Driven By Power Solutions Acquisition, Anixter Reports 1Q Sales Up 31%

GLENVIEW, Ill.—Anixter International Inc. (NYSE: AXE) today reported quarterly sales of $1.82 billion for the quarter ended April 1, 2016, a 31.1 percent increase compared to the year-ago quarter. The current and year-ago quarters each had 65 billing days. Excluding the impact of the following items, organic sales were flat year-over-year:

$482.6 million favorable impact from the acquisition of Power Solutions
$20.4 million unfavorable impact from the lower average price of copper
$31.7 million unfavorable impact from the fluctuation in foreign currencies

Adjusted net income of $30.6 million compares to $30.2 million in the prior year quarter.

Electrical & Electronic Solutions (“EES”) sales totalled $506.0 million, up up $66 million from $440.8 million in the prior year period, a 14.8 percent increase. EES organic sales decreased by 7.1 percent, reflecting current weak trends with industrial customers and relatively flat performance with OEM customers.

EES adjusted EBITDA of $25.4 million compares to $37.7 million in the prior year quarter. The corresponding adjusted EBITDA margin of 5.0 percent compares to 8.6 percent. Approximately two-thirds of the decline in adjusted EBITDA margin was caused by lower copper pricing and weakness in the industrial sector, with the balance due to the acquisition of the low voltage Power Solutions business.

“Reflecting the underlying strength in our network infrastructure business, we delivered organic sales growth of 4.1% in our Network and Security Solutions segment, driven by an acceleration in our North America and emerging markets geographies,” commented Bob Eck, President and CEO. “In our EES and UPS (UPST) segments, the combined effects of the weaker industrial economy and lower commodity prices on a year-over-year basis continue to be headwinds. While the industrial landscape shows signs of stabilizing, we maintain our cautious outlook for near term improvement in market conditions and consequently will continue to focus on margin improvement, ongoing expense discipline and working capital efficiencies.”

“Reflecting diverging trends across our business, we continue to experience softer trends in our EES segment related to industrial and manufacturing end market exposure, resulting in a more cautious outlook on this portion of the business,” commented Bob Eck. “Combining our more positive outlook in NSS with our more conservative outlook in our EES and UPS segments, we continue to expect full year 2016 organic sales growth from continuing operations in the negative 2 percent to positive 2 percent range.”


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