Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 31, 2017 | Apr. 11, 2017 | Jul. 31, 2016 | |
Document And Entity Information | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Jan. 31, 2017 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
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 | Large Accelerated Filer | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Common Stock, Shares Outstanding | 51,721,338 | ||
Entity Public Float | $ 1,686 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Jan. 31, 2017 | Jan. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 277.3 | $ 427.8 |
Accounts receivable–trade, less allowance for doubtful accounts ($13.5 at January 31, 2017 and $11.3 at January 31, 2016) | 261.3 | 259.6 |
Inventories, net | 1,381.4 | 1,295.3 |
Other current assets | 39.6 | 40.1 |
Total current assets | 1,959.6 | 2,022.8 |
Property and equipment, net of accumulated depreciation ($149.4 at January 31, 2017 and $109.3 at January 31, 2016) | 248.3 | 260.5 |
Goodwill | 996.4 | 954.9 |
Identifiable intangible assets, net | 314.8 | 262.7 |
Deferred income taxes | 147 | 163.4 |
Other assets | 32.2 | 26.7 |
Total assets | 3,698.3 | 3,691 |
Current liabilities: | ||
Accounts payable | 166 | 145.9 |
Accrued liabilities | 91.1 | 115.3 |
Total current liabilities | 257.1 | 261.2 |
Long-term debt | 1,182 | 1,179.5 |
Deferred income taxes | 5 | 16.2 |
Other non-current liabilities | 33.1 | 31.6 |
Commitments, contingencies and off-balance sheet arrangements (Note 8) | ||
Stockholders' equity: | ||
Preferred stock, $0.01 par value; 1.0 million shares authorized; no shares outstanding | ||
Common stock, $0.01 par value; 250.0 million shares authorized; 53.5 million shares issued as of January 31, 2017 and 53.3 million shares issued as of January 31, 2016 | 0.5 | 0.5 |
Additional paid-in capital | 2,686.5 | 2,662.4 |
Treasury stock: 1.5 million shares at January 31, 2017 and 0.4 shares at January 31, 2016 | (54.4) | (12.5) |
Accumulated deficit | (328) | (373.7) |
Accumulated other comprehensive loss | (83.5) | (74.2) |
Total stockholders' equity | 2,221.1 | 2,202.5 |
Total liabilities and equity | $ 3,698.3 | $ 3,691 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Jan. 31, 2017 | Jan. 31, 2016 |
Consolidated Balance Sheets | ||
Accounts receivable - trade, allowance for doubtful accounts | $ 13.5 | $ 11.3 |
Property and equipment, accumulated depreciation | $ 149.4 | $ 109.3 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 53,500,000 | 53,300,000 |
Treasury stock | 1,500,000 | 400,000 |
Consolidated and Combined State
Consolidated and Combined Statements of Earnings and Comprehensive Income - USD ($) shares in Millions, $ in Millions | 1 Months Ended | 12 Months Ended | ||
Jan. 31, 2015 | Jan. 31, 2017 | Jan. 31, 2016 | Dec. 31, 2014 | |
Consolidated and Combined Statements of Earnings and Comprehensive Income | ||||
Product revenues | $ 93.1 | $ 1,340.9 | $ 1,312.5 | $ 1,310.2 |
Service revenues | 39.9 | 153.2 | 254.9 | 385.5 |
Total revenues | 133 | 1,494.1 | 1,567.4 | 1,695.7 |
Cost of sales - products | 67.1 | 942.2 | 918.1 | 921.7 |
Cost of sales - services | 28.5 | 183.9 | 284.3 | 273.2 |
Total cost of sales | 95.6 | 1,126.1 | 1,202.4 | 1,194.9 |
Selling, general and administrative | 19.7 | 238.6 | 261.6 | 254 |
Goodwill impairment charge | 0 | 0 | 310.4 | 0 |
Long-lived asset impairment charge | 329.8 | |||
Operating earnings (loss) | 17.7 | 129.4 | (536.8) | 246.8 |
Interest expense | 6.3 | 75.9 | 77.3 | 3 |
Earnings (loss) before income taxes | 11.4 | 53.5 | (614.1) | 243.8 |
Income tax expense (benefit) | 4.3 | 5.3 | (228.3) | 155.7 |
Net earnings (loss) | 7.1 | 48.2 | (385.8) | 88.1 |
Other comprehensive (loss): | ||||
Foreign currency translation adjustment | (27) | (9.3) | (18.7) | (76.7) |
Comprehensive income (loss) | $ (19.9) | $ 38.9 | $ (404.5) | $ 11.4 |
Basic net earnings (loss) per share | $ 0.14 | $ 0.93 | $ (7.39) | $ 1.69 |
Diluted net earnings (loss) per share | $ 0.14 | $ 0.92 | $ (7.39) | $ 1.68 |
Weighted average common shares - basic | 52.2 | 51.8 | 52.2 | 52.2 |
Weighted average common shares - diluted | 52.3 | 52.2 | 52.2 | 52.3 |
Consolidated and Combined Stat5
Consolidated and Combined Statements Of Stockholders' Equity - USD ($) shares in Millions, $ in Millions | Common Stock | Additional Paid-in Capital | Treasury Stock | Former Parent Company Investment | Retained Earnings (Deficit) | Accumulated Other Comprehensive Income (Loss) | Total |
Balance at Dec. 31, 2013 | $ 2,750.5 | $ 48.2 | $ 2,798.7 | ||||
Net transfers from Former Parent | (189.8) | (189.8) | |||||
Net earnings before spin-off | 83.9 | 83.9 | |||||
Net earnings after spin-off | $ 4.2 | 4.2 | |||||
Consummation of spin-off transaction on December 16, 2014 | $ 0.5 | $ 2,644.1 | $ (2,644.6) | ||||
Consummation of spin-off transaction on December 16, 2014 (in shares) | 52.5 | ||||||
Net earnings (loss) | 88.1 | ||||||
Net foreign currency translation adjustments | (76.7) | (76.7) | |||||
Balance at Dec. 31, 2014 | $ 0.5 | 2,644.1 | 4.2 | (28.5) | 2,620.3 | ||
Balance (shares) at Dec. 31, 2014 | 52.5 | ||||||
Stock option expense | 0.2 | 0.2 | |||||
Restricted stock grants, net of forfeitures and restricted stock unit vesting | 0.5 | 0.5 | |||||
Restricted stock grants, net of forfeitures and restricted stock unit vesting (in shares) | 0.3 | ||||||
Net earnings (loss) | 7.1 | 7.1 | |||||
Net foreign currency translation adjustments | (27) | (27) | |||||
Balance at Jan. 31, 2015 | $ 0.5 | 2,644.8 | 11.3 | (55.5) | 2,601.1 | ||
Balance (shares) at Jan. 31, 2015 | 52.8 | ||||||
Sale of stock under employee stock purchase plan | 1.8 | 1.8 | |||||
Purchase of treasury stock | $ (12.5) | (12.5) | |||||
Restricted stock grants, net of forfeitures and restricted stock unit vesting | 14.8 | 0.8 | 15.6 | ||||
Restricted stock grants, net of forfeitures and restricted stock unit vesting (in shares) | 0.5 | ||||||
Net earnings (loss) | (385.8) | (385.8) | |||||
Return to provision true-up related to pre spin-off and other | 1 | 1 | |||||
Net foreign currency translation adjustments | (18.7) | (18.7) | |||||
Balance at Jan. 31, 2016 | $ 0.5 | 2,662.4 | (12.5) | (373.7) | (74.2) | 2,202.5 | |
Balance (shares) at Jan. 31, 2016 | 53.3 | ||||||
Net earnings (loss) | 2.5 | ||||||
Balance at Apr. 30, 2016 | 2,230.4 | ||||||
Balance at Jan. 31, 2016 | $ 0.5 | 2,662.4 | (12.5) | (373.7) | (74.2) | 2,202.5 | |
Balance (shares) at Jan. 31, 2016 | 53.3 | ||||||
Sale of stock under employee stock purchase plan | 2 | 2 | |||||
Purchase of treasury stock | (41.9) | (41.9) | |||||
Restricted stock grants, net of forfeitures and restricted stock unit vesting | 22.1 | (2.5) | 19.6 | ||||
Restricted stock grants, net of forfeitures and restricted stock unit vesting (in shares) | 0.2 | ||||||
Net earnings (loss) | 48.2 | 48.2 | |||||
Net foreign currency translation adjustments | (9.3) | (9.3) | |||||
Balance at Jan. 31, 2017 | $ 0.5 | $ 2,686.5 | $ (54.4) | $ (328) | $ (83.5) | 2,221.1 | |
Balance (shares) at Jan. 31, 2017 | 53.5 | ||||||
Balance at Apr. 30, 2016 | 2,230.4 | ||||||
Net earnings (loss) | 8 | ||||||
Balance at Jul. 31, 2016 | $ 2,223 |
Consolidated and Combined Stat6
Consolidated and Combined Statements of Cash Flows - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | ||
Jan. 31, 2015 | Jan. 31, 2017 | Jan. 31, 2016 | Dec. 31, 2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||
Net earnings (loss) | $ 7.1 | $ 48.2 | $ (385.8) | $ 88.1 |
Adjustments to reconcile net earnings (loss) to net cash flows provided by (used in) operating activities: | ||||
Depreciation and amortization | 7.3 | 66.9 | 75 | 68 |
Deferred income taxes | (0.4) | 6.2 | (229.3) | 42.8 |
Asset impairment charge | 640.2 | |||
Non-cash compensation | 0.7 | 20.2 | 15.8 | 3.7 |
Amortization of deferred financing fees | 0.3 | 4.3 | 4 | |
Tax impact from prior sales of restricted stock | 0.2 | (0.6) | ||
Provision for inventory write-downs | 20.7 | |||
Provision for doubtful accounts | (0.1) | 3.2 | 3.3 | 12.4 |
Loss on disposal of property, equipment and other | 3.3 | 2.9 | 6.6 | |
Changes in operating assets and liabilities, net of effects from acquisitions: | ||||
Accounts receivable | 1.9 | 6.9 | 40.3 | (83.6) |
Inventories | (34.6) | (5) | 25.7 | (67.2) |
Other current and non-current assets | (2.9) | (4.6) | 2.7 | (21.9) |
Accounts payable | (7.2) | 11 | 3.4 | 36.7 |
Other current and non-current liabilities | 12.8 | (30.4) | 18.8 | 22.5 |
Net cash flows provided by (used in) operating activities | (15.1) | 150.9 | 217.2 | 107.5 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||
Capital expenditures | (6.2) | (35.5) | (130.5) | (136.8) |
Acquisitions, net of cash acquired | (220.8) | (4.3) | (513.8) | |
Net cash flows used in investing activities | (6.2) | (256.3) | (134.8) | (650.6) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||
Purchase of treasury stock | (44.9) | (9.5) | ||
Cash proceeds from stock issuance | 1.5 | 1.5 | ||
Proceeds from long-term debt | 1,200 | |||
Debt origination costs | (27.9) | |||
Tax impact from prior sales of restricted stock | (0.2) | |||
Tax impact from prior sales of restricted stock | 0.6 | |||
Net transfers to B/E Aerospace, Inc. | (233.3) | |||
Deferred acquisition payments | (90.9) | |||
Net cash flows (used in) provided by financing activities | (43.4) | (99.1) | 939.4 | |
Effect of foreign exchange rate changes on cash and cash equivalents | (2.3) | (1.7) | (2.7) | (4.1) |
Net (decrease) increase in cash and cash equivalents | (23.6) | (150.5) | (19.4) | 392.2 |
Cash and cash equivalents, beginning of period | 470.8 | 427.8 | 447.2 | 78.6 |
Cash and cash equivalents, end of period | 447.2 | 277.3 | 427.8 | 470.8 |
Cash paid during period for: | ||||
Income taxes paid, net of refunds | $ 0.6 | 6.1 | 13.2 | 21.1 |
Interest | $ 72.1 | 71 | ||
Supplemental schedule of non-cash activities: | ||||
Treasury stock. | $ 3 | |||
Contingent consideration | $ 92.2 |
Description of Business and Sum
Description of Business and Summary of Significant Accounting Policies | 12 Months Ended |
Jan. 31, 2017 | |
Description of Business and Summary of Significant Accounting Policies | |
Description of Business and Summary of Significant Accounting Policies | 1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description of Business On December 17, 2014, B/E Aerospace, Inc. (“B/E Aerospace” or “Former Parent”) 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”). To effect the Spin‑Off, B/E Aerospace distributed 52.5 million shares of KLX Inc. (“KLX” or the “Company”) common stock to B/E Aerospace’s stockholders on December 17, 2014. Holders of B/E Aerospace’s common stock received one share of KLX common stock for every two shares of B/E Aerospace’s common stock held on December 5, 2014. B/E Aerospace structured the distribution to be tax free to its U.S. stockholders for U.S. federal income tax purposes. As a result of the Spin‑Off, KLX now operates as an independent, publicly traded company. We believe, based on our experience in the industry, that we are the world’s leading distributor and value‑added service provider of aerospace fasteners and other consumables, offering one of the broadest ranges of aerospace hardware and consumables and inventory management services, selling to essentially every major airline in the world as well as leading maintenance, repair and overhaul (“MRO”) providers, the leading airframe manufacturers and their first and second tier suppliers. The Company also provides technical services and associated rental equipment to land‑based oil and gas exploration and drilling companies often in remote locations. Basis of Presentation 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 is reporting a January 2015 fiscal month transition period. The Company’s 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 financial statements and accounting records as if it was operated on a stand‑alone basis and were prepared in accordance with accounting principles generally accepted in the United States (GAAP). All intercompany transactions and account balances within the Company have been eliminated. The consolidated and combined statements of earnings and comprehensive income for the periods prior to the spin-off reflect allocations of general corporate expenses from B/E Aerospace, including, but not limited to, executive management, finance, legal, information technology, human resources, employee benefits administration, treasury, risk management, procurement and other shared services. The allocations were made on a direct usage basis when identifiable, with the remainder allocated on the basis of revenues generated, costs incurred, headcount or other measures. Management of the Company considers these allocations to be a reasonable reflection of the utilization of services by, or the benefits provided, to the Company. The allocations may not, however, reflect the expense the Company would have incurred as a stand‑alone company for the periods presented. Actual costs that may have been incurred if the Company had been a stand‑alone company would depend on a number of factors, including the chosen organizational structure, what functions were outsourced or performed by employees and strategic decisions made in areas such as information technology and infrastructure. Use of Estimates —The preparation of the consolidated and combined 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. Revenue Recognition —Sales of products and services are recorded when the earnings process is complete. This generally occurs when the products are shipped to the customer in accordance with the contract or purchase order, risk of loss and title has passed to the customer, collectability is reasonably assured and pricing is fixed and determinable. In instances where title does not pass to the customer upon shipment, the Company recognizes revenue upon delivery or customer acceptance, depending on the terms of the sales contract. Management provides allowances for credits and returns, based on historic experience, and adjusts such allowances as considered necessary. In connection with the sales of its products, the Company also provides certain supply chain management services to certain of its customers. These services include the timely replenishment of products at the customer site, while also minimizing the customer’s on‑hand inventory. These services are provided by the Company contemporaneously with the delivery of the product, and as such, once the product is delivered, the Company does not have a post‑delivery obligation to provide services to the customer. The price of such services is generally included in the price of the products delivered to the customer, and revenue is recognized upon delivery of the product, at which point, the Company has satisfied its obligations to the customer. The Company does not account for these services as a separate element, as the services do not have stand‑alone value and cannot be separated from the product element of the arrangement. Service revenues from oilfield technical services and related rental equipment are recorded when services are performed and/or equipment is rented pursuant to a completed purchase order or master services agreement (“MSA”) that sets forth firm pricing and payment terms. Income Taxes —The Company provides deferred income taxes for temporary differences between the amounts of assets and liabilities recognized for financial reporting purposes and such amounts recognized for income tax purposes. Deferred income taxes are computed using enacted tax rates that are expected to be in effect when the temporary differences reverse. A valuation allowance related to a deferred tax asset is recorded when it is more likely than not that some portion or the entire deferred tax asset will not be realized. The Company records uncertain tax positions within income tax expense and classifies interest and penalties related to income taxes as income tax expense. Cash Equivalents —The Company considers all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents. Accounts Receivable, Net —The Company performs ongoing credit evaluations of its customers and adjusts credit limits based upon payment history and the customer’s current creditworthiness, as determined by review of their current credit information. The Company continuously monitors collections and payments from its customers and maintains a provision for estimated credit losses based upon historical experience and any specific customer collection issues that have been identified. The allowance for doubtful accounts at January 31, 2017 and 2016 was $13.5 and $11.3, respectively. Inventories —Inventories, made up of finished goods, primarily consist 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. During Fiscal 2016, the Company revised its methodology for estimating the provision required for excess and obsolete (“E&O”) inventories. The new methodology more adequately considers historical demand of our inventory to project future demand in order to estimate the provision required for E&O inventories. Other factors considered in the methodology include expected market growth rates and related elements. The implementation of the new methodology did not impact the current period or any prior period reserve for E&O inventory. Demand for the Company’s products can fluctuate from period to period depending on customer activity. In accordance with industry practice, costs in inventory include amounts relating to long-term contracts with long production cycles and to inventory items with long production cycles, some of which are not expected to be realized within one year. As a result, the Company’s operating cycle is greater than a year and is closely tied to the lifecycle of an airframe. Reserves for excess and obsolete inventory were approximately $59.6 and $40.4 as of January 31, 2017 and 2016, respectively. Substantially all of the Company’s inventory is comprised of aerospace grade fasteners which support 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 reserve for inventory with limited shelf life is not material to the Company’s financial statements. Property and Equipment, Net —Property and equipment are stated at cost and depreciated generally under the straight‑line method over their estimated useful lives of one to fifty years (or the lesser of the term of the lease for leasehold improvements, as appropriate). Goodwill and Intangible Assets, Net —Under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 350, Intangibles — Goodwill and Other (“ASC 350”), goodwill and indefinite‑lived intangible assets are reviewed at least annually for impairment. Acquired intangible assets with definite lives are amortized over their individual useful lives. Other intangible assets are amortized using the straight‑line method over periods ranging from five to thirty years. As of January 31, 2017, the Company had two reporting units, which were determined based on the guidelines contained in FASB ASC Topic 350, Subtopic 20, Section 35. Each reporting unit constitutes a business, for which there is discrete financial information available that is regularly reviewed by the management of the Company. Goodwill is tested at least annually as of December 31 st , and management assesses whether there has been any impairment in the value of goodwill by first comparing the fair value to the net carrying value of the reporting units. If the carrying value exceeds its estimated fair value, a second step is performed to compute the amount of the impairment. An impairment loss is recognized if the implied fair value of the asset being tested is less than its carrying value. In this event, the asset is written down accordingly. The fair values of the reporting units for goodwill impairment testing is determined using valuation techniques based on estimates, judgments and assumptions management believes are appropriate in the circumstances. For the years ended January 31, 2017 and December 31, 2014 and the one month ended January 31, 2015, the Company’s annual impairment testing yielded no impairments of goodwill or the indefinite‑lived intangible asset. For the year ended January 31, 2016, the Company determined goodwill related to the ESG reporting unit was fully impaired and recorded a pre-tax impairment charge related to ESG’s goodwill of $310.4. The indefinite‑lived intangible asset is tested at least annually for impairment. Impairment for the intangible asset with an indefinite life exists if the carrying value of the intangible asset exceeds its fair value. The fair value of the indefinite‑lived intangible asset is determined using valuation techniques based on estimates, judgments and assumptions management believes are appropriate in the circumstances. Long‑Lived Assets —The Company assesses potential impairments to its long‑lived assets when there is evidence that events or changes in circumstances indicate that the carrying amount of an asset may not be recovered. An impairment loss is recognized when the undiscounted cash flows expected to be generated by an asset (or group of assets) is less than its carrying amount. Any required impairment loss is measured as the amount by which the asset’s carrying value exceeds its fair value and is recorded as a reduction in the carrying value of the related asset and a charge to operating results. For the years ended January 31, 2017 and December 31, 2014 and the one month ended January 31, 2015, there were no impairments of long lived assets. For the year ended January 31, 2016, the Company used a combination of a cost and market approaches for determining the fair value of the ESG asset group’s long lived assets and recognized impairment charges related to identified intangibles and property and equipment of $177.8 and $152.0, respectively. Common Stock Equivalents —The Company has potential common stock equivalents related to its outstanding restricted stock awards, restricted stock units and employee stock purchase plan. These potential common stock equivalents are not included in diluted loss per share for any period presented in which there is a net loss because the effect would have been anti‑dilutive. Accounting for Stock‑Based Compensation —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 year ended December 31, 2014 related to grants of restricted stock and restricted stock units granted by our Former Parent. No compensation cost related to stock options was recognized during that period as no options were granted during the year ended December 31, 2014, and all outstanding options were vested. All unvested shares of restricted stock were converted into unvested shares of KLX on the distribution date at a ratio equal to 1.8139. Compensation cost recognized during the years ended January 31, 2017 (“Fiscal 2016”) and 2016 (“Fiscal 2015”) and the one month ended January 31, 2015 related to unvested shares converted on the distribution date and new shares of KLX restricted stock and stock options granted during Fiscal 2016 and Fiscal 2015. The Company has established a qualified Employee Stock Purchase Plan. The Employee Stock Purchase 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. The value of the rights under this Plan (and that of our Former Parent’s) granted during the years ended January 31, 2017 and 2016 and December 31, 2014 was $0.3, $0.3 and $0.2, respectively, and was not material during the one month ended January 31, 2015. Foreign Currency Translation —The assets and liabilities of subsidiaries located outside the United States are translated into U.S. dollars at the rates of exchange in effect at the balance sheet dates. Revenue and expense items are translated at the average exchange rates prevailing during the period. Gains and losses resulting from foreign currency transactions are recognized currently in income, and those resulting from translation of financial statements are accumulated as a separate component of Former Parent company equity and accumulated other comprehensive income (loss). The Company’s European subsidiaries primarily utilize the British pound or the Euro as their local functional currency. Treasury Stock - The Company may periodically repurchase shares of its common stock from employees for the satisfaction of their individual payroll tax withholding upon vesting of restricted stock and restricted stock units in connection with the Company’s Long-Term Incentive Plan (“LTIP”). The Company’s repurchases of common stock are recorded at the average cost of the common stock. As part of the LTIP, the Company repurchased 35,009 shares of its common stock for $1.5 during the year ended January 31, 2017. On January 7, 2016, the Board of Directors authorized a $100.0 share repurchase under the existing $250.0 share repurchase program. During Fiscal 2016, the Company repurchased 982,062 shares of common stock at an average price of $41.20 per share for a total of $40.5 as part of the share repurchase program. Concentration of Risk —In ASG, the Company’s products and services are primarily concentrated within the aerospace industry with customers consisting primarily of commercial airlines, a wide variety of business jet customers and commercial aircraft manufacturers. In ESG, the Company provides products and services to energy industry customers who focus on developing and producing oil and gas onshore in North America. The Company’s management performs ongoing credit evaluations on the financial condition of all of its customers and maintains allowances for uncollectible accounts receivable based on expected collectability. Credit losses have historically been within management’s expectations and the provisions established. Significant customers change from year to year, in the case of ASG, depending on the level of refurbishment activity and/or the level of new aircraft purchases by such customers, and in the case of ESG, depending on the level of exploration and production activity and the use of our services. During the years ended January 31, 2017 and 2016 and December 31, 2014, no single customer accounted for more than 10% of the Company’s consolidated revenues. Correction of Interim Data — During the year ended January 31, 2017, the Company restated its April 30, 2016 and July 31, 2016 interim financial statements to reflect the correction of errors that were identified. The Company has concluded the corrected errors are immaterial individually and in the aggregate. These items have been corrected and are discussed in more detail in Note 15. Selected Quarterly Data. Recent Accounting Pronouncements In January 2017, the FASB issued Accounting Standards Update (“ASU”) 2017-04, Intangibles – Goodwill and Other. ASU 2017-04 simplifies the subsequent measurement of goodwill by removing the second step of the two-step impairment test. The amendment requires an entity to perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit's fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The amendment should be applied on a prospective basis. ASU 2017-04 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The adoption of ASU 2017-04 is not expected to have a material impact on the Company’s consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, Business Combinations. This update clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. This ASU is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The adoption of ASU 2017-01 is not expected to have a material impact on the Company’s consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting , which amends ASC Topic 718, Compensation – Stock Compensation . The ASU includes multiple provisions intended to simplify various aspects of the accounting for share-based payments. The ASU is effective for annual periods beginning after December 15, 2016, and interim periods within those years. Earlier adoption is permitted. The Company is currently evaluating the effect this update will have on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (“ASU 2016-02”), which supersedes ASC Topic 840, Leases , and creates a new topic, ASC Topic 842, Leases . This update is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Earlier adoption is permitted. ASU 2016-02 requires lessees to recognize a lease liability and a lease asset for all leases, including operating leases, with a term greater than 12 months on its balance sheet. The update also expands the required quantitative and qualitative disclosures surrounding leases. ASU 2016-02 will be applied using a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The Company is currently evaluating the effect of this update on its consolidated financial statements. 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. In April 2016, FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing , and in May 2016, ASU 2016-12, Revenues from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients both of which provide supplemental adoption guidance and clarification to ASU 2014-09. ASU 2016-10 and ASU 2016-12 must be adopted concurrently with the adoption of ASU 2014-09. The Company has not determined the impact this guidance will have on the financial statements. However, the identification of implementation project team members and the inventorying of contracts with customers, particularly large customer contracts, has begun. Other than increased disclosures, the impact of the revised accounting guidance to the results of operations and cash flows of the Company cannot be determined until the assessment process is complete. |
Business Combinations
Business Combinations | 12 Months Ended |
Jan. 31, 2017 | |
Business Combinations | |
Business Combinations | 2. BUSINESS COMBINATIONS On May 17, 2016, the Company acquired Herndon Aerospace & Defense LLC (“Herndon”), an aftermarket aerospace supply chain management and consumables hardware distributor servicing principally aftermarket military depots as well as the commercial aerospace aftermarket for an aggregate purchase price of $220.8 (net of cash acquired). The Company adjusted the allocation of the Herndon purchase price to increase goodwill, deferred taxes and liabilities by $6.1, $2.6 and $9.0, respectively, related to the Company’s preliminary purchase price allocation. The impact of the purchase price adjustment to the Company’s consolidated statement of earnings from the date of acquisition was not material. Based on the Company’s preliminary purchase price allocation, the excess of the purchase price over the fair value of the identifiable assets acquired approximated $119.7, of which $68.9 was allocated to identifiable intangible assets consisting of customer contracts and relationships and covenants not to compete, and $50.8 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 Herndon acquisition was accounted for as a purchase under FASB ASC 805, Business Combinations (“ASC 805”). The assets purchased and liabilities assumed have been reflected in the accompanying consolidated balance sheet as of January 31, 2017. The results of operations for the Herndon acquisition are included in the accompanying consolidated and combined statements of earnings from the date of acquisition. The valuation of certain assets, principally inventories and tax-related items, related to the acquisition is not yet complete, and as such, the Company has not yet finalized its allocation of the purchase price for the acquisition. The following table summarizes the current estimates of fair values of assets acquired and liabilities assumed in the Herndon acquisition in accordance with ASC 805, which are currently recorded based on management’s estimates as follows: Accounts receivable-trade $ 12.3 Inventories 103.7 Other current and non-current assets 3.7 Property and equipment 2.1 Goodwill 50.8 Identified intangibles 68.9 Accounts payable (9.7) Other current and non-current liabilities (11.0) Total consideration paid $ 220.8 Goodwill and intangible assets of $114.3 are expected to be deductible for tax purposes. The Company has begun integrating Herndon into its ASG segment systems. As a result, it is not practicable to report stand-alone revenues and operating earnings of the acquired business since the acquisition date. On a pro forma basis to give effect to the Herndon acquisition, as if it occurred on February 1, 2015, revenues and net earnings for the years ended January 31, 2017 and 2016 would have been as follows: UNAUDITED YEAR ENDED January 31, 2017 January 31, 2016 Pro forma Pro forma Revenues $ 1,544.3 $ 1,699.8 Net earnings 51.7 (376.7) Earnings (loss) per diluted share 0.99 (7.21) |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Jan. 31, 2017 | |
Property and Equipment, Net | |
Property and Equipment, Net | 3. PROPERTY AND EQUIPMENT, NET Property and equipment consist of the following: Useful January 31, January 31, Life (Years) 2017 2016 Land, buildings and improvements 1 - 50 $ 40.9 $ 35.5 Machinery 2 - 20 119.8 89.5 Computer equipment and software 3 - 15 105.5 96.1 Furniture and equipment 3 - 14 131.5 148.7 397.7 369.8 Less accumulated depreciation 149.4 109.3 $ 248.3 $ 260.5 Depreciation expense was $47.3, $51.3, $37.4 and $4.5 for the years ended January 31, 2017 and 2016, December 31, 2014 and the one month ended January 31, 2015, respectively. |
Goodwill and Long-Lived Assets,
Goodwill and Long-Lived Assets, Net | 12 Months Ended |
Jan. 31, 2017 | |
Goodwill and Long-Lived Assets, Net | |
Goodwill and Long-Lived Assets, Net | 4. GOODWILL AND LONG-LIVED ASSETS, NET The following sets forth the intangible assets by major asset class, all of which were acquired through business purchase transactions: January 31, 2017 January 31, 2016 Useful Life Original Accumulated Net Book Original Accumulated Impairment Net Book (Years) Cost Amortization Value Cost Amortization Charge Value Customer contracts and relationships 8 - 30 $ 422.0 $ 129.1 $ 292.9 $ 536.9 $ 124.2 $ 167.1 $ 245.6 Covenants not to compete 5 0.1 Developed technologies 15 3.3 0.2 3.1 — — — — Trade names Indefinite 16.9 — 16.9 17.0 — — 17.0 $ 447.7 $ 132.9 $ 314.8 $ 572.1 $ 131.6 $ 177.8 $ 262.7 Amortization expense of intangible assets was $19.6, $23.7, $30.5 and $2.8 for the years ended January 31, 2017 and 2016, December 31, 2014 and the one month ended January 31, 2015, respectively. Amortization expense is expected to be approximately $19.0 in each of the next five years. In accordance with ASC 350, goodwill is not amortized but is subject to an annual impairment test. For the years ended January 31, 2017 and December 31, 2014 and the one month ended January 31, 2015, the Company’s annual impairment testing yielded no impairments of goodwill or the indefinite lived intangible asset. During the year ended January 31, 2016, the continued downturn in the oil and gas industry, including the nearly 75% decrease in the number of onshore drilling rigs and the resulting significant cutbacks in the capital expenditures of our customers, represented a significant adverse change in the business climate, which indicated that the ESG reporting unit’s goodwill was impaired and ESG asset group’s long-lived assets may not be recoverable. As a result, during the third quarter ended October 31, 2015, the Company performed an interim goodwill impairment test and a long-lived asset recoverability test. The results of the goodwill impairment testing indicated that goodwill was impaired which resulted in a $310.4 pre-tax goodwill impairment charge for the year ended January 31, 2016. Long-lived assets, such as property and equipment and purchased intangibles subject to amortization, are tested for impairment when there is evidence that events or changes in circumstances indicate that the carrying amount of an asset may not be recovered. An impairment loss is recognized when the undiscounted cash flows expected to be generated by an asset (or group of assets) is less than its carrying amount. Any required impairment loss is measured as the amount by which the asset’s carrying value exceeds its fair value and is recorded as a reduction in the carrying value of the related asset and a charge to operating results. For the years ended January 31, 2017 and December 31, 2014 and the one month ended January 31, 2015, there were no impairments of long lived assets. For the year ended January 31, 2016, the Company performed a long-lived asset impairment analysis and concluded the carrying amount of the long-lived assets exceeded the undiscounted cash flows of the ESG asset group. As a result, we recorded a $329.8 long-lived asset impairment charge, $177.8 related to identified intangible assets and $152.0 related to property and equipment for the year ended January 31, 2016. The goodwill and long-lived asset impairment charges reflected the full value of the goodwill and identified intangible assets attributable to the ESG segment. The accumulated goodwill impairment losses (incurred in 2008 and 2015) totaled $601.1 as of January 31, 2016. The changes in the carrying amount of goodwill for the years ended January 31, 2017 and 2016 and the one month ended January 31, 2015 are as follows: Balance, December 31, 2014 $ 1,328.7 Purchase Price Adjustments (21.7) Effect of foreign currency translation (20.5) Balance, January 31, 2015 1,286.5 Acquisitions 2.5 Purchase Price Adjustments (10.3) Effect of foreign currency translation (13.4) Impairment (310.4) Balance, January 31, 2016 954.9 Acquisitions 50.8 Purchase Price Adjustments (2.5) Effect of foreign currency translation (6.8) Balance, January 31, 2017 $ 996.4 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Jan. 31, 2017 | |
Related Party Transactions | |
Related Party Transactions | 5. RELATED PARTY TRANSACTIONS The consolidated and combined statements of earnings and comprehensive income for the year ended December 31, 2014 includes an allocation of general corporate expenses from B/E Aerospace. These costs were allocated to the Company on a systematic and reasonable basis utilizing a direct usage 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 $31.7 for fiscal year 2014. 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 some of the functions that were previously provided to us through corporate allocations from B/E Aerospace in‑house. In addition, we 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 distribution with an option to extend for up to one year. 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 will enable KLX Inc. 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 Inc.’s operations. Expenses incurred under those agreements totaled $8.7 and $9.6 for the years ended January 31, 2017 and 2016. The amount was not material for the year ended December 31, 2014 and the one month ended January 31, 2015. Sales to B/E Aerospace for the years ended January 31, 2017 and 2016, December 31, 2014 and the one month ended January 31, 2015 were $24.1, $19.0, $16.2 and $1.5, respectively. |
Accrued Liabilities
Accrued Liabilities | 12 Months Ended |
Jan. 31, 2017 | |
Accrued Liabilities | |
Accrued Liabilities | 6. ACCRUED LIABILITIES Accrued liabilities consist of the following: January 31, 2017 January 31, 2016 Accrued salaries, vacation and related benefits $ 31.6 $ 28.7 Accrued commissions 8.7 6.2 Income taxes payable 10.3 11.4 Accrued interest 11.7 11.7 Other accrued liabilities 28.8 57.3 $ 91.1 $ 115.3 |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Jan. 31, 2017 | |
Long-Term Debt | |
Long-Term Debt | 7. LONG‑TERM DEBT Long-term debt consists of the following: January 31, 2017 January 31, 2016 Senior unsecured notes $ 1,200.0 $ 1,200.0 Less unamortized original issue discount and debt issue costs 18.0 20.5 $ 1,182.0 $ 1,179.5 In December 2014, in connection with the Spin‑off, the Company issued $1,200.0 aggregate principal amount of 5.875% senior unsecured notes due 2022 (the “5.875% Notes”), in an offering pursuant to the Securities Act of 1933, as amended. The net proceeds from the issuance of the 5.875% Notes were approximately $1,172.1, of which $750.0 was distributed to Former Parent, leaving KLX with net proceeds of approximately $422.1. The 5.875% Notes are senior unsecured debt obligations of the Company. We also entered into a $750.0 secured revolving credit facility dated as of December 16, 2014 and amended May 19, 2015 (the “Revolving Credit Facility”). As of January 31, 2017 and 2016, long‑term debt consisted of $1,200.0 of our 5.875% Notes. Letters of credit outstanding under the Revolving Credit Facility aggregated $5.5 at January 31, 2017. The Revolving Credit Facility is tied to a borrowing base formula, has no financial covenants and has $744.5 of availability as of January 31, 2017. The Revolving Credit Facility bears interest at an annual rate equal to the London interbank offered rate (“LIBOR”) plus the applicable margin (as defined), and expires in May 2020. No amounts were outstanding under the Revolving Credit Facility as of January 31, 2017. Maturities of long‑term debt are as follows: Year Ending January 31, 2018 $ — 2019 — 2020 — 2021 — 2022 — Thereafter 1,200.0 Total $ 1,200.0 Interest expense amounted to $75.9, $77.7, $3.3 and $6.3 for the years ended January 31, 2017 and 2016, December 31, 2014 and the one month ended January 31, 2015, respectively. |
Commitments, Contingencies and
Commitments, Contingencies and Off-Balance Sheet Arrangements | 12 Months Ended |
Jan. 31, 2017 | |
Commitments, Contingencies and Off-Balance Sheet Arrangements | |
Commitments, Contingencies and Off-Balance Sheet Arrangements | 8. 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 consolidated and combined balance sheets. At January 31, 2017, future minimum lease payments under these arrangements approximated $89.2, of which $85.2 is related to long‑term real estate leases. Rent expense for the years ended January 31, 2017 and 2016 and December 31, 2014 was $28.9, $37.7 and $26.4, respectively. Future payments under operating leases with terms greater than one year as of January 31, 2017 are as follows: Year Ending January 31, 2018 $ 10.5 2019 18.7 2020 15.0 2021 13.3 2022 11.2 Thereafter 20.5 Total $ 89.2 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 consolidated and combined financial statements. On January 6, 2016, a putative class action complaint was filed against us and certain of our executive officers and directors in the United States District Court for the Southern District of Florida (the “Court”). The complaint alleged violations of Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder, as well as, in the case of the individual defendants, the control person provisions of the Exchange Act. The complaint principally alleged that the defendants knowingly made incorrect statements regarding the value of the identifiable intangible assets and goodwill associated with ESG prior to the impairment of such assets during the third quarter of 2015. On February 7, 2017, the Court dismissed the case with prejudice. 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 consolidated and combined financial statements. Accordingly, no significant amounts have been accrued for indemnities, commitments and guarantees. The Company has employment and compensation agreements with key officers of the Company. An agreement with one of the officers provides for the officer to earn a minimum of $1.0 per year, subject to increases as determined from time to time by the Company's Board of Directors or the Compensation Committee of the Board of Directors, for a three-year period from the effective date (as defined in such agreement), with automatic extension by one year on each anniversary of the effective date of the agreement unless either party provides notice of non-renewal, as well as quarterly contributions to a tax-deferred compensation plan which in the aggregate, on an annual basis, would amount to a contribution equal to 100% of such officer's base salary in effect at the time, to be reduced to 30% effective for fiscal quarters commencing on or after February 1, 2017. One other agreement provides for an officer to receive annual minimum compensation of $0.7 per year, which may be increased in the discretion of the Company’s Board of Directors or the Compensation Committee of the Board of Directors, for a three-year period from the effective date (as defined in such agreement) with automatic extension by one year on each anniversary of the effective date of the agreement unless either party provides notice of non-renewal, and to receive quarterly contributions to a tax-deferred compensation plan which in the aggregate, on an annual basis, would amount to a contribution equal to 100% of such officer’s base salary in effect at the time. In addition, the Company has employment agreements with certain other key members of management expiring on various dates. 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. |
Income Taxes
Income Taxes | 12 Months Ended |
Jan. 31, 2017 | |
Income Taxes | |
Income Taxes | 9. INCOME TAXES Income taxes as presented are calculated on a separate tax return basis. The Company determined the provision for income taxes using the asset and liability approach. Under this approach, deferred income taxes represent the expected future tax consequences of temporary differences between the carrying amounts and tax basis of assets and liabilities. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. In assessing the need for a valuation allowance, the Company looked to the future reversal of existing taxable temporary differences, taxable income in carryback years and the feasibility of tax planning strategies and estimated future taxable income. The need for a valuation allowance can be affected by changes to tax laws, changes to statutory tax rates and changes to future taxable income estimates. The Company recognizes tax benefits from uncertain tax positions 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. The tax benefits recognized in the consolidated and combined financial statements from such positions are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. As of January 31, 2017, the Company has recorded a tax indemnity payable to B/E Aerospace totaling $4.7, of which $0.1 is classified in other current liabilities and $4.6 is classified in other long‑term liabilities. Components of earnings (loss) before incomes taxes were: Year Ended Month Ended January 31, 2017 January 31, 2016 December 31, 2014 January 31, 2015 Earnings (loss) before income taxes United States $ 41.3 $ (624.4) $ 210.9 $ 11.3 Foreign 12.2 10.3 32.9 0.1 Earnings (loss) before income taxes $ 53.5 $ (614.1) $ 243.8 $ 11.4 Income tax expense (benefit) consists of the following: Year Ended Month Ended January 31, 2017 January 31, 2016 December 31, 2014 January 31, 2015 Current: Federal $ — $ 0.7 $ 75.4 $ 3.5 State 0.3 (1.5) 8.5 0.4 Foreign (1.3) 3.8 29.0 0.8 (1.0) 3.0 112.9 4.7 Deferred: Federal 14.4 (213.3) 42.8 — State 1.3 (17.4) 3.5 — Foreign (9.4) (0.6) (3.5) (0.4) 6.3 (231.3) 42.8 (0.4) Total income tax expense (benefit) $ 5.3 $ (228.3) $ 155.7 $ 4.3 The difference between income tax expense (benefit) and the amount computed by applying the statutory U.S. federal income tax rate (35%) to the pre‑tax earnings consists of the following: Year Ended Month Ended January 31, 2017 January 31, 2016 December 31, 2014 January 31, 2015 Statutory federal income tax expense (benefit) $ 18.7 $ (214.9) $ 85.3 $ 4.0 U.S. state income taxes 1.5 (17.5) 6.0 0.3 Foreign tax rate differential 0.1 (0.2) (3.7) 0.8 Change in unrecognized tax benefits (7.8) 0.4 — — Change in valuation allowance on foreign (1.6) 5.3 — — Other, net 1.3 2.0 0.8 (0.8) Non-taxable/non-deductible items (6.9) (3.4) Exit taxes — — 67.3 — $ 5.3 $ (228.3) $ 155.7 $ 4.3 The tax effects of temporary differences and carryforwards that give rise to deferred income tax assets and liabilities consist of the following: January 31, 2017 January 31, 2016 Deferred tax assets: Inventory reserves $ 24.8 $ 15.4 Accrued liabilities 12.9 15.7 Intangible Assets 44.2 84.2 Net operating loss carryforward 81.2 59.5 Inventory capitalization 14.9 10.7 Other 19.9 5.2 $ 197.9 $ 190.7 Deferred tax liabilities: Intangible assets (12.8) (16.1) Depreciation (25.3) (5.5) (38.1) (21.6) Net deferred tax asset before valuation allowance 159.8 169.1 Valuation allowance (17.8) (21.9) Net deferred tax asset $ 142.0 $ 147.2 A reconciliation of the beginning and ending amounts of gross uncertain tax positions is presented below: January 31, 2017 January 31, 2016 January 31, 2015 Unrecognized tax benefit at beginning of period $ 9.0 $ 9.4 $ 10.1 Additions for current year tax positions 4.6 — — Additions for prior year tax positions 1.3 — — Decreases for prior year tax positions (7.6) — — Currency fluctuations (0.1) (0.4) (0.7) Unrecognized tax benefit at end of period $ 7.2 $ 9.0 $ 9.4 Included in the balance of unrecognized tax benefits as of January 31, 2017, 2016 and 2015 are $4.4, $9.0 and $9.4, respectively, of tax benefits that, if recognized, would affect the effective tax rate. The Company does not anticipate that the total unrecognized tax benefits will significantly change due to the settlement of audits or the expiration of statutes of limitation within twelve months of this reporting date. 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 as of January 31, 2017, 2016 and 2015. The Company is subject to taxation in the United States, various states and foreign jurisdictions. The Company has significant operations in the United States, the United Kingdom, France and Germany. Tax years that remain subject to examinations by major tax jurisdictions vary by legal entity but are generally open for the U.S. for tax years ending in 2014 and after and outside the U.S. for the tax years ending after 2007. As of January 31, 2017, the Company has federal net operating loss carryforwards of $148.9 expiring beginning in 2035 and state net operating loss carryforwards of $97.9 expiring between 2020 and 2035 with the majority expiring in 2035. The Company has $88.1 of foreign net operating loss carryforwards as of January 31, 2017 for which a valuation allowance of $66.1 has been recognized. All of the Company’s foreign net operating losses have an indefinite carryforward period. The Company’s future tax provision will reflect any favorable or unfavorable adjustments to its estimated tax liabilities when resolved. The Company is unable to predict the outcome of these matters. However, the Company believes that none of these matters will have a material effect on the results of operations or financial condition of the Company. As a result of certain realization requirements of ASC 718, the table of deferred tax assets and liabilities does not include certain deferred tax assets as of January 31, 2017 that arose directly from (or the use of which was postponed by) tax deductions related to equity compensation that are greater than the compensation recognized for financial reporting. Equity will be increased by $0.5 if and when such deferred tax assets are ultimately realized. We use FASB ASC 740, Income Taxes ordering when determining when excess tax benefits have been realized. Undistributed earnings of certain of the Company’s foreign subsidiaries amounted to $68.8 at January 31, 2017. Those earnings are considered to be permanently reinvested and no provision for U.S. federal and state income taxes has been made. Distribution of these earnings in the form of dividends or otherwise could result in U.S. federal taxes (subject to an adjustment for foreign tax credits) and withholding taxes payable in various foreign countries. It is not currently practical to determine the amount of U.S. income and foreign withholding tax payable in the event all such foreign earnings are repatriated. The Company’s effective tax rate can fluctuate as operations and the local country tax rates fluctuate due to the number of tax jurisdictions in which the Company operates. The Company recorded deferred charges during the year ended January 31, 2017 related to the deferral of income tax expense on intra-entity profits that resulted from the sale of our intellectual property rights (including intellectual property acquired during the current year) in Germany to our U.S. parent, KLX Inc. The deferred charges are included in the “Other current assets” and “Other assets” lines in the accompanying consolidated balance sheet as of January 31, 2017 in the amounts of $0.3 and $7.6, respectively. The deferred charges are amortized as a component of income tax expense over the fifteen year economic life of the intellectual property. Under the tax sharing and indemnity agreement between the Company and B/E Aerospace, B/E Aerospace generally assumes liability for all federal and state income taxes for all tax periods ending on or prior to December 31, 2014. B/E Aerospace assumes the liability for all federal and state income taxes of KLX’s U.S. operations through the distribution date. KLX assumes all other federal taxes, foreign income tax/non‑income taxes and state/local non‑income taxes related to its business for all periods and B/E Aerospace assumes all other federal taxes, foreign income tax/non‑income taxes and state/local non‑income taxes related to their business for all periods. Additional taxes incurred related to the internal restructuring to separate the businesses to complete the spin‑off shall be shared equally between B/E Aerospace and KLX. Taxes incurred related to certain international tax initiatives for the KLX business shall be assumed by KLX subject to the calculation provisions of the tax sharing and indemnity agreement. In addition, B/E Aerospace transferred to KLX all the deferred tax assets and liabilities related to the KLX business as of December 16, 2014. |
Employee Retirement Plans
Employee Retirement Plans | 12 Months Ended |
Jan. 31, 2017 | |
Employee Retirement Plans | |
Employee Retirement Plans | 10. EMPLOYEE RETIREMENT PLANS The Company sponsors and contributes to a qualified, defined contribution savings and investment plan, covering substantially all U.S. employees. The KLX Inc. Retirement Plan was established pursuant to Section 401(k) of the Internal Revenue Code. Under the terms of this plan, covered employees may contribute up to 100% of their pay, limited to certain statutory maximum contributions. Participants are vested in matching contributions immediately and the matching percentage is 100% of the first 3% of employee contributions and 50% on the next 2% of employee contributions. For all periods other than the year ended January 31, 2017, KLX employees participated in a plan sponsored by our Former Parent. Total expense for the plan was $3.4, $3.6, $2.8 and $0.4 for the years ended January 31, 2017 and 2016, December 31, 2014 and the one month ended January 31, 2015, respectively. The Company also sponsors and contributes to a supplemental executive retirement plan (“SERP”), which was established pursuant to Section 409A of the Internal Revenue Code, for certain employees. The SERP is an unfunded plan maintained for the purpose of providing deferred compensation for certain employees. This plan allows certain employees to annually elect to defer a portion of their compensation, on a pre‑tax basis, until their retirement. The retirement benefit to be provided is based on the amount of compensation deferred. Compensation expense under this program was $2.5, $2.4 and $0.1 for the years ended January 31, 2017 and 2016 and December 31, 2014, respectively. Compensation expense was immaterial under this program for the one month ended January 31, 2015. The Company and its subsidiaries participate in government‑sponsored programs in certain foreign countries. The Company funds these plans based on legal requirements, tax considerations, local practices and investment opportunities. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Jan. 31, 2017 | |
Stockholders' Equity | |
Stockholders' Equity | 11. STOCKHOLDERS’ EQUITY Earnings Per Share —Basic net earnings per common share is computed using the weighted average of common shares outstanding during the year. Diluted net earnings per common share reflects the potential dilution from assumed conversion of all dilutive securities such as stock options and unvested restricted stock using the treasury stock method. When the effects of the outstanding stock options, restricted stock awards or restricted stock units are anti‑dilutive, they are not included in the calculation of diluted earnings per common share. For the years ended January 31, 2017 and 2016 no shares were excluded from the determination of diluted earnings per common share and for the year ended December 31, 2014 and the one month ended January 31, 2015, approximately 0.1 and 0.1 million shares, respectively, were excluded from the determination of diluted earnings per common share because the effect would have been anti‑dilutive. The following table sets forth the computation of basic and diluted net earnings per share for the years ended January 31, 2017 and 2016, December 31, 2014 and the one month ended January 31, 2015: Year Ended Month Ended January 31, 2017 January 31, 2016 December 31, 2014 January 31, 2015 Numerator: net earnings (loss) $ 48.2 $ (385.8) $ 88.1 $ 7.1 Denominator: Denominator for basic earnings per share—Weighted average shares (in millions) 51.8 52.2 52.2 52.2 Effect of dilutive securities—Dilutive securities (in millions) 0.4 — 0.1 0.1 Denominator for diluted earnings per share—Adjusted weighted average shares (in millions) 52.2 52.2 52.3 52.3 Basic net earnings (loss) per share (1) $ 0.93 $ (7.39) $ 1.69 $ 0.14 Diluted net earnings (loss) per share (1) $ 0.92 $ (7.39) $ 1.68 $ 0.14 (1) On December 16, 2014, the distribution date, B/E Aerospace stockholders of record as of the close of business on December 5, 2014 received one share of KLX common stock for every two shares of B/E Aerospace’s common stock held as of the record date. Basic and diluted earnings per common share and the average number of common shares outstanding were calculated using the number of KLX common shares outstanding immediately following the distribution. Long‑Term Incentive Plan —B/E Aerospace has a Long‑Term Incentive Plan (“LTIP”) under which the Former Parent’s Compensation Committee may grant stock options, stock appreciation rights, restricted stock, restricted stock units or other forms of equity based or equity related awards. KLX adopted an LTIP similar to the Former Parent’s upon the Spin‑off, and unvested shares in the Former Parent were transferred with the employees to KLX on the same terms and conditions on an exchange ratio of 1.8139 such that the impact was neutral to employees at the date of the Spin‑off. During 2014, B/E Aerospace granted restricted stock under the LTIP to certain members of the Company’s management. Restricted stock grants vest over four years and are granted at the discretion of the Compensation Committee of the B/E Aerospace’s Board of Directors. Certain awards also vest upon attainment of performance goals. Compensation cost is recorded on a straight‑line basis over the vesting term of the shares based on the grant date value using the closing trading price. Share based compensation of $15.6, $11.4, $3.5 and $0.5 was recorded during fiscal year 2016, 2015 and 2014 and the one month ended January 31, 2015, respectively. Unrecognized compensation cost related to these grants was $32.5 at January 31, 2017. The following table summarizes shares of restricted stock that were granted, vested, forfeited and outstanding: January 31, 2017 January 31, 2016 Weighted Weighted Weighted Average Weighted Average Average Remaining Average Remaining Shares Grant Date Vesting Period Shares Grant Date Vesting Period (in thousands) Fair Value (in years) (in thousands) Fair Value (in years) Outstanding, beginning of period 827.2 $ 35.96 3.12 559.2 $ 38.09 2.97 Shares granted 264.2 41.64 497.8 33.42 Shares vested (246.5) 35.72 (171.4) 34.65 Shares forfeited (76.6) 35.96 (58.4) 38.56 Outstanding, end of period 768.3 $ 37.99 2.48 827.2 $ 35.96 3.12 Our stock options are eligible to vest over three years in three equal annual installments, subject to continued employment on each vesting date. Vested options are exercisable at any time until 10 years from the date of the option grant, subject to earlier expirations under certain terminations of service and other conditions. The stock options granted have an exercise price equal to the closing stock price of our common stock on the grant date. At January 31, 2017 and January 31, 2016, we have outstanding 298,298 and 596,598 unvested time-based stock options, respectively, under the KLX Inc. Long-Term Incentive Plan (the “Plan”), which stock options vest on the basis of continuous employment. All of the time-based options vest ratably during the period of service. The following table sets forth the summary of options activity under the Plan (dollars in thousands except per share data): January 31, 2017 January 31, 2016 Weighted Weighted Weighted Average Weighted Average Average Remaining Aggregate Average Remaining Aggregate Number Exercise Contractual Life Intrinsic Number Exercise Contractual Life Intrinsic of Shares Price (in years) Value (1) of Shares Price (in years) Value (1) Outstanding, beginning of period 894,899 $ 39.08 8.96 $ — 894,899 $ 39.08 9.96 $ 205.8 Granted — — — — Exercised — — — — Canceled — — — — Outstanding, end of period 894,899 $ 39.08 7.96 $ 8,868.4 894,899 $ 39.08 8.96 $ — Exercisable, end of period 596,601 $ 39.08 7.96 $ 5,912.3 298,301 $ 39.08 8.96 $ — (1) Aggregate intrinsic value is calculated based on the difference between our closing stock price at year end and the exercise price, multiplied by the number of in-the-money options and represents the pre-tax amount that would have been received by the option holders, had they all exercised all their options on the fiscal year end date. For the year ended January 31, 2017 and the one month ended January 31, 2015, we recorded $3.9 and $0.2, respectively, of stock-based compensation expense related to these options that is included within selling, general and administrative expenses. At January 31, 2017 and January 31, 2016, the unrecognized stock-based compensation related to these options was $7.7 and $7.5, respectively, and is expected to be recognized over a weighted-average period of 0.87 and 1.87 years, respectively. We use the Black-Scholes option pricing model to determine the fair value of stock options. The determination of the fair value of stock-based payment awards on the date of grant using an option-pricing model is affected by our stock price as well as assumptions regarding complex and subjective variables. These variables include the expected stock price volatility over the term of the awards, risk-free interest rate and expected dividends. Due to the limited trading history of our common stock, we estimated expected volatility based on historical data of comparable public companies. The expected term, which represents the period of time that options granted are expected to be outstanding, is estimated based on guidelines provided in U.S. Securities and Exchange Commission Staff Accounting Bulletin No. 110 and represents the average of the vesting tranches and contractual terms. The risk-free rate assumed in valuing the options is based on the U.S. Treasury rate in effect at the time of grant for the expected term of the option. We do not anticipate paying any cash dividends in the foreseeable future and, therefore, used an expected dividend yield of zero in the option pricing model. Compensation expense is recognized only for those options expected to vest with forfeitures estimated based on our historical experience at B/E Aerospace and future expectations. Stock-based compensation awards are amortized on a straight line basis over a three year period. The weighted average assumptions used to value the option grants are as follows: January 31, 2015 Expected life (in years) Volatility Risk free interest rate Dividend yield - The weighted average fair value per option at the grant date for options issued during the one month ended January 31, 2015 was $12.99. |
Employee Stock Purchase Plan
Employee Stock Purchase Plan | 12 Months Ended |
Jan. 31, 2017 | |
Employee Stock Purchase Plan | |
Employee Stock Purchase Plan | 12. EMPLOYEE STOCK PURCHASE PLAN KLX has established a qualified Employee Stock Purchase Plan, the terms of which allow for 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 on the last business day of each semi‑annual stock purchase period. KLX issued approximately 51,000 and 50,000 shares of common stock to employees of the Company during the years ended January 31, 2017 and January 31, 2016, respectively, at a weighted average price per share of $31.09 and $30.62, respectively. B/E Aerospace had a similar plan and issued approximately 19,000 shares of common stock to employees of the Company during the year ended December 31, 2014, pursuant to this plan at a weighted average price per share of $71.40. No shares of common stock were issued during the one month ended January 31, 2015. |
Segment Reporting
Segment Reporting | 12 Months Ended |
Jan. 31, 2017 | |
Segment Reporting | |
Segment Reporting | 13. SEGMENT REPORTING The Company is organized based on the products and services it offers. The Company’s reportable segments, which are also its operating segments, are comprised of ASG and ESG. Each 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. This group is comprised of the Chairman and Chief Executive Officer and the President and Chief Operating Officer. The following table presents revenues and other financial information by business segment: Year Ended January 31, 2017 Aerospace Solutions Group Energy Services Group Consolidated Revenues $ 1,340.9 $ 153.2 $ 1,494.1 Operating earnings (loss) (1) 220.6 (91.2) 129.4 Total assets (2) 3,471.4 226.9 3,698.3 Goodwill 996.4 — 996.4 Capital expenditures (3) 11.0 24.5 35.5 Depreciation and amortization 30.4 36.5 66.9 Year Ended January 31, 2016 Aerospace Solutions Group Energy Services Group Consolidated Revenues $ 1,312.5 $ 254.9 $ 1,567.4 Operating earnings (loss) (1) 211.6 (748.4) (536.8) Total assets (2) 3,422.8 268.2 3,691.0 Goodwill 952.4 2.5 954.9 Capital expenditures (3) 30.4 100.1 130.5 Depreciation and amortization 28.1 46.9 75.0 Year Ended December 31, 2014 Aerospace Solutions Group Energy Services Group Consolidated Revenues $ 1,310.2 $ 385.5 $ 1,695.7 Operating earnings (1) 192.0 54.8 246.8 Total assets (2) 3,298.4 982.2 4,280.6 Goodwill 986.3 342.4 1,328.7 Capital expenditures (3) 17.7 119.1 136.8 Depreciation and amortization 28.0 40.0 68.0 Month Ended January 31, 2015 Aerospace Solutions Group Energy Services Group Consolidated Revenues $ 93.1 $ 39.9 $ 133.0 Operating earnings (1) 12.9 4.8 17.7 Total assets (2) 3,252.2 972.4 4,224.6 Goodwill 965.8 320.7 1,286.5 Capital expenditures (3) 1.7 4.5 6.2 Depreciation and amortization 2.4 4.9 7.3 (1) Operating earnings includes an allocation of corporate IT costs, employee benefits and general and administrative costs. The allocations were made on a direct usage basis when identifiable, with the remainder allocated on the basis of revenues generated, costs incurred, headcount or other measures. (2) Corporate assets (including cash and cash equivalents) of $378.2, $559.5, $451.6 and $508.4 at January 31, 2017, 2016 and 2015 and December 31, 2014, respectively, have been allocated to the above segments based on each segment’s percentage of total assets. (3) Corporate capital expenditures have been allocated to the above segments based on each segment’s percentage of total capital expenditures. Geographic Information The Company operates principally in three geographic areas, the United States, Europe (primarily Germany) and emerging markets, such as Asia, the Pacific Rim and the Middle East. There were no significant transfers among geographic areas during these periods. The following table presents revenues and operating earnings (loss) based on the originating location for the years ended January 31, 2017 and 2016, December 31, 2014 and the one month ended January 31, 2015. Additionally, it presents all identifiable assets related to the operations in each geographic area as of January 31, 2017 and 2016: Year Ended Month Ended January 31, 2017 January 31, 2016 December 31, 2014 January 31, 2015 Revenues: Domestic $ 1,423.8 $ 1,453.4 $ 1,505.3 $ 124.1 Foreign 70.3 114.0 190.4 8.9 $ 1,494.1 $ 1,567.4 $ 1,695.7 $ 133.0 Operating earnings (loss): Domestic $ 109.3 $ (561.0) $ 195.5 $ 15.0 Foreign 20.1 24.2 51.3 2.7 $ 129.4 $ (536.8) $ 246.8 $ 17.7 January 31, 2017 January 31, 2016 Identifiable assets: Domestic $ 3,214.1 $ 3,182.2 Foreign 484.2 508.8 $ 3,698.3 $ 3,691.0 Revenues by geographic area, based on destination, for the years ended January 31, 2017 and 2016, December 31, 2014 and the one month ended January 31, 2015 were as follows: Year Ended Month Ended January 31, 2017 January 31, 2016 December 31, 2014 January 31, 2015 % of % of % of % of Revenues Revenues Revenues Revenues Revenues Revenues Revenues Revenues United States $ 865.6 57.9 % $ 955.3 61.0 % $ 1,111.5 65.5 % $ 90.1 67.7 % Europe 387.9 26.0 % 376.3 24.0 % 374.2 22.1 % 28.3 21.3 % Asia, Pacific Rim, Middle East and other 240.6 16.1 % 235.8 15.0 % 210.0 12.4 % 14.6 11.0 % Total revenues $ 1,494.1 100.0 % $ 1,567.4 100.0 % $ 1,695.7 100.0 % $ 133.0 100.0 % Export revenues from the United States to customers in foreign countries amounted to $511.1, $457.9, $414.3 and $29.6 in the years ended January 31, 2017 and 2016, December 31, 2014 and the one month ended January 31, 2015, respectively. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Jan. 31, 2017 | |
Fair Value Measurements | |
Fair Value Measurements | 14. FAIR VALUE INFORMATION All financial instruments are 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 January 31, 2017 and 2016. 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 $1,260.7 and $1,136.4 as of January 31, 2017 and 2016, respectively. Goodwill and long-lived assets, including property and equipment and purchased intangibles subject to amortization were impaired and written down to their estimated fair values during the third quarter of Fiscal 2015. The goodwill level 3 fair value was determined using an income based approach utilizing estimates of future cash flow, discount rate and long-term growth rate, all of which were unobservable. The long-lived asset level 3 fair value was determined using a combination of the cost approach and the market approach, which used inputs that included replacement costs (unobservable), physical deterioration estimates (unobservable), economic obsolescence (unobservable), and market sales data for comparable assets. The following table summarizes impairments of goodwill and long-lived assets and the related post impairment fair values of the corresponding ESG assets for the year ended January 31, 2016: Year Ended January 31, 2016 Impairment Fair Value Property and equipment, net $ 152.0 $ 174.3 Goodwill 310.4 — Intangible assets 177.8 — $ 640.2 $ 174.3 Fair value is measured as of the impairment date using Level 3 inputs. See Note 4 for a discussion of the asset impairment charge recorded during the third quarter of Fiscal 2015. The fair value information presented herein is based on pertinent information available to management at January 31, 2017 and 2016, respectively. Although management is not aware of any factors that would significantly affect the estimated fair value amounts, such amounts have not been comprehensively revalued for purposes of these consolidated and combined financial statements since those dates, and current estimates of fair value may differ significantly from the amounts presented herein. |
Selected Quarterly Data (Unaudi
Selected Quarterly Data (Unaudited) | 12 Months Ended |
Jan. 31, 2017 | |
Selected Quarterly Data (Unaudited) | |
Selected Quarterly Data (Unaudited) | 15. SELECTED QUARTERLY DATA ( Unaudited) During the year ended January 31, 2017, the Company corrected errors in previously reported financial statements related to the application of an accounting principle on claims related to the termination of programs under a long-term contract and other errors associated with inventory and sales reserves. Immaterial restatements to the three month period ended April 30, 2016 and the three and six month periods ended July 31, 2016 will be made when information for such periods are included in the Company’s Form 10-Q’s for the quarters ending April 30, 2017 and July 31, 2017, respectively. The impact of the immaterial restatements will be noted in these Form 10-Q filings for Fiscal 2017 and is summarized in the table below: 2016 Three Months Ended As Reported As Restated As Reported As Restated First First Second Second Quarter Quarter Quarter Quarter Accounts Receivable - trade (1) $ 267.8 $ 252.4 $ 289.0 $ 261.1 Inventories, net (1) 1,284.0 1,293.5 1,367.5 1,386.9 Stockholders' equity (1) 2,234.0 2,230.4 2,228.3 2,223.0 Revenues (1) 368.2 352.8 391.4 378.9 Cost of sales (1) 278.7 269.3 296.3 286.4 Net earnings (1) 6.2 2.5 9.6 8.0 Basic net earnings per share (2) 0.12 0.05 0.18 0.15 Diluted net earnings per share (2) 0.12 0.05 0.18 0.15 Year Ended January 31, 2017 (Restated) (Restated) First Second Third Fourth Quarter Quarter Quarter Quarter Revenues (1) $ 352.8 $ 378.9 $ 389.0 $ 373.4 Cost of sales (1) 269.3 286.4 289.0 281.4 Net earnings (1) 2.5 8.0 19.8 17.9 Basic net earnings per share (2) 0.05 0.15 0.38 0.35 Diluted net earnings per share (2) 0.05 0.15 0.38 0.34 (1) The restated first quarter results include the correction of prior period errors which resulted in a reduction of revenue, cost of goods sold and net earnings of $12.1 million, $6.6 million and $3.4 million, respectively. The impact of these prior period errors was not material to the year ended January 31, 2017 or to any prior periods. (2) Net earnings per share are computed individually for each quarter presented. Therefore, the sum of the quarterly net earnings per share may not necessarily equal the total for the year. Year Ended January 31, 2016 First Second Third Fourth Quarter Quarter Quarter (3) Quarter (4) Revenues $ 431.5 $ 412.7 $ 365.0 $ 358.2 Cost of sales 323.9 315.3 279.1 284.1 Net earnings (loss) 17.9 7.4 (400.8) (10.3) Basic net earnings (loss) per share (1) 0.34 0.14 (7.68) (0.20) Diluted net earnings (loss) per share (1)(2) 0.34 0.14 (7.68) (0.20) (1) Net earnings per share are computed individually for each quarter presented. Therefore, the sum of the quarterly net earnings per share may not necessarily equal the total for the year. (2) The Company has potential common stock equivalents related to its outstanding restricted stock awards, restricted stock units and employee stock purchase plan. These potential common stock equivalents were not included in diluted loss per share for the three months ended January 31, 2016 because the effect would have been anti‑dilutive. Accordingly, basic and diluted loss per common share and the weighted average number of shares used in the computation are the same for the three months ended January 31, 2016. For each of the other periods presented, the Company had potential common stock equivalents related to its outstanding restricted stock awards, restricted stock units and employee stock purchase plan as of January 31, 2016 that were considered in the Company’s diluted earnings per share calculation. (3) Net loss in the third quarter includes an impairment charge of $640.2 including a goodwill impairment of $310.4, $177.8 related to identifiable intangibles and $152.0 related to PP&E. (4) Net loss in the fourth quarter includes $32.4 of non‑recurring costs, including acquisition and integration costs, severance and other Spin‑off related costs. |
Valuation and Qualifying Accoun
Valuation and Qualifying Accounts | 12 Months Ended |
Jan. 31, 2017 | |
Valuation and Qualifying Accounts | |
Valuation And Qualifying Accounts | SCHEDULE II—VALUATION FOR THE YEARS ENDED JANUARY 31, 2017 AND 2016, DECEMBER 31, 2014 AND THE ONE MONTH ENDED JANUARY 31, 2015 (In millions) Balance At Balance At Beginning Write-Offs/ End Of Period Expenses Other Disposals Of Period Deducted From Assets: Allowance for doubtful accounts: Year ended January 31, 2017 $ $ 4.0 $ — $ 1.8 $ 13.5 Year ended January 31, 2016 8.0 4.1 — 0.8 11.3 Month ended January 31, 2015 8.1 0.1 — 0.2 8.0 Year ended December 31, 2014 6.0 12.4 0.2 10.5 8.1 Reserve for obsolete inventory: Year ended January 31, 2017 $ 40.4 $ 20.7 $ — $ 1.5 $ 59.6 Year ended January 31, 2016 33.5 7.7 — 0.8 40.4 Month ended January 31, 2015 33.0 0.7 — 0.2 33.5 Year ended December 31, 2014 30.3 4.6 — 1.9 33.0 Deferred tax asset valuation allowance: Year ended January 31, 2017 $ 21.9 $ — $ (1.6) $ (2.5) $ 17.8 Year ended January 31, 2016 24.8 — 5.3 (8.2) 21.9 Month ended January 31, 2015 24.8 — — — 24.8 Year ended December 31, 2014 12.8 — 12.0 — 24.8 |
Description of Business and S23
Description of Business and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Jan. 31, 2017 | |
Description of Business and Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation 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 is reporting a January 2015 fiscal month transition period. The Company’s 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 financial statements and accounting records as if it was operated on a stand‑alone basis and were prepared in accordance with accounting principles generally accepted in the United States (GAAP). All intercompany transactions and account balances within the Company have been eliminated. The consolidated and combined statements of earnings and comprehensive income for the periods prior to the spin-off reflect allocations of general corporate expenses from B/E Aerospace, including, but not limited to, executive management, finance, legal, information technology, human resources, employee benefits administration, treasury, risk management, procurement and other shared services. The allocations were made on a direct usage basis when identifiable, with the remainder allocated on the basis of revenues generated, costs incurred, headcount or other measures. Management of the Company considers these allocations to be a reasonable reflection of the utilization of services by, or the benefits provided, to the Company. The allocations may not, however, reflect the expense the Company would have incurred as a stand‑alone company for the periods presented. Actual costs that may have been incurred if the Company had been a stand‑alone company would depend on a number of factors, including the chosen organizational structure, what functions were outsourced or performed by employees and strategic decisions made in areas such as information technology and infrastructure. |
Use of Estimates | Use of Estimates —The preparation of the consolidated and combined 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. |
Revenue Recognition | Revenue Recognition —Sales of products and services are recorded when the earnings process is complete. This generally occurs when the products are shipped to the customer in accordance with the contract or purchase order, risk of loss and title has passed to the customer, collectability is reasonably assured and pricing is fixed and determinable. In instances where title does not pass to the customer upon shipment, the Company recognizes revenue upon delivery or customer acceptance, depending on the terms of the sales contract. Management provides allowances for credits and returns, based on historic experience, and adjusts such allowances as considered necessary. In connection with the sales of its products, the Company also provides certain supply chain management services to certain of its customers. These services include the timely replenishment of products at the customer site, while also minimizing the customer’s on‑hand inventory. These services are provided by the Company contemporaneously with the delivery of the product, and as such, once the product is delivered, the Company does not have a post‑delivery obligation to provide services to the customer. The price of such services is generally included in the price of the products delivered to the customer, and revenue is recognized upon delivery of the product, at which point, the Company has satisfied its obligations to the customer. The Company does not account for these services as a separate element, as the services do not have stand‑alone value and cannot be separated from the product element of the arrangement. Service revenues from oilfield technical services and related rental equipment are recorded when services are performed and/or equipment is rented pursuant to a completed purchase order or master services agreement (“MSA”) that sets forth firm pricing and payment terms. |
Income Taxes | Income Taxes —The Company provides deferred income taxes for temporary differences between the amounts of assets and liabilities recognized for financial reporting purposes and such amounts recognized for income tax purposes. Deferred income taxes are computed using enacted tax rates that are expected to be in effect when the temporary differences reverse. A valuation allowance related to a deferred tax asset is recorded when it is more likely than not that some portion or the entire deferred tax asset will not be realized. The Company records uncertain tax positions within income tax expense and classifies interest and penalties related to income taxes as income tax expense. |
Cash Equivalents | Cash Equivalents —The Company considers all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents. |
Accounts Receivable, Net | Accounts Receivable, Net —The Company performs ongoing credit evaluations of its customers and adjusts credit limits based upon payment history and the customer’s current creditworthiness, as determined by review of their current credit information. The Company continuously monitors collections and payments from its customers and maintains a provision for estimated credit losses based upon historical experience and any specific customer collection issues that have been identified. The allowance for doubtful accounts at January 31, 2017 and 2016 was $13.5 and $11.3, respectively. |
Inventories | Inventories —Inventories, made up of finished goods, primarily consist 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. During Fiscal 2016, the Company revised its methodology for estimating the provision required for excess and obsolete (“E&O”) inventories. The new methodology more adequately considers historical demand of our inventory to project future demand in order to estimate the provision required for E&O inventories. Other factors considered in the methodology include expected market growth rates and related elements. The implementation of the new methodology did not impact the current period or any prior period reserve for E&O inventory. Demand for the Company’s products can fluctuate from period to period depending on customer activity. In accordance with industry practice, costs in inventory include amounts relating to long-term contracts with long production cycles and to inventory items with long production cycles, some of which are not expected to be realized within one year. As a result, the Company’s operating cycle is greater than a year and is closely tied to the lifecycle of an airframe. Reserves for excess and obsolete inventory were approximately $59.6 and $40.4 as of January 31, 2017 and 2016, respectively. Substantially all of the Company’s inventory is comprised of aerospace grade fasteners which support 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 reserve for inventory with limited shelf life is not material to the Company’s financial statements. |
Property and Equipment, Net | Property and Equipment, Net —Property and equipment are stated at cost and depreciated generally under the straight‑line method over their estimated useful lives of one to fifty years (or the lesser of the term of the lease for leasehold improvements, as appropriate). |
Goodwill and Intangible Assets, Net | Goodwill and Intangible Assets, Net —Under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 350, Intangibles — Goodwill and Other (“ASC 350”), goodwill and indefinite‑lived intangible assets are reviewed at least annually for impairment. Acquired intangible assets with definite lives are amortized over their individual useful lives. Other intangible assets are amortized using the straight‑line method over periods ranging from five to thirty years. As of January 31, 2017, the Company had two reporting units, which were determined based on the guidelines contained in FASB ASC Topic 350, Subtopic 20, Section 35. Each reporting unit constitutes a business, for which there is discrete financial information available that is regularly reviewed by the management of the Company. Goodwill is tested at least annually as of December 31 st , and management assesses whether there has been any impairment in the value of goodwill by first comparing the fair value to the net carrying value of the reporting units. If the carrying value exceeds its estimated fair value, a second step is performed to compute the amount of the impairment. An impairment loss is recognized if the implied fair value of the asset being tested is less than its carrying value. In this event, the asset is written down accordingly. The fair values of the reporting units for goodwill impairment testing is determined using valuation techniques based on estimates, judgments and assumptions management believes are appropriate in the circumstances. For the years ended January 31, 2017 and December 31, 2014 and the one month ended January 31, 2015, the Company’s annual impairment testing yielded no impairments of goodwill or the indefinite‑lived intangible asset. For the year ended January 31, 2016, the Company determined goodwill related to the ESG reporting unit was fully impaired and recorded a pre-tax impairment charge related to ESG’s goodwill of $310.4. The indefinite‑lived intangible asset is tested at least annually for impairment. Impairment for the intangible asset with an indefinite life exists if the carrying value of the intangible asset exceeds its fair value. The fair value of the indefinite‑lived intangible asset is determined using valuation techniques based on estimates, judgments and assumptions management believes are appropriate in the circumstances. |
Long-Lived Assets | Long‑Lived Assets —The Company assesses potential impairments to its long‑lived assets when there is evidence that events or changes in circumstances indicate that the carrying amount of an asset may not be recovered. An impairment loss is recognized when the undiscounted cash flows expected to be generated by an asset (or group of assets) is less than its carrying amount. Any required impairment loss is measured as the amount by which the asset’s carrying value exceeds its fair value and is recorded as a reduction in the carrying value of the related asset and a charge to operating results. For the years ended January 31, 2017 and December 31, 2014 and the one month ended January 31, 2015, there were no impairments of long lived assets. For the year ended January 31, 2016, the Company used a combination of a cost and market approaches for determining the fair value of the ESG asset group’s long lived assets and recognized impairment charges related to identified intangibles and property and equipment of $177.8 and $152.0, respectively. |
Common Stock Equivalents | Common Stock Equivalents —The Company has potential common stock equivalents related to its outstanding restricted stock awards, restricted stock units and employee stock purchase plan. These potential common stock equivalents are not included in diluted loss per share for any period presented in which there is a net loss because the effect would have been anti‑dilutive. |
Accounting for Stock-Based Compensation | Accounting for Stock‑Based Compensation —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 year ended December 31, 2014 related to grants of restricted stock and restricted stock units granted by our Former Parent. No compensation cost related to stock options was recognized during that period as no options were granted during the year ended December 31, 2014, and all outstanding options were vested. All unvested shares of restricted stock were converted into unvested shares of KLX on the distribution date at a ratio equal to 1.8139. Compensation cost recognized during the years ended January 31, 2017 (“Fiscal 2016”) and 2016 (“Fiscal 2015”) and the one month ended January 31, 2015 related to unvested shares converted on the distribution date and new shares of KLX restricted stock and stock options granted during Fiscal 2016 and Fiscal 2015. The Company has established a qualified Employee Stock Purchase Plan. The Employee Stock Purchase 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. The value of the rights under this Plan (and that of our Former Parent’s) granted during the years ended January 31, 2017 and 2016 and December 31, 2014 was $0.3, $0.3 and $0.2, respectively, and was not material during the one month ended January 31, 2015. |
Foreign Currency Translation | Foreign Currency Translation —The assets and liabilities of subsidiaries located outside the United States are translated into U.S. dollars at the rates of exchange in effect at the balance sheet dates. Revenue and expense items are translated at the average exchange rates prevailing during the period. Gains and losses resulting from foreign currency transactions are recognized currently in income, and those resulting from translation of financial statements are accumulated as a separate component of Former Parent company equity and accumulated other comprehensive income (loss). The Company’s European subsidiaries primarily utilize the British pound or the Euro as their local functional currency. |
Treasury Stock | Treasury Stock - The Company may periodically repurchase shares of its common stock from employees for the satisfaction of their individual payroll tax withholding upon vesting of restricted stock and restricted stock units in connection with the Company’s Long-Term Incentive Plan (“LTIP”). The Company’s repurchases of common stock are recorded at the average cost of the common stock. As part of the LTIP, the Company repurchased 35,009 shares of its common stock for $1.5 during the year ended January 31, 2017. On January 7, 2016, the Board of Directors authorized a $100.0 share repurchase under the existing $250.0 share repurchase program. During Fiscal 2016, the Company repurchased 982,062 shares of common stock at an average price of $41.20 per share for a total of $40.5 as part of the share repurchase program. |
Concentration of Risk | Concentration of Risk —In ASG, the Company’s products and services are primarily concentrated within the aerospace industry with customers consisting primarily of commercial airlines, a wide variety of business jet customers and commercial aircraft manufacturers. In ESG, the Company provides products and services to energy industry customers who focus on developing and producing oil and gas onshore in North America. The Company’s management performs ongoing credit evaluations on the financial condition of all of its customers and maintains allowances for uncollectible accounts receivable based on expected collectability. Credit losses have historically been within management’s expectations and the provisions established. Significant customers change from year to year, in the case of ASG, depending on the level of refurbishment activity and/or the level of new aircraft purchases by such customers, and in the case of ESG, depending on the level of exploration and production activity and the use of our services. During the years ended January 31, 2017 and 2016 and December 31, 2014, no single customer accounted for more than 10% of the Company’s consolidated revenues. |
Correction of Interim Data | Correction of Interim Data — During the year ended January 31, 2017, the Company restated its April 30, 2016 and July 31, 2016 interim financial statements to reflect the correction of errors that were identified. The Company has concluded the corrected errors are immaterial individually and in the aggregate. These items have been corrected and are discussed in more detail in Note 15. Selected Quarterly Data. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In January 2017, the FASB issued Accounting Standards Update (“ASU”) 2017-04, Intangibles – Goodwill and Other. ASU 2017-04 simplifies the subsequent measurement of goodwill by removing the second step of the two-step impairment test. The amendment requires an entity to perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit's fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The amendment should be applied on a prospective basis. ASU 2017-04 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The adoption of ASU 2017-04 is not expected to have a material impact on the Company’s consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, Business Combinations. This update clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. This ASU is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The adoption of ASU 2017-01 is not expected to have a material impact on the Company’s consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting , which amends ASC Topic 718, Compensation – Stock Compensation . The ASU includes multiple provisions intended to simplify various aspects of the accounting for share-based payments. The ASU is effective for annual periods beginning after December 15, 2016, and interim periods within those years. Earlier adoption is permitted. The Company is currently evaluating the effect this update will have on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (“ASU 2016-02”), which supersedes ASC Topic 840, Leases , and creates a new topic, ASC Topic 842, Leases . This update is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Earlier adoption is permitted. ASU 2016-02 requires lessees to recognize a lease liability and a lease asset for all leases, including operating leases, with a term greater than 12 months on its balance sheet. The update also expands the required quantitative and qualitative disclosures surrounding leases. ASU 2016-02 will be applied using a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The Company is currently evaluating the effect of this update on its consolidated financial statements. 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. In April 2016, FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing , and in May 2016, ASU 2016-12, Revenues from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients both of which provide supplemental adoption guidance and clarification to ASU 2014-09. ASU 2016-10 and ASU 2016-12 must be adopted concurrently with the adoption of ASU 2014-09. The Company has not determined the impact this guidance will have on the financial statements. However, the identification of implementation project team members and the inventorying of contracts with customers, particularly large customer contracts, has begun. Other than increased disclosures, the impact of the revised accounting guidance to the results of operations and cash flows of the Company cannot be determined until the assessment process is complete. |
Business Combinations (Tables)
Business Combinations (Tables) - Herndon | 12 Months Ended |
Jan. 31, 2017 | |
Estimates of Fair Values of Assets Acquired and Liabilities Assumed | Accounts receivable-trade $ 12.3 Inventories 103.7 Other current and non-current assets 3.7 Property and equipment 2.1 Goodwill 50.8 Identified intangibles 68.9 Accounts payable (9.7) Other current and non-current liabilities (11.0) Total consideration paid $ 220.8 |
Pro Forma Revenues, Net Earnings (Loss) and Diluted Net Earnings (Loss) Per Share | UNAUDITED YEAR ENDED January 31, 2017 January 31, 2016 Pro forma Pro forma Revenues $ 1,544.3 $ 1,699.8 Net earnings 51.7 (376.7) Earnings (loss) per diluted share 0.99 (7.21) |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Jan. 31, 2017 | |
Property and Equipment, Net | |
Property and Equipment | Useful January 31, January 31, Life (Years) 2017 2016 Land, buildings and improvements 1 - 50 $ 40.9 $ 35.5 Machinery 2 - 20 119.8 89.5 Computer equipment and software 3 - 15 105.5 96.1 Furniture and equipment 3 - 14 131.5 148.7 397.7 369.8 Less accumulated depreciation 149.4 109.3 $ 248.3 $ 260.5 |
Goodwill and Long-Lived Asset26
Goodwill and Long-Lived Assets, Net (Tables) | 12 Months Ended |
Jan. 31, 2017 | |
Goodwill and Long-Lived Assets, Net | |
Intangible Assets by Major Asset Class | January 31, 2017 January 31, 2016 Useful Life Original Accumulated Net Book Original Accumulated Impairment Net Book (Years) Cost Amortization Value Cost Amortization Charge Value Customer contracts and relationships 8 - 30 $ 422.0 $ 129.1 $ 292.9 $ 536.9 $ 124.2 $ 167.1 $ 245.6 Covenants not to compete 5 0.1 Developed technologies 15 3.3 0.2 3.1 — — — — Trade names Indefinite 16.9 — 16.9 17.0 — — 17.0 $ 447.7 $ 132.9 $ 314.8 $ 572.1 $ 131.6 $ 177.8 $ 262.7 |
Schedule of carrying amount of goodwill | Balance, December 31, 2014 $ 1,328.7 Purchase Price Adjustments (21.7) Effect of foreign currency translation (20.5) Balance, January 31, 2015 1,286.5 Acquisitions 2.5 Purchase Price Adjustments (10.3) Effect of foreign currency translation (13.4) Impairment (310.4) Balance, January 31, 2016 954.9 Acquisitions 50.8 Purchase Price Adjustments (2.5) Effect of foreign currency translation (6.8) Balance, January 31, 2017 $ 996.4 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 12 Months Ended |
Jan. 31, 2017 | |
Accrued Liabilities | |
Accrued Liabilities | January 31, 2017 January 31, 2016 Accrued salaries, vacation and related benefits $ 31.6 $ 28.7 Accrued commissions 8.7 6.2 Income taxes payable 10.3 11.4 Accrued interest 11.7 11.7 Other accrued liabilities 28.8 57.3 $ 91.1 $ 115.3 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Jan. 31, 2017 | |
Long-Term Debt | |
Long-Term Debt | January 31, 2017 January 31, 2016 Senior unsecured notes $ 1,200.0 $ 1,200.0 Less unamortized original issue discount and debt issue costs 18.0 20.5 $ 1,182.0 $ 1,179.5 |
Maturities of Long-Term Debt | Year Ending January 31, 2018 $ — 2019 — 2020 — 2021 — 2022 — Thereafter 1,200.0 Total $ 1,200.0 |
Commitments, Contingencies An29
Commitments, Contingencies And Off-Balance-Sheet Arrangements (Tables) | 12 Months Ended |
Jan. 31, 2017 | |
Commitments, Contingencies and Off-Balance Sheet Arrangements | |
Future Payments under Operating Leases with Terms Greater Than One Year | Year Ending January 31, 2018 $ 10.5 2019 18.7 2020 15.0 2021 13.3 2022 11.2 Thereafter 20.5 Total $ 89.2 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jan. 31, 2017 | |
Income Taxes | |
Components of (Loss) Earnings Before Incomes Taxes | Year Ended Month Ended January 31, 2017 January 31, 2016 December 31, 2014 January 31, 2015 Earnings (loss) before income taxes United States $ 41.3 $ (624.4) $ 210.9 $ 11.3 Foreign 12.2 10.3 32.9 0.1 Earnings (loss) before income taxes $ 53.5 $ (614.1) $ 243.8 $ 11.4 |
Components of Income Tax (Benefit) Expense | Year Ended Month Ended January 31, 2017 January 31, 2016 December 31, 2014 January 31, 2015 Current: Federal $ — $ 0.7 $ 75.4 $ 3.5 State 0.3 (1.5) 8.5 0.4 Foreign (1.3) 3.8 29.0 0.8 (1.0) 3.0 112.9 4.7 Deferred: Federal 14.4 (213.3) 42.8 — State 1.3 (17.4) 3.5 — Foreign (9.4) (0.6) (3.5) (0.4) 6.3 (231.3) 42.8 (0.4) Total income tax expense (benefit) $ 5.3 $ (228.3) $ 155.7 $ 4.3 |
Difference Between Income Tax (Benefit) Expense and Amount Computed by Applying Statutory United States Federal Income Tax Rate to Pre-Tax Earnings | Year Ended Month Ended January 31, 2017 January 31, 2016 December 31, 2014 January 31, 2015 Statutory federal income tax expense (benefit) $ 18.7 $ (214.9) $ 85.3 $ 4.0 U.S. state income taxes 1.5 (17.5) 6.0 0.3 Foreign tax rate differential 0.1 (0.2) (3.7) 0.8 Change in unrecognized tax benefits (7.8) 0.4 — — Change in valuation allowance on foreign (1.6) 5.3 — — Other, net 1.3 2.0 0.8 (0.8) Non-taxable/non-deductible items (6.9) (3.4) Exit taxes — — 67.3 — $ 5.3 $ (228.3) $ 155.7 $ 4.3 |
Tax Effects of Temporary Differences and Carryforwards that Give Rise to Deferred Income Tax Assets and Liabilities | January 31, 2017 January 31, 2016 Deferred tax assets: Inventory reserves $ 24.8 $ 15.4 Accrued liabilities 12.9 15.7 Intangible Assets 44.2 84.2 Net operating loss carryforward 81.2 59.5 Inventory capitalization 14.9 10.7 Other 19.9 5.2 $ 197.9 $ 190.7 Deferred tax liabilities: Intangible assets (12.8) (16.1) Depreciation (25.3) (5.5) (38.1) (21.6) Net deferred tax asset before valuation allowance 159.8 169.1 Valuation allowance (17.8) (21.9) Net deferred tax asset $ 142.0 $ 147.2 |
Reconciliation of Beginning and Ending Amounts of Gross Uncertain Tax Positions | January 31, 2017 January 31, 2016 January 31, 2015 Unrecognized tax benefit at beginning of period $ 9.0 $ 9.4 $ 10.1 Additions for current year tax positions 4.6 — — Additions for prior year tax positions 1.3 — — Decreases for prior year tax positions (7.6) — — Currency fluctuations (0.1) (0.4) (0.7) Unrecognized tax benefit at end of period $ 7.2 $ 9.0 $ 9.4 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Jan. 31, 2017 | |
Stockholders' Equity | |
Computation of Basic and Diluted Net Earnings Per Share | Year Ended Month Ended January 31, 2017 January 31, 2016 December 31, 2014 January 31, 2015 Numerator: net earnings (loss) $ 48.2 $ (385.8) $ 88.1 $ 7.1 Denominator: Denominator for basic earnings per share—Weighted average shares (in millions) 51.8 52.2 52.2 52.2 Effect of dilutive securities—Dilutive securities (in millions) 0.4 — 0.1 0.1 Denominator for diluted earnings per share—Adjusted weighted average shares (in millions) 52.2 52.2 52.3 52.3 Basic net earnings (loss) per share (1) $ 0.93 $ (7.39) $ 1.69 $ 0.14 Diluted net earnings (loss) per share (1) $ 0.92 $ (7.39) $ 1.68 $ 0.14 (1) On December 16, 2014, the distribution date, B/E Aerospace stockholders of record as of the close of business on December 5, 2014 received one share of KLX common stock for every two shares of B/E Aerospace’s common stock held as of the record date. Basic and diluted earnings per common share and the average number of common shares outstanding were calculated using the number of KLX common shares outstanding immediately following the distribution. |
Restricted Stock Shares Granted, Vested, Forfeited and Outstanding | January 31, 2017 January 31, 2016 Weighted Weighted Weighted Average Weighted Average Average Remaining Average Remaining Shares Grant Date Vesting Period Shares Grant Date Vesting Period (in thousands) Fair Value (in years) (in thousands) Fair Value (in years) Outstanding, beginning of period 827.2 $ 35.96 3.12 559.2 $ 38.09 2.97 Shares granted 264.2 41.64 497.8 33.42 Shares vested (246.5) 35.72 (171.4) 34.65 Shares forfeited (76.6) 35.96 (58.4) 38.56 Outstanding, end of period 768.3 $ 37.99 2.48 827.2 $ 35.96 3.12 |
Summary of Options Activity | The following table sets forth the summary of options activity under the Plan (dollars in thousands except per share data): January 31, 2017 January 31, 2016 Weighted Weighted Weighted Average Weighted Average Average Remaining Aggregate Average Remaining Aggregate Number Exercise Contractual Life Intrinsic Number Exercise Contractual Life Intrinsic of Shares Price (in years) Value (1) of Shares Price (in years) Value (1) Outstanding, beginning of period 894,899 $ 39.08 8.96 $ — 894,899 $ 39.08 9.96 $ 205.8 Granted — — — — Exercised — — — — Canceled — — — — Outstanding, end of period 894,899 $ 39.08 7.96 $ 8,868.4 894,899 $ 39.08 8.96 $ — Exercisable, end of period 596,601 $ 39.08 7.96 $ 5,912.3 298,301 $ 39.08 8.96 $ — (1) Aggregate intrinsic value is calculated based on the difference between our closing stock price at year end and the exercise price, multiplied by the number of in-the-money options and represents the pre-tax amount that would have been received by the option holders, had they all exercised all their options on the fiscal year end date. |
Weighted Average Assumptions Used to Value Option Grants | January 31, 2015 Expected life (in years) Volatility Risk free interest rate Dividend yield - |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Jan. 31, 2017 | |
Segment Reporting | |
Revenues and Other Financial Information by Business Segment | Year Ended January 31, 2017 Aerospace Solutions Group Energy Services Group Consolidated Revenues $ 1,340.9 $ 153.2 $ 1,494.1 Operating earnings (loss) (1) 220.6 (91.2) 129.4 Total assets (2) 3,471.4 226.9 3,698.3 Goodwill 996.4 — 996.4 Capital expenditures (3) 11.0 24.5 35.5 Depreciation and amortization 30.4 36.5 66.9 Year Ended January 31, 2016 Aerospace Solutions Group Energy Services Group Consolidated Revenues $ 1,312.5 $ 254.9 $ 1,567.4 Operating earnings (loss) (1) 211.6 (748.4) (536.8) Total assets (2) 3,422.8 268.2 3,691.0 Goodwill 952.4 2.5 954.9 Capital expenditures (3) 30.4 100.1 130.5 Depreciation and amortization 28.1 46.9 75.0 Year Ended December 31, 2014 Aerospace Solutions Group Energy Services Group Consolidated Revenues $ 1,310.2 $ 385.5 $ 1,695.7 Operating earnings (1) 192.0 54.8 246.8 Total assets (2) 3,298.4 982.2 4,280.6 Goodwill 986.3 342.4 1,328.7 Capital expenditures (3) 17.7 119.1 136.8 Depreciation and amortization 28.0 40.0 68.0 Month Ended January 31, 2015 Aerospace Solutions Group Energy Services Group Consolidated Revenues $ 93.1 $ 39.9 $ 133.0 Operating earnings (1) 12.9 4.8 17.7 Total assets (2) 3,252.2 972.4 4,224.6 Goodwill 965.8 320.7 1,286.5 Capital expenditures (3) 1.7 4.5 6.2 Depreciation and amortization 2.4 4.9 7.3 (1) Operating earnings includes an allocation of corporate IT costs, employee benefits and general and administrative costs. The allocations were made on a direct usage basis when identifiable, with the remainder allocated on the basis of revenues generated, costs incurred, headcount or other measures. (2) Corporate assets (including cash and cash equivalents) of $378.2, $559.5, $451.6 and $508.4 at January 31, 2017, 2016 and 2015 and December 31, 2014, respectively, have been allocated to the above segments based on each segment’s percentage of total assets. (3) Corporate capital expenditures have been allocated to the above segments based on each segment’s percentage of total capital expenditures. |
Revenues and Operating Earnings Based on Originating Location | Year Ended Month Ended January 31, 2017 January 31, 2016 December 31, 2014 January 31, 2015 Revenues: Domestic $ 1,423.8 $ 1,453.4 $ 1,505.3 $ 124.1 Foreign 70.3 114.0 190.4 8.9 $ 1,494.1 $ 1,567.4 $ 1,695.7 $ 133.0 Operating earnings (loss): Domestic $ 109.3 $ (561.0) $ 195.5 $ 15.0 Foreign 20.1 24.2 51.3 2.7 $ 129.4 $ (536.8) $ 246.8 $ 17.7 |
Total Assets by Reportable Segment | January 31, 2017 January 31, 2016 Identifiable assets: Domestic $ 3,214.1 $ 3,182.2 Foreign 484.2 508.8 $ 3,698.3 $ 3,691.0 |
Revenues by Geographic Area Based on Destination | Year Ended Month Ended January 31, 2017 January 31, 2016 December 31, 2014 January 31, 2015 % of % of % of % of Revenues Revenues Revenues Revenues Revenues Revenues Revenues Revenues United States $ 865.6 57.9 % $ 955.3 61.0 % $ 1,111.5 65.5 % $ 90.1 67.7 % Europe 387.9 26.0 % 376.3 24.0 % 374.2 22.1 % 28.3 21.3 % Asia, Pacific Rim, Middle East and other 240.6 16.1 % 235.8 15.0 % 210.0 12.4 % 14.6 11.0 % Total revenues $ 1,494.1 100.0 % $ 1,567.4 100.0 % $ 1,695.7 100.0 % $ 133.0 100.0 % |
Fair Value Information (Tables)
Fair Value Information (Tables) | 12 Months Ended |
Jan. 31, 2017 | |
Fair Value Measurements | |
Summary of Impairments of Goodwill and Long-lived Assets | Year Ended January 31, 2016 Impairment Fair Value Property and equipment, net $ 152.0 $ 174.3 Goodwill 310.4 — Intangible assets 177.8 — $ 640.2 $ 174.3 |
Selected Quarterly Data (Unau34
Selected Quarterly Data (Unaudited) (Tables) | 12 Months Ended |
Jan. 31, 2017 | |
Selected Quarterly Data (Unaudited) | |
Summary of Quarterly Financial Data | 2016 Three Months Ended As Reported As Restated As Reported As Restated First First Second Second Quarter Quarter Quarter Quarter Accounts Receivable - trade (1) $ 267.8 $ 252.4 $ 289.0 $ 261.1 Inventories, net (1) 1,284.0 1,293.5 1,367.5 1,386.9 Stockholders' equity (1) 2,234.0 2,230.4 2,228.3 2,223.0 Revenues (1) 368.2 352.8 391.4 378.9 Cost of sales (1) 278.7 269.3 296.3 286.4 Net earnings (1) 6.2 2.5 9.6 8.0 Basic net earnings per share (2) 0.12 0.05 0.18 0.15 Diluted net earnings per share (2) 0.12 0.05 0.18 0.15 Year Ended January 31, 2017 (Restated) (Restated) First Second Third Fourth Quarter Quarter Quarter Quarter Revenues (1) $ 352.8 $ 378.9 $ 389.0 $ 373.4 Cost of sales (1) 269.3 286.4 289.0 281.4 Net earnings (1) 2.5 8.0 19.8 17.9 Basic net earnings per share (2) 0.05 0.15 0.38 0.35 Diluted net earnings per share (2) 0.05 0.15 0.38 0.34 (1) The restated first quarter results include the correction of prior period errors which resulted in a reduction of revenue, cost of goods sold and net earnings of $12.1 million, $6.6 million and $3.4 million, respectively. The impact of these prior period errors was not material to the year ended January 31, 2017 or to any prior periods. (2) Net earnings per share are computed individually for each quarter presented. Therefore, the sum of the quarterly net earnings per share may not necessarily equal the total for the year. Year Ended January 31, 2016 First Second Third Fourth Quarter Quarter Quarter (3) Quarter (4) Revenues $ 431.5 $ 412.7 $ 365.0 $ 358.2 Cost of sales 323.9 315.3 279.1 284.1 Net earnings (loss) 17.9 7.4 (400.8) (10.3) Basic net earnings (loss) per share (1) 0.34 0.14 (7.68) (0.20) Diluted net earnings (loss) per share (1)(2) 0.34 0.14 (7.68) (0.20) (1) Net earnings per share are computed individually for each quarter presented. Therefore, the sum of the quarterly net earnings per share may not necessarily equal the total for the year. (2) The Company has potential common stock equivalents related to its outstanding restricted stock awards, restricted stock units and employee stock purchase plan. These potential common stock equivalents were not included in diluted loss per share for the three months ended January 31, 2016 because the effect would have been anti‑dilutive. Accordingly, basic and diluted loss per common share and the weighted average number of shares used in the computation are the same for the three months ended January 31, 2016. For each of the other periods presented, the Company had potential common stock equivalents related to its outstanding restricted stock awards, restricted stock units and employee stock purchase plan as of January 31, 2016 that were considered in the Company’s diluted earnings per share calculation. (3) Net loss in the third quarter includes an impairment charge of $640.2 including a goodwill impairment of $310.4, $177.8 related to identifiable intangibles and $152.0 related to PP&E. (4) Net loss in the fourth quarter includes $32.4 of non‑recurring costs, including acquisition and integration costs, severance and other Spin‑off related costs. |
Description of Business and S35
Description of Business and Summary of Significant Accounting Policies (Details) $ / shares in Units, $ in Millions | Dec. 16, 2014 | Jan. 31, 2015USD ($) | Oct. 31, 2015USD ($) | Jan. 31, 2017USD ($)item$ / sharesshares | Jan. 31, 2016USD ($)item | Dec. 31, 2014USD ($)itemshares | Jan. 07, 2016USD ($) | Dec. 17, 2014shares |
Significant Accounting Policies [Line Items] | ||||||||
Ratio of shares of KLX received for shares of B/E Aerospace | 0.5 | |||||||
Accounts receivable, Net | ||||||||
Accounts receivable - trade, allowance for doubtful accounts | $ 13.5 | $ 11.3 | ||||||
Inventories | ||||||||
Inventory reserves | $ 59.6 | 40.4 | ||||||
Goodwill and Intangible Assets, Net | ||||||||
Number of reporting units | item | 2 | |||||||
Goodwill impairment charge | $ 0 | $ 310.4 | $ 0 | 310.4 | $ 0 | |||
Intangible assets impairment | 177.8 | 177.8 | ||||||
Property and equipment impairment | $ 152 | |||||||
Long-lived assets impairment | $ 0 | $ 0 | 0 | |||||
Accounting for Stock Based Compensation | ||||||||
Unvested shares, distribution date conversion ratio | 1.8139 | |||||||
Qualified employees purchase of stock at a price equal to percentage of closing price | 85.00% | |||||||
Employee Stock Purchase Plan, rights granted | $ 0.3 | 0.3 | $ 0.2 | |||||
Treasury Stock | ||||||||
Purchase of treasury stock | $ 41.9 | 12.5 | ||||||
KLX Inc Long Term Incentive Plan | ||||||||
Treasury Stock | ||||||||
Purchase of treasury stock (shares) | shares | 35,009 | |||||||
Purchase of treasury stock | $ 1.5 | |||||||
Existing $250.0 Share Repurchase Program | ||||||||
Treasury Stock | ||||||||
Purchase of treasury stock (shares) | shares | 982,062 | |||||||
Share repurchase program, authorized amount | $ 250 | $ 100 | ||||||
Purchase of treasury stock | $ 40.5 | |||||||
Repurchased shares, average price per share | $ / shares | $ 41.20 | |||||||
Sales Revenues | Customer Concentration | ||||||||
Concentration of Risk | ||||||||
Concentration risk percentage | 10.00% | 10.00% | 10.00% | |||||
Number of customers exceeding the concentration risk percentage threshold | item | 0 | 0 | 0 | |||||
Energy Services Group | ||||||||
Goodwill and Intangible Assets, Net | ||||||||
Goodwill impairment charge | $ 310.4 | |||||||
Intangible assets impairment | 177.8 | |||||||
Property and equipment impairment | 152 | |||||||
Long-lived assets impairment | $ 329.8 | |||||||
Minimum | ||||||||
Property and Equipment, Net | ||||||||
Property and equipment, useful lives (years) | 1 year | |||||||
Goodwill and Intangible Assets, Net | ||||||||
Intangible assets, useful lives | 5 years | |||||||
Maximum | ||||||||
Property and Equipment, Net | ||||||||
Property and equipment, useful lives (years) | 50 years | |||||||
Goodwill and Intangible Assets, Net | ||||||||
Intangible assets, useful lives | 30 years | |||||||
Options | ||||||||
Accounting for Stock Based Compensation | ||||||||
Compensation cost | $ 0 | |||||||
Stock options granted | shares | 0 | |||||||
BE Aerospace, former parent of the Company | Distribution of Stock of Subsidiary to Stockholders to Effect Spin-Off | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Shares Issued | shares | 52,500,000 | |||||||
Ratio of shares of KLX received for shares of B/E Aerospace | 0.5 |
Business Combinations (Details)
Business Combinations (Details) - USD ($) $ in Millions | May 17, 2016 | Jan. 31, 2015 | Jan. 31, 2017 | Jan. 31, 2017 | Jan. 31, 2016 | Dec. 31, 2014 |
Business Combinations | ||||||
Purchase price, net of cash acquired | $ 220.8 | $ 4.3 | $ 513.8 | |||
Goodwill | $ 1,286.5 | $ 996.4 | 996.4 | 954.9 | $ 1,328.7 | |
Goodwill, purchase price adjustment | $ (21.7) | $ (2.5) | $ (10.3) | |||
Minimum | ||||||
Business Combinations | ||||||
Useful Life (years) | 5 years | |||||
Maximum | ||||||
Business Combinations | ||||||
Useful Life (years) | 30 years | |||||
Herndon | ||||||
Business Combinations | ||||||
Purchase price, net of cash acquired | $ 220.8 | |||||
Identified intangible assets including goodwill | 119.7 | $ 119.7 | ||||
Identified intangibles | 68.9 | 68.9 | ||||
Goodwill | 50.8 | 50.8 | ||||
Goodwill, purchase price adjustment | 6.1 | |||||
Deferred taxes, purchase price adjustment | 2.6 | |||||
Liabilities, purchase price adjustment | 9 | |||||
Other intangible assets expected to deductible for tax purpose | 114.3 | 114.3 | ||||
Wildcat Wireline LLC | ||||||
Business Combinations | ||||||
Identified intangibles | 68.9 | 68.9 | ||||
Goodwill | $ 50.8 | $ 50.8 | ||||
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 | Herndon | ||||||
Business Combinations | ||||||
Useful Life (years) | 20 years | |||||
Covenants not to compete | ||||||
Business Combinations | ||||||
Useful Life (years) | 5 years | |||||
Covenants not to compete | Herndon | ||||||
Business Combinations | ||||||
Useful Life (years) | 5 years |
Business Combinations (Assets A
Business Combinations (Assets Acquired and Liabilities Assumed) (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |||
Jan. 31, 2017 | Jan. 31, 2016 | Jan. 31, 2015 | Dec. 31, 2014 | |
Business Combination, Separately Recognized Transactions [Line Items] | ||||
Goodwill | $ 996.4 | $ 954.9 | $ 1,286.5 | $ 1,328.7 |
Herndon | ||||
Business Combination, Separately Recognized Transactions [Line Items] | ||||
Goodwill | 50.8 | |||
Identified intangibles | 68.9 | |||
Pro forma | ||||
Unaudited pro forma revenues | 1,544.3 | 1,699.8 | ||
Unaudited pro forma net earnings (loss) | $ 51.7 | $ (376.7) | ||
Unaudited pro forma diluted net earnings (loss) per share | $ 0.99 | $ (7.21) | ||
Wildcat Wireline LLC | ||||
Business Combination, Separately Recognized Transactions [Line Items] | ||||
Accounts receivable-trade | $ 12.3 | |||
Inventories | 103.7 | |||
Other current and non-current assets | 3.7 | |||
Property and equipment | 2.1 | |||
Goodwill | 50.8 | |||
Identified intangibles | 68.9 | |||
Accounts payable | (9.7) | |||
Other current and non-current liabilities | (11) | |||
Total consideration paid | $ 220.8 |
Property and Equipment, Net (Pr
Property and Equipment, Net (Property and Equipment) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Jan. 31, 2017 | Jan. 31, 2016 | |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 397.7 | $ 369.8 |
Less accumulated depreciation | 149.4 | 109.3 |
Property, Plant and Equipment, Net, Total | $ 248.3 | 260.5 |
Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, useful lives (years) | 1 year | |
Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, useful lives (years) | 50 years | |
Land, buildings and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 40.9 | 35.5 |
Land, buildings and improvements | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, useful lives (years) | 1 year | |
Land, buildings and improvements | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, useful lives (years) | 50 years | |
Machinery | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 119.8 | 89.5 |
Machinery | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, useful lives (years) | 2 years | |
Machinery | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, useful lives (years) | 20 years | |
Computer Equipment and Software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 105.5 | 96.1 |
Computer Equipment and Software | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, useful lives (years) | 3 years | |
Computer Equipment and Software | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, useful lives (years) | 15 years | |
Furniture and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 131.5 | $ 148.7 |
Furniture and equipment | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, useful lives (years) | 3 years | |
Furniture and equipment | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, useful lives (years) | 14 years |
Property and Equipment, Net (De
Property and Equipment, Net (Depreciation Expense) (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | ||
Jan. 31, 2015 | Jan. 31, 2017 | Jan. 31, 2016 | Dec. 31, 2014 | |
Property and Equipment, Net | ||||
Depreciation expense | $ 4.5 | $ 47.3 | $ 51.3 | $ 37.4 |
Goodwill and Long-Lived Asset40
Goodwill and Long-Lived Assets, Net (Major Asset Classes) (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Jan. 31, 2015 | Oct. 31, 2015 | Jan. 31, 2017 | Jan. 31, 2016 | Dec. 31, 2014 | |
Goodwill and Intangible Assets Disclosure [Line Items] | |||||
Original Cost | $ 447.7 | $ 572.1 | |||
Accumulated Amortization | 132.9 | 131.6 | |||
Impairment charge | $ 177.8 | 177.8 | |||
Net Book Value | 314.8 | $ 262.7 | |||
Approximate percentage decrease in the number of onshore drilling rigs | 75.00% | ||||
Goodwill impairment charge | $ 0 | $ 310.4 | 0 | $ 310.4 | $ 0 |
Impairment of indefinite lived intangibles | 0 | 0 | 0 | ||
Impairment of Long-Lived Assets Held-for-use | $ 0 | $ 0 | $ 0 | ||
Minimum | |||||
Goodwill and Intangible Assets Disclosure [Line Items] | |||||
Useful Life (years) | 5 years | ||||
Maximum | |||||
Goodwill and Intangible Assets Disclosure [Line Items] | |||||
Useful Life (years) | 30 years | ||||
Trade names | |||||
Goodwill and Intangible Assets Disclosure [Line Items] | |||||
Indefinite lived intangible assets | $ 16.9 | 17 | |||
Customer contracts and relationships | |||||
Goodwill and Intangible Assets Disclosure [Line Items] | |||||
Accumulated Amortization | 129.1 | 124.2 | |||
Impairment charge | 167.1 | ||||
Finite lived intangible assets, original cost | 422 | 536.9 | |||
Finite lived intangible assets, net book value | $ 292.9 | 245.6 | |||
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 | |||||
Goodwill and Intangible Assets Disclosure [Line Items] | |||||
Useful Life (years) | 5 years | ||||
Accumulated Amortization | $ 3.6 | 7.4 | |||
Impairment charge | 10.7 | ||||
Finite lived intangible assets, original cost | 5.5 | 18.2 | |||
Finite lived intangible assets, net book value | $ 1.9 | $ 0.1 | |||
Developed Technologies | |||||
Goodwill and Intangible Assets Disclosure [Line Items] | |||||
Useful Life (years) | 15 years | ||||
Accumulated Amortization | $ 0.2 | ||||
Finite lived intangible assets, original cost | 3.3 | ||||
Finite lived intangible assets, net book value | $ 3.1 |
Goodwill and Long-Lived Asset41
Goodwill and Long-Lived Assets, Net (Goodwill and Amortization Expenses) (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||||
Jan. 31, 2015 | Jan. 31, 2017 | Oct. 31, 2016 | Jul. 31, 2016 | Apr. 30, 2016 | Jan. 31, 2016 | Oct. 31, 2015 | Jul. 31, 2015 | Apr. 30, 2015 | Jan. 31, 2017 | Jan. 31, 2016 | Dec. 31, 2014 | Dec. 31, 2013 | |
Amortization expense of intangible assets | $ 2.8 | $ 19.6 | $ 23.7 | $ 30.5 | |||||||||
Expected amortization expenses in year one | $ 19 | $ 19 | |||||||||||
Expected amortization expenses in year two | 19 | 19 | |||||||||||
Expected amortization expenses in year three | 19 | 19 | |||||||||||
Expected amortization expenses in year four | 19 | 19 | |||||||||||
Expected amortization expenses in year five | 19 | 19 | |||||||||||
Goodwill | 1,286.5 | 996.4 | $ 954.9 | 996.4 | 954.9 | 1,328.7 | |||||||
Revenues | 133 | 373.4 | $ 389 | $ 378.9 | $ 352.8 | 358.2 | $ 365 | $ 412.7 | $ 431.5 | 1,494.1 | 1,567.4 | 1,695.7 | |
Long-lived assets impairment | 0 | 0 | 0 | ||||||||||
Intangible assets impairment | 177.8 | 177.8 | |||||||||||
Property and equipment impairment | $ 152 | ||||||||||||
Accumulated goodwill impairment loss | 601.1 | 601.1 | |||||||||||
Herndon | |||||||||||||
Goodwill | 50.8 | 50.8 | |||||||||||
Aerospace Solutions Group | |||||||||||||
Goodwill | 965.8 | $ 996.4 | $ 952.4 | 996.4 | 952.4 | 986.3 | |||||||
Revenues | $ 93.1 | $ 1,340.9 | $ 1,312.5 | $ 1,310.2 |
Goodwill and Long-lived Asset42
Goodwill and Long-lived Assets, Net (Changes in Carrying Amount of Goodwill) (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Jan. 31, 2015 | Oct. 31, 2015 | Jan. 31, 2017 | Jan. 31, 2016 | Dec. 31, 2014 | |
Goodwill and Long-Lived Assets, Net | |||||
Goodwill, Balance | $ 1,328.7 | $ 954.9 | $ 1,286.5 | ||
Acquisitions | 50.8 | 2.5 | |||
Goodwill, purchase price adjustment | (21.7) | (2.5) | (10.3) | ||
Effect of foreign currency translation | (20.5) | (6.8) | (13.4) | ||
Impairment | 0 | $ (310.4) | 0 | (310.4) | $ 0 |
Goodwill, Balance | $ 1,286.5 | $ 996.4 | $ 954.9 | $ 1,328.7 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | |||
Jan. 31, 2015 | Jan. 31, 2017 | Jan. 31, 2016 | Jan. 31, 2015 | Dec. 31, 2014 | |
Transitional period | 24 months | ||||
Sales | $ 19 | ||||
Allocations for general corporate expenses, including management costs and corporate support services | $ 31.7 | ||||
Former parent | |||||
Cost incurred pursuant to arrangements | $ 8.7 | $ 9.6 | |||
Sales | $ 1.5 | $ 24.1 | $ 19 | $ 16.2 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Millions | Jan. 31, 2017 | Jan. 31, 2016 |
Accrued Liabilities | ||
Accrued salaries, vacation and related benefits | $ 31.6 | $ 28.7 |
Accrued commissions | 8.7 | 6.2 |
Income taxes payable | 10.3 | 11.4 |
Accrued interest | 11.7 | 11.7 |
Other accrued liabilities | 28.8 | 57.3 |
Total accrued liabilities | $ 91.1 | $ 115.3 |
Long-Term Debt (Details)
Long-Term Debt (Details) $ in Millions | 1 Months Ended | 12 Months Ended | ||
Dec. 31, 2014USD ($) | Jan. 31, 2017USD ($)item | Jan. 31, 2016USD ($) | May 19, 2015USD ($) | |
Debt Instrument [Line Items] | ||||
Long-term debt | $ 1,182 | $ 1,179.5 | ||
Long term debt outstanding | 1,200 | |||
Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Amount outstanding | 0 | 0 | ||
Revolving credit facility | $ 750 | |||
Current borrowing capacity | $ 744.5 | |||
Long term debt outstanding | 1,200 | |||
Number of maintenance financial covenants | item | 0 | |||
Outstanding letter of credit amount | $ 5.5 | |||
Senior Unsecured Notes 5.875 Percent Due 2022 | ||||
Debt Instrument [Line Items] | ||||
Senior unsecured notes | $ 1,200 | 1,200 | 1,200 | |
Less unamortized original issue discount and debt issue costs | 18 | 20.5 | ||
Senior unsecured notes net of unamortized original issue discount and debt issue costs | $ 1,182 | $ 1,179.5 | ||
Debt, interest rate | 5.875% | 5.875% | ||
Proceeds from the issue of Notes | 1,172.1 | |||
Amount distributed to former parent from the proceeds | 750 | |||
Proceeds net of distribution to former parent | $ 422.1 |
Long-Term Debt (Maturities) (De
Long-Term Debt (Maturities) (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | ||
Jan. 31, 2015 | Jan. 31, 2017 | Jan. 31, 2016 | Dec. 31, 2014 | |
Long-Term Debt | ||||
Thereafter | $ 1,200 | |||
Total | 1,200 | |||
Interest expense | $ 6.3 | $ 75.9 | $ 77.7 | $ 3.3 |
Commitments, Contingencies an47
Commitments, Contingencies and Off-Balance Sheet Arrangements (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 31, 2017 | Jan. 31, 2016 | Dec. 31, 2014 | |
Total | $ 89.2 | ||
Rent expense | 28.9 | $ 37.7 | $ 26.4 |
2,018 | 10.5 | ||
2,019 | 18.7 | ||
2,020 | 15 | ||
2,021 | 13.3 | ||
2,022 | 11.2 | ||
Thereafter | 20.5 | ||
Real Estate | |||
Total | $ 85.2 |
Income Taxes (Components of Ear
Income Taxes (Components of Earnings Before Income Taxes) (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | ||
Jan. 31, 2015 | Jan. 31, 2017 | Jan. 31, 2016 | Dec. 31, 2014 | |
Tax Indemnity Payable To Former Parent | $ 4.7 | |||
(Loss) earnings before income taxes | ||||
United States | $ 11.3 | 41.3 | $ (624.4) | $ 210.9 |
Foreign | 0.1 | 12.2 | 10.3 | 32.9 |
Earnings (loss) before income taxes | $ 11.4 | 53.5 | $ (614.1) | $ 243.8 |
Other Current Liabilities | ||||
Tax Indemnity Payable To Former Parent | 0.1 | |||
Other Long term Liabilities [Member] | ||||
Tax Indemnity Payable To Former Parent | $ 4.6 |
Income Taxes (Income Tax Expens
Income Taxes (Income Tax Expense) (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | ||
Jan. 31, 2015 | Jan. 31, 2017 | Jan. 31, 2016 | Dec. 31, 2014 | |
Current: | ||||
Federal | $ 3.5 | $ 0.7 | $ 75.4 | |
State | 0.4 | $ 0.3 | (1.5) | 8.5 |
Foreign | 0.8 | (1.3) | 3.8 | 29 |
Total current income tax expense | 4.7 | (1) | 3 | 112.9 |
Deferred: | ||||
Federal | 14.4 | (213.3) | 42.8 | |
State | 1.3 | (17.4) | 3.5 | |
Foreign | (0.4) | (9.4) | (0.6) | (3.5) |
Total deferred income tax expense (benefit) | (0.4) | 6.3 | (231.3) | 42.8 |
Total income tax (benefit) expense | $ 4.3 | $ 5.3 | $ (228.3) | $ 155.7 |
Income Taxes (Reconciliation) (
Income Taxes (Reconciliation) (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | ||
Jan. 31, 2015 | Jan. 31, 2017 | Jan. 31, 2016 | Dec. 31, 2014 | |
Income Taxes | ||||
Statutory U.S. federal income tax rate | 35.00% | |||
Statutory federal income tax (benefit) expense | $ 4 | $ 18.7 | $ (214.9) | $ 85.3 |
U.S. state income taxes | 0.3 | 1.5 | (17.5) | 6 |
Foreign tax rate differential | 0.8 | 0.1 | (0.2) | (3.7) |
Change in unrecognized tax benefits | (7.8) | 0.4 | ||
Change in valuation allowance on foreign interest loss carryforwards | (1.6) | 5.3 | ||
Other, net | (0.8) | 1.3 | 2 | 0.8 |
Non-taxable/non-deductible items | (6.9) | (3.4) | ||
Exit taxes | 67.3 | |||
Total income tax (benefit) expense | $ 4.3 | $ 5.3 | $ (228.3) | $ 155.7 |
Income Taxes (Deferred Tax Asse
Income Taxes (Deferred Tax Assets and Liabilities) (Details) - USD ($) $ in Millions | Jan. 31, 2017 | Jan. 31, 2016 |
Deferred tax assets: | ||
Inventory reserves | $ 24.8 | $ 15.4 |
Accrued liabilities | 12.9 | 15.7 |
Intangible assets | 44.2 | 84.2 |
Net operating loss carryforward | 81.2 | 59.5 |
Inventory capitalization | 14.9 | 10.7 |
Other | 19.9 | 5.2 |
Gross deferred tax assets | 197.9 | 190.7 |
Deferred tax liabilities: | ||
Intangible assets | (12.8) | (16.1) |
Depreciation | (25.3) | (5.5) |
Deferred tax liabilities | (38.1) | (21.6) |
Net deferred tax asset (liability) before valuation allowance | 159.8 | 169.1 |
Valuation allowance | (17.8) | (21.9) |
Net deferred tax asset | $ 142 | $ 147.2 |
Income Taxes (Gross Uncertain T
Income Taxes (Gross Uncertain Tax Positions Reconciliation) (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | ||
Jan. 31, 2015 | Jan. 31, 2018 | Jan. 31, 2017 | Jan. 31, 2016 | |
Unrecognized tax benefit at beginning of period | $ 10.1 | $ 7.2 | $ 9 | $ 9.4 |
Additions for current year tax positions | 4.6 | |||
Additions for prior year tax positions | 1.3 | |||
Decreases for prior year tax positions | (7.6) | |||
Currency fluctuations | (0.7) | (0.1) | (0.4) | |
Unrecognized tax benefit at end of period | 9.4 | 7.2 | 9 | |
Unrecognized tax benefits that would affect effective tax rate, if recognized | $ 9.4 | 4.4 | 9 | |
Valuation allowance | 17.8 | $ 21.9 | ||
Undistributed Earnings of Foreign Subsidiaries | 68.8 | |||
Provision for undistributed earnings of foreign subsidiaries | $ 0 | |||
Deferred charges, amortization period | 15 years | |||
Forecast | ||||
Increase in equity if certain deferred tax assets are realized | $ 0.5 | |||
Other Current Assets | ||||
Deferred charges | $ 0.3 | |||
Other Assets | ||||
Deferred charges | 7.6 | |||
Domestic | ||||
Operating loss carryforward | 148.9 | |||
Foreign | ||||
Operating loss carryforward | 88.1 | |||
Valuation allowance | 66.1 | |||
State and Local | ||||
Operating loss carryforward | $ 97.9 |
Employee Retirement Plans (Deta
Employee Retirement Plans (Details) - Savings and Investment Plan - USD ($) | 1 Months Ended | 12 Months Ended | ||
Jan. 31, 2015 | Jan. 31, 2017 | Jan. 31, 2016 | Dec. 31, 2014 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Employer matching percentage of employee contributions on first level of eligible compensation (as a percent) | 100.00% | |||
Percentage of eligible compensation, first level, matched by employer (as a percent) | 3.00% | |||
Employer match of employee contributions on the second level of eligible compensation (as a percent) | $ 50 | |||
Percentage of eligible compensation, second level, partially matched by employer (as a percent) | 2.00% | |||
Total expense for plans established pursuant to Section 401(k) | $ 400,000 | $ 3,400,000 | $ 3,600,000 | $ 2,800,000 |
Compensation expense | $ 2,500,000 | $ 2,400,000 | $ 100,000 | |
Maximum | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Defined contribution savings and investment plan, employees contribution rate | 100.00% |
Stockholders' Equity (Details)
Stockholders' Equity (Details) $ in Millions | Dec. 16, 2014 | Jan. 31, 2015USD ($)shares | Jan. 31, 2017USD ($)shares | Jan. 31, 2016USD ($)shares | Jan. 31, 2015USD ($)shares | Dec. 31, 2014shares |
Stockholders Equity Note [Line Items] | ||||||
Anti-dilutive securities excluded from determination of diluted earnings per common share | 100,000 | 0 | 0 | 100,000 | ||
Unvested shares, distribution date conversion ratio | 1.8139 | |||||
Restricted Stock | ||||||
Stockholders Equity Note [Line Items] | ||||||
Restricted stock and restricted stock unit grants, vesting period | 4 years | |||||
Share based compensation | $ | $ 0.5 | $ 15.6 | $ 11.4 | $ 3.5 | ||
Unrecognized compensation cost | $ | $ 32.5 | |||||
Restricted stock units granted | 264,200 | 497,800 | ||||
Restricted stock units forfeited | 76,600 | 58,400 | ||||
Outstanding restricted stock units | 559,200 | 768,300 | 827,200 | 559,200 |
Stockholders' Equity (Computati
Stockholders' Equity (Computation of Basic and Diluted Net Earnings per Share) (Details) $ / shares in Units, shares in Millions, $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||||
Jan. 31, 2015USD ($)$ / sharesshares | Jan. 31, 2017USD ($)$ / shares | Oct. 31, 2016USD ($)$ / shares | Jul. 31, 2016USD ($)$ / shares | Apr. 30, 2016USD ($)$ / shares | Jan. 31, 2016USD ($)$ / shares | Oct. 31, 2015USD ($)$ / shares | Jul. 31, 2015USD ($)$ / shares | Apr. 30, 2015USD ($)$ / shares | Jan. 31, 2017USD ($)$ / sharesshares | Jan. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2014USD ($)$ / sharesshares | Dec. 16, 2014 | |
Stockholders' Equity | |||||||||||||
Numerator: net (loss) earnings | $ | $ 7.1 | $ 17.9 | $ 19.8 | $ 8 | $ 2.5 | $ (10.3) | $ (400.8) | $ 7.4 | $ 17.9 | $ 48.2 | $ (385.8) | $ 88.1 | |
Weighted average common shares: | |||||||||||||
Basic weighted average common shares (in millions) | 52.2 | 51.8 | 52.2 | 52.2 | |||||||||
Effect of dilutive securities - Dilutive securities (in millions) | 0.1 | 0.4 | 0.1 | ||||||||||
Diluted weighted average common shares (in millions) | 52.3 | 52.2 | 52.2 | 52.3 | |||||||||
Basic net (loss) earnings per share: | |||||||||||||
Basic net (loss) earnings per share | $ / shares | $ 0.14 | $ 0.35 | $ 0.38 | $ 0.15 | $ 0.05 | $ (0.20) | $ (7.68) | $ 0.14 | $ 0.34 | $ 0.93 | $ (7.39) | $ 1.69 | |
Diluted net (loss) earnings per share: | |||||||||||||
Diluted net (loss) earnings per share | $ / shares | $ 0.14 | $ 0.34 | $ 0.38 | $ 0.15 | $ 0.05 | $ (0.20) | $ (7.68) | $ 0.14 | $ 0.34 | $ 0.92 | $ (7.39) | $ 1.68 | |
Ratio of shares of KLX received for shares of B/E Aerospace | 0.5 |
Stockholders' Equity (Restricte
Stockholders' Equity (Restricted Stock Activity) (Details) - Restricted Stock - $ / shares | 12 Months Ended | ||
Jan. 31, 2017 | Jan. 31, 2016 | Jan. 31, 2015 | |
Shares | |||
Outstanding, beginning of period | 827,200 | 559,200 | |
Shares granted | 264,200 | 497,800 | |
Shares vested | (246,500) | (171,400) | |
Shares forfeited | (76,600) | (58,400) | |
Outstanding, end of period | 768,300 | 827,200 | 559,200 |
Weighted Average Grant Date Fair Value | |||
Outstanding, beginning of period | $ 35.96 | $ 38.09 | |
Shares granted | 41.64 | 33.42 | |
Shares vested | 35.72 | 34.65 | |
Shares forfeited | 35.96 | 38.56 | |
Outstanding, end of period | $ 37.99 | $ 35.96 | $ 38.09 |
Weighted Average Remaining Vesting Period | |||
Weighted Average Remaining Vesting Period | 2 years 5 months 23 days | 3 years 1 month 13 days | 2 years 11 months 19 days |
Stockholders' Equity (Stock Opt
Stockholders' Equity (Stock Option Activity) (Details) - Options | 1 Months Ended | 12 Months Ended | ||
Jan. 31, 2015USD ($)$ / sharesshares | Jan. 31, 2017USD ($)$ / sharesitemshares | Jan. 31, 2016USD ($)$ / sharesshares | Jan. 31, 2015$ / sharesshares | |
Number of Shares | ||||
Unvested time-based stock options outstanding | 298,298 | 596,598 | ||
Outstanding, beginning of period | 894,899 | 894,899 | ||
Granted | ||||
Exercised | ||||
Canceled | ||||
Outstanding, end of period | 894,899 | 894,899 | 894,899 | 894,899 |
Exercisable, end of period | 596,601 | 298,301 | ||
Weighted Average Exercise Price | ||||
Outstanding, beginning of period | $ / shares | $ 39.08 | $ 39.08 | ||
Granted | $ / shares | ||||
Exercised | $ / shares | ||||
Canceled | $ / shares | ||||
Outstanding, end of period | $ / shares | $ 39.08 | 39.08 | 39.08 | $ 39.08 |
Exercisable, end of period | $ / shares | $ 39.08 | $ 39.08 | ||
Weighted Average Remaining Contractual Life (in years) | ||||
Outstanding | 7 years 11 months 16 days | 8 years 11 months 16 days | 9 years 11 months 16 days | |
Exercisable, end of period | 7 years 11 months 16 days | 8 years 11 months 16 days | ||
Aggregate Intrinsic Value | ||||
Outstanding | $ | $ 8,868,400 | $ 205,800 | ||
Exercisable, end of period | $ | $ 5,912,300 | |||
Vesting period | 3 years | |||
Vesting installments | item | 3 | |||
Expiration period | 10 years | |||
Share based compensation | $ | $ 200,000 | $ 3,900,000 | ||
Unrecognized stock-based compensation related to options | $ | $ 7,700,000 | $ 7,500,000 | ||
Compensation costs not yet recognized, weighted-average period of recognition | 10 months 13 days | 1 year 10 months 13 days |
Stockholders' Equity (Weighted
Stockholders' Equity (Weighted Average Assumptions) (Details) - Options | 1 Months Ended |
Jan. 31, 2015$ / shares | |
Weighted Average Assumptions | |
Expected life (in years) | 6 years 6 months |
Volatility | 30.00% |
Risk free interest rate | 1.50% |
Weighted average fair value per option at date of grant | $ 12.99 |
Employee Stock Purchase Plan (D
Employee Stock Purchase Plan (Details) - Employee Stock Purchase Plan - $ / shares | 1 Months Ended | 12 Months Ended | ||
Jan. 31, 2015 | Jan. 31, 2017 | Jan. 31, 2016 | Dec. 31, 2014 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Common stock price (as percentage) | 85.00% | |||
Common stock issued to employees of the company | 0 | 51,000 | 50,000 | 19,000 |
Weighted average price per share (in dollars per share) | $ 31.09 | $ 30.62 | $ 71.40 |
Segment Reporting (Revenues and
Segment Reporting (Revenues and Other Financial Information by Business Segment) (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||||
Jan. 31, 2015 | Jan. 31, 2017 | Oct. 31, 2016 | Jul. 31, 2016 | Apr. 30, 2016 | Jan. 31, 2016 | Oct. 31, 2015 | Jul. 31, 2015 | Apr. 30, 2015 | Jan. 31, 2017 | Jan. 31, 2016 | Dec. 31, 2014 | Dec. 31, 2013 | |
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||||
Revenues | $ 133 | $ 373.4 | $ 389 | $ 378.9 | $ 352.8 | $ 358.2 | $ 365 | $ 412.7 | $ 431.5 | $ 1,494.1 | $ 1,567.4 | $ 1,695.7 | |
Operating earnings | 17.7 | 129.4 | (536.8) | 246.8 | |||||||||
Total assets | 4,224.6 | 3,698.3 | 3,691 | 3,698.3 | 3,691 | 4,280.6 | |||||||
Goodwill | 1,286.5 | 996.4 | 954.9 | 996.4 | 954.9 | 1,328.7 | |||||||
Capital expenditures | 6.2 | 35.5 | 130.5 | 136.8 | |||||||||
Depreciation and amortization | 7.3 | 66.9 | 75 | 68 | |||||||||
Aerospace Solutions Group | |||||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||||
Revenues | 93.1 | 1,340.9 | 1,312.5 | 1,310.2 | |||||||||
Operating earnings | 12.9 | 220.6 | 211.6 | 192 | |||||||||
Total assets | 3,252.2 | 3,471.4 | 3,422.8 | 3,471.4 | 3,422.8 | 3,298.4 | |||||||
Goodwill | 965.8 | 996.4 | 952.4 | 996.4 | 952.4 | 986.3 | |||||||
Capital expenditures | 1.7 | 11 | 30.4 | 17.7 | |||||||||
Depreciation and amortization | 2.4 | 30.4 | 28.1 | 28 | |||||||||
Energy Services Group | |||||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||||
Revenues | 39.9 | 153.2 | 254.9 | 385.5 | |||||||||
Operating earnings | 4.8 | (91.2) | (748.4) | 54.8 | |||||||||
Total assets | 972.4 | 226.9 | 268.2 | 226.9 | 268.2 | 982.2 | |||||||
Goodwill | 320.7 | 2.5 | 2.5 | 342.4 | |||||||||
Capital expenditures | 4.5 | 24.5 | 100.1 | 119.1 | |||||||||
Depreciation and amortization | 4.9 | 36.5 | 46.9 | 40 | |||||||||
Corporate, Non-Segment | |||||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||||
Total assets | $ 451.6 | $ 378.2 | $ 559.5 | $ 378.2 | $ 559.5 | $ 508.4 | $ 508.4 |
Segment Reporting (Revenues a61
Segment Reporting (Revenues and Operating Earnings Based on Originating Location) (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||
Jan. 31, 2015 | Jan. 31, 2017 | Oct. 31, 2016 | Jul. 31, 2016 | Apr. 30, 2016 | Jan. 31, 2016 | Oct. 31, 2015 | Jul. 31, 2015 | Apr. 30, 2015 | Jan. 31, 2017 | Jan. 31, 2016 | Dec. 31, 2014 | |
Segment Reporting Information [Line Items] | ||||||||||||
Revenues | $ 133 | $ 373.4 | $ 389 | $ 378.9 | $ 352.8 | $ 358.2 | $ 365 | $ 412.7 | $ 431.5 | $ 1,494.1 | $ 1,567.4 | $ 1,695.7 |
Operating earnings | 17.7 | 129.4 | (536.8) | 246.8 | ||||||||
Identifiable assets | 4,224.6 | 3,698.3 | 3,691 | 3,698.3 | 3,691 | 4,280.6 | ||||||
Domestic | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Revenues | 124.1 | 1,423.8 | 1,453.4 | 1,505.3 | ||||||||
Operating earnings | 15 | 109.3 | (561) | 195.5 | ||||||||
Identifiable assets | 3,214.1 | 3,182.2 | 3,214.1 | 3,182.2 | ||||||||
Foreign | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Revenues | 8.9 | 70.3 | 114 | 190.4 | ||||||||
Operating earnings | $ 2.7 | 20.1 | 24.2 | $ 51.3 | ||||||||
Identifiable assets | $ 484.2 | $ 508.8 | $ 484.2 | $ 508.8 |
Segment Reporting (Revenues by
Segment Reporting (Revenues by Geographic Area Based on Destination) (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||
Jan. 31, 2015 | Jan. 31, 2017 | Oct. 31, 2016 | Jul. 31, 2016 | Apr. 30, 2016 | Jan. 31, 2016 | Oct. 31, 2015 | Jul. 31, 2015 | Apr. 30, 2015 | Jan. 31, 2017 | Jan. 31, 2016 | Dec. 31, 2014 | |
Segment Reporting, Asset Reconciling Item [Line Items] | ||||||||||||
Revenues | $ 133 | $ 373.4 | $ 389 | $ 378.9 | $ 352.8 | $ 358.2 | $ 365 | $ 412.7 | $ 431.5 | $ 1,494.1 | $ 1,567.4 | $ 1,695.7 |
% of Revenues | 100.00% | 100.00% | 100.00% | 100.00% | ||||||||
U.S. | ||||||||||||
Segment Reporting, Asset Reconciling Item [Line Items] | ||||||||||||
Revenues | $ 90.1 | $ 865.6 | $ 955.3 | $ 1,111.5 | ||||||||
% of Revenues | 67.70% | 57.90% | 61.00% | 65.50% | ||||||||
Europe | ||||||||||||
Segment Reporting, Asset Reconciling Item [Line Items] | ||||||||||||
Revenues | $ 28.3 | $ 387.9 | $ 376.3 | $ 374.2 | ||||||||
% of Revenues | 21.30% | 26.00% | 24.00% | 22.10% | ||||||||
Asia, Pacific Rim, Middle East and other | ||||||||||||
Segment Reporting, Asset Reconciling Item [Line Items] | ||||||||||||
Revenues | $ 14.6 | $ 240.6 | $ 235.8 | $ 210 | ||||||||
% of Revenues | 11.00% | 16.10% | 15.00% | 12.40% | ||||||||
Foreign | ||||||||||||
Segment Reporting, Asset Reconciling Item [Line Items] | ||||||||||||
Revenues | $ 8.9 | $ 70.3 | $ 114 | $ 190.4 | ||||||||
Export revenues from United States to customers in foreign countries | $ 29.6 | $ 511.1 | $ 457.9 | $ 414.3 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Jan. 31, 2015 | Oct. 31, 2015 | Jan. 31, 2017 | Jan. 31, 2016 | Dec. 31, 2014 | |
Asset Impairment Charges [Abstract] | |||||
Property and equipment impairment, net | $ 152 | ||||
Goodwill impairment charge | $ 0 | 310.4 | $ 0 | $ 310.4 | $ 0 |
Intangible assets impairment | 177.8 | 177.8 | |||
Total asset impairment charges | $ 640.2 | 640.2 | |||
Energy Services Group | |||||
Asset Impairment Charges [Abstract] | |||||
Property and equipment impairment, net | 152 | ||||
Goodwill impairment charge | 310.4 | ||||
Intangible assets impairment | 177.8 | ||||
Total asset impairment charges | 640.2 | ||||
Assets, Fair Value Disclosure [Abstract] | |||||
Property and equipment fair value, net | 174.3 | ||||
Total fair value | 174.3 | ||||
Senior Unsecured Notes | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Senior unsecured notes, fair value | $ 1,260.7 | $ 1,136.4 | |||
Senior Unsecured Notes 5.875 Percent Due 2022 | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Debt, interest rate | 5.875% | 5.875% | |||
Revolving Credit Facility | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Amount outstanding | $ 0 | $ 0 |
Selected Quarterly Data (Unau64
Selected Quarterly Data (Unaudited) (Summarized Data) (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||||
Jan. 31, 2015 | Jan. 31, 2017 | Oct. 31, 2016 | Jul. 31, 2016 | Apr. 30, 2016 | Jan. 31, 2016 | Oct. 31, 2015 | Jul. 31, 2015 | Apr. 30, 2015 | Jan. 31, 2017 | Jan. 31, 2016 | Dec. 31, 2014 | Dec. 31, 2013 | |
Accounts Receivable - trade | $ 261.3 | $ 261.1 | $ 252.4 | $ 259.6 | $ 261.3 | $ 259.6 | |||||||
Inventories, net | 1,381.4 | 1,386.9 | 1,293.5 | 1,295.3 | 1,381.4 | 1,295.3 | |||||||
Stockholders' equity | $ 2,601.1 | 2,221.1 | 2,223 | 2,230.4 | 2,202.5 | 2,221.1 | 2,202.5 | $ 2,620.3 | $ 2,798.7 | ||||
Revenues | 133 | 373.4 | $ 389 | 378.9 | 352.8 | 358.2 | $ 365 | $ 412.7 | $ 431.5 | 1,494.1 | 1,567.4 | 1,695.7 | |
Cost of sales | 95.6 | 281.4 | 289 | 286.4 | 269.3 | 284.1 | 279.1 | 315.3 | 323.9 | 1,126.1 | 1,202.4 | 1,194.9 | |
Net earnings (loss) | $ 7.1 | $ 17.9 | $ 19.8 | $ 8 | $ 2.5 | $ (10.3) | $ (400.8) | $ 7.4 | $ 17.9 | $ 48.2 | $ (385.8) | $ 88.1 | |
Basic net earnings per share | $ 0.14 | $ 0.35 | $ 0.38 | $ 0.15 | $ 0.05 | $ (0.20) | $ (7.68) | $ 0.14 | $ 0.34 | $ 0.93 | $ (7.39) | $ 1.69 | |
Diluted net earnings per share | $ 0.14 | $ 0.34 | $ 0.38 | $ 0.15 | $ 0.05 | $ (0.20) | $ (7.68) | $ 0.14 | $ 0.34 | $ 0.92 | $ (7.39) | $ 1.68 | |
Impairment charge | $ 640.2 | $ 640.2 | |||||||||||
Goodwill impairment charge | $ 0 | 310.4 | $ 0 | 310.4 | $ 0 | ||||||||
Intangible assets impairment | 177.8 | $ 177.8 | |||||||||||
Property and equipment impairment | $ 152 | ||||||||||||
Non-recurring costs | $ 32.4 | ||||||||||||
As Reported | |||||||||||||
Accounts Receivable - trade | $ 289 | $ 267.8 | |||||||||||
Inventories, net | 1,367.5 | 1,284 | |||||||||||
Stockholders' equity | 2,228.3 | 2,234 | |||||||||||
Revenues | 391.4 | 368.2 | |||||||||||
Cost of sales | 296.3 | 278.7 | |||||||||||
Net earnings (loss) | $ 9.6 | $ 6.2 | |||||||||||
Basic net earnings per share | $ 0.18 | $ 0.12 | |||||||||||
Diluted net earnings per share | $ 0.18 | $ 0.12 | |||||||||||
Adjustment | Revision of Claims Related to Contract Termination, Prior Period | |||||||||||||
Revenues | $ (12.1) | ||||||||||||
Cost of sales | (6.6) | ||||||||||||
Net earnings (loss) | $ (3.4) |
Valuation and Qualifying Acco65
Valuation and Qualifying Accounts (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | ||
Jan. 31, 2015 | Jan. 31, 2017 | Jan. 31, 2016 | Dec. 31, 2014 | |
Allowance for doubtful accounts | ||||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||||
Balance At Beginning Of Period | $ 8.1 | $ 11.3 | $ 8 | $ 6 |
Expenses | 0.1 | 4 | 4.1 | 12.4 |
Other | 0.2 | |||
Write- Offs/ Disposals | 0.2 | 1.8 | 0.8 | 10.5 |
Balance At End Of Period | 8 | 13.5 | 11.3 | 8.1 |
Reserve for obsolete inventories | ||||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||||
Balance At Beginning Of Period | 33 | 40.4 | 33.5 | 30.3 |
Expenses | 0.7 | 20.7 | 7.7 | 4.6 |
Write- Offs/ Disposals | 0.2 | 1.5 | 0.8 | 1.9 |
Balance At End Of Period | 33.5 | 59.6 | 40.4 | 33 |
Deferred tax asset valuation allowance | ||||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||||
Balance At Beginning Of Period | 24.8 | 21.9 | 24.8 | 12.8 |
Other | (1.6) | 5.3 | 12 | |
Write- Offs/ Disposals | (2.5) | (8.2) | ||
Balance At End Of Period | $ 24.8 | $ 17.8 | $ 21.9 | $ 24.8 |