ARROW ELECTRONICS, INC. 9201 E. DRY CREEK ROAD CENTENNIAL, CO 80112 303-824-4000 | NEWS |
1 |
• | Consolidated sales of $6.225 billion to $6.625 billion, with global components sales of $4.55 billion to $4.75 billion, and global enterprise computing solutions sales of $1.675 billion to $1.875 billion |
• | Earnings per share on a diluted basis of $.99 to $1.29, and earnings per share on a diluted basis, excluding certain items1 of $1.29 to $1.39 per share, assuming an average tax rate of approximately 24.5 percent compared to the long-term range of 23 to 25 percent, and average diluted shares outstanding of 82 million |
• | Interest expense of approximately $52 million |
• | Expecting average USD-to-Euro exchange rate of $1.12 to €1; changes in foreign currencies to negatively impact sales growth by approximately $30 million, and earnings per share on a diluted basis by $.01 compared to the first quarter of 2019 |
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3 |
ARROW ELECTRONICS, INC. | |||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||
(In thousands except per share data) | |||||||||||||||
Quarter Ended | Year Ended | ||||||||||||||
December 31, 2019 | December 31, 2018 | December 31, 2019 | December 31, 2018 | ||||||||||||
(Unaudited) | (Unaudited) | ||||||||||||||
Sales | $ | 7,338,190 | $ | 7,918,182 | $ | 28,916,847 | $ | 29,676,768 | |||||||
Cost of sales | 6,515,247 | 6,942,812 | 25,618,466 | 25,975,856 | |||||||||||
Gross profit | 822,943 | 975,370 | 3,298,381 | 3,700,912 | |||||||||||
Operating expenses: | |||||||||||||||
Selling, general, and administrative expenses | 513,878 | 583,943 | 2,191,612 | 2,303,051 | |||||||||||
Depreciation and amortization | 50,051 | 47,183 | 189,790 | 186,384 | |||||||||||
Loss on disposition of businesses, net | 5,813 | — | 21,252 | 3,604 | |||||||||||
Impairments | — | — | 698,246 | — | |||||||||||
Restructuring, integration, and other charges | 15,093 | 9,864 | 89,785 | 60,361 | |||||||||||
584,835 | 640,990 | 3,190,685 | 2,553,400 | ||||||||||||
Operating income | 238,108 | 334,380 | 107,696 | 1,147,512 | |||||||||||
Equity in earnings (losses) of affiliated companies | (610 | ) | (1,524 | ) | (2,765 | ) | (2,332 | ) | |||||||
Gain (loss) on investments, net | 3,967 | (10,221 | ) | 11,831 | (14,166 | ) | |||||||||
Employee benefit plan expense | (21,500 | ) | (3,086 | ) | (24,849 | ) | (6,870 | ) | |||||||
Interest and other financing expense, net | (50,317 | ) | (54,584 | ) | (203,743 | ) | (214,771 | ) | |||||||
Income (loss) before income taxes | 169,648 | 264,965 | (111,830 | ) | 909,373 | ||||||||||
Provision for income taxes | 57,460 | 32,474 | 88,338 | 187,799 | |||||||||||
Consolidated net income (loss) | 112,188 | 232,491 | (200,168 | ) | 721,574 | ||||||||||
Noncontrolling interests | 175 | 1,838 | 3,919 | 5,379 | |||||||||||
Net income (loss) attributable to shareholders | $ | 112,013 | $ | 230,653 | $ | (204,087 | ) | $ | 716,195 | ||||||
Net income (loss) per share: | |||||||||||||||
Basic | $ | 1.37 | $ | 2.66 | $ | (2.44 | ) | $ | 8.19 | ||||||
Diluted | $ | 1.36 | $ | 2.63 | $ | (2.44 | ) | $ | 8.10 | ||||||
Weighted average shares outstanding: | |||||||||||||||
Basic | 81,613 | 86,559 | 83,568 | 87,476 | |||||||||||
Diluted | 82,493 | 87,561 | 83,568 | 88,444 |
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ARROW ELECTRONICS, INC. | |||||||
CONSOLIDATED BALANCE SHEETS | |||||||
(In thousands except par value) | |||||||
December 31, 2019 | December 31, 2018 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 300,103 | $ | 509,327 | |||
Accounts receivable, net | 8,482,687 | 8,945,463 | |||||
Inventories | 3,477,120 | 3,878,678 | |||||
Other current assets | 266,249 | 274,832 | |||||
Total current assets | 12,526,159 | 13,608,300 | |||||
Property, plant, and equipment, at cost: | |||||||
Land | 7,793 | 7,882 | |||||
Buildings and improvements | 173,370 | 158,712 | |||||
Machinery and equipment | 1,481,525 | 1,425,933 | |||||
1,662,688 | 1,592,527 | ||||||
Less: Accumulated depreciation and amortization | (859,578 | ) | (767,827 | ) | |||
Property, plant, and equipment, net | 803,110 | 824,700 | |||||
Investments in affiliated companies | 86,942 | 83,693 | |||||
Intangible assets, net | 271,903 | 372,644 | |||||
Goodwill | 2,061,322 | 2,624,690 | |||||
Other assets | 651,360 | 270,418 | |||||
Total assets | $ | 16,400,796 | $ | 17,784,445 | |||
LIABILITIES AND EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 7,046,221 | $ | 7,631,879 | |||
Accrued expenses | 880,507 | 912,292 | |||||
Short-term borrowings, including current portion of long-term debt | 331,431 | 246,257 | |||||
Total current liabilities | 8,258,159 | 8,790,428 | |||||
Long-term debt | 2,640,129 | 3,239,115 | |||||
Other liabilities | 636,115 | 378,536 | |||||
Equity: | |||||||
Shareholders' equity: | |||||||
Common stock, par value $1: | |||||||
Authorized – 160,000 shares in both 2019 and 2018 | |||||||
Issued – 125,424 shares in both 2019 and 2018 | 125,424 | 125,424 | |||||
Capital in excess of par value | 1,150,006 | 1,135,934 | |||||
Treasury stock (44,804 and 40,233 shares in 2019 and 2018, respectively), at cost | (2,332,548 | ) | (1,972,254 | ) | |||
Retained earnings | 6,131,248 | 6,335,335 | |||||
Accumulated other comprehensive loss | (262,211 | ) | (299,449 | ) | |||
Total shareholders' equity | 4,811,919 | 5,324,990 | |||||
Noncontrolling interests | 54,474 | 51,376 | |||||
Total equity | 4,866,393 | 5,376,366 | |||||
Total liabilities and equity | $ | 16,400,796 | $ | 17,784,445 |
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ARROW ELECTRONICS, INC. | |||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
(In thousands) | |||||||
(Unaudited) | |||||||
Quarter Ended | |||||||
December 31, 2019 | December 31, 2018 | ||||||
Cash flows from operating activities: | |||||||
Consolidated net income | $ | 112,188 | $ | 232,491 | |||
Adjustments to reconcile consolidated net income to net cash provided by operations: | |||||||
Depreciation and amortization | 50,051 | 47,183 | |||||
Amortization of stock-based compensation | 6,321 | 8,134 | |||||
Equity in (earnings) losses of affiliated companies | 610 | 1,524 | |||||
Deferred income taxes | 15,196 | (16,533 | ) | ||||
(Gain) loss on investment, net | (3,840 | ) | 10,221 | ||||
Loss on disposition of businesses, net | 5,813 | — | |||||
Pension settlement expense | 20,111 | — | |||||
Other | (155 | ) | 3,142 | ||||
Change in assets and liabilities, net of effects of acquired and disposed businesses: | |||||||
Accounts receivable | (578,059 | ) | (752,891 | ) | |||
Inventories | 40,448 | (162,825 | ) | ||||
Accounts payable | 827,614 | 764,726 | |||||
Accrued expenses | 43,649 | 96,946 | |||||
Other assets and liabilities | (45,145 | ) | 31,016 | ||||
Net cash provided by operating activities | 494,802 | 263,134 | |||||
Cash flows from investing activities: | |||||||
Proceeds from (cash paid on) disposition of businesses | (11,769 | ) | — | ||||
Acquisition of property, plant, and equipment | (30,111 | ) | (30,439 | ) | |||
Proceeds from sale of property, plant, and equipment | — | 5,421 | |||||
Cash paid for customer relationship intangible asset | (7,616 | ) | (20,000 | ) | |||
Other | (4,127 | ) | (2,500 | ) | |||
Net cash used for investing activities | (53,623 | ) | (47,518 | ) | |||
Cash flows from financing activities: | |||||||
Change in short-term and other borrowings | (20,794 | ) | 88,034 | ||||
Proceeds from (repayment of) long-term bank borrowings, net | (308,047 | ) | (114,120 | ) | |||
Proceeds from exercise of stock options | 5,201 | 900 | |||||
Repurchases of common stock | (100,009 | ) | (150,132 | ) | |||
Net cash used for financing activities | (423,649 | ) | (175,318 | ) | |||
Effect of exchange rate changes on cash | 20,319 | (5,162 | ) | ||||
Net increase in cash and cash equivalents | 37,849 | 35,136 | |||||
Cash and cash equivalents at beginning of period | 262,254 | 474,191 | |||||
Cash and cash equivalents at end of period | $ | 300,103 | $ | 509,327 |
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ARROW ELECTRONICS, INC. | |||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
(In thousands) | |||||||
Year Ended | |||||||
December 31, 2019 | December 31, 2018 | ||||||
Cash flows from operating activities: | |||||||
Consolidated net income (loss) | $ | (200,168 | ) | $ | 721,574 | ||
Adjustments to reconcile consolidated net income to net cash provided by operations: | |||||||
Depreciation and amortization | 189,790 | 186,384 | |||||
Amortization of stock-based compensation | 41,070 | 46,238 | |||||
Equity in (earnings) losses of affiliated companies | 2,765 | 2,332 | |||||
Deferred income taxes | (50,288 | ) | 1,236 | ||||
(Gain) loss on investment, net | (11,462 | ) | 14,166 | ||||
Loss on disposition of businesses, net | 21,252 | 3,604 | |||||
Pension settlement expense | 20,111 | 1,665 | |||||
Impairments | 698,246 | — | |||||
Other | 10,659 | 9,198 | |||||
Change in assets and liabilities, net of effects of acquired and disposed businesses: | |||||||
Accounts receivable | 338,849 | (1,007,308 | ) | ||||
Inventories | 383,058 | (618,875 | ) | ||||
Accounts payable | (521,575 | ) | 936,423 | ||||
Accrued expenses | (27,475 | ) | 112,123 | ||||
Other assets and liabilities | (36,837 | ) | (136,070 | ) | |||
Net cash provided by operating activities | 857,995 | 272,690 | |||||
Cash flows from investing activities: | |||||||
Cash consideration paid for acquired businesses, net of cash acquired | — | (331,563 | ) | ||||
Proceeds from (cash paid on) disposition of businesses | (13,094 | ) | 32,013 | ||||
Acquisition of property, plant, and equipment | (143,191 | ) | (135,336 | ) | |||
Proceeds from sale of property, plant and equipment | — | 5,421 | |||||
Cash paid for customer relationship intangible asset | (7,616 | ) | (20,000 | ) | |||
Other | (9,682 | ) | (13,500 | ) | |||
Net cash used for investing activities | (173,583 | ) | (462,965 | ) | |||
Cash flows from financing activities: | |||||||
Change in short-term and other borrowings | (113,923 | ) | 192,192 | ||||
Proceeds from (repayments of) long-term bank borrowings, net | (405,007 | ) | 306,635 | ||||
Redemption of notes | — | (300,000 | ) | ||||
Proceeds from exercise of stock options | 16,911 | 8,819 | |||||
Repurchases of common stock | (404,203 | ) | (243,305 | ) | |||
Other | (147 | ) | (1,174 | ) | |||
Net cash provided by (used for) financing activities | (906,369 | ) | (36,833 | ) | |||
Effect of exchange rate changes on cash | 12,733 | 6,352 | |||||
Net decrease in cash and cash equivalents | (209,224 | ) | (220,756 | ) | |||
Cash and cash equivalents at beginning of period | 509,327 | 730,083 | |||||
Cash and cash equivalents at end of period | $ | 300,103 | $ | 509,327 |
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ARROW ELECTRONICS, INC. | ||||||||||
NON-GAAP SALES RECONCILIATION | ||||||||||
(In thousands) | ||||||||||
(Unaudited) | ||||||||||
Quarter Ended | ||||||||||
December 31, 2019 | December 31, 2018 | % Change | ||||||||
Consolidated sales, as reported | $ | 7,338,190 | $ | 7,918,182 | (7.3 | )% | ||||
Impact of changes in foreign currencies | — | (65,384 | ) | |||||||
Impact of dispositions and wind down | (19,375 | ) | (118,184 | ) | ||||||
Consolidated sales, as adjusted | $ | 7,318,815 | $ | 7,734,614 | (5.4 | )% | ||||
Global components sales, as reported | $ | 4,738,993 | $ | 5,261,477 | (9.9 | )% | ||||
Impact of changes in foreign currencies | — | (40,608 | ) | |||||||
Impact of dispositions and wind down | (19,375 | ) | (102,965 | ) | ||||||
Global components sales, as adjusted | $ | 4,719,618 | $ | 5,117,904 | (7.8 | )% | ||||
Americas components sales, as reported | $ | 1,644,757 | $ | 2,021,033 | (18.6 | )% | ||||
Impact of changes in foreign currencies | — | (214 | ) | |||||||
Impact of dispositions and wind down | (19,239 | ) | (78,246 | ) | ||||||
Americas components sales, as adjusted | $ | 1,625,518 | $ | 1,942,573 | (16.3 | )% | ||||
Europe components sales, as reported | $ | 1,189,016 | $ | 1,407,429 | (15.5 | )% | ||||
Impact of changes in foreign currencies | — | (36,312 | ) | |||||||
Impact of dispositions and wind down | (136 | ) | (24,719 | ) | ||||||
Europe components sales, as adjusted | $ | 1,188,880 | $ | 1,346,398 | (11.7 | )% | ||||
Asia components sales, as reported | $ | 1,905,220 | $ | 1,833,015 | 3.9 | % | ||||
Impact of changes in foreign currencies | — | (4,082 | ) | |||||||
Asia components sales, as adjusted | $ | 1,905,220 | $ | 1,828,933 | 4.2 | % | ||||
Global ECS sales, as reported | $ | 2,599,197 | $ | 2,656,705 | (2.2 | )% | ||||
Impact of changes in foreign currencies | — | (24,776 | ) | |||||||
Impact of dispositions | — | (15,219 | ) | |||||||
Global ECS sales, as adjusted | $ | 2,599,197 | $ | 2,616,710 | (0.7 | )% | ||||
Europe ECS sales, as reported | $ | 959,449 | $ | 954,343 | 0.5 | % | ||||
Impact of changes in foreign currencies | — | (20,834 | ) | |||||||
Impact of dispositions | — | (15,219 | ) | |||||||
Europe ECS sales, as adjusted | $ | 959,449 | $ | 918,290 | 4.5 | % | ||||
Americas ECS sales, as reported | $ | 1,639,748 | $ | 1,702,362 | (3.7 | )% | ||||
Impact of changes in foreign currencies | — | (3,942 | ) | |||||||
Americas ECS sales, as adjusted | $ | 1,639,748 | $ | 1,698,420 | (3.5 | )% |
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ARROW ELECTRONICS, INC. | ||||||||||
NON-GAAP SALES RECONCILIATION | ||||||||||
(In thousands) | ||||||||||
(Unaudited) | ||||||||||
Year Ended | ||||||||||
December 31, 2019 | December 31, 2018 | % Change | ||||||||
Consolidated sales, as reported | $ | 28,916,847 | $ | 29,676,768 | (2.6 | )% | ||||
Impact of changes in foreign currencies | — | (513,217 | ) | |||||||
Impact of dispositions and wind down | (251,614 | ) | (496,108 | ) | ||||||
Consolidated sales, as adjusted | $ | 28,665,233 | $ | 28,667,443 | flat | |||||
Global components sales, as reported | $ | 20,250,735 | $ | 20,856,851 | (2.9 | )% | ||||
Impact of changes in foreign currencies | — | (337,828 | ) | |||||||
Impact of dispositions and wind down | (240,473 | ) | (415,707 | ) | ||||||
Global components sales, as adjusted | $ | 20,010,262 | $ | 20,103,316 | (0.5 | )% | ||||
Americas components sales, as reported | $ | 7,167,295 | $ | 7,816,533 | (8.3 | )% | ||||
Impact of changes in foreign currencies | — | (4,496 | ) | |||||||
Impact of dispositions and wind down | (189,963 | ) | (310,198 | ) | ||||||
Americas components sales, as adjusted | $ | 6,977,332 | $ | 7,501,839 | (7.0 | )% | ||||
Europe components sales, as reported | $ | 5,412,379 | $ | 5,733,222 | (5.6 | )% | ||||
Impact of changes in foreign currencies | — | (292,551 | ) | |||||||
Impact of dispositions and wind down | (50,510 | ) | (105,509 | ) | ||||||
Europe components sales, as adjusted | $ | 5,361,869 | $ | 5,335,162 | 0.5 | % | ||||
Asia components sales, as reported | $ | 7,671,061 | $ | 7,307,096 | 5.0 | % | ||||
Impact of changes in foreign currencies | — | (40,781 | ) | |||||||
Asia components sales, as adjusted | $ | 7,671,061 | $ | 7,266,315 | 5.6 | % | ||||
Global ECS sales, as reported | $ | 8,666,112 | $ | 8,819,917 | (1.7 | )% | ||||
Impact of changes in foreign currencies | — | (175,389 | ) | |||||||
Impact of dispositions | (11,141 | ) | (80,401 | ) | ||||||
Global ECS sales, as adjusted | $ | 8,654,971 | $ | 8,564,127 | 1.1 | % | ||||
Europe ECS sales, as reported | $ | 3,034,087 | $ | 3,077,391 | (1.4 | )% | ||||
Impact of changes in foreign currencies | — | (145,468 | ) | |||||||
Impact of dispositions | (11,141 | ) | (52,908 | ) | ||||||
Europe ECS sales, as adjusted | $ | 3,022,946 | $ | 2,879,015 | 5.0 | % | ||||
Americas ECS sales, as reported | $ | 5,632,025 | $ | 5,742,526 | (1.9 | )% | ||||
Impact of changes in foreign currencies | — | (29,921 | ) | |||||||
Impact of dispositions | — | (27,493 | ) | |||||||
Americas ECS sales, as adjusted | $ | 5,632,025 | $ | 5,685,112 | (0.9 | )% |
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ARROW ELECTRONICS, INC. | |||||||||||||||||||||||||||
NON-GAAP EARNINGS RECONCILIATION | |||||||||||||||||||||||||||
(In thousands except per share data) | |||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||
Three months ended December 31, 2019 | |||||||||||||||||||||||||||
Reported GAAP measure | Intangible amortization expense | Restructuring & Integration charges | AFS Write Downs | Digital Write Downs | Impact of Wind Down(6) | Tax adjustments(7) | Other(1) | Non-GAAP measure | |||||||||||||||||||
Sales | $ | 7,338,190 | $ | — | $ | — | $ | — | $ | — | $ | (19,375 | ) | $ | — | $ | — | $ | 7,318,815 | ||||||||
Gross Profit | 822,943 | — | — | — | 1,117 | 5,388 | — | — | 829,448 | ||||||||||||||||||
Operating income | 238,108 | 14,311 | 16,350 | 2,850 | 1,117 | 10,912 | — | 1,002 | 284,650 | ||||||||||||||||||
Income before income taxes | 169,648 | 14,311 | 16,350 | 2,850 | 1,117 | 10,942 | — | 17,919 | 233,137 | ||||||||||||||||||
Provision for income taxes | 57,460 | 4,050 | 3,042 | 607 | 156 | (18,380 | ) | 1,806 | 2,700 | 51,441 | |||||||||||||||||
Consolidated net income | 112,188 | 10,261 | 13,308 | 2,243 | 961 | 29,322 | (1,806 | ) | 15,219 | 181,696 | |||||||||||||||||
Noncontrolling interests | 175 | 138 | — | — | — | — | — | — | 313 | ||||||||||||||||||
Net income attributable to shareholders | $ | 112,013 | $ | 10,123 | $ | 13,308 | $ | 2,243 | $ | 961 | $ | 29,322 | $ | (1,806 | ) | $ | 15,219 | $ | 181,383 | ||||||||
Net income per diluted share(5) | $ | 1.36 | $ | 0.12 | $ | 0.16 | $ | 0.03 | $ | 0.01 | $ | 0.36 | $ | (0.02 | ) | $ | 0.18 | $ | 2.20 | ||||||||
Effective tax rate | 33.9 | % | 22.1 | % | |||||||||||||||||||||||
Three months ended December 31, 2018 | |||||||||||||||||||||||||||
Reported GAAP measure | Intangible amortization expense | Restructuring & Integration charges | AFS Write Downs | Digital Write Downs | Impact of Wind Down(6) | Tax adjustments(7) | Other(2) | Non-GAAP measure | |||||||||||||||||||
Sales | $ | 7,918,182 | $ | — | $ | — | $ | — | $ | — | $ | (102,965 | ) | $ | — | $ | — | $ | 7,815,217 | ||||||||
Gross Profit | 975,370 | — | — | — | — | (16,947 | ) | — | — | 958,423 | |||||||||||||||||
Operating income | 334,380 | 9,493 | 11,126 | — | — | 4,471 | — | — | 359,470 | ||||||||||||||||||
Income before income taxes | 264,965 | 9,493 | 11,126 | — | — | 4,114 | — | 11,886 | 301,584 | ||||||||||||||||||
Provision for income taxes | 32,474 | 2,772 | 4,786 | — | — | 1,635 | 28,323 | 3,025 | 73,015 | ||||||||||||||||||
Consolidated net income | 232,491 | 6,721 | 6,340 | — | — | 2,479 | (28,323 | ) | 8,861 | 228,569 | |||||||||||||||||
Noncontrolling interests | 1,838 | 142 | — | — | — | — | — | — | 1,980 | ||||||||||||||||||
Net income attributable to shareholders | $ | 230,653 | $ | 6,579 | $ | 6,340 | $ | — | $ | — | $ | 2,479 | $ | (28,323 | ) | $ | 8,861 | $ | 226,589 | ||||||||
Net income per diluted share(5) | $ | 2.63 | $ | 0.08 | $ | 0.07 | $ | — | $ | — | $ | 0.03 | $ | (0.32 | ) | $ | 0.10 | $ | 2.59 | ||||||||
Effective tax rate | 12.3 | % | 24.2 | % |
10 |
NON-GAAP EARNINGS RECONCILIATION | ||||||||||||||||||||||||||||||
(In thousands except per share data) | ||||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||
Year ended December 31, 2019 | ||||||||||||||||||||||||||||||
Reported GAAP measure | Intangible amortization expense | Restructuring & Integration charges | AFS Write Downs | Digital Write Downs | Impairments(4) | Impact of Wind Down(6) | Tax adjustments(7) | Other(1) | Non-GAAP measure | |||||||||||||||||||||
Sales | $ | 28,916,847 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | (240,473 | ) | $ | — | $ | — | $ | 28,676,374 | |||||||||
Gross Profit | 3,298,381 | — | — | 1,868 | 22,332 | — | (1,975 | ) | — | — | 3,320,606 | |||||||||||||||||||
Operating income | 107,696 | 42,383 | 78,429 | 18,037 | 22,332 | 623,796 | 162,244 | — | 1,868 | 1,056,785 | ||||||||||||||||||||
Income before income taxes | (111,830 | ) | 42,383 | 78,429 | 18,037 | 22,332 | 623,796 | 162,356 | — | 10,921 | 846,424 | |||||||||||||||||||
Provision for income taxes | 88,338 | 11,913 | 19,540 | 4,339 | 5,390 | 64,246 | 12,631 | (1,696 | ) | 750 | 205,451 | |||||||||||||||||||
Consolidated net income | (200,168 | ) | 30,470 | 58,889 | 13,698 | 16,942 | 559,550 | 149,725 | 1,696 | 10,171 | 640,973 | |||||||||||||||||||
Noncontrolling interests | 3,919 | 558 | — | — | — | — | — | — | — | 4,477 | ||||||||||||||||||||
Net income attributable to shareholders | $ | (204,087 | ) | $ | 29,912 | $ | 58,889 | $ | 13,698 | $ | 16,942 | $ | 559,550 | $ | 149,725 | $ | 1,696 | $ | 10,171 | $ | 636,496 | |||||||||
Net income per diluted share(5) | $ | (2.44 | ) | $ | 0.36 | $ | 0.70 | $ | 0.16 | $ | 0.20 | $ | 6.70 | $ | 1.79 | $ | 0.02 | $ | 0.12 | $ | 7.55 | |||||||||
Effective tax rate | (79.0 | )% | 24.3 | % | ||||||||||||||||||||||||||
Year ended December 31, 2018 | ||||||||||||||||||||||||||||||
Reported GAAP measure | Intangible amortization expense | Restructuring & Integration charges | AFS Write Downs | Digital Write Downs | Impairments | Impact of Wind Down(6) | Tax adjustments(7) | Other(3) | Non-GAAP measure | |||||||||||||||||||||
Sales | $ | 29,676,768 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | (415,707 | ) | $ | — | $ | — | $ | 29,261,061 | |||||||||
Gross Profit | 3,700,912 | — | — | — | — | — | (71,091 | ) | — | — | 3,629,821 | |||||||||||||||||||
Operating income | 1,147,512 | 38,215 | 49,297 | — | — | — | 19,910 | — | 3,604 | 1,258,538 | ||||||||||||||||||||
Income before income taxes | 909,373 | 38,215 | 49,297 | — | — | — | 19,675 | — | 19,435 | 1,035,995 | ||||||||||||||||||||
Provision for income taxes | 187,799 | 10,782 | 14,815 | — | — | — | 6,031 | 28,323 | 4,678 | 252,428 | ||||||||||||||||||||
Consolidated net income | 721,574 | 27,433 | 34,482 | — | — | — | 13,644 | (28,323 | ) | 14,757 | 783,567 | |||||||||||||||||||
Noncontrolling interests | 5,379 | 589 | — | — | — | — | — | — | — | 5,968 | ||||||||||||||||||||
Net income attributable to shareholders | $ | 716,195 | $ | 26,844 | $ | 34,482 | $ | — | $ | — | $ | — | $ | 13,644 | $ | (28,323 | ) | $ | 14,757 | 777,599 | ||||||||||
Net income per diluted share(5) | $ | 8.10 | $ | 0.30 | $ | 0.39 | $ | — | $ | — | $ | — | $ | 0.15 | $ | (0.32 | ) | $ | 0.17 | $ | 8.79 | |||||||||
Effective tax rate | 20.7 | % | 24.4 | % | ||||||||||||||||||||||||||
(1) Other includes loss on disposition of businesses, net, gain (loss) on investments, net, interest related to uncertain tax position related to the Tax Act and pension settlement. | ||||||||||||||||||||||||||||||
(2) Other includes gain (loss) on investments, net, and pension settlement. | ||||||||||||||||||||||||||||||
(3) Other includes loss on disposition of businesses, net, gain (loss) on investments, net, and pension settlement. | ||||||||||||||||||||||||||||||
(4) Impairments include goodwill impairments of $570,175, tradename impairments of $46,000, and $7,621 in impairment charges related to various other long-lived assets. | ||||||||||||||||||||||||||||||
(5) For the year ended December 31, 2019, the non-GAAP net income per diluted share calculation includes 752 thousand shares that were excluded from the GAAP net income per diluted share calculation. Additionally, in all periods presented the sum of the components for diluted EPS, as adjusted may not agree to totals, as presented, due to rounding. | ||||||||||||||||||||||||||||||
(6) Amounts for restructuring, integration, and other charges, identifiable intangible asset amortization, loss on disposition of businesses, net, certain tax adjustments, and impairments related to the personal computer and mobility asset disposition business are included in “impact of wind down” above. | ||||||||||||||||||||||||||||||
(7) Includes income tax expense related to repatriation of foreign earnings and the Tax Act. |
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ARROW ELECTRONICS, INC. | |||||||||||||||
SEGMENT INFORMATION | |||||||||||||||
(In thousands) | |||||||||||||||
(Unaudited) | |||||||||||||||
Quarter Ended | Year Ended | ||||||||||||||
December 31, 2019 | December 31, 2018 | December 31, 2019 | December 31, 2018 | ||||||||||||
Sales: | |||||||||||||||
Global components | $ | 4,738,993 | $ | 5,261,477 | $ | 20,250,735 | $ | 20,856,851 | |||||||
Global ECS | 2,599,197 | 2,656,705 | 8,666,112 | 8,819,917 | |||||||||||
Consolidated | $ | 7,338,190 | $ | 7,918,182 | $ | 28,916,847 | $ | 29,676,768 | |||||||
Operating income (loss): | |||||||||||||||
Global components | $ | 149,794 | $ | 252,313 | $ | (10,199 | ) | $ | 1,007,638 | ||||||
Global ECS | 148,711 | 152,195 | 426,192 | 427,605 | |||||||||||
Corporate (a) | (60,397 | ) | (70,128 | ) | (308,297 | ) | (287,731 | ) | |||||||
Consolidated | $ | 238,108 | $ | 334,380 | $ | 107,696 | $ | 1,147,512 |
(a) | Includes restructuring, integration, and other charges of $16.4 million and $79.0 million for the fourth quarter and year ended December 31, 2019 and $11.1 million and $49.3 million for the fourth quarter and year ended December 31, 2018, respectively. Also included is a net loss on disposition of $1.0 million and $1.9 million for the fourth quarter and year ended December 31, 2019 and $3.6 million for the year ended December 31, 2018, respectively. |
NON-GAAP SEGMENT RECONCILIATION | |||||||||||||||
Quarter Ended | Year Ended | ||||||||||||||
December 31, 2019 | December 31, 2018 | December 31, 2019 | December 31, 2018 | ||||||||||||
Global components operating income, as reported | $ | 149,794 | $ | 252,313 | $ | (10,199 | ) | $ | 1,007,638 | ||||||
Intangible assets amortization expense (b) | 7,135 | 6,600 | 26,594 | 24,226 | |||||||||||
Impairments (b) | — | — | 623,796 | — | |||||||||||
Impact of wind-down (b) | 10,912 | 5,733 | 161,664 | 8,846 | |||||||||||
AFS notes receivable reserve | 2,850 | — | 18,037 | — | |||||||||||
Digital inventory reserve | 1,117 | — | 22,332 | — | |||||||||||
Global components operating income, as adjusted | $ | 171,808 | $ | 264,646 | $ | 842,224 | $ | 1,040,710 | |||||||
Global ECS operating income, as reported | $ | 148,711 | $ | 152,195 | $ | 426,192 | $ | 427,605 | |||||||
Intangible assets amortization expense | 7,176 | 2,893 | 15,789 | 13,989 | |||||||||||
Global ECS operating income, as adjusted | $ | 155,887 | $ | 155,088 | $ | 441,981 | $ | 441,594 |
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