FY25 Financial Performance - Adjusted sales increased by 20% from $2.3 billion in FY24 to $2.8 billion in FY25[10] - Adjusted EBITDA increased by 34% from $242 million in FY24 to $324 million in FY25[10] - Adjusted EPS increased by 17% from $3.33 in FY24 to $3.91 in FY25[10] - Net leverage decreased from 3.30x in FY24 to 2.72x in FY25[10] Q4 FY25 Financial Performance - Adjusted EPS increased by 32% from $0.88 in Q4 FY24 to $1.16 in Q4 FY25[14] - Adjusted sales increased by 12% from $658.8 million in Q4 FY24 to $735.8 million in Q4 FY25[14] - Adjusted operating income increased by 25% from $61.3 million in Q4 FY24 to $76.9 million in Q4 FY25[14] - Adjusted EBITDA increased by 19% from $76.4 million in Q4 FY24 to $90.9 million in Q4 FY25[14] Segment Performance in Q4 FY25 - Parts Supply sales increased by 17% from $260.3 million in Q4 FY24 to $305.5 million in Q4 FY25[14] - Integrated Solutions sales increased by 10% from $165.8 million in Q4 FY24 to $181.5 million in Q4 FY25[14]

[Executive Summary & Fiscal Year 2025 Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Fiscal%20Year%202025%20Highlights) AAR's strong financial performance and strategic achievements for Q4 and full fiscal year 2025 are summarized [Fourth Quarter Fiscal Year 2025 Highlights](index=1&type=section&id=FOURTH%20QUARTER%20FISCAL%20YEAR%202025%20HIGHLIGHTS) AAR reported strong Q4 FY2025 results with double-digit sales and earnings growth, driven by robust demand Q4 FY2025 Key Financial Highlights (YoY Change) | Metric | Q4 FY2025 | Change vs. Q4 FY2024 | | :-------------------- | :---------- | :------------------- | | Sales | $755 million | +15% | | GAAP EPS | $0.95 | - | | Adjusted diluted EPS | $1.16 | +32% | | GAAP Net income | $34 million | - | | Adjusted EBITDA | $91 million | +19% | | Adjusted EBITDA margin | 12.4% | +0.8 percentage points (from 11.6%) | - Adjusted sales were up **12% organically** due to strong demand across both commercial and government end-markets[5](index=5&type=chunk) - New parts Distribution activities led with over **20% organic increase in sales**, driven by market growth and market share gains[5](index=5&type=chunk) [Fiscal Year 2025 Highlights](index=1&type=section&id=FISCAL%20YEAR%202025%20HIGHLIGHTS) AAR achieved record FY2025 sales and profitability, advancing strategic objectives and reducing net leverage FY2025 Key Financial Highlights (YoY Change) | Metric | FY2025 | Change vs. FY2024 | | :-------------------- | :---------- | :------------------- | | Sales | $2.8 billion | +20% | | GAAP EPS | $0.35 | - | | Adjusted diluted EPS | $3.91 | +17% | | GAAP Net income | $13 million | - | | Adjusted EBITDA | $324 million | +34% | | Adjusted EBITDA margin | 11.8% | +1.4 percentage points (from 10.4%) | - Substantially completed the integration of the Product Support acquisition and continued to optimize the portfolio with the divestiture of the Landing Gear Overhaul business[3](index=3&type=chunk) - Net leverage reduced to **2.72x** by the end of the fiscal year[3](index=3&type=chunk) [Recent Business Updates](index=2&type=section&id=RECENT%20UPDATES) This section details AAR's recent new business wins and portfolio optimization efforts [New Business Wins](index=2&type=section&id=NEW%20BUSINESS) AAR secured new business, including Trax software implementations, a U.S. Navy contract, and a DLA alliance - Implementation of Trax's eMRO and eMobility solutions across Delta TechOps line maintenance network[8](index=8&type=chunk) - License agreements for Trax software with Amerijet International Airlines and SIA Engineering Company's heavy maintenance facility in Malaysia[8](index=8&type=chunk) - Joint venture with KIRA Aviation Services awarded an E-6B Mercury pilot training contract from the U.S. Navy[8](index=8&type=chunk) - Signed a new parts Distribution Supply Chain Alliance charter with the U.S. Defense Logistics Agency (DLA)[8](index=8&type=chunk) [Portfolio Optimization](index=2&type=section&id=PORTFOLIO%20UPDATE) AAR completed Product Support acquisition integration and divested its Landing Gear Overhaul business for $48 million - Substantially completed the integration and site consolidation of the Product Support acquisition[8](index=8&type=chunk) - Completed the sale of the Landing Gear Overhaul business for **$48 million**[8](index=8&type=chunk) [Financial Results - Fourth Quarter Fiscal Year 2025](index=3&type=section&id=FOURTH%20QUARTER%20FISCAL%20YEAR%202025%20RESULTS) This section details AAR's consolidated financial performance for the fourth quarter of fiscal year 2025 [Consolidated Sales Performance](index=3&type=section&id=Consolidated%20fourth%20quarter%20sales) Consolidated sales increased 15% to $754.5 million, driven by strong demand and a significant asset sale Q4 Sales Performance (YoY) | Metric | Q4 FY2025 (Millions) | Q4 FY2024 (Millions) | Change | | :-------------------------- | :------------------- | :------------------- | :----- | | Consolidated Sales | $754.5 | $656.5 | +15% | | Commercial Customer Sales | +$56.5 | - | +12% | | Government Customer Sales | - | - | +21% | - Sales in Q4 FY2025 included **$18.7 million** from the sale of certain rotable assets to a significant regional airline customer[9](index=9&type=chunk) - Commercial customers represented **69% of consolidated sales** in Q4 FY2025, down from 70% in the prior year quarter[9](index=9&type=chunk) [Net Income and EPS](index=3&type=section&id=The%20Company%20reported%20net%20income) Net income rose to $34.0 million, with GAAP EPS of $0.95 and adjusted diluted EPS of $1.16 Q4 Net Income and EPS (YoY) | Metric | Q4 FY2025 | Q4 FY2024 | | :-------------------- | :---------- | :---------- | | Net income | $34.0 million | $9.1 million | | GAAP diluted EPS | $0.95 | $0.26 | | Adjusted diluted EPS | $1.16 | $0.88 | [Operating Expenses and Margins](index=3&type=section&id=Selling%2C%20general%2C%20and%20administrative%20expenses) Operating expenses decreased, improving operating margins to 9.7% and adjusted operating margin to 10.5% Q4 Operating Expenses (YoY) | Expense Category | Q4 FY2025 (Millions) | Q4 FY2024 (Millions) | | :------------------------------------ | :------------------- | :------------------- | | Selling, general, and administrative | $77.4 | $94.8 | | Acquisition, amortization, integration | $0.3 | $17.1 | Q4 Operating Margins (YoY) | Margin Type | Q4 FY2025 | Q4 FY2024 | | :-------------------- | :-------- | :-------- | | Operating margins | 9.7% | 5.0% | | Adjusted operating margin | 10.5% | 9.3% | - Adjusted operating margin increased primarily due to strong growth and favorable mix in Parts Supply[12](index=12&type=chunk) [Cash Flow and Leverage](index=4&type=section&id=Cash%20flow%20provided%20by%20operating%20activities) Operating cash flow increased to $51.4 million, reducing net debt to $880.5 million and leverage to 2.72x Q4 Cash Flow and Leverage | Metric | Q4 FY2025 (Millions) | Q4 FY2024 (Millions) | | :------------------------------------ | :------------------- | :------------------- | | Cash flow from operating activities | $51.4 | $24.5 | | Adjusted cash flow from operating activities (excluding AR financing) | $50.3 | - | | Net debt (as of May 31, 2025) | $880.5 | - | | Net leverage (as of May 31, 2025) | 2.72x | - | - Net leverage decreased from **3.58x to 2.72x** since the Product Support acquisition[15](index=15&type=chunk) [Financial Results - Fiscal Year 2025](index=4&type=section&id=FISCAL%20YEAR%202025%20RESULTS) This section details AAR's consolidated financial performance for the full fiscal year 2025 [Consolidated Sales Performance](index=4&type=section&id=Full%20fiscal%20year%202025%20consolidated%20sales) FY2025 consolidated sales reached $2.8 billion, a 20% increase, driven by acquisition and parts distribution FY2025 Sales Performance (YoY) | Metric | FY2025 | FY2024 | | :-------------------------- | :---------- | :---------- | | Consolidated Sales | $2.8 billion | $2,318.9 million | | YoY Growth | +20% | - | | Commercial Sales % of Total | 71% | 71% | - Sales growth resulted from the Product Support acquisition and increased volumes in new parts distribution activities[15](index=15&type=chunk) [Operating Margins](index=4&type=section&id=Operating%20margins%20were%206.7%25%20for%20the%20full%20year) Operating margins improved to 6.7% for FY2025, with adjusted operating margin increasing to 9.6% FY2025 Operating Margins (YoY) | Margin Type | FY2025 | FY2024 | | :-------------------- | :-------- | :-------- | | Operating margins | 6.7% | 5.6% | | Adjusted operating margin | 9.6% | 8.3% | - Improved adjusted margins were primarily driven by the favorable contribution from the Product Support business and growth in Parts Supply[16](index=16&type=chunk) [Net Income and EPS](index=4&type=section&id=Full%20fiscal%20year%202025%20net%20income) FY2025 net income was $12.5 million ($0.35 GAAP EPS), impacted by charges; adjusted EPS rose to $3.91 FY2025 Net Income and EPS (YoY) | Metric | FY2025 | FY2024 | | :-------------------- | :---------- | :---------- | | Net income | $12.5 million | $46.3 million | | GAAP diluted EPS | $0.35 | $1.29 | | Adjusted diluted EPS | $3.91 | $3.33 | - FY2025 results included after-tax charges of **$115.0 million** associated with the sale of the Landing Gear Overhaul business and FCPA settlement and related costs[17](index=17&type=chunk) [Cash Flow](index=4&type=section&id=Cash%20flow%20provided%20by%20operating%20activities%20was%20%2436.1%20million) Cash flow from operating activities for FY2025 was $36.1 million, or $28.5 million excluding AR financing FY2025 Cash Flow from Operating Activities | Metric | FY2025 (Millions) | | :--------------------------------------- | :---------------- | | Cash flow provided by operating activities | $36.1 | | Excluding accounts receivable financing program | $28.5 | [Fiscal Year 2026 Outlook](index=5&type=section&id=Holmes%20concluded) This section outlines AAR's strategic expectations and growth drivers for fiscal year 2026 - Expects to continue to gain market share in Parts Supply and expand both capabilities and footprint in Repair & Engineering[19](index=19&type=chunk) - Expects Trax to continue its growth trajectory by winning more business and upgrading existing customers to the latest offerings[19](index=19&type=chunk) - Remains focused on converting a large pipeline of government opportunities to new business wins[19](index=19&type=chunk) - Anticipates driving further growth and margin expansion in fiscal year 2026[19](index=19&type=chunk) [Company Information](index=5&type=section&id=Company%20Information) This section provides an overview of AAR's business and details for the conference call [About AAR](index=5&type=section&id=About%20AAR) AAR is a global aerospace and defense aftermarket solutions company serving commercial and government customers - AAR is a global aerospace and defense aftermarket solutions company with operations in over 20 countries[22](index=22&type=chunk) - Supports commercial and government customers through four operating segments: Parts Supply, Repair & Engineering, Integrated Solutions, and Expeditionary Services[22](index=22&type=chunk) [Conference Call Details](index=5&type=section&id=Conference%20call%20information) A conference call to discuss results was held on July 16, 2025, with webcast and replay options - A conference call to discuss the results was held on Wednesday, July 16, 2025, at 4 p.m. Central time[20](index=20&type=chunk) - A listen-only webcast and slides were accessible online, with participants able to join via phone by registering[20](index=20&type=chunk) - A replay of the conference call will be available for on-demand listening for approximately one year[21](index=21&type=chunk) [Forward-Looking Statements](index=6&type=section&id=Forward-Looking%20Statements) This section outlines forward-looking statements and associated risks regarding AAR's future performance - This press release contains forward-looking statements reflecting management's expectations about future conditions, including demand, market position, business relationships, acquisitions, margin improvement, sales growth, earnings, debt management, and capital allocation[24](index=24&type=chunk) - Forward-looking statements are based on beliefs, assumptions, and estimates, and are subject to risks and uncertainties that could cause actual results to differ materially[26](index=26&type=chunk) - Risks include factors affecting the commercial aviation industry, government sales, cost overruns, competition, international operations, inability to integrate acquisitions, cyber threats, and regulatory non-compliance[26](index=26&type=chunk) [Consolidated Financial Statements](index=7&type=section&id=Consolidated%20Financial%20Statements) This section presents AAR's condensed consolidated statements of income, balance sheets, and cash flows [Condensed Consolidated Statements of Income](index=7&type=section&id=Condensed%20consolidated%20statements%20of%20income) The statements detail AAR's Q4 and FY2025 financial performance, including sales, gross profit, and net income Condensed Consolidated Statements of Income (Millions, except per share data) | Metric | Q4 FY2025 | Q4 FY2024 | FY2025 | FY2024 | | :-------------------------------- | :-------- | :-------- | :------- | :------- | | Sales | $754.5 | $656.5 | $2,780.5 | $2,318.9 | | Cost of sales | 604.3 | 529.2 | 2,252.8 | 1,876.6 | | Gross profit | 150.2 | 127.3 | 527.7 | 442.3 | | Operating income | 73.0 | 32.6 | 185.2 | 129.2 | | Net income | $34.0 | $9.1 | $12.5 | $46.3 | | Earnings per share – Diluted | $0.95 | $0.26 | $0.35 | $1.29 | [Condensed Consolidated Balance Sheets](index=8&type=section&id=Condensed%20consolidated%20balance%20sheets) The balance sheets present AAR's financial position as of May 31, 2025, and 2024, outlining assets and liabilities Condensed Consolidated Balance Sheets (Millions) | Metric | May 31, 2025 | May 31, 2024 | | :-------------------------------- | :----------- | :----------- | | Cash and cash equivalents | $96.5 | $85.8 | | Total current assets | 1,510.6 | 1,389.6 | | Total assets | $2,844.6 | $2,770.0 | | Total current liabilities | $554.7 | $466.9 | | Long-term debt | 968.0 | 985.4 | | Total liabilities | 1,633.0 | 1,580.2 | | Equity | 1,211.6 | 1,189.8 | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20consolidated%20statements%20of%20cash%20flows) The cash flow statements detail cash generated and used by AAR's operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows (Millions) | Metric | Q4 FY2025 | Q4 FY2024 | FY2025 | FY2024 | | :--------------------------------------- | :-------- | :-------- | :------- | :------- | | Net cash provided by operating activities | $51.4 | $24.5 | $36.1 | $43.6 | | Net cash provided by (used in) investing activities | $27.6 | $(731.7) | $10.7 | $(758.5) | | Net cash provided by (used in) financing activities | $(70.7) | $719.7 | $(33.7) | $729.2 | | Increase in cash and cash equivalents | $8.3 | $12.5 | $13.1 | $14.3 | [Segment Information](index=10&type=section&id=Segment%20Information) This section provides a breakdown of AAR's third-party sales and operating income by segment [Third-Party Sales by Segment](index=10&type=section&id=Third-party%20sales%20by%20segment) Third-party sales grew across all segments in Q4 and FY2025, with Parts Supply and Repair & Engineering as key drivers Third-Party Sales by Segment (Millions) | Segment | Q4 FY2025 | Q4 FY2024 | FY2025 | FY2024 | | :-------------------- | :-------- | :-------- | :------- | :------- | | Parts Supply | $305.5 | $260.3 | $1,099.6 | $967.0 | | Repair & Engineering | 222.6 | 216.4 | 884.9 | 640.1 | | Integrated Solutions | 200.1 | 163.5 | 695.3 | 641.9 | | Expeditionary Services | 26.3 | 16.3 | 100.7 | 69.9 | | **Total Sales** | **$754.5** | **$656.5** | **$2,780.5** | **$2,318.9** | [Operating Income (Loss) by Segment](index=10&type=section&id=Operating%20income%20(loss)%20by%20segment) Operating income significantly increased across most segments in Q4 and FY2025, with Parts Supply showing strongest growth Operating Income (Loss) by Segment (Millions) | Segment | Q4 FY2025 | Q4 FY2024 | FY2025 | FY2024 | | :-------------------- | :-------- | :-------- | :------- | :------- | | Parts Supply | $49.7 | $35.2 | $156.8 | $109.8 | | Repair & Engineering | 18.3 | 20.6 | 81.2 | 52.5 | | Integrated Solutions | 12.6 | 1.2 | 36.4 | 23.9 | | Expeditionary Services | 3.2 | 0.4 | 10.1 | 3.5 | | **Total Segment Operating Income** | **83.8** | **57.4** | **284.5** | **189.7** | | Corporate and other | (10.8) | (24.8) | (99.3) | (60.5) | | **Consolidated Operating Income** | **$73.0** | **$32.6** | **$185.2** | **$129.2** | [Non-GAAP Financial Measures Reconciliation](index=10&type=section&id=Non-GAAP%20Financial%20Measures%20Reconciliation) This section reconciles non-GAAP financial measures to GAAP, providing a clearer view of core operating performance [Overview of Non-GAAP Measures](index=10&type=section&id=Non-GAAP%20Measures%20Overview) AAR uses non-GAAP measures like adjusted net income, EPS, operating margin, cash flow, EBITDA, and net debt to clarify core performance - Non-GAAP financial measures are used to illustrate core operating performance, cash flows, and leverage, unaffected by certain items management does not believe are indicative of ongoing activities[36](index=36&type=chunk) - Adjustments include costs associated with FCPA matters, acquisition activity, pension settlement charges, legal judgments, contract termination/restructuring costs, and losses related to business exits[37](index=37&type=chunk) - Adjusted EBITDA is defined as net income before interest, taxes, depreciation, amortization, stock-based compensation, and items of an unusual nature[38](index=38&type=chunk) [Adjusted Net Income Reconciliation](index=11&type=section&id=Adjusted%20net%20income) Reconciliation tables show adjustments to GAAP net income, highlighting the impact of acquisition, FCPA, and business exit charges Adjusted Net Income Reconciliation (Millions) | Metric | Q4 FY2025 | Q4 FY2024 | FY2025 | FY2024 | | :-------------------- | :-------- | :-------- | :------- | :------- | | Net income (GAAP) | $34.0 | $9.1 | $12.5 | $46.3 | | Acquisition, integration, and amortization expenses | 3.1 | 18.6 | 26.7 | 42.8 | | Losses related to sale and exit of business/joint venture, net | 7.1 | 0.2 | 70.3 | 2.8 | | FCPA settlement and investigation costs | –– | 4.8 | 65.3 | 10.5 | | Tax effect on adjustments | (3.5) | (6.7) | (25.1) | (27.2) | | **Adjusted net income** | **$41.5** | **$31.3** | **$139.6** | **$118.4** | [Adjusted Diluted EPS Reconciliation](index=11&type=section&id=Adjusted%20diluted%20earnings%20per%20share) Reconciliation tables show adjustments to GAAP diluted EPS, reflecting the impact of various non-GAAP items Adjusted Diluted Earnings Per Share Reconciliation | Metric | Q4 FY2025 | Q4 FY2024 | FY2025 | FY2024 | | :--------------------------------------- | :-------- | :-------- | :------- | :------- | | Diluted earnings per share (GAAP) | $0.95 | $0.26 | $0.35 | $1.29 | | Acquisition, integration, and amortization expenses | 0.09 | 0.52 | 0.74 | 1.21 | | Losses related to sale and exit of business/joint venture, net | 0.20 | 0.01 | 1.97 | 0.07 | | FCPA settlement and investigation costs | –– | 0.14 | 1.84 | 0.29 | | Tax effect on adjustments | (0.10) | (0.20) | (0.70) | (0.76) | | **Adjusted diluted earnings per share** | **$1.16** | **$0.88** | **$3.91** | **$3.33** | [Adjusted Operating Margin Reconciliation](index=12&type=section&id=Adjusted%20operating%20margin) Adjusted operating margin reconciliation details adjustments to sales and operating income, showing improved margins Adjusted Operating Margin Reconciliation (Millions) | Metric | Q4 FY2025 | Q4 FY2024 | FY2025 | FY2024 | | :-------------------- | :-------- | :-------- | :------- | :------- | | Sales (GAAP) | $754.5 | $656.5 | $2,780.5 | $2,318.9 | | Adjusted sales | $735.8 | $658.8 | $2,748.3 | $2,321.2 | | Operating income (GAAP) | $73.0 | $32.6 | $185.2 | $129.2 | | Adjusted operating income | $76.9 | $61.3 | $265.1 | $192.9 | | Operating margin (GAAP) | 9.7% | 5.0% | 6.7% | 5.6% | | **Adjusted operating margin** | **10.5%** | **9.3%** | **9.6%** | **8.3%** | [Adjusted Cash Flow Provided by Operating Activities Reconciliation](index=12&type=section&id=Adjusted%20cash%20flow%20provided%20by%20operating%20activities) Reconciliation of cash flow from operating activities shows adjustments for AR financing, resulting in adjusted cash flow Adjusted Cash Flow Provided by Operating Activities Reconciliation (Millions) | Metric | Q4 FY2025 | Q4 FY2024 | FY2025 | FY2024 | | :--------------------------------------- | :-------- | :-------- | :------- | :------- | | Cash flow provided by operating activities (GAAP) | $51.4 | $24.5 | $36.1 | $43.8 | | Amounts outstanding on accounts receivable financing program: Beginning of period | 20.2 | 13.7 | 13.7 | 12.8 | | Amounts outstanding on accounts receivable financing program: End of period | (21.3) | (13.7) | (21.3) | (13.7) | | **Adjusted cash flow provided by operating activities** | **$50.3** | **$24.5** | **$28.5** | **$42.9** | [Adjusted EBITDA and Net Debt Reconciliation](index=13&type=section&id=Adjusted%20EBITDA) Adjusted EBITDA significantly increased for Q4 and FY2025, with net debt reduced to $880.5 million and a 2.72x leverage ratio Adjusted EBITDA Reconciliation (Millions) | Metric | Q4 FY2025 | Q4 FY2024 | FY2025 | FY2024 | | :-------------------- | :-------- | :-------- | :------- | :------- | | Net income (GAAP) | $34.0 | $9.1 | $12.5 | $46.3 | | Income tax expense | 13.6 | 4.5 | 26.4 | 12.0 | | Interest expense, net | 18.4 | 18.7 | 73.6 | 41.0 | | Depreciation and amortization | 13.7 | 15.3 | 55.2 | 41.2 | | Stock-based compensation | 4.3 | 3.8 | 19.9 | 15.3 | | Acquisition and integration expenses (benefit) | (0.9) | 14.6 | 10.8 | 29.7 | | Losses related to sale and exit of business/joint venture, net | 7.1 | 0.2 | 70.3 | 2.8 | | FCPA settlement and investigation costs | –– | 4.8 | 65.3 | 10.5 | | **Adjusted EBITDA** | **$90.9** | **$76.4** | **$324.2** | **$242.4** | | Adjusted EBITDA margin | 12.4% | 11.6% | 11.8% | 10.4% | Net Debt and Net Debt to Adjusted EBITDA (Millions) | Metric | May 31, 2025 | May 31, 2024 | | :-------------------------- | :----------- | :----------- | | Total debt | $977.0 | $997.0 | | Less: Cash and cash equivalents | (96.5) | (85.8) | | **Net debt** | **$880.5** | **$911.2** | | Adjusted EBITDA for the year ended | $324.2 | $242.4 | | **Net debt to Adjusted EBITDA** | **2.72** | **3.76** |

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]

Core Concept - Momentum investing focuses on "buying high and selling higher," contrasting with traditional strategies of "buying low and selling high" [1] Group 1: Momentum Investing Characteristics - Fast-moving trending stocks can be difficult to enter at the right time, as they may lose momentum if future growth does not justify high valuations [2] - A safer strategy involves investing in bargain stocks that exhibit recent price momentum, utilizing tools like the Zacks Momentum Style Score to identify such opportunities [3] Group 2: AIR Stock Analysis - AIR (AAR) has shown a four-week price change of 8.4%, indicating growing investor interest [4] - Over the past 12 weeks, AIR's stock price has increased by 44.2%, with a beta of 1.44, suggesting it moves 44% more than the market [5] - AIR has a Momentum Score of B, indicating a favorable time to invest based on momentum [6] - The stock has a Zacks Rank 2 (Buy) due to upward revisions in earnings estimates, which attract more investors [7] - AIR is trading at a Price-to-Sales ratio of 0.99, suggesting it is undervalued at 99 cents for each dollar of sales [7] Group 3: Additional Investment Opportunities - Besides AIR, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, presenting further investment opportunities [8] - Zacks offers over 45 Premium Screens tailored to different investing styles, aiding in identifying potential winning stocks [9]

Core Insights - Aerospace-Defense Equipment stocks are expected to benefit from strategic mergers and acquisitions, enhancing operational scale and market presence, despite ongoing supply-chain challenges affecting aircraft deliveries and profitability [1][3][5]. Industry Overview - The Zacks Aerospace-Defense Equipment industry includes firms manufacturing essential components for aerospace and defense, such as aerostructures, propulsion systems, and defense electronics, while also providing aftermarket support services [2]. Trends Shaping the Industry - Recent mergers and acquisitions, such as TransDigm's $110 million acquisition of Servotronics and Teledyne's acquisition of Maretron assets, are expected to improve economies of scale and revenue growth [3]. - Global air passenger traffic is projected to grow by 5.8% year-over-year in 2025, indicating strong growth potential for aerospace-defense equipment stocks, particularly in commercial aviation [4]. Supply Chain Challenges - Supply-chain disruptions are impacting aircraft deliveries, with current deliveries 30% below peak levels, contributing to a backlog of 17,000 aircraft, which represents an 18% shortfall of the active global fleet [5]. Industry Performance - The Zacks Aerospace-Defense Equipment industry has outperformed both the S&P 500 composite and its sector, with a collective stock surge of 46.2% over the past year compared to 27.1% for the Aerospace sector and 10.9% for the S&P 500 [8]. Valuation Metrics - The industry is currently trading at an EV/Sales ratio of 11.14X, significantly higher than the S&P 500's 5.41X and the sector's 3.27X, indicating a premium valuation for capital-intensive aerospace-defense stocks [11]. Notable Companies - **Heico Corp.**: Expected to see a 13.3% sales improvement in fiscal 2025, with a long-term earnings growth rate of 17.6% [15][16]. - **AAR Corp.**: Anticipated 17.2% sales growth in fiscal 2025, with a Zacks Rank of 2 (Buy) [17][18]. - **Curtiss-Wright**: Projected 8.8% sales growth in fiscal 2025, recently awarded an $80 million contract by the USAF [20][22].

Core Viewpoint - AAR CORP. is set to release its financial results for the fourth quarter of fiscal year 2025 on July 16, 2025, after the market closes, indicating a focus on transparency and communication with investors [1]. Financial Results Announcement - The financial results will cover the period ending May 31, 2025, highlighting the company's performance in the aviation services sector [1]. - AAR will hold a conference call on July 16, 2025, at 4 p.m. Central time to discuss the results, providing an opportunity for stakeholders to engage directly with the company's management [2]. Conference Call Details - The conference call will be accessible via a listen-only webcast and participants can join by registering online to receive a dial-in number and unique PIN [2]. - A replay of the conference call will be available shortly after its completion and will remain accessible for approximately one year, ensuring that interested parties can review the information at their convenience [3]. Company Overview - AAR is a global aerospace and defense aftermarket solutions company, operating in over 20 countries and headquartered in the Chicago area [4]. - The company supports both commercial and government customers through four operating segments: Parts Supply, Repair & Engineering, Integrated Solutions, and Expeditionary Services [4].

Core Insights - AAR CORP.'s subsidiary Trax has been selected to modernize Delta TechOps' maintenance and engineering systems, indicating a significant partnership in aviation maintenance technology [1][2] - The modernization will involve replacing legacy systems with Trax's eMRO and eMobility solutions, enhancing efficiency and operational performance for over 6,000 technicians [2][4] - AAR's strategic investments in Trax have positioned the company to support large airlines and diverse fleets, showcasing its growth and capability in the aviation sector [3][4] Company Overview - AAR CORP. is a global aerospace and defense aftermarket solutions provider, operating in over 20 countries and supporting both commercial and government customers through various segments [4] - Trax, as a wholly-owned subsidiary of AAR, specializes in aviation maintenance mobile and cloud products, offering comprehensive software solutions for aircraft maintenance [5] - Delta TechOps, the maintenance division of Delta Air Lines, provides extensive maintenance, repair, and overhaul services, emphasizing safety, quality, and innovation in aviation maintenance [6]

WOOD DALE, Ill., May 6, 2025 /PRNewswire/ -- AAR CORP. (NYSE: AIR), a leading provider of aviation services to commercial and government operators, MROs, and OEMs, announced today that the Company's senior management will participate in the upcoming conferences listed below. 2025 Wells Fargo Industrials & Materials Conference in Chicago on June 11th Sean Gillen, AAR's Senior Vice President and Chief Financial Officer, will participate in one-on-one investor meetings. For more information on these conference ...

Core Viewpoint - AAR CORP. has formalized a Supply Chain Alliance with the U.S. Defense Logistics Agency (DLA) Aviation, marking a significant partnership aimed at enhancing support for the nation's warfighter [1][4]. Group 1: Partnership Details - AAR is the first Supply Chain Alliance partner for DLA Richmond, which signifies a strategic collaboration to improve logistics support [1][2]. - The signing ceremony took place on April 21, 2025, attended by key executives from both organizations [3]. Group 2: Objectives and Benefits - The charter aims to maximize efficiencies in the DLA procurement process by providing AAR with centralized resources for contract management, thereby enhancing operational execution [4][6]. - This partnership is expected to contribute to the broader National Defense Strategy by improving strategic readiness and agility in logistics support [6]. Group 3: Previous Collaborations - This new charter follows a similar Supply Chain Alliance established between AAR and DLA Maritime in September 2024, which focused on enhancing readiness through strategic stocking and expedited work processes [5]. Group 4: Company Overview - AAR is a global aerospace and defense aftermarket solutions provider, operating in over 20 countries and supporting both commercial and government customers through various segments including Parts Supply and Repair & Engineering [7].

Financial Data and Key Metrics Changes - The company reported third quarter sales of $678 million, a 20% increase year-over-year, setting a new record for third quarter sales [9][28] - Adjusted EBITDA rose to $81.2 million, up 39% from the same quarter last year, with EBITDA margin increasing to 12% from 10.3% [11][30] - Adjusted earnings per share grew 16% to $0.99 compared to $0.85 from the same period last year [11][33] - Net debt leverage decreased to 3.06 times from 3.17 times in the prior quarter [12][38] Business Segment Data and Key Metrics Changes - **Parts Supply**: Sales increased 12% to approximately $271 million, driven by growth in new parts distribution activities [13][34] - **Repair & Engineering**: Sales grew 53% to $216 million, with adjusted EBITDA increasing 110% to $27.9 million [18][35] - **Integrated Solutions**: Sales slightly decreased by 1.6% to $163 million, but adjusted EBITDA was 11% higher at $16.2 million [23][36] Market Data and Key Metrics Changes - Sales to commercial customers increased by 22%, while sales to government customers rose by 15% [10][29] - Total commercial sales accounted for 72% of total sales, with government sales making up the remaining 28% [29] Company Strategy and Development Direction - The company is focused on expanding its aftermarket services and improving margins, benefiting from strong demand in both commercial and government markets [8][42] - The integration of the Product Support acquisition is on schedule, with expectations for further margin expansion [20][42] - The company is pursuing USM sales opportunities with the US Government, emphasizing cost savings through commercial best practices [26][42] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued strong demand signals from commercial and government customers, expecting growth and margin expansion to persist through FY'26 [42] - The company anticipates year-over-year sales growth in the mid-single digits for Q4 FY'25, with adjusted operating margins projected between 9.7% and 9.9% [42][43] Other Important Information - The company is close to completing the divestiture of its Landing Gear business, which is expected to be accretive to margins but not significantly impactful [40][65] - The company has entered into exclusive agreements with suppliers like Unison and Chromalloy to enhance its parts distribution capabilities [15][102] Q&A Session Summary Question: Insights on USM market and expectations for Q4 - Management noted that the decline in USM was due to temporary maintenance deferrals and expects demand to rebound [51][53] Question: Impact of airline capacity growth on business - Management indicated no significant decline in demand signals and remains optimistic about retaining business even if airline capacity reduces [55][57] Question: Margin expansion from Landing Gear divestiture - Management clarified that the divestiture would be breakeven to slightly positive on operating profit, thus not significantly impacting margins [64][65] Question: Updates on Trax business and potential for margin expansion - Management confirmed that Trax is expected to contribute to margin expansion as it scales, with a strong pipeline of customers [66][68] Question: Efficiency improvements in MRO facilities - Management highlighted substantial gains in margins and throughput, with ongoing initiatives expected to drive further improvements [73][75] Question: Defense opportunities and USM sales to government - Management reported no notable increase in USM sales to the government yet but remains hopeful for future opportunities [78][80] Question: Update on partnership with FTAI - Management confirmed the extension of the partnership with FTAI, expecting increased volume over time [88][89] Question: Tariff situation and its impact on business - Management is monitoring tariff changes but is not making bulk purchases in anticipation of tariffs [92][94] Question: PMA market interest from lessors - Management noted increasing openness to PMAs among lessors and end users, indicating a positive market trend [101][102]