WOOD DALE, Ill., March 21, 2017 /PRNewswire/ -- AAR CORP. (NYSE:
AIR) today reported third quarter Fiscal Year 2017 consolidated
sales of $446.7 million and income
from continuing operations of $13.1
million, or $0.38 per diluted
share. For the third quarter of the prior fiscal year, the
Company reported sales of $412.1
million and income from continuing operations of
$9.9 million, or $0.29 per diluted share.
Sales in Aviation Services increased 9.6% in the quarter
reflecting continued strong performance for the Company's industry
leading supply chain management solutions. Sales in
Expeditionary Services also increased 1.6% as volumes continue to
recover in the mobility business.
The Company announced significant new business wins in the
quarter including the award of a comprehensive supply chain
management and component repair agreement with Allegiant Air
covering their fleet of A320 aircraft and an agreement to provide
landing gear overhaul and exchange services for SkyWest's fleet of
Bombardier CRJ aircraft. Our services on these new awards
began in the third quarter. Subsequent to the end of the
quarter, we signed a five year agreement with India's largest airline, Interglobe Aviation
Limited (IndiGo), to provide landing gear overhaul services on up
to 49 full ship sets of A320 landing gear.
Third quarter sales to commercial customers represented 68.1% of
consolidated sales, compared to 60.6% of consolidated sales in the
third quarter of last year. Sales to government and defense
customers represented 31.9% of consolidated sales compared to 39.4%
in the prior year's quarter.
Selling, general and administrative expenses as a percentage of
sales were 10.6% for the quarter, compared to 10.5% last year.
During the quarter, we incurred approximately $1.4 million in legal fees related to our defense
of the INL/A Aviation Support Services Contract (the "INL/A
Contract") awarded by the U.S. Department of State ("DoS") on
September 1, 2016 and protested by
the incumbent. The U.S. Government Accountability Office
reaffirmed the award on December 23,
2016, and the incumbent filed a second protest with the U.S.
Court of Federal Claims ("COFC") on December
28, 2016. We are an intervenor in the COFC case and
expect a decision from the COFC on the incumbent's protest no later
than August 2017.
Net interest expense from continuing operations for the quarter
was $1.4 million compared to
$1.6 million last year. Also
during the quarter, the Company paid cash dividends of $2.5 million, or $0.075 per share. Average diluted share
count for the quarter was 34.2 million compared to 34.4 million in
the third quarter last year.
Net debt at February 28, 2017 was
$162.7 million compared to
$145.3 million at February 29, 2016. The net debt increase
during the quarter was primarily for investments in assets to
support our recently announced long term flight hour program
awards.
"We are very pleased with our progress during the quarter as we
continue to use our strong financial position to support our
customers," said David P. Storch,
Chairman, President, and Chief Executive Officer of AAR CORP.
"We are investing in inventory and systems infrastructure as we
provide cost effective long term supply chain solutions for our
customers."
Conference Call Information
AAR will hold its quarterly conference call at 3:45 p.m. CDT on March 21,
2017. The conference call can be accessed by calling
866-802-4322 from inside the U.S. or 703-639-1319 from outside the
U.S. A replay of the conference call will also be available
by calling 855-859-2056 from inside the U.S. or 404-537-3406 from
outside the U.S. (access code 8291068). The replay will be
available from 7:15 p.m. CDT on
March 21, 2017, until 10:59 p.m. CDT on March
28, 2017.
About AAR
AAR is a global aftermarket solutions company that employs more
than 4,500 people in over 20 countries. Based in Wood Dale, Illinois, AAR supports commercial
aviation and government customers through two operating segments:
Aviation Services and Expeditionary Services. AAR's Aviation
Services include inventory management; parts supply; OEM parts
distribution; aircraft maintenance, repair and overhaul; and
component repair. AAR's Expeditionary Services include airlift
operations; mobility systems; and command and control centers in
support of military and humanitarian missions. Additional
information can be found at www.aarcorp.com.
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, 2016. 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 millions
except per share data - unaudited)
|
Three Months
Ended
February 28/29,
|
|
Nine Months
Ended
February 28/29,
|
|
|
|
|
|
|
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
Sales
|
$446.7
|
|
$412.1
|
|
$1,275.3
|
|
$1,230.3
|
Cost and
expenses:
|
|
|
|
|
|
|
|
Cost of
sales
|
377.7
|
|
352.8
|
|
1,078.6
|
|
1,058.0
|
Selling, general and
administrative
|
47.4
|
|
43.1
|
|
138.5
|
|
126.2
|
|
|
|
|
|
|
|
|
Loss from aircraft
joint ventures
|
(0.2)
|
|
—
|
|
(0.2)
|
|
(0.4)
|
|
|
|
|
|
|
|
|
Operating
income
|
21.4
|
|
16.2
|
|
58.0
|
|
45.7
|
|
|
|
|
|
|
|
|
Loss on
extinguishment of debt
|
—
|
|
—
|
|
—
|
|
(0.4)
|
Interest
expense
|
(1.5)
|
|
(1.7)
|
|
(4.0)
|
|
(5.2)
|
Interest
income
|
0.1
|
|
0.1
|
|
0.2
|
|
0.2
|
|
|
|
|
|
|
|
|
Income from
continuing operations before income tax expense
|
20.0
|
|
14.6
|
|
54.2
|
|
40.3
|
Income tax
expense
|
6.9
|
|
4.7
|
|
19.1
|
|
13.8
|
Income from
continuing operations
|
13.1
|
|
9.9
|
|
35.1
|
|
26.5
|
Income (Loss) from
discontinued operations
|
0.6
|
|
(5.1)
|
|
0.2
|
|
9.2
|
Net
income
|
$13.7
|
|
$4.8
|
|
$35.3
|
|
$35.7
|
|
|
|
|
|
|
|
|
Earnings (Loss)
per share – basic:
|
|
|
|
|
|
|
|
Continuing
operations
|
$0.39
|
|
$0.29
|
|
$1.03
|
|
$0.76
|
Discontinued
operations
|
0.02
|
|
(0.15)
|
|
0.01
|
|
0.27
|
Earnings per share –
Basic
|
$0.41
|
|
$0.14
|
|
$1.04
|
|
$1.03
|
|
|
|
|
|
|
|
|
Earnings (Loss)
per share – diluted:
|
|
|
|
|
|
|
|
Continuing
operations
|
$0.38
|
|
$0.29
|
|
$1.02
|
|
$0.76
|
Discontinued
operations
|
0.02
|
|
(0.15)
|
|
0.01
|
|
0.27
|
Earnings per share –
Diluted
|
$0.40
|
|
$0.14
|
|
$1.03
|
|
$1.03
|
|
|
|
|
|
|
|
|
Share
Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average shares
outstanding – Basic
|
33.7
|
|
34.2
|
|
33.9
|
|
34.5
|
Average shares
outstanding – Diluted
|
34.2
|
|
34.4
|
|
34.3
|
|
34.7
|
|
|
|
|
|
|
|
|
AAR CORP. and
Subsidiaries
|
|
Consolidated
Balance Sheet Highlights
(In millions
except per share data)
|
|
February
28,
2017
|
May
31,
2016
|
|
|
(Unaudited)
|
|
Cash and cash
equivalents
|
$
10.1
|
$31.2
|
Current
assets
|
893.1
|
881.7
|
Current
liabilities (excluding debt accounts)
|
340.8
|
329.4
|
Net property,
plant and equipment
|
211.9
|
238.1
|
Total
assets
|
1,502.1
|
1,456.0
|
Total
debt
|
172.8
|
150.1
|
Stockholders'
equity
|
885.7
|
865.8
|
Book value per
share
|
$25.82
|
$25.10
|
Shares
outstanding
|
34.3
|
34.5
|
|
|
|
|
|
|
Sales By Business
Segment
(In millions -
unaudited)
|
Three Months
Ended
February 28/29,
|
Nine Months
Ended
February 28/29,
|
|
2017
|
2016
|
2017
|
2016
|
Aviation
Services
|
$
382.8
|
$ 349.2
|
$
1,064.1
|
$ 1,024.6
|
Expeditionary
Services
|
63.9
|
62.9
|
211.2
|
205.7
|
|
$
446.7
|
$ 412.1
|
$
1,275.3
|
$ 1,230.3
|
|
|
|
|
|
|
|
|
|
|
Gross Profit by
Business Segment
(In millions -
unaudited)
|
Three Months
Ended
February 28/29,
|
Nine Months
Ended
February 28/29,
|
|
2017
|
2016
|
2017
|
2016
|
Aviation
Services
|
$
63.4
|
$ 58.6
|
$
172.8
|
$ 166.7
|
Expeditionary
Services
|
5.6
|
0.7
|
23.9
|
5.6
|
|
$
69.0
|
$ 59.3
|
$
196.7
|
$ 172.3
|
|
|
|
|
|
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)
|
February 28,
2017
|
|
February 29,
2016
|
Total
debt
|
$172.8
|
|
$195.7
|
Less: Cash and
cash equivalents
|
(10.1)
|
|
(50.4)
|
Net
debt
|
$162.7
|
|
$145.3
|
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visit:http://www.prnewswire.com/news-releases/aar-reports-third-quarter-fiscal-year-2017-results-300427227.html
SOURCE AAR