AAR has reported third-quarter Fiscal Year 2020 consolidated sales of $553.1 million and income from continuing operations of $2.6 million, or $0.07 per diluted share, the company announced on Wednesday.
"While we saw record results during our third quarter, our attention is focused on the unprecedented impact to our airline customers from COVID-19. Our strategy to maintain a balanced portfolio across the government, commercial and cargo markets, along with our strong balance sheet…sets us up well to navigate the COVID-19 impact," said John Holmes, president and CEO of AAR.
AAR’s third-quarter results included a predominantly non-cash pretax charge of $24.7 million primarily resulting from restructuring and exiting underperforming contracts in commercial programs. For the third quarter of the prior year, the Company reported sales of $529.5 million and income from continuing operations of $27.4 million.
The company’s consolidated sales increased 4 percent over the prior-year period due to continued growth across our Aviation Services segment, which experienced sales growth of 7 percent. Aviation Services sales grew 9 percent during the quarter primarily from execution on AAR’s government contracts.
Sales to government and defense customers represented 35% of our consolidated sales in the current quarter compared to 33% in the prior-year quarter reflecting growth from new government programs.
The company also announced multiple new contract wins, including the multiyear distribution agreement with AeroControlex, a large manufacturer of critical components to the aviation industry. AAR also expanded its airframe maintenance services with Air Canada including plans to add A330 maintenance capability to our operations in Quebec and won the Sole-source Indefinite Delivery/Indefinite Quantity contract award with an estimated value of $90 million from the Defense Logistics Agency Troop Support.
Holmes concluded, "We have worked very hard to build an exceptional team at AAR and I am very proud of our accomplishments. As we enter this uncertain time, we are making very difficult decisions that involve sacrifices by our employees and I want to thank our people for their commitment and flexibility. I also have been in dialogue with members of the House, Senate and the Administration regarding potential aid to the broader aviation industry and we are particularly supportive of any measures aimed at preserving jobs."
AAR is a global aerospace and defense aftermarket solutions company that employs more than 6,000 people in over 20 countries. Headquartered in the Chicago area, AAR supports commercial and government customers through two operating segments: Aviation Services and Expeditionary Services. AAR's Aviation Services include parts supply; OEM solutions; integrated solutions; maintenance, repair, overhaul; and engineering. AAR's Expeditionary Services include mobility systems and composite manufacturing operations.