Wesco International is incorporated under the laws of State of Delaware and is headquartered in Pittsburgh, Pennsylvania. The Company was incorporated in the year 1993. The Company’s common stock is registered and listed on the New York Stock Exchange under the ticker “WCC”.
Wesco International is a large manufacturer of industrial and electrical maintenance, repair and operating (MRO) products, and electrical construction products. The Company operates primarily in North America.
Canada accounted for nearly 11% of the Company’s total sales in 2006 as compared with more than 86% contributed by the US. Wesco International have over 400 full service branch offices and seven distribution offices located in US, Canada, Gaum, Mexico, Nigeria, United Arab Emirates, the United Kingdom and Singapore. About 340 branches are based in the US followed by nearly 50 based in Canada. The Company caters to nearly 110,000 clients across the world and offers more than one million products from over 29,000 suppliers. In 2006, the Company’s top ten suppliers accounted for nearly 33% of its total purchases. Eaton Corporation was the largest supplier accounting for nearly 12% of the Company’s total purchases. Wesco’s distribution centers and branches stock over 250,000 unique SKUs. It utilizes highly automated electronic purchase and inventory management system.
Some of the products offered by the Company include:
• Electrical Supplies: Fuses, wiring devices, terminals, boxes, connectors, fittings, lugs, enclosures, tape, terminations, and marking and splicing equipment
• Industrial Supplies: Security and safety, testers and tools, fall and personal protection, fasteners, consumables, and janitorial
• Power Distribution: Transformers, circuit breakers, panel boards, switchboards, metering and busway products
• Lighting: Fixtures, lamps, lighting and ballasts control products
• Wire and Conduits
• Control, Motors and Automation: Drives, motor control devices, power and surge protection, timers, relays, and pushbuttons
• Data Communications: Low voltage systems, structured cabling systems, and specialty cable and wire products.
In addition to above products, the Company offers a broad array of services as well as procurement solutions such as national accounts and integrated supply programs. The Company’s supply management solutions include:
• Outsourcing of MRO procurement process
• Offering technical support for improvement in production processes using automated solutions
• Executing inventory optimization and management programs
• Partnering with joint cost savings efforts
• Providing resources for on site support
• Suggesting energy efficient product improvement
• Providing product and safety training to clients’ employees.
The Company’s top ten clients accounted for nearly 11% of its total net sales. Sales to industrial clients such as process and manufacturing industries accounted for nearly 42% of the Company’s sales in 2006.
Sales to electrical contractors contributed nearly 34% to the Company’s sales in 2006. Sales to utilities contractors contributed nearly 17% to the Company’s sales in 2006. Commercial, Institutional and Governmental clients accounted for nearly 6% of the Company’s sales.
The Company typically focuses following operational and expansion strategies. The operational strategies focus on profit and productivity enhancement initiatives.
• Enhance market position in the Electrical Distribution sector
• Grow the Company’s market position in the national accounts.
• Extend the Company’s leadership in the integrated supply solutions.
• Increase share in local markets that are fragmented.
• Build upon the lean initiative.
• Continue to look out for strategic acquisitions.
• Expand service and product offerings.
• Leverage the Company’s information technology and system capabilities.
• Grow the Company’s international operations.
Wesco International employed nearly 7,100 people across the world, including nearly 6,300 in US and nearly 800 in Canada and other locations. The Company’s sales force is located at the branch offices and is comprised of nearly 2,600 sales professionals.
The Company provides services and products through nine operating units which it has consolidated as one segment. The sale of electrical products and MRO supplies accounts for the majority (more than 90%) of the Company’s total net sales.
Financial Performance: The Company’s worldwide net sales increased 20.3% to $5320.6 million in 2006 from $4421.1 million in 2005 mainly contributed by strong growth in the key markets served by the Company, contributions by recent acquisitions and benefits from sales productivity initiatives. Recent acquisitions contributed $506.6 million to the net sales representing nearly 9.1% of the increase in 2006 sales over 2005. The Company also benefited from price increases driven by increase in material cost. Sales from the Company’s US operations increased 20.3% to $4606.8 million in 2006 from $3829.8 million in 2005. Wesco International’ operating profit increased 74.3% to $364.9 million in 2006 from $209.3 million in 2005. The Company’s operating profit margin improved to 6.9% in 2006 from 4.7% in 2005. The Company’s net income increased 110.0% to $217.3 million in 2006 from $103.5 million in 2005. Valmont Industries’ net income margin also increased to 4.1% in 2006 from 2.3% in 2005.