UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES AND EXCHANGE ACT OF 1934

WESCO International, Inc.

(Exact name of registrant as specified in its charter)

Commission file number 001-14989

Delaware		25-1723345
(State or other jurisdiction of		(IRS Employer Identification No.)
incorporation or organization)
225 West Station Square Drive
Suite 700
Pittsburgh, Pennsylvania 15219		(412) 454-2200
(Address of principal executive offices)		(Registrant’s telephone number, including area code)

N/A
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o		Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o		Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o		Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o		Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

Item 2.02 Results of Operations and Financial Condition.

     The information in this Item 2.02 is being furnished and shall not be deemed “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. The information in this Item 2.02 shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended.

     On October 21, 2010, WESCO International, Inc. (the “Company”) issued a press release announcing its financial results for the third quarter of 2010. A copy of the press release is attached hereto as Exhibit 99.1.

Item 7.01 Regulation FD Disclosure

     The information in this Item 7.01 is being furnished and shall not be deemed “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. The information in this Item 7.01 shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended.

     A slide presentation to be used by senior management of the Company in connection with its discussions with investors regarding the Company’s financial results for the third quarter of 2010 is included in Exhibit 99.2 to this report and is being furnished in accordance with Regulation FD of the Securities and Exchange Commission.

Item 9.01 Financial Statements and Exhibits

     (d) Exhibits

99.1		Press Release dated October 21, 2010.
99.2		Slide presentation for investors.

SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

October 21, 2010		WESCO International, Inc.
(Date)
		/s/ Richard P. Heyse
		Richard P. Heyse
		Vice President and Chief Financial Officer

Exhibit 99.1

		NEWS RELEASE   WESCO International, Inc. / Suite 700, 225 West Station Square Drive / Pittsburgh, PA 15219

WESCO International, Inc. Reports
Third Quarter 2010 Results

	Ø		Earnings per share of $0.74 compared to $0.79 in the comparable quarter last year which included $0.29 of favorable discrete items
	Ø		Operating margins improved to 4.6%, up 60 basis points versus last year, and up 50 basis points sequentially
	Ø		Consolidated sales of $1.3 billion increased 15% over last year’s comparable quarter and 5% sequentially
	Ø		Sales to industrial and construction customers increased 27% and 15%, respectively, over last year’s comparable quarter; data communication product category sales up 21%

PITTSBURGH, October 21, 2010/PRNewswire/ — WESCO International, Inc. (NYSE: WCC), a leading provider of electrical and industrial MRO products, construction materials, and advanced integrated supply procurement outsourcing services, today announced its third quarter financial results.

The following are results for the three months ended September 30, 2010 compared to the three months ended September 30, 2009:

	•		Consolidated net sales were $1,324.6 million for the third quarter of 2010, compared to $1,152.4 million for the third quarter of 2009, an increase of 14.9%. Third quarter 2010 consolidated net sales included a 0.9% positive impact from foreign exchange rates. Third quarter 2010 sales increased 5.2% compared to the second quarter 2010, which included a 0.2% negative impact from foreign exchange.
	•		Gross profit was $257.8 million, or 19.5% of sales, for the third quarter of 2010, compared to $220.9 million, or 19.2% of sales, for the third quarter of 2009.
	•		Sales, general & administrative (SG&A) expenses were $190.6 million, or 14.4% of sales, for the current quarter, compared to $168.3 million, or 14.6% of sales, for the third quarter of 2009. WESCO’s third quarter 2009 SG&A expenses included a net favorable impact of approximately $7.0 million related to temporary cost and discretionary benefit reductions.
	•		Operating profit was $61.2 million, or 4.6% of sales, for the current quarter, compared to $46.2 million, or 4.0% of sales, for the comparable 2009 quarter. After adjusting for the 2009 impact of the temporary cost and discretionary benefit reductions, operating margins improved by approximately 120 basis points.
	•		Total interest expense for the third quarter of 2010 was $13.7 million, compared to $13.6 million for the third quarter of 2009. Interest expense in the current quarter was comprised of $12.5 million of cash interest expense and $1.2 million of non-cash interest expense. Interest expense in the comparable prior year quarter was comprised of $10.7 million of cash interest expense and $2.9 million of non-cash interest expense.

	•		The effective tax rate for the current quarter was 29.1%, compared to 15.8% for the prior year quarter. Without the impact of 2009’s convertible debenture exchange, the effective tax rate for the third quarter of 2009 would have been 20.3%.
	•		Net income for both the current quarter and the prior year comparable quarter was approximately $33.7 million. The pre-tax gain on 2009’s convertible debenture exchange net of related tax effects had a $6.6 million favorable impact on net income in the third quarter of 2009.
	•		Diluted earnings per share for the third quarter of 2010 was $0.74 per share, based on 45.5 million shares outstanding, versus $0.79 per share in the third quarter of 2009, based on 42.8 million shares outstanding. The pre-tax gain on 2009’s convertible debenture exchange net of related tax effects had a $0.16 per share favorable impact in the third quarter of 2009. Temporary cost and discretionary benefit reductions in the third quarter of 2009 contributed $0.13 to reported EPS.
	•		Free cash flow for the third quarter of 2010 was $2.6 million, compared to free cash flow of $81.9 million for the third quarter of 2009.

Mr. John J. Engel, WESCO’s Chief Executive Officer, stated, “Our sales and operating margin results improved significantly in the third quarter, and we have positive momentum across our business. Execution of our growth initiatives yielded double digit sales growth in the industrial and construction end markets and the data communications product category, and our backlog continued to grow. We delivered strong operating margin expansion this year, increasing from 3.3% in the first quarter to 4.1% in the second quarter and 4.6% in the third quarter, demonstrating the operating leverage in our business model. We continue to see excellent opportunities to strengthen our portfolio, invest in our growth initiatives and improve our market position through the recovery phase of this cycle.”

The following results are for the nine months ended September 30, 2010 compared to the nine months ended September 30, 2009:

	•		Consolidated net sales were $3,732.3 million for the first nine months of 2010, compared to $3,491.2 million for the first nine months of 2009, an increase of 6.9%. Consolidated net sales for the first nine months of 2010 included a 1.5% positive impact from foreign exchange rates.
	•		Gross profit was $728.2 million, or 19.5% of sales, for the first nine months of 2010, compared to $682.9 million, or 19.6% of sales, for the first nine months of 2009.
	•		SG&A expenses were $559.6 million, or 15.0% of sales, for the first nine months of 2010, compared to $525.7 million, or 15.1% of sales, for the first nine months of 2009. WESCO’s SG&A expenses for the first nine months of 2009 included a net favorable impact of approximately $19.0 million related to temporary cost and discretionary benefit reductions.
	•		Operating profit was $150.9 million, or 4.0% of sales, for the nine months ended September 30, 2010, compared to $137.3 million, or 3.9% of sales, for the nine months ended September 30, 2009. After adjusting for the 2009 impact of the temporary cost and discretionary benefit reductions, operating margins improved by approximately 60 basis points.
	•		Total interest expense for the nine months ended September 30, 2010 was $41.7 million, compared to $39.9 million for the nine months ended September 30, 2009. Interest expense for the first nine months of 2010 was comprised of $38.0 million cash interest expense and $3.7 million non-cash interest expense. Interest expense for the first nine months of 2009 was comprised of $29.3 million cash interest expense and $10.6 million non-cash interest expense.
	•		The effective nine month tax rate was 28.9% for 2010 compared to 22.5% for 2009. Without the impact of 2009’s convertible debenture exchange, the 2009 year to date effective tax rate would have been 24.1%.

	•		Net income for the first nine months of 2010 was $80.7 million, compared to $83.4 million for the first nine months of 2009. The pre-tax gain on 2009’s convertible debenture exchange net of related tax effects had a $6.6 million favorable impact on net income in the first nine months of 2009.
	•		Diluted earnings per share for the first nine months of 2010 was $1.79 per share, based on 45.2 million shares outstanding, versus $1.95 per share for the first nine months of 2009, based on 42.6 million shares outstanding. The pre-tax gain on 2009’s convertible debenture exchange net of related tax effects had a $0.16 per share favorable impact in the first nine months of 2009.
	•		Free cash flow for the first nine months of 2010 was $65.4 million, compared to $280.4 million in the comparable prior year period.

Mr. Engel continued, “The market remains highly competitive with an excellent opportunity for share gain and value creation by strong, well capitalized and innovative companies like WESCO. We are continuing to invest in our business and our people and remain focused on providing superior customer service, maintaining our efficient cost structure, strengthening our organization and producing improved shareholder returns. The WESCO team is stepping up to meet the increased demands of our customers, and I would like to thank all our employees for their extra effort and commitment in working together to actively sell and support our entire portfolio of products and services to all customer groups.”

# # #

Teleconference

WESCO will conduct a teleconference to discuss the third quarter earnings as described in this News Release on Thursday, October 21, 2010, at 11:00 a.m. E.D.T. The conference call will be broadcast live over the Internet and can be accessed from the Company’s website at http://www.wesco.com. The conference call will be archived on this Internet site for seven 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 electrical construction products and electrical and industrial maintenance, repair and operating (MRO) supplies, and is the nation’s largest provider of integrated supply services. 2009 annual sales were approximately $4.6 billion. The Company employs approximately 6,100 people, maintains relationships with over 17,000 suppliers, and serves over 100,000 customers worldwide. Major markets include commercial and industrial firms, contractors, government agencies, educational institutions, telecommunications businesses and utilities. WESCO operates seven fully automated distribution centers and approximately 380 full-service branches in North America and select international markets, providing a local presence for area customers and a global network to serve multi-location businesses and multi-national corporations.

# # #

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, 2009, as well as the Company’s other reports filed with the Securities and Exchange Commission.

Contact: Richard Heyse, Vice President & Chief Financial Officer
WESCO International, Inc. (412) 454-2392, Fax: (412) 222-7566
http://www.wesco.com

WESCO INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENT OF INCOME
(dollar amounts in millions, except per share amounts)
(Unaudited)

		Three Months								Three Months
		Ended								Ended
		September 30,								September 30,
		2010								2009
Net sales		$	1,324.6							$	1,152.4
Cost of goods sold (excluding depreciation and amortization below)			1,066.8				80.5	%			931.5				80.8	%
Selling, general and administrative expenses			190.6				14.4	%			168.3				14.6	%
Depreciation and amortization			6.0								6.4
Income from operations			61.2				4.6	%			46.2				4.0	%
Interest expense, net			13.7								13.6
Gain on debt exchange			—								(6.0	)
Other income			—								(1.4	)
Income before income taxes			47.5				3.6	%			40.0				3.5	%
Provision for income taxes			13.8								6.3
Net income		$	33.7				2.5	%		$	33.7				2.9	%
Diluted earnings per common share		$	0.74							$	0.79
Weighted average common shares outstanding and common share equivalents used in computing diluted earnings per share (in millions)			45.5								42.8

WESCO INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENT OF INCOME
(dollar amounts in millions, except per share amounts)
(Unaudited)

		Nine Months								Nine Months
		Ended								Ended
		September 30,								September 30,
		2010								2009
Net sales		$	3,732.3							$	3,491.2
Cost of goods sold (excluding depreciation and amortization below)			3,004.1				80.5	%			2,808.3				80.4	%
Selling, general and administrative expenses			559.6				15.0	%			525.7				15.1	%
Depreciation and amortization			17.7								19.9
Income from operations			150.9				4.0	%			137.3				3.9	%
Interest expense, net			41.7								39.9
Gain on debt exchange			—								(6.0	)
Other income			(4.3	)							(4.1	)
Income before income taxes			113.5				3.0	%			107.5				3.1	%
Provision for income taxes			32.8								24.1
Net income		$	80.7				2.2	%		$	83.4				2.4	%
Diluted earnings per common share		$	1.79							$	1.95
Weighted average common shares outstanding and common share equivalents used in computing diluted earnings per share (in millions)			45.2								42.6

WESCO INTERNATIONAL, INC.

CONDENSED CONSOLIDATED BALANCE SHEET
(dollar amounts in millions)
(Unaudited)

		September 30,				December 31,
		2010				2009
Assets
Current Assets
Cash and cash equivalents		$	103.1			$	112.3
Trade accounts receivable			796.4				635.8
Inventories, net			552.0				507.2
Other current assets			66.3				75.7
Total current assets			1,517.8				1,331.0
Other assets			1,117.5				1,163.2
Total assets		$	2,635.3			$	2,494.2
Liabilities and Stockholders’ Equity
Current Liabilities
Accounts payable		$	574.9			$	453.1
Current debt			96.7				94.0
Other current liabilities			163.3				133.7
Total current liabilities			834.9				680.8
Long-term debt			483.6				597.9
Other noncurrent liabilities			221.5				219.2
Total liabilities			1,540.0				1,497.9
Stockholders’ Equity
Total stockholders’ equity			1,095.3				996.3
Total liabilities and stockholders’ equity		$	2,635.3			$	2,494.2

WESCO INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(dollar amounts in millions)
(Unaudited)

		Nine Months Ended				Nine Months Ended
		September 30, 2010				September 30, 2009
Operating Activities:
Net income		$	80.7			$	83.4
Add back (deduct):
Depreciation and amortization			17.7				19.9
Deferred income tax			(4.6	)			5.4
Change in Trade and other receivables, net			(149.6	)			148.9
Change in Inventories, net			(40.9	)			117.1
Change in Accounts Payable			118.4				(69.7	)
Other			53.8				(14.1	)
Net cash provided by operating activities			75.5				290.9
Investing Activities:
Capital expenditures			(10.1	)			(10.5	)
Acquisition payments			(14.3	)			(0.2	)
Proceeds from sale of subsidiary			40.0				—
Collection of note receivable			15.0				—
Other			4.9				1.4
Net cash provided (used) by investing activities			35.5				(9.3	)
Financing Activities:
Debt borrowing (repayments), net			(115.5	)			(241.3	)
Equity activitiy, net			1.2				0.5
Other			(8.6	)			(24.4	)
Net cash used by financing activities			(122.9	)			(265.2	)
Effect of exchange rate changes on cash and cash equivalents			2.7				8.6
Net change in cash and cash equivalents			(9.2	)			25.0
Cash and cash equivalents at the beginning of the period			112.3				86.3
Cash and cash equivalents at the end of the period		$	103.1			$	111.3

WESCO INTERNATIONAL, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(dollar amounts in thousands)
(Unaudited)

		Twelve Months				Twelve Months
		Ended				Ended
		September 30,				December 31,
		2010				2009
Financial Leverage:
Income from operations		$	193,476			$	179,952
Depreciation and amortization			23,803				26,045
EBITDA		$	217,279			$	205,997
		September 30,				December 31,
		2010				2009
Current Debt		$	96,673			$	93,977
Long-term Debt			483,646				597,869
Debt discount related to convertible debentures(1)			178,959				182,689
Total Debt including debt discount		$	759,278			$	874,535
Financial leverage ratio			3.5				4.2

Note: Financial leverage is provided by the Company as an indicator of capital structure position. Financial leverage is calculated by dividing total debt, including debt discount, by the trailing twelve months earnings before interest, taxes, depreciation and amortization (EBITDA).

		Three Months				Three Months				Nine Months				Nine Months
		Ended				Ended				Ended				Ended
		September 30,				September 30,				September 30,				September 30,
(dollar amounts in millions)		2010				2009				2010				2009
Free Cash Flow:
Cash flow provided by operations		$	6.7			$	86.2			$	75.5			$	290.9
Less: Capital Expenditures			(4.1	)			(4.3	)			(10.1	)			(10.5	)
Free Cash Flow		$	2.6			$	81.9			$	65.4			$	280.4

Note: Free cash flow is provided by the Company as an additional liquidity measure. Capital expenditures are deducted from operating flow to determine free cash flow. Free cash flow is available to provide a source of funds for any of the Company’s financing needs.

WESCO INTERNATIONAL, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (CONTINUED)
(dollar amounts in millions)
(Unaudited)

		Three Months				Three Months
		Ended				Ended
		September 30,				September 30,
		2010				2009
Gross Profit:
Net Sales		$	1,324.6			$	1,152.4
Cost of goods sold (excluding depreciation and amortization)			1,066.8				931.5
Gross profit		$	257.8			$	220.9
Gross margin			19.5	%			19.2	%

		Nine Months				Nine Months
		Ended				Ended
		September 30,				September 30,
		2010				2009
Gross Profit:
Net Sales		$	3,732.3			$	3,491.2
Cost of goods sold (excluding depreciation and amortization)			3,004.1				2,808.3
Gross profit		$	728.2			$	682.9
Gross margin			19.5	%			19.6	%

Note: Gross profit is provided by the Company as an additional financial measure. Gross profit is calculated by deducting cost of goods sold, excluding depreciation and amortization, from net sales. This amount represents a commonly used financial measure within the distribution industry. Gross margin is calculated by dividing gross profit by net sales.

		Three Months
		Ended
		September 30,
		2009
Adjusted Operating Profit:
Income from operations		$	46.2
Less: Temporary cost reductions			(7.0	)
Adjusted operating profit		$	39.2
Net Sales		$	1,152.4
Adjusted operating profit as a percentage of net sales			3.4	%

Note: Adjusted operating profit is provided by the Company as an additional financial measure to show the quality of 2010 earnings. Adjusted operating profit is calculated by deducting the impact of 2009 temporary cost and discretionary benefit reductions from 2009 income from operations.

WESCO INTERNATIONAL, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (CONTINUED)
(dollar amounts in millions)
(Unaudited)

														Adjusted
		Three Months												Three Months
		Ended				Temporary				Gain on				Ended
		September 30,				Cost				Convertible				September 30,
		2009				Reductions				Debt				2009
Adjusted Income Before Taxes, Net Income and EPS:
Income before taxes		$	40.0			$	7.0			$	6.0			$	27.0
Income tax expense			6.3				1.4				(0.6	)			5.5
Net income		$	33.7			$	5.6			$	6.6			$	21.5
Earnings per share		$	0.79			$	0.13			$	0.16			$	0.50

Note: Adjusted income before taxes is provided by the Company as an additional financial measure to show the quality of 2010 earnings. Adjusted income before taxes is calculated by deducting the impact of 2009 temporary cost and discretionary benefit reductions and the gain on the convertible debenture exchange from 2009 reported income before taxes. Earnings per share is calculated by dividing net income by 42.8 million shares.