| AAR Reports Third Quarter Results
WOOD DALE, ILLINOIS (March 20, 2001) - AAR
(NYSE: AIR) today reported net income of $5.4 million and diluted
earnings per share of $0.20 for the third quarter of fiscal 2001,
which ended February 28, 2001. Sales for the quarter, excluding pass
through sales, were $200.1 million. This represented the third
quarter of sequential net income and earnings per share improvement.
The sequential earnings improvement was
principally driven by continued strength in the Company's component
repair and overhaul businesses, higher margins, lower selling,
general and administrative expenses and lower interest expense on
lower average borrowings. Sales for the third quarter of fiscal 2001
were down slightly from the second quarter largely due to
seasonality.
Sales and net income were down from prior year
levels of $256.6 million and $11.0 million, respectively, due to
continuing difficult industry conditions.
"During the third quarter, sales to the newer
generation aircraft and engine markets, including sales to the
relatively fast growing regional aircraft market, grew and
represented a greater proportion of our total sales. We continue to
invest in assets supporting new generation aircraft including
engines, auxiliary power units, avionics and landing gear," said AAR
President and CEO, David P. Storch.
"Additionally, we have recently received
several contracts for comprehensive support programs. AAR is one of
the few companies to offer customized inventory and logistics
programs in support of the world's aircraft fleet," Storch
continued. "The industry is heightening its focus on improving
efficiencies within the supply chain. With AAR's combination of
parts supply, logistics, repair and overhaul capabilities and
financial strength, we are in an ideal position to take advantage of
this trend."
Significant developments in the third quarter
included the following:
- AAR was awarded a two-year contract with
MTU Maintenance Canada, an independent aircraft engine services
provider, to provide a customized inventory supply and management
program.
- AAR was awarded contracts with Dyncorp
and Lear Siegler for global repair and overhaul support of over
400 propellers installed on U.S. Army C-12 and U.S. Navy C-26
aircraft.
- AAR was awarded a contract by United
Parcel Service to design and manufacture the main deck cargo
loading systems for their MD-11 freighters.
- AAR was awarded a one-year engine parts
support agreement by Air France.
- AAR was awarded two contracts to train
Egyptian Air Force personnel for maintenance of certain aircraft
components.
- AAR signed a three-year consignment agreement with Southwest
Airlines under which AAR will be responsible for managing, marketing
and selling certain spare airframe rotables and surplus avionics
inventory.
AAR Corp. (NYSE: AIR) is the preeminent provider of products and value-added services to the worldwide aerospace/aviation industry. Products and services include proprietary inventory management and logistic support services, encompassing supply, repair and manufacture of spare parts and systems. Headquartered in Wood Dale, Illinois, AAR serves commercial and government aircraft fleet operators and independent service customers throughout the world. Further information can be found at www.aarcorp.com.
AAR will hold its quarterly conference call at
10:00 AM (CST) on Tuesday, March 20, 2001. The conference call can
be accessed via dial-in (1-719-457-2604; conference code 521655). A
replay of the call will be available (1-719-457-0820; conference
code 521655) until 12 AM on Tuesday, March 27, 2001.
This press release contains
certain statements relating to future results, which are
forward-looking statements as that term is defined in the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements are based on beliefs of Company management as well as
assumptions and estimates based on information currently available
to the Company, and are subject to certain risks and uncertainties
that could cause actual results to differ materially from historical
results or those anticipated, depending on a variety of factors,
including: implementation of information technology systems,
integration of acquisitions, marketplace competition, economic and
aviation/aerospace market stability and Company profitability.
Should one or more of these risks or uncertainties materialize
adversely, or should underlying assumptions or estimates prove
incorrect, actual results may vary materially from those described.
AAR CORP. and Subsidiaries
Comparative Statement
of Earnings Three Months Ended Nine Months Ended
(In thousands except per share data) Feb 28/29, Feb 28/29,
2001 2000 2001 2000
(Unaudited) (Unaudited)
Sales $ 200,055 $ 256,558 $ 632,580 $ 750,537
Pass through sales 16 15,773 20,596 48,717
Total sales 200,071 272,331 653,176 799,254
Gross profit 35,746 45,074 105,498 134,992
SG&A 23,287 24,404 71,710 72,556
Operating income 12,459 20,670 33,788 62,436
Interest expense 5,433 5,979 17,139 17,749
Interest income 450 959 1,201 1,929
Pretax income 7,476 15,650 17,850 46,616
Net income 5,388 10,955 12,825 32,692
Earnings Per Share-Basic $ 0.20 $0.41 $ 0.48 $1.20
Earnings Per Share-Diluted $ 0.20 $0.40 $ 0.48 $1.19
Average shares outstanding-Basic 26,941 26,942 26,904 27,178
Average shares outstanding-Diluted 27,064 27,273 26,999 27,520
Balance Sheet Highlights February 28, May 31,
(In thousands except per share data) 2001 2000
(Unaudited) (Derived from
audited financial
statements)
Current assets $ 526,537 $ 511,267
Current liabilities 167,852 163,816
Working capital 358,685 347,451
Total assets 754,718 740,998
Long-term debt 180,106 180,447
Stockholders' equity 344,865 339,515
Book value per share $ 12.80 $ 12.64
Shares outstanding 26,945 26,865
Sales By Business Activity Three Months Ended Nine Months Ended
(In thousands) February 28/29, February 28/29,
2001 2000 2001 2000
Aircraft and Engines $ 71,651 $ 125,379 $ 246,336 $ 366,450
Airframe and Accessories 101,102 101,908 312,481 294,661
Manufacturing 27,302 29,271 73,763 89,426
$200,055 $256,558 $632,580 $750,537
Pass Through Sales 16 15,773 20,596 48,717
$200,071 $272,331 $653,176 $799,254
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