Wesco Intl. Q3 net sales down 2.7%
Wesco International reported its third quarter net sales were down 2.7% YOY, due primarily to the Wesco Integrated Supply divestiture, the company said.
"We had a strong close to our third quarter, with sales slightly up compared to the second quarter driven by accelerating momentum in our Communications and Security Solutions segment, including double-digit sales growth in our global data center business," said John Engel, chairman, president, and CEO. "The continued weakness in Utility and Broadband Solutions offset what would have been a return to organic growth in the quarter. Adjusted EBITDA margin was flat compared to the second quarter and better than the expectations reviewed during our Investor Day last month, primarily driven by a sequential increase in gross margin.
"I am pleased with our free cash flow generation of $280 million in the third quarter and $777 million year-to-date, or 154% of adjusted net income, he added. "We have placed a particular focus on working capital management and are beginning to see the benefits, particularly in our Communications & Security Solutions business. Financial leverage was stable at 2.9X trailing twelve-month adjusted EBITDA as we reduced our net debt $188 million and repurchased $25 million of shares in the third quarter. Our pipeline of strategic acquisitions remains strong and is aligned with our goal to increase service offerings to our customers."
Engel concluded, "Quoting, bid activity levels, and backlog remain healthy across our Wesco enterprise. We are reaffirming our 2024 full-year outlook for sales, profitability and free cash flow. While end markets remain mixed, in the fourth quarter we expect to continue to benefit from double-digit growth in the data center space as well as some large projects in our electrical and industrial end markets. As we look ahead, I like Wesco's leadership position and exposure to the long-term trends we have consistently described in detail. While the macro-economic environment will inevitably present challenges, I believe Wesco will continue to outperform our competitors under all market conditions. Our commitment to value creation from operational improvements, digital transformation and our capital allocation strategy, including focused M&A, is clear and resolute as outlined during our recent Investor Day. The Wesco team will continue to strive to execute on those plans to deliver outsized returns for our shareholders."
INDUSTRIAL SUPPLY MAGAZINE
The September/October issue of Industrial Supply magazine features an in-depth cover story about Kurz Industrial Solutions. Plus, we're featuring articles by contributing writers Dirk Beveridge, Frank Hurtte, and Mike Hockett, as well as interviews with numerous product and distribution industry experts.
