UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 


 

FORM 8-K

 


 

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

 

Date of report (Date of earliest event reported): April 26, 2017

 


 

Wesco Aircraft Holdings, Inc.

(Exact name of registrant as specified in its charter)

 


 

DELAWARE

 

001-35253

 

20-5441563

(State or Other Jurisdiction
of Incorporation)

 

(Commission File Number)

 

(IRS Employer
Identification No.)

 

24911 Avenue Stanford

Valencia, California 91355

(Address of Principal Executive Offices) (Zip Code)

 

Registrant’s telephone number, including area code: (661) 775-7200

 

 

(Former Name or Former Address, if Changed Since Last Report)

 


 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company o

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

 

 

 



 

Item 5.02                                            Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

 

On April 26, 2017, the Board of Directors (the “Board”) of Wesco Aircraft Holdings, Inc. (the “Company”) appointed Todd Renehan to serve as the Company’s Chief Executive Officer, effective immediately.  Also on April 26, 2017, the Board appointed Alex Murray to serve as President and Chief Operating Officer of the Company, effective immediately.  Mr. Renehan replaces David Castagnola, who retired as President, Chief Executive Officer and as a director of the Company, effective April 26, 2017.  The Board also acted on April 26, 2017 to appoint Mr. Renehan as a Class I director of the Company, with his initial term expiring at the Company’s 2018 annual meeting of stockholders, to fill the vacancy created by the retirement of Mr. Castagnola.

 

Mr. Renehan, age 54, joined the Company as Executive Vice President and Chief Commercial Officer following the Company’s acquisition of Haas Group International, where Mr. Renehan served as President from 2013 until the acquisition in 2014. From 2010 to 2013, Mr. Renehan was Executive Vice President and Chief Commercial Officer of Haas Group International. In 2010, Mr. Renehan served as Chief Commercial Officer for Damco, a division of Maersk, and from 1985 to 2009, he worked in various capacities for global transportation services provider Ryder System, Inc., ultimately serving as Executive Vice President of Sales, Marketing and Rental.

 

Mr. Murray, age 47, joined the Company in 2000 and has served as Executive Vice President and Chief Operations Officer (previously, Vice President of Global Operations) since 2010. He previously served as the Company’s EU Managing Director from 2005 to 2010, Director of Contract Business from 2003 to 2005 and Logistic Manager from 2000 to 2003. Prior to joining the Company, Mr. Murray was employed by BAE Systems, a global defense, security and aerospace company, in various roles within the logistics, procurement and supply chain organizations.

 

In connection with his retirement as President and Chief Executive Officer, Mr. Castagnola entered into a separation agreement (the “Separation Agreement”) with the Company and its wholly owned subsidiary, Wesco Aircraft Hardware Corp. (“Hardware”), pursuant to which he will receive the severance payments and benefits set forth in the Executive Severance Agreement between Mr. Castagnola and Hardware dated April 6, 2015 as well as accelerated vesting of certain equity awards.

 

The foregoing description of the Separation Agreement does not purport to be a complete description and is qualified in its entirety by reference to the full text of the Separation Agreement, which is filed as Exhibit 10.1 hereto and incorporated herein by reference.

 

Item 7.01               Regulation FD Disclosure.

 

On April 28, 2017, the Company announced its preliminary financial information for the fiscal quarter ended March 31, 2017. The full text of the press release issued by the Company in connection with the announcement is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

 

The information in Item 7.01 of this Current Report on Form 8-K (including Exhibit 99.1) is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing.

 

Cautionary Statement Regarding Forward-Looking Statements

 

This communication contains forward-looking statements (including within the meaning of the Private Securities Litigation Reform Act of 1995) concerning the Company and other matters. These statements may discuss goals, intentions and expectations as to future plans, trends, events, results of operations or financial condition, or otherwise, based on current beliefs of management, as well as assumptions made by, and information currently available to, such management. Forward-looking statements may be accompanied by words such as “aim,” “anticipate,” “believe,” “plan,” “could,” “would,” “should,” “estimate,” “expect,” “forecast,” “future,” “guidance,” “intend,” “may,” “will,” “possible,” “potential,” “predict,” “project” or similar words, phrases or expressions. These

 

2



 

forward-looking statements are subject to various risks and uncertainties, many of which are outside the Company’s control. Therefore, you should not place undue reliance on such statements.

 

Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, the following: general economic and industry conditions; conditions in the credit markets; changes in military spending; risks unique to suppliers of equipment and services to the U.S. government; risks associated with the Company’s long-term, fixed-price agreements that have no guarantee of future sales volumes; risks associated with the loss of significant customers, a material reduction in purchase orders by significant customers, or the delay, scaling back or elimination of significant programs on which the Company relies; the Company’s ability to effectively compete in its industry; the Company’s ability to effectively manage its inventory; the Company’s suppliers’ ability to provide it with the products the Company sells in a timely manner, in adequate quantities and/or at a reasonable cost; the Company’s ability to maintain effective information technology systems; the Company’s ability to retain key personnel; risks associated with the Company’s international operations, including exposure to foreign currency movements; risks associated with assumptions the Company makes in connection with its critical accounting estimates (including goodwill) and legal proceedings; the Company’s dependence on third-party package delivery companies; fuel price risks; fluctuations in the Company’s financial results from period-to-period; environmental risks; risks related to the handling, transportation and storage of chemical products; risks related to the aerospace industry and the regulation thereof; risks related to the Company’s indebtedness; and other risks and uncertainties.

 

The foregoing list of factors is not exhaustive.  You should carefully consider the foregoing factors and the other risks and uncertainties that affect the Company’s business, including those described in the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other documents filed from time to time with the Securities and Exchange Commission.  All forward-looking statements included in this communication (including information included or incorporated by reference herein) are based upon information available to the Company as of the date hereof, and the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

 

Item 9.01                                            Financial Statements and Exhibits.

 

(d)   Exhibits.

 

Exhibit
Number

 

Description

10.1

 

Separation Agreement with David Castagnola dated April 27, 2017

 

 

 

99.1

 

Press Release, issued by the Company on April 28, 2017

 

3



 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

Date: April 28, 2017

WESCO AIRCRAFT HOLDINGS, INC.

 

 

 

 

 

 

 

By:

/s/ Richard J. Weller

 

 

Richard J. Weller

 

 

Executive Vice President and Chief Financial Officer

 

 

4



 

EXHIBIT INDEX

 

Exhibit
Number

 

Description

10.1

 

Separation Agreement with David Castagnola dated April 27, 2017

 

 

 

99.1

 

Press Release, issued by the Company on April 28, 2017

 

5


Exhibit 10.1

 

SEPARATION AND RELEASE AGREEMENT

 

This Separation and Release Agreement (“ Release ”) is made by and between David J. Castagnola (“ Employee ”), Wesco Aircraft Hardware Corp. (the “ Company ”) and Wesco Aircraft Holdings, Inc. (“ Parent ”) (collectively, referred to as the “ Parties ” or individually referred to as a “ Party ”).  Capitalized terms used in this Release but not defined herein shall have the meanings assigned to them in the Agreement (as defined below).

 

WHEREAS, Employee and the Company are parties to that certain Executive Severance Agreement dated as of April 6, 2015 (the “ Agreement ”);

 

WHEREAS, the Employee’s employment with the Company has terminated effective as of April 26, 2017 (the “ Separation Date ”) and the Company has delivered this Release to the Employee prior to the Separation Date;

 

WHEREAS, this Release constitutes the release of claims referred to in Section 3(d) of the Agreement and the execution of this Release by the Employee is a condition to Employee’s right to receive the severance payments and benefits set forth in Section 3(a) of the Agreement; and

 

WHEREAS, the Company and Employee wish to fully and finally resolve all matters between them as provided in this Release.

 

NOW, THEREFORE, the Parties, intending to be legally bound hereby, agree as follows:

 

1.     Separation.

 

a.             The Employee understands and acknowledges that the Employee’s employment with the Company shall terminate and has terminated effective on the Separation Date (the “ Separation ”).

 

b.             Effective as of the Separation Date, the Employee hereby resigns from all officer, director or other positions with the Company, Parent and any of their subsidiaries and affiliates, including, for the avoidance of doubt, the Employee’s position as a member of the board of directors of Parent, such that, as of the Separation Date, the Employee shall not and does not hold any position (whether as an officer, director, manager, employee, trustee, fiduciary, or otherwise) with, and shall cease to exercise or convey any authority (actual, apparent, or otherwise) on behalf of, the Company, Parent and their subsidiaries and affiliates .

 

c.             The Employee agrees that Employee shall promptly return all Company property in Employee’s possession, including, but not limited to, Company confidential information and trade secrets, computer hardware/software, credit and telephone cards, access cards and keys, Company cars (subject to Employee’s entitlements under Section 3(a)(iv) of the Agreement), PDAs and cellular phones.

 

d.             The Employee agrees that the Employee will take any further action, including executing any documents or instruments, reasonably requested by the Company in connection with the foregoing.

 

2.     Severance Payments and Benefits .

 

a.             Subject to Employee’s compliance with the terms of this Release and the Agreement (including but not limited to Sections 4, 5, 6 and 8 thereof) and with Employee’s other continuing obligations to the Company, Employee will receive the severance payments and benefits set forth in Section 3(a) of the Agreement.  Such payments will be made in accordance with and subject to the terms

 



 

and conditions of Section 3(a) and the other relevant provisions of the Agreement.

 

b.             Upon his commencement of employment with the Company in April 2016, the Employee was granted an award of 94,280 shares of restricted stock in Parent (the “ Initial Restricted Stock Grant ”), which was scheduled to vest in a single installment on the three year anniversary of the date grant, subject to the Employee’s continued employment with the Company on such date and the Company’s attaining a return on invested capital of at least 12% for the twelve month period ending March 31, 2018 (the “ Performance Condition ”).  Subject to Employee’s compliance with the terms of this Release and the Agreement (including but not limited to Sections 4, 5, 6 and 8 thereof) and with Employee’s other continuing obligations to the Company, the Company and Parent agree that as of the Effective Date (as defined below) of this Agreement, two-thirds of the Initial Restricted Stock Grant (62,853 shares) shall become immediately vested and non-forfeitable and, for the avoidance of doubt, the Performance Condition shall no longer apply.  The remaining one-third of the Initial Restricted Stock Grant shall be forfeited by Employee without consideration as of the Separation Date.

 

c.             The parties acknowledge that on October 1, 2015, the Executive was granted, with respect to Parent’s common stock, 106,412 stock options (the “ 2015 Stock Option Grant ”), 39,469 restricted shares (the “ 2015 Restricted Stock Grant ”) and 38,308 performance share units (the “ 2015 PSU Grant ” and, together with the 2015 Stock Option Grant and the 2015 Restricted Stock Grant, the “ 2015 Equity Grant ”).  Subject to Employee’s compliance with the terms of this Release and the Agreement (including but not limited to Sections 4, 5, 6 and 8 thereof) and with Employee’s other continuing obligations to the Company, the Company and Parent agree that as of the Effective Date, the Executive will vest in that portion of the 2015 Equity Grant that was otherwise scheduled to vest on September 30, 2017.  The number of restricted shares that will vest pursuant to the foregoing is 13,156 shares and the number of stock options that will vest pursuant to the foregoing is 35,470 options, which options have an exercise price of $12.06.  The Executive will not vest in any performance share units as a result of this Section 2.c.

 

d.             On September 30, 2016, the Employee vested in options to purchase 35,471 shares of Parent’s common stock, representing the first one-third tranche of the 2015 Stock Option Grant, such that the total number of vested stock options held by the Executive (including the stock options that vest pursuant to Section 2.c.) is 70,941, which options have an exercise price of $12.06 (the “ Vested Options ”).  Subject to Employee’s compliance with the terms of this Release and the Agreement (including but not limited to Sections 4, 5, 6 and 8 thereof) and with Employee’s other continuing obligations to the Company, the Company and Parent agree that, with respect to the Vested Options, Employee’s Separation from the Company will be treated as a Wesco Approved Retirement under Parent’s stock option Retirement Policy, such that, notwithstanding the provisions of the applicable stock option agreement providing for termination of the Vested Options 90 days after the Separation Date, the Vested Options shall remain exercisable until the one year anniversary of the Separation Date (subject to earlier termination of the Vested Options pursuant to Parent’s 2014 Incentive Award Plan in connection with a corporate event).

 

e.             The Executive acknowledges that as of the Separation Date, he will forfeit without consideration the remaining unvested portion of the 2015 Equity Grant and all other outstanding equity awards held by him that have not vested prior to the Separation Date, including all such awards granted to him in calendar year 2016.

 

f.             All payments and benefits provided under or pursuant to this Release shall be subject to Section 3(h) of the Agreement.

 

3.     Release of Claims .  Employee agrees that the foregoing consideration represents settlement in full

 

2



 

of all outstanding obligations owed to Employee by the Company and any of its direct or indirect subsidiaries and affiliates (including, without limitation, Parent, Haas Group Inc., The Carlyle Group and each of their affiliated entities), and any of their current and former officers, directors, equity holders, managers, employees, agents, investors, attorneys, shareholders, administrators, affiliates, benefit plans, plan administrators, insurers, trustees, divisions, and subsidiaries and predecessor and successor corporations and assigns (collectively, the “Releasees”).  Employee, on Employee’s own behalf and on behalf of any of Employee’s affiliated companies or entities and any of their respective heirs, family members, executors, agents, and assigns, hereby and forever releases the Releasees from, and agrees not to sue concerning, or in any manner to institute, prosecute, or pursue, any claim, complaint, charge, duty, obligation, or cause of action relating to any matters of any kind, whether presently known or unknown, suspected or unsuspected, that Employee may possess against any of the Releasees arising from any omissions, acts, facts, or damages that have occurred up until and including the Effective Date of this Release (as defined in Section 10 below), including, without limitation:

 

a.             any and all claims relating to or arising from Employee’s employment  or service relationship with the Company or any of its direct or indirect subsidiaries or affiliates and the termination of that relationship;

 

b.             any and all claims relating to, or arising from, Employee’s right to purchase, or actual purchase of any shares of stock or other equity interests of the Company or any of its affiliates, including, without limitation, any claims for fraud, misrepresentation, breach of fiduciary duty, breach of duty under applicable state corporate law, and securities fraud under any state or federal law;

 

c.             any and all claims for wrongful discharge of employment; termination in violation of public policy; discrimination; harassment; retaliation; breach of contract, both express and implied; breach of covenant of good faith and fair dealing, both express and implied; promissory estoppel; negligent or intentional infliction of emotional distress; fraud; negligent or intentional misrepresentation; negligent or intentional interference with contract or prospective economic advantage; unfair business practices; defamation; libel; slander; negligence; personal injury; assault; battery; invasion of privacy; false imprisonment; conversion; and disability benefits;

 

d.             any and all claims for violation of any federal, state, or municipal statute, including, but not limited to, Title VII of the Civil Rights Act of 1964; the Civil Rights Act of 1991; the Pennsylvania Human Relations Act; the Rehabilitation Act of 1973; the Americans with Disabilities Act of 1990; the Equal Pay Act; the Fair Credit Reporting Act; the Age Discrimination in Employment Act of 1967; the Older Workers Benefit Protection Act; the Employee Retirement Income Security Act of 1974; the Worker Adjustment and Retraining Notification Act; the Family and Medical Leave Act; and the Sarbanes-Oxley Act of 2002;

 

e.             any and all claims for violation of the federal or any state constitution;

 

f.             any and all claims arising out of any other laws and regulations relating to employment or employment discrimination;

 

g.             any claim for any loss, cost, damage, or expense arising out of any dispute over the non-withholding or other tax treatment of any of the proceeds received by Employee as a result of this Release; and

 

h.             any and all claims for attorneys’ fees and costs not otherwise provided for in this Release.

 

3



 

Employee agrees that the release set forth in this Section 3 shall be and remain in effect in all respects as a complete general release as to the matters released.  This release does not release claims that cannot be released as a matter of law, including, but not limited to, Employee’s right to file a charge with or participate in a charge by the Equal Employment Opportunity Commission, or any other local, state, or federal administrative body or government agency that is authorized to enforce or administer laws related to employment, against the Company (with the understanding that Employee’s release of claims herein bars Employee from recovering such monetary relief from the Company or any Releasee), claims for unemployment compensation or any state disability insurance benefits pursuant to the terms of applicable state law, claims to continued participation in certain of the Company’s group benefit plans pursuant to the terms and conditions of COBRA, and claims to any benefit entitlements vested as the date of separation of Employee’s employment, pursuant to written terms of any employee benefit plan of the Company or its affiliates.  This release further does not release claims for breach of the Company’s obligations under this Release, any claims arising from any omissions or acts that occur after the Effective Date of this Release, or any claims for or rights to indemnification pursuant to any separate agreement entered into with the Company or any of its affiliates , any directors and officers liability insurance, the Company’s or any of its affiliate’s bylaws or articles or certificate of incorporation or applicable law.  Nothing in this Agreement shall be deemed to prohibit the Employee from providing information to or testifying or otherwise assisting in any investigation or proceeding brought by any state, federal or local regulatory or law enforcement agency or legislative body and nothing in this Agreement is intended to limit the Employee’s right to receive an award for information provided to any government agency.

 

4.     Acknowledgment of Waiver of Claims under ADEA .  Employee understands and acknowledges that Employee is waiving and releasing any rights Employee may have under the Age Discrimination in Employment Act of 1967 (“ADEA”), and that this waiver and release is knowing and voluntary.  Employee understands and agrees that this waiver and release does not apply to any rights or claims that may arise under the ADEA after the Effective Date of this Release.  Employee understands and acknowledges that the consideration given for this waiver and release is in addition to anything of value to which Employee was already entitled.  Employee further understands and acknowledges that Employee has been advised by this writing that:  (a) Employee should consult with an attorney prior to executing this Release; (b) Employee has 21 days within which to consider this Release; (c) Employee has 7 days following Employee’s execution of this Release to revoke this Release pursuant to written notice delivered to the Company (attention of John Holland, Executive Vice President and Chief Legal Officer of the Company at the following address:  Wesco Aircraft, 24911 Avenue Stanford, Valencia, California 91355); (d) this Release shall not be effective until after the revocation period has expired; and (e) nothing in this Release prevents or precludes Employee from challenging or seeking a determination in good faith of the validity of this waiver under the ADEA, nor does it impose any condition precedent, penalties, or costs for doing so, unless specifically authorized by federal law.  In the event Employee signs this Release and returns it to the Company in less than the 21 day period identified above, Employee hereby acknowledges that Employee has freely and voluntarily chosen to waive the time period allotted for considering this Release.  In the event Employee revokes this Release, the Executive will receive none of the payments and benefits provided under Section 2 hereof and Section 3 shall not apply; however, the provisions of Section 1 hereof shall remain in effect.

 

5.     Severability .  In the event that any provision or any portion of any provision hereof or any surviving agreement made a part hereof becomes or is declared by a court of competent jurisdiction or arbitrator to be illegal, unenforceable, or void, this Release shall continue in full force and effect without said provision or portion of provision.

 

6.     Section 409A .

 

a.             Employee’s right to receive any payments under this Release shall be treated as a right to

 

4



 

receive a series of separate payments and, accordingly, each such payment shall at all times be considered a separate and distinct payment as permitted under Section 409A of the Code.  No payment hereunder shall be accelerated by the Company unless the Company chooses to accelerate a payment hereunder and such acceleration would not result in additional tax or interest pursuant to Section 409A of the Code.

 

b.             The intent of the Parties is that the payments and benefits under this Release comply with or be exempt from Section 409A of the Internal Revenue Code of 1986, as amended, and the regulations and guidance promulgated thereunder (collectively, “Section 409A”) and, accordingly, to the maximum extent permitted, this Release shall be interpreted to be in compliance therewith.  If the Employee or the Company believes, at any time, that any payment pursuant to this Release is subject to taxation under Section 409A of the Code, then (i) it shall advise the other and (ii) to the extent such correction is possible to avoid taxation under Section 409A without any material diminution in the value of the payments or benefits to Employee, the Company and Employee shall reasonably cooperate in good faith to take such steps as necessary, including amending (and, as required, consenting to the amendment of) the terms of any plan or program under which such payments are to be made, in the least restrictive manner necessary in order to comply with the provisions of Section 409A and the Section 409A Regulations in order to avoid taxation under Section 409A.

 

7.     No Oral Modification .  This Release may only be amended in a writing signed by Employee and a duly authorized officer of the Company.

 

8.     Governing Law and Venue .  The provisions of Section 12(d) of the Agreement shall apply to this Release.

 

9.     Notices .  Except as otherwise set forth herein, the provisions of Section 12(e) of the Agreement shall apply to this Release.

 

10.  Effective Date .  Employee has seven days after he signs this Release to revoke it and this Release will become effective on the eighth day after Employee signed this Release, so long as it has been signed by the Parties and has not been revoked by Employee before that date (the “Effective Date”).  Notwithstanding anything to the contrary herein, the Separation shall occur on the Separation Date in accordance with the provisions of Section 1 and the recitals hereto and all of the provisions of Section 1 are effective immediately upon the Employee’s execution of this Agreement.

 

11.  Voluntary Execution of Release .  Employee understands and agrees that Employee executed this Release voluntarily, without any duress or undue influence on the part or behalf of the Company or any third party, with the full intent of releasing all of Employee’s claims against the Company and any of the other Releasees.  Employee acknowledges that:  (a) Employee has read this Release; (b) Employee has not relied upon any representations or statements made by the Company that are not specifically set forth in this Release; (c) Employee has been represented in the preparation, negotiation, and execution of this Release by legal counsel of Employee’s own choice or has elected not to retain legal counsel; (d) Employee understands the terms and consequences of this Release and of the releases it contains; and (e) Employee is fully aware of the legal and binding effect of this Release.

 

5



 

IN WITNESS WHEREOF, the Parties have executed this Release on the respective dates set forth below.

 

 

EMPLOYEE

 

 

 

 

Dated: April 27, 2017

/s/ David J. Castagnola

 

David J. Castagnola

 

 

 

 

COMPANY

 

 

 

 

Dated: April 27, 2017

By:

/s/ John Holland

 

 

Name: John Holland

 

 

Title: Executive Vice President and Chief Legal Officer

 


Exhibit 99.1

 

 

Wesco Aircraft Names Todd Renehan CEO and Alex Murray President and COO; David J. Castagnola Retires

 

Company Announces Preliminary Financial Information for the

Fiscal 2017 Second Quarter

 

VALENCIA, Calif.—April 28, 2017— Wesco Aircraft Holdings, Inc. (NYSE: WAIR), the world’s leading provider of comprehensive supply chain management services to the global aerospace industry, today announced that it has appointed Todd Renehan as Chief Executive Officer and Alex Murray as President and Chief Operating Officer. Mr. Renehan also has been appointed to the Board of Directors as a Class I Director. David J. Castagnola, previously President, Chief Executive Officer, and a member of the company’s Board of Directors, has retired from these positions. These executive changes were effective April 26, 2017.

 

Todd Renehan joined Wesco as its Executive Vice President and Chief Commercial Officer in 2014 following Wesco’s acquisition of Haas Group International, where he had served as President.

 

“I am honored to take the helm at Wesco Aircraft,” said Mr. Renehan. “I am confident we will continue to make progress toward realizing our growth and profitability goals while building on our solid platform to offer an even more compelling value proposition with superior customer service. I believe in the company’s future and our ability to deliver for customers, create opportunities for employees, and enhance value for shareholders for years to come.”

 

Mr. Murray, now President and Chief Operating Officer, has served as Wesco’s Executive Vice President and Chief Operations Officer since 2010 and has served in various other capacities at Wesco since 2000.

 

“I look forward to advancing Wesco’s strategies and operational execution in this new role as President and COO,” said Mr. Murray. “Todd and I work well together, and I am pleased to step into this role to support our mutual goals of accelerated growth and expanded leadership in the industry for Wesco Aircraft.”

 

1



 

“Todd is an accomplished senior executive who has demonstrated his expertise in global operations, sales and marketing since joining Wesco,” said Chairman of the Board Randy J. Snyder. “He has proven his ability to drive revenue growth, with many new business wins announced over the past several quarters, and has shown he can skillfully move from vision and strategy to execution and implementation. The Board is confident that Todd will be able to foster a high-performing team and deliver strong results.”

 

“Alex also brings hands-on leadership experience as well as demonstrated operational expertise to his new role as President and COO. Alex has played a key role in developing our customer relationships, in addition to overseeing Wesco’s global operations infrastructure across 17 countries,” continued Mr. Snyder.

 

“We appreciate Dave Castagnola’s work over the last two years to advance the company’s competitive position, including implementing new processes, focusing on cost structure optimization and completing the integration of Haas Group. We thank Dave for his dedicated service and wish him well,” concluded Mr. Snyder.

 

Fiscal 2017 Second Quarter Preliminary Financial Information

 

Wesco Aircraft also announced preliminary financial information for the fiscal 2017 second quarter that includes net sales of $364.6 million, net income of $17.4 million, or $0.18 per diluted share, adjusted net income(1) of $21.1 million, or $0.21 per diluted share, and adjusted EBITDA(1) of $39.0 million.

 

Wesco Aircraft plans to release its detailed fiscal 2017 second quarter financial results after the close of market on Tuesday, May 9, 2017. The company will hold a conference call to discuss these results at 2:00 p.m. PDT (5:00 p.m. EDT) on the same day. The conference call can be accessed by dialing 888-771-4371 (domestic) or 847-585-4405 (international) and entering passcode 44780493. The conference call will be simultaneously broadcast on Wesco Aircraft’s Investor Relations website (http://ir.wescoair.com).

 

Following the live webcast, a replay will be available on the company’s website for one year. A telephonic replay also will be available approximately two hours after the conference call and may be accessed by dialing 888-843-7419 (domestic) or 630-652-3042 (international) and entering passcode 44780493. The telephonic replay will be available until May 16, 2017 at 11:59 p.m. EDT.

 

Todd Renehan Biography

 

Mr. Renehan joined Wesco as Executive Vice President and Chief Commercial Officer following Wesco’s acquisition of Haas Group International, where he served as President from 2013 until

 

2



 

the acquisition in 2014. From 2010 to 2013, Mr. Renehan was Executive Vice President and Chief Commercial Officer of Haas Group International. In 2010, Mr. Renehan served as Chief Commercial Officer for Damco, a division of Maersk, and from 1985 to 2009, he worked in various capacities for global transportation services provider Ryder System, Inc., ultimately serving as Executive Vice President of Sales, Marketing and Rental.

 

Alex Murray Biography

 

Mr. Murray joined Wesco in 2000 and has served as Executive Vice President and Chief Operations Officer (previously, Vice President of Global Operations) since 2010. He previously served as the company’s EU Managing Director from 2005 to 2010, Director of Contract Business from 2003 to 2005 and Logistics Manager from 2000 to 2003. Prior to Wesco, Mr. Murray’s career in the logistics, procurement and supply chain industries started at BAE Systems, a global defense, security and aerospace company.

 

About Wesco Aircraft

 

Wesco Aircraft is the world’s leading distributor and provider of comprehensive supply chain management services to the global aerospace industry, based on annual sales. The company’s services range from traditional distribution to the management of supplier relationships, quality assurance, kitting, just-in-time delivery and point-of-use inventory management. The company believes it offers one of the world’s broadest portfolios of aerospace products, including C-class hardware, chemical and electrical and comprised of more than 565,000 active SKUs.

 

To learn more about Wesco Aircraft, visit our website at www.wescoair.com. Follow Wesco Aircraft on LinkedIn at https://www.linkedin.com/company/wesco-aircraft-corp.

 

Footnotes

 

(1) Non-GAAP financial measure — see Exhibit 1 for reconciliations of GAAP to non-GAAP results.

 

Non-GAAP Financial Information

 

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

 

Adjusted net income represents net income (loss) before: (i) amortization of intangible assets, (ii) amortization or write-off of deferred financing costs, (iii) unusual or non-recurring items and (iv) the tax effect of items (i) through (iii) above calculated using an estimated effective tax rate.

 

3



 

Adjusted diluted earnings per share represent diluted earnings per share calculated using adjusted net income as opposed to net income.

 

Wesco Aircraft utilizes and discusses adjusted EBITDA, adjusted net income and adjusted diluted earnings per share, which are non-GAAP measures management uses to evaluate the company’s business, because it believes these measures assist investors and analysts in comparing the company’s performance across reporting periods on a consistent basis by excluding items that management does not believe are indicative of core operating performance. Wesco Aircraft believes these metrics are used in the financial community, and the company presents these metrics to enhance understanding of its operating performance. Readers should not consider adjusted EBITDA and adjusted net income as alternatives to net income, determined in accordance with GAAP, as an indicator of operating performance. Adjusted EBITDA, adjusted net income and adjusted diluted earnings per share are not measurements of financial performance under GAAP, and these metrics may not be comparable to similarly titled measures of other companies. See Exhibit 1 for reconciliations of adjusted EBITDA, adjusted net income and adjusted diluted earnings per share to the most directly comparable financial measures calculated and presented in accordance with GAAP.

 

Forward-Looking Statements

 

This press release contains forward-looking statements (including within the meaning of the Private Securities Litigation Reform Act of 1995) concerning Wesco Aircraft Holdings, Inc. These statements may discuss goals, intentions and expectations as to future plans, trends, events, results of operations or financial condition, or otherwise, based on current beliefs of management, as well as assumptions made by, and information currently available to, management. In some cases, readers can identify forward-looking statements by the use of forward-looking terms such as “advance,” “build,” “believe,” “continue,” “could,” “deliver,” “drive,” “expand,” “goal,” “grow,” “will” or similar words, phrases or expressions. These forward-looking statements are subject to various risks and uncertainties, many of which are outside the company’s control. Therefore, readers should not place undue reliance on such statements.

 

Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, the following: general economic and industry conditions; conditions in the credit markets; changes in military spending; risks unique to suppliers of equipment and services to the U.S. government; risks associated with the company’s long-term, fixed-price agreements that have no guarantee of future sales volumes; risks associated with the loss of significant customers, a material reduction in purchase orders by significant customers, or the delay, scaling back or elimination of significant programs on which the company relies; the company’s ability to effectively compete in its industry; the company’s ability

 

4



 

to effectively manage its inventory; the company’s suppliers’ ability to provide it with the products the company sells in a timely manner, in adequate quantities and/or at a reasonable cost; the company’s ability to maintain effective information technology systems; the company’s ability to retain key personnel; risks associated with the company’s international operations, including exposure to foreign currency movements; risks associated with assumptions the company makes in connection with its critical accounting estimates (including goodwill) and legal proceedings; the company’s dependence on third-party package delivery companies; fuel price risks; fluctuations in the company’s financial results from period-to-period; environmental risks; risks related to the handling, transportation and storage of chemical products; risks related to the aerospace industry and the regulation thereof; risks related to the company’s indebtedness; and other risks and uncertainties.

 

The foregoing list of factors is not exhaustive. The reader should carefully consider the foregoing factors and the other risks and uncertainties that affect the company’s business, including those described in Wesco Aircraft’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other documents filed from time to time with the Securities and Exchange Commission. All forward-looking statements included in this news release (including information included or incorporated by reference herein) are based upon information available to the company as of the date hereof, and the company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

 

Contact Information:

 

Investors

Wesco Aircraft Holdings, Inc.

Jeff Misakian

Vice President, Investor Relations

661-362-6847

Jeff.Misakian@wescoair.com

 

Media

Wesco Aircraft Holdings, Inc.

Linda Mueller

Director, Corporate Communications

661-362-6849

Linda.Mueller@wescoair.com

 

5



 

Exhibit 1 — Non-GAAP Financial Information

 

Wesco Aircraft Holdings, Inc.

Preliminary Non-GAAP Financial Information (UNAUDITED)

(In thousands, except share data)

 

 

 

Three Months

 

 

 

Ended

 

 

 

March 31, 2017

 

EBITDA and Adjusted EBITDA

 

 

 

Net income

 

$

17,442

 

Provision for income taxes

 

5,659

 

Interest expense, net

 

8,842

 

Depreciation and amortization

 

6,743

 

EBITDA

 

38,686

 

Unusual or non-recurring items (1)

 

294

 

Adjusted EBITDA

 

$

38,980

 

 

 

 

 

Adjusted Net Income

 

 

 

Net income

 

$

17,442

 

Amortization of intangible assets

 

3,719

 

Amortization of deferred financing costs

 

921

 

Unusual or non-recurring items (1)

 

294

 

Adjustments for tax effect

 

(1,316

)

Adjusted net income

 

$

21,060

 

 

 

 

 

Adjusted Diluted Earnings Per Share

 

 

 

Weighted-average number of diluted shares outstanding

 

99,017,986

 

Adjusted net income per diluted shares

 

$

0.21

 

 


(1)  Unusual and non-recurring items consisted of business realignment and other expenses.

 

6