Arrow Electronics 2009 Annual Report Download - page 2

1 Annual Report 2009 | Arrow Electronics, Inc. |
To Our Fellow Shareholders:
The diffi cult economic environment that continued through 2009 resulted
in dramatic market weakening and uncertainty that affected every business.
While the challenging macroeconomic conditions had an impact on our Global
Components and Enterprise Computing Solutions businesses, our fi nancial and
market strength enabled us to weather the downturn throughout the year.
In our Global Components segment, while we would characterize the current
economic climate as “getting better, but still not well,” we have seen the
beginnings of stabilization in our North American business. Our Asia-Pacifi c
business continued its solid performance and posted year-over-year revenue
gains in 2009. In addition, the negative business conditions have moderated
in Europe.
The second half of 2009 saw our Enterprise Computing Solutions business
experiencing sequential sales increases in storage and services.
Regardless of the economic conditions, we have worked diligently to not only
protect but enhance Arrow’s fi nancial strength while focusing on sales growth,
prudent management of operating expenses and cash, and operational
effi ciency. These critical priorities, along with the immeasurable contributions of
our employees, have enabled us to remain profi table through one of the most
challenging economic periods in recent history.
I am proud of Arrow employees around the world who persevered through
the challenges of 2009 with a disciplined approach to operating expense
management. At the same time, our people remained focused on our strategy
to drive profi table market share gains, further enhancing Arrow’s industry-
leading market position.
As a result, Arrow’s fi nancial fundamentals are sound. Our company’s balance
sheet and capital structure remain strong, enabling Arrow to withstand volatility
in the marketplace. Our cash fl ow from operations was nearly $850 million
in 2009, and at year-end we had over $1.1 billion in cash. Combining our
cash position and over $1 billion of committed liquidity provides us with the
fl exibility to take advantage of opportunities that exist in the marketplace, invest
in growing profi table market share and enter new markets.
We pursued and put in place initiatives to simplify the business and reduce
expenses. The $225 million in permanent cost savings and operating effi ciencies
that we implemented in 2009 will fund long-term growth. We have done this
while still investing in growing the business, including our vertical markets and
geographic expansion.
We are also simplifying our business processes with the completion of our
enterprise resource planning (ERP) implementation across our Enterprise
Computing Solutions business in North America in 2009. This system streamlines
our business processes onto one platform so we can fully leverage our portfolio
Michael J. Long
Chairman, President
and Chief Executive Offi cer
Arrow Electronics is a global provider
of products, services and solutions
to industrial and commercial users of
electronic components and enterprise
computing solutions. Headquartered
in Melville, New York, Arrow serves
as a supply channel partner for over
900 suppliers and 125,000 original
equipment manufacturers, contract
manufacturers and commercial
customers through a global network of
more than 310 locations in 51 countries
and territories.