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AAR reports third quarter fiscal year 2025 results
AIRAAR(AIR) Prnewswire·2025-03-27 20:05

Core Insights - AAR CORP. reported a strong third quarter for fiscal year 2025, with sales increasing by 20% year-over-year to 678.2million,drivenbyhighdemandforaftermarketservicesandcontributionsfromrecentacquisitions[2][5][6]−Thecompanyachievedsignificantearningsgrowth,withadjusteddilutedEPSrising16678.2 million, driven by high demand for aftermarket services and contributions from recent acquisitions [2][5][6] - The company achieved significant earnings growth, with adjusted diluted EPS rising 16% to 0.99, despite a GAAP net loss of 8.9millionduetoapre−taxchargerelatedtothedivestitureofitsLandingGearOverhaulbusiness[6][9][14]−EBITDAmarginimprovedfrom10.38.9 million due to a pre-tax charge related to the divestiture of its Landing Gear Overhaul business [6][9][14] - EBITDA margin improved from 10.3% to 12.0%, reflecting operational efficiencies and successful integration of acquisitions [2][6][14] Financial Performance - Consolidated sales reached 678.2 million, up from 567.3millioninthesamequarterlastyear,witha22567.3 million in the same quarter last year, with a 22% increase in sales to commercial customers and a 15% increase to government customers [5][6] - Adjusted EBITDA for the quarter was 81 million, a 39% increase year-over-year, with an adjusted EBITDA margin of 12.0% [6][34] - The company reported a net loss of 8.9million,or8.9 million, or (0.25) per share, compared to a net income of 14million,or14 million, or 0.39 per diluted share, in the prior year [9][22] Business Developments - AAR secured several new business agreements, including exclusive distribution agreements with Chromalloy and Unison, enhancing its position in the aviation aftermarket [2][7] - The company is set to divest its Landing Gear Overhaul business for 51million,partofastrategytooptimizeitsportfolio[4][14]−AAR′sPartsSupplysegmentaccountedfor7251 million, part of a strategy to optimize its portfolio [4][14] - AAR's Parts Supply segment accounted for 72% of consolidated sales, up from 70% in the prior year quarter, indicating a strong focus on aftermarket services [8][25] Operational Efficiency - Selling, general, and administrative expenses decreased to 61.3 million from $77 million in the prior year, aided by the reversal of a legal charge [10] - Operating margins improved to 10.5% from 5.8% in the prior year, with adjusted operating margins increasing to 9.7% from 8.3% [11][14] - The company reduced its net leverage from 3.58x to 3.06x over the year, indicating improved financial health [14][35]