The ratings on Melville, N.Y.-based Arrow Electronics, Inc. reflect a leading market position and good operating performance in the face of challenging industry conditions. These factors are offset by highly competitive, relatively low-margin industry characteristics, as well as variable profitability and debt protection metrics due to volatility in industry demand. Arrow is one of the leading global electronic components and computer products distributors. Arrow reported revenues of $11.2 billion in fiscal 2005, up almost 5% from the prior year. While visibility of industry demand is very limited, moderate growth conditions are expected to continue into 2006. At lower growth rates, competitive pricing pressures make it more of a challenge for distributors to maintain profitability levels. Nevertheless, ongoing cost reductions and
