Attached files
| file | filename |
|---|---|
| 8-K - 8-K - ESSENDANT INC | d676154d8k.htm |
| EX-99.1 - EX-99.1 - ESSENDANT INC | d676154dex991.htm |
 1
United Stationers Inc.
Earnings Presentation
Fourth Quarter 2013
February 14, 2014
Exhibit 99.2 |
 February 14, 2014
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: United’s reliance on key customers, and the risks inherent in continuing or increased
customer concentration; end-user demand for products in the office, technology and
furniture product categories may continue to decline; 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 supplier allowances and promotional incentives; 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 supply chain disruptions or changes in key suppliers’ distribution strategies;
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 presentation 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 presentation 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. |
 February 14, 2014
Headlines For the Three Months Ended
December 31, 2013
Sales were down 1.6% to $1.2 billion compared with Q4 2012.
Adjusted earnings per diluted share were $0.86*, up 5% compared with Q4
2012 EPS of $0.81.
Gross
margin
of
$195.5
million,
or
16.0%
of
sales,
was
down
from
$201.7
million, or 16.2% of sales, in the prior-year quarter.
Adjusted operating expenses in Q4 2013 were $137.9 million*, or 11.3%* of
sales, compared with $146.3 million, or 11.8% of sales, in Q4 2012.
Adjusted operating income was up 4% to $57.5 million*, or 4.7%* of sales,
compared to $55.4 million, or 4.4% of sales, in the prior-year quarter.
Adjusted net income in the current quarter was $34.5 million*, up 5%
compared with $32.9 million in Q4 2012.
3 |
 February 14, 2014
4
Consolidated Statement of Income
For the Three Months Ended December 31, 2013 and 2012
% to sales change
$
% to Sales
$
% to Sales
$ change
% change
Fav (Unfav)
$ thousands (except EPS)
QTD Q4 2013
QTD Q4 2013
QTD Q4 2012
QTD Q4 2012
Fav (Unfav)
Fav (Unfav)
basis points
Net Sales
1,223,638
$
1,244,074
$
(20,436)
$
(1.6%)
Gross Margin
195,456
15.97%
201,658
16.20%
(6,202)
(3.1%)
(23)
Operating Expense
137,870
11.27%
146,304
11.76%
8,434
5.8%
49
Operating Income
57,586
4.70%
55,354
4.44%
2,232
4.0%
26
Interest & Other
2,937
4,332
1,395
Taxes
20,524
18,097
(2,427)
Net Income
34,125
$
32,925
$
1,200
$
Diluted Shares (000s)
39,915
40,406
491
1.2%
Diluted EPS
0.85
$
0.81
$
0.04
$
4.9%
Adjusted
to
exclude
non-operating
items
*
Adjusted Operating Expense
137,946
$
11.27%
146,304
$
11.76%
8,358
$
5.7%
49
Adjusted Operating Income
57,510
4.70%
55,354
4.44%
2,156
3.9%
26
Adjusted Net Income
34,527
32,925
1,602
4.9%
Adjusted Diluted EPS
0.86
$
0.81
$
0.05
$
6.2% |
 February 14, 2014
Headlines For the 12 Months Ended December 31, 2013
Sales were flat with the prior year at $5.1 billion.
Adjusted earnings per diluted share increased 17% to $3.29*, compared
with an adjusted 2012 EPS of $2.82*.
Gross margin rate of 15.5% was up from 15.2% last year.
Adjusted operating expenses were $566.3 million*, or 11.1%* of sales,
compared with an adjusted $567.4 million*, or 11.2%* of sales, in 2012.
Adjusted operating income was $223.3 million*, or 4.4%* of sales, up from
an adjusted $207.2 million*, or 4.1%* of sales, in the prior-year period.
Adjusted net income was $132.4 million*, compared with an adjusted $115.7
million* in the same period last year.
Net cash provided by operating activities was $74.7 million versus $189.8
million in the prior-year period.
During the year, the Company repurchased 1.7 million shares for $62.1
million and paid cash dividends of $22.3 million to common shareholders.
5 |
 February 14, 2014
Consolidated Statement of Income
For the 12 Months Ended December 31, 2013 and 2012
6
% to sales change
$
% to Sales
$
% to Sales
$ change
% change
Fav (Unfav)
$ thousands (except EPS)
YTD Q4 2013
YTD Q4 2013
YTD Q4 2012
YTD Q4 2012
Fav (Unfav)
Fav (Unfav)
basis points
Net Sales
5,085,293
$
5,080,106
$
5,187
$
0.1%
Gross Margin
789,578
15.52%
774,604
15.24%
14,974
1.9%
28
Operating Expense
580,428
11.41%
573,693
11.28%
(6,735)
(1.2%)
(13)
Operating Income
209,150
4.11%
200,911
3.96%
8,239
4.1%
15
Interest & Other
11,640
23,276
11,636
Taxes
74,340
65,805
(8,535)
Net Income
123,170
$
111,830
$
11,340
$
Diluted Shares (000s)
40,236
40,991
755
1.8%
Diluted EPS
3.06
$
2.73
$
0.33
$
12.1%
Adjusted to exclude non-operating items *
Adjusted Operating Expense
566,270
$
11.13%
567,446
$
11.16%
1,176
$
0.2%
3
Adjusted Operating Income
223,308
4.39%
207,158
4.08%
16,150
7.8%
31
Adjusted Net Income
132,397
115,703
16,694
14.4%
Adjusted Diluted EPS
3.29
$
2.82
$
0.47
$
16.7% |
 February 14, 2014
7
Sales
by Product Category –
Q4 2013
Sales
Sales
Sales
Sales
Sales
growth (decline)
growth (decline)
growth (decline)
growth (decline)
growth (decline)
Q4 2013
Q3 2013
Q2 2013
Q1 2013
Q4 2012
Category
vs Q4 2012
vs Q3 2012
vs Q2 2012
vs Q1 2012
vs Q4 2011
Technology
(11.1%)
(1.6%)
(6.3%)
(5.9%)
(0.1%)
Office Products
(2.6%)
(3.3%)
(4.0%)
(6.5%)
1.2%
Janitorial/
Breakroom
7.1%
3.8%
2.6%
3.0%
1.9%
Industrial
10.8%
30.4%
31.5%
35.7%
30.3%
Furniture
(4.5%)
(2.8%)
(5.0%)
(3.1%)
3.9%
Technology
29%
Office Products
26%
Janitorial/
Breakroom
28%
Furniture
6%
Industrial
11%
Q4 2013
Sales Mix |
 February 14, 2014
8
Sales by Channel –
Q4 2013
Sales growth
Sales growth
Sales growth
Sales growth
Sales growth
(decline)
(decline)
(decline)
(decline)
(decline)
Q4 2013
Q3 2013
Q2 2013
Q1 2013
Q4 2012
Channel
vs Q4 2012
vs Q3 2012
vs Q2 2012
vs Q1 2012
vs Q4 2011
Independent
& Other
(1.6%)
2.8%
0.0%
0.1%
3.8%
Nationals
(1.9%)
(3.3%)
(0.9%)
(1.3%)
1.7%
Independent
& Other
88%
Nationals
12%
Q4 2013 |
 February 14, 2014
9
Gross Margin
dollars in millions
Q4 12
Q1 13
Q2 13
Q3 13
Q4 13
Dollars
$201.7
$188.5
$201.9
$203.7
$195.5
Rate
16.2%
15.1%
15.8%
15.2%
16.0%
10.0%
12.5%
15.0%
17.5%
20.0%
$150.0
$160.0
$170.0
$180.0
$190.0
$200.0
$210.0 |
 February 14, 2014
10
Adjusted Operating Expense*
dollars in millions
Q4 12
Q1 13 *
Q2 13
Q3 13
Q4 13 *
Dollars
$146.3
$148.9
$143.0
$136.3
$137.9
Rate
11.8%
11.9%
11.2%
10.2%
11.3%
7.5%
10.0%
12.5%
15.0%
$100.0
$125.0
$150.0 |
 February 14, 2014
11
Adjusted Operating Income*
dollars in millions
Q4 12
Q1 13 *
Q2 13
Q3 13
Q4 13 *
Dollars
$55.4
$39.7
$58.9
$67.4
$57.5
Rate
4.4%
3.2%
4.6%
5.0%
4.7%
2.0%
3.0%
4.0%
5.0%
6.0%
$-
$10.0
$20.0
$30.0
$40.0
$50.0
$60.0
$70.0 |
 February 14, 2014
12
Adjusted Earnings per Share*
shares in millions
Q4 12
Q1 13 *
Q2 13
Q3 13
Q4 13 *
EPS
$0.81
$0.56
$0.86
$1.01
$0.86
Diluted Shares
40.406
40.628
40.328
40.031
39.915
-
1.000
$-
$0.20
$0.40
$0.60
$0.80
$1.00 |
 February 14, 2014
13
Working Capital Summary
$ Millions
3/31/2012
6/30/2012
9/30/2012
12/31/2012
3/31/2013
6/30/2013
9/30/2013
12/31/2013
Accounts Receivable
642.0
$
655.0
$
669.0
$
658.8
$
632.2
$
662.2
$
695.0
$
643.4
$
Inventories (LIFO)
672.3
692.9
643.6
767.2
726.2
732.2
722.8
830.3
Accounts Payable
433.7
446.6
443.0
495.3
431.9
475.2
469.9
476.1
Q1 12
Q2 12
Q3 12
Q4 12
Q1 13
Q2 2013
Q3 2013
Q4 2013
Net Trade A/R DSO
40
40
40
40
39
39
39
38
Inventory Turns
6.2
6.4
6.5
5.9
5.7
5.9
6.2
5.3
A/P as % Inventory (LIFO)
65%
64%
69%
65%
59%
65%
65%
57%
A/P as % Inventory (FIFO)
56%
56%
59%
57%
52%
56%
56%
51% |
 February 14, 2014
14
Cash Flows
QTD
QTD
QTD
QTD
2012
QTD
QTD
QTD
QTD
2013
$ Millions
Q1 12
Q2 12
Q3 12
Q4 12
YTD
Q1 13
Q2 13
Q3 13
Q4 13
YTD
Net Income
15.1
$
27.0
$
36.8
$
32.9
$
111.8
$
13.8
$
34.7
$
40.5
$
34.2
$
123.2
$
Depreciation & Amortization
8.8
9.0
9.2
10.1
37.1
9.7
10.1
10.1
10.3
40.2
Share-based compensation
1.9
1.3
2.0
3.5
8.7
2.4
3.1
2.0
3.3
10.8
Change in Accounts Receivable
17.6
(13.2)
(13.7)
31.1
21.8
26.3
(30.3)
(32.9)
51.6
14.7
Change in Inventory
70.0
(21.1)
49.7
(88.2)
10.4
40.8
(9.2)
9.3
(107.5)
(66.6)
Change in Accounts Payable
(65.3)
12.8
(3.5)
40.3
(15.7)
(63.2)
43.1
(5.4)
6.2
(19.3)
Change in Other Working Capital
(2.4)
5.4
19.4
(0.5)
21.9
(30.6)
11.8
13.7
0.9
(4.2)
Change in Working Capital
19.9
(16.1)
51.9
(17.3)
38.4
(26.7)
15.4
(15.3)
(48.8)
(75.4)
$
Other
(17.8)
(0.8)
7.5
4.9
(6.2)
(12.6)
(4.6)
(3.2)
(3.7)
(24.1)
Cash provided by operating activities
27.9
20.4
107.4
34.1
189.8
(13.4)
58.7
34.1
(4.7)
74.7
Capital Expenditures
(4.5)
(5.8)
(10.0)
(12.5)
(32.8)
(9.1)
(7.9)
(5.8)
(11.0)
(33.8)
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)
(5.8)
(11.0)
(30.3)
Free Cash Flow *
23.5
$
14.6
$
97.5
$
22.2
$
157.8
$
(22.4)
$
54.2
$
28.3
$
(15.7)
$
44.4
$
|
 February 14, 2014
15
Debt and Capitalization
$ Millions
3/31/2012
6/30/2012
9/30/2012
12/31/2012
3/31/2013
6/30/2013
9/30/2013
12/31/2013
Debt
512.2
$
527.1
$
455.0
$
524.4
$
537.0
$
518.5
$
507.5
$
533.7
$
Equity
682.6
689.2
710.8
738.1
755.1
760.5
796.2
825.5
Total capitalization
1,194.8
$
1,216.3
$
1,165.8
$
1,262.5
$
1,292.1
$
1,279.0
$
1,303.7
$
1,359.2
$
Debt-to-total capitalization
42.9%
43.3%
39.0%
41.5%
41.6%
40.5%
38.9%
39.3% |