AAR(AIR) - 2025 Q2 - Quarterly Results

Financial Performance - Sales for Q2 FY2025 reached $686.1 million, a 26% increase compared to $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% from 10.1% year-over-year[3][4] - The Parts Supply segment saw a 20% sales growth, while Repair & Engineering sales grew by 57% year-over-year[3] - The company reported a GAAP net loss of $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%[33] - Total sales for the three months ended November 30, 2024, reached $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%[34] Expenses and Costs - Selling, general, and administrative expenses increased to $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]