SEC Comment Letter for WESCO INTERNATIONAL INC (WCC) (CIK 0000929008) (WCC) — Jan 10, 2012
WESCO INTERNATIONAL INC (WCC) (CIK 0000929008)
Date: Jan. 10, 2012 · CIK: 0000929008 · Accession: 0000000000-12-001384
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 001-14989
Letter
UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 DIVISION OF CORPORATION FINANCE January 9, 2012 Via Email Mr. John J. Engel Chief Executive Officer WESCO International, Inc. 225 West Station Square Drive, Suite 700 Pittsburgh, Pennsylvania 15219
Re: WESCO International, Inc. Form 10-K for the Year Ended December 31, 2010 Filed February 25, 2011 File No. 001-14989
Dear Mr. Engel:
We have reviewed your response dated December 28, 2011 and have the following comments. We have limited our review to only y our financial statements and related disclosures and do not intend to expand our review to other por tions of your documents. In some of our comments, we may ask you to provide us with information so we may better understand your disclosure. Please respond to this letter within te n business days by providing the requested information or by advising us when you will provide the requested response. If you do not believe our comments apply to your facts and circum stances, please tell us w hy in your response. After reviewing the information you provide in response to these comments, we may have additional comments. Form 10-K for the Year Ended December 31, 2010
Critical Accounting Policies and Estimates, page 18
– Excess and Obsolete Inventory, page 19
1. We note your response to prior comment 1. Pl ease confirm to us that you will revise future filings to provide disclosure si milar to that provided in your response.
Mr. John J. Engel WESCO International, Inc. January 9, 2012 Page 2 Note 2. Accounting Policies, page 35
– Revenue Recognition, page 35
2. We note from your response to prior comment 10 that you direct ship certain items and that for these sales you do not physically handl e the product. Please tell us more about these sales, including how you evaluated whethe r to recognize revenue on these sales on a gross or net basis. Discuss how you have considered the criter ia of FASB ASC 605-45- 45. Note 15. Segments and Related Information, page 51
3. We note your response to prior comment 10. Y ou state that all products are available for sale in each of the 12 operating segments. However, you also state that gross margins vary between segments due to the sales mix va riability. You further state that the mix of products sold by each branch is a function of the customer demand. Please explain to us in greater detail how you have considered these factors in your segment aggregation analysis. Discuss whether there are any underlying trends regarding the sales mix variability such that certain segments could be expected to sell a higher portion of certain products or certain segments could be exp ected to sell a higher portion through stock orders, direct ship and/ or special orders.
4. We note that you have focused your analysis of the similar economic characteristics on operating income as a percentage of sales. You state that each segment’s operating income as a percent of sales is within 310 ba sis points or less from the average of 5.7% for the year ended December 31, 2010. This ap pears to imply that operating income as a percentage of sales ranges from 2.6% to 8.8% across your segments. Noting that the high end of this range is 238% of the low end of this range, please expl ain to us in greater detail why you believe this represents similar economic characteristics. 5. To help us better understand the similarity of the economic characteristics, please also provide us with a summary of the gross profit information for each of the operating segments. We note that the sales method can co ntribute to variability in the gross profit margin. As such, to the exte nt that you have informati on available for gross profit by sales method by segment, please also provide th at information. Finally, in order to help us understand all possible causes for the marg in variability, please also tell us more regarding how your branches determine prici ng for the products it sells. For example, discuss whether pricing for your products is consistent across your operating segments.
Mr. John J. Engel WESCO International, Inc. January 9, 2012 Page 3 You may contact Tara Harkins, Staff Accountant, at (202) 551-3639 or me at (202) 551-3643 if you have questions regarding thes e comments. In this regard, do not hesitate to contact Martin James, Senior Assistant Chief Accountant, at (202) 551-3671.
S i n c e r e l y , /s/ Kevin L. Vaughn Kevin L. Vaughn A c c o u n t i n g B r a n c h C h i e f
Show Raw Text
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
DIVISION OF
CORPORATION FINANCE
January 9, 2012
Via Email
Mr. John J. Engel Chief Executive Officer WESCO International, Inc. 225 West Station Square Drive, Suite 700 Pittsburgh, Pennsylvania 15219
Re: WESCO International, Inc.
Form 10-K for the Year Ended December 31, 2010 Filed February 25, 2011 File No. 001-14989
Dear Mr. Engel:
We have reviewed your response dated December 28, 2011 and have the following
comments. We have limited our review to only y our financial statements and related disclosures
and do not intend to expand our review to other por tions of your documents. In some of our
comments, we may ask you to provide us with information so we may better understand your
disclosure.
Please respond to this letter within te n business days by providing the requested
information or by advising us when you will provide the requested response. If you do not believe our comments apply to your facts and circum stances, please tell us w hy in your response.
After reviewing the information you provide in response to these comments, we may
have additional comments. Form 10-K for the Year Ended December 31, 2010
Critical Accounting Policies and Estimates, page 18
– Excess and Obsolete Inventory, page 19
1. We note your response to prior comment 1. Pl ease confirm to us that you will revise
future filings to provide disclosure si milar to that provided in your response.
Mr. John J. Engel
WESCO International, Inc. January 9, 2012 Page 2
Note 2. Accounting Policies, page 35
– Revenue Recognition, page 35
2. We note from your response to prior comment 10 that you direct ship certain items and
that for these sales you do not physically handl e the product. Please tell us more about
these sales, including how you evaluated whethe r to recognize revenue on these sales on
a gross or net basis. Discuss how you have considered the criter ia of FASB ASC 605-45-
45.
Note 15. Segments and Related Information, page 51
3. We note your response to prior comment 10. Y ou state that all products are available for
sale in each of the 12 operating segments. However, you also state that gross margins
vary between segments due to the sales mix va riability. You further state that the mix of
products sold by each branch is a function of the customer demand. Please explain to us
in greater detail how you have considered these factors in your segment aggregation
analysis. Discuss whether there are any underlying trends regarding the sales mix
variability such that certain segments could be expected to sell a higher portion of certain
products or certain segments could be exp ected to sell a higher portion through stock
orders, direct ship and/ or special orders.
4. We note that you have focused your analysis of the similar economic characteristics on
operating income as a percentage of sales. You state that each segment’s operating
income as a percent of sales is within 310 ba sis points or less from the average of 5.7%
for the year ended December 31, 2010. This ap pears to imply that operating income as a
percentage of sales ranges from 2.6% to 8.8% across your segments. Noting that the high
end of this range is 238% of the low end of this range, please expl ain to us in greater
detail why you believe this represents similar economic characteristics.
5. To help us better understand the similarity of the economic characteristics, please also
provide us with a summary of the gross profit information for each of the operating
segments. We note that the sales method can co ntribute to variability in the gross profit
margin. As such, to the exte nt that you have informati on available for gross profit by
sales method by segment, please also provide th at information. Finally, in order to help
us understand all possible causes for the marg in variability, please also tell us more
regarding how your branches determine prici ng for the products it sells. For example,
discuss whether pricing for your products is consistent across your operating segments.
Mr. John J. Engel
WESCO International, Inc. January 9, 2012 Page 3
You may contact Tara Harkins, Staff Accountant, at (202) 551-3639 or me at (202) 551-3643
if you have questions regarding thes e comments. In this regard, do not hesitate to contact Martin
James, Senior Assistant Chief Accountant, at (202) 551-3671.
S i n c e r e l y ,
/s/ Kevin L. Vaughn
Kevin L. Vaughn A c c o u n t i n g B r a n c h C h i e f