

 

 

 

Global components sales, as reported

 

$

5,636,032

 

$

6,827,029

 

 

(17.4

)%

Impact of changes in foreign currencies

 

 

 

 

75,974

 

 

 

Global components sales, constant currency

 

$

5,636,032

 

$

6,903,003

 

 

(18.4

)%

 

 

 

 

 

 

 

 

 

Americas components sales, as reported

 

$

1,784,764

 

$

2,326,995

 

 

(23.3

)%

Impact of changes in foreign currencies

 

 

 

 

99

 

 

 

Americas components sales, constant currency

 

$

1,784,764

 

$

2,327,094

 

 

(23.3

)%

 

 

 

 

 

 

 

 

 

Asia components sales, as reported

 

$

2,163,421

 

$

2,543,294

 

 

(14.9

)%

Impact of changes in foreign currencies

 

 

 

 

(7,158

)

 

 

Asia components sales, constant currency

 

$

2,163,421

 

$

2,536,136

 

 

(14.7

)%

 

 

 

 

 

 

 

 

 

Europe components sales, as reported

 

$

1,687,847

 

$

1,956,740

 

 

(13.7

)%

Impact of changes in foreign currencies

 

 

 

 

83,033

 

 

 

Europe components sales, constant currency

 

$

1,687,847

 

$

2,039,773

 

 

(17.3

)%

 

 

 

 

 

 

 

 

 

Global ECS sales, as reported

 

$

2,213,125

 

$

2,495,994

 

 

(11.3

)%

Impact of changes in foreign currencies

 

 

 

 

50,467

 

 

 

Global ECS sales, constant currency

 

$

2,213,125

 

$

2,546,461

 

 

(13.1

)%

 

 

 

 

 

 

 

 

 

Americas ECS sales, as reported

 

$

1,145,754

 

$

1,404,224

 

 

(18.4

)%

Impact of changes in foreign currencies

 

 

 

 

200

 

 

 

Americas ECS sales, constant currency

 

$

1,145,754

 

$

1,404,424

 

 

(18.4

)%

 

 

 

 

 

 

 

 

 

Europe ECS sales, as reported

 

$

1,067,371

 

$

1,091,770

 

 

(2.2

)%

Impact of changes in foreign currencies

 

 

 

 

50,267

 

 

 

Europe ECS sales, constant currency

 

$

1,067,371

 

$

1,142,037

 

 

(6.5

)%

ARROW ELECTRONICS, INC.

NON-GAAP SALES RECONCILIATION

(In thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

Year Ended

 

 

 

 

December 31, 2023

 

December 31, 2022

 

% Change

 

 

 

 

 

 

 

 

 

Consolidated sales, as reported

 

$

33,107,120

 

$

37,124,422

 

 

(10.8

)%

Impact of changes in foreign currencies

 

 

 

 

51,829

 

 

 

Consolidated sales, constant currency

 

$

33,107,120

 

$

37,176,251

 

 

(10.9

)%

 

 

 

 

 

 

 

 

 

Global components sales, as reported

 

$

25,419,899

 

$

28,788,003

 

 

(11.7

)%

Impact of changes in foreign currencies

 

 

 

 

7,690

 

 

 

Global components sales, constant currency

 

$

25,419,899

 

$

28,795,693

 

 

(11.7

)%

 

 

 

 

 

 

 

 

 

Americas components sales, as reported

 

$

7,954,713

 

$

9,592,547

 

 

(17.1

)%

Impact of changes in foreign currencies

 

 

 

 

(2,166

)

 

 

Americas components sales, constant currency

 

$

7,954,713

 

$

9,590,381

 

 

(17.1

)%

 

 

 

 

 

 

 

 

 

Asia components sales, as reported

 

$

9,390,292

 

$

11,567,482

 

 

(18.8

)%

Impact of changes in foreign currencies

 

 

 

 

(122,448

)

 

 

Asia components sales, constant currency

 

$

9,390,292

 

$

11,445,034

 

 

(18.0

)%

 

 

 

 

 

 

 

 

 

Europe components sales, as reported

 

$

8,074,894

 

$

7,627,974

 

 

5.9

%

Impact of changes in foreign currencies

 

 

 

 

132,304

 

 

 

Europe components sales, constant currency

 

$

8,074,894

 

$

7,760,278

 

 

4.1

%

 

 

 

 

 

 

 

 

 

Global ECS sales, as reported

 

$

7,687,221

 

$

8,336,419

 

 

(7.8

)%

Impact of changes in foreign currencies

 

 

 

 

44,139

 

 

 

Global ECS sales, constant currency

 

$

7,687,221

 

$

8,380,558

 

 

(8.3

)%

 

 

 

 

 

 

 

 

 

Americas ECS sales, as reported

 

$

4,160,298

 

$

4,847,027

 

 

(14.2

)%

Impact of changes in foreign currencies

 

 

 

 

(18,850

)

 

 

Americas ECS sales, constant currency

 

$

4,160,298

 

$

4,828,177

 

 

(13.8

)%

 

 

 

 

 

 

 

 

 

Europe ECS sales, as reported

 

$

3,526,923

 

$

3,489,392

 

 

1.1

%

Impact of changes in foreign currencies

 

 

 

 

62,989

 

 

 

Europe ECS sales, constant currency

 

$

3,526,923

 

$

3,552,381

 

 

(0.7

)%

ARROW ELECTRONICS, INC.

NON-GAAP EARNINGS RECONCILIATION

(In thousands except per share data)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended December 31, 2023

 

 

 

Reported

 

Intangible

 

Restructuring

 

 

 

 

 

 

 

 

 

GAAP

 

amortization

 

& Integration

 

 

 

 

Non-GAAP

 

 

 

measure

 

expense

 

charges

 

Other(1)

 

measure

 

Operating income

 

$

316,679

 

$

7,491

 

$

39,664

 

$

 

 

$

363,834

 

Income before income taxes

 

 

250,029

 

 

7,491

 

 

39,664

 

 

(14,635

)

 

 

282,549

 

Provision for income taxes

 

 

53,823

 

 

1,863

 

 

9,331

 

 

(3,500

)

 

 

61,517

 

Consolidated net income

 

 

196,206

 

 

5,628

 

 

30,333

 

 

(11,135

)

 

 

221,032

 

Noncontrolling interests

 

 

1,669

 

 

131

 

 

 

 

 

 

 

1,800

 

Net income attributable to shareholders

 

$

194,537

 

$

5,497

 

$

30,333

 

$

(11,135

)

 

$

219,232

 

Net income per diluted share (2)

 

$

3.54

 

$

0.10

 

$

0.55

 

$

(0.20

)

 

$

3.98

 

Effective tax rate (3)

 

 

21.5

%

 

 

 

 

 

 

 

 

 

 

21.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended December 31, 2022

 

 

 

Reported

 

Intangible

 

Restructuring

 

 

 

 

 

 

 

 

 

GAAP

 

amortization

 

& Integration

 

 

 

 

Non-GAAP

 

 

 

measure

 

expense

 

charges

 

Other(1)

 

measure

 

Operating income

 

$

522,596

 

$

8,170

 

$

2,714

 

$

 

 

$

533,480

 

Income before income taxes

 

 

470,780

 

 

8,170

 

 

2,714

 

 

(8,356

)

 

 

473,308

 

Provision for income taxes

 

 

116,719

 

 

2,056

 

 

472

 

 

(2,003

)

 

 

117,244

 

Consolidated net income

 

 

354,061

 

 

6,114

 

 

2,242

 

 

(6,353

)

 

 

356,064

 

Noncontrolling interests

 

 

4,659

 

 

127

 

 

 

 

 

 

 

4,786

 

Net income attributable to shareholders

 

$

349,402

 

$

5,987

 

$

2,242

 

$

(6,353

)

 

$

351,278

 

Net income per diluted share (2)

 

$

5.66

 

$

0.10

 

$

0.04

 

$

(0.10

)

 

$

5.69

 

Effective tax rate (3)

 

 

24.8

%

 

 

 

 

 

 

 

 

 

 

24.8

%

ARROW ELECTRONICS, INC.

NON-GAAP EARNINGS RECONCILIATION

(In thousands except per share data)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year ended December 31, 2023

 

 

 

Reported
GAAP
measure

 

Intangible
amortization
expense

 

Restructuring
& Integration
charges

 

Non- recurring
tax items

 

Other(1)

 

Non-GAAP
measure

 

Operating income

 

$

1,471,164

 

$

31,242

 

$

83,916

 

$

 

 

$

 

 

$

1,586,322

 

Income before income taxes

 

 

1,164,354

 

 

31,242

 

 

83,916

 

 

 

 

 

(19,284

)

 

 

1,260,228

 

Provision for income taxes

 

 

254,991

 

 

7,824

 

 

19,969

 

 

(942

)

 

 

(4,614

)

 

 

277,228

 

Consolidated net income

 

 

909,363

 

 

23,418

 

 

63,947

 

 

942

 

 

 

(14,670

)

 

 

983,000

 

Noncontrolling interests

 

 

5,858

 

 

539

 

 

 

 

 

 

 

 

 

 

6,397

 

Net income attributable to shareholders

 

$

903,505

 

$

22,879

 

$

63,947

 

$

942

 

 

$

(14,670

)

 

$

976,603

 

Net income per diluted share (2)

 

$

15.84

 

$

0.40

 

$

1.12

 

$

0.02

 

 

$

(0.26

)

 

$

17.12

 

Effective tax rate (3)

 

 

21.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

22.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year ended December 31, 2022

 

 

 

Reported
GAAP
measure

 

Intangible
amortization
expense

 

Restructuring
& Integration
charges

 

Non- recurring
tax items

 

Other(1)

 

Non-GAAP
measure

 

Operating income

 

$

2,068,494

 

$

34,692

 

$

13,741

 

$

 

$

 

$

2,116,927

 

Income before income taxes

 

 

1,884,150

 

 

34,692

 

 

13,741

 

 

 

 

2,857

 

 

1,935,440

 

Provision for income taxes

 

 

448,992

 

 

8,848

 

 

2,931

 

 

 

 

708

 

 

461,479

 

Consolidated net income

 

 

1,435,158

 

 

25,844

 

 

10,810

 

 

 

 

2,149

 

 

1,473,961

 

Noncontrolling interests

 

 

8,274

 

 

525

 

 

 

 

 

 

 

 

8,799

 

Net income attributable to shareholders

 

$

1,426,884

 

$

25,319

 

$

10,810

 

$

 

$

2,149

 

$

1,465,162

 

Net income per diluted share (2)

 

$

21.80

 

$

0.39

 

$

0.17

 

$

 

$

0.03

 

$

22.38

 

Effective tax rate (3)

 

 

23.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

23.8

%

___________________

(1)

Other includes (gain) loss on investments, net.

(2)

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

(3)

The items as shown in this table, represent the reconciling items for the tax rate as reported by GAAP measure and as a non-GAAP measure.

ARROW ELECTRONICS, INC.

SEGMENT INFORMATION

(In thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended

 

Year Ended

 

 

December 31, 2023

 

December 31, 2022

 

December 31, 2023

 

December 31, 2022

Sales:

 

 

 

 

 

 

 

 

 

 

 

 

Global components

 

$

5,636,032

 

 

$

6,827,029

 

 

$

25,419,899

 

 

$

28,788,003

 

Global ECS

 

 

2,213,125

 

 

 

2,495,994

 

 

 

7,687,221

 

 

 

8,336,419

 

Consolidated

 

$

7,849,157

 

 

$

9,323,023

 

 

$

33,107,120

 

 

$

37,124,422

 

Operating income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

Global components (a)

 

$

281,260

 

 

$

442,702

 

 

$

1,459,166

 

 

$

1,961,125

 

Global ECS (b)

 

 

145,053

 

 

 

154,775

 

 

 

367,004

 

 

 

408,519

 

Corporate (c)

 

 

(109,634

)

 

 

(74,881

)

 

 

(355,006

)

 

 

(301,150

)

Consolidated

 

$

316,679

 

 

$

522,596

 

 

$

1,471,164

 

 

$

2,068,494

 

(a)

Global components operating income includes $62.2 million in settlement charges recorded as a reduction to operating expense for the year ended December 31, 2023.

(b)

Global ECS operating income includes charges to the allowance for credit losses, which decreased by $2.8 million and increased by $24.0 million for the fourth quarter and the year ended December 31, 2023, respectively, relative to the year-earlier periods.

(c)

Corporate operating loss includes restructuring, integration, and other charges of $39.6 million and $83.9 million for the fourth quarter and the year ended December 31, 2023, respectively, and $2.7 million and $13.7 million for the fourth quarter and year ended December 31, 2022, respectively.

NON-GAAP SEGMENT RECONCILIATION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended

 

Year Ended

 

 

December 31, 2023

 

December 31, 2022

 

December 31, 2023

 

December 31, 2022

Global components operating income, as reported

 

$

281,260

 

$

442,702

 

$

1,459,166

 

$

1,961,125

Intangible assets amortization expense

 

 

6,436

 

 

6,702

 

 

26,500

 

 

27,005

Global components non-GAAP operating income

 

$

287,696

 

$

449,404

 

$

1,485,666

 

$

1,988,130

 

 

 

 

 

 

 

 

 

 

 

 

 

Global ECS operating income, as reported

 

$

145,053

 

$

154,775

 

$

367,004

 

$

408,519

Intangible assets amortization expense

 

 

1,055

 

 

1,468

 

 

4,742

 

 

7,687

Global ECS non-GAAP operating income

 

$

146,108

 

$

156,243

 

$

371,746

 

$

416,206

 

Investors:
Anthony Bencivenga, 303-566-7456
Vice President, Investor Relations
anthony.bencivenga@arrow.com

Media:
John Hourigan, 303-824-4586
Vice President, Public Affairs and Corporate Marketing
jhourigan@arrow.com

Source: Arrow Electronics

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