PITTSBURGH, Jan. 30, 2020
/PRNewswire/ --
Fourth quarter highlights:
- Consolidated net sales of $2.1
billion, up 4.4% versus prior year
-
- Organic sales growth of 3.9%
- Earnings per diluted share of $1.26
-
- $1.32 adjusted for
merger-related transaction costs
- Operating cash flow of $108
million; free cash flow of $94
million, or 178% of net income
- Leverage of 2.8x, down 0.2x sequentially
- Announced merger agreement with Anixter; expected to close
Q2 or Q3 of 2020
Full year results:
- Record consolidated net sales of $8.4
billion, up 2.2% versus prior year
-
- Organic sales growth of 2.6%
- Earnings per diluted share of $5.14, up 7% versus prior year
-
- $5.20 adjusted for
merger-related transaction costs, up 8% versus prior year
- Operating cash flow of $224
million; free cash flow of $180
million, or 81% of net income
- Repurchased $150 million of
shares
WESCO International, Inc. (NYSE: WCC), a leading provider of
electrical, industrial, and communications maintenance, repair and
operating (MRO) and original equipment manufacturer (OEM) products,
construction materials, and advanced supply chain management and
logistics services, announces its results for the fourth quarter
and full year 2019.
Mr. John J. Engel, WESCO's
Chairman, President and CEO, commented, "We achieved record fourth
quarter and full year sales results against end market conditions
that were more challenging than expected. Notably, all of our
end markets and geographies grew on a year-over-year basis for the
third consecutive year. Gross margin was down versus prior
year driven by business mix and the impact of supplier price
increases, which we continue to work into the
market. Operating margin was within our expected range, after
adjusting for Anixter merger-related transaction costs, and was
driven by effective cost management. EPS grew 8% to a record
$5.20 in 2019, after adjusting for
the Anixter-related costs. Free cash flow generation was also
strong in the quarter and financial leverage ended the year at 2.8
times net debt to EBITDA after completing $150 million of share repurchases in 2019."
Mr. Engel continued, "As announced earlier this month, the
transformational combination of WESCO and Anixter will create a
premier electrical and data communications distribution and supply
chain services company. As a result, we expect 2020 to be a
watershed year for WESCO and we look forward to the substantial
value creation for our stockholders, customers, suppliers, and
people. We continue to expect to close this transaction in the
second or third quarter of 2020 after receiving approvals from
Anixter stockholders and certain regulatory authorities."
Mr. Engel added, "Our end market outlook for 2020 provided last
quarter remains unchanged. We expect to outperform the market
by leveraging our full range of WESCO services and supply chain
solutions, by making investments in our people and digital
capabilities, and by maintaining our cash and cost management
discipline. As a result, we continue to expect sales growth in the
range of zero to 4% this year, and provide our full year 2020
outlook for operating margin of 4.1% to 4.4%, EPS of $5.10 to $5.70 per
diluted share, and free cash flow generation of at least 90% of net
income excluding any impacts of the announced merger with
Anixter."
The following are results for the three months ended
December 31, 2019 compared to the three months ended
December 31, 2018:
- Net sales were $2.1 billion for
the fourth quarter of 2019, up 4.4% compared to the fourth quarter
of 2018. Organic sales for the fourth quarter of 2019 grew by 3.9%
as foreign exchange rates negatively impacted net sales by 0.3%,
and acquisitions positively impacted net sales by 0.8%.
- Cost of goods sold for the fourth quarter of 2019 was
$1.7 billion and gross profit was
$389.8 million, compared to cost of
goods sold and gross profit of $1.6
billion and $390.3 million,
respectively, for the fourth quarter of 2018. As a percentage of
net sales, gross profit was 18.6% and 19.4% for the fourth quarter
of 2019 and 2018, respectively. Sequentially, gross profit as a
percentage of net sales was flat. Gross profit as a percentage of
net sales for the fourth quarter of 2019 was negatively impacted by
a challenging pricing environment, as well as business mix.
- Selling, general and administrative ("SG&A") expenses were
$289.9 million, or 13.8% of net
sales, for the fourth quarter of 2019, compared to $284.2 million, or 14.1% of net sales, for the
fourth quarter of 2018. SG&A expenses for the fourth quarter of
2019 include $3.1 million of
transaction costs related to WESCO's merger with Anixter
International, as announced on January 10,
2020.
- Operating profit was $83.8
million for the fourth quarter of 2019, compared to
$90.5 million for the fourth quarter
of 2018. Operating profit as a percentage of net sales was 4.0% for
the current quarter, compared to 4.5% for the fourth quarter of the
prior year. Adjusted for merger-related transaction costs of
$3.1 million, operating profit was
$86.9 million for the fourth quarter
of 2019, or 4.1% of net sales.
- Net interest and other for the fourth quarter of 2019 was
$16.2 million, compared to
$16.8 million for the fourth quarter
of 2018.
- The effective tax rate for the fourth quarter of 2019 was
22.0%, compared to 21.2% for the fourth quarter of 2018. The higher
effective tax rate in the current quarter is primarily due to the
full application of the international provisions of U.S. tax
reform.
- Net income attributable to WESCO International, Inc. was
$53.1 million for the fourth quarter
of 2019, compared to $58.1 million
for the fourth quarter of 2018.
- Earnings per diluted share for the fourth quarter of 2019 and
2018 was $1.26, based on 42.2 million
and 46.2 million diluted shares, respectively. Adjusted earnings
per diluted share for the fourth quarter of 2019 was $1.32.
- Operating cash flow for the fourth quarter of 2019 was
$107.7 million, compared to
$122.3 million for the fourth quarter
of 2018. Free cash flow for the fourth quarter of 2019 was
$94.0 million, or 178% of net income,
compared to $109.8 million, or 189%
of net income, for the fourth quarter of 2018.
The following are results for the year ended December 31, 2019 compared to the year ended
December 31, 2018:
- Net sales were $8.4 billion for
2019, compared to $8.2 billion for
2018, an increase of 2.2%. Organic sales for 2019 grew by 2.6% as
foreign exchange rates and the number of workdays negatively
impacted net sales by 0.8% and 0.4%, respectively, and were
partially offset by the positive 0.8% impact from
acquisitions.
- Cost of goods sold for 2019 was $6.8
billion, compared to $6.6
billion for 2018. Gross profit was $1.6 billion for 2019 and 2018. As a percentage
of net sales, gross profit was 18.9% and 19.2% for 2019 and 2018,
respectively. Gross profit as a percentage of net sales for 2019
was negatively impacted by a challenging pricing environment, as
well as business mix.
- SG&A expenses were $1.2
billion for 2019 and 2018. SG&A expenses were 14.0% and
14.1% of net sales for 2019 and 2018, respectively.
- Operating profit was $346.2
million for 2019, or 4.1% of net sales, compared to
$352.5 million for 2018, or 4.3% of
net sales. Adjusted for merger-related transaction costs of
$3.1 million, operating profit was
$349.3 million for 2019, or 4.2% of
net sales.
- Net interest and other for 2019 was $64.2 million, compared to $71.4 million for 2018. The resolution of
transfer pricing matters associated with the Canadian taxing
authority resulted in non-cash interest income of $3.7 million for the year ended December 31, 2019. For the year ended
December 31, 2018, net interest and
other includes a foreign exchange loss of $3.0 million from the remeasurement of a
financial instrument, as well as accelerated amortization of debt
discount and debt issuance costs totaling $0.8 million due to early repayments of our then
outstanding term loan facility.
- The effective tax rate for 2019 was 21.2%, compared to 19.8%
for 2018. The higher effective tax rate in the current year is
primarily due to the full application of the international
provisions of U.S. tax reform.
- Net income attributable to WESCO International, Inc. was
$223.4 million and $227.3 million for 2019 and 2018,
respectively.
- Earnings per diluted share for 2019 was $5.14, based on 43.5 million diluted shares,
compared to $4.82 for 2018, based on
47.2 million diluted shares. Adjusted earnings per diluted share
for 2019 was $5.20.
- Operating cash flow for 2019 was $224.4
million, compared to $296.7
million for 2018. Free cash flow for 2019 was $180.3 million, or 81% of net income, compared to
$260.5 million, or 116% of net
income, for 2018. The Company repurchased $150.0 million of shares during 2019.
Webcast and Teleconference Access
WESCO will conduct a webcast and teleconference to discuss the
fourth quarter and full year 2019 earnings as described in this
News Release on Thursday, January 30, 2020, at 10:00 a.m. E.T. The call will be broadcast live
over the internet and can be accessed from the Investor Relations
page of the Company's website at
www.wesco.investorroom.com. The call will be archived on this
internet site for seven days.
WESCO International, Inc. (NYSE: WCC), a publicly traded
Fortune 500 holding company headquartered in Pittsburgh, Pennsylvania, is a leading
provider of electrical, industrial, and communications maintenance,
repair and operating (MRO) and original equipment manufacturer
(OEM) products, construction materials, and advanced supply chain
management and logistic services. 2019 annual sales were
approximately $8.4 billion. The
company employs approximately 9,500 people, maintains relationships
with approximately 30,000 suppliers, and serves approximately
70,000 active customers worldwide. Customers include commercial and
industrial businesses, contractors, government agencies,
institutions, telecommunications providers, and utilities. WESCO
operates 11 fully automated distribution centers and approximately
500 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.
Forward-Looking Statements
All statements made herein that are not historical facts
should be considered as forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
Such statements involve known and unknown risks, uncertainties and
other factors that may cause actual results to differ materially.
These statements include, but are not limited to, statements
regarding the expected completion and timing of the proposed
transaction between WESCO International, Inc. ("WESCO") and Anixter
International Inc. ("Anixter"), expected benefits and costs of the
proposed transaction, and management plans relating to the proposed
transaction, and statements that address WESCO's expected future
business and financial performance and other statements identified
by words such as anticipate, plan, believe, estimate, intend,
expect, project, will and similar words, phrases or expressions.
These forward-looking statements are based on current expectations
and beliefs of WESCO's management as well as assumptions made by,
and information currently available to, WESCO's management, current
market trends and market conditions and involve risks and
uncertainties, many of which are outside of WESCO's and WESCO's
management's control, and which may cause actual results to differ
materially from those contained in forward-looking statements.
Accordingly, you should not place undue reliance on such
statements. Certain of these risks are set forth in the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 2018, as well as the Company's other
reports filed with the U.S. Securities and Exchange Commission
("SEC").
These risks, uncertainties and assumptions also include the
timing, receipt and terms and conditions of any required
governmental and regulatory approvals of the proposed transaction
between WESCO and Anixter that could reduce anticipated benefits or
cause the parties to abandon the proposed transaction, the
occurrence of any event, change or other circumstances that could
give rise to the termination of the merger agreement, the
possibility that stockholders of Anixter may not adopt the merger
agreement, the risk that the parties may not be able to satisfy the
conditions to the proposed transaction in a timely manner or at
all, risks related to disruption of management time from ongoing
business operations due to the proposed transaction, the risk that
any announcements relating to the proposed transaction could have
adverse effects on the market price of WESCO's common stock, the
risk of any unexpected costs or expenses resulting from the
proposed transaction, the risk of any litigation relating to the
proposed transaction, the risk that the proposed transaction and
its announcement could have an adverse effect on the ability of
WESCO or Anixter to retain customers and retain and hire key
personnel and maintain relationships with their suppliers,
customers and other business relationships and on their operating
results and businesses generally, the risk that the pending
proposed transaction could distract management of both entities and
they will incur substantial costs, the risk that problems may arise
in successfully integrating the businesses of the companies, which
may result in the combined company not operating as effectively and
efficiently as expected, the risk that the combined company may be
unable to achieve synergies or other anticipated benefits of the
proposed transaction or it may take longer than expected to achieve
those synergies or benefits and other important factors that could
cause actual results to differ materially from those projected. All
such factors are difficult to predict and are beyond WESCO's
control.
Additional Information and Where to Find It
This communication does not constitute an offer to sell or
the solicitation of an offer to buy any securities or a
solicitation of any vote or approval, nor shall there be any sale
of securities in any jurisdiction in which such offer, solicitation
or sale would be unlawful prior to registration or qualification
under the securities laws of any such jurisdiction. No offer of
securities shall be made except by means of a prospectus meeting
the requirements of Section 10 of the Securities Act of 1933, as
amended. In connection with the potential transaction, WESCO
expects to file a registration statement on Form S-4 with the SEC
containing a preliminary prospectus of WESCO that also constitutes
a preliminary proxy statement of Anixter. After the registration
statement is declared effective Anixter will mail a definitive
proxy statement/prospectus to stockholders of Anixter. This
communication is not a substitute for the proxy
statement/prospectus or registration statement or for any other
document that WESCO or Anixter may file with the SEC and send to
Anixter's stockholders in connection with the potential
transaction. INVESTORS AND SECURITY HOLDERS OF WESCO AND ANIXTER
ARE URGED TO READ THE REGISTRATION STATEMENT, PROXY
STATEMENT/PROSPECTUS AND OTHER DOCUMENTS FILED WITH THE SEC
CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE
THEY WILL CONTAIN IMPORTANT INFORMATION. Investors and security
holders will be able to obtain free copies of the registration
statement, proxy statement/prospectus and other documents filed
with the SEC by WESCO or Anixter through the website maintained by
the SEC at http://www.sec.gov. Copies of the documents filed with
the SEC by WESCO will be available free of charge on WESCO's
website at http://wesco.investorroom.com/sec-filings and copies of
the documents filed with the SEC by Anixter will be available free
of charge on Anixter's website at
http://investors.anixter.com/financials/sec-filings.
Participants in the Solicitation
WESCO and Anixter and certain of their respective directors,
certain of their respective executive officers and other members of
management and employees may be considered participants in the
solicitation of proxies from Anixter shareholders with respect to
the potential transaction under the rules of the SEC. Information
about the directors and executive officers of WESCO is set forth in
its Annual Report on Form 10-K for the year ended December 31, 2018, which was filed with the SEC
on February 27, 2019, and its proxy
statement for its 2019 annual meeting of stockholders, which was
filed with the SEC on April 15, 2019.
Information about the directors and executive officers of Anixter
is set forth in its Annual Report on Form 10-K for the year ended
December 28, 2018, which was filed
with the SEC on February 21, 2019,
and its proxy statement for its 2019 annual meeting of
stockholders, which was filed with the SEC on April 18, 2019. These documents can be obtained
free of charge from the sources indicated above. Additional
information regarding the interests of such participants in the
solicitation of proxies in respect of the potential transaction
will be included in the registration statement and proxy
statement/prospectus and other relevant materials to be filed with
the SEC when they become available.
WESCO
INTERNATIONAL, INC.
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
|
(dollar amounts in
thousands, except per share amounts)
|
(Unaudited)
|
|
|
Three Months
Ended
|
|
|
December 31,
2019
|
|
|
December 31,
2018
|
|
Net sales
|
$
|
2,099,452
|
|
|
|
$
|
2,011,447
|
|
|
Cost of goods sold
(excluding
|
1,709,658
|
|
81.4
|
%
|
|
1,621,117
|
|
80.6
|
%
|
depreciation and amortization)
|
|
|
|
|
|
Selling, general and
administrative expenses
|
289,914
|
|
13.8
|
%
|
|
284,155
|
|
14.1
|
%
|
Depreciation and
amortization
|
16,072
|
|
|
|
15,675
|
|
|
Income from operations
|
83,808
|
|
4.0
|
%
|
|
90,500
|
|
4.5
|
%
|
Net interest and
other
|
16,221
|
|
|
|
16,840
|
|
|
Income before income taxes
|
67,587
|
|
3.2
|
%
|
|
73,660
|
|
3.7
|
%
|
Provision for income
taxes
|
14,893
|
|
|
|
15,592
|
|
|
Net income
|
52,694
|
|
2.5
|
%
|
|
58,068
|
|
2.9
|
%
|
Net loss attributable
to noncontrolling interests
|
(404)
|
|
|
|
(67)
|
|
|
Net income attributable to WESCO International, Inc.
|
$
|
53,098
|
|
2.5
|
%
|
|
$
|
58,135
|
|
2.9
|
%
|
|
|
|
|
|
|
Earnings per diluted
common share
|
$
|
1.26
|
|
|
|
$
|
1.26
|
|
|
Weighted-average
common shares outstanding and common
|
|
|
|
|
|
share equivalents used
in computing earnings per diluted
|
|
|
|
|
|
common share (in
thousands)
|
42,210
|
|
|
|
46,179
|
|
|
WESCO
INTERNATIONAL, INC.
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
|
(dollar amounts in
thousands, except per share amounts)
|
(Unaudited)
|
|
|
Twelve Months
Ended
|
|
|
December 31,
2019
|
|
|
December 31,
2018
|
|
Net sales
|
$
|
8,358,917
|
|
|
|
$
|
8,176,601
|
|
|
Cost of goods sold
(excluding
|
6,777,456
|
|
81.1
|
%
|
|
6,609,220
|
|
80.8
|
%
|
depreciation and amortization)
|
|
|
|
|
|
Selling, general and
administrative expenses
|
1,173,137
|
|
14.0
|
%
|
|
1,151,944
|
|
14.1
|
%
|
Depreciation and
amortization
|
62,107
|
|
|
|
62,997
|
|
|
Income from operations
|
346,217
|
|
4.1
|
%
|
|
352,440
|
|
4.3
|
%
|
Net interest and
other
|
64,156
|
|
|
|
71,415
|
|
|
Income before income taxes
|
282,061
|
|
3.4
|
%
|
|
281,025
|
|
3.4
|
%
|
Provision for income
taxes
|
59,863
|
|
|
|
55,670
|
|
|
Net income
|
222,198
|
|
2.7
|
%
|
|
225,355
|
|
2.8
|
%
|
Net loss attributable
to noncontrolling interests
|
(1,228)
|
|
|
|
(1,988)
|
|
|
Net income attributable to WESCO International, Inc.
|
$
|
223,426
|
|
2.7
|
%
|
|
$
|
227,343
|
|
2.8
|
%
|
|
|
|
|
|
|
Earnings per diluted
common share
|
$
|
5.14
|
|
|
|
$
|
4.82
|
|
|
Weighted-average
common shares outstanding and common
|
|
|
|
|
|
share equivalents used
in computing earnings per diluted
|
|
|
|
|
|
common share (in
thousands)
|
43,487
|
|
|
|
47,199
|
|
|
WESCO
INTERNATIONAL, INC.
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(dollar amounts in
thousands)
|
(Unaudited)
|
|
|
December 31,
2019
|
|
December 31,
2018
|
Assets
|
|
|
|
Current
Assets
|
|
|
|
Cash and cash
equivalents
|
$
|
150,902
|
|
|
$
|
96,343
|
|
Trade accounts
receivable, net
|
1,187,359
|
|
|
1,166,607
|
|
Inventories
|
1,011,674
|
|
|
948,726
|
|
Other current
assets
|
190,476
|
|
|
173,964
|
|
Total current assets
|
2,540,411
|
|
|
2,385,640
|
|
|
|
|
|
Other assets
(1)
|
2,477,224
|
|
|
2,219,396
|
|
Total assets
|
$
|
5,017,635
|
|
|
$
|
4,605,036
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
Current
Liabilities
|
|
|
|
Accounts
payable
|
$
|
830,478
|
|
|
$
|
794,348
|
|
Short-term borrowings
and current debt
|
26,685
|
|
|
56,214
|
|
Other current
liabilities (1)
|
226,896
|
|
|
211,384
|
|
Total current liabilities
|
1,084,059
|
|
|
1,061,946
|
|
|
|
|
|
Long-term debt,
net
|
1,257,067
|
|
|
1,167,311
|
|
Other noncurrent
liabilities (1)
|
417,838
|
|
|
246,053
|
|
Total liabilities
|
2,758,964
|
|
|
2,475,310
|
|
|
|
|
|
Stockholders'
Equity
|
|
|
|
Total stockholders' equity
|
2,258,671
|
|
|
2,129,726
|
|
Total liabilities and stockholders' equity
|
$
|
5,017,635
|
|
|
$
|
4,605,036
|
|
|
|
|
|
|
|
|
|
(1)
|
Effective January 1,
2019, the Company adopted Accounting Standards Update 2016-02,
Leases, and all the related amendments ("Topic 842") using
the effective date method. The adoption of Topic 842 resulted in
the recognition of right-of-use assets and lease liabilities in the
balance sheet. As of December 31, 2019, other assets includes
$235.8 million of operating lease assets, and other current
liabilities and other noncurrent liabilities include $62.0 million
and $179.8 million, respectively, of operating lease
liabilities.
|
WESCO
INTERNATIONAL, INC.
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(dollar amounts in
thousands)
|
(Unaudited)
|
|
|
Twelve Months
Ended
|
|
December 31,
2019
|
|
December 31,
2018
|
Operating
Activities:
|
|
|
|
Net income
|
$
|
222,198
|
|
|
$
|
225,355
|
|
Add back
(deduct):
|
|
|
|
Depreciation and
amortization
|
62,107
|
|
|
62,997
|
|
Deferred income
taxes
|
13,205
|
|
|
9,137
|
|
Change in trade
receivables, net
|
11,453
|
|
|
(22,934)
|
|
Change in
inventories
|
(47,297)
|
|
|
(8,702)
|
|
Change in accounts
payable
|
23,506
|
|
|
9,193
|
|
Other
|
(60,805)
|
|
|
21,675
|
|
Net cash provided by
operating activities
|
224,367
|
|
|
296,721
|
|
|
|
|
|
Investing
Activities:
|
|
|
|
Capital
expenditures
|
(44,067)
|
|
|
(36,210)
|
|
Other
|
(16,733)
|
|
|
2,068
|
|
Net cash used in
investing activities
|
(60,800)
|
|
|
(34,142)
|
|
|
|
|
|
Financing
Activities:
|
|
|
|
Debt borrowings
(repayments), net
|
57,187
|
|
|
(128,068)
|
|
Equity activity,
net
|
(153,049)
|
|
|
(127,169)
|
|
Other
|
(13,904)
|
|
|
(19,857)
|
|
Net cash used in
financing activities
|
(109,766)
|
|
|
(275,094)
|
|
|
|
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
758
|
|
|
(9,095)
|
|
|
|
|
|
Net change in cash
and cash equivalents
|
54,559
|
|
|
(21,610)
|
|
Cash and cash
equivalents at the beginning of the period
|
96,343
|
|
|
117,953
|
|
Cash and cash
equivalents at the end of the period
|
$
|
150,902
|
|
|
$
|
96,343
|
|
NON-GAAP FINANCIAL MEASURES
This earnings release includes certain non-GAAP financial
measures. These financial measures include organic sales growth,
gross profit, gross margin, financial leverage, earnings before
interest, taxes, depreciation and amortization (EBITDA), adjusted
EBITDA free cash flow, adjusted income from operations, and
adjusted earnings per diluted share. The Company believes that
these non-GAAP measures are useful to investors as they provide a
better understanding of sales performance, and the use of debt and
liquidity on a comparable basis. Management does not use these
non-GAAP financial measures for any purpose other than the reasons
stated above.
WESCO
INTERNATIONAL, INC.
|
|
RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES
|
(dollar amounts in
thousands, except organic sales data)
|
(Unaudited)
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
Organic Sales
Growth:
|
December 31,
2019
|
|
December 31,
2019
|
|
|
|
|
Change in net sales
|
4.4
|
%
|
|
2.2
|
%
|
Impact from acquisitions
|
0.8
|
%
|
|
0.8
|
%
|
Impact from foreign exchange rates
|
(0.3)
|
%
|
|
(0.8)
|
%
|
Impact from number of workdays
|
—
|
%
|
|
(0.4)
|
%
|
Organic
sales growth
|
3.9
|
%
|
|
2.6
|
%
|
|
|
|
|
|
|
Note: Organic sales
growth is a measure of sales performance. Organic sales growth is
calculated by deducting the percentage impact from acquisitions in
the first year of ownership, foreign exchange rates and number of
workdays from the overall percentage change in consolidated net
sales.
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
Gross
Profit:
|
December 31,
2019
|
|
December 31,
2018
|
|
December 31,
2019
|
|
December 31,
2018
|
|
|
|
|
|
|
|
|
Net sales
|
$
|
2,099,452
|
|
|
$
|
2,011,447
|
|
|
$
|
8,358,917
|
|
|
$
|
8,176,601
|
|
Cost of goods sold
(excluding depreciation
and amortization)
|
1,709,658
|
|
|
1,621,117
|
|
|
6,777,456
|
|
|
6,609,220
|
|
Gross
profit
|
$
|
389,794
|
|
|
$
|
390,330
|
|
|
$
|
1,581,461
|
|
|
$
|
1,567,381
|
|
Gross
margin
|
18.6
|
%
|
|
19.4
|
%
|
|
18.9
|
%
|
|
19.2
|
%
|
|
Three Months
Ended
|
Gross
Profit:
|
September 30,
2019
|
|
|
Net sales
|
$
|
2,148,110
|
|
Cost of goods sold
(excluding depreciation and
amortization)
|
1,747,913
|
|
Gross
profit
|
$
|
400,197
|
|
Gross
margin
|
18.6
|
%
|
|
|
|
Note: Gross profit is
a financial measure commonly used within the distribution industry.
Gross profit is calculated by deducting cost of goods sold,
excluding depreciation and amortization, from net sales. Gross
margin is calculated by dividing gross profit by net
sales.
|
|
WESCO
INTERNATIONAL, INC.
|
|
RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES
|
(dollar amounts in
thousands)
|
(Unaudited)
|
|
|
Twelve Months
Ended
|
Financial
Leverage:
|
December 31,
2019
|
|
December 31,
2018
|
|
|
|
|
Income from
operations
|
$
|
346,217
|
|
|
$
|
352,440
|
|
Depreciation and
amortization
|
62,107
|
|
|
62,997
|
|
EBITDA
|
$
|
408,324
|
|
|
$
|
415,437
|
|
|
|
|
|
|
December 31,
2019
|
|
December 31,
2018
|
Short-term borrowings
and current debt
|
$
|
26,685
|
|
|
$
|
56,214
|
|
Long-term
debt
|
1,257,067
|
|
|
1,167,311
|
|
Debt discount and
debt issuance costs (1)
|
8,876
|
|
|
9,731
|
|
Total debt
|
1,292,628
|
|
|
1,233,256
|
|
Less: cash and cash
equivalents
|
150,902
|
|
|
96,343
|
|
Total debt, net of
cash
|
$
|
1,141,726
|
|
|
$
|
1,136,913
|
|
|
|
|
|
Financial leverage
ratio
|
2.8
|
|
|
2.7
|
|
|
|
|
|
(1)
|
Debt is presented in
the condensed consolidated balance sheets net of debt discount and
debt issuance costs.
|
|
|
|
|
|
Note: Financial
leverage measures the use of debt. Financial leverage ratio is
calculated by dividing total debt, including debt discount and debt
issuance costs, net of cash, by EBITDA. EBITDA is defined as the
trailing twelve months earnings before interest, taxes,
depreciation and amortization.
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
Free Cash
Flow:
|
December 31,
2019
|
|
December 31,
2018
|
|
December 31,
2019
|
|
December 31,
2018
|
|
|
|
|
|
|
|
|
Cash flow provided by
operations
|
$
|
107,703
|
|
|
$
|
122,261
|
|
|
$
|
224,367
|
|
|
$
|
296,721
|
|
Less: capital
expenditures
|
(13,744)
|
|
|
(12,461)
|
|
|
(44,067)
|
|
|
(36,210)
|
|
Free cash
flow
|
$
|
93,959
|
|
|
$
|
109,800
|
|
|
$
|
180,300
|
|
|
$
|
260,511
|
|
Percentage of net
income
|
178
|
%
|
|
189
|
%
|
|
81
|
%
|
|
116
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: Free cash flow
is a measure of liquidity. Capital expenditures are deducted from
operating cash flow to determine free cash flow. Free cash flow is
available to fund investing and financing activities.
|
|
WESCO
INTERNATIONAL, INC.
|
|
RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES
|
(dollar amounts in
thousands, except per share amounts)
|
(Unaudited)
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
Adjusted Income
from Operations / Adjusted
EBITDA:
|
December 31,
2019
|
|
December 31,
2018
|
|
December 31,
2019
|
|
December 31,
2018
|
|
|
|
|
|
|
|
|
Income from
operations
|
$
|
83,808
|
|
|
$
|
90,500
|
|
|
$
|
346,217
|
|
|
$
|
352,440
|
|
Merger-related
transaction costs
|
3,130
|
|
|
—
|
|
|
3,130
|
|
|
—
|
|
Adjusted income from
operations
|
$
|
86,938
|
|
|
$
|
90,500
|
|
|
$
|
349,347
|
|
|
$
|
352,440
|
|
Depreciation and
amortization
|
16,072
|
|
|
15,675
|
|
|
62,107
|
|
|
62,997
|
|
Adjusted
EBITDA
|
$
|
103,010
|
|
|
$
|
106,175
|
|
|
$
|
411,454
|
|
|
$
|
415,437
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
Adjusted Provision
for Income Taxes:
|
December 31,
2019
|
|
December 31,
2018
|
|
December 31,
2019
|
|
December 31,
2018
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
$
|
14,893
|
|
|
$
|
15,592
|
|
|
$
|
59,863
|
|
|
$
|
55,670
|
|
Income tax effect of
merger-related transaction costs
|
664
|
|
|
—
|
|
|
664
|
|
|
—
|
|
Adjusted provision
for income taxes
|
$
|
15,557
|
|
|
$
|
15,592
|
|
|
$
|
60,527
|
|
|
$
|
55,670
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
Adjusted Earnings
Per Diluted Share:
|
December 31,
2019
|
|
December 31,
2018
|
|
December 31,
2019
|
|
December 31,
2018
|
|
|
|
|
|
|
|
|
Adjusted income from
operations
|
$
|
86,938
|
|
|
$
|
90,500
|
|
|
$
|
349,347
|
|
|
$
|
352,440
|
|
Net interest and
other
|
16,221
|
|
|
16,840
|
|
|
64,156
|
|
|
71,415
|
|
Adjusted income
before income taxes
|
70,717
|
|
|
73,660
|
|
|
285,191
|
|
|
281,025
|
|
Adjusted provision
for income taxes
|
15,557
|
|
|
15,592
|
|
|
60,527
|
|
|
55,670
|
|
Adjusted net
income
|
55,160
|
|
|
58,068
|
|
|
224,664
|
|
|
225,355
|
|
Net loss attributable
to noncontrolling interests
|
(404)
|
|
|
(67)
|
|
|
(1,228)
|
|
|
(1,988)
|
|
Adjusted net income
attributable to WESCO
International, Inc.
|
$
|
55,564
|
|
|
$
|
58,135
|
|
|
$
|
225,892
|
|
|
$
|
227,343
|
|
|
|
|
|
|
|
|
|
Diluted
shares
|
42,210
|
|
|
46,179
|
|
|
43,487
|
|
|
47,199
|
|
Adjusted earnings per
diluted share
|
$
|
1.32
|
|
|
$
|
1.26
|
|
|
$
|
5.20
|
|
|
$
|
4.82
|
|
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SOURCE WESCO International, Inc.