Attached files
| file | filename |
|---|---|
| 8-K - 8-K - ESSENDANT INC | d713903d8k.htm |
| EX-99.1 - EX-99.1 - ESSENDANT INC | d713903dex991.htm |
 April 23, 2014
1
United Stationers Inc.
Earnings Presentation
First Quarter 2014
Exhibit 99.2 |
 April 23, 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. |
 April 23, 2014
Headlines For the Three Months Ended March 31, 2014
3
Sales were $1.254 billion, up 0.3% from $1.250 billion in Q1 2013.
Earnings per diluted share were $0.55, down 1.8% compared with Q1 2013
adjusted EPS of $0.56*.
Gross
margin
of
$187.1
million,
or
14.9%
of
sales,
was
down
from
$188.5
million, or 15.1% of sales, in the prior-year quarter.
Operating expenses in Q1 2014 were $148.8 million, or 11.9% of sales,
compared
with
adjusted
operating
expenses
of
$148.9
million*,
or
11.9%*
of
sales, in Q1 2013.
Operating income was $38.2 million, or 3.0% of sales, compared to adjusted
operating income of $39.7 million*, or 3.2%* of sales, in the prior-year
quarter.
Net income in the current quarter was $21.9 million compared with adjusted
net income of $22.8 million* in Q1 2013.
During the current quarter, the Company repurchased 0.3 million shares for
$12.5 million and paid cash dividends of $5.5 million to common
shareholders |
 April 23, 2014
4
Consolidated Statement of Income
For the Three Months Ended March 31, 2014 and 2013
% to sales change
$
% to Sales
$
% to Sales
$ change
% change
Fav (Unfav)
$ thousands (except EPS)
QTD Q1 2014
QTD Q1 2014
QTD Q1 2013
QTD Q1 2013
Fav (Unfav)
Fav (Unfav)
basis points
Net Sales
1,254,139
$
1,250,485
$
3,654
$
0.3%
Gross Margin
187,083
14.92%
188,525
15.08%
(1,442)
(0.8%)
(16)
Operating Expense
148,849
11.87%
163,284
13.06%
14,435
8.8%
119
Operating Income
38,234
3.05%
25,241
2.02%
12,993
51.5%
103
Interest & Other
3,374
3,113
(261)
Taxes
13,003
8,254
(4,749)
Net Income
21,857
$
13,874
$
7,983
$
Diluted Shares (000s)
39,655
40,628
973
2.4%
Diluted EPS
0.55
$
0.34
$
0.21
$
61.8%
Adjusted to exclude non-operating items *
Adjusted Operating Expense
148,849
$
11.87%
148,852
$
11.91%
3
$
0.0%
4
Adjusted Operating Income
38,234
3.05%
39,673
3.17%
(1,439)
(3.6%)
(12)
Adjusted Net Income
21,857
22,822
(965)
(4.2%)
Adjusted Diluted EPS
0.55
$
0.56
$
(0.01)
$
(1.8%) |
  April 23, 2014
5
Sales
by Product Category –
Q1 2014
Sales
Sales
Sales
Sales
Sales
growth (decline)
growth (decline)
growth (decline)
growth (decline)
growth (decline)
Q1 2014
Q4 2013***
Q3 2013***
Q2 2013***
Q1 2013***
Category
vs Q1 2013
vs Q4 2012***
vs Q3 2012
vs Q2 2012
vs Q1 2012
Technology
(3.0%)
(11.1%)
(1.6%)
(6.3%)
(5.9%)
Office Products
1.6%
(2.6%)
(3.3%)
(4.0%)
(6.5%)
Furniture
(3.8%)
(4.5%)
(2.8%)
(5.1%)
(3.1%)
Janitorial/
Breakroom
2.3%
7.1%
3.8%
2.6%
3.0%
Industrial
1.4%
10.8%
30.4%
31.5%
35.6%
Janitorial/Breakroom
27%
Industrial
11%
Technology 29%
Office Products 27%
Furniture
6%
Q1 2014
Sales Mix
Total
Office
Products 62%
*** Industrial sales includes the impact of the acquisition of OKI Supply Co. on
November 1, 2012 |
 April 23, 2014
6
Sales by Channel –
Q1 2014
Sales growth
Sales growth
Sales growth
Sales growth
Sales growth
(decline)
(decline)
(decline)
(decline)
(decline)
Q1 2014
Q4 2013
Q3 2013
Q2 2013
Q1 2013
Channel
vs Q1 2013
vs Q4 2012
vs Q3 2012
vs Q2 2012
vs Q1 2012
Independent
& Other
0.9%
(1.6%)
2.8%
0.0%
0.1%
Nationals
(3.7%)
(1.9%)
(3.3%)
(0.9%)
(1.3%)
Independent
& Other
88%
Nationals
12%
Q1 2014 |
 April 23, 2014
7
Gross Margin
dollars in millions
Q1 13
Q2 13
Q3 13
Q4 13
Q1 14
Dollars
$188.5
$201.9
$203.7
$195.5
$187.1
Rate
15.1%
15.8%
15.2%
16.0%
14.9%
10.0%
12.5%
15.0%
17.5%
20.0%
$150.0
$160.0
$170.0
$180.0
$190.0
$200.0
$210.0 |
  April 23, 2014
8
Adjusted Operating Expense*
dollars in millions
Q1 13 *
Q2 13
Q3 13
Q4 13 *
Q1 14
Dollars
$148.9
$143.0
$136.3
$137.9
$148.8
Rate
11.9%
11.2%
10.2%
11.3%
11.9%
7.5%
10.0%
12.5%
15.0%
$100.0
$125.0
$150.0 |
 April 23, 2014
9
Adjusted Operating Income*
dollars in millions
Q1 13 *
Q2 13
Q3 13
Q4 13 *
Q1 14
Dollars
$39.7
$58.9
$67.4
$57.5
$38.2
Rate
3.2%
4.6%
5.0%
4.7%
3.0%
2.0%
3.0%
4.0%
5.0%
6.0%
$-
$10.0
$20.0
$30.0
$40.0
$50.0
$60.0
$70.0 |
 April 23, 2014
10
Adjusted Earnings per Share*
shares in millions
Q1 13 *
Q2 13
Q3 13
Q4 13 *
Q1 14
EPS
$0.56
$0.86
$1.01
$0.86
$0.55
Diluted Shares
40.628
40.328
40.031
39.915
39.655
-
1.000
$-
$0.20
$0.40
$0.60
$0.80
$1.00 |
 April 23, 2014
11
Working Capital Summary
$ Millions
3/31/2013
6/30/2013
9/30/2013
12/31/2013
3/31/2014
Accounts Receivable
632.2
$
662.2
$
695.0
$
643.4
$
658.4
$
Inventories (LIFO)
726.2
732.2
722.8
830.3
748.5
Accounts Payable
431.9
475.2
469.9
476.1
397.2
Q1 13
Q2 2013
Q3 2013
Q4 2013
Q1 2014
Net Trade A/R DSO
39
39
39
38
40
Inventory Turns
5.7
5.9
6.2
5.3
5.4
A/P as % Inventory (LIFO)
59%
65%
65%
57%
53%
A/P as % Inventory (FIFO)
52%
56%
56%
51%
46% |
 April 23, 2014
12
Cash Flows
QTD
QTD
QTD
QTD
2013
QTD
$ Millions
Q1 13
Q2 13
Q3 13
Q4 13
YTD
Q1 14
Net Income
13.8
$
34.7
$
40.5
$
34.2
$
123.2
$
21.9
$
Depreciation & Amortization
9.7
10.1
10.1
10.3
40.2
9.5
Share-based compensation
2.4
3.1
2.0
3.3
10.8
3.2
Change in Accounts Receivable
26.3
(30.3)
(32.9)
51.6
14.7
(15.6)
Change in Inventory
40.8
(9.2)
9.3
(107.5)
(66.6)
81.7
Change in Accounts Payable
(63.2)
43.1
(5.4)
6.2
(19.3)
(78.9)
Change in Other Working Capital
(30.6)
11.8
13.7
0.9
(4.2)
(13.2)
Change in Working Capital
(26.7)
15.4
(15.3)
(48.8)
(75.4)
(26.0)
Other
(12.6)
(4.6)
(3.2)
(3.7)
(24.1)
(7.1)
Cash provided by operating activities
(13.4)
58.7
34.1
(4.7)
74.7
1.5
Capital Expenditures
(9.1)
(7.9)
(5.8)
(11.0)
(33.8)
(6.4)
Proceeds from disposition of fixed assets
0.1
3.4
-
-
3.5
0.5
Net cash used for capital expenditures *
(9.0)
(4.5)
(5.8)
(11.0)
(30.3)
(5.9)
Free Cash Flow *
(22.4)
$
54.2
$
28.3
$
(15.7)
$
44.4
$
(4.4)
$ |
 April 23, 2014
13
Debt and Capitalization
$ Millions
3/31/2013
6/30/2013
9/30/2013
12/31/2013
3/31/2014
Debt
537.0
$
518.5
$
507.5
$
533.7
$
562.5
$
Equity
755.1
760.5
796.2
825.5
830.0
Total capitalization
1,292.1
$
1,279.0
$
1,303.7
$
1,359.2
$
1,392.5
$
Debt-to-total capitalization
41.6%
40.5%
38.9%
39.3%
40.4% |