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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): APRIL 21, 2004
WESCO INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Commission file number 001-14989
DELAWARE 25-1723342
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or
organization)
225 WEST STATION SQUARE DRIVE
SUITE 700
PITTSBURGH, PENNSYLVANIA 15219 (412) 454-2200
(Address of principal executive offices) (Registrant's telephone number,
including area code)
N/A
(Former name or former address, if changed since last report)
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ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
The information in this Current Report is being furnished and shall not
be deemed "filed" for the purpose of Section 18 of the Securities Exchange Act
of 1934, as amended, or otherwise subject to the liabilities of that section.
The information in this Current Report shall not be incorporated by reference
into any registration statement or other document pursuant to the Securities Act
of 1933, as amended.
On April 21, 2004, WESCO issued a press release announcing its earnings
for the first quarter of 2004. A copy of the press release is attached hereto.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
April 21, 2004 WESCO International, Inc.
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(Date)
/s/ Stephen A. Van Oss
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Stephen A. Van Oss
Vice President, Chief Financial Officer
WESCO logo NEWS RELEASE
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WESCO International, Inc. / Suite 700,
225 West Station Square Drive / Pittsburgh, PA 15219
WESCO INTERNATIONAL, INC. REPORTS 2004 FIRST-QUARTER RESULTS
SALES, OPERATING PROFIT AND EARNINGS IMPROVE SIGNIFICANTLY
Contact: Stephen A. Van Oss, Chief Financial Officer
WESCO International, Inc. (412) 454-2271, Fax: (412) 454-2477
http://www.wescodist.com
Pittsburgh, PA, April 21, 2004 - WESCO International, Inc. [NYSE:WCC], a leading
provider of electrical MRO products, construction materials, and advanced
integrated supply procurement outsourcing services, today announced its 2004
first quarter financial results.
Stephen A. Van Oss, Vice President and Chief Financial Officer, stated, "WESCO's
first quarter results continue to demonstrate the effectiveness of our
initiatives to improve gross margins, control costs and deliver substantial
improvements in earnings capitalizing on the significant operating and financial
leverage in our business. Sales increased 7.2% over the first quarter of 2003
and, combined with a 60 basis point improvement in gross margins and a 10 basis
point reduction in SG&A expense, delivered a 41% improvement in operating profit
and a doubling of net income."
Net sales for the first quarter of 2004 were $847.8 million compared to $790.8
million in 2003, an increase of 7.2%. Gross margins for the quarter improved to
19.0% from 18.4% for the comparable quarter in 2003. Operating income for the
current quarter improved to $26.3 million from $18.5 million in last year's
comparable quarter. Depreciation and amortization included in operating income
was $5.0 million in 2004's first quarter versus $5.1 million in 2003. Net income
in 2004's first quarter was $9.7 million compared to $4.8 million in 2003.
Earnings per share in the current quarter were $0.23 per share, a $0.13 or 130%
increase over the $0.10 per share for the first quarter of 2003.
Mr. Van Oss continued, "We are making further progress in our working capital
programs and achieved Company best results in our net working capital days
during the quarter. This improvement, coupled with growth in net income,
provided positive free cash flow (including a reduction in our accounts
receivable securitization program) of $15 million despite the increased sales
and its related working capital requirements."
Chairman and CEO, Roy W. Haley, commented, "We are very pleased with WESCO's
performance for the quarter, as both operating profit and net income were at the
highest first quarter levels since 2000. The combination of higher sales and
internal operating efficiencies were the primary reasons for improved
performance. Our revenue gain was due in part to strengthened economic
conditions, and we benefited from increasing demand in most key market segments.
Sales results were better than expected, but we remain cautious about the
durability of the recovery and the potential adverse effect of economic and
political risks on our customers' capital spending decisions."
Mr. Haley continued, "For the past three years, WESCO has weathered the economic
downturn by employing a "grind it out" strategy emphasizing operational
initiatives to control costs, improve gross margins, and strengthen our
financial position. LEAN improvement initiatives continue to be implemented
throughout the Company as planned, and we expect to achieve further profit
improvement and productivity gains as the year progresses."
# # #
Teleconference
WESCO will conduct a teleconference to discuss the first quarter earnings as
described in this News Release on April 21, 2004, at 11:00 a.m. E.D.T. The
conference call will be broadcast live over the Internet and can be accessed at
(http://www.shareholder.com/wesco/medialist.cfm) or from the Company's home page
at (http://www.wescodist.com). The conference call will be archived on this
Internet site for seven days.
# # #
WESCO International, Inc. [NYSE: WCC] is a publicly traded Fortune 500 holding
company, headquartered in Pittsburgh, Pennsylvania, whose primary operating
entity is WESCO Distribution, Inc. WESCO Distribution is a leading distributor
of electrical construction products and electrical and industrial maintenance,
repair and operating (MRO) supplies, and is the nation's largest provider of
integrated supply services with 2003 annual product sales of approximately $3.3
billion. The Company employs approximately 5,200 people, maintains relationships
with 24,000 suppliers, and serves more than 100,000 customers worldwide. Major
markets include commercial and industrial firms, contractors, government
agencies, educational institutions, telecommunications businesses and utilities.
WESCO operates five fully automated distribution centers and approximately 350
full-service branches in North America and selected international markets,
providing a local presence for area customers and a global network to serve
multi-location businesses and multi-national corporations.
# # #
The matters discussed herein may contain forward-looking statements that are
subject to certain risks and uncertainties that could cause actual results to
differ materially from expectations. Certain of these risks are set forth in the
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
2003, as well as the Company's other reports filed with the Securities and
Exchange Commission.
# # #
WESCO INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(dollar amounts in millions, except per share amounts)
(Unaudited)
THREE MONTHS ENDED THREE MONTHS ENDED
MARCH 31, 2004 MARCH 31, 2003
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Net sales $847.8 $790.8
Cost of sales 686.9 645.4
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Gross profit 160.9 19.0% 145.4 18.4%
Selling, general & admin. expenses 129.6 15.3% 121.8 15.4%
Depreciation & amortization 5.0 5.1
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Income from operations 26.3 3.1% 18.5 2.3%
Interest expense, net 10.0 10.4
Other expense 1.1 1.4
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Income before income taxes 15.2 1.8% 6.7 0.8%
Provision for income taxes 5.5 1.9
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Net income $ 9.7 1.1% $ 4.8 0.6%
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Net income per diluted share $ 0.23 $ 0.10
Weighted average shares outstanding 42.8 46.4
WESCO INTERNATIONAL, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(dollar amounts in millions)
(Unaudited)
MARCH 31, 2004 DECEMBER 31, 2003
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Total debt $424.8 $422.2
Plus: A/R Securitization 215.0 225.0
Less: Cash and cash equivalents (13.8) (27.5)
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Total indebtedness (including A/R
Securitization Program), net of cash
(See Note) $626.0 $619.7
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Note: Total indebtedness (including A/R Securitization Program), net of cash is
provided by the Company as an additional measure of the Company's leverage.
Generally accepted accounting principles require that this financing facility be
presented off-balance sheet. As management internally evaluates the A/R
Securitization Facility as an additional form of indebtedness, management
believes it is helpful to provide the readers of its financial statements an
evaluation of its total indebtedness from all sources of financing. Cash and
cash equivalents are deducted from this total to determine total indebtedness
(including A/R Securitization Program), net of cash. This amount represents the
Company's net obligation due under all of its financing facilities.
WESCO INTERNATIONAL, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(dollar amounts in millions)
(Unaudited)
THREE MONTHS ENDED
MARCH 31, 2004
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Cash flow provided by operations $ 7.7
Plus: Decrease in A/R Securitization 10.0
Less: Capital expenditures (2.7)
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Free cash flow (excluding effects of
A/R Securitization Program) (See Note) $15.0
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Note: Free cash flow (excluding the effects of A/R Securitization Program) is
provided by the Company as an additional liquidity measure. Generally accepted
accounting principles require that changes in this facility be reflected within
operating cash flows in the Company's consolidated statement of cash flows. As
management internally evaluates the A/R Securitization Facility as an additional
form of liquidity, management believes it is helpful to provide the readers of
its financial statements with the cash flow from operating activities other than
those related to the A/R Securitization Facility. Capital expenditures are
deducted from this adjusted operating cash flow amount to determine free cash
flow (excluding effects of A/R Securitization Program). This amount represents
excess funds available to management to service all of its financing needs
(including needs of its A/R Securitization Program) and other investing needs.
WESCO INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollar amounts in millions)
(Unaudited)
ASSETS MARCH 31, 2004 DECEMBER 31, 2003
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CURRENT ASSETS
Cash and cash equivalents $ 13.8 $ 27.5
Trade accounts receivable (See Note) 325.4 266.6
Inventories, net 349.1 321.0
Other current assets 30.3 41.2
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Total current assets 718.6 656.3
Other assets 504.5 504.9
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Total assets $1,223.1 $1,161.2
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 434.9 $ 366.4
Other current liabilities 91.2 113.3
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Total current liabilities 526.1 479.7
Long-term debt (See Note) 422.6 420.0
Other noncurrent liabilities 94.2 93.8
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Total liabilities 1,042.9 993.5
STOCKHOLDERS' EQUITY
Total stockholders' equity 180.2 167.7
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Total liabilities and stockholders' equity $1,223.1 $1,161.2
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Note: Trade accounts receivable and long-term debt have each been reduced by
$215 million and $225 million as of March 31, 2004 and December 31, 2003,
respectively, in accordance with WESCO's accounting for its accounts receivable
securitization facility. In addition, the carrying value of long-term debt
increased a net $2.9 million during the quarter ended March 31, 2004 as a result
of the increase in fair value of the Company's interest rate derivative
instruments and as a result of non-cash amortization of discounts associated
with the Company's Senior Notes.