AOG Investors OPS Portal PAARTSSM Store
X Facebook Instagram Linkedin YouTube Threads

Press release

September 15, 2011

AAR Reports First Quarter Fiscal Year 2012 Results

  • First quarter sales of $479 million, up 19% year-over-year 
  • First quarter diluted earnings per share from continuing operations of $0.41, up 14% year-over-year

WOOD DALE, Ill., /PRNewswire via COMTEX/ --AAR (NYSE: AIR) today reported fiscal year 2012 first quarter sales of $479.3 million and income from continuing operations of $17.0 million, or $0.41 diluted earnings per share. For the first quarter of last fiscal year, the Company reported sales of $404.4 million and income from continuing operations of $14.0 million, or $0.36 diluted earnings per share.

Sales to commercial customers increased 40% compared to the first quarter of last year, driven by robust demand for spare parts support and completion of the sale of two aircraft from the Company's aircraft portfolio. The sale of the two aircraft contributed $33.3 million to revenue and is consistent with the Company's ongoing commitment to reduce its investment in its aircraft sales and leasing portfolio. Sales growth to commercial customers was 21% excluding the sale of the two aircraft. The Company also reported year-over-year growth at its MRO facilities attributable to share gains and strength at its landing gear business.

Sales to defense customers increased 2% in the first quarter compared to last year. While the Company experienced sales growth at AAR Airlift and at its Defense Logistics businesses, sales were lower at its Mobility Products unit. The Company expects second quarter revenues at the Mobility Products business to increase $10.0 to $15.0 million from first quarter levels as it ramps up production on two programs.

Consolidated gross profit margin was 15.6% for the first quarter compared to 17.3% last year. The reduction in the consolidated gross profit margin was due to lower volume within the Structures and Systems segment, the impact from the sale of the two aircraft and unfavorable mix in MRO.

Selling, general and administrative expenses as a percentage of sales declined to 8.7% compared to 10.2% in the year ago period due to leveraging the Company's cost structure and the impact from the sale of the two aircraft. Excluding sales of the two aircraft, selling, general and administrative expenses as a percent of sales were 9.4% for the first quarter of fiscal 2012.

"Our commercial businesses delivered solid top-line growth while we maintained steady overall results in our businesses supporting government and defense customers. As we look ahead to the remainder of the year, we are encouraged as all major programs that were up for renewal at AAR Airlift were renewed during the quarter, we have a major new customer in MRO, and will have a significant increase in production and delivery of shelters at Mobility," said David P. Storch, Chairman and Chief Executive Officer at AAR CORP. "Our margin performance was below expectations as the seasonal softness at MRO and our Mobility business led to production inefficiencies. Based on what we see today, we are confident that we will produce steady improvement in our operating margins as we expect sales growth at our Mobility Products unit, improved mix at MRO and as other initiatives gain momentum."

The Company will provide sales and earnings guidance for fiscal 2012 at its investor day scheduled for October 5, 2011 in New York.

AAR is a leading provider of products and value-added services to the worldwide aerospace and government and defense industries. With facilities and sales locations around the world, AAR uses its close-to-the-customer business model to serve aviation and government and defense customers through four operating segments: Aviation Supply Chain; Government and Defense Services; Maintenance, Repair and Overhaul; and Structures and Systems. More information can be found at www.aarcorp.com.

AAR will hold its quarterly conference call at 7:30 a.m. CDT on September 16, 2011. The conference call can be accessed by calling 866-206-6900 from inside the U.S. or 703-639-1110 from outside the U.S. A replay of the call will be available by calling 888-266-2081 from inside the U.S. or 703-925-2533 from outside the U.S. (access code 1550238) from 11:30 a.m. CDT on September 16, 2011 until 11:59 p.m. CDT on September 23, 2011.

AAR - Named One of the Most Trustworthy Companies by Forbes.

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, including those factors discussed under Item 1A, entitled "Risk Factors", included in the Company's May 31, 2011 Form 10-K. 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. These events and uncertainties are difficult or impossible to predict accurately and many are beyond the Company's control. The Company assumes no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. For additional information, see the comments included in AAR's filings with the Securities and Exchange Commission.

AAR CORP. and Subsidiaries

 

Consolidated Statements of Income

(In thousands except per share data - unaudited)

Three Months Ended

August 31,

 
 

2011

2010

 
     

Sales

479,290

 

$ 404,393

 

Cost and expenses:

       

Cost of sales

404,450

 

334,392

 

Selling, general and administrative

41,730

 

41,242

 
         

Earnings from aircraft joint ventures

205

 

28

 
         

Operating income

33,315

 

28,787

 
         

Gain on extinguishment of debt

---

 

97

 
         

Interest expense

7,518

 

7,433

 

Interest income

104

 

160

 
         

Income from continuing operations before income taxes

25,901

 

21,611

 

Income tax expense

8,938

 

7,564

 

Income from continuing operations

16,963

 

14,047

 

Discontinued operations, net of tax

(314)

 

(373)

 

Net income attributable to AAR

16,649

 

13,674

 
         

Earnings per share - Basic:

       

Earnings from continuing operations

$ 0.42

 

$ 0.37

 

Loss from discontinued operations

(0.01)

 

(0.01)

 

Earnings per share - Basic

$ 0.41

 

$ 0.36

 
         

Earnings per share - Diluted:

       

Earnings from continuing operations

$ 0.41

 

$ 0.36

 

Loss from discontinued operations

---

 

(0.01)

 

Earnings per share - Diluted

$ 0.41

 

$ 0.35

 
         

Share Data:

       
         

Average shares outstanding - Basic

38,869

 

38,411

 

Average shares outstanding - Diluted

43,346

 

42,854

 
   
         
   

Consolidated Balance Sheet Highlights

(In thousands except per share data- unaudited)

August 31,

2011

 

May 31,

2011

 
         

Cash and cash equivalents

$ 35,523

 

$ 57,433

 

Current assets

944,247

 

913,985

 

Current liabilities (excluding debt accounts)

273,703

 

301,935

 

Net property, plant and equipment

335,269

 

324,377

 

Total assets

1,752,372

 

1,703,727

 

Total recourse debt

485,503

 

427,365

 

Total non-recourse obligations

8,342

 

16,512

 

Stockholders' equity

849,129

 

835,289

 

Book value per share

$ 20.99

 

$ 21.00

 

Shares outstanding

40,461

 

39,781

 
   
       
   

Sales By Business Segment

(In thousands - unaudited)

Three Months Ended

August 31,

 
 

2011

2010

 

Aviation Supply Chain

$ 154,874

$ 100,266

 

Government and Defense Services

149,999

129,330

 

Maintenance, Repair & Overhaul

93,177

76,819

 

Structures and Systems

81,240

97,978

 
 

$ 479,290

$ 404,393

 
   
     
   

Gross Profit by Business Segment

(In thousands- unaudited)

Three Months Ended

August 31,

 
 

2011

2010

 

Aviation Supply Chain

$ 25,299

$ 19,240

 

Government and Defense Services

27,409

23,022

 

Maintenance, Repair & Overhaul

10,261

10,107

 

Structures and Systems

11,871

17,632

 
 

$ 74,840

$ 70,001

 
   
     
   

Diluted Earnings Per Share Calculation

(In thousands except per share data- unaudited)

Three Months Ended

August 31,

 
 

2011

2010

 
     

Income from continuing operations

$ 16,963

 

$ 14,047

 

Add after-tax interest on convertible debt

1,461

 

1,371

 

Less income attributable to participating shares

(548)

 

---

 

Net income for diluted EPS calculation

$ 17,876

 

$ 15,418

 
         

Diluted shares outstanding

43,346

 

42,854

 
         

Diluted earnings per share from continuing operations

$ 0.41

 

$ 0.36

 
   
         

Note: Pursuant to SEC Regulation G, the Company has included the following reconciliation of financial measures reported on a non-GAAP basis to comparable financial measures reported on the basis of Generally Accepted Accounting Principles ("GAAP"). The Company believes that the SG&A as a percentage of sales for the three-month period ended August 31, 2011 is an important ratio to use for comparison purposes to the prior year's results.

   

Consolidated

(In thousands)

 

Sales

 

SG&A

 

SG&A %

 
               

Consolidated

 

$479,290

 

$41,730

 

8.7%

 

Aircraft Sales

 

33,268

 

---

 

NA

 

Results excluding Aircraft Sales

 

$446,022

 

$41,730

 

9.4%

 
   
             

Related news

See all SeeAll
AAR Doing It Right logo

Press release

June 13, 2024

AAR expands electronics distribution relationship with OTTO Engineering, Inc.

Wood Dale, Illinois — AAR CORP. (NYSE: AIR), a leading provider of aviation services to commercial and government operators, MROs, and OEMs, has signed a territory expansion agreement that expands its Americas-based electronics distribution relationship with OTTO Engineering, Inc. (OTTO) into the APAC region. 

AAR Doing It Right logo

Press release

May 30, 2024

AAR awarded on the USA TODAY America’s Best Climate Leaders 2024 list

Wood Dale, Illinois — AAR CORP. (NYSE: AIR), a leading provider of aviation services to commercial and government operators, MROs, and OEMs, has been awarded on USA TODAY’s list of America’s Best Climate Leaders 2024. This prestigious award is presented by USA TODAY and Statista Inc., the world-leading statistics portal and industry ranking provider. 

Press release

May 29, 2024

AAR named to Newsweek’s America’s Greatest Workplaces for Diversity 2024

Wood Dale, Illinois — AAR CORP. (NYSE: AIR), a leading provider of aviation services to commercial and government operators, MROs, and OEMs, announced today that it has been recognized as one of America’s Greatest Workplaces for Diversity 2024 by Newsweek and Plant-A Insights Group.

AOG Investors OPS Portal PAARTSSM Store
logo

Our products

Airframe parts Engine solutions Distribution Mobility Systems AOG Contact nowContact
logo

Our services

Repair & Engineering

Airframe MRO Landing Gear Overhaul Component Services Wheels and Brakes Engineering Services

Integrated Solutions

Flight-hour support Consumables and Expendables Airinmar® Trax(SM)

Additional services

Sourcing, purchasing, and remarketing ASTRO Government contract vehicles
logo

About

Our CompanyOur Company

Locations Certifications Digital innovation

Doing It Right®Doing It Right®

Environmental, social, and governance Ethics and compliance

LeadershipLeadership

logo

Careers

US job openings Amsterdam job openings Thailand job openings Trois Rivières - Canada job openings United Kingdom job openings Windsor - Canada job openings
Employee experience Diversity, equity, and inclusion Military veterans EAGLE Pathway Program
logo

Newsroom

News Media resources
2023 Annual Report 2023 ESG Summary Report