Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jul. 31, 2015 | Aug. 25, 2015 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jul. 31, 2015 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q2 | |
Entity Current Reporting Status | Yes | |
Entity Registrant Name | KLX Inc. | |
Entity Central Index Key | 1,617,898 | |
Current Fiscal Year End Date | --01-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 52,755,954 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Millions | Jul. 31, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 418.3 | $ 470.8 |
Accounts receivable – trade, less allowance for doubtful accounts ($8.8 at July 31, 2015 and $8.1 at December 31, 2014) | 286.9 | 308 |
Inventories | 1,315.4 | 1,289.2 |
Deferred income taxes | 40.8 | 37.5 |
Other current assets | 62.1 | 50.6 |
Total current assets | 2,123.5 | 2,156.1 |
Property and equipment, net of accumulated depreciation ($95.8 at July 31, 2015 and $63.1 at December 31, 2014) | 373.3 | 332.2 |
Goodwill | 1,271.2 | 1,328.7 |
Identifiable intangible assets, net | 452 | 442.3 |
Other assets | 46.6 | 44.3 |
Total assets | 4,266.6 | 4,303.6 |
Current liabilities: | ||
Accounts payable | 153.3 | 149.9 |
Deferred acquisition payments | 92.2 | |
Accrued liabilities | 107.7 | 88.1 |
Total current liabilities | 261 | 330.2 |
Long-term debt | 1,200 | 1,200 |
Deferred income taxes | 145.7 | 123.5 |
Other non-current liabilities | $ 30.8 | $ 29.6 |
Commitments, contingencies and off-balance sheet arrangements (Note 10) | ||
Stockholders' equity: | ||
Common stock, $0.01 par value; 250.0 million shares authorized; 52.8 million and $52.5 million shares issued as of July 31, 2015 and December 31, 2014, respectively | $ 0.5 | $ 0.5 |
Additional paid-in capital | 2,653.8 | 2,644.1 |
Treasury stock: 1,532 shares at July 31, 2015 | (0.1) | |
Retained earnings | 36.6 | 4.2 |
Accumulated other comprehensive loss | (61.7) | (28.5) |
Total stockholders' equity | 2,629.1 | 2,620.3 |
Total liabilities and equity | $ 4,266.6 | $ 4,303.6 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Jul. 31, 2015 | Dec. 31, 2014 |
Statement Of Financial Position [Abstract] | ||
Accounts receivable - trade, allowance for doubtful accounts | $ 8.8 | $ 8.1 |
Property and equipment, accumulated depreciation | $ 95.8 | $ 63.1 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 52,800,000 | 52,500,000 |
Treasury stock | 1,532 |
CONDENSED CONSOLIDATED AND COMB
CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME (UNAUDITED) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jul. 31, 2015 | Jun. 30, 2014 | Jul. 31, 2015 | Jun. 30, 2014 | ||
Income Statement [Abstract] | |||||
Product revenues | $ 351.7 | $ 340.5 | $ 699.7 | $ 666.9 | |
Service revenues | 61 | 90.4 | 144.5 | 134.9 | |
Total revenues | 412.7 | 430.9 | 844.2 | 801.8 | |
Cost of sales - products | 248.3 | 236.6 | 492 | 461.3 | |
Cost of sales - services | 67 | 63.3 | 147.2 | 94.4 | |
Total cost of sales | 315.3 | 299.9 | 639.2 | 555.7 | |
Selling, general and administrative | 64.6 | 60 | 124.7 | 106.2 | |
Operating earnings | [1] | 32.8 | 71 | 80.3 | 139.9 |
Interest expense (income) | 20.6 | (0.1) | 39.2 | (0.2) | |
Earnings before income taxes | 12.2 | 71.1 | 41.1 | 140.1 | |
Income taxes | 4.8 | 25.7 | 15.8 | 50.7 | |
Net earnings | 7.4 | 45.4 | 25.3 | 89.4 | |
Other comprehensive income (loss): | |||||
Foreign currency translation adjustment | (5.8) | (3.5) | (6.2) | (2.5) | |
Comprehensive income | $ 1.6 | $ 41.9 | $ 19.1 | $ 86.9 | |
Net earnings per share from continuing operations - basic | $ 0.14 | $ 0.87 | $ 0.48 | $ 1.71 | |
Net earnings per share from discontinued operations - basic | 0.14 | 0.87 | 0.48 | 1.71 | |
Net earnings per share - basic | 0.14 | 0.87 | 0.48 | 1.71 | |
Net earnings per share - diluted | $ 0.14 | $ 0.87 | $ 0.48 | $ 1.71 | |
Weighted average common shares - basic | 52.2 | 52.2 | 52.2 | 52.2 | |
Weighted average common shares - diluted | 52.4 | 52.3 | 52.4 | 52.3 | |
[1] | Operating earnings include an allocation of employee benefits and general and administrative costs based on the proportion of each segment’s number of employees and sales, respectively. |
CONDENSED CONSOLIDATED AND COM5
CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Millions | 6 Months Ended | |
Jul. 31, 2015 | Jun. 30, 2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net earnings | $ 25.3 | $ 89.4 |
Adjustments to reconcile net earnings to net cash flows provided by operating activities: | ||
Depreciation and amortization | 42.6 | 27.7 |
Deferred income taxes | 20.6 | 15.9 |
Non-cash compensation | 7.4 | 1.8 |
Excess tax benefits realized from prior exercises of restricted stock | (0.9) | (0.6) |
Provision for doubtful accounts | 0.8 | 0.5 |
Loss (gain) on disposal of property and equipment | 0.9 | (0.3) |
Changes in operating assets and liabilities, net of effects from acquisitions: | ||
Accounts receivable | 16 | (85.3) |
Inventories | 6.1 | (52.5) |
Other current and non-current assets | (12.3) | (5.8) |
Accounts payable | 10.9 | 49.7 |
Other current and non-current liablities | 13 | (19.3) |
Net cash flows provided by operating activities | 130.4 | 21.2 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Capital expenditures | (70.1) | (56.4) |
Acquisitions, net of cash acquired | 1 | (511.6) |
Net cash flows used in investing activities | (69.1) | (568) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Purchase of treasury stock | (0.1) | |
Cash proceeds from stock issuance | 0.8 | |
Excess tax benefits realized from prior exercises of restricted stock | 0.9 | 0.6 |
Net transfers from B/E Aerospace, Inc. | 509 | |
Deferred acquisition payments | (91) | |
Net cash flows (used in) provided by financing activities | (89.4) | 509.6 |
Effect of foreign exchange rate changes on cash and cash equivalents | (0.8) | 0.4 |
Net decrease in cash and cash equivalents | (28.9) | (36.8) |
Cash and cash equivalents, beginning of period | 447.2 | 78.6 |
Cash and cash equivalents, end of period | 418.3 | 41.8 |
Cash paid during period for: | ||
Income taxes | 7 | $ 20.2 |
Interest | $ 33.9 |
Description of Business and Bas
Description of Business and Basis of Presentation | 6 Months Ended |
Jul. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business and Basis of Presentation | Note 1. Description of Business and Basis of Presentation On December 17, 2014, B/E Aerospace, Inc. (“Former Parent” or “B/E Aerospace”) created an independent public company through a spin-off of its Aerospace Solutions Group (“ASG”) and Energy Services Group (“ESG”) businesses to Former Parent’s stockholders (“Spin-Off”). As a result of the Spin-Off, KLX Inc. (the “Company” or “KLX”) now operates as an independent, publicly traded company. Basic and diluted earnings per common share and the average number of common shares outstanding were retrospectively restated for the three and six months ended June 30, 2014 for the number of the Company’s shares outstanding immediately following the transaction. On February 24, 2015, the Board of Directors approved a change in the Company's fiscal year end from December 31 to January 31. This change to the new reporting cycle began February 1, 2015. As a result of the change, the Company will report a January 2015 fiscal month transition period in the Company's Annual Report on Form 10-K for the fiscal year ending January 31, 2016. Financial information for the three and six months ended July 31, 2014 has not been included in this Form 10-Q for the following reasons: (i) the three and six month periods ended June 30, 2014 provide a meaningful comparison for the three and six months ended July 31, 2015; (ii) there are no significant factors, seasonal or otherwise, that would impact the comparability of information if the results for the three and six months ended July 31, 2014 were presented in lieu of results for the three and six month periods ended June 30, 2014; and (iii) it was not practicable or cost justified to prepare this information. The accompanying unaudited condensed consolidated and combined financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. All adjustments which, in the opinion of management, are considered necessary for a fair presentation of the results of operations for the periods shown are of a normal recurring nature and have been reflected in the condensed consolidated and combined financial statements. The results of operations for the periods presented are not necessarily indicative of the results expected for the full fiscal year or for any future period. The information included in these condensed consolidated and combined financial statements should be read in conjunction with the consolidated and combined financial statements and accompanying notes included in the KLX Inc. Annual Report on Form 10-K for the fiscal year ended December 31, 2014. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and related disclosures. Actual results could differ from those estimates. The Company’s unaudited condensed consolidated and combined financial statements include KLX and its wholly owned subsidiaries. Prior to the Spin-Off on December 17, 2014, KLX’s financial statements were derived from B/E Aerospace’s consolidated and combined financial statements and accounting records as if it was operated on a stand-alone basis and were prepared in accordance with GAAP. All intercompany transactions and account balances within the Company have been eliminated. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 6 Months Ended |
Jul. 31, 2015 | |
Accounting Changes And Error Corrections [Abstract] | |
Recent Accounting Pronouncements | Note 2. Recent Accounting Pronouncements In August 2015, FASB issued ASU 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements . ASU 2015-15 clarifies the guidance in ASU 2015-03 regarding presentation and subsequent measurement of debt issuance costs related to line-of-credit arrangements. The SEC Staff announced they would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The Company has debt issuance cost of $8.4 and $5.5 related to its secured revolving credit facility included in other assets as of July 31, 2015 and December 31, 2014, respectively. The Company will continue to present these costs in other assets in accordance with the guidance. In July 2015, FASB issued ASU 2015-11, Simplifying the Measurement of Inventory . ASU 2015-11 requires that inventory be measured at the lower of cost or net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Inventory measured using last-in, first-out (“LIFO”) or the retail inventory method are excluded from the scope of this update which is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The adoption of ASU 2015-11 is not expected to have a material impact on the Company’s combined financial statements. In April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2015-03, Simplifying the Presentation of Debt Issuance Costs, which updated the guidance in ASC Topic 835, Interest. The updated guidance is effective retrospectively for annual periods and interim periods within the annual periods beginning after December 15, 2015. Early adoption is permitted, including early adoption in an interim period. The amendment requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. The Company will adopt ASU 2015-03 in the fiscal year beginning February 1, 2016 and had debt issuance costs related to the 5.875% senior unsecured notes of $21.7 and $23 as of July 31, 2015 and December 31, 2014 respectively, included in other assets. In May 2014, FASB issued ASU 2014-09, Revenue from Contracts with Customers, which updated the guidance in ASC Topic 606, Revenue Recognition . The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should identify the contract(s) with a customer, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to the performance obligations in the contract and recognize revenue when (or as) the entity satisfies a performance obligation. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date . The amendments in this update deferred the effective date for implementation of ASU 2014-09 by one year and is now effective for annual reporting periods beginning after December 15, 2017. Early application is permitted only as of annual reporting periods beginning after December 15, 2016 including interim reporting periods within that period. The Company is currently evaluating the impact this guidance will have on its consolidated financial condition, results of operations, cash flows and disclosures and is currently unable to estimate the impact of adopting this guidance . |
Business Combinations
Business Combinations | 6 Months Ended |
Jul. 31, 2015 | |
Business Combinations [Abstract] | |
Divestitures and Business Combinations | Note 3. Business Combinations During 2013, the Company acquired the assets of Blue Dot Energy Services, LLC (“Blue Dot”) and Bulldog Frac Rentals, LLC (“Bulldog”) (the “2013 Acquisitions”), providers of parts distribution, rental equipment and on-site services to the oil and gas industry, for a net purchase price of $114.0 . The excess of the purchase price over the fair value of the identifiable assets acquired approximated $70.6 , of which $33.2 was allocated to identified intangible assets, consisting of customer contracts and relationships and covenants not to compete, and $37.4 is included in goodwill. The useful life assigned to the customer contracts and relationships is 20 years, and the covenants not to compete are being amortized over their contractual periods of five years. In January 2014, the Company acquired the assets of the LT Energy Services group of companies ("LT"), an Eagle Ford Shale provider of rental equipment, for a net purchase price of approximately $102.5 . In February 2014, the Company acquired the assets of Wildcat Wireline LLC ("Wildcat"), a provider of wireline services primarily in the Eagle Ford Shale and also in the Marcellus/Utica Shales, for a net purchase price of approximately $153.4 . In April 2014, the Company acquired the assets of the Vision Oil Tools, LLC group of companies ("Vision"), a provider of technical services and associated rental equipment to the energy sector. Vision established a new geographical base of operations for the Company in the North Dakota (Williston/Bakken) and Rocky Mountain regions. The total purchase price was $175.7 , which included a deferred payment of $35.0 , which was paid during the first quarter of fiscal year 2015 based on the achievement of 2014 financial results. In April 2014, the Company acquired the assets of the Marcellus Gasfield Services group of companies ("MGS") engaged in manufacturing and rental of equipment in the Marcellus/Utica Shales for approximately $44.0 . During June 2014, the Company acquired the assets of the Cornell Solutions group of companies ("Cornell"), which provides technical services and rental equipment to the energy sector in the Eagle Ford Shale and Permian Basin. The total purchase price was $128.2 , which included a deferred payment of $56.0 , which was paid during the first quarter of fiscal year 2015 based on the achievement of 2014 financial results. These acquisitions are referred to collectively as the "2014 Acquisitions." For the 2014 Acquisitions, the excess of the purchase price over the fair value of the identifiable assets acquired approximated $431.3 , of which $162 was allocated to identified intangible assets, consisting of customer contracts and relationships and covenants not to compete, and $269.3 is included in goodwill. The useful life assigned to the customer contracts and relationships is 20 years, and the covenants not to compete are being amortized over their contractual periods of five years. The 2014 and 2013 Acquisitions were accounted for as purchases under FASB ASC 805, Business Combinations (“ASC 805”). The assets purchased and liabilities assumed for the 2014 and 2013 Acquisitions have been reflected in the accompanying consolidated balance sheets as of July 31, 2015 and December 31, 2014 and the results of operations for the 2014 and 2013 Acquisitions are included in the accompanying consolidated and combined statements of earnings from the respective dates of acquisition. The Company completed its evaluation and allocation of the purchase price for the Cornell acquisition during the second quarter of fiscal 2015. The following table summarizes the fair values of assets acquired and liabilities assumed in the 2014 and 2013 Acquisitions in accordance with ASC 805: Other 2014 Wildcat Vision Cornell Acquisitions 2014 2013 Accounts receivable-trade $ $ $ $ $ $ Inventories - - Other current and non-current assets - - Property and equipment Goodwill Identified intangibles Accounts payable - Other current and non-current liabilities - Total consideration paid $ $ $ $ $ $ The majority of the goodwill and other intangible assets related to the 2014 and 2013 Acquisitions is expected to be deductible for tax purposes. On a pro forma basis to give effect to the 2013 and 2014 Acquisitions as if they occurred on January 1, 2013, revenues, net earnings and earnings per diluted share for the three months ended June 30, 2014 were $445.7 , $50.2 and $0.96 , respectively, and $868.7 , $103.3 and $1.98 , respectively, for the six months ended June 30, 2014. |
Inventories
Inventories | 6 Months Ended |
Jul. 31, 2015 | |
Inventory Disclosure [Abstract] | |
Inventories | Note 4. Inventories Inventories, made up of finished goods, consist primarily of aerospace fasteners and consumables. The Company values inventories at the lower of cost or market, using first ‑in, first ‑out or weighted average cost method. The Company regularly reviews inventory quantities on hand and records a provision for excess and obsolete inventory based primarily on historical demand, estimated product demand to support contractual supply agreements with its customers and the age of the inventory, among other factors. Demand for the Company’s products can fluctuate from period to period depending on customer activity. Inventory reserves were approximately $36.5 and $33.0 as of July 31, 2015 and December 31, 2014, respectively. Substantially all of our inventory is comprised of aerospace grade fasteners, which support original equipment manufacturer (“OEM”) production and the aftermarket over the life of the airframe. Inventory with a limited shelf life is continually monitored and reserved for in advance of expiration. The provision for inventory with limited shelf life has not exceeded $0.5 on an annual basis during the past three years. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 6 Months Ended |
Jul. 31, 2015 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Note 5. Goodwill and Intangible Assets The table below sets forth the intangible assets by major asset class, all of which were acquired through business purchase transactions: July 31, 2015 Useful Life Original Accumulated Net Book (Years) Cost Amortization Value Customer contracts and relationships 8 - 30 $ $ $ Covenants not to compete 4 - 5 Trade names Indefinite - $ $ $ Amortization expense associated with identifiable intangible assets was approximately $6.7 and $7.5 for the three months ended July 31, 2015 and June 30, 2014, respectively, and $13.3 and $13.8 for the six months ended July 31, 2015 and June 30, 2014, respectively. The Company currently expects to recognize amortization expense of approximately $27 in each of the next five fiscal years. The future amortization amounts are estimates. Actual future amortization expense may be different due to future acquisitions, impairments, changes in amortization periods or other factors such as changes in exchange rates for assets acquired outside the United States. The Company expenses costs to renew or extend the term of a recognized intangible asset . Goodwill decreased $57.5 as compared to December 31, 2014, as a result of purchase price allocation adjustments associated with the 2014 Acquisitions and foreign currency translation adjustments. The fair value of the ESG reporting unit exceeded the carrying value by approximately 28% as of December 31, 2014, and approximately $310.4 of goodwill has been allocated to the ESG reporting unit as of July 31, 2015. The precipitous decline in oil and gas prices, which began in late 2014 and which has resulted in significant cut backs in capital expenditures by our oil and gas customers, continued into the second quarter of 2015. The nearly 60% year-over-year decline in North American onshore rig count has led to a reduction in our customers’ capital expenditures and has negatively impacted our business in the form of volume declines and pricing concessions across many of the service lines and geographies in which we operate. In response to these evolving industry conditions, our approach is to first ensure that we manage our ESG business prudently by closely monitoring costs while positioning our resources in those activities and regions which we believe will maximize our revenue opportunities. Secondly, our strategy is to maintain sufficient liquidity to take advantage of opportunities that will present themselves. We will also focus on operational excellence and continuous improvement initiatives. Finally, we will work hard to uncover high return acquisition opportunities over the next 18 - 24 months. However, there can be no assurance such measures will prevent our ESG business from suffering continued operating losses from reduction in the volume and/or pricing of its services. ESG's cash flow projections were a significant input into the December 31, 2014 fair value. If the ESG business continues to be unable to achieve projected results or long-term projections are adjusted downward, it could negatively impact future valuations of the ESG reporting unit and result in a material impairment charge. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jul. 31, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 6. Related Party Transactions The condensed combined statements of earnings and comprehensive income for the three and six months ended June 30, 2014 include an allocation of general corporate expenses from B/E Aerospace. These costs were allocated to the Company on a systematic and reasonable basis when identifiable, with the remainder allocated on the basis of costs incurred, headcount or other measures. Allocations for general corporate expenses, including management costs and corporate support services provided to the Company, totaled $ 8.2 and $14.6 for the three and six months ended June 30, 2014, respectively. These amounts include costs for functions including executive management, finance, legal, information technology, human resources, employee benefits administration, treasury, risk management, procurement and other shared services. In connection with the Spin-Off, we have created in-house some of the functions that were previously provided to us by B/E Aerospace. In addition, we have entered into certain agreements with B/E Aerospace relating to transition services and IT services for a transitional period of approximately 24 months following the Spin-Off. In addition, we entered into an employee matters agreement and a tax sharing and indemnification agreement with B/E Aerospace in connection with the Spin-Off. This transitional support enables KLX to establish its stand-alone processes for various activities that were previously provided by B/E Aerospace and does not constitute significant continuing support of KLX’s operations. The agreements did not have a material effect on the Company’s financial statements for the three and six months ended July 31, 2015 and June 30, 2014 , and the Company does not expect such agreements to have a material effect on our financial statements in the future . Sales and cost of sales to affiliates for the three and six months ended July 31, 2015 and June 30, 2014 were not significant. |
Accrued Liabilities
Accrued Liabilities | 6 Months Ended |
Jul. 31, 2015 | |
Payables And Accruals [Abstract] | |
Accrued Liabilities | Note 7. Accrued Liabilities Accrued liabilities consist of the following : July 31, 2015 December 31, 2014 Accrued salaries, vacation and related benefits $ $ Income taxes payable Accrued interest Other accrued taxes Other accrued liabilities $ $ |
Long-Term Debt
Long-Term Debt | 6 Months Ended |
Jul. 31, 2015 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Note 8. Long-Term Debt As of July 31, 2015, long-term debt consisted of $1,200.0 aggregate principal amount o f the Company’s 5.875% senior unsecured notes due 2022 (the “5.875% Notes”). As of July 31, 2015, the Company also had a $750.0 secured revolving credit facility pursuant to a credit agreement dated as of December 16, 2014 and amended and restated on May 19, 2015 (the “Revolving Credit Facility”). Borrowings under the Revolving Credit Facility bear interest at an annual rate equal to the London interbank offered rate (“LIBOR”) (as defined in the Revolving Credit Facility) plus the applicable margin (as defined). No amounts were outstanding under the Revolving Credit Facility as of July 31, 2015. On May 19, 2015, we amended the secured Revolving Credit Facility to a structure tied to a borrowing base formula, and in the process increased the size to $750.0 while reducing the interest rate margins applicable to any borrowings under the Revolving Credit Facility. As a result, the Revolving Credit Facility has no maintenance financial covenants. This Revolving Credit Facility matures in May 2020. Letters of credit outstanding under the Revolving Credit Facility aggregated $0.5 and $0.4 at July 31, 2015 and December 31, 2014, respectively. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jul. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 9. Fair Value Measurements All short-term financial instruments are generally carried at amounts that approximate estimated fair value. The fair value is the price at which an asset could be exchanged in a current transaction between knowledgeable, willing parties. Assets measured at fair value are categorized based upon the lowest level of significant input to the valuations. Level 1 – quoted prices in active markets for identical assets and liabilities. Level 2 – quoted prices for identical assets and liabilities in markets that are not active, or observable inputs other than quoted prices in active markets for identical assets and liabilities. Level 3 – unobservable inputs in which there is little or no market data available, which require the reporting entity to develop its own assumptions. The carrying amounts of cash and cash equivalents (which the Company classifies as Level 1 assets), accounts receivable – trade and accounts payable represent their respective fair values due to their short- term nature. There was no debt outstanding under the Revolving Credit Facility as of July 31, 2015. The fair value of the Company’s 5.875% Notes, based on market prices for publicly-traded debt (which the Company classifies as Level 2 inputs), was $1,206.0 as of July 31, 2015 and December 31, 2014. |
Commitments, Contingencies and
Commitments, Contingencies and Off-Balance Sheet Arrangements | 6 Months Ended |
Jul. 31, 2015 | |
Commitments, Contingencies and Off-Balance Sheet Arrangements | |
Commitments, Contingencies and Off-Balance Sheet Arrangements | Note 10. Commitments, Contingencies and Off-Balance Sheet Arrangements Lease Commitments - The Company finances its use of certain facilities and equipment under committed lease arrangements provided by various institutions. Since the terms of these arrangements meet the accounting definition of operating lease arrangements, the aggregate sum of future minimum lease payments is not reflected on the condensed consolidated balance sheets. At July 31, 2015, future minimum lease payments under these arrangements approximated $ 108.3 , the majority of which related to long-term real estate leases. Litigation - The Company is a defendant in various legal actions arising in the normal course of business, the outcomes of which, in the opinion of management, neither individually nor in the aggregate are likely to result in a material adverse effect on the Company’s combined financial statements. Indemnities, Commitments and Guarantees - During its normal course of business, the Company has made certain indemnities, commitments and guarantees under which it may be required to make payments in relation to certain transactions. These indemnities include indemnities to various lessors in connection with facility leases for certain claims arising from such facility or lease and indemnities to other parties to certain acquisition agreements. The duration of these indemnities, commitments and guarantees varies, and in certain cases, is indefinite. Many of these indemnities, commitments and guarantees provide for limitations on the maximum potential future payments the Company could be obligated to make. However, the Company is unable to estimate the maximum amount of liability related to its indemnities, commitments and guarantees because such liabilities are contingent upon the occurrence of events that are not reasonably determinable. Management believes that any liability for these indemnities, commitments and guarantees would not be material to the accompanying combined financial statements. Accordingly, no significant amounts have been accrued for indemnities, commitments and guarantees. The Company has employment agreements with three year initial terms, which renew for one additional year on each anniversary date, with certain key members of management. The Company’s employment agreements generally provide for certain protections in the event of a change of control. These protections generally include the payment of severance and related benefits under certain circumstances in the event of a change of control. |
Accounting for Stock-Based Comp
Accounting for Stock-Based Compensation | 6 Months Ended |
Jul. 31, 2015 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Accounting for Stock-Based Compensation | Note 11. Accounting for Stock-Based Compensation The Company has a Long-Term Incentive Plan (“LTIP”) under which the Company’s Compensation Committee has the authority to grant stock options, stock appreciation rights, restricted stock, restricted stock units or other forms of equity-based or equity-related awards. The Company accounts for share-based compensation arrangements in accordance with the provisions of FASB ASC 718, Compensation—Stock Compensation (“ASC 718”), whereby share-based compensation cost is measured on the date of grant, based on the fair value of the award, and is recognized over the requisite service period. Compensation cost recognized during the three and six months ended June 30, 2014 related to grants of restricted stock and restricted stock units granted or approved by B/E Aerospace. All unvested shares of restricted stock held by former B/E employees that joined KLX on the distribution date were converted into unvested shares of KLX on the distribution date at a ratio equal to 1.8139 . Compensation cost recognized during the three and six months ended July 31, 2015 and June 30, 2014 are related to the unvested shares converted on the distribution date and new shares of KLX restricted stock and stock options granted during 2015 was $3.4 and $0.8 , and $7.1 and $1.8 , respectively. Unrecognized compensation expense related to these grants was $32.3 at July 31, 2015. The Company has established a qualified Employee Stock Purchase Plan similar to the Former Parent’s plan (“KLX Plan”). The KLX Plan allows qualified employees (as defined in the plan) to participate in the purchase of designated shares of KLX’s common stock at a price equal to 85% of the closing price for each semi-annual stock purchase period. The fair value of employee purchase rights represents the difference between the closing price of KLX’s shares on the date of purchase and the purchase price of the shares. Compensation cost for this plan was not material to any of the periods presented. |
Segment Reporting
Segment Reporting | 6 Months Ended |
Jul. 31, 2015 | |
Segment Reporting | |
Segment Reporting | Note 12. Segment Reporting The Company is organized based on the products and services it offers. As a result of the ESG acquisitions, the Company determined that ESG met the requirements of a reportable segment operating in a single line of business. The Company’s ASG reportable segment, which is also its operating segment, is comprised of consumables management and is in a single line of business. The segment regularly reports its results of operations and makes requests for capital expenditures and acquisition funding to the Company’s chief operational decision-making group (“CODM”). This group is comprised of the Chairman and Chief Executive Officer, the President and Chief Operating Officer and the Vice President – Chief Financial Officer and Treasurer. As a result, the CODM has determined the Company has two reportable segments. The following table presents revenues and operating earnings by reportable segment: THREE MONTHS ENDED SIX MONTHS ENDED JULY 31, JUNE 30, JULY 31, JUNE 30, Revenues: 2015 2014 2015 2014 Aerospace solutions group $ $ $ $ Energy services group Total revenues Operating earnings (1) Aerospace solutions group Energy services group Total operating earnings Interest expense (income) Earnings before income taxes $ $ $ $ (1) Operating earnings include an allocation of employee benefits and general and administrative costs based on the proportion of each segment’s number of employees and sales, respectively. The following table presents capital expenditures by reportable segment: THREE MONTHS ENDED SIX MONTHS ENDED JULY 31, JUNE 30, JULY 31, JUNE 30, 2015 2014 2015 2014 Aerospace Solutions Group $ $ $ $ Energy Services Group $ $ $ $ Corporate capital expenditures have been allocated to the above segments based on each segment’s percentage of total capital expenditures. The following table presents goodwill by reportable segment: July 31, December 31, 2015 2014 Aerospace Solutions Group $ $ Energy Services Group $ $ The following table presents total assets by reportable segment: July 31, December 31, 2015 2014 Aerospace Solutions Group $ $ Energy Services Group $ $ Corporate assets (primarily cash and cash equivalents) of $ 481.1 and $531.4 at July 31, 2015 and December 31, 2014, respectively, have been allocated to the above segments based on each segment’s percentage of total assets. |
Net Earnings Per Common Share
Net Earnings Per Common Share | 6 Months Ended |
Jul. 31, 2015 | |
Earnings Per Share [Abstract] | |
Net Earnings Per Common Share | Note 13. Net Earnings Per Common Share Basic net earnings per common share is computed using the weighted average common shares outstanding during the period. Diluted net earnings per common share is computed by using the weighted average common shares outstanding including the dilutive effect of stock options, shares issued under the K LX Plan and restricted shares based on an average share price during the period. For the three months ended July 31, 2015 and June 30, 2014, approximately 0.2 and 0.1 shares and for the six months ended July 31, 2015 and June 30, 2014, approximately 0.2 and 0.1 shares of the Company’s common stock, respectively, were excluded from the determination of diluted earnings per common share because their effect would have been anti-dilutive. The computations of basic and diluted earnings per share for the three and six months ended July 31, 2015 and June 30, 2014 are as follows: THREE MONTHS ENDED SIX MONTHS ENDED JULY 31, June 30, JULY 31, June 30, 2015 2014 2015 2014 Net earnings $ $ $ $ (Shares in millions) Basic weighted average common shares Effect of dilutive securities - Dilutive securities Diluted weighted average common shares Basic net earnings per common share $ $ $ $ Diluted net earnings per common share $ $ $ $ |
Accounting for Uncertainty in I
Accounting for Uncertainty in Income Taxes | 6 Months Ended |
Jul. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Accounting for Uncertainty in Income Taxes | Note 14. Accounting for Uncertainty in Income Taxes In accordance with FASB ASC 740, Income Taxes (“ASC 740”), the Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. As of July 31, 2015 and June 30, 2014, the Company had $ 9.1 and $ 2.5 , respectively, of net unrecognized tax benefits. This liability, if recognized, would affect the Company’s effective tax rate. Pursuant to the terms of the Tax Sharing Agreement with our former parent, B/E Aerospace, the company may be liable for income tax in certain foreign jurisdictions arising from the examination of tax years during which the company was part of the B/E Group. The statute of limitations in these foreign jurisdictions is open for tax years 2009-2014. There are currently no material income tax audits in progress. The Company classifies interest and penalties related to income tax as income tax expense. The amount included in the Company’s liability for unrecognized tax benefits for interest and penalties was immaterial at July 31, 2015 and June 30, 2014. |
Recent Accounting Pronounceme20
Recent Accounting Pronouncements (Policies) | 6 Months Ended |
Jul. 31, 2015 | |
Accounting Changes And Error Corrections [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In August 2015, FASB issued ASU 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements . ASU 2015-15 clarifies the guidance in ASU 2015-03 regarding presentation and subsequent measurement of debt issuance costs related to line-of-credit arrangements. The SEC Staff announced they would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The Company has debt issuance cost of $8.4 and $5.5 related to its secured revolving credit facility included in other assets as of July 31, 2015 and December 31, 2014, respectively. The Company will continue to present these costs in other assets in accordance with the guidance. In July 2015, FASB issued ASU 2015-11, Simplifying the Measurement of Inventory . ASU 2015-11 requires that inventory be measured at the lower of cost or net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Inventory measured using last-in, first-out (“LIFO”) or the retail inventory method are excluded from the scope of this update which is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The adoption of ASU 2015-11 is not expected to have a material impact on the Company’s combined financial statements. In April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2015-03, Simplifying the Presentation of Debt Issuance Costs, which updated the guidance in ASC Topic 835, Interest. The updated guidance is effective retrospectively for annual periods and interim periods within the annual periods beginning after December 15, 2015. Early adoption is permitted, including early adoption in an interim period. The amendment requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. The Company will adopt ASU 2015-03 in the fiscal year beginning February 1, 2016 and had debt issuance costs related to the 5.875% senior unsecured notes of $21.7 and $23 as of July 31, 2015 and December 31, 2014 respectively, included in other assets. In May 2014, FASB issued ASU 2014-09, Revenue from Contracts with Customers, which updated the guidance in ASC Topic 606, Revenue Recognition . The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should identify the contract(s) with a customer, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to the performance obligations in the contract and recognize revenue when (or as) the entity satisfies a performance obligation. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date . The amendments in this update deferred the effective date for implementation of ASU 2014-09 by one year and is now effective for annual reporting periods beginning after December 15, 2017. Early application is permitted only as of annual reporting periods beginning after December 15, 2016 including interim reporting periods within that period. The Company is currently evaluating the impact this guidance will have on its consolidated financial condition, results of operations, cash flows and disclosures and is currently unable to estimate the impact of adopting this guidance |
Business Combinations (Tables)
Business Combinations (Tables) | 6 Months Ended |
Jul. 31, 2015 | |
Business Combinations [Abstract] | |
Estimates Of Fair Values Of Assets Acquired And Liabilities Assumed | Other 2014 Wildcat Vision Cornell Acquisitions 2014 2013 Accounts receivable-trade $ $ $ $ $ $ Inventories - - Other current and non-current assets - - Property and equipment Goodwill Identified intangibles Accounts payable - Other current and non-current liabilities - Total consideration paid $ $ $ $ $ $ |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 6 Months Ended |
Jul. 31, 2015 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Intangible Assets by Major Asset Class | July 31, 2015 Useful Life Original Accumulated Net Book (Years) Cost Amortization Value Customer contracts and relationships 8 - 30 $ $ $ Covenants not to compete 4 - 5 Trade names Indefinite - $ $ $ |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 6 Months Ended |
Jul. 31, 2015 | |
Payables And Accruals [Abstract] | |
Accrued Liabilities | July 31, 2015 December 31, 2014 Accrued salaries, vacation and related benefits $ $ Income taxes payable Accrued interest Other accrued taxes Other accrued liabilities $ $ |
Segment Reporting (Tables)
Segment Reporting (Tables) | 6 Months Ended |
Jul. 31, 2015 | |
Segment Reporting | |
Revenues and Operating Earnings by Reportable Segment | THREE MONTHS ENDED SIX MONTHS ENDED JULY 31, JUNE 30, JULY 31, JUNE 30, Revenues: 2015 2014 2015 2014 Aerospace solutions group $ $ $ $ Energy services group Total revenues Operating earnings (1) Aerospace solutions group Energy services group Total operating earnings Interest expense (income) Earnings before income taxes $ $ $ $ |
Capital Expenditures by Reportable Segment | THREE MONTHS ENDED SIX MONTHS ENDED JULY 31, JUNE 30, JULY 31, JUNE 30, 2015 2014 2015 2014 Aerospace Solutions Group $ $ $ $ Energy Services Group $ $ $ $ |
Goodwill by Reportable Segment | July 31, December 31, 2015 2014 Aerospace Solutions Group $ $ Energy Services Group $ $ |
Total Assets by Reportable Segment | July 31, December 31, 2015 2014 Aerospace Solutions Group $ $ Energy Services Group $ $ |
Net Earnings Per Common Share (
Net Earnings Per Common Share (Tables) | 6 Months Ended |
Jul. 31, 2015 | |
Earnings Per Share [Abstract] | |
Computations of Basic and Diluted Earnings Per Share | THREE MONTHS ENDED SIX MONTHS ENDED JULY 31, June 30, JULY 31, June 30, 2015 2014 2015 2014 Net earnings $ $ $ $ (Shares in millions) Basic weighted average common shares Effect of dilutive securities - Dilutive securities Diluted weighted average common shares Basic net earnings per common share $ $ $ $ Diluted net earnings per common share $ $ $ $ |
Recent Accounting Pronounceme26
Recent Accounting Pronouncements (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Jul. 31, 2015 | Dec. 31, 2014 | |
Debt Instruments [Abstract] | ||
Debt issuance costs | $ 8.4 | $ 5.5 |
Senior Unsecured Notes 5.875 Percent Due 2022 | ||
Debt Instruments [Abstract] | ||
Debt issuance costs | $ 21.7 | $ 23 |
Business Combinations (Details)
Business Combinations (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||
Jun. 30, 2014 | Apr. 30, 2014 | Feb. 28, 2014 | Jan. 31, 2014 | Jul. 31, 2015 | Apr. 30, 2015 | Jul. 31, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | |
Business Combinations | ||||||||||
Purchase price, net of cash acquired | $ (1) | $ 511.6 | ||||||||
Goodwill | $ 1,271.2 | 1,271.2 | $ 1,328.7 | |||||||
Blue Dot | ||||||||||
Business Combinations | ||||||||||
Purchase price, net of cash acquired | $ 114 | |||||||||
Identified intangible assets including goodwill | 70.6 | |||||||||
Identified intangibles | 33.2 | |||||||||
Goodwill | $ 37.4 | |||||||||
Vision Oil Tools, LLC | ||||||||||
Business Combinations | ||||||||||
Identified intangibles | 50.1 | 50.1 | ||||||||
Goodwill | 69.8 | 69.8 | ||||||||
Cash paid for business acquisition | $ 175.7 | $ 35 | ||||||||
Cornell | ||||||||||
Business Combinations | ||||||||||
Identified intangibles | 33.6 | 33.6 | ||||||||
Goodwill | 57.5 | 57.5 | ||||||||
Cash paid for business acquisition | $ 128.2 | |||||||||
Additional cash payment to be made on acquisition | $ 56 | |||||||||
Marcellus/Utica basin | ||||||||||
Business Combinations | ||||||||||
Cash paid for business acquisition | $ 44 | |||||||||
LT Energy Services | ||||||||||
Business Combinations | ||||||||||
Cash paid for business acquisition | $ 102.5 | |||||||||
Wildcat Wireline LLC | ||||||||||
Business Combinations | ||||||||||
Identified intangibles | 37.7 | 37.7 | ||||||||
Goodwill | 83.7 | 83.7 | ||||||||
Cash paid for business acquisition | $ 153.4 | |||||||||
2014 Acquisitions | ||||||||||
Business Combinations | ||||||||||
Identified intangible assets including goodwill | 431.3 | |||||||||
Identified intangibles | 162 | 162 | 162 | |||||||
Goodwill | 269.3 | 269.3 | $ 269.3 | |||||||
2013 Acquisitions | ||||||||||
Business Combinations | ||||||||||
Identified intangibles | 33.2 | 33.2 | ||||||||
Goodwill | $ 37.4 | $ 37.4 | ||||||||
Customer contracts and relationships | Minimum | ||||||||||
Business Combinations | ||||||||||
Useful life (years) | 8 years | |||||||||
Customer contracts and relationships | Maximum | ||||||||||
Business Combinations | ||||||||||
Useful life (years) | 30 years | |||||||||
Customer contracts and relationships | Blue Dot | ||||||||||
Business Combinations | ||||||||||
Useful life (years) | 20 years | |||||||||
Customer contracts and relationships | 2014 Acquisitions | Maximum | ||||||||||
Business Combinations | ||||||||||
Useful life (years) | 20 years | |||||||||
Covenants not to compete and other identified intangibles | Minimum | ||||||||||
Business Combinations | ||||||||||
Useful life (years) | 4 years | |||||||||
Covenants not to compete and other identified intangibles | Maximum | ||||||||||
Business Combinations | ||||||||||
Useful life (years) | 5 years | |||||||||
Covenants not to compete and other identified intangibles | Blue Dot | ||||||||||
Business Combinations | ||||||||||
Useful life (years) | 5 years | |||||||||
Covenants not to compete and other identified intangibles | 2014 Acquisitions | ||||||||||
Business Combinations | ||||||||||
Useful life (years) | 5 years |
Business Combinations (Details2
Business Combinations (Details2) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2014 | Jul. 31, 2015 | Dec. 31, 2014 | |
Business Combination, Separately Recognized Transactions [Line Items] | ||||
Goodwill | $ 1,271.2 | $ 1,328.7 | ||
Unaudited pro forma revenues had business acquisitions occurred at the beginning of the period | $ 445.7 | $ 868.7 | ||
Unaudited pro forma net earnings had business acquisitions occurred at the beginning of the period | $ 50.2 | $ 103.3 | ||
Unaudited pro forma diluted net earnings per share had business acquisitions occurred at the beginning of the period | $ 0.96 | $ 1.98 | ||
2014 Acquisitions | ||||
Business Combination, Separately Recognized Transactions [Line Items] | ||||
Accounts receivable-trade | 36.8 | |||
Inventories | 1.7 | |||
Other current and non-current assets | 2.5 | |||
Property and equipment | 143.4 | |||
Goodwill | 269.3 | 269.3 | ||
Identified intangibles | 162 | $ 162 | ||
Accounts payable | (6.5) | |||
Other current and non-current liabilities | (96.4) | |||
Total purchase price | 512.8 | |||
Wildcat Wireline LLC | ||||
Business Combination, Separately Recognized Transactions [Line Items] | ||||
Accounts receivable-trade | 0.4 | |||
Inventories | 1.3 | |||
Property and equipment | 30.3 | |||
Goodwill | 83.7 | |||
Identified intangibles | 37.7 | |||
Total purchase price | 153.4 | |||
Vision Oil Tools, LLC | ||||
Business Combination, Separately Recognized Transactions [Line Items] | ||||
Accounts receivable-trade | 10.8 | |||
Other current and non-current assets | 2.4 | |||
Property and equipment | 44.1 | |||
Goodwill | 69.8 | |||
Identified intangibles | 50.1 | |||
Accounts payable | (1.5) | |||
Other current and non-current liabilities | (35) | |||
Total purchase price | 140.7 | |||
Cornell | ||||
Business Combination, Separately Recognized Transactions [Line Items] | ||||
Accounts receivable-trade | 10.5 | |||
Property and equipment | 28.5 | |||
Goodwill | 57.5 | |||
Identified intangibles | 33.6 | |||
Accounts payable | (0.7) | |||
Other current and non-current liabilities | (57.2) | |||
Total purchase price | 72.2 | |||
Other 2014 Acquisitions | ||||
Business Combination, Separately Recognized Transactions [Line Items] | ||||
Accounts receivable-trade | 15.1 | |||
Inventories | 0.4 | |||
Other current and non-current assets | 0.1 | |||
Property and equipment | 40.5 | |||
Goodwill | 58.3 | |||
Identified intangibles | 40.6 | |||
Accounts payable | (4.3) | |||
Other current and non-current liabilities | (4.2) | |||
Total purchase price | 146.5 | |||
2013 Acquisitions | ||||
Business Combination, Separately Recognized Transactions [Line Items] | ||||
Accounts receivable-trade | 14.8 | |||
Inventories | 3.9 | |||
Other current and non-current assets | 0.2 | |||
Property and equipment | 35.5 | |||
Goodwill | 37.4 | |||
Identified intangibles | 33.2 | |||
Accounts payable | (10) | |||
Other current and non-current liabilities | (1) | |||
Total purchase price | $ 114 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Jul. 31, 2015 | Dec. 31, 2014 |
Inventory reserves | $ 36.5 | $ 33 |
Maximum | ||
Provision for inventory with limited shelf life | $ 0.5 | $ 0.5 |
Goodwill and Intangible Asset30
Goodwill and Intangible Assets (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jul. 31, 2015 | Dec. 31, 2014 | |
Goodwill and Intangible Assets Disclosure [Line Items] | ||
Intangible assets, original cost | $ 573.9 | |
Accumulated Amortization | 121.9 | |
Intangible assets, net book value | 452 | $ 442.3 |
Customer contracts and relationships | ||
Goodwill and Intangible Assets Disclosure [Line Items] | ||
Intangible assets, original cost | 538.5 | |
Accumulated Amortization | 114.6 | |
Intangible assets, net book value | $ 423.9 | |
Customer contracts and relationships | Minimum | ||
Goodwill and Intangible Assets Disclosure [Line Items] | ||
Useful life (years) | 8 years | |
Customer contracts and relationships | Maximum | ||
Goodwill and Intangible Assets Disclosure [Line Items] | ||
Useful life (years) | 30 years | |
Covenants not to compete and other identified intangibles | ||
Goodwill and Intangible Assets Disclosure [Line Items] | ||
Intangible assets, original cost | $ 18.2 | |
Accumulated Amortization | 7.3 | |
Intangible assets, net book value | $ 10.9 | |
Covenants not to compete and other identified intangibles | Minimum | ||
Goodwill and Intangible Assets Disclosure [Line Items] | ||
Useful life (years) | 4 years | |
Covenants not to compete and other identified intangibles | Maximum | ||
Goodwill and Intangible Assets Disclosure [Line Items] | ||
Useful life (years) | 5 years | |
Trade names | ||
Goodwill and Intangible Assets Disclosure [Line Items] | ||
Intangible assets, original cost | $ 17.2 | |
Intangible assets, net book value | $ 17.2 |
Goodwill and Intangible Asset31
Goodwill and Intangible Assets (Details2) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jul. 31, 2015 | Jun. 30, 2014 | Jul. 31, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Amortization expense on identifiable intangible assets | $ 6.7 | $ 7.5 | $ 13.3 | $ 13.8 | |
Expected amortization expenses in year one | 27 | 27 | |||
Expected amortization expenses in year two | 27 | 27 | |||
Expected amortization expenses in year three | 27 | 27 | |||
Expected amortization expenses in year four | 27 | 27 | |||
Expected amortization expenses in year five | 27 | 27 | |||
Goodwill decrease during period | (57.5) | ||||
Goodwill | $ 1,271.2 | 1,271.2 | $ 1,328.7 | ||
Minimum | |||||
Period of time over which the company will work to uncover high return acquisition opportunities | 18 months | ||||
Maximum | |||||
Period of time over which the company will work to uncover high return acquisition opportunities | 24 months | ||||
Energy services group | |||||
Fair value of ESG reporting unit in excess of carrying value (in percentage) | 28.00% | ||||
Goodwill | $ 310.4 | $ 310.4 | $ 342.4 | ||
Percentage of decline in onshore rig count | 60.00% |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |
Jul. 31, 2015 | Jun. 30, 2014 | Jun. 30, 2014 | |
Commitments, Contingencies and Off-Balance Sheet Arrangements | |||
Transitional period | 24 months | ||
Allocations for general corporate expenses, including management costs and corporate support services | $ 8.2 | $ 14.6 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Millions | Jul. 31, 2015 | Dec. 31, 2014 |
Payables And Accruals [Abstract] | ||
Accrued salaries, vacation and related benefits | $ 26 | $ 13.2 |
Income taxes payable | 19.1 | 19.7 |
Accrued interest | 11.8 | 3.1 |
Other accrued taxes | 4.5 | 5.6 |
Other accrued liabilities | 46.3 | 46.5 |
Total accrued liabilities | $ 107.7 | $ 88.1 |
Long-Term Debt (Details)
Long-Term Debt (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Jul. 31, 2015 | May. 31, 2015 | Dec. 31, 2014 | Dec. 16, 2014 | |
Debt Instrument [Line Items] | ||||
Outstanding letter of credit amount | $ 0.5 | $ 0.4 | ||
Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Revolving credit facility | 0 | $ 750 | $ 750 | |
Senior Unsecured Notes 5.875 Percent Due 2022 | ||||
Debt Instrument [Line Items] | ||||
Aggregate principal amount | $ 1,200 | |||
Debt, interest rate | 5.875% |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Millions | Jul. 31, 2015 | Dec. 31, 2014 |
Senior Unsecured Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Senior unsecured notes, fair value | $ 1,206 | $ 1,206 |
Revolving Credit Facility | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long Term Debt | $ 0 |
Commitments, Contingencies an36
Commitments, Contingencies and Off-Balance Sheet Arrangements - Additional Information (Details) - Jul. 31, 2015 - USD ($) $ in Millions | Total |
Commitments, Contingencies and Off-Balance Sheet Arrangements | |
Operating Leases Future Minimum Payments Due | $ 108.3 |
Initial term of employment agreements | 3 years |
Number of additional years for which employment agreements may renew. | 1 year |
Accounting for Stock-Based Co37
Accounting for Stock-Based Compensation - (Details) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 31, 2015USD ($) | Jun. 30, 2014USD ($) | Jul. 31, 2015USD ($) | Jun. 30, 2014USD ($) | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||||
Share conversion ratio | 1.8139 | |||
Share based compensation | $ 3.4 | $ 0.8 | $ 7.1 | $ 1.8 |
Unrecognized compensation cost | $ 32.3 | $ 32.3 | ||
Qualified employees purchase of stock at a price equal to percentage of closing price | 85.00% |
Revenues and Operating Earnings
Revenues and Operating Earnings by Reportable Segment (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jul. 31, 2015 | Jun. 30, 2014 | Jul. 31, 2015 | Jun. 30, 2014 | ||
Revenues [Abstract] | |||||
Revenues | $ 412.7 | $ 430.9 | $ 844.2 | $ 801.8 | |
Operating Income (Loss) [Abstract] | |||||
Operating earnings | [1] | 32.8 | 71 | 80.3 | 139.9 |
Interest expense (income) | 20.6 | (0.1) | 39.2 | (0.2) | |
Earnings before income taxes | 12.2 | 71.1 | 41.1 | 140.1 | |
Aerospace solutions group | |||||
Revenues [Abstract] | |||||
Revenues | 351.7 | 340.5 | 699.7 | 666.9 | |
Operating Income (Loss) [Abstract] | |||||
Operating earnings | [1] | 59.1 | 59.7 | 119.9 | 123.3 |
Energy services group | |||||
Revenues [Abstract] | |||||
Revenues | 61 | 90.4 | 144.5 | 134.9 | |
Operating Income (Loss) [Abstract] | |||||
Operating earnings | [1] | $ (26.3) | $ 11.3 | $ (39.6) | $ 16.6 |
[1] | Operating earnings include an allocation of employee benefits and general and administrative costs based on the proportion of each segment’s number of employees and sales, respectively. |
Capital Expenditures by Reporta
Capital Expenditures by Reportable Segment (Details2) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 31, 2015 | Jun. 30, 2014 | Jul. 31, 2015 | Jun. 30, 2014 | |
Property, Plant and Equipment [Line Items] | ||||
Capital expenditures | $ 34.5 | $ 35.4 | $ 70.1 | $ 56.4 |
Aerospace solutions group | ||||
Property, Plant and Equipment [Line Items] | ||||
Capital expenditures | 6.1 | 4.4 | 11.5 | 8.6 |
Energy services group | ||||
Property, Plant and Equipment [Line Items] | ||||
Capital expenditures | $ 28.4 | $ 31 | $ 58.6 | $ 47.8 |
Goodwill by Reportable Segment
Goodwill by Reportable Segment (Details3) - USD ($) $ in Millions | Jul. 31, 2015 | Dec. 31, 2014 |
Goodwill [Line Items] | ||
Goodwill | $ 1,271.2 | $ 1,328.7 |
Aerospace solutions group | ||
Goodwill [Line Items] | ||
Goodwill | 960.8 | 986.3 |
Energy services group | ||
Goodwill [Line Items] | ||
Goodwill | $ 310.4 | $ 342.4 |
Total Assets by Reportable Segm
Total Assets by Reportable Segment (Details4) - USD ($) $ in Millions | Jul. 31, 2015 | Dec. 31, 2014 |
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | $ 4,266.6 | $ 4,303.6 |
Aerospace solutions group | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | 3,312.5 | 3,316.1 |
Energy services group | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | $ 954.1 | $ 987.5 |
Segment Reporting - Additional
Segment Reporting - Additional Information (Details5) - USD ($) $ in Millions | Jul. 31, 2015 | Dec. 31, 2014 |
Segment Reporting Information [Line Items] | ||
Total assets | $ 4,266.6 | $ 4,303.6 |
Corporate, Non-Segment | ||
Segment Reporting Information [Line Items] | ||
Total assets | $ 481.1 | $ 531.4 |
Net Earnings Per Common Share43
Net Earnings Per Common Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 31, 2015 | Jun. 30, 2014 | Jul. 31, 2015 | Jun. 30, 2014 | |
Earnings Per Share [Abstract] | ||||
Net earnings | $ 7.4 | $ 45.4 | $ 25.3 | $ 89.4 |
Weighted average common shares - basic | 52.2 | 52.2 | 52.2 | 52.2 |
Effect of restricted shares issued | 0.2 | 0.1 | 0.2 | 0.1 |
Denominator for diluted earnings per share - Adjusted weighted average shares (in millions) | 52.4 | 52.3 | 52.4 | 52.3 |
Net earnings per share - basic | $ 0.14 | $ 0.87 | $ 0.48 | $ 1.71 |
Net earnings per share - diluted | $ 0.14 | $ 0.87 | $ 0.48 | $ 1.71 |
Net Earnings Per Common Share44
Net Earnings Per Common Share (Details2) - shares | 3 Months Ended | 6 Months Ended | ||
Jul. 31, 2015 | Jun. 30, 2014 | Jul. 31, 2015 | Jun. 30, 2014 | |
Earnings Per Share [Abstract] | ||||
Anti-dilutive securities excluded from determination of diluted earnings per common share | 0.2 | 0.1 | 0.2 | 0.1 |
Accounting for Uncertainty in45
Accounting for Uncertainty in Income Taxes (Details) - USD ($) $ in Millions | Jul. 31, 2015 | Jun. 30, 2014 |
Income Tax Disclosure [Abstract] | ||
Liability for unrecognized tax benefits that would affect effective tax rate, if recognized | $ 9.1 | $ 2.5 |