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|Anixter International Inc. Reports First Quarter Net Income From Continuing Operations of $1.62 Per Diluted Share, Including $0.25 Per Diluted Share From a Net Tax Benefit, on Sales of $1.52 Billion|
GLENVIEW, Ill., April 24, 2012 /PRNewswire via COMTEX/ --Anixter International Inc. (NYSE: AXE), a leading global distributor of communication and security products, electrical and electronic wire & cable, fasteners and other small parts, today reported results for the first quarter ended March 30, 2012.
First Quarter Highlights
First Quarter Sales Trends Commenting on first quarter sales trends, Robert Eck, President and CEO, stated, "After the expected slow start in both cabling businesses in the first two months of the quarter, sales and bookings improved nicely in the month of March, resulting in our ninth consecutive quarter of growth across the business. While our year-on-year growth rate slowed slightly for the full quarter due to a strong comparative period in the first quarter of 2011, combined with weaker project billings and unfavorable currency and copper effects, our momentum exiting the quarter was very solid."
"Our strategic growth initiatives combined with strong day-to-day execution continue to drive our success in each of our end markets around the world. As expected, these efforts have once again helped bolster our sales performance in Emerging Markets, which delivered the highest year-on-year organic sales growth rate among our geographic reporting segments at 7 percent," continued Eck. "Within our end markets, the OEM Supply business delivered the highest sales growth rate with 12 percent improvement year-on-year. Despite a slowdown in billings due to project delays in both cabling businesses, Electrical Wire & Cable and Enterprise Cabling delivered 6 percent and 3 percent organic sales growth, respectively."
First Quarter Operating Results "Despite a smaller revenue increase than prior quarters, our continued focus on cost management helped deliver strong operating leverage," commented Eck. "We delivered another quarter of positive sales growth in every region including Europe, which is worth noting given the very weak economic environment in that region. In addition, first quarter operating expenses of $262.5 million were 17.2 percent of sales compared to 17.8 percent in the prior year quarter. Excluding the impact of the restructuring charge in the prior year quarter and the negative $2.3 million impact of exchange rates, year-on-year operating expenses increased by only $8.9 million or 3.5 percent, on a 5.4 percent organic increase in sales, further demonstrating the leverage in our operating structure even in a lower growth quarter. Expense increases were primarily driven by higher benefit costs."
Company-wide operating margin improved to 5.7 percent from 5.3 percent in the year ago quarter, or 5.6 percent excluding the prior year European restructuring charge of $5.3 million. This performance resulted in an incremental operating profit leverage of 7 percent on the increased year-on-year sales for the quarter, excluding the prior year restructuring charge. Sequentially, operating margin decreased by 40 basis points primarily due to the seasonality of the Emerging Markets segment.
North America operating margin of 7.1 percent in the current quarter compares to 6.8 percent in the prior year quarter. The 30 basis point improvement was driven primarily by operating expense leverage resulting in 13 percent incremental operating profit leverage. Sequentially, operating margin was 10 basis points higher in the current quarter.
Europe operating margin of 1.3 percent in the current quarter reflected a 130 basis point improvement over the prior year quarter. However, this was down 50 basis points excluding the prior year first quarter restructuring charge. The impact of the weak economy on our cabling businesses could not be offset by strong growth in the OEM Supply end market. Sequentially, operating margin was 60 basis points lower on relatively flat sales.
Emerging Markets operating margin of 4.5 percent in the current quarter compares to 4.6 percent in the prior year quarter. Sequentially, operating margin declined by 300 basis points driven by the normal seasonal decline in revenue combined with strategic investments in the segment.
Cash Flow and Leverage "Due to a change in working capital requirements compared to the prior year and normal seasonality of our business, along with delays in project shipments, we once again consumed cash in the first quarter," commented Ted Dosch, Executive Vice President-Finance. "Going forward, our continued strong balance sheet and expected positive cash flows for the full year 2012, provides us the flexibility to support continued growth in the business while enabling us to pursue strategic acquisitions as they arise."
Key capital structure and credit-related statistics for the first quarter include:
Business Outlook Eck concluded, "Our outlook for 2012 remains positive, as expected sales growth should position us well to further leverage our global supply chain platform. While both the U.S. and global market growth rates are difficult to predict in the current economic climate, we believe that our strategic growth initiatives position us well to achieve continued year-on-year sales growth and operating leverage, while also expanding our leadership position within the industry. We expect our future growth to be fueled by adding new products and technologies to our portfolio; developing an end market presence in Electrical Wire & Cable and OEM Supply in countries where our current presence is large but limited primarily to the Enterprise Cabling and Security Solutions end market; and selectively expanding our geographic presence."
First Quarter Earnings Call Anixter will broadcast a conference call discussing these results at 9:30 am central time on Tuesday, April 24, 2012. The call will be Webcast by CCBN and can be accessed at the investor relations portion of Anixter's Website at www.anixter.com. The Webcast also will be available over CCBN's Investor Distribution Network to both institutional and individual investors. Individual investors can listen to the call through CCBN's individual investor center at www.companyboardroom.com, or by visiting any of the investor sites in CCBN's Individual Investor Network (such as America Online's Personal Finance Channel and Fidelity.com). Institutional investors can access the call via CCBN's password-protected event management site, StreetEvents (www.streetevents.com). The Webcast will be archived on all of these sites for 30 days.
About Anixter Anixter International is a leading global distributor of communication and security products, electrical and electronic wire & cable, fasteners and other small parts. The company adds value to the distribution process by providing its customers access to 1) innovative inventory management programs, 2) more than 450,000 products and over $1 billion in inventory, 3) approximately 225 warehouses with 7 million square feet of space, and 4) locations in over 260 cities in more than 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 news release that use such words as "believe," "expect," "intend," "anticipate," "contemplate," "estimate," "plan," "project," "should," "may," "will," or similar expressions are forward-looking statements. They are subject to a number of factors that could cause the company's actual results to differ materially from what is indicated here. These factors include general economic conditions, the level of customer demand particularly for capital projects in the markets we serve, changes 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, and risks associated with integration of acquired companies. 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 the company's Securities and Exchange Commission filings for more information.
Additional information about Anixter is available on the Internet at www.anixter.com
SOURCE Anixter International Inc.
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