WESCO International(US:WCC)2024-10-31 20:08Financial Performance - Net sales for the first nine months of 2024 decreased by $592.7 million, or 3.5%, compared to the same period in 2023, primarily due to a volume decline of approximately 3%[96] - Income from operations for the first nine months of 2024 was $922.1 million, a decrease of $168.6 million, or 15.5%, compared to $1,090.7 million in the prior year[96] - Net sales for the third quarter of 2024 were $5.5 billion, a decrease of 2.7% from $5.6 billion in the third quarter of 2023[102] - Organic sales for the third quarter of 2024 declined by 0.6%, reflecting an estimated 2% decline in volume, driven by decreases in the EES and UBS segments[102] - Net income for Q3 2024 was $189.9 million, down from $219.0 million in Q3 2023, with diluted earnings per share of $3.81 compared to $4.20[110] - Adjusted EBITDA for Q3 2024 was $398.1 million, a decrease of $58.9 million, or 12.9%, year-over-year, primarily due to a $155.0 million decrease in net sales[111] - Net income for the first nine months of 2024 was $509.1 million, or $10.02 per diluted share, down from $580.5 million, or $11.08 per diluted share in 2023[135] - Adjusted net income attributable to common stockholders for the three months ended September 30, 2024, was $178.1 million, down from $234.4 million in the same period of 2023[125] Costs and Expenses - Cost of goods sold for the third quarter of 2024 was $4.3 billion, with a cost of goods sold percentage of 77.9%, down from 78.4% in the third quarter of 2023[103] - SG&A expenses for Q3 2024 totaled $831.1 million, an increase of $34.7 million, or 4.4%, compared to Q3 2023, representing 15.1% of net sales[104] - SG&A expenses increased by $43.1 million, or 1.8%, totaling $2,488.9 million for the first nine months of 2024, with SG&A as a percentage of net sales rising to 15.3% from 14.5% in 2023[129] - Digital transformation costs for the three months ended September 30, 2024, were $5.4 million, down from $12.9 million in the same period of 2023[123] - Digital transformation costs for the nine months ended September 30, 2024, amounted to $25.1 million, down from $36.1 million in the same period of 2023[156] Taxation - The provision for income taxes increased to $69.3 million in Q3 2024, resulting in an effective tax rate of 25.3%, up from 15.9% in Q3 2023[109] - Provision for income taxes for the three months ended September 30, 2024, was $69.3 million, an increase from $44.3 million in the same period of 2023[123][125] - The provision for income taxes was $188.1 million for the first nine months of 2024, resulting in an effective tax rate of 25.4%, up from 20.4% in the prior year[134] Divestitures and Business Changes - The divestiture of the WIS business negatively impacted net sales by 3.5% for the third quarter of 2024[100] - The company completed the sale of its integrated supply business on April 1, 2024, which contributed to the financial results for the first nine months of 2024[96] - Other non-operating income for Q3 2024 was $24.9 million, compared to an expense of $3.7 million in Q3 2023, including a gain of $19.3 million from the divestiture of the WIS business[107] Liquidity and Debt - As of September 30, 2024, the company had $1.2 billion in total available borrowing capacity under its Revolving Credit Facility[99] - As of September 30, 2024, the company had approximately $1.7 billion in liquidity, consisting of $1.2 billion in available borrowing capacity and $370.0 million in cash[154] - Total debt as of September 30, 2024, was $5,073.2 million, down from $5,364.6 million as of December 31, 2023[156] - The financial leverage ratio as of September 30, 2024, was 2.9x, compared to 2.8x as of December 31, 2023[156] - The maximum borrowing limit of the Revolving Credit Facility is $1,725 million, with $485.0 million outstanding as of September 30, 2024[158] Operational Metrics - The company employed approximately 20,000 people and served nearly 150,000 customers worldwide, maintaining relationships with over 50,000 suppliers[92] - Net cash provided by operating activities for the first nine months of 2024 totaled $824.6 million, a significant increase from $423.9 million in the same period of 2023[158] - Capital expenditures for the first nine months of 2024 were $70.4 million, compared to $63.6 million in the same period of 2023, focusing on digital transformation initiatives[161] Segment Performance - Electrical & Electronic Solutions (EES) reported net sales of $2,151.2 million for Q3 2024, a decrease of $39.5 million, or 1.8%, with organic sales declining by 2.9%[113] - Communications & Security Solutions (CSS) net sales increased by $177.1 million, or 10.0%, to $1,955.1 million in Q3 2024, with organic sales growing by 8.5%[116] - Utility & Broadband Solutions (UBS) reported net sales of $1,383.1 million for Q3 2024, a decrease of $292.6 million, or 17.5%, with organic sales declining by 7.2%[117] - Electrical & Electronic Solutions (EES) reported net sales of $6,423.1 million for the first nine months of 2024, a decrease of $103.0 million, or 1.6%, with organic sales declining by 1.8%[137] - Communications & Security Solutions (CSS) reported net sales of $5,491.1 million for the first nine months of 2024, an increase of $130.2 million, or 2.4%, with organic sales growing by 2.0%[140] - UBS reported net sales of $4,404.9 million for the first nine months of 2024, a decrease of 12.3% compared to $5,024.8 million for the same period in 2023[141]