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8-K - FORM 8-K - WESCO INTERNATIONAL INC | l39465e8vk.htm |
EX-99.2 - EX-99.2 - WESCO INTERNATIONAL INC | l39465exv99w2.htm |
Exhibit 99.1
NEWS RELEASE | ||
WESCO International, Inc. / Suite 700, 225 West Station Square Drive / Pittsburgh, PA 15219 |
WESCO International, Inc. Reports
First Quarter 2010 Results
First Quarter 2010 Results
| Overall sequential sales improved 1.4% to $1.15 billion | ||
| Industrial end market sales increased 9% sequentially and 13% year-over-year | ||
| Sequential gross margins improved 60 basis points to 19.8% |
PITTSBURGH, April 22, 2010/PRNewswire/ WESCO International, Inc. (NYSE: WCC),
a leading provider of electrical and industrial MRO products, construction materials, and advanced
integrated supply procurement outsourcing services, today announced its 2010 first quarter
financial results.
The following results for the quarter ended March 31, 2010 were:
| Consolidated net sales were $1,148.6 million for the first quarter of 2010 compared to $1,179.6 million for the first quarter of 2009, a decline of 2.6%, inclusive of a 1.8% positive impact from foreign exchange rates. First quarter 2010 consolidated net sales increased 1.4% compared to the fourth quarter 2009. | ||
| Gross profit was $227.4 million, or 19.8% of sales, for the first quarter of 2010, compared to $238.2 million, or 20.2% of sales, for the first quarter of 2009. First quarter 2010 gross margin of 19.8% was 60 basis points better than the fourth quarter 2009 gross margin. | ||
| Sales, general & administrative (SG&A) expenses were $179.6 million, or 15.6% of sales for the current quarter, compared to $187.5 million, or 15.9% of sales for the 2009 comparable quarter. | ||
| Operating profit was $41.7 million, or 3.6% of sales for the current quarter, compared to $43.5 million, or 3.7% of sales for the comparable 2009 quarter. | ||
| Total interest expense for the first quarter of 2010 was $13.5 million compared to $12.5 million for the first quarter 2009. Interest expense in the current quarter was comprised of $12.2 million of cash interest expense and $1.3 million of non-cash interest expense. Interest expense in the prior year quarter was comprised of $8.7 million of cash interest and $3.8 million of non-cash interest. | ||
| Effective tax rate for the current quarter was 29.3% compared to 28.7% for the prior year quarter. | ||
| Net income for the current quarter was $21.7 million compared to $23.3 million for the prior year quarter. |
| Diluted earnings per share for the first quarter of 2010 was $0.50 per share based on 43.7 million shares outstanding versus $0.55 per share in the first quarter of 2009, based on 42.6 million shares outstanding. | ||
| Free cash flow in the current quarter was $66.5 million, compared to $131.8 million in the prior year quarter. |
John J. Engel, WESCOs Chief Executive Officer, stated, Our sales and margin initiatives
contributed favorably as we delivered solid results in the first quarter. After stabilizing the
business in the second half of last year, it is encouraging to see improving momentum in early 2010
and a return to positive year-over-year sales growth late in the first quarter. Our industrial
sales grew 13%, and we increased our construction backlog in the quarter despite facing continued
pressure in non-residential construction and utility markets. The decisive actions we took over
the last eighteen months have positioned us well as we begin to move into the recovery phase of
this cycle.
Mr. Engel continued, The entire WESCO organization is focused on growing sales and expanding
margins while providing excellent customer service. During this period of continued economic
uncertainty and slow market recovery, we are providing leading supply chain solutions for our
customers while ensuring that they are fully supported across our entire portfolio of products and
services as part of our One WESCO initiative.
# # #
Teleconference
WESCO will conduct a teleconference to discuss the first quarter earnings as described in this News
Release on Thursday, April 22, 2010, at 11:00 a.m. E.D.T. The conference call will be broadcast
live over the Internet and can be accessed from the Companys
website at http://www.wesco.com. The
conference call will be archived on this Internet site for seven days.
# # #
WESCO International, Inc. (NYSE: WCC) is a publicly traded Fortune 500 holding company,
headquartered in Pittsburgh, Pennsylvania, whose primary operating entity is WESCO Distribution,
Inc. WESCO Distribution is a leading distributor of electrical construction products and
electrical and industrial maintenance, repair and operating (MRO) supplies, and is the nations
largest provider of integrated supply services. 2009 annual sales were approximately $4.6 billion.
The Company employs approximately 6,100 people, maintains relationships with over 17,000
suppliers, and serves over 100,000 customers worldwide. Major markets include commercial and
industrial firms, contractors, government agencies, educational institutions, telecommunications
businesses and utilities. WESCO operates seven fully automated distribution centers and
approximately 380 full-service branches in North America and select international markets,
providing a local presence for area customers and a global network to serve multi-location
businesses and multi-national corporations.
# # #
The matters discussed herein may contain forward-looking statements that are subject to certain
risks and uncertainties that could cause actual results to differ materially from expectations.
Certain of these risks are set forth in the Companys Annual Report on Form 10-K for the fiscal
year ended December 31, 2009, as well as the Companys other reports filed with the Securities and
Exchange Commission.
Contact: Richard Heyse, Vice President & Chief Financial Officer
WESCO International, Inc. (412) 454-2392, Fax: (412) 222-7566
http://www.wesco.com
WESCO International, Inc. (412) 454-2392, Fax: (412) 222-7566
http://www.wesco.com
WESCO INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(dollar amounts in millions, except per share amounts)
(Unaudited)
(Unaudited)
Three Months | Three Months | |||||||||||||||
Ended | Ended | |||||||||||||||
March 31, | March 31, | |||||||||||||||
2010 | 2009 | |||||||||||||||
Net sales |
$ | 1,148.6 | $ | 1,179.6 | ||||||||||||
Cost of goods sold (excluding
depreciation and amortization below) |
921.2 | 80.2 | % | 941.4 | 79.8 | % | ||||||||||
Selling, general and administrative expenses |
179.6 | 15.6 | % | 187.5 | 15.9 | % | ||||||||||
Depreciation and amortization |
6.1 | 7.2 | ||||||||||||||
Income from operations |
41.7 | 3.6 | % | 43.5 | 3.7 | % | ||||||||||
Interest expense, net |
13.5 | 12.5 | ||||||||||||||
Other income |
(2.5 | ) | (1.6 | ) | ||||||||||||
Income before income taxes |
30.7 | 2.7 | % | 32.6 | 2.8 | % | ||||||||||
Provision for income taxes |
9.0 | 9.3 | ||||||||||||||
Net income |
$ | 21.7 | 1.9 | % | $ | 23.3 | 2.0 | % | ||||||||
Diluted earnings per common share |
$ | 0.50 | $ | 0.55 | ||||||||||||
Weighted average common shares outstanding
and common share equivalents used in
computing diluted earnings per share (in
millions) |
43.7 | 42.6 |
WESCO INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollar amounts in millions)
(Unaudited)
(dollar amounts in millions)
(Unaudited)
March 31, | December 31, | |||||||
2010 | 2009 | |||||||
Assets |
||||||||
Current Assets |
||||||||
Cash and cash equivalents |
$ | 121.1 | $ | 112.3 | ||||
Trade accounts receivable |
689.1 | 635.8 | ||||||
Inventories, net |
507.0 | 507.2 | ||||||
Other current assets |
58.0 | 75.7 | ||||||
Total current assets |
1,375.2 | 1,331.0 | ||||||
Other assets |
1,166.4 | 1,163.2 | ||||||
Total assets |
$ | 2,541.6 | $ | 2,494.2 | ||||
Liabilities and Stockholders Equity |
||||||||
Current Liabilities |
||||||||
Accounts payable |
$ | 534.5 | $ | 453.1 | ||||
Current debt |
94.7 | 94.0 | ||||||
Other current liabilities |
120.6 | 133.7 | ||||||
Total current liabilities |
749.8 | 680.8 | ||||||
Long-term debt |
541.0 | 597.9 | ||||||
Other noncurrent liabilities |
221.1 | 219.2 | ||||||
Total liabilities |
1,511.9 | 1,497.9 | ||||||
Stockholders Equity |
||||||||
Total stockholders equity |
1,029.7 | 996.3 | ||||||
Total liabilities and stockholders equity |
$ | 2,541.6 | $ | 2,494.2 | ||||
WESCO INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollar amounts in millions)
(Unaudited)
(dollar amounts in millions)
(Unaudited)
Three Months | Three Months | |||||||
Ended March 31, | Ended March 31, | |||||||
2010 | 2009 | |||||||
Operating Activities: |
||||||||
Net income |
$ | 21.7 | $ | 23.3 | ||||
Add back (deduct): |
||||||||
Depreciation and amortization |
6.1 | 7.2 | ||||||
Deferred income taxes |
0.3 | 2.5 | ||||||
Change in Trade and other receivables, net |
(41.2 | ) | 113.9 | |||||
Change in Inventories, net |
2.1 | 42.9 | ||||||
Change in Accounts Payable |
78.9 | (45.4 | ) | |||||
Other |
0.8 | (9.8 | ) | |||||
Net cash provided by operating activities |
68.7 | 134.6 | ||||||
Investing Activities: |
||||||||
Capital expenditures |
(2.2 | ) | (2.8 | ) | ||||
Other |
1.3 | | ||||||
Net cash used by investing activities |
(0.9 | ) | (2.8 | ) | ||||
Financing Activities: |
||||||||
Debt borrowings (repayments), net |
(57.4 | ) | (98.6 | ) | ||||
Equity activity, net |
0.8 | 0.2 | ||||||
Other |
(5.8 | ) | (11.9 | ) | ||||
Net cash used by financing activities |
(62.4 | ) | (110.3 | ) | ||||
Effect of exchange rate changes on cash and cash equivalents |
3.4 | (2.6 | ) | |||||
Net change in cash and cash equivalents |
8.8 | 18.9 | ||||||
Cash and cash equivalents at the beginning of the period |
112.3 | 86.3 | ||||||
Cash and cash equivalents at the end of the period |
$ | 121.1 | $ | 105.2 | ||||
WESCO INTERNATIONAL, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(dollar amounts in thousands)
(Unaudited)
(Unaudited)
Twelve Months | Twelve Months | |||||||
Ended | Ended | |||||||
March 31, | December 31, | |||||||
2010 | 2009 | |||||||
Financial Leverage: |
||||||||
Income from operations |
$ | 178,097 | $ | 179,952 | ||||
Depreciation and amortization |
24,989 | 26,045 | ||||||
EBITDA |
$ | 203,086 | $ | 205,997 | ||||
March 31, | December 31, | |||||||
2009 | 2009 | |||||||
Current debt |
$ | 94,749 | $ | 93,977 | ||||
Long-term debt |
540,952 | 597,869 | ||||||
Debt discount related to convertible debentures(1) |
181,410 | 182,689 | ||||||
Total debt including debt discount |
$ | 817,111 | $ | 874,535 | ||||
Financial leverage ratio |
4.0 | 4.2 |
Note: Financial leverage is provided by the Company as an indicator of capital structure
position. Financial leverage is calculated by dividing total debt, including debt discount, by the
trailing twelve months earnings before interest, taxes, depreciation and amortization (EBITDA).
Three Months | Three Months | |||||||
Ended | Ended | |||||||
Free Cash Flow: |
March 31, | March 31, | ||||||
(dollar amounts in millions) |
2010 | 2009 | ||||||
Cash flow provided by operations |
$ | 68.7 | $ | 134.6 | ||||
Less: Capital expenditures |
(2.2 | ) | (2.8 | ) | ||||
Free cash flow |
$ | 66.5 | $ | 131.8 | ||||
Note: Free cash flow is provided by the Company as an additional liquidity measure.
Capital expenditures are deducted from operating cash flow to determine free cash flow. Free cash
flow is available to provide a source of funds for any of the Companys financing needs.
(1) | The convertible debentures are presented in the consolidated balance sheets in long-term debt net of the unamortized discount. |
WESCO INTERNATIONAL, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (CONTINUED)
(dollar amounts in millions)
(Unaudited)
(Unaudited)
Three Months | Three Months | |||||||
Ended | Ended | |||||||
March 31, | March 31, | |||||||
2010 | 2009 | |||||||
Gross Profit: |
||||||||
Net sales |
$ | 1,148.6 | $ | 1,179.6 | ||||
Cost of goods sold
(excluding
depreciation and
amortization) |
921.2 | 941.4 | ||||||
Gross profit |
$ | 227.4 | $ | 238.2 | ||||
Gross margin |
19.8 | % | 20.2 | % |
Note: Gross profit is provided by the Company as an additional financial measure. Gross
profit is calculated by deducting cost of goods sold, excluding depreciation and amortization, from
net sales. This amount represents a commonly used financial measure within the distribution
industry. Gross margin is calculated by dividing gross profit by net sales.