From the 9,800-word transcript of Anixter’s Q4 conference call with analysts, found here:
ON MARKET SHARE
“Based on the conversations we have with our suppliers and supported by the data we see in the market, it is our view that we maintain share on our addressable data infrastructure market in the current quarter in most of our markets.” — from Bob Eck, the boss.
ON THE DATACOM BUSINESS
“While we have been surprised by the slow pace of recovery in our communications infrastructure market, the largest portion of our total business, we are seeing more indications that this business is improving in all of our geographies. We are encouraged by signs that capital spending, one of the best macro indicators of our business, may be picking up.
“Our Wire & Cable segment, which is comprised of steady day-to-day industrial and OEM business and an industrial project business that is more uneven on a quarter-to-quarter basis, had a solid 2013 after a record 2012. Based on our backlog and pipeline of activity, we believe we are on track for solid organic growth in this business in 2014.” — Eck.
HOW THE COMPANY DID SO WELL (bottom-line-wise):
” . . . with 19% operating leverage in the quarter here for Q4, that was the highest operating leverage we’ve delivered since Q2 of 2010. And was really fueled by a disproportionately high level of growth in that OEM Supply business. As you’ll remember, that’s our highest gross margin business. And with the very high growth rates — they had over 20%, they were able to leverage the OpEx in their business very significantly:” — Ted Dosch, CFO.
HOW THINGS WORK IN DISTRIBUTION — a bit of insider insight
“In the Enterprise and Wire & Cable businesses, we were softer in gross margin in Q4 than you might normally expect, because we normally get a bigger vendor rebate impact in the fourth quarter, and we did not have a meaningful vendor rebate impact this year in the fourth quarter. So those gross margins should be sustainable as we roll forward. Product mix will affect that, to some degree, as will geographic mix.” — Eck.
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