AAR Corp Achieves Record-Breaking First Quarter, Secures Strategic Acquisition in MRO Holdings
AAR Corp, a leading provider of aftermarket solutions and services, has reported a stellar first quarter of fiscal year 2027. The company's strong performance was marked by above-market growth, margin expansion, and record-breaking cash flow.
According to the Q1 2027 earnings report, AAR Corp achieved total sales of $918 million, representing a 24% year-over-year increase. This growth was broad-based, with each of the company's three key segments contributing to the rise. Commercial customers accounted for 73% of total sales in the quarter, while government customers made up the remaining 27%. The adjusted EBITDA margin expanded by 100 basis points to 12.7%, with a notable improvement of 13.3% excluding Legacy Commercial Programs.
AAR Corp's Chairman, President, and Chief Executive Officer, John Holmes, expressed his excitement about the company's performance and the strategic acquisition of MRO Holdings, a leading airframe heavy maintenance provider. "This is a combination we have been talking about with MRO Holdings in various ways for about eight years," he stated. The transaction marks a major milestone in AAR Corp's evolution and will enable the company to achieve scale that accelerates growth across all activities.
The acquisition of a 65% controlling interest in MRO Holdings is expected to significantly strengthen AAR Corp's financial position through higher margins and stronger, more consistent cash flow. This strategic combination will also allow the company to build out its parts repair and software aftermarket platform.
AAR Corp's strong operating performance was reflected in its adjusted diluted EPS, which increased 38% year-over-year to $1.49 per share. The company also delivered record first-quarter cash flow, with adjusted cash from operations of $57 million or 48% of adjusted EBITDA. This impressive cash generation helped reduce the company's net leverage to 1.
With this remarkable start to the year and a strategic acquisition under its belt, AAR Corp is poised for continued growth and success in the aftermarket solutions and services industry. The company's commitment to executing its strategy and delivering strong results will undoubtedly drive future performance and further solidify its position as a leading provider of aftermarket solutions.
