AAR Reports First Quarter Fiscal Year 2016 Results
During the quarter, the Company recorded a pre-tax gain of
"Performance in the first quarter was in line with our expectations as we continue executing on our industry-leading aviation and government services strategy," said
Storch continued, "For the balance of the year, in our Aviation Services segment, we expect continued demand for our MRO services and a return to more robust growth in supply chain. In our Expeditionary Services segment, we expect similar results in the second quarter with sequential improvement through the second half of the year as airlift increases its contracted fleet in different geographies."
Gross profit margin from continuing operations was 14.4% for the first quarter compared to 15.8% last year. In the Aviation Services segment, gross profit margin improved year-over-year due to higher margins in MRO. In the Expeditionary Services segment, gross profit margin declined year-over-year due to the mix of flying positions at airlift.
First quarter sales to commercial customers represented 61% of consolidated sales, compared to 60% of consolidated sales in the first quarter of last year. The balance of the sales was to government customers including defense.
Selling, general and administrative expenses as a percentage of sales were 10.4% for the first quarter, compared to 9.7% last year. This quarter was adversely impacted by increased legal expenses. Net interest expense from continuing operations for the quarter decreased to
In the first quarter, the Company paid out dividends to shareholders of
Conference Call Information
AAR will hold its quarterly conference call at
About AAR
AAR is a global aftermarket solutions company that employs more than 4,500 people in over 20 countries. Based in
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 Form 10-K for the fiscal year ended May 31, 2015. 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 |
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Consolidated Statements of Income (In millions except per share data - unaudited) |
Three Months Ended August 31, |
||
2015 |
2014 |
||
Sales |
$377.8 |
$395.1 |
|
Cost and expenses: |
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Cost of sales |
323.3 |
332.7 |
|
Selling, general and administrative |
39.4 |
38.5 |
|
Earnings from aircraft joint ventures |
(0.3) |
0.6 |
|
Operating income |
14.8 |
24.5 |
|
Loss on extinguishment of debt |
(0.3) |
- |
|
Interest expense |
(2.0) |
(6.4) |
|
Interest income |
0.1 |
0.1 |
|
Income from continuing operations before income taxes |
12.6 |
18.2 |
|
Income tax expense |
4.4 |
6.4 |
|
Income from continuing operations attributable to AAR |
8.2 |
11.8 |
|
Income from discontinued operations |
14.7 |
2.7 |
|
Income attributable to noncontrolling interest from discontinued operations |
- |
0.1 |
|
Income from discontinued operations attributable to AAR |
14.7 |
2.6 |
|
Net income attributable to AAR |
$22.9 |
$14.4 |
|
Earnings per share – Basic |
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Earnings from continuing operations |
$0.23 |
$0.29 |
|
Earnings from discontinued operations |
0.42 |
0.07 |
|
Earnings per share - Basic |
$0.65 |
$0.36 |
|
Earnings per share – Diluted |
|||
Earnings from continuing operations |
$0.23 |
$0.29 |
|
Earnings from discontinued operations |
0.42 |
0.07 |
|
Earnings per share – Diluted |
$0.65 |
$0.36 |
|
Share Data: |
|||
Weighted average shares outstanding – Basic |
34.7 |
38.8 |
|
Weighted average shares outstanding – Diluted |
35.1 |
39.2 |
|
AAR CORP. and Subsidiaries |
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Consolidated Balance Sheet Highlights (In millions except per share data) |
August 31, 2015 |
May 31, 2015 |
|
(Unaudited) |
|||
Cash and cash equivalents |
$28.7 |
$54.7 |
|
Current assets |
997.3 |
954.1 |
|
Current liabilities (excluding debt accounts) |
333.6 |
343.0 |
|
Net property, plant and equipment |
214.4 |
214.8 |
|
Total assets |
1,547.2 |
1,515.0 |
|
Total debt |
179.5 |
154.0 |
|
Stockholders' equity |
857.0 |
845.1 |
|
Book value per share |
$24.35 |
$23.87 |
|
Shares outstanding |
35.2 |
35.4 |
|
Sales By Business Segment (In millions - unaudited) |
Three Months Ended August 31, |
||
2015 |
2014 |
||
Aviation Services |
$315.8 |
$311.6 |
|
Expeditionary Services |
62.0 |
83.5 |
|
$377.8 |
$395.1 |
||
Gross Profit by Business Segment (In millions- unaudited) |
Three Months Ended August 31, |
||
2015 |
2014 |
||
Aviation Services |
$49.9 |
$48.2 |
|
Expeditionary Services |
4.6 |
14.2 |
|
$54.5 |
$62.4 |
||
Diluted Earnings Per Share Calculation (In millions except per share data- unaudited) |
Three Months Ended August 31, |
||
2015 |
2014 |
||
Net income attributable to AAR |
$22.9 |
$14.4 |
|
Less: Income attributable to participating shares |
(0.2) |
(0.2) |
|
Net income for diluted EPS calculation |
$22.7 |
$14.2 |
|
Weighted average shares outstanding - Diluted |
35.1 |
39.2 |
|
Diluted earnings per share |
$0.65 |
$ 0.36 |
Note: Pursuant to SEC Regulation G, the Company has included the following reconciliation of financial measure reported on a non-GAAP basis to compare financial measures reported on the basis of Generally Accepted Accounting Principles ("GAAP").
Net Debt (In millions- unaudited) |
August 31, |
August 31, |
|
Total debt |
$179.5 |
$627.1 |
|
Less: Cash and cash equivalents |
(28.7) |
(81.8) |
|
Net debt |
$150.8 |
$545.3 |
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SOURCE
John Fortson, Vice President, Chief Financial Officer | (630) 227-2075 | john.fortson@aarcorp.com