01—Abstract
Summary
Summary of the 10-K filed February 14, 2025. Cited figures are marked; the original filing is the authoritative source.
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 billiona, 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 billionb 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 millionc 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 milliond 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.
02—Key points
Key Highlights
- Net sales declined 2.5% to $21.82 billion, with organic sales down 0.6%, reflecting roughly a 2% volume decline and about a 1% price benefit.
- Income from operations fell 13.0% to $1.22 billion (5.6% of net sales, versus 6.3% in 2023), and adjusted EBITDA fell 11.5% to $1.51 billion.
- Diluted EPS was $13.05 versus $13.54; adjusted diluted EPS was $12.23 versus $14.60.
- Operating cash flow rose to $1,101.2 million from $493.2 million, with a $329.5 million increase in accounts payable as a key contributor.
- The company returned capital through $425.0 million of share repurchases, $81.5 million of common dividends and $57.4 million of Series A preferred dividends.
- Refinanced the $1.5 billion 7.125% notes due 2025 with new $900 million 6.375% notes due 2029 and $850 million 6.625% notes due 2032; leverage ratio was 2.9x.
- The UBS segment's organic sales declined 5.2%, while CSS organic sales grew 4.3%, led by data center solutions.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2024, Wesco International kept $0.03.
- Revenue$21.82B100.0%
- Cost of revenue−$17.11B78.4%
- Gross profit$4.71B21.6%
- Operating costs−$3.49B16.0%
- Operating income$1.22B5.6%
- Interest, other & tax−$505.6M2.3%
- Net income$717.6M3.3%
Where FY2024 revenue went
$21.82B- Cost of revenue: $17.11B, 78% of revenue
- SG&A: $3.31B, 15% of revenue
- Net income: $717.6M, 3.3% of revenue
- Other operating costs: $183.2M, 0.8% of revenue
- Interest, other & tax: $505.6M, 2.3% of revenue
Kept 3.3% as net incomeNet income $717.6M · 3.3%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2024filed February 14, 2025Financial Statements
FY2024 against FY2023
| Line item | FY2024FY2023 | Change |
|---|---|---|
| Revenue | $21.82B$22.39B | −2.5% |
| Cost of Revenue | $17.11B$17.54B | −2.5% |
| Gross Profit | $4.71B$4.84B | −2.7% |
| SG&A Expenses | $3.31B$3.26B | +1.5% |
| Operating Income | $1.22B$1.41B | −13.0% |
| Net Income | $717.60M$765.50M | −6.3% |
| EPS (Basic) | $13.26$13.86 | −4.3% |
| EPS (Diluted) | $13.05$13.54 | −3.6% |
| Shares Outstanding (Basic) | 49.80M51.10M | −2.5% |
| Shares Outstanding (Diluted) | 50.60M52.30M | −3.3% |
05—Questions
Frequently Asked Questions
Why did Wesco's sales and earnings decline in 2024?
Net sales fell 2.5% to $21.82 billion. The filing attributes this to an estimated volume decline of about 2%, driven mainly by UBS and, to a lesser extent, EES, and to the divestiture of the WIS business, which reduced sales by 2.6%. Price increases of about 1% and a favorable workday count partly offset these factors. Income from operations also declined because of higher facilities and IT costs, partly offset by lower professional services and consulting fees.
How did the segments perform?
EES net sales fell 0.7% to $8.55 billion, with organic sales down 1.0%, and adjusted EBITDA was $717.5 million (8.4% margin). CSS net sales rose 5.4% to $7.54 billion, with organic sales up 4.3%, but adjusted EBITDA fell to $621.1 million (8.2% margin from 9.6%). UBS net sales fell 13.4% to $5.74 billion, with organic sales down 5.2%, and adjusted EBITDA was $643.4 million (11.2% margin).
How strong is the balance sheet and liquidity position?
Total debt was $5.11 billion at December 31, 2024, and net debt was $4.41 billion after cash of $702.6 million. The financial leverage ratio was 2.9x, up from 2.8x. Liquidity was approximately $1.7 billion, comprising about $1.2 billion of Revolving Credit Facility availability, $100.0 million of Receivables Facility availability and $383.0 million of cash. Approximately 60% of the debt portfolio was fixed rate. The company said it was in compliance with all financial covenants.
What did Wesco do with its capital in 2024?
Wesco repurchased $425.0 million of common stock in 2024 under a $1 billion authorization adopted in May 2022, and paid quarterly common dividends of $0.413 per share totaling $81.5 million. It also paid $57.4 million in Series A preferred dividends. On the acquisition side, it spent $221.3 million on Ascent, entroCIM and IES, and received $354.9 million from the WIS divestiture.
What are the key risks highlighted for investors?
The filing highlights risks from global economic conditions and customer demand; the Russia-Ukraine and Middle East conflicts; supply chain disruptions and tariffs; reliance on key suppliers, with the 10 largest accounting for about 30% of purchases; commodity price volatility; integration of acquisitions; cybersecurity and cloud dependence; and $5.1 billion of indebtedness with variable-rate exposure. It also notes that a 100 basis point change in rates would change interest expense by $20.3 million.
06—Continue