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 first quarter ended December 31,
2012.
Highlights
- Revenue of $211.2 million, up 9.7%
compared to $192.6 million in the prior year
- Net Income of $18.4 million, with
Diluted Earnings Per Share of $0.19
- Adjusted Net Income of $24.1 million,
with Adjusted Diluted Earnings Per Share of $0.25
- Full year 2013 guidance unchanged for
sales of $865 to $890 million, Diluted EPS of $1.08 to $1.12, and
Adjusted Diluted EPS of $1.14 to $1.19.
Fiscal 2013 First Quarter Results
Revenue for the first fiscal quarter was $211.2 million, an
increase of 9.7% compared to $192.6 million in the prior year
period. The increase in the North America segment was 10.3% 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 32.9% compared
to the prior year. In the first quarter, Ad Hoc, JIT and LTA sales
as a percentage of net sales represented 40%, 26% and 34%,
respectively, compared to 35%, 31% and 34%, respectively, for the
same period last year.
Net income for the first quarter was $18.4 million, resulting in
Diluted Earnings Per Share of $0.19. This compares to $23.2
million, or $0.24 per share in the prior year period. The reduction
in Diluted Earnings Per Share was primarily the result of a
write-off of deferred financing costs associated with the recent
refinancing of the Company's debt and credit facilities (approx.
$0.03 per share) and integration costs associated with the recent
acquisition of Interfast ($0.01 per share). Excluding these and
other unusual items, Adjusted Net Income was $24.1 million and
Adjusted Earnings Per Share was $0.25 in the first quarter of 2013
as compared to $24.3 million or $0.26 per share in the prior year
period. The current year period benefitted from higher sales,
primarily due to the Interfast acquisition, and a lower tax rate.
Offsetting these benefits were lower gross margins due to changes
in the hardware sales mix as well as lower margin electronic
product sales growing more rapidly than our hardware sales along
with the addition of SG&A costs associated with the Interfast
business.
Wesco Aircraft’s Chairman, President and Chief Executive
Officer, Randy Snyder said, “Our first quarter results were strong
and give us high confidence in our full year guidance for sales
growth and earnings per share. We are experiencing high levels of
activity in bookings, additions to our current contracts, and
contract signings with new customers, which adds to our optimism
for the rest of the year and beyond. The Interfast integration is
also going very well and exceeding my expectations. None of this
would be achievable without our strong customer relationships, the
support of our suppliers and the dedicated efforts of the best
employees in the business.”
Financial Outlook
Based on our performance during the first quarter, Wesco
reiterates its guidance for 2013 and expects full year revenues to
be between $865 and $890 million, representing a growth rate of
approximately 11% to 15% over 2012 results. 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.
Conference Call Information
Wesco Aircraft will also hold a conference call to discuss its
first quarter results at 5:00 p.m. EST on January 29, 2013. The
conference call can be accessed by dialing 866-825-3308 (domestic)
or 617-213-8062 (international). Participants will need to enter
passcode 41826718.
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 888-286-8010 (domestic) or 617-801-6888
(international) and entering passcode 57269261. The telephonic
replay will be available until February 5, 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. 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 41
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, or OID,
(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, (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 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 filed on November 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)
Exhibit 1
Wesco Aircraft Holdings, Inc.
Consolidated Statements of Income
(UNAUDITED)
(In thousands, except for per share
data)
Three Months Ended
December 31, 2012
December 31, 2011
Net sales $ 211,170 $ 192,554 Cost of sales 137,070
119,282 Gross profit 74,100
73,272 Selling, general and administrative expenses 34,725
28,193 Income from operations
39,375 45,079 Interest expense, net (11,377 ) (6,514 ) Other
expense, net (155 ) (22 ) Income before
provision for income taxes 27,843 38,543 Provision for income taxes
(9,417 ) (15,365 ) Net income $ 18,426
$ 23,178 Net income per share:
Basic $ 0.20 $ 0.25 Diluted $ 0.19
$ 0.24 Weighted average shares
outstanding: Basic 92,514 91,198 Diluted 95,179 94,979
Exhibit 2
Wesco Aircraft Holdings, Inc.
Condensed Consolidated Balance Sheets (UNAUDITED) (In
thousands)
December 31, 2012
September 30, 2012
Assets Cash and cash equivalents $ 39,734 $ 60,856
Accounts receivable, net 129,667 130,013 Inventories 572,731
557,216 Other current assets 53,764 53,944 Deferred income taxes
32,396 32,872 Total current assets 828,292 834,901
Long-term assets 702,586 702,515 Total assets $
1,530,878 $ 1,537,416
Liabilities and Stockholders’
Equity Accounts payable $ 72,862 $ 79,940 Other current
liabilities 14,758 19,788 Income taxes payable 2,843 2,078
Long-term debt—current portion 21,250 - Capital lease
obligations—current portion 1,085 593 Total current
liabilities 112,798 102,399 Long-term debt 593,750
626,000 Capital lease obligations 1,342 205 Deferred income taxes
57,647 55,445 Total Long-term liabilities
652,739 681,650 Total liabilities 765,537 784,049 Total
stockholders’ equity 765,341 753,367 Total
liabilities and stockholders’ equity $ 1,530,878 $ 1,537,416
Exhibit 3
Wesco Aircraft Holdings, Inc.
Condensed Consolidated Statements of Cash Flows (UNAUDITED)
(In thousands)
Three Months Ended
December 31, 2012
December 31, 2011
Cash flows from operating
activities
Net income $ 18,426 $ 23,178 Adjustments to reconcile net income to
net cash provided by operating activities Amortization of
intangible assets 1,663 923 Depreciation 1,253 1,459 Amortization
of deferred financing costs 5,664 998 Bad debt and sales return
reserve (18 ) (90 ) Non-cash foreign currency exchange 230 (39 )
Non-cash stock-based compensation 987 665 Excess tax benefit
related to stock options exercised (741 ) - Change in value of
derivative - (734 ) Deferred income tax provision 2,677 2,070 Loss
on fixed asset disposal - 339 Changes in assets and liabilities
Accounts receivable (1,343 ) (3,252 ) Income taxes receivable 3,891
5,808 Inventories (16,034 ) (5,382 ) Prepaid expenses and other
assets (2,885 ) (2,008 ) Accounts payable (5,460 ) 2,682 Accrued
expenses and other liabilities (5,017 ) (6,663 ) Income taxes
payable 788 2,643 Net cash
provided by operating activities 4,081
22,597
Cash flows from investing
activities
Purchases of property and equipment (597 ) (644 ) Proceeds from
sale of equipment - 2,759 Net
cash provided by (used in) investing activities (597 )
2,115
Cash flows from financing
activities
Proceeds from issuance of long-term debt 615,000 - Repayments of
long-term debt (626,000 ) (25,000 ) Financing fees (7,274 ) -
Repayment of capital lease obligations (341 ) (521 ) Excess tax
benefit related to stock options exercised 741 - Proceeds from
exercise of stock options 1,787 - Purchase of Treasury Stock
(8,452 ) - Net cash used in financing
activities (24,539 ) (25,521 ) Effect of
foreign currency exchange rates on cash and cash equivalents
(67 ) (41 ) Net decrease in cash and cash equivalents
(21,122 ) (850 ) Cash and cash equivalents,
beginning of period 60,856 45,525
Cash and cash equivalents, end of period $ 39,734
$ 44,675
Exhibit 4
Wesco Aircraft Holdings, Inc.
Non-GAAP Financial Information
(UNAUDITED)
(In thousands, except for per share
data)
Three Months Ended
December 31, 2012
December 31, 2011
EBITDA & Adjusted EBITDA Net income $ 18,426 $
23,178 Provision for income taxes 9,417 15,365 Interest and other,
net 11,377 6,514 Depreciation and amortization 2,916
2,382 EBITDA 42,136
47,439 Unusual or non-recurring items
1,454 - Adjusted EBITDA $
43,590 $ 47,439
Adjusted Net
Income Net income $ 18,426 $ 23,178
Amortization of intangible assets
1,663 923 Amortization of deferred financing costs 5,664 998
Unusual or non-recurring items
1,454
- Adjustments for tax effect (3,082 )
(768 ) Adjusted Net Income $ 24,125 $ 24,331
Adjusted Basic Earnings Per Share
Weighted-average number of basic shares outstanding 92,514
91,198 Adjusted Net Income Per
Basic Shares $ 0.26 $ 0.27
Adjusted Diluted Earnings Per Share Weighted-average number
of diluted shares outstanding 95,179
94,979 Adjusted Net Income Per Diluted Shares $ 0.25
$ 0.26
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