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Arrow Electronics Reports Second-Quarter 2018 Results

August 02, 2018

-- Record Second-Quarter Sales, Gross Profit, Operating Income, and Earnings Per Share --

-- Second-Quarter Earnings Per Share of $1.92; Non-GAAP Earnings Per Share of $2.20 --

CENTENNIAL, Colo.--(BUSINESS WIRE)-- Arrow Electronics, Inc. (NYSE:ARW) today reported second-quarter 2018 sales of $7.39 billion, an increase of 15 percent from sales of $6.42 billion in the second quarter of 2017. Second-quarter net income of $170 million, or $1.92 per share on a diluted basis, compared with net income of $100 million, or $1.11 per share on a diluted basis, in the second quarter of 2017. Excluding certain items1, net income would have been $195 million, or $2.20 per share on a diluted basis, in the second quarter of 2018, compared with net income of $159 million, or $1.77 per share on a diluted basis, in the second quarter of 2017. Excluding certain items1, net income increased 23 percent year over year, and earnings per share on a diluted basis increased 24 percent year over year.

“We are providing more economic value to our customers and suppliers by expanding our design and engineering capabilities,” said Michael J. Long, chairman, president, and chief executive officer. “Customers increasingly want to purchase solutions, not just components or IT.”

Global components second-quarter sales of $5.28 billion increased 18 percent year over year. Second-quarter sales, as adjusted, increased 16 percent year over year. Americas components sales increased 14 percent year over year. Asia-Pacific components sales increased 21 percent year over year. Europe components sales increased 21 percent year over year. Sales in the region, as adjusted, increased 14 percent year over year. Global components second-quarter operating income increased 29 percent year over year.

“Demand conditions are favorable, and point to normal, sustained growth for the future,” said Mr. Long.

Global enterprise computing solutions second-quarter sales of $2.11 billion increased 8 percent year over year. Americas enterprise computing solutions sales increased 6 percent year over year. Sales in the region, as adjusted, increased 11 percent year over year. Europe enterprise computing solutions sales increased 10 percent year over year. Sales in the region, as adjusted, increased 1 percent year over year. Global enterprise computing solutions second-quarter operating income increased 2 percent year over year and was flat year over year excluding amortization of intangibles expense.

“We are well-aligned to current IT spending trends, and have leadership positions in security, hybrid cloud, and software-defined architectures,” added Mr. Long.

“Return on invested capital increased year over year for the fourth straight quarter. Second quarter cash flow from operations was negative $410 million driven by the need for working capital additions to service our record levels of growth. More than $200 million of the decline was a timing issue at quarter end between inventory and receivables on a new customer engagement,” said Chris Stansbury, senior vice president and chief financial officer. “We remain committed to returning excess cash to shareholders. During the second quarter, we returned approximately $20 million to shareholders through our stock repurchase program. We had approximately $299 million of remaining authorization under our share repurchase program at the end of the second quarter.”

SIX-MONTH RESULTS

In the first six months of 2018, Arrow’s sales of $14.27 billion increased 17 percent from sales of $12.16 billion in the first six months of 2017. Net income for the first six months of 2018 was $309 million, or $3.48 per share on a diluted basis, compared with net income of $214 million, or $2.38 per share on a diluted basis in the first six months of 2017. Excluding certain items1, net income would have been $363 million, or $4.08 per share on a diluted basis, in the first six months of 2018 compared with net income of $291 million, or $3.23 per share on a diluted basis, in the first six months of 2017.

1 A reconciliation of non-GAAP adjusted financial measures, including sales, as adjusted, operating income, as adjusted, net income attributable to shareholders, as adjusted, and net income per share, as adjusted, to GAAP financial measures is presented in the reconciliation tables included herein.

GUIDANCE

“As we look to the third quarter, we believe that total sales will be between $7.15 billion and $7.55 billion, with global components sales between $5.25 billion and $5.45 billion, and global enterprise computing solutions sales between $1.9 billion and $2.1 billion. As a result of this outlook, we expect earnings per share on a diluted basis to be in the range of $1.79 to $1.91, and earnings per share on a diluted basis, excluding certain items1, to be in the range of $2.09 to $2.21 per share. Our guidance assumes an average tax rate of 23.5 percent to 25.5 percent, and average diluted shares outstanding are expected to be approximately 89 million. Guidance is based on an average USD-to-Euro exchange rate for the third quarter of approximately $1.17 to €1,” said Mr. Stansbury.

Please refer to the CFO commentary, which can be found at investor.arrow.com, as a supplement to the company’s earnings release.

Arrow Electronics guides innovation forward for over 150,000 of the world’s leading manufacturers of technology used in homes, business and daily life. With 2017 sales of $26.6 billion, Arrow aggregates electronics and enterprise computing solutions for customers and suppliers in industrial and commercial markets. The company maintains a network of more than 345 locations serving over 80 countries. Learn more at FiveYearsOut.com.

Information Relating to Forward-Looking Statements

This press release includes forward-looking statements that are subject to numerous assumptions, risks, and uncertainties, which could cause actual results or facts to differ materially from such statements for a variety of reasons, including, but not limited to: industry conditions, the company's implementation of its new enterprise resource planning system, changes in product supply, pricing and customer demand, competition, other vagaries in the global components and global enterprise computing solutions markets, changes in relationships with key suppliers, increased profit margin pressure, the effects of additional actions taken to become more efficient or lower costs, risks related to the integration of acquired businesses, changes in legal and regulatory matters, and the company’s ability to generate additional cash flow. Forward-looking statements are those statements which are not statements of historical fact. These forward-looking statements can be identified 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 of the forward-looking statements.

For a further discussion of factors to consider in connection with these forward-looking statements, investors should refer to Item 1A Risk Factors of the company’s Annual Report on Form 10-K for the year ended Dec. 31, 2017.

Certain Non-GAAP Financial Information

In addition to disclosing financial results that are determined in accordance with accounting principles generally accepted in the United States (“GAAP”), the company also provides certain non-GAAP financial information relating to sales, operating income, net income attributable to shareholders, and net income per basic and diluted share. The company provides sales, income, or expense on a non-GAAP basis adjusted for the impact of changes in foreign currencies and the impact of acquisitions/dispositions by adjusting the company's operating results, including the amortization expense related to acquired/disposed intangible assets, as if the acquisitions/dispositions had occurred at the beginning of the earliest period presented (referred to as "impact of acquisitions" and "impact of dispositions"). Operating income, net income attributable to shareholders, and net income per basic and diluted share are adjusted to exclude identifiable intangible amortization, restructuring, integration, and other charges, and certain charges, credits, gains, and losses that the company believes impact the comparability of its results of operations. These charges, credits, gains, and losses arise out of the company’s efficiency enhancement initiatives, acquisitions/dispositions (including intangible assets amortization expense), and financing activities. A reconciliation of the company’s non-GAAP financial information to GAAP is set forth in the tables 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 these items 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, sales, 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.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except per share data)
(Unaudited)
               
Quarter Ended Six Months Ended
June 30, 2018   July 1, 2017 June 30, 2018   July 1, 2017
(Adjusted) (Adjusted)
Sales $ 7,392,528 $ 6,422,226 $ 14,268,141 $ 12,159,006
Cost of sales 6,459,708   5,598,202   12,466,377   10,573,785
Gross profit 932,820   824,024   1,801,764   1,585,221
Operating expenses:
Selling, general, and administrative expenses 580,388 531,781 1,143,357 1,047,307
Depreciation and amortization 46,422 37,381 93,669 74,522
Loss on disposition of businesses, net 1,562
Restructuring, integration, and other charges 19,183   24,416   40,354   39,921
645,993   593,578   1,278,942   1,161,750
Operating income 286,827 230,446 522,822 423,471
Equity in earnings (losses) of affiliated companies 517 724 (156 ) 1,649
Gain (loss) on investments, net (2,563 ) 2,263 (5,015 ) 4,245
Loss on extinguishment of debt 58,759 58,759
Post-retirement expense 1,257 1,897 2,488 3,697
Interest and other financing expense, net 60,803   42,538   105,982   80,787
Income before income taxes 222,721 130,239 409,181 286,122
Provision for income taxes 51,681   29,592   98,271   69,156
Consolidated net income 171,040 100,647 310,910 216,966
Noncontrolling interests 1,125   925   1,901   2,507
Net income attributable to shareholders $ 169,915   $ 99,722   $ 309,009   $ 214,459
 
Net income per share:
Basic $ 1.94   $ 1.12   $ 3.52   $ 2.41
Diluted $ 1.92   $ 1.11   $ 3.48   $ 2.38
 
Weighted-average shares outstanding:
Basic 87,802 88,876 87,878 89,079
Diluted 88,652 89,837 88,841 90,146
 
 
ARROW ELECTRONICS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands except par value)
(Unaudited)
   
June 30, 2018 December 31, 2017
(Adjusted)
ASSETS
Current assets:
Cash and cash equivalents $ 330,519 $ 730,083
Accounts receivable, net 8,076,896 8,125,588
Inventories 3,775,884 3,302,518
Other current assets 278,995   256,028  
Total current assets 12,462,294   12,414,217  
Property, plant, and equipment, at cost:
Land 13,199 12,866
Buildings and improvements 158,686 160,664
Machinery and equipment 1,371,844   1,330,730  
1,543,729 1,504,260
Less: Accumulated depreciation and amortization (707,928 ) (665,785 )
Property, plant, and equipment, net 835,801   838,475  
Investments in affiliated companies 86,186 88,347
Intangible assets, net 328,964 286,215
Goodwill 2,673,117 2,470,047
Other assets 362,446   361,966  
Total assets $ 16,748,808   $ 16,459,267  
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable $ 6,487,686 $ 6,756,830
Accrued expenses 790,809 841,675
Short-term borrowings, including current portion of long-term debt 114,908   356,806  
Total current liabilities 7,393,403   7,955,311  
Long-term debt 3,690,327 2,933,045
Other liabilities 497,771 572,971
Commitments and contingencies
Equity:
Shareholders' equity:
Common stock, par value $1:
Authorized - 160,000 shares in both 2018 and 2017, respectively
Issued - 125,424 shares in both 2018 and 2017, respectively 125,424 125,424
Capital in excess of par value 1,117,389 1,114,167
Treasury stock (38,040 and 37,733 shares in 2018 and 2017, respectively), at cost (1,806,362 ) (1,762,239 )
Retained earnings 5,928,149 5,596,786
Accumulated other comprehensive loss (245,809 ) (124,883 )
Total shareholders' equity 5,118,791 4,949,255
Noncontrolling interests 48,516   48,685  
Total equity 5,167,307   4,997,940  
Total liabilities and equity $ 16,748,808   $ 16,459,267  
 
 
ARROW ELECTRONICS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 
  Quarter Ended
June 30, 2018   July 1, 2017
Cash flows from operating activities: (Adjusted)
Consolidated net income $ 171,040 $ 100,647
 
Adjustments to reconcile consolidated net income to net cash used for operations:
Depreciation and amortization 46,422 37,381
Amortization of stock-based compensation 12,668 9,816
Equity in (earnings) losses of affiliated companies (517 ) (724 )
Deferred income taxes 15,524 (2,113 )
Loss on extinguishment of debt 58,759
Other 4,705 3,763
Change in assets and liabilities, net of effects of acquired and disposed businesses:
Accounts receivable (863,490 ) (529,392 )
Inventories (239,297 ) (111,760 )
Accounts payable 451,093 380,647
Accrued expenses 21,571 3,533
Other assets and liabilities (29,491 ) (62,777 )
Net cash used for operating activities (409,772 ) (112,220 )
 
Cash flows from investing activities:
Cash consideration paid for acquired businesses, net of cash acquired (96 ) (2,534 )
Acquisition of property, plant, and equipment (31,816 ) (39,788 )
Proceeds from sale of property, plant, and equipment 16,547
Other (3,500 ) (3,000 )
Net cash used for investing activities (35,412 ) (28,775 )
 
Cash flows from financing activities:
Change in short-term and other borrowings 77,995 (36,128 )
Proceeds from long-term bank borrowings, net 157,948 179,318
Proceeds from note offerings, net 494,625
Redemption of notes (558,100 )
Proceeds from exercise of stock options 993 3,438
Repurchases of common stock (20,038 ) (54,816 )
Other (156 ) (945 )
Net cash provided by financing activities 216,742   27,392  
Effect of exchange rate changes on cash 10,317   11,959  
Net decrease in cash and cash equivalents (218,125 ) (101,644 )
Cash and cash equivalents at beginning of period 548,644   521,562  
Cash and cash equivalents at end of period $ 330,519   $ 419,918  
 
 
ARROW ELECTRONICS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 
  Six Months Ended
June 30, 2018   July 1, 2017
Cash flows from operating activities: (Adjusted)
Consolidated net income $ 310,910 $ 216,966
Adjustments to reconcile consolidated net income to net cash used for operations:
Depreciation and amortization 93,669 74,522
Amortization of stock-based compensation 25,662 21,391
Equity in (earnings) losses of affiliated companies 156 (1,649 )
Loss on extinguishment of debt 58,759
Deferred income taxes 12,706 11,825
Other 10,622 5,208
Change in assets and liabilities, net of effects of acquired and disposed businesses:
Accounts receivable (73,647 ) 419,229
Inventories (499,917 ) (149,945 )
Accounts payable (240,725 ) (601,708 )
Accrued expenses (516 ) (90,332 )
Other assets and liabilities (123,769 ) (97,376 )
Net cash used for operating activities (484,849 ) (133,110 )
 
Cash flows from investing activities:
Cash consideration paid for acquired businesses, net of cash acquired (331,563 ) (2,534 )
Proceeds from disposition of businesses 34,291
Acquisition of property, plant, and equipment (66,551 ) (101,906 )
Proceeds from sale of property, plant, and equipment 24,433
Other (8,000 ) (3,000 )
Net cash used for investing activities (371,823 ) (83,007 )
 
Cash flows from financing activities:
Change in short-term and other borrowings 59,613 40,274
Proceeds from long-term bank borrowings, net 759,334 241,818
Proceeds from note offerings, net 494,625
Redemption of notes (300,000 ) (558,100 )
Proceeds from exercise of stock options 5,985 20,697
Repurchases of common stock (72,551 ) (123,663 )
Purchase of shares from noncontrolling interest (23,350 )
Other (156 ) (945 )
Net cash provided by financing activities 452,225   91,356  
Effect of exchange rate changes on cash 4,883   10,359  
Net decrease in cash and cash equivalents (399,564 ) (114,402 )
Cash and cash equivalents at beginning of period 730,083   534,320  
Cash and cash equivalents at end of period $ 330,519   $ 419,918  
 
 
ARROW ELECTRONICS, INC.
NON-GAAP SALES RECONCILIATION
(In thousands)
(Unaudited)
  Quarter Ended  
June 30, 2018   July 1, 2017 % Change
(Adjusted)
Consolidated sales, as reported $ 7,392,528 $ 6,422,226 15.1 %
Impact of changes in foreign currencies 139,839
Impact of acquisitions 37,914
Impact of dispositions   (57,379 )
Consolidated sales, as adjusted $ 7,392,528   $ 6,542,600   13.0 %
 
Global components sales, as reported $ 5,284,364 $ 4,462,350 18.4 %
Impact of changes in foreign currencies 90,394
Impact of acquisitions   21,412  
Global components sales, as adjusted $ 5,284,364   $ 4,574,156   15.5 %
 
Americas Components sales, as reported $ 1,937,882 $ 1,700,241 14.0 %
Impact of changes in foreign currencies (1,205 )
Impact of acquisitions   21,412  
Americas Components sales, as adjusted $ 1,937,882   $ 1,720,448   12.6 %
 
Europe components sales, as reported $ 1,447,972 $ 1,192,393 21.4 %
Impact of changes in foreign currencies 78,551
Impact of acquisitions    
Europe components sales, as adjusted $ 1,447,972   $ 1,270,944   13.9 %
 
Asia components sales, as reported $ 1,898,510 $ 1,569,716 20.9 %
Impact of changes in foreign currencies 13,048
Impact of acquisitions    
Asia components sales, as adjusted $ 1,898,510   $ 1,582,764   19.9 %
 
Global ECS sales, as reported $ 2,108,164 $ 1,959,876 7.6 %
Impact of changes in foreign currencies 49,445
Impact of acquisitions 16,502
Impact of dispositions   (57,379 )
Global ECS sales, as adjusted $ 2,108,164   $ 1,968,444   7.1 %
 
Europe ECS sales, as reported $ 721,130 $ 652,631 10.5 %
Impact of changes in foreign currencies 47,906
Impact of acquisitions 16,502
Impact of dispositions   (993 )
Europe ECS sales, as adjusted $ 721,130   $ 716,046   0.7 %
 
Americas ECS sales, as reported $ 1,387,034 $ 1,307,245 6.1 %
Impact of changes in foreign currencies 1,539
Impact of acquisitions
Impact of dispositions   (56,386 )
Americas ECS sales, as adjusted $ 1,387,034   $ 1,252,398   10.8 %
 
 
ARROW ELECTRONICS, INC.
NON-GAAP SALES RECONCILIATION
(In thousands)
(Unaudited)
  Six Months Ended  
June 30, 2018   July 1, 2017 % Change
(Adjusted)
Consolidated sales, as reported $ 14,268,141 $ 12,159,006 17.3 %
Impact of changes in foreign currencies 408,719
Impact of acquisitions 75,212
Impact of dispositions (27,493 ) (115,286 )
Consolidated sales, as adjusted $ 14,240,648   $ 12,527,651   13.7 %
 
Global components sales, as reported $ 10,214,296 $ 8,521,153 19.9 %
Impact of changes in foreign currencies 265,483
Impact of acquisitions   42,000  
Global components sales, as adjusted $ 10,214,296   $ 8,828,636   15.7 %
 
Americas Components sales, as reported $ 3,734,580 $ 3,263,786 14.4 %
Impact of changes in foreign currencies 587
Impact of acquisitions   42,000  
Americas Components sales, as adjusted $ 3,734,580   $ 3,306,373   13.0 %
 
Europe components sales, as reported $ 2,926,358 $ 2,310,672 26.6 %
Impact of changes in foreign currencies 236,203
Impact of acquisitions    
Europe components sales, as adjusted $ 2,926,358   $ 2,546,875   14.9 %
 
Asia components sales, as reported $ 3,553,358 $ 2,946,695 20.6 %
Impact of changes in foreign currencies 28,692
Impact of acquisitions    
Asia components sales, as adjusted $ 3,553,358   $ 2,975,387   19.4 %
 
Global ECS sales, as reported $ 4,053,845 $ 3,637,853 11.4 %
Impact of changes in foreign currencies 143,236
Impact of acquisitions 33,212
Impact of dispositions (27,493 ) (115,286 )
Global ECS sales, as adjusted $ 4,026,352   $ 3,699,015   8.8 %
 
Europe ECS sales, as reported $ 1,471,400 $ 1,235,965 19.0 %
Impact of changes in foreign currencies 135,811
Impact of acquisitions 33,212
Impact of dispositions   (1,882 )
Europe ECS sales, as adjusted $ 1,471,400   $ 1,403,106   4.9 %
 
Americas ECS sales, as reported $ 2,582,445 $ 2,401,888 7.5 %
Impact of changes in foreign currencies 7,425
Impact of acquisitions
Impact of dispositions (27,493 ) (113,404 )
Americas ECS sales, as adjusted $ 2,554,952   $ 2,295,909   11.3 %
 
 
ARROW ELECTRONICS, INC.
NON-GAAP EARNINGS RECONCILIATION
(In thousands except per share data)
(Unaudited)
 
Three months ended June 30, 2018
  Reported
GAAP
measure
  Intangible
amortization
expense
  Restructuring
& Integration
charges
  Other*   Non-GAAP
measure
Operating income $ 286,827 $ 11,955 $ 19,183 $ $ 317,965
Income before income taxes 222,721 11,955 19,183 2,563 256,422
Provision for income taxes 51,681 3,211 4,689 631 60,212
Consolidated net income 171,040 8,744 14,494 1,932 196,210
Noncontrolling interests 1,125 149 1,274
Net income attributable to shareholders $ 169,915 $ 8,595 $ 14,494 $ 1,932 $ 194,936
Net income per diluted share $ 1.92 $ 0.10 $ 0.16 $ 0.02 $ 2.20
Effective tax rate 23.2 % 23.5 %
                     
Three months ended July 1, 2017 (Adjusted)
Reported
GAAP
measure
Intangible
amortization
expense
Restructuring
& Integration
charges
Other** Non-GAAP
measure
Operating income 230,446 12,364 24,416 267,226
Income before income taxes 130,239 12,364 24,416 56,496 223,515
Provision for income taxes 29,592 4,388 7,576 21,794 63,350
Consolidated net income 100,647 7,976 16,840 34,702 160,165
Noncontrolling interests 925 157 1,082
Net income attributable to shareholders $ 99,722 7,819 16,840 34,702 159,083
Net income per diluted share*** $ 1.11 $ 0.09 $ 0.19 $ 0.39 $ 1.77
Effective tax rate 22.7 % 28.3 %
                     
Six months ended June 30, 2018
Reported
GAAP
measure
Intangible
amortization
expense
Restructuring
& Integration
charges
Other* Non-GAAP
measure
Operating income $ 522,822 25,475 40,354 1,562 590,213
Income before income taxes 409,181 25,475 40,354 6,577 481,587
Provision for income taxes 98,271 6,815 10,224 1,413 116,723
Consolidated net income 310,910 18,660 30,130 5,164 364,864
Noncontrolling interests 1,901 302 2,203
Net income attributable to shareholders $ 309,009 18,358 30,130 5,164 362,661
Net income per diluted share*** 3.48 0.21 0.34 0.06 4.08
Effective tax rate 24.0 % 24.2 %
                     
Six months ended July 1, 2017 (Adjusted)
Reported
GAAP
measure
Intangible
amortization
expense
Restructuring
& Integration
charges
Other** Non-GAAP
measure
Operating income $ 423,471 25,264 39,921 488,656
Income before income taxes 286,122 25,264 39,921 54,514 405,821
Provision for income taxes 69,156 8,949 12,573 21,029 111,707
Consolidated net income 216,966 16,315 27,348 33,485 294,114
Noncontrolling interests 2,507 408 2,915
Net income attributable to shareholders $ 214,459 15,907 27,348 33,485 291,199
Net income per diluted share 2.38 0.18 0.30 0.37 3.23
Effective tax rate 24.2 % 27.5 %
                     
* Other includes loss on disposition of businesses and gain (loss) on investments, net.
** Other includes gain (loss) on investments, net and loss on extinguishment of debt.
*** The sum of the components for diluted EPS, as adjusted may not agree to totals, as presented, due to rounding.
 
 
ARROW ELECTRONICS, INC.
SEGMENT INFORMATION
(In thousands)
(Unaudited)
       
Quarter Ended Six Months Ended
June 30, 2018   July 1, 2017 June 30, 2018   July 1, 2017
Sales: (Adjusted) (Adjusted)
Global components $ 5,284,364 $ 4,462,350 $ 10,214,296 $ 8,521,153
Global ECS 2,108,164   1,959,876   4,053,845   3,637,853  
Consolidated $ 7,392,528   $ 6,422,226   $ 14,268,141   $ 12,159,006  
Operating income (loss):
Global components $ 253,840 $ 197,164 $ 483,386 $ 370,697
Global ECS 109,417 106,761 193,223 188,950
Corporate (a) (76,430 ) (73,479 ) (153,787 ) (136,176 )
Consolidated $ 286,827   $ 230,446   $ 522,822   $ 423,471  
 
(a)   Includes restructuring, integration, and other charges of $19.2 million and $40.4 million for the second quarter and first six months of 2018, and $24.4 million and $39.9 million for the second quarter and first six months of 2017, respectively. Also included in the first six months of 2018 was a net loss on the disposition of businesses of $1.6 million.
 
 
NON-GAAP SEGMENT RECONCILIATION
       
Quarter Ended Six Months Ended
June 30, 2018   July 1, 2017 June 30, 2018   July 1, 2017
(Adjusted) (Adjusted)
Global components operating income, as reported $ 253,840 $ 197,164 $ 483,386 $ 370,697
Intangible assets amortization expense 8,694   6,827   17,293   14,226
Global components operating income, as adjusted $ 262,534   $ 203,991   $ 500,679   $ 384,923
Global ECS operating income, as reported $ 109,417 $ 106,761 $ 193,223 $ 188,950
Intangible assets amortization expense 3,261   5,537   8,182   11,038
Global ECS operating income, as adjusted $ 112,678   $ 112,298   $ 201,405   $ 199,988
 

Arrow Electronics, Inc.
Steven O’Brien, 303-824-4544
Vice President, Investor Relations
or
Media Contact:
John Hourigan, 303-824-4586
Vice President, Global Communications

Source: Arrow Electronics, Inc.

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