Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - ESSENDANT INC | d571944d8k.htm |
| EX-99.1 - EX-99.1 - ESSENDANT INC | d571944dex991.htm |
 July 23, 2013
1
United Stationers Inc.
Earnings Presentation
Second Quarter 2013
TO BE FILED IN
CONJUNCTION WITH
PRESS RELEASE
Exhibit 99.2 |
 July 23, 2013
2
Forward Looking Statements and
Non-GAAP Measures
This presentation contains forward-looking statements, including references to goals, plans,
strategies, objectives, projected costs or savings, anticipated future performance, results or
events and other statements that are not strictly historical in nature. These statements
are based on management’s current expectations, forecasts and assumptions. This means they involve a number of risks
and uncertainties that could cause actual results to differ materially from those expressed or implied
here. These risks and uncertainties include, but are not limited to the following:
prevailing economic conditions and changes affecting the business products industry and the
general economy; United’s ability to effectively manage its operations and to implement growth, cost-reduction and margin-
enhancement initiatives; United’s reliance on key customers, and the risks inherent in continuing
or increased customer concentration; United’s reliance on key suppliers and the supplier
allowances and promotional incentives they offer; United’s reliance on independent
resellers for a significant percentage of its net sales and, therefore, the importance of the
continued independence, viability and success of these resellers; continuing or increasing
competitive activity and pricing pressures within existing or expanded product categories,
including competition from product manufacturers who sell directly to United’s customers; the
impact of a loss of, or substantial decrease in, the availability of products or service from
key vendors at competitive prices; United’s ability to maintain its existing information
technology systems and the systems and eCommerce services that it provides to customers, and to
successfully procure, develop and implement new systems and services without business
disruption or other unanticipated difficulties or costs; the creditworthiness of United’s
customers; United’s ability to manage inventory in order to maximize sales and supplier allowances while minimizing excess
and obsolete inventory; United’s success in effectively identifying, consummating and integrating
acquisitions; the risks and expense associated with United’s obligations to maintain the
security of private information provided by United’s customers; the costs and risks
related to compliance with laws, regulations and industry standards affecting United’s business;
the availability of financing sources to meet United’s business needs; United’s
reliance on key management personnel, both in day-to-day operations and in execution of new
business initiatives; and the effects of hurricanes, acts of terrorism and other natural or
man-made disruptions.
Shareholders, potential investors and other readers are urged to consider these risks and
uncertainties in evaluating forward-looking statements and are cautioned not to place undue
reliance on the forward-looking statements. For additional information about risks and
uncertainties that could materially affect United’s results, please see the company’s
Securities and Exchange Commission filings. The forward-looking information in this
news release is made as of this date only, and the company does not undertake to update any
forward-looking statement. Investors are advised to consult any further disclosure by United
regarding the matters discussed in this release in its filings with the Securities and Exchange
Commission and in other written statements it makes from time to time. It is not possible
to anticipate or foresee all risks and uncertainties, and investors should not consider any list of risks and uncertainties to be
exhaustive or complete.
* This is non-GAAP information. A reconciliation of these items to the most
comparable GAAP measures is presented on the company’s Website (www.unitedstationers.com)
under the Investor Information section. Except as noted, all references within this presentation
to financial results are presented in accordance with U.S. Generally Accepted Accounting Principles. Certain
prior-period amounts have been reclassified to conform to the current presentation. |
 July 23, 2013
Headlines For the Three Months Ended June 30, 2013
Sales were $1.3 billion, flat compared with Q2 2012.
Earnings per diluted share were $0.86 up 30%, compared with Q2 2012
EPS of $0.66.
Gross margin of $201.9 million or 15.8% of sales, was up from $188.3
million or 14.8% of sales in the prior-year quarter.
Operating expenses in Q2 2013 were $143.0 million or 11.2% of sales,
compared with $137.9 million or 10.8% of sales in Q2 2012.
Operating income was $58.9 million or 4.6% as a percent of sales, and up
from $50.3 million or 3.9% of sales in the prior-year quarter.
Net income was $34.7 million, compared with $27.0 million in Q2 2012.
Net cash provided by operating activities was $58.7 million in Q2 2013
versus $20.4 million in Q2 2012.
During the quarter, the Company repurchased 1.0 million shares for $32.7
million and paid a cash dividend of $5.6 million to common shareholders.
3 |
 July 23, 2013
4
Consolidated Statement of Income
For the Three Months Ended June 30, 2013 and 2012
% to sales change
$
% to Sales
$
% to Sales
$ change
% change
Fav (Unfav)
$ thousands (except EPS)
QTD Q2 2013
QTD Q2 2013
QTD Q2 2012
QTD Q2 2012
Fav (Unfav)
Fav (Unfav)
basis points
Net Sales
1,274,494
$
1,275,710
$
(1,216)
$
(0.1%)
Gross Margin
201,936
15.84%
188,259
14.76%
13,677
7.3%
108
Operating Expense
143,009
11.22%
137,935
10.82%
(5,074)
(3.7%)
(40)
Operating Income
58,927
4.62%
50,324
3.94%
8,603
17.1%
68
Interest & Other
2,856
7,070
4,214
Taxes
21,401
16,225
(5,176)
Net Income
34,670
$
27,029
$
7,641
$
Diluted Shares (000s)
40,328
40,887
(559)
(1.4%)
Diluted EPS
0.86
$
0.66
$
0.20
$
30% |
 July 23, 2013
Headlines For the Six Months Ended June 30, 2013
Sales were $2.5 billion, flat to YTD June 2012.
Adjusted earnings per diluted share were $1.42*, compared with an
adjusted YTD June 2012 EPS of $1.11*.
Gross margin rate of 15.5% was up from 14.5% last year.
Adjusted operating expenses YTD June 2013 were $291.9 million* or
11.6%* of sales, compared with an adjusted $281.0 million* or 11.0%* of
sales in the prior-year period.
Adjusted operating income was $98.6 million* or 3.9%* as a percent of
sales, up from an adjusted $88.2 million* or 3.5%* of sales in the prior-year
period.
Adjusted net income was $57.5 million*, compared with an adjusted $46.0
million* in the same period last year.
Net cash provided by operating activities was $45.3 million versus $48.3
million in the prior year period.
During the year, the Company repurchased 1.2 million shares for $39.8
million and paid cash dividends of $11.2 million to common shareholders.
5 |
 July 23, 2013
Consolidated Statement of Income
For the Six Months Ended June 30, 2013 and 2012
6
% to sales change
$
% to Sales
$
% to Sales
$ change
% change
Fav (Unfav)
$ thousands (except EPS)
YTD Q2 2013
YTD Q2 2013
YTD Q2 2012
YTD Q2 2012
Fav (Unfav)
Fav (Unfav)
basis points
Net Sales
2,524,979
$
2,547,357
$
(22,378)
$
(0.9%)
Workday Adjusted Sales Growth
(0.1%)
Gross Margin
390,461
15.46%
369,188
14.49%
21,273
5.8%
97
Operating Expense
306,293
12.13%
287,272
11.28%
(19,021)
(6.6%)
(85)
Operating Income
84,168
3.33%
81,916
3.21%
2,252
2.7%
12
Interest & Other
5,969
14,236
8,267
Taxes
29,655
25,539
(4,116)
Net Income
48,544
$
42,141
$
6,403
$
Diluted Shares (000s)
40,475
41,626
(1,151)
(2.8%)
Diluted EPS
1.20
$
1.01
$
0.19
$
18.8%
Adjusted to exclude non-operating items *
Adjusted Operating Expense
291,861
$
11.56%
281,025
$
11.03%
(10,836)
$
(3.9%)
(53)
Adjusted Operating Income
98,600
3.90%
88,163
3.46%
10,437
11.8%
44
Adjusted Net Income
57,492
46,014
11,478
24.9%
Adjusted Diluted EPS
1.42
$
1.11
$
0.31
$
28% |
 July 23, 2013
7
Sales
by Product Category –
Q2 2013
Sales
Sales
Sales
Sales
Sales
growth
(decline)
Q2 2013
Q1 2013
Q4 2012
Q3 2012
Q2 2012
Category
vs Q2 2012
vs Q1 2012
vs Q4 2011
vs Q3 2011
vs Q2 2011
Technology
(6.3%)
(5.9%)
(0.1%)
(4.5%)
(2.8%)
Office Products
(4.0%)
(6.5%)
1.2%
1.2%
(0.8%)
Janitorial/
Breakroom
2.6%
3.0%
1.9%
2.3%
5.9%
Industrial
31.5%
35.7%
30.3%
7.0%
13.2%
Furniture
(5.0%)
(3.1%)
3.9%
(2.9%)
0.3%
growth
(decline)
growth
(decline)
growth
(decline)
growth
(decline) |
 July 23, 2013
Sales growth
Sales growth
Sales growth
Sales growth
Sales growth
(decline)
(decline)
(decline)
(decline)
(decline)
Q2 2013
Q1 2013
Q4 2012
Q3 2012
Q2 2012
Channel
vs Q2 2012
vs Q1 2012
vs Q4 2011
vs Q3 2011
vs Q2 2011
Independent
& Other
0.0%
0.1%
3.8%
1.0%
3.6%
Nationals
(0.9%)
(1.3%)
1.9%
(7.4%)
(12.2%)
Independent
& Other
89%
Nationals
11%
Q2 2013
8
Sales by Channel –
Q2 2013 |
 July 23, 2013
9
Gross Margin
dollars in millions
Q2 12
Q3 12
Q4 12
Q1 13
Q2 13
Dollars
$188.3
$203.8
$201.7
$188.5
$201.9
Rate
14.8%
15.8%
16.2%
15.1%
15.8%
10.0%
12.5%
15.0%
17.5%
20.0%
$100.0
$125.0
$150.0
$175.0
$200.0 |
 July 23, 2013
10
Adjusted Operating Expense*
dollars in millions
Q2 12
Q3 12
Q4 12
Q1 13 *
Q2 13
Dollars
$137.9
$140.1
$146.3
$148.9
$143.0
Rate
10.8%
10.9%
11.8%
11.9%
11.2%
7.5%
10.0%
12.5%
15.0%
$100.0
$125.0
$150.0 |
 July 23, 2013
11
Adjusted Operating Income*
dollars in millions
Q2 12
Q3 12
Q4 12
Q1 13 *
Q2 13
Dollars
$50.3
$63.6
$55.4
$39.7
$58.9
Rate
3.9%
4.9%
4.4%
3.2%
4.6%
2.0%
3.0%
4.0%
5.0%
6.0%
$-
$10.0
$20.0
$30.0
$40.0
$50.0
$60.0
$70.0 |
 July 23, 2013
12
Adjusted Earnings per Share*
shares in millions
Q2 12
Q3 12
Q4 12
Q1 13 *
Q2 13
EPS
$0.66
$0.91
$0.81
$0.56
$0.86
Diluted Shares
40.887
40.530
40.406
40.628
40.328
-
1.000
$-
$0.10
$0.20
$0.30
$0.40
$0.50
$0.60
$0.70
$0.80
$0.90 |
 July 23, 2013
13
Working Capital Summary
$ Millions
3/31/2012
6/30/2012
9/30/2012
12/31/2012
3/31/2013
6/30/2013
Accounts Receivable
642.0
$
655.0
$
669.0
$
658.8
$
632.2
$
662.2
$
Inventories (LIFO)
672.3
692.9
643.6
767.2
726.2
732.2
Accounts Payable
433.7
446.6
443.0
495.3
431.9
475.2
Q1 12
Q2 12
Q3 12
Q4 12
Q1 13
Q2 2013
Net Trade A/R DSO
40
40
40
40
39
39
Inventory Turns
6.2
6.4
6.5
5.9
5.7
5.9
A/P as % Inventory (LIFO)
65%
64%
69%
65%
59%
65%
A/P as % Inventory (FIFO)
56%
56%
59%
57%
52%
56% |
 July 23, 2013
14
Cash Flows
QTD
QTD
QTD
QTD
2012
QTD
QTD
2013
$ Millions
Q1 12
Q2 12
Q3 12
Q4 12
YTD
Q1 13
Q2 13
YTD
Net Income
15.1
$
27.0
$
36.8
$
32.9
$
111.8
$
13.8
$
34.7
$
48.5
$
Depreciation & Amortization
8.8
9.0
9.2
10.1
37.1
9.7
10.1
19.8
Share-based compensation
1.9
1.3
2.0
3.5
8.7
2.4
3.1
5.5
Change in Accounts Receivable
17.6
(13.2)
(13.7)
31.1
21.8
26.3
(30.3)
(4.0)
Change in Inventory
70.0
(21.1)
49.7
(88.2)
10.4
40.8
(9.2)
31.6
Change in Accounts Payable
(65.3)
12.8
(3.5)
40.3
(15.7)
(63.2)
43.1
(20.1)
Change in Other Working Capital
(2.4)
5.4
19.4
(0.5)
21.9
(30.6)
11.8
(18.8)
Change in Working Capital
19.9
(16.1)
51.9
(17.3)
38.4
(26.7)
15.4
(11.3)
Other
(17.8)
(0.8)
7.5
4.9
(6.2)
(12.6)
(4.6)
(17.2)
Cash provided by operating activities
27.9
20.4
107.4
34.1
189.8
(13.4)
58.7
45.3
Capital Expenditures
(4.5)
(5.8)
(10.0)
(12.5)
(32.8)
(9.1)
(7.9)
(17.0)
Proceeds from disposition of fixed assets
0.1
0.0
0.1
0.6
0.8
0.1
3.4
3.5
Net cash used for capital expenditures *
(4.4)
(5.8)
(9.9)
(11.9)
(32.0)
(9.0)
(4.5)
(13.5)
Free Cash Flow *
23.5
$
14.6
$
97.5
$
22.2
$
157.8
$
(22.4)
$
54.2
$
31.8
$ |
 July 23, 2013
15
Debt and Capitalization
$ Millions
3/31/2012
6/30/2012
9/30/2012
12/31/2012
3/31/2013
6/30/2013
Debt
512.2
$
527.1
$
455.0
$
524.4
$
537.0
$
518.5
$
Equity
682.6
689.2
710.8
738.1
755.1
760.5
Total capitalization
1,194.8
$
1,216.3
$
1,165.8
$
1,262.5
$
1,292.1
$
1,279.0
$
Debt-to-total capitalization
42.9%
43.3%
39.0%
41.5%
41.6%
40.5% |