AAR reports fourth quarter and fiscal year 2025 results

Core Insights - AAR CORP. reported record sales and profitability for fiscal year 2025, achieving a 20% increase in consolidated sales to $2.8 billion compared to fiscal year 2024 [2][13] - The company completed the integration of the Product Support acquisition and divested its Landing Gear Overhaul business for $48 million, optimizing its portfolio [2][6] - AAR's adjusted EBITDA grew by 34% year-over-year, reflecting improved margins and operational efficiency [5][15] Fourth Quarter Fiscal Year 2025 Highlights - Fourth quarter sales increased by 15% to $754.5 million, with adjusted diluted EPS rising 32% to $1.16 [5][8] - Adjusted EBITDA for the fourth quarter was $91 million, up 19%, with an adjusted EBITDA margin of 12.4%, an increase from 11.6% [5][10] - Sales to commercial customers rose by 12%, while sales to government customers increased by 21% [7][12] Fiscal Year 2025 Highlights - Full fiscal year net income was $12.5 million, or $0.35 per diluted share, down from $46.3 million in fiscal year 2024 [15][25] - Adjusted diluted EPS for the year was $3.91, compared to $3.33 in the previous year, indicating improved operating efficiency [15][36] - Operating margins improved to 6.7% from 5.6% in fiscal year 2024, with adjusted operating margins increasing to 9.6% from 8.3% [14][15] Recent Updates - AAR implemented Trax's eMRO and eMobility solutions across Delta TechOps and secured new license agreements for Trax software [6][17] - The company signed a new parts Distribution Supply Chain Alliance charter with the U.S. Defense Logistics Agency [6] - AAR's net leverage decreased from 3.58x to 2.72x, reflecting a stronger balance sheet and reduced debt [12][13] Financial Performance - Selling, general, and administrative expenses decreased to $77.4 million from $94.8 million in the prior year quarter [9] - Cash flow from operating activities for the fourth quarter was $51.4 million, compared to $24.5 million in the prior year quarter [12][27] - As of May 31, 2025, net debt stood at $880.5 million, down from $911.2 million a year earlier [12][38]