|
UNITED STATES |
|
SECURITIES AND EXCHANGE COMMISSION |
|
WASHINGTON, D.C. 20549 |
|
FORM 10-Q |
|
[X] |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE |
|
SECURITIES EXCHANGE ACT OF 1934 |
|
For the quarterly period ended June 30, 2003 |
|
OR |
|
[ ] |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE |
|
SECURITIES EXCHANGE ACT OF 1934 |
|
For the transition period from to |
|
Commission file number 1-4482 |
|
ARROW ELECTRONICS, INC. |
|
(Exact name of Registrant as specified in its charter) |
|
New York |
11-1806155 |
||
|
(State or other jurisdiction of |
|
|
(I.R.S. Employer |
|
incorporation or organization) |
|
|
Identification Number) |
|
50 Marcus Drive, Melville, New York |
11747 |
||
|
(Address of principal executive |
|
|
(Zip Code) |
|
offices) |
|
|
|
|
Registrant's telephone number, |
|
|
|
|
including area code |
|
|
(631) 847-2000 |
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
|
Yes X |
No |
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).
|
Yes X |
No |
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.
Common stock, $1 par value: 100,823,804 shares outstanding at August 1, 2003.
TABLE OF CONTENTS
ARROW ELECTRONICS, INC.
INDEX
|
|
|
Page |
|
Part I. |
Financial Information |
|
|
|
|
|
|
|
Item 1. |
Financial Statements |
|
|
|
Consolidated Statement of Operations |
3 |
|
|
Consolidated Balance Sheet |
4 |
|
|
Consolidated Statement of Cash Flows |
5 |
|
|
Notes to Consolidated Financial Statements |
6 |
|
|
|
|
|
Item 2. |
Management's Discussion and Analysis of Financial |
|
|
|
Condition and Results of Operations |
19 |
|
|
|
|
|
Item 3. |
Quantitative and Qualitative Disclosure |
|
|
|
About Market Risk |
26 |
|
|
|
|
|
Item 4. |
Controls and Procedures |
27 |
|
|
|
|
|
Part II. |
Other Information |
|
|
|
|
|
|
|
Item 4. |
Submission of Matters to a Vote of Security |
|
|
|
Holders |
28 |
|
|
|
|
|
Item 6. |
Exhibits and Reports on Form 8-K |
28 |
|
|
|
|
|
Signature |
|
29 |
|
|
|
|
|
2
Item 1. Financial Statements.
ARROW ELECTRONICS, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands except per share data)
(Unaudited)
|
|
Three Months Ended |
|
|
|
Six Months Ended |
|
||||||||
|
|
June 30, |
|
|
|
June 30, |
|
||||||||
|
|
2003 |
|
|
|
2002 |
|
|
|
2003 |
|
|
|
2002 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales |
$ |
2,123,139 |
|
|
$ |
1,843,317 |
|
|
$ |
4,103,244 |
|
|
$ |
3,687,856 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of products sold |
|
1,768,036 |
|
|
|
1,523,729 |
|
|
|
3,413,084 |
|
|
|
3,053,736 |
|
|
Selling, general and administrative expenses |
|
281,651 |
|
|
|
257,158 |
|
|
|
551,427 |
|
|
|
509,348 |
|
|
Depreciation and amortization |
|
18,045 |
|
|
|
16,639 |
|
|
|
34,957 |
|
|
|
34,310 |
|
|
Restructuring charges |
|
14,552 |
|
|
|
- |
|
|
|
21,242 |
|
|
|
- |
|
|
Integration charge |
|
- |
|
|
|
- |
|
|
|
6,904 |
|
|
|
- |
|
|
Severance charge |
|
- |
|
|
|
5,375 |
|
|
|
- |
|
|
|
5,375 |
|
|
|
2,082,284 |
|
|
|
1,802,901 |
|
|
|
4,027,614 |
|
|
|
3,602,769 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
40,855 |
|
|
|
40,416 |
|
|
|
75,630 |
|
|
|
85,087 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings of affiliated companies |
|
1,070 |
|
|
|
813 |
|
|
|
1,385 |
|
|
|
966 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on prepayment of debt |
|
390 |
|
|
|
- |
|
|
|
2,942 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
31,869 |
|
|
|
40,830 |
|
|
|
65,165 |
|
|
|
82,072 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes and minority interest |
|
9,666 |
|
|
|
399 |
|
|
|
8,908 |
|
|
|
3,981 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes |
|
2,653 |
|
|
|
33 |
|
|
|
2,698 |
|
|
|
1,404 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before minority interest |
|
7,013 |
|
|
|
366 |
|
|
|
6,210 |
|
|
|
2,577 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Minority interest |
|
186 |
|
|
|
(210 |
) |
|
|
288 |
|
|
|
(84 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations |
|
6,827 |
|
|
|
576 |
|
|
|
5,922 |
|
|
|
2,661 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from discontinued operations, net of taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(including net loss from disposal of $6,120) |
|
- |
|
|
|
(6,610 |
) |
|
|
- |
|
|
|
(5,911 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before cumulative effect |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of change in accounting principle |
|
6,827 |
|
|
|
(6,034 |
) |
|
|
5,922 |
|
|
|
(3,250 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cumulative effect of change in accounting |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
principle |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(603,709 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
$ |
6,827 |
|
|
$ |
(6,034 |
) |
|
$ |
5,922 |
|
|
$ |
(606,959 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per basic share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations |
$ |
.07 |
|
|
$ |
.01 |
|
|
$ |
.06 |
|
|
$ |
.03 |
|
|
Loss from discontinued operations |
|
- |
|
|
|
(.07 |
) |
|
|
- |
|
|
|
(.06 |
) |
|
Cumulative effect of change in accounting |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
principle |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(6.06 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per basic share |
$ |
.07 |
|
|
$ |
(.06 |
) |
|
$ |
.06 |
|
|
$ |
(6.09 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per diluted share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations |
$ |
.07 |
|
|
$ |
.01 |
|
|
$ |
.06 |
|
|
$ |
.03 |
|
|
Loss from discontinued operations |
|
- |
|
|
|
(.07 |
) |
|
|
- |
|
|
|
(.06 |
) |
|
Cumulative effect of change in accounting |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
principle |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(5.96 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per diluted share |
$ |
.07 |
|
|
$ |
(.06 |
) |
|
$ |
.06 |
|
|
$ |
(5.99 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average number of shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
100,127 |
|
|
|
99,813 |
|
|
|
100,036 |
|
|
|
99,667 |
|
|
Diluted |
|
100,980 |
|
|
|
101,019 |
|
|
|
100,744 |
|
|
|
101,283 |
|
See accompanying notes.
3
ARROW ELECTRONICS, INC.
CONSOLIDATED BALANCE SHEET
(Dollars in thousands)
|
June 30, |
|
|
December 31, |
|
||||
|
2003 |
|
|
|
|
2002 |
|
||
|
(Unaudited) |
|
|
|
|
|
|
||
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and short-term investments |
|
$ |
725,582 |
|
|
|
$ |
694,092 |
|
|
Accounts receivable, net |
|
|
1,593,751 |
|
|
|
|
1,378,562 |
|
|
Inventories |
|
|
1,386,687 |
|
|
|
|
1,201,271 |
|
|
Prepaid expenses and other assets |
|
|
53,956 |
|
|
|
|
59,810 |
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets |
|
|
3,759,976 |
|
|
|
|
3,333,735 |
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment at cost: |
|
|
|
|
|
|
|
|
|
|
Land |
|
|
43,106 |
|
|
|
|
42,805 |
|
|
Buildings and improvements |
|
|
190,258 |
|
|
|
|
186,427 |
|
|
Machinery and equipment |
|
|
406,478 |
|
|
|
|
384,689 |
|
|
|
|
639,842 |
|
|
|
|
613,921 |
|
|
Less accumulated depreciation and amortization |
|
|
(349,319 |
) |
|
|
|
(314,403 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
290,523 |
|
|
|
|
299,518 |
|
|
|
|
|
|
|
|
|
|
|
|
Investments in affiliated companies |
|
|
35,420 |
|
|
|
|
32,527 |
|
|
Cost in excess of net assets of companies acquired |
|
|
865,581 |
|
|
|
|
748,368 |
|
|
Other assets |
|
|
276,980 |
|
|
|
|
253,457 |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
5,228,480 |
|
|
|
$ |
4,667,605 |
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
1,009,345 |
|
|
|
$ |
917,271 |
|
|
Accrued expenses |
|
|
328,099 |
|
|
|
|
258,774 |
|
|
Short-term borrowings, including current portion |
|
|
|
|
|
|
|
|
|
|
of long-term debt |
|
|
202,819 |
| |||||