AAR reports second quarter fiscal year 2025 results

Core Viewpoint - AAR CORP. reported strong financial results for the second quarter of fiscal year 2025, with record sales and improved margins, driven by significant growth in its Parts Supply and Repair & Engineering segments [2][6][8]. Financial Performance - Sales increased by 26% to $686 million compared to$545.4 million in the same quarter last year [6][8]. - Organic growth was 12%, up from 6% in the first quarter [6][8]. - Adjusted EBITDA rose by 42% to $78 million, with adjusted EBITDA margins expanding to 11.4$31 million, or $(0.87) per share, due to after-tax charges of$57.1 million related to an FCPA settlement [9][22]. Segment Performance - Parts Supply segment sales grew by 20%, driven by new parts distribution activities and improved asset availability [2][8]. - Repair & Engineering segment sales surged by 57% year-over-year, aided by contributions from the Product Support acquisition [2][8]. - Sales to commercial customers accounted for 73% of total sales, up from 71% in the prior year [8]. Strategic Developments - The company secured new distribution agreements with Chromalloy and Whippany Actuation Systems, and extended its contract with Singapore Airlines [7][8]. - AAR announced a joint venture with Air France to support next-generation aircraft in the Asia-Pacific region [2][7]. - The divestiture of the Landing Gear Overhaul business for $51 million is part of the strategy to focus on higher-margin activities [4][14]. Cash Flow and Debt Management - Cash flow from operating activities was$22 million, compared to $17.4 million in the prior year [13][29]. - As of November 30, 2024, net debt stood at$935.3 million, with a net leverage ratio of 3.17x [12][30].