Arrow Electronics has reported fourth quarter 2007 net income of $114 million ($.93 and $.92 per share on a basic and diluted basis, respectively) on sales of $4.42 billion, compared with net income of $128.1 million ($1.05 and $1.04 per share on a basic and diluted basis, respectively) on sales of $3.49 billion in the fourth quarter of 2006. Sales increased 26 percent year over year. On a pro forma basis, sales increased nine percent year over year as acquisitions also benefited sales growth.

The company's results for the fourth quarters of 2007 and 2006 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 December 31, 2007 would have been $120.6 million ($.98 and $.97 per share on a basic and diluted basis, respectively) and net income for the quarter ended December 31, 2006, would have been $88.6 million ($.72 per share on both a basic and diluted basis).

“We finished 2007 with outstanding performance in the fourth quarter. Sales, working capital to sales, and return on working capital were all at record levels, and exceptional cash flow generation of $220 million in the fourth quarter brought 2007 operating cash flow to $851 million,” said William E. Mitchell, chairman, president and chief executive officer. “Our operating margin was again at an industry leading level and our balance sheet is at its strongest level in 10 years. We are doing this while continuing to invest in important initiatives that will take us to even greater levels of growth and profitability.”

Global enterprise computing solutions (“ECS”) sales of $1.61 billion increased 111 percent year over year. Growth was aided by the impact of the acquisitions of KeyLink Systems Group, Alternative Technology, Inc. and the storage and security distribution business of InTechnology plc. On a pro forma basis, sales increased 22 percent year over year on strong growth in proprietary servers, storage, software, and services. “Sales pro forma for acquisitions more than tripled the rate at which the overall market is expected to have grown and our operating margin strengthened significantly over last quarter, demonstrating the tremendous operating leverage in our business. Execution on our strategic objectives in 2007 has resulted in a much stronger organization with broader geographic reach into 22 countries, increased market share in the fast growing product segments of software and storage, and a more robust customer and supplier base. Arrow ECS is now the world's largest distributor of enterprise storage and security and virtualization software, and with increased scale, scope and capabilities, our strategy is resonating with our customers and suppliers,” added Mr. Mitchell.

Global components sales of $2.81 billion increased 3 percent year over year. “We again executed well and posted sales at the high end of expectations. In North America, we saw our first increase in daily run rate since the third quarter of 2006 and book to bill (the amount of sales booked for delivery as compared with sales that have been billed) was above one in each of the regions in which we operate. As we continued along the path to building best-in-class global capabilities and leveraging our global scale, we moved closer to our financial targets for the global components business in the fourth quarter. Operating income grew at more than three times the rate of sales growth and we reduced the amount of working capital needed to support sales by 160 basis points year over year. Our strategic initiatives around the world continue to take hold and we look forward to additional progress in the upcoming year,” Mr. Mitchell said.