-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, N6hZoQEZOqMRicmIEhGoSMK8+bMYPjf/gtxbQbOHqtCtr9sJu26tnRVb4JJDcdYx sVXJ7RjvcHKry7t2SAPjIA== 0000950137-96-000633.txt : 19960514 0000950137-96-000633.hdr.sgml : 19960514 ACCESSION NUMBER: 0000950137-96-000633 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960329 FILED AS OF DATE: 19960513 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ANIXTER INTERNATIONAL INC CENTRAL INDEX KEY: 0000052795 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-ELECTRICAL APPARATUS & EQUIPMENT, WIRING SUPPLIES [5063] IRS NUMBER: 941658138 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-10212 FILM NUMBER: 96561108 BUSINESS ADDRESS: STREET 1: 4711 GOLF ROAD CITY: SKOKIE STATE: IL ZIP: 60076 BUSINESS PHONE: 3129021515 MAIL ADDRESS: STREET 1: 4711 GOLF RD CITY: SKOKIE STATE: IL ZIP: 60076 FORMER COMPANY: FORMER CONFORMED NAME: ITEL CORP DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: SSI COMPUTER DATE OF NAME CHANGE: 19710316 FORMER COMPANY: FORMER CONFORMED NAME: SSI COMPUTER CORP DATE OF NAME CHANGE: 19690727 10-Q 1 1ST QUARTER REPORT 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES - --- EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 29, 1996 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES - --- EXCHANGE ACT OF 1934 Commission file number 1-5989 ANIXTER INTERNATIONAL INC. (Exact name of registrant as specified in its charter) Delaware 94-1658138 - -------- ---------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 2 North Riverside Plaza Suite 1900 Chicago, Illinois 60606 ----------------------------------------------------- (Address of principal executive offices and Zip Code) Registrant's telephone number, including area code: (312) 902-1515 -------------- Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ----- ----- At April 30, 1996 there were 50,339,890 shares of Common Stock, $1.00 par value, of the registrant outstanding. 2 PART I. FINANCIAL INFORMATION ANIXTER INTERNATIONAL INC. CONDENSED CONSOLIDATED BALANCE SHEETS (IN THOUSANDS)
MARCH 29, DECEMBER 31, 1996 1995 -------------- -------------- (UNAUDITED) Current assets: Cash and equivalents $ 15,600 $ 10,500 Accounts receivable (net of allowance for doubtful accounts of $9,000 and $9,000, respectively) 401,700 400,000 Inventories, primarily finished goods 417,700 364,100 Income taxes receivable 4,000 8,300 Other assets 7,400 6,400 ---------- ---------- Total current assets 846,400 789,300 Property, at cost 108,400 97,400 Accumulated depreciation (52,200) (48,200) ---------- ---------- Net property 56,200 49,200 Goodwill (net of accumulated amortization of $53,000 and $47,000 respectively) 185,400 183,000 Assets held for sale, net 50,300 42,800 Investment in ANTEC 74,400 73,700 Other assets 23,900 55,000 ---------- ---------- $1,236,600 $1,193,000 ========== ==========
See accompanying notes to the condensed consolidated financial statements. 2 3 ANIXTER INTERNATIONAL INC. CONDENSED CONSOLIDATED BALANCE SHEETS (IN THOUSANDS)
MARCH 29, DECEMBER 31, 1996 1995 -------------- ---------------- (UNAUDITED) Current liabilities: Accounts payable $ 221,600 $ 232,400 Accrued expenses 90,300 99,500 ---------- ---------- Total current liabilities 311,900 331,900 Deferred taxes, net 37,500 37,400 Other liabilities 16,800 17,600 Long-term debt 421,800 333,700 ---------- ---------- Total liabilities 788,000 720,600 Common stock repurchase commitment - 23,400 Stockholders' equity: Common stock 50,800 52,500 Capital surplus 94,000 99,900 Retained earnings 318,700 308,400 Cumulative translation adjustments (14,900) (11,800) ---------- ---------- Total stockholders' equity 448,600 449,000 ---------- ---------- $1,236,600 $1,193,000 ========== ==========
See accompanying notes to the condensed consolidated financial statements. 3 4 ANIXTER INTERNATIONAL INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
THREE-MONTH PERIODS ENDED --------------------------- MARCH 29, MARCH 31, 1996 1995 -------- -------- Revenues $567,400 $ 502,900 Cost of goods sold (421,600) (375,800) -------- --------- Gross profit 145,800 127,100 Operating expenses (120,900) (101,800) Amortization of goodwill (1,500) (1,500) -------- --------- Operating income 23,400 23,800 Interest expense and other, net (5,500) (4,900) Equity earnings in ANTEC 800 1,800 -------- --------- Income before income taxes 18,700 20,700 Income tax expense (8,400) (9,600) -------- --------- Net income $ 10,300 $ 11,100 ======== ========= Net income per common and common equivalent share $ .20 $ .19 ======== ========= Weighted average common and common equivalent shares 52,223 57,824 ======== =========
See accompanying notes to the condensed consolidated financial statements. 4 5 ANIXTER INTERNATIONAL INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (IN THOUSANDS)
THREE-MONTH PERIODS ENDED ------------------------------ MARCH 29, MARCH 31, 1996 1995 ------ ------ Operating activities: Net income $10,300 $11,100 Adjustments to reconcile net income to net cash provided (used) by operating activities: Depreciation 4,500 4,300 Amortization of goodwill 1,500 1,500 Deferred income tax expense 300 1,400 Equity earnings in ANTEC (800) (1,800) Non-cash financing expense 500 200 Other, net 500 2,200 Changes in current assets and liabilities, net (79,700) (18,100) -------- --------- Net cash provided (used) by operating activities (62,900) 800 Investing activities: Purchases of property, net (11,700) (5,800) Cash provided (used) by assets held for sale, net (2,000) 2,500 Other investments - (4,600) -------- --------- Net cash used by investing activities (13,700) (7,900) -------- --------- Net cash used before financing activities (76,600) (7,100) Financing activities: Borrowings 277,300 320,100 Reductions in borrowings (164,000) (267,900) Proceeds from issuance of common stock 700 2,400 Purchases of treasury stock (30,800) (38,800) Other, net (1,500) (600) -------- --------- Net cash provided by financing activities 81,700 15,200 -------- --------- Cash provided 5,100 8,100 Cash and equivalents at beginning of period 10,500 14,200 -------- --------- Cash and equivalents at end of period $15,600 $ 22,300 ======== ========= Supplemental cash flow information: Interest paid during the period $ 4,700 $ 5,800 ======== ========= Income taxes paid during the period $ 4,000 $ 2,000 ======== =========
See accompanying notes to the condensed consolidated financial statements. 5 6 ANIXTER INTERNATIONAL INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation: The accompanying consolidated financial statements should be read in conjunction with the consolidated financial statements included in Anixter International Inc.'s (Company) Annual Report on Form 10-K for the year ended December 31, 1995. The condensed consolidated financial information furnished herein reflects all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary for a fair presentation of the condensed consolidated financial statements for the periods shown. All operating activities of the Company are carried out by its principal subsidiary, Anixter Inc. ("Anixter"), which is a leading supplier of wiring systems, networking and internetworking products for voice, data, and video networks and electrical power applications. In 1996 the Company changed its year end from a calendar year ending December 31 to the Friday nearest December 31. Fiscal year 1996 will end on January 3, 1997 while the first quarter ended on March 29, 1996. This change does not have a significant effect on the results of operations for the quarter ended March 29, 1996. Principles of consolidation: The condensed consolidated financial statements include the accounts of Anixter International Inc. and its subsidiaries after elimination of intercompany transactions. 6 7 NOTE 2. SUMMARIZED FINANCIAL INFORMATION OF ANTEC The Company's ownership interest in ANTEC at March 29, 1996 and March 31, 1995 was 31% and 30% respectively. This investment is accounted for under the equity method. The following summarizes the financial information for ANTEC: ANTEC CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (IN MILLIONS)
MARCH 31, DECEMBER 31, 1996 1995 -------- ------- (UNAUDITED) Assets: Current assets $ 228.0 $ 232.2 Property, net 25.7 25.9 Goodwill 170.6 171.8 Other assets 26.9 27.0 ------- -------- $ 451.2 $ 456.9 ======= ======== Liabilities and Shareholders' Equity: Current liabilities $ 103.6 $ 101.8 Long-term debt 107.7 117.9 Shareholders' equity 239.9 237.2 ------- -------- $ 451.2 $ 456.9 ======= ========
ANTEC CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
THREE-MONTH PERIODS ENDED MARCH 31, --------------------- 1996 1995 ------ ------ (IN MILLIONS) Revenues $ 162.4 $ 158.8 ======== ======= Operating income $ 8.2 $ 11.3 ======== ======= Income before income tax expense $ 5.5 $ 8.5 ======== ======= Net income $ 2.6 $ 4.4 ======== =======
7 8 NOTE 3. RELATED PARTY TRANSACTION On June 27, 1995 the Company agreed to purchase up to 3.8 million shares of its common stock from Sam Zell, the Company's Chairman, and other related stockholders. The first 2.5 million shares were purchased on July 10, 1995 at $18 per share. The remaining 1.3 million shares were to be purchased at $18 per share plus an incremental increase of 6.5% per annum from the date of the agreement. These shares were purchased in the first quarter of 1996 at $18.87 per share. NOTE 4. STOCKHOLDER'S EQUITY On August 31, 1995, the Company's Board of Directors authorized a two-for-one stock split in the form of a stock dividend paid October 25, 1995, to stockholders of record September 22, 1995. All share and per share data have been adjusted to reflect this split. 8 9 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FINANCIAL LIQUIDITY AND CAPITAL RESOURCES CASH FLOW: Consolidated net cash provided (used) by operating activities was $(62.9) million for the first quarter of 1996 compared to $.8 million for the same period in 1995. Cash used by operating activities increased due to higher working capital investments. The increased working capital investment was principally related to higher inventories which resulted from a combination of lower than anticipated sales increases, and substantially shorter vendor lead times. Consolidated cash used by investing activities was $13.7 million for the first quarter of 1996 versus $7.9 million for the same period in 1995 due to increased capital expenditures relating to expansion in emerging markets and new service and logistic initiatives. Consolidated cash provided from net financing activities was $81.7 million for the first quarter of 1996 in comparison to $15.2 million for the first quarter of 1995. The consolidated net financing activities in 1996 and 1995 include $30.8 million and $38.8 million of treasury stock purchases, respectively. Cash used for assets held for sale, net was $2.0 million in the first quarter of 1996 versus net cash provided of $2.5 million for the same period in 1995 and reflects the payment of liabilities relating to those assets offset by modest proceeds from sales. Consolidated interest and other expense net was $5.5 million and $4.9 million for the quarters ended March 29, 1996 and March 31, 1995, respectively. The Company has entered into interest rate agreements which effectively fix or cap, for a period of time, the interest rate on a portion of its floating rate obligations. As a result, the interest rate on approximately 65% of debt obligations at March 29, 1996 is fixed or capped. The impact of interest rate swaps and caps on interest expense, net for the quarters ended March 29, 1996 and March 31, 1995 was to increase interest expense by approximately $.4 million and $.2 million respectively. 9 10 FINANCINGS: At March 29, 1996, $77.7 million was available under the bank revolving lines of credit at Anixter, of which $61.2 million was available to pay the Company for intercompany liabilities. OTHER LIQUIDITY CONSIDERATIONS: Certain debt agreements entered into by the Company's subsidiaries contain various restrictions including restrictions on payments to the Company. Such restrictions have not had nor are expected to have an adverse impact on the Company's ability to meet its cash obligations. The finance business of Signal Capital Corporation ("Signal Capital") has been included as assets held for sale since acquisition in 1988. Subsequent to the purchase, the Company sold or liquidated through March 29, 1996 $1.4 billion of the portfolio. The $34 million net portfolio at March 29, 1996 represents approximately 2% of the original acquired Signal Capital portfolio. Proceeds were used to repay indebtedness and repurchase shares of the Company's common stock. The Company continues to liquidate the acquired Signal Capital portfolio in an orderly manner that maximizes its value to shareholders and no material amounts of new loans or investments are being made by Signal Capital. CAPITAL EXPENDITURES AND ACQUISITIONS Consolidated capital expenditures were $11.7 million and $5.8 million for the first quarter of 1996 and 1995, respectively. 10 11 RESULTS OF OPERATIONS The Company has experienced increased revenues due to the continued growth of the North American communications and electrical wire and cable businesses and its continuing worldwide expansion. While the Company continues to believe that its revenue base will grow and its worldwide expansion will result in both increased revenues and operating profits, this forward-looking statement is subject to a number of uncertainties and actual results could differ materially. The Company competes with distributors and manufacturers who sell products directly or through existing distribution channels to end users or other resellers. The Company's relationship with the manufacturers for which it distributes products could be affected by decisions made by these manufacturers as the result of changes in management or ownerships as well as other factors. In addition, the Company's future performance could be affected by economic downturns and possibly rapid changes in applicable technologies. EARNINGS PER SHARE: Weighted average common and common equivalent shares outstanding decreased from March 31, 1995 to March 29, 1996 primarily as a result of the Company's treasury stock purchases in 1995 and 1996. An increase in borrowing costs associated with stock purchases offset the decrease in shares resulting in no significant effect on earnings per share. QUARTER ENDED MARCH 29, 1996: Net income for the first quarter of 1996 was $10.3 million compared with $11.1 million for the first quarter of 1995. The Company's revenues during the first quarter of 1996 increased 13% to $567.4 million from $502.9 million in 1995 due to (1) the continued demand for its communication products in North America and Europe, (2) focused marketing efforts on its electrical wiring systems products and (3) further market penetration in the Asian and Latin American expansion markets. The year over year sales growth of 13% trailed the Company's five year compounded annual growth rate of approximately 18%. The Company believes this lower than trend growth rate is due to the disruptive effects of a sales force reorganization in North America which was completed in the first quarter of 1996. The reorganization, which divided the sales force into product specialties, is intended to better focus the Company's sales efforts to support longer term sales growth. Revenues by major geographic market are presented in the following table. 11 12
QUARTERS ENDED --------------- MARCH 29, MARCH 31, 1996 1995 ---- ---- (IN MILLIONS) North America $425.3 $386.2 Europe 116.0 100.1 Asia and Latin America 26.1 16.6 ------ ------ $567.4 $502.9 ====== ======
The Company's gross margin increased 14.7% to $145.8 million in the first quarter of 1996 from $127.1 million in the first quarter of 1995 due to the 13% volume increase as well as a slight shift in sales mix to higher margin products and faster growth rates in the higher gross margin foreign geographies. Operating expenses increased 19% to $120.9 million due to increased headcount in most areas of the Company, including customer service based initiatives in North America and Europe and geographic expansion in Asia and Latin America. This increase in expenses was in line with 1996 business plan expectations; however, because sales were less than anticipated the operating expense ratio, before goodwill amortization, has risen to 21.3% in the first quarter of 1996 from 20.2% in the first quarter of 1995. Operating income decreased modestly to $23.4 million in 1996 from $23.8 million in the first quarter of 1995. Operating income by major geographic markets is presented in the following table.
QUARTERS ENDED -------------- MARCH 29, MARCH 31, 1996 1995 -------- -------- (IN MILLIONS) North America $24.3 $20.1 Europe 3.4 5.2 Asia and Latin America (4.3) (1.5) ----- ----- $23.4 $23.8 ===== =====
12 13 North American operating income includes the results of the North American business unit as well as certain corporate expenses. In 1996 these corporate related expenses were less than the prior year by approximately $1.5 million which accounts for the better growth in operating profits than in sales. The decrease in European profitability is due to volume related softness in communications sales in certain countries, and increased spending for sales force increases to support a move toward an end user customer focus. Changes in currency exchange rates in the first quarter 1996 reduced operating income by $.6 million as compared to what it would have been had 1996 exchange rates remained constant with those in 1995. Increased losses in emerging markets were due to new locations opened in the later part of 1995 and planned increases in headcounts required to penetrate the Asia/Pacific and Latin American markets. Consolidated net interest expense for the first quarter of 1996 increased to $5.5 million from $4.9 million in 1995 due to increased working capital borrowings partially offset by lower all in interest rates. The consolidated tax provision decreased by $1.2 million to $8.4 million due to lower pre-tax earnings and a decrease in the effective tax rate. The 1996 effective tax rate of 45% is based on pre-tax book income adjusted for amortization of goodwill and losses of foreign operations which are not currently deductible. 13 14 PART II. OTHER INFORMATION ITEM 4. SUBMISSION OF MATTER TO A VOTE OF SECURITY HOLDERS At the Annual Meeting of Stockholders held May 9, 1996: The Directors of the Company were elected as follows:
VOTES ------------------------------------------------------------------ DIRECTORS FOR WITHHELD - --------- ----------- ---------- Lord James Blyth 45,710,247 115,599 Bernard F. Brennan 45,711,831 114,015 Rod F. Dammeyer 45,430,547 395,299 Robert E. Fowler, Jr. 45,709,863 115,983 Robert W. Grubbs Jr. 45,599,277 226,569 F. Philip Handy 45,710,995 114,851 Melvyn N. Klein 45,711,649 114,197 John R. Petty 45,709,883 115,963 Sheli Z. Rosenberg 45,437,097 388,749 Stuart M. Sloan 45,710,281 115,565 Thomas C. Theobald 45,712,145 113,701 Samuel Zell 45,437,143 388,703
The Company's 1996 Stock Incentive Plan was approved by a vote of 34,549,557 shares "For", 11,040,821 shares "Against" and 98,968 shares "Abstain." ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits 27.1 Financial Data Schedule (b) Reports on Form 8-K None 14 15 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. ANIXTER INTERNATIONAL INC. Date: May 10, 1996 By: /s/ Rod F. Dammeyer ------------ --------------------------------------- Rod F. Dammeyer President and Chief Executive Officer Date: May 10, 1996 By: /s/ Dennis J. Letham ------------ ------------------------------------------ Dennis J. Letham Senior Vice President - Finance and Chief Financial Officer EX-27 2 FINANCIAL DATA SCHEDULE
5 This Schedule Conatins Summary Financial Information Extracted from Itel's Consolidated Financial Statements and is Qualified in its Entirety by Reference to Such Financial Statements. 1,000 3-MOS JAN-3-1997 JAN-01-1996 MAR-29-1996 15,600 0 401,700 9,000 417,000 846,400 108,400 52,200 1,236,600 311,900 0 0 0 50,800 397,800 1,236,600 567,400 567,400 421,600 544,000 0 0 5,500 18,700 8,400 10,300 0 0 0 10,300 .20 .20
-----END PRIVACY-ENHANCED MESSAGE-----