In its first earnings report since completing the $4.5 billion acquisition of Anixter International Inc., WESCO International Inc. (NYSE: WCC), Pittsburgh, Pennsylvania, reported second-quarter sales of $2.2 billion, down 2.9% from the same period a year ago. 2Q organic sales were down 12.3%. The company reported a loss of $34.5 million, compared to a profit of $63.5 million in the year-ago period.
“We delivered a strong second quarter where our sales, margin, profit and cash generation results exceeded our expectations,” said John J. Engel, WESCO’s chairman, president and CEO. “Business momentum improved through the quarter as we outperformed the market and built an all-time record backlog. As we have done in prior economic downturns, we aggressively managed our WESCO business and took significant cost reduction and cash management actions, which enabled us to deliver decremental margins of 10% and generate exceptionally strong free cash flow of 248% of adjusted net income. Anixter also delivered a strong performance to close out the second quarter. I would like to recognize and thank all of our associates for their inspirational dedication, commitment and hard work in effectively managing through this COVID-19 driven crisis.”
The addition of Anixter, which closed in June after completing months-long due diligence during the coronavirus crisis, is sure to send WESCO’s revenue soaring in 3Q.
“The second quarter will prove to be a watershed period in our history, as we successfully closed on our industry-shaping merger of WESCO and Anixter,” Engel said. “In combining two industry-leading Fortune 500 companies with successful track records, we are creating the premier electrical, communications and utility distribution and supply chain solutions company in the world. Against the challenges imposed by the global pandemic, the extraordinary determination of our WESCO and Anixter associates to execute a flawless day one closing, just five months after signing the merger agreement, was impressive. I could not be more proud of the entire team in achieving this noteworthy milestone.”
WESCO’s sales for the first half of the year were $4.06 billion, a decrease of 1.4% compared to the year-ago period. The company reported a loss for the first half of $0.1 million, compared to a profit of $105.8 million for the same period of 2019.