Diluted EPS of $1.09 versus $0.17 in prior
year
Adjusted diluted EPS of $1.31 increased 25%
versus $1.05 in prior year
Fourth Quarter
Highlights
- Record fourth quarter sales of $1.9
billion, up 3%
- Network & Security Solutions
sales up 6.0% to $1.0 billion, bringing full year NSS sales to $4.1
billion
- Generated $279 million in cash from
operations for the full year compared to $92 million in
2015
Anixter International Inc. (NYSE: AXE) today reported sales of
$1.9 billion for the quarter ended December 30, 2016, a 3.2%
increase compared to the prior year quarter. Organic sales
increased 4.0% year-over-year excluding the impact of the following
items:
- $6.1 million favorable impact from the
higher average price of copper
- $20.3 million unfavorable impact from
the fluctuation in foreign currencies
The current quarter had 62 billing days, compared to 61 billing
days in the fourth quarter of 2015, which ended on January 1, 2016.
Excluding the favorable impact from one additional billing day,
organic sales increased 2.3% versus prior year.
All commentary in this release reflects results from continuing
operations unless otherwise noted. Please refer to the tables at
the end of this release for the reconciliations from our reported
results prepared in accordance with U.S. GAAP to the Non-GAAP
measures.
Net income of $36.8 million includes amortization of intangible
assets and acquisition and integration costs of $9.8 million
pre-tax and $7.6 million after-tax. Net income of $5.5 million in
the fourth quarter of 2015 includes amortization of intangible
assets, acquisition and integration costs, restructuring charge,
Latin America bad debt provision, write-off of deferred financing
costs, foreign exchange loss from devaluation of foreign
currencies, loss on extinguishment of debt and an unfavorable tax
expense, which combined had a $29.8 million pre-tax and $29.5
million after-tax impact.
Excluding the impact of the above items, fourth quarter of 2016
adjusted net income of $44.4 million compares to $35.0 million in
the prior year quarter, a 26.1% increase.
Diluted earnings per share of $1.09 compares to $0.17, and
adjusted diluted earnings per share of $1.31 compares to $1.05,
both versus prior year quarter.
Adjusted EBITDA of $101.7 million, or 5.4% of sales, compares to
prior year adjusted EBITDA of $101.8 million, or 5.5% of sales.
"We are pleased to report the strongest organic growth rate in
our Network and Security Solutions segment since the third quarter
of 2011, driven by strength in our North America and Europe
geographies and our security business. Full year sales in NSS
reached a record $4.1 billion," commented Bob Eck, President and
CEO. "Consistent with what we indicated in our third quarter
release, our Electrical & Electronic Solutions segment returned
to growth in the fourth quarter. Sales trends in both our EES and
Utility Power Solutions segments, which continue to be impacted by
a sluggish industrial economy, improved as our customers' end
markets began to recover. In addition, we continue to progress with
the integration of our acquired businesses, exceeding our 2016
synergy targets and remaining on track to deliver over $40 million
in combined EBITDA synergies by 2018."
Income Statement Detail
Gross margin of 20.4% compares to 20.2% in the prior year
quarter and 20.3% on a sequential basis, with the increase in both
periods driven by segment and product mix.
Operating expense of $306.1 million, or 16.2% of sales, compares
to prior year operating expense of $305.6 million, or 16.6% of
sales. Excluding current quarter expense of $9.8 million and fourth
quarter 2015 expense of $25.7 million, as detailed above, fourth
quarter 2016 adjusted operating expense was $296.3 million compared
to $279.9 million, in the prior year quarter. Current quarter
adjusted operating expense was 15.6% of sales, compared to 15.2% of
sales in the fourth quarter of 2015, driven primarily by segment
mix.
Operating income of $81.0 million, or 4.3% of sales, compares to
$65.8 million, or 3.6% of sales, in the prior year quarter.
Excluding operating expense items outlined above, fourth quarter
2016 adjusted operating income of $90.8 million, or 4.8% of sales,
compares to $91.5 million, or 5.0% of sales, in the prior year
quarter.
Interest expense of $19.0 million compares to $21.1 million in
the prior year quarter, reflecting our focus on decreasing debt
with the strong cash flow generated in 2016. Foreign exchange and
other expense of $3.4 million compares to $8.1 million in the prior
year quarter. Excluding a loss of $2.9 million related to the
currency devaluation of the Argentine peso and $0.9 million of
costs associated with the extinguishment of debt, adjusted foreign
exchange and other expense was $4.3 million in the fourth quarter
of 2015.
Our fourth quarter U.S. GAAP effective tax rate was 37.2% versus
84.9% in the prior year quarter and our full year U.S. GAAP
effective tax rate was 38.7% compared to 47.0% in the prior year.
Our full year Non-GAAP effective tax rate of 37.0% differs from our
third quarter full year estimate of 37.7% primarily due to country
mix of earnings.
Segment Update
Network & Security Solutions ("NSS") sales of $1.0
billion increased by 6.0% over the prior year period, driven by
8.0% growth in North America. Adjusting for the $10.2 million
unfavorable impact from foreign exchange, NSS organic sales
increased 7.0%, which was a 5.3% increase on a per day basis versus
the prior year period.
Fourth quarter NSS security sales of $410.0 million, which
represents approximately 40% of segment sales, increased 5.1% from
the prior year quarter. Adjusted for the $3.3 million negative
currency impact, organic security sales growth was 5.9%.
NSS operating income of $77.2 million compares to $61.8 million
in the prior year quarter and $74.9 million in the third quarter of
2016. NSS adjusted EBITDA increased 8.3% versus the prior year
quarter to $81.9 million, and increased 3.5% versus the third
quarter of 2016. The corresponding adjusted EBITDA margin of 7.9%
compares to 7.7% in the prior year quarter and 7.5% in the third
quarter of 2016.
Electrical & Electronic Solutions (“EES”) sales of
$507.0 million compares to $502.6 million in the prior year period,
an increase of 0.9%. Adjusted for the $10.0 million unfavorable
impact from foreign exchange and the $6.1 million favorable impact
from higher average copper prices, EES organic sales increased 1.7%
which was the first quarter with year-over-year organic growth over
the last 6 quarters. On a per day basis organic sales were
unchanged.
EES operating income of $22.4 million compares to $19.2 million
in the prior year quarter and $28.7 million in the third quarter of
2016. The 16.7% increase in operating income versus prior year was
driven by improved profitability in our North America industrial
markets while the sequential decline is consistent with the
seasonality of the business.
EES adjusted EBITDA of $25.6 million compares to $24.7 million
in the prior year period and $31.4 million in the third quarter of
2016. The corresponding adjusted EBITDA margin of 5.1% compares to
4.9% in the prior year period, reflecting stabilization in our
industrial end markets.
Utility Power Solutions (“UPS”) sales of $347.5 million
compares to $351.6 million in the prior year period, a decrease of
1.2%, which represents a decrease of 2.8% on an organic per day
basis. As indicated in the prior four quarters, sales in this
segment continue to be negatively impacted by weakness in oil and
gas regions in Canada and the timing of utility customers' major
project spend.
UPS operating income of $14.6 million compares to $15.3 million
in the prior year quarter and $15.8 million in the third quarter of
2016. UPS adjusted EBITDA was $19.2 million, or 5.5% of sales,
which compares to $20.8 million, or 5.9% of sales, in the prior
year quarter and $21.1 million, or 5.7% of sales, in the third
quarter of 2016.
Cash Flow and Leverage
For the full year 2016 we generated $278.8 million in cash flow
from operations, which compares to our previous outlook range of
$280 - $300 million. The $186.9 million increase from 2015 cash
flow from operations of $91.9 million was driven primarily by
working capital efficiencies. Full year capital expenditures of
$32.6 million compares to $28.6 million in the prior year
period.
"Solid execution of our growth strategies, combined with
financial discipline, resulted in record quarterly results in NSS
and continued improvement in business trends in both EES and UPS.
Meanwhile, across the business we have a relentless focus on
improving our margin, reducing our cost structure and delivering
working capital efficiency, positioning us to deliver solid
operating leverage as industrial end markets recover," commented
Ted Dosch, Executive Vice President - Finance and CFO. "We were
pleased to deliver another quarter of strong cash flow from
operations, enabling us to continue to reduce our outstanding debt.
Turning to our capital structure, our priorities continue to
include returning to our debt-to-capital target range of 45 - 50%
by the second half of 2017, funded by the strong free cash flow we
are generating from our repositioned platform and working capital
initiatives."
Key capital structure and credit-related statistics for the
quarter:
- Debt-to-total capital ratio improved to
51.6% from 58.2% at the end of 2015
- Weighted average cost of borrowed
capital of 5.1% compares to 4.8% in the prior year quarter
- $570.2 million available under
revolving lines of credit and secured accounts receivable and
inventory facilities
Business Outlook
"As we enter 2017, we expect the positive momentum we
experienced in the fourth quarter of 2016 to continue. Following
several years of challenging industrial end markets, we are
optimistic that the underlying economic environment is slowly
improving, reflected by recent increases in both commodity prices
and global growth forecasts," commented Bob Eck. "Based on our
current sales trend, backlog, and robust pipeline across all three
segments, we expect continued solid growth in NSS and a return to
full year growth in both our EES and UPS segments. Overall we
expect first quarter 2017 organic sales growth in the 1 - 3% range
and full year 2017 organic sales growth in the 1 - 4% range."
Financial Results from Continuing
Operations
Three Months Ended Twelve Months Ended
(In millions, except per share amounts)
Dec 30, 2016
Jan 1, 2016
PercentChange
Dec 30, 2016 Jan 1, 2016
PercentChange
Net Sales $ 1,894.6 $ 1,835.8 3 % $ 7,622.8 $ 6,190.5 23 %
Operating Income $ 81.0 $ 65.8 23 % $ 285.3 $ 267.8 6 % Net Income
$ 36.8 $ 5.5 nm $ 121.1 $ 96.9 25 % Diluted Earnings Per Share $
1.09 $ 0.17 nm $ 3.61 $ 2.90 24 % Diluted Weighted Shares 33.8 33.5
1 % 33.6 33.4 1 % nm - not meaningful
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: (877) 201-0168
International dial-in: (647) 788-4901 Conference ID: 2858 8629
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 2016 Highlights
and Operating Review” will be available on the Investor Relations
section of our 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) nearly
600,000 products and over $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 approximately 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 relationships or 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, information security risks, risks associated with
substantial debt and restrictions contained in financial and
operating covenants in our debt agreements, the impact and the
uncertainty concerning the timing and terms of the withdrawal by
the United Kingdom from the European Union, and risks associated
with integration of acquired companies, including, but not limited
to, the risk that the acquisitions may not provide us with the
synergies or other benefits that were anticipated. 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 (“U.S. 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 an U.S.
GAAP and non-GAAP basis. We believe that by providing non-GAAP
organic growth, which adjusts for the impact of acquisitions (when
applicable), foreign exchange fluctuations, copper prices and the
number of billing days, 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. We calculate the year-over-year organic sales growth
impact relating to the Power Solutions acquisition by including its
2015 comparable period results prior to the acquisition 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 company we acquired and the synergistic revenues that
have been or will be achieved. Historically and 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, pension settlements,
etc.) in presenting adjusted operating expense, adjusted operating
income, adjusted income taxes and adjusted net income 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. As a result of the recent acquisitions we have
also excluded amortization of intangible assets associated with
purchase accounting from acquisitions from the adjusted amounts for
comparison of the non-GAAP financial measures period over
period.
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 items from reported financial results, as
defined above. We believe that adjusted operating income, EBITDA
and Adjusted EBITDA provide relevant and useful information, which
is widely used by analysts, investors and competitors in our
industry as well as by our management in assessing both
consolidated and business segment performance. Adjusted operating
income provides an understanding of the results from the primary
operations of our business by excluding the effects of certain
items that do not reflect the ordinary earnings of our operations.
We use adjusted operating income to evaluate our period-over-period
operating performance because we believe this provides a more
comparable measure of our continuing business excluding certain
items that are not reflective of expected ongoing operations. This
measure may be useful to an investor in evaluating the underlying
performance of our business. EBITDA provides us with an
understanding of earnings before the impact of investing and
financing charges and income taxes. Adjusted EBITDA further
excludes the effects of foreign exchange and other non-cash
stock-based compensation, and certain items that do not reflect the
ordinary earnings of our operations and that are also excluded for
purposes of calculating adjusted net income, adjusted earnings per
share and adjusted operating income. EBITDA and Adjusted EBITDA are
used by our management for various purposes including as measures
of performance of our operating segments and as a basis for
strategic planning and forecasting. Adjusted EBITDA may be useful
to an investor because this measure is widely used to evaluate a
company’s operating performance without regard to items excluded
from the calculation of such measure, which can vary substantially
from company to company depending on the accounting methods, book
value of assets, capital structure and the method by which the
assets were acquired, among other factors. 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 U.S. 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, including the related notes, and
Management’s Discussion and Analysis of Financial Condition and
Results of Operations included in this release. 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
December 30,2016
January 1,2016
December 30,2016
January 1,2016
(In millions, except per share amounts) Net sales
$ 1,894.6 $ 1,835.8 $
7,622.8 $ 6,190.5 Cost of goods sold 1,507.5
1,464.4 6,074.8 4,850.0
Gross
profit 387.1 371.4 1,548.0 1,340.5
Operating expenses 306.1 305.6 1,262.7 1,072.7
Operating income 81.0 65.8 285.3
267.8 Other expense: Interest expense (19.0 ) (21.1 ) (78.7
) (63.8 ) Other, net (3.4 ) (8.1 ) (9.1 ) (21.1 ) Income from
continuing operations before income taxes 58.6 36.6 197.5 182.9
Income tax expense from continuing operations 21.8 31.1
76.4 86.0
Net income from continuing
operations 36.8 5.5 121.1 96.9
Income (loss) from discontinued operations before income taxes 0.2
(3.0 ) (0.1 ) 11.9 Gain (loss) on sale of business — 1.3 (0.7 )
41.0 Income tax expense (benefit) from discontinued operations 0.2
(0.8 ) (0.2 ) 22.2
Net (loss) income from
discontinued operations — (0.9 )
(0.6 ) 30.7 Net income $
36.8 $ 4.6 $ 120.5
$ 127.6 Income (loss) per share:
Basic: Continuing operations $ 1.10 $ 0.17 $ 3.63 $ 2.92
Discontinued operations — (0.03 ) (0.02 ) 0.92
Net
Income $ 1.10 $ 0.14
$ 3.61 $ 3.84
Diluted: Continuing operations $ 1.09 $ 0.17 $ 3.61 $ 2.90
Discontinued operations — (0.03 ) (0.02 ) 0.91
Net
Income $ 1.09 $ 0.14
$ 3.59 $ 3.81
Weighted-average common shares outstanding: Basic 33.4 33.3
33.4 33.2 Diluted 33.8 33.5 33.6 33.4
Reportable
Segments Net sales: (As revised*) (As
revised*) Network & Security Solutions $ 1,040.1 $ 981.6 $
4,083.8 $ 3,968.2 Electrical & Electronic Solutions 507.0 502.6
2,103.2 1,816.5 Utility Power Solutions 347.5 351.6
1,435.8 405.8 $ 1,894.6 $ 1,835.8 $
7,622.8 $ 6,190.5
Operating income: Network
& Security Solutions $ 77.2 $ 61.8 $ 275.8 $ 258.2 Electrical
& Electronic Solutions 22.4 19.2 97.5 121.1 Utility Power
Solutions 14.6 15.3 56.7 22.4 Corporate (33.2 ) (30.5 ) (144.7 )
(133.9 ) $ 81.0 $ 65.8 $ 285.3 $ 267.8
* Revised due to change in composition of our reportable
segments in the first quarter of 2016. ANIXTER
INTERNATIONAL INC. Condensed Consolidated Balance Sheets
(Unaudited)
December 30,2016
January 1,2016
(In millions) ASSETS Current assets:
Cash and cash equivalents $ 115.1 $ 151.3 Accounts receivable, net
1,353.2 1,326.4 Inventories 1,178.3 1,182.6 Other current assets
41.9 67.5 Total current assets 2,688.5 2,727.8
Property and equipment, net 140.3 131.8 Goodwill 764.6 756.5
Intangible assets, net 415.4 453.8 Other assets 84.8 72.1
Total assets $ 4,093.6 $
4,142.0 LIABILITIES AND STOCKHOLDERS'
EQUITY Current liabilities: Accounts payable $ 1,006.0 $
905.6 Accrued expenses 257.9 250.6 Total current
liabilities 1,263.9 1,156.2 5.50% Senior notes due 2023 346.3 345.8
5.125% Senior notes due 2021 395.7 394.9 5.625% Senior notes due
2019 347.7 346.8 Canadian term loan 95.4 172.9 Revolving lines of
credit 197.1 390.1 Other 3.5 2.6 Unamortized debt issuance costs
(6.9 ) (10.2 ) Other liabilities 158.7 163.5
Total
liabilities 2,801.4 2,962.6 Total
stockholders' equity 1,292.2 1,179.4
Total liabilities and stockholders' equity $
4,093.6 $ 4,142.0
ANIXTER INTERNATIONAL INC. Condensed Consolidated
Statements of Cash Flows (Unaudited) Twelve
Months Ended
December 30,2016
January 1,2016
(In millions) Operating activities: Net income
$ 120.5 $ 127.6 Adjustments to reconcile net income to net cash
provided by operating activities: Gain on sale of business, net of
tax expense of $17.3 in 2015 — (40.0 ) Depreciation 27.9 23.8
Amortization of intangible assets 37.6 25.4 Stock-based
compensation 16.5 14.5 Deferred income taxes 0.7 5.9 Accretion of
debt discount 2.2 1.8 Amortization of deferred financing costs 2.4
2.0 Pension plan contributions (29.0 ) (37.7 ) Pension plan
expenses 20.8 11.4 Loss on extinguishments of debt — 0.9 Excess
income tax benefit from employee stock plans (0.3 ) (0.6 ) Changes
in current assets and liabilities, net 85.8 (44.1 ) Other, net (6.3
) 1.0
Net cash provided by operating activities
278.8 91.9 Investing activities: Acquisitions
of businesses, net of cash acquired (4.7 ) (822.5 ) Proceeds from
sale of business — 371.8 Capital expenditures, net (32.6 ) (28.6 )
Net cash used in investing activities (37.3 )
(479.3 ) Financing activities: Proceeds from
borrowings 1,136.5 1,442.6 Repayments of borrowings (1,327.9 )
(1,116.5 ) Proceeds from issuance of Notes due 2023 — 345.6
Proceeds from issuance of Canadian term loan — 229.1 Repayments of
Canadian term loan (83.7 ) (45.1 ) Retirement of Notes due 2015 —
(200.0 ) Repayment of term loan — (198.8 ) Deferred financing costs
— (6.7 ) Proceeds from stock options exercised 2.4 — Excess income
tax benefit from employee stock plans 0.3 0.6 Other, net (0.6 )
(1.0 )
Net cash (used in) provided by financing activities
(273.0 ) 449.8 (Decrease) increase
in cash and cash equivalents (31.5 ) 62.4
Effect of exchange rate changes on cash balances (4.7
) (3.1 ) Cash and cash equivalents at
beginning of period 151.3 92.0
Cash and cash
equivalents at end of period $ 115.1
$ 151.3 ANIXTER INTERNATIONAL
INC. Financial Measures That Supplement U.S. GAAP
(Unaudited)
Fourth Quarter 2016 Sales Growth Trends
Q4 2016 Q4 2015
Adjusted Adjusted Per Day
Foreign Organic 2015 Pro Organic
As Exchange Copper As As
Growth/ Forma for Growth/ (In millions)
Reported Impact Impact Adjusted
Revised* (Decline) Extra Day
(Decline) Network & Security Solutions North
America $ 818.6 $ 0.4 $ — $ 819.0 $ 758.1 8.0 % $ 770.5 6.3 % EMEA
90.7 5.3 — 96.0 86.9 10.5 % 88.3 8.7 % Emerging Markets 130.8
4.5 — 135.3 136.6 (0.9 )% 138.8
(2.5 )%
NSS $ 1,040.1 $
10.2 $ — $ 1,050.3
$ 981.6 7.0 % $
997.6 5.3 % Electrical &
Electronic Solutions North America $ 405.9 $ 0.4 $ (4.8 ) $
401.5 $ 395.0 1.7 % $ 401.5 — % EMEA 53.2 8.2 (0.9 ) 60.5 59.3 2.1
% 60.3 0.5 % Emerging Markets 47.9 1.4 (0.4 ) 48.9
48.3 1.2 % 49.1 (0.5 )%
EES $
507.0 $ 10.0 $
(6.1 ) $ 510.9 $
502.6 1.7 % $ 510.9
— % Utility Power Solutions
North America $ 347.5 $ 0.1 $ — $ 347.6
$ 351.6 (1.2 )% $ 357.4 (2.8 )%
UPS $
347.5 $ 0.1 $ —
$ 347.6 $ 351.6
(1.2 )% $ 357.4 (2.8
)% Total
$ 1,894.6 $ 20.3 $
(6.1 ) $ 1,908.8 $
1,835.8 4.0 % $ 1,865.9
2.3 % Geographic Sales North
America $ 1,572.0 $ 0.9 $ (4.8 ) $ 1,568.1 $ 1,504.7 4.2 % $
1,529.4 2.5 % EMEA 143.9 13.5 (0.9 ) 156.5 146.2 7.1 % 148.6 5.4 %
Emerging Markets 178.7 5.9 (0.4 ) 184.2 184.9
(0.4 )% 187.9 (2.0 )%
Total $
1,894.6 $ 20.3 $
(6.1 ) $ 1,908.8 $
1,835.8 4.0 % $ 1,865.9
2.3 % Note: There were 62
billing days in the fourth quarter of 2016 compared to 61 billing
days in the fourth quarter of 2015.
* Revised due to change in composition of our reportable
segments in the first quarter of 2016.
ANIXTER INTERNATIONAL INC. Financial Measures That
Supplement U.S. GAAP (Unaudited) - continued
December Year-to-Date 2016 Sales Growth Trends
YTD 2016 YTD 2015
Adjusted
Adjusted Per Day Foreign Organic
2015 Pro Organic As Exchange
Copper As As Acquisition
Pro
Growth/ Forma for Growth/ (In millions)
Reported Impact Impact Adjusted
Revised* Impact
Forma
(Decline) Extra Day (Decline) Network &
Security Solutions North America $ 3,250.6 $ 11.4 $ — $ 3,262.0
$ 3,095.1 $ — $ 3,095.1 5.4 % $ 3,107.3 5.0 % EMEA 340.7 11.8 —
352.5 342.8 — 342.8 2.8 % 344.2 2.4 % Emerging Markets 492.5
15.9 — 508.4 530.3 — 530.3
(4.1 )% 532.4 (4.5 )%
NSS $
4,083.8 $ 39.1 $ —
$ 4,122.9 $ 3,968.2
$ — $ 3,968.2
3.9 % $ 3,983.9 3.5
% Electrical & Electronic Solutions North
America $ 1,698.2 $ 8.2 $ 36.9 $ 1,743.3 $ 1,328.3 $ 426.4 $
1,754.7 (0.6 )% $ 1,761.6 (1.0 )% EMEA 229.4 21.3 2.5 253.2 259.0 —
259.0 (2.2 )% 260.0 (2.6 )% Emerging Markets 175.6 5.4
3.9 184.9 229.2 — 229.2
(19.3 )% 230.1 (19.7 )%
EES $ 2,103.2
$ 34.9 $ 43.3
$ 2,181.4 $ 1,816.5
$ 426.4 $ 2,242.9
(2.7 )% $ 2,251.7 (3.1
)% Utility Power Solutions North America $
1,435.8 $ 7.1 $ 0.9 $ 1,443.8 $ 405.8
$ 1,116.5 $ 1,522.3 (5.2 )% $ 1,528.3
(5.5 )%
UPS $ 1,435.8 $
7.1 $ 0.9 $
1,443.8 $ 405.8 $
1,116.5 $ 1,522.3 (5.2
)% $ 1,528.3 (5.5 )%
Total $ 7,622.8 $ 81.1
$ 44.2 $ 7,748.1
$ 6,190.5 $ 1,542.9
$ 7,733.4 0.2 % $
7,763.9 (0.2 )% Geographic
Sales North America $ 6,384.6 $ 26.7 $ 37.8 $ 6,449.1 $ 4,829.2
$ 1,542.9 $ 6,372.1 1.2 % $ 6,397.2 0.8 % EMEA 570.1 33.1 2.5 605.7
601.8 — 601.8 0.6 % 604.2 0.3 % Emerging Markets 668.1 21.3
3.9 693.3 759.5 — 759.5
(8.7 )% 762.5 (9.1 )%
Total $ 7,622.8
$ 81.1 $ 44.2
$ 7,748.1 $ 6,190.5
$ 1,542.9 $ 7,733.4
0.2 % $ 7,763.9 (0.2
)% Note: There were 254 billing days in 2016
compared to 253 billing days in 2015.
* Revised due to change in composition of our reportable
segments.
ANIXTER INTERNATIONAL INC. Financial Measures That
Supplement U.S. GAAP (Unaudited) - continued
(In millions, except per share
amounts) Positive (Negative) impact Three
Months Ended Twelve Months Ended
December 30,2016
January 1,2016
December 30,2016
January 1,2016
(As revised*) (As revised*)
Continuing operations Items impacting comparability of
results: Items impacting operating expense and operating
income: Amortization of intangible assets $ (9.0 ) $ (9.6 ) $ (37.6
) $ (24.9 ) UK pension settlement — — (9.6 ) (0.4 ) Restructuring
charge — (2.9 ) (5.4 ) (8.2 ) Acquisition and integration costs
(0.8 ) (4.1 ) (5.1 ) (13.2 ) Write-off of capitalized software — —
— (3.1 ) Latin America bad debt provision — (9.1 ) (7.6 ) (11.7 )
Dilapidation provision — — — (1.7 )
Total
of items impacting operating expense and operating income
$ (9.8 ) $ (25.7 )
$ (65.3 ) $ (63.2 ) Items
impacting interest expense: Write-off of deferred financing 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 ) Extinguishment
of debt — (0.9 ) — (0.9 )
Total of items impacting
other expenses $ — $ (3.8
) $ — $ (4.5 )
Total of items impacting pre-tax income $ (9.8
) $ (29.8 ) $ (65.3
) $ (68.0 ) Items impacting income
taxes: Tax impact of items impacting pre-tax income above $ 2.2 $
12.1 $ 18.8 $ 27.4 Establishment of deferred income tax valuation
allowances — (11.3 ) (1.1 ) (11.3 ) Tax benefits related to prior
year tax positions — — 3.2 — Other tax items — (0.5 ) —
(0.5 )
Total of items impacting income taxes $
2.2 $ 0.3 $ 20.9
$ 15.6 Net income impact of these
items $ (7.6 ) $ (29.5
) $ (44.4 ) $ (52.4
) Diluted EPS impact of these items $
(0.22 ) $ (0.88 ) $
(1.32 ) $ (1.56 ) U.S.
GAAP to Non-GAAP Net Income and EPS Reconciliation for continuing
operations: Net income from continuing operations – U.S. GAAP $
36.8 $ 5.5 $ 121.1 $ 96.9 Items impacting net income from
continuing operations 7.6 29.5 44.4 52.4
Net income from continuing operations – Non-GAAP $ 44.4
$ 35.0 $ 165.5 $ 149.3 Diluted
EPS – U.S. GAAP $ 1.09 $ 0.17 $ 3.61 $ 2.90 Diluted EPS impact of
these items 0.22 0.88 1.32 1.56 Diluted
EPS – Non-GAAP $ 1.31 $ 1.05 $ 4.93 $ 4.46
* Revised due to change in composition of items
impacting comparability of results to include amortization of
intangible assets.
ANIXTER INTERNATIONAL
INC. Financial Measures That Supplement U.S. GAAP
(Unaudited) - continued
Items Impacting Comparability of
Operating Income by Segment Three Months Ended
December 30, 2016 (In millions) NSS
EES UPS Corporate
Total Operating income - U.S. GAAP $ 77.2 $ 22.4 $
14.6 $ (33.2 ) $ 81.0 Operating margin - U.S. GAAP 7.4 % 4.4 % 4.2
% nm 4.3 %
Total of
items impacting operating income $ 3.5
$ 2.2 $ 3.1 $
1.0 $ 9.8 Adjusted
operating income - Non-GAAP $ 80.7 $ 24.6 $ 17.7 $ (32.2 ) $ 90.8
Adjusted operating margin - Non-GAAP 7.7 % 4.8 % 5.1 % nm 4.8 %
Items Impacting Comparability of Operating Income
by Segment Twelve Months Ended December 30, 2016
NSS EES UPS Corporate Total
Operating income - U.S. GAAP $ 275.8 $ 97.5 $ 56.7 $ (144.7
) $ 285.3 Operating margin - U.S. GAAP 6.8 % 4.6 % 3.9 % nm 3.7 %
Total of items
impacting operating income $ 19.7 $
13.5 $ 17.4 $ 14.7
$ 65.3 Adjusted operating income
- Non-GAAP $ 295.5 $ 111.0 $ 74.1 $ (130.0 ) $ 350.6 Adjusted
operating margin - Non-GAAP 7.2 % 5.3 % 5.2 % nm 4.6 %
nm - not
meaningful
Items
Impacting Comparability of Operating Income by Segment
Three Months Ended January 1, 2016 (As revised*) (In
millions) NSS EES UPS
Corporate Total Operating income - U.S.
GAAP $ 61.8 $ 19.2 $ 15.3 $ (30.5 ) $ 65.8 Operating margin - U.S.
GAAP 6.3 % 3.8 % 4.4 % nm 3.6 %
Total of items impacting operating income $
12.3 $ 4.5 $ 4.2
$ 4.7 $ 25.7
Adjusted operating income - Non-GAAP $ 74.1 $ 23.7 $ 19.5 $
(25.8 ) $ 91.5 Adjusted operating margin - Non-GAAP 7.5 % 4.7 % 5.5
% nm 5.0 %
Items Impacting Comparability of
Operating Income by Segment Twelve Months Ended January 1,
2016 (As revised*) NSS EES UPS
Corporate Total Operating income - U.S. GAAP $
258.2 $ 121.1 $ 22.4 $ (133.9 ) $ 267.8 Operating margin - U.S.
GAAP 6.5 % 6.7 % 5.5 % nm 4.3 %
Total of items impacting operating income $
27.8 $ 10.5 $ 4.2
$ 20.7 $ 63.2
Adjusted operating income - Non-GAAP $ 286.0 $ 131.6 $ 26.6
$ (113.2 ) $ 331.0 Adjusted operating margin - Non-GAAP 7.2 % 7.2 %
6.6 % nm 5.3 %
nm - not meaningful * Revised due
to change in composition of our reportable segments.
ANIXTER INTERNATIONAL INC. Financial Measures That
Supplement U.S. GAAP (Unaudited) - continued
2016 and 2015
Effective Tax Rate – U.S. GAAP and Non-GAAP Three
Months Ended Twelve Months Ended
December 30,2016
January 1,2016
December 30,2016
January 1,2016
(In millions) (As revised*) (As
revised*) Income from continuing operations before taxes – U.S.
GAAP $ 58.6 $ 36.6 $ 197.5 $ 182.9 Income tax expense – U.S. GAAP $
21.8 $ 31.1 $ 76.4 $ 86.0 Effective income tax rate 37.2 % 84.9 %
38.7 % 47.0 %
Total of items impacting pre-tax income
above $ 9.8 $ 29.9
$ 65.3 $ 68.0 Total of
items impacting income taxes above $ 2.2
$ 0.3 $ 20.9 $
15.6 Income from continuing operations before
income taxes – Non-GAAP $ 68.4 $ 66.5 $ 262.8 $ 250.9 Income tax
expense – Non-GAAP $ 24.0 $ 31.4 $ 97.3 $ 101.6 Adjusted effective
income tax rate 35.1 % 47.2 % 37.0 % 40.5 %
* Revised due
to change in composition of items impacting comparability of
results to include amortization of intangible assets.
2016 EBITDA by Segment
Three Months Ended December 30, 2016 (In
millions) NSS EES UPS
Corporate Total Net income from continuing
operations $ 77.2 $ 22.4 $ 14.6 $ (77.4 ) $ 36.8 Interest expense —
— — 19.0 19.0 Income taxes — — — 21.8 21.8 Depreciation 0.7 0.7 1.1
4.3 6.8 Amortization of intangible assets 3.6 2.2 3.2
— 9.0
EBITDA $ 81.5
$ 25.3 $ 18.9
$ (32.3 ) $ 93.4
EBITDA leverage
3.8
x
17.2
x
nm nm
8.2
x
EBITDA as a % of sales 7.8 % 5.0
% 5.5 % nm 4.9 %
Foreign exchange and other non-operating expense $ — $ — $ — $ 3.4
$ 3.4 Stock-based compensation 0.5 0.3 0.4 2.9 4.1 Restructuring
charge (0.1 ) — (0.1 ) 0.2 — Acquisition and integration costs —
— — 0.8 0.8
Adjusted
EBITDA $ 81.9 $ 25.6
$ 19.2 $ (25.0
) $ 101.7 Adjusted EBITDA
leverage
1.4
x
4.2
x
nm nm
0.0
x
Adjusted EBITDA as a % of sales 7.9 %
5.1 % 5.5 % nm 5.4
% Twelve Months Ended December 30, 2016
NSS EES UPS Corporate Total Net
income from continuing operations $ 275.8 $ 97.5 $ 56.7 $ (308.9 )
$ 121.1 Interest expense — — — 78.7 78.7 Income taxes — — — 76.4
76.4 Depreciation 3.2 2.7 4.2 17.8 27.9 Amortization of intangible
assets 14.1 8.5 15.0 — 37.6
EBITDA $ 293.1 $ 108.7
$ 75.9 $ (136.0 )
$ 341.7 EBITDA leverage
2.1
x
-1.0
x
0.7
x
nm
0.7
x
EBITDA as a % of sales 7.2 % 5.2
% 5.3 % nm 4.5 %
Foreign exchange and other non-operating expense $ — $ — $ — $ 9.1
$ 9.1 Stock-based compensation 1.8 1.0 1.4 12.3 16.5 UK pension
settlement — — — 9.6 9.6 Restructuring charge 1.7 1.3 2.1 0.3 5.4
Latin America bad debt provision 3.9 3.7 — — 7.6 Acquisition and
integration costs — — 0.3 4.8 5.1
Adjusted EBITDA $ 300.5 $
114.7 $ 79.7 $
(99.9 ) $ 395.0 Adjusted
EBITDA leverage
1.0
x
-0.9
x
0.7
x
nm
0.3
x
Adjusted EBITDA as a % of sales 7.4 %
5.5 % 5.5 % nm 5.2
% nm - not meaningful
ANIXTER
INTERNATIONAL INC. Financial Measures That Supplement U.S.
GAAP (Unaudited) - continued
2015 EBITDA by Segment Three Months
Ended January 1, 2016 (As revised*) (In millions)
NSS EES UPS
Corporate Total Net income from continuing
operations $ 61.8 $ 19.2 $ 15.3 $ (90.8 ) $ 5.5 Interest expense —
— — 21.1 21.1 Income taxes — — — 31.1 31.1 Depreciation 0.9 0.7 1.2
3.8 6.6 Amortization of intangible assets 3.6 2.1 3.9
— 9.6
EBITDA $ 66.3
$ 22.0 $ 20.4
$ (34.8 ) $ 73.9
EBITDA leverage
-18.3
x
-4.5
x
0.3
x
nm
-0.6
x
EBITDA as a % of sales 6.8 % 4.4
% 5.8 % nm 4.0 %
Foreign exchange and other non-operating expense $ — $ — $ — $ 8.1
$ 8.1 Stock-based compensation 0.5 0.3 0.1 2.8 3.7 Restructuring
charge 0.6 1.4 0.1 0.8 2.9 Acquisition and integration costs — —
0.2 3.9 4.1 Latin America bad debt provision 8.1 1.0
— — 9.1
Adjusted EBITDA $
75.5 $ 24.7 $ 20.8
$ (19.2 ) $ 101.8
Adjusted EBITDA leverage
-3.8
x
-3.8
x
0.3
x
nm
0.2
x
Adjusted EBITDA as a % of sales 7.7 %
4.9 % 5.9 % nm 5.5
% Twelve Months Ended January 1, 2016 (As
revised*) NSS EES UPS Corporate
Total Net income from continuing operations $ 258.2 $ 121.1
$ 22.4 $ (304.8 ) $ 96.9 Interest expense — — — 63.8 63.8 Income
taxes — — — 86.0 86.0 Depreciation 3.6 1.4 1.2 16.0 22.2
Amortization of intangible assets 14.7 6.3 3.9
— 24.9
EBITDA $ 276.5
$ 128.8 $ 27.5 $
(139.0 ) $ 293.8 EBITDA
leverage
0.2
x
nm
0.3
x
nm
-0.8
x
EBITDA as a % of sales 7.0 % 7.1
% 6.8 % nm 4.7 %
Foreign exchange and other non-operating expense $ — $ — $ — $ 21.1
$ 21.1 Stock-based compensation 1.9 1.3 0.1 10.6 13.9 UK pension
settlement — — — 0.4 0.4 Restructuring charge 2.4 3.2 0.1 2.5 8.2
Acquisition and integration costs — — 0.2 13.0 13.2 Write-off of
capitalized software — — — 3.1 3.1 Latin America bad debt provision
10.7 1.0 — — 11.7 Dilapidation provision — — —
1.7 1.7
Adjusted EBITDA $ 291.5
$ 134.3 $ 27.9
$ (86.6 ) $ 367.1
Adjusted EBITDA leverage
0.4
x
nm
0.3
x
nm
0.1
x
Adjusted EBITDA as a % of sales 7.3 %
7.4 % 6.9 % nm 5.9
% nm - not meaningful * Revised due
to change in composition of our reportable segments in the first
quarter of 2016.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170131005398/en/
Anixter International Inc.INVESTOR CONTACTSTed
DoschEVP - Finance & Chief Financial Officer(224)
521-4281orLisa M. Gregory, CFAVP - Investor
Relations(224) 521-8895
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