Delaware | 94-1658138 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Emerging Growth Company | o |
Item 2.02 | Results of Operations and Financial Condition. |
Item 9.01 | Financial Statements and Exhibits. |
Exhibit No. | Description |
99.1 |
ANIXTER INTERNATIONAL INC. | ||
January 29, 2019 | By: | /s/ Theodore A. Dosch |
Theodore A. Dosch | ||
Executive Vice President - Finance | ||
and Chief Financial Officer |
Exhibit No. | Description |
99.1 |
Exhibit 99.1 | |
• | Record fourth quarter sales of $2.1 billion, up 5.2%, organic sales growth of 5.1% |
• | Gross margin of 20.3%, up 50 basis points |
• | Refinanced $350 million of 5.625% Senior Notes due 2019 with $250 million of 6.00% Senior Notes due 2025 |
• | Sales increased 5.2% to $2.1 billion. Current quarter sales include the favorable impact of the security acquisitions completed in the second quarter of 2018 and the unfavorable impacts of lower average copper prices and generally weaker foreign currencies. Adjusting for these impacts, organic sales increased 5.1%, as detailed in the table on page 9 of this release. |
• | Gross profit increased 7.9% to $430.0 million. Gross margin of 20.3% increased by 80 basis points sequentially and 50 basis points year-over-year. |
• | Operating expense of $342.7 million compares to $317.8 million. Operating expense ratio of 16.2% compares to 15.8%. |
• | Operating income increased 8.3% to $87.3 million. Operating margin of 4.1% compares to 4.0%. |
• | Interest expense of $19.8 million compares to $19.0 million. |
• | Other, net expense of $7.6 million compares to $0.1 million. The change was driven by $4.6 million of expenses due to the loss on extinguishment of the $350 million of 5.625% Senior Notes due 2019. |
• | The effective tax rate of 30.2% compares to 99.4%. The lower effective tax rate in the current quarter is due primarily to higher tax expense recorded in the fourth quarter of 2017 related to the Tax Cuts and Jobs Act of 2017. |
• | Net income of $41.8 million compares to $0.4 million. The largest driver of the increase was driven by the 2017 tax expense noted above. |
• | Earnings per diluted share of $1.22 compares to $0.01. |
• | Full year 2018 cash flow from operations of $137.7 million compares to $183.8 million in 2017. The difference is due primarily to increased working capital investment to support growth in the business. |
• | Full year 2018 capital expenditures of $42.4 million compares to $41.1 million in 2017. The increase is due to higher capital investment in facilities and innovation. |
• | Working capital as a percentage of sales of 18.2% compares to 18.4%. |
• | Adjusted operating expense of $333.8 million compares to $301.6 million, up 10.7%. Adjusted operating expense ratio of 15.8% compares to 15.0%. The increase in adjusted operating expense is due to $7.4 million of incremental expense from the acquisitions and $7.2 million of investment in innovation and business transformation strategies, combined with higher volume and inflationary pressures, primarily from freight and medical costs. |
• | Adjusted operating income of $96.2 million compares to $96.8 million. Adjusted operating margin of 4.5% compares to 4.8%. |
• | Adjusted effective tax rate of 28.6% compares to 38.5%. The lower tax rate is driven by the impact of the Tax Cuts and Jobs Act of 2017. |
• | Adjusted net income increased 9.5% to $52.4 million. |
• | Adjusted diluted earnings per share increased 8.5% to $1.53. |
• | Adjusted EBITDA of $108.5 million compares to $108.3 million. Adjusted EBITDA margin of 5.1% compares to 5.4%. |
• | Debt-to-total capital ratio of 44.4%, compares to 46.1% at the end of 2017 |
• | Debt-to-adjusted EBITDA ratio of 3.0 times compares to 3.1 times at the end of 2017 |
• | Weighted average cost of borrowed capital of 5.5%, compares to 5.6% in the prior year quarter |
• | $598.5 million available under secured accounts receivable, inventory facilities and revolving lines of credit |
Three Months Ended | Twelve Months Ended | ||||||||||||||||||||
(In millions, except per share amounts) | December 28, 2018 | December 29, 2017 | Percent Change | December 28, 2018 | December 29, 2017 | Percent Change | |||||||||||||||
Net Sales | $ | 2,119.1 | $ | 2,013.8 | 5 | % | $ | 8,400.2 | $ | 7,927.4 | 6 | % | |||||||||
Operating Income | $ | 87.3 | $ | 80.6 | 8 | % | $ | 309.7 | $ | 312.9 | (1 | )% | |||||||||
Net Income | $ | 41.8 | $ | 0.4 | nm | $ | 156.3 | $ | 109.0 | 43 | % | ||||||||||
Diluted Earnings Per Share | $ | 1.22 | $ | 0.01 | nm | $ | 4.58 | $ | 3.21 | 43 | % | ||||||||||
Diluted Weighted Shares | 34.1 | 34.0 | — | % | 34.1 | 34.0 | — | % | |||||||||||||
Ted Dosch | Kevin Burns | Lisa M. Gregory, CFA |
EVP - Finance & CFO | SVP - IR & Treasurer | VP - Investor Relations |
(224) 521-4281 | (224) 521-8258 | (224) 521-8895 |
ANIXTER INTERNATIONAL INC. | |||||||||||||||
Condensed Consolidated Statements of Operations (Unaudited) | |||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||
December 28, 2018 | December 29, 2017 | December 28, 2018 | December 29, 2017 | ||||||||||||
(In millions, except per share amounts) | |||||||||||||||
Net sales | $ | 2,119.1 | $ | 2,013.8 | $ | 8,400.2 | $ | 7,927.4 | |||||||
Cost of goods sold | 1,689.1 | 1,615.4 | 6,742.2 | 6,356.4 | |||||||||||
Gross profit | 430.0 | 398.4 | 1,658.0 | 1,571.0 | |||||||||||
Operating expenses | 342.7 | 317.8 | 1,348.3 | 1,258.1 | |||||||||||
Operating income | 87.3 | 80.6 | 309.7 | 312.9 | |||||||||||
Other expense: | |||||||||||||||
Interest expense | (19.8 | ) | (19.0 | ) | (76.3 | ) | (74.7 | ) | |||||||
Other, net | (7.6 | ) | (0.1 | ) | (10.2 | ) | (0.6 | ) | |||||||
Income before income taxes | 59.9 | 61.5 | 223.2 | 237.6 | |||||||||||
Income tax expense | 18.1 | 61.1 | 66.9 | 128.6 | |||||||||||
Net income | $ | 41.8 | $ | 0.4 | $ | 156.3 | $ | 109.0 | |||||||
Income per share: | |||||||||||||||
Basic | $ | 1.23 | $ | 0.01 | $ | 4.62 | $ | 3.24 | |||||||
Diluted | $ | 1.22 | $ | 0.01 | $ | 4.58 | $ | 3.21 | |||||||
Weighted-average common shares outstanding: | |||||||||||||||
Basic | 33.9 | 33.6 | 33.8 | 33.6 | |||||||||||
Diluted | 34.1 | 34.0 | 34.1 | 34.0 | |||||||||||
Reportable Segments | |||||||||||||||
Net sales: | |||||||||||||||
Network & Security Solutions | $ | 1,117.9 | $ | 1,050.9 | $ | 4,347.0 | $ | 4,114.4 | |||||||
Electrical & Electronic Solutions | 571.3 | 581.6 | 2,342.7 | 2,225.5 | |||||||||||
Utility Power Solutions | 429.9 | 381.3 | 1,710.5 | 1,587.5 | |||||||||||
$ | 2,119.1 | $ | 2,013.8 | $ | 8,400.2 | $ | 7,927.4 | ||||||||
Operating income: | |||||||||||||||
Network & Security Solutions | $ | 77.6 | $ | 68.4 | $ | 272.2 | $ | 262.6 | |||||||
Electrical & Electronic Solutions | 31.2 | 30.0 | 132.3 | 114.3 | |||||||||||
Utility Power Solutions | 21.2 | 15.8 | 75.4 | 73.1 | |||||||||||
Corporate | (42.7 | ) | (33.6 | ) | (170.2 | ) | (137.1 | ) | |||||||
$ | 87.3 | $ | 80.6 | $ | 309.7 | $ | 312.9 | ||||||||
ANIXTER INTERNATIONAL INC. | |||||||
Condensed Consolidated Balance Sheets | |||||||
(Unaudited) | |||||||
December 28, 2018 | December 29, 2017 | ||||||
(In millions) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 81.0 | $ | 116.0 | |||
Accounts receivable, net | 1,600.0 | 1,434.2 | |||||
Inventories | 1,440.4 | 1,238.7 | |||||
Other current assets | 50.6 | 44.9 | |||||
Total current assets | 3,172.0 | 2,833.8 | |||||
Property and equipment, net | 163.3 | 154.3 | |||||
Goodwill | 832.0 | 778.1 | |||||
Intangible assets, net | 392.9 | 378.8 | |||||
Other assets | 92.9 | 107.2 | |||||
Total assets | $ | 4,653.1 | $ | 4,252.2 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 1,320.0 | $ | 1,081.6 | |||
Accrued expenses | 309.0 | 269.2 | |||||
Total current liabilities | 1,629.0 | 1,350.8 | |||||
Long-term debt | 1,251.8 | 1,247.9 | |||||
Other liabilities | 201.9 | 194.5 | |||||
Total liabilities | 3,082.7 | 2,793.2 | |||||
Total stockholders' equity | 1,570.4 | 1,459.0 | |||||
Total liabilities and stockholders' equity | $ | 4,653.1 | $ | 4,252.2 |
ANIXTER INTERNATIONAL INC. | |||||||
Condensed Consolidated Statements of Cash Flows (Unaudited) | |||||||
Twelve Months Ended | |||||||
December 28, 2018 | December 29, 2017 | ||||||
(In millions) | |||||||
Operating activities: | |||||||
Net income | $ | 156.3 | $ | 109.0 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Loss on extinguishment of debt | 4.6 | — | |||||
Depreciation | 31.7 | 28.2 | |||||
Amortization of intangible assets | 37.3 | 36.1 | |||||
Stock-based compensation | 18.9 | 18.1 | |||||
Deferred income taxes | (1.6 | ) | 13.6 | ||||
Accretion of debt discount | 2.4 | 2.3 | |||||
Amortization of deferred financing costs | 1.6 | 2.2 | |||||
Pension plan contributions | (7.4 | ) | (27.4 | ) | |||
Pension plan expenses | 4.3 | 10.5 | |||||
Impact of tax legislation | (2.1 | ) | 35.6 | ||||
Impairment of intangible assets | — | 5.7 | |||||
Changes in current assets and liabilities, net | (102.0 | ) | (45.5 | ) | |||
Other, net | (6.3 | ) | (4.6 | ) | |||
Net cash provided by operating activities | 137.7 | 183.8 | |||||
Investing activities: | |||||||
Acquisitions of businesses, net of cash acquired | (150.1 | ) | — | ||||
Capital expenditures, net | (42.4 | ) | (41.1 | ) | |||
Other | 9.1 | — | |||||
Net cash used in investing activities | (183.4 | ) | (41.1 | ) | |||
Financing activities: | |||||||
Proceeds from borrowings | 3,192.4 | 1,843.3 | |||||
Repayments of borrowings | (3,082.4 | ) | (1,884.0 | ) | |||
Retirement of Notes due 2019 | (353.9 | ) | — | ||||
Proceeds from issuance of Notes due 2025 | 246.9 | — | |||||
Repayments of Canadian term loan | — | (100.2 | ) | ||||
Deferred financing costs | (2.9 | ) | — | ||||
Proceeds from stock options exercised | 1.5 | 5.0 | |||||
Other, net | — | (0.2 | ) | ||||
Net cash provided by (used in) financing activities | 1.6 | (136.1 | ) | ||||
(Decrease) increase in cash and cash equivalents | (44.1 | ) | 6.6 | ||||
Effect of exchange rate changes on cash balances | 9.1 | (5.7 | ) | ||||
Cash and cash equivalents at beginning of period | 116.0 | 115.1 | |||||
Cash and cash equivalents at end of period | $ | 81.0 | $ | 116.0 |
ANIXTER INTERNATIONAL INC. | ||||||||||||||||||||||||||||||||
Financial Measures That Supplement U.S. GAAP (Unaudited) | ||||||||||||||||||||||||||||||||
Fourth Quarter 2018 Sales Growth Trends | ||||||||||||||||||||||||||||||||
Q4 2018 | Q4 2017 | |||||||||||||||||||||||||||||||
(In millions) | As Reported | Foreign Exchange Impact | Copper Impact | As Adjusted | As Reported | Acquisitions Impact | Adjusted for Acquisitions | Organic Growth/ (Decline) | ||||||||||||||||||||||||
Network & Security Solutions | ||||||||||||||||||||||||||||||||
North America | $ | 820.0 | $ | 3.7 | $ | — | $ | 823.7 | $ | 809.0 | $ | — | $ | 809.0 | 1.8 | % | ||||||||||||||||
EMEA | 99.5 | 2.5 | — | 102.0 | 93.3 | 0.7 | 94.0 | 8.5 | % | |||||||||||||||||||||||
Emerging Markets | 198.4 | 5.8 | — | 204.2 | 148.6 | 27.7 | 176.3 | 15.9 | % | |||||||||||||||||||||||
NSS | $ | 1,117.9 | $ | 12.0 | $ | — | $ | 1,129.9 | $ | 1,050.9 | $ | 28.4 | $ | 1,079.3 | 4.7 | % | ||||||||||||||||
Electrical & Electronic Solutions | ||||||||||||||||||||||||||||||||
North America | $ | 443.3 | $ | 2.8 | $ | 6.3 | $ | 452.4 | $ | 452.3 | $ | — | $ | 452.3 | — | % | ||||||||||||||||
EMEA | 58.6 | 1.8 | 0.9 | 61.3 | 71.3 | — | 71.3 | (14.0 | )% | |||||||||||||||||||||||
Emerging Markets | 69.4 | 1.1 | 0.6 | 71.1 | 58.0 | — | 58.0 | 22.6 | % | |||||||||||||||||||||||
EES | $ | 571.3 | $ | 5.7 | $ | 7.8 | $ | 584.8 | $ | 581.6 | $ | — | $ | 581.6 | 0.5 | % | ||||||||||||||||
Utility Power Solutions | ||||||||||||||||||||||||||||||||
North America | $ | 429.9 | $ | 1.8 | $ | 0.2 | $ | 431.9 | $ | 381.3 | $ | — | $ | 381.3 | 13.3 | % | ||||||||||||||||
UPS | $ | 429.9 | $ | 1.8 | $ | 0.2 | $ | 431.9 | $ | 381.3 | $ | — | $ | 381.3 | 13.3 | % | ||||||||||||||||
Total | $ | 2,119.1 | $ | 19.5 | $ | 8.0 | $ | 2,146.6 | $ | 2,013.8 | $ | 28.4 | $ | 2,042.2 | 5.1 | % | ||||||||||||||||
Geographic Sales | ||||||||||||||||||||||||||||||||
North America | $ | 1,693.2 | $ | 8.3 | $ | 6.5 | $ | 1,708.0 | $ | 1,642.6 | $ | — | $ | 1,642.6 | 4.0 | % | ||||||||||||||||
EMEA | 158.1 | 4.3 | 0.9 | 163.3 | 164.6 | 0.7 | 165.3 | (1.2 | )% | |||||||||||||||||||||||
Emerging Markets | 267.8 | 6.9 | 0.6 | 275.3 | 206.6 | 27.7 | 234.3 | 17.5 | % | |||||||||||||||||||||||
Total | $ | 2,119.1 | $ | 19.5 | $ | 8.0 | $ | 2,146.6 | $ | 2,013.8 | $ | 28.4 | $ | 2,042.2 | 5.1 | % | ||||||||||||||||
Note: There were 62 billing days in the fourth quarter of 2018 and 2017. Adjustment for billing days unnecessary. |
ANIXTER INTERNATIONAL INC. | ||||||||||||||||||||||||||||||||
Financial Measures That Supplement U.S. GAAP (Unaudited) | ||||||||||||||||||||||||||||||||
December Year-to-Date 2018 Sales Growth Trends | ||||||||||||||||||||||||||||||||
YTD 2018 | YTD 2017 | |||||||||||||||||||||||||||||||
(In millions) | As Reported | Foreign Exchange Impact | Copper Impact | As Adjusted | As Reported | Acquisitions Impact | Adjusted for Acquisitions | Organic Growth/ (Decline) | ||||||||||||||||||||||||
Network & Security Solutions | ||||||||||||||||||||||||||||||||
North America | $ | 3,295.4 | $ | 0.6 | $ | — | $ | 3,296.0 | $ | 3,212.6 | $ | — | $ | 3,212.6 | 2.6 | % | ||||||||||||||||
EMEA | 403.3 | (9.0 | ) | — | 394.3 | 361.6 | 1.9 | 363.5 | 8.5 | % | ||||||||||||||||||||||
Emerging Markets | 648.3 | 9.9 | — | 658.2 | 540.2 | 68.9 | 609.1 | 8.1 | % | |||||||||||||||||||||||
NSS | $ | 4,347.0 | $ | 1.5 | $ | — | $ | 4,348.5 | $ | 4,114.4 | $ | 70.8 | $ | 4,185.2 | 3.9 | % | ||||||||||||||||
Electrical & Electronic Solutions | ||||||||||||||||||||||||||||||||
North America | $ | 1,836.2 | $ | 0.4 | $ | (9.1 | ) | $ | 1,827.5 | $ | 1,743.9 | $ | — | $ | 1,743.9 | 4.8 | % | |||||||||||||||
EMEA | 257.0 | (8.4 | ) | (1.0 | ) | 247.6 | 264.7 | — | 264.7 | (6.5 | )% | |||||||||||||||||||||
Emerging Markets | 249.5 | 1.2 | (0.8 | ) | 249.9 | 216.9 | — | 216.9 | 15.2 | % | ||||||||||||||||||||||
EES | $ | 2,342.7 | $ | (6.8 | ) | $ | (10.9 | ) | $ | 2,325.0 | $ | 2,225.5 | $ | — | $ | 2,225.5 | 4.5 | % | ||||||||||||||
Utility Power Solutions | ||||||||||||||||||||||||||||||||
North America | $ | 1,710.5 | $ | 0.3 | $ | (0.3 | ) | $ | 1,710.5 | $ | 1,587.5 | $ | — | $ | 1,587.5 | 7.8 | % | |||||||||||||||
UPS | $ | 1,710.5 | $ | 0.3 | $ | (0.3 | ) | $ | 1,710.5 | $ | 1,587.5 | $ | — | $ | 1,587.5 | 7.8 | % | |||||||||||||||
Total | $ | 8,400.2 | $ | (5.0 | ) | $ | (11.2 | ) | $ | 8,384.0 | $ | 7,927.4 | $ | 70.8 | $ | 7,998.2 | 4.8 | % | ||||||||||||||
Geographic Sales | ||||||||||||||||||||||||||||||||
North America | $ | 6,842.1 | $ | 1.3 | $ | (9.4 | ) | $ | 6,834.0 | $ | 6,544.0 | $ | — | $ | 6,544.0 | 4.4 | % | |||||||||||||||
EMEA | 660.3 | (17.4 | ) | (1.0 | ) | 641.9 | 626.3 | 1.9 | 628.2 | 2.2 | % | |||||||||||||||||||||
Emerging Markets | 897.8 | 11.1 | (0.8 | ) | 908.1 | 757.1 | 68.9 | 826.0 | 9.9 | % | ||||||||||||||||||||||
Total | $ | 8,400.2 | $ | (5.0 | ) | $ | (11.2 | ) | $ | 8,384.0 | $ | 7,927.4 | $ | 70.8 | $ | 7,998.2 | 4.8 | % | ||||||||||||||
Note: There were 253 billing days December YTD in 2018 and 2017. Adjustment for billing days unnecessary. |
ANIXTER INTERNATIONAL INC. | ||||||||||||||||
Financial Measures That Supplement U.S. GAAP (Unaudited) - continued | ||||||||||||||||
(In millions, except per share amounts) | Positive (Negative) impact | |||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||
December 28, 2018 | December 29, 2017 | December 28, 2018 | December 29, 2017 | |||||||||||||
Items impacting comparability of results: | ||||||||||||||||
Items impacting operating expense and operating income: | ||||||||||||||||
Amortization of intangible assets | $ | (8.7 | ) | $ | (9.0 | ) | $ | (37.3 | ) | $ | (36.1 | ) | ||||
Restructuring charge | — | — | (9.4 | ) | — | |||||||||||
Acquisition and integration costs | — | (1.5 | ) | (2.9 | ) | (2.3 | ) | |||||||||
CEO retirement agreement expense | — | — | (2.6 | ) | — | |||||||||||
U.K. facility relocation costs | (0.2 | ) | — | (1.0 | ) | — | ||||||||||
Impairment of intangible assets | — | (5.7 | ) | — | (5.7 | ) | ||||||||||
Total of items impacting operating expense and operating income | $ | (8.9 | ) | $ | (16.2 | ) | $ | (53.2 | ) | $ | (44.1 | ) | ||||
Items impacting other expenses: | ||||||||||||||||
Loss on extinguishment of debt | (4.6 | ) | — | (4.6 | ) | — | ||||||||||
Total of items impacting other expenses | $ | (4.6 | ) | $ | — | $ | (4.6 | ) | $ | — | ||||||
Total of items impacting pre-tax income | $ | (13.5 | ) | $ | (16.2 | ) | $ | (57.8 | ) | $ | (44.1 | ) | ||||
Items impacting income taxes: | ||||||||||||||||
Tax impact of items impacting pre-tax income above | $ | 1.4 | $ | 5.7 | $ | 12.6 | $ | 14.8 | ||||||||
Transition tax on deferred foreign income | 2.8 | (50.0 | ) | 2.8 | (50.0 | ) | ||||||||||
Rate change impact of net deferred tax liability | (0.7 | ) | 14.4 | (0.7 | ) | 14.4 | ||||||||||
Reversal of deferred income tax valuation allowances | (0.4 | ) | — | 1.4 | — | |||||||||||
Tax expense related to domestic permanent tax differences | — | — | (0.7 | ) | — | |||||||||||
Tax expense related to prior year tax positions | (0.2 | ) | (1.3 | ) | (0.1 | ) | (1.3 | ) | ||||||||
Total of items impacting income taxes | $ | 2.9 | $ | (31.2 | ) | $ | 15.3 | $ | (22.1 | ) | ||||||
Net income impact of these items | $ | (10.6 | ) | $ | (47.4 | ) | $ | (42.5 | ) | $ | (66.2 | ) | ||||
Diluted EPS impact of these items | $ | (0.31 | ) | $ | (1.40 | ) | $ | (1.25 | ) | $ | (1.95 | ) | ||||
U.S. GAAP to Non-GAAP Net Income and EPS Reconciliation: | ||||||||||||||||
Net income – U.S. GAAP | $ | 41.8 | $ | 0.4 | $ | 156.3 | $ | 109.0 | ||||||||
Items impacting net income | 10.6 | 47.4 | 42.5 | 66.2 | ||||||||||||
Net income – Non-GAAP | $ | 52.4 | $ | 47.8 | $ | 198.8 | $ | 175.2 | ||||||||
Diluted EPS – U.S. GAAP | $ | 1.22 | $ | 0.01 | $ | 4.58 | $ | 3.21 | ||||||||
Diluted EPS impact of these items | 0.31 | 1.40 | 1.25 | 1.95 | ||||||||||||
Diluted EPS – Non-GAAP | $ | 1.53 | $ | 1.41 | $ | 5.83 | $ | 5.16 | ||||||||
ANIXTER INTERNATIONAL INC. | ||||||||||||||||||||
Financial Measures That Supplement U.S. GAAP (Unaudited) - continued | ||||||||||||||||||||
Items Impacting Comparability of Operating Income by Segment | Three Months Ended December 28, 2018 | |||||||||||||||||||
(In millions) | NSS | EES | UPS | Corporate | Total | |||||||||||||||
Operating income - U.S. GAAP | $ | 77.6 | $ | 31.2 | $ | 21.2 | $ | (42.7 | ) | $ | 87.3 | |||||||||
Operating margin - U.S. GAAP | 6.9 | % | 5.5 | % | 4.9 | % | nm | 4.1 | % | |||||||||||
Total of items impacting operating income | $ | 4.1 | $ | 1.5 | $ | 3.4 | $ | (0.1 | ) | $ | 8.9 | |||||||||
Adjusted operating income - Non-GAAP | $ | 81.7 | $ | 32.7 | $ | 24.6 | $ | (42.8 | ) | $ | 96.2 | |||||||||
Adjusted operating margin - Non-GAAP | 7.3 | % | 5.7 | % | 5.7 | % | nm | 4.5 | % | |||||||||||
Items Impacting Comparability of Operating Income by Segment | Twelve Months Ended December 28, 2018 | |||||||||||||||||||
NSS | EES | UPS | Corporate | Total | ||||||||||||||||
Operating income - U.S. GAAP | $ | 272.2 | $ | 132.3 | $ | 75.4 | $ | (170.2 | ) | $ | 309.7 | |||||||||
Operating margin - U.S. GAAP | 6.3 | % | 5.6 | % | 4.4 | % | nm | 3.7 | % | |||||||||||
Total of items impacting operating income | $ | 21.9 | $ | 9.1 | $ | 14.0 | $ | 8.2 | $ | 53.2 | ||||||||||
Adjusted operating income - Non-GAAP | $ | 294.1 | $ | 141.4 | $ | 89.4 | $ | (162.0 | ) | $ | 362.9 | |||||||||
Adjusted operating margin - Non-GAAP | 6.8 | % | 6.0 | % | 5.2 | % | nm | 4.3 | % | |||||||||||
nm - not meaningful |
Items Impacting Comparability of Operating Income by Segment | Three Months Ended December 29, 2017 | |||||||||||||||||||
(In millions) | NSS | EES | UPS | Corporate | Total | |||||||||||||||
Operating income - U.S. GAAP | $ | 68.4 | $ | 30.0 | $ | 15.8 | $ | (33.6 | ) | $ | 80.6 | |||||||||
Operating margin - U.S. GAAP | 6.5 | % | 5.2 | % | 4.1 | % | nm | 4.0 | % | |||||||||||
Total of items impacting operating income | $ | 9.3 | $ | 2.0 | $ | 3.4 | $ | 1.5 | $ | 16.2 | ||||||||||
Adjusted operating income - Non-GAAP | $ | 77.7 | $ | 32.0 | $ | 19.2 | $ | (32.1 | ) | $ | 96.8 | |||||||||
Adjusted operating margin - Non-GAAP | 7.4 | % | 5.5 | % | 5.0 | % | nm | 4.8 | % | |||||||||||
Items Impacting Comparability of Operating Income by Segment | Twelve Months Ended December 29, 2017 | |||||||||||||||||||
NSS | EES | UPS | Corporate | Total | ||||||||||||||||
Operating income - U.S. GAAP | $ | 262.6 | $ | 114.3 | $ | 73.1 | $ | (137.1 | ) | $ | 312.9 | |||||||||
Operating margin - U.S. GAAP | 6.4 | % | 5.1 | % | 4.6 | % | nm | 3.9 | % | |||||||||||
Total of items impacting operating income | $ | 20.1 | $ | 7.9 | $ | 13.4 | $ | 2.7 | $ | 44.1 | ||||||||||
Adjusted operating income - Non-GAAP | $ | 282.7 | $ | 122.2 | $ | 86.5 | $ | (134.4 | ) | $ | 357.0 | |||||||||
Adjusted operating margin - Non-GAAP | 6.9 | % | 5.5 | % | 5.4 | % | nm | 4.5 | % | |||||||||||
nm - not meaningful |
ANIXTER INTERNATIONAL INC. | ||||||||||||||||
Financial Measures That Supplement U.S. GAAP (Unaudited) - continued | ||||||||||||||||
2018 and 2017 Effective Tax Rate – U.S. GAAP and Non-GAAP | ||||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||
(In millions) | December 28, 2018 | December 29, 2017 | December 28, 2018 | December 29, 2017 | ||||||||||||
Income before taxes – U.S. GAAP | $ | 59.9 | $ | 61.5 | $ | 223.2 | $ | 237.6 | ||||||||
Income tax expense – U.S. GAAP | $ | 18.1 | $ | 61.1 | $ | 66.9 | $ | 128.6 | ||||||||
Effective income tax rate | 30.2 | % | 99.4 | % | 30.0 | % | 54.1 | % | ||||||||
Total of items impacting pre-tax income above | $ | 13.5 | $ | 16.2 | $ | 57.8 | $ | 44.1 | ||||||||
Total of items impacting income taxes above | $ | 2.9 | $ | (31.2 | ) | $ | 15.3 | $ | (22.1 | ) | ||||||
Income before income taxes – Non-GAAP | $ | 73.4 | $ | 77.7 | $ | 281.0 | $ | 281.7 | ||||||||
Income tax expense – Non-GAAP | $ | 21.0 | $ | 29.9 | $ | 82.2 | $ | 106.5 | ||||||||
Adjusted effective income tax rate | 28.6 | % | 38.5 | % | 29.3 | % | 37.8 | % | ||||||||
2018 EBITDA and Adjusted EBITDA by Segment | ||||||||||||||||||||
Three Months Ended December 28, 2018 | ||||||||||||||||||||
(In millions) | NSS | EES | UPS | Corporate | Total | |||||||||||||||
Net income | $ | 77.6 | $ | 31.2 | $ | 21.2 | $ | (88.2 | ) | $ | 41.8 | |||||||||
Interest expense | — | — | — | 19.8 | 19.8 | |||||||||||||||
Income taxes | — | — | — | 18.1 | 18.1 | |||||||||||||||
Depreciation | 1.2 | 0.6 | 0.7 | 5.9 | 8.4 | |||||||||||||||
Amortization of intangible assets | 4.0 | 1.3 | 3.4 | — | 8.7 | |||||||||||||||
EBITDA | $ | 82.8 | $ | 33.1 | $ | 25.3 | $ | (44.4 | ) | $ | 96.8 | |||||||||
EBITDA leverage | 2.2x | nm | 2.1x | nm | 0.1x | |||||||||||||||
EBITDA as a % of sales | 7.4 | % | 5.8 | % | 5.9 | % | nm | 4.6 | % | |||||||||||
Foreign exchange and other non-operating (income) | $ | — | $ | — | $ | — | $ | 7.6 | $ | 7.6 | ||||||||||
Stock-based compensation | 0.6 | 0.3 | 0.2 | 2.8 | 3.9 | |||||||||||||||
Acquisition and integration costs | 0.1 | — | — | (0.1 | ) | — | ||||||||||||||
U.K. facility relocation costs | — | 0.2 | — | — | 0.2 | |||||||||||||||
Adjusted EBITDA | $ | 83.5 | $ | 33.6 | $ | 25.5 | $ | (34.1 | ) | $ | 108.5 | |||||||||
Adjusted EBITDA leverage | 0.8x | nm | 1.9x | nm | 0.0x | |||||||||||||||
Adjusted EBITDA as a % of sales | 7.5 | % | 5.9 | % | 5.9 | % | nm | 5.1 | % | |||||||||||
Twelve Months Ended December 28, 2018 | ||||||||||||||||||||
NSS | EES | UPS | Corporate | Total | ||||||||||||||||
Net income | $ | 272.2 | $ | 132.3 | $ | 75.4 | $ | (323.6 | ) | $ | 156.3 | |||||||||
Interest expense | — | — | — | 76.3 | 76.3 | |||||||||||||||
Income taxes | — | — | — | 66.9 | 66.9 | |||||||||||||||
Depreciation | 3.8 | 2.4 | 3.6 | 21.9 | 31.7 | |||||||||||||||
Amortization of intangible assets | 17.0 | 7.0 | 13.3 | — | 37.3 | |||||||||||||||
EBITDA | $ | 293.0 | $ | 141.7 | $ | 92.3 | $ | (158.5 | ) | $ | 368.5 | |||||||||
EBITDA leverage | 0.8x | 2.5x | 0.3x | nm | -0.4x | |||||||||||||||
EBITDA as a % of sales | 6.7 | % | 6.0 | % | 5.4 | % | nm | 4.4 | % | |||||||||||
Foreign exchange and other non-operating expense | $ | — | $ | — | $ | — | $ | 10.2 | $ | 10.2 | ||||||||||
Stock-based compensation | 1.8 | 1.4 | 0.6 | 15.1 | 18.9 | |||||||||||||||
Restructuring charge | 2.1 | 1.3 | 0.7 | 5.3 | 9.4 | |||||||||||||||
Acquisition and integration costs | 2.6 | — | — | 0.3 | 2.9 | |||||||||||||||
U.K. facility relocation costs | 0.2 | 0.8 | — | — | 1.0 | |||||||||||||||
Adjusted EBITDA | $ | 299.7 | $ | 145.2 | $ | 93.6 | $ | (127.6 | ) | $ | 410.9 | |||||||||
Adjusted EBITDA leverage | 0.7x | 2.9x | 0.2x | nm | 0.3x | |||||||||||||||
Adjusted EBITDA as a % of sales | 6.9 | % | 6.2 | % | 5.5 | % | nm | 4.9 | % | |||||||||||
nm - not meaningful |
ANIXTER INTERNATIONAL INC. | ||||||||||||||||||||
Financial Measures That Supplement U.S. GAAP (Unaudited) - continued | ||||||||||||||||||||
2017 EBITDA and Adjusted EBITDA by Segment | ||||||||||||||||||||
Three Months Ended December 29, 2017 | ||||||||||||||||||||
(In millions) | NSS | EES | UPS | Corporate | Total | |||||||||||||||
Net income | $ | 68.4 | $ | 30.0 | $ | 15.8 | $ | (113.8 | ) | $ | 0.4 | |||||||||
Interest expense | — | — | — | 19.0 | 19.0 | |||||||||||||||
Income taxes | — | — | — | 61.1 | 61.1 | |||||||||||||||
Depreciation | 0.9 | 0.7 | 0.8 | 4.3 | 6.7 | |||||||||||||||
Amortization of intangible assets | 3.6 | 2.0 | 3.4 | — | 9.0 | |||||||||||||||
EBITDA | $ | 72.9 | $ | 32.7 | $ | 20.0 | $ | (29.4 | ) | $ | 96.2 | |||||||||
EBITDA leverage | -10.2x | 2.0x | 0.6x | nm | 0.5x | |||||||||||||||
EBITDA as a % of sales | 6.9 | % | 5.6 | % | 5.3 | % | nm | 4.8 | % | |||||||||||
Foreign exchange and other non-operating expense | $ | — | $ | — | $ | — | $ | 0.1 | $ | 0.1 | ||||||||||
Stock-based compensation | 0.8 | 0.3 | 0.5 | 3.2 | 4.8 | |||||||||||||||
Impairment of intangible assets | 5.7 | — | — | — | 5.7 | |||||||||||||||
Acquisition and integration costs | — | — | — | 1.5 | 1.5 | |||||||||||||||
Adjusted EBITDA | $ | 79.4 | $ | 33.0 | $ | 20.5 | $ | (24.6 | ) | $ | 108.3 | |||||||||
Adjusted EBITDA leverage | -2.9x | 2.0x | 0.7x | nm | 0.9x | |||||||||||||||
Adjusted EBITDA as a % of sales | 7.6 | % | 5.7 | % | 5.4 | % | nm | 5.4 | % | |||||||||||
Twelve Months Ended December 29, 2017 | ||||||||||||||||||||
NSS | EES | UPS | Corporate | Total | ||||||||||||||||
Net income | $ | 262.6 | $ | 114.3 | $ | 73.1 | $ | (341.0 | ) | $ | 109.0 | |||||||||
Interest expense | — | — | — | 74.7 | 74.7 | |||||||||||||||
Income taxes | — | — | — | 128.6 | 128.6 | |||||||||||||||
Depreciation | 3.1 | 2.4 | 3.9 | 18.8 | 28.2 | |||||||||||||||
Amortization of intangible assets | 14.4 | 8.4 | 13.3 | — | 36.1 | |||||||||||||||
EBITDA | $ | 280.1 | $ | 125.1 | $ | 90.3 | $ | (118.9 | ) | $ | 376.6 | |||||||||
EBITDA leverage | -5.9x | 2.6x | 1.8x | nm | 2.6x | |||||||||||||||
EBITDA as a % of sales | 6.8 | % | 5.6 | % | 5.7 | % | nm | 4.8 | % | |||||||||||
Foreign exchange and other non-operating expense | $ | — | $ | — | $ | — | $ | 0.6 | $ | 0.6 | ||||||||||
Stock-based compensation | 2.3 | 1.3 | 1.7 | 12.8 | 18.1 | |||||||||||||||
Impairment of intangible assets | 5.7 | — | — | — | 5.7 | |||||||||||||||
Restructuring charge | — | (0.5 | ) | 0.1 | 0.4 | — | ||||||||||||||
Acquisition and integration costs | — | — | — | 2.3 | 2.3 | |||||||||||||||
Adjusted EBITDA | $ | 288.1 | $ | 125.9 | $ | 92.1 | $ | (102.8 | ) | $ | 403.3 | |||||||||
Adjusted EBITDA leverage | -5.5x | 1.7x | 1.5x | nm | -0.1x | |||||||||||||||
Adjusted EBITDA as a % of sales | 7.0 | % | 5.7 | % | 5.8 | % | nm | 5.1 | % | |||||||||||
nm - not meaningful |
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