<PAGE> 1
3
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
--- EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JULY 3, 1998
--- TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number 1-5989
ANIXTER INTERNATIONAL INC.
(Exact name of registrant as specified in its charter)
Delaware 94-1658138
- -------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4711 Golf Road
Skokie, Illinois 60076
--------------------------
(Address of principal executive offices and Zip Code)
Registrant's telephone number, including area code:(847) 677-2600
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
---- ----
At August 11, 1998 there were 44,621,513 shares of Common Stock, $1.00 par
value, of the registrant outstanding.
<PAGE> 2
PART I.
ITEM 1. FINANCIAL STATEMENTS
ANIXTER INTERNATIONAL INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATION
(UNAUDITED)
<TABLE>
<CAPTION>
(In millions, except per share amounts) 13 WEEKS ENDED 26 WEEKS ENDED
-------------------- ---------------------
JULY 3, JULY 4, JULY 3, JULY 4,
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Net sales $ 783.4 $ 682.6 $ 1,531.9 $ 1,341.3
Cost of goods sold 591.5 513.3 1,154.9 1,009.2
--------- -------- ---------- -----------
Gross profit 191.9 169.3 377.0 332.1
Operating expenses 160.7 141.9 316.4 278.0
Amortization of goodwill 1.7 1.5 3.3 3.1
--------- -------- ---------- -----------
Operating income 29.5 25.9 57.3 51.0
Interest expense and other, net (8.8) (7.2) (16.9) (14.6)
Gain on ANTEC investment 15.9 -- 24.3 2.2
--------- -------- ---------- -----------
Income before income taxes 36.6 18.7 64.7 38.6
Income tax expense 15.1 8.3 26.8 17.1
--------- -------- ---------- -----------
Income from continuing operations 21.5 10.4 37.9 21.5
Income from discontinued operations -- -- 11.1 --
--------- -------- ---------- -----------
Net income $ 21.5 $ 10.4 $ 49.0 $ 21.5
========= ======== ========== ===========
Basic and diluted income per common share:
Continuing operations $ .46 $ .22 $ .80 $ .45
Discontinued operations -- -- .24 --
--------- -------- ---------- -----------
Net income $ .46 $ .22 $ 1.04 $ .45
========= ======== ========== ===========
</TABLE>
See accompanying notes to the condensed financial statements.
2
<PAGE> 3
ANIXTER INTERNATIONAL INC.
CONDENSED CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
(In millions) JULY 3, JANUARY 2,
1998 1998
----------- --------
ASSETS (UNAUDITED)
<S> <C> <C>
Current assets:
Cash $ 12.7 $ 10.6
Accounts receivable (less allowances of $12.6 at
July 3, 1998 and $11.3 at January 2, 1998) 623.0 551.1
Inventories 450.5 440.7
Other current assets 10.5 11.6
-------- --------
Total current assets 1,096.7 1,014.0
Property and equipment, at cost 169.3 152.1
Accumulated depreciation (100.4) (87.8)
-------- --------
Net property and equipment 68.9 64.3
Goodwill (less accumulated amortization of $62.5
at July 3, 1998 and $59.2 at January 2, 1998) 232.2 203.1
Assets held for sale, net 4.9 20.6
Investment in ANTEC -- 112.0
Other assets 28.9 26.7
-------- --------
$1,431.6 $1,440.7
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 342.0 $ 324.3
Accrued expenses 103.9 110.3
Income taxes payable 3.0 13.5
-------- --------
Total current liabilities 448.9 448.1
Deferred taxes, net 25.0 33.4
Other liabilities 15.5 13.4
Long-term debt 487.5 468.8
-------- --------
Total liabilities 976.9 963.7
Stockholders' equity:
Common stock 45.0 47.3
Capital surplus 1.8 47.1
Retained earnings 438.9 389.9
Accumulated other comprehensive income (31.0) (7.3)
-------- --------
Total stockholders' equity 454.7 477.0
-------- --------
$1,431.6 $1,440.7
======== ========
</TABLE>
See accompanying notes to the condensed consolidated financial statements.
3
<PAGE> 4
ANIXTER INTERNATIONAL INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
(In millions)
<TABLE>
<CAPTION>
26 WEEKS ENDED
-----------------
JULY 3, JULY 4,
1998 1997
-------- --------
<S> <C> <C>
Operating activities:
Net income $ 49.0 $ 21.5
Adjustments to reconcile net income
to net cash (used for) provided by operating
activities from continuing operations:
Income from discontinued operations (11.1) --
Depreciation and amortization 15.6 15.8
Gain on ANTEC investment (24.3) (2.2)
Deferred income taxes 3.6 (2.8)
Changes in current assets and liabilities, net (75.0) (21.6)
Other, net .7 (.4)
------ ------
Net cash (used for) provided by operating
activities from continuing operations (41.5) 10.3
Investing activities:
Capital expenditures, net (17.2) (14.4)
Proceeds from sale of ANTEC 104.3 --
Business acquisition, net of cash acquired (38.2) (1.1)
------ ------
Net cash provided by (used for) investing activities
from continuing operations 48.9 (15.5)
Financing activities:
Proceeds from long-term borrowings 986.1 671.6
Repayment of long-term borrowings (966.9) (655.4)
Proceeds from issuance of common stock 3.0 .3
Purchases of treasury stock (50.6) (9.6)
Other, net (3.8) (2.9)
------ ------
Net cash (used for) provided by financing activities
from continuing operations (32.2) 4.0
Cash provided by discontinued operations 26.9 4.6
------ ------
Net increase in cash 2.1 3.4
Cash at the beginning of the year 10.6 18.2
------ ------
Cash at the end of the period $ 12.7 $ 21.6
====== ======
</TABLE>
See accompanying notes to the condensed consolidated financial statements.
4
<PAGE> 5
ANIXTER INTERNATIONAL INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION: The accompanying condensed consolidated financial
statements should be read in conjunction with the consolidated financial
statements included in Anixter International Inc.'s (Company) Annual Report on
Form 10-K for the year ended January 2, 1998. The condensed consolidated
financial information furnished herein reflects all adjustments (consisting of
normal recurring accruals) which are, in the opinion of management, necessary
for a fair presentation of the condensed consolidated financial statements for
the periods shown. The results of operations of any interim period are not
necessarily indicative of the results that may be expected for a full fiscal
year. Certain amounts for the prior year have been reclassified to conform to
the 1998 presentation.
COMPREHENSIVE INCOME: In 1998, the Company adopted Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income", (SFAS No. 130).
SFAS No. 130 requires companies to report all changes in equity during a period,
except those resulting from investment by owners, in a financial statement for
the period in which they are recognized. The Company has chosen to disclose
comprehensive income, which encompasses net income, foreign currency translation
adjustments and unrealized gains and losses on marketable equity securities, in
the year-end Consolidated Statement of Stockholders' Equity. The prior year has
been restated to conform to the SFAS No. 130 requirements.
5
<PAGE> 6
ANIXTER INTERNATIONAL INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 2. INCOME PER SHARE
<TABLE>
<CAPTION>
13 WEEKS ENDED 26 WEEKS ENDED
----------------- -----------------
(In millions, except per share amounts) JULY 3, JULY 4, JULY 3, JULY 4,
1998 1997 1998 1997
------- ------ ------ -------
<S> <C> <C> <C> <C>
Numerator:
Income from continuing operations $ 21.5 $ 10.4 $ 37.9 $ 21.5
====== ====== ====== ======
Denominator:
Basic common shares outstanding 46.3 47.3 46.8 47.6
Effect of dilutive securities:
Stock options and warrants .4 .2 .4 .2
------ ------ ------ ------
Diluted common shares outstanding 46.7 47.5 47.2 47.8
====== ====== ====== ======
Basic and diluted income per share
from continuing operations $ .46 $ .22 $ .80 $ .45
====== ====== ====== ======
</TABLE>
NOTE 3. COMPREHENSIVE INCOME
SFAS No. 130 establishes new rules for the reporting and display of
comprehensive income and its components; however, the adoption of this Statement
had no impact on the Company's net income or shareholder's equity. SFAS No. 130
requires unrealized gains or losses on the Company's marketable equity
securities and foreign currency translation adjustments, which prior to adoption
were reported separately in shareholder's equity, to be included in other
comprehensive income. Prior year financial statements have been reclassified to
conform to the requirements of SFAS No. 130.
For the 13 and 26 weeks ended July 3, 1998, total comprehensive income amounted
to $1.7 million and $25.3 million respectively. For the 13 and 26 weeks ended
July 4, 1997, total comprehensive income amounted to $22.2 million and $14.3
million, respectively. The difference between net income and comprehensive
income is the change in both the unrealized gains on marketable equity
securities and cumulative translation adjustments.
6
<PAGE> 7
ANIXTER INTERNATIONAL INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 4. INVESTMENT IN ANTEC
On February 6, 1997 a wholly owned subsidiary of ANTEC was merged into TSX
Corporation. Under the terms of the transaction, TSX Corporation shareholders
received one share of ANTEC Corporation stock for each share of TSX Corporation
stock that they owned. The transaction was accounted for as a pooling of
interests. Upon consummation of this transaction the Company's ownership
interest in ANTEC was reduced to approximately 19% which resulted in the
cessation of equity method accounting for this investment after that date. Prior
to the merger, equity earnings of $1.2 million were recorded in the first
quarter of 1997.
In the first quarter of 1998, the Company sold 2.2 million shares of ANTEC stock
which resulted in net after tax proceeds of approximately $32 million and an
after tax gain of $5.1 million. In the second quarter of 1998, the Company sold
its remaining 4.9 million shares of ANTEC stock which resulted in net after tax
proceeds of approximately $68 million and an after tax gain of $9.5 million.
NOTE 5: ACQUISITION OF PACER ELECTRONICS, INC.
In June 1998, the Company purchased Pacer Electronics, Inc. ("Pacer") for
approximately $38 million. Operating results for Pacer in the second quarter
were not significant. Pacer is an electrical and data cabling distributor
largely centered in the Northeast portion of the United States, with additional
locations in North Carolina, Florida and California. The majority of Pacer's
revenues come from the sale of wire, cable, connectors and related products and
value added services to original equipment manufacturers in the electronics
industry.
7
<PAGE> 8
NOTE 6: SUMMARIZED FINANCIAL INFORMATION OF ANIXTER INC.
The Company had an approximate 99% ownership interest in Anixter Inc. at July 3,
1998 and January 2, 1998 which was included in the consolidated financial
statements of the Company. The following summarizes the financial information
for Anixter Inc:
ANIXTER INC.
CONDENSED CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
JULY 3, JANUARY 2,
(In millions) 1998 1998
---------- -----------
(UNAUDITED)
<S> <C> <C>
Assets:
Current assets $1,046.9 $ 980.4
Property, net 64.9 61.0
Goodwill, net 179.7 181.1
Other assets 39.2 36.6
-------- --------
$1,330.7 $1,259.1
======== ========
Liabilities and Stockholders' Equity:
Current liabilities $ 428.0 $ 423.7
Other liabilities 11.8 10.7
Long-term debt 467.6 450.4
Subordinated notes payable to parent 54.0 19.0
Stockholders' equity: 369.3 355.3
-------- --------
$1,330.7 $1,259.1
======== ========
</TABLE>
ANIXTER INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATION
(UNAUDITED)
<TABLE>
<CAPTION>
13 WEEKS ENDED 26 WEEKS ENDED
-------------------- --------------------
JULY 3, JULY 4, JULY 3, JULY 4,
(In millions) 1998 1997 1998 1997
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net sales $ 758.5 $ 682.6 $1,487.1 $1,341.3
Operating income $ 29.1 $ 25.1 $ 56.7 $ 48.1
Income before income tax expense $ 19.3 $ 17.4 $ 36.9 $ 32.6
Net income $ 8.9 $ 8.7 $ 16.9 $ 16.4
</TABLE>
8
<PAGE> 9
NOTE 7: BUSINESS SEGMENTS
Over the past three years, the Company has been investing in the business of
providing services for the design, deployment and support of network
infrastructures. Beginning in 1998, in order to align its business segments with
the strategic focus of the Company, operating results are now reported in two
segments: Distribution and Integration. The largest segment, Distribution, sells
specialty wire and cable and structured wiring from top suppliers to
contractors, installers, manufacturers, natural resources companies, utilities
and original equipment manufacturers. The Integration segment sells products and
services for the assessment, design, implementation and support of networking
technologies.
The Company obtains and coordinates financing, legal and other related services,
certain of which are rebilled to subsidiaries. Corporate expenses are items not
related to the operations of the segments. Corporate assets consist of cash,
goodwill, assets held for sale, investment in ANTEC in 1997 and miscellaneous
assets maintained for general corporate purposes.
<TABLE>
<CAPTION>
13 WEEKS ENDED 26 WEEKS ENDED
------------------------ -----------------------
(In millions) JULY 3, JULY 4, JULY 3, JULY 4,
1998 1997 1998 1997
---- ---- ---- ----
BUSINESS SEGMENTS
<S> <C> <C> <C> <C>
Net sales:
Distribution $ 584.6 $ 507.9 $ 1,146.7 $ 1,000.5
Integration 198.8 174.7 385.2 340.8
---------- ---------- ---------- ----------
$ 783.4 $ 682.6 $ 1,531.9 $ 1,341.3
========== ========== ========== ==========
Operating income:
Distribution $ 26.8 $ 25.4 $ 56.3 $ 51.4
Integration 2.9 (.4) 1.5 (3.3)
Corporate (.2) .9 (.5) 2.9
---------- ---------- ---------- ----------
$ 29.5 $ 25.9 $ 57.3 $ 51.0
========== ========== ========== ==========
Identifiable assets:
Distribution $ 954.9 $ 704.3
Integration 298.4 265.2
Corporate 178.3 358.8
---------- ----------
$ 1,431.6 $ 1,328.3
========== ==========
GEOGRAPHIC SEGMENTS
Net sales:
North America $ 590.9 $ 497.5 $ 1,139.3 $ 980.9
Europe 143.9 138.7 296.4 273.0
Asia and Latin America 48.6 46.4 96.2 87.4
---------- ---------- ---------- ----------
$ 783.4 $ 682.6 $ 1,531.9 $ 1,341.3
========== ========== ========== ==========
Operating income:
North America $ 32.6 $ 30.1 $ 63.7 $ 61.9
Europe 1.8 1.2 4.7 .3
Asia and Latin America (4.9) (5.4) (11.1) (11.2)
---------- ---------- ---------- ----------
$ 29.5 $ 25.9 $ 57.3 $ 51.0
========== ========== ========== ==========
</TABLE>
9
<PAGE> 10
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FINANCIAL LIQUIDITY AND CAPITAL RESOURCES
CASH FLOW: Consolidated net cash used for operating activities from continuing
operations was $41.5 million for the 26 weeks ended July 3, 1998, compared to
$10.3 million provided by the same period in 1997. The decrease in net cash used
for operating activities from continuing operations was primarily due increases
in working capital related to the growth of the business. Consolidated net cash
provided by investing activities was $48.9 million for the first half of 1998
compared to $15.5 million used for the same period in 1997. The sale of the
investment in ANTEC resulted in cash proceeds of $104.3 million. This was
partially offset by the acquisition of Pacer Electronics, Inc. for $38.2
million. Consolidated net cash used for financing activities was $32.2 million
for the first half of 1998 as compared to $4.0 million provided by financing
activities in 1997. The decline was due to the repurchase of 2.5 million shares
for $50.6 million in 1998 versus .7 million shares for $9.6 million in 1997. As
a result of the sale of certain assets held for sale, net cash provided by
discontinued operations was $26.9 million and $4.6 million for the first half of
1998 and 1997, respectively.
FINANCINGS:
At July 3, 1998, $210.3 million was available under the bank revolving lines of
credit at Anixter Inc., of which $51.9 million was available to pay the Company
for intercompany liabilities. Future cash flows and lines of credit are expected
to be adequate to fund operating and investing activities.
Consolidated interest expense and other, net was $8.8 million and $7.2 million
for the second quarter 1998 and 1997, respectively, and was $16.9 million and
$14.6 million for the second half of 1998 and 1997, respectively. The increase
is due to foreign exchange losses in Latin America and Asia Pacific. Net
interest expense was flat year over year as proceeds from asset sales offset
funds used for increases in working capital and share repurchases.
In July 1998, the Company announced it would increase its ongoing program
to repurchase its common stock by up to 1 million shares, with the volume and
timing to depend on market conditions. Purchases will be made in the open market
or through other transactions and will be financed through available cash from
the sale of nonoperating assets.
10
<PAGE> 11
OTHER LIQUIDITY CONSIDERATIONS: Certain debt agreements entered into by the
Company's subsidiaries contain various restrictions including restrictions on
payments to the Company. Such restrictions have not had nor are expected to have
an adverse impact on the Company's ability to meet its cash obligations.
CAPITAL EXPENDITURES AND ACQUISITIONS
Consolidated net capital expenditures, were $17.2 million and $14.4 million for
the 26 weeks ended July 3, 1998 and July 4, 1997, respectively.
In June 1998, the Company purchased Pacer for $38.2 million, which resulted in
the addition of approximately $30 million to goodwill. Operating results of
Pacer in the second quarter were not significant.
RESULTS OF OPERATIONS
The Company competes with distributors and manufacturers who sell products
directly or through existing distribution channels to end users or other
resellers. The Company's relationship with the manufacturers for which it
distributes products could be affected by decisions made by these manufacturers
as the result of changes in management or ownership as well as other factors. In
addition, the Company's future performance could be affected by economic
downturns and possible rapid changes in applicable technologies.
QUARTER ENDED JULY 3, 1998: Including the $9.5 million after tax gain on the
sale of ANTEC, income from continuing operations for the quarter ended July 3,
1998 was $21.5 million as compared to $10.4 million in 1997.
The Company's sales during the second quarter of 1998 increased 14.8% to $783.4
million from $682.6 million in 1997. Distribution sales were up 15.1% over last
year reflecting strong U.S. demand for data cabling products, particularly for
Level 6 and Level 7 data cables. Integration sales increased 13.8% over last
year on a combination of much higher service sales and modest growth in product
sales. Product sales growth in the Integration segment continues to be
constrained by falling prices on all products and lower unit sales of shared
media hubs.
Sales for North America, Europe and Emerging Markets (Latin America and Asia
Pacific) increased 18.8%, 3.7% and 4.9%, respectively. Excluding the impact of
foreign exchange, Europe and Emerging Markets would have been up 6.5% and 16.8%,
respectively. North America sales were strong in both the Distribution and
Integration segments. The slow down in sales growth for Europe resulted
primarily from the strong pound sterling in the U.K. Emerging markets continue
to be impacted by soft economic conditions.
11
<PAGE> 12
Operating income for the second quarter of 1998 increased to $29.5 million from
$25.9 million in 1997. Distribution operating income grew only 5.8%, a result of
softer than expected European sales, a reduction in wire and cable prices due to
lower copper prices and higher costs associated with facilities opened in the
past 12 months. As a result, the Distribution operating profit margin for the
second quarter 1998 was 4.6% as compared to 5.0% in 1997. Integration operating
income for the second quarter 1998 grew significantly to $2.9 million versus a
loss of $.4 million in 1997. The improvement is the result of the increase in
sales, higher margin service revenues, and improved utilization and productivity
of personnel.
Operating income in North America increased 7.8% to $32.6 million for the second
quarter 1998 from $30.1 million in 1997. Despite the strong sales growth,
operating profit growth was hindered by the effects of lower copper prices on
electrical wire and cable products and higher facility costs. In addition, 1997
was favorably impacted by a $1.1 million gain related to a one-time sale of
assets. Second quarter operating income in Europe increased 58.5% to $1.8
million from $1.2 in 1997. The improvement is the result of higher sales,
improved gross margins relating to service revenues and tightly controlled
expenses in the Integration segment. Emerging markets operating loss for the
second quarter improved 7.9% from $5.4 million in 1997 to $4.9 million in 1998.
Improvement is primarily related to Latin America Distribution. Excluding the
impact of foreign exchange, second quarter Emerging markets operating loss is
2.1% lower than 1997.
The consolidated income tax provision on continuing operations for the second
quarter 1998 increased to $15.1 million from $8.3 million in 1997. The increase
was primarily due to higher pre-tax earnings, partially offset by a decrease in
the effective tax rate from the second quarter of 1997. The 1998 effective tax
rate of 41%, which is based on pre-tax book income adjusted primarily for
amortization of nondeductible goodwill and losses of foreign operations which
are not currently deductible, approximates the expected overall rate for all of
1998.
12
<PAGE> 13
26 WEEKS ENDED JULY 3, 1998: Including an after tax gain of $14.6 million
relating to the sale of ANTEC, income from continuing operations for the first
half of 1998 was $37.9 million as compared to $21.5 million for the first half
of 1997.
The Company's sales during the first half of 1998 increased 14.2% to $1,531.9
million from $1,341.3 million in 1997. Distribution sales were up 14.6% over
last year reflecting sales growth in all sectors of the business except Asia
Pacific. Excluding Accu-Tech, which was acquired in August 1997, Distribution
would have been up 10.1%. Integration sales increased 13.0% over last year with
significant improvement in the service business and strategic products,
partially offset by declines in unit sales of shared media hubs and product
price declines.
Sales for North America, Europe and Emerging Markets increased 16.1%, 8.5% and
10.2%, respectively. Excluding the impact of foreign exchange, Europe and
Emerging Markets would have been up 11.9% and 21.2%, respectively.
Operating income for the first half of 1998 increased $6.3 million from $51.0
million in 1997. Distribution operating income grew 9.6%, lower than its sales
growth, due to increased costs related to recently expanded distribution
facilities and a reduction in wire and cable prices due to lower copper prices.
The operating profit margin for the first half of 1998 was 4.9% as compared to
5.1% for 1997. Integration operating income for the first half of 1998 improved
$4.8 million from a loss of $3.3 million for 1997, due to a 73% increase in
higher margin service revenues and improved utilization of staff and other
resources in the foreign operations.
Operating income in North America increased 2.9% to $63.7 million for the first
half of 1998 when compared to 1997. Despite the strong sales growth, operating
profit growth was hindered by the effects of lower copper prices on electrical
wire and cable products, higher facility costs and increased headcount in
pursuing greater market share. In addition, 1997 includes $3.3 million of income
in Corporate due to a one-time gain on sale of assets. Operating income in
Europe for the first half of 1998 increased $4.4 million from $.3 million in
1997. The improvement was the result of the sales growth, improved gross margins
and lower operating expenses in both the Distribution and Integration segments.
Emerging Markets experienced a modest decline in operating losses from $11.2
million for the first half of 1997 to $11.1 million in 1998. Operating results
continue to be affected by soft market conditions in Southeast Asia and Latin
America. Excluding the impact of foreign exchange, operating profit for Emerging
Markets was down 12.2% in the first half of 1998 compared to 1997.
The consolidated income tax provision on continuing operations for the first
half of 1998 increased to $26.8 million from $17.1 million in 1997. The increase
was primarily due to higher pre-tax earnings, partially offset by a decrease in
the effective tax rate from 1997. The 1998 effective tax rate of 41%, which is
based on pre-tax book income adjusted primarily for amortization of
nondeductible goodwill and losses of foreign operations which are not currently
deductible, approximates the expected overall rate for all of 1998.
13
<PAGE> 14
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
10.1* Anixter International Inc. 1998 Stock Incentive Plan.
(Incorporated by reference from Anixter International Inc.'s
Registration Statement on Form S-8 filed June 15, 1998,
Exhibit 4a.)
27.1 Financial Data Schedule
(b) Reports on Form 8-K
None
* Management compensation plan required to be filed as an exhibit.
14
<PAGE> 15
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
ANIXTER INTERNATIONAL INC.
Date: August 13, 1998 By: /s/ Robert W. Grubbs
--------------- ------------------------------------
Robert W. Grubbs
President and Chief Executive Officer
Date: August 13, 1998 By: /s/ Dennis J. Letham
--------------- -------------------------------------
Dennis J. Letham
Senior Vice President - Finance
and Chief Financial Officer
15
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S FORM 10-Q FOR THE 13 WEEKS ENDED APRIL 3, 1998 AND APRIL 4, 1997
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
INCLUDED IN SUCH REPORTS.
</LEGEND>
<CIK> 0000052795
<NAME> ANIXTER INTERNATIONAL,INC.
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 6-MOS 6-MOS
<FISCAL-YEAR-END> JAN-01-1999 JAN-02-1998
<PERIOD-START> JAN-03-1998 JAN-04-1997
<PERIOD-END> JUL-03-1998 JUL-04-1997
<CASH> 12,700 21,600
<SECURITIES> 0 0
<RECEIVABLES> 623,000 513,700
<ALLOWANCES> 12,600 9,000
<INVENTORY> 450,500 387,800
<CURRENT-ASSETS> 1,096,700 935,200
<PP&E> 169,300 140,500
<DEPRECIATION> (100,400) 78,300
<TOTAL-ASSETS> 1,431,600 1,328,300
<CURRENT-LIABILITIES> 448,900 367,300
<BONDS> 0 0
0 0
0 0
<COMMON> 45,000 47,300
<OTHER-SE> 409,700 392,500
<TOTAL-LIABILITY-AND-EQUITY> 1,431,600 1,328,300
<SALES> 1,531,900 1,341,300
<TOTAL-REVENUES> 1,531,900 1,341,300
<CGS> 1,154,900 1,009,200
<TOTAL-COSTS> 1,474,600 1,290,300
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 16,900 14,600
<INCOME-PRETAX> 64,700 38,600
<INCOME-TAX> 26,800 17,100
<INCOME-CONTINUING> 37,900 21,500
<DISCONTINUED> 11,100 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 49,000 21,500
<EPS-PRIMARY> 1.04 0.45
<EPS-DILUTED> 1.04 0.45
</TABLE>
