| DEBT
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Three Months Ended | Nine Months Ended | |||||||||||||||
October 3, 2014 | September 27, 2013 | October 3, 2014 | September 27, 2013 | |||||||||||||
Other, net: | ||||||||||||||||
Foreign exchange | $ | (2.4 | ) | $ | (2.5 | ) | $ | (14.4 | ) | $ | (7.2 | ) | ||||
Cash surrender value of life insurance policies | (0.3 | ) | 0.5 | 0.5 | (0.2 | ) | ||||||||||
Other | 0.2 | 0.4 | (1.5 | ) | 0.1 | |||||||||||
Total other, net | $ | (2.5 | ) | $ | (1.6 | ) | $ | (15.4 | ) | $ | (7.3 | ) |
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Cash | $ | 11.6 | |||
Current assets, net | 197.4 | ||||
Property, plant and equipment | 2.7 | ||||
Goodwill | 275.6 | ||||
Intangible assets | 166.8 | ||||
Non-current assets | — | ||||
Current liabilities | (144.0 | ) | |||
Non-current liabilities | (81.4 | ) | |||
Total purchase price | $ | 428.7 |
Average useful life (in years) | Fair value | ||||
Customer relationships | 11-18 | $ | 120.6 | ||
Exclusive supplier agreement | 21 | 23.2 | |||
Trade names | Indefinite | 10.6 | |||
Tri-Ed trade names | 4 | 9.2 | |||
Non-compete agreements | 4-5 | 3.2 | |||
Total intangible assets | $ | 166.8 |
Three Months Ended | Nine Months Ended | |||||||||||||||
(In millions, except per share amounts) | October 3, 2014 | September 27, 2013 | October 3, 2014 | September 27, 2013 | ||||||||||||
Net sales | $ | 1,759.5 | $ | 1,700.0 | $ | 5,196.1 | $ | 5,050.9 | ||||||||
Net income | $ | 57.8 | $ | 55.0 | $ | 160.5 | $ | 144.8 | ||||||||
Income per share: | ||||||||||||||||
Basic | $ | 1.75 | $ | 1.67 | $ | 4.86 | $ | 4.42 | ||||||||
Diluted | $ | 1.73 | $ | 1.66 | $ | 4.82 | $ | 4.36 |
October 3, 2014 | January 3, 2014 | |||||||||||||||||
Average useful life (in years) | Gross carrying amount | Accumulated amortization | Gross carrying amount | Accumulated amortization | ||||||||||||||
Customer relationships | 6-20 | $ | 214.2 | $ | (47.7 | ) | $ | 93.8 | $ | (42.4 | ) | |||||||
Exclusive supplier agreement | 21 | 23.2 | — | — | — | |||||||||||||
Trade names | 3-10 | 15.8 | (4.1 | ) | 6.6 | (3.5 | ) | |||||||||||
Trade names | Indefinite | 10.6 | — | — | — | |||||||||||||
Non-compete agreements | 4-5 | 5.2 | (2.1 | ) | 2.0 | (2.0 | ) | |||||||||||
Intellectual property | 10 | 1.6 | (0.9 | ) | 1.7 | (0.9 | ) | |||||||||||
Total | $ | 270.6 | $ | (54.8 | ) | $ | 104.1 | $ | (48.8 | ) |
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October 3, 2014 | January 3, 2014 | ||||||
Long-term debt: | |||||||
Senior notes due 2021 | $ | 400.0 | $ | — | |||
Senior notes due 2019 | 350.0 | 350.0 | |||||
Senior notes due 2015 | 200.0 | 200.0 | |||||
Term loan | 200.0 | — | |||||
Accounts receivable securitization facility | 75.0 | 145.0 | |||||
Revolving lines of credit | 13.0 | 101.5 | |||||
Senior notes due 2014 | — | 32.1 | |||||
Other | 3.9 | 7.4 | |||||
Total long-term debt | $ | 1,241.9 | $ | 836.0 |
• | The consolidated leverage ratio maximum leverage increased from 3.25 to 3.50. |
• | The leverage ratio maintenance test with respect to the Senior notes due 2015 increased from 2.75 to 3.00. |
• | The incremental facility was reset to $200 million after giving effect to the term loan. |
• | The liquidity termination date of the program will be May 2017 (formerly May 2015). |
• | The commitments are split 50%/50% (formerly 57-1/3% from J.P. Morgan and 42-2/3% from SunTrust). |
• | The purchasers have the option to delay funding by 35 days. |
• | Chariot replaced J.P. Morgan as a Financial Institution and a committed purchaser; J.P. Morgan will continue to have a liquidity agreement in place with Chariot. |
• | One month LIBOR has been replaced by three month LIBOR. |
• | The renewed program carries an all-in drawn funding cost of LIBOR plus 80 basis points (previously LIBOR plus 95 basis points). |
• | Unused capacity fees decreased from 47.5 to 57.5 basis points to 40 to 50 basis points depending on utilization. |
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Three Months Ended | |||||||||||||||||||||||
Domestic (a) | Foreign | Total | |||||||||||||||||||||
October 3, 2014 | September 27, 2013 | October 3, 2014 | September 27, 2013 | October 3, 2014 | September 27, 2013 | ||||||||||||||||||
Service cost | $ | 1.2 | $ | 2.2 | $ | 1.4 | $ | 1.6 | $ | 2.6 | $ | 3.8 | |||||||||||
Interest cost | 2.8 | 2.3 | 2.7 | 2.3 | 5.5 | 4.6 | |||||||||||||||||
Expected return on plan assets | (3.5 | ) | (2.9 | ) | (3.1 | ) | (2.6 | ) | (6.6 | ) | (5.5 | ) | |||||||||||
Net amortization (b) | (0.6 | ) | 0.7 | 0.3 | 0.4 | (0.3 | ) | 1.1 | |||||||||||||||
Net periodic (benefit) cost | $ | (0.1 | ) | $ | 2.3 | $ | 1.3 | $ | 1.7 | $ | 1.2 | $ | 4.0 |
Nine Months Ended | |||||||||||||||||||||||
Domestic (a) | Foreign | Total | |||||||||||||||||||||
October 3, 2014 | September 27, 2013 | October 3, 2014 | September 27, 2013 | October 3, 2014 | September 27, 2013 | ||||||||||||||||||
Service cost | $ | 3.6 | $ | 6.4 | $ | 4.4 | $ | 5.0 | $ | 8.0 | $ | 11.4 | |||||||||||
Interest cost | 8.1 | 7.1 | 8.1 | 7.0 | 16.2 | 14.1 | |||||||||||||||||
Expected return on plan assets | (10.4 | ) | (8.8 | ) | (9.5 | ) | (7.8 | ) | (19.9 | ) | (16.6 | ) | |||||||||||
Net amortization (b) | (1.7 | ) | 2.3 | 0.9 | 1.2 | (0.8 | ) | 3.5 | |||||||||||||||
Net periodic (benefit) cost | $ | (0.4 | ) | $ | 7.0 | $ | 3.9 | $ | 5.4 | $ | 3.5 | $ | 12.4 |
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October 3, 2014 | January 3, 2014 | ||||||
(In millions) | |||||||
Assets: | |||||||
Current assets | $ | 2,676.0 | $ | 2,275.1 | |||
Property, equipment and capital leases, net | 129.7 | 115.6 | |||||
Goodwill | 618.4 | 342.1 | |||||
Other assets | 317.4 | 139.1 | |||||
$ | 3,741.5 | $ | 2,871.9 | ||||
Liabilities and Stockholder’s Equity: | |||||||
Current liabilities | $ | 1,142.0 | $ | 898.9 | |||
Subordinated notes payable to parent | 1.0 | 1.0 | |||||
Long-term debt | 1,256.3 | 851.3 | |||||
Other liabilities | 173.4 | 93.0 | |||||
Stockholder’s equity | 1,168.8 | 1,027.7 | |||||
$ | 3,741.5 | $ | 2,871.9 |
Three Months Ended | Nine Months Ended | ||||||||||||||
October 3, 2014 | September 27, 2013 | October 3, 2014 | September 27, 2013 | ||||||||||||
(In millions) | |||||||||||||||
Net sales | $ | 1,666.6 | $ | 1,557.6 | $ | 4,776.4 | $ | 4,628.0 | |||||||
Operating income | $ | 95.5 | $ | 93.9 | $ | 276.4 | $ | 263.3 | |||||||
Income before income taxes | $ | 81.6 | $ | 80.8 | $ | 227.7 | $ | 221.6 | |||||||
Net income | $ | 53.2 | $ | 50.3 | $ | 155.9 | $ | 140.5 | |||||||
Comprehensive income | $ | 17.9 | $ | 62.3 | $ | 128.8 | $ | 132.1 |
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Third Quarter of 2014 | ECS | W&C | Fasteners | Total | |||||||||||
Net sales | $ | 884.4 | $ | 553.6 | $ | 228.6 | $ | 1,666.6 | |||||||
Operating income | $ | 45.0 | $ | 40.4 | $ | 8.6 | $ | 94.0 |
Third Quarter of 2013 | ECS | W&C | Fasteners | Total | |||||||||||
Net sales | $ | 804.3 | $ | 528.6 | $ | 224.7 | $ | 1,557.6 | |||||||
Operating income | $ | 42.5 | $ | 41.5 | $ | 8.4 | $ | 92.4 |
Nine Months of 2014 | ECS | W&C | Fasteners | Total | |||||||||||
Net sales | $ | 2,461.9 | $ | 1,593.3 | $ | 721.2 | $ | 4,776.4 | |||||||
Operating income | $ | 125.1 | $ | 113.4 | $ | 33.6 | $ | 272.1 |
Nine Months of 2013 | ECS | W&C | Fasteners | Total | ||||||||||||
Net sales | $ | 2,363.2 | $ | 1,577.0 | $ | 687.8 | $ | 4,628.0 | ||||||||
Operating income | $ | 119.3 | $ | 120.9 | $ | 19.0 | $ | 259.2 |
Reportable Segments | |||||||||||||||
ECS (a) | W&C (b) | Fasteners | Total | ||||||||||||
Balance at January 3, 2014 | $ | 162.5 | $ | 179.6 | $ | — | $ | 342.1 | |||||||
Acquisition related | 275.6 | 1.4 | — | 277.0 | |||||||||||
Foreign currency translation | 1.0 | (1.7 | ) | — | (0.7 | ) | |||||||||
Balance at October 3, 2014 | $ | 439.1 | $ | 179.3 | $ | — | $ | 618.4 |
(a) | In the third quarter of 2014, we recorded goodwill related to the preliminary purchase price allocation for the acquisition of Tri-Ed. See Note 2. "Business Combination". |
(b) | In the first quarter of 2014, we recorded an immaterial reclassification between goodwill and deferred tax liability related to the purchase price allocation for the acquisition of Jorvex, S.A. |
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Three Months Ended | Nine Months Ended | |||||||||||||||
October 3, 2014 | September 27, 2013 | October 3, 2014 | September 27, 2013 | |||||||||||||
Other, net: | ||||||||||||||||
Foreign exchange | $ | (2.4 | ) | $ | (2.5 | ) | $ | (14.4 | ) | $ | (7.2 | ) | ||||
Cash surrender value of life insurance policies | (0.3 | ) | 0.5 | 0.5 | (0.2 | ) | ||||||||||
Other | 0.2 | 0.4 | (1.5 | ) | 0.1 | |||||||||||
Total other, net | $ | (2.5 | ) | $ | (1.6 | ) | $ | (15.4 | ) | $ | (7.3 | ) |
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Three Months Ended | Nine Months Ended | |||||||||||||||
October 3, 2014 | September 27, 2013 | October 3, 2014 | September 27, 2013 | |||||||||||||
Other, net: | ||||||||||||||||
Foreign exchange | $ | (2.4 | ) | $ | (2.5 | ) | $ | (14.4 | ) | $ | (7.2 | ) | ||||
Cash surrender value of life insurance policies | (0.3 | ) | 0.5 | 0.5 | (0.2 | ) | ||||||||||
Other | 0.2 | 0.4 | (1.5 | ) | 0.1 | |||||||||||
Total other, net | $ | (2.5 | ) | $ | (1.6 | ) | $ | (15.4 | ) | $ | (7.3 | ) |
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Cash | $ | 11.6 | |||
Current assets, net | 197.4 | ||||
Property, plant and equipment | 2.7 | ||||
Goodwill | 275.6 | ||||
Intangible assets | 166.8 | ||||
Non-current assets | — | ||||
Current liabilities | (144.0 | ) | |||
Non-current liabilities | (81.4 | ) | |||
Total purchase price | $ | 428.7 |
Average useful life (in years) | Fair value | ||||
Customer relationships | 11-18 | $ | 120.6 | ||
Exclusive supplier agreement | 21 | 23.2 | |||
Trade names | Indefinite | 10.6 | |||
Tri-Ed trade names | 4 | 9.2 | |||
Non-compete agreements | 4-5 | 3.2 | |||
Total intangible assets | $ | 166.8 |
Three Months Ended | Nine Months Ended | |||||||||||||||
(In millions, except per share amounts) | October 3, 2014 | September 27, 2013 | October 3, 2014 | September 27, 2013 | ||||||||||||
Net sales | $ | 1,759.5 | $ | 1,700.0 | $ | 5,196.1 | $ | 5,050.9 | ||||||||
Net income | $ | 57.8 | $ | 55.0 | $ | 160.5 | $ | 144.8 | ||||||||
Income per share: | ||||||||||||||||
Basic | $ | 1.75 | $ | 1.67 | $ | 4.86 | $ | 4.42 | ||||||||
Diluted | $ | 1.73 | $ | 1.66 | $ | 4.82 | $ | 4.36 |
October 3, 2014 | January 3, 2014 | |||||||||||||||||
Average useful life (in years) | Gross carrying amount | Accumulated amortization | Gross carrying amount | Accumulated amortization | ||||||||||||||
Customer relationships | 6-20 | $ | 214.2 | $ | (47.7 | ) | $ | 93.8 | $ | (42.4 | ) | |||||||
Exclusive supplier agreement | 21 | 23.2 | — | — | — | |||||||||||||
Trade names | 3-10 | 15.8 | (4.1 | ) | 6.6 | (3.5 | ) | |||||||||||
Trade names | Indefinite | 10.6 | — | — | — | |||||||||||||
Non-compete agreements | 4-5 | 5.2 | (2.1 | ) | 2.0 | (2.0 | ) | |||||||||||
Intellectual property | 10 | 1.6 | (0.9 | ) | 1.7 | (0.9 | ) | |||||||||||
Total | $ | 270.6 | $ | (54.8 | ) | $ | 104.1 | $ | (48.8 | ) |
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October 3, 2014 | January 3, 2014 | ||||||
Long-term debt: | |||||||
Senior notes due 2021 | $ | 400.0 | $ | — | |||
Senior notes due 2019 | 350.0 | 350.0 | |||||
Senior notes due 2015 | 200.0 | 200.0 | |||||
Term loan | 200.0 | — | |||||
Accounts receivable securitization facility | 75.0 | 145.0 | |||||
Revolving lines of credit | 13.0 | 101.5 | |||||
Senior notes due 2014 | — | 32.1 | |||||
Other | 3.9 | 7.4 | |||||
Total long-term debt | $ | 1,241.9 | $ | 836.0 |
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Three Months Ended | |||||||||||||||||||||||
Domestic (a) | Foreign | Total | |||||||||||||||||||||
October 3, 2014 | September 27, 2013 | October 3, 2014 | September 27, 2013 | October 3, 2014 | September 27, 2013 | ||||||||||||||||||
Service cost | $ | 1.2 | $ | 2.2 | $ | 1.4 | $ | 1.6 | $ | 2.6 | $ | 3.8 | |||||||||||
Interest cost | 2.8 | 2.3 | 2.7 | 2.3 | 5.5 | 4.6 | |||||||||||||||||
Expected return on plan assets | (3.5 | ) | (2.9 | ) | (3.1 | ) | (2.6 | ) | (6.6 | ) | (5.5 | ) | |||||||||||
Net amortization (b) | (0.6 | ) | 0.7 | 0.3 | 0.4 | (0.3 | ) | 1.1 | |||||||||||||||
Net periodic (benefit) cost | $ | (0.1 | ) | $ | 2.3 | $ | 1.3 | $ | 1.7 | $ | 1.2 | $ | 4.0 |
Nine Months Ended | |||||||||||||||||||||||
Domestic (a) | Foreign | Total | |||||||||||||||||||||
October 3, 2014 | September 27, 2013 | October 3, 2014 | September 27, 2013 | October 3, 2014 | September 27, 2013 | ||||||||||||||||||
Service cost | $ | 3.6 | $ | 6.4 | $ | 4.4 | $ | 5.0 | $ | 8.0 | $ | 11.4 | |||||||||||
Interest cost | 8.1 | 7.1 | 8.1 | 7.0 | 16.2 | 14.1 | |||||||||||||||||
Expected return on plan assets | (10.4 | ) | (8.8 | ) | (9.5 | ) | (7.8 | ) | (19.9 | ) | (16.6 | ) | |||||||||||
Net amortization (b) | (1.7 | ) | 2.3 | 0.9 | 1.2 | (0.8 | ) | 3.5 | |||||||||||||||
Net periodic (benefit) cost | $ | (0.4 | ) | $ | 7.0 | $ | 3.9 | $ | 5.4 | $ | 3.5 | $ | 12.4 |
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October 3, 2014 | January 3, 2014 | ||||||
(In millions) | |||||||
Assets: | |||||||
Current assets | $ | 2,676.0 | $ | 2,275.1 | |||
Property, equipment and capital leases, net | 129.7 | 115.6 | |||||
Goodwill | 618.4 | 342.1 | |||||
Other assets | 317.4 | 139.1 | |||||
$ | 3,741.5 | $ | 2,871.9 | ||||
Liabilities and Stockholder’s Equity: | |||||||
Current liabilities | $ | 1,142.0 | $ | 898.9 | |||
Subordinated notes payable to parent | 1.0 | 1.0 | |||||
Long-term debt | 1,256.3 | 851.3 | |||||
Other liabilities | 173.4 | 93.0 | |||||
Stockholder’s equity | 1,168.8 | 1,027.7 | |||||
$ | 3,741.5 | $ | 2,871.9 |
Three Months Ended | Nine Months Ended | ||||||||||||||
October 3, 2014 | September 27, 2013 | October 3, 2014 | September 27, 2013 | ||||||||||||
(In millions) | |||||||||||||||
Net sales | $ | 1,666.6 | $ | 1,557.6 | $ | 4,776.4 | $ | 4,628.0 | |||||||
Operating income | $ | 95.5 | $ | 93.9 | $ | 276.4 | $ | 263.3 | |||||||
Income before income taxes | $ | 81.6 | $ | 80.8 | $ | 227.7 | $ | 221.6 | |||||||
Net income | $ | 53.2 | $ | 50.3 | $ | 155.9 | $ | 140.5 | |||||||
Comprehensive income | $ | 17.9 | $ | 62.3 | $ | 128.8 | $ | 132.1 |
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Third Quarter of 2014 | ECS | W&C | Fasteners | Total | |||||||||||
Net sales | $ | 884.4 | $ | 553.6 | $ | 228.6 | $ | 1,666.6 | |||||||
Operating income | $ | 45.0 | $ | 40.4 | $ | 8.6 | $ | 94.0 |
Third Quarter of 2013 | ECS | W&C | Fasteners | Total | |||||||||||
Net sales | $ | 804.3 | $ | 528.6 | $ | 224.7 | $ | 1,557.6 | |||||||
Operating income | $ | 42.5 | $ | 41.5 | $ | 8.4 | $ | 92.4 |
Nine Months of 2014 | ECS | W&C | Fasteners | Total | |||||||||||
Net sales | $ | 2,461.9 | $ | 1,593.3 | $ | 721.2 | $ | 4,776.4 | |||||||
Operating income | $ | 125.1 | $ | 113.4 | $ | 33.6 | $ | 272.1 |
Nine Months of 2013 | ECS | W&C | Fasteners | Total | ||||||||||||
Net sales | $ | 2,363.2 | $ | 1,577.0 | $ | 687.8 | $ | 4,628.0 | ||||||||
Operating income | $ | 119.3 | $ | 120.9 | $ | 19.0 | $ | 259.2 |
Reportable Segments | |||||||||||||||
ECS (a) | W&C (b) | Fasteners | Total | ||||||||||||
Balance at January 3, 2014 | $ | 162.5 | $ | 179.6 | $ | — | $ | 342.1 | |||||||
Acquisition related | 275.6 | 1.4 | — | 277.0 | |||||||||||
Foreign currency translation | 1.0 | (1.7 | ) | — | (0.7 | ) | |||||||||
Balance at October 3, 2014 | $ | 439.1 | $ | 179.3 | $ | — | $ | 618.4 |
(a) | In the third quarter of 2014, we recorded goodwill related to the preliminary purchase price allocation for the acquisition of Tri-Ed. See Note 2. "Business Combination". |
(b) | In the first quarter of 2014, we recorded an immaterial reclassification between goodwill and deferred tax liability related to the purchase price allocation for the acquisition of Jorvex, S.A. |
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