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EX-99.2 - EX-99.2 - WESCO INTERNATIONAL INC | l42472exv99w2.htm |
8-K - FORM 8-K - WESCO INTERNATIONAL INC | l42472e8vk.htm |
Exhibit 99.1
News Release |
WESCO International, Inc. Reports
First Quarter 2011 Results
First Quarter 2011 Results
First quarter results compared to the prior year:
| Diluted EPS of $0.74 per share, up 68% from $0.44 per share | ||
| Net income of $37.3 million, up 94% from $19.2 million | ||
| Operating margin of 4.5%, up 120 basis points from 3.3% | ||
| Consolidated sales of $1.43 billion increased 25% from $1.15 billion |
PITTSBURGH, April 21, 2011/PRNewswire/ WESCO International, Inc. (NYSE: WCC), a leading
provider of electrical, industrial, and communications MRO and OEM products, construction
materials, and advanced supply chain management and logistics services, today announced its 2011
first quarter financial results.
The following are results for the three months ended March 31, 2011 compared to the three months
ended March 31, 2010:
| Consolidated net sales were $1,431.3 million for the first quarter of 2011, compared to $1,148.6 million for the first quarter of 2010. The 24.6% increase in sales includes a 7.0% positive impact from acquisitions and a 1.1% positive impact from foreign exchange rates, resulting in organic sales growth of 16.5%. Sequential sales increased 7.5% and includes a 5.1% positive impact from acquisitions and a 0.5% positive impact from foreign exchange. Sequential sales per workday in the first quarter was 9.1%. | ||
| Gross profit was $286.0 million, or 20.0% of sales, for the first quarter of 2011, compared to $227.4 million, or 19.8% of sales, for the first quarter of 2010. | ||
| Sales, general & administrative (SG&A) expenses were $213.8 million, or 14.9% of sales, for the current quarter, compared to $183.0 million, or 15.9% of sales, for the first quarter of 2010. | ||
| Operating profit was $64.7 million for the current quarter, up 69% from $38.3 million for the comparable 2010 quarter. Operating profit as a percentage of sales was 4.5% in 2011, up 120 basis points from 3.3% in 2010. |
| Total interest expense for the first quarter of 2011 was $12.6 million, compared to $13.5 million for the first quarter of 2010. Non-cash interest expense for the first quarter of 2011 and 2010 was $0.6 million and $1.3 million, respectively. | ||
| The effective tax rate for the current quarter was 28.4%, compared to 29.5% for the prior year quarter. | ||
| Net income of $37.3 million for the current quarter was up 94% from $19.2 million for the prior year quarter. | ||
| Diluted earnings per share for the first quarter of 2011 was $0.74 per share, based on 50.4 million diluted shares, up 68% from $0.44 per share in the first quarter of 2010, based on 43.7 million diluted shares. The three acquisitions made over the past nine-months, Potelcom in June, TVC Communications in December and RECO in March, had a favorable impact of approximately $0.09 per share on first quarter results. | ||
| Free cash flow for the first quarter of 2011 was $26.2 million, or 70% of net income, compared to free cash flow of $66.5 million for the first quarter of 2010. |
Mr. John J. Engel, WESCOs Chief Executive Officer, stated, Our first quarter results were
excellent and build upon the increasing momentum that we generated in our business in 2010. First
quarter sales were up 25% over last year and backlog increased 9% versus year end 2010 levels.
Execution of our growth initiatives continues, and were encouraged with the improving profit
quality of our business. Operating margins improved to 4.5% in the first quarter, up 120 basis
points versus last year, and net income increased over 94%, driven by an effective combination of
gross margin expansion and operating cost leverage. In addition, the three acquisitions that we
made over the last nine months are exceeding plan and have strengthened our business.
Mr. Engel continued, We expect that the market will remain very competitive as the global economic
recovery continues. The broad based strength and diversity of our business positions us well for
strong financial results as the industrial market grows and the non-residential construction and
utility markets begin to improve as we move through 2011 and 2012. Our first quarter performance
provides a solid base for another strong year in 2011 as we continue to execute our growth
initiatives, invest in our business and further improve our market position.
# # #
Teleconference
WESCO will conduct a teleconference to discuss the first quarter earnings as described in this News
Release on Thursday, April 21, 2011, 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), a publicly traded Fortune 500 company headquartered in
Pittsburgh, Pennsylvania, is a leading provider of electrical, industrial, and communications
maintenance, repair and operating (MRO) and original equipment manufacturers (OEM) products,
construction materials, and advanced supply chain management and logistics services. 2010 annual
sales were approximately $5.1 billion. The Company employs approximately 6,800 people, maintains
relationships with over 17,000 suppliers, and serves over 100,000 customers worldwide. Customers
include industrial and commercial businesses, contractors, governmental agencies, institutions,
telecommunications providers and utilities. WESCO operates seven fully automated distribution
centers and over 400 full-service branches in North America and international markets, providing a
local presence for 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, 2010, 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 STATEMENT OF INCOME
(dollar amounts in millions, except per share amounts)
(Unaudited)
(dollar amounts in millions, except per share amounts)
(Unaudited)
Three Months | Three Months | |||||||||||||||
Ended | Ended | |||||||||||||||
March 31, | March 31, | |||||||||||||||
2011 | 2010 | |||||||||||||||
Net sales |
$ | 1,431.3 | $ | 1,148.6 | ||||||||||||
Cost of goods sold (excluding depreciation and amortization below) |
1,145.3 | 80.0 | % | 921.2 | 80.2 | % | ||||||||||
Selling, general and administrative expenses |
213.8 | 14.9 | % | 183.0 | 15.9 | % | ||||||||||
Depreciation and amortization |
7.5 | 6.1 | ||||||||||||||
Income from operations |
64.7 | 4.5 | % | 38.3 | 3.3 | % | ||||||||||
Interest expense, net |
12.6 | 13.5 | ||||||||||||||
Other income |
| (2.5 | ) | |||||||||||||
Income before income taxes |
52.1 | 3.6 | % | 27.3 | 2.4 | % | ||||||||||
Provision for income taxes |
14.8 | 8.1 | ||||||||||||||
Net income |
$ | 37.3 | 2.6 | % | $ | 19.2 | 1.7 | % | ||||||||
Diluted earnings per common share |
$ | 0.74 | $ | 0.44 | ||||||||||||
Weighted average common shares outstanding and common
share equivalents used in computing diluted earnings per
share (in millions) |
50.4 | 43.7 |
WESCO INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(dollar amounts in millions)
(Unaudited)
(dollar amounts in millions)
(Unaudited)
March 31, | December 31, | |||||||
2011 | 2010 | |||||||
Assets |
||||||||
Current Assets |
||||||||
Cash and cash equivalents |
$ | 52.4 | $ | 53.6 | ||||
Trade accounts receivable, net |
885.4 | 792.7 | ||||||
Inventories, net |
631.1 | 588.8 | ||||||
Other current assets |
64.8 | 78.6 | ||||||
Total current assets |
1,633.7 | 1,513.7 | ||||||
Other assets |
1,318.8 | 1,313.1 | ||||||
Total assets |
$ | 2,952.5 | $ | 2,826.8 | ||||
Liabilities and Stockholders Equity |
||||||||
Current Liabilities |
||||||||
Accounts payable |
$ | 650.4 | $ | 537.5 | ||||
Current debt |
4.8 | 4.0 | ||||||
Other current liabilities |
151.6 | 166.7 | ||||||
Total current liabilities |
806.8 | 708.2 | ||||||
Long-term debt |
703.3 | 725.9 | ||||||
Other noncurrent liabilities |
243.2 | 244.1 | ||||||
Total liabilities |
1,753.3 | 1,678.2 | ||||||
Stockholders Equity |
||||||||
Total stockholders equity |
1,199.2 | 1,148.6 | ||||||
Total liabilities and stockholders equity |
$ | 2,952.5 | $ | 2,826.8 | ||||
WESCO INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(dollar amounts in millions)
(Unaudited)
(dollar amounts in millions)
(Unaudited)
Three Months Ended |
Three Months Ended |
|||||||
March 31, 2011 |
March 31, 2010 |
|||||||
Operating Activities: |
||||||||
Net income |
$ | 37.3 | $ | 19.2 | ||||
Add back (deduct): |
||||||||
Depreciation and amortization |
7.5 | 6.1 | ||||||
Deferred income tax |
(0.1 | ) | 0.3 | |||||
Change in Trade and other receivables, net |
(69.7 | ) | (41.2 | ) | ||||
Change in Inventories, net |
(38.7 | ) | 2.1 | |||||
Change in Accounts Payable |
107.4 | 78.9 | ||||||
Other |
(11.9 | ) | 3.3 | |||||
Net cash provided by operating activities |
31.8 | 68.7 | ||||||
Investing Activities: |
||||||||
Capital expenditures |
(5.6 | ) | (2.2 | ) | ||||
Acquisition payments |
(7.8 | ) | (0.1 | ) | ||||
Equity distribution |
| 1.4 | ||||||
Other |
0.1 | | ||||||
Net cash used by investing activities |
(13.3 | ) | (0.9 | ) | ||||
Financing Activities: |
||||||||
Debt borrowing (repayments), net |
(22.6 | ) | (57.4 | ) | ||||
Equity activitiy, net |
| 0.8 | ||||||
Other |
1.5 | (5.8 | ) | |||||
Net cash used by financing activities |
(21.1 | ) | (62.4 | ) | ||||
Effect of exchange rate changes on cash and cash equivalents |
1.4 | 3.4 | ||||||
Net change in cash and cash equivalents |
(1.2 | ) | 8.8 | |||||
Cash and cash equivalents at the beginning of the period |
53.6 | 112.3 | ||||||
Cash and cash equivalents at the end of the period |
$ | 52.4 | $ | 121.1 | ||||
WESCO INTERNATIONAL, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(dollar amounts in thousands)
(Unaudited)
(dollar amounts in thousands)
(Unaudited)
Twelve Months | Twelve Months | |||||||
Ended | Ended | |||||||
March 31, | December 31, | |||||||
2011 | 2010 | |||||||
Financial Leverage: |
||||||||
Income from operations |
$ | 237,388 | $ | 210,919 | ||||
Depreciation and amortization |
25,380 | 23,935 | ||||||
EBITDA(1) |
$ | 262,768 | $ | 234,854 | ||||
March 31, | December 31, | |||||||
2011 | 2010 | |||||||
Current Debt |
$ | 4,836 | $ | 3,988 | ||||
Long-term Debt |
703,339 | 725,893 | ||||||
Debt
discount related to convertible debentures(2) |
177,822 | 178,427 | ||||||
Total Debt including debt discount |
$ | 885,997 | $ | 908,308 | ||||
Financial leverage ratio |
3.4 | 3.9 |
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 | |||||||
March 31, | March 31, | |||||||
(dollar amounts in millions) | 2011 | 2010 | ||||||
Free Cash Flow: |
||||||||
Cash flow provided by operations |
$ | 31.8 | $ | 68.7 | ||||
Less: Capital Expenditures |
(5.6 | ) | (2.2 | ) | ||||
Free Cash Flow |
$ | 26.2 | $ | 66.5 | ||||
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) | EBITDA does not include proforma adjustments for recent acquisitions. | |
(2) | The convertible debentures are presented in the consolidated balance sheet in long-term debt net of the unamortized discount. |
WESCO INTERNATIONAL, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (CONTINUED)
(dollar amounts in millions)
(Unaudited)
(dollar amounts in millions)
(Unaudited)
Three Months | Three Months | |||||||
Ended | Ended | |||||||
March 31, | March 31, | |||||||
2011 | 2010 | |||||||
Gross Profit: |
||||||||
Net Sales |
$ | 1,431.3 | $ | 1,148.6 | ||||
Cost of goods sold (excluding depreciation
and amortization) |
1,145.3 | 921.2 | ||||||
Gross profit |
$ | 286.0 | $ | 227.4 | ||||
Gross margin |
20.0 | % | 19.8 | % |
Note: Gross profit is provided by the Company as an additional financial measure. Gross
profit is calculated
by subtracting 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.