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AIR |
|
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT
REPORT
Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Date of Report (Date of earliest event reported): December 21, 2023
AAR CORP.
(Exact name of registrant as specified in
its charter)
Delaware |
|
1-6263 |
|
36-2334820 |
(State or other jurisdiction
of incorporation) |
|
(Commission
File Number) |
|
(IRS Employer
Identification No.) |
One AAR Place
1100 N. Wood Dale Road
Wood Dale, Illinois |
|
60191 |
(Address of principal executive offices) |
|
(Zip Code) |
Registrant’s telephone number, including
area code: (630) 227-2000
Not Applicable
(Former name or former address, if changed
since last report)
Check the appropriate box below if the Form 8-K filing
is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of
the Act:
Title of
each class |
|
Trading
Symbol(s) |
|
Name
of each exchange
on which registered |
Common
Stock, $1.00 par value |
|
AIR |
|
New
York Stock Exchange |
|
|
Chicago
Stock Exchange |
Indicate by check mark whether the registrant is an emerging
growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of
the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging
growth company ¨
If an emerging
growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with
any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
| Item 7.01 | Regulation FD Disclosure. |
Press Release. On December 21, 2023, AAR CORP., a Delaware
corporation (the “Company” or “AAR”), issued a press release announcing the entry into a Securities
and Asset Purchase Agreement (the “Purchase Agreement”) by and among the Company; Triumph Group, Inc., a Delaware
corporation (“Triumph”); Triumph Aftermarket Services Group, LLC, a Delaware limited liability company; Triumph Group
Acquisition Corp., a Delaware corporation and wholly owned subsidiary of Triumph; Triumph Group Acquisition Holdings, Inc., a Delaware
corporation; and Trident Group Operations, Inc., a Delaware corporation (collectively with Triumph, Triumph Aftermarket Services
Group, LLC, Triumph Group Acquisition Corp. and Triumph Group Acquisition Holdings, Inc., the “Sellers”). The
Purchase Agreement provides that, subject to the terms and conditions set forth therein, the Company will acquire Triumph’s Product
Support business from the Sellers (the “Transactions”). A copy of the press release is attached as Exhibit 99.1
to this Form 8-K and incorporated herein by reference.
Investor Presentation. On December 21, 2023, the Company
posted an Investor Presentation regarding the Transactions. The Investor Presentation is attached as Exhibit 99.2 to this Form 8-K and incorporated
herein by reference.
The information furnished under Item 7.01 and Exhibits 99.1 and 99.2
of this Form 8-K shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section and shall not
be deemed incorporated by reference in any filing made by the Company under the Securities Act of 1933, as amended, or the Exchange Act,
except as set forth by specific reference in such filing.
Forward-Looking Statements
This Current Report on Form 8-K 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, which reflect management’s expectations about future conditions. Forward-looking statements may also
be identified because they contain words such as “anticipate,” “believe,” “continue,” “could,”
“estimate,” “expect,” “intend,” “likely,” “may,” “might,” “plan,”
“potential,” “predict,” “project,” “seek,” “should,” “target,”
“will,” “would,” or similar expressions and the negatives of those terms. 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.
Such risks and uncertainties include, but are not limited to: (1) the inability to consummate the Transactions within the anticipated
time period, or at all, due to any reason, including the failure to obtain required regulatory approvals or the failure to satisfy the
other conditions to the consummation of the Transactions; (2) the risk that the Transactions disrupt AAR’s current business
and financing plans and operations or divert management’s attention from its ongoing business; (3) the effect of the announcement
of the Transactions on AAR’s ability to retain and hire key personnel and maintain relationships with its customers, suppliers and
others with whom it does business; (4) the effect of the announcement of the Transactions on AAR’s operating results and business
generally; (5) the amount of costs, fees and expenses related to the Transactions; (6) the risk that AAR’s stock price
may decline significantly if the Transactions are not consummated; (7) the nature, cost and outcome of any litigation and other legal
proceedings, including any such proceedings related to the Transactions and instituted against AAR and others; (8) the risk that
the acquired assets will not be integrated successfully or that AAR will not realize expected benefits, cost savings, accretion, synergies
and/or growth, or that such benefits may take longer to realize than expected; (9) other factors that could affect AAR’s business
such as, without limitation, factors that adversely affect the commercial aviation industry, a reduction in the level of sales to the
branches, agencies and departments of the U.S. government and their contractors, and non-compliance with laws and regulations relating
to AAR’s business; and (10) other risks to consummation of the Transactions.
For a discussion of these and other risks
and uncertainties, refer to “Risk Factors” in AAR’s most recent Annual Report on Form 10-K, its most recent Quarterly
Report on Form 10-Q and its subsequent filings and quarterly reports. 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.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: December 21, 2023 |
|
|
AAR CORP. |
|
|
|
By: |
|
|
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/s/ Jessica A. Garascia |
|
|
Jessica A. Garascia |
|
|
Senior Vice President, General Counsel, Chief Administrative Officer and Secretary |
Exhibit 99.1
FOR IMMEDIATE RELEASE
December 21, 2023
Contact:
Dylan Wolin
Vice President, Strategic &
Corporate Development and Treasurer
+1-630-227-2017
dylan.wolin@aarcorp.com
AAR announces agreement to acquire Triumph Group’s
Product Support business, a leading provider of MRO services to the global aviation aftermarket
| ● | Meaningfully scales AAR’s repair capabilities and is highly complementary
to existing portfolio |
| ● | Significantly accretive to margins and expands customer base and global footprint |
| ● | Expected run-rate cost synergies of $10 million |
| ● | Expected to be accretive to revenue growth and Adjusted EPS in the first
full fiscal year |
| ● | Strong combined free cash flow expected to enable deleveraging |
Wood Dale, Illinois
— AAR CORP. (NYSE: AIR), a leading provider of aviation services to commercial and government operators, MROs, and OEMs,
has entered into a definitive agreement with Triumph Group (NYSE: TGI) to purchase Triumph Product Support for $725 million in cash. As
part of the transaction, AAR expects to receive estimated tax benefits with a present value of approximately $80 million. Including the
estimated tax benefits, the effective purchase price multiple is expected to be 11.7x FY2024 EBITDA and 9.9x including estimated run-rate
synergies of $10 million.
Triumph Product Support is a leading global provider of specialized
maintenance, repair, and overhaul capabilities for critical aircraft components in the commercial and defense markets. The company provides
MRO services for structural components, engine and airframe accessories, interior refurbishment, and wheels and brakes. Additionally,
Triumph Product Support designs proprietary designated engineering representative (DER) repairs and Parts Manufacturer Approval (PMA)
parts.
Triumph Product Support services both the commercial and military aftermarkets
across five primary locations with a highly skilled workforce of over 700 employees. The business is projected to generate approximately
$280 million of revenue and $55 million of EBITDA, representing an EBITDA margin of 20%, in its fiscal year ending March 31, 2024.
“Today we are very excited to announce the execution of an agreement
with Triumph to acquire its Product Support business. Triumph Product Support has built an excellent reputation for high quality and differentiated
repair offerings. This highly strategic acquisition will deepen and broaden our customer relationships globally and expand our footprint.
Furthermore, the addition of this high-margin business is expected to further increase our operating margin and is expected to be accretive
to our earnings. We look forward to welcoming Product Support’s talented team to AAR,” said John M. Holmes Chairman, President
and Chief Executive Officer of AAR CORP.
AAR’s acquisition of Triumph Product Support is supported by
a fully committed bridge facility. AAR intends for permanent financing to include a mix of debt and equity to maintain a strong balance
sheet to support future growth. AAR will target pro forma net leverage to be approximately 3.0x at closing, inclusive of a potential equity
issuance subject to market conditions. After closing, we expect strong combined free cash flow to enable further deleveraging.
The transaction is expected to close in the first quarter of the 2024
calendar year, subject to customary closing conditions, including receipt of certain regulatory approvals.
For more information on the acquisition, review slides available here.
For more information on AAR, visit aarcorp.com.
AAR will discuss the acquisition of
Triumph Product Support on its earnings conference call to be held today at 3:45 p.m. Central time. The conference call may
be accessed by registering at https://register.vevent.com/register/BIe408558c6b344fb2aca2a3d5d43d47f9. Once registered, participants
will receive a dial-in number and a unique PIN that will allow them to access the call.
Advisors
BofA Securities is acting as lead financial advisor, Wells Fargo Securities,
LLC is acting as financial advisor, and Latham & Watkins LLP is acting as legal counsel to AAR. Wells Fargo Securities, LLC and
BofA Securities are providing AAR with committed bridge financing for the transaction.
About AAR
AAR is a global aerospace and defense aftermarket solutions company
with operations in over 20 countries. Headquartered in the Chicago area, AAR supports commercial and government customers through four
operating segments: Parts Supply, Repair & Engineering, Integrated Solutions, and Expeditionary Services. Additional information
can be found at aarcorp.com.
About Triumph
TRIUMPH, headquartered in Radnor, Pennsylvania, designs, engineers,
manufactures, repairs and overhauls a broad portfolio of aerospace and defense systems and components. The company serves the global aviation
industry, including original equipment manufacturers and the full spectrum of military and commercial aircraft operators.
More information about TRIUMPH can be found on the Company’s
website at www.triumphgroup.com.
Forward-looking Statements
This press release contains certain statements relating to future business
opportunities and conditions, as well as anticipated benefits of the proposed acquisition by AAR CORP. (the “Company”) of
Triumph Group's Product Support business (the “Acquisition”) and expected contributions of the Triumph Group Product Support
business to the Company’s future financial results. Such statements are forward-looking statements as that term is defined in the
Private Securities Litigation Reform Act of 1995 and reflect management’s expectations about future conditions. Forward-looking
statements may also be identified because they contain words such as “anticipate,” “believe,” “continue,”
“could,’’ “estimate,” “expect,” “intend,” “likely,” “may,”
“might,” “plan,” “potential,” “predict,” “project,” “seek,” “should,”
“target,” “will,” “would,” or similar expressions and the negatives of those terms. Factors that may
cause actual results to differ materially from current expectations include, among others, risks associated with the Company’s ability
to consummate the Acquisition and the timing of the Acquisition; the Company’s ability to successfully integrate the acquired business;
the Company’s ability to realize the anticipated benefits and synergies of the Acquisition as rapidly or to the extent anticipated;
risks related to the Company’s ability to obtain any contemplated financing on favorable terms or at all; the effect of the announcement
of the Acquisition on the Company’s operating results and business generally; the amount of costs, fees and expenses related to
the Acquisition; and other factors that could affect the Company’s business. 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. For
a discussion of these and other risks and uncertainties, refer to “Risk Factors” in the Company’s most recent Annual
Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q. 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 and
the anticipated benefits of the Acquisition may not be realized. These events and uncertainties are difficult or impossible to predict
accurately and many are beyond the Company’s control. The Company cautions readers not to place undue reliance upon any such forward-looking
statements, which speak only as of the date made. 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, except
as required by law.
Non-GAAP Financial Measures
This press release contains certain financial measures that are not recognized under U.S. generally accepted accounting principles
(GAAP), including Triumph Product Support’s forecasted EBITDA and EBITDA margin for its fiscal year ending March 31, 2024.
The Company is unable to provide a reconciliation between Triumph Product Support’s forecasted EBITDA and EBITDA margin to its net
income metric without unreasonable effort due to the unavailability of reliable estimates for certain items.
Exhibit 99.2
AAR CORP. All rights reserved worldwide. 0 AAR to acquire Triumph Group’s Product Support business December 21, 2023
AAR CORP. All rights reserved worldwide. 1 Forward - looking statements This presentation contains certain statements relating to future business opportunities and conditions, as well as anticipate d b enefits of AAR CORP.’s (the “Company”) proposed acquisition of Triumph Group’s Product Support business (the “Acquisition”) and expected contributions of th e Triumph Group Product Support business to the Company’s future financial results. Such statements are forward - looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995 and reflect management’s expectations about future conditions. Forward - looking statemen ts may also be identified because they contain words such as ‘‘anticipate,’’ ‘‘believe,’’ ‘‘continue,’’ ‘‘could,’’ ‘‘estimate,’’ ‘‘expect,’’ ‘‘ intend,’’ ‘‘likely,’’ ‘‘may,’’ ‘‘might,’’ ‘‘plan,’’ ‘‘potential,’’ ‘‘predict,’’ ‘‘project,’’ ‘‘seek,’’ ‘‘should,’’ ‘‘target,’’ ‘‘will,’’ ‘‘would,’’ or similar expressions and th e n egatives of those terms. Factors that may cause actual results to differ materially from current expectations include, among others, risks associated with the Company’s abil ity to consummate the Acquisition and the timing of the Acquisition; the Company’s ability to successfully integrate the acquired business; the Com pan y’s ability to realize the anticipated benefits and synergies of the Acquisition as rapidly or to the extent anticipated; risk related to the Company’s abi lity to obtain any contemplated financing on favorable terms or at all; the effect of the announcement of the Acquisition on the Company’s opera tin g results and business generally; the amount of costs, fees and expenses related to the Acquisition; and other factors that could affect the Company ’s business. These forward - looking statements are based on beliefs of Company management, as well as assumptions and estimates based on information curr ent ly available to the Company, and are subject to certain risks and uncertainties that could cause actual results to differ materially from histori cal results or those anticipated. For a discussion of these and other risks and uncertainties, refer to “Risk Factors” in the Company’s most recent Annual Repo rt on Form 10 - K and subsequent Quarterly Reports on Form 10 - Q. Should one or more of these risks or uncertainties materialize adversely, or should u nderlying assumptions or estimates prove incorrect, actual results may vary materially from those described and the anticipated benefits of the Acq uis ition may not be realized. These events and uncertainties are difficult or impossible to predict accurately and many are beyond the Company’s control. T he Company cautions readers not to place undue reliance upon any such forward - looking statements, which speak only as of the date made. The Company assumes no obligation to update any forward - looking statements to reflect events or circumstances after the date of such statements or to r eflect the occurrence of anticipated or unanticipated events, except as required by law. Non - GAAP Financial Measures This presentation contains certain financials measures that are not recognized under U.S. generally accepted accounting princ ipl es (GAAP), including: Adjusted Operating Income, Adjusted Operating Margin, Adjusted Sales, EBITDA and EBITDA margin. See the appendix to this pre sen tation for additional information and reconciliations of such non - GAAP financial measures.
AAR CORP. All rights reserved worldwide. 2 Compelling acquisition of Triumph Product Support Strategic h ighlights: x Meaningfully scales AAR’s proprietary repair capabilities, highly complementary with existing portfolio x Significantly accretive to margins with highly attractive overall financial profile x Thailand facility enables significant expansion of operations and capabilities in APAC x Potential benefits of integrating AAR existing parts / trading / integrated solutions volumes with Product Support’s facilities and proprietary capabilities x Expected run - rate cost synergies of $10 million x Strong combined free cash flow Furthering AAR’s Connected Business Model
AAR CORP. All rights reserved worldwide. 3 787 MAX / Leap 737NG C - 17 Thrust reversers Air cycle m achine Heat transfer Inlet gearbox Hydro - mech Flight controls Triumph Product Support overview • Aircraft system components o ACM, Heat Exchangers, IDG, Generators • Engine system components o Pumps, Gearboxes, Valves, Controls, Mounts • Airframe structures o Nacelle, Thrust Reverser, Flight Controls, Doors • Aircraft interior products o PSU, Crew Seats, Blue Water • Specialty items o Wheels & Brakes, Technical Services Capability summary Military Rotorcraft military Commercial Business jet Regional jet 19% < 1% 76% 2% 3% Key Products Sales by End Market* ~10,000 part numbers 90 aircraft type plus variants & engines 36 ATA chapters Platforms / Fleets ~6,000 proprietary DER repair capabilities A320 757 / 767 * Sales for fiscal year ended March 31, 2023
AAR CORP. All rights reserved worldwide. 4 North American Facilities International Facilities Grand Prairie, TX Engine Accessories • Gearboxes, Actuation, Generators, Pumps, Valves, Starters, Fuel Wellington, KS Airframe Accessories • HTP, ACM, Valves, Booms, HTP • Commercial and Military Aircraft • DER Capabilities A B C D A B C D E E San Antonio, TX Ground Support Equipment • Hydraulic, Pneumatic and Electrical Repair Ground Service Equipment • Subset of Wellington facility Hot Springs, AR Airborne Structures • Nacelles, Flight Controls, Select Interior Products • 24/7/365 AOG Support • DER Capabilities Chonburi, Thailand Aviation Services, Structures • Nacelles, Flight Controls, Radomes, W&B • Field Services, Aircraft Recovery • DER Capabilities Expands global footprint and offerings
AAR CORP. All rights reserved worldwide. 5 Complementary capabilities unlocking compelling opportunities Enhanced ATA chapter coverage Expands PMA and DER portfolio and development capability Thailand facility as a hub to penetrate fast growing APAC AAR’s military expertise to accelerate Product Support’s military growth o Largest independent USM supplier globally o Asset sourcing / distribution capabilities o Airframe MRO / Landing Gear Overhaul / Component Repair o Strong government customer relationship o Trax and Airinmar – repair management capabilities o Deep technical capabilities in component repair across ATA chapters o Complete offering of structures and accessories o Parts Manufacturer Approval (PMA) capability o Catalog of ~6,000 proprietary DER repair capabilities o Extensive rotable pool
AAR CORP. All rights reserved worldwide. 6 $115 $121 $130 $139 $149 $159 $159 ~ $61 * LTM Q4 '22 LTM Q1 '23 LTM Q2 '23 LTM Q3 '23 LTM Q4 '23 LTM Q1 '24 LTM Q1'24 Pro Forma for Product Support 6.3% 6.7% 7.1% 7.3% 7.5% 7.6% 9.2% Track record of sequential margin improvement expected to be accelerated with Triumph Product Support Actions yielding consistent operating margin improvement: x Focus on higher value - added offerings and strong growth in Parts Supply x Improving efficiency in hangars and e xiting underperforming contracts and businesses x Continued focus on operational and cost efficiency Note: FY end May 31 for AAR and FY end March 31 for Product Support * Includes estimated run - rate cost synergies of ~$10 million Adjusted operating i ncome ($ in millions) $220 +
AAR CORP. All rights reserved worldwide. 7 Estimated pro forma c ombined c ompany h ighlights : x Provides significant scale, i ncreases value , and results in ~ $ 2.4 billion in revenue and ~$220 million in adjusted operating income x Accelerates AAR’s margin improvement with further cost and commercial upside from synergies x Product Support bolsters AAR’s repair capabilities and will favorably impact business mix to create a more balanced portfolio with Repair & Engineering comprising ~35% of sales x Expands presence in APAC and provides access to relatively untapped high - growth market 70% 9% 1% 20% COMBINED Adjusted sales $2,094 ~$280 $ 2,374 Adjusted operating income 159 ~51 220* Adjusted operating margin 7.6 % ~ 1 8 % 9.2 % * Revenue by segment Revenue by geography 37% 35% 24% 4% 100% Providing enhanced scale and capabilities to drive growth and profitability Note: AAR metrics are based on twelve months ended 8/31/23, Product Support metrics are based on FY’24 (3/31/24) estimates; U.S. dollars in millions * Includes estimate run - rate cost synergies of ~$10 million 76% 13% 9% 2% 42% 26% 27% 5% 77% 13% 10% + Parts Supply Repair & Engineering Integrated Solutions Expeditionary Services North America Europe / Africa APAC Other
AAR CORP. All rights reserved worldwide. 8 Transaction overview Overview • Acquisition of Product Support business from Triumph Group in a privately negotiated transaction • Attractive purchase price of $725 million on cash - free, debt - free basis ‒ Net purchase price of $645 million, when adjusted for $80 million present value of tax benefits • Net purchase price represents 11.7x FY March 24E EBITDA or 9.9x FY’24E EBITDA including estimated run rate cost synergies Financials • Expected FYE March 2024 revenue of $280 million with $55 million of EBITDA, ~20% EBITDA margin • Currently identified estimated run rate cost synergies of ~$10 million • Significantly accretive to operating margin • Adjusted EPS accretion in full - year FY2025 Financing • Acquisition supported by fully committed bridge facility • Intend for permanent financing to include a mix of debt and equity • Target net leverage of ~3.0x at closing, inclusive of a potential equity issuance, subject to market conditions Closing • Transaction is subject to regulatory approval and customary closing conditions • Anticipated closing in the 1 st quarter of CY2024 Note: FY end May 31 for AAR and FY end March 31 for Product Support
AAR CORP. All rights reserved worldwide. 9 Appendix
AAR CORP. All rights reserved worldwide. 10 Non - GAAP financial measures Adjusted sales and adjusted operating margin are “non - GAAP financial measures” as defined in Regulation G of the Securities Exchange Act of 1934 , as amended (the “Exchange Act”) . We believe these non - GAAP financial measures are relevant and useful for investors as they illustrate our core operating performance unaffected by the impact of certain items that management does not believe are indicative of our ongoing and core operating activities . When reviewed in conjunction with our GAAP results and the accompanying reconciliations, we believe these non - GAAP financial measures provide additional information that is useful to gain an understanding of the factors and trends affecting our business and provide a means by which to compare our operating performance and leverage against that of other companies in the industries we compete . These non - GAAP measures should be considered as a supplement to, and not as a substitute for, or superior to, the corresponding measures calculated in accordance with GAAP . Our non - GAAP financial measures reflect adjustments for certain items including, but not limited to, the following : Investigation and remediation compliance costs comprised of legal and professional fees related to addressing potential violations of the U . S . Foreign Corrupt Practices Act, which we self - reported to the U . S . Department of Justice and other agencies . Contract termination/restructuring costs comprised of gains and losses that are recognized at the time of modifying, terminating, or restructuring certain customer and vendor contracts, including adjustments for forward loss provisions on long - term contracts . Customer bankruptcy and credit charges (recoveries) reflecting the impact of bankruptcies and other credit charges primarily resulting from the significant impact of the COVID - 19 pandemic on the commercial aviation industry . Costs related to strategic projects consisting of professional fees for significant projects related to strategic financings and acquisitions, including due diligence costs . Expenses associated with recent acquisition activity including professional fees for legal, due diligence, and other acquisition activities, intangible asset amortization, and compensation expense related to contingent consideration and retention agreements . Legal judgments related to or impacted by the Russian/Ukraine conflict . We are not providing reconciliations of forward - looking adjusted sales, adjusted operating income, adjusted operating margin, EBITDA, EBITDA margin, and net leverage to the most directly comparable forward - looking GAAP measure because the information is not available without unreasonable effort . This is due to the inherent difficulty of forecasting the timing and amount of certain items, including, but not limited to, unusual gains and losses and other structural changes or their probable significance . Each of the adjustments has not occurred, are out of our control and/or cannot be reasonably predicted . For this reason, we are unable to provide reconciliations for these items . Pursuant to the requirements of Regulation G of the Exchange Act, we are providing the following tables that reconcile the above - mentioned non - GAAP financial measures to the most directly comparable GAAP financial measures :
AAR CORP. All rights reserved worldwide. 11 Non - GAAP financial measures Adjusted sales, adjusted operating income and adjusted operating margin ($ in millions) Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 Q4-22 Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 Sales 455.1$ 436.6$ 452.2$ 476.1$ 446.3$ 469.8$ 521.1$ 553.3$ 549.7$ 1,820.0$ 1,811.2$ 1,844.4$ 1,913.3$ 1,990.5$ 2,093.9$ Contract termination/restructuring costs, net 1.0 (2.5) (0.2) (1.2) 0.1 - - - - (2.9) (3.8) (1.3) (1.1) 0.1 - Adjusted sales 456.1$ 434.1$ 452.0$ 474.9$ 446.4$ 469.8$ 521.1$ 553.3$ 549.7$ 1,817.1$ 1,807.4$ 1,843.1$ 1,912.2$ 1,990.6$ 2,093.9$ Operating income (loss) 15.1$ 30.1$ 30.3$ 31.4$ 31.2$ 32.4$ 34.0$ 36.3$ 25.3$ 106.9$ 123.0$ 125.3$ 129.0$ 133.9$ 128.0$ Investigation and remediation compliance costs 0.2 0.8 1.6 1.1 0.8 1.1 1.2 1.6 1.1 3.7 4.3 4.6 4.2 4.7 5.0 Trax acquisition and amortization costs - - - - - - 1.9 5.1 2.8 - - - 1.9 7.0 9.8 Russian bankruptcy court judgment - - - - - - 1.8 - 11.2 - - - 1.8 1.8 13.0 Customer bankruptcy and credit charges - 1.0 - - - (0.3) 1.8 - - 1.0 1.0 (0.3) 1.5 1.5 1.5 Government COVID-related subsidies (0.3) (2.5) (1.0) (1.1) (0.7) - (0.9) - - (4.9) (5.3) (2.8) (2.7) (1.6) (0.9) Contract termination/restructuring costs and loss provisions, net 6.7 (4.4) (1.1) (0.3) (0.3) 2.3 - - - 0.9 (6.1) 0.6 1.7 2.0 2.3 Facility consolidation and repositioning costs 0.1 0.1 - - - - - - - 0.2 0.1 - - - - Asset impairment and exit charges 2.3 0.6 0.5 0.1 - - - - - 3.5 1.2 0.6 0.1 - - Costs related to strategic projects - - - 1.8 (0.2) - - - - 1.8 1.6 1.6 1.6 (0.2) - Severance charges 0.9 0.8 0.2 0.1 0.1 - - - - 2.0 1.2 0.4 0.2 0.1 - Adjusted operating income 25.0$ 26.5$ 30.5$ 33.1$ 30.9$ 35.5$ 39.8$ 43.0$ 40.4$ 115.1$ 121.0$ 130.0$ 139.3$ 149.2$ 158.7$ Adjusted operating margin 5.5% 6.1% 6.7% 7.0% 6.9% 7.6% 7.6% 7.8% 7.3% 6.3% 6.7% 7.1% 7.3% 7.5% 7.6% LTM
v3.23.4
Cover
|
Dec. 21, 2023 |
Document Information [Line Items] |
|
Document Type |
8-K
|
Amendment Flag |
false
|
Document Period End Date |
Dec. 21, 2023
|
Entity File Number |
1-6263
|
Entity Registrant Name |
AAR CORP.
|
Entity Central Index Key |
0000001750
|
Entity Tax Identification Number |
36-2334820
|
Entity Incorporation, State or Country Code |
DE
|
Entity Address, Address Line One |
One AAR Place
|
Entity Address, Address Line Two |
1100 N. Wood Dale Road
|
Entity Address, City or Town |
Wood Dale
|
Entity Address, State or Province |
IL
|
Entity Address, Postal Zip Code |
60191
|
City Area Code |
630
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Local Phone Number |
227-2000
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false
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Soliciting Material |
false
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Pre-commencement Tender Offer |
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Pre-commencement Issuer Tender Offer |
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Entity Emerging Growth Company |
false
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Common Stock [Member] | NYSE CHICAGO, INC. [Member] |
|
Document Information [Line Items] |
|
Title of 12(b) Security |
Common Stock, $1.00 par value
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Trading Symbol |
AIR
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Security Exchange Name |
CHX
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Common Stock [Member] | NEW YORK STOCK EXCHANGE, INC. [Member] |
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Document Information [Line Items] |
|
Title of 12(b) Security |
Common
Stock, $1.00 par value
|
Trading Symbol |
AIR
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Security Exchange Name |
NYSE
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AAR (NYSE:AIR)
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