Record 2nd quarter sales of $2.0 billion, up
32%, driven by Power Solutions acquisition
Second Quarter
Highlights
- Diluted EPS of $0.62 and adjusted
diluted EPS of $1.32
- Record second quarter NSS sales of
$1.0 billion
- Generated $149 million YTD in cash
from operations, further improving liquidity
Anixter International Inc. (NYSE: AXE) today reported quarterly
sales of $2.0 billion for the quarter ended July 1, 2016, a 32.1
percent increase compared to the year-ago quarter. Excluding the
impact of the following items, organic sales decreased 0.6 percent
year-over-year:
- $526.8 million favorable impact from
the acquisition of Power Solutions
- $22.2 million unfavorable impact from
the lower average price of copper
- $16.5 million unfavorable impact from
the fluctuation in foreign currencies
The current quarter had 64 billing days, compared to 63 billing
days in the year-ago quarter. Further excluding the favorable
impact from one additional billing day, organic sales per day
decreased 2.2 percent year-over-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 adjusted
amounts.
Net income of $20.8 million compares to $29.5 million in the
prior year quarter. Current quarter results include a UK pension
settlement, amortization of intangible assets, Latin America bad
debt provision, restructuring charge and acquisition and
integration costs. Excluding the above operating expense items,
which had a $33.7 million pre-tax and $23.4 million after-tax
impact, adjusted net income of $44.2 million compares to adjusted
net income of $41.6 million in the prior year quarter, an increase
of 6.3 percent. Diluted earnings per share of $0.62 compares to
$0.88 and adjusted diluted earnings per share of $1.32 compares to
$1.24, both versus prior year quarter.
Earnings Impact of Adjustments to Operating Income
Three
months ended (In millions, except per share amounts)
July 1,
2016 UK pension settlement $9.6 Amortization of intangible
assets 9.5 Latin America bad debt provision 7.6 Restructuring
charge 5.6 Acquisition and integration costs 1.4 Total pre-tax
impact $33.7 Total after-tax impact $23.4 Adjusted Diluted EPS
impact $0.70
Adjusted EBITDA of $101.8 million, or 5.2 percent of sales,
compares to $92.7 million, or 6.3 percent of sales, in the prior
year quarter, an increase of 9.8 percent.
On a year-over-year basis, currency fluctuations and lower
average copper prices negatively impacted earnings by $4.3 million
pre-tax and $2.5 million net of tax. Excluding the $0.07 negative
impact of currency and copper, our adjusted earnings per diluted
share would have been $1.39, a 12.1 percent increase from the prior
year quarter.
"Reflecting the underlying strength in our North America network
infrastructure business, we delivered our 11th consecutive quarter
of growth in our Network and Security Solutions segment," commented
Bob Eck, President and CEO. "We were pleased with the significant
improvement in our EES segment, exiting the quarter with strong
momentum as we integrate the low voltage portion of the Power
Solutions acquisition into the segment. Finally, the combined
effects of the weaker industrial economy and lower commodity prices
on a year-over-year basis continue to be headwinds for both the
industrial portion of our EES segment and our UPS segment. In light
of a persistent slow global growth environment, we will continue to
focus on margin improvement, ongoing expense discipline and working
capital efficiencies."
Income Statement Detail
Gross margin of 20.1 percent compares to 20.4 percent
sequentially, with the decline primarily caused by segment and
product mix. The decrease versus prior year gross margin of 22.2
percent is due primarily to the Power Solutions acquisition.
Operating expense of $336.7 million, or 17.2 percent of sales,
compares to prior year operating expense of $264.4 million, or 17.9
percent of sales, reflecting the impact of the Power Solutions
acquisition. The $5.6 million of restructuring costs included in
operating expense will deliver approximately $10 million of
annualized savings. Excluding the $33.7 million of expense outlined
above, adjusted operating expense of $303.0 million, or 15.5
percent of sales, compares to prior year adjusted operating expense
of $245.1 million, or 16.6 percent of sales.
Operating income of $56.7 million, or 2.9 percent of sales
compares to $64.5 million or 4.4 percent in the prior year quarter.
Excluding current quarter operating expense items outlined above,
adjusted operating income increased 8.0 percent to $90.4 million or
4.6 percent of sales compared to $83.8 million or 5.7 percent in
the prior year quarter.
Interest expense of $19.8 million compares to $12.7 million in
the prior year quarter, reflecting the issuance of incremental debt
to finance the Power Solutions acquisition. Foreign exchange and
other expense of $0.8 million compares to $3.5 million in the prior
year quarter.
Our second quarter effective tax rate was 42.4 percent. A large
portion of the 360 basis point increase from the prior year
effective tax rate of 38.8 percent was due to the change in the
country mix of earnings since many of the current year operating
expense charges of $33.7 million were incurred in countries with
low income tax rates or have valuation allowances recorded against
deferred tax assets. Our projected full year GAAP effective tax
rate is 40.1 percent and our adjusted effective full year rate for
non-GAAP operating results is 37.2 percent.
Segment Update
Network & Security Solutions ("NSS") sales of $1.0
billion increased by 3.3%. On an organic basis NSS sales increased
4.0 percent, adjusting for the $8.0 million unfavorable impact from
foreign exchange, driven by solid trends in North America, EMEA and
Asia Pacific.
Second quarter NSS security sales of $410.6 million, which
represents approximately 40 percent of total segment sales,
increased 3.7 percent from the prior year quarter. Adjusted for the
$2.9 million negative currency impact, organic security sales
growth was 4.5 percent.
NSS operating income of $64.9 million compares to $66.6 million
in the prior year quarter and $58.8 million in the first quarter of
2016. NSS adjusted EBITDA of $75.7 million compares to $76.2
million in the prior year quarter and $63.8 million in the first
quarter of 2016. The corresponding adjusted EBITDA margin of 7.2
percent compares to 7.5 percent in the prior year quarter and 6.7
percent in the first quarter of 2016.
Electrical & Electronic Solutions (“EES”) sales of
$555.1 million compares to $449.5 million in the prior year period,
an increase of 23.5 percent. EES organic sales decreased 1.9
percent, adjusting for the $6.7 million unfavorable impact from
foreign exchange, $21.8 million impact from lower average copper
prices and $145.1 million from the low voltage business of the
Power Solutions acquisition.
EES operating income of $23.9 million compares to $33.6 million
in the prior year quarter and $22.5 million in the first quarter of
2016. The majority of the decline in operating income versus prior
year was caused by lower copper pricing and weakness in the
industrial sector.
EES adjusted EBITDA of $32.3 million compares to $37.6 million
in the prior year period and $25.4 million in the first quarter of
2016. The corresponding adjusted EBITDA margin of 5.8 percent
compares to 8.3 percent in the prior year period and 5.0 percent in
the first quarter of 2016. Approximately two-thirds of the decline
in adjusted EBITDA margin versus prior year was caused by lower
copper pricing and weakness in the industrial sector, with the
balance due to the low voltage business of the Power Solutions
acquisition.
Utility Power Solutions (“UPS”) sales of $355.9 million
compares to $361.1 in the first quarter of 2016. As indicated in
the prior two quarters, sales in this segment continue to be
negatively impacted by lower sales in Canada due to weakness in oil
and gas regions along with the timing of utility customers' major
project spend.
UPS operating income of $12.0 million compares to $14.3 million
in the first quarter of 2016. UPS adjusted EBITDA was $19.3
million, or 5.4 percent of sales, which compares to $20.1 million,
or 5.6 percent of sales, in the first quarter of 2016.
Cash Flow and Leverage
Year-to-date we generated $149.4 million in cash flow from
operations which compares to $39.3 million in the prior year
period, driven primarily by working capital efficiencies.
Year-to-date we have invested $16.4 million in capital expenditures
which compares to $22.1 million in the prior year period. We expect
to invest approximately $40 - 45 million in capital investments,
lower than our original plans, to adjust for the current business
environment. We now expect to generate $180 - $200 million in cash
flow from operations for the full year.
"While our leading market positions and exposure to attractive
end markets resulted in solid growth in our NSS segment, our EES
and UPS segments face challenging headwinds. As a result, we
continue to have a strong focus on improving our margin, cost
structure and working capital efficiency," commented Ted Dosch,
Executive Vice President - Finance and CFO. "Reflecting our
relentless focus on working capital, we were pleased to achieve
working capital as a percent of sales of 19.2 percent for the
quarter compared to 21.4 percent at year end 2015. Turning to our
capital structure, our capital allocation priorities include
achieving our debt-to-capital target range of 45 - 50% by the
second half of 2017, funded by 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 improved to
54.8% from 58.2% at the end of 2015
- Weighted average cost of borrowed
capital of 4.7% was the same as the year-ago quarter
- $522.9 million available under
revolving lines of credit and secured accounts receivable and
inventory facilities
Business Outlook
"As we enter the second half of the year, our NSS segment
continues to experience positive momentum in all regions except
CALA, driven by strength in projects with global customers,"
commented Bob Eck. "While our EES segment continues to experience
weakness related to industrial and manufacturing end market
exposure, sales trends are improving in all regions except CALA.
Our UPS segment continues to experience soft trends related to its
exposure to oil and gas end markets in the US and Canada, combined
with the timing impact of major capital projects. Reflecting
diverging trends across our business and across the broad economy,
as well as the uncertainty created by Brexit, we remain cautious
regarding prospects for a recovery in the second half of 2016.
Combining our more positive outlook in NSS with an improving
outlook in our EES and UPS segments, we now expect full year 2016
sales growth between 20 to 24 percent. The acquisition will
increase sales by 24 percent, while currency and copper will each
have a negative impact of 1 percent. The net result is an organic
sales growth rate in the negative 2 percent to positive 2 percent
range."
Financial Results from Continuing
Operations
Three Months Ended Six Months Ended
Jul 1, Jul 3, Percent Jul
1, Jul 3, Percent (In millions,
except per share amounts)
2016 2015 Change
2016 2015 Change Net Sales $ 1,955.7 $ 1,480.4
32 % $ 3,771.9 $ 2,865.5 32 % Operating Income $ 56.7 $ 64.5 (12 )%
$ 117.0 $ 123.8 (6 )% Net Income $ 20.8 $ 29.5 (30 )% $ 44.0 $ 56.0
(21 )% Diluted Earnings Per Share $ 0.62 $ 0.88 (30 )% $ 1.32 $
1.68 (21 )% Diluted Weighted Shares 33.5 33.4 — % 33.4 33.4 — %
Second 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) 359-3627 International
dial-in: (719) 457-2727 Passcode: 504 5503
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 “Second 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) over
450,000 products and $1.2 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 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 (“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
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 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. We calculate the
year-over-year organic sales growth and operating expenses 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 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 discussed
below as non-GAAP financial measures to provide comparable period
over period comparisons.
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 entities and as a basis for
strategic planning and forecasting. Adjusted EBITDA may be useful
to an investor in evaluating our operating performance 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 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 Six Months Ended (In
millions, except per share amounts) July 1, 2016 July
3, 2015 July 1, 2016 July 3, 2015 Net
sales $ 1,955.7 $ 1,480.4 $
3,771.9 $ 2,865.5 Cost of goods sold 1,562.3
1,151.5 3,007.7 2,227.3
Gross
profit 393.4 328.9 764.2 638.2
Operating expenses 336.7 264.4 647.2 514.4
Operating income 56.7 64.5 117.0
123.8 Other expense: Interest expense (19.8 ) (12.7 ) (39.9
) (26.9 ) Other, net (0.8 ) (3.5 ) (3.6 ) (7.5 ) Income from
continuing operations before income taxes 36.1 48.3 73.5 89.4
Income tax expense from continuing operations 15.3 18.8
29.5 33.4
Net income from continuing
operations 20.8 29.5 44.0 56.0
(Loss) income from discontinued operations before income taxes (0.5
) 46.5 (1.2 ) 57.7 Income tax (benefit) expense from discontinued
operations (0.2 ) 4.6 (0.5 ) 23.2
Net (loss)
income from discontinued operations (0.3 )
41.9 (0.7 ) 34.5 Net
income $ 20.5 $ 71.4
$ 43.3 $ 90.5 Income
(loss) per share: Basic: Continuing operations $ 0.62 $
0.89 $ 1.32 $ 1.69 Discontinued operations (0.01 ) 1.26
(0.02 ) 1.04
Net Income $ 0.61 $ 2.15 $
1.30 $ 2.73
Diluted: Continuing operations $
0.62 $ 0.88 $ 1.32 $ 1.68 Discontinued operations (0.01 ) 1.26
(0.03 ) 1.03
Net Income $ 0.61 $ 2.14
$ 1.29 $ 2.71
Weighted-average
common shares outstanding: Basic 33.4 33.2 33.3 33.2 Diluted
33.5 33.4 33.4 33.4
Reportable Segments Net
sales: (As revised*) (As revised*) Network &
Security Solutions $ 1,044.7 $ 1,011.7 $ 1,993.8 $ 1,939.7
Electrical & Electronic Solutions 555.1 449.5 1,061.1 890.3
Utility Power Solutions 355.9 19.2 717.0 35.5
$ 1,955.7 $ 1,480.4 $ 3,771.9 $ 2,865.5
Operating income: Network & Security Solutions $
64.9 $ 66.6 $ 123.7 $ 122.3 Electrical & Electronic Solutions
23.9 33.6 46.4 69.4 Utility Power Solutions 12.0 2.4 26.3 4.4
Corporate (44.1 ) (38.1 ) (79.4 ) (72.3 ) $ 56.7 $ 64.5
$ 117.0 $ 123.8
* Revised due to
change in composition of our reportable segments.
ANIXTER INTERNATIONAL INC. Condensed Consolidated Balance
Sheets (Unaudited) July 1, 2016 January
1, 2016 (In millions) ASSETS Current
assets: Cash and cash equivalents $ 133.2 $ 151.3 Accounts
receivable, net 1,350.5 1,326.4 Inventories 1,186.5 1,182.6 Other
current assets 50.9 67.5 Total current assets 2,721.1
2,727.8 Property and equipment, net 140.6 131.8 Goodwill 767.0
756.5 Intangible assets, net 437.0 453.8 Other assets 72.9
72.1
Total assets $ 4,138.6
$ 4,142.0 LIABILITIES AND
STOCKHOLDERS' EQUITY Current liabilities: Accounts
payable $ 1,001.8 $ 905.6 Accrued expenses 217.2 250.6
Total current liabilities 1,219.0 1,156.2 5.50% Senior notes
due 2023 346.0 345.8 5.125% Senior notes due 2021 395.3 394.9
5.625% Senior notes due 2019 347.2 346.8 Canadian term loan 162.1
172.9 Revolving lines of credit 270.0 390.1 Other 2.2 2.6
Unamortized debt issuance costs (8.4 ) (10.2 ) Other liabilities
155.4 163.5
Total liabilities 2,888.8
2,962.6 Total stockholders' equity 1,249.8
1,179.4 Total liabilities and stockholders'
equity $ 4,138.6 $ 4,142.0
ANIXTER INTERNATIONAL INC. Condensed
Consolidated Statements of Cash Flows (Unaudited)
Six Months Ended July 1, 2016 July 3, 2015
(In millions) Operating activities: Net income
$ 43.3 $ 90.5 Adjustments to reconcile net income to net cash
provided by operating activities: Gain on sale of business, net of
tax expense of $10.0 in 2015 — (49.3 ) Depreciation 14.0 11.9
Amortization of intangible assets 19.2 10.7 Stock-based
compensation 8.4 7.4 Deferred income taxes 1.4 — Accretion of debt
discount 1.1 0.8 Amortization of deferred financing costs 1.0 0.7
Pension plan contributions (10.5 ) (12.1 ) Pension plan expenses
15.2 5.9 Excess income tax benefit from employee stock plans (0.2 )
(0.5 ) Changes in current assets and liabilities, net 62.4 (30.5 )
Other, net (5.9 ) 3.8
Net cash provided by operating
activities 149.4 39.3 Investing
activities: Capital expenditures, net (16.4 ) (22.1 ) Proceeds
from sale of business — 358.0 Other, net (4.7 ) 2.2
Net
cash (used in) provided by investing activities (21.1
) 338.1 Financing activities: Proceeds from
borrowings 376.7 508.8 Repayments of borrowings (496.7 ) (573.8 )
Repayments of Canadian term loan (23.1 ) — Retirement of Notes due
2015 — (200.0 ) Repayments of term loan — (2.5 ) Excess income tax
benefit from employee stock plans 0.2 0.5 Other, net (0.6 ) (1.0 )
Net cash used in financing activities (143.5 )
(268.0 ) (Decrease) increase in cash and cash
equivalents (15.2 ) 109.4 Effect of
exchange rate changes on cash balances (2.9 )
4.8 Cash and cash equivalents at beginning of period 151.3
92.0
Cash and cash equivalents at end of
period $ 133.2 $ 206.2
ANIXTER INTERNATIONAL
INC. Financial Measures That Supplement GAAP (Unaudited)
Second Quarter 2016 Sales Growth Trends
Q2 2016
Q2 2015 Foreign
Organic As Exchange
Copper As As Acquisition Pro
Growth/ (In millions) Reported Impact
Impact Adjusted Revised* Impact
Forma (Decline) Network & Security
Solutions North America $ 838.7 $ 3.2 $ — $ 841.9 $ 801.9 $ — $
801.9 5.0 % Europe 85.8 1.1 — 86.9 83.8 — 83.8 3.6 % Emerging
Markets 120.2 3.7 — 123.9 126.0
— 126.0 (1.8 )%
NSS $ 1,044.7
$ 8.0 $ — $
1,052.7 $ 1,011.7 $
— $ 1,011.7 4.0 %
Electrical & Electronic Solutions North America $
454.7 $ 2.5 $ 18.1 $ 475.3 $ 315.4 $ 145.1 $ 460.5 3.2 % Europe
59.2 2.9 1.5 63.6 63.6 — 63.6 (0.2 )% Emerging Markets 41.2
1.3 2.2 44.7 70.5 — 70.5
(36.6 )%
EES $ 555.1 $
6.7 $ 21.8 $ 583.6
$ 449.5 $ 145.1
$ 594.6 (1.9 )%
Utility Power Solutions North America $ 355.9 $ 1.8
$ 0.4 $ 358.1 $ 19.2 $ 381.7 $
400.9 (10.7 )%
UPS $ 355.9
$ 1.8 $ 0.4 $
358.1 $ 19.2 $
381.7 $ 400.9 (10.7
)%
Total $ 1,955.7 $ 16.5
$ 22.2 $ 1,994.4
$ 1,480.4 $ 526.8
$ 2,007.2 (0.6 )%
Geographic Sales North America $ 1,649.3 $ 7.5 $ 18.5 $
1,675.3 $ 1,136.5 $ 526.8 $ 1,663.3 0.7 % Europe 145.0 4.0 1.5
150.5 147.4 — 147.4 2.0 % Emerging Markets 161.4 5.0
2.2 168.6 196.5 — 196.5 (14.3 )%
Total $ 1,955.7 $ 16.5
$ 22.2 $ 1,994.4
$ 1,480.4 $ 526.8
$ 2,007.2 (0.6 )% June
Year-to-Date 2016 Sales Growth Trends
YTD 2016
YTD 2015 Foreign
Organic As Exchange
Copper As As Acquisition Pro
Growth/ (In millions) Reported Impact
Impact Adjusted Revised* Impact
Forma (Decline) Network & Security
Solutions North America $ 1,586.7 $ 11.0 $ — $ 1,597.7 $
1,528.5 $ — $ 1,528.5 4.5 % Europe 167.2 3.5 — 170.7 168.0 — 168.0
1.6 % Emerging Markets 239.9 10.0 — 249.9
243.2 — 243.2 2.7 %
NSS $
1,993.8 $ 24.5 $ —
$ 2,018.3 $ 1,939.7
$ — $ 1,939.7
4.1 % Electrical & Electronic
Solutions North America $ 859.5 $ 7.9 $ 35.3 $ 902.7 $ 627.5 $
281.3 $ 908.8 (0.7 )% Europe 116.9 5.9 2.7 125.5 134.4 — 134.4 (6.7
)% Emerging Markets 84.7 2.9 3.8 91.4
128.4 — 128.4 (28.9 )%
EES $
1,061.1 $ 16.7 $
41.8 $ 1,119.6 $
890.3 $ 281.3 $
1,171.6 (4.4 )% Utility Power
Solutions North America $ 717.0 $ 7.0 $ 0.8
$ 724.8 $ 35.5 $ 728.1 $ 763.6
(5.1 )%
UPS $ 717.0 $ 7.0
$ 0.8 $ 724.8
$ 35.5 $ 728.1 $
763.6 (5.1 )%
Total $ 3,771.9
$ 48.2 $ 42.6
$ 3,862.7 $ 2,865.5
$ 1,009.4 $ 3,874.9
(0.3 )% Geographic Sales North America
$ 3,163.2 $ 25.9 $ 36.1 $ 3,225.2 $ 2,191.5 $ 1,009.4 $ 3,200.9 0.8
% Europe 284.1 9.4 2.7 296.2 302.4 — 302.4 (2.1 )% Emerging Markets
324.6 12.9 3.8 341.3 371.6 —
371.6 (8.2 )%
Total $ 3,771.9
$ 48.2 $ 42.6
$ 3,862.7 $ 2,865.5
$ 1,009.4 $ 3,874.9
(0.3 )%
* Revised due to change in composition
of our reportable segments.
ANIXTER INTERNATIONAL INC.
Financial Measures That Supplement GAAP (Unaudited) -
continued (In
millions, except per share amounts) Positive
(Negative) impact Three Months Ended Six
Months Ended July 1, 2016 July 3, 2015
July 1, 2016 July 3, 2015 (As
revised*) (As revised*) Continuing
operations Items impacting comparability of results:
Items impacting operating income: Amortization of intangible assets
$ (9.5 ) $ (5.2 ) $ (19.2 ) $ (10.3 ) UK pension settlement (9.6 )
(0.4 ) (9.6 ) (0.4 ) Restructuring charge (5.6 ) (5.3 ) (5.6 ) (5.3
) Acquisition and integration costs (1.4 ) (1.0 ) (3.6 ) (1.0 )
Write-off of capitalized software — (3.1 ) — (3.1 ) Latin America
bad debt provision (7.6 ) (2.6 ) (7.6 ) (2.6 ) Dilapidation
provision — (1.7 ) — (1.7 )
Total of items
impacting operating income $ (33.7 )
$ (19.3 ) $ (45.6 )
$ (24.4 ) Items impacting other expenses:
Foreign exchange loss from the devaluation of foreign currencies —
— — (0.7 )
Total of items impacting other
expenses $ — $ —
$ — $ (0.7 )
Total of items impacting pre-tax
income
$ (33.7 ) $ (19.3 )
$ (45.6 ) $ (25.1 ) Items
impacting income taxes: Tax impact of items impacting pre-tax
income above $ 10.3 $ 7.2 $ 14.8 $ 9.3
Total of items impacting income taxes $ 10.3
$ 7.2 $ 14.8
$ 9.3 Net income impact of these items
$ (23.4 ) $ (12.1 )
$ (30.8 ) $ (15.8 )
Diluted EPS impact of these items $ (0.70
) $ (0.36 ) $ (0.92
) $ (0.47 ) GAAP to Non-GAAP
Net Income and EPS Reconciliation for continuing operations:
Net income from continuing operations – GAAP $ 20.8 $ 29.5 $ 44.0 $
56.0 Items impacting net income from continuing operations 23.4
12.1 30.8 15.8 Net income from
continuing operations – Non-GAAP $ 44.2 $ 41.6 $ 74.8
$ 71.8 Diluted EPS – GAAP $ 0.62 $ 0.88 $ 1.32
$ 1.68 Diluted EPS impact of these items 0.70 0.36
0.92 0.47 Diluted EPS – Non-GAAP $ 1.32 $ 1.24
$ 2.24 $ 2.15
* Revised due to
change in composition of items impacting comparability of results
to include amortization of intangible assets.
Items Impacting Comparability of Operating Income by
Segment Three Months Ended July 1, 2016 (In
millions) NSS EES UPS
Corporate Total Operating income - GAAP
$ 64.9 $ 23.9 $ 12.0 $ (44.1 ) $ 56.7 Operating margin - GAAP 6.2 %
4.3 % 3.4 % nm 2.9 %
Total of
items impacting operating income $ 9.4
$ 7.1 $ 6.1 $
11.1 $ 33.7 Adjusted
operating income - Non-GAAP $ 74.3 $ 31.0 $ 18.1 $ (33.0 ) $ 90.4
Adjusted operating margin - Non-GAAP 7.1 % 5.6 % 5.1 % nm 4.6 %
Items Impacting Comparability of Operating Income
by Segment Six Months Ended July 1, 2016 NSS
EES UPS Corporate Total
Operating income - GAAP $ 123.7 $ 46.4 $ 26.3 $ (79.4 ) $ 117.0
Operating margin - GAAP 6.2 % 4.4 % 3.7 % nm 3.1 %
Total of items impacting operating
income $ 13.0 $ 9.3
$ 10.3 $ 13.0 $
45.6 Adjusted operating income - Non-GAAP $
136.7 $ 55.7 $ 36.6 $ (66.4 ) $ 162.6 Adjusted operating margin -
Non-GAAP 6.9 % 5.2 % 5.1 % nm 4.3 %
nm - not meaningful
Items Impacting Comparability of
Operating Income by Segment Three Months Ended July
3, 2015 (As revised*) (In millions) NSS
EES UPS Corporate
Total Operating income - GAAP $ 66.6 $ 33.6 $ 2.4 $
(38.1 ) $ 64.5 Operating margin - GAAP 6.6 % 7.5 % 12.5 % nm 4.4 %
Total of items impacting
operating income $ 8.1 $ 3.3
$ — $ 7.9 $
19.3 Adjusted operating income - Non-GAAP $
74.7 $ 36.9 $ 2.4 $ (30.2 ) $ 83.8 Adjusted operating margin -
Non-GAAP 7.4 % 8.2 % 12.5 % nm 5.7 %
Items
Impacting Comparability of Operating Income by Segment Six
Months Ended July 3, 2015 (As revised*) NSS EES
UPS Corporate Total Operating income -
GAAP $ 122.3 $ 69.4 $ 4.4 $ (72.3 ) $ 123.8 Operating margin - GAAP
6.3 % 7.8 % 12.5 % nm 4.3 %
Total of items impacting operating income $
11.8 $ 4.7 $ —
$ 7.9 $ 24.4
Adjusted operating income - Non-GAAP $ 134.1 $ 74.1 $ 4.4 $
(64.4 ) $ 148.2 Adjusted operating margin - Non-GAAP 6.9 % 8.3 %
12.5 % nm 5.2 %
nm - not meaningful * Revised due
to change in composition of our reportable segments.
ANIXTER
INTERNATIONAL INC.
2016 and 2015
Effective Tax Rate – GAAP and Non-GAAP Three Months
Ended Six Months Ended July 1, 2016 July 3,
2015 July 1, 2016 July 3, 2015 (In
millions) (As revised*) (As
revised*) Income from continuing operations before taxes – GAAP
$ 36.1 $ 48.3 $ 73.5 $ 89.4 Income tax expense – GAAP $ 15.3 $ 18.8
$ 29.5 $ 33.4 Effective income tax rate 42.4 % 38.8 % 40.1 % 37.3 %
Total of items impacting pre-tax income above
$ 33.7 $ 19.3 $
45.6 $ 25.1 Total of items
impacting income taxes above $ 10.3
$ 7.2 $ 14.8 $
9.3 Income from continuing operations before
income taxes – Non-GAAP $ 69.8 $ 67.6 $ 119.1 $ 114.5 Income tax
expense – Non-GAAP $ 25.6 $ 26.0 $ 44.3 $ 42.7 Adjusted effective
income tax rate 37.2 % 37.3 % 37.2 % 37.3 %
* 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 July 1,
2016 (In millions) NSS EES
UPS Corporate Total Net income
from continuing operations $ 64.9 $ 23.9 $ 12.0 $ (80.0 ) $ 20.8
Interest expense — — — 19.8 19.8 Income taxes — — — 15.3 15.3
Depreciation 0.8 1.0 0.7 4.5 7.0 Amortization of intangible assets
3.6 2.0 3.9 — 9.5
EBITDA
$ 69.3 $ 26.9 $
16.6 $ (40.4 ) $
72.4 EBITDA leverage -0.8x -1.0x
0.3x nm nm EBITDA as a % of sales
6.6 % 4.8 % 4.7 %
nm 3.7 % Foreign exchange and other
non-operating expense $ — $ — $ — $ 0.8 $ 0.8 Stock-based
compensation 0.6 0.3 0.5 3.0 4.4 UK pension settlement — — — 9.6
9.6 Restructuring charge 1.9 1.4 2.2 0.1 5.6 Latin America bad debt
provision 3.9 3.7 — — 7.6 Acquisition and integration costs —
— — 1.4 1.4
Adjusted
EBITDA $ 75.7 $ 32.3
$ 19.3 $ (25.5
) $ 101.8 Adjusted EBITDA
leverage -0.2x -0.6x 0.4x nm
0.3x Adjusted EBITDA as a % of sales 7.2
% 5.8 % 5.4 % nm
5.2 % Six Months Ended July 1, 2016
NSS EES UPS Corporate Total Net
income from continuing operations $ 123.7 $ 46.4 $ 26.3 $ (152.4 )
$ 44.0 Interest expense — — — 39.9 39.9 Income taxes — — — 29.5
29.5 Depreciation 1.7 1.5 2.1 8.7 14.0 Amortization of intangible
assets 7.2 4.2 7.8 — 19.2
EBITDA $ 132.6 $ 52.1
$ 36.2 $ (74.3 )
$ 146.6 EBITDA leverage 0.3x
-1.5x 0.4x nm 0.2x EBITDA as a % of
sales 6.7 % 4.9 % 5.0
% nm 3.9 % Foreign exchange and
other non-operating expense $ — $ — $ — $ 3.6 $ 3.6 Stock-based
compensation 1.1 0.5 0.7 6.2 8.5 UK pension settlement — — — 9.6
9.6 Restructuring charge 1.9 1.4 2.2 0.1 5.6 Latin America bad debt
provision 3.9 3.7 — — 7.6 Acquisition and integration costs —
— 0.3 3.3 3.6
Adjusted
EBITDA $ 139.5 $ 57.7
$ 39.4 $ (51.5 ) $
185.1 Adjusted EBITDA leverage 0.7x
-1.2x 0.4x nm 0.4x Adjusted EBITDA
as a % of sales 7.0 % 5.4 %
5.5 % nm 4.9 % nm -
not meaningful
2015 EBITDA by Segment
Three Months Ended July 3, 2015 (As revised*) (In
millions) NSS EES UPS
Corporate Total Net income from continuing
operations $ 66.6 $ 33.6 $ 2.4 $ (73.1 ) $ 29.5 Interest expense —
— — 12.7 12.7 Income taxes — — — 18.8 18.8 Depreciation 0.9 0.3 —
4.1 5.3 Amortization of intangible assets 3.7 1.5 —
— 5.2
EBITDA $ 71.2
$ 35.4 $ 2.4
$ (37.5 ) $ 71.5
EBITDA leverage .5x nm -.5x nm
-1.2x EBITDA as a % of sales 7.0 %
7.9 % 12.8 % nm 4.8
% Foreign exchange and other non-operating expense $
— $ — $ — $ 3.5 $ 3.5 Stock-based compensation 0.6 0.4 — 2.6 3.6 UK
pension settlement — — — 0.4 0.4 Restructuring charge 1.8 1.8 — 1.7
5.3 Acquisition and integration costs — — — 1.0 1.0 Write-off of
capitalized software — — — 3.1 3.1 Latin America bad debt provision
2.6 — — — 2.6 Dilapidation provision — — — 1.7
1.7
Adjusted EBITDA $ 76.2
$ 37.6 $ 2.4
$ (23.5 ) $ 92.7
Adjusted EBITDA leverage .9x nm -.5x
nm .7x Adjusted EBITDA as a % of sales
7.5 % 8.3 % 12.8 %
nm 6.3 % Six Months Ended July 3,
2015 (As revised*) NSS EES UPS
Corporate Total Net income from continuing operations
$ 122.3 $ 69.4 $ 4.4 $ (140.1 ) $ 56.0 Interest expense — — — 26.9
26.9 Income taxes — — — 33.4 33.4 Depreciation 1.8 0.5 — 8.1 10.4
Amortization of intangible assets 7.4 2.9 — —
10.3
EBITDA $ 131.5
$ 72.8 $ 4.4 $
(71.7 ) $ 137.0 EBITDA
leverage .4x nm -6.2x nm
-.8x EBITDA as a % of sales 6.8 %
8.2 % 12.5 % nm 4.8
% Foreign exchange and other non-operating expense $
— $ — $ — $ 7.5 $ 7.5 Stock-based compensation 1.0 0.7 — 5.2 6.9 UK
pension settlement — — — 0.4 0.4 Restructuring charge 1.8 1.8 — 1.7
5.3 Acquisition and integration costs — — — 1.0 1.0 Write-off of
capitalized software — — — 3.1 3.1 Latin America bad debt provision
2.6 — — — 2.6 Dilapidation provision — — — 1.7
1.7
Adjusted EBITDA $ 136.9
$ 75.3 $ 4.4
$ (51.1 ) $ 165.5
Adjusted EBITDA leverage .6x nm -6.2x
nm 0x Adjusted EBITDA as a % of sales
7.1 % 8.4 % 12.5 %
nm 5.8 % nm - not meaningful
* Revised due to change in composition of our reportable
segments.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160726005401/en/
INVESTOR CONTACTSAnixter International Inc.Ted
DoschEVP - Finance & Chief Financial Officer(224)
521-4281orLisa Micou Meers, CFAVP - Investor
Relations(224) 521-8895
Anixter (NYSE:AXE)
Historical Stock Chart
From Sep 2024 to Oct 2024
Anixter (NYSE:AXE)
Historical Stock Chart
From Oct 2023 to Oct 2024