-----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, Bn86Cr41xxJkJX9IMIqWXcyRJbV3xKAsWyCULvSsaIEB5aZPgls5Edy7QHgg5nZU m4zJ/fJaM7Y8GJZpBWZHAQ== 0000007536-01-500011.txt : 20010814 0000007536-01-500011.hdr.sgml : 20010814 ACCESSION NUMBER: 0000007536-01-500011 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010630 FILED AS OF DATE: 20010813 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ARROW ELECTRONICS INC CENTRAL INDEX KEY: 0000007536 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-ELECTRONIC PARTS & EQUIPMENT, NEC [5065] IRS NUMBER: 111806155 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-04482 FILM NUMBER: 1706653 BUSINESS ADDRESS: STREET 1: 25 HUB DR CITY: MELVILLE STATE: NY ZIP: 11747 BUSINESS PHONE: 5163911300 10-Q 1 q20110q.txt FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2001 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, 2001 ------------- 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: 99,010,930 shares outstanding at August 3, 2001. 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, ----------------------- ----------------------- 2001 2000 2001 2000 ---- ---- ---- ---- Sales $5,785,788 $5,931,094 $2,510,041 $3,161,670 ---------- ---------- ---------- ---------- Costs and expenses: Cost of products sold 4,839,560 5,017,795 2,112,095 2,671,370 Selling, general and administrative expenses 624,551 548,605 298,088 287,380 Depreciation and amortization 58,169 40,684 29,585 21,090 Integration charge 9,375 - - - ---------- ---------- ---------- ---------- 5,531,655 5,607,084 2,439,768 2,979,840 ---------- ---------- ---------- ---------- Operating income 254,133 324,010 70,273 181,830 Equity in losses of affiliated companies (1,393) (1,910) (997) (612) Interest expense 120,693 66,119 54,786 35,540 ---------- ---------- ---------- ---------- Earnings before income taxes and minority interest 132,047 255,981 14,490 145,678 Provision for income taxes 53,677 106,637 7,830 60,310 ---------- ---------- ---------- ---------- Earnings before minority interest 78,370 149,344 6,660 85,368 Minority interest (263) 2,315 (294) 1,398 ---------- ---------- ---------- ---------- Net income $ 78,633 $ 147,029 $ 6,954 $ 83,970 ========== ========== ========== ========== Net income per share: Basic $.80 $1.53 $.07 $.87 ==== ===== ==== ==== Diluted $.75 $1.50 $.07 $.84 ==== ===== ==== ==== Average number of shares outstanding: Basic 97,957 95,888 98,006 96,398 ======= ====== ====== ====== Diluted 113,017 97,741 99,580 99,419 ======= ====== ====== ====== See accompanying notes. ARROW ELECTRONICS, INC. CONSOLIDATED BALANCE SHEET (Dollars in thousands) June 30, December 31, 2001 2000 ----------- ------------ (Unaudited) ASSETS - ------ Current assets: Cash and short-term investments $ 69,094 $ 55,546 Accounts receivable, including retained interest in securitized receivables, net 1,879,489 2,635,595 Inventories 2,228,696 2,972,661 Prepaid expenses and other assets 64,931 100,408 ---------- ---------- Total current assets 4,242,210 5,764,210 Property, plant and equipment at cost: Land 42,865 40,892 Buildings and improvements 161,234 167,194 Machinery and equipment 337,128 319,305 ---------- ---------- 541,227 527,391 Less accumulated depreciation and amortization (229,034) (210,932) ---------- ---------- 312,193 316,459 Investments in affiliated companies 43,662 35,885 Cost in excess of net assets of companies acquired, net of amortization ($162,920 in 2001 and $145,014 in 2000) 1,196,506 1,237,099 Other assets 346,916 250,888 ---------- ---------- $6,141,487 $7,604,541 ========== ========== See accompanying notes. ARROW ELECTRONICS, INC. CONSOLIDATED BALANCE SHEET (Dollars in thousands) June 30, December 31, 2001 2000 ----------- ------------ (Unaudited) LIABILITIES AND SHAREHOLDERS' EQUITY - ------------------------------------ Current liabilities: Accounts payable $ 806,117 $1,567,631 Accrued expenses 377,388 473,984 Short-term borrowings, including current maturities of long-term debt 333,796 529,261 ---------- ---------- Total current liabilities 1,517,301 2,570,876 Long-term debt 2,591,167 3,027,671 Other liabilities 80,222 92,246 Shareholders' equity: Common stock, par value $1: Authorized - 160,000,000 shares Issued - 103,833,979 shares in 2001 and 103,816,792 shares in 2000 103,834 103,817 Capital in excess of par value 529,076 529,376 Retained earnings 1,675,543 1,596,910 Foreign currency translation adjustment (205,935) (160,914) ---------- ---------- 2,102,518 2,069,189 Less: Treasury stock (5,102,790 shares in 2001 and 5,405,918 shares in 2000), at cost (136,464) (144,569) Unamortized employee stock awards (13,257) (10,872) ---------- ---------- 1,952,797 1,913,748 ---------- ---------- $6,141,487 $7,604,541 ========== ========== See accompanying notes. ARROW ELECTRONICS, INC. CONSOLIDATED STATEMENT OF CASH FLOWS (In thousands) Six Months Ended June 30, ----------------------- 2001 2000 ---- ---- (Unaudited) Cash flows from operating activities: Net income $ 78,633 $ 147,029 Adjustments to reconcile net income to net cash provided by (used for) operations: Minority interest in earnings (263) 2,247 Depreciation and amortization 65,106 44,903 Accretion of discount on convertible debentures 7,659 - Equity in losses of affiliated companies 1,393 1,910 Deferred income taxes (43,640) (3,496) Change in assets and liabilities: Accounts receivable 681,130 (512,315) Inventories 688,625 (375,801) Prepaid expenses and other assets (4,902) (17,392) Accounts payable (740,825) 405,655 Accrued expenses (59,474) 103,924 Other 101 (14,825) -------- --------- Net cash provided by (used for) operating activities 673,543 (218,161) -------- --------- Cash flows from investing activities: Acquisition of property, plant and equipment, net (36,283) (39,229) Investments (15,509) (20,760) Cash consideration paid for acquired businesses - (87,327) -------- --------- Net cash used for investing activities (51,792) (147,316) -------- --------- Cash flows from financing activities: Sale of accounts receivable under securitization program 251,737 - Repayments under securitization program (252,865) - Change in short-term borrowings (496,154) 62,235 Change in credit facilities 112,928 96,198 Change in long-term debt (892,345) 190,478 Proceeds from convertible debentures 670,883 - Proceeds from exercise of stock options 1,985 22,725 Purchases of common stock - (321) -------- --------- Net cash provided by (used for) financing activities (603,831) 371,315 -------- --------- Effect of exchange rate changes on cash (4,372) (3,795) -------- --------- Net increase in cash and short-term investments 13,548 2,043 Cash and short-term investments at beginning of period 55,546 44,885 -------- --------- Cash and short-term investments at end of period $ 69,094 $ 46,928 ======== ========= Supplemental disclosures of cash flow information: Cash paid during the period for: Income taxes $ 46,753 $ 39,509 Interest 112,999 63,939 See accompanying notes. ARROW ELECTRONICS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2001 (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, 2000 and the notes thereto. The results of operations for the interim periods are not necessarily indicative of results for the full year. Note B -- Impact of Recently Issued Accounting Standards - -------------------------------------------------------- In July 2001, the Financial Accounting Standards Board ("FASB") issued Statement No. 142, "Goodwill and Other Intangible Assets". The company is required to adopt Statement No. 142 effective January 1, 2002. This statement, among other things, changes the methodology for determining impairment of goodwill. The company has not yet completed its analysis of the statement and the impact, if any, on the reported amount of goodwill. In June 1998, the FASB issued Statement No. 133, "Accounting for Derivative Instruments and Hedging Activities." In June 1999, the FASB issued Statement No. 138, which deferred the effective date of Statement No. 133. The Statement requires the company to recognize all derivatives on the balance sheet at fair value. Gains and losses resulting from changes in the value of the derivatives are accounted for depending on the intended use of the derivative and whether it qualifies for hedge accounting. Due to the company's limited use of derivative financial instruments, adoption of Statement No. 133, effective January 1, 2001, did not have a significant effect on the company's consolidated results of operations or financial position. Note C -- Accounts Receivable - ----------------------------- Accounts receivable consists of the following (in thousands): June 30, December 31, 2001 2000 ---------- ----------- Accounts receivable $1,044,505 $2,743,737 Retained interest in securitized accounts receivable 921,002 - Allowance for doubtful accounts (86,018) (108,142) ---------- ---------- $1,879,489 $2,635,595 ========== ========== During the first quarter of 2001, the company entered into a $750,000,000 accounts receivable securitization program with a group of financial institutions under which it could sell, with recourse, its interest in certain trade accounts receivable. At June 30, 2001, the company had no outstanding balance from the sale of these receivables and had a subordinated interest in the remaining outstanding receivables of $921,002,000. Note D -- Special Integration Charge - ------------------------------------ During the first quarter of 2001, the company recorded a special charge of $9,375,000 ($5,719,000 after taxes) related to the acquisition and integration of Wyle Electronics and Wyle Systems (collectively, "Wyle"). Of the total amount recorded, $1,433,000 represented costs associated with the closing of various office facilities and distribution and value-added centers, $4,052,000 represented costs associated with severance and other personnel costs, $2,703,000 represented costs associated with outside services related to the conversion of systems and certain other costs of the integration of Wyle into the company, and $1,187,000 represented the write-down of property, plant and equipment to estimated fair value. Of the expected $8,188,000 to be spent in cash in connection with the acquisition and integration of Wyle, $6,594,000 has been spent to date. Approximately $1,225,000 of the remaining amount relates to vacated facilities leased with various expiration dates through 2003. Note E -- 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, ------------------- ------------------ 2001(a) 2000 2001 2000 ---- ---- ---- ---- Net income used for basic earnings per share $78,633 $147,029 $6,954 $83,970 Interest on convertible debentures, net of tax 5,761 - - - ------- -------- ------ ------- Net income used for diluted earnings per share $84,394 $147,029 $6,954 $83,970 ======= ======== ====== ======= Weighted average common shares outstanding for basic earnings per share 97,957 95,888 98,006 96,398 Net effect of dilutive stock options and restricted stock awards 2,119 1,853 1,574 3,021 Net effect of convertible debentures 12,941 - - - -------- -------- ------ ------- Weighted average common shares outstanding for diluted earnings per share 113,017 97,741 99,580 99,419 ======== ====== ====== ====== Basic earnings per share $.80 $1.53 $.07 $.87 ==== ===== ==== ==== Diluted earnings per share $.75 $1.50 $.07 $.84 ==== ===== ==== ==== (a) Excluding the integration charge, net income and net income per share on a basic and diluted basis were $84,352,000, $.86, and $.80, respectively, for the six months ended June 30, 2001. Note F -- Comprehensive Income - ------------------------------ Comprehensive income is defined as the aggregate change in shareholders' equity excluding changes in ownership interests. The components of comprehensive income are as follows (in thousands): For the Six For the Three Months Ended Months Ended June 30, June 30, -------------------- ------------------- 2001 2000 2001 2000 ---- ---- ---- ---- Net income $ 78,633 $147,029 $ 6,954 $ 83,970 Foreign currency translation adjustments (a) (45,021) (44,591) 10,907 (16,757) -------- -------- ------- -------- Comprehensive income $ 33,612 $102,438 $17,861 $ 67,213 ======== ======== ======= ======== (a) The foreign currency translation adjustments have not been tax effected as investments in foreign affiliates are deemed to be permanent. Note G -- 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). 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. During the current quarter, the company redefined its reportable segments to present two distinct worldwide businesses that have different economic cycles, structures, and competitors. Computer products includes North American Computer Products together with UK 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, ----------------------- ------------------------ 2001 2000 2001 2000 ---- ---- ---- ---- Revenue: Electronic Components $4,348,631 $4,533,215 $1,814,757 $2,439,254 Computer Products 1,437,157 1,397,879 695,284 722,416 ---------- ---------- ---------- ---------- Consolidated $5,785,788 $5,931,094 $2,510,041 $3,161,670 ========== ========== ========== ========== Operating income: Electronic Components $ 306,635 $ 370,942 $ 91,398 $ 213,495 Computer Products 18,805 19,556 11,072 10,338 Corporate (71,307) (66,488) (32,197) (42,003) ---------- ---------- ---------- ---------- Consolidated (a) $ 254,133 $ 324,010 $ 70,273 $ 181,830 ========== ========== ========== ========== (a) Excluding the integration charge of $9,375,000, operating income was $263,508,000 for the six months ended June 30, 2001. Total assets, by segment, are as follows (in thousands): June 30, December 31, 2001 2000 ---------- ----------- Total assets: Electronic Components $4,817,885 $6,005,100 Computer Products 1,073,730 1,343,584 Corporate 249,872 255,857 ---------- ---------- Consolidated $6,141,487 $7,604,541 ========== ========== Revenues, by geographic area, are as follows (in thousands): For the Six For the Three Months Ended Months Ended June 30, June 30, ----------------------- ----------------------- 2001 2000 2001 2000 ---- ---- ---- ---- Americas $3,580,944 $3,638,808 $1,539,737 $1,921,599 Europe 1,717,810 1,670,799 737,986 867,541 Asia/Pacific 487,034 621,487 232,318 372,530 ---------- ---------- ---------- ---------- Consolidated $5,785,788 $5,931,094 $2,510,041 $3,161,670 ========== ========== ========== ========== Total assets, by geographic area, are as follows (in thousands): June 30, December 31, 2001 2000 ---------- ----------- Americas $3,695,639 $4,840,169 Europe 1,937,304 2,104,837 Asia/Pacific 508,544 659,535 ---------- ---------- Consolidated $6,141,487 $7,604,541 ========== ========== Item 2. Management's Discussion and Analysis of Financial Condition and --------------------------------------------------------------- Results of Operations. --------------------- Sales - ----- Consolidated sales for the first six months and second quarter of 2001 decreased 2.4 percent and 20.6 percent, respectively, when compared with the year-earlier period. The decrease in sales was driven by a 4.1 percent and 25.6 percent decrease in sales of core components for the six months and second quarter of 2001, respectively, principally as a result of weakened economic conditions. During the first six months of 2001, the North American components operation experienced a slowdown in business activity with its large telecom and networking customers and the large contract manufacturers that serve them. In addition, weakening market conditions in Europe during the second quarter contributed to the decrease in sales. Sales of computer products increased by 2.8 percent and decreased by 3.8 percent for the first six months and second quarter of 2001, respectively, when compared to the year-earlier periods. The increase for the first six months was due to acquisitions, offset, in part, by market conditions for mid-range products and lower sales of low margin microprocessors (a product segment not considered a part of the company's core business). Operating Income - ---------------- The company recorded operating income of $254.1 million and $70.3 million in the first six months and second quarter of 2001, respectively, compared with $324 million and $181.8 million, in the year-earlier periods. Included in the results for the first six months of 2001 is a pre-tax integration charge of $9.4 million associated with the integration of Wyle. Excluding this integration charge, operating income for the first six months of 2001 was $263.5 million. The decrease in operating income is due to lower sales offset by improving gross profit margins in the North American components business and in the worldwide computer products business. The improvement in gross profit margins in the second quarter of 2001 is a result of a change in components customer mix, reflecting lower sales to large, low margin customers. Interest Expense - ---------------- Interest expense of $120.7 million and $54.8 million in the first six months and second quarter of 2001, respectively, increased from $66.1 million and $35.5 million, respectively, in the year-earlier periods. The increase is the result of additional debt incurred to fund acquisitions during 2000, as well as internet-related joint ventures and capital expenditures offset, in part, by a reduction in working capital. Income Taxes - ------------ The company recorded a provision for taxes at an effective rate of 40.6 percent and 54 percent for the first six months and second quarter of 2001, respectively, compared with 41.7 percent and 41.4 percent, respectively, in the comparable year-earlier periods. Excluding the impact of the aforementioned integration charge, the effective rate was 40.5 percent for the first six months of 2001. The company's effective tax rate is principally impacted by, among other factors, the statutory tax rates in the countries in which it operates, the related level of earnings generated by these operations, and the nondeductibility of goodwill amortization. The company anticipates that the decrease in pre-tax earnings expected for the year will lead to a higher effective tax rate and the second quarter provision aligns the rate on a year-to-date basis. Net Income - ---------- The company recorded net income of $78.6 million and $7 million in the first six months and second quarter of 2001, respectively, compared with $147 million and $84 million, respectively, in the year-earlier periods. Excluding the aforementioned integration charge, net income for the first six months of 2001 was $84.4 million. The decrease in net income is due to decreased sales and higher levels of interest offset, in part, by improving gross profit margins. 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 69 percent at June 30, 2001 compared with 74 percent at June 30, 2000. The net amount of cash provided by the company's operating activities during the first six months of 2001 was $673.5 million, principally reflecting changes in working capital. The net amount of cash used for investing activities was $51.8 million, including $36.3 million for various capital expenditures and $15.5 million for various joint ventures. The net amount of cash used for financing activities was $603.8 million, primarily reflecting the repayment of short-term and long-term debt, offset, in part, by proceeds from the sale of convertible debentures. To mitigate the continuing impact of the economic downturn, the company is taking a number of significant steps in the third quarter of 2001, including a further reduction of more than 1,000 people in its worldwide workforce, cutbacks in discretionary spending, deferral of non-strategic projects, consolidation of facilities, and other major cost containment and cost reduction actions. In the aggregate, these actions are expected to reduce the company's expense levels by over $100 million on an annualized basis, with the first portion of this reduction becoming clearly evident in the third quarter. The company expects to take an as yet unquantified special charge in the third quarter of 2001 for the one-time costs of these restructurings and expense reductions. In addition, the company is in the process of reviewing its Internet investments, which may result in an adjustment to their book value. 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, principally reflecting borrowings under the company's commercial paper program and credit facilities, as well as various short-term bank borrowings. 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 Latin 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 Latin 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 2001 as compared with December 31, 2000, 2001 sales and operating income would have been $65 million and $5 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, 2001, approximately 83 percent of the company's debt was subject to fixed rates and 17 percent of its debt was subject to variable rates. Interest expense would fluctuate by approximately $5 million if average interest rates had changed by one percentage point during the first six months of 2001. 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 11, 2001 (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 89,682,650 674,299 Carlo Giersch 88,541,094 1,815,855 John N. Hanson 89,689,835 667,114 Stephen P. Kaufman 89,686,434 670,515 Roger King 89,689,036 667,913 Robert E. Klatell 89,686,936 670,013 Karen Gordon Mills 89,684,729 672,220 Barry W. Perry 89,690,924 666,025 Richard S. Rosenbloom 89,635,074 721,875 Francis M. Scricco 89,685,378 671,571 John C. Waddell 89,682,890 674,059 (ii) The appointment of Ernst & Young LLP as auditors of the company was voted upon as follows: 89,684,282 shares in favor; 584,914 shares against; and 87,753 shares abstaining. Item 6. Exhibits and Reports on Form 8-K. -------------------------------- (a) Exhibits None (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 13, 2001 By:/s/ Robert E. Klatell ---------------------------- Robert E. Klatell Executive Vice President and Chief Financial Officer Date: August 13, 2001 By:/s/ Paul J. Reilly ---------------------------- Paul J. Reilly Vice President-Finance -----END PRIVACY-ENHANCED MESSAGE-----