Intrinsic value of KLX - KLXI

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$47.40

  Intrinsic Value

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  Rating & Target

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  Value-price divergence*

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Previous close

$47.40

 
Intrinsic value

$10.46

 
Up/down potential

-78%

 
Rating

str. sell

 
Value-price divergence* premium content

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*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of KLXI stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2017), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 2.5

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2017(a)
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  -2.30
  6.70
  6.53
  6.38
  6.24
  6.12
  6.00
  5.90
  5.81
  5.73
  5.66
  5.59
  5.53
  5.48
  5.43
  5.39
  5.35
  5.32
  5.28
  5.26
  5.23
  5.21
  5.19
  5.17
  5.15
  5.14
  5.12
  5.11
  5.10
  5.09
  5.08
Revenue, $m
  1,531
  1,634
  1,740
  1,851
  1,967
  2,087
  2,212
  2,343
  2,479
  2,621
  2,770
  2,924
  3,086
  3,255
  3,432
  3,617
  3,811
  4,013
  4,225
  4,447
  4,680
  4,924
  5,179
  5,446
  5,727
  6,021
  6,330
  6,653
  6,992
  7,348
  7,721
Variable operating expenses, $m
 
  2,194
  2,337
  2,486
  2,641
  2,803
  2,971
  3,147
  3,329
  3,520
  3,719
  3,927
  4,145
  4,372
  4,609
  4,858
  5,118
  5,390
  5,675
  5,973
  6,285
  6,612
  6,955
  7,315
  7,691
  8,086
  8,501
  8,935
  9,391
  9,868
  10,370
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  1,391
  2,194
  2,337
  2,486
  2,641
  2,803
  2,971
  3,147
  3,329
  3,520
  3,719
  3,927
  4,145
  4,372
  4,609
  4,858
  5,118
  5,390
  5,675
  5,973
  6,285
  6,612
  6,955
  7,315
  7,691
  8,086
  8,501
  8,935
  9,391
  9,868
  10,370
Operating income, $m
  139
  -560
  -597
  -635
  -675
  -716
  -759
  -804
  -850
  -899
  -950
  -1,003
  -1,059
  -1,117
  -1,177
  -1,241
  -1,307
  -1,377
  -1,449
  -1,525
  -1,605
  -1,689
  -1,776
  -1,868
  -1,964
  -2,065
  -2,171
  -2,282
  -2,398
  -2,520
  -2,648
EBITDA, $m
  206
  -535
  -570
  -606
  -644
  -683
  -724
  -767
  -812
  -858
  -907
  -958
  -1,011
  -1,066
  -1,124
  -1,184
  -1,248
  -1,314
  -1,384
  -1,456
  -1,532
  -1,612
  -1,696
  -1,783
  -1,875
  -1,972
  -2,073
  -2,179
  -2,290
  -2,406
  -2,528
Interest expense (income), $m
  0
  0
  3
  7
  11
  15
  19
  23
  27
  32
  37
  42
  47
  52
  58
  64
  70
  77
  84
  91
  98
  106
  114
  123
  132
  142
  152
  162
  173
  184
  196
Earnings before tax, $m
  63
  -560
  -600
  -642
  -685
  -731
  -778
  -827
  -878
  -931
  -987
  -1,045
  -1,106
  -1,169
  -1,235
  -1,305
  -1,377
  -1,453
  -1,533
  -1,616
  -1,704
  -1,795
  -1,891
  -1,991
  -2,096
  -2,207
  -2,323
  -2,444
  -2,571
  -2,705
  -2,845
Tax expense, $m
  8
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  55
  -560
  -600
  -642
  -685
  -731
  -778
  -827
  -878
  -931
  -987
  -1,045
  -1,106
  -1,169
  -1,235
  -1,305
  -1,377
  -1,453
  -1,533
  -1,616
  -1,704
  -1,795
  -1,891
  -1,991
  -2,096
  -2,207
  -2,323
  -2,444
  -2,571
  -2,705
  -2,845

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  277
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  3,705
  3,655
  3,893
  4,141
  4,400
  4,669
  4,949
  5,241
  5,546
  5,864
  6,196
  6,542
  6,904
  7,283
  7,678
  8,092
  8,525
  8,978
  9,452
  9,949
  10,470
  11,015
  11,586
  12,185
  12,812
  13,470
  14,160
  14,884
  15,642
  16,439
  17,274
Adjusted assets (=assets-cash), $m
  3,428
  3,655
  3,893
  4,141
  4,400
  4,669
  4,949
  5,241
  5,546
  5,864
  6,196
  6,542
  6,904
  7,283
  7,678
  8,092
  8,525
  8,978
  9,452
  9,949
  10,470
  11,015
  11,586
  12,185
  12,812
  13,470
  14,160
  14,884
  15,642
  16,439
  17,274
Revenue / Adjusted assets
  0.447
  0.447
  0.447
  0.447
  0.447
  0.447
  0.447
  0.447
  0.447
  0.447
  0.447
  0.447
  0.447
  0.447
  0.447
  0.447
  0.447
  0.447
  0.447
  0.447
  0.447
  0.447
  0.447
  0.447
  0.447
  0.447
  0.447
  0.447
  0.447
  0.447
  0.447
Average production assets, $m
  262
  279
  298
  317
  336
  357
  378
  401
  424
  448
  474
  500
  528
  557
  587
  619
  652
  686
  723
  760
  800
  842
  886
  931
  979
  1,030
  1,082
  1,138
  1,196
  1,257
  1,320
Working capital, $m
  1,713
  817
  870
  926
  983
  1,044
  1,106
  1,171
  1,240
  1,311
  1,385
  1,462
  1,543
  1,628
  1,716
  1,809
  1,905
  2,007
  2,113
  2,224
  2,340
  2,462
  2,589
  2,723
  2,864
  3,011
  3,165
  3,326
  3,496
  3,674
  3,861
Total debt, $m
  0
  98
  201
  308
  419
  535
  656
  782
  913
  1,050
  1,193
  1,343
  1,499
  1,662
  1,832
  2,011
  2,197
  2,393
  2,597
  2,811
  3,035
  3,270
  3,517
  3,775
  4,045
  4,329
  4,626
  4,938
  5,265
  5,608
  5,968
Total liabilities, $m
  1,477
  1,575
  1,678
  1,785
  1,896
  2,012
  2,133
  2,259
  2,390
  2,527
  2,670
  2,820
  2,976
  3,139
  3,309
  3,488
  3,674
  3,870
  4,074
  4,288
  4,512
  4,747
  4,994
  5,252
  5,522
  5,806
  6,103
  6,415
  6,742
  7,085
  7,445
Total equity, $m
  2,228
  2,079
  2,215
  2,356
  2,504
  2,657
  2,816
  2,982
  3,156
  3,337
  3,525
  3,723
  3,929
  4,144
  4,369
  4,604
  4,851
  5,109
  5,378
  5,661
  5,957
  6,267
  6,592
  6,933
  7,290
  7,664
  8,057
  8,469
  8,901
  9,354
  9,829
Total liabilities and equity, $m
  3,705
  3,654
  3,893
  4,141
  4,400
  4,669
  4,949
  5,241
  5,546
  5,864
  6,195
  6,543
  6,905
  7,283
  7,678
  8,092
  8,525
  8,979
  9,452
  9,949
  10,469
  11,014
  11,586
  12,185
  12,812
  13,470
  14,160
  14,884
  15,643
  16,439
  17,274
Debt-to-equity ratio
  0.000
  0.050
  0.090
  0.130
  0.170
  0.200
  0.230
  0.260
  0.290
  0.310
  0.340
  0.360
  0.380
  0.400
  0.420
  0.440
  0.450
  0.470
  0.480
  0.500
  0.510
  0.520
  0.530
  0.540
  0.550
  0.560
  0.570
  0.580
  0.590
  0.600
  0.610
Adjusted equity ratio
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  55
  -560
  -600
  -642
  -685
  -731
  -778
  -827
  -878
  -931
  -987
  -1,045
  -1,106
  -1,169
  -1,235
  -1,305
  -1,377
  -1,453
  -1,533
  -1,616
  -1,704
  -1,795
  -1,891
  -1,991
  -2,096
  -2,207
  -2,323
  -2,444
  -2,571
  -2,705
  -2,845
Depreciation, amort., depletion, $m
  67
  25
  27
  29
  31
  32
  34
  36
  39
  41
  43
  45
  48
  51
  53
  56
  59
  62
  66
  69
  73
  77
  81
  85
  89
  94
  98
  103
  109
  114
  120
Funds from operations, $m
  143
  -535
  -573
  -613
  -655
  -698
  -743
  -790
  -839
  -890
  -944
  -999
  -1,058
  -1,118
  -1,182
  -1,249
  -1,318
  -1,391
  -1,467
  -1,547
  -1,631
  -1,718
  -1,810
  -1,907
  -2,007
  -2,113
  -2,224
  -2,340
  -2,462
  -2,590
  -2,725
Change in working capital, $m
  -10
  51
  53
  55
  58
  60
  63
  65
  68
  71
  74
  77
  81
  85
  88
  92
  97
  101
  106
  111
  116
  122
  128
  134
  140
  147
  154
  162
  170
  178
  187
Cash from operations, $m
  153
  -848
  -627
  -669
  -713
  -758
  -806
  -855
  -907
  -961
  -1,018
  -1,077
  -1,139
  -1,203
  -1,270
  -1,341
  -1,415
  -1,492
  -1,573
  -1,658
  -1,747
  -1,840
  -1,938
  -2,040
  -2,148
  -2,260
  -2,378
  -2,502
  -2,632
  -2,768
  -2,911
Maintenance CAPEX, $m
  0
  -24
  -25
  -27
  -29
  -31
  -32
  -34
  -36
  -39
  -41
  -43
  -45
  -48
  -51
  -53
  -56
  -59
  -62
  -66
  -69
  -73
  -77
  -81
  -85
  -89
  -94
  -98
  -103
  -109
  -114
New CAPEX, $m
  -38
  -17
  -18
  -19
  -20
  -21
  -21
  -22
  -23
  -24
  -25
  -26
  -28
  -29
  -30
  -32
  -33
  -35
  -36
  -38
  -40
  -42
  -44
  -46
  -48
  -50
  -53
  -55
  -58
  -61
  -64
Cash from investing activities, $m
  -258
  -41
  -43
  -46
  -49
  -52
  -53
  -56
  -59
  -63
  -66
  -69
  -73
  -77
  -81
  -85
  -89
  -94
  -98
  -104
  -109
  -115
  -121
  -127
  -133
  -139
  -147
  -153
  -161
  -170
  -178
Free cash flow, $m
  -105
  -889
  -670
  -715
  -761
  -809
  -860
  -912
  -967
  -1,024
  -1,084
  -1,146
  -1,212
  -1,280
  -1,351
  -1,426
  -1,504
  -1,586
  -1,672
  -1,762
  -1,856
  -1,955
  -2,058
  -2,167
  -2,280
  -2,400
  -2,525
  -2,656
  -2,793
  -2,938
  -3,089
Issuance/(repayment) of debt, $m
  0
  98
  103
  107
  111
  116
  121
  126
  131
  137
  143
  149
  156
  163
  171
  178
  187
  195
  204
  214
  224
  235
  246
  258
  270
  284
  297
  312
  327
  343
  360
Issuance/(repurchase) of shares, $m
  -43
  643
  703
  749
  797
  846
  898
  953
  1,009
  1,068
  1,130
  1,194
  1,262
  1,332
  1,406
  1,483
  1,564
  1,649
  1,737
  1,830
  1,928
  2,030
  2,137
  2,249
  2,367
  2,490
  2,620
  2,756
  2,898
  3,048
  3,205
Cash from financing (excl. dividends), $m  
  -43
  741
  806
  856
  908
  962
  1,019
  1,079
  1,140
  1,205
  1,273
  1,343
  1,418
  1,495
  1,577
  1,661
  1,751
  1,844
  1,941
  2,044
  2,152
  2,265
  2,383
  2,507
  2,637
  2,774
  2,917
  3,068
  3,225
  3,391
  3,565
Total cash flow (excl. dividends), $m
  -151
  -791
  -567
  -608
  -650
  -693
  -739
  -786
  -836
  -887
  -941
  -997
  -1,056
  -1,117
  -1,181
  -1,248
  -1,318
  -1,391
  -1,468
  -1,548
  -1,632
  -1,720
  -1,812
  -1,909
  -2,010
  -2,116
  -2,227
  -2,344
  -2,466
  -2,595
  -2,729
Retained Cash Flow (-), $m
  -25
  -128
  -136
  -141
  -147
  -153
  -159
  -166
  -173
  -181
  -189
  -197
  -206
  -215
  -225
  -235
  -246
  -258
  -270
  -283
  -296
  -310
  -325
  -341
  -357
  -374
  -393
  -412
  -432
  -453
  -475
Prev. year cash balance distribution, $m
 
  277
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Discount rate, %
 
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  100
  77.5
  59.7
  45.9
  35.4
  27.3
  21.0
  16.2
  12.4
  9.6
  7.4
  5.7
  4.4
  3.4
  2.6
  2.0
  1.5
  1.2
  0.9
  0.7
  0.5
  0.4
  0.3
  0.2
  0.2
  0.1
  0.1
  0.1
  0.1
  0.0
  0.0

KLX Inc., together with its subsidiaries, provides aerospace fasteners, consumables, and logistics services worldwide. It operates in two segments, Aerospace Solutions Group (ASG) and Energy Services Group (ESG). The ASG segment distributes bolts, clips, hinges, rings, screws, carbon-faced seals, gaskets, O-rings, and others; chemicals, sealants and adhesives, lubricants, paints, cleaners, and degreasers; Honeywell proprietary parts; and bearings, tooling, electrical components, and clamps. This segment also provides inventory management services and technical support services, as well as operates an e-commerce site that provides customized solutions for customers. It serves commercial airlines; business jet and defense original equipment manufacturers and their subcontractors; airlines; maintenance, repair, and overhaul operators; and fixed base operators. The ESG segment offers onshore completion services, including placement and removal of flow control nipples and valves, completion packers, bridge plugs, and composite flow through frac plugs, as well as downhole services tools; and wireline services, such as composite frac plug pump downs, pipe recovery and perforation, and evaluation and logging services. This segment also provides fishing (retrieval) services and equipment; down-hole completion and production services; pressure control services and rental equipment to assist its clients at the well site; and machine shop services, which consist of CNC lathes, milling machines, spindle lathes, and other machining equipment to rework and rectify damaged equipment, as well as to design/build specialized fit-for-purpose tools. In addition, it offers mobile, customizable workforce accommodations and offices, and associated rental equipment to its customers at their remote field locations. It primarily serves regional or independent oil companies. KLX Inc. is headquartered in Wellington, Florida.

FINANCIAL RATIOS  of  KLX (KLXI)

Valuation Ratios
P/E Ratio 45.9
Price to Sales 1.7
Price to Book 1.1
Price to Tangible Book
Price to Cash Flow 16.5
Price to Free Cash Flow 22
Growth Rates
Sales Growth Rate -2.3%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -71%
Cap. Spend. - 3 Yr. Gr. Rate 5.6%
Financial Strength
Quick Ratio NaN
Current Ratio 0.2
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets 1.5%
Ret/ On Assets - 3 Yr. Avg. -1.6%
Return On Total Capital 2%
Ret/ On T. Cap. - 3 Yr. Avg. -2%
Return On Equity 2.5%
Return On Equity - 3 Yr. Avg. -3.4%
Asset Turnover 0.4
Profitability Ratios
Gross Margin 24.6%
Gross Margin - 3 Yr. Avg. 25.8%
EBITDA Margin 8.5%
EBITDA Margin - 3 Yr. Avg. -1%
Operating Margin 9.1%
Oper. Margin - 3 Yr. Avg. -3.5%
Pre-Tax Margin 4.1%
Pre-Tax Margin - 3 Yr. Avg. -6.9%
Net Profit Margin 3.6%
Net Profit Margin - 3 Yr. Avg. -5.3%
Effective Tax Rate 12.7%
Eff/ Tax Rate - 3 Yr. Avg. 37.9%
Payout Ratio 0%

KLXI stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the KLXI stock intrinsic value calculation we used $1531 million for the last fiscal year's total revenue generated by KLX. The default revenue input number comes from 2017 income statement of KLX. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our KLXI stock valuation model: a) initial revenue growth rate of 6.7% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for KLXI is calculated based on our internal credit rating of KLX, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of KLX.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of KLXI stock the variable cost ratio is equal to 134.3%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for KLXI stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.5% for KLX.

Corporate tax rate of 27% is the nominal tax rate for KLX. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the KLXI stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for KLXI are equal to 17.1%.

Life of production assets of 11 years is the average useful life of capital assets used in KLX operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for KLXI is equal to 50%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $2228 million for KLX - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 53.244 million for KLX is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of KLX at the current share price and the inputted number of shares is $2.5 billion.


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COMPANY NEWS

▶ ETFs with exposure to KLX, Inc. : April 19, 2017   [Apr-19-17 02:25PM  Capital Cube]
▶ KLX Inc. Announces Filing of Extension for Form 10-K   [Apr-04-17 06:30AM  GlobeNewswire]
▶ KLX beats 4Q profit forecasts   [05:10AM  Associated Press]
▶ 5 Small-cap Stocks Billionaires Are Piling Into   [Nov-30-16 02:02PM  at Insider Monkey]
▶ KLX Inc. Announces Major New Business Award   [Oct-20-16 08:30AM  GlobeNewswire]
▶ [$$] KLX Shares Could Lift Off As Aerospace Sales Rebound   [Sep-24-16 01:00AM  at Barrons.com]
▶ Five Aerospace Stocks Hedge Funds Like for Q2   [Jun-02-16 09:34AM  at Insider Monkey]
Stock chart of KLXI Financial statements of KLXI
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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