WESCO International(WCC) - 2025 Q1 - Quarterly Report

Financial Performance - Net sales for Q1 2025 were $5,343.7 million, a slight decrease of 0.1% compared to$ 5,350.0 million in Q1 2024, with organic sales growth of 5.6%[112] - Income from operations decreased by 8.4% to $240.9 million in Q1 2025 compared to$ 263.0 million in Q1 2024[118] - Net income attributable to common stockholders was $104.0 million in Q1 2025, with earnings per diluted share of$ 2.10, compared to $101.4 million and$ 1.95 in Q1 2024[123] - Adjusted earnings per diluted share for Q1 2025 were $2.21, down from$ 2.30 in Q1 2024, a decrease of 3.9%[139] Expenses and Costs - The cost of goods sold increased by 0.1% to $4,218.1 million in Q1 2025, resulting in a cost of goods sold as a percentage of net sales of 78.9%[114] - Selling, general and administrative (SG&A) expenses rose to$ 836.3 million in Q1 2025, an increase of 0.8% from $829.4 million in Q1 2024[115] - Adjusted selling, general and administrative (SG&A) expenses for Q1 2025 were$ 829.0 million, up from $810.5 million in Q1 2024, reflecting a 2.8% increase[137] - Adjusted EBITDA for Q1 2025 was$ 310.7 million, down $29.7 million or 8.7% year-over-year, primarily due to a$ 6.3 million decrease in net sales and a $6.9 million increase in SG&A expenses[125] Segment Performance - EES reported net sales of$ 2,065.3 million for Q1 2025, a slight increase of $1.0 million from Q1 2024, with organic sales growth of 3.4% driven by price changes[127] - CSS net sales increased by$ 295.5 million or 17.3% year-over-year to $2,000.3 million, with organic sales growth of 18.1% driven by volume growth in data center solutions[129] - UBS reported net sales of$ 1,278.1 million for Q1 2025, a decrease of $302.8 million or 19.2%, with organic sales declining by 4.9% due to customer destocking[131] Debt and Financing - The company issued$ 800 million in senior notes to support the redemption of its Series A Preferred Stock, expected to create substantial net income and cash flow benefits[108] - The financial leverage ratio increased to 3.1x as of March 31, 2025, compared to 2.9x as of December 31, 2024[146] - Approximately 74% of the company's debt portfolio consisted of fixed-rate debt as of March 31, 2025[144] Cash Flow and Liquidity - Net cash provided by operating activities for Q1 2025 was $28.0 million, significantly lower than$ 746.3 million in Q1 2024[155] - As of March 31, 2025, the company had approximately $2.4 billion in liquidity, consisting of$ 1.7 billion in available borrowing capacity and $404.8 million in cash[140] - Cash used in investing activities for the first three months of 2025 was$ 54.4 million, which included $35.2 million paid to acquire Industrial Software Solutions[161] Shareholder Actions - The company repurchased$ 25.0 million of common stock in the first three months of 2025[162] - The company plans to direct excess liquidity towards share repurchases, dividends, debt reduction, and digital transformation initiatives[145] Taxation - The provision for income taxes increased to $36.1 million in Q1 2025, resulting in an effective tax rate of 23.4% compared to 21.0% in Q1 2024[122] Other Financial Metrics - Adjusted income from operations decreased to$ 248.2 million in Q1 2025 from $281.9 million in Q1 2024, representing a decline of 11.9%[139] - The total adjusted EBITDA margin for the company was 7.9% for CSS, 10.8% for UBS, and 6.9% for EES in Q1 2025[133]