WESCO’s 2011 success can be seen, in part, in the 11.6% rise
in its stock price from Jan. 13 to Jan. 26, the day it made Q4 and full-year
2011 results public (the S&P 500 average rose 2.2% in the same period).
Why was WESCO such a standout? Q4 sales came in 19.4% higher
than those of 2010, at $1.59 billion; full-year sales were $6.13 billion, up
21%. The company’s Oct. 20 “guidance” to analysts on Q4 chalked out sales
growth of 14% or better.
Full-year gross margins were 20.6% in Q4 (compared to 20.4%
a year earlier). For the full year, gross margins went up 50 basis points, to
20.2%.
Organic sales growth in Q4 was 14.8%; acquisitions (of
companies not owned in 2010’s Q4) added 6.2% to the year-over-year gain, while
the calendar (one less workday this past year) subtracted 1.6%.
John Engel, chairman and CEO, cited a few noteworthy
accomplishments:
- “We have now posted six consecutive quarters of double-digit
organic sales growth.”
- Five acquisitions in the past 18 months have added $460 million
in annual revenues to the company.
On the financial side, WESCO’s shine became a bit more
pronounced. Long-debt debt declined from almost $726 million on Dec. 31, 2010 to
a bit less than $643 million a year later. The company’s EBIDTA (earnings
before interest, depreciation, taxes, and amortization) rose from $234 million
one year ago to more than $364 million on Dec. 31, 2011.
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Above: From WESCO’s supplemental PDF, data
on sales in the company’s largest segments – industrial (43% of 2011 sales) and
construction (35%).
Highlights from the 16-page PDF, Supplemental
Financial Data, posted to the company’s website:
- 2012 sales growth estimated at 7% to 11%, with organic sales
tabbed to rise 6% to 9% in Q1, and 5% to 8% in each of the other three
quarters. Should WESCO’s sales come in on the high end of expectations,
full-year 2012 would end up at $6.8 billion.
- Organic sales rose 13.4% for 2011, better than the 7.8% posted in
2010. The company has posted six consecutive quarters of double-digit organic
sales growth.
- “Bidding pipeline” in the company’s Global Accounts and
Integrated Supply operations stood at $2.1 billion at Dec. 31, 2011.
- Year-end construction segment backlog was 7% higher than at Dec.
31, 2010. Construction has had six straight quarters of double-digit organic
sales growth, the company said.
- Utility segment sales rose 9.8% over 2010; the increase in sales
in CIG (commercial, institutional, government) was 8.1%.
Note that WESCO’s stock closed at $48.46 on Oct. 31, 2011.
Since that time (in roughly one quarter of trading), its stock price is up 32%.
The S&P 500 is up 5% in the same time frame.
One year ago WESCO posted a supplement to its 2010 year-end
data. In which projected 2011 sales growth was put “at or above” 12%. The
company said it would reach $6.2 billion in sales in the year 2013.
The company came close to $6.2 billion in sales in 2011; and
sales rose 21% from 2010.
Based on these numbers, one might slap the label “cautiously
optimistic” on WESCO’s projections for this year.
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