Wesco Aircraft Holdings Reports Results for Fiscal Third Quarter 2014

Wesco Aircraft Holdings, Inc. (“Wesco Aircraft” or the “Company”) (WAIR), a leading provider of comprehensive supply chain management services to the global aerospace industry, today 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.