When a commercial, business, or military plane takes to the skies, the aircraft is held together by scores of fasteners, bearings, and seals. At KLX Inc., which stocks more than one million of these parts from more than three thousand manufacturers, the company as a financial entity relies largely on the efforts of Heather Floyd, its controller and vice president of finance.
Aerospace was not on Floyd’s radar early on. She began her career as an audit manager at Ernst & Young, but it was never her objective to stay in public accounting long term. “My goal was to make it to the manager level, not to stay to make partner,” she says. “I wanted to gain enough experience to open up opportunities.”
In 2010, that opportunity materialized in the corporate financial reporting department at B/E Aerospace. For Floyd, it was the right fit: coming from a fast-paced environment where she audited an array of different companies, she didn’t want the scope of her activities to narrow. B/E engaged in a number of acquisitions, which gave her exposure to various kinds of accounting and reporting responsibilities. She had the chance to work on purchase accounting for new acquisitions, debt issuances, and equity transactions. The department was lean, with most people having a public accounting background as well. “It was an exciting environment to be a part of,” she says.
Yet, there were differences to get used to. At Ernst & Young, Floyd had managed a huge staff, and now she had only two direct reports who worked rather independently. Client-led meetings at a long conference table gave way to long hours in the office, nose to the grindstone. “I remember on my first day, they asked me to work on purchase accounting entries for two acquisitions that had recently closed,” Floyd says. “It was like, okay, now I have to create this from scratch. That excited me. I liked taking a fresh approach and coming up with work on my own.”
In 2014, B/E had reached a point of maturity that led to a change for the company, as well as Floyd. She had been director of financial reporting and internal controls for three years before being promoted to vice president of internal audit. After a year in that role, the company spun off its distribution branch, which constituted 30 percent of B/E’s business, into its own company: KLX.
“I work closely with the CFO so we can be nimble on our feet and able to adapt to change when it comes.”
The company’s chief financial officer approached Floyd and asked her if she would become corporate controller for the new business. “I didn’t want to pass up the opportunity,” Floyd says. “It was a great transition out of internal audit and a chance to round out my finance and accounting experience.”
Still, she had waded into a fairly major disruption that would take a while to settle down. Employees who had been at the company for a decade or two questioned the strategy. After four years with B/E, Floyd found herself in the position of the new kid on the block once again. Today, Floyd says it’s clear that the split was the right business decision.
“Making the distribution segment a standalone public company brought much more focus and attention to the intricacies of this business,” she says. “It’s enabled us to grow faster and become much more profitable than had we continued to be a segment of a larger organization. It’s nice to see those plans come to fruition.”
The transition required, among other things, an accounting system overhaul. In some cases, the company could only use licenses for the old systems during the transition period. Additionally, B/E was using an accounting system built for a manufacturing business, so KLX embarked on implementing a new system that was more appropriate for distribution operations.
It was a challenging project, as Floyd and her team made sure the new system would harmonize with the way the KLX business operated. So, they developed necessary interfaces, and they did it in less than a year, which Floyd says is pretty phenomenal. At B/E, many of the acquired companies didn’t switch software, so there were more than ten different accounting systems in place. At KLX, everything was under one umbrella.
“It’s been working great,” she says of the new system. “There are little bumps you hit every now and then, but the software has all the components we need.”
Now that things have settled down on the software front, Floyd is free to come to work every day and further focus on her long-term goals. “I see myself as the key resource for finance,” she says. “I want to make sure I’m in tune enough with what’s going on in the businesses so that we can be flexible in reporting and get information to management so they can make decisions in a timely manner. I work closely with the CFO so we can be nimble on our feet and able to adapt to change when it comes.”
Floyd says the innovative spirit of the company’s owners means that change is always on the horizon. That just reaffirms that she made the right decision years ago in leaving public accounting and that any concerns that variety would go by the wayside were unfounded.
“It’s been rewarding for me because I’ve gotten to ride the wave,” Floyd says. “It’s helped my personal growth, as well as my professional growth. We continue to look for other businesses we can acquire to continue to improve our product offering and expand our coverage. All the time, we say, ‘We’re not stopping.’ And I love that.”