Attached files
| file | filename |
|---|---|
| 8-K - 8-K - WESCO INTERNATIONAL INC | d8k.htm |
| EX-99.1 - EX-99.1 - WESCO INTERNATIONAL INC | dex991.htm |
 Supplemental Financial Data
Supplemental Financial Data
WESCO Second Quarter 2011
July 21, 2011
Exhibit 99.2 |
 2
Safe Harbor Statement
Note:
All statements made herein that are not historical facts should be considered as
“forward- looking
statements”
within
the
meaning
of
the
Private
Securities
Litigation
Act
of
1995.
Such
statements involve known and unknown risks, uncertainties and other factors that
may cause actual results to differ materially. Such risks, uncertainties and
other factors include, but are not limited
to,
debt
level,
changes
in
general
economic
conditions,
fluctuations
in
interest
rates,
increases in raw materials and labor costs, levels of competition and other factors
described in detail in Form 10-K for WESCO International, Inc. for the
year ended December 31, 2010 and any subsequent filings with the Securities
& Exchange Commission. Any numerical or other representations in this
presentation do not represent guidance by management and should not be
construed as such. |
 3
Second Quarter 2011 Results
Q2 Outlook Provided
Second Quarter 2011 Performance
Sales growth expected to be at or
above 21% year-over-year including
acquisitions
Sales growth of 21% versus prior
year; sales up 6.5% sequentially;
organic sales growth of 12.7% versus
prior year
Gross margin expected to be at or
above 19.6%
Gross margin of 20.1%, up 80 basis
points over prior year
Operating margin expected to be at
or above 4.8%
Operating margin of 5.6%, up 150
basis points versus prior year
Tax rate expected to be in the range
of 30%
Effective tax rate of 29.4% |
 4
Organic Sales Analysis Versus Prior Year
-----------------------
2010
-----------------------
2011
2011
Q1
Q2
Q3
Q4
Full Year
Q1
Q2
Consolidated Sales Growth
(2.6%)
8.6%
14.9%
17.6%
9.5%
24.6%
21.1%
F/X
(1.8%)
(1.9%)
(0.9%)
(0.7%)
(1.3%)
(1.1%)
(1.0%)
Acquisitions
0
0
(0.7%)
(1.1%)
(0.4%)
(7.0%)
(7.4%)
(4.4%)
6.7%
13.3%
15.8%
7.8%
16.5%
12.7%
1.5%
3.0%
2.5%
3.0%
2.5%
3.5%
3.0%
Organic Sales Growth
Management Estimated Price Impact |
 5
End Market
Q2 2011
vs.
Q2 2010
Q2 2011
vs.
Q1 2011
Comments
WESCO Core
13.7%
6.3%
Industrial
18.4%
4.9%
•
10
of
16
Global
Account
industry
verticals
grew
double
digits
in
the
first
half
•
Strong bidding activity continues; Global Accounts and Integrated Supply
opportunity pipeline
now $2.0+ billion
•
Macro indicators point to continued industrial expansion and future capital
expenditures Construction
12.7%
9.0%
•
Backlog up 21% over last year and up 16% sequentially since year-end
•
US construction sales up 12% over last year
•
Non-residential construction market appears to be stabilizing; recovery
expected to begin in the next 12
to 24 months Utility
6.1%
9.1%
•
Pricing environment remains challenging
•
Recovery in utility spending anticipated; driven by increasing power demand, high
voltage and alternative power projects
•
Utility distribution grid spending beginning to improve
Commercial,
Institutional,
Government (CIG)
3.4%
0.7%
•
Construction
and
CIG
sales
to
government
agencies
and
government
contractors
were
up
25%
•
Stimulus
programs
continue
–
Rural
Broadband
and
certain
DOE
projects
are
beneficiaries
•
$400+ million government and stimulus opportunity pipeline
Second Quarter 2011 End Market Comments
Core year-over-year and sequential quarterly sales
comparisons Note: YOY excludes Potelcom, TVC and
RECO results; sequential excludes RECO results •
Fourth consecutive quarter of year-over-year double digit organic sales
growth
•
5% sequential growth on a sales per workday basis
•
Sales for all six product categories grew double digits in the first half
|
 6
Key Financial Metrics
12/31/2010
6/30/2011
Liquidity
$338 million
$414 million
Full Year and First Half Free Cash
Flow
$112 million
$7 million
Financial Leverage
(Pro Forma including
TVC TTM EBITDA)
3.5x
2.9x
Financial Leverage
(Par Value Debt with
Reported EBITDA)
3.9x
3.1x
($Millions)
Outstanding at
December 31, 2010
Outstanding at
June 30, 2011
Debt
Maturity Schedule
AR Securitization
(V)
$370
$380
2013
Inventory Revolver
(V)
$0
$18
2013
Real Estate Mortgage
(F)
$39
$38
2013
2017 Bonds
(F)
$150
$150
2017
2029
Convertible
Bonds
(F)
$345
$345
2029 (No Put)
Other
(F)
$5
$5
N/A
Total Debt
$909
$936
Capital Structure
V= Variable Rate Debt
F= Fixed Rate Debt
1=
Asset-backed facilities total available plus invested
cash 1 |
 Quarterly Proforma Financial Leverage
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
Target leverage
is 2.0 to 3.5
7 |
 8
Number of Work Days by Quarter
Q1
Q2
Q3
Q4
FY
2010
63
64
64
64
255
2011
63
64
64
63
254 |
 9
Convertible Debt as of June 30, 2011
($ millions)
Year
2029
Bond
2011
$2.4
2012
$2.7
2013
$3.1
Convertible Debentures
(000s)
Maturity
Par Value
of Debt
Debt
Discount
Debt per
Balance
Sheet
2026
$
221
$
0
221
2029
$
345,000
$
(177,216)
$
167,784
Total
$
345,221
$
(177,216)
$
168,005
($3.7 with FIN 48)
(1)
(1) Year-to-date 2011 results include $1.3
million of
non-cash interest related to FIN 48 entries. GAAP vs. Non-GAAP
Debt Reconciliation
Non-Cash Interest Expense Schedule |
 10
Convertible Debt and SARs/Options EPS Dilution
Weighted Average Quarterly Share Count
Stock Price
Incremental Shares from
2029 Convertible Debt
(in millions)
Incremental Shares from
SARs/Option Awards
(in millions)
Total Diluted Share Count
(in millions)
$50.00
5.05
1.18
49.42
Q2 2011 Average ($56.12)
5.80
1.33
50.32
$60.00
6.20
1.41
50.80
$75.00
7.35
1.82
52.36
$100.00
8.50
2.21
53.90
2029 Convertible Debt Details
Conversion Price
$28.8656
Conversion Rate
34.6433
Underlying Shares
11,951,939
Footnotes:
2029 Convertible Debenture
1000/28.8656
$345 million/28.8656
(Underlying Shares x Avg. Quarterly Stock Price) minus $345 million
Avg. Quarterly Stock Price
Basic Share Count of 43.06 million shares
4
3
1
2
3
4
1
2 |
 11
Q3 Outlook
Category
Q3 2011 Expectations
Sales Growth
Total growth expected to be at or above 18% year-over-year and 2.5%
sequentially, assuming stable pricing and foreign exchange rates
Gross Margins
Expected to be at or above 19.8%, up 30 basis points versus prior year
Operating Margins
Expected to be at or above 5.4%
Effective Tax Rate
Expected
to
be
approximately
30%
-
32% |
 12
2011 Full Year Outlook
Category
2011 Expectations
(Revised April 21, 2011)
2011 Expectations
(Revised July 21, 2011)
Sales Growth
Expected to be at or above 17% including
acquisitions; Pricing and F/X rates
assumed consistent with Q1 levels
Expected to be at or above 19%
including acquisitions; Pricing and F/X
rates assumed consistent with first half
levels
Gross Margins
Expected to be at or above 19.7%
Expected to be at or above 19.9%
Operating Margins
Expected to be at or above 4.9%
Expected to be at or above 5.1%
Effective Tax Rate
Expected to be in the range of 29% to
30% levels
Expected to be in the range of
29% to 31%
Cash Flow
Expected to be at least 80% of net
income
No change |