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TABLE OF CONTENTS
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Table of Contents

As filed with the Securities and Exchange Commission on July 14, 2011

Registration No. 333-173381

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



Amendment No. 4 to

Form S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933



Wesco Aircraft Holdings, Inc.
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization)
  5072
(Primary Standard Industrial
Classification Code Number)
  20-5441563
(I.R.S. Employer
Identification No.)



27727 Avenue Scott
Valencia, CA 91355
(661) 775-7200

(Address, including zip code, and telephone number, including area code, of the registrant's principal executive offices)

John G. Holland
General Counsel
27727 Avenue Scott
Valencia, CA 91355
(661) 775-7200
(Name, address, including zip code, and telephone number, including area code, of agent for service)



Copies to:
Rachel W. Sheridan
Jason M. Licht

Latham & Watkins LLP
555 11th Street, NW
Washington, DC 20004
(202) 637-2200
  Michael Kaplan
Davis Polk & Wardwell LLP
450 Lexington Avenue
New York, NY 10017
(212) 450-4000



Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this registration statement.

         If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. o

         If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

         If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

         If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

         Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o   Accelerated filer o   Non-accelerated filer ý   Smaller reporting company o



CALCULATION OF REGISTRATION FEE

               
 
Title of Securities
to be Registered

  Amount to be
registered(a)

  Proposed maximum
aggregate offering
price per share(b)

  Proposed maximum
aggregate offering
price(a)(b)

  Amount of
registration fee(c)

 

Common stock, $0.001 par value per share

  24,150,000   $17.50   $422,625,000.00   $49,066.77

 

(a)
Including 3,150,000 additional shares of common stock that may be purchased by the underwriters.

(b)
Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(a) promulgated under the Securities Act of 1933, as amended.

(c)
A filing fee of $34,830.00 was previously paid in connection with the initial filing of this Registration Statement on April 8, 2011. The aggregate filing fee of $49,066.77 is being offset by $34,830.00 aggregate payments previously made.

         The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this registration statement shall become effective on such date as the Commission acting pursuant to said Section 8(a), may determine.


Table of Contents

The information in this prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state or jurisdiction where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED JULY 14, 2011

PROSPECTUS

21,000,000 Shares

LOGO

Wesco Aircraft Holdings, Inc.

Common Stock



        This is an initial public offering of the common stock of Wesco Aircraft Holdings, Inc. The selling stockholders are offering 21,000,000 shares of our common stock in this offering. We will not receive any proceeds from the sale of shares held by the selling stockholders. The selling stockholders in this offering include affiliates of The Carlyle Group and Randy J. Snyder, our Chief Executive Officer.

        We expect the public offering price to be between $15.50 and $17.50 per share. Currently, no public market exists for the shares. We will apply to list our common stock on the New York Stock Exchange under the symbol "WAIR."

        Investing in our common stock involves risks. See "Risk Factors" beginning on page 12 of this prospectus.

       
 
 
  Per Share
  Total
 

Public offering price

  $               $            
 

Underwriting discounts and commissions

  $               $            
 

Proceeds, before expenses, to the selling stockholders

  $               $            

 

        The selling stockholders have granted the underwriters a 30-day option to purchase up to an additional 3,150,000 shares from the selling stockholders on the same terms and conditions as set forth above if the underwriters sell more than 21,000,000 shares of common stock in this offering. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

        The underwriters expect to deliver the shares to purchasers on or about        , 2011.



Barclays Capital   Morgan Stanley
BofA Merrill Lynch   J.P. Morgan   William Blair & Company



Credit Suisse   Deutsche Bank Securities   RBC Capital Markets
Baird   Citi   SMBC Nikko



                , 2011


GRAPHIC


Table of Contents


TABLE OF CONTENTS

 
  Page

Prospectus Summary

  1

Risk Factors

  12

Forward-Looking Statements

  27

Use of Proceeds

  28

Dividend Policy

  29

Capitalization

  30

Dilution

  32

Selected Consolidated Financial Data

  34

Management's Discussion and Analysis of Financial Condition and Results of Operations

  36

Industry Overview

  62

Business

  64

Management

  78

Compensation Discussion and Analysis

  84

Certain Relationships and Related Party Transactions

  103

Principal and Selling Stockholders

  106

Description of Capital Stock

  110

Shares Eligible For Future Sale

  113

Material U.S. Federal Tax Considerations For Non-U.S. Holders of Our Common Stock

  115

Underwriting

  119

Validity of Common Stock

  126

Experts

  126

Where You Can Find More Information

  126

Index to Consolidated Financial Statements

  F-1



        We have not authorized anyone to provide any information other than that contained or incorporated by reference in this prospectus or in any free writing prospectus prepared by or on behalf of us or to which we have referred you. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. The selling stockholders are offering to sell, and seeking offers to buy, shares of our common stock only in jurisdictions where offers and sales are permitted.



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MARKET AND INDUSTRY DATA

        We obtained the industry, market and competitive position data used throughout this prospectus from our own internal estimates and research as well as from industry publications, research, surveys and studies conducted by third parties, including the May 2010 and January 2011 publications of the Airline Monitor; the January 2011 report entitled "Business Jet Report" by the U.S. Federal Aviation Administration; the March 2011 report entitled "Lockheed Martin F-35 Joint Strike Fighter (JSF)" by Forecast International; the November 2011 report entitled "Boeing Current Market Outlook, 2010-2029" by Boeing; the 2009 and 2010 publications of the "Statistical Databook and Industry Outlook" by the General Aviation Manufacturers Association; the October 2010 report entitled "Business Aviation Outlook" by Honeywell; and an independent research report that was prepared by Stax Inc. for our use in connection with this offering. Industry publications, studies and surveys generally state that they have been obtained from sources believed to be reliable. We have not independently verified market and industry data from third-party sources. Estimates of historical growth rates in the markets where we operate are not necessarily indicative of future growth rates in such markets.


CERTAIN TRADEMARKS

        This prospectus includes trademarks, such as Wesco Aircraft® and the Wesco logo, which are protected under applicable intellectual property laws and are our property and/or the property of our subsidiaries. This prospectus also contains trademarks, service marks, copyrights and trade names of other companies, which are the property of their respective owners. Solely for convenience, our trademarks and tradenames referred to in this prospectus may appear without the® or™ symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the right of the applicable licensor to these trademarks and tradenames.

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PROSPECTUS SUMMARY

        This summary highlights information contained elsewhere in this prospectus. Because this is only a summary, it does not contain all of the information that may be important to you. You should read this entire prospectus and should consider, among other things, the matters set forth under "Risk Factors," "Selected Consolidated Financial Data" and "Management's Discussion and Analysis of Financial Condition and Results of Operations," and our financial statements and related notes thereto appearing elsewhere in this prospectus before making your investment decision. Unless otherwise noted in this prospectus, the term "Wesco Aircraft" means Wesco Aircraft Holdings, Inc., our top-level holding company, and the terms "Wesco," "the Company," "we," "us," "our" and "our company" mean Wesco Aircraft and its subsidiaries, including Wesco Aircraft Hardware Corp., our primary domestic operating company, and Wesco Aircraft Europe, Ltd., our primary foreign operating company. References to "fiscal year" mean the year ending or ended September 30. For example, "fiscal year 2010" or "fiscal 2010" means the period from October 1, 2009 to September 30, 2010.

Our Company

        We are one of the world's largest distributors and providers of comprehensive supply chain management services to the global aerospace industry on an annual sales basis. Our services range from traditional distribution to the management of supplier relationships, quality assurance, kitting, just-in-time, or JIT, delivery and point-of-use inventory management. We supply approximately 450,000 different stock keeping units, or SKUs, including hardware, bearings, tools and more recently, electronic components and machined parts. In fiscal 2010, sales of hardware represented 80% of our net sales, with highly engineered fasteners constituting 83% of that amount. We serve our customers under three types of arrangements: JIT contracts, which govern comprehensive outsourced supply chain management services; long term agreements, or LTAs, which set prices for specific parts; and ad hoc sales. JIT contracts and LTAs, which together comprised approximately 63% of our fiscal 2010 net sales, are multi-year arrangements that provide us with significant visibility into our future sales.

        Wesco was founded in 1953 by the father of our current chief executive officer and has a long history of consistent growth and profitability. We have grown our net sales at a 13.4% compound annual growth rate, or CAGR, over the past 20 years to $656.0 million in fiscal 2010. Our growth and profitability have been driven by our focus on customer service and our management's ability to make optimal inventory purchasing decisions through the use of our highly customized information technology, or IT, system. We believe that with more than 1,000 employees across 28 locations in 10 countries, we are well positioned to continue our track record of strong long-term growth and profitability.

        We believe we offer a compelling value proposition to both our customers and suppliers. Customers that utilize our comprehensive JIT supply chain management services are frequently able to realize significant benefits including: reduced inventory levels, fewer disruptions of production schedules, improved quality assurance and reduced administrative and overhead costs. Our more than 1,100 suppliers also derive several benefits from our scale, global reach and unique business model, including: access to over 7,200 customer accounts, improved manufacturing efficiency, reduced inventory levels, improved performance in meeting on-time-delivery targets to end customers and reduced administrative and overhead costs.

Industry Overview

        According to Stax, the global market for C class aerospace parts, which includes hardware, bearings, electronic components and machined parts for both commercial and military customers, was approximately $6.5 billion in 2010. Approximately $4.2 billion of this market flows through distributors.

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        The key trends and drivers of growth in our market include:

        Increased Demand for New Aircraft Production.    The original equipment manufacturer, or OEM, market for C class aerospace parts in 2010 was approximately $4.5 billion according to Stax, with approximately $2.7 billion of this total relating to sales to the commercial end market and $1.8 billion relating to the military end market. Increased passenger traffic volumes and the return to profitability of the global airline industry have renewed demand for commercial aircraft deliveries, which are forecasted by Airline Monitor to grow at a CAGR of approximately 4.5% over the next ten years. We also expect commercial aircraft production to be supplemented by increases in business and regional jet deliveries. Future military aerospace OEM demand is expected to be driven by increases in the production of the Lockheed Martin F-35 Joint Strike Fighter, or JSF. The JSF is a next-generation fighter that is designed for the U.S. Navy, Marines and Air Force, as well as key U.S. allies such as the United Kingdom, Italy and The Netherlands.

        Increased Demand from the MRO Market.    According to Stax, the combined commercial and military maintenance, repair and overhaul, or MRO, market represented approximately $2.0 billion of the total C class aerospace parts market in 2010. We expect commercial MRO providers to benefit from the same trends as those impacting the commercial OEM market, including increased revenue passenger miles, or RPMs, which will in turn drive growth in the commercial fleet and greater utilization of existing aircraft. We expect demand in the military MRO market to be driven by requirements to maintain aging military fleets, changes in the overall fleet size and the level of U.S. military activity overseas.

        Industry Consolidation.    We are one of the top two aerospace distribution companies by sales and, together with our largest competitor, accounted for approximately $1.4 billion, or 22%, of the approximately $6.5 billion C class aerospace parts market in 2010, of which approximately $656.0 million, or 10%, was attributable to us. The remainder of the market is highly fragmented, which creates significant opportunities for further consolidation. Several benefits typically accrue to distributors through consolidation, including efficiencies in leveraging costs over a larger revenue base, increased customer penetration facilitated by a larger product offering and a reduction in purchasing costs driven by larger volume-based discounts. We expect these benefits to support further consolidation in the industry.

        Globalization.    The manufacture of aircraft and aircraft structures is becoming more globalized, as nations such as China, India and the UAE invest heavily to develop their aerospace industries. In addition, many U.S. and European OEMs continue to expand their operations in international markets in order to benefit from labor cost savings as local businesses seek to partner with established global companies. These OEMs and subcontractors expect to receive the same quality parts and services in new markets that they receive in their home markets. We believe that these quality and service expectations and the overall growth rates in international aerospace markets present significant opportunities for global supply chain managers such as Wesco.

Our Competitive Strengths

        We believe our key competitive strengths include the following:

        Leader in Attractive Global Market.    We are one of the world's largest distributors and providers of comprehensive supply chain management services to the global aerospace industry on an annual sales basis. We believe we offer the world's broadest inventory of aerospace parts comprised of approximately 450,000 SKUs. In addition, we fill approximately 8,000 orders per work day and manage approximately 350,000 stocking bins throughout our customers' facilities. We believe that the scale of our global distribution network, our value-added services and the depth, breadth and dollar investment in our inventory provide us with a significant competitive advantage in an attractive market.

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        Compelling Value Proposition.    We offer a compelling value proposition to our customers by combining access to what we believe to be the world's broadest inventory of aerospace parts with our unique capabilities in comprehensive supply chain management. Our services can significantly improve on-time-delivery performance, enabling our customers to reduce their inventory while at the same time decreasing the frequency of production interruptions caused by part shortages. Aerospace companies that outsource to a supply chain manager like Wesco can reduce overhead and administrative costs relating to internal procurement, quality assurance, inventory stocking and other related personnel.

        Diverse Customer and Program Base.    We maintain strong relationships with over 7,200 active customers including major OEMs such as Airbus, Boeing, Bombardier, Embraer, Cessna, Gulfstream, BAE Systems, Bell Helicopter, Lockheed Martin, Northrop Grumman and Raytheon. We supply products to nearly every major Western aircraft in production, including the B-787, B-737, B-747, A-320, JSF and V-22. During fiscal 2010, no single customer or aircraft program represented more than 15% of our net sales. We have actively worked to transition our largest customers from ad hoc purchases to multi-year LTAs or comprehensive JIT supply chain management agreements, the latter two of which together represented approximately 63% of our fiscal 2010 net sales. By developing strong, long-term relationships with a diverse set of customers, we have significant visibility into our future sales.

        Superior Purchasing Capabilities and Supplier Relationships.    Our management is highly skilled in analyzing supply, demand, cost and pricing factors in order to make optimal inventory investment decisions, and we maintain close relationships with the leading suppliers in the industry. In particular, Precision Castparts Corp., or Precision Castparts, and Alcoa Fastening Systems supplied approximately 22% and 20%, respectively, of the products we purchased during fiscal 2010. As a result of our scale and the strength of our relationships, many of our suppliers offer us attractive volume-based price discounts. Our success in making optimal inventory purchasing decisions is driven by our management's deep understanding of our industry and is further facilitated by our highly customized IT system. Our superior inventory purchasing capabilities and strength of our supplier relationships have contributed substantially to what we believe are our industry-leading operating margins.

        Experienced Management Team with Significant Equity Ownership.    Our management team has extensive industry experience and company tenure. Our Chief Executive Officer and other executive officers have an average of more than 20 years of experience with us and more than 30 years in our industry. In addition, our executive officers will own approximately 12.3% of the common stock of the Company following this offering. We believe that this significant equity ownership aligns the interests of our executive officers with our stockholders.

Our Strategy for Continued Growth

        We intend to pursue the following strategies in order to continue to grow our business:

        Continued Focus on Operational Excellence.    We intend to further our existing customer relationships by continuing to invest in our highly customized IT system and providing best-in-class on-time delivery performance and quality assurance. We believe that by focusing on operational excellence, we will be able to maintain high customer satisfaction and industry-leading operating margins.

        Win New Business from Existing Customers.    We will continue our strategy of expanding our relationships with existing customers by transitioning them to our comprehensive JIT supply chain management services as well as expanding our programs to include additional customer sites and SKUs, and by introducing new supply chain solutions that minimize costs, improve productivity and lower inventory investment.

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        Expand Customer Base.    We plan to expand our customer base and have had significant success in winning business when competing distributors have been unable to meet customer service level requirements and in situations where customers have outsourced work that was previously performed internally. In addition, we will increase our focus on serving airlines and airline maintenance organizations.

        Further Expand into International Markets.    We have recently established a presence in international locations such as China, India and Saudi Arabia, and we intend to expand into other high growth regions such as Mexico to support new and existing customers. Our international expansion efforts will enable us to better reach new customers and more effectively serve our existing customer base as the manufacture of aircraft and aircraft structures continues to become more globalized.

        Selectively Pursue Strategic Acquisitions.    Our industry is highly fragmented and we believe that there are opportunities for continued consolidation. We believe that we are well positioned to expand our product offering and geographical footprint through strategic acquisitions.

Recent Developments

        On April 7, 2011, Wesco Aircraft Hardware Corp., our wholly owned, primary domestic operating subsidiary, entered into a new $765.0 million senior secured credit facility with Barclays Bank PLC, as administrative agent and collateral agent, and Merrill Lynch, Pierce, Fenner & Smith, Incorporated, Key Bank, N.A. and Barclays Capital, as joint lead arrangers, which we refer to as our new senior secured credit facilities.

        The purpose of the refinancing was to extend the maturity dates under the term loans of Wesco Aircraft Hardware Corp.'s existing senior secured credit facilities, which we refer to as our old senior secured credit facilities, increase the borrowing capacity under our revolver and pay related fees and expenses. The new senior secured credit facilities consist of a (i) $150.0 million revolving credit facility, which we refer to as the new revolving facility, (ii) $265.0 million term loan A facility, which we refer to as the new term loan A facility, and (iii) $350.0 million term loan B facility, which we refer to as the new term loan B facility. Wesco Aircraft is a guarantor of the new senior secured credit facilities.

Risks Related to Our Business

        Investing in our common stock involves substantial risk. You should carefully consider all of the information in this prospectus prior to investing in our common stock. There are several risks related to our business that are described under "Risk Factors" elsewhere in this prospectus. Among these important risks are the following:

    general economic and industry conditions;

    changes to military spending;

    risks unique to suppliers of equipment and services to the U.S. government;

    risks associated with our 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 we rely;

    our ability to effectively manage our inventory;

    our suppliers' ability to provide us with the products we sell in a timely manner, in adequate quantities and/or at a reasonable cost;

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    our ability to maintain an effective IT system;

    our ability to retain key personnel;

    risks associated with our international operations;

    fluctuations in our financial results from period-to-period;

    Carlyle's ability to control the majority of the voting power of our outstanding common stock; and

    our ability to effectively compete in our industry.

Our Sponsor

        The Carlyle Group, or Carlyle, is a global alternative asset management firm with $107.4 billion of assets under management committed to 84 funds as of March 31, 2011. Carlyle invests across three segments—corporate private equity, real assets and global market strategies—in Africa, Asia, Australia, Europe, North America and South America, focusing on aerospace and defense, industrial, transportation, consumer and retail, energy and power, financial services, healthcare, infrastructure, technology and business services, and telecommunications and media. Since 1987, the firm has invested $74.9 billion of equity in 1,052 transactions. Carlyle employs more than 1,000 people in 21 countries. Representative Carlyle transactions include the acquisitions of The Hertz Corporation, the largest worldwide car rental brand, Booz Allen Hamilton, a provider of management and technology consulting services to the U.S. government in the defense, intelligence and civil markets, Kinder Morgan, an energy pipeline and storage company, and The Nielsen Company, an information and data measurement company.

        As of June 30, 2011, Carlyle, through Falcon Aerospace Holdings, LLC, owned approximately 83.8% of our outstanding common stock. Following the completion of this offering and assuming that the underwriters do not exercise their option to purchase additional shares of common stock, Carlyle will continue to own approximately 62.5% of our outstanding common stock.

Company History

        Wesco Aircraft was incorporated in Delaware on July 21, 2006, as a holding company for Wesco Aircraft Hardware Corp., our wholly owned, primary domestic operating subsidiary, Wesco Aircraft Europe, Ltd., our primary foreign operating subsidiary, and certain other foreign operating subsidiaries, in connection with the acquisition of 100% of the outstanding stock of Wesco Aircraft Hardware Corp., Wesco Aircraft Israel and the European entities of Flintbrook Ltd., Wesco Aircraft France and Wesco Aircraft Germany by Wesco Aircraft, which we refer to as the Carlyle Acquisition. Wesco Aircraft Hardware Corp., our primary domestic operating company, was incorporated in California on October 11, 1971 and Wesco Aircraft Europe, Ltd., our primary foreign operating company, was incorporated in the United Kingdom on October 19, 1984.

        Our principal executive offices are located at 27727 Avenue Scott, Valencia, CA 91355 and our telephone number is (661) 775-7200. Our Internet address is www.wescoair.com. The contents of our website are not part of this prospectus.

Recent Results

        Set forth below are certain preliminary estimates of the results of operations that we expect to report for our third quarter. Since we have not yet closed our books for our third fiscal quarter ended June 30, 2011, our actual results may differ from these estimates due to the completion of our financial closing procedures, final adjustments and other developments that may arise between now and the time the financial results for our third quarter are finalized.

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        The preliminary financial data included in this registration statement has been prepared by, and is the responsibility of, our management. PricewaterhouseCoopers LLP has not audited, reviewed, compiled or performed any procedures with respect to such preliminary financial data. Accordingly, PricewaterhouseCoopers LLP does not express an opinion or any other form of assurance with respect thereto.

        The following are preliminary estimates for the three months ended June 30, 2011.

        Net Sales.    Net sales are expected to be between $177.0 million and $181.0 million for the three months ended June 30, 2011, an increase of 4.6% at the midpoint of this range, as compared to $171.1 million for the three months ended June 30, 2010. The estimated increase in net sales is primarily due to an increase in ad hoc and LTA net sales, partially offset by a reduction in JIT net sales. The decrease in JIT net sales was primarily due to the expiration of two contracts, while the increase in ad hoc net sales was primarily the result of these same customers requiring products no longer covered by JIT contracts, as well as general growth across our customer base. The increase in LTA net sales was primarily driven by an increase in military sales.

        Income from Operations.    Income from operations is expected to be between $37.3 million and $39.3 million for the three months ended June 30, 2011, a decrease of 11.5% at the midpoint of this range, as compared to $43.3 million for the three months ended June 30, 2010. The estimated decrease in income from operations for the three months ended June 30, 2011 as compared to June 30, 2010, is primarily due to costs associated with our initial public offering of approximately $2.5 million, increased payroll costs of approximately $1.2 million, as well as an unfavorable change in our sales mix.

        Depreciation and Amortization.    Depreciation and amortization is expected to be between $2.1 million and $2.5 million for the three months ended June 30, 2011, as compared to $2.3 million as of June 30, 2010. There have been no significant changes in depreciation and amortization as compared to the same period in the prior year.

        We have provided a range for the preliminary results described above primarily because our financial closing procedures for the month and quarter ended June 30, 2011 are not yet complete. As a result, there is a possibility that our final results will vary from these preliminary estimates. We currently expect that our final results will be within the ranges described above. It is possible, however, that our final results will not be within the ranges we currently estimate. We expect to complete our closing procedures for the quarter ended June 30, 2011 in August 2011.

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The Offering

Common stock offered by the selling stockholders

  21,000,000 shares.

Selling stockholders

 

The selling stockholders in this offering include affiliates of Carlyle and Randy J. Snyder, our Chief Executive Officer. See "Principal and Selling Stockholders."

Common stock outstanding after this offering

 

85,569,794 shares.

Option to purchase additional shares of common stock

 

The selling stockholders have granted the underwriters a 30-day option to purchase up to an additional 3,150,000 shares of common stock at the initial public offering price to cover overallotments, if any.

Use of proceeds

 

We will not receive any net proceeds from the sale of shares by the selling stockholders, including with respect to the underwriters' overallotment option. See "Use of Proceeds."

Proposed New York Stock Exchange symbol

 

"WAIR."

Risk factors

 

See "Risk Factors" beginning on page 12 of this prospectus for a discussion of factors you should carefully consider before deciding to invest in our common stock.

        The number of shares of our common stock to be outstanding after completion of this offering is 85,569,794 as of March 31, 2011 and excludes:

    7,270,352 shares of common stock issuable upon the exercise of options outstanding as of March 31, 2011 (after giving effect to the exercise of options in connection with the offering, as set forth below) at a weighted average exercise price of $4.32 per share;

    5,604,338 shares of common stock issuable pursuant to restricted stock units on the earlier of September 28, 2012 or the occurrence of a change in control, as defined in the applicable award agreement;

    6,444 shares of restricted common stock that are scheduled to vest on September 30, 2011; and

    5,850,000 shares of common stock reserved for issuance under our 2011 Equity Incentive Award Plan, which we have adopted in connection with this offering, which amount includes 566,685 shares of common stock issuable pursuant to awards under our 2011 Equity Incentive Award Plan that our compensation committee has approved to be granted upon the consummation of this offering.

        Unless we specifically state otherwise, all information in this prospectus assumes:

    no exercise of the overallotment option by the underwriters;

    no exercise of options outstanding as of March 31, 2011, except for 553,951 shares of common stock to be issued and sold in this offering upon the exercise of vested stock options by the selling stockholders at a weighted average exercise price of $4.57 per share;

    the vesting of 6,444 shares of restricted common stock on June 30, 2011;

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    an initial public offering price of $16.50 per share, the midpoint of the estimated offering price range set forth on the cover page of this prospectus; and

    the conversion of all outstanding shares of our Class B convertible redeemable common stock, which we refer to as our Class B common stock, into shares of common stock, on a one-for-one basis, which conversion will occur immediately prior to the effectiveness of this registration statement. In order to effect this conversion, we are amending and restating our certificate of incorporation.

        Concurrently with the amending and restating of our certificate of incorporation, the number of shares of our authorized common stock will be increased to 950,000,000 shares, and each share of common stock then outstanding, including the shares of our Class B common stock that will have been converted, on a one-for-one basis, into shares of common stock, will be split into nine shares of common stock by way of a stock split. Unless we specifically state otherwise, the share information in this prospectus reflects the increase in the authorized number of our common stock and the stock split.

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Summary Historical Financial Data

        The following tables set forth our summary historical financial data for the years ended September 30, 2008, 2009 and 2010 and for the six month periods ended March 31, 2010 and 2011. Our summary historical income statement data for each of the years in the three-year period ended September 30, 2010 have been derived from our audited financial statements included elsewhere in this prospectus. Our summary historical income statement data for the six months ended March 31, 2010 and 2011 and our summary historical balance sheet data as of March 31, 2011 have been derived from our unaudited financial statements included elsewhere in this prospectus that, in the opinion of management, include all adjustments consisting only of normal, recurring adjustments necessary for a fair presentation of the results for the unaudited interim period. Results for the six months ended March 31, 2011 are not necessarily indicative of the results that may be expected for the year ending September 30, 2011 or for any other period. The selected historical balance sheet data as of March 31, 2011 have been derived from our unaudited financial statements not included in this prospectus. The financial data set forth below are not necessarily indicative of future results of operations. This data should be read in conjunction with, and is qualified in its entirety by reference to, the "Selected Consolidated Financial Data," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Capitalization" sections and our financial statements and notes thereto included elsewhere in this prospectus.

 
  Year Ended September 30,   Six Months Ended
March 31,
 
(Dollars in thousands, except share and per share amounts)
  2008   2009   2010   2010   2011  
 
   
   
   
  (unaudited)
 

Consolidated statements of income:

                               

Net sales:

                               
 

North America

  $ 551,135   $ 557,874   $ 603,809   $ 283,285   $ 318,808  
 

Rest of the World

    112,623     102,796     95,342     47,259     57,527  
 

Intercompany eliminations

    (59,415 )   (47,983 )   (43,115 )   (19,633 )   (26,792 )
                       
   

Net sales

    604,343     612,687     656,036     310,911     349,543  

Gross profit:

                               
 

North America

    221,898     204,296     226,497     103,788     117,725  
 

Rest of the World

    42,143     39,733     34,167     17,265     19,523  
 

Intercompany eliminations

    (7,433 )   (5,742 )   (6,434 )   (3,214 )   (3,123 )
                       
   

Gross profit

    256,608     238,287     254,230     117,839     134,125  

Selling, general and administrative expenses:

                               
 

North America

    84,807     86,007     81,674     40,140     39,593  
 

Rest of the World

    20,951     17,888     18,241     9,185     10,288  
                       
   

Selling, general and administrative expenses

    105,758     103,895     99,915     49,325     49,881  
                       

Income from operations

    150,850     134,392     154,315     68,514     84,244  

Interest expense, net

    (48,743 )   (37,707 )   (36,270 )   (18,214 )   (12,586 )

Other income (expense), net

    746     (376 )   (458 )   1,056     (177 )
                       

Income before provision for income taxes

    102,853     96,309     117,587     51,356     71,481  
                       

Provision for income taxes

    44,251     37,862     43,913     19,171     27,873  
                       

Net income

  $ 58,602   $ 58,447   $ 73,674   $ 32,185   $ 43,608  
                       

Earnings per share data:

                               

Net income per share:

                               
   

Basic

  $ 0.69   $ 0.69   $ 0.81   $ 0.36   $ 0.48  
   

Diluted

  $ 0.67   $ 0.65   $ 0.81   $ 0.36   $ 0.47  

Weighted average shares outstanding:

                               
   

Basic

    84,783,897     84,965,364     90,569,133     90,569,133     90,591,102  
   

Diluted

    87,661,422     89,682,732     91,067,832     90,571,257     92,636,208  

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  Year Ended September 30,   Six Months Ended
March 31,
 
(Dollars in thousands)
  2008   2009   2010   2010   2011  
 
   
   
   
  (unaudited)
 

Consolidated balance sheet data:

                               
   

Cash and cash equivalents

  $ 15,998   $ 11,406   $ 39,463   $ 24,056   $ 45,670  
   

Working capital(1)

    438,863     526,375     565,126     552,997     600,679  
   

Total assets

    1,173,620     1,254,812     1,279,012     1,266,090     1,300,286  
   

Total liabilities

    763,847     780,872     733,273     763,674     709,696  
   

Total stockholders' equity

    409,773     473,940     545,739     502,416     590,590  

Statements of Cash Flows Data:

                               
   

Net cash provided by operating activities

  $ 24,702   $ 1,266   $ 100,773   $ 31,117   $ 23,657  
   

Net cash used in investing activities

    (115,798 )   (4,135 )   (3,077 )   (1,325 )   (2,761 )
   

Net cash provided by (used in) financing activities

    94,114     (1,720 )   (69,483 )   (16,471 )   (14,875 )

Other Financial and Operating Data:

                               
   

Capital expenditures

  $ (6,769 ) $ (4,135 ) $ (3,077 ) $ (1,325 ) $ (2,761 )
   

Adjusted EBITDA(2)

    184,060     156,985     166,467     75,857     89,047  
   

Adjusted Net Income(2)

    77,435     71,869     81,307     35,673     46,082  

(1)
Working capital is defined as our current assets minus our current liabilities.

(2)
We disclose Adjusted EBITDA and Adjusted Net Income, which are non-GAAP measures our management uses to evaluate our business, because we believe they assist investors and analysts in comparing our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. We believe these metrics are used in the financial community, and we present these metrics to enhance investors, understanding of our operating performance and cash flow. You should not consider Adjusted EBITDA and Adjusted Net Income as an alternative to net income, determined in accordance with GAAP, as an indicator of operating performance, or as an alternative to net cash provided by operating activities, determined in accordance with GAAP, as an indicator of our cash flow. Adjusted EBITDA and Adjusted Net Income are not measurements of financial performance under GAAP, and these metrics may not be comparable to similarly titled measures of other companies.

Adjusted EBITDA varies from (i) the measure "EBITDA" discussed in this prospectus under "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Senior Secured Credit Facilities" and in our consolidated financial statements, which are included elsewhere in this prospectus, and (ii) the measure "Bonus EBITDA" discussed in this prospectus under "Compensation Discussion and Analysis" and in our consolidated financial statements, which are included elsewhere in this prospectus. We have included Adjusted EBITDA rather than Bonus EBITDA because Adjusted EBITDA does not exclude all stock-based compensation expense and fees paid under the management agreement with TC Group, L.L.C., an affiliate of Carlyle (see "Certain Relationships and Related Party Transactions"), whereas Bonus EBITDA excludes these items as they are not items under the control of employees and therefore not used as measures in determining their compensation.

"Adjusted EBITDA" represents net income before: (i) income tax provision, (ii) net interest expense, (iii) depreciation and amortization, (iv) amortization of inventory step-up, and (v) Carlyle Acquisition related non-cash stock-based compensation expense. The following table reconciles Net income to Adjusted EBITDA:

 
  Year Ended September 30,   Six Months Ended
March 31,
 
(Dollars in thousands)
  2008   2009   2010   2010   2011  
 
   
   
   
  (unaudited)
 

Net income

  $ 58,602   $ 58,447   $ 73,674   $ 32,185   $ 43,608  

Income tax provision

    44,251     37,862     43,913     19,171     27,873  

Interest expense, net

    48,743     37,707     36,270     18,214     12,586  

Depreciation and amortization

    7,846     10,065     8,821     4,461     4,629  

Amortization of inventory step-up(a)

    11,418     3,861     2,200     1,032      

Carlyle Acquisition related non-cash stock-based compensation expense(b)

    13,200     9,043     1,589     794     351  
                       

Adjusted EBITDA

  $ 184,060   $ 156,985   $ 166,467   $ 75,857   $ 89,047  

(a)
Represents the amortization of the fair value step-up of inventory associated with the Carlyle Acquisition and the acquisition of Airtechnics, Inc. included in cost of sales.

(b)
Reflects stock-based compensation expense for restricted stock awards, restricted stock units and stock options granted in connection with the Carlyle Acquisition. This adjustment excludes any remaining stock compensation expense unrelated to the Carlyle Acquisition of $500, $1,346, $921, $487 and $559 for the years ended September 30, 2008, 2009, 2010 and the six months ended March 31, 2010 and 2011, respectively. Stock compensation expense in future periods may vary depending on the number of awards granted.

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    "Adjusted Net Income" represents net income before: (i) amortization of intangible assets, (ii) amortization of inventory step-up, (iii) amortization or write-off of deferred financing costs and original issue discount, or OID, (iv) Carlyle Acquisition related non-cash stock-based compensation expense and (v) the tax effect of items (i) through (iv) above calculated using an assumed effective tax rate. The following table reconciles Net income to Adjusted Net Income:

 
  Year Ended September 30,   Six Months Ended
March 31,
 
(Dollars in thousands)
  2008   2009   2010   2010   2011  
 
   
   
   
  (unaudited)
 

Net income

  $ 58,602   $ 58,447   $ 73,674   $ 32,185   $ 43,608  

Amortization of intangible assets(a)

    3,391     5,763     4,119     2,136     1,848  

Amortization of inventory step-up(b)

    11,418     3,861     2,200     1,032      

Amortization of deferred financing costs(c)

    3,379     3,703     4,814     1,852     1,925  

Carlyle Acquisition related non-cash stock-based compensation expense(d)

    13,200     9,043     1,589     794     351  

Tax effect of above adjustments(e)

    (12,555 )   (8,948 )   (5,089 )   (2,326 )   (1,650 )
                       

Adjusted Net Income

  $ 77,435   $ 71,869   $ 81,307   $ 35,673   $ 46,082  

(a)
We include fixed asset depreciation expense in our presentation of Adjusted Net Income because fixed asset depreciation expense reflects recurring expenses associated with capital expenditures made in our business, whereas we exclude amortization of intangible assets from Adjusted Net Income because amortization of intangible assets is a result of historical, non-recurring transactions, including the Carlyle Acquisition and the acquisition of Airtechnics, Inc.

(b)
Represents the amortization of the fair value step-up of inventory associated with the Carlyle Acquisition and the acquisition of Airtechnics, Inc. included in cost of sales.

(c)
Represents the amortization of deferred financing costs associated with our term loans and revolving line of credit. Amortization of OID associated with our $765.0 million new senior secured credit facilities entered into on April 7, 2011 will be included in this adjustment in future periods.

(d)
Reflects stock-based compensation expense for restricted stock awards, restricted stock units and stock options granted in connection with the Carlyle Acquisition. This adjustment excludes any remaining stock compensation expense unrelated to the Carlyle Acquisition of $500, $1,346, $921, $487 and $559 for the years ended September 30, 2008, 2009, 2010 and the six months ended March 31, 2010 and 2011, respectively. Stock compensation expense in future periods may vary depending on the number of awards granted.

(e)
Reflects taxes on adjustments at an assumed marginal tax rate of 40%.

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RISK FACTORS

        An investment in our common stock involves a high degree of risk. You should consider carefully the following risks and other information contained in this prospectus before you decide whether to buy our common stock. If any of the events contemplated by the following discussion of risks should occur, our business, results of operations and financial condition could suffer significantly. As a result, the market price of our common stock could decline, and you may lose all or part of the money you paid to buy our common stock. The following is a summary of all the material risks known to us.

Risks Related to Our Business and Industry

We are directly dependent upon the condition of the aerospace industry, which is closely tied to global economic conditions, and if the volatility in the global financial markets were to result in a slowdown in the current economic recovery or a return to a recession, our business, financial condition and results of operations could be negatively impacted.

        Demand for the products and services we offer is directly tied to the delivery of new aircraft and aircraft utilization, which, in turn, is impacted by global economic conditions. Although the economy has exhibited signs of recovery, global financial markets have experienced extreme volatility and disruption for more than two years, which, at times, reached unprecedented levels as a result of the financial crisis affecting the banking system and participants in the global financial markets. Concerns over the tightening of the corporate credit markets, inflation, energy costs and the dislocation of the real estate and mortgage markets have contributed to the volatility in the global financial markets and, together with the global financial crisis, have created uncertainties for global economic conditions in the future. The aerospace industry is particularly sensitive to changes in economic conditions. In 2009, RPMs on commercial aircraft declined due to the global recession. During the same period, the industry experienced declines in large commercial, regional jet and business jet deliveries. While demand for commercial and regional jets has recovered somewhat, business jet orders and deliveries have recovered more slowly. A slowdown in the current economic recovery or a return to a recession would negatively impact the aerospace industry, and could negatively impact our business, financial condition and results of operations.

Military spending, including spending on the products we sell, is dependent upon national defense budgets, and a reduction in military spending could have a material adverse effect on our business, financial condition and results of operations.

        During the year ended September 30, 2010, approximately 53% of our net sales were related to military aircraft. The military market is significantly dependent upon government budget trends, particularly the U.S. Department of Defense, or DoD, budget. Future DoD budgets could be negatively impacted by several factors, including, but not limited to, a change in defense spending policy by the current and future presidential administrations and Congress, the U.S. Government's budget deficits, spending priorities, the cost of sustaining the U.S. military presence in overseas operations and possible political pressure to reduce U.S. Government military spending, each of which could cause the DoD budget to decline. A decline in U.S. military expenditures could result in a reduction in military aircraft production, which could have a material adverse effect on our business, financial condition and results of operations.

We are subject to unique business risks as a result of supplying equipment and services to the U.S. Government directly and as a subcontractor, which could lead to a reduction in our net sales from, or the profitability of our supply arrangements with, the U.S. Government.

        Companies engaged in supplying defense-related equipment and services to U.S. Government agencies are subject to business risks specific to the defense industry. We contract directly with the U.S. Government and as a subcontractor to customers contracting with the U.S. Government. These risks include the ability of the U.S. Government to unilaterally suspend us from receiving new contracts

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pending resolution of alleged violations of procurement laws or regulations, reduce the value of existing contracts and audit our contract-related costs and fees. In addition, most of our U.S. Government contracts and subcontracts can be terminated by the U.S. Government or the contracting party, as applicable, at its convenience. Termination for convenience provisions provide only for our recovery of costs incurred or committed, settlement expenses and profit on the work completed prior to termination.

        In addition, the U.S. Government may seek to review our costs to determine whether our pricing is "fair and reasonable." Such a review could be costly and time consuming for our management and could distract from our ability to effectively manage the business. As a result of such a review, we could be required to provide a refund to the U.S. Government or we could be asked to enter into an arrangement whereby our prices would be based on cost or the DoD could seek to pursue alternative sources of supply for our parts. Any of those occurrences could lead to a reduction in our net sales from, or the profitability of certain of our supply arrangements with, certain agencies and buying organizations of the U.S. Government.

        We are also subject to the federal False Claims Act, which provides for substantial civil penalties and treble damages where a contractor presents a false or fraudulent claim to the government for payment. Actions under the False Claims Act may be brought by the government or by other persons on behalf of the government (who may then share in any recovery).

We do not have guaranteed future sales of the products we sell and when we enter into JIT contracts and LTAs with our customers we generally take the risk of cost overruns, and our business, financial condition, results of operations and operating margins may be negatively affected if we purchase more products than our customers require, product costs increase unexpectedly, we experience high start up costs on new contracts or our contracts are terminated.

        Our JIT contracts and LTAs are long-term, fixed-price agreements with no guarantee of future sales volumes, and they may be terminated for convenience on short notice by our customers, often without meaningful penalties, provided that we are reimbursed for the cost of any inventory specifically procured for the customer. In addition, we purchase inventory based on our forecasts of anticipated future customer demand. As a result, we may take the risk of having excess inventory in the event that our customers do not place orders consistent with our forecasts. We also run the risk of not being able to pass along or otherwise recover unexpected increases in our product costs, including as a result of commodity price increases, which may increase above our established prices at the time we entered into the customer contract and established prices for parts we provide. We were recently awarded a major new JIT contract. When we are awarded new contracts, particularly JIT contracts, we may incur high costs, including salary and overtime costs to hire and train on-site personnel, in the start up phase of our performance. In the event that we purchase more products than our customers require, product costs increase unexpectedly, we experience high start up costs on new contracts or our contracts are terminated, our business, financial condition, results of operations and operating margins could be negatively affected.

If we lose significant customers, significant customers materially reduce their purchase orders or significant programs on which we rely are delayed, scaled back or eliminated, our business, financial condition and results of operations may be adversely affected.

        Our top ten customers for the year ended September 30, 2010 accounted for approximately 48% of our net sales. Boeing was our largest customer during fiscal 2010, accounting for approximately 15% of our net sales through purchases by its various divisions and subsidiaries. A reduction in purchasing by or loss of one of our larger customers for any reason, such as changes in manufacturing practices, loss of a customer as a result of the acquisition of such customer by a purchaser who does not fully utilize a distribution model or uses a competitor, in-sourcing by customers, a transfer of business to a competitor, an economic downturn, failure to adequately service our clients, decreased production or a

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strike, could have a material adverse effect on our business, financial condition and results of operations.

        As an example of changes in manufacturing practices that could impact us, OEMs such as Boeing and Airbus are currently incorporating an increasing amount of composite materials in the aircraft they manufacture. Aircraft utilizing composite materials generally require the use of significantly fewer C class aerospace parts than new aircraft made of more traditional non-composite materials, although the parts used are generally higher priced than C class aerospace parts used in non-composite aircraft structures. As Boeing, Airbus and other customers increase their reliance on composite materials, they may materially reduce their purchase orders from us.

        As an example of the loss of a customer resulting from the acquisition of such customer by a purchaser that does not intend to fully utilize our distribution model, we were notified by Boeing of its intent to perform certain supply chain management functions in-house that we were providing at two facilities under JIT contracts that were awarded to us prior to these particular facilities being acquired by Boeing. In fiscal 2010, sales at these facilities accounted for approximately 5.8% of net sales.

        As an example of the potential loss of business due to customer in-sourcing, it is our understanding that Boeing is undertaking an initiative to cause its first and second tier suppliers to source certain Boeing-specific materials, including fasteners, directly from manufacturers, rather than through distributors such as us. If Boeing's initiative is broadly implemented, a portion of our sales to these Boeing suppliers, and consequently our business, financial condition and results of operations, could be adversely affected.

        While we believe that we have a diversified customer and aircraft program base, we expect to derive a significant portion of our net sales from certain aerospace programs in their early production stages. In particular, our future growth will be dependent, in part, upon our sales to various OEMs and subcontractors related to the Boeing 787 and the Lockheed Martin JSF. For example, we estimate that 10% of our net sales during fiscal 2010, which includes the 5.8% of net sales generated at the facilities acquired by Boeing that are referenced above, were derived from sales to a number of customers related to the Boeing 787 and that approximately 20% of the parts we held in inventory primarily pertained to the Boeing 787. If production of any of the programs we support is terminated or delayed, or if our sales to customers affiliated with these programs are reduced or eliminated, our business, financial condition and results of operations could be adversely affected.

We operate in a highly competitive market and our failure to compete effectively may negatively impact our results of operations.

        We operate in a highly competitive global industry and compete against a number of companies, including divisions of larger companies, some of which may have significantly greater financial resources than we do, and therefore may be able to adapt more quickly to changes in customer requirements than we can. Our competitors consist of both U.S. and foreign companies and range in size from divisions of large public corporations to small privately held entities. We believe that our ability to compete depends on superior customer service and support, on-time delivery, sufficient inventory availability, competitive pricing and effective quality assurance programs. In order to remain competitive, we may have to adjust the prices of some of the products and services we sell and continue investing in our procurement, supply-chain management and sales and marketing functions, the costs of which could negatively impact our results of operations.

        In addition, we face competition for our JIT and LTA customers from both competitors in our industry and the in-sourcing of supply-chain management by our customers themselves. If any of our JIT or LTA customers decides to in-source the services we provide or switch to one of our competitors, we would be adversely affected.

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We may be unable to effectively manage our inventory as we grow, which could have a material adverse effect on our business, financial condition and results of operations.

        We have experienced rapid growth in recent periods and intend to continue to grow our business by increasing our product offerings and expanding our customer base. Due to the lead times required by our suppliers, we order products in advance of expected sales, the volume of which orders may be significant as a result of our growth strategy. Lead times generally range from several weeks up to two years, depending on industry conditions, which make it difficult to successfully manage our inventory as we plan for expected growth. For example, in 2009, our cash flows were negatively impacted as our suppliers continued filling orders that we had placed in anticipation of future sales, while orders from our customers slowed because the aerospace industry had entered a significant downturn. In the future, if we are unable to effectively manage our inventory as we attempt to grow our business, our cash flows may be negatively affected, which could have a material adverse effect on our business, financial condition and results of operations.

If suppliers are unable to supply us with the products we sell in a timely manner, in adequate quantities and/or at a reasonable cost, we may be unable to meet the demands of our customers, which could have a material adverse effect on our business, financial condition and results of operations.

        Our inventory is primarily sourced directly from manufacturing firms, and we depend on the availability of large supplies of the products we sell. Our largest supplier for the year ended September 30, 2010 was Precision Castparts. During fiscal 2010, approximately 22% of the products we purchased were from Precision Castparts and 20% were purchased from Alcoa Fastening Systems. In addition, our ten largest suppliers during fiscal 2010 accounted for approximately 58% of our purchases. These manufacturers may experience capacity constraints that result in their being unable to supply us with products in a timely manner, in adequate quantities and/or at a reasonable cost. Contributing factors to manufacturer capacity constraints include, among other things, industry or customer demands in excess of machine capacity, labor shortages and changes in raw material flows. Any significant interruption in the supply of these products or termination of our relationship with any of our suppliers could result in us being unable to meet the demands of our customers, which would have a material adverse effect on our business, financial condition and results of operations.

Our business is highly dependent on complex information technology.

        The provision and application of IT is an increasingly critical aspect of our business. Among other things, our IT system must frequently interact with those of our customers, suppliers and logistics providers. Our future success will depend on our continued ability to employ an IT system that meets our customers' demands. The failure of the hardware or software that supports our IT system, including redundancy systems, could significantly disrupt our ability to service our customers and cause economic losses for which we could be held liable and which could damage our reputation.

        Our competitors may have or may develop IT systems that permit them to be more cost effective and otherwise better situated to meet customer demands than we are able to acquire or develop. Larger competitors may be able to develop or license IT systems more cost effectively than we can by spreading the cost across a larger revenue base, and competitors with greater financial resources may be able to acquire or develop IT systems that we cannot afford. If we fail to meet the demands of our customers or protect against disruptions of our IT system, we may lose customers, which could seriously harm our business and adversely affect our operating results and operating cash flow.

We may be unable to retain personnel who are key to our operations.

        Our success, among other things, is dependent on our ability to attract, develop and retain highly qualified senior management and other key personnel. Competition for key personnel is intense, and our ability to attract and retain key personnel is dependent on a number of factors, including prevailing

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market conditions and compensation packages offered by companies competing for the same talent. The inability to hire, develop and retain these key employees may adversely affect our operations.

There are risks inherent in international operations that could have a material adverse effect on our business, financial condition and results of operations.

        While the majority of our operations are based in the United States, we have significant international operations, with facilities in Canada, China, France, Germany, Israel, Italy, Saudi Arabia, South Korea and the United Kingdom, and customers throughout North America, Latin America, Europe, Asia and the Middle East. For the years ended September 30, 2009 and 2010, 32% and 26%, respectively, of our net sales were derived from customers located outside the United States.

        Our international operations are subject to, without limitation, the following risks:

    the burden of complying with multiple and possibly conflicting laws and any unexpected changes in regulatory requirements;

    political risks, including risks of loss due to civil disturbances, acts of terrorism, acts of war, guerilla activities and insurrection;

    unstable economic, financial and market conditions and increased expenses as a result of inflation, or higher interest rates;

    difficulties in enforcement of third-party contractual obligations and collecting receivables through foreign legal systems;

    difficulties in staffing and managing international operations and the application of foreign labor regulations;

    differing local product preferences and product requirements; and

    potentially adverse tax consequences from changes in tax laws, requirements relating to withholding taxes on remittances and other payments by subsidiaries and restrictions on our ability to repatriate dividends from our subsidiaries.

        In addition, fluctuations in the value of foreign currencies affect the dollar value of our net investment in foreign subsidiaries, with these fluctuations being included in a separate component of stockholders' equity. At September 30, 2010, we reported a cumulative foreign currency translation adjustment of approximately $4.4 million in stockholders' equity as a result of foreign currency adjustments, and we may incur additional adjustments in future periods. In addition, operating results of foreign subsidiaries are translated into U.S. dollars for purposes of our statement of operations at average monthly exchange rates. Moreover, to the extent that our net sales are not denominated in the same currency as our expenses, our net earnings could be materially adversely affected. For example, a portion of labor, material and overhead costs for our facilities in the United Kingdom, Germany, France and Italy are incurred in British Pounds or Euros, but the related net sales are generally denominated in U.S. dollars. Changes in the value of the U.S. dollar or other currencies could result in material fluctuations in foreign currency translation amounts or the U.S. dollar value of transactions and, as a result, our net earnings could be materially adversely affected. For example, in fiscal 2009, the strengthening of the U.S. dollar relative to the British pound resulted in a negative impact of approximately $22.1 million. Although we at times engage in hedging transactions to manage or reduce our foreign exchange risk, our attempts to manage our foreign currency exchange risk may not be successful and, as a result, our business, financial condition and results of operations could be materially adversely affected.

        Our international operations also cause our business to be subject to the U.S. Export Control regime and similar regulations in other countries, in particular in the United Kingdom. In the United States, items of a commercial nature are generally subject to regulatory control by the U.S. Department of Commerce's Bureau of Industry and Security and to Export Administration Regulations, and other

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international trade regulations may apply as well. Additionally, we are not permitted to export some of the products we sell. In the future, regulatory authorities may require us to obtain export licenses or other export authorizations to export the products we sell abroad, depending upon the nature of items being exported, as well as the country to which the export is to be made. We cannot assure you that any of our applications for export licenses or other authorizations will be granted or approved. Furthermore, the export license and export authorization process is often time-consuming. Violation of export control regulations could subject us to fines and other penalties, such as losing the ability to export for a period of years, which would limit our sales and significantly hinder our attempts to expand our business internationally.

Our international operations require us to comply with anti-corruption laws and regulations of the U.S. government and various international jurisdictions, and our failure to comply with these laws and regulations could adversely affect our reputation, business, financial condition and results of operations.

        Doing business on a worldwide basis requires us and our subsidiaries to comply with the laws and regulations of the U.S. government and various international jurisdictions, and our failure to successfully comply with these rules and regulations may expose us to liabilities. These laws and regulations apply to companies, individual directors, officers, employees and agents, and may restrict our operations, trade practices, investment decisions and partnering activities. In particular, our international operations are subject to U.S. and foreign anti-corruption laws and regulations, such as the U.S. Foreign Corrupt Practices Act, or FCPA. The FCPA prohibits us from providing anything of value to foreign officials for the purposes of influencing official decisions or obtaining or retaining business or otherwise obtaining favorable treatment, and requires companies to maintain adequate record-keeping and internal accounting practices to accurately reflect the transactions of the company. As part of our business, we deal with state-owned business enterprises, the employees and representatives of which may be considered foreign officials for purposes of the FCPA. In addition, some of the international locations in which we operate lack a developed legal system and have elevated levels of corruption. As a result of the above activities, we are exposed to the risk of violating anti-corruption laws.

        We are also subject to International Traffic in Arms Regulation, or ITAR. ITAR requires export licenses from the U.S. Department of State for products shipped outside the U.S. that have military or strategic applications. Violations of these legal requirements are punishable by criminal fines and imprisonment, civil penalties, disgorgement of profits, injunctions, debarment from government contracts as well as other remedial measures. We have established policies and procedures designed to assist us and our personnel to comply with applicable U.S. and international laws and regulations. However, there can be no assurance that our policies and procedures will effectively prevent us from violating these regulations in every transaction in which we may engage, and such a violation could adversely affect our reputation, business, financial condition and results of operations.

If any of our customers were to become insolvent or experience substantial financial difficulties, our business, financial condition and results of operations may be adversely affected.

        If any of the customers with whom we do business becomes insolvent or experiences substantial financial difficulties we may be unable to timely collect amounts owed to us by such customers and may not be able to sell the inventory we have purchased for such customers, which could have a material adverse effect on our business, financial condition and results of operations. For example, during the year ended September 30, 2009, we wrote off a receivable of $2.4 million and inventory of approximately $1.8 million after one of our customers filed for bankruptcy protection. The majority of these write-offs were recorded as a reduction to receivable and inventory reserves taken during prior fiscal years.

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We, our suppliers or our customers may experience damage to or disruptions at our or their facilities caused by natural disasters and other factors, which may result in our business, financial condition and results of operations being adversely affected.

        Several of our facilities or those of our suppliers and customers could be subject to a catastrophic loss caused by earthquakes, tornadoes, floods, hurricanes, fire, power loss, telecommunication and information systems failure or other similar events. Should insurance be insufficient to recover all such losses or should we be unable to reestablish our operations, or if our customers or suppliers were to experience material disruptions in their operations as a result of such events, our business, financial condition and results of operations could be adversely affected.

We are dependent on access to and the performance of third-party package delivery companies.

        Our ability to provide efficient distribution of the products we sell to our customers is an integral component of our overall business strategy. We do not maintain our own delivery networks, and instead rely on third-party package delivery companies. We cannot assure you that we will always be able to ensure access to preferred delivery companies or that these companies will continue to meet our needs or provide reasonable pricing terms. In addition, if the package delivery companies on which we rely experience delays resulting from inclement weather or other disruptions, we may be unable to maintain products in inventory and deliver products to our customers on a timely basis, which may adversely affect our business, financial condition and results of operations.

A significant labor dispute involving us or one or more of our customers or suppliers, or a labor dispute that otherwise affects our operations, could reduce our net sales and harm our profitability.

        Labor disputes involving us or one or more of our customers or suppliers could affect our operations. For example, a labor dispute affecting Boeing has contributed to delays in the Boeing 787 program and impacted the production of other aircraft platforms. If our customers or suppliers are unable to negotiate new labor agreements and our customers' or suppliers' plants experience slowdowns or closures as a result, our net sales and profitability could be negatively impacted.

        While our employees are not currently unionized, they may attempt to form unions in the future, and the employees of our customers, suppliers and other service providers may be, or may in the future be, unionized. We cannot assure you that there will not be any strike, lock out or material labor dispute with respect to our business or those of our customers or suppliers in the future that materially affects our business, financial condition and results of operations.

We may be materially adversely affected by high fuel prices.

        Fluctuations in the global supply of crude oil and the possibility of changes in government policies on the production, transportation and marketing of jet fuel make it impossible to predict the future availability and price of jet fuel. In the event there is an outbreak or escalation of hostilities or other conflicts or significant disruptions in oil production or delivery in oil-producing areas or elsewhere, there could be reductions in the production or importation of crude oil and significant increases in the cost of jet fuel. If there were major reductions in the availability of jet fuel or significant increases in its cost, commercial airlines would face increased operating costs. Due to the competitive nature of the airline industry, airlines are often unable to pass on increases in fuel prices to customers by increasing fares. As a result, an increase in jet fuel could result in a decrease in net income from either lower margins or, if airlines increase ticket fares, less net sales from reduced airline travel. Decreases in airline profitability could decrease the demand for new commercial aircraft, resulting in delays of or reductions in deliveries of commercial aircraft that utilize the products we sell, and, as a result, our business, financial condition and results of operations could be materially adversely affected.

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Our financial results may fluctuate from period-to-period, making quarter-to-quarter comparisons of our business, financial condition and results of operations less reliable indicators of our future performance.

        There are many factors, such as the cyclical nature of the aerospace industry, fluctuations in our ad hoc sales, delays in major aircraft programs, downward pressure on sales prices and changes in the volume of our customers' orders, that could cause our financial results to fluctuate from period-to-period. For example, during the year ended September 30, 2010, approximately 37% of our net sales were derived from ad hoc sales. The prices we charge for ad hoc sales are typically higher than the prices under our JIT contracts or LTAs. However, ad hoc customers may not continue to purchase the same amount of products from us as they have in the past, so we cannot assure you that in any given year we will be able to generate similar net sales from our ad hoc customers as we did in the past. We are also actively working to transition customers from ad hoc purchases to multi-year LTAs or comprehensive JIT supply chain management agreements, which may also result in a reduction in ad hoc purchases. A significant diminution in our ad hoc sales in any given period could result in fluctuations in our financial results and operating margins. As a result of these factors, we believe that quarter-to-quarter comparisons of our financial results are not necessarily meaningful and that these comparisons cannot be relied upon as indicators of future performance.

Upon completion of this offering, we will continue to be controlled by Carlyle and its affiliates, whose interests in our business may be different than yours.

        The interests of Carlyle and its affiliates could conflict with yours. Upon completion of this offering, certain funds affiliated with Carlyle will own approximately 62.5% of our common stock, or approximately 59.3% if the underwriters' overallotment option is exercised in full. As a result of this ownership, Carlyle will continue to have substantial influence over the outcome of votes on all matters requiring approval by our stockholders, including the election of directors, the adoption of amendments to our certificate of incorporation and bylaws and approval of significant corporate transactions. Carlyle will also be able to take actions that have the effect of delaying or preventing a change in control of the Company or discouraging others from making tender offers for our shares, which could prevent stockholders from receiving a premium for their shares. These actions may be taken even if other stockholders oppose them. Moreover, this concentration of stock ownership may make it difficult for stockholders to replace management and may also adversely affect the trading price for our common stock because investors often perceive disadvantages in owning stock in companies with controlling stockholders. In addition, pursuant to the Amended and Restated Stockholders Agreement, Carlyle will continue to have certain rights to appoint directors to our board of directors following the consummation of this offering, and Randy Snyder, Susan Snyder, certain affiliates of Mr. Snyder and certain of our employees, which we collectively refer to as the Wesco Stockholders, are required to vote their shares in favor of such directors. See "Certain Relationships and Related Party Transactions." In addition, Carlyle and its affiliates may also in the future own businesses that directly compete with ours.

We are a "controlled company" within the meaning of the rules of the New York Stock Exchange and, as a result, expect to qualify for, and intend to rely on, exemptions from certain corporate governance requirements. You will not have the same protections afforded to stockholders of companies that are subject to such requirements.

        Following the consummation of this offering, we expect that Carlyle will continue to control a majority of the voting power of our outstanding common stock. As a result, we expect to be a "controlled company" within the meaning of the corporate governance standards of the New York Stock Exchange. Under these rules, a company of which more than 50% of the voting power is held by an individual, group or another company is a "controlled company" and may elect not to comply with certain corporate governance requirements, including:

    the requirement that a majority of the board of directors consist of independent directors;

    the requirement that we have a nominating and corporate governance committee that is composed entirely of independent directors with a written charter addressing the committee's purpose and responsibilities;

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    the requirement that we have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee's purpose and responsibilities; and

    the requirement for an annual performance evaluation of the nominating and corporate governance and compensation committees.

        Following this offering, we intend to utilize these exemptions if we continue to qualify as a "controlled company." For these purposes, as a result of the provisions of the Amended and Restated Stockholders Agreement, the Wesco Stockholders and the affiliates of Carlyle that own shares will be treated as a "group," and therefore the Wesco Stockholders' shares will be included in determining whether we are a controlled company. If we utilize these exemptions we will not have a majority of independent directors and our nominating and corporate governance and compensation committees will not consist entirely of independent directors and such committees will not be subject to annual performance evaluations. Accordingly, you will not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of the New York Stock Exchange.

We will incur significant increased costs as a result of operating as a publicly traded company, and our management will be required to devote substantial time to new compliance requirements and investor needs.

        As a publicly traded company, we will incur significant legal, accounting and other expenses that we did not previously incur. Although we are currently unable to estimate these costs with any degree of certainty, they are likely to be material in amount. In addition, the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, and the rules of the Securities and Exchange Commission, or the SEC, and the New York Stock Exchange have imposed various requirements on public companies. Our management and other personnel will need to devote a substantial amount of time to these compliance initiatives. Moreover, these rules and regulations will increase our legal and financial compliance costs and will make some activities more time-consuming and costly. For example, we expect these rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance, and we may be required to incur substantial costs to maintain appropriate levels of coverage.

If we fail to maintain proper and effective internal controls, our ability to produce accurate and timely financial statements could be impaired and investors' views of us could be harmed.

        The Sarbanes-Oxley Act requires, among other things, that we maintain effective internal control over financial reporting and disclosure controls and procedures. In particular, we must perform system and process evaluation and testing of our internal control over financial reporting to allow management and, to the extent required, our independent registered public accounting firm to report on the effectiveness of our internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act, with auditor attestation of the effectiveness of our internal controls, beginning with our annual report on Form 10-K for the fiscal year ending September 30, 2012. If we are not able to comply with the requirements of Section 404 in a timely manner, or if we or our independent registered public accounting firm identify deficiencies in our internal control over financial reporting that are deemed to be material weaknesses, the market price of shares of our common stock could decline and we could be subject to sanctions or investigations by the New York Stock Exchange, the SEC or other regulatory authorities, which would require additional financial and management resources.

        Our ability to successfully implement our business plan and comply with Section 404 requires us to be able to prepare timely and accurate financial statements. Any delay in the implementation of, or disruption in the transition to, new or enhanced systems, procedures or controls, may cause our operations to suffer and we may be unable to conclude that our internal control over financial

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reporting is effective and to obtain an unqualified report on internal controls from our auditors if required under Section 404 of the Sarbanes-Oxley Act. Moreover, we cannot be certain that these measures would ensure that we implement and maintain adequate controls over our financial processes and reporting in the future. Even if we were to conclude, and our auditors were to concur, that our internal control over financial reporting provided reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the U.S., or GAAP, because of its inherent limitations, internal control over financial reporting may not prevent or detect fraud or misstatements. This, in turn, could have an adverse impact on the trading price of our shares of common stock, and could adversely affect our ability to access the capital markets.

We are subject to health, safety and environmental laws and regulations, any violation of which could subject us to significant liabilities and penalties.

        We are subject to extensive and changing federal, state, local and foreign laws and regulations establishing health, safety and environmental quality standards and may be subject to liability or penalties for violations of those standards. We are also subject to laws and regulations governing remediation of contamination at facilities currently or formerly owned or operated by us or to which we have sent hazardous substances or wastes for treatment, recycling or disposal. We may be subject to future liabilities or obligations as a result of new or more stringent interpretations of existing laws and regulations. In addition, we may have liabilities or obligations in the future if we discover any environmental contamination or liability at any of our facilities, or at facilities we may acquire.

Our reputation and/or our business, financial condition and results of operations could be adversely affected if one of the products we sell causes an aircraft to crash.

        We may be exposed to liabilities for personal injury, death or property damage as a result of the failure of a product we have sold. We typically agree to indemnify our customers against certain liabilities resulting from the products we sell. Although we may seek third party indemnification from our suppliers in the event of a product failure, we cannot guarantee that we will be successful in doing so and may ultimately be held liable. While we maintain liability insurance to protect us in these situations, our insurers may attempt to deny coverage or any coverage we have may not be adequate. We also may not be able to maintain insurance coverage in the future at an acceptable cost. Any liability for which third party indemnification is not available that is not covered by insurance could have a material adverse effect on our business, financial condition and results of operations.

        In addition, a crash caused by one of the products we have sold could damage our reputation for selling quality products. We believe our customers consider safety and reliability as key criteria in selecting a provider of aircraft products and believe our reputation for quality assurance is a significant competitive strength. If a crash were to be caused by one of the products we sold, or if we were to otherwise fail to maintain a satisfactory record of safety and reliability, our ability to retain and attract customers may be materially adversely affected.

We sell products to a highly regulated industry and our business may be adversely affected if our suppliers or customers lose government approvals, if more stringent government regulations are enacted or if industry oversight is increased.

        The aerospace industry is highly regulated in the United States and in other countries. The U.S. Federal Aviation Administration, or the FAA, prescribes standards and other requirements for aircraft components in the U.S. and comparable agencies, such as the European Aviation Safety Agency, the Civil Aviation Administration of China and the Japanese Civil Aviation Bureau, regulate these matters in other countries. Our suppliers and customers must generally be certified by the FAA, the DoD and similar agencies in foreign countries. If any of our suppliers' government certifications are

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revoked, we would be less likely to buy such supplier's products, and, as a result, would need to locate a suitable alternate supply of such products, which we may be unable to accomplish on commercially reasonable terms or at all. If any of our customers' government certifications are revoked, their demand for the products we sell would decline. In each case, our business, financial condition and results of operations may be adversely affected.

        In addition, if new and more stringent government regulations are adopted or if industry oversight increases, our suppliers and customers may incur significant expenses to comply with such new regulations or heightened industry oversight. In the case of our suppliers, these expenses may be passed on to us in the form of price increases, which we may be unable to pass along to our customers. In the case of our customers, these expenses may limit their ability to purchase products from us. In each case, our business, financial condition and results of operations may be adversely affected.

We may be unable to successfully consummate or integrate future acquisitions, which could negatively impact our business, financial condition and results of operations.

        We may consider future acquisitions, some of which could be material to us. Depending upon the acquisition opportunities available, we may need to raise additional funds through the capital markets or arrange for additional debt financing in order to consummate such acquisitions. We may be unable to raise the capital required for future acquisitions on satisfactory terms or at all, which could adversely affect our business, financial condition and results of operations. In addition, we may not be able to successfully integrate acquired businesses into our operations and may be unable to realize any anticipated benefits from future acquisitions, which failure to do so could negatively impact our business, financial condition and results of operations.

Our total assets include substantial intangible assets, and the write-off of a significant portion of our intangible assets would negatively affect our financial results.

        Our total assets reflect substantial intangible assets. At September 30, 2010, goodwill and intangible assets, net represented approximately 47% of our total assets. Goodwill represents the excess of the purchase price of acquired businesses over the fair value of the assets acquired and liabilities assumed resulting from acquisitions, including the Carlyle Acquisition. Intangible assets, net represents tradenames, customer backlogs, non-compete agreements and customer relationships. On at least an annual basis, we assess whether there has been an impairment in the value of goodwill and indefinite lived intangible assets. If our testing identifies an impairment under generally accepted accounting principles in the United States, the impairment charge we calculate would result in a charge to operating earnings. Any determination requiring the write-off of a significant portion of goodwill and unamortized identified intangible assets would negatively affect our results of operations and total capitalization, which could be material.

Our substantial indebtedness could adversely affect our financial health and could harm our ability to react to changes to our business.

        We have a significant amount of indebtedness. As of March 31, 2011, our total long-term indebtedness outstanding under our old senior secured credit facilities was approximately $606.2 million, which was approximately 50.6% of our total capitalization.

        In addition, we may be able to incur substantial additional indebtedness in the future. Although the new senior secured credit facilities contain restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number of significant qualifications and exceptions, and the indebtedness incurred in compliance with these qualifications and exceptions could be substantial. If we incur additional debt, the risks associated with our substantial leverage would increase.

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        Our substantial indebtedness could have important consequences to investors. For example, it could:

    increase our vulnerability to general economic downturns and industry conditions;

    require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of our cash flow to fund working capital, capital expenditures and other general corporate requirements;

    limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;

    place us at a competitive disadvantage compared to competitors that have less debt; and

    limit, along with the financial and other restrictive covenants contained in the documents governing our indebtedness, among other things, our ability to borrow additional funds, make investments and incur liens.

        In addition, all of our debt under the new senior secured credit facilities bears interest at floating rates. Accordingly, in the event that interest rates increase, our debt service expense will also increase.

        Our substantial level of indebtedness increases the possibility that we may be unable to generate cash sufficient to pay, when due, the principal of, interest on or other amounts due in respect of our indebtedness. We cannot assure you that our business will generate sufficient cash flow from operations or that future borrowings will be available to us under the new senior secured credit facilities or otherwise in amounts sufficient to enable us to service our indebtedness. If we cannot service our debt, we will have to take actions such as reducing or delaying capital investments, selling assets, restructuring or refinancing our debt or seeking additional equity capital and cannot assure you that we will be successful in implementing any such actions or that any actions we take will allow us to stay in compliance with the terms of our indebtedness.

The terms of the new senior secured credit facilities and other debt instruments may restrict our current and future operations, particularly our ability to respond to changes or to take certain actions.

        The new senior secured credit facilities contain a number of restrictive covenants that impose significant operating and financial restrictions on us and may limit our ability to engage in acts that may be in our long-term best interests. The new senior secured credit facilities include covenants restricting, among other things, our ability to:

    incur or guarantee additional indebtedness or issue preferred stock;

    pay distributions on, redeem or repurchase our capital stock or redeem or repurchase our subordinated debt;

    make investments;

    sell assets;

    enter into agreements that restrict distributions or other payments from our restricted subsidiaries to us;

    incur or allow to exist liens;

    consolidate, merge or transfer all or substantially all of our assets;

    engage in transactions with affiliates;

    enter into sale leaseback transactions;

    change fiscal periods;

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    enter into agreements that restrict the granting of liens or the making of subsidiary distributions;

    create unrestricted subsidiaries; and

    engage in certain business activities.

        In addition, the new senior secured credit facilities contain financial maintenance covenants, including a maximum leverage ratio covenant and a minimum interest coverage ratio covenant. A breach of any of these covenants could result in a default under the new senior secured credit facilities. If any such default occurs, the lenders under the new senior secured credit facilities may elect to declare all outstanding borrowings, together with accrued interest and other amounts payable thereunder, to be immediately due and payable. The lenders under the new first lien credit facility also have the right in these circumstances to terminate any commitments they have to provide further borrowings. In addition, following an event of default under the new senior secured credit facilities, the lenders under those facilities will have the right to proceed against the collateral granted to them to secure the debt, which includes our available cash. If the debt under the new senior secured credit facilities was to be accelerated, we cannot assure you that our assets would be sufficient to repay in full our debt.

Risks Related to our Common Stock

There is no existing market for our common stock, and we do not know if one will develop to provide you with adequate liquidity to sell our common stock at prices equal to or greater than the price you paid in this offering.

        Prior to this offering, there has not been a public market for our common stock. We cannot predict the extent to which investor interest in our company will lead to the development of an active trading market on the New York Stock Exchange or otherwise or how liquid that market might become. If an active trading market does not develop, you may have difficulty selling any of our common stock that you buy. The initial public offering price for the common stock will be determined by negotiations between us and the representatives of the underwriters and may not be indicative of prices that will prevail in the open market following this offering. Consequently, you may not be able to sell our common stock at prices equal to or greater than the price you paid in this offering, or at all.

The price of our common stock may fluctuate significantly, and you could lose all or part of your investment.

        Volatility in the market price of our common stock may prevent you from being able to sell your common stock at or above the price you paid for your common stock. The market price of our common stock could fluctuate significantly for various reasons, including:

    our operating and financial performance and prospects;

    our quarterly or annual earnings or those of other companies in our industry;

    the public's reaction to our press releases, our other public announcements and our filings with the SEC;

    changes in, or failure to meet, earnings estimates or recommendations by research analysts who track our common stock or the stock of other companies in our industry;

    the failure of analysts to cover our common stock;

    strategic actions by us or our competitors, such as acquisitions or restructurings;

    new laws or regulations or new interpretations of existing laws or regulations applicable to our business;

    changes in accounting standards, policies, guidance, interpretations or principles;

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    the impact on our profitability temporarily caused by the time lag between when we experience cost increases until these increases flow through cost of sales because of our method of accounting for inventory;

    material litigations or government investigations;

    changes in general conditions in the United States and global economies or financial markets, including those resulting from war, incidents of terrorism or responses to such events;

    changes in key personnel;

    sales of common stock by us or members of our management team;

    the termination of lock-up agreements with our directors, officers and stockholders;

    the granting or exercise of employee stock options;

    the volume of trading in our common stock; and

    the realization of any risks described under "Risk Factors."

        In addition, in the past two and a half years, the U.S. stock market has experienced significant price and volume fluctuations. This volatility has had a significant impact on the market price of securities issued by many companies, including companies in our industry. The changes frequently appear to occur without regard to the operating performance of the affected companies. Hence, the price of our common stock could fluctuate based upon factors that have little or nothing to do with our company, and these fluctuations could materially reduce our share price and cause you to lose all or part of your investment. Further, in the past, market fluctuations and price declines in a company's stock have led to securities class action litigations. If such a suit were to arise, it could have a substantial cost and divert our resources regardless of the outcome.

If securities analysts do not publish research or reports about our business or if they downgrade our stock, the price of our stock could decline.

        The research and reports that industry or financial analysts publish about us or our business may vary widely and may not predict accurate results, but will likely have an effect on the trading price of our common stock. If an industry analyst decides not to cover our company, or if an industry analyst decides to cease covering our company at some point in the future, we could lose visibility in the market, which in turn could cause our stock price to decline. We may be subject to greater risk of losing analyst coverage as a result of the size of this offering and the relative number of shares that will be available for trading in the public market. If an industry analyst downgrades our stock, our stock price would likely decline rapidly in response.

We have no plans to pay regular dividends on our common stock, so you may not receive funds without selling your common stock.

        We have no plans to pay regular dividends on our common stock. We generally intend to invest our future earnings, if any, to fund our growth. Any payment of future dividends will be at the discretion of our board of directors and will depend on, among other things, our earnings, financial condition, capital requirements, level of indebtedness, statutory and contractual restrictions applying to the payment of dividends and other considerations that our board of directors deems relevant. The new senior secured credit facilities also effectively limit our ability to pay dividends. Accordingly, you may have to sell some or all of your common stock in order to generate cash flow from your investment. You may not receive a gain on your investment when you sell your common stock and you may lose the entire amount of the investment.

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Provisions of our amended and restated certificate of incorporation and amended and restated bylaws and Delaware law might discourage, delay or prevent a change of control of our company or changes in our management and, as a result, depress the trading price of our common stock.

        Following this offering, we expect that our amended and restated certificate of incorporation and amended and restated bylaws will contain provisions that could discourage, delay or prevent a change in control of our company or changes in our management that the stockholders of our company may deem advantageous. These provisions will:

    establish a classified board of directors, with three classes of directors;

    authorize the issuance of blank check preferred stock that our board of directors could issue to increase the number of outstanding shares and to discourage a takeover attempt;

    limit the ability of stockholders to remove directors if a "group," as defined under Section 13(d)(3) of the Exchange Act, ceases to own more than 50% of our common stock;

    prohibit our stockholders from calling a special meeting of stockholders;

    prohibit stockholder action by written consent, which requires all stockholder actions to be taken at a meeting of our stockholders, if a "group" ceases to own more than 50% of our common stock;

    provide that our board of directors is expressly authorized to adopt, or to alter or repeal our bylaws; and

    establish advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted upon by stockholders at stockholder meetings.

        These anti-takeover defenses could discourage, delay or prevent a transaction involving a change in control of our company. These provisions could also discourage proxy contests and make it more difficult for you and other stockholders to elect directors of your choosing and cause us to take corporate actions other than those you desire.

Future sales of our common stock in the public market could lower our share price, and any additional capital raised by us through the sale of equity or convertible debt securities may dilute your ownership in us and may adversely affect the market price of our common stock.

        We and our existing stockholders may sell additional shares of common stock in subsequent public offerings. We may also issue additional shares of common stock or convertible debt securities to finance future acquisitions. After the consummation of this offering, we will have 950,000,000 shares of common stock authorized and 85,569,794 shares of common stock outstanding. This number includes 21,000,000 shares that the selling stockholders are selling in this offering, which may be resold immediately in the public market. All of our remaining outstanding shares are restricted from immediate resale under the lock-up agreements between us, all of our directors, executive officers and stockholders and the underwriters described in "Underwriting," but may be sold into the market in the near future. These shares will become available for sale following the expiration of the lock-up agreements, which, without the prior consent of the representatives of the underwriters, is 180 days after the date of this prospectus, subject to compliance with the applicable requirements under Rule 144 of the Securities Act of 1933, or the Securities Act.

        We cannot predict the size of future issuances of our common stock or the effect, if any, that future issuances and sales of our common stock will have on the market price of our common stock. Sales of substantial amounts of our common stock (including sales pursuant to Carlyle's registration rights and shares issued in connection with an acquisition), or the perception that such sales could occur, may adversely affect prevailing market prices for our common stock. See "Certain Relationships and Related Party Transactions" and "Shares Eligible for Future Sale."

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FORWARD-LOOKING STATEMENTS

        This prospectus contains forward-looking statements. The words "believe," "expect," "anticipate," "intend," "estimate" and other expressions that are predictions of or indicate future events and trends and that do not relate to historical matters identify forward-looking statements. You should not place undue reliance on these forward-looking statements. Although forward-looking statements reflect management's good faith beliefs, reliance should not be placed on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements to differ materially from anticipated future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements speak only as of the date the statements are made. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise. These forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to:

    general economic and industry conditions;

    changes in military spending;

    risks unique to suppliers of equipment and services to the U.S. government;

    risks associated with our 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 we rely;

    our ability to effectively manage our inventory;

    our suppliers' ability to provide us with the products we sell in a timely manner, in adequate quantities and/or at a reasonable cost;

    our ability to maintain an effective IT system;

    our ability to retain key personnel;

    risks associated with our international operations;

    fluctuations in our financial results from period-to-period;

    Carlyle's ability to control the majority of the voting power of our outstanding common stock;

    our ability to effectively compete in our industry;

    risks related to our indebtedness; and

    other risks and uncertainties, including those listed under the caption "Risk Factors."

        We derive many of our forward-looking statements from our operating budgets and forecasts, which are based upon many detailed assumptions. While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and it is impossible for us to anticipate all factors that could affect our actual results. Important factors that could cause actual results to differ materially from our expectations are disclosed under "Risk Factors" in this prospectus. All written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by the cautionary statements as well as other cautionary statements that are made from time to time in our public communications. You should evaluate all forward-looking statements made in this prospectus in the context of these risks and uncertainties.

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USE OF PROCEEDS

        All of the shares of common stock offered by this prospectus are being sold by the selling stockholders. The selling stockholders in this offering include affiliates of Carlyle and Randy J. Snyder, our Chief Executive Officer. We will not receive any of the proceeds from the sale of shares in this offering, including from any exercise by the underwriters of their overallotment option. For information about the selling stockholders, see "Principal and Selling Stockholders."

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DIVIDEND POLICY

        We have not paid dividends in the past and we do not intend to pay any cash dividends for the foreseeable future. We intend to retain earnings, if any, for the future operation and expansion of our business and the repayment of debt. Any determination to pay dividends in the future will be at the discretion of our board of directors and will depend upon our results of operations, cash requirements, financial condition, contractual restrictions, restrictions imposed by applicable laws and other factors that our board of directors may deem relevant. Our existing indebtedness effectively limits our ability to pay dividends and make distributions to our stockholders. For additional information on these limitations see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Senior Secured Credit Facilities—New Senior Secured Credit Facilities."

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CAPITALIZATION

        The following table sets forth our consolidated cash and cash equivalents and capitalization as of March 31, 2011 on an actual basis and as adjusted basis giving effect to the following: (i) the adoption of our amended and restated certificate of incorporation, which will be deemed effective immediately prior to the effectiveness of this registration statement and will provide for authorized capital stock consisting of (1) 950,000,000 shares of common stock, $0.001 par value per share, and (2) 50,000,000 shares of preferred stock, $0.001 par value per share, (ii) the conversion of shares of Class B common stock into shares of common stock, on a one-for-one basis, pursuant to our amended and restated certificate of incorporation, which will occur immediately prior to the effectiveness of this registration statement, (iii) the effectuation of a nine-for-one stock split with respect to our common stock, which will include the shares of Class B common stock that will have been converted, on a one-for-one basis, into shares of common stock, (iv) the sale by the selling stockholders of the shares of our common stock included in this offering at an initial public offering price of $16.50 per share, the midpoint of the estimated offering price range set forth on the cover page of this prospectus, (v) the exercise of stock options to purchase 553,951 shares of common stock that will be sold by the selling stockholders in this offering, (vi) our receipt of proceeds of approximately $2.5 million from the exercise of stock options and a reduction of our income tax payable of $2.2 million related to the tax benefits associated with such exercise and (vii) the payment of estimated offering expenses of approximately $4.5 million by us in connection with this offering.

        The information in this table should be read in conjunction with "Selected Consolidated Financial Data," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our financial statements and related notes thereto included elsewhere in this prospectus.

 
  March 31, 2011  
 
  Actual   As Adjusted  
 
  (unaudited; in thousands,
except share and per share data)

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

  $ 45,670   $ 43,699  
           

Long-term debt, less current portion:

             
 

First lien credit facility(1)

  $ 477,243   $ 477,243  
 

Second lien credit facility(1)

    129,000     129,000  
           
   

Total long-term debt, less current portion

    606,243     606,243  

Capital lease obligations, less current portion

    1,725     1,725  

Total stockholders' equity:

             
 

Preferred stock, $0.001 par value per share: 50,000,000 shares authorized, no shares issued and outstanding, actual; 50,000,000 shares authorized, no shares issued and outstanding, as adjusted

   
    
   
    
 
 

Common stock, $0.001 par value per share: 950,000,000 shares authorized; 83,875,053 shares issued and outstanding, actual; 950,000,000 shares authorized, 85,569,794 shares issued and outstanding, as adjusted

    84     86  
 

Class B common stock, $0.001 par value per share: 2,000,000 shares authorized; 1,134,346 shares issued and outstanding, actual; no shares authorized, no shares issued and outstanding, as adjusted

    1      
 

Additional paid-in capital

    330,091     334,806  
 

Retained earnings:

             
   

Beginning of period

    223,761     223,761  
   

Current period earnings

    43,608     39,108  
   

Accumulated other comprehensive loss

    (6,955 )   (6,955 )
           
   

Total stockholders' equity

    590,590     590,806  
           

Total capitalization

  $ 1,198,558   $ 1,198,774  
           

(1)
On April 7, 2011, we entered into the new senior secured credit facilities. See "Prospectus Summary—Recent Developments." The proceeds of the new senior secured credit facilities were used to repay the old senior

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    secured credit facilities and pay certain related fees and expenses. For a description of the new senior secured credit facilities and the old senior secured credit facilities, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Senior Secured Credit Facilities."

        The table set forth above is based on the number of shares of our common stock outstanding as of March 31, 2011. The actual column does not reflect:

    7,824,303 shares of common stock issuable upon the exercise of options outstanding as of March 31, 2011 at a weighted average exercise price of $4.50 per share;

    5,604,338 shares of common stock issuable pursuant to restricted stock units on the earlier of September 28, 2012 or the occurrence of a change in control, as defined in the applicable award agreement;

    12,888 shares of restricted common stock that are scheduled to vest in equal installments on June 30, 2011 and September 30, 2011; and

    5,850,000 shares of common stock reserved for issuance under the 2011 Equity Incentive Award Plan, which we have adopted in connection with this offering, which amount includes 566,685 shares of common stock issuable pursuant to awards under our 2011 Equity Incentive Award Plan that our compensation committee has approved to be granted upon the consummation of this offering.

        The as adjusted column does not reflect:

    7,270,352  shares of common stock issuable upon the exercise of options outstanding as of March 31, 2011 (after giving effect to the exercise of options in connection with the offering) at a weighted average exercise price of $4.32 per share;

    5,604,338 shares of common stock issuable pursuant to restricted stock units on the earlier of September 28, 2012 or the occurrence of a change in control, as defined in the applicable award agreement;

    6,444 shares of restricted common stock that are scheduled to vest on September 30, 2011 (but includes 6,444 shares of restricted common stock that vested on June 30, 2011); and

    5,850,000 shares of common stock reserved for issuance under the 2011 Equity Incentive Award Plan, which we have adopted in connection with this offering, which amount includes 566,685 shares of common stock issuable pursuant to awards under our 2011 Equity Incentive Award Plan that our compensation committee has approved to be granted upon the consummation of this offering.

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DILUTION

        If you invest in our common stock, your interest will be diluted to the extent of the difference between the initial public offering price per share and the net tangible book value per share after this offering.

        As of March 31, 2011, we had a negative net tangible book value of approximately $(11.0) million, or $(0.129) per share. Net tangible book value per share represents total tangible assets less total liabilities divided by the number of shares of common stock outstanding. After deducting estimated offering expenses payable by us in connection with this offering and our receipt of the proceeds from the exercise of stock options to purchase 553,951 shares of common stock that will be sold by the selling stockholders in this offering, including the related tax benefit associated with such exercise, our negative net tangible book value as of March 31, 2011 would have been approximately $(10.8) million, or $(0.126) per share. This represents an immediate increase in net tangible book value of $0.003 per share to existing stockholders and an immediate dilution of $16.626 per share to new investors purchasing common stock in this offering. The following table illustrates this dilution on a per share basis:

 
   
  Per Share  

Assumed initial public offering price per share

        $ 16.50  

Net tangible book value per share as of March 31, 2011

    (0.129 )      

Increase in net tangible book value per share attributable to the exercise of stock options and estimated offering costs

    0.003        

Net tangible book value per share after this offering

          (0.126 )
             

Dilution per share to new investors

        $ 16.626  
             

        The following table sets forth, as of March 31, 2011, the total number of shares of common stock owned by existing stockholders and to be owned by new investors, the total consideration paid and the average price per share paid by our existing stockholders and to be paid by new investors purchasing shares of common stock in this offering. The calculation below is based on an assumed initial public offering price of $16.50 per share, the midpoint of the price range set forth on the cover page of this prospectus, before deducting the underwriting discounts and commissions and estimated offering expenses payable by us.

 
  Shares Purchased   Total Consideration    
 
 
  Average
Price Per
Share
 
 
  Number   Percent   Amount   Percent  
 
  (In thousands, other than shares and percentages)
 

Existing stockholders

    64,570     75.5 % $ 267,320     43.6 % $ 4.14  

New investors

    21,000     24.5     346,500     56.4     16.50  
                         
 

Total

    85,570     100.0 % $ 613,820     100.0 % $ 7.17  
                         

        Each $1.00 increase (decrease) in the assumed initial public offering price of $16.50 per share, the midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease) total consideration paid by all investors in this offering by $19.8 million, after deducting underwriting discounts and commissions and estimated offering expenses payable by us and assuming that the number of shares offered by the selling stockholders, as set forth on the cover page of this prospectus, remains the same. Each increase (decrease) of 1.0 million in the number of shares offered by the selling stockholders would increase (decrease) total consideration paid by all investors in this offering by $15.5 million, at the assumed public offering price of $16.50 per share, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, assuming the

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assumed public offering price of $16.50 per share, which is the midpoint of the price range set forth on the cover page of this prospectus.

        If the underwriters' overallotment option to purchase 3,150,000 additional shares from the selling stockholders in this offering is exercised in full, the following will occur:

    the number of shares of our common stock held by existing stockholders after the completion of this offering will be 61,549,347, or approximately 71.8% of the total number of shares of our common stock outstanding after this offering; and

    the number of shares of our common stock held by new investors in this offering after the completion of this offering will be 24,150,000, or approximately 28.2% of the total number of shares of our common stock outstanding after this offering.

        The tables set forth above are based on the number of shares of our common stock outstanding as of March 31, 2011, and do not reflect:

    7,270,352 shares of common stock issuable upon the exercise of options outstanding as of March 31, 2011 at a weighted average exercise price of $4.32 per share, after giving effect to the purchase of 553,951 shares of common stock that will be sold by the selling stockholders in this offering;

    5,604,338 shares of common stock issuable pursuant to restricted stock units on the earlier of September 28, 2012 or the occurrence of a change in control, as defined in the applicable award agreement;

    12,888 shares of restricted common stock that are scheduled to vest in equal installments on June 30, 2011 and September 30, 2011; and

    5,850,000 shares of common stock reserved for issuance under the 2011 Equity Incentive Award Plan, which we have adopted in connection with this offering, which amount includes 566,685 shares of common stock issuable pursuant to awards under our 2011 Equity Incentive Award Plan that our compensation committee has approved to be granted upon the consummation of this offering.

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SELECTED CONSOLIDATED FINANCIAL DATA

        The selected income statement and other data for each of the years ended September 30, 2008, 2009 and 2010 and the selected balance sheet data as of September 30, 2009 and 2010 have been derived from our audited consolidated financial statements that are included in this prospectus. The selected income statement and other data for the years ended September 30, 2006 and 2007 and the selected balance sheet data as of September 30, 2006, 2007 and 2008 have been derived from audited consolidated financial statements that are not included in this prospectus. The table below presents separately the period prior to the Carlyle Acquisition, or the Predecessor, on September 29, 2006 and the periods after the Carlyle Acquisition, or the Successor, to recognize the application of a different basis of accounting. Our selected historical income statement data for the six months ended March 31, 2010 and March 31, 2011 and our selected historical balance sheet data as of March 31, 2011 have been derived from our unaudited financial statements included elsewhere in this prospectus that, in the opinion of management, include normal recurring adjustments necessary for a fair presentation of the results for the unaudited interim period. The selected historical balance sheet data as of March 31, 2010 have been derived from our unaudited financial statements not included in this prospectus. Results for the six months ended March 31, 2011 are not necessarily indicative of the results that may be expected for the year ending September 30, 2011 or for any other period.

        The financial data set forth below are not necessarily indicative of future results of operations. This data should be read in conjunction with, and is qualified in its entirety by reference to, the "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Capitalization" sections and our financial statements and notes thereto included elsewhere in this prospectus.

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  Successor  
 
  Predecessor    
   
   
   
  Six Months Ended
March 31,
 
 
  Year Ended September 30,  
 
  Year Ended
September 30,
2006(1)
 
(Dollars in thousands, except share and per share data)
  2007   2008   2009   2010   2010   2011  
 
   
   
   
   
   
  (unaudited)
 

Consolidated statements of income (loss):

                                           

Net sales:

                                           
 

North America

  $ 336,670   $ 416,899   $ 551,135   $ 557,874   $ 603,809   $ 283,285   $ 318,808  
 

Rest of the World

    68,033     89,888     112,623     102,796     95,342     47,259     57,527  
 

Intercompany elimination

    (27,071 )   (38,207 )   (59,415 )   (47,983 )   (43,115 )   (19,633 )   (26,792 )
                               
   

Net sales

    377,632     468,580     604,343     612,687     656,036     310,911     349,543  

Gross profit:

                                           
 

North America

    144,015     171,006     221,898     204,296     226,497     103,788     117,725  
 

Rest of the World

    22,412     36,698     42,143     39,733     34,167     17,265     19,523  
 

Intercompany elimination

    (2,746 )   (5,078 )   (7,433 )   (5,742 )   (6,434 )   (3,214 )   (3,123 )
                               
   

Gross profit

    163,681     202,626     256,608     238,287     254,230     117,839     134,125  

Selling, general and administrative expenses:

                                           
 

North America

    158,494     71,998     84,807     86,007     81,674     40,140     39,593  
 

Rest of the World

    16,599     18,320     20,951     17,888     18,241     9,185     10,288  
                               
   

Selling, general and administrative expenses

    175,093 (2)   90,318     105,758     103,895     99,915     49,325     49,881  
                               

Income (loss) from operations

    (11,412 )   112,308     150,850     134,392     154,315     68,514     84,244  

Interest income (expense), net

    1,018     (55,817 )   (48,743 )   (37,707 )   (36,270 )   (18,214 )   (12,586 )

Other income (expense), net

    (11,318 )   (2,857 )   746     (376 )   (458 )   1,056     (177 )
                               

Income (loss) before provision for income taxes

    (21,712 )   53,634     102,853     96,309     117,587     51,356     71,481  
                               

Provision for income taxes

    872     20,596     44,251     37,862     43,913     19,171     27,873  
                               
   

Net income (loss)

  $ (22,584 ) $ 33,038   $ 58,602   $ 58,447   $ 73,674   $ 32,185   $ 43,608  
                               

Earnings per share data:

                                           

Net income per share:

                                           
   

Basic

        $ 0.39   $ 0.69   $ 0.69   $ 0.81   $ 0.36   $ 0.48  
   

Diluted

        $ 0.39   $ 0.67   $ 0.65   $ 0.81   $ 0.36   $ 0.47  

Weighted average shares outstanding:

                                           
   

Basic

          84,459,456     84,783,897     84,965,364     90,569,133     90,569,133     90,591,102  
   

Diluted

          85,389,390     87,661,422     89,682,732     91,067,832     90,571,257     92,636,208  

 
  Successor  
 
  Year Ended September 30,   Six Months Ended
March 31,
 
 
  2006(3)   2007   2008   2009   2010   2010   2011  
 
   
   
   
   
   
  (unaudited)
 

Consolidated balance sheet data:

                                           
 

Cash and cash equivalents

  $ 80,022   $ 12,863   $ 15,998   $ 11,406   $ 39,463   $ 24,056   $ 45,670  
 

Total assets

    1,017,416     987,228     1,173,620     1,254,812     1,279,012     1,266,090     1,300,286  
 

Total long-term debt and capital lease obligations(4)

    600,143     589,269     688,128     684,268     622,032     674,701     607,968  
 

Total stockholders' equity

    285,967     335,783     409,773     473,940     545,739     502,416     590,590  

(1)
The effective date of the Carlyle Acquisition was at the close of business on September 29, 2006, the last business day of the Predecessor's 2006 fiscal year. September 30, 2006 was a weekend day and, as a result, the successor did not conduct any operations on that day. Due to the immateriality of the one day period ended September 30, 2006, the successor has accounted for the commencement of its operations as of October 1, 2006.

(2)
Includes $72.6 million of compensation costs related to the Carlyle Acquisition.

(3)
The selected balance sheet data as of September 30, 2006 presents the financial position of the Successor after giving effect to the acquisition as a business combination, which resulted in a new valuation for our assets and liabilities and our subsidiaries based upon fair value as of the date of the acquisition.

(4)
Total long-term debt and capital lease obligations excludes current portion.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

        The following discussion contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those discussed in the forward looking statements as a result of various factors, including, without limitation, those set forth in "Risk Factors," "Forward-Looking Statements" and other matters included elsewhere in this prospectus. The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements and the notes thereto included elsewhere in this prospectus, as well as the information presented under "Selected Consolidated Financial Data."

Executive Overview

        We are one of the world's largest distributors and providers of comprehensive supply chain management services to the global aerospace industry on an annual sales basis. Our services range from traditional distribution to the management of supplier relationships, quality assurance, kitting, JIT delivery and point-of-use inventory management. We supply approximately 450,000 different SKUs, including hardware, bearings, tools and more recently, electronic components and machined parts. In fiscal 2010, sales of hardware represented 80% of our net sales, with highly engineered fasteners constituting 83% of that amount. We serve our customers under three types of arrangements: JIT contracts, which govern comprehensive outsourced supply chain management services; LTAs, which set prices for specific parts; and ad hoc sales. JIT contracts and LTAs, which together comprised approximately 63% of our fiscal 2010 net sales, are multi-year arrangements that provide us with significant visibility into our future sales.

        Founded in 1953 by the father of our current CEO, Wesco has grown to serve over 7,200 customers in the commercial, military and general aviation sectors, including the leading OEMs and their subcontractors, through which we support nearly all major Western aircraft programs. We have grown our net sales at a 13.4% CAGR over the past 20 years to $656.0 million in fiscal 2010. We serve a large and growing global market, and believe that with more than 1,000 employees across 28 locations in 10 countries, we are well positioned to continue our track record of strong long-term growth and profitability.

        On September 29, 2006, 100% of the outstanding stock of Wesco Aircraft Hardware Corp., Wesco Aircraft Israel and the European entities of Flintbrook Ltd., Wesco Aircraft France and Wesco Aircraft Germany were acquired by Wesco Aircraft Holdings, Inc., which we refer to as the Carlyle Acquisition. The acquisition was completed in a leveraged transaction in which affiliates of Carlyle, the prior owner and certain employees of Wesco contributed the equity portion of the purchase price. The prior owner's and certain employees' investment represented a contribution of ownership in the predecessor company to the newly formed holding company. In accordance with Accounting Standards Codification, or ASC, 805, Business Combinations, the acquired assets and liabilities have been recorded at fair value for the interests acquired by new investors and at carryover basis for the continuing investors.

        On June 30, 2008, Wesco Aircraft Hardware Corp. acquired 100% of the outstanding stock of Airtechnics Inc., or Airtechnics, a distributor of electronic components for the aerospace industry, which we refer to as the Airtechnics Acquisition. The acquisition was funded through a provision in the old senior secured credit facilities (as defined below) that provided for additional borrowing under existing credit terms. Operating cash was also used by us to pay a portion of the purchase price and cover transaction fees and expenses. The assets and liabilities have been recorded at fair value for the interests we acquired.

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Recent Developments

        On April 7, 2011, Wesco Aircraft Hardware Corp. entered into a new $765.0 million senior secured credit facility with Barclays Bank PLC, as administrative agent and collateral agent, and Merrill Lynch, Pierce, Fenner & Smith, Incorporated, Key Bank, N.A. and Barclays Capital, as joint lead arrangers, which we refer to as the new senior secured credit facilities.

        The purpose of the refinancing was to extend the maturity dates under the term loans of Wesco Aircraft Hardware Corp.'s existing senior secured credit facilities, which we refer to as the old senior secured credit facilities, increase the borrowing capacity under our revolver and pay related fees and expenses. The new senior secured credit facilities consist of a (i) $150.0 million revolving credit facility, which we refer to as the new revolving facility, (ii) $265.0 million term loan A facility, which we refer to as the new term loan A facility, and (iii) $350.0 million term loan B facility, which we refer to as the new term loan B facility. Wesco Aircraft is a guarantor of the new senior secured credit facilities.

        As a result of the refinancing, we will be recording a loss on extinguishment of debt in the amount of $7.1 million, consisting of write-offs of unamortized debt issuance costs and third party fees of $6.5 million and $0.6 million, respectively. The loss on extinguishment will be recorded as a component of interest expense, net in the consolidated statement of income during the nine months ended June 30, 2011. Additionally, $1.9 million of unamortized debt issuance costs will remain capitalized and new creditor fees associated with the April 7, 2011 refinancing in the amount of $12.5 million will be capitalized. These fees will be amortized over the term of the debt using the effective interest rate method.

Industry Trends Affecting Our Business

    Commercial Aerospace Market

        We rely on demand for new commercial aircraft for a significant portion of our sales. Commercial aircraft demand is driven by many factors, including airline passenger volumes, airline profitability, the introduction of new aircraft models, general economic conditions and the aging life cycle of current fleets.

        During 2008 and 2009, our customers were impacted by the global recession and weak demand for air passenger travel, which resulted in significant losses for the global airline industry. According to Airline Monitor, during 2010, as the global economy began to recover, RPMs, a key measure of airline passenger volumes, grew approximately 5.5%. From 1990 to 2010, RPMs grew at a CAGR of 4.7% and are expected to grow at a CAGR of approximately 5.6% from 2010 to 2030, due to the economic recovery in developed economies, continued growth in emerging markets, particularly in the Asia-Pacific region, and the secular trend towards increased air travel globally. Increased passenger traffic volumes and the return to profitability of the global airline industry have renewed demand for commercial aircraft, particularly for more fuel efficient models, such as the Boeing 787 and Airbus A350. According to Airline Monitor, annual deliveries of the Boeing 787 are projected to increase from 20 in 2011 to over 100 by 2014, and Airbus expects A350 deliveries to commence in 2013. Commercial MRO providers are expected to benefit from similar growth trends to those impacting the commercial OEM market, in particular, increased RPMs, which will in turn drive growth in the commercial fleet and greater utilization of existing aircraft.

        Growth in the commercial aerospace market is also expected to be aided by a recovery in business jet and regional jet deliveries. According to the FAA, business jet activity increased by over 11% in 2010 compared to 2009, and Honeywell projects that deliveries of business jets will increase from approximately 675 in 2010 to in excess of 1,000 in 2015. According to Airline Monitor, regional jet deliveries are expected to increase from approximately 135 in 2010 to 270 in 2015.

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    Military Aerospace Market

        A significant portion of our sales are also reliant on demand for new military aircraft, which is primarily driven by government spending, the timing of military aircraft orders and evolving DoD strategies and policies. We believe the diversity of the military aircraft programs we service can help us mitigate the impact of program delays, changes or cancellations, through increased sales to other active programs that directly benefit from such delays, changes or cancellations. For example, we believe the delay in production of the Lockheed Martin JSF has resulted in an increase in our sales to manufacturers of the F-18. Going forward, we believe that our military aerospace business will be driven by increases in the production of the JSF, a program on which we believe our business is well positioned. According to Forecast International, deliveries of the JSF are expected to increase from 20 in 2011 to 98 by 2016.

        We also support customers in the military aerospace MRO market and believe that our presence in this market helps us mitigate the volatility of new military aircraft sales with sales to the aftermarket. We expect demand in the military MRO market to be driven by requirements to maintain aging military fleets, changes in the overall fleet size and the level of U.S. military activity overseas.

Other Factors Affecting Our Financial Results

    Fluctuations in Revenue

        There are many factors, such as fluctuations in ad hoc sales, timing of aircraft deliveries, changes in selling prices and the volume or timing of customer orders, that can cause fluctuations in our financial results from quarter-to-quarter. To normalize for short-term fluctuations, we tend to look at our performance over several quarters or years of activity rather than discrete short-term periods. As such, it can be difficult to determine longer-term trends in our business based on quarterly comparisons.

        We will continue our strategy of seeking to expand our relationships with existing customers by transitioning them to our comprehensive JIT supply chain management services as well as expanding relationships with our existing JIT customers to include additional customer sites and additional SKUs. We believe this strategy serves to mitigate fluctuations in our net sales. However, we have recently been notified by Boeing of its intent to perform certain supply chain management functions in-house that we are currently providing at two Boeing facilities under JIT contracts that were awarded to us when these particular facilities were under different ownership. In fiscal 2010, sales under these contracts accounted for approximately 5.8% of our net sales. If any of our customers attempt to implement additional in-sourcing initiatives, it could have a negative effect on our strategy to mitigate fluctuations in our net sales. Additionally, although we derive a significant portion of our net sales from the building of new commercial and military aircraft, we have not typically experienced extreme fluctuations in our net sales when sales for an individual aircraft program decrease, which we believe is attributable to our diverse base of customers and programs. In addition, we believe our substantial sales under JIT contracts and LTAs help to mitigate fluctuations in our financial results, as JIT and LTA customers tend to have steadier purchasing patterns than ad hoc customers.

    Fluctuations in Margins

        We entered the electronic components business in 2008 after the Airtechnics Acquisition. As we continue to grow our electronics products group, or EPG, business, we expect that EPG sales as a percentage of our total net sales will increase. Gross profit margins on EPG products are lower than the gross profit margins on many of our other products, which we believe will result in a reduction in our overall gross profit margins as our EPG sales increase.

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        We believe that our strategy of growing our JIT and LTA sales and converting ad hoc customers into JIT and LTA customers will negatively affect our gross profit margins, as gross profit margins tend to be higher on ad hoc sales than they are in JIT and LTA-related sales. However, we believe any potential adverse impact on our gross profit margins is outweighed by the more stable long-term revenue stream attributable to JIT contracts and LTAs.

        Our JIT contracts and LTAs generally provide for fixed prices, which can expose us to risks if prices we pay to our suppliers rise due to increased raw material or other costs. However, we believe our expansive product offerings and inventories, our ad hoc sales and, where possible, our longer-term agreements with suppliers have enabled us to mitigate this risk.

    Fluctuations in Cash Flow

        We believe our cash flows may be affected by fluctuations in our inventory that can occur over time. When we are awarded new programs, we generally increase our inventory to account for expected sales related to the new program, which often take time to materialize. As a result, if certain programs for which we have procured inventory are delayed, we may experience a more sustained inventory increase. For example, we increased our inventory in anticipation of deliveries of the Boeing 787, which have been significantly delayed.

        Inventory fluctuations may also be attributable to general industry trends. For example, as production in the global aerospace industry increases, we typically see an increase in demand from our customers and a delay in deliveries from our suppliers, which tends to result in a temporary inventory reduction and increased cash flow. However, when production in the aerospace industry decreases, our suppliers are able to catch up on our outstanding orders, while demand from our customers decreases, which tends to result in an increase in inventory levels and decreased cash flow. For example, in 2009, as a result of the global economic recession, production in the aerospace industry decreased, freeing up our suppliers to ship previously ordered products to us faster than expected. As a result, we experienced an inventory build of approximately $111.1 million during fiscal 2009. Although we have made, and continue to make, adjustments to our purchasing practices in order to mitigate the effect of inventory fluctuations on our cash flows, inventory fluctuations continue to occur and, as a result, will continue to impact our cash flows.

Segment Presentation

        We conduct our business through two reportable segments: North America and Rest of the World. We evaluate segment performance based on segment operating earnings or loss. Each segment reports its results of operations and makes requests for capital expenditures and acquisition funding to our chief operating decision-maker, or CODM. Our Chief Executive Officer serves as our CODM. Each operating segment has separate management teams and infrastructures dedicated to providing a full range of products and services to their respective customers.

Key Components of Our Results of Operations

        The following is a discussion of the key line items included in our financial statements for the periods presented below under the heading "Results of Operations." These are the measures that management utilizes to assess our results of operations, anticipate future trends and evaluate risks in our business.

    Net Sales

        Our net sales include sales of C class aerospace parts, including hardware, bearings, electronic components, machined parts and installation tooling, and eliminate all intercompany sales. We also provide certain services to our customers, including quality assurance, kitting and JIT supply chain

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management. However, these services are generally performed in connection with the sale of our products, and as such, the price of such services is included in the price of the products delivered to customers. We do not account for these services as a separate element, as the services do not generally have stand-alone value and typically cannot be separated from the product element of the arrangement. There are no significant post-delivery obligations associated with these services.

        We sell products and services to our customers using three types of contractual arrangements: JIT supply chain management contracts, LTAs and individual ad hoc sales. In fiscal 2009 and 2010, we experienced a decrease in ad hoc sales due to a weakening aerospace market that resulted in customers reducing their on-hand inventory and our strategy of transitioning ad hoc sales to JIT contracts or LTAs in an effort to achieve a more predictable revenue stream. JIT contracts and LTAs typically run for three to five years. Under JIT contracts, customers commit to purchase specified parts from us at a fixed price, on an if-and-when needed basis, and we are responsible for maintaining high levels of stock availability of those parts. LTAs are essentially negotiated price lists for customers or individual customer sites that cover a range of pre-determined parts, purchased on an as-needed basis. Ad hoc customers purchase parts from us on an as-needed basis and are generally supplied out of our existing inventory. In addition, JIT and LTA customers often purchase parts that are not captured under their contract on an ad hoc basis.

        EPG was not fully integrated into our enterprise resource planning, or ERP, system until the middle of 2009. As a result, in the discussion of our results of operations, the discussion related to JIT, LTA and ad hoc sales as a percentage of net sales does not include EPG sales, other than for the comparison of the six months ended March 31, 2010 to the six months ended March 31, 2011. We expect that future discussions of our JIT, LTA and ad hoc sales will include EPG sales.

    Cost of Sales

        The principal component of our cost of sales is product cost, which averaged approximately 93.2% of our total cost of sales for the three-year period ended September 30, 2010. The remaining components are freight and expediting fees, import duties, tooling repair charges, amortization of inventory step-up, inventory excess and obsolescence write-down, packaging supplies and physical inventory adjustment charges, which collectively averaged approximately 6.8% of our total cost of sales for the three-year period ended September 30, 2010.

        Product cost is determined by the current weighted average cost of each inventory item and is a function of many factors, including fluctuations in the price of raw materials, the effect of inflation, the terms of long-term agreements we negotiate with certain of our suppliers, the timing of bulk purchases that allow us to take advantage of price breaks from suppliers and general market trends that can result in increases or decreases in our suppliers' available production capacity. Although we cannot specifically quantify trends relating to the costs of our products in inventory, during fiscal 2009 and 2010, as a result of the economic downturn and its effect on the global aerospace industry, our suppliers' collective production capacity increased, which generally resulted in a decrease in per part prices and a corresponding decrease in our product costs. We expect that conditions within the aerospace industry will continue to improve, and as a result, that per part prices will increase as our suppliers' capacity becomes more limited. However, we believe the long-term agreements we have with certain of our suppliers and our ability to make opportunistic, large-scale product purchases will allow us to mitigate the impact of future per part price increases. In addition, we believe we will be able to further mitigate the impact of any such price increases on our results of operations by passing along the price increases to customers who are not a party to contracts with pre-negotiated price lists.

        Inventory write-down is calculated to estimate the amount of excess and obsolete inventory we currently have on-hand, based on historical and forecasted sell-through rates. We review inventory for

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excess and obsolescence write-down monthly and adjust the expense and future forecasted sell-through rates as necessary.

        Cost of sales, as a percentage of net sales, trended up during fiscal 2009 and 2010, as our ad hoc sales, as a percentage of net sales, declined. This occurred as a result of our strategy to transition more ad hoc sales to LTA and JIT sales, as well as the effect of the recession. Ad hoc sales typically have higher margins than LTA and JIT sales. Also, in 2009 we had the first full year impact of EPG sales after the Airtechnics Acquisition, which sales typically have lower margins than hardware sales.

    Selling, General and Administrative Expenses

        The principal components of our selling, general and administrative expenses are salaries, wages, benefits and bonuses paid to our employees; stock-based compensation; commissions paid to outside sales representatives, or OSRs; travel and other business expenses; training and recruitment costs; marketing, advertising and promotional event costs; rent; bad debt expense; professional services fees (including legal, audit and tax); and ordinary day-to-day business expenses. Depreciation and amortization expense is also included in selling, general and administrative expenses, and consists primarily of scheduled depreciation for leasehold improvements, machinery and equipment, vehicles, computers, software and furniture and fixtures. Depreciation and amortization also includes intangible amortization expense.

        Selling, general and administrative expenses, as a percentage of net sales, have continued to decline as we have leveraged the fixed cost and labor component of our infrastructure while consolidated net sales have grown. We may experience an increase in selling, general and administrative expenses as a result of one-time costs associated with our initial public offering and ongoing costs associated with being a public company.

    Other Expenses

        Interest Expense, net.    Interest expense, net consists of the interest we pay on our short-term and long-term debt, fees on our revolver and our line-of-credit, deferred financing costs and the costs of hedging agreements, net of interest income.

        Other Income (Expense), net.    Other income (expense), net is primarily comprised of unrealized foreign exchange gain or loss associated with transactions denominated in currencies other than the respective functional currency of the reporting subsidiary.

Critical Accounting Policies and Estimates

        The methods, estimates and judgments we use in applying our most critical accounting policies have a significant impact on the results we report in our financial statements. We evaluate our estimates and judgments on an on-going basis. We base our estimates on historical experience and on assumptions that we believe to be reasonable under the circumstances. Our experience and assumptions form the basis for our judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may vary from what we anticipate, and different assumptions or estimates about the future could change our reported results. We believe the following accounting policies are the most critical in that they significantly affect our financial statements, and they require our most significant estimates and complex judgments.

    Inventories

        Our inventory is comprised solely of finished goods. Inventories are stated at the lower of weighted-average cost or market and in-bound freight-related costs are included as part of the cost of inventory held for resale. We record provisions, as appropriate, to write-down excess and obsolete

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inventory to estimated net realizable value. The process for evaluating excess and obsolete inventory often requires us to make subjective judgments and estimates concerning future sales levels, quantities and prices at which such inventories will be able to be sold in the normal course of business.

        Demand for our products can fluctuate significantly. Our estimates of future product demand may prove to be inaccurate, in which case we may have understated or overstated the write-down required for excess and obsolete inventories. In the future, if our inventories are determined to be overvalued, we would be required to recognize such costs in our cost of goods sold at the time of such determination. Likewise, if our inventories are determined to be undervalued, we may have over-reported our costs of goods sold in previous periods and would be required to recognize such additional operating income at the time such products are sold.

    Goodwill and Indefinite-Lived Intangible Assets

        Goodwill represents the excess of the aggregate purchase price over the fair value of the net assets acquired in a purchase business combination. In accordance with the provisions of ASC 350, Intangibles—Goodwill and Other, goodwill and indefinite-lived intangible assets acquired in a business combination are not amortized, but instead tested for impairment at least annually or more frequently should an event occur or circumstances indicate that the carrying amount may be impaired. Such events or circumstances may be a significant change in business climate, economic and industry trends, legal factors, negative operating performance indicators, significant competition, changes in strategy, or disposition of a reporting unit or a portion thereof. Goodwill impairment testing is performed at the reporting unit level on July 1 of each year.

        Goodwill impairment testing is a two-step test. The first step identifies potential impairment by comparing the fair value of a reporting unit with its carrying amount, including goodwill. For all periods presented, our reporting units are consistent with our operating segments. The estimates of fair value of a reporting unit are determined based on a discounted cash flow analysis and market earnings multiples. A discounted cash flow analysis requires us to make various judgmental assumptions, including assumptions about future cash flows, growth rates and discount rates. These assumptions about future cash flows and growth rates are based on the forecast and long-term business plans of each operating segment. Discount rate assumptions are based on an assessment of the risk inherent in the future cash flows of the respective reporting units. If the fair value exceeds its carrying amount, goodwill is not considered impaired and the second step of the test is unnecessary. If the carrying amount of a reporting unit's goodwill exceeds its fair value, the second step measures the impairment loss, if any. The second step compares the implied fair value of goodwill with the carrying amount of that goodwill. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination. If the carrying amount of goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess.

        Application of the goodwill impairment test requires judgment, including the identification of reporting units, assignment of assets and liabilities to reporting units, assignment of goodwill to reporting units, and determination of the fair value of each reporting unit. Changes in these estimates and assumptions could materially affect the determination of fair value and/or goodwill impairment for each reporting unit.

        We reviewed the carrying value of our indefinite lived intangible assets by comparing such amount to its fair value and determined that the carrying amount did not exceed its respective fair value. During the years ended September 30, 2008, 2009 and 2010 the fair value of our reporting units was substantially in excess of the reporting units' carrying values. Additionally, the fair value of our indefinite lived intangible assets was substantially in excess of its carrying value. Accordingly, management believes there are no impairments as of September 30, 2010 related to either goodwill or the indefinite-lived intangible asset.

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    Revenue Recognition

        We recognize product and service revenue when (i) persuasive evidence of an arrangement exists, (ii) title transfers to the customer, (iii) the sales price charged is fixed or determinable and (iv) collection is reasonably assured. In instances where title does not pass to the customer upon shipment, we recognize revenue upon delivery or customer acceptance, depending on the terms of the sales contract.

        In connection with the sale of our products, we often provide certain supply chain services. These services are provided exclusively in connection with the sale of products, and as such, the price of such services is generally included in the price of the products delivered to the customer. We do not account for these services as a separate element, as the services do not have stand-alone value and cannot be separated from the product element of the arrangement. There are no significant post-delivery obligations associated with these services.

        We also enter into sales rebates and profit sharing arrangements. Such customer incentives are accounted for as a reduction to gross sales and recorded based upon estimates at the time products are sold. These estimates are based upon historical experience for similar programs and products. We review such rebates and profit sharing arrangements on an ongoing basis and accruals are adjusted, if necessary, as additional information becomes available.

        Management provides allowances for credits and returns based on historic experience and adjusts such allowances as considered necessary. To date, such provisions have been within the range of management's expectations and the allowance established. Sales tax collected from customers is excluded from net sales in the accompanying consolidated statements of income.

    Income Taxes

        We account for income taxes in accordance with ASC 740, Income Taxes. ASC 740, which requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which these temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established, when necessary, to reduce net deferred tax assets to the amount expected to be realized. Our foreign subsidiaries are taxed in local jurisdictions at local statutory rates.

    Stock-Based Compensation

        We account for all stock-based compensation awards to employees and members of our board of directors based upon their fair values as of the date of grant using a fair value method and recognize the fair value of each award as an expense over the requisite service period using the graded vesting method.

        For purposes of calculating stock-based compensation, we estimate the fair value of stock options using a Black-Scholes-Merton valuation model, which requires the use of certain subjective assumptions including expected term, volatility, expected dividend, risk-free interest rate, forfeiture rate and the fair value of our common stock. These assumptions generally require significant judgment.

        We estimate the expected term of employee options using the average of the time-to-vesting and the contractual term. We derive our expected volatility from the historical volatilities of several unrelated public companies within our industry because we have little information on the volatility of the price of our common stock since we have no trading history. When making the selections of our industry peer companies to be used in the volatility calculation, we also consider the size and financial

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leverage of potential comparable companies. These historical volatilities are weighted based on certain qualitative factors and combined to produce a single volatility factor. Our expected dividend rate is zero, as we have never paid any dividends on our common stock and do not anticipate any dividends in the foreseeable future. We base the risk-free interest rate on the U.S. Treasury yield in effect at the time of grant for zero coupon U.S. Treasury notes with maturities approximately equal to each grant's expected life.

        We estimate our forfeiture rate based on an analysis of our actual forfeitures and will continue to evaluate the appropriateness of the forfeiture rate based on actual forfeiture experience, analysis of employee turnover behavior and other factors. Quarterly changes in the estimated forfeiture rate can have a significant effect on reported stock-based compensation expense, as the cumulative effect of adjusting the rate for all expense amortization is recognized in the period the forfeiture estimate is changed. If a revised forfeiture rate is higher than the previously estimated forfeiture rate, an adjustment is made that will result in a decrease to the stock-based compensation expense recognized in the consolidated financial statements. If a revised forfeiture rate is lower than the previously estimated forfeiture rate, an adjustment is made that will result in an increase to the stock-based compensation expense recognized in the consolidated financial statements.

        The following table summarizes the amount of non-cash stock-based compensation expense recognized in our statements of operations:

 
  Year Ended September 30,   Six Months
Ended
March 31,
 
(Dollars in thousands)
  2008   2009   2010   2010   2011  

Non-cash stock-based compensation

  $ 13,700   $ 10,389   $ 2,510   $ 1,281   $ 910  

        For the years ending September 30, 2011 and September 30, 2012, we expect to incur stock-based compensation expense of $1.9 million and $0.3 million, respectively.

        If factors change and we employ different assumptions, stock-based compensation expense may differ significantly from what we have recorded in the past. If there is a difference between the assumptions used in determining stock-based compensation expense and the actual factors that become known over time, we may change the input factors used in determining stock-based compensation costs for future grants. These changes, if any, may materially impact our results of operations in the period such changes are made. We expect to continue to grant stock options in the future, and to the extent that we do, our actual stock-based compensation expense recognized in future periods will likely increase.

    Significant Factors Used in Determining Fair Value of Our Common Stock

        The fair value of the common stock that underlies our stock options has historically been determined by management and approved by our board of directors based upon information available to it at the time of grant. The following table summarizes, by grant date, the number of stock options granted since October 1, 2009 and the associated per share exercise price, which was not less than the fair value of our common stock for each of these grants.

Grant Date
  Number of Options
Granted
  Exercise Price Per
Share of
Common Stock
  Estimated Fair
Value Per Share of
Common Stock
 

October 1, 2009

    68,013   $ 6.29   $ 4.04  

December 2, 2010

    274,500   $ 7.78   $ 6.11  

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        Because there has been no public market for our common stock, our management has determined the fair value of our common stock-based on an analysis of relevant factors, including the following:

    our historical and projected operating and financial performance;

    the uncertainty in our business associated with uncertain economic conditions;

    the fact that the option grants involve illiquid securities in a private company;

    the likelihood of achieving a liquidity event, such as an initial public offering or sale of our company; and

    a discounted cash flow analysis.

        In addition, we have obtained periodic valuation studies from an independent third-party valuation firm. In performing its valuation analysis, the valuation firm engaged in discussions with management, analyzed historical and forecasted financial statements and reviewed our corporate documents. In addition, these valuation studies were based on a number of assumptions, including industry, general economic, market and other conditions that could reasonably be evaluated at the time of the valuation. Third-party valuations were performed as of September 30, 2009 and June 30, 2010 using generally accepted valuation methodologies.

Results of Operations

 
  Year Ended September 30,   Six Months Ended
March 31,
 
(Dollars in thousands)
  2008   2009   2010   2010   2011  

Consolidated statements of income:

                               

Net sales:

                               
 

North America

  $ 551,135   $ 557,874   $ 603,809   $ 283,285   $ 318,808  
 

Rest of the World

    112,623     102,796     95,342     47,259     57,527  
 

Intercompany elimination

    (59,415 )   (47,983 )   (43,115 )   (19,633 )   (26,792 )
                       
   

Net sales

    604,343     612,687     656,036     310,911     349,543  

Gross profit:

                               
 

North America

    221,898     204,296     226,497     103,788     117,725  
 

Rest of the World

    42,143     39,733     34,167     17,265     19,523  
 

Intercompany elimination

    (7,433 )   (5,742 )   (6,434 )   (3,214 )   (3,123 )
                       
   

Gross profit

    256,608     238,287     254,230     117,839     134,125  

Selling, general and administrative expenses:

                               
 

North America

    84,807     86,007     81,674     40,140     39,593  
 

Rest of the World

    20,951     17,888     18,241     9,185     10,288  
                       
   

Selling, general and administrative expenses

    105,758     103,895     99,915     49,325     49,881  
                       

Income from operations

    150,850     134,392     154,315     68,514     84,244  

Interest expense, net

   
(48,743

)
 
(37,707

)
 
(36,270

)
 
(18,214

)
 
(12,586

)

Other income (expense), net

    746     (376 )   (458 )   1,056     (177 )
                       

Income before provision for income taxes

    102,853     96,309     117,587     51,356     71,481  
                       

Provision for income taxes

    44,251     37,862     43,913     19,171     27,873  
                       
   

Net income

  $ 58,602   $ 58,447   $ 73,674   $ 32,185   $ 43,608  
                       

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  Year Ended September 30,   Six Months Ended
March 31,
 
(as a % of total net sales; numbers have been rounded)
  2008   2009   2010   2010   2011  

Consolidated statements of income:

                               

Net sales:

                               
 

North America

    91.2 %   91.1 %   92.0 %   91.1 %   91.2 %
 

Rest of the World

    18.6     16.8     14.5     15.2     16.5  
 

Intercompany elimination

    (9.8 )   (7.8 )   (6.6 )   (6.3 )   (7.7 )
                       
   

Net sales

    100.0     100.0     100.0     100.0     100.0  

Gross profit:

                               
 

North America

    36.7     33.3     34.5     33.4     33.7  
 

Rest of the World

    7.0     6.5     5.2     5.6     5.6  
 

Intercompany elimination

    (1.2 )   (0.9 )   (1.0 )   (1.0 )   (0.9 )
                       
   

Gross profit

    42.5     38.9     38.8     37.9     38.4  

Selling, general and administrative expenses:

                               
 

North America

    14.0     14.0     12.4     12.9     11.3  
 

Rest of the World

    3.5     2.9     2.8     3.0     2.9  
                       
   

Selling, general and administrative expenses

    17.5     17.0     15.2     15.9     14.3  
                       

Income from operations

    25.0     21.9     23.5     22.0     24.1  

Interest expense, net

   
(8.1

)
 
(6.2

)
 
(5.5

)
 
(5.9

)
 
(3.6

)

Other income (expense), net

    0.1     (0.1 )   (0.1 )   0.3     (0.1 )
                       

Income before provision for income taxes

    17.0     15.7     17.9     16.5     20.4  
                       

Provision for income taxes

    7.3     6.2     6.7     6.2     8.0  
                       
   

Net income

    9.7 %   9.5 %   11.2 %   10.4 %   12.5 %
                       

Six Months Ended March 31, 2010 compared with the Six Months Ended March 31, 2011

    Net Sales

        Consolidated net sales of $349.5 million for the six months ended March 31, 2011 increased approximately $38.6 million, or 12.4%, compared to the six months ended March 31, 2010. JIT, LTA and ad hoc sales as a percentage of net sales represented 32%, 30% and 38%, respectively, for the six months ended March 31, 2011, as compared to 30%, 32% and 38%, respectively, for the six months ended March 31, 2010.

        Net sales of $318.8 million in our North America segment for the six months ended March 31, 2011 increased approximately $35.5 million, or 12.5%, compared to the six months ended March 31, 2010. JIT, LTA and ad hoc net sales increased by $12.5 million, $3.6 million and $13.0 million for the six months ended March 31, 2011 as compared to the six months ended March 31, 2010. The increase in JIT net sales was primarily due to accelerated sales of $10.5 million of inventory to two customers in connection with the completion of their sales contracts with us, approximately $8.0 million of which we originally expected to occur during the three months ended June 30, 2011, as well as new SKUs added to existing contracts. The increase in LTA net sales was primarily driven by a new contract signed in the third quarter of fiscal 2009 with one of our major customers, which generated $3.4 million of additional revenue during the six months ended March 31, 2011. $3.3 million of the increase in ad hoc net sales was related to the completion of a contract with one of our customers as mentioned above and the remaining $9.7 million was attributable to general growth across numerous customers as no new material contracts were added during the period.

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        Net sales of $57.5 million in our Rest of the World segment for the six months ended March 31, 2011 increased approximately $10.2 million, or 21.7%, compared to the six months ended March 31, 2010. JIT, LTA and ad hoc net sales increased by $8.8 million, $1.6 million and $1.7 million, respectively. The JIT increase primarily resulted from new long-term contracts entered into in the latter half of fiscal 2010, which accounted for $5.7 million in net sales and the conversion of ad hoc sales to JIT contracts. $1.1 million of the LTA growth resulted from strong demand in B-787 sales with subcontractors, who had reduced spending in prior periods. Ad hoc net sales improved, despite the JIT conversions, due to a strengthening in demand across our customer base, with customers replenishing inventories that declined during the recession.

    Gross Profit

        Consolidated gross profit of $134.1 million for the six months ended March 31, 2011 increased approximately $16.3 million, or 13.8%, compared to the six months ended March 31, 2010. Gross profit as a percentage of net sales was 38.4% for the six months ended March 31, 2011, compared to 37.9% for the six months ended March 31, 2010.

        Gross profit of $117.7 million in our North America segment for the six months ended March 31, 2011 increased approximately $13.9 million, or 13.4%, compared to the six months ended March 31, 2010. Gross profit as a percentage of net sales in our North America segment was 36.9% for the six months ended March 31, 2011 compared to 36.6% for the six months ended March 31, 2010. The increase in gross profit as a percentage of net sales was primarily driven by an additional $13.0 million of ad hoc sales for the six months ended March 31, 2011, which are typically higher margin sales, as well as a $12.5 million increase in JIT business with higher than average margins.

        Gross profit of $19.5 million in our Rest of the World segment for the six months ended March 31, 2011 increased approximately $2.3 million, or 13%, compared to the six months ended March 31, 2010. Gross profit as a percentage of net sales in our Rest of the World segment was 33.9% for the six months ended March 31, 2011 compared to 36.5% for the six months ended March 31, 2010. The lower gross profit percentage was primarily a result of changes in our sales mix. Overall, our ad hoc gross profit fell by $0.6 million as a result of fewer ad hoc purchases being made by the B-787 program. However, decreases in these higher margin sales were partially offset by increases in lower margin JIT and LTA sales, which generated margins of $2.3 million and $0.4 million, respectively.

    Selling, General and Administrative Expenses

        Total selling, general and administrative expenses of $49.9 million for the six months ended March 31, 2011 increased approximately $0.6 million, or 1.1%, compared to the six months ended March 31, 2010. However, total selling, general and administrative expenses as a percentage of net sales during the six months ended March 31, 2011 decreased by 1.6% compared to the six months ended March 31, 2010, as we continued to leverage our existing infrastructure.

        Selling, general and administrative expenses of $39.6 million in our North America segment for the six months ended March 31, 2011 decreased approximately $0.5 million, or 1.4%, compared to the six months ended March 31, 2010. This decrease was primarily due to a $2.2 million recovery of bad debt, partially offset by $0.6 million, $0.5 million, $0.4 million and $0.2 million in higher payroll costs, depreciation, group insurance costs and professional service fees, respectively.

        Selling, general and administrative expenses of $10.3 million in our Rest of the World segment for the six months ended March 31, 2011 increased approximately $1.1 million, or 12.0%, compared to the six months ended March 31, 2010. The increase was primarily due to increased payroll costs of $0.8 million driven by an 11% increase in headcount to support new contracts.

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    Other Expenses

    Interest Expense, net

        Interest expense, net of $12.6 million for the six months ended March 31, 2011 decreased approximately $5.6 million, or 30.9%, compared to the six months ended March 31, 2010. This decrease was a result of a $66.0 million reduction in the outstanding debt balances of the old senior secured credit facilities stemming from the repayment of principal under these facilities, as well as a $4.7 million decrease in swap expense for the six months ended March 31, 2011 as compared to the six months ended March 31, 2010.

    Other Income (Expense), net

        Other expense, net of $0.2 million for the six months ended March 31, 2011 increased approximately $1.2 million compared to the six months ended March 31, 2010. This change was primarily due to unrealized foreign exchange losses associated with transactions denominated in currencies other than the respective functional currency of the reporting subsidiary.

    Provision for Income Taxes

        Provision for income taxes of $27.9 million for the six months ended March 31, 2011 increased approximately $8.7 million, or 45.4%, compared to the six months ended March 31, 2010. Our effective tax rate was 37.3% and 39.0% during the six months ended March 31, 2010 and 2011, respectively. The increase in provision for income taxes was primarily a result of a $20.1 million, or 39.2%, increase in pre-tax income from the six months ended March 31, 2011 as compared to the six months ended March 31, 2010. Other items impacting our overall tax provision included a decrease in our effective tax rate in the U.S. for the six months ended March 31, 2010 related to the filing of an amended 2008 California return, which resulted in a $1.4 million refund.

    Net Income

        Due to the factors described above, we reported a net income of $43.6 million for the six months ended March 31, 2011, compared to net income of $32.2 million for the six months ended March 31, 2010. Net income as a percent of net sales increased 2.1% for the six months ended March 31, 2011, primarily due to an increase in gross profit as a percent of net sales and a decrease in selling, general and administrative expenses as a percent of net sales.

Year Ended September 30, 2009 compared with the Year Ended September 30, 2010

    Net Sales

        Consolidated net sales of $656.0 million for the year ended September 30, 2010 increased $43.3 million, or 7.1%, compared to the year ended September 30, 2009. Excluding EPG products, JIT, LTA and ad hoc sales as a percentage of net sales represented 34%, 34% and 32%, respectively, for the year ended September 30, 2010, as compared to 29%, 31% and 40%, respectively, for the year ended September 30, 2009.

        Net sales of $603.8 million in our North America segment for the year ended September 30, 2010 increased $45.9 million, or 8.2%, compared to the year ended September 30, 2009. JIT and LTA net sales increased by $43.9 million and $42.0 million, respectively, while ad hoc and EPG net sales decreased by $9.6 million and $27.3 million, respectively, year over year. Approximately $21.0 million of the JIT increase was driven by increased sales relating to the B-787 program, $8.1 million by the addition of new sites for one of our major customers and $7.0 million by military programs such as the Chinook and V-22, while the remaining $7.8 million was attributable to general growth across numerous customers. $17.0 million of the LTA increase was due to a new contract for the F-18 program,

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$8.2 million related to the addition of new sites for one of our major customers and $5.1 million to other increases in military programs such as Chinook and V-22. The remaining $11.7 million was attributable to general growth across numerous customers. The decrease in ad hoc net sales was primarily driven by business shifting to JIT and LTA contract sales. The decrease in EPG net sales was due to the decline in the general aviation markets.

        Net sales of $95.3 million in our Rest of the World segment for the year ended September 30, 2010 decreased $7.5 million, or 7.3%, compared to the year ended September 30, 2009. JIT net sales increased by $4.4 million, while ad hoc and LTA net sales decreased by $9.3 million and $1.7 million, respectively. The reduction in ad hoc sales was attributed to a general market slowdown. JIT sales grew primarily due to $2.4 million of net sales related to the B-737 program, and $2.1 million related to growth in several of our military contracts. Other smaller increases in JIT net sales were driven primarily by the conversion of B-787 LTAs to JIT contracts in Italy.

    Gross Profit

        Consolidated gross profit of $254.2 million for the year ended September 30, 2010 increased $15.9 million, or 6.7% compared to gross profit for the year ended September 30, 2009. Gross profit as a percentage of net sales was 38.8% for the year ended September 30, 2010 compared to 38.9% for the year ended September 30, 2009.

        Gross profit of $226.5 million in our North America segment for the year ended September 30, 2010 increased $22.2 million, or 10.9%, compared to the year ended September 30, 2009. Gross profit as a percentage of net sales in our North America segment was 37.5% for the year ended September 30, 2010 compared to 36.6% for the year ended September 30, 2009. The increase in gross profit as a percentage of net sales was primarily driven by the $27.3 million decrease in EPG sales, which have lower margins than hardware sales.

        Gross profit of $34.2 million in our Rest of the World segment for the year ended September 30, 2010 decreased $5.6 million, or 14.0%, compared to the year ended September 30, 2009. Gross profit as a percentage of net sales was 35.8% for the year ended September 30, 2010 compared to 38.7% for the year ended September 30, 2009. The lower gross profit resulted from a $4.2 million decrease in higher margin ad hoc sales as well as a reduction in the average ad hoc gross profit percentage reducing the gross profit by $1.4 million. This was due to the general market decline. The increased JIT sales came at a reduced margin of $0.6 million, offsetting the margin lost from lower LTA sales of $0.5 million.

    Selling, General and Administrative Expenses

        Total selling, general and administrative expenses of $99.9 million for the year ended September 30, 2010 decreased $4.0 million, or 3.8%, compared to the year ended September 30, 2009, as we leveraged our infrastructure to support sales growth.

        Selling, general and administrative expenses of $81.7 million in our North America segment for the year ended September 30, 2010 decreased $4.3 million, or 5.0%, compared to the year ended September 30, 2009. This decrease was primarily a result of a reduction in non-cash stock-based compensation expense of $7.9 million, which was predominantly associated with restricted stock units that became fully vested on September 30, 2009, and a $1.6 million decrease in amortization expense related to certain intangible assets becoming fully amortized. These deductions were partially offset by increases of $0.6 million and $0.2 million in depreciation and professional service fees, respectively, as well as an increase in payroll expenses of $4.3 million, which was primarily driven by a $3.5 million increase in bonus expense.

        Selling, general and administrative expenses of $18.2 million in our Rest of the World segment for the year ended September 30, 2010 increased $0.4 million, or 2.0%, compared to the year ended

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September 30, 2009. This increase was primarily a result of increased payroll costs related to $0.4 million of additional bonus expense.

    Other Expenses

    Interest Expense, net

        Interest expense, net of $36.3 million for the year ended September 30, 2010 decreased $1.4 million, or 3.8%, compared to the year ended September 30, 2009. This decrease was primarily a result of principal debt payments of $67.4 million and a decrease in the average London Inter-Bank Offer Rate, or LIBOR, of 0.7% during the year ended September 30, 2010 as compared the year ended September 30, 2009. This was partially offset by $9.0 million in interest rate swap expense for the year ended September 30, 2010, an increase of $3.3 million as compared to the year ended September 30, 2009. We entered into our interest rate swap agreements midway through the year ended September 30, 2009 to hedge against interest rate fluctuations.

    Other (Expense), net

        Other expense, net of $0.5 million for the year ended September 30, 2010 increased $0.1 million, compared to the year ended September 30, 2009. This change was primarily due to unrealized foreign exchange losses associated with transactions denominated in currencies other than the respective functional currency of the reporting subsidiary.

    Provision for Income Taxes

        Provision for income taxes of $43.9 million for the year ended September 30, 2010, increased $6.1 million, or 16.0%, compared to the year ended September 30, 2009. Our effective tax rate was 39.3% and 37.3% during the years ended September 30, 2009 and 2010, respectively. The increase in the provision for income taxes was primarily a result of a $21.3 million, or 22.1%, increase in pre-tax income for the year ended September 30, 2010. Other items impacting the overall tax provision included a decrease in our effective tax rate in the U.S. for the year ended September 30, 2009 related to the filing of an amended 2008 California return, which resulted in a $1.4 million refund.

    Net Income

        Due to the factors described above, we reported a net income of $73.7 million for the year ended September 30, 2010, compared to net income of $58.4 million for the year ended September 30, 2009. Net income as a percent of net sales increased 1.7% for the year ended September 30, 2010 primarily due to a decrease in operating expenses as a percent of net sales as we continued to leverage our infrastructure to support sales growth.

Year Ended September 30, 2008 Compared with the Year Ended September 30, 2009

    Net Sales

        Consolidated net sales of $612.7 million for the year ended September 30, 2009 increased $8.3 million, or 1.4%, compared to the year ended September 30, 2008. The U.S. dollar strengthened against the British pound from $0.51 to $0.65 from the year ended September 30, 2008 to the year ended September 30, 2009, impacting net sales negatively by $22.1 million on a consolidated basis. Without the negative foreign exchange impact, consolidated net sales would have increased by $30.4 million, or 5.0%, as compared to the year ended September 30, 2008. Excluding EPG products, JIT, LTA and ad hoc sales as a percentage of net sales represented 29%, 31% and 40%, respectively, for the year ended September 30, 2009, as compared to 26%, 27% and 47%, respectively, for the year ended September 30, 2008.

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        Net sales of $557.9 million in our North America segment for the year ended September 30, 2009 increased $6.7 million, or 1.2%, compared to the year ended September 30, 2008. EPG net sales increased by $60.2 million year over year as a result of the Airtechnics Acquisition. JIT and LTA net sales increased by $3.6 million and $10.2 million, respectively, while ad hoc net sales decreased by $55.8 million year over year. The increase in JIT net sales was primarily driven by increased sales relating to the B-787 platform. The increase in LTA net sales was primarily related to $10.4 million in increased sales to the military market, in part due to the startup of the JSF program. The decrease in ad hoc net sales was primarily due to the effect of the general economic decline across numerous customers as we did not lose any significant contracts during the period.

        Net sales of $102.8 million in our Rest of the World segment for the year ended September 30, 2009 decreased $9.8 million, or 8.7%, compared to net sales for the year ended September 30, 2008. The strengthening of the U.S. dollar impacted net sales negatively by $26.9 million. Without the negative foreign exchange impact, net sales in our Rest of the World segment would have increased by $17.1 million, or 15.2%, as compared to the year ended September 30, 2008. JIT sales increased $11.4 million and LTA sales increased $3.5 million, which was primarily due to increased sales to the European military market, and ad hoc sales increased by $0.8 million, which was primarily due to general increases across our customer base as a result of longer lead times from manufacturers.

    Gross Profit

        Consolidated gross profit of $238.3 million for the year ended September 30, 2009 decreased approximately $18.3 million, or 7.1% compared to the year ended September 30, 2008. Gross profit as a percentage of net sales was 38.9% for the year ended September 30, 2009, compared to 42.5% for the year ended September 30, 2008.

        Gross profit of $204.3 million in our North America segment for the year ended September 30, 2009 decreased $17.6 million, or 7.9%, compared to the year ended September 30, 2008. Gross profit as a percentage of net sales in our North America segment was 36.6% for the year ended September 30, 2009 compared to 40.3% for the year ended September 30, 2008. The decrease was primarily driven by a $60.2 million increase in EPG sales, which generally have lower margins than hardware sales, as well as a $55.8 million decrease in higher margin ad hoc sales.

        Gross profit of $39.7 million in our Rest of the World segment for the year ended September 30, 2009 decreased $2.4 million, or 5.7%, compared to the year ended September 30, 2008. Gross profit as a percentage of net sales in our Rest of the World segment was 38.7% for the year ended September 30, 2009 compared to 37.4% for the year ended September 30, 2008. The decline in gross profit of $2.4 million is primarily the result of an adverse foreign exchange impact of $8.8 million, partially offset by gross profit increases of $4.3 million, $0.9 million and $0.3 million for JIT, LTA and ad hoc sales, respectively.

    Selling, General and Administrative Expenses

        Total selling, general and administrative expenses of $103.9 million for the year ended September 30, 2009 decreased $1.9 million, or 1.8%, compared to the year ended September 30, 2008, as we continued to leverage our infrastructure to support sales growth and implemented cost saving initiatives around our travel and entertainment policy.

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        Selling, general and administrative expenses of $86.0 million in our North America segment for the year ended September 30, 2009 increased $1.2 million, or 1.4%, compared to the year ended September 30, 2008. This increase was primarily a result of a $4.2 million increase in payroll costs and $1.2 million in group insurance costs during the year ended September 30, 2009. This increase was primarily due to a full year of increased headcount related to the Airtechnics Acquisition as compared to only three months of expense in the year ended September 30, 2008. Amortization expense increased by $2.8 million due to a full year of amortization expense related to the intangibles acquired during the Airtechnics Acquisition. Offsetting these increases was a $3.3 million decrease in non-cash stock compensation related to stock option expense, a $0.3 million reduction in travel related expenses and a $3.4 million decrease in bad debt expense for the year ended September 30, 2009 as compared to the year ended September 30, 2008. The decrease in bad debt expense was primarily due to a one-time charge taken in the year ended September 30, 2008 for two customers who filed for bankruptcy during the year.

        Selling, general and administrative expenses of $17.9 million in our Rest of the World segment for the year ended September 30, 2009 decreased $3.1 million, or 14.6%, compared to the year ended September 30, 2008. This decrease was primarily a result of the exchange rate change during the periods. The foreign exchange impact to the year ended September 30, 2009 was a $5.5 million reduction to selling, general and administrative expenses as compared to September 30, 2008. Without the foreign exchange impact selling, general and administrative expenses would have increased $2.8 million over the prior year. This increase was primarily due to $1.2 million related to a full year of operational expenses of a new branch office.

    Other Expenses

    Interest Expense, net

        Interest expense, net of $37.7 million for the year ended September 30, 2009 decreased $11.0 million, or 22.6%, compared to the year ended September 30, 2008. This decrease was primarily a result of a decrease in LIBOR rates during the year ended September 30, 2009 as compared to the year ended September 30, 2008. The average LIBOR rate for the year ended September 30, 2008 was 3.9%, which dropped to an average rate of 1.0% for the year ended September 30, 2009, reducing interest expense by $17.2 million. This decrease was offset by an increase in the interest rate swap expense of $3.7 million and a $100.0 million increase to the first lien debt under the old senior secured credit facilities on June 30, 2008, in conjunction with the Airtechnics Acquisition, which increased interest expense by $2.0 million for the year ended September 30, 2009 as compared to the year ended September 30, 2008. Upon the maturity of our previous interest rate swaps, we entered into two interest rate swaps arrangements that expire in February and June 2012.

    Other Income (Expense), net

        Other expense, net was $0.4 million for the year ended September 30, 2009 compared to $0.7 million of income for the year ended September 30, 2008. This change was primarily due to unrealized foreign exchange losses associated with transactions denominated in currencies other than the respective functional currency of the reporting subsidiary.

    Provision for Income Taxes

        Provision for income taxes of $37.9 million for the year ended September 30, 2009 decreased $6.4 million, or 14.4%, compared to the year ended September 30, 2008. Our effective tax rate was 43.0% and 39.3% during the years ended September 30, 2008 and 2009, respectively. The decrease in provision for income taxes was primarily a result of a $6.5 million, or 6.4%, decrease in pre-tax income. Additionally, for the year ended September 30, 2009, we recognized a larger foreign tax credit than the

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prior year, resulting in an additional benefit of $0.8 million, which reduced the effective tax rate by almost 1.0%.

    Net Income

        Due to the factors described above, we reported a net income of $58.5 million for the year ended September 30, 2009, compared to net income of $58.6 million for the year ended September 30, 2008. Net income as a percent of net sales decreased 0.2% for the year ended September 30, 2009, primarily as a result of a 3.6% decrease in gross profit as a percent of net sales.

Supplemental Quarterly Financial Information

        The following table sets forth our historical unaudited quarterly consolidated statements of operations for each of the last eight quarters ended March 31, 2011. This unaudited quarterly information has been prepared on the same basis as our consolidated audited financial statements appearing elsewhere in this prospectus, and includes all adjustments, consisting only of normal and recurring adjustments, that we consider necessary to present fairly the financial information for the quarters presented. We have not historically experienced any significant seasonality with respect to our results of operations.

        The quarterly data should be read in conjunction with our consolidated financial statements and the notes thereto included elsewhere in this prospectus.

 
  Three Months Ended  
(Dollars in thousands)
  June 30,
2009
  September 30,
2009
  December 31,
2009
  March 31,
2010
  June 30,
2010
  September 30,
2010
  December 31,
2010
  March 31,
2011
 
 
  (unaudited)
 

Consolidated statements of income:

                                                 

Net sales

  $ 150,715   $ 150,680   $ 146,806   $ 164,105   $ 171,116   $ 174,009   $ 173,528   $ 176,015  
                                   

Gross profit

    56,878     53,758     54,643     63,197     68,240     68,150     66,699     67,426  
                                   

Selling, general and administrative expenses

    24,079     25,904     24,758     24,568     24,968     25,621     25,388     24,493  
                                   

Income from operations

    32,799     27,854     29,885     38,629     43,272     42,529     41,311     42,933  
                                   

Interest expense, net

    (9,002 )   (10,628 )   (8,579 )   (9,635 )   (9,199 )   (8,857 )   (6,277 )   (6,309 )

Other income (expense), net

    (985 )   920     (41 )   1,098     (495 )   (1,020 )   516     (693 )
                                   

Income before provision for income taxes

    22,812     18,146     21,265     30,092     33,578     32,652     35,550     35,931  
                                   

Provision for income taxes

    9,188     6,925     7,194     11,978     12,121     12,620     13,880     13,993  
                                   
 

Net income

  $ 13,624   $ 11,221   $ 14,071   $ 18,114   $ 21,457   $ 20,032   $ 21,670   $ 21,938  
                                   

Liquidity and Capital Resources

    Overview

        We have historically funded our operations, debt payments, capital expenditures and discretionary funding needs from our cash from operations. We had total available cash and cash equivalents of approximately $24.1 million and $45.7 million as of March 31, 2010 and 2011, respectively, and approximately $16.0 million, $11.4 million and $39.5 million as of September 30, 2008, 2009 and 2010,

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respectively. In addition, as of March 31, 2011, we had no amounts outstanding under the old revolving facility.

        Following the completion of this offering, our primary sources of liquidity will continue to be cash flow from operations and available borrowings under our new revolving facility. Our primary uses of cash following this offering will be for:

    operating expenses;

    working capital requirements to fund the growth of our business;

    capital expenditures that primarily relate to IT equipment and our warehouse operations; and

    debt service requirements for borrowings under the new senior secured credit facilities.

        Generally, cash provided by operating activities has been adequate to fund our operations. Due to fluctuations in our cash flows and the growth in our operations, it may be necessary from time to time in the future to borrow under our new revolving facility to meet cash demands. We anticipate that cash provided by operating activities, cash and cash equivalents and borrowing capacity under our new revolving facility will be sufficient to meet our cash requirements for the next twelve months. As of March 31, 2011, we did not have any material capital expenditure commitments.

    Senior Secured Credit Facilities

    Old Senior Secured Credit Facilities

        As of March 31, 2011, our outstanding indebtedness under our old senior secured credit facilities was approximately $606.2 million. The old senior secured credit facilities consisted of a $625.0 million first lien credit facility, which we refer to as the old first lien credit facility, and a $150.0 million second lien credit facility, which we refer to as the old second lien credit facility. At the time of initial incurrence, the old first lien credit facility was comprised of a $450.0 million first lien term loan facility and a $75.0 million first lien revolving line of credit. On June 30, 2008, we modified the terms of the old first lien credit facility to include an additional $100.0 million of term loan borrowings thereunder to fund the Airtechnics Acquisition, bringing the old first lien term loan facility up to $550.0 million at such time. As of March 31, 2011, we had approximately $477.2 million outstanding under the old first lien credit facility.

        The interest rate on term loans under the old first lien credit facility was calculated using either Alternate Base Rate, or ABR (which is defined as Prime Rate plus an applicable margin rate of 1.25%), or Eurocurrency rate (defined as LIBOR plus an applicable margin rate of 2.25%), at our option. The interest rate on the term loans under the old first lien credit facility was 2.50% as of March 31, 2011.

        There were no outstanding borrowings under the old revolving facility as of March 31, 2011, or at any point during fiscal 2010 or the six months ended March 31, 2011. The annual commitment fees for the old revolving facility were approximately $0.3 million.

        As of March 31, 2011, we had approximately $129.0 million outstanding under the old second lien credit facility. The interest rate on the old second lien credit facility was calculated using ABR (defined as Prime Rate plus the applicable margin rate of 4.75%) or Eurocurrency rate (defined as LIBOR plus an applicable margin rate of 5.75%), at our option. The interest rate on the old second lien credit facility was 6.00% as of March 31, 2011.

        During the year ended September 30, 2010, we made repayments totaling approximately $60.4 million with respect to the term loans under the old first lien credit facility and $7.0 million with respect to the old second lien credit facility, inclusive of contractually scheduled payments.

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        Our subsidiary, Wesco Aircraft Europe Limited, has a £10.0 million (approximately $16.0 million based on the March 31, 2011 exchange rate) line of credit available that automatically renews annually on October 1, which we refer to as the UK Line of Credit. This line of credit bears interest based on the base rate plus an applicable margin of 1.15%. There were no outstanding borrowings under the UK Line of Credit as of March 31, 2011.

    New Senior Secured Credit Facilities

        Borrowings under the new revolving facility and new term loan A facility bear interest at the Eurocurrency rate plus the applicable margin or the ABR plus the applicable margin. Borrowings under the new term loan B facility bear interest at a rate equal to (A) the greater of (x) the Eurocurrency rate and (y) 1.25% or (B) the greater of (x) the ABR and (y) 1.25%, plus, in each case, the applicable margin.

        The applicable margin for the new revolving facility and the new term loan A facility is 3.00% for Eurocurrency loans and 2.00% for ABR loans for the six-month period after the closing of the new senior secured credit facilities, and thereafter the applicable margin will be based on our total net leverage ratio as determined in the most recently delivered financial statements, with the respective margins ranging from 2.25% to 3.25% for Eurocurrency loans and 1.25% to 2.25% for ABR loans. The applicable margin for the new term loan B facility is 3.00% for Eurocurrency loans and 2.00% for ABR loans for the period from the closing date of the new senior secured credit facilities until June 30, 2012, and thereafter the applicable margin will be based on our total net leverage ratio as determined in the most recently delivered financial statements, with the respective margins ranging from 2.75% to 3.00% for Eurocurrency loans and 1.75% to 2.00% for ABR loans.

        The new revolving facility and new term loan A facility each mature on April 7, 2016 and the new term loan B facility matures on April 7, 2017.

        The obligations under the new senior secured credit facilities are guaranteed by us and all of our direct and indirect, wholly owned, domestic restricted subsidiaries (subject to certain exceptions) and secured by a first lien on substantially all of our assets and the assets of our guarantor subsidiaries, including capital stock of subsidiaries (in each case, subject to certain exceptions).

        The new senior secured credit facilities contain customary negative covenants, including restrictions on our and our restricted subsidiaries' ability to merge and consolidate with other companies, incur indebtedness, grant liens or security interests on assets, make acquisitions, loans, advances or investments, pay dividends, sell or otherwise transfer assets, optionally prepay or modify terms of any junior indebtedness or enter into transactions with affiliates. The new senior secured credit facilities also require the maintenance of a net-debt-to-EBITDA ratio (as such ratio is defined in the new senior secured credit facilities) of less than 4.00 and a EBITDA-to-net cash interest expense ratio (as such ratio is defined in the new senior secured credit facilities) of no lower than 2.25. Had the new senior secured credit facilities been in effect as of March 31, 2011, our net-debt-to-EBITDA ratio would have been 3.11 and our EBITDA-to-net cash interest expense ratio would have been 7.21.

        The new senior secured credit facilities contain customary affirmative covenants, including delivery of financial and other information to the administrative agent, notice to the administrative agent upon the occurrence of certain material events, preservation of existence, payment of material taxes and other claims, maintenance of properties and insurance, maintenance of books and records, access to properties and records for inspection by administrative agent and lenders, further assurances and provision of additional collateral and guarantees.

        The new senior secured credit facilities provide that, upon the occurrence of certain events of default, the obligations thereunder may be accelerated and the lending commitments terminated. Such events of default include payment defaults to the lenders, material inaccuracies of representations and warranties, covenant defaults, cross-defaults to other material indebtedness, voluntary and involuntary bankruptcy proceedings, material money judgments, material ERISA events, certain change of control events and other customary events of default.

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    Cash Flows

        A summary of our operating, investing and financing activities are shown in the following table:

 
  Year Ended September 30,   Six Months Ended
March 31,
 
(In thousands)
  2008   2009   2010   2010   2011  

Consolidated statements of cash flows data:

                               

Net cash provided by operating activities

  $ 24,702   $ 1,266   $ 100,773   $ 31,117   $ 23,657  

Net cash used in investing activities

    (115,798 )   (4,135 )   (3,077 )   (1,325 )   (2,761 )

Net cash provided by (used in) financing activities

    94,114     (1,720 )   (69,483 )   (16,471 )   (14,875 )

    Operating Activities

        Our operating activities generated $23.7 million of cash in the six months ended March 31, 2011, a decrease of $7.5 million, compared to the six months ended March 31, 2010. This was primarily the result of a $14.8 million increase in the change in accounts receivable for the six months ended March 31, 2011 as compared to the six months ended March 31, 2010. This increase in accounts receivable was due to a $38.6 million, or 12.4%, increase in net sales for the six months ended March 31, 2011 as compared to March 31, 2010. We manage our accounts receivable collection risk by continually monitoring our accounts receivable aging, days sales outstanding and creditworthiness of our customers. From fiscal 2007 to present, our days sales outstanding has ranged from 50 days to 56 days, with fluctuations within this range resulting from a number of factors, including working days per period, sales volumes, market conditions and payment terms. Recently, our days sales outstanding has increased from 50 days outstanding for the year ended September 30, 2010 to 55 days outstanding for the six months ended March 31, 2011. However, excluding a $7.7 million receivable which was billed during September 2010 and received prior to September 30, 2010, our days sales outstanding for the year ended September 30, 2010 would have been 54 days. Additionally, approximately 19.3% of our net sales during the six months ended March 31, 2011 occurred in the month of March, which contributed to the increase in the accounts receivable balance for such period. From September 30, 2010 to March 31, 2011, we have not made any material changes to the payment terms we provide our customers. We believe that our days sales outstanding for the fiscal year ended September 30, 2011 will be consistent with historical levels.

        We provide for the possible inability to collect accounts receivable by recording an allowance for doubtful accounts. We reserve for an account when it is considered to be uncollectible. Reductions in the allowance may occur if we are successful in collecting on receivables which we had previously established an allowance against. Our allowance for doubtful accounts is based on historical experience, aging of accounts receivable and information regarding the creditworthiness of our customers. During the six months ended March 31, 2011, our accounts receivable greater than 60, 90 and 120 days outstanding was $2.7 million, $1.1 million, and $1.3 million respectively. Additionally, as of June 21, 2011, we have collected approximately 98% or $102.1 million of our March 31, 2011 accounts receivables, net of allowance for doubtful accounts. None of the remaining $2.5 million of our uncollected, unreserved receivable amounts from March 31, 2011 are past due. Based on our review of this aging, anticipated timing of collections, the amount of receivables that are past due and creditworthiness of our customers, we believe that our allowance for doubtful accounts is appropriate. Additionally, during the six months ended March 31, 2011, we recognized a one-time $2.2 million recovery of bad debt expense due to payment received at the conclusion of a contract for a doubtful account that we reserved during the year ended September 30, 2006. Our accounts receivable balance as a percentage of net sales was 30.7% and 29.9% for the six months ended March 31, 2010 and March 31, 2011, respectively.

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        Our operating activities generated $100.8 million of cash in the year ended September 30, 2010, an increase of $99.5 million compared to the year ended September 30, 2009. This increase was primarily the result of a $112.7 million net decrease in the change in inventory for the year ended September 30, 2010 as compared to the year ended September 30, 2009. Net income also increased $15.2 million during the year ended September 30, 2010. This was offset by a $12.2 million increase in the net change in accounts receivable for the year ended September 30, 2009 as compared to the year ended September 30, 2010. This increase was primarily driven by a $43.3 million, or 7.1%, increase in net sales for the year ended September 30, 2010. The average days sales outstanding remained constant at 50 days for both the years ended September 30, 2009 and 2010. Our accounts receivable balance as a percentage of net sales was 13.6% and 13.6% for the years ended September 30, 2009 and September 30, 2010, respectively.

        Our operating activities generated $1.3 million of cash in the year ended September 30, 2009, a decrease of $23.4 million compared to the year ended September 30, 2008. This decrease was primarily the result of a $52.4 million increase in the net change in inventory for the year ended September 30, 2009 as compared to the year ended September 30, 2008. This significant inventory increase was caused by increased supplier capacity that resulted in shorter lead times and faster shipments of our pre-existing orders. This was offset by a decrease of $15.6 million in accounts receivable driven by a five day decrease in days sales outstanding of 50 days for the year ended September 30, 2009, as compared to 55 days for the year ended September 30, 2008. Our accounts receivable balance as a percentage of net sales was 15.1% and 13.6% for the years ended September 30, 2008 and September 30, 2009, respectively. The 1.5% increase for fiscal 2008 compared with fiscal 2009 was primarily the result of increased net sales during the last two months of fiscal 2008.

        Our accounts receivable balance as a percentage of net sales may fluctuate from quarter-to-quarter. These fluctuations are primarily driven by changes, from quarter-to-quarter, in (i) the timing of sales and (ii) the current average days sales outstanding. The completion of customer contracts with accelerated payment terms can also contribute to these quarter-to-quarter fluctuations.

        Our allowance for doubtful accounts may also fluctuate from quarter-to-quarter. These fluctuations are primarily driven by changes in our accounts receivable balance, and can also be impacted by the repayment of amounts owed to us that had previously been categorized as bad debt.

    Investing Activities

        Our investing activities used $1.3 million and $2.8 million of cash in the six months ended March 31, 2010 and 2011, respectively, and $115.8 million, $4.1 million and $3.1 million in cash during the years ended September 30, 2008, 2009 and 2010, respectively. These amounts were used for investments in various capital expenditures and to purchase property and equipment. In addition, during the year ended September 30, 2008, $109.0 million of cash was used in the Airtechnics Acquisition.

        Our purchases of property and equipment may vary from period to period due to the timing of the expansion of our business and the investment requirements to provide us with technology that allows us to better serve our customers.

    Financing Activities

        Our financing activities used $14.9 million of cash in the six months ended March 31, 2011. This amount primarily consisted of $14.0 million used to repay principal against the old second lien credit facility, and the remaining amount was used to make repayments under our capital lease obligations.

        Our financing activities used $16.5 million of cash in the six months ended March 31, 2010. This primarily consisted of $14.0 million used to repay principal against the old first lien credit facility,

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$1.4 million to make a required quarterly debt payment on our old senior secured credit facilities, $0.8 million to pay off the UK Line of Credit and $0.3 million to make repayments under our capital lease obligations.

        Our financing activities used $69.5 million of cash in the year ended September 30, 2010. This amount consisted of $67.4 million used to make repayments under the old senior secured credit facilities, $1.3 million used to make repayments under our capital lease obligations and $0.8 million used to make repayments under our UK Line of Credit.

        Our financing activities used $1.7 million of cash in the year ended September 30, 2009. This amount consisted of $0.7 million used to redeem vested stock options, $1.0 million used to make repayments under our capital lease obligations and less than $0.1 million used to make repayments under our UK Line of Credit, partially offset by less than $0.1 million in cash proceeds from the exercise of stock options.

        Our financing activities generated $94.1 million of cash in the year ended September 30, 2008. This amount consisted of $100.0 million in borrowings under the old first lien credit facility and $1.0 million in cash proceeds from the issuance of common stock, which was partially offset by approximately $2.4 million used to make repayments under our UK Line of Credit, $3.0 million used to pay certain financing fees associated with the Airtechnics Acquisition and $1.5 million used to make repayments under our capital lease obligations.

Contractual Obligations

        The following table is a summary of contractual cash obligations at September 30, 2010 (in thousands):

 
  Payments Due by Period  
 
  Less Than
1 Year
  1 - 3
Years
  3 - 5
Years
  More Than
5 Years
  Total  

Long-Term Debt Obligations(1)

  $   $ 477,243   $ 143,000   $   $ 620,243  

Capital Lease Obligations(2)

    1,577     1,676     99         3,352  

Operating Lease Obligations(3)

    3,629     6,314     4,395     7,166     21,504  

Purchase Obligations(4)

    193,696     2,565     110         196,371  
                       

Total

  $ 198,902   $ 487,798   $ 147,604   $ 7,166   $ 841,470  
                       

(1)
This line item includes our obligations under the old senior secured credit facilities. This line item does not reflect payment obligations for the new senior secured credit facilities. The payment obligations for the new senior secured credit facilities assuming an outstanding principal amount of $615.0 million, the balance as of April 7, 2011, the closing date of the new senior secured credit facilities, are $4,188, $35,156, $58,343 and $517,313 for the periods Less Than 1 Year, 1-3 Years, 3-5 Years and More Than 5 Years, respectively. These amounts assume no repayment of principal during such period and do not include interest payments required to be made under the old senior secured credit facilities and the new senior secured credit facilities, which bear interest at a variable rate. See "—Liquidity and Capital Resources—Senior Secured Credit Facilities—New Senior Secured Credit Facilities."

(2)
This line item includes our payment obligations under leases classified as a capital lease.

(3)
This line item includes any payment obligations under leases classified as an operating lease.

(4)
This line item includes our current open purchase orders with respect to the purchase of products and the estimated timing of the transaction.

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Off-Balance Sheet Arrangements

        We are not a party to any off-balance sheet arrangements.

Recently Adopted Accounting Pronouncements

        Changes to GAAP are established by the Financial Accounting Standards Board, or the FASB, in the form of Accounting Standards Updates, or ASUs, to the FASB's ASC.

        We consider the applicability and impact of all ASUs. ASUs not listed below were assessed and determined to be either not applicable or are expected to have minimal impact on our consolidated financial position and results of operations.

        In January 2010, the FASB issued guidance that revised two disclosure requirements concerning fair value measurements and clarifies two others. It requires separate presentation of significant transfers into and out of Levels 1 and 2 of the fair value hierarchy and disclosure of the reasons for such transfers. It will also require the presentation of purchases, sales, issuances and settlements within Level 3 on a gross basis rather than a net basis. The amendments also clarify that disclosures should be disaggregated by class of asset or liability and that disclosures about inputs and valuation techniques should be provided for both recurring and non-recurring fair value measurements. These new disclosure requirements will become effective for our financial statements for the period ended September 30, 2011, except for the requirement concerning gross presentation of Level 3 activity, which will become effective for fiscal years beginning after December 15, 2010. Since we do not currently have any Level 3 fair value measurements, the adoption of this standard will not have an impact on our consolidated financial statements.

        In October 2009, the FASB issued guidance on revenue arrangements with multiple deliverables effective for our 2012 fiscal year, although early adoption is permitted. The guidance revises the criteria for separating, measuring, and allocating arrangement consideration to each deliverable in a multiple element arrangement. The guidance requires companies to allocate revenue using the relative selling price of each deliverable, which must be estimated since we do not have a history of selling the deliverable on a stand-alone basis or third-party evidence of selling price. We do not believe that the adoption of this guidance will significantly change the timing in which revenue is recorded as the pricing of our service components are included in the per unit price of the products delivered to the customer, which is solely contingent on the number of units sold. As a result, the revenue earned on the service element does not become fixed or determinable until delivery of the product has taken place.

        In June 2009, the FASB issued guidance to revise the approach to determine when a variable interest entity, or VIE, should be consolidated. The new consolidation model for VIEs considers whether we have the power to direct the activities that most significantly impact the VIEs' economic performance and shares in the significant risks and rewards of the entity. The guidance on VIEs requires companies to continually reassess VIEs to determine if consolidation is appropriate and provide additional disclosures. We adopted the provisions of this VIE guidance at the beginning of fiscal year 2011, and the adoption did not have a material impact on our financial statements.

Quantitative and Qualitative Disclosures about Market Risk

        Our exposure to market risk consists of foreign currency exchange rate fluctuations, changes in interest rates and fluctuations in fuel prices.

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    Foreign Currency Exposure

    Currency translation

        During the year ended September 30, 2010 and the six months ended March 31, 2011, approximately 15% and 17%, respectively, of our net sales were made by our foreign subsidiaries, and our total non-U.S. net sales represented approximately 26% and 29%, respectively, of our total net sales. As a result of these international operating activities, we are exposed to risks associated with changes in foreign exchange rates, principally exchange rates between the U.S. dollar, British pound and the Euro.

        The results of operations of our foreign subsidiaries are translated into U.S. dollars at the average exchange rate for each relevant period. This translation has no impact on our cash flow. However, as foreign exchange rates change, there are changes to the U.S. dollar equivalent of sales and expenses denominated in foreign currencies. Any adjustments resulting from the translation are recorded in accumulated other comprehensive income on our statements of changes in stockholders' equity. We do not consider the risk associated with exchange rate fluctuations to be material to our financial condition or results of operations.

        A hypothetical 5% increase in the value of the British pound and the Euro relative to the U.S. dollar would have resulted in an increase in our net income of approximately $0.3 million and less than $0.1 million, respectively, during fiscal 2010 and $0.2 million and less than $0.1 million, respectively, during the six months ended March 31, 2011. A corresponding decrease would have resulted in a decrease in our net income of approximately $0.3 million and less than $0.1 million, respectively, during fiscal 2010 and $0.2 million and less than $0.1 million, respectively, during the six months ended March 31, 2011.

    Currency transactions

        Currency transaction exposure arises where actual sales and purchases are made by a company in a currency other than its own functional currency. During the year ended September 30, 2010, our subsidiary in the United Kingdom had sales in U.S. dollars and Euros of approximately $66.0 million and €8.2 million, respectively, and had purchases in U.S dollars and Euros of approximately $47.9 million and €8.7 million, respectively. During the six months ended March 31, 2011, our subsidiary in the United Kingdom had sales in U.S. dollars and Euros of approximately $40.8 million and €4.6 million, respectively, and had purchases in U.S. dollars and Euros of approximately $33.5 million and €7.1 million, respectively. To the extent possible, we structure arrangements where the purchase transactions are denominated in U.S. dollars in order to minimize near-term exposure to foreign currency fluctuations.

        From September 30, 2008 to September 30, 2009, the average value of the U.S. dollar strengthened against the British pound by $0.42 (from $1.97 to $1.55). From September 30, 2009 to September 30, 2010, the British pound stabilized against the dollar. From September 30, 2010 through March 31, 2011, the pound strengthened slightly against the dollar by $0.04 (from $1.55 to $1.59). A strengthening of the U.S. dollar means we realize a lesser amount of U.S. dollar revenue on sales that were denominated in British pounds. In fiscal 2009, the strengthening of the U.S. dollar relative to the British pound resulted in a negative impact of approximately $22.1 million in net sales as compared to the exchange rate during fiscal 2008 and resulted in a decrease of approximately $2.9 million in our net income in fiscal 2009. As a result of the stabilization of the value of the British pound against the U.S. dollar during fiscal 2010 and the slight weakening of the U.S. dollar during the six months ended March 31, 2011, currency transactions did not have a material impact on our financial results during those periods. A hypothetical 5% increase in the value of the British pound relative to the U.S. dollar would have resulted in an increase in our net income of approximately $0.3 million and $0.2 million during fiscal 2010 and the six months ended March 31, 2011, respectively, attributable to our foreign

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currency transactions. A corresponding decrease would have resulted in a decrease in our net income of approximately $0.3 million and $0.2 million during fiscal 2010 and the six months ended March 31, 2011, respectively.

        We have historically entered into currency forward and option contracts to limit exposure to currency rate changes and will continue to monitor our transaction exposure to currency rate changes. Gains and losses on these contracts are deferred until the transaction being hedged is finalized. As of March 31, 2011, we had no outstanding currency forward and option contracts.

    Interest Rate Risk

        Our principal interest rate exposure relates to the new senior secured credit facilities, which bear interest at a variable rate. See "—Liquidity and Capital Resources—Senior Secured Credit FacilitiesNew Senior Secured Credit Facilities." If there is a rise in interest rates, our debt service obligations on the borrowings under the new senior secured credit facilities would increase even though the amount borrowed remained the same, which would affect our results of operations, financial condition and liquidity. At our debt level and borrowing rates as of April 7, 2011, the closing date of the new senior secured credit facilities, annual cash interest expense, including fees under our new revolving facility, would have been approximately $24.4 million. If variable interest rates were to change by 1.0%, our interest expense would fluctuate approximately $6.2 million per year, without taking into account the effect of any hedging instruments or the minimum LIBOR requirement.

        We periodically enter into interest rate swap agreements to manage interest rate risk on our borrowing activities. Upon the maturity of our previous interest rate swap agreements, we entered into two interest rate swap agreements that expire in February and June 2012, respectively, which we refer to collectively as the Swaps. Each Swap converts the interest rate on approximately $200.0 million (notional amount) of our outstanding indebtedness from variable rates to a fixed interest rate. During the year ended September 30, 2010 and the six months ended March 31, 2011, we recorded a loss in the amount of approximately $2.6 million and a gain in the amount of $2.9 million, respectively, as a result of changes in fair value of derivative financial instruments. These gains and losses are recorded as a component of interest expense.

        We do not hold or issue derivative financial instruments for trading or speculative purposes.

    Fuel Price Risk

        Our principal direct exposure to increases in fuel prices is as a result of potential increased freight costs caused by fuel surcharges or other fuel cost-driven price increases implemented by the third-party package delivery companies on which we rely. We estimate that our annual freight costs are approximately $2.5 million, and, as a result, we do not believe the impact of these potential fuel surcharges or fuel cost-driven price increases would have a material impact on our business, financial condition and results of operations. In addition, increases in fuel prices may have an indirect material adverse effect on our business, financial condition and results of operations, as such increases may contribute to decreased airline profitability and, as a result, decreased demand for new commercial aircraft that utilize the products we sell. See "Risk Factors—We may be materially adversely affected by high fuel prices." We do not use derivatives to manage our exposure to fuel prices.

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INDUSTRY OVERVIEW

        According to Stax, the global market for C class aerospace parts, which includes hardware, bearings, electronic components and machined parts for both commercial and military customers, was approximately $6.5 billion in 2010. This market is generally segmented by end customer or sales channel. On a customer basis, OEMs and their subcontractors, which we refer to collectively as the OEM market, accounted for approximately $4.5 billion of sales and the remaining approximately $2.0 billion of sales was made to airlines and aftermarket MRO providers. On a sales channel basis, approximately $4.2 billion of all C class aerospace parts flow through distributors and approximately $2.2 billion of sales are made directly to end customers. The following charts provide additional information on the breakdown of the C class aerospace parts market as of 2010.

GRAPHIC


Source: Stax.

We believe that the key trends and drivers of growth in the aerospace parts distribution market include:

    Increased Demand for New Aircraft Production

        The OEM market for C class aerospace parts in 2010 was approximately $4.5 billion according to Stax, with approximately $2.7 billion of this total relating to sales of commercial aircraft and business jets. According to Airline Monitor, the global commercial aircraft fleet has grown approximately 4.5% per year over the last 20 years, exceeding global GDP growth of 3% per year over the same period. RPMs, a key measure of airline passenger volumes, grew approximately 5.5% in 2010 after having grown at a CAGR of 4.7% from 1990 to 2010. RPMs are expected to grow at a CAGR of 5.6% from 2010 to 2030, due to the economic recovery in developed economies, continued growth in emerging markets, particularly in the Asia-Pacific region, and the secular trend towards increased air travel globally. Increased passenger traffic volumes and the return to profitability of the global airline industry have renewed demand for commercial aircraft, particularly for more fuel efficient models such as the Boeing 787 and Airbus A350. According to Airline Monitor, annual deliveries of the Boeing 787 are projected to increase from 20 in 2011 to over 100 by 2014, and Airbus expects A350 deliveries to commence in 2013. Airline Monitor forecasts that overall commercial aircraft deliveries will grow at a CAGR of 4.5% over the next ten years. It further estimates that the commercial aircraft order backlog has grown at a CAGR of 8.2% since 2000 to approximately 8,100 planes as of December 31, 2010, which represents over five years of projected commercial aircraft deliveries. According to the General Aviation Manufacturers Association, business jet deliveries, which are generally correlated with market indicators, including the earnings and price performance of the S&P 500, suffered a 23% decline on average from 2008 to 2010. According to the FAA, however, business jet activity increased by over 11% in 2010. We also expect commercial aircraft production to be supplemented by increases in business and regional jet deliveries.

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        According to Stax, the market for military C class aerospace parts was approximately $1.8 billion in 2010. Future military aerospace OEM demand is expected to be driven by increases in the production of the Lockheed Martin JSF. The JSF is a next-generation fighter that is designed for the U.S. Navy, Marines and Air Force, along with key U.S. allies such as the United Kingdom, Italy and The Netherlands. According to Forecast International, production of the JSF is expected to increase from 20 in 2011 to 98 by 2016.

    Increased Demand from the MRO Market

        According to Stax, the combined commercial and military MRO market represented approximately $2.0 billion of the total C class aerospace parts market in 2010. We expect commercial MRO providers to benefit from the same trends as those impacting the commercial OEM market, including increased RPMs, which will in turn drive growth in the commercial fleet and greater utilization of existing aircraft. According to Boeing, RPM growth is forecasted to be particularly strong in the Asia Pacific and Middle East regions, with annual growth projected to be 7.6% in China, 7.4% in South Asia, including India, and 7.1% in the Middle East from 2010 to 2019. The commercial MRO market may also benefit from directives or notifications announced by international industry regulators and trade associations. Such directives or notifications can serve to bolster required maintenance, and thus the demand for new and existing C class aerospace parts. We expect demand in the military MRO market to be driven by requirements to maintain aging military fleets, changes in the overall fleet size and the level of U.S. military activity overseas.

    Industry Consolidation

        We are one of the top two aerospace distribution companies by sales and, together with our largest competitor, accounted for approximately $1.4 billion, or 22%, of the approximately $6.5 billion C class aerospace parts market in 2010, of which approximately $656.0 million, or 10%, was attributable to us. The remainder of the market is highly fragmented, which creates significant opportunities for further consolidation. Several benefits typically accrue to distributors through consolidation, including efficiencies in leveraging costs over a larger revenue base, increased customer penetration facilitated by a larger product offering and a reduction in purchasing costs driven by larger volume-based discounts. We expect these benefits to support further consolidation in the industry.

    Globalization

        The manufacture of aircraft and aircraft structures is becoming more globalized, as nations such as China, India and the UAE invest heavily to develop their aerospace industries. In addition, many U.S. and European OEMs continue to expand their operations in international markets in order to benefit from labor cost savings as local businesses seek to partner with established global companies. These OEMs and subcontractors expect to receive the same quality parts and services in new markets that they receive in their home markets. We believe that these quality and service expectations and the overall growth rates in international aerospace markets present significant opportunities for supply chain managers such as Wesco.

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BUSINESS

Company Overview

        We are one of the world's largest distributors and providers of comprehensive supply chain management services to the global aerospace industry on an annual sales basis. Our services range from traditional distribution to the management of supplier relationships, quality assurance, kitting, JIT delivery and point-of-use inventory management. We supply approximately 450,000 different SKUs, including hardware, bearings, tools and more recently, electronic components and machined parts. In fiscal 2010, sales of hardware represented 80% of our net sales, with highly engineered fasteners constituting 83% of that amount. We serve our customers under three types of arrangements: JIT contracts, which govern comprehensive outsourced supply chain management services; LTAs, which set prices for specific parts; and ad hoc sales. JIT contracts and LTAs, which together comprised approximately 63% of our fiscal 2010 net sales, are multi-year arrangements that provide us with significant visibility into our future sales.

        Founded in 1953 by the father of our current CEO, Wesco has grown to serve over 7,200 customers in the commercial, military and general aviation sectors, including the leading OEMs and their subcontractors, through which we support nearly all major Western aircraft programs. We have grown our net sales at a 13.4% CAGR over the past 20 years to $656.0 million in fiscal 2010. We serve a large and growing global market, and believe that with more than 1,000 employees across 28 locations in 10 countries, we are well positioned to continue our track record of strong long-term growth and profitability. The following charts illustrate the composition of our 2010 net sales based on our sales data or management estimates.

GRAPHIC

        We have invested in building an integrated, highly customized IT system that enables our purchasing and sales organization to make more informed decisions and our inventory management system to operate at maximum efficiency. Specifically, our customized IT system provides us visibility into inventory quantities, stocking locations and purchases across our customer base by individual SKU, enabling us to accurately fill approximately 8,000 orders per day and provide an exceptional level of customer service. The scalable nature of our IT system helps us improve productivity and financial performance as sales volume increases. We believe our customized IT system is a key competitive advantage and critical element in our unique business model that creates significant value for our customers and our suppliers.

        We believe that our success has been driven by our focus on customer service and our ability to offer tailored solutions to our customers. We believe customers that utilize our comprehensive JIT supply chain management services are frequently able to realize significant benefits including:

    reduced inventory levels and inventory excess and obsolescence expense, in part because such customers only purchase what they need, as well as more efficient use of floor space;

    increased accuracy in forecasting and planning, resulting in substantially improved on-time delivery, reduced expediting costs and fewer disruptions of production schedules;

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    improved quality assurance resulting in a substantial reduction in customer parts rejection rates; and

    reduced administrative and overhead costs relating to procurement, quality assurance, supplier management and stocking functions.

        Our customers also benefit from the strong relationships we maintain with a diverse group of over 1,100 suppliers. We believe these suppliers in turn derive several benefits from our scale, global reach and unique business model, including:

    access to over 7,200 customer accounts;

    larger production runs that facilitate more efficient manufacturing processes;

    a reduction of inventory levels and related obsolescence costs;

    improved performance in meeting on-time-delivery targets to end customers; and

    consolidation of customer accounts, resulting in a reduction in administrative and overhead costs relating to sales and marketing, customer service and other functions.

We believe we are well positioned to continue our track record of strong growth by partnering with our suppliers to provide a compelling combination of value-added services to our customers.

Competitive Strengths

        We believe that our key competitive strengths include the following:

        Leader in Attractive Global Market.    We are one of the world's largest distributors and providers of comprehensive supply chain management services to the global aerospace industry on an annual sales basis. We believe we offer the world's broadest inventory of aerospace parts comprised of approximately 450,000 SKUs. In addition, we fill approximately 8,000 orders per work day and manage approximately 350,000 stocking bins throughout our customers' facilities. Stax estimates the market for the C class aerospace parts we offer at approximately $6.5 billion on an annual basis, and we expect that it will continue to grow, driven by a broad-based recovery in the delivery of new aircraft. This market is fragmented, and we estimate that we and our top competitor together account for approximately 22% of the market, with the balance served by smaller regional or local distributors, or directly by the parts manufacturers. We believe that the scale of our global distribution network, our value-added services and the depth, breadth and dollar investment in our inventory provide us with a significant competitive advantage in an attractive market.

        Compelling Value Proposition.    We offer a compelling value proposition to our customers by combining access to what we believe to be the world's broadest inventory of aerospace parts with our unique capabilities in comprehensive supply chain management. Our services can significantly improve on-time-delivery performance, enabling our customers to reduce their inventory while at the same time decreasing the frequency of production interruptions caused by part shortages. Due to the high levels of precision and engineering standards in the aerospace industry, our customers must ensure the highest levels of quality assurance. Many of our customers have chosen to outsource these critical quality assurance functions to us, relying on our rigorous inspection processes. Aerospace companies that do not outsource to a supply chain manager like Wesco can incur significant additional overhead and administrative costs relating to internal procurement, quality assurance, inventory stocking and other related personnel.

        Diverse Customer and Program Base.    We maintain strong relationships with over 7,200 active customers including major OEMs such as Airbus, Boeing, Bombardier, Embraer, Cessna, Gulfstream, BAE Systems, Bell Helicopter, Lockheed Martin, Northrop Grumman and Raytheon. We supply

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products to nearly every major Western aircraft in production, including the B-787, B-737, B-747, A-320, JSF and V-22. During fiscal 2010, no single customer or aircraft program represented more than 15% of our net sales. We have actively worked to transition our largest customers from ad hoc purchases to multi-year LTAs or comprehensive JIT supply chain management agreements, the latter two of which together represented approximately 63% of our fiscal 2010 net sales. By developing strong, long-term relationships with a diverse set of customers, we have significant visibility into our future sales.

        Superior Purchasing Capabilities and Supplier Relationships.    Our management is highly skilled in analyzing supply, demand, cost and pricing factors in order to make optimal inventory investment decisions, and we maintain close relationships with the leading suppliers in the industry. In particular, Precision Castparts and Alcoa Fastening Systems supplied approximately 22% and 20%, respectively, of the products we purchased during fiscal 2010. Our top 10 suppliers have been doing business with us for an average of more than 10 years. We believe that our business model allows our suppliers to smooth out production, improve their cash flow and reduce administrative cost. As a result of our scale and the strength of our relationships, many of our suppliers offer us attractive volume-based price discounts. Our success in making optimal inventory purchasing decisions is driven by our management's deep understanding of our industry and their skill in analyzing fundamental supply, demand, cost and pricing data. These decisions are facilitated by our highly customized IT system. Our superior inventory purchasing capabilities and the strength of our supplier relationships have contributed substantially to what we believe are our industry-leading operating margins.

        Experienced Management Team with Significant Equity Ownership.    Our management team has extensive industry experience and company tenure. Our Chief Executive Officer and other executive officers have an average of more than 20 years of experience with us and more than 30 years in our industry. In addition, our executive officers will own approximately 12.3% of the common stock of the Company following this offering. We believe that this significant equity ownership aligns the interests of our executive officers with our stockholders.

Our Strategy for Continued Growth

        We intend to pursue the following strategies in order to continue to grow our business:

        Continued Focus on Operational Excellence.    We have built strong relationships with our existing customers and suppliers through a relentless focus on operational excellence and improvement. We intend to continue providing our customers with best-in-class on-time delivery performance and quality assurance. We also intend to continue investing in our integrated, highly customized IT system and process automation technology. We believe that by focusing on operational excellence, we will be able to maintain high customer satisfaction and industry-leading operating margins.

        Win New Business from Existing Customers.    We will continue our strategy of expanding our relationships with existing customers by transitioning them to our comprehensive JIT supply chain management services as well as expanding our programs to include additional customer sites and SKUs. We are a key partner supplying fasteners and other C class parts to support the launch of new aircraft programs, such as the Boeing 787 and Lockheed Martin JSF. We will continue to support our customers in the launch of new aircraft programs by introducing new supply chain solutions that minimize costs, improve productivity, lower inventory investment and ensure a seamless supply of parts for new production and aftermarket support.

        Expand Customer Base.    We believe that our services and capabilities are attractive to potential new customers and plan to expand our customer base. We have had significant success in winning business when competing distributors have been unable to meet customer service level requirements and in situations where customers have outsourced work that was previously performed internally.

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Historically, we have focused our activities on the major OEMs and their subcontractors and less on airlines and airline maintenance organizations due to their tendency to order parts in smaller quantities with greater frequency, which makes them more costly to serve. We are in the process of adding a significant number of SKUs to an airline industry automated quoting system that we believe will provide us with a cost-effective way to penetrate this commercial MRO market that Stax estimates is approximately $950 million in size.

        Further Expand into International Markets.    We have recently established a presence in international locations such as China, India and Saudi Arabia, and we intend to expand into other high growth regions such as Mexico to support new and existing customers. Our international expansion efforts will enable us to better reach new customers and more effectively serve our existing customer base as the manufacture of aircraft and aircraft structures continues to become more globalized. We believe that we mitigate many of the risks associated with international expansion by entering into customer contracts before we establish a new stocking facility. Our international expansion efforts will enable us to better reach new customers and more effectively serve our existing customer base as the manufacture of aircraft and aircraft structures continues to become more globalized.

        Selectively Pursue Strategic Acquisitions.    Our industry is highly fragmented and we believe that there are opportunities for continued consolidation. In 2008, we acquired Airtechnics, which enabled us to expand our product offering to include electronic components, as well as gain additional customers. We believe that we are well positioned to expand our product offering and geographical footprint through strategic acquisitions. Consistent with this strategy, we continue to evaluate potential acquisition opportunities.

Our Products and Services

    Our Products

        We offer more than 450,000 different SKUs, consisting of C class aerospace hardware, bearings, electronic components and machined parts, which are generally priced below $350 per part. Stax estimates that C class parts typically contribute approximately 3.0% of the total cost of a large commercial aircraft. Many of the products we sell are highly engineered, precision parts that are specified for use in particular aircraft programs.

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        Our product categories include the following:

 
 
   
   
  Hardware
   
  Bearings
   
  Electronic
Components

   
  Machined Parts
and Other

   

  

  % of Total Market for C Class Aerospace Parts*       46%       26%       16%       12%    

  

  Wesco Fiscal 2010 Net Product Sales (in millions)       $527       $42       $70       $17    

  

  % of Wesco Fiscal 2010 Net Product Sales       80%       7%       11%       2%    

  

  Types of Products Offered      

•       Blind fasteners

•       Panel fasteners

•       Bolts and screws

•       Clamps

•       Hi lok pins and collars

•       Hose assemblies

•       Hydraulic fittings

•       Inserts

•       Lockbolts and collars

•       Nuts

•       Rivets

•       Springs

•       Valves

•       Washers

     

•       Airframe control bearings

•       Rod ends

•       Spherical bearings

•       Ball bearing rod ends

•       Roller bearings

•       Bushings
  
  
  
  
  
  
    

     

•       Connectors

•       Relays

•       Switches

•       Circuit breakers

•       Lighted products
  
  
  
  
  
  
    

     

•       Brackets

•       Milled parts

•       Shims

•       Stampings

•       Turned parts

•       Welded assemblies

•       Installation tooling
 
 
 
 
 
 
    

   

*    Source: Stax.

                                   

    Hardware

        Sales of C class aerospace hardware represented approximately 80% of our fiscal 2010 product sales. Fasteners are our largest product category, comprising approximately 83% of our hardware sales in fiscal 2010. Fasteners include a wide range of highly engineered aerospace parts that are designed to hold together two or more components, such as rivets (both blind and solid), bolts (including blind bolts), screws, nuts and washers. Many of these fasteners are designed for use in specific aircraft platforms and others can be used across multiple platforms. Materials used in the manufacture of these fasteners range from standard alloys, such as aluminum, steel or stainless steel, to more advanced materials, such as titanium, Inconel and Waspalloy.

    Bearings

        We began to offer aerospace bearings after acquiring the bearing distribution business of Kaman Industrial Technologies in 1999, which enabled us to support new customers and expand our product offering. Our product offering includes a variety of standard anti-friction products designed to both commercial and military aircraft specifications, such as airframe control bearings, rod ends, spherical bearings, ball bearing rod ends, roller bearings and bushings.

    Electronic Components

        In 2008, we acquired Wichita, Kansas-based Airtechnics, one of the largest distributors of aerospace electronic components in North America, which helped expand our product offering to our customer base. We offer highly reliable interconnect and electro-mechanical products, including connectors, relays, switches, circuit breakers and lighted products. We also offer value-added assembled products including mil-circular and rack and panel connectors and illuminated push button switches. We maintain large quantities of connector components in inventory, which allows us to respond quickly to customer orders. In addition, our lighted switch assembly operation affords customers same day service, including engraving capabilities in multiple languages.

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    Machined Parts and Other

        Machined parts are designed for a specific customer and are assigned unique OEM-specific SKUs. The machined parts we distribute include laser cut or stamped brackets, milled parts, shims, stampings, turned parts and welded assemblies made of materials ranging from high-grade steel or titanium to nickel based alloys.

        We stock a full range of tools needed for the installation of our products, including air and hydraulic tools as well as drill motors, and we also offer factory authorized maintenance and repair services for these tools. In addition to selling these tools, we also rent or lease these tools to our customers.

    Our Services

        In addition to our traditional distribution services, we have developed innovative value-added services, such as quality assurance, kitting and JIT supply chain management for our customers.

    Quality Assurance

        Our quality assurance, or QA, function is a key component of our service offering, with approximately 10% of our employees dedicated to this area. We believe we offer an industry-leading QA function as a result of our rigorous processes, sophisticated testing equipment and dedicated QA staff, and as evidenced by a comparison of our customers' aggregate rejection rate of the products we deliver, which was approximately 0.3% during fiscal 2010, to our rejection rate of the products we receive from our suppliers, which was approximately 3.2% during fiscal 2010.

        Our QA department inspects the inventory we purchase to ensure the accuracy and completeness of documentation. We also maintain an electronic copy of the relevant certifications for the inventory, which can include a manufacturer certificate of conformance, test reports, process certifications, material distributor certifications and raw material mill certifications. In addition, dimensional inspections are performed on all lots from suppliers that are not certified by our QA department, and all lots for our JIT customers undergo dimensional, and in some cases, structural inspections. For many of our customers, these inspections are conducted at our in-house laboratory, where we operate sophisticated testing equipment. Our industry-leading QA capabilities also allow our JIT customers to reduce the number of personnel dedicated to the QA function and reduce the delays caused by the rejection of improperly inspected parts.

    Kitting

        Kitting involves the packaging of an entire bill of materials or a complete "ship-set" of parts, which reduces the amount of time workers spend retrieving parts from storage locations. Kits can be customized in varying configurations and sizes and can contain up to several hundred different parts. All of our kits and components contain fully certified and traceable parts and are assembled by our full-service kitting department at our central stocking locations, or CSLs, or at our customer sites.

    JIT Supply Chain Management

        JIT supply chain management involves the delivery of parts on an as-needed basis to the point-of-use at a customer's manufacturing line. JIT programs are designed to prevent excess inventory build-up and shortages and improve manufacturing efficiency. Each JIT contract requires us to maintain an efficient inventory tracking, analysis and replenishment program and is designed to provide high levels of stock availability and on-time delivery. We began offering JIT supply chain management services in 1993 as some OEMs began outsourcing certain support functions in an effort to cut costs at a time when defense spending was declining and the commercial aerospace industry was entering a

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cyclical downturn. Since that time, the popularity of our JIT programs has grown and we now support over 125 customer locations, including approximately 350,000 bins serviced worldwide. During fiscal 2010, our on-time delivery rate for JIT customers was over 99%. We believe customers that utilize our comprehensive JIT supply chain management services are frequently able to realize significant benefits including:

    reduced inventory levels, inventory excess and obsolescence expense, in part because such customers only purchase what they need, and more efficient use of floor space;

    increased accuracy in forecasting and planning, resulting in substantially improved on-time delivery, reduced expediting costs and fewer disruptions of production schedules;

    improved quality assurance resulting in a substantial reduction in customer parts rejection rates; and

    reduced administrative and overhead costs relating to procurement, QA, supplier management and stocking functions.

        Before signing a JIT contract, our customers typically experience outages of many SKUs and, in some cases, have up to a year's worth of inventory on hand. As part of our JIT programs, we generally assume the customer's existing inventory at the onset of the contract, immediately reducing their inventory on-hand and the associated management costs. Customer inventory is generally assumed on a consignment basis and is entered in our database in a distinct customer-specific "virtual warehouse." Software protocol in our IT system requires the system to first "look" to a customer's consigned inventory when parts replenishment is required. In many cases, we can sell this consigned inventory to our base of 7,200 active customers around the world, gradually drawing down the customer's inventory. As the consigned inventory for each SKU is exhausted, our stock of Wesco-sourced product is then used for replenishment. Due to the reliable nature of our services, our customers typically carry approximately 45 days worth of inventory in point-of-use bins instead of months or years worth of such products.

        Another key strength of our JIT program is our ability to utilize highly scalable and customizable point-of-use systems to develop an efficient supply chain management system and automated replenishment solution for any number of SKUs. In order to minimize inventory on hand, certain indicators are used to trigger the replenishment of product from a supplying location to the location of consumption. Our "Twin-Bin" system is an example of such an indicator. A JIT program designed around a Twin-Bin system utilizes a specially manufactured unit composed of two bins stacked on top of one another. In this system, a clear plastic bag, typically containing a 30-day supply of parts, is loaded in each bin. Production workers use all of the parts within the bottom bin before drawing a pullout slide between the two bins that drops the full plastic bag of parts from the top bin into the bottom bin. An empty top bin indicates the need to initiate replenishment of the parts and provides a clear visual management process on the manufacturing floor. All replenishment activity is done via hand-held scanners that transmit orders to our stocking locations.

Customer Contracts

        We sell parts to our customers under three types of arrangements: JIT supply chain management contracts, LTAs and ad hoc sales.

    JIT Contracts

        JIT contracts are typically three to five years in length and are structured to supply the parts requirement for specific SKUs, production lines or facilities. Given our direct involvement with JIT customers, volume requirements and purchasing frequency under these contracts is highly predictable. Under JIT contracts, customers commit to purchase specified parts from us at a fixed

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price, on an if-and-when needed basis, and we are responsible for maintaining high levels of stock availability of those parts. JIT contracts typically contain termination for convenience provisions, which generally allow our customers to terminate their contracts on short notice without meaningful penalties, provided that we are reimbursed for the cost of any inventory specifically procured for the customer. JIT customers also often purchase parts from us that are not captured under their contracts on an ad hoc basis. Approximately 31% of our net sales during fiscal 2010 were generated from JIT contracts.

    Long-Term Agreements

        Like JIT contracts, LTAs also typically run for three to five years. LTAs are essentially negotiated price lists for customers or individual customer sites that cover a range of pre-determined parts, purchased on an as-needed basis. The negotiated prices are typically tiered based on order size. LTAs generally obligate the customer to buy contracted SKUs from us and may obligate us to maintain stock availability for those parts. Once an LTA is in place, the customer is then able to place individual purchase orders with us for any of the contractually specified parts. LTAs typically contain termination for convenience provisions, which generally allow for our customers to terminate their contracts on short notice without meaningful penalties, provided that we are reimbursed for the cost of any inventory specifically procured for the customer. LTA customers also frequently purchase parts from us that are not captured under the pricing arrangement on an ad hoc basis. Approximately 32% of our net sales during fiscal 2010 were derived from our LTAs.

    Ad Hoc Sales

        Ad hoc customers purchase parts from us on an as-needed basis and are generally supplied out of our existing inventory. Typically, ad hoc orders are for smaller quantities of parts than those ordered under either JIT contracts or LTAs, and are often urgent in nature. Given our breadth and volume of inventory, it is not uncommon for our competitors to purchase parts from us on an ad hoc basis. In an environment of increasing aircraft production, parts shortages can become increasingly common for OEMs, subcontractors, MROs and distributors with less sophisticated forecasting abilities and procurement organizations. Approximately 37% of our net sales during fiscal 2010 were generated from ad hoc sales.

        Under each of the sales arrangements described above we typically warrant that the products we sell conform to the drawings and specifications that are in effect at the time of delivery in the applicable contract, and that we will replace defective or non-conforming products for a period of time that varies from contract to contract. The product manufacturer, in turn, typically indemnifies us for liabilities resulting from defective or non-conforming products. We do not accrue for warranty expenses as our claims related to defective and non-conforming products have been nominal to date.

        We believe that backlog is not a relevant measure of our business, given the long-term nature of our JIT contracts and LTAs with our customers.

Customers

        We sell to over 7,200 active customers worldwide. Boeing was our largest customer during fiscal 2010 and accounted for approximately 15% of our net sales. No other customer accounted for more than 10% of our net sales during fiscal 2010, and only three customers accounted for over 5% of our net sales during the same period, with each consisting of multiple independent programs. Our top 10 customers collectively accounted for 48% of our net sales during fiscal 2010.

        Approximately 87% of our fiscal 2010 net sales were derived from major OEMs, such as Airbus, Boeing, Bombardier, Embraer, Cessna, Gulfstream, BAE Systems, Bell Helicopter, Lockheed Martin, Northrop Grumman and Raytheon, and certain of their subcontractors. Government sales comprised roughly 5% of our net sales during fiscal 2010 and were derived from various military parts

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procurement agencies such as the U.S. Defense Logistics Agency, or from defense contractors buying on their behalf. Aftermarket sales to airline-affiliated or independent MROs made up roughly 2% of our fiscal 2010 net sales. Airlines and airline maintenance organizations traditionally order parts in smaller quantities with greater frequency, making them more costly to serve. However, we are in the process adding a significant number of products to an airline industry automated quoting system that we believe will provide us with a cost-effective way to penetrate this commercial MRO market. We are currently targeting international airlines and aircraft maintenance centers that are assuming an expanded role within the MRO market. The balance of our net sales are to other distributors.

        We estimate that during fiscal 2010, approximately 53% of our net sales were derived from customers supporting military programs and approximately 47% of our net sales were derived from customers supporting commercial programs. Our customers are principally located in the United States, comprising approximately 74% of our net sales during fiscal 2010. We also service international customers in markets that include Canada, the United Kingdom, Italy, France, Germany, China, South Korea and Australia.

Suppliers

        We source our inventory from over 1,100 suppliers, including Precision Castparts, Alcoa Fastening Systems, Amphenol Corporation, Lisi Aerospace and Monogram Aerospace Fasteners. During fiscal 2010, we purchased approximately 42% of our inventory from Precision Castparts and Alcoa Fastening Systems. Suppliers typically prefer to deal with a relatively small number of large and sophisticated distributors in order to improve machine utilization, reduce finished goods inventory and maintain pricing discipline. As a result of the scale of our operations and our long-standing relationships with many of our suppliers, we are often able to take advantage of significant volume-based discounts when purchasing inventory. Given our industry position, financial strength and philosophy of cooperation with suppliers, we believe we are in an excellent position to become a distributor for new product lines as they become available.

Procurement

        We consider our procurement expertise to be one of our principal competitive advantages. Our management is highly skilled in analyzing supply, demand, cost and pricing factors to make optimal inventory investment decisions and we maintain close relationships with the leading suppliers in the industry. In particular, Precision Castparts and Alcoa Fastening Systems supplied approximately 22% and 20%, respectively, of the products we purchased during fiscal 2010. Our strong understanding of the global aerospace industry is derived from our long-term relationships with major OEMs, subcontractors and suppliers. In addition, our direct insight into our customers' production rates often allows us to detect industry trends. Furthermore, our ability to forecast demand and place purchase orders with our suppliers well in advance of our customer requirements provides us with a distinct advantage in an industry where inventory availability is critical for customers that need specific parts within a stipulated timeframe to meet their own production and delivery commitments.

        We have created a structured procurement process that focuses on return on invested capital, or ROIC, and minimization of excess inventory, which helps us maintain what we believe are our industry-leading operating margins and parts availability. Prior to placing a purchase order, members of our supply chain organization analyze a "buy requisition," which is generated by our IT system. Buy requisitions provide several key pieces of information, including the amount of that SKU currently on-hand, a listing of all active customers that use the specific SKU, the quantities and rates at which the part has been consumed by these customers in the past, tiered pricing for various quantities at which the supplier offers price breaks and recent selling prices of various order sizes. Using the information obtained from the buy requisition, a Wesco employee then conducts an ROIC analysis to determine the expected payback period and margin on the specified inventory investment before

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making the final procurement decision. This calculated approach to inventory investment, combined with our unique market insight, has enabled us to generate and sustain industry-leading operating margins.

Operations

        We have developed a highly structured system in order to manage the receipt, processing and shipment of inventory. This system is based on an efficient warehouse layout, automated machinery, our customized IT system and hand-held scanners. The typical process that each lot of inventory undergoes is outlined below.

GRAPHIC

    CSLs and FSLs

        Our warehouse operations are divided between CSLs and forward stocking locations, or FSLs. Our primary CSL is located at our global headquarters in Valencia, California. We also operate a CSL in Wichita, Kansas, which primarily serves our global EPG business, and a CSL in Clayton West, U.K., which primarily serves Europe, India and the Middle East. Our CSLs serve as the primary supply warehouses for most of our net sales and also house our procurement, customer service, document control, IT, material support and quality assurance functions. Our CSLs are supported by sales offices throughout the U.S., Canada, Germany, France, Italy and China.

        Complementing our CSLs and sales offices are FSLs. An FSL is a specialized stocking point for one or more JIT contracts located within a geographic region. FSLs are typically located either nearby or within a customer facility and are established to support large contracts. In certain instances, FSLs initially established to service a single customer are expanded to service other regional customers.

    Receiving

        All inventory enters our warehouses through a common receiving area. When shipments are received, each package is opened and the documentation is examined. If the documentation is missing or deficient, the shipment is either returned to the supplier or set aside in a designated holding area until accurate documentation is received. If the documentation is acceptable, a Wesco employee inputs the relevant information into our inventory management system, including the SKU, lot number, receipt date, quantity and unit cost.

    Quality Assurance

        After a shipment has gone through receiving, it is then processed by the QA department. This department inspects the inventory we purchase to ensure the accuracy and completeness of documentation. We also maintain an electronic copy of the relevant certifications for the inventory, which can include a manufacturer certificate of conformance, test reports, process certifications, material distributor certifications and raw material mill certifications. In addition, dimensional inspections are performed on all lots from suppliers that are not certified by our QA department, and

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all lots for our JIT customers undergo dimensional, and in some cases, structural inspections. For many of our customers, these inspections are conducted at our in-house laboratory, where we operate sophisticated testing equipment.

    Stocking

        Inventory that passes the quality assurance inspection is placed on a conveyor to a staging area, where warehouse employees assign stocking locations to the parts. Upon arrival at the designated stocking location, an employee scans the bar code affixed to the lot of inventory and the bar code corresponding to the specific shelf location where the lot is to be placed. This stocking information is then transmitted wirelessly to our inventory management system.

    Picking

        When we receive a purchase order from a customer, a notification is sent to the warehouse, where an employee uses a picker truck to retrieve the required part from its stocking location. Each picker truck is equipped with scales used to count the requested number of parts. Each different part type is then placed in a clear plastic bag and sealed. Labels are then generated using hand-held equipment and placed on the bags, and any required documentation is printed and placed along with the bags into color coded crates (crates are color coded based on order urgency so warehouse staff can effectively prioritize shipping requirements). The crates then travel on a conveyer system to the shipping area.

    Shipping

        Upon arriving in the shipping area, parts bags and related documentation are placed into boxes and sealed. The shipping clerk enters the order into a third-party shipping system, generating a label based on the shipping requirements for that customer (e.g., FedEx, UPS, DHL, etc.). Once processed, the system uploads tracking numbers and freight costs, if applicable, and can send an automatic notification to a customer that their order has shipped, or automatically send documentation via e-mail to a freight forwarder to prepare shipments for export. A variety of shipping options are available (same day, overnight, etc.) depending on customer requirements. The picking and shipping processes are organized such that, if necessary, we are able to ship product on the same day a purchase order is received in order to satisfy urgent customer requirements.

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Properties

        Our global headquarters is located at 27727 Avenue Scott, Valencia, California 91355. As of March 31, 2011, we have a total of 28 administrative, sales and/or stocking facilities located in 10 countries, all of which are either leased or located at a customer site. The following table sets forth certain information regarding these facilities:

Region
  Location   Purpose   Facility Size (Sq. Feet)

North America

  Valencia, CA (Wesco headquarters)   Sales, CSL and Administrative   150,428

  Wichita, KS (EPG headquarters)   Sales, CSL and Administrative   67,500

  Auburn, WA   Sales and FSL   9,370

  Charleston, SC   FSL   22,159

  Charleston, SC   FSL*   <500

  Fort Worth, TX   Sales and FSL   40,000

  Glen Cove, NY   Sales   3,700

  Holbrook, NY   Sales   1,050

  Indianapolis, IN   FSL   10,800

  Mesa, AZ   Sales   3,648

  Nashville, TN   FSL*   7,200

  Orlando, FL   Sales   4,636

  West Chester, PA   FSL   3,227

  St. Louis, MO   FSL   10,750

  Mississauga, Ontario   Sales   2,164

  Lachine, Quebec   Sales and FSL   31,037

Rest of the World

  Clayton West, UK   Sales, CSL and Administrative   36,577

  Filton, UK   FSL*   2,200

  Bremen, Germany   Sales   2,508

  Blagnac, France   Sales and FSL   4,746

  Marcon, Italy   Sales   1,865

  Grottaglie, Italy   FSL*   10,500

  Tessera, Italy   FSL*   1,076

  Holon, Israel   FSL   5,381

  Busan, South Korea   FSL*   <500

  Shanghai, China   Sales   1,222

  Xi'An, China   FSL*   1,500

  Ta'if, Saudi Arabia   FSL*   1,264

*
Located at customer site.

Information Technology System

        Our scalable IT infrastructure is based on IBM servers and the Oracle JD Edwards EnterpriseOne, or JDE, ERP system. Our IT system provides a powerful, highly distributed computing environment that enables us to quickly scale on demand as business dictates. We also employ virtualization technology to increase system availability, reduce hardware and maintenance costs and respond efficiently to market dynamics. Our entire data services infrastructure runs 24/7 and is protected by network security technologies, an uninterrupted power supply and a backup diesel generator. Remote access to our systems is provided via separate, high speed connections. Our IT infrastructure supports our business critical applications, such as JDE, TRA/X Shipping, AIMS Warehouse Management, or AIMS, and Electronic Data Interchange, or EDI.

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        At the core of our IT system is our JDE ERP system. JDE covers the full lifecycle of our distribution process, including procurement, planning, supply chain management, sales and accounting. JDE is fully capable of interfacing to external business systems and we have developed additional functionality within JDE for JIT delivery and direct line feed of the products we sell. This functionality includes recognition of signals and actions to fill customer bins from hand-held scanners, min/max data or proprietary signals from a customer's ERP system. JDE also supports our EDI functionality, which allows our system to interface with customers and suppliers, regardless of technology, data format or connectivity.

        For our shipping logistics and export compliance support, we employ Precision Software's TRA/X. TRA/X enables us to ship globally while maintaining tracking numbers and rating information for each customer shipment. In addition, at several of our distribution facilities, we use Minerva's AIMS inventory management system in order to provide the best possible warehouse flow and cycle times. AIMS is tailored to fit our global warehouse operational needs and allows us to provide an expandable warehouse management system that can also incorporate transaction processing, work-in-progress and other manufacturing operations. AIMS interfaces with a broad range of material handling equipment, including horizontal and vertical carousels, conveyors, sorting equipment, pick systems and cranes.

Competition

        The industry in which we operate is highly competitive and fragmented. We believe the principal competitive factors in our industry include the ability to provide superior customer service and support, on-time delivery, sufficient inventory availability, competitive pricing and an effective quality assurance program. Our competitors include both U.S. and foreign companies, including divisions of larger companies, some of which have significantly greater financial resources than we do, and therefore may be able to adapt more quickly to changes in customer requirements than we can. We estimate that Wesco and BE Aerospace together comprised approximately 22% of the $6.5 billion global market for C class aerospace parts during 2010, of which approximately $656.0 million, or 10%, was attributable to us. Our next largest competitors include the Pentacon business of Anixter International and the Pattonair business of Umeco.

        In addition to facing competition for JIT customers from our primary competitors, JIT customers or potential JIT customers may also determine that it is more cost effective to establish or re-establish an in-house supply chain management system. Under these circumstances, we may be unable to sufficiently reduce our costs in order to provide competitive pricing while also maintaining acceptable operating margins.

Sales and Marketing

        As of March 31, 2011, we employed 226 sales personnel with an average of over 8 years of experience at Wesco. Our sales professionals as of that date were located in the following regions: 167 in the U.S., 45 in Europe and 14 in Canada. Our marketing efforts are continuing to expand into emerging markets, including a recent office opening in India. We believe that maintaining both inside and outside sales representatives who are extremely facile in the technical details of the products we sell provides a substantial competitive advantage over our smaller competitors. As of March 31, 2011, we had 207 inside sales representatives who provide access to our entire inventory, as well as technical expertise on the products we sell. In addition, as of March 31, 2011, we also had 19 OSRs worldwide who provide support at certain of our customer sites. The support provided by these OSRs includes making recommendations for the products best suited for specific applications, providing technical assistance with drilling and the installation of fasteners and troubleshooting issues relating to installation tooling. Our OSRs' hands-on expertise and access to the customer site allows them a unique opportunity to market additional products to our customers.

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Employees

        As of March 31, 2011, we employed 1,021 personnel worldwide, 102 of which were located at customer sites. We have 238 employees located outside of North America. We are not a party to any collective bargaining agreements with our employees.

Regulatory Matters

        Governmental agencies throughout the world, including the FAA in the United States, prescribe standards for aircraft components, including virtually all commercial airline and general aviation products, as well as regulations regarding the repair and overhaul of airframes and engines. Specific regulations vary from country to country, although compliance with FAA requirements generally satisfies regulatory requirements in other countries. In addition, the products we distribute must also be certified by aircraft and engine OEMs. If any of the material authorizations or approvals that allow us to supply products is revoked or suspended, then the sale of the related products would be prohibited by law, which would have an adverse effect on our business, financial condition and results of operations.

        From time to time, the FAA or equivalent regulatory agencies in other countries propose new regulations or changes to existing regulations, which are usually more stringent than existing regulations. If these proposed regulations are adopted and enacted, we could incur significant additional costs to achieve compliance, which could have a material adverse effect on our business, financial condition and results of operations.

        We are also subject to government rules and regulations that include the FCPA, ITAR and the False Claims Act. See "Risk Factors—We are subject to unique business risks as a result of supplying equipment and services to the U.S. Government" and "—Our international operations require us to comply with anti-corruption laws and regulations of the U.S. government and various international jurisdictions."

Environmental Matters

        Although we are subject to various environmental regulations, we are not aware of any environmental issues that would be likely to have a materially adverse impact upon our business or financial condition.

Legal Proceedings

        We are involved in various legal matters that arise in the normal course of our business. We believe that the ultimate outcome of such matters will not have a material adverse effect on our financial position, results of operations or cash flows. There can be no assurance, however, that such actions will not be material or adversely affect our business, financial position, and results of operations or cash flows.

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MANAGEMENT

Directors and Executive Officers

        The following table sets forth certain information regarding our executive officers and directors, as of the date of this prospectus:

Name
  Age   Position
  Randy J. Snyder     61   Chairman of the Board of Directors, President and Chief Executive Officer
  Hal Weinstein     57   Executive Vice President of Sales and Marketing
  Tommy Lee     63   Executive Vice President
  Gregory A. Hann     56   Executive Vice President and Chief Financial Officer
  Alex Murray     41   Vice President of Global Operations
  Dayne A. Baird     35   Director
  Peter J. Clare     46   Director
  Paul E. Fulchino     64   Director
  John P. Jumper     66   Director
  Adam J. Palmer     38   Director
  Robert D. Paulson     65   Director
  David L. Squier     65   Director

        Randy J. Snyder has served as our President and Chief Executive Officer since 1977 and has been the Chairman of the Board of Directors since 2006.

        Our board of directors has concluded that Mr. Snyder should serve on our board of directors based upon his intimate knowledge of our operations and his role in leading our transition from a small niche distributor to the largest C class aerospace component distributor in the world and an authorized stocking distributor for all major aerospace hardware manufacturers worldwide.

        Hal Weinstein joined Wesco in 1983 and has served as the head of sales and marketing for the Company since 1988. Mr. Weinstein oversees our worldwide sales and marketing operations and is responsible for global marketing strategy, inclusive of advertising and website development and maintenance. He previously served as our Regional Sales Manager from 1983 to 1988. Prior to joining Wesco, Mr. Weinstein served as Director of Sales for Asset Financing International, an equipment leasing company based in Ridgefield, Connecticut, from 1981 to 1983.

        Tommy Lee joined Wesco in 1984 and has served as our Executive Vice President in charge of all of our operations, with special emphasis on procurement and supplier relations, since 1990. He previously served as our Vice President of Sales from 1984 to 1990. Mr. Lee has been actively involved in sales and management in the aerospace industry since 1967. Prior to joining Wesco, Mr. Lee worked for a Lockheed Martin Corporation-owned company from 1967 to 1971 and was the National Sales Manager for a major fastener distributor from 1971 to 1984.

        Gregory A. Hann has served as our Executive Vice President and Chief Financial Officer since joining Wesco in 2009. Mr. Hann was previously the Chief Financial Officer of Transamerican Auto Parts, a privately held retailer and distributor of 4-wheel drive and off road vehicle parts, from 2007 to 2009, and the Chief Financial Officer of publicly traded Ducommun Incorporated, a manufacturer of aerospace structures, from 2006 to 2007. Mr. Hann is a certified public accountant.

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        Alex Murray joined Wesco in 2000 and has served as Vice President of Global Operations since 2010. He previously served as our Logistic Manager from 2000 to 2003, Director of Contract Business from 2003 to 2005, and EU Managing Director from 2005 to 2010. Prior to joining Wesco, Mr. Murray was employed by BAE Systems in various roles within the logistics, procurement, supply chain and quality organizations.

        Dayne A. Baird has been a member of our board of directors since 2010. Mr. Baird is a Vice President at Carlyle where he focuses on U.S. buyout opportunities in the aerospace, defense and government services sectors. Mr. Baird has been with Carlyle since 2003. Prior to joining Carlyle, Mr. Baird worked in the mergers and acquisitions and global industrial groups of Lehman Brothers from 2000 to 2003, where he focused on transactions in the industrial, aerospace and defense sectors. Mr. Baird currently serves on the board of directors of ARINC Incorporated.

        Our board of directors has concluded that Mr. Baird should serve as a director because in addition to his demonstrated leadership as a Vice President of Carlyle, he brings valuable insight to our board of directors about the global aerospace and defense industries.

        Peter J. Clare has been a member of our board of directors since 2006. Mr. Clare is a Managing Director of Carlyle and has served as Co-head of the U.S. Buyout group since 2011. He previously served as the Deputy Head of the U.S. Buyout group and as the Head of the Global Aerospace and Defense sector team. Mr. Clare has been with Carlyle since 1992. He currently serves on the boards of directors of ARINC Incorporated, Booz Allen Hamilton Holding Corporation, CommScope, Inc. and Sequa Corporation and previously served on the board of directors of Aviall, Inc., Avio SpA, Landmark Aviation, United Defense and Vought Aircraft Industries, Inc.

        Our board of directors has concluded that Mr. Clare should serve as a director because in addition to his demonstrated leadership as a Managing Director of Carlyle and his extensive experience in private equity, he brings valuable insight to our board of directors about the global aerospace and defense industries. In addition, as a result of his current service as a director of ARINC Incorporated, Booz Allen Hamilton Holding Corporation, CommScope, Inc. and Sequa Corporation, Mr. Clare brings valuable knowledge to our board of directors about the operations, compensation programs and corporate governance of other companies.

        Paul E. Fulchino has been a member of our board of directors since 2008. From 2000 until his retirement in 2010, Mr. Fulchino served as Chairman, President and Chief Executive Officer of Aviall, Inc., which became a wholly-owned subsidiary of The Boeing Company on September 20, 2006. Mr. Fulchino had previously served as President and Chief Operating Officer of BE Aerospace, Inc. from 1996 to 1999 and President and Vice Chairman of Mercer Management Consulting, Inc. from 1990 to 1996. He currently serves on the boards of directors of Global Technologies and Spirit Aerosystems, Inc. and previously served on the board of directors of Aviall, Inc. and The Sports Authority, Inc.

        Our board of directors has concluded that Mr. Fulchino should serve as a director because in addition to his extensive experience in the aerospace MRO industry, he brings a unique perspective to our board of directors regarding the global aerospace industry. In addition, as a result of his current service as a director of Global Technologies and Spirit Aerosystems, Inc., Mr. Fulchino brings valuable knowledge to our board of directors about the operations, compensation programs and corporate governance of other companies. Mr. Fulchino is a director nominee designated by Carlyle pursuant to the terms of the Stockholders Agreement described under "Certain Relationships and Related Party Transactions—Amended and Restated Stockholders Agreement."

        John P. Jumper has been a member of our board of directors since 2007. Mr. Jumper retired from the United States Air Force in 2005 after a distinguished 39-year military career. In his last position as Chief of Staff, he served as the senior military officer in the Air Force leading more than 700,000

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military, civilian, Air National Guard and Air Force Reserve men and women. As Chief of Staff, he was a member of the Joint Chiefs of Staff providing military advice to the Secretary of Defense, the National Security Council and the President. In earlier assignments he served on the Joint Staff and as Senior Military Assistant to Secretary of Defense Dick Cheney and Secretary Les Aspin. He currently serves on the boards of directors of Goodrich Corporation, Jacobs Engineering, and SAIC, as well as on the non-profit board of directors of the Air Force Village Charitable Foundation, the American Air Museum at Duxford, England, the George C. Marshall Foundation and the VMT Board of Visitors. Mr. Jumper previously served on the board of directors of Tech Team Global and Somanetics Corporation.

        Our board of directors has concluded that Mr. Jumper should serve as a director because in addition to his demonstrated leadership throughout his 39-year military career, he brings knowledge regarding the military aerospace industry. In addition, as a result of his current service as a director of Goodrich Corporation, TechTeam Global, Jacobs Engineering, SAIC and Somanetics, Mr. Jumper brings valuable knowledge to our board of directors about the operations, compensation programs and corporate governance of other companies. Mr. Jumper is a director nominee designated by Carlyle pursuant to the terms of the Stockholders Agreement described under "Certain Relationships and Related Party Transactions—Amended and Restated Stockholders Agreement."

        Adam J. Palmer has been a member of our board of directors since 2006. Mr. Palmer is a Managing Director of Carlyle and has been the Head of the Global Aerospace and Defense sector team since 2011. Mr. Palmer joined Carlyle in 1996 as a member of the Aerospace, Defense and Government Services sector team. Prior to joining Carlyle, Mr. Palmer was with Lehman Brothers focusing on mergers, acquisitions and financings for defense electronics and information services companies. He currently serves on the boards of directors of RPK Capital Management Group, LLC, Sequa Corporation and Triumph Group, Inc. and previously served on the board of directors of Landmark Aviation, Standard Aero, Ltd., U.S. Investigations Services, Inc. and Vought Aircraft Industries, Inc.

        Our board of directors has concluded that Mr. Palmer should serve as a director because in addition to his demonstrated leadership as a Managing Director of Carlyle and his extensive experience in private equity and investment banking, he brings additional perspectives to our board of directors about the global aerospace and defense industries. In addition, as a result of his current service as a director of RPK Capital Management Group, LLC, Sequa Corporation and Triumph Group, Inc., Mr. Palmer brings valuable knowledge to our board of directors about the operations, compensation programs and corporate governance of other companies.

        Robert D. Paulson has been a member of our board of directors since 2006. Mr. Paulson has served as the Chief Executive Officer of Aerostar Capital LLC, a private equity investment firm, since he founded the firm in 1997. Prior to founding Aerostar Capital, Mr. Paulson retired from McKinsey & Company, Inc., an international management consulting firm, where he had served as the Los Angeles Office Manager from 1982 to 1989, led the Global Aerospace and Defense Practice from 1985 to 1997, and was twice elected to McKinsey's board of directors. He currently serves on the boards of directors of Ducommun Inc., Nationwide Health Properties, Inc. and the Grand Teton Music Festival, and previously served on the board of directors of US Rentals Inc. and Forgings International, L.P.

        Our board of directors has concluded that Mr. Paulson should serve as a director because in addition to his extensive experience in the aerospace defense industry, corporate governance practices, private equity and consulting, he brings unique insights to our board of directors regarding the global aerospace and defense industries. In addition, as a result of his current service as a director of Ducommun Inc. and Forgings International, LP, Mr. Paulson brings valuable knowledge to our board of directors about the operations, compensation programs and corporate governance of other companies.

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        David L. Squier has been a member of our board of directors since 2007. Mr. Squier retired from Howmet Corporation in October 2000, where he served as the President and Chief Executive Officer for over eight years. Prior to his tenure as CEO of Howmet, Mr. Squier served in a number of senior management assignments at Howmet, including Executive Vice President and Chief Operating Officer. Mr. Squier was also a member of the board of directors of Howmet from 1987 until his retirement. Mr. Squier currently serves as an adviser to Carlyle. Mr. Squier currently serves on the board of directors of Sequa Corporation and previously served on the boards of directors of UCI International, Inc., Forged Metal, Inc. and Vought Aircraft Industries from 2003 to 2010.

        Our board of directors has concluded that Mr. Squier should serve as a director because in addition to his extensive industry experience and his current role as an advisor to Carlyle, he brings additional perspectives to our board of directors regarding the global aerospace and defense industries. In addition, as a result of his current service as a director of Sequa Corporation and prior experience with other companies, Mr. Squier brings valuable knowledge to our board of directors about the operations, compensation programs and corporate governance of other companies. Mr. Squier is a director nominee designated by Carlyle pursuant to the terms of the Stockholders Agreement described under "Certain Relationships and Related Party Transactions—Amended and Restated Stockholders Agreement."

Controlled Company

        For purposes of the rules of the New York Stock Exchange, we expect to be a "controlled company" upon completion of this offering. Controlled companies under those rules are companies of which more than 50% of the voting power for the election of directors is held by an individual, a group or another company. We expect that Carlyle will continue to control more than 50% of the combined voting power of our common stock upon completion of this offering and will continue to have the right to nominate a majority of the members of our board of directors for nomination for election and the voting power to elect such directors following this offering. For these purposes, as a result of the provisions of the Amended and Restated Stockholders Agreement, the Wesco Stockholders and the affiliates of Carlyle which own shares, or the Carlyle Stockholders, will be treated as a "group," and therefore the Wesco Stockholders' shares will be included in determining whether we are a controlled company. Accordingly, we expect to be eligible to, and we intend to, take advantage of certain exemptions from corporate governance requirements provided in rules of the New York Stock Exchange. Specifically, as a controlled company, we would not be required to have (i) a majority of independent directors, (ii) a nominating and corporate governance committee composed entirely of independent directors, (iii) a compensation committee composed entirely of independent directors or (iv) an annual performance evaluation of the nominating and corporate governance and compensation committees. Accordingly, you will not have the same protections afforded to stockholders of companies that are subject to all of the applicable rules of the New York Stock Exchange.

Board Composition

        Our board of directors is currently composed of eight directors, including Mr. Snyder, our Chairman of the Board of Directors, President and Chief Executive Officer.

        We entered into a stockholders agreement with the Wesco Stockholders and the Carlyle Stockholders on September 29, 2006, which stockholders agreement was subsequently amended on November 30, 2007 and April 17, 2008, or as amended, the Stockholders Agreement. Upon effectiveness of the registration statement of which this prospectus forms a part, the Stockholders Agreement will be amended and restated, which we refer to as the Amended and Restated Stockholders Agreement. Under the Amended and Restated Stockholders Agreement, Carlyle Stockholders will have the right to nominate six board members and the Wesco Stockholders will have

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the right to nominate one board member. Our Board of Directors will be divided into three classes whose members will serve three-year terms expiring in successive years.

Board Committees

        Our board of directors directs the management of our business and affairs as provided by Delaware law and conducts its business through meetings of our board of directors and two standing committees: the audit committee and the compensation committee. Effective upon completion of this offering, our board of directors will also have a nominating and corporate governance committee.

    Audit Committee

        Our audit committee is responsible, among its other duties and responsibilities, for overseeing our accounting and financial reporting processes, the audits of our financial statements, the qualifications and independence of our independent registered public accounting firm, the performance of our internal audit function and independent registered public accounting firm. Our audit committee reviews and assesses the qualitative aspects of our financial reporting, our processes to manage business and financial risks and our compliance with significant applicable legal, ethical and regulatory requirements. Our audit committee is directly responsible for the appointment, compensation, retention and oversight of our independent registered public accounting firm. The charter of our audit committee will be available without charge on the investor relations portion of our website upon completion of this offering.

        Upon completion of this offering, the audit committee will consist of Messrs. Paulson (chair), Palmer and Baird. Our board of directors has determined that Mr. Paulson is independent within the meaning of the rules of the New York Stock Exchange and Rule 10A-3 under the Exchange Act, and has also determined that Messrs. Paulson, Palmer and Baird are each an "audit committee financial expert," as such term is defined under the applicable regulations of the SEC.

    Compensation Committee

        Our compensation committee is responsible, among its other duties and responsibilities, for reviewing and approving all forms of compensation to be provided to our executive officers and directors, establishing our general compensation policies and reviewing, approving and overseeing the administration of our employee benefits plans. Our compensation committee also periodically reviews management development and succession plans. The charter of our compensation committee will be available without charge on the investor relations portion of our website upon completion of this offering.

        Upon completion of this offering, the compensation committee will consist of Messrs. Squier (chair), Fulchino and Palmer.

    Nominating and Corporate Governance Committee

        Our nominating and corporate governance committee will have responsibility for, among other things: (1) recommending persons to be selected by our board of directors as nominees for election as directors; (2) recommending persons to be selected by our board of directors as members and chairperson for each committee of the board of directors; (3) analyzing and proposing for decision of the board of directors the governance policies of the Company; and (4) monitoring our performance in meeting our obligations with respect to professional ethics and integrity in internal and external matters and our principles of corporate governance. The charter of our nominating and corporate governance committee will be available without charge on the investor relations portion of our website upon completion of this offering.

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        Upon completion of this offering, the nominating and corporate governance committee will consist of Messrs. Palmer (chair), Jumper and Snyder.

        In addition, from time to time, other committees may be established under the direction of our board of directors when necessary to address specific issues.

Compensation Committee Interlocks and Insider Participation

        During fiscal 2010, our compensation committee consisted of Messrs. Fulchino, Jumper, Palmer and Squier. None of the members of our compensation committee is currently one of our officers or employees. During fiscal 2010, none of our executive officers served as a member of the board of directors or compensation committee, or other committee serving an equivalent function, of any entity that has one or more executive officers who serve as members of our board of directors or our compensation committee.

Code of Ethics

        We have adopted a code of ethics that applies to all of our employees, officers and directors. A copy of the code of ethics will be available on our website and will also be provided to any person without charge. Request should be made in writing to Director of Human Resources at 27727 Avenue Scott, Valencia, CA 91355.

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COMPENSATION DISCUSSION AND ANALYSIS

Executive Summary

        This Compensation Discussion and Analysis provides an overview and analysis of (i) the elements of our compensation program for our named executive officers, or NEOs, identified below, (ii) the material compensation decisions made under that program and reflected in the executive compensation tables that follow this Compensation Discussion and Analysis and (iii) the material factors considered in making those decisions. We intend to provide our NEOs with compensation that is significantly performance based. Our executive compensation program is designed to align executive pay with our performance on both short and long-term bases, link executive pay to specific, measurable results intended to create value for stockholders, and utilize compensation as a tool to assist us in attracting and retaining the high-caliber executives that we believe are critical to our long-term success.

        The primary elements of our executive compensation program and their corresponding objectives are summarized in the following table:

Compensation Element
  Objective

Base Salary

  To recognize performance of job responsibilities and as a necessary tool to attract and retain individuals with superior talent.

Annual performance-based compensation

  To promote our near-term performance objectives and reward individual contributions to the achievement of those objectives.

Discretionary long-term equity incentive awards

  To emphasize our long-term performance objectives, encourage the maximization of stockholder value and retain key executives by providing an opportunity to participate in the ownership of the Company.

Severance and change in control benefits

  To encourage the continued attention and dedication of key individuals and to focus the attention of key individuals when considering strategic alternatives.

Retirement savings (401(k))

  To provide an opportunity for tax-efficient savings and long-term financial security.

Other elements of compensation and perquisites

  To attract and retain talented executives in a cost-efficient manner by providing benefits with high perceived values at relatively low cost to us.

        To serve the foregoing objectives, our overall executive compensation program is generally designed to be flexible rather than formulaic. The compensation committee of our board of directors, or the compensation committee, has primary authority to determine and approve compensation decisions with respect to our NEOs. In alignment with the objectives set forth above, the compensation committee determines overall compensation, and its allocation among the elements described above, in reliance upon the judgment and general industry knowledge of its members obtained through years of service with comparably sized companies in our and similar industries.

        For the year ended September 30, 2010, our NEOs are Randy Snyder, our Chief Executive Officer, Greg Hann, our Executive Vice President and Chief Financial Officer, Hal Weinstein, our Executive Vice President, Sales and Marketing, Tommy Lee, our Executive Vice President, and Alex Murray, our Vice President, Global Operations. Our compensation decisions for the NEOs in fiscal 2010 are discussed below in relation to each of the above-described elements of our compensation program. The

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below discussion is intended to be read in conjunction with the executive compensation tables and related disclosures that follow this Compensation Discussion and Analysis.

Compensation Overview

        Our overall executive compensation program is structured to attract, motivate and retain highly qualified executive officers by paying them competitively, consistent with our success and their contribution to that success. We believe compensation should be structured to ensure that a significant portion of compensation opportunity will be related to factors that directly and indirectly influence stockholder value. Accordingly, we set goals designed to link each NEO's compensation to our performance. Consistent with our performance-based philosophy, we provide a base salary to our NEOs, significant incentive-based compensation, which includes variable cash awards under our annual incentive bonus program based on our financial and operational performance, as well as stock option and other equity and equity-based awards granted to our NEOs to align our NEOs' interests with our long-term performance.

        Total compensation for our NEOs has been allocated between cash and equity compensation taking into consideration the balance between providing short-term incentives and long-term investment in our financial performance to align the interests of management with stockholders. The variable annual incentive award and the equity awards are designed to ensure that total compensation reflects our overall success or failure and to motivate the NEOs to meet appropriate performance measures, thereby maximizing total return to stockholders. In connection with our initial public offering, we have adopted our 2011 Equity Incentive Award Plan.

Determination of Compensation Awards

        The compensation committee is provided with the primary authority to determine and approve the compensation awards available to our NEOs and is charged with reviewing our executive compensation policies and practices to ensure (i) adherence to our compensation philosophies and (ii) that the total compensation paid to our NEOs is fair, reasonable and competitive, taking into account our position within our industry and the level of expertise and experience of our NEOs in their positions. The compensation committee is primarily responsible for (i) determining each NEO's base salary and target bonus level (representing the bonus that may be awarded expressed as a percentage of base salary or as a dollar amount for the year), (ii) assessing the performance of the Chief Executive Officer and other NEOs for each applicable performance period and (iii) determining the amount of awards to be paid to our Chief Executive Officer and other NEOs under our annual incentive bonus program for each year, after taking into account any previously established target bonus levels and performance during the year, and the amount of any stock option or other equity or equity-based awards to be granted to our NEOs. To aid the compensation committee in making its determinations, our Chief Executive Officer provides recommendations annually to the compensation committee regarding the compensation of all officers, excluding himself. The performance of our senior executive management team is reviewed annually by the compensation committee and the compensation committee determines each NEO's compensation annually.

        In determining compensation levels for our NEOs, the compensation committee considers each NEO's unique position and responsibility and relies upon the judgment and industry experience of its members, including their knowledge of competitive compensation levels in our industry. We believe that our NEOs' base salaries should be competitive with salaries for executive officers in similar positions and with similar responsibilities in our marketplace and adjusted for financial and operating performance and previous work experience. In this regard, each NEO's current and prior compensation, including compensation paid by our predecessor or the NEO's prior employer, is considered as a base against which determinations are made as to whether increases are appropriate to retain the NEO in light of competition or in order to provide continuing performance incentives.

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        In making compensation determinations, the compensation committee historically has not made regular use of benchmarking or compensation consultants and historically has not referred to specific compensation survey data. Rather, in alignment with the considerations described above, the compensation committee determines the total amount of compensation for our NEOs, and the allocation of total compensation among each of our three main components of compensation, in reliance upon the judgment and general industry knowledge of its members obtained through years of service with comparably sized companies in our industry and other similar industries to ensure the attraction, development and retention of superior talent.

        We believe that direct ownership in our Company provides our NEOs with a strong incentive to increase the value of the Company and we therefore historically have encouraged equity ownership in the Company by NEOs and other employees through a variety of means, including direct stock ownership by NEOs and other employees, and the award of stock options and other equity-based interests that have been received by the NEOs. We believe that the equity ownership positions of our NEOs are substantial and therefore we have not implemented a formal policy with respect to requiring officers and directors to own our stock.

Base Compensation For 2010

        We set base salaries for our NEOs generally at a level we deem necessary to attract and retain individuals with superior talent, using the methodologies described above. Each year we determine base salary increases based upon the performance of the NEOs as assessed by the compensation committee, and for NEOs other than the Chief Executive Officer, in conjunction with recommendations made by the Chief Executive Officer. The compensation committee reviews and evaluates base salaries for our NEOs annually, but formulaic base salary increases are not provided to the NEOs.

        In fiscal 2009, the compensation committee determined to provide base salary increases to Messrs. Snyder, Weinstein, Lee and Murray to reward our continued superior performance through a period of economic uncertainty, to maintain their compensation at a fair, reasonable and competitive level and in recognition of the fact that they had not received base salary increases in several years. In addition, following the completion of the 2010 fiscal year, the compensation committee determined to adjust Mr. Hann's base salary, effective as of November 2, 2010, to reward Mr. Hann for our superior financial performance, to seek to ensure the retention of Mr. Hann as our Executive Vice President and Chief Financial Officer and in recognition of the fact that Mr. Hann had not received a base salary increase since commencing employment with us in February 2009. The base salaries for our NEOs before and after these increases are set forth in the following table:

Name and Principal Position
  Base Salary
Before Increase ($)
  Base Salary
After Increase ($)
 

Randy Snyder

    600,000     650,000  

Greg Hann

    300,000     325,000  

Hal Weinstein

    300,000     325,000  

Tommy Lee

    270,000     315,000  

Alex Murray(1)

    147,814     186,546  

(1)
Base salary amounts for Mr. Murray, who is employed in the United Kingdom, are presented based on an assumed conversion ratio of pounds to dollars of 1.5809, which was the exchange rate in effect on September 30, 2010.

Annual Performance-Based Compensation For 2010

        We structure our compensation programs to reward NEOs based on our performance and the individual executive's contribution to that performance. NEOs are eligible to receive bonus

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compensation under our Management Annual Incentive Plan in the event certain specified corporate performance measures are achieved.

        This annual bonus program consists of cash awards based upon our achievement of performance goals determined by the compensation committee. Under the terms of the annual bonus plan, NEOs have target bonus amounts based upon a percentage of their base salaries as of the start of the applicable fiscal year, as follows: Mr. Snyder: 100%; Mr. Hann: 60%; Mr. Weinstein: 60%; Mr. Lee: 45%; and Mr. Murray: 40%. Our NEOs have the ability to earn more or less than their target bonus amounts for over performance or under performance, as determined with reference to the applicable performance goals. None of our NEOs has a guaranteed minimum annual performance bonus. The maximum and minimum portions of target awards, if any, payable under the plan may vary from year to year and are set at levels that we determine are necessary to maintain competitive compensation practices and properly motivate our NEOs by rewarding them for our annual performance and their contributions to that performance.

        Awards paid under the plan are based upon the level of achievement in relation to two Company-wide performance metrics: Bonus EBITDA and Bonus Cash Flow. For this purpose, "Bonus EBITDA" is defined generally as our earnings before interest, taxes, depreciation expense and amortization expense, equity compensation expense, management and transaction fees and extraordinary and non-recurring items. "Bonus Cash Flow" is generally defined as our net cash from operating activities less capital expenditures. These terms may differ from Adjusted EBITDA and Adjusted Net Income presented elsewhere in this prospectus. We use Bonus EBITDA and Bonus Cash Flow as the primary performance metrics to determine the amount of awards paid under our annual bonus plan because the compensation committee believes that these metrics most directly correlate to the creation of value for our stockholders in relation to our financial performance over the annual performance period.

        For each performance year, the compensation committee assigns a target, minimum and maximum value to each performance metric. Minimum threshold goals must be met for performance metrics before awards may become payable under the plan. The maximum award (200% of target amounts) is payable only upon achievement of maximum-level performance for both metrics. Award amounts for performance between the baseline and maximum levels are determined at the beginning of the applicable performance period and depend upon the level of achievement for each metric relative to its assigned target value, in accordance with a pre-determined payout matrix. The board of directors makes final determinations of the amounts payable under the plan, in consultation with the Chief Executive Officer, after receipt of the applicable financial information. In addition, we, in our sole discretion, may adjust targets or awards to account for unusual events such as extraordinary transactions, asset dispositions and purchases, and mergers and acquisitions.

        The following chart sets forth the minimum, maximum and target values, and the performance achieved, for the performance metrics for the year ended September 30, 2010:

Performance Metric
  2010 Actual
($ MM)
  Minimum
($ MM)
  Target
($ MM)
  Maximum
($ MM)
 

Bonus EBITDA

    168.5     145.8     166.6     187.4  

Bonus Cash Flow

    97.7     59.6     79.5     109.3  

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        The following payout matrix sets forth an illustration of the payout levels in relation to the target bonus amounts that would apply under our annual bonus program under the range of possible performance scenarios, based on the minimum, target and maximum levels of performance as set forth above:

 
   
  Bonus Cash Flow vs. Target  
 
   
  < Minimum   75.0%   81.3%   87.5%   93.8%   100.0%   109.4%   118.75%   128.1%   137.5%  
      112.5%     0.0%     100.0%     112.5%     125.0%     137.5%     150.0%     162.5%     175.0%     187.5%     200.0%  
      109.4%     0.0%     87.5%     100.0%     112.5%     125.0%     137.5%     150.0%     162.5%     175.0%     187.5%  
      106.3%     0.0%     75.0%     87.5%     100.0%     112.5%     125.0%     137.5%     150.0%     162.5%     175.0%  
Bonus     103.1%     0.0%     62.5%     75.0%     87.5%     100.0%     112.5%     125.0%     137.5%     150.0%     162.5%  
                                               
EBITDA     100.0%     0.0%     50.0%     62.5%     75.0%     87.5%     100.0%     112.5%     125.0%     137.5%     150.0%  
                                               
vs. Target     96.9%     0.0%     37.5%     50.0%     62.5%     75.0%     87.5%     100.0%     112.5%     125.0%     137.5%  
      93.8%     0.0%     25.0%     37.5%     50.0%     62.5%     75.0%     87.5%     100.0%     112.5%     125.0%  
      90.6%     0.0%     12.5%     25.0%     37.5%     50.0%     62.5%     75.0%     87.5%     100.0%     112.5%  
      87.5%     0.0%     0.0%     12.5%     25.0%     37.5%     50.0%     62.5%     75.0%     87.5%     100.0%  
      < Minimum     0.0%     0.0%     0.0%     0.0%     0.0%     0.0%     0.0%     0.0%     0.0%     0.0%  

        Where actual performance falls in between the scenarios presented in the matrix above, the compensation committee uses the matrix as a guide in determining the appropriate percentage of the target bonus amounts to pay to our named executive officers. Therefore, for fiscal year 2010, where actual performance for Bonus EBITDA was approximately 101.1% of the target amount and actual performance for Bonus Cash Flow was approximately 122.9% of the target amount, the compensation committee determined that Messrs. Snyder, Hann, Weinstein and Lee were entitled to bonus payments in amounts equal to 135% of their target bonus amounts. In making its bonus determination for Mr. Murray, whose scope of responsibility primarily included our European operations, the compensation committee also considered the performance of these operations for fiscal year 2010. Because our business outside of North America underperformed relative to overall Company performance for fiscal year 2010, the compensation committee exercised its discretion under our annual bonus program to reduce the bonus payouts provided to our employees outside of North America, and, as a result, Mr. Murray did not receive a bonus at the same level as our other NEOs. Mr. Murray's cash bonus for fiscal year 2010 was reduced to 100% of his target bonus amount, which the compensation committee determined to be the appropriate level as a result of overall corporate level performance having exceeded the target amounts set forth above, and in order to promote a "one-Wesco" culture in relation to this success. The actual award amounts earned by our NEOs for 2010 are included in the "Non-Equity Incentive Plan Compensation" column of our Summary Compensation Table for 2010.

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Discretionary Long-Term Equity Incentive Awards

        We believe that providing a portion of our NEOs' total compensation in the form of equity-based awards encourages responsible and profitable growth, encourages executive retention, promotes a long-term focus and aligns executive and stockholder interests. Historically, rather than provide our NEOs with annual equity awards based upon short-term performance horizons, the compensation committee has determined to make larger, less frequent equity grants to our NEOs, generally with five year performance horizons, to better align the long-term interests of our NEOs with those of stockholders. None of our NEOs were granted equity-based awards during fiscal year 2010. Currently, with the exception of Mr. Hann, our NEOs hold equity incentive awards that consist of restricted stock and restricted stock units granted in September 2006 and/or stock options granted in May 2007. Mr. Hann holds stock options that we granted to him in February 2009 upon his commencement of employment with us. All of the stock options held by our NEOs have exercise prices that were equal to the fair market value of our common stock on the date of grant or, with respect to Mr. Hann, the date the stock option was amended.

        Generally, stock options granted under our equity incentive plan expire ten years from the date of the grant and have vesting provisions that are designed to encourage an optionee's continued employment and to reward an optionee for our performance. Twenty-five percent of each NEO's options are time vesting options that vest and become exercisable in five equal annual installments (three equal annual installments for Mr. Hann) beginning on the first September 30 following the date of grant, subject to the optionee's continued service with us through the applicable vesting date. The remaining 75% of the options for each NEO are eligible to vest in five annual installments (three annual installments for Mr. Hann), subject to the optionee's continued employment with us and attainment by us of financial performance targets as follows: one-half of each performance vesting installment is eligible to vest following the close of the applicable fiscal year if we attain a pre-determined Bonus EBITDA target for the year, and the remaining one-half of each performance vesting installment is eligible to vest following the close of the applicable fiscal year if we attain a pre-determined Cash Flow target for the year. If we do not attain the relevant Bonus EBITDA or Bonus Cash Flow targets for a given fiscal year, but we attain at least 90% of such targets, the applicable portion of the performance vesting options remains eligible to vest in future years if cumulative Bonus EBITDA and cumulative Bonus Cash Flow targets are attained in those years. The Bonus Cash Flow and Bonus EBITDA goals were established at the time the options were granted and were intended to be challenging but reasonably attainable. The Bonus EBITDA and Bonus Cash Flow targets for stock option vesting purposes differ from the Bonus EBITDA and Bonus Cash Flow targets levels that apply under our Management Annual Incentive Plan because the option vesting targets were generally set at the time of each grant with a five-year time horizon (three years for Mr. Hann) while the Management Annual Incentive Plan targets are short term goals set annually at the beginning of each applicable fiscal year.

        For 2010, the Bonus Cash Flow and Bonus EBITDA targets for the NEOs' performance vesting options were $82.4 million and $180.3 million, respectively, and actual results with respect to Bonus Cash Flow and Bonus EBITDA for the year were $97.7 million and $168.5 million, respectively. As a result, the Bonus Cash Flow portion of the NEOs' performance vesting options vested, effective as of September 30, 2010. In addition, although we did not attain the Bonus EBITDA target that was previously established for performance option vesting for 2010, the compensation committee determined that the failure to attain the Bonus EBITDA target did not result from a lack of performance by our management team, but rather from a change in overall market conditions that were beyond management's control, and that due to the near achievement of the target in light of such factors, and our outperformance as compared to the Bonus Cash Flow target for the year, the Bonus EBITDA portion of the 2010 performance options would become vested, effective as of September 30, 2010.

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        Early in fiscal year 2010, the compensation committee determined that we had not attained the 2009 Bonus Cash Flow target of $63.2 million that had previously been established for purposes of performance option vesting and that actual results with respect to 2009 Bonus Cash Flow were less than 90% of the target. As a result, the 2009 Bonus Cash Flow portion of the performance options did not become vested at that time. However, in order to provide additional incentives for management to achieve strong company-wide financial performance in fiscal years 2010 and 2011, the compensation committee determined to provide an additional opportunity for the 2009 Bonus Cash Flow portion of the performance options to vest as follows: one-half of the 2009 Bonus Cash Flow portion of the performance options would vest following the end of fiscal year 2010 if we attained a supplemental Bonus Cash Flow target of $98.9 million for 2010 and the remaining one-half of the 2009 Bonus Cash Flow portion of the performance options would vest following the end of fiscal year 2011 if we attain a supplemental Bonus Cash Flow target for 2011 that is in excess of the Bonus Cash Flow target that applies to the regular 2011 Bonus Cash Flow portion of the performance options and that the compensation committee believes is a challenging supplemental Bonus Cash Flow goal for fiscal year 2011. Following the close of fiscal year 2010, the compensation committee determined that although the supplemental Bonus Cash Flow target for 2010 was not fully attained, the applicable portion of the performance options described above would become vested and exercisable effective as of September 30, 2010 due to the near achievement of such supplemental Bonus Cash Flow target. In addition, in October 2009, the compensation committee determined to amend the stock option that we granted to Mr. Hann upon his commencement of employment by decreasing the exercise price of such stock options to the then-current fair market value of our common stock and revising the applicable Bonus EBITDA and Bonus Cash Flow targets, in each case, to motivate and encourage Mr. Hann's strong performance, in consideration of the fact that the value of our stock and our performance projections were at an all-time high when Mr. Hann's options were originally granted and to make the exercise price of Mr. Hann's stock options consistent with the fair market value of our stock at the time of the amendment (and the same as the exercise price of options granted to other employees at such time) and to conform the performance targets applicable to Mr. Hann's options with those applicable to our other NEOs and other employees.

        In addition, in connection with the Carlyle Acquisition in 2006, our NEOs, other than our CEO, who were with us at that time received awards of restricted stock and restricted stock units that relate to our common stock in recognition of their longstanding service to the company over a period of many years and as a means of seeking to retain these employees through the imposition of vesting requirements on the awards. All of these shares of restricted stock and restricted stock units have fully vested and the restricted stock units will be settled on the earlier of September 28, 2012 or the date we experience a change in control. Additional information regarding the restricted stock units held by our NEOs is set forth below in the non-qualified deferred compensation table that follows this Compensation Discussion and Analysis. In determining the allocation of the historical equity and equity-based awards for our NEOs between stock options on the one hand and restricted stock and restricted stock units on the other, the compensation committee considered the different goals intended to be achieved through these different types of awards as well as each NEO's service with and position within the company. The allocation of awards between restricted stock and restricted stock units for the NEOs who received these awards was determined based upon the different tax treatment applicable to these two types of awards.

Defined Contribution Plans

        We have a Section 401(k) Savings/Retirement Plan, or the 401(k) Plan, to cover our eligible employees. The 401(k) Plan permits eligible employees to defer a portion of their annual compensation, subject to certain limitations imposed by the Internal Revenue Code. The employees' elective deferrals are immediately vested and non-forfeitable upon contribution to the 401(k) Plan. We provide matching contributions to the 401(k) Plan in an amount equal to fifty cents for each dollar of

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participant contributions, up to a maximum matching contribution of three percent of the participant's annual salary and subject to certain other limits. After a full year of employment with us, plan participants vest in the amounts contributed by us pro rata over the following five years, subject to their continued employment with us. Employees are eligible to participate in the 401(k) Plan the first day of the first calendar quarter following their completion of six full calendar months of employment with us.

        The 401(k) Plan is offered on a nondiscriminatory basis to all of our employees, including NEOs, who meet the eligibility requirements. The compensation committee believes that matching and other contributions provided by us to assist us in attracting and retaining talented employees and executives. The 401(k) Plan provides an opportunity for participants to save money for retirement on a tax-qualified basis and to achieve financial security, thereby promoting retention.

Employment and Severance Arrangements

        The compensation committee considers the maintenance of a sound management team to be essential to protecting and enhancing our best interests. To that end, we recognize that the uncertainty that may exist among management with respect to their "at-will" employment with us may result in the departure or distraction of management personnel to our detriment. Accordingly, the compensation committee determined that severance arrangements are appropriate for certain of our NEOs to encourage the continued attention and dedication of these members of our management and to allow them to focus on the value to stockholders of strategic alternatives without concern for the impact on their continued employment. Mr. Snyder, Mr. Hann, Mr. Weinstein and Mr. Murray have each entered into an agreement with us providing for severance benefits upon termination of employment.

        Mr. Snyder's employment agreement with us, dated July 23, 2006 and amended December 31, 2008, has an original three-year term and is extended automatically for successive one-year periods thereafter unless either party delivers notice within specified notice periods to terminate the agreement. Upon termination of Mr. Snyder's employment either by us without "cause," by Mr. Snyder for "good reason" or due to the non-extension of the employment term by us, subject to his timely executing a general release of claims against us, Mr. Snyder is entitled to receive thirty-six months of his base salary, payable in installments in accordance with our regular payroll practices, a prorated portion of his annual performance bonus for the year in which termination occurs, the accelerated vesting of any outstanding unvested options we granted to Mr. Synder pursuant to his employment agreement that are subject to time-based vesting conditions and reimbursement for the premium costs of continued medical, dental and vision coverages under COBRA for a period of eighteen months. Mr. Snyder's employment agreement prohibits him from competing with certain of our businesses or from soliciting our employees, customers or suppliers to terminate their employment or arrangements with us during the term of his employment and for 36 months following his termination. "Cause" is defined in Mr. Snyder's agreement to mean Mr. Snyder's (i) material failure to comply with a reasonable directive of the board of directors, (ii) willful misconduct, gross negligence or breach of a fiduciary duty that results in material harm to us or our affiliates, (iii) willful and material breach of his employment agreement, (iv) conviction, plea of no contest or imposition of unadjudicated probation for any felony or crime involving moral turpitude, (v) unlawful use or possession of illegal drugs on Company premises or while performing his duties or responsibilities to us or (vi) commission of an act of fraud, embezzlement or misappropriation against us or our affiliates. "Good reason" is defined in Mr. Snyder's employment agreement to mean (a) a material reduction in duties or responsibilities, (b) a material reduction in base salary or annual target bonus opportunity, (c) a relocation of Mr. Snyder's principle place of employment by more than 25 miles, (d) our material breach of the agreement or (e) the failure of the Company, or any successor, following a change in control to reaffirm its obligations under the agreement or assume and comply with the agreement.

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        Pursuant to an agreement between Mr. Hann and us, dated January 22, 2009, which does not have a specified term, if we terminate Mr. Hann without "cause" or he resigns for "good reason," subject to his timely executing and not revoking a release of claims, Mr. Hann is entitled to payment of 12 months of his base salary, payable in installments in accordance with our regular payroll practices, and the right to continue his participation in one of our medical benefit plans for up to 12 months. For purposes of Mr. Hann's agreement, "cause" has substantially the same meaning as in Mr. Snyder's agreement, except that Mr. Hann's material breach of the agreement does not explicitly constitute cause. "Good reason" is defined in Mr. Hann's agreement to mean a material reduction in duties or responsibilities or a material reduction in his base salary.

        Mr. Weinstein's employment agreement with us, dated June 15, 2007 and amended December 31, 2008, has a perpetual term unless terminated by either party in accordance with the terms of the agreement. Upon termination of Mr. Weinstein's employment by us without "cause," subject to his timely executing a general release of claims against us, Mr. Weinstein is entitled to receive twelve months of his base salary, payable in installments in accordance with our regular payroll practices, and reimbursement for the premium costs of continued medical, dental and vision coverages under COBRA for a period of twelve months. Mr. Weinstein's employment agreement prohibits him from competing with certain of our businesses or from soliciting our employees, customers or suppliers to terminate their employment or arrangements with us during the term of his employment and for twelve months following his termination. "Cause" in Mr. Weinstein's agreement has the same meaning as in Mr. Snyder's agreement.

        Mr. Murray entered into an employment agreement with a subsidiary of the Company located in the United Kingdom. For simplicity, this subsidiary and its board of directors are referred to in this paragraph, respectively, as the company and the board. Mr. Murray's employment agreement, dated on March 24, 2011, has a perpetual term unless terminated by either party by giving not less than six months' written notice. The company may elect, however, to terminate Mr. Murray's employment without notice by paying Mr. Murray the amounts that would otherwise be paid to him during the notice period provided in his employment agreement. In addition, the company may terminate Mr. Murray's employment without notice or payment in the event that (i) the board reasonably believes Mr. Murray has committed a serious breach of his employment agreement, (ii) the board reasonably believes Mr. Murray has committed an act of gross or serious misconduct or willful neglect in the discharge of his duties, (iii) the board reasonably believes Mr. Murray has committed an act of fraud, dishonesty or other conduct tending to bring himself or the company into disrepute, (iv) Mr. Murray becomes prohibited by law from being or acting as a director of the company, (v) Mr. Murray is offered and refuses or fails to accept employment with the surviving entity following a merger or reorganization of the company on terms no less favorable than those in his employment agreement or (vi) Mr. Murray resigns as a director of the company other than at the request of the board. During his employment and for twelve months following his termination, Mr. Murray may not compete with certain businesses of the company or solicit certain employees, customers or potential customers of the company, in each case, without the company's consent, which may not be unreasonably withheld.

Other Elements of Compensation and Perquisites

        Our NEOs are eligible under the same plans as all other employees for medical, dental, vision and short-term disability insurance. In addition, we provide our NEOs with the personal use of Company automobiles and, for our U.S. based NEOs, dues related to golf club memberships which our NEOs use for both personal and professional purposes. We provide these benefits due to their relatively low cost and the high value they provide in attracting and retaining talented executives. Our NEOs do not receive any tax gross up in connection with our provision of these benefits.

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Summary Compensation Table for 2010

        The following table sets forth certain information with respect to the compensation paid to our NEOs for the year ended September 30, 2010.

Name and Principal Position
  Salary ($)   Non-Equity Incentive
Plan Compensation
($)(1)
  Option Awards
($)
  Bonus
($)
  All Other
Compensation ($)
  Total ($)  

Randy Snyder

    644,266     810,000               77,714 (4)   1,531,980  
 

Chief Executive Officer

                                     

Greg Hann

   
300,000
   
243,000
   
87,869

(2)
       
44,775

(5)
 
675,644
 
 

Executive Vice President and Chief Financial Officer

                                     

Hal Weinstein

   
322,133
   
243,000
         
20,000

(3)
 
51,793

(6)
 
636,926
 
 

Executive Vice President, Sales and Marketing

                                     

Tommy Lee

   
309,885
   
164,025
   
         
46,511

(7)
 
520,421
 
 

Executive Vice President

                                     

Alex Murray(8)

   
157,497
   
59,126
   
         
18,673

(9)
 
235,386
 
 

Vice President, Global Operations

                                     

(1)
Represents the bonus amounts earned under our annual bonus program for fiscal the year ended September 30, 2010. For a discussion of the determination of these amounts, see "—Annual Performance-Based Compensation for 2010" above.

(2)
Amount shown represents the incremental fair value attributable to an amendment to Mr. Hann's outstanding stock options, as described above in "—Discretionary Long-Term Equity Incentive Awards." This amount has been calculated in accordance with FASB ASC Topic 718 as of the date of such amendment. For information regarding the assumptions used when calculating this amount, refer to note 13 of our consolidated financial statements for the year ended September 30, 2010, which are included elsewhere in this prospectus.

(3)
Amount shown represents a discretionary bonus paid to Mr. Weinstein for his 2010 service, as determined by the compensation committee.

(4)
Includes $22,433 for country club membership dues and fees, $47,931 for use of Company automobile and $7,350 for 401(k) matching contribution. The cost for personal use of a company automoblile includes costs associated with the lease, gas, insurance and maintenance of such automobile.

(5)
Includes $16,910 for country club membership dues and fees, $20,515 for use of Company automobile and $7,350 for 401(k) matching contribution.

(6)
Includes $28,148 for country club membership dues and fees, $16,295 for use of Company automobile and $7,350 for 401(k) matching contribution.

(7)
Includes $20,864 for country club membership dues and fees, $18,297 for use of Company automobile and $7,350 for 401(k) matching contribution.

(8)
Amounts presented for Mr. Murray are based on an assumed conversion ratio of pounds to dollars of 1.5809, which was the exchange rate in effect on September 30, 2010.

(9)
Includes automobile allowance of $15,809 and $2,864 for supplemental medical benefits.

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Grants of Plan-Based Awards for 2010

 
   
  Estimated Possible
Payouts Under Non-Equity
Incentive Plan Awards(1)
 
Name
  Grant Date   Target ($)   Maximum ($)  

Randy Snyder

    10/1/2009     600,000     1,200,000  

Greg Hann

    10/1/2009     180,000     360,000  

Hal Weinstein

    10/1/2009     180,000     360,000  

Tommy Lee

    10/1/2009     121,500     243,000  

Alex Murray

    10/1/2009     59,126     118,252  

(1)
Amounts shown reflect the possible payment amounts to our NEOs under our Management Annual Incentive Plan for fiscal year 2010. There are no applicable threshold level performance metrics. Payments under the plan were made to the NEOs in December 2010. The amounts actually paid to each NEO are set forth under "Non-Equity Incentive Plan Compensation" in the "Summary Compensation Table for 2010" above.

Outstanding Equity Awards at Fiscal Year End

        The following table provides information regarding the stock options held by our NEOs as of September 30, 2010.

Name
  Number of
Securities
Underlying
Unexercised
Options—
Exercisable (#)
  Number of Securities
Underlying
Unexercised Options—
Unexercisable (#)
  Equity Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
  Option Exercise
Price ($)
  Option Expiration
Date
 

Randy Snyder

    1,499,998     98,360 (1)   368,853 (2)   4.13     5/17/2017  

Greg Hann

    356,558     49,181 (1)   184,427 (2)   6.30     1/29/2019  

Hal Weinstein

    750,002     49,181 (1)   184,427 (2)   4.13     5/17/2017  

Tommy Lee

    225,000     14,754 (1)   55,329 (2)   4.13     5/17/2017  

Alex Murray

    300,001     19,672 (1)   73,775 (2)   4.13     5/17/2017  

(1)
These options will become exercisable on September 30, 2011, subject to the NEO's continued service with us on such date.

(2)
These options will become exercisable on September 30, 2011, subject to the NEO's continued service with us on such date and our attainment of EBITDA, Cash Flow and supplemental Cash Flow targets for such year, as described in more detail above under "Discretionary Long-Term Equity Incentive Awards."

Options Exercised and Stock Vested in 2010

        None of our NEOs exercised options or became vested in shares of our common stock during the year ended September 30, 2010.

Nonqualified Deferred Compensation

        The following table provides details with respect to the outstanding restricted stock units held by our NEOs. Mr. Weinstein holds 1,320,085.89 restricted stock units, Mr. Lee holds 818,749.89 restricted stock units and Mr. Murray holds 78,315.21 restricted stock units. The restricted stock units were

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granted to each of the NEOs in September 2006 and became fully vested on September 29, 2009. Each restricted stock unit represents the right to receive one share of our common stock, which will be distributed to the NEOs in the form of shares of our common stock on the first to occur of a change in control or September 28, 2012.

Name
  Plan Name   Executive
Contributions in
Last FY
($)
  Registrant
Contributions in
Last FY
($)
  Aggregate
Earnings in
Last FY
($)(1)
  Aggregate
Withdrawals/
Distributions
($)
  Aggregate
Balance at
Last FYE
($)(2)
 

Hal Weinstein

  Restricted Stock Units             1,959,594         10,267,334  

Tommy Lee

  Restricted Stock Units             1,215,389         6,368,055  

Alex Murray

  Restricted Stock Units             116,255         609,118  

(1)
Reflects the change in value of the shares underlying the restricted stock units during fiscal year 2010.

(2)
Reflects the aggregate value of the shares underlying the restricted stock units as of September 30, 2010, based on a per share value of $7.78 as of such date.

Potential Payments upon Termination or Change-in-Control

        Each of Messrs. Snyder, Hann, Weinstein and Murray has an agreement that provides for severance benefits upon a termination of employment. See "—Employment and Severance Arrangements" above for a description of the employment and severance agreements with our NEOs. Assuming a termination of employment effective as of September 30, 2010 (i) by us without cause, (ii) due to our nonextension of the executive's employment term or (iii) due to the executive's resignation for good reason, each of our NEOs would have received the following severance payments and benefits:

Name
  Payment Type   Termination Without
Cause ($)
  Resignation for Good
Reason ($)
  Termination due to Non-
Extension of Term ($)
 

Randy Snyder

  Salary     1,950,000     1,950,000     1,950,000  

  Bonus     877,500     877,500     877,500  

  Option vesting(1)     359,346     359,346     359,346  

  Benefit continuation(2)