Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Apr. 30, 2018 | May 18, 2018 | |
Document And Entity Information | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Apr. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Entity Current Reporting Status | Yes | |
Entity Registrant Name | KLX Inc. | |
Entity Central Index Key | 1,617,898 | |
Current Fiscal Year End Date | --01-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 50,741,488 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Apr. 30, 2018 | Jan. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 298.4 | $ 255.3 |
Accounts receivable–trade, less allowance for doubtful accounts ($11.9 at April 30, 2018 and $12.0 at January 31, 2018) | 355.8 | 316.1 |
Inventories, net | 1,408.3 | 1,407.9 |
Other current assets | 46.9 | 51.7 |
Total current assets | 2,109.4 | 2,031 |
Property and equipment, net of accumulated depreciation ($199.9 at April 30, 2018 and $191.1 at January 31, 2018) | 298.6 | 286.4 |
Goodwill | 1,047.6 | 1,056.8 |
Identifiable intangible assets, net | 302.3 | 308.6 |
Deferred income taxes | 65.3 | 74.5 |
Other assets | 33.9 | 32.7 |
Total assets | 3,857.1 | 3,790 |
Current liabilities: | ||
Accounts payable | 212.3 | 180.8 |
Accrued liabilities | 118.1 | 106.7 |
Total current liabilities | 330.4 | 287.5 |
Long-term debt | 1,185.2 | 1,184.6 |
Deferred income taxes | 5.8 | 5.9 |
Other non-current liabilities | 42.1 | 42.1 |
Commitments, contingencies and off-balance sheet arrangements (Note 9) | ||
Stockholders' equity: | ||
Preferred stock, $0.01 par value; 1.0 million shares authorized; no shares outstanding | ||
Common stock, $0.01 par value; 250.0 million shares authorized; 54.6 million shares issued as of April 30, 2018 and January 31, 2018 | 0.5 | 0.5 |
Additional paid-in capital | 2,763.7 | 2,756.5 |
Treasury stock: 3.8 million shares at April 30, 2018 and January 31, 2018 | (182.9) | (182.7) |
Accumulated deficit | (250.4) | (280) |
Accumulated other comprehensive loss | (37.3) | (24.4) |
Total stockholders' equity | 2,293.6 | 2,269.9 |
Total liabilities and equity | $ 3,857.1 | $ 3,790 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Apr. 30, 2018 | Jan. 31, 2018 |
Consolidated Balance Sheets | ||
Accounts receivable - trade, allowance for doubtful accounts | $ 11.9 | $ 12 |
Property and equipment, accumulated depreciation | $ 199.9 | $ 191.1 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 54,600,000 | 54,600,000 |
Treasury stock | 3,800,000 | 3,800,000 |
Consolidated Statements of Earn
Consolidated Statements of Earnings and Comprehensive Income - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Apr. 30, 2018 | Apr. 30, 2017 | |
Consolidated Statements of Earnings and Comprehensive Income | ||
Product revenues | $ 388.1 | $ 347.5 |
Service revenues | 111 | 63.8 |
Total revenues | 499.1 | 411.3 |
Cost of sales - products | 277.7 | 242.5 |
Cost of sales - services | 82 | 55.9 |
Total cost of sales | 359.7 | 298.4 |
Selling, general and administrative | 78.2 | 64.3 |
Operating earnings | 61.2 | 48.6 |
Interest expense | 18.9 | 19 |
Earnings before income taxes | 42.3 | 29.6 |
Income tax expense | 10.6 | 11.2 |
Net earnings | 31.7 | 18.4 |
Other comprehensive (loss) income: | ||
Foreign currency translation adjustment | (12.9) | 4.8 |
Comprehensive income | $ 18.8 | $ 23.2 |
Net earnings per share - basic | $ 0.63 | $ 0.36 |
Net earnings per share - diluted | $ 0.62 | $ 0.36 |
Weighted average common shares - basic | 50.1 | 51.1 |
Weighted average common shares - diluted | 50.9 | 51.8 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 30, 2018 | Apr. 30, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net earnings | $ 31.7 | $ 18.4 |
Adjustments to reconcile net earnings (loss) to net cash flows provided by (used in) operating activities: | ||
Depreciation and amortization | 19.3 | 16.5 |
Deferred income taxes | 9.4 | 9.7 |
Non-cash compensation | 5.2 | 5.9 |
Amortization of deferred financing fees | 1.1 | 1.1 |
Provision for inventory reserve | 3.9 | 4.7 |
Change in allowance for doubtful accounts and sales returns | (0.4) | (2.2) |
Loss on disposal of property and equipment | 0.3 | 0.4 |
Changes in operating assets and liabilities, net of effects from acquisitions: | ||
Accounts receivable | (39.3) | (43) |
Inventories | (4.3) | (15.9) |
Other current and non-current assets | 2.5 | (8.3) |
Accounts payable | 32.1 | 16.1 |
Other current and non-current liabilities | 11.9 | 16.6 |
Net cash flows provided by operating activities | 73.4 | 20 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Capital expenditures | (27) | (14.5) |
Net cash flows used in investing activities | (27) | (14.5) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Purchase of treasury stock | (0.2) | (14.5) |
Net cash flows used in financing activities | (0.2) | (14.5) |
Effect of foreign exchange rate changes on cash and cash equivalents | (3.1) | 0.8 |
Net increase (decrease) in cash and cash equivalents | 43.1 | (8.2) |
Cash and cash equivalents, beginning of period | 255.3 | 277.3 |
Cash and cash equivalents, end of period | 298.4 | 269.1 |
Cash paid during period for: | ||
Income taxes paid, net of refunds | 2.4 | 1.2 |
Interest | 0.5 | 0.5 |
Supplemental schedule of non-cash activities: | ||
Accrued property additions | $ 6.6 | $ 4.3 |
Description of Business and Bas
Description of Business and Basis of Presentation | 3 Months Ended |
Apr. 30, 2018 | |
Description of Business and Basis of Presentation | |
Description of Business and Basis of Presentation | Note 1. Description of Business and Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. All adjustments which, in the opinion of management, are considered necessary for a fair presentation of the results of operations for the periods shown are of a normal recurring nature and have been reflected in the condensed consolidated financial statements. The results of operations for the periods presented are not necessarily indicative of the results expected for the full fiscal year or for any future period. The information included in these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and accompanying notes included in the KLX Inc. (the “Company” or “KLX”) Annual Report on Form 10-K (the “2017 Form 10-K”) for the fiscal year ended January 31, 2018 (“Fiscal 2017”). The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and related disclosures. Actual results could differ from those estimates. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 3 Months Ended |
Apr. 30, 2018 | |
Recent Accounting Pronouncements | |
Recent Accounting Pronouncements | Note 2. Recent Accounting Pronouncements In May 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-09, Compensation–Stock Compensation (Topic 718) . This ASU was issued to provide clarity and reduce diversity in practice regarding the application of guidance on the modification of equity awards. The ASU states that an entity should account for the effects of a modification unless all of the following are met: the fair value, vesting conditions and the classification of the instrument as equity or liability of the modified award is the same as that of the original award immediately before such award is modified. The guidance is effective for annual reporting periods beginning after December 15, 2017, and interim periods within those annual reporting periods with early adoption permitted and should be applied prospectively to an award modified on or after the adoption date. The Company does not expect a material impact upon adoption of this ASU to its condensed consolidated financial statements as the Company historically has accounted for all modifications in accordance with Topic 718 and has not been subject to the exception described under this ASU. In February 2016, the FASB issued ASU 2016-02, Leases , which supersedes ASC Topic 840, Leases, and creates a new topic, ASC Topic 842, Leases . This update is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Earlier adoption is permitted. ASU 2016-02 requires lessees to recognize a lease liability and a lease asset for all leases, including operating leases, with a term greater than 12 months on its balance sheet. The update also expands the required quantitative and qualitative disclosures surrounding leases. ASU 2016-02 will be applied using a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The Company is currently evaluating the effect of this update on its condensed consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers , which updated the guidance in ASC Topic 606, Revenue Recognition . The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should identify the contract(s) with a customer, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to the performance obligations in the contract and recognize revenue when (or as) the entity satisfies a performance obligation. In August 2015, the FASB deferred the effective date for implementation of ASU 2014-09 by one year and during 2016, the FASB issued various related accounting standard updates, which clarified revenue accounting principles and provided supplemental adoption guidance. The guidance under ASU 2014-09 is effective for fiscal years beginning after December 15, 2017, including interim reporting periods within that year. The Company adopted the new standard and its related amendments (collectively known as ASC Topic 606) in the first quarter of 2018 using the modified retrospective method of adoption, which resulted in no changes to the opening consolidated balance sheet as of February 1, 2018. Prior period consolidated statements of earnings and comprehensive income remain unchanged. The additional disclosures required by ASC Topic 606 have been included below and in Note 11. Except for the changes below, no material changes have been made to the Company's significant accounting policies disclosed in Note 1, Description of Business and Summary of Significant Accounting Policies, in its 2017 Form 10-K. Revenue from Contracts with Customers Revenue Recognition — Under ASC Topic 606, the Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC Topic 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company recognizes revenue in the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. Revenues from product sales are recognized when the customer obtains control of the Company’s product, which occurs at a point in time, typically upon delivery in accordance with the terms of the sales contract. Management provides allowances for credits and returns, based on historic experience, and adjusts such allowances as considered necessary. In connection with the sales of its products, the Company also provides certain logistics services which include inventory management and replenishment, supply chain solutions such as third-party logistics programs, packaging and bar coding, parts kitting, quality assurance testing and inspection, purchasing assistance programs and electronic data interchange capability. The price of such services is generally included in the price of the products delivered to the customer, and revenues are recognized upon delivery of the product, at which point, the customer has obtained control of the Company’s product. The Company does not account for these service activities separate from the related part sales as the services are inputs required to fulfill part orders received from customers. Service revenues from oilfield services (product/service lines (“PSLs”)) are recorded over time throughout and for the duration of the service or rental period. Contracts in the Company’s Energy Services Group (“ESG”) segment are pursuant to a master services agreement (“MSA”) combined with a completed field ticket or a work order, which sets forth the details of the specific transaction including pricing. Backlog is not a relevant measure for the Company’s Aerospace Solutions Group (“ASG”) segment, given the long-term nature of its contracts with its customers. Few, if any, include minimum purchase requirements, annually or over the term of the agreement. The Company’s ESG segment operates under MSAs with its oil and gas customers, which set forth the terms and conditions for the provision of services and the rental of equipment. Rental tools and service contracts are typically based on a day rate with rates based on the type of equipment and competitive conditions. As a result, the Company do not record backlog. |
Business Combinations
Business Combinations | 3 Months Ended |
Apr. 30, 2018 | |
Business Combinations | |
Business Combinations | Note 3. Business Combinations The Company acquired two new product lines immediately prior to the end of the fourth quarter of Fiscal 2017. The first purchase includes high performance fasteners and precision components and assemblies dedicated to aircraft engine manufacturing. The second group of products will enable the Company to offer its customers technical products, systems and expertise in motion and control applications, including hydraulics, pneumatics, fluid connectors, filtration, electrical control systems, seals, compressors and engineered systems for both OEM and aftermarket applications. The Company acquired the two product lines for an aggregate purchase price of $64.8, which were accounted for as purchases under FASB ASC 805, Business Combinations (“ASC 805”) and primarily consist of inventory, accounts receivable, goodwill and intangibles and accounts payable and other current liabilities. The acquisitions did not have a material impact on the condensed consolidated financial statements. The valuation of the acquired assets related to the product line acquisitions are not yet complete and, as such, the Company has not yet finalized its allocation of the purchase price for the acquisitions. |
Inventories
Inventories | 3 Months Ended |
Apr. 30, 2018 | |
Inventories | |
Inventories | Note 4. Inventories Inventories, made up of finished goods, consist primarily of aerospace fasteners and consumables. The Company values inventories at the lower of cost and net realizable value, using first‑in, first‑out or weighted average cost method. The Company reviews inventory quantities on hand and records a provision for excess and obsolete inventory based primarily on historical demand, estimated product demand to support contractual supply agreements with its customers and the age of the inventory, among other factors. Demand for the Company’s products can fluctuate from period to period depending on customer activity. In accordance with industry practice, inventories include amounts relating to long-term contracts with long production cycles, some of which are not expected to be realized within one year. In addition, the Company supports a substantial portion of the global fleet of aircraft in service, and in its capacity as a stocking distributor will acquire and hold inventories for aircraft maintenance at periodic intervals as mandated by the Federal Aviation Administration (“FAA”) or similar regulatory agencies. Based on historical experience, the support of the aftermarket activities with products such as those which the Company sells will necessitate holding inventory in excess of the amount required to support new build production activity contracts. Obsolescence has historically been immaterial for the Company due to the long life of an aircraft and nature of the products sold by the Company. Inventory with a limited shelf life is continually monitored and reserved for in advance of expiration. The annual provision for inventory with limited shelf life has historically been immaterial. Inventory reserves were approximately $75.0 and $72.4 as of April 30, 2018 and January 31, 2018, respectively. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Apr. 30, 2018 | |
Goodwill and Intangible Assets | |
Goodwill and Intangible Assets | Note 5. Goodwill and Intangible Assets The table below sets forth the intangible assets by major asset class, all of which were acquired through business purchase transactions: April 30, 2018 January 31, 2018 Useful Life Original Accumulated Net Book Original Accumulated Net Book (Years) Cost Amortization Value Cost Amortization Value Customer contracts and relationships - 30 $ 412.1 $ 132.9 $ 279.2 $ 413.6 $ 128.8 $ 284.8 Covenants not to compete 5 2.2 0.8 1.4 2.2 0.7 1.5 Developed technologies 15 3.3 0.5 2.8 3.3 0.5 2.8 Trade names Indefinite 18.9 - 18.9 19.5 - 19.5 $ 436.5 $ 134.2 $ 302.3 $ 438.6 $ 130.0 $ 308.6 Amortization expense associated with identifiable intangible assets was $5.0 and $4.8 for the three months ended April 30, 2018 and 2017, respectively. The Company currently expects to recognize amortization expense related to intangible assets of approximately $20.0 in each of the next five fiscal years (primarily related to our ASG business). The future amortization amounts are estimates. Actual future amortization expense may be different due to future acquisitions, impairments, changes in amortization periods or other factors such as changes in exchange rates for assets acquired outside the United States. The Company expenses costs to renew or extend the term of a recognized intangible asset. Goodwill decreased by $9.2 as compared to January 31, 2018 primarily as a result of foreign currency translation adjustments. |
Accrued Liabilities
Accrued Liabilities | 3 Months Ended |
Apr. 30, 2018 | |
Accrued Liabilities | |
Accrued Liabilities | Note 6. Accrued Liabilities Accrued liabilities consisted of the following : April 30, January 31, 2018 2018 Accrued salaries, vacation and related benefits $ 36.8 $ 37.2 Accrued commissions 6.4 10.9 Income taxes payable 10.4 10.7 Accrued interest 29.4 11.7 Other accrued liabilities 35.1 36.2 $ 118.1 $ 106.7 |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Apr. 30, 2018 | |
Long-Term Debt | |
Long-Term Debt | Note 7. Long-Term Debt As of April 30, 2018, long-term debt consisted of $1,200.0 aggregate principal amount of the Company’s 5.875% senior unsecured notes due 2022 (the “5.875% Notes”). On a net basis, after taking into consideration the debt issue costs for the 5.875% Notes total debt was $1,185.2. As of April 30, 2018, the Company also had a $750.0 undrawn secured revolving credit facility pursuant to a credit agreement dated as of December 16, 2014 and amended and restated on May 19, 2015 (the “Revolving Credit Facility”). Borrowings under the Revolving Credit Facility bear interest at an annual rate equal to the London interbank offered rate (“LIBOR”) (as defined in the Revolving Credit Facility) plus the applicable margin (as defined). No amounts were outstanding under the Revolving Credit Facility as of April 30, 2018 or January 31, 2018. The Revolving Credit Facility is tied to a borrowing base formula and has no maintenance financial covenants. This Revolving Credit Facility matures in May 2020. The credit agreement is collateralized by the Company’s assets and contains customary affirmative covenants, negative covenants, restrictions on the payment of dividends and the repurchase of its stock, and conditions precedent for borrowings, all of which were met as of April 30, 2018. Letters of credit issued under the Revolving Credit Facility aggregated $5.9 and $5.8 at April 30, 2018 and January 31, 2018, respectively. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Apr. 30, 2018 | |
Fair Value Measurements | |
Fair Value Measurements | Note 8. Fair Value Measurements All short-term financial instruments are generally carried at amounts that approximate estimated fair value. The fair value is the price at which an asset could be exchanged in a current transaction between knowledgeable, willing parties. Assets measured at fair value are categorized based upon the lowest level of significant input to the valuations. Level 1 – quoted prices in active markets for identical assets and liabilities. Level 2 – quoted prices for identical assets and liabilities in markets that are not active, or observable inputs other than quoted prices in active markets for identical assets and liabilities. Level 3 – unobservable inputs in which there is little or no market data available, which require the reporting entity to develop its own assumptions. The carrying amounts of cash and cash equivalents (which the Company classifies as Level 1 assets), accounts receivable – trade and accounts payable represent their respective fair values due to their short-term nature. There was no debt outstanding under the Revolving Credit Facility as of April 30, 2018. The fair value of the Company’s 5.875% Notes, based on market prices for publicly-traded debt (which the Company classifies as Level 2 inputs), was $1,252.6 and $1,251.0 as of April 30, 2018 and January 31, 2018, respectively. |
Commitments, Contingencies and
Commitments, Contingencies and Off-Balance Sheet Arrangements | 3 Months Ended |
Apr. 30, 2018 | |
Commitments, Contingencies and Off-Balance Sheet Arrangements | |
Commitments, Contingencies and Off-Balance Sheet Arrangements | Note 9. Commitments, Contingencies and Off-Balance Sheet Arrangements Lease Commitments - The Company finances its use of certain facilities and equipment under committed lease arrangements provided by various institutions. Since the terms of these arrangements meet the accounting definition of operating lease arrangements, the aggregate sum of future minimum lease payments is not reflected on the condensed consolidated balance sheets. At April 30, 2018, future minimum lease payments under these arrangements approximated $188.4, the majority of which related to long-term real estate leases. Future payments under operating leases with terms greater than one year as of April 30, 2018 are as follows: Year Ending January 31, 2019 $ 24.9 2020 31.9 2021 26.1 2022 21.1 2023 15.4 Thereafter 69.0 Total $ 188.4 Litigation - The Company is a defendant in various legal actions arising in the normal course of business, the outcomes of which, in the opinion of management, neither individually nor in the aggregate are likely to result in a material adverse effect on the Company’s condensed consolidated financial statements. Indemnities, Commitments and Guarantees - During its normal course of business, the Company has made certain indemnities, commitments and guarantees under which it may be required to make payments in relation to certain transactions. These indemnities include indemnities to various lessors in connection with facility leases for certain claims arising from such facility or lease and indemnities to other parties to certain acquisition agreements. The duration of these indemnities, commitments and guarantees varies, and in certain cases, is indefinite. Many of these indemnities, commitments and guarantees provide for limitations on the maximum potential future payments the Company could be obligated to make. However, the Company is unable to estimate the maximum amount of liability related to its indemnities, commitments and guarantees because such liabilities are contingent upon the occurrence of events that are not reasonably determinable. Management believes that any liability for these indemnities, commitments and guarantees would not be material to the accompanying condensed consolidated financial statements. Accordingly, no significant amounts have been accrued for indemnities, commitments and guarantees. The Company has employment agreements with certain key members of management with three year initial terms and which renew for one additional year on each anniversary date. The Company’s employment agreements generally provide for certain protections in the event of a change of control. These protections generally include the payment of severance and related benefits under certain circumstances in the event of a change of control. |
Accounting for Stock-Based Comp
Accounting for Stock-Based Compensation | 3 Months Ended |
Apr. 30, 2018 | |
Accounting for Stock-Based Compensation | |
Accounting for Stock-Based Compensation | Note 10. Accounting for Stock-Based Compensation The Company has a Long-Term Incentive Plan (“LTIP”) under which the Company’s Compensation Committee has the authority to grant stock options, stock appreciation rights, restricted stock, restricted stock units or other forms of equity-based or equity-related awards. The Company accounts for share-based compensation arrangements in accordance with the provisions of FASB ASC 718, Compensation—Stock Compensation , whereby share-based compensation cost is measured on the date of grant, based on the fair value of the award, and is recognized over the requisite service period. Compensation cost recognized during the three months ended April 30, 2018 and 2017 related to KLX restricted stock and stock options was $4.9 and $5.7, respectively. Unrecognized compensation expense related to these grants was $33.3 at April 30, 2018. KLX has established a qualified Employee Stock Purchase Plan, the terms of which allow for qualified employees (as defined in the Plan) to participate in the purchase of designated shares of KLX’s common stock at a price equal to 85% of the closing price on the last business day of each semi ‑ annual stock purchase period. The fair value of employee purchase rights represents the difference between the closing price of KLX’s shares on the date of purchase and the purchase price of the shares. Compensation cost was $0.1 and $0.1 for the three months ended April 30, 2018 and 2017, respectively. |
Segment Reporting
Segment Reporting | 3 Months Ended |
Apr. 30, 2018 | |
Segment Reporting | |
Segment Reporting | Note 11. Segment Reporting The Company is organized based on the products and services it offers. The Company’s reportable segments which are also its operating segments, are comprised of ASG and ESG. The segments regularly report their results of operations and make requests for capital expenditures and acquisition funding to the Company’s chief operational decision-making group (“CODM”). This group is comprised of the Chairman and Chief Executive Officer and the President and Chief Operating Officer. As a result, the CODM has determined the Company has two reportable segments. The Company has not included product line information for the ASG segment due to the similarity of the product offerings and services and the impracticality of determining such information. The following table presents revenues and operating earnings (losses) by reportable segment: THREE MONTHS ENDED APRIL 30, APRIL 30, Revenues 2018 2017 Aerospace Solutions Group $ 388.1 $ 347.5 Energy Services Group 111.0 63.8 Total revenues 499.1 411.3 Operating earnings (loss) (1) Aerospace Solutions Group 54.7 58.7 Energy Services Group 6.5 (10.1) Total operating earnings 61.2 48.6 Interest expense 18.9 19.0 Earnings before income taxes $ 42.3 $ 29.6 (1) Operating earnings (loss) include an allocation of employee benefits and general and administrative costs primarily based on the proportion of each segment’s number of employees for the three months ended April 30, 2018 and 2017. The following table presents capital expenditures by reportable segment: THREE MONTHS ENDED APRIL 30, APRIL 30, 2018 2017 Aerospace Solutions Group $ 10.3 $ 2.7 Energy Services Group 16.7 11.8 $ 27.0 $ 14.5 Corporate capital expenditures have been allocated to the above segments based on each segment’s percentage of total capital expenditures. Goodwill was $1,047.6 and $1,056.8 as of April 30, 2018 and January 31, 2018, respectively, and is all related to ASG. The following table presents total assets by reportable segment: April 30, January 31, 2018 2018 Aerospace Solutions Group $ 3,532.8 $ 3,495.8 Energy Services Group 324.3 294.2 $ 3,857.1 $ 3,790.0 Corporate assets (primarily cash and cash equivalents) of $292.9 and $263.6 at April 30, 2018 and January 31, 2018, respectively, have been allocated to the above segments based on each segment’s percentage of total assets. The Company operates principally in three geographic areas, the United States, Europe (primarily Germany) and emerging markets, such as Asia, the Pacific Rim and the Middle East. The following table presents revenues by reportable segment based on the originating location for the quarter ended April 30, 2018. Aerospace Solutions Group Energy Services Group Revenues: Domestic $ 386.1 $ 111.0 Foreign 2.0 — $ 388.1 $ 111.0 Segment revenues by geographic area, based on destination, for the quarter ended April 30, 2018 were as follows: Aerospace Solutions Group Energy Services Group % of % of Revenues Revenues Revenues Revenues United States $ 217.6 56.1 % $ 111.0 100.0 % Europe 98.8 25.4 % — — % Asia, Pacific Rim, Middle East and other 71.7 18.5 % — — % Total revenues $ 388.1 100.0 % $ 111.0 100.0 % |
Net Earnings Per Common Share
Net Earnings Per Common Share | 3 Months Ended |
Apr. 30, 2018 | |
Net Earnings Per Common Share | |
Net Earnings Per Common Share | Note 12. Net Earnings Per Common Share Basic net earnings per common share is computed using the weighted average common shares outstanding during the period. Diluted net earnings per common share is computed by using the weighted average common shares outstanding including the dilutive effect of stock options, shares issued under the KLX LTIP and restricted shares based on an average share price during the period. For the three months ended April 30, 2018 and 2017, no shares of the Company’s common stock were excluded from the determination of diluted earnings per common share because their effect would have been anti-dilutive. The computations of basic and diluted earnings per share for the three months ended April 30, 2018 and 2017 are as follows: THREE MONTHS ENDED APRIL 30, APRIL 30, 2018 2017 Net earnings $ 31.7 $ 18.4 (Shares in millions) Basic weighted average common shares 50.1 51.1 Effect of dilutive securities - dilutive securities 0.8 0.7 Diluted weighted average common shares 50.9 51.8 Basic net earnings per common share $ 0.63 $ 0.36 Diluted net earnings per common share $ 0.62 $ 0.36 |
Income Taxes
Income Taxes | 3 Months Ended |
Apr. 30, 2018 | |
Income Taxes | |
Income Taxes | Note 13. Income Taxes In accordance with FASB ASC 740, Income Taxes , the Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. As of April 30, 2018 and 2017, the Company had $9.6 and $8.5, respectively, of uncertain tax positions, including accrued interest of $1.4 and $1.2 at April 30, 2018 and 2017, respectively, all of which would affect the Company’s effective tax rate if recognized. Pursuant to the terms of the Tax Sharing Agreement with our former parent, B/E Aerospace, the Company may be liable for income tax in certain foreign jurisdictions arising from the examination of tax years during which the Company was part of the B/E Group. The statute of limitations in these foreign jurisdictions is open for tax years 2007-2014. The Securities and Exchange Commission (“SEC”) staff issued Staff Accounting Bulletin No. 118 (“SAB 118”), which provides guidance on accounting for the tax effects of the Tax Cut and Jobs Act of 2017 (the “2017 Tax Act”). SAB 118 provides a measurement period that should not extend beyond one year from the 2017 Tax Act enactment date for companies to complete the accounting relating to the 2017 Tax Act under the Income Taxes Topic of the FASB ASC. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the 2017 Tax Act for which the accounting under the Income Taxes Topic of the FASB ASC is complete. To the extent that a company's accounting for certain income tax effects of the 2017 Tax Act is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate in its financial statements. If a company cannot determine a provisional estimate to be included in its financial statements, it should continue to apply the Income Taxes Topic of the FASB ASC on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the 2017 Tax Act. The ultimate impact of the 2017 Tax Act in the Company's financial statements is provisional with regard to certain foreign tax provisions and may differ from its estimates due to changes in the interpretations and assumptions made by the Company as well as additional regulatory guidance that may be issued. No changes were made to the estimate as of April 30, 2018. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Apr. 30, 2018 | |
Subsequent Events | |
Subsequent Events | Note 14. Subsequent Events On April 30, 2018, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with The Boeing Company, a Delaware corporation (“Boeing”), and Kelly Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of Boeing (“Merger Sub”), pursuant to which Boeing has agreed to acquire ASG. In addition, the Company announced its intention to spin-off its ESG business (“KLX Energy Services”) to its stockholders. Upon the terms and subject to the conditions set forth in the Merger Agreement, at the closing, Merger Sub will merge with and into the Company, with the Company surviving as a direct or indirect wholly-owned subsidiary of Boeing (the “Merger”). At the effective time of the Merger (the “Effective Time”), each share of KLX common stock that is issued and outstanding immediately prior to the Effective Time (other than shares of KLX common stock (i) held by KLX as treasury stock, (ii) held, directly or indirectly, by Boeing or Merger Sub immediately prior to the Effective Time or (iii) that are outstanding immediately prior to the Effective Time and that are held by any person who is entitled to demand, and properly demands, appraisal of such shares pursuant to, and who complies in all respects with, Section 262 of the Delaware General Corporation Law) will be converted into the right to receive $63.00 per share in cash, without interest. As a result, the shareholders will have received the $63.00 per share as well as the shares in the spin-off business, KLX Energy Services. The respective boards of directors of KLX and Boeing have unanimously approved the Merger Agreement, and the board of directors of KLX has agreed to recommend that KLX’s stockholders adopt the Merger Agreement. KLX has agreed, subject to certain exceptions, not to directly or indirectly solicit competing alternative proposals and to terminate all existing discussions, negotiations and communications with respect to any alternative proposal. The completion of the Merger is subject to the satisfaction or waiver of customary closing conditions, including, among other things: (i) adoption of the Merger Agreement and approval of the Merger Agreement by KLX’s stockholders; (ii) unless KLX has timely elected to sell ESG to a third party, the Exchange Act registration statement with respect to the KLX Energy Services shares to be issued in connection with the spin-off having been declared effective by the SEC and such shares having been approved for listing on Nasdaq and the period of time specified by applicable law for the mailing of an information statement in connection with the spin-off having expired (assuming the information statement in connection with the spin-off is mailed immediately after the Exchange Act registration statement is declared effective by the SEC, whether or not the information statement in connection with the spin-off has in fact been mailed), (iii) consummation of the ESG sale or spin-off, as applicable, and (iv) applicable regulatory approvals. KLX and Boeing have made customary representations and warranties in the Merger Agreement. The Merger Agreement also contains customary covenants and agreements, including covenants and agreements relating to (a) the conduct of KLX’s business between the date of the signing of the Merger Agreement and the consummation of the Merger and (b) the efforts of the parties to cause the Merger to be completed. The Merger Agreement provides that Boeing may be required to pay KLX a termination fee equal to $175.0 and that KLX may be required to pay Boeing a termination fee equal to up to $175.0 if the Merger Agreement is terminated by KLX or Boeing under certain circumstances described in the Merger Agreement. |
Description of Business and Sum
Description of Business and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Apr. 30, 2018 | |
Summary of Significant Accounting Policies | |
Recent Accounting Pronouncements | In May 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-09, Compensation–Stock Compensation (Topic 718) . This ASU was issued to provide clarity and reduce diversity in practice regarding the application of guidance on the modification of equity awards. The ASU states that an entity should account for the effects of a modification unless all of the following are met: the fair value, vesting conditions and the classification of the instrument as equity or liability of the modified award is the same as that of the original award immediately before such award is modified. The guidance is effective for annual reporting periods beginning after December 15, 2017, and interim periods within those annual reporting periods with early adoption permitted and should be applied prospectively to an award modified on or after the adoption date. The Company does not expect a material impact upon adoption of this ASU to its condensed consolidated financial statements as the Company historically has accounted for all modifications in accordance with Topic 718 and has not been subject to the exception described under this ASU. In February 2016, the FASB issued ASU 2016-02, Leases , which supersedes ASC Topic 840, Leases, and creates a new topic, ASC Topic 842, Leases . This update is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Earlier adoption is permitted. ASU 2016-02 requires lessees to recognize a lease liability and a lease asset for all leases, including operating leases, with a term greater than 12 months on its balance sheet. The update also expands the required quantitative and qualitative disclosures surrounding leases. ASU 2016-02 will be applied using a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The Company is currently evaluating the effect of this update on its condensed consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers , which updated the guidance in ASC Topic 606, Revenue Recognition . The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should identify the contract(s) with a customer, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to the performance obligations in the contract and recognize revenue when (or as) the entity satisfies a performance obligation. In August 2015, the FASB deferred the effective date for implementation of ASU 2014-09 by one year and during 2016, the FASB issued various related accounting standard updates, which clarified revenue accounting principles and provided supplemental adoption guidance. The guidance under ASU 2014-09 is effective for fiscal years beginning after December 15, 2017, including interim reporting periods within that year. The Company adopted the new standard and its related amendments (collectively known as ASC Topic 606) in the first quarter of 2018 using the modified retrospective method of adoption, which resulted in no changes to the opening consolidated balance sheet as of February 1, 2018. Prior period consolidated statements of earnings and comprehensive income remain unchanged. The additional disclosures required by ASC Topic 606 have been included below and in Note 11. Except for the changes below, no material changes have been made to the Company's significant accounting policies disclosed in Note 1, Description of Business and Summary of Significant Accounting Policies, in its 2017 Form 10-K. Revenue from Contracts with Customers Revenue Recognition — Under ASC Topic 606, the Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC Topic 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company recognizes revenue in the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. Revenues from product sales are recognized when the customer obtains control of the Company’s product, which occurs at a point in time, typically upon delivery in accordance with the terms of the sales contract. Management provides allowances for credits and returns, based on historic experience, and adjusts such allowances as considered necessary. In connection with the sales of its products, the Company also provides certain logistics services which include inventory management and replenishment, supply chain solutions such as third-party logistics programs, packaging and bar coding, parts kitting, quality assurance testing and inspection, purchasing assistance programs and electronic data interchange capability. The price of such services is generally included in the price of the products delivered to the customer, and revenues are recognized upon delivery of the product, at which point, the customer has obtained control of the Company’s product. The Company does not account for these service activities separate from the related part sales as the services are inputs required to fulfill part orders received from customers. Service revenues from oilfield services (product/service lines (“PSLs”)) are recorded over time throughout and for the duration of the service or rental period. Contracts in the Company’s Energy Services Group (“ESG”) segment are pursuant to a master services agreement (“MSA”) combined with a completed field ticket or a work order, which sets forth the details of the specific transaction including pricing. Backlog is not a relevant measure for the Company’s Aerospace Solutions Group (“ASG”) segment, given the long-term nature of its contracts with its customers. Few, if any, include minimum purchase requirements, annually or over the term of the agreement. The Company’s ESG segment operates under MSAs with its oil and gas customers, which set forth the terms and conditions for the provision of services and the rental of equipment. Rental tools and service contracts are typically based on a day rate with rates based on the type of equipment and competitive conditions. As a result, the Company do not record backlog. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Apr. 30, 2018 | |
Goodwill and Intangible Assets | |
Intangible Assets by Major Asset Class | April 30, 2018 January 31, 2018 Useful Life Original Accumulated Net Book Original Accumulated Net Book (Years) Cost Amortization Value Cost Amortization Value Customer contracts and relationships - 30 $ 412.1 $ 132.9 $ 279.2 $ 413.6 $ 128.8 $ 284.8 Covenants not to compete 5 2.2 0.8 1.4 2.2 0.7 1.5 Developed technologies 15 3.3 0.5 2.8 3.3 0.5 2.8 Trade names Indefinite 18.9 - 18.9 19.5 - 19.5 $ 436.5 $ 134.2 $ 302.3 $ 438.6 $ 130.0 $ 308.6 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 3 Months Ended |
Apr. 30, 2018 | |
Accrued Liabilities | |
Accrued Liabilities | April 30, January 31, 2018 2018 Accrued salaries, vacation and related benefits $ 36.8 $ 37.2 Accrued commissions 6.4 10.9 Income taxes payable 10.4 10.7 Accrued interest 29.4 11.7 Other accrued liabilities 35.1 36.2 $ 118.1 $ 106.7 |
Commitments, Contingencies An23
Commitments, Contingencies And Off-Balance-Sheet Arrangements (Tables) | 3 Months Ended |
Apr. 30, 2018 | |
Commitments, Contingencies and Off-Balance Sheet Arrangements | |
Future Payments under Operating Leases with Terms Greater Than One Year | Future payments under operating leases with terms greater than one year as of April 30, 2018 are as follows: Year Ending January 31, 2019 $ 24.9 2020 31.9 2021 26.1 2022 21.1 2023 15.4 Thereafter 69.0 Total $ 188.4 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Apr. 30, 2018 | |
Segment Reporting | |
Revenues and Operating Earnings (Losses) Based on Originating Location | THREE MONTHS ENDED APRIL 30, APRIL 30, Revenues 2018 2017 Aerospace Solutions Group $ 388.1 $ 347.5 Energy Services Group 111.0 63.8 Total revenues 499.1 411.3 Operating earnings (loss) (1) Aerospace Solutions Group 54.7 58.7 Energy Services Group 6.5 (10.1) Total operating earnings 61.2 48.6 Interest expense 18.9 19.0 Earnings before income taxes $ 42.3 $ 29.6 (1) Operating earnings (loss) include an allocation of employee benefits and general and administrative costs primarily based on the proportion of each segment’s number of employees for the three months ended April 30, 2018 and 2017. |
Capital Expenditures by Reportable Segment | THREE MONTHS ENDED APRIL 30, APRIL 30, 2018 2017 Aerospace Solutions Group $ 10.3 $ 2.7 Energy Services Group 16.7 11.8 $ 27.0 $ 14.5 |
Total Assets by Reportable Segment | April 30, January 31, 2018 2018 Aerospace Solutions Group $ 3,532.8 $ 3,495.8 Energy Services Group 324.3 294.2 $ 3,857.1 $ 3,790.0 |
Revenues by Reportable Segment Based on Destination | Aerospace Solutions Group Energy Services Group Revenues: Domestic $ 386.1 $ 111.0 Foreign 2.0 — $ 388.1 $ 111.0 |
Revenues by Geographic Area Based on Destination | Aerospace Solutions Group Energy Services Group % of % of Revenues Revenues Revenues Revenues United States $ 217.6 56.1 % $ 111.0 100.0 % Europe 98.8 25.4 % — — % Asia, Pacific Rim, Middle East and other 71.7 18.5 % — — % Total revenues $ 388.1 100.0 % $ 111.0 100.0 % |
Net Earnings Per Common Share (
Net Earnings Per Common Share (Tables) | 3 Months Ended |
Apr. 30, 2018 | |
Net Earnings Per Common Share | |
Computation of Basic and Diluted Net Earnings Per Share | THREE MONTHS ENDED APRIL 30, APRIL 30, 2018 2017 Net earnings $ 31.7 $ 18.4 (Shares in millions) Basic weighted average common shares 50.1 51.1 Effect of dilutive securities - dilutive securities 0.8 0.7 Diluted weighted average common shares 50.9 51.8 Basic net earnings per common share $ 0.63 $ 0.36 Diluted net earnings per common share $ 0.62 $ 0.36 |
Business Combinations (Details)
Business Combinations (Details) $ in Millions | 3 Months Ended |
Jan. 31, 2018USD ($)item | |
Business Combination, Separately Recognized Transactions [Line Items] | |
Number of product lines acquired | item | 2 |
Two Product Lines | |
Business Combination, Separately Recognized Transactions [Line Items] | |
Aggregate purchase price | $ | $ 64.8 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Apr. 30, 2018 | Jan. 31, 2018 |
Inventories | ||
Inventory reserves | $ 75 | $ 72.4 |
Goodwill and Long-Lived Assets,
Goodwill and Long-Lived Assets, Net (Major Asset Classes) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 30, 2018 | Jan. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Line Items] | ||
Original Cost | $ 436.5 | $ 438.6 |
Accumulated Amortization | 134.2 | 130 |
Net Book Value | 302.3 | 308.6 |
Trade names | ||
Goodwill and Intangible Assets Disclosure [Line Items] | ||
Original Cost | 18.9 | 19.5 |
Net Book Value | 18.9 | 19.5 |
Customer contracts and relationships | ||
Goodwill and Intangible Assets Disclosure [Line Items] | ||
Original Cost | 412.1 | 413.6 |
Accumulated Amortization | 132.9 | 128.8 |
Net Book Value | $ 279.2 | 284.8 |
Customer contracts and relationships | Minimum | ||
Goodwill and Intangible Assets Disclosure [Line Items] | ||
Useful Life (years) | 10 years | |
Customer contracts and relationships | Maximum | ||
Goodwill and Intangible Assets Disclosure [Line Items] | ||
Useful Life (years) | 30 years | |
Covenants not to compete | ||
Goodwill and Intangible Assets Disclosure [Line Items] | ||
Useful Life (years) | 5 years | |
Original Cost | $ 2.2 | 2.2 |
Accumulated Amortization | 0.8 | 0.7 |
Net Book Value | $ 1.4 | 1.5 |
Developed Technologies | ||
Goodwill and Intangible Assets Disclosure [Line Items] | ||
Useful Life (years) | 15 years | |
Original Cost | $ 3.3 | 3.3 |
Accumulated Amortization | 0.5 | 0.5 |
Net Book Value | $ 2.8 | $ 2.8 |
Goodwill and Long-Lived Asset29
Goodwill and Long-Lived Assets, Net (Goodwill and Amortization Expenses) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Apr. 30, 2018 | Jan. 31, 2018 | |
Amortization expense of intangible assets | $ 5 | $ 4.8 |
Expected amortization expenses in year one | 20 | |
Expected amortization expenses in year two | 20 | |
Expected amortization expenses in year three | 20 | |
Expected amortization expenses in year four | 20 | |
Expected amortization expenses in year five | 20 | |
Aerospace Solutions Group | ||
Goodwill increase during period | $ 9.2 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Millions | Apr. 30, 2018 | Jan. 31, 2018 |
Accrued Liabilities | ||
Accrued salaries, vacation and related benefits | $ 36.8 | $ 37.2 |
Accrued commissions | 6.4 | 10.9 |
Income taxes payable | 10.4 | 10.7 |
Accrued interest | 29.4 | 11.7 |
Other accrued liabilities | 35.1 | 36.2 |
Total accrued liabilities | $ 118.1 | $ 106.7 |
Long-Term Debt (Details)
Long-Term Debt (Details) $ in Millions | 3 Months Ended | |
Apr. 30, 2018USD ($)item | Jan. 31, 2018USD ($) | |
Debt Instrument [Line Items] | ||
Long-term debt | $ 1,185.2 | $ 1,184.6 |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Amount outstanding | 0 | 0 |
Revolving credit facility | $ 750 | |
Number of maintenance financial covenants | item | 0 | |
Outstanding letter of credit amount | $ 5.9 | $ 5.8 |
Senior Unsecured Notes 5.875 Percent Due 2022 | ||
Debt Instrument [Line Items] | ||
Senior unsecured notes | $ 1,200 | |
Debt, interest rate | 5.875% | |
Long-term debt | $ 1,185.2 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 30, 2018 | Jan. 31, 2018 | |
Senior Unsecured Notes 5.875 Percent Due 2022 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt, interest rate | 5.875% | |
Revolving Credit Facility | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Amount outstanding | $ 0 | $ 0 |
Fair Value, Inputs, Level 2 | Senior Unsecured Notes 5.875 Percent Due 2022 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Senior unsecured notes, fair value | $ 1,252.6 | $ 1,251 |
Commitments, Contingencies an33
Commitments, Contingencies and Off-Balance Sheet Arrangements (Details) $ in Millions | Apr. 30, 2018USD ($) |
Commitments, Contingencies and Off-Balance Sheet Arrangements | |
2,019 | $ 24.9 |
2,020 | 31.9 |
2,021 | 26.1 |
2,022 | 21.1 |
2,023 | 15.4 |
Thereafter | 69 |
Total | $ 188.4 |
Commitments, Contingencies an34
Commitments, Contingencies and Off-Balance Sheet Arrangements - Commitments (Details) | 3 Months Ended |
Apr. 30, 2018 | |
Commitments, Contingencies and Off-Balance Sheet Arrangements | |
Initial term of employment agreements | 3 years |
Number of additional years for which employment agreements may renew | 1 year |
Accounting for Stock-Based Co35
Accounting for Stock-Based Compensation (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 30, 2018 | Apr. 30, 2017 | |
Accounting for Stock-Based Compensation | ||
Share based compensation | $ 4.9 | $ 5.7 |
Unrecognized compensation cost | $ 33.3 | |
Qualified employees purchase of stock at a price equal to percentage of closing price | 85.00% | |
Compensation expense | $ 0.1 | $ 0.1 |
Segment Reporting (Revenues and
Segment Reporting (Revenues and Operating Earnings (Losses) by Reportable Segment) (Details) $ in Millions | 3 Months Ended | |
Apr. 30, 2018USD ($)item | Apr. 30, 2017USD ($) | |
Reportable Segments [Abstract] | ||
Number of reportable segments | item | 2 | |
Revenues | ||
Revenues | $ 499.1 | $ 411.3 |
Operating earnings (loss) | ||
Operating earnings (loss) | 61.2 | 48.6 |
Interest expense | 18.9 | 19 |
Earnings before income taxes | 42.3 | 29.6 |
Aerospace Solutions Group | ||
Revenues | ||
Revenues | 388.1 | 347.5 |
Operating earnings (loss) | ||
Operating earnings (loss) | 54.7 | 58.7 |
Energy Services Group | ||
Revenues | ||
Revenues | 111 | 63.8 |
Operating earnings (loss) | ||
Operating earnings (loss) | $ 6.5 | $ (10.1) |
Segment Reporting (Capital Expe
Segment Reporting (Capital Expenditures by Reportable Segment) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 30, 2018 | Apr. 30, 2017 | |
Property, Plant and Equipment [Line Items] | ||
Capital expenditures | $ 27 | $ 14.5 |
Aerospace Solutions Group | ||
Property, Plant and Equipment [Line Items] | ||
Capital expenditures | 10.3 | 2.7 |
Energy Services Group | ||
Property, Plant and Equipment [Line Items] | ||
Capital expenditures | $ 16.7 | $ 11.8 |
Segment Reporting (Goodwill by
Segment Reporting (Goodwill by Reportable Segment) (Details) - USD ($) $ in Millions | Apr. 30, 2018 | Jan. 31, 2018 |
Goodwill [Line Items] | ||
Goodwill | $ 1,047.6 | $ 1,056.8 |
Aerospace Solutions Group | ||
Goodwill [Line Items] | ||
Goodwill | $ 1,047.6 | $ 1,056.8 |
Segment Reporting (Total Assets
Segment Reporting (Total Assets by Reportable Segment) (Details) - USD ($) $ in Millions | Apr. 30, 2018 | Jan. 31, 2018 |
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | $ 3,857.1 | $ 3,790 |
Aerospace Solutions Group | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | 3,532.8 | 3,495.8 |
Energy Services Group | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | $ 324.3 | $ 294.2 |
Segment Reporting (Corporate As
Segment Reporting (Corporate Assets by Reportable Segment) (Details) - USD ($) $ in Millions | Apr. 30, 2018 | Jan. 31, 2018 |
Segment Reporting Information [Line Items] | ||
Total assets | $ 3,857.1 | $ 3,790 |
Corporate, Non-Segment | ||
Segment Reporting Information [Line Items] | ||
Total assets | $ 292.9 | $ 263.6 |
Segment Reporting (Revenues a41
Segment Reporting (Revenues and Operating Earnings Based on Originating Location) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 30, 2018 | Apr. 30, 2017 | |
Segment Reporting Information [Line Items] | ||
Revenues | $ 499.1 | $ 411.3 |
Aerospace Solutions Group | ||
Segment Reporting Information [Line Items] | ||
Revenues | 388.1 | 347.5 |
Aerospace Solutions Group | Domestic | ||
Segment Reporting Information [Line Items] | ||
Revenues | 386.1 | |
Aerospace Solutions Group | Foreign | ||
Segment Reporting Information [Line Items] | ||
Revenues | 2 | |
Energy Services Group | ||
Segment Reporting Information [Line Items] | ||
Revenues | 111 | $ 63.8 |
Energy Services Group | Domestic | ||
Segment Reporting Information [Line Items] | ||
Revenues | $ 111 |
Segment Reporting (Revenues by
Segment Reporting (Revenues by Geographic Area Based on Destination) (Details) $ in Millions | 3 Months Ended | |
Apr. 30, 2018USD ($)item | Apr. 30, 2017USD ($) | |
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Number of geographic regions | item | 3 | |
Revenues | $ 499.1 | $ 411.3 |
Aerospace Solutions Group | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Revenues | $ 388.1 | 347.5 |
% of Revenues | 100.00% | |
Aerospace Solutions Group | U.S. | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Revenues | $ 217.6 | |
% of Revenues | 56.10% | |
Aerospace Solutions Group | Europe | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Revenues | $ 98.8 | |
% of Revenues | 25.40% | |
Aerospace Solutions Group | Asia, Pacific Rim, Middle East and other | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Revenues | $ 71.7 | |
% of Revenues | 18.50% | |
Energy Services Group | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Revenues | $ 111 | $ 63.8 |
% of Revenues | 100.00% | |
Energy Services Group | U.S. | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Revenues | $ 111 | |
% of Revenues | 100.00% |
Net Earnings Per Common Share43
Net Earnings Per Common Share (Details) shares in Millions | 3 Months Ended |
Apr. 30, 2018shares | |
Net Earnings Per Common Share | |
Anti-dilutive securities excluded from determination of diluted earnings per common share | 0 |
Net Earnings Per Common Share44
Net Earnings Per Common Share (Computations of Basic and Diluted Earnings Per Share) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Apr. 30, 2018 | Apr. 30, 2017 | |
Net Earnings Per Common Share | ||
Net earnings | $ 31.7 | $ 18.4 |
Basic weighted average common shares (in millions) | 50.1 | 51.1 |
Effect of dilutive securities - dilutive securities | 0.8 | 0.7 |
Diluted weighted average common shares (in millions) | 50.9 | 51.8 |
Basic net earnings per common share | $ 0.63 | $ 0.36 |
Diluted net earnings per common share | $ 0.62 | $ 0.36 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | Apr. 30, 2018 | Apr. 30, 2017 |
Income Taxes | ||
Unrecognized tax benefits that would affect effective tax rate, if recognized | $ 9.6 | $ 8.5 |
Liability for unrecognized tax benefits for interest and penalties | $ 1.4 | $ 1.2 |
Subsequent Events (Details)
Subsequent Events (Details) $ / shares in Units, $ in Millions | Apr. 30, 2018USD ($)$ / shares |
Subsequent Event [Line Items] | |
Termination fee | $ | $ 175 |
Disposal Group, Disposed of by Sale | ASG | |
Subsequent Event [Line Items] | |
Transaction price per share | $ / shares | $ 63 |