AAR(AIR) - 2025 Q1 - Quarterly Results

Financial Performance - First quarter sales of $662 million, up 20% over the prior year[1] - First quarter GAAP diluted earnings per share of$ 0.50 compared to a loss per share of $0.02 in Q1 FY2024[1] - First quarter adjusted diluted earnings per share of$ 0.85, up 9% from $0.78 in Q1 FY2024[1] - Sales growth of 20% in both commercial and government businesses[2] - Net income improved to$ 18.0 million from a loss of $0.6 million in the prior year period[13] - Third-party sales increased to$ 661.7 million from $549.7 million, a 20.4% growth[14] - Adjusted net income rose to$ 30.3 million from $27.3 million, an 11.0% increase[18] - Adjusted diluted earnings per share increased to$ 0.85 from $0.78, a 9.0% rise[19] - Sales for the three months ended August 31, 2024, were$ 661.7 million, compared to $656.5 million for the same period in 2023, representing a 0.8% increase[20] - Adjusted operating income for the three months ended August 31, 2024, was$ 59.2 million, compared to $61.3 million for the same period in 2023, a decrease of 3.4%[20] - Adjusted EBITDA for the three months ended August 31, 2024, was$ 73.7 million, compared to $52.1 million for the same period in 2023, a 41.5% increase[21] - Adjusted EBITDA for the twelve months ended August 31, 2024, was$ 264.0 million, compared to $242.4 million for the year ended May 31, 2024, an 8.9% increase[23] - Pro forma adjusted EBITDA for the twelve months ended August 31, 2024, was$ 284.4 million, including $20.4 million from Product Support for the six months ended February 29, 2024[24] Operating Margins and Expenses - Operating margins were 6.6% in the current quarter, compared to 4.6% in the prior year quarter[4] - Adjusted operating margin increased from 7.3% in the prior year quarter to 9.1% in the current year quarter[4] - Net interest expense for the quarter was$ 18.3 million, compared to $5.4 million last year[4] - Adjusted operating margin for the three months ended August 31, 2024, was 9.1%, compared to 9.3% for the same period in 2023, a slight decrease of 0.2 percentage points[20] Cash Flow and Debt - Cash flow used in operating activities was$ 18.6 million during the current quarter compared to $18.7 million in the prior year quarter[6] - Net debt was$ 942.7 million as of August 31, 2024[6] - Cash and cash equivalents decreased to $49.3 million from$ 85.8 million, a 42.5% decline[12] - Net cash used in operating activities was $18.6 million, similar to$ 18.7 million in the prior year[13] - Net debt as of August 31, 2024, was $942.7 million, compared to$ 236.7 million as of August 31, 2023, a significant increase of 298.3%[22] - Net debt to pro forma adjusted EBITDA ratio as of August 31, 2024, was 3.31, indicating a higher leverage position compared to previous periods[24] - Cash flows used in operating activities for the three months ended August 31, 2024, were $(18.6) million, slightly improved from$ (18.7) million for the same period in 2023[21] - Total debt as of August 31, 2024, was $992.0 million, compared to$ 307.0 million as of August 31, 2023, a 223.1% increase[22] Segment Performance - Parts Supply segment sales grew to $249.7 million from$ 236.8 million, a 5.4% increase[14] - Repair & Engineering segment sales surged to $217.6 million from$ 137.5 million, a 58.3% jump[14] Contracts and Receivables - Received multiple new contract awards, including two five-year firm fixed price IDIQ contracts with an aggregate ceiling value of approximately $1.2 billion each from the U.S. Navy's NAVAIR[4] - Accounts receivable increased to$ 310.9 million from $287.2 million, an 8.2% rise[12] Assets and Liabilities - Total assets remained stable at$ 2,783.3 million compared to $2,770.0 million in the prior quarter[12]