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: April 23, 2014

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)	(IRS Employer Identification No.)

One Parkway North Blvd. 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 April 23, 2014, United Stationers Inc. (the “Registrant”) issued a press release announcing its financial results for the three-month period ended March 31, 2014. 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 April 23, 2014, announcing financial results for the three-month period ended March 31, 2014.
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, 2014	/s/ Todd A. Shelton
	Todd A. Shelton
	Senior Vice President and Chief Financial Officer

-2-

EXHIBIT INDEX

(d) Exhibits

Exhibit No.	Description
99.1*	Press Release, dated April 23, 2014, announcing financial results for the three-month period ended March 31, 2014.
99.2*	Earnings Presentation, a slide presentation summarizing earnings and financial results.

* — Included herewith.

-3-

EX-99.1

Exhibit 99.1

Executive Offices One Parkway North Blvd. Suite 100 Deerfield, IL 60015-2559 For Further Information Contact: Cody Phipps President and Chief Executive Officer             or Todd Shelton Senior Vice President and Chief Financial Officer 847-627-7000

United Stationers Posts First Quarter 2014 EPS of $0.55

Deerfield, Ill. — April 23, 2014 – United Stationers (NASDAQ: USTR) today announced that net income for the quarter ended March 31, 2014, was $21.9 million, or $0.55 per share, compared with $13.9 million, or $0.34 per share, in 2013. The 2013 results included a charge of $0.22 per share related to workforce reductions and facility closures. Adjusted to exclude the charge, 2013 net income was $22.8 million⁽¹⁾, or $0.56⁽¹⁾ per share.

Financial Highlights

• Sales were $1.254 billion compared with $1.250 billion in 2013

• Operating income was $38.2 million, or 3.0 percent of sales, versus $25.2 million, or 2.0 percent of sales last year; adjusted 2013 operating income was $39.7 million⁽¹⁾, or 3.2 percent of sales

• Earnings per share were $0.55, down slightly from $0.56⁽¹⁾ in 2013 on an adjusted basis

• Cash flow from operating activities was $1.5 million versus a use of $13.4 million in 2013

First Quarter Performance

Sales were $1.254 billion, up 0.3 percent. Sales in janitorial and breakroom supplies rose 2.3 percent to $332.7 million from $325.3 million. Industrial supply sales increased 1.4 percent to $131.5 million from $129.7 million. Traditional office products sales rose 1.6 percent to $325.2 million from $320.1 million in 2013. Technology sales declined 3.0 percent to $353.5 million from $364.4 million. Furniture sales decreased 3.8 percent to $74.8 million from $77.7 million in the prior year.

“Our team delivered solid overall performance despite difficult demand conditions, partly due to adverse weather early in the quarter. Sales accelerated as the quarter progressed. We continue to make strategic investments in our business and e-commerce capabilities, and we are positioned well with both manufacturers and resellers to execute our growth and diversification strategies,” said Cody Phipps, United Stationers’ president and chief executive officer.

First quarter gross profit was $187.1 million, down slightly from $188.5 million in 2013. Gross margin was 14.9 percent compared with 15.1 percent in the prior year. The decline was a result of a change in customer and product mix, partially offset by lower inventory-related items.

Operating expenses were $148.8 million, or 11.9 percent of sales, versus $163.3 million, or 13.1 percent of sales, in 2013. Adjusted for the charge, 2013 operating expenses were $148.9 million⁽¹⁾, or 11.9 percent of sales.

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Operating income was $38.2 million, or 3.0 percent of sales, compared with $25.2 million, or 2.0 percent of sales, a year ago. Adjusted for the charge, 2013 operating income was $39.7 million⁽¹⁾, or 3.2 percent of sales.

Net interest expense was $3.4 million compared with $3.1 million in 2013. The increase primarily was due to the issuance of seven-year notes to fix the interest rate on a portion of the company’s debt.

Cash Flow and Debt

Net cash provided by operating activities in the first quarter was $1.5 million, compared with a use of $13.4 million in 2013. The year-over-year improvement in operating cash flow was attributable primarily to a decrease in contributions to the pension plans. Capital expenditures in the first quarter were $6.4 million compared with $9.1 million in 2013.

The company has total committed funding sources of approximately $1.0 billion. As of March 31, 2014, the company had total debt outstanding of $562.5 million compared with $537.0 million as of March 31, 2013. As of March 31, 2014 and 2013, debt-to-total capitalization was 40.4 percent and 41.6 percent, respectively. In the first quarter of 2014, the company repurchased 0.3 million shares for $12.5 million and paid $5.5 million in dividends to shareholders.

Outlook

“We recently completed the bid process at Office Depot. As a result of this process, we were named the second call office products supplier, which will result in the loss of some business. However, we were also named the primary supplier for janitorial and breakroom products, which will result in some new business and is consistent with our diversification strategy into growth categories. Many factors can influence the financial impact of this specific customer situation, but absent any mitigating actions we will take, we estimate a reduction in earnings per share in a range of $0.05 to $0.08 in the second half of 2014. Office Depot continues to be a valued customer, and we look forward to supporting both categories of business. We also remain well positioned with a robust sales pipeline and active discussions regarding new business with a range of strategic customers,” Phipps commented.

“We remain committed to our long-term strategy of strengthening and extending our core businesses while diversifying into higher growth and higher margin channels and categories. We continue to see opportunities for growth in the janitorial and breakroom, industrial, and online markets and plan to capitalize on them,” Phipps concluded.

Conference Call

United Stationers (“United Stationers” or “United”) will hold a conference call followed by a question and answer session on Thursday, April 24, 2014, at 10:00 a.m. CST, to discuss first quarter 2014 results. To participate, callers within the U.S. and Canada should call 888-317-6016, and international callers should dial (412) 317-6016 approximately 10 minutes before the presentation. The passcode is “10043281.” To listen to the webcast, participants should visit the Investors section of the company’s website (link: http://investors.unitedstationers.com), and click on the “Q1-14 Earnings Release” button on the right side of the page, several minutes before the event is broadcast. Interested parties can access an archived version of the call, the quarterly results page, a financial slide presentation, and other information related to the call, also located on the Investors section of United Stationers’ website, approximately two hours after the call ends.

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Forward-Looking Statement

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: United’s reliance on key customers, and the risks inherent in continuing or increased customer concentration; end-user demand for products in the office, technology, and furniture product categories may continue to decline; 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 supplier allowances and promotional incentives; 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 supply chain disruptions or changes in key suppliers’ distribution strategies; United’s ability to maintain its existing information technology systems and the systems and e-commerce 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.

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Company Overview

United Stationers Inc. is a leading supplier of business essentials, with 2013 net sales of $5.1 billion. The company stocks a broad assortment of over 140,000 items, including technology products, traditional office products, janitorial and breakroom supplies, office furniture, and industrial supplies. The Company’s network of 64 distribution centers allows it to deliver these products to approximately 25,000 reseller customers. This network, combined with United’s breadth and depth of inventory, enables the Company to ship most products overnight to more than ninety percent of the U.S. and major cities in Mexico and Canada. For more information, visit unitedstationers.com.

United Stationers common stock trades on the NASDAQ Global Select Market under the symbol USTR.

Note: All EPS numbers in this document are diluted unless stated otherwise.

⁽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 Inc. and Subsidiaries

Condensed Consolidated Statements of Income

(unaudited)

(in thousands, except per share data)

	For the Three Months Ended March 31,
	2014		2013
Net sales	$	1,254,139	$	1,250,485
Cost of goods sold		1,067,056		1,061,960
Gross profit		187,083		188,525
Operating expenses:
Warehousing, marketing and administrative expenses		148,849		163,284
Operating income		38,234		25,241
Interest expense, net		3,374		3,113
Income before income taxes		34,860		22,128
Income tax expense		13,003		8,254
Net income	$	21,857	$	13,874
Net income per share – diluted	$	0.55	$	0.34
Weighted average number of common shares – diluted		39,655		40,628

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United Stationers Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(dollars in thousands, except share data)

	(unaudited)			(audited)
	As of March 31,			As of December 31,
	2014			2013
ASSETS
Current assets:
Cash and cash equivalents	$	26,964		$	22,326
Accounts receivable, net		658,428			643,379
Inventories		748,499			830,295
Other current assets		28,766			29,255
Total current assets		1,462,657			1,525,255
Property, plant and equipment, net		138,907			143,050
Goodwill		356,651			356,811
Intangible assets, net		63,784			65,502
Other long-term assets		27,170			25,576
Total assets	$	2,049,169		$	2,116,194
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	397,198		$	476,113
Accrued liabilities		177,251			191,531
Short-term debt		1,048			373
Total current liabilities		575,497			668,017
Deferred income taxes		26,271			29,552
Long-term debt		561,511			533,324
Other long-term liabilities		55,888			59,787
Total liabilities		1,219,167			1,290,680
Stockholders’ equity:
Common stock, $0.10 par value; authorized – 100,000,000 shares, issued – 74,435,628 shares in 2014 and 2013		7,444			7,444
Additional paid-in capital		412,109			411,954
Treasury stock, at cost – 34,971,702 shares in 2014 and 34,714,083 shares in 2013		(1,010,122	)		(998,234	)
Retained earnings		1,460,582			1,444,238
Accumulated other comprehensive loss		(40,011	)		(39,888	)
Total stockholders’ equity		830,002			825,514
Total liabilities and stockholders’ equity	$	2,049,169		$	2,116,194

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United Stationers Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(unaudited)

(in thousands)

	For the Three Months Ended March 31,
	2014			2013
Cash Flows From Operating Activities:
Net income	$	21,857		$	13,874
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization		9,523			9,475
Share-based compensation		3,225			2,420
(Gain) loss on the disposition of plant, property and equipment		(4	)		14
Amortization of capitalized financing costs		287			224
Excess tax benefits related to share-based compensation		(494	)		(1,477	)
Deferred income taxes		(2,450	)		(2,079	)
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable, net		(15,583	)		26,267
Decrease in inventory		81,714			40,828
Increase in other assets		(1,041	)		(3,999	)
Decrease in accounts payable		(47,191	)		(77,404	)
(Decrease) increase in checks in-transit		(31,751	)		14,201
Decrease in accrued liabilities		(13,654	)		(27,304	)
Decrease in other liabilities		(2,948	)		(8,407	)
Net cash provided by (used in) operating activities		1,490			(13,367	)
Cash Flows From Investing Activities:
Capital expenditures		(6,390	)		(9,096	)
Proceeds from the disposition of property, plant and equipment		458			86
Net cash used in investing activities		(5,932	)		(9,010	)
Cash Flows From Financing Activities:
Net borrowings (repayments) under revolving credit facility		4,562			(37,028	)
Borrowings under receivables securitization program		9,300			49,700
Repayment of debt		(135,000	)		—
Proceeds from the issuance of debt		150,000			—
Net (disbursements) proceeds from share-based compensation arrangements		(1,704	)		10,840
Acquisition of treasury stock, at cost		(12,491	)		(7,124	)
Payment of cash dividends		(5,509	)		(5,571	)
Excess tax benefits related to share-based compensation		494			1,477
Payment of debt issuance costs		(605	)		(345	)
Net cash provided by financing activities		9,047			11,949
Effect of exchange rate changes on cash and cash equivalents		33			31
Net change in cash and cash equivalents		4,638			(10,397	)
Cash and cash equivalents, beginning of period		22,326			30,919
Cash and cash equivalents, end of period	$	26,964		$	20,522

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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 March 31,
	2014						2013
	Amount			% to Net Sales			Amount			% to Net Sales
Net sales	$	1,254,139			100.00	%	$	1,250,485			100.00	%
Gross profit	$	187,083			14.92	%	$	188,525			15.08	%
Operating expenses	$	148,849			11.87	%	$	163,284			13.06	%
Workforce reduction and facility closure charge		—			—			(14,432	)		(1.15	)%
Adjusted operating expenses	$	148,849			11.87	%	$	148,852			11.91	%
Operating income	$	38,234			3.05	%	$	25,241			2.02	%
Operating expense items noted above		—			—			14,432			1.15	%
Adjusted operating income	$	38,234			3.05	%	$	39,673			3.17	%
Net income	$	21,857					$	13,874
Operating expense items noted above, net of tax		—						8,948
Adjusted net income	$	21,857					$	22,822
Diluted earnings per share	$	0.55					$	0.34
Per share operating expense items noted above		—						0.22
Adjusted diluted earnings per share	$	0.55					$	0. 56
Adjusted diluted earnings per share — growth rate over the prior year period		(1.8	)%
Weighted average number of common shares — diluted		39,655						40,628

Note: Adjusted Operating Expenses, Operating Income, Net Income and Earnings Per Share in the first quarter of 2013 exclude the effects of a $14.4 million charge related to workforce reductions and facility closures. 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 this item to its Condensed Consolidated Statements of Income reported in accordance with Generally Accepted Accounting Principles.

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EX-99.2

April 23, 2014

1

United Stationers Inc.

Earnings Presentation

First Quarter 2014

Exhibit 99.2

April 23, 2014

2

Forward Looking Statements and

Non-GAAP Measures

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: United’s reliance on key customers, and the risks inherent in continuing or increased customer concentration; end-user demand for

products in the office, technology and furniture product categories may continue to decline; 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 supplier allowances and promotional incentives; 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 supply chain disruptions or changes in key

suppliers’ distribution strategies; 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 presentation 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.

April 23, 2014

Headlines For the Three Months Ended March 31, 2014

3

Sales were $1.254 billion, up 0.3% from $1.250 billion in Q1 2013.

Earnings per diluted share were $0.55, down 1.8% compared with Q1 2013

adjusted EPS of $0.56*.

Gross

margin

of

$187.1

million,

or

14.9%

of

sales,

was

down

from

$188.5

million, or 15.1% of sales, in the prior-year quarter.

Operating expenses in Q1 2014 were $148.8 million, or 11.9% of sales,

compared

with

adjusted

operating

expenses

of

$148.9

million*,

or

11.9%*

of

sales, in Q1 2013.

Operating income was $38.2 million, or 3.0% of sales, compared to adjusted

operating income of $39.7 million*, or 3.2%* of sales, in the prior-year

quarter.

Net income in the current quarter was $21.9 million compared with adjusted

net income of $22.8 million* in Q1 2013.

During the current quarter, the Company repurchased 0.3 million shares for

$12.5 million and paid cash dividends of $5.5 million to common

shareholders

April 23, 2014

4

Consolidated Statement of Income

For the Three Months Ended March 31, 2014 and 2013

% to sales change

$

% to Sales

$

% to Sales

$ change

% change

Fav (Unfav)

$ thousands (except EPS)

QTD Q1 2014

QTD Q1 2014

QTD Q1 2013

QTD Q1 2013

Fav (Unfav)

Fav (Unfav)

basis points

Net Sales

1,254,139

$  

1,250,485

$  

3,654

$     

0.3%

Gross Margin

187,083

14.92%

188,525

15.08%

(1,442)

(0.8%)

(16)

Operating Expense

148,849

11.87%

163,284

13.06%

14,435

8.8%

119

Operating Income

38,234

3.05%

25,241

2.02%

12,993

51.5%

103

Interest & Other

3,374

3,113

(261)

Taxes

13,003

8,254

(4,749)

Net Income

21,857

$       

13,874

$       

7,983

$     

Diluted Shares (000s)

39,655

40,628

973

2.4%

Diluted EPS

0.55

$          

0.34

$          

0.21

$       

61.8%

Adjusted to exclude non-operating items *

Adjusted Operating Expense

148,849

$     

11.87%

148,852

$     

11.91%

3

$            

0.0%

4

Adjusted Operating Income

38,234

3.05%

39,673

3.17%

(1,439)

(3.6%)

(12)

Adjusted Net Income

21,857

22,822

(965)

(4.2%)

Adjusted Diluted EPS

0.55

$          

0.56

$          

(0.01)

$      

(1.8%)

April 23, 2014

5

Sales

by Product Category –

Q1 2014

Sales

Sales

Sales

Sales

Sales

growth (decline)

growth (decline)

growth (decline)

growth (decline)

growth (decline)

Q1 2014

Q4 2013***

Q3 2013***

Q2 2013***

Q1 2013***

Category

vs Q1 2013

vs Q4 2012***

vs Q3 2012

vs Q2 2012

vs Q1 2012

Technology

(3.0%)

(11.1%)

(1.6%)

(6.3%)

(5.9%)

Office Products

1.6%

(2.6%)

(3.3%)

(4.0%)

(6.5%)

Furniture

(3.8%)

(4.5%)

(2.8%)

(5.1%)

(3.1%)

Janitorial/

Breakroom

2.3%

7.1%

3.8%

2.6%

3.0%

Industrial

1.4%

10.8%

30.4%

31.5%

35.6%

Janitorial/Breakroom

27%

Industrial

11%

Technology 29%

Office Products 27%

Furniture

6%

Q1 2014

Sales Mix

Total

Office

Products 62%

*** Industrial sales includes the impact of the acquisition of OKI Supply Co. on November 1, 2012

April 23, 2014

6

Sales by Channel –

Q1 2014

Sales growth

Sales growth

Sales growth

Sales growth

Sales growth

(decline)

(decline)

(decline)

(decline)

(decline)

Q1 2014

Q4 2013

Q3 2013

Q2 2013

Q1 2013

Channel

vs Q1 2013

vs Q4 2012

vs Q3 2012

vs Q2 2012

vs Q1 2012

Independent

& Other

0.9%

(1.6%)

2.8%

0.0%

0.1%

Nationals

(3.7%)

(1.9%)

(3.3%)

(0.9%)

(1.3%)

Independent

& Other

88%

Nationals

12%

Q1 2014

April 23, 2014

7

Gross Margin

dollars in millions

Q1 13

Q2 13

Q3 13

Q4 13

Q1 14

Dollars

$188.5

$201.9

$203.7

$195.5

$187.1

Rate

15.1%

15.8%

15.2%

16.0%

14.9%

10.0%

12.5%

15.0%

17.5%

20.0%

$150.0

$160.0

$170.0

$180.0

$190.0

$200.0

$210.0

April 23, 2014

8

Adjusted Operating Expense*

dollars in millions

Q1 13 *

Q2 13

Q3 13

Q4 13 *

Q1 14

Dollars

$148.9

$143.0

$136.3

$137.9

$148.8

Rate

11.9%

11.2%

10.2%

11.3%

11.9%

7.5%

10.0%

12.5%

15.0%

$100.0

$125.0

$150.0

April 23, 2014

9

Adjusted Operating Income*

dollars in millions

Q1 13 *

Q2 13

Q3 13

Q4 13 *

Q1 14

Dollars

$39.7

$58.9

$67.4

$57.5

$38.2

Rate

3.2%

4.6%

5.0%

4.7%

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, 2014

10

Adjusted Earnings per Share*

shares in millions

Q1 13 *

Q2 13

Q3 13

Q4 13 *

Q1 14

EPS

$0.56

$0.86

$1.01

$0.86

$0.55

Diluted Shares

40.628

40.328

40.031

39.915

39.655

-

1.000

$-

$0.20

$0.40

$0.60

$0.80

$1.00

April 23, 2014

11

Working Capital Summary

$ Millions

3/31/2013

6/30/2013

9/30/2013

12/31/2013

3/31/2014

Accounts Receivable

632.2

$           

662.2

$           

695.0

$         

643.4

$         

658.4

$         

Inventories (LIFO)

726.2

732.2

722.8

830.3

748.5

Accounts Payable

431.9

475.2

469.9

476.1

397.2

Q1 13

Q2 2013

Q3 2013

Q4 2013

Q1 2014

Net Trade A/R DSO

39

39

39

38

40

Inventory Turns

5.7

5.9

6.2

5.3

5.4

A/P as % Inventory (LIFO)

59%

65%

65%

57%

53%

A/P as % Inventory (FIFO)

52%

56%

56%

51%

46%

April 23, 2014

12

Cash Flows

QTD

QTD

QTD

QTD

2013

QTD

$ Millions

Q1 13

Q2 13

Q3 13

Q4 13

YTD

Q1 14

Net Income

13.8

$          

34.7

$          

40.5

$          

34.2

$          

123.2

$        

21.9

$          

Depreciation & Amortization

9.7

10.1

10.1

10.3

40.2

9.5

Share-based compensation

2.4

3.1

2.0

3.3

10.8

3.2

Change in Accounts Receivable

26.3

(30.3)

(32.9)

51.6

14.7

(15.6)

Change in Inventory

40.8

(9.2)

9.3

(107.5)

(66.6)

81.7

Change in Accounts Payable

(63.2)

43.1

(5.4)

6.2

(19.3)

(78.9)

Change in Other Working Capital

(30.6)

11.8

13.7

0.9

(4.2)

(13.2)

Change in Working Capital

(26.7)

15.4

(15.3)

(48.8)

(75.4)

(26.0)

Other

(12.6)

(4.6)

(3.2)

(3.7)

(24.1)

(7.1)

Cash provided by operating activities

(13.4)

58.7

34.1

(4.7)

74.7

1.5

Capital Expenditures

(9.1)

(7.9)

(5.8)

(11.0)

(33.8)

(6.4)

Proceeds from disposition of fixed assets

0.1

3.4

-

-

3.5

0.5

Net cash used for capital expenditures *

(9.0)

(4.5)

(5.8)

(11.0)

(30.3)

(5.9)

Free Cash Flow *

(22.4)

$         

54.2

$          

28.3

$          

(15.7)

$         

44.4

$          

(4.4)

$          

April 23, 2014

13

Debt and Capitalization

$ Millions

3/31/2013

6/30/2013

9/30/2013

12/31/2013

3/31/2014

Debt

537.0

$     

518.5

$     

507.5

$         

533.7

$         

562.5

$         

Equity

755.1

760.5

796.2

825.5

830.0

Total capitalization

1,292.1

$   

1,279.0

$   

1,303.7

$      

1,359.2

$      

1,392.5

$      

Debt-to-total capitalization

41.6%

40.5%

38.9%

39.3%

40.4%