UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): May 24, 2017
WESCO International, Inc.
(Exact name of registrant as specified in its charter)
Delaware (State or other jurisdiction of incorporation) | 001-14989 (Commission File Number) | 25-1723342 (IRS Employer Identification No.) | ||
225 West Station Square Drive Suite 700 Pittsburgh, Pennsylvania (Address of principal executive offices) | 15219 (Zip Code) | |||
(412) 454-2200
(Registrant's telephone number, including area code)
Not applicable.
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). | ||||
Emerging growth company o | ||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o | ||||
Item 7.01. | Regulation FD Disclosure |
The information in this Item 7.01 is being furnished and shall not be deemed “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. The information in this Item 7.01 shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended.
On May 24, 2017, the Chairman, President and Chief Executive Officer of WESCO International, Inc. (the "Company") will present to investors at the EPG Conference. The presentation will include written communication comprised of slides and will be accessible on the Company's website. The slides from the presentation are attached hereto as Exhibit 99.1 to this report and are being furnished in accordance with Regulation FD of the Securities and Exchange Commission.
Item 9.01. | Financial Statements and Exhibits |
(d) Exhibits
The following are furnished as exhibits to this report.
99.1 Slide presentation for investors
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
May 24, 2017 | WESCO INTERNATIONAL, INC. | ||
(Date) | |||
/s/ David S. Schulz | |||
David S. Schulz | |||
Senior Vice President and Chief Financial Officer | |||
John Engel
Chairman, President, and Chief Executive Officer
WESCO International
EPG Conference – May 24, 2017
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Safe Harbor Statement
All statements made herein that are not historical facts should be considered as “forward-looking statements”
within the meaning of the Private Securities Litigation Act of 1995. Such statements involve known and
unknown risks, uncertainties and other factors that may cause actual results to differ materially. Such risks,
uncertainties and other factors include, but are not limited to: adverse economic conditions; disruptions in
operations or information technology systems; supply chain disruptions, changes in supplier strategy or loss of
key suppliers; product or other cost fluctuations; expansion of business activities; personnel turnover or labor
cost increases; tax law changes or challenges to tax matters; increase in competition; risks related to
acquisitions, including the integration of acquired businesses; exchange rate fluctuations; legal or regulatory
matters; litigation, disputes, contingencies or claims; debt levels, terms, financial market conditions or interest
rate fluctuations; goodwill or intangible asset impairment; stock market, economic or political instability; and
other factors described in detail in the Form 10-K for WESCO International, Inc. for the year ended December
31, 2016 and any subsequent filings with the Securities & Exchange Commission. The following presentation
includes a discussion of certain non-GAAP financial measures. Information required by Regulation G with
respect to such non-GAAP financial measures can be obtained via WESCO’s website, www.wesco.com.
3 ID17 Engel
WESCO:
A Leading Global Supply Chain Solutions Provider
Capital Projects
Including new construction and
retrofits, renovations and upgrades
MRO OEM
…providing world-class brands and industry-leading service capabilities
Founded
1922 in
Pittsburgh, PA
$7.3 Billion in
Revenue
One of the world’s largest distributors
of electrical, industrial, and
communications products and services
#357 of the
Fortune 500
9,000
employees
4 ID17 Engel
WESCO’s Go-to-Market Strategy
Capital
Projects
MRO
OEM
Supporting a broad range of
business models:
WESCO Characteristics
…providing full supply chain solutions to meet customers’ unique requirements
Serving Three Customer
Demand Streams
Standard
Distribution
Model
Supply Chain
Solutions
Partner
• Integrated Supply
• Global Accounts
• Kitting, assembly and
pre-fabrication
• Jobsite and field support
• Engineering and design support
• Local, branch-based distribution
500
Branches
75,000
Customers
1,000,000
SKUs
5 ID17 Engel
…that result in:
• Long-term customer relationships
and deep familiarity with their
operations
– Gaining additional business with
existing customers
• Better outcomes for our customers
– Identifying opportunities
– Selecting the best solution
– Reducing project and operating
risks
– Increasing productivity and
reducing their costs
– Simplifying their supply chains
and outsourcing
non-core activities
– Supporting their global operations
…into customized
supply chain
solutions
WESCO’s Value Proposition
Combining our
competitive
differentiators…
• Broad product portfolio
• Technical expertise and
a wide range of service
offerings
• Blue-chip customer and
supplier base
• Global footprint
• Culture of customer service
excellence, cost control, and
lean continuous improvement
…driving deeper customer relationships than traditional distributors and e-commerce providers
6 ID17 Engel
…value-added services drive customer loyalty and long-term relationships
Competitive Differentiator: Service Capabilities
2016 Sales: $7.3B
Our services and
technical
expertise drive
the majority of
our product sales
Capital Project Solutions
Supply Chain Solutions
Technical Expert Solutions
Customized Product Solutions
All Other Sales
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…enabled by investments in technical expertise and digital capabilities
Service Capabilities Examples
Supply Chain Solutions
• Integrated Supply
• Global sourcing
• Warehousing and logistics
• Storeroom management
• Vendor-managed inventory
• Transaction cost review
• Capital Project Solutions
• Engineering and design
support
• Lean construction processes
• Materials management
• Pre-fabrication and assembly
• Jobsite trailers and “WESCO
on Wheels” customized carts
Technical Expert Solutions
• Energy usage analysis
• Lighting renovation and retrofit
• Datacenter assessment
• Automation upgrades
• Safety assessment and training
• Product and application training
• Customized Product Solutions
• Kitting
• Assembly
• Prefabricated systems
• Cable management
• Process streamlining
8 ID17 Engel
WESCO Performance Objectives and Strategies
• Focus on growth markets
• Accelerate One WESCO
growth initiatives
• Differentiate through
services
• Leverage digital
capabilities
• Make accretive
acquisitions
…focused on driving profitable growth and shareholder value
Generate strong free cash
flow and allocate capital to
drive shareholder returns
Expand
margins
Drive above-market
sales growth
• Grow with strategic
suppliers
• Simplify and standardize
product offerings
• Drive pricing discipline
and tools
• Optimize distribution
network
• Tightly manage
operating costs
Performance
Objectives:
Strategies: • Invest in organic growth
and acquisition
opportunities
• Manage debt within target
range
• Repurchase shares
9
2017 Year to Date Results
• Improved business momentum driven by
a return to growth in the Industrial end
market and in Canada
• Reported sales were flat
• Organic sales were down 2% vs prior
year
− down 4% sequentially; better than
typical seasonality
• EBIT margin down 10 bps vs prior year,
reflecting normal lag effect in passing
inflation to customers
• Free cash flow of 114% of net income
• Continued growth in the Industrial end
market and in Canada
• QTD organic sales are flat vs prior year,
including the impact of Easter timing
• Sales momentum continues to improve
First Quarter Second Quarter to date
(through May 19)
…in line with our 2017 expectations and outlook
Please see our Q1 2017 earnings presentation
for non-GAAP reconciliations.
10 ID17 Engel
Long-Term Growth Algorithm
• Market growth
• 1% to 2% from market
outperformance
• 1% to 3% from
acquisitions
• ~50% operating profit
pull-through on organic
growth
− gross margin
improvement
− operating cost
leverage
• ~30% effective tax rate
Annual Expectations over the Long-Term
• Greater than 90% of
net income
…managing the business for strong EPS growth and cash generation
Sales EPS Free Cash Flow
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Invest in WESCO
• Industry leader with deep domain expertise in
electrical, industrial, construction, and utility
• Proven business model and well positioned in large, fragmented
markets
• Blue-chip customer and supplier base
• Proven acquirer and integrator in a consolidating industry
• Extensive global supply chain capability
• Operational excellence culture founded on lean principles
• Operating margin expansion results and future potential
• Strong free cash flow generation through economic cycle
…strong company with proven and effective supply chain solutions
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