Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2017 | Jul. 19, 2017 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | AXE | |
Entity Registrant Name | ANIXTER INTERNATIONAL INC | |
Entity Central Index Key | 52,795 | |
Current Fiscal Year End Date | --12-29 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 33,240,219 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jul. 01, 2016 | Jun. 30, 2017 | Jul. 01, 2016 | |
Net sales | $ 2,001.4 | $ 1,955.7 | $ 3,897.2 | $ 3,771.9 |
Cost of goods sold | 1,605.7 | 1,562.3 | 3,121.8 | 3,007.7 |
Gross profit | 395.7 | 393.4 | 775.4 | 764.2 |
Operating expenses | 313 | 336.7 | 623.7 | 647.2 |
Operating income | 82.7 | 56.7 | 151.7 | 117 |
Other expense: | ||||
Interest expense | (17.9) | (19.8) | (36.8) | (39.9) |
Other, net | (1) | (0.8) | (1.2) | (3.6) |
Income from continuing operations before income taxes | 63.8 | 36.1 | 113.7 | 73.5 |
Income tax expense from continuing operations | 23.7 | 15.3 | 42.7 | 29.5 |
Net income from continuing operations | 40.1 | 20.8 | 71 | 44 |
Loss from discontinued operations before income taxes | 0 | (0.5) | 0 | (1.2) |
Income tax benefit from discontinued operations | 0 | (0.2) | 0 | (0.5) |
Net loss from discontinued operations | 0 | (0.3) | 0 | (0.7) |
Net income | $ 40.1 | $ 20.5 | $ 71 | $ 43.3 |
Basic: | ||||
Continuing operations | $ 1.19 | $ 0.62 | $ 2.12 | $ 1.32 |
Discontinued operations | 0 | (0.01) | 0 | (0.02) |
Net income | 1.19 | 0.61 | 2.12 | 1.30 |
Diluted: | ||||
Continuing operations | 1.18 | 0.62 | 2.09 | 1.32 |
Discontinued operations | 0 | (0.01) | 0 | (0.03) |
Net income | $ 1.18 | $ 0.61 | $ 2.09 | $ 1.29 |
Basic weighted-average common shares outstanding | 33.6 | 33.4 | 33.6 | 33.3 |
Effect of dilutive securities: | ||||
Stock options and units | 0.4 | 0.1 | 0.4 | 0.1 |
Diluted weighted-average common shares outstanding | 34 | 33.5 | 34 | 33.4 |
Net income | $ 40.1 | $ 20.5 | $ 71 | $ 43.3 |
Other comprehensive income: | ||||
Foreign currency translation | 8.8 | (5.1) | 23 | 13.2 |
Changes in unrealized pension cost, net of tax | 1.1 | 6.9 | 1.9 | 7.9 |
Other comprehensive income | 9.9 | 1.8 | 24.9 | 21.1 |
Comprehensive income | $ 50 | $ 22.3 | $ 95.9 | $ 64.4 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 30, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 178 | $ 115.1 |
Accounts receivable, net | 1,382.4 | 1,353.2 |
Inventories | 1,191.2 | 1,178.3 |
Other current assets | 45.1 | 41.9 |
Total current assets | 2,796.7 | 2,688.5 |
Property and equipment, at cost | 368.7 | 343.4 |
Accumulated depreciation | (221) | (203.1) |
Property and equipment, net | 147.7 | 140.3 |
Goodwill | 771.4 | 764.6 |
Intangible assets, net | 400.2 | 415.4 |
Other assets | 87.9 | 84.8 |
Total assets | 4,203.9 | 4,093.6 |
Current liabilities: | ||
Accounts payable | 1,094.2 | 1,006 |
Accrued expenses | 224.2 | 257.9 |
Total current liabilities | 1,318.4 | 1,263.9 |
Long-term debt | 1,331.2 | 1,378.8 |
Other liabilities | 157.9 | 158.7 |
Total liabilities | 2,807.5 | 2,801.4 |
Stockholders’ equity: | ||
Common stock - $1.00 par value, 100,000,000 shares authorized, 33,595,190 and 33,437,882 shares issued and outstanding at June 30, 2017 and December 30, 2016, respectively | 33.6 | 33.4 |
Capital surplus | 269.9 | 261.8 |
Retained earnings | 1,318.9 | 1,247.9 |
Accumulated other comprehensive loss: | ||
Foreign currency translation | (130.9) | (153.9) |
Unrecognized pension liability, net | (95.1) | (97) |
Total accumulated other comprehensive loss | (226) | (250.9) |
Total stockholders’ equity | 1,396.4 | 1,292.2 |
Total liabilities and stockholders’ equity | $ 4,203.9 | $ 4,093.6 |
CONDENSED CONSOLIDATED BALANCE4
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2017 | Dec. 30, 2016 |
Common stock, par value | $ 1 | $ 1 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 33,595,190 | 33,437,882 |
Common stock, shares outstanding | 33,595,190 | 33,437,882 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2017 | Jul. 01, 2016 | |
Operating activities: | ||
Net income | $ 71 | $ 43.3 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 14.1 | 14 |
Amortization of intangible assets | 18 | 19.2 |
Stock-based compensation | 8.9 | 8.4 |
Deferred income taxes | 0.8 | 1.4 |
Accretion of debt discount | 1.1 | 1.1 |
Amortization of deferred financing costs | 1.1 | 1 |
Pension plan contributions | (8.5) | (10.5) |
Pension plan expenses | 5.1 | 15.2 |
Changes in current assets and liabilities, net | 26.7 | 62.4 |
Other, net | (1.2) | (5.9) |
Net cash provided by operating activities | 137.1 | 149.6 |
Investing activities: | ||
Capital expenditures, net | (20.8) | (16.4) |
Other, net | 0 | (4.7) |
Net cash used in investing activities | (20.8) | (21.1) |
Financing activities: | ||
Proceeds from borrowings | 895.7 | 376.7 |
Repayments of borrowings | (909.5) | (496.7) |
Repayments of Canadian term loan | (38.7) | (23.1) |
Proceeds from stock options exercised | 2.6 | 0 |
Other, net | (0.2) | (0.6) |
Net cash used in financing activities | (50.1) | (143.7) |
Increase (decrease) in cash and cash equivalents | 66.2 | (15.2) |
Effect of exchange rate changes on cash balances | (3.3) | (2.9) |
Cash and cash equivalents at beginning of period | 115.1 | 151.3 |
Cash and cash equivalents at end of period | $ 178 | $ 133.2 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2017 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation: The unaudited interim condensed consolidated financial statements of Anixter International Inc. and its subsidiaries (collectively referred to as "Anixter" or the "Company"), sometimes referred to in this Quarterly Report on Form 10-Q as "we", "our", "us", or "ourselves" have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). Therefore, certain information and disclosures normally included in financial statements and related notes prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") have been condensed or omitted. Certain prior period amounts have been reclassified to conform to the current year presentation. The results as discussed in the Condensed Consolidated Financial Statements reflect continuing operations only, unless otherwise noted. These financial statements should be read in conjunction with, and have been prepared in conformity with, the accounting principles reflected in the consolidated financial statements and related notes included in Anixter's Annual Report on Form 10-K for the year ended December 30, 2016 ("2016 Form 10-K"). 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 Company maintains its financial records on the basis of a fiscal year ending on the Friday nearest December 31, with the fiscal quarters spanning thirteen weeks, with the first quarter ending on the Friday of the first thirteen-week period. The second quarter of fiscal year 2017 ended on June 30, 2017, and the second quarter of fiscal year 2016 ended on July 1, 2016. Recently issued and adopted accounting pronouncements: In March 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-09, Compensation - Stock Compensation: Improvements to Employee Share-Based Payment Accounting , which changes how companies account for certain aspects of share-based payments to employees. The new guidance requires all income tax effects of awards to be recognized in the income statement when the awards vest or are settled, allows an employer to repurchase more of an employee’s shares than previously allowed for tax withholding purposes without triggering liability accounting, allows a company to make a policy election to account for forfeitures as they occur, and eliminates the requirement that excess tax benefits be realized before companies can recognize them. The new guidance also requires excess tax benefits and tax shortfalls to be presented on the cash flow statement as an operating activity rather than as a financing activity, and clarifies that cash paid to a tax authority when shares are withheld to satisfy its statutory income tax withholding obligation are to be presented as a financing activity. The standard is effective for the Company's financial statements issued for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. The Company adopted this guidance in the first quarter of fiscal year 2017. On a prospective basis, excess tax benefits recognized on stock-based compensation expense were reflected as a component of the provision for income taxes. As allowed by the new guidance, the Company has elected to account for forfeitures as they occur. Anixter has also elected to present the cash flow statement on a retrospective transition method and prior periods have been adjusted to present the excess tax benefits as part of cash flows from operating activities. The result of this adoption did not have a material impact on Anixter's Condensed Consolidated Financial Statements. Recently issued accounting pronouncements not yet adopted: In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers , and issued subsequent amendments to the initial guidance in August 2015, March 2016, April 2016 and May 2016 within ASU 2015-14, ASU 2016-08, ASU 2016-10 and ASU 2016-12, respectively. The core principle of this new revenue recognition guidance is that a company will recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The new guidance defines a five-step process to achieve this core principle, and in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than are required under current guidance, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation, among others. The new guidance also requires more detailed disclosures to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The new guidance provides for two transition methods: a full retrospective approach and a modified retrospective approach. Anixter will adopt the new revenue recognition guidance in the first quarter of fiscal year 2018 utilizing the modified retrospective method of adoption. The Company continues to evaluate the impact of this guidance on its consolidated results of operations and financial condition. The Company has developed a multi-phase plan to assess the impact of adoption on its material revenue streams, evaluate the new disclosure requirements, and identify and implement appropriate changes to its business processes, systems and controls to support recognition and disclosure under the new guidance. Anixter is currently in the process of completing its initial analysis and performing detailed reviews of significant contracts to determine any adjustments necessary to existing accounting policies, and to support an evaluation of the impact on its results of operations and financial condition. In February 2016, the FASB issued ASU 2016-02, Leases , which requires lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by all leases with terms of more than 12 months. The guidance modifies the classification criteria and the accounting for sales-type and direct financing leases for lessors. The standard is effective for Anixter's financial statements issued for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact of adoption of this ASU on its Consolidated Financial Statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses , which requires the measurement of expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions and reasonable forecasts. The main objective of this ASU is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. The standard is effective for Anixter's financial statements issued for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. The Company is currently evaluating the impact of adoption of this ASU on its Consolidated Financial Statements. In January 2017, the FASB issued ASU 2017-01, Business Combinations: Clarifying the Definition of a Business , which adds guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The standard is effective for Anixter's financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company is currently evaluating the impact of adoption of this ASU on its Consolidated Financial Statements. In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other: Simplifying the Test for Goodwill Impairment , which removes step two from the goodwill impairment test. Step two measures a goodwill impairment loss by comparing the implied fair value of a reporting unit's goodwill with the carrying amount of that goodwill. The new guidance requires an entity to perform its goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount, including goodwill. The standard is effective for Anixter's financial statements issued for fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is currently evaluating the impact of adoption of this ASU on its Consolidated Financial Statements. In March 2017, the FASB issued ASU 2017-07, Compensation - Retirement Benefits: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost , which changes how employers that sponsor defined benefit pension or other postretirement benefit plans present the net periodic benefit cost in the income statement. The new guidance requires entities to report the service cost component in the same line item as other compensation costs. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component outside of income from operations. The standard is effective for Anixter's financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted as of the beginning of an annual period for which financial statements have not been issued or made available for issuance. The Company is currently evaluating the impact of adoption of this ASU on its Consolidated Financial Statements. In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation: Scope of Modification Accounting , which clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award changes as a result of the change in terms or conditions. ASU 2017-09 will be applied prospectively to awards modified on or after the adoption date. The standard is effective for Anixter’s financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact of adoption of this ASU on its Consolidated Financial Statements. The Company does not believe that any other recently issued, but not yet effective, accounting pronouncements, if adopted, would have a material impact on its Consolidated Financial Statements. Other, net: The following represents the components of "Other, net" as reflected in the Condensed Consolidated Statements of Comprehensive Income: Three Months Ended Six Months Ended (In millions) June 30, July 1, June 30, July 1, Other, net: Foreign exchange $ (1.3 ) $ (1.4 ) $ (2.0 ) $ (4.5 ) Cash surrender value of life insurance policies 0.5 0.6 1.1 1.2 Other (0.2 ) — (0.3 ) (0.3 ) Total other, net $ (1.0 ) $ (0.8 ) $ (1.2 ) $ (3.6 ) Due to the continued strength of the U.S. dollar ("USD") against certain foreign currencies, primarily in Europe and Latin America, the Company recorded foreign exchange losses of $1.3 million and $1.4 million in the second quarter of 2017 and 2016, respectively. Foreign exchange losses were $2.0 million and $4.5 million in the six months ended June 30, 2017 and July 1, 2016 , respectively. Several of Anixter's subsidiaries conduct business in a currency other than the legal entity’s functional currency. Transactions may produce receivables or payables that are fixed in terms of the amount of foreign currency that will be received or paid. A change in exchange rates between the functional currency and the currency in which a transaction is denominated increases or decreases the expected amount of functional currency cash flows upon settlement of the transaction. The increase or decrease in expected functional currency cash flows results in a foreign currency transaction gain or loss that is included in "Other, net" in the Condensed Consolidated Statements of Comprehensive Income. The Company purchases foreign currency forward contracts to minimize the effect of fluctuating foreign currency-denominated accounts on reported income. The foreign currency forward contracts are not designated as hedges for accounting purposes. The Company's strategy is to negotiate terms for its derivatives and other financial instruments to be highly effective, such that the change in the value of the derivative perfectly offsets the impact of the underlying hedged item (e.g., various foreign currency-denominated accounts). Its counterparties to foreign currency forward contracts have investment-grade credit ratings. Anixter expects the creditworthiness of its counterparties to remain intact through the term of the transactions. The Company regularly monitors the creditworthiness of its counterparties to ensure no issues exist which could affect the value of the derivatives. The Company does not hedge 100% of its foreign currency-denominated accounts. In addition, the results of hedging can vary significantly based on various factors, such as the timing of executing the foreign currency forward contracts versus the movement of the currencies as well as the fluctuations in the account balances throughout each reporting period. The fair value of the foreign currency forward contracts is based on the difference between the contract rate and the current exchange rate. The fair value of the foreign currency forward contracts is measured using observable market information. These inputs would be considered Level 2 in the fair value hierarchy. At June 30, 2017 and December 30, 2016 , foreign currency forward contracts were revalued at then-current foreign exchange rates with the changes in valuation reflected directly in "Other, net" in the Condensed Consolidated Statements of Comprehensive Income offsetting the transaction gain/loss recorded on the foreign currency-denominated accounts. At June 30, 2017 and December 30, 2016 , the gross notional amount of the foreign currency forward contracts outstanding was approximately $147.5 million and $114.8 million , respectively. At June 30, 2017 and December 30, 2016 , the net notional amount of the foreign currency forward contracts outstanding was approximately $112.3 million and $90.9 million , respectively. While all of the Company's foreign currency forward contracts are subject to master netting arrangements with its counterparties, assets and liabilities related to derivative instruments are presented on a gross basis within the Condensed Consolidated Balance Sheets. The gross fair value of derivative assets and liabilities are immaterial. The combined effect of changes in both the equity and bond markets resulted in changes in the cash surrender value of company-owned life insurance policies associated with the company-sponsored deferred compensation program. Accumulated other comprehensive loss: Unrealized gains and losses are accumulated in "Accumulated other comprehensive loss" ("AOCI"). These changes are also reported in "Other comprehensive income" on the Condensed Consolidated Statements of Comprehensive Income. These include unrealized gains and losses related to the Company's defined benefit obligations and foreign currency translation. See Note 5. "Pension Plans" for pension related amounts reclassified into net income. Investments in several subsidiaries are recorded in currencies other than the USD. As these foreign currency denominated investments are translated at the end of each period during consolidation using period-end exchange rates, fluctuations of exchange rates between the foreign currency and the USD increase or decrease the value of those investments. These fluctuations and the results of operations for foreign subsidiaries, where the functional currency is not the USD, are translated into USD using the average exchange rates during the periods reported, while the assets and liabilities are translated using period-end exchange rates. The assets and liabilities-related translation adjustments are recorded as a separate component of AOCI, "Foreign currency translation." In addition, as Anixter's subsidiaries maintain investments denominated in currencies other than local currencies, exchange rate fluctuations will occur. Borrowings are raised in certain foreign currencies to minimize the exchange rate translation adjustment risk. |
DEBT
DEBT | 6 Months Ended |
Jun. 30, 2017 | |
Text Block [Abstract] | |
DEBT | DEBT Debt is summarized below: (In millions) June 30, December 30, Long-term debt: 5.50% Senior notes due 2023 $ 346.5 $ 346.3 5.125% Senior notes due 2021 396.1 395.7 5.625% Senior notes due 2019 348.1 347.7 Canadian term loan 59.1 95.4 Revolving lines of credit 185.2 197.1 Other 2.0 3.5 Unamortized deferred financing costs (5.8 ) (6.9 ) Total long-term debt $ 1,331.2 $ 1,378.8 Fair Value of Debt The fair value of Anixter's debt instruments is measured using observable market information which would be considered Level 2 in the fair value hierarchy described in accounting guidance on fair value measurements. The Company's fixed-rate debt consists of Senior notes due 2023, Senior notes due 2021 and Senior notes due 2019. At June 30, 2017 , the Company's total carrying value and estimated fair value of debt outstanding was $1,331.2 million and $1,412.0 million , respectively. This compares to a carrying value and estimated fair value of debt outstanding at December 30, 2016 of $1,378.8 million and $1,435.6 million , respectively. The decrease in the carrying value and estimated fair value is primarily due to lower outstanding borrowings under Anixter's revolving lines of credit and partial repayment of the Canadian term loan. |
LEGAL CONTINGENCIES
LEGAL CONTINGENCIES | 6 Months Ended |
Jun. 30, 2017 | |
Text Block [Abstract] | |
LEGAL CONTINGENCIES | LEGAL CONTINGENCIES From time to time, Anixter is party to legal proceedings and matters that arise in the ordinary course of business. As of June 30, 2017 , the Company does not believe there is a reasonable possibility that any material loss exceeding the amounts already recognized for these proceedings and matters has been incurred. However, the ultimate resolutions of these proceedings and matters are inherently unpredictable. As such, the Company's financial condition and results of operations could be adversely affected in any particular period by the unfavorable resolution of one or more of these proceedings or matters. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2017 | |
INCOME TAXES | INCOME TAXES The Company's effective tax rate for the second quarter of 2017 was 37.2% compared to 42.4% in the prior year period. The Company's effective tax rate for the six months ended June 30, 2017 was 37.6% compared to 40.1% in the prior year period. The decrease was due primarily to the change in the country mix of earnings. Anixter considers the undistributed earnings of its foreign subsidiaries, along with future earnings, to be indefinitely reinvested and, accordingly, no provision for U.S. federal and state incomes taxes or any withholding taxes has been recorded. |
PENSION PLANS
PENSION PLANS | 6 Months Ended |
Jun. 30, 2017 | |
Text Block [Abstract] | |
PENSION PLANS | PENSION PLANS The Company's defined benefit pension plans are the plans in the U.S., which consist of the Anixter Inc. Pension Plan, the Executive Benefit Plan and the Supplemental Executive Retirement Plan ("SERP") (together the "Domestic Plans") and various defined benefit pension plans covering employees of foreign subsidiaries in Canada and Europe (together the "Foreign Plans"). The majority of these defined benefit pension plans are non-contributory and cover substantially all full-time domestic employees and certain employees in other countries. Retirement benefits are provided based on compensation as defined in both the Domestic Plans and the Foreign Plans. The Company's policy is to fund all Domestic Plans as required by the Employee Retirement Income Security Act of 1974 ("ERISA") and the IRS and all Foreign Plans as required by applicable foreign laws. The Executive Benefit Plan and SERP are the only two plans that are unfunded. Assets in the various plans consist primarily of equity securities and fixed income investments. Components of net periodic pension cost are as follows: Three Months Ended Domestic Foreign Total (In millions) June 30, 2017 July 1, 2016 June 30, 2017 July 1, 2016 June 30, 2017 July 1, 2016 Service cost $ 1.2 $ 1.2 $ 1.4 $ 1.5 $ 2.6 $ 2.7 Interest cost 2.7 2.8 1.7 2.3 4.4 5.1 Expected return on plan assets (3.8 ) (3.5 ) (2.1 ) (2.6 ) (5.9 ) (6.1 ) Net amortization (a) 0.7 0.5 0.7 0.7 1.4 1.2 Settlement charge — — — 9.6 — 9.6 Net periodic pension cost $ 0.8 $ 1.0 $ 1.7 $ 11.5 $ 2.5 $ 12.5 (a) Reclassified into operating expenses from AOCI. Six Months Ended Domestic Foreign Total (In millions) June 30, 2017 July 1, 2016 June 30, 2017 July 1, 2016 June 30, 2017 July 1, 2016 Service cost $ 2.4 $ 2.4 $ 2.9 $ 3.0 $ 5.3 $ 5.4 Interest cost 5.5 5.7 3.4 4.4 8.9 10.1 Expected return on plan assets (7.5 ) (7.1 ) (4.3 ) (5.1 ) (11.8 ) (12.2 ) Net amortization (a) 1.2 1.0 1.5 1.3 2.7 2.3 Settlement Charge — — — 9.6 — 9.6 Net periodic pension cost $ 1.6 $ 2.0 $ 3.5 $ 13.2 $ 5.1 $ 15.2 (a) Reclassified into operating expenses from AOCI. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 6 Months Ended |
Jun. 30, 2017 | |
STOCKHOLDERS' EQUITY | STOCKHOLDERS' EQUITY During the second quarter of 2017, the Company's shareholders approved the 2017 Stock Incentive Plan consisting of 2.0 million shares of the Company's common stock. Prior approved stock incentive plans have been closed and will not be allowed to issue future stock grants. At the end of the second quarter of 2017, there were 2.0 million shares reserved for issuance under the 2017 Stock Incentive Plan. Under such plan, the Company pays non-employee directors annual retainer fees and, at their election, meeting fees in the form of stock units. Employee and director stock units are included in common stock outstanding on the date of vesting, and stock options are included in common stock outstanding upon exercise by the participant. The fair value of employee stock options and units is amortized over the respective vesting period representing the requisite service period, generally three , four or six years for stock units and four years for stock options. Director stock units are expensed in the period in which they are granted, as these vest immediately. During the first quarter of 2016, Anixter initiated a performance-based restricted stock unit ("performance units") program that will be earned in one-third tranches to be evaluated on the anniversary of the first, second and third performance cycles. Each evaluation period will be based on the achievement of the Company's total shareholder return ("TSR") relative to the TSR of the S&P Mid Cap 400 index. The earned shares are issued on the third anniversary of the grant date. The granted units will be adjusted based on the specific payout percentage of the grant agreement. The fair value of each tranche related to the performance units were estimated at the grant date using the Monte Carlo Simulation pricing model. During the three months ended June 30, 2017 , the Company did not grant stock units to employees. During the six months ended June 30, 2017 , the Company granted 173,187 stock units to employees, with a weighted-average grant-date fair value of $14.9 million . During the three months ended June 30, 2017 , the Company did not issue performance units to employees. During the six months ended June 30, 2017 , the Company granted 33,956 performance units to employees, with a weighted-average grant-date fair value of $3.0 million . During the three and six months ended June 30, 2017 , the Company granted directors 7,972 and 15,774 stock units, respectively, with a weighted-average grant-date fair value of $0.7 million and $1.3 million , respectively. Antidilutive stock options and units are excluded from the calculation of weighted-average shares for diluted earnings per share. For the second quarter of 2017 and 2016, the antidilutive stock options and units were immaterial. |
BUSINESS SEGMENTS
BUSINESS SEGMENTS | 6 Months Ended |
Jun. 30, 2017 | |
BUSINESS SEGMENTS | BUSINESS SEGMENTS Anixter is a leading distributor of enterprise cabling and security solutions, electrical and electronic wire and cable products and utility power solutions. The Company has identified Network & Security Solutions ("NSS"), Electrical and Electronic Solutions ("EES") and Utility Power Solutions ("UPS") as reportable segments. Corporate expenses are incurred to obtain and coordinate financing, tax, information technology, legal and other related services, certain of which were rebilled to subsidiaries. We also have various corporate assets which are reported in corporate. Segment assets may not include jointly used assets, but segment results include depreciation expense or other allocations related to those assets as such allocation is made for internal reporting. Interest expense and other non-operating items are not allocated to the segments or reviewed on a segment basis. The categorization of net sales by end market is determined using a variety of data points including the technical characteristic of the product, the "sold to" customer information, the "ship to" customer information and the end customer product or application into which product will be incorporated. Anixter also has largely specialized its sales organization by segment. As data systems for capturing and tracking this data evolve and improve, the categorization of products by end market can vary over time. When this occurs, the Company reclassifies net sales by end market for prior periods. Such reclassifications typically do not materially change the sizing of, or the underlying trends of results within, each end market. Segment Financial Information Segment information for the three and six months ended June 30, 2017 and July 1, 2016 are as follows: (In millions) Second Quarter of 2017 NSS EES UPS Corporate Total Net Sales $ 1,029.4 $ 561.5 $ 410.5 $ — $ 2,001.4 Operating income 64.9 29.6 21.3 (33.1 ) 82.7 Second Quarter of 2016 NSS EES UPS Corporate Total Net Sales $ 1,044.7 $ 555.1 $ 355.9 $ — $ 1,955.7 Operating income 64.9 23.9 12.0 (44.1 ) 56.7 Six Months of 2017 NSS EES UPS Corporate Total Net Sales $ 2,014.3 $ 1,088.9 $ 794.0 $ — $ 3,897.2 Operating income 126.7 57.5 37.5 (70.0 ) 151.7 Six Months of 2016 NSS EES UPS Corporate Total Net Sales $ 1,993.8 $ 1,061.1 $ 717.0 $ — $ 3,771.9 Operating income 123.7 46.4 26.3 (79.4 ) 117.0 Goodwill Assigned to Segments The following table presents the changes in goodwill allocated to the Company's reporting units during the six months ended June 30, 2017 : (In millions) NSS EES UPS Total Balance as of December 30, 2016 $ 405.0 $ 181.0 $ 178.6 $ 764.6 Foreign currency translation 2.1 0.3 4.4 6.8 Balance as of June 30, 2017 $ 407.1 $ 181.3 $ 183.0 $ 771.4 |
SUMMARIZED FINANCIAL INFORMATIO
SUMMARIZED FINANCIAL INFORMATION OF ANIXTER INC. | 6 Months Ended |
Jun. 30, 2017 | |
Text Block [Abstract] | |
SUMMARIZED FINANCIAL INFORMATION OF ANIXTER INC. | SUMMARIZED FINANCIAL INFORMATION OF ANIXTER INC. Anixter International Inc. guarantees, fully and unconditionally, substantially all of the debt of its subsidiaries, which include Anixter Inc., its 100% owned primary operating subsidiary. Anixter International Inc. has no independent assets or operations and all subsidiaries other than Anixter Inc. are minor. The following summarizes the financial information for Anixter Inc.: ANIXTER INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In millions) June 30, December 30, Assets: Current assets $ 2,796.1 $ 2,688.3 Property, equipment and capital leases, net 155.3 148.4 Goodwill 771.4 764.6 Intangible assets, net 400.2 415.4 Other assets 87.8 84.8 $ 4,210.8 $ 4,101.5 Liabilities and Stockholder's Equity: Current liabilities $ 1,319.6 $ 1,264.9 Subordinated notes payable to parent — 0.7 Long-term debt 1,341.8 1,390.1 Other liabilities 156.1 156.8 Stockholder’s equity 1,393.3 1,289.0 $ 4,210.8 $ 4,101.5 ANIXTER INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME Three Months Ended Six Months Ended (In millions) June 30, July 1, June 30, July 1, Net sales $ 2,001.4 $ 1,955.7 $ 3,897.2 $ 3,771.9 Operating income $ 84.6 $ 58.2 $ 155.2 $ 120.1 Income from continuing operations before income taxes $ 65.4 $ 37.4 $ 116.7 $ 76.1 Net loss from discontinued operations $ — $ (0.3 ) $ — $ (0.7 ) Net income $ 41.2 $ 21.2 $ 72.9 $ 44.8 Comprehensive income $ 51.0 $ 23.0 $ 97.7 $ 65.9 |
SUMMARY OF SIGNIFICANT ACCOUN14
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Basis of presentation | Basis of presentation: The unaudited interim condensed consolidated financial statements of Anixter International Inc. and its subsidiaries (collectively referred to as "Anixter" or the "Company"), sometimes referred to in this Quarterly Report on Form 10-Q as "we", "our", "us", or "ourselves" have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). Therefore, certain information and disclosures normally included in financial statements and related notes prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") have been condensed or omitted. Certain prior period amounts have been reclassified to conform to the current year presentation. The results as discussed in the Condensed Consolidated Financial Statements reflect continuing operations only, unless otherwise noted. These financial statements should be read in conjunction with, and have been prepared in conformity with, the accounting principles reflected in the consolidated financial statements and related notes included in Anixter's Annual Report on Form 10-K for the year ended December 30, 2016 ("2016 Form 10-K"). 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 Company maintains its financial records on the basis of a fiscal year ending on the Friday nearest December 31, with the fiscal quarters spanning thirteen weeks, with the first quarter ending on the Friday of the first thirteen-week period. The second quarter of fiscal year 2017 ended on June 30, 2017, and the second quarter of fiscal year 2016 ended on July 1, 2016. |
Recently issued and adopted accounting pronouncements | Recently issued and adopted accounting pronouncements: In March 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-09, Compensation - Stock Compensation: Improvements to Employee Share-Based Payment Accounting , which changes how companies account for certain aspects of share-based payments to employees. The new guidance requires all income tax effects of awards to be recognized in the income statement when the awards vest or are settled, allows an employer to repurchase more of an employee’s shares than previously allowed for tax withholding purposes without triggering liability accounting, allows a company to make a policy election to account for forfeitures as they occur, and eliminates the requirement that excess tax benefits be realized before companies can recognize them. The new guidance also requires excess tax benefits and tax shortfalls to be presented on the cash flow statement as an operating activity rather than as a financing activity, and clarifies that cash paid to a tax authority when shares are withheld to satisfy its statutory income tax withholding obligation are to be presented as a financing activity. The standard is effective for the Company's financial statements issued for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. The Company adopted this guidance in the first quarter of fiscal year 2017. On a prospective basis, excess tax benefits recognized on stock-based compensation expense were reflected as a component of the provision for income taxes. As allowed by the new guidance, the Company has elected to account for forfeitures as they occur. Anixter has also elected to present the cash flow statement on a retrospective transition method and prior periods have been adjusted to present the excess tax benefits as part of cash flows from operating activities. The result of this adoption did not have a material impact on Anixter's Condensed Consolidated Financial Statements. |
New Accounting Pronouncements Not yet Adopted | Recently issued accounting pronouncements not yet adopted: In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers , and issued subsequent amendments to the initial guidance in August 2015, March 2016, April 2016 and May 2016 within ASU 2015-14, ASU 2016-08, ASU 2016-10 and ASU 2016-12, respectively. The core principle of this new revenue recognition guidance is that a company will recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The new guidance defines a five-step process to achieve this core principle, and in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than are required under current guidance, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation, among others. The new guidance also requires more detailed disclosures to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The new guidance provides for two transition methods: a full retrospective approach and a modified retrospective approach. Anixter will adopt the new revenue recognition guidance in the first quarter of fiscal year 2018 utilizing the modified retrospective method of adoption. The Company continues to evaluate the impact of this guidance on its consolidated results of operations and financial condition. The Company has developed a multi-phase plan to assess the impact of adoption on its material revenue streams, evaluate the new disclosure requirements, and identify and implement appropriate changes to its business processes, systems and controls to support recognition and disclosure under the new guidance. Anixter is currently in the process of completing its initial analysis and performing detailed reviews of significant contracts to determine any adjustments necessary to existing accounting policies, and to support an evaluation of the impact on its results of operations and financial condition. In February 2016, the FASB issued ASU 2016-02, Leases , which requires lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by all leases with terms of more than 12 months. The guidance modifies the classification criteria and the accounting for sales-type and direct financing leases for lessors. The standard is effective for Anixter's financial statements issued for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact of adoption of this ASU on its Consolidated Financial Statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses , which requires the measurement of expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions and reasonable forecasts. The main objective of this ASU is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. The standard is effective for Anixter's financial statements issued for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. The Company is currently evaluating the impact of adoption of this ASU on its Consolidated Financial Statements. In January 2017, the FASB issued ASU 2017-01, Business Combinations: Clarifying the Definition of a Business , which adds guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The standard is effective for Anixter's financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company is currently evaluating the impact of adoption of this ASU on its Consolidated Financial Statements. In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other: Simplifying the Test for Goodwill Impairment , which removes step two from the goodwill impairment test. Step two measures a goodwill impairment loss by comparing the implied fair value of a reporting unit's goodwill with the carrying amount of that goodwill. The new guidance requires an entity to perform its goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount, including goodwill. The standard is effective for Anixter's financial statements issued for fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is currently evaluating the impact of adoption of this ASU on its Consolidated Financial Statements. In March 2017, the FASB issued ASU 2017-07, Compensation - Retirement Benefits: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost , which changes how employers that sponsor defined benefit pension or other postretirement benefit plans present the net periodic benefit cost in the income statement. The new guidance requires entities to report the service cost component in the same line item as other compensation costs. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component outside of income from operations. The standard is effective for Anixter's financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted as of the beginning of an annual period for which financial statements have not been issued or made available for issuance. The Company is currently evaluating the impact of adoption of this ASU on its Consolidated Financial Statements. In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation: Scope of Modification Accounting , which clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award changes as a result of the change in terms or conditions. ASU 2017-09 will be applied prospectively to awards modified on or after the adoption date. The standard is effective for Anixter’s financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact of adoption of this ASU on its Consolidated Financial Statements. The Company does not believe that any other recently issued, but not yet effective, accounting pronouncements, if adopted, would have a material impact on its Consolidated Financial Statements. |
Other, net | Other, net: The following represents the components of "Other, net" as reflected in the Condensed Consolidated Statements of Comprehensive Income: Three Months Ended Six Months Ended (In millions) June 30, July 1, June 30, July 1, Other, net: Foreign exchange $ (1.3 ) $ (1.4 ) $ (2.0 ) $ (4.5 ) Cash surrender value of life insurance policies 0.5 0.6 1.1 1.2 Other (0.2 ) — (0.3 ) (0.3 ) Total other, net $ (1.0 ) $ (0.8 ) $ (1.2 ) $ (3.6 ) Due to the continued strength of the U.S. dollar ("USD") against certain foreign currencies, primarily in Europe and Latin America, the Company recorded foreign exchange losses of $1.3 million and $1.4 million in the second quarter of 2017 and 2016, respectively. Foreign exchange losses were $2.0 million and $4.5 million in the six months ended June 30, 2017 and July 1, 2016 , respectively. Several of Anixter's subsidiaries conduct business in a currency other than the legal entity’s functional currency. Transactions may produce receivables or payables that are fixed in terms of the amount of foreign currency that will be received or paid. A change in exchange rates between the functional currency and the currency in which a transaction is denominated increases or decreases the expected amount of functional currency cash flows upon settlement of the transaction. The increase or decrease in expected functional currency cash flows results in a foreign currency transaction gain or loss that is included in "Other, net" in the Condensed Consolidated Statements of Comprehensive Income. The Company purchases foreign currency forward contracts to minimize the effect of fluctuating foreign currency-denominated accounts on reported income. The foreign currency forward contracts are not designated as hedges for accounting purposes. The Company's strategy is to negotiate terms for its derivatives and other financial instruments to be highly effective, such that the change in the value of the derivative perfectly offsets the impact of the underlying hedged item (e.g., various foreign currency-denominated accounts). Its counterparties to foreign currency forward contracts have investment-grade credit ratings. Anixter expects the creditworthiness of its counterparties to remain intact through the term of the transactions. The Company regularly monitors the creditworthiness of its counterparties to ensure no issues exist which could affect the value of the derivatives. The Company does not hedge 100% of its foreign currency-denominated accounts. In addition, the results of hedging can vary significantly based on various factors, such as the timing of executing the foreign currency forward contracts versus the movement of the currencies as well as the fluctuations in the account balances throughout each reporting period. The fair value of the foreign currency forward contracts is based on the difference between the contract rate and the current exchange rate. The fair value of the foreign currency forward contracts is measured using observable market information. These inputs would be considered Level 2 in the fair value hierarchy. At June 30, 2017 and December 30, 2016 , foreign currency forward contracts were revalued at then-current foreign exchange rates with the changes in valuation reflected directly in "Other, net" in the Condensed Consolidated Statements of Comprehensive Income offsetting the transaction gain/loss recorded on the foreign currency-denominated accounts. At June 30, 2017 and December 30, 2016 , the gross notional amount of the foreign currency forward contracts outstanding was approximately $147.5 million and $114.8 million , respectively. At June 30, 2017 and December 30, 2016 , the net notional amount of the foreign currency forward contracts outstanding was approximately $112.3 million and $90.9 million , respectively. While all of the Company's foreign currency forward contracts are subject to master netting arrangements with its counterparties, assets and liabilities related to derivative instruments are presented on a gross basis within the Condensed Consolidated Balance Sheets. The gross fair value of derivative assets and liabilities are immaterial. The combined effect of changes in both the equity and bond markets resulted in changes in the cash surrender value of company-owned life insurance policies associated with the company-sponsored deferred compensation program. |
Accumulated Other Comprehensive Income | Accumulated other comprehensive loss: Unrealized gains and losses are accumulated in "Accumulated other comprehensive loss" ("AOCI"). These changes are also reported in "Other comprehensive income" on the Condensed Consolidated Statements of Comprehensive Income. These include unrealized gains and losses related to the Company's defined benefit obligations and foreign currency translation. See Note 5. "Pension Plans" for pension related amounts reclassified into net income. Investments in several subsidiaries are recorded in currencies other than the USD. As these foreign currency denominated investments are translated at the end of each period during consolidation using period-end exchange rates, fluctuations of exchange rates between the foreign currency and the USD increase or decrease the value of those investments. These fluctuations and the results of operations for foreign subsidiaries, where the functional currency is not the USD, are translated into USD using the average exchange rates during the periods reported, while the assets and liabilities are translated using period-end exchange rates. The assets and liabilities-related translation adjustments are recorded as a separate component of AOCI, "Foreign currency translation." In addition, as Anixter's subsidiaries maintain investments denominated in currencies other than local currencies, exchange rate fluctuations will occur. Borrowings are raised in certain foreign currencies to minimize the exchange rate translation adjustment risk. |
SUMMARY OF SIGNIFICANT ACCOUN15
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Summary of Components of Other Net Reflected in Consolidated Statements of Operations | Other, net: The following represents the components of "Other, net" as reflected in the Condensed Consolidated Statements of Comprehensive Income: Three Months Ended Six Months Ended (In millions) June 30, July 1, June 30, July 1, Other, net: Foreign exchange $ (1.3 ) $ (1.4 ) $ (2.0 ) $ (4.5 ) Cash surrender value of life insurance policies 0.5 0.6 1.1 1.2 Other (0.2 ) — (0.3 ) (0.3 ) Total other, net $ (1.0 ) $ (0.8 ) $ (1.2 ) $ (3.6 ) |
DEBT (Tables)
DEBT (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Text Block [Abstract] | |
Debt | Debt is summarized below: (In millions) June 30, December 30, Long-term debt: 5.50% Senior notes due 2023 $ 346.5 $ 346.3 5.125% Senior notes due 2021 396.1 395.7 5.625% Senior notes due 2019 348.1 347.7 Canadian term loan 59.1 95.4 Revolving lines of credit 185.2 197.1 Other 2.0 3.5 Unamortized deferred financing costs (5.8 ) (6.9 ) Total long-term debt $ 1,331.2 $ 1,378.8 |
PENSION PLANS (Tables)
PENSION PLANS (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Text Block [Abstract] | |
Components of Net Periodic Benefit Costs | Components of net periodic pension cost are as follows: Three Months Ended Domestic Foreign Total (In millions) June 30, 2017 July 1, 2016 June 30, 2017 July 1, 2016 June 30, 2017 July 1, 2016 Service cost $ 1.2 $ 1.2 $ 1.4 $ 1.5 $ 2.6 $ 2.7 Interest cost 2.7 2.8 1.7 2.3 4.4 5.1 Expected return on plan assets (3.8 ) (3.5 ) (2.1 ) (2.6 ) (5.9 ) (6.1 ) Net amortization (a) 0.7 0.5 0.7 0.7 1.4 1.2 Settlement charge — — — 9.6 — 9.6 Net periodic pension cost $ 0.8 $ 1.0 $ 1.7 $ 11.5 $ 2.5 $ 12.5 (a) Reclassified into operating expenses from AOCI. Six Months Ended Domestic Foreign Total (In millions) June 30, 2017 July 1, 2016 June 30, 2017 July 1, 2016 June 30, 2017 July 1, 2016 Service cost $ 2.4 $ 2.4 $ 2.9 $ 3.0 $ 5.3 $ 5.4 Interest cost 5.5 5.7 3.4 4.4 8.9 10.1 Expected return on plan assets (7.5 ) (7.1 ) (4.3 ) (5.1 ) (11.8 ) (12.2 ) Net amortization (a) 1.2 1.0 1.5 1.3 2.7 2.3 Settlement Charge — — — 9.6 — 9.6 Net periodic pension cost $ 1.6 $ 2.0 $ 3.5 $ 13.2 $ 5.1 $ 15.2 (a) Reclassified into operating expenses from AOCI. |
BUSINESS SEGMENTS (Tables)
BUSINESS SEGMENTS (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Segment Information | Segment information for the three and six months ended June 30, 2017 and July 1, 2016 are as follows: (In millions) Second Quarter of 2017 NSS EES UPS Corporate Total Net Sales $ 1,029.4 $ 561.5 $ 410.5 $ — $ 2,001.4 Operating income 64.9 29.6 21.3 (33.1 ) 82.7 Second Quarter of 2016 NSS EES UPS Corporate Total Net Sales $ 1,044.7 $ 555.1 $ 355.9 $ — $ 1,955.7 Operating income 64.9 23.9 12.0 (44.1 ) 56.7 Six Months of 2017 NSS EES UPS Corporate Total Net Sales $ 2,014.3 $ 1,088.9 $ 794.0 $ — $ 3,897.2 Operating income 126.7 57.5 37.5 (70.0 ) 151.7 Six Months of 2016 NSS EES UPS Corporate Total Net Sales $ 1,993.8 $ 1,061.1 $ 717.0 $ — $ 3,771.9 Operating income 123.7 46.4 26.3 (79.4 ) 117.0 |
Changes in Goodwill | The following table presents the changes in goodwill allocated to the Company's reporting units during the six months ended June 30, 2017 : (In millions) NSS EES UPS Total Balance as of December 30, 2016 $ 405.0 $ 181.0 $ 178.6 $ 764.6 Foreign currency translation 2.1 0.3 4.4 6.8 Balance as of June 30, 2017 $ 407.1 $ 181.3 $ 183.0 $ 771.4 |
SUMMARIZED FINANCIAL INFORMAT19
SUMMARIZED FINANCIAL INFORMATION OF ANIXTER INC. (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Text Block [Abstract] | |
CONDENSED CONSOLIDATED BALANCE SHEETS | The following summarizes the financial information for Anixter Inc.: ANIXTER INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In millions) June 30, December 30, Assets: Current assets $ 2,796.1 $ 2,688.3 Property, equipment and capital leases, net 155.3 148.4 Goodwill 771.4 764.6 Intangible assets, net 400.2 415.4 Other assets 87.8 84.8 $ 4,210.8 $ 4,101.5 Liabilities and Stockholder's Equity: Current liabilities $ 1,319.6 $ 1,264.9 Subordinated notes payable to parent — 0.7 Long-term debt 1,341.8 1,390.1 Other liabilities 156.1 156.8 Stockholder’s equity 1,393.3 1,289.0 $ 4,210.8 $ 4,101.5 |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME | ANIXTER INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME Three Months Ended Six Months Ended (In millions) June 30, July 1, June 30, July 1, Net sales $ 2,001.4 $ 1,955.7 $ 3,897.2 $ 3,771.9 Operating income $ 84.6 $ 58.2 $ 155.2 $ 120.1 Income from continuing operations before income taxes $ 65.4 $ 37.4 $ 116.7 $ 76.1 Net loss from discontinued operations $ — $ (0.3 ) $ — $ (0.7 ) Net income $ 41.2 $ 21.2 $ 72.9 $ 44.8 Comprehensive income $ 51.0 $ 23.0 $ 97.7 $ 65.9 |
SUMMARY OF SIGNIFICANT ACCOUN20
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Summary of Components of Other Net Reflected in Consolidated Statements of Operations (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jul. 01, 2016 | Jun. 30, 2017 | Jul. 01, 2016 | |
Other, net: | ||||
Foreign exchange | $ (1.3) | $ (1.4) | $ (2) | $ (4.5) |
Cash surrender value of life insurance policies | 0.5 | 0.6 | 1.1 | 1.2 |
Other | (0.2) | 0 | (0.3) | (0.3) |
Total other, net | $ (1) | $ (0.8) | $ (1.2) | $ (3.6) |
SUMMARY OF SIGNIFICANT ACCOUN21
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jul. 01, 2016 | Jun. 30, 2017 | Jul. 01, 2016 | Dec. 30, 2016 | |
Summary Of Significant Accounting Policies [Line Items] | |||||
Foreign exchange | $ (1.3) | $ (1.4) | $ (2) | $ (4.5) | |
Rate of foreign currency denominated accounts not hedged | 100.00% | ||||
Gross [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Notional amount of foreign currency forward contracts | 147.5 | $ 147.5 | $ 114.8 | ||
Net [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Notional amount of foreign currency forward contracts | $ 112.3 | $ 112.3 | $ 90.9 |
DEBT (Detail)
DEBT (Detail) - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 30, 2016 |
Debt Instrument [Line Items] | ||
Long-term debt | $ 1,331.2 | $ 1,378.8 |
Unamortized deferred financing costs | (5.8) | (6.9) |
5.50% Senior notes due 2023 [Domain] | ||
Debt Instrument [Line Items] | ||
Long-term debt | 346.5 | 346.3 |
5.125% Senior notes due 2021 [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | 396.1 | 395.7 |
5.625% Senior notes due 2019 [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | 348.1 | 347.7 |
Canadian term loan [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | 59.1 | 95.4 |
Revolving lines of credit [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | 185.2 | 197.1 |
Other [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 2 | $ 3.5 |
DEBT - Additional Information (
DEBT - Additional Information (Detail) - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 30, 2016 |
Line Of Credit Facility Covenant Compliance [Line Items] | ||
Long-term debt | $ 1,331.2 | $ 1,378.8 |
Long-term Debt Fair Value | $ 1,412 | $ 1,435.6 |
INCOME TAXES - Additional Infor
INCOME TAXES - Additional Information (Detail) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jul. 01, 2016 | Jun. 30, 2017 | Jul. 01, 2016 | |
Schedule Of Income Taxes [Line Items] | ||||
Effective tax rate | 37.20% | 42.40% | 37.60% | 40.10% |
PENSION PLANS - Components of N
PENSION PLANS - Components of Net Periodic Cost (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jul. 01, 2016 | Jun. 30, 2017 | Jul. 01, 2016 | ||
Components of net periodic cost: | |||||
Service cost | $ 2.6 | $ 2.7 | $ 5.3 | $ 5.4 | |
Interest cost | 4.4 | 5.1 | 8.9 | 10.1 | |
Expected return on plan assets | (5.9) | (6.1) | (11.8) | (12.2) | |
Net amortization | [1] | 1.4 | 1.2 | 2.7 | 2.3 |
Settlement Charge | 0 | 9.6 | 0 | 9.6 | |
Net periodic cost | 2.5 | 12.5 | 5.1 | 15.2 | |
United States Pension Plan of US Entity [Member] | |||||
Components of net periodic cost: | |||||
Service cost | 1.2 | 1.2 | 2.4 | 2.4 | |
Interest cost | 2.7 | 2.8 | 5.5 | 5.7 | |
Expected return on plan assets | (3.8) | (3.5) | (7.5) | (7.1) | |
Net amortization | [1] | 0.7 | 0.5 | 1.2 | 1 |
Settlement Charge | 0 | 0 | 0 | 0 | |
Net periodic cost | 0.8 | 1 | 1.6 | 2 | |
Foreign Pension Plan [Member] | |||||
Components of net periodic cost: | |||||
Service cost | 1.4 | 1.5 | 2.9 | 3 | |
Interest cost | 1.7 | 2.3 | 3.4 | 4.4 | |
Expected return on plan assets | (2.1) | (2.6) | (4.3) | (5.1) | |
Net amortization | [1] | 0.7 | 0.7 | 1.5 | 1.3 |
Settlement Charge | 0 | 9.6 | 0 | 9.6 | |
Net periodic cost | $ 1.7 | $ 11.5 | $ 3.5 | $ 13.2 | |
[1] | Reclassified into operating expenses from AOCI. |
STOCKHOLDERS' EQUITY - Addition
STOCKHOLDERS' EQUITY - Additional Information (Detail) $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 30, 2017USD ($)shares | Jun. 30, 2017USD ($)shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares available for grant | 2,000,000 | 2,000,000 |
Restricted Stock Units (RSUs) [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting period | 4 years | |
Share granted | 173,187 | |
Fair value of shares granted | $ | $ 14.9 | |
Restricted Stock Units (RSUs) [Member] | Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting period | 6 years | |
Restricted Stock Units (RSUs) [Member] | Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting period | 3 years | |
Performance Restricted Stock Units [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share granted | 33,956 | |
Fair value of shares granted | $ | $ 3 | |
Employee stock option [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting period | 4 years | |
Director stock units [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share granted | 7,972 | 15,774 |
Fair value of shares granted | $ | $ 0.7 | $ 1.3 |
BUSINESS SEGMENTS - Segment Inf
BUSINESS SEGMENTS - Segment Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jul. 01, 2016 | Jun. 30, 2017 | Jul. 01, 2016 | |
Segment Reporting Information [Line Items] | ||||
Net sales | $ 2,001.4 | $ 1,955.7 | $ 3,897.2 | $ 3,771.9 |
Operating income | 82.7 | 56.7 | 151.7 | 117 |
Network and Security Solutions [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 1,029.4 | 1,044.7 | 2,014.3 | 1,993.8 |
Operating income | 64.9 | 64.9 | 126.7 | 123.7 |
Electrical and Electronic Solutions [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 561.5 | 555.1 | 1,088.9 | 1,061.1 |
Operating income | 29.6 | 23.9 | 57.5 | 46.4 |
Utility Power Solutions [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 410.5 | 355.9 | 794 | 717 |
Operating income | 21.3 | 12 | 37.5 | 26.3 |
Corporate [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 0 | 0 | 0 | 0 |
Operating income | (33.1) | (44.1) | (70) | (79.4) |
Continuing Operations [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 2,001.4 | 1,955.7 | 3,897.2 | 3,771.9 |
Operating income | $ 82.7 | $ 56.7 | $ 151.7 | $ 117 |
BUSINESS SEGMENTS - Changes in
BUSINESS SEGMENTS - Changes in Goodwill (Detail) $ in Millions | 6 Months Ended |
Jun. 30, 2017USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, Beginning Balance | $ 764.6 |
Foreign currency translation | 6.8 |
Goodwill, Ending Balance | 771.4 |
Network and Security Solutions [Member] | |
Goodwill [Roll Forward] | |
Goodwill, Beginning Balance | 405 |
Foreign currency translation | 2.1 |
Goodwill, Ending Balance | 407.1 |
Electrical and Electronic Solutions [Member] | |
Goodwill [Roll Forward] | |
Goodwill, Beginning Balance | 181 |
Foreign currency translation | 0.3 |
Goodwill, Ending Balance | 181.3 |
Utility Power Solutions [Member] | |
Goodwill [Roll Forward] | |
Goodwill, Beginning Balance | 178.6 |
Foreign currency translation | 4.4 |
Goodwill, Ending Balance | $ 183 |
SUMMARIZED FINANCIAL INFORMAT29
SUMMARIZED FINANCIAL INFORMATION OF ANIXTER INC - Additional Information (Detail) | 6 Months Ended |
Jun. 30, 2017 | |
Disclosure Summarized Financial Information Of Anixter Inc Additional Information [Abstract] | |
Description of guarantees given by parent company | Anixter International Inc. guarantees, fully and unconditionally, substantially all of the debt of its subsidiaries, which include Anixter Inc., its 100% owned primary operating subsidiary. Anixter International Inc. has no independent assets or operations and all subsidiaries other than Anixter Inc. are minor. |
SUMMARIZED FINANCIAL INFORMAT30
SUMMARIZED FINANCIAL INFORMATION OF ANIXTER INC - CONDENSED CONSOLIDATED BALANCE SHEETS (Detail) - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 30, 2016 |
Assets: | ||
Current assets | $ 2,796.7 | $ 2,688.5 |
Property, equipment and capital leases, net | 147.7 | 140.3 |
Goodwill | 771.4 | 764.6 |
Intangible assets, net | 400.2 | 415.4 |
Other assets | 87.9 | 84.8 |
Total assets | 4,203.9 | 4,093.6 |
Liabilities and Stockholder's Equity: | ||
Current liabilities | 1,318.4 | 1,263.9 |
Other liabilities | 157.9 | 158.7 |
Stockholder's equity | 1,396.4 | 1,292.2 |
Total liabilities and stockholders’ equity | 4,203.9 | 4,093.6 |
Anixter Inc. [Member] | ||
Assets: | ||
Current assets | 2,796.1 | 2,688.3 |
Property, equipment and capital leases, net | 155.3 | 148.4 |
Goodwill | 771.4 | 764.6 |
Intangible assets, net | 400.2 | 415.4 |
Other assets | 87.8 | 84.8 |
Total assets | 4,210.8 | 4,101.5 |
Liabilities and Stockholder's Equity: | ||
Current liabilities | 1,319.6 | 1,264.9 |
Subordinated notes payable to parent | 0 | 0.7 |
Long-term debt | 1,341.8 | 1,390.1 |
Other liabilities | 156.1 | 156.8 |
Stockholder's equity | 1,393.3 | 1,289 |
Total liabilities and stockholders’ equity | $ 4,210.8 | $ 4,101.5 |
SUMMARIZED FINANCIAL INFORMAT31
SUMMARIZED FINANCIAL INFORMATION OF ANIXTER INC - CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jul. 01, 2016 | Jun. 30, 2017 | Jul. 01, 2016 | |
Condensed Financial Statements, Captions [Line Items] | ||||
Net sales | $ 2,001.4 | $ 1,955.7 | $ 3,897.2 | $ 3,771.9 |
Operating income | 82.7 | 56.7 | 151.7 | 117 |
Income from continuing operations before income taxes | 63.8 | 36.1 | 113.7 | 73.5 |
Net income from discontinued operations | 0 | (0.3) | 0 | (0.7) |
Net income | 40.1 | 20.5 | 71 | 43.3 |
Comprehensive income | 50 | 22.3 | 95.9 | 64.4 |
Anixter Inc. [Member] | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net sales | 2,001.4 | 1,955.7 | 3,897.2 | 3,771.9 |
Operating income | 84.6 | 58.2 | 155.2 | 120.1 |
Income from continuing operations before income taxes | 65.4 | 37.4 | 116.7 | 76.1 |
Net income from discontinued operations | 0 | (0.3) | 0 | (0.7) |
Net income | 41.2 | 21.2 | 72.9 | 44.8 |
Comprehensive income | $ 51 | $ 23 | $ 97.7 | $ 65.9 |