Arrow Electronics has reported selected preliminary results for the second fiscal quarter ending June 29, 2019, and has laid down plans to close down the company’s personal computer and mobility asset disposition business.
The Key Updates Announced by Arrow include:
1) The company expects to provide full second-quarter results and guidance for the third quarter of 2019 on August 1, 2019.
2) Arrow Electronics has also initiated actions to close its personal computer and mobility asset disposition business, whose past results have been included as part of the global components business, in the US and most other countries in which this business operates. The company initiated the process of making its employees aware of the decision beginning on July 15, 2019. The company is also proposing to close this business in Sweden, Belgium, and the UK but will start the consultative process with employees’ representatives.
Michael J. Long, chairman, president and chief executive officer, commented, “This will allow us to continue to focus on our cross-enterprise strategy to enable next-generation technologies such as artificial intelligence, industrial automation, smart cities and vehicles.”
3) Arrow Electronics has also initiated separate and distinct actions to reduce its annual operating expenses, which are expected to generate approximately $130 million in annualized cost savings
“Our cost reduction program reflects our thoughtful approach to improving efficiency while continuing to deliver the high levels of engineering and supply chain services our customers expect,” said Chris Stansbury, senior vice president, and chief financial officer.
4) In addition, the company conducted an interim goodwill impairment analysis related to the Americas components and Asia-Pacific components reporting units and expects to record a non-cash goodwill impairment charge of approximately $570 million in the second quarter of 2019. The company is in the process of finalizing the impairment analysis and expects to provide a completed analysis in the form 10-Q filing for the second quarter of 2019.
5) The company expects to record non-cash charges of $36 million related to certain receivables and inventory in its global components business.
6) The company will be hosting a conference call to discuss the preliminary results and the wind-down on July 15, at 5:00 PM ET.
“While we are disappointed that our anticipated results for the second quarter are lower than we had initially expected due to deteriorating demand conditions in the global components business,” added Long.
The conference call will also be available via webcast.
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