#USA #AAR CORP #Wood Dale #Aviation Services #fiscal results

AAR Corp. Reports Impressive Second Quarter Results for Fiscal Year 2026

AAR Corp., a leader in aviation services for both commercial and government sectors, recently announced its financial results for the second quarter of fiscal year 2026, ending November 30, 2025. The company demonstrated a remarkable growth trajectory, signaling strong demand for its services across various market segments.

Highlights from the Second Quarter

• - Sales Performance: AAR generated sales of $795 million, marking a 16% increase compared to the same period in the previous year. This growth was significantly driven by a 12% organic increase, particularly within AAR's Parts Supply business, which recorded 29% higher sales.

• - Earnings Growth: The company reported a GAAP-net income of $35 million, translating into a diluted earnings per share of $0.90. Adjusted diluted EPS reached $1.18, reflecting a 31% increase from last year’s figures.

• - EBITDA Improvements: AAR's adjusted EBITDA climbed to $97 million, showcasing a 23% growth from Q2 of FY2025. Additionally, the adjusted EBITDA margin saw an upward shift from 11.4% to 12.1%.

According to John M. Holmes, AAR's Chairman, President, and CEO, the quarter's success can be attributed to “solid results throughout all segments of our business and advancing our strategic objectives through recent acquisitions.” The Parts Supply segment proved especially strong, with new parts distribution boasting an impressive 32% organic sales growth.

Strategic Acquisitions and Growth Initiatives

The quarter also marked pivotal strategic moves for AAR Corp, including the acquisition of ADI, which bolstered AAR's position in the parts distribution sector, and HAECO Americas, enhancing their heavy maintenance service capabilities. These acquisitions are expected to broaden AAR's market offerings and drive further revenue growth. Holmes commented that the ADI acquisition creates a new growth vector in distribution, one of the company’s fastest-growing areas over the last four years.

In conjunction with the HAECO acquisition, AAR secured contracts totaling approximately $850 million with key customers, effectively utilizing the acquired capacity for the next several years. This positions AAR as a premier airframe heavy maintenance provider in North America.

Financial Outlook

Despite past challenges including an after-tax loss last year associated with the FCPA settlement, AAR remains optimistic about continuing its momentum and improving its operational efficiencies. Net leverage stands at 2.49x, indicative of a robust balance sheet and the ability to fund future growth through both organic and acquisition strategies.

Looking ahead, AAR provided guidance for the third quarter of FY2026, projecting total sales growth of 20% to 22% and organic sales growth of 8% to 11%. Adjusted operating margins are expected to range between 9.8% and 10.1%.

Conclusion

In summary, AAR Corp. is on a strong growth trajectory, driven by strategic acquisitions and efficient operational performance. With a robust financial outlook and continued market demand, AAR is well-positioned to maintain its leadership status in the aerospace and defense aftermarket services sector. As the industry evolves, AAR's innovative approaches and strategic partnerships will be crucial in capturing future opportunities in the aviation market.