AAR(US:AIR)2024-07-18 20:41Financial Performance - Record fourth quarter sales of $657 million, up 19% over the prior year[1] - Fourth quarter adjusted diluted earnings per share from continuing operations of $0.88, up 6% from $0.83 in Q4 FY2023[1] - Full year consolidated sales were $2.3 billion, an increase of 17% from fiscal year 2023[7] - Sales to commercial customers increased 20% over the prior year quarter, representing 70% of consolidated sales[2] - Adjusted operating margin increased from 7.5% in fiscal year 2023 to 8.3% in fiscal year 2024[7] - Operating margins were 5.6% for the full year, compared to 6.7% in fiscal year 2023[7] - Total third-party sales for the three months ended May 31, 2024, reached $656.5 million, up from $553.3 million in the same period of 2023, with year-to-date sales increasing to $2,318.9 million from $1,990.5 million[17] - Adjusted diluted earnings per share from continuing operations increased to $0.88 for the three months ended May 31, 2024, up from $0.83 in the same period last year, representing a 6.0% growth[23] - Adjusted operating margin improved to 9.3% for the three months ended May 31, 2024, compared to 8.3% for the same period in 2023[24] - Adjusted EBITDA for the three months ended May 31, 2024, was $76.4 million, significantly higher than $53.0 million for the same period in 2023, marking a 44.0% increase[25] - Total sales for the year ended May 31, 2024, reached $2,318.9 million, compared to $1,990.5 million for the year ended May 31, 2023, indicating a 16.5% growth[24] Cash Flow and Liquidity - Cash flow provided by operating activities from continuing operations was $43.8 million in fiscal year 2024[9] - Cash flows provided by operating activities from continuing operations were $24.5 million for the three months ended May 31, 2024, compared to $45.3 million in the same period of 2023[16] - The company’s cash and cash equivalents increased to $85.8 million, compared to $68.4 million in the prior year, showing better liquidity[15] - The company’s cash and cash equivalents at the end of the period were $96.1 million, up from $81.8 million at the beginning of the period, indicating improved liquidity[16] Debt and Interest Expense - Net interest expense for the quarter was $18.7 million, compared to $4.7 million last year[5] - Long-term debt increased to $985.4 million as of May 31, 2024, compared to $269.7 million in the prior year, reflecting a significant rise[15] - Net debt increased significantly to $911.2 million as of May 31, 2024, compared to $203.6 million in the previous year[26] - Total debt as of May 31, 2024, was $997.0 million, a significant increase from $272.0 million in 2023[26] - The ratio of net debt to adjusted EBITDA rose to 3.76 as of May 31, 2024, compared to 1.07 in the prior year[27] - The net debt to pro forma adjusted EBITDA ratio was reported at 3.30[28] Profitability and Expenses - Gross profit for the three months ended May 31, 2024, was $127.3 million, representing a 17.8% increase compared to $108.1 million in the prior year[14] - Selling, general and administrative expenses rose to $94.8 million, up 33.9% from $70.8 million in the same period last year, impacting overall profitability[14] - The company incurred a pension settlement charge of $26.7 million during the year ended May 31, 2024, impacting overall financial performance[16] - Acquisition, integration, and amortization expenses for the three months ended May 31, 2024, were $18.6 million, up from $5.1 million in the same period last year[22] - Investigation and remediation compliance costs increased to $4.8 million for the three months ended May 31, 2024, compared to $1.6 million for the same period in 2023[22] Segment Performance - Operating income for the Parts Supply segment increased to $35.2 million for the three months ended May 31, 2024, compared to $29.0 million in the same period of 2023, contributing to a year-to-date operating income of $109.8 million versus $93.7 million[18] - The Parts Supply segment generated $260.3 million in sales for the three months ended May 31, 2024, compared to $238.6 million in the same period of 2023, indicating a growth trend[17] - The Repair & Engineering segment saw sales increase to $216.4 million for the three months ended May 31, 2024, from $143.0 million in the same period of 2023, reflecting strong demand[17] Earnings and Adjustments - Net income for the three months ended May 31, 2024, was $9.1 million, a decrease of 60.8% from $23.2 million in the same period last year[14] - The company reported a basic earnings per share of $0.26 for the three months ended May 31, 2024, down from $0.67 in the same period last year[14] - Net income for the three months ended May 31, 2024, was $9.1 million, a decrease from $23.2 million for the same period in 2023, while the year-to-date net income was $46.3 million compared to $90.2 million in the previous year[16] - Adjusted income from continuing operations for the three months ended May 31, 2024, was $31.3 million, compared to $29.1 million for the same period in 2023, reflecting a 7.6% increase[22] - Adjusted EBITDA for the year ended May 31, 2024, was reported at $242.4 million, up from $189.8 million in 2023[27] - Pro forma adjusted EBITDA, including product support, reached $275.9 million for the year ended May 31, 2024[28] - Adjusted EBITDA reflects income from continuing operations before interest, taxes, depreciation, and amortization, with adjustments for various unusual items, providing a clearer view of core operating performance[21]