WESCO International, Inc. Reports Second Quarter 2011 Results
Second quarter results compared to the prior year:
– Diluted EPS of $1.00 per share, up 67% from $0.60 per share
– Net income of $50.2 million, up 81% from $27.8 million
– Operating margin of 5.6%, up 150 basis points from 4.1%
– Consolidated sales of $1.52 billion increased 21% from $1.26 billion
PITTSBURGH, July 21, 2011 /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 2011 second quarter financial results.
The following results are for the three months ended June 30, 2011 compared to the three months ended June 30, 2010:
- Consolidated net sales were $1,524.5 million for the second quarter of 2011, compared to $1,259.1 million for the second quarter of 2010. The 21.1% increase in sales includes a 7.4% positive impact from acquisitions and a 1.0% positive impact from foreign exchange rates, resulting in organic sales growth of 12.7%. Sequential sales increased 6.5%. Our sequential increase includes a 0.9% positive impact from acquisitions and a 0.4% positive impact from foreign exchange. Sales per workday increased 4.9% in the second quarter of 2011 compared to the first quarter.
- Gross profit of $306.8 million, or 20.1% of sales, for the second quarter of 2011 was up 80 basis points, compared to $242.9 million, or 19.3% of sales, for the second quarter of 2010.
- Selling, general & administrative (SG&A) expenses of $214.2 million, or 14.1% of sales, for the second quarter of 2011 improved 70 basis points, compared to $186.0 million, or 14.8% of sales, for the second quarter of 2010.
- Operating profit was $85.0 million for the current quarter, up 65.7% from $51.3 million for the comparable 2010 quarter. Operating profit as a percentage of sales was 5.6% in 2011, up 150 basis points from 4.1% in 2010.
- Total interest expense for the second quarter of 2011 was $13.9 million, compared to $14.4 million for the second quarter of 2010. Non-cash interest expense for the second quarter of 2011 and 2010 was $1.8 million and $1.0 million, respectively.
- The effective tax rate for the current quarter was 29.4%, compared to 28.2% for the prior year quarter.
- Net income of $50.2 million for the current quarter was up 80.6% from $27.8 million for the prior year quarter.
- Diluted earnings per share for the second quarter of 2011 was $1.00 per share, based on 50.3 million diluted shares, up 66.7% from $0.60 per share in the second quarter of 2010, based on 46.0 million diluted shares. The three acquisitions made over the past twelve months, Potelcom in June 2010, TVC Communications in December 2010 and RECO in March 2011, had a favorable impact of approximately $0.10 per diluted share on second quarter results.
- Free cash flow for the second quarter of 2011 was a use of $19.6 million, compared to a use of $3.7 million for the second quarter of 2010.
Mr. John J. Engel, WESCO’s Chief Executive Officer, stated, “Our second quarter results were excellent, reflecting effective execution of our sales growth and margin expansion initiatives. We have now posted four consecutive quarters of double digit organic sales growth and have built a strong backlog, which is up over 20% versus last year. Operating margins improved 150 basis points to 5.6% in the second quarter, driven by an effective combination of gross margin expansion and operating cost leverage. The three acquisitions that we made over the last year are also exceeding expectations and have strengthened our business. Overall, our growth strategy is on track and we are very pleased with the good momentum and the improving profitability of our business.”