AAR sees 27 percent sales jump
Wood Dale-based AAR Wednesday reported fiscal 2008 first quarter net sales of $306 million and income from continuing operations of $15.3 million, or $0.36 per diluted share.
Sales grew 27 percent from $240.2 million last year, and income from continuing operations increased 25 percent from $12.2 million in the prior year.
Sales to commercial customers increased 26 percent, and sales to defense customers grew 30 percent.
AAR is a provider of products and services to the aerospace and defense industry.
The increase in sales to commercial customers was driven by strength in supply chain programs and aftermarket parts sales, increased heavy maintenance activity, including the acquisition of Reebaire, and continued momentum in the aircraft sales and leasing business, AAR stated.
During the quarter, the company launched an additional line of heavy maintenance for Southwest Airlines at its Indianapolis Maintenance Center. In addition, the company nearly doubled the size of its aircraft fleet through the acquisition of eighteen 737-400 aircraft and one 747-400 aircraft with joint venture partners.
The growth in sales to defense customers was attributable to robust demand for mobility systems products, the acquisition of Brown International in April and strength in performance-based logistics programs.
AAR was awarded a $162 million contract for specialized shipping/storage containers, shelters and accessories to support several branches of the U.S. military and federal civilian agencies. In addition, it received a $31 million order to provide specialized shelters to the Army and was selected by the Army to provide 25 cargo handling systems for Chinook helicopters. Shipments on these new contracts will commence during the second quarter.
Gross profit margin was 18.5 percent for the first quarter compared to 17.9 percent last year, excluding impairment charges recorded during the first quarter of fiscal 2007.
"We are pleased with the strong sales growth we generated in the first quarter, and fiscal 2008 is off to a solid start," said David P. Storch, chairman and chief executive officer, in a statement. "We believe that our top line momentum combined with the margin improvement initiatives underway will contribute to margin expansion going forward."