Press release
Non-GAAP Earnings Per Share of $.84
MELVILLE, N.Y.--(BUSINESS WIRE)--July 23, 2008--Arrow Electronics, Inc. (NYSE:ARW) today reported second quarter 2008 net income of $96.2 million ($.79 per share on both a basic and diluted basis) on sales of $4.35 billion, compared with net income of $99.2 million ($.80 and $.79 per share on a basic and diluted basis, respectively) on sales of $4.04 billion in the second quarter of 2007. Sales increased 8 percent year over year. Excluding the impact of the acquisition of LOGIX S.A., which closed on June 2, sales increased 6 percent year over year. The company's results for the second quarters of 2008 and 2007 include a number of items outlined below that impact their comparability. A complete reconciliation of these items is provided under the heading "Certain Non-GAAP Financial Information." Excluding those items, on a non-GAAP basis, net income for the quarter ended June 30, 2008, would have been $102.1 million ($.84 per share on both a basic and diluted basis) and net income for the quarter ended June 30, 2007, would have been $101.5 million ($.82 and $.81 per share on a basic and diluted basis, respectively).
"This quarter's results exceeded our own expectations, driven by strong performance in both global components and global enterprise computing solutions. We continue to deliver on our strategy with near-record levels of performance across the board, despite the backdrop of an unsettled economy," said William E. Mitchell, chairman and chief executive officer. "We occupy a unique, value-added space in the supply chain with growth opportunities across many customer segments, end markets, geographies, and technologies. We will continue to create value for not only our business partners, but also our shareholders as we move forward with the strategy we have laid out to capture both profitable growth and improve our return on invested capital."
Global enterprise computing solutions ("ECS") sales of $1.39 billion increased 9 percent year over year. Excluding the impact of the acquisition of LOGIX S.A., sales increased 4 percent year over year and exceeded the company's guidance range. "ECS posted excellent results this quarter, as we generated sales above expectations and our operating margin returned to an industry-leading level. Performance year over year was driven by double-digit growth in storage, software, and services, with growth also in proprietary servers. We experienced strong sequential growth in all of our product segments and notable double-digit gains in proprietary servers. We also achieved a major enterprise resource planning system milestone with the successful transition of our North American Sun group without any delay in processing orders or shipping and receiving product," added Michael J. Long, president and chief operating officer.
Global components sales of $2.96 billion increased 7 percent year over year. "In global components, performance also came in above expectations with particularly strong, above-seasonal growth from our Asia Pacific region where we significantly outgrew the market. Our strategy in this region continues to pay off with prior investments driving gains in profitability. North America remained relatively stable and further efficiency improvements led to an operating margin increase year over year despite the challenging macro environment. And as we anticipated, conditions in Europe remained soft in the second quarter. Overall, the market remains relatively stable, yet cautious. In response, we continue to manage our business responsibly to take advantage of growth opportunities, while at the same time focusing on ways to further leverage our global scale to take us to the next level of profitability," Mr. Long said.
