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EX-99.2 - EX-99.2 - Wesco Aircraft Holdings, Inca12-26877_1ex99d2.htm
8-K - 8-K - Wesco Aircraft Holdings, Inca12-26877_18k.htm

Exhibit 99.1

 

Wesco Aircraft Holdings Reports Results for Fiscal Fourth Quarter and Full Year 2012

 

VALENCIA, CA, November 13, 2012 — Wesco Aircraft Holdings, Inc. (NYSE: WAIR), a leading provider of comprehensive supply chain management services to the global aerospace industry, today announced results for its fiscal fourth quarter ended September 30, 2012.

 

Highlights

 

·

Fourth quarter revenue of $212.2 million, up 17.0% compared to $181.3 million in the prior year

·

Fourth quarter Net Income of $27.0 million, with Diluted Earnings Per Share of $0.28

·

Fourth quarter Adjusted Net Income of $27.4 million, with Adjusted Diluted Earnings Per Share of $0.29

·

Fiscal year 2012 revenue was $776.2 million, up 9.2% compared to the prior year, and up 17.2% excluding the two Charleston programs completed in 2011

·

Fiscal year 2012 Net Income of $92.2 million, and Diluted Earnings Per Share of $0.96

·

Fiscal year 2012 Adjusted Net Income of $95.1 million, and Adjusted Diluted Earnings Per Share of $0.99

·

The acquisition of Interfast Inc. was completed on July 3, 2012

 

Fiscal 2012 Fourth Quarter Results

 

Revenue for the fiscal fourth quarter was $212.2 million, an increase of 17.0% compared to $181.3 million in the prior year period.  The increase in the North America segment was 15.2% which was mainly driven by the Interfast acquisition.  Wesco again demonstrated strong international growth during the quarter with revenues in the Rest of World segment increasing by 44.3% compared to the prior year.  In the fourth quarter, Ad hoc, JIT and LTA sales as a percentage of net sales represented 40%, 25% and 35%, respectively, the same proportions experienced in the fourth quarter last year. Net income for the fourth quarter of fiscal 2012 was $27.0 million, resulting in Diluted Earnings Per Share of $0.28.  This compared to $18.0 million, or $0.19 per share in the prior year period.  The increase in net income was due to higher sales, including the Interfast acquisition, a lower selling, general and administrative cost structure and a lower effective tax rate, partially offset by lower gross profit margins between the two periods.  Adjusted EBITDA for the fourth quarter was $45.9 million as compared to $46.1 million in the fourth quarter of 2011.  Adjusted Net Income was $27.4 million, resulting in Adjusted Diluted Earnings Per Share of $0.29, compared to $22.4 million, or $0.24 per share in the prior year period.

 

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Randy Snyder, Wesco’s Chairman, President, and Chief Executive Officer said, “We are very pleased with our performance during the past quarter.  We continue to increase the scope of our customer contracts and, operationally, we are increasing our productivity.  The integration of our recent acquisition, Interfast, is ahead of expectations and we are already gaining some of the anticipated benefits, including expanded customer relationships and more effective purchasing.  I am very excited about our opportunities in the coming year.”

 

Full Year Fiscal 2012

 

Revenue for the full year fiscal 2012 was $776.2 million, an increase of 9.2% compared to $710.9 million in 2011.  During fiscal 2012, Ad hoc, JIT and LTA sales as a percentage of net sales represented 38%, 26% and 36%, respectively, compared to 39%, 29% and 32%, respectively, for fiscal 2011.

 

Net income for fiscal 2012 was $92.2 million, resulting in Diluted Earnings Per Share of $0.96.  This compared to $75.6 million or Diluted Earnings Per Share of $0.81 in fiscal 2011.  Adjusted EBITDA in fiscal 2012 was $172.7 million as compared to $179.0 million in the prior fiscal year.  Adjusted Net Income was $95.1 million, resulting in Adjusted Diluted Earnings Per Share of $0.99, compared to $90.1million, or $0.97 per share in the prior year.

 

Recent Activity

 

On July 3, 2012, the Company completed its previously announced acquisition of substantially all of the assets of Interfast Inc., for CDN$134 million via a combination of cash and borrowings under its existing revolving credit facility. Interfast is a value-added distributor of specialty fasteners, fastening systems and production installation tooling for the aerospace, electronics and general industrial markets.

 

Financial Outlook

 

Based on the strong performance during fiscal year 2012, Wesco expects full year revenues for fiscal year 2013 of between $865 - $890 million, representing a growth rate of approximately 11% - 15% over 2012 results. Organic growth for 2013 will be mid to high single digits.  We are assuming military revenues remain relatively flat and become a lower percentage of our total sales in 2013.  Diluted EPS and Adjusted Diluted EPS are expected to be in the range of $1.08 to $1.12, and $1.14 to $1.19, respectively. These EPS estimates are based on estimated 2013 fiscal year averages of 92.9 million basic shares and 96.6 million diluted shares.  The effective tax rate is expected to be approximately 35%.

 

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Conference Call Information

 

The Company will hold a conference call to discuss its fourth quarter 2012 results at 5:00 p.m. EDT this afternoon. A live webcast of the call and accompanying slides may be accessed over the Internet from the Company’s Investor Relations website at ir.wescoair.com. Participants should follow the instructions provided on the website to download and install the necessary audio applications. The conference call also is available by dialing 800-706-7748, (domestic) or 617-614-3473 (international) and entering passcode 76994249.  Participants should ask for the Wesco Aircraft Holdings fourth quarter earnings conference call.

 

A replay of the live conference call will be available approximately one hour after the call.  The replay will be available on the Company’s website or by dialing 1-888-286-8010 (domestic) or 1- 617-801-6888 (international) and entering the replay passcode 87820145.  The replay will be available on the Company’s website for one year and by telephonic replay until 11:59 p.m., November 20, 2012.

 

About Wesco Aircraft

 

Wesco Aircraft is one of the world’s largest distributors and providers of comprehensive supply chain management services to the global aerospace industry. The Company’s services range from traditional distribution to the management of supplier relationships, quality assurance, kitting, just-in-time delivery and point-of-use inventory management.  The Company believes it offers the world’s broadest inventory of aerospace parts, comprised of more than 500,000 different stock keeping units, including hardware, bearings, tools, electronic components and machined parts. Wesco Aircraft has more than 1,200 employees across 43 locations in 12 countries.

 

Contact Information

 

Mark Davidson

Investor Relations

661-802-5090

Mark.Davidson@wescoair.com

 

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Non-GAAP Financial Information

 

“Adjusted Net Income” represents Net Income before: (i) amortization of intangible assets, (ii) amortization or write-off of deferred financing costs and original issue discount, or OID, (iii) Carlyle Acquisition related non-cash stock-based compensation expense, (iv) unusual or non-recurring items and (v) the tax effect of items (i) through (iv) above calculated using an assumed effective tax rate.

 

“Adjusted Basic EPS” represents Basic EPS calculated using Adjusted Net Income as opposed to Net Income.

 

“Adjusted Diluted EPS” represents diluted EPS calculated using Adjusted Net Income as opposed to Net Income.

 

“Adjusted EBITDA” represents Net Income before: (i) income tax provision, (ii) net interest expense, (iii) depreciation and amortization, (iv) Carlyle Acquisition related non-cash stock-based compensation expense and (v) unusual or non-recurring items.

 

Wesco utilizes and discusses Adjusted Net Income, Adjusted Basic EPS, Adjusted Diluted EPS and Adjusted EBITDA, which are non-GAAP measures our management uses to evaluate our business, because we believe they assist investors and analysts in comparing our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. We believe these metrics are used in the financial community, and we present these metrics to enhance investors’ understanding of our operating performance. You should not consider Adjusted EBITDA and Adjusted Net Income as an alternative to Net Income, determined in accordance with GAAP, as an indicator of operating performance. Adjusted Net Income, Adjusted Basic EPS, Adjusted Diluted EPS and Adjusted EBITDA are not measurements of financial performance under GAAP, and these metrics may not be comparable to similarly titled measures of other companies. See below for a reconciliation of Adjusted Net Income, Adjusted Basic EPS, Adjusted Diluted EPS and Adjusted EBITDA to the most directly comparable financial measures calculated and presented in accordance with GAAP.

 

Forward Looking Statements

 

Certain information in this news release contains forward-looking statements with respect to the Company’s financial condition, results of operations or business or its expectations or beliefs concerning future events. Such forward-looking statements include the discussions of the Company’s business strategies and the Company’s expectations concerning future operations, revenues, earnings per share, margins, profitability, liquidity and capital resources. In some cases, you can identify forward-looking statements by terminology such as “guidance,” “may,” “will,” “could,” “should,” “forecasts,” “expects,” “intends,” “plans,” “anticipates,” “projects,” “outlook,” “believes,” “estimates,” “predicts,” “potential,” “continue,” “preliminary,” or the negative of these terms or other comparable terminology. Although the Company believes that such forward-looking statements are reasonable, it cannot assure you that

 

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any forward-looking statements will prove to be correct. Such forward-looking statements involve risks, uncertainties, estimates and assumptions that may cause the Company’s actual results, performance or achievements to be materially different than those set forth in this news release. Additional information relating to factors that may cause actual results to differ from the Company’s forward-looking statements can be found in the Company’s filings with the Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2011, as supplemented by the Company’s Quarterly Report on Form 10-Q for the quarterly periods ended December 31, 2011, March 31, 2012 and June 30, 2012. The Company undertakes no obligation to update or revise forward-looking statements after the day of the release as a result of new information, future events or developments except as required by law.

 

Exhibits

 

Exhibit 1:

Consolidated Statements of Income (Unaudited)

Exhibit 2:

Condensed Consolidated Balance Sheets (Unaudited)

Exhibit 3:

Condensed Consolidated Statements of Cash Flows (Unaudited)

Exhibit 4:

Non-GAAP Financial Information (Unaudited)

 

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Exhibit 1

 

Wesco Aircraft Holdings, Inc.

Consolidated Statements of Income (UNAUDITED)

(In thousands, except for per share data)

 

 

 

Three Months Ended

 

Fiscal Year Ended

 

 

 

September 30,

2012

 

September 30,

2011

 

September 30,

2012

 

September 30,

2011

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

212,162

 

$

181,330

 

$

776,206

 

$

710,886

 

Cost of sales

 

133,219

 

108,680

 

492,636

 

435,490

 

Gross profit

 

78,943

 

72,650

 

283,570

 

275,396

 

Selling, general and administrative expenses

 

36,507

 

34,087

 

124,738

 

113,786

 

Income from operations

 

42,436

 

38,563

 

158,832

 

161,610

 

Interest expense, net

 

(6,465

)

(6,939

)

(24,646

)

(34,491

)

Other expense, net

 

(1,140

)

1,137

 

(524

)

1,005

 

Income before provision for income taxes

 

34,831

 

32,761

 

133,662

 

128,124

 

Provision for income taxes

 

(7,850

)

(14,732

)

(41,487

)

(52,526

)

Net income

 

$

26,981

 

$

18,029

 

$

92,175

 

$

75,598

 

 

 

 

 

 

 

 

 

 

 

Net income per share:

 

 

 

 

 

 

 

 

 

Basic

 

$

0.29

 

$

0.20

 

$

1.00

 

$

0.83

 

Diluted

 

$

0.28

 

$

0.19

 

$

0.96

 

$

0.81

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

92,779

 

90,989

 

92,058

 

90,697

 

Diluted

 

96,183

 

94,725

 

95,712

 

93,182

 

 

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Exhibit 2

 

Wesco Aircraft Holdings, Inc.

Condensed Consolidated Balance Sheets (UNAUDITED)

(In thousands)

 

 

 

September 30,

2012

 

September 30,

2011

 

 

 

 

 

 

 

Assets

 

 

 

 

 

Cash and cash equivalents

 

$

60,856

 

$

45,525

 

Accounts receivable, net

 

130,013

 

97,289

 

Inventories

 

557,216

 

483,062

 

Other current assets

 

53,944

 

11,740

 

Deferred income taxes

 

32,872

 

39,289

 

Total current assets

 

834,901

 

676,905

 

Long-term assets

 

702,515

 

624,480

 

Total assets

 

$

1,537,416

 

$

1,301,385

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

Accounts payable

 

$

79,940

 

$

53,069

 

Other current liabilities

 

19,788

 

18,664

 

Income taxes payable

 

2,078

 

1,144

 

Capital lease obligations—current portion

 

593

 

2,069

 

Total current liabilities

 

102,399

 

74,946

 

Long-term debt

 

626,000

 

556,000

 

Capital lease obligations

 

205

 

712

 

Deferred income taxes

 

55,445

 

41,256

 

Long-term liabilities

 

681,650

 

597,968

 

Total liabilities

 

784,049

 

672,914

 

Total stockholders’ equity

 

753,367

 

628,471

 

Total liabilities and stockholders’ equity

 

$

1,537,416

 

$

1,301,385

 

 

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Exhibit 3

 

Wesco Aircraft Holdings, Inc.

Condensed Consolidated Statements of Cash Flows (UNAUDITED)

(In thousands)

 

 

 

Fiscal Year Ended

 

 

 

September 30,
2012

 

September 30,
2011

 

Cash flows from operating activities

 

 

 

 

 

Net income

 

$

92,175

 

$

75,598

 

Adjustments to reconcile net income to net cash provided by operating activities

 

 

 

 

 

Amortization of intangible assets

 

4,427

 

3,699

 

Depreciation

 

5,536

 

5,859

 

Amortization of deferred financing costs

 

2,803

 

11,416

 

Bad debt and sales return reserve

 

(218

)

256

 

Non-cash foreign currency exchange

 

436

 

(427

)

Non-cash stock-based compensation

 

1,626

 

3,658

 

Excess tax benefit related to restricted stock units and stock options exercised (1)

 

(21,476

)

(1,547

)

Change in value of derivative

 

(1,703

)

(4,958

)

Deferred income tax provision

 

20,616

 

11,176

 

Loss on fixed asset disposal

 

331

 

 

Changes in assets and liabilities

 

 

 

 

 

Accounts receivable

 

(21,802

)

(8,281

)

Income taxes receivable

 

(18,022

)

(4,176

)

Inventories

 

(32,344

)

(129

)

Prepaid expenses and other assets

 

(2,431

)

1,388

 

Accounts payable

 

21,836

 

(5,558

)

Accrued expenses and other liabilities

 

1,833

 

2,406

 

Income taxes payable

 

946

 

(4,063

)

Net cash provided by operating activities

 

54,569

 

86,317

 

Cash flows from investing activities

 

 

 

 

 

Acquistion of business, net of cash acquired

 

(131,894

)

 

Purchases of property and equipment

 

(7,310

)

(5,119

)

Proceeds from sale of equipment

 

2,782

 

 

Net cash used in investing activities

 

(136,422

)

(5,119

)

Cash flows from financing activities

 

 

 

 

 

Proceeds from issuance of long-term debt

 

95,000

 

615,000

 

Repayments of long-term debt

 

(25,000

)

(679,243

)

Financing fees

 

 

(13,144

)

Repayment of capital lease obligations

 

(1,984

)

(1,898

)

Excess tax benefit related to restricted stock units and stock options exercised (1)

 

21,476

 

1,547

 

Proceeds from exercise of stock options

 

7,377

 

2,612

 

Net cash provided by (used in) financing activities

 

96,869

 

(75,126

)

Effect of foreign currency exchange rates on cash and cash equivalents

 

315

 

(10

)

Net increase in cash and cash equivalents

 

15,331

 

6,062

 

Cash and cash equivalents, beginning of period

 

45,525

 

39,463

 

Cash and cash equivalents, end of period

 

$

60,856

 

$

45,525

 

 


(1)         In accordance with generally accepted accounting principles we have classified $19,977 in excess tax benefits related to the vesting of 5,604,316 restricted stock units on September 28, 2012, as an inflow from financing activities and a corresponding outflow from operating activities. Had these shares not vested we would have generated $74,546 in cash flow from operating activities.

 

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Exhibit 4

 

Wesco Aircraft Holdings, Inc.

Non-GAAP Financial Information (UNAUDITED)

(In thousands, except for per share data)

 

 

 

Three Months Ended

 

Fiscal Year Ended

 

 

 

September 30,
2012

 

September 30,
2011

 

September 30,
2012

 

September 30,
2011

 

 

 

 

 

 

 

 

 

 

 

EBITDA & Adjusted EBITDA

 

 

 

 

 

 

 

 

 

Net income

 

$

26,981

 

$

18,029

 

$

92,175

 

$

75,598

 

Provision for income taxes

 

7,850

 

14,732

 

41,487

 

52,526

 

Interest and other, net

 

6,465

 

6,939

 

24,646

 

34,491

 

Depreciation and amortization

 

3,062

 

2,599

 

9,963

 

9,558

 

EBITDA

 

44,358

 

42,299

 

168,271

 

172,173

 

Carlyle Acquisition related non-cash stock-based compensation expense

 

 

1,332

 

 

1,859

 

Unusual or non-recurring items

 

1,525

 

2,426

 

4,476

 

4,931

 

Adjusted EBITDA

 

$

45,883

 

$

46,057

 

$

172,747

 

$

178,963

 

 

 

 

 

 

 

 

 

 

 

Adjusted Net Income

 

 

 

 

 

 

 

 

 

Net income

 

$

26,981

 

$

18,029

 

$

92,175

 

$

75,598

 

Amortization of intangible assets

 

1,658

 

925

 

4,427

 

3,699

 

Amortization of deferred financing costs

 

601

 

1,135

 

2,803

 

11,416

 

Carlyle Acquisition related non-cash stock-based compensation expense

 

 

1,332

 

 

1,859

 

Unusual or non-recurring items

 

(301

)

2,426

 

375

 

4,931

 

Adjustments for tax effect (assumed rate of 40%)

 

(1,514

)

(1,482

)

(4,682

)

(7,359

)

Adjusted Net Income

 

$

27,425

 

$

22,365

 

$

95,098

 

$

90,144

 

 

 

 

 

 

 

 

 

 

 

Adjusted Basic Earnings Per Share

 

 

 

 

 

 

 

 

 

Weighted-average number of basic shares outstanding

 

92,779

 

90,989

 

92,058

 

90,697

 

Adjusted Net Income Per Basic Shares

 

$

0.30

 

$

0.25

 

$

1.03

 

$

0.99

 

 

 

 

 

 

 

 

 

 

 

Adjusted Diluted Earnings Per Share

 

 

 

 

 

 

 

 

 

Weighted-average number of diluted shares outstanding

 

96,183

 

94,725

 

95,712

 

93,182

 

Adjusted Net Income Per Diluted Shares

 

$

0.29

 

$

0.24

 

$

0.99

 

$

0.97

 

 

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