UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): April 23, 2012
UNITED STATIONERS INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware | 0-10653 | 36-3141189 | ||
(State or Other Jurisdiction Of Incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
One Parkway North Boulevard | ||
Suite 100 Deerfield, Illinois |
60015-2559 | |
(Address of Principal Executive Offices) | (Zip Code) |
Registrants telephone number, including area code: (847) 627-7000
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
United Stationers Inc.
Item 2.02 | Results of Operations and Financial Condition. |
The following information, including Exhibit 99.1 and Exhibit 99.2, shall not be deemed filed hereunder for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
On April 23, 2012, the Registrant issued a press release announcing its financial results for the three-month period ended March 31, 2012. A copy of the Registrants press release is attached as Exhibit 99.1 hereto and is incorporated herein by reference. In addition, a slide presentation summarizing earnings and financial results is attached as Exhibit 99.2 hereto and is incorporated herein by reference.
Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
Exhibit No. |
Description | |||
99.1* | Press Release, dated April 23, 2012, announcing financial results for the three-month period ended March 31, 2012. | |||
99.2* | Earnings Presentation, a slide presentation summarizing earnings and financial results. | |||
* | Included herewith. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
UNITED STATIONERS INC. |
(Registrant) |
Dated: April 23, 2012 | /s/ Fareed A. Khan | |
Fareed A. Khan | ||
Senior Vice President and Chief Financial Officer |
EXHIBIT INDEX
(d) Exhibits
Exhibit No. |
Description | |
99.1* | Press Release, dated April 23, 2012, announcing financial results for the three-month period ended March 31, 2012. | |
99.2* | Earnings Presentation, a slide presentation summarizing earnings and financial results. | |
* | Included herewith. |
Exhibit 99.1
Executive Offices One Parkway North Blvd. Suite 100 |
For Further Information Contact: | |
Deerfield, IL 60015-2559 | Cody Phipps President and Chief Executive Officer or Fareed Khan Sr. Vice President and Chief Financial Officer United Stationers Inc. (847) 627-7000 |
UNITED STATIONERS REPORTS FIRST QUARTER 2012 EARNINGS
DEERFIELD, Ill., April 23, 2012 United Stationers Inc. (NASDAQ: USTR) reported first quarter 2012 results.
First Quarter Financial Summary
| Net sales were up 2.8% to $1.3 billion in the current year quarter. |
| Diluted earnings per share were $0.36 versus $0.44 in the prior-year quarter. Adjusted earnings per share in the first quarter of 2012 were $0.45(1), compared with $0.47(1) in the prior-year quarter. |
| Distribution network optimization and targeted cost reduction actions were taken in the quarter to improve operating effectiveness and efficiency. As a result, first quarter 2012 GAAP results included a pre-tax $6.2 million, or $0.09 per share, charge related to facility closures and severance costs. In addition, the prior-year quarter included a $0.03 per share non-deductible asset impairment charge related to an equity investment in a managed print services business. |
| First quarter gross margin was $180.9 million or 14.2% of sales, compared with $182.4 million or 14.7% of sales in the prior-year quarter. |
| Adjusted operating expenses were $143.1 million(1) or 11.3%(1) of sales, compared with $140.7 million(1) or 11.4%(1) of sales in the prior-year quarter. |
| Adjusted operating margin was $37.8 million(1) or 3.0%(1) of sales, versus $41.6 million(1) or 3.4%(1) of sales in the prior-year quarter. |
| Adjusted net income was $19.0 million(1), compared with $22.1 million(1) in the prior-year quarter. |
| Net cash provided by operating activities for the quarter totaled $27.9 million versus $41.0 million in the prior-year quarter. |
| 1.1 million shares were repurchased at a cost of $33.6 million. |
First quarter results reflected strong momentum in our growth businesses, said Cody Phipps, president and chief executive officer. We are pleased with our progress in optimizing our distribution operations and organization. These efforts reduce costs, utilize our assets more effectively and allow us to better serve customers in the near term, while positioning the company for long-term growth.
First Quarter Performance
Diluted earnings per share for the latest quarter were $0.36, compared with $0.44 in the prior-year period. Excluding the charges noted above, first quarter 2012 adjusted earnings per share were $0.45(1), compared with $0.47(1) in the prior-year period.
Sales for the first quarter of 2012 were $1.3 billion up 2.8% from the prior-year quarter. Strong growth was seen in the industrial supplies and janitorial/breakroom categories with sales up 21.3% and 11.9%, respectively. The office products category was up 2.0% and furniture growth was soft at 1.0%. These gains were partially offset by a 6.4% decline in the technology products category.
(1) | This is non-GAAP information. A reconciliation of these items to the most comparable GAAP measures is presented at the end of this news release. Except as noted, all references within this news release to financial results are presented in accordance with U.S. Generally Accepted Accounting Principles. |
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United Stationers Reports First Quarter 2012 Earnings
Page two of eight
Gross margin for the quarter was $180.9 million or 14.2% of sales, compared with $182.4 million or 14.7% of sales in the prior-year quarter. Gross margin declined due to a lower-margin mix, increased fuel costs and continued competitive pricing pressures in office products-related categories. Higher inflation during the first quarter of 2012 partially offset these negative margin affects.
First quarter 2012 operating expenses were $149.3 million, or 11.7% of sales. This includes a charge of $6.2 million for facility closures and severance costs. Excluding this item, first quarter 2012 adjusted operating expenses were $143.1 million(1) or 11.3%(1) of sales, compared with last years adjusted $140.7 million(1) or 11.4%(1) of sales. Adjusted operating expenses for 2011 exclude a $1.6 million asset impairment charge related to an equity investment in a managed print services business. Operating expenses reflected continued investments in the companys strategic growth initiatives offset by savings from War on Waste initiatives.
Operating income for the first quarter of 2012 was $31.6 million or 2.5% of sales, versus $40.0 million or 3.2% of sales, in the first quarter of 2011. Excluding the charges noted above, first quarter 2012 adjusted operating income was $37.8 million(1) or 3.0%(1) of sales, compared with $41.6 million(1) or 3.4%(1) of sales in the prior-year quarter.
Cash Flow, Debt Trends and Share Repurchases
Net cash provided by operating activities for the first three months of 2012 was $27.9 million. Operating cash flow benefited from lower working capital requirements. Cash flow used in investing activities totaled $4.4 million in the latest quarter, compared with $9.8 million in the same period last year. Capital spending for 2012 is expected to be in the $30-35 million range.
The company has approximately $935 million of total committed debt capacity at March 31, 2012 and has maintained debt-to-EBITDA leverage at the low end of targeted levels. Outstanding debt at March 31, 2012 and 2011 was $512.2 million and $441.8 million, respectively. Debt-to-total capitalization at March 31, 2012 was 42.9%, compared with 36.5% at March 31, 2011. During the first quarter of 2012, the company paid $33.6 million to repurchase 1.1 million shares and paid $5.4 million in cash dividends. The amount remaining under Board share repurchase authorizations at April 20, 2012 was approximately $75 million.
Our balance sheet, liquidity, and access to capital remains strong, said Phipps. We will maintain our capital deployment approach of prudent investments in growth and productivity, targeted acquisitions, and returning capital to shareholders through dividends and share repurchases.
Outlook
Our growth businesses will drive solid results given the momentum we have and the investments we are making, continued Phipps. Weak demand and margin pressure will continue to be factors in office products, which we are addressing with customer, network optimization, and efficiency initiatives. These actions reflect the commitment we have to our Winning from the Middle strategy and our confidence in the value-creating potential we have in our business.
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United Stationers Reports 2012 Earnings
Page three of eight
Conference Call
United Stationers will hold a conference call followed by a question and answer session on Tuesday, April 24, 2012, at 10:00 a.m. CT, to discuss first quarter 2012 results. To participate, callers within the U.S. and Canada should dial (888) 771-4371, and international callers should dial (847) 585-4405 approximately 10 minutes before the presentation. The passcode is 32115329. To listen to the webcast, participants should visit the Investor Information section of the companys website at ir.unitedstationers.com several minutes before the event is broadcast and follow the instructions provided to ensure that the necessary audio application is downloaded and installed. This program is provided at no charge to the user. In addition, interested parties can access an archived version of the call, also located on the Investor Information section of United Stationers website, about two hours after the call ends. This news release, along with a financial slide presentation and other information relating to the call, also will be available on Uniteds website.
Forward-Looking Statements
This news release contains forward-looking statements, including references to goals, plans, strategies, objectives, projected costs or savings, anticipated future performance, results or events and other statements that are not strictly historical in nature. These statements are based on managements current expectations, forecasts and assumptions. This means they involve a number of risks and uncertainties that could cause actual results to differ materially from those expressed or implied here. These risks and uncertainties include, but are not limited to the following: prevailing economic conditions and changes affecting the business products industry and the general economy; Uniteds ability to effectively manage its operations and to implement growth, cost-reduction and margin-enhancement initiatives; Uniteds reliance on key customers, and the risks inherent in continuing or increased customer concentration; Uniteds reliance on key suppliers and the supplier allowances and promotional incentives they offer; Uniteds reliance on independent resellers for a significant percentage of its net sales and, therefore, the importance of the continued independence, viability and success of these resellers; continuing or increasing competitive activity and pricing pressures within existing or expanded product categories, including competition from product manufacturers who sell directly to Uniteds customers; the impact of a loss of, or substantial decrease in, the availability of products or service from key vendors at competitive prices; Uniteds ability to maintain its existing information technology systems and the systems and eCommerce services that it provides to customers, and to successfully procure, develop and implement new systems and services without business disruption or other unanticipated difficulties or costs; the creditworthiness of Uniteds customers; Uniteds ability to manage inventory in order to maximize sales and supplier allowances while minimizing excess and obsolete inventory; Uniteds success in effectively identifying, consummating and integrating acquisitions; the risks and expense associated with Uniteds obligations to maintain the security of private information provided by Uniteds customers; the costs and risks related to compliance with laws, regulations and industry standards affecting Uniteds business; the availability of financing sources to meet Uniteds business needs; Uniteds reliance on key management personnel, both in day-to-day operations and in execution of new business initiatives; and the effects of hurricanes, acts of terrorism and other natural or man-made disruptions.
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United Stationers Reports 2012 Earnings
Page four of eight
Company Overview
United Stationers Inc. is a leading wholesale distributor of business products, with 2011 net sales of $5.0 billion. The company stocks a broad and deep line of approximately 100,000 items on a national basis, including technology products, traditional office products, janitorial and breakroom supplies, office furniture, and industrial supplies. A network currently comprised of 62 distribution centers allows it to deliver these products to over 25,000 reseller customers. This network, combined with Uniteds depth and breadth of inventory, enables the company to ship most products overnight to more than 90% of the U.S. and major cities in Mexico. For more information, visit www.unitedstationers.com.
United Stationers common stock trades on the NASDAQ Global Select Market under the symbol USTR.
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United Stationers Reports First Quarter 2012 Earnings
Page five of eight
United Stationers Inc. and Subsidiaries
Condensed Consolidated Statements of Income
(in thousands, except per share data)
For the Three Months Ended March 31, |
||||||||
2012 | 2011 | |||||||
Net sales |
$ | 1,271,647 | $ | 1,237,453 | ||||
Cost of goods sold |
1,090,718 | 1,055,081 | ||||||
|
|
|
|
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Gross profit |
180,929 | 182,372 | ||||||
Operating expenses: |
||||||||
Warehousing, marketing and administrative charges |
149,337 | 142,361 | ||||||
|
|
|
|
|||||
Operating income |
31,592 | 40,011 | ||||||
Interest expense, net |
7,166 | 6,521 | ||||||
Other expense, net |
| 210 | ||||||
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|
|
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Income before income taxes |
24,426 | 33,280 | ||||||
Income tax expense |
9,314 | 12,833 | ||||||
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|
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Net income |
$ | 15,112 | $ | 20,447 | ||||
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Net income per common share - diluted |
$ | 0.36 | $ | 0.44 | ||||
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Weighted average number of common shares - diluted |
42,420 | 46,656 | ||||||
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United Stationers Reports First Quarter 2012 Earnings
Page six of eight
United Stationers Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(dollars in thousands, except share data)
March 31, | As
of Dec. 31, 2011 |
|||||||||||
2012 | 2011 | |||||||||||
ASSETS |
||||||||||||
Current assets: |
||||||||||||
Cash and cash equivalents |
$ | 11,198 | $ | 39,521 | 11,783 | |||||||
Accounts receivable, net |
642,028 | 648,099 | 659,215 | |||||||||
Inventories |
672,274 | 636,250 | 741,507 | |||||||||
Other current assets |
31,109 | 30,869 | 48,093 | |||||||||
|
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|
|
|
|
|||||||
Total current assets |
1,356,609 | 1,354,739 | 1,460,598 | |||||||||
Property, plant and equipment, net |
126,931 | 130,878 | 129,438 | |||||||||
Intangible assets, net |
55,020 | 60,134 | 56,285 | |||||||||
Goodwill |
328,061 | 328,061 | 328,061 | |||||||||
Other long-term assets |
21,653 | 17,755 | 20,500 | |||||||||
|
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|
|
|
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Total assets |
$ | 1,888,274 | $ | 1,891,567 | 1,994,882 | |||||||
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LIABILITIES AND STOCKHOLDERS EQUITY |
||||||||||||
Current liabilities: |
||||||||||||
Accounts payable |
$ | 433,725 | $ | 422,449 | 499,265 | |||||||
Accrued liabilities |
173,059 | 161,151 | 193,572 | |||||||||
Short-term debt |
50,000 | 6,800 | | |||||||||
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|
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Total current liabilities |
656,784 | 590,400 | 692,837 | |||||||||
Deferred income taxes |
14,975 | 14,522 | 14,750 | |||||||||
Long-term debt |
462,150 | 435,000 | 496,757 | |||||||||
Other long-term liabilities |
71,750 | 81,901 | 85,859 | |||||||||
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Total liabilities |
1,205,659 | 1,121,823 | 1,290,203 | |||||||||
Stockholders equity: |
||||||||||||
Common stock, $0.10 par value; authorized - 100,000,000 shares, issued - 74,435,628 shares in 2012 and 2011 |
7,444 | 7,444 | 7,444 | |||||||||
Additional paid-in capital |
405,588 | 403,591 | 409,190 | |||||||||
Treasury stock, at cost 33,323,963 and 28,402,626 shares at March 31, 2012 and 2011, respectively and 32,281,847 shares at December 31, 2011 |
(940,564 | ) | (782,621 | ) | (908,667 | ) | ||||||
Retained earnings |
1,262,791 | 1,181,523 | 1,253,118 | |||||||||
Accumulated other comprehensive loss |
(52,644 | ) | (40,193 | ) | (56,406 | ) | ||||||
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Total stockholders equity |
682,615 | 769,744 | 704,679 | |||||||||
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Total liabilities and stockholders equity |
$ | 1,888,274 | $ | 1,891,567 | $ | 1,994,882 | ||||||
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United Stationers Reports First Quarter 2012 Earnings
Page seven of eight
United Stationers Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(in thousands)
For the Three Months Ended March 31, |
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2012 | 2011 | |||||||
Cash Flows From Operating Activities: |
||||||||
Net income |
$ | 15,112 | $ | 20,447 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
Depreciation and amortization |
8,607 | 8,840 | ||||||
Share-based compensation |
1,926 | 3,707 | ||||||
Gain on the disposition of plant, property and equipment |
(49 | ) | | |||||
Impairment of equity investment |
| 1,635 | ||||||
Amortization of capitalized financing costs |
241 | 194 | ||||||
Excess tax benefits related to share-based compensation |
(464 | ) | (2,095 | ) | ||||
Deferred income taxes |
(1,944 | ) | (1,329 | ) | ||||
Changes in operating assets and liabilities: |
||||||||
Decrease (increase) in accounts receivable, net |
17,640 | (19,772 | ) | |||||
Decrease in inventory |
69,959 | 48,178 | ||||||
Decrease (increase) in other assets |
15,681 | (680 | ) | |||||
(Decrease) increase in accounts payable |
(63,520 | ) | 49,660 | |||||
Decrease in checks in-transit |
(1,758 | ) | (48,672 | ) | ||||
Decrease in accrued liabilities |
(19,427 | ) | (19,530 | ) | ||||
(Decrease) increase in other liabilities |
(14,108 | ) | 458 | |||||
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Net cash provided by operating activities |
27,896 | 41,041 | ||||||
Cash Flows From Investing Activities: |
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Capital expenditures |
(4,479 | ) | (9,819 | ) | ||||
Proceeds from the disposition of property, plant and equipment |
84 | | ||||||
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Net cash used in investing activities |
(4,395 | ) | (9,819 | ) | ||||
Cash Flows From Financing Activities: |
||||||||
Net borrowings under debt arrangements |
15,393 | | ||||||
Net (disbursements) proceeds from share-based compensation arrangements |
(942 | ) | 9,615 | |||||
Acquisition of treasury stock, at cost |
(33,575 | ) | (24,611 | ) | ||||
Payment of cash dividends |
(5,436 | ) | | |||||
Excess tax benefits related to share-based compensation |
464 | 2,095 | ||||||
Payment of debt issuance costs |
| (111 | ) | |||||
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Net cash used in by financing activities |
(24,096 | ) | (13,012 | ) | ||||
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Effect of exchange rate changes on cash and cash equivalents |
10 | 10 | ||||||
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Net change in cash and cash equivalents |
(585 | ) | 18,220 | |||||
Cash and cash equivalents, beginning of period |
11,783 | 21,301 | ||||||
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Cash and cash equivalents, end of period |
$ | 11,198 | $ | 39,521 | ||||
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United Stationers Reports First Quarter 2012 Earnings
Page eight of eight
United Stationers Inc. and Subsidiaries
Reconciliation of Non-GAAP Financial Measures
Adjusted Operating Income, Net Income, and Diluted Earnings Per Share
(in thousands, except per share data)
For the Three Months Ended March 31, |
||||||||||||||||
2012 | 2011 | |||||||||||||||
Amount | % to Net Sales |
Amount | % to Net Sales |
|||||||||||||
Net sales |
$ | 1,271,647 | 100.00 | % | $ | 1,237,453 | 100.00 | % | ||||||||
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Gross profit |
$ | 180,929 | 14.23 | % | $ | 182,372 | 14.74 | % | ||||||||
Operating expenses |
$ | 149,337 | 11.74 | % | $ | 142,361 | 11.50 | % | ||||||||
Facility closures and severance charge |
(6,247 | ) | (0.49 | )% | | | ||||||||||
Asset impairment charge |
| | (1,635 | ) | (0.13 | )% | ||||||||||
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Adjusted operating expenses |
$ | 143,090 | 11.25 | % | $ | 140,726 | 11.37 | % | ||||||||
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|
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Operating income |
$ | 31,592 | 2.49 | % | $ | 40,011 | 3.24 | % | ||||||||
Operating expense items noted above |
6,247 | 0.49 | 1,635 | 0.13 | ||||||||||||
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Adjusted operating income |
$ | 37,839 | 2.98 | % | $ | 41,646 | 3.37 | % | ||||||||
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Net income |
$ | 15,112 | $ | 20,447 | ||||||||||||
Operating expense items noted above |
3,873 | 1,635 | ||||||||||||||
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Adjusted net income |
$ | 18,985 | $ | 22,082 | ||||||||||||
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Diluted earnings per share |
$ | 0.36 | $ | 0.44 | ||||||||||||
Per share operating expense items noted above |
0.09 | 0.03 | ||||||||||||||
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Adjusted diluted earnings per share |
$ | 0.45 | $ | 0.47 | ||||||||||||
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Weighted average number of common shares diluted |
42,420 | 46,656 |
Note: Adjusted Operating Expenses, Operating Income, Net Income and Earnings Per Share in the first quarter of 2012 exclude the effects of a $6.2 million charge related facility closures and severance cost. In the first quarter of 2011, Adjusted Operating Expenses, Operating Income, Net Income and Earnings Per Share exclude the effects of a non-deductible asset impairment charge of $1.6 million. Generally Accepted Accounting Principles require that the effects of this item be included in the Condensed Consolidated Statements of Income. Management believes that excluding this item is an appropriate comparison of its ongoing operating results to last year. It is helpful to provide readers of its financial statements with a reconciliation of these items to its Condensed Consolidated Statements of Income reported in accordance with Generally Accepted Accounting Principles.
-##-
April 23, 2012
1
United Stationers Inc.
Earnings Presentation
First Quarter 2012
TO BE FILED IN
CONJUNCTION WITH
PRESS RELEASE
Exhibit 99.2 |
April 23, 2012
2
Forward Looking Statements and
Non-GAAP Measures
This news release contains forward-looking statements, including references to goals, plans,
strategies, objectives, projected costs or savings, anticipated future performance, results or
events and other statements that are not strictly historical in nature. These statements are
based on managements current expectations, forecasts and assumptions. This means they
involve a number of risks and uncertainties that could cause actual results to differ
materially from those expressed or implied here. These risks and uncertainties include, but are not limited
to the following: prevailing economic conditions and changes affecting the business products industry
and the general economy; Uniteds ability to effectively manage its operations and to
implement growth, cost-reduction and margin-enhancement initiatives; Uniteds reliance on
key customers, and the risks inherent in continuing or increased customer concentration; Uniteds
reliance on key suppliers and the supplier allowances and promotional incentives they offer;
Uniteds reliance on independent resellers for a significant percentage of its net sales and,
therefore, the importance of the continued independence, viability and success of these resellers;
continuing or increasing competitive activity and pricing pressures within existing or expanded
product categories, including competition from product manufacturers who sell directly to
Uniteds customers; the impact of a loss of, or substantial decrease in, the availability of
products or service from key vendors at competitive prices; Uniteds ability to maintain
its existing information technology systems and the systems and eCommerce services that it provides to
customers, and to successfully procure, develop and implement new systems and services without
business disruption or other unanticipated difficulties or costs; the creditworthiness of
Uniteds customers; Uniteds ability to manage inventory in order to maximize sales and supplier
allowances while minimizing excess and obsolete inventory; Uniteds success in effectively
identifying, consummating and integrating acquisitions; the risks and expense associated with
Uniteds obligations to maintain the security of private information provided by Uniteds
customers; the costs and risks related to compliance with laws, regulations and industry standards
affecting Uniteds business; the availability of financing sources to meet Uniteds
business needs; Uniteds reliance on key management personnel, both in day-to-day operations and in
execution of new business initiatives; and the effects of hurricanes, acts of terrorism and other
natural or man-made disruptions. Shareholders, potential investors and other readers are urged to consider these risks and
uncertainties in evaluating forward-looking statements and are cautioned not to place undue
reliance on the forward-looking statements. For additional information about risks and
uncertainties that could materially affect Uniteds results, please see the companys
Securities and Exchange Commission filings. The forward-looking information in this
news release is made as of this date only, and the company does not undertake to update any forward-
looking statement. Investors are advised to consult any further disclosure by United regarding
the matters discussed in this release in its filings with the Securities and Exchange
Commission and in other written statements it makes from time to time. It is not possible to
anticipate or foresee all risks and uncertainties, and investors should not consider any list of risks
and uncertainties to be exhaustive or complete. *
This is non-GAAP information. A reconciliation of these items to the most comparable GAAP measures is presented on the companys
Website (www.unitedstationers.com) under the Investor Information section. Except as noted, all
references within this presentation to financial results are presented in accordance with U.S.
Generally Accepted Accounting Principles.
Certain prior-period amounts have been reclassified to conform to the current presentation. |
April 23, 2012
3
Q1 2012 Headlines
Sales increased 2.8% from Q1 2011 to $1.3 billion.
Adjusted earnings per diluted share were $0.45*, compared to an adjusted
Q1 2011 EPS of $0.47*.
Gross margin rate of 14.2% was down from 14.7% last year.
Adjusted operating expenses in Q1 2012 were $143.1 million*, compared
to an adjusted $140.7 million* in the prior-year quarter, and were 11.3%* of
sales, down from 11.4%* of sales in the prior-year quarter.
Adjusted operating income as a percent of sales was 3.0%*, down from last
years adjusted 3.4%*.
Adjusted net income was $19.0 million*, compared to an adjusted $22.1
million* in Q1 2011.
Net cash provided by operating activities was $27.9 million in Q1 2012.
Debt was up $15.4 million from December 31, 2011 to $512.2 million.
During the quarter, the Company repurchased 1.1 million shares for $33.6
million and paid a cash dividend of $5.4 million to common shareholders.
|
April 23, 2012
4
First Quarter 2012 P&L
% to sales change
$
% to Sales
$
% to Sales
$ change
% change
Unfav
$ Millions (except EPS)
QTD Q1 2012
QTD Q1 2012
QTD Q1 2011
QTD Q1 2011
Fav (Unfav)
Fav (Unfav)
basis points
Net Sales
1,271.6
$
1,237.5
$
34.1
$
2.8%
Gross Margin
180.9
14.23%
182.4
14.74%
(1.5)
(0.8%)
(51)
Operating Expense
149.3
11.74%
142.4
11.50%
(6.9)
(4.8%)
(24)
Operating Income
31.6
2.49%
40.0
3.24%
(8.4)
(21.0%)
(75)
Interest & Other
7.2
0.57%
6.8
0.55%
(0.4)
(5.9%)
(2)
Taxes
9.3
0.74%
12.8
1.04%
3.5
27.3%
30
Net Income
15.1
$
1.18%
20.4
$
1.65%
(5.3)
$
(26.0%)
(47)
Diluted Shares (000s)
42,420
46,656
Diluted EPS
0.36
$
0.44
$
(0.08)
$
(18.2%)
Adjusted to exclude non-operating items *
Adjusted Operating Expenses
143.1
$
11.25%
140.7
$
11.37%
2.4
$
1.7%
(12)
Adjusted Operating Income
37.8
2.98%
41.6
3.37%
(3.8)
(9.1%)
(39)
Adjusted Net Income
19.0
1.49%
22.1
1.79%
(3.1)
(14.0%)
(30)
Adjusted Diluted EPS
0.45
$
0.47
$
(0.02)
$
(4.3%) |
April 23, 2012
5
Sales
by Product Category
Q1 2012 |
April
23, 2012 6
Sales by Channel
Q1 2012
Sales growth
Sales growth
Sales growth
Sales growth
(decline)
(decline)
(decline)
(decline)
Sales growth
Q1 2012
Q4 2011
Q3 2011
Q2 2011
Q1 2011
Channel
vs Q1 2011
vs Q4 2010
vs Q3 2010
vs Q2 2010
vs Q1 2010
Independent
& Other
6.0%
4.6%
5.7%
4.4%
6.2%
Nationals
(14.9%)
(17.5%)
(12.1%)
(5.6%)
2.0%
Independent
& Other
87%
Nationals
13%
Q1 2012 |
April 23, 2012
7
Gross Margin
dollars in millions
Q1 11
Q2 11
Q3 11
Q4 11
Q1 12
Dollars
$182.4
$184.2
$199.7
$173.7
$180.9
Rate
14.7%
14.7%
15.3%
14.5%
14.2%
10.0%
12.5%
15.0%
17.5%
20.0%
$-
$25.0
$50.0
$75.0
$100.0
$125.0
$150.0
$175.0
$200.0 |
April 23, 2012
8
Adjusted Operating Expense*
dollars in millions
Q1 11 *
Q2 11 *
Q3 11
Q4 11 *
Q1 12 *
Dollars
$140.7
$132.0
$135.1
$128.6
$143.1
Rate
11.4%
10.5%
10.3%
10.7%
11.3%
7.5%
10.0%
12.5%
15.0%
$-
$25.0
$50.0
$75.0
$100.0
$125.0
$150.0 |
April 23, 2012
9
Adjusted Operating Income*
dollars in millions
Q1 11 *
Q2 11 *
Q3 11
Q4 11 *
Q1 12 *
Dollars
$41.6
$52.2
$64.6
$45.2
$37.8
Rate
3.4%
4.2%
4.9%
3.8%
3.0%
2.0%
3.0%
4.0%
5.0%
6.0%
$-
$10.0
$20.0
$30.0
$40.0
$50.0
$60.0
$70.0 |
April 23, 2012
10
Adjusted Earnings per Share*
shares in millions
Q1 11 *
Q2 11 *
Q3 11
Q4 11 *
Q1 12 *
EPS
$0.47
$0.59
$0.81
$0.64
$0.45
Diluted Shares
46.656
46.340
44.202
43.010
42.420
-
1.000
$-
$0.10
$0.20
$0.30
$0.40
$0.50
$0.60
$0.70
$0.80
$0.90 |
April 23, 2012
11
Working Capital Summary
$ Millions
3/31/2011
6/30/2011
9/30/2011
12/31/2011
3/31/2012
Accounts Receivable
648.1
$
669.5
$
699.2
$
659.2
$
642.0
$
Inventories (LIFO)
636.2
632.1
615.5
741.5
672.3
Accounts Payable
422.4
443.5
410.8
499.3
433.7
Q1 11
Q2 11
Q3 11
Q4 11
Q1 12
Net Trade A/R DSO
41
41
42
42
40
Inventory Turns
6.4
6.8
7.1
6.1
6.2
A/P as % Inventory (LIFO)
66%
70%
67%
67%
65%
A/P as % Inventory (FIFO)
58%
61%
58%
60%
56% |
April 23, 2012
12
Cash Flows
QTD
QTD
QTD
QTD
QTD
$ Millions
Q1 11
Q2 11
Q3 11
Q4 11
2011
Q1 12
Net Income
20.4
$
24.9
$
35.8
$
27.9
$
109.0
$
15.1
$
Depreciation & Amortization
9.0
8.9
8.7
8.4
35.0
8.8
Share-based compensation
3.7
6.7
2.7
2.6
15.7
1.9
Writedown on impaired assets
1.6
-
-
-
1.6
-
Change in Accounts Receivable
(19.8)
(21.3)
(30.6)
40.0
(31.7)
17.6
Change in Inventory
48.2
4.3
15.2
(126.1)
(58.4)
70.0
Change in Accounts Payable
1.0
21.0
(33.1)
88.5
77.4
(65.3)
Change in Other Working Capital
(18.7)
(3.3)
21.7
(17.0)
(17.3)
(2.4)
Change in Working Capital
10.7
0.7
(26.8)
(14.6)
(30.0)
19.9
Other
(4.4)
(8.9)
5.8
6.6
(0.9)
(17.8)
Adjusted cash provided by operating
activities
41.0
32.3
26.2
30.9
130.4
27.9
Capital Expenditures
(9.8)
(6.4)
(4.6)
(7.2)
(28.0)
(4.5)
Proceeds from disposition of fixed assets
-
-
0.1
-
0.1
0.1
Net cash used for capital expenditures *
(9.8)
(6.4)
(4.5)
(7.2)
(27.9)
(4.4)
Free Cash Flow *
31.2
$
25.9
$
21.7
$
23.7
$
102.5
$
23.5
$ |
April 23, 2012
13
Debt and Capitalization
$ Millions
3/31/2011
6/30/2011
9/30/2011
12/31/2011
3/31/2012
Debt
441.8
$
441.8
$
489.7
$
496.8
$
512.2
$
Equity
769.7
752.7
721.2
704.7
682.6
Total capitalization
1,211.5
$
1,194.5
$
1,210.9
$
1,201.4
$
1,194.8
$
Debt-to-total capitalization
36.5%
37.0%
40.4%
41.3%
42.9% |
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