Slide 1: Third Quarter 2022 CFO Commentary
investor.arrow.com Third Quarter 2022 CFO Commentary
Slide 2: CFO Commentary
2 2 CFO Commentary As reflected in our earnings release, there are a number of items that impact the comparability of our results with those in the trailing quarter and prior quarter of last year. The discussion of our results may exclude these items to give you a better sense of our operating resul
Slide 3: Third-Quarter Summary
3 3 Third-Quarter Summary Arrow capitalized on strong sales with focused execution and produced record quarterly gross profit, operating income and earnings per share during the third quarter. By continuing to help customers navigate a difficult and ever-changing market environment, we help to mitig
Slide 4: Consolidated Overview Third Quarter 2022
4 Consolidated sales were $9.27 billion Above the mid-point of the prior expectation of $8.92-$9.52 billion Changes in foreign currencies reduced growth by $380 million on sales and $0.17 on earnings per share on a diluted basis, compared to the year earlier period. Slightly above the prior expectat
Slide 5: Effective tax rate and diluted earnings per share
5 5 Effective tax rate was 23.5%, and non-GAAP effective tax rate was 23.5% Effective tax rate and non-GAAP effective tax rate were in line with the prior expectation and the target long- term range of 23% - 25% Diluted shares outstanding were 65 million In line with the prior expectation Diluted ea
Slide 6: Components Global
6 6 Components Global Record quarterly sales, gross profit, operating income, and operating margin Third-quarter sales increased 10% year over year Sales increased 15% year over year on a constant currency basis Lead times relatively stable compared to the prior quarter and remain significantly exte
Slide 7: Components Americas
7 7 Components Third-quarter sales increased 21% year over year Growth in sales across all verticals year over year, particularly Industrial, Aerospace & Defense, Transportation, and Communication Sales ($ in millions) Americas Strong growth in operating margins year over year $2,019 $2,137 $2,341 $
Slide 8: Components Asia
8 8 Components Growth in transportation and medical sales year over year Computing, consumer, and industrial sales decreased year over year Sales ($ in millions) Asia Gross margins and operating margins increased year over year $3,009 $2,949 $2,932 $3,174 $2,919 Q3-'21 Q4-'21 Q1-'22 Q2-'22 Q3-'22
Slide 9: Components Europe
9 9 Components Third-quarter sales increased 21% year over year Third-quarter sales increased 41% year over year on a constant currency basis Growth in sales across all major verticals year over year Sales ($ in millions) Europe Strong growth in operating margins year over year $1,596 $1,594 $1,927
Slide 10: Enterprise Computing Solutions Global
10 10 Enterprise Computing Solutions Global Third-quarter sales increased 4% year over year Sales increased 10% year over year on a constant currency basis Operating income increased 9.4% year over year Operating income increased 14% year over year on a constant currency basis Operating margin of 4.
Slide 11: Enterprise Computing Solutions Americas
11 11 Demand growth in compute, data intelligence, and storage year over year Growth muted due mainly to supply chain constraints on hardware- related sales though backlog remains strong Sales ($ in millions) Americas Enterprise computing solutions Americas sales increased 2.5% year over year $1,204
Slide 12: Enterprise Computing Solutions Europe
12 12 Sales ($ in millions) Enterprise Computing Solutions Europe Record quarterly sales and operating income $685 $980 $827 $838 $732 Q3-'21 Q4-'21 Q1-'22 Q2-'22 Q3-'22 Third-quarter sales increased 7% year over year Sales increased 25% year over year on a constant currency basis Strong demand grow
Slide 13: Cash Flow, Working Capital and Share Repurchases
13 131 Repurchased $259 million of stock in the third quarter. Cash Flow from Operations Cash flow provided by (used for) operating activities was $141 million in the third quarter and $(114) million over the last 12 months. Working Capital The company reports return on working capital ("ROWC") and
Slide 14: Outlook: Fourth Quarter 2022
14 14 Outlook: Fourth Quarter 2022 We are expecting the average USD-to-Euro exchange rate for the fourth quarter of 2022 to be $0.98 to €1 compared to $1.14 to €1 in the fourth-quarter of 2021. We estimate changes in foreign currencies to reduce year over year growth in sales by $420 million and ear
Slide 15: Information Relating to Forward-Looking Statements
15 Information Relating to Forward-Looking Statements This presentation includes “forward-looking” statements, as the term is defined under the federal securities laws, including but not limited to statements regarding: Arrow’s future financial performance, including its outlook on financial results
Slide 16: Certain Non-GAAP Financial Information
16 The company believes that such non-GAAP financial information is useful to investors to assist in assessing and understanding the company’s operating performance. 16 Certain Non-GAAP Financial Information In addition to disclosing financial results that are determined in accordance with accountin
Slide 17: Fourth-Quarter 2022 GAAP to non-GAAP Outlook Reconciliation
($ in billions, except per share data) Fourth-Quarter 2022 GAAP to non-GAAP Outlook Reconciliation 17 NON-GAAP SALES RECONCILIATION Quarter Ended Quarter Ended December 31, 2022 December 31, 2021 % Change December 31, 2022 October 1, 2022 % Change Global components sales, GAAP $6.80 – $7.10 $ 6.68 2
Slide 18: Earnings Reconciliation
($ in thousands, except per share data) Earnings Reconciliation (1) Other includes (gain) loss on investments, net. (2) The sum of the components for non-GAAP diluted EPS may not agree to totals, as presented, due to rounding. (3) The items as shown in this table, represent the reconciling items for
Slide 19: Return on Working Capital Reconciliation
19 19 Return on Working Capital Reconciliation ($ in thousands) QUARTER ENDED October 1, 2022 October 2, 2021 Numerator: (unaudited) (unaudited) Consolidated operating income, as reported $ 502,694 $ 404,865 x4 x4 Annualized consolidated operating income $ 2,010,776 $ 1,619,460 Non-GAAP consolidated
Slide 20: Return on Invested Capital Reconciliation
20 20 Return on Invested Capital Reconciliation (1) Operating income, as reported, and non- GAAP operating income is adjusted for noncontrolling interest and equity in losses of affiliated companies to include the pro-rata ownership of non-wholly owned subsidiaries. (2) The tax effect is calculated