Anixter International Inc. (NYSE: AXE) today reported sales of $1.56 billion for the quarter ended September 27, 2013, a 3.2 percent decrease compared to the year ago quarter. The year-over-year reported sales decline would have been approximately 2.7 percent excluding the negative impact of the previously reported conclusion of a large security solutions contract in the fourth quarter of 2012. Organic sales, which excludes the impact of the following two items, declined by 2.2 percent year-over-year:
- $9.5 million from the unfavorable effect of copper pricing
- $6.6 million from the unfavorable effect of foreign exchange
Our third quarter of 2013 results included a net $4.7 million after-tax benefit primarily related to closing prior tax years and related interest. Our third quarter of 2012 results included an impairment charge of $27.2 million and an inventory lower-of-cost-or-market adjustment of $1.2 million, resulting in a total non-cash pre-tax charge of $28.4 million (after-tax $27.4 million). Due to the change in the country mix of the full year forecast of earnings, both quarterly periods were negatively impacted by an increase in the annual tax rate. All of the results from continuing operations and year-over-year comparisons herein exclude the impact of these items and reconciliations have been provided in the supplemental information at the end of this release.
Adjusted earnings per diluted share from continuing operations of $1.52 compares to $1.43 in the year ago quarter. Current quarter adjusted earnings per diluted share of $1.52 also includes an unfavorable impact of the lower average price of copper of $0.04 per diluted share.
Operating income in the quarter of $92.4 million was adversely impacted by the slowdown in our Canadian markets and delays in previously awarded projects in both our Wire and Cable and Enterprise Cabling and Security Solutions segments. Partially offsetting the challenging demand environment was an improvement in gross margin. Adjusted operating income in the year ago quarter was $95.7 million. Operating margin of 5.9 percent increased from 5.4 percent in the previous quarter, including sequential improvement in all segments. Versus the prior year, operating margin was flat on an adjusted basis. Adjusted net income from continuing operations of $50.4 million compares to adjusted net income of $48.0 million in the year ago quarter.