Aerospace fastener distributor KLX Inc.has initiated a formal process to explore strategic alternatives focused on “maximizing shareholder value.”

“Such strategic alternatives could include, amongst others, a sale of the Company or a sale of a division or divisions thereof, a business combination or continuing as a standalone entity executing on its business plan,” KLX stated in a press release.

The company has retained Goldman Sachs & Co. as financial advisor and Freshfields Bruckhaus Deringer US LLP as legal advisor to assist in its review.

“In light of certain inquiries received, our Board concluded that it is in the best interest of shareholders to conduct a thorough evaluation of strategic alternatives,” explained CEO Amin Khoury. “We remain confident in KLX’s strategic plan and the significant growth opportunities available to us. At the same time, we are open-minded and willing to consider any path that maximizes value for our shareholders.”

KLX – the former B/E Aerospace fastener division – has not set a timetable to complete its review.


2017 Brought KLX Success
KLX achieved a 51% increase in share price during 2017, driven by sales to commercial aerospace manufacturing customers.

KLX Inc. reported Aerospace Solutions Group segment (“ASG”) revenues – primarily from fasteners – rose 5.4% in the third quarter of 2017 to $367.6 million, driven by a mid-single digit percentage increase in sales to commercial aerospace manufacturing customers, including initial revenue contributions from new business awards announced in 2016, partially offset by a decrease in demand from business jet manufacturing customers.

Q3 ASG segment operating earnings rose 10.4% to $62.4 million, while adjusted EBITDA climbed 10.1% to $73.9 million.

“We are also pleased to report that ASG continued its market momentum with three new contract awards and market share gains valued at approximately $125 million in the aggregate, supporting the F-35 Joint Strike Fighter, Pratt & Whitney’s new GTF engine and Bombardier’s C-Series commercial aircraft,” stated Khoury in December.

Overall Q3 sales at KLX – the former Consumables Management segment of B/E Aerospace – increased 17.4% to $456.7 million. Q3 operating earnings gained 56.7% to $60.5 million, while adjusted EBITDA increased 38% to $83.3 million.

ASG segment sales during the first nine months of 2017 gained 6% to $1.07 billion, with operating earnings up 8.8% to $181.2 million. Revenues from both commercial aerospace manufacturing and aftermarket customers increased by an approximate mid-single digit percentage.

Consolidated KLX revenue improved 16% to $1.3 billion, with operating earnings up 71.3% to $161.4 million.

KLX is expected to reported full fiscal 2017 results in March. Web: KLX.com