SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

   X        QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)15(d) OF THE
   ----
                         SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended September 28, 2001March 29, 2002

                                       OR

            TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

              For the transition period from _______ to _______

                         COMMISSION FILE NUMBER:from__________ to__________

                         Commission File Number: 1-5989

                           ANIXTER INTERNATIONAL INC.
             (Exact name of registrant as specified in its charter)

             DELAWAREDelaware                                      94-1658138
  (State or other jurisdiction of                      (I.R.S. Employer
   Identification No.)
 incorporation or organization)                      Identification No.)


                                 4711 GOLF ROAD
                             SKOKIE, ILLINOISGolf Road
                             Skokie, Illinois 60076
                                 (847) 677-2600
          (Address and telephone number of principal executive offices)


     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
    ----

    At November  2, 2001,  36,852,062May 6, 2002, 37,284,238 shares of the registrant's Common Stock, $1.00
par value,  were outstanding.







                                TABLE OF CONTENTS



                          PART I. FINANCIAL INFORMATION

Item 1.    Financial Statements                                     1Statements................................................1

Item 2.    Management's Discussion and Analysis of Financial Condition
             and Results of Operations                 9Operations.........................................8

Item 3.    Quantitative and Qualitative Disclosures About Market Risk..........*

                           PART II. OTHER INFORMATION

Item 1.    Legal Proceedings                                        Proceedings...................................................*

Item 2.    Changes in Securities                                    Securities...............................................*

Item 3.    Defaults Upon Senior Securities                          Securities.....................................*

Item 4.    Submission of Matters to a Vote of Security Holders      Holders.................*

Item 5.    Other Information                                        Information...................................................*

Item 6.    Exhibits and Reports on Form 8-K                        158-K...................................12
___________________
* No reportable information under this item.


THIS REPORT MAY CONTAIN VARIOUS "FORWARD-LOOKING STATEMENTS" WITHIN THE
         MEANING OF SECTIONThis report may contain various "forward-looking  statements" within the meaning
of Section 27A OF THE SECURITIES  ACT OFof the Securities Act of 1933, AS AMENDED,  AND
         SECTIONas amended, and Section 21E OF THE SECURITIES  EXCHANGE ACT OFof the
Securities Exchange Act of 1934, AS AMENDED,  WHICH
         CAN BE IDENTIFIED  BY THE USE OF  FORWARD-LOOKING  TERMINOLOGY  SUCH AS
         "BELIEVES"as amended,  which can be identified by the use
of  forward-looking  terminology  such as  "believes",  "EXPECTS""expects",  "PROSPECTS""prospects",
"ESTIMATED""estimated", "SHOULD""should", "MAY" OR THE
         NEGATIVE THEREOF OR OTHER VARIATIONS THEREON OR COMPARABLE  TERMINOLOGY
         INDICATING  THE COMPANY'S  EXPECTATIONS  OR BELIEFS  CONCERNING  FUTURE
         EVENTS.  THE COMPANY  CAUTIONS  THAT SUCH  STATEMENTS  ARE QUALIFIED BY
         IMPORTANT  FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY
         FROM  THOSE IN THE  FORWARD-LOOKING  STATEMENTS,  A NUMBER OF WHICH ARE
         IDENTIFIED  IN THIS  REPORT.  OTHER  FACTORS  COULD ALSO  CAUSE  ACTUAL
         RESULTS TO DIFFER  MATERIALLY FROM EXPECTED  RESULTS  INCLUDED IN THESE
         STATEMENTS.   THESE  FACTORS  INCLUDE  GENERAL   ECONOMIC   CONDITIONS,
         TECHNOLOGY  CHANGES,  CHANGES IN SUPPLIER  OR  CUSTOMER  RELATIONSHIPS,
         EXCHANGE RATE FLUCTUATIONS AND NEW OR CHANGED COMPETITORS."may" or the negative thereof or other variations thereon
or  comparable  terminology  indicating  the Company's  expectations  or beliefs
concerning  future  events.  The  Company  cautions  that  such  statements  are
qualified  by  important  factors  that  could  cause  actual  results to differ
materially from those in the forward-looking  statements,  a number of which are
identified  in this report.  Other  factors  could also cause actual  results to
differ  materially from expected  results  included in these  statements.  These
factors include general  economic  conditions,  technology  changes,  changes in
supplier  or  customer  relationships,  exchange  rate  fluctuations  and new or
changed competitors.



                       PART I. FINANCIAL INFORMATION

Item 1.  Financial Statements

                           ANIXTER INTERNATIONAL INC.
                      CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)



(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
FOR THE 13 WEEKS ENDED FOR THE 39 WEEKS ENDED --------------------------------- ------------------------------ SEPTEMBER 28, SEPTEMBER 29, SEPTEMBER 28, SEPTEMBER 29, 2001 2000 2001 2000 ------------- ------------- ------------- ------------- NET SALES $ 761.5 $ 971.8 $ 2,481.6 $ 2,651.5 Cost of goods sold 590.8 754.1 1,898.4 2,038.1 ------------- ------------- ------------- ------------- Gross profit 170.7 217.7 583.2 613.4 Operating expenses 146.8 161.7 461.9 465.8 Amortization of goodwill 2.2 2.1 6.7 6.2 Restructuring costs 31.7 - 31.7 - ------------- ------------- ------------- ------------- OPERATING INCOME (LOSS) (10.0) 53.9 82.9 141.4 Interest expense (6.5) (12.5) (24.7) (33.9) Other, net (3.2) (0.5) (11.4) 0.3 ------------- ------------- ------------- ------------- Income (loss) before income taxes and extraordinary loss (19.7) 40.9 46.8 107.8 Income tax expense (benefit) (8.0) 16.9 18.9 45.0 ------------- ------------- ------------- ------------- Income (loss) before extraordinary loss (11.7) 24.0 27.9 62.8 Extraordinary loss on early extinguishment of debt (net of income tax benefit of $.1 and $.7, respectively) (0.2) - (1.0) - ------------- ------------- ------------- ------------- NET INCOME (LOSS) $ (11.9) $ 24.0 $ 26.9 $ 62.8 ============= ============= ============= ============= BASIC INCOME (LOSS) PER SHARE: Income (loss) before extraordinary loss $ (0.32) $ 0.65 $ 0.76 $ 1.73 Extraordinary loss (0.01) - (0.03) - Net income (loss) $ (0.33) $ 0.65 $ 0.74 $ 1.73 DILUTED INCOME (LOSS) PER SHARE: Income (loss) before extraordinary loss $ (0.32) $ 0.59 $ 0.74 $ 1.63 Extraordinary loss (0.01) - (0.03) - Net income (loss) $ (0.33) $ 0.59 $ 0.71 $ 1.63
(In millions, except per share amounts) 13 Weeks Ended ------------------------- March 29, March 30, 2002 2001 ---------- ---------- Net sales $ 614.7 $ 880.3 Cost of goods sold 472.9 668.3 ---------- ---------- Gross profit 141.8 212.0 Operating expenses 121.3 160.1 Goodwill amortization - 2.2 ---------- ---------- Operating income 20.5 49.7 Interest expense (4.7) (9.3) Other, net - (4.8) ---------- ---------- Income before income taxes and extraordinary loss 15.8 35.6 Income tax expense 6.3 14.7 ---------- ---------- Income before extraordinary loss 9.5 20.9 Extraordinary loss on early extinguishment of debt(net of income tax benefit of $0.4) (0.6) - ---------- ---------- Net income $ 8.9 $ 20.9 ========== ========== Basic income (loss) per share: Income before extraordinary loss $ 0.26 $ 0.57 Extraordinary loss (0.02) - ---------- ---------- Net income $ 0.24 $ 0.57 ========== ========== Diluted income (loss) per share: Income before extraordinary loss $ 0.25 $ 0.53 Extraordinary loss (0.02) - ---------- ---------- Net income $ 0.23 $ 0.53 ========== ========== See accompanying notes to the condensed consolidated financial statements. ANIXTER INTERNATIONAL INC. CONDENSED CONSOLIDATED BALANCE SHEETS
(IN MILLIONS) SEPTEMBER(In millions) March 29, December 28, DECEMBER 29, ASSETS 2002 2001 2000 ------------- ------------ (UNAUDITED) CURRENT ASSETS------------ (Unaudited) Current assets Cash $ 6.647.7 $ 20.827.2 Accounts receivable (less allowances of $19.4$16.5 and $14.8$20.9 in 2002 and 2001, and 2000, respectively) 243.2 293.3173.9 154.1 Note receivable - unconsolidated subsidiary 112.6 126.1100.8 111.4 Inventories 568.8 738.4 Inventories returnable to vendor, net - 120.0461.6 495.7 Deferred income taxes 26.1 25.532.0 32.0 Other current assets 11.0 10.3 -------------12.0 8.6 ------------ ------------ Total current assets 968.3 1,334.4828.0 829.0 Property and equipment, at cost 173.9 167.1165.4 167.4 Accumulated depreciation (115.6) (110.6) -------------(114.5) (112.4) ------------ ------------ Property and equipment, net 58.3 56.550.9 55.0 Goodwill (less accumulated amortization of $93.4$95.5 and $86.8$95.4 in 2002 and 2001, and 2000, respectively) 234.0 239.3232.4 231.6 Other assets 75.7 55.8 -------------79.7 83.2 ------------ ------------ $ 1,336.31,191.0 $ 1,686.0 =============1,198.8 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIESCurrent liabilities Accounts payable $ 316.4264.1 $ 499.1251.0 Accrued expenses 92.6 139.673.4 86.2 Accrued restructuring costs 17.2 -8.9 11.1 Income taxes payable 5.0 8.1 -------------2.0 4.4 ------------ ------------ Total current liabilities 431.2 646.8348.4 352.7 Long-term debt 304.0 451.9222.4 241.1 Other liabilities 46.8 32.4 -------------42.7 41.9 ------------ ------------ Total liabilities 782.0 1,131.1 STOCKHOLDERS' EQUITY613.5 635.7 Stockholders' equity Common stock 36.8 37.7--- $1.00 par value, 100,000,000 shares authorized, 37,050,939 and 36,917,313 shares issued and outstanding in 2002 and 2001, respectively 37.1 36.9 Capital surplus 24.3 46.935.5 32.5 Accumulated other comprehensive income (56.6) (52.6)(57.2) (59.5) Retained earnings 549.8 522.9 -------------562.1 553.2 ------------ ------------ Total stockholders' equity 554.3 554.9 -------------577.5 563.1 ------------ Total liabilities and stockholders' equity------------ $ 1,336.31,191.0 $ 1,686.0 =============1,198.8 ============ ============
See accompanying notes to the condensed consolidated financial statements. ANIXTER INTERNATIONAL INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In millions) FOR THE 39 WEEKS ENDED -------------------------------------- SEPTEMBER 28, SEPTEMBER13 Weeks Ended -------------------------- March 29, March 30, 2002 2001 2000 ------------- ------------- Operating activities---------- ---------- Operating activities Net income $ 26.98.9 $ 62.820.9 Adjustments to reconcile net income to net cash provided by (used in) continuing operating activities: Extraordinary loss 1.00.6 - Non-cash restructuring costs 6.6 - LossGain on disposalsale of fixed assets 0.3(1.2) - Depreciation and amortization 23.2 20.35.9 8.1 Accretion of zero-coupon convertible notes 11.0 -3.8 3.6 Deferred income taxes - (0.4) (2.0) Changes in current assets and liabilities, net 100.9 (307.8)25.5 57.0 Restructuring costs 23.3(3.1) - Other, net 4.7 0.6 ------------- -------------2.1 0.1 ---------- ---------- Net cash provided by (used in) continuing operating activities 197.5 (226.1) INVESTING ACTIVITIES42.5 89.3 Investing activities Capital expenditures (19.5) (13.2) Acquisitions and divestitures - (3.7) ------------- -------------(1.5) (8.6) ---------- ---------- Net cash used in continuing investing activities (19.5) (16.9) FINANCING ACTIVITIES(1.5) (8.6) Financing activities Proceeds from long-term borrowings 743.5 1,155.943.6 346.1 Repayment of long-term borrowings (868.6) (903.0) Repayment(43.6) (398.8) Retirement of notes payable (33.6)(22.9) - Proceeds from issuance of common stock 20.3 30.82.2 3.2 Purchases of common stock for treasury - (46.9) (15.4) Debt issuance costs (0.1) (6.4) Other, net (2.2) (6.2) ------------- -------------(0.1) (0.1) ---------- ---------- Net cash (used in) provided byused in continuing financing activities (187.6) 255.7 ------------- ------------- (DECREASE) INCREASE IN CASH FROM CONTINUING OPERATIONS (9.6) 12.7 Cash used(20.8) (96.5) ---------- ---------- Increase (decrease) in cash from continuing operations 20.2 (15.8) Net cash provided by (used in) discontinued operations (4.6) (11.8)0.3 (2.9) Cash at beginning of period 27.2 20.8 17.5 ------------- ----------------------- ---------- Cash at end of period $ 6.647.7 $ 18.4 ============= =============2.1 ========== ==========
See accompanying notes to the condensed consolidated financial statements. ANIXTER INTERNATIONAL INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTENote 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF CONSOLIDATION AND PRESENTATIONSummary of Significant Accounting Policies Basis of Consolidation and Presentation The accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements included in Anixter International Inc.'s ("the Company") Annual Report on Form 10-K for the year ended December 29, 2000.28, 2001. The condensed consolidated financial information furnished herein reflects all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary for a fair presentation of the condensed consolidated financial statements for the periods shown. The results of operations of any interim period are not necessarily indicative of the results that may be expected for a full fiscal year. Certain amounts for the prior year have been reclassified to conform to the 20012002 presentation. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS In June 2000,Note 2. Goodwill The Company adopted the Financial Accounting Standards Board issuedprovisions of Statement of Financial Accounting Standards ("SFAS") No. 138, "Accounting for Certain Derivative Instruments and Certain Hedging Activities - an amendment of SFAS No. 133." These statements outline the accounting treatment for all derivative activity. The Company adopted these standards in the first quarter of fiscal 2001. The impact of adoption on the consolidated results of operations or financial position was not significant. The Company is exposed to the impact of interest rate changes and fluctuations in foreign currencies, as well as changes in the market value of its financial instruments. The Company periodically uses derivatives, both fair value and cash flow hedges, in order to minimize these risks, but not for trading purposes. The Company does not enter into derivative transactions that are ineffective or expect to recognize significant gains and losses associated with SFAS No. 138. During the second quarter of 2001, the Company incurred $1.7 million in interest expense related to the cancellation of certain of its interest rate hedge agreements for which there were no longer outstanding borrowings. At September 28, 2001, the fair market value of the derivatives were included in "Other assets" on the condensed consolidated balance sheet. In June 2001, the Financial Accounting Standards Board issued SFAS No. 141 "Business Combinations", and No. 142 "Goodwill and Other Intangible Assets", effective for fiscal years beginning after as of December 15,29, 2001. UnderIn accordance with this statement, the new rules,Company no longer amortizes goodwill. In addition, any goodwill or intangible assets acquired in a future purchase will no longernot be amortized, but will be subject toevaluated for impairment. The Company performed the annual impairment tests in accordance with the Statements. Other intangible assets will continue to be amortized over their useful lives. The Company will apply the new rules on accounting for goodwill and other intangible assets beginning intest during the first quarter of 2002. During 2002,This test compared the Company will perform the firstmarket value of the reporting units to the book value using a measurement date of December 29, 2001. The results of this test concluded that the market value exceeds the book value, and therefore, an impairment charge is not required impairment testsat this time. The Company recognized $2.2 million of goodwill asamortization during the 13 weeks ended March 30, 2001. If the provisions of January 1,SFAS No. 142 had been applied to the 13 weeks ended March 30, 2001, net income would have increased $2.2 million and basic and diluted earnings per share would have increased $0.06 and $0.05, respectively. See Note 4 "Income (Loss) per Share" for a reconciliation of reported net income and net income adjusted to exclude goodwill amortization. Note 3. Comprehensive Income Comprehensive income, net of tax, consisted of the following: 13 weeks ended -------------------------- March 29, March 30, (In millions) 2002 and does not anticipate that the2001 --------- --------- Net income $ 8.9 $ 20.9 Cumulative effect of these tests will be significant on the earnings and financial positionadoption of the Company. NOTE 2. ACQUISITION AND DIVESTITURE OF BUSINESSES In the first quarterSFAS No. 133 - 2.7 Change in cumulative translation adjustment 7.4 (8.3) Change in fair market value of 2000, the Company acquired 100% of the stock of allNET Technologies Pty. Limited ("allNET") for $6.7 million. allNET is a structured cabling distributor located in Australia. In the third quarter of 2000, the Company sold the net assets of a wholly-owned subsidiary of Accu-Tech Corporation for $4.6 million in cash and notes receivable. The effect of these transactions on the operating results of the Company was not significant. NOTE 3. INCOME (LOSS) PER SHAREderivatives (5.1) 2.8 --------- --------- Comprehensive income $ 11.2 $ 18.1 ========= ========= Note 4. Income (Loss) per Share The following table sets forth the computation of basic and diluted income (loss) per common share:
FOR THE 13 WEEKS ENDED FOR THE 39 WEEKS ENDED ----------------------------- ----------------------------- SEPTEMBER 28, SEPTEMBER 29, SEPTEMBER 28, SEPTEMBER 29, 2001 2000 2001 2000 ------------- ------------- ------------- ------------- (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) BASIC INCOME (LOSS) PER SHARE Income (loss) before extraordinary loss $ (11,728) $ 24,055 $ 27,892 $ 62,848 Extraordinary loss (189) - (1,039) - ------------- ------------- ------------- ------------- Net income (loss) (numerator) $ (11,917) $ 24,055 $ 26,853 $ 62,848 ============= ============= ============= ============= Weighted- average common shares outstanding (denominator) 36,438 36,975 36,524 36,321 Income (loss) before extraordinary loss $ (0.32) $ 0.65 $ 0.76 $ 1.73 Extraordinary loss (0.01) - (0.03) - Net income (loss) $ (0.33) $ 0.65 $ 0.74 $ 1.73 DILUTED INCOME (LOSS) PER SHARE Income (loss) before extraordinary loss $ (11,728) $ 24,055 $ 27,892 $ 62,848 Interest impact of assumed conversion of convertible notes - 2,056 - 2,101 ------------- ------------- ------------- ------------- Adjusted income (loss) before extraordinary loss (numerator) (11,728) 26,111 27,892 64,949 Extraordinary loss (189) - (1,039) - ------------- ------------- ------------- ------------- Net income (loss) $ (11,917) $ 26,111 $ 26,853 $ 69,949 ============= ============= ============= ============= Weighted-average common shares outstanding 36,438 36,975 36,524 36,321 Effect of dilutive securities: Stock options, warrants and convertible notes - 7,519 1,274 3,450 ------------- ------------- -------------- ------------- Weighted-average common shares outstanding (denominator) 36,438 44,494 37,798 39,771 ============= ============= ============== ============= Income (loss) before extraordinary loss $ (0.32) $ 0.59 $ 0.74 $ 1.63 Extraordinary loss (0.01) - (0.03) - Net income (loss) $ (0.33) $ 0.59 $ 0.71 $ 1.63
13 weeks ended ------------------------ (In millions, except per share amounts) March 29, March 30, 2002 2001 --------- --------- Basic Income (Loss) Per Share: Reported income before extraordinary loss $ 9.5 $ 20.9 Goodwill amortization - 2.2 --------- --------- Adjusted income before extraordinary loss 9.5 23.1 Extraordinary loss (0.6) - --------- --------- Adjusted net income $ 8.9 $ 23.1 ========= ========= Weighted-average common shares outstanding 36.6 36.9 Reported income per share before extraordinary loss $ 0.26 $ 0.57 Goodwill amortization per share - 0.06 --------- --------- Adjusted income per share before extraordinary loss 0.26 0.63 Extraordinary loss per share (0.02) - --------- --------- Adjusted net income per share $ 0.24 $ 0.63 ========= ========= Diluted Income (Loss) Per Share: Income before extraordinary loss $ 9.5 $ 20.9 Interest impact of assumed conversion of convertible notes - 2.2 --------- --------- Reported income before extraordinary loss 9.5 23.1 Goodwill amortization - 2.2 --------- --------- Adjusted net income before extraordinary loss 9.5 25.3 Extraordinary loss (0.6) - --------- --------- Net income $ 8.9 $ 25.3 ========= ========= Weighted-average common shares outstanding 36.6 36.9 Effect of dilutive securities: Stock options, warrants and convertible notes 1.4 7.0 --------- --------- Weighted-average common shares outstanding 38.0 43.9 ========= ========= Reported income per share before extraordinary loss $ 0.25 $ 0.53 Goodwill amortization per share - 0.05 --------- --------- Adjusted income per share before extraordinary loss 0.25 0.58 Extraordinary loss per share (0.02) - --------- --------- Adjusted net income per share $ 0.23 $ 0.58 ========= ========= NOTE 4. COMPREHENSIVE INCOME (LOSS) Comprehensive income, netNote 5. Summarized Financial Information of tax, consisted of the following:
FOR THE 13 WEEKS ENDED FOR THE 39 WEEKS ENDED ------------------------------ ------------------------------- (IN MILLIONS) SEPTEMBER 28, SEPTEMBER 29, SEPTEMBER 28, SEPTEMBER 29, 2001 2000 2001 2000 ------------- ------------- ------------- ------------- Net income (loss) $ (11.9) $ 24.0 $ 26.9 $ 62.8 Cumulative effect of adoption of SFAS No. 133 - - 2.7 - Change in cumulative translation adjustment (1.4) (6.5) (8.6) (17.0) Change in fair market value of derivatives 0.8 - 1.9 - ------------- ------------- ------------- ------------- Comprehensive income (loss) $ (12.5) $ 17.5 $ 22.9 $ 45.8 ============= ============= ============= =============
NOTE 5. SUMMARIZED FINANCIAL INFORMATION OF ANIXTER INC.Anixter Inc. The Company had an ownership interest of 99.9% in Anixter Inc. at September 28, 2001,March 29, 2002, which is included in the consolidated financial statements of the Company. The following summarizes the financial information for Anixter Inc.: ANIXTER INC. CONDENSED CONSOLIDATED BALANCE SHEETS (IN MILLIONS) SEPTEMBERMarch 29, December 28, DECEMBER 29,(In millions) 2002 2001 2000 --------- --------------------- ------------ Assets: (UNAUDITED)(Unaudited) Current assets $ 954.3826.3 $ 1,331.0827.1 Property, net 58.3 56.550.9 55.0 Goodwill, net 234.0 239.3232.4 231.6 Other assets 71.7 53.8 --------- ---------80.4 83.1 ----------- ----------- $ 1,318.31,190.0 $ 1,680.6 ========= =========1,196.8 =========== =========== Liabilities and Stockholders' Equity: Current liabilities $ 417.4352.0 $ 645.1352.9 Other liabilities 40.3 28.642.0 41.5 Long-term debt 86.0 244.912.1 19.3 Subordinated notes payable to parent 241.5 250.5234.2 244.8 Stockholders' equity 533.1 511.5 --------- ---------549.7 538.3 ----------- ----------- $ 1,318.31,190.0 $ 1,680.6 ========= ========= 1,196.8 =========== =========== ANIXTER INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE 13 WEEKS ENDED FOR THE 39 WEEKS ENDED ---------------------------- ---------------------------- (IN MILLIONS) SEPTEMBER 28, SEPTEMBER 29, SEPTEMBER 28, SEPTEMBER 29, 2001 2000 2001 2000 ------------- ------------- ------------- ------------- Net sales $ 761.5 $ 971.8 $ 2,481.6 $ 2,651.5 Operating income (loss) $ (9.4) $ 54.4 $ 84.1 $ 143.5 Income (loss) before income taxes and extraordinary loss $ (19.1) $ 40.8 $ 47.2 $ 109.3 Net income (loss) $ (11.4) $ 23.0 $ 26.5 $ 61.6
NOTE(Unaudited) 13 weeks ended ------------------------ March 29, March 30, (In millions) 2002 2001 ---------- ---------- Net sales $ 614.7 $ 880.3 Operating income $ 20.1 $ 50.0 Income before income taxes and extraordinary loss $ 15.4 $ 35.4 Income before extraordinary loss $ 9.1 $ 20.3 Extraordinary loss $ 0.3 $ - Net income $ 8.8 $ 20.3 Note 6. RESTRUCTURING COSTSRestructuring Costs Due to increased economic softness and deteriorating market conditions in the communications productproducts market, the Company announced a one-time restructuring charge of $31.7 million during the third quarter of 2001. The components of the charge are identified below. STAFF REDUCTIONSbelow: Staff Reductions - The Company plansplanned to reduce approximately 700 employees across all business functions and geographic areas and communicated these intentions to the employees in the third quarter.quarter of 2001. The reductions started during the third quarter of 2001that time and as of September 28, 2001, approximately 500 employeesMarch 29, 2002, substantially all staff reductions have been specifically terminated. During the quartercompleted. In 2001, the Company recorded a restructuring charge of $9.8 million primarily relating to severance and fringe benefits of the approximately 700 employees to be terminated. FACILITY RESTRUCTURINGFacility Restructuring - The Company recorded a restructuring charge of $13.9 million to primarily cover primarily the future lease payments on the excess facilities located in North America. Included in this amount was management's assumption that certain facilities could be sublet for a total of $7.2 million. In addition,million and the Company wrote-offwrite-off of related leasehold improvements and equipment of $2.0 million. KOREAKorea - The Company has decided to leave the Korean market and, hasas a result, recorded a restructuring charge of $6.2 million. The major components of this charge includeincluded accounts receivable write-offsbad debts of $3.1 million and legal fees, settlements and other shutdown costs oftotaling $3.1 million. OTHER ITEMSOther Items - The Company wrote-offexpensed purchased software that it decided not to implement and provided for legal fees associated with the restructuring. The total charge for these items was $1.8 million. The following table summarizes the restructuring costs: TOTAL NON-CASH CASH ACCRUED COSTS CHARGES PAYMENTS COSTSTotal Non-Cash Cash Accrued (In millions) Costs Charges Payments Costs ------- --------- --------- -------- Staff Reductionsreductions $ 9.8 $ - $ 1.57.4 $ 8.32.4 Facility Restructuringrestructuring 13.9 2.0 .3 11.61.8 10.1 Korea 6.2 3.7 - 2.50.9 1.6 Other 1.8 0.9 - 0.9 ----- ------0.4 0.5 ------- --------------- --------- -------- Total $31.7$ 31.7 $ 6.6 $ 1.810.5 $ 23.3 ===== ======14.6 ======= =============== ========= ======== Amounts related to the net lease expense due to the consolidation of facilities will be paid over the respective lease terms through the year 2008. We expect toThe Company has substantially complete the implementationimplemented all of the restructuring initiative by the second quarterinitiatives. Note 7. Extinguishment of 2002. NOTE 7. EXTINGUISHMENT OF DEBTDebt The Company repurchased $6.0$15.3 million of its 7% zero-coupon convertible notes and $32.2$7.0 million of its 8% senior notes that mature in September, 2003, for $6.3 million and $33.6$22.9 million during the 13 and 39 weeks ended September 28, 2001, respectively.March 29, 2002. Additionally, in the 3913 week period ended September 28, 2001,March 29, 2002, the Company wrote-off $.3$0.4 million of debt issuance costs associated with its the cancellation of a $110.0 million revolving credit agreement, due 2001.convertible notes. Accordingly, the Company recorded an extraordinary loss on the early extinguishment of debt of $.3$1.0 million and $1.7 million ($.2 million and $1.00.6 million, net of tax), respectively, in its condensed consolidated statements of operations for the 13 and 39 weeks ended September 28, 2001. NOTE 8. SUBSEQUENT EVENT In October 2001, Anixter Inc. repurchased an additional $28.0 millionMarch 29, 2002. Item 2. Management's Discussion and Analysis of its 8% senior notes that mature in September, 2003 for $30.3 million. The Company will reflect an extraordinary lossFinancial Condition and Results of $1.4 million on the early extinguishment of debt from this transaction in its condensed consolidated statements of operations for the year ended December 28, 2001. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSOperations The following is a discussion and analysis of the historical results of operations and financial condition of Anixter International Inc. (the "Company") and factors affecting the Company's financial resources. This discussion should be read in conjunction with the consolidated financial statements, including the notes thereto, set forth herein under "Financial Statements" and the Company's Annual Report on Form 10-K for the year ended December 29, 2000.28, 2001. This discussion contains forward-looking statements which are qualified by reference to, and should be read in conjunction with, the Company's discussion regarding forward-looking statements as set forth in this report. FINANCIAL LIQUIDITY AND CAPITAL RESOURCES CASH FLOWFinancial Liquidity and Capital Resources Cash Flow Consolidated net cash provided by continuing operating activities was $197.5$42.5 million for the 3913 weeks ended September 28, 2001,March 29, 2002 compared to $226.1$89.3 million used for the same period in 2000.2001. Cash provided by operating activities increasedwas lower than 2001 primarily due to the decline in sales and $120 million received for inventory that was returned to a reductionvendor in working capital required to support the business. In 2000, inventory increased $324.22001. This was partially offset by net payments on accounts payable of $51.5 million to support the growth in the service provider and integrated supply markets and a significant CLEC contract, while in 2001 inventory declined $289.6 million.versus an increase of $13.1 million in 2002. Consolidated net cash used in investing activities was $19.5$1.5 million for the 3913 weeks ended September 28, 2001,March 29, 2002 versus $16.9$8.6 million for the same period in 2000. For2001. Capital expenditures have been reduced due to the 39 weeks ended September 28, 2001, the Company incurred $19.5 million of capital expenditures, primarily for the upgrades of warehouse facilities and purchase of software and computer equipment.projected weak economic conditions. Capital expenditures are expected to be approximately $22.0$23.5 million in 2001. In2002 with the first quarter of 2000,majority being related to the Company purchased allNet Technologies Pty. Limited in Australia for $6.7 million. In the third quarter of 2000, the Company sold the net assetsconstruction of a wholly-owned U.S. subsidiary of its structured cabling business for $4.6 million in cash and notes receivable.new headquarters building. Consolidated net cash used in financing activities was $187.6$20.8 million for the 3913 weeks ended September 28, 2001,March 29, 2002 in comparison to $255.7$96.5 million provided in the corresponding 20002001 period. The change is primarily the result of a net decrease in long-term borrowings of $125.1$52.7 million extinguishment of senior notes of $33.6in 2001 as compared to $22.9 million andin 2002. In addition, $46.9 million of treasury stock purchases partially offsetoccurred in 2001. The Company did not repurchase stock in the first quarter of 2002. Cash provided by proceeds of $20.3 million received from the issuance of 1,167,027 shares for the exercise of stock options and employee stock purchase plan. In 2000, long-term borrowings increased $252.9 million, while treasury stock purchases were $15.4 million. In addition, in 2000 the Company received $30.8 million from the issuance of 1,813,311 shares for the exercise of stock options and employee stock purchase plan. Cash used in discontinued operations was $4.6$0.3 million forin the 3913 weeks ended September 28, 2001,March 29, 2002 compared to $11.8$2.9 million used in the corresponding 20002001 period. FINANCINGSFinancings At September 28, 2001, $403.6March 29, 2002, $408.1 million was available under the bank revolving lines of credit at Anixter Inc., of which $16.2$29.7 million was available to pay the Company for general corporate purposes. On April 24, 2001, Anixter Inc. cancelled a $110 million 364-day revolving credit line. Asintercompany liabilities. During the first quarter of September 28, 2001, Anixter Inc. has repurchased $32.22002, the Company retired $7.0 million of itsthe 8% seniorSenior notes that mature in September, 2003, for $33.6 million. In October 2001, Anixter Inc. repurchased an additional $28.0and $15.3 million of its 8% senior notes for $30.3 million.the 7% zero-coupon convertible notes. As a result, the Company recorded an extraordinary loss of $0.02 per diluted share. The Company will continue to pursue opportunities to repurchase outstanding debt, with the volume and timing to depend on market conditions. Consolidated interest expense was $24.7$4.7 million and $33.9$9.3 million for the 3913 weeks ended September 28,March 29, 2002 and March 30, 2001, and September 29, 2000, respectively. The decrease is mainly due to lower debt levels, a result of the impact of the accounts receivable securitization program implementedlevels. The average outstanding long-term debt balance in the thirdfirst quarter of fiscal year 2000, lower working capital levels and a reduction in interest rates. In 2001, the Company incurred $1.72002 was $239.4 million compared to $477.6 million in interest expense related to2001. Included in other expenses is $0.8 million and $3.7 million, for the cancellation of certain of its interest rate hedge agreements for which there were no longer outstanding borrowings. For the 3913 weeks ending September 28,ended March 29, 2002 and March 30, 2001, the Company recorded other expense of $8.6 million relatedrespectively, relating to the interest expense incurred by Anixter Receivables Corporation, a wholly-owned unconsolidated subsidiary. The Company had authorizedaverage outstanding debt incurred by Anixter Receivables Corporation in the purchasefirst quarter was $132.9 million and $216.8 million for 2002 and 2001, respectively. The effective interest rate on the Anixter Receivables Corporation debt was 2.6% and 6.5% for the first quarter of up to 2.8 million shares2002 and 2001, respectively. During the first quarter of its common stock, with the volume and timing to depend on market conditions. Through September 28, 2001, the Company repurchased 2,079,000 shares at an average cost of $22.57. Purchases were made in the open market and were financed from cash generated by operations. OTHER LIQUIDITY CONSIDERATIONSNo shares were repurchased in the first quarter of 2002. The Company has the authorization to purchase 0.6 million additional shares with the volume and timing to depend on market conditions. Other Liquidity Considerations Certain debt agreements entered into by the Company's subsidiaries contain various restrictions including restrictions on payments to the Company. Such restrictions have not had nor are expected to have an adverse impact on the Company's ability to meet its cash obligations. RESULTS OF OPERATIONSResults of Operations The Company competes with distributors and manufacturers who sell products directly or through existing distribution channels to end users or other resellers. The Company's relationship with the manufacturers for which it distributes products could be affected by decisions made by these manufacturers as the result of changes in management or ownerships as well as other factors. In addition, the Company's future performance could be affected by economic downturns, potentiallypossible rapid changes in applicable technologies or regulatory changes, thatwhich may substantially change the cost and/or availabilityaccessibility of public networking bandwidth. QUARTER ENDED SEPTEMBER 28, 2001:Quarter ended March 29, 2002: Net lossincome for the thirdfirst quarter of 20012002 was $11.9$8.9 million compared with net income of $24.0$20.9 million for the thirdfirst quarter of 2000. Due to a combination of increased economic softness and continued deterioration of market conditions in the communication products industry, the Company incurred a one-time charge of $31.7 million in the third quarter of 2001 associated with reducing its workforce, closing or consolidating certain facilities and exiting the Korean market. In addition, the2001. The Company recorded an after-tax extraordinary loss of $189,000$0.6 million for the early extinguishmentextinquishment of $6.0$7.0 million of Anixter Inc.'sits 8% seniorSenior notes and $15.3 million of the 7% zero-coupon convertible notes. The Company's net sales during the thirdfirst quarter of 20012002 decreased 21.6%30.2% to $761.5$614.7 million from $971.8$880.3 million in the same period in 2000.2001. Net sales by major geographic market are presented in the following table: 13 WEEKS ENDED ----------------------------- (IN MILLIONS) SEPTEMBER 28, SEPTEMBERweeks ended ------------------------ March 29, March 30, (In millions) 2002 2001 2000 ------------- ---------------------- --------- North America $ 601.1487.6 $ 760.8662.3 Europe 107.4 162.984.4 162.4 Asia Pacific and Latin America 53.0 48.1 ------------- -------------42.7 55.6 --------- -------- $ 761.5614.7 $ 971.8 ============= =============880.3 ========= ======== Sales declined in every geography as the recession and economic softness that developed in the United States in 2001 spread throughout the world. When compared to the corresponding period in 2000,2001, North America sales for the thirdfirst quarter of 20012002 decreased 21.0%26.4% to $601.1$487.6 million. In 2000, the Company's sales included $60 million of non-recurring low gross margin fulfillment sales. Excluding these sales, North America was down by 14.2%. This decrease reflects the general economic softness in the United States, combinedSales fell across all markets, with significant weakness in the telecom and technology related market places. Sales declines in the Enterprise, Network Communications and Electrical Wire and Cable markets were partially offset by a significant increaseand Integrated supply sales down 20.8%, 34.5% and 28.4%, respectively. 2001 included $47.2 million of service provider sales which is now primarily reported in the Integrated Supply market.Wire and Cable sales for last year. Due to the significant fall in spending in the telecommunications industry, sales to the service provider market in 2002 were minimal. Europe sales decreased 34.1%, as the general economic softness experienced in the United States is also being felt by the international markets. Sales declined48.0% due to declining sales in all significant customer markets. 2001 sales for Europe includes $27.1 million to the service provider market which did not repeat in 2002. Excluding the effect of changes in exchange rates, Europe sales declined 31.8%decreased 45.0%. Asia Pacific and Latin AmericanAmerica net sales were up 10.2%down 23.1% from the thirdfirst quarter of 2000, reflecting strong sales growth2001 due to general economic softness in Latin America.both regions. Excluding the effect of changes in exchange rates, Asia Pacific and Latin America sales increased 13.2%decreased 23.6%. The Company reported an operating loss of $10.0Operating income decreased to $20.5 million in 2001 compared to $53.92002 from $49.7 million of operating income in the thirdfirst quarter of 2000. Due to a combination of increased economic softness and continued deterioration of market conditions in the telecom and technology related products industry, the Company incurred a one-time charge of $31.7 million associated with reducing its workforce, closing or consolidating some facilities and exiting the Korean market.2001. Operating income (loss) by major geographic market is presented in the following table: 13 WEEKS ENDED ----------------------------- (IN MILLIONS) SEPTEMBER 28, SEPTEMBERweeks ended ------------------------ March 29, March 30, (In millions) 2002 2001 2000 ------------- ---------------------- --------- North AmericaAmerica* $ (5.9)18.0 $ 47.641.0 Europe 1.6 5.73.4 7.7 Asia Pacific and Latin America (5.7) 0.6 ------------- -------------America* (0.9) 1.0 --------- --------- $ (10.0)20.5 $ 53.9 ============= ============= 49.7 ========= ========= *The 13 weeks ended March 30, 2001, includes goodwill amortization expense of $2.1 million for North America reported an operating loss of $5.9and $0.1 million for Asia Pacific and Latin America. Excluding 2001 goodwill amortization, North America operating income for the thirdfirst quarter of 2001, reflecting a decrease of $53.5 million2002 decreased 58.3% from the corresponding period in 2000. Excluding restructuring costs of $23.1 million and the non-recurring fulfillment sales noted previously, operating profit2001. Due to competitive pricing pressures, gross margins declined 61.1%. Excluding restructuring costs, operating margins were 2.9%, a decline of 3.4 percentage points when compared to 22.8% in 2002 from 25.3% for the same period in 2000. The decline2001. Primarily as a result of the lower gross margins, operating margins (excluding goodwill amortization in 2001) declined to 3.7% in the first quarter of 2002 from 6.5% in the same period in 2001. Excluding goodwill amortization, operating margin primarily relates toexpenses declined 25.0% as variable costs were reduced in line with the sharp declinereduction in sales discussed previously and incremental costs associatedheadcount and facility expenses were reduced with facility expansions completed in late 2000.the third quarter 2001 restructuring. Europe operating income decreased 73.8%. Excluding restructuring costs of $2.3 million, operating profit declined 32.6%, while operating margins remained flat. The56.2% reflecting the decline in sales. Europe's gross margins increased significantly from 20.1% in 2001 to 26.5% in 2002, as 2001 included $27.1 million of low margin service provider sales. Operating expenses decreased 23.9% reflecting a decline in variable costs associated with the sales decline. The reduction in service provider sales had minimal impact on operating income primarily relates to the decrease in sales discussed previously, partially offset by lower operating expenses which are a result of organizational changes and refocused marketing efforts over the past two years.expenses. Excluding the effect of changes in exchange rates, and the restructuring charge, Europe'sEurope operating income decreased 29.1%53.7%. Excluding goodwill amortization, Asia Pacific and Latin America reported an operating loss of $5.7 million compared to operating income of $.6decreased $2.0 million, from $1.1 million income in the third quarter of 2000. Excluding restructuring costs of $6.3 million, operating profit increased 3.4% and operating margins remained flat. This resulted from the 10.2% improvement in sales and a reduced cost structure following the changes made in staffing and operations in recent years. Excluding the effect of changes in the exchange rates and the restructuring charge, Asia Pacific and Latin America's operating income increased 5.0%. Net other expense totaled $3.2 million in the thirdfirst quarter of 2001 compared to $.5$0.9 million loss in 2002. The significant decline in sales coupled with the corresponding periodsmall sales base resulted in 2000.a loss for the quarter. Changes in exchange rates had a minimal effect on operating income. Other, net expense (income) includes the following: 13 weeks ended ------------------------ March 29, March 30, (In millions) 2002 2001 --------- --------- Foreign exchange $ 1.3 $ 0.8 Gain on sale of real estate (1.2) - Accounts receivable securitization - 4.0 Other (0.1) - --------- --------- $ - $ 4.8 ========= ========= In the thirdfirst quarter of 2001, the Company2002, Argentina incurred $1.7 million in costs associated with the accounts receivable securitization program and $1.3$1.6 million of foreign exchange losses. The consolidated tax provision on continuing operations reflects an income tax benefit of $8.0decreased to $6.3 million in 2001 compared to expense of $16.92002 from $14.7 million in the third quarter of 2000. As previously mentioned, the Company incurred $31.7 million in restructuring costs during the thirdfirst quarter of 2001, which generated a tax benefit of $12.7 million.primarily due to lower pre-tax income. The third quarter 2001 effective tax rate was 40.5%. The full year anticipated2002 effective tax rate of 40.5%40.0% is based on pre-tax book income adjusted primarily for amortization of nondeductible goodwill and losses of foreign operations for which no current benefit is available. 39 WEEKS ENDED SEPTEMBER 28, 2001: Net income for the 39 weeks ended September 28, 2001 was $26.9 million compared to $62.8 million in the corresponding period in 2000. Due to a combination of increased economic softness and continued deterioration of market conditions in the telecom and technology related products industry, the Company incurred a one-time charge of $31.7 million in the third quarter of 2001 associated with reducing its workforce, closing or consolidating certain facilities and exiting the Korean market. The Company also recorded an after-tax extraordinary loss of $1.0 million for the early extinguishment of $32.2 million of its 8% senior notes and debt issuance costs associated with the cancellation of a $110.0 million revolving credit agreement due 2001. The Company's net sales during the 39 weeks ended September 28, 2001 decreased 6.4% to $2,481.6 million from $2,651.5 million in the same period in 2000. Net sales by major geographic market are presented in the following table: 39 WEEKS ENDED ----------------------------- (IN MILLIONS) SEPTEMBER 28, SEPTEMBER 29, 2001 2000 ------------- ------------- North America $ 1,920.1 $ 2,079.8 Europe 400.4 439.4 Asia Pacific and Latin America 161.1 132.3 ------------- ------------- $ 2,481.6 $ 2,651.5 ============= ============= When compared to the corresponding period in 2000, North America sales for the 39 weeks ended September 28, 2001 decreased 7.7%. Enterprise Network Communications product set sales declined 5.7%, while the Electrical Wire and Cable market declined 1%. The Service Provider sector was down 66%, partially offset by a 74% increase in sales in the Integrated Supply market. Europe sales decreased 8.9% when compared to the same period in 2000. Increased sales in the Integrated Supply market partially offset declines across all other markets as the general economic softness experienced in the United States is also being felt by the international markets. Excluding the effect of changes in exchange rates, Europe sales declined 3.7%. Asia Pacific and Latin American net sales were up 21.8% from the same period in 2000, reflecting significant growth in Latin America. Excluding the effect of changes in exchange rates, Asia Pacific and Latin America net sales increased 25.4%. Operating income for the 39 weeks ended September 28, 2001 decreased 41.4%, or $58.5 million, from $141.4 million in the corresponding period of 2000. Due to a combination of increased economic softness and continued deterioration of market conditions in the telecom and technology related products industry, the Company incurred a one-time charge of $31.7 million in the third quarter of 2001 associated with reducing its workforce, closing or consolidating certain facilities and exiting the Korean market. Operating income by major geographic market is presented in the following table: 39 WEEKS ENDED ----------------------------- (IN MILLIONS) SEPTEMBER 28, SEPTEMBER 29, 2001 2000 ------------- ------------- North America $ 70.5 $ 124.2 Europe 16.2 17.1 Asia Pacific and Latin America (3.8) 0.1 ------------- ------------- $ 82.9 $ 141.4 ============= ============= North America operating income for the 39 weeks ended September 28, 2001 decreased 43.2% from the corresponding period in 2000. Excluding restructuring costs of $23.1 million and the non-recurring fulfillment sales impact on operating profit of $6.9 million during 2000, operating profit declined 20.2%. Excluding restructuring costs, operating margins were 4.9%, a decline of 1.1 percentage points when compared to the same period in 2000. The decline resulted primarily from the decline in sales and incremental costs associated with facility expansions completed in late 2000. Europe operating income decreased 5.5% when compared to 2000. Excluding restructuring costs of $2.3 million, operating profit increased 8.1% and operating margins improved by .7 percentage points. Excluding the effect of changes in exchange rates and the restructuring charge, Europe operating profit increased 13.8%. Operating profit and margins benefited from a significant reduction in operating expenses, reflecting organizational changes and refocused marketing efforts. Asia Pacific and Latin America recorded an operating loss of $3.8 million in 2001 compared to income of $.1 million for 2000. Excluding restructuring costs of $6.3 million, operating profit was $2.5 million and operating margin was 1.5 percentage points higher than 2000. This resulted from the 21.8% improvement in sales and a reduced cost structure following the corrections made over the last two years. Changes in exchange rates had a minimal effect on operating income. Net other expense totaled $11.4 million for the 39 weeks ended September 28, 2001 compared to income of $.3 million for the same period in 2000. In 2001, the Company incurred $9.1 million in costs associated with the accounts receivable securitization program and $2.3 million in foreign exchange losses. The consolidated tax provision on continuing operations decreased to $18.9 million in 2001 from $45.0 million in 2000 due to lower pre-tax earnings and a reduction in the income tax rate. The 2001 effective tax rate of 40.5% is based on pre-tax book income adjusted primarily for amortization of nondeductible goodwill and losses of foreign operations for which no current benefit is available. The decline in the effective tax rate, from 41.7% in 2000, reflects the anticipation of a higher percentage of certain foreign earnings having a lower effective tax rate than domestic earnings due to the utilization of operating loss carry-forwards.not currently deductible. PART II. OTHER INFORMATION ITEMItem 6. EXHIBITS AND REPORTS ON FORMExhibits and Reports on Form 8-K (a) Exhibits None. (b) Reports on Form 8-K None. SIGNATURES PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OFPursuant to the requirements of the Securities Exchange Act of 1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED.the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ANIXTER INTERNATIONAL INC. Date: November 7, 2001May 9, 2002 By: /S/ ROBERT/s/ Robert W. GRUBBS -------------------------------------Grubbs ------------------------------------ Robert W. Grubbs President and Chief Executive Officer Date: November 7, 2001May 9, 2002 By: /S/ DENNIS/s/ Dennis J. LETHAM -------------------------------------Letham ------------------------------------ Dennis J. Letham Senior Vice President - Finance and Chief Financial Officer