Anixter International Inc. Financial Statement Analysis
ANIXTER INTERNATIONAL INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
NOTE 3. RESTRUCTURING CHARGES
The Company considers restructuring activities to be programs whereby Anixter fundamentally changes its operations,
such as closing and consolidating facilities, reducing headcount and realigning operations in response to changing market
conditions. The following table summarizes activity related to liabilities associated with restructuring activities:
Restructuring Activity
Q2 2018
Plan
Employee-
Related Costs (a)
Facility Exit and
Other Costs (b)
Total
Balance at December 29, 2017
-
$
Charges
Payments and other
9.6
0.5
$
10.1
(2.9)
(0.3)
(3.2)
Balance at December 28, 2018
6.7
$
0.2 $
6.9
Payments and other
(4.9)
(0.1)
(5.0)
Balance at January 3, 2020
$
1.8 $
0.1 $
1.9
(a)
Employee-related costs primarily consist of severance benefits provided to employees who have been involuntarily
terminated.
(b)
Facility exit and other costs primarily consist of lease termination costs.
Q2 2018 Restructuring Plan
In the second quarter of 2018, the Company recorded a pre-tax charge of $2.1 million, $1.3 million and $1.1 million in its
Network & Security Solutions ("NSS"), Electrical & Electronic Solutions ("EES") and Utility Power Solutions ("UPS")
segments, respectively, and an additional $5.4 million at its corporate headquarters, primarily for severance-related expenses
associated with a reduction of approximately 260 positions. In the third quarter of 2018, the Company recorded an additional
$0.2 million charge at its corporate headquarters. The $10.1 million charge related to the second quarter 2018 plan primarily
reflects actions related to facilities consolidation, systems integration and back office functions. This charge was included in
"Operating expenses" in the Company's Consolidated Statement of Income for fiscal year 2018. The majority of the balance
included in accrued expenses of $1.9 million as of January 3, 2020 is expected to be paid by the first half of 2020.
NOTE 4. LEASES
The Company adopted ASU 2016-02, Leases, as of December 29, 2018, using the modified retrospective approach. Prior
year financial statements were not recast under the new standard and, therefore, certain prior period amounts have been
disclosed in conformity with prior year presentation.
Substantially all of Anixter's office and warehouse facilities are leased under operating leases. The Company also leases
certain equipment and vehicles primarily as operating leases. A certain number of Anixter's leases are long-term operating
leases and expire at various dates through 2038. Lease costs are included within "Operating expenses" in the Company's
Consolidated Statements of Income and were as follows:
(In millions)
Lease cost
Operating lease cost
Variable lease cost
Short-term lease cost
Total lease cost
52
Year Ended
January 3, 2020
79.0
22.2
1.2
$
102.4View entire presentation