WESCO INTERNATIONAL INC
For the period ended Mar 31, 2025. Filed May 1, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 1, 2025
WCC$292.68+2.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-10-31.
0000929008-24-000029
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-01.
0000929008-25-000012
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 147 previous paragraphs and 107 current paragraphs.
37 unchanged; 41 reworded; 27 added; 62 removed; 7 previous and 2 current paragraphs rearranged.
Tables are not compared: 17 previous and 11 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (27)
Current report
Electrical & Electronic Solutions
Current report
Communications & Security Solutions
Current report
Utility & Broadband Solutions
Current report
Business Highlights
Current report
Against a backdrop of increased uncertainty and volatility, our financial results for the first three months of 2025 compared to the first three months of 2024 reflect relatively flat reported sales results, with organic sales up 5.6%. We had very strong growth in the CSS data center solutions business driven by large project activity with customers, but saw continued weakness in the utility business, as expected, due to ongoing customer destocking. Financial results were impacted by higher facilities and transportation costs, partially offset by lower payroll and payroll-related expenses, all of which are inclusive of the impact of the April 1, 2024 divestiture of our Wesco Integrated Supply (“WIS”) business.
Current report
On January 2, 2025, we acquired Industrial Software Solutions (ISS), an AVEVA Select distributor that specializes in industrial automation software and solutions primarily in Western Canada, Alaska and the Pacific Northwest. This acquisition allows us to pursue strategic cross-selling opportunities, expand market presence and capabilities, and aligns with our goal of increasing service offerings to our customers.
Current report
Our increased inventories in the first quarter of 2025 and experience with successfully navigating global supply chain challenges will help address supplier price increases and the potential supply chain impact of global tariffs on our customers. We have taken several actions in response to tariffs, including but not limited to, pass through price increases, leveraging scale to provide locally sourced products, reducing imports from high tariff countries, optimizing supply chain logistics, and re-engineering our global supply chain.
Current report
Alongside our strong liquidity, we believe these strategic actions will help us navigate supply chain risks and economic volatility.
Current report
First Quarter of 2025 versus First Quarter of 2024
Current report
Cost of goods sold for the first quarter of 2025 was $4,218.1 million compared to $4,212.1 million for the first quarter of 2024, an increase of 0.1%. Cost of goods sold as a percentage of net sales was 78.9% and 78.7% for the first quarter of 2025 and 2024, respectively. The unfavorable increase of 20 basis points primarily reflects a decrease in CSS and EES gross margin partially offset by the impact of the divestiture of the WIS business, and also reflects lower supplier volume rebates and higher inventory adjustments.
Current report
Selling, general and administrative (“SG&A”) expenses for the first quarter of 2025 totaled $836.3 million versus $829.4 million for the first quarter of 2024, an increase of $6.9 million, or 0.8%.
Current report
The following table reconciles SG&A expenses to adjusted SG&A expenses, which is a non-GAAP financial measure, for the periods presented:
Current report
(3)Excise taxes on excess pension plan assets represent the excise taxes applicable to the excess pension plan assets following the final settlement of the Company's U.S. pension plan.
Current report
Income from operations was $240.9 million for the first quarter of 2025 compared to $263.0 million for the first quarter of 2024. The decrease of $22.1 million, or 8.4%, reflects a slight decline in sales, higher cost of goods sold as a percentage of net sales due to a decrease in CSS and EES gross margin partially offset by the impact of the divestiture of the WIS business, and an increase in SG&A expenses, as described above.
Current report
The following table reconciles other non-operating (income) expense to adjusted other non-operating (income) expense, which is a non-GAAP financial measure, for the periods presented:
Current report
Net income and earnings per diluted share attributable to common stockholders were $104.0 million and $2.10, respectively, for the first quarter of 2025 compared to $101.4 million and $1.95, respectively, for the first quarter of 2024. Adjusted for the non-GAAP adjustments above and the related income tax effects, net income and earnings per diluted share attributable to common stockholders were $109.6 million and $2.21, respectively, for the three months ended March 31, 2025 and $119.2 million and $2.30, respectively, for the three months ended March 31, 2024.
Current report
The decrease in adjusted earnings per diluted share primarily reflects the increase in cost of goods sold as a percentage of net sales and increase in SG&A expenses, partially offset by decreases in interest expense and adjusted other expense, all of which are discussed above. Additionally, there was a positive impact from the reduction in outstanding shares during the first quarter of 2025 as compared to the first quarter of 2024.
Current report
Adjusted EBITDA, a non-GAAP financial measure, was $310.7 million for the first quarter of 2025, compared to $340.4 million for the first quarter of 2024, a decrease of $29.7 million, or 8.7% year-over-year. The decrease primarily reflects a $6.3 million decrease in net sales, a $6.0 million increase in cost of goods sold related to increased large project sales, and a $6.9 million increase in SG&A expenses, all of which include the impact of the WIS divestiture. Included in the increase in SG&A expenses is a $6.9 million decrease in restructuring costs, which is an adjustment to calculate adjusted EBITDA.
Current report
Electrical & Electronic Solutions
Current report
EES reported net sales of $2,065.3 million for the first quarter of 2025 compared to $2,064.3 million for the first quarter of 2024, an increase of $1.0 million. EES organic sales for the first quarter of 2025 grew by 3.4%, driven by the impact of changes in price. Volume did not have a material impact on the year over year growth in EES organic sales.
Current report
EES adjusted EBITDA decreased $19.2 million, or 11.9% year-over-year. The decrease primarily reflects an increase in cost of goods sold of $13.2 million, which is inclusive of higher inventory adjustments of approximately $4.0 million. Additionally, SG&A expenses increased $7.0 million as compared to the prior year, which was primarily attributed to an increase in transportation costs of $2.5 million and an increase in operations expenses of $2.5 million.
Current report
Communications & Security Solutions
Current report
Utility & Broadband Solutions
Current report
UBS adjusted EBITDA decreased $31.1 million, or 18.4% year-over-year. The decrease primarily reflects the $302.8 million decline in net sales, as described above, partially offset by a corresponding decrease in cost of goods sold of $254.4 million, which is inclusive of lower supplier volume rebates of $3.8 million. SG&A expenses decreased $17.8 million as compared to the prior year, primarily due to lower salaries of $5.2 million, lower commissions and incentives of $4.0 million, and lower benefits of $2.6 million, all of which are primarily attributable to the divestiture of the WIS business.
Current report
(3)Excise taxes on excess pension plan assets represent the excise taxes applicable to the excess pension plan assets following the final settlement of the Company's U.S. pension plan.
Current report
(5)Excise taxes on excess pension plan assets represent the excise taxes applicable to the excess pension plan assets following the final settlement of the Company's U.S. pension plan.
Current report
Net cash provided by operating activities for the first three months of 2024 included net income of $116.1 million and non-cash adjustments to net income totaling $70.1 million, which primarily comprised depreciation and amortization, stock-based compensation expense, pension settlement costs, other operating activities, and amortization of debt issuance costs and debt discount.
Removed paragraphs (62)
Previous report
Overall Financial Performance
Previous report
Our financial results for the first nine months of 2024 compared to the first nine months of 2023 reflect a single-digit decline in sales driven by a decrease in volume partially offset by the benefits of price inflation in certain segments. Additionally, financial results were impacted by a loss on abandonment of assets, higher facilities and IT costs and higher payroll and payroll-related expenses, partially offset by the gain recognized on the divestiture of our WIS business, as well as lower professional services and consulting fees.
Previous report
Net sales for the first nine months of 2024 decreased $592.7 million, or 3.5%, over the corresponding prior year period. The decrease reflects estimated volume decline of approximately 3% driven primarily by a decrease in volume for the UBS segment, with a less significant decrease in the EES segment, partially offset by an increase in the CSS segment. Other negative factors include the decrease from the divestiture of the WIS business of 2.3% and the negative impact of fluctuations in foreign exchange rates of 0.2%. These negative factors were partially offset by the favorable impact from the number of workdays of 0.5% and by the estimated impact of changes in price of approximately 2%. Cost of goods sold as a percentage of net sales was 78.3% for the current and prior year nine-month period.
Previous report
Income from operations was $922.1 million for the first nine months of 2024 compared to $1,090.7 million for the first nine months of 2023, a decrease of $168.6 million, or 15.5%. Income from operations as a percentage of net sales was 5.7% for the current nine-month period, compared to 6.4% for the first nine months of the prior year. Income from operations for the first nine months of 2024 includes a loss on abandonment of assets of $17.8 million as a result of the write-off of certain capitalized cloud computing arrangement implementation costs relating to a third-party developed operations management software product that will no longer be utilized, digital transformation costs of $17.5 million, restructuring costs of $9.5 million, and excise taxes on excess pension plan assets of $4.8 million. Adjusted for these amounts, income from operations was 6.0% of net sales for the first nine months of 2024. For the first nine months of 2023, income from operations was 6.8% of net sales, as adjusted for digital transformation costs of $28.5 million, merger-related and integration costs of $16.9 million, restructuring costs of $15.4 million, and accelerated trademark amortization of $1.2 million. For the nine months ended September 30, 2024, income from operations declined compared to the prior year due to a decline in sales, as well as an increase in costs to operate our facilities, an increase in IT costs and higher payroll and payroll-related expenses. These negative factors were partially offset by a decrease in professional services and consulting fees.
Previous report
Cash Flow
Previous report
Operating cash flow for the first nine months of 2024 was $824.6 million. Net cash provided by operating activities included net income of $553.5 million and non-cash adjustments to net income totaling $66.3 million, which primarily comprised depreciation and amortization of $137.6 million, stock-based compensation expense of $19.6 million, a loss on abandonment of assets of $17.8 million and amortization of debt discount and debt issuance costs of $12.2 million, partially offset by a gain of $122.2 million, resulting from the divestiture of our WIS business, as described in Note 4, “Acquisitions and Divestitures”. Operating cash flow was positively impacted by net changes in assets and liabilities of $204.8 million, which primarily comprised an increase in accounts payable of $478.0 million, primarily due to the timing of payments to suppliers, as well as inventory purchases, partially offset by an increase in trade accounts receivable of $217.9 million due to the timing of receipts from customers. Operating cash flow was also negatively impacted by the payment of management incentive compensation earned in 2023, which resulted in a cash outflow of approximately $50.5 million in the first nine months of 2024, which was partially offset by the accrual of management incentive compensation earned in the current year.
Previous report
Investing activities primarily included $354.9 million in proceeds from the divestiture of the WIS business, net of cash transferred, partially offset by $70.4 million of capital expenditures mostly consisting of internal-use computer software and information technology hardware to support our digital transformation initiatives, as well as equipment and leasehold improvements to support our global network of locations, and $41.7 million paid in the aggregate to acquire the entroCIM business (“entroCIM”) and Independent Electric Supply Inc. (“IES”), net of cash acquired.
Previous report
Financing Availability
Previous report
As of September 30, 2024, we had $1.2 billion in total available borrowing capacity under our Revolving Credit Facility and $100.0 million of available borrowing capacity under our Receivables Facility. The Revolving Credit Facility and the Receivables Facility both mature in March 2027.
Previous report
Third Quarter of 2024 versus Third Quarter of 2023
Previous report
Cost of goods sold for the third quarter of 2024 was $4.3 billion compared to $4.4 billion for the third quarter of 2023, a decrease of $0.1 billion. Cost of goods sold as a percentage of net sales was 77.9% and 78.4% for the third quarter of 2024 and 2023, respectively. The favorable decrease of 50 basis points primarily reflects the impact from the divestiture of the WIS business.
Previous report
Selling, general and administrative (“SG&A”) expenses primarily include payroll and payroll-related costs, shipping and handling, travel and entertainment, facilities, utilities, information technology expenses, professional and consulting fees, credit losses, gains (losses) on the sale, disposal, or abandonment of property and equipment, as well as real estate and personal property taxes. SG&A expenses for the third quarter of 2024 totaled $831.1 million versus $796.4 million for the third quarter of 2023, an increase of $34.7 million, or 4.4%. As a percentage of net sales, SG&A expenses were 15.1% and 14.1% for the third quarter of 2024 and 2023, respectively. SG&A expenses for the third quarter of 2024 include $5.4 million of digital transformation costs and $0.5 million of restructuring costs. SG&A expenses for the third quarter of 2023 include $12.9 million of digital transformation costs, $5.6 million of restructuring costs, and $2.1 million of merger-related and integration costs. Adjusted for digital transformation costs and restructuring costs, SG&A expenses were $825.2 million, or 15.0% of net sales, for the third quarter of 2024. Adjusted for digital transformation costs, restructuring costs, and merger-related and integration costs, SG&A expenses were $775.8 million, or 13.7% of net sales, for the third quarter of 2023.
Previous report
Income from operations was $335.6 million for the third quarter of 2024 compared to $380.5 million for the third quarter of 2023. The decrease of $44.9 million, or 11.8%, reflects a decrease in sales due to volume declines and an increase in SG&A expenses as described above, partially offset by lower cost of goods sold as a percentage of net sales, as described above.
Previous report
Net income and earnings per diluted share attributable to common stockholders were $189.9 million and $3.81, respectively, for the third quarter of 2024 compared to $219.0 million and $4.20, respectively, for the third quarter of 2023. Adjusted for digital transformation costs, restructuring costs, the additional gain recognized on the divestiture of the WIS business, the pension settlement cost reduction, and the related income tax effects, net income and earnings per diluted share attributable to common stockholders were $178.1 million and $3.58, respectively, for the three months ended September 30, 2024. Adjusted for digital transformation costs, restructuring costs, merger-related and integration costs, accelerated trademark amortization expense, and the related income tax effects, net income and earnings per diluted share attributable to common stockholders were $234.4 million and $4.49, respectively, for the three months ended September 30, 2023.
Previous report
Adjusted EBITDA, a non-GAAP financial measure, was $398.1 million for the third quarter of 2024, compared to $457.0 million for the third quarter of 2023. Adjusted EBITDA decreased $58.9 million, or 12.9% year-over-year. The decrease primarily reflects the $155.0 million decrease in net sales and a $34.7 million increase in SG&A expenses, partially offset by a corresponding decrease in cost of goods sold of $145.7 million, as described above. Included in the increase in SG&A expenses was cloud computing arrangement amortization of $3.8 million, partially offset by the lack of merger-related and integration costs in the third quarter of 2024 compared to $2.1 million in the third quarter of 2023, as well as a year-over-year decrease in digital transformation and restructuring costs of $7.5 million and $5.1 million, respectively.
Previous report
EES reported net sales of $2,151.2 million for the third quarter of 2024 compared to $2,190.7 million for the third quarter of 2023, a decrease of $39.5 million, or 1.8%. Adjusting for the unfavorable impact from fluctuations in foreign exchange rates of 0.5% and the favorable impact from the number of workdays of 1.6%, EES organic sales for the third quarter of 2024 declined by 2.9%, reflecting volume declines of approximately 6%, primarily as a result of declines in the construction and industrial businesses. The decline in volume was partially offset by the impact of changes in price, which favorably impacted organic sales by approximately 3%.
Previous report
EES reported adjusted EBITDA of $186.3 million for the third quarter of 2024, or 8.7% of net sales, compared to $191.5 million for the third quarter of 2023, or 8.7% of net sales. Adjusted EBITDA decreased $5.2 million, or 2.7% year-over-year. The decrease primarily reflects the $39.5 million decline in net sales, as described above, offset by a decrease in cost of goods sold of $49.4 million, which is inclusive of higher supplier volume rebates of approximately $6.1 million. SG&A expenses increased $15.2 million as compared to the prior year, which was primarily attributed to an increase in commissions and incentives of $6.9 million, an increase in salaries of $6.1 million, and an increase in transportation costs of $4.5 million.
Previous report
UBS reported net sales of $1,383.1 million for the third quarter of 2024 compared to $1,675.7 million for the third quarter of 2023, a decrease of $292.6 million, or 17.5%. Adjusting for the decrease from the divestiture of the WIS business of 11.7%, the unfavorable impact from fluctuations in foreign exchange rates of 0.2%, and the favorable impact from the number of workdays of 1.6%, UBS organic sales for the third quarter of 2024 declined by 7.2%, reflecting volume declines of approximately 9%, primarily as a result of declines in the utility and broadband businesses. The decline in volume was partially offset by the impact of changes in price, which favorably impacted organic sales by approximately 1%.
Previous report
UBS reported adjusted EBITDA of $156.5 million for the third quarter of 2024, or 11.3% of net sales, compared to $196.4 million for the third quarter of 2023, or 11.7% of net sales. Adjusted EBITDA decreased $39.9 million, or 20.3% year-over-year. The decrease primarily reflects the $292.6 million decline in net sales, as described above, partially offset by a decrease in cost of goods sold of $251.5 million, which is inclusive of higher inventory adjustments of $3.4 million as well as lower supplier volume rebates of $6.9 million. SG&A expenses decreased $1.0 million as compared to the prior year.
Previous report
(1)Digital transformation costs include costs associated with certain digital transformation initiatives.
Previous report
(2)Restructuring costs include severance costs incurred pursuant to an ongoing restructuring plan.
Previous report
(3)Merger-related and integration costs include integration and professional fees associated with the integration of Wesco and Anixter, as well as advisory, legal, and separation costs associated with the merger between the two companies.
Previous report
(4)Accelerated trademark amortization represents additional amortization expense resulting from changes in the estimated useful lives of certain legacy trademarks that have migrated to our master brand architecture.
Previous report
(5)Reduction to pension settlement cost represents income of $2.2 million as a result of the finalization of the liabilities transferred as part of the settlement of the Company's U.S. pension plan.
Previous report
Nine Months Ended September 30, 2024 versus Nine Months Ended September 30, 2023
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Net Sales
Previous report
Net sales were $16.3 billion for the first nine months of 2024 compared to $16.9 billion for the first nine months of 2023, a decrease of 3.5%. Adjusting for the decrease from the divestiture of the WIS business of 2.3%, the unfavorable impact from fluctuations in foreign exchange rates of 0.2%, and the favorable impact from the number of workdays of 0.5%, organic sales for the first nine months of 2024 declined by 1.5%, reflecting an approximately 3% decline in volume, driven by declines in the EES and UBS segments, partially offset by a volume increase in the CSS segment, and the impact of changes in price, which favorably impacted consolidated organic sales by approximately 2%.
Previous report
Cost of Goods Sold
Previous report
Cost of goods sold for the first nine months of 2024 was $12.8 billion compared to $13.2 billion for the first nine months of 2023, a decrease of $0.4 billion. Cost of goods sold as a percentage of net sales was 78.3% for the first nine months of 2024 and 2023.
Previous report
Selling, General and Administrative Expenses
Previous report
SG&A expenses primarily include payroll and payroll-related costs, shipping and handling, travel and entertainment, facilities, utilities, information technology expenses, professional and consulting fees, credit losses, gains (losses) on the sale, disposal, or abandonment of property and equipment, as well as real estate and personal property taxes. SG&A expenses for the first nine months of 2024 totaled $2,488.9 million versus $2,445.8 million for the first nine months of 2023, an increase of $43.1 million, or 1.8%. As a percentage of net sales, SG&A expenses were 15.3% and 14.5% for the first nine months of 2024 and 2023, respectively. SG&A expenses for the first nine months of 2024 include a $17.8 million loss on abandonment of assets, $17.5 million of digital transformation costs, $9.5 million of restructuring costs, and $4.8 million of excise taxes on excess pension plan assets. SG&A expenses for first nine months of 2023 include $28.5 million of digital transformation costs, $16.9 million of merger-related and integration costs, and $15.4 million of restructuring costs. Adjusted for the loss on abandonment of assets, digital transformation costs, restructuring costs, and excise taxes on excess pension plan assets, SG&A expenses were $2,439.3 million, or 14.9% of net sales, for the first nine months of 2024. Adjusted for digital transformation costs, merger-related and integration costs, and restructuring costs, SG&A expenses were $2,385.0 million, or 14.1% of net sales, for the first nine months of 2023.
Previous report
SG&A payroll and payroll-related expenses for the first nine months of 2024 of $1,550.8 million increased by $8.5 million compared to the same period in 2023 primarily as a result of higher salaries of $6.9 million due to wage inflation, partially offset by the impact of headcount reduction actions taken at the end of the second quarter of 2023 and the impact of the divestiture of the WIS business. Additional factors include an increase to commissions and incentive compensation expenses of $18.7 million, and an increase to benefit expenses of $8.9 million. These increases were partially offset by a decrease in other payroll expenses of $16.1 million, primarily driven by a reduction in long-term incentive plan expense, as well as a decrease of $9.9 million in temporary labor expense.
Previous report
SG&A expenses not related to payroll and payroll-related costs for the first nine months of 2024 were $938.1 million, an increase of $34.6 million compared to the same period in 2023, which primarily reflects an increase of $21.6 million in other income and deductions, driven by the loss on abandonment of assets, higher costs to operate our facilities of $21.6 million, an increase of $11.2 million in IT costs, and an increase of $6.6 million in taxes. These increases were partially offset by a $16.5 million decrease in professional service and consulting fees, including decreases in merger-related and integration costs and costs related to digital transformation initiatives, and a decrease of $6.2 million in transportation costs due to the decrease in sales volume noted above.
Previous report
Income from Operations
Previous report
Income from operations was $922.1 million for the first nine months of 2024 compared to $1,090.7 million for the first nine months of 2023. The decrease of $168.6 million, or 15.5%, reflects a decrease in sales due to volume declines, and higher SG&A expenses, as described above.
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Interest Expense, net
Previous report
Net interest expense totaled $279.8 million for the first nine months of 2024 compared to $292.3 million for the first nine months of 2023. The decrease of $12.5 million, or 4.3%, primarily reflects lower borrowings, partially due to the redemption of the 2025 Notes in the second quarter of 2024, and a decrease in variable interest rates.
Previous report
Other (Income) Expense, net
Previous report
Other non-operating income totaled $99.3 million for the first nine months of 2024 compared to expense of $14.6 million for the first nine months of 2023. In the first nine months of 2024, we completed the divestiture of our WIS business and recognized a gain from the sale of $122.2 million. Additionally, in the first nine months of 2024, we recognized a $3.8 million loss on termination of a business arrangement. Due to fluctuations in the U.S. dollar against certain foreign currencies, we recognized a net foreign currency exchange loss of $18.2 million for the first nine months of 2024 compared to a net loss of $14.6 million for the first nine months of 2023. We recognized net costs of $3.2 million and net benefits of $0.9 million associated with the non-service cost components of net periodic pension cost (benefit) for the nine months ended September 30, 2024 and 2023, respectively. The year-over-year increase in net periodic pension costs was due to pension settlement cost to recognize unrealized losses previously reported as a component of other comprehensive income (loss) related to the benefit obligation of the Anixter Inc. Pension Plan as a result of the final settlement of the plan in the first quarter of 2024. Adjusted for the gain on the divestiture of our WIS business, the loss on termination of a business arrangement, and the $3.3 million pension settlement cost described above, other non-operating expense was $15.8 million for the first nine months of 2024.
Showing the first 40 of 62 passages. Open the source sections for the rest.
Reworded paragraphs (41)
Previous wording
We employ approximately 20,000 people, maintain relationships with more than 50,000 suppliers, and serve nearly 150,000 customers worldwide. With millions of products, end-to-end supply chain services, and leading digital capabilities, we provide innovative solutions to meet customer needs across commercial and industrial businesses, contractors, government agencies, educational institutions, telecommunications providers, utilities and technology companies. Our innovative value-added solutions include supply chain management, logistics and transportation, procurement, warehousing and inventory management, as well as kitting and labeling, limited assembly of products and installation enhancement. We operate nearly 800 branches, warehouses and sales offices in approximately 50 countries, providing a local presence for customers and a global network to serve multi-location businesses and global corporations.
Current wording
We employ approximately 20,000 people, maintain relationships with more than 35,000 suppliers, and serve nearly 140,000 customers worldwide. With millions of products, end-to-end supply chain services, and leading digital capabilities, Wesco provides innovative solutions to meet customer needs across commercial and industrial businesses, contractors, educational institutions, government agencies, technology companies, telecommunications providers, and utilities. Our innovative solutions include supply chain management, logistics and transportation, procurement, warehousing and inventory management, as well as kitting and labeling, limited assembly of products and installation enhancement. We operate more than 700 sites, including distribution centers, fulfillment centers, and sales offices, in approximately 50 countries, providing a local presence for customers and a global network to serve multi-location businesses and global corporations.
Previous wording
We have operating segments comprising three strategic business units consisting of Electrical & Electronic Solutions (“EES”), Communications & Security Solutions (“CSS”) and Utility & Broadband Solutions (“UBS”). These operating segments are equivalent to our reportable segments. The following is a description of each of our reportable segments and their business activities.
Current wording
We have operating segments comprising three strategic business units: Electrical & Electronic Solutions (“EES”), Communications & Security Solutions (“CSS”) and Utility & Broadband Solutions (“UBS”). These operating segments are equivalent to our reportable segments. The following is a description of each of our reportable segments and their business activities.
Previous wording
The EES segment, with approximately 6,700 employees supporting customers in more than 50 countries, supplies a broad range of products and solutions primarily to the construction, industrial, and original equipment manufacturer (“OEM”) markets. The product portfolio in this business includes a broad range of electrical equipment and supplies, automation and connected devices (the “Internet of Things” or “IoT”), security, lighting, wire and cable, safety, and maintenance, repair and operating (“MRO”) products from industry-leading manufacturing partners. The EES service portfolio includes contractor solutions to improve project execution, direct and indirect manufacturing supply chain optimization programs, lighting and renewables advisory services, and digital and automation solutions to improve safety and productivity.
Current wording
The EES segment, with approximately 6,700 employees serving customers in over 50 countries, is a North American leader, and supplies a broad range of products and solutions primarily to construction, industrial and original equipment manufacturer (“OEM”) customers. The EES product portfolio includes a broad range of electrical equipment and supplies, automation and connected devices (the “Internet of Things” or “IoT”), security, lighting, wire and cable, safety, and maintenance, repair and operating (“MRO”) products from industry-leading manufacturing partners. The EES service portfolio includes solutions to improve project execution, direct and indirect manufacturing supply chain optimization programs, lighting and renewables advisory services, and digital and automation solutions to improve safety and productivity.
Previous wording
The CSS segment, with approximately 4,300 employees supporting customers in more than 50 countries, is a global leader in the network infrastructure and security markets. CSS sells products directly to end-users or through various channels including data communications contractors, security, network, professional audio/visual and systems integrators. In addition to the core network infrastructure and security portfolio, CSS has a broad offering of safety and energy management solutions. CSS products are often combined with supply chain services to increase efficiency and productivity, including installation enhancement, project deployment, advisory and IoT and digital services.
Current wording
The CSS segment, with approximately 4,800 employees serving customers in over 50 countries, is a global leader in data center, network infrastructure and security solutions. CSS sells directly to end-users or through an extensive network of channel partners, including data communications contractors, security and network integrators, professional audio/visual integrators, and systems integrators. CSS also provides a wide range of professional A/V, safety, facilities, and energy management solutions. The full CSS product portfolio is frequently coupled with services designed to enhance efficiency and productivity across all customer segments globally. These services include data center services, advisory, installation enhancement, project deployment, supply chain solutions, and management platforms.
Previous wording
The UBS segment, with approximately 2,300 employees supporting customers primarily in the U.S. and Canada, provides products and services to investor-owned utilities, public power companies, including municipalities, as well as global service providers, wireless providers, broadband operators and the contractors that service these customers. The products sold into the utility and broadband markets include wire and cable, transformers, transmission and distribution hardware, switches, protective devices, connectors, lighting, conduit, fiber and copper cable, connectivity products, pole line hardware, racks, cabinets, safety and MRO products, and point-to-point wireless devices. The UBS segment also offers a complete set of service solutions to improve customer supply chain efficiencies. The UBS segment previously included Wesco’s integrated supply (“WIS”) business, which provided products and services to large industrial and commercial end-users to support their MRO spend. In the first quarter of 2024, Wesco entered into an agreement to sell the WIS business. The sale was completed on April 1, 2024.
Current wording
The UBS segment is a leader in North America, with approximately 2,500 employees serving customers primarily in the U.S. and Canada, and provides products and services to investor-owned utilities, public power companies, including municipalities, as well as global service providers, wireless providers, broadband operators and the contractors that service these customers. The products sold include wire and cable, transformers, transmission and distribution hardware, switches, protective devices, connectors, lighting, conduit, fiber and copper cable, connectivity products, pole line hardware, racks, cabinets, safety and MRO products, and point-to-point wireless devices. UBS also offers a complete set of service solutions to improve customer supply chain efficiencies.
Previous wording
Net Income and Earnings per Share
Current wording
We issued $800 million aggregate principal amount of 6.375% senior notes due 2033 on March 6, 2025 to support the planned redemption of our outstanding 10.625% Series A Fixed-Rate Reset Cumulative Perpetual Preferred Stock (the “Series A Preferred Stock”) in June 2025. Following the redemption of our Series A Preferred Stock, we will have no significant debt maturities until 2028 and will have strong liquidity to execute our capital allocation priorities. Therefore, we expect this redemption to create substantial net income, earnings per share, and cash flow benefit.
Previous wording
Note: Organic sales growth is a non-GAAP financial measure of sales performance. Organic sales growth is calculated by deducting the percentage impact from acquisitions and divestitures for one year following the respective transaction, fluctuations in foreign exchange rates and number of workdays from the reported percentage change in consolidated net sales. Workday impact represents the change in the number of operating days period-over-period after adjusting for weekends and public holidays in the United States; the third quarter of 2024 had one more workday compared to the third quarter of 2023.
Current wording
Note: Organic sales growth is a non-GAAP financial measure of sales performance. Organic sales growth is calculated by deducting the percentage impact from acquisitions and divestitures for one year following the respective transaction, fluctuations in foreign exchange rates and number of workdays from the reported percentage change in consolidated net sales. Workday impact represents the change in the number of operating days period-over-period after adjusting for weekends and public holidays in the United States; the first quarter of 2025 had one less workday compared to the first quarter of 2024.
Previous wording
Net sales were $5.5 billion for the third quarter of 2024 compared to $5.6 billion for the third quarter of 2023, a decrease of 2.7%. Adjusting for the decrease from the divestiture of the WIS business of 3.5%, the unfavorable impact from fluctuations in foreign exchange rates of 0.2%, and the favorable impact from the number of workdays of 1.6%, organic sales for the third quarter of 2024 declined by 0.6%, reflecting an approximately 2% decline in volume, driven by declines in the EES and UBS segments, partially offset by a volume increase in the CSS segment, and the impact of changes in price, which favorably impacted consolidated organic sales by approximately 2%.
Current wording
Net sales were $5,343.7 million for the first quarter of 2025 compared to $5,350.0 million for the first quarter of 2024, a decrease of 0.1%. Adjusting in part for the 2.8% net decrease from the divestiture of the WIS business and acquisition of Ascent, organic sales for the first quarter of 2025 grew by 5.6%. This growth is reflective of an approximately 4% increase in volume, driven by volume increases in the CSS and EES segments, partially offset by a decline in the UBS segment, and by the impact of changes in price, which favorably impacted consolidated organic sales by approximately 1%.
Previous wording
SG&A payroll and payroll-related expenses for the third quarter of 2024 of $520.1 million increased by $13.5 million compared to the same period in 2023 as a result of an increase of $9.6 million in commissions and incentives and a $9.6 million increase in benefits, partially offset by a decrease in other payroll expenses of $3.3 million, primarily driven by a reduction in long-term incentive plan expense.
Current wording
SG&A payroll and payroll-related expenses for the first quarter of 2025 of $519.4 million decreased by $4.7 million compared to the same period in 2024 primarily as a result of a decrease of $3.1 million in commissions and incentives, which include the impact of the WIS divestiture.
Previous wording
SG&A expenses not related to payroll and payroll-related costs for the third quarter of 2024 were $311.0 million, an increase of $21.2 million compared to the same period in 2023, which primarily reflects higher costs to operate our facilities of $7.0 million, higher transportation costs of $4.5 million, higher employee expenses of $3.3 million, and higher IT costs of $3.2 million.
Current wording
SG&A expenses not related to payroll and payroll-related costs for the first quarter of 2025 were $316.9 million, an increase of $11.6 million compared to the same period in 2024, which primarily reflects higher costs to operate our facilities of $6.9 million and higher transportation costs of $6.9 million.
Previous wording
Net interest expense totaled $86.5 million for the third quarter of 2024 compared to $98.5 million for the third quarter of 2023. The decrease of $12.0 million, or 12.1%, primarily reflects lower borrowings and a decrease in variable interest rates.
Current wording
Net interest expense totaled $86.3 million for the first quarter of 2025 compared to $94.4 million for the first quarter of 2024. The decrease of $8.1 million, or 8.6%, primarily reflects lower borrowings and lower interest rates.
Previous wording
Other non-operating income totaled $24.9 million for the third quarter of 2024 compared to expense of $3.7 million for the third quarter of 2023. During the third quarter, we finalized the divestiture of our WIS business and recognized an additional gain from the sale of $19.3 million. Due to fluctuations in the U.S. dollar against certain foreign currencies, we recognized a net foreign currency exchange gain of $2.5 million for the third quarter of 2024 compared to a net loss of $1.4 million for the third quarter of 2023. We recognized net benefits of $2.4 million and $0.2 million associated with the non-service cost components of net periodic pension cost (benefit) for the three months ended September 30, 2024 and 2023, respectively. The non-service cost components of net periodic pension benefit for the third quarter of 2024 includes income of $2.2 million as a result of the finalization of the liabilities transferred as part of the settlement of the Anixter Inc. Pension Plan. Adjusted for the gain on the divestiture of our WIS business as well as the pension settlement cost reduction, other non-operating income was $3.4 million for the third quarter of 2024.
Current wording
Other non-operating expense totaled $0.2 million for the first quarter of 2025 compared to $21.6 million for the first quarter of 2024. Due to fluctuations in the U.S. dollar against certain foreign currencies, we recognized a net foreign currency exchange loss of $1.1 million for the first quarter of 2025 compared to a net loss of $17.4 million for the first quarter of 2024. We recognized net benefits of $0.8 million and net costs of $5.9 million associated with the non-service cost components of net periodic pension (benefit) cost for the three months ended March 31, 2025 and 2024, respectively.
Previous wording
(7)Loss on termination of business arrangement represents the loss recognized as a result of management's decision to terminate a business arrangement with a third party.
Current wording
(1)Loss on termination of business arrangement represents the loss recognized as a result of management's decision to terminate a business arrangement with a third party.
Previous wording
(8)Pension settlement cost represents expense related to the settlement of the Company's U.S. pension plan.
Current wording
(2)Pension settlement cost represents expense related to the final settlement of the Company's U.S. pension plan.
Previous wording
The provision for income taxes was $69.3 million for the third quarter of 2024 compared to $44.3 million for the corresponding quarter of the prior year, resulting in effective tax rates of 25.3% and 15.9%, respectively. The higher effective tax rate for the third quarter of 2024 is due to lower discrete income tax benefits resulting from the exercise and vesting of stock-based awards as compared to the prior year. The corresponding quarter of the prior year also reflected discrete income tax benefits relating to the reversal of the valuation allowance against Brazilian deferred tax assets and 2022 U.S. federal return-to-provision adjustments.
Current wording
The provision for income taxes was $36.1 million for the first quarter of 2025 compared to $30.9 million for the corresponding quarter of the prior year, resulting in effective tax rates of 23.4% and 21.0%, respectively. The higher effective tax rate for the first quarter of 2025 is due to lower discrete income tax benefits resulting from the exercise and vesting of stock-based awards as compared to the prior year.
Previous wording
The following is a discussion of the financial results of our operating segments comprising three strategic business units consisting of EES, CSS and UBS for the three months ended September 30, 2024. As further described below and in Note 14, “Business Segments” of our Notes to the unaudited Condensed Consolidated Financial Statements, the performance of our operating segments is based on net sales, adjusted EBITDA, and adjusted EBITDA margin percentage. Adjusted EBITDA and adjusted EBITDA margin percentage are non-GAAP financial measures.
Current wording
The following is a discussion of the financial results of our operating segments comprising three strategic business units consisting of EES, CSS and UBS for the three months ended March 31, 2025. As further described below and in Note 14, “Business Segments” of our Notes to the unaudited Condensed Consolidated Financial Statements, the Chief Operating Decision Maker (the “CODM”) allocates resources and evaluates the performance of the Company’s reportable segments based on adjusted EBITDA, which is the Company’s measure of segment profit or loss. Adjusted EBITDA and adjusted EBITDA margin percentage are non-GAAP financial measures. As previously described in Note 2, “Accounting Policies,” the reportable segment information for the three months ended March 31, 2024 for the EES and CSS reportable segments has been recast to conform to the current year presentation.
Previous wording
CSS reported net sales of $1,955.1 million for the third quarter of 2024 compared to $1,778.0 million for the third quarter of 2023, an increase of $177.1 million, or 10.0%. Adjusting for the unfavorable impact from fluctuations in foreign exchange rates of 0.1% and the favorable impact from the number of workdays of 1.6%, CSS organic sales for the third quarter of 2024 grew by 8.5%, primarily reflecting volume growth in the data center solutions and security solutions businesses. Changes in price did not have a material impact on the year-over-year growth in CSS organic sales.
Current wording
CSS reported net sales of $2,000.3 million for the first quarter of 2025 compared to $1,704.8 million for the first quarter of 2024, an increase of $295.5 million, or 17.3%, which is inclusive of a favorable impact from the acquisition of Ascent of 2.3%. CSS organic sales for the first quarter of 2025 grew by 18.1%, primarily reflecting volume growth in the data center solutions business. Changes in price did not have a material impact on the year-over-year growth in CSS organic sales.
Previous wording
CSS reported adjusted EBITDA of $175.2 million for the third quarter of 2024, or 9.0% of net sales, compared to $175.5 million for the third quarter of 2023, or 9.9% of net sales. Adjusted EBITDA decreased $0.3 million, or 0.2% year-over-year. The decrease primarily reflects an increase in cost of goods sold of $155.2 million and an increase in SG&A expenses of $22.7 million, partially offset by the $177.1 million increase in net sales, as described above. The increase in SG&A expenses is primarily attributed to increased salaries of $6.4 million, increased commissions and incentives of $5.5 million, driven by higher sales volume, a $2.5 million increase in transportation costs consistent with higher sales, and higher costs to operate our facilities of $2.1 million, which includes an increase in rents.
Current wording
CSS adjusted EBITDA increased $27.3 million, or 20.8% year-over-year. The increase primarily reflects a $295.5 million increase in net sales, as described above, partially offset by a corresponding increase in cost of goods sold of $247.2 million, and an increase in SG&A expenses of $20.7 million. The increase in SG&A expenses is primarily attributed to a $6.9 million increase in transportation costs consistent with higher sales, increased salaries of $4.0 million and increased commissions and incentives of $3.5 million.
Previous wording
UBS reported net sales of $4,404.9 million for the first nine months of 2024 compared to $5,024.8 million for the first nine months of 2023, a decrease of $619.9 million, or 12.3%. Adjusting for the decrease from the divestiture of the WIS business of 7.9% and the favorable impact from the number of workdays of 0.5%, UBS organic sales for the first nine months of 2024 declined by 4.9%, reflecting volume declines of approximately 7%, primarily as a result of declines in the utility and broadband businesses. The decline in volume was partially offset by the impact of changes in price, which favorably impacted organic sales by approximately 2%.
Current wording
UBS reported net sales of $1,278.1 million for the first quarter of 2025 compared to $1,580.9 million for the first quarter of 2024, a decrease of $302.8 million, or 19.2%, which is inclusive of an unfavorable impact from the divestiture of the WIS business of 12.2%. UBS organic sales for the first quarter of 2025 declined by 4.9%, reflecting volume declines, primarily as a result of ongoing customer destocking. Changes in price did not have a material impact on the year-over-year decline in UBS organic sales.
Previous wording
Note: Adjusted EBITDA and Adjusted EBITDA margin % are non-GAAP financial measures that provide indicators of the Company's performance and its ability to meet debt service requirements. For the three months ended September 30, 2024, Adjusted EBITDA is defined as earnings before interest, taxes, depreciation and amortization before other non-operating expenses (income), non-cash stock-based compensation expense, digital transformation costs, cloud computing arrangement amortization, and restructuring costs. For the three months ended September 30, 2023, Adjusted EBITDA is defined as earnings before interest, taxes, depreciation and amortization before other non-operating expenses (income), non-cash stock-based compensation expense, digital transformation costs, restructuring costs, and merger-related and integration costs. Adjusted EBITDA margin % is calculated by dividing Adjusted EBITDA by net sales.
Current wording
Note: Adjusted EBITDA and Adjusted EBITDA margin % are non-GAAP financial measures that provide indicators of the Company's performance and its ability to meet debt service requirements. Adjusted EBITDA margin % is calculated by dividing Adjusted EBITDA by net sales.
Previous wording
(6)The adjustments to income from operations and other (income) expense, net have been tax effected at rates of approximately 24% and 27% for the three months ended September 30, 2024 and 2023, respectively.
Current wording
(6)The adjustments to income from operations and other (income) expense, net have been tax effected at rates of 26.4% and 27.0% for the three months ended March 31, 2025 and 2024, respectively.
Previous wording
Note: For the nine months ended September 30, 2024, SG&A expenses, income from operations, other non-operating (income) expense, the provision for income taxes and earnings per diluted share have been adjusted to exclude the loss on abandonment of assets, digital transformation costs, restructuring costs, excise taxes on excess pension plan assets, the gain recognized on the divestiture of the WIS business, the loss on termination of business arrangement, pension settlement cost, and the related income tax effects. For the nine months ended September 30, 2023, SG&A expenses, income from operations, the provision for income taxes and earnings per diluted share have been adjusted to exclude digital transformation costs, merger-related and integration costs, restructuring costs, accelerated trademark amortization expense, and the related income tax effects. These non-GAAP financial measures provide a better understanding of our financial results on a comparable basis.
Current wording
Note: For the three months ended March 31, 2025, SG&A expenses, income from operations, other non-operating (income) expense, the provision for income taxes and earnings per diluted share have been adjusted to exclude digital transformation costs, restructuring costs, the loss on termination of business arrangement, and the related income tax effects. For the three months ended March 31, 2024, SG&A expenses, income from operations, other non-operating expense, the provision for income taxes and earnings per diluted share have been adjusted to exclude digital transformation costs, restructuring costs, pension settlement cost and excise taxes on excess pension plan assets related to the final settlement of the Anixter Inc. Pension Plan, and the related income tax effects. These non-GAAP financial measures provide a better understanding of our financial results on a comparable basis.
Previous wording
Our liquidity needs generally arise from fluctuations in our working capital requirements, information technology investments, capital expenditures, acquisitions, the payment of dividends, and debt service obligations. As of September 30, 2024, we had approximately $1.2 billion in available borrowing capacity under our Revolving Credit Facility, after giving effect to outstanding letters of credit and certain borrowings under our international lines of credit, and $100.0 million of available borrowing capacity under our Receivables Facility, which combined with available cash of $370.0 million, provided liquidity of approximately $1.7 billion. Cash included in our determination of liquidity represents cash in certain deposit and interest-bearing investment accounts held in the United States and Canada. We monitor the depository institutions that hold our cash and cash equivalents on a regular basis, and we believe that we have placed our deposits with creditworthy financial institutions.
Current wording
Our liquidity needs generally arise from fluctuations in our working capital requirements, information technology investments, capital expenditures, acquisitions, the payment of dividends, and debt service obligations. As of March 31, 2025, we had approximately $1.7 billion in available borrowing capacity under our Revolving Credit Facility, after giving effect to outstanding letters of credit and certain borrowings under our international lines of credit, and $275.0 million of available borrowing capacity under our Receivables Facility, which combined with available cash of $404.8 million, provided liquidity of approximately $2.4 billion. Cash included in our determination of liquidity represents cash in certain deposit and interest-bearing investment accounts held in the United States and Canada. We monitor the depository institutions that hold our cash and cash equivalents on a regular basis, and we believe that we have placed our deposits with creditworthy financial institutions.
Previous wording
As described in Note 9, “Debt” of our Notes to the unaudited Condensed Consolidated Financial Statements, on March 7, 2024, Wesco Distribution issued $900 million aggregate principal amount of 2029 Notes and $850 million aggregate principal amount of 2032 Notes. We used the net proceeds from the issuance of the 2029 and 2032 Notes to redeem the $1,500 million aggregate principal amount of 2025 Notes on June 17, 2024. Prior to redeeming the 2025 Notes, we used the net proceeds from the 2029 and 2032 Notes temporarily to repay a portion of the amounts outstanding under our Receivables Facility and repaid all of the outstanding borrowings under our Revolving Credit Facility. We subsequently redrew under our Receivables Facility and our Revolving Credit Facility an aggregate amount sufficient to redeem the 2025 Notes.
Current wording
As described in Note 9, “Debt” of our Notes to the unaudited Condensed Consolidated Financial Statements, on March 6, 2025, Wesco Distribution issued $800 million aggregate principal amount of 6.375% senior notes due 2033 (the “2033 Notes”). We intend to use the net proceeds from the issuance of the 2033 Notes to redeem all of the Company’s outstanding Series A Preferred Stock and all of the related depositary shares representing fractional interests in the Series A Preferred Stock in June 2025, and repay a portion of the amounts outstanding under the Revolving Credit Facility. Prior to redeeming the Series A Preferred Stock, we used the net proceeds to temporarily repay all of the outstanding borrowings under our Revolving Credit Facility and to repay a portion of the amounts outstanding under our Receivables Facility. We intend to subsequently redraw under the Receivables Facility and/or the Revolving Credit Facility in an aggregate amount sufficient to redeem the Series A Preferred Stock.
Previous wording
We regularly review our mix of fixed versus variable rate debt, and we may, from time to time, issue or retire borrowings and/or refinance existing debt in an effort to mitigate the impact of interest rate and foreign exchange rate fluctuations, and to maintain a cost-effective capital structure consistent with our anticipated capital requirements. Economic conditions contributed to increases in interest rates during 2023; however, interest rates have remained stable in 2024, and the Federal Reserve reduced its benchmark interest rate by 50 basis points at the end of the third quarter. Future interest rate changes would raise or lower the rates we pay on our variable rate debt and would contribute to fluctuations in interest expense versus prior periods.
Current wording
We regularly review our mix of fixed versus variable rate debt, and we may, from time to time, issue or retire borrowings and/or refinance existing debt in an effort to mitigate the impact of interest rate and foreign exchange rate fluctuations, and to maintain a cost-effective capital structure consistent with our anticipated capital requirements. Interest rates remained stable in the first three months of 2025 after the Federal Reserve reduced its benchmark interest rate by a total of 100 basis points in the second half of 2024. Future interest rate changes would raise or lower the rates we pay on our variable rate debt and would contribute to fluctuations in interest expense versus prior periods.
Previous wording
As of September 30, 2024, approximately 61% of our debt portfolio consisted of fixed rate debt. We believe our capital structure has an appropriate mix of fixed versus variable rate debt and secured versus unsecured instruments.
Current wording
As of March 31, 2025, approximately 74% of our debt portfolio consisted of fixed rate debt. As noted above, we used the net proceeds from our issuance of the 2033 Notes to temporarily repay all of the outstanding borrowings under our Revolving Credit Facility and a portion of the amounts outstanding under our Receivables Facility, which are both variable rate facilities. We intend to subsequently withdraw under our Receivables Facility and/or our Revolving Credit Facility in an aggregate amount sufficient to redeem the Series A Preferred Stock. We believe our capital structure has an appropriate mix of fixed versus variable rate debt and secured versus unsecured instruments.
Previous wording
Over the next several quarters, we expect that our excess liquidity will be directed primarily at returning capital to shareholders through our existing share repurchase authorization, the payment of dividends, debt reduction, digital transformation initiatives, potential acquisitions and related integration activities, and/or the potential redemption of Series A Preferred Stock in 2025. We expect to maintain sufficient liquidity through our credit facilities and cash balances. We believe cash provided by operations and financing activities will be adequate to cover our operational and business needs for at least the next twelve months.
Current wording
Over the next several quarters, we expect that our excess liquidity will be directed primarily at share repurchases, the payment of dividends, debt reduction, digital transformation initiatives, potential acquisitions and related integration activities, and the redemption of Series A Preferred Stock. We expect to maintain sufficient liquidity through our credit facilities and cash balances. We continue to monitor the sufficiency of our liquidity given the potential impact of current economic conditions and uncertainty, including tariffs, interest rates, and inflation. While we did not face significant challenges with our sources or uses of cash in the first quarter of 2025, future market disruptions could occur which could potentially affect our liquidity. We believe cash provided by operations and financing activities will be adequate to cover our operational and business needs for at least the next twelve months.
Previous wording
We also measure our ability to meet our debt obligations based on our financial leverage ratio, which was 2.9x as of September 30, 2024 and 2.8x as of December 31, 2023.
Current wording
We also measure our ability to meet our debt obligations based on our financial leverage ratio, which was 3.1x as of March 31, 2025 and 2.9x as of December 31, 2024.
Previous wording
(6)Cloud computing arrangement amortization consists of expense recognized in selling, general and administrative expenses for capitalized implementation costs for cloud computing arrangements to support our digital transformation initiatives.
Current wording
(3)Cloud computing arrangement amortization consists of expense recognized in selling, general and administrative expenses for capitalized implementation costs for cloud computing arrangements to support our digital transformation initiatives.
Previous wording
(1)Loss on abandonment of assets represents the write-off of certain capitalized cloud computing arrangement implementation costs relating to a third-party developed operations management software product in favor of an application with functionality that better suits the Company’s operations.
Current wording
(4)Loss on abandonment of assets represents the write-off of certain capitalized cloud computing arrangement implementation costs relating to a third-party developed operations management software product in favor of an application with functionality that better suits the Company’s operations.
Previous wording
(7)Debt is presented in the condensed consolidated balance sheets net of debt discount and debt issuance costs, and includes adjustments to record the long-term debt assumed in the merger with Anixter at its acquisition date fair value.
Current wording
(6)Debt is presented in the condensed consolidated balance sheets net of debt issuance and debt discount costs, and includes adjustments to record the long-term debt assumed in the merger with Anixter at its acquisition date fair value.
Previous wording
Note: Financial leverage ratio is a non-GAAP measure of the use of debt. Financial leverage ratio is calculated by dividing total debt, excluding debt discount, debt issuance costs and fair value adjustments, net of cash, by adjusted EBITDA. EBITDA is defined as the trailing twelve months earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA is defined as the trailing twelve months EBITDA before other non-operating expenses (income), non-cash stock-based compensation expense, merger-related and integration costs, restructuring costs, digital transformation costs, excise taxes on excess pension plan assets related to the final settlement of the Anixter Inc. Pension Plan, loss on abandonment of assets, and cloud computing arrangement amortization.
Current wording
Note: Financial leverage ratio is a non-GAAP measure of the use of debt. Financial leverage ratio is calculated by dividing total debt, excluding debt issuance costs, debt discount and fair value adjustments, net of cash, by adjusted EBITDA. EBITDA is defined as the trailing twelve months earnings before interest, taxes, depreciation and amortization.
Previous wording
We finance our operating and investing needs primarily with borrowings under our Revolving Credit Facility and Receivables Facility, as well as uncommitted lines of credit entered into by certain of our foreign subsidiaries to support local operations, some of which are overdraft facilities. The Revolving Credit Facility has a borrowing limit of $1,725 million and the purchase limit under the Receivables Facility is $1,550 million. As of September 30, 2024, we had $485.0 million outstanding on the Revolving Credit Facility and $1,450.0 million outstanding under the Receivables Facility. The maximum borrowing limits of our international lines of credit vary by facility and range between $0.6 million and $10.0 million. Our international lines of credit generally are renewable on an annual basis and certain facilities are fully and unconditionally guaranteed by Wesco Distribution. Accordingly, certain borrowings under these lines directly reduce availability under our Revolving Credit Facility. As of September 30, 2024, we had $0.8 million outstanding under our international lines of credit.
Current wording
We finance our operating and investing needs primarily with borrowings under our Revolving Credit Facility and Receivables Facility, as well as uncommitted lines of credit entered into by certain of our foreign subsidiaries to support local operations, some of which are overdraft facilities. The Revolving Credit Facility has a borrowing limit of $1,725 million and the purchase limit under the Receivables Facility is $1,550 million. As of March 31, 2025, we had no balance outstanding on the Revolving Credit Facility and $1,275.0 million outstanding under the Receivables Facility. The maximum borrowing limits of our international lines of credit vary by facility and range between $0.6 million and $9.5 million. Our international lines of credit generally are renewable on an annual basis and certain facilities are fully and unconditionally guaranteed by Wesco Distribution. Accordingly, certain borrowings under these lines directly reduce availability under our Revolving Credit Facility. As of March 31, 2025, we had $0.4 million outstanding under our international lines of credit.
Previous wording
An analysis of cash flow for the first nine months of 2024 and 2023 follows:
Current wording
An analysis of cash flow for the first three months of 2025 and 2024 follows:
Previous wording
Net cash provided by operating activities for the first nine months of 2024 totaled $824.6 million, compared to $423.9 million for the first nine months of 2023. Net cash provided by operating activities for the first nine months of 2024 included net income of $553.5 million and non-cash adjustments to net income totaling $66.3 million, which primarily comprised depreciation and amortization of $137.6 million, stock-based compensation expense of $19.6 million, a loss on abandonment of assets of $17.8 million, amortization of debt discount and debt issuance costs of $12.2 million, a loss recognized on the extinguishment of debt of $6.8 million, and pension settlement cost of $3.3 million, partially offset by a gain of $122.2 million, resulting from the divestiture of our WIS business, as described in Note 4, “Acquisitions and Divestitures”.
Current wording
Net cash provided by operating activities for the first three months of 2025 totaled $28.0 million, compared to $746.3 million for the first three months of 2024. Net cash provided by operating activities for the first three months of 2025 included net income of $118.3 million and non-cash adjustments to net income totaling $66.5 million, which primarily comprised depreciation and amortization, stock-based compensation expense, and amortization of debt issuance costs and debt discount.
Previous wording
Other sources of cash in the first nine months of 2024 included an increase in accounts payable of $478.0 million primarily due the timing of inventory purchases and payment to suppliers, an increase in other current and noncurrent liabilities of $103.2 million, primarily due to increases in accrued interest payable, deferred revenue, federal income taxes payable and operating lease liabilities, and a decrease in other accounts receivable of $28.1 million. Additionally, an increase in other tax receivables and an increase in supplier price agreement receivables contributed to net operating cash flow. Primary uses of cash in the first nine months of 2024 included an increase in trade accounts receivable of $217.9 million due to the timing of receipts from customers, an increase in other current and noncurrent assets of $127.7 million primarily due to increases in capitalized costs associated with developing cloud computing arrangements, supplier prepayments and federal income taxes receivable, as well as an increase in inventories of $85.0 million.
Current wording
Other sources of cash in the first three months of 2025 included an increase in accounts payable of $343.8 million primarily due to the increase in inventory as well as the timing of purchases and payment to suppliers, and a decrease in other accounts receivable of $65.1 million, primarily due to the collection of supplier volume rebates earned in 2024 in excess of current year accruals. Primary uses of cash in the first three months of 2025 included an increase in inventories of $227.4 million, primarily due to an increase in volume related to ongoing projects, an increase in trade accounts receivable of $188.7 million due to significant growth in sales in the CSS segment, as well as the timing of receipts from customers. Uses of cash in the first three months of 2025 also included a decrease in accrued payroll and benefit costs of $77.1 million primarily due to the payment of management incentive compensation earned in 2024 and an increase in accrued sales incentives, an increase in other current and noncurrent assets of $35.6 million primarily due to increases in capitalized costs associated with developing cloud computing arrangements, and a decrease in other current and noncurrent liabilities of $36.9 million, primarily due to decreases in accrued income taxes payable, related to the purchase of transferable tax credits.
Previous wording
Other sources of cash in the first nine months of 2023 included an increase in other current and noncurrent liabilities of $46.8 million and a decrease in other accounts receivable of $18.7 million due primarily to the collection of supplier volume rebates earned in 2022 in excess of income accrued during the first nine months of 2023, partially offset by an increase in value-added tax receivables. Primary uses of cash in the first nine months of 2023 included an increase in trade accounts receivable of $133.4 million due to the timing of receipts from customers, a decrease in accrued payroll and benefit costs of $120.9 million resulting primarily from management incentive compensation and a decrease in accounts payable of $86.5 million due to the timing of payments to suppliers. Net operating cash flow was also negatively impacted by an increase in inventories of $62.7 million. Inventories grew at a slower rate than sales, as supply chain lead times normalized. Uses of cash in the first nine months of 2023 also included an increase in other current and noncurrent assets of $51.8 million primarily due to an increase in capitalized costs associated with developing cloud computing arrangements.
Current wording
Other sources of cash in the first three months of 2024 included an increase in accounts payable of $620.9 million primarily due to the impact of a system conversion, the timing of inventory purchases, and a bank holiday at the end of the quarter that delayed payments, a decrease in other accounts receivable of $78.9 million primarily due to the collection of supplier volume rebates earned in 2023 in excess of income accrued during the current period, and an increase in other current and noncurrent liabilities of $75.0 million, due to increases in accrued interest payable and deferred revenue, partially offset by a decrease in federal taxes payable. Primary uses of cash in the first three months of 2024 included an increase in trade accounts receivable of $116.1 million due to the timing of receipts from customers, an increase in other current and noncurrent assets of $60.1 million primarily due to excess pension plan assets, an increase in supplier prepayments, capitalized costs associated with developing cloud computing arrangements, and a decrease in accrued payroll and benefit costs of $44.0 million resulting primarily from the payment of management incentive compensation earned in 2023.
Previous wording
Net cash provided by investing activities for the first nine months of 2024 was $249.7 million compared to $61.2 million used in investing activities during the first nine months of 2023. Included in the first nine months of 2024 were $354.9 million in proceeds from the divestiture of the WIS business, net of cash transferred, partially offset by $41.7 million paid to acquire entroCIM and IES, net of cash acquired, as well as capital expenditures of $70.4 million compared to $63.6 million for the nine month period ended September 30, 2023. Capital expenditures in the first nine months of 2024 primarily comprised internal-use computer software and information technology hardware to support our digital transformation initiatives, as well as equipment and leasehold improvements to support our global network of branches, warehouses and sales offices.
Current wording
Net cash used in investing activities for the first three months of 2025 was $54.4 million compared to $16.5 million used in the first three months of 2024. Included in the first three months of 2025 was $35.2 million paid to acquire Industrial Software Solutions, net of cash acquired. Capital expenditures were $20.4 million for the first three months of 2025 and 2024, which primarily comprised leasehold improvements to support our global network of locations, internal-use computer software and information technology hardware to support our digital transformation initiatives, as well as machinery and equipment.
Previous wording
Net cash used in financing activities for the first nine months of 2024 was $874.3 million, compared to $253.4 million during the first nine months of 2023. During the first nine months of 2024, financing activities primarily comprised the redemption of our $1,500.0 million aggregate principal amount of 2025 Notes, proceeds of $900.0 million and $850.0 million related to the issuance of the 2029 Notes and 2032 Notes, respectively, net repayments of $468.0 million related to our Revolving Credit Facility, net repayments of $100.0 million related to our Receivables Facility, and payment of total debt issuance costs of $26.6 million related to the issuance of the 2029 and 2032 Notes and amendments to the Revolving Credit Facility and Receivables Facility. The first nine months of 2024 also included $375.0 million of common stock repurchases, $61.4 million and $43.1 million of dividends paid to holders of our common stock and Series A Preferred Stock, respectively, and $26.2 million of payments for taxes related to the exercise and vesting of stock-based awards.
Current wording
Net cash provided by financing activities for the first three months of 2025 was $2.3 million, compared to net cash used in financing activities of $254.5 million during the first three months of 2024. During the first three months of 2025, financing activities primarily comprised the proceeds of $800.0 million related to the issuance of the 2033 Notes, net repayments of $525.0 million related to our Revolving Credit Facility, net repayments of $175.0 million related to our Receivables Facility, and payment of total debt issuance costs of $14.0 million related to the issuance of the 2033 Notes and amendments to the Revolving Credit Facility and Receivables Facility. The first three months of 2025 also included $25.0 million of common stock repurchases, $22.1 million and $14.4 million of dividends paid to holders of our common stock and Series A Preferred Stock, respectively, and $18.0 million of payments for taxes related to the exercise and vesting of stock-based awards.
Previous wording
Financing activities primarily comprised the redemption of our $1,500.0 million aggregate principal amount of 7.125% Senior Notes due 2025 (the “2025 Notes”), and proceeds of $900.0 million and $850.0 million related to the issuance of our 6.375% Senior Notes due 2029 (the “2029 Notes”) and our 6.625% Senior Notes due 2032 (the “2032 Notes” and, together with the 2029 Notes, the “2029 and 2032 Notes”), respectively. Additionally, financing activities comprised net repayments of $468.0 million related to our revolving credit facility (the “Revolving Credit Facility”), net repayments of $100.0 million related to our accounts receivable securitization facility (the “Receivables Facility”), and payment of total debt issuance costs of $26.6 million related to the issuance of the 2029 and 2032 Notes and amendments to the Revolving Credit Facility and Receivables Facility. The first nine months of 2024 also included $375.0 million of common stock repurchases, $61.4 million and $43.1 million of dividends paid to holders of our common stock and Series A Preferred Stock, respectively, and $26.2 million of payments for taxes related to the exercise and vesting of stock-based awards.
Current wording
During the first three months of 2024, financing activities primarily comprised proceeds of $900.0 million and $850.0 million related to the issuance of the 2029 Notes and 2032 Notes, respectively, net repayments of $953.0 million related to our Revolving Credit Facility, net repayments of $912.0 million related to our Receivables Facility, and payment of total debt issuance costs of $26.6 million related to the issuance of the 2029 and 2032 Notes and amendments to the Revolving Credit Facility and Receivables Facility. The first three months of 2024 also included $50.0 million of common stock repurchases, $25.2 million of payments for taxes related to the exercise and vesting of stock-based awards, and $20.9 million and $14.4 million of dividends paid to holders of our common stock and Series A Preferred Stock, respectively.
Showing the first 40 of 41 pairs. Open the source sections for the rest.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
(4)Loss on termination of business arrangement represents the loss recognized as a result of management's decision to terminate a business arrangement with a third party.
Current report — wording carried from elsewhere
(5)Pension settlement cost represents expense related to the final settlement of the Company's U.S. pension plan.
Rearranged previous paragraphs (7)
Previous report — wording carried elsewhere
Note: For the three months ended September 30, 2024, SG&A expenses, income from operations, other non-operating (income) expense, the provision for income taxes and earnings per diluted share have been adjusted to exclude digital transformation costs, restructuring costs, the gain recognized on the divestiture of the WIS business, the reduction to pension settlement cost, and the related income tax effects. For the three months ended September 30, 2023, SG&A expenses, income from operations, the provision for income taxes and earnings per diluted share have been adjusted to exclude digital transformation costs, restructuring costs, merger-related and integration costs, accelerated trademark amortization expense, and the related income tax effects. These non-GAAP financial measures provide a better understanding of our financial results on a comparable basis.
Previous report — wording carried elsewhere
The following table sets forth net sales and organic sales growth for the periods presented:
Previous report — wording carried elsewhere
Note: Organic sales growth is a non-GAAP financial measure of sales performance. Organic sales growth is calculated by deducting the percentage impact from acquisitions and divestitures for one year following the respective transaction, fluctuations in foreign exchange rates and number of workdays from the reported percentage change in consolidated net sales. Workday impact represents the change in the number of operating days period-over-period after adjusting for weekends and public holidays in the United States; the first nine months of 2024 had one more workday compared to the first nine months of 2023.
Previous report — wording carried elsewhere
The following tables reconcile net income attributable to common stockholders to adjusted EBITDA and adjusted EBITDA margin % by segment, which are non-GAAP financial measures, for the periods presented:
Previous report — wording carried elsewhere
The following tables reconcile selling, general and administrative expenses, income from operations, other non-operating (income) expense, provision for income taxes and earnings per diluted share to adjusted selling, general and administrative expenses, adjusted income from operations, adjusted other non-operating (income) expense, adjusted provision for income taxes and adjusted earnings per diluted share, which are non-GAAP financial measures, for the periods presented:
Previous report — wording carried elsewhere
(9)The adjustments to income from operations and other (income) expense, net have been tax effected at a rate of approximately 27% for the nine months ended September 30, 2024 and 2023.
Previous report — wording carried elsewhere
(5)Loss on abandonment of assets represents the write-off of certain capitalized cloud computing arrangement implementation costs relating to a third-party developed operations management software product in favor of an application with functionality that better suits the Company’s operations.