================================================================================

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549
FORM 10-Q

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

For the quarterly period ended October 3, 2003April 2, 2004

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

For the transition period from ______________ to _____________

COMMISSION FILE NUMBER: 1-5989

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

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

2301 PATRIOT BLVD.
GLENVIEW, ILLINOISGlenview, Illinois 60025
(224) 521-8000
(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 [ ]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2).

Yes [X] No [ ]

At November 3, 2003, 36,238,906May 4, 2004, 36,732,514 shares of the registrant's Common Stock, $1.00
par value, were outstanding.

================================================================================

ANIXTER INTERNATIONAL INC.

TABLE OF CONTENTS

PAGE
----

PART I. FINANCIAL INFORMATION

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

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operation.......... 13Operations....... 11

Item 3. Quantitative and Qualitative Disclosures Aboutabout Market Risk ................................... 21Risk.................................. *

Item 4. Controls and Procedures....................................................................... 21Procedures..................................................................... 17

PART II. OTHER INFORMATION

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

Item 2. Changes in Securities, and Use of Proceeds.....................................................Proceeds and Issuer Purchases of Equity 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.............................................................. 228-K............................................................ 18

- --------------.

*No reportable information under this item.

This report may contain various "forward-looking statements" within the meaning
of Section 27A of the Securities Act of 1933, as amended and Section 21E of the
Securities Exchange Act of 1934, as amended which can be identified by the use
of forward-looking terminology such as "believe""believes", "expects", "prospects",
"estimated", "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.

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ANIXTER INTERNATIONAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

13 WEEKS ENDED
39 WEEKS ENDED
-------------------------- ---------------------------
OCTOBER 3, SEPTEMBER 27, OCTOBER 3, SEPTEMBER 27,-------------------
APRIL 2, APRIL 4,
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS) 2004 2003
2002 2003 2002
-------------------------- ----------------------------------- --------

NET SALES ............................................. $ 653.4764.2 $ 626.3 $ 1,960.4 $ 1,858.3662.2
Cost of Operations:operations:
Cost of goods sold 495.1 478.3 1,483.3 1,424.4................................. 581.5 501.4
Operating expenses 134.6 124.9 408.8 367.8................................. 153.1 137.8
Amortization of intangibles ........................ 0.6 0.4
-- 1.1 --
-------- -------- ---------- ----------------- -------
Total costs and expenses 630.1 603.2 1,893.2 1,792.2
-------- -------- ---------- ----------...................... 735.2 639.6
------- -------
OPERATING INCOME 23.3 23.1 67.2 66.1...................................... 29.0 22.6
Other (expense) income:expense:
Interest expense (3.2) (3.1) (9.9) (11.9)................................... (3.0) (3.4)
Extinguishment of debt ............................. -- 1.3 (6.2) (0.3)(0.4)
Other, net -- (2.0) (0.7) 0.9
-------- -------- ---------- ----------......................................... (3.1) (1.3)
------- -------
Income before income taxes 20.1 19.3 50.4 54.8and extraordinary gain...... 22.9 17.5
Income tax expense 8.8 7.7 21.6 21.9
-------- -------- ---------- ----------.................................... 8.9 7.3
------- -------
Income before extraordinary gain ...................... 14.0 10.2
Extraordinary gain, net of tax of $0.6 ................ 4.1 --
------- -------
NET INCOME ............................................ $ 11.318.1 $ 11.6 $ 28.8 $ 32.9
======== ======== ========== ==========10.2
======= =======
BASIC INCOME PER SHARESHARE:
Income before extraordinary gain ................... $ 0.310.38 $ 0.310.28
Extraordinary gain ................................. $ 0.790.11 $ 0.89--
Net income ......................................... $ 0.50 $ 0.28
DILUTED INCOME PER SHARE:
Income before extraordinary gain ................... $ 0.37 $ 0.27
Extraordinary gain ................................. $ 0.11 $ --
Net income ......................................... $ 0.48 $ 0.27
DIVIDEND PER COMMON SHARE ............................. $ 0.311.50 $ 0.30 $ 0.77 $ 0.86--

See accompanying notes to the condensed consolidated financial statements.

ANIXTER INTERNATIONAL INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

OCTOBER 3,APRIL 2, JANUARY 3,
2003 2003
------------2,
2004 2004
-------- ----------
(IN MILLIONS, EXCEPT SHARE AMOUNTS) (UNAUDITED)

ASSETS

CURRENT ASSETS
Cash and cash equivalents .............................................. $ 38.938.4 $ 19.1101.4
Accounts receivable (less allowances of $15.9$16.4 and $15.4$17.3
in 2004 and 2003, and 2002, respectively) 254.2 188.2..................................... 327.9 255.5
Note receivable -receivable-- unconsolidated subsidiary 28.6 69.6............................ 39.0 56.5
Inventories 481.5 498.8............................................................ 500.6 499.1
Deferred income taxes 26.8 26.5.................................................. 16.5 16.5
Other current assets 12.1 10.0
--------- ---------................................................... 12.6 18.9
-------- --------
Total current assets 842.1 812.2......................................... 935.0 947.9
Property and equipment, at cost 203.5 191.1.......................................... 178.8 180.7
Accumulated depreciation (131.9) (132.0)
--------- ---------
Property................................................. (136.8) (137.6)
-------- --------
Net property and equipment net 71.6 59.1................................... 42.0 43.1
Goodwill (less accumulated amortization of
$97.5 and $96.0 in 2003 and 2002, respectively) 286.8 247.6................................................................. 279.1 278.5
Other assets 116.4 107.1
--------- ---------
$ 1,316.9 $ 1,226.0
========= =========............................................................. 107.2 101.9
-------- --------
$1,363.3 $1,371.4
======== ========

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
Accounts payable ....................................................... $ 279.0335.5 $ 257.3304.4
Accrued expenses 77.4 83.5
Accrued restructuring 3.4 4.2
Income taxes payable 3.0 4.7
--------- ---------....................................................... 71.0 80.8
-------- --------
Total current liabilities 362.8 349.7.................................... 406.5 385.2
Long-term debt 240.9 195.1........................................................... 241.4 239.2
Other liabilities 52.2 46.4
--------- ---------........................................................ 56.5 56.2
-------- --------
Total liabilities 655.9 591.2............................................ 704.4 680.6

STOCKHOLDERS' EQUITY
Common stock ----- $1.00 par value, 100,000,000 shares authorized,
36,226,15636,646,294 and 37,500,87836,376,411 shares issued and outstanding in 2004
and 2003, and 2002, respectively 36.2 37.5.............................................. 36.6 36.4
Capital surplus 19.0 45.2........................................................ 28.5 21.8
Retained earnings ...................................................... 600.5 638.2
Accumulated other comprehensive loss:
Foreign currency translation (18.7) (43.9)........................................ (5.8) (4.8)
Minimum pension liability (0.3) (0.3)........................................... (0.5) (0.5)
Unrealized loss on foreign exchange contracts ....................... (0.4) (0.3)
--
Retained earnings 625.1 596.3
--------- ----------------- --------
Total accumulated other comprehensive loss ........................ (6.7) (5.6)
-------- --------
Total stockholders' equity 661.0 634.8
--------- ---------
$ 1,316.9 $ 1,226.0
========= =========................................... 658.9 690.8
-------- --------
$1,363.3 $1,371.4
======== ========

See accompanying notes to the condensed consolidated financial statements.

ANIXTER INTERNATIONAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

3913 WEEKS ENDED
------------------------------
OCTOBER 3, SEPTEMBER 27,-----------------------
APRIL 2, APRIL 4,
(IN MILLIONS) 2004 2003
2002
---------- ------------------- ------

OPERATING ACTIVITIES
Net income ................................................................. $ 28.818.1 $ 32.910.2
Adjustments to reconcile net income to net cash (used in)
provided by continuing operating activities:
Extraordinary gain .................................................... (4.1) --
Loss on extinguishment of debt 6.2 0.3........................................ -- 0.4
Loss (gain) on sale or disposal of fixed assets and securities 0.3 (3.1)............... -- 0.1
Depreciation .......................................................... 4.1 4.5
Amortization of restricted stock ...................................... 1.3 0.9
Amortization of intangible assets and amortization 18.0 17.0deferred financing costs ........ 0.8 0.5
Accretion of zero-couponzero coupon convertible notes 6.6 9.6
Income tax savings from employee stock plans 0.5 2.4............................ 2.3 2.2
Deferred income taxes ................................................. (0.1) (0.1)
Changes in current assets and liabilities, net 23.2 76.3........................ (29.9) 12.1
Restructuring charge (2.3) (9.2)and other charges ....................................... (0.5) (1.1)
Other, net 2.1 8.8
---------- -------------............................................................ (2.7) 2.6
------ ------
Net cash (used in) provided by continuing operating activities 83.4 135.0activities.... (10.7) 32.3

INVESTING ACTIVITIES
Capital expenditures (23.5) (10.2)
Acquisition of business (42.0) (110.4)
Proceeds from the sale of fixed assets 1.6 2.9
Proceeds from the sale of investments 2.5 2.0
---------- -------------....................................................... (2.9) (12.6)
------ ------
Net cash used in continuing investing activities (61.4) (115.7)................. (2.9) (12.6)

FINANCING ACTIVITIES
Proceeds from long-term borrowings 285.9 110.4......................................... 20.8 121.4
Repayment of long-term borrowings (319.3) (58.4)
Proceeds from issuance.......................................... (20.8) (116.7)
Payment of notes payable 143.8 --
Retirement of notes payable (75.9) (99.3)
Purchases of common stock for treasury (35.6)cash dividend ................................................... (55.1) --
Proceeds from issuance of common stock 4.8 7.1
Debt issuance..................................... 6.1 0.5
Deferred financing costs (4.3) (0.6)
Other, net (0.6)................................................... (0.2) (0.4)
Purchases of common stock for treasury ..................................... -- ---------- -------------(17.3)
Retirement of notes payable ................................................ -- (2.0)
------ ------
Net cash used in continuing financing activities (1.2) (40.8)
---------- -------------................. (49.2) (14.5)
------ ------
(DECREASE) INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS FROM
CONTINUING OPERATIONS 20.8 (21.5)
Net cash................................................... (62.8) 5.2
Cash used in discontinued operations (1.0) (0.7)......................................... (0.2) (0.3)
Cash and cash equivalents at beginning of period ............................. 101.4 19.1
27.2
---------- ------------------- ------
Cash and cash equivalents at end of period ................................... $ 38.938.4 $ 5.0
========== =============24.0
====== ======

See accompanying notes to the condensed consolidated financial statements.

ANIXTER INTERNATIONAL INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Consolidation and PresentationBASIS OF 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 January 3, 2003.2, 2004. 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 20032004 presentation.

Recently Issued Accounting Pronouncements

In April 2002, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 145, "Rescission of
FASB Statements No. 4, 44, 64, Amendment of FASB Statement No. 13, and Technical
Corrections", effective for fiscal years beginning after May 15, 2002. SFAS No.
145 rescinds FASB Statement No. 4, 44, 64 and amends SFAS No. 13, "Accounting
for Leases", to eliminate an inconsistency between the required accounting for
sale-leaseback transactions and the required accounting for certain lease
modifications that have economic effects that are similar to sale-leaseback
transactions. Additionally, SFAS No. 145 requires gains and losses on
extinguishment of debt to be classified as income or loss from continuing
operations rather than as extraordinary items as previously required under SFAS
No. 4. The Company adopted SFAS No.145 as required on January 4, 2003. As a
result, any gain or loss from the extinguishment of debt is recorded as other
income or expense before income taxes. Any gain or loss on extinguishment of
debt that was classified as an extraordinary item in prior periods has been
reclassified in accordance with this statement. The adoption of SFAS No. 145 did
not have a material effect on the Company's results of operations, financial
position or debt covenants.

In the first quarter 2003, the Company adopted Emerging Issues Task
Force ("EITF") Issue 02-16, Accounting by a Customer (Including a Reseller) for
Certain Consideration Received from a Vendor. Under the new accounting guidance,
cash consideration for reimbursement of specific, identifiable and incremental
costs incurred by the Company to sell the vendor's products should be
characterized as a reduction of the associated cost when recognized in the
Company's income statement. Previously, all reimbursements from vendors were
classified as a reduction of costs of sales, while the associated costs were
classified as operating expenses. Accordingly, the Company reclassified the
prior corresponding period amount. This change in accounting increased cost of
sales and reduced operating expenses for the 13 weeks and 39 weeks ended October
3, 2003 and September 27, 2002, by $2.2 million and $6.1 million, and $1.9
million and $5.5 million, respectively. As a result, there was no impact on net
income.

In April 2003, the FASB issued SFAS No.149, "Amendment of Statement 133
on Derivative Instruments and Hedging Activities." This statement amends and
clarifies financial accounting and reporting for derivative instruments,
including certain derivative instruments embedded in other contracts and for
hedging activities under FASB Statement No. 133, "Accounting for Derivative
Instruments and Hedging Activities." This statement is effective for contracts
entered into or modified after June 30, 2003. The adoption of SFAS No. 149 did
not have an effect on the Company's results of operations, financial position or
debt covenants.

In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equity." The
standard improves the accounting for certain financial instruments that, under
previous guidance, issuers could account for as equity. The standard requires
that those instruments be classified as liabilities in statements of financial
position. This standard is effective for interim periods beginning after June
15, 2003. The adoption of SFAS No. 150 did not have an effect on the Company's
results of operations, financial position or debt covenants.

In January 2003, the FASB issued Interpretation No. 46, "Consolidation
of Variable Interest Entities." Interpretation No. 46 requires that the assets,
liabilities and results of the activity of variable interest entities be
consolidated into the financial statements of the company that has the
controlling financial interest. Interpretation No. 46 also provides guidance for
determining whether a variable interest entity should be consolidated based on
voting interest or significant financial support provided to it. The adoption of
Interpretation No. 46 did not impact the Company's condensed consolidated
financial statements.

Stock based compensationSTOCK BASED COMPENSATION: Beginning in 2003, the Company granted
restricted employee stock units in lieu of employee stock options. The fair
value of the restricted stock units is amortized over the four yearfour-year vesting
period from the date of grant. DuringIn the 13first quarter of 2004 and 39 weeks ended October 3, 2003, $0.5$0.9
million and $1.2$0.2 million was recognized as expense, respectively. Total expense
for fiscal 20032004 is expected to be approximately $1.7 million.$4.4 million as compared to $1.6
million in 2003.

Under the provisions of SFAS No. 123, "Accounting for Stock-Based
Compensation," and SFAS No.148,No. 148, "Accounting for Stock-Based
Compensation-Transition and Disclosure," an amendment of SFAS No.123,No. 123, the
Company has elected to continue to apply the intrinsic value method of
Accounting Principles Board ("APB") Opinion NoNo. 25, "Accounting for Stock Issued
to Employees," and its related interpretations in accounting for its stock-based
compensation plans. In accordance with the APB Opinion No. 25, compensation cost
of stock options issued were measured as the excess, if any, of the quoted
market price of the company's stock at the date of the grant over the option
exercise price and is charged to operations over the vesting period. The Company
applied the disclosure-only provisions of SFAS No. 123. Accordingly, no
compensation expense has been recognized in the Condensed Consolidated Statementscondensed consolidated
statements of Operationsoperations for the stock option plans.

The Black-Scholes option pricingoption-pricing model was developed for estimating the
fair value of traded options, which have no vesting restrictions and are fully
transferable. In addition, option valuation models require the input of highly
subjective assumptions including the expected stock price volatility. Because
the Company's stock options have characteristics significantly different from
those of traded options, and because changes in the subjective input assumptions
can materially affect the fair value estimate, in management's opinion, the
existing models do not necessarily provide a reliable single measure of the fair
value of the Company's stock options. Had compensation costs for the plans been
determined based on the fair value at the grant date using the Black-Scholes
option pricing model and amortized over the respective vesting period, the
Company's net income would have been reduced to the pro forma amounts indicated
below:

13 WEEKS ENDED
39 WEEKS ENDED
------------------------------- ------------------------------
OCTOBER 3, SEPTEMBER 27, OCTOBER 3, SEPTEMBER 27,-----------------------
APRIL 2, APRIL 4,
2004 2003
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS) 2003 2002 2003 2002
------------- ------------- ------------- -------------DATA) -------- --------

Net income as reported ............................................... $ 11.318.1 $ 11.6 $ 28.8 $ 32.910.2
Add: Stock-based employee compensation included in net income, netnet.... 0.8 0.6 0.5 1.8 1.6
Deduct: Stock-based employee compensation expense, net (2.4)............... (2.3) (2.6)
(7.6) (7.7)
----------- ----------- ---------- ---------------- ------
Pro forma net income ................................................. $ 9.516.6 $ 9.5 $ 23.0 $ 26.8
=========== =========== ========== ==========8.2
====== ======

BASIC EARNINGS PER SHARE:
asAs reported ........................................................ $ 0.310.50 $ 0.310.28
Pro forma .......................................................... $ 0.790.45 $ 0.89
pro forma $ 0.26 $ 0.26 $ 0.63 $ 0.730.22

DILUTED EARNINGS PER SHARE:
asAs reported ........................................................ $ 0.310.48 $ 0.300.27
Pro forma .......................................................... $ 0.770.44 $ 0.86
pro forma $ 0.26 $ 0.26 $ 0.63 $ 0.720.22

ANIXTER INTERNATIONAL INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-- CONTINUED

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS: In December 2003, the Financial
Accounting Standards Board ("FASB") revised Statement of Financial Accounting
Standards ("SFAS") No. 132, "Employers' Disclosures about Pensions and Other
Postretirement Benefits." This statement revises employers' disclosure about
pension plans and other postretirement benefit plans. It does not change the
measurement or recognition of those plans required by SFAS No. 87, "Employers'
Accounting for Pensions," SFAS No. 88, "Employers' Accounting for Settlements
and Curtailments of Defined Benefit Pension Plans and for Termination Benefits"
and SFAS No. 106, "Employers' Accounting for Postretirement Benefits Other Than
Pensions." It requires additional disclosures to those in the original SFAS No.
132. This statement is effective for financial statements with fiscal years
ending after December 15, 2003. The weighted average fair valueinterim-period disclosures required by this
Statement are effective of the first quarter ending April 2, 2004. The
provisions of this statement have been disclosed in Note 9, "Pension Plans,
Post-Retirement Benefits and Other Benefits."

In January 2003, the FASB issued Interpretation No. ("FIN") 46,
"Consolidation of Variable Interest Entities", an Interpretation of Accounting
Research Bulletin ("ARB") 51, which subsequently has been revised by FIN 46-R.
The primary objectives of FIN 46-R are to provide guidance on the identification
of entities for which control is achieved through means other than through
voting rights (variable interest entities or VIEs) and how to determine when and
which business enterprise should consolidate the VIE (the primary beneficiary).
This new model for consolidation applies to an entity in which either (1) the
equity investors (if any) do not have a controlling financial interest or (2)
the equity investment at risk is insufficient to finance that entity's
activities without receiving additional subordinated financial support from
other parties. In addition, FIN 46-R requires that both the primary beneficiary
and all other enterprises with a significant variable interest in a VIE make
additional disclosures. FIN 46-R is effective for VIEs created after January 31,
2003 and is effective for all VIEs created before February 1, 2003 that are
Special Purpose Entities ("SPEs") in the first reporting period ending after
December 15, 2003 and for all other VIEs created before February 1, 2003 in the
first reporting period ending after March 15, 2004. The adoption of FIN 46-R has
not had any effect on the Company's stock options (which
was $11.36 and $14.79 per share for the 13 weeks and 39 weeks ended September
27, 2002, respectively) was estimated at the datefinancial position, cash flows or results of
grant using the
Black-Scholes option pricing model with the following assumptions: expected
stock price volatility of 46%; expected dividend yield of zero; risk-free
interest rate of 4.7%; and an average expected life of 8 years.operations.

NOTE 2. COMPREHENSIVE INCOME

Comprehensive income, net of tax, consisted of the following:

13 WEEKS ENDED
39 WEEKS ENDED
------------------------------ -----------------------------
OCTOBER 3, SEPTEMBER 27, OCTOBER 3, SEPTEMBER 27,--------------------
APRIL 2, APRIL 4,
(IN MILLIONS) 2004 2003
2002 2003 2002
------------ ------------ ------------ -------------------- -------

Net income $ 11.3 $ 11.6 $ 28.8 $ 32.9................................... $18.1 $10.2
Change in cumulative translation adjustment 1.5 (3.0) 25.2 15.0adjustment... (1.0) 6.9
Change in fair market value of derivatives 0.3derivatives.... (0.1) (0.3) (5.2)
------------ ------------ ------------ -------------(0.2)
----- -----
Comprehensive income $ 13.1 $ 8.5 $ 53.7 $ 42.7
============ ============ ============ =============......................... $17.0 $16.9
===== =====

NOTE 3. EXTRAORDINARY GAIN

In December 2003, the Company received $4.7 million from an escrow account
established in connection with the 1983 bankruptcy of Itel Corporation, the
predecessor of the Company. As of January 2, 2004, the Company was unable to
determine the appropriate beneficiary of this receipt and was in the process of
an investigation to determine its proper disposition. As of January 2, 2004, the
Company had not recorded income associated with this receipt because of the
uncertainty of the beneficiary. During the first quarter of 2004, the Company
completed the investigation and concluded that the funds are the property of the
Company. Accordingly, in the first quarter of 2004 the Company recorded a $4.1
million extraordinary after-tax gain as a result of the receipt.

ANIXTER INTERNATIONAL INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-- CONTINUED

NOTE 4. INCOME PER SHARE

The following table sets forth the computation of basic and diluted income
per share:

13 WEEKS ENDED
-------------------------
APRIL 2, APRIL 4,
(IN MILLIONS, EXCEPT PER SHARE DATA) 2004 2003
-------- --------

BASIC INCOME PER SHARE:
Income before extraordinary gain ............. $ 14.0 $ 10.2
Extraordinary gain, net ...................... 4.1 --
------ ------
Net income ................................... $ 18.1 $ 10.2
====== ======

Weighted-average common shares outstanding.... 36.5 36.9

Income per share before extraordinary gain.... $ 0.38 $ 0.28
Extraordinary gain per share ................. $ 0.11 $ --
Net income per share ......................... $ 0.50 $ 0.28

DILUTED INCOME PER SHARE:
Income before extraordinary gain ............. $ 14.0 $ 10.2
Extraordinary gain ........................... 4.1 --
------ ------
Net income ................................... $ 18.1 $ 10.2
====== ======

Weighted-average common shares outstanding 36.5 36.9
Effect of dilutive securities:
Stock options and units ................... 1.1 0.9
------ ------
Weighted-average common shares outstanding 37.6 37.8
====== ======

Income per share before extraordinary gain $ 0.37 $ 0.27
Extraordinary gain per share ................. $ 0.11 $ --
Net income per share ......................... $ 0.48 $ 0.27

The Company excluded 6.6 million and 3.1 million, respectively, of common
stock equivalents, primarily relating to the 3.25% and 7% zero coupon
convertible notes ("Convertible Notes"), from its calculation of diluted income
per share because the effect would have been antidilutive. Because the
Convertible Notes were antidilutive, the related $1.4 million and $1.3 million
for the first quarter of 2004 and 2003, respectively, of net interest expense
was not excluded from the determination of income in the calculation of diluted
income per share.

NOTE 5. INCOME TAXES

The 2004 effective tax rate is 39.0% compared to 42.0% in 2003. The
decrease in the effective tax rate is primarily due to a change in the mix of
foreign income and losses by country as compared to country level net operating
loss positions. The change in tax rate increased income before extraordinary
gain and net income by $0.7 million or $0.02 per diluted share.

NOTE 6. SHARE REPURCHASE

In the first quarter of 2003, the Company repurchased 832,200 shares at an
average cost of $22.12. Purchases were made in the open market and were financed
from cash generated by operations. No shares were repurchased in 2004. The
Company has the authorization to purchase additional shares with the volume and
timing to depend on market conditions.

ANIXTER INTERNATIONAL INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-- CONTINUED

NOTE 7. SPECIAL DIVIDEND

On February 11, 2004, the Company's Board of Directors declared a special
dividend of $1.50 per common share, or $55.8 million, as a return of excess
capital to shareholders. On March 31, 2004, the Company paid $55.1 million of
the dividend to shareholders of record as of March 16, 2004. In addition, as
required by the plan documents, the remaining dividend of $0.7 million was
accrued at April 2, 2004 for payments on the vesting date to holders of employee
stock units and restricted stock.

In accordance with the provisions of the stock option plan, the exercise
price and number of options outstanding were adjusted to reflect the special
dividend. The average exercise price of outstanding options decreased from
$21.48 to $20.40 and the number of outstanding options increased from 4,331,975
to 4,561,424. These changes resulted in no additional compensation expense.

In accordance with the provisions of the enhanced incentive plan, stock
units granted in 2001 were adjusted to reflect the special dividend. The number
of outstanding stock units associated with the 2001 grant increased from 53,680
to 56,531. This change resulted in no additional compensation expense.

The conversion rate of the 3.25% zero coupon convertible notes due 2033
("Convertible Notes due 2033") was adjusted in March 2004 to reflect the special
dividend. Holders of the Convertible Notes due 2033 may convert each of them
into 13.5584 shares of the Company's common stock, of which the Company has
reserved 5.1 million shares based on the number of outstanding bonds, in any
calendar quarter if:

- - the sales price of our common stock reaches specified thresholds;

- - during any period in which the credit rating assigned to the Convertible
Notes is below a specified level;

- - the Convertible Notes due 2033 are called for redemption; or

- - specified corporate transactions have occurred.

Upon conversion, the Company has the right to deliver, in lieu of its
common stock, cash or a combination of cash and stock. The Convertible Notes due
2033 were not convertible at April 2, 2004, as none of the above conditions were
met.

NOTE 8. ACQUISITION OF BUSINESS

In the third quarter of 2003, the Company purchased 100% of the stock of
Walters Hexagon Group Limited ("Walters Hexagon") for $42.7 million,
inclusive of legal and financial advisory fees. The stock purchase agreement
provides for additional purchase consideration of up to a maximum of $5.8
million based on the future operating performance of the company.. Headquartered in Worcester,
England, Walters Hexagon is a leading distributor of fasteners and other small
parts to Original Equipment Manufacturersoriginal equipment manufacturers and provides inventory management
services to a range of markets and industries. Walters Hexagon operates a
network of nine regional customerten service centers in the United Kingdom and France and employs
approximately 270 people which support
warehousing and distribution.300 people. The Company believes Walters Hexagon's business model
and position as a value-added distributor complements its current business. Assets and liabilities have been recorded at estimated fair value
based on a preliminary allocation of the purchase price. Had this acquisition
occurred at the beginning of the year, the impact on the Company's operating
results would not have been significant. The purchase was funded with on-hand
excess cash balances along with the assumption of $0.7 million of Walters
Hexagon's debt.

On September 20, 2002, Company completed the purchase of the operations
and assets of Pentacon, Inc. ("Pentacon"), pursuant to Pentacon's plan of
reorganization filed under Chapter 11 of the United States Bankruptcy Code.
Pentacon is a leading distributor of fasteners and other small parts to original
equipment manufacturers and provider of inventory management services and has 21
distribution and sales facilities in the United States, along with sales offices
and agents in Europe, Canada, Mexico and Australia. The
Company paid a totalpurchased Walters Hexagon for $42.7 million, inclusive of $111.4 million, including transaction-related costs, forlegal and
financial advisory fees, acquiring tangible assets with a fair value of
approximately $74.7$16.2 million. The tangible net assets primarily consist of
accounts receivable, inventory, office and warehouse equipment and furnishings,
accounts payable and select operating liabilities. Based upon a third party
valuation, intangible assets and liabilities have also been recorded at estimated fair value
based on a preliminary allocation of the purchase price. Intangible assets are
recorded at an estimated fair value as follows:

$13.8- - $8.3 million of intangible assets with a finite liveslife of 10 years (customer
relationships); and

- - $18.2 million of goodwill.

The stock purchase agreement provides for additional consideration of up
to a $1.8maximum of $5.8 million intangible assetbased on the future operating performance of
Walters Hexagon. The purchase was funded with an indefinite
life (trade name). Goodwill resulting fromon-hand excess cash balances along
with the transaction totaled $21.1
million. Customer relationshipsassumption of $0.7 million of Walters Hexagon's debt. Included in the
results of the Company for the first quarter of 2004 are being amortized on a straight-line basis
over approximately 9 years. The$23.7 million of sales
and $0.5 million of operating income related to Walters Hexagon.

This acquisition was accounted for as a purchase and the results of
operations of the acquired business are included in the condensed
consolidated financial
statements from the date of acquisition. InHad this acquisition occurred at the
13 and 39
weeks ended October 3, 2003, Pentacon contributed salesbeginning of $47.0 million and
$142.1 million, respectively, and operating incomethe year of $1.4 million and $3.9
million, respectively. The results foracquisition, the third quarter 2002 did not
significantly impact on the Company's operating
results.

NOTE 4. INCOME PER SHARE

The following table sets forth the computation of basic and diluted
income per common share:

13 WEEKS ENDED 39 WEEKS ENDED
---------------------------- ----------------------------
OCTOBER 3, SEPTEMBER 27, OCTOBER 3, SEPTEMBER 27,
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS) 2003 2002 2003 2002
---------- ------------- ---------- -----------

NET INCOME $ 11.3 $ 11.6 $ 28.8 $ 32.9

BASIC INCOME PER SHARE:

Weighted average common shares outstanding 35.9 37.1 36.4 36.9

Net income per share $ 0.31 $ 0.31 $ 0.79 $ 0.89

DILUTED INCOME PER SHARE:

Weighted-average common shares outstanding 35.9 37.1 36.4 36.9
Effect of dilutive securities:
Stock options and units 0.8 0.9 0.9 1.1
---------- ------------ ----------- -----------
Weighted-average common shares outstanding 36.7 38.0 37.3 38.0
========== ============ ========== ===========

Net income per share $ 0.31 $ 0.30 $ 0.77 $ 0.86

Common stock equivalents relating to the 7% zero coupon convertible
notes were excluded from the calculation of diluted income per share because the
effectresults would not have been antidilutive. The 3.25% zero coupon convertible notes
were excluded from the calculation of diluted income per share as they cannot be
converted until after October 3, 2003, contingent on certain conditions. See
Note 6.significant.

ANIXTER INTERNATIONAL INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-- CONTINUED

NOTE 5.9. SUMMARIZED FINANCIAL INFORMATION OF ANIXTER INC.

The Company guarantees, fully and unconditionally, substantially all of
the debt of its subsidiaries, which includesinclude Anixter Inc. Certain debt agreements
entered into by Anixter Inc. 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.
The following summarizes the financial information for Anixter Inc.:

ANIXTER INC.
CONDENSED CONSOLIDATED BALANCE SHEETS

OCTOBER 3,APRIL 2, JANUARY 3,2,
(IN MILLIONS) 2003 2003
------------ -----------2004 2004
---------- ----------
(UNAUDITED)

ASSETS:
Current assets ........................ $ 825.2919.3 $ 813.4875.4
Property, net 71.6 59.1......................... 41.5 43.1
Goodwill net 286.8 247.6and other intangibles ........ 301.3 301.1
Other assets 119.1 104.1
------------- -----------
$ 1,302.7 $ 1,224.2
============= ===========.......................... 115.4 109.6
-------- --------
$1,377.5 $1,329.2
======== ========

LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities ................... $ 371.2412.0 $ 347.3384.9
Subordinated notes payable to parent 189.6 210.2parent... 156.1 147.8
Long-term debt ........................ 30.0 71.130.0
Other liabilities 52.2 46.2..................... 78.6 79.1
Stockholders' equity 659.7 549.4
------------- -----------
$ 1,302.7 $ 1,224.2
============= ===========.................. 700.8 687.4
-------- --------
$1,377.5 $1,329.2
======== ========

ANIXTER INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

13 WEEKS ENDED
39 WEEKS ENDED
------------------------------- ----------------------------
OCTOBER 3, SEPTEMBER 27, OCTOBER 3, SEPTEMBER 27,-------------------
APRIL 2, APRIL 4,
(IN MILLIONS) 2004 2003
2002 2003 2002
------------- ------------- ---------- --------------------- --------

Net sales $ 653.4 $ 626.3 $ 1,960.4 $ 1,858.3.................................. $764.2 $662.2
Operating income ........................... $ 23.730.1 $ 23.2 $ 68.7 $ 66.122.7
Income before income taxestaxes.................. $ 20.323.3 $ 17.2 $ 56.3 $ 53.517.6
Net income ................................. $ 11.4 $ 10.214.5 $ 32.2 $ 31.710.2

NOTE 6. CONVERTIBLE NOTES DUE 2033

On July 1, 2003,10. PENSION PLANS, POST-RETIREMENT BENEFITS AND OTHER BENEFITS

The Company has various defined benefit and defined contributory pension
plans. The plans of the Company issued $328.8 millionare the Anixter Inc. Pension Plan and Anixter
Inc. Excess Benefit Plan ("Domestic Plans") and various pension plans covering
employees of 3.25% zero coupon
convertible senior notes (together with the overallotment, the "Convertible
Notes"foreign subsidiaries ("Foreign Plans") due 2033. Each Convertible Note has a principal value at maturity of
$1,000.. The net proceeds from the issue were $121.4 million and were initially
used to (i) fund repurchases of $63.5 million of accreted valuemajority of the
Company's outstanding 7% zero coupon convertible senior notes from a limited number of
holders, (ii)pension plans are non-contributory and cover substantially all
full-time domestic employees and certain employees in other countries.
Retirement benefits are provided based on compensation as defined in both the
Domestic and Foreign Plans. The Company's policy is to fund repurchasesall plans as
required by the Employee Retirement Income Security Act of 1974 ("ERISA"), the
Internal Revenue Service and applicable foreign laws. Anixter Inc. Pension Plan
assets consisted primarily of equity securities and fixed income fund
investments.

ANIXTER INTERNATIONAL INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-- CONTINUED

The expected long-term rate of return on our Anixter Inc. Pension Plan
assets reflects the average rate of earnings expected on the invested assets and
future assets to be invested to provide for the projected benefit obligation. We
have historically used a 9.0% rate of return since the average 10 year
historical return on our plan assets is approximately $17.2 million10.4%. We reduced the
expected rate of the
Company's common stock, and (iii)return for general corporate purposes, including the
repayment of working capital borrowings under a floating rate bank line of
credit. The Company expects2004 to reborrow such amounts under the line of credit
from time to time for general corporate purposes. The discount associated with
the issuance is being amortized through June 2033, using the effective interest
rate method. Issuance costs of approximately $3.6 million are being amortized
through June 2033 using the straight-line method.

In connection with the issuance of the Convertible Notes on July 1,
2003, the Company granted the initial purchasers an option to purchase up to an
additional $49.3 million of Convertible Notes to cover overallotments. On July
9, 2003, the initial purchaser exercised its option in full. Net proceeds from
the additional issuance on July 9, 2003 were $18.3 million and were used for
general corporate purposes. Additional issuance costs of $0.3 million related8.5% due to the exercise of the overallotment are being amortized through June 2033 using
the straight-line method.

Holders of the Convertible Notes may convert each of them into 12.8773
shares of the Company's common stock in any calendar quarter commencing after
October 3, 2003 if:

- - the sales price of our common stock reaches specified thresholds;

- - during any period in which the credit rating assigned to the
Convertible Notes is below a specified level;

- - the Convertible Notes are called for redemption; or

- - specified corporate transactions have occurred.

Upon conversion, the Company has the right to deliver, in lieu of its common
stock, cash or a combination of cash and stock, of which the Company has
reserved 4.9 million shares.

The Company may redeem the Convertible Notes, at any time in whole or
in part, on July 7, 2011 for cash at the accreted value. Additionally, holders
may require the Company to purchase all or a portion of their Convertible Notes
on:

- - July 7, 2007 at a price equal to $432.48 per Convertible Note;

- - July 7, 2009 at a price equal to $461.29 per Convertible Note;

- - July 7, 2011 at a price equal to $492.01 per Convertible Note;

- - July 7, 2013 at a price equal to $524.78 per Convertible Note;

- - July 7, 2018 at a price equal to $616.57 per Convertible Note;

- - July 7, 2023 at a price equal to $724.42 per Convertible Note; and

- - July 7, 2028 at a price equal to $851.13 per Convertible Note.

The Company may choose to pay the purchase price in cash or common stock or a
combination of both.

The Company must pay contingent cash interest to the holders of the
convertible notes during any six-month period commencing July 7, 2011 if the
average market price of a Convertible Note for a five trading day measurement
period preceding the applicable six-month period equals 120% or more of the sum
of the original issuance price and accrued original issue discount for such
Convertible Note as of the day immediately preceding the relevant six-month
period. The contingent interest payable per Convertible Note in respect of any
six-month period will equal an annual rate of 0.25% of the average market price
of a Convertible Note for the five day trading measurement period and will be
payable on the last day of the relevant six-month period. Except for the
contingent interest described above, the Company will not pay cash interest on
the Convertible Notes prior to maturity. The original issue discount will
continue to accrue at the yield to maturity whether or not contingent interest
is paid.

NOTE 7. SHARE REPURCHASE

In the 39 weeks ended October 3, 2003, the Company repurchased
1,567,650 shares at an average cost of $22.74. Purchases were madesignificant decline in the
openequity market in 2001 and were financed from cash generated by operations and the2002. Components of net proceeds
($121.4 million) from the issuance of $328.8 million of 3.25% zero coupon
convertible senior notes. No shares were repurchased in 2002. The Company may
purchase additional shares, with volume and timing to depend on market
conditions.

NOTE 8. EXTINGUISHMENT OF DEBT

During the 39 weeks ended October 3, 2003 and September 27, 2002, the
Company repurchased a portion of its 7% zero coupon notes and its 8% senior
notes and subsequently wrote-off debt issuance costs associated with the
convertible notes. Additionally, during the 39 weeks ended October 3, 2003, the
Company wrote off debt issuance costs associated with the cancellation of a
$115.0 million revolving credit facility. The following table reflects the
repurchase activity during the 13 and 39 weeks ended October 3, 2003 and
September 27, 2002:periodic pension cost is as
follows:

13 WEEKS ENDED 39 WEEKS ended
--------------------------------------------- ------------------------------------
OCTOBER 3, SEPTEMBER 27, OCTOBER 3, SEPTEMBER 27,PENSION BENEFITS
---------------------------------------------------------------
DOMESTIC FOREIGN TOTAL
------------------- ------------------- -------------------
APRIL 2, APRIL 4, APRIL 2, APRIL 4, APRIL 2, APRIL 4,
2004 2003 2004 2003 2004 2003
-------- -------- -------- -------- -------- --------
(IN MILLIONS)
2003 2002 2003 2002
-------------------- ----------------------- ---------------- ---------------
FACE FACE FACE FACE
AMOUNT COST AMOUNT COST AMOUNT COST AMOUNT COST
---------- ------- ------------- ------ ------ ------ ------ ------

8% senior notesService cost ..................... $ 6.01.5 $ 6.01.4 $ 3.61.1 $ 3.71.0 $ 8.02.6 $ 8.02.4
Interest cost .................... 1.8 1.8 0.8 0.7 2.6 2.5
Expected return on plan assets.... (1.6) (1.5) (0.7) (0.7) (2.3) (2.2)
Net amortization ................. 0.2 0.2 0.1 0.1 0.3 0.3
-------- -------- -------- -------- -------- --------
Net periodic cost ................ $ 10.61.9 $ 11.1
7% zero coupon
notes $ - $ - $ 50.3 $ 47.8 $ 63.5 $ 67.9 $ 90.7 $ 88.2
Debt issuance costs
written off $ - $ -1.9 $ 1.3 $ -1.1 $ 1.83.2 $ - $ 2.3 $ -3.0
======== ======== ======== ======== ======== ========

During the 13 week ended October 3, 2003, the remaining principle
balanceThe Company estimates that it will make contributions in 2004 of
approximately $4.5 million to $6.0 million related to the 8% senior notes became dueAnixter Inc. Pension Plan and
was repaid
at book value. During the 13 weeks ended September 27, 2002, the Company
recorded a gain on the early extinguishment of debt inapproximately $4.0 million to $5.0 million to its condensed
consolidated statements of operations of $1.3 million. For the 39 weeks ended
October 3, 2003 and September 27, 2002, the Company recorded a loss on the early
extinguishment of debt of $6.2 million and $0.3 million, respectively. The
Company may continue to repurchase outstanding debt securities, with the volume
and timing to depend on market conditions.

Foreign Plans.

NOTE 9.11. BUSINESS SEGMENTS

The Company is engaged in the distribution of communications and specialty
wire and cable products fasteners and small parts"C" class inventory components from top suppliers to
contractors and installers, and also to end users including manufacturers,
natural resources companies, utilities and original equipment manufacturers. The
Company is organized by geographic regions, and accordingly, has identified
North America (United States and Canada), Europe and AsiaEmerging Markets (Asia
Pacific and Latin AmericaAmerica) as reportable segments. The Company obtains and
coordinates financing, tax, information technology, legal and other related
services, certain of which are rebilled to subsidiaries. Interest expense and
other non-operating items are not allocated to the segments or reviewed on a
segment basis.

Segment information for the 13 and 39 weeks ended October 3,April 2, 2004 and April 4, 2003 and September 27, 2002
was as follows:

13 WEEKS ENDED
39 WEEKS ENDED
------------------------------- -----------------------------
OCTOBER 3, SEPTEMBER 27, OCTOBER 3, SEPTEMBER 27,---------------------------
APRIL 2, APRIL 4,
(IN MILLIONS) 2004 2003
2002 2003 2002
------------ ------------- ---------- --------------------- --------

NET SALES:
United States ................................. $ 453.6495.1 $ 441.4 $ 1,361.1 $ 1,309.8457.2
Canada 64.8 55.1 187.2 167.1
------------ ------------- ---------- -------------........................................ 76.0 60.9
-------- --------
North America 518.4 496.5 1,548.3 1,476.9........................... 571.1 518.1
Europe 88.2 86.2 276.0 255.4
Asia Pacific and Latin America 46.8 43.6 136.1 126.0
------------ ------------- ---------- -------------........................................ 140.2 97.9
Emerging Markets .............................. 52.9 46.2
-------- --------
$ 653.4764.2 $ 626.3 $ 1,960.4 $ 1,858.3
============ ============= ========== =============662.2
======== ========

OPERATING INCOME (LOSS):INCOME:
United States ................................. $ 19.1 $ 16.4
$ 21.5 $ 47.8 $ 53.9
Canada 3.8 2.3 9.7 8.9
------------ ------------- ---------- -------------........................................ 3.9 2.7
-------- --------
North America 20.2 23.8 57.5 62.8........................... 23.0 19.1
Europe 2.6 (0.3) 8.5 4.6
Asia Pacific and Latin America........................................ 4.5 3.0
Emerging Markets .............................. 1.5 0.5
(0.4) 1.2 (1.3)
------------ ------------- ----------- --------------------- --------
$ 23.329.0 $ 23.1 $ 67.2 $ 66.1
============ ============= =========== =============22.6
======== ========

OCTOBER 3,APRIL 2, JANUARY 3,
2003 2003
------------ -------------2,
2004 2004
-------- ----------

TOTAL ASSETS:
United States ................................. $ 861.3884.5 $ 842.7906.1
Canada 111.1 96.8
------------ -------------........................................ 118.8 120.2
-------- --------
North America 972.4 939.5........................... 1,003.3 1,026.3
Europe 232.8 171.2
Asia Pacific and Latin America 111.7 115.3
------------ -------------
$ 1,316.9 $ 1,226.0
============ =============........................................ 246.0 228.0
Emerging Markets .............................. 114.0 117.1
-------- --------
$1,363.3 $1,371.4
======== ========

119

ANIXTER INTERNATIONAL INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

NOTE 10. RESTRUCTURING COSTS

Due to general economic softness and deteriorating market in the
communications products market, during the third quarter of 2001 the Board of
Directors approved a restructuring plan and12. SUBSEQUENT EVENT

On April 26, 2004, the Company incurred unusual
restructuring and other charges of $31.7 million. The Company's remaining
liability at October 3, 2003, was $4.6 million, of which $2.9 million was
classified as short-term. As of September 27, 2002, the Company had implementedannounced plans to acquire substantially
all of the restructuring initiatives.

Activityassets and operations of Distribution Dynamics, Inc., ("DDI") for $25
million in cash, subject to a working capital adjustment. DDI is a privately
held value-added distributor of fasteners, hardware and related products
specializing in inventory logistics management programs directed at supporting
the production lines of original equipment manufacturers across a broad spectrum
of industries. Headquartered in Eden Prairie, Minnesota, DDI employs two hundred
seventy-seven associates located in twenty locations in the United States,
Canada and Mexico, which the Company plans to make offers of employment. In its
fiscal year ended September 30, 2003 DDI had sales of $76 million.

The proposed sale is subject to approval by the United States Bankruptcy
Court for the District of Minnesota where DDI filed a petition for relief under
Chapter 11 on April 26, 2004. In connection with this proposed purchase, the
Company plans to assume certain obligations of DDI under facility and operating
leases that are used in conjunction with the operations that the Company is
proposing to purchase. The Company may offer to purchase certain valid,
unsecured pre-petition claims to the accrued costs during 2003 is identified below:

STAFF FACILITY KOREA
(IN MILLIONS) REDUCTIONS RESTRUCTURING CLOSURE OTHER TOTAL
------------- ------------- ---------------- -------------- ----------

Balance at January 3, 2003 $ 0.2 $ 5.0 $ 1.4 $ 0.3 $ 6.9
Cash payments (0.1) (1.0) - - (1.1)
------------- ------------- ---------------- -------------- ----------
Balance at April 4, 2003 0.1 4.0 1.4 0.3 5.8
Cash payments - (0.6) - - (0.6)
Foreign exchange and other - 0.1 - - 0.1
------------- ------------- ---------------- -------------- ----------
Balance at July 4, 2003 0.1 3.5 1.4 0.3 5.3
Cash payments - (0.6) - - (0.6)
Foreign exchange and other 0.1 - (0.1) (0.1) (0.1)
------------- ------------- ---------------- -------------- ----------
Balance at October 3, 2003 $ 0.2 $ 2.9 $ 1.3 $ 0.2 $ 4.6
============= ============ ================ ============== ==========

Cash payments during 2003 consisted of $0.1 million for severance and
$2.2 million for committed lease payments, net of sublet income.

NOTE 11. SUBSEQUENT EVENT

Subsequentextent those claims apply to October 3, 2003,product sales
to the Company has repurchased an
additional $3.9 million of its 7% zero coupon convertible notesoperations that mature June
2020 for $4.2 million. The Company will write-off $0.1 million of deferred debt
issuance costs associated withbe acquired by the convertible notes. As a result, the Company
will record a $0.3 million loss on the early extinguishment of debt in its
fourth quarter of 2003 consolidated statements of operations.

12Company.

ANIXTER INTERNATIONAL INC.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONSOPERATIONS.

The following is a discussion 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 condensed 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 January 3, 2003.2, 2004.

ACQUISITION OF WALTERS HEXAGON

On September 20, 2002, the Company completed the purchase of the
operations and assets of Pentacon, Inc. ("Pentacon") pursuant to Pentacon's plan
of reorganization filed under Chapter 11 of the United States Bankruptcy Code.
Pentacon is a leading distributor of fasteners and other small parts to original
equipment manufacturers and provider of inventory management services and has 21
distribution and sales facilities in the United States, along with sales offices
and agents in Europe, Canada, Mexico and Australia. The
Company paid a totalpurchased Walters Hexagon for $42.7 million, inclusive of $111.4 million, including transaction-related costs, forlegal and
financial advisory fees, acquiring tangible assets with a fair value of
approximately $74.7$16.2 million. The tangible net assets primarily consist of
accounts receivable, inventory, office and warehouse equipment and furnishings,
accounts payable and select operating liabilities. Based upon a third party
valuation, intangible assets and liabilities have also been recorded at estimated fair value
based on a preliminary allocation of the purchase price. Intangible assets are
recorded at an estimated fair value as follows:

$13.8- $8.3 million of intangible assets with a finite liveslife of 10 years
(customer relationships); and

- $18.2 million of goodwill.

The stock purchase agreement provides for additional consideration of up
to a $1.8maximum of $5.8 million intangible assetbased on the future operating performance of
Walters Hexagon. The purchase was funded with an indefinite
life (trade name). Goodwill resulting fromon-hand excess cash balances along
with the transaction totaled $21.1
million. Theassumption of $0.7 million of Walters Hexagon's debt. Included in the
results of the Company for the first quarter of 2004 are $23.7 million of sales
and $0.5 million of operating income related to Walters Hexagon.

This acquisition was accounted for as a purchase and the results of
operations of the acquired business are included in the condensed consolidated financial
statements from the date of acquisition. Had this acquisition occurred at the
beginning of the year of acquisition, the impact on the Company's operating
results would not have been significant.

FINANCIAL LIQUIDITY AND CAPITAL RESOURCES

Overview

As a distributor, the Company's use of capital is largely for working
capital to support its revenue base. Capital commitments for property, plant and
equipment are limited to information technology assets, warehouse equipment and
office furniture and fixtures, since the Company operates from leased
facilities. Therefore, in any given reporting period, the amount of cash
consumed or generated by operations will primarily be a factor of the rate of
sales increase or decline, due to the corresponding change in working capital.

In periods when sales are increasing, the expanded working capital needs
will be funded first by cash from operations, secondly from additional
borrowings and lastly from additional equity offerings. Also, the Company will,
from time to time, issue or retire borrowings or equity in an effort to maintain
a cost-effective capital structure consistent with its anticipated capital
requirements.

ANIXTER INTERNATIONAL INC.

Cash Flow

Consolidated net cash used for operating activities was $10.7 million in
the first quarter of 2004, compared to cash provided by operating activities of
$32.3 million for the same period in 2003. The decrease in cash flow from
operations in 2004 is due to an increase in working capital of $29.9 million to
support the 15% growth in sales from the fourth quarter of 2003. Sales were flat
between the fourth quarter of 2002 and the first quarter of 2003, resulting in a
decline in working capital.

Consolidated net cash used in investing activities was $2.9 million in the
first quarter of 2004 versus $12.6 million for the same period in 2003. The
decrease is primarily the result of the Company spending $11.2 million in the
first quarter of 2003 to complete the construction of a new corporate
headquarters building. Capital expenditures are expected to be approximately
$15.0 million in 2004.

Consolidated net cash used in financing activities was $49.2 million in
the first quarter of 2004 compared to $14.5 million in the first quarter of
2003. During the 13 and 39 weeks ended October 3,April 2, 2004, the Company used $55.1 million to
fund the special dividend of $1.50 per common share that was paid on March 31,
2004 to shareholders of record on March 16, 2004. Proceeds from the issuance of
common stock relating to the exercise of stock options and stock units were $6.1
million in the first quarter of 2004 compared to $0.5 million in the first
quarter of 2003. In 2003, Pentacon contributed salesthe Company had net proceeds from borrowings of $47.0$4.7
million. As a result of significant cash holdings at the end of 2003, the
Company did not need to increase its borrowings to fund its operations.

Financing

Certain debt agreements entered into by the Company's subsidiaries contain
various restrictions including restrictions on payments to the Company. Such
restrictions have not nor are expected to have an adverse impact on the
Company's ability to meet its cash obligations. At April 2, 2004, $245.0 million
was available under the bank revolving lines of credit at Anixter Inc., of which
$21.0 million was available to pay the Company for intercompany liabilities. Due
to the leverage ratio restriction, borrowings of only $159.6 million, of which
$45.1 million may be used to pay dividends to the Company, of the $245.0 million
available under bank revolving lines of credit at Anixter would be permitted as
of April 2, 2004.

At April 2, 2004, certain foreign subsidiaries had approximately $20.5
million available under bank revolving lines of credit, none of which was
outstanding.

During the first quarter of 2003, the Company retired $2.0 million of the
8% senior notes and cancelled $115.0 million of its available revolving credit
facility in order to reduce costs associated with the excess availability. As a
result, the Company recorded a pre-tax loss on extinguishment of debt of $0.4
million. Although no debt was repurchased during the first quarter of 2004, the
Company may continue to pursue opportunities to repurchase outstanding debt
securities, with the volume and timing to depend on market conditions.

Consolidated interest expense was $3.0 million and $142.1$3.4 million respectively,for the
first quarter of 2004 and operating income2003, respectively. The decrease is due to a lower
average cost of $1.4borrowings. The average outstanding long-term debt balance for
the first quarter of 2004 and 2003 was $241.1 million and $3.9$212.9 million,
respectively. The resultseffective interest rate for the thirdfirst quarter 2002 did not significantly
impact the Company's operating results.

ACCOUNTS RECEIVABLE SECURITIZATIONof 2004 and 2003
was 5.0% and 6.3%, respectively.

Off Balance Sheet Financing

On October 6, 2000, the Company entered into an account receivable
securitization program. The program is conducted through Anixter Receivables
Corporation ("ARC"), which is a wholly-owned unconsolidated subsidiary of the
Company. The investment is accounted for using the equity method. The program
allows the Company to sell, on an ongoing basis without recourse, a majority of
the accounts receivable originating in the United States to ARC at a discount of
2.12% and consists of a series of 364-day facilities. At October 3, 2003April 2, 2004 and
January 3, 2003,2, 2004, the outstanding balance of accounts receivable sold to ARC
totaled $229.8$228.9 million and $248.6$245.7 million, respectively. Accordingly, these
accounts receivable were removed from the balance sheet.

FINANCIAL LIQUIDITY AND CAPITAL RESOURCES

Cash Flow

Consolidated net cash provided by continuing operating activities was
$83.4 million for the 39 weeks ended October 3, 2003, compared to $135.0 million
for the same period in 2002. Due to the decline in sales in 2002, working
capital reductions provided $76.3 million compared to only $23.2 million in
2003. The significant reduction in the 2002 working capital was primarily driven
by a $69.6 million reduction in inventory. During the 39 weeks ended October 3,
2003, inventory decreased only $31.2 million. The Company paid $2.3 million in
the current period for leases, severance and outplacements costs associated with
the 2001 restructuring, compared to $9.2 million for the corresponding period in
2002.

Consolidated net cash used in investing activities decreased to $61.4
million for the 39 weeks ended October 3, 2003 versus $115.7 million for the
same period in 2002. During the 39 weeks ended October 3, 2003, the Company
spent $42.0 million to acquire Walters Hexagon as compared to $110.4 million
used to acquire Pentacon in the same period of 2002. Capital expenditures
increased $13.3 million during the 39 weeks ended October 3, 2003 as compared to
the corresponding period in 2002. The increase is primarily the result of the
Company spending $18.4 million for the continued construction of the new
corporate headquarters building. The Company anticipates recovering
approximately $27.0 million of capital invested in this project in the fourth
quarter of 2003 through a sale and leaseback transaction. Capital expenditures
are expected to be approximately $26.0 million in 2003, $18.8 million of which
is for the new corporate headquarters.

Consolidated net cash used in financing activities was $1.2 million for
the 39 weeks ended October 3, 2003 compared to $40.8 million in the
corresponding 2002 period. In the 39 weeks ended October 3, 2003, the Company
paid $35.6 million for the purchase of treasury stock and $75.9 million for the
purchase of its 7% zero coupon convertible notes and 8% senior notes. In the
same period of 2002, the Company paid $99.3 million for the repurchase of its 7%
zero coupon convertible notes and 8% senior notes. Net cash used to repay
borrowings under the revolving credit agreements were $33.4 million during 2003
as compared to net proceeds from borrowing under the revolving credit agreements
of $52.0 million in 2002. In 2003, the Company received $4.8 million for the
exercise of employee stock options as compared to $7.1 million in 2002.

Financings

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. At October 3, 2003, $264.4
million was available under the bank revolving lines of credit, under which
$30.9 million may be used to pay dividends to the Company. Also, Anixter Inc.
may use cash available under the bank revolving lines of credit to pay the
Company for inter-company liabilities, which were $66.0 million as of October 3,
2003.

1412

On July 1, 2003, the Company issued $328.8 million of 3.25% zero coupon
convertible senior notes (together with the overallotment, the "Convertible
Notes") due 2033. Each Convertible Note has a principal value at maturity of
$1,000. The net proceeds from the issue were $121.4 million and were initially
used to (i) fund repurchases of $63.5 million of accreted value of the Company's
outstanding 7% zero coupon convertible senior notes from a limited number of
holders, (ii) to fund repurchases of approximately $17.2 million of the
Company's common stock, and (iii) for general corporate purposes, including the
repayment of working capital borrowings under a floating rate bank line of
credit. The Company expects to reborrow such amounts under the line of credit
from time to time for general corporate purposes. The discount associated with
the issuance is being amortized through June 2033, using the effective interest
rate method. Issuance costs of approximately $3.6 million are being amortized
through June 2033 using the straight-line method.

In connection with the issuance of the Convertible Notes on July 1,
2003, the Company granted the initial purchasers an option to purchase up to an
additional $49.3 million of Convertible Notes to cover overallotments. On July
9, 2003, the initial purchaser exercised its option in full. Net proceeds from
the additional issuance on July 9, 2003 were $18.3 million and were used for
general corporate purposes. Additional issuance costs of $0.3 million related to
the exercise of the overallotment is being amortized through June 2033 using the
straight-line method.

Holders of the Convertible Notes may convert each of them into 12.8773
shares of the Company's common stock in any calendar quarter commencing after
October 3, 2003 if:

- - the sales price of our common stock reaches specified thresholds;

- - during any period in which the credit rating assigned to the
Convertible Notes is below a specified level;

- - the Convertible Notes are called for redemption; or

- - specified corporate transactions have occurred.

Upon conversion, the Company has the right to deliver, in lieu of its
common stock, cash or a combination of cash and stock, of which the Company has
reserved 4.9 million shares.

- - July 7, 2007 at a price equal to $432.48 per Convertible Note;

- - July 7, 2009 at a price equal to $461.29 per Convertible Note;

- - July 7, 2011 at a price equal to $492.01 per Convertible Note;

- - July 7, 2013 at a price equal to $524.78 per Convertible Note;

- - July 7, 2018 at a price equal to $616.57 per Convertible Note;

- - July 7, 2023 at a price equal to $724.42 per Convertible Note; and

- - July 7, 2028 at a price equal to $851.13 per Convertible Note.

The company may choose to pay the purchase price in cash or in common stock or a
combination of both.

During the 39 weeks ended October 3, 2003, the Company recorded a loss
of $6.2 million for the early extinguishment of $63.5 million of its 7% zero
coupon notes, and debt issuance costs associated with the cancellation of $115.0
million of its available revolving credit facility. In the corresponding period
of 2002, the Company recorded a loss of $0.3 million for the early
extinquishment of $90.7 million of its 7% zero coupon notes and $10.6 million of
its 8% senior notes. The Company may continue to repurchase outstanding debt
securities, with the volume and timing to depend on market conditions.

Consolidated interest expense was $9.9 million and $11.9 million for
the 39 weeks ended October 3, 2003 and September 27, 2002, respectively. The
decrease is due to a reduction in interest rates. The average outstanding
long-term debt balance for the 39 weeks ended October 3, 2003 was $226.1 million
compared to $208.4 million in 2002. The effective interest rate for the 39 weeks
ended October 3, 2003 and September 27, 2002 was 5.8% and 7.6%, respectively.ANIXTER INTERNATIONAL INC.

Included in the Condensed Consolidated Statements of Operations "Other,
net" classification, are net expenses/income incurred by ARC of $1.7$0.2 million of
income and $1.5$1.1 million of expense, for the 39 weeks ended October 3,first quarter of 2004 and 2003, and September 27,
2002,
respectively. Included in the ARC net expense /incomeexpense/income amount was interest expense
incurred by ARC of $2.1$0.6 million and $2.5$0.7 million for the 39 weeks ended
October 3,first quarter of 2004
and 2003, and September 27, 2002, respectively. Generally accepted accounting principles require that
the interest expense be classified as other expense as it is recorded as part of
the Company's investment adjustment related to its 100% ownership of ARC.
However, it is considered to be part of the Company's financing strategy and
therefore is viewed as interest expense by the Company. The average outstanding
debt incurred by ARC for 39 weeks ended October
3,the first quarter of 2004 and 2003 and September 27, 2002 was $127.3$131.5 million
and $127.1$121.3 million, respectively. The effective interest rate on the ARC debt
was 2.2%1.7% and 2.5%2.3% for the 39 weeks ended October 3,first quarter of 2004 and 2003, and September 27, 2002, respectively.

Share Repurchases

In the 39 weeks ended October 3,first quarter of 2003, the Company repurchased 1,567,650832,200 shares of its common stock at an
average cost of $22.74.$22.12. Purchases were made in the open market and were financed
from cash generated by operations
and the issuance of the Convertible Notes. Nooperations. Although no shares were repurchased in 2002.
Thethe
first quarter of 2004, the Company mayhas the authorization to purchase additional
shares, with the volume and timing to depend on market conditions.

Liquidity Considerations and Other

In 2004, the Company estimates that it will have positive cash flow from
operating activities and after capital expenditures. The Company may continue to
pursue opportunities to acquire businesses and issue or retire borrowings or
equity in an effort to maintain a cost-effective capital structure consistent
with its anticipated capital requirements.

On February 11, 2004, the Company's Board of Directors declared a special
dividend of $1.50 per common share, or $55.8 million, as a return of excess
capital to shareholders. On March 31, 2004, the Company paid $55.1 million of
the dividend to shareholders of record as of March 16, 2004. In addition, as
required by the plan documents, the remaining dividend of $0.7 million was
accrued at April 2, 2004, for payments on the vesting date to holders of the
employee stock units and restricted stock.

On April 26, 2004, the Company announced plans to acquire substantially
all of the assets and operations of Distribution Dynamics, Inc., ("DDI") for $25
million in cash, subject to a working capital adjustment. The proposed sale is
subject to approval by the United States Bankruptcy Court for the District of
Minnesota where DDI filed a petition for relief under Chapter 11 on April 26,
2004. In connection with this proposed purchase, the Company plans to assume
certain obligations of DDI under facility and operating leases that are used in
conjunction with the operations that the Company is proposing to purchase. The
Company may offer to purchase certain valid, unsecured pre-petition claims to
the extent those claims apply to product sales to the operations that will be
acquired by the Company. In its fiscal year ended September 30, 2003 DDI had
sales of $76 million.

RESULTS 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 ownership as well as other factors.
In
addition to competitive factors, future performance could be subject to economic
downturns, possible rapid changes in applicable technologies, or regulatory
changes. Although relationships with its suppliers are good, the loss of a major supplier
could have a temporary adverse effect on the Company's business, but would not
have a lasting impact since comparable products are available from alternate
sources. 16In addition to competitive factors, future performance could be subject
to economic downturns and possible rapid changes in applicable technologies.

Quarter ended October 3, 2003: Net income forANIXTER INTERNATIONAL INC.

OVERVIEW

In the thirdfirst quarter of 2003
was $11.32004, the Company saw net income, inclusive of an
extraordinary gain of $4.1 million, compared with $11.6increase by $7.9 million, foror 78.3%, on a
15.4% increase in sales from the thirdfirst quarter of 2002.
During the third quarter of 2002, the Company recordedprior year. Sales, gross
profits, operating expense and operating profits, all showed year-on-year
increases from a pretax gain of $1.3
million for the early extinguishment of $53.9 million of its 7% zero coupon
convertible notes and 8% senior notes.

The Company's net sales during the third quarter of 2003 increased 4.3%
to $653.4 million from $626.3 million in the same period in 2002. Net sales by
major geographic market are presented in the following table:

13 WEEKS ENDED
---------------------------
OCTOBER 3, SEPTEMBER 27,
(IN MILLIONS) 2003 2002
---------- -------------

North America $ 518.4 $ 496.5
Europe 88.2 86.2
Asia Pacific and Latin America 46.8 43.6
---------- -------------
$ 653.4 $ 626.3
========== =============

North America net sales for the third quarter of 2003 increased $21.9
million to $518.4 million from the corresponding period of 2002. Pentacon
represents $40.0 million of the increase as they were purchased on September 20,
2002. The sales decline in the remaining business is primarily attributable to
lower sales on integrated supply contracts reflecting a continued soft market
for telecommunication products.

Europe net sales increased $2.0 million in the third quarter 2003 to
$88.2 million from $86.2 million in 2002. Changes in exchange rates increased
Europe's reported net sales by approximately $8.1 million. The decrease in local
currency sales reflects the continued weak economic conditions in many of the
major countries.

Asia Pacific and Latin America net sales increased $3.2 million, or
7.3%, from the third quarter of 2002, reflecting an overall improvement in
average daily volume from new customer acquisitions. The overall net impact of
the changes in exchange rates on Asia Pacific and Latin America was minimal.

Operating income increased to $23.3 million in 2003 from $23.1 million
in the third quarter of 2002. Operating income by major geographic market is
presented in the following table:

13 WEEKS ENDED
----------------------------
OCTOBER 3, SEPTEMBER 27,
(IN MILLIONS) 2003 2002
---------- -------------

North America $ 20.2 $ 23.8
Europe 2.6 (0.3)
Asia Pacific and Latin America 0.5 (0.4)
---------- -------------
$ 23.3 $ 23.1
========== =============

North America operating income for the third quarter of 2003 declined
15.1% from the corresponding period in 2002. The third quarter of 2003 includes
$1.4 million of operating income of Pentacon. The net decrease is due to a
decline in sales to telecom-related original equipment manufacturers. Gross
margins increased to 24.2% in the third quarter of 2003 from 23.8% from the same
period in 2002. The increase is primarily due to the lower percentage of
contract sales to telecom original equipment manufacturers in 2003, which have
lower gross margins. Such sales represented 9.6% of North America sales in 2003
as compared to 14.4% for the third quarter of 2002. In addition, Pentacon added
40 basis points to the gross margin in 2003. Operating expenses increased $11.1
million from the third quarter of 2002. Pentacon added $10.5 million in
operating expenses in 2003. As a result, operating expenses increased $0.6
million from the third quarter of 2002, excluding the impactcombination of the acquisition of Pentacon. The slight increaseWalters Hexagon in September
of 2003, exchange rate differences related to the weaker US dollar and combined
unit growth and commodity price driven price increases. Other expenses reflects higher pension, healthcare
and insurance costs, partially offset by a reductionincreased
in variable costs
associated with the declinecurrent year due to larger foreign exchange losses, which in sales. Despite higher gross margins, operating
income margin decreased to 3.9% from 4.8% in 2002, primarily as alarge part
were the result of lower sales and higher fixed costs noted above. The additionthe February 2004 devaluation of Pentacon reduced
the operating income margin in 2003 by 10 basis points.

Europe operating income increased $2.9 million to $2.6Venezuelan Bolivar.
Foreign exchange losses totaled $3.1 million in the thirdfirst quarter of 2003 fromthis year.
In the prior year, other expenses included a $0.3loss of $0.4 million loss in 2002. Europe's gross margins
increased from 24.6% in 2002 to 27.2% in 2003. The improvement is primarily duerelated to the
weaker U.S. dollar making U.S. sourced inventory more price competitiveearly retirement of debt and a reduction in the provision for inventory obsolescence. Operating income
margin for the third quarterwrite-off of 2003 was 2.8% compared to an operating loss
margin of 0.4% in 2002. The operating income margin increase is a result of
higher sales and gross margin percentage. Exchange rate changes had minimal
impact on operating income.

Asia Pacific and Latin America operating income increased to $0.5
million in the third quarter of 2003, from a $0.4 million loss in 2002. The
improvement reflects tight expense controls and improvement in the
collectibility of accounts receivable. Exchange rate changes had a minimal
impact on operating income.

Other, net (expense) includes the following:

13 WEEKS ENDED
--------------------------------
OCTOBER 3, SEPTEMBER 27,
(IN MILLIONS) 2003 2002
----------- -------------

Accounts receivable securitization $ (0.6) $ (0.6)
Foreign exchange 0.4 (0.2)
Gain (loss) on the cash surrender value
of life insurance policies 0.3 (1.0)
Loss on sale of fixed assets (0.1) -
Other - (0.2)
---------- -------------
$ - $ (2.0)
========== =============

The consolidated tax provision increased to $8.8 million in 2003 from
$7.7 million in the third quarter of 2002, due to higher pre-tax earnings and an
increase in the Company's effective tax rate. The third quarter of 2003
effective tax rate is 43.8% compared to 40.0% in 2002. The increase in the
effective tax rate is primarily a result of an increase in losses in certain
foreign entities of which an income tax benefit cannot be recorded.

39 weeks ended October 3, 2003: Net income for the 39 weeks ended
October 3, 2003 was $28.8 million compared with $32.9 million for the 39 weeks
ended September 27, 2002. The company recorded a pretax loss of $6.2 million in
2003 for the early extinguishment of $63.5 million of its 7% zero coupon notes
and debt issuance costs associated
with the cancellation of $115.0 million of itsthe available revolving credit
facility. In 2002,The Company's effective tax rate dropped to 39.0% from 42.0% in the
Company recordedyear ago quarter as a pretaxresult of a change in the mix of income and losses by
country as compared to country level net operating loss positions. The
extraordinary gain was the result of $0.3 million formonies received from an escrow account in
connection with the early extinguishment1983 bankruptcy of $90.7 million of its 7%
zero coupon notes and $10.6 million of its 8% senior notes.Itel Corporation, the predecessor to the
Company.

CONSOLIDATED RESULTS OF OPERATIONS

13 WEEKS ENDED
-----------------------------
APRIL 2, APRIL 4, PERCENT
2004 2003 CHANGE
-------- -------- -------
(IN MILLIONS)

Net sales .......................... $764.2 $662.2 15.4%
Gross profit ....................... $182.7 $160.8 13.6%
Operating expenses ................. $153.7 $138.2 11.2%
Operating income ................... $ 29.0 $ 22.6 28.2%

Net Sales: The Company's net sales during the 39 weeks ended October 3, 2003first quarter of 2004
increased 5.5%15.4% to $1,960.4$764.2 million from $1,858.3$662.2 million in the same period in
2002. Net2003. The acquisition of Walters Hexagon in September 2003, along with favorable
effects from changes in exchange rates, accounted for $49.3 million of the
increase. Excluding the acquisition of Hexagon and the effects from changes in
exchange rates, the Company's net sales by major geographic market are presentedincreased 8.0% during the 13 weeks ended
April 2, 2004 from the same period in 2003. The increase in net sales was due to
improved economic conditions, commodity driven price increases and an increase
in project business.

Gross Margins: Gross margins decreased to 23.9% in the following table:first quarter of
2004 from 24.3% in the corresponding period in 2003. The decrease was a result
of an increase in larger capital projects during the first quarter of 2004, as
compared to the first quarter of 2003. Due to excess capacity in the industry,
pricing on these projects were extremely competitive, which reduced gross
margins.

Operating Income: As a result of higher sales, operating margins were 3.8%
for the first quarter of 2004 as compared to 3.4% in the first quarter of 2003.
Operating expenses increased $15.5 million in the first quarter 2004 from the
corresponding period in 2003. The Walters Hexagon acquisition increased
operating expenses by $6.1 million, while changes in exchange rates increased
operating expenses by $4.8 million. Excluding the above, operating expenses
increased $4.6 million, or 3.3%, primarily due to variable costs associated with
higher sales volumes and increases in healthcare costs, pension costs and costs
associated with additional restricted stock grants.

Interest Expense: Consolidated interest expense decreased to $3.0 million
in the first quarter of 2004 from $3.4 million in 2003. Interest expense
decreased due to a reduction in the average cost of borrowings. The average
long-term debt balance was $241.1 million and $212.9 million for the first
quarter of 2004 and 2003, respectively. The average interest rate for the first
quarter of 2004 and 2003, was 5.0% and 6.3%, respectively.

ANIXTER INTERNATIONAL INC.

Other, net income (expense):

3913 WEEKS ENDED
----------------------------
OCTOBER 3, SEPTEMBER 27,
(IN MILLIONS)----------------------
APRIL 2, APRIL 4,
2004 2003
2002
---------- -------------------- --------
(MILLIONS)

North AmericaAccounts receivable securitization ... $ 1,548.30.2 $ 1,476.9
Europe 276.0 255.4
Asia Pacific and Latin America 136.1 126.0
---------- -------------(1.1)
Foreign exchange ..................... (3.1) --
Other ................................ (0.2) (0.2)
------ -------
$ 1,960.4(3.1) $ 1,858.3
========== =============(1.3)
====== =======

The accounts receivable securitization program had income of $0.2 million
for the 13 weeks ended April 2, 2004, compared to $1.1 million of net expenses
in 2003. The reduction in net expenses was primarily a result of reduced sales
of net accounts receivable to ARC which are sold at a 2.12% discount.

Foreign exchange had a net loss of $3.1 million in the 13 weeks ended
April 2, 2004. A significant portion of the net loss resulted from the February
2004 devaluation of the Venezuelan Bolivar.

Income Taxes: The consolidated tax provision increased to $8.9 million in
first quarter of 2004 from $7.3 million in the first quarter of 2003, primarily
due to an increase in income before taxes and extraordinary gain. The 2004
effective tax rate is 39.0% compared to 42.0% in 2003. The decrease in the
effective tax rate is primarily due to a change in the mix of foreign income and
losses by country as compared to country level net operating loss positions. The
change in tax rate increased income before extraordinary gain and net income by
$0.7 million or $0.02 per diluted share.

NORTH AMERICA RESULTS OF OPERATIONS

13 WEEKS ENDED
---------------------------------
APRIL 2, APRIL 4, PERCENT
2004 2003 CHANGE
-------- -------- -------
(IN MILLIONS)

Net sales .......................... $571.1 $518.1 10.2%
Gross profit ....................... $134.3 $125.6 6.9%
Operating expenses ................. $111.3 $106.5 4.4%
Operating income ................... $ 23.0 $ 19.1 20.4%

Net Sales: When compared to the corresponding period in 2002,2003, North
America net sales for the 3913 weeks ended October 3, 2003April 2, 2004 increased $71.4 million, or 4.8%,10.2% to $1,548.3$571.1
million. The acquisition of Pentacon on September 20, 2002
represents $135.1combined Industrial Wire and Cable and North America Enterprise
Cabling sales increased $42.4 million of the increase. The sales decline in the remaining
businessfirst quarter of 2004 as compared
to the first quarter of 2003, due to improved economic conditions and price
increases driven by higher copper and data cabling prices. In the OEM supply
market, the Pentacon operations reported a 8.7% increase in sales on a
combination of improved customer demand and new contract additions. Sales to
telecom original equipment manufacturers showed their first year-on-year
increase in over two years.

Gross Margins: Gross margins decreased to 23.5% in the first quarter of
2004 from 24.3% for the same period in 2003. The decrease is primarily due to a
decreasehigher percentage of $68.3capital projects, which had lower gross margins due to
excess capacity in the industry.

Operating Income: Operating expenses increased $4.8 million in the first
quarter of 2004 from the corresponding period in 2003. The increase is primarily
due to variable costs associated with the increase in sales volume and higher
pension, healthcare and costs related to telecom
related original equipment manufacturers. Dailyadditional restricted stock grants.
Primarily as a result of higher daily sales levels forand continued tight expense
controls, North America operating margins increased to 4.0% in the remainderfirst quarter
of 2004 from 3.7% in the business have remained steady.same period in 2003.

ANIXTER INTERNATIONAL INC.

EUROPE RESULTS OF OPERATIONS

13 WEEKS ENDED
-----------------------------------
APRIL 2, APRIL 4, PERCENT
2004 2003 CHANGE
-------- -------- -------
(IN MILLIONS)

Net sales .......................... $140.2 $ 97.9 43.2%
Gross profit ....................... $ 36.6 $ 25.8 42.1%
Operating expenses ................. $ 32.1 $ 22.8 40.9%
Operating income ................... $ 4.5 $ 3.0 50.8%

Net Sales: Europe net sales increased 8.1%43.2% in the first quarter of 2004
to $276.0$140.2 million from $255.4$97.9 million in the first quarter of 2003, including a
$38.1$14.6 million favorable effect from changes in exchange rates.rates and an increase of
$23.7 million as a result of the acquisition of Walters Hexagon. The decreaseincrease in
local currency sales of 4.0% reflects an increase in economic activity in
Europe.

Gross Margins: Europe's gross margins decreased to 26.1% in the continued weak economic conditionsfirst
quarter of 2004 from 26.3% in manythe same period in 2003. The slight decrease is
primarily due to a large project at reduced margins. Walters Hexagon added 30
basis points to Europe's gross margins in the first quarter of 2004.

Operating Income: Compared to the major countries.

Asiafirst quarter of 2003, Europe operating
expenses increased 40.9%, or $9.3 million, to $32.1 million in the first quarter
of 2004. Included in the increase are $6.1 million of expenses related to
Walters Hexagon and $3.0 million for changes in exchange rates. Excluding Waters
Hexagon and the exchange rate impact, operating expenses were $0.2 million or
1.1% higher than 2003. Tight expense controls resulted in the operating margin
increasing from 3.0% in 2003 to 3.2% in 2004. Exchange rate changes had a $0.6
million favorable impact on operating income.

EMERGING MARKETS RESULTS OF OPERATIONS

13 WEEKS ENDED
--------------------------------
APRIL 2, APRIL 4, PERCENT
2004 2003 CHANGE
-------- -------- -------
(IN MILLIONS)

Net sales .......................... $ 52.9 $ 46.2 14.7%
Gross profit ....................... $ 11.8 $ 9.4 25.0%
Operating expenses ................. $ 10.3 $ 8.9 15.5%
Operating income ................... $ 1.5 $ 0.5 182.4%

Net Sales: Emerging Markets (Asia Pacific and Latin AmericaAmerica) net sales
were up 8.0%14.7%, or $10.1to $52.9 million in the first quarter of 2004, from $46.2 million
in the 39 weeks ended September 27, 2002,first quarter of 2003, including a $1.9$1.6 million unfavorablefavorable impact from
changes in exchange rates. The increase reflects an overall improvement in average daily volumethe
economic environment and stronger market penetration.

Gross Margins: During the first quarter of 2004, Emerging Markets gross
margins increased to 22.2% from new customers and sales to
telecom related original equipment manufacturers20.4% in Asia Pacific.

Operating income for the 39 weeks ended October 3, 2003 increased 1.6%,
or $1.1 million, from $66.1 million in the 39 weeks ended September 27, 2002.
Operating income (loss) by major geographic market is presented in the following
table:

39 WEEKS ended
---------------------------
OCTOBER 3, SEPTEMBER 27,
(IN MILLIONS) 2003 2002
---------- -------------

North America $ 57.5 $ 62.8
Europe 8.5 4.6
Asia Pacific and Latin America 1.2 (1.3)
---------- -------------
$ 67.2 $ 66.1
========== =============

North America operating income decreased 8.5% for the 39 weeks ended
October 3, 2003 compared to the corresponding period in 2002. The 39 weeks ended
October 3, 2003 includes the operating income of Pentacon of $3.9 million. The
39 weeks ended September 27, 2002 includes the reversal of $0.9 million of
excess restructuring accruals. The decrease from the corresponding period in
2002 is due to a decline in sales to telecom related original equipment
manufacturers. Gross margins increased to 24.2% in 2003 from 23.2% for the same
period in 2002. The increase is primarily due to a lower percentage of contract
sales to telecom related original equipment manufacturers in 2003, which have
lower gross margins, and the addition of higher gross margin Pentacon sales.
Pentacon added 50 basis points to North America gross margins in 2003. Sales to
telecom related original equipment manufacturers represented 10.1% of North
America sales in 2003 as compared to 15.3% in 2002. Operating expenses increased
$37.6 million for the 39 weeks ended October 3, 2003 from the corresponding
period in 2002, which are attributable to Pentacon. In addition, the 2002
operating expense includes the reversal of $0.9 million of excess restructuring
accruals. Excluding Pentacon and the reversal of excess restructuring accruals,
operating expenses decreased slightly from 2002. The reduction in variable costs
associated with the reduced sales levels more than offset higher pension,
healthcare and insurance costs. Primarily as a result of lower sales, North
America operating margins declined to 3.7% in the 39 weeks ended October 3, 2003
from 4.3% in the same period in 2002.

Europe operating income increased 83.6% to $8.5 million for the 39
weeks ended October 3, 2003 from $4.6 million in 2002. Operating income in 2002
includes a $1.4 million restructuring charge. Europe's gross margins increased
to 27.0% from 25.9% in 2002. The
improvement is primarily due to the weaker U.S.
dollar making U.S. sourced inventory more price competitive.increases in Venezuela.

Operating income
margin for the 39 weeks ended October 3, 2003 was 3.1% compared to 1.8% in 2002.
TheIncome: Emerging Markets operating margin increase is a result of the increase in gross margin and a
$1.4 million restructuring charge incurred in 2002, slightly offset by higher
operating expenses primarily due to an increase in compensation related costs.
Operating income increased $1.0 million
from $0.5 million in the first quarter of 2003 due to changes in exchange
rates.

Asia Pacific and Latin America operating income increased $2.5$1.5 million
from a $1.3 million loss in the 39 weeks ended September 27, 2002 to $1.2
millionfirst
quarter of income in 2003.2004. The operating loss in 2002 includes the benefit of
the reversal of excess restructuring accruals of $0.5 million. The $2.5 million improvement reflects the higher sales levels combined with tight expense
controls.and improved
gross margins. Exchange rate changes had a minimal impact on operating income.

Other, net income (expense) includes the following:

39 WEEKS ENDED
---------------------------
OCTOBER 3, SEPTEMBER 27,
(IN MILLIONS) 2003 2002
---------- -------------

Accounts receivable securitization $ (1.7) $ (1.5)
Foreign exchange (1.0) 0.2
(Loss) gain on sale of fixed assets and securities (0.3) 3.3
Gain (loss) on the cash surrender value
of life insurance policies 1.6 (1.1)
Other 0.7 -
---------- ------------
$ (0.7) $ 0.9
========== ============

The consolidated tax provision decreased to $21.6 million in 2003 from
$21.9 million in 2002 due to lower pre-tax earnings. The 2003 effective tax rate
is 43.0% compared to 40.0% in 2002. The increase in the effective tax rate is
primarily a result of an increase in losses in certain foreign entities of which
an income tax benefit cannot be recorded.

2016

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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 estimated fair market value of the Company's
outstanding fixed rate debt at October 3, 2003, was $215.6 million. If the
interest rates were to increase or decrease by 1%, the fair market value of the
fixed rate debt would decrease or increase by 3.1%. Changes in the market value
of the Company's debt does not affect the reported results of operations unless
the Company is retiring such obligations prior to their maturity. This analysis
did not consider the effects of a changed level of economic activity that could
exist in such an environment and certain other factors. Further, in the event of
a change of this magnitude, management would likely take actions to further
mitigate its exposure to possible changes. However, due to the uncertainty of
the specific actions that would be taken and their possible effects, this
sensitivity analysis assume no changes in the Company's financial structure.ANIXTER INTERNATIONAL INC.

ITEM 4. CONTROLS AND PROCEDURES

The Company maintains a system of disclosure controls and procedures. The
Company's management, including the Chief Executive Officer and Chief Financial
Officer, evaluated the effectiveness of the design and operation of the
Company's disclosure controls and procedures as of October 3, 2003,April 2, 2004, pursuant to
paragraph (b) of Exchange Act Rule 13a-15(e) and 15d-15(e). Based on that
evaluation, the Chief Executive Officer and Chief Financial Officer concluded
that the Company's disclosure controls and procedures are effective in ensuring
that material information required to be filed in this quarterly report has been
made known to them in a timely fashion. There was no change in the Company's
internal control over financial reporting that occurred during the 13 weeks
ended October 3, 2003April 2, 2004 that has materially affected, or is reasonably likely to
materially affect, the Company's internal control over financial reporting.

2117

ANIXTER INTERNATIONAL INC.

PART II. OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

a) Exhibits

(10) Material Contracts.

10.1 Purchase Agreement between Mesirow Realty
Sale-Leaseback, Inc. ("Buyer") and Anixter-Real Estate,
Inc., a subsidiary of the Company ("Seller").

(31) Rule 13a - 14(a) / 15d - 14(a) Certifications.

31.1 Robert W. Grubbs, President and Chief Executive Officer,
Certification Pursuant to Section 302, of the
Sarbanes-Oxley Act of 2002.

31.2 Dennis J. Letham, Senior Vice President-Finance and
Chief Financial Officer, Certification Pursuant to
Section 302, of the Sarbanes-Oxley Act of 2002.

(32) Section 1350 Certifications.

32.1 Robert W. Grubbs, President and Chief Executive Officer,
Certification Pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.

32.2 Dennis J. Letham, Senior Vice President-Finance and
Chief Financial Officer, Certification Pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley of Act of 2002.

b) Reports on Form 8-K8-K.

On July 8, 2003, the Company filed a Current Report on Form
8-K under Item 5 "Other Events" and Item 7 "Financial Statements, Pro
Forma Financial Information and Exhibits" announcing that it had
received $125.0 million (gross proceeds exclusive of the initial
purchase's over allotment option) from the placement under Rule 144a of
30-year zero coupon senior notes convertible into shares of the
Company's common stock.

On July 30, 2003,February 6, 2004, the Company filed a Current Report on Form 8-K
under Item 7 "Financial Statements, Pro Forma Financial Information and
Exhibits" and Item 12 "Results of Operation and Financial Condition"
reporting its results for the fiscal quarter ended July 4,
2003.

22January 2, 2004.

SIGNATURES

PURSUANT 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.

ANIXTER INTERNATIONAL INC.

November 12, 2003SIGNATURES

Pursuant 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.

ANIXTER INTERNATIONAL INC.
May 11, 2004

By: /s/ Robert W. Grubbs
---------------------------------------------------------------
Robert W. Grubbs
President and Chief Executive Officer

November 12, 2003May 11, 2004

By: /s/ Dennis J. Letham
-------------------------------------------------------------
Dennis J. Letham
Senior Vice President - Finance
and Chief Financial Officer

2319