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

Date of Report (Date of earliest event reported): January 27, 2011

WESCO International, Inc.

(Exact name of registrant as specified in its charter)

Commission file number 001-14989

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

 

 

     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 January 27, 2011, WESCO International, Inc. (the “Company”) issued a press release announcing its financial results for the fourth quarter of 2010 and for the year ended December 31, 2010. A copy of the press release is attached hereto as Exhibit 99.1.

     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 fourth 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.

     (d) Exhibits

	99.1			Press Release dated January 27, 2011.
	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.

January 27, 2011		WESCO International, Inc.
(Date)

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

WESCO International, Inc. Reports
Fourth Quarter and Full-Year 2010 Results

Ø

Fourth quarter results compared to prior year:

	•		Net income of $35 million increased 60%
	•		Operating margins improved to 4.5%, up 70 basis points
	•		Consolidated sales of $1.3 billion increased 18%

Ø

Full year sales increased 10% to $5.1 billion

PITTSBURGH, January 27, 2011/PRNewswire/ — WESCO International, Inc. (NYSE: WCC), a leading provider of electrical, industrial, and communications MRO and OEM products, construction materials, and advanced supply chain management and logistics services, today announced its 2010 fourth quarter and full-year financial results.

The following are results for the quarter-ended December 31, 2010 compared to the quarter-ended December 31, 2009:

	•		Consolidated net sales were $1,331.6 million, compared to $1,132.7 million, an increase of 17.6%. Fourth quarter 2010 organic sales growth was 15.8% excluding a 1.1% positive impact from acquisitions and a 0.7% positive impact from foreign exchange rates. Fourth quarter 2010 sales increased 0.5% sequentially.
	•		Gross profit was $270.3 million, or 20.3% of sales, for the fourth quarter of 2010, compared to $217.0 million, or 19.2% of sales, for the fourth quarter of 2009. Increased sales performance in the fourth quarter resulted in additional supplier volume rebates and favorable inventory adjustments which contributed to the improvement in gross margins.
	•		Sales, general & administrative (SG&A) expenses were $204.1 million, or 15.3% of sales, for the current quarter, compared to $168.3 million, or 14.9% of sales, for the fourth quarter of 2009. WESCO’s fourth quarter 2009 SG&A expenses included a net favorable impact of approximately $6.0 million related to temporary cost and discretionary benefit reductions.
	•		Operating profit was $60.0 million, or 4.5% of sales, for the current quarter, compared to $42.6 million, or 3.8% 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 130 basis points.
	•		Total interest expense for the fourth quarter of 2010 was $15.9 million, compared to $13.8 million for the fourth quarter of 2009. During the fourth quarter, WESCO resolved a tax matter involving intercompany transactions with its Canadian operations dating back to 1998, which resulted in increased interest expense of $4.2 million. Non-cash interest expense for the fourth quarter 2010 and 2009 was $0.5 million and $1.3 million, respectively.

	•		The effective tax rate for the current quarter was 21.1%, compared to 26.6% for the prior year quarter. The resolution of the previously mentioned tax matter, net of other international tax items, decreased fourth quarter 2010 tax expense by $2.9 million.
	•		Net income for the current quarter was $34.8 million compared to $21.8 million for the prior year quarter, an increase of 59.6%. The resolution of the previously mentioned tax matter, net of other international tax items, decreased fourth quarter 2010 net income by $1.3 million.
	•		Diluted earnings per share for the fourth quarter of 2010 were $0.72 per share, based on 48.3 million shares outstanding, versus $0.51 per share in the fourth quarter of 2009, based on 42.9 million shares outstanding. The resolution of the previously mentioned tax matter, net of other international tax items, negatively impacted fourth quarter 2010 EPS by $0.03. In the prior year comparable quarter, temporary cost and discretionary benefit reductions contributed $0.10 to EPS.
	•		Free cash flow for the fourth quarter of 2010 was $46.8 million, compared to a use of $1.7 million for the fourth quarter of 2009.

Mr. John J. Engel, WESCO’s Chief Executive Officer, stated, “Our fourth quarter results marked a strong close to an excellent year. Execution of our growth strategy is on track and we are pleased with the increasing momentum in our business during 2010. After declining 3% in the first quarter, sales grew 9% in the second quarter, 15% in the third quarter, and 18% in the fourth quarter, resulting in full-year growth of 10%. Backlog was also up 18% versus prior year end. We delivered strong operating margin expansion and free cash flow generation in 2010, reflecting effective operating leverage and efficient asset management. In addition, we strengthened the portfolio with the acquisitions of Potelcom in June and TVC Communications in December. We see excellent opportunities to continue to invest in our business and further improve our market position in 2011.”

The following results are for the full-year period ended December 31, 2010 compared to the full-year period ended December 31, 2009:

	•		Consolidated net sales were $5,063.9 million compared to $4,624.0 million, an increase of 9.5%. Consolidated net sales included a 1.3% positive impact from foreign exchange rates and a 0.4% positive impact from acquisitions.
	•		Gross profit was $998.5 million, or 19.7% of sales, compared to $899.9 million, or 19.5% of sales.
	•		SG&A expenses were $763.6 million, or 15.1% of sales, compared to $693.9 million, or 15.0% of sales. WESCO’s 2009 SG&A expenses included a net favorable impact of approximately $25.0 million related to temporary cost and discretionary benefit reductions.
	•		Operating profit was $211.0 million, or 4.2% of sales, compared to $180.0 million, or 3.9% of sales. After adjusting for the 2009 impact of the temporary cost and discretionary benefit reductions, operating margins improved by approximately 80 basis points.
	•		Total interest expense was $57.6 million, compared to $53.8 million. Non-cash interest expense for 2010 and 2009 was $4.3 million and $11.8 million, respectively.
	•		The effective full-year tax rate was 26.7% compared to 23.4%. After adjusting for the net benefit of the previously mentioned tax matter, the full year effective tax rate would have been 27.9%. Without the impact of 2009’s convertible debenture exchange completed in the third quarter, the effective 2009 full-year tax rate would have been 24.0%.
	•		Net income for the full-year was $115.5 million compared to $105.1 million for the prior year.

	•		Diluted earnings per share were $2.50 per share, based on 46.1 million shares compared to $2.46 per share, based on 42.7 million shares. The resolution of the previously mentioned tax matter, net of other international tax items, negatively impacted 2010 EPS by $0.03. In the prior year, the gain on 2009’s convertible debenture exchange net of related tax effects had a $0.16 per share favorable impact on EPS, and the temporary cost and discretionary benefit reductions had a $0.44 per share favorable impact on EPS.
	•		Full-year free cash flow was $112.2 million, compared to $278.6 million in the prior year.

Mr. Engel continued, “We expect the market will remain highly competitive as a gradual global economic recovery continues in 2011. We are focused on building on our 2010 successes as we continue to execute our strategy, accelerate our growth initiatives, and expand our geographic footprint and customer base. I am very proud of the results delivered by all WESCO employees in 2010 and I am confident in our team’s ability to produce outstanding results again in 2011.”

# # #

Teleconference

WESCO will conduct a teleconference to discuss the fourth quarter earnings as described in this News Release on Thursday, January 27, 2011, 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), a publicly traded Fortune 500 company headquartered in Pittsburgh, Pennsylvania, is a leading provider of electrical, industrial, and communications maintenance, repair and operating (“MRO”) and original equipment manufacturers (“OEM”) products, construction materials, and advanced supply chain management and logistics services. 2010 annual sales were approximately $5.1 billion. The Company employs approximately 6,800 people, maintains relationships with over 17,000 suppliers, and serves over 100,000 customers worldwide. Customers include industrial and commercial businesses, contractors, governmental agencies, institutions, telecommunications providers and utilities. WESCO operates seven fully automated distribution centers and over 400 full-service branches in North America and international markets, providing a local presence for 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 STATEMENTS OF INCOME
(dollar amounts in millions, except per share amounts)
(Unaudited)

		Three Months								Three Months
		Ended								Ended
		December 31,								December 31,
		2010								2009
Net sales		$	1,331.6							$	1,132.7
Cost of goods sold (excluding depreciation and amortization below)			1,061.3				79.7	%			915.7				80.8	%
Selling, general and administrative expenses			204.1				15.3	%			168.3				14.9	%
Depreciation and amortization			6.2								6.1
Income from operations			60.0				4.5	%			42.6				3.8	%
Interest expense, net			15.9								13.8
Other income			—								(0.9	)
Income before income taxes			44.1				3.3	%			29.7				2.6	%
Provision for income taxes			9.3								7.9
Net income		$	34.8				2.6	%		$	21.8				1.9	%
Diluted earnings per common share		$	0.72							$	0.51
Weighted average common shares outstanding and common share equivalents used in computing diluted earnings per share (in millions)			48.3								42.9

WESCO INTERNATIONAL, INC.

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

		Twelve Months								Twelve Months
		Ended								Ended
		December 31,								December 31,
		2010								2009
Net sales		$	5,063.9							$	4,624.0
Cost of goods sold (excluding depreciation and amortization below)			4,065.4				80.3	%			3,724.1				80.5	%
Selling, general and administrative expenses			763.6				15.1	%			693.9				15.0	%
Depreciation and amortization			23.9								26.0
Income from operations			211.0				4.2	%			180.0				3.9	%
Interest expense, net			57.6								53.8
Gain on debt exchange			—								(6.0	)
Other income			(4.3	)							(5.0	)
Income before income taxes			157.7				3.1	%			137.2				3.0	%
Provision for income taxes			42.2								32.1
Net income		$	115.5				2.3	%		$	105.1				2.3	%
Diluted earnings per common share		$	2.50							$	2.46
Weighted average common shares outstanding and common share equivalents used in computing diluted earnings per share (in millions)			46.1								42.7

WESCO INTERNATIONAL, INC.

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

		December 31,				December 31,
		2010				2009
Assets
Current Assets
Cash and cash equivalents		$	53.6			$	112.3
Trade accounts receivable			792.7				635.8
Inventories, net			588.8				507.2
Other current assets			78.6				75.7
Total current assets			1,513.7				1,331.0
Other assets			1,313.1				1,163.2
Total assets		$	2,826.8			$	2,494.2
Liabilities and Stockholders’ Equity
Current Liabilities
Accounts payable		$	537.5			$	453.1
Current debt			4.0				94.0
Other current liabilities			166.7				133.7
Total current liabilities			708.2				680.8
Long-term debt			725.9				597.9
Other noncurrent liabilities			244.1				219.2
Total liabilities			1,678.2				1,497.9
Stockholders’ Equity
Total stockholders’ equity			1,148.6				996.3
Total liabilities and stockholders’ equity		$	2,826.8			$	2,494.2

WESCO INTERNATIONAL, INC.

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

		Twelve Months Ended				Twelve Months Ended
		December 31, 2010				December 31, 2009
Operating Activities:
Net income		$	115.5			$	105.1
Add back (deduct):
Depreciation and amortization			23.9				26.0
Deferred income tax			21.0				(8.0	)
Change in Trade and other receivables, net			(118.5	)			179.7
Change in Inventories, net			(34.0	)			107.8
Change in Accounts Payable			53.9				(114.3	)
Other			65.5				(4.7	)
Net cash provided by operating activities			127.3				291.6
Investing Activities:
Capital expenditures			(15.1	)			(13.0	)
Acquisition payments			(265.4	)			(0.3	)
Proceeds from sale of subsidiary			40.0				—
Collection of note receivable			15.0				—
Other			5.0				2.6
Net cash used by investing activities			(220.5	)			(10.7	)
Financing Activities:
Debt borrowing (repayments), net			33.5				(255.6	)
Equity activity, net			4.3				2.6
Other			(7.2	)			(11.9	)
Net cash provided (used) by financing activities			30.6				(264.9	)
Effect of exchange rate changes on cash and cash equivalents			3.9				10.0
Net change in cash and cash equivalents			(58.7	)			26.0
Cash and cash equivalents at the beginning of the period			112.3				86.3
Cash and cash equivalents at the end of the period		$	53.6			$	112.3

WESCO INTERNATIONAL, INC.

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

		Three Months				Three Months
		Ended				Ended
		December 31,				December 31,
		2010				2009
Free Cash Flow:
Cash flow provided by operations		$	51.8			$	0.8
Less: Capital Expenditures			(5.0	)			(2.5	)
Free Cash Flow		$	46.8			$	(1.7	)

		Twelve Months				Twelve Months
		Ended				Ended
		December 31,				December 31,
		2010				2009
Free Cash Flow:
Cash flow provided by operations		$	127.3			$	291.6
Less: Capital Expenditures			(15.1	)			(13.0	)
Free Cash Flow		$	112.2			$	278.6

WESCO INTERNATIONAL, INC.

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

		Three Months				Three Months
		Ended				Ended
		December 31,				December 31,
		2010				2009
Gross Profit:
Net Sales		$	1,331.6			$	1,132.7
Cost of goods sold (excluding depreciation and amortization)			1,061.3				915.7
Gross profit		$	270.3			$	217.0
Gross margin			20.3	%			19.2	%

		Twelve Months				Twelve Months
		Ended				Ended
		December 31,				December 31,
		2010				2009
Gross Profit:
Net Sales		$	5,063.9			$	4,624.0
Cost of goods sold (excluding depreciation and amortization)			4,065.4				3,724.1
Gross profit		$	998.5			$	899.9
Gross margin			19.7	%			19.5	%

WESCO INTERNATIONAL, INC.

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

		Three Months				Twelve Months
		Ended				Ended
		December 31,				December 31,
		2009				2009
Adjusted Operating Profit:
Income from operations		$	42.6			$	180.0
Less: Temporary cost reductions			(6.0	)			(25.0	)
Adjusted operating profit		$	36.6			$	155.0
Net Sales		$	1,132.7			$	4,624.0
Adjusted operating profit as a percentage of net sales			3.2	%			3.4	%

WESCO INTERNATIONAL, INC.

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

										Adjusted
		Three Months								Three Months
		Ended								Ended
		December 31,				Temporary				December 31,
		2009				Reductions				2009
Adjusted Income Before Taxes,
Net Income and EPS:
Income before taxes		$	29.7			$	6.0			$	23.7
Income tax expense			7.9				1.6				6.3
Net income		$	21.8			$	4.4			$	17.4
Earnings per share		$	0.51			$	0.10			$	0.41

														Adjusted
		Twelve Months												Twelve Months
		Ended								Gain on				Ended
		December 31,				Temporary				Convertible				December 31,
		2009				Reductions				Debt				2009
Adjusted Income Before Taxes,
Net Income and EPS:
Income before taxes		$	137.2			$	25.0			$	6.0			$	106.2
Income tax expense			32.1				6.0				(0.6	)			26.7
Net income		$	105.1			$	19.0			$	6.6			$	79.5
Earnings per share		$	2.46			$	0.44			$	0.16			$	1.86