Adjusted diluted EPS of $1.21 from
continuing operations
Highlights
- Third quarter sales of $1.5 billion,
up 4%, reflecting 1% organic growth
- Record quarter ECS sales of $1.0
billion, up 15%, reflecting 4% organic growth
- Acquired the Power Solutions
business of HD Supply on October 5th
Anixter International Inc. (NYSE: AXE) today reported quarterly
sales of $1.49 billion for the quarter ended October 2, 2015, a 3.6
percent increase compared to the year-ago quarter. The current
quarter and year-ago quarter each had 64 billing days. Adjusting
for the favorable impact from the third quarter 2014 acquisition of
Tri-Ed and the unfavorable impacts of the stronger US dollar and
weaker average copper prices, organic sales increased 0.7 percent
year-over-year. All commentary in this release reflects 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.
Gross margin of 22.2 percent in the current quarter was the same
as the prior quarter and compares to 22.4 percent in the prior year
quarter, reflecting the impact of the Tri-Ed acquisition with its
lower security product gross margin.
Operating income of $78.2 million compares to $82.5 million in
the prior year quarter. Excluding $8.1 million of acquisition and
integration costs in the current quarter and $5.7 million in the
prior year quarter, adjusted operating profit of $86.3 million
compares to $88.2 million in the prior year quarter. Adjusted
operating income was negatively impacted by higher amortization
expense resulting from the Tri-Ed acquisition. Enterprise Cabling
& Security Solutions ("ECS") adjusted operating profit of $61.8
million compares to $52.4 million in the prior year quarter driven
by strong sales growth and effective expense control. Electrical
and Electronic Wire & Cable ("W&C") adjusted operating
profit of $27.6 million compares to $38.7 million in the prior year
quarter, caused by the unfavorable impacts of lower copper prices
and currency headwinds combined with the overall weaker macro
environment, all creating significant negative operating expense
leverage.
Adjusted EBITDA of $99.8 million, or 6.7 percent of sales,
compares to $98.6 million, or 6.9 percent of sales, in the prior
year quarter.
Adjusted net income of $40.4 million compares to $48.5 million
in the prior year quarter. Versus the prior year, currency and
copper had a negative impact on operating profit of $5.2 million,
net of tax, and foreign exchange added incremental losses of $1.4
million, net of tax, compared to the prior year.
Adjusted earnings per diluted share of $1.21 compares to $1.46
in the prior year quarter. Current year earnings were negatively
impacted by $0.20 from the currency and copper impact.
"Our ECS segment achieved record quarterly sales exceeding $1
billion, a 15 percent increase from the prior year quarter,
reflecting the Tri-Ed acquisition and an acceleration in our EMEA
and emerging markets geographies. Strong volume growth combined
with effective expense management led to increased margin in ECS,"
commented Bob Eck, President and CEO. "Our W&C segment
continued to experience weaker trends, reflecting lower copper
prices as well as exposure to energy and weaker industrial
projects."
Income Statement Detail
Operating expense of $252.7 million compares to $240.2 million
in the prior year quarter. The current quarter and prior year
quarter include $8.1 million and $5.7 million, respectively, of
acquisition and integration costs associated with the Power
Solutions and Tri-Ed acquisitions. Excluding these costs as well as
a favorable $10.3 million impact of foreign currency, and including
$14.8 million of pro forma Tri-Ed expenses in the prior year,
adjusted operating expense would have increased by 2.3 percent. In
addition to a volume-related operating expense increase, current
quarter operating expense includes the year-over-year incremental
impact of approximately $3.6 million from the previously disclosed
higher pension and other employee benefit costs. Further adjusting
for this, adjusted operating expense would have increased 0.9
percent.
Interest expense of $15.8 million increased by $5.5 million
compared to the prior year quarter. The increase in interest
expense results from the issuance of the 5.5% Senior notes due 2023
in August 2015 to fund the Power Solutions acquisition, the Senior
notes due 2021 issued in September 2014 to fund the Tri-Ed
acquisition and incremental interest expense from the term loan
received in August 2014, partially offset by the repayment of the
5.95% Senior notes in March 2015.
Foreign exchange and other expense of $5.5 million compares to
$2.0 million in the prior year quarter, primarily due to $2.2
million additional foreign exchange losses resulting from
significant strengthening of the US dollar.
Our third quarter adjusted effective tax rate is 37.8 percent,
bringing our full year adjusted effective tax rate to 37.5 percent,
which is up 20 basis points sequentially. The increase from the
prior year quarter adjusted effective tax rate of 36.4 percent was
due to the change in the country mix of earnings.
Segment Update
Enterprise Cabling & Security Solutions (“ECS”) sales
of $1,035.4 million compares to $903.9 million in the prior year
period, a 14.5 percent increase, driven by an increase in security
sales resulting from the Tri-Ed acquisition and strength in our
emerging markets and EMEA regions. ECS organic sales increased by a
strong 4.0 percent, adjusting for the $39.0 million unfavorable
impact from foreign exchange on current year sales and the $128.9
million favorable impact from the Tri-Ed acquisition.
Record quarter ECS security sales of $402.4 million, which
represents approximately 39 percent of total segment sales,
increased 40 percent from the prior year quarter. Adjusted for the
impact of Tri-Ed and the $13.8 million negative currency impact,
organic security sales growth was flat.
ECS adjusted EBITDA of $71.0 million compares to $58.3 million
in the prior year quarter. The corresponding margin of 6.9 percent
compares to 6.5 percent in the prior year quarter, driven by strong
sales growth and effective expense control.
Electrical and Electronic Wire & Cable (“W&C”)
sales of $453.8 million compares to $534.1 million in the prior
year period, a 15.0 percent decrease. Excluding the $24.3 million
unfavorable impact from foreign exchange and the $24.9 million
unfavorable impact from lower average copper prices, W&C
organic sales decreased by 5.8 percent reflecting slower sales
growth in all regions.
W&C adjusted EBITDA of $31.8 million compares to $43.2
million in the prior year quarter. The corresponding adjusted
EBITDA margin of 7.0 percent compares to 8.1 percent in the prior
year quarter. The decline in margin versus the prior quarter was
caused by the unfavorable impacts of lower copper prices and
currency headwinds combined with the overall weaker macro
environment, all creating significant negative operating expense
leverage.
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 beginning in the first quarter of 2015, and
2014 results have been restated to reflect this classification. A
net loss of $2.9 million from discontinued operations was incurred
in the quarter, resulting in diluted loss per share from
discontinued operations of $0.09.
Cash Flow and Leverage
Net cash provided by operations was $93.7 million for the nine
months ended October 2, 2015, which compares to $68.6 million in
the prior year period. Year-to-date capital expenditures of $29.2
million compares to $30.5 million in the prior year period. For the
full year we expect to invest approximately $40 million in capital
investments while generating over $150 million in cash flow from
operations.
“Strong growth in our ECS business, offset by the impacts of
lower average copper prices and the stronger US dollar contributed
to the third consecutive quarter in which we have delivered solid
results in a challenging macro economic environment. In light of
the ongoing headwinds, we continue to focus on opportunities to
improve our long term cost structure and have implemented all the
actions that constitute the restructuring we announced on our
second quarter call which will result in $13 million of annualized
cost savings," commented Ted Dosch, Executive Vice President -
Finance and CFO. "The ongoing integration of the Tri-Ed business
delivered expected synergies to the combined security business in
the first full year post-closing. With the closing of the Power
Solutions acquisition, our focus will be on the successful
integration of this business to maximize the significant synergy
opportunities. With the strong free cash flow we expect to generate
from our existing platform we plan to reduce our debt to our target
range of 45 - 50% debt-to-capital in the next 12 - 18 months."
Key capital structure and credit-related statistics for the
quarter:
- Debt-to-total capital ratio of 51.8%
compares to 51.6% at the end of 2014
- Weighted average cost of borrowed
capital of 5.3% compares to 4.7% in the year-ago quarter
- $336.7 million available under
revolving lines of credit and accounts receivable securitization
facility
Strategy Update and Business
Outlook
"In addition to solid execution in the business in a challenging
macro environment, the current quarter was marked by significant
progress on our strategic goals. Power Solutions represents the
largest acquisition in Anixter's history and transforms Anixter
into one of the leading North American electrical distribution
platforms, enhances our competitive position in the electrical wire
and cable business and further strengthens our overall customer and
supplier value proposition," commented Bob Eck. "The strategic
actions we have completed over the last 5 quarters, including the
acquisition of Tri-Ed, the sale of Fasteners and the acquisition of
Power Solutions, position Anixter as a leading global competitor in
each of our businesses, provide a platform for substantial and
sustainable long term growth, and will enable us to maximize
shareholder value in both the near term and the long term."
Eck concluded, “Based on current backlog trends we believe that
momentum in our security and network infrastructure businesses will
continue in the fourth quarter. While our Wire & Cable business
continues to be impacted by macro-economic headwinds, including
lower copper and oil prices, the acquisition of Power Solutions is
a critical strategic step to increase the competitiveness and
profitable growth of this business going forward. With year-to-date
2015 organic sales growth from continuing operations of 2.1
percent, we expect our full year organic sales growth to be in the
1.5 - 2.5 percent range."
Power Solutions
As previously announced, on October 5, 2015, Anixter completed
the acquisition of the Power Solutions segment of HD Supply. Power
Solutions reported fiscal 2014 revenue of $1.9 billion and adjusted
EBITDA of $79 million. The acquisition is expected to be accretive
to earnings by $0.50 - $0.60 in fiscal year 2016, exclusive of
transaction and one-time integration expenses. We will hold an
Investor Day on Monday, November 9, 2015, at which time we will
discuss our growth strategies including integration plans for Power
Solutions and a realignment of business segments.
Financial Results from continuing
operations
(In millions, except per share amounts)
Three Months Ended Nine Months Ended
Oct 2, Oct 3, Percent Oct
2, Oct 3, Percent 2015
2014 Change 2015 2014 Change Net
Sales $ 1,489.2 $ 1,438.0 4 % $ 4,354.7 $ 4,055.2 7 % Operating
Income $ 78.2 $ 82.5 (5 )% $ 202.0 $ 229.7 (12 )% EBITDA $ 82.9 $
87.6 (5 )% $ 219.9 $ 236.0 (7 )% Net Income $ 35.4 $ 45.4 (22 )% $
91.4 $ 127.6 (28 )% Diluted Earnings Per Share $ 1.06 $ 1.36 (22 )%
$ 2.73 $ 3.83 (29 )% Diluted Weighted Shares 33.4 33.4 — % 33.4
33.3 — %
Third 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) 438-5524
International dial-in: (719) 325-2494 Passcode: 529361
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 “Third 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
enterprise cabling and security solutions, electrical and
electronic wire and cable. The company adds value to the
distribution process by providing its customers access to 1)
innovative inventory management programs 2) approximately 400,000
products and $0.9 billion in inventory 3) approximately 220
warehouses/branch locations with approximately 5.5 million square
feet of space and 4) locations in over 250 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 acquisition 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 company 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 Nine Months Ended
October 2, 2015
October 3, 2014
October 2, 2015
October 3, 2014
(In millions, except per share amounts) As Adjusted
As Adjusted Net sales $ 1,489.2
$ 1,438.0 $ 4,354.7 $
4,055.2 Cost of goods sold 1,158.3 1,115.3
3,385.6 3,137.4
Gross profit 330.9
322.7 969.1 917.8 Operating expenses 252.7
240.2 767.1 688.1
Operating
income 78.2 82.5 202.0 229.7
Interest expense (15.8 ) (10.3 ) (42.7 ) (29.4 ) Other, net (5.5 )
(2.0 ) (13.0 ) (13.6 ) Income from continuing operations before
income taxes 56.9 70.2 146.3 186.7 Income tax expense from
continuing operations 21.5 24.8 54.9 59.1
Net income from continuing operations 35.4
45.4 91.4 127.6 (Loss) income from
discontinued operations before income taxes (1) (3.1 ) 10.2 54.6
37.6 Income tax (benefit) expense from discontinued operations (0.2
) 3.1 23.0 11.5
Net (loss) income from
discontinued operations (2.9 ) 7.1
31.6 26.1 Net income $
32.5 $ 52.5 $
123.0 $ 153.7 Income (loss)
per share: Basic: Continuing operations $ 1.06 $ 1.37 $
2.75 $ 3.87 Discontinued operations (0.09 ) 0.22 0.95
0.79
Net Income $ 0.97 $ 1.59 $ 3.70
$ 4.66
Diluted: Continuing operations $
1.06 $ 1.36 $ 2.73 $ 3.83 Discontinued operations (0.09 ) 0.21
0.95 0.78
Net Income $ 0.97 $
1.57 $ 3.68 $ 4.61
Weighted-average
common shares outstanding: Basic 33.3 33.1 33.2 33.0 Diluted
33.4 33.4 33.4 33.3
Reportable Segments Net
sales: Enterprise Cabling & Security Solutions $ 1,035.4 $
903.9 $ 2,952.8 $ 2,514.7 Electrical and Electronic Wire &
Cable 453.8 534.1 1,401.9 1,540.5 $
1,489.2 $ 1,438.0 $ 4,354.7 $ 4,055.2
Operating income: Enterprise Cabling & Security
Solutions $ 61.8 $ 46.7 $ 140.3 $ 129.8 Electrical and Electronic
Wire & Cable 28.6 38.7 79.8 108.7 Corporate (12.2 ) (2.9 )
(18.1 ) (8.8 ) $ 78.2 $ 82.5 $ 202.0 $ 229.7
(1) Includes $2.6 million loss on disposal and $39.7
million gain on disposal during the three and nine months ended
October 2, 2015, respectively.
ANIXTER INTERNATIONAL
INC. Condensed Consolidated Balance Sheets (Unaudited)
October 2, 2015
January 2, 2015
(In millions) As Adjusted ASSETS Current
assets: Cash and cash equivalents $ 614.9 $ 92.0 Accounts
receivable, net 1,188.1 1,171.0 Inventories 881.9 859.0 Deferred
income taxes 30.7 33.7 Other current assets 52.8 54.9 Current
assets of discontinued operations 41.6 379.2 Total current
assets 2,810.0 2,589.8 Property and equipment, net 107.0 104.2
Goodwill 572.4 582.3 Other assets 257.7 282.5 Long-term assets of
discontinued operations 0.6 27.7
Total assets
$ 3,747.7 $ 3,586.5
LIABILITIES AND STOCKHOLDERS' EQUITY Current
liabilities: Accounts payable $ 852.5 $ 738.5 Accrued expenses
194.3 183.2 Current liabilities of discontinued operations 26.2
108.8 Total current liabilities 1,073.0 1,030.5 5.125%
Senior notes due 2021 394.7 394.2 5.625% Senior notes due 2019
346.6 345.9 5.50% Senior notes due 2023 345.7 — Term loan 195.0
198.8 Revolving lines of credit and other 3.4 3.8 5.95% Senior
notes — 200.0 Accounts receivable securitization facility — 65.0
Other liabilities 188.8 215.1 Long-term liabilities of discontinued
operations 4.5 0.2
Total liabilities 2,551.7
2,453.5 Total stockholders' equity 1,196.0
1,133.0 Total liabilities and stockholders'
equity $ 3,747.7 $ 3,586.5
ANIXTER INTERNATIONAL INC. Condensed Consolidated
Statements of Cash Flows (Unaudited) Nine
Months Ended
October 2, 2015
October 3, 2014
(In millions) Operating activities: Net income
$ 123.0 $ 153.7 Adjustments to reconcile net income to net cash
provided by operating activities: Gain on sale of business, net of
tax of $9.8 (47.1 ) — Depreciation 17.1 17.4 Amortization of
intangible assets 15.8 6.3 Stock-based compensation 10.8 10.3
Accretion of debt discount 1.2 0.7 Amortization of deferred
financing costs 1.1 1.1 Deferred income taxes 4.3 (2.8 ) Excess
income tax benefit from employee stock plans (0.5 ) (4.7 ) Pension
plan contributions (23.3 ) (14.6 ) Pension plan expenses 8.6 3.4
Changes in current assets and liabilities, net (20.5 ) (98.7 )
Other, net 3.2 (3.5 )
Net cash provided by operating
activities 93.7 68.6 Investing activities:
Proceeds from sale of business 381.0 — Capital expenditures, net
(29.2 ) (30.5 ) Acquisition of business, net of cash acquired 2.2
(418.4 )
Net cash provided by (used in) investing
activities 354.0 (448.9 ) Financing
activities: Proceeds from borrowings 643.6 1,161.9 Repayments
of borrowings (707.5 ) (1,322.6 ) Proceeds from issuance of Notes
due 2023 345.6 — Retirement of Notes due 2015 (200.0 ) — Term loan
payments (3.8 ) — Excess income tax benefit from employee stock
plans 0.5 4.7 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 — 5.9 Deferred
financing costs — (1.3 ) Other (1.0 ) (1.7 )
Net cash provided
by financing activities 77.4 408.6
Increase in cash and cash equivalents 525.1
28.3 Effect of exchange rate changes on cash balances
(2.2 ) 2.5 Cash and cash equivalents at
beginning of period 92.0 57.3
Cash and cash
equivalents at end of period $ 614.9
$ 88.1 ANIXTER
INTERNATIONAL INC. Financial Measures That Supplement GAAP
(Unaudited)
Third Quarter 2015 Sales Growth Trends
Q3 2015 Q3 2014
Foreign Organic As
Exchange Copper As As
Acquisition Pro Growth/ ($ millions)
Reported Impact Impact Adjusted
Reported Impact Forma (Decline) (as
adjusted)
Enterprise Cabling and Security Solutions North
America $ 797.6 $ 17.0 $ — $ 814.6 $ 692.3 $ 128.4 $ 820.7 (0.7 )%
Europe 87.6 9.9 — 97.5 83.3 — 83.3 16.9 % Emerging Markets 150.2
12.1 — 162.3 128.3 0.5
128.8 26.0 %
ECS $ 1,035.4
$ 39.0 $ — $
1,074.4 $ 903.9 $
128.9 $ 1,032.8 4.0
% Electrical and Electronic Wire and Cable
North America $ 335.6 $ 15.1 $ 21.3 $ 372.0 $ 396.5 $ — $ 396.5
(6.2 )% Europe 65.7 5.9 1.7 73.3 75.5 — 75.5 (3.0 )% Emerging
Markets 52.5 3.3 1.9 57.7 62.1 —
62.1 (7.1 )%
W&C $ 453.8
$ 24.3 $ 24.9
$ 503.0 $ 534.1 $
— $ 534.1 (5.8 )%
Total $ 1,489.2 $
63.3 $ 24.9 $
1,577.4 $ 1,438.0 $
128.9 $ 1,566.9 0.7
% Geographic Sales North America $ 1,133.2 $
32.1 $ 21.3 $ 1,186.6 $ 1,088.8 $ 128.4 $ 1,217.2 (2.5 )% Europe
153.3 15.8 1.7 170.8 158.8 — 158.8 7.5 % Emerging Markets 202.7
15.4 1.9 220.0 190.4 0.5
190.9 15.2 %
Total $ 1,489.2
$ 63.3 $ 24.9 $
1,577.4 $ 1,438.0 $
128.9 $ 1,566.9 0.7
% September 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)
Enterprise Cabling and Security
Solutions North America $ 2,313.2 $ 40.5 $ — $ 2,353.7 $
1,874.3 $ 417.7 $ 2,292.0 2.7 % Europe 254.1 32.4 — 286.5 249.6 —
249.6 14.7 % Emerging Markets 385.5 26.3 —
411.8 390.8 2.0 392.8 4.8 %
ECS
$ 2,952.8 $ 99.2 $
— $ 3,052.0 $
2,514.7 $ 419.7 $
2,934.4 4.0 % Electrical and
Electronic Wire and Cable North America $ 1,019.4 $ 36.8 $ 43.0
$ 1,099.2 $ 1,100.1 $ — $ 1,100.1 (0.1 )% Europe 201.6 20.2 2.7
224.5 246.2 — 246.2 (8.8 )% Emerging Markets 180.9 7.4
3.9 192.2 194.2 — 194.2
(1.1 )%
W&C $ 1,401.9 $
64.4 $ 49.6 $
1,515.9 $ 1,540.5 $
— $ 1,540.5 (1.6
)% Total $ 4,354.7
$ 163.6 $ 49.6 $
4,567.9 $ 4,055.2 $
419.7 $ 4,474.9 2.1
% Geographic Sales North America $ 3,332.6 $
77.3 $ 43.0 $ 3,452.9 $ 2,974.4 $ 417.7 $ 3,392.1 1.8 % Europe
455.7 52.6 2.7 511.0 495.8 — 495.8 3.1 % Emerging Markets 566.4
33.7 3.9 604.0 585.0 2.0
587.0 2.9 %
Total $ 4,354.7
$ 163.6 $ 49.6 $
4,567.9 $ 4,055.2 $
419.7 $ 4,474.9 2.1
% ANIXTER INTERNATIONAL INC. Financial
Measures That Supplement GAAP (Unaudited) - continued
(In millions, except per share amounts)
Positive (Negative) impact
Three Months Ended Nine Months Ended
October 2, 2015
October 3, 2014
October 2, 2015
October 3, 2014
Continuing operations As Adjusted As Adjusted
Items impacting comparability of results: Items impacting
operating income: Restructuring charge $ — $ — $ (5.3 ) $ —
Write-off of capitalized software — — (3.1 ) — Venezuelan customer
bad debt expense — — (2.6 ) — Dilapidation provision — — (1.7 ) —
Acquisition and integration costs (8.1 ) (5.7 ) (9.1 ) (5.7 )
Pension divestiture costs — — (0.4 ) —
Total of items impacting operating income $
(8.1 ) $ (5.7 ) $
(22.2 ) $ (5.7 ) Items impacting
other expenses: Foreign exchange loss from the devaluation of
foreign currencies $ — $ — $ (0.7 ) $ (8.0 ) Acquisition financing
costs — (0.3 ) — (0.3 )
Total of items impacting
other expenses $ — $ (0.3
) $ (0.7 ) $ (8.3
) Total of items impacting pre-tax income $
(8.1 ) $ (6.0 ) $
(22.9 ) $ (14.0 ) Items
impacting income taxes: Tax impact of items impacting pre-tax
income above $ 3.1 $ 1.0 $ 8.6 $ 3.7 Primarily reversal of deferred
income tax valuation allowances — — — 6.9 Tax benefits related to
closing prior tax years — 1.9 — 1.9
Total of items impacting income taxes $ 3.1
$ 2.9 $ 8.6
$ 12.5 Net income impact of these items
$ (5.0 ) $ (3.1 )
$ (14.3 ) $ (1.5 )
Diluted EPS impact of these items $ (0.15
) $ (0.10 ) $ (0.43
) $ (0.05 ) GAAP to Non-GAAP
Net Income and EPS Reconciliation for continuing operations:
Net income from continuing operations – Non-GAAP $ 40.4 $ 48.5 $
105.7 $ 129.1 Items impacting net income from continuing operations
(5.0 ) (3.1 ) (14.3 ) (1.5 ) Net income from continuing operations
– GAAP $ 35.4 $ 45.4 $ 91.4 $ 127.6
Diluted EPS – Non-GAAP $ 1.21 $ 1.46 $ 3.16 $ 3.88 Diluted
EPS impact of these items (0.15 ) (0.10 ) (0.43 ) (0.05 ) Diluted
EPS – GAAP $ 1.06 $ 1.36 $ 2.73 $ 3.83
Items Impacting Comparability of Operating Income by
Segment Three Months Ended October 2, 2015 (in
millions) ECS W&C Corporate
Total Adjusted operating income - Non-GAAP $ 61.8 $
27.6 $ (3.1 ) $ 86.3 Adjusted operating margin - Non-GAAP 6.0 % 6.1
% nm 5.3 %
Total of items impacting
operating income for the three months ended October 2, 2015
$ — $ 1.0 $
(9.1 ) $ (8.1 ) Operating
income - GAAP $ 61.8 $ 28.6 $ (12.2 ) $ 78.2 Operating margin -
GAAP 6.0 % 6.3 % nm 5.3 %
Items Impacting
Comparability of Operating Income by Segment Nine Months
Ended October 2, 2015 ECS W&C
Corporate Total Adjusted operating income -
Non-GAAP $ 149.0 $ 83.8 $ (8.6 ) $ 224.2 Adjusted operating margin
- Non-GAAP 5.0 % 6.0 % nm 5.1 %
Total of items impacting operating income for the nine months
ended October 2, 2015 $ (8.7 ) $
(4.0 ) $ (9.5 ) $
(22.2 ) Operating income - GAAP $ 140.3 $ 79.8
$ (18.1 ) $ 202.0 Operating margin - GAAP 4.8 % 5.7 % nm 4.6 %
nm - not meaningful
Items Impacting
Comparability of Operating Income by Segment Three
Months Ended October 3, 2014 (in millions) ECS
W&C Corporate Total
Adjusted operating income - Non-GAAP $ 52.4 $ 38.7 $ (2.9 )
$ 88.2 Adjusted operating margin - Non-GAAP 5.8 % 7.2 % nm 6.1 %
Total of items impacting operating
income for the three months ended October 3, 2014 $
(5.7 ) $ — $ —
$ (5.7 ) Operating income - GAAP
$ 46.7 $ 38.7 $ (2.9 ) $ 82.5 Operating margin - GAAP 5.2 % 7.2 %
nm 5.7 %
Items Impacting Comparability of
Operating Income by Segment Nine Months Ended October 3,
2014 ECS W&C Corporate Total
Adjusted operating income - Non-GAAP $ 135.5 $ 108.7 $ (8.8
) $ 235.4 Adjusted operating margin - Non-GAAP 5.4 % 7.1 % nm 5.8 %
Total of items impacting operating
income for the nine months ended October 3, 2014 $
(5.7 ) $ — $ —
$ (5.7 ) Operating income - GAAP
$ 129.8 $ 108.7 $ (8.8 ) $ 229.7 Operating margin - GAAP 5.2 % 7.1
% nm 5.7 %
nm - not meaningful
ANIXTER INTERNATIONAL INC.
2015 and 2014 Effective Tax Rate – GAAP and Non-GAAP
Three Months Ended Nine Months Ended
October 2, October 3, October 2,
October 3, (in millions) 2015 2014
2015 2014
As Adjusted
As Adjusted Income from continuing operations before taxes –
GAAP $ 56.9 $ 70.2 $ 146.3 $ 186.7 Income tax expense – GAAP $ 21.5
$ 24.8 $ 54.9 $ 59.1 Effective income tax rate 37.8 % 35.4 % 37.5 %
31.7 %
Total of items impacting pre-tax income above
$ (8.1 ) $ (6.0 )
$ (22.9 ) $ (14.0 )
Total of items impacting income taxes above $
3.1 $ 2.9 $ 8.6
$ 12.5 Income from continuing
operations before income taxes – Non-GAAP $ 65.0 $ 76.2 $ 169.2 $
200.7 Income tax expense – Non-GAAP $ 24.6 $ 27.7 $ 63.5 $ 71.6
Adjusted effective income tax rate 37.8 % 36.4 %
37.5 % 35.7 %
2015 EBITDA by Segment
Three Months Ended October 2, 2015 (in
millions) ECS W&C
Corporate Total Net income from continuing
operations $ 61.8 $ 28.6 $ (55.0 ) $ 35.4 Interest expense — — 15.8
15.8 Income taxes — — 21.5 21.5 Depreciation 3.3 1.8 0.1 5.2
Amortization of intangible assets 3.7 1.3 —
5.0
EBITDA $ 68.8 $
31.7 $ (17.6 ) $
82.9 EBITDA leverage 13.8 %
nm nm nm EBITDA as a % of sales
6.6 % 7.0 % nm 5.6
% Foreign exchange and other non-operating expense $
— $ — $ 5.5 $ 5.5 Stock-based compensation 2.2 1.1 — 3.3
Acquisition and integration costs — (1.0 ) 9.1 8.1
Adjusted EBITDA $ 71.0 $
31.8 $ (3.0 ) $
99.8 Adjusted EBITDA leverage 9.6
% nm nm 2.4 % Adjusted EBITDA
as a % of sales 6.9 % 7.0 %
nm 6.7 % Nine Months Ended October
2, 2015 ECS W&C Corporate Total
Net income from continuing operations $ 140.3 $ 79.8 $ (128.7 ) $
91.4 Interest expense — — 42.7 42.7 Income taxes — — 54.9 54.9
Depreciation 10.4 5.0 0.2 15.6 Amortization of intangible assets
11.1 4.2 — 15.3
EBITDA $
161.8 $ 89.0 $
(30.9 ) $ 219.9 EBITDA
leverage 5.0 % nm nm nm
EBITDA as a % of sales 5.5 % 6.4
% nm 5.1 % Foreign exchange and
other non-operating expense $ — $ — $ 13.0 $ 13.0 Stock-based
compensation 6.6 3.5 0.1 10.2 Restructuring charge 3.0 2.2 0.1 5.3
Write-off of capitalized software 1.9 0.9 0.3 3.1 Venezuelan
customer bad debt expense 2.6 — — 2.6 Dilapidation provision 0.9
0.8 — 1.7 Acquisition and integration costs — — 9.1 9.1 Pension
divestiture costs 0.3 0.1 — 0.4
Adjusted EBITDA $ 177.1 $
96.5 $ (8.3 ) $
265.3 Adjusted EBITDA leverage 5.9
% nm nm 0.2 % Adjusted EBITDA
as a % of sales 6.0 % 6.9 %
nm 6.1 % nm - not meaningful
2014 EBITDA by Segment Three Months Ended October
3, 2014 (in millions) As Adjusted ECS
W&C Corporate Total
Net income from continuing operations $ 46.7 $ 38.7 $ (40.0 ) $
45.4 Interest expense — — 10.3 10.3 Income taxes — — 24.8 24.8
Depreciation 3.2 1.8 — 5.0 Amortization of intangible assets 0.7
1.4 — 2.1
EBITDA $
50.6 $ 41.9 $ (4.9
) $ 87.6 EBITDA as a % of sales
5.6 % 7.9 % nm 6.1
% Foreign exchange and other non-operating expense $
— $ — $ 2.0 $ 2.0 Stock-based compensation 2.0 1.3 — 3.3
Acquisition and strategic project costs 5.7 — —
5.7
Adjusted EBITDA $ 58.3
$ 43.2 $ (2.9 )
$ 98.6 Adjusted EBITDA as a % of sales
6.5 % 8.1 % nm 6.9
% Nine Months Ended October 3, 2014 As
Adjusted ECS W&C Corporate
Total Net income from continuing operations $ 129.8 $ 108.7
$ (110.9 ) $ 127.6 Interest expense — — 29.4 29.4 Income taxes — —
59.1 59.1 Depreciation 9.0 5.5 — 14.5 Amortization of intangible
assets 1.1 4.3 — 5.4
EBITDA
$ 139.9 $ 118.5 $
(22.4 ) $ 236.0 EBITDA as a %
of sales 5.6 % 7.7 % nm
5.8 % Foreign exchange and other non-operating
expense $ — $ — $ 13.6 $ 13.6 Stock-based compensation 5.7 3.6 —
9.3 Acquisition and strategic project costs 5.7 — —
5.7
Adjusted EBITDA $ 151.3
$ 122.1 $ (8.8 )
$ 264.6 Adjusted EBITDA as a % of sales
6.0 % 7.9 % nm 6.5
% nm - not meaningful
View source
version on businesswire.com: http://www.businesswire.com/news/home/20151027005543/en/
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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