Anixter International Inc (NYSE:AXE) Q1 2018 Earnings Conference Call - Final Transcript

Apr 26, 2018 • 10:30 am ET


Anixter International Inc (NYSE:AXE) Q1 2018 Earnings Conference Call - Final Transcript


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Good morning. My name is Mike, and I will be your conference operator today. At this time I'd like to welcome everyone to the Anixter First Quarter 2018 Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions]

I will now turn the call over to Lisa Gregory, Vice President of Investor Relations. You may begin your conference.

Lisa Gregory

Thank you, Mike. Good morning and thank you all for joining us today for our first quarter 2018 earnings call. This morning Bob Eck, Chief Executive Officer; Bill Galvin, President and Chief Operating Officer; and Ted Dosch, Executive Vice President and CFO will review our first quarter financial results and today's announcement regarding agreements to acquire security businesses in Australia and New Zealand. Following their remarks, we will open the line to take your questions.

Before we begin, I'd to remind everyone that we will be making forward-looking statements in today's presentation, which are subject to a number of factors that could cause actual results to differ materially from what is indicated here. We do not undertake to update these statements and refer you to our SEC filings for more information. Today's presentation includes both GAAP and non-GAAP financial results, the reconciliation of which is detailed in our earnings release and in the slides posted on our Investor Relations website.

With that, I'll turn the call over to Bob.

Robert Eck

Good morning and thank you for joining us for our first quarter 2018 earnings call. Today, I will provide some brief comments on our first quarter results and full year sales outlook. I will then turn the call to Bill Galvin to discuss our sales results in more detail. Ted will then review our financial performance in more detail and provide additional thoughts on 2018. After Ted's comments, we will take your questions.

Before reviewing our first quarter results, this morning, we announced that we have entered into definitive agreements to acquire three security products businesses for approximately $151 million. With $114 million in sales and $20 million in adjusted EBITDA, both on a trailing 12-month basis, these businesses represent a compelling opportunity for Anixter to enhance our competitive position in these attractive markets. Consistent with our strategy to pursue acquisitions that support specific product or geographic initiatives, this acquisition brings new, innovative products and solutions to Anixter that we believe will be valued by existing customers across our geographic footprint. Similar to our recent acquisitions, synergy opportunities are primarily revenue based, cross-selling opportunities in all segments. Importantly, these are higher margin and more solutions-based businesses. We believe they will have a positive margin impact on our Security business.

Moving to our first quarter results, as you saw from this morning's press release, we delivered first quarter 2018 GAAP earnings per diluted share of $0.94 and adjust diluted earnings per share increased 6.4% to $1.16. Unless otherwise noted, all of our comparisons refer to the first quarter