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WCC · Wesco International

28 filings

10-K

WCC 10-K Annual Reports

Wesco International - 28 annual reports

Filing record · 2016–202610-K1210-Q338-K144

2025
Wesco International Annual Report, Year Ended Dec 31, 2025
WESCO International, Inc. reported net sales of $23.5 billion for 2025, up 7.8% from $21.8 billion in 2024, with organic sales growth of 8.6%. Management attributed growth mainly to the CSS segment, where net sales rose 18.3% to $9.1 billion on data center demand, and to the EES segment, where net sales rose 6.7% to $9.0 billion. The UBS segment declined 4.9% to $5.5 billion, reflecting reduced public power activity, partly offset by Broadband growth. Gross margin pressure was evident: cost of goods sold was 78.9% of net sales versus 78.4% in 2024, which management linked to competitive pressure in public power and large, lower-margin data center projects. Profitability was broadly flat on a GAAP basis. Net income attributable to common stockholders was $645.8 million, compared with $660.2 million, and diluted earnings per share was $13.05 in both years. Adjusted EBITDA rose 1.8% to $1,536.5 million, and adjusted diluted earnings per share increased to $12.91 from $12.23, aided by the June 2025 redemption of the Series A Preferred Stock, which was funded with $800 million of 6.375% Senior Notes due 2033. Operating cash flow fell sharply to $125.0 million from $1,101.2 million, driven mainly by a $507.3 million increase in trade receivables and a $428.1 million increase in inventories tied to growth in large projects. Balance sheet and capital allocation are central investor considerations. Total debt was $5.8 billion at year-end and the financial leverage ratio rose to 3.4x from 2.9x. Liquidity was approximately $1.6 billion, and the company stated it has no significant debt maturities until 2028. Management expects 2026 capital expenditures of approximately $100 million, and the Board's $1 billion repurchase authorization had approximately $413.9 million remaining, with no shares repurchased under it in the fourth quarter of 2025. The company reported that tariffs did not have a material effect on 2025 results, while noting that the longer-term impact remains uncertain.
Feb 13, 2026
2024
Wesco International Annual Report, Year Ended Dec 31, 2024
Wesco International, Inc. (NYSE: WCC), headquartered in Pittsburgh, Pennsylvania, is a business-to-business distribution, logistics and supply chain solutions provider operating through three segments: Electrical & Electronic Solutions (EES), Communications & Security Solutions (CSS) and Utility & Broadband Solutions (UBS). For 2024, net sales were $21.82 billion, down 2.5% from $22.39 billion in 2023. The filing attributes the decline mainly to volume decreases, particularly in UBS, and to the divestiture of the Wesco Integrated Supply (WIS) business, partly offset by price increases and CSS growth. Income from operations fell 13.0% to $1.22 billion, and net income attributable to common stockholders was $660.2 million, or $13.05 per diluted share, versus $708.1 million, or $13.54, in 2023. Adjusted EBITDA was $1.51 billion versus $1.71 billion, and adjusted EPS was $12.23 versus $14.60. Cash generation improved substantially. Operating cash flow was $1,101.2 million compared with $493.2 million in 2023, helped by a $329.5 million increase in accounts payable. The company repurchased $425.0 million of common stock, redeemed its $1.5 billion 7.125% notes due 2025, and issued $900 million of 6.375% notes due 2029 and $850 million of 6.625% notes due 2032. Total debt was $5.11 billion at year-end, and the financial leverage ratio was 2.9x, compared with 2.8x a year earlier. Liquidity was about $1.7 billion, including $1.2 billion of revolver availability and $383.0 million of cash. The company completed several acquisitions in 2024, including Ascent, entroCIM and Independent Electric Supply, and closed the WIS divestiture on April 1, 2024 for $354.9 million of consideration, which produced a $122.2 million gain. A post-period acquisition of Industrial Software Solutions closed on January 2, 2025 for $36.3 million. The auditor, PricewaterhouseCoopers LLP, issued an unqualified opinion on the financial statements and on internal control over financial reporting.
Feb 14, 2025
2023
Wesco International Annual Report, Year Ended Dec 31, 2023
Wesco International, Inc. ("Wesco"), headquartered in Pittsburgh, Pennsylvania, is a business-to-business distribution, logistics services and supply chain solutions provider operating through three segments: Electrical & Electronic Solutions (EES), Communications & Security Solutions (CSS) and Utility & Broadband Solutions (UBS). In 2023, net sales rose 4.5% to $22.39 billion from $21.42 billion, with organic sales growth of 3.2%, driven mainly by price changes of approximately 3% and the Rahi Systems acquisition, which contributed 2.1%. Income from operations declined 2.2% to $1.41 billion, and the operating margin fell to 6.3% from 6.7%, reflecting higher cost of goods sold as a percentage of net sales (78.4% versus 78.2%), higher SG&A, and digital transformation expenses. Net income attributable to common stockholders was $708.1 million, and diluted earnings per share were $13.54, compared with $15.33 in 2022. Adjusted EBITDA was $1.71 billion, down 1.2% year-over-year, and the financial leverage ratio improved to 2.8x from 2.9x. Cash flow and balance sheet activity were shaped by working capital changes. Operating cash flow was $493.2 million, compared with $11.0 million in 2022, as a $319.7 million decrease in accounts payable offset net income. Total debt was $5.36 billion at year-end, and the company had $736.0 million of available Revolving Credit Facility capacity and $75.0 million under its Receivables Facility. The company paid quarterly common dividends of $0.375 per share in 2023 and repurchased $75.0 million of common stock. Management expects to direct excess liquidity toward debt reduction, digital transformation, shareholder returns and potential acquisitions, and expects to refinance its $1.5 billion 7.125% Senior Notes due 2025 during 2024. The filing also highlights ongoing risks, including exposure to foreign currency fluctuations (about 26% of sales from foreign subsidiaries), variable-rate borrowings sensitive to interest rates (a 100 basis point change would alter interest expense by $25.2 million), reliance on key suppliers (the ten largest accounted for approximately 27% of purchases), and cybersecurity threats. Management reports that the company's internal control over financial reporting was effective as of December 31, 2023, and PricewaterhouseCoopers LLP issued an unqualified opinion.
Feb 20, 2024
2022
Wesco International Annual Report, Year Ended Dec 31, 2022
WESCO International, Inc. reported net sales of $21.4 billion for 2022, up 17.6% from $18.2 billion in 2021, with organic sales growth of 18.2%. The company attributed the increase mainly to price inflation, volume growth, secular demand trends and its cross-sell program. Cost of goods sold fell to 78.2% of net sales from 79.2%, and income from operations rose to $1.4 billion, or 6.7% of net sales, from $801.9 million in 2021. Net income was $862.1 million, and diluted earnings per share were $15.33 versus $7.84. Adjusted diluted earnings per share, which excludes merger-related and integration costs and other items, were $16.42, up 64.5% year over year. Cash generation was weak in 2022. Operating cash flow was only $11.0 million, as inventories increased $817.0 million and trade accounts receivable increased $690.6 million, partly offset by a $552.9 million increase in accounts payable. Capital expenditures were $99.4 million, and the company acquired Rahi Systems Holdings, Inc. for $255.4 million before cash acquired of $68.6 million. Total debt was $5.5 billion at December 31, 2022, with a financial leverage ratio of 2.9, down from 3.9 a year earlier. Available liquidity was $1.0 billion, and the company expects to repay or refinance approximately $3.1 billion of debt over the next three years. WESCO has not paid common stock dividends to date but expects to begin a quarterly cash dividend in the first quarter of 2023, subject to board approval. The board authorized up to $1 billion in share repurchases in May 2022, and the company repurchased $11.1 million of common stock during 2022. The filing also notes ongoing supply chain constraints and inflationary pressures that may extend into 2023, and a $1.0 billion-plus debt load that limits financial flexibility.
Feb 21, 2023
2021
Wesco International Annual Report, Year Ended Dec 31, 2021
WESCO International, Inc. reported a sharp rebound in 2021, driven mainly by the full-year contribution of its June 22, 2020 merger with Anixter International Inc. Net sales rose to $18.2 billion from $12.3 billion, an increase of 47.8%, with all three segments growing: Electrical & Electronic Solutions (EES) by 39.1%, Communications & Security Solutions (CSS) by 72.0%, and Utility & Broadband Solutions (UBS) by 38.5%. Income from operations increased to $801.9 million from $347.0 million, or 4.4% of net sales versus 2.8% a year earlier. Net income was $466.4 million compared with $100.0 million, and diluted earnings per share were $7.84 versus $1.51. Adjusted diluted earnings per share, which excludes merger-related and other items, were $9.98, up 128% year over year. Cash generation weakened sharply in 2021 as working capital absorbed cash to support growth. Operating cash flow was $67.1 million compared with $543.9 million in 2020, and free cash flow was $93.5 million versus $586.1 million. Trade accounts receivable increased by $531.8 million and inventories by $530.7 million, partially offset by a $449.6 million increase in accounts payable. Total debt was $4.8 billion at December 31, 2021, and the financial leverage ratio was 3.9, compared with a pro forma 5.3 at December 31, 2020. The company stated that it expects to repay or refinance approximately $1.3 billion of debt over the next three years. Management highlighted ongoing risks, including supply chain shortages, delays and price increases, inflationary pressures that it expects to extend into 2022, and continuing uncertainty from the COVID-19 pandemic. The company does not pay common dividends, and its revolving credit facility and senior note indentures limit dividends and share repurchases. It continues to pay dividends on its Series A Preferred Stock, which totaled $57.4 million in 2021.
Feb 25, 2022
2020
Wesco International Annual Report, Year Ended Dec 31, 2020
WESCO International, Inc., headquartered in Pittsburgh, Pennsylvania, is a business-to-business distributor, logistics and supply chain services provider. Its 2020 results reflect the June 22, 2020 acquisition of Anixter International Inc., which roughly doubled its revenue. Net sales were $12.3 billion in 2020 compared with $8.4 billion in 2019, an increase of 47.5% driven by the merger, partially offset by weakened demand from the COVID-19 pandemic. Net income attributable to common stockholders fell to $70.4 million, or $1.51 per diluted share, from $223.4 million, or $5.14 per diluted share, in 2019. Adjusted diluted EPS, which excludes merger-related and other items, was $4.37 versus $5.20 in 2019. Cash flow from operations was $543.9 million, and free cash flow, a non-GAAP measure, was $586.1 million. The merger substantially increased leverage. Total debt was $5.0 billion at December 31, 2020, and the financial leverage ratio was 5.3 on a pro forma basis, compared with 2.7 as reported for 2019. The company stated it must repay or refinance approximately $1.6 billion of debt over the next three years. Management said excess liquidity will be directed primarily to debt reduction and integration activities, and it reported total liquidity of $1.1 billion. The company redeemed its $500 million 5.375% Senior Notes due 2021 in January 2021 and announced the sale of Canadian legacy businesses for approximately $52 million, as required by a Canadian Competition Bureau consent agreement. WESCO does not pay common dividends, and its revolving credit facility and note indentures restrict dividends and share repurchases. The filing reports $3.19 billion of goodwill and $2.07 billion of net intangible assets. The EES reporting unit's estimated fair value exceeded its carrying value by less than 10%, which the company identified as a source of greater impairment susceptibility under adverse macroeconomic conditions. The auditor, PricewaterhouseCoopers LLP, issued an unqualified opinion, and management excluded Anixter Inc. from its internal control assessment, which represented about 30% of consolidated total assets and 37% of net sales.
Mar 1, 2021
2019-A
Wesco International Annual Report (Amendment), Year Ended Dec 31, 2019
This Form 10-K/A amendment, filed March 9, 2020 by WESCO International, Inc., supplies Part III information (Items 10 through 14) on directors, executive officers, governance, executive compensation, security ownership, related-party transactions and auditor fees. The financial statements are not included; the filing states they appear in the original Form 10-K filed February 24, 2020. The company reports record 2019 sales of $8.4 billion, up 2.2%, and record diluted EPS of $5.14, up 7%. Operating cash flow was $234 million and free cash flow was $180 million, or 81% of net income. Compensation disclosures show the 2019 short-term incentive paid no EBITDA-based payout (EBITDA of $411.5 million was 58.6% of target, against a $448.6 million target) and no free cash flow payout ($180.3 million, against a $220.2 million target). Performance shares for 2017 paid at 1.48 times target on the net income growth measure (7.4% three-year average growth) and nothing on relative TSR. Total stockholder return for 2019 was 24%. Shareholders approved the say-on-pay vote with over 94% support. The CEO's 2019 total compensation was $6,642,192, and the CEO pay ratio to the median employee was approximately 116 to 1. Governance details include a nine-member board, with eight directors determined to be independent. John J. Engel serves as Chairman, President and CEO. The filing also reports changes to the 2019 incentive design, including a move to 100% quantitative short-term incentive targets and a rise in the performance share weighting to 50%. PricewaterhouseCoopers LLP's fees were $2.2 million for 2019 and $2.3 million for 2018, and the filing reports no related-party transactions for 2019.
Mar 9, 2020
2019
Wesco International Annual Report, Year Ended Dec 31, 2019
WESCO International, Inc. reported record 2019 net sales of $8.36 billion, up $182.3 million, or 2.2%, from $8.18 billion in 2018. Organic sales growth was 2.6%, after foreign exchange rates and the number of workdays reduced net sales by 0.8% and 0.4%, and acquisitions added 0.8%. Income from operations was $346.2 million, compared with $352.4 million in 2018, and net income attributable to WESCO was $223.4 million. Diluted earnings per share were $5.14, versus $4.82 in 2018. Excluding $3.1 million of merger-related transaction costs, adjusted diluted earnings per share were $5.20. Cost of goods sold rose to 81.1% of net sales from 80.8%, which the filing attributes to a challenging pricing environment and business mix. Cash flow weakened, with operating cash flow of $224.4 million compared with $296.7 million in 2018, and free cash flow of $180.3 million compared with $260.5 million. Total indebtedness was $1.3 billion at December 31, 2019, and the financial leverage ratio was 2.8, up from 2.7. The company expects to repay or refinance approximately $942.6 million of debt over the next three years. Liquidity was $823.2 million, and the company repurchased $150.0 million of stock in 2019. WESCO does not pay dividends. The dominant event in the filing is the pending acquisition of Anixter International Inc., announced January 10, 2020, in a transaction valued at approximately $4.5 billion. Each Anixter share would receive $70.00 in cash, 0.2397 WESCO common shares and 0.6356 depositary shares of new WESCO Series A preferred stock, an implied value of $100.00 per Anixter share. WESCO stockholders would own 84% of the combined company. Closing requires Anixter stockholder approval and regulatory approvals in the United States, Canada, Mexico and Turkey, and the company anticipates closing in the second or third quarter of 2020. WESCO would pay a $190 million reverse termination fee in specified circumstances, and Anixter would pay a $100 million termination fee.
Feb 24, 2020
2018
Wesco International Annual Report, Year Ended Dec 31, 2018
WESCO International, Inc. reported record 2018 net sales of $8.18 billion, up 6.5% from $7.68 billion in 2017, with organic sales growth of 6.2% and growth in all end markets and geographies. Income from operations rose to $352.4 million from $319.0 million, and net income attributable to WESCO International was $227.3 million, or $4.82 per diluted share, compared with $3.38 in 2017. The 2017 results included $26.4 million of discrete tax expense from the Tax Cuts and Jobs Act. Operating cash flow was $296.7 million, and free cash flow, a non-GAAP measure, was $260.5 million versus $127.6 million in 2017. The company ended 2018 with $1.23 billion of total debt and a financial leverage ratio of 3.0, down from 3.6 a year earlier. Available liquidity was $824.0 million, including $515.9 million under the Revolving Credit Facility, $275.0 million under the Receivables Facility, and $33.1 million of cash. Over the next three years, the company must repay or refinance approximately $883.3 million of debt. Share repurchases totaled $125.0 million under a repurchase authorization that was increased to $400 million in October 2018, and the company does not pay dividends. Management highlighted growth engines including global accounts, integrated supply, utilities, communications, lighting and sustainability, and acquisitions. Risk factors cited include competition, supplier concentration (Eaton Corporation was about 11% of purchases), commodity price swings, cybersecurity, and exposure to oil and gas and metals and mining end markets. A January 16, 2019 press release announced a definitive agreement for WESCO Services, LLC to acquire certain assets of Sylvania Lighting Solutions from OSRAM Sylvania, with closing expected in March 2019.
Feb 27, 2019
2017
Wesco International Annual Report, Year Ended Dec 31, 2017
WESCO International, Inc. reported a return to growth in 2017, with net sales of $7.68 billion, up 4.7% from $7.34 billion in 2016. Organic sales growth was 4.5%, with foreign exchange and acquisitions adding 0.4% and 0.2%, partly offset by a 0.4% impact from the number of workdays. Income from operations declined to $320.9 million from $332.1 million, reflecting lower gross margin and the restoration of incentive and discretionary compensation. Net income attributable to WESCO International rose to $163.5 million from $101.6 million, but the comparison is flattered by a $123.9 million non-cash loss on debt redemption in 2016. Diluted EPS was $3.38, including a $26.4 million, or $0.55 per diluted share, provisional discrete tax expense from the Tax Cuts and Jobs Act; adjusted diluted EPS was $3.93. Cash generation weakened in 2017. Operating cash flow was $149.1 million versus $300.2 million in 2016, and free cash flow was $127.6 million versus $282.2 million, as inventory and trade receivables increased with higher backlog and sales. The financial leverage ratio was 3.5 at both year-ends, and liquidity was $793.8 million at December 31, 2017, including $562.9 million of revolving credit availability and $170.0 million of receivables facility availability. Total debt was $1.36 billion, with $512.8 million to be repaid or refinanced over the next three years. The company authorized a new repurchase of up to $300 million of common stock through December 31, 2020, and repurchased $106.8 million of stock in 2017, though none under the new authorization as of year-end. The filing also discloses that the company revised its December 31, 2016 balance sheet to correct overstated income tax balances, and that it has not paid dividends and does not currently plan to. Management expects capital expenditures in 2018 to be higher than in 2017.
Feb 22, 2018
2016
Wesco International Annual Report, Year Ended Dec 31, 2016
WESCO International, Inc. reported net sales of $7.34 billion for 2016, down 2.4% from $7.52 billion in 2015, with normalized organic sales down 4.9% as acquisitions (+3.1%) and workdays (+0.4%) were offset by a 1.0% foreign exchange decrease. Income from operations fell to $332.0 million from $373.7 million, and net income attributable to WESCO International declined 51.8% to $101.6 million. Diluted EPS was $2.10 versus $4.18 in 2015, and the company cited adjusted diluted EPS of $3.80 excluding the non-cash loss on debt redemption of $123.9 million (about $1.70 per share of the convertible debt conversion impact). The company strengthened its capital structure in 2016 by redeeming its 6.0% Convertible Senior Debentures due 2029 for $344.8 million in cash and issuing $350 million of 5.375% Senior Notes due 2024. Total debt was $1.40 billion at year-end, the financial leverage ratio improved to 3.5 from 3.8, and operating cash flow was $300.2 million, producing free cash flow of $282.2 million. Liquidity totaled $704.6 million, and the company was in compliance with all debt covenants. WESCO is a North American electrical, industrial and communications distributor with about 500 branches and nine distribution centers, serving roughly 75,000 customers. Sales are 77% United States, 19% Canada and 1% Mexico. The company repurchased 2,468,576 shares for $150.0 million under a $300 million authorization running through December 31, 2017, and it does not pay dividends. Goodwill and indefinite-lived intangibles totaled $1.82 billion, with no impairments recorded to date.
Feb 22, 2017
2015
Wesco International Annual Report, Year Ended Dec 31, 2015
WESCO International, Inc. reported net sales of $7,518.5 million for 2015, a decrease of 4.7% from $7,889.6 million in 2014. Normalized organic sales decreased 3.3%, foreign exchange rates negatively impacted sales by 3.4%, and acquisitions contributed a positive 2.0%. Income from operations fell to $373.7 million from $466.2 million, and net income attributable to WESCO International, Inc. was $210.7 million, a decrease of 23.6%. Diluted earnings per share were $4.18, compared with $5.18 in 2014. Management attributed the results primarily to continued weakness in commodity-driven end markets and unfavorable currency changes, partially offset by cost reduction actions. Cash flow from operations was $283.1 million in 2015, and free cash flow was $261.4 million. Total debt including debt discount was $1,665.4 million at December 31, 2015, and the financial leverage ratio based on total debt rose to 3.8 from 3.0. Stockholders' equity declined to $1.8 billion, reflecting a $225.8 million foreign currency translation loss and $150.0 million of share repurchases under the program announced in December 2014. The company completed the Hill Country and Needham Electric acquisitions in 2015 and states that it has no plans to pay dividends. The company also disclosed an approximately $1,773.6 million combined goodwill and indefinite-lived intangible balance and noted that one reporting unit with $186.7 million of goodwill had a fair value approximately 5% above its carrying value. The filing reports that a New York County District Attorney investigation is ongoing, and that the company cannot reasonably estimate a range of exposure. Management expects 2016 capital expenditures to be at levels similar to 2015.
Feb 22, 2016
2014
Wesco International Annual Report, Year Ended Dec 31, 2014
WESCO International, Inc. reported net sales of $7,889.6 million for 2014, up 5.0% from $7,513.3 million in 2013. Organic sales grew 5.6%, acquisitions contributed 1.4%, and foreign exchange and number of workdays reduced sales by 1.6% and 0.4%, respectively. Income from operations was $466.2 million, compared with $481.0 million in 2013, and net income attributable to WESCO International, Inc. was $275.9 million, or $5.18 diluted earnings per share, versus $5.25 in 2013. Management described 2014 as a year in which the company re-established organic sales growth, integrated three acquisitions (LaPrairie, Hazmasters and Hi-Line), and increased profitability. The company's adjusted results for 2013 excluded a $36.1 million ArcelorMittal litigation recovery recorded in SG&A. The balance sheet carried total debt of $1,415.6 million (or $1,585.9 million including debt discount) at December 31, 2014, with a financial leverage ratio of 3.0 times on total debt, down from 3.2 times. Total liquidity was $637.7 million, and cash and cash equivalents were $128.3 million, of which $107.1 million was held by foreign subsidiaries. Operating cash flow was $251.2 million and free cash flow was $230.7 million, compared with $308.4 million in 2013. The company's Board approved a repurchase of up to $300 million of common stock through December 31, 2017, and no shares had been repurchased under that authorization as of year-end. WESCO does not pay dividends and states that earnings will be reinvested in business growth, debt reduction, acquisitions and share repurchases. The principal ongoing legal matter is the ArcelorMittal Indiana Harbor lawsuit, where the Indiana Court of Appeals on November 10, 2014 reversed the prejudgment interest award but otherwise affirmed the underlying judgment, and a petition for further review is pending before the Indiana Supreme Court. The company also disclosed a Delaware unclaimed property audit and a New York County District Attorney investigation involving minority and disadvantaged business contracting, for which it could not estimate a range of exposure.
Feb 24, 2015
2013
Wesco International Annual Report, Year Ended Dec 31, 2013
WESCO International, Inc. reported 2013 net sales of $7.51 billion, up 14.2% from $6.58 billion in 2012, with acquisitions contributing 14.6% of the increase and organic sales flat. Income from operations rose to $481.0 million from $332.9 million, and net income attributable to WESCO International, Inc. increased 37.0% to $276.4 million, or $5.25 diluted earnings per share (versus $3.95 in 2012). The growth was driven primarily by the integration of EECOL Electric, acquired in December 2012, and the reversal of a $36.1 million ArcelorMittal litigation charge recorded in 2012. The balance sheet and cash flow picture improved over the year. Operating cash flow was $315.1 million and free cash flow was $308.4 million, which the company defines as a non-GAAP measure. Total debt fell to $1.49 billion from $1.74 billion, and the financial leverage ratio based on total debt was 3.2 at year-end versus 4.7 a year earlier. Liquidity totaled $605.6 million, including $512.2 million of available revolving credit capacity. The company refinanced its term loan in part with $500 million of 5.375% Senior Notes due 2021 issued in November 2013, which triggered a $13.2 million loss on debt extinguishment. Investors should note the concentration of risk and the ongoing commitments disclosed in the filing. The company paid no dividends and expects to reinvest earnings in growth, debt reduction and acquisitions. Goodwill and indefinite-lived intangibles totaled $1.84 billion, about 40% of total assets, and the filing identifies a $16.6 million trademark as most sensitive to a decline in performance. The largest supplier accounted for approximately 12% of purchases, and the ten largest for approximately 31%. The company also disclosed that it completed the LaPrairie acquisition, with annual sales of approximately $30 million, in the first quarter of 2014.
Feb 21, 2014
2012
Wesco International Annual Report, Year Ended Dec 31, 2012
WESCO International, Inc. reported 2012 net sales of $6,579.3 million, up 7.4% from $6,125.7 million in 2011, with acquisitions contributing 3.3% of the increase and foreign exchange reducing sales by 0.3%. Income from operations was $332.9 million, flat with 2011, as a $36 million fourth-quarter charge tied to the ArcelorMittal jury verdict offset growth. Net income attributable to WESCO International, Inc. rose to $201.8 million from $196.3 million, and diluted earnings per share were $3.95 versus $3.96 in 2011. Net sales grew across North America and internationally, with the United States representing 79% of 2012 sales. The company's balance sheet expanded significantly due to acquisitions, most notably EECOL Electric Corporation, acquired on December 14, 2012 for approximately $1.1 billion at closing. Total assets rose to $4,629.6 million from $3,078.5 million, and total debt increased to $1,735.2 million from $649.3 million, funded largely by a new $850.0 million term loan facility due 2019 and borrowings under the revolving credit facility. Cash flow from operations was $288.2 million, compared with $167.5 million in 2011, and total available borrowing capacity at year-end was $299.0 million. The company stated it does not presently plan to pay dividends. The filing also discloses a lawsuit by ArcelorMittal Indiana Harbor, Inc. in which a jury awarded approximately $36 million against WESCO Distribution, Inc. on February 14, 2013. WESCO disputes the outcome, intends to appeal, and has submitted the claims to its insurance carriers. The company's largest supplier accounted for approximately 12% of 2012 purchases, and its ten largest suppliers accounted for approximately 31%.
Mar 1, 2013
2011
Wesco International Annual Report, Year Ended Dec 31, 2011
WESCO International, Inc. (NYSE: WCC) reported net sales of $6,125.7 million for 2011, up from $5,063.9 million in 2010, with sales increasing 21.0%. The filing attributes growth to improving conditions in served markets, higher product prices and costs, favorable foreign currency (0.8% positive impact), and acquisitions (6.8% positive impact). Income from operations rose to $332.9 million from $210.9 million, and net income attributable to WESCO International, Inc. was $196.3 million, or $3.96 per diluted share, compared with $2.50 in 2010. Cost of goods sold fell to 79.8% of net sales from 80.3%, and SG&A fell to 14.2% of sales from 15.1%. Cash generation and liquidity improved in 2011, with operating cash flow of $167.5 million and capital expenditures of $33.3 million. Total debt was $649.3 million at year-end, with $499.3 million of total available borrowing capacity. Management expects 2012 capital expenditures at levels similar to 2011 and expects excess cash to go primarily to debt reduction and acquisitions. The company does not pay dividends and its revolving credit facility and 2017 Notes restrict dividend payments. Key risks include a pending lawsuit in Indiana state court seeking approximately $50 million in damages over allegedly defective products, for which no liability has been recorded. The company also disclosed that Stephen A. Van Oss was appointed interim Chief Financial Officer on February 3, 2012, and that it completed the acquisition of RS Electronics on January 3, 2012, with approximately $60 million in annual sales.
Feb 22, 2012
2010
Wesco International Annual Report, Year Ended Dec 31, 2010
WESCO International, Inc. reported net sales of $5,063.9 million for 2010, up 9.5% from $4,624.0 million in 2009, with income from operations of $210.9 million (up from $180.0 million) and net income of $115.5 million, or $2.50 per diluted share (compared with $2.46 in 2009). Management attributed the improvement to improved conditions in served markets, higher product prices and costs, favorable foreign currency rates, and the acquisitions completed in 2010. Cost of goods sold was 80.3% of net sales versus 80.5% in 2009, and SG&A rose to $763.6 million, or 15.1% of sales. Operating cash flow fell to $127.3 million from $291.7 million in 2009, driven by working capital investment to fund growth. The company completed two acquisitions in 2010: Potelcom Supply, Inc. and TVC Communications, L.L.C., the latter in December 2010 for a cash purchase price of approximately $251.0 million net of cash acquired, which expanded its communications product lines. Stockholders' equity increased to $1,148.6 million at year-end, and total debt was $729.9 million on the balance sheet ($908.3 million of consolidated indebtedness before debt discount). Total available borrowing capacity was $325.5 million at December 31, 2010, and the company stated it was in compliance with all debt covenants. The filing also highlights ongoing exposure to a $52 million lawsuit in Indiana alleging the sale of defective products, for which no liability was recorded, and the company's plan to redeem its remaining 1.75% Convertible Senior Debentures due 2026 during 2011. Management expects 2011 capital expenditures to increase by approximately $10.0 million to $25.0 million.
Feb 25, 2011
2009
Wesco International Annual Report, Year Ended Dec 31, 2009
WESCO International, Inc. reported net sales of $4,623,954 thousand ($4.62 billion) for fiscal 2009, down 24.3% from $6,110.8 million in 2008. Income from operations fell 47.9% to $180.0 million, and net income decreased 48.5% to $105.1 million, or $2.46 per diluted share versus $4.71 in 2008. Cost of goods sold rose to 80.5% of net sales from 80.3%, while SG&A fell 16.8% to $693.9 million, though SG&A as a share of sales rose to 15.0%. Management attributed the sales decline to weak end-market conditions, lower commodity prices and unfavorable foreign currency rates. The company describes itself as a leading North American distributor of electrical and industrial MRO and OEM products, with about 380 branches and seven distribution centers, over 100,000 customers and approximately 6,100 employees at year-end 2009. Balance sheet and liquidity improved during the year. Total debt was $691.8 million at December 31, 2009, down from $1,100.3 million, after an August 2009 exchange offer that issued $345.0 million of 6.0% Convertible Senior Debentures due 2029 in exchange for approximately $299.7 million of 2026 Debentures and $57.7 million of 2025 Debentures. Operating cash flow was $291.7 million, cash rose to $112.3 million, and stockholders' equity increased to $996.3 million. Total available borrowing capacity was $350.1 million, and the company stated it was in compliance with its debt covenants. Management expects 2010 demand to fall approximately 3% to 5% from 2009 levels, with continued contraction in non-residential construction and utility markets. Key risks include the $874.5 million of consolidated indebtedness and the expected repayment of about $146.7 million over the next three years, with holders of the 2025 Debentures able to require repurchase in October 2010. The company also disclosed a co-defendant lawsuit in Indiana seeking $52 million in damages, for which no liability has been recorded.
Feb 26, 2010
2008
Wesco International Annual Report, Year Ended Dec 31, 2008
WESCO International, Inc. reported net sales of $6,110.8 million for 2008, up 1.8% from $6,003.5 million in 2007, with net income of $212.7 million, or $4.91 per diluted share, compared with $240.6 million and $4.99 in 2007. The company described itself as a leading North American provider of electrical construction products and electrical and industrial MRO supplies, operating approximately 400 branches and seven distribution centers. Operating income decreased 12.3% to $345.7 million, primarily due to the partial divestiture of its LADD operations in January 2008, in which it sold 60% of LADD to Deutsch and retained a 40% equity interest. Management stated that activity levels in its major end markets are expected to be significantly weaker in 2009 than in 2008. Liquidity was supported by operating cash flow of $279.9 million, which funded $74.8 million of share repurchases and $35.3 million of capital expenditures, and cash rose to $86.3 million at year-end. Total debt was $1,140.8 million, stockholders' equity was $732.0 million, and the company reported $382.2 million of total liquidity, including $119.4 million of available revolver capacity and $205.0 million under its Receivables Facility. Management said it expects excess cash to be directed primarily toward debt reduction, and that capital expenditures would decrease by approximately $19.0 million in 2009. The company also disclosed that FSP APB 14-1 will reduce long-term debt by an estimated $252.5 million and decrease 2009 earnings per share by $0.10 to $0.12 in the year of adoption. A customer lawsuit in Indiana seeks $52 million in damages, which WESCO has denied and intends to defend.
Feb 27, 2009
2007-A
Wesco International Annual Report (Amendment), Year Ended Dec 31, 2007
This Amendment No. 1 to WESCO International, Inc.'s Form 10-K for the year ended December 31, 2007 was filed to correct a clerical error: the name of the independent registered public accounting firm, PricewaterhouseCoopers LLP, had been omitted from its report in Item 8. The amendment makes no other changes to the financial statements. The filing reproduces the full audited financial statements, which show net sales of $6,003,452 thousand in 2007, up from $5,320,603 thousand in 2006, and net income of $240,631 thousand, up from $217,320 thousand. Diluted earnings per share were $4.99 in 2007 versus $4.14 in 2006. PricewaterhouseCoopers issued an unqualified opinion that the financial statements are fairly presented and that internal control over financial reporting was effective as of December 31, 2007. The balance sheet shows total assets of $2,859,887 thousand and total stockholders' equity of $608,476 thousand, down from $763,227 thousand a year earlier. The decline reflects the repurchase of approximately 7.1 million shares for $430.6 million during 2007, while total debt rose to $1,316,287 thousand from $1,140,314 thousand. Cash provided by operating activities was $262,278 thousand in 2007, compared with $207,083 thousand in 2006. Subsequent events include the January 2, 2008 formation of a joint venture with Deutsch Engineered Connecting Devices, in which WESCO holds a 40% interest in its former LADD operations, and a pre-tax gain of approximately $3.0 million from that transaction.
Mar 5, 2008
2007
Wesco International Annual Report, Year Ended Dec 31, 2007
WESCO International, Inc. (NYSE: WCC) reported net sales of $6.0 billion for 2007, up 12.8% from $5.32 billion in 2006, and net income of $240.6 million, up 10.7%. Diluted earnings per share rose 20.5% to $4.99. Income from operations increased 8.0% to $394.2 million, which management attributed mainly to acquisitions and cost containment. The company describes itself as a leading North American provider of electrical construction products and MRO supplies, with more than 400 branches and seven distribution centers, about 110,000 customers, and over 1,000,000 products from more than 24,000 suppliers. The balance sheet carries significant leverage. As of December 31, 2007, consolidated indebtedness was $1.3 billion against stockholders' equity of $608.5 million, down from $763.2 million a year earlier, mainly because of $430.8 million of stock repurchases. Of the debt, $480.0 million was drawn under the accounts receivable securitization facility and $187.3 million under the revolving credit facility, with about $146.2 million of revolver availability at year end. Interest expense rose to $63.2 million from $24.6 million, largely because the receivables facility was reclassified as a secured borrowing in December 2006. Management expects activity in its major end markets to be somewhat softer in 2008 than in 2007, while still seeing opportunities in industrial and commercial construction. The company disclosed a pending $52 million product-defect lawsuit in Indiana, which it says it will vigorously defend. Subsequent to year end, WESCO formed a joint venture with Deutsch Engineered Connecting Devices for its LADD operations, receiving about $75 million for a 60% stake, and it has a $400 million share repurchase program authorized through September 30, 2009.
Feb 29, 2008
2006
Wesco International Annual Report, Year Ended Dec 31, 2006
WESCO International, Inc. reported 2006 net sales of $5,320.6 million, up 20.3% from $4,421.1 million in 2005, with net income of $217.3 million (diluted EPS of $4.14, versus $2.10 in 2005). Management attributed growth to strong growth in served markets, acquisitions (sales from recent acquisitions were $506.6 million, about 9.1% of the sales increase), price increases, and productivity initiatives. Gross margin rose to 20.4% from 19.0%, and SG&A fell to 13.0% of sales from 13.9%, which lifted income from operations to $364.9 million, up 74.4%. The balance sheet changed materially in 2006. The November 2006 acquisition of Communications Supply Holdings, Inc. for approximately $536 million was funded with 1.75% Convertible Senior Debentures due 2026 ($300 million), revolver borrowings, and the Receivables Facility. Total debt rose to $1,140.3 million at year-end, against stockholders' equity of $763.2 million. Because the December 2006 amendment to the Receivables Facility removed the sale treatment for receivables, $390.5 million of receivables returned to the balance sheet, and related costs will move to interest expense in 2007. Operating cash flow was $207.1 million, down from $295.1 million in 2005. Subsequent events include a board-authorized stock repurchase program of up to $400 million (announced February 1, 2007) and an amendment increasing the Receivables Facility commitment from $400 million to $500 million. The filing also notes a pending jury trial in April 2007 in a Florida lawsuit in which a former supplier seeks more than $17 million in damages. Management expects overall economic growth to continue through 2007 and plans to use cash flow and credit facilities to pay down debt, repurchase shares and fund acquisitions.
Mar 1, 2007
2005
Wesco International Annual Report, Year Ended Dec 31, 2005
WESCO International, Inc. reported net sales of $4,421.1 million for fiscal 2005, up from $3,741.3 million in 2004, with net income of $103.5 million, or $2.10 per diluted share, compared with $64.9 million, or $1.47 per diluted share, in 2004. The filing attributes the sales increase primarily to strong growth in markets served, acquisitions and market share gains, and states that sales volume contributed the largest share of growth, with price increases of approximately 4.0% and acquisitions contributing about 2.8%. Income from operations rose to $209.3 million, or 4.7% of net sales, and the company credits sales growth, acquisitions and cost containment. Selling, general and administrative expenses fell to 13.9% of sales from 14.6% in 2004, and interest expense declined to $30.2 million from $40.8 million as the company refinanced its 9.125% Senior Subordinated Notes due 2008 with lower-cost debt. The balance sheet strengthened with stockholders' equity rising to $491.5 million from $353.6 million, but total long-term debt, including current portion, was $403.6 million at year-end. In 2005 the company completed the acquisitions of Carlton-Bates Company for approximately $248.5 million net of cash acquired and Fastec Industrial Corp. for $28.7 million net of cash acquired, financed partly through a receivables facility and the issuance of $150 million of 7.50% Senior Subordinated Notes due 2017 and $150 million of 2.625% Convertible Senior Debentures due 2025. Operating cash flow was $295.1 million, including $189.0 million drawn under the Receivables Facility. The company's management expects overall economic growth to continue through 2006, with improved margin and productivity expected to produce enhanced financial performance. The filing also discloses a pending lawsuit from a former supplier seeking damages in excess of $17 million, with a trial scheduled for October 2006, and a subsequent event in which Dana Corporation's U.S. domestic entities filed for Chapter 11 protection, with $9.7 million of receivables due from them as of March 3, 2006.
Mar 15, 2006
2004
Wesco International Annual Report, Year Ended Dec 31, 2004
WESCO International, Inc. reported 2004 net sales of $3,741.3 million, up 13.8% from $3,286.8 million in 2003, with net income of $64.9 million and diluted earnings per share of $1.47 versus $0.65 in 2003. Gross profit rose to $712.1 million, with the gross margin percentage at 19.0% compared with 18.6%, and income from operations increased to $149.4 million from $86.0 million. The company describes itself as the second largest distributor in the estimated $83 billion U.S. electrical distribution industry and the largest provider of integrated supply services for MRO goods in the United States, with about 350 branches and five distribution centers. The balance sheet strengthened as stockholders' equity rose to $353.6 million from $167.7 million, driven by a December 2004 public offering of 4.0 million shares (net proceeds of approximately $99.6 million, designated to repurchase senior subordinated notes). Consolidated indebtedness was $417.6 million at year-end, and on March 1, 2005 the company redeemed $123.7 million of its 9 1/8% senior subordinated notes at a net loss of $6.3 million. The filing notes that the company is significantly leveraged, that a $190.0 million portion of its Receivables Facility requires annual renewal (expiring August 30, 2005), and that the Bruckner earnout was converted into a $50 million note. The filing also highlights risks including dependence on a few suppliers (the ten largest accounted for approximately 35% of purchases, with Eaton Corporation about 12%), and a 28% stake held by Cypress Group LLC. The company has not paid dividends and does not presently plan to, and it was in compliance with all covenants at December 31, 2004.
Mar 7, 2005
2003
Wesco International Annual Report, Year Ended Dec 31, 2003
WESCO International, Inc. reported net sales of $3.29 billion for 2003, down approximately $39 million, or 1.2%, from 2002. The company describes itself as the second largest distributor in the estimated $74 billion U.S. electrical distribution industry and the largest provider of integrated supply services. Income from operations rose 12.3% to $86.1 million, driven by an 80 basis point improvement in gross margin to 18.6%, while lower receivables facility fees and lower debt reduced financing costs. Net income was $30.0 million, or $0.65 per diluted share, compared with $23.1 million, or $0.49 per diluted share, in 2002. The effective tax rate was 23.2%, versus 11.0% in 2002. The balance sheet remained highly leveraged. Total debt was $422.2 million at December 31, 2003, against stockholders' equity of $167.7 million. Operating cash flow was $35.8 million, which included a $68.0 million outflow from a reduction in the Receivables Facility. The company repurchased 4.3 million Class B common shares for $27.3 million in December 2003 and redeemed employee stock options for a $20.1 million cash payment made in January 2004. Management accrued an $80 million liability for the Bruckner acquisition earnout, which is largely payable in 2004. The company has paid no dividends and expects to retain earnings for growth or debt reduction. Cypress and its affiliates hold approximately 48% of the common stock and can exert significant influence over the company. Management's 2004 outlook calls for improved operating performance from margin expansion and cost containment if the forecast economic recovery occurs, with capital expenditures expected to rise by approximately $7 million. The filing also discloses that the Audit Committee engaged independent counsel to review cash management and expense reimbursement practices at one branch, representing approximately 2% of sales. Management does not believe the amounts involved are material.
Mar 15, 2004
2002
Wesco International Annual Report, Year Ended Dec 31, 2002
WESCO International, Inc. reported net sales of $3,325.8 million for 2002, down from $3,658.0 million in 2001, as weak industrial and MRO demand reduced volumes. Gross profit fell to $590.8 million, with gross margin of 17.8% versus 17.6% a year earlier, while SG&A declined to $494.4 million. Income from operations was $76.6 million compared with $95.3 million, and net income rose to $23.1 million ($0.49 diluted EPS) from $20.2 million ($0.43), helped by a $5.3 million reversal of income tax contingency accruals that lowered the effective tax rate to 11.0%. Operating cash flow fell sharply to $20.4 million from $161.1 million, principally due to a decrease in accounts payable. The balance sheet shows total debt of $418.0 million and stockholders' equity of $169.3 million at year-end 2002. Cash fell to $22.6 million, and the company repaid debt through a $290 million 2002 Revolving Credit Facility maturing in 2007 and a $51 million mortgage facility, of which $13 million was drawn. The Receivables Facility, which removed $293.0 million of receivables from the balance sheet, requires annual renewal and expires June 20, 2003. Management stated it expects sufficient cash for foreseeable requirements, and the company has no specific near-term acquisition plans. Cypress and its affiliates own approximately 44% of common stock and can exercise significant influence. For investors, the key points are the thin net margin of 0.7%, the reliance on the Receivables Facility and revolving credit availability, the approximately $110 million of variable-rate debt, and the restriction on dividends, which the company does not plan to pay. The company also repurchased no shares in 2002 under its $25 million authorization, which expires in May 2003.
Mar 18, 2003
2001
Wesco International Annual Report, Year Ended Dec 31, 2001
WESCO International, Inc. reported net sales of $3.66 billion for 2001, down from $3.88 billion in 2000, with net income of $20.2 million, or $0.43 per diluted share, compared with $33.4 million, or $0.70 per share, a year earlier. The company describes itself as a leading North American provider of electrical construction products and electrical and industrial MRO supplies, the second largest distributor in the U.S. electrical distribution industry, and the largest provider of integrated supply services. Management attributes the sales decline mainly to an 8.6% drop in core operations, driven by weakness in telecom and semiconductor markets, reduced industrial MRO and capital spending, and lower control and automation product sales. Core sales for the two months ended February 28, 2002 were down approximately 12% from the prior-year period. The balance sheet and liquidity picture drove much of the filing's discussion. Total long-term debt including current portion was $452.0 million at year-end 2001, and stockholders' equity was $144.7 million. In March 2002 the company entered into a $290 million revolving credit agreement secured by substantially all inventory and Canadian receivables, with the proceeds used to retire its prior revolving facility. Cash flow from operations rose to $161.1 million in 2001 from $46.9 million in 2000, largely due to working capital improvement, though the filing notes that the receivables securitization program used $45.0 million of cash in 2001. The company does not pay dividends and has a share repurchase program, which the new credit facility permits subject to financial ratios. Investors should note several risks the filing highlights: significant leverage, with approximately $169 million of variable-rate debt; restrictive covenants in the credit facility and senior subordinated notes; and controlling shareholders, Cypress and its affiliates, who own approximately 44% of common stock. The filing also states that adoption of SFAS No. 142 is expected to have a material non-cash impact on results because goodwill will no longer be amortized, with goodwill amortization of $11.9 million in 2001. Management expects 2002 capital expenditures similar to 2001 but significantly lower acquisition spending, and anticipates working capital requirements could increase by $50 million or more in 2002.
Mar 29, 2002
2000
Wesco International Annual Report, Year Ended Dec 30, 2000
WESCO International, Inc. reported net sales of $3,881.1 million for 2000, up from $3,423.9 million in 1999, with net income of $33.4 million, or $0.70 per diluted share, compared with $24.6 million, or $0.53 per diluted share, in 1999. The company describes itself as the second largest distributor in the $79 billion U.S. electrical distribution industry and as the largest provider of Integrated Supply services for MRO goods in the United States. Growth came mainly from core operations, which the filing says rose almost 10%, with the rest attributable to acquired businesses. Results were held back by a $9.4 million restructuring charge in the fourth quarter, which included the closure of fourteen branches, and $11.4 million of other charges; excluding the restructuring charge, income before extraordinary item was $39.4 million, or $0.83 per diluted share. Balance sheet and cash flow items warrant attention. Total long-term debt including current portion was $483.3 million at year-end 2000, mostly a $189.6 million revolving credit facility and $291.5 million of 9 1/8% senior subordinated notes. Operating cash flow was $46.9 million, and the company spent $40.9 million on acquisitions and $21.6 million on capital expenditures. Stockholders' equity was $125.0 million, and the company repurchased about 3.3 million shares in 2000 for approximately $28.1 million. The filing states that no dividends were paid and none are intended in the foreseeable future. In March 2001, WESCO completed the acquisition of Herning Underground Supply, Inc. and Alliance Utility Products, Inc., distributors of gas, lighting and communication utility products with 2000 net sales of approximately $112 million. The company also disclosed that in February 2001 it increased the amount of receivables sold under its securitization program to $396 million from $375 million.
Apr 2, 2001