Slide 1: CFO Commentary First Quarter 2023
CFO Commentary First Quarter 2023 investor.arrow.com
Slide 2: CFO Commentary
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-year comparable periods. The discussion of our results may exclude these items to give you a better sense of our operating result
Slide 3: First-Quarter Summary
First-Quarter Summary The company delivered solid first-quarter Our ECS business continues to perform in line results with revenue and earnings per share with the overall market for enterprise IT, with beating the midpoint of our guidance. Our better momentum in Europe, and a softer dedicated team p
Slide 4: Consolidated Overview
Consolidated Overview First Quarter 2023 First quarter non-GAAP diluted EPS of Y/Y CHANGE IN CONSTANT $4.60 at the high end of guidance P&L Highlights* Q1 2023 Y/Y CHANGE CURRENCY Q/Q CHANGE Sales $8,736 (4)% (2)% (6)% Consolidated sales were Consolidated gross profit $8.74 billion margin was 12.7%
Slide 5: First Quarter 2023
First Quarter 2023 Effective tax rate was 21.8%, Diluted earnings per share were and non-GAAP effective tax $4.60 rate was 21.8% Above the prior expectation of $4.24 - Effective tax rate and non-GAAP $4.44 effective tax rate were below the prior expectation and the target long-term range of 23% - 25
Slide 6: Components - Global
Components Global Operating income margin of 6.1% Operating Income ($ in millions) First-quarter sales Lead times were Book to bill was decreased 5% year down compared to below parity in all over year the prior quarter but regions $524 $531 remain extended $499 $506 $495 $501 Sales decreased 3% $443
Slide 7: Components - Americas
Components Americas First-quarter sales decreased 5% year over year Sales ($ in millions) As expected, the decline in revenue is primarily a function of the normalization of shortage market activities Strength in industrial, aerospace and defense, and transportation verticals $2,479 We are encourage
Slide 8: Components - Asia
Components Asia Sales declined year-over-year, in line with expectations Sales ($ in millions) Sales declined due to weakening demand in most major verticals year over year, especially in China $3,174 $2,932 $2,919 $2,543 $2,376 Q1-'22 Q2-'22 Q3-'22 Q4-'22 Q1-'23 8 8
Slide 9: Components - Europe
Components Europe Record quarterly sales Sales ($ in millions) First-quarter sales increased 17% year over year First-quarter sales increased 23% year over year on a constant currency basis Growth in sales across most major verticals year over year $2,246 $1,927 $1,936 $1,957 $1,808 Q1-'22 Q2-'22 Q3
Slide 10: Enterprise Computing Solutions - Global
Enterprise Computing Solutions Sales were flat year over year and Global increased 3% on a constant currency Operating Income ($ in millions) basis First-quarter sales Operating income Return on working were flat year over decreased 5% year capital remains year over year primarily favorable due to a
Slide 11: Enterprise Computing Solutions - Americas
Enterprise Computing Solutions Enterprise computing solutions Americas Americas sales decreased 5% year over year Sales ($ in millions) Declines related primarily to softness in enterprise IT spending $1,404 $1,234 $1,161 $1,048 $998 Q1-'22 Q2-'22 Q3-'22 Q4-'22 Q1-'23 11 11
Slide 12: Enterprise Computing Solutions - Europe
Enterprise Computing Solutions First-quarter sales increased 7% year Europe over year and increased 13% on a Sales ($ in millions) constant currency basis Strong demand growth across all technologies year over year, particularly in hardware and software $1,092 $883 $827 $838 $732 Q1-'22 Q2-'22 Q3-'2
Slide 13: Cash Flow, Returns, and Liquidity
Cash Flow, Returns, and Liquidity First Quarter 2023 Cash Flow from Operations Cash flow provided by operating activities was $224 million in the first quarter and $391 million over the last 12 months. Working Capital The company reports return on working capital ("ROWC") and ROWC (non-GAAP) to prov
Slide 14: Outlook: Second Quarter 2023
Outlook: Second Quarter 2023 Guidance We estimate changes in foreign currencies to increase year-over-year growth in sales by $12 million and not have a significant impact on earnings per share on a diluted basis compared to the second quarter of 2022. We estimate changes in foreign currencies to in
Slide 15: Risk factors
Risk factors The discussion of the company’s business and Information Relating to Forward-Looking Statements operations should be read together with the This presentation includes “forward-looking” statements, as the term is defined under the federal securities laws, including but not limited to sta
Slide 16: Certain Non-GAAP Financial Information
Certain Non-GAAP Financial Information In addition to disclosing financial results that are Management believes that providing this additional determined in accordance with accounting principles information is useful to the reader to better assess and generally accepted in the United States (“GAAP”)
Slide 17: Second-Quarter 2023 GAAP to non-GAAP Outlook Reconciliation
Second-Quarter 2023 GAAP to non- GAAP Outlook Reconciliation ($ in billions, except per share data) NON-GAAP SALES RECONCILIATION Quarter Ended Quarter Ended July 1, 2023 July 2, 2022 % Change July 1, 2023 April 1, 2023 % Change Global components sales, GAAP $6.64 - 7.04 $ 7.46 (11%) - (6%) $6.64 -
Slide 18: Earnings Reconciliation
Earnings Reconciliation ($ in thousands, except per share data) Three months ended April 1, 2023 Reported Intangible Restructuring GAAP amortization & Integration Non-GAAP measure expense charges (1) Other measure (1) Other includes gain on investments, net. Operating income $ 422,152 $ 7,980 $ 2,56
Slide 19: Return on Working Capital Reconciliation
Return on Working Capital Reconciliation ($ in thousands) QUARTER ENDED April 1, 2023 April 2, 2022 Numerator: (unaudited) (unaudited) Consolidated operating income, as reported $ 422,152 $ 510,376 x4 x4 Annualized consolidated operating income $ 1,688,608 $ 2,041,504 Non-GAAP consolidated operating
Slide 20: Return on Invested Capital Reconciliation
Return on Invested Capital Reconciliation ($ in thousands) QUARTER ENDED (1) Operating income, as reported, and non- April 1, 2023 April 2, 2022 GAAP operating income is adjusted for Numerator: (unaudited) (unaudited) noncontrolling interest and equity in earnings Consolidated operating income, as r