News Column

Wesco Aircraft Holdings Reports Results for Fiscal Third Quarter 2014

August 20, 2014



By a News Reporter-Staff News Editor at Defense & Aerospace Week -- Wesco Aircraft Holdings, Inc. ("Wesco Aircraft" or the "Company") (NYSE: WAIR), a leading provider of comprehensive supply chain management services to the global aerospace industry, announced results for its fiscal third quarter ended June 30, 2014. Highlights Revenue for the quarter of $395.6 million, up 72% compared to the prior year period with approximately 6% organic growth when compared to the prior year period and approximately 11% organic growth for the year to date

Net Income of $28.8 million, with Diluted Earnings Per Share ("EPS") of $0.29

Adjusted Net Income of $33.0 million, up 12% compared to the prior year, with Adjusted Diluted EPS of $0.34

Revised full year fiscal 2014 guidance for revenue expected to be in the range of $1.350 billion to $1.380 billion and revised full year guidance for Diluted EPS expected to be in the range of $1.12 to $1.15 per share; Adjusted Diluted EPS expected to be in the range of $1.30 to $1.33 per share Fiscal 2014 Third Quarter Results Revenue for the third fiscal quarter was $395.6 million, an increase of 72% compared to $230.2 million in the prior year period. External sales in the North America and Rest of World segments each increased by 72%, driven mainly by the Haas acquisition, growth across the Company's customer base due to the continued ramp-up of recently awarded contracts, scope expansion on existing contracts, and new contract wins. Overall, Wesco Aircraft's organic sales increased approximately 6% compared to the prior year period with the remaining approximately 66% contributed from Haas. In the third quarter, Ad Hoc and Contract sales as a percentage of net sales represented 25% and 75%, respectively, compared to 40% and 60%, respectively, for the same period last year.

Net Income for the third quarter was $28.8 million, resulting in Diluted EPS of $0.29. This compares to Net Income of $27.0 million or $0.28 in Diluted EPS in the prior year period. Adjusted Net Income was $33.0 million and Adjusted Diluted EPS was $0.34 in the third quarter of fiscal 2014 as compared to $29.5 million or $0.31 per share in the prior year period. The increase in Diluted EPS and Adjusted Diluted EPS were primarily driven by the significant increase in sales, partially offset by lower operating margins and higher interest expense as a result of the Haas acquisition financing. Adjusted EBITDA for the period was $63.2 million as compared to $49.7 million for the same period in 2013.

Wesco Aircraft's Chief Executive Officer and Chairman Randy Snyder said, "While the past quarter's results did not meet our expectations, our fiscal year to date continues to be strong relative to last year. I am pleased that we have made significant progress with the integration of Haas in this most recent quarter. The active collaboration between the legacy Wesco Aircraft and Haas teams continues at a fast pace. We are beginning to see the results of our work and we believe that we will achieve great results from our efforts in the future. Our North American and Rest of World segments have each experienced steady growth and we see exciting opportunities in the near future. We look to achieve our Wesco Aircraft and Haas revenue synergies from going to market together through the combination of our product and service offerings. With strong OEM build rates and steady progress in expanding our MRO business, we believe we will finish our the year on a positive note." First Nine Months of Fiscal 2014 Revenue for the first nine months of fiscal 2014 was $947.7 million, an increase of 42% compared to $667.3 million in the prior year period. On a year-to-date basis, Ad Hoc and Contract sales as a percentage of net sales represented 30% and 70%, respectively, compared to 40% and 60%, respectively, for the first nine months of fiscal 2013.

Net Income for the period was $77.5 million and Adjusted Net Income was $90.9 million. Net Income resulted in Diluted EPS of $0.79 and Adjusted Net Income resulted in Adjusted Diluted EPS of $0.93. This compared to Net Income of $74.8 million or Diluted EPS of $0.78 and Adjusted Net Income of $84.8 million or Adjusted Diluted EPS of $0.89 in the prior year period. Adjusted EBITDA on a fiscal year-to-date basis was $162.1 million as compared to $144.9 million in 2013. Financial Outlook Based on performance for the fiscal year to date, Wesco Aircraft is revising its guidance for fiscal 2014 full year revenues expected to be between $1.350 billion and $1.380 billion, representing growth of approximately 50% to 53% over fiscal 2013 results. Diluted EPS are now expected in the range of $1.12 to $1.15. Adjusted Diluted EPS are now expected in the range of $1.30 to $1.33, an increase of 7% to 9% compared to the prior year. The adjustments to full year guidance for Diluted and Adjusted Diluted EPS are driven primarily by current market margin activity. Conference Call Information Wesco Aircraft will also hold a conference call to discuss its third quarter results at 5:00 p.m. EDT on August 4, 2014. The conference call can be accessed by dialing 888-771-4371 (domestic) or 847-585-4405 (international). Participants will need to enter passcode 37774657.

The conference call will be simultaneously broadcast on Wesco Aircraft's Investor Relations website (http://ir.wescoair.com).

Following the live webcast, a replay will be available on the Company's website for one year. A telephonic replay will also be available approximately one hour after the conference call and may be accessed by dialing 888-843-7419 (domestic) or 630-652-3042 (international) and entering passcode 37774657. The telephonic replay will be available until August 11, 2014 at 11:59 p.m. PT. About Wesco Aircraft Wesco Aircraft is one of the world's largest distributors and providers of comprehensive supply chain management services to the global aerospace industry. The Company's services range from traditional distribution to the management of supplier relationships, quality assurance, kitting, just-in-time delivery and point-of-use inventory management. The Company believes it offers one of the world's broadest inventory of aerospace products, comprised of more than 575,000 active stock keeping units, including hardware, bearings, tools, electronic components, machined parts and chemicals. Wesco Aircraft has more than 2,700 employees across 81 locations in 19 countries.

To learn more about Wesco Aircraft, visit our website at www.wescoair.com. Follow Wesco Aircraft on LinkedIn at https://www.linkedin.com/company/wesco-aircraft-corp. Non-GAAP Financial Information "Adjusted Net Income" represents Net Income before: (i) amortization of intangible assets, (ii) amortization or write-off of deferred financing costs and original issue discount, (iii) unusual or non-recurring items and (iv) the tax effect of items (i) through (iii) above calculated using an assumed effective tax rate.

"Adjusted Basic EPS" represents Basic EPS calculated using Adjusted Net Income as opposed to Net Income.

"Adjusted Diluted EPS" represents Diluted EPS calculated using Adjusted Net Income as opposed to Net Income.

"Adjusted EBITDA" represents Net Income before: (i) income tax provision, (ii) net interest expense, (iii) depreciation and amortization and (iv) unusual or non-recurring items.

Keywords for this news article include: Aerospace, Wesco Aircraft Holdings Inc.

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Source: Defense & Aerospace Week


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