Aar Corp. · NYSE:AIR
Aar — Investor Presentation (February 2016)
19 slides from Aar's investor presentation, Feb 4, 2016
Slide 1: Forward-Looking Statements
Forward-Looking Statements 2 This presentation includes 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
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation includes 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
Slide 3: Established Player Serving the Global Aviation Services Market
Established Player Serving the Global Aviation Services Market 4 Leading provider of: Aviation Services Expeditionary Services to commercial and defense / govt. markets NYSE: AIR $1.7B revenue Over 60 years as a market leader in aviation support Over 4,500 employees in over 20 countries Customer-cen
Slide 4: Path to "New" AAR: Recent Corporate Developments
5 Path to “New” AAR Recent Corporate Developments Sold Telair Cargo Group – Telair Europe, Nordisk and U.S. Cargo loading manufacturing units Transaction value = $733 million Net Proceeds greater than $600 million (after cash taxes and expenses) Pre-tax gain of approximately $225 million Discontinue
Slide 5: Path to "New" AAR: Rationale for Transactions
6 Path to “New” AAR Rationale for Transactions Repositions AAR as an industry-leading aviation services company: Streamlined operations Renewed focus on higher-margin activities Delivering best-in-class services to customers Value for AAR’s shareholders: Unlocked significant capital to pay down high
Slide 6: Company Overview
Company Overview 7 Aftermarket Parts Supply Aviation Services ~$1.4B Airlift Mobility Expeditionary Services ~$0.3B Supply chain programs Distribution Trading Repair management Fixed- and rotary-wing expeditionary airlift services -Passenger -Cargo -Combi Mission support, logistics resupply and trai
Slide 7: Aviation Services: Aftermarket Parts Supply
Aviation Services Aftermarket Parts Supply 8 Power by the hour / Rotable 1,000+ aircraft supported from 50 locations Over 250,000 ROs / year Expendable 200,000+ annual shipments 155,000 part numbers supported Over 900 customers worldwide Sales of OEM new parts to: Commercial aviation Defense aviatio
Slide 8: Aviation Services: MRO
Aviation Services MRO 9 Oklahoma City Regional & Narrow body 300,000 sf in six hangars Full airframe paint capabilities Miami Narrow & Wide body 226,000 sf in three hangars Full airframe paint capabilities Indianapolis Narrow & Wide body 1.1 Million sf in 10 hangars Full airframe paint capabilities
Slide 9: Serving Niche and Growing Aviation Markets
Serving Niche and Growing Aviation Markets 11 Global MRO Market ~$61 ~$90 $B Parts Distribution & Surplus Parts Market ~$12 ~$17 $B ~68% ~67% * B & GA = Business and General Aviation Source: ICF International ~20% ~21% Denotes AAR market presence ~23% ~22% Continued MRO outsourcing OEM push into cer
Slide 10: Strong Customer Relationships
Strong Customer Relationships 12 NATO U.S. DoD U.K. MoD Colombian Air Force U.S. Marshals Service Airlines OEMs Cargo & Leasing Government
Slide 11: Strong Customer Relationships
Strong Customer Relationships Airlines 4 Aeromexico. AIR CANADA @ AIR FRANCE a) ae Muster Ulm BRITISH AIRWAYS —> CATHAY PaciFIC CHINA AIRLINES ADelta MSY EXPRESSET @kenya airways epaetp ate © Lufthansa SINGAPORE AIRLINES §), i “ras” UNITED {QAAR" | Celebrating 6 years OEMs @ AIRBUS E:1-N Gulfstreant
Slide 12: Navigated Through Five Major Industry Cycles
Navigated Through Five Major Industry Cycles 14 Arab Oil Embargo Fuel Crisis Conflicts in Iran Economic Downturn Gulf War September 11 Attacks “Great Recession” 11% CAGR Sales ($B) After Each Down Cycle, AAR Has Emerged as a Stronger Company Sale of Telair Cargo Group - 0.5 1.0 1.5 2.0 2.5 1970 1971
Slide 13: 2Q FY2016 Highlights
2Q FY2016 Highlights Sales of $423.8 million, up 5.1% from prior year $33.7 million growth (10.3%) in Aviation Services $13.2 million decline (17.1%) in Expeditionary Services Diluted EPS of $0.30 per share from continuing operations Gross profit % decline from 16.7% to 14.1% year-over-year due prim
Slide 14: 2Q FY2016 Income Statement Highlights
2Q FY2016 Income Statement Highlights Significant Top-Line Growth Prior Year Prior Quarter in millions except EPS 2Q 16 2Q 15 1Q 16 PY PQ Sales $423.8 $403.3 $377.8 $20.5 $46.0 Gross Profit $59.9 $67.2 $54.5 ($7.3) $5.4 % Margin 14.1% 16.7% 14.4% (2.5%) (0.3%) SG&A $42.5 $40.1 $39.4 ($2.4) ($3.1) %
Slide 15: 2Q FY2016 Leverage & Liquidity Levels
2Q FY2016 Leverage & Liquidity Levels $ in million ($ in million) Q4’13 Q1’14 Q2’14 Q3’14 Q4’14 Q1’15 Q2’15 Q3’15 Q4’15 Q1’16 Q2’16 Total Debt 708.6 702.2 680.8 714.4 634.0 627.1 635.3 643.3 154.0 179.5 170.3 Cash 75.3 90.9 98.5 114.7 89.2 81.8 92.6 67.0 54.7 28.7 62.8 Available Cash 417.5 435.9 463
Slide 16: 2Q FY2016 Debt Composition Maturity Tower
2Q FY2016 Debt Composition Maturity Tower $ in million ($ in million) 2016 2017 2018 2019 2020 2021 2022 Revolver 105 as of 11/30/15 DBJ 10.0 Convert 2.25% 25.3 * IRB 25.0 * $25.3 million remaining balance of converts will be retired on March 1, 2016, with available cash and liquidity Modest Debt Re
Slide 17: Key Investment Highlights
Key Investment Highlights 19 Commitment to Strong Shareholder Returns Sharper focus on services businesses following recent transformation Long-term aftermarket growth Strong and deep relationships with key industry players Time-proven, value-added service provider Strong balance sheet with substant
Slide 18: Our Mission
OUR Mission To be the best at designing and delivering technical, operational and financial solutions to enhance the efficiency and competitiveness of our commercial aviation and government customers. DOING IT RIGHT
Slide 19: AAR’ | Celebrating (“Bhs years
AAR’ | Celebrating (“Bhs years