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KLX Inc. Completes Spin-Off of KLX Energy Services Holdings, Inc. (9/17/18)
WELLINGTON, Fla., Sept. 17, 2018 (GLOBE NEWSWIRE) -- KLX Inc. (“KLX” or the “Company”) (NASDAQ: KLXI) announced today that it has completed the previously announced spin-off of KLX Energy Services Holdings, Inc. (“KLX Energy Services”) (NASDAQ: KLXE) from KLX. At 11:59 p.m. Eastern time on September 14, 2018, KLX distributed all outstanding shares of KLX Energy Services common stock to KLX shareholders at a distribution ratio of 0.4 shares of KLX Energy Services common stock for every one share of KLX common stock held on the September 3, 2018 record date.
Starting today, September 17, 2018, KLX common stock will no longer include the value of KLX Energy Services.
https://globenewswire.com/news-release/2018/09/17/1571574/0/en/KLX-Inc-Completes-Spin-Off-of-KLX-Energy-Services-Holdings-Inc.html
KLX Inc. (KLXI)
73.6 +0.22 (0.30%)
Volume: 947,385
KLX Inc. (KLXIV)
62.61 +0.01 (0.02%)
Volume: 274,665
KLX Energy Services (KLXEV)
28.9 +1.79 (6.60%)
Volume: 293,656
Spin value 11.56
Weight Watchers International Set to Join S&P MidCap 400; KLX Energy Services Holdings to Join S&P SmallCap 600 (9/07/18)
NEW YORK, Sept. 7, 2018 /PRNewswire/ -- Weight Watchers International Inc. (NYSE: WTW) will replace KLX Inc. (NASD: KLXI) in the S&P MidCap 400, and KLX Energy Services Holdings Inc. (NASD: KLXE) will replace FTD Companies Inc. (NASD: FTD) in the S&P SmallCap 600 effective prior to the open of trading on Tuesday, September 18, 2018. S&P 500 constituent The Boeing Co. (NYSE: BA) is acquiring KLX in a transaction expected to be completed on Monday, September 17 pending final conditions. Immediately prior to its acquisition, KLX will spin-off KLX Energy Services Holdings to shareholders. FTD Companies is ranked near the bottom of the S&P SmallCap 600 and is no longer representative of the small-cap market space.
Weight Watchers provides weight management services. Headquartered in New York, NY, the company will be added to the S&P MidCap 400 GICS (Global Industry Classification Standard) Specialized Consumer Services Sub-Industry index.
KLX Energy Services is a provider of completion, intervention and production services and products to the major onshore oil and gas producing regions. Headquartered in Wellington, FL, the company will be added to the S&P SmallCap 600 GICS Oil & Gas Equipment & Services Sub-Industry index
Following is a summary of the changes:
S&P MIDCAP 400 INDEX – SEPTEMBER 18, 2018
ADDED
Weight
Watchers
International
Consumer Discretionary
Specialized Consumer
Services
DELETED
KLX
Industrials
Aerospace & Defense
S&P SMALLCAP 600 INDEX – SEPTEMBER 18, 2018
ADDED
KLX Energy
Services
Energy
Oil & Gas Equipment &
Services
DELETED
FTD Companies
Consumer Discretionary
Internet & Direct
Marketing Retail
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https://www.prnewswire.com/news-releases/weight-watchers-international-set-to-join-sp-midcap-400-klx-energy-services-holdings-to-join-sp-smallcap-600-300709076.html
Today is the last day KLX Inc. trades with an entitlement to shares of KLX Energy Services Holdings, Inc. (9/14/18)
KLX Announces Spin-Off Trading Information (8/28/18)
WELLINGTON, Fla., Aug. 28, 2018 (GLOBE NEWSWIRE) -- In connection with its previously announced spin-off of KLX Energy Services Holdings, Inc. ("KLX Energy Services"), KLX Inc. ("KLX" or the "Company") (NASDAQ:KLXI) today announced that it has been informed by NASDAQ about certain key dates relating to trading in common stock of KLX Energy Services and KLX in connection with the spin-off. As previously announced, the record date for the distribution of KLX Energy Services common stock to KLX shareholders will be the close of business on Monday, September 3, 2018, and the distribution date will be September 14, 2018.
Starting on Wednesday, August 29, 2018, there will be a when-issued market in KLX Energy Services common stock under the ticker symbol "KLXEV." This when-issued market will continue until regular-way trading in KLX Energy Services common stock begins under the ticker symbol "KLXE" on September 17, 2018, the first trading day after the distribution date.
Also, starting on Wednesday, August 29, 2018, there will be two markets in KLX common stock: a "regular-way" market and an "ex-distribution" market:
• Regular way market. Shares of KLX common stock that trade on the regular-way market under KLX's current ticker symbol "KLXI" will trade with an entitlement to shares of KLX Energy Services common stock distributed in the distribution through September 14, 2018.
• Ex-distribution market. Shares of KLX common stock that trade on the ex-distribution market will trade under the ticker symbol "KLXIV" without an entitlement to shares of KLX Energy Services common stock distributed in the distribution. The last day of trading in the ex-distribution market will be September 14, 2018.
KLX received this information from NASDAQ and is providing it as a convenience, but investors are urged to consult with their own financial advisers regarding the specific implications of buying or selling KLX common stock on or before the distribution date.
Forward-Looking Statements
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements, including those regarding the timing and consummation of the transactions described herein, involve risks and uncertainties. The Company's actual experience and results may differ materially from the experience and results anticipated in such statements. Factors that might cause such a difference include those discussed in the Company's filings with the SEC, which include its Annual Report on Form 10-K, its Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, and in the Form 10 filed in connection with the proposed spin-off of KLX Energy Services. For more information, see the sections entitled "Risk Factors" and "Forward-Looking Statements" contained in the Company's Annual Report on Form 10-K and its other filings. The forward-looking statements included in this news release are made only as of the date of this news release and, except as required by the federal securities laws and the rules and regulations of the SEC, the Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
About KLX Inc.
KLX Inc., through its two operating segments, provides mission critical products and complex logistical solutions to support its customers' high value assets. KLX serves its customers in demanding environments that face high cost of downtime and require dependable, high quality, just-in-time customer support. The Aerospace Solutions Group is a leading distributor and value added service provider of aerospace fasteners and consumables, offering the broadest range of aerospace hardware and consumables and inventory and supply chain management services worldwide. The Energy Services Group provides completion, intervention and production services to the major onshore oil and gas producing regions of the United States, including the Northeast Region (the Marcellus and Utica Shales) as well as the Mid-Continent STACK and SCOOP and Haynesville, the Rocky Mountains Region (the Bakken formation, Williston, DJ, Uinta and Piceance Basins and Niobrara Shale) and the Southwest Region (including the Permian Basin and Eagle Ford Shale), serving the leading companies engaged in the exploration and development of North American onshore unconventional oil and natural gas reserves.
https://www.nasdaq.com/press-release/klx-announces-spinoff-trading-information-20180828-00045
KLX Inc. Reports Strong Second Quarter Financial Results; Confirms September 14th Spin-Off Date for KLX Energy Services (“KLXE”); Separately Announces KLXE Spin-Off Trading Information (8/28/18)
WELLINGTON, Fla., Aug. 28, 2018 (GLOBE NEWSWIRE) -- KLX Inc. (“KLX” or the “Company”) (NASDAQ: KLXI), a leading distributor and value added service provider of aerospace fasteners and consumables, and a provider of services and products to the oil and gas exploration and production industry, today reported its second fiscal quarter ended July 31, 2018 financial results.
On a GAAP basis, for the three-month period ended July 31, 2018, as compared to the same period of the prior year, revenues increased 22.4 percent to $527.2 million, while operating earnings increased 22.4 percent to $64.0 million. GAAP net earnings of $34.8 million and net earnings per diluted share of $0.68, increased 68.1 percent and 70.0 percent, respectively, as compared to the three-month period ended July 31, 2017. During the second quarter of 2018, the Company incurred approximately $23.1 million of one-time costs associated with the pending sale of its Aerospace Solutions Group (“ASG”) business to The Boeing Company (“Boeing”), the spin-off of its Energy Services Group (“ESG”) business to shareholders and the transition to ASG’s new global distribution and operations center. The costs associated with the pending sale of its ASG business to The Boeing Company, the spin-off of its ESG business to shareholders and transition to the new ASG facility are collectively referred to as “Costs as Defined.”
SECOND QUARTER HIGHLIGHTS
•Consolidated revenue growth of 22.4 percent to $527.2 million
•Consolidated Adjusted operating earnings of $87.1 million increased 66.5 percent1
•Adjusted Net Earnings and Adjusted Net Earnings per diluted share were $66.6 million and $1.31 per diluted share, respectively, representing increases of 76.2 percent and 79.5 percent, respectively1
1 Excludes approximately $23.1 million of Costs as Defined.
We have presented Adjusted Net Earnings and Adjusted Net Earnings per diluted share to reflect net earnings before Costs as Defined and amortization and non-cash compensation expense, and to include the tax benefit from the amortization of tax-deductible goodwill (“Adjusted Net Earnings” and “Adjusted Net Earnings per diluted share”). This release includes “Adjusted operating earnings” and “free cash flow,” which exclude Costs as Defined. This release also includes “Adjusted EBITDA,” which excludes Costs as Defined and non-cash compensation expense, and “ESG Adjusted EBITDA,” which excludes costs related to the spin-off of ESG and non-cash compensation expense. Each of the aforementioned metrics are “non-GAAP financial measures” as defined in Regulation G of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). See “Reconciliation of Non-GAAP Financial Measures.”
SECOND QUARTER CONSOLIDATED RESULTS
On a consolidated basis, revenues increased 22.4 percent to $527.2 million, driven by an approximate 14.6 percent increase in ASG revenues and an approximate 60.4 percent increase in ESG revenues. Adjusted operating earnings and Adjusted operating margin were $87.1 million and 16.5 percent, respectively. Adjusted Net Earnings and Adjusted Net Earnings per diluted share increased 76.2 percent and 79.5 percent, to $66.6 million and $1.31 per diluted share, respectively.
Amin J. Khoury, Chairman and Chief Executive Officer of KLX commented, “We are pleased to report strong second quarter financial results for both our ASG and ESG businesses. Our ASG segment delivered record quarterly revenues, driven by double-digit percentage increases in sales to support both commercial aerospace manufacturing customers and to support aftermarket customers. In addition, ASG reported a major customer competitive win and significant market share gain during the second quarter.”
Mr. Khoury continued, “Our ESG segment generated approximately 60 percent year-over-year organic revenue growth and an over 1,700 basis point improvement in Adjusted EBITDA margin, driven by strong growth in demand for our intervention and completion services, particularly our higher margin proprietary product services lines (“PSLs”). In addition, revenues continue to increase at a faster rate than fixed costs due to the efficient organizational structure we have developed, as a result of the complete integration of the acquired businesses.”
SECOND QUARTER SEGMENT RESULTS
As a result of the pending merger of the ASG business with The Boeing Company, the Company will no longer be providing segment level ASG results or guidance (other then what is reported in the Company’s 10-Q filing).
For the three months ended July 31, 2018, as compared to the same period of the prior year, ESG revenues of $117.9 million reflected revenue growth of approximately 60.4 percent, driven by strong growth in demand for intervention and completion services, particularly higher margin proprietary PSLs, including frac stacks, proprietary fishing tools and proprietary down hole production PSLs. ESG revenues are increasing at a faster rate than fixed costs due to the complete integration and reorganization of the seven private oilfield service companies acquired over the 2013 through 2014 time period, which is resulting in substantial margin expansion. GAAP operating earnings of $12.2 million, included $1.9 million of costs related to the spin-off of the ESG business. Exclusive of the aforementioned costs, ESG’s Adjusted operating earnings increased $21.9 million to $14.1 million in the second quarter, while Adjusted EBITDA was $26.2 million, or 22.2 percent of revenues. As compared to the first quarter of 2018, revenues increased by 6.2 percent, Adjusted operating earnings improved by 36.9 percent and Adjusted EBITDA improved by 19.1 percent. ESG cash provided by operations, exclusive of spin-off related costs, was $25.6 million and capital expenditures were approximately $18.2 million. ESG free cash flow, adjusted to exclude costs related to the spin-off of the ESG business was $7.4 million, or 6.3 percent of revenues.
PENDING BOEING TRANSACTION AND ESG SPIN-OFF UPDATE
A special meeting of stockholders to vote on the merger was held on August 24, 2018 at the Boston Harbor Hotel, Boston, Massachusetts at 10:30 AM (Eastern time), wherein the merger of KLX Inc into The Boeing Company was approved by shareholders of KLX Inc.
On August 24th, the Securities and Exchange Commission (‘SEC”) declared the KLX Energy Services Form 10 registration statement effective. As previously reported, the distribution of the KLXE shares will occur on September 14, 2018.
Beginning on Wednesday, August 29, 2018, there will be a when-issued market for KLX Energy Services common stock under the ticker symbol “KLXEV.” The when-issued market will continue until regular-way trading in KLX Energy Services common stock begins under the ticker symbol “KLXE” on September 17, 2018, the first trading day after the distribution date.
GUIDANCE/OUTLOOK
As a result of the pending sale of ASG to Boeing, the Company will no longer be providing ASG segment level guidance.
ESG’s Fiscal 2018 outlook excludes costs related to the spin-off of ESG, as well as a charge for the acceleration of the vesting of restricted stock grants, which will result from the closing of the sale of KLX to Boeing.
On December 6, 2017, the date on which the Company released its third quarter 2017 earnings results, the Company provided full year 2018 revenue guidance for ESG, with revenues expected to increase approximately 40 percent to $450 million.
On March 6, 2018, the date on which the Company released its fourth quarter 2017 earnings results, the Company forecasted ESG revenues to increase approximately 44 percent to approximately $450 - $475 million.
On May 21, 2018, the date on which the Company released its first quarter 2018 earnings results, the Company raised ESG guidance for a second time, forecasting revenues to increase approximately 50 percent to approximately $500 million, and Adjusted EBITDA to increase more than 300 percent to approximately $110 million.
Mr. Khoury commented, “Today, we are confirming our 2018 revenue and Adjusted EBITDA guidance for KLX Energy Services of approximately $500 million and approximately $110 million, respectively.”
Mr. Khoury concluded, “Consistent with the Company’s prior practice, on or about the time we release our third quarter results, we expect to provide 2019 KLX Energy Services financial guidance, including revenues, operating earnings, Adjusted EBITDA, Adjusted Net Earnings, Adjusted Net Earnings per diluted share, free cash flow and return on invested capital.”
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act. Such forward-looking statements involve risks and uncertainties. The Company’s actual experience and results may differ materially from the experience and results anticipated in such statements. Factors that might cause such a difference include those discussed in the Company’s filings with the SEC, which include its Annual Report on Form 10-K and Current Reports on Form 8-K. For more information, see the section entitled “Forward-Looking Statements” contained in the Company’s Annual Report on Form 10-K and in other filings. The forward-looking statements included in this news release are made only as of the date of this news release and, except as required by federal securities laws and rules and regulations of the SEC, the Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
About KLX Inc.
KLX Inc., through its two operating segments, provides mission critical products and complex logistical solutions to support its customers’ high value assets. KLX serves its customers in demanding environments that face high cost of downtime and require dependable, high quality just-in-time customer support. The Aerospace Solutions Group is a leading distributor and value added service provider of aerospace fasteners and consumables offering the broadest range of aerospace hardware and consumables and inventory management services worldwide. The Energy Services Group provides vital services and products to oil and gas exploration and production companies on an episodic, 24/7 basis. For more information, visit the KLX website at www.klx.com.
https://www.nasdaq.com/press-release/klx-inc-reports-strong-second-quarter-financial-results-confirms-september-14th-spinoff-date-for-20180828-00046
KLX Stockholders Approve Merger With The Boeing Company; KLX Inc. Board of Directors Approves Spin-Off of KLX Energy Services Holdings, Inc. to Occur on September 14, 2018 (8/24/18)
WELLINGTON, Fla., Aug. 24, 2018 (GLOBE NEWSWIRE) -- KLX Inc. ("KLX" or the "Company") (NASDAQ:KLXI) announced today that KLX stockholders voted in favor of the proposal to adopt the previously announced Agreement and Plan of Merger, dated as of April 30, 2018 (the "Merger Agreement"), by and among KLX, The Boeing Company ("Boeing") and a wholly owned subsidiary of Boeing, as amended by Amendment No. 1 thereto, dated as of June 1, 2018, at a special meeting of stockholders held today at the Boston Harbor Hotel in Boston, Massachusetts. KLX also announced today that its board of directors (the "Board") has approved the spin-off of its Energy Services Group business, which will be known as KLX Energy Services Holdings, Inc. ("KLX Energy Services"), through a distribution of all of the shares of KLX Energy Services common stock on a pro rata basis to the holders of KLX's common stock.
Merger Approval
At the special meeting, approximately 99.4% of all votes cast, which represents approximately 85.4% of all outstanding shares on July 24, 2018, the record date for the special meeting, were voted in favor of the proposal to adopt the Merger Agreement.
Under the terms of the Merger Agreement, KLX stockholders will have the right to receive, for each share of KLX common stock that they own immediately prior to the effective time of the merger, $63.00 in cash per share, without interest (the "Merger Consideration"). The Merger Consideration is in addition to, and separate from, the shares of KLX Energy Services Holdings, Inc. ("KLX Energy Services") that KLX stockholders as of the record date, September 3, 2018, of the previously announced spin-off of KLX Energy Services will receive in the spin-off on September 14, 2018.
A full description of the proposed merger is included in the proxy statement for the special meeting, which is available without charge through the Securities and Exchange Commission website at www.sec.gov. You may also obtain copies of documents filed by KLX with the SEC on KLX's Internet website at http://www.klx.com under the tab "Investor Relations," then under the tab "Reports & SEC Filings."
Spin-Off
In connection with the spin-off, for every one share of KLX common stock held, KLX's shareholders will receive 0.4 shares of KLX Energy Services common stock. No fractional shares of KLX Energy Services will be issued. KLX Shareholders will receive cash in lieu of fractional shares. The Board has set a record date of September 3, 2018 and a distribution date of September 14, 2018.
The distribution of KLX Energy Services common stock will complete the separation of KLX Energy Services from KLX. After the distribution, KLX Energy Services will be an independent, publicly-traded company and KLX will not own any shares of KLX Energy Services common stock. KLX Energy Services common stock is expected to begin trading on the NASDAQ under the ticker symbol KLXE. KLX will continue to trade on the NASDAQ under the ticker symbol KLXI, until the consummation of the Boeing/KLX merger, which is expected to occur in the fourth calendar quarter of 2018.
Amin J. Khoury, Chairman and Chief Executive Officer of KLX commented, "Our decision to separate the Energy Services business was the result of having successfully completed the strategic alternatives review process, which had been undertaken by our management team and Board of Directors, together with our independent advisors. We believe the outcome of this process will result in the achievement of maximum value for our shareholders, and positions our employees, our customers and our suppliers at both our Aerospace Solutions Group and our Energy Services Group businesses for continued success in the years to come."
The distribution of KLX Energy Services common stock is subject to the conditions set forth in the Distribution Agreement among KLX, KLX Energy Services and KLX Energy Services LLC, filed as an exhibit to KLX's Current Report on Form 8-K filed with the SEC on July 17, 2018.
No action is required by KLX's shareholders in order to receive shares of KLX Energy Services common stock in the distribution. An information statement, which is an exhibit to KLX Energy Services' Registration Statement on Form 10, is being mailed to all KLX stockholders and describes the spin-off and the business of KLX Energy Services, including the risks of owning KLX Energy Services common stock, and other details regarding the separation.
About KLX Inc.
KLX Inc., through its two operating segments, provides mission critical products and complex logistical solutions to support its customers' high value assets. KLX serves its customers in demanding environments that face high cost of downtime and require dependable, high quality, just-in-time customer support. The Aerospace Solutions Group is a leading distributor and value added service provider of aerospace fasteners and consumables, offering the broadest range of aerospace hardware and consumables and inventory and supply chain management services worldwide. The Energy Services Group provides completion, intervention and production services to the major onshore oil and gas producing regions of the United States, including the Northeast Region (the Marcellus and Utica Shales) as well as the Mid-Continent STACK and SCOOP and Haynesville, the Rocky Mountains Region (the Bakken formation, Williston, DJ, Uinta and Piceance Basins and Niobrara Shale) and the Southwest Region (including the Permian Basin and Eagle Ford Shale), serving the leading companies engaged in the exploration and development of North American onshore unconventional oil and natural gas reserves.
https://www.nasdaq.com/press-release/klx-stockholders-approve-merger-with-the-boeing-company-klx-inc-board-of-directors-approves-spinof-20180824-00578
Little upside for KLXI investors prior to earnings:
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