WESCO International(US:WCC)2020-08-17 22:42Financial Performance - Net sales for the second quarter of 2020 were $2.1 billion, a decrease of 2.9% compared to $2.2 billion in the second quarter of 2019, with organic sales declining by 12.3%[147] - The merger with Anixter contributed positively to net sales by 10.3% during the second quarter of 2020[149] - Net loss for the second quarter of 2020 was $35.8 million, resulting in a loss per diluted share of $0.84, compared to net income of $63.5 million and earnings per diluted share of $1.45 in the same quarter of 2019[157] - Net sales for the first six months of 2020 were $4.1 billion, a decrease of 1.4% compared to the same period in 2019, with organic sales declining by 7.3%[163] - The merger with Anixter positively impacted net sales by 5.6% during the first six months of 2020[165] - Adjusted net income attributable to common stockholders for the six months ended June 30, 2020, was $95.6 million, compared to $106.0 million for the same period in 2019, reflecting a decrease of approximately 10.3%[175] Expenses and Costs - Cost of goods sold as a percentage of net sales was 81.1% for the second quarter of 2020, compared to 81.0% for the same period in 2019[150] - SG&A expenses for the second quarter of 2020 totaled $359.8 million, representing 17.2% of net sales, up from 13.8% in the second quarter of 2019[151] - Adjusted for merger-related transaction costs, SG&A expenses were $286.4 million, or 13.7% of net sales, for the second quarter of 2020[151] - SG&A expenses for the first six months of 2020 totaled $659.1 million, or 16.3% of net sales, up from $592.4 million and 14.4% in the same period of 2019[167] - Net interest and other expenses for the first six months of 2020 were $77.1 million, including $45.3 million of merger-related financing and interest costs[170] Cash Flow and Liquidity - Operating cash flow generated for the first six months of 2020 was $132.7 million[141] - Cash generated from operations for the first six months of 2020 was $132.7 million, a turnaround from a cash usage of $8.8 million in the first half of 2019[195] - The company had $584.8 million in available borrowing capacity under its Revolving Credit Facility and $65.0 million under its Receivables Facility, totaling liquidity of $818.5 million as of June 30, 2020[181] - The company anticipates maintaining sufficient liquidity through credit facilities and cash balances for at least the next twelve months[181] Assets and Liabilities - Total assets increased to $11.7 billion as of June 30, 2020, from $5.0 billion at December 31, 2019, while total liabilities rose to $8.6 billion from $2.8 billion in the same period[180] - Current liabilities increased to $3,013.4 million as of June 30, 2020, compared to $3,578.4 million at the end of 2019[217] Mergers and Acquisitions - The company incurred $3,708.3 million in investing activities to fund the merger with Anixter[141] - The company incurred merger-related transaction costs of $78.0 million and financing costs of $45.3 million, impacting the adjusted earnings per diluted share, which was $2.28 for the six months ended June 30, 2020[175] - The company made payments of $27.7 million to acquire Sylvania Lighting Solutions during the first half of 2020[197] - The company anticipates potential risks related to the integration of Anixter and the divestiture of legacy businesses, which may affect future financial performance[223] Taxation - The effective tax rate for the second quarter of 2020 was 24.0%, compared to 21.6% in the prior year, primarily due to merger-related costs[155] - The provision for income taxes was a benefit of $0.6 million for the first six months of 2020, compared to an expense of $29.1 million in the same period of 2019[171] Other Considerations - Inflation did not have a material impact on sales for the six months ended June 30, 2020[202] - The company’s operating results are not significantly affected by seasonal factors, with sales typically increasing beginning in March[203]