Anixter International Inc. (NYSE:AXE) Q4 2014 Earnings Conference Call - Final Transcript

Feb 03, 2015 • 10:30 am ET

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Anixter International Inc. (NYSE:AXE) Q4 2014 Earnings Conference Call - Final Transcript

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Presentation
Operator
operator

Good day, and welcome to the Anixter 2014 Fourth Quarter Earnings Release Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Lisa Meers for opening comments and remarks. Please begin when ready, Ms. Meers.

Executive
Lisa Meers

Thank you, Jamie. Good morning, and thank you for joining us for Anixter's fourth quarter 2014 earnings call. Today, I'm joined by Bob Eck, President and CEO; and Ted Dosch, Executive Vice President and CFO, to discuss our fourth quarter financial results. After their remarks, we will open the line up to take your questions.

(Forward-Looking Cautionary Statements)

Executive
Lisa Meers

(Forward-Looking Cautionary Statements)

Now I'll turn the call over to Bob.

Executive
Robert J. Eck

Good morning, and thank you for joining us for a review of our fourth quarter 2014 results. This morning I will offer my perspective on our business, and I'll take you on our end markets and share our thoughts on how we view the macro environment impacting our business. Then I will turn the call to Ted to detail our financial performance and provide our outlook on the coming year. Following Ted's comments we will take your questions.

As you saw from this morning's press release, we delivered adjusted earnings per share per diluted share of $1.39 on a record fourth quarter sales of $1.67 billion, reflecting organic sales growth of 4.3% on a per day basis. We call that the current quarter had 61 billing days compared to 65 billing days in last year's fourth quarter, which negatively impacted sales by over 6%.

And our organic sales are adjusted for the impacts of currency, copper and acquisitions all of which had a significant impacts in the current quarter. Organic sales performance was roughly in line with our expectations and we delivered strong performance in our Enterprise Cabling & Security Solutions segment.

However, we were not satisfied with our results as a combination of macroeconomic factors pose challenges for our business. And nearly 10% drop in copper prices in the quarter and an unprecedented and strengthening of the U.S. dollar during the quarter and persistent weak economy in Continental Europe combined to drive lower operating performance it's been in the prior year.

Before turning to a discussion of each segment. Let me highlight that from a geographic perspective, we were pleased with our results that the U.S. and emerging markets, achieving mid to high single digit organic sales growth on a per day basis in both regions.

In spite of headwinds from the persistent challenging macroeconomic environment in Europe both Cabling businesses achieved solid organic growth on a per day basis in Europe as well. Turning to our Enterprise Cabling & Security Solutions business, our fourth quarter ECS sales of $950 million increased by 17% year-over-year.

ECS organic sales growth was 7% on a per day basis, sequentially ECS increased by 7%. Excluding Tri-Ed and foreign exchange sequential sales were flat on a per day basis. Both parts for our ECS segment performed well. Our core infrastructure business