Previous Statements by AXE
» Anixter International Q1 2010 Earnings Call Transcript
» Anixter International Inc. Q4 2009 Earnings Call Transcript
» Anixter International Inc. Q3 2009 Earnings Call Transcript
These uncertainties may cause our actual results to be materially different from those expressed in any forward-looking statements. We do not undertake to update any forward-looking statements. Please see the Company's SEC filings for more information.At this point, I'll turn the call over to Dennis. Dennis Letham Thank you, Chris. Good morning and thank you for joining us. Before going into the current quarter's results, let me start by highlighting our expectations for the second quarter as we discussed on our call three months ago. For those of who were with us on the last earnings call, you will recall we described the start to the first quarter of 2010 where daily sales continued their nearly nine month pattern of being virtually flat. As discussed that trend changed in March with a noticeable improvement in daily sales rates that continued through early April as we released our first quarter results. Those positive trends then became more broad-based across the various end markets and geographies in which we operate. Daily sales rates continue to rise through the first two months of the second quarter before leveling off, but not progressing in June. Now three weeks into the third quarter, these higher sales levels that we're experienced in June up continued into the early part of the third quarter. As a result, we are on track with our previously discussed expectations at this stage of the recovery. As a reminder, our backlog equals approximately four weeks of sales and a high percentage of our orders continue to ship within 24 to 48 hours of receipt. So while the trends over the last four to five months have been positive, some uncertainty in the macro economic environment remains, and there is no guarantee that this positive trends will continue for the remainder of 2010. Furthermore, we believe that a more significant improvement in financial results will require extended positive trends in the expansion of those macro economic trends to more fully include Europe. Before turning to the details of the drivers of our second quarter operating performance, let me note that the net sales were at the highest level in seven quarters, and operating earnings were at the highest level in eight quarters.
We realize however that we're only part of the way back to the operating levels of both revenue and earnings that were achieved prior to the recent recession. Nonetheless the strong operating leverage that we delivered in the second quarter combined with another quarter of strong cash flow performance is a significant positive first step towards the previous record levels of financial performance.Let's begin with a more detailed discussion of our second quarter sales results. Consistent with our expectations sales were up 8% sequentially and up 12% year-on-year on an organic basis. The sequential improvement was evident in all three end markets and each geographic segments despite one less billing day in the second quarter compared to the first quarter. We believe this is indicative of our company been well positioned to not only benefit from improving macroeconomic factors but to also grow our share in each end market worldwide. In the second quarter we reported a 12% increase in year-on-year sales. After adjusting for 12.9 million of favorable foreign exchange FX, an estimated $19.6 million of favorable copper prices, and 33 million of unfavorable FX resulting from our decision to exit the Alcatel-Lucent contract, in late 2009, organic sales would have still grown by 12%, non surprisingly with the European OEM supply business down the greatest percentage last year. It was the portion of our business with the highest year-on-year growth in this quarter. Read the rest of this transcript for free on seekingalpha.com