WESCO INTERNATIONAL INC (Form: 8-K, Received: 10/31/2019 06:09:11)

false0000929008 0000929008 2019-10-31 2019-10-31

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 31, 2019

WESCO International, Inc.

(Exact name of registrant as specified in its charter)



Delaware		001-14989	25-1723342
(State or other jurisdiction of incorporation)		(Commission File Number)	(IRS Employer Identification No.)

225 West Station Square Drive Suite 700			15219
Pittsburgh,	Pennsylvania		(Zip Code)
(Address of principal executive offices)

(Registrant's telephone number, including area code)

(Former name or former address, if changed since last report)

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:



Title of Class	Trading Symbol(s)	Name of Exchange on which registered
Common Stock, par value $.01 per share	WCC	New York Stock Exchange

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		☐

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. ☐

Results of Operations and Financial Condition.

The information in this Item 2.02 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 2.02 shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended.

On October 31, 2019, WESCO International, Inc. (the “Company”) issued a press release announcing its financial results for the third quarter of 2019. A copy of the press release is attached hereto as Exhibit 99.1.

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.

A slide presentation to be used by senior management of the Company in connection with its discussions with investors regarding the Company's financial results for the third quarter of 2019 is included in Exhibit 99.2 to this report and is being furnished in accordance with Regulation FD of the Securities and Exchange Commission.

Financial Statements and Exhibits.

The following are furnished as exhibits to this report.

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.



		WESCO International, Inc.
		(Registrant)



October 31, 2019	By:	/s/ David S. Schulz
(Date)		David S. Schulz
		Senior Vice President and Chief Financial Officer



	NEWS RELEASE
	WESCO International, Inc. / Suite 700, 225 West Station Square Drive / Pittsburgh, PA 15219

WESCO International, Inc. Reports Third Quarter 2019 Results

Third quarter highlights:

Record consolidated net sales of $2.1 billion, up 3.9% versus prior year

Organic sales growth of 3.4%

Cost of goods sold as a percentage of net sales of 81.4%

Gross margin of 18.6%

Operating profit of $94 million

Operating margin of 4.4%

Earnings per diluted share of $1.52, up 8%

Operating cash flow of $125.4 million; free cash flow of $116.5 million, or 181% of net income

Leverage of 3.0x, down 0.2x sequentially

PITTSBURGH, October 31, 2019 /PRNewswire/ -- WESCO International, Inc. (NYSE: WCC), a leading provider of electrical, industrial, and communications maintenance, repair and operating (MRO) and original equipment manufacturer (OEM) products, construction materials, and advanced supply chain management and logistics services, announces its results for the third quarter of 2019.

Mr. John J. Engel, WESCO's Chairman, President and CEO, commented, “We achieved record third quarter sales due to improving results in the U.S. and strength in Industrial, Utility and Datacom. Despite an economic backdrop of increased headwinds, all of our end markets and geographies grew on a year-over-year basis as expected. Gross margin was down versus prior year primarily driven by business mix and the impact of supplier price increases, which we continue to aggressively work to pass through. Operating margin was within our expected range driven by effective cost management and EPS grew 8% versus prior year. Free cash flow generation was also very strong at over 180% of net income due to inventory reduction and strong collections in the quarter.”

The following are results for the three months ended September 30, 2019 compared to the three months ended September 30, 2018:

Net sales were $2.1 billion for the third quarter of 2019, up 3.9% compared to the third quarter of 2018. Organic sales for the third quarter of 2019 grew by 3.4% as foreign exchange rates negatively impacted net sales by 0.4%, and acquisitions positively impacted net sales by 0.9%. Sequentially, there was no change in net sales; organic sales increased 1.2%.

Cost of goods sold for the third quarter of 2019 and 2018 was $1.7 billion, and gross profit was $400.2 million and $397.2 million, respectively. As a percentage of net sales, gross profit was 18.6% and 19.2% for the third quarter of 2019 and 2018, respectively. Gross profit as a percentage of net sales for the third quarter of 2019 primarily reflects unfavorable business mix and the impact of supplier price increases.

Selling, general and administrative expenses were $290.9 million, or 13.5% of net sales, for the third quarter of 2019, compared to $284.1 million, or 13.7% of net sales, for the third quarter of 2018.

Operating profit was $93.7 million for the third quarter of 2019, compared to $97.5 million for the third quarter of 2018. Operating profit as a percentage of net sales was 4.4% for the current quarter, compared to 4.7% for the third quarter of the prior year.

Net interest and other for the third quarter of 2019 was $13.5 million, compared to $17.1 million for the third quarter of 2018. The resolution of transfer pricing matters associated with the Canadian taxing authority resulted in non-cash interest income of $3.7 million for the third quarter of 2019.

The effective tax rate for the third quarter of 2019 was 19.8%, compared to 17.2% for the third quarter of 2018. The higher effective tax rate in the current quarter is primarily due to the full application of the international provisions of U.S. tax reform, as well as taxes attributable to the undistributed earnings of operations in China that are expected to be remitted in the future.

Net income attributable to WESCO International, Inc. was $64.5 million for the third quarter of 2019, compared to $66.8 million for the third quarter of 2018.

Earnings per diluted share for the third quarter of 2019 was $1.52, based on 42.4 million diluted shares, compared to $1.41 for the third quarter of 2018, based on 47.5 million diluted shares, an increase of 8%.

Operating cash flow for the third quarter of 2019 was $125.4 million, compared to $87.6 million for the third quarter of 2018. Free cash flow for the third quarter of 2019 was $116.5 million, or 181% of net income, compared to $80.3 million, or 120% of net income, for the third quarter of 2018.

The following are results for the nine months ended September 30, 2019 compared to the nine months ended September 30, 2018:

Net sales were $6.3 billion for the first nine months of 2019, compared to $6.2 billion for the first nine months of 2018, an increase of 1.5%. Organic sales for the first nine months of 2019 grew by 2.1% as foreign exchange rates and the number of workdays negatively impacted net sales by 0.9% and 0.5%, respectively, and were partially offset by the positive 0.8% impact from acquisitions.

Cost of goods sold for the first nine months of 2019 was $5.1 billion and gross profit was $1.2 billion, compared to $5.0 billion and $1.2 billion, respectively, for the first nine months of 2018. As a percentage of net sales, gross profit was 19.0% and 19.1% for the first nine months of 2019 and 2018, respectively.

Selling, general and administrative expenses were $883.2 million, or 14.1% of net sales, for the first nine months of 2019, compared to $867.8 million, or 14.1% of net sales, for the first nine months of 2018.

Operating profit was $262.4 million for the first nine months of 2019, compared to $262.0 million for the first nine months of 2018. Operating profit as a percentage of net sales was 4.2% for both the current and prior nine month periods.

Net interest and other for the first nine months of 2019 was $47.9 million, compared to $54.6 million for the first nine months of 2018. The resolution of transfer pricing matters associated with the Canadian taxing authority resulted in non-cash interest income of $3.7 million for the first nine months of 2019. For the nine months ended September 30, 2018, net interest and other includes a foreign exchange loss of $3.0 million from the remeasurement of a financial instrument, as well as accelerated amortization of debt discount and debt issuance costs totaling $0.8 million due to early repayments of our then outstanding term loan facility.

The effective tax rate for the first nine months of 2019 was 21.0%, compared to 19.3% for the first nine months of 2018. The higher effective tax rate in the current year is primarily due to the full application of the international provisions of U.S. tax reform, as well as taxes attributable to the undistributed earnings of operations in China that are expected to be remitted in the future.

Net income attributable to WESCO International, Inc. was $170.3 million for the first nine months of 2019, compared to $169.2 million for the first nine months of 2018.

Earnings per diluted share for the first nine months of 2019 was $3.88, based on 43.9 million diluted shares, compared to $3.56 for the first nine months of 2018, based on 47.5 million diluted shares, an increase of 9%.

Operating cash flow for the first nine months of 2019 was $116.7 million, compared to $174.5 million for the first nine months of 2018. Free cash flow for the first nine months of 2019 was $86.3 million, or 51% of net income, compared to $150.7 million, or 90% of net income, for the first nine months of 2018. The Company repurchased $150.0 million of shares during the first nine months of 2019.

Mr. Engel continued, “We remain committed to delivering profitable growth in 2019 and beyond. Based on our year-to-date results and our view of the end markets, we have narrowed the range for our full-year expectations for sales, operating margin and EPS while maintaining our outlook for free cash flow generation of at least 90% of net income. As the economy slows and end markets become more challenging, the strong free cash flow generation capability of our business supports execution of our strategy and capital allocation priorities."

Mr. Engel added, "Consistent with our past practice, we are providing our first end market outlook for 2020 today. Overall we expect our end markets to provide profitable growth opportunities for WESCO, while macroeconomic uncertainties could limit growth rates in the Industrial and Construction end markets. We expect to outperform the market by leveraging our full range of WESCO services and supply chain solutions, by making investments in our people and digital capabilities, and by maintaining our cash and cost management discipline. As a result, we expect sales growth in the range of flat to 4% for next year and will provide the balance of our 2020 outlook during our fourth quarter earnings call in January. Customers are seeking continuous improvement and supply chain stability in an increasingly complex and rapidly changing world. Our talented team of associates and our robust portfolio of products and value-added services continue to differentiate WESCO in providing our customers with complete solutions for their MRO, OEM and capital project needs.”

Webcast and Teleconference Access

WESCO will conduct a webcast and teleconference to discuss the third quarter of 2019 earnings as described in this News Release on Thursday, October 31, 2019, at 10:00 a.m. E.T. The call will be broadcast live over the internet and can be accessed from the Investor Relations page of the Company's website at www.wesco.investorroom.com. The call will be archived on this internet site for seven days.

WESCO International, Inc. (NYSE: WCC), a publicly traded Fortune 500 holding company headquartered in Pittsburgh, Pennsylvania, is a leading provider of electrical, industrial, and communications maintenance, repair and operating (MRO) and original equipment manufacturer (OEM) products, construction materials, and advanced supply chain management and logistic services. 2018 annual sales were approximately $8.2 billion. The company employs approximately 9,300 people, maintains relationships with approximately 30,000 suppliers, and serves approximately 70,000 active customers worldwide. Customers include commercial and industrial businesses, contractors, government agencies, institutions, telecommunications providers, and utilities. WESCO operates 11 fully automated distribution centers and approximately 500 branches in North America and international markets, providing a local presence for customers and a global network to serve multi-location businesses and multi-national corporations.

The matters discussed herein may contain forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from expectations. Certain of these risks are set forth in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2018, as well as the Company's other reports filed with the Securities and Exchange Commission.

Contact Information:

Director, Investor Relations and Corporate Communications

http://www.wesco.com

WESCO INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(dollar amounts in thousands, except per share amounts)



	Three Months Ended
	September 30, 2019					September 30, 2018
Net sales	$	2,148,110				$	2,067,245
Cost of goods sold (excluding	1,747,913			81.4	%	1,670,037			80.8	%
depreciation and amortization)
Selling, general and administrative expenses	290,852			13.5	%	284,073			13.7	%
Depreciation and amortization	15,612					15,618
Income from operations	93,733			4.4	%	97,517			4.7	%
Net interest and other	13,508					17,050
Income before income taxes	80,225			3.7	%	80,467			3.9	%
Provision for income taxes	15,886					13,822
Net income	64,339			3.0	%	66,645			3.2	%
Net loss attributable to noncontrolling interests	(156		)			(204		)
Net income attributable to WESCO International, Inc.	$	64,495		3.0	%	$	66,849		3.2	%

Earnings per diluted common share	$	1.52				$	1.41
Weighted-average common shares outstanding and common
share equivalents used in computing earnings per diluted
common share (in thousands)	42,378					47,486

WESCO INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(dollar amounts in thousands, except per share amounts)



	Nine Months Ended
	September 30, 2019					September 30, 2018
Net sales	$	6,259,465				$	6,165,154
Cost of goods sold (excluding	5,067,799			81.0	%	4,988,103			80.9	%
depreciation and amortization)
Selling, general and administrative expenses	883,222			14.1	%	867,790			14.1	%
Depreciation and amortization	46,035					47,321
Income from operations	262,409			4.2	%	261,940			4.2	%
Net interest and other	47,934					54,574
Income before income taxes	214,475			3.4	%	207,366			3.4	%
Provision for income taxes	44,970					40,077
Net income	169,505			2.7	%	167,289			2.7	%
Net loss attributable to noncontrolling interests	(824		)			(1,921		)
Net income attributable to WESCO International, Inc.	$	170,329		2.7	%	$	169,210		2.7	%

Earnings per diluted common share	$	3.88				$	3.56
Weighted-average common shares outstanding and common
share equivalents used in computing earnings per diluted
common share (in thousands)	43,901					47,547

WESCO INTERNATIONAL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(dollar amounts in thousands)



	September 30, 2019		December 31, 2018
Assets
Current Assets
Cash and cash equivalents	$	138,160	$	96,343
Trade accounts receivable, net	1,315,026		1,166,607
Inventories	961,997		948,726
Other current assets	163,297		173,964
Total current assets	2,578,480		2,385,640

Other assets ⁽¹⁾	2,468,931		2,219,396
Total assets	$	5,047,411	$	4,605,036


Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable	$	849,584	$	794,348
Short-term borrowings and current debt	25,899		56,214
Other current liabilities ⁽¹⁾	229,041		211,384
Total current liabilities	1,104,524		1,061,946

Long-term debt, net	1,346,333		1,167,311
Other noncurrent liabilities ⁽¹⁾	409,844		246,053
Total liabilities	2,860,701		2,475,310

Stockholders' Equity
Total stockholders' equity	2,186,710		2,129,726
Total liabilities and stockholders' equity	$	5,047,411	$	4,605,036

Effective January 1, 2019, the Company adopted Accounting Standards Update 2016-02, Leases, and all the related amendments (“Topic 842”) using the effective date method. The adoption of Topic 842 resulted in the recognition of right-of-use assets and lease liabilities in the balance sheet. As of September 30, 2019, other assets includes $237.3 million of operating lease assets, and other current liabilities and other noncurrent liabilities include $61.1 million and $182.0 million, respectively, of operating lease liabilities.

WESCO INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollar amounts in thousands)



	Nine Months Ended
	September 30, 2019			September 30, 2018
Operating Activities:
Net income	$	169,505		$	167,289
Add back (deduct):
Depreciation and amortization	46,035			47,321
Deferred income taxes	4,621			12,194
Change in trade receivables, net	(122,903		)	(104,215		)
Change in inventories	(1,500		)	23,189
Change in accounts payable	46,902			18,235
Other	(25,996		)	10,447
Net cash provided by operating activities	116,664			174,460

Investing Activities:
Capital expenditures	(30,323		)	(23,749		)
Other	(23,167		)	3,609
Net cash used in investing activities	(53,490		)	(20,140		)

Financing Activities:
Debt borrowings (repayments), net	147,605			(90,356		)
Equity activity, net	(152,735		)	(27,055		)
Other	(12,952		)	(7,409		)
Net cash used in financing activities	(18,082		)	(124,820		)

Effect of exchange rate changes on cash and cash equivalents	(3,275		)	(4,693		)

Net change in cash and cash equivalents	41,817			24,807
Cash and cash equivalents at the beginning of the period	96,343			117,953
Cash and cash equivalents at the end of the period	$	138,160		$	142,760

NON-GAAP FINANCIAL MEASURES

This earnings release includes certain non-GAAP financial measures. These financial measures include organic sales growth, gross profit, gross margin, financial leverage, earnings before interest, taxes, depreciation and amortization (EBITDA), and free cash flow. The Company believes that these non-GAAP measures are useful to investors as they provide a better understanding of sales performance, and the use of debt and liquidity on a comparable basis. Management does not use these non-GAAP financial measures for any purpose other than the reasons stated above.

WESCO INTERNATIONAL, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(dollar amounts in thousands, except organic sales data)



	Three Months Ended		Nine Months Ended
Organic Sales Growth:	September 30, 2019		September 30, 2019

Change in net sales	3.9	%	1.5	%
Impact from acquisitions	0.9	%	0.8	%
Impact from foreign exchange rates	(0.4	)%	(0.9	)%
Impact from number of workdays	—	%	(0.5	)%
Organic sales growth	3.4	%	2.1	%



	Three Months Ended
Organic Sales Growth - Sequential:	September 30, 2019

Change in net sales	(0.1	)%
Impact from acquisitions	—	%
Impact from foreign exchange rates	0.3	%
Impact from number of workdays	(1.6	)%
Organic sales growth	1.2	%

Note: Organic sales growth is a measure of sales performance. Organic sales growth is calculated by deducting the percentage impact from acquisitions in the first year of ownership, foreign exchange rates and number of workdays from the overall percentage change in consolidated net sales.



	Three Months Ended						Nine Months Ended
Gross Profit:	September 30, 2019			September 30, 2018			September 30, 2019			September 30, 2018

Net sales	$	2,148,110		$	2,067,245		$	6,259,465		$	6,165,154
Cost of goods sold (excluding depreciation and amortization)	1,747,913			1,670,037			5,067,799			4,988,103
Gross profit	$	400,197		$	397,208		$	1,191,666		$	1,177,051
Gross margin	18.6		%	19.2		%	19.0		%	19.1		%

Note: Gross profit is a financial measure commonly used within the distribution industry. Gross profit is calculated by deducting cost of goods sold, excluding depreciation and amortization, from net sales. Gross margin is calculated by dividing gross profit by net sales.

WESCO INTERNATIONAL, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(dollar amounts in thousands)



	Twelve Months Ended
Financial Leverage:	September 30, 2019		December 31, 2018

Income from operations	$	352,909	$	352,440
Depreciation and amortization	61,711		62,997
EBITDA	$	414,620	$	415,437

	September 30, 2019		December 31, 2018
Short-term borrowings and current debt	$	25,899	$	56,214
Long-term debt	1,346,333		1,167,311
Debt discount and debt issuance costs ⁽¹⁾	9,371		9,600
Total debt	1,381,603		1,233,125
Less: cash and cash equivalents	138,160		96,343
Total debt, net of cash	$	1,243,443	$	1,136,782

Financial leverage ratio	3.0		2.7

Debt is presented in the condensed consolidated balance sheets net of debt discount and debt issuance costs.

Note: Financial leverage measures the use of debt. Financial leverage ratio is calculated by dividing total debt, including debt discount and debt issuance costs, net of cash, by EBITDA. EBITDA is defined as the trailing twelve months earnings before interest, taxes, depreciation and amortization.



	Three Months Ended						Nine Months Ended
Free Cash Flow:	September 30, 2019			September 30, 2018			September 30, 2019			September 30, 2018

Cash flow provided by operations	$	125,439		$	87,639		$	116,664		$	174,460
Less: capital expenditures	(8,921		)	(7,365		)	(30,323		)	(23,749		)
Free cash flow	$	116,518		$	80,274		$	86,341		$	150,711
Percentage of net income	181		%	120		%	51		%	90		%

Note: Free cash flow is a measure of liquidity. Capital expenditures are deducted from operating cash flow to determine free cash flow. Free cash flow is available to fund investing and financing activities.

Q3 2019 Earnings Webcast Presentation October 31, 2019 1

Forward Looking Statements 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; increase in competition; expansion of business activities; disruptions in operations or information technology systems; supply chain disruptions, changes in supplier strategy or loss of key suppliers; personnel turnover or labor cost increases; risks related to acquisitions, including the integration of acquired businesses; changes in tax laws, regulations and guidance, and uncertainties regarding their application, and challenges by tax authorities to the company’s tax positions; exchange rate fluctuations; debt levels, terms, financial market conditions or interest rate fluctuations; stock market, economic or political instability; legal or regulatory matters; litigation, disputes, contingencies or claims; and other factors described in detail in the Form 10-K for WESCO International, Inc. for the year ended December 31, 2018 and any subsequent filings with the Securities and 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 found in the appendix and obtained via WESCO’s website, www.wesco.com. Non-GAAP Measures This presentation includes certain non-GAAP financial measures. These financial measures include organic sales growth, gross profit, gross margin, financial leverage, earnings before interest, taxes, depreciation and amortization (EBITDA), and free cash flow. The Company believes that these non-GAAP measures are useful to investors as they provide a better understanding of sales performance, and the use of debt and liquidity on a comparable basis. Management does not use these non-GAAP financial measures for any purpose other than the reasons stated above. 2

Q3 2019 Highlights Organic Sales Growth versus Prior Year Annual Quarter Third Quarter • Reported sales up 3.9% – Record Q3 sales with improving results in the U.S. and strength July +4% in Industrial, Utility, and Datacom 8.6% August +3% September +2% • Organic sales up 3.4% U.S. +4% – Up 1.2% sequentially 6.2% Canada +1% – YOY growth in all end markets and geographies International +5% • Free cash flow of $117 million; 181% of net income 4.5% 4.2% • Operating margin down 30 basis points versus prior year 3.4% • Estimated pricing impact of +1% • Diluted EPS up $0.11, or 8%, over prior year • Completed previously-announced $150 million share 2017 2018 3Q17 3Q18 3Q19 repurchase transaction, received incremental 0.7 million shares • Extended maturity dates for our two bank credit facilities; increased liquidity available by $50 million • Preliminary October sales up low single digits Note: Organic sales growth excludes the impact of acquisitions in the first year of ownership, foreign exchange rates and differences in the number of workdays. See appendix for non-GAAP reconciliations. 3

Q3 2019 Results Versus Q3 Millions, except per share amounts Q3 2018 Q3 2019 prior year Outlook Sales $2,067 $2,148 3.9% 3% – 5% Gross Profit $397 $400 0.8% % of Sales 19.2% 18.6% (60) bps SG&A $284 $291 2.4% % of Sales 13.7% 13.5% (20) bps Operating Profit $98 $94 (3.9)% % of Sales 4.7% 4.4% (30) bps 4.3% – 4.7% Effective Tax Rate 17.2% 19.8% 260 bps ~22% Diluted EPS $1.41 $1.52 7.8% Note: See appendix for non-GAAP reconciliations. 4

Third Quarter Gross Margin Influencers Decline versus prior year primarily driven by two factors: Mix Impact Summary 1) Mix – Headwinds from differences in Historical Gross Margin vs. Q3 2019 Gross growth rates by end market, geography WESCO Average (1) Margin Impact and shipment type Industrial ABOVE CIG AVERAGE Headwind 2) Price/Cost – Impact of significant price Construction BELOW END END MARKET increases including those driven by tariffs Utility BELOW Canada ABOVE U.S. AVERAGE Headwind GEOGRAPHY International BELOW Stock ABOVE Special Order AVERAGE Headwind SHIPMENT Direct BELOW (1) Presented at June, 2019 Investor Day 5

Diluted EPS and Sales Growth Walk Diluted EPS Walk Sales Growth Walk Q3 2018 Diluted EPS $1.41 Q3 2018 Sales $2,067 M Core operations $(0.05) U.S. 290 bps Canada 20 bps Foreign exchange rates $0.01 International 30 bps SLS acquisition $(0.05) Organic Growth 3.4% Tax, net of interest benefit $0.03 Foreign exchange rates (35) bps Lower share count $0.17 SLS acquisition 85 bps Q3 2019 Diluted EPS $1.52 Q3 2019 Sales $2,148 M Reported Growth 8% Reported Growth 3.9% 6

Industrial End Market Organic Sales Growth versus Prior Year Annual Quarter • Q3 2019 organic sales − Up 5% versus prior year − U.S. up 3%; Canada up 7% in local currency 11.2% − Up 1% sequentially • Pickup in sales growth rate against stiffer headwinds in 8.0% Industrial market in Q3 − Increased uncertainty impacting business spending − Labor supply constraints continue 4.3% 4.6% • Continued strength in petrochemical, metals and mining, and food & beverage markets 0.8% • Global Account and Integrated Supply opportunity 2017 2018 3Q17 3Q18 3Q19 pipeline is strong; bidding activity levels remain high Global Integrated General OEM Awarded a new three year contract to provide electrical MRO and OEM products to Accounts Supply Industrial support the U.S. and Canadian operations of a high voltage equipment manufacturer. 36% of WESCO Sales Note: See appendix for non-GAAP reconciliations. 7

Construction End Market Organic Sales Growth versus Prior Year Annual Quarter • Q3 2019 organic sales − Up 3% versus prior year − Up 4% in the U.S. and 1% in Canada in local currency − Up 2% sequentially • Backlog at historically strong level and flat sequentially (better than normal seasonality) 5.1% 6.0% • Some customer project delays partly due to uncertainty around trade 3.3% 2.8% 1.7% • Contractors continue to be challenged by tariff-related budget pressures and an exceptionally tight skilled-labor 2017 2018 3Q17 3Q18 3Q19 market Non-Residential | Contractors Awarded a multi-million dollar contract to provide switchgear for the construction of a 33% of WESCO Sales new hospital in Canada. Note: See appendix for non-GAAP reconciliations. 8

Utility End Market Organic Sales Growth versus Prior Year Annual Quarter • Q3 2019 organic sales − Up 3% versus prior year − Up 6% in the U.S.; down 28% in Canada in local currency due to non-renewal of Canadian contract in 4Q18 − Up 5% sequentially • Continue to drive product and service scope expansion with 10.2% 11.0% investor owned utility, public power, and generation 8.6% customers • Customer interest in Integrated Supply solutions remains 2.3% 3.4% high 2017 2018 3Q17 3Q18 3Q19 • Expect grid reliability and modernization projects as well as growth in renewable energy to drive future demand Investor Owned | Public Power | Utility Contractors Awarded a multi-year contract to provide broadband cable and fiber equipment to support a FTTx project for a municipal utility in the U.S. 16% of WESCO Sales Note: See appendix for non-GAAP reconciliations. 9

CIG End Market Organic Sales Growth versus Prior Year Annual Quarter • Q3 2019 organic sales − Up 1% versus prior year − Up 2% in the U.S.; up 6% in Canada in local currency − Down 3% sequentially 9.4% 9.0% • Supply chain solutions driving results in datacenter, 7.7% security, and cloud technology projects • Continue to be well positioned to serve LED lighting 4.8% renovation and retrofits, FTTx deployments and broadband build outs 0.7% 2017 2018 3Q17 3Q18 3Q19 Commercial | Institutional | Government Awarded a multi-million dollar contract to provide data communications products for 15% of WESCO Sales the construction of a U.S. federal government facility. Note: See appendix for non-GAAP reconciliations. 10

Free Cash Flow & Leverage Free Cash Flow Leverage ($ Millions) (Debt, Net of Cash, to TTM EBITDA) target leverage ~ $1.1B of free cash flow over the last 5 years 4.0x 2.0x – 3.5x 3.5x $117 million and $150.7 181% of net income in Q3 3.0x 90% of net income 3.0x 2.5x $86.3 2.0x 51% of net income 1.5x Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2018 YTD 2019 YTD 2017 2018 2019 Note: See appendix for non-GAAP reconciliations. 11

2019 Outlook Q4 Full Year Full Year implied at full year (current) (prior) midpoint Sales ~3.5% 1% to 3% 1% to 4% Operating Margin ~4.2% ~4.2% 4.2% to 4.5% Effective Tax Rate ~21% ~21% ~21 to 23% Diluted EPS $5.00 to $5.40 $5.00 to $5.60 Free Cash Flow ~ 90% of net income ~ 90% of net income Notes Excludes unannounced acquisitions. Assumes a CAD/USD exchange rate of 0.75 in Q4. FY 2019 has one fewer workday than FY 2018. See appendix for non-GAAP reconciliations. 12

2020 Preliminary Outlook End Market: Range Industrial (LSD) to LSD Construction (LSD) to LSD Utility LSD CIG Flat to LSD End Market Sales Growth (1)% to 3% Market outperformance 1% to 2% Foreign currency / M&A1 neutral Consolidated WESCO Flat to 4% 1 Foreign currency exchange rates expected to be a slight headwind offset by the carryover impact of the SLS acquisition in March, 2019 13

Operations Reorganization • Announced appointment of Nelson Squires to Senior Vice President and Chief Operating Officer on October 1 • Streamlines our reporting structure – Business leaders report directly to COO – Global Operations and Supply Chain leader reports to COO • U.S. Vice President and Group G.M. position eliminated 14

APPENDIX

Trailing Twelve Month Sales Mix 15% 8% 10% 36% 41% 16% End 11% Products Markets 14% 33% 16% Industrial General Supplies Construction Communications & Security Utility Wire, Cable & Conduit CIG Lighting & Sustainability Electrical Distribution & Controls Automation, Controls & Motors 16

Organic Sales Growth ($ Millions) Year-over-Year Three Months Ended, Core Less: Less: Organic September 30, 2018 September 30, 2019 Growth FX Impact Workday Growth Industrial core sales 724 755 4.2% (0.4)% 0.0% 4.6% Construction core sales 686 706 2.9% (0.4)% 0.0% 3.3% Utility core sales 346 358 3.3% (0.1)% 0.0% 3.4% CIG core sales 311 312 0.2% (0.5)% 0.0% 0.7% Total core sales $ 2,067 $ 2,131 3.0% (0.4)% 0.0% 3.4% U.S. core sales 1,525 1,586 3.9% 0.0% 0.0% 3.9% Canada core sales 430 430 0.0% (1.1)% 0.0% 1.1% International core sales 112 115 2.6% (2.6)% 0.0% 5.2% Total core sales $ 2,067 $ 2,131 3.0% (0.4)% 0.0% 3.4% Plus: SLS sales - 17 Total net sales $ 2,067 $ 2,148 Sequential Three Months Ended, Reported Less: Less: Organic June 30, 2019 September 30, 2019 Growth FX Impact Workday Growth Industrial sales 762 755 (0.9)% 0.2% (1.6)% 0.5% Construction sales 704 714 1.5% 0.6% (1.6)% 2.5% Utility sales 347 358 3.0% 0.1% (1.6)% 4.5% CIG sales 337 321 (4.9)% 0.1% (1.6)% (3.4)% Total net sales $ 2,150 2,148 (0.1)% 0.3% (1.6)% 1.2% Note: Prior period end market amounts may contain reclassifications to conform to current period presentation. 17

Capital Structure and Leverage ($ Millions) EBITDA Twelve Months Ended, December 31,2018 September 30, 2019 Income from operations 352 353 Depreciation and amortization 63 62 EBITDA 415 415 Debt Outstanding as of, Maturity December 31, 2018 September 30, 2019 AR Revolver (variable) 275 490 2022 Inventory Revolver (variable) 52 15 2024 Term Loans (variable) 25 - 2019 2021 Senior Notes (fixed) 500 500 2021 2024 Senior Notes (fixed) 350 350 2024 Other 31 27 Various Total debt1 1,233 1,382 Less: cash and cash equivalents 96 138 Total debt, net of cash 1,137 1,244 Leverage 2.7x 3.0x Liquidity2 Liquidity 824 723 (1) Debt is presented in the condensed consolidated balance sheets net of debt discount and debt issuance costs. (2) Total availability under asset-backed credit facilities plus cash in investment accounts. Note: For financial leverage ratio in prior periods, see quarterly earnings webcasts as previously furnished to the Securities & Exchange Commission, which can be obtained from the Investor Relations page of WESCO’s website at www.wesco.com. 18

Gross Profit and Free Cash Flow ($ Millions) Gross Profit Three Months Ended, September 30, 2018 September 30, 2019 Net sales 2,067 2,148 Cost of goods sold1 1,670 1,748 Gross profit2 397 400 Gross margin 2 19.2% 18.6% Free Cash Flow Nine Months Ended, September 30, 2018 September 30, 2019 Net cash provided by operating activities 175 117 Less: capital expenditures (24) (31) Free cash flow3 151 86 Net income 167 170 % of net income 90% 51% 1 Excluding depreciation and amortization. 2 Gross profit is calculated by deducting cost of goods sold, excluding depreciation and amortization, from net sales. Gross margin is calculated by dividing gross profit by net sales. 3 Free cash flow is provided by the Company as an additional liquidity measure. Capital expenditures are deducted from operating cash flow to determine free cash flow. Free cash flow is available to fund investing and financing activities. Note: For gross profit in prior periods, see quarterly earnings webcasts as previously furnished to the Securities & Exchange Commission, which can be obtained from the Investor Relations page of WESCO’s website at www.wesco.com. 19

Work Days Q1 Q2 Q3 Q4 FY 2017 64 64 63 62 253 2018 64 64 63 62 253 2019 63 64 63 62 252 2020 64 64 64 61 253 20


⁽¹⁾	Debt is presented in the condensed consolidated balance sheets net of debt discount and debt issuance costs.