Q4 2024 AAR Corp Earnings Call Transcript
Key Points
- AAR Corp (AIR) delivered record full-year sales of $2.3 billion, up 17% over the prior year.
- Adjusted operating margins increased from 7.5% to 8.3% in fiscal 2024.
- Record adjusted diluted earnings per share from continuing operations of $3.33 compared to $2.86 last year.
- Strong performance in distribution and government integrated solutions activities, with sales increasing 19% year-over-year in Q4.
- Successful acquisition and integration of Triumph product support, contributing to revenue and margin improvements.
- USM whole asset sales declined due to constrained supply, despite strong demand.
- Repair and engineering segment's revenue was relatively flat, excluding the product support acquisition, due to hangars being nearly at capacity.
- Expeditionary services segment saw a 30% decline in sales due to depressed volumes in pallets and shelters.
- Net interest expense for the quarter was $18.7 million, reflecting the financing of the product support acquisition.
- Effective adjusted tax rate increased from 23.6% to 26.4%, with an expected rate of approximately 28% for FY25.
Good afternoon, everyone, and welcome to AAR's fiscal 2024 fourth quarter earnings call. We're joined today by John Holmes, Chairman, President and Chief Executive Officer; and Sean Gillen, Chief Financial Officer.
Before we begin, I would like to remind you that the comments made during the call may include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Accordingly, these statements are no guarantee of future performance. These risks and uncertainties are discussed in the company's earnings release and the risk factor section of the company's annual report on Form 10-K for the fiscal year ended May 31, 2024. With respect to be on file with the SEC shortly. In providing forward-looking statements, the company assumes no obligation to provide updates to reflect future circumstances or anticipated or unanticipated events.
Certain non-GAAP financial information will be discussed on the call
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