AAR Corp. reported financial results for the first quarter ended August 31, 2026, and announced a definitive agreement to acquire a controlling interest in MRO Holdings. The company reported consolidated sales of $918.0 million for the quarter, representing a 24% increase compared to the same period in the prior year.
Key financial metrics for the first quarter of fiscal year 2027 included:
- GAAP Diluted EPS: $1.00
- Adjusted Diluted EPS: $1.49, up 38% from the prior year
- GAAP Net Income: $40.1 million
- Adjusted EBITDA: $117 million, up 34% year-over-year
- Adjusted EBITDA Margin: 12.7%, an increase of 100 basis points from the prior year
Operating margins were 7.9% in the quarter, compared to 8.8% in the prior year quarter. Adjusted operating margin increased to 10.6% from 9.7% in the prior year. Cash flow provided by operating activities was $55.8 million, and net debt stood at $780.5 million, resulting in a net leverage ratio of 1.81x.
Segment performance included a 31% sales increase in the Parts Supply segment, driven by 23% organic growth in new parts distribution. The Repair, Engineering & Software (RE&S) segment also reported 31% sales growth, while Government Solutions increased by 4%. Sales to commercial customers increased 28% to $671.5 million, while sales to government customers increased 14% to $246.5 million.
AAR announced it has entered into a definitive agreement to acquire a 65% controlling interest in MRO Holdings. The company stated that the transaction structure provides financial flexibility to continue pursuing its broader strategy. Due to this announcement, AAR’s previously scheduled earnings conference call has been rescheduled to 7:00 AM CT on Tuesday, September 29, 2026.
The company provided guidance for the second quarter and full year of fiscal 2027, excluding the impact of the MRO Holdings acquisition. For the second quarter, AAR expects sales growth of 14% to 16% and an adjusted EBITDA margin of 13.0% to 13.4%. For the full year, the company expects low double-digit to low teens sales growth.
