Arrow Electronics, Inc. Fourth Quarter Net Jumps 36 Percent -- Industry Recovery Gains Momentum.Business Editors MELVILLE, N.Y.--(BUSINESS WIRE)--Feb. 23, 2000 Arrow Electronics Arrow Electronics NYSE: ARW is a Fortune 500 company headquartered in Melville, New York. This company specializes in products and services of electronic components and computer products. , Inc. (NYSE NYSE See: New York Stock Exchange :ARW ARW Air Refueling Wing ARW Advanced Research Workshop ARW Associated Resume Writers ARW Army Ranger Wing (Irish Special Forces) ARW American Revolutionary War ARW Angle Random Walk ARW Aeroelastic Research Wing ) reported that fourth quarter net income increased by approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 36 percent to $44 million or $.46 per share on record sales of $2.5 billion, compared with net income of $32.3 million or $.34 per share on sales of $2.2 billion in the fourth quarter of 1998. Improved gross profit margins Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. resulted in a fourth quarter operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: of 4.4 percent, compared with 4 percent in the fourth quarter of 1998 and 3.9 percent in the third quarter of 1999. "Our fourth quarter results clearly indicate that the long-awaited recovery in our industry is at hand, as evidenced by our dramatic 36 percent year-over-year increase in net income and a healthy increase of 20 percent over the third quarter," said Stephen Stephen, 1097?–1154, king of England (1135–54). The son of Stephen, count of Blois and Chartres, and Adela, daughter of William I of England, he was brought up by his uncle, Henry I of England, who presented him with estates in England and France and P. Kaufman, Chairman and Chief Executive Officer of Arrow ARROW Australian Research Repositories Online to the World (Clayton, Vic, Australia) ARROW Active Resistance to the Roots of War ARROW Antiresonant Reflecting Optical Waveguide . "Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. of our global components business surged 50 percent over the fourth quarter of 1998. In addition, operating margins in our components businesses were up in all regions on a sequential One after the other in some consecutive order such as by name or number. basis. Despite the fact that the well-publicized Y2K See Y2K problem and Y2K compliant. Y2K - Year 2000 concerns negatively affected the computer products industry, our Gates/Arrow business still posted operating income of 1.4 percent on sales of $500 million," he added. "Having successfully completed the integration of Bell and Richey earlier in the year, we are now realizing substantially all of the expected savings from those acquisitions," stated Francis Francis, French prince, duke of Alençon and Anjou Francis, 1554–84, French prince, duke of Alençon and Anjou; youngest son of King Henry II of France and Catherine de' Medici. M. Scricco, President and Chief Operating Officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. , "and Arrow is well-positioned to benefit fully from the ongoing industry recovery." "We are particularly pleased to see that most European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. markets are recovering on the same general time scale as our North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. components business, and that our operating margin in Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). is roughly in line with our overall corporate margin.
Additionally, our full suite of supply chain management tools continues
to gain acceptance among customers, with this segment growing 45 percent
year-on-year in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. and global revenues approaching $2
billion," he added.
Net income for the year was $140.6 million or $1.48 per share ($1.46 per share on a diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. basis) on sales of $9.3 billion excluding the second quarter's special charge of $24.6 million ($.17 per share on a diluted basis) associated with the company's acquisition and integration of the electronics distribution group of Bell Industries and Richey Electronics, compared with net income of $145.8 million or $1.53 per share ($1.50 per share on a diluted basis) on sales of $8.3 billion in 1998. Net income for the year, including the special charge, was $124.2 million or $1.31 per share ($1.29 per share on a diluted basis). Arrow Electronics is the world's largest distributor of electronic components and computer products, with 1999 sales of $9.3 billion. Headquartered in Melville, New York Melville is a hamlet and census-designated place in the town of Huntington in Suffolk County on Long Island, New York, in the United States. As of the 2000 census, 14,533 people resided there. , Arrow serves as a supply channel partner for more than 600 suppliers and 175,000 original equipment manufacturers and commercial customers through more than 200 sales facilities and 25 distribution centers in 37 countries. Detailed information about Arrow's operations can be found at www.arrow.com. The Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 provides a "safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " for forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. . This press release contains forward-looking statements that are subject to certain 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, changes in product supply, pricing, and customer demand, competition, other vagaries in the computer and electronic components markets, changes in relationships with key suppliers, and the other risks described from time to time in the company's reports to the Securities and Exchange Commission (including the company's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. ). 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 forward-looking statements.
ARROW ELECTRONICS, INC.CONSOLIDATED STATEMENT OF INCOME
(In thousands except per share data)
Three Months Ended
December 31,
(unaudited)
1999 1998
---- ----
Sales $2,485,168 $2,160,164
---------- ----------
Costs and expenses:
Cost of products sold 2,129,610 1,870,410
Selling, general and
administrative
expenses 229,440 189,101
Depreciation and
amortization 17,676 14,328
Integration charge - -
--------- ---------
2,376,726 2,073,839
Operating income 108,442 86,325
Equity in earnings (loss)
of affiliated companies (934) 506
Interest expense 28,203 21,387
------ ------
Earnings before income
taxes and minority
interest 79,305 65,444
Provision for income taxes 34,341 27,814
------ ------
Earnings before minority
interest 44,964 37,630
Minority interest 927 5,300
------- -----
Net income $ 44,037 $ 32,330
======== ========
Net income per share:
Basic $.46 $.34
==== ====
Diluted $.46 $.34
==== ====
Average number of shares outstanding:
Basic 95,198 94,820
====== ======
Diluted 96,251 95,751
====== ======
Year Ended
December 31,
1999(A) 1998
------- ----
Sales $9,312,625 $8,344,659
---------- ----------
Costs and expenses:
Cost of products sold 8,011,419 7,183,413
Selling, general and
administrative
expenses 866,861 756,770
Depreciation and
amortization 71,124 51,972
Integration charge 24,560 -
------ ---------
8,973,964 7,992,155
--------- ---------
Operating income 338,661 352,504
Equity in earnings (loss)
of affiliated companies (1,107) 937
Interest expense 106,349 81,126
------- ------
Earnings before income
taxes and minority
interest 231,205 272,315
Provision for income taxes 101,788 115,018
------- -------
Earnings before minority
interest 129,417 157,297
Minority interest 5,264 11,469
----- ------
Net income $124,153 $145,828
======== ========
Net income per share:
Basic $1.31 $1.53
===== =====
Diluted $1.29 $1.50
===== =====
Average number of shares outstanding:
Basic 95,123 95,397
====== ======
Diluted 96,045 97,113
====== ======
(A) Excluding the integration charge, net income and net income per
share were $140.6 million and $1.48 per share ($1.46 per share on
a diluted basis), respectively.
ARROW ELECTRONICS, INC.CONSOLIDATED BALANCE SHEET
(In thousands)
December 31, December 31,
1999 1998
Assets
Current assets:
Cash and short-term investments $ 44,885 $158,924
Accounts receivable, net 1,638,654 1,354,351
Inventories 1,444,929 1,321,261
Other 29,469 26,279
------ ------
Total current assets 3,157,937 2,860,815
Property, plant and equipment, net 223,650 154,806
Investments in affiliated companies 52,233 23,279
Cost in excess of net assets of
companies acquired, net of
amortization 960,770 721,323
Other assets 88,665 79,648
------ ------
$4,483,255 $3,839,871
========== ==========
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $805,468 $785,596
Accrued expenses 263,216 211,438
Short-term borrowings, including
current maturities of long-term
debt 255,977 168,066
------- -------
Total current liabilities 1,324,661 1,165,100
Long-term debt 1,533,421 1,047,041
Minority interest 11,416 69,692
Other 63,228 70,719
Shareholders' equity 1,550,529 1,487,319
--------- ---------
$4,483,255 $3,839,871
========== ==========
ARROW ELECTRONICS, INC.SEGMENT INFORMATION
(In thousands)
Three Months Ended
December 31,
(unaudited)
1999 1998
---- ----
Sales:
Components $ 1,985,551 $ 1,598,563
Computer products 499,617 561,601
----------- -----------
Consolidated $ 2,485,168 $ 2,160,164
=========== ===========
Operating income:
Components $ 118,665 $ 79,063
Computer products 7,218 19,729
Corporate (17,441) (12,467)
----------- -----------
Consolidated $ 108,442 $ 86,325
=========== ===========
Year Ended
December 31,
1999(A) 1998
------- ----
Sales:
Components $ 7,276,858 $ 6,343,890
Computer products 2,035,767 2,000,769
----------- -----------
Consolidated $ 9,312,625 $ 8,344,659
=========== ===========
Operating income:
Components $ 390,237 $ 344,349
Computer products 34,468 55,889
Corporate (86,044) (47,734)
----------- -----------
Consolidated $ 338,661 $ 352,504
=========== ===========
(A) Excluding the integration charge of $24.6 million, operating
income was $363.2 million for the year ended December 31, 1999.
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