PITTSBURGH, Oct. 24, 2013 /PRNewswire/ -- WESCO International, Inc. (NYSE: WCC), a leading provider of electrical, industrial, and communications MRO and OEM products, construction materials, and advanced supply chain management and logistics services, today announced its 2013 third quarter results.

The following are results for the three months ended September 30, 2013 compared to the three months ended September 30, 2012:


    --  Net sales were $1,931.3 million for the third quarter of 2013, compared
        to $1,656.2 million for the third quarter of 2012, an increase of 16.6%.
        Acquisitions positively impacted sales by 14.1%, organic sales increased
        3.2%, and foreign exchange negatively impacted sales by 0.7%.  Adjusting
        for the impact of one additional workday in the quarter, normalized
        organic sales increased 1.6%.  Sequentially, sales increased 2.0%, and
        organic sales increased 2.3%.
    --  Gross profit of $395.7 million, or 20.5% of sales, for the third quarter
        of 2013, compared to $338.8 million, or 20.5% of sales, for the third
        quarter of 2012.
    --  Selling, general & administrative (SG&A) expenses of $255.2 million, or
        13.2% of sales, for the third quarter of 2013 improved 40 basis points,
        compared to $225.8 million, or 13.6% of sales, for the third quarter of
        2012.  Excluding acquisitions, SG&A was unchanged from the prior year.
    --  Operating profit was $123.7 million for the current quarter, up 20.0%
        from $103.1 million for the comparable 2012 quarter.  Operating profit
        as a percentage of sales was 6.4% in 2013, up 20 basis points from 6.2%
        in 2012.
    --  Interest expense for the third quarter of 2013 was $21.3 million,
        compared to $12.7 million for the third quarter of 2012.  Interest
        expense increased for the quarter due to the increase in indebtedness in
        late 2012 associated primarily with the EECOL acquisition. Non-cash
        interest expense, which includes convertible debt interest, interest
        related to uncertain tax positions, and the amortization of deferred
        financing fees, for the third quarter of 2013 and 2012 was $2.3 million
        and $1.3 million, respectively.
    --  Net income attributable to WESCO International, Inc. of $69.2 million
        for current quarter was up 9.1% from $63.4 million for the prior year
        quarter.  Excluding the impact of the sale of the Company's EECOL
        Electric Argentina operations and the tax impact of the ArcelorMittal
        litigation recovery, net income attributable to WESCO International,
        Inc. was $74.7 million for the current quarter, up 17.8% from the prior
        year quarter.
    --  The effective tax rate for the current quarter was 31.0%, compared to
        29.9% for the prior year third quarter.  Excluding the impact of
        non-recurring items, the effective tax rate for the current quarter was
        27.2%.
    --  Earnings per diluted share for the third quarter of 2013 were $1.32 per
        share, based on 52.5 million diluted shares, and were up 5.6% from $1.25
        per share in the third quarter of 2012, based on 50.8 million diluted
        shares.  Excluding the impact of non-recurring items, adjusted earnings
        per diluted share in the third quarter of 2013 were $1.42, compared to
        $1.25 in the corresponding prior year period and increased 13.6%.
    --  Free cash flow for the third quarter of 2013 was $72.3 million, or 104%
        of net income, compared to $67.2 million for the third quarter of 2012. 
        Excluding the impact of non-recurring items, free cash flow was 97% of
        adjusted net income for the third quarter of 2013.

Mr. John J. Engel, WESCO's Chairman and Chief Executive Officer, stated, "Our third quarter results reflect solid execution in a low growth economic environment with end market conditions that continue to be challenging. Organic sales increased approximately two percent versus prior year on a same workday basis, driven by growth in Data Communications and continued strength in Utility. Our acquisitions continue to perform well and we remain on track to deliver our full year EPS accretion expectations for EECOL. Free cash flow generation was also strong in the quarter and our financial leverage is now within our targeted range on a proforma basis. We expect organic sales growth in the fourth quarter at the low end of our prior expectations, and have revised our full year EPS outlook to approximately $5.00 to $5.20 per diluted share, which equates to 15% to 19% growth over prior year, excluding the ArcelorMittal litigation and EECOL Argentina divestiture impacts."

The following results are for the nine months ended September 30, 2013 compared to the nine months ended September 30, 2012.


    --  Net sales were $5,633.3 million for the first nine months of 2013,
        compared to $4,934.9 million for the first nine months of 2012, an
        increase of 14.2%.  Acquisitions positively impacted sales by 14.9%,
        organic sales decreased 0.4%, and foreign exchange negatively impacted
        sales by 0.3%.
    --  Gross profit of $1,169.3 million, or 20.8% of sales, for the first nine
        months of 2013 was up 70 basis points, compared to $994.1 million, or
        20.1% of sales, for the first nine months of 2012.
    --  SG&A expenses of $748.2 million, or 13.3% of sales, for the first nine
        months of 2013 decreased 60 basis points, compared to $685.1 million, or
        13.9% of sales, for the first nine months of 2012.  SG&A expenses for
        the first nine months of 2013 include a $36.1 million favorable impact
        resulting from the recognition of insurance coverage relating to a
        litigation-related charge recorded in the fourth quarter of 2012. 
        Excluding the impact of this favorable item, SG&A expenses were $784.3
        million, or 13.9% of sales, and excluding acquisitions, SG&A declined
        $3.5 million from the prior year.
    --  Operating profit was $370.4 million for the first nine months of 2013,
        up 31.1% from $282.6 million for the comparable 2012 period.  Operating
        profit as a percentage of sales was 6.6% in 2013, up 90 basis points
        from 5.7% in 2012.  Excluding the favorable impact resulting from the
        recognition of insurance coverage on a litigation matter, operating
        profit was $334.3 million, or 5.9% of sales.
    --  Interest expense for the first nine months of 2013 was $65.0 million,
        compared to $33.1 million for the first nine months of 2012.  Interest
        expense increased for the first nine months of 2013 due to the increase
        in indebtedness in late 2012 associated with the EECOL acquisition. 
        Non-cash interest expense, which includes convertible debt interest,
        interest related to uncertain tax positions, and the amortization of
        deferred financing fees, for the first nine months of 2013 and 2012 was
        $6.7 million and $0.8 million, respectively.
    --  Net income attributable to WESCO International, Inc. of $218.4 million
        for the first nine months of 2013 was up 24.6% from $175.3 million for
        the first nine months of 2012.  Excluding the impacts of the recognition
        of insurance coverage on a litigation matter and the loss on the sale of
        the Company's EECOL Electric Argentina operations, adjusted net income
        for the first nine months of 2013 was $197.1 million, compared to $175.3
        million in the first nine months of 2012, an increase of 12.4%.
    --  The effective nine-month tax rate was 27.9% for 2013 compared to 29.8%
        for 2012.  Excluding the impact of the non-recurring items, the
        effective tax rate for the current year was 26.8%.
    --  Earnings per diluted share for the first nine months of 2013 were up
        21.6% to $4.17 per share, based on 52.4 million diluted shares, versus
        $3.43 per share for the first nine months of 2012, based on 51.1 million
        diluted shares.  Excluding the impact of non-recurring items, adjusted
        earnings per diluted share in the first nine months of 2013 were $3.76,
        compared to $3.43 in the corresponding prior year period and increased
        9.6%.
    --  Free cash flow for the nine months of 2013 was $180.3 million, or 83% of
        net income, compared to $170.1 million in the comparable prior year
        period.  Excluding the impact of non-recurring items, free cash flow was
        91% of adjusted net income for the first nine months of 2013.

Mr. Engel continued, "As consolidation and outsourcing continues in our industry, customers are looking for a one-stop-shop to manage their global supply chain needs. Our One WESCO value proposition provides customers with the comprehensive product and service solutions they need to meet their MRO, OEM and Capital Project management requirements. We are encouraged with the accelerating momentum of our One WESCO initiatives, and are continuing to make investments in our people, our processes, and our business."

Webcast and Teleconference Access
WESCO will conduct a webcast and teleconference to discuss the third quarter earnings as described in this News Release on Thursday, October 24, 2013, at 11:00 a.m. E.D.T. The call will be broadcast live over the Internet and can be accessed from the Company's website at http://www.wesco.com. The call will be archived on this Internet site for seven days.

WESCO International, Inc. (NYSE: WCC), a publicly traded Fortune 500 holding company headquartered in Pittsburgh, Pennsylvania, is a leading provider of electrical, industrial, and communications maintenance, repair and operating ("MRO") and original equipment manufacturers ("OEM") product, construction materials, and advanced supply chain management and logistic services. 2012 annual sales were approximately $6.6 billion. The Company employs approximately 9,000 people, maintains relationships with over 18,000 suppliers, and serves over 65,000 active customers worldwide. Customers include commercial and industrial businesses, contractors, government agencies, institutions, telecommunications providers and utilities. WESCO operates nine fully automated distribution centers and approximately 475 full-service branches in North America and international markets, providing a local presence for customers and a global network to serve multi-location businesses and multi-national corporations.

The matters discussed herein may contain forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from expectations. Certain of these risks are set forth in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2012, as well as the Company's other reports filed with the Securities and Exchange Commission.

http://www.wesco.com


                                                                            WESCO INTERNATIONAL, INC.



                                                                   CONDENSED CONSOLIDATED STATEMENT OF INCOME
                                                             (dollar amounts in millions, except per share amounts)
                                                                                   (Unaudited)





                                                                                                                   Three Months               Three Months

                                                                                                                       Ended                      Ended



                                                                                                                   September 30,              September 30,

                                                                                                                            2013                             2012
                                                                                                                            ----                             ----

    Net sales                                                                                                                     $1,931.3                        $1,656.2

    Cost of goods sold (excluding                                                                                        1,535.6           79.5%          1,317.4           79.5%

    depreciation and amortization below)

    Selling, general and administrative expenses                                                                           255.2           13.2%            225.8           13.6%

    Depreciation and amortization                                                                                           16.8                             9.9
                                                                                                                            ----                             ---

    Income from operations                                                                                                 123.7            6.4%            103.1            6.2%

    Interest expense, net                                                                                                   21.3                            12.7

    Loss on sale of Argentina business                                                                                       2.3                              -
                                                                                                                             ---                            ---

    Income before income taxes                                                                                             100.1            5.2%             90.4            5.5%

    Provision for income taxes                                                                                              31.0                            27.0
                                                                                                                            ----                            ----

    Net income                                                                                                              69.1            3.6%             63.4            3.8%

    Less: Net loss attributable to noncontrolling interest                                                                  (0.1)                             -
                                                                                                                            ----                            ---

    Net income attributable to WESCO International, Inc.                                                                             $69.2  3.6%                      $63.4  3.8%
                                                                                                                                     =====                            =====


    Earnings per diluted common share                                                                                                $1.32                           $1.25

    Weighted average common shares outstanding and common

    share equivalents used in computing earnings per diluted

    share (in millions)                                                                                                     52.5                            50.8




                                                                            WESCO INTERNATIONAL, INC.



                                                                   CONDENSED CONSOLIDATED STATEMENT OF INCOME
                                                             (dollar amounts in millions, except per share amounts)
                                                                                   (Unaudited)



                                                                                                                   Nine Months               Nine Months

                                                                                                                      Ended                     Ended



                                                                                                                  September 30,             September 30,

                                                                                                                           2013                            2012
                                                                                                                           ----                            ----

    Net sales                                                                                                                   $5,633.3                        $4,934.9

    Cost of goods sold (excluding                                                                                       4,464.0          79.2%          3,940.8           79.9%

    depreciation and amortization below)

    Selling, general and administrative expenses                                                                          748.2          13.3%            685.1           13.9%

    Depreciation and amortization                                                                                          50.7                           26.4
                                                                                                                           ----                           ----

    Income from operations                                                                                                370.4           6.6%            282.6            5.7%

    Interest expense, net                                                                                                  65.0                           33.1

    Loss on sale of Argentina business                                                                                      2.3                             -
                                                                                                                            ---                           ---

    Income before income taxes                                                                                            303.1           5.4%            249.5            5.1%

    Provision for income taxes                                                                                             84.6                           74.2
                                                                                                                           ----                           ----

    Net income                                                                                                            218.5           3.9%            175.3            3.6%

    Less: Net income attributable to noncontrolling interest                                                                0.1                             -
                                                                                                                            ---                           ---

    Net income attributable to WESCO International, Inc.                                                                          $218.4  3.9%                     $175.3  3.6%
                                                                                                                                  ======                           ======


    Earnings per diluted common share                                                                                              $4.17                           $3.43

    Weighted average common shares outstanding and common

    share equivalents used in computing earnings per diluted

    share (in millions)                                                                                                    52.4                           51.1





                                 WESCO INTERNATIONAL, INC.



                            CONDENSED CONSOLIDATED BALANCE SHEET
                                (dollar amounts in millions)
                                        (Unaudited)



                                           September 30,               December 31,

                                                    2013                     2012
                                                    ----                     ----

                         Assets

    Current
     Assets

    Cash and
     cash
     equivalents                                                 $98.6                 $86.1

    Trade
     accounts
     receivable,
     net                                         1,116.0                  1,036.2

    Inventories,
     net                                           795.9                    794.0

    Current
     deferred
     income
     taxes                                          27.6                     42.1

    Other
     current
     assets                                        180.6                    143.4
                                                   -----                    -----

    Total
     current
     assets                                      2,218.7                  2,101.8

    Other assets                                 2,460.8                  2,527.8
                                                                          -------

    Total assets                                              $4,679.5              $4,629.6
                                                              ========              ========



                     Liabilities and
                   Stockholders' Equity

    Current
     Liabilities

    Accounts
     payable                                                    $754.0                $706.6

    Current debt
     and short-
     term
     borrowings                                     42.0                     39.8

    Other
     current
     liabilities                                   240.8                    261.6
                                                   -----                    -----

    Total
     current
     liabilities                                 1,036.8                  1,008.0


    Long-term
     debt                                        1,535.5                  1,695.4

    Other
     noncurrent
     liabilities                                   368.9                    372.5
                                                   -----                    -----

    Total
     liabilities                                 2,941.2                  3,075.9


     Stockholders'
     Equity

    Total
     stockholders'
     equity                                      1,738.3                  1,553.7
                                                 -------                  -------

    Total
     liabilities
     and
     stockholders'
     equity                                                   $4,679.5              $4,629.6
                                                              ========              ========





                             WESCO INTERNATIONAL, INC.



                   CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                            (dollar amounts in millions)
                                    (Unaudited)



                                  Nine Months                Nine Months

                                     Ended                     Ended



                                 September 30,               September 30,

                                          2013                      2012
                                          ----                      ----

    Operating Activities:

    Net income                                       $218.5                $175.3

    Add back (deduct):

    Depreciation and
     amortization                         50.7                      26.4

    Deferred income
     taxes                                36.5                      21.9

    Change in Trade
     Receivables, net                    (91.8)                    (60.6)

    Change in
     Inventories, net                    (11.7)                    (16.0)

    Change in Accounts
     Payable                              50.1                      38.5

    Other                                (72.6)                      4.1
                                         -----                       ---

    Net cash provided
     by operating
     activities                          179.7                     189.6


    Investing Activities:

    Capital
     expenditures                        (20.5)                    (19.5)

    Acquisition
     payments                                -                   (201.1)

    Other                                  9.3                       0.1
                                           ---                       ---

    Net cash used by
     investing
     activities                          (11.2)                  (220.5)


    Financing Activities:

    Debt proceeds
     (repayments)                       (148.9)                     66.8

    Equity activity,
     net                                  (2.7)                     (2.5)

    Other                                 (2.9)                     10.1
                                          ----                      ----

    Net cash used by
     financing
     activities                         (154.5)                     74.4


    Effect of exchange
     rate changes on
     cash and cash
     equivalents                          (1.5)                      0.2
                                          ----                       ---


    Net change in cash
     and cash
     equivalents                          12.5                      43.7

    Cash and cash
     equivalents at the
     beginning of the
     period                               86.1                      63.9

    Cash and cash
     equivalents at the
     end of the period                                $98.6                $107.6
                                                      =====                ======

NON-GAAP FINANCIAL MEASURES
This earnings release includes certain non-GAAP financial measures. These financial measures include financial leverage, free cash flow, gross profit, organic sales growth, adjusted net income, adjusted income from operations, and adjusted earnings per diluted share. The Company believes that these non-GAAP measures are useful to investors in order to provide a better understanding of the Company's capital structure position, liquidity, and organic growth trends on a comparable basis. Additionally, certain non-GAAP measures either focus on or exclude transactions of an unusual nature, 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
                                   (Unaudited)



                               Twelve Months               Twelve Months

                                   Ended                     Ended



    Financial
     Leverage:                 September 30,               December 31,

                                        2013                     2012
                                        ----                     ----

    (dollar amounts in millions)

    Income from
     operations                                    $420.7                  $332.9

    Add:
     ArcelorMittal
     litigation
     charge                                -                     36.1

    Depreciation and
     amortization                       61.8                     37.6
                                        ----                     ----

    Adjusted EBITDA                                $482.5                  $406.6
                                                   ======                  ======


                               September 30,               December 31,
                                        2013                     2012
                                        ----                     ----

    Current debt                                    $42.0                   $39.8

    Long-term debt                   1,535.5                  1,695.4

    Debt discount
     related to
     convertible
     debentures (1)                    180.3                    183.6

    Total debt
     including debt
     discount                                    $1,757.8                $1,918.8
                                                 ========                ========


    Financial
     leverage ratio                      3.6                      4.7

Note: Financial leverage is provided by the Company as an indicator of capital structure position. Financial leverage is calculated by dividing total debt, including debt discount, by Adjusted EBITDA. Adjusted EBITDA is defined as the trailing twelve months earnings before interest, taxes, depreciation and amortization, excluding the ArcelorMittal litigation charge.

((1))The convertible debentures are presented in the consolidated balance sheets in long-term debt net of the unamortized discount.


                                             Three Months         Three Months         Nine Months         Nine Months
                                                Ended                 Ended               Ended              Ended



    Free Cash Flow:                         September 30,        September 30,        September 30,        September 30,

                                                     2013                 2012               2013               2012
                                                     ----                 ----               ----               ----

    (dollar amounts in millions)

    Cash flow provided by operations                       $59.9                $74.4               $179.7               $189.6

    Less: Capital expenditures                       (8.7)                (7.2)             (20.5)             (19.5)

    Add: Non-recurring pension contribution          21.1                   -               21.1                 -

    Free cash flow                                         $72.3                $67.2               $180.3               $170.1
                                                           =====                =====               ======               ======

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. Free cash flow is available to provide a source of funds for any of the Company's financing needs. During the quarter ended September 30, 2013, a non-recurring contribution was made to fund the Canadian EECOL pension plan. This contribution was required pursuant to the terms of the share purchase agreement by which the Company acquired EECOL in 2012. EECOL sellers fully funded this contribution by way of a direct reduction in the purchase price at the date of acquisition. U.S. GAAP requires the contribution to be shown as a reduction of operating cash flow, however, it is added back to accurately reflect free cash flow.




                           WESCO INTERNATIONAL, INC.



                 RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
                                  (Unaudited)



                                   Three Months               Three Months

                                       Ended                      Ended



    Gross Profit:                 September 30,              September 30,

                                              2013                        2012
                                              ----                        ----

    (dollar amounts in millions)

    Net Sales                             $1,931.3                    $1,656.2

    Cost of goods sold
     (excluding depreciation
     and amortization)          1,535.6                      1,317.4
                                -------                      -------

    Gross profit                            $395.7                      $338.8
                                            ======                      ======

    Gross margin                   20.5%                       20.5%


                                   Nine Months                  Nine Months

                                      Ended                        Ended



    Gross Profit:                 September 30,                September 30,
                                              2013                        2012
                                              ----                        ----

    (dollar amounts in
     millions)

    Net Sales                             $5,633.3                    $4,934.9

    Cost of goods sold
     (excluding depreciation
     and amortization)          4,464.0                      3,940.8
                                -------                      -------

    Gross profit                          $1,169.3                      $994.1
                                          ========                      ======

    Gross margin                   20.8%                       20.1%

Note: Gross profit is provided by the Company as an additional financial measure. Gross profit is calculated by deducting cost of goods sold, excluding depreciation and amortization, from net sales. This amount represents a commonly used financial measure within the distribution industry. Gross margin is calculated by dividing gross profit by net sales.


                                Three Months                Nine Months

                                    Ended                      Ended



    Normalized Organic Sales
     Growth:                    September 30,              September 30,
                                         2013                      2013
                                         ----                      ----


    Change in net sales                  16.6%                     14.2%

    Impact from acquisitions             14.1%                     14.9%

    Impact from foreign
     exchange rates                     (0.7)%                    (0.3)%

    Impact from number of
     workdays                             1.6%                        -  %
                                          ---

    Normalized organic sales
     growth                               1.6%                    (0.4)%
                                          ===                     =====

Note: Organic sales growth is provided by the Company as an additional financial measure to provide a better understanding of the Company's sales growth trends. Organic sales growth is calculated by deducting the percentage impact on net sales from acquisitions, foreign exchange rates and number of workdays from the overall percentage change in consolidated net sales.


                                                                  Three Months          Three Months        Nine Months          Nine Months

                                                                      Ended                 Ended              Ended                Ended



    Adjusted Earnings per Share:                                  September 30,         September 30,       September 30,          September 30,
                                                                           2013                  2012              2013                 2012
                                                                           ----                  ----              ----                 ----

    (amounts in millions, except EPS)

    Income before income taxes                                                   $100.1               $90.4               $303.1                 $249.5

    Less: Recognition of insurance coverage for ArcelorMittal                 -                    -             (36.1)                  -

      litigation charge

    Add: Loss on sale of Argentina business                                 2.3                    -               2.3                   -
                                                                            ---                  ---               ---                 ---

    Adjusted income before income taxes                                   102.4                  90.4             269.3                249.5

    Provision for income taxes                                             27.8                  27.0              72.1                 74.2
                                                                           ----                  ----              ----                 ----

    Adjusted net income                                                    74.6                  63.4             197.2                175.3

    Less: Net (loss) income attributable to noncontrolling                 (0.1)                   -               0.1                   -

    interest


    Adjusted net income attributable to WESCO International, Inc.                 $74.7               $63.4               $197.1                 $175.3
                                                                                  =====               =====               ======                 ======


    Adjusted earnings per diluted common share                                    $1.42               $1.25                $3.76                  $3.43
                                                                                  =====               =====                =====                  =====


    Weighted average common shares outstanding and common                  52.5                  50.8              52.4                 51.1

      share equivalents used in computing earnings per diluted

      share


                                         Year
                                         Ended

    Adjusted income from operations:   December
                                          31,
                                           2012
                                           ----

    (amounts in millions, except
     EPS)

    Income from operations                         $332.9

    Add: ArcelorMittal litigation
     charge                                36.1

    Adjusted income from operations                $369.0
                                                   ======


    Adjusted net income attributable
     to WESCO International, Inc.:

    Net income attributable to WESCO
     International, Inc.                           $201.8

    Add: ArcelorMittal litigation
     charge, net of tax                    22.0
                                           ----

    Adjusted net income attributable
     to WESCO International, Inc.                  $223.8
                                                   ======


    Adjusted Diluted EPS:

    Diluted share count                    51.1

    Adjusted Diluted EPS                            $4.38

Note: Adjusted earnings per share is provided by the Company as an additional financial measure. Adjusted earnings per share is calculated by eliminating the impact of the reversal of ArcelorMittal litigation charge from Income before income taxes. The adjusted net income attributable to WESCO International, Inc. is divided by the weighted average common shares outstanding and common share equivalents.

SOURCE WESCO International, Inc.