Slide 1: Second Quarter 2022 CFO Commentary
investor.arrow.com Second 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: Second-Quarter Summary
3 3 Second-Quarter Summary Arrow Electronics experienced strong market demand for electronic components and associated design, engineering and supply chain services in the second quarter, leading to record quarterly sales. Arrow is helping customers navigate shortages and supply chain challenges so
Slide 4: Consolidated Overview Second Quarter 2022
4 Consolidated sales were $9.46 billion Above the mid-point of the prior expectation of $9.04-$9.64 billion Changes in foreign currencies had negative impacts on growth of $291 million on sales and $.17 on earnings per share on a diluted basis, compared to the year earlier period. Slightly below the
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 23.6% Non-GAAP effective tax rate was in line with the prior expectation and the target long-term range of 23% - 25% Diluted shares outstanding were 67 million In line with the prior expectation Diluted earnings per share were $5.
Slide 6: Components Global
6 6 Components Global Record quarterly sales, operating income, and operating margin Second-quarter sales increased 13% year over year Lead times increased year over year and were stable compared to the prior quarter Book-to-bill was above parity in all regions Backlog increased significantly year o
Slide 7: Components Americas
7 7 Components Second-quarter sales increased 26% year over year Record sales for any quarter Growth in sales across most verticals year over year Sales ($ in millions) Americas Record quarterly Americas components sales $1,971 $2,019 $2,137 $2,341 $2,479 Q2-'21 Q3-'21 Q4-'21 Q1-'22 Q2-'22
Slide 8: Components Asia
8 8 Components Second-quarter sales and gross margins were a record for any quarter Growth in transportation sales year over year Communications, consumer, and industrial sales decreased year over year Sales ($ in millions) Asia Record quarterly Asia components sales and gross profit $3,149 $3,009 $
Slide 9: Components Europe
9 9 Components Second-quarter sales increased 21% year over year Sales increased 37% year over year adjusted for changes in foreign currencies Record second-quarter sales Growth in sales across all major verticals year over year Sales ($ in millions) Europe Record quarterly sales, gross profit, and
Slide 10: Enterprise Computing Solutions Global
10 10 Enterprise Computing Solutions Global Second-quarter sales increased 2% year over year Sales increased 8% year over year adjusted for changes in foreign currencies Operating income increased 3.5% year over year Non-GAAP operating income increased 3.2% year over year Operating margin of 4.2% wa
Slide 11: Enterprise Computing Solutions Americas
11 11 Second-quarter sales decreased 1% year over year Decreased demand for security, infrastructure applications, and networking year over year Demand growth in data intelligence, business applications, and hyper converged year over year Sales ($ in millions) Americas Enterprise computing solutions
Slide 12: Enterprise Computing Solutions Europe
12 12 Sales ($ in millions) Enterprise Computing Solutions Europe Record quarterly sales and operating income $785 $685 $980 $827 $838 Q2-'21 Q3-'21 Q4-'21 Q1-'22 Q2-'22 Second-quarter sales increased 7% year over year Sales increased 21% year over year adjusted for changes in foreign currencies Str
Slide 13: Cash Flow, Working Capital and Return on Invested Capital
13 131 Repurchased approximately $225 million of stock in the second quarter. Cash Flow from Operations Cash flow used for operating activities was $(83) million in the second quarter and was $(141) million over the last 12 months. Working Capital The company reports return on working capital ("ROWC
Slide 14: Outlook: Third Quarter 2022
14 14 Outlook: Third Quarter 2022 We are expecting the average USD-to-Euro exchange rate for the third quarter of 2022 to be $1.02 to €1 compared to $1.18 to €1 in the third quarter of 2021. We estimate changes in foreign currencies to have negative impacts on growth of approximately $350 million on
Slide 15: Information Relating to Forward-Looking Statements
15 Information Relating to Forward-Looking Statements This presentation includes “forward-looking” statements, as the term is defined under the federal securities laws, including but not limited to statements regarding: Arrow’s future financial performance, including its outlook on financial results
Slide 16: Certain Non-GAAP Financial Information
16 The company believes that such non-GAAP financial information is useful to investors to assist in assessing and understanding the company’s operating performance. 16 Certain Non-GAAP Financial Information In addition to disclosing financial results that are determined in accordance with accountin
Slide 17: Earnings Reconciliation
($ in thousands, except per share data) Earnings Reconciliation (1) Other includes (gain) loss on investments, net. (2) Other includes gain on investments, net and pension settlement loss. (3) The sum of the components for non-GAAP diluted EPS may not agree to totals, as presented, due to rounding.
Slide 18: Return on Working Capital Reconciliation
18 18 Return on Working Capital Reconciliation ($ in thousands) QUARTER ENDED July 2, 2022 July 3, 2021 Numerator: (unaudited) (unaudited) Consolidated operating income, as reported $ 532,828 $ 340,522 x4 x4 Annualized after-tax consolidated operating income, as adjusted $ 2,131,312 $ 1,362,088 Non-
Slide 19: Return on Invested Capital Reconciliation
19 19 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