- Record net sales of $4.7 billion, up 14.2% YOY
- Organic sales growth of 13.6%
- Sequential growth of 2.9% on a reported basis; 3.4% on an
organic basis
- Record backlog as of September 30, 2021
- Record operating profit of $229.5 million; operating margin of
4.9%
- Record gross margin of 21.3%, up 170 basis points YOY and up 30
basis points sequentially
- Adjusted operating profit of $280.4 million; adjusted operating
margin of 5.9%, up 110 basis points YOY
- Adjusted EBITDA of $330.3 million; adjusted EBITDA margin of
7.0%, up 31% and 90 basis points YOY
- Record net income attributable to common stockholders of $105.2
million
- Adjusted net income attributable to common stockholders of
$142.6 million, up 71% YOY
- Earnings per diluted share of $2.02
- Adjusted earnings per diluted share of $2.74, up 65% YOY
- Leverage of 4.1x; improvement of 0.4x sequentially and 1.6x
post-close of the Anixter merger
- Trailing twelve months adjusted EBITDA of $1,067.4 million
- Raising 2021 outlook for adjusted earnings per diluted share to
a range of $9.20 to $9.40
WESCO International, Inc. (NYSE: WCC), a leading provider of
business-to-business distribution, logistics services, and supply
chain solutions, announces its results for the third quarter of
2021.
“We had another exceptional quarter and again delivered
outstanding results across the board. Early in the second year of
our transformational combination of WESCO and Anixter, the
substantial value creation of the new WESCO is building,” said John
Engel, Chairman, President and CEO. “Our sales growth accelerated
versus 2019 pre-pandemic levels, and our margin performance and
backlog achieved new records for the company. We are outperforming
the market across our three business units by utilizing our
increased scale, expanded portfolio and industry-leading positions.
And, we are continuing to de-lever our balance sheet at a rapid
rate while investing in our digital transformation. The impressive
progress we’re making in the integration is a direct result of the
dedication, commitment and relentless execution of the entire WESCO
team. I want to thank all our associates for their strong teamwork
on our transformation, supplier engagement and customer focus in
providing the products, services and resilient supply chain
solutions our customers need.”
Mr. Engel continued, “We are seeing sales and margin momentum in
each of our three strategic business units. Based on our strong
third quarter results, we are raising our full year 2021 outlook
for sales, margin and profitability for the third time this year.
We now expect sales to increase 11% to 13%, adjusted EBITDA margin
to expand to between 6.4% and 6.5%, and adjusted EPS to grow to a
range of $9.20 to $9.40. As a result of our expected sales growth
and increasing inventories to support our customers, we are also
adjusting our full year 2021 outlook for free cash flow to
approximately 80% of net income.”
Mr. Engel added, “We are transforming into a growth company as a
result of our digital investments, cross-selling our expanded
portfolio of products and services, and providing resilient and
sustainable supply chain solutions for our customers around the
world. Continued execution of our aggressive integration plan, and
capitalizing on the secular growth trends, will only accelerate
this shift. The value creation potential of the new WESCO is
building, and we are only in the early days.”
The following are results for the three months ended September
30, 2021 compared to the three months ended September 30, 2020.
- Net sales were $4.7 billion for the third quarter of 2021
compared to $4.1 billion for the third quarter of 2020, an increase
of 14.2%. Organic sales for the third quarter of 2021 grew by 13.6%
as foreign exchange rates positively impacted reported net sales by
1.4% and divestitures negatively impacted reported net sales by
0.8%. Sequentially, net sales grew 2.9% and organic sales increased
3.4%. All segments increased sales versus the prior year period.
Backlog at the end of the third quarter of 2021 increased by over
60% compared to the prior year quarter and the end of 2020.
Sequentially, backlog grew approximately 15%. WESCO's book-to-bill
ratio was above 1.0 for the quarter ended September 30, 2021,
indicating strong demand.
- Cost of goods sold for the third quarter of 2021 was $3.7
billion compared to $3.4 billion for the third quarter of 2020, and
gross profit was $1.0 billion and $785.5 million, respectively. As
a percentage of net sales, gross profit was 21.3% and 19.0% for the
third quarter of 2021 and 2020, respectively. Gross profit as a
percentage of net sales for the third quarter of 2021 reflects the
favorable impact of margin improvement initiatives, partially
offset by a write-down to the carrying value of certain personal
protective equipment products, which had a negative impact of 10
basis points. Gross profit as a percentage of net sales for the
third quarter of 2020 was 19.6% excluding the effect of
merger-related fair value adjustments of $28.0 million.
Sequentially, gross profit as a percentage of net sales increased
30 basis points from 21.0% for the second quarter of 2021.
- Selling, general and administrative expenses were $721.8
million, or 15.3% of net sales, for the third quarter of 2021,
compared to $562.0 million, or 13.6% of net sales, for the third
quarter of 2020. SG&A expenses for the third quarter of 2021
include merger-related costs of $35.8 million. Adjusted for this
amount, SG&A expenses were $686.0 million, or 14.5% of net
sales, for the third quarter of 2021. SG&A expenses for the
third quarter of 2021 reflect higher salaries, variable
compensation expense and benefit costs, as well as volume-related
costs driven by significant sales growth, partially offset by the
realization of integration cost synergies. SG&A expenses for
the third quarter of 2020 include $14.2 million of merger-related
costs, as well as a gain on the sale of an operating branch in the
U.S. of $19.8 million. Adjusted for these amounts, SG&A
expenses were $567.6 million, or 13.7% of net sales, for the third
quarter of 2020, reflecting cost reduction actions taken in
response to the COVID-19 pandemic that lowered SG&A expenses as
a percentage of net sales by approximately 70 basis points.
- Operating profit was $229.5 million for the third quarter of
2021, compared to $178.1 million for the third quarter of 2020, an
increase of $51.4 million, or 28.8%. Operating profit as a
percentage of net sales was 4.9% for the current quarter, compared
to 4.3% for the third quarter of the prior year. Operating profit
for the third quarter of 2021 includes the aforementioned
merger-related costs. Additionally, in connection with an
integration initiative to review the Company's brand strategy,
certain legacy WESCO trademarks are migrating to a master brand
architecture, which resulted in $15.1 million of accelerated
amortization expense for the third quarter of 2021. Adjusted for
these amounts, operating profit was $280.4 million, or 5.9% of net
sales. In the third quarter of 2020, operating profit was $200.5
million, or 4.8% of net sales, adjusted for merger-related costs
and fair value adjustments totaling $42.2 million and the gain on
sale of a U.S. operating branch of $19.8 million. Adjusted
operating margin was up 110 basis points compared to the prior
year.
- Net interest expense for the third quarter of 2021 was $69.7
million, compared to $74.5 million for the third quarter of 2020.
The decrease reflects a reduction of debt, including the repayment
of higher fixed rate debt with lower variable rate debt.
- The effective tax rate for the third quarter of 2021 was 27.2%,
compared to 23.3% for the third quarter of 2020. The higher
effective tax rate in the current quarter reflects the impact on
the estimated annual effective tax rate of a decrease in expected
foreign tax credit utilization.
- Net income attributable to common stockholders was $105.2
million for the third quarter of 2021, compared to $66.2 million
for the third quarter of 2020. Adjusted for merger-related costs
and fair value adjustments, accelerated amortization expense
associated with migrating to the Company's master brand
architecture, gain on sale of a U.S. operating branch, and the
related income tax effects, net income attributable to common
stockholders was $142.6 million and $83.6 million for the third
quarter of 2021 and 2020, respectively, an increase of 70.6%.
- Earnings per diluted share for the third quarter of 2021 was
$2.02, based on 52.1 million diluted shares, compared to $1.31 for
the third quarter of 2020, based on 50.5 million diluted shares.
Adjusted for merger-related costs and fair value adjustments,
accelerated amortization expense associated with migrating to the
Company's master brand architecture, gain on sale of a U.S.
operating branch, and the related income tax effects, earnings per
diluted share for the third quarter of 2021 and 2020 was $2.74 and
$1.66, respectively, an increase of 65.1%.
- Operating cash flow for the third quarter of 2021 was $69.9
million, compared to $286.3 million for the third quarter of 2020.
Free cash flow for the third quarter of 2021 was $85.0 million, or
54% of adjusted net income, compared to $307.4 million, or 315% of
adjusted net income, for the third quarter of 2020. Free cash flow
for the current year period was lower than the comparable prior
year period primarily due to changes in working capital to support
double-digit sales growth.
The following are results for the nine months ended September
30, 2021 compared to the nine months ended September 30, 2020. The
Company completed the merger with Anixter on June 22, 2020, thereby
impacting comparisons to the prior year.
- Net sales were $13.4 billion for the first nine months of 2021
compared to $8.2 billion for the first nine months of 2020, an
increase of 63.1% primarily due to the merger with Anixter.
- Cost of goods sold for the first nine months of 2021 was $10.6
billion compared to $6.6 billion for the first nine months of 2020,
and gross profit was $2.8 billion and $1.6 billion, respectively.
As a percentage of net sales, gross profit was 20.8% and 19.0% for
the first nine months of 2021 and 2020, respectively. Gross profit
as a percentage of net sales for the first nine months of 2021
reflects the favorable impact of margin improvement initiatives,
partially offset by the write-down to the carrying value of certain
personal protective equipment products, which had a negative impact
of 20 basis points. Gross profit as a percentage of net sales for
the first nine months of 2020 was 19.3% excluding the effect of
merger-related fair value adjustments of $28.0 million.
- Selling, general and administrative expenses were $2.1 billion,
or 15.4% of net sales, for the first nine months of 2021, compared
to $1.2 billion, or 14.9% of net sales, for the first nine months
of 2020. SG&A expenses for the first nine months of 2021
include merger-related costs of $119.8 million, as well as a net
gain of $8.9 million resulting from the sale of WESCO's legacy
utility and data communications businesses in Canada during the
first quarter of 2021, which were divested in connection with the
merger. Adjusted for these amounts, SG&A expenses were 14.6% of
net sales for the first nine months of 2021. SG&A expenses for
the first nine months of 2020 include merger-related costs of $92.1
million, as well as a gain on the sale of an operating branch in
the U.S. of $19.8 million. Adjusted for these amounts, SG&A
expenses were $1.1 billion, or 14.0% of net sales, for the first
nine months of 2020, reflecting cost reduction actions taken in
response to the COVID-19 pandemic that lowered SG&A expenses as
a percentage of net sales by approximately 60 basis points.
- Operating profit was $581.6 million for the first nine months
of 2021, compared to $254.3 million for the first nine months of
2020. Operating profit as a percentage of net sales was 4.4% for
the current nine month period, compared to 3.1% for the first nine
months of the prior year. Operating profit for the first nine
months of 2021 includes merger-related costs and the net gain on
the Canadian divestitures, as well as $20.2 million of accelerated
amortization expense associated with migrating to the Company's
master brand architecture. Adjusted for these amounts, operating
profit was $712.7 million, or 5.3% of net sales. Adjusted for
merger-related costs and fair value adjustments totaling $120.1
million, and gain on sale of a U.S. operating branch of $19.8
million, operating profit was $354.6 million for the first nine
months of 2020, or 4.3% of net sales. Adjusted operating margin was
up 100 basis points compared to the prior year.
- Net interest expense for the first nine months of 2021 was
$207.7 million, compared to $152.3 million for the first nine
months of 2020. The increase in interest expense was driven by
financing activity related to the Anixter merger.
- The effective tax rate for the first nine months of 2021 was
22.0%, compared to 22.9% for the first nine months of 2020. The
effective tax rate for the current year-to-date period reflects
discrete income tax benefits resulting from a decrease in the
valuation allowance recorded against foreign tax credit
carryforwards of $8.3 million and deductible stock-based
compensation of $7.8 million, which were partially offset by
discrete income tax expense of $4.2 million associated with
return-to-provision adjustments. These discrete items reduced the
estimated annual effective tax rate by approximately 3.1 percentage
points.
- Net income attributable to common stockholders was $254.9
million for the first nine months of 2021, compared to $64.8
million for the first nine months of 2020. Adjusted for
merger-related costs and fair value adjustments, net gains on the
Canadian divestitures and sale of a U.S. operating branch,
accelerated amortization expense associated with migrating to the
Company's master brand architecture, and the related income tax
effects, net income attributable to common stockholders was $353.0
million and $143.0 million for the first nine months of 2021 and
2020, respectively, an increase of 146.8%.
- Earnings per diluted share for the first nine months of 2021
was $4.91, based on 51.9 million diluted shares, compared to $1.44
for the first nine months of 2020, based on 45.1 million diluted
shares. Adjusted for merger-related costs and fair value
adjustments, net gains on the Canadian divestitures and sale of a
U.S. operating branch, accelerated amortization expense associated
with migrating to the Company's master brand architecture, and the
related income tax effects, earnings per diluted share for the
first nine months of 2021 and 2020 was $6.80 and $3.17,
respectively, an increase of 114.5%.
- Operating cash flow for the first nine months of 2021 was
$172.7 million, compared to $418.9 million for the first nine
months of 2020. Free cash flow for the first nine months of 2021
was $209.2 million, or 53% of adjusted net income, compared to
$462.1 million, or 292% of adjusted net income, for the first nine
months of 2020. Free cash flow for the current year period was
lower than the comparable prior year period primarily due to
changes in working capital to support double-digit sales growth.
Segment Results
The Company has operating segments that are organized around
three strategic business units consisting of Electrical &
Electronic Solutions ("EES"), Communications & Security
Solutions ("CSS") and Utility & Broadband Solutions
("UBS").
Corporate expenses are incurred to obtain and coordinate
financing, tax, information technology, legal and other related
services. Segment results include depreciation expense or other
allocations related to various corporate assets. Interest expense
and other non-operating items are not allocated to the segments or
reviewed on a segment basis. Corporate expenses are not directly
identifiable with our reportable segments and are reported in the
tables below to reconcile the reportable segments to the
consolidated financial statements.
The following are results by segment for the three months ended
September 30, 2021 compared to the three months ended September 30,
2020. For the third quarter of 2021, operating profit and adjusted
EBITDA margin improved for all segments (EES, CSS and UBS),
reflecting sales growth, gross margin expansion due to strong
execution of margin improvement initiatives and the realization of
integration cost synergies, partially offset by higher salaries,
variable compensation expense and benefit costs, as well as
volume-related costs.
- EES reported net sales of $2.0 billion for the third quarter of
2021, compared to $1.7 billion for the third quarter of 2020, an
increase of 19.9%. Organic sales for the third quarter of 2021 grew
by 19.0% as foreign exchange rates positively impacted reported net
sales by 2.0% and the Canadian divestitures negatively impacted
reported net sales by 1.1%. The increase reflects double-digit
sales growth in our construction, original equipment manufacturer
and industrial businesses due to business expansion, price
inflation, and the benefits of cross selling. Operating profit was
$155.2 million for the third quarter of 2021, compared to $105.5
million for the third quarter of 2020, an increase of $49.7
million. The increase primarily reflects the factors impacting the
overall business, as described above. Additionally, operating
profit for the third quarter of 2021 was negatively impacted by the
inventory write-down described above, as well as accelerated
amortization expense of $6.3 million associated with migrating to
the Company's master brand architecture. EBITDA, adjusted for other
non-operating income and non-cash stock-based compensation, was
$173.9 million for the third quarter of 2021, or 8.8% of net sales,
compared to $108.9 million for the third quarter of 2020, or 6.6%
of net sales.
- CSS reported net sales of $1.5 billion for the third quarter of
2021, compared to $1.4 billion for the third quarter of 2020, an
increase of 7.2%. Organic sales for the third quarter of 2021 grew
by 6.2% as foreign exchange rates positively impacted reported net
sales by 1.0%. The increase reflects sales growth in our network
infrastructure and security solutions businesses driven by business
expansion and the enhanced scale and capabilities afforded by the
combination of WESCO and Anixter. Operating profit was $108.2
million for the third quarter of 2021, compared to $89.6 million
for the third quarter of 2020, an increase of $18.7 million. The
increase primarily reflects the factors impacting the overall
business, as described above. Additionally, operating profit for
the third quarter of 2021 was negatively impacted by 20 basis
points from the inventory write-down described above, as well as
accelerated amortization expense of $8.3 million associated with
migrating to the Company's master brand architecture. EBITDA,
adjusted for other non-operating expenses and non-cash stock-based
compensation, was $133.7 million for the third quarter of 2021, or
9.0% of net sales, compared to $121.2 million for the third quarter
of 2020, or 8.7% of net sales.
- UBS reported net sales of $1.3 billion for the third quarter of
2021, compared to $1.1 billion for the third quarter of 2020, an
increase of 14.4%. Organic sales for the third quarter of 2021 grew
by 14.8% as foreign exchange rates positively impacted reported net
sales by 0.9% and the Canadian divestitures negatively impacted
reported net sales by 1.3%. The increase reflects broad-based
growth in our utility business, as well as continued strong demand
in our broadband and integrated supply businesses. Operating profit
was $108.2 million for the third quarter of 2021, compared to $74.1
million for the third quarter of 2020, an increase of $34.1
million. The increase primarily reflects the factors impacting the
overall business, as described above. Operating profit for the
third quarter of 2021 was negatively impacted by accelerated
amortization expense of $0.5 million associated with migrating to
the Company's master brand architecture. EBITDA, adjusted for other
non-operating expenses and non-cash stock-based compensation, was
$114.7 million for the third quarter of 2021, or 9.1% of net sales,
compared to $86.1 million for the third quarter of 2020, or 7.8% of
net sales.
The following are results by segment for the nine months ended
September 30, 2021 compared to the nine months ended September 30,
2020, which primarily reflect the impact of the merger with
Anixter. For the nine months ended September 30, 2021, operating
profit and adjusted EBITDA margin improved for all segments and
reflects sales growth and gross margin expansion, as well as the
realization of integration cost synergies and structural cost
takeout actions. Operating profit for the first nine months of 2021
was negatively impacted by higher volume-related costs, and
SG&A payroll and payroll-related expenses consisting of
salaries, variable compensation expense and benefit costs,
including the impact of reinstating salaries and certain benefits
of legacy WESCO employees that had been reduced or suspended in the
prior year in response to the COVID-19 pandemic.
- EES reported net sales of $5.6 billion for the first nine
months of 2021, compared to $3.8 billion for the first nine months
of 2020, an increase of 47.6%. In addition to the impact from the
merger, the increase reflects improved economic conditions and
strong demand. Operating profit was $409.1 million for the first
nine months of 2021, compared to $194.6 million for the first nine
months of 2020, an increase of $214.4 million. The increase
primarily reflects the factors impacting the overall business, as
described above. Additionally, operating profit for the first nine
months of 2021 was negatively impacted by 10 basis points from the
inventory write-down described above, as well as accelerated
amortization expense of $8.4 million associated with migrating to
the Company's master brand architecture. EBITDA, adjusted for other
non-operating income and non-cash stock-based compensation, was
$453.9 million for the first nine months of 2021, or 8.1% of net
sales, compared to $214.5 million for the first nine months of
2020, or 5.6% of net sales.
- CSS reported net sales of $4.2 billion for the nine months
ended September 30, 2021, compared to $2.0 billion for the nine
months ended September 30, 2020, an increase of 115.0%. The
increase reflects the impact from the merger and broad-based growth
in our security solutions and network infrastructure businesses.
Operating profit was $293.4 million for the first nine months of
2021, compared to $127.5 million for the first nine months of 2020,
an increase of $165.9 million. The increase primarily reflects the
factors impacting the overall business, as described above.
Additionally, operating profit for the first nine months of 2021
was negatively impacted by 40 basis points from the inventory
write-down described above, as well as accelerated amortization
expense of $11.1 million associated with migrating to the Company's
master brand architecture. EBITDA, adjusted for other non-operating
expenses and non-cash stock-based compensation, was $355.5 million
for the first nine months of 2021, or 8.5% of net sales, compared
to $165.4 million for the first nine months of 2020, or 8.5% of net
sales.
- UBS reported net sales of $3.5 billion for the nine months
ended September 30, 2021, compared to $2.4 billion for the nine
months ended September 30, 2020, an increase of 45.5%. Along with
the impact of the merger, the increase reflects broad-based growth
in our utility business and continued strong demand in our
broadband business. Operating profit was $289.9 million for the
first nine months of 2021, compared to $167.7 million for the first
nine months of 2020, an increase of $122.2 million. Operating
profit for the first nine months of 2021 The increase primarily
reflects the factors impacting the overall business, as described
above, combined with the benefit from the net gain on the Canadian
divestitures. Accelerated amortization expense of $0.7 million
associated with migrating to the Company's master brand
architecture negatively impacted operating profit in the current
year. EBITDA, adjusted for other non-operating expenses, non-cash
stock-based compensation and net gain on the Canadian divestitures,
was $299.0 million for the first nine months of 2021, or 8.4% of
net sales, compared to $187.8 million for the first nine months of
2020, or 7.7% of net sales.
Webcast and
Teleconference Access
WESCO will conduct a webcast and teleconference to discuss the
third quarter of 2021 earnings as described in this News Release on
Thursday, November 4, 2021, 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
www.wesco.investorroom.com. The call will be archived on this
internet site for seven days.
WESCO International, Inc. (NYSE: WCC) builds, connects, powers
and protects the world. A publicly traded FORTUNE 500® company
headquartered in Pittsburgh, Pennsylvania, WESCO is a leading
provider of business-to-business distribution, logistics services
and supply chain solutions. Pro forma 2020 annual sales were over
$16 billion, including Anixter International Inc., which it
acquired in June 2020. 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 nearly 18,000 people, maintains
relationships with approximately 30,000 suppliers, and serves more
than 125,000 customers worldwide. With nearly 1,500,000 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, government
agencies, institutions, telecommunications providers, and
utilities. WESCO operates approximately 800 branches, warehouses
and sales offices in more than 50 countries, providing a local
presence for customers and a global network to serve multi-location
businesses and multi-national 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
the expected benefits and costs of the transaction between WESCO
and Anixter International Inc., including anticipated future
financial and operating results, synergies, accretion and growth
rates, and the combined company's plans, objectives, expectations
and intentions, statements that address the combined company's
expected future business and financial performance, and other
statements identified by words such as "anticipate," "plan,"
"believe," "estimate," "intend," "expect," "project," "will" and
similar words, phrases or expressions. 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.
Those risks, uncertainties and assumptions include the risk of
any unexpected costs or expenses resulting from the transaction,
the risk of any litigation or post-closing regulatory action
relating to the transaction, the risk that the transaction could
have an adverse effect on the ability of the combined company to
retain customers and retain and hire key personnel and maintain
relationships with its suppliers, customers and other business
relationships and on its operating results and business generally,
or the risk that problems may arise in successfully integrating the
businesses of the companies, which may result in the combined
company not operating as effectively and efficiently as expected,
the risk that the combined company may be unable to achieve
synergies or other anticipated benefits of the transaction or it
may take longer than expected to achieve those synergies or
benefits, the risk that the leverage of the company may be higher
than anticipated, the impact of natural disasters, health epidemics
and other outbreaks, especially the outbreak of COVID-19 since
December 2019, which may have a material adverse effect on the
combined company's business, results of operations and financial
conditions, and other important factors that could cause actual
results to differ materially from those projected. All such factors
are difficult to predict and are beyond each company's control.
Additional factors that could cause results to differ materially
from those described above can be found in WESCO's Annual Report on
Form 10-K for the fiscal year ended December 31, 2020 and WESCO's
other reports filed with the U.S. Securities and Exchange
Commission ("SEC").
WESCO INTERNATIONAL,
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF INCOME
(dollar amounts in thousands,
except per share amounts)
(Unaudited)
Three Months Ended
September 30, 2021
September 30, 2020
Net sales
$
4,728,325
$
4,141,801
Cost of goods sold (excluding depreciation
and amortization)
3,720,332
78.7
%
3,356,259
81.0
%
Selling, general and administrative
expenses
721,795
15.3
%
561,971
13.6
%
Depreciation and amortization
56,732
45,476
Income from operations
229,466
4.9
%
178,095
4.3
%
Interest expense, net
69,720
74,540
Other income, net
(5,320
)
(777
)
Income before income taxes
165,066
3.5
%
104,332
2.5
%
Provision for income taxes
44,870
24,294
Net income
120,196
2.5
%
80,038
1.9
%
Net income (loss) attributable to
noncontrolling interests
600
(640
)
Net income attributable to WESCO
International, Inc.
119,596
2.5
%
80,678
1.9
%
Preferred stock dividends
14,352
14,511
Net income attributable to common
stockholders
$
105,244
2.2
%
$
66,167
1.6
%
Earnings per diluted share attributable to
common stockholders
$
2.02
$
1.31
Weighted-average common shares outstanding
and common share equivalents used in computing earnings per diluted
common share (in thousands)
52,063
50,487
Reportable Segments
Net sales:
Electrical & Electronic Solutions
$
1,982,485
$
1,653,726
Communications & Security
Solutions
1,488,689
1,388,791
Utility & Broadband Solutions
1,257,151
1,099,284
$
4,728,325
$
4,141,801
Income from operations:
Electrical & Electronic Solutions
$
155,210
$
105,508
Communications & Security
Solutions
108,226
89,634
Utility & Broadband Solutions
108,172
74,092
Corporate
(142,142
)
(91,139
)
$
229,466
$
178,095
WESCO INTERNATIONAL,
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF INCOME
(dollar amounts in thousands,
except per share amounts)
(Unaudited)
Nine Months Ended
September 30, 2021
September 30, 2020
Net sales
$
13,365,592
$
8,197,154
Cost of goods sold (excluding depreciation
and amortization)
10,581,406
79.2
%
6,641,438
81.0
%
Selling, general and administrative
expenses
2,057,952
15.4
%
1,221,114
14.9
%
Depreciation and amortization
144,645
80,324
Income from operations
581,589
4.4
%
254,278
3.1
%
Interest expense, net
207,683
152,281
Other income, net
(8,929
)
(1,463
)
Income before income taxes
382,835
2.9
%
103,460
1.3
%
Provision for income taxes
84,201
23,707
Net income
298,634
2.2
%
79,753
1.0
%
Net income (loss) attributable to
noncontrolling interests
665
(825
)
Net income attributable to WESCO
International, Inc.
297,969
2.2
%
80,578
1.0
%
Preferred stock dividends
43,056
15,787
Net income attributable to common
stockholders
$
254,913
1.9
%
$
64,791
0.8
%
Earnings per diluted share attributable to
common stockholders
$
4.91
$
1.44
Weighted-average common shares outstanding
and common share equivalents used in computing earnings per diluted
common share (in thousands)
51,896
45,104
Reportable Segments
Net sales:
Electrical & Electronic Solutions
$
5,626,309
$
3,811,498
Communications & Security
Solutions
4,200,424
1,953,967
Utility & Broadband Solutions
3,538,859
2,431,689
$
13,365,592
$
8,197,154
Income from operations:
Electrical & Electronic Solutions
$
409,062
$
194,643
Communications & Security
Solutions
293,446
127,502
Utility & Broadband Solutions
289,895
167,651
Corporate
(410,814
)
(235,518
)
$
581,589
$
254,278
WESCO INTERNATIONAL,
INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(dollar amounts in thousands)
(Unaudited)
September 30,
2021
December 31,
2020
Assets
Current Assets
Cash and cash equivalents
$
251,799
$
449,135
Trade accounts receivable, net
2,955,632
2,466,903
Inventories
2,569,798
2,163,831
Other current assets
438,267
427,109
Total current assets
6,215,496
5,506,978
Goodwill and intangible assets
5,179,529
5,252,664
Other assets
1,085,993
1,120,572
Total assets
$
12,481,018
$
11,880,214
Liabilities and Stockholders'
Equity
Current Liabilities
Accounts payable
$
2,246,454
$
1,707,329
Short-term debt and current portion of
long-term debt, net(1)
19,292
528,830
Other current liabilities
872,353
750,836
Total current liabilities
3,138,099
2,986,995
Long-term debt, net
4,565,772
4,369,953
Other noncurrent liabilities
1,195,330
1,186,877
Total liabilities
8,899,201
8,543,825
Stockholders' Equity
Total stockholders' equity
3,581,817
3,336,389
Total liabilities and stockholders'
equity
$
12,481,018
$
11,880,214
(1)
As of December 31, 2020, short-term debt
and current portion of long-term debt includes the $500.0 million
aggregate principal amount of the Company's 5.375% Senior Notes due
2021 (the "2021 Notes"), which were redeemed on January 14,
2021.
WESCO INTERNATIONAL,
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(dollar amounts in thousands)
(Unaudited)
Nine Months Ended
September 30,
2021
September 30,
2020
Operating Activities:
Net income
$
298,634
$
79,753
Add back (deduct):
Depreciation and amortization
144,645
80,324
Deferred income taxes
(5,340
)
(8,261
)
Change in trade receivables, net
(521,491
)
3,584
Change in inventories
(428,405
)
77,681
Change in accounts payable
550,858
80,489
Other, net
133,769
105,368
Net cash provided by operating
activities
172,670
418,938
Investing Activities:
Capital expenditures
(25,170
)
(42,562
)
Other, net(1)
61,776
(3,681,335
)
Net cash provided by (used in) investing
activities
36,606
(3,723,897
)
Financing Activities:
Debt (repayments) borrowings, net(2)
(330,341
)
3,606,339
Equity activity, net
(20,784
)
(2,032
)
Other, net(3)
(59,079
)
(96,987
)
Net cash (used in) provided by financing
activities
(410,204
)
3,507,320
Effect of exchange rate changes on cash
and cash equivalents
3,592
(1,014
)
Net change in cash and cash
equivalents
(197,336
)
201,347
Cash and cash equivalents at the beginning
of the period
449,135
150,902
Cash and cash equivalents at the end of
the period
$
251,799
$
352,249
(1)
For the nine months ended September 30,
2021, other investing activities includes cash consideration
totaling approximately $56.0 million from the sale of WESCO's
legacy utility and data communications businesses in Canada. The
Company used the net proceeds from the divestitures to repay
indebtedness. Other investing activities for the nine months ended
September 30, 2020 includes payments to acquire Anixter of $3,707.6
million, net of cash acquired of $103.5 million.
(2)
The nine months ended September 30, 2021
includes the redemption of the Company's $500.0 million aggregate
principal amount of 2021 Notes and $354.7 million aggregate
principal amount of its 5.375% Senior Notes due 2024 (the "2024
Notes"). The redemptions of the 2021 Notes and 2024 Notes were
funded with excess cash, as well as borrowings under the Company's
accounts receivable securitization and revolving credit facilities.
The nine months ended September 30, 2020 primarily includes the net
proceeds from the issuance of senior unsecured notes of $2,815.0
million, as well as borrowings under the Company's accounts
receivable securitization and revolving credit facilities. These
cash inflows were used to fund the merger with Anixter.
(3)
For the nine months ended September 30,
2021, other financing activities includes $43.1 million of
dividends paid to holders of Series A preferred stock. Other
financing activities for the nine months ended September 30, 2020
includes approximately $79.9 million of costs associated with the
debt financing used to fund a portion of the merger with Anixter,
as well as $15.8 million of dividends paid to holders of Series A
preferred stock.
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, adjusted gross profit, gross margin, adjusted gross margin,
earnings before interest, taxes, depreciation and amortization
(EBITDA), adjusted EBITDA, adjusted EBITDA margin, financial
leverage, free cash flow, adjusted income from operations, adjusted
operating margin, 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 sales performance, and the use of debt and
liquidity on a comparable basis. Additionally, certain non-GAAP
measures either focus on or exclude items impacting comparability
of results such as merger-related costs, and the related income tax
effect of such items, 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
(dollar amounts in thousands,
except per share data)
(Unaudited)
Organic Sales Growth by
Segment:
Three Months Ended
Growth/(Decline)
September 30, 2021
September 30, 2020
Reported
Divestiture Impact
Foreign Exchange
Impact
Organic Growth
EES
$
1,982,485
$
1,653,726
19.9
%
(1.1
)%
2.0
%
19.0
%
CSS
1,488,689
1,388,791
7.2
%
—
%
1.0
%
6.2
%
UBS
1,257,151
1,099,284
14.4
%
(1.3
)%
0.9
%
14.8
%
Total net sales
$
4,728,325
$
4,141,801
14.2
%
(0.8
)%
1.4
%
13.6
%
Organic Sales Growth by Segment -
Sequential:
Three Months Ended
Growth/(Decline)
September 30, 2021
June 30, 2021
Reported
Foreign Exchange
Impact
Organic Growth
EES
$
1,982,485
$
1,923,011
3.1
%
(0.6)
%
3.7
%
CSS
1,488,689
1,461,120
1.9
%
(0.6)
%
2.5
%
UBS
1,257,151
1,211,659
3.8
%
(0.2)
%
4.0
%
Total net sales
$
4,728,325
$
4,595,790
2.9
%
(0.5)
%
3.4
%
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,
foreign exchange rates and number of workdays from the overall
percentage change in consolidated net sales.
Three Months Ended
Nine Months Ended
Gross Profit:
September 30, 2021
September 30, 2020
September 30, 2021
September 30, 2020
Net sales
$
4,728,325
$
4,141,801
$
13,365,592
$
8,197,154
Cost of goods sold (excluding depreciation
and amortization)
3,720,332
3,356,259
10,581,406
6,641,438
Gross profit
$
1,007,993
$
785,542
$
2,784,186
$
1,555,716
Adjusted gross profit(1)
$
1,007,993
$
813,561
$
2,784,186
$
1,583,735
Gross margin
21.3
%
19.0
%
20.8
%
19.0
%
Adjusted gross margin(1)
21.3
%
19.6
%
20.8
%
19.3
%
(1)
Adjusted gross profit and adjusted gross
margin exclude the effect of merger-related fair value adjustments
to inventory of $28.0 million for the three and nine months ended
September 30, 2020.
Three Months Ended
Gross Profit:
June 30, 2021
Net sales
$
4,595,790
Cost of goods sold (excluding depreciation
and amortization)
3,630,633
Gross profit
$
965,157
Gross margin
21.0
%
WESCO INTERNATIONAL,
INC.
RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES
(dollar amounts in thousands,
except per share data)
(Unaudited)
Note: Gross profit is a financial measure commonly used within 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.
Three Months Ended
Nine Months Ended
Adjusted Income from
Operations:
September 30, 2021
September 30, 2020
September 30, 2021
September 30, 2020
Income from operations
$
229,466
$
178,095
$
581,589
$
254,278
Merger-related costs
35,750
14,175
119,792
92,127
Accelerated trademark amortization
15,147
—
20,196
—
Merger-related fair value adjustments
—
28,019
—
28,019
Net gain on sale of assets and
divestitures
—
(19,816
)
(8,927
)
(19,816
)
Adjusted income from operations
$
280,363
$
200,473
$
712,650
$
354,608
Adjusted income from operations margin
%
5.9
%
4.8
%
5.3
%
4.3
%
Three Months Ended
Nine Months Ended
Adjusted Provision for Income
Taxes:
September 30, 2021
September 30, 2020
September 30, 2021
September 30, 2020
Provision for income taxes
$
44,870
$
24,294
$
84,201
$
23,707
Income tax effect of adjustments to income
from operations(1)
13,512
4,923
32,968
22,073
Adjusted provision for income taxes
$
58,382
$
29,217
$
117,169
$
45,780
(1)
The adjustments to income from operations
have been tax effected at rates of approximately 27% and 25% for
the three and nine months ended September 30, 2021, respectively,
and 22% for the three and nine months ended September 30, 2020.
Three Months Ended
Nine Months Ended
Adjusted Earnings per Diluted
Share:
September 30, 2021
September 30, 2020
September 30, 2021
September 30, 2020
Adjusted income from operations
$
280,363
$
200,473
$
712,650
$
354,608
Interest expense, net
69,720
74,540
207,683
152,281
Other income, net
(5,320
)
(777
)
(8,929
)
(1,463
)
Adjusted income before income taxes
215,963
126,710
513,896
203,790
Adjusted provision for income taxes
58,382
29,217
117,169
45,780
Adjusted net income
157,581
97,493
396,727
158,010
Net income (loss) attributable to
noncontrolling interests
600
(640
)
665
(825
)
Adjusted net income attributable to WESCO
International, Inc.
156,981
98,133
396,062
158,835
Preferred stock dividends
14,352
14,511
43,056
15,787
Adjusted net income attributable to common
stockholders
$
142,629
$
83,622
$
353,006
$
143,048
Diluted shares
52,063
50,487
51,896
45,104
Adjusted earnings per diluted share
$
2.74
$
1.66
$
6.80
$
3.17
Note: For the three and nine months ended
September 30, 2021, income from operations, the provision for
income taxes and earnings per diluted share have been adjusted to
exclude merger-related costs, a net gain on the sale of WESCO's
legacy utility and data communications businesses in Canada,
accelerated amortization expense associated with migrating to the
Company's master brand architecture, and the related income tax
effects. For the three and nine months ended September 30, 2020,
income from operations, the provision for income taxes and earnings
per diluted share have been adjusted to exclude merger-related
costs and fair value adjustments, gain on sale of an operating
branch in the U.S., and the related income tax effects. These
non-GAAP financial measures provide a better understanding of the
Company's financial results on a comparable basis.
WESCO INTERNATIONAL,
INC.
RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES
(dollar amounts in thousands,
except per share data)
(Unaudited)
Three Months Ended September
30, 2021
EBITDA and Adjusted EBITDA by
Segment:
EES
CSS
UBS
Corporate
Total
Net income attributable to common
stockholders
.
$
155,627
.
$
107,898
.
$
108,150
.
$
(266,431
)
.
$
105,244
Net income attributable to noncontrolling
interests
309
—
—
291
600
Preferred stock dividends
—
—
—
14,352
14,352
Provision for income taxes
—
—
—
44,870
44,870
Interest expense, net
—
—
—
69,720
69,720
Depreciation and amortization
16,840
24,723
5,869
9,300
56,732
EBITDA
$
172,776
$
132,621
$
114,019
$
(127,898
)
$
291,518
Other (income) expense, net
(726
)
328
22
(4,944
)
(5,320
)
Stock-based compensation expense(1)
1,848
752
633
5,079
8,312
Merger-related costs
—
—
—
35,750
35,750
Adjusted EBITDA
$
173,898
$
133,701
$
114,674
$
(92,013
)
$
330,260
Adjusted EBITDA margin %
8.8
%
9.0
%
9.1
%
7.0
%
(1) Stock-based compensation expense in
the calculation of adjusted EBITDA for the three months ended
September 30, 2021 excludes $1.3 million as such amount is included
in merger-related costs.
Three Months Ended September
30, 2020
EBITDA and Adjusted EBITDA by
Segment:
EES
CSS
UBS
Corporate
Total
Net income attributable to common
stockholders
$
107,192
$
90,585
$
73,924
$
(205,534
)
$
66,167
Net loss attributable to noncontrolling
interests
(270
)
—
—
(370
)
(640
)
Preferred stock dividends
—
—
—
14,511
14,511
Provision for income taxes
—
—
—
24,294
24,294
Interest expense, net
—
—
—
74,540
74,540
Depreciation and amortization
10,411
18,536
7,550
8,979
45,476
EBITDA
$
117,333
$
109,121
$
81,474
$
(83,580
)
$
224,348
Other (income) expense, net
(1,414
)
(951
)
168
1,420
(777
)
Stock-based compensation expense(2)
1,146
711
441
3,704
6,002
Merger-related costs
—
—
—
14,175
14,175
Merger-related fair value adjustments
11,695
12,344
3,980
—
28,019
Gain on sale of assets
(19,816
)
—
—
—
(19,816
)
Adjusted EBITDA
$
108,944
$
121,225
$
86,063
$
(64,281
)
$
251,951
Adjusted EBITDA margin %
6.6
%
8.7
%
7.8
%
6.1
%
(2) Stock-based compensation by reportable
segment for the three months ended September 30, 2020, as
previously reported in a press release issued on November 5, 2020,
has been reallocated to conform to the current period
presentation.
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. EBITDA is defined as earnings before
interest, taxes, depreciation and amortization. Adjusted EBITDA is
defined as EBITDA before foreign exchange and other non-operating
expenses (income), non-cash stock-based compensation, costs and
fair value adjustments associated with the merger with Anixter, and
gain on sale of an operating branch in the U.S. Adjusted EBITDA
margin % is calculated by dividing Adjusted EBITDA by net
sales.
WESCO INTERNATIONAL,
INC.
RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES
(dollar amounts in thousands,
except per share data)
(Unaudited)
Nine Months Ended September
30, 2021
EBITDA and Adjusted EBITDA by
Segment:
EES
CSS
UBS
Corporate
Total
Net income attributable to common
stockholders
$
410,233
$
292,537
$
289,851
$
(737,708
)
$
254,913
Net income attributable to noncontrolling
interests
158
—
—
507
665
Preferred stock dividends
—
—
—
43,056
43,056
Provision for income taxes
—
—
—
84,201
84,201
Interest expense, net
—
—
—
207,683
207,683
Depreciation and amortization
40,184
60,257
16,545
27,659
144,645
EBITDA
$
450,575
$
352,794
$
306,396
$
(374,602
)
$
735,163
Other (income) expense, net
(1,329
)
909
44
(8,553
)
(8,929
)
Stock-based compensation expense(1)
4,648
1,818
1,517
10,972
18,955
Merger-related costs
—
—
—
119,792
119,792
Net gain on Canadian divestitures
—
—
(8,927
)
—
(8,927
)
Adjusted EBITDA
$
453,894
$
355,521
$
299,030
$
(252,391
)
$
856,054
Adjusted EBITDA margin %
8.1
%
8.5
%
8.4
%
6.4
%
(1) Stock-based compensation expense in
the calculation of adjusted EBITDA for the nine months ended
September 30, 2021 excludes $3.8 million as such amount is included
in merger-related costs.
Nine Months Ended September
30, 2020
EBITDA and Adjusted EBITDA by
Segment:
EES
CSS
UBS
Corporate
Total
Net income attributable to common
stockholders
$
196,665
$
128,295
$
167,483
$
(427,652
)
$
64,791
Net loss attributable to noncontrolling
interests
(664
)
—
—
(161
)
(825
)
Preferred stock dividends
—
—
—
15,787
15,787
Provision for income taxes
—
—
—
23,707
23,707
Interest expense, net
—
—
—
152,281
152,281
Depreciation and amortization
24,638
24,393
15,153
16,140
80,324
EBITDA
$
220,639
$
152,688
$
182,636
$
(219,898
)
$
336,065
Other (income) expense, net
(1,358
)
(793
)
168
520
(1,463
)
Stock-based compensation expense(2)
3,343
1,130
1,040
10,016
15,529
Merger-related costs
—
—
—
92,127
92,127
Merger-related fair value adjustments
11,695
12,344
3,980
—
28,019
Gain on sale of assets
(19,816
)
—
—
—
(19,816
)
Adjusted EBITDA
$
214,503
$
165,369
$
187,824
$
(117,235
)
$
450,461
Adjusted EBITDA margin %
5.6
%
8.5
%
7.7
%
5.5
%
(2) Stock-based compensation expense by
reportable segment for the nine months ended September 30, 2020, as
previously reported in a press release issued on November 5, 2020,
has been reallocated to conform to the current period
presentation.
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. EBITDA is defined as earnings before
interest, taxes, depreciation and amortization. Adjusted EBITDA is
defined as EBITDA before foreign exchange and other non-operating
expenses (income), non-cash stock-based compensation, costs and
fair value adjustments associated with the merger with Anixter, and
net gains on the divestiture of WESCO's legacy utility and data
communications businesses in Canada and sale of an operating branch
in the U.S. Adjusted EBITDA margin % is calculated by dividing
Adjusted EBITDA by net sales.
WESCO INTERNATIONAL,
INC.
RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES
(dollar amounts in thousands,
except per share data)
(Unaudited)
Twelve Months Ended
Financial Leverage:
September 30,
2021
December 31, 2020
Reported
Proforma(1)
Net income attributable to common
stockholders
$
260,544
$
115,572
Net income (loss) attributable to
noncontrolling interests
969
(521
)
Preferred stock dividends
57,408
30,139
Provision for income taxes
83,298
55,659
Interest expense, net
281,993
255,842
Depreciation and amortization
185,921
153,499
EBITDA
870,133
610,190
Other (income) expense, net
(9,860
)
4,635
Stock-based compensation
21,675
34,733
Merger-related costs and fair value
adjustments
175,574
206,748
Out-of-period adjustment
18,852
18,852
Net gain on sale of assets and Canadian
divestitures
(8,927
)
(19,816
)
Adjusted EBITDA(2)
$
1,067,447
$
855,342
As of
September 30,
2021
December 31,
2020
Short-term debt and current portion of
long-term debt, net
$
19,292
$
528,830
Long-term debt, net
4,565,772
4,369,953
Debt discount and debt issuance
costs(3)
74,222
88,181
Fair value adjustments to Anixter Senior
Notes due 2023 and 2025(3)
(1,132
)
(1,650
)
Total debt
4,658,154
4,985,314
Less: cash and cash equivalents
251,799
449,135
Total debt, net of cash
$
4,406,355
$
4,536,179
Financial leverage ratio
4.1
5.3
(1)
EBITDA and adjusted EBITDA for the twelve
months ended December 31, 2020 gives effect to the combination of
WESCO and Anixter as if it had occurred at the beginning of the
respective trailing twelve month period.
(2)
Adjusted EBITDA includes the financial
results of WESCO's legacy utility and data communications
businesses in Canada, which were divested in the first quarter of
2021 under a Consent Agreement with the Competition Bureau of
Canada.
(3)
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 measures 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 foreign exchange and other
non-operating expenses (income), non-cash stock-based compensation,
costs and fair value adjustments associated with the merger with
Anixter, an out-of-period adjustment related to inventory
absorption accounting, and net gains on the divestiture of WESCO's
legacy utility and data communications businesses in Canada and
sale of an operating branch in the U.S.
WESCO INTERNATIONAL,
INC.
RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES
(dollar amounts in thousands,
except per share data)
(Unaudited)
Three Months Ended
Nine Months Ended
Free Cash Flow:
September 30, 2021
September 30, 2020
September 30, 2021
September 30, 2020
.
.
.
Cash flow provided by operations
$
69,875
$
286,250
$
172,670
$
418,938
Less: Capital expenditures
(4,979
)
(15,399
)
(25,170
)
(42,562
)
Add: Merger-related expenditures
20,109
36,591
61,676
85,674
Free cash flow
$
85,005
$
307,442
$
209,176
$
462,050
Percentage of adjusted net income
54
%
315
%
53
%
292
%
Note: Free cash flow is a 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 nine
months ended September 30, 2021 and 2020, the Company paid certain
fees, expenses and other costs related to WESCO's merger with
Anixter. Such expenditures have been added back to operating cash
flow to determine free cash flow for such periods.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211104005247/en/
Will Ruthrauff Director, Investor Relations and Corporate
Communications (412) 454-4220 http://www.wesco.com
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