Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Mar. 31, 2019 | Apr. 25, 2019 | |
Document and Entity Information | ||
Entity Registrant Name | Wesco Aircraft Holdings, Inc | |
Entity Central Index Key | 0001378718 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --09-30 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 99,743,379 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Smaller Reporting Company | false | |
Emerging Growth Company | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2019 | Sep. 30, 2018 |
Current assets | ||
Cash and cash equivalents | $ 32,726 | $ 46,222 |
Accounts receivable, net of allowance for doubtful accounts of $2,854 and $2,877 at March 31, 2019 and September 30, 2018, respectively | 316,747 | 283,775 |
Inventories | 890,051 | 884,212 |
Prepaid expenses and other current assets | 18,591 | 15,291 |
Income taxes receivable | 3,380 | 2,017 |
Total current assets | 1,261,495 | 1,231,517 |
Property and equipment, net | 46,695 | 44,205 |
Deferred debt issuance costs, net | 2,174 | 2,827 |
Goodwill | 266,644 | 266,644 |
Intangible assets, net | 155,973 | 163,438 |
Deferred tax assets | 67,089 | 65,135 |
Other assets | 17,445 | 15,710 |
Total assets | 1,817,515 | 1,789,476 |
Current liabilities | ||
Accounts payable | 180,699 | 180,494 |
Accrued expenses and other current liabilities | 40,937 | 42,767 |
Income taxes payable | 7,227 | 2,295 |
Capital lease obligations, current portion | 2,109 | 2,205 |
Short-term borrowings and current portion of long-term debt | 87,000 | 74,000 |
Total current liabilities | 317,972 | 301,761 |
Capital lease obligations, less current portion | 1,564 | 2,329 |
Long-term debt, less current portion | 763,734 | 771,777 |
Deferred income taxes | 3,505 | 2,803 |
Other liabilities | 19,557 | 18,337 |
Total liabilities | 1,106,332 | 1,097,007 |
Commitments and contingencies | ||
Stockholders’ equity | ||
Preferred stock, $0.001 par value per share: 50,000,000 shares authorized; no shares issued and outstanding | 0 | 0 |
Common stock, $0.001 par value, 950,000,000 shares authorized, 99,743,379 and 99,557,885 shares issued and outstanding at March 31, 2019 and September 30, 2018, respectively | 100 | 99 |
Additional paid-in capital | 449,173 | 444,531 |
Accumulated other comprehensive loss | (87,212) | (82,980) |
Retained earnings | 349,122 | 330,819 |
Total stockholders’ equity | 711,183 | 692,469 |
Total liabilities and stockholders’ equity | $ 1,817,515 | $ 1,789,476 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2019 | Sep. 30, 2018 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts (in dollars) | $ 2,854 | $ 2,877 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 950,000,000 | 950,000,000 |
Common stock, shares issued (in shares) | 99,743,379 | 99,557,885 |
Common stock, shares outstanding (in shares) | 99,743,379 | 99,557,885 |
Consolidated Statements of Earn
Consolidated Statements of Earnings and Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Income Statement [Abstract] | ||||
Net sales | $ 426,474 | $ 390,183 | $ 821,785 | $ 753,274 |
Cost of sales | 317,727 | 284,448 | 614,696 | 553,115 |
Gross profit | 108,747 | 105,735 | 207,089 | 200,159 |
Selling, general and administrative expenses | 78,908 | 72,539 | 155,171 | 142,391 |
Income from operations | 29,839 | 33,196 | 51,918 | 57,768 |
Interest expense, net | (12,388) | (11,965) | (25,302) | (23,803) |
Other (expense) income, net | (314) | (108) | (531) | 152 |
Income before income taxes | 17,137 | 21,123 | 26,085 | 34,117 |
Provision for income taxes | (5,127) | (6,123) | (7,782) | (19,491) |
Net income | 12,010 | 15,000 | 18,303 | 14,626 |
Other comprehensive (loss) income, net of income taxes | (1,263) | 2,850 | (4,232) | 4,115 |
Comprehensive income | $ 10,747 | $ 17,850 | $ 14,071 | $ 18,741 |
Net income per share: | ||||
Basic (in dollars per share) | $ 0.12 | $ 0.15 | $ 0.18 | $ 0.15 |
Diluted (in dollars per share) | $ 0.12 | $ 0.15 | $ 0.18 | $ 0.15 |
Weighted average shares outstanding: | ||||
Basic (in shares) | 99,626,736 | 99,136,015 | 99,555,589 | 99,116,250 |
Dilutive (in shares) | 99,950,811 | 99,519,925 | 99,930,999 | 99,441,385 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash flows from operating activities | ||
Net income | $ 18,303 | $ 14,626 |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Depreciation and amortization | 14,165 | 14,541 |
Amortization of deferred debt issuance costs | 2,610 | 2,911 |
Bad debt and sales return reserve | 208 | 519 |
Stock-based compensation expense | 5,058 | 3,688 |
Net inventory provision | 2,521 | 4,820 |
Deferred income taxes | (14) | 581 |
Other non-cash items | 289 | 367 |
Subtotal | 43,140 | 42,053 |
Changes in assets and liabilities: | ||
Accounts receivable | (34,129) | (30,962) |
Income taxes receivable | (1,369) | 1,091 |
Inventories | (8,788) | (66,582) |
Prepaid expenses and other assets | (6,599) | (2,500) |
Accounts payable | (187) | 9,682 |
Accrued expenses and other liabilities | (3,406) | 6,034 |
Income taxes payable | 4,937 | 5,275 |
Net cash used in operating activities | (6,401) | (35,909) |
Cash flows from investing activities | ||
Purchase of property and equipment | (7,996) | (2,909) |
Net cash used in investing activities | (7,996) | (2,909) |
Cash flows from financing activities | ||
Proceeds from short-term borrowings | 47,000 | 60,000 |
Repayment of short-term borrowings | (34,000) | (34,000) |
Repayment of long-term debt | (10,000) | (10,000) |
Debt issuance costs | 0 | (1,900) |
Repayment of capital lease obligations | (1,444) | (1,346) |
Net proceeds from exercise of stock options | 12 | 34 |
Settlement on restricted stock tax withholding | (428) | (100) |
Net cash provided by financing activities | 1,140 | 12,688 |
Effect of foreign currency exchange rate on cash and cash equivalents | (239) | 428 |
Net decrease in cash and cash equivalents | (13,496) | (25,702) |
Cash and cash equivalents, beginning of period | 46,222 | 61,625 |
Cash and cash equivalents, end of period | $ 32,726 | $ 35,923 |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 6 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Significant Accounting Policies | Basis of Presentation and Significant Accounting Policies The accompanying unaudited consolidated financial statements include the accounts of Wesco Aircraft Holdings, Inc. and its wholly owned subsidiaries (referred to herein as Wesco or the Company) prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) and with the instructions to Form 10-Q and Article 10 of Regulation S-X. The financial statements presented herein have not been audited by an independent registered public accounting firm but include all material adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary for fair statement of the financial position, results of operations and cash flows for the period. However, these results are not necessarily indicative of results for any other interim period or for the full fiscal year. The preparation of financial statements in conformity with GAAP requires us to make certain estimates and assumptions for the reporting periods covered by the financial statements. These estimates and assumptions affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent liabilities. Actual amounts could differ from these estimates. Our financial statements have been prepared under the assumption that our Company will continue as a going concern. Certain information and footnote disclosures normally included in financial statements in accordance with GAAP have been omitted pursuant to the rules of the Securities and Exchange Commission (the SEC). The accompanying consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended September 30, 2018 filed with the SEC on November 16, 2018 (the 2018 Form 10-K). Except for the changes below, no material changes have been made to our significant accounting policies disclosed in Note 2 of the Notes to the Consolidated Financial Statements in Part II, Item 8 of the 2018 Form 10-K. Revenue from Contracts with Customers Pursuant to Accounting Standard Codification Topic 606, Revenue from Contracts with Customers (ASC 606) , we recognize revenue when our customer obtains control of promised goods or services, in an amount that reflects the consideration that we expect to receive in exchange for those goods or services. To determine revenue recognition for arrangements that we determine are within the scope of ASC 606, we perform the following five steps: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when (or as) the entity satisfies a performance obligation. We recognize revenue in the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. Typically, our master purchase contracts with our customer run for three to five years without minimum purchase requirements annually or for over the term of the contract, and contain termination for convenience provisions, which generally allow for our customers to terminate their contracts on short notice without meaningful penalties. Pursuant to ASC 606, we have concluded that for revenue recognition purposes, our customers’ purchase orders (P.O.'s) are considered contracts, which are supplemented by certain contract terms such as service fee arrangements and variable price considerations in our master purchase contracts. The P.O.'s are typically fulfilled within one year. Our Contracts for hardware and chemical product sales have a single performance obligation. Revenues from these Contract sales are recognized when the customer obtains control of our products, which occurs at a point in time, typically upon delivery in accordance with the terms of the sales contract. Services under our hardware just-in-time (JIT) arrangements are provided by us contemporaneously with the delivery of these products and are not separately identifiable from the products, and as such, once the products are delivered, we do not have a post-delivery obligation to provide services to the customer. Accordingly, 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 products. Payment is generally due within 30 to 90 days of delivery; therefore, our contracts do not create significant financing components. Warranties are limited to replacement of goods that are defective upon delivery. The Company does not provide service-type warranties. Our chemical management services (CMS) contracts include the sale of chemical products as well as services such as product procurement, receiving and quality inspection, warehouse and inventory management, and waste disposal. The CMS contracts represent an end-to-end integrated chemical management solution. While each of the products and various services benefits the customer, we determined that they are a single output in the context of the CMS contract due to the significant commercial integration of these products and services. Therefore, chemical products and services provided under a CMS contract represent a single performance obligation and revenue is recognized over time for these contracts using product deliveries as our output measure of progress under the CMS contract to depict the transfer of control to the customer. We report revenue on a gross or net basis in our presentation of net sales and costs of sales based on management’s assessment of whether we act as a principal or agent in the transaction. If we are the principal in the transaction and have control of the specified good or service before that good or service is transferred to a customer, the transactions are recorded as gross in the consolidated statements of comprehensive income. If we do not act as a principal in the transaction, the transactions are recorded on a net basis in the consolidated statements of earnings and comprehensive income. This assessment requires significant judgment to evaluate indicators of control within our contracts. We base our judgment on various indicators that include whether we take possession of the products, whether we are responsible for their acceptability, whether we have inventory risk, and whether we have discretion in establishing the price paid by the customer. The majority of our revenue is recorded on a gross basis with the exception of certain gas, energy and chemical management service contracts that are recorded on a net basis. With respect to variable consideration, we apply judgment in estimating its impact to determine the amount of revenue to recognize. Sales rebates and profit-sharing arrangements are accounted for as a reduction to gross sales and recorded based upon estimates at the time products are sold. These estimates are based upon historical experience for similar programs and products. We review such rebates and profit-sharing arrangements on an ongoing basis and accruals are adjusted, if necessary, as additional information becomes available. We provide allowances for credits and returns based on historic experience and adjust such allowances as considered necessary. To date, such provisions have been within the range of our expectations and the allowance established. Returns and refunds are allowed only for materials that are defective or not compliant with the customer’s order. Sales tax collected from customers is excluded from net sales in the consolidated statements of comprehensive income. We have determined that sales backlog is not a relevant measure of our business. Few, if any, of our contracts include minimum purchase requirements, annually or over the term of the agreement. As a result, we have no material sales backlog. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 6 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Changes to GAAP are established by the Financial Accounting Standards Board (FASB) in the form of Accounting Standards Updates (ASUs) to the FASB’s Accounting Standards Codification (ASC). We consider the applicability and impact of all ASUs. ASUs not listed below were assessed and determined to be either not applicable or are expected to have minimal impact on our consolidated financial position and results of operations. New Accounting Standards Issued In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment , which simplifies the current requirements for testing goodwill for impairment by eliminating the second step of the two-step impairment test to measure the amount of an impairment loss. ASU 2017-04 is effective for the Company in fiscal year 2021, including interim reporting periods within that reporting period, and all annual and interim reporting periods thereafter. Early adoption is permitted. We are currently evaluating the impact of this guidance on our consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 is amended by ASU 2018-01, ASU2018-10, ASU 2018-11, ASU 2018-20 and ASU 2019-01, which FASB issued in January 2018, July 2018, July 2018, December 2018 and March 2019, respectively (collectively, the amended ASU 2016-02). The amended ASU 2016-02 requires lessees to recognize on the balance sheet a right-of-use asset, representing its right to use the underlying asset for the lease term, and a lease liability for all leases with terms greater than 12 months. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee have not significantly changed from current GAAP. The amended ASU 2016-02 retains a distinction between finance leases (i.e. capital leases under current GAAP) and operating leases. The classification criteria for distinguishing between finance leases and operating leases will be substantially similar to the classification criteria for distinguishing between capital leases and operating leases under current GAAP. The amended ASU 2016-02 also requires qualitative and quantitative disclosures designed to assess the amount, timing, and uncertainty of cash flows arising from leases. A modified retrospective transition approach is permitted to be used when an entity adopts the amended ASU 2016-02, which includes a number of optional practical expedients that entities may elect to apply. The amended ASU 2016-02 is effective for the Company in fiscal year 2020 and interim periods therein, with early application permitted. We are currently evaluating the impact of this guidance on our consolidated financial statements. We have compiled our worldwide lease population, selected a lease accounting software vendor, and are in the process of evaluating the completeness of our lease population. The adoption of the amended ASU 2016-02 is expected to result in material increases to our balance sheet for the recognition of right-of-use assets and lease liabilities. As of September 30, 2018, total future minimum payments under our operating leases amounted to $50.8 million . Adopted Accounting Standards On October 1, 2018, we adopted ASU 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, which affects the accounting for equity investments, financial liabilities under the fair value option and the presentation and disclosure requirements of financial instruments. The adoption of ASU 2016-01 did not have a material impact on our consolidated financial statements. On October 1, 2018, we adopted ASU 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting, which specifies the modification accounting applicable to any entity that changes the terms or conditions of a share-based payment award. The adoption of ASU 2017-09 did not have a material impact on our consolidated financial statements. Revenue from Contracts with Customers In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). ASU 2014-09 is amended by ASU 2015-14, ASU 2016-08, ASU 2016-10, ASU 2016-11, ASU 2016-12, ASU 2016-20, ASU 2017-10, ASU 2017-13 and ASU 2017-14, which the FASB issued in August 2015, March 2016, April 2016, May 2016, May 2016, December 2016, May 2017, September 2017 and November 2017, respectively (collectively, the amended ASU 2014-09). The amended ASU 2014-09 provides a single comprehensive model for the recognition of revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. It requires an entity to recognize revenue when the entity transfers 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. The amended ASU 2014-09 creates a five-step model that requires entities to exercise judgment when considering the terms of contract(s), which includes (1) identifying the contract(s) with the customer, (2) identifying the separate performance obligations in the contract, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied. The amended ASU 2014-09 requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including qualitative and quantitative information about contracts with customers, significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. Effective October 1, 2018, we adopted the amended ASU 2014-09 (ASC 606) using the modified retrospective method of adoption, which resulted in no changes to our opening consolidated balance sheet at the beginning of October 1, 2018. Our initial and incremental contract acquisition costs including sign up commissions and set up costs, which are required to be capitalized under ASC 606, are insignificant and expensed as incurred. Our revenues recognized under ASC 606 for the three and six months ended March 31, 2019 were not materially different from what would have been recognized under the previous revenue standard, ASC 605, that is superseded. Prior period consolidated statements of earnings and comprehensive income remain unchanged. We have designed and implemented internal controls, policies and processes to comply with ASC 606 . The additional disclosures required by ASC 606 are included in Note 1 and Note 9. |
Inventory
Inventory | 6 Months Ended |
Mar. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Inventory | Inventory Our inventory is comprised solely of finished goods. We record provisions to write down excess and obsolete (E&O) inventory to estimated realizable value. We continually assess and refine our methodology for evaluating E&O inventory based on current facts and circumstances. Our hardware inventory E&O assessment requires the use of subjective judgments and estimates including the forecasted demand for each part. The forecasted demand considers a number of factors, including historical sales trends, current and forecasted customer demand, including customer liability provisions based on selected contractual rights, consideration of available sales channels and the time horizon over which we expect the hardware part to be sold. During the three months ended March 31, 2019 and 2018 , net adjustments to cost of sales related to E&O inventory related activities were $(2.5) million and $0.4 million , respectively. The net adjustments reflect a combination of additional expense for E&O related provisions ( $3.7 million and $5.6 million , respectively) offset by sales and disposals ( $6.2 million and $5.2 million , respectively) of inventory for which E&O provision was provided previously through expense recognized in prior periods. During the six months ended March 31, 2019 and 2018 , charges to cost of sales related to provisions for E&O inventory related expenses were $2.6 million and $4.8 million , respectively. The net adjustments for the six months ended March 31, 2019 and 2018 reflect a combination of additional expense for E&O related provisions ( $13.8 million and $15.2 million , respectively) offset by sales and disposals ( $11.2 million and $10.4 million , respectively) of inventory for which E&O provision was provided previously through expense recognized in prior periods. We believe that these amounts appropriately write-down E&O inventory to its net realizable value. |
Goodwill
Goodwill | 6 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill As of March 31, 2019 , goodwill consists of the following (in thousands): Americas EMEA APAC Total Goodwill as of September 30, 2018, gross $ 773,384 $ 51,190 $ 16,955 $ 841,529 Accumulated impairment (569,201 ) — (5,684 ) (574,885 ) Goodwill as of September 30, 2018, net 204,183 51,190 11,271 266,644 Changes during the period — — — — Goodwill as of March 31, 2019, gross 773,384 51,190 16,955 841,529 Accumulated impairment (569,201 ) — (5,684 ) (574,885 ) Goodwill as of March 31, 2019, net $ 204,183 $ 51,190 $ 11,271 $ 266,644 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 6 Months Ended |
Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Derivative Financial Instruments Our primary objective in using financial derivatives is to reduce the volatility of earnings and cash flows associated with fluctuations in foreign exchange rates and changes in interest rates. Our use of financial derivatives exposes us to credit risk to the extent that associated counter-parties may be unable to meet the terms of the derivatives. We, however, seek to mitigate such risks by limiting our counter-parties to major financial institutions. In addition, the potential risk of loss with any one counter-party resulting from this type of credit risk is monitored. Management does not expect material losses as a result of defaults by counter-parties. Cash Flow Hedges of Interest Rate Risk Our objectives in using interest rate derivatives are to add stability to interest expense and to manage our exposure to interest rate movements. To accomplish these objectives, we primarily use interest rate swaps as part of our interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for our making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. We have three interest rate swap agreements outstanding, which we have designated as cash flow hedges, in order to reduce our exposure to variability in cash flows related to interest payments on a portion of our outstanding debt. The first interest rate swap agreement (the "First Swap Agreement") has an amortizing notional amount, which was $225.0 million on March 31, 2019 , and matures on September 30, 2019, giving us the contractual right to pay a fixed interest rate of 2.2625% plus the applicable margin under the term loan B facility (as defined in Note 6 below; see Note 6 for the applicable margin). The remaining two interest rate swap agreements (the “Remaining Swap Agreements”), entered into on May 14, 2018, have variable notional amounts which initially will increase in amount approximately equal to amortization of the notional amount of the First Swap Agreement and then amortize thereafter. The Remaining Swap Agreements totaled $185.8 million on March 31, 2019 , and mature on February 26, 2021, giving us the contractual right to pay a fixed interest rate of 2.79% plus the applicable margin under the term loan B facility (as defined in Note 6 below; see Note 6 for the applicable margin). The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income (loss) (AOCI) and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During the six months ended March 31, 2019 , such derivatives were used to hedge the variable cash flows associated with existing variable-rate debt. No portion of our interest rate swap agreements is excluded from the assessment of hedge effectiveness. Amounts reported in AOCI related to derivatives and the related deferred tax are reclassified to interest expense as interest payments are made on our variable-rate debt. As of March 31, 2019 , we expect to reclassify $0.9 million from accumulated other comprehensive loss and the related deferred tax to earnings as an increase to interest expense over the next 12 months when the underlying hedged item impacts earnings. Non-Designated Derivatives From time to time, we enter into foreign currency forward contracts to partially reduce our exposure to foreign currency fluctuations for a subsidiary's net monetary assets, which are denominated in a foreign currency. The derivatives are not designated as a hedging instrument. The change in their fair value is recognized as periodic gain or loss in the other income, net line of our consolidated statements of earnings and comprehensive income. We did not have foreign currency forward contracts as of March 31, 2019 and September 30, 2018 . The following table summarizes the notional principal amounts at March 31, 2019 , and September 30, 2018 of our outstanding interest rate swap agreements discussed above (in thousands). Derivative Notional March 31, 2019 September 30, 2018 Instruments designated as accounting hedges: Interest rate swap contracts $ 410,800 $ 435,800 The following table provides the location and fair value amounts of our financial instruments, which are reported in our consolidated balance sheets as of March 31, 2019 and September 30, 2018 (in thousands). Fair Value Balance Sheet Locations March 31, 2019 September 30, 2018 Instruments designated as accounting hedge: Interest rate swap contracts Other current assets $ 327 $ 1,045 Interest rate swap contracts Other assets — 1,051 Interest rate swap contracts Accrued expenses and other current liabilities 1,206 289 Interest rate swap contracts Other liabilities 1,920 — The following table provides the (gain) losses of our cash flow hedging instruments (net of income tax benefit), which were transferred from AOCI to interest expense on our consolidated statements of earnings and comprehensive income during the three and six months ended March 31, 2019 and 2018 (in thousands). Location in Consolidated Statements of Earnings and Comprehensive Income Three Months Ended Six Months Ended Cash Flow Hedge 2019 2018 2019 2018 Interest rate swap contracts Interest (income) expense, net $ (152 ) $ 304 $ (70 ) $ 861 Total interest expense, net presented in the consolidated statements of earnings and comprehensive income in which the above effects of cash flow hedges are recorded $ 12,388 $ 11,965 $ 25,302 $ 23,803 The following table provides the effective portion of the amount of (loss) gain recognized in other comprehensive income (net of income taxes) for the three and six months ended March 31, 2019 and 2018 (in thousands). Three Months Ended Six Months Ended Cash Flow Hedge 2019 2018 2019 2018 Interest rate swap contracts $ (1,088 ) $ 1,461 $ (3,282 ) $ 2,832 The following table provides a summary of changes to our AOCI related to our cash flow hedging instrument (net of income taxes) during the three and six months ended March 31, 2019 (in thousands). AOCI - Unrealized Gain (Loss) on Hedging Instruments Three Months Ended March 31, 2019 Six Months Ended March 31, 2019 Balance at beginning of period $ (737 ) $ 1,375 Change in fair value of hedging instruments (1,088 ) (3,282 ) Amounts reclassified to earnings (152 ) (70 ) Net current period other comprehensive loss (1,240 ) (3,352 ) Balance at end of period $ (1,977 ) $ (1,977 ) Other Financial Instruments Our financial instruments consist of cash and cash equivalents, accounts receivable and payable, accrued expenses and other current liabilities, and a credit facility including two term loans and a revolving line of credit. The carrying amounts of these instruments approximate fair value because of their short-term duration. The fair value of interest rate swap agreements is determined using pricing models that use observable market inputs as of the balance sheet date, a Level 2 measurement (as defined below). The fair value of the long-term debt instruments is determined using current applicable rates for similar instruments as of the balance sheet date, a Level 2 measurement (as defined below). The principal amounts and fair values of the debt instruments and interest rate swap agreements were as follows (in thousands): March 31, 2019 September 30, 2018 Principal Amount Fair Value Principal Amount Fair Value Term loan A facility $ 350,000 $ 346,325 $ 360,000 $ 357,840 Term loan B facility 440,562 432,632 440,562 432,192 Revolving facility 67,000 67,000 54,000 54,000 Interest rate swap contract liability (assets), net 2,799 2,799 (1,807 ) (1,807 ) Fair Value Measurement Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To determine fair value, we primarily utilize reported market transactions and discounted cash flow analysis. We use a three-tier fair value hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs. The fair value hierarchy prioritizes the inputs to valuation techniques into three broad levels whereby the highest priority is given to Level 1 inputs and the lowest to Level 3 inputs. The three broad categories are: Level 1: Quoted prices in active markets for identical assets or liabilities. Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. Level 3: Unobservable inputs for the asset or liability. The definition of fair value includes the consideration of nonperformance risk. Nonperformance risk refers to the risk that an obligation (either by a counter-party or us) will not be fulfilled. For financial assets traded in an active market (Level 1), the nonperformance risk is included in the market price. For certain other financial assets and liabilities (Level 2 and 3), our fair value calculations have been adjusted accordingly. There were no transfers between the assets and liabilities under Level 1 and Level 2 during the six months ended March 31, 2019 . The following tables provide the valuation hierarchy classification of assets and liabilities that are carried at fair value and measured on a recurring basis in our consolidated balance sheets as of March 31, 2019 and September 30, 2018 (in thousands). March 31, 2019 Balance Sheet Locations Total Level 1 Level 2 Level 3 Instruments designated as accounting hedge: Interest rate swap contracts Other current assets $ 327 $ — $ 327 $ — Interest rate swap contracts Accrued expenses and other current liabilities 1,206 — 1,206 — Interest rate swap contracts Other liabilities 1,920 — 1,920 — September 30, 2018 Balance Sheet Locations Total Level 1 Level 2 Level 3 Instrument designated as accounting hedge: Interest rate swap contracts Other current assets $ 1,045 $ — $ 1,045 $ — Interest rate swap contracts Other assets 1,051 — 1,051 — Interest rate swap contracts Accrued expenses and other current liabilities 289 — 289 — We use observable market-based inputs to calculate fair value of our interest rate swap agreements and outstanding debt instruments, in which case the measurements are classified within Level 2. If quoted or observable market prices are not available, fair value is based upon internally developed models that use, where possible, current market‑based parameters such as interest rates, yield curves and currency rates. These measurements are classified within Level 3. |
Long-Term Debt
Long-Term Debt | 6 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt Long-term debt consists of the following (in thousands): March 31, 2019 September 30, 2018 Principal Amount Deferred Debt Issuance Costs Carrying Amount Principal Amount Deferred Debt Issuance Costs Carrying Amount Term loan A facility $ 350,000 $ (4,494 ) $ 345,506 $ 360,000 $ (5,842 ) $ 354,158 Term loan B facility 440,562 (2,334 ) 438,228 440,562 (2,943 ) 437,619 Revolving facility 67,000 — 67,000 54,000 — 54,000 857,562 (6,828 ) 850,734 854,562 (8,785 ) 845,777 Less: current portion 87,000 — 87,000 74,000 — 74,000 Non-current portion $ 770,562 $ (6,828 ) $ 763,734 $ 780,562 $ (8,785 ) $ 771,777 Senior Secured Credit Facilities The credit agreement, dated as of December 7, 2012 (as amended, the Credit Agreement), by and among the Company, Wesco Aircraft Hardware Corp. and the lenders and agents party thereto, which governs our senior secured credit facilities, provides for (1) a $400.0 million senior secured term loan A facility (the term loan A facility), (2) a $180.0 million revolving facility (the revolving facility) and (3) a $525.0 million senior secured term loan B facility (the term loan B facility). We refer to the term loan A facility, the revolving facility and the term loan B facility, together, as the “Credit Facilities.” As of March 31, 2019 , our outstanding indebtedness under our Credit Facilities was $857.6 million , which consisted of (1) $350.0 million of indebtedness under the term loan A facility, (2) $67.0 million of indebtedness under the revolving facility, and (3) $440.6 million of indebtedness under the term loan B facility. As of March 31, 2019 , $113.0 million was available for borrowing under the revolving facility to fund our operating and investing activities without breaching any covenants contained in the Credit Agreement. During the six months ended March 31, 2019 , we borrowed $47.0 million under the revolving facility, and made our required quarterly payments of $10.0 million on our term loan A facility and voluntary prepayments totaling $34.0 million on our borrowings under the revolving facility. The interest rate for the term loan A facility is based on our Consolidated Total Leverage Ratio (as such term is defined in the Credit Agreement) as determined in the most recently delivered financial statements, with the respective margins ranging from 2.00% to 3.00% for Eurocurrency loans and 1.00% to 2.00% for ABR loans. The term loan A facility amortizes in equal quarterly installments of 1.25% of the original principal amount of $400.0 million with the balance due on the earlier of (1) 90 days before the maturity of the term loan B facility, and (2) October 4, 2021. As of March 31, 2019 , the interest rate for borrowings under the term loan A facility was 5.50% , which approximated the effective interest rate. The interest rate for the term loan B facility has a margin of 2.50% per annum for Eurocurrency loans (subject to a minimum Eurocurrency rate floor of 0.75% per annum) or 1.50% per annum for ABR loans (subject to a minimum ABR floor of 1.75% per annum). The term loan B facility amortizes in equal quarterly installments of 0.25% of the original principal amount of $525.0 million , with the balance due at maturity on February 28, 2021. As of March 31, 2019 , the interest rate for borrowings under the term loan B facility was 5.00% , which approximated the effective interest rate. We have an interest rate swap agreement relating to this indebtedness, which is described in greater detail in Note 5 above. The interest rate for the revolving facility is based on our Consolidated Total Leverage Ratio as determined in the most recently delivered financial statements, with the respective margins ranging from 2.00% to 3.00% for Eurocurrency loans and 1.00% to 2.00% for ABR loans. The revolving facility expires on the earlier of (1) 90 days before the maturity of the term loan B facility, and (2) October 4, 2021. As of March 31, 2019 , the weighted-average interest rate for borrowings under the revolving facility was 5.50% . Our borrowings under the Credit Facilities are guaranteed by us and all of our direct and indirect, wholly-owned, domestic restricted subsidiaries (subject to certain exceptions) and secured by a first lien on substantially all of our assets and the assets of our guarantor subsidiaries, including capital stock of the subsidiaries (in each case, subject to certain exceptions). The Credit Agreement contains customary negative covenants, including restrictions on our and our restricted subsidiaries’ ability to merge and consolidate with other companies, incur indebtedness, grant liens or security interests on assets, make acquisitions, loans, advances or investments, pay dividends, sell or otherwise transfer assets, optionally prepay or modify terms of any junior indebtedness or enter into transactions with affiliates. Our borrowings under the Credit Facilities are subject to a financial covenant based upon our Consolidated Total Leverage Ratio, with the maximum ratio set at 5.50 for the quarter ending March 31, 2019 . As of March 31, 2019 , we were in compliance with all of the foregoing covenants, and our Consolidated Total Leverage Ratio was 4.27 . The Consolidated Total Leverage Ratio is scheduled to step-down to 5.25 for the quarter ending June 30, 2019; 4.75 for the quarters ending September 30, 2019, December 31, 2019 and March 31, 2020; 4.00 for the quarters ending June 30, 2020, September 30, 2020, December 31, 2020 and March 31, 2021; and 3.00 for the quarter ending June 30, 2021 and thereafter. Based on our current covenants and forecasts, we expect to be in compliance for the one year period after May 2, 2019 . The Credit Agreement also includes an Excess Cash Flow Percentage (as such term is defined in the Credit Agreement), which is currently set at 75% , provided that the Excess Cash Flow Percentage shall be reduced to (1) 50% , if the Consolidated Total Leverage Ratio is less than 4.00 but greater than or equal to 3.00 , (2) 25% , if the Consolidated Total Leverage Ratio is less than 3.00 but greater than or equal to 2.50 , and (3) 0% , if the Consolidated Total Leverage Ratio is less than 2.50 . The calculation is determined annually, and for fiscal year 2018, no excess cash flow payment was required. The following table summarizes the total deferred debt issuance costs for the term loan A facility, the term loan B facility and the revolving facility as of March 31, 2019 and September 30, 2018 (dollars in thousands). The remaining deferred debt issuance costs as of March 31, 2019 will be amortized over their remaining terms. Term Loan A Facility Term Loan B Facility Revolving Facility Total Deferred debt issuance costs as of September 30, 2018 $ 5,842 $ 2,943 $ 2,827 $ 11,612 Amortization of deferred debt issuance costs (1,348 ) (609 ) (653 ) (2,610 ) Deferred debt issuance costs as of March 31, 2019 $ 4,494 $ 2,334 $ 2,174 $ 9,002 UK Line of Credit Our subsidiary, Wesco Aircraft EMEA, Ltd., has a £5.0 million ( $6.5 million based on the March 31, 2019 exchange rate) line of credit that automatically renews annually on October 1 (the UK line of credit). The line of credit bears interest based on the base rate plus an applicable margin of 1.65% . As of March 31, 2019 , the full £5.0 million was available for borrowing under the UK line of credit without breaching any covenants contained in the agreements governing our indebtedness. |
Comprehensive Income
Comprehensive Income | 6 Months Ended |
Mar. 31, 2019 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |
Comprehensive Income | Comprehensive Income Comprehensive income, which is net of income taxes, consists of the following (in thousands): Three Months Ended Six Months Ended 2019 2018 2019 2018 Net income $ 12,010 $ 15,000 $ 18,303 $ 14,626 Foreign currency translation (loss) gain (22 ) 1,389 (879 ) 1,284 Unrealized (loss) gain on cash flow hedging instruments (1,241 ) 1,461 (3,353 ) 2,831 Total comprehensive income $ 10,747 $ 17,850 $ 14,071 $ 18,741 |
Net Income Per Share
Net Income Per Share | 6 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | Net Income Per Share Basic net income per share is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net income per share includes the dilutive effect of both outstanding stock options and restricted stock, if any, calculated using the treasury stock method. Assumed proceeds from in-the-money awards are calculated under the “as-if” method as prescribed by ASC 718, Compensation—Stock Compensation . The following table provides our basic and diluted net income per share for the three and six months ended March 31, 2019 and 2018 (dollars in thousands except share data): Three Months Ended Six Months Ended 2019 2018 2019 2018 Net income $ 12,010 $ 15,000 $ 18,303 $ 14,626 Basic weighted average shares outstanding 99,626,736 99,136,015 99,555,589 99,116,250 Dilutive effect of stock options and restricted stock 324,075 383,910 375,410 325,135 Dilutive weighted average shares outstanding 99,950,811 99,519,925 99,930,999 99,441,385 Basic net income per share $ 0.12 $ 0.15 $ 0.18 $ 0.15 Diluted net income per share $ 0.12 $ 0.15 $ 0.18 $ 0.15 For the three months ended March 31, 2019 and 2018 , 3,171,626 and 2,337,503 shares of common stock equivalents, respectively, were not included in the diluted calculation due to their anti-dilutive effect. For the six months ended March 31, 2019 and 2018 , 3,188,879 and 3,115,284 shares of common stock equivalents, respectively, were not included in the diluted calculation due to their anti-dilutive effect. |
Segment Reporting
Segment Reporting | 6 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting We are organized based on geographical location. We conduct our business through three reportable segments: the Americas, EMEA (Europe, Middle East and Africa) and APAC (Asia Pacific). We evaluate segment performance based primarily on segment income from operations. Each segment reports its results of operations and makes requests for capital expenditures and working capital needs to our chief operating decision-maker (CODM). Our Chief Executive Officer serves as our CODM. The following tables present operating and financial information by business segment (in thousands): Three Months Ended March 31, 2019 Americas EMEA APAC Unallocated Corporate Costs Consolidated Net sales $ 347,301 $ 66,300 $ 12,873 $ — $ 426,474 Income from operations 35,393 1,778 1,156 (8,488 ) 29,839 Interest expense, net (11,143 ) (1,220 ) (25 ) — (12,388 ) Capital expenditures 5,087 433 236 — 5,756 Depreciation and amortization 6,115 865 87 — 7,067 Three Months Ended March 31, 2018 Americas EMEA APAC Unallocated Corporate Costs Consolidated Net sales $ 313,250 $ 68,147 $ 8,786 $ — $ 390,183 Income from operations 35,691 6,830 777 (10,102 ) 33,196 Interest expense, net (10,943 ) (997 ) (25 ) — (11,965 ) Capital expenditures 1,412 75 87 — 1,574 Depreciation and amortization 6,283 929 73 — 7,285 Six Months Ended March 31, 2019 Americas EMEA APAC Unallocated Corporate Costs Consolidated Net sales $ 668,426 $ 128,038 $ 25,321 $ — $ 821,785 Income from operations 64,384 4,274 2,230 (18,970 ) 51,918 Interest expense, net (22,400 ) (2,851 ) (51 ) — (25,302 ) Capital expenditures 6,547 924 525 — 7,996 Depreciation and amortization 12,281 1,714 170 — 14,165 Six Months Ended March 31, 2018 Americas EMEA APAC Unallocated Corporate Costs Consolidated Net sales $ 602,765 $ 132,385 $ 18,124 $ — $ 753,274 Income from operations 60,888 11,982 2,275 (17,377 ) 57,768 Interest expense, net (21,591 ) (2,161 ) (51 ) — (23,803 ) Capital expenditures 2,370 400 139 — 2,909 Depreciation and amortization 12,659 1,735 147 — 14,541 As of March 31, 2019 Americas EMEA APAC Consolidated Total assets $ 1,500,383 $ 250,986 $ 66,146 $ 1,817,515 Goodwill 204,183 51,190 11,271 266,644 As of September 30, 2018 Americas EMEA APAC Consolidated Total assets $ 1,485,453 $ 248,937 $ 55,086 $ 1,789,476 Goodwill 204,183 51,190 11,271 266,644 Product and Service Information Net sales by product categories for the three months and six months ended March 31, 2019 were as follows (dollars in thousands): Three Months Ended March 31, 2019 Americas EMEA APAC Consolidated Sales % of Total Sales % of Total Sales % of Total Sales % of Total Hardware $ 165,163 47.6 % $ 29,466 44.4 % $ 4,130 32.1 % $ 198,759 46.6 % Chemicals (1) 140,293 40.4 % 30,656 46.2 % 7,156 55.6 % 178,105 41.8 % Electronic components 29,459 8.5 % 1,835 2.8 % 287 2.2 % 31,581 7.4 % Bearings 3,710 1.0 % 1,377 2.1 % 989 7.7 % 6,076 1.4 % Machined parts and other 8,676 2.5 % 2,966 4.5 % 311 2.4 % 11,953 2.8 % Total $ 347,301 100.0 % $ 66,300 100.0 % $ 12,873 100.0 % $ 426,474 100.0 % Six Months Ended March 31, 2019 Americas EMEA APAC Consolidated Sales % of Total Sales % of Total Sales % of Total Sales % of Total Hardware $ 316,160 47.3 % $ 56,605 44.2 % $ 8,093 32.0 % $ 380,858 46.3 % Chemicals (1) 271,905 40.7 % 60,995 47.6 % 13,714 54.2 % 346,614 42.2 % Electronic components 55,924 8.4 % 3,794 3.0 % 638 2.5 % 60,356 7.3 % Bearings 9,329 1.3 % 3,013 2.4 % 2,184 8.6 % 14,526 1.8 % Machined parts and other 15,108 2.3 % 3,631 2.8 % 692 2.7 % 19,431 2.4 % Total $ 668,426 100.0 % $ 128,038 100.0 % $ 25,321 100.0 % $ 821,785 100.0 % (1) Includes CMS contracts |
Income Taxes
Income Taxes | 6 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Three Months Ended Six Months Ended (dollars in thousands) 2019 2018 2019 2018 Provision for income taxes $ 5,127 $ 6,123 $ 7,782 $ 19,491 Effective tax rate 29.9 % 29.0 % 29.8 % 57.1 % For the three months ended March 31, 2019 , our effective tax rate increased 0.9 percentage points compared to the same period in the prior year. The difference in effective tax rates is primarily related to discrete adjustments recognized during the three months ended March 31, 2019. Without consideration of discrete adjustments, our effective tax rate would have been 29.4% for the three months ended March 31, 2018 and 29.0% for the three months ended March 31, 2019. For the six months ended March 31, 2019 , our effective tax rate decreased 27.3 percentage points compared to the same period in the prior year. The difference in effective tax rates is primarily related to discrete adjustments recognized during the three months ended December 31, 2017 from the one-time tax imposed on accumulated earnings and profits of foreign operations as a result the enactment of the Tax Cuts and Jobs Act (the “Tax Act”) on December 22, 2017. Without consideration of discrete adjustments, our effective tax rate would have been 29.1% for the six months ended March 31, 2018 and 29.0% for the six months ended March 31, 2019. |
Shareholders' Equity
Shareholders' Equity | 6 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
Shareholders' Equity | Shareholders' Equity The following tables provide changes to our shareholders' equity for the three months ended March 31, 2019 and 2018 (dollars in thousands): Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Loss Retained Earnings Total Shareholders' Equity Shares Amount Balance at December 31, 2018 99,749,451 $ 100 $ 447,059 $ (85,949 ) $ 337,112 $ 698,322 Issuance of common stock (6,072 ) — — — — — Stock-based compensation expense — — 2,114 — — 2,114 Net income — — — — 12,010 12,010 Other comprehensive loss — — — (1,263 ) — (1,263 ) Balance at March 31, 2019 99,743,379 $ 100 $ 449,173 $ (87,212 ) $ 349,122 $ 711,183 Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Loss Retained Earnings Total Shareholders' Equity Shares Amount Balance at December 31, 2017 99,517,543 $ 99 $ 438,310 $ (83,361 ) $ 297,361 $ 652,409 Issuance of common stock (26,895 ) — 34 — — — 34 Settlement on restricted stock tax withholding — — (74 ) — — (74 ) Stock-based compensation expense — — 1,873 — — 1,873 Net income — — — — 15,000 15,000 Other comprehensive income — — — 2,850 — 2,850 Balance at March 31, 2018 99,490,648 $ 99 $ 440,143 $ (80,511 ) $ 312,361 $ 672,092 The following tables provide changes to our shareholders' equity for the six months ended March 31, 2019 and 2018 (dollars in thousands): Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Loss Retained Earnings Total Shareholders' Equity Shares Amount Balance at September 30, 2018 99,557,885 $ 99 $ 444,531 $ (82,980 ) $ 330,819 $ 692,469 Issuance of common stock 185,494 1 12 — — 13 Settlement on restricted stock tax withholding — — (428 ) — — (428 ) Stock-based compensation expense — — 5,058 — — 5,058 Net income — — — — 18,303 18,303 Other comprehensive loss — — — (4,232 ) — (4,232 ) Balance at March 31, 2019 99,743,379 $ 100 $ 449,173 $ (87,212 ) $ 349,122 $ 711,183 Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Loss Retained Earnings Total Shareholders' Equity Shares Amount Balance at September 30, 2017 99,450,902 $ 99 $ 436,522 $ (84,626 ) $ 297,736 $ 649,731 Issuance of common stock 39,746 — 33 — (1 ) 32 Settlement on restricted stock tax withholding — — (100 ) — — (100 ) Stock-based compensation expense — — 3,688 — — 3,688 Net income — — — — 14,626 14,626 Other comprehensive income — — — 4,115 — 4,115 Balance at March 31, 2018 99,490,648 $ 99 $ 440,143 $ (80,511 ) $ 312,361 $ 672,092 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies We are involved in various legal matters that arise in the ordinary course of business. Our management, after consulting with outside legal counsel, believes that the ultimate outcome of such matters will not have a material adverse effect on our business, financial position, results of operations or cash flows. There can be no assurance, however, that such actions will not be material or adversely affect our business, financial position, results of operations or cash flows. |
Basis of Presentation and Sig_2
Basis of Presentation and Significant Accounting Policies (Policies) | 6 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of accounting | The accompanying unaudited consolidated financial statements include the accounts of Wesco Aircraft Holdings, Inc. and its wholly owned subsidiaries (referred to herein as Wesco or the Company) prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) and with the instructions to Form 10-Q and Article 10 of Regulation S-X. The financial statements presented herein have not been audited by an independent registered public accounting firm but include all material adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary for fair statement of the financial position, results of operations and cash flows for the period. However, these results are not necessarily indicative of results for any other interim period or for the full fiscal year. The preparation of financial statements in conformity with GAAP requires us to make certain estimates and assumptions for the reporting periods covered by the financial statements. These estimates and assumptions affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent liabilities. Actual amounts could differ from these estimates. Our financial statements have been prepared under the assumption that our Company will continue as a going concern. Certain information and footnote disclosures normally included in financial statements in accordance with GAAP have been omitted pursuant to the rules of the Securities and Exchange Commission (the SEC). The accompanying consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended September 30, 2018 filed with the SEC on November 16, 2018 (the 2018 Form 10-K). Except for the changes below, no material changes have been made to our significant accounting policies disclosed in Note 2 of the Notes to the Consolidated Financial Statements in Part II, Item 8 of the 2018 Form 10-K. |
Revenue from Contracts with Customer | Revenue from Contracts with Customers Pursuant to Accounting Standard Codification Topic 606, Revenue from Contracts with Customers (ASC 606) , we recognize revenue when our customer obtains control of promised goods or services, in an amount that reflects the consideration that we expect to receive in exchange for those goods or services. To determine revenue recognition for arrangements that we determine are within the scope of ASC 606, we perform the following five steps: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when (or as) the entity satisfies a performance obligation. We recognize revenue in the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. Typically, our master purchase contracts with our customer run for three to five years without minimum purchase requirements annually or for over the term of the contract, and contain termination for convenience provisions, which generally allow for our customers to terminate their contracts on short notice without meaningful penalties. Pursuant to ASC 606, we have concluded that for revenue recognition purposes, our customers’ purchase orders (P.O.'s) are considered contracts, which are supplemented by certain contract terms such as service fee arrangements and variable price considerations in our master purchase contracts. The P.O.'s are typically fulfilled within one year. Our Contracts for hardware and chemical product sales have a single performance obligation. Revenues from these Contract sales are recognized when the customer obtains control of our products, which occurs at a point in time, typically upon delivery in accordance with the terms of the sales contract. Services under our hardware just-in-time (JIT) arrangements are provided by us contemporaneously with the delivery of these products and are not separately identifiable from the products, and as such, once the products are delivered, we do not have a post-delivery obligation to provide services to the customer. Accordingly, 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 products. Payment is generally due within 30 to 90 days of delivery; therefore, our contracts do not create significant financing components. Warranties are limited to replacement of goods that are defective upon delivery. The Company does not provide service-type warranties. Our chemical management services (CMS) contracts include the sale of chemical products as well as services such as product procurement, receiving and quality inspection, warehouse and inventory management, and waste disposal. The CMS contracts represent an end-to-end integrated chemical management solution. While each of the products and various services benefits the customer, we determined that they are a single output in the context of the CMS contract due to the significant commercial integration of these products and services. Therefore, chemical products and services provided under a CMS contract represent a single performance obligation and revenue is recognized over time for these contracts using product deliveries as our output measure of progress under the CMS contract to depict the transfer of control to the customer. We report revenue on a gross or net basis in our presentation of net sales and costs of sales based on management’s assessment of whether we act as a principal or agent in the transaction. If we are the principal in the transaction and have control of the specified good or service before that good or service is transferred to a customer, the transactions are recorded as gross in the consolidated statements of comprehensive income. If we do not act as a principal in the transaction, the transactions are recorded on a net basis in the consolidated statements of earnings and comprehensive income. This assessment requires significant judgment to evaluate indicators of control within our contracts. We base our judgment on various indicators that include whether we take possession of the products, whether we are responsible for their acceptability, whether we have inventory risk, and whether we have discretion in establishing the price paid by the customer. The majority of our revenue is recorded on a gross basis with the exception of certain gas, energy and chemical management service contracts that are recorded on a net basis. With respect to variable consideration, we apply judgment in estimating its impact to determine the amount of revenue to recognize. Sales rebates and profit-sharing arrangements are accounted for as a reduction to gross sales and recorded based upon estimates at the time products are sold. These estimates are based upon historical experience for similar programs and products. We review such rebates and profit-sharing arrangements on an ongoing basis and accruals are adjusted, if necessary, as additional information becomes available. We provide allowances for credits and returns based on historic experience and adjust such allowances as considered necessary. To date, such provisions have been within the range of our expectations and the allowance established. Returns and refunds are allowed only for materials that are defective or not compliant with the customer’s order. Sales tax collected from customers is excluded from net sales in the consolidated statements of comprehensive income. We have determined that sales backlog is not a relevant measure of our business. Few, if any, of our contracts include minimum purchase requirements, annually or over the term of the agreement. As a result, we have no material sales backlog. |
New Accounting Standards Issued and Adopted Accounting Standards | New Accounting Standards Issued In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment , which simplifies the current requirements for testing goodwill for impairment by eliminating the second step of the two-step impairment test to measure the amount of an impairment loss. ASU 2017-04 is effective for the Company in fiscal year 2021, including interim reporting periods within that reporting period, and all annual and interim reporting periods thereafter. Early adoption is permitted. We are currently evaluating the impact of this guidance on our consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 is amended by ASU 2018-01, ASU2018-10, ASU 2018-11, ASU 2018-20 and ASU 2019-01, which FASB issued in January 2018, July 2018, July 2018, December 2018 and March 2019, respectively (collectively, the amended ASU 2016-02). The amended ASU 2016-02 requires lessees to recognize on the balance sheet a right-of-use asset, representing its right to use the underlying asset for the lease term, and a lease liability for all leases with terms greater than 12 months. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee have not significantly changed from current GAAP. The amended ASU 2016-02 retains a distinction between finance leases (i.e. capital leases under current GAAP) and operating leases. The classification criteria for distinguishing between finance leases and operating leases will be substantially similar to the classification criteria for distinguishing between capital leases and operating leases under current GAAP. The amended ASU 2016-02 also requires qualitative and quantitative disclosures designed to assess the amount, timing, and uncertainty of cash flows arising from leases. A modified retrospective transition approach is permitted to be used when an entity adopts the amended ASU 2016-02, which includes a number of optional practical expedients that entities may elect to apply. The amended ASU 2016-02 is effective for the Company in fiscal year 2020 and interim periods therein, with early application permitted. We are currently evaluating the impact of this guidance on our consolidated financial statements. We have compiled our worldwide lease population, selected a lease accounting software vendor, and are in the process of evaluating the completeness of our lease population. The adoption of the amended ASU 2016-02 is expected to result in material increases to our balance sheet for the recognition of right-of-use assets and lease liabilities. As of September 30, 2018, total future minimum payments under our operating leases amounted to $50.8 million . Adopted Accounting Standards On October 1, 2018, we adopted ASU 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, which affects the accounting for equity investments, financial liabilities under the fair value option and the presentation and disclosure requirements of financial instruments. The adoption of ASU 2016-01 did not have a material impact on our consolidated financial statements. On October 1, 2018, we adopted ASU 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting, which specifies the modification accounting applicable to any entity that changes the terms or conditions of a share-based payment award. The adoption of ASU 2017-09 did not have a material impact on our consolidated financial statements. Revenue from Contracts with Customers In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). ASU 2014-09 is amended by ASU 2015-14, ASU 2016-08, ASU 2016-10, ASU 2016-11, ASU 2016-12, ASU 2016-20, ASU 2017-10, ASU 2017-13 and ASU 2017-14, which the FASB issued in August 2015, March 2016, April 2016, May 2016, May 2016, December 2016, May 2017, September 2017 and November 2017, respectively (collectively, the amended ASU 2014-09). The amended ASU 2014-09 provides a single comprehensive model for the recognition of revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. It requires an entity to recognize revenue when the entity transfers 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. The amended ASU 2014-09 creates a five-step model that requires entities to exercise judgment when considering the terms of contract(s), which includes (1) identifying the contract(s) with the customer, (2) identifying the separate performance obligations in the contract, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied. The amended ASU 2014-09 requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including qualitative and quantitative information about contracts with customers, significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. Effective October 1, 2018, we adopted the amended ASU 2014-09 (ASC 606) using the modified retrospective method of adoption, which resulted in no changes to our opening consolidated balance sheet at the beginning of October 1, 2018. Our initial and incremental contract acquisition costs including sign up commissions and set up costs, which are required to be capitalized under ASC 606, are insignificant and expensed as incurred. Our revenues recognized under ASC 606 for the three and six months ended March 31, 2019 were not materially different from what would have been recognized under the previous revenue standard, ASC 605, that is superseded. Prior period consolidated statements of earnings and comprehensive income remain unchanged. We have designed and implemented internal controls, policies and processes to comply with ASC 606 . The additional disclosures required by ASC 606 are included in Note 1 and Note 9. |
Goodwill (Tables)
Goodwill (Tables) | 6 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill | As of March 31, 2019 , goodwill consists of the following (in thousands): Americas EMEA APAC Total Goodwill as of September 30, 2018, gross $ 773,384 $ 51,190 $ 16,955 $ 841,529 Accumulated impairment (569,201 ) — (5,684 ) (574,885 ) Goodwill as of September 30, 2018, net 204,183 51,190 11,271 266,644 Changes during the period — — — — Goodwill as of March 31, 2019, gross 773,384 51,190 16,955 841,529 Accumulated impairment (569,201 ) — (5,684 ) (574,885 ) Goodwill as of March 31, 2019, net $ 204,183 $ 51,190 $ 11,271 $ 266,644 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 6 Months Ended |
Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of derivative instruments | The following table summarizes the notional principal amounts at March 31, 2019 , and September 30, 2018 of our outstanding interest rate swap agreements discussed above (in thousands). Derivative Notional March 31, 2019 September 30, 2018 Instruments designated as accounting hedges: Interest rate swap contracts $ 410,800 $ 435,800 |
Schedule of derivative instruments in statement of financial position, fair value | The following table provides the location and fair value amounts of our financial instruments, which are reported in our consolidated balance sheets as of March 31, 2019 and September 30, 2018 (in thousands). Fair Value Balance Sheet Locations March 31, 2019 September 30, 2018 Instruments designated as accounting hedge: Interest rate swap contracts Other current assets $ 327 $ 1,045 Interest rate swap contracts Other assets — 1,051 Interest rate swap contracts Accrued expenses and other current liabilities 1,206 289 Interest rate swap contracts Other liabilities 1,920 — |
Derivative instruments, gain (loss) | The following table provides the (gain) losses of our cash flow hedging instruments (net of income tax benefit), which were transferred from AOCI to interest expense on our consolidated statements of earnings and comprehensive income during the three and six months ended March 31, 2019 and 2018 (in thousands). Location in Consolidated Statements of Earnings and Comprehensive Income Three Months Ended Six Months Ended Cash Flow Hedge 2019 2018 2019 2018 Interest rate swap contracts Interest (income) expense, net $ (152 ) $ 304 $ (70 ) $ 861 Total interest expense, net presented in the consolidated statements of earnings and comprehensive income in which the above effects of cash flow hedges are recorded $ 12,388 $ 11,965 $ 25,302 $ 23,803 The following table provides the effective portion of the amount of (loss) gain recognized in other comprehensive income (net of income taxes) for the three and six months ended March 31, 2019 and 2018 (in thousands). Three Months Ended Six Months Ended Cash Flow Hedge 2019 2018 2019 2018 Interest rate swap contracts $ (1,088 ) $ 1,461 $ (3,282 ) $ 2,832 |
Schedule of accumulated other comprehensive income (loss) | The following table provides a summary of changes to our AOCI related to our cash flow hedging instrument (net of income taxes) during the three and six months ended March 31, 2019 (in thousands). AOCI - Unrealized Gain (Loss) on Hedging Instruments Three Months Ended March 31, 2019 Six Months Ended March 31, 2019 Balance at beginning of period $ (737 ) $ 1,375 Change in fair value of hedging instruments (1,088 ) (3,282 ) Amounts reclassified to earnings (152 ) (70 ) Net current period other comprehensive loss (1,240 ) (3,352 ) Balance at end of period $ (1,977 ) $ (1,977 ) |
Schedule of carrying values and estimated fair values of debt instruments | The principal amounts and fair values of the debt instruments and interest rate swap agreements were as follows (in thousands): March 31, 2019 September 30, 2018 Principal Amount Fair Value Principal Amount Fair Value Term loan A facility $ 350,000 $ 346,325 $ 360,000 $ 357,840 Term loan B facility 440,562 432,632 440,562 432,192 Revolving facility 67,000 67,000 54,000 54,000 Interest rate swap contract liability (assets), net 2,799 2,799 (1,807 ) (1,807 ) |
Schedule of fair value, assets and liabilities measured on recurring basis | The following tables provide the valuation hierarchy classification of assets and liabilities that are carried at fair value and measured on a recurring basis in our consolidated balance sheets as of March 31, 2019 and September 30, 2018 (in thousands). March 31, 2019 Balance Sheet Locations Total Level 1 Level 2 Level 3 Instruments designated as accounting hedge: Interest rate swap contracts Other current assets $ 327 $ — $ 327 $ — Interest rate swap contracts Accrued expenses and other current liabilities 1,206 — 1,206 — Interest rate swap contracts Other liabilities 1,920 — 1,920 — September 30, 2018 Balance Sheet Locations Total Level 1 Level 2 Level 3 Instrument designated as accounting hedge: Interest rate swap contracts Other current assets $ 1,045 $ — $ 1,045 $ — Interest rate swap contracts Other assets 1,051 — 1,051 — Interest rate swap contracts Accrued expenses and other current liabilities 289 — 289 — |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 6 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of debt | Long-term debt consists of the following (in thousands): March 31, 2019 September 30, 2018 Principal Amount Deferred Debt Issuance Costs Carrying Amount Principal Amount Deferred Debt Issuance Costs Carrying Amount Term loan A facility $ 350,000 $ (4,494 ) $ 345,506 $ 360,000 $ (5,842 ) $ 354,158 Term loan B facility 440,562 (2,334 ) 438,228 440,562 (2,943 ) 437,619 Revolving facility 67,000 — 67,000 54,000 — 54,000 857,562 (6,828 ) 850,734 854,562 (8,785 ) 845,777 Less: current portion 87,000 — 87,000 74,000 — 74,000 Non-current portion $ 770,562 $ (6,828 ) $ 763,734 $ 780,562 $ (8,785 ) $ 771,777 |
Total deferred financing costs | The following table summarizes the total deferred debt issuance costs for the term loan A facility, the term loan B facility and the revolving facility as of March 31, 2019 and September 30, 2018 (dollars in thousands). The remaining deferred debt issuance costs as of March 31, 2019 will be amortized over their remaining terms. Term Loan A Facility Term Loan B Facility Revolving Facility Total Deferred debt issuance costs as of September 30, 2018 $ 5,842 $ 2,943 $ 2,827 $ 11,612 Amortization of deferred debt issuance costs (1,348 ) (609 ) (653 ) (2,610 ) Deferred debt issuance costs as of March 31, 2019 $ 4,494 $ 2,334 $ 2,174 $ 9,002 |
Comprehensive Income (Tables)
Comprehensive Income (Tables) | 6 Months Ended |
Mar. 31, 2019 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |
Schedule of comprehensive income | Comprehensive income, which is net of income taxes, consists of the following (in thousands): Three Months Ended Six Months Ended 2019 2018 2019 2018 Net income $ 12,010 $ 15,000 $ 18,303 $ 14,626 Foreign currency translation (loss) gain (22 ) 1,389 (879 ) 1,284 Unrealized (loss) gain on cash flow hedging instruments (1,241 ) 1,461 (3,353 ) 2,831 Total comprehensive income $ 10,747 $ 17,850 $ 14,071 $ 18,741 |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 6 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of net income per share | The following table provides our basic and diluted net income per share for the three and six months ended March 31, 2019 and 2018 (dollars in thousands except share data): Three Months Ended Six Months Ended 2019 2018 2019 2018 Net income $ 12,010 $ 15,000 $ 18,303 $ 14,626 Basic weighted average shares outstanding 99,626,736 99,136,015 99,555,589 99,116,250 Dilutive effect of stock options and restricted stock 324,075 383,910 375,410 325,135 Dilutive weighted average shares outstanding 99,950,811 99,519,925 99,930,999 99,441,385 Basic net income per share $ 0.12 $ 0.15 $ 0.18 $ 0.15 Diluted net income per share $ 0.12 $ 0.15 $ 0.18 $ 0.15 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 6 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
Schedule of net sales and other financial information by business segment | The following tables present operating and financial information by business segment (in thousands): Three Months Ended March 31, 2019 Americas EMEA APAC Unallocated Corporate Costs Consolidated Net sales $ 347,301 $ 66,300 $ 12,873 $ — $ 426,474 Income from operations 35,393 1,778 1,156 (8,488 ) 29,839 Interest expense, net (11,143 ) (1,220 ) (25 ) — (12,388 ) Capital expenditures 5,087 433 236 — 5,756 Depreciation and amortization 6,115 865 87 — 7,067 Three Months Ended March 31, 2018 Americas EMEA APAC Unallocated Corporate Costs Consolidated Net sales $ 313,250 $ 68,147 $ 8,786 $ — $ 390,183 Income from operations 35,691 6,830 777 (10,102 ) 33,196 Interest expense, net (10,943 ) (997 ) (25 ) — (11,965 ) Capital expenditures 1,412 75 87 — 1,574 Depreciation and amortization 6,283 929 73 — 7,285 Six Months Ended March 31, 2019 Americas EMEA APAC Unallocated Corporate Costs Consolidated Net sales $ 668,426 $ 128,038 $ 25,321 $ — $ 821,785 Income from operations 64,384 4,274 2,230 (18,970 ) 51,918 Interest expense, net (22,400 ) (2,851 ) (51 ) — (25,302 ) Capital expenditures 6,547 924 525 — 7,996 Depreciation and amortization 12,281 1,714 170 — 14,165 Six Months Ended March 31, 2018 Americas EMEA APAC Unallocated Corporate Costs Consolidated Net sales $ 602,765 $ 132,385 $ 18,124 $ — $ 753,274 Income from operations 60,888 11,982 2,275 (17,377 ) 57,768 Interest expense, net (21,591 ) (2,161 ) (51 ) — (23,803 ) Capital expenditures 2,370 400 139 — 2,909 Depreciation and amortization 12,659 1,735 147 — 14,541 As of March 31, 2019 Americas EMEA APAC Consolidated Total assets $ 1,500,383 $ 250,986 $ 66,146 $ 1,817,515 Goodwill 204,183 51,190 11,271 266,644 As of September 30, 2018 Americas EMEA APAC Consolidated Total assets $ 1,485,453 $ 248,937 $ 55,086 $ 1,789,476 Goodwill 204,183 51,190 11,271 266,644 |
Schedule of net sales by product categories | Net sales by product categories for the three months and six months ended March 31, 2019 were as follows (dollars in thousands): Three Months Ended March 31, 2019 Americas EMEA APAC Consolidated Sales % of Total Sales % of Total Sales % of Total Sales % of Total Hardware $ 165,163 47.6 % $ 29,466 44.4 % $ 4,130 32.1 % $ 198,759 46.6 % Chemicals (1) 140,293 40.4 % 30,656 46.2 % 7,156 55.6 % 178,105 41.8 % Electronic components 29,459 8.5 % 1,835 2.8 % 287 2.2 % 31,581 7.4 % Bearings 3,710 1.0 % 1,377 2.1 % 989 7.7 % 6,076 1.4 % Machined parts and other 8,676 2.5 % 2,966 4.5 % 311 2.4 % 11,953 2.8 % Total $ 347,301 100.0 % $ 66,300 100.0 % $ 12,873 100.0 % $ 426,474 100.0 % Six Months Ended March 31, 2019 Americas EMEA APAC Consolidated Sales % of Total Sales % of Total Sales % of Total Sales % of Total Hardware $ 316,160 47.3 % $ 56,605 44.2 % $ 8,093 32.0 % $ 380,858 46.3 % Chemicals (1) 271,905 40.7 % 60,995 47.6 % 13,714 54.2 % 346,614 42.2 % Electronic components 55,924 8.4 % 3,794 3.0 % 638 2.5 % 60,356 7.3 % Bearings 9,329 1.3 % 3,013 2.4 % 2,184 8.6 % 14,526 1.8 % Machined parts and other 15,108 2.3 % 3,631 2.8 % 692 2.7 % 19,431 2.4 % Total $ 668,426 100.0 % $ 128,038 100.0 % $ 25,321 100.0 % $ 821,785 100.0 % (1) Includes CMS contracts |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of income tax expense (benefit) | Three Months Ended Six Months Ended (dollars in thousands) 2019 2018 2019 2018 Provision for income taxes $ 5,127 $ 6,123 $ 7,782 $ 19,491 Effective tax rate 29.9 % 29.0 % 29.8 % 57.1 % |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 6 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
Schedule of shareholders' equity | The following tables provide changes to our shareholders' equity for the three months ended March 31, 2019 and 2018 (dollars in thousands): Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Loss Retained Earnings Total Shareholders' Equity Shares Amount Balance at December 31, 2018 99,749,451 $ 100 $ 447,059 $ (85,949 ) $ 337,112 $ 698,322 Issuance of common stock (6,072 ) — — — — — Stock-based compensation expense — — 2,114 — — 2,114 Net income — — — — 12,010 12,010 Other comprehensive loss — — — (1,263 ) — (1,263 ) Balance at March 31, 2019 99,743,379 $ 100 $ 449,173 $ (87,212 ) $ 349,122 $ 711,183 Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Loss Retained Earnings Total Shareholders' Equity Shares Amount Balance at December 31, 2017 99,517,543 $ 99 $ 438,310 $ (83,361 ) $ 297,361 $ 652,409 Issuance of common stock (26,895 ) — 34 — — — 34 Settlement on restricted stock tax withholding — — (74 ) — — (74 ) Stock-based compensation expense — — 1,873 — — 1,873 Net income — — — — 15,000 15,000 Other comprehensive income — — — 2,850 — 2,850 Balance at March 31, 2018 99,490,648 $ 99 $ 440,143 $ (80,511 ) $ 312,361 $ 672,092 The following tables provide changes to our shareholders' equity for the six months ended March 31, 2019 and 2018 (dollars in thousands): Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Loss Retained Earnings Total Shareholders' Equity Shares Amount Balance at September 30, 2018 99,557,885 $ 99 $ 444,531 $ (82,980 ) $ 330,819 $ 692,469 Issuance of common stock 185,494 1 12 — — 13 Settlement on restricted stock tax withholding — — (428 ) — — (428 ) Stock-based compensation expense — — 5,058 — — 5,058 Net income — — — — 18,303 18,303 Other comprehensive loss — — — (4,232 ) — (4,232 ) Balance at March 31, 2019 99,743,379 $ 100 $ 449,173 $ (87,212 ) $ 349,122 $ 711,183 Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Loss Retained Earnings Total Shareholders' Equity Shares Amount Balance at September 30, 2017 99,450,902 $ 99 $ 436,522 $ (84,626 ) $ 297,736 $ 649,731 Issuance of common stock 39,746 — 33 — (1 ) 32 Settlement on restricted stock tax withholding — — (100 ) — — (100 ) Stock-based compensation expense — — 3,688 — — 3,688 Net income — — — — 14,626 14,626 Other comprehensive income — — — 4,115 — 4,115 Balance at March 31, 2018 99,490,648 $ 99 $ 440,143 $ (80,511 ) $ 312,361 $ 672,092 |
Basis of Presentation and Sig_3
Basis of Presentation and Significant Accounting Policies (Details) | 6 Months Ended |
Mar. 31, 2019 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligation, expected timing satisfaction | 1 year |
Minimum | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, payment terms | 30 days |
Maximum | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, payment terms | 90 days |
Recent Accounting Pronounceme_2
Recent Accounting Pronouncements (Details) $ in Millions | Sep. 30, 2018USD ($) |
Accounting Policies [Abstract] | |
Operating leases, future minimum payments due | $ 50.8 |
Inventory (Details)
Inventory (Details) - Excess and Obsolete (E&O) Inventory - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Inventory [Line Items] | ||||
Inventory adjustment, cost of sales, net | $ (2.5) | $ 0.4 | $ 2.6 | $ 4.8 |
Inventory adjustment, additional expense | 3.7 | 5.6 | 13.8 | 15.2 |
Inventory adjustment, sales and disposals | $ 6.2 | $ 5.2 | $ 11.2 | $ 10.4 |
Goodwill - Schedule of Goodwill
Goodwill - Schedule of Goodwill (Details) $ in Thousands | 6 Months Ended |
Mar. 31, 2019USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, gross, beginning balance | $ 841,529 |
Accumulated impairment, beginning balance | (574,885) |
Goodwill, net, beginning balance | 266,644 |
Changes during the period | 0 |
Goodwill, gross, ending balance | 841,529 |
Accumulated impairment, ending balance | (574,885) |
Goodwill, net, ending balance | 266,644 |
Americas | |
Goodwill [Roll Forward] | |
Goodwill, gross, beginning balance | 773,384 |
Accumulated impairment, beginning balance | (569,201) |
Goodwill, net, beginning balance | 204,183 |
Changes during the period | 0 |
Goodwill, gross, ending balance | 773,384 |
Accumulated impairment, ending balance | (569,201) |
Goodwill, net, ending balance | 204,183 |
EMEA | |
Goodwill [Roll Forward] | |
Goodwill, gross, beginning balance | 51,190 |
Accumulated impairment, beginning balance | 0 |
Goodwill, net, beginning balance | 51,190 |
Changes during the period | 0 |
Goodwill, gross, ending balance | 51,190 |
Accumulated impairment, ending balance | 0 |
Goodwill, net, ending balance | 51,190 |
APAC | |
Goodwill [Roll Forward] | |
Goodwill, gross, beginning balance | 16,955 |
Accumulated impairment, beginning balance | (5,684) |
Goodwill, net, beginning balance | 11,271 |
Changes during the period | 0 |
Goodwill, gross, ending balance | 16,955 |
Accumulated impairment, ending balance | (5,684) |
Goodwill, net, ending balance | $ 11,271 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Cash Flow Hedges of Interest Rate Risk (Details) | 6 Months Ended | |
Mar. 31, 2019USD ($)interest_rate_swap_agreement | Sep. 30, 2018USD ($) | |
Interest rate swap | Cash flow hedging | ||
Derivative [Line Items] | ||
Derivative instrument, gain (loss) reclassification from AOCI to income | $ 900,000 | |
Interest rate swap one | Cash flow hedging | ||
Derivative [Line Items] | ||
Derivative, fixed interest rate (as a percent) | 2.2625% | |
Interest rate swap two | Cash flow hedging | ||
Derivative [Line Items] | ||
Derivative, fixed interest rate (as a percent) | 2.79% | |
Designated as hedging instrument | Interest rate swap | ||
Derivative [Line Items] | ||
Derivative, notional amount | $ 410,800,000 | $ 435,800,000 |
Designated as hedging instrument | Interest rate swap one | Cash flow hedging | ||
Derivative [Line Items] | ||
Number of interest rate derivatives held | interest_rate_swap_agreement | 3 | |
Derivative, notional amount | $ 225,000,000 | |
Designated as hedging instrument | Interest rate swap two | Cash flow hedging | ||
Derivative [Line Items] | ||
Number of interest rate derivatives held | interest_rate_swap_agreement | 2 | |
Derivative, notional amount | $ 185,800,000 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Non-Designated Derivatives (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Sep. 30, 2018 |
Designated as hedging instrument | Interest rate swap | ||
Derivative [Line Items] | ||
Derivative, notional amount | $ 410,800 | $ 435,800 |
Fair Value of Financial Instr_5
Fair Value of Financial Instruments - Location and Fair Value Amounts of Financial Instruments (Details) - Designated as hedging instrument - Interest rate swap - USD ($) $ in Thousands | Mar. 31, 2019 | Sep. 30, 2018 |
Other current assets | ||
Derivative [Line Items] | ||
Derivative assets | $ 327 | $ 1,045 |
Other assets | ||
Derivative [Line Items] | ||
Derivative assets | 1,051 | |
Accrued expenses and other current liabilities | ||
Derivative [Line Items] | ||
Derivative liabilities | 1,206 | 289 |
Other liabilities | ||
Derivative [Line Items] | ||
Derivative liabilities | 1,920 | |
Cash flow hedging | Other current assets | ||
Derivative [Line Items] | ||
Derivative assets | 327 | 1,045 |
Cash flow hedging | Other assets | ||
Derivative [Line Items] | ||
Derivative assets | 0 | 1,051 |
Cash flow hedging | Accrued expenses and other current liabilities | ||
Derivative [Line Items] | ||
Derivative liabilities | 1,206 | 289 |
Cash flow hedging | Other liabilities | ||
Derivative [Line Items] | ||
Derivative liabilities | $ 1,920 | $ 0 |
Fair Value of Financial Instr_6
Fair Value of Financial Instruments - Losses of Cash Flow Hedge Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Derivative [Line Items] | ||||
Interest expense, net | $ 12,388 | $ 11,965 | $ 25,302 | $ 23,803 |
Reclassification out of AOCI | Interest rate swap | ||||
Derivative [Line Items] | ||||
Gain (loss) on fair value hedging | $ (152) | $ 304 | $ (70) | $ 861 |
Fair Value of Financial Instr_7
Fair Value of Financial Instruments - Effective Portion of (Loss) Gain Recognized In OCI (Details) - Designated as hedging instrument - Cash flow hedging - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Derivative [Line Items] | ||||
Other comprehensive income (loss), effective portion of cash flow hedge | $ (1,088) | $ (3,282) | ||
Interest rate swap | ||||
Derivative [Line Items] | ||||
Other comprehensive income (loss), effective portion of cash flow hedge | $ (1,088) | $ 1,461 | $ (3,282) | $ 2,832 |
Fair Value of Financial Instr_8
Fair Value of Financial Instruments - Changes in AOCI (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | $ 698,322 | $ 652,409 | $ 692,469 | $ 649,731 |
Net current period other comprehensive loss | (1,263) | 2,850 | (4,232) | 4,115 |
Ending Balance | 711,183 | $ 672,092 | 711,183 | $ 672,092 |
Designated as hedging instrument | Cash flow hedging | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (737) | 1,375 | ||
Change in fair value of hedging instruments | (1,088) | (3,282) | ||
Amounts reclassified to earnings | (152) | (70) | ||
Net current period other comprehensive loss | (1,240) | (3,352) | ||
Ending Balance | $ (1,977) | $ (1,977) |
Fair Value of Financial Instr_9
Fair Value of Financial Instruments - Other Financial Instruments (Details) $ in Thousands | Mar. 31, 2019USD ($)term_loan | Sep. 30, 2018USD ($) |
Fair value of financial instruments | ||
Number of Term Loans | term_loan | 2 | |
Level 2 | Interest rate swap | Principal Amount | ||
Fair value of financial instruments | ||
Interest rate swap contract liability (assets), net | $ 2,799 | $ (1,807) |
Level 2 | Interest rate swap | Fair Value | ||
Fair value of financial instruments | ||
Interest rate swap contract liability (assets), net | 2,799 | (1,807) |
Level 2 | Term loan A facility | Principal Amount | ||
Fair value of financial instruments | ||
Long term debt | 350,000 | 360,000 |
Level 2 | Term loan A facility | Fair Value | ||
Fair value of financial instruments | ||
Long term debt | 346,325 | 357,840 |
Level 2 | Term loan B facility | Principal Amount | ||
Fair value of financial instruments | ||
Long term debt | 440,562 | 440,562 |
Level 2 | Term loan B facility | Fair Value | ||
Fair value of financial instruments | ||
Long term debt | 432,632 | 432,192 |
Level 2 | Revolving facility | Principal Amount | ||
Fair value of financial instruments | ||
Long term debt | 67,000 | 54,000 |
Level 2 | Revolving facility | Fair Value | ||
Fair value of financial instruments | ||
Long term debt | $ 67,000 | $ 54,000 |
Fair Value of Financial Inst_10
Fair Value of Financial Instruments - Fair Value Measurement (Details) - Designated as hedging instrument - Interest rate swap - USD ($) $ in Thousands | Mar. 31, 2019 | Sep. 30, 2018 |
Other current assets | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | $ 327 | $ 1,045 |
Other assets | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 1,051 | |
Accrued expenses and other current liabilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liabilities | 1,206 | 289 |
Other liabilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liabilities | 1,920 | |
Level 1 | Other current assets | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 0 | 0 |
Level 1 | Other assets | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 0 | |
Level 1 | Accrued expenses and other current liabilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liabilities | 0 | 0 |
Level 1 | Other liabilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liabilities | 0 | |
Level 2 | Other current assets | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 327 | 1,045 |
Level 2 | Other assets | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 1,051 | |
Level 2 | Accrued expenses and other current liabilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liabilities | 1,206 | 289 |
Level 2 | Other liabilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liabilities | 1,920 | |
Level 3 | Other current assets | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 0 | 0 |
Level 3 | Other assets | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 0 | |
Level 3 | Accrued expenses and other current liabilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liabilities | 0 | $ 0 |
Level 3 | Other liabilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liabilities | $ 0 |
Long-Term Debt - Schedule of Lo
Long-Term Debt - Schedule of Long-term Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Sep. 30, 2018 |
Long-term Debt, by Current and Noncurrent [Abstract] | ||
Principal Amount | $ 857,562 | $ 854,562 |
Deferred Debt Issuance Costs | (6,828) | (8,785) |
Carrying Amount | 850,734 | 845,777 |
Less: current portion | 87,000 | 74,000 |
Long-term debt, less current portion, gross | 770,562 | 780,562 |
Long-term debt, less current portion, net | 763,734 | 771,777 |
Revolving facility | ||
Long-term Debt, by Current and Noncurrent [Abstract] | ||
Principal Amount | 67,000 | 54,000 |
Deferred Debt Issuance Costs | 0 | 0 |
Carrying Amount | 67,000 | 54,000 |
Senior secured debt | Term loan A facility | ||
Long-term Debt, by Current and Noncurrent [Abstract] | ||
Principal Amount | 350,000 | 360,000 |
Deferred Debt Issuance Costs | (4,494) | (5,842) |
Carrying Amount | 345,506 | 354,158 |
Senior secured debt | Term loan B facility | ||
Long-term Debt, by Current and Noncurrent [Abstract] | ||
Principal Amount | 440,562 | 440,562 |
Deferred Debt Issuance Costs | (2,334) | (2,943) |
Carrying Amount | $ 438,228 | $ 437,619 |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Details) | 6 Months Ended | ||||||||||||
Mar. 31, 2019USD ($) | Mar. 31, 2018USD ($) | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019GBP (£) | Sep. 30, 2018USD ($) | |
Debt Instrument [Line Items] | |||||||||||||
Principal amount | $ 857,562,000 | $ 854,562,000 | |||||||||||
Proceeds from short-term borrowings | 47,000,000 | $ 60,000,000 | |||||||||||
Repayment of short-term borrowings | 34,000,000 | $ 34,000,000 | |||||||||||
Revolving facility | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Revolving line of credit | 180,000,000 | ||||||||||||
Principal amount | 67,000,000 | 54,000,000 | |||||||||||
Line of credit facility, current borrowing capacity | 113,000,000 | ||||||||||||
Proceeds from short-term borrowings | 47,000,000 | ||||||||||||
Repayment of short-term borrowings | $ 34,000,000 | ||||||||||||
Interest rate at end of period (as a percent) | 5.50% | 5.50% | |||||||||||
Debt instrument, term | 90 days | ||||||||||||
Covenant terms net, debt to EBITDA ratio | 5.5 | 5.5 | |||||||||||
Covenant terms net, debt to EBITDA ratio, current | 4.27 | 4.27 | |||||||||||
Revolving facility | Scenario, forecast | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Covenant terms net, debt to EBITDA ratio | 3 | 4 | 4.75 | 5.25 | |||||||||
Revolving facility | Maximum | Scenario, forecast | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Covenant terms net, debt to EBITDA ratio | 4 | 4 | 4 | 4.75 | 4.75 | ||||||||
Revolving facility | Eurocurrency | Minimum | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Applicable margin rate (as a percent) | 2.00% | ||||||||||||
Revolving facility | Eurocurrency | Maximum | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Applicable margin rate (as a percent) | 3.00% | ||||||||||||
Revolving facility | Alternate base rate | Minimum | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Applicable margin rate (as a percent) | 1.00% | ||||||||||||
Revolving facility | Alternate base rate | Maximum | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Applicable margin rate (as a percent) | 2.00% | ||||||||||||
Foreign line of credit | Wesco Aircraft Europe Limited | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Revolving line of credit | $ 6,500,000 | £ 5,000,000 | |||||||||||
Line of credit facility, current borrowing capacity | £ | £ 5,000,000 | ||||||||||||
Foreign line of credit | Base rate | Wesco Aircraft Europe Limited | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Applicable margin rate (as a percent) | 1.65% | ||||||||||||
Term loan A facility | Senior secured debt | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Principal amount | $ 400,000,000 | ||||||||||||
Principal amount | 350,000,000 | 360,000,000 | |||||||||||
Quarterly payments of debt | $ 10,000,000 | ||||||||||||
Debt instrument, quarterly periodic payment principal percentage, year one (as a percent) | 1.25% | 1.25% | |||||||||||
Interest rate at end of period (as a percent) | 5.50% | 5.50% | |||||||||||
Term loan A facility | Senior secured debt | Eurocurrency | Minimum | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Applicable margin rate (as a percent) | 2.00% | ||||||||||||
Term loan A facility | Senior secured debt | Eurocurrency | Maximum | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Applicable margin rate (as a percent) | 3.00% | ||||||||||||
Term loan A facility | Senior secured debt | Alternate base rate | Minimum | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Applicable margin rate (as a percent) | 1.00% | ||||||||||||
Term loan A facility | Senior secured debt | Alternate base rate | Maximum | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Applicable margin rate (as a percent) | 2.00% | ||||||||||||
Term loan B facility | Senior secured debt | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Principal amount | $ 525,000,000 | ||||||||||||
Principal amount | $ 440,562,000 | $ 440,562,000 | |||||||||||
Interest rate at end of period (as a percent) | 5.00% | 5.00% | |||||||||||
Debt instrument, quarterly periodic payment principal percentage (as a percent) | 0.25% | 0.25% | |||||||||||
Term loan B facility | Senior secured debt | Eurocurrency | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Applicable margin rate (as a percent) | 2.50% | ||||||||||||
Term loan B facility | Senior secured debt | Eurocurrency | Minimum | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument, variable interest rate (as a percent) | 0.75% | ||||||||||||
Term loan B facility | Senior secured debt | Alternate base rate | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Applicable margin rate (as a percent) | 1.50% | ||||||||||||
Term loan B facility | Senior secured debt | Alternate base rate | Minimum | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument, variable interest rate (as a percent) | 1.75% | ||||||||||||
Credit agreement, scenario one | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Excess cash flow percentage | 75.00% | 75.00% | |||||||||||
Credit agreement, scenario two | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Excess cash flow percentage | 50.00% | 50.00% | |||||||||||
Credit agreement, scenario two | Minimum | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Covenant terms net, debt to EBITDA ratio | 3 | 3 | |||||||||||
Credit agreement, scenario two | Maximum | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Covenant terms net, debt to EBITDA ratio | 4 | 4 | |||||||||||
Credit agreement, scenario three | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Excess cash flow percentage | 25.00% | 25.00% | |||||||||||
Credit agreement, scenario three | Minimum | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Covenant terms net, debt to EBITDA ratio | 2.50 | 2.50 | |||||||||||
Credit agreement, scenario three | Maximum | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Covenant terms net, debt to EBITDA ratio | 3 | 3 | |||||||||||
Credit agreement, scenario four | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Covenant terms net, debt to EBITDA ratio | 2.50 | 2.50 | |||||||||||
Excess cash flow percentage | 0.00% | 0.00% |
Long-Term Debt - Deferred Finan
Long-Term Debt - Deferred Financing Costs (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Sep. 30, 2018 |
Debt Instrument [Line Items] | ||
Deferred debt issuance costs | $ 9,002 | $ 11,612 |
Amortization of deferred debt issuance costs | (2,610) | |
Revolving facility | ||
Debt Instrument [Line Items] | ||
Deferred debt issuance costs | 2,174 | 2,827 |
Amortization of deferred debt issuance costs | (653) | |
Senior secured debt | Term loan A facility | ||
Debt Instrument [Line Items] | ||
Deferred debt issuance costs | 4,494 | 5,842 |
Amortization of deferred debt issuance costs | (1,348) | |
Senior secured debt | Term loan B facility | ||
Debt Instrument [Line Items] | ||
Deferred debt issuance costs | 2,334 | $ 2,943 |
Amortization of deferred debt issuance costs | $ (609) |
Comprehensive Income (Details)
Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | ||||
Net income | $ 12,010 | $ 15,000 | $ 18,303 | $ 14,626 |
Foreign currency translation (loss) gain | (22) | 1,389 | (879) | 1,284 |
Unrealized (loss) gain on cash flow hedging instruments | (1,241) | 1,461 | (3,353) | 2,831 |
Comprehensive income | $ 10,747 | $ 17,850 | $ 14,071 | $ 18,741 |
Net Income Per Share (Details)
Net Income Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Earnings Per Share Reconciliation [Abstract] | ||||
Net income | $ 12,010 | $ 15,000 | $ 18,303 | $ 14,626 |
Basic weighted average shares outstanding (in shares) | 99,626,736 | 99,136,015 | 99,555,589 | 99,116,250 |
Dilutive effect of stock options and restricted stock (in shares) | 324,075 | 383,910 | 375,410 | 325,135 |
Dilutive weighted average shares outstanding (in shares) | 99,950,811 | 99,519,925 | 99,930,999 | 99,441,385 |
Basic net income per share (in dollars per share) | $ 0.12 | $ 0.15 | $ 0.18 | $ 0.15 |
Diluted net income per share (in dollars per share) | $ 0.12 | $ 0.15 | $ 0.18 | $ 0.15 |
Common stock equivalents not included in diluted calculation due to anti-dilutive effect (in shares) | 3,171,626 | 2,337,503 | 3,188,879 | 3,115,284 |
Segment Reporting - Operating a
Segment Reporting - Operating and Financial Information by Business Segment (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2019USD ($) | Mar. 31, 2018USD ($) | Mar. 31, 2019USD ($)reportable_segment | Mar. 31, 2018USD ($) | Sep. 30, 2018USD ($) | |
Segment Reporting [Line Items] | |||||
Number of reportable segments | reportable_segment | 3 | ||||
Net sales | $ 426,474 | $ 390,183 | $ 821,785 | $ 753,274 | |
Income from operations | 29,839 | 33,196 | 51,918 | 57,768 | |
Interest expense, net | (12,388) | (11,965) | (25,302) | (23,803) | |
Capital expenditures | 5,756 | 1,574 | 7,996 | 2,909 | |
Depreciation and amortization | 7,067 | 7,285 | 14,165 | 14,541 | |
Total assets | 1,817,515 | 1,817,515 | $ 1,789,476 | ||
Goodwill | 266,644 | 266,644 | 266,644 | ||
Americas | |||||
Segment Reporting [Line Items] | |||||
Goodwill | 204,183 | 204,183 | 204,183 | ||
EMEA | |||||
Segment Reporting [Line Items] | |||||
Goodwill | 51,190 | 51,190 | 51,190 | ||
APAC | |||||
Segment Reporting [Line Items] | |||||
Goodwill | 11,271 | 11,271 | 11,271 | ||
Operating segments | Americas | |||||
Segment Reporting [Line Items] | |||||
Net sales | 347,301 | 313,250 | 668,426 | 602,765 | |
Income from operations | 35,393 | 35,691 | 64,384 | 60,888 | |
Interest expense, net | (11,143) | (10,943) | (22,400) | (21,591) | |
Capital expenditures | 5,087 | 1,412 | 6,547 | 2,370 | |
Depreciation and amortization | 6,115 | 6,283 | 12,281 | 12,659 | |
Total assets | 1,500,383 | 1,500,383 | 1,485,453 | ||
Goodwill | 204,183 | 204,183 | 204,183 | ||
Operating segments | EMEA | |||||
Segment Reporting [Line Items] | |||||
Net sales | 66,300 | 68,147 | 128,038 | 132,385 | |
Income from operations | 1,778 | 6,830 | 4,274 | 11,982 | |
Interest expense, net | (1,220) | (997) | (2,851) | (2,161) | |
Capital expenditures | 433 | 75 | 924 | 400 | |
Depreciation and amortization | 865 | 929 | 1,714 | 1,735 | |
Total assets | 250,986 | 250,986 | 248,937 | ||
Goodwill | 51,190 | 51,190 | 51,190 | ||
Operating segments | APAC | |||||
Segment Reporting [Line Items] | |||||
Net sales | 12,873 | 8,786 | 25,321 | 18,124 | |
Income from operations | 1,156 | 777 | 2,230 | 2,275 | |
Interest expense, net | (25) | (25) | (51) | (51) | |
Capital expenditures | 236 | 87 | 525 | 139 | |
Depreciation and amortization | 87 | 73 | 170 | 147 | |
Total assets | 66,146 | 66,146 | 55,086 | ||
Goodwill | 11,271 | 11,271 | $ 11,271 | ||
Unallocated Corporate Costs | |||||
Segment Reporting [Line Items] | |||||
Net sales | 0 | 0 | 0 | 0 | |
Income from operations | (8,488) | (10,102) | (18,970) | (17,377) | |
Interest expense, net | 0 | 0 | 0 | 0 | |
Capital expenditures | 0 | 0 | 0 | 0 | |
Depreciation and amortization | $ 0 | $ 0 | $ 0 | $ 0 |
Segment Reporting - Product and
Segment Reporting - Product and Services Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Sales | $ 426,474 | $ 390,183 | $ 821,785 | $ 753,274 |
% of Total | 100.00% | 100.00% | ||
Hardware | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Sales | $ 198,759 | $ 380,858 | ||
% of Total | 46.60% | 46.30% | ||
Chemicals (1) | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Sales | $ 178,105 | $ 346,614 | ||
% of Total | 41.80% | 42.20% | ||
Electronic components | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Sales | $ 31,581 | $ 60,356 | ||
% of Total | 7.40% | 7.30% | ||
Bearings | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Sales | $ 6,076 | $ 14,526 | ||
% of Total | 1.40% | 1.80% | ||
Machined parts and other | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Sales | $ 11,953 | $ 19,431 | ||
% of Total | 2.80% | 2.40% | ||
Operating segments | Americas | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Sales | $ 347,301 | 313,250 | $ 668,426 | 602,765 |
% of Total | 100.00% | 100.00% | ||
Operating segments | Americas | Hardware | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Sales | $ 165,163 | $ 316,160 | ||
% of Total | 47.60% | 47.30% | ||
Operating segments | Americas | Chemicals (1) | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Sales | $ 140,293 | $ 271,905 | ||
% of Total | 40.40% | 40.70% | ||
Operating segments | Americas | Electronic components | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Sales | $ 29,459 | $ 55,924 | ||
% of Total | 8.50% | 8.40% | ||
Operating segments | Americas | Bearings | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Sales | $ 3,710 | $ 9,329 | ||
% of Total | 1.00% | 1.30% | ||
Operating segments | Americas | Machined parts and other | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Sales | $ 8,676 | $ 15,108 | ||
% of Total | 2.50% | 2.30% | ||
Operating segments | EMEA | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Sales | $ 66,300 | 68,147 | $ 128,038 | 132,385 |
% of Total | 100.00% | 100.00% | ||
Operating segments | EMEA | Hardware | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Sales | $ 29,466 | $ 56,605 | ||
% of Total | 44.40% | 44.20% | ||
Operating segments | EMEA | Chemicals (1) | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Sales | $ 30,656 | $ 60,995 | ||
% of Total | 46.20% | 47.60% | ||
Operating segments | EMEA | Electronic components | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Sales | $ 1,835 | $ 3,794 | ||
% of Total | 2.80% | 3.00% | ||
Operating segments | EMEA | Bearings | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Sales | $ 1,377 | $ 3,013 | ||
% of Total | 2.10% | 2.40% | ||
Operating segments | EMEA | Machined parts and other | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Sales | $ 2,966 | $ 3,631 | ||
% of Total | 4.50% | 2.80% | ||
Operating segments | APAC | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Sales | $ 12,873 | $ 8,786 | $ 25,321 | $ 18,124 |
% of Total | 100.00% | 100.00% | ||
Operating segments | APAC | Hardware | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Sales | $ 4,130 | $ 8,093 | ||
% of Total | 32.10% | 32.00% | ||
Operating segments | APAC | Chemicals (1) | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Sales | $ 7,156 | $ 13,714 | ||
% of Total | 55.60% | 54.20% | ||
Operating segments | APAC | Electronic components | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Sales | $ 287 | $ 638 | ||
% of Total | 2.20% | 2.50% | ||
Operating segments | APAC | Bearings | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Sales | $ 989 | $ 2,184 | ||
% of Total | 7.70% | 8.60% | ||
Operating segments | APAC | Machined parts and other | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Sales | $ 311 | $ 692 | ||
% of Total | 2.40% | 2.70% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Provision for income taxes | $ 5,127 | $ 6,123 | $ 7,782 | $ 19,491 |
Effective tax rate | 29.90% | 29.00% | 29.80% | 57.10% |
Effective income tax rate, increase (decrease) | (27.30%) | 90.00% | ||
Effective income tax rate, without adjustments | 29.00% | 29.40% | 29.00% | 29.10% |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance (in shares) | 99,557,885 | |||
Beginning balance | $ 698,322 | $ 652,409 | $ 692,469 | $ 649,731 |
Issuance of common stock | 0 | 34 | 13 | 32 |
Settlement on restricted stock tax withholding | (74) | (428) | (100) | |
Stock-based compensation expense | 2,114 | 1,873 | 5,058 | 3,688 |
Net income | 12,010 | 15,000 | 18,303 | 14,626 |
Other comprehensive income / loss | $ (1,263) | 2,850 | $ (4,232) | 4,115 |
Ending balance (in shares) | 99,743,379 | 99,743,379 | ||
Ending Balance | $ 711,183 | $ 672,092 | $ 711,183 | $ 672,092 |
Common Stock | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance (in shares) | 99,749,451 | 99,517,543 | 99,557,885 | 99,450,902 |
Beginning balance | $ 100 | $ 99 | $ 99 | $ 99 |
Issuance of common stock (in shares) | (6,072) | (26,895) | 185,494 | 39,746 |
Issuance of common stock | $ 1 | $ 0 | ||
Ending balance (in shares) | 99,743,379 | 99,490,648 | 99,743,379 | 99,490,648 |
Ending Balance | $ 100 | $ 99 | $ 100 | $ 99 |
Additional Paid-in Capital | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance | 447,059 | 438,310 | 444,531 | 436,522 |
Issuance of common stock | 34 | 12 | 33 | |
Settlement on restricted stock tax withholding | (74) | (428) | (100) | |
Stock-based compensation expense | 2,114 | 1,873 | 5,058 | 3,688 |
Ending Balance | 449,173 | 440,143 | 449,173 | 440,143 |
Accumulated Other Comprehensive Loss | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance | (85,949) | (83,361) | (82,980) | (84,626) |
Other comprehensive income / loss | (1,263) | 2,850 | (4,232) | 4,115 |
Ending Balance | (87,212) | (80,511) | (87,212) | (80,511) |
Retained Earnings | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance | 337,112 | 297,361 | 330,819 | 297,736 |
Issuance of common stock | (1) | |||
Net income | 12,010 | 15,000 | 18,303 | 14,626 |
Ending Balance | $ 349,122 | $ 312,361 | $ 349,122 | $ 312,361 |