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WESCO International Inc. Reports Operating Results (10-Q)

November 02, 2010 | About:

10qk

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WESCO International Inc. (WCC) filed Quarterly Report for the period ended 2010-09-30.

Wesco International Inc. has a market cap of $1.78 billion; its shares were traded at around $42.74 with a P/E ratio of 17.8 and P/S ratio of 0.4. Wesco International Inc. had an annual average earning growth of 12.7% over the past 10 years.WCC is in the portfolios of Ronald Muhlenkamp of Muhlenkamp Fund, Richard Snow of Snow Capital Management, L.P., John Buckingham of Al Frank Asset Management, Inc., NWQ Managers of NWQ Investment Management Co, George Soros of Soros Fund Management LLC.
This is the annual revenues and earnings per share of WCC over the last 10 years. For detailed 10-year financial data and charts, go to 10-Year Financials of WCC.


Highlight of Business Operations:

We generated $75.5 million in operating cash flow for the first nine months of 2010. Included in this amount was net income of $80.7 million, an increase in accounts payable of $118.4 million and an increase in trade and other receivables of $149.6 million. Investing activities included proceeds from the sale of our 40% interest in the LADD joint venture. Proceeds included $40.0 million for our 40% interest, plus $15.0 million for the collection of a promissory note. Refer to Note 7 of our notes to the condensed consolidated financial statements for additional information regarding the LADD joint venture. Investing activities for the first nine months of 2010 also included $14.3 million for acquisition payments and $10.1 million for capital expenditures. Financing activities consisted of borrowings and repayments of $356.0 million and $534.5 million, respectively, related to our revolving credit facility, and borrowings and repayments of $360.0 million and $295.0 million, respectively, related to our Receivables Facility.

Total assets were $2.6 billion at September 30, 2010, compared to $2.5 billion at December 31, 2009. The $141.1 million increase in total assets was principally attributable to the increase in accounts receivable of $160.6 million and the increase in inventory of $44.8 million, which was partially offset by the decrease in investment in subsidiary of $44.0 million related to the sale of our 40% interest in the LADD joint venture, the decrease in other assets of $11.6 million related to the collection of the LADD joint venture promissory note, the decrease in cash of $9.2 million, and the decrease in other accounts receivable of $8.6 million. Total liabilities at September 30, 2010 and December 31, 2009 were $1.5 billion. Total liabilities remained unchanged primarily as a result of the increase in accounts payable of $121.8, which was mostly offset by the decrease in long-term debt of $111.5 million. Stockholders’ equity increased 9.9% to $1,095.3 million at September 30, 2010, compared with $996.3 million at December 31, 2009, primarily as a result of net earnings of $80.7 million and stock-based compensation expense of $11.5 million.

Operating Activities. Cash provided by operating activities for the first nine months of 2010 totaled $75.5 million compared with $290.9 million of cash generated for the first nine months of 2009. Cash provided by operating activities in the first nine months of 2010 included net income of $80.7 million and adjustments to net income totaling $31.2 million. Cash flow generated from the changes in assets and liabilities was attributable to an increase in accounts payable of $118.4 million, an increase in accrued payroll and benefit costs of $20.6 million due to the increase in commissions, incentives and benefit costs, an increase in other current and noncurrent liabilities of $11.7 million, and a decrease in prepaid expenses and other current assets of $3.4 million. Cash used by operating activities in the first nine months of 2010 included: $149.6 million for the increase in trade and other receivables, resulting from an increase in sales; and $40.9 million for the increase

in inventory. During the first nine months of 2009, primary sources of cash were net income of $83.3 million and adjustments to net income totaling $43.6 million; a decrease in trade and other receivables of $148.9 million, resulting from the decrease in sales; and a decrease in inventory of $117.1 million. Cash used by operating activities in the first nine months of 2009 included: $69.7 million for the decrease in accounts payable, resulting from the decrease in purchasing activity; $21.4 million for the decrease in accrued payroll and benefit costs, resulting from the payment of the 2008 management incentive compensation; $8.6 million for the increase in prepaid expenses and other current assets and $2.3 million for the decrease in other current and noncurrent liabilities.

Investing Activities. Net cash provided by investing activities for the first nine months of 2010 was $35.5 million, compared with $9.3 million of net cash used during the first nine months of 2009. Included in 2010 were proceeds from the sale of our 40% interest in the LADD joint venture. Proceeds included $40.0 million for our 40% interest, plus $15.0 million for the collection of a promissory note. Investing activities for the first nine months of 2010 also included payments of $14.3 million related to the acquisition of the business of Potelcom Supply, Inc. Capital expenditures were $10.1 million and $10.5 million in the first nine months of 2010 and 2009, respectively.

Financing Activities. Net cash used by financing activities for the first nine months of 2010 and 2009 was $122.9 million and $265.2 million, respectively. During the first nine months of 2010, borrowings and repayments of long-term debt of $356.0 million and $534.5 million, respectively, were made to our revolving credit facility. Borrowings and repayments of $360.0 million and $295.0 million, respectively, were applied to our Receivables Facility, and there were repayments of $1.2 million to our mortgage financing facility. During the first nine months of 2009, borrowings and repayments of long-term debt of $250.7 million and $245.2 million, respectively, were made to our revolving credit facility. Borrowings and repayments of $55.0 million and $300.0 million, respectively, were applied to our Receivables Facility, and there were repayments of $1.1 million to our mortgage financing facility.

Read the The complete Report

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