Investors in AAR Corp. (AIR) need to pay close attention to the stock based on moves in the options market lately. That is because the Aug 15, 2025 $45.00 Put had some of the highest implied volatility of all equity options today.What is Implied Volatility?Implied volatility shows how much movement the market is expecting in the future. Options with high levels of implied volatility suggest that investors in the underlying stocks are expecting a big move in one direction or the other. It could also mean the ...

[Part I](index=3&type=section&id=PART%20I) This section provides an overview of AAR CORP.'s business, segments, government sales, and human capital resources [Item 1. Business](index=3&type=section&id=Item%201.%20Business) AAR CORP. provides aviation aftermarket solutions, achieving 19.9% consolidated sales growth in fiscal 2025 through strategic acquisitions and portfolio optimization Fiscal 2025 Sales Performance | Category | Sales (in millions) | Year-over-Year Change | Key Drivers | | :--- | :--- | :--- | :--- | | **Consolidated Sales** | $2,780.5 | +19.9% | Strong demand in commercial and government markets. | | Commercial Sales | $1,976.1 | +20.6% | Product Support acquisition and growth in new parts distribution. | | Government Sales | $804.4 | +18.1% | Increased volume in new parts distribution and pallet demand. | - Strategic initiatives in fiscal 2025 included divesting the Landing Gear Overhaul (LGO) business to focus on core, higher-margin offerings and investing in digital technologies to improve service delivery and profitability[13](index=13&type=chunk) - The company is expanding its Airframe MRO capacity with new facilities in Miami, FL (114,000 sq ft) and Oklahoma City, OK (80,000 sq ft), expected to be operational in the next 12-18 months[13](index=13&type=chunk)[28](index=28&type=chunk) - New long-term agreements were secured, including distribution contracts with Unison, Chromalloy, and Ontic, an extension of the USM agreement with FTAI Aviation, and two multi-year contracts with the U.S. Navy for P-8A aircraft support[15](index=15&type=chunk) [Business Segments](index=4&type=section&id=Business%20Segments) The company operates through four segments: Parts Supply, Repair & Engineering, Integrated Solutions, and Expeditionary Services, each contributing to fiscal 2025 sales Fiscal 2025 Sales by Business Segment | Segment | % of Consolidated Sales (FY2025) | | :--- | :--- | | Parts Supply | ~40% | | Repair & Engineering | ~32% | | Integrated Solutions | ~25% | | Expeditionary Services | ~3% | - In fiscal 2025, the company divested its Landing Gear Overhaul (LGO) business for net proceeds of $48 million, recognizing a loss of $71.1 million, as part of its portfolio optimization strategy[24](index=24&type=chunk) - The Integrated Solutions segment's capabilities were enhanced by the fiscal 2023 acquisition of Trax, a leading provider of cloud-based MRO software solutions for airlines and MROs[34](index=34&type=chunk) [Sales to Government and Defense Customers](index=10&type=section&id=Sales%20to%20Government%20and%20Defense%20Customers) Sales to global government and defense customers represented 28.9% of consolidated sales in fiscal 2025, primarily supporting U.S. government operations Sales to Government and Defense Customers (in millions) | Customer Group | FY 2025 | FY 2024 | FY 2023 | | :--- | :--- | :--- | :--- | | Global Govt. & Defense | $804.3 (28.9%) | $681.0 (29.4%) | $661.7 (33.2%) | | U.S. Govt. & Contractors | $687.6 (24.7%) | $576.1 (24.8%) | $577.0 (29.0%) | [Human Capital Resources](index=12&type=section&id=Human%20Capital%20Resources) AAR employs approximately 5,600 people globally, focusing on talent development and a positive work environment - The company employs approximately **5,600 people globally** as of May 31, 2025[55](index=55&type=chunk) - AAR focuses on talent development through its EAGLE Career Pathway program and partnerships like Choose Aerospace and Embry-Riddle Aeronautical University to train and place military veterans and students in aviation maintenance careers[66](index=66&type=chunk) [Item 1A. Risk Factors](index=17&type=page&id=Item%201A.%20Risk%20Factors) The company faces significant risks including industry cyclicality, government contract dependency, operational challenges, cybersecurity threats, and regulatory compliance - **Business & Industry Risks:** The company is highly affected by factors impacting the commercial aviation industry, which accounted for **71.1% of sales in FY2025** - **Government Contract Risks:** U.S. government sales (**24.7% of FY2025 sales**) are subject to funding changes, budgetary constraints, and termination for convenience[92](index=92&type=chunk)[98](index=98&type=chunk) - **Technology & Cybersecurity Risks:** The business faces evolving cyber threats like ransomware and unauthorized access to sensitive data[128](index=128&type=chunk)[129](index=129&type=chunk)[131](index=131&type=chunk) - **Financial & Debt Risks:** As of May 31, 2025, the company had **$977.0 million in total debt**[137](index=137&type=chunk)[139](index=139&type=chunk) - **Legal & Regulatory Risks:** The company must comply with extensive regulations, including the FCPA, ITAR, and FAA rules[146](index=146&type=chunk)[152](index=152&type=chunk)[157](index=157&type=chunk) [Item 1B. Unresolved Staff Comments](index=43&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) There are no unresolved comments from the SEC staff regarding the company's filings - Not Applicable[163](index=163&type=chunk) [Item 1C. Cybersecurity](index=45&type=section&id=Item%201C.%20Cybersecurity) AAR implements a comprehensive cybersecurity risk management program based on the NIST framework, overseen by dedicated leadership and the Board's Audit Committee - The company's cybersecurity strategy is based on the National Institute of Standards and Technology (NIST) framework to identify, assess, and manage risks[166](index=166&type=chunk) - Cybersecurity governance is managed by a dedicated CISO who reports to the CDTO[172](index=172&type=chunk)[174](index=174&type=chunk) [Item 2. Properties](index=47&type=section&id=Item%202.%20Properties) AAR operates globally from owned and leased facilities, including its headquarters and key MRO sites, which are deemed adequate for current needs - The company owns its headquarters in Wood Dale, IL, and several component repair and manufacturing facilities[175](index=175&type=chunk)[176](index=176&type=chunk)[177](index=177&type=chunk) - Major airframe maintenance operations are conducted at leased facilities in the U.S. and Canada[176](index=176&type=chunk) [Item 3. Legal Proceedings](index=47&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in various legal proceedings, including a $55.6 million FCPA settlement, Russian bankruptcy litigation, and a performance guarantee claim - Information on material legal proceedings is incorporated by reference from Note 18 of the Notes to Consolidated Financial Statements[180](index=180&type=chunk) [Item 4. Mine Safety Disclosures](index=47&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is not applicable to the company's operations - Not Applicable[182](index=182&type=chunk) [Part II](index=49&type=section&id=PART%20II) This section details the company's market for common equity, financial condition, results of operations, and market risk disclosures [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=49&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) AAR's common stock trades on the NYSE, with no dividends declared in recent fiscal years, and the company repurchased shares under its program - The company has not declared any dividends in fiscal 2023, 2024, or 2025[192](index=192&type=chunk) Share Repurchases (Quarter Ended May 31, 2025) | Period | Total Shares Purchased | Average Price Paid per Share | Value of Shares Remaining for Purchase | | :--- | :--- | :--- | :--- | | Mar 2025 | — | $ — | $52,544,833 | | Apr 2025 | 192,532 | $52.37 | $42,462,495 | | May 2025 | — | $ — | $42,462,495 | [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=51&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Fiscal 2025 saw consolidated sales grow 19.9% to $2.78 billion, though net income declined due to a divestiture loss and FCPA settlement, while liquidity remained strong Consolidated Results of Operations (Fiscal Year Ended May 31) | Metric (in millions) | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | Total Sales | $2,780.5 | $2,318.9 | 19.9% | | Gross Profit | $527.7 | $442.3 | 19.3% | | Operating Income | $185.2 | $129.2 | 43.3% | | Net Income | $12.5 | $46.3 | -73.0% | - The effective income tax rate was **67.9% in fiscal 2025**, significantly higher than 20.6% in fiscal 2024, primarily because the majority of the FCPA settlement charge was non-deductible for tax purposes[224](index=224&type=chunk) - Net cash from operating activities was **$36.1 million in FY2025**, a decrease from $43.6 million in FY2024, mainly due to working capital changes, including the timing of customer collections[254](index=254&type=chunk) [Operating Segment Results of Operations](index=56&type=section&id=Operating%20Segment%20Results%20of%20Operations) All four operating segments reported sales growth in fiscal 2025, with significant increases in operating income across the board FY2025 Segment Performance vs. FY2024 | Segment | Sales (in millions) | Sales % Change | Operating Income (in millions) | Op. Income % Change | | :--- | :--- | :--- | :--- | :--- | | Parts Supply | $1,099.6 | 13.7% | $156.8 | 42.8% | | Repair & Engineering | $884.9 | 38.2% | $81.2 | 54.7% | | Integrated Solutions | $695.3 | 8.3% | $36.4 | 52.3% | | Expeditionary Services | $100.7 | 44.1% | $10.1 | 188.6% | [Liquidity, Capital Resources and Financial Position](index=58&type=section&id=Liquidity%2C%20Capital%20Resources%20and%20Financial%20Position) As of May 31, 2025, AAR maintained strong liquidity with $955.9 million in working capital and access to significant credit facilities and senior notes - At May 31, 2025, the company had working capital of **$955.9 million** and cash of **$96.5 million**[239](index=239&type=chunk) Key Financing Arrangements as of May 31, 2025 | Facility | Total Size (in millions) | Outstanding (in millions) | Availability (in millions) | | :--- | :--- | :--- | :--- | | Amended Revolving Credit Facility | $825.0 | $427.0 | $390.1 | | 6.75% Senior Notes due 2029 | $550.0 | $550.0 | N/A | | Accounts Receivable Purchase Agreement | $150.0 | $13.9 (utilized) | $136.1 | - During fiscal 2025, the company repurchased **0.2 million shares for $10.1 million** under its stock repurchase program, leaving $107.5 million repurchased since the program's renewal[253](index=253&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures about Market Risk](index=70&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risks are interest rate fluctuations on variable-rate debt and foreign exchange rate changes, with interest rate sensitivity quantified - A **10% increase** in the average interest rate on floating-rate debt would have reduced pre-tax income by **$3.5 million** in fiscal 2025[288](index=288&type=chunk) - Exposure to foreign currency exchange rate risk is not considered material[289](index=289&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=71&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the audited consolidated financial statements for fiscal 2025, including notes detailing significant acquisitions, divestitures, financing, and legal settlements [Consolidated Financial Statements](index=75&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements for fiscal 2025 show increased sales and assets, but a decrease in net income due to specific charges Key Financial Statement Data (in millions) | Metric | May 31, 2025 | May 31, 2024 | | :--- | :--- | :--- | | **Income Statement (FY)** | | | | Total Sales | $2,780.5 | $2,318.9 | | Net Income | $12.5 | $46.3 | | **Balance Sheet** | | | | Total Assets | $2,844.6 | $2,770.0 | | Total Liabilities | $1,633.0 | $1,580.2 | | Total Equity | $1,211.6 | $1,189.8 | [Note 2. Acquisitions](index=97&type=section&id=Note%202.%20Acquisitions) This note details the acquisitions of Triumph's Product Support business for $722.1 million and Trax USA Corp. for $120.0 million, enhancing company capabilities - Completed the acquisition of Triumph's Product Support business on March 1, 2024, for a net purchase price of **$722.1 million** ($725.0 million initial price less $2.9 million in post-closing adjustments)[399](index=399&type=chunk) - Acquired Trax USA Corp. on March 20, 2023, for **$120.0 million** plus potential contingent consideration of up to $20.0 million[406](index=406&type=chunk) [Note 16. Divestitures](index=124&type=section&id=Note%2016.%20Divestitures) In fiscal 2025, the company divested its Landing Gear Overhaul business for $48.0 million, recognizing a total loss of $69.6 million - The LGO business was sold to GA Telesis for net proceeds of **$48.0 million** in the fourth quarter of fiscal 2025[510](index=510&type=chunk) - A total loss of **$69.6 million** was recognized on the divestiture, including a $63.0 million impairment charge and $14.6 million of goodwill written off[509](index=509&type=chunk)[510](index=510&type=chunk) [Note 18. Legal Proceedings and Other Matters](index=130&type=section&id=Note%2018.%20Legal%20Proceedings%20and%20Other%20Matters) This note details the $55.6 million FCPA settlement, a $1.8 million Russian bankruptcy judgment, and a $32 million performance guarantee claim - Resolved FCPA investigations with the DOJ and SEC for **$55.6 million**, which was recognized as a charge in Q2 FY2025[539](index=539&type=chunk)[540](index=540&type=chunk) - Russian litigation concerning VIM-AVIA bankruptcy concluded with a final, non-appealable judgment of **$1.8 million** against the company[531](index=531&type=chunk) - Facing a lawsuit for at least **$32 million** related to a performance guarantee on the divested A220 Contract[536](index=536&type=chunk)[537](index=537&type=chunk) [Item 9A. Controls and Procedures](index=134&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management and KPMG LLP concluded that the company's disclosure controls and internal control over financial reporting were effective as of May 31, 2025 - The CEO and CFO concluded that disclosure controls and procedures were effective as of May 31, 2025[547](index=547&type=chunk) - Management concluded that the company maintained effective internal control over financial reporting as of May 31, 2025[550](index=550&type=chunk)[553](index=553&type=chunk) [Part III](index=138&type=section&id=PART%20III) This section incorporates information on corporate governance, executive compensation, security ownership, and related party transactions by reference from the proxy statement [Items 10-14 (Incorporated by Reference)](index=138&type=section&id=Items%2010%2C%2011%2C%2012%2C%2013%2C%20and%2014) Information for these items, including corporate governance and executive compensation, is incorporated by reference from the 2025 proxy statement - **Item 10:** Information on directors, executive officers, and corporate governance is incorporated by reference[564](index=564&type=chunk) - **Item 11:** Information on executive and director compensation is incorporated by reference[570](index=570&type=chunk) - **Item 12:** Information on security ownership and equity compensation plans is incorporated by reference[571](index=571&type=chunk)[572](index=572&type=chunk) - **Item 13 & 14:** Information on related transactions, director independence, and principal accountant fees is incorporated by reference[573](index=573&type=chunk)[574](index=574&type=chunk) [Part IV](index=140&type=section&id=PART%20IV) This section lists exhibits and financial statement schedules, along with the Form 10-K summary [Item 15. Exhibits, Financial Statement Schedules](index=140&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists exhibits filed with the Form 10-K and notes the inclusion of financial statements in Item 8, with schedules omitted - The consolidated financial statements are set forth under Item 8 of the report[575](index=575&type=chunk) - All financial statement schedules have been omitted because they are not applicable or the required information is included elsewhere in the report[576](index=576&type=chunk) [Item 16. Form 10-K Summary](index=153&type=section&id=Item%2016.%20Form%2016-K%20Summary) This section is not applicable to the company - Not applicable[590](index=590&type=chunk)

Group 1: PNC Financial Services - PNC reported Q2 sales of $5.68 billion, a 5% increase year over year, surpassing estimates of $5.61 billion [4] - Earnings per share (EPS) for Q2 rose 16% to $3.85, exceeding the Zacks EPS Consensus of $3.56 by 8% [4] - PNC's CET1 ratio stands at 10.5%, indicating a strong capital position [3] - The bank announced a quarterly dividend increase of $0.10 to $1.70 per share, with an annual yield of 3.51%, significantly above the industry average of 1.92% [5] Group 2: AAR Corp - AAR Corp's Q4 sales increased by 15% to $754.5 million, exceeding estimates of $691.02 million by 9% [10] - Q4 earnings surged 32% to $1.16 per share, surpassing the expected EPS of $1.00 [10] - AAR Corp has achieved or exceeded earnings expectations for 30 consecutive quarters [10] - The company's stock has risen by 40% in 2025 and over 100% in the last three years [10] Group 3: Industry Context - PNC operates within the top 15% of the Zacks Financial-Investment Bank Industry [2] - AAR Corp is part of the top 30% of the Zacks Aerospace-Defense Equipment Industry, benefiting from increased global defense spending [8]

Core Insights - AAR Corp. reported fourth-quarter fiscal 2025 adjusted earnings of $1.16 per share, exceeding the Zacks Consensus Estimate of $1.00 by 16% and improving 31.8% from the previous year's 88 cents per share [1][7] - The company achieved fiscal 2025 adjusted earnings of $3.91 per share, up from $3.33 in the prior year, driven by improved operating efficiency and surpassing the Zacks Consensus Estimate of $3.75 per share [2] Financial Performance - AAR generated net sales of $754.5 million in the fourth quarter, exceeding the Zacks Consensus Estimate of $691 million by 9.2% and increasing 14.9% from $656.5 million in the same quarter last year [3][7] - Total revenues for fiscal 2025 reached $2.78 billion, up from $2.32 billion in fiscal 2024, and also surpassed the Zacks Consensus Estimate of $2.72 billion [3] Segment Performance - In the fourth quarter, the Parts Supply segment reported sales of $305.5 million, a 17.4% increase year over year [4] - Repair & Engineering sales were $222.6 million, up 2.9% from the prior year [4] - Integrated Solutions sales reached $200.1 million, a 22.4% increase from the previous year [4] - Expeditionary Services recorded sales of $26.3 million, up 61.3% year over year [4] Operational Efficiency - AAR's adjusted operating margin improved from 9.3% to 10.5%, attributed to strong growth and a favorable mix in the Parts Supply segment [5][7] - Selling, general and administrative expenses decreased to $77.4 million from $94.8 million a year ago [5] - Net interest expenses for the quarter were $18.4 million, slightly down from $18.7 million in the prior year [5] Cash and Debt Position - As of May 31, 2025, AAR's cash and cash equivalents were $96.5 million, up from $85.8 million a year earlier [6] - The company's long-term debt decreased to $968 million from $985.4 million as of May 31, 2024 [6] Cash Flow - In fiscal 2025, net cash provided from operating activities was $36.1 million, compared to $43.6 million in the previous year [8]

Company Overview - AAR Corp. is based in Wood Dale, IL, and was incorporated in 1951, providing products and services to the aviation and defense industries globally [12] - The company operates in over 20 nations and reports through four operating segments: Parts Supply, Repair & Engineering, Integrated Solutions, and Expeditionary Services [12] Investment Ratings - AAR Corp. currently holds a Zacks Rank of 2 (Buy) and has a VGM Score of B, indicating a favorable investment outlook [13] - The company has a Momentum Style Score of A, with shares increasing by 11.9% over the past four weeks [13] Earnings Estimates - An analyst has revised AAR's earnings estimate upwards for fiscal 2026, with the Zacks Consensus Estimate increasing by $0.02 to $4.51 per share [13] - AAR boasts an average earnings surprise of +7.8%, suggesting strong performance relative to expectations [13] Investment Considerations - With a solid Zacks Rank and high Momentum and VGM Style Scores, AAR Corp. is recommended for investors looking for potential growth opportunities [14]

Company Performance - AAR reported quarterly earnings of $1.16 per share, exceeding the Zacks Consensus Estimate of $1 per share, and up from $0.88 per share a year ago, representing an earnings surprise of +16.00% [1] - The company achieved revenues of $754.5 million for the quarter ended May 2025, surpassing the Zacks Consensus Estimate by 9.19%, compared to $656.5 million in the same quarter last year [2] - AAR has surpassed consensus EPS estimates in all four of the last quarters and has topped consensus revenue estimates three times during the same period [2] Stock Performance - AAR shares have increased approximately 19.8% since the beginning of the year, significantly outperforming the S&P 500's gain of 6.2% [3] - The current consensus EPS estimate for the upcoming quarter is $1.04 on revenues of $674.26 million, and for the current fiscal year, it is $4.51 on revenues of $2.85 billion [7] Industry Outlook - The Aerospace - Defense Equipment industry, to which AAR belongs, is currently ranked in the top 32% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact AAR's stock performance [5][6]

Financial Data and Key Metrics Changes - The company reported record full-year results of $2,800,000,000, up 20% over the prior year [8] - Adjusted EBITDA margin increased by 140 basis points to 11.8% in fiscal year 2025 [8] - Adjusted diluted earnings per share reached $3.91 compared to $3.33 last year, reflecting a 32% increase [9] Business Line Data and Key Metrics Changes - Parts Supply sales grew 17% to $306,000,000, with above-market growth of over 20% in new parts distribution activities [18][19] - Repair and Engineering sales increased 3% to $223,000,000, with organic sales growth of 8% when excluding the landing gear divestiture [21] - Integrated Solutions adjusted sales increased by 10% year over year to $181,500,000 [22] Market Data and Key Metrics Changes - Sales to government customers increased by 21%, while sales to commercial customers rose by 12% from the same period last year [17] - Total commercial sales accounted for 69% of total sales, with government sales making up the remaining 31% [17] Company Strategy and Development Direction - The company aims to expand market share in new parts distribution and parts supply, while also adding capacity to its heavy maintenance network [26][27] - Focus on achieving $10,000,000 in annual cost synergies from product support integration and continuing the rollout of paperless initiatives [27] - The company plans to pursue accretive acquisitions and optimize its portfolio for further growth [28] Management's Comments on Operating Environment and Future Outlook - Management expects organic sales growth to approach 9% for fiscal year 2026, with Q1 sales growth projected between 6% to 11% [31][32] - The company remains confident in its position within the airframe MRO market, despite potential capacity cuts from competitors [78] Other Important Information - The company reduced its net debt leverage from 3.06 to 2.72x, driven by strong cash flow and proceeds from the landing gear divestiture [24] - The Trax software solution has doubled its revenue from $25,000,000 to $50,000,000 since acquisition, with significant growth opportunities ahead [46][47] Q&A Session Summary Question: Can you discuss the first quarter guidance for revenue growth? - Management indicated that the wide range in guidance is influenced by the USM environment and larger transactions that may fluctuate [38] Question: What caused the step down in adjusted EBITDA margins in the repair and engineering segment? - The margin decline was attributed to the closure of the New York facility, leading to stranded costs, which are expected to improve as the facility exits [40] Question: Where could we see the most margin improvement in 2026? - Management highlighted that repair and engineering has the most opportunity for margin improvement due to completed integration and expected synergies [41] Question: What is the long-term view of Trax's revenue potential? - Management expressed confidence in doubling Trax's revenue again, driven by new business wins and upgrades of existing customers to new offerings [46][47] Question: Can you provide details on the Kira joint venture? - The joint venture aims to access specific DoD markets and allows the company to bid on contracts it could not pursue independently [75]

Financial Data and Key Metrics Changes - The company reported record full-year results of $2,800,000,000, up 20% from the prior year [8] - Adjusted EBITDA margin increased by 140 basis points to 11.8% in fiscal year 2025 [8] - Adjusted diluted earnings per share rose to $3.91 from $3.33 last year, reflecting a 17% increase [9] Business Line Data and Key Metrics Changes - Parts Supply sales grew 17% to $306,000,000 year over year, with above-market growth of over 20% in new parts distribution activities [18][19] - Repair and Engineering sales increased by 3% to $223,000,000, with organic sales growth of 8% when excluding the landing gear divestiture [20] - Integrated Solutions adjusted sales increased by 10% year over year to $181,500,000 [21] Market Data and Key Metrics Changes - Sales to government customers increased by 21%, while sales to commercial customers rose by 12% from the same period last year [16] - Total commercial sales accounted for 69% of total sales, with government sales making up the remaining 31% [16] Company Strategy and Development Direction - The company aims to expand market share in new parts distribution and parts supply, while also adding capacity to its heavy maintenance network [25][26] - Continued focus on cost efficiency and synergy realization, with expectations to achieve $10,000,000 in annual cost synergies [27] - The company plans to enhance its digital offerings and intellectual property through investments in Trax [28] Management's Comments on Operating Environment and Future Outlook - Management expects organic sales growth to approach 9% for fiscal year 2026, based on the previous year's adjusted sales [30] - The company anticipates continued strong demand for airframe MRO services, despite potential capacity reductions from some airlines [76] - Management remains optimistic about the growth potential of the Trax software solution, aiming to double its revenue [46][47] Other Important Information - The company reduced its net debt leverage from 3.06 to 2.72x, driven by strong cash flow and proceeds from the landing gear divestiture [23] - The Oklahoma City and Miami MRO expansions are expected to add 15% capacity to the network, with demand already secured [51] Q&A Session Summary Question: Guidance for revenue growth in the first quarter - Management indicated that the wide range in guidance is influenced by the USM environment and larger transactions that may fluctuate [38] Question: Adjusted EBITDA margins in the repair and engineering segment - The decline in margins was attributed to the closure of the New York facility, with expectations for improvement as the integration is completed [39] Question: Long-term revenue potential for Trax - Management expressed confidence in doubling Trax's revenue, supported by new business wins and upgrades of existing customers [46][47] Question: Capacity in the Oklahoma City and Miami hangars - Management confirmed that the capacity is already sold, with eager customers ready to utilize the facilities as soon as they are operational [51] Question: Growth rate for the Triumph business - The Triumph product support business contributed to an 8% growth in the repair and engineering segment, now fully integrated into the results [50] Question: Long-term vision for the USM business - Management expects USM's contribution to sales to decrease as other segments grow, focusing on parts distribution as a major growth area [66] Question: Potential for restarting dividends or share repurchases - Management indicated that share repurchases would be prioritized over dividends if leverage targets are met without M&A activity [60]

Fourth Quarter Fiscal Year 2025 Earnings Call July 16, 2025 © 2025 AAR CORP. All rights reserved worldwide. 1 Forward-looking Statements Note: All results and expectations in the presentation reflect continuing operations unless otherwise noted. This presentation contains certain statements relating to future results, which are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995, which reflect management's expectations about future conditions, including ...

Exhibit 99.1 AAR reports fourth quarter and fiscal year 2025 results Wood Dale, Illinois, July 16, 2025 — AAR CORP. (NYSE: AIR), a leading provider of aviation services to commercial and government operators, MROs, and OEMs, reported today financial results for the fourth quarter and fiscal year 2025 ended May 31, 2025. FOURTH QUARTER FISCAL YEAR 2025 HIGHLIGHTS (As compared to Q4 FY2024) FISCAL YEAR 2025 HIGHLIGHTS (As compared to FY2024) "In Fiscal Year 2025, we delivered record sales and profitability an ...