To Our Shareholders:
Our performance in 2007 represents another year of accomplishment for Arrow Electronics.
We posted our fifth consecutive year of strong revenue performance, with record sales of $16 billion, an increase of almost 18 percent over 2006. In addition, productivity among our employees rose by 11 percent, the fifth consecutive year in which we realized an increase in this measure. Arrow’s success, as always, rests on the work of our 12,600 dedicated employees around the world. I thank each and every one of them for their commitment that has enabled us to make remarkable progress toward our long-term goals.
We were cash flow positive for the fifth consecutive year while also growing sales, a record in our history. And for the fourth consecutive year, return on invested capital – a critical measure in increasing shareholder value – was well in excess of our cost of capital.
We manage our business by balancing a strong financial discipline that creates shareholder value while investing in growing the company. Our return on invested capital has more than tripled over the past five years.
Operating income increased to $699 million compared to $622 million in 2006, and net income per share increased to $3.29 compared to $2.92 in 2006.* Our cash flow performance of $851 million was very
strong in 2007. The more than $4 billion in free cash flow generated over the past seven years gives us the financial capabilities to grow our business and deliver value for shareholders.
With a balance sheet that is the strongest in 10 years as a foundation, we continue to grow sales faster than the market, and over the last five years we have grown profits faster than sales – while investing in the long-term growth of Arrow.
Our goal is to drive industry-leading performance now, while investing strongly in our future for the growth and success of Arrow. Our vision remains the same: to be the clear number-one worldwide provider of products, services and solutions to connect technology with customers, to power the supply chain, and to deliver premium investment results for our shareholders.
The priorities that guided us in 2007 and will guide us in the years to come include targeting profitable growth areas where we see opportunity in our Global Components business and continuing the transformation and expansion of our Enterprise Computing Solutions business, while building shareholder value.
