WESCO INTERNATIONAL, INC. 
By (Logo: http://www.newscom.com/cgi-bin/prnh/20030508/WCCLOGO )
Fourth Quarter Results
Consolidated net sales for the fourth quarter of 2007 were
Stephen A. Van Oss, Senior Vice President and Chief Financial and Administrative Officer stated, "Our Company performed quite well during the quarter maintaining a tight focus on cost management while simultaneously making progress on our commitment to add sales capacity throughout the organization. Core sales growth at 3% was in line with our expectations. We are particularly pleased to see our operating profit pull through return to near target levels. This was achieved despite tough comparisons to last year's fourth quarter which included the favorable impact of one-time items related to last year's acquisitions and sales growth below levels generally necessary to achieve targeted operating profit pull through of 50% or more."
Year-end Results
For the year 2007, net sales increased 13% to
Roy W. Haley, Chairman and Chief Executive Officer, commented, "WESCO produced another year of record operating and financial results in 2007, despite sales weakness encountered early in the year. We are encouraged by the increased activity levels in the second half of 2007. The organization has worked very hard over the past several quarters to increase our sales and marketing capabilities while also expanding our capacity for growth. We believe these ongoing activities are appropriate and will yield additional profitable growth in 2008."
Teleconference
WESCO will conduct a teleconference to discuss the fourth quarter earnings
as described in this News Release on
WESCO International, Inc. (NYSE: WCC) is a publicly traded Fortune 500
holding company, headquartered in
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
WESCO INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(dollar amounts in millions, except per share amounts)
(Unaudited)
Three Months Ended Three Months Ended
December 31, 2007 December 31, 2006
Net sales $1,489.2 $1,376.1
Cost of goods sold
(excluding depreciation
and amortization below) 1,187.3 1,088.9
Gross profit 301.9 20.3% 287.2 20.9%
Selling, general and
administrative expenses 193.5 13.0% 184.6 13.4%
Depreciation and
amortization 9.6 9.4
Income from operations 98.8 6.6% 93.2 6.8%
Interest expense, net 16.6 7.5
Other expenses - 5.7
Income before income taxes 82.2 5.5% 80.0 5.8%
Provision for income taxes 21.1 21.7
Net income $61.1 3.9% $58.3 4.2%
Diluted earnings per common
share $1.34 $1.10
Weighted average shares
outstanding (in millions) 45.5 52.8
Twelve Months Ended Twelve Months Ended
December 31, 2007 December 31, 2006
Net sales $6,003.4 $5,320.6
Cost of goods sold
(excluding depreciation
and amortization below) 4,781.3 4,234.1
Gross profit 1,222.1 20.4% 1,086.5 20.4%
Selling, general and
administrative expenses 791.1 13.2% 692.8 13.0%
Depreciation and
amortization 36.8 28.7
Income from operations 394.2 6.6% 365.0 6.9%
Interest expense, net 63.2 24.6
Other expenses - 22.8
Income before income taxes 331.0 5.5% 317.6 6.0%
Provision for income taxes 90.4 100.3
Net income $240.6 4.0% $217.3 4.1%
Diluted earnings per common
share $4.99 $4.14
Weighted average shares
outstanding (in millions) 48.3 52.5
Note: As previously reported on March 1, 2007, in WESCO's Annual Report
on Form 10-K, WESCO amended and restated its accounts receivable
securitization facility as of December 29, 2006. Prior to the amendment
and restatement, interest expense and other costs related to the
Receivables Facility were recorded as other expense in the consolidated
statement of income. For the year ended December 31, 2007, costs
associated with the Receivables Facility totaled $28.3 million and are
included within interest expense in the consolidated statement of income.
WESCO INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollar amounts in millions)
(Unaudited)
December 31, December 31,
2007 2006
Assets
Current Assets
Cash and cash equivalents $72.3 $73.4
Trade accounts receivable (See Note) 844.5 830.0
Inventories, net 666.0 613.6
Other current assets 114.4 101.1
Total current assets 1,697.2 1,618.1
Other assets 1,179.4 1,205.9
Total assets $2,876.6 $2,824.0
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable $626.3 $590.3
Other current liabilities (See Note) 683.1 563.4
Total current liabilities 1,309.4 1,153.7
Long-term debt 811.3 743.9
Other noncurrent liabilities 148.2 163.2
Total liabilities 2,268.9 2,060.8
Stockholders' Equity
Total stockholders' equity 607.7 763.2
Total liabilities and stockholders'
equity $2,876.6 $2,824.0
Note: As previously noted, WESCO amended and restated its accounts
receivable securitization facility as of December 29, 2006. Historically,
accounts receivable sold under the facility were removed from the
consolidated balance sheet and accounted for as an off-balance sheet
arrangement. Effective with the amendment, sales of accounts receivable
pursuant to the facility no longer qualify for "sale treatment" under
GAAP. Therefore, the consolidated balance sheets as of December 31, 2007
and 2006 reflect $480 million and $390.5 million, respectively, of
additional accounts receivable and related borrowings.
WESCO INTERNATIONAL, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(dollar amounts in millions)
(Unaudited)
December 31, December 31,
2007 2006
Total debt $1,316.3 $1,140.3
Plus: A/R Securitization - -
Less: Cash and cash equivalents (72.3) (73.4)
Total indebtedness (including A/R
Securitization Program), net of cash
(See Note) $1,244.0 $1,066.9
Note: As previously noted, WESCO amended its accounts receivable
securitization facility as of December 29, 2006, which changed the
accounting treatment for borrowings under the facility and accounts
receivable to "on-balance sheet" from "off-balance sheet". Total
indebtedness (including A/R Securitization Program), net of cash is
provided by the Company as an additional measure of the Company's
leverage. 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 Three Twelve Twelve
Months Months Months Months
Ended Ended Ended Ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2007 2006 2007 2006
Cash flow provided by operations $55,069 $142,013 $262,278 $207,083
Change in A/R Securitization -- (75,500) -- 6,500
Less: Capital expenditures (4,947) (3,487) (16,118) (18,359)
Free cash flow (excluding
effects of A/R Securitization
Program) (See Note) $50,122 $63,026 $246,160 $195,224
Note: Free cash flow is provided by the Company as an additional liquidity
measure. Capital expenditures are deducted from operating cash flow to
determine free cash flow. This amount represents excessive funds
available to management to service all of its financing needs.
SOURCE WESCO International, Inc.
