Aar Corp. · NYSE:AIR
Aar — Investor Presentation (September 2024)
19 slides from Aar's investor presentation, Sep 5, 2024
Slide 1: Investor Presentation
Investor Presentation September 5, 2024 © 2024 AAR CORP. All rights reserved worldwide. 1
Slide 2: Forward-looking statements
Forward-looking statements Note: All results and expectations in the presentation reflect continuing operations unless otherwise noted. This presentation contains certain statements relating to future results, which are forward-looking statements as that term is defined in the Private Securities Lit
Slide 3: Company
Company Global aerospace and defense aftermarket solutions Businesses Founded Market cap Annual sales Parts 1955 ~$2.3B ~$2.5B Supply Key metrics NYSE Employees Q4 FY24 Adjusted Repair & operating margin Engineering AIR ~6,000 9.3% Integrated Solutions Selected Expeditionary customers Services Adjus
Slide 4: Business segment overview
Business segment overview Expeditionary Services 3% Parts Supply Repair & Engineering Integrated • Consists of Distribution and Used Serviceable • Consists primarily of MRO (airframe heavy Solutions Parts Material (USM) maintenance), Component Services (acquired 28% Supply FY24 42% Triumph Product S
Slide 5: Triumph Product Support acquisition
Triumph Product Support acquisition Acquisition summary: Furthering AAR’s Connected Business Aggregate purchase price of $725 million. Net purchase price of $645 million when adjusted for Model $80 million present value of tax benefits Closed March 1, 2024 Anticipated strategic highlights: Sig
Slide 6: Global expertise and reach
Global expertise and reach Customers in over 150 countries Central and North America South America UK Europe Middle East Asia Australasia Headquarters and warehouse Sales office supporting Parts Supply sales office in Component Services in Warehouse and sales office in Regional sales offices in Ware
Slide 7: Highly-diversified customer base with longstanding relationships
Highly-diversified customer base with longstanding relationships 15+ year relationship with each of our top customers Commercial airlines Cargo airlines Government United States Air Force Top customers by sales – FY2024 (USAF) Customer % of sales 2 United States Navy (USN) U.S. Government 1 20% Unit
Slide 8: Historical financial performance
Historical financial performance Sales ($M) Adjusted operating income ($M) and margin $2,319 $2,052 $2,072 $1,991 $193 $1,748 $1,820 $1,652 $149 $115 $115 9.3% $105 8.3% $90 7.5% $69 $61 5.6% 6.3% 5.2% 5.0% 4.2% FY18 FY19 FY20 FY21 FY22 FY23 FY24 Q4-FY24 FY18 FY19 FY20 FY21 FY22 FY23 FY24 Adjusted d
Slide 9: Actions taken have yielded consistent financial improvement
Actions taken have yielded consistent financial improvement Quarterly adjusted operating margin Consolidated footprint to 9.3% optimize cost base and 8.1% 8.3% 7.6% 7.6% 7.8% 7.3% preferred customer support 6.7% 7.0% 6.9% 6.1% 5.6% 5.9% 5.5% 4.9% 5.0% 5.2% 4.0% Exited underperforming product 3.2
Slide 10: Capital allocation framework
Capital allocation framework • Pro forma net leverage of 3.3x* as of the end of Q4 FY24 Maintain flexible • Portion of acquisition consideration funded with prepayable debt balance sheet • Upsized Revolver to provide greater operational flexibility and liquidity Organic • Support new business wins i
Slide 11: 3-5 Year Guidance for 10-15%+ EPS growth
3-5 Year Guidance for 10-15%+ EPS growth Driven by robust structural tailwinds: 3-5 Year Organic Growth Targets • Growth in air travel • Multiple levers to enhance market share: unique exclusive distribution Sales growth 5 – 10% model resonating with OEM partners, airframe hangar expansions, increas
Slide 12: Appendix
Appendix © 2024 AAR CORP. All rights reserved worldwide. 12
Slide 13: Non-GAAP financial measures
Non-GAAP financial measures Adjusted sales, adjusted operating income, adjusted operating margin, adjusted diluted earnings per share from continuing operations, adjusted EBITDA, adjusted EBITDA margin, adjusted pro forma EBITDA, net debt, net debt to adjusted EBITDA, and pro forma net debt to adjus
Slide 14: Non-GAAP financial measures: adjusted sales and operating income
Non-GAAP financial measures Adjusted sales, adjusted operating income and adjusted operating margin ($ in millions) FY18 FY19 FY20 FY21 FY22 FY23 FY24 Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 Sales $1,748.3 $2,051
Slide 15: Non-GAAP financial measures: adjusted diluted EPS
Non-GAAP financial measures Adjusted diluted earnings per share from continuing operations FY18 FY19 FY20 FY21 FY22 FY23 FY24 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 Diluted earnings (loss) per share from continuing operations $2.11 $2.40 $0.71
Slide 16: Non-GAAP financial measures: adjusted EBITDA
Non-GAAP financial measures Adjusted EBITDA ($ in millions) FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 Net income (loss) $56.5 $15.6 $7.5 $4.4 $35.8 $78.7 $90.2 $46.3 $11.5 $20.8 $22.5 $23.9 $22.7 $22.5 $21.
Slide 17: Non-GAAP financial measures: net debt / adjusted EBITDA
Non-GAAP financial measures Net debt / adjusted EBITDA ($ in millions) FY18 FY19 FY20 FY21 FY22 FY23 FY24 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 Total debt $178.9 $142.9 $602.0 $135.2 $100.0 $272.0 $997.0 $129.0 $104.5 $104.5 $100.0 $115.0 $19
Slide 18: Non-GAAP financial measures: FY23 by segment
Non-GAAP financial measures FY23 by segment ($ in millions) Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 FY23 Parts Integ Exped Parts Integ Exped Parts Integ Exped Parts Integ Exped Parts Integ Exped Supply R&E Solutions Svcs Corp Consol Supply R&E Solutions Svcs Corp Consol Supply R&E Solutions Svcs Corp Consol
Slide 19: Non-GAAP financial measures: FY24 by segment
Non-GAAP financial measures FY24 by segment ($ in millions) Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 FY24 Parts Integ Exped Parts Integ Exped Parts Integ Exped Parts Integ Exped Parts Integ Exped Supply R&E Solutions Svcs Corp Consol Supply R&E Solutions Svcs Corp Consol Supply R&E Solutions Svcs Corp Consol