#United States #financial results #AAR CORP #Wood Dale #Aviation Services

AAR Corp Reports Financial Success in FY 2025

AAR Corp, a prominent name in aviation services, has unveiled its financial results for the fourth quarter and full fiscal year 2025. The new figures reflect impressive growth and profitability, underpinned by strategic objectives designed to enhance business performance.

Fourth Quarter Highlights

In the fourth quarter ending May 31, 2025, AAR Corp reported sales of $755 million, marking a 15% increase compared to the same period last year. The company's GAAP earnings per share (EPS) stood at $0.95, while the adjusted diluted EPS reached $1.16 – a remarkable 32% growth year-over-year. The net income for the quarter was reported at $34 million, and adjusted EBITDA showed a solid increase as well, climbing to $91 million, with an EBITDA margin rising to 12.4% from the previous year's 11.6%.

CEO John M. Holmes noted that achieving double-digit growth in both sales and earnings during the fourth quarter was a testament to the strong demand across commercial and government sectors. The new parts distribution activities were particularly noteworthy, showing an impressive 20% organic growth in sales driven by both market growth and market share expansion.

Full Fiscal Year Overview

For the fiscal year 2025, AAR saw total sales reach $2.8 billion, representing a 20% increase from fiscal year 2024. The GAAP EPS was recorded at $0.35, while adjusted diluted EPS rose by 17% to $3.91. Despite an overall net income decrease to $12.5 million due to after-tax charges related to acquisitions, the adjusted EBITDA surged to $324 million, reflecting a significant 34% growth.

Holmes emphasized the company’s commitment to operational efficiencies, product integration, and strategic divestitures, all contributing to the robust performance. The integration of the Product Support acquisition and the divestiture of the Landing Gear Overhaul business were also crucial steps in streamlining the operations.

Recent Developments

AAR Corp has made noteworthy strides in expanding its business portfolio. Key recent accomplishments include:

• - Implementation of Trax’s eMRO Solutions: These new solutions will enhance Delta TechOps' line maintenance network.
• - New Licensing Agreements: Licenses for Trax software were obtained by Amerijet International Airlines and SIA Engineering Company.
• - Joint Ventures: AAR's partnership with KIRA Aviation Services secured an E-6B Mercury pilot training contract awarded by the U.S. Navy.
• - Supply Chain Charter with DLA: A critical alliance was formed with the U.S. Defense Logistics Agency to boost parts distribution capabilities.

Strong Cash Flow and Debt Management

AAR Corp reported a strong cash flow from operations of $51.4 million in the current quarter, a substantial improvement compared to $24.5 million in the previous year. The company successfully reduced its net leverage from 3.58x to 2.72x, allowing for continued investment in growth-friendly initiatives and a solid foundation for the upcoming fiscal year.

Holmes expressed optimism for fiscal year 2026, anticipating growth in parts supply and engineering capabilities while aiming to convert a large pipeline of government opportunities into new business wins. As AAR Corp continues to strengthen its market position and enhance operational margins, stakeholders can expect further advancements in both sales and service capabilities.

Conclusion

With an impressive close to fiscal year 2025, AAR Corp has positioned itself strongly for future growth. Their aggressive strategies in parts distribution and innovative solutions are setting the stage for continued success in the aviation services industry. Investors and customers alike can look forward to exciting developments as the company navigates the opportunities ahead in fiscal year 2026.