Q1 2025 AAR Corp Earnings Call Transcript
Key Points
- AAR Corp (AIR) reported a 20% year-over-year increase in quarterly sales, reaching $662 million.
- Adjusted operating margins improved by 180 basis points, from 7.3% to 9.1%.
- The company's parts supply segment saw a 26% organic growth in new parts distribution.
- Repair and engineering sales grew by 58%, with strong demand for MRO services.
- The recent acquisition of Triumph Product Support exceeded initial expectations and contributed to profitability.
- USM activity in parts supply saw a 22% decline due to a lack of whole assets available in the market.
- Cash flow used in operating activities was $19 million, driven by investments in inventory.
- Net interest expense for the quarter was $18.3 million, reflecting the financing of the product support acquisition.
- Integrated solutions adjusted operating margin decreased by 40 basis points to 6.2%, impacted by the mix within government programs.
- The company recognized a net loss of $3.2 million related to the termination of a government contract in expeditionary services.
Good afternoon, everyone, and welcome to AAR's fiscal 2025 first quarter earnings call. We're joined today by John Holmes, Chairman, President and Chief Executive Officer, and Sean Gillen, ChieIf Financial Officer.
Before we begin, I'd 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 factors section of the company's annual report on Form 10-K for the fiscal year ended May 31, 2024.
In providing the 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 in the call today. A
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