Adjusted diluted EPS of $0.88 from
continuing operations
Fourth Quarter
Highlights
- Repositioned and strengthened
business through 3 strategic actions in last 18 months
- Record quarterly sales of $1.8
billion, up 26%, driven by Power Solutions acquisition
- Record fourth quarter NSS sales of
$972 million, up 4% on an organic basis
Anixter International Inc. (NYSE: AXE) today reported quarterly
sales of $1.84 billion for the quarter ended January 1, 2016, a
26.4 percent increase compared to the year-ago quarter. The current
quarter and year-ago quarter each had 61 billing days. Excluding
the impact of the following items, organic sales decreased by 0.5
percent year-over-year:
- $479.6 million favorable impact from
the acquisition of Power Solutions
- $27.8 million unfavorable impact from
the lower average price of copper
- $57.6 million unfavorable impact from
the fluctuation in foreign currencies
In the fourth quarter of 2015, in connection with the
acquisition of Power Solutions, our legacy Enterprise Cabling &
Security Solutions ("ECS") segment was renamed Network &
Security Solutions ("NSS"). The low voltage business of Power
Solutions was combined with our historical Electrical and
Electronic Wire & Cable ("W&C") segment and renamed
Electrical & Electronic Solutions ("EES"). The high voltage
business of Power Solutions forms the Utility Power Solutions
("UPS") segment. Subsequently, in January 2016, we disclosed pro
forma results for historical periods. All commentary in this
release reflects these changes and results from continuing
operations unless otherwise noted. Please refer to the tables at
the end of this release for the reconciliations to GAAP from the
adjusted numbers as reported.
Adjusted net income of $29.3 million compares to $36.7 million
in the prior year quarter and adjusted earnings per diluted share
of $0.88 compares to $1.10 in the prior year quarter. On a
year-over-year basis, our earnings were negatively impacted by
currency and copper by $8.8 million pre tax and $5.3 million net of
tax ($0.16 diluted earnings per share). Excluding the $0.15 diluted
earnings per share impact of the higher tax rate related to the
first nine months of 2015 and the negative impact of currency and
copper, our core adjusted diluted earnings per share would have
been $1.19, an 8.2 percent increase from the prior year
quarter.
"In spite of significant macro economic headwinds that affected
the global economy, we delivered solid growth in our network and
security businesses, driven by acceleration in our North America
geography," commented Bob Eck, President and CEO. "In our EES and
UPS segments, the soft industrial economy combined with even weaker
commodity prices caused results to be lower than we had expected at
the beginning of the quarter. Given our cautious outlook for any
near term improvement in market conditions, we have taken further
restructuring actions across our business and will continue to
focus on margin improvement, ongoing expense discipline and working
capital efficiencies."
"From a strategic perspective, the completion of the Power
Solutions acquisition marks a milestone for Anixter. Combined with
the 2014 acquisition of Tri-Ed and the 2015 sale of our Fasteners
segment, we have transformed Anixter into a leading North American
electrical products distribution platform, enhanced our competitive
position in the electrical wire and cable business and further
strengthened our overall customer and supplier value proposition,"
commented Bob Eck. "While our EES segment is currently impacted by
macro-economic factors including lower commodity prices and a
sluggish industrial economy, the acquisition of Power Solutions is
a critical strategic step to increase the competitiveness and
profitable growth of this business. We are now focused on
integration and execution to capture the significant synergy
opportunities that exist as a result of our business
transformation."
Income Statement Detail
Gross margin of 20.2 percent compares to 22.1 percent in the
prior year quarter and 22.2 percent in the third quarter of 2015.
Compared to both periods, the fourth quarter decline is primarily
due to the Power Solutions acquisition, with the remainder due to
segment mix reflecting EES becoming a smaller percentage of
consolidated results.
Operating expense of $305.6 million compares to $241.1 million
in the prior year quarter. Adjusted operating expense excludes
$16.1 million of expense relating to acquisition and
integration-related costs of $4.1 million, a restructuring charge
of $2.9 million and Latin America asset write-offs of $9.1 million,
resulting in a negative impact to diluted earnings per share of
$0.29.
Excluding $16.1 million and $1.5 million of expenses impacting
the comparability of results in the current and prior year,
respectively and $9.6 million of favorable foreign currency impact
in the current quarter, and adjusting for $59.8 million of pro
forma Power Solutions expense in the prior year quarter, adjusted
operating expense would have been flat versus prior year. As in the
first three quarters of 2015, the current quarter operating expense
includes the year-over-year incremental impact of approximately
$3.0 million from the previously disclosed higher pension and other
employee benefit costs. Further adjusting for this expense,
adjusted operating expense would have decreased 1.2 percent.
Adjusted operating income of $81.9 million, or 4.5 percent of
sales, compares to $81.9 million, or 5.6 percent of sales in the
prior year quarter. The reduction in operating profit margin is
primarily due to the change in mix of the business arising from the
Power Solutions acquisition. Including the $16.1 million of expense
detailed above and $1.5 million of acquisition and
integration-related costs in the prior year quarter, operating
income of $65.8 million compares to $80.4 million in the prior year
quarter.
Interest expense of $21.1 million increased by $6.0 million
compared to the prior year quarter. The increase in interest
expense results from the issuance of incremental debt used to
finance the Power Solutions acquisition, partially offset by the
repayment of the 5.95% Senior notes in March 2015.
Other, net expense of $8.1 million compares to $2.4 million in
the prior year quarter. The current year quarter included a loss of
$2.9 million related to the currency devaluation of the Argentina
peso and $0.9 million of costs associated with the extinguishment
of debt. These items resulted in a negative impact to diluted
earnings per share of $0.07.
Our fourth quarter adjusted effective tax rate was 48.3 percent,
bringing our full year adjusted effective tax rate to 40.5 percent.
The increase from the prior year adjusted effective tax rate of
37.5 percent was due to the change in the country mix of earnings.
This 300 basis point increase in the rate resulted in a negative
impact to diluted earnings per share of $0.15 related to the first
nine months of 2015. The current quarter adjusted effective tax
rate of 48.3 percent excludes the establishment of valuation
allowances primarily in Latin America and other tax related items
of $11.8 million in the current quarter which resulted in a
negative impact to diluted earnings per share of $0.35.
Adjusted EBITDA of $101.8 million, or 5.5 percent of sales,
compares to $95.9 million, or 6.6 percent of sales in the prior
year period. The decline in adjusted EBITDA margin reflects the
lower gross margin as a result of the Power Solutions acquisition
and the slowdown in sales growth caused by weakness in industrial
and manufacturing markets.
Segment Update
Network & Security Solutions (“NSS”) sales of $971.6
million compares to $966.5 million in the prior year period, an
increase of 0.5 percent. NSS organic sales increased by 3.8
percent, adjusting for the $32.0 million unfavorable impact from
foreign exchange on current year sales, driven by strength in our
North America and EMEA geographies.
Record fourth quarter NSS security sales of $385.5 million,
which represents approximately 43 percent of total segment sales,
increased 1 percent from the prior year quarter. Adjusted for the
$15.1 million negative currency impact, organic security sales
growth was 4.5 percent.
Network & Security Solutions adjusted EBITDA of $67.5
million compares to $63.5 million in the prior year quarter. The
corresponding adjusted EBITDA margin of 6.9 percent compares to 6.6
percent in the prior year quarter, driven by strong sales growth
and effective expense control.
Electrical & Electronic Solutions (“EES”) sales of
$528.3 million compares to $485.3 million in the prior year period,
an 8.9 percent increase. Excluding the $138.0 million favorable
impact from the Power Solutions acquisition, the $17.2 million
unfavorable impact from foreign exchange and the $27.5 million
unfavorable impact from lower average copper prices, EES organic
sales decreased by 8.1 percent. The decline in organic sales
reflects current weak trends we are experiencing with industrial
customers, partially offset by modest growth with our OEM
customers.
EES adjusted EBITDA of $20.8 million compares to $35.3 million
in the prior year quarter. The corresponding adjusted EBITDA margin
of 3.9 percent compares to 7.3 percent in the prior year quarter.
The decline in adjusted EBITDA was caused by the dilutive impact of
the low voltage portion of Power Solutions, combined with the
unfavorable impacts of lower copper prices and currency headwinds,
together creating significant negative operating leverage.
Utility Power Solutions (“UPS”) sales were $335.9 million
in the fourth quarter. Excluding the $8.4 million unfavorable
impact from foreign exchange and $0.3 million from copper, UPS
organic sales increased by 0.9 percent; however, sales were
negatively impacted by slower sales growth in Canada and weakness
in oil and gas related markets.
UPS adjusted EBITDA was $15.8 million, or 4.7 percent of
sales.
Discontinued Operations
As a result of the sale of Anixter's Fasteners business in the
second quarter of 2015, this business has been presented as
Discontinued Operations and the results for all periods have been
restated to reflect this classification. A net loss of $0.9 million
from discontinued operations was incurred in the quarter, resulting
in diluted loss per share from discontinued operations of
$0.03.
Cash Flow and Leverage
We generated $91.9 million in cash flow from operations in
fiscal 2015 as compared to $104.2 million in fiscal 2014. Full year
capital expenditures of $28.6 million compares to $40.3 million in
the prior year period. We expect to invest approximately $45 - $50
million in capital investments and generate $125 - $150 million in
cash flow from operations in 2016.
"The fourth quarter and full year 2015 reflected a difficult
global economic environment, which weakened as the year progressed.
As a result, we announced actions in the second quarter and
announced additional actions in the fourth quarter, both focused on
improving our cost structure," commented Ted Dosch, Executive Vice
President - Finance and CFO. "Turning to our capital structure, our
capital allocation priorities include achieving our debt-to-capital
target range of 45 - 50% by mid-2017, funded out of the strong free
cash flow we expect to generate from our repositioned
platform."
Key capital structure and credit-related statistics for the
quarter:
- Debt-to-total capital ratio of 58.4%
compares to 51.6% at the end of 2014
- Weighted average cost of borrowed
capital of 4.8% compares to 4.7% in the year-ago quarter
- $346.2 million available under
revolving lines of credit and secured accounts receivable and
inventory facilities
Business Outlook
"As we look at the current year, we are optimistic that the
positive momentum and growth trends in our Network & Security
Solutions segment will continue, driven by growth in the US and
Europe. The ongoing integration of the Tri-Ed business exceeded our
goal of $5 million in EBITDA synergies to the combined security
business in 2015, and we are applying the same discipline to the
Power Solutions integration to ensure our ability to deliver on our
synergy opportunities," commented Bob Eck. "Reflecting diverging
trends across our business, we continue to experience softer trends
in our EES and UPS segments related to their exposure to industrial
and manufacturing end markets, resulting in a more cautious outlook
on this portion of the business. Combining our more positive
outlook in NSS with our more conservative outlook in our EES and
UPS segments, we expect full year 2016 organic sales growth from
continuing operations in the negative 2 percent to positive 2
percent range."
Financial Results from continuing
operations
(In millions, except per share amounts)
Three Months Ended Twelve Months Ended
Jan 1, Jan 2, Percent Jan
1, Jan 2, Percent 2016
2015 Change 2016 2015 Change Net
Sales $ 1,835.8 $ 1,451.8 26 % $ 6,190.5 $ 5,507.0 12 % Operating
Income $ 65.8 $ 80.4 (18 )% $ 267.8 $ 310.1 (14 )% EBITDA $ 73.9 $
88.7 (17 )% $ 293.8 $ 324.7 (10 )% Net Income $ 5.5 $ 35.8 (85 )% $
96.9 $ 163.4 (41 )% Diluted Earnings Per Share $ 0.17 $ 1.07 (84 )%
$ 2.90 $ 4.90 (41 )% Diluted Weighted Shares 33.5 33.4 — % 33.4
33.3 — %
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) 587-0615International
dial-in: (719) 457-2627Passcode: 696454
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 2015 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 Network
& Security Solutions, Electrical & Electronic Solutions and
Utility Power Solutions. We help build, connect, protect, and power
valuable assets and critical infrastructures. From enterprise
networks to industrial MRO supply to video surveillance
applications to electric power distribution, we offer full-line
solutions, and intelligence, that create reliable, resilient
systems that sustain businesses and communities. Through our
unmatched global distribution network along with our supply
chain and technical expertise, we help lower the cost, risk
and complexity of our customers’ supply chains.
Anixter adds value to the distribution process by providing our
customers access to 1) innovative supply chain solutions, 2) over
450,000 products and $1.1 billion in inventory, 3) approximately
320 warehouses/branch locations with approximately 9.0 million
square feet of space and 4) locations in over 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 non-GAAP
organic growth, which adjusts for 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. Beginning in 2015,
we calculate the year-over-year organic sales growth impact
relating to the Tri-Ed and Power Solutions acquisitions by
including the 2014 results with our results (on a "pro forma"
basis) as we believe this represents the most accurate
representation of organic growth, considering the nature of the
companies we acquired and the synergistic revenues that have been
achieved. 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 non-cash 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 (In
millions, except per share amounts)
January 1, 2016
January 2, 2015
January 1, 2016
January 2, 2015
As Adjusted As Adjusted Net sales $
1,835.8 $ 1,451.8 $ 6,190.5
$ 5,507.0 Cost of goods sold 1,464.4 1,130.3
4,850.0 4,267.7
Gross profit
371.4 321.5 1,340.5 1,239.3 Operating
expenses 305.6 241.1 1,072.7 929.2
Operating income 65.8 80.4 267.8
310.1 Interest expense (21.1 ) (15.1 ) (63.8 ) (44.5 )
Other, net (8.1 ) (2.4 ) (21.1 ) (16.0 ) Income from continuing
operations before income taxes 36.6 62.9 182.9 249.6 Income tax
expense from continuing operations 31.1 27.1 86.0
86.2
Net income from continuing operations
5.5 35.8 96.9 163.4 (Loss) income from
discontinued operations before income taxes (1) (1.7 ) 7.6 52.9
45.2 Income tax (benefit) expense from discontinued operations (0.8
) 2.3 22.2 13.8
Net (loss) income from
discontinued operations (0.9 ) 5.3
30.7 31.4 Net income $
4.6 $ 41.1 $ 127.6
$ 194.8 Income (loss) per share:
Basic: Continuing operations $ 0.17 $ 1.08 $ 2.92 $ 4.95
Discontinued operations (0.03 ) 0.16 0.92 0.95
Net Income $ 0.14 $ 1.24 $ 3.84 $ 5.90
Diluted: Continuing operations $ 0.17 $ 1.07 $
2.90 $ 4.90 Discontinued operations (0.03 ) 0.16 0.91
0.94
Net Income $ 0.14 $ 1.23 $ 3.81
$ 5.84
Weighted-average common shares
outstanding: Basic 33.3 33.1 33.2 33.0 Diluted 33.5 33.4 33.4
33.3
Reportable Segments Net sales: Network
& Security Solutions $ 971.6 $ 966.5 $ 3,924.4 $ 3,481.2
Electrical & Electronic Solutions 528.3 485.3 1,930.2 2,025.8
Utility Power Solutions 335.9 — 335.9 —
$ 1,835.8 $ 1,451.8 $ 6,190.5 $ 5,507.0
Operating income: Network & Security Solutions $ 49.1 $
53.0 $ 189.4 $ 182.8 Electrical & Electronic Solutions 12.7
30.3 92.5 139.0 Utility Power Solutions 10.4 — 10.4 — Corporate
(6.4 ) (2.9 ) (24.5 ) (11.7 ) $ 65.8 $ 80.4 $ 267.8
$ 310.1 (1) Includes $1.3 million loss on
disposal and $41.0 million gain on disposal during the three and
twelve months ended January 1, 2016, respectively.
ANIXTER INTERNATIONAL INC. Condensed Consolidated Balance
Sheets (Unaudited)
January 1, 2016
January 2, 2015
(In millions) As Adjusted ASSETS Current
assets: Cash and cash equivalents $ 151.3 $ 92.0 Accounts
receivable, net 1,326.4 1,171.0 Inventories 1,182.6 859.0 Deferred
income taxes — 33.7 Other current assets 63.7 54.9 Current assets
of discontinued operations 3.8 379.2 Total current
assets 2,727.8 2,589.8 Property and equipment, net 131.8 104.2
Goodwill 756.5 582.3 Intangible assets, net 453.8 202.7 Other
assets 72.1 101.8
Total assets $
4,142.0 $ 3,580.8
LIABILITIES AND STOCKHOLDERS' EQUITY Current
liabilities: Accounts payable $ 905.6 $ 738.5 Accrued expenses
245.3 183.2 Current liabilities of discontinued operations 5.3
108.8 Total current liabilities 1,156.2 1,030.5 5.50%
Senior notes due 2023 345.8 — 5.125% Senior notes due 2021 394.9
394.2 5.625% Senior notes due 2019 346.8 345.9 Canadian term loan
172.9 — Revolving lines of credit 390.1 — Term loan — 198.8
Accounts receivable securitization facility — 65.0 5.95% Senior
notes due 2015 — 200.0 Other 2.6 3.8 Unamortized debt issuance
costs (10.2 ) (5.7 ) Other liabilities 163.5 215.3
Total liabilities 2,962.6 2,447.8 Total
stockholders' equity 1,179.4 1,133.0
Total liabilities and stockholders' equity $
4,142.0 $ 3,580.8
ANIXTER INTERNATIONAL INC. Condensed Consolidated
Statements of Cash Flows (Unaudited) Twelve
Months Ended
January 1, 2016
January 2, 2015
(In millions) Operating activities: Net income
$ 127.6 $ 194.8 Adjustments to reconcile net income to net cash
provided by operating activities: Gain on sale of business, net of
tax of $9.8 (40.0 ) — Loss on extinguishment of debt 0.9 —
Depreciation 23.8 24.0 Amortization of intangible assets 25.4 11.7
Stock-based compensation 14.5 13.8 Accretion of debt discount 1.8
2.3 Amortization of deferred financing costs 2.0 — Deferred income
taxes 5.9 25.7 Excess income tax benefit from employee stock plans
(0.6 ) (5.8 ) Pension plan contributions (37.7 ) (16.8 ) Pension
plan expenses 11.4 4.6 Changes in current assets and liabilities,
net (44.1 ) (146.6 ) Other, net 1.0 (3.5 )
Net cash
provided by operating activities 91.9 104.2
Investing activities: Proceeds from sale of business 371.8 —
Capital expenditures, net (28.6 ) (40.3 ) Acquisition of business,
net of cash acquired (822.5 ) (418.4 )
Net cash (used in)
investing activities (479.3 ) (458.7
) Financing activities: Proceeds from borrowings
643.6 1,550.4 Repayments of borrowings (707.5 ) (1,734.2 ) Proceeds
from New Receivables Facility 799.0 — Repayments of New Receivables
Facility (409.0 ) Proceeds from issuance of Notes due 2023 345.6 —
Proceeds from Canadian term loan 229.1 — Repayments of Canadian
term loan (45.1 ) — Retirement of Notes due 2015 (200.0 ) —
Repayments of term loan (198.8 ) (1.2 ) Excess income tax benefit
from employee stock plans 0.6 5.8 Proceeds from issuance of Notes
due 2021 — 394.0 Proceeds from term loan — 200.0 Retirement of
Notes due 2014 — (32.3 ) Proceeds from stock options exercised —
7.2 Deferred financing costs (6.7 ) (2.3 ) Other, net (1.0 ) (1.7 )
Net cash provided by financing activities 449.8
385.7 Increase in cash and cash
equivalents 62.4 31.2 Effect of exchange rate
changes on cash balances (3.1 ) 3.5 Cash
and cash equivalents at beginning of period 92.0 57.3
Cash and cash equivalents at end of period $
151.3 $ 92.0 ANIXTER
INTERNATIONAL INC. Financial Measures That Supplement GAAP
(Unaudited)
Fourth Quarter 2015 Sales Growth Trends Q4
2015 Q4 2014 Foreign
Organic As
Exchange Copper As As
Acquisition Pro Growth/ ($ millions)
Reported Impact Impact Adjusted
Reported Impact Forma (Decline) (as
adjusted)
Network & Security Solutions North America $
748.6 $ 13.9 $ — $ 762.5 $ 735.8 $ — $ 735.8 3.6 % Europe 86.3 7.0
— 93.3 83.1 — 83.1 12.5 % Emerging Markets 136.7 11.1
— 147.8 147.6 — 147.6 — %
NSS $ 971.6 $ 32.0
$ — $ 1,003.6 $
966.5 $ — $ 966.5
3.8 % Electrical & Electronic
Solutions North America $ 420.2 $ 11.5 $ 23.1 $ 454.8 $ 347.5 $
138.0 $ 485.5 (6.4 )% Europe 59.8 3.3 1.7 64.8 69.6 — 69.6 (6.7 )%
Emerging Markets 48.3 2.4 2.7 53.4 68.2
— 68.2 (21.5 )%
EES $
528.3 $ 17.2 $
27.5 $ 573.0 $
485.3 $ 138.0 $
623.3 (8.1 )% Utility Power
Solutions North America $ 335.9 $ 8.4 $ 0.3
$ 344.6 $ — $ 341.6 $ 341.6 0.9
%
UPS $ 335.9 $ 8.4
$ 0.3 $ 344.6
$ — $ 341.6 $
341.6 0.9 % Total
$ 1,835.8 $ 57.6 $
27.8 $ 1,921.2 $
1,451.8 $ 479.6 $
1,931.4 (0.5 )% Geographic
Sales North America $ 1,504.7 $ 33.8 $ 23.4 $ 1,561.9 $ 1,083.3
$ 479.6 $ 1,562.9 (0.1 )% Europe 146.1 10.3 1.7 158.1 152.7 — 152.7
3.7 % Emerging Markets 185.0 13.5 2.7 201.2
215.8 — 215.8 (6.8 )%
Total
$ 1,835.8 $ 57.6 $
27.8 $ 1,921.2 $
1,451.8 $ 479.6 $
1,931.4 (0.5 )% December
Year-to-Date 2015 Sales Growth Trends YTD 2015
YTD 2014 Foreign
Organic As Exchange
Copper As As Acquisition Pro
Growth/ ($ millions) Reported Impact
Impact Adjusted Reported Impact
Forma (Decline) (as adjusted)
Network &
Security Solutions North America $ 3,061.8 $ 54.4 $ — $ 3,116.2
$ 2,610.1 $ 417.7 $ 3,027.8 2.9 % Europe 340.4 39.4 — 379.8 332.7 —
332.7 14.2 % Emerging Markets 522.2 37.4 —
559.6 538.4 2.0 540.4 3.5 %
NSS
$ 3,924.4 $ 131.2
$ — $ 4,055.6 $
3,481.2 $ 419.7 $
3,900.9 4.0 % Electrical
& Electronic Solutions North America $ 1,439.6 $ 48.3 $
66.1 $ 1,554.0 $ 1,447.6 $ 138.0 $ 1,585.6 (2.0 )% Europe 261.4
23.5 4.4 289.3 315.8 — 315.8 (8.3 )% Emerging Markets 229.2
9.8 6.6 245.6 262.4 — 262.4
(6.4 )%
EES $ 1,930.2 $
81.6 $ 77.1 $
2,088.9 $ 2,025.8 $
138.0 $ 2,163.8 (3.5
)% Utility Power Solutions North America $
335.9 $ 8.4 $ 0.3 $ 344.6 $ — $
341.6 $ 341.6 0.9 %
UPS $ 335.9
$ 8.4 $ 0.3
$ 344.6 $ — $
341.6 $ 341.6 0.9
%
Total $ 6,190.5 $ 221.2
$ 77.4 $ 6,489.1
$ 5,507.0 $ 899.3
$ 6,406.3 1.3 %
Geographic Sales North America $ 4,837.3 $ 111.1 $ 66.4 $
5,014.8 $ 4,057.7 $ 897.3 $ 4,955.0 1.2 % Europe 601.8 62.9 4.4
669.1 648.5 — 648.5 3.2 % Emerging Markets 751.4 47.2
6.6 805.2 800.8 2.0 802.8 0.3 %
Total $ 6,190.5 $ 221.2
$ 77.4 $ 6,489.1
$ 5,507.0 $ 899.3
$ 6,406.3 1.3 %
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 1, 2016
January 2, 2015
January 1, 2016
January 2, 2015
Continuing operations As Adjusted As Adjusted
Items impacting comparability of results: Items impacting
operating income: Acquisition and integration costs $ (4.1 ) $ (1.5
) $ (13.2 ) $ (7.2 ) Latin America assets write-off (9.1 ) — (11.7
) — Restructuring charge (2.9 ) — (8.2 ) — Write-off of capitalized
software — — (3.1 ) — Dilapidation provision — — (1.7 ) — Pension
divestiture costs — — (0.4 ) —
Total of
items impacting operating income $ (16.1 )
$ (1.5 ) $ (38.3 )
$ (7.2 ) Items impacting interest expense:
Write-off of debt issuance costs (0.3 ) — (0.3 ) —
Total of items impacting interest expense $
(0.3 ) $ — $ (0.3
) $ — Items impacting other expenses:
Foreign exchange loss from the devaluation of foreign currencies
(2.9 ) — (3.6 ) (8.0 ) Extinguishment of debt (0.9 ) — (0.9 ) —
Acquisition financing costs — — — (0.3 )
Total of items impacting other expenses $ (3.8
) $ — $ (4.5 )
$ (8.3 ) Total of items impacting pre-tax
income $ (20.2 ) $ (1.5
) $ (43.1 ) $ (15.5
) Items impacting income taxes: Tax impact of items
impacting pre-tax income above $ 8.2 $ 0.6 $ 17.4 $ 4.3
(Establishment)/reversal of deferred income tax valuation
allowances (11.3 ) — (11.3 ) 6.9 Tax benefits related to closing
prior tax years — — — 1.9 Other tax items (0.5 ) — (0.5 ) —
Total of items impacting income taxes $
(3.6 ) $ 0.6 $ 5.6
$ 13.1 Net income impact of these
items $ (23.8 ) $ (0.9
) $ (37.5 ) $ (2.4
) Diluted EPS impact of these items $
(0.71 ) $ (0.03 ) $
(1.12 ) $ (0.07 ) GAAP
to Non-GAAP Net Income and EPS Reconciliation for continuing
operations: Net income from continuing operations – Non-GAAP $
29.3 $ 36.7 $ 134.4 $ 165.8 Items impacting net income from
continuing operations (23.8 ) (0.9 ) (37.5 ) (2.4 ) Net income from
continuing operations – GAAP $ 5.5 $ 35.8 $ 96.9
$ 163.4 Diluted EPS – Non-GAAP $ 0.88 $ 1.10 $
4.02 $ 4.97 Diluted EPS impact of these items (0.71 ) (0.03 ) (1.12
) (0.07 ) Diluted EPS – GAAP $ 0.17 $ 1.07 $ 2.90
$ 4.90
Items Impacting
Comparability of Operating Income by Segment Three
Months Ended January 1, 2016 (in millions) NSS
EES UPS Corporate
Total Adjusted operating income - Non-GAAP $ 58.2 $
15.5 $ 10.7 $ (2.5 ) $ 81.9 Adjusted operating margin - Non-GAAP
6.0 % 2.9 % 3.2 % nm 4.5 %
Total of items impacting operating income for the three months
ended January 1, 2016 $ (9.1 ) $
(2.8 ) $ (0.3 ) $
(3.9 ) $ (16.1 )
Operating income - GAAP $ 49.1 $ 12.7 $ 10.4 $ (6.4 ) $ 65.8
Operating margin - GAAP 5.1 % 2.4 % 3.1 % nm 3.6 %
Items Impacting Comparability of Operating Income by Segment
Twelve Months Ended January 1, 2016 NSS EES
UPS Corporate Total Adjusted operating
income - Non-GAAP $ 207.2 $ 99.3 $ 10.7 $ (11.1 ) $ 306.1 Adjusted
operating margin - Non-GAAP 5.3 % 5.1 % 3.2 % nm 4.9 %
Total of items impacting operating
income for the twelve months ended January 1, 2016 $
(17.8 ) $ (6.8 ) $
(0.3 ) $ (13.4 ) $
(38.3 ) Operating income - GAAP $ 189.4 $ 92.5
$ 10.4 $ (24.5 ) $ 267.8 Operating margin - GAAP 4.8 % 4.8 % 3.1 %
nm 4.3 %
nm - not meaningful
Items Impacting Comparability of Operating Income by Segment
Three Months Ended January 2, 2015 (in
millions) NSS EES UPS
Corporate Total Adjusted operating
income - Non-GAAP $ 54.3 $ 30.5 $ — $ (2.9 ) $ 81.9 Adjusted
operating margin - Non-GAAP 5.6 % 6.3 % nm nm 5.6 %
Total of items impacting operating income
for the three months ended January 2, 2015 $ (1.3
) $ (0.2 ) $ —
$ — $ (1.5 )
Operating income - GAAP $ 53.0 $ 30.3 $ — $ (2.9 ) $ 80.4 Operating
margin - GAAP 5.5 % 6.3 % nm nm 5.5 %
Items
Impacting Comparability of Operating Income by Segment
Twelve Months Ended January 2, 2015 NSS EES
UPS Corporate Total Adjusted operating
income - Non-GAAP $ 189.8 $ 139.2 $ — $ (11.7 ) $ 317.3 Adjusted
operating margin - Non-GAAP 5.5 % 6.9 % nm nm 5.8 %
Total of items impacting operating income
for the twelve months ended January 2, 2015 $
(7.0 ) $ (0.2 ) $
— $ — $ (7.2
) Operating income - GAAP $ 182.8 $ 139.0 $ — $ (11.7
) $ 310.1 Operating margin - GAAP 5.3 % 6.9 % nm nm 5.6 %
nm -
not meaningful
ANIXTER INTERNATIONAL INC.
2015 and 2014 Effective Tax Rate –
GAAP and Non-GAAP Three Months Ended Twelve Months
Ended January 1, January 2, January 1,
January 2, (in millions) 2016 2015
2016 2015 As Adjusted As Adjusted
Income from continuing operations before taxes – GAAP $ 36.6 $ 62.9
$ 182.9 $ 249.6 Income tax expense – GAAP $ 31.1 $ 27.1 $ 86.0 $
86.2 Effective income tax rate 84.9 % 43.0 % 47.0 % 34.5 %
Total of items impacting pre-tax income above $
(20.2 ) $ (1.5 ) $
(43.1 ) $ (15.5 ) Total of
items impacting income taxes above $ (3.6
) $ 0.6 $ 5.6
$ 13.1 Income from continuing
operations before income taxes – Non-GAAP $ 56.8 $ 64.4 $ 226.0 $
265.1 Income tax expense – Non-GAAP 27.5 $ 27.7 $ 91.6 $ 99.3
Adjusted effective income tax rate 48.3 % 42.8 %
40.5 % 37.5 %
2015 EBITDA by Segment
Three Months Ended January 1, 2016 (in
millions) NSS EES UPS
Corporate Total Net income from continuing
operations $ 49.1 $ 12.7 $ 10.4 $ (66.7 ) $ 5.5 Interest expense —
— — 21.1 21.1 Income taxes — — — 31.1 31.1 Depreciation 3.3 2.0 1.1
0.2 6.6 Amortization of intangible assets 3.6 2.1 3.9
— 9.6
EBITDA $ 56.0
$ 16.8 $ 15.4
$ (14.3 ) $ 73.9
EBITDA as a % of sales 5.8 % 3.2
% 4.6 % nm 4.0 %
Foreign exchange and other non-operating expense $ — $ — $ — $ 8.1
$ 8.1 Stock-based compensation 2.4 1.2 0.1 — 3.7 Restructuring
charge 1.0 1.8 0.1 — 2.9 Latin America asset write-offs 8.1 1.0 — —
9.1 Acquisition and integration costs — — 0.2
3.9 4.1
Adjusted EBITDA $ 67.5
$ 20.8 $ 15.8
$ (2.3 ) $ 101.8
Adjusted EBITDA as a % of sales 6.9 %
3.9 % 4.7 % nm 5.5
% Twelve Months Ended January 1, 2016
NSS EES UPS Corporate Total Net
income from continuing operations $ 189.4 $ 92.5 $ 10.4 $ (195.4 )
$ 96.9 Interest expense — — — 63.8 63.8 Income taxes — — — 86.0
86.0 Depreciation 13.7 7.0 1.1 0.4 22.2 Amortization of intangible
assets 14.7 6.3 3.9 — 24.9
EBITDA $ 217.8 $ 105.8
$ 15.4 $ (45.2 )
$ 293.8 EBITDA as a % of sales
5.5 % 5.5 % 4.6 %
nm 4.7 % Foreign exchange and other
non-operating expense $ — $ — $ — $ 21.1 $ 21.1 Stock-based
compensation 9.0 4.7 0.1 0.1 13.9 Restructuring charge 4.0 4.0 0.1
0.1 8.2 Write-off of capitalized software 1.9 0.9 — 0.3 3.1 Latin
America asset write-offs 10.7 1.0 — — 11.7 Dilapidation provision
0.9 0.8 — — 1.7 Acquisition and integration costs — — 0.2 13.0 13.2
Pension divestiture costs 0.3 0.1 — —
0.4
Adjusted EBITDA $ 244.6
$ 117.3 $ 15.8 $
(10.6 ) $ 367.1 Adjusted
EBITDA as a % of sales 6.2 % 6.1 %
4.7 % nm 5.9 % nm -
not meaningful
2014 EBITDA by Segment
Three Months Ended January 2, 2015 (in millions)
As Adjusted NSS EES UPS
Corporate Total Net income from
continuing operations $ 53.0 $ 30.3 $ — $ (47.5 ) $ 35.8 Interest
expense — — — 15.1 15.1 Income taxes — — — 27.1 27.1 Depreciation
3.5 2.0 — — 5.5 Amortization of intangible assets 3.8 1.4
— — 5.2
EBITDA $
60.3 $ 33.7 $ —
$ (5.3 ) $ 88.7
EBITDA as a % of sales 6.2 % 7.0
% nm nm 6.1 % Foreign
exchange and other non-operating expense $ — $ — $ — $ 2.4 $ 2.4
Stock-based compensation 1.9 1.4 — — 3.3 Acquisition and strategic
project costs 1.3 0.2 — — 1.5
Adjusted EBITDA $ 63.5 $
35.3 $ — $ (2.9
) $ 95.9 Adjusted EBITDA as a % of
sales 6.6 % 7.3 % nm
nm 6.6 % Twelve Months Ended January
2, 2015 As Adjusted NSS EES UPS
Corporate Total Net income from continuing operations
$ 182.8 $ 139.0 $ — $ (158.4 ) $ 163.4 Interest expense — — — 44.5
44.5 Income taxes — — — 86.2 86.2 Depreciation 12.5 7.5 — — 20.0
Amortization of intangible assets 4.9 5.7 — —
10.6
EBITDA $ 200.2
$ 152.2 $ — $
(27.7 ) $ 324.7 EBITDA as a %
of sales 5.8 % 7.5 % nm
nm 5.9 % Foreign exchange and other
non-operating expense $ — $ — $ — $ 16.0 $ 16.0 Stock-based
compensation 7.6 5.0 — — 12.6 Acquisition and strategic project
costs 7.0 0.2 — — 7.2
Adjusted EBITDA $ 214.8 $
157.4 $ — $ (11.7
) $ 360.5 Adjusted EBITDA as a % of
sales 6.2 % 7.8 % nm
nm 6.5 % nm - not meaningful
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INVESTOR CONTACTSAnixter International Inc.Ted
DoschEVP - Finance & Chief Financial Officer(224)
521-4281orLisa Micou Meers, CFAVP - Investor
Relations(224) 521-8895
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