Anixter International Inc. Posts Record First Quarter Sales

GLENVIEW, Ill. — Anixter International Inc. (NYSE: AXE) today reported record first quarter sales of $1.39 billion for the quarter ended April 3, 2015, an 8.7 percent increase compared to the year-ago quarter. The current quarter and year-ago quarter each had 65 billing days. The favorable impact from the Tri-Ed acquisition was partially offset by macroeconomic headwinds including the sharply stronger US dollar and weaker average copper prices. As a result, organic sales increased by 2.2 percent year-over-year.

On February 12, 2015, Anixter announced that it entered into a definitive agreement to sell the OEM Supply – Fasteners (“Fasteners”) segment to American Industrial Partners for $380 million, with an expected closing in the second quarter of 2015. All commentary in this release reflects continuing operations unless otherwise noted.

EBITDA of $65.5 million, or 4.7 percent of sales, compares to $66.7 million, or 5.2 percent of sales, in the prior year quarter. The decline in margin was caused by the mix impact from strong growth in security business, unfavorable impacts of foreign exchange and lower average copper prices, and competitive pricing pressure in the market.

Net income from continuing operations of $26.5 million compares to $37.7 million in the prior year quarter. The currency, copper and pricing impacts mentioned above account for nearly half of the decline, and higher depreciation, interest and amortization resulting from the Tri-Ed acquisition accounting for the remainder of the decrease. This results in an adjusted diluted earnings per share from continuing operations of $0.81 compared to $1.14 in the prior year quarter.

“While we delivered strong growth in sales and profits in our security business, overall the quarter was challenging. Enterprise Cabling & Security Solutions delivered its third consecutive quarter of strong revenue performance; however, operating performance was negatively impacted by competitive margin pressure. While margin was solid in our Wire & Cable segment, our sales growth was negatively affected by copper and slower industrial growth, especially related to the oil and gas sector in Canada. We delivered our strongest organic growth in the US; however, North America was significantly impacted by the weaker Canadian macro environment,” commented Bob Eck, President and CEO.

“Importantly, we made significant strategic progress in the quarter as we began to sharpen our focus on our cabling and security businesses and improve the return on capital. As part of this effort, the announced sale of our Fasteners segment enables us to better direct resources toward areas that will maximize shareholder value in both the near term and the long term.”


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