AAR Reviews Third Quarter Fiscal Yr 2025 Outcomes

(MENAFN– PR Newswire)

WOOD DALE, Sick., March 27, 2025 /PRNewswire/ — AAR CORP. (NYSE: AIR ), a number one supplier of aviation companies to business and authorities operators, MROs, and OEMs, reported right this moment monetary outcomes for the fiscal 12 months 2025 third quarter ended February 28, 2025.

THIRD QUARTER FISCAL YEAR 2025 HIGHLIGHTS
(As in comparison with Q3 FY2024)

• Gross sales of $678 million; elevated 20%
• GAAP EPS of $(0.25)
• Adjusted diluted EPS of $0.99; elevated 16%
• GAAP Internet loss of $9 million
• Adjusted EBITDA of $81 million; elevated 39%
• Adjusted EBITDA margin elevated to 12.0% from 10.3%

MANAGEMENT COMMENTARY

“We delivered one other sturdy quarter of serious year-over-year gross sales and earnings development,” mentioned John M. Holmes, AAR’s Chairman, President and Chief Govt Officer. “Gross sales have been 20% larger than in the identical quarter final 12 months as demand stays elevated for our aftermarket companies. Components Provide gross sales elevated 12%, pushed by spectacular beneficial properties in our new elements Distribution with each business and authorities actions. Our Restore & Engineering phase gross sales elevated greater than 53% year-over-year, with important contributions from the Product Help acquisition in addition to elevated throughput inside our Airframe MRO services. Built-in Options additionally posted significant earnings development from each business and authorities packages in addition to notable contributions from Trax.”

Holmes continued, “We’re notably pleased with the progress on EBITDA margin which expanded from 10.3% to 12.0% year-over-year. Along with contributions from our Product Help acquisition, our inner initiatives to drive effectivity enhancements proceed to supply significant outcomes. We’re centered on additional rising our margins as we totally combine the Product Help acquisition and drive further efficiencies all through the Firm.”

“Subsequent to the quarter, we introduced a number of new enterprise wins, together with signing an unique settlement with Chromalloy to distribute their BELAC PW4000 PMA elements. We additionally added distribution help for choose Unison elements underneath our Provider Capabilities Contract with Protection Logistics Company (DLA). These wins additional validate our distinctive worth proposition to each prospects and suppliers as a number one impartial distributor within the aviation aftermarket. Individually, and in addition subsequent to the quarter, we introduced that Cathay Pacific chosen Trax to be the upkeep working system for the airline.”

RECENT UPDATES

NEW BUSINESS

• Multi-year unique settlement with Unison to distribute choose elements underneath AAR’s Provider Capabilities Contract with Protection Logistics Company (DLA).
• Multi-year unique settlement with Chromalloy to distribute Components Producer Approval (PMA) turbine blades for the PW4000 engine by way of their wholly owned subsidiary, BELAC, LLC.
• Multi-year settlement with Cebu Pacific Air for CFM56 engine nacelle upkeep, restore and overhaul companies for the airline’s A320 fleet.
• Multi-year license settlement with Cathay Pacific for Trax software program.

PORTFOLIO UPDATE

• Anticipated timing of the sale of our Touchdown Gear Overhaul enterprise for $51 million is about for the fourth quarter of fiscal 12 months 2025. The divestiture is a part of the Firm’s technique to optimize its portfolio.

THIRD QUARTER FISCAL YEAR 2025 RESULTS

Consolidated third quarter gross sales elevated 20% to $678.2 million, in comparison with $567.3 million in the identical quarter final 12 months. This displays a 22% enhance in consolidated gross sales to business prospects, primarily because of the Product Help acquisition and robust demand all through the Firm’s Components Provide phase. Gross sales to authorities prospects elevated 15% from the identical interval final 12 months, primarily because of elevated order quantity for brand spanking new elements Distribution actions. Gross sales to business prospects have been 72% of consolidated gross sales, in comparison with 70% within the prior 12 months quarter.

Third quarter outcomes embrace a pre-tax cost of $63.7 million related to the not too long ago introduced divestiture of the Firm’s Touchdown Gear Overhaul enterprise. On account of this cost, the Firm reported a web lack of $8.9 million, or $0.25 per share. For the third quarter of the prior 12 months, the Firm reported web revenue of $14.0 million, or $0.39 per diluted share. Adjusted diluted earnings per share within the third quarter of fiscal 12 months 2025 have been $0.99, in comparison with $0.85 within the third quarter of the prior 12 months.

Promoting, basic, and administrative bills have been $61.3 million within the present quarter, in comparison with $77.0 million within the prior 12 months quarter. The third quarter included the reversal of a authorized cost of $11.1 million associated to the Russian courtroom judgment which AAR efficiently appealed. Acquisition, amortization, and integration bills have been $5.3 million within the quarter, in comparison with $12.2 million within the prior 12 months quarter.

Working margins have been 10.5% within the quarter, in comparison with 5.8% within the prior 12 months quarter. Adjusted working margin elevated to 9.7% within the present 12 months quarter from 8.3% within the prior 12 months quarter, primarily because of development in Restore & Engineering. Sequentially, our adjusted working margin elevated from 9.2% to 9.7%, pushed by improved profitability in Components Provide in addition to Trax and government-related companies in Built-in Options.

Internet curiosity expense for the quarter was $18.1 million, in comparison with $11.3 million final 12 months, primarily because of elevated debt ranges because of funding the Product Help acquisition. Common diluted share rely elevated from 35.2 million shares within the prior 12 months quarter to 35.4 million shares within the present 12 months quarter.

Money circulate utilized in working actions was $18.7 million throughout the present quarter, in comparison with $20.4 million of money supplied within the prior 12 months quarter. As a reminder, throughout the quarter, we paid the $56 million FCPA settlement which was a use of money inside working actions. Excluding the accounts receivable financing program, money circulate utilized in working actions was $15.0 million within the present quarter. As of February 28, 2025, web debt was $947.6 million and web leverage was 3.06x.

Holmes concluded, “We’re pleased with the gross sales development and important margin growth we delivered this quarter. Demand for our companies stays very excessive and we anticipate our gross sales development to proceed. Moreover, we count on additional margin growth by way of development in new elements Distribution, Trax, Airframe MRO efficiencies and the conclusion of Product Help synergies. Now we have diminished our web leverage from 3.58x on the time of the Product Help acquisition to three.06x one 12 months later. We count on additional deleveraging in our fourth quarter and all through our fiscal 12 months 2026. We imagine our continued development, margin growth, and disciplined capital allocation will drive further worth to shareholders.”

Convention name info

On Thursday, March 27, 2025, at 4 p.m. Central time, AAR will maintain a convention name to debate the outcomes. A listen-only webcast and slides might be accessed at . Members might be part of by way of cellphone by registering at . As soon as registered, individuals will obtain a dial-in quantity and a singular PIN that may permit them to entry the decision.

A replay of the convention name might be obtainable for on-demand listening shortly after the completion of the decision on the webcast hyperlink and can stay obtainable for roughly one 12 months.

The slides are additionally obtainable on AAR’s web site at .

About AAR

AAR is a worldwide aerospace and protection aftermarket options firm with operations in over 20 nations. Headquartered within the Chicago space, AAR helps business and authorities prospects by way of 4 working segments: Components Provide, Restore & Engineering, Built-in Options, and Expeditionary Companies. Extra info might be discovered at aarcorp/ .

Contact: Denise Pacioni – Director of Investor Relations | +1-630-227-5830 | (e-mail protected)

This press launch accommodates sure statements regarding future outcomes, that are forward-looking statements as that time period is outlined within the Personal Securities Litigation Reform Act of 1995, which replicate administration’s expectations about future situations, together with, however not restricted to, continued demand within the business and authorities aviation markets, anticipated actions and advantages underneath prolonged, expanded and new companies, provide and distribution agreements, contributions from our acquisitions, anticipated advantages from the pending sale of our Touchdown Gear Overhaul enterprise, give attention to course of enhancements and efficiencies, further alternatives for margin growth and portfolio optimization, continued gross sales development, earnings efficiency, debt administration, and capital allocation.

Ahead-looking statements usually handle our anticipated future working and monetary efficiency and monetary situation, or targets, targets, commitments, and different enterprise plans, and sometimes may additionally be recognized as a result of they include phrases similar to “anticipate,” “imagine,” “proceed,” “might,” “estimate,” “count on,” “intend,” “probably,” “might,” “would possibly,” “plan,” “potential,” “predict,” “mission,” “search,” “ought to,” “goal,” “will,” “would,” or related expressions and the negatives of these phrases.

These forward-looking statements are based mostly on the beliefs of Firm administration, in addition to assumptions and estimates based mostly on info obtainable to the Firm as of the dates such assumptions and estimates are made, and are topic to sure dangers and uncertainties that might trigger precise outcomes to vary materially from historic outcomes or these anticipated, relying on quite a lot of elements, together with: (i) elements that adversely have an effect on the business aviation trade; (ii) adversarial occasions and damaging publicity within the aviation trade; (iii) a discount in gross sales to the U.S. authorities and its contractors; (iv) value overruns and losses on fixed-price contracts; (v) nonperformance by subcontractors or suppliers; (vi) a discount in outsourcing of upkeep exercise by airways; (vii) a scarcity of expert personnel or work stoppages; (viii) competitors from different firms; (ix) monetary, operational and authorized dangers arising because of working internationally; (x) incapability to combine acquisitions successfully and execute operational and monetary plans associated to the acquisitions, such because the acquisition of Trax USA Corp. and the Product Help Enterprise of Triumph Group, Inc.; (xi) failure to understand the anticipated advantages of acquisitions; (xii) circumstances related to divestitures; (xiii) incapability to get well prices because of fluctuations in market values for aviation merchandise and gear; (xiv) cyber or different safety threats or disruptions; (xv) a must make important capital expenditures to maintain tempo with technological developments in our trade; (xvi) restrictions on use of mental property and tooling essential to our enterprise; (xvii) incapability to totally execute our inventory repurchase program and return capital to stockholders; (xviii) limitations on our potential to entry the debt and fairness capital markets or to attract down funds underneath mortgage agreements; (xix) non-compliance with restrictive and monetary covenants contained in our debt and mortgage agreements; (xx) adjustments in or non-compliance with legal guidelines and laws associated to federal contractors, the aviation trade, worldwide operations, security, and environmental issues, and the prices of complying with such legal guidelines and laws; and (xxi) publicity to product legal responsibility and property claims that could be in extra of our legal responsibility insurance coverage protection. Ought to a number of of these dangers or uncertainties materialize adversely, or ought to underlying assumptions or estimates show incorrect, precise outcomes might range materially from these described. These occasions and uncertainties are troublesome or unimaginable to foretell precisely and lots of are past our management.

For a dialogue of those and different dangers and uncertainties, discuss with our Annual Report on Kind 10-Okay, Half I, “Merchandise 1A, Danger Elements” and our different filings once in a while with the usSecurities and Change Fee. These occasions and uncertainties are troublesome or unimaginable to foretell precisely and lots of are past the Firm’s management. The dangers described in these studies are usually not the one dangers we face, as further dangers and uncertainties are usually not at the moment identified or foreseeable or unimaginable to foretell precisely or dangers which might be past the Firm’s management or deemed immaterial might materially adversely have an effect on our enterprise, monetary situation or outcomes of operations in future durations. We assume no obligation to replace any forward-looking statements to replicate occasions or circumstances after the date of such statements or to replicate the incidence of anticipated or unanticipated occasions.