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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
FORM 10-K
x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITES EXCHANGE ACT OF 1934
For the fiscal year ended December 29, 2000 or
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
(847) 677-2600
(Address and telephone number of principal executive offices in its charter)
Securities registered pursuant to Section 12 (b) of the Act:
Name of each exchange
Title of each class on which registered
Common stock, $1 par value New York Stock Exchange
Convertible notes due 2020 New York Stock Exchange
Securities registered pursuant to Section 12 (g) of the Act: None.
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 _
Indicate by check mark if disclosure of delinquent filers pursuant to item
405 of Regulations S-K is not contained herein, and will not be contained, to
the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.
Yes x No _
The aggregate market value of the shares of Registrant's Common Stock, $1
par value, held by nonaffiliates of Registrant was approximately $843,287,518 as
of March 1, 2001.
At March 1, 2001, 37,231,237 shares of Registrant's Common Stock, $1 par
value, were outstanding.
Documents incorporated by reference:
Certain portions of the Registrant's Proxy Statement for the 2001 Annual
Meeting of Stockholders of Anixter International Inc. are incorporated by
reference into Part III. This document consists of 40 pages. Exhibit List begins
on page 33.
TABLE OF CONTENTS
PART I
Item 1. Business of the Company.......................................................................1
Item 2. Properties....................................................................................3
Item 3. Legal Proceedings.............................................................................3
Item 4. Submission of Matters to a Vote of Security Holders...........................................3
PART II
Item 5. Market for the Registrant's Common Equity and Related Stockholder Matters.....................4
Item 6. Selected Financial Data.......................................................................4
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.........5
Item 7A. Quantitative and Qualitative Disclosures about Market Risk...................................10
Item 8. Consolidated Financial Statements and Supplementary Data.....................................10
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.........30
PART III
Item 10. Directors and Executive Officers of the Registrant...........................................31
Item 11. Executive Compensation.......................................................................32
Item 12. Security Ownership of Certain Beneficial Owners and Management...............................32
Item 13. Certain Relationships and Related Transactions...............................................32
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K..............................32
44
PART I
ITEM 1. Business of the Company.
(a) General Development of Business
Anixter International Inc. (the "Company"), formerly known as Itel
Corporation, which was incorporated in Delaware in 1967, is engaged in the
distribution of communications and specialty wire and cable products through
Anixter Inc. and its subsidiaries (collectively "Anixter").
In the fourth quarter of 1998, the Company decided to exit its Integration
segment and accordingly, the Integration segment is reflected as a discontinued
operation in these financial statements. The European Integration business was
sold in the fourth quarter of 1998. In 1999, the Company completed the disposal
of the Integration segment with North America Integration being sold in the
first quarter of 1999 followed by the sale of Asia Pacific Integration in the
fourth quarter of 1999.
In 1998, the Company sold its remaining 19% interest in ANTEC Corporation
and its subsidiaries (collectively "ANTEC"), a broadband communications
technology company. As of January 2, 1998, the Company owned approximately 19%
of ANTEC, which was reduced from 31% in February 1997, by the issuance of
additional stock by ANTEC in connection with a merger.
In June 1998, the Company purchased 100% of the outstanding common stock of
Pacer Electronics, Inc., a distributor of wire and cable products along with
value added services to original equipment manufacturers in the electronic
industry.
In August 1997, the Company purchased approximately 93% of the outstanding
common stock of Accu-Tech Corporation, a networking and wiring systems
specialist distributing products for data, voice, video and electrical
applications.
(b) Financial Information about Industry Segments
For certain financial information concerning the Registrant's business
segments, see Note 12 "Business Segments" of the Notes to the Consolidated
Financial Statements of this report.
(c) Narrative Description of Business
In the fourth quarter of 1998, the Company decided to exit its Integration
segment and accordingly, the Integration segment is reflected as a discontinued
operation in these financial statements. All narrative descriptions and year to
year comparisons have been restated to exclude Integration.
Anixter is a leading global distributor of communication products used in
building enterprise and service provider (companies that offer
telecommunications services, including internet service providers, cable
companies and wireless communications providers) data, voice and video networks.
In addition, Anixter is a leading distributor of specialty wire and cable
products to original equipment manufacturers and to industrial companies for
maintenance and repair operations ("MRO"). Anixter stocks and/or sells a full
line of these products from a network of 94 locations in the United States, 18
in Canada, 14 in the United Kingdom, 27 in Continental Europe, 16 in Latin
America, 4 in Australia, and 14 in Asia.
Anixter sells approximately 87,000 products to 85,000 active customers and
works with over 1,600 active suppliers. Its customers include international,
national, regional and local companies that are end users of these products and
engage in manufacturing, telecommunications, internet service, finance,
education, health care, transportation, utilities and government. Also, Anixter
sells products to resellers such as contractors, installers, system integrators,
value added resellers, architects, engineers and wholesale distributors. The
average order size is approximately $1,900.
The products distributed by Anixter include communication (voice, data and
video) products used to connect personal computers, peripheral equipment,
mainframe equipment and various networks to each other. The products include an
assortment of transmission media (copper and fiber optic cable) connectivity
products and support and supply products. In the enterprise network
communications market, Anixter sells products that are incorporated in local
area networks ("LANs"), the internetworking of LANs to form wide area networks
and enterprise networks. In the service provider market, Anixter provides the
installation-related materials that support central
switching offices, web hosting sites and remote transmission sites. Anixter's
products also include electrical wiring system products used for the
transmission of electrical energy and control/monitoring of industrial
processes.
Anixter also provides contractual supply chain management of installation
and repair-related materials for customers who install and/or maintain
communication equipment ("Integrated Supply"). Such contracts are generally for
time periods in excess of one year and include interfacing of Anixter and
customer information systems, the procurement, warehousing and delivery of goods
by Anixter, and in certain cases, the maintenance of dedicated warehouse
facilities.
An important element of Anixter's overall business strategy is to develop
and maintain close relationships with its key suppliers, which include the
world's leading manufacturers of communications cabling, connectivity, support
and supply products and electrical wiring systems products. Such relationships
stress joint product planning, inventory management, technical support,
advertising and marketing. In support of this strategy, Anixter does not compete
with its suppliers in product design or manufacturing activities. Approximately
45% of Anixter's dollar volume purchases in 2000 were from its five largest
suppliers.
Anixter enhances its value proposition to both key suppliers and customers
through its industry leading specifications and testing lab in suburban Chicago.
In this Underwriter Laboratories-certified lab, Anixter works with key suppliers
to develop product specifications and to test compliance. The company uses the
same lab to design and test various product configurations for customers to
optimize their network performance.
Anixter cost-effectively serves its customers' needs through its
proprietary computer system, which connects substantially all of its warehouses
and sales offices throughout the world. The system is designed for sales
support, order entry, inventory status, order tracking, credit review and
material management. In addition, Anixter operates a series of large modern hub
warehouses in key distribution centers in North America, Europe, Asia and Latin
America which provide for cost-effective and reliable storage and delivery of
products to its customers. The hub warehouses store the bulk of Anixter's
inventory. Some smaller warehouses are also maintained to maximize
transportation efficiency and to provide for the local pick-up needs of
customers in certain cities.
Anixter has also developed close relationships with certain freight,
package delivery and courier services to minimize transit times between its
facilities and customer locations. The combination of its information systems,
distribution network and delivery partnerships allows Anixter to provide a high
level of customer service while maintaining a reasonable level of investment in
inventory and facilities.
The Company competes with distributors and manufacturers who sell products
directly or through existing distribution channels to end users or other
resellers. In addition, future performance could be subject to economic
downturns, possible rapid changes in applicable technologies or regulatory
changes, which may substantially change the cost and/or accessibility of public
network bandwidth. To guard against inventory obsolescence, the Company has
negotiated various return and price protection agreements with its key
suppliers. Although relationships with its suppliers are good, the loss of a
major supplier could have a temporary adverse effect on the Company's business,
but would not have a lasting impact since comparable products are available from
alternate sources.
Investment in ANTEC
ANTEC is a communications technology company, specializing in the design
and engineering of hybrid fiber/coax broadband networks and the manufacturing,
materials management and distribution of products for these networks.
During the first half of 1998, the Company sold its remaining 7.1 million
shares of ANTEC stock, resulting in net after-tax proceeds of approximately $100
million. 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 February 6,
1997.
Miscellaneous
At December 29, 2000, the Company and its subsidiaries employed
approximately 5,900 people. Backlog orders are not material as a significant
amount of orders are shipped within 24 to 48 hours of receipt.
(d) Financial Information about Foreign and Domestic Operations and Export
Sales
For information concerning foreign and domestic operations and export
sales, see Note 9 "Income Taxes" and Note 12 "Business Segments" of this report.
ITEM 2. Properties.
Substantially all of the Company's facilities are leased.
ITEM 3. Legal Proceedings.
In the ordinary course of business, the Company and its subsidiaries became
involved as plaintiffs or defendants in various legal proceedings. The claims
and counterclaims in such litigation, including those for punitive damages,
individually in certain cases and in the aggregate, involve amounts which may be
material. However, it is the opinion of the Company's management, based upon the
advice of its counsel, that the ultimate disposition of pending litigation will
not be material.
ITEM 4. Submission of Matters to a Vote of Security Holders.
During the fourth quarter of 2000, no matters were submitted to a vote of
the security holders.
PART II
ITEM 5. Market for the Registrant's Common Equity and Related Stockholder
Matters.
Anixter International Inc.'s Common Stock is traded on the New York Stock
Exchange under the symbol AXE. Stock price information is set forth in Note 14
("Selected Quarterly Financial Data (Unaudited)") of this report. As of March 1,
2001, the Registrant had 4,081 shareholders of record.
ITEM 6. Selected Financial Data.
(In millions, except per share amounts)
Fiscal Year
Results of operations: 2000 1999 1998 1997 1996
-------- -------- -------- -------- --------
Net sales (a) $3,514.4 $2,712.0 $2,390.1 $2,126.4 $1,847.4
Operating income 189.8 112.8 87.0 91.1 62.2
Interest expense and other, net (b) (55.2) (34.6) (34.8) (28.5) (24.0)
Gain on ANTEC investment -- -- 24.3 2.2 4.1
Income from continuing operations (c) 78.7 69.7 44.7 37.4 22.6
Income from discontinued operations -- 54.5 20.9 7.9 13.5
Net income 78.7 124.2 65.6 45.3 36.1
Basic income per share:
Continuing operations $2.15 $1.86 $1.00 $0.79 $0.46
Net income 2.15 3.31 1.46 0.95 0.73
Diluted income per share:
Continuing operations $2.03 $1.83 $0.99 $0.78 $0.45
Net income 2.03 3.26 1.45 0.95 0.72
Financial position at year-end:
Total assets $1,686.0 $ 1,434.7 $1,335.1 $ 1,333.6 $1,182.5
Total debt $ 451.9 $ 468.0 $ 543.6 $ 468.8 $ 468.4
Stockholders' equity (d) $ 554.9 $ 456.4 $ 411.5 $ 477.0 $ 435.5
Diluted book value per share $ 13.57 $ 11.99 $ 9.09 $ 9.98 $ 8.72
Diluted shares (in thousands) 40,889 38,078 45,263 47,775 49,949
Year end outstanding shares (in thousands) 37,655 35,924 41,878 47,297 48,007
Notes:
(a) Prior period sales amounts have been restated due to a current
accounting pronouncement requiring customer charges for shipping and
handling costs to be classified as sales. This change in accounting
increased sales and operating expenses by $60.0 million, $42.0 million,
$41.6 million, $35.5 million and $30.9 million in 2000, 1999, 1998,
1997 and 1996, respectively.
(b) In the fourth quarter of 2000, the Company incurred an $8.8 million
charge relating to the discount on the initial sale of accounts
receivable to an unconsolidated wholly-owned special purpose
corporation in connection with an accounts receivable securitization
program.
(c) In the third quarter of 1999, the Company recorded a $24.3 million tax
benefit in continuing operations for the reversal of previously
established tax reserves determined to be no longer necessary.
(d) Stockholders' equity reflects treasury stock purchases of $15.4
million, $91.9 million, $101.8 million, $14.2 million and $52.1 million
in 2000, 1999, 1998, 1997 and 1996, respectively. In addition,
stockholders' equity includes unrealized after-tax gains on marketable
equity securities available-for-sale of $19.8 million at January 2,
1998.
ITEM 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
The following Management's Discussion and Analysis of Financial Condition
and Results of Operations may contain various "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended, which can be
identified by the use of forward-looking terminology such as "believes",
"expects", "prospects", "estimated", "should", "may" or the negative thereof or
other variations thereon or comparable terminology indicating the Company's
expectations or beliefs concerning future events. The Company cautions that such
statements are qualified by important factors that could cause actual results to
differ materially from those in the forward-looking statements, a number of
which are identified in this report. Other factors could also cause actual
results to differ materially from expected results included in these statements.
These factors include general economic conditions, technology changes, changes
in supplier or customer relationships, exchange rate fluctuations and new or
changed competitors.
In the fourth quarter of 1998, the Company decided to exit its Integration
segment and accordingly, the Integration segment is reflected as a discontinued
operation in these financial statements. The information contained in this
financial review should be read in conjunction with the consolidated financial
information on pages 12 to 30 of this Report.
Financial Liquidity and Capital Resources
Asset Sales and Other Dispositions
ANTEC Investment: During the first half of 1998, the Company sold its
remaining 7.1 million shares of ANTEC stock, resulting in net after tax proceeds
of approximately $100 million. As of January 2, 1998, the Company's interest in
ANTEC was approximately 19%. 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
February 6, 1997.
Discontinued Operations and Assets held for Sale: In the fourth quarter of
1998, the Company decided to exit its Integration segment and accordingly, the
Integration segment is reflected as a discontinued operation in these financial
statements. The European Integration business was sold in the fourth quarter of
1998. In 1999, the Company completed the disposal of the Integration segment.
The North America Integration business was sold in the first quarter of 1999 and
the Asia Pacific Integration business was sold in the fourth quarter of 1999.
Total proceeds received from the sale of the Integration business were $238.3
million, resulting in an after-tax gain of $50.6 million. (Loss)/Income from
discontinued operations was $(2.5) million and $7.7 million in 1999 and 1998,
respectively. See Note 3 "Discontinued Operations" in the Notes to the
Consolidated Financial Statements for further information.
The Company sold certain other assets for $25.1 million and $43.0 million,
resulting in an after-tax (loss)/gain of $(2.0) million and $13.2 million in
1999 and 1998, respectively.
Financings
On June 28, 2000, the Company issued $792 million 7% zero-coupon
convertible notes due 2020. The net proceeds from the issue were $193 million
and were initially used to repay working capital borrowings under the floating
rate bank line of credit. The Company expects to reborrow such amounts under the
line of credit from time to time for general corporate purposes. The discount
associated with the issuance is being amortized through June 28, 2020, using the
effective interest rate method. Issuance costs were $6.6 million and are being
amortized through June 28, 2020, using the straight line method.
On October 6, 2000, the Company entered into two new financing arrangements
to support further business growth. The new agreements consist of a $500
million, senior unsecured, revolving credit agreement, and a $275 million
accounts receivable securitization program. The new revolving credit line
includes a $390 million, five-year agreement, plus a $110 million, 364-day
agreement. These facilities replaced the existing $550 million revolving credit
agreement set to mature in 2001.
The new accounts receivable securitization program is conducted through
Anixter Receivables Corporation ("ARC") which is a wholly-owned unconsolidated
subsidiary of the Company. The program includes a majority of the accounts
receivable
originating in the United States and consists of a series of 364-day facilities.
Initially, $257.0 million of the accounts receivable were sold and removed from
the balance sheet. Net proceeds of $236.3 million were used to reduce
outstanding debt. A non-operating charge of $8.8 million, primarily relating to
the discount on the initial sale of accounts receivable to ARC, was recorded at
inception of the program in the fourth quarter. The company expects to
substantially recover the charge during the course of the program. In addition,
the Company incurred $3.8 million in other costs associated with the Company's
equity interest in ARC. These costs primary relate to the finance charges
incurred by ARC to fund the purchases of the accounts receivable from Anixter.
In September 1996, Anixter filed a shelf registration statement with the
Securities and Exchange Commission to offer from time to time up to $200 million
aggregate principal amount of unsecured notes. On September 17, 1996, Anixter
issued $100 million of these notes due September 2003. The notes, which bear
interest at 8%, contain various restrictions with respect to secured borrowings
and are unconditionally guaranteed by the Company.
At December 29, 2000, $377.1 million was available under the bank revolving
lines of credit at Anixter Inc., of which $46.9 million was available to pay the
Company for intercompany liabilities.
The Company authorized the repurchase of up to 1.5 million shares in 2000,
with the volume and timing to depend on market conditions. As of December 29,
2000, the Company repurchased 768,776 shares at an average cost of $19.97.
Purchases were made on the open market or through other transactions and were
financed through available cash from the sale of the Integration business and
other non-core assets. On February 23, 2001, the Company authorized the
repurchase of up to 1.0 million additional shares, on the open market, with the
volume and timing to depend on market conditions.
Cash Flow
Year ended December 29, 2000: Consolidated net cash provided by continuing
operating activities was $56.3 million in 2000 compared to $3.8 million in 1999.
Cash provided by continuing operating activities increased primarily due to net
proceeds of $236.3 million received in connection with the receivable
securitization program, partially offset by higher working capital requirements.
Consolidated net cash used by investing activities was $26.3 million in 2000
versus $15.9 million in 1999. In the first quarter of 2000, the Company
purchased a small communication products distribution company in Australia for
$6.7 million. In the third quarter of 2000, the Company sold the net assets of a
wholly-owned U.S. subsidiary of its communication products distribution business
for $4.6 million in cash and notes receivable. In the fourth quarter of 1999,
the Company acquired a small specialty wire and cable company in Europe for $2.6
million. Capital expenditures were $22.6 million in 2000 compared to $13.8
million in 1999. The increase primarily relates to the expansion of our
distribution centers. Capital expenditures are expected to be approximately $25
to $30 million in 2001. Consolidated net cash used by financing activities was
$13.2 million in 2000 in comparison to $160.3 million used in 1999. In 1999, the
Company had treasury stock purchases of $91.9 million as compared to $15.4
million in 2000. In addition, in 2000 the Company received $44.6 million
relating to the exercise of 2.2 million stock options compared to $10.5 million
received in 1999. Net repayment of long-term borrowings was $21.5 and $73.0
million in 2000 and 1999, respectively. In 1999, proceeds from the sale of the
Integration business was used to pay down long-term debt. Cash used for
discontinued operations was $13.5 million in 2000 compared to $169.4 million
provided in 1999. In 1999, proceeds of $238.3 million were received from the
sale of the Integration business.
Year ended December 31, 1999: Consolidated net cash provided by continuing
operating activities was $3.8 million in 1999 compared to $44.0 million used in
1998. Cash provided by continuing operating activities increased primarily as a
result of an increase in operating income and timing of inventory payments.
Consolidated net cash used by investing activities was $15.9 million in 1999
versus $39.4 million provided in 1998. The decline in proceeds from investing
activities resulted from the sale of the Company's remaining investment in ANTEC
for $104.3 million in 1998. This was partially offset in 1998 by the acquisition
of Pacer Electronics, Inc. for $38.1 million. In the fourth quarter of 1999, the
Company acquired a small specialty wire and cable company in Europe for $2.6
million. Capital expenditures were $13.8 million and $26.4 million in 1999 and
1998, respectively. Consolidated net cash used by financing activities was
$160.3 million for 1999 in comparison to $30.0 million in 1998. The change
primarily resulted from a net paydown of long term debt of $73.0 million in 1999
versus net proceeds from the issuance of long-term debt of $73.3 million in
1998. Proceeds of $238.3 million received from the sale of the Integration
business were used to pay down long term debt and purchase treasury stock.
Interest Expense: Interest expense from continuing operations was $43.3
million, $34.9 million and $31.7 million for 2000, 1999 and 1998, respectively.
The increase in the interest expense for 2000 was a result of both higher
interest rates and debt levels to fund higher levels of working capital. The
Company has entered into interest rate agreements which effectively fix or cap,
for a period of time, the interest rate on a portion of its floating-rate
obligations. As a result, the interest rate on approximately 91% of debt
obligations
at December 29, 2000, is fixed or capped. The impact of interest rate swaps
and caps for 2000 was a decrease to interest expense of $.7 million and an
increase to interest expense of $1.3 million and $.5 million in 1999 and 1998,
respectively.
Income Taxes
Various foreign subsidiaries of the Company had aggregate cumulative NOL
carryforwards for foreign income tax purposes of approximately $168.6 million at
December 29, 2000, which are subject to various tax provisions of each
respective country. Approximately $59.8 million of this amount expires between
2001 and 2010 and $108.8 million of the amount has an indefinite life. Of the
$168.6 million NOL carryforwards of foreign subsidiaries, $89.8 million relates
to losses that have already provided a tax benefit in the U.S. due to rules
permitting flow-through of such losses in certain circumstances. Without such
losses included, the cumulative NOL carryforwards at December 29, 2000 are
approximately $78.8 million, which are subject to various provisions of each
respective country. Approximately $45.9 million of this amount expires between
2001 and 2010 and $32.9 million of the amount has an indefinite life. The
deferred tax asset, and valuation allowance, relating to foreign NOL
carryforwards have been adjusted to reflect only the carryforwards in which the
Company has not taken a tax benefit in the U.S.
During the third quarter of 1998, the Internal Revenue Service completed
its examination for the years 1993 to 1995, which included an examination of net
operating losses and credit carryforwards dating back to 1979. As a result of
the lapsing, during the third quarter of 1999, of all relevant statutes of
limitations on assessment relating to that 17-year period of time, the Company
recorded a $24.3 million tax benefit in continuing operations in 1999 for the
reversal of previously established tax reserves determined to be no longer
necessary.
Liquidity Considerations and Other
Certain debt agreements entered into by the Company's operating
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.
Results of Operations
The Company has experienced increased sales due to the continued growth of
its global communications and North American electrical wire and cable
businesses. 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 future performance could be affected by economic
downturns, possible rapid changes in applicable technologies or regulatory
changes that substantially change the cost and/or availability of public
networking bandwidth.
Year ended December 29, 2000: Income from continuing operations was $78.7
million in 2000 compared with $69.7 million in 1999. The comparative results
were favorably impacted by a 30% growth in sales and lower operating expenses as
a percentage of sales. 2000 includes an initial after-tax charge of $5.3 million
for the receivables securitization program which the Company expects to
substantially recover during the course of the program. 1999 results were
favorably impacted by a $24.3 million one-time tax benefit.
Net sales grew by 30% to $3.5 billion. The North American sales from
continuing operations experienced 34% growth to $2.7 billion from $2.0 billion
in 1999. The improvement was the result of continued rapid growth in sales to
the service provider market, strong growth in sales to the core enterprise
network communications and electrical wire and cable market and a 30% increase
in sales to the integrated supply market. In Europe, sales increased 12%
reflecting strong growth in our core enterprise network communication products,
combined with a growing amount of sales to the service provider market.
Excluding the effect of changes in exchange rates, sales improved 22%. Asia
Pacific and Latin America net sales were up 33% to $188.0 million in 2000 from
$141.7 million in 1999. The increase is a result of improved economic conditions
along with a stronger market share position.
Net sales by major market are presented in the following table:
Years ended
December 29, December 31,
(In millions) 2000 1999
----------------- ---------------
North America $2,739.3 $2,047.3
Europe 587.1 523.0
Asia Pacific and Latin America 188.0 141.7
-------- --------
$3,514.4 $2,712.0
======== ========
In 2000, operating income increased to $189.8 million from $112.8 million
in 1999. Operating margins improved to 5.4% in 2000 from 4.2% in 1999. The
improvement primarily relates to further leveraging of the expense structure
which more than offset a decline in gross margins resulting from the mix in
sales associated with the rapid growth of sales to the service provider and
integrated supply markets. Operating expenses as a percent of sales decreased
from 21% in 1999 to 18% in 2000. The lower gross margins in the service provider
and integrated supply markets corresponds with the higher operating productivity
that is inherent in the nature of those businesses, including the effects of
some very large volume, low gross profit fulfillment orders to service provider
customers. 1999 expenses include $3.0 million for headcount reductions and the
write-down of inventory to net realizable value for the Latin American
operations.
In North America, operating margins increased to 6.0% in 2000 from 5.2% in
1999. The improvement primarily relates to a reduction, as a percentage of
sales, in retained overhead costs associated with the North American Integration
business, the absence of costs associated with the Year 2000 compliance efforts
incurred in 1999 and further leveraging of the expense structure resulting from
the significant increase in sales. Europe operating income increased 19%,
reflecting the increase in sales, as operating margins remained flat. Excluding
the effect of changes in exchange rates, Europe operating income increased 27%.
Asia Pacific and Latin America recorded income of $1.0 million compared to a
loss of $14.0 million in 1999. This resulted from the 33% improvement in sales
and a reduced cost structure following the expense reduction efforts made over
the last 2 years.
Operating income (loss) by major market is presented in the following
table:
Years ended
----------------- -----------------
December 29, December 31,
2000 1999
----------------- -----------------
(In millions)
North America $164.2 $106.2
Europe 24.6 20.6
Asia Pacific and Latin America 1.0 (14.0)
------ ------
$189.8 $112.8
====== ======
Consolidated interest expense and other increased to $55.2 million in 2000
from $34.6 million in 1999. Interest expense increased $8.4 million to $43.3
million due to higher interest rates and higher levels of working capital. Other
expense of $11.9 million in 2000 primarily represents costs associated with the
receivable securitization program, of which $8.8 million relates to the initial
discounting fee.
The consolidated tax provision on continuing operations increased to $55.9
million in 2000 from $8.5 million in 1999 due to higher pre-tax earnings. 1999
includes a $24.3 million one-time tax benefit recorded to reverse previously
established tax liabilities. The 2000 effective tax rate of 41.6% is based on
pre-tax book income adjusted primarily for amortization of nondeductible
goodwill and losses of foreign operations which are not currently deductible.
Year ended December 31, 1999: Income from continuing operations was $69.7
million in 1999 compared with $44.7 million in 1998. The comparative results
were favorably impacted by a 13% growth in sales and lower operating expenses as
a percentage of sales. 1999 includes a $24.3 million one-time tax benefit
recorded to reverse previously established tax liabilities. 1998 results were
favorably impacted by a $24.3 million gain realized on the sale of the Company's
investment in ANTEC. In 1999, the Company
repurchased 6.5 million of its outstanding shares for $91.9 million.
Excluding the repurchases, diluted income per share from continuing operations
would have been $1.63 as compared to $1.83 reported.
Net sales grew by 13% to $2.7 billion. The North American sales from
continuing operations experienced 19% growth to $2.0 billion from $1.7 billion
in 1998. Improvement was a result of strong growth in the core enterprise
network communications and electrical wire and cable product sets along with
over $100 million of new volume from the service provider sector and a 72%
increase in integrated supply. Improvement in electrical wire and cable resulted
from both volume increases and higher copper prices. In Europe, sales of $523.0
million were flat compared to 1998. Excluding the effect of changes in exchange
rates, sales improved 3%. Europe was negatively impacted by soft networking
product sales and a stronger dollar. Asia Pacific and Latin America net sales
were down 4% to $141.7 million in 1999 from $147.6 million in 1998. The decline
is a result of soft economic conditions along with weaker local currencies for
the first three quarters of 1999. Asia Pacific and Latin America ended the year
with sales up 12% in the fourth quarter over 1998.
Net sales by major market are presented in the following table:
Years ended
---------------- -------------
December 31, January 1,
(In millions) 1999 1999
---------------- -------------
North America $2,047.3 $1,719.2
Europe 523.0 523.3
Asia Pacific and Latin America 141.7 147.6
-------- --------
$2,712.0 $2,390.1
======== ========
In 1999, operating income increased to $112.8 million from $87.0 million in
1998. Gross margin declined to 24.7% in 1999 from 25.8% in 1998. The very strong
sales growth of the service provider and integrated supply markets, both of
which have lower gross margins, have reduced the overall gross margin rate.
Operating expenses as a percent of sales decreased from 22% in 1998 to 21% in
1999. The lower gross margins in the service provider and integrated supply
markets corresponds with the higher operating productivity that is inherent in
the nature of those businesses. 1999 expenses include $3.0 million for headcount
reductions and the write-down of inventory to net realizable value for the Latin
American operations. In 1998, the Company incurred $3.2 million of expenses for
the consolidation and relocation of certain distribution and office facilities
in Europe, while Asia Pacific incurred $1.0 million in costs primarily relating
to headcount reductions.
In North America, operating margins declined to 5.2% in 1999 from 5.5% in
1998. The slight decline resulted primarily from higher spending on Year 2000
compliance efforts and retained overhead costs associated with the North
American Integration business. Europe operating margins improved from 2.5% in
1998 to 3.9% in 1999. Excluding the $3.2 million consolidation and relocation
costs noted above, 1998 operating margin was 3.1%. The improvement resulted from
realizing the benefits of the 1998 restructuring and continued aggressive
expense management in light of the weak sales growth. As noted above, excluding
the 1999 $3.0 million of costs for Latin America and the 1998 $1.0 million of
costs for Asia Pacific, the operating loss for Asia and Latin America was
reduced by 44%. The improvement primarily resulted from Asia Pacific, where the
Company realized the benefits from the 1998 restructuring and expense reduction
efforts.
Operating income (loss) by major market is presented in the following
table:
Years ended
---------------- ----------------
December 31, January 1,
(In millions) 1999 1999
---------------- ----------------
North America $106.2 $94.7
Europe 20.6 12.9
Asia Pacific and Latin America (14.0) (20.6)
------ ------
$112.8 $87.0
====== =======
Consolidated interest expense increased to $34.9 million in 1999 from $31.7
million in 1998. The increase resulted from higher working capital requirements.
Other expense declined from $3.1 million expense in 1998 to $.3 million income
in 1999. The expense in 1998 primarily relates to the third quarter devaluation
of the Mexican peso.
Excluding the $24.3 million tax benefit previously discussed in "Financial
Liquidity and Capital Resources", the 1999 effective income tax rate on
continuing operations was 42.0% as compared with 41.6% in 1998. The effective
tax rate exceeds the combined federal and state rate of approximately 40%
primarily as a result of non-tax-deductible goodwill amortization and start-up
losses in some foreign countries where there is no current year benefit.
Impact of Inflation: Inflation is currently not an important determinant of
Anixter's results of operations due, in part, to rapid inventory turnover.
ITEM 7A. Quantitative and Qualitative Disclosures about Market Risk.
The Company is exposed to the impact of interest rate changes and
fluctuations in foreign currencies, as well as changes in the market value of
its financial instruments. The Company periodically enters into derivatives in
order to minimize these risks, but not for trading purposes. See Note 1,
"Interest Rate Agreements and Foreign currency forward contracts," and Note 7,
"Debt," of the consolidated financial statements for further detail on interest
agreements and debt obligations outstanding.
The Company has entered into interest rate agreements which effectively fix
or cap the LIBOR component of the interest rate on a portion of its floating
rate obligations. As a result, the interest rate on approximately 91% and 65% of
debt obligations at December 29, 2000 and December 31, 1999, respectively, is
fixed or capped.
The Company prepared sensitivity analyses of its derivatives and other
financial instruments assuming a 1 percentage point adverse change in interest
rates and a 10 percent adverse change in the foreign currency contracts
outstanding. Holding all other variables constant, the hypothetical adverse
changes would increase interest expense by $3.4 million and $2.8 million and
foreign exchange losses by $3.1 million and $2.5 million in 2000 and 1999,
respectively. In 2000 and 1999, the effect of the interest change on the fair
market value of the outstanding fixed rate debt was insignificant. These
analyses did not consider the effects of the reduced level of economic activity
that could exist in such an environment and certain other factors. Further, in
the event of a change of such magnitude, management would likely take actions to
further mitigate its exposure to possible changes. However, due to the
uncertainty of the specific actions that would be taken and their possible
effects, the sensitivity analyses assume no changes in the Company's financial
structure.
ITEM 8. Consolidated Financial Statements and Supplementary Data.
Page
Report of Independent Auditors 11
Consolidated Statements of Operations 12
Consolidated Balance Sheets 13
Consolidated Statements of Cash Flows 14
Consolidated Statements of Stockholders' Equity 15
Notes to the Consolidated Financial Statements 16
Selected Quarterly Financial Data (Unaudited) 30
REPORT OF INDEPENDENT AUDITORS
The Board of Directors and Stockholders
Anixter International Inc.
We have audited the accompanying consolidated balance sheets of Anixter
International Inc. as of December 29, 2000, and December 31, 1999, and the
related consolidated statements of operations, stockholders' equity and cash
flows for each of the three years in the period ended December 29, 2000. Our
audits also included the financial statement schedules listed in the Index at
Item 14(a). These financial statements and schedules are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements and schedules based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Anixter
International Inc. at December 29, 2000, and December 31, 1999, and the
consolidated results of its operations and its cash flows for each of the three
years in the period ended December 29, 2000, in conformity with accounting
principles generally accepted in the United States. Also, in our opinion, the
related financial statement schedules, when considered in relation to the basic
financial statements taken as a whole, present fairly in all material respects
the information set forth therein.
ERNST & YOUNG LLP
Chicago, Illinois
February 1, 2001
ANIXTER INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share amounts)
Years ended
---------------------------------------------------------------------
December 29, December 31, January 1,
2000 1999 1999
-------------------- ------------------- --------------------
Net sales $ 3,514.4 $ 2,712.0 $ 2,390.1
Cost of operations:
Cost of goods sold 2,692.5 2,042.7 1,772.9
Operating expenses 623.7 549.1 523.1
Amortization of goodwill 8.4 7.4 7.1
-------------------- ------------------- --------------------
Total costs and expenses 3,324.6 2,599.2 2,303.1
-------------------- ------------------- --------------------
Operating income 189.8 112.8 87.0
Other (expenses) income:
Interest expense (43.3) (34.9) (31.7)
Gain on ANTEC investment - - 24.3
Other (11.9) 0.3 (3.1)
-------------------- ------------------- --------------------
Income before income taxes 134.6 78.2 76.5
Income tax expense 55.9 8.5 31.8
-------------------- ------------------- --------------------
Income from continuing operations 78.7 69.7 44.7
Discontinued operations:
(Loss) income from discontinued
operations, net of tax - (2.5) 7.7
Gain on disposal of discontinued
operations, net of tax - 57.0 13.2
-------------------- ------------------- --------------------
Net income $ 78.7 $ 124.2 $ 65.6
==================== =================== ====================
Basic income per share:
Continuing operations $ 2.15 $ 1.86 $ 1.00
Discontinued operations - 1.45 0.46
-------------------- ------------------- --------------------
Net income $ 2.15 $ 3.31 $ 1.46
==================== =================== ====================
Diluted income per share:
Continuing operations $ 2.03 $ 1.83 $ 0.99
Discontinued operations - 1.43 0.46
-------------------- ------------------- --------------------
Net income $ 2.03 $ 3.26 $ 1.45
==================== =================== ====================
See accompanying notes to the consolidated financial statements.
ANIXTER INTERNATIONAL INC.
CONSOLIDATED BALANCE SHEETS
(In millions, except share amounts)
December 29, December 31,
2000 1999
------------------- -------------------
ASSETS
Current Assets
Cash $ 20.8 $ 17.5
Accounts receivable (less allowances of
$14.8 in 2000 and $10.3 in 1999) 293.3 537.5
Note receivable - unconsolidated subsidiary 126.1 -
Inventories 738.4 536.4
Inventories returnable to vendor, net 120.0 -
Deferred income taxes 25.5 18.2
Other assets 10.3 11.5
------------------- -------------------
Total current assets 1,334.4 1,121.1
Property and equipment, at cost 167.1 158.6
Accumulated depreciation (110.6) (105.5)
------------------- -------------------
Net property and equipment 56.5 53.1
Goodwill (less accumulated amortization of
$86.8 in 2000 and $78.4 in 1999) 239.3 229.1
Other assets 55.8 31.4
------------------- -------------------
$ 1,686.0 $ 1,434.7
=================== ===================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 499.1 $ 340.4
Accrued expenses 139.6 131.2
Income taxes payable 8.1 6.0
------------------- -------------------
Total current liabilities 646.8 477.6
Other liabilities 32.4 32.7
Long-term debt 451.9 468.0
------------------- -------------------
Total liabilities 1,131.1 978.3
Stockholders' Equity
Common stock - - $1.00 par value, 100,000,000 shares authorized,
37,654,885 and 35,924,240 shares issued and
outstanding in 2000 and 1999, respectively. 37.7 35.9
Capital surplus 46.9 -
Accumulated other comprehensive income (52.6) (37.6)
Retained earnings 522.9 458.1
------------------- -------------------
Total stockholders' equity 554.9 456.4
------------------- -------------------
$ 1,686.0 $ 1,434.7
=================== ===================
See accompanying notes to the consolidated financial statements.
ANIXTER INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
Years ended
------------------------------------------------------
December 29, December 31, January 1,
2000 1999 1999
--------------- ------------------ -----------------
Operating activities
Net income $ 78.7 $ 124.2 $ 65.6
Adjustments to reconcile income from continuing operations to net
cash provided by (used in) continuing operating activities:
Income from discontinued operations - (54.5) (20.9)
Gain on ANTEC investment - - (24.3)
Depreciation and amortization 27.4 26.0 26.8
Accretion of zero-coupon convertible notes 7.0 - -
Deferred income taxes (3.2) (28.6) (7.4)
Changes in assets and liabilities:
Accounts receivable 91.4 (70.3) (41.7)
Inventory (329.7) (115.4) (17.8)
Accounts payable and accruals 184.0 127.9 (14.5)
Other, net 0.7 (5.5) (9.8)
--------------- ------------------ -----------------
Net cash provided by (used in) continuing operating activities 56.3 3.8 (44.0)
Investing activities
Capital expenditures (22.6) (13.8) (26.4)
Acquisitions and divestiture (3.7) (2.6) (38.1)
Proceeds from sale of ANTEC - - 104.3
Other, net - 0.5 (0.4)
--------------- ------------------ -----------------
Net cash (used in) provided by continuing investing activities (26.3) (15.9) 39.4
Financing activities
Proceeds from long-term borrowings 1,557.0 897.2 945.8
Repayment of long-term borrowings (1,578.5) (970.2) (872.5)
Proceeds from issuance of common stock 44.6 10.5 3.1
Purchases of common stock for treasury (15.4) (91.9) (101.8)
Debt issuance costs (8.3) - -
Other, net (12.6) (5.9) (4.6)
--------------- ------------------ -----------------
Net cash used in continuing financing activities (13.2) (160.3) (30.0)
--------------- ------------------ -----------------
Increase (decrease) in cash from continuing operations 16.8 (172.4) (34.6)
Cash (used in) provided by discontinued operations (13.5) 169.4 44.5
Cash at beginning of year 17.5 20.5 10.6
--------------- ------------------ -----------------
Cash at end of year $ 20.8 $ 17.5 $ 20.5
=============== ================== =================
See accompanying notes to the consolidated financial statements.
ANIXTER INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(In millions)
Accumulated Other
Comprehensive Income
----------------------------
Unrealized
Gains on
Cumulative Marketable
Common Capital Retained Translation Equity Comprehensive
Stock Surplus Earnings Adjustments Securities Income
---------- ---------- ------------ -------------- ------------ ---------------
Balance at January 2, 1998 $ 47.3 $ 47.1 $ 389.9 $ (27.1) $ 19.8
Net Income - - 65.6 - - $ 65.6
Other comprehensive income:
Foreign currency translation adjustments - - - (12.6) - (12.6)
Change in unrealized gain on
marketable equity securities (net of
tax of $12.2 million) - - - - (19.8) (19.8)
---------------
Comprehensive income $ 33.2
===============
Issuance of common stock and
related tax benefits 0.1 3.0 - - -
Purchase and retirement of
treasury stock (5.6) (50.1) (46.1) - -
---------- ---------- ------------ -------------- ------------
Balance at January 1, 1999 41.8 - 409.4 (39.7) -
Net Income - - 124.2 - - $ 124.2
Other comprehensive income:
Foreign currency translation adjustments - - - 2.1 - 2.1
---------------
Comprehensive income $ 126.3
===============
Issuance of common stock and
related tax benefits 0.6 9.9 - - -
Purchase and retirement of
treasury stock (6.5) (9.9) (75.5) - -
---------- ---------- ------------ -------------- ------------
Balance at December 31, 1999 35.9 - 458.1 (37.6) -
Net Income - - 78.7 - - $ 78.7
Other comprehensive income:
Foreign currency translation adjustments - - - (15.0) - (15.0)
---------------
Comprehensive income $ 63.7
===============
Issuance of common stock and
related tax benefits 2.5 47.7 - - -
Purchase and retirement of
treasury stock (0.7) (0.8) (13.9) - -
---------- ---------- ------------ -------------- ------------
Balance at December 29, 2000 $ 37.7 $ 46.9 $ 522.9 $ (52.6) $ -
========== ========== ============ ============== ============
See accompanying notes to the consolidated financial statements.
ANIXTER INTERNATIONAL INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Summary of Significant Accounting Policies
Organization: Anixter International Inc., formerly known as Itel
Corporation, which was incorporated in Delaware in 1967, is engaged in the
distribution of communications and specialty wire and cable products through
Anixter Inc. and its subsidiaries (collectively "Anixter").
Basis of presentation: The consolidated financial statements include the
accounts of Anixter International Inc. and its majority-owned subsidiaries,
excluding Anixter Receivables Corporation, (collectively "the Company") after
elimination of intercompany transactions. The Company's fiscal year ends on the
Friday nearest December 31 and included 52 weeks in 2000, 1999 and 1998.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
Certain amounts for prior years have been reclassified to conform to the
current year presentation.
Accounts receivable program: On October 6, 2000, the Company entered into
an accounts receivable securitization program. The program is conducted through
Anixter Receivables Corporation ("ARC"), which is a wholly-owned unconsolidated
subsidiary of the Company, on terms equivalent to those in an arms-length
transaction. The program allows the Company to sell, on an on-going basis
without recourse, a majority of the accounts receivable originating in the
United States to ARC and consists of a series of 364-day facilities. ARC may in
turn sell an interest in such receivables to a financial institution for up to a
$275 million net investment. The Company agreed to continue servicing the sold
receivables for the financial institution at market rates which approximate
cost; accordingly, no servicing asset or liability has been recorded. At
December 29, 2000, the outstanding balance of accounts receivable totaled $388.3
million; accordingly, these accounts receivable were removed from the balance
sheet. Net proceeds of $236.3 million were used to reduce outstanding debt.
Non-operating charges of $12.6 million, $8.8 million of which relates to the
discount on the initial sale of accounts receivable to ARC, were recorded as
other expenses in the 2000 consolidated statement of operations. The Company
expects to substantially recover the charges on the initial sale during the
course of the program. Also included in the non-operating charges were $3.8
million of other costs associated with the Company's equity interest in ARC.
These costs primarily relate to the finance charges incurred by ARC to fund the
purchases of the accounts receivable from Anixter.
Note receivable: The Company's $126.1 million note receivable at December
29, 2000, represents the amount due to Anixter from ARC primarily for the sale
of accounts receivable.
Inventories: Inventories, consisting primarily of finished goods, are
stated at the lower of cost or market. Cost is determined using the average-cost
method. Inventories returnable to vendor represent those inventories that have
been paid for by the Company. The inventory was returned in the first quarter of
2001.
Property and equipment: Capital expenditures are primarily for equipment,
leasehold improvements and computer software. Equipment and computer software
are recorded at cost and depreciated by applying the straight-line method over
their estimated useful lives ranging from 3 to 10 years. Leasehold improvements
are depreciated over the term of the related lease. Upon sale or retirement, the
cost and related depreciation are removed from the respective accounts, and any
gain or loss is included in income. Maintenance and repair costs are expensed as
incurred.
Goodwill: Goodwill primarily relates to the excess of cost over the fair
value of the net tangible assets of businesses acquired. The Company continually
reviews goodwill to assess recoverability from estimated undiscounted future
cash flows at the aggregate business unit level. Goodwill is amortized on a
straight-line basis over periods ranging from 20 to 40 years.
Interest rate agreements: In addition to the fixed rate 8% Senior Notes
and 7% zero-coupon convertible notes, the Company entered into interest rate
agreements which effectively fix or cap, for a period of time, the LIBOR
component of an interest rate on a
portion of its floating rate obligations. As a result, the interest rate on
approximately 91% and 65%, of debt obligations at December 29, 2000 and December
31, 1999, respectively, was fixed or capped. At December 29, 2000 and December
31, 1999, the Company had two interest rate swap agreements outstanding with a
notional amount of $25 million each. These swap agreements obligated the Company
to pay a fixed rate of approximately 6.1% through January 2003 and July 2002. At
December 29, 2000 and December 31, 1999, the Company also had one interest rate
collar agreement with a notional amount of $50 million which entitled the
Company to receive from the bank the amount by which the LIBOR component of the
floating rate interest payments exceed 6.5%. In addition, the Company is
required to pay the bank the difference between 6.3% and the floating rate when
it is below 5.3%. This interest rate collar matures in January 2002. At December
31, 1999, the Company had three additional interest rate swap agreements
outstanding with a notional amount aggregating $100 million that obligated the
Company to pay a fixed rate of approximately 6.1% through July 2000. At December
31, 1999, the Company had a cancelable interest rate swap agreement outstanding
with a notional amount of $50 million. This swap agreement obligated the Company
to pay a fixed rate of 5.7% through August 2002. However, the counterparty
exercised their right to cancel the swap in February 2000. The fair value, which
is the estimated amount at the current interest rate that the Company would
receive or pay to enter into similar interest rate agreements at December 29,
2000 and December 31, 1999, would be to pay $.5 million and receive $1.4
million, respectively. The impact of these interest rate agreements was to
decrease interest expense by $.7 million for fiscal year 2000 and increase
interest expense by $1.3 million and $.5 million for fiscal years 1999 and 1998,
respectively. The Company does not enter into interest rate transactions for
speculative purposes.
Foreign currency forward contracts: The Company purchased short-term
foreign currency forward contracts to minimize the effect of fluctuating foreign
currencies on its reported income. The impact of these foreign currency forward
contracts on the income statement was insignificant in 2000, 1999 and 1998. The
forward contracts were revalued at current foreign exchange rates, with the
changes in valuation reflected directly in income. At December 29, 2000 and
December 31, 1999, the Company had approximately $28.0 million and $24.3
million, respectively, in foreign currency forward contracts outstanding.
Revenue recognition: Sales and related cost of sales are recognized upon
shipment of products.
Advertising and sales promotion: Advertising and sales promotion costs are
expensed as incurred. Advertising and promotion costs were $11.3 million, $11.1
million and $13.3 million in 2000, 1999 and 1998, respectively.
Shipping and handling fees and costs: The Company incurred shipping and
handling fees and costs totaling $90.6 million, $70.1 million and $64.0 million
for the years ended 2000, 1999 and 1998, respectively. These costs are included
in operating expenses in the consolidated statements of operations.
Stock based compensation: In accordance with the Accounting Principles
Board Opinion 25, "Accounting for Stock Issued to Employees", compensation cost
of stock options is measured as the excess, if any, of the quoted market price
of the Company's stock at the date of the grant over the option exercise price
and is charged to operations over the vesting period. Income tax benefits
totaling $11.3 million and $2.5 million in 2000 and 1999, respectively,
attributable to stock options exercised were credited to capital surplus.
Income taxes: Using the liability method, provisions for income taxes
include deferred taxes resulting from temporary differences in determining
income for financial and tax purposes. Such temporary differences result
primarily from differences in the carrying value of assets and liabilities.
Investment in ANTEC: In 1998, the Company sold its remaining 7.1 million
shares of ANTEC stock which resulted in net after-tax proceeds of approximately
$100 million and an after-tax gain of $14.6 million. 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. As a result of this change, the Company
recorded a $1.2 million after-tax gain. As of January 2, 1998, the market value
of the Company's investment in ANTEC was $112.0 million. The Company reported
its investment in ANTEC at fair value. All unrealized gains and losses, net of
taxes, were recorded in stockholders' equity until realized.
Recently issued accounting pronouncements: In June 2000, the Financial
Accounting Standards Board issued Statement of Financial Accounting Standards
("SFAS") No. 138, "Accounting for Certain Derivative Instruments and Certain
Hedging Activities - an amendment of SFAS No. 133." These statements outline the
accounting treatment for all derivative activity. The Company
adopted these standards in the first quarter of fiscal 2001. The adoption did
not have a significant effect on its consolidated results of operations or
financial position.
On December 3, 1999, the Securities and Exchange Commission staff issued
Staff Accounting Bulletin ("SAB") No. 101. SAB No. 101 reflects the basic
principles of revenue recognition. The Company adopted SAB No. 101 in the fourth
quarter of fiscal 2000. The adoption did not have a significant effect on the
consolidated results of operations or financial position.
As required by Emerging Issues Task Force ("EITF") Issue 00-10, Accounting
for Shipping and Handling Fees and Costs, customer charges for shipping and
handling costs are classified as sales. The Company adopted EITF Issue 00-10 in
the fourth quarter of fiscal 2000 and accordingly, reclassified all prior period
amounts. This change in accounting increased sales and operating expenses by
$60.0 million, $42.0 million and $41.6 million in 2000, 1999 and 1998,
respectively.
Note 2. Income per Share
The following table sets forth the computation of basic and diluted income
per share from continuing operations:
(In thousands, except per share data)
Years ended
------------------------------------------------------
December 29, December 31, January 1,
2000 1999 1999
--------------- --------------- --------------
Basic Income per Share:
Income from continuing operations $ 78,684 $ 69,656 $ 44,744
(numerator)
Weighted-average common shares
Outstanding (denominator) 36,580 37,507 44,877
=============== =============== ===============
Basic income per share $ 2.15 $ 1.86 $ 1.00
Diluted Income per Share:
Income from continuing operations $ 78,684 $ 69,656 $ 44,744
Interest impact of assumed
conversion of convertible notes 4,301 -- --
--------------- --------------- ---------------
Income from continuing operations
plus assumed conversion (numerator) $ 82,985 $ 69,656 $ 44,744
Weighted-average common shares
outstanding 36,580 37,507 44,877
Effect of dilutive securities:
Stock options, warrants and
convertible notes 4,309 571 386
--------------- --------------- ---------------
Weighted-average common shares
outstanding (denominator) 40,889 38,078 45,263
=============== =============== ===============
Diluted income per share $ 2.03 $ 1.83 $ 0.99
Note 3. Discontinued Operations
In the fourth quarter of 1998, the Company decided to exit its Integration
segment, and accordingly, the Integration segment is reflected as a discontinued
operation in these financial statements. The European Integration business was
sold in the fourth quarter of 1998. In 1999, the Company completed the disposal
of the Integration segment with North America Integration being sold in the
first quarter of 1999 followed by the sale of Asia Pacific Integration in the
fourth quarter of 1999. Interest expense has been allocated to discontinued
operations based on the percentage of total identifiable assets.
The Company recorded an after-tax gain from the sale of discontinued assets
of $57.0 million and $13.2 million in 1999 and 1998, respectively. Included in
the fiscal year 1999 gain on sale of assets, is a tax benefit of $8.4 million
resulting from the reversal of certain tax reserves associated with prior years'
reported sales of discontinued assets. Total proceeds received from the sale of
the Integration business was $238.3 million. There was no significant activity
in 2000.
Net sales and income from discontinued operations were as follows:
Years ended
------------------------------------
(In millions) December 31, January 1,
1999 1999
----------------- --------------
Net sales $196.3 $735.2
Costs and expenses (199.5) (710.0)
Operating (loss) income (3.2) 25.2
Gain on sale of assets 81.1 22.0
Net interest expense and other (1.0) (4.8)
Income tax expense (22.4) (21.5)
------- ------
Income from discontinued operations $ 54.5 $20.9
======= ======
Note 4. Acquisitions and Divestiture of Businesses
In January 2000, the Company acquired 100% of the stock of allNET
Technologies Pty. Limited ("allNET") for $6.7 million. allNET is a communication
products distributor located in Australia. In September 2000, the Company sold
the net assets of a wholly-owned subsidiary of Accu-Tech Corporation for $4.6
million in cash and notes receivable. The effect of these transactions on the
operating results of the Company was not significant.
In June 1998, the Company purchased Pacer Electronics, Inc. ("Pacer") for
approximately $38 million. Pacer is an electrical and data cabling distributor
largely centered in the Northeast portion of the United States, with additional
locations in North Carolina and Florida. The majority of Pacer's sales come from
the sale of wire, cable, connectors and related products and value added
services to original equipment manufacturers in the electronics industry.
Acquisitions were accounted for using the purchase method of accounting.
Had these acquisitions occurred at the beginning of their respective years of
acquisition, the impact on the Company's operating results would not have been
significant.
Note 5. Summarized Financial Information of Anixter Inc.
At December 29, 2000 and December 31, 1999, the Company had an ownership
interest of 99.7% and 98.7%, respectively, in Anixter Inc., which is included in
the consolidated financial statements of the Company. The following summarizes
the financial information of Anixter Inc. and reflects the Integration segment
of the Company as a discontinued operation:
Anixter Inc.
Condensed Consolidated Balance Sheets
December 29, December 31,
(In millions) 2000 1999
------------- ------------
Assets:
Current assets $1,331.0 $ 1,117.9
Property, net 56.5 53.1
Goodwill 239.3 229.1
Other assets 53.8 31.2
--------- ----------
$1,680.6 $ 1,431.3
======== ==========
Liabilities and Stockholders' Equity:
Current liabilities $ 645.1 $ 468.5
Other liabilities 28.6 27.8
Long-term debt 244.9 468.0
Subordinated notes payable to parent 250.5 19.1
Stockholders' equity 511.5 447.9
-------- --------
$1,680.6 $ 1,431.3
======== =========
Anixter Inc.
Condensed Consolidated Statement of Operations
Years Ended
----------------- ----------------- ---------------
December 29, December 31, January 1,
2000 1999 1999
----------------- ----------------- ---------------
(In millions)
Net sales $3,514.4 $2,686.9 $2,281.8
Operating income $ 191.6 $ 114.6 $ 84.3
Income before income tax expense $ 135.1 $ 79.9 $ 46.7
Income from continuing operations $ 76.3 $ 43.6 $ 15.7
Net income $ 75.7 $ 91.7 $ 25.0
Note 6. Accrued Expenses
Accrued expenses consisted of the following:
December 29, December 31,
2000 1999
(In millions) ------------ -------------
Salaries and fringe benefits $ 60.0 $ 52.5
Taxes 21.0 7.3
Discontinued operations 17.6 31.7
Freight 7.2 3.1
Interest 4.7 7.3
Other 29.1 29.3
------- ---------
$ 139.6 $ 131.2
======= =========
Note 7. Debt
Debt is summarized below:
December 29, December 31,
2000 1999
------------- --------------
(In millions)
Bank revolving lines of credit $142.2 $362.8
7% Zero-coupon convertible notes 207.0 --
8% Senior notes 100.0 100.0
Other 2.7 5.2
------ ------
Total debt $451.9 $468.0
====== ======
On June 28, 2000, the Company issued $792 million 7% zero-coupon
convertible notes ("Convertible Notes") due 2020. The net proceeds from the
issue were $193.4 million and was initially used to repay working capital
borrowings under a floating rate bank line of credit. The Company expects to
reborrow such amounts under the line of credit from time to time for general
corporate purposes. The discount associated with the issuance is being amortized
through June 28, 2020 using the effective interest rate method. Issuance costs
were $6.6 million and are being amortized through June 28, 2020 using the
straight line method.
Holders of the Convertible Notes may convert at any time on or before the
maturity date, unless the notes have previously been redeemed or purchased, into
7.4603 shares of the Company's common stock for which the Company has reserved
5.9 million shares. Additionally, holders may require the Company to purchase
all or a portion of their Convertible Notes on June 28, 2005, at a price of
$356.28 per Convertible Note, on June 28, 2010, at a price of $502.57 per
Convertible Note, and on June 28, 2015, at a price of $708.92 per Convertible
Note. The Company may choose to pay the purchase price in cash or common stock
or a combination of both.
On October 6, 2000, Anixter entered into a new financing arrangement to
replace the existing $550 million revolving credit agreement set to mature in
2001. The new agreement consists of a $500 million, senior unsecured, revolving
credit line which includes a $390 million agreement, due 2005, plus a $110
million agreement, due 2001. Anixter has various other revolving bank lines of
credit worldwide which provide for up to $18.9 million of additional borrowings,
none of which are domestic. These lines of credit reduce or mature at various
dates from 2001 through 2002. Floating and fixed interest rate options, based on
the prime or Libor rate, are available under these facilities.
At December 29, 2000, $142.2 million was borrowed and $377.1 million was
available under the bank revolving lines of credit, of which $46.9 million was
available for general corporate purposes. The weighted average interest rate on
debt, excluding the fixed rate notes, at December 29, 2000 and December 31,
1999, was 8.0% and 6.3%, respectively. Facility fees of .25% payable on the 5
year agreement and .23% payable on the 364-day agreement were insignificant.
In September 1996, Anixter filed a shelf registration statement with the
Securities and Exchange Commission to offer from time to time up to $200 million
aggregate principal amount of unsecured notes. On September 17, 1996, Anixter
issued $100 million of these notes due September 2003. The notes, which bear
interest at 8%, contain various restrictions with respect to secured borrowings
and are unconditionally guaranteed by the Company.
Certain debt agreements entered into by the Company's subsidiaries contain
various restrictions including restrictions on payments to the Company. The
Company has guaranteed substantially all of the debt of its subsidiaries.
Restricted net assets of subsidiaries were approximately $404.5 million and
$372.9 million at December 29, 2000 and December 31, 1999, respectively.
Aggregate annual maturities of debt at December 29, 2000, were as follows:
2001-$5.8 million; 2002-$4.9 million; 2003-$100.0 million; 2004-none;
2005-$131.5 million and $209.7 million thereafter. The amount due in 2001 was
classified as long-term due to the Company's ability and intent to refinance
through its long-term facilities.
Interest paid in 2000, 1999 and 1998, was $39.1 million, $34.5 million and
$36.6 million, respectively.
The estimated fair value of the Company's debt at December 29, 2000, was
$425.0 million, based on public quotations and current market rates. The
carrying amount of the Company's debt at December 31, 1999, generally
approximated fair value.
Note 8. Lease Commitments
Substantially all of the Company's office and warehouse facilities and
equipment are leased under operating leases. Certain of these leases are
long-term operating leases and expire at various dates through 2018. Minimum
lease commitments under operating leases at December 29, 2000 are as follows:
2001 - $46.1 million; 2002 - $38.1 million; 2003 - $26.9 million; 2004 - $18.2
million; 2005 - $12.5 million; beyond 2005 - $48.3 million. Total rental expense
was $52.3 million, $58.3 million and $39.6 million in 2000, 1999 and 1998,
respectively.
Note 9. Income Taxes
The Company and its U.S. subsidiaries file their federal income tax return
on a consolidated basis. As of December 29, 2000, the Company had no NOL or ITC
carryforwards for federal income tax purposes. During the third quarter of 1998,
the Internal Revenue Service completed its examination for the years 1993 to
1995, which included an examination of net operating losses and credit
carryovers dating back to 1979. As a result of the lapsing, during the third
quarter of 1999, of all relevant statutes of limitations on assessment relating
to that 17-year period of time, the Company recorded a $24.3 million tax benefit
in continuing operations for the reversal of previously established tax reserves
which were determined to be no longer necessary.
At December 29, 2000, various foreign subsidiaries of the Company had
aggregate cumulative NOL carryforwards for foreign income tax purposes of
approximately $168.6 million, which are subject to various provisions of each
respective country. Approximately $59.8 million of this amount expires between
2001 and 2010 and $108.8 million of the amount has an indefinite life.
Of the $168.6 million NOL carryforwards of foreign subsidiaries mentioned
above, $89.8 million relates to losses that have already provided a tax benefit
in the U.S. due to rules permitting flow-through of such losses in certain
circumstances. Without such losses included, the cumulative NOL carryforwards at
December 29, 2000, are approximately $78.8 million, which are subject to various
provisions of each respective country. Approximately $45.9 million of this
amount expires between 2001 and 2010 and $32.9 million of the amount has an
indefinite life. The deferred tax asset and valuation allowance, shown below
relating to foreign NOL carryforwards, have been adjusted to reflect only the
carryforwards for which the Company has not taken a tax benefit in the U.S.
Domestic income from continuing operations before income taxes was $110.1
million, $76.0 million, and $84.0 million for 2000, 1999 and 1998, respectively.
Foreign income (loss) from continuing operations before income taxes was $24.5
million, $2.2 million and $(7.5) million for 2000, 1999 and 1998, respectively.
The Company paid income taxes in 2000, 1999 and 1998 of $46.8 million,
$64.9 million and $63.8 million, respectively.
Significant components of the Company's deferred tax assets and
(liabilities) were as follows:
December 29, December 31,
(In millions) 2000 1999
----------------- ------------------
Gross deferred tax liabilities $(15.8) $(17.8)
Foreign NOL carryforwards 29.8 29.9
Deferred compensation 11.8 9.4
Inventory reserves 11.1 8.4
Depreciation 1.3 5.1
Investment reserves -- 4.5
Allowance for doubtful accounts 5.8 0.9
Other 5.5 5.7
----- -----
Gross deferred tax assets 65.3 63.9
Valuation allowance (25.5) (26.3)
----- -----
Net deferred tax asset $24.0 $19.8
===== =====
Income tax expense (benefit) was comprised of:
Years ended
------------------------------------------------
December 29, December 31, January 1,
2000 1999 1999
--------------- --------------- ---------------
(In millions)
Current--Foreign $ 11.8 $ 7.6 $ 7.6
State 8.1 4.5 1.9
Federal 36.7 25.0 22.4
------ ------ ------
56.6 37.1 31.9
Deferred--Foreign (0.7) (1.5) 4.5
State (2.4) (1.1) 3.1
Federal 2.4 (26.0) (7.7)
------ ------ ------
(0.7) (28.6) (0 .1)
----- ------ ------
$ 55.9 $ 8.5 $ 31.8
======= ====== ======
Reconciliation of income tax expense to the statutory corporate federal
tax rate of 35% were as follows:
Years ended
--------------------------------------------------
December 29, December 31, January 1,
2000 1999 1999
----------------- --------------- --------------
(In millions)
Statutory tax expense $47.1 $27.4 $26.8
Increase (reduction) in taxes resulting from:
Amortization of goodwill 2.5 2.2 2.1
Losses on foreign operations 2.3 2.5 8.4
State income taxes 3.7 2.3 3.2
Adjustment to prior year tax accounts -- (24.3) (9.4)
Other, net 0.3 (1.6) 0.7
------ ------ ------
$55.9 $ 8.5 $31.8
====== ====== ======
Note 10. Pension Plans, Post-Retirement Benefits and Other Benefits
The Company's various 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
the plans. The Company's policy is to fund these plans as required by ERISA and
the Code. Plan assets consisted primarily of equity securities and mutual fund
investments.
In 2000, the Company incurred a $3.2 million loss on settlement of a
supplemental employee retirement plan. In 1999, the Company completed the
disposal of the Integration segment which resulted in a curtailment gain of $4.4
million, and accordingly, was classified as a gain on disposal of discontinued
operations.
Pension Benefits
2000 1999
---- ----
(In millions)
Change in projected benefit obligation:
Beginning balance $ 104.2 $ 110.4
Service cost 6.2 8.4
Interest cost 6.9 7.2
Actuarial (gain) loss (2.3) (13.0)
Settlement/Curtailment loss (gain) 3.4 (4.8)
Benefits paid (11.0) (4.0)
-------- -------
Ending balance $ 107.4 $ 104.2
======= =======
Change in plan assets at fair value:
Beginning balance $ 97.8 $ 92.4
Actual return on plan assets 4.8 9.3
Company contributions 1.0 0.1
Benefits paid (3.8) (4.0)
------- -------
Ending balance $ 99.8 $ 97.8
======= =======
Reconciliation of funded status:
Projected benefit obligation $(107.4) $(104.2)
Plan assets at fair value 99.8 97.8
------- -------
Funded status (7.6) (6.4)
Unrecognized net actuarial gain (11.7) (15.8)
Unrecognized prior service cost 2.0 2.1
Unrecognized transition obligation (0.4) (1.2)
--------- -------
Accrued benefit cost $ (17.7) $ (21.3)
======= =======
Weighted average assumptions:
Discount rate 7.25% 7.15%
Expected return on plan assets 8.63% 8.63%
Salary growth rate 5.42% 5.26%
Pension Costs
2000 1999 1998
---- ---- ----
(In millions)
Components of net periodic cost:
Service cost $ 6.2 $ 8.4 $ 8.0
Interest cost 6.9 7.2 6.7
Expected return on plan assets (8.4) (7.9) (7.5)
Net amortization (0.7) (0.2) (0.9)
------- ------- -------
Periodic benefit cost prior to settlement/curtailment 4.0 7.5 6.3
Settlement/Curtailment loss (gain) 3.0 (4.4) --
------ ------- -------
Net periodic benefit cost $ 7.0 $ 3.1 $ 6.3
====== ======= =======
The Company has two plans where the fair value of assets are in excess of the
projected benefit obligation. The fair value of the plans' assets were $8.6
million and $8.7 million and had projected benefit obligations of $7.1 million
and $6.4 million in 2000 and 1999, respectively.
The Company has several savings plans. The Company's contributions to
these plans are based upon various levels of employee participation. The total
cost of these plans was $1.5 million in 2000, $1.5 million in 1999 and $1.9
million in 1998. The Company's liability for post-retirement benefits other than
pensions is not material.
Note 11. Preferred Stock and Common Stock
Preferred Stock--
The Company has the authority to issue 15 million shares of preferred
stock, par value $1.00 per share, none of which was outstanding at the end of
2000 and 1999.
Stock Options and Stock Grants--
At December 29, 2000, the Company has stock incentive plans, which
authorize .7 million shares for additional stock option awards or stock grants.
Options granted under these plans have been granted with exercise prices at or
higher than the fair market value of the common stock on the date of grant.
One-fourth of the employee options granted become exercisable each year after
the year of grant. The director options fully vest in one year. All options
expire ten years after the date of grant.
During 2000, the first year restricted stock was granted, the Company
issued 281,173 shares. Restricted stock fully vests after four years from date
of grant. Compensation expense associated with the restricted stock grants was
$1.7 million in 2000.
The following table summarizes the 2000, 1999 and 1998 activity under the
employee and director option plans:
Weighted Weighted
Average Average
Employee Exercise Director Exercise
Options Price Options Price
(Options in thousands) --------- --------- -------- --------
Balance at January 2, 1998 3,207.7 $16.00 430.0 $13.94
Granted 1,772.0 17.46 -- --
Exercised (34.1) 17.80 (40.0) 9.94
Canceled (262.4) 17.09 -- --
-------- -------- ------- -------
Balance at January 1, 1999 4,683.2 16.48 390.0 14.35
Granted 1,115.5 12.70 -- --
Exercised (452.0) 13.35 (30.0) 11.63
Canceled (163.1) 16.96 -- --
-------- -------- ------- --------
Balance at December 31, 1999 5,183.6 15.92 360.0 14.57
Granted 1,127.5 20.59 -- --
Exercised (2,003.0) 16.14 (100.0) 11.30
Canceled (147.2) 16.91 -- --
--------- -------- -------- -------
Balance at December 29, 2000 4,161.0 $17.05 260.0 $15.83
========= ======== ======== =======
Options Exercisable at year-end
1998 1,660.9 $14.78 390.0 $14.35
1999 2,679.3 $16.49 360.0 $14.57
2000 2,031.3 $16.75 260.0 $15.83
The following table summarizes information relating to options
outstanding and exercisable at December 29, 2000, using various ranges of
exercise prices:
Employee Options
(options in thousands)
Options Outstanding Options Exercisable
Weighted Weighted Weighted
Range of Average Average Average
Exercise Exercise Remaining Exercise
Prices Outstanding Price Years Exercisable Price
$5.19-$9.11 102.0 $ 9.04 2.0 102.0 $ 9.04
$12.69-$15.75 1,510.4 $13.82 8.0 754.5 $14.48
$17.44-$21.13 2,527.1 $19.21 8.4 1,174.8 $18.88
$27.81-$32.00 21.5 $28.60 10.0 -- --
Director Options
(options in thousands)
Weighted Weighted
Range of Average Average
Exercise Outstanding & Exercise Remaining
Prices Exercisable Price Years
$8.38-$8.46 60.0 $ 8.42 1.5
$15.00-$20.69 200.0 $ 18.05 3.6
Additionally, the Company has an Employee Stock Purchase Plan ("ESPP")
covering most employees. Participants can request that up to 10% of their base
compensation be applied toward the purchase of common stock under the Company's
ESPP. The purchase price is the lower of 85% of the fair market value of the
common stock at the beginning of the ESPP year, July 1, 2000, or at the end of
the ESPP year, June 30, 2001. Under the ESPP, the Company sold 114,100 shares,
123,700 shares and 175,900 shares to employees in 2000, 1999 and 1998,
respectively.
Stock Option Plans of Anixter--
In 1995 and prior, Anixter granted to key employees options to
purchase the common stock of Anixter. Substantially all options were granted
with exercise prices at the fair market value of the common stock on the date of
grant. These options vest over four years and terminate seven to ten years from
the date of grant. At December 29, 2000, the Company owned 99.7% of the
approximately 32.3 million shares of outstanding Anixter common stock.
The following table summarizes the 2000, 1999 and 1998 option activity:
Weighted
Average
Exercise
Options Price
------- -------
(Options in thousands)
Balance at January 2, 1998 1,328.4 $11.33
Exercised (253.8) 10.13
Canceled (92.3) 11.77
-------
Balance at January 1, 1999 982.3 11.57
Exercised (586.6) 11.21
Canceled (26.2) 12.28
-------
Balance at December 31, 1999 369.5 12.08
Exercised (323.7) 11.92
Canceled (0.5) 14.50
-------
Balance at December 29, 2000 45.3 $13.23
Options exercisable at year-end
1998 982.3 $11.57
1999 369.5 $12.08
2000 45.3 $13.23
Exercise prices for options outstanding as of December 29, 2000, range from
$11.40 to $14.50 per share and have a weighted average remaining life of 1 year.
Units--
The Company adopted a director stock unit plan ("DSUP") to pay its
non-employee directors annual retainer fees in the form of stock units. These
stock units convert to common stock of the Company at the pre-arranged time
selected by each director. Stock units were granted to nine directors in 2000,
having an aggregate value at grant date of $540,000.
The following table summarizes the 2000, 1999 and 1998, activity under
the DSUP:
DSUP
Stock Units
---------
Balance at January 2, 1998 59.6
Granted 25.9
Converted (3.9)
---------
Balance at January 1, 1999 81.6
Granted 29.7
Converted (3.5)
---------
Balance at December 31, 1999 107.8
Granted 20.4
Converted (31.2)
---------
Balance at December 29, 2000 97.0
=========
Accounting for Stock Based Compensation--
The Company adopted the disclosure-only provisions of SFAS No. 123,
"Accounting for Stock Based Compensation". Accordingly, no compensation expense
has been recognized in the income statement for the stock option plans. Had
compensation costs for the plans been determined based on the fair value at the
grant date for awards beginning in 1995 and amortized over the respective
vesting period, the Company's income from continuing operations would have been
reduced to the pro forma amounts indicated below:
2000 1999 1998
---- ---- ----
Basic income from continuing operations
--as reported $78.7 $69.7 $44.7
--proforma $72.7 $64.0 $40.1
Diluted income from continuing operations
plus assumed conversion
--as reported $83.0 $69.7 $44.7
--proforma $77.0 $64.0 $40.1
Basic income per share from
continuing operations
--as reported $2.15 $1.86 $1.00
--proforma $1.99 $1.71 $0.89
Diluted income per share from
continuing operations
--as reported $2.03 $1.83 $0.99
--proforma $1.90 -- --
Pro forma diluted income per share has not been presented for 1999 and 1998
as the conversion of stock options and warrants would have had an anti-dilutive
effect.
The weighted average fair value for the Company's stock options (which
was $11.74 per share in 2000, $5.50 per share in 1999 and $7.63 per share in
1998) was estimated at the date of grant using the Black-Scholes option pricing
model with the following assumptions for 2000, 1999 and 1998, respectively:
expected stock price volatility of 45%, 39%, and 42%; expected dividend yield of
zero; risk-free interest rate of 6.5%, 5.6% and 4.9% and an expected 7 year life
for 2000 and 5 year life for 1999 and 1998.
The Black-Scholes option pricing model was developed for estimating the
fair value of traded options, which have no vesting restrictions and are fully
transferable. In addition, option valuation models require the input of highly
subjective assumptions including the expected stock price volatility. Because
the Company's stock options have characteristics significantly different from
those of traded options, and because changes in the subjective input assumptions
can materially affect the fair value estimate, in management's opinion, the
existing models do not necessarily provide a reliable single measure of the fair
value of the Company's stock options.
Note 12. Business Segments
The Company operates in one business segment which is engaged in the
distribution of communications and specialty wire and cable products from top
suppliers to contractors and installers and to end users, including
manufacturers, natural resources companies, utilities and original equipment
manufactures. The Company obtains and coordinates financing, legal and other
related services, certain of which are rebilled to subsidiaries.
The following table is a geographic breakdown of the Company's
operations. Sales to a single customer did not exceed 10 percent of total sales.
Export sales are insignificant.
(In millions) Worldwide Operations
2000 1999 1998
---- ---- ----
Net sales
United States $2,453.9 $1,833.4 $1,535.2
Europe 587.1 523.0 523.3
Canada 285.4 213.9 184.0
Asia Pacific and Latin America 188.0 141.7 147.6
--------- --------- ---------
$3,514.4 $2,712.0 $2,390.1
========= ========= =========
Operating income
United States $ 144.6 $ 93.3 $ 85.3
Europe 24.6 20.6 12.9
Canada 19.6 12.9 9.4
Asia Pacific and Latin America 1.0 (14.0) (20.6)
--------- --------- ---------
$ 189.8 $ 112.8 $ 87.0
========= ========= =========
Tangible long-lived assets
United States $ 88.0 $ 66.8 $ 64.5
Europe 5.2 7.1 9.9
Canada 4.0 3.9 3.6
Asia Pacific and Latin America 4.2 5.0 7.6
--------- --------- ---------
$ 101.4 $ 82.8 $ 85.6
========= ========= =========
Note 13. Contingencies and Litigation
In the ordinary course of business, the Company and its subsidiaries
become involved as plaintiffs or defendants in various legal proceedings. The
claims and counterclaims in such litigation, including those for punitive
damages, individually in certain cases and in the aggregate, involve amounts
which may be material. However, it is the opinion of the Company's management,
based upon the advice of its counsel, that the ultimate disposition of pending
litigation will not be material.
Note 14. Selected Quarterly Financial Data (Unaudited)
The following is a summary of the unaudited interim results of
operations and the price range of the common stock composite for each quarter in
the years ended December 29, 2000, and December 31, 1999. The Company has not
paid cash dividends on its common stock since 1979.
First Second Third Fourth
(In millions, except per share amounts) Quarter Quarter Quarter Quarter
-------- ------- -------- -------
Year ended December 29, 2000
Net sales $758.8 $920.9 $971.8 $862.9
Cost of sales (571.8) (712.2) (754.1) (654.4)
Operating income 37.5 50.0 53.9 48.4
Income before income taxes 27.7 39.2 40.9 26.8
Income from continuing operations 16.1 22.7 24.0 15.9
Net income 16.1 22.7 24.0 15.9
Basic income per share:
Continuing 0.45 0.62 0.65 0.42
Net income 0.45 0.62 0.65 0.42
Diluted income per share:
Continuing 0.44 0.60 0.59 0.41
Net income 0.44 0.60 0.59 0.41
Composite stock price range:
High 29.94 34.00 37.00 29.19
Low 18.69 26.50 27.06 17.75
Close 27.88 26.52 29.13 21.63
Year ended December 31, 1999
Net sales $603.2 $669.1 $721.9 $717.8
Cost of sales (445.8) (502.6) (548.5) (545.8)
Operating income 22.0 28.5 33.2 29.1
Income before income taxes 13.3 21.0 24.2 19.7
Income from continuing operations 7.7 12.2 38.3 11.5
Net income 52.1 13.2 44.2 14.7
Basic income per share:
Continuing 0.19 0.33 1.06 0.32
Net income 1.25 0.36 1.23 0.41
Diluted income per share:
Continuing 0.19 0.33 1.04 0.31
Net income 1.25 0.36 1.20 0.40
Composite stock price range:
High 19.81 18.69 23.25 23.44
Low 11.13 13.56 18.13 19.00
Close 12.38 18.69 23.25 20.63
In the first quarter of 1999, the Company realized a $45.9 million net gain on
the disposal of discontinued operations from the sale of its North American and
European Integration business. In the third quarter of 1999, the Company
recorded a $24.3 million tax benefit in continuing operations for the reversal
of previously established tax reserves determined to be no longer necessary. Net
sales amounts were restated in accordance with EITF Issue 00-10. See Note 1
"Summary of Significant Accounting Policies" for further information.
ITEM 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
None.
PART III
ITEM 10. Directors and Executive Officers of Registrant.
See Registrant's Proxy Statement for the 2001 Annual Meeting of
Stockholders--"Election of Directors."
EXECUTIVE OFFICERS OF THE REGISTRANT
The following table lists the name, age as of March 7, 2001, position,
offices and certain other information with respect to the executive officers of
the Company. The term of office of each executive officer will expire upon the
appointment of his successor by the Board of Directors.
John A. Dul, 40 General Counsel of the Company since May 1998; Assistant Secretary of the Company since
May 1995; General Counsel and Secretary of Anixter since January 1996; Associate General
Counsel and Secretary from July 1994 to January 1996.
Terrance A. Faber, 49 Vice-President Controller of the Company since October 2000; Chief Financial Officer of
International Survey Research from January 2000 to October 2000; Corporate Controller of
BT Office Products International from August 1997 to January 2000; Corporate Controller
of The Bradford Exchange from October 1994 to August 1997.
Robert W. Grubbs Jr., 44 President and Chief Executive Officer of the Company since February 1998; President and
Chief Executive Officer of Anixter since July 1994.
James E. Knox, 63 Senior Vice President--Law and Secretary of the Company since 1986.
Dennis J. Letham, 49 Chief Financial Officer, Senior Vice President--Finance of the Company since January
1995; Chief Financial Officer, Executive Vice President of Anixter since July 1993.
Philip F. Meno, 42 Vice President--Taxes of the Company since May 1993.
Rodney A. Shoemaker, 43 Vice President--Treasurer of the Company and Anixter since July 1999; Assistant Treasurer
of the Company and Anixter from October 1994 to July 1999.
Samuel Zell, 59 Chairman of the Board of Directors of the Company since January 1985.
ITEM 11. Executive Compensation.
See Registrant's Proxy Statement for the 2001 Annual Meeting of
Stockholders--"Executive Compensation," "Compensation of Directors," "Employment
Contracts and Termination of Employment and Changes in Control Arrangements,"
and "Compensation Committee Interlocks and Insider Participation."
ITEM 12. Security Ownership of Certain Beneficial Owners and Management.
See Registrant's Proxy Statement for the 2001 Annual Meeting of
Stockholders--"Security Ownership of Management" and "Security Ownership of
Principal Stockholders."
ITEM 13. Certain Relationships and Related Transactions.
See Registrant's Proxy Statement for the 2001 Annual Meeting of
Stockholders--"Certain Relationships and Related Transactions."
PART IV
ITEM 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
(a) Exhibits.
The exhibits listed below in Item 14(a)1, 2 and 3 are filed as
part of this annual report. Each management contract or
compensatory plan required to be filed as an exhibit is
identified by an asterisk (*).
(b) Reports on Form 8-K.
None.
(a) Index to Consolidated Financial Statements and Financial Statement
Schedules.
(1) Financial Statements.
The following Consolidated Financial Statements of Anixter International
Inc. and Report of Independent Auditors are filed as part of this report.
Page
Report of Independent Auditors 11
Consolidated Statements of Operations for the years ended
December 29, 2000, December 31, 1999 and January 1, 1999 12
Consolidated Balance Sheets at December 29, 2000 and December 31, 1999 13
Consolidated Statements of Cash Flows for the years ended
December 29, 2000, December 31, 1999 and January 1, 1999 14
Consolidated Statements of Stockholders' Equity for the years
ended December 29, 2000, December 31, 2000 and January 1, 1999 15
Notes to the Consolidated Financial Statements 16
(2) Financial Statement Schedules.
The following financial statement schedules of Anixter International Inc.
are filed as part of this Report and should be read in conjunction with the
Consolidated Financial Statements of Anixter International Inc.:
Page
I. Condensed financial information of Registrant 36
II. Valuation and qualifying accounts and reserves 39
All other schedules are omitted because they are not required or are not
applicable, or the required information is shown in the consolidated financial
statements or notes thereto.
(3) Exhibit List.
Each management contract or compensation plan required to be filed as an
exhibit is identified by an asterisk (*).
Exhibit
No. Description of Exhibit
(3) Articles of Incorporation and by-laws.
3.1 Restated Certificate of Incorporation of Anixter International Inc.,
filed with Secretary of State of Delaware on September 29, 1987 and Certificate
of Amendment thereof, filed with Secretary of Delaware on August 31, 1995
(Incorporated by reference from Anixter International Inc. Annual Report on Form
10-K for the year ended December 31, 1995, Exhibit 3.1)
3.2 By-laws of Anixter International Inc. as amended through November 9,
1995 (Incorporated by reference from Anixter International Inc. Annual Report on
Form 10-K for the year ended December 31, 1995, Exhibit 3.2)
(4) Instruments defining the rights of security holders, including
indentures.
4.1 Indenture dated September 17, 1996, between Anixter Inc., Anixter
International Inc. and the Bank of New York, as Trustee, providing for 8% Senior
Notes due 2003. (Incorporated by reference from Amendment No. 1 to Anixter
Inc.'s Registration Statement on Form S-3, Registration Number 333-09185, filed
August 27, 1996, Exhibit 4.1)
4.2 Indenture dated as of June 28, 2000, by and between Anixter
International Inc. and Bank of New York, as Trustee offering 7% zero-coupon
convertible notes due 2020. (Incorporated by reference from Anixter
International Inc.'s Registration Statement on Form S-3, Registration Number
333-42788, filed August 1, 2000, Exhibit 4.1.)
4.3 Five-Year, $390 million, Revolving Credit Agreement, dated October 6,
2000, among Anixter Inc., Bank of America, N.A., as Agent, and other banks named
therein.
4.4 364-Day, $110 million, Revolving Credit Agreement, dated October 6,
2000, among Anixter Inc., Bank of America, N.A., as Agent, and other banks named
therein.
4.5 Receivables Sale Agreement, dated October 6, 2000, between Anixter Inc.
and Anixter Receivables Corporation.
4.6 Receivables Purchase Agreement, dated October 6, 2000, among Anixter
Receivables Corporation, as Seller, Anixter Inc., as Servicer, Bank One, NA, as
Agent, and the other financial institutions named therein.
(10) Material contracts.
10.1 (a) Asset Purchase Agreement, dated February 22, 1999 (Incorporated by
reference from Anixter International Inc. Current Report on Form 8-K dated April
2, 1999).
(b) First Amendment to Asset Purchase Agreement, dated March 29, 1999
(Incorporated by reference from Anixter International Inc. Current Report on
Form 8-K dated April 2, 1999).
10.2* Company's Management Incentive Plan, dated February 9, 1995.
(Incorporated by reference from Itel Corporation's Annual Report on Form 10-K
for the fiscal year ended December 31, 1994, Exhibit 10.2.) 10.3* Company's 1983
Stock Incentive Plan as amended and restated July 16, 1992. (Incorporated by
reference from Itel Corporation's Annual Report on Form 10-K for the fiscal year
ended December 31, 1992, Exhibit 10.3.)
10.4* Anixter International Inc. 1998 Stock Incentive Plan (Incorporated by
reference from Anixter International Inc. Registration Statement on Form S-8,
file number 333-56935. Exhibit 4a.)
10.5* Company's Key Executive Equity Plan, as amended and restated July 16,
1992. (Incorporated by reference from Itel Corporation's Annual Report on Form
10-K for the fiscal year ended December 31, 1992, Exhibit 10.8.)
10.6* Company's Director Stock Option Plan. (Incorporated by reference from
Itel Corporation's Annual Report on Form 10-K for the fiscal year ended December
31, 1991, Exhibit 10.24.)
10.7* Warrant Agreement, dated August 22, 1990, between the Company and
Bernard F. Brennan, William A. Buzick, Jr., F. Philip Handy, Harold Haynes,
Jerome Jacobson, Melvyn Klein, John R. Petty and James D. Woods, individually.
(Incorporated by reference from Itel Corporation's Annual Report on Form 10-K
for the fiscal year ended December 31, 1991, Exhibit 10.25.)
10.8* (a) Agreement, dated February 9, 1995, with Rod F. Dammeyer
(Incorporated by reference from Itel Corporation's Annual Report on Form 10-K
for the fiscal year ended December 31, 1994, Exhibit 10.18(d).)
(b) Amended and Restated Agreement dated February 9, 1995 with Rod F.
Dammeyer (Incorporated by reference from Anixter International Inc. Annual
Report on Form 10-K for the year ended December 31, 1995, Exhibit 10.17 (b))
10.9* Form of Stock Option Agreement. (Incorporated by reference from Itel
Corporation's Annual Report on Form 10-K for the fiscal year ended December 31,
1992, Exhibit 10.24.)
10.10* Form of Indemnity Agreement with all directors and officers
(Incorporated by reference from Anixter International Inc. Annual Report on Form
10-K for the year ended December 31, 1995, Exhibit 10.24)
10.11* Anixter International Inc. 1996 Stock Incentive Plan (Incorporated
by reference from Anixter International Inc. Annual Report on Form 10-K for the
year ended December 31, 1995, Exhibit 10.26) 10.12* Form of Stock Option Grant
(Incorporated by reference from Anixter International Inc. Annual Report on Form
10-K for the year ended December 31, 1995, Exhibit 10.27)
10.13* Anixter Excess Benefit Plan (Incorporated by reference from Anixter
International Inc. Annual Report on Form 10-K for the year ended December 31,
1995, Exhibit 10.28)
10.14* Forms of Anixter Stock Option, Stockholder Agreement and Stock
Option Plan (Incorporated by reference from Anixter International Inc. Annual
Report on Form 10-K for the year ended December 31, 1995, Exhibit 10.29)
10.15* (a) Anixter Deferred Compensation Plan (Incorporated by reference
from Anixter International Inc. Annual Report on Form 10-K for the year ended
December 31, 1995, Exhibit 10.30)
(b) Anixter 1999 Restated Deferred Compensation Plan
10.16* Anixter International Inc. Enhanced Management Incentive Plan for
1999-2000 (Incorporated by reference from Anixter International Inc. Quarterly
Report on Form 10-Q for the quarterly period ended July 2, 1999, Exhibit 10.20).
10.17* Financial Advisory Agreement, dated August 4, 1999 (Incorporated by
reference from Anixter International Inc. Quarterly Report on Form 10-Q for the
quarterly period ended October 1, 1999, Exhibit 10.21).
10.18* Employment Agreement with Robert W. Grubbs, dated July 22, 1999
(Incorporated by reference from Anixter International Inc. Quarterly Report on
Form 10-Q for the quarterly period ended October 1, 1999, Exhibit 10.22).
10.19* Employment Agreement with Dennis J. Letham, dated July 22, 1999
(Incorporated by reference from Anixter International Inc. Quarterly Report on
Form 10-Q for the quarterly period ended October 1, 1999, Exhibit 10.23).
10.20* Anixter International Inc. Management Incentive Plan (Incorporated
by reference from Anixter International Inc. Quarterly Report on form 10Q for
the quarterly period ended June 30, 2000, Exhibit 10.20).
10.21* Anixter International Inc. Enhanced Management Incentive Plan for
2001-2002.
10.22* Amendment to Anixter's Enhanced Management Incentive Plans for
1999-2000 and 2001-2002.
10.23* Amendment to Employee Agreements with Robert W. Grubbs and Dennis J.
Letham, dated February 14, 2001.
(21) Subsidiaries of the Registrant. Page
21.1 List of Subsidiaries of the Registrant. 41
(23) Consents of experts and counsel.
23.1 Consent of Ernst & Young LLP 43
(24) Power of attorney.
24.1 Power of Attorney executed by Lord James Blyth, Robert L.
Crandall, Robert W. Grubbs, F. Philip Handy, Melvyn N. Klein,
John R. Petty, Sheli Rosenberg, Stuart M. Sloan, Thomas C. Theobald
and Samuel Zell 44
Copies of other instruments defining the rights of holders of long-term
debt of the Company and its subsidiaries not filed pursuant to Item
601(b)(4)(iii) of Regulation S-K and omitted copies of attachments to plans and
material contracts will be furnished to the Securities and Exchange Commission
upon request.
ANIXTER INTERNATIONAL INC.
SCHEDULE I--CONDENSED FINANCIAL INFORMATION OF REGISTRANT
ANIXTER INTERNATIONAL INC. (PARENT COMPANY)
STATEMENTS OF OPERATIONS
(In millions)
Years ended
--------------------------------------------
December 29, December 31, January 1,
2000 1999 1999
------------- ------------- ------------
Operating loss $(4.1) $ (2.5) $ (1.5)
Other income (expenses):
Interest income,
including intercompany 6.6 3.1 7.2
Gain on ANTEC investment -- -- 24.3
Other (0.6) -- --
------ ------ ------
Income from operations before
income taxes and equity in
earnings of subsidiaries 1.9 0.6 30.0
Income tax benefit 1.9 27.4 4.2
Equity in earnings of subsidiaries 74.9 96.2 31.4
------ ------ ------
Net income $78.7 $124.2 $ 65.6
====== ====== ======
ANIXTER INTERNATIONAL INC.
SCHEDULE I--CONDENSED FINANCIAL INFORMATION OF REGISTRANT
ANIXTER INTERNATIONAL INC. (PARENT COMPANY)
BALANCE SHEETS
(In millions)
ASSETS
December 29, December 31,
2000 1999
------------- --------------
Current assets:
Cash $ 0.4 $ 0.4
Accounts receivable 2.5 --
Amounts currently due from affiliates, net 3.4 6.3
Other assets 0.1 0.1
--------- ---------
Total current assets 6.4 6.8
Investment in and advances to subsidiaries 765.1 449.9
Other assets 7.0 12.3
--------- ---------
$778.5 $ 469.0
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses,
due currently $ 2.8 $ 9.7
Long-term debt 207.0 --
Income taxes, net, primarily deferred 13.8 2.9
-------- --------
Total liabilities 223.6 12.6
Stockholders' equity:
Common stock 37.7 35.9
Capital surplus 46.9 --
Accumulated other comprehensive income (52.6) (37.6)
Retained earnings 522.9 458.1
-------- ---------
Total stockholders' equity 554.9 456.4
-------- ---------
$778.5 $469.0
======== =========
ANIXTER INTERNATIONAL INC.
SCHEDULE I--CONDENSED FINANCIAL INFORMATION OF REGISTRANT
ANIXTER INTERNATIONAL INC. (PARENT COMPANY)
STATEMENTS OF CASH FLOWS
(In millions)
Years ended
------------------------------------------------------------
December 29, December 31, January 1,
2000 1999 1999
---------------- ---------------- ----------------
Operating activities:
Net income $ 78.7 $ 124.2 $ 65.6
Adjustments to reconcile net income to
net cash provided by operating activities:
Gain on ANTEC investment -- -- (24.3)
Income tax benefit (1.9) (27.4) (4.2)
Equity in earnings of subsidiaries (74.9) (96.2) (31.4)
Accretion of zero-coupon convertible notes 7.0 -- --
Intercompany transactions 2.9 (1.7) (1.0)
Change in other operating items (3.2) 63.4 4.9
--------- --------- ---------
Net cash provided by activities 8.6 62.3 9.6
Investing activities:
Proceeds from sale of businesses -- 28.3 14.2
Proceeds from sale of ANTEC -- -- 104.3
Acquisition of businesses -- -- (38.1)
--------- --------- ---------
Net cash provided by investing activities -- 28.3 80.4
Financing activities:
Proceeds from long-term debt 200.0 -- --
Loans (to) from subsidiaries, net (231.4) (12.1) 12.0
Purchase of treasury stock (15.4) (91.9) (101.8)
Proceeds from issuance of common stock 44.6 10.5 3.1
Debt issuance costs (6.4) -- --
--------- --------- ---------
Net cash used in financing activities (8.6) (93.5) (86.7)
--------- --------- ---------
Cash (used) provided -- (2.9) 3.3
Cash at beginning of year 0.4 3.3 --
--------- --------- ----------
Cash at end of year $ 0.4 $ 0.4 $ 3.3
========= ========= ==========
ANIXTER INTERNATIONAL INC.
SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
Years ended December 29, 2000, December 31, 1999 and January 1, 1999
(In millions)
Additions
Balance at Charged Charged Balance at
beginning of to to other end of
Description the period income accounts Deductions the period
----------- ---------- ------ -------- ---------- ----------
Year ended December 29, 2000:
Allowance for
doubtful accounts $10.3 $ 8.1 $ (0.4) $ (3.2) $14.8
Allowance for
deferred tax asset $26.3 $(0.8) -- -- $25.5
Year ended December 31, 1999:
Allowance for
doubtful accounts $11.0 $ 5.7 $ (0.9) $ (5.5) $10.3
Allowance for
deferred tax asset $24.0 $ 2.3 -- -- $26.3
Year ended January 1, 1999:
Allowance for
doubtful accounts $ 10.0 $ 4.2 $ 0.2 $ (3.4) $11.0
Allowance for deferred
tax asset $16.7 $7.3 -- -- $24.0
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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, in the City of Skokie,
State of Illinois, on the 7th day of March, 2001.
ANIXTER INTERNATIONAL INC.
DENNIS J. LETHAM
----------------
Dennis J. Letham
Senior Vice President - Finance
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
ROBERT W. GRUBBS Chief Executive Officer
- ---------------- and President
Robert W. Grubbs (Principal Executive Officer) March 7, 2001
DENNIS J. LETHAM Senior Vice President--Finance
- ---------------- (Chief Financial Officer)
Dennis J. Letham March 7, 2001
TERRANCE A. FABER Vice President--Controller
- ----------------- (Chief Accounting Officer)
Terrance A. Faber March 7, 2001
LORD JAMES BLYTH* Director March 7, 2001
- -----------------
Lord James Blyth
ROBERT L. CRANDALL* Director March 7, 2001
- ------------------
Robert L. Crandall
ROBERT W. GRUBBS Director March 7, 2001
- ----------------
Robert W. Grubbs
F. PHILIP HANDY* Director March 7, 2001
- ----------------
F. Philip Handy
MELVYN N. KLEIN* Director March 7, 2001
- ----------------
Melvyn N. Klein
JOHN R. PETTY* Director March 7, 2001
- --------------
John R. Petty
SHELI Z. ROSENBERG* Director March 7, 2001
- -------------------
Sheli Z. Rosenberg
STUART M. SLOAN* Director March 7, 2001
- ---------------
Stuart M. Sloan
THOMAS C. THEOBALD* Director March 7, 2001
- -------------------
Thomas C. Theobald
SAMUEL ZELL* Director March 7, 2001
- ------------
Samuel Zell
*By DENNIS J. LETHAM
----------------
Dennis J. Letham (Attorney in fact) Dennis J. Letham, as attorney in
fact for each person indicated.