Arrow Electronics Posts First Quarter Results.

Business Editors

MELVILLE, N.Y.--(BUSINESS WIRE)--April 25, 2002

Arrow Electronics, Inc. (NYSE:ARW) today reported first quarter net income of $2.8 million ($.03 per share) on sales of $1.95 billion, compared with net income of $71.7 million ($.68 per share on a diluted basis) on sales of $3.28 billion in the first quarter of 2001.

Excluding the integration charge of $9.4 million ($5.7 million after taxes) recorded in the first quarter of last year associated with the acquisition and integration of Wyle Electronics, net income and net income per share on a basic and diluted basis were $77.4 million, $.79, and $.74, respectively.

In accordance with recent changes to generally accepted accounting principles, the company's results no longer reflect the amortization of goodwill. If last year's results were restated to reflect the elimination of goodwill amortization, earnings would have increased by approximately $.11 per share.

"We remained modestly profitable in a very difficult market," stated Francis M. Scricco, President and Chief Executive Officer of Arrow, "and we continued to manage our balance sheet well, generating over $255 million in free cash flow from operations in the first quarter. Over the last 12 months free cash flow totaled nearly $1.8 billion."

Worldwide components revenue decreased by 4% sequentially to $1.35 billion. In North America, components revenue was down 9% to $654 million. Sales of the units serving core OEM customers in North America were virtually flat with both the third and fourth quarters of last year. Sales of the unit that serves contract manufacturers were up 3% versus the fourth quarter, the first sequential increase in a year. Lastly, while sales to telecom/networking customers continued to decline, the rate of sequential decline slowed considerably.

Total European sales of $626 million were essentially flat with the fourth quarter. The company noted that components sales in Europe, adjusted for foreign exchange, were up 11% over the fourth quarter. Sales in the Asia/Pacific region of $166 million were down 13% from the December quarter.

Worldwide computer products sales totaled $603 million. Despite an expected decline of 18% in the company's mid-range computer businesses from the seasonally strong fourth quarter, operating income as a percentage of sales amounted to a healthy 2.1%.

"Our team did a good job in a difficult quarter," said Mr. Scricco, "and our financial measures, such as gross profit, operating income, and return on working capital, reflect that. We are selling our value, and getting paid for it."

"Structurally, we are well positioned to support higher volume levels. It is inevitable that volume will increase -- it's just a question of how much and how soon. If historical cycles are a guide, we'd expect to see a gradual pick-up over the next couple of quarters, accelerating in Q4 and early 2003," he concluded.

Arrow Electronics is one of the world's largest distributors of electronic components and computer products and a leading provider of services to the electronics industry. Headquartered in Melville, New York, Arrow serves as a supply channel partner for more than 600 suppliers and over 175,000 original equipment manufacturers, contract manufacturers, and commercial customers through more than 200 sales facilities and 23 distribution centers in 40 countries. Detailed information about Arrow's operations can be found at www.arrow.com.

The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements. 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 are 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). 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
                                                    March 31,

                                           ---------------------------
                                              2002           2001(A)
                                              ----           -------

Sales                                      $1,952,240      $3,275,747
                                           ----------      ----------
Costs and expenses:
  Cost of products sold                     1,631,870       2,727,465
  Selling, general and
    administrative expenses                   256,994         326,463
  Depreciation and amortization                17,671          28,584
  Integration charge                                -           9,375
                                           ----------      ----------
                                            1,906,535       3,091,887

Operating income                               45,705         183,860

Equity in earnings (loss)
  of affiliated companies                         153            (396)

Interest expense                               41,164          65,907
                                           ----------      ----------

Earnings before income taxes
  and minority interest                         4,694         117,557

Provision for income taxes                      1,784          45,847
                                           ----------      ----------

Earnings before minority interest               2,910          71,710

Minority interest                                 126              31
                                           ----------      ----------

Net income                                 $    2,784      $   71,679
                                           ==========      ==========

Net income per share:
  Basic                                          $.03            $.73
                                                 ====            ====
  Diluted                                        $.03            $.68
                                                 ====            ====

Average number of shares outstanding:
  Basic                                        99,535          97,888
                                              =======         =======
  Diluted                                     101,266         107,491
                                              =======         =======


(A) Excluding the integration charge of $9.4 million, net income and
    net income per share on a basic and diluted basis were $77.4
    million, $.79, and $.74, respectively, for the three months ended
    March 31, 2001.

    This interim report is subject to independent audit at year-end.



                        ARROW ELECTRONICS, INC.
                      CONSOLIDATED BALANCE SHEET
                            (In thousands)



                                              March 31,    December 31,
                                                2002           2001

                                             ----------    ------------

Assets

Current assets:
  Cash and short-term investments            $  809,506    $  556,861
  Accounts receivable, net                    1,426,104     1,458,553
  Inventories                                 1,290,933     1,403,075
  Other                                          58,054        52,897
                                             ----------    ----------


Total current assets                          3,584,597     3,471,386

Property, plant and equipment, net              293,453       304,374
Investments in affiliated companies              35,479        32,917
Cost in excess of net assets of
  companies acquired, net of amortization     1,217,975     1,224,283
Other assets                                    347,194       326,024
                                             ----------    ----------
                                             $5,478,698    $5,358,984

Liabilities and Shareholders' Equity

Current liabilities:
  Accounts payable                           $  787,534    $  665,363
  Accrued expenses                              330,626       344,333
  Short-term borrowings                          22,151        37,289
                                             ----------    ----------

Total current liabilities                     1,140,311     1,046,985

Long-term debt                                2,460,970     2,441,983
Other                                           101,915       103,555
Shareholders' equity                          1,775,502     1,766,461
                                             ----------    ----------

                                             $5,478,698    $5,358,984


    This interim report is subject to independent audit at year-end.


                        ARROW ELECTRONICS, INC.
                          SEGMENT INFORMATION
                            (In thousands)



                                               Three Months Ended
                                                    March 31,

                                           ---------------------------
                                              2002           2001(A)
                                              ----           -------

Sales:
 Components                                $1,349,267      $2,487,773
 Computer products                            602,973         787,974
                                           ----------      ----------
  Consolidated                             $1,952,240      $3,275,747
                                           ==========      ==========


Operating income:
 Components                                $   50,068      $  215,044
 Computer products                             12,868           7,926
 Corporate                                    (17,231)        (39,110)
                                           ----------      ----------
  Consolidated                             $   45,705      $  183,860
                                           ==========      ==========



(A) Excluding the integration charge of $9.4 million, operating income
    was $193.2 million for the three months ended March 31, 2001.

    This interim report is subject to independent audit at year-end.