-- Record Sales, Gross Profit, Operating Income, and Earnings Per Share --

-- Second-Quarter Earnings Per Share of $5.54; Non-GAAP Earnings Per Share of $5.78 --

Arrow Electronics, Inc. (NYSE:ARW) today reported second-quarter 2022 sales of $9.46 billion, an increase of 10 percent from sales of $8.56 billion in the second quarter of 2021. Second-quarter net income was $370 million, or $5.54 per share on a diluted basis, compared with net income of $241 million, or $3.23 per share on a diluted basis, in the second quarter of 2021. Non-GAAP net income¹ was $386 million, or $5.78 per share on a diluted basis, in the second quarter of 2022, compared with non-GAAP net income of $249 million, or $3.34 per share on a diluted basis, in the second quarter of 2021. In the second quarter of 2022, changes in foreign currencies had negative impacts on growth of approximately $291 million on sales and $0.17 on earnings per share on a diluted basis compared to the second quarter of 2021.

“We’ve continued to build and deliver on our record performance for the past several quarters. While market conditions are challenging, they also provide ample opportunities to demonstrate Arrow's commitment to the success of our customers and suppliers,” said Sean Kerins, president, and chief executive officer. “Thanks to the dedication and focused execution of our team, we delivered all-time record quarterly sales, gross profit, operating income, and earnings per share while in the face of ongoing supply and demand imbalance.”

Global components second-quarter sales of $7.46 billion reflected an increase of 13 percent year over year and non-GAAP sales increased 16 percent year over year. Asia-Pacific components second-quarter sales increased 1 percent year over year. Americas components second-quarter sales increased 26 percent year over year. Europe components second-quarter sales increased 21 percent year over year and non-GAAP sales in the region increased 37 percent year over year. Global components second-quarter operating income was $524 million, and second-quarter non-GAAP operating income was $531 million.

“Demand for electronic components and associated design, engineering and supply chain services remained strong. Past investments to enhance our capabilities, especially in the areas of engineering and supply chain capabilities, have led to advancements in profit performance. This is proof positive that we are uniquely positioned to help our customers navigate today’s challenges,” said Mr. Kerins.

Global enterprise computing solutions second-quarter sales of $2.00 billion reflected an increase of 2 percent year over year and non-GAAP sales increased 8 percent year over year. Europe enterprise computing solutions second-quarter sales increased 7 percent year over year and non-GAAP sales in the region increased 21 percent year over year. Americas enterprise computing solutions second-quarter sales decreased 1 percent year over year. Global enterprise computing solutions second-quarter operating income was $84 million, and second-quarter non-GAAP operating income was $86 million.

“Global demand for more complex, enterprise IT content was healthy, and while supply constraints represented a headwind to hardware sales, we saw strength in our software and cloud portfolios. We continue to see strength in cloud, software and enterprise solutions and are well positioned for the transition to IT-as-a-Service,” said Mr. Kerins.

“Our return on invested capital remains favorable, and our leverage ratios are near their lowest levels in ten years,” said Rick Seidlitz, vice president and interim principal financial officer. “Our strong profitability and the effective management of our balance sheet enabled us to deliver on our commitment to return cash to shareholders through the repurchase of approximately $225 million of shares in the second quarter of 2022. Our current repurchase authorization stands at approximately $288 million.”

THIRD-QUARTER 2022 OUTLOOK

• Consolidated sales of $8.92 billion to $9.52 billion, with global components sales of $7.17 billion to $7.47 billion, and global enterprise computing solutions sales of $1.75 billion to $2.05 billion

• Net income per share on a diluted basis of $5.11 to $5.27, and non-GAAP net income per share on a diluted basis of $5.27 to $5.43

• Average tax rate of approximately 23.5 percent compared to the long-term range of 23 to 25 percent

• Average diluted shares outstanding of 65 million

• Interest expense of approximately $46 million

• Expecting average USD-to-Euro exchange rate of $1.02 to €1; changes in foreign currencies to decrease sales by approximately $350 million, and earnings per share on a diluted basis by $.25 compared to the second quarter of 2021

Please refer to the CFO commentary, which can be found at investor.arrow.com, as a supplement to the company’s earnings release. The company uses its website as a tool to disclose important information about the company and comply with its disclosure obligations under Regulation Fair Disclosure.

Arrow Electronics guides innovation forward for over 220,000 leading technology manufacturers and service providers. With 2021 sales of $34 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, 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 for the third quarter of fiscal 2022 such as sales, net income per diluted share, non-GAAP net income per diluted share, average tax rate, average diluted shares outstanding, interest expense, average USD-to-Euro exchange rate, impact to sales due to changes in foreign currencies, intangible amortization expense per diluted share, restructuring & integration charges per diluted share, and expectation regarding market demand. These forward-looking statements 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: disruptions or inefficiencies in the supply chain, including any potential adverse effects of the ongoing global COVID-19 pandemic, impacts of the conflict in Ukraine, industry conditions, changes in product supply, pricing and customer demand, competition, other vagaries in the global components and the global enterprise computing solutions (“ECS”) markets, economic conditions, including changes in inflation rates, tax rates, or the availability of capital, changes in relationships with key suppliers, increased profit margin pressure, changes in legal and regulatory matters, non-compliance with certain regulations, such as export, antitrust, and anti-corruption laws, foreign tax and other loss contingencies, and the company's ability to generate cash flow. For a further discussion of these and other factors that could cause the company's future results to differ materially from any forward-looking statements, see the section entitled “Risk Factors” in the company's most recent Quarterly Report on Form 10-Q and the company's most recent Annual Report on Form 10-K, as well as in other filings the company makes with the Securities and Exchange Commission. 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.

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. The company provides non-GAAP sales, gross profit, operating income, income before income taxes, provision for income taxes, net income, noncontrolling interests, net income attributable to shareholders, effective tax rate and net income per share on a diluted basis, which are non-GAAP measures adjusted for the impact of changes in foreign currencies (referred to as "changes in foreign currencies") by re-translating prior-period results at current period foreign exchange rates, identifiable intangible asset amortization, restructuring, integration, and other charges, pension settlement loss and net gains and losses on investments. Management believes that providing this additional information is useful to the reader to better assess and understand the company’s operating performance, especially when comparing results with previous periods, primarily because management typically monitors the business adjusted for these items in addition to GAAP results. However, analysis of results on a non-GAAP basis should be used as a complement to, and in conjunction with, and not as a substitute for data presented in accordance with GAAP. A reconciliation of the company’s non-GAAP financial information to GAAP is set forth in the tables below.

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