Exhibit 99.1
WESCO INTERNATIONAL, INC. REPORTS THIRD QUARTER 2001
FINANCIAL RESULTS
Contact: Stephen A. Van Oss, Chief Financial Officer
WESCO International, Inc. (412) 454-2271, Fax: (412) 454-2477
http://www.wescodist.com
Pittsburgh, PA, October 24, 2001 - WESCO International, Inc. [NYSE:WCC], a
leading provider of electrical MRO products, construction materials, and
advanced integrated supply procurement outsourcing services, today announced
its 2001 third quarter financial results.
Sales for the third quarter of 2001 were $905.6 million, down 7.2% from the
third quarter of 2000. Sales from core operations for the quarter were down
10.2% from last year's third quarter and were partially offset by increased
sales from acquisitions. Gross margins for the quarter were 17.6%, slightly
better than the second quarter 2001 results, but below the 18.3% recorded in
the third quarter of 2000. The decline in gross profit margins is primarily
attributable to lower supplier discounts and rebates resulting from reduced
sales activity and inventory reduction initiatives. Earnings before interest,
taxes, depreciation and amortization (EBITDA) for the third quarter were $32.2
million, a decrease of $16.5 million from the third quarter of 2000. Net income
was $5.1 million, compared to $14.6 million in 2000. Diluted earnings per share
for the third quarter of 2001 were $0.11 compared to $0.31 in the third quarter
of 2000.
Commenting on the quarter's results, Stephen A. Van Oss, Vice President and
Chief Financial Officer, stated, "We have taken significant actions to address
the current economic environment and our expectation of continued near-term
weakness. Expenses have been systematically reduced through across-the-board
cost reduction initiatives with absolute spending down over 7% or $9.8 million
from the first quarter. Our productivity per employee is up and targeted
reduction programs in payroll expenses will continue during the fourth quarter.
We strengthened our capital structure in August through the issuance of a $100
million subordinated bond offering. For the nine months ending September 30, we
generated $65 million of cash before funding $11 million of capital
expenditures, and reduced debt by $12 million and accounts payables by $38
million. The Company will continue to proactively manage its cost structure,
focus on working capital and reduce debt in these uncertain economic times."
Sales for the nine months ending September 30, 2001, were $2,777.7 million, a
decrease of $114.6 million, or 4.0%, from the nine months ended September 30,
2000. Gross margins for the nine months were 17.7% compared to 17.9% in the
prior year. EBITDA for the nine-month period was $98.1 million, a decrease of
$31.5 million from the comparable period of 2000. Net income was $16.1 million,
compared to $36.6 million in the first nine months of 2000. Diluted earnings per
share were $0.34 for the period compared to $0.76 in the first nine months of
2000.
Chairman and CEO, Roy W. Haley, commented, "Market conditions continue to be
challenging, and the decline in economic activity experienced by the Company in
the first half of the year accelerated during the third quarter. The most
significant impact has been seen in the industrial market segment with reduced
customer spending in maintenance and repair, automation initiatives and project
activity. Despite this, we are convinced that our market position has been
improved during this period with new awards in our National Accounts programs
running at record levels with over 25 new high-profile accounts being added this
year."
Haley added, "We continue to adjust the cost structure of our operations in
response to anticipated further declines in economic activity. Earnings are
likely to remain under pressure for several more quarters, but WESCO is well
positioned to serve its growing customer base and will achieve improved
profitability as economic conditions improve."
Teleconference
WESCO will conduct a teleconference to discuss the third quarter earnings as
described in this News Release on Wednesday, October 24, 2001, at 11:00 a.m.
E.D.T. The conference call will be broadcast live over the Internet and can be
accessed at http://www.shareholder.com/wesco/medialist.cfm or from the
Company's home page at http://www.wescodist.com. The conference call will be
archived on this Internet site for 14 days.
# # #
WESCO International, Inc. [NYSE: WCC] is a publicly traded Fortune 500 holding
company, headquartered in Pittsburgh, Pennsylvania, whose primary operating
entity is WESCO Distribution, Inc. WESCO Distribution is a leading distributor
of MRO (maintenance, repair, and operating) products, construction materials,
and advanced integrated supply procurement outsourcing services. It operates
approximately 360 full service branches throughout North America. WESCO's 6,100
employees were responsible for generating and supporting 2000 annual product
sales of approximately $3.9 billion. These sales represent more than 130,000 of
the most recognized and commonly used industrial and construction products.
Major markets served by WESCO include commercial and industrial construction,
industrial process and discrete manufacturers, large industrial OEMs (original
equipment manufacturers), data communications and electric utilities.
# # #
The matters discussed herein may contain forward-looking statements that are
subject to certain risks and uncertainties that could cause actual results to
differ materially from expectations. Certain of these risks are set forth in the
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
2000, as well as the Company's other reports filed with the Securities and
Exchange Commission. WESCO's Internet address is: http://www.wescodist.com.
WESCO INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
($ in millions, except per share amounts)
(unaudited)
THREE MONTHS ENDED THREE MONTHS ENDED
SEPTEMBER 30, 2001 SEPTEMBER 30, 2000
------------------ ------------------
Net sales $905.6 $976.3
Cost of sales 746.4 797.4
------ ------
Gross Profit 159.2 17.6% 178.9 18.3%
Selling, general & admin. expenses 127.0 14.0% 130.2 13.3%
Depreciation & amortization 7.9 6.4
------ ------
Income from operations 24.3 2.7% 42.3 4.3%
Interest expense, net 11.9 11.0
Other expense 3.9 7.0
------ ------
Income before income taxes 8.5 0.9% 24.3 2.5%
Provision for income taxes 3.4 9.7
------ ------
Net income $ 5.1 0.6% $ 14.6 1.5%
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EBITDA $ 32.2 3.6% $48.7 5.0%
Diluted earnings per common share:
Net income $0.11 $0.31
Weighted Average Shares Outstanding 46.9 47.4
NINE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, 2001 SEPTEMBER 30, 2000
------------------ ------------------
Net sales $2,777.7 $2,892.3
Cost of sales 2,286.5 2,374.5
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Gross Profit 491.2 17.7% 517.8 17.9%
Selling, general & admin. expenses 393.1 14.2% 388.2 13.4%
Depreciation & amortization 22.9 17.8
-------- --------
Income from operations 75.2 2.7% 111.8 3.9%
Interest expense, net 33.9 32.7
Other expense 14.5 18.2
-------- --------
Income before income taxes 26.8 1.0% 60.9 2.1%
Provision for income taxes 10.7 24.3
-------- --------
Net income $ 16.1 0.6% $ 36.6 1.3%
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EBITDA $98.1 3.5% $129.6 4.5%
Diluted earnings per common share:
Net income $0.34 $0.76
Weighted Average Shares Outstanding 47.0 48.0