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Anixter International Inc. Reports Fourth Quarter 2013 Results

Anixter International Inc. (NYSE: AXE):

Fourth Quarter Highlights

  • Organic revenue growth of 4.7%
  • Operating income of $95.6 million, up 12% on an adjusted basis
  • Full-year cash flow from operations up 134% to $335 million
  • Special dividend of $5.00 per common share paid in the 4th quarter

Anixter International Inc. (NYSE: AXE) today reported sales of $1.60 billion for the quarter ended January 3, 2014, a 3.5 percent increase compared to the year-ago quarter. Organic sales, which excludes the impact of the following two items, increased by 4.7 percent year-over-year:

  • $9.9 million from the unfavorable effect of copper pricing
  • $8.7 million from the unfavorable effect of foreign exchange

Operating income in the current quarter of $95.6 million increased by 148 percent compared to year-ago results which included pre-tax charges of $46.7 million, attributable to the impairment of goodwill and long-lived assets, pension-related adjustments and restructuring charges. On an adjusted basis, operating income increased by 12.1 percent, driven by the strong performance of our OEM Supply segment and improved gross margins in all three segments. Operating margin of 6.0 percent increased by 10 basis points sequentially and increased by 50 basis points year-over-year, on an adjusted basis.

Net income from continuing operations of $58.2 million compares to $5.2 million in the year-ago quarter. The current quarter tax expense was favorably impacted by $4.8 million due to the decline in our effective tax rate driven by a change in the country mix of earnings. The adjusted net income for the current quarter of $53.4 million compares to the adjusted net income for the prior year quarter of $42.8 million, an increase of 24.8 percent. All year-over-year comparisons reflected in the following comparisons are presented on an adjusted basis. Reconciliations are provided in the supplemental information at the end of this release.

“While we experienced gradually improving market trends in all of our segments and geographies, we were especially pleased to achieve significant sales and profit growth in our OEM Supply segment, reflecting the results of actions we have taken to reposition the business for profitable growth. The performance in this segment fueled double-digit sales increases and strong growth in profits in our European geography,” commented Bob Eck, President and CEO. “Overall, we are encouraged by the improving performance within each of our segments across our global markets, reflecting the value of our global capabilities to an increasing number of global customers.”

Income Statement Detail

Gross margin of 23.2 percent for the fourth quarter of 2013 compares to 22.9 percent in the third quarter 2013 and 22.2 percent in the year-ago quarter, driven by improvement in all segments. Gross profit dollars increased by 9.4 percent on an organic basis, which excludes the impact of foreign exchange and copper pricing, compared to the 4.7 percent organic sales increase.

Operating expenses of $275.8 million for the fourth quarter of 2013 increased by 7.1 percent versus the prior year quarter on an adjusted basis, with the increase primarily caused by an additional week in this year's fourth quarter combined with higher employee incentives and benefit costs. Interest expense of $11.2 million decreased by $5.0 million compared to the prior year quarter due to the redemption of the convertible notes in the first quarter of 2013. Foreign exchange and other expenses of $3.8 million increased $2.0 million from the prior year quarter primarily reflecting the negative impact of a strengthening U.S. dollar in multiple foreign markets. Our adjusted annual effective tax rate of 33.7 percent declined from 36.5 percent in the year-ago period, primarily due to a change in the country mix of earnings.

Segment Update

Enterprise Cabling and Security Solutions (“ECS”) sales of $811.3 million compare to $800.0 million in the prior year period. The 1.4 percent increase was driven by improvements in our Emerging Markets geographies, reflecting the timing of projects and the strengthening of Latin American markets. We continue to experience a slow recovery in our US markets as many customers continue to be cautious regarding capital investments. Organically, ECS sales increased 1.9 percent.

On a sequential basis, ECS sales increased 0.9 percent from the third quarter of 2013, driven by improvements in our Emerging Markets geographies. Security Solutions sales were flat versus the prior year quarter excluding the impact of the previously disclosed contract that concluded in the fourth quarter of 2012.

ECS operating income of $41.2 million compares to adjusted operating income of $44.3 million in the year ago quarter. The year-over-year decrease was caused by higher operating expenses primarily resulting from the quarter having one additional week. Operating margin for ECS of 5.1 percent compares to adjusted operating margin of 5.5 percent in the year ago quarter. Sequentially, operating margin declined by 20 basis points versus the third quarter.

Electrical and Electronic Wire and Cable (“W&C”) achieved fourth quarter sales of $539.6 million, an 0.8 percent decrease from the prior year period, primarily caused by a drop of approximately 9 percent in the average price of copper. Emerging markets sales increased by 11 percent reflecting project strength in our Asia Pacific geography. Excluding the $9.9 million unfavorable impact from a $0.32 decline in the average price of copper, and the $6.7 million unfavorable impact from foreign exchange, organic sales increased by 2.2 percent. Sequentially, global sales increased by 2.1 percent versus the third quarter of 2013 as industrial project business strengthened as the quarter progressed.

For the full year, Industrial Communications and Control sales of $243 million increased by 20 percent versus 2012, as a result of our strategic growth initiative.

Operating income of $40.9 million compares to adjusted operating income of $43.7 million in the year ago quarter. The year-over-year decrease was caused primarily by geographic mix and the additional week of operating expenses. Operating margin of 7.6 percent compares to 7.9 percent in the third quarter of 2013 and an adjusted operating margin of 8.0 percent in the year ago quarter.

OEM Supply (“OEM”) sales increased by 23.6 percent from the prior year quarter to a fourth quarter record of $247.6 million, reflecting the continued ramp up of a contract in Europe and improvement in North America heavy truck production levels. Excluding the $2.2 million favorable impact from foreign exchange, organic sales increased by 22.5 percent. On a sequential basis, sales increased by 10.2 percent driven primarily by strength in Europe.

Operating income of $13.5 million compares to an adjusted operating loss of $2.7 million in the year ago quarter. Operating margin of 5.5 percent compares to an adjusted operating margin of negative 1.4 percent in the prior year quarter and 3.7 percent in the third quarter of 2013.

Cash Flow and Leverage

In the quarter, the company generated $137.2 million of cash from operations bringing the year-to-date cash flow from operations to $334.5 million. This compares to $142.9 million of cash from operations for the full year 2012 and is a result of our relentless focus on improving working capital efficiency combined with the effects of slower growth in the business.

“We were pleased to declare and pay a $5.00 per share special dividend in the fiscal fourth quarter of 2013, reflecting the strength of our balance sheet, our significant cash flow generation and our steadfast commitment to return value to shareholders,” commented Ted Dosch, Executive Vice President – Finance and CFO. “Our financial position continues to be excellent and we constantly evaluate the optimal use of our funds. We remain committed to investing in our growth initiatives and returning excess capital to our shareholders, as we have done consistently over the past five years.”

Key capital structure and credit-related statistics for the quarter:

  • Debt-to-total capital ratio of 44.9 percent compares to 50.3 percent at the end of 2012
  • Weighted average cost of borrowed capital of 5.4 percent compares to 6.3 percent in the year ago quarter
  • $323.9 million of availability under bank revolving lines of credit at quarter end
  • $145 million of outstanding borrowings under the $300 million accounts receivable securitization facility at quarter end

Business Outlook

“As we enter 2014, we believe we are well-positioned for global growth in all of our segments. In addition to a gradually improving economy, we have strategic initiatives which we believe will enable us to gain market share and exceed market growth across our business. For the year, we expect mid-single digit organic growth, compared to a 0.5 percent decrease in organic sales for 2013.” Eck concluded, “We have taken aggressive measures to align our cost structure with the current economic environment, while continuing to invest in our strategic growth initiatives, including security, emerging markets, industrial communication and control, in-building wireless and e-commerce. As companies continue their relentless focus on managing expenses, our business model, which is based on helping our customers lower their supply chain costs and reduce execution risk across the globe, is of even greater value.”

Financial Results From Continuing Operations
(In millions, except per share amounts)

      Three Months Ended       Twelve Months Ended
Jan 3,
2014
    Dec 28,
2012
   

Percent
Change

      Jan 3,
2014
    Dec 28,
2012
   

Percent
Change

Net Sales $1,598.5 $1,544.4 4% $6,226.5 $6,253.1 -
Operating Income $95.6 $38.6 148% $354.8 $282.5 26%
Net Income $58.2 $5.2 nm $200.4 $124.6 61%
Diluted Earnings Per Share $1.75 $0.16 nm $6.04 $3.69 64%
Diluted Weighted Shares 33.2 33.1 - 33.2 33.8 -2%
 

Fourth Quarter Earnings Call Details

The company will host a conference call to discuss these results beginning at 9:30 a.m. Central Time today. The call will be available as a live audio webcast and can be accessed at the Investor Relations portion of Anixter’s website at anixter.com/investor. Dial-in numbers for the call are as follows:

U.S./Canada toll-free dial-in:       1-888-438-5525
International dial-in: 1-719-325-2458
Passcode: 751 9585
 

A replay of the call will be available at anixter.com/investor for 15 days following the call. Prior to the beginning of the call a supplemental presentation titled “Fourth Quarter 2013 Highlights and Operating Review” will be available on the company’s Investor Relations section of the website.

About Anixter

Anixter International is a leading global distributor of enterprise cabling and security solutions, electrical and electronic wire and cable, and OEM supply fasteners and other small parts. The company adds value to the distribution process by providing its customers access to 1) innovative inventory management programs 2) approximately 450,000 products and $1 billion in inventory 3) approximately 210 warehouses with 7 million square feet of space and 4) locations in over 250 cities in more than 50 countries. Founded in 1957 and headquartered near Chicago, Anixter trades on the New York Stock Exchange under the symbol AXE.

Safe Harbor Statement

The statements in this presentation other than historical facts are forward-looking statements made in reliance upon the safe harbor of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to a number of factors that could cause our actual results to differ materially from what is indicated here. These factors include but are not limited to general economic conditions, the level of customer demand particularly for capital projects in the markets we serve, changes in supplier sales strategies or financial viability, risks associated with the sale of nonconforming products and services, political, economic or currency risks related to foreign operations, inventory obsolescence, copper price fluctuations, customer viability, risks associated with accounts receivable, the impact of regulation and regulatory, investigative and legal proceedings and legal compliance risks and risks associated with integration of acquired companies. These uncertainties may cause our actual results to be materially different than those expressed in any forward looking statements. We do not undertake to update any forward looking statements. Please see our Securities and Exchange Commission (“SEC”) filings for more information.

Non-GAAP Financial Measures

In addition to the results provided in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) above, this report includes certain financial measures computed using non-GAAP components as defined by the Securities and Exchange Commission. Specifically, net sales comparisons to the prior corresponding period, both worldwide and in relevant segments, are discussed in this report both on a GAAP basis and excluding acquisitions, foreign exchange effects and the impact of copper prices (“non-GAAP”). We believe that by reporting organic growth which excludes the impact of acquisitions, foreign exchange effects and the impact of copper prices, both management and investors are provided with meaningful supplemental sales information to understand and analyze our underlying trends and other aspects of our financial performance. From time to time, we may also exclude other items from reported financial results (e.g., impairment charges, inventory adjustments, restructuring charges, tax items, etc.) so that both management and financial statement users can use these non-GAAP financial measures to better understand and evaluate our performance period over period and to analyze the underlying trends of our business.

Non-GAAP financial measures provide insight into selected financial information and should be evaluated in the context in which they are presented. These non-GAAP financial measures have limitations as analytical tools, and should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP. Non-GAAP financial measures, as reported by us, may not be comparable to similarly titled amounts reported by other companies. The non-GAAP financial measures should be considered in conjunction with the Condensed Consolidated Financial Statements and Management’s analysis of financial condition and results of operations included in this report. Management does not use these non-GAAP financial measures for any purpose other than the reasons stated above.

Additional information about Anixter is available at anixter.com

           
 
ANIXTER INTERNATIONAL INC.
Condensed Consolidated Statements of Operations (Unaudited)
 
 
Three Months Ended Twelve Months Ended
January 3, December 28, January 3, December 28,
(In millions, except per share amounts) 2014 2012 2014 2012
 
Net sales $ 1,598.5 $ 1,544.4 $ 6,226.5 $ 6,253.1
Cost of goods sold   1,227.1     1,201.5     4,803.8     4,844.4  
Gross profit 371.4 342.9 1,422.7 1,408.7
Operating expenses 274.1 283.0 1,066.2 1,077.7
Impairment of goodwill and long-lived assets   1.7     21.3     1.7     48.5  
Operating income 95.6 38.6 354.8 282.5
Interest expense (11.2 ) (16.2 ) (47.4 ) (59.7 )
Other, net   (3.8 )   (1.8 )   (11.4 )   (13.6 )
Income from continuing operations before taxes 80.6 20.6 296.0 209.2
Income tax expense   22.4     15.4     95.6     84.6  
Net income from continuing operations 58.2 5.2 200.4 124.6
Net (loss) income from discontinued operations   (0.1 )   (0.1 )   0.1     0.2  
Net income $ 58.1   $ 5.1   $ 200.5   $ 124.8  
 
Income per share:
Basic:
Continuing operations $ 1.77 $ 0.16 $ 6.11 $ 3.76
Discontinued operations $ -   $ -   $ 0.01   $ 0.01  
Net income $ 1.77   $ 0.16   $ 6.12   $ 3.77  
Diluted:
Continuing operations $ 1.75 $ 0.16 $ 6.04 $ 3.69
Discontinued operations $ -   $ (0.01 ) $ -   $ -  
Net income $ 1.75   $ 0.15   $ 6.04   $ 3.69  
 
Weighted average shares outstanding:
Basic 32.8 32.5 32.8 33.1
Diluted 33.2 33.1 33.2 33.8
 
Reportable Segments
Net sales:
Enterprise Cabling and Security Solutions $ 811.3 $ 800.0 $ 3,174.5 $ 3,236.3
Electrical and Electronic Wire and Cable 539.6 544.1 2,116.6 2,111.2
OEM Supply   247.6     200.3     935.4     905.6  
$ 1,598.5   $ 1,544.4   $ 6,226.5   $ 6,253.1  
Operating income:
Enterprise Cabling and Security Solutions $ 41.2 $ 32.0 $ 160.5 $ 156.7
Electrical and Electronic Wire and Cable 40.9 35.2 161.8 166.5
OEM Supply 13.5 (28.6 ) 32.5 (29.9 )
Corporate   -     -     -     (10.8 )
$ 95.6   $ 38.6   $ 354.8   $ 282.5  
           
 
ANIXTER INTERNATIONAL INC.
Condensed Consolidated Balance Sheets                
 
 
January 3, December 28,
(In millions) 2014 2012
(Unaudited)
Assets
 
Cash and cash equivalents $ 57.3 $ 89.4
Accounts receivable, net 1,182.8 1,225.5
Inventories 959.8 1,060.9
Deferred income taxes 32.8 40.7
Other current assets   43.0   33.6
Total current assets 2,275.7 2,450.1
 
Property and equipment, net 104.0 95.9
Goodwill 342.1 342.0
Other assets   139.0   201.6
Total assets $ 2,860.8 $ 3,089.6
 
Liabilities and Stockholders' Equity
 
Accounts payable $ 691.9 $ 716.9
Accrued expenses 210.5 249.5
Short-term debt   -   0.9
Total current liabilities 902.4 967.3
 
5.625% senior notes 350.0 350.0
5.95% senior notes 200.0 200.0
Accounts receivable securitization facility 145.0 82.0
Revolving lines of credit and other 108.9 20.8
10.0% senior notes 32.1 31.6
1.0% convertible senior notes - 297.8
Other liabilities   95.0   170.2
Total liabilities 1,833.4 2,119.7
 
Stockholders' equity   1,027.4   969.9
$ 2,860.8 $ 3,089.6
 
 
ANIXTER INTERNATIONAL INC.
Condensed Consolidated Statements of Cash Flows (Unaudited)
       
 
Twelve Months Ended
(In millions) January 3, December 28,
2014 2012
 
Operating activities
Net income $ 200.5 $ 124.8
 
Adjustments to reconcile net income to net cash provided by
continuing operating activities:
Depreciation 22.1 22.5
Deferred income taxes 22.3 (9.4 )
Stock-based compensation 13.6 14.6
Amortization of intangible assets 8.0 10.0
Accretion of debt discount 2.8 17.9
Amortization of deferred financing costs 2.6 3.1
Pension plan contributions (including settlements) (15.3 ) (57.4 )
Pension plan expenses 16.7 41.0
Excess income tax benefit from employee stock plans (1.6 ) (3.1 )
Impairment of goodwill and long-lived assets 1.7 48.5
Changes in current assets and liabilities:
Accounts receivable 36.9 (23.4 )
Inventories 96.9 42.9
Accounts payable (19.9 ) (4.5 )
Other current assets and liabilities, net (53.5 ) (86.3 )
Other, net   0.7     1.7  
Net cash provided by operating activities 334.5 142.9
 
Investing activities
Capital expenditures, net (32.2 ) (34.2 )
Acquisition of business, net of cash acquired   -     (55.3 )
Net cash used in investing activities (32.2 ) (89.5 )
 
Financing activities
Proceeds from borrowings 593.7 615.5
Repayment of borrowings (441.4 ) (824.8 )
Retirement of Notes due 2013 (300.0 ) -
Payment of special cash dividend (165.7 ) (151.4 )
Payments for repurchase of warrants (19.2 ) -
Proceeds from stock options exercised 8.1 3.4
Excess income tax benefit from employee stock plans 1.6 3.1
Proceeds from issuance of Notes due 2019 - 350.0
Purchases of common stock for treasury - (59.2 )
Deferred financing costs (1.2 ) (7.6 )
Other   -     2.2  
Net cash used in continuing financing activities   (324.1 )   (68.8 )
 
Decrease in cash and cash equivalents from
continuing operations (21.8 ) (15.4 )
 
Effect of exchange rate changes on cash balances (10.3 ) (1.3 )
 
Cash and cash equivalents at beginning of period   89.4     106.1  
Cash and cash equivalents at end of period $ 57.3   $ 89.4  
 
 
ANIXTER INTERNATIONAL INC.
Financial Measures That Supplement GAAP (Unaudited)
                                   
Fourth Quarter 2013 Sales Growth Trends
        Adjustments for:        

Fourth
Quarter 2013
(as reported)

Acquisition
Impact

 

Foreign
Exchange
Impact

 

Copper
Impact

Fourth
Quarter 2013
(as adjusted)

Fourth
Quarter 2012

Organic
Growth

(in millions)
Enterprise Cabling and Security Solutions
North America $ 577.5 $ - $ 3.8 $ - $ 581.3 $ 577.8 0.6 %
Europe 86.0 - (2.2 ) - 83.8 85.5 -1.9 %
Emerging Markets   147.8   -     2.6     -   150.4   136.7 10.0 %
Enterprise Cabling and Security Solutions $ 811.3 $ -   $ 4.2   $ - $ 815.5 $ 800.0 1.9 %
 
Electrical and Electronic Wire and Cable
North America $ 394.8 $ - $ 6.4 $ 8.6 $ 409.8 $ 408.4 0.4 %
Europe 74.5 - (1.0 ) 0.9 74.4 72.5 2.5 %
Emerging Markets   70.3   -     1.3     0.4   72.0   63.2 13.7 %
Electrical and Electronic Wire and Cable $ 539.6 $ -   $ 6.7   $ 9.9 $ 556.2 $ 544.1 2.2 %
 
OEM Supply
North America $ 94.0 $ - $ 0.1 $ - $ 94.1 $ 87.4 7.7 %
Europe 133.9 - (2.3 ) - 131.6 100.0 31.5 %
Emerging Markets   19.7   -     -     -   19.7   12.9 52.5 %
OEM Supply $ 247.6 $ -   $ (2.2 ) $ - $ 245.4 $ 200.3 22.5 %
 
Total Anixter International $ 1,598.5 $ -   $ 8.7   $ 9.9 $ 1,617.1 $ 1,544.4 4.7 %
 
Geographic Sales
North America $ 1,066.3 $ - $ 10.3 $ 8.6 $ 1,085.2 $ 1,073.6 1.1 %
Europe 294.4 - (5.5 ) 0.9 289.8 258.0 12.3 %
Emerging Markets   237.8   -     3.9     0.4   242.1   212.8 13.7 %
Total Anixter International $ 1,598.5 $ -   $ 8.7   $ 9.9 $ 1,617.1 $ 1,544.4 4.7 %
                                   
                                   
Year to Date 2013 Sales Growth Trends
Adjustments for:

Year to Date
2013 (as
reported)

Acquisition
Impact

Foreign
Exchange
Impact

Copper
Impact

Year to Date
2013 (as
adjusted)

Year to Date
2012

Organic
Growth

(in millions)
Enterprise Cabling and Security Solutions
North America $ 2,338.3 $ - $ 8.4 $ - $ 2,346.7 $ 2,356.8 -0.4 %
Europe 320.8 - (3.7 ) - 317.1 338.5 -6.3 %
Emerging Markets   515.4   -     3.9     -   519.3   541.0 -4.0 %
Enterprise Cabling and Security Solutions $ 3,174.5 $ -   $ 8.6   $ - $ 3,183.1 $ 3,236.3 -1.6 %
 
Electrical and Electronic Wire and Cable
North America $ 1,564.4 $ - $ 13.9 $ 30.2 $ 1,608.5 $ 1,636.4 -1.7 %
Europe 302.4 - 2.0 2.6 307.0 294.8 4.2 %
Emerging Markets   249.8   (60.7 )   1.6     0.9   191.6   180.0 6.4 %
Electrical and Electronic Wire and Cable $ 2,116.6 $ (60.7 ) $ 17.5   $ 33.7 $ 2,107.1 $ 2,111.2 -0.2 %
 
OEM Supply
North America $ 389.4 $ - $ 0.2 $ - $ 389.6 $ 405.9 -4.0 %
Europe 474.1 - (0.7 ) - 473.4 438.6 7.9 %
Emerging Markets   71.9   -     (2.1 )   -   69.8   61.1 14.3 %
OEM Supply $ 935.4 $ -   $ (2.6 ) $ - $ 932.8 $ 905.6 3.0 %
 
Total Anixter International $ 6,226.5 $ (60.7 ) $ 23.5   $ 33.7 $ 6,223.0 $ 6,253.1 -0.5 %
 
Geographic Sales
North America $ 4,292.1 $ - $ 22.5 $ 30.2 $ 4,344.8 $ 4,399.1 -1.2 %
Europe 1,097.3 - (2.4 ) 2.6 1,097.5 1,071.9 2.4 %
Emerging Markets   837.1   (60.7 )   3.4     0.9   780.7   782.1 -0.2 %
Total Anixter International $ 6,226.5 $ (60.7 ) $ 23.5   $ 33.7 $ 6,223.0 $ 6,253.1 -0.5 %
             
 
ANIXTER INTERNATIONAL INC.
Financial Measures That Supplement GAAP (Unaudited) continued
 
(In millions, except per share amounts)
Positive (Negative) impact
Three Months Ended Twelve Months Ended
January 3, December 28, January 3, December 28,
2014 2012 2014 2012
Items impacting comparability of results:
Items impacting operating income:
Impairment of goodwill and long-lived assets $ - $ (21.3 ) $ - $ (48.5 )
Inventory lower of cost or market adjustment - - - (1.2 )
Pension Adjustment - (15.3 ) - (15.3 )
Restructuring Charge   -   (10.1 )   -     (10.1 )
Total of items impacting operating income $ - $ (46.7 ) $ - $ (75.1 )
Items impacting other expenses:
Penalty and interest from prior year tax liabilities   -   -     0.7     (1.7 )
Total of items impacting other expenses $ - $ -   $ 0.7   $ (1.7 )
Total of items impacting pre-tax income $ - $ (46.7 ) $ 0.7 $ (76.8 )
Items impacting income taxes:
Impact of change in forecast on effective tax rate 4.8 0.7 - -
Tax impact of items impacting pre-tax income above - 8.4 (0.2 ) 10.0
Reversal of deferred income tax valuation allowances/other - - - 9.7
Tax effect related to closing prior tax years   -   -     4.2     -  
Total of items impacting income taxes $ 4.8 $ 9.1   $ 4.0   $ 19.7  
Net income impact of these items $ 4.8 $ (37.6 ) $ 4.7   $ (57.1 )
Diluted EPS impact of these items $ 0.14 $ (1.14 ) $ 0.14   $ (1.73 )
 
GAAP to Non-GAAP Net Income and EPS Reconciliation:
Reconciliation to most directly comparable GAAP financial measure:
Net income from continuing operations – Non-GAAP $ 53.4 $ 42.8 $ 195.7 $ 181.7
Items impacting net income from continuing operations $ 4.8 $ (37.6 ) $ 4.7   $ (57.1 )
Net income from continuing operations - GAAP $ 58.2 $ 5.2   $ 200.4   $ 124.6  
 
Diluted EPS – Non-GAAP $ 1.61 $ 1.30 $ 5.90 $ 5.42
Diluted EPS impact of these items $ 0.14 $ (1.14 ) $ 0.14   $ (1.73 )
Diluted EPS – GAAP $ 1.75 $ 0.16   $ 6.04   $ 3.69  
                                     
 
Items impacting comparability of 2012 Operating Income by Segment (1)
        ECS     W&C     OEM Supply     Total
Items impacting operating income for three months ended December 28, 2012:
 
Operating income - Non-GAAP $ 44.3 $ 43.7 $ (2.7 ) $ 85.3
Operating margin - Non-GAAP 5.5 % 8.0 % -1.4 % 5.5 %
 
Impairment of goodwill and long-lived assets $ - $ - $ (21.3 ) $ (21.3 )
Pension adjustment $ (8.2 ) $ (5.7 ) $ (1.4 ) $ (15.3 )
Restructuring charge $ (4.1 ) $ (2.8 ) $ (3.2 ) $ (10.1 )
Total of items impacting operating income for the three
months ended December 28, 2012 $ (12.3 ) $ (8.5 ) $ (25.9 ) $ (46.7 )
 
Operating income - GAAP $ 32.0 $ 35.2 $ (28.6 ) $ 38.6
Operating margin - GAAP 4.0 % 6.5 % -14.3 % 2.5 %
 
(1) No items significantly impacting the comparability of operating income in 2013.
           
YTD 2013 and 2012 Effective Tax Rate - GAAP and Non-GAAP      
          Three Months Ended Twelve Months Ended
January 3,   December 28, January 3, December 28,
2014 2012 2014 2012
Income from continuing operations before taxes - GAAP $ 80.6 $ 20.6 $ 296.0 $ 209.2
Income tax expense $ 22.4 $ 15.4 $ 95.6 $ 84.6
Income tax rate 27.8 % 75.0 % 32.3 % 40.5 %
 
Total of items impacting pre-tax income above $ - $ (46.7 ) $ 0.7 $ (76.8 )
Total of items impacting income taxes above $ 4.8 $ 9.1 $ 4.0 $ 19.7
 
Income from continuing operations before taxes - Non-GAAP $ 80.6 $ 67.3 $ 295.3 $ 286.0
Income tax expense - Non-GAAP $ 27.2 $ 24.5 $ 99.6 $ 104.3
Annual effective income tax rate             33.7 %     36.5 %       33.7 %     36.5 %

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In 2014, Amazon announced a new form of compute called Lambda. We didn't know it at the time, but this represented a fundamental shift in what we expect from cloud computing. Now, all of the major cloud computing vendors want to take part in this disruptive technology. In his session at 20th Cloud Expo, John Jelinek IV, a web developer at Linux Academy, will discuss why major players like AWS, Microsoft Azure, IBM Bluemix, and Google Cloud Platform are all trying to sidestep VMs and containers...
Web Real-Time Communication APIs have quickly revolutionized what browsers are capable of. In addition to video and audio streams, we can now bi-directionally send arbitrary data over WebRTC's PeerConnection Data Channels. With the advent of Progressive Web Apps and new hardware APIs such as WebBluetooh and WebUSB, we can finally enable users to stitch together the Internet of Things directly from their browsers while communicating privately and securely in a decentralized way.
IoT is at the core or many Digital Transformation initiatives with the goal of re-inventing a company's business model. We all agree that collecting relevant IoT data will result in massive amounts of data needing to be stored. However, with the rapid development of IoT devices and ongoing business model transformation, we are not able to predict the volume and growth of IoT data. And with the lack of IoT history, traditional methods of IT and infrastructure planning based on the past do not app...
All organizations that did not originate this moment have a pre-existing culture as well as legacy technology and processes that can be more or less amenable to DevOps implementation. That organizational culture is influenced by the personalities and management styles of Executive Management, the wider culture in which the organization is situated, and the personalities of key team members at all levels of the organization. This culture and entrenched interests usually throw a wrench in the work...
In his session at DevOps Summit, Tapabrata Pal, Director of Enterprise Architecture at Capital One, will tell a story about how Capital One has embraced Agile and DevOps Security practices across the Enterprise – driven by Enterprise Architecture; bringing in Development, Operations and Information Security organizations together. Capital Ones DevOpsSec practice is based upon three "pillars" – Shift-Left, Automate Everything, Dashboard Everything. Within about three years, from 100% waterfall, C...
Fifty billion connected devices and still no winning protocols standards. HTTP, WebSockets, MQTT, and CoAP seem to be leading in the IoT protocol race at the moment but many more protocols are getting introduced on a regular basis. Each protocol has its pros and cons depending on the nature of the communications. Does there really need to be only one protocol to rule them all? Of course not. In his session at @ThingsExpo, Chris Matthieu, co-founder and CTO of Octoblu, walked through how Octob...
The Internet of Things can drive efficiency for airlines and airports. In their session at @ThingsExpo, Shyam Varan Nath, Principal Architect with GE, and Sudip Majumder, senior director of development at Oracle, discussed the technical details of the connected airline baggage and related social media solutions. These IoT applications will enhance travelers' journey experience and drive efficiency for the airlines and the airports.
"We're bringing out a new application monitoring system to the DevOps space. It manages large enterprise applications that are distributed throughout a node in many enterprises and we manage them as one collective," explained Kevin Barnes, President of eCube Systems, in this SYS-CON.tv interview at DevOps at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
Containers have changed the mind of IT in DevOps. They enable developers to work with dev, test, stage and production environments identically. Containers provide the right abstraction for microservices and many cloud platforms have integrated them into deployment pipelines. DevOps and containers together help companies achieve their business goals faster and more effectively. In his session at DevOps Summit, Ruslan Synytsky, CEO and Co-founder of Jelastic, reviewed the current landscape of Dev...
SYS-CON Events announced today that Catchpoint, a leading digital experience intelligence company, has been named “Silver Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Catchpoint Systems is a leading Digital Performance Analytics company that provides unparalleled insight into your customer-critical services to help you consistently deliver an amazing customer experience. Designed for digital business, C...
With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo 2016 in New York. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be! Internet of @ThingsExpo, taking place June 6-8, 2017, at the Javits Center in New York City, New York, is co-located with 20th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry p...
@DevOpsSummit at Cloud taking place June 6-8, 2017, at Javits Center, New York City, is co-located with the 20th International Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long developm...
"We formed Formation several years ago to really address the need for bring complete modernization and software-defined storage to the more classic private cloud marketplace," stated Mark Lewis, Chairman and CEO of Formation Data Systems, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
Updating DevOps to the latest production data slows down your development cycle. Probably it is due to slow, inefficient conventional storage and associated copy data management practices. In his session at @DevOpsSummit at 20th Cloud Expo, Dhiraj Sehgal, in Product and Solution at Tintri, will talk about DevOps and cloud-focused storage to update hundreds of child VMs (different flavors) with updates from a master VM in minutes, saving hours or even days in each development cycle. He will also...