AAR CORP. has announced its financial results for the first quarter of fiscal year 2025, reporting consolidated sales of US$661.7 million, a 20% increase from the prior year's sales of US$549.7 million. The company posted a net income of US$18.0 million, or US$0.50 per diluted share, in contrast to a net loss of US$0.6 million, or US$0.02 per diluted share, for the same period last year. Adjusted diluted earnings per share rose to US$0.85, up from US$0.78 in the prior year.
The 20% rise in consolidated sales was attributed to both organic growth and the recent acquisition of the Product Support business. Sales to commercial and government customers each grew by 20%, with commercial customers accounting for 71% of total sales in both the current and prior-year quarters.
AAR reported that operating margins improved significantly, rising from 4.6% last year to 6.6% this quarter. Adjusted operating margins also increased, reaching 9.1%, up from 7.3% in the prior year. These improvements were largely driven by contributions from the Product Support business and stronger operational performance. However, net interest expenses climbed to US$18.3 million, compared to US$5.4 million last year, due to higher debt levels following the Product Support acquisition.
Cash flow used in operating activities remained steady at US$18.6 million, similar to the US$18.7 million in the previous year. AAR CORP.'s net debt stood at US$942.7 million as of August 31, 2024. The company is prioritising debt repayment but will also consider share repurchases and other investment opportunities, with US$52.5 million remaining in its US$150 million share repurchase programme.
