-- First-Quarter Earnings Per Share of $4.60; Non-GAAP Earnings Per Share of $4.60 --

-- Revenue and EPS Exceeding Midpoint of Guidance --

Arrow Electronics, Inc. (NYSE:ARW) today reported first-quarter 2023 sales of $8.74 billion, a decrease of 4 percent year over year, and a decrease of 2 percent year over year on a constant currency basis¹. First-quarter net income was $274 million, or $4.60 per share on a diluted basis, compared with net income of $365 million, or $5.31 per share on a diluted basis, in the first quarter of 2022. Non-GAAP net income¹ was $274 million, or $4.60 per share on a diluted basis, in the first quarter of 2023, compared with non-GAAP net income of $373 million, or $5.43 per share on a diluted basis, in the first quarter of 2022. In the first quarter of 2023, changes in foreign currencies reduced sales by $203 million, and reduced earnings per share on a diluted basis by $0.13, compared to the first quarter of 2022.

“The company delivered solid first-quarter results with revenue and earnings per share beating the midpoint of our guidance,” said Sean Kerins, Arrow's president and chief executive officer. “Our dedicated team performed well in a challenging environment for both our suppliers and customers.”

Global components first-quarter sales of $6.86 billion reflected a decrease of 5 percent year over year, and a decrease of 3 percent year over year on a constant currency basis. Asia-Pacific components first-quarter sales decreased 19 percent year over year. Americas components first-quarter sales decreased 5 percent year over year. Europe components first-quarter sales increased 17 percent year over year, and increased 23 percent year over year on a constant currency basis. Global components first-quarter operating income was $418 million, and first-quarter non-GAAP operating income was $424 million.

“We are pleased with the overall performance of the global components business given the current market conditions, led by strength in the EMEA region. We were encouraged by the momentum of our design engagement in several of our markets,” said Mr. Kerins.

Global enterprise computing solutions (ECS) first-quarter sales of $1.88 billion were flat year over year and reflected an increase of 3 percent year over year on a constant currency basis. Europe enterprise computing solutions first-quarter sales increased 7 percent year over year and increased 13 percent year over year on a constant currency basis. Americas enterprise computing solutions first-quarter sales decreased 5 percent year over year. Global enterprise computing solutions first-quarter operating income was $81 million, and first-quarter non-GAAP operating income was $82 million.

“Our ECS business continues to perform in line with the overall market for enterprise IT, with better momentum in Europe, and a softer backdrop in the Americas. Additionally, we’re pleased to see signs of an improving supply environment,” said Mr. Kerins.

“Enhancing shareholder value remains a top priority,” said Raj Agrawal, senior vice president and chief financial officer. “Our strong financial returns and the effective management of our balance sheet have enabled us to return cash to shareholders by repurchasing $300 million of shares during the first quarter. Returning cash to shareholders through our stock repurchase plan remains one of our priorities. As of the end of the first quarter, our remaining repurchase authorization stands at approximately $1 billion.”

SECOND-QUARTER 2023 OUTLOOK

• Consolidated sales of $8.42 billion to $9.02 billion, with global components sales of $6.64 billion to $7.04 billion, and global enterprise computing solutions sales of $1.78 billion to $1.98 billion
• Net income per share on a diluted basis of $4.10 to $4.30, and non-GAAP net income per share on a diluted basis of $4.25 to $4.45
• Average tax rate of approximately 23.5 percent compared to the long-term range of 23 to 25 percent
• Average diluted shares outstanding of 57.95 million
• Interest expense of approximately $90 million
• Changes in foreign currencies expected to increase year-over-year growth in sales by $12 million, not expected to have a significant impact on earnings per share on a diluted basis compared to the second quarter of 2022
• Changes in foreign currencies expected to increase quarter-over-quarter growth in sales by $54 million and earnings per share on a diluted basis by $0.04 compared to the first quarter of 2023
• On a constant currency basis, our second-quarter sales guidance implies a sequential growth rate range of down 4 percent to up 2 percent for global components and down 6 percent to up 4 percent for global enterprise computing solutions, when compared to the first quarter of 2023

CFO Commentary

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 to comply with its disclosure obligations under Regulation Fair Disclosure.

Conference Call Information

Arrow Electronics will host a conference call to discuss first-quarter 2023 financial results on May 4, 2023, at 1:00 PM ET. Register online at https://conferencingportals.com/event/gniMxNyn to obtain dial-in information to access the live conference call. The conference call will also be available via live webcast at investor.arrow.com. Shortly after the conclusion of the conference call, a webcast replay will be available at investor.arrow.com.

About Arrow Electronics

Arrow Electronics guides innovation forward for over 210,000 leading technology manufacturers and service providers. With 2022 sales of $37 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 second quarter of fiscal 2023 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: unfavorable economic conditions; disruptions or inefficiencies in the supply chain, including any potential adverse effects of the ongoing global COVID-19 pandemic; political instability; impacts of military conflict, including the conflict in Ukraine; industry conditions; changes in product supply, pricing and customer demand; competition; other vagaries in the global components and the global ECS markets; deteriorating economic conditions, including economic recession, inflation, tax rates, foreign currency exchange rates, or the availability of capital; the effects of natural or man-made catastrophic events; 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, operating income, income before income taxes, provision for income taxes, consolidated 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" or "on a constant currency basis") by re-translating prior-period results at current period foreign exchange rates, identifiable intangible asset amortization, restructuring, integration, and other charges, 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 and future prospects in the same manner as management, especially when comparing results with previous periods. Management typically monitors the business as adjusted for these items, in addition to GAAP results, to understand and compare operating results across accounting periods, for internal budgeting purposes, for short- and long-term operating plans, and to evaluate the company's financial performance. However, analysis of results on a non-GAAP basis should be used as a complement to, in conjunction with, and not as a substitute for, data presented in accordance with GAAP.

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