, /PRNewswire/ -- AAR CORP. (NYSE: ), a leading provider of aviation services to commercial and government operators, MROs, and OEMs, today reported fourth quarter fiscal year 2024 consolidated sales of and income from continuing operations of , or per diluted share. For the fourth quarter of the prior year, the Company reported sales of and income from continuing operations of , or per diluted share.
Our adjusted diluted earnings per share from continuing operations in the fourth quarter of fiscal year 2024 were , compared to in the fourth quarter of the prior year. Consolidated fourth quarter sales increased 19% over the prior year quarter. Our consolidated sales to commercial customers increased 20% over the prior year quarter, primarily due to the acquisition of the Product Support business and strong demand for our new parts distribution activities.
Our sales to government customers increased 15% primarily due to increased order volume for our new parts distribution activities and improved performance across our government program activities. Sales to commercial customers were 70% of consolidated sales, compared to 69% in the prior year quarter. "We delivered another record quarter driven by both record performance in our new parts distribution activities and the Triumph Product Support acquisition, which exceeded our expectations during the period.
We also continued to drive growth in our heavy maintenance hangars out of our existing footprint. In addition to this record performance in our commercial business, we saw double-digit growth in our government business," said , Chairman, President and Chief Executive Officer of AAR CORP. Gross profit margin decreased from 19.
5% in the prior year quarter to 19.4% in the current quarter, primarily due to a commercial programs PBH agreement that was terminated during the quarter. This was partially offset by the favorable margin contribution from the recently acquired Product Support business.
Selling, general, and administrative expenses were in the current quarter, which included .5 million related to acquisition and amortization expenses and related to investigation costs. Operating margins were 5.
0% in the current quarter, compared to 6.6% in the prior year quarter. Adjusted operating margin increased from 7.
8% in the prior year quarter to 9.3% in the current year quarter. Sequentially, our adjusted operating margin increased from 8.
3% to 9.3%. The improved adjusted margins are primarily driven by the favorable contribution from the recently acquired Product Support business.
During and subsequent to the quarter, we announced multiple new contract awards, including: Net interest expense for the quarter was , compared to last year. Average diluted share count increased from 34.8 million shares in the prior year quarter to 35.
4 million shares in the current year quarter. We did not repurchase any shares during the quarter as a result of deploying capital towards the acquisition of the Product Support business and other attractive investment opportunities. We have remaining on our share repurchase program.
From a capital deployment perspective, we are prioritizing debt repayment but will evaluate share repurchases along with other attractive investment opportunities to deploy our capital. Cash flow provided by operating activities from continuing operations was during the current quarter. As of , our net debt was and our net leverage, pro forma for the last twelve months adjusted EBITDA of the Product Support business, was 3.
30x. Holmes continued, "This was our 13 consecutive quarter of adjusted operating margin improvement, which was supported by both organic growth and our acquisition of the Product Support business. Margin expansion remains a top priority for our team and we expect continued incremental margin improvement.
Additionally, we reduced our net leverage by approximately 0.3x in just one quarter since the closing of the Product Support acquisition." Full fiscal year 2024 consolidated sales were , an increase of 17% from fiscal year 2023 with growth resulting from our Parts Supply offerings and increased volumes in our commercial programs activities.
Operating margins were 5.6% for the full year, compared to 6.7% in fiscal year 2023.
Adjusted operating margin increased from 7.5% in fiscal year 2023 to 8.3% in fiscal year 2024, which reflects only one quarter of ownership of the higher margin Product Support business.
Full fiscal year 2024 income from continuing operations was , or per diluted share. In fiscal year 2023, income from continuing operations was , or per share. Our adjusted diluted earnings per share from continuing operations was in the current year, compared to last year, reflecting the impact of our improved operating efficiency on higher sales volumes.
Sales to commercial customers were 71% of consolidated sales, compared to 67% in the prior year. Cash flow provided by operating activities from continuing operations was in fiscal year 2024. Excluding our accounts receivable financing program, our cash flow provided by operating activities from continuing operations was in fiscal year 2024.
Holmes concluded, "We made tremendous progress in fiscal 2024 executing on the strategic vision and targets that we outlined at our Investor Day last year. We continued to extend our leadership position in Parts Supply, broke ground on airframe maintenance expansions that will add 15% more capacity to our hangar network, integrated Trax, acquired Product Support, and increased our margins. We believe demand will remain robust as the life and high utilization of current generation aircraft continue to extend, which we expect will lead to another year of sales and earnings growth as we leverage our stronger market position.
" On , at , AAR will hold a conference call to discuss the results. A listen-only webcast and slides can be accessed at . Participants may join via phone by registering at .
Once registered, participants will receive a dial-in number and a unique PIN that will allow them to access the call. The slides are also available on AAR's website at . A replay of the conference call will be available for on-demand listening shortly after the completion of the call at the webcast link and will remain available for approximately one year.
AAR is a global aerospace and defense aftermarket solutions company with operations in over 20 countries. Headquartered in the area, AAR supports commercial and government customers through four operating segments: Parts Supply, Repair & Engineering, Integrated Solutions, and Expeditionary Services. Additional information can be found at .
Dylan Wolin – Vice President, Strategic & Corporate Development and Treasurer | +1-630-227-2017 | Adjusted income from continuing operations, adjusted diluted earnings per share from continuing operations, adjusted operating margin, adjusted cash provided by (used in) operating activities, adjusted EBITDA, net debt, net debt to adjusted EBITDA (net leverage), and net debt to pro forma adjusted EBITDA (net pro forma leverage) are "non-GAAP financial measures" as defined in Regulation G of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). We believe these non-GAAP financial measures are relevant and useful for investors as they illustrate our core operating performance, cash flows and leverage unaffected by the impact of certain items that management does not believe are indicative of our ongoing and core operating activities. When reviewed in conjunction with our GAAP results and the accompanying reconciliations, we believe these non-GAAP financial measures provide additional information that is useful to gain an understanding of the factors and trends affecting our business and provide a means by which to compare our operating performance and leverage against that of other companies in the industries we compete.
These non-GAAP measures should be considered as a supplement to, and not as a substitute for, or superior to, the corresponding measures calculated in accordance with GAAP. Our non-GAAP financial measures reflect adjustments for certain items including, but not limited to, the following: Adjusted EBITDA is income from continuing operations before interest income (expense), other income (expense), income taxes, depreciation and amortization, stock-based compensation, and items of an unusual nature including but not limited to business divestitures and acquisitions, workforce actions, COVID-related subsidies and costs, investigation and remediation compliance costs, equity investment gains and losses, pension settlement charges, legal judgments, acquisition, integration and amortization expenses from recent acquisition activity, and significant customer events such as early terminations, contract restructurings, forward loss provisions, and bankruptcies. Pursuant to the requirements of Regulation G of the Exchange Act, we are providing the following tables that reconcile the above-mentioned non-GAAP financial measures to the most directly comparable GAAP financial measures: SOURCE AAR CORP.
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