Pittsburgh, PA - First quarter results compared to the prior year:
Earnings per diluted share of $1.03 increased 39%
Net income of $52.9 million increased 42%
Operating margins improved to 5.2%, up 70 basis points
Consolidated sales of $1.61 billion increased 12%
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 2012 first quarter results.
The following are results for the three months ended March 31, 2012 compared to the three months ended March 31, 2011:
Consolidated net sales were $1,606.0 million for the first quarter of 2012, compared to $1,431.3 million for the first quarter of 2011, an increase of 12.2%. Acquisitions positively impacted consolidated sales by 2.6%, while one additional workday positively impacted sales by 1.6% and foreign exchange provided a 0.2% negative impact resulting in a normalized organic growth rate of approximately 8.2%. Sequentially, first quarter 2012 sales increased 1.0%. Sales per workday in March were at an all-time record level for any month.
Gross profit of $319.7 million, or 19.9% of sales, for the first quarter of 2012 was down 10 basis points, compared to $286.0 million, or 20.0% of sales, for the first quarter of 2011.
Selling, general & administrative (SG&A) expenses of $228.1 million, or 14.2% of sales, for the first quarter of 2012 improved 70 basis points, compared to $213.8 million, or 14.9% of sales, for the first quarter of 2011.
Operating profit was $83.5 million for the current quarter, up 29.0% from $64.7 million for the comparable 2011 quarter. Operating profit as a percentage of sales was 5.2% in 2012, up 70 basis points from 4.5% in 2011.
Total interest expense for the first quarter of 2012 was $9.0 million, compared to $12.6 million for the first quarter of 2011. Cash interest expense was $10.8 million for the first quarter of 2012. Non-cash interest expense, which includes convertible debt interest, interest related to uncertain tax positions, and the amortization of deferred financing fees, amounted to $1.9 million of income as a result of a favorable adjustment of $3.2 million of previously recorded interest related to uncertain tax positions. This adjustment was a result of a favorable Internal Revenue Service appeals settlement in the first quarter of 2012 related to the years 2000 to 2006.
The effective tax rate for the current quarter was 29.0%, compared to 28.4% for the prior year first quarter.
Net income of $52.9 million for the current quarter was up 41.9% from $37.3 million for the prior year first quarter.
Earnings per diluted share for the first quarter of 2012 were $1.03 per share, based on 51.3 million diluted shares, and was up 39.2% from $0.74 per share in the first quarter of 2011, based on 50.4 million diluted shares. The adjustment of previously recorded interest related to uncertain tax positions positively impacted first quarter 2012 earnings per diluted share by approximately $0.04.
Free cash flow for the first quarter of 2012 was $53.8 million, compared to $26.2 million for the first quarter of 2011.
Mr. John J. Engel, WESCO's Chairman and Chief Executive Officer, stated, "2012 is off to a good start, and we are pleased with our first quarter results, which reflect effective execution of our growth strategy and our ability to deliver strong sales and earnings growth in a challenging economic environment. We have now posted seven consecutive quarters of double digit sales growth and six consecutive quarters of EPS growth of well over 25% on a year-over-year basis. Operating margins improved 70 basis points to 5.2% and free cash flow exceeded net income, demonstrating the continued effectiveness and operating leverage of our business model."
Mr. Engel continued, "We are building on the positive momentum that we have generated across our company over the last few years, and continue to execute our One WESCO growth strategy, which targets the countless customer service opportunities within our large, fragmented end markets. Through these One WESCO initiatives, we are providing customers with the leading products, services, and supply chain solutions they need to meet their global MRO, OEM, and Capital Project requirements."
For the full report, visit www.wesco.investorroom.com.
