WESCO reports second quarter up 14 percent

WESCO International, Inc, Pittsburgh, PA, a provider of electrical MRO products, construction materials, and integrated supply procurement outsourcing services, reported net sales for the second quarter of 2005 were $1,062.1 million compared to $931.0 million in 2004, an increase of 14.1%. Net income in 2005's second quarter was $27.4 million versus $19.1 million in the comparable 2004 quarter. Gross margin for the quarter was 18.3% compared to 19.7% for the comparable 2004 quarter. Operating income for the current quarter totaled $48.9 million versus $42.9 million in last year's comparable quarter.

 

''Sales levels and productivity continued to accelerate through the quarter as sales per workday and sales per employee reached record levels for the month of June and the quarter, said Stephen A. Van Oss, senior vice president and CFO. "Operating profit and net income improved by 14% and 43%, respectively. Significant gains in operating productivity and effectiveness of expense controls resulted in a 120 basis points improvement in the SG&A expense rate.''

 

Net sales for the six months ended Jun. 30, 2005 were $2,052.9 million versus $1,778.8 million in last year's comparable period, a 15.4% increase. Gross margin in the current six-month period was 18.5% versus 19.4% last year and operating income totaled $87.5 million versus $69.1 million last year. Depreciation and amortization included in operating income was $7.6 million versus $9.7 million last year. Net income for the 2005 year-to-date period, including a charge in the first quarter for redeeming a portion of the Company's senior subordinated notes, was $38.7 million versus $28.8 million last year.

 

''Our employees are working on a variety of continuous improvement initiatives, and their superb results are sustaining the positive momentum that makes these excellent financial results possible, said Roy W. Haley, chairman and CEO. "We are particularly pleased with the company's ability to generate double-digit organic growth rates and process new business with high levels of operating productivity. The sales rate for the quarter established new records for top performance as quarterly sales of more than $1 billion were achieved for the first time. Net income of $27 million was also a quarterly record, surpassing last year's particularly strong second quarter, and our previous record best performance.

 

''While it will be a challenge to duplicate the growth rates achieved in last year's second half, industrial production and capacity utilization rates remain stable and construction activity is expected to show steady improvement. Accordingly, we believe that double-digit growth rates for organic sales development can be extended for the balance of the year.''

WESCO also announced that it is in final negotiations to acquire the assets and business of Fastec Industrial Corp., a national distributor of fasteners, cabinet hardware, locking and latching products. ''Fastec has particular strengths in the recreational vehicle industry," said Van Oss. "It has significant sourcing capabilities in China and is an innovator in the design and development of new products. This acquisition will strengthen and expand our strong position in the manufactured housing and recreational vehicle markets and will be EPS accretive.''