Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Dec. 31, 2013 | Feb. 11, 2014 | |
Document and Entity Information | ' | ' |
Entity Registrant Name | 'Wesco Aircraft Holdings, Inc | ' |
Entity Central Index Key | '0001378718 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 31-Dec-13 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--09-30 | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 95,884,470 |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q1 | ' |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2013 | Sep. 30, 2013 |
In Thousands, unless otherwise specified | ||
Current assets | ' | ' |
Cash and cash equivalents | $55,549 | $78,716 |
Accounts receivable, net of allowance for doubtful accounts of $4,455 at December 31, 2013 and $4,464 at September 30, 2013, respectively | 158,940 | 155,944 |
Inventories, net | 671,654 | 630,264 |
Prepaid expenses and other current assets | 15,540 | 12,195 |
Income taxes receivable | 11,747 | 16,119 |
Deferred income taxes | 39,307 | 39,671 |
Total current assets | 952,737 | 932,909 |
Property and equipment, net | 27,602 | 26,794 |
Deferred financing costs, net | 8,217 | 8,741 |
Goodwill | 562,641 | 562,493 |
Intangible assets, net | 98,099 | 99,641 |
Other assets | 673 | 574 |
Total assets | 1,649,969 | 1,631,152 |
Current liabilities | ' | ' |
Accounts payable | 93,994 | 98,934 |
Accrued expenses and other current liabilities | 12,189 | 21,047 |
Income taxes payable | 3,485 | 2,953 |
Long-term debt-current portion | 5,500 | ' |
Capital lease obligations-current portion | 1,249 | 1,184 |
Total current liabilities | 116,417 | 124,118 |
Long-term debt | 562,500 | 568,000 |
Capital lease obligations | 1,393 | 1,414 |
Deferred income taxes | 74,180 | 72,184 |
Total liabilities | 754,490 | 765,716 |
Commitments and contingencies | ' | ' |
Stockholders' equity | ' | ' |
Preferred stock, $0.001 par value per share: 50,000,000 shares authorized; no shares issued and outstanding | ' | ' |
Common stock, $0.001 par value per share: 950,000,000 shares authorized; 95,269,492 and 94,776,683 shares issued and outstanding as of December 31, 2013 and September 30, 2013 respectively | 95 | 95 |
Additional paid-in capital | 393,888 | 387,636 |
Accumulated other comprehensive loss | -10,768 | -10,189 |
Retained earnings | 520,716 | 496,346 |
Less treasury stock, at cost, 626,225 shares as of December 31, 2013 and September 30, 2013 | -8,452 | -8,452 |
Total stockholders' equity | 895,479 | 865,436 |
Total liabilities and stockholders' equity | $1,649,969 | $1,631,152 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2013 | Sep. 30, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Accounts receivable, allowance for doubtful accounts (in dollars) | $4,455 | $4,464 |
Preferred stock, par value (in dollars per share) | $0.00 | $0.00 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized | 950,000,000 | 950,000,000 |
Common stock, shares issued | 95,269,492 | 94,776,683 |
Common stock, shares outstanding | 95,269,492 | 94,776,683 |
Treasury stock, shares | 626,225 | 626,225 |
Consolidated_Statements_of_Ear
Consolidated Statements of Earnings and Comprehensive Income (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Consolidated Statements of Earnings and Comprehensive Income | ' | ' |
Net sales | $224,722 | $211,170 |
Cost of sales | 146,664 | 137,070 |
Gross profit | 78,058 | 74,100 |
Selling, general and administrative expenses | 37,445 | 34,725 |
Income from operations | 40,613 | 39,375 |
Interest expense, net | -4,222 | -11,377 |
Other income (expense), net | 754 | -155 |
Income before provision for income taxes | 37,145 | 27,843 |
Provision for income taxes | -12,775 | -9,417 |
Net income | 24,370 | 18,426 |
Other Comprehensive Income, net | -579 | -1,515 |
Comprehensive income | $23,791 | $16,911 |
Net income per share: | ' | ' |
Basic (in dollars per share) | $0.26 | $0.20 |
Diluted (in dollars per share) | $0.25 | $0.19 |
Weighted average shares outstanding: | ' | ' |
Basic (in shares) | 94,869 | 92,514 |
Diluted (in shares) | 96,963 | 95,179 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Cash flows from operating activities | ' | ' |
Net income | $24,370 | $18,426 |
Adjustments to reconcile net income to net cash provided by operating activities | ' | ' |
Amortization of intangible assets | 1,651 | 1,663 |
Depreciation | 1,400 | 1,253 |
Amortization of deferred financing costs | 524 | 5,664 |
Bad debt and sales return reserve | -19 | -18 |
Non-cash foreign currency exchange | -1,555 | 230 |
Non-cash stock-based compensation | 1,528 | 987 |
Excess tax benefit related to stock options exercised | -2,550 | -741 |
Deferred income tax provision | 2,367 | 2,677 |
Changes in assets and liabilities | ' | ' |
Accounts receivable | -2,267 | -1,343 |
Inventories | -40,788 | -16,034 |
Income taxes receivable | 6,924 | 3,891 |
Prepaid expenses and other assets | -3,221 | -2,885 |
Accounts payable | -5,924 | -5,460 |
Accrued expenses and other liabilities | -8,949 | -5,017 |
Income taxes payable | 458 | 788 |
Net cash provided by (used in) operating activities | -26,051 | 4,081 |
Cash flows from investing activities | ' | ' |
Purchases of property and equipment | -1,853 | -597 |
Net cash used in investing activities | -1,853 | -597 |
Cash flows from financing activities | ' | ' |
Proceeds from issuance of long-term debt | ' | 625,000 |
Repayment of long-term debt | ' | -636,000 |
Financing Fees | ' | -7,274 |
Repayment of capital lease obligations | -273 | -341 |
Excess tax benefit related to stock options exercised | 2,550 | 741 |
Proceeds from exercise of stock options | 2,173 | 1,787 |
Payment for treasury stock | ' | -8,452 |
Net cash provided by (used in) financing activities | 4,450 | -24,539 |
Effect of foreign currency exchange rates on cash and cash equivalents | 287 | -67 |
Net decrease in cash and cash equivalents | -23,167 | -21,122 |
Cash and cash equivalents, beginning of period | 78,716 | 60,856 |
Cash and cash equivalents, end of period | $55,549 | $39,734 |
Basis_of_Presentation_and_Sign
Basis of Presentation and Significant Accounting Policies | 3 Months Ended |
Dec. 31, 2013 | |
Basis of Presentation and Significant Accounting Policies | ' |
Basis of Presentation and Significant Accounting Policies | ' |
Note 1. Basis of Presentation and Significant Accounting Policies | |
The accompanying consolidated financial statements include the accounts of Wesco Aircraft Holdings, Inc. (referred to herein as “Wesco” or the “Company” or in the first person notations “we,” “us” and “our”) and its wholly owned subsidiaries prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and with the instructions to Form 10-Q and Article 10 of Regulation S-X. The financial statements presented herein have not been audited by an independent registered public accounting firm, but include all material adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary for fair statement of the financial condition, results of operations and cash flows for the period. However, these results are not necessarily indicative of results for any other interim period or for the full fiscal year. The preparation of financial statements in conformity with GAAP requires us to make certain estimates and assumptions for the reporting periods covered by the financial statements. These estimates and assumptions affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent liabilities. Actual amounts could differ from these estimates. | |
Certain information and footnote disclosures normally included in financial statements in accordance with GAAP have been omitted pursuant to the rules of the Securities and Exchange Commission (“SEC”). The accompanying consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2013 filed with the SEC on December 10, 2013. |
Recent_Accounting_Pronouncemen
Recent Accounting Pronouncements | 3 Months Ended |
Dec. 31, 2013 | |
Recent Accounting Pronouncements | ' |
Recent Accounting Pronouncements | ' |
Note 2. Recent Accounting Pronouncements | |
Changes to accounting principles generally accepted in the United States of America (“U.S. GAAP”) are established by the Financial Accounting Standards Board (“FASB”) in the form of Accounting Standards Updates (“ASUs”) to the FASB’s Accounting Standards Codification (“ASC”). | |
The Company considers the applicability and impact of all ASUs. ASUs not listed below were assessed and determined to be either not applicable or are expected to have minimal impact on our consolidated financial position and results of operations. | |
During the third quarter of 2013, the FASB issued ASU 2013-05, Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity, which amends FASB ASC 830, Foreign Currency Matters. This guidance requires the release of the cumulative translation adjustment into net income when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business (other than a sale of in-substance real estate or conveyance of oil and gas mineral rights) within a foreign entity. The Company does not anticipate that the adoption of ASU 2013-05 will have a material impact on the Company’s consolidated financial statements. | |
In July 2013, the FASB issued ASU 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists, which addresses the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, similar tax loss, or tax credit carryforward exists. This guidance requires the netting of unrecognized tax benefits against a deferred tax asset for a loss or other carryforward that would apply in settlement of the uncertain tax positions. ASU 2013-11 is effective beginning in the first quarter of fiscal 2014. Since ASU 2013-11 only impacts financial statement disclosure requirements for unrecognized tax benefits, its adoption did not have a material impact on the Company’s consolidated financial statements. |
Excess_and_Obsolescence_Reserv
Excess and Obsolescence Reserve Policy | 3 Months Ended |
Dec. 31, 2013 | |
Excess and Obsolescence Reserve Policy | ' |
Excess and Obsolescence Reserve Policy | ' |
Note 3. Excess and Obsolescence Reserve Policy | |
The Company performs a monthly inventory analysis and records excess and obsolescence expense after weighing a number of factors, including historical sell-through rates, current selling and buying patterns, forecasted future sales, program delays or cancellations, inventory quantities and aging, rights we have with certain manufacturers to exchange unsold products for new products and open customer orders. These factors are described in greater detail below. | |
As of December 31, 2013 and 2012, the Company’s excess and obsolete reserve was approximately $129,877 and $113,988, respectively. Of these amounts, approximately $3,299 and $2,672 was recorded during the three months ended December 31, 2013 and 2012, respectively. The Company believes that these amounts are consistent with its historical experience and appropriately reflect the risk of excess and obsolete inventory inherent in its business. The excess and obsolescence reserve includes both excess and slow-moving inventory which typically includes inventory held by the Company after strategic purchases are made to take advantage of favorable pricing terms, speculative purchases based on current market trends or purchases timed to take supplier lead times into account, which may result in us maintaining excess and slow-moving quantities of inventories. | |
Excess and Slow-Moving Inventory | |
In conducting a monthly reserve analysis with respect to excess and slow-moving inventory, the Company considers a variety of factors, including historical sell-through rates, current selling and buying patterns, inventory quantities and aging, rights the Company has with certain manufacturers to exchange unsold products for new products and open customer orders. Furthermore, although the Company’s customers are not required to purchase a specific quantity of inventory, the Company is able to forecast future sales with a fair degree of precision by monitoring and tracking customers’ production cycles, which forecasting is taken into account when conducting the reserve analysis. The Company further notes that it is required to make commitments to purchase inventory based on manufacturer lead times, which may be up to two years. In addition, the Company may be entitled to obtain price breaks or discounts based on the quantity of inventory committed to purchase. | |
Given the length of manufacturers’ lead times, the Company’s desire to obtain advantageous inventory pricing, the impact of macro and micro economic conditions and variability within specific customer programs, the inventory reserve may increase at a rate higher than the Company originally anticipated, which can impact the amount of excess and slow-moving inventory the Company holds. | |
A majority of the products the Company sells can be sold across multiple aircraft platforms and the lifespan of the products the Company sells along with the design of the aircrafts that utilize those products is typically not subject to a high degree of obsolescence. Accordingly, since 2006 the Company has only scrapped $16,780 of its inventory. Furthermore, the Company does take program delays and cancellations into account when conducting the reserve analysis. | |
Based on the Company’s current analysis of these factors, in particular historical sales data, cycle times of programs, the multiple platforms on which individual parts can be sold and customer buying patterns, the Company maintains an unreserved slow-moving inventory of $20,139 which they believe based on historical and anticipated sell through rates will be sold over the next three years, and accordingly, has not recorded a reserve for those amounts. However, in the future, the Company may determine that it’s necessary to reserve for a portion of this $20,139 of inventory. |
Goodwill
Goodwill | 3 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Goodwill | ' | |||||||
Goodwill | ' | |||||||
Note 4. Goodwill | ||||||||
During the quarter ended December 31, 2013, the Company recorded a $148 increase to goodwill. | ||||||||
December 31, 2013 | September 30, 2013 | |||||||
Beginning balance | $ | 562,493 | $ | 563,896 | ||||
Foreign currency translation | 148 | (1,403 | ) | |||||
Ending balance | $ | 562,641 | $ | 562,493 |
Fair_Value_of_Financial_Instru
Fair Value of Financial Instruments | 3 Months Ended |
Dec. 31, 2013 | |
Fair Value of Financial Instruments | ' |
Fair Value of Financial Instruments | ' |
Note 5. Fair Value of Financial Instruments | |
The Company’s financial instruments consist of cash and cash equivalents, accounts receivable and payable, accrued and other current liabilities, and line of credit. The carrying amounts of these instruments approximate fair value because of their short-term maturities. The fair value of the long-term debt instruments are determined using current applicable rates for similar instruments as of the balance sheet date. As of December 31, 2013 the carrying amounts of the $625,000 term loan approximated its fair value. |
LongTerm_Debt
Long-Term Debt | 3 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Long-Term Debt | ' | |||||||
Long-Term Debt | ' | |||||||
Note 6. Long-Term Debt | ||||||||
December 31, | September 30, | |||||||
2013 | 2013 | |||||||
$ 625,000 term loan, bearing interest based on the Alternate Base Right (“ABR”) (defined as Prime Rate plus an applicable margin rate ranging from 0.75%-1.50%), or Eurodollar (defined as London Inter-Bank Offer Rate (“LIBOR”) rates plus an applicable margin rate ranging from 1.75%-2.50%). The applicable margin rates are indexed to the Company’s Consolidated Total Leverage Ratio (as such ratio is defined in the senior secured credit facilities) and adjusted each reporting period based on operating results. The term loan is payable quarterly equal to 1.25% the first year, escalating to 2.50% by the fifth year of the principal amount of $625,000 with the final payment due on December 7, 2017. Interest rate was 2.42% at December 31, 2013 | 568,000 | 568,000 | ||||||
$ 200,000 revolving line of credit, bearing interest based on the ABR (defined as Prime Rate plus an applicable margin rate ranging from 0.75%-1.50%), or Eurodollar (defined as London Inter-Bank Offer Rate (“LIBOR”) rates plus an applicable margin rate ranging from 1.75%-2.50%). The applicable margin rates are indexed to the Company’s Consolidated Leverage Ratio and (as such ratio is defined in the senior secured credit facilities) adjusted each reporting period based on operating results. The revolver is due on December 7, 2017. Interest rate was 2.42% at December 31, 2013. | — | — | ||||||
Less: current portion | 5,500 | — | ||||||
Long-term debt | $ | 562,500 | $ | 568,000 | ||||
On December 7, 2012, the Company completed a refinancing of its existing debt facilities for the purpose of reducing the applicable interest rate on all loans. The new debt consists of a $200,000 revolving line of credit and a $625,000 term loan. The revolving line of credit and the term loan, which together we refer to as the senior secured credit facilities, mature on December 7, 2017. | ||||||||
Under the terms and definitions of the senior secured credit facilities as of December 31, 2013, the Company’s Consolidated Total Leverage Ratio (as such ratio is defined in the senior secured credit facilities) cannot exceed 4.00 and its Consolidated Net Interest Coverage Ratio (as such ratio is defined in the senior secured credit facilities) cannot be less than 2.25. The senior secured credit facilities also contain customary negative covenants, including restrictions on our and our restricted subsidiaries’ ability to merge and consolidate with other companies, incur indebtedness, grant liens or security interests on assets, make acquisitions, loans, advances or investments, pay dividends, sell or otherwise transfer assets, optionally prepay or modify terms of any junior indebtedness or enter into transactions with affiliates. The Company was in compliance with these covenants as of December 31, 2013. Borrowings under the senior secured credit facilities are guaranteed by the Company and all of its direct and indirect, wholly-owned, domestic restricted subsidiaries (subject to certain exceptions) and secured by a first lien on substantially all of the Company’s assets and the assets of its guarantor subsidiaries, including capital stock of subsidiaries (in each case, subject to certain exceptions). | ||||||||
As of December 31, 2013, the Company has made voluntary prepayments totaling approximately $25,750 on the new $625,000 term loan that have been applied to future required quarterly payments. As of December 31, 2013, there were no outstanding borrowings under the $200,000 revolving line of credit. | ||||||||
The Company’s subsidiary, Wesco Aircraft Europe Limited, has available a £7.0 million ($11.5 million based on the December 31, 2013 exchange rate) line of credit that automatically renews annually on October 1. The line of credit bears interest based on the base rate plus an applicable margin of 1.65%. The net outstanding borrowing under this line of credit was £0 as of December 31, 2013. | ||||||||
As a result of the refinancing in the first quarter of fiscal 2013, the Company recorded a loss on extinguishment of debt in the amount of $4,960. The loss on extinguishment was recorded as a component of interest expense, net in the consolidated statements of earnings and comprehensive income during the three months ended December 31, 2012. Additionally, $3,894 of unamortized debt issuance costs remains capitalized and new creditor fees associated with the December 7, 2012 refinancing in the amount of $7,274 were capitalized. These fees will be amortized over the term of the debt using the effective interest rate method. The total deferred financing costs capitalized at the close of the transaction on December 7, 2012 totaled $11,168. |
Comprehensive_Income
Comprehensive Income | 3 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Comprehensive Income | ' | |||||||
Comprehensive Income | ' | |||||||
Note 7. Comprehensive Income | ||||||||
Comprehensive income consists of the following: | ||||||||
Three Months Ended | ||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
Net income | $ | 24,370 | $ | 18,426 | ||||
Foreign exchange translation adjustment | (579 | ) | (1,515 | ) | ||||
Total comprehensive income | $ | 23,791 | $ | 16,911 |
Net_Income_Per_Share
Net Income Per Share | 3 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Net Income Per Share | ' | |||||||
Net Income Per Share | ' | |||||||
Note 8. Net Income Per Share | ||||||||
Basic net income per share is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net income per share includes the dilutive effect of both outstanding stock options and restricted shares, calculated using the treasury stock method. Assumed proceeds from in-the-money options include windfall tax benefits, net of shortfalls, calculated under the “as-if” method as prescribed by ASC 718, Compensation—Stock Option Compensation. | ||||||||
Three Months Ended | ||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
(In thousands, except | ||||||||
per share data) | ||||||||
Net income | $ | 24,370 | $ | 18,426 | ||||
Basic weighted average shares outstanding | 94,869 | 92,514 | ||||||
Dilutive effect of stock options and restricted stock awards/units | 2,094 | 2,665 | ||||||
Dilutive weighted average shares outstanding | 96,963 | 95,179 | ||||||
Basic net income per share | $ | 0.26 | $ | 0.2 | ||||
Diluted net income per share | $ | 0.25 | $ | 0.19 | ||||
There were 0 and 208,299 shares of common stock equivalents for the three months ended December 31, 2013 and December 31, 2012, respectively, which were not included in the diluted calculation due to their anti-dilutive effect. | ||||||||
Segment_Reporting
Segment Reporting | 3 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Segment Reporting | ' | |||||||||||||
Segment Reporting | ' | |||||||||||||
Note 9. Segment Reporting | ||||||||||||||
The Company is organized based on the geographical location. The Company’s reportable segments are comprised of the North America and Rest of World. | ||||||||||||||
The Company evaluates segment performance based on segment operating earnings or loss. Each segment reports its results of operations and makes requests for capital expenditures and acquisition funding to the Company’s chief operating decision-maker (“CODM”). The Company’s Chief Executive Officer (“CEO”) serves as CODM. Each operating segment has separate management teams and infrastructures dedicated to providing a full range of products and services to their customers. | ||||||||||||||
The following table presents net sales and operating income by business segment: | ||||||||||||||
Three Months Ended December 31, 2013 | ||||||||||||||
North | Rest of | Intercompany | ||||||||||||
America | World | Elimination | Consolidated | |||||||||||
Net sales | $ | 200,646 | $ | 53,743 | $ | (29,667 | ) | $ | 224,722 | |||||
Gross profit | 63,974 | 16,184 | (2,100 | ) | 78,058 | |||||||||
Income from operations | 33,122 | 7,298 | 193 | 40,613 | ||||||||||
Interest expense, net | (3,981 | ) | (241 | ) | (— | ) | (4,222 | ) | ||||||
Provision for income taxes | 10,882 | 1,827 | 66 | 12,775 | ||||||||||
Total assets | 1,668,142 | 323,188 | (340,016 | ) | 1,649,969 | |||||||||
Goodwill | 555,714 | 6,927 | — | 562,641 | ||||||||||
Capital expenditures | 1,744 | 109 | — | 1,853 | ||||||||||
Depreciation and amortization | 3,299 | 277 | — | 3,576 | ||||||||||
Three Months Ended December 31, 2012 | ||||||||||||||
North | Rest of | Intercompany | ||||||||||||
America | World | Elimination | Consolidated | |||||||||||
Net sales | $ | 191,605 | $ | 44,926 | $ | (25,361 | ) | $ | 211,170 | |||||
Gross profit | 62,359 | 13,649 | (1,908 | ) | 74,100 | |||||||||
Income from operations | 33,759 | 5,542 | 74 | 39,375 | ||||||||||
Interest expense, net | (10,010 | ) | (1,367 | ) | (— | ) | (11,377 | ) | ||||||
Provision for income taxes | 8,391 | 1,026 | — | 9,417 | ||||||||||
Total assets | 1,733,894 | 276,717 | (480,474 | ) | 1,530,137 | |||||||||
Goodwill | 557,568 | 6,786 | — | 564,354 | ||||||||||
Capital expenditures | 586 | 11 | — | 597 | ||||||||||
Depreciation and amortization | 2,688 | 228 | — | 2,916 | ||||||||||
Geographic Information | ||||||||||||||
The Company operates principally in three geographic areas, North America, Europe and emerging markets, such as Asia, Pacific Rim and the Middle East. | ||||||||||||||
Net sales by geographic area for the three months ended December 31, 2013 and December 31, 2012 were as follows: | ||||||||||||||
Three Months Ended | ||||||||||||||
December 31, | ||||||||||||||
2013 | 2012 | |||||||||||||
% of | % of | |||||||||||||
Sales | Sales | Sales | Sales | |||||||||||
United States of America | $ | 158,722 | 70.6 | % | $ | 148,316 | 70.2 | % | ||||||
Canada | 14,486 | 6.4 | % | 18,743 | 8.9 | % | ||||||||
United Kingdom | 29,659 | 13.2 | % | 30,087 | 14.2 | % | ||||||||
Other European Countries | 18,357 | 8.2 | % | 11,204 | 5.4 | % | ||||||||
Asia, Pacific Rim, Middle East and Other | 3,498 | 1.6 | % | 2,820 | 1.3 | % | ||||||||
$ | 224,722 | 100 | % | $ | 211,170 | 100 | % | |||||||
The Company determines the geographic area based on where the sale was originated from. |
Subsequent_Events
Subsequent Events | 3 Months Ended |
Dec. 31, 2013 | |
Subsequent Events | ' |
Subsequent Events | ' |
Note 10. Subsequent Events | |
On January 30th the Company entered into a merger agreement to acquire Haas Group Inc. (“Haas”) for $550 million in cash, subject to certain closing adjustments, from certain investment funds affiliated with The Jordan Company, L.P. Haas is a leading global provider of chemical supply chain management (“CSCM”) solutions to the commercial aerospace, airline, military, energy, and other markets. Haas is headquartered in West Chester, PA, with over 1,300 employees and 35 distribution hubs and forward stocking locations around the world. The acquisition is expected to be completed during the Company’s fiscal Q2 subject to customary closing conditions and will be financed by a new $525 million term loan B facility (“Term Loan B”). |
Goodwill_Tables
Goodwill (Tables) | 3 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Goodwill | ' | |||||||
Schedule of goodwill | ' | |||||||
December 31, 2013 | September 30, 2013 | |||||||
Beginning balance | $ | 562,493 | $ | 563,896 | ||||
Foreign currency translation | 148 | (1,403 | ) | |||||
Ending balance | $ | 562,641 | $ | 562,493 |
LongTerm_Debt_Tables
Long-Term Debt (Tables) | 3 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Long-Term Debt | ' | |||||||
Schedule of debt | ' | |||||||
December 31, | September 30, | |||||||
2013 | 2013 | |||||||
$ 625,000 term loan, bearing interest based on the Alternate Base Right (“ABR”) (defined as Prime Rate plus an applicable margin rate ranging from 0.75%-1.50%), or Eurodollar (defined as London Inter-Bank Offer Rate (“LIBOR”) rates plus an applicable margin rate ranging from 1.75%-2.50%). The applicable margin rates are indexed to the Company’s Consolidated Total Leverage Ratio (as such ratio is defined in the senior secured credit facilities) and adjusted each reporting period based on operating results. The term loan is payable quarterly equal to 1.25% the first year, escalating to 2.50% by the fifth year of the principal amount of $625,000 with the final payment due on December 7, 2017. Interest rate was 2.42% at December 31, 2013 | 568,000 | 568,000 | ||||||
$ 200,000 revolving line of credit, bearing interest based on the ABR (defined as Prime Rate plus an applicable margin rate ranging from 0.75%-1.50%), or Eurodollar (defined as London Inter-Bank Offer Rate (“LIBOR”) rates plus an applicable margin rate ranging from 1.75%-2.50%). The applicable margin rates are indexed to the Company’s Consolidated Leverage Ratio and (as such ratio is defined in the senior secured credit facilities) adjusted each reporting period based on operating results. The revolver is due on December 7, 2017. Interest rate was 2.42% at December 31, 2013. | — | — | ||||||
Less: current portion | 5,500 | — | ||||||
Long-term debt | $ | 562,500 | $ | 568,000 |
Comprehensive_Income_Tables
Comprehensive Income (Tables) | 3 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Comprehensive Income | ' | |||||||
Schedule of comprehensive income | ' | |||||||
Three Months Ended | ||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
Net income | $ | 24,370 | $ | 18,426 | ||||
Foreign exchange translation adjustment | (579 | ) | (1,515 | ) | ||||
Total comprehensive income | $ | 23,791 | $ | 16,911 |
Net_Income_Per_Share_Tables
Net Income Per Share (Tables) | 3 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Net Income Per Share | ' | |||||||
Schedule of net income per share | ' | |||||||
Three Months Ended | ||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
(In thousands, except | ||||||||
per share data) | ||||||||
Net income | $ | 24,370 | $ | 18,426 | ||||
Basic weighted average shares outstanding | 94,869 | 92,514 | ||||||
Dilutive effect of stock options and restricted stock awards/units | 2,094 | 2,665 | ||||||
Dilutive weighted average shares outstanding | 96,963 | 95,179 | ||||||
Basic net income per share | $ | 0.26 | $ | 0.2 | ||||
Diluted net income per share | $ | 0.25 | $ | 0.19 |
Segment_Reporting_Tables
Segment Reporting (Tables) | 3 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Segment Reporting | ' | |||||||||||||
Schedule of net sales and operating income by business segment | ' | |||||||||||||
Three Months Ended December 31, 2013 | ||||||||||||||
North | Rest of | Intercompany | ||||||||||||
America | World | Elimination | Consolidated | |||||||||||
Net sales | $ | 200,646 | $ | 53,743 | $ | (29,667 | ) | $ | 224,722 | |||||
Gross profit | 63,974 | 16,184 | (2,100 | ) | 78,058 | |||||||||
Income from operations | 33,122 | 7,298 | 193 | 40,613 | ||||||||||
Interest expense, net | (3,981 | ) | (241 | ) | (— | ) | (4,222 | ) | ||||||
Provision for income taxes | 10,882 | 1,827 | 66 | 12,775 | ||||||||||
Total assets | 1,668,142 | 323,188 | (340,016 | ) | 1,649,969 | |||||||||
Goodwill | 555,714 | 6,927 | — | 562,641 | ||||||||||
Capital expenditures | 1,744 | 109 | — | 1,853 | ||||||||||
Depreciation and amortization | 3,299 | 277 | — | 3,576 | ||||||||||
Three Months Ended December 31, 2012 | ||||||||||||||
North | Rest of | Intercompany | ||||||||||||
America | World | Elimination | Consolidated | |||||||||||
Net sales | $ | 191,605 | $ | 44,926 | $ | (25,361 | ) | $ | 211,170 | |||||
Gross profit | 62,359 | 13,649 | (1,908 | ) | 74,100 | |||||||||
Income from operations | 33,759 | 5,542 | 74 | 39,375 | ||||||||||
Interest expense, net | (10,010 | ) | (1,367 | ) | (— | ) | (11,377 | ) | ||||||
Provision for income taxes | 8,391 | 1,026 | — | 9,417 | ||||||||||
Total assets | 1,733,894 | 276,717 | (480,474 | ) | 1,530,137 | |||||||||
Goodwill | 557,568 | 6,786 | — | 564,354 | ||||||||||
Capital expenditures | 586 | 11 | — | 597 | ||||||||||
Depreciation and amortization | 2,688 | 228 | — | 2,916 | ||||||||||
Schedule of net sales by geographical area | ' | |||||||||||||
Three Months Ended | ||||||||||||||
December 31, | ||||||||||||||
2013 | 2012 | |||||||||||||
% of | % of | |||||||||||||
Sales | Sales | Sales | Sales | |||||||||||
United States of America | $ | 158,722 | 70.6 | % | $ | 148,316 | 70.2 | % | ||||||
Canada | 14,486 | 6.4 | % | 18,743 | 8.9 | % | ||||||||
United Kingdom | 29,659 | 13.2 | % | 30,087 | 14.2 | % | ||||||||
Other European Countries | 18,357 | 8.2 | % | 11,204 | 5.4 | % | ||||||||
Asia, Pacific Rim, Middle East and Other | 3,498 | 1.6 | % | 2,820 | 1.3 | % | ||||||||
$ | 224,722 | 100 | % | $ | 211,170 | 100 | % |
Excess_and_Obsolescence_Reserv1
Excess and Obsolescence Reserve Policy (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Excess and Obsolescence Reserve Policy | ' | ' |
Excess and obsolete reserve | $129,877 | $113,988 |
Amount of excess and obsolete reserve recorded | 3,299 | 2,672 |
Maximum manufacturer lead time for commitment to purchase inventory | '2 years | ' |
Scrapped inventory since 2006 | 16,780 | ' |
Slow-moving inventory left unreserved | $20,139 | ' |
Period over which unreserved slow-moving inventory will be sold | '3 years | ' |
Goodwill_Details
Goodwill (Details) (USD $) | 3 Months Ended | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Dec. 31, 2012 |
Goodwill | ' | ' | ' |
Increase in goodwill during the period | $148 | ' | ' |
Change in goodwill | ' | ' | ' |
Beginning balance | 562,493 | 563,896 | 564,354 |
Foreign currency translation | 148 | -1,403 | ' |
Ending balance | $562,641 | $562,493 | $564,354 |
Fair_Value_of_Financial_Instru1
Fair Value of Financial Instruments (Details) ($625,000 term loan, USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
$625,000 term loan | ' |
Fair value of financial instruments | ' |
Long-term debt | $625,000 |
LongTerm_Debt_Details
Long-Term Debt (Details) | 0 Months Ended | 3 Months Ended | 3 Months Ended | 3 Months Ended | |||||||||||||||||||
In Thousands, unless otherwise specified | Dec. 07, 2012 | Dec. 31, 2012 | Dec. 31, 2013 | Sep. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Sep. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 |
USD ($) | USD ($) | USD ($) | USD ($) | Senior secured credit facilities | Senior secured credit facilities | Revolving line of credit | Revolving line of credit | Revolving line of credit | Revolving line of credit | Revolving line of credit | Revolving line of credit | Revolving line of credit | $625,000 term loan | $625,000 term loan | $625,000 term loan | $625,000 term loan | $625,000 term loan | $625,000 term loan | $625,000 term loan | $625,000 term loan | Wesco Aircraft Europe Limited line of credit | Wesco Aircraft Europe Limited line of credit | |
Amendment and restatement of credit agreement | Amendment and restatement of credit agreement | Amendment and restatement of credit agreement | Alternate Base Right ("ABR") | Alternate Base Right ("ABR") | Alternate Base Right ("ABR") | Eurodollar (LIBOR) rates | Eurodollar (LIBOR) rates | Eurodollar (LIBOR) rates | USD ($) | USD ($) | Alternate Base Right ("ABR") | Alternate Base Right ("ABR") | Alternate Base Right ("ABR") | Eurodollar (LIBOR) rates | Eurodollar (LIBOR) rates | Eurodollar (LIBOR) rates | Wesco Aircraft Europe Limited | Wesco Aircraft Europe Limited | |||||
Minimum | Maximum | USD ($) | Amendment and restatement of credit agreement | Amendment and restatement of credit agreement | Amendment and restatement of credit agreement | Amendment and restatement of credit agreement | Amendment and restatement of credit agreement | Amendment and restatement of credit agreement | Minimum | Maximum | Minimum | Maximum | USD ($) | GBP (£) | |||||||||
Minimum | Maximum | Minimum | Maximum | ||||||||||||||||||||
Long-Term Debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Principal amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $625,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Basis of interest rate | ' | ' | ' | ' | ' | ' | ' | 'Prime Rate | ' | ' | 'LIBOR | ' | ' | ' | ' | 'Prime Rate | ' | ' | 'LIBOR | ' | ' | ' | ' |
Applicable margin rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | 0.75% | 1.50% | ' | 1.75% | 2.50% | ' | ' | ' | 0.75% | 1.50% | ' | 1.75% | 2.50% | 1.65% | 1.65% |
Percentage of quarterly payment in year one | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.25% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of quarterly payment in year five | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2.50% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate at end of period (as a percent) | ' | ' | ' | ' | ' | ' | 2.42% | ' | ' | ' | ' | ' | ' | 2.42% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Long-term debt, current and noncurrent | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 568,000 | 568,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Less: Current portion | ' | ' | 5,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Long-term debt | ' | ' | 562,500 | 568,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revolving line of credit | ' | ' | ' | ' | ' | ' | 200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 11,500 | 7,000 |
Consolidated Total Leverage Ratio | ' | ' | ' | ' | ' | 4 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Consolidated Net Interest Coverage Ratio | ' | ' | ' | ' | 2.25 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Voluntary prepayment of debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25,750 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net outstanding borrowing amount under line of credit | ' | ' | ' | ' | ' | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 |
Loss on extinguishment of debt | ' | 4,960 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unamortized debt issuance costs | ' | ' | 3,894 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount of new creditor fees capitalized | 7,274 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred financing costs capitalized | $11,168 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Comprehensive_Income_Details
Comprehensive Income (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Comprehensive Income | ' | ' |
Net income | $24,370 | $18,426 |
Foreign exchange translation adjustment | -579 | -1,515 |
Comprehensive income | $23,791 | $16,911 |
Net_Income_Per_Share_Details
Net Income Per Share (Details) (USD $) | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Net Income Per Share | ' | ' |
Net income | $24,370 | $18,426 |
Basic weighted average shares outstanding | 94,869,000 | 92,514,000 |
Dilutive effect of stock options and restricted stock awards/units (in shares) | 2,094,000 | 2,665,000 |
Dilutive weighted average shares outstanding | 96,963,000 | 95,179,000 |
Basic net income per share (in dollars per share) | $0.26 | $0.20 |
Diluted net income per share (in dollars per share) | $0.25 | $0.19 |
Common stock equivalents not included in diluted calculation due to anti-dilutive effect (in shares) | 0 | 208,299 |
Segment_Reporting_Details
Segment Reporting (Details) (USD $) | 3 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Segment Reporting | ' | ' | ' | ' |
Net sales | $224,722 | $211,170 | ' | ' |
Gross profit | 78,058 | 74,100 | ' | ' |
Income from operations | 40,613 | 39,375 | ' | ' |
Interest expense, net | -4,222 | -11,377 | ' | ' |
Provision for income taxes | 12,775 | 9,417 | ' | ' |
Total assets | 1,649,969 | 1,530,137 | 1,631,152 | ' |
Goodwill | 562,641 | 564,354 | 562,493 | 563,896 |
Capital expenditures | 1,853 | 597 | ' | ' |
Depreciation and amortization | 3,576 | 2,916 | ' | ' |
Operating segment | North America | ' | ' | ' | ' |
Segment Reporting | ' | ' | ' | ' |
Net sales | 200,646 | 191,605 | ' | ' |
Gross profit | 63,974 | 62,359 | ' | ' |
Income from operations | 33,122 | 33,759 | ' | ' |
Interest expense, net | -3,981 | -10,010 | ' | ' |
Provision for income taxes | 10,882 | 8,391 | ' | ' |
Total assets | 1,668,142 | 1,733,894 | ' | ' |
Goodwill | 555,714 | 557,568 | ' | ' |
Capital expenditures | 1,744 | 586 | ' | ' |
Depreciation and amortization | 3,299 | 2,688 | ' | ' |
Operating segment | Rest of World | ' | ' | ' | ' |
Segment Reporting | ' | ' | ' | ' |
Net sales | 53,743 | 44,926 | ' | ' |
Gross profit | 16,184 | 13,649 | ' | ' |
Income from operations | 7,298 | 5,542 | ' | ' |
Interest expense, net | -241 | -1,367 | ' | ' |
Provision for income taxes | 1,827 | 1,026 | ' | ' |
Total assets | 323,188 | 276,717 | ' | ' |
Goodwill | 6,927 | 6,786 | ' | ' |
Capital expenditures | 109 | 11 | ' | ' |
Depreciation and amortization | 277 | 228 | ' | ' |
Intercompany Elimination | ' | ' | ' | ' |
Segment Reporting | ' | ' | ' | ' |
Net sales | -29,667 | -25,361 | ' | ' |
Gross profit | -2,100 | -1,908 | ' | ' |
Income from operations | 193 | 74 | ' | ' |
Provision for income taxes | 66 | ' | ' | ' |
Total assets | ($340,016) | ($480,474) | ' | ' |
Segment_Reporting_Details_2
Segment Reporting (Details 2) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
item | ||
Segment Reporting | ' | ' |
Number of geographic areas in which the company operated | 3 | ' |
Segment Reporting | ' | ' |
Sales | $224,722 | $211,170 |
% of sales | 100.00% | 100.00% |
United States of America | ' | ' |
Segment Reporting | ' | ' |
Sales | 158,722 | 148,316 |
% of sales | 70.60% | 70.20% |
Canada | ' | ' |
Segment Reporting | ' | ' |
Sales | 14,486 | 18,743 |
% of sales | 6.40% | 8.90% |
United Kingdom | ' | ' |
Segment Reporting | ' | ' |
Sales | 29,659 | 30,087 |
% of sales | 13.20% | 14.20% |
Other European countries | ' | ' |
Segment Reporting | ' | ' |
Sales | 18,357 | 11,204 |
% of sales | 8.20% | 5.40% |
Asia, Pacific Rim, Middle East and Other | ' | ' |
Segment Reporting | ' | ' |
Sales | $3,498 | $2,820 |
% of sales | 1.60% | 1.30% |
Subsequent_Events_Details
Subsequent Events (Details) (USD $) | Dec. 31, 2013 | Sep. 30, 2013 | Jan. 30, 2014 | Jan. 30, 2014 | Jan. 30, 2014 |
Subsequent event | Subsequent event | Subsequent event | |||
Haas Group Inc, | Haas Group Inc, | Haas Group Inc, | |||
item | Term loan B Facility | Minimum | |||
item | |||||
Subsequent events | ' | ' | ' | ' | ' |
Purchase price of acquired assets | ' | ' | $550,000,000 | ' | ' |
Number of persons employed | ' | ' | ' | ' | 1,300 |
Number of distribution hubs | ' | ' | 35 | ' | ' |
Long-term debt | $562,500,000 | $568,000,000 | ' | $525,000,000 | ' |