* Second quarter sales of
* Second quarter GAAP diluted earnings per share from continuing operations of
* Adjusted diluted earnings per share from continuing operations of
* Second quarter cash flow from operating activities from continuing operations of
* Announced
For the second quarter of the prior year, the Company reported sales of
Consolidated second quarter sales increased 8% over the prior year quarter. Our consolidated sales to commercial customers increased 33% over the prior year quarter due to the recovery in the commercial market from the impact of COVID-19. Our consolidated sales to government customers decreased 15% primarily related to the level of program activity for the modification and sale of two C-40 aircraft to the
Sales to commercial customers were 59% of consolidated sales compared to 48% in the prior year's quarter primarily reflecting the recovery in the commercial market from the impact of COVID-19.
Gross profit margins increased from 17.2% in the prior year quarter to 18.0% in the current quarter and adjusted gross profit margin increased from 13.9% to 16.7%, primarily due to the favorable impact from our actions to reduce costs and increase our operating efficiency.
Selling, general and administrative expenses increased from
Operating margin increased from 5.4% in the prior year quarter to 6.9% in the current quarter and adjusted operating margin increased from 4.0% to 6.1%, as a result of our actions to reduce costs and increase our operating efficiency. Sequentially, our adjusted operating margin increased from 5.5% in the first quarter to 6.1% in the current quarter primarily due to strong performance on long-term programs.
'While the global recovery in commercial air travel continues to be uneven due to COVID-19 variants and associated travel restrictions, we continue to drive strong performance. We delivered our fifth straight quarter of adjusted operating margin improvement and are now exceeding pre-pandemic levels. We expect this improvement to continue as our higher margin parts activities fully recover,' said
During the quarter, we announced a five-year renewal of our power-by-the-hour component pool and repair support program for flydubai's fleet of 33
Subsequent to the end of the quarter, we were awarded a firm fixed price, indefinite delivery/indefinite quantity contract from the
Holmes continued, 'These new business wins demonstrate the strength of our aviation services offering. The USAFE award is particularly exciting as we have been supporting F-16 aircraft for decades and this win takes our involvement with this widely used platform to a new level given the long-term and comprehensive nature of this program. Additionally, in partnership with Fortress, we are leading the aftermarket industry in Environmental, Social and Governance (ESG) initiatives while delivering value to our customers.'
Net interest expense for the quarter was
Cash flow provided by operating activities from continuing operations was
Holmes concluded, 'Throughout the pandemic, we have demonstrated our ability to drive consistent cash flows. This has resulted in an exceptionally strong balance sheet, which allows us to continue to invest in our business while returning capital to shareholders. In addition to deploying capital to fund our continued growth, we will also return capital to shareholders through our
Conference Call Information
AAR will hold its quarterly conference call at
About AAR
AAR is a global aerospace and defense aftermarket solutions company with operations in over 20 countries. Headquartered in the
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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, which reflect management's expectations about future conditions, including but not limited to (i) the ability to continue to drive strong performance, (ii) our expectations regarding the continued improvement in our adjusted operating margin and our higher margin parts activities to fully recover, (iii) the continued strength of our aviation services offering, (iv) the ability to lead the aftermarket industry in Environmental, Social and Governance (ESG) initiatives while delivering value to our customers, (v) our ability to continue to drive strong cash flows, (vi) maintaining an exceptionally strong balance sheet to allow us to continue to invest in our business while returning capital to shareholders, and (vii) our expectation that we will continue to deploy capital into each of our parts, repair and government activities.
Forward-looking statements often address our expected future operating and financial performance and financial condition, or sustainability targets, goals, commitments, and other business plans, and often 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 the beliefs of Company management, as well as assumptions and estimates based on information available to the Company as of the dates such assumptions and estimates are made, and are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or those anticipated, depending on a variety of factors, including: (i) factors that adversely affect the commercial aviation industry; (ii) the continued impact of the COVID-19 pandemic on air travel, worldwide commercial activity and our and our customers' ability to source parts and components; (iii) a reduction in the level of sales to the branches, agencies and departments of the
For a discussion of these and other risks and uncertainties, refer to our Annual Report on Form 10-K, Part I, 'Item 1A, Risk Factors' and our Quarterly Reports on Form 10-Q. These events and uncertainties are difficult or impossible to predict accurately and many are beyond the Company's control. The risks described in these reports are not the only risks we face, as additional risks and uncertainties are not currently known or foreseeable or impossible to predict accurately or risks that are beyond the Company's control or deemed immaterial may materially adversely affect our business, financial condition or results of operations in future periods. We assume 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.
Condensed Consolidated Statements of Operations
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