-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CIQ2+BP8LeC67gRt5owKapgPy/1KsCozs44lffsvyT0iorSRvv/hFMuVDk3aeKP+ iGSCt4WL5mMDtXrE1g5OnQ== /in/edgar/work/20000811/0000007536-00-000009/0000007536-00-000009.txt : 20000921 0000007536-00-000009.hdr.sgml : 20000921 ACCESSION NUMBER: 0000007536-00-000009 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20000630 FILED AS OF DATE: 20000811 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ARROW ELECTRONICS INC CENTRAL INDEX KEY: 0000007536 STANDARD INDUSTRIAL CLASSIFICATION: [5065 ] IRS NUMBER: 111806155 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-04482 FILM NUMBER: 694417 BUSINESS ADDRESS: STREET 1: 25 HUB DR CITY: MELVILLE STATE: NY ZIP: 11747 BUSINESS PHONE: 5163911300 10-Q 1 0001.txt FORM 10-Q FOR JUNE 2000 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2000 ------------- OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to ---------- ---------- Commission file number 1-4482 ------ ARROW ELECTRONICS, INC. ------------------------------------------------------ (Exact name of Registrant as specified in its charter) New York 11-1806155 - -------------------------------- ----------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 25 Hub Drive, Melville, New York 11747 - -------------------------------- ----------------------- (Address of principal executive (Zip Code) offices) Registrant's telephone number, including area code (516) 391-1300 ----------------------- Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ------- ------ Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Common stock, $1 par value: 97,882,032 shares outstanding at July 31, 2000. PART I. FINANCIAL INFORMATION Item 1. Financial Statements. --------------------- ARROW ELECTRONICS, INC. CONSOLIDATED STATEMENT OF INCOME (In thousands except per share data) (Unaudited) Six Months Ended Three Months Ended June 30, June 30, ---------------------- ---------------------- 2000 1999 2000 1999 ---- ---- ---- ---- Sales $5,931,094 $4,451,660 $3,161,670 $2,250,028 ---------- ---------- ---------- ---------- Costs and expenses: Cost of products sold 5,017,795 3,829,239 2,671,370 1,935,889 Selling, general and administrative expenses 548,605 425,224 287,380 209,475 Depreciation and amortization 40,684 36,044 21,090 18,324 Integration charge - 24,560 - 24,560 ---------- ---------- ---------- ---------- 5,607,084 4,315,067 2,979,840 2,188,248 ---------- ---------- ---------- ---------- Operating income 324,010 136,593 181,830 61,780 Equity in earnings (loss) of affiliated companies (1,910) 38 (612) (34) Interest expense 66,119 51,310 35,540 26,708 ---------- ---------- ---------- ---------- Earnings before income taxes and minority interest 255,981 85,321 145,678 35,038 Provision for income taxes 106,637 38,619 60,310 17,249 ---------- ---------- ---------- ---------- Earnings before minority interest 149,344 46,702 85,368 17,789 Minority interest 2,315 3,339 1,398 2,767 ---------- ---------- ---------- ---------- Net income $ 147,029 $ 43,363 $ 83,970 $ 15,022 ========== ========== ========== ========== Net income per share: Basic $1.53 $.46 $.87 $.16 ===== ==== ==== ==== Diluted $1.50 $.45 $.84 $.16 ===== ==== ==== ==== Average number of shares outstanding: Basic 95,888 95,053 96,398 95,138 ====== ====== ====== ====== Diluted 97,741 95,928 99,419 96,016 ====== ====== ====== ====== See accompanying notes. ARROW ELECTRONICS, INC. CONSOLIDATED BALANCE SHEET (Dollars in thousands) June 30, December 31, 2000 1999 ----------- ------------ (Unaudited) ASSETS - ------ Current assets: Cash and short-term investments $ 46,928 $ 44,885 Accounts receivable, less allowance for doubtful accounts ($39,368 in 2000 and $32,338 in 1999) 2,213,078 1,638,654 Inventories 1,862,207 1,444,929 Prepaid expenses and other assets 47,415 29,469 ---------- ---------- Total current assets 4,169,628 3,157,937 Property, plant and equipment at cost: Land 18,078 17,638 Buildings and improvements 121,317 114,158 Machinery and equipment 288,047 257,841 ---------- ---------- 427,442 389,637 Less accumulated depreciation and amortization (183,281) (165,987) ---------- ---------- 244,161 223,650 Investments in affiliated companies 44,305 52,233 Cost in excess of net assets of companies acquired, net of amortization ($128,236 in 2000 and $113,762 in 1999) 1,033,575 960,770 Other assets 117,489 88,665 ---------- ---------- $5,609,158 $4,483,255 ========== ========== See accompanying notes. ARROW ELECTRONICS, INC. CONSOLIDATED BALANCE SHEET (Dollars in thousands) June 30, December 31, 2000 1999 ----------- ------------ (Unaudited) LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $1,248,805 $ 805,468 Accrued expenses 395,048 263,216 Short-term borrowings, including current maturities of long-term debt and capital lease obligations 320,122 255,977 ---------- ---------- Total current liabilities 1,963,975 1,324,661 Long-term debt and capital lease obligations 1,867,701 1,533,421 Deferred income taxes 33,882 39,474 Other liabilities 23,588 23,754 Minority interest 13,663 11,416 Shareholders' equity: Common stock, par value $1: Authorized - 120,000,000 shares Issued - 103,743,269 shares in 2000 and 102,949,640 shares in 1999 103,743 102,950 Capital in excess of par value 524,972 501,379 Retained earnings 1,386,008 1,238,979 Foreign currency translation adjustment (139,886) (95,295) ---------- ---------- 1,874,837 1,748,013 Less: Treasury stock (5,882,669 shares in 2000 and 7,004,349 shares in 1999), at cost 157,321 187,269 Unamortized employee stock awards 11,167 10,215 ---------- ---------- 1,706,349 1,550,529 ---------- ---------- $5,609,158 $4,483,255 ========== ========== See accompanying notes. ARROW ELECTRONICS, INC. CONSOLIDATED STATEMENT OF CASH FLOWS (In thousands) Six Months Ended June 30, ------------------------ 2000 1999 ---- ---- (Unaudited) Cash flows from operating activities: Net income $ 147,029 $ 43,363 Adjustments to reconcile net income to net cash provided by (used for) operations: Minority interest in earnings 2,247 3,339 Depreciation and amortization 44,903 39,564 Equity in (earnings) loss of affiliated companies 1,910 (38) Integration charge - 24,560 Deferred income taxes (3,496) (9,146) Change in assets and liabilities, net of effects of acquired businesses: Accounts receivable (512,315) (81,926) Inventories (375,801) 66,094 Prepaid expenses and other assets (17,392) 2,364 Accounts payable 405,655 (79,737) Accrued expenses 103,924 11,418 Other (14,825) (20,636) --------- -------- Net cash used for operating activities (218,161) (781) --------- -------- Cash flows from investing activities: Acquisition of property, plant and equipment, net (39,229) (40,202) Cash consideration paid for acquired businesses (87,327) (338,935) Investments (20,760) (9,986) --------- -------- Net cash used for investing activities (147,316) (389,123) --------- -------- Cash flows from financing activities: Change in short-term borrowings 62,235 (1,641) Change in credit facilities 96,198 362,231 Change in long-term debt 190,478 (38,560) Proceeds from exercise of stock options 22,725 283 Purchases of common stock (321) - Distribution to minority partners - (37,852) --------- -------- Net cash provided by financing activities 371,315 284,461 --------- -------- Effect of exchange rate changes on cash (3,795) (14,246) --------- -------- Net increase (decrease) in cash and short-term investments 2,043 (119,689) Cash and short-term investments at beginning of period 44,885 158,924 --------- -------- Cash and short-term investments at end of period $ 46,928 $ 39,235 ======== ======== Supplemental disclosures of cash flow information: Cash paid during the period for: Income taxes $ 39,509 $ 8,785 Interest 63,939 53,077 See accompanying notes. ARROW ELECTRONICS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2000 (Unaudited) Note A -- Basis of Presentation - ------------------------------- The accompanying consolidated financial statements reflect all adjustments, consisting only of normal recurring accruals, which are, in the opinion of management, necessary for a fair presentation of the consolidated financial position and results of operations at and for the periods presented. Such financial statements do not include all the information or footnotes necessary for a complete presentation and, accordingly, should be read in conjunction with the company's audited consolidated financial statements for the year ended December 31, 1999 and the notes thereto. The results of operations for the interim periods are not necessarily indicative of results for the full year. Note B -- Integration Charge - ---------------------------- The 1999 consolidated statement of income includes a pre-tax integration charge totaling $24.6 million related to the company's acquisition and integration of the electronics distribution group of Bell Industries, Inc. ("EDG") and Richey Electronics, Inc. ("Richey"). Of this amount, $15.2 million represents costs associated with closing facilities and severance payments. The remaining $9.4 million principally represents costs associated with outside resources associated with the conversion of systems, professional fees, and other costs related to the integration of these businesses into Arrow. Excluding the integration charge, net income and net income per share on a basic and diluted basis were $31.5 million and $.33, respectively, for the three months ended June 30, 1999 and $59.8 million, $.63, and $.62, respectively, for the six months ended June 30, 1999. Note C -- Earnings Per Share - ---------------------------- The following table sets forth the calculation of basic and diluted earnings per share (in thousands except per share data): For the Six For the Three Months Ended Months Ended June 30, June 30, ------------------- ------------------ 2000 1999 2000 1999 ---- ---- ---- ---- Net income $147,029 $43,363 $83,970 $15,022 ======== ======= ======= ======= Weighed average common shares outstanding for basic earnings per share 95,888 95,053 96,398 95,138 Net effect of dilutive stock options and restricted stock awards 1,853 875 3,021 878 -------- ------- ------- ------- Weighted average common shares outstanding for diluted earnings per share 97,741 95,928 99,419 96,016 ====== ====== ====== ====== Basic earnings per share $1.53 $.46 $.87 $.16 ===== ==== ==== ==== Diluted earnings per share $1.50 $.45 $.84 $.16 ===== ==== ==== ==== Note D -- Comprehensive Income - ------------------------------ Comprehensive income is defined as the aggregate change in shareholders' equity excluding changes in ownership interests. For the company, the components of comprehensive income are as follows (in thousands): For the Six For the Three Months Ended Months Ended June 30, June 30, -------------------- ------------------- 2000 1999 2000 1999 ---- ---- ---- ---- Net income $147,029 $43,363 $83,970 $15,022 Foreign currency translation adjustments(a) (44,591) (48,527) (16,757) (23,660) -------- ------- ------- ------- Comprehensive income (loss)(b) $102,438 $(5,164) $67,213 $(8,638) ======== ======= ======= ======= (a) The foreign currency translation adjustments have not been tax effected as investments in foreign affiliates are deemed to be permanent. (b) Excluding the integration charge of $24,560 ($16,480 after taxes), comprehensive income was $11,316 for the six months ended June 30, 1999 and $7,842 for the three months ended June 30, 1999. Note E -- Segment and Geographic Information - -------------------------------------------- The company is engaged in the distribution of electronic components to original equipment manufacturers and computer products to value-added resellers(VARs). The company has redefined its reportable segments to present two distinct worldwide businesses that have different economic cycles, structures, and competitors. Computer products include North American Computer Products Operations together with UK Microtronica, Nordic Microtronica, ATD (in Iberia), and Arrow Computer Products (in France). The prior year has been restated for comparative purposes. Revenue and operating income, by segment, are as follows (in thousands): For the Six For the Three Months Ended Months Ended June 30, June 30, ----------------------- ------------------------ 2000 1999 2000 1999 ---- ---- ---- ---- Revenue: Electronic Components $4,426,441 $2,848,693 $2,393,226 $1,436,708 Computer Products 1,504,653 1,602,967 768,444 813,320 ---------- ---------- ---------- ---------- Consolidated $5,931,094 $4,451,660 $3,161,670 $2,250,028 ========== ========== ========== ========== Operating income: Electronic Components $ 371,185 $ 156,905 $ 213,844 $ 81,360 Computer Products 19,313 31,327 9,989 18,813 Corporate (66,488) (51,639) (42,003) (38,393) ---------- ---------- ---------- ---------- Consolidated $ 324,010 $ 136,593 $ 181,830 $ 61,780 ========== ========== ========== ========== Total assets, by segment, are as follows (in thousands): June 30, December 31, 2000 1999 ---------- ----------- Total assets: Electronic Components $4,529,437 $3,317,253 Computer Products 906,182 991,785 Corporate 173,539 174,217 ---------- ---------- Consolidated $5,609,158 $4,483,255 ========== ========== As a result of the company's philosophy of maximizing operating efficiencies through the centralization of certain functions, selected fixed assets and related depreciation, as well as borrowings and goodwill amortization are not directly attributable to the individual operating segments. Revenues, by geographic area, are as follows (in thousands): For the Six For the Three Months Ended Months Ended June 30, June 30, ---------------------- ---------------------- 2000 1999 2000 1999 ---- ---- ---- ---- Americas $3,638,808 $2,972,368 $1,921,599 $1,531,387 Europe 1,670,799 1,159,070 867,541 553,686 Asia/Pacific 621,487 320,222 372,530 164,955 ---------- ---------- ---------- ---------- Consolidated $5,931,094 $4,451,660 $3,161,670 $2,250,028 ========== ========== ========== ========== Total assets, by geographic area, are as follows (in thousands): June 30, December 31, 2000 1999 ---------- ----------- Americas $2,945,960 $2,642,601 Europe 1,990,552 1,460,439 Asia/Pacific 672,646 380,215 ---------- ---------- Consolidated $5,609,158 $4,483,255 ========== ========== Note F -- Subsequent Event - -------------------------- In August 2000, the company agreed to purchase Wyle Components and Wyle Systems, which reported combined 1999 sales in North America of about $2 billion, for approximately $840 million (including the assumption of debt), subject to various adjustments at closing. The company plans to finance the purchase price through a combination of debt, common equity, and equity-linked securities. Item 2. Management's Discussion and Analysis of Financial Condition and --------------------------------------------------------------- Results of Operations. ---------------------- Sales - ----- Consolidated sales for the six months and second quarter of 2000 increased 33 percent and 41 percent, respectively, compared with the year-earlier periods. The sales growth was driven by a 55 percent and 67 percent increase in sales of core components for the six months and second quarter of 2000, respectively, from the comparable year-earlier periods. Sales of computer products decreased by 6 percent for the six months and second quarter of 2000 when compared to the year-earlier periods principally as a result of market conditions for mid-range products, lower sales of low margin microprocessors (a product segment not considered a part of the company's core business), and foreign exchange rate differences. Operating Income - ---------------- The company recorded operating income of $324 million and $181.8 million in the first six months and second quarter of 2000, respectively, compared with $136.6 million and $61.8 million, respectively, in the year-earlier periods. Excluding the integration charge relating to EDG and Richey (see Note B), operating income was $161.2 million and $86.3 million for the six months and second quarter ended June 30, 1999, respectively. The increase in operating income is due to increased sales and improving gross profit margins in the core components businesses around the world. In addition, operating expenses as a percentage of sales decreased to 9.9 percent and 9.8 percent for the six months and second quarter ended June 30, 2000, respectively, from 10.4 percent and 10.1 percent, respectively, in the year-earlier periods. Interest Expense - ---------------- Interest expense of $66.1 million and $35.5 million in the first six months and second quarter of 2000, respectively, increased from $51.3 million and $26.7 million, respectively, in the year-earlier periods. The increase is the result of additional debt incurred to fund acquisitions, joint ventures, capital expenditures, and investments in working capital to support accelerated sales growth. Income Taxes - ------------ The company recorded a provision for taxes at an effective rate of 41.7 percent and 41.4 percent for the first six months and second quarter of 2000, respectively, compared with 45.3 percent and 49.2 percent in the comparable year-earlier periods. Excluding the impact of the aforementioned integration charge, the effective rate was 42.5 percent for the six months and second quarter of 1999. The company's effective tax rate is principally impacted by, among other factors, the statutory tax rates in the countries it operates and the related level of earnings generated by these operations and the nondeductibility of goodwill amortization. Net Income - ---------- The company recorded net income of $147 million and $84 million in the first six months and second quarter of 2000, respectively, compared with $43.4 and $15 million, respectively, in the year-earlier periods. Excluding the integration charge of $24.6 million ($16.5 million after taxes), net income was $59.8 million and $31.5 million for the first six months and second quarter of 1999, respectively. The increase in net income is due to increased sales and improving gross profit margins, offset, in part, by higher levels of interest. Liquidity and Capital Resources - ------------------------------- The company maintains a high level of current assets, primarily accounts receivable and inventories. Consolidated current assets as a percentage of total assets were approximately 74 percent at June 30, 2000 compared with 71 percent at June 30, 1999. The net amount of cash used for the company's operating activities during the first six months of 2000 was $218.2 million, principally reflecting investments in working capital, offset, in part, by earnings for the six months. The net amount of cash used for investing activities was $147.3 million, including $39.2 million for various capital expenditures, $87.3 million for the acquisitions of Rapac Electronics Ltd., Tekelec Europe, and Jakob Hatteland AS, and $20.8 million for internet-related joint ventures. The net amount of cash provided by financing activities was $371.3 million, primarily reflecting borrowings under the company's commercial paper program and credit facilities, as well as various short-term bank borrowings. The net amount of cash used for the company's operating activities during the first six months of 1999 was $.8 million, principally reflecting earnings plus non-cash charges, offset, in part, by investments in working capital. The net amount of cash used for investing activities was $389.1 million, including $40.2 million for various capital expenditures and $348.9 million principally for the acquisitions of EDG, Richey, and the remaining 10% of Spoerle Electronic, as well as certain internet-related investments. The net amount of cash provided by financing activities was $284.5 million, reflecting borrowings under the company's credit facilities, offset, in part, by the repayment of Richey's 7% convertible subordinated notes and debentures. Year 2000 Update - ---------------- The company has experienced no significant failures or disruptions of its internal systems either on or after January 1, 2000. Additionally, to date, there have been no material Year 2000 related failures or disruptions with respect to principal third-party business partners. The company continues to monitor its systems and the capabilities of its customers and suppliers to ensure that any previously unidentified Year 2000 issues that may arise are addressed promptly. In the unlikely event that any issues should occur, the company anticipates that they will be resolved through implementation of its comprehensive contingency planning efforts. Information Relating to Forward-Looking Statements - -------------------------------------------------- This report includes forward-looking statements that are subject to certain 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, changes in product supply, pricing, and customer demand, competition, other vagaries in the electronic components and commercial computer products markets, and changes in relationships with key suppliers. 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. Item 3. Quantitative and Qualitative Disclosures About Market Risk. ----------------------------------------------------------- The company is exposed to market risk from changes in foreign currency exchange rates and interest rates. The company, as a large international organization, faces exposure to adverse movements in foreign currency exchange rates. These exposures may change over time as business practices evolve and could have a material impact on the company's financial results in the future. The company's primary exposure relates to transactions in which the currency collected from customers is different from the currency utilized to purchase the product sold in Europe, the Asia/Pacific region, and South America. At the present time, the company hedges only those currency exposures for which natural hedges do not exist. Anticipated foreign currency cash flows and earnings and investments in businesses in Europe, the Asia/Pacific region, and South America are not hedged as in many instances there are natural offsetting positions. The translation of the financial statements of the non-North American operations is impacted by fluctuations in foreign currency exchange rates. Had the various average foreign currency exchange rates remained the same during the first six months of 2000 as compared with December 31, 1999, 2000 sales and operating income would have been $62 million and $4 million higher, respectively, than the reported results. The company's interest expense, in part, is sensitive to the general level of interest rates in the Americas, Europe, and the Asia/Pacific region. The company manages its exposure to interest rate risk through the proportion of fixed rate and variable rate debt in its total debt portfolio. At June 30, 2000, the company had approximately 40 percent of its debt as fixed rate borrowings and 60 percent of its debt subject to variable rates. Interest expense would fluctuate by approximately $4 million if average interest rates had changed by one percentage point during the first six months of 2000. This amount was determined by considering the impact of a hypothetical interest rate on the company's borrowing cost. This analysis does not consider the effect of the level of overall economic activity that could exist in such an environment. Further, in the event of a change of such magnitude, management could likely take actions to further mitigate any potential negative exposure to the change. However, due to the uncertainty of the specific actions that would be taken and their possible effects, the sensitivity analysis assumes no changes in the company's financial structure. PART II. OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders. ---------------------------------------------------- (a) The company's Annual Meeting of Shareholders was held on May 23, 2000 (the "Annual Meeting"). (b) The matters voted upon at the Annual Meeting and the results of the voting were as follows: (i) The following individuals were elected by the shareholders to serve as Directors: Board Member In Favor Withheld ------------ -------- -------- Daniel W. Duval 86,459,441 558,553 Carlo Giersch 86,455,359 562,635 John N. Hanson 86,464,649 553,345 Stephen P. Kaufman 86,462,305 555,689 Roger King 86,460,099 557,895 Robert E. Klatell 86,464,985 553,009 Karen Gordon Mills 86,456,078 561,916 Barry W. Perry 86,464,359 553,635 Richard S. Rosenbloom 86,423,224 594,770 Francis M. Scricco 86,461,658 556,336 John C. Waddell 86,463,433 554,561 (ii) The ratification and approval of the amendment of the Chief Executive Officer 1999 Performance Bonus Plan was voted upon as follows: 82,178,758 shares in favor; 3,882,258 shares against; and 956,978 shares abstaining. (iii) The appointment of Ernst & Young LLP as auditors of the company was voted upon as follows: 86,265,109 shares in favor; 254,460 shares against; and 498,425 shares abstaining. Item 6. Exhibits and Reports on Form 8-K. --------------------------------- (a) Exhibits (27) Financial Data Schedule (99) Press Release - Acquisition of Wyle Components and Wyle Systems (b) Reports on Form 8-K. None. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. ARROW ELECTRONICS, INC. Date: August 11, 2000 By:/s/ Sam R. Leno ------------------------- Sam R. Leno Senior Vice President and Chief Financial Officer Date: August 11, 2000 By:/s/ Paul J. Reilly ------------------------- Paul J. Reilly Vice President-Finance EX-27 2 0002.txt FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from the 2000 10-Q and is qualified in its entirety by reference to such financial statements. 6-MOS DEC-31-2000 JAN-1-2000 JUN-30-2000 46,928 0 2,252,446 39,358 1,862,207 4,169,628 427,442 183,281 5,609,158 1,963,975 1,867,701 0 0 103,743 1,602,606 5,609,158 5,931,094 5,931,094 5,017,795 5,607,084 0 20,116 66,119 255,981 106,637 147,029 0 0 0 147,029 1.53 1.50
EX-99 3 0003.txt PRESS RELEASE-ACQUISITION OF WYLE Arrow Electronics, Avnet, And Schroder Ventures Win Bid For VEBA Electronics - ---------------------------------------------------------------------------- MELVILLE, New York, August 7, 2000 -- A consortium led by Schroder Ventures' funds and including Arrow Electronics, Inc. (NYSE:ARW) and Avnet, Inc.(NYSE:AVT) has agreed to purchase the VEBA Electronics Group from Germany-based E.ON AG (formerly VEBA AG). E.ON will receive approximately $2.35 billion in cash, including the assumption of debt, for the VEBA Electronics Group, which reported 1999 sales of $5.47 billion. The business consists of three main groupings: Wyle Components, Wyle Systems, and Atlas Services in the U.S.; EBV Elektronik, WBC, Raab Karcher Electronic Systems (RKE), and Atlas Services in Europe; and the global Memec group. Under the terms of the agreement, Arrow will acquire Wyle Components and Wyle Systems, which reported combined 1999 sales in North America of about $2 billion, for approximately $840 million (including the assumption of debt), subject to various adjustments at closing. Arrow plans to finance the purchase price through a combination of debt, common equity, and equity-linked securities. "We are delighted that Wyle will become part of the Arrow family," said Francis M. Scricco, President and Chief Executive Officer of Arrow. "The Wyle Components business model will complement our existing core components distribution businesses in North America quite nicely. Wyle Systems will add to our computer products business in North America on two levels: by enhancing our product offering with the addition of certain lines such as Compaq, and by broadening our penetration in North America with the addition of their sales force, which, given its predominance in the West and Southwest, will fit well with our East-Midwest focused sales force." As with Arrow's prior acquisitions, the integration of the Wyle businesses with Arrow will produce sizeable synergies and the transaction will be accretive to earnings in the first year following the combination. "Arrow has a long history of successfully integrating not only businesses, but management and personnel," said Stephen P. Kaufman, Chairman of Arrow Electronics. "Wyle Components and Wyle Systems represent the type of successful, profitable, and professional companies that we seek out in order to expand the Arrow family," he added. The transaction is subject to customary closing conditions, including obtaining necessary government approvals, and is expected to be completed within the next several months. Arrow Electronics is the world's largest distributor of electronic components and computer products, with 1999 sales of $9.3 billion. Headquartered in Melville, New York, Arrow serves as a supply channel partner for more than 600 suppliers and 175,000 original equipment manufacturers and commercial customers through more than 225 sales facilities and 19 distribution centers in 37 countries. # # # Contact: Robert E. Klatell Executive Vice President 516-391-1300 The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements. This press release contains forward-looking statements that are subject to certain risks and uncertainties which could cause actual results or facts to differ materially from such statements for a variety of reasons including, but are not limited to: industry conditions, changes in product supply, pricing, and customer demand, competition, other vagaries in the computer and electronic components markets, changes in relationships with key suppliers 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). 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 forward-looking statements. -----END PRIVACY-ENHANCED MESSAGE-----