WESCO International(WCC) - 2025 Q1 - Quarterly Results

Financial Performance - First quarter 2025 reported net sales were $5,343.7 million, down 0.1% year-over-year, with organic sales growth of 5.6%[6] - Diluted earnings per share (EPS) for the first quarter was $2.10, reflecting a 7.7% increase year-over-year; adjusted diluted EPS was $2.21[6] - Net income for the three months ended March 31, 2025, was $118.3 million, a slight increase from $116.1 million in the same period of 2024[26] - Adjusted net income attributable to common stockholders for the three months ended March 31, 2025, was $109.6 million, a decrease of 7.9% from $119.2 million in the same period of 2024[35] - Net income attributable to common stockholders for the twelve months ended March 31, 2025, was $662.8 million, slightly up from $660.2 million for the previous year[42] Sales and Revenue - Data center sales experienced significant growth of 70% in the first quarter[6] - Organic sales growth for the total net sales was 5.6% for the three months ended March 31, 2025, despite a reported decline of 0.1%[30] - Preliminary sales per workday in April were up 7% compared to the prior year, indicating continued positive momentum[4] Cash Flow and Liquidity - Operating cash flow for the first quarter was $28 million, a decrease of 96.2% compared to the previous year[6] - Free cash flow generation in the first quarter was $9.4 million, a decline of 98.7% year-over-year[7] - The company reported a net cash provided by operating activities of $28.0 million for the three months ended March 31, 2025, a significant decrease from $746.3 million in the same period of 2024[26] - Free cash flow for the three months ended March 31, 2025, was $9.4 million, a significant decrease from $731.4 million for the same period in 2024, representing a decline of approximately 99%[45] - Cash flow provided by operations for the three months ended March 31, 2025, was $28.0 million, down from $746.3 million in the prior year[45] Expenses and Margins - Gross margin for the first quarter was 21.1%, down 10 basis points sequentially and 20 basis points year-over-year[6] - Adjusted selling, general and administrative expenses were $829.0 million for the three months ended March 31, 2025, representing 15.5% of net sales, compared to 15.1% in 2024[33] - Total Adjusted EBITDA for the three months ended March 31, 2025, was $310.7 million, compared to $340.4 million in Q1 2024, indicating a decrease of 8.7%[38] - Adjusted EBITDA margin for Q1 2025 was 5.8%, down from 6.4% in Q1 2024, showing a decline of 0.6 percentage points[38] - Adjusted earnings per diluted share for Q1 2025 was $2.21, down from $2.30 in Q1 2024, reflecting a decline of 3.9%[35] Debt and Financial Position - Long-term debt increased to $5,136.6 million as of March 31, 2025, compared to $5,045.5 million as of December 31, 2024, reflecting a rise of 1.8%[24] - Total debt as of March 31, 2025, increased to $5,215.5 million from $5,112.1 million as of December 31, 2024, reflecting a rise of about 2%[42] - The financial leverage ratio increased to 3.1 as of March 31, 2025, compared to 2.9 as of December 31, 2024, indicating a higher reliance on debt[42] - Interest expense, net for Q1 2025 was $86.3 million, a slight decrease from $94.4 million in Q1 2024, reflecting a reduction of 8.6%[35] - The company reported a net interest expense of $356.9 million for the twelve months ended March 31, 2025, down from $364.9 million in the previous year[42] Asset Management - Total assets increased to $15,515.1 million as of March 31, 2025, compared to $15,061.4 million as of December 31, 2024, reflecting a growth of 3.0%[24] - Total current liabilities rose to $4,035.5 million as of March 31, 2025, from $3,804.0 million as of December 31, 2024, indicating an increase of 6.1%[24] - The company experienced a change in trade receivables, net, of $(188.7) million for the three months ended March 31, 2025, compared to $(116.1) million in 2024, indicating a worsening in cash flow management[26] Corporate Actions - The company plans to redeem preferred stock in June using proceeds from $800 million of notes issued during the first quarter[5] - The company issued $800 million in Senior Notes due 2033, intending to use the proceeds to redeem outstanding preferred stock and repay a portion of its revolving credit facility[26] - Preferred stock dividends remained constant at $14.4 million for both Q1 2025 and Q1 2024[35] - The company experienced a restructuring cost of $1.1 million in Q1 2025, compared to $8.0 million in Q1 2024[38] - Restructuring costs for the twelve months ended March 31, 2025, decreased to $5.1 million from $12.1 million in the previous year, indicating a reduction of approximately 58%[42] Digital Transformation - Digital transformation costs included in the adjusted EBITDA for Q1 2025 amounted to $6.2 million[38] - Digital transformation costs for the twelve months ended March 31, 2025, amounted to $25.0 million, slightly up from $24.9 million in the previous year[42]