Diluted EPS of $1.23 and Adjusted Diluted
EPS of $1.39 on Record 4th Quarter Sales of $1.67 Billion
Fourth Quarter
Highlights
- Organic sales up 4% on a per day
basis
- ECS organic sales up 7%, reflecting
11% growth in organic security sales, on a per day basis
- Emerging markets organic sales up 9%
on a per day basis
Anixter International Inc. (NYSE: AXE) today reported sales of
$1.67 billion for the quarter ended January 2, 2015, a 4.4 percent
increase compared to the year-ago quarter. Excluding the impact of
the following items, organic sales decreased by 2.1 percent,
year-over-year:
- $145.4 million favorable impact from
the acquisition of Tri-Ed
- $10.1 million unfavorable impact from
the lower average price of copper
- $30.5 million unfavorable impact from
the fluctuation in foreign exchange
The current quarter had 61 billing days, compared to 65 billing
days in the prior year period, which negatively impacts
year-over-year sales comparisons by approximately 6.4 percent. On a
per day basis, organic sales increased approximately 4.3 percent.
Sequential sales were favorably impacted by $117.4 million from the
acquisition of Tri-Ed, offset by $20.9 million unfavorable foreign
exchange, and three fewer billing days this quarter. Sequentially,
sales decreased 0.9 percent on a per day organic basis which
follows historical seasonal trends.
Operating income of $88.8 million compares to $95.6 million in
the prior year quarter. Excluding the negative impact of $2.6
million of acquisition and strategic tax project costs, adjusted
operating income of $91.4 million compares to $95.6 million in the
prior year quarter, a 4.4 percent decrease. Further adjusting for
the negative impact of $2.1 million from lower average copper
prices and $1.3 million negative impact from currency fluctuations,
adjusted operating income would have been $94.8 million, down 1.0
percent from the prior year.
Adjusted EBITDA of $106.9 million compares to $106.6 million in
the prior year quarter. Including the negative impacts of $2.6
million from acquisition and strategic tax project costs, $2.6
million of foreign exchange, and $3.5 million in stock
compensation, EBITDA of $98.2 million compares to $99.2 million in
the prior year quarter.
Adjusted net income of $46.4 million compares to $53.3 million
in the prior year quarter. Including the negative impact of $1.6
million, net of tax, related to acquisition and strategic tax
project costs as well as a $3.7 million negative impact related to
the increase in our effective tax rate driven by a change in the
country mix of earnings, fourth quarter 2014 reported net income of
$41.1 million compares to $58.1 million in the prior year
quarter.
Including the negative impact of $0.05 for acquisition and
strategic tax project costs and the negative impact of $0.11 for
the change in the country mix of earnings, reported diluted
earnings per share of $1.23 compares to $1.75 in the prior year
quarter. Adjusted diluted earnings per share of $1.39 compares to
$1.61 in the prior year quarter with approximately 70 percent of
this decline driven by currency, copper and tax rate.
"While Enterprise Cabling and Security Solutions, our largest
segment, delivered its second consecutive quarter of strong global
performance, our Electrical and Electronic Wire and Cable segment
performed below our expectations. Our Fasteners segment experienced
strong favorable trends in both North America and Emerging Markets
geographies, which were offset by the impacts of the challenging
economic environment in continental Europe and the previously
disclosed transition of one customer to a dual source supply
program at the end of 2013," commented Bob Eck, President and CEO.
"From a geographic perspective, we delivered strong growth in
Emerging Markets in all 3 segments, resulting in organic sales
growth of 8.7 percent on a per day basis in this region."
Please refer to the tables at the end of this release for the
reconciliations from GAAP to adjusted numbers as reported.
Income Statement Detail
Gross margin of 22.4 percent for the fourth quarter of 2014
compares to 23.2 percent in the year-ago quarter and 22.7 percent
in the third quarter of this year. The decrease in gross margin
reflected project mix and lower margins in each segment. In
Enterprise Cabling and Security Solutions, the increase in security
as a portion of the total business adversely impacted gross margin.
In Electrical and Electronic Wire and Cable, competitive pressures,
faster growth by our industrial customers and lower copper prices
adversely impacted gross margin. In Fasteners, customer mix and the
previously disclosed benefit from the sale of inventory in the
prior year quarter associated with the above-mentioned customer
transition adversely impacted gross margin.
Operating expenses were $284.5 million for the fourth quarter of
2014. Excluding the $2.6 million of acquisition and strategic tax
project costs and the $23.9 million incremental operating expenses
of Tri-Ed operations, adjusted operating expenses of $258.0 million
decreased by 6.4 percent from the prior year, reflecting strong
expense management.
Adjusted operating margin in the current quarter of 5.5 percent
compares to 6.0 percent in both the year-ago quarter and in the
prior quarter. The majority of the decrease in adjusted operating
margin was caused by the impacts of currency fluctuations, lower
average copper prices and the mix impact of the Tri-Ed acquisition
on gross margin, partially offset by strong operating expense
management.
Interest expense of $15.7 million increased by $4.5 million
compared to the prior year quarter. The increase in interest
expense results from the Senior notes due 2021 issued in September
2014 at a rate of 5.125 percent and incremental interest expense
from a new bank term loan, partially offset by the retirement of
the notes that matured in the first quarter of 2014 and lower
balances for the accounts receivable securitization facility and
revolving lines of credit.
Foreign exchange and other expense of $2.6 million decreased by
$1.3 million compared to the year-ago quarter primarily due to
lower foreign currency expense in Europe.
Our adjusted effective tax rate of 36.4 percent increased from
the prior year-to-date rate of 34.9 percent and from an adjusted
effective tax rate of 33.7 percent in the year-ago period,
primarily due to a change in the country mix of earnings.
Segment Update
Enterprise Cabling and Security Solutions (“ECS”) sales
of $949.5 million compares to $811.3 million in the prior year
period, up 17.0 percent, primarily from the Tri-Ed acquisition.
Excluding the $145.4 million favorable impact of Tri-Ed sales and
the $13.1 million unfavorable impact from foreign exchange, ECS
organic sales increased 0.7 percent, which equates to approximately
7.3 percent on an adjusted per day basis. We continue to experience
the acceleration in the business that began in the third quarter,
with all geographies achieving mid-to-high single digit organic
growth on a per day basis. Sequential sales were favorably impacted
by $117.4 million from the acquisition of Tri-Ed, offset by $8.9
million unfavorable foreign exchange, and three fewer billing days
this quarter. Sequentially, ECS sales increased 7.4 percent
including Tri-Ed and decreased 0.2 percent on an organic per day
basis, consistent with historical seasonality trends.
ECS security sales, which represent approximately 39 percent of
total segment sales, increased by 70 percent in the quarter.
Excluding the $145.4 million impact of Tri-Ed sales and the $4.1
million negative currency impact, organic security sales growth was
4.4 percent, which equates to 11.2 percent on a per day basis. We
delivered a very strong 7 percent increase in per day organic
security sales in the second half of 2014, compared to a decline of
1 percent in the first half of 2014, reflecting the success of
actions we took in the first half of the year to significantly
strengthen our legacy security business.
ECS operating income of $51.3 million increased by 24.5 percent
versus $41.2 million in the year-ago quarter, including $5.0
million of Tri-Ed operating income. Operating margin of 5.4 percent
improved by 30 basis points year-over-year, reflecting cost
leverage on the volume growth which more than offset the margin
dilution caused by mix. Operating profit leverage was 7.3 percent.
For the full year, ECS operating margin of 5.2 percent increased
from 5.1 percent in the prior year.
ECS adjusted EBITDA of $62.0 million compares to $46.2 million
in the prior year quarter. Including acquisition and strategic tax
project costs, foreign exchange and stock compensation, EBITDA of
$58.7 million compares to $44.3 million in the prior year
quarter.
Electrical and Electronic Wire and Cable (“W&C”)
sales of $502.3 million compares to $539.6 million in the prior
year period. Excluding the $10.9 million unfavorable impact from
foreign exchange and the $10.1 million unfavorable impact from
lower average copper prices, W&C organic sales decreased by 3.0
percent, which equates to an increase of 3.4 percent on a per day
basis. Sequentially, W&C sales decreased by 9.3 percent on a
reported basis which equates to a decrease of 3.6 percent on a per
day basis.
Sales in North America were impacted by lower commodity prices
and slowing trends in Western Canada. Lower energy prices did not
have an impact on projects currently in process, they will likely
impact project business going forward and have already had a
negative impact on day-to-day business. Outside of North America
trends were solid, with sales in both Europe and Emerging Markets
geographies achieving mid-single digit growth on an organic per day
basis.
W&C operating income of $32.0 million compares to operating
income of $40.9 million in the year-ago quarter. Operating margin
of 6.4 percent compares to 7.3 percent in the prior quarter and 7.6
percent in the year-ago quarter. The decline in operating margin
versus both prior periods was caused by lower copper prices
compounded by an unfavorable mix shift from OEM to industrial
customers. For the full year, W&C operating margin of 6.9
percent compares to 7.6 percent in 2013.
W&C adjusted EBITDA of $36.9 million compares to $45.5
million in the prior year quarter. Including acquisition and
strategic tax project costs, foreign exchange and stock
compensation, EBITDA of $35.4 million compares to $44.2 million in
the prior year quarter.
OEM Supply - Fasteners ("Fasteners") sales of $217.3
million decreased by 12.2 percent from the prior year quarter.
Excluding the $6.5 million unfavorable impact from foreign
exchange, Fasteners organic sales decreased by 9.6 percent which
equates to a 3.7 percent decrease on an adjusted per day basis.
Further excluding the $17.1 million impact resulting from the
previously disclosed transition of an existing customer to dual
source supply, organic sales growth would have been 3.4 percent on
a per day basis.
North America sales decreased 1.9 percent on an organic basis,
reflecting unplanned shutdowns by customers during the holidays.
Europe sales decreased 18.3 percent on an organic basis but this
growth would have been flat on a per day basis adjusting for the
$17.1 million impact resulting from the previously disclosed
transition of an existing customer to dual source supply. Emerging
Markets sales increased 19.5 percent on an organic per day basis,
reflecting continued strong growth in these geographies.
Sequentially, global sales decreased 4.9 percent, which equates to
an increase of 2.4 percent on a per day basis.
Fasteners adjusted operating income of $6.6 million compares to
operating income of $13.5 million in the year-ago quarter.
Including $1.1 million of acquisition and strategic tax project
costs, Fasteners operating income was $5.5 million. Adjusted
operating margin of 3.0 percent compares to operating margin of 5.5
percent in the prior year quarter and 3.8 percent in the third
quarter of 2014. The decline in margin is primarily a result of the
previously disclosed inventory sale that favorably impacted
year-ago margins and customer mix. For the full year, Fasteners
operating margin of 4.2 percent compares to 3.5 percent in
2013.
Fasteners adjusted EBITDA of $8.0 million compares to $14.9
million in the prior year quarter. Including acquisition and
strategic tax project costs, foreign exchange and stock
compensation, EBITDA of $6.7 million compares to $14.6 million in
the prior year quarter.
Cash Flow and Leverage
Net cash provided by operations was $104.2 million for the year
ended January 2, 2015, which compares to $334.5 million in the
prior year. The lower cash provided by operations reflects a four
day improvement in working capital efficiency offset by higher
overall working capital requirements to support the organic sales
growth on a per day basis. Net cash used in investing activities
was $458.7 million in the twelve months ended January 2, 2015,
which included $418.4 million for the acquisition of Tri-Ed in the
third quarter of 2014.
“We continue to deliver improved working capital efficiencies,
reflected by improved cash-to-cash metrics and a lower working
capital investment per dollar of sales. In addition, we are focused
on the successful integration of Tri-Ed and expect to begin
delivering synergies from the combined businesses in the first
quarter of 2015," commented Ted Dosch, Executive Vice President -
Finance and CFO. "With the cash flow we expect to generate from
operations, our goal is to return to our target debt-to-capital
range of 45 - 50 percent during 2015, excluding any further M&A
activity. Until we see greater visibility in our gross profit
dollar growth, we will exercise even greater expense control in
order to deliver strong financial results."
Key capital structure and credit-related statistics for the
quarter:
- Debt-to-total capital ratio of 51.6%
compares to 44.9% at the end of 2013
- Weighted average cost of borrowed
capital of 4.7% compares to 5.4% in the year-ago quarter
- $338.0 million available under
revolving lines of credit and accounts receivable securitization
facility at quarter end
Business Outlook
“Overall, our fourth quarter 2014 organic sales growth per day
of 4 percent was consistent with the outlook we provided at the end
of the third quarter. Looking ahead, we expect the positive trends
in our ECS business to continue, reflecting improved market
conditions in our core business and strong organic growth in our
security business. While our Wire and Cable business performed
below our expectations in 2014, we are taking aggressive actions to
improve gross margin. Our Fasteners business continues to deliver
solid results, turning in a second consecutive year of improved
operating performance," commented Bob Eck. "Related to the macro
economic landscape, we believe that lower energy prices will
benefit our business in the long term through the positive impact
on domestic GDP growth although the full benefit may be largely
mitigated by dollar strength. As we move into 2015, we believe that
the full year organic sales growth will be in the 3 - 5 percent
range."
Financial Results(In
millions, except per share amounts)
Three Months Ended Twelve Months Ended
Jan 2, Jan 3, Percent Jan
2, Jan 3, Percent 2015
2014 Change 2015 2014 Change Net
Sales $ 1,669.1 $ 1,598.5 4 % $ 6,445.5 $ 6,226.5 4 % Operating
Income $ 88.8 $ 95.6 (7 )% $ 360.9 $ 354.8 2 % Net Income $ 41.1 $
58.1 (29 )% $ 194.8 $ 200.5 (3 )% Diluted Earnings Per Share $ 1.23
$ 1.75 (30 )% $ 5.84 $ 6.04 (3 )% Diluted Weighted Shares 33.4 33.2
1 % 33.3 33.2 — %
Fourth Quarter Earnings Call
Details
We will host a conference call to discuss these results
beginning at 9:30 a.m. Central Time today. The call will be
available as a live audio webcast and can be accessed at the
Investor Relations portion of our website at anixter.com/investor.
Dial-in numbers for the call are as follows:
U.S./Canada toll-free dial-in: (888) 364-3108 International
dial-in: (719) 457-2697 Passcode: 532 9130
A replay of the call will be available at anixter.com/investor
for 15 days following the call. Prior to the beginning of the call
a supplemental presentation titled “Fourth Quarter 2014 Highlights
and Operating Review” will be available on the company’s Investor
Relations section of the website.
About Anixter
Anixter International is a leading global distributor of
enterprise cabling and security solutions, electrical and
electronic wire and cable, and OEM supply fasteners and other small
parts. The company adds value to the distribution process by
providing its customers access to 1) innovative inventory
management programs 2) over 0.5 million products and $1.1 billion
in inventory 3) approximately 270 warehouses/branch locations with
7.5 million square feet of space and 4) locations in 300 cities in
more than 50 countries. Founded in 1957 and headquartered near
Chicago, Anixter trades on the New York Stock Exchange under the
symbol AXE.
Safe Harbor Statement
The statements in this release other than historical facts are
forward-looking statements made in reliance upon the safe harbor of
the Private Securities Litigation Reform Act of 1995. These
forward-looking statements are subject to a number of factors that
could cause our actual results to differ materially from what is
indicated here. These factors include but are not limited to
general economic conditions, the level of customer demand
particularly for capital projects in the markets we serve, changes
in supplier sales strategies or financial viability, risks
associated with the sale of nonconforming products and services,
political, economic or currency risks related to foreign
operations, inventory obsolescence, copper price fluctuations,
customer viability, risks associated with accounts receivable, the
impact of regulation and regulatory, investigative and legal
proceedings and legal compliance risks and risks associated with
integration of acquired companies. These uncertainties may cause
our actual results to be materially different than those expressed
in any forward looking statements. We do not undertake to update
any forward looking statements. Please see our Securities and
Exchange Commission (“SEC”) filings for more information.
Non-GAAP Financial Measures
In addition to the results provided in accordance with U.S.
Generally Accepted Accounting Principles (“GAAP”) above, this
release includes certain financial measures computed using non-GAAP
components as defined by the SEC. Specifically, net sales
comparisons to the prior corresponding period, both worldwide and
in relevant segments, are discussed in this release both on a GAAP
basis and non-GAAP basis. We believe that by reporting organic
growth which excludes the impact of acquisitions (when applicable),
foreign exchange fluctuations and copper prices, both management
and investors are provided with meaningful supplemental sales
information to understand and analyze our underlying trends and
other aspects of our financial performance. From time to time, we
may also exclude other items from reported financial results (e.g.,
impairment charges, inventory adjustments, restructuring charges,
tax items, currency devaluations, etc.) so that both management and
financial statement users can use these non-GAAP financial measures
to better understand and evaluate our performance period over
period and to analyze the underlying trends of our business.
EBITDA is defined as net income from continuing operations
before interest, income taxes, depreciation and amortization.
Adjusted EBITDA is defined as EBITDA before foreign exchange and
other non-operating expense and stock-based compensation, excluding
the other special items from reported financial results, as defined
above. EBITDA and Adjusted EBITDA are presented because we believe
they are useful indicators of our performance and our ability to
meet debt service requirements. They are not, however, intended as
an alternative measure of operating results or cash flow from
operations as determined in accordance with generally accepted
accounting principles.
Non-GAAP financial measures provide insight into selected
financial information and should be evaluated in the context in
which they are presented. These non-GAAP financial measures have
limitations as analytical tools, and should not be considered in
isolation from, or as a substitute for, financial information
presented in compliance with GAAP, and non-GAAP financial measures
as reported by us may not be comparable to similarly titled amounts
reported by other companies. The non-GAAP financial measures should
be considered in conjunction with the Condensed Consolidated
Financial Statements and Management’s Discussion and Analysis of
Financial Condition and Results of Operations. Management does not
use these non-GAAP financial measures for any purpose other than
the reasons stated above.
Additional information about Anixter is
available at anixter.com
ANIXTER INTERNATIONAL INC. Condensed Consolidated
Statements of Operations (Unaudited)
Three Months Ended Twelve Months Ended
January 2, 2015
January 3, 2014
January 2, 2015
January 3, 2014
(In millions, except per share amounts) Net sales $
1,669.1 $ 1,598.5 $ 6,445.5 $ 6,226.5 Cost of goods sold 1,295.8
1,227.1 4,977.1 4,803.8 Gross profit
373.3 371.4 1,468.4 1,422.7 Operating expenses 284.5 275.8
1,107.5 1,067.9 Operating income 88.8 95.6
360.9 354.8 Interest expense (15.7 ) (11.2 ) (48.1 ) (47.4 ) Other,
net (2.6 ) (3.9 ) (18.0 ) (11.2 ) Income before income taxes 70.5
80.5 294.8 296.2 Income tax expense 29.4 22.4 100.0
95.7 Net income $ 41.1 $ 58.1 $ 194.8
$ 200.5
Income per share: Basic $ 1.24
$ 1.77 $ 5.90 $ 6.12 Diluted $ 1.23 $ 1.75 $ 5.84 $ 6.04
Weighted-average common shares outstanding: Basic 33.1 32.8
33.0 32.8 Diluted 33.4 33.2 33.3 33.2
Reportable
Segments Net sales: Enterprise Cabling and Security
Solutions $ 949.5 $ 811.3 $ 3,411.4 $ 3,174.5 Electrical and
Electronic Wire and Cable 502.3 539.6 2,095.6 2,116.6 OEM Supply -
Fasteners 217.3 247.6 938.5 935.4 $
1,669.1 $ 1,598.5 $ 6,445.5 $ 6,226.5
Operating income: Enterprise Cabling and Security Solutions
$ 51.3 $ 41.2 $ 176.4 $ 160.5 Electrical and Electronic Wire and
Cable 32.0 40.9 145.4 161.8 OEM Supply - Fasteners 5.5 13.5
39.1 32.5 $ 88.8 $ 95.6 $ 360.9
$ 354.8
ANIXTER INTERNATIONAL
INC. Condensed Consolidated Balance Sheets (Unaudited)
January 2, 2015 January 3, 2014 (In
millions, except share and per share amounts)
Assets Cash and cash equivalents $ 92.0 $ 57.3
Accounts receivable, net 1,329.2 1,182.8 Inventories 1,072.8 959.8
Deferred income taxes 33.7 32.8 Other current assets 62.1
43.0 Total current assets 2,589.8 2,275.7 Property and
equipment, net 121.0 104.0 Goodwill 582.3 342.1 Other assets 293.4
134.1
Total assets $ 3,586.5
$ 2,855.9 Liabilities and Stockholders'
Equity Accounts payable $ 831.3 $ 691.9 Accrued expenses
199.2 210.5 Total current liabilities 1,030.5 902.4
5.125% Senior notes 394.2 — 5.625% Senior notes 345.9 345.1 5.95%
Senior notes 200.0 200.0 Term loan 198.8 — Accounts receivable
securitization facility 65.0 145.0 Revolving lines of credit and
other 3.8 108.9 10.0% Senior notes — 32.1 Other liabilities 215.3
95.0
Total liabilities 2,453.5 1,828.5
Stockholders' equity 1,133.0
1,027.4 Total liabilities and stockholders' equity
$ 3,586.5 $ 2,855.9
ANIXTER INTERNATIONAL INC. Condensed Consolidated
Statements of Cash Flows (Unaudited) Twelve
months ended
(In millions)
January 2, 2015 January 3, 2014 Operating
activities Net income $ 194.8 $ 200.5 Adjustments to reconcile
net income to net cash provided by operating activities: Deferred
income taxes 25.7 22.3 Depreciation 24.0 22.1 Stock-based
compensation 13.8 13.6 Amortization of intangible assets 11.7 8.0
Accretion of debt discount 2.3 3.7 Excess income tax benefit from
employee stock plans (5.8 ) (1.6 ) Amortization of deferred
financing costs — 1.7 Pension plan contributions (16.8 ) (15.3 )
Pension plan expenses 4.6 16.7 Impairment of goodwill and
long-lived assets — 1.7 Changes in current assets and liabilities:
Accounts receivable (102.9 ) 36.9 Inventories (49.6 ) 96.9 Accounts
payable 54.9 (19.9 ) Other current assets and liabilities, net
(49.0 ) (53.5 ) Other, net (3.5 ) 0.7
Net cash provided
by operating activities 104.2 334.5 Investing
activities Acquisition of businesses, net of cash acquired
(418.4 ) — Capital expenditures, net (40.3 ) (32.2 )
Net cash
used in investing activities (458.7 )
(32.2 ) Financing activities Proceeds from
borrowings 1,550.4 1,761.2 Repayment of borrowings (1,734.2 )
(1,608.9 ) Proceeds from Notes due 2021 394.0 — Proceeds from term
loan, net of $1.2 million repayment 198.8 — Retirement of Notes due
2014 (32.3 ) — Proceeds from stock options exercised 7.2 8.1 Excess
income tax benefit from employee stock plans 5.8 1.6 Deferred
financing costs (2.3 ) (1.2 ) Retirement of Notes due 2013 — (300.0
) Payment of special cash dividend — (165.7 ) Payments for
repurchase of warrants — (19.2 ) Other, net (1.7 ) —
Net
cash provided by (used in) financing activities 385.7
(324.1 ) Increase (decrease) in cash and
cash equivalents 31.2 (21.8 ) Effect of
exchange rate changes on cash balances 3.5 (10.3
) Cash and cash equivalents at beginning of period 57.3
89.4
Cash and cash equivalents at end of
period $ 92.0 $ 57.3
ANIXTER INTERNATIONAL INC. Financial
Measures That Supplement GAAP (Unaudited)
Fourth Quarter 2014 Sales Growth Trends
Adjustments for: Q4
2014
Acquisition Impact
Foreign Exchange
Impact
Copper Impact
Q4 2014
Q4 2013
Organic Growth
(In millions) (as reported) (as adjusted)
Enterprise Cabling and Security Solutions North America $
718.8 $ (144.8 ) $ 4.7 $ — $ 578.7 $ 577.5 0.2 % Europe 83.1 — 4.9
— 88.0 86.0 2.2 % Emerging Markets 147.6 (0.6 ) 3.5 —
150.5 147.8 1.8 %
Enterprise Cabling and
Security Solutions $ 949.5 $ (145.4 ) $ 13.1 $ —
$ 817.2 $ 811.3 0.7 %
Electrical and
Electronic Wire and Cable North America $ 364.6 $ — $ 7.7 $ 8.8
$ 381.1 $ 394.8 -3.5 % Europe 69.6 — 2.1 0.5 72.2 74.5 -3.0 %
Emerging Markets 68.1 — 1.1 0.8 70.0
70.3 -0.5 %
Electrical and Electronic Wire and
Cable $ 502.3 $ — $ 10.9 $ 10.1 $
523.3 $ 539.6 -3.0 %
OEM Supply - Fasteners
North America $ 92.1 $ — $ 0.1 $ — $ 92.2 $ 94.0 -1.9 % Europe
103.9 — 5.5 — 109.4 133.9 -18.3 % Emerging Markets 21.3 —
0.9 — 22.2 19.7 12.2 %
OEM
Supply - Fasteners $ 217.3 $ — $ 6.5 $ —
$ 223.8 $ 247.6 -9.6 %
Total Anixter
International Inc. $ 1,669.1 $ (145.4 ) $ 30.5 $
10.1 $ 1,564.3 $ 1,598.5 -2.1 %
Geographic
Sales North America $ 1,175.5 $ (144.8 ) $ 12.5 $ 8.8 $ 1,052.0
$ 1,066.3 -1.3 % Europe 256.6 — 12.5 0.5 269.6 294.4 -8.4 %
Emerging Markets 237.0 (0.6 ) 5.5 0.8 242.7
237.8 2.0 %
Total Anixter International Inc. $
1,669.1 $ (145.4 ) $ 30.5 $ 10.1 $ 1,564.3
$ 1,598.5 -2.1 %
December Year-to-Date
2014 Sales Growth Trends Adjustments for:
December YTD 2014
Acquisition Impact
Foreign Exchange
Impact
Copper Impact
December YTD 2014
December YTD 2013
Organic Growth
(In millions) (as reported) (as adjusted)
Enterprise Cabling and Security Solutions North America $
2,540.2 $ (175.3 ) $ 18.8 $ — $ 2,383.7 $ 2,338.3 1.9 % Europe
332.7 — (2.3 ) — 330.4 320.8 3.0 % Emerging Markets 538.5
(0.7 ) 10.6 — 548.4 515.4 6.4 %
Enterprise Cabling and Security Solutions $ 3,411.4 $
(176.0 ) $ 27.1 $ — $ 3,262.5 $ 3,174.5
2.8 %
Electrical and Electronic Wire and Cable North America
$ 1,517.5 $ — $ 30.3 $ 24.3 $ 1,572.1 $ 1,564.4 0.5 % Europe 315.8
— (12.8 ) 4.2 307.2 302.4 1.6 % Emerging Markets 262.3 —
3.5 2.1 267.9 249.8 7.3 %
Electrical and Electronic Wire and Cable $ 2,095.6 $
— $ 21.0 $ 30.6 $ 2,147.2 $ 2,116.6
1.4 %
OEM Supply - Fasteners North America $ 395.8 $
— $ 0.4 $ — $ 396.2 $ 389.4 1.7 % Europe 452.8 — (7.8 ) — 445.0
474.1 -6.1 % Emerging Markets 89.9 — 2.7 —
92.6 71.9 28.5 %
OEM Supply - Fasteners
$ 938.5 $ — $ (4.7 ) $ — $ 933.8 $
935.4 -0.2 %
Total Anixter International Inc. $
6,445.5 $ (176.0 ) $ 43.4 $ 30.6 $ 6,343.5
$ 6,226.5 1.9 %
Geographic Sales North America
$ 4,453.5 $ (175.3 ) $ 49.5 $ 24.3 $ 4,352.0 $ 4,292.1 1.4 % Europe
1,101.3 — (22.9 ) 4.2 1,082.6 1,097.3 -1.3 % Emerging Markets 890.7
(0.7 ) 16.8 2.1 908.9 837.1 8.6
%
Total Anixter International Inc. $ 6,445.5 $ (176.0
) $ 43.4 $ 30.6 $ 6,343.5 $ 6,226.5 1.9
%
ANIXTER INTERNATIONAL INC. Financial
Measures That Supplement GAAP (Unaudited) - continued
(In millions, except per share amounts)
Positive (Negative) impact Three Months Ended
Twelve Months Ended
January 2, 2015
January 3, 2014
January 2, 2015
January 3, 2014
Items impacting comparability of results: Items impacting
operating income: Acquisition and strategic tax project costs $
(2.6 ) $ — $ (8.3 ) $ — Items impacting other expenses: Penalty and
interest from prior year tax liabilities — — — 0.7 Foreign exchange
loss from the devaluation of foreign currencies — — (8.0 ) —
Acquisition financing costs — — (0.3 ) —
Total of items impacting other expenses $ —
$ — $ (8.3 )
$ 0.7 Total of items impacting pre-tax
income $ (2.6 ) $ — $
(16.6 ) $ 0.7 Items impacting income
taxes: Tax impact of items impacting pre-tax income above 1.0 — 4.7
(0.2 ) Primarily reversal of deferred income tax valuation
allowances — — 6.9 — Impact of change in forecast on effective tax
rate (3.7 ) 4.8 — — Tax effect related to closing prior tax years —
— 1.9 4.2
Total of items impacting
income taxes $ (2.7 ) $ 4.8
$ 13.5 $ 4.0
Net income (loss) impact of these items $ (5.3
) $ 4.8 $ (3.1 )
$ 4.7 Diluted EPS impact of these items
$ (0.16 ) $ 0.14 $
(0.10 ) $ 0.14 GAAP to
Non-GAAP Net Income and EPS Reconciliation: Reconciliation to
most directly comparable GAAP financial measure: Net income –
Non-GAAP $ 46.4 $ 53.3 $ 197.9 $ 195.8 Items impacting net income
(5.3 ) 4.8 (3.1 ) 4.7 Net income – GAAP $ 41.1
$ 58.1 $ 194.8 $ 200.5 Diluted EPS –
Non-GAAP $ 1.39 $ 1.61 $ 5.94 $ 5.90 Diluted EPS impact of these
items (0.16 ) 0.14 (0.10 ) 0.14 Diluted EPS – GAAP $
1.23 $ 1.75 $ 5.84 $ 6.04
2014 and 2013 Effective Tax Rate – GAAP and
Non-GAAP (In millions) Three Months Ended
Twelve Months Ended January 2, January 3,
January 2, January 3, 2015 2014
2015 2014 Income before taxes – GAAP $ 70.5 $ 80.5 $
294.8 $ 296.2 Income tax expense - GAAP $ 29.4 $ 22.4 $ 100.0 $
95.7 Effective income tax rate 41.6 % 27.8 % 33.9 % 32.3 %
Total of items impacting pre-tax income above $
(2.6 ) $ — $ (16.6
) $ 0.7 Total of items impacting income
taxes above $ (2.7 ) $ 4.8
$ 13.5 $ 4.0 Income before
income taxes – Non-GAAP $ 73.1 $ 80.5 $ 311.4 $ 295.5 Income tax
expense – Non-GAAP $ 26.7 $ 27.2 $ 113.5 $ 99.7 Adjusted effective
income tax rate 36.4 % 33.7 % 36.4 %
33.7 %
Items Impacting Comparability of Operating Income by
Segment (In millions) ECS W&C
Fasteners Total Items impacting operating income for
three months ended January 2, 2015: Adjusted operating income -
Non-GAAP $ 52.6 $ 32.2 $ 6.6 $ 91.4 Adjusted operating margin -
Non-GAAP 5.5 % 6.4 % 3.0 % 5.5 %
Acquisition and strategic tax
project costs $ (1.3 ) $
(0.2 ) $ (1.1 ) $
(2.6 ) Total of items impacting operating
income $ (1.3 ) $ (0.2
) $ (1.1 ) $ (2.6
) Operating income - GAAP $ 51.3 $ 32.0 $ 5.5 $ 88.8
Operating margin - GAAP
5.4 % 6.4 %
2.5 % 5.3 % Items impacting
operating income for twelve months ended January 2, 2015: Adjusted
operating income - Non-GAAP $ 183.4 $ 145.6 $ 40.2 $ 369.2 Adjusted
operating margin - Non-GAAP 5.4 % 6.9 % 4.3 % 5.7 %
Acquisition
and strategic tax project costs $ (7.0 )
$ (0.2 ) $ (1.1 )
$ (8.3 ) Total of items impacting operating
income $ (7.0 ) $ (0.2
) $ (1.1 ) $ (8.3
) Operating income - GAAP $ 176.4 $ 145.4 $ 39.1 $ 360.9
Operating margin - GAAP
5.2 %
6.9 % 4.2 % 5.6
% ANIXTER INTERNATIONAL INC.
Financial Measures That Supplement GAAP (Unaudited) -
continued (In millions)
2014 EBITDA by Segment: Three
Months Ended January 2, 2015 ECS W&C
Fasteners Corporate Total Net income $
51.4 $ 32.0 $ 5.4 $ (47.7 ) $ 41.1 Interest expense — — — 15.7 15.7
Income taxes — — — 29.4 29.4 Depreciation 3.5 2.0 1.1 — 6.6
Amortization of intangible assets 3.8 1.4 0.2
— 5.4
EBITDA $ 58.7 $
35.4 $ 6.7 $ (2.6
) $ 98.2 Total of items impacting
operating income $ 1.3 $ 0.2 $ 1.1 $ — $ 2.6 Foreign exchange and
other non-operating expense — — — 2.6 2.6 Stock-based compensation
2.0 1.3 0.2 — 3.5
Adjusted
EBITDA $ 62.0 $ 36.9
$ 8.0 $ — $
106.9 Twelve Months Ended January 2, 2015
ECS W&C Fasteners Corporate
Total Net income $ 176.4 $ 145.4 $ 39.1 $ (166.1 ) $ 194.8
Interest expense — — — 48.1 48.1 Income taxes — — — 100.0 100.0
Depreciation 12.5 7.5 4.0 — 24.0 Amortization of intangible assets
4.9 5.7 1.1 — 11.7
EBITDA
$ 193.8 $ 158.6 $
44.2 $ (18.0 ) $
378.6 Total of items impacting operating income $ 7.0
$ 0.2 $ 1.1 $ — $ 8.3 Foreign exchange and other non-operating
expense — — — 18.0 18.0 Stock-based compensation 7.6 5.0
1.2 — 13.8
Adjusted EBITDA $
208.4 $ 163.8 $
46.5 $ — $ 418.7
2013 EBITDA by Segment: Three Months
Ended January 3, 2014 ECS W&C
Fasteners Corporate Total Net
income $ 41.2 $ 40.9 $ 13.5 $ (37.5 ) $ 58.1 Interest expense — — —
11.2 11.2 Income taxes — — — 22.4 22.4 Depreciation 2.9 1.9 0.8 —
5.6 Amortization of intangible assets 0.2 1.4 0.3
— 1.9
EBITDA $ 44.3
$ 44.2 $ 14.6 $
(3.9 ) $ 99.2 Foreign exchange
and other non-operating expense $ — $ — $ — $ 3.9 $ 3.9 Stock-based
compensation 1.9 1.3 0.3 — 3.5
Adjusted EBITDA $ 46.2 $
45.5 $ 14.9 $ —
$ 106.6 Twelve Months Ended January
3, 2014 ECS W&C Fasteners
Corporate Total Net income $ 160.5 $ 161.8 $ 32.5 $
(154.3 ) $ 200.5 Interest expense — — — 47.4 47.4 Income taxes — —
— 95.7 95.7 Depreciation 11.5 7.1 3.5 — 22.1 Amortization of
intangible assets 0.8 5.9 1.3 — 8.0
EBITDA $ 172.8 $ 174.8
$ 37.3 $ (11.2 )
$ 373.7 Foreign exchange and other
non-operating expense $ — $ — $ — $ 11.2 $ 11.2 Stock-based
compensation 7.4 4.9 1.3 — 13.6
Adjusted EBITDA $ 180.2 $
179.7 $ 38.6 $ —
$ 398.5
Anixter International Inc.Investor Contacts:Ted DoschEVP -
Finance & Chief Financial Officer(224) 521-4281orLisa Micou
Meers, CFAVP - Investor Relations(224) 521-8895
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