Exhibit 99.1 | |
 | |
ANIXTER INTERNATIONAL INC. REPORTS FIRST QUARTER 2017 RESULTS
Diluted EPS of $0.91 from continuing operations, up 30% versus $0.70 in prior year
Adjusted diluted EPS of $1.09 from continuing operations, up 18% versus $0.92 in prior year
First Quarter Highlights
• | Record first quarter sales of $1.9 billion, up 4.4% with growth in all segments and geographies |
• | Organic sales increased 5.6% on a per day basis, the strongest growth since 4Q 2014 |
• | Debt-to-capital ratio further improved, returning to target range of 45 - 50% |
GLENVIEW, IL, (Business Wire) April 25, 2017 - Anixter International Inc. (NYSE: AXE) today reported sales of $1.9 billion for the quarter ended March 31, 2017, a 4.4% increase compared to the prior year quarter. Organic sales increased 4.0% year-over-year, excluding the impact of the following items:
• | $14.9 million favorable impact from the higher average price of copper |
• | $8.3 million unfavorable impact from the fluctuation in foreign currencies |
The current quarter had 64 billing days, compared to 65 billing days in the first quarter of 2016. Excluding the unfavorable impact from one less billing day, organic sales increased 5.6% versus prior year.
All commentary in this release reflects results from continuing operations unless otherwise noted. Please refer to the tables at the end of this release for the reconciliations from our reported results prepared in accordance with U.S. GAAP to the non-GAAP measures.
Net income of $30.9 million includes amortization of intangible assets expense of $9.0 million pre-tax and $6.1 million after-tax. Net income of $23.2 million in the first quarter of 2016 includes amortization of intangible assets and acquisition and integration costs which together had an $11.9 million pre-tax and $7.4 million after-tax impact.
Excluding the impact of the above items, first quarter 2017 adjusted net income of $37.0 million compares to $30.6 million in the prior year quarter, a 20.7% increase.
Diluted earnings per share of $0.91 compares to $0.70, and adjusted diluted earnings per share of $1.09 compares to $0.92, both versus the prior year quarter.
Adjusted EBITDA increased 7.5% to $89.5 million, or 4.7% of sales, compared to prior year adjusted EBITDA of $83.3 million, or 4.6% of sales.
"First quarter 2017 year-over-year organic sales growth of 5.6% on a per day basis was our strongest sales growth since the fourth quarter of 2014, as our business continues to benefit from synergy initiatives and a slowly recovering industrial economy. We were pleased to deliver organic growth in all 3 segments and all 3 geographies, including 19.3% growth on an organic, per day basis in our EMEA geography," commented Bob Eck, President and CEO. "Sales in our Network & Security Solutions segment increased by 5.8%, marking 14 consecutive quarters of sales growth, while our Electrical and Electronic Solutions segment delivered 4.0% growth and our Utility Power Solutions segment delivered strong 7.4% growth, each year-over-year on an organic, per day basis."
Income Statement Detail
Gross margin of 20.0% compares to 20.4% in both the prior year quarter and the fourth quarter of 2016. The majority of the change versus both prior periods was driven by customer mix combined with segment mix.
Operating expense of $310.7 million, or 16.4% of sales, compares to prior year operating expense of $310.5 million, or 17.1% of sales. Excluding current quarter expense of $9.0 million and first quarter 2016 expense of $11.9 million, as detailed above, first quarter 2017 adjusted operating expense of $301.7 million compared to $298.6 million in the prior year quarter. Current quarter adjusted operating expense of 15.9% of sales compared to 16.4% of sales in the first quarter of 2016, driven primarily by expense reduction initiatives and leveraging growth in the business.
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Operating income of $69.0 million, or 3.6% of sales, compares to $60.3 million, or 3.3% of sales, in the prior year quarter. Excluding operating expense items outlined above, first quarter 2017 adjusted operating income increased 8.0% to $78.0 million compared to $72.2 million in the first quarter of 2016. Adjusted operating margin increased 10 basis points to 4.1% compared to 4.0% in the prior year quarter.
Interest expense of $18.9 million compares to $20.1 million in the prior year quarter, reflecting our focus on decreasing debt with the strong cash flow we continue to generate. Foreign exchange and other expense of $0.2 million compares to $2.8 million in the prior year quarter.
Our first quarter 2017 U.S. GAAP effective tax rate was 38.1% versus 37.9% in the first quarter of 2016 and our non-GAAP rate of 37.2% in the current quarter compared to 37.9% in the first quarter of 2016, driven primarily by the country mix of earnings.
Segment Update
Network & Security Solutions ("NSS") sales of $984.9 million increased by 3.8% over the prior year period, driven by broad-based growth in the business. Adjusting for the $3.9 million unfavorable impact from foreign exchange, NSS organic sales increased 4.2%, a 5.8% increase on a per day basis.
First quarter NSS security sales of $398.4 million, which represents approximately 40% of segment sales, increased 2.2% from the prior year quarter. Adjusted for the $1.8 million negative currency impact, organic security sales growth was 2.7%.
NSS operating income of $61.8 million compares to $58.8 million in the first quarter of 2016 and $77.2 million in the fourth quarter of 2016. NSS adjusted EBITDA of $66.6 million increased 4.3% versus the first quarter of 2016. The corresponding adjusted EBITDA margin of 6.8% compares to 6.7% in the prior year quarter and 7.9% in the fourth quarter of 2016.
Electrical & Electronic Solutions (“EES”) sales of $527.4 million compares to $506.0 million in the prior year period, an increase of 4.2%. Adjusted for the $5.7 million unfavorable impact from foreign exchange and the $14.7 million favorable impact from higher average copper prices, EES organic sales increased 2.4%, a 4.0% increase on a per day basis, driven by synergies and the slowly recovering industrial economy.
EES operating income of $27.9 million compares to $22.5 million in the prior year quarter and $22.4 million in the fourth quarter of 2016. The 23.8% increase in operating income versus prior year was driven by strong sales growth, combined with ongoing expense discipline, resulting in improved profitability in the business.
EES adjusted EBITDA of $30.4 million increased 19.7%, from $25.4 million in the prior year period, and compares to $25.6 million in the fourth quarter of 2016. The corresponding current quarter adjusted EBITDA margin of 5.8% compares to 5.0% in the prior year period and 5.1% in the fourth quarter of 2016.
Utility Power Solutions (“UPS”) sales of $383.5 million compares to $361.1 million in the prior year period, an increase of 6.2%. Adjusted for the $1.3 million favorable impact from foreign exchange and the $0.2 million favorable impact from higher average copper prices, UPS organic sales increased 5.8%, a 7.4% increase on an organic per day basis, driven by synergistic sales to service a new investor-owned utility customer.
UPS operating income of $16.2 million compares to $14.3 million in the prior year quarter and $14.6 million in the fourth quarter of 2016. The 13.9% increase in operating income versus prior year was driven by strong sales growth combined with ongoing expense discipline.
UPS adjusted EBITDA of $20.9 million compares to $20.1 million in the prior year quarter and $19.2 million in the fourth quarter of 2016. The corresponding adjusted EBITDA margin of 5.5% compares to 5.6% in the prior year quarter and 5.5% in the fourth quarter of 2016.
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Cash Flow and Leverage
We generated $51.5 million in cash flow from operations in the first quarter of 2017, which compares to $65.2 million in the first quarter of 2016. The decrease reflects higher working capital investment to support an acceleration in sales growth, partially offset by stronger earnings. We are increasing our estimate of full year 2017 cash flow from operations to the range of $200 - $220 million. In the first quarter of 2017 we invested $8.6 million in capital expenditures, which compares to $7.0 million in the prior year period. For the full year we expect to invest $40 - $50 million in capital expenditures.
"Our solid financial performance, as highlighted by a 7.5% increase in adjusted EBITDA on a 4.4% increase in sales, underscores the operating leverage of our business. Meanwhile we remain focused on our strategic initiatives, including delivering on our synergy goals, continuing to improve our cost structure and working capital efficiency," commented Ted Dosch, Executive Vice President - Finance and CFO. "We were pleased to deliver another quarter of strong cash flow from operations, enabling us to further reduce our debt. Turning to our capital structure, the strong free cash flow we are generating from our repositioned platform and working capital initiatives has enabled us to return our debt-to-capital ratio to our target range of 45 - 50% in the first quarter of 2017, ahead of our second half of 2017 target. We remain on track to return our debt-to-adjusted EBITDA ratio to our target range of 2.5 - 3.0 times by the end of the year."
Key capital structure and credit-related statistics for the quarter:
• | Debt-to-total capital ratio improved to 49.9% from 51.6% at the end of 2016 |
• | Weighted average cost of borrowed capital of 5.2% compares to 4.7% in the prior year quarter |
• | $571.4 million available under revolving lines of credit and secured accounts receivable and inventory facilities |
Business Outlook
"We were pleased with our sales momentum in the first quarter, which reflected a slowly improving economic environment and solid execution of our growth initiatives. As we enter the second quarter of 2017, we are cautiously optimistic that the positive momentum we experienced in the quarter will continue, as we maintain our focus on our growth initiatives which include synergistic sales and global accounts," commented Bob Eck. "Together with our current sales and backlog trends, and our conservative view of the macro environment, we expect second quarter 2017 organic sales growth in the 1.5 - 3% range. For the full year 2017 we have increased the midpoint of our outlook range by 100 basis points, and now expect full year organic sales growth in the 2 - 5% range."
Financial Results from Continuing Operations
Three Months Ended | ||||||||||
(In millions, except per share amounts) | March 31, 2017 | April 1, 2016 | Percent Change | |||||||
Net Sales | $ | 1,895.8 | $ | 1,816.2 | 4 | % | ||||
Operating Income | $ | 69.0 | $ | 60.3 | 14 | % | ||||
Net Income | $ | 30.9 | $ | 23.2 | 33 | % | ||||
Diluted Earnings Per Share | $ | 0.91 | $ | 0.70 | 30 | % | ||||
Diluted Weighted Shares | 33.9 | 33.4 | 2 | % | ||||||
nm - not meaningful | ||||||||||
First Quarter Earnings Call Details
We will host a conference call to discuss these results beginning at 9:30 a.m. Central Time today. The call will be available as a live audio webcast and can be accessed at the Investor Relations portion of our website at anixter.com/investor. Dial-in numbers for the call are as follows:
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U.S./Canada toll-free dial-in: (877) 201-0168
International dial-in: (647) 788-4901
Conference ID: 9755 2427
A replay of the call will be available at anixter.com/investor for 15 days following the call. Prior to the beginning of the call a supplemental presentation titled “First Quarter 2017 Highlights and Operating Review” will be available on the Investor Relations section of our website.
About Anixter
Anixter International is a leading global distributor of Network & Security Solutions, Electrical & Electronic Solutions and Utility Power Solutions. We help build, connect, protect, and power valuable assets and critical infrastructures. From enterprise networks to industrial MRO supply to video surveillance applications to electric power distribution, we offer full-line solutions, and intelligence, that create reliable, resilient systems that sustain businesses and communities. Through our unmatched global distribution network along with our supply chain and technical expertise, we help lower the cost, risk and complexity of our customers’ supply chains.
Anixter adds value to the distribution process by providing our customers access to 1) innovative supply chain solutions, 2) nearly 600,000 products and over $1.0 billion in inventory, 3) over 300 warehouses/branch locations with approximately 9.0 million square feet of space and 4) locations in over 300 cities in approximately 50 countries. Founded in 1957 and headquartered near Chicago, Anixter trades on the New York Stock Exchange under the symbol AXE.
Safe Harbor Statement
The statements in this release other than historical facts are forward-looking statements made in reliance upon the safe harbor of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to a number of factors that could cause our actual results to differ materially from what is indicated here. These factors include but are not limited to general economic conditions, the level of customer demand particularly for capital projects in the markets we serve, changes in supplier relationships or in supplier sales strategies or financial viability, risks associated with the sale of nonconforming products and services, political, economic or currency risks related to foreign operations, inventory obsolescence, copper price fluctuations, customer viability, risks associated with accounts receivable, the impact of regulation and regulatory, investigative and legal proceedings and legal compliance risks, information security risks, risks associated with substantial debt and restrictions contained in financial and operating covenants in our debt agreements, the impact and the uncertainty concerning the timing and terms of the withdrawal by the United Kingdom from the European Union, and risks associated with integration of acquired companies, including, but not limited to, the risk that the acquisitions may not provide us with the synergies or other benefits that were anticipated. These uncertainties may cause our actual results to be materially different than those expressed in any forward looking statements. We do not undertake to update any forward looking statements. Please see our Securities and Exchange Commission (“SEC”) filings for more information.
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Non-GAAP Financial Measures
In addition to the results provided in accordance with U.S. Generally Accepted Accounting Principles (“U.S. GAAP”) above, this release includes certain financial measures computed using non-GAAP components as defined by the SEC. Specifically, net sales comparisons to the prior corresponding period, both worldwide and in relevant segments, are discussed in this release both on an U.S. GAAP and non-GAAP basis. We believe that by providing non-GAAP organic growth, which adjusts for the impact of acquisitions (when applicable), foreign exchange fluctuations, copper prices and the number of billing days, both management and investors are provided with meaningful supplemental sales information to understand and analyze our underlying trends and other aspects of our financial performance. Historically and from time to time, we may also exclude other items from reported financial results (e.g., impairment charges, inventory adjustments, restructuring charges, tax items, currency devaluations, pension settlements, etc.) in presenting adjusted operating expense, adjusted operating income, adjusted income taxes and adjusted net income so that both management and financial statement users can use these non-GAAP financial measures to better understand and evaluate our performance period over period and to analyze the underlying trends of our business. As a result of the recent acquisitions we have also excluded amortization of intangible assets associated with purchase accounting from acquisitions from the adjusted amounts for comparison of the non-GAAP financial measures period over period.
EBITDA is defined as net income from continuing operations before interest, income taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA before foreign exchange and other non-operating expense and non-cash stock-based compensation, excluding the other items from reported financial results, as defined above. Adjusted EBITDA leverage is defined as the percentage change in Adjusted EBITDA divided by the percentage change in net sales. We believe that adjusted operating income, EBITDA, Adjusted EBITDA and Adjusted EBITDA leverage provide relevant and useful information, which is widely used by analysts, investors and competitors in our industry as well as by our management in assessing both consolidated and business segment performance. Adjusted operating income provides an understanding of the results from the primary operations of our business by excluding the effects of certain items that do not reflect the ordinary earnings of our operations. We use adjusted operating income to evaluate our period-over-period operating performance because we believe this provides a more comparable measure of our continuing business excluding certain items that are not reflective of expected ongoing operations. This measure may be useful to an investor in evaluating the underlying performance of our business. EBITDA provides us with an understanding of earnings before the impact of investing and financing charges and income taxes. Adjusted EBITDA further excludes the effects of foreign exchange and other non-cash stock-based compensation, and certain items that do not reflect the ordinary earnings of our operations and that are also excluded for purposes of calculating adjusted net income, adjusted earnings per share and adjusted operating income. EBITDA and Adjusted EBITDA are used by our management for various purposes including as measures of performance of our operating segments and as a basis for strategic planning and forecasting. Adjusted EBITDA and Adjusted EBITDA leverage may be useful to an investor because this measure is widely used to evaluate a company’s operating performance without regard to items excluded from the calculation of such measure, which can vary substantially from company to company depending on the accounting methods, book value of assets, capital structure and the method by which the assets were acquired, among other factors. They are not, however, intended as an alternative measure of operating results or cash flow from operations as determined in accordance with generally accepted accounting principles.
Non-GAAP financial measures provide insight into selected financial information and should be evaluated in the context in which they are presented. These non-GAAP financial measures have limitations as analytical tools, and should not be considered in isolation from, or as a substitute for, financial information presented in compliance with U.S. GAAP, and non-GAAP financial measures as reported by us may not be comparable to similarly titled amounts reported by other companies. The non-GAAP financial measures should be considered in conjunction with the Condensed Consolidated Financial Statements, including the related notes, and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in this release. Management does not use these non-GAAP financial measures for any purpose other than the reasons stated above.
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INVESTOR CONTACTS
Ted Dosch | Lisa M. Gregory, CFA |
EVP - Finance & Chief Financial Officer | VP - Investor Relations |
(224) 521-4281 | (224) 521-8895 |
Additional information about Anixter is available at anixter.com
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ANIXTER INTERNATIONAL INC. | |||||||
Condensed Consolidated Statements of Operations (Unaudited) | |||||||
Three Months Ended | |||||||
March 31, 2017 | April 1, 2016 | ||||||
(In millions, except per share amounts) | |||||||
Net sales | $ | 1,895.8 | $ | 1,816.2 | |||
Cost of goods sold | 1,516.1 | 1,445.4 | |||||
Gross profit | 379.7 | 370.8 | |||||
Operating expenses | 310.7 | 310.5 | |||||
Operating income | 69.0 | 60.3 | |||||
Other expense: | |||||||
Interest expense | (18.9 | ) | (20.1 | ) | |||
Other, net | (0.2 | ) | (2.8 | ) | |||
Income from continuing operations before income taxes | 49.9 | 37.4 | |||||
Income tax expense from continuing operations | 19.0 | 14.2 | |||||
Net income from continuing operations | 30.9 | 23.2 | |||||
Loss from discontinued operations before income taxes | — | (0.7 | ) | ||||
Income tax benefit from discontinued operations | — | (0.3 | ) | ||||
Net loss from discontinued operations | — | (0.4 | ) | ||||
Net income | $ | 30.9 | $ | 22.8 | |||
Income (loss) per share: | |||||||
Basic: | |||||||
Continuing operations | $ | 0.92 | $ | 0.70 | |||
Discontinued operations | — | (0.01 | ) | ||||
Net Income | $ | 0.92 | $ | 0.69 | |||
Diluted: | |||||||
Continuing operations | $ | 0.91 | $ | 0.70 | |||
Discontinued operations | — | (0.02 | ) | ||||
Net Income | $ | 0.91 | $ | 0.68 | |||
Weighted-average common shares outstanding: | |||||||
Basic | 33.5 | 33.3 | |||||
Diluted | 33.9 | 33.4 | |||||
Reportable Segments | |||||||
Net sales: | |||||||
Network & Security Solutions | $ | 984.9 | $ | 949.1 | |||
Electrical & Electronic Solutions | 527.4 | 506.0 | |||||
Utility Power Solutions | 383.5 | 361.1 | |||||
$ | 1,895.8 | $ | 1,816.2 | ||||
Operating income: | |||||||
Network & Security Solutions | $ | 61.8 | $ | 58.8 | |||
Electrical & Electronic Solutions | 27.9 | 22.5 | |||||
Utility Power Solutions | 16.2 | 14.3 | |||||
Corporate | (36.9 | ) | (35.3 | ) | |||
$ | 69.0 | $ | 60.3 | ||||
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ANIXTER INTERNATIONAL INC. | |||||||
Condensed Consolidated Balance Sheets (Unaudited) | |||||||
March 31, 2017 | December 30, 2016 | ||||||
(In millions) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 118.2 | $ | 115.1 | |||
Accounts receivable, net | 1,320.2 | 1,353.2 | |||||
Inventories | 1,156.0 | 1,178.3 | |||||
Other current assets | 43.0 | 41.9 | |||||
Total current assets | 2,637.4 | 2,688.5 | |||||
Property and equipment, net | 142.1 | 140.3 | |||||
Goodwill | 767.2 | 764.6 | |||||
Intangible assets, net | 407.3 | 415.4 | |||||
Other assets | 86.2 | 84.8 | |||||
Total assets | $ | 4,040.2 | $ | 4,093.6 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 980.6 | $ | 1,006.0 | |||
Accrued expenses | 222.2 | 257.9 | |||||
Total current liabilities | 1,202.8 | 1,263.9 | |||||
5.50% Senior notes due 2023 | 346.4 | 346.3 | |||||
5.125% Senior notes due 2021 | 395.9 | 395.7 | |||||
5.625% Senior notes due 2019 | 347.9 | 347.7 | |||||
Canadian term loan | 81.6 | 95.4 | |||||
Revolving lines of credit | 170.0 | 197.1 | |||||
Other | 2.2 | 3.5 | |||||
Unamortized debt issuance costs | (6.4 | ) | (6.9 | ) | |||
Other liabilities | 157.2 | 158.7 | |||||
Total liabilities | 2,697.6 | 2,801.4 | |||||
Total stockholders' equity | 1,342.6 | 1,292.2 | |||||
Total liabilities and stockholders' equity | $ | 4,040.2 | $ | 4,093.6 | |||
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ANIXTER INTERNATIONAL INC. | |||||||
Condensed Consolidated Statements of Cash Flows (Unaudited) | |||||||
Three Months Ended | |||||||
March 31, 2017 | April 1, 2016 | ||||||
(In millions) | |||||||
Operating activities: | |||||||
Net income | $ | 30.9 | $ | 22.8 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation | 7.0 | 7.0 | |||||
Amortization of intangible assets | 9.0 | 9.7 | |||||
Stock-based compensation | 4.5 | 4.1 | |||||
Deferred income taxes | 0.4 | 0.5 | |||||
Accretion of debt discount | 0.5 | 0.5 | |||||
Amortization of deferred financing costs | 0.5 | 0.5 | |||||
Pension plan contributions | (4.5 | ) | (4.6 | ) | |||
Pension plan expenses | 2.6 | 2.7 | |||||
Changes in current assets and liabilities, net | 1.8 | 26.3 | |||||
Other, net | (1.2 | ) | (4.3 | ) | |||
Net cash provided by operating activities | 51.5 | 65.2 | |||||
Investing activities: | |||||||
Capital expenditures, net | (8.6 | ) | (7.0 | ) | |||
Net cash used in investing activities | (8.6 | ) | (7.0 | ) | |||
Financing activities: | |||||||
Proceeds from borrowings | 435.0 | 359.1 | |||||
Repayments of borrowings | (463.6 | ) | (450.6 | ) | |||
Repayments of Canadian term loan | (15.0 | ) | — | ||||
Proceeds from stock options exercised | 1.8 | — | |||||
Other, net | (0.2 | ) | — | ||||
Net cash used in financing activities | (42.0 | ) | (91.5 | ) | |||
Increase (decrease) in cash and cash equivalents | 0.9 | (33.3 | ) | ||||
Effect of exchange rate changes on cash balances | 2.2 | (2.7 | ) | ||||
Cash and cash equivalents at beginning of period | 115.1 | 151.3 | |||||
Cash and cash equivalents at end of period | $ | 118.2 | $ | 115.3 | |||
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ANIXTER INTERNATIONAL INC. | |||||||||||||||||||||||||||||||
Financial Measures That Supplement U.S. GAAP (Unaudited) | |||||||||||||||||||||||||||||||
First Quarter 2017 Sales Growth Trends | |||||||||||||||||||||||||||||||
Q1 2017 | Q1 2016 | ||||||||||||||||||||||||||||||
(In millions) | As Reported | Foreign Exchange Impact | Copper Impact | As Adjusted | As Reported | Organic Growth/ (Decline) | Adjusted 2016 for Extra Day | Adjusted Per Day Organic Growth/(Decline) | |||||||||||||||||||||||
Network & Security Solutions | |||||||||||||||||||||||||||||||
North America | $ | 768.0 | $ | (2.4 | ) | $ | — | $ | 765.6 | $ | 748.0 | 2.4 | % | $ | 736.5 | 4.0 | % | ||||||||||||||
EMEA | 92.9 | 4.1 | — | 97.0 | 81.4 | 19.3 | % | 80.1 | 21.2 | % | |||||||||||||||||||||
Emerging Markets | 124.0 | 2.2 | — | 126.2 | 119.7 | 5.4 | % | 117.9 | 7.0 | % | |||||||||||||||||||||
NSS | $ | 984.9 | $ | 3.9 | $ | — | $ | 988.8 | $ | 949.1 | 4.2 | % | $ | 934.5 | 5.8 | % | |||||||||||||||
Electrical & Electronic Solutions | |||||||||||||||||||||||||||||||
North America | $ | 416.2 | $ | (1.7 | ) | $ | (11.3 | ) | $ | 403.2 | $ | 404.8 | (0.4 | )% | $ | 398.6 | 1.2 | % | |||||||||||||
EMEA | 62.5 | 6.4 | (2.6 | ) | 66.3 | 57.7 | 14.8 | % | 56.8 | 16.6 | % | ||||||||||||||||||||
Emerging Markets | 48.7 | 1.0 | (0.8 | ) | 48.9 | 43.5 | 12.4 | % | 42.8 | 14.1 | % | ||||||||||||||||||||
EES | $ | 527.4 | $ | 5.7 | $ | (14.7 | ) | $ | 518.4 | $ | 506.0 | 2.4 | % | $ | 498.2 | 4.0 | % | ||||||||||||||
Utility Power Solutions | |||||||||||||||||||||||||||||||
North America | $ | 383.5 | $ | (1.3 | ) | $ | (0.2 | ) | $ | 382.0 | $ | 361.1 | 5.8 | % | $ | 355.5 | 7.4 | % | |||||||||||||
UPS | $ | 383.5 | $ | (1.3 | ) | $ | (0.2 | ) | $ | 382.0 | $ | 361.1 | 5.8 | % | $ | 355.5 | 7.4 | % | |||||||||||||
Total | $ | 1,895.8 | $ | 8.3 | $ | (14.9 | ) | $ | 1,889.2 | $ | 1,816.2 | 4.0 | % | $ | 1,788.2 | 5.6 | % | ||||||||||||||
Geographic Sales | |||||||||||||||||||||||||||||||
North America | $ | 1,567.7 | $ | (5.4 | ) | $ | (11.5 | ) | $ | 1,550.8 | $ | 1,513.9 | 2.4 | % | $ | 1,490.6 | 4.0 | % | |||||||||||||
EMEA | 155.4 | 10.5 | (2.6 | ) | 163.3 | 139.1 | 17.5 | % | 136.9 | 19.3 | % | ||||||||||||||||||||
Emerging Markets | 172.7 | 3.2 | (0.8 | ) | 175.1 | 163.2 | 7.3 | % | 160.7 | 8.9 | % | ||||||||||||||||||||
Total | $ | 1,895.8 | $ | 8.3 | $ | (14.9 | ) | $ | 1,889.2 | $ | 1,816.2 | 4.0 | % | $ | 1,788.2 | 5.6 | % | ||||||||||||||
Note: There were 64 billing days in the first quarter of 2017 compared to 65 billing days in the first quarter of 2016. | |||||||||||||||||||||||||||||||
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ANIXTER INTERNATIONAL INC. | ||||||||
Financial Measures That Supplement U.S. GAAP (Unaudited) - continued | ||||||||
(In millions, except per share amounts) | Positive (Negative) impact | |||||||
Three Months Ended | ||||||||
March 31, 2017 | April 1, 2016 | |||||||
Continuing operations | ||||||||
Items impacting comparability of results: | ||||||||
Items impacting operating expense and operating income: | ||||||||
Amortization of intangible assets | $ | (9.0 | ) | $ | (9.7 | ) | ||
Acquisition and integration costs | — | (2.2 | ) | |||||
Total of items impacting operating expense and operating income | $ | (9.0 | ) | $ | (11.9 | ) | ||
Items impacting income taxes: | ||||||||
Tax impact of items impacting pre-tax income above | $ | 2.9 | $ | 4.5 | ||||
Total of items impacting income taxes | $ | 2.9 | $ | 4.5 | ||||
Net income impact of these items | $ | (6.1 | ) | $ | (7.4 | ) | ||
Diluted EPS impact of these items | $ | (0.18 | ) | $ | (0.22 | ) | ||
U.S. GAAP to Non-GAAP Net Income and EPS Reconciliation for continuing operations: | ||||||||
Net income from continuing operations – U.S. GAAP | $ | 30.9 | $ | 23.2 | ||||
Items impacting net income from continuing operations | 6.1 | 7.4 | ||||||
Net income from continuing operations – Non-GAAP | $ | 37.0 | $ | 30.6 | ||||
Diluted EPS – U.S. GAAP | $ | 0.91 | $ | 0.70 | ||||
Diluted EPS impact of these items | 0.18 | 0.22 | ||||||
Diluted EPS – Non-GAAP | $ | 1.09 | $ | 0.92 | ||||
Items Impacting Comparability of Operating Income by Segment | Three Months Ended March 31, 2017 | |||||||||||||||||||
(In millions) | NSS | EES | UPS | Corporate | Total | |||||||||||||||
Operating income - U.S. GAAP | $ | 61.8 | $ | 27.9 | $ | 16.2 | $ | (36.9 | ) | $ | 69.0 | |||||||||
Operating margin - U.S. GAAP | 6.3 | % | 5.3 | % | 4.2 | % | nm | 3.6 | % | |||||||||||
Total of items impacting operating income | $ | 3.6 | $ | 1.6 | $ | 3.5 | $ | 0.3 | $ | 9.0 | ||||||||||
Adjusted operating income - Non-GAAP | $ | 65.4 | $ | 29.5 | $ | 19.7 | $ | (36.6 | ) | $ | 78.0 | |||||||||
Adjusted operating margin - Non-GAAP | 6.6 | % | 5.6 | % | 5.1 | % | nm | 4.1 | % | |||||||||||
nm - not meaningful | ||||||||||||||||||||
Items Impacting Comparability of Operating Income by Segment | Three Months Ended April 1, 2016 | |||||||||||||||||||
(In millions) | NSS | EES | UPS | Corporate | Total | |||||||||||||||
Operating income - U.S. GAAP | $ | 58.8 | $ | 22.5 | $ | 14.3 | $ | (35.3 | ) | $ | 60.3 | |||||||||
Operating margin - U.S. GAAP | 6.2 | % | 4.4 | % | 3.9 | % | nm | 3.3 | % | |||||||||||
Total of items impacting operating income | $ | 3.6 | $ | 2.2 | $ | 4.2 | $ | 1.9 | $ | 11.9 | ||||||||||
Adjusted operating income - Non-GAAP | $ | 62.4 | $ | 24.7 | $ | 18.5 | $ | (33.4 | ) | $ | 72.2 | |||||||||
Adjusted operating margin - Non-GAAP | 6.6 | % | 4.9 | % | 5.1 | % | nm | 4.0 | % | |||||||||||
nm - not meaningful | ||||||||||||||||||||
11
ANIXTER INTERNATIONAL INC. | ||||||||
Financial Measures That Supplement U.S. GAAP (Unaudited) - continued | ||||||||
2017 and 2016 Effective Tax Rate – U.S. GAAP and Non-GAAP | ||||||||
Three Months Ended | ||||||||
(In millions) | March 31, 2017 | April 1, 2016 | ||||||
Income from continuing operations before taxes – U.S. GAAP | $ | 49.9 | $ | 37.4 | ||||
Income tax expense – U.S. GAAP | $ | 19.0 | $ | 14.2 | ||||
Effective income tax rate | 38.1 | % | 37.9 | % | ||||
Total of items impacting pre-tax income above | $ | 9.0 | $ | 11.9 | ||||
Total of items impacting income taxes above | $ | 2.9 | $ | 4.5 | ||||
Income from continuing operations before income taxes – Non-GAAP | $ | 58.9 | $ | 49.3 | ||||
Income tax expense – Non-GAAP | $ | 21.9 | $ | 18.7 | ||||
Adjusted effective income tax rate | 37.2 | % | 37.9 | % | ||||
2017 EBITDA by Segment | ||||||||||||||||||||
Three Months Ended March 31, 2017 | ||||||||||||||||||||
(In millions) | NSS | EES | UPS | Corporate | Total | |||||||||||||||
Net income from continuing operations | $ | 61.8 | $ | 27.9 | $ | 16.2 | $ | (75.0 | ) | $ | 30.9 | |||||||||
Interest expense | — | — | — | 18.9 | 18.9 | |||||||||||||||
Income taxes | — | — | — | 19.0 | 19.0 | |||||||||||||||
Depreciation | 0.8 | 0.6 | 1.0 | 4.6 | 7.0 | |||||||||||||||
Amortization of intangible assets | 3.6 | 2.1 | 3.3 | — | 9.0 | |||||||||||||||
EBITDA | $ | 66.2 | $ | 30.6 | $ | 20.5 | $ | (32.5 | ) | $ | 84.8 | |||||||||
EBITDA leverage | 1.2x | 5.0x | 0.7x | nm | 3.3x | |||||||||||||||
EBITDA as a % of sales | 6.7 | % | 5.8 | % | 5.3 | % | nm | 4.5 | % | |||||||||||
Foreign exchange and other non-operating expense | $ | — | $ | — | $ | — | $ | 0.2 | $ | 0.2 | ||||||||||
Stock-based compensation | 0.4 | 0.3 | 0.2 | 3.6 | 4.5 | |||||||||||||||
Restructuring charge | — | (0.5 | ) | 0.2 | 0.3 | — | ||||||||||||||
Adjusted EBITDA | $ | 66.6 | $ | 30.4 | $ | 20.9 | $ | (28.4 | ) | $ | 89.5 | |||||||||
Adjusted EBITDA leverage | 1.1x | 4.7x | 0.7x | nm | 1.7x | |||||||||||||||
Adjusted EBITDA as a % of sales | 6.8 | % | 5.8 | % | 5.5 | % | nm | 4.7 | % | |||||||||||
nm - not meaningful | ||||||||||||||||||||
2016 EBITDA by Segment | ||||||||||||||||||||
Three Months Ended April 1, 2016 | ||||||||||||||||||||
(In millions) | NSS | EES | UPS | Corporate | Total | |||||||||||||||
Net income from continuing operations | $ | 58.8 | $ | 22.5 | $ | 14.3 | $ | (72.4 | ) | $ | 23.2 | |||||||||
Interest expense | — | — | — | 20.1 | 20.1 | |||||||||||||||
Income taxes | — | — | — | 14.2 | 14.2 | |||||||||||||||
Depreciation | 0.9 | 0.5 | 1.4 | 4.2 | 7.0 | |||||||||||||||
Amortization of intangible assets | 3.6 | 2.2 | 3.9 | — | 9.7 | |||||||||||||||
EBITDA | $ | 63.3 | $ | 25.2 | $ | 19.6 | $ | (33.9 | ) | $ | 74.2 | |||||||||
EBITDA leverage | 2.2x | nm | 0.4x | nm | 0.4x | |||||||||||||||
EBITDA as a % of sales | 6.7 | % | 5.0 | % | 5.4 | % | nm | 4.1 | % | |||||||||||
Foreign exchange and other non-operating expense | $ | — | $ | — | $ | — | $ | 2.8 | $ | 2.8 | ||||||||||
Stock-based compensation | 0.5 | 0.2 | 0.2 | 3.2 | 4.1 | |||||||||||||||
Acquisition and integration costs | — | — | 0.3 | 1.9 | 2.2 | |||||||||||||||
Adjusted EBITDA | $ | 63.8 | $ | 25.4 | $ | 20.1 | $ | (26.0 | ) | $ | 83.3 | |||||||||
Adjusted EBITDA leverage | 2.2x | nm | 0.4x | nm | 0.5x | |||||||||||||||
Adjusted EBITDA as a % of sales | 6.7 | % | 5.0 | % | 5.6 | % | nm | 4.6 | % | |||||||||||
nm - not meaningful | ||||||||||||||||||||
12