8-K

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): July 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)

Registrant’s 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 July 23, 2012, the Registrant issued a press release announcing its financial results for the three- and six-month periods ended June 30, 2012. A copy of the Registrant’s 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 July 23, 2012, announcing financial results for the three- and six-month periods ended June 30, 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: July 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 July 23, 2012, announcing financial results for the three- and six-month periods ended June 30, 2012.
99.2*	Earnings Presentation, a slide presentation summarizing earnings and financial results.
*	— Included herewith.

EX-99.1

Exhibit 99.1

Executive Offices	For Further Information Contact:
One Parkway North Blvd. Suite 100 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

SECOND QUARTER 2012 EARNINGS

DEERFIELD, Ill., July 23, 2012 – United Stationers Inc. (NASDAQ: USTR) reported second quarter 2012 results.

Second Quarter Financial Summary

• Net sales were up 1.5% to $1.28 billion compared with $1.26 billion in the prior-year quarter.

• Diluted earnings per share were $0.66 versus $0.54 in the prior-year quarter. Current period earnings per share were up 12% versus adjusted earnings per share in the prior-year quarter of $0.59 ⁽¹⁾.

• Second quarter gross margin was $188.3 million, or 14.8% of sales, compared with $184.2 million, or 14.7% of sales, in the prior-year quarter.

• Operating expenses were $137.9 million, or 10.8% of sales, compared with $136.4 million, or 10.9% of sales in the prior-year quarter. Excluding a non-cash pre-tax equity compensation charge related to the former CEO’s retirement, second quarter 2011 adjusted operating expenses were $132.0 million⁽¹⁾ or 10.5%⁽¹⁾ of sales.

• Operating margin was $50.3 million, or 3.9% of sales, versus $47.8 million, or 3.8% of sales, in the prior-year quarter. Excluding the item noted above, adjusted operating margin in the prior-year quarter was $52.2 million⁽¹⁾ or 4.2%⁽¹⁾ of sales.

• Net income was $27.0 million compared with $24.8 million in the prior-year quarter. Excluding the non-cash item, adjusted net income in the prior-year quarter was $27.5 million⁽¹⁾.

• Net cash provided by operating activities for the six months ended June 30, 2012 totaled $48.3 million versus $73.3 million in the prior-year period.

• Cash paid for share repurchases totaled $54.3 million for approximately 1.8 million shares during the six months ended June 30, 2012.

“Our growth categories and channels continued to deliver strong performance and we are making progress on our efficiency initiatives,” said Cody Phipps, president and chief executive officer. “Our industrial and janitorial/breakroom areas showed solid growth and we are pleased with our progress in the e-retail and public sector channels. The office products environment is still challenging, but we continue to pursue opportunities here to drive specific category growth initiatives.”

Second Quarter Performance

Sales for the second quarter rose 1.5% to $1.28 billion. Strong growth was seen in the industrial supplies category with sales up 13.2% while janitorial/breakroom sales grew 5.8%. Furniture grew slightly by 0.3%. Partially offsetting these gains were declines in the office products and technology categories which were down 0.8% and 2.8%, respectively.

        Gross margin for the quarter was $188.3 million, or 14.8% of sales, compared with $184.2 million, or 14.7% of sales in the year-ago quarter. Gross margin benefitted from higher inventory purchase-related supplier allowances, “War on Waste” (WOW) savings in occupancy and net freight costs, as well as higher service revenue and margin. These items were partially offset by a lower-margin mix and continued competitive pricing pressures.

⁽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 Second Quarter 2012 Earnings

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Second quarter 2012 operating expenses were $137.9 million, or 10.8% of sales, compared with $136.4 million, or 10.9% of sales, in the second quarter of 2011. In the second quarter of 2011, a non-cash pre-tax $4.4 million equity compensation charge was taken with respect to a transition agreement with the company’s former chief executive officer. Excluding this item, second quarter 2011 operating expenses were $132.0 million⁽¹⁾, or 10.5%⁽¹⁾ of sales. Operating expenses in the second quarter of 2012 reflected increased employee-related costs including labor, pension, and healthcare costs.

Operating income for the quarter ended June 30, 2012 was $50.3 million, or 3.9% of sales, versus $47.8 million, or 3.8% of sales, in the second quarter of 2011. Excluding the item noted above, adjusted operating margin for the prior-year quarter was $52.2 million⁽¹⁾, or 4.2%⁽¹⁾ of sales.

Diluted earnings per share for the latest quarter were $0.66, compared with $0.54 in the prior-year period. Excluding the item noted above, adjusted earnings per share were up 11.9% compared with $0.59⁽¹⁾ in the prior-year quarter. Earnings per share in the 2012 quarter were favorably affected by a lower effective tax rate. The ongoing share repurchase program also benefited earnings per share by reducing average shares outstanding by nearly 5.5 million or 11.8%.

Six-Month Performance

Sales in the first half of 2012 were $2.55 billion, up 2.1% compared with the prior-year period. This was led by a 17.1% increase in industrial supplies and an 8.8% increase in janitorial/breakroom. Office products were up slightly by 0.5%, furniture sales were up 0.6% and technology sales declined 4.5%.

Gross margin for the first half of 2012 was $369.2 million, or 14.5% of sales, compared to $366.6 million or 14.7% of sales in the same prior-year period. The declining margin rate was due to a lower-margin mix and continued competitive pricing pressures. These items were partially offset by higher inventory purchase-related supplier allowances, higher inflation related inventory margin, and WOW savings particularly within occupancy costs.

Operating expenses in 2012 were $287.3 million, or 11.3% of sales, including a charge of $6.2 million for facility closures and severance costs, compared with $278.8 million, or 11.2% of sales, last year, which included a non-cash $4.4 million equity compensation charge as well as a $1.6 million non-deductible, asset impairment charge with respect to the company’s equity investment in a managed print services business. Excluding these items, operating expenses in 2012 were $281.0⁽¹⁾, or 11.0%⁽¹⁾ of sales, compared with the prior year of $272.8 million⁽¹⁾ or 10.9%⁽¹⁾ of sales. Operating expenses in the first half of 2012 reflected increased labor and pension costs.

Operating income for the first half of 2012 was $81.9 million or 3.2% of sales, compared with $87.8 million or 3.5% of sales in the prior year period. Excluding the items mentioned above, operating income through the first six months of 2012 was $88.2⁽¹⁾ million, or 3.5%⁽¹⁾ of sales, compared with $93.9 million⁽¹⁾ or 3.8%⁽¹⁾ of sales, in the same period last year.

Diluted earnings per share for the first half of 2012 were $1.01 versus $0.97 in the first half of 2011. Excluding the items mentioned above, diluted earnings per share for the first half of 2012 were up 3.7% to $1.11⁽¹⁾, compared with $1.07⁽¹⁾ in the prior-year period.

Cash Flow, Debt Trends and Share Repurchases

Net cash provided by operating activities for the six months ended June 30, 2012 was $48.3 million, compared with $73.3 million in the same period last year. This year-over-year decline resulted primarily from reduced payables leverage due to timing of payments and purchases in the prior year. Cash flow used in investing activities totaled $10.2 million in 2012, compared with $16.2 million in the same period last year. Capital spending is expected to be in the range of $30 million to $35 million for all of 2012.

The company currently has approximately $985 million of total committed debt capacity and $527 million outstanding at June 30, 2012. Debt-to-total capitalization rose to 43.3% at June 30, 2012 from 37.0% at June 30, 2011. During the latest six months, the company paid $54.3 million to acquire approximately 1.8 million shares and paid cash dividends of $10.8 million to common shareholders.

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Outlook

“The broader economic environment is not showing signs of improvement so it is even more important that we deliver on our growth and margin improvement initiatives, said Phipps. “We see attractive opportunities to grow our wholesale model in many categories and are making sure we invest to keep the momentum going in these areas. We are also working various initiatives to improve operating margin to ensure strong cash flows that we can reinvest in the business and return to shareholders,” concluded Phipps.

Conference Call

United Stationers will hold a conference call followed by a question and answer session on Tuesday, July 24^th, at 10:00 a.m. CDT, to discuss second 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: 32716914. To listen to the webcast, participants should visit the Investor Information section of the company’s 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 United’s website.

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United Stationers Reports Second Quarter 2012 Earnings

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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 management’s 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; United’s ability to effectively manage its operations and to implement growth, cost-reduction and margin-enhancement initiatives; United’s reliance on key customers, and the risks inherent in continuing or increased customer concentration; United’s reliance on key suppliers and the supplier allowances and promotional incentives they offer; United’s 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 United’s customers; the impact of a loss of, or substantial decrease in, the availability of products or service from key vendors at competitive prices; United’s 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 United’s customers; United’s ability to manage inventory in order to maximize sales and supplier allowances while minimizing excess and obsolete inventory; United’s success in effectively identifying, consummating and integrating acquisitions; the risks and expense associated with United’s obligations to maintain the security of private information provided by United’s customers; the costs and risks related to compliance with laws, regulations and industry standards affecting United’s business; the availability of financing sources to meet United’s business needs; United’s 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 United’s results, please see the company’s 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.

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 61 distribution centers allows it to deliver these products to over 25,000 reseller customers. This network, combined with United’s 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 Second Quarter 2012 Earnings

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United Stationers Inc. and Subsidiaries

Condensed Consolidated Statements of Income

(unaudited)

(in thousands, except per share data)

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2012		2011		2012		2011
Net sales	$	1,275,710	$	1,256,628	$	2,547,357	$	2,494,081
Cost of goods sold		1,087,451		1,072,389		2,178,169		2,127,470
Gross profit		188,259		184,239		369,188		366,611
Operating expenses:
Warehousing, marketing and administrative expenses		137,935		136,439		287,272		278,800
Operating income		50,324		47,800		81,916		87,811
Interest expense, net		7,070		6,601		14,236		13,122
Other expense		—		100		—		310
Income before income taxes		43,254		41,099		67,680		74,379
Income tax expense		16,225		16,263		25,539		29,096
Net income	$	27,029	$	24,836	$	42,141	$	45,283
Net income per common share – diluted	$	0.66	$	0.54	$	1.01	$	0.97
Weighted average number of common shares – diluted		40,887		46,340		41,626		46,470

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United Stationers Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(dollars in thousands, except share data)

	(unaudited) As of June 30,						(audited) As of Dec. 31, 2011
	2012			2011
ASSETS
Current assets:
Cash and cash equivalents	$	14,559		$	18,772		$	11,783
Accounts receivable, net		655,018			669,545			659,215
Inventories		692,939			632,080			741,507
Other current assets		30,857			33,208			48,093
Total current assets		1,393,373			1,353,605			1,460,598
Property, plant and equipment, net		124,583			128,596			129,438
Intangible assets, net		53,756			58,854			56,285
Goodwill		328,061			328,061			328,061
Other long-term assets		21,958			19,510			20,500
Total assets	$	1,921,731		$	1,888,626		$	1,994,882
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	446,644		$	443,480		$	499,265
Accrued liabilities		171,920			161,670			193,572
Short-term debt		50,000			6,800			—
Total current liabilities		668,564			611,950			692,837
Deferred income taxes		14,203			16,448			14,750
Long-term debt		477,140			435,000			496,757
Other long-term liabilities		72,613			72,480			85,859
Total liabilities		1,232,520			1,135,878			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		405,461			411,137			409,190
Treasury stock, at cost – 33,890,478 and 29,659,783 shares at June 30, 2012 and 2011, respectively and 32,281,847 shares at December 31, 2011		(957,029	)		(828,045	)		(908,667	)
Retained earnings		1,284,538			1,200,437			1,253,118
Accumulated other comprehensive loss		(51,203	)		(38,225	)		(56,406	)
Total stockholders’ equity		689,211			752,748			704,679
Total liabilities and stockholders’ equity	$	1,921,731		$	1,888,626		$	1,994,882

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United Stationers Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(unaudited)

(in thousands)

	For the Six Months Ended June 30,
	2012			2011
Cash Flows From Operating Activities:
Net income	$	42,141		$	45,283
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		17,338			17,458
Share-based compensation		3,165			10,414
Loss (gain) on the disposition of plant, property and equipment		49			(11	)
Impairment of equity investment		—			1,635
Amortization of capitalized financing costs		498			397
Excess tax benefits related to share-based compensation		(159	)		(2,591	)
Deferred income taxes		(3,474	)		(948	)
Changes in operating assets and liabilities
Decrease (increase) in accounts receivable, net		4,425			(41,097	)
Decrease in inventory		48,924			52,452
Decrease (increase) in other assets		15,455			(4,794	)
(Decrease) increase in accounts payable		(32,178	)		71,481
Decrease in checks in-transit		(20,324	)		(49,434	)
Decrease in accrued liabilities		(14,283	)		(20,677	)
Decrease in other liabilities		(13,244	)		(6,292	)
Net cash provided by operating activities		48,333			73,276
Cash Flows From Investing Activities:
Capital expenditures		(10,342	)		(16,223	)
Proceeds from the disposition of property, plant and equipment		103			60
Net cash used in investing activities		(10,239	)		(16,163	)
Cash Flows From Financing Activities:
Net borrowings under debt arrangements		30,384			—
Net (disbursements) proceeds from share-based compensation arrangements		(583	)		13,767
Acquisition of treasury stock, at cost		(54,311	)		(69,866	)
Payment of cash dividends		(10,848	)		(6,033	)
Excess tax benefits related to share-based compensation		159			2,591
Payment of debt issuance costs		(121	)		(111	)
Net cash used in financing activities		(35,320	)		(59,652	)
Effect of exchange rate changes on cash and cash equivalents		2			10
Net change in cash and cash equivalents		2,776			(2,529	)
Cash and cash equivalents, beginning of period		11,783			21,301
Cash and cash equivalents, end of period	$	14,559		$	18,772

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United Stationers Inc. and Subsidiaries

Reconciliation of Non-GAAP Financial Measures

Adjusted Operating Income, Net Income, and Diluted Earnings Per Share

(unaudited)

(in thousands, except per share data)

	For the Three Months Ended June 30,
	2012						2011
	Amount			% to Net Sales			Amount			% to Net Sales
Net sales	$	1,275,710			100.00	%	$	1,256,628			100.00	%
Gross profit	$	188,259			14.76	%	$	184,239			14.66	%
Operating expenses	$	137,935			10.82	%	$	136,439			10.86	%
Equity compensation – CEO transition		—			—			(4,409	)		(0.35	)
Adjusted operating expenses	$	137,935			10.82	%	$	132,030			10.51	%
Operating income	$	50,324			3.94	%	$	47,800			3.80	%
Operating expense item noted above		—			—			4,409			0.35	%
Adjusted operating income	$	50,324			3.94	%	$	52,209			4.15	%
Net income	$	27,029					$	24,836
Operating expense item noted above, net of tax		—						2,664
Adjusted net income	$	27,029					$	27,500
Diluted earnings per share	$	0.66					$	0.54
Per share operating expense item noted above		—						0.05
Adjusted diluted earnings per share	$	0.66					$	0.59
Adjusted diluted earnings per share — growth rate over the prior year period		12	%
Weighted average number of common shares — diluted		40,887						46,340

Note: Adjusted Operating Expenses, Operating Income, Net Income and Earnings Per Share in the second quarter of 2011 excludes the effects of an equity compensation charge related to a transition agreement with the former chief executive officer. 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.

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United Stationers Inc. and Subsidiaries

Reconciliation of Non-GAAP Financial Measures

Adjusted Operating Income, Net Income, and Diluted Earnings Per Share

(unaudited)

(in thousands, except per share data)

	For the Six Months Ended June 30,
	2012						2011
	Amount			% to Net Sales			Amount			% to Net Sales
Net sales	$	2,547,357			100.00	%	$	2,494,081			100.00	%
Gross profit	$	369,188			14.49	%	$	366,611			14.70	%
Operating expenses	$	287,272			11.28	%	$	278,800			11.18	%
Facility closures and severance charge		(6,247	)		(0.25	)		—			—
Equity compensation – CEO transition		—			—			(4,409	)		(0.17	)
Asset impairment charge		—			—			(1,635	)		(0.07	)
Adjusted operating expenses	$	281,025			11.03	%	$	272,756			10.94	%
Operating income	$	81,916			3.21	%	$	87,811			3.52	%
Operating expense item noted above		6,247			0.25			6,044			0.24
Adjusted operating income	$	88,163			3.46	%	$	93,855			3.76	%
Net income	$	42,141					$	45,283
Operating expense item noted above, net of tax		3,873						4,357
Adjusted net income	$	46,014					$	49,640
Diluted earnings per share	$	1.01					$	0.97
Per share operating expense item noted above		0.10						0.10
Adjusted diluted earnings per share	$	1.11					$	1.07
Adjusted diluted earnings per share — growth rate over the prior year period		4	%
Weighted average number of common shares — diluted		41,626						46,470

Note: Adjusted Operating Expenses, Operating Income, Net Income and Earnings Per Share for the six months ended June 30, 2012, exclude the effects of a $6.2 million charge related to facility closures and severance cost. In addition, the results for the six months ended June 30, 2011, were adjusted to exclude the effects of an equity compensation charge related to a transition agreement with the former chief executive officer and a non-deductible asset impairment charge. 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.

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EX-99.2

1

United Stationers Inc.

Earnings Presentation

Second Quarter 2012

July 23, 2012

Exhibit 99.2

2

Forward Looking Statements and

Non-GAAP Measures

July 23, 2012

This presentation 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 management’s 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;

United’s

ability

to

effectively

manage

its

operations

and

to

implement

growth,

cost-reduction and margin-enhancement initiatives; United’s reliance on key customers, and the risks inherent in continuing or increased customer

concentration; United’s reliance on key suppliers and the supplier allowances and promotional incentives they offer; United’s 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 United’s customers; the impact of a loss of, or substantial decrease in, the availability of products or service from key

vendors at competitive prices; United’s 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 United’s customers; United’s ability to manage inventory in order to maximize sales and supplier allowances

while minimizing excess and obsolete inventory; United’s success in effectively identifying, consummating and integrating acquisitions; the risks and

expense associated with United’s obligations to maintain the security of private information provided by United’s customers; the costs and risks related to

compliance with laws, regulations and industry standards affecting United’s business; the availability of financing sources to meet United’s business needs;

United’s

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

United’s

results,

please

see

the

company’s

Securities

and

Exchange

Commission

filings.

The

forward-looking

information

in

this

presentation

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

company’s

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.

3

Q2 2012 Headlines

Sales increased 1.5% from Q2 2011 to $1.3 billion.

Earnings per diluted share were $0.66, compared to an adjusted Q2 2011

EPS of $0.59*. 

Gross margin rate of 14.8% was up from 14.7% last year.

Operating expenses in Q2 2012 were $137.9 million, compared to an

adjusted $132.0 million* in the prior-year quarter, and were 10.8% of sales,

up from 10.5%* of sales in the prior-year quarter.

Operating income as a percent of sales was 3.9%, down from last year’s

adjusted 4.2%*.

Net income was $27.0 million, compared to an adjusted $27.5 million* in

Q2 2011.

During the quarter, the Company repurchased 0.7 million shares for $20.7

million and paid a cash dividend of $5.4 million to common shareholders.

July 23, 2012

4

Second Quarter 2012 P&L

% to sales change

$

% to Sales

$

% to Sales

$ change

% change

Fav (Unfav)

$ Millions (except EPS)

QTD Q2 2012

QTD Q2 2012

QTD Q2 2011

QTD Q2 2011

Fav (Unfav)

Fav (Unfav)

basis points

Net Sales

1,275.7

$     

1,256.6

$     

19.1

$      

1.5%

Gross Margin

188.2

14.76%

184.2

14.66%

4.0

2.2%

10

Operating Expense

137.9

10.82%

136.4

10.86%

(1.5)

(1.1%)

4

Operating Income

50.3

3.94%

47.8

3.80%

2.5

5.2%

14

Interest & Other

7.1

0.55%

6.7

0.53%

(0.4)

(5.5%)

(2)

Taxes

16.2

1.28%

16.3

1.30%

0.1

0.8%

2

Net Income

27.0

$         

2.11%

24.8

$         

1.98%

2.2

$        

8.8%

13

Diluted Shares (000s)

40,887

46,340

Diluted EPS

0.66

$         

0.54

$         

0.12

$      

22.2%

Adjusted to exclude non-operating items *

Adjusted Operating Expense

137.9

$       

10.82%

132.0

$       

10.51%

(5.9)

$       

(4.5%)

(31)

Adjusted Operating Income

50.3

3.94%

52.2

4.15%

(1.9)

(3.6%)

(21)

Adjusted Net Income

27.0

2.12%

27.5

2.19%

(0.5)

(1.8%)

(7)

Adjusted Diluted EPS

0.66

$         

0.59

$         

0.07

$      

11.9%

July 23, 2012

5

YTD 2012 Headlines

Sales increased 2.1% from YTD June 2011 to $2.5 billion.

Adjusted earnings per diluted share were $1.11*, compared to an adjusted

YTD June 2011 EPS of $1.07*. 

Gross margin rate of 14.5% was down from 14.7% last year.

Adjusted operating expenses YTD June 2012 were $281.0 million*,

compared to an adjusted $272.8 million* in the prior-year period, and were

11.0%* of sales, up from 10.9%* of sales in the prior-year period.

Adjusted operating income as a percent of sales was 3.5%*, down from last

year’s adjusted 3.8%*.

Adjusted net income was $46.0 million*, compared to an adjusted $49.6

million* in YTD June 2011.

Net cash provided by operating activities was $48.3 million YTD June

2012.

Debt was up $30.4 million from December 31, 2011 to $527.1 million.

During the year, the Company repurchased 1.8 million shares for $54.3

million and paid a cash dividend of $10.8 million to common shareholders.

July 23, 2012

6

YTD 2012 P&L

% to sales change

$ Millions (except EPS)

$

% to Sales

$

% to Sales

$ change

% change

Unfav

YTD Q2 2012

YTD Q2 2012

YTD Q2 2011

YTD Q2 2011

Fav (Unfav)

Fav (Unfav)

basis points

Net Sales

2,547.4

$     

2,494.1

$     

53.3

$      

2.1%

Gross Margin

369.2

14.49%

366.6

14.70%

2.6

0.7%

(21)

Operating Expense

287.3

11.28%

278.8

11.18%

(8.5)

(3.0%)

(10)

Operating Income

81.9

3.21%

87.8

3.52%

(5.9)

(6.7%)

(31)

Interest & Other

14.2

0.56%

13.4

0.54%

(0.8)

(6.0%)

(2)

Taxes

25.6

1.01%

29.1

1.17%

3.5

11.8%

16

Net Income

42.1

$         

1.65%

45.3

$         

1.82%

(3.2)

$       

(7.2%)

(17)

Diluted Shares (000s)

41,626

46,470

Diluted EPS

1.01

$         

0.97

$         

0.04

$      

4.1%

Adjusted to exclude non-operating items *

Adjusted Operating Expense

281.0

$       

11.03%

272.8

$       

10.94%

8.2

$        

3.0%

(9)

Adjusted Operating Income

88.2

3.46%

93.9

3.76%

(5.7)

(6.1%)

(30)

Adjusted Net Income

46.0

1.81%

49.6

2.00%

(3.6)

(7.2%)

(19)

Adjusted Diluted EPS

1.11

$         

1.07

$         

0.04

$      

3.7%

July 23, 2012

7

Sales

by Product Category –

Q2 2012

July 23, 2012

Technology

32%

Office Products

27%

Janitorial/

Breakroom

26%

Furniture

7%

Industrial

8%

Q2 2012

growth (decline)

Sales

Sales

Sales

Sales

Sales

growth (decline)

growth (decline)

growth (decline)

growth (decline)

Q2 2012

Q1 2012

Q4 2011

Q3 2011

Q2 2011

Category

vs Q2 2011

vs Q1 2011

vs Q4 2010

vs Q3 2010

vs Q2 2010

Technology

(2.8%)

(6.2%)

(4.9%)

(0.5%)

(6.2%)

Office Products

(0.8%)

1.8%

(1.0%)

(0.6%)

4.9%

Janitorial/

Breakroom

5.8%

12.0%

10.8%

10.6%

11.5%

Industrial

13.2%

21.3%

23.4%

23.7%

20.5%

Furniture

0.3%

0.8%

(11.3%)

(9.7%)

(3.8%)

8

Sales by Channel –

Q2 2012

Sales growth

Sales growth

Sales growth

Sales growth

Sales growth

(decline)

(decline)

(decline)

(decline)

(decline)

Q2 2012

Q1 2012

Q4 2011

Q3 2011

Q2 2011

Channel

vs Q2 2011

vs Q1 2011

vs Q4 2010

vs Q3 2010

vs Q2 2010

Independent

& Other

3.6%

6.0%

4.6%

5.7%

4.4%

Nationals

(12.2%)

(14.9%)

(17.5%)

(12.1%)

(5.6%)

Independent

& Other

88%

Nationals

12%

Q2 2012

July 23, 2012

9

Gross Margin

July 23, 2012

Q1 11

Q2 11

Q3 11

Q4 11

Q1 12

Q2 12

Dollars

$182.4

$184.2

$199.7

$173.7

$180.9

$188.3

Rate

14.7%

14.7%

15.3%

14.5%

14.2%

14.8%

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

dollars in millions

10

Adjusted Operating Expense*

dollars in millions

Q1 11 *

Q2 11 *

Q3 11

Q4 11 *

Q1 12 *

Q2 12

Dollars

$140.7

$132.0

$135.1

$128.6

$143.1

$137.9

Rate

11.4%

10.5%

10.3%

10.7%

11.3%

10.8%

7.5%

10.0%

12.5%

15.0%

$-

$25.0

$50.0

$75.0

$100.0

$125.0

$150.0

July 23, 2012

11

July 23, 2012

11

Adjusted Operating Income*

11

July 23, 2012

dollars in millions

Q1 11 *

Q2 11 *

Q3 11

Q4 11 *

Q1 12 *

Q2 12

Dollars

$41.6

$52.2

$64.6

$45.2

$37.8

$50.3

Rate

3.4%

4.2%

4.9%

3.8%

3.0%

3.9%

2.0%

3.0%

4.0%

5.0%

6.0%

$-

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0

$70.0

12

Adjusted Earnings per Share*

Adjusted Earnings per Share*

shares in millions

Q1 11 *

Q2 11 *

Q3 11

Q4 11 *

Q1 12 *

Q2 12

EPS

$0.47

$0.59

$0.81

$0.64

$0.45

$0.66

Diluted Shares

46.656

46.340

44.202

43.010

42.420

40.887

$-

$0.10

$0.20

$0.30

$0.40

$0.50

$0.60

$0.70

$0.80

$0.90

July 23, 2012

13

Working Capital Summary

July 23, 2012

$ Millions

3/31/2011

6/30/2011

9/30/2011

12/31/2011

3/31/2012

6/30/2012

Accounts Receivable

648.1

$       

669.5

$       

699.2

$       

659.2

$       

642.0

$       

655.0

$       

Inventories (LIFO)

636.2

632.1

615.5

741.5

672.3

692.9

Accounts Payable

422.4

443.5

410.8

499.3

433.7

446.6

Q1 11

Q2 11

Q3 11

Q4 11

Q1 12

Q2 12

Net Trade A/R DSO

41

41

42

42

40

40

Inventory Turns

6.4

6.8

7.1

6.1

6.2

6.4

A/P as % Inventory (LIFO)

66%

70%

67%

67%

65%

64%

A/P as % Inventory (FIFO)

58%

61%

58%

60%

56%

56%

14

Cash Flows

July 23, 2012

QTD

QTD

QTD

QTD

QTD

QTD

2012

$ Millions

Q1 11

Q2 11

Q3 11

Q4 11

2011

Q1 12

Q2 12

YTD

Net Income

20.4

$         

24.9

$         

35.8

$         

27.9

$         

109.0

$       

15.1

$         

27.0

$         

42.1

$         

Depreciation & Amortization

9.0

8.9

8.7

8.4

35.0

8.8

9.0

17.8

Share-based compensation

3.7

6.7

2.7

2.6

15.7

1.9

1.3

3.2

Writedown on impaired assets

1.6

-

-

-

1.6

-

-

-

Change in Accounts Receivable

(19.8)

(21.3)

(30.6)

40.0

(31.7)

17.6

(13.2)

4.4

Change in Inventory

48.2

4.3

15.2

(126.1)

(58.4)

70.0

(21.1)

48.9

Change in Accounts Payable

1.0

21.0

(33.1)

88.5

77.4

(65.3)

12.8

(52.5)

Change in Other Working Capital

(18.7)

(3.3)

21.7

(17.0)

(17.3)

(2.4)

5.4

3.0

Change in Working Capital

10.7

0.7

(26.8)

(14.6)

(30.0)

19.9

(16.1)

3.8

Other

(4.4)

(8.9)

5.8

6.6

(0.9)

(17.8)

(0.8)

(18.6)

Adjusted cash provided by operating

activities

41.0

32.3

26.2

30.9

130.4

27.9

20.4

48.3

Capital Expenditures

(9.8)

(6.4)

(4.6)

(7.2)

(28.0)

(4.5)

(5.8)

(10.3)

Proceeds from disposition of fixed assets

-

-

0.1

-

0.1

0.1

0.0

0.1

Net cash used for capital expenditures *

(9.8)

(6.4)

(4.5)

(7.2)

(27.9)

(4.4)

(5.8)

(10.2)

Free Cash Flow *

31.2

$         

25.9

$         

21.7

$         

23.7

$         

102.5

$       

23.5

$         

14.6

$         

38.1

$         

15

Debt and Capitalization

July 23, 2012

$ Millions

3/31/2011

6/30/2011

9/30/2011

12/31/2011

3/31/2012

6/30/2012

Debt

441.8

$    

441.8

$    

489.7

$    

496.8

$    

512.2

$    

527.1

$    

Equity

769.7

752.7

721.2

704.7

682.6

689.2

Total capitalization

1,211.5

$  

1,194.5

$  

1,210.9

$  

1,201.5

$  

1,194.8

$  

1,216.3

$  

Debt-to-total capitalization

36.5%

37.0%

40.4%

41.3%

42.9%

43.3%