GLENVIEW, Ill.—Anixter International Inc. (NYSE: AXE) today reported sales of $1.67 billion for the quarter ended October 3, 2014, a 7.0 percent increase compared to the year-ago quarter. Excluding the impact of the following items, organic sales increased by 5.5 percent and approximately 4 percent on a per day basis, year-over-year.
Sequentially, sales increased by 5.1 percent on a reported basis and approximately 3.4 percent on a per day basis.
Operating income adjusted for the Tri-Ed acquisition costs in the current quarter was $99.7 million, an increase of 7.9 percent from operating income of $92.4 million in the year-ago quarter. Further excluding the negative $0.7 million impact of the year-over-year drop in copper prices, the $0.4 million unfavorable foreign exchange impact, and $1.4 million of acquisition-related operating profits, adjusted operating income would have increased by 7.6 percent. Including the Tri-Ed acquisition transaction costs of $5.7 million, current quarter reported operating income was $94.0 million.
Adjusted operating margin of 6.0 percent compares to 5.9 percent in the year-ago quarter and 5.8 percent in the prior quarter. The increase in operating margin was driven by higher volume and disciplined expense management. Including the negative impact of expenses related to the Tri-Ed acquisition, reported operating margin was 5.6 percent.
Adjusted net income of $56.3 million increased 11.7 percent from $50.5 million in the year-ago quarter. Including the negative impact of $6.0 million ($5.0 million, net of tax) of transaction and financing costs related to the Tri-Ed acquisition, the tax benefit of $1.9 million related to closing prior tax years and a $0.7 million additional tax expense to forecast an effective tax rate of 34.9 percent for the full year, reported net income was $52.5 million versus $53.8 million in the prior year. Adjusted diluted earnings per share of $1.69 increased 11.2 percent from $1.52 in the year ago quarter. Including the negative impact of $0.12 for the aforementioned items, reported diluted earnings per share was $1.57 versus $1.62 in the prior year.
“We were pleased to deliver over 10 percent revenue growth in North America, reflecting 9 percent organic revenue growth, driven by growth in all segments and increased investments by our core customers on capital projects,” commented Bob Eck, President and CEO. “In addition, the acquisition of Tri-Ed, a leading independent security company, will enable us to provide more complete solutions to our customers, adding intrusion, fire and life safety to our existing video surveillance and access control platform. With this acquisition, and the re-acceleration of our legacy security business, we enter the fourth quarter energized by strong growth trends across our North America businesses.”
“With the solid momentum we experienced in the third quarter across our North American business, we believe we are positioned for organic sales growth per day to continue to accelerate in the fourth quarter of 2014. While global markets remain uneven, we believe we are well positioned in our European and Emerging Markets geographies. For the full year, we continue to expect our organic sales growth on a days adjusted basis to be at the low end of the mid-single digit growth range.” Eck concluded, “Looking ahead, we believe our strong global presence and strategic initiatives will enable us to consistently gain market share and exceed market growth. We will continue to invest in strategic growth, including security, emerging markets, industrial communication and control, in-building wireless and e-commerce.”
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