- Fourth quarter reported net sales up 0.5% YOY; Organic sales
up 2.4% YOY and 1.7% sequentially
- Fourth quarter diluted EPS of $3.03; Adjusted diluted EPS of $3.16, up 19% YOY
- Full-year reported net sales down 2.5% YOY; Organic sales
down 0.6% YOY
- Full-year operating profit of $1.2
billion; operating margin of 5.6%
- Adjusted EBITDA margin of 6.9%, down 70 basis points
YOY
- Record operating cash flow of $1.1
billion for 2024, up from $493
million for 2023
PITTSBURGH, Feb. 11,
2025 /PRNewswire/ -- Wesco International
(NYSE: WCC), a leading provider of business-to-business
distribution, logistics services and supply chain solutions,
announces its results for the fourth quarter and full year
2024.
"We are pleased with our return to sales growth in the fourth
quarter sparked by more than 70% growth year-over-year in our
global Data Center business, 20% growth in Broadband Solutions, and
renewed positive sales momentum in Electrical and Electronic
Solutions. This was partially offset by a slowdown with industrial
customers and the expected continued weakness in our utility
business in the fourth quarter. With that said, our positive
momentum has carried into January with preliminary sales per
workday, adjusted for M&A, up 5% versus prior year. Our
opportunity pipeline remains at a record level, backlog remains
healthy and bid activity levels remain very strong. Gross margin
was stable on a full-year basis although we experienced some
pressure in Communication and Security Solutions as sales ramped to
customers on project deployments. Consistent with past practice, we
expect to improve margins as we move through the project deployment
life cycle in this segment," said John
Engel, Chairman, President, and CEO.
Mr. Engel continued, "Our continued focus on effective working
capital management yielded strong benefits again in the fourth
quarter and contributed to record free cash flow generation of over
$1 billion in 2024, or 154% of
adjusted net income. Financial leverage remained stable at 2.9x
trailing twelve-month adjusted EBITDA as we reduced our net debt by
$431 million and repurchased
$425 million of shares last year. We
also significantly strengthened our portfolio through the
divestiture of our integrated supply business and the acquisitions
of three services-based businesses, including Ascent. As we look to
2025, our pipeline of strategic acquisitions remains strong and is
aligned with our goal to increase service offerings to our
customers."
Mr. Engel added, "We also made excellent progress on our
enterprise-wide digitalization efforts and overall business
transformation in 2024. We're more than halfway complete on our
technology and capabilities build, which once completed, will
accelerate our earnings growth through greater cross-sell, expand
our margins through improved pricing and operating cost leverage,
and dramatically increase our speed to value on the integration of
future acquisitions."
Mr. Engel concluded, "In 2025, we expect organic sales to grow
2.5% to 6.5% and operating margin to expand, as all three business
units are expected to deliver profitable growth. We expect to
generate $600 to $800 million of free cash flow and I am pleased
to announce that we plan to increase our common stock dividend by
10% again this year to $1.82 per
share while continuing our share buyback program. As we outlined in
our recent Investor Day, we are committed to substantial value
creation from operational improvements, digital transformation, and
our capital allocation strategy including additional M&A. We're
well-positioned to deliver outsized growth due to the secular
trends of AI-driven data centers, increased power generation,
electrification, automation, and reshoring. And we remain laser
focused on our enterprise wide margin improvement program, which
has been a historical strength for Wesco. I'm confident that Wesco
will outperform our markets this year, and we're best positioned to
deliver improved sales growth and continue toward our long-term
EBITDA margin expansion goal. Finally, I continue to be very proud
of our talented and dedicated Wesco team, who remain steadfast in
executing our strategic plan to capture the significant value
creation opportunity in front us, as we realize our vision of
becoming the best tech-enabled supply chain solutions provider in
the world."
The following are results for the three months ended
December 31, 2024 compared to the three months ended
December 31, 2023:
- Net sales were $5,499.7 million
for the fourth quarter of 2024 compared to $5,473.4 million for the fourth quarter of 2023,
an increase of 0.5%. On an organic basis, which removes the impact
of the Wesco Integrated Supply ("WIS") divestiture, the Ascent, LLC
("Ascent") acquisition, differences in foreign exchange rates, and
the impact from the number of workdays, sales for the fourth
quarter of 2024 grew by 2.4%. The increase in organic sales
primarily reflects volume growth in the CSS segment, partially
offset by volume decline in the UBS segment. Sequentially, net
sales increased 0.2%. Adjusting for the unfavorable impact from the
number of workdays of 1.6%, the unfavorable impact from
fluctuations in foreign exchange rates of 0.5%, and the increase
from the acquisition of Ascent of 0.6%, organic sales grew by 1.7%
sequentially.
- Cost of goods sold was $4,335.7
million for the fourth quarter of 2024 compared to
$4,302.7 million for the fourth
quarter of 2023, and gross profit was $1,164.0 million and $1,170.7 million, respectively. As a percentage
of net sales, gross profit was 21.2% and 21.4% for 2024 and 2023,
respectively. The decline in gross profit as a percentage of net
sales for the fourth quarter of 2024 primarily reflects a decrease
in CSS sales margin, partially offset by the impact of the
divestiture of the WIS business.
- Selling, general and administrative ("SG&A") expenses were
$817.3 million, or 14.9% of net
sales, for the fourth quarter of 2024 compared to $810.1 million, or 14.8% of net sales, for the
fourth quarter of 2023. SG&A expenses for the fourth quarter of
2024 include $10.0 million of digital
transformation and restructuring costs and $0.1 million of excise taxes on excess pension
plan assets. SG&A expenses for the fourth quarter of 2023
include $11.3 million of digital
transformation, merger-related and integration, and restructuring
costs. Adjusted for these costs, SG&A expenses were
$807.2 million, or 14.7% of net
sales, for the fourth quarter of 2024 and $798.8 million, or 14.6% of net sales, for the
fourth quarter of 2023. Adjusted SG&A expenses for the fourth
quarter of 2024 primarily reflect higher costs to operate our
facilities, employee expenses, taxes, and transportation costs,
partially offset by lower payroll expenses.
- Operating profit was $301.1
million for the fourth quarter of 2024 compared to
$315.8 million for the fourth quarter
of 2023, a decrease of $14.7 million,
or 4.7%. Operating profit as a percentage of net sales was 5.5% for
the current quarter, compared to 5.8% for the fourth quarter of the
prior year. Adjusted for digital transformation costs,
restructuring costs, and excise taxes on excess pension plan
assets, operating profit was $311.2
million, or 5.7% of net sales, for the fourth quarter of
2024. Adjusted for digital transformation costs, merger-related and
integration costs, restructuring costs, and accelerated trademark
amortization expense, operating profit was $327.5 million, or 6.0% of net sales, for the
fourth quarter of 2023.
- Net interest expense for the fourth quarter of 2024 was
$85.1 million compared to
$97.0 million for the fourth quarter
of 2023. The decrease is primarily attributable to lower borrowings
and a decrease in variable interest rates.
- The effective tax rate for the fourth quarter of 2024 was 20.8%
compared to 31.5% for the fourth quarter of 2023. The effective tax
rate for the quarter ended December 31,
2024 was lower than the comparable period due to the
favorable impact of changes in estimates of uncertain tax positions
and foreign return-to-provision adjustments.
- Net income attributable to common stockholders was $151.0 million for the fourth quarter of 2024
compared to $127.6 million for the
fourth quarter of 2023, an increase of 18.3%. Adjusted for digital
transformation costs, restructuring costs, excise taxes on excess
pension plan assets, the adjustment to the loss on termination of a
business arrangement, the reduction to pension settlement cost, and
the related income tax effects, net income attributable to common
stockholders was $157.4 million for
the fourth quarter of 2024. Adjusted for digital transformation
costs, merger-related and integration costs, restructuring costs,
accelerated trademark amortization expense, net pension settlement
cost, and the related income tax effects, net income attributable
to common stockholders was $137.9
million for the fourth quarter of 2023.
- Earnings per diluted share for the fourth quarter of 2024 was
$3.03, based on 49.8 million diluted
shares, compared to $2.45 for the
fourth quarter of 2023, based on 52.0 million diluted shares, an
increase of 23.7%. Adjusted for digital transformation costs,
restructuring costs, excise taxes on excess pension plan assets,
the loss on termination of a business arrangement, the reduction to
pension settlement cost, and the related income tax effects,
earnings per diluted share for the fourth quarter of 2024 was
$3.16. Adjusted for digital
transformation costs, merger-related and integration costs,
restructuring costs, accelerated trademark amortization expense,
net pension settlement cost, and the related income tax effects,
earnings per diluted share for the fourth quarter of 2023 was
$2.65.
- Operating cash flow for the fourth quarter of 2024 was an
inflow of $276.6 million compared to
$69.3 million for the fourth quarter
of 2023. Free cash flow for the fourth quarter of 2024 was
$268.4 million, or 155.8% of adjusted
net income. The net cash inflow in the fourth quarter of 2024 was
primarily driven by net income of $165.9
million, as well as an improvement in net working capital.
Changes in net working capital included a decrease in trade
accounts receivable due to the timing of receipts from customers,
resulting in a cash inflow of $167.2
million. Inventory management efforts leading to a
$67.0 million decrease in inventory
also contributed to the cash inflow. These inflows were partially
offset by a decrease in accounts payable of $148.5 million due to the timing of payments to
suppliers.
The following are results for the year ended December 31,
2024 compared to the year ended December 31, 2023:
- Net sales were $21.8 billion for
2024 compared to $22.4 billion for
2023, a decrease of 2.5%. On an organic basis, which removes the
impact of the WIS divestiture, Ascent acquisition, differences in
foreign exchange rates, and the impact from the number of workdays,
sales for 2024 declined by 0.6%. The decrease in organic sales
reflects volume declines in the UBS and EES segments, partially
offset by a volume increase in the CSS segment, and price inflation
in the EES and UBS segments.
- Cost of goods sold for 2024 was $17.1
billion compared to $17.5
billion for 2023, and gross profit was $4.7 billion and $4.8
billion, respectively. As a percentage of net sales, gross
profit was 21.6% for 2024 and 2023.
- SG&A expenses were $3,306.2
million, or 15.2% of net sales, for 2024 compared to
$3,256.0 million, or 14.5% of net
sales, for 2023. SG&A expenses for 2024 include $37.0 million of digital transformation and
restructuring costs, a $17.8 million
loss on abandonment of assets, and $4.9
million of excise taxes on excess pension plan assets.
SG&A expenses for 2023 include $72.1
million of digital transformation, merger-related and
integration, and restructuring costs. Adjusted for these costs,
SG&A expenses were $3,246.5
million, or 14.9% of net sales, for 2024 and $3,183.9 million, or 14.2% of net sales, for
2023. The increase in adjusted SG&A expenses for 2024 compared
to 2023 reflects higher costs to operate our facilities and an
increase in IT costs.
- Operating profit was $1.2 billion
for 2024 compared to $1.4 billion for
2023, a decrease of 13.0%. Operating profit as a percentage of net
sales was 5.6% for the current year, compared to 6.3% for the prior
year. Adjusted for digital transformation costs, the loss on
abandonment of assets, restructuring costs, and excise taxes on
excess pension plan assets, operating profit was $1.3 billion, or 5.9% of net sales, for 2024.
Adjusted for digital transformation costs, merger-related and
integration costs, restructuring costs, and accelerated trademark
amortization expense, operating profit was $1.5 billion, or 6.6% of net sales, for 2023.
- Net interest expense for 2024 was $364.9
million compared to $389.3
million for 2023. The decrease primarily reflects lower
borrowings, the redemption of the 2025 Notes in the second quarter
of 2024, and a decrease in variable interest rates.
- Other non-operating income for 2024 was $92.7 million compared to expense of $25.1 million for 2023. In 2024, we completed the
divestiture of our WIS business and recognized a gain from the sale
of $122.2 million. Due to
fluctuations in the U.S. dollar against certain foreign currencies,
a net foreign currency exchange loss of $25.5 million was recognized for 2024 compared to
a net loss of $22.9 million for 2023.
Adjusted for the gain on the divestiture of our WIS business, a
$3.6 million loss on termination of a
business arrangement, and $2.5
million of pension settlement cost related to the final
settlement of the Anixter Inc. Pension Plan, other non-operating
expense was $23.4 million for 2024.
Other non-operating expense for 2023 includes net pension
settlement cost of $2.8 million
related to the settlement of certain pension plans. Adjusted for
this amount, other non-operating expense was $22.3 million for 2023.
- The effective tax rate for 2024 was 24.4% compared to 22.8% for
2023. The higher effective tax rate in 2024 is primarily due to
increases in valuation allowances recorded against certain deferred
tax assets.
- Net income attributable to common stockholders was $660.2 million for 2024 compared to $708.1 million for 2023. Adjusted for digital
transformation costs, the loss on abandonment of assets,
restructuring costs, excise taxes on excess pension plan assets,
the gain recognized on the divestiture of the WIS business, the
loss on termination of a business arrangement, pension settlement
cost, and the related income tax effects, net income attributable
to common stockholders was $618.6
million for 2024. Adjusted for digital transformation costs,
merger-related and integration costs, restructuring costs,
accelerated trademark amortization expense, net pension settlement
cost, and the related income tax effects, net income attributable
to common stockholders was $763.6
million for 2023.
- Earnings per diluted share for 2024 was $13.05, based on 50.6 million diluted shares,
compared to $13.54 for 2023, based on
52.3 million diluted shares. Adjusted for digital transformation
costs, the loss on abandonment of assets, restructuring costs,
excise taxes on excess pension plan assets, the gain recognized on
the divestiture of the WIS business, the loss on termination of a
business arrangement, pension settlement cost, and the related
income tax effects, earnings per diluted share for 2024 was
$12.23. Adjusted for digital
transformation costs, merger-related and integration costs,
restructuring costs, accelerated trademark amortization expense,
net pension settlement cost, and the related income tax effects,
earnings per diluted share for 2023 was $14.60.
- Operating cash flow for 2024 was an inflow of $1,101.2 million compared to $493.2 million for 2023. Free cash flow for 2024
was $1,045.2 million, or 154.2% of
adjusted net income. The net cash inflow in 2024 was primarily
driven by net income of $719.4
million and non-cash adjustments to net income totaling
$105.6 million. Operating cash flow
was positively impacted by net changes in assets and liabilities of
$276.2 million, which primarily
comprised an increase in accounts payable of $329.5 million, primarily due to the timing of
inventory purchases and payments to suppliers, and an increase of
$62.7 million in accrued payroll and
benefits costs, partially offset by an increase in trade accounts
receivable of $50.7 million due to
the timing of receipts from customers.
Webcast and Teleconference Access
Wesco will conduct a webcast and teleconference to discuss the
fourth quarter and full year 2024 earnings as described in this
News Release on Tuesday, February 11, 2025, 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
https://investors.wesco.com. The call will be archived on this
internet site for seven days.
Wesco International (NYSE: WCC) builds, connects, powers and
protects the world. Headquartered in Pittsburgh, Pennsylvania, Wesco is a FORTUNE
500® company with approximately $22
billion in annual sales in 2024 and a leading provider of
business-to-business distribution, logistics services and supply
chain solutions. Wesco offers a best-in-class product and services
portfolio of Electrical and Electronic Solutions, Communications
and Security Solutions, and Utility and Broadband Solutions. The
Company employs approximately 20,000 people, partners with the
industry's premier suppliers, and serves thousands of customers
around the world. With millions of products, end-to-end supply
chain services, and leading digital capabilities, Wesco provides
innovative solutions to meet customer needs across commercial and
industrial businesses, contractors, educational institutions,
government agencies, technology companies, telecommunications
providers, and utilities. Wesco operates more than 700 sites,
including distribution centers, fulfillment centers, and sales
offices in approximately 50 countries, providing a local presence
for customers and a global network to serve multi-location
businesses and global 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 business strategy, growth strategy, competitive
strengths, productivity and profitability enhancement, competition,
new product and service introductions, and liquidity and capital
resources. Such statements can generally be identified by the use
of words such as "anticipate," "plan," "believe," "estimate,"
"intend," "expect," "project," and similar words, phrases or
expressions or future or conditional verbs such as "could," "may,"
"should," "will," and "would," although not all forward-looking
statements contain such words. 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.
Important factors that could cause actual results or events
to differ materially from those presented or implied in the
forward-looking statements include, among others, the failure to
achieve the anticipated benefits of, and other risks associated
with, acquisitions, joint ventures, divestitures and other
corporate transactions; the inability to successfully integrate
acquired businesses; the impact of increased interest rates or
borrowing costs; fluctuations in currency exchange rates; failure
to adequately protect Wesco's intellectual property or successfully
defend against infringement claims; the inability to successfully
deploy new technologies, digital products and information systems
or to otherwise adapt to emerging technologies in the marketplace,
such as those incorporating artificial intelligence; failure to
execute on our efforts and programs related to environmental,
social and governance (ESG) matters; unanticipated expenditures or
other adverse developments related to compliance with new or
stricter government policies, laws or regulations, including those
relating to data privacy, sustainability and environmental
protection; the inability to successfully develop, manage or
implement new technology initiatives or business strategies,
including with respect to the expansion of e-commerce capabilities
and other digital solutions and digitalization initiatives;
disruption of information technology systems or operations; natural
disasters (including as a result of climate change), health
epidemics, pandemics and other outbreaks; supply chain disruptions;
geopolitical issues, including the impact of the evolving conflicts
in the Middle East and
Russia/Ukraine; the impact of sanctions imposed on,
or other actions taken by the U.S. or other countries against,
Russia or China; the failure to manage the increased
risks and impacts of cyber incidents or data breaches; and
exacerbation of key materials shortages, inflationary cost
pressures, material cost increases, demand volatility, and
logistics and capacity constraints, any of which may have a
material adverse effect on the Company's business, results of
operations and financial condition. All such factors are difficult
to predict and are beyond the Company's control. Additional factors
that could cause results to differ materially from those described
above can be found in Wesco's most recent Annual Report on Form
10-K and other periodic reports filed with the U.S. Securities and
Exchange Commission.
|
Contact
Information
|
|
Investor
Relations
|
Corporate
Communications
|
|
Will
Ruthrauff
Director, Investor
Relations
484-885-5648
|
Jennifer
Sniderman
Vice President,
Corporate Communications
717-579-6603
|
|
http://www.wesco.com
|
|
WESCO INTERNATIONAL,
INC.
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
|
|
(in millions, except
per share amounts)
|
|
(Unaudited)
|
|
|
Three Months
Ended
|
|
|
December 31,
2024
|
|
|
December 31,
2023
|
|
|
Net sales
|
$
5,499.7
|
|
|
$
5,473.4
|
|
|
Cost of goods sold
(excluding depreciation and amortization)
|
4,335.7
|
78.8 %
|
|
4,302.7
|
78.6 %
|
|
Selling, general and
administrative expenses
|
817.3
|
14.9 %
|
|
810.1
|
14.8 %
|
|
Depreciation and
amortization
|
45.6
|
|
|
44.8
|
|
|
Income from
operations
|
301.1
|
5.5 %
|
|
315.8
|
5.8 %
|
|
Interest expense,
net
|
85.1
|
|
|
97.0
|
|
|
Other expense,
net
|
6.6
|
|
|
10.5
|
|
|
Income before income
taxes
|
209.4
|
3.8 %
|
|
208.3
|
3.8 %
|
|
Provision for income
taxes
|
43.5
|
|
|
65.7
|
|
|
Net income
|
165.9
|
3.0 %
|
|
142.6
|
2.6 %
|
|
Net income attributable
to noncontrolling interests
|
0.5
|
|
|
0.6
|
|
|
Net income attributable
to WESCO International, Inc.
|
165.4
|
3.0 %
|
|
142.0
|
2.6 %
|
|
Preferred stock
dividends
|
14.4
|
|
|
14.4
|
|
|
Net income attributable
to common stockholders
|
$
151.0
|
2.7 %
|
|
$
127.6
|
2.3 %
|
|
|
|
|
|
|
|
Earnings per diluted
share attributable to common stockholders
|
$
3.03
|
|
|
$
2.45
|
|
|
Weighted-average common
shares outstanding and common
share equivalents used in computing earnings
per diluted
common share
|
49.8
|
|
|
52.0
|
|
|
WESCO INTERNATIONAL,
INC.
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
|
|
(in millions, except
per share amounts)
|
|
(Unaudited)
|
|
|
Twelve Months
Ended
|
|
|
December 31,
2024
|
|
|
December 31,
2023
|
|
|
Net sales
|
$
21,818.8
|
|
|
$
22,385.2
|
|
|
Cost of goods sold
(excluding depreciation and amortization)
|
17,106.2
|
78.4 %
|
|
17,541.5
|
78.4 %
|
|
Selling, general and
administrative expenses
|
3,306.2
|
15.2 %
|
|
3,256.0
|
14.5 %
|
|
Depreciation and
amortization
|
183.2
|
|
|
181.3
|
|
|
Income from
operations
|
1,223.2
|
5.6 %
|
|
1,406.4
|
6.3 %
|
|
Interest expense,
net
|
364.9
|
|
|
389.3
|
|
|
Other (income) expense,
net
|
(92.7)
|
|
|
25.1
|
|
|
Income before income
taxes
|
951.0
|
4.4 %
|
|
992.0
|
4.4 %
|
|
Provision for income
taxes
|
231.6
|
|
|
225.9
|
|
|
Net income
|
719.4
|
3.3 %
|
|
766.1
|
3.4 %
|
|
Net income attributable
to noncontrolling interests
|
1.8
|
|
|
0.6
|
|
|
Net income attributable
to WESCO International, Inc.
|
717.6
|
3.3 %
|
|
765.5
|
3.4 %
|
|
Preferred stock
dividends
|
57.4
|
|
|
57.4
|
|
|
Net income attributable
to common stockholders
|
$
660.2
|
3.0 %
|
|
$
708.1
|
3.2 %
|
|
|
|
|
|
|
|
Earnings per diluted
share attributable to common stockholders
|
$
13.05
|
|
|
$
13.54
|
|
|
Weighted-average common
shares outstanding and common
share equivalents used in computing earnings
per diluted
common share
|
50.6
|
|
|
52.3
|
|
|
WESCO INTERNATIONAL,
INC.
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
(in
millions)
|
|
(Unaudited)
|
|
|
As of
|
|
December 31,
2024
|
|
December 31,
2023
|
|
Assets
|
|
|
|
|
Current
Assets
|
|
|
|
|
Cash and cash
equivalents
|
$
702.6
|
|
$
524.1
|
|
Trade accounts
receivable, net
|
3,454.4
|
|
3,639.5
|
|
Inventories
|
3,501.7
|
|
3,572.1
|
|
Other current
assets
|
692.7
|
|
655.9
|
|
Total current assets
|
8,351.4
|
|
8,391.6
|
|
|
|
|
|
Goodwill and intangible
assets
|
5,116.0
|
|
5,119.9
|
|
Other assets
|
1,594.0
|
|
1,549.4
|
|
Total assets
|
$
15,061.4
|
|
$
15,060.9
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
Current
Liabilities
|
|
|
|
|
Accounts
payable
|
$
2,670.6
|
|
$
2,431.5
|
|
Short-term debt and
current portion of long-term debt, net
|
19.5
|
|
8.6
|
|
Other current
liabilities
|
1,113.9
|
|
948.3
|
|
Total current liabilities
|
3,804.0
|
|
3,388.4
|
|
|
|
|
|
Long-term debt,
net
|
5,045.5
|
|
5,313.1
|
|
Other noncurrent
liabilities
|
1,246.4
|
|
1,327.5
|
|
Total liabilities
|
10,095.9
|
|
10,029.0
|
|
|
|
|
|
Stockholders'
Equity
|
|
|
|
|
Total stockholders' equity
|
4,965.5
|
|
5,031.9
|
|
Total liabilities and stockholders' equity
|
$
15,061.4
|
|
$
15,060.9
|
|
WESCO INTERNATIONAL,
INC.
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
(in
millions)
|
|
(Unaudited)
|
|
|
Twelve Months
Ended
|
|
December 31,
2024
|
|
December 31,
2023
|
|
Operating
Activities:
|
|
|
|
|
Net income
|
$
719.4
|
|
$
766.1
|
|
Add back
(deduct):
|
|
|
|
|
Depreciation and
amortization
|
183.2
|
|
181.3
|
|
Gain on
divestiture
|
(122.2)
|
|
—
|
|
Loss on abandonment of
assets
|
17.8
|
|
—
|
|
Deferred income
taxes
|
(39.9)
|
|
(7.9)
|
|
Change in trade
receivables, net
|
(50.7)
|
|
52.2
|
|
Change in
inventories
|
(18.0)
|
|
(68.4)
|
|
Change in accounts
payable
|
329.5
|
|
(319.7)
|
|
Other, net
|
82.1
|
|
(110.4)
|
|
Net cash provided by
operating activities
|
1,101.2
|
|
493.2
|
|
|
|
|
|
Investing
Activities:
|
|
|
|
|
Capital
expenditures
|
(94.7)
|
|
(92.3)
|
|
Acquisition payments,
net of cash acquired
|
(221.3)
|
|
—
|
|
Proceeds from
divestiture, net of cash transferred
|
354.9
|
|
—
|
|
Other, net
|
1.5
|
|
2.7
|
|
Net cash provided by
(used in) investing activities
|
40.4
|
|
(89.6)
|
|
|
|
|
|
Financing
Activities:
|
|
|
|
|
Debt repayments,
net(1)
|
(278.3)
|
|
(120.0)
|
|
Payments for taxes
related to net-share settlement of equity awards
|
(30.9)
|
|
(68.3)
|
|
Repurchases of common
stock
|
(425.0)
|
|
(75.0)
|
|
Payment of common
stock dividends
|
(81.5)
|
|
(76.6)
|
|
Payment of preferred
stock dividends
|
(57.4)
|
|
(57.4)
|
|
Other, net
|
(55.2)
|
|
(6.6)
|
|
Net cash used in
financing activities
|
(928.3)
|
|
(403.9)
|
|
|
|
|
|
Effect of exchange rate
changes on cash and cash equivalents
|
(34.8)
|
|
(2.9)
|
|
|
|
|
|
Net change in cash and
cash equivalents
|
178.5
|
|
(3.2)
|
|
Cash and cash
equivalents at the beginning of the period
|
524.1
|
|
527.3
|
|
Cash and cash
equivalents at the end of the period
|
$
702.6
|
|
$
524.1
|
|
|
|
(1)
|
The year ended
December 31, 2024 includes the issuance of the Company's
$900.0 million aggregate principal amount of 6.375% Senior Notes
due 2029 (the "2029 Notes") and the Company's $850.0 million
aggregate principal amount of 6.625% Senior Notes due 2032 (the
"2032 Notes" and, together with the 2029 Notes, the "2029 and 2032
Notes"). The proceeds from the issuance of the 2029 and 2032 Notes
were used for the redemption of the Company's $1,500.0 million
aggregate principal amount of 7.125% Senior Notes due 2025 (the
"2025 Notes") and for other corporate purposes. The year ended
December 31, 2023 includes the repayment of the Company's
$58.6 million aggregate principal amount of 5.50% Anixter Senior
Notes due 2023 (the "Anixter 2023 Senior Notes"). The repayment of
the Anixter 2023 Senior Notes was funded with borrowings under the
Company's revolving credit facility.
|
NON-GAAP FINANCIAL MEASURES
In addition to the results provided in accordance with U.S.
Generally Accepted Accounting Principles ("U.S. GAAP") above, this
earnings release includes certain non-GAAP financial measures.
These financial measures include organic sales growth, gross
profit, gross margin, earnings before interest, taxes,
depreciation and amortization (EBITDA), adjusted EBITDA, adjusted
EBITDA margin, financial leverage, free cash flow, adjusted
selling, general and administrative expenses, adjusted income from
operations, adjusted operating margin, adjusted other non-operating
expense (income), adjusted provision for income taxes, adjusted
income before income taxes, adjusted net income, adjusted net
income attributable to WESCO International, Inc., adjusted net
income attributable to common stockholders, 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 our financial condition and results of operations
on a comparable basis. Additionally, certain non-GAAP measures
either focus on or exclude items impacting comparability of results
such as digital transformation costs, restructuring costs,
merger-related and integration costs, cloud computing arrangement
amortization, pension settlement cost and excise taxes on excess
pension plan assets related to the settlement of the Anixter Inc.
Pension Plan, loss on abandonment of assets, the gain recognized on
the divestiture of the WIS business, the loss on termination of
business arrangement, and the related income tax effects, allowing
investors to more easily compare the Company's financial
performance from period to period. 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
|
|
(in millions, except
per share amounts)
|
|
(Unaudited)
|
|
|
Organic Sales Growth
by Segment - Three Months Ended:
|
|
|
Three Months
Ended
|
|
Growth/(Decline)
|
|
December 31,
2024
|
|
December 31,
2023
|
|
Reported
Sales
|
|
Acquisitions/
Divestiture
|
|
Foreign
Exchange
|
|
Workday
|
|
Organic
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EES
|
$
2,123.7
|
|
$
2,084.2
|
|
1.9 %
|
|
— %
|
|
(0.7) %
|
|
1.6 %
|
|
1.0 %
|
|
CSS
|
2,045.9
|
|
1,791.3
|
|
14.2 %
|
|
1.8 %
|
|
(0.5) %
|
|
1.6 %
|
|
11.3 %
|
|
UBS
|
1,330.1
|
|
1,597.9
|
|
(16.8) %
|
|
(12.3) %
|
|
(0.2) %
|
|
1.6 %
|
|
(5.9) %
|
|
Total net
sales
|
$
5,499.7
|
|
$
5,473.4
|
|
0.5 %
|
|
(3.0) %
|
|
(0.5) %
|
|
1.6 %
|
|
2.4 %
|
|
|
Organic Sales Growth
by Segment - Twelve Months Ended:
|
|
|
Twelve Months
Ended
|
|
Growth/(Decline)
|
|
December 31,
2024
|
|
December 31,
2023
|
|
Reported
Sales
|
|
Acquisitions/
Divestiture
|
|
Foreign
Exchange
|
|
Workday
|
|
Organic
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EES
|
$
8,546.8
|
|
$
8,610.3
|
|
(0.7) %
|
|
— %
|
|
(0.5) %
|
|
0.8 %
|
|
(1.0) %
|
|
CSS
|
7,537.0
|
|
7,152.2
|
|
5.4 %
|
|
0.5 %
|
|
(0.2) %
|
|
0.8 %
|
|
4.3 %
|
|
UBS
|
5,735.0
|
|
6,622.7
|
|
(13.4) %
|
|
(8.9) %
|
|
(0.1) %
|
|
0.8 %
|
|
(5.2) %
|
|
Total net
sales
|
$
21,818.8
|
|
$
22,385.2
|
|
(2.5) %
|
|
(2.5) %
|
|
(0.2) %
|
|
0.8 %
|
|
(0.6) %
|
|
|
Organic Sales Growth
by Segment - Sequential:
|
|
|
Three Months
Ended
|
|
Growth/(Decline)
|
|
December 31,
2024
|
|
September 30,
2024
|
|
Reported
Sales
|
|
Acquisition
|
|
Foreign
Exchange
|
|
Workday
|
|
Organic
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EES
|
$
2,123.7
|
|
$
2,151.2
|
|
(1.3) %
|
|
— %
|
|
(0.7) %
|
|
(1.6) %
|
|
1.0 %
|
|
CSS
|
2,045.9
|
|
1,955.1
|
|
4.6 %
|
|
1.6 %
|
|
(0.6) %
|
|
(1.6) %
|
|
5.2 %
|
|
UBS
|
1,330.1
|
|
1,383.1
|
|
(3.8) %
|
|
— %
|
|
(0.2) %
|
|
(1.6) %
|
|
(2.0) %
|
|
Total net
sales
|
$
5,499.7
|
|
$
5,489.4
|
|
0.2 %
|
|
0.6 %
|
|
(0.5) %
|
|
(1.6) %
|
|
1.7 %
|
|
|
Note: Organic sales
growth is a non-GAAP financial measure of sales performance.
Organic sales growth is calculated by deducting the percentage
impact from acquisitions and divestitures for one year following
the respective transaction, fluctuations in foreign exchange rates
and number of workdays from the reported percentage change in
consolidated net sales. Workday impact represents the change in the
number of operating days period-over-period after adjusting for
weekends and public holidays in the United States. The fourth
quarter of 2024 had one more workday compared to the fourth quarter
of 2023; 2024 had two more workdays compared to 2023. The fourth
quarter of 2024 had one less workday compared to the third quarter
of 2024.
|
|
WESCO INTERNATIONAL,
INC.
|
|
RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES
|
|
(in millions, except
per share amounts)
|
|
(Unaudited)
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
Gross
Profit:
|
December 31,
2024
|
|
December 31,
2023
|
|
December 31,
2024
|
|
December 31,
2023
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
5,499.7
|
|
$
5,473.4
|
|
$ 21,818.8
|
|
$ 22,385.2
|
|
Cost of goods sold
(excluding depreciation and
amortization)
|
4,335.7
|
|
4,302.7
|
|
17,106.2
|
|
17,541.5
|
|
Gross
profit
|
$
1,164.0
|
|
$
1,170.7
|
|
$
4,712.6
|
|
$
4,843.7
|
|
Gross margin
|
21.2 %
|
|
21.4 %
|
|
21.6 %
|
|
21.6 %
|
|
|
Note: Gross profit is a
financial measure commonly used in 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
|
|
(in millions, except
per share amounts)
|
|
(Unaudited)
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
Adjusted SG&A
Expenses:
|
December 31,
2024
|
|
December 31,
2023
|
|
December 31,
2024
|
|
December 31,
2023
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
$
817.3
|
|
$
810.1
|
|
$
3,306.2
|
|
$
3,256.0
|
|
Digital transformation
costs(1)
|
(7.4)
|
|
(7.6)
|
|
(24.9)
|
|
(36.1)
|
|
Loss on abandonment of
assets(2)
|
—
|
|
—
|
|
(17.8)
|
|
—
|
|
Restructuring
costs(3)
|
(2.6)
|
|
(1.3)
|
|
(12.1)
|
|
(16.7)
|
|
Excise taxes on excess
pension plan assets(4)
|
(0.1)
|
|
—
|
|
(4.9)
|
|
—
|
|
Merger-related and
integration costs(5)
|
—
|
|
(2.4)
|
|
—
|
|
(19.3)
|
|
Adjusted selling,
general and administrative expenses
|
$
807.2
|
|
$
798.8
|
|
$
3,246.5
|
|
$
3,183.9
|
|
% of net
sales
|
14.7 %
|
|
14.6 %
|
|
14.9 %
|
|
14.2 %
|
|
|
|
|
|
|
|
|
|
Adjusted Income from
Operations:
|
|
|
|
|
|
|
|
|
Income from
operations
|
$
301.1
|
|
$
315.8
|
|
$
1,223.2
|
|
$
1,406.4
|
|
Digital transformation
costs(1)
|
7.4
|
|
7.6
|
|
24.9
|
|
36.1
|
|
Loss on abandonment of
assets(2)
|
—
|
|
—
|
|
17.8
|
|
—
|
|
Restructuring
costs(3)
|
2.6
|
|
1.3
|
|
12.1
|
|
16.7
|
|
Excise taxes on excess
pension plan assets(4)
|
0.1
|
|
—
|
|
4.9
|
|
—
|
|
Merger-related and
integration costs(5)
|
—
|
|
2.4
|
|
—
|
|
19.3
|
|
Accelerated trademark
amortization(6)
|
—
|
|
0.4
|
|
—
|
|
1.6
|
|
Adjusted income from
operations
|
$
311.2
|
|
$
327.5
|
|
$
1,282.9
|
|
$
1,480.1
|
|
Adjusted income from
operations margin %
|
5.7 %
|
|
6.0 %
|
|
5.9 %
|
|
6.6 %
|
|
|
|
|
|
|
|
|
|
Adjusted Other
Expense (Income), net:
|
|
|
|
|
|
|
|
|
Other expense (income),
net
|
$
6.6
|
|
$
10.5
|
|
$
(92.7)
|
|
$
25.1
|
|
Gain on
divestiture
|
—
|
|
—
|
|
122.2
|
|
—
|
|
Loss on termination of
business arrangement(7)
|
0.2
|
|
—
|
|
(3.6)
|
|
—
|
|
Pension settlement
cost(8)
|
0.8
|
|
(2.8)
|
|
(2.5)
|
|
(2.8)
|
|
Adjusted other expense,
net
|
$
7.6
|
|
$
7.7
|
|
$
23.4
|
|
$
22.3
|
|
|
|
|
|
|
|
|
|
Adjusted Provision
for Income Taxes:
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
$
43.5
|
|
$
65.7
|
|
$
231.6
|
|
$
225.9
|
|
Income tax effect of
adjustments to income from
operations and other expense (income),
net(9)
|
2.7
|
|
4.2
|
|
(14.8)
|
|
21.0
|
|
Adjusted provision for
income taxes
|
$
46.2
|
|
$
69.9
|
|
$
216.8
|
|
$
246.9
|
|
|
|
(1)
|
Digital transformation
costs include costs associated with certain digital transformation
initiatives.
|
|
(2)
|
Loss on abandonment of
assets represents the write-off of certain capitalized cloud
computing arrangement implementation costs relating to a
third-party developed operations management software product in
favor of an application with functionality that better suits the
Company's operations.
|
|
(3)
|
Restructuring costs
include severance costs incurred pursuant to an ongoing
restructuring plan.
|
|
(4)
|
Excise taxes on excess
pension plan assets represent the excise taxes applicable to the
excess pension plan assets following the final settlement of the
Company's U.S. pension plan.
|
|
(5)
|
Merger-related and
integration costs include integration and professional fees
associated with the integration of Wesco and Anixter, as well as
advisory, legal, and separation costs associated with the merger
between the two companies.
|
|
(6)
|
Accelerated trademark
amortization represents additional amortization expense resulting
from changes in the estimated useful lives of certain legacy
trademarks that have migrated to our master brand
architecture.
|
|
(7)
|
Loss on termination of
business arrangement represents the loss recognized as a result of
management's decision to terminate a business arrangement with a
third party.
|
|
(8)
|
For the year ended
December 31, 2024, pension settlement cost represents expense
related to the final settlement of the Company's U.S. pension plan.
For the year ended December 31, 2023, pension settlement cost
represents expense related to the partial settlement of the
Company's U.S. pension plan, partially offset by pension settlement
gains related to other plans.
|
|
(9)
|
The adjustments to
income from operations and other expense (income), net have been
tax effected at rates of 29.7% and 26.2% for the three and twelve
months ended December 31, 2024, respectively, and 29.0% and
27.5% for the three and twelve months ended December 31, 2023,
respectively.
|
|
WESCO INTERNATIONAL,
INC.
|
|
RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES
|
|
(in millions, except
per share amounts)
|
|
(Unaudited)
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
Adjusted Earnings
per Diluted Share:
|
December 31,
2024
|
|
December 31,
2023
|
|
December 31,
2024
|
|
December 31,
2023
|
|
|
|
|
|
|
|
|
|
Adjusted income from
operations
|
$
311.2
|
|
$
327.5
|
|
$
1,282.9
|
|
$
1,480.1
|
|
Interest expense,
net
|
85.1
|
|
97.0
|
|
364.9
|
|
389.3
|
|
Adjusted other
expense, net
|
7.6
|
|
7.7
|
|
23.4
|
|
22.3
|
|
Adjusted income before
income taxes
|
218.5
|
|
222.8
|
|
894.6
|
|
1,068.5
|
|
Adjusted provision for
income taxes
|
46.2
|
|
69.9
|
|
216.8
|
|
246.9
|
|
Adjusted net
income
|
172.3
|
|
152.9
|
|
677.8
|
|
821.6
|
|
Net income attributable
to noncontrolling interests
|
0.5
|
|
0.6
|
|
1.8
|
|
0.6
|
|
Adjusted net income
attributable to WESCO
International, Inc.
|
171.8
|
|
152.3
|
|
676.0
|
|
821.0
|
|
Preferred stock
dividends
|
14.4
|
|
14.4
|
|
57.4
|
|
57.4
|
|
Adjusted net income
attributable to common
stockholders
|
$
157.4
|
|
$
137.9
|
|
$
618.6
|
|
$
763.6
|
|
|
|
|
|
|
|
|
|
Diluted
shares
|
49.8
|
|
52.0
|
|
50.6
|
|
52.3
|
|
Adjusted earnings per
diluted share
|
$
3.16
|
|
$
2.65
|
|
$
12.23
|
|
$
14.60
|
|
|
Note: For the three and
twelve months ended December 31, 2024, SG&A expenses, income
from operations, other non-operating expense (income), the
provision for income taxes and earnings per diluted share have been
adjusted to exclude digital transformation costs, the loss on
abandonment of assets, restructuring costs, excise taxes on excess
pension plan assets, the gain recognized on the divestiture of the
WIS business, the loss on termination of business arrangement,
pension settlement cost, and the related income tax effects. For
the three and twelve months ended December 31, 2023, SG&A
expenses, income from operations, other non-operating expense, the
provision for income taxes and earnings per diluted share have been
adjusted to exclude digital transformation costs, merger-related
and integration costs, restructuring costs, accelerated trademark
amortization expense, pension settlement cost, and the related
income tax effects. These non-GAAP financial measures provide a
better understanding of our financial results on a comparable
basis.
|
|
WESCO INTERNATIONAL,
INC.
|
|
RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES
|
|
(in millions, except
per share amounts)
|
|
(Unaudited)
|
|
|
|
Three Months Ended
December 31, 2024
|
|
EBITDA and Adjusted
EBITDA by Segment:
|
|
EES
|
|
CSS
|
|
UBS
|
|
Corporate
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to common stockholders
|
|
$
161.0
|
|
$
127.8
|
|
$
135.3
|
|
$
(273.1)
|
|
$
151.0
|
|
Net income
attributable to noncontrolling interests
|
|
0.2
|
|
0.4
|
|
—
|
|
(0.1)
|
|
0.5
|
|
Preferred stock
dividends
|
|
—
|
|
—
|
|
—
|
|
14.4
|
|
14.4
|
|
Provision for income
taxes(1)
|
|
—
|
|
—
|
|
—
|
|
43.5
|
|
43.5
|
|
Interest expense,
net(1)
|
|
—
|
|
—
|
|
—
|
|
85.1
|
|
85.1
|
|
Depreciation and
amortization
|
|
11.9
|
|
17.6
|
|
7.2
|
|
8.9
|
|
45.6
|
|
EBITDA
|
|
$
173.1
|
|
$
145.8
|
|
$
142.5
|
|
$
(121.3)
|
|
$
340.1
|
|
Other (income)
expense, net
|
|
(3.8)
|
|
20.4
|
|
0.8
|
|
(10.8)
|
|
6.6
|
|
Stock-based
compensation expense
|
|
1.1
|
|
1.6
|
|
0.8
|
|
5.8
|
|
9.3
|
|
Digital transformation
costs(2)
|
|
—
|
|
—
|
|
—
|
|
7.4
|
|
7.4
|
|
Cloud computing
arrangement amortization(3)
|
|
—
|
|
—
|
|
—
|
|
4.4
|
|
4.4
|
|
Restructuring
costs(4)
|
|
—
|
|
—
|
|
—
|
|
2.6
|
|
2.6
|
|
Excise taxes on
pension plan assets(5)
|
|
—
|
|
—
|
|
—
|
|
0.1
|
|
0.1
|
|
Adjusted
EBITDA
|
|
$
170.4
|
|
$
167.8
|
|
$
144.1
|
|
$
(111.8)
|
|
$
370.5
|
|
Adjusted EBITDA
margin %
|
|
8.0 %
|
|
8.2 %
|
|
10.8 %
|
|
|
|
6.7 %
|
|
(1)
The reportable segments do not incur income taxes and interest
expense as these costs are centrally controlled through the
Corporate tax and treasury functions.
|
|
(2)
Digital transformation costs include costs associated with certain
digital transformation initiatives.
|
|
(3)
Cloud computing arrangement amortization consists of expense
recognized in selling, general and administrative expenses for
capitalized implementation costs
for cloud computing arrangements to support
our digital transformation
initiatives.
|
|
(4)
Restructuring costs include severance costs incurred pursuant to an
ongoing restructuring plan.
|
|
(5)
Excise taxes on excess pension plan assets represent the excise
taxes applicable to the excess pension plan assets following the
final settlement of the Company's
U.S. pension
plan.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31, 2023
|
|
EBITDA and Adjusted
EBITDA by Segment:
|
|
EES
|
|
CSS
|
|
UBS
|
|
Corporate
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to common stockholders
|
|
$
152.4
|
|
$
117.4
|
|
$
160.4
|
|
$
(302.6)
|
|
$
127.6
|
|
Net income (loss)
attributable to noncontrolling interests
|
|
0.3
|
|
0.6
|
|
—
|
|
(0.3)
|
|
0.6
|
|
Preferred stock
dividends
|
|
—
|
|
—
|
|
—
|
|
14.4
|
|
14.4
|
|
Provision for income
taxes(1)
|
|
—
|
|
—
|
|
—
|
|
65.7
|
|
65.7
|
|
Interest expense,
net(1)
|
|
—
|
|
—
|
|
—
|
|
97.0
|
|
97.0
|
|
Depreciation and
amortization
|
|
11.0
|
|
17.8
|
|
6.3
|
|
9.7
|
|
44.8
|
|
EBITDA
|
|
$
163.7
|
|
$
135.8
|
|
$
166.7
|
|
$
(116.1)
|
|
$
350.1
|
|
Other (income)
expense, net
|
|
(1.8)
|
|
36.1
|
|
(0.9)
|
|
(22.9)
|
|
10.5
|
|
Stock-based
compensation expense
|
|
2.1
|
|
1.4
|
|
0.8
|
|
9.1
|
|
13.4
|
|
Digital transformation
costs(2)
|
|
—
|
|
—
|
|
—
|
|
7.6
|
|
7.6
|
|
Merger-related and
integration costs(3)
|
|
—
|
|
—
|
|
—
|
|
2.4
|
|
2.4
|
|
Restructuring
costs(4)
|
|
—
|
|
—
|
|
—
|
|
1.3
|
|
1.3
|
|
Adjusted
EBITDA
|
|
$
164.0
|
|
$
173.3
|
|
$
166.6
|
|
$
(118.6)
|
|
$
385.3
|
|
Adjusted EBITDA
margin %
|
|
7.9 %
|
|
9.7 %
|
|
10.4 %
|
|
|
|
7.0 %
|
|
(1)
The reportable segments do not incur income taxes and interest
expense as these costs are centrally controlled through the
Corporate tax and treasury functions.
|
|
(2)
Digital transformation costs include costs associated with certain
digital transformation initiatives.
|
|
(3)
Merger-related and integration costs include integration and
professional fees associated with the integration of Wesco and
Anixter, as well as advisory, legal,
and separation costs associated with the
merger between the two
companies.
|
|
(4)
Restructuring costs include severance costs incurred pursuant to an
ongoing restructuring plan.
|
|
WESCO INTERNATIONAL,
INC.
|
|
RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES
|
|
(in millions, except
per share amounts)
|
|
(Unaudited)
|
|
|
|
Three Months Ended
September 30, 2024
|
|
EBITDA and Adjusted
EBITDA by Segment:
|
|
EES
|
|
CSS
|
|
UBS
|
|
Corporate
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to common stockholders
|
|
$
168.4
|
|
$
150.4
|
|
$
168.5
|
|
$
(297.4)
|
|
$
189.9
|
|
Net (loss) income
attributable to noncontrolling interests
|
|
(1.0)
|
|
0.9
|
|
—
|
|
0.5
|
|
0.4
|
|
Preferred stock
dividends
|
|
—
|
|
—
|
|
—
|
|
14.4
|
|
14.4
|
|
Provision for income
taxes(1)
|
|
—
|
|
—
|
|
—
|
|
69.3
|
|
69.3
|
|
Interest expense,
net(1)
|
|
—
|
|
—
|
|
—
|
|
86.5
|
|
86.5
|
|
Depreciation and
amortization
|
|
12.2
|
|
17.6
|
|
6.9
|
|
9.3
|
|
46.0
|
|
EBITDA
|
|
$
179.6
|
|
$
168.9
|
|
$
175.4
|
|
$
(117.4)
|
|
$
406.5
|
|
Other expense
(income), net(2)
|
|
5.6
|
|
4.7
|
|
(19.7)
|
|
(15.5)
|
|
(24.9)
|
|
Stock-based
compensation expense
|
|
1.1
|
|
1.6
|
|
0.8
|
|
3.3
|
|
6.8
|
|
Digital transformation
costs(3)
|
|
—
|
|
—
|
|
—
|
|
5.4
|
|
5.4
|
|
Cloud computing
arrangement amortization(4)
|
|
—
|
|
—
|
|
—
|
|
3.8
|
|
3.8
|
|
Restructuring
costs(5)
|
|
—
|
|
—
|
|
—
|
|
0.5
|
|
0.5
|
|
Adjusted
EBITDA
|
|
$
186.3
|
|
$
175.2
|
|
$
156.5
|
|
$
(119.9)
|
|
$
398.1
|
|
Adjusted EBITDA
margin %
|
|
8.7 %
|
|
9.0 %
|
|
11.3 %
|
|
|
|
7.3 %
|
|
(1)
The reportable segments do not incur income taxes and interest
expense as these costs are centrally controlled through the
Corporate tax and
treasury functions.
|
|
(2)
Other income for the UBS segment includes the gain on the
divestiture of the WIS business.
|
|
(3)
Digital transformation costs include costs associated with certain
digital transformation initiatives.
|
|
(4)
Cloud computing arrangement amortization consists of expense
recognized in selling, general and administrative expenses for
capitalized
implementation costs for cloud computing
arrangements to support our digital transformation
initiatives.
|
|
(5)
Restructuring costs include severance costs incurred pursuant to an
ongoing restructuring plan.
|
|
|
Note: EBITDA, Adjusted
EBITDA and Adjusted EBITDA margin % are non-GAAP financial measures
that provide indicators of the Company's
performance and its ability to meet debt service requirements. For
the three months ended December 31, 2024, Adjusted EBITDA is
defined as earnings
before interest, taxes, depreciation and amortization before other
non-operating expenses (income), non-cash stock-based compensation
expense, digital
transformation costs, cloud computing arrangement amortization,
restructuring costs and excise taxes on excess pension plan assets
related to the final
settlement of the Anixter Inc. Pension Plan. For the three months
ended December 31, 2023, Adjusted EBITDA is defined as
earnings before interest,
taxes, depreciation and amortization before other non-operating
expenses (income), non-cash stock-based compensation expense,
digital transformation
costs, merger-related and integration costs, and restructuring
costs. For the three months ended September 30, 2024, Adjusted
EBITDA is defined as
earnings before interest, taxes, depreciation and amortization
before other non-operating expenses (income), non-cash stock-based
compensation
expense, digital transformation costs, cloud computing arrangement
amortization, and restructuring costs. Adjusted EBITDA margin % is
calculated by
dividing Adjusted EBITDA by net sales.
|
|
WESCO INTERNATIONAL,
INC.
|
|
RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES
|
|
(in millions, except
per share amounts)
|
|
(Unaudited)
|
|
|
|
Year Ended December
31, 2024
|
|
EBITDA and Adjusted
EBITDA by Segment:
|
|
EES
|
|
CSS
|
|
UBS
|
|
Corporate
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to common stockholders
|
|
$
656.9
|
|
$
480.9
|
|
$
733.0
|
|
$ (1,210.6)
|
|
$
660.2
|
|
Net (loss) income
attributable to noncontrolling interests
|
|
(1.1)
|
|
2.3
|
|
—
|
|
0.6
|
|
1.8
|
|
Preferred stock
dividends
|
|
—
|
|
—
|
|
—
|
|
57.4
|
|
57.4
|
|
Provision for income
taxes(1)
|
|
—
|
|
—
|
|
—
|
|
231.6
|
|
231.6
|
|
Interest expense,
net(1)
|
|
—
|
|
—
|
|
—
|
|
364.9
|
|
364.9
|
|
Depreciation and
amortization
|
|
46.8
|
|
71.5
|
|
28.5
|
|
36.4
|
|
183.2
|
|
EBITDA
|
|
$
702.6
|
|
$
554.7
|
|
$
761.5
|
|
$
(519.7)
|
|
$
1,499.1
|
|
Other expense
(income), net(2)
|
|
10.5
|
|
59.8
|
|
(121.2)
|
|
(41.8)
|
|
(92.7)
|
|
Stock-based
compensation expense
|
|
4.4
|
|
6.6
|
|
3.1
|
|
14.8
|
|
28.9
|
|
Digital transformation
costs(3)
|
|
—
|
|
—
|
|
—
|
|
24.9
|
|
24.9
|
|
Loss on abandonment of
assets(4)
|
|
—
|
|
—
|
|
—
|
|
17.8
|
|
17.8
|
|
Cloud computing
arrangement amortization(5)
|
|
—
|
|
—
|
|
—
|
|
14.1
|
|
14.1
|
|
Restructuring
costs(6)
|
|
—
|
|
—
|
|
—
|
|
12.1
|
|
12.1
|
|
Excise taxes on excess
pension plan assets(7)
|
|
—
|
|
—
|
|
—
|
|
4.9
|
|
4.9
|
|
Adjusted
EBITDA
|
|
$
717.5
|
|
$
621.1
|
|
$
643.4
|
|
$
(472.9)
|
|
$
1,509.1
|
|
Adjusted EBITDA
margin %
|
|
8.4 %
|
|
8.2 %
|
|
11.2 %
|
|
|
|
6.9 %
|
|
(1)
The reportable segments do not incur income taxes and interest
expense as these costs are centrally controlled through the
Corporate tax and treasury
functions.
|
|
(2)
Other income for the UBS segment includes the gain on the
divestiture of the WIS business.
|
|
(3)
Digital transformation costs include costs associated with certain
digital transformation initiatives.
|
|
(4)
Loss on abandonment of assets represents the write-off of certain
capitalized cloud computing arrangement implementation costs
relating to a third-party
developed operations management software
product in favor of an application with functionality that better
suits the Company's operation.
|
|
(5)
Cloud computing arrangement amortization consists of expense
recognized in selling, general and administrative expenses for
capitalized implementation
costs for cloud computing arrangements to
support our digital transformation
initiatives.
|
|
(6)
Restructuring costs include severance costs incurred pursuant to an
ongoing restructuring plan.
|
|
(7)
Excise taxes on excess pension plan assets represent the excise
taxes applicable to the excess pension plan assets following the
final settlement of the
Company's U.S. pension plan.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December
31, 2023
|
|
EBITDA and Adjusted
EBITDA by Segment:
|
|
EES
|
|
CSS
|
|
UBS
|
|
Corporate
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to common stockholders
|
|
$
668.7
|
|
$
531.1
|
|
$
712.5
|
|
$
(1,204.2)
|
|
$
708.1
|
|
Net (loss) income
attributable to noncontrolling interests
|
|
(0.5)
|
|
1.6
|
|
—
|
|
(0.5)
|
|
0.6
|
|
Preferred stock
dividends
|
|
—
|
|
—
|
|
—
|
|
57.4
|
|
57.4
|
|
Provision for income
taxes(1)
|
|
—
|
|
—
|
|
—
|
|
225.9
|
|
225.9
|
|
Interest expense,
net(1)
|
|
—
|
|
—
|
|
—
|
|
389.3
|
|
389.3
|
|
Depreciation and
amortization
|
|
43.3
|
|
71.7
|
|
25.0
|
|
41.3
|
|
181.3
|
|
EBITDA
|
|
$
711.5
|
|
$
604.4
|
|
$
737.5
|
|
$
(490.8)
|
|
$
1,562.6
|
|
Other expense
(income), net
|
|
10.1
|
|
74.2
|
|
(1.4)
|
|
(57.8)
|
|
25.1
|
|
Stock-based
compensation expense(2)
|
|
5.8
|
|
5.2
|
|
3.2
|
|
31.3
|
|
45.5
|
|
Digital transformation
costs(3)
|
|
—
|
|
—
|
|
—
|
|
36.1
|
|
36.1
|
|
Merger-related and
integration costs(4)
|
|
—
|
|
—
|
|
—
|
|
19.3
|
|
19.3
|
|
Restructuring
costs(5)
|
|
—
|
|
—
|
|
—
|
|
16.7
|
|
16.7
|
|
Adjusted
EBITDA
|
|
$
727.4
|
|
$
683.8
|
|
$
739.3
|
|
$
(445.2)
|
|
$
1,705.3
|
|
Adjusted EBITDA
margin %
|
|
8.4 %
|
|
9.6 %
|
|
11.2 %
|
|
|
|
7.6 %
|
|
(1)
The reportable segments do not incur income taxes and interest
expense as these costs are centrally controlled through the
Corporate tax and treasury
functions.
|
|
(2) Stock-based compensation
expense in the calculation of adjusted EBITDA for the year ended
December 31, 2023 excludes $2.6 million that is included
in
merger-related and integration
costs.
|
|
(3)
Digital transformation costs include costs associated with certain
digital transformation initiatives.
|
|
(4)
Merger-related and integration costs include integration and
professional fees associated with the integration of Wesco and
Anixter, as well as advisory, legal,
and separation costs associated with the
merger between the two companies.
|
|
(5)
Restructuring costs include severance costs incurred pursuant to an
ongoing restructuring plan.
|
|
|
Note: EBITDA, Adjusted
EBITDA and Adjusted EBITDA margin % are non-GAAP financial measures
that provide indicators of the Company's performance and its
ability to meet
debt service requirements. For the year ended December 31,
2024, Adjusted EBITDA is defined as earnings before interest,
taxes, depreciation and amortization before other non-
operating expenses (income), non-cash stock-based compensation
expense, digital transformation costs, loss on abandonment of
assets, cloud computing arrangement amortization,
restructuring costs and excise taxes on excess pension plan assets
related to the final settlement of the Anixter Inc. Pension Plan.
For the year ended December 31, 2023, Adjusted
EBITDA is defined as earnings before interest, taxes, depreciation
and amortization before other non-operating expenses (income),
non-cash stock-based compensation expense,
digital transformation costs, merger-related and integration costs,
and restructuring costs. Adjusted EBITDA margin % is calculated by
dividing Adjusted EBITDA by net sales.
|
|
WESCO INTERNATIONAL,
INC.
|
|
RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES
|
|
(in millions, except
per share amounts)
|
|
(Unaudited)
|
|
|
Twelve months
ended
|
|
Financial
Leverage:
|
December 31,
2024
|
|
December 31,
2023
|
|
|
|
|
|
Net income
attributable to common stockholders
|
$
660.2
|
|
$
708.1
|
|
Net income
attributable to noncontrolling interests
|
1.8
|
|
0.6
|
|
Preferred stock
dividends
|
57.4
|
|
57.4
|
|
Provision for income
taxes
|
231.6
|
|
225.9
|
|
Interest expense,
net
|
364.9
|
|
389.3
|
|
Depreciation and
amortization
|
183.2
|
|
181.3
|
|
EBITDA
|
$
1,499.1
|
|
$
1,562.6
|
|
Other (income)
expense, net
|
(92.7)
|
|
25.1
|
|
Stock-based
compensation expense
|
28.9
|
|
45.5
|
|
Merger-related and
integration costs(1)
|
—
|
|
19.3
|
|
Restructuring
costs(2)
|
12.1
|
|
16.7
|
|
Digital transformation
costs(3)
|
24.9
|
|
36.1
|
|
Excise taxes on excess
pension plan assets costs(4)
|
4.9
|
|
—
|
|
Loss on abandonment of
assets(5)
|
17.8
|
|
$
—
|
|
Cloud computing
arrangement amortization(6)
|
14.1
|
|
—
|
|
Adjusted
EBITDA
|
$
1,509.1
|
|
$
1,705.3
|
|
|
|
|
|
As of
|
|
December 31,
2024
|
|
December 31,
2023
|
|
Short-term debt and
current portion of long-term debt, net
|
$
19.5
|
|
$
8.6
|
|
Long-term debt,
net
|
5,045.5
|
|
5,313.1
|
|
Debt discount and debt
issuance costs(7)
|
47.2
|
|
43.0
|
|
Fair value adjustments
to the Anixter Senior Notes(7)
|
(0.1)
|
|
(0.1)
|
|
Total debt
|
5,112.1
|
|
5,364.6
|
|
Less: Cash and cash
equivalents
|
702.6
|
|
524.1
|
|
Total debt, net of
cash
|
$
4,409.5
|
|
$
4,840.5
|
|
|
|
|
|
Financial leverage
ratio
|
2.9
|
|
2.8
|
|
|
|
(1)
|
Merger-related and
integration costs include integration and professional fees
associated with the integration of Wesco and Anixter, as well as
advisory, legal, and separation costs associated with the merger
between the two companies.
|
|
(2)
|
Restructuring costs
include severance costs incurred pursuant to an ongoing
restructuring plan.
|
|
(3)
|
Digital transformation
costs include costs associated with certain digital transformation
initiatives, which have historically been included in
merger-related and integration costs in prior years.
|
|
(4)
|
Excise taxes on excess
pension plan assets represent the excise taxes applicable to the
excess pension plan assets following the final settlement of the
Company's U.S. pension plan.
|
|
(5)
|
Loss on abandonment of
assets represents the write-off of certain capitalized cloud
computing arrangement implementation costs relating to a
third-party developed operations management software product in
favor of an application with functionality that better suits the
Company's operations.
|
|
(6)
|
Cloud computing
arrangement amortization consists of expense recognized in selling,
general and administrative expenses for capitalized implementation
costs for cloud computing arrangements to support our digital
transformation initiatives.
|
|
(7)
|
Debt is presented in
the condensed consolidated balance sheets net of debt discount and
debt issuance costs, and includes adjustments to record the
long-term debt assumed in the merger with Anixter at its
acquisition date fair value.
|
|
|
|
Note: Financial
leverage is a non-GAAP measure of the use of debt. Financial
leverage ratio is calculated by dividing total debt, excluding debt
discount, debt issuance costs and fair value adjustments, net of
cash, by adjusted EBITDA. EBITDA is defined as the trailing twelve
months earnings before interest, taxes, depreciation and
amortization. Adjusted EBITDA is defined as the trailing twelve
months EBITDA before other non-operating expense (income), non-cash
stock-based compensation expense, merger-related and integration
costs, restructuring costs, digital transformation costs, excise
taxes on excess pension plan assets related to the final settlement
of the Anixter Inc. Pension Plan, loss on abandonment of
assets, and cloud computing arrangement amortization.
|
|
WESCO INTERNATIONAL,
INC.
|
|
RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES
|
|
(in millions, except
per share amounts)
|
|
(Unaudited)
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
Free Cash
Flow:
|
December 31,
2024
|
|
December 31,
2023
|
|
December 31,
2024
|
|
December 31,
2023
|
|
|
|
|
|
|
|
|
|
Cash flow provided by
operations
|
$
276.6
|
|
$
69.3
|
|
$
1,101.2
|
|
$
493.2
|
|
Less: Capital
expenditures
|
(24.3)
|
|
(28.7)
|
|
(94.7)
|
|
(92.3)
|
|
Add: Other
adjustments
|
16.1
|
|
18.6
|
|
38.7
|
|
42.7
|
|
Free cash
flow
|
$
268.4
|
|
$
59.2
|
|
$
1,045.2
|
|
$
443.6
|
|
% of adjusted
net income
|
155.8 %
|
|
38.7 %
|
|
154.2 %
|
|
54.0 %
|
|
|
Note: Free cash flow is
a non-GAAP financial 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.
For the three and twelve months ended December 31, 2024, the
Company paid for certain costs related to digital transformation
and restructuring. For the three and twelve months ended
December 31, 2023, the Company paid for certain costs to
integrate the acquired Anixter business and related to digital
transformation as well as certain restructuring costs. Such
expenditures have been added back to operating cash flow to
determine free cash flow for such periods. Our calculation of free
cash flow may not be comparable to similar measures used by other
companies.
|
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SOURCE Wesco International
