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8-K - 8-K - Wesco Aircraft Holdings, Inca13-17629_18k.htm
EX-99.2 - EX-99.2 - Wesco Aircraft Holdings, Inca13-17629_1ex99d2.htm

Exhibit 99.1

 

Wesco Aircraft Holdings Reports Results for Fiscal Third Quarter 2013

 

VALENCIA, CA, July 31, 2013 — Wesco Aircraft Holdings, Inc. (“Wesco Aircraft” or the “Company”) (NYSE: WAIR), a leading provider of comprehensive supply chain management services to the global aerospace industry, today announced results for its fiscal third quarter ended June 30, 2013.

 

Highlights

 

·                  Record revenue for the quarter of $230.2 million, up 21.6% compared to the prior year, including organic growth of 14%

·                  Net Income of $27.0 million, with Diluted Earnings Per Share (“EPS”) of $0.28

·                  Adjusted Net Income of $29.5 million, up 30.6% compared to the prior year, with Adjusted Diluted EPS of $0.31

·                  Full year 2013 guidance unchanged for revenue of $880.0 million to $900.0 million and Adjusted Diluted EPS of $1.17 to $1.21, with revenue now expected to be at the higher end of the range

 

Fiscal 2013 Third Quarter Results

 

Revenue for the third fiscal quarter was $230.2 million, an increase of 21.6% compared to $189.3 million in the prior year period.  Organic growth was approximately 14% as compared to the prior year period.  The increase in the North America segment’s external sales was 20.1%, which was mainly driven by growth across the Company’s customer base.  Wesco Aircraft continues to demonstrate strong international growth with external sales in the Rest of World segment increasing by 27.3% this quarter when compared to the prior year period.  In the third quarter, Ad hoc, JIT and LTA sales as a percentage of net sales represented 40%, 27% and 33%, respectively, compared to 39%, 24% and 37%, respectively, for the same period last year.

 

Net Income for the third quarter was $27.0 million, resulting in Diluted EPS of $0.28. This compares to $22.3 million or $0.23 in Diluted EPS in the prior year period.  Adjusted Net Income was $29.5 million and Adjusted Diluted EPS was $0.31 in the third quarter of 2013 as compared to $22.6 million or $0.24 per share in the prior year period.  The increases in Diluted EPS and Adjusted Diluted EPS were primarily the result of higher sales partially offset by selling, general and administrative expenses.  Adjusted EBITDA for the period was $49.7 million as compared to $41.1 million for the same period in 2012.

 

Wesco Aircraft’s Chairman, President and Chief Executive Officer, Randy Snyder said, “We are very happy with our results this quarter.  We continue to see robust activity, with new and existing customers in all of the regions we serve.  We are growing our business and expanding our market share.  We had a number of significant contract awards during the quarter and are working on many new opportunities.  Our focus remains on providing the highest quality service and in delivering additional value to our customers.  Looking

 

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forward, we remain optimistic for the remainder of the year and are very excited about 2014.”

 

First Nine Months of Fiscal 2013

 

Revenue for the first nine months of fiscal 2013 was $667.3 million, an increase of 18.3% compared to $564.0 million in the prior year period.  On a fiscal year-to-date basis, Ad hoc, JIT and LTA sales as a percentage of net sales represented 40%, 26% and 34%, respectively, compared to 38%, 26%, and 36%, respectively, for the first nine months of fiscal 2012.

 

Net Income for the period was $74.8 million and Adjusted Net Income was $84.8 million.  Net Income resulted in Diluted EPS of $0.78 and Adjusted Net Income resulted in Adjusted Diluted EPS of $0.89.  This compared to Net Income of $65.2 million or Diluted EPS of $0.68 and Adjusted Net Income of $67.7 million and Adjusted Diluted EPS of $0.71 in the prior year period.  Adjusted EBITDA on a fiscal year-to-date basis was $144.9 million as compared to $126.9 million in 2012.

 

Financial Outlook

 

Wesco Aircraft confirms its fiscal year 2013 guidance as revised after its fiscal second quarter of 2013, with revenue at the higher end of the range of $880.0 million to $900.0 million and Adjusted Diluted EPS in the range of $1.17 to $1.21.

 

Conference Call Information

 

Wesco Aircraft will hold a conference call to discuss its third quarter results at 5:00 p.m. ET on July 31, 2013.  The conference call can be accessed by dialing 888-771-4371 (domestic) or 847-585-4405 (international).  Participants will need to enter passcode 35272811.

 

The conference call will be simultaneously broadcast on Wesco Aircraft’s Investor Relations website (http://ir.wescoair.com).

 

Following the live webcast, a replay will be available on the Company’s website for one year.  A telephonic replay will also be available approximately one hour after the conference call and may be accessed by dialing 888-843-7419 (domestic) or 630-652-3042 (international) and entering passcode 35272811.  The telephonic replay will be available until 11:59 pm PT August 7, 2013.

 

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.

 

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The Company believes it offers one of the world’s broadest inventory of aerospace parts, comprised of more than 525,000 different stock keeping units, including hardware, bearings, tools, electronic components and machined parts. Wesco Aircraft has more than 1,200 employees across 42 locations in 12 countries.

 

To learn more about Wesco Aircraft, visit our website at www.wescoair.com.

 

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, (iii) unusual or non-recurring items and (iv) the tax effect of items (i) through (iii) 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 and (iv) unusual or non-recurring items.

 

Wesco Aircraft 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

 

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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 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, 2012, as supplemented by the Company’s Quarterly Report on Form 10-Q for the quarterly periods ended December 31, 2012 and March 31, 2013. 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

 

Nine Months Ended

 

 

 

June 30, 2013

 

June 30, 2012

 

June 30, 2013

 

June 30, 2012

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

230,236

 

$

189,346

 

$

667,269

 

$

564,044

 

Cost of sales

 

148,345

 

122,067

 

429,970

 

359,417

 

Gross profit

 

81,891

 

67,279

 

237,299

 

204,627

 

Selling, general and administrative expenses

 

35,756

 

32,327

 

105,377

 

88,231

 

Income from operations

 

46,135

 

34,952

 

131,922

 

116,396

 

Interest expense, net

 

(4,680

)

(5,836

)

(20,748

)

(18,181

)

Other expense, net

 

(563

)

1,157

 

1,170

 

616

 

Income before provision for income taxes

 

40,892

 

30,273

 

112,344

 

98,831

 

Provision for income taxes

 

(13,866

)

(7,980

)

(37,504

)

(33,637

)

Net income

 

$

27,026

 

$

22,293

 

$

74,840

 

$

65,194

 

 

 

 

 

 

 

 

 

 

 

Net income per share:

 

 

 

 

 

 

 

 

 

Basic

 

$

0.29

 

$

0.24

 

$

0.80

 

$

0.71

 

Diluted

 

$

0.28

 

$

0.23

 

$

0.78

 

$

0.68

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

93,556

 

92,486

 

92,985

 

91,815

 

Diluted

 

95,924

 

96,068

 

95,579

 

95,554

 

 

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Exhibit 2

 

Wesco Aircraft Holdings, Inc.

Condensed Consolidated Balance Sheets (UNAUDITED)

(In thousands)

 

 

 

June 30, 2013

 

September 30,
2012

 

 

 

 

 

 

 

Assets

 

 

 

 

 

Cash and cash equivalents

 

$

60,959

 

$

60,856

 

Accounts receivable, net

 

145,631

 

130,013

 

Inventories, net

 

611,029

 

558,466

 

Other current assets

 

39,089

 

53,944

 

Deferred income taxes

 

32,022

 

32,872

 

Total current assets

 

888,730

 

836,151

 

Long-term assets

 

694,062

 

701,265

 

Total assets

 

$

1,582,792

 

$

1,537,416

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

Accounts payable

 

$

87,804

 

$

79,940

 

Other current liabilities

 

18,386

 

19,788

 

Income taxes payable

 

2,833

 

2,078

 

Capital lease obligations—current portion

 

1,119

 

593

 

Total current liabilities

 

110,142

 

102,399

 

Long-term debt

 

578,000

 

626,000

 

Capital lease obligations

 

844

 

205

 

Deferred income taxes

 

65,386

 

55,445

 

Total Long-term liabilities

 

644,230

 

681,650

 

Total liabilities

 

754,372

 

784,049

 

Total stockholders’ equity

 

828,420

 

753,367

 

Total liabilities and stockholders’ equity

 

$

1,582,792

 

$

1,537,416

 

 

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Exhibit 3

 

Wesco Aircraft Holdings, Inc.

Condensed Consolidated Statements of Cash Flows (UNAUDITED)

(In thousands)

 

 

 

Nine Months Ended

 

 

 

June 30, 2013

 

June 30, 2012

 

Cash flows from operating activities

 

 

 

 

 

Net income

 

$

74,840

 

$

65,194

 

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

 

 

 

 

 

Amortization of intangible assets

 

4,952

 

2,769

 

Depreciation

 

3,543

 

4,132

 

Amortization of deferred financing costs

 

7,158

 

2,201

 

Bad debt and sales return reserve

 

64

 

(498

)

Non-cash foreign currency exchange

 

1,077

 

14

 

Non-cash stock-based compensation

 

2,712

 

1,148

 

Excess tax benefit related to stock options exercised

 

(3,120

)

(1,778

)

Change in value of derivative

 

 

(1,703

)

Deferred income tax provision

 

10,771

 

11,743

 

Loss on fixed asset disposal

 

 

354

 

Changes in assets and liabilities

 

 

 

 

 

Accounts receivable

 

(22,344

)

(18,467

)

Inventories

 

(53,733

)

(23,148

)

Income taxes receivable

 

22,508

 

(8,745

)

Prepaid expenses and other assets

 

(4,888

)

(2,789

)

Accounts payable

 

13,656

 

14,758

 

Accrued expenses and other liabilities

 

(1,195

)

(570

)

Income taxes payable

 

900

 

1,401

 

Net cash provided by operating activities

 

56,901

 

46,016

 

Cash flows from investing activities

 

 

 

 

 

Purchases of property and equipment

 

(1,844

)

(6,074

)

Proceeds from sale of equipment

 

 

2,737

 

Net cash used in investing activities

 

(1,844

)

(3,337

)

Cash flows from financing activities

 

 

 

 

 

Proceeds from issuance of long-term debt

 

625,000

 

95,000

 

Repayments of long-term debt

 

(673,000

)

(25,000

)

Financing fees

 

(7,274

)

 

Repayment of capital lease obligations

 

(910

)

(1,559

)

Excess tax benefit related to stock options exercised

 

3,120

 

1,778

 

Proceeds from exercise of stock options

 

7,177

 

5,661

 

Purchase of Treasury Stock

 

(8,452

)

(0

)

Net cash provided by (used in) financing activities

 

(54,339

)

75,880

 

Effect of foreign currency exchange rates on cash and cash equivalents

 

(615

)

(44

)

Net increase in cash and cash equivalents

 

103

 

118,515

 

Cash and cash equivalents, beginning of period

 

60,856

 

45,525

 

Cash and cash equivalents, end of period

 

$

60,959

 

$

164,040

 

 

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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

 

Nine Months Ended

 

 

 

June 30, 2013

 

June 30, 2012

 

June 30, 2013

 

June 30, 2012

 

 

 

 

 

 

 

 

 

 

 

EBITDA & Adjusted EBITDA

 

 

 

 

 

 

 

 

 

Net income

 

$

27,026

 

$

22,293

 

$

74,840

 

$

65,194

 

Provision for income taxes

 

13,866

 

7,980

 

37,504

 

33,637

 

Interest and other, net

 

4,680

 

5,836

 

20,748

 

18,181

 

Depreciation and amortization

 

2,775

 

2,269

 

8,495

 

6,901

 

EBITDA

 

48,347

 

38,378

 

141,587

 

123,913

 

Unusual or non-recurring items

 

1,373

 

2,747

 

3,284

 

2,952

 

Adjusted EBITDA

 

$

49,720

 

$

41,125

 

$

144,871

 

$

126,865

 

 

 

 

 

 

 

 

 

 

 

Adjusted Net Income

 

 

 

 

 

 

 

 

 

Net income

 

$

27,026

 

$

22,293

 

$

74,840

 

$

65,194

 

Amortization of intangible assets

 

1,643

 

923

 

4,952

 

2,769

 

Amortization of deferred financing costs

 

791

 

601

 

7,158

 

2,201

 

Unusual or non-recurring items

 

1,373

 

472

 

3,284

 

678

 

Adjustments for tax effect

 

(1,336

)

(1,708

)

(5,403

)

(3,169

)

Adjusted Net Income

 

$

29,497

 

$

22,581

 

$

84,831

 

$

67,673

 

 

 

 

 

 

 

 

 

 

 

Adjusted Basic Earnings Per Share

 

 

 

 

 

 

 

 

 

Weighted-average number of basic shares outstanding

 

93,556

 

92,486

 

92,985

 

91,815

 

Adjusted Net Income Per Basic Shares

 

$

0.32

 

$

0.24

 

$

0.91

 

$

0.74

 

 

 

 

 

 

 

 

 

 

 

Adjusted Diluted Earnings Per Share

 

 

 

 

 

 

 

 

 

Weighted-average number of diluted shares outstanding

 

95,924

 

96,068

 

95,579

 

95,554

 

Adjusted Net Income Per Diluted Shares

 

$

0.31

 

$

0.24

 

$

0.89

 

$

0.71

 

 

Contact Information

 

Mark Davidson

Investor Relations

661-802-5090

Mark.Davidson@wescoair.com

 

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