2. Forward Looking Statements and
Non-GAAP Measures
This presentation contains forward-looking statements, including references to goals, plans, strategies, objectives, projected costs or savings,
anticipated future performance, results or events and other statements that are not strictly historical in nature. These statements are based on
management’s current expectations, forecasts and assumptions. This means they involve a number of risks and uncertainties that could cause
actual results to differ materially from those expressed or implied here. These risks and uncertainties include, but are not limited to the
following: United’s reliance on key customers, and the risks inherent in continuing or increased customer concentration; end-user demand for
products in the office technology and furniture product categories may continue to decline; prevailing economic conditions and changes affecting
office,
the business products industry and the general economy; United’s ability to effectively manage its operations and to implement growth, costreduction and margin-enhancement initiatives; United’s reliance on supplier allowances and promotional incentives; United’s reliance on
independent resellers for a significant percentage of its net sales and, therefore, the importance of the continued independence, viability and
success of these resellers; continuing or increasing competitive activity and pricing pressures within existing or expanded product categories,
including competition from product manufacturers who sell directly to United’s customers; the impact of supply chain disruptions or changes in key
suppliers’ distribution strategies; United’s ability to maintain its existing information technology systems and the systems and eCommerce
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g ;
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gy y
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services that it provides to customers, and to successfully procure, develop and implement new systems and services without business disruption
or other unanticipated difficulties or costs; the creditworthiness of United’s customers; United’s ability to manage inventory in order to maximize
sales and supplier allowances while minimizing excess and obsolete inventory; United’s success in effectively identifying, consummating and
integrating acquisitions; the risks and expense associated with United’s obligations to maintain the security of private information provided by
United’s customers; the costs and risks related to compliance with laws, regulations and industry standards affecting United’s business; the
availability of financing sources to meet United’s business needs; United’s reliance on key management p
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personnel, both in day-to-day operations
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and in execution of new business initiatives; and the effects of hurricanes, acts of terrorism and other natural or man-made disruptions.
Shareholders, potential investors and other readers are urged to consider these risks and uncertainties in evaluating forward-looking statements
and are cautioned not to place undue reliance on the forward-looking statements. For additional information about risks and uncertainties that
could materially affect United’s results, please see the company’s Securities and Exchange Commission filings. The forward-looking information
in this presentation is made as of this date only, and the company does not undertake to update any forward-looking statement. Investors are
advised to consult any further disclosure by United regarding the matters discussed in this presentation in its filings with the Securities and
Exchange Commission and in other written statements it makes from time to time. It is not possible to anticipate or foresee all risks and
uncertainties, and investors should not consider any list of risks and uncertainties to be exhaustive or complete.
* This is non-GAAP information. A reconciliation of these items to the most comparable GAAP measures is presented on the company’s Website
(www.unitedstationers.com) under the Investor Information section. Except as noted, all references within this presentation to financial results are
presented in accordance with U.S. Generally Accepted Accounting Principles.
Certain prior-period amounts have been reclassified to conform to the current presentation.
February 14, 2014
2
3. Headlines For the Three Months Ended
December 31, 2013
Sales were down 1.6% to $1.2 billion compared with Q4 2012.
Adjusted earnings per diluted share were $0.86*, up 6% compared with Q4
2012 EPS of $0.81.
Gross margin of $195.5 million, or 16.0% of sales, was down from $201.7
million, or 16.2% of sales, in the prior-year quarter.
Adjusted operating expenses in Q4 2013 were $137.9 million*, or 11.3%* of
sales, compared with $146.3 million, or 11.8% of sales, in Q4 2012.
Adjusted operating income was up 4% to $57.5 million*, or 4.7%* of sales,
j
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p
compared to $55.4 million, or 4.4% of sales, in the prior-year quarter.
Adjusted net income in the current quarter was $34.5 million*, up 5%
compared with $32.9 million in Q4 2012.
February 14, 2014
3
4. Consolidated Statement of Income
For the Three Months Ended December 31, 2013 and 2012
$ thousands (except EPS)
$
% to Sales
$
% to Sales
QTD Q4 2013 QTD Q4 2013 QTD Q4 2012 QTD Q4 2012
Net Sales
$ 1,223,638
Gross Margin
g
Operating Expense
Operating Income
Interest & Other
Taxes
Net Income
Diluted Shares (000s)
Diluted EPS
$
195,456
,
137,870
57,586
2,937
20,524
34,125
$
$ 1,244,074
15.97%
11.27%
4.70%
39,915
0.85
% to sales change
$ change % change
Fav (Unfav)
Fav (Unfav) Fav (Unfav) basis points
$ (20,436)
$
$
40,406
0.81
11.27% $
146,304
11.76%
55,354
( ,
(6,202)
)
8,434
2,232
1,395
(2,427)
1,200
(
(3.1%)
)
5.8%
4.0%
$
$
201,658
,
146,304
55,354
4,332
18,097
32,925
(1.6%)
491
0.04
1.2%
4.9%
$
8,358
5.7%
49
2,156
3.9%
26
1,602
4.9%
0.05
6.2%
16.20%
11.76%
4.44%
4.44%
( )
(23)
49
26
Adjusted to exclude non-operating items *
Adjusted Operating Expense
$
137,946
Adjusted Operating Income
57,510
Adjusted Net Income
34,527
Adjusted Diluted EPS
February 14, 2014
$
0.86
4.70%
32,925
$
0.81
$
4
5. Headlines For the 12 Months Ended December 31, 2013
Sales were flat with the prior year at $5.1 billion.
Adjusted earnings per diluted share increased 17% to $3.29*, compared
with an adj sted 2012 EPS of $2 82*
ith
adjusted
$2.82*.
Gross margin rate of 15.5% was up from 15.2% last year.
Adjusted operating expenses were $566.3 million*, or 11.1%* of sales,
compared with an adjusted $567.4 million*, or 11.2%* of sales, in 2012.
Adjusted operating income was $223.3 million*, or 4.4%* of sales, up from
an adjusted $207.2 million*, or 4.1%* of sales, in the prior-year period.
Adjusted net income was $132.4 million*, compared with an adjusted $115.7
million* in the same period last year.
Net cash provided by operating activities was $74.7 million versus $189.8
million in the prior-year period.
During the year, the Company repurchased 1.7 million shares for $62.1
million and paid cash dividends of $22.3 million to common shareholders.
February 14, 2014
5
6. Consolidated Statement of Income
For the 12 Months Ended December 31, 2013 and 2012
$ thousands (except EPS)
$
% to Sales
$
% to Sales
YTD Q4 2013 YTD Q4 2013 YTD Q4 2012 YTD Q4 2012
% to sales change
$ change
% change
Fav (Unfav)
Fav (Unfav) Fav (Unfav) basis points
Net Sales
$ 5,085,293
$
5,187
$
14,974
( ,
(6,735)
)
8,239
11,636
(8,535)
11,340
Gross Margin
Operating Expense
p
g p
Operating Income
Interest & Other
Taxes
Net Income
$
789,578
580,428
,
209,150
11,640
74,340
123,170
Diluted Shares (000s)
Diluted EPS
$
$ 5,080,106
15.52%
11.41%
4.11%
$
774,604
573,693
,
200,911
23,276
65,805
111,830
40,236
3.06
15.24%
11.28%
3.96%
$
40,991
2.73
11.13% $
567,446
11.16%
207,158
4.08%
0.1%
1.9%
(
(1.2%)
)
4.1%
28
( )
(13)
15
$
755
0.33
1.8%
12.1%
$
1,176
0.2%
3
16,150
7.8%
31
16,694
14.4%
0.47
16.7%
Adjusted to exclude non-operating items *
Adjusted Operating Expense
$
566,270
Adjusted Operating Income
223,308
Adjusted Net Income
132,397
Adjusted Diluted EPS
February 14, 2014
$
3.29
4.39%
115,703
$
2.82
$
6
