Arrow Electronics, Inc. (NYSE:ARW) today reported second-quarter 2019 sales of $7.34 billion, a decrease of 1 percent from sales of $7.39 billion in the second quarter of 2018. Second-quarter sales, as adjusted, increased 2 percent year over year. The company reported a second-quarter net loss of $549 million, or $(6.48) per share on a diluted basis, compared with net income of $170 million, or $1.92 per share on a diluted basis, in the second quarter of 2018. Excluding certain items1, net income would have been $137 million, or $1.60 per share on a diluted basis, in the second quarter of 2019, compared with net income of $194 million, or $2.19 per share on a diluted basis, in the second quarter of 2018. In the second quarter of 2019, changes in foreign currencies negatively impacted growth by approximately $148 million or 2 percent on sales and $.06 or 2 percent on earnings per share on a diluted basis compared to the second quarter of 2018.
Global components second-quarter sales of $5.27 billion were flat year over year. Sales, as adjusted, increased 2 percent year over year. Europe components sales decreased 2 percent year over year. Sales in the region, as adjusted, increased 4 percent year over year. Asia-Pacific components sales increased 4 percent year over year. Americas components sales decreased 3 percent year over year. Global components second-quarter operating loss was $562 million. Second-quarter operating income, excluding amortization of intangibles expense, as adjusted, was $207 million.
“Despite facing challenging market conditions in the second quarter, and an ongoing inventory correction, we are encouraged by the significant progress we continue to make in executing our long-term strategy,” said Michael J. Long, chairman, president, and chief executive officer. “We are leveraging our integrated solutions and expanded reach to drive innovation forward for our customers, and remain committed to continuing to expand engineering services and lead the convergence of information technology with operational technology. We are confident that the steps we are taking today to strengthen our focus on the key technology areas of smart cities, smart homes, and smart connected vehicles, will not only enhance shareholder value, but also improve people's lives.”
Global enterprise computing solutions second-quarter sales of $2.07 billion decreased 2 percent year over year. Sales, as adjusted, increased 1 percent year over year. Europe enterprise computing solutions sales decreased 3 percent year over year. Sales in the region, as adjusted, increased 5 percent year over year. Americas enterprise computing solutions sales decreased 1 percent year over year. Sales in the region, as adjusted, were flat year over year. Global enterprise computing solutions second-quarter operating income was $98 million. Second-quarter operating income, excluding amortization of intangibles expense, as adjusted, totaled $101 million.
“Arrow is committed to capitalizing on opportunities available to us, and to that end, we continue to align and evolve our enterprise computing solutions business toward advanced, higher-value software-led solutions,” said Mr. Long. “We are pleased that our infrastructure software and security solutions again produced healthy growth on a year-over-year basis in the second quarter.”
“Second-quarter cash provided by operating activities was $405 million. As we advance our efforts to reduce working capital and use our strong, countercyclical cash flow to position the company for long-term profit acceleration when market conditions improve, we also remain focused on preserving near-term profitability. We have commenced our previously announced cost optimization program, and are executing on our plan to drive efficiencies while generating approximately $130 million in annualized cost savings,” said Chris Stansbury, senior vice president and chief financial officer. “We remain committed to returning excess cash to shareholders. Consistent with this commitment, we returned approximately $150 million to shareholders through our stock repurchase program during the second quarter. At the end of the quarter, we had approximately $539 million of remaining authorization under our share repurchase program.”
1 A reconciliation of non-GAAP adjusted financial measures, including sales, as adjusted, operating income, as adjusted, net income attributable to shareholders, as adjusted, and net income per share, as adjusted, to GAAP financial measures is presented in the reconciliation tables included herein.
GUIDANCE
“Our third-quarter outlook excludes the financial results from the PC and mobility asset disposition business. As we look to the third quarter, we expect total sales to range between $6.850 billion and $7.250 billion, with global components sales between $4.925 billion and $5.125 billion, and global enterprise computing solutions sales between $1.925 billion and $2.125 billion. As a result of this outlook, we expect earnings per share on a diluted basis to range from $.97 to $1.09, and earnings per share on a diluted basis, excluding certain items1, to range from $1.62 to $1.74 per share. Our guidance assumes interest expense will total approximately $54 million. Our guidance also assumes an average tax rate at the high end of the long-term range of 23.5 percent to 25.5 percent, and average diluted shares outstanding of approximately 85 million. We are expecting the average USD-to-Euro exchange rate for the third quarter to be approximately $1.12 to €1. We estimate changes in foreign currencies will have a negative impact on growth of approximately $90 million, or 1 percent on sales, and $.05, or 2 percent, on earnings per share on a diluted basis compared to the third quarter of 2018,” said Mr. Stansbury.
Please refer to the CFO commentary, which can be found at investor.arrow.com, as a supplement to the company’s earnings release.
Arrow Electronics guides innovation forward for over 200,000 leading technology manufacturers and service providers. With 2018 sales of $30 billion, Arrow develops technology solutions that improve business and daily life. Learn more at fiveyearsout.com.
Information Relating to Forward-Looking Statements
This press release includes forward-looking statements that are subject to numerous assumptions, 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, the company's implementation of its new enterprise resource planning system, changes in product supply, pricing and customer demand, competition, other vagaries in the global components and global enterprise computing solutions markets, changes in relationships with key suppliers, increased profit margin pressure, the effects of additional actions taken to become more efficient or lower costs, risks related to the integration of acquired businesses, changes in legal and regulatory matters, and the company’s ability to generate additional cash flow. Forward-looking statements are those statements which are not statements of historical fact. These forward-looking statements can be identified by forward-looking words such as "expects," "anticipates," "intends," "plans," "may," "will," "believes," "seeks," "estimates," and similar expressions. 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 of the forward-looking statements.
For a further discussion of factors to consider in connection with these forward-looking statements, investors should refer to Item 1A Risk Factors of the company’s Annual Report on Form 10-K for the year ended Dec. 31, 2018.
Certain Non-GAAP Financial Information
In addition to disclosing financial results that are determined in accordance with accounting principles generally accepted in the United States (“GAAP”), the company also provides certain non-GAAP financial information relating to sales, operating income, net income attributable to shareholders, and net income per basic and diluted share.
The company provides sales, gross profit, and operating expense on a non-GAAP basis adjusted for the impact of changes in foreign currencies (referred to as “impact of changes in foreign currencies”) by re-translating prior period results at current period foreign exchange rates, the impact of dispositions by adjusting the company’s operating results for businesses disposed, as if the dispositions had occurred at the beginning of the earliest period presented (referred to as “impact of dispositions”), the impact of the company's personal computer and mobility asset disposition business (referred to as "impact of wind down"), the impact of inventory reserves related to the digital business (referred to as "impact of digital inventory reserve"), and the impact of the notes receivable and inventory reserve related to the AFS business (referred to as "AFS notes receivable reserve" and "AFS inventory reserve," respectively). Operating income is adjusted to exclude identifiable intangible asset amortization, restructuring, integration, and other charges, and loss on disposition of businesses, net, AFS notes receivable and inventory reserve, digital inventory reserve, the impact of non-cash charges related to goodwill, tradenames, and property, plant and equipment, and the impact of wind down. Net income attributable to shareholders, and net income per basic and diluted share are adjusted to exclude identifiable intangible asset amortization, restructuring, integration, and other charges, and loss on disposition of businesses, net, AFS notes receivable and inventory reserve, digital inventory reserve, the impact of non-cash charges related to goodwill, tradenames, and property, plant and equipment, the impact of wind down, and the impact of U.S. tax reform. A reconciliation of the company’s non-GAAP financial information to GAAP is set forth in the tables below.
The company believes that such non-GAAP financial information is useful to investors to assist in assessing and understanding the company’s operating performance and underlying trends in the company’s business because management considers these items referred to above to be outside the company’s core operating results. This non-GAAP financial information is among the primary indicators management uses as a basis for evaluating the company’s financial and operating performance. In addition, the company’s Board of Directors may use this non-GAAP financial information in evaluating management performance and setting management compensation.
The presentation of this additional non-GAAP financial information is not meant to be considered in isolation or as a substitute for, or alternative to, sales, operating income, net income and net income per basic and diluted share determined in accordance with GAAP. Analysis of results and outlook on a non-GAAP basis should be used as a complement to, and in conjunction with, data presented in accordance with GAAP.
ARROW ELECTRONICS, INC. | ||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
(In thousands except per share data) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Quarter Ended | Six Months Ended | |||||||||||||||
June 29, 2019 | June 30, 2018 | June 29, 2019 | June 30, 2018 | |||||||||||||
Sales | $ | 7,344,548 | $ | 7,392,528 | $ | 14,500,539 | $ | 14,268,141 | ||||||||
Cost of sales | 6,529,639 | 6,459,708 | 12,823,942 | 12,466,377 | ||||||||||||
Gross profit | 814,909 | 932,820 | 1,676,597 | 1,801,764 | ||||||||||||
Operating expenses: | ||||||||||||||||
Selling, general, and administrative expenses | 599,212 | 580,388 | 1,155,288 | 1,143,357 | ||||||||||||
Depreciation and amortization | 46,982 | 46,422 | 94,508 | 93,669 | ||||||||||||
Loss on disposition of businesses, net | — | — | 866 | 1,562 | ||||||||||||
Impairments | 697,993 | — | 697,993 | — | ||||||||||||
Restructuring, integration, and other charges | 19,912 | 19,183 | 31,572 | 40,354 | ||||||||||||
1,364,099 | 645,993 | 1,980,227 | 1,278,942 | |||||||||||||
Operating income (loss) | (549,190 | ) | 286,827 | (303,630 | ) | 522,822 | ||||||||||
Equity in earnings (losses) of affiliated companies | 382 | 517 | (1,085 | ) | (156 | ) | ||||||||||
Gain (loss) on investments, net | 1,390 | (2,563 | ) | 6,738 | (5,015 | ) | ||||||||||
Employee benefit plan expense | 1,139 | 1,257 | 2,278 | 2,488 | ||||||||||||
Interest and other financing expense, net | 51,563 | 60,803 | 103,544 | 105,982 | ||||||||||||
Income (loss) before income taxes | (600,120 | ) | 222,721 | (403,799 | ) | 409,181 | ||||||||||
Provision (benefit) for income taxes | (52,369 | ) | 51,681 | 1,538 | 98,271 | |||||||||||
Consolidated net income (loss) | (547,751 | ) | 171,040 | (405,337 | ) | 310,910 | ||||||||||
Noncontrolling interests | 1,215 | 1,125 | 2,894 | 1,901 | ||||||||||||
Net income (loss) attributable to shareholders | $ | (548,966 | ) | $ | 169,915 | $ | (408,231 | ) | $ | 309,009 | ||||||
Net income (loss) per share: | ||||||||||||||||
Basic | $ | (6.48 | ) | $ | 1.94 | $ | (4.80 | ) | $ | 3.52 | ||||||
Diluted | $ | (6.48 | ) | $ | 1.92 | $ | (4.80 | ) | $ | 3.48 | ||||||
Weighted-average shares outstanding: | ||||||||||||||||
Basic | 84,652 | 87,802 | 85,022 | 87,878 | ||||||||||||
Diluted | 84,652 | 88,652 | 85,022 | 88,841 | ||||||||||||
ARROW ELECTRONICS, INC. | ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
(In thousands except par value) | ||||||||
(Unaudited) | ||||||||
June 29, 2019 | December 31, 2018 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 269,989 | $ | 509,327 | ||||
Accounts receivable, net | 7,976,603 | 8,945,463 | ||||||
Inventories | 3,596,613 | 3,878,678 | ||||||
Other current assets | 267,151 | 274,832 | ||||||
Total current assets | 12,110,356 | 13,608,300 | ||||||
Property, plant, and equipment, at cost: | ||||||||
Land | 7,873 | 7,882 | ||||||
Buildings and improvements | 156,124 | 158,712 | ||||||
Machinery and equipment | 1,443,901 | 1,425,933 | ||||||
1,607,898 | 1,592,527 | |||||||
Less: Accumulated depreciation and amortization | (793,981 | ) | (767,827 | ) | ||||
Property, plant, and equipment, net | 813,917 | 824,700 | ||||||
Investments in affiliated companies | 86,157 | 83,693 | ||||||
Intangible assets, net | 290,236 | 372,644 | ||||||
Goodwill | 2,067,499 | 2,624,690 | ||||||
Other assets | 656,204 | 270,418 | ||||||
Total assets | $ | 16,024,369 | $ | 17,784,445 | ||||
LIABILITIES AND EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 6,245,068 | $ | 7,631,879 | ||||
Accrued expenses | 853,735 | 912,292 | ||||||
Short-term borrowings, including current portion of long-term debt | 279,158 | 246,257 | ||||||
Total current liabilities | 7,377,961 | 8,790,428 | ||||||
Long-term debt | 3,157,274 | 3,239,115 | ||||||
Other liabilities | 666,419 | 378,536 | ||||||
Commitments and contingencies | ||||||||
Equity: | ||||||||
Shareholders’ equity: | ||||||||
Common stock, par value $1: | ||||||||
Authorized - 160,000 shares in both 2019 and 2018, respectively | ||||||||
Issued - 125,424 shares in both 2019 and 2018, respectively | 125,424 | 125,424 | ||||||
Capital in excess of par value | 1,136,649 | 1,135,934 | ||||||
Treasury stock (42,283 and 40,233 shares in 2019 and 2018, respectively), at cost | (2,139,743 | ) | (1,972,254 | ) | ||||
Retained earnings | 5,927,104 | 6,335,335 | ||||||
Accumulated other comprehensive loss | (280,709 | ) | (299,449 | ) | ||||
Total shareholders’ equity | 4,768,725 | 5,324,990 | ||||||
Noncontrolling interests | 53,990 | 51,376 | ||||||
Total equity | 4,822,715 | 5,376,366 | ||||||
Total liabilities and equity | $ | 16,024,369 | $ | 17,784,445 | ||||
ARROW ELECTRONICS, INC. | ||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
(In thousands) | ||||||||
(Unaudited) | ||||||||
Quarter Ended | ||||||||
June 29, 2019 | June 30, 2018 | |||||||
Cash flows from operating activities: | ||||||||
Consolidated net income (loss) | $ | (547,751 | ) | $ | 171,040 | |||
Adjustments to reconcile consolidated net income (loss) to net cash provided by (used for) operations: | ||||||||
Depreciation and amortization | 46,982 | 46,422 | ||||||
Amortization of stock-based compensation | 8,539 | 12,619 | ||||||
Equity in losses of affiliated companies | (382 | ) | (517 | ) | ||||
Deferred income taxes | (78,814 | ) | 15,524 | |||||
Impairments | 697,993 | — | ||||||
(Gain) loss on investments, net | (1,390 | ) | 2,563 | |||||
Other | 6,381 | 2,140 | ||||||
Change in assets and liabilities, net of effects of acquired and disposed businesses: | ||||||||
Accounts receivable | (54,436 | ) | (863,490 | ) | ||||
Inventories | 143,740 | (239,297 | ) | |||||
Accounts payable | 193,832 | 451,093 | ||||||
Accrued expenses | (21,102 | ) | 21,571 | |||||
Other assets and liabilities | 11,826 | (29,440 | ) | |||||
Net cash provided by (used for) operating activities | 405,418 | (409,772 | ) | |||||
Cash flows from investing activities: | ||||||||
Cash consideration paid for acquired businesses, net of cash acquired | — | (96 | ) | |||||
Proceeds from disposition of businesses | 9,460 | — | ||||||
Acquisition of property, plant, and equipment | (47,821 | ) | (31,816 | ) | ||||
Other | — | (3,500 | ) | |||||
Net cash used for investing activities | (38,361 | ) | (35,412 | ) | ||||
Cash flows from financing activities: | ||||||||
Change in short-term and other borrowings | (66,112 | ) | 77,995 | |||||
(Payments) proceeds from long-term bank borrowings, net | (216,046 | ) | 157,948 | |||||
Proceeds from exercise of stock options | 2,691 | 993 | ||||||
Repurchases of common stock | (146,999 | ) | (20,038 | ) | ||||
Other | (147 | ) | (156 | ) | ||||
Net cash provided by (used for) financing activities | (426,613 | ) | 216,742 | |||||
Effect of exchange rate changes on cash | (22,354 | ) | 10,317 | |||||
Net decrease in cash and cash equivalents | (81,910 | ) | (218,125 | ) | ||||
Cash and cash equivalents at beginning of period | 351,899 | 548,644 | ||||||
Cash and cash equivalents at end of period | 269,989 | 330,519 | ||||||
ARROW ELECTRONICS, INC. | ||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
(In thousands) | ||||||||
(Unaudited) | ||||||||
Six Months Ended | ||||||||
June 29, 2019 | June 30, 2018 | |||||||
Cash flows from operating activities: | ||||||||
Consolidated net income (loss) | $ | (405,337 | ) | $ | 310,910 | |||
Adjustments to reconcile consolidated net income (loss) to net cash provided by (used for) operations: | ||||||||
Depreciation and amortization | 94,508 | 93,669 | ||||||
Amortization of stock-based compensation | 27,629 | 25,662 | ||||||
Equity in losses of affiliated companies | 1,085 | 156 | ||||||
Deferred income taxes | (71,846 | ) | 12,706 | |||||
Impairments | 697,993 | — | ||||||
(Gain) loss on investments, net | (6,738 | ) | 5,015 | |||||
Other | 11,956 | 5,605 | ||||||
Change in assets and liabilities, net of effects of acquired and disposed businesses: | ||||||||
Accounts receivable | 895,553 | (73,647 | ) | |||||
Inventories | 278,142 | (499,917 | ) | |||||
Accounts payable | (1,346,176 | ) | (240,725 | ) | ||||
Accrued expenses | (71,394 | ) | (516 | ) | ||||
Other assets and liabilities | (28,956 | ) | (123,767 | ) | ||||
Net cash provided by (used for) operating activities | 76,419 | (484,849 | ) | |||||
Cash flows from investing activities: | ||||||||
Cash consideration paid for acquired businesses, net of cash acquired | — | (331,563 | ) | |||||
Proceeds from disposition of businesses | 9,460 | 34,291 | ||||||
Acquisition of property, plant, and equipment | (81,636 | ) | (66,551 | ) | ||||
Other | 2,940 | (8,000 | ) | |||||
Net cash used for investing activities | (69,236 | ) | (371,823 | ) | ||||
Cash flows from financing activities: | ||||||||
Change in short-term and other borrowings | (173,356 | ) | 59,613 | |||||
Proceeds from long-term bank borrowings, net | 118,977 | 759,334 | ||||||
Redemption of notes | — | (300,000 | ) | |||||
Proceeds from exercise of stock options | 9,622 | 5,985 | ||||||
Repurchases of common stock | (200,924 | ) | (72,551 | ) | ||||
Other | (147 | ) | (156 | ) | ||||
Net cash provided by (used for) financing activities | (245,828 | ) | 452,225 | |||||
Effect of exchange rate changes on cash | (693 | ) | 4,883 | |||||
Net decrease in cash and cash equivalents | (239,338 | ) | (399,564 | ) | ||||
Cash and cash equivalents at beginning of period | 509,327 | 730,083 | ||||||
Cash and cash equivalents at end of period | $ | 269,989 | $ | 330,519 | ||||
ARROW ELECTRONICS, INC. | |||||||||||
NON-GAAP SALES RECONCILIATION | |||||||||||
(In thousands) | |||||||||||
(Unaudited) | |||||||||||
Quarter Ended | |||||||||||
June 29, 2019 | June 30, 2018 | % Change | |||||||||
Consolidated sales, as reported | $ | 7,344,548 | $ | 7,392,528 | (0.6 | )% | |||||
Impact of changes in foreign currencies | — | (147,506 | ) | ||||||||
Impact of dispositions and wind down | (77,914 | ) | (113,445 | ) | |||||||
Consolidated sales, as adjusted | $ | 7,266,634 | $ | 7,131,577 | 1.9 | % | |||||
Global components sales, as reported | $ | 5,270,935 | $ | 5,284,364 | (0.3 | )% | |||||
Impact of changes in foreign currencies | — | (99,842 | ) | ||||||||
Impact of dispositions and wind down | (77,914 | ) | (100,372 | ) | |||||||
Global components sales, as adjusted | $ | 5,193,021 | $ | 5,084,150 | 2.1 | % | |||||
Americas Components sales, as reported | $ | 1,876,799 | $ | 1,937,882 | (3.2 | )% | |||||
Impact of changes in foreign currencies | — | (1,611 | ) | ||||||||
Impact of dispositions and wind down | (60,860 | ) | (73,962 | ) | |||||||
Americas Components sales, as adjusted | $ | 1,815,939 | $ | 1,862,309 | (2.5 | )% | |||||
Europe components sales, as reported | $ | 1,415,888 | $ | 1,447,972 | (2.2 | )% | |||||
Impact of changes in foreign currencies | — | (81,728 | ) | ||||||||
Impact of dispositions and wind down | (17,054 | ) | (26,410 | ) | |||||||
Europe components sales, as adjusted | $ | 1,398,834 | $ | 1,339,834 | 4.4 | % | |||||
Asia components sales, as reported | $ | 1,978,248 | $ | 1,898,510 | 4.2 | % | |||||
Impact of changes in foreign currencies | — | (16,503 | ) | ||||||||
Asia components sales, as adjusted | $ | 1,978,248 | $ | 1,882,007 | 5.1 | % | |||||
Global ECS sales, as reported | $ | 2,073,613 | $ | 2,108,164 | (1.6 | )% | |||||
Impact of changes in foreign currencies | — | (47,664 | ) | ||||||||
Impact of dispositions | — | (13,073 | ) | ||||||||
Global ECS sales, as adjusted | $ | 2,073,613 | $ | 2,047,427 | 1.3 | % | |||||
Europe ECS sales, as reported | $ | 701,157 | $ | 721,130 | (2.8 | )% | |||||
Impact of changes in foreign currencies | — | (38,339 | ) | ||||||||
Impact of dispositions | — | (13,073 | ) | ||||||||
Europe ECS sales, as adjusted | $ | 701,157 | $ | 669,718 | 4.7 | % | |||||
Americas ECS sales, as reported | $ | 1,372,456 | $ | 1,387,034 | (1.1 | )% | |||||
Impact of changes in foreign currencies | — | (9,325 | ) | ||||||||
Americas ECS sales, as adjusted | $ | 1,372,456 | $ | 1,377,709 | (0.4 | )% | |||||
ARROW ELECTRONICS, INC. | |||||||||||
NON-GAAP SALES RECONCILIATION | |||||||||||
(In thousands) | |||||||||||
(Unaudited) | |||||||||||
Six Months Ended | |||||||||||
June 29, 2019 | June 30, 2018 | % Change | |||||||||
Consolidated sales, as reported | $ | 14,500,539 | $ | 14,268,141 | 1.6 | % | |||||
Impact of changes in foreign currencies | — | (344,336 | ) | ||||||||
Impact of dispositions and wind down | (172,109 | ) | (261,608 | ) | |||||||
Consolidated sales, as adjusted | $ | 14,328,430 | $ | 13,662,197 | 4.9 | % | |||||
Global components sales, as reported | $ | 10,462,862 | $ | 10,214,296 | 2.4 | % | |||||
Impact of changes in foreign currencies | — | (229,563 | ) | ||||||||
Impact of dispositions and wind down | (160,968 | ) | (207,784 | ) | |||||||
Global components sales, as adjusted | $ | 10,301,894 | $ | 9,776,949 | 5.4 | % | |||||
Americas Components sales, as reported | $ | 3,783,828 | $ | 3,734,580 | 1.3 | % | |||||
Impact of changes in foreign currencies | — | (4,138 | ) | ||||||||
Impact of dispositions and wind down | (123,726 | ) | (152,354 | ) | |||||||
Americas Components sales, as adjusted | $ | 3,660,102 | $ | 3,578,088 | 2.3 | % | |||||
Europe components sales, as reported | $ | 2,919,254 | $ | 2,926,358 | (0.2 | )% | |||||
Impact of changes in foreign currencies | — | (196,117 | ) | ||||||||
Impact of dispositions and wind down | (37,242 | ) | (55,430 | ) | |||||||
Europe components sales, as adjusted | $ | 2,882,012 | $ | 2,674,811 | 7.7 | % | |||||
Asia components sales, as reported | $ | 3,759,780 | $ | 3,553,358 | 5.8 | % | |||||
Impact of changes in foreign currencies | — | (29,308 | ) | ||||||||
Asia components sales, as adjusted | $ | 3,759,780 | $ | 3,524,050 | 6.7 | % | |||||
Global ECS sales, as reported | $ | 4,037,677 | $ | 4,053,845 | (0.4 | )% | |||||
Impact of changes in foreign currencies | — | (114,773 | ) | ||||||||
Impact of dispositions | (11,141 | ) | (53,824 | ) | |||||||
Global ECS sales, as adjusted | $ | 4,026,536 | $ | 3,885,248 | 3.6 | % | |||||
Europe ECS sales, as reported | $ | 1,464,314 | $ | 1,471,400 | (0.5 | )% | |||||
Impact of changes in foreign currencies | — | (94,054 | ) | ||||||||
Impact of dispositions | (11,141 | ) | (26,331 | ) | |||||||
Europe ECS sales, as adjusted | $ | 1,453,173 | $ | 1,351,015 | 7.6 | % | |||||
Americas ECS sales, as reported | $ | 2,573,363 | $ | 2,582,445 | (0.4 | )% | |||||
Impact of changes in foreign currencies | — | (20,719 | ) | ||||||||
Impact of dispositions | — | (27,493 | ) | ||||||||
Americas ECS sales, as adjusted | $ | 2,573,363 | $ | 2,534,233 | 1.5 | % | |||||
ARROW ELECTRONICS, INC. | ||||||||||||||||||||||||||||
NON-GAAP EARNINGS RECONCILIATION | ||||||||||||||||||||||||||||
(In thousands except per share data) | ||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||
Three months ended June 29, 2019 | ||||||||||||||||||||||||||||
Reported
|
Intangible
|
Restructuring
|
AFS Write
|
Digital Write
| Impairments(1) |
Impact of
| Other(2) |
Non-GAAP
| ||||||||||||||||||||
Sales | $ | 7,344,548 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | (77,914 | ) | $ | — | $ | 7,266,634 | |||||||||
Gross Profit | 814,909 | — | — | 1,868 | 20,114 | — | 4,305 | — | 841,196 | |||||||||||||||||||
Operating income | (549,190 | ) | 8,665 | 19,906 | 15,851 | 20,114 | 623,085 | 104,219 | — | 242,650 | ||||||||||||||||||
Income before income taxes | (600,120 | ) | 8,665 | 19,906 | 15,851 | 20,114 | 623,085 | 104,229 | (1,390 | ) | 190,340 | |||||||||||||||||
Provision for income taxes | (52,369 | ) | 2,463 | 4,865 | 3,910 | 4,962 | 64,246 | 24,730 | (382 | ) | 52,425 | |||||||||||||||||
Consolidated net income | (547,751 | ) | 6,202 | 15,041 | 11,941 | 15,152 | 558,839 | 79,499 | (1,008 | ) | 137,915 | |||||||||||||||||
Noncontrolling interests | 1,215 | 140 | — | — | — | — | — | — | 1,355 | |||||||||||||||||||
Net income attributable to shareholders | $ | (548,966 | ) | $ | 6,062 | $ | 15,041 | $ | 11,941 | $ | 15,152 | $ | 558,839 | $ | 79,499 | $ | (1,008 | ) | $ | 136,560 | ||||||||
Net income per diluted share(5) | $ | (6.48 | ) | $ | 0.07 | $ | 0.18 | $ | 0.14 | $ | 0.18 | $ | 6.60 | $ | 0.94 | $ | (0.01 | ) | $ | 1.60 | ||||||||
Effective tax rate | 8.7 | % | 27.5 | % | ||||||||||||||||||||||||
Three months ended June 30, 2018 | ||||||||||||||||||||||||||||
Reported
|
Intangible
|
Restructuring
|
AFS Write
|
Digital Write
| Impairments |
Impact of
| Other(2) |
Non-GAAP
| ||||||||||||||||||||
Sales | $ | 7,392,528 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | (100,372 | ) | $ | — | $ | 7,292,156 | |||||||||
Gross Profit | 932,820 | — | — | — | — | — | (17,079 | ) | — | 915,741 | ||||||||||||||||||
Operating income | 286,827 | 9,161 | 11,654 | — | — | — | 9,482 | — | 317,124 | |||||||||||||||||||
Income before income taxes | 222,721 | 9,161 | 11,654 | — | — | — | 9,536 | 2,563 | 255,635 | |||||||||||||||||||
Provision for income taxes | 51,681 | 2,540 | 2,893 | — | — | — | 2,545 | 631 | 60,290 | |||||||||||||||||||
Consolidated net income | 171,040 | 6,621 | 8,761 | — | — | — | 6,991 | 1,932 | 195,345 | |||||||||||||||||||
Noncontrolling interests | 1,125 | 149 | — | — | — | — | — | — | 1,274 | |||||||||||||||||||
Net income attributable to shareholders | $ | 169,915 | $ | 6,472 | $ | 8,761 | $ | — | $ | — | $ | — | $ | 6,991 | $ | 1,932 | $ | 194,071 | ||||||||||
Net income per diluted share | $ | 1.92 | $ | 0.07 | $ | 0.10 | $ | — | $ | — | $ | — | $ | 0.08 | $ | 0.02 | $ | 2.19 | ||||||||||
Effective tax rate | 23.2 | % | 23.6 | % | ||||||||||||||||||||||||
ARROW ELECTRONICS, INC. | ||||||||||||||||||||||||||||
NON-GAAP EARNINGS RECONCILIATION | ||||||||||||||||||||||||||||
(In thousands except per share data) | ||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||
Six months ended June 29, 2019 | ||||||||||||||||||||||||||||
Reported
|
Intangible
|
Restructuring
|
AFS Write
|
Digital Write
| Impairments(1) |
Impact of
| Other(3) |
Non-GAAP
| ||||||||||||||||||||
Sales | $ | 14,500,539 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | (160,968 | ) | $ | — | $ | 14,339,571 | |||||||||
Gross Profit | 1,676,597 | — | — | 1,868 | 20,114 | — | (3,822 | ) | — | 1,694,757 | ||||||||||||||||||
Operating income | (303,630 | ) | 17,807 | 30,992 | 15,851 | 20,114 | 623,085 | 114,415 | 866 | 519,500 | ||||||||||||||||||
Income before income taxes | (403,799 | ) | 17,807 | 30,992 | 15,851 | 20,114 | 623,085 | 114,572 | (5,872 | ) | 412,750 | |||||||||||||||||
Provision for income taxes | 1,538 | 5,003 | 7,576 | 3,910 | 4,962 | 64,246 | 27,258 | (5,203 | ) | 109,290 | ||||||||||||||||||
Consolidated net income | (405,337 | ) | 12,804 | 23,416 | 11,941 | 15,152 | 558,839 | 87,314 | (669 | ) | 303,460 | |||||||||||||||||
Noncontrolling interests | 2,894 | 282 | — | — | — | — | — | — | 3,176 | |||||||||||||||||||
Net income attributable to shareholders | $ | (408,231 | ) | $ | 12,522 | $ | 23,416 | $ | 11,941 | $ | 15,152 | $ | 558,839 | $ | 87,314 | $ | (669 | ) | $ | 300,284 | ||||||||
Net income per diluted share(5) | $ | (4.80 | ) | $ | 0.15 | $ | 0.28 | $ | 0.14 | $ | 0.18 | $ | 6.57 | $ | 1.03 | $ | (0.01 | ) | $ | 3.50 | ||||||||
Effective tax rate | (0.4 | )% | 26.5 | % | ||||||||||||||||||||||||
Six months ended June 30, 2018 | ||||||||||||||||||||||||||||
Reported
|
Intangible
|
Restructuring
|
AFS Write
|
Digital Write
| Impairments |
Impact of
| Other(4) |
Non-GAAP
| ||||||||||||||||||||
Sales | $ | 14,268,141 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | (207,784 | ) | $ | — | $ | 14,060,357 | |||||||||
Gross Profit | 1,801,764 | — | — | — | — | — | (36,747 | ) | — | 1,765,017 | ||||||||||||||||||
Operating income | 522,822 | 19,877 | 28,560 | — | — | — | 14,828 | 1,562 | 587,649 | |||||||||||||||||||
Income before income taxes | 409,181 | 19,877 | 28,560 | — | — | — | 14,928 | 6,577 | 479,123 | |||||||||||||||||||
Provision for income taxes | 98,271 | 5,471 | 7,575 | — | — | — | 4,092 | 1,413 | 116,822 | |||||||||||||||||||
Consolidated net income | 310,910 | 14,406 | 20,985 | — | — | — | 10,836 | 5,164 | 362,301 | |||||||||||||||||||
Noncontrolling interests | 1,901 | 302 | — | — | — | — | — | — | 2,203 | |||||||||||||||||||
Net income attributable to shareholders | $ | 309,009 | $ | 14,104 | $ | 20,985 | $ | — | $ | — | $ | — | $ | 10,836 | $ | 5,164 | $ | 360,098 | ||||||||||
Net income per diluted share(5) | $ | 3.48 | $ | 0.16 | $ | 0.24 | $ | — | $ | — | $ | — | $ | 0.12 | $ | 0.06 | $ | 4.05 | ||||||||||
Effective tax rate | 24.0 | % | 24.4 | % | ||||||||||||||||||||||||
(1) Impairments include goodwill impairments of $570,175, tradename impairments of $46,000, and $6,910 in impairment charges related to various other fixed assets. | ||||||||||||||||||||||||||||
(2) Other includes gain (loss) on investments, net | ||||||||||||||||||||||||||||
(3) Other includes loss on disposition of businesses, net and gain (loss) on investments, net and impact of Tax Act. | ||||||||||||||||||||||||||||
(4) Other includes loss on disposition of businesses, net and gain (loss) on investments, net. | ||||||||||||||||||||||||||||
(5) For the three months and six months ended June 29, 2019, the non-GAAP net income per diluted share calculation includes 649 thousand shares and 758 thousand shares, respectively, that were excluded from the GAAP net income per diluted share calculation. Additionally, in all periods presented the sum of the components for diluted EPS, as adjusted may not agree to totals, as presented, due to rounding. | ||||||||||||||||||||||||||||
(6) Amounts for restructuring, integration, and other charges, and identifiable intangible asset amortization related to the personal computer and mobility asset disposition business are included in “impact of wind down” above. | ||||||||||||||||||||||||||||
ARROW ELECTRONICS, INC. | ||||||||||||||||
SEGMENT INFORMATION | ||||||||||||||||
(In thousands) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Quarter Ended | Six Months Ended | |||||||||||||||
June 29, 2019 | June 30, 2018 | June 29, 2019 | June 30, 2018 | |||||||||||||
Sales: | ||||||||||||||||
Global components | $ | 5,270,935 | $ | 5,284,364 | $ | 10,462,862 | $ | 10,214,296 | ||||||||
Global ECS | 2,073,613 | 2,108,164 | 4,037,677 | 4,053,845 | ||||||||||||
Consolidated | $ | 7,344,548 | $ | 7,392,528 | $ | 14,500,539 | $ | 14,268,141 | ||||||||
Operating income (loss): | ||||||||||||||||
Global components | $ | (561,878 | ) | $ | 253,840 | $ | (327,346 | ) | $ | 483,386 | ||||||
Global ECS | 98,388 | 109,417 | 185,106 | 193,223 | ||||||||||||
Corporate (a) | (85,700 | ) | (76,430 | ) | (161,390 | ) | (153,787 | ) | ||||||||
Consolidated | $ | (549,190 | ) | $ | 286,827 | $ | (303,630 | ) | $ | 522,822 | ||||||
(a) | Includes restructuring, integration, and other charges of $19.9 million and $31.6 million for the second quarter and first six months of 2019, and $19.2 million and $40.4 million for the second quarter and first six months of 2018, respectively. |
NON-GAAP SEGMENT RECONCILIATION | ||||||||||||||||
Quarter Ended | Six Months Ended | |||||||||||||||
June 29, 2019 | June 30, 2018 | June 29, 2019 | June 30, 2018 | |||||||||||||
Global components operating income, as reported | $ | (561,878 | ) | $ | 253,840 | $ | (327,346 | ) | $ | 483,386 | ||||||
Intangible assets amortization expense (b) | 5,807 | 5,900 | 12,060 | 11,695 | ||||||||||||
Impairments | 623,085 | — | 623,085 | — | ||||||||||||
Impact of wind-down (b) | 104,213 | 1,953 | 113,835 | 3,034 | ||||||||||||
AFS notes receivable reserve | 15,851 | — | 15,851 | — | ||||||||||||
Digital inventory reserve | 20,114 | — | 20,114 | — | ||||||||||||
Global components operating income, as adjusted | $ | 207,192 | $ | 261,693 | $ | 457,599 | $ | 498,115 | ||||||||
Global ECS operating income, as reported | $ | 98,388 | $ | 109,417 | $ | 185,106 | $ | 193,223 | ||||||||
Intangible assets amortization expense | 2,858 | 3,261 | 5,747 | 8,182 | ||||||||||||
Global ECS operating income, as adjusted | $ | 101,246 | $ | 112,678 | $ | 190,853 | $ | 201,405 | ||||||||
(b) | Impact of wind down includes intangible asset amortization expense related to the personal computer and mobility asset disposition business. Impact of wind down excludes restructuring, integration, and other charges as they are reported on the corporate entity. |
ARROW ELECTRONICS, INC. | |||||||||||||||||||||||||||
NON-GAAP EARNINGS RECONCILIATIONS ADJUSTED FOR WIND DOWN | |||||||||||||||||||||||||||
(In thousands except per share data) | |||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||
Below are previously reported non-GAAP earnings reconciliations for the years 2017, 2018 and 2019 adjusted to exclude the personal computer and mobility asset disposition business (referred to as "impact of wind down"). | |||||||||||||||||||||||||||
Three months ended March 30, 2019 | |||||||||||||||||||||||||||
Reported
|
Intangible
|
Restructuring
|
AFS Write
|
Digital Write
| Impairments(1) |
Impact of
| Other(2) |
Non-GAAP
| |||||||||||||||||||
Sales | $ | 7,155,991 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | (83,054 | ) | $ | — | 7,072,937 | |||||||||
Gross Profit | 861,688 | — | — | — | — | — | (8,127 | ) | — | 853,561 | |||||||||||||||||
Operating income | 245,560 | 9,142 | 11,086 | — | — | — | 10,196 | 866 | 276,850 | ||||||||||||||||||
Income before income taxes | 196,321 | 9,142 | 11,086 | — | — | — | 10,343 | (4,482 | ) | 222,410 | |||||||||||||||||
Provision for income taxes | 53,907 | 2,540 | 2,711 | — | — | — | 2,528 | (4,821 | ) | 56,865 | |||||||||||||||||
Consolidated net income | 142,414 | 6,602 | 8,375 | — | — | — | 7,815 | 339 | 165,545 | ||||||||||||||||||
Noncontrolling interests | 1,679 | 142 | — | — | — | — | — | — | 1,821 | ||||||||||||||||||
Net income attributable to shareholders | $ | 140,735 | $ | 6,460 | $ | 8,375 | $ | — | $ | — | $ | — | $ | 7,815 | $ | 339 | $ | 163,724 | |||||||||
Net income per diluted share(4) | $ | 1.63 | $ | 0.07 | $ | 0.10 | $ | — | $ | — | $ | — | $ | 0.09 | $ | — | $ | 1.90 | |||||||||
Effective tax rate | 27.5 | % | 25.6 | % | |||||||||||||||||||||||
ARROW ELECTRONICS, INC. | ||||||||||||||||||||||
NON-GAAP EARNINGS RECONCILIATION | ||||||||||||||||||||||
(In thousands except per share data) | ||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||
Three months ended March 31, 2018 | ||||||||||||||||||||||
Reported
|
Intangible
|
Restructuring
|
Impact of Tax
|
Impact of
| Other(5) |
Non-GAAP
| ||||||||||||||||
Sales | $ | 6,875,613 | $ | — | $ | — | $ | — | $ | (107,412 | ) | $ | — | $ | 6,768,201 | |||||||
Gross profit | 868,944 | — | — | — | (19,668 | ) | — | 849,276 | ||||||||||||||
Operating income | 235,995 | 10,716 | 16,906 | — | 5,346 | 1,562 | 270,525 | |||||||||||||||
Income before income taxes | 186,460 | 10,716 | 16,906 | — | 5,392 | 4,014 | 223,488 | |||||||||||||||
Provision for income taxes | 46,590 | 2,931 | 4,682 | — | 1,547 | 782 | 56,532 | |||||||||||||||
Consolidated net income | 139,870 | 7,785 | 12,224 | — | 3,845 | 3,232 | 166,956 | |||||||||||||||
Noncontrolling interests | 776 | 153 | — | — | — | — | 929 | |||||||||||||||
Net income attributable to shareholders | $ | 139,094 | $ | 7,632 | $ | 12,224 | $ | — | $ | 3,845 | $ | 3,232 | $ | 166,027 | ||||||||
Net income per diluted share(4) | $ | 1.56 | $ | 0.09 | $ | 0.14 | $ | — | $ | 0.04 | $ | 0.04 | $ | 1.86 | ||||||||
Effective tax rate | 25.0 | % | 25.3 | % | ||||||||||||||||||
Three months ended June 30, 2018 | ||||||||||||||||||||||
Reported
|
Intangible
|
Restructuring
|
Impact of Tax
|
Impact of
| Other(3) |
Non-GAAP
| ||||||||||||||||
Sales | $ | 7,392,528 | $ | — | $ | — | $ | — | $ | (100,372 | ) | $ | — | $ | 7,292,156 | |||||||
Gross profit | 932,820 | — | — | — | (17,079 | ) | — | 915,741 | ||||||||||||||
Operating income | 286,827 | 9,161 | 11,654 | — | 9,482 | — | 317,124 | |||||||||||||||
Income before income taxes | 222,721 | 9,161 | 11,654 | — | 9,536 | 2,563 | 255,635 | |||||||||||||||
Provision for income taxes | 51,681 | 2,540 | 2,893 | — | 2,545 | 631 | 60,290 | |||||||||||||||
Consolidated net income | 171,040 | 6,621 | 8,761 | — | 6,991 | 1,932 | 195,345 | |||||||||||||||
Noncontrolling interests | 1,125 | 149 | — | — | — | — | 1,274 | |||||||||||||||
Net income attributable to shareholders | $ | 169,915 | $ | 6,472 | $ | 8,761 | $ | — | $ | 6,991 | $ | 1,932 | $ | 194,071 | ||||||||
Net income per diluted share | $ | 1.92 | $ | 0.07 | $ | 0.10 | $ | — | $ | 0.08 | $ | 0.02 | $ | 2.19 | ||||||||
Effective tax rate | 23.2 | % | 23.6 | % | ||||||||||||||||||
Three months ended September 30, 2018 | ||||||||||||||||||||||
Reported
|
Intangible
|
Restructuring
|
Impact of Tax
|
Impact of
| Other(5) |
Non-GAAP
| ||||||||||||||||
Sales | $ | 7,490,445 | $ | — | $ | — | $ | — | $ | (104,958 | ) | $ | — | $ | 7,385,487 | |||||||
Gross profit | 923,778 | — | — | — | (17,397 | ) | — | 906,381 | ||||||||||||||
Operating income | 290,310 | 8,845 | 9,611 | — | 611 | 2,042 | 311,419 | |||||||||||||||
Income before income taxes | 235,227 | 8,845 | 9,611 | — | 633 | 972 | 255,288 | |||||||||||||||
Provision for income taxes | 57,054 | 2,539 | 2,454 | — | 304 | 240 | 62,591 | |||||||||||||||
Consolidated net income | 178,173 | 6,306 | 7,157 | — | 329 | 732 | 192,697 | |||||||||||||||
Noncontrolling interests | 1,640 | 145 | — | — | — | — | 1,785 | |||||||||||||||
Net income attributable to shareholders | $ | 176,533 | $ | 6,161 | $ | 7,157 | $ | — | $ | 329 | $ | 732 | $ | 190,912 | ||||||||
Net income per diluted share | $ | 1.99 | $ | 0.07 | $ | 0.08 | $ | — | $ | — | $ | 0.01 | $ | 2.15 | ||||||||
Effective tax rate | 24.3 | % | 24.5 | % | ||||||||||||||||||
Three months ended December 31, 2018 | ||||||||||||||||||||||
Reported
|
Intangible
|
Restructuring
|
Impact of Tax
|
Impact of
| Other(6) |
Non-GAAP
| ||||||||||||||||
Sales | $ | 7,918,182 | $ | — | $ | — | $ | — | $ | (102,965 | ) | $ | — | $ | 7,815,217 | |||||||
Gross profit | 975,370 | — | — | — | (16,947 | ) | — | 958,423 | ||||||||||||||
Operating income | 334,380 | 9,493 | 11,126 | — | 4,471 | — | 359,470 | |||||||||||||||
Income before income taxes | 264,965 | 9,493 | 11,126 | — | 4,114 | 11,886 | 301,584 | |||||||||||||||
Provision for income taxes | 32,474 | 2,772 | 4,786 | 28,323 | 1,635 | 3,025 | 73,015 | |||||||||||||||
Consolidated net income | 232,491 | 6,721 | 6,340 | (28,323 | ) | 2,479 | 8,861 | 228,569 | ||||||||||||||
Noncontrolling interests | 1,838 | 142 | — | — | — | — | 1,980 | |||||||||||||||
Net income attributable to shareholders | $ | 230,653 | $ | 6,579 | $ | 6,340 | $ | (28,323 | ) | $ | 2,479 | $ | 8,861 | $ | 226,589 | |||||||
Net income per diluted share | $ | 2.63 | $ | 0.08 | $ | 0.07 | $ | (0.32 | ) | $ | 0.03 | $ | 0.10 | $ | 2.59 | |||||||
Effective tax rate | 12.3 | % | 24.2 | % | ||||||||||||||||||
ARROW ELECTRONICS, INC. | ||||||||||||||||||||||
NON-GAAP EARNINGS RECONCILIATION | ||||||||||||||||||||||
(In thousands except per share data) | ||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||
Twelve months ended December 31, 2018 | ||||||||||||||||||||||
Reported
|
Intangible
|
Restructuring
|
Impact of Tax
|
Impact of
| Other(7) |
Non-GAAP
| ||||||||||||||||
Sales | $ | 29,676,768 | $ | — | $ | — | $ | — | $ | (415,707 | ) | $ | — | $ | 29,261,061 | |||||||
Gross profit | 3,700,912 | — | — | — | (71,091 | ) | — | 3,629,821 | ||||||||||||||
Operating income | 1,147,512 | 38,215 | 49,297 | — | 19,910 | 3,604 | 1,258,538 | |||||||||||||||
Income before income taxes | 909,373 | 38,215 | 49,297 | — | 19,675 | 19,435 | 1,035,995 | |||||||||||||||
Provision for income taxes | 187,799 | 10,782 | 14,815 | 28,323 | 6,031 | 4,678 | 252,428 | |||||||||||||||
Consolidated net income | 721,574 | 27,433 | 34,482 | (28,323 | ) | 13,644 | 14,757 | 783,567 | ||||||||||||||
Noncontrolling interests | 5,379 | 589 | — | — | — | — | 5,968 | |||||||||||||||
Net income attributable to shareholders | $ | 716,195 | $ | 26,844 | $ | 34,482 | $ | (28,323 | ) | $ | 13,644 | $ | 14,757 | $ | 777,599 | |||||||
Net income per diluted share | $ | 8.10 | $ | 0.30 | $ | 0.39 | $ | (0.32 | ) | $ | 0.15 | $ | 0.17 | $ | 8.79 | |||||||
Effective tax rate | 20.7 | % | 24.4 | % | ||||||||||||||||||
Twelve months ended December 31, 2017 (Adjusted) | ||||||||||||||||||||||
Reported
|
Intangible
|
Restructuring
|
Impact of Tax
|
Impact of
| Other(7) |
Non-GAAP
| ||||||||||||||||
Sales | $ | 26,554,563 | $ | — | $ | — | $ | — | $ | (387,953 | ) | $ | — | $ | 26,166,610 | |||||||
Gross profit | 3,356,968 | — | — | — | (80,834 | ) | — | 3,276,134 | ||||||||||||||
Operating income | 945,736 | 38,684 | 71,707 | — | 10,045 | 21,000 | 1,087,172 | |||||||||||||||
Income before income taxes | 693,917 | 38,684 | 71,707 | — | 10,254 | 103,828 | 918,390 | |||||||||||||||
Provision for income taxes | 286,541 | 13,790 | 21,753 | (124,748 | ) | 6,597 | 40,070 | 244,003 | ||||||||||||||
Consolidated net income | 407,376 | 24,894 | 49,954 | 124,748 | 3,657 | 63,758 | 674,387 | |||||||||||||||
Noncontrolling interests | 5,200 | 701 | — | — | — | — | 5,901 | |||||||||||||||
Net income attributable to shareholders | $ | 402,176 | $ | 24,193 | $ | 49,954 | $ | 124,748 | $ | 3,657 | $ | 63,758 | $ | 668,486 | ||||||||
Net income per diluted share | $ | 4.48 | $ | 0.27 | $ | 0.56 | $ | 1.39 | $ | 0.04 | $ | 0.71 | $ | 7.45 | ||||||||
Effective tax rate | 41.3 | % | 26.6 | % | ||||||||||||||||||
(1) Impairments for the three months ended June 29, 2019 include goodwill impairments of $570,175, tradename impairments of $46,000, and $6,910 in impairment charges related to various other fixed assets. | ||||||||||||||||||||||
(2) Other includes loss on disposition of businesses, net and gain (loss) on investments, net and impact of Tax Act. | ||||||||||||||||||||||
(3) Other includes gain (loss) on investments, net | ||||||||||||||||||||||
(4) The sum of the components for diluted EPS, as adjusted may not agree to totals, as presented, due to rounding. | ||||||||||||||||||||||
(5) Other includes gain (loss) on investments, net and loss on disposition of businesses, net. | ||||||||||||||||||||||
(6) Other includes gain (loss) on investments, net and pension settlement. | ||||||||||||||||||||||
(7) Other includes loss on disposition of businesses, net and gain (loss) on investments, net and pension settlement. | ||||||||||||||||||||||
(8) Amounts for restructuring, integration, and other charges, and identifiable intangible asset amortization related to the personal computer and mobility asset disposition business are included in “impact of wind down” above. | ||||||||||||||||||||||
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