Attached files
| file | filename |
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| EX-99.1 - EX-99.1 - ESSENDANT INC | d617078dex991.htm |
| 8-K - 8-K - ESSENDANT INC | d617078d8k.htm |
 October 25, 2013
1
United Stationers Inc.
Earnings Presentation
Third Quarter 2013
Exhibit 99.2 |
 October 25, 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 services 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. |
 October 25, 2013
Headlines For the Three Months Ended
September 30, 2013
Sales were up 2.1% to $1.3 billion compared with Q3 2012, after adjusting
for one more work day in the current quarter.
Earnings per diluted share were $1.01, up 11% compared with Q3 2012
EPS of $0.91.
Gross
margin
of
$203.7
million,
or
15.2%
of
sales,
was
down
from
$203.8 million, or 15.8% of sales, in the prior-year quarter.
Operating expenses in Q3 2013 were $136.3 million, or 10.2% of sales,
compared with $140.1 million, or 10.9% of sales, in Q3 2012.
Operating income was up 6% to $67.4 million, or 5.0% of sales, compared
to $63.6 million, or 4.9% of sales, in the prior-year quarter.
Net income in the current quarter was $40.5 million, up 10% compared with
$36.8 million in Q3 2012.
3 |
 October 25, 2013
4
Consolidated Statement of Income
For the Three Months Ended September 30, 2013 and 2012 |
 October 25, 2013
Headlines For the Nine Months Ended September 30, 2013
Sales were $3.9 billion, up slightly compared with the prior-year period.
Adjusted earnings per diluted share increased 20.9% to $2.43*, compared
with an adjusted YTD September 2012 EPS of $2.01*.
Gross margin rate of 15.4% was up from 14.9% last year.
Adjusted operating expenses YTD September 2013 were $428.1 million*, or
11.1%* of sales, compared with an adjusted $421.1 million*, or 11.0%* of
sales, in the prior-year period.
Adjusted operating income was $166.0 million*, or 4.3%* of sales, up from
an adjusted $151.8 million*, or 4.0%* of sales, in the prior-year period.
Adjusted net income was $98.0 million*, compared with an adjusted $82.8
million* in the same period last year.
Net cash provided by operating activities was $79.4 million versus $155.7
million in the prior-year period.
During the year, the Company repurchased 1.3 million shares for $47.0
million and paid cash dividends of $16.8 million to common shareholders.
5 |
 October 25, 2013
Consolidated Statement of Income
For the Nine Months Ended September 30, 2013 and 2012
6
% to sales change
$
% to Sales
$
% to Sales
$ change
% change
Fav (Unfav)
$ thousands (except EPS)
YTD Q3 2013
YTD Q3 2013
YTD Q3 2012
YTD Q3 2012
Fav (Unfav)
Fav (Unfav)
basis points
Net Sales
3,861,655
$
3,836,032
$
25,623
$
0.7%
Gross Margin
594,122
15.39%
572,946
14.94%
21,176
3.7%
45
Operating Expense
442,558
11.46%
427,389
11.14%
(15,169)
(3.5%)
(32)
Operating Income
151,564
3.93%
145,557
3.80%
6,007
4.1%
13
Interest & Other
8,703
18,944
10,241
Taxes
53,816
47,708
(6,108)
Net Income
89,045
$
78,905
$
10,140
$
Diluted Shares (000s)
40,331
41,229
898
2.2%
Diluted EPS
2.21
$
1.91
$
0.30
$
15.7%
Adjusted to exclude non-operating items *
Adjusted Operating Expense
428,126
$
11.09%
421,142
$
10.98%
(6,984)
$
(1.7%)
(11)
Adjusted Operating Income
165,996
4.30%
151,804
3.96%
14,192
9.3%
34
Adjusted Net Income
97,993
82,778
15,215
18.4%
Adjusted Diluted EPS
2.43
$
2.01
$
0.42
$
20.9% |
 October 25, 2013
7
Sales
by Product Category –
Q3 2013
Sales
Sales
Sales
Sales
Sales
growth
(decline)
growth
(decline)
growth (decline)
growth (decline)
growth (decline)
Q3 2013
Q2 2013
Q1 2013
Q4 2012
Q3 2012
Category
vs Q3 2012
vs Q2 2012
vs Q1 2012
vs Q4 2011
vs Q3 2011
Technology
(1.6%)
(6.3%)
(5.9%)
(0.1%)
(4.5%)
Office Products
(3.3%)
(4.0%)
(6.5%)
1.2%
1.2%
Janitorial/
Breakroom
3.8%
2.6%
3.0%
1.9%
2.3%
Industrial
30.4%
31.5%
35.7%
30.3%
7.0%
Furniture
(2.8%)
(5.0%)
(3.1%)
3.9%
(2.9%)
Technology
29%
Office Products
27%
Janitorial/
Breakroom
27%
Furniture
7%
Industrial
10%
Q3 2013
Sales Mix |
 October 25, 2013
8
Sales by Channel –
Q3 2013 |
 October 25, 2013
9
Gross Margin |
 October 25, 2013
10
Adjusted Operating Expense* |
 October 25, 2013
11
Adjusted Operating Income* |
 October 25, 2013
12
Adjusted Earnings per Share* |
 October 25, 2013
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
Accounts Receivable
642.0
$
655.0
$
669.0
$
658.8
$
632.2
$
662.2
$
695.0
$
Inventories (LIFO)
672.3
692.9
643.6
767.2
726.2
732.2
722.8
Accounts Payable
433.7
446.6
443.0
495.3
431.9
475.2
469.9
Q1 12
Q2 12
Q3 12
Q4 12
Q1 13
Q2 13
Q3 13
Net Trade A/R DSO
40
40
40
40
39
39
39
Inventory Turns
6.2
6.4
6.5
5.9
5.7
5.9
6.2
A/P as % Inventory (LIFO)
65%
64%
69%
65%
59%
65%
65%
A/P as % Inventory (FIFO)
56%
56%
59%
57%
52%
56%
56% |
 October 25, 2013
14
Cash Flows
QTD
QTD
QTD
QTD
2012
QTD
QTD
QTD
2013
$ Millions
Q1 12
Q2 12
Q3 12
Q4 12
YTD
Q1 13
Q2 13
Q3 13
YTD
Net Income
15.1
$
27.0
$
36.8
$
32.9
$
111.8
$
13.8
$
34.7
$
40.5
$
89.0
$
Depreciation & Amortization
8.8
9.0
9.2
10.1
37.1
9.7
10.1
10.1
29.9
Share-based compensation
1.9
1.3
2.0
3.5
8.7
2.4
3.1
2.0
7.5
Change in Accounts Receivable
17.6
(13.2)
(13.7)
31.1
21.8
26.3
(30.3)
(32.9)
(36.9)
Change in Inventory
70.0
(21.1)
49.7
(88.2)
10.4
40.8
(9.2)
9.3
40.9
Change in Accounts Payable
(65.3)
12.8
(3.5)
40.3
(15.7)
(63.2)
43.1
(5.4)
(25.5)
Change in Other Working Capital
(2.4)
5.4
19.4
(0.5)
21.9
(30.6)
11.8
13.7
(5.1)
Change in Working Capital
19.9
(16.1)
51.9
(17.3)
38.4
(26.7)
15.4
(15.3)
(26.6)
$
Other
(17.8)
(0.8)
7.5
4.9
(6.2)
(12.6)
(4.6)
(3.2)
(20.4)
Cash provided by operating activities
27.9
20.4
107.4
34.1
189.8
(13.4)
58.7
34.1
79.4
Capital Expenditures
(4.5)
(5.8)
(10.0)
(12.5)
(32.8)
(9.1)
(7.9)
(5.8)
(22.8)
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)
(19.3)
Free Cash Flow *
23.5
$
14.6
$
97.5
$
22.2
$
157.8
$
(22.4)
$
54.2
$
28.3
$
60.1
$
|
 October 25, 2013
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
Debt
512.2
$
527.1
$
455.0
$
524.4
$
537.0
$
518.5
$
507.5
$
Equity
682.6
689.2
710.8
738.1
755.1
760.5
796.2
Total capitalization
1,194.8
$
1,216.3
$
1,165.8
$
1,262.5
$
1,292.1
$
1,279.0
$
1,303.7
$
Debt-to-total capitalization
42.9%
43.3%
39.0%
41.5%
41.6%
40.5%
38.9% |