-----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, FcmzRim49x34x/9B80/LA54WvYqPOxGB/a7oVjN5JurrNSvwEyGBOmveAJ6soz0c T8ESX5EKBuSvBO8zesnv5A== 0001157523-05-009290.txt : 20051027 0001157523-05-009290.hdr.sgml : 20051027 20051027094425 ACCESSION NUMBER: 0001157523-05-009290 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20051027 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20051027 DATE AS OF CHANGE: 20051027 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: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-04482 FILM NUMBER: 051158690 BUSINESS ADDRESS: STREET 1: 25 HUB DR CITY: MELVILLE STATE: NY ZIP: 11747 BUSINESS PHONE: 5163911300 MAIL ADDRESS: STREET 1: 50 MARCUS DR CITY: MELVILLE STATE: NY ZIP: 11747 8-K 1 a5005822.txt ARROW ELECTRONICS, INC. 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): October 27, 2005 ---------------- ARROW ELECTRONICS, INC. ----------------------- (Exact Name of Registrant as Specified in Charter) NEW YORK 1-4482 11-1806155 -------- ------ ---------- (State or Other Jurisdiction (Commission (IRS Employer of Incorporation) File Number) Identification No.) 50 MARCUS DRIVE, MELVILLE, NEW YORK 11747 ----------------------------------------- (Address of Principal Executive Offices) Registrant's telephone number, including area code: (631) 847-2000 Not Applicable -------------- (Former Name or Former Address, if Changed Since Last Report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 20.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION On October 27, 2005, the Registrant issued a press release announcing the corporation's third quarter 2005 earnings. A copy of the press release is attached hereto as an Exhibit (99.1). The information in this Current Report on Form 8-K and the Exhibit attached hereto is being furnished and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act") or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, regardless of any general incorporation language in such filing. ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS (c) EXHIBITS 99.1 press release dated October 27, 2005. 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 hereunto duly authorized. ARROW ELECTRONICS, INC. Date: October 27, 2005 By: /s/Peter S. Brown ----------------- Name: Peter S. Brown Title: Senior Vice President EXHIBIT INDEX Exhibit Description - ------- ----------- 99.1 Press release issued by Arrow Electronics, Inc., dated October 27, 2005. EX-99.1 2 a5005822ex99.txt EXHIBIT 99.1 PRESS RELEASE Exhibit 99.1 Arrow Electronics Posts Strong Third Quarter Results MELVILLE, N.Y.--(BUSINESS WIRE)--Oct. 27, 2005-- Generates $80 Million of Cash Flow from Operations; Year-to-Date Cash Flow from Operations Nearly $300 Million Arrow Electronics, Inc. (NYSE:ARW) today reported third quarter 2005 net income of $63.5 million ($.54 and $.52 per share on a basic and diluted basis, respectively) on sales of $2.71 billion, compared with net income of $63.4 million ($.55 and $.52 per share on a basic and diluted basis, respectively) on sales of $2.62 billion in the third quarter of 2004. Cash flow from operations in the third quarter of 2005 was $79.9 million, compared with $51.9 million in the third quarter of 2004. The company's results for 2005 and 2004 include a number of items outlined below that impact their comparability. A reconciliation of these items is provided under the heading "Certain Non-GAAP Financial Information." Excluding those items, net income for the quarter ended September 30, 2005 would have been $63.8 million ($.54 and $.52 per share on a basic and diluted basis, respectively) and net income for the quarter ended September 30, 2004 would have been $55.8 million ($.48 and $.46 per share on a basic and diluted basis, respectively). Consolidated operating income of $118.4 million, excluding the items impacting comparability, was up 12% from $105.8 million over last year's third quarter. Operating income as a percentage of sales, excluding the previously mentioned items impacting comparability, decreased by 10 basis points sequentially, and increased by 40 basis points year-over-year. "We delivered strong results against the backdrop of traditional seasonal weakness in Europe and the computer products business in the third quarter," said William E. Mitchell, President and Chief Executive Officer. "In addition to posting our 11th consecutive quarter of year-over-year sales growth, we again increased operating income at a faster pace than sales as a result of our ability to leverage our cost structure to drive further operating efficiencies," added Mr. Mitchell. Worldwide components sales of $2.08 billion were flat sequentially and up 4% from last year's third quarter. "Component sales in our Asia/Pacific region advanced to a new record level and North America had strong profitability gains on its second consecutive quarterly increase in daily shipping rates," said Mr. Mitchell, "while our European business experienced normal seasonality as well as continued difficult macroeconomic conditions." Worldwide computer products sales of $632 million decreased 8% sequentially in this seasonally weak quarter and increased 1% year-over-year. The sequential decline in computer products sales was generally consistent with prior years. "Our North American Computer Products business achieved its 10th consecutive quarter of year-over-year sales increases as well as its 17th consecutive quarter of year-over-year growth in operating income," added Mr. Mitchell. The company's results for the third quarter of 2005 and 2004 include a number of items outlined below that impact their comparability: -- During the third quarter of 2005, the company repurchased, through a series of transactions, an additional $57.8 million accreted value of its zero coupon convertible debentures due in 2021, which could have been initially put to the company in February 2006 ("convertible debentures"). The related loss on the repurchases, including the premium paid and the write-off of related deferred financing costs, aggregated $1.1 million ($.7 million net of related taxes or $.01 per share). -- During the third quarter of 2005, in connection with previously announced restructuring initiatives, the company recorded a net charge of $.1 million (a gain of $.4 million net of related taxes or $.01 per share). Included in the restructuring charge is a gain on the sale of property that, because of existing capital tax loss carryforwards, will not be taxed. -- During the third quarter of 2004, the company recorded an acquisition indemnification credit of $9.7 million ($.09 and $.08 per share on a basic and diluted basis, respectively) resulting from the settlement of a claim related to its French subsidiary, Tekelec SA. -- During the third quarter of 2004, the company recorded a net restructuring charge of $.4 million ($.2 million net of related taxes). -- During the third quarter of 2004, the company repurchased $19.8 million accreted value of its convertible debentures. The related loss on the repurchase, including the premium paid and the write-off of related deferred financing costs, aggregated $.9 million ($.5 million net of related taxes or $.01 per share). -- During the third quarter of 2004, the company recorded a loss on the write-down of an investment security of $1.3 million ($.01 per share) for an other-than-temporary decline in the fair value of this investment in accordance with Statement of Financial Accounting Standards No. 115. "Looking to the fourth quarter, we fully expect our computer products business to experience a combination of continued organic growth and traditional seasonality. In the components business, we expect normal seasonality in Asia/Pacific, stability in North America with an increase in daily shipping rates offset by fewer shipping days, and continued weak business conditions in Europe," said Paul J. Reilly, Senior Vice President and Chief Financial Officer. "Based upon all of the information known to us today, we expect fourth quarter revenues to be between $2.8 billion and $2.9 billion, with worldwide component sales between $2.05 billion and $2.1 billion and worldwide computer product sales between $750 million and $800 million. We expect earnings per share on a diluted basis, excluding charges, in the range of $.56 to $.59 per share," said Mr. Reilly. "We continued to execute well and achieve our overarching objectives of growing earnings faster than sales, growing sales faster than the market, and being cash positive on a consistent basis," said Mr. Mitchell. "We remain focused on our goal to deliver premium investment results to our shareholders," added Mr. Mitchell. NINE MONTH RESULTS Arrow's net income for the first nine months of 2005 was $179.2 million ($1.53 and $1.48 per share on a basic and diluted basis, respectively) on sales of $8.2 billion, compared with net income of $159.8 million ($1.42 and $1.36 per share on a basic and diluted basis, respectively) on sales of $7.9 billion in the first nine months of 2004. Year-to-date cash flow from operations of $296.1 million compares to a use of $107.9 million for the first nine months of 2004. Net income for the first nine months of 2005 includes the aforementioned restructuring charges and charges associated with the loss on prepayment of debt. Additionally, during the first six months of 2005, restructuring charges of $8.9 million ($5.5 million net of related taxes or $.04 and $.03 per share on a basic and diluted basis, respectively), a loss of $2.1 million ($1.2 million net of related taxes or $.01 per share) on the repurchase of $94.0 million accreted value of its convertible debentures, an acquisition indemnification credit of $1.7 million ($1.3 million net of related taxes or $.01 per share on a basic basis), and a write-down of an investment of $3.0 million ($.03 per share) were recorded. Net income for the first nine months of 2004 includes the aforementioned acquisition indemnification credit, restructuring charges, a charge associated with the loss on prepayment of debt, and a write-down of an investment. Additionally, during the first six months of 2004, restructuring charges of $7.6 million ($4.6 million net of related taxes or $.04 per share) were recorded. Also, the company repurchased, through a series of transactions, $250.0 million principal amount of its 8.7% senior notes due in October 2005 and $233.6 million accreted value of its convertible debentures. As a result of these repurchases, a loss on prepayment of debt of $30.8 million ($18.4 million net of related taxes or $.17 and $.15 per share on a basic and diluted basis, respectively) was recorded. Excluding these items, net income would have been $187.9 million ($1.60 and $1.55 per share on a basic and diluted basis, respectively) and $175.1 million ($1.56 and $1.48 per share on a basic and diluted basis, respectively) for the first nine months of 2005 and 2004, respectively. Arrow Electronics is a major global provider of products, services, and solutions to industrial and commercial users of electronic components and computer products. Headquartered in Melville, New York, Arrow serves as a supply channel partner for nearly 600 suppliers and 150,000 original equipment manufacturers, contract manufacturers, and commercial customers through a global network of more than 200 locations in 53 countries and territories. Certain Non-GAAP Financial Information In addition to disclosing results that are determined in accordance with Generally Accepted Accounting Principles ("GAAP"), the company provides certain non-GAAP financial information relating to operating income, net income and net income per basic and diluted share, each as adjusted for certain charges, credits and losses that the company believes impact the comparability of its results of operations. These charges, credits and losses arise out of the company's acquisitions of other companies, the company's efficiency enhancement initiatives, the prepayment of debt, and the write-down of investments. Reconciliations of the company's non-GAAP financial information to GAAP are set forth in the table below. The company believes that such non-GAAP financial information is useful to investors to assist in assessing and understanding the company's operating performance and underlying trends in the company's business because management considers the charges, credits and losses referred to above to be outside the company's core operating results. This non-GAAP financial information is among the primary indicators management uses as a basis for evaluating the company's financial and operating performance. In addition, the company's Board of Directors may use this non-GAAP financial information in evaluating management performance and setting management compensation. The presentation of this additional non-GAAP financial information is not meant to be considered in isolation or as a substitute for, or alternative to, operating income, net income and net income per basic and diluted share determined in accordance with GAAP. Analysis of results and outlook on a non-GAAP basis should be used as a complement to, and in conjunction with, data presented in accordance with GAAP. ARROW ELECTRONICS, INC. EARNINGS RECONCILIATION (In thousands except per share data) Three Months Ended Nine Months Ended September 30, September 30, -------------------- -------------------- 2005 2004 2005 2004 --------- --------- --------- --------- Operating income, as reported $118,238 $115,047 $345,489 $340,743 Acquisition indemnification credit - (9,676) (1,672) (9,676) Restructuring charges 112 407 8,997 7,984 --------- --------- --------- --------- Operating income, as adjusted $118,350 $105,778 $352,814 $339,051 ========= ========= ========= ========= Net income, as reported $ 63,523 $ 63,397 $179,163 $159,781 Acquisition indemnification credit - (9,676) (1,267) (9,676) Restructuring charges (gain) (442) 175 5,016 4,756 Loss on prepayment of debt 672 545 1,919 18,952 Write-down of investments - 1,318 3,019 1,318 --------- --------- --------- --------- Net income, as adjusted $ 63,753 $ 55,759 $187,850 $175,131 ========= ========= ========= ========= Net income per basic share, as reported $ .54 $ .55 $ 1.53 $ 1.42 Acquisition indemnification credit - (.09) (.01) (.09) Restructuring charges (gain) (.01) - .03 .05 Loss on prepayment of debt .01 .01 .02 .17 Write-down of investments - .01 .03 .01 --------- --------- --------- --------- Net income per basic share, as adjusted $ .54 $ .48 $ 1.60 $ 1.56 ========= ========= ========= ========= Net income per diluted share, as reported(a) $ .52 $ .52 $ 1.48 $ 1.36 Acquisition indemnification credit - (.08) - (.08) Restructuring charges (gain) (.01) - .03 .04 Loss on prepayment of debt .01 .01 .01 .15 Write-down of investments - .01 .03 .01 --------- --------- --------- --------- Net income per diluted share, as adjusted $ .52 $ .46 $ 1.55 $ 1.48 ========= ========= ========= ========= (a) In computing net income per diluted share for the three and nine months ended September 30, 2005, net income was increased by $1,059 and $4,285, respectively, for interest (net of taxes) related to the zero coupon convertible debentures ("convertible debentures") which are dilutive common stock equivalents. In addition, the diluted average number of shares outstanding for the three and nine months ended September 30, 2005 includes 3,844 shares and 5,412 shares, respectively, related to the convertible debentures. In computing net income per diluted share for the three and nine months ended September 30, 2004, net income was increased by $2,143 and $9,085, respectively, for interest (net of taxes) related to the convertible debentures which are dilutive common stock equivalents. In addition, the diluted average number of shares outstanding for the three and nine months ended September 30, 2004 includes 8,331 shares and 10,558 shares, respectively, related to the convertible debentures. Safe Harbor 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 not limited to: industry conditions, changes in product supply, pricing, and customer demand, competition, other vagaries in the computer products and electronic components markets, changes in relationships with key suppliers, the effects of additional actions taken to lower costs, the ability of the company to generate additional cash flow and the other risks described from time to time in the company's reports to the Securities and Exchange Commission (including the company's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q). Forward-looking statements are those statements, which are not statements of historical fact. You can identify these forward-looking statements by forward-looking words such as "expects," "anticipates," "intends," "plans," "may," "will," "believes," "seeks," "estimates," and similar expressions. Shareholders and other readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. The company undertakes no obligation to update publicly or revise any forward-looking statements. ARROW ELECTRONICS, INC. CONSOLIDATED STATEMENT OF OPERATIONS (In thousands except per share data) Three Months Ended Nine Months Ended September 30, September 30, ---------------------- ---------------------- 2005 2004 2005 2004 ---------- ---------- ---------- ---------- Sales $2,710,168 $2,619,143 $8,204,586 $7,923,391 ---------- ---------- ---------- ---------- Costs and expenses: Cost of products sold 2,290,912 2,198,980 6,911,768 6,628,974 Selling, general and administrative expenses 290,376 301,973 903,454 913,865 Depreciation and amortization 10,530 12,412 36,550 41,501 Acquisition indemnification credit - (9,676) (1,672) (9,676) Restructuring charges 112 407 8,997 7,984 ---------- ---------- ---------- ---------- 2,591,930 2,504,096 7,859,097 7,582,648 ---------- ---------- ---------- ---------- Operating income 118,238 115,047 345,489 340,743 Equity in earnings of affiliated companies 1,373 1,566 3,013 2,912 Loss on prepayment of debt 1,123 911 3,209 31,692 Write-down of investments - 1,318 3,019 1,318 Interest expense, net 22,291 24,350 70,766 79,563 ---------- ---------- ---------- ---------- Income before income taxes and minority interest 96,197 90,034 271,508 231,082 Provision for income taxes 32,399 26,392 91,770 70,474 ---------- ---------- ---------- ---------- Income before minority interest 63,798 63,642 179,738 160,608 Minority interest 275 245 575 827 ---------- ---------- ---------- ---------- Net income $ 63,523 $ 63,397 $ 179,163 $ 159,781 ========== ========== ========== ========== Net income per share: Basic $ .54 $ .55 $ 1.53 $ 1.42 ========== ========== ========== ========== Diluted $ .52 $ .52 $ 1.48 $ 1.36 ========== ========== ========== ========== Average number of shares outstanding: Basic 118,594 115,175 117,265 112,217 Diluted 124,162 124,862 124,010 124,500 This interim report is subject to independent audit at year-end. ARROW ELECTRONICS, INC. CONSOLIDATED BALANCE SHEET (In thousands) September 30, December 31, 2005 2004 ----------- ----------- ASSETS Current assets: Cash and cash equivalents $ 653,667 $ 305,294 Short-term investments - 158,600 ----------- ----------- Total cash and short-term investments 653,667 463,894 Accounts receivable, net 2,068,476 1,984,122 Inventories 1,382,718 1,486,478 Prepaid expenses and other assets 107,629 93,039 ----------- ----------- Total current assets 4,212,490 4,027,533 ----------- ----------- Property, plant and equipment at cost: Land 35,951 40,340 Buildings and improvements 156,198 182,610 Machinery and equipment 412,593 420,455 ----------- ----------- 604,742 643,405 Less: accumulated depreciation and amortization (383,732) (380,422) ----------- ----------- Property, plant and equipment, net 221,010 262,983 ----------- ----------- Investments in affiliated companies 36,580 34,302 Cost in excess of net assets of companies acquired 926,689 974,285 Other assets 188,019 209,998 ----------- ----------- Total assets $5,584,788 $5,509,101 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $1,389,363 $1,261,971 Accrued expenses 404,620 395,955 Short-term borrowings, including current portion of long-term debt 173,572 8,462 ----------- ----------- Total current liabilities 1,967,555 1,666,388 ----------- ----------- Long-term debt 1,154,900 1,465,880 Other liabilities 177,840 182,647 Shareholders' equity: Common stock, par value $1: Authorized - 160,000 shares in 2005 and 2004 Issued - 119,740 shares in 2005 and 117,675 in 2004 119,740 117,675 Capital in excess of par value 846,524 797,828 Retained earnings 1,324,969 1,145,806 Foreign currency translation adjustment 14,289 190,595 ----------- ----------- 2,305,522 2,251,904 Less: Treasury stock (265 and 1,374 shares in 2005 and 2004, respectively), at cost (7,093) (36,735) Unamortized employee stock awards (3,007) (3,738) Other (10,929) (17,245) ----------- ----------- Total shareholders' equity 2,284,493 2,194,186 ----------- ----------- Total liabilities and shareholders' equity $5,584,788 $5,509,101 =========== =========== This interim report is subject to independent audit at year-end. ARROW ELECTRONICS, INC. CONSOLIDATED STATEMENT OF CASH FLOWS (In thousands) Nine Months Ended September 30, ---------------------- 2005 2004 ---------- ---------- Cash flows from operating activities: Net income $ 179,163 $ 159,781 ---------- ---------- Adjustments to reconcile net income to net cash provided by (used for) operations: Minority interest 575 827 Depreciation and amortization 36,550 41,501 Accretion of discount on convertible debentures 7,166 13,459 Amortization of deferred financing costs and discount on notes 2,796 3,867 Amortization of restricted stock and performance awards 5,209 6,594 Equity in earnings of affiliated companies (3,013) (2,912) Deferred income taxes 94 2,060 Acquisition indemnification credit, net of taxes (1,267) (9,676) Restructuring charges, net of taxes 5,016 4,756 Loss on prepayment of debt, net of taxes 1,919 18,952 Write-down of investments 3,019 1,318 Change in assets and liabilities, net of effects of acquired businesses: Accounts receivable (152,656) (146,519) Inventories 57,221 (197,096) Prepaid expenses and other assets (5,072) (492) Accounts payable 156,910 (32,498) Accrued expenses 1,977 5,636 Other 447 22,532 ---------- ---------- Net cash provided by (used for) operating activities 296,054 (107,910) ---------- ---------- Cash flows from investing activities: Acquisition of property, plant and equipment, net (19,789) (16,701) Proceeds from sale of facilities 18,353 8,616 Cash consideration paid for acquired businesses (24,624) (34,725) Proceeds from notes receivable 1,113 8,333 Purchase of short-term investments (230,456) (203,486) Proceeds from sale of short-term investments 389,056 203,486 Other 3,711 (140) ---------- ---------- Net cash provided by (used for) investing activities 137,364 (34,617) ---------- ---------- Cash flows from financing activities: Change in short-term borrowings 9,036 (29,827) Change in long-term debt (2,037) (1,904) Repurchase of senior notes - (268,399) Repurchase of convertible debentures (152,449) (262,172) Proceeds from common stock offering - 312,789 Proceeds from exercise of stock options 69,355 13,900 ---------- ---------- Net cash used for financing activities (76,095) (235,613) ---------- ---------- Effect of exchange rate changes on cash (8,950) 3,294 ---------- ---------- Net increase (decrease) in cash and cash equivalents 348,373 (374,846) Cash and cash equivalents at beginning of period 305,294 612,404 ---------- ---------- Cash and cash equivalents at end of period $ 653,667 $ 237,558 ========== ========== This interim report is subject to independent audit at year-end. ARROW ELECTRONICS, INC. SEGMENT INFORMATION (In thousands) Three Months Ended Nine Months Ended September 30, September 30, ----------------------- ----------------------- 2005 2004 2005 2004 ---------- ----------- ---------- ----------- Sales: Components $2,078,106 $1,991,625 $6,249,784 $ 6,068,807 Computer Products 632,062 627,518 1,954,802 1,854,584 ---------- ----------- ---------- ----------- Consolidated $2,710,168 $2,619,143 $8,204,586 $ 7,923,391 ========== =========== ========== =========== Operating income: Components $ 105,981 $ 98,418 $ 307,278 $ 328,740 Computer Products 35,845 30,918 112,202 83,230 Corporate (a) (23,588) (14,289) (73,991) (71,227) ---------- ----------- ---------- ----------- Consolidated $ 118,238 $ 115,047 $ 345,489 $ 340,743 ========== =========== ========== =========== (a) Includes an acquisition indemnification credit of $1.7 million for the nine months ended September 30, 2005, as well as restructuring charges of $.1 million and $9.0 million for the three and nine months ended September 30, 2005, respectively. Also included is an acquisition indemnification credit of $9.7 million for the three and nine months ended September 30, 2004, and restructuring charges of $.4 million and $8.0 million for the three and nine months ended September 30, 2004, respectively. This interim report is subject to independent audit at year-end. CONTACT: Arrow Electronics, Inc. Ira M. Birns Vice President and Treasurer 631-847-1657 or Paul J. Reilly Senior Vice President and Chief Financial Officer 631-847-1872 or Media: Jacqueline F. Strayer Vice President, Corporate Communications 631-847-2101 -----END PRIVACY-ENHANCED MESSAGE-----