AAR sales reach $475 million for 2Q

WOOD DALE — AAR said strong business in its commercial sectors led to second quarter 2012 consolidated sales of $475.9 million and income from continuing operations of $17.5 million,

Sales to commercial customers increased 11 percent over the same period last year and were principally driven by strength in its supply chain business, the company said in a release. Sales to government and defense customers increased 5 percent compared to last year due to sales growth at AAR Airlift and at the Company’s Defense Logistics business.

During the second quarter, AAR acquired Airinmar Holdings Limited, a provider of repair management services. Airinmar operates as part of the aviation supply chain segment and the impact of this acquisition on second quarter sales and earnings from continuing operations was negligible, the company said. During the quarter, AAR also signed a definitive purchase agreement to acquire Telair International GmbH and Nordisk Aviation Products, AS from Teleflex Incorporated.

“The company enjoys an industry leading position in the airline parts supply and MRO markets and during the second quarter we benefited from investments made in assets and operating efficiencies,” said David P. Storch, AAR chairman and chief executive officer.

Selling, general and administrative expenses as a percentage of sales were 9.1 percent and consolidated gross profit margin was 16.2 percent during the second quarter. The company saw an increase in its businesses supporting commercial customers primarily due to increased sales and better product availability in the aviation supply chain segment and operational efficiencies at the company’s airframe maintenance centers.

Gross profit margins were lower its government and defense services segment due to lower than expected aircraft availability at AAR Airlift and in the structures and systems segment due to losses on certain programs at the its precision machining business. AAR generated $30.4 million in cash flow from operations and had capital expenditures, exclusive of the Airinmar acquisition, of $13.4 million during the second quarter.