AAR(AIR) - 2025 Q2 - Quarterly Results

Financial Performance - Sales for Q2 FY2025 reached $686.1 million, a 26$545.4 million in Q2 FY2024[7] - Organic growth was 12%, accelerating from 6% in Q1 FY2025[3] - Adjusted EBITDA increased by 42% to $78 million, with adjusted EBITDA margins rising to 11.4$31 million, or $(0.87) per share, compared to a net income of$23.8 million, or $0.67 per share, in the prior year[8] - Adjusted net income for the three months ended November 30, 2024, was$32.3 million, compared to $28.8 million in the same period of 2023, representing an increase of 12.2$686.1 million, a 25.8% increase from $545.4 million in the same period of 2023[36] - Adjusted diluted earnings per share for the three months ended November 30, 2024, was$0.90, compared to $0.81 for the same period in 2023, reflecting a growth of 11.1$133.1 million, including $59.2 million for FCPA settlement costs[9] - The company incurred FCPA settlement and investigation costs of$59.2 million for the three months ended November 30, 2024, impacting overall financial performance[33] - Acquisition, integration, and amortization expenses for the three months ended November 30, 2024, totaled $7.2 million, compared to$3.1 million in the same period of 2023[36] Cash Flow and Debt - Cash flow from operating activities was $22 million, up from$17.4 million in the prior year[12] - The company reported a net cash provided by operating activities of $22.0 million for the three months ended November 30, 2024, compared to$17.4 million in the same period of 2023[28] - Cash provided by operating activities for the three months ended November 30, 2024, was $22.0 million, an increase from$17.4 million in the same period of 2023[36] - Adjusted cash provided by operating activities for the three months ended November 30, 2024, was $27.1 million, up from$17.4 million in the same period of 2023[36] - Net debt as of November 30, 2024, was $935.3 million, significantly higher than$211.9 million in the same period of 2023[37] - The net debt to adjusted EBITDA ratio was 3.26 as of November 30, 2024, indicating a higher leverage compared to previous periods[37] - Long-term debt remained stable at $986.7 million as of November 30, 2024, compared to$985.4 million in May 2024[26] Asset Growth - Total assets increased to $2,849.3 million as of November 30, 2024, compared to$2,770.0 million in May 2024, reflecting a growth of approximately 2.85%[26] Segment Performance - Operating income for the Parts Supply segment increased to $31.6 million for the three months ended November 30, 2024, compared to$28.4 million in the same period of 2023[30] - The Repair & Engineering segment saw a significant increase in sales, reaching $228.8 million for the three months ended November 30, 2024, up from$145.4 million in the same period of 2023[30] Future Outlook - AAR expects continued strong sales growth and margin expansion in the second half of FY2025, driven by synergies from the Product Support acquisition[13]