Wesco International, Inc. · NYSE:WCC
Wesco International — Q3 2012 Earnings Presentation
16 slides from Wesco International's earnings presentation, Oct 18, 2012
Slide 1: Supplemental Financial Data WESCO Third Quarter 2012
Supplemental Financial Data WESCO Third Quarter 2012 October 18, 2012
Slide 2: Safe Harbor Statement
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
Slide 3: Third Quarter 2012 Results
3 Third Quarter 2012 Results Category Q3 2012 Outlook Provided Q3 2012 Performance Sales Growth Total sales growth expected to be 9% to 11% including acquisitions of approximately 4%. Total sales growth of 4.8%; normalized organic sales growth of 3.0%. Acquisition sales had a positive impact of 4.0%
Slide 4: Organic Sales Versus Prior Year
4 Organic Sales Versus Prior Year Notes: (a) Q4 2011 had one less workday versus Q4 2010. (b) FY 2011 had one less workday versus FY 2010. (c) Q1 2012 had one more workday versus Q1 2011 and Q1 2010. (d) Q3 2012 had one less workday versus Q3 2011. ------------------------2010-------------------- --
Slide 5: Recent Acquisitions' Estimated End Market Mix
5 Recent Acquisitions’ Estimated End Market Mix Acquisition Date Acquired Approximate Sales at Acquisition date (TTM Millions) Industrial Construction Utility CIG Potelcom June 2010 $25 40% - 60% - TVC December 2010 $300 - 10% - 90% Reco March 2011 $25 100% - - - Brews Supply October 2011 $50 75% 5%
Slide 6: End Markets and Product Categories
6 End Markets and Product Categories Nine Months Ended September 30, 2012 43% 32% 12% 13% Markets & Customers 35% 15% 18% 13% 9% 10% Products & Services Controls & Motors Lighting & Controls General Supplies Data & Broadband Communications Wire, Cable & Conduit Distribution Equipment Utility • Inves
Slide 7: WESCO End Market Momentum
7 22.3% 21.6% 18.4% 14.8% 12.0% 16.7% 11.8% 7.7% 0.8% FY 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 FY 2011 Q1 2012 Q2 2012 Q3 2012 (14.6%) (4.6%) 6.1% 13.2% 21.7% 9.8% 23.9% 11.7% 4.3% FY 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 FY 2011 Q1 2012 Q2 2012 Q3 2012 6.9% 21.2% 12.7% 10.9% 12.5% 13.7% 4.7% 3.8% 0.0
Slide 8: 2012 Q3 End Market Comments
8 x 2012 Q3 End Market Comments End Market Q3 2012 vs. Q3 2011 Q3 2012 vs. Q2 2012 Comments WESCO Core 0.8% (2.7%) • Q3 organic sales per workday growth of 3.0% versus prior year • All four end market categories grew in Q3 versus prior year on sales per workday basis • Eight consecutive quarters of
Slide 9: Core Sales Reconciliation of Non-GAAP Financial Measures
9 Core Sales Reconciliation of Non-GAAP Financial Measures Unaudited Notes: 1. Q3 2012 compared to prior year excludes Brews Supply, RS Electronics, Trydor, and Conney results. 2. Q3 2012 sequential excludes Trydor and Conney results. 3. The prior period end market amounts noted above may contain re
Slide 10: Key Financial Metrics
10 Key Financial Metrics 12/31/2011 9/30/2012 Liquidity (1) $511 million $489 million Full Year 2011 and September YTD 2012 Free Cash Flow (2) $134 million $170 million Financial Leverage (Total Par Value Debt Divided by Reported TTM EBITDA) 2.3 X 2.2 X ($Millions) Outstanding at December 31, 2011 O
Slide 11: Quarterly Financial Leverage
11 1.5 2 2.5 3 3.5 4 4.5 5 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Quarterly Financial Leverage Target Leverage 2.0x – 3.5x 2.2x
Slide 12: ROIC
12 8.1% 9.2% 11.9% 12.6% 2009 2010 2011 Q3 2012 ROIC Long term goal ≥ 15% ROIC is calculated by dividing tax affected income from operations plus equity income by average par debt and stockholders’ equity, less any debt discount.
Slide 13: Convertible Debt and Non-Cash Interest
13 Convertible Debt and Non-Cash Interest as of September 30, 2012 GAAP vs. Non-GAAP Debt Reconciliation Non-Cash Interest Expense Schedule Convertible Debentures (000s) Maturity Par Value of Debt Debt Discount Debt per Balance Sheet 2029 $ 344,930 $ (173,685) $ 171,245 Non-Cash Interest Expense ($
Slide 14: Convertible Debt and SARs/Options EPS Dilution
14 Convertible Debt and SARs/Options EPS Dilution Weighted Average Quarterly Share Count Stock Price Incremental Shares from 2029 Convertible Debt (in millions)3 Incremental Shares from SARs/Option Awards (in millions) Total Diluted Share Count (in millions)4 $30.00 0.45 0.32 44.48 $40.00 3.33 0.60
Slide 15: Number of Work Days by Quarter
15 Number of Work Days by Quarter Q1 Q2 Q3 Q4 FY 2010 63 64 64 64 255 2011 63 64 64 63 254 2012 64 64 63 63 254 2013 63 64 64 63 254
Slide 16: Q4 2012 Outlook
16 Q4 2012 Outlook Category Q4 2012 Expectations Sales Growth Total sales growth expected to be 2 to 4% including acquisitions of approximately 2 to 3% Gross Margin Gross margin expected to be at or above 20.2% Operating Margin Operating margin expected to be at or above 5.6% Effective Tax Rate Effe