Wesco Aircraft Holdings, Inc. (NYSE:WAIR), the world's leading
provider of comprehensive supply chain management services to the
global aerospace industry, today announced results for its fiscal
2016 fourth quarter ended September 30, 2016.
Fiscal 2016 Fourth Quarter Highlights(1)
- Net sales of $365.6 million, down 1.1 percent
- Constant-currency sales(2) of $377.2 million, up 2.0
percent
- Net income of $23.3 million, or $0.24 per diluted share
- Adjusted net income(3) of $29.9 million, or $0.30 per diluted
share
- Adjusted earnings before interest, taxes, depreciation and
amortization(3) (EBITDA) of $49.6 million, or 13.6 percent of net
sales
- Net cash provided by operating activities of $50.9 million;
free cash flow(3) of $48.0 million
Dave Castagnola, president and chief executive
officer, said, “Our fiscal 2016 fourth-quarter performance was a
solid end to the fiscal year, with continued contract sales
momentum, reduced SG&A expenses and higher operating income.
Net cash from operating activities and free cash flow(3) were
strong in the quarter, enabling us to pay down debt further. We
booked new business and expanded the scope of work with customers
in the fourth quarter of fiscal 2016 at a sustained pace, setting
us on a path for sales growth in fiscal 2017.
“Fiscal 2016 was a year of improvement and
transformational change for Wesco Aircraft. We accomplished nearly
all of our goals for the year. While net sales were down one
percent in fiscal 2016, we recorded low-single-digit
constant-currency sales growth. We also reduced SG&A expenses
by $32 million and achieved free cash flow conversion(3) of 113
percent. Adjusted EBITDA margin(3) improved by 50 basis points in
fiscal 2016. This was Wesco’s first EBITDA margin expansion in many
years, and it was achieved in spite of a negative impact from
foreign currency movements and certain investment decisions we made
for the future. We paid down debt by $111 million in fiscal 2016,
which brings total debt repayments to more than $250 million over
the last two years. The progress made in fiscal 2016 sets Wesco on
an improved foundation as we enter fiscal 2017.”
Fiscal 2016 Fourth Quarter
Results(1)
Net sales in the fiscal 2016 fourth quarter were
$365.6 million, compared with $369.7 million in the prior-year
fourth quarter. Constant-currency sales(2) increased 2.0 percent
year-over-year in the fourth quarter of fiscal 2016, primarily due
to a mid-single-digit percentage increase in contract sales. The
growth in contracts was partially offset by a mid-single-digit
percentage decline in ad-hoc sales over the same period.
Gross profit was $95.5 million in the fourth
quarter of fiscal 2016, compared with $6.1 million in the fiscal
2015 fourth quarter, which reflected inventory adjustments that
were previously reported. Adjusted gross profit(3) excluding these
inventory adjustments was $97.4 million in the fiscal 2015 fourth
quarter.
Gross margin was 26.1 percent in the fiscal 2016
fourth quarter, compared with an adjusted gross margin(3) of 26.4
percent in the same period last year. The decrease primarily
reflects a negative impact from foreign currency movements,
partially offset by a favorable impact from contract margins and a
decline in inventory provision related to inventory
adjustments.
Selling, general and administrative (SG&A)
expenses in the fiscal 2016 fourth quarter decreased 19.4 percent
compared with the same period last year, primarily due to lower
people-related costs, professional fees and the impact of foreign
currency movements.
SG&A expense as a percentage of net sales
was 15.1 percent in the fourth quarter, compared with 18.5 percent
in the same period last year.
Income from operations totaled $40.3 million, or
11.0 percent of net sales, in the fiscal 2016 fourth quarter. This
compares with a loss from operations of $326.2 million in the
fiscal 2015 fourth quarter, which reflected the inventory
adjustments described above and an impairment in the value of
goodwill that was previously reported. Adjusted income from
operations(3) excluding these adjustments was $28.9 million, or 7.8
percent of net sales, in the same period last year. The increases
in adjusted income from operations(3) and adjusted operating
margin(3) were primarily due to lower SG&A expenses, partially
offset by the impact of foreign currency movements.
Other (expense) income, net decreased by $3.4
million in the fiscal 2016 fourth quarter, primarily due to a gain
of $2.7 million in last year’s fourth quarter related to
transactions that were denominated in currencies other than the
functional currency of our reporting subsidiaries, primarily the
British pound.
The company's effective tax rate was 23.9
percent in the fourth quarter of fiscal 2016, compared with 35.5
percent in the year-ago quarter, primarily due to a favorable mix
of taxable income across jurisdictions and discrete tax items.
Net income was $23.3 million, or $0.24 per
diluted share, in the fiscal 2016 fourth quarter, compared with a
net loss of $214.0 million, or $2.21 per diluted share. Adjusted
net income(3) was $29.9 million, or $0.30 per diluted share,
compared with $26.5 million, or $0.27 per diluted share, in the
same period last year.
Adjusted EBITDA(3) in the fiscal 2016 fourth
quarter was $49.6 million, compared with $46.0 million in the same
period last year. Adjusted EBITDA(3) was 13.6 percent of net sales,
compared with 12.4 percent in the same period last year.
Fiscal 2016 Year Results(1)
Net sales in fiscal 2016 were $1.5 billion, 1.4
percent lower than the same period last year. Constant-currency
sales(2) increased 0.7 percent, and were 2.5 percent higher
excluding both currency effects and the net impact of the
previously disclosed large commercial contract that ended on March
31, 2015.
Income from operations was $158.8 million in
fiscal 2016, compared with a loss from operations of $206.4 million
in the same period last year. Adjusted income from operations(3)
excluding the inventory adjustments and goodwill impairment
described above was $148.7 million in fiscal 2015. Income from
operations as a percent of net sales was 10.7 percent in fiscal
2016, compared with an adjusted operating margin(3) of 9.9 percent
in fiscal 2015. The higher operating margin reflects a reduction in
SG&A expenses, partially offset by lower gross profit and a
negative impact from currency movements.
Net income in fiscal 2016 was $91.4 million, or
$0.93 per diluted share, compared with a net loss of $154.7
million, or $1.60 in the same period last year. Adjusted net
income(3) was $110.6 million, or $1.13 per diluted share, compared
with $100.6 million, or $1.04 per diluted share in the same period
last year.
Adjusted EBITDA(3) in fiscal 2016 was $196.9
million, or 13.3 percent of net sales, compared with $192.2
million, or 12.8 percent of net sales, in the same period last
year.
Net cash provided by operating activities was
$117.5 million in fiscal 2016, compared with $141.2 million in the
same period last year. Free cash flow(3) was $103.5 million in
fiscal 2016, compared with $131.5 million in the same period last
year. The free cash flow conversion ratio(3) was 113 percent of net
income in fiscal 2016.
Fiscal 2017 Outlook
Castagnola concluded, “We believe fiscal 2016
results provide the foundation for a stronger fiscal 2017. Our
outlook for next year largely is based on business secured in
fiscal 2016 through our large strategic customer and MRO channels,
appropriately considering the timing of sales from implementation
of new business wins, which can be influenced by many factors. We
also remain focused on increasing margins, leveraging our improved
cost structure and continuing our emphasis on cash conversion.
“We are targeting constant-currency(4) sales
growth in the range of three percent to five percent, adjusted net
income(3) per diluted share in the range of $1.15 to $1.20 and free
cash flow(3) in the range of 90 percent to 95 percent of net income
in fiscal 2017. We plan to continue using free cash flow to pay
down debt in fiscal 2017.”
Conference Call Information
Wesco Aircraft will hold a conference call to
discuss its fiscal 2016 fourth quarter results at 2:00
p.m. PST (5:00 p.m. EST) today, November 17,
2016. The conference call can be accessed by dialing
888-771-4371 (domestic) or 847-585-4405 (international) and
entering passcode 43725595.
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 also will be available approximately two hours after the
conference call and may be accessed by dialing 888-843-7419
(domestic) or 630-652-3042 (international) and entering passcode
43725595. The telephonic replay will be available until
November 24, 2016 at 11:59 p.m. EST.
About Wesco Aircraft
Wesco Aircraft is the world’s leading
distributor and provider of comprehensive supply chain management
services to the global aerospace industry, based on annual sales.
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 one of the world’s broadest portfolios
of aerospace products, including chemical, electrical and C-class
hardware and comprised of more than 565,000 active SKUs.
To learn more about Wesco Aircraft, visit our
website at www.wescoair.com. Follow Wesco Aircraft on LinkedIn at
https://www.linkedin.com/company/wesco-aircraft-corp.
Footnotes
(1) The financial results for the fourth quarter
and year-end of fiscal 2016 are preliminary and are subject to
completion of the company’s analysis of the adequacy of its
inventory excess and obsolete reserves. As a result, these amounts
may differ by up to $3 million from the amounts that will be
reflected in the company’s final consolidated financial statements
as of and for the quarter and year ended September 30, 2016.
(2) The non-GAAP financial measure
“constant-currency sales” replaces “net sales excluding currency
effects,” as previously presented by the company. The definition of
“constant-currency sales” is consistent with the prior
presentation. See Exhibits for reconciliation of GAAP to non-GAAP
results.
(3) Non-GAAP financial measure – see Exhibits
for reconciliations of GAAP to non-GAAP results.
(4) Currency rates assumed to remain at
September 30, 2016 levels.
Non-GAAP Financial
Information
Adjusted gross profit in the fiscal 2015 fourth
quarter and full year represents gross profit plus the inventory
adjustments noted above; adjusted gross margin represents adjusted
gross profit divided by net sales in the periods.
Adjusted income from operations in the fiscal
2015 fourth quarter and full year represents loss from operations
plus the inventory adjustments and goodwill impairment noted above;
adjusted operating margin represents adjusted income from
operations divided by net sales.
Adjusted EBITDA represents net income (loss)
before: (i) income tax provision (benefit), (ii) net
interest expense, (iii) depreciation and amortization and
(iv) unusual or non-recurring items.
Adjusted EBITDA margin represents adjusted
EBITDA divided by net sales.
Adjusted net income represents net income (loss)
before: (i) amortization of intangible assets,
(ii) amortization or write-off of deferred financing costs,
(iii) unusual or non-recurring items and (iv) the tax
effect of items (i) through (iii) above calculated using
an estimated effective tax rate.
Adjusted basic earnings per share represent
basic earnings per share calculated using adjusted net income as
opposed to net income.
Adjusted diluted earnings per share represent
diluted earnings per share calculated using adjusted net income as
opposed to net income.
Constant-currency sales represent net sales for
the fiscal 2016 fourth quarter and year-to-date translated at the
corresponding fiscal 2015 periodical average exchange rates.
Constant-currency sales excluding large
commercial contract represent net sales for the fiscal 2016
year-to-date period translated at the corresponding fiscal 2015
periodical average exchange rates, further adjusted to remove sales
under a commercial hardware contract that ended on March 31, 2015
and sales in fiscal 2016 that were related to this contract.
Free cash flow represents net cash provided by
operating activities less purchases of property and equipment; free
cash flow conversion represents free cash flow divided by net
income.
Wesco Aircraft utilizes and discusses adjusted
gross profit, adjusted gross margin, adjusted income from
operations, adjusted operating margin, adjusted EBITDA, adjusted
EBITDA margin, adjusted net income, adjusted basic earnings per
share, adjusted diluted earnings per share, constant-currency
sales, constant-currency sales excluding the impact of large
commercial contract, free cash flow and free cash flow conversion,
which are non-GAAP measures management uses to evaluate the
company’s business, because it believes these measures assist
investors and analysts in comparing the company’s performance
across reporting periods on a consistent basis by excluding items
that management does not believe are indicative of core operating
performance. Wesco Aircraft believes these metrics are used in the
financial community, and the company presents these metrics to
enhance understanding of its operating performance. Readers should
not consider adjusted EBITDA and adjusted net income as
alternatives to net income, determined in accordance with GAAP, as
an indicator of operating performance. Adjusted gross profit,
adjusted gross margin, adjusted income from operations, adjusted
operating margin, adjusted EBITDA, adjusted EBITDA margin, adjusted
net income, adjusted basic earnings per share, adjusted diluted
earnings per share, constant-currency sales, constant-currency
sales excluding large commercial contract, free cash flow and
free cash flow conversion are not measurements of financial
performance under GAAP, and these metrics may not be comparable to
similarly titled measures of other companies. See Exhibits 4, 5, 6
and 7 for reconciliations of adjusted gross profit, adjusted gross
margin, adjusted income from operations, adjusted operating margin,
adjusted EBITDA, adjusted EBITDA margin, adjusted net income,
adjusted basic earnings per share, adjusted diluted earnings per
share, constant-currency sales, constant-currency sales excluding
large commercial contract, free cash flow and free cash flow
conversion to the most directly comparable financial measures
calculated and presented in accordance with GAAP.
Forward Looking Statements
This press release contains forward-looking
statements (including within the meaning of the Private Securities
Litigation Reform Act of 1995) concerning Wesco Aircraft
Holdings, Inc. These statements may discuss goals,
intentions and expectations as to future plans, trends, events,
results of operations or financial condition, or otherwise, based
on current beliefs of management, as well as assumptions made by,
and information currently available to, management. In some
cases, readers can identify forward-looking statements by the use
of forward-looking terms such as “believe,” "continue," “goal,”
"grow," “improve,” “increase,” “outlook,” “plan,” “target,” “will”
or similar words, phrases or expressions. These
forward-looking statements are subject to various risks and
uncertainties, many of which are outside the company’s
control. Therefore, the reader should not place undue reliance
on such statements.
Factors that could cause actual results to
differ materially from these forward-looking statements include,
but are not limited to, the following: general economic and
industry conditions; conditions in the credit markets; changes in
military spending; risks unique to suppliers of equipment and
services to the U.S. government; risks associated with the
company’s long-term, fixed-price agreements that have no guarantee
of future sales volumes; risks associated with the loss of
significant customers, a material reduction in purchase orders by
significant customers, or the delay, scaling back or elimination of
significant programs on which the company relies; the company’s
ability to effectively compete in its industry; the company’s
ability to effectively manage its inventory; the company’s
suppliers’ ability to provide it with the products the company
sells in a timely manner, in adequate quantities and/or at a
reasonable cost; the company’s ability to maintain effective
information technology systems; the company’s ability to retain key
personnel; risks associated with the company’s international
operations, including exposure to foreign currency movements; risks
associated with assumptions the company makes in connection with
its critical accounting estimates (including goodwill) and legal
proceedings; the company’s dependence on third-party package
delivery companies; fuel price risks; fluctuations in the company’s
financial results from period-to-period; environmental risks; risks
related to the handling, transportation and storage of chemical
products; risks related to the aerospace industry and the
regulation thereof; risks related to the company’s indebtedness;
and other risks and uncertainties.
The foregoing list of factors is not
exhaustive. The reader should carefully consider the foregoing
factors and the other risks and uncertainties that affect the
company’s business, including those described in Wesco Aircraft’s
Annual Report on Form 10-K, Quarterly Reports on
Form 10-Q, Current Reports on Form 8-K and other
documents filed from time to time with the Securities and Exchange
Commission. All forward-looking statements included in this
news release (including information included or incorporated by
reference herein) are based upon information available to the
company as of the date hereof, and the company undertakes no
obligation to update or revise publicly any forward-looking
statements, whether as a result of new information, future events
or otherwise.
Exhibits:
Exhibit 1: |
Consolidated Statements of Income (Loss)
(Preliminary and Unaudited) |
Exhibit 2: |
Condensed Consolidated Balance Sheets
(Preliminary and Unaudited) |
Exhibit 3: |
Consolidated Statements of Cash Flows
(Preliminary and Unaudited) |
Exhibit 4: |
Non-GAAP Financial Information (Preliminary and
Unaudited) |
Exhibit 5: |
Non-GAAP Financial Information –
Constant-Currency Sales and Constant-Currency Sales Excluding Large
Commercial Contract (Preliminary and Unaudited) |
Exhibit 6: |
Non-GAAP Financial Information – Free Cash Flow
(Preliminary and Unaudited) |
Exhibit 7: |
Non-GAAP Financial Information - Fiscal 2017
Outlook (Unaudited) |
|
|
Preliminary Fourth Quarter and Year-End 2016 Results
The financial results for the fourth quarter and
year-end of fiscal 2016 are preliminary and are subject to
completion of the company’s analysis of the adequacy of its
inventory excess and obsolete reserves. As a result, these amounts
may differ by up to $3 million from the amounts that will be
reflected in the company’s final consolidated financial statements
as of and for the quarter and year ended September 30, 2016.
Exhibit 1 |
|
Wesco Aircraft
Holdings, Inc.Consolidated Statements of Income
(Loss) (PRELIMINARY AND UNAUDITED) (1)(In thousands,
except share data) |
|
|
Three Months Ended September
30, |
|
Twelve Months Ended September
30, |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Net sales |
$ |
365,595 |
|
|
$ |
369,654 |
|
|
$ |
1,477,366 |
|
|
$ |
1,497,615 |
|
Cost of sales |
270,110 |
|
|
363,523 |
|
|
1,083,674 |
|
|
1,173,120 |
|
Gross
profit |
95,485 |
|
|
6,131 |
|
|
393,692 |
|
|
324,495 |
|
Selling, general and
administrative expenses |
55,234 |
|
|
68,510 |
|
|
234,942 |
|
|
267,089 |
|
Goodwill
impairment charge |
— |
|
|
263,771 |
|
|
— |
|
|
263,771 |
|
Income
(loss) from operations |
40,251 |
|
|
(326,150 |
) |
|
158,750 |
|
|
(206,365 |
) |
Interest expense, net |
(9,465 |
) |
|
(9,037 |
) |
|
(36,901 |
) |
|
(37,092 |
) |
Other (expense) income,
net |
(219 |
) |
|
3,204 |
|
|
3,741 |
|
|
1,841 |
|
Income
(loss) before income taxes |
30,567 |
|
|
(331,983 |
) |
|
125,590 |
|
|
(241,616 |
) |
(Provision) benefit for
income taxes |
(7,306 |
) |
|
117,985 |
|
|
(34,212 |
) |
|
86,872 |
|
Net income
(loss) |
$ |
23,261 |
|
|
$ |
(213,998 |
) |
|
$ |
91,378 |
|
|
$ |
(154,744 |
) |
|
|
|
|
|
|
|
|
Net income (loss) per
share: |
|
|
|
|
|
|
|
Basic |
$ |
0.24 |
|
|
$ |
(2.21 |
) |
|
$ |
0.94 |
|
|
$ |
(1.60 |
) |
Diluted |
$ |
0.24 |
|
|
$ |
(2.21 |
) |
|
$ |
0.93 |
|
|
$ |
(1.60 |
) |
Weighted average shares
outstanding: |
|
|
|
|
|
|
|
Basic |
97,994,386 |
|
|
97,042,433 |
|
|
97,634,155 |
|
|
96,955,043 |
|
Diluted |
98,681,699 |
|
|
97,042,433 |
|
|
98,165,856 |
|
|
96,955,043 |
|
Exhibit 2 |
|
Wesco Aircraft
Holdings, Inc.Condensed Consolidated Balance Sheets
(PRELIMINARY AND UNAUDITED) (1)(In thousands) |
|
|
September 30, 2016 |
|
September 30, 2015 |
Assets |
|
|
|
Cash and
cash equivalents |
$ |
77,061 |
|
|
$ |
82,866 |
|
Accounts
receivable, net |
249,195 |
|
|
253,348 |
|
Inventories |
713,470 |
|
|
701,535 |
|
Prepaid
expenses and other current assets |
10,203 |
|
|
10,004 |
|
Income taxes
receivable |
1,460 |
|
|
187 |
|
Deferred tax
assets, current |
— |
|
|
89,401 |
|
Total
current assets |
1,051,389 |
|
|
1,137,341 |
|
Long-term
assets |
904,816 |
|
|
883,632 |
|
Total
assets |
$ |
1,956,205 |
|
|
$ |
2,020,973 |
|
Liabilities and
Stockholders’ Equity |
|
|
|
Accounts
payable |
$ |
181,700 |
|
|
$ |
149,615 |
|
Accrued
expenses and other current liabilities |
26,424 |
|
|
38,896 |
|
Income taxes
payable |
6,782 |
|
|
21,442 |
|
Capital
lease obligations, current portion |
1,471 |
|
|
1,044 |
|
Total
current liabilities |
216,377 |
|
|
210,997 |
|
Capital
lease obligations, less current portion |
1,710 |
|
|
1,824 |
|
Long-term
debt |
841,906 |
|
|
952,906 |
|
Deferred tax
liabilities, non-current |
4,092 |
|
|
30,693 |
|
Other
liabilities |
9,205 |
|
|
6,980 |
|
Total
long-term liabilities |
856,913 |
|
|
992,403 |
|
Total
liabilities |
1,073,290 |
|
|
1,203,400 |
|
Total
stockholders’ equity |
882,915 |
|
|
817,573 |
|
Total
liabilities and stockholders’ equity |
$ |
1,956,205 |
|
|
$ |
2,020,973 |
|
Exhibit 3 |
|
Wesco Aircraft
Holdings, Inc.Consolidated Statements of Cash
Flows (PRELIMINARY AND UNAUDITED) (1)(In
thousands) |
|
|
Twelve Months Ended September
30, |
|
2016 |
|
2015 |
Cash flows from
operating activities |
|
|
|
Net income
(loss) |
$ |
91,378 |
|
|
$ |
(154,744 |
) |
Adjustments
to reconcile net income (loss) to net cash provided by operating
activities |
|
|
|
Depreciation
and amortization |
27,980 |
|
|
27,726 |
|
Deferred
financing costs |
4,627 |
|
|
4,354 |
|
Bad debt and
sales return reserve |
(810 |
) |
|
354 |
|
Inventory
reserves |
14,615 |
|
|
95,052 |
|
Stock-based
compensation expense |
8,490 |
|
|
7,891 |
|
Goodwill
impairment charge |
— |
|
|
263,771 |
|
Excess tax
benefit related to stock-based incentive plans |
(1,098 |
) |
|
(443 |
) |
Deferred
income taxes |
13,212 |
|
|
(127,035 |
) |
Income from
equity investment |
(582 |
) |
|
(596 |
) |
Other
non-cash items |
(2,422 |
) |
|
3,491 |
|
Changes in
assets and liabilities |
|
|
|
Accounts
receivable |
(4,077 |
) |
|
43,841 |
|
Inventories |
(41,798 |
) |
|
(48,977 |
) |
Prepaid
expenses and other assets |
(1,204 |
) |
|
1,250 |
|
Income taxes
receivable |
(1,269 |
) |
|
16,036 |
|
Accounts
payable |
34,657 |
|
|
(9,992 |
) |
Accrued
expenses and other liabilities |
(11,008 |
) |
|
3,425 |
|
Income taxes
payable |
(13,236 |
) |
|
15,768 |
|
Net cash
provided by operating activities |
117,455 |
|
|
141,172 |
|
Cash flows from
investing activities |
|
|
|
Purchase of
property and equipment |
(13,992 |
) |
|
(9,631 |
) |
Proceeds
from sales of property, plant and equipment |
— |
|
|
17 |
|
Proceeds
from sales of assets |
2,000 |
|
|
— |
|
Acquisition
of business, net of cash acquired |
— |
|
|
(250 |
) |
Net cash
used in investing activities |
(11,992 |
) |
|
(9,864 |
) |
Cash flows from
financing activities |
|
|
|
Repayment of
long-term debt |
(111,000 |
) |
|
(149,750 |
) |
Financing
fees |
(2,126 |
) |
|
— |
|
Repayment of
capital lease obligations |
(1,309 |
) |
|
(1,511 |
) |
Excess tax
benefit related to stock-based incentive plans |
1,098 |
|
|
443 |
|
Net proceeds
from issuance of common stock |
6,073 |
|
|
823 |
|
Settlement
on restricted stock tax withholding |
(857 |
) |
|
(701 |
) |
Net cash
used in financing activities |
(108,121 |
) |
|
(150,696 |
) |
Effect of
foreign currency exchange rate on cash and cash equivalents |
(3,147 |
) |
|
(2,521 |
) |
Net decrease
in cash and cash equivalents |
(5,805 |
) |
|
(21,909 |
) |
Cash and
cash equivalents, beginning of period |
82,866 |
|
|
104,775 |
|
Cash and
cash equivalents, end of period |
$ |
77,061 |
|
|
$ |
82,866 |
|
Exhibit 4 |
|
Wesco Aircraft Holdings, Inc.Non-GAAP
Financial Information (PRELIMINARY AND
UNAUDITED) (1)(In thousands, except share
data) |
|
|
Three Months Ended September
30, |
|
Twelve Months Ended September
30, |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Net
Sales |
$ |
365,595 |
|
|
$ |
369,654 |
|
|
$ |
1,477,366 |
|
|
$ |
1,497,615 |
|
|
|
|
|
|
|
|
|
Adjusted Gross
Profit |
|
|
|
|
|
|
|
Gross profit |
$ |
95,485 |
|
|
$ |
6,131 |
|
|
$ |
393,692 |
|
|
$ |
324,495 |
|
Inventory
adjustment |
— |
|
|
91,280 |
|
|
— |
|
|
91,280 |
|
Adjusted Gross
Profit |
$ |
95,485 |
|
|
$ |
97,411 |
|
|
$ |
393,692 |
|
|
$ |
415,775 |
|
Adjusted Gross
Margin |
26.1 |
% |
|
26.4 |
% |
|
26.6 |
% |
|
27.8 |
% |
Adjusted Income
from Operations |
|
|
|
|
|
|
|
Income (loss) from
operations |
$ |
40,251 |
|
|
$ |
(326,150 |
) |
|
$ |
158,750 |
|
|
$ |
(206,365 |
) |
Goodwill
impairment |
— |
|
|
263,771 |
|
|
— |
|
|
263,771 |
|
Inventory
adjustment |
— |
|
|
91,280 |
|
|
— |
|
|
91,280 |
|
Adjusted income from
operations |
$ |
40,251 |
|
|
$ |
28,901 |
|
|
$ |
158,750 |
|
|
$ |
148,686 |
|
Adjusted operating
margin |
11.0 |
% |
|
7.8 |
% |
|
10.7 |
% |
|
9.9 |
% |
Adjusted Net
Income |
|
|
|
|
|
|
|
Net income (loss) |
$ |
23,261 |
|
|
$ |
(213,998 |
) |
|
$ |
91,378 |
|
|
$ |
(154,744 |
) |
Goodwill impairment |
— |
|
|
263,771 |
|
|
— |
|
|
263,771 |
|
Inventory adjustment |
— |
|
|
91,280 |
|
|
— |
|
|
91,280 |
|
Amortization of intangible
assets |
3,974 |
|
|
3,961 |
|
|
15,837 |
|
|
15,948 |
|
Amortization of deferred
financing costs |
1,483 |
|
|
1,092 |
|
|
4,627 |
|
|
4,354 |
|
Unusual or non-recurring
items (2) |
2,453 |
|
|
5,998 |
|
|
6,397 |
|
|
13,923 |
|
Adjustments for tax
effect |
(1,241 |
) |
|
(125,639 |
) |
|
(7,623 |
) |
|
(133,961 |
) |
Adjusted Net Income |
$ |
29,930 |
|
|
$ |
26,465 |
|
|
$ |
110,616 |
|
|
$ |
100,571 |
|
Adjusted
Earnings Per Share |
|
|
|
|
|
|
|
Adjusted Basic |
$ |
0.31 |
|
|
$ |
0.27 |
|
|
$ |
1.13 |
|
|
$ |
1.04 |
|
Adjusted diluted |
$ |
0.30 |
|
|
$ |
0.27 |
|
|
$ |
1.13 |
|
|
$ |
1.04 |
|
EBITDA &
Adjusted EBITDA |
|
|
|
|
|
|
|
Net income (loss) |
$ |
23,261 |
|
|
$ |
(213,998 |
) |
|
$ |
91,378 |
|
|
$ |
(154,744 |
) |
Provision (benefit) for
income taxes |
7,306 |
|
|
(117,985 |
) |
|
34,212 |
|
|
(86,872 |
) |
Interest expense,
net |
9,465 |
|
|
9,037 |
|
|
36,901 |
|
|
37,092 |
|
Depreciation and
amortization |
7,137 |
|
|
7,911 |
|
|
27,980 |
|
|
27,726 |
|
EBITDA |
47,169 |
|
|
(315,035 |
) |
|
190,471 |
|
|
(176,798 |
) |
Goodwill
impairment |
— |
|
|
263,771 |
|
|
— |
|
|
263,771 |
|
Inventory
adjustment |
— |
|
|
91,280 |
|
|
— |
|
|
91,280 |
|
Unusual or
non-recurring items (2) |
2,453 |
|
|
5,998 |
|
|
6,397 |
|
|
13,923 |
|
Adjusted EBITDA |
$ |
49,622 |
|
|
$ |
46,014 |
|
|
$ |
196,868 |
|
|
$ |
192,176 |
|
Adjusted EBITDA
margin |
13.6 |
% |
|
12.4 |
% |
|
13.3 |
% |
|
12.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
(2) Unusual and non-recurring items in the
fourth quarter and year-to-date periods of fiscal 2016 consisted of
integration and other related expenses of $641 and $1,852,
respectively, as well as business realignment and other expenses of
$1,812 and $4,545, respectively. Unusual and non-recurring items in
the fourth quarter and year-to-date periods of fiscal 2015
consisted of integration and other related expenses of $1,214 and
$7,713, respectively, as well as business realignment and other
expenses of $4,784 and $6,210, respectively.
Exhibit 5 |
|
Wesco Aircraft
Holdings, Inc.Non-GAAP Financial Information -
Constant-Currency Sales andConstant-Currency Sales
Excluding Large Commercial Contract (PRELIMINARY AND
UNAUDITED) (1)(Dollars in
thousands) |
|
|
Three Months Ended September
30, |
|
Increase(Decrease) |
|
PercentChange |
|
2016 |
|
2015 |
|
|
Net sales |
$ |
365,595 |
|
|
$ |
369,654 |
|
|
$ |
(4,059 |
) |
|
|
(1.1 |
)% |
Currency effects |
11,609 |
|
|
— |
|
|
11,609 |
|
|
|
Constant-currency
sales |
$ |
377,204 |
|
|
$ |
369,654 |
|
|
$ |
7,550 |
|
|
|
2.0 |
% |
|
|
|
|
|
|
|
|
|
Twelve Months Ended September
30, |
|
Increase(Decrease) |
|
PercentChange |
|
2016 |
|
2015 |
|
|
Net sales |
$ |
1,477,366 |
|
|
$ |
1,497,615 |
|
|
$ |
(20,249 |
) |
|
|
(1.4 |
)% |
Currency effects |
30,180 |
|
|
— |
|
|
30,180 |
|
|
|
Constant-currency
sales |
$ |
1,507,546 |
|
|
$ |
1,497,615 |
|
|
$ |
9,931 |
|
|
|
0.7 |
% |
Large commercial contract
(2) |
(9,782 |
) |
|
(36,172 |
) |
|
26,390 |
|
|
|
Constant-currency sales
excluding large commercial contract |
$ |
1,497,764 |
|
|
$ |
1,461,443 |
|
|
$ |
36,321 |
|
|
|
2.5 |
% |
|
|
|
|
|
|
|
|
(2) In fiscal 2015, the company sold $36,172 of
commercial hardware under a contract that ended on March 31, 2015,
as previously disclosed. In fiscal 2016, the company sold $9,782 of
additional commercial hardware related to this contract.
Exhibit 6 |
|
Wesco Aircraft
Holdings, Inc.Non-GAAP Financial Information
- Free Cash Flow (PRELIMINARY AND
UNAUDITED) (1)(Dollars in
thousands) |
|
|
Three Months Ended September
30, |
|
Increase(Decrease) |
|
PercentChange |
|
2016 |
|
2015 |
|
|
Free Cash
Flow |
|
|
|
|
|
|
|
Net cash provided by
operating activities |
$ |
50,862 |
|
|
$ |
57,319 |
|
|
$ |
(6,457 |
) |
|
|
(11.3 |
)% |
Purchase of property and
equipment |
(2,831 |
) |
|
(4,964 |
) |
|
2,133 |
|
|
|
43.0 |
% |
Free cash flow |
$ |
48,031 |
|
|
$ |
52,355 |
|
|
$ |
(4,324 |
) |
|
|
(8.3 |
)% |
Free cash flow
conversion ratio |
206.5 |
% |
|
(24.5 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended September
30, |
|
Increase(Decrease) |
|
PercentChange |
|
2016 |
|
2015 |
|
|
Free Cash
Flow |
|
|
|
|
|
|
|
Net cash provided by
operating activities |
$ |
117,455 |
|
|
$ |
141,172 |
|
|
$ |
(23,717 |
) |
|
|
(16.8 |
)% |
Purchase of property and
equipment |
(13,992 |
) |
|
(9,631 |
) |
|
(4,361 |
) |
|
|
(45.3 |
)% |
Free cash flow |
$ |
103,463 |
|
|
$ |
131,541 |
|
|
$ |
(28,078 |
) |
|
|
(21.3 |
)% |
Free cash flow
conversion ratio |
113.2 |
% |
|
(85.0 |
)% |
|
|
|
|
Exhibit 7 |
|
Wesco Aircraft
Holdings, Inc.Non-GAAP Financial Information
- Fiscal 2017 Outlook (UNAUDITED)(In thousands,
except share data) |
|
Fiscal 2017 |
|
Outlook |
Diluted earnings per
share |
$1.00 - $1.05 |
|
|
Amortization of
intangible assets |
|
0.15 |
|
Amortization of
deferred financing costs |
|
0.03 |
|
Unusual or
non-recurring items (1) |
|
0.04 |
|
Adjustments for tax
effect |
|
(0.07 |
) |
|
|
Adjusted diluted
earnings per share |
$1.15 - $1.20 |
|
|
|
|
Net cash provided by
operations |
$100,000 - $114,000 |
|
|
Purchase of property
and equipment |
(10,000) - (14,000) |
|
|
Free cash flow |
$90,000 - $100,000 |
|
|
Free cash flow
conversion |
90% - 95% |
|
|
(1)
Primarily facility network realignment costs. |
Contact Information:
Jeff Misakian
Vice President, Investor Relations
661-362-6847
Jeff.Misakian@wescoair.com
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