UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended August 31, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 1-6263

AAR CORP.

(Exact name of registrant as specified in its charter)


Delaware		36-2334820
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

One AAR Place, 1100 N. Wood Dale Road Wood Dale, Illinois		60191
(Address of principal executive offices)		(Zip Code)

(630) 227-2000

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol(s)

Name of Each Exchange on Which Registered

Common Stock, $1.00 par value

AIR

New York Stock Exchange

Chicago Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒

Accelerated filer ☐

Non-accelerated filer ☐

Smaller reporting company ☐

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August 31, 2022 there were 35,083,089 shares of the registrant’s Common Stock, $1.00 par value per share, outstanding.

Table of Contents

AAR CORP. and Subsidiaries
Quarterly Report on Form 10-Q

For the Quarter Ended August 31, 2022

Table of Contents


		Page
Part I — FINANCIAL INFORMATION
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Income	5
	Condensed Consolidated Statements of Comprehensive Income	6
	Condensed Consolidated Statements of Cash Flows	7
	Condensed Consolidated Statements of Changes in Equity	8
	Notes to Condensed Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	25
Item 4.	Controls and Procedures	26

Part II — OTHER INFORMATION
Item 1.	Legal Proceedings	27
Item 1A.	Risk Factors	27
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	27
Item 6.	Exhibits	28

Exhibit Index		28
Signatures		29

Table of Contents

PART I – FINANCIAL INFORMATION

Item 1 – Financial Statements

AAR CORP. and Subsidiaries

Condensed Consolidated Balance Sheets

As of August 31, 2022 and May 31, 2022

(In millions, except share data)


ASSETS

	August 31,		May 31,
	2022		2022
	(Unaudited)
Current assets:
Cash and cash equivalents	$	44.3	$	53.5
Restricted cash		4.1		5.4
Accounts receivable, less allowances of $17.5 and $17.9, respectively		220.8		214.0
Contract assets		87.5		73.6
Inventories		575.8		550.5
Rotable assets and equipment on or available for short-term lease		52.8		53.6
Assets of discontinued operations		16.1		16.2
Prepaid expenses and other current assets		33.8		40.4
Total current assets		1,035.2		1,007.2

Property, plant, and equipment, net of accumulated depreciation of $259.7 and $258.3 respectively		111.4		109.6

Other assets:
Goodwill and intangible assets, net		117.6		119.7
Operating lease right-of-use assets, net		69.9		73.0
Rotable assets supporting long-term programs		167.7		166.6
Other non-current assets		97.1		97.8
		452.3		457.1
	$	1,598.9	$	1,573.9

The accompanying Notes to Condensed Consolidated Financial

Statements are an integral part of these statements.

Table of Contents

AAR CORP. and Subsidiaries

Condensed Consolidated Balance Sheets

As of August 31, 2022 and May 31, 2022

(In millions, except share data)


LIABILITIES AND EQUITY

	August 31,		May 31,
	2022		2022
	(Unaudited)
Current liabilities:
Accounts payable	$	194.5	$	156.4
Accrued liabilities		147.2		174.6
Liabilities of discontinued operations		16.2		17.2
Total current liabilities		357.9		348.2

Long-term debt		114.1		98.9
Operating lease liabilities		54.3		57.4
Deferred tax liabilities		20.1		20.0
Other liabilities		16.0		14.9
		204.5		191.2

Equity:
Preferred stock, $1.00 par value, authorized 250,000 shares; none issued		—		—
Common stock, $1.00 par value, authorized 100,000,000 shares; issued 45,300,786 shares at cost		45.3		45.3
Capital surplus		476.8		477.5
Retained earnings		843.1		820.4
Treasury stock, 10,217,697 and 9,909,702 shares at cost, respectively		(306.0)		(289.1)
Accumulated other comprehensive loss		(22.7)		(19.6)
Total equity		1,036.5		1,034.5
	$	1,598.9	$	1,573.9

The accompanying Notes to Condensed Consolidated Financial

Statements are an integral part of these statements.

Table of Contents

AAR CORP. and Subsidiaries

Condensed Consolidated Statements of Income

For the Three Months Ended August 31, 2022 and 2021

(Unaudited)

(In millions, except share data)


	Three Months Ended
	August 31,
	2022		2021
Sales:
Sales from products	$	265.2	$	262.1
Sales from services		181.1		193.0
		446.3		455.1
Cost and operating expenses:
Cost of products		214.0		217.6
Cost of services		150.4

SEC Form 10-Q filed by AAR Corp.