Slide 1: First-Quarter 2014 CFO Commentary
Exhibit 99.2 First-Quarter 2014 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 the first quarter of last year. Any discussion of our results will exclude these items to give you a be
Slide 2: Global components saw revenue advance in line with our expectations and traditional seasonality. Demand
Global components saw revenue advance in line with our expectations and traditional seasonality. Demand strengthened through the quarter. The overall market remains stable, with lead times and cancellation rates operating in normal ranges. Our sales of $3.4 billion were at the midpoint of our expect
Slide 3: Consolidated Overview – First Quarter
Consolidated Overview – First Quarter Y/Y Change Y/Y Adjusted for Q/Q P&L Highlights* Q1 2014 Change Acquisitions & Change Currency Sales $ 5,082 +5% -1% -17% Gross Profit Margin 13.8% +60bps +40bps +100bps Operating Expense/Sales 9.9% +10bps -10bps +140bps Operating Income $ 200 +19% +14% -25% Oper
Slide 4: o Increased 50 basis points year over year Effective tax rate for the quarter
o Increased 50 basis points year over year ● Effective tax rate for the quarter was 27.9% ● Net income was $124 million o Increased $21 million year over year ● Earnings per share were $1.24 and $1.22 on a basic and diluted basis, respectively o Diluted EPS increased 28% year over year 4
Slide 5: Global Components
Global Components Sales ($ in millions) ● Sales increased 7% year over year and were flat sequentially ● Gross profit dollars increased 8% year over year and were up 2% sequentially o Sales growth and an improvement in European gross margin drove the improvement year over year ● Book-to-bill was 1.0
Slide 6: Americas Components Region
Americas Components Region Sales ($ in millions) ● Sales increased 1% year over year and were down 6% sequentially o Good growth in the medical and lighting verticals year over year o In line with normal seasonality on a sequential basis ● Operating income increased 16% year over year o Operating ma
Slide 7: Europe Components Region
Europe Components Region Sales ($ in millions) ● Sales increased 12% year over year and sequentially o Adjusted for the impact of acquisitions and changes in foreign currencies, sales increased 7% year over year and 10% sequentially o Sequential sales in line with traditional seasonality ● Operating
Slide 8: Asia Pacific Components Region
Asia Pacific Components Region Sales ($ in millions) ● Sales increased 12% year over year and were down 3% sequentially o China growth remained strong year over year o Sequential sales toward the upper end of traditional seasonality ● Operating income increased 15% year over year o Primarily due to
Slide 9: Global Enterprise Computing Solutions
Global Enterprise Computing Solutions Sales ($ in millions) ● Sales were flat year over year and decreased 39% sequentially ● Gross margin was up 140 basis points year over year and sequentially due to more favorable mix of more software and fewer low-margin industry standard servers ● Operating mar
Slide 10: ECS America
ECS America Sales ($ in millions) ● Sales decreased 10% year over year and 40% sequentially ● Operating income increased 1% year over year and decreased 46% sequentially o Operating margin increased 60 basis points year over year ● Looking ahead to the second quarter, we expect sales in our core Ame
Slide 11: ECS Europe
ECS Europe Sales ($ in millions) ● Sales increased 20% year over year and decreased 37% sequentially o Adjusted for the impact of acquisitions and changes in foreign currencies, sales decreased 11% year over year ● Operating income increased 34% year over year o Operating margin increased 30 basis p
Slide 12: Cash Flow and Balance Sheet Highlights
Cash Flow and Balance Sheet Highlights ● Cash Flow from Operations Cash generated from operating activities in the first quarter was $124 million and $754 million on a trailing 12-month basis. We converted more than 175% of GAAP net income to cash over the last 12-months, well in excess of our targe
Slide 13: Arrow Electronics Updated Revenue Seasonality
Arrow Electronics Updated Revenue Seasonality* Global NAC EMEA ex FX AAP Components Q1 -7% to +1% +9% to +17% -10% to -2% Q2 -1% to +7% -5% to +3% +9% to +17% Q3 -6% to +2% -3% to +5% -4% to +4% Q4 -3% to +5% -13% to -5% -4% to +4% Global ECS NA EMEA ex FX Q1 -27% to -19% -34% to -26% Q2 +15% to +23
Slide 14: Risk Factors
Risk Factors The discussion of the company’s business and operations should be read together with the risk factors contained in Item 1A of its 2013 Annual Report on Form 10-K, filed with the Securities and Exchange Commission, which describe various risks and uncertainties to which the company is or
Slide 15: Certain Non-GAAP Financial Information
Certain Non-GAAP Financial Information In addition to disclosing results that are determined in accordance with Generally Accepted Accounting Principles ("GAAP"), the company provides certain non-GAAP financial information relating to operating income, net income attributable to shareholders, and ne
Slide 16: Earnings Reconciliation
Earnings Reconciliation ($ in thousands, except per share data) Q1 2014 Q4 2013 Q1 2013 Operating income, as Reported $ 177,740 $ 237,337 $ 137,552 Intangible assets amortization expense 10,947 10,007 8,957 Restructuring, integration, and other charges 11,614 18,248 21,610 Operating income, as Adjus
Slide 17: Q4-13 Restructuring, Integration, and Other Charges: During the fourth quarter of 2013, the company
Q4-13 Restructuring, Integration, and Other Charges: During the fourth quarter of 2013, the company recorded restructuring, integration, and other charges of $18.2 million ($13.3 million net of related taxes or $.13 per share on both a basic and diluted basis). Q4-13 Settlement of tax matters: Durin