AAR Reports Fourth Quarter And Fiscal Year 2017 Results
Sales in Aviation Services increased 5.2% in the quarter over last year, reflecting strong performance for our industry-leading integrated supply chain solutions and our aircraft and parts supply activities. Growth in those businesses more than offset the impact of the wind-down of the KC-10 CLS Program and one of our airframe maintenance facilities, which collectively contributed
The Company recently announced significant new business wins, including the award of a
"The broad market acceptance of the AAR brand as an industry leading provider of maintenance and supply chain solutions to operators around the globe, the growing global commercial aircraft fleet, and the increasing trend to outsource non-core functions by commercial and government customers all set the stage for a positive outlook for our business as we enter our Fiscal Year 2018", said
Fourth quarter sales to commercial customers represented 70.5% of consolidated sales compared to 63.9% of consolidated sales in the fourth quarter of last year. Sales to government and defense customers represented 29.5% of consolidated sales compared to 36.1% in the prior year's quarter.
Selling, general and administrative expenses as a percentage of sales were 11.8% for the quarter, compared to 10.0% last year largely due to costs related to our defense of the INL/A contract award, higher personnel-related costs and expenses from other strategic actions.
Net interest expense for the quarter was
Net debt at
Commenting on near-term opportunities, Storch continued, "We are pleased with the new contracts awarded for our industry-leading integrated supply chain solutions. We are now supporting over 1,400 aircraft for our customers. Our execution on these contract awards has been a significant contributor to our revenue growth over the past year. The size of our supported fleet, our entry into new aircraft platforms such as the B777, and our geographic expansion into
Fiscal Year 2017 Results
Full Fiscal Year 2017 consolidated sales were
Full Fiscal Year 2017 income from continuing operations was
Sales to commercial customers in Fiscal Year 2017 represented 66.2% of consolidated sales as compared to 61.6% in Fiscal Year 2016, with sales to government and defense customers representing the balance in each year.
Net interest expense for Fiscal Year 2017 was
Outlook
We expect to continue to employ a balanced capital allocation strategy, leveraging the Company's strong balance sheet to support both internal and external growth opportunities and to return capital to shareholders. Since the fourth quarter of 2015, the Company has returned
We are successfully executing our business strategy to grow our integrated supply chain and MRO businesses organically, while we continue to look to supplement this growth through acquisitions. We will remain disciplined in our approach to acquisitions by seeking out opportunities that will enhance our capabilities, expand our customer base or open up new markets for our businesses.
Financial flexibility will continue to be a top priority in order to take advantage of opportunities to drive growth and enhance shareholder value.
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
Consolidated Statements of Income (In millions except per share data - unaudited) |
Three Months Ended |
Twelve Months Ended |
|||||||
2017 |
2016 |
2017 |
2016 |
||||||
Sales |
$492.3 |
$468.6 |
$1,767.6 |
$1,698.9 |
|||||
Cost and expenses: |
|||||||||
Cost of sales |
412.5 |
403.0 |
1,491.1 |
1,461.0 |
|||||
Selling, general and administrative |
58.2 |
47.0 |
196.7 |
173.2 |
|||||
Earnings (Loss) from aircraft joint ventures |
— |
0.1 |
(0.2) |
(0.3) |
|||||
Operating income |
21.6 |
18.7 |
79.6 |
64.4 |
|||||
Loss on extinguishment of debt |
— |
— |
— |
(0.4) |
|||||
Interest expense |
(1.5) |
(1.2) |
(5.5) |
(6.4) |
|||||
Interest income |
— |
0.1 |
0.2 |
0.3 |
|||||
Income from continuing operations before income tax expense |
20.1 |
17.6 |
74.3 |
57.9 |
|||||
Income tax expense |
5.0 |
5.8 |
24.1 |
19.6 |
|||||
Income from continuing operations |
15.1 |
11.8 |
50.2 |
38.3 |
|||||
Income from discontinued operations |
6.1 |
0.2 |
6.3 |
9.4 |
|||||
Net income |
$21.2 |
$12.0 |
$56.5 |
$47.7 |
|||||
Earnings per share – basic: |
|||||||||
Continuing operations |
$0.44 |
$0.35 |
$1.47 |
$1.10 |
|||||
Discontinued operations |
0.18 |
— |
0.19 |
0.27 |
|||||
Earnings per share – Basic |
$0.62 |
$0.35 |
$1.66 |
$1.37 |
|||||
Earnings per share – diluted: |
|||||||||
Continuing operations |
$0.44 |
$0.34 |
$1.45 |
$1.10 |
|||||
Discontinued operations |
0.18 |
— |
0.19 |
0.27 |
|||||
Earnings per share – Diluted |
$0.62 |
$0.34 |
$1.64 |
$1.37 |
|||||
Share Data: |
|||||||||
Average shares outstanding – Basic |
33.8 |
34.0 |
33.9 |
34.4 |
|||||
Average shares outstanding – Diluted |
34.3 |
34.2 |
34.3 |
34.6 |
|||||
AAR CORP. and Subsidiaries |
||||
Consolidated Balance Sheet Highlights (In millions except per share data - unaudited) |
May 31, 2017 |
May 31, 2016 |
||
Cash and cash equivalents |
$ 10.3 |
$31.2 |
||
Current assets |
888.5 |
881.7 |
||
Current liabilities (excluding debt accounts) |
333.1 |
329.4 |
||
Net property, plant and equipment |
201.9 |
238.1 |
||
Total assets |
1,504.1 |
1,456.0 |
||
Total debt |
159.3 |
150.1 |
||
Stockholders' equity |
914.2 |
865.8 |
||
Book value per share |
$26.58 |
$25.10 |
||
Shares outstanding |
34.4 |
34.5 |
||
Sales By Business Segment (In millions - unaudited) |
Three Months Ended May 31, |
Twelve Months Ended May 31, |
||
2017 |
2016 |
2017 |
2016 |
|
Aviation Services |
$ 421.3 |
$ 400.4 |
$ 1,485.4 |
$ 1,425.0 |
Expeditionary Services |
71.0 |
68.2 |
282.2 |
273.9 |
$ 492.3 |
$ 468.6 |
$ 1,767.6 |
$ 1,698.9 |
|
Gross Profit by Business Segment (In millions - unaudited) |
Three Months Ended May 31, |
Twelve Months Ended May 31, |
||
2017 |
2016 |
2017 |
2016 |
|
Aviation Services |
$ 73.4 |
$ 63.1 |
$ 246.2 |
$ 229.8 |
Expeditionary Services |
6.4 |
2.5 |
30.3 |
8.1 |
$ 79.8 |
$ 65.6 |
$ 276.5 |
$ 237.9 |
|
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"). The Company uses net debt to evaluate its financial position and results and trends and believes it is useful for the reader of this press release.
Net Debt (In millions- unaudited) |
May 31, 2017 |
May 31, 2016 |
|
Total debt |
$159.3 |
$150.1 |
|
Less: Cash and cash equivalents |
(10.3) |
(31.2) |
|
Net debt |
$149.0 |
$118.9 |
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SOURCE
Jason Secore, Vice President, Treasurer | (630) 227-2075 | jason.secore@aarcorp.com