8-K
AAR CORP (AIR)
| Common Stock, $1.00 par value | AIR |
|---|
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): January 6, 2026
AAR
CORP.
(Exact name of registrant as specified in its charter)
| Delaware | 1-6263 | 36-2334820 |
|---|---|---|
| (State of Incorporation ) | (Commission<br> File Number) | (IRS Employer Identification No.) |
| One AAR Place 1100 N. Wood Dale Road Wood Dale, Illinois 60191 | ||
| --- | ||
| (Address and Zip Code of Principal Executive Offices) | ||
| Registrant’s telephone number, including<br>area code: (630) 227-2000 | ||
| --- |
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities<br>Act (17 CFR 230.425) |
|---|---|
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange<br>Act (17 CFR 240.14a-12) |
| --- | --- |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under<br>the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under<br>the Exchange Act (17 CFR 240.13e-4(c)) |
| --- | --- |
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<br> Stock, $1.00 par value | AIR | New<br> York Stock Exchange |
| NYSE Texas |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b—2 of this chapter).
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. ¨
| Item 2.02 | Results of Operations and Financial Condition. |
|---|
On January 6, 2026, AAR CORP. (the “Company”) issued a press release and supplemental slide presentation reporting the Company’s financial results for the second quarter ended November 30, 2025. Copies of the Company’s press release and supplemental slide presentation are attached hereto as Exhibit 99.1 and Exhibit 99.2, respectively.
The information furnished under Item 2.02 of this Current Report on Form 8-K and the exhibit attached hereto shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. It may only be incorporated by reference in another filing under the Exchange Act or Securities Act of 1933, as amended, if such subsequent filing specifically references this Form 8-K.
| Item 9.01 | Financial Statements and Exhibits. |
|---|
(d) Exhibits.
| Exhibit No. | Description |
|---|---|
| 99.1 | Press Release issued by AAR CORP. dated January 6, 2026. |
| 99.2 | Slide Presentation by AAR CORP. dated January 6, 2026. |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: January 6, 2026 | ||
|---|---|---|
| AAR CORP. | ||
| By: | ||
| /s/ SARAH L. FLANAGAN | ||
| Sarah L. Flanagan | ||
| Interim Chief Financial Officer and Vice President of Financial Operations | ||
| (Principal Financial Officer) |
Exhibit 99.1
AAR reports second quarter fiscal year 2026results
Wood Dale, Illinois, January 6, 2026 — AAR CORP. (NYSE: AIR), a leading provider of aviation services to commercial and government operators, MROs, and OEMs, reported today financial results for the fiscal year 2026 second quarter ended November 30, 2025.
SECOND QUARTER FISCAL YEAR 2026 HIGHLIGHTS
(As compared to Q2 FY2025)
| · | Sales<br> of $795 million; increased 16% |
|---|---|
| · | GAAP diluted EPS of $0.90 |
| --- | --- |
| · | Adjusted diluted EPS of $1.18; increased 31% |
| --- | --- |
| · | GAAP Net income of $35 million |
| --- | --- |
| · | Adjusted EBITDA of $97 million; increased 23% |
| --- | --- |
| · | Adjusted EBITDA margin increased to 12.1% from 11.4% |
| --- | --- |
“AAR delivered another outstanding quarter, achieving solid results throughout all segments of our business and advancing our strategic objectives through our recent acquisitions,” stated John M. Holmes, AAR’s Chairman, President and CEO. “Total sales were up 16%, including organic growth of 12%, led by our Parts Supply business with sales up 29%. Within Parts Supply, new parts Distribution had another exceptional quarter with organic sales growth of 32% as we continue to capture market share through our exclusive Distribution model. We also delivered growth in our Repair & Engineering segment as we continue to drive efficiency in our hangars and additional volume to our component repair facilities. Finally, we saw another quarter of increased sales to government customers, which were up 23%.
“Our 16% sales growth translated to 23% adjusted EBITDA growth as we expanded adjusted margins from 11.4% to 12.1%. Over time we expect margins to continue to improve as we increase efficiencies in our operations, realize synergies from recent acquisitions, and shift our sales mix to higher margin offerings, such as new parts Distribution and Trax.
“During the quarter, we closed on two strategic acquisitions: ADI in Parts Supply and HAECO Americas in Repair & Engineering. The ADI acquisition builds upon our differentiated new parts Distribution activities, adds new OEM relationships through its production-facing distribution channel, and expands our range of product offerings. This acquisition creates a new growth vector for Distribution, which has been our fastest growing activity over the last 4 years.
1
“The HAECO Americas acquisition extends our leadership position as the most sought-after airframe heavy maintenance provider in North America. In conjunction with the acquisition, we secured agreements with key customers totaling approximately $850 million, effectively selling out the acquired capacity for the next several years. We plan to apply our successful operating model to improve both the operational and financial performance of the acquired facilities and expect to rationalize our overall airframe heavy maintenance footprint to drive further margin improvement.
“Our balance sheet remains strong with net leverage at 2.49x giving us capacity to fund our growth through organic and inorganic investments.”
Holmes concluded, “We are executing on our strategy to build on our position as the leading independent provider of aviation aftermarket parts, repairs, and software. We have been achieving above market growth in new parts Distribution, capturing market share in airframe heavy maintenance and component repair while increasing the efficiency across our operations to improve margins. Trax continues to win in the marketplace and is being used by over 100 airlines globally to manage and procure the types of parts and repairs that we offer. This value chain is unique in the aviation industry, and we expect the momentum we are seeing to drive continued growth and margin expansion.”
RECENT UPDATES
NEW BUSINESS
| · | Secured<br> $850 million in airframe heavy maintenance contracts with several customers over a multi-year<br> period in connection with the HAECO Americas acquisition. |
|---|---|
| · | AAR's<br> subsidiary Airinmar was awarded a new multi-year agreement with Malaysia Airlines for aircraft<br> warranty management and value engineering services. |
| --- | --- |
| · | Signed<br> agreement with Eaton to become an authorized service center for commercial aerospace customers<br> across Europe, the Middle East, and Africa (EMEA). |
| --- | --- |
| · | Trax<br> and Aeroxchange signed an agreement to enhance and expand their range of system integrations. |
| --- | --- |
| · | Subsequent<br> to the end of the quarter, renewed key exclusive new parts Distribution contracts with Collins<br> Aerospace and Arkwin Industries, a unit of Transdigm. |
| --- | --- |
| · | Also<br> subsequent to quarter-end, Trax was selected by Thai Airways to provide its eMRO enterprise<br> resource planning system, suite of eMobility apps, and cloud hosting solution. |
| --- | --- |
2
PORTFOLIO UPDATES
| · | Acquired<br> ADI, a leading distributor of components and assemblies, strengthening AAR’s position<br> in new parts Distribution for $138 million. |
|---|---|
| · | Acquired<br> HAECO Americas, a leading provider of airframe heavy maintenance, expanding AAR’s airframe<br> heavy maintenance footprint and driving growth in its Repair & Engineering business<br> for $77 million. |
| --- | --- |
| · | Announced<br> agreement to purchase Aircraft Reconfig Technologies, a leading aircraft interiors engineering<br> company, for $35 million with the acquisition expected to close in the fourth quarter of<br> fiscal year 2026, subject to customary closing conditions. |
| --- | --- |
SECOND QUARTER FISCAL YEAR 2026 RESULTS
Consolidated second quarter sales increased 16% to $795.3 million, compared to $686.1 million in the same quarter last year. Sales to commercial customers increased 13%, or $66.2 million, primarily due to double-digit growth across new parts Distribution within the Company's Parts Supply segment. Sales to government customers increased 23% over the same period last year, primarily due to increased order volume for new parts Distribution activities. Sales to commercial customers were 71% of consolidated sales, compared to 73% in the prior year quarter.
The Company reported net income of $34.6 million, or $0.90 per diluted share. For the second quarter of the prior year, the Company reported a net loss of $30.6 million, or $0.87 per diluted share. The prior year quarter included after-tax charges of $57.1 million associated with the FCPA settlement and related costs. Adjusted diluted earnings per share in the second quarter of fiscal year 2026 were $1.18 compared to $0.90 in the second quarter of the prior year.
Selling, general, and administrative expenses were $88.7 million in the current quarter, compared to $133.1 million in the prior year quarter. The prior year quarter included $59.2 million for the settlement of FCPA allegations and related costs. Acquisition, amortization, and integration expenses were $10.9 million in the quarter, compared to $4.4 million in the prior year quarter.
Operating margins were 8.4% in the quarter, compared to (0.3)% in the prior year quarter. Adjusted operating margin increased to 10.2% in the current year quarter from 9.2% in the prior year quarter, primarily as a result of increased volume and profitability in the Company’s new parts Distribution activities.
3
Net interest expense for the quarter was $18.6 million, compared to $18.8 million last year. Average diluted share count increased from 35.2 million shares in the prior year quarter to 38.1 million shares in the current year quarter primarily due to the Company’s equity offering completed during the quarter.
Cash flow provided by operating activities was $13.6 million during the current quarter, compared to cash provided by operating activities of $22.0 million in the prior year quarter. As of November 30, 2025, net debt was $884.4 million and net leverage was 2.49x.
THIRD QUARTER AND FULL YEAR FY 2026 GUIDANCE
The Company is providing the following guidance for the third quarter and full year fiscal 2026. In addition to the guidance metrics provided in the prior quarter, the Company is including total sales growth expectations for the third quarter in order to provide additional clarity on the impact of recent acquisitions:
| Third quarter FY 2026 As of January 6, 2026 | |
|---|---|
| Total<br> sales growth | 20%<br> - 22% |
| Organic<br> sales growth^1^ | 8%<br> - 11% |
| Adjusted<br> operating margin | 9.8%<br> - 10.1% |
^1^ Organic sales growth reflects growth from prior year adjusted organic sales for the relevant period, which excludes Landing Gear sales and impact of acquisitions completed to date in FY26.
| Full year FY 2026 | ||
|---|---|---|
| Prior<br><br>As of September 23, 2025 | Current<br><br>As of January 6, 2026 | |
| Total sales growth | n/a | Approaching 17% |
| Organic sales growth^1^ | Approaching 10% | Approaching 11% |
4
Conference call information
On Tuesday, January 6, 2026, at 4 p.m. Central time, AAR will hold a conference call to discuss the results. A listen-only webcast and slides can be accessed at https://edge.media-server.com/mmc/p/qj6v82cg. Participants may join via phone by registering at at https://register-conf.media-server.com/register/BI9ca8a69d0f304e588fb0782f63689453. Once registered, participants will receive a dial-in number and a unique PIN that will allow them to access the call.
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.
The slides are also available on AAR’s website at https://www.aarcorp.com/en/investors/events-and-presentations/.
About AAR
AAR is a global aerospace and defense aftermarket solutions company with operations in over 20 countries. Headquartered in the Chicago 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 aarcorp.com/.
5
Contact: Chris Tillett – Investor Relations |
+1-630-227-5830 | investors@aarcorp.com
This press release contains certain statements relating to future results, which are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995, which reflect management’s expectations about future conditions, including, but not limited to, execution of strategies, continued demand in the commercial and government aviation markets; market position; anticipated activities and benefits related to new or expanding business relationships; expected contributions and synergies related to acquisitions; expansion of capabilities and operational footprint; opportunities for margin improvement through operations, integration activities and other efficiency initiatives; and continued sales and margin growth, earnings performance, debt management, and capital allocation.
Forward-looking statements often address our expected future operating and financial performance and financial condition, or targets, goals, commitments, and other business plans, and often may also be identified because they contain words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “likely,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will,” “would,” or similar expressions and the negatives of those terms.
These forward-looking statements are based on the beliefs of Company management, as well as assumptions and estimates based on information available to the Company as of the dates such assumptions and estimates are made, and are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or those anticipated, depending on a variety of factors, including: (i) factors that adversely affect the commercial aviation industry; (ii) adverse events and negative publicity in the aviation industry; (iii) a reduction in sales to the U.S. government and its contractors; (iv) cost overruns and losses on fixed-price contracts; (v) nonperformance by subcontractors or suppliers; (vi) our ability to manage our operational footprint; (vii) a reduction in outsourcing of maintenance activity by airlines; (viii) a shortage of skilled personnel or work stoppages; (ix) competition from other companies; (x) financial, operational and legal risks arising as a result of operating internationally; (xi) inability to integrate acquisitions effectively and execute operational and financial plans related to the acquisitions; (xii) failure to realize the anticipated benefits of acquisitions; (xiii) circumstances associated with divestitures; (xiv) inability to recover costs due to fluctuations in market values for aviation products and equipment; (xv) cyber or other security threats or disruptions; (xvi) a need to make significant capital expenditures to keep pace with technological developments in our industry; (xvii) restrictions on use of intellectual property and tooling important to our business; (xviii) inability to fully execute our stock repurchase program and return capital to stockholders; (xix) limitations on our ability to access the debt and equity capital markets or to draw down funds under loan agreements; (xx) our ability to manage our debt; (xxi) non-compliance with restrictive and financial covenants contained in our debt and loan agreements; (xxii) changes in or non-compliance with laws and regulations related to federal contractors, the aviation industry, international operations, safety, and environmental matters, and the costs of complying with such laws and regulations; and (xxiii) exposure to product liability and property claims that may be in excess of our liability insurance coverage. Should one or more of those risks or uncertainties materialize adversely, or should underlying assumptions or estimates prove incorrect, actual results may vary materially from those described.
For a discussion of these and other risks and uncertainties, refer to our Annual Report on Form 10-K, Part I, “Item 1A, Risk Factors” and our other filings filed from time to time with the U.S Securities and Exchange Commission. These events and uncertainties are difficult or impossible to predict accurately and many are beyond the Company’s control. The risks described in these reports are not the only risks we face, as additional risks and uncertainties are not currently known or foreseeable or impossible to predict accurately or risks that are beyond the Company’s control or deemed immaterial may materially adversely affect our business, financial condition or results of operations in future periods. We assume no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events, except as required by law.
6
AAR CORP. and subsidiaries
| Condensed consolidated statements of operations<br> (In millions except per share data - unaudited) | Three months ended November 30, | Six monthsended November 30, | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2025 | 2024 | 2025 | 2024 | |||||||||
| Sales | $ | 795.3 | $ | 686.1 | $ | 1,534.9 | $ | 1,347.8 | ||||
| Cost of sales | 638.4 | 557.5 | 1,244.3 | 1,102.0 | ||||||||
| Gross profit | 156.9 | 128.6 | 290.6 | 245.8 | ||||||||
| Provision for (Recovery of) credit losses | 1.1 | (0.3 | ) | 1.7 | (0.1 | ) | ||||||
| Selling, general, and administrative | 88.7 | 133.1 | 159.9 | 209.0 | ||||||||
| Earnings (Loss) from joint ventures | (0.1 | ) | 1.9 | 2.9 | 4.2 | |||||||
| Operating income (loss) | 67.0 | (2.3 | ) | 131.9 | 41.1 | |||||||
| Gain (Loss) related to sale and exit of business, net | (0.1 | ) | (1.2 | ) | 0.6 | (1.3 | ) | |||||
| Interest expense, net | (18.6 | ) | (18.8 | ) | (37.1 | ) | (37.1 | ) | ||||
| Other expense, net | (0.2 | ) | (0.2 | ) | (0.3 | ) | (0.3 | ) | ||||
| Income (Loss) before income tax expense | 48.1 | (22.5 | ) | 95.1 | 2.4 | |||||||
| Income tax expense | 13.5 | 8.1 | 26.1 | 15.0 | ||||||||
| Net income (loss) | $ | 34.6 | $ | (30.6 | ) | $ | 69.0 | $ | (12.6 | ) | ||
| Earnings (Loss) per share – Basic | $ | 0.91 | $ | (0.87 | ) | $ | 1.87 | $ | (0.36 | ) | ||
| Earnings (Loss) per share – Diluted | $ | 0.90 | $ | (0.87 | ) | $ | 1.85 | $ | (0.36 | ) | ||
| Share data used for earnings (loss) per share: | ||||||||||||
| Weighted average shares outstanding – Basic | 37.8 | 35.2 | 36.8 | 35.2 | ||||||||
| Weighted average shares outstanding – Diluted | 38.1 | 35.2 | 37.0 | 35.2 |
7
AAR CORP. and subsidiaries
| Condensed consolidated balance sheets****<br> (In millions) | November 30, 2025 | May 31, 2025 | ||
|---|---|---|---|---|
| (unaudited) | ||||
| ASSETS | ||||
| Cash and cash equivalents | $ | 75.6 | $ | 96.5 |
| Restricted cash | 20.6 | 12.7 | ||
| Accounts receivable, net | 401.9 | 354.8 | ||
| Contract assets | 152.6 | 140.3 | ||
| Inventories, net | 910.8 | 809.2 | ||
| Other current assets | 128.8 | 97.1 | ||
| Total current assets | 1,690.3 | 1,510.6 | ||
| Property, plant, and equipment, net | 216.8 | 158.5 | ||
| Goodwill and intangible assets, net | 847.7 | 750.4 | ||
| Rotable assets supporting long-term programs | 211.3 | 172.4 | ||
| Operating lease right-of-use assets, net | 105.1 | 93.3 | ||
| Other non-current assets | 171.3 | 159.4 | ||
| Total assets | $ | 3,242.5 | $ | 2,844.6 |
| LIABILITIES AND EQUITY | ||||
| Accounts payable | $ | 341.8 | $ | 303.1 |
| Other current liabilities | 252.4 | 251.6 | ||
| Total current liabilities | 594.2 | 554.7 | ||
| Long-term debt | 952.7 | 968.0 | ||
| Operating lease liabilities | 91.6 | 79.6 | ||
| Other non-current liabilities | 42.8 | 30.7 | ||
| Total liabilities | 1,681.3 | 1,633.0 | ||
| Equity | 1,561.2 | 1,211.6 | ||
| Total liabilities and equity | $ | 3,242.5 | $ | 2,844.6 |
8
AAR CORP. and subsidiaries
| Condensed consolidated statements of cash flows (In millions – unaudited) | Three months ended<br> November 30, | Six months ended<br> November 30, | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2025 | 2024 | 2025 | 2024 | |||||||||
| Cash flows provided by (used in) operating activities: | ||||||||||||
| Net income (loss) | $ | 34.6 | $ | (30.6 | ) | $ | 69.0 | $ | (12.6 | ) | ||
| Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities | ||||||||||||
| Depreciation and amortization | 18.0 | 14.6 | 32.5 | 28.8 | ||||||||
| Stock-based compensation expense | 4.3 | 5.0 | 9.6 | 10.0 | ||||||||
| Changes in certain assets and liabilities: | ||||||||||||
| Accounts receivable | (2.1 | ) | (9.6 | ) | (10.6 | ) | (33.3 | ) | ||||
| Contract assets | 10.1 | (2.7 | ) | 3.7 | (27.2 | ) | ||||||
| Inventories | 33.5 | (42.6 | ) | (18.3 | ) | (57.4 | ) | |||||
| Other current assets | (21.0 | ) | (2.1 | ) | (17.5 | ) | (10.6 | ) | ||||
| Rotable assets supporting long-term programs | (41.1 | ) | (5.6 | ) | (44.6 | ) | (12.1 | ) | ||||
| Accounts payable and accrued liabilities | (11.9 | ) | 94.1 | (28.6 | ) | 102.6 | ||||||
| Other | (10.8 | ) | 1.5 | (26.5 | ) | 15.2 | ||||||
| Net cash provided by (used in) operating activities | 13.6 | 22.0 | (31.3 | ) | 3.4 | |||||||
| Cash flows used in investing activities: | ||||||||||||
| Property, plant, and equipment expenditures | (7.4 | ) | (8.3 | ) | (16.1 | ) | (16.2 | ) | ||||
| Acquisitions, net of cash acquired | (209.7 | ) | –– | (221.6 | ) | –– | ||||||
| Other | 3.8 | 0.4 | 0.6 | 3.0 | ||||||||
| Net cash used in investing activities | (213.3 | ) | (7.9 | ) | (237.1 | ) | (13.2 | ) | ||||
| Cash flows provided by (used in) financing activities: | ||||||||||||
| Proceeds from equity offering, net | 273.9 | –– | 273.9 | –– | ||||||||
| Proceeds from long-term borrowings, net | –– | –– | 153.0 | –– | ||||||||
| Short-term borrowings (repayments) on Revolving Credit Facility, net | (70.0 | ) | 5.0 | (167.0 | ) | –– | ||||||
| Other | 0.4 | 0.3 | (4.5 | ) | (3.8 | ) | ||||||
| Net cash provided by (used in) financing activities | 204.3 | 5.3 | 255.4 | (3.8 | ) | |||||||
| Increase (Decrease) in cash and cash equivalents | 4.6 | 19.4 | (13.0 | ) | (13.6 | ) | ||||||
| Cash, cash equivalents, and restricted cash at beginning of period | 91.6 | 63.1 | 109.2 | 96.1 | ||||||||
| Cash, cash equivalents, and restricted cash at end of period | $ | 96.2 | $ | 82.5 | $ | 96.2 | $ | 82.5 |
9
AAR CORP. and subsidiaries
| Third-party sales by segment (In millions - unaudited) | Three months ended November 30, | Six months ended November 30, | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2025 | 2024 | 2025 | 2024 | |||||||||
| Parts Supply | $ | 353.6 | $ | 273.7 | $ | 671.4 | $ | 523.4 | ||||
| Repair & Engineering | 244.5 | 228.8 | 459.1 | 446.4 | ||||||||
| Integrated Solutions | 175.8 | 163.4 | 360.8 | 332.3 | ||||||||
| Expeditionary Services | 21.4 | 20.2 | 43.6 | 45.7 | ||||||||
| $ | 795.3 | $ | 686.1 | $ | 1,534.9 | $ | 1,347.8 | |||||
| Operating income (loss) by segment (In millions- unaudited) | Three months ended November 30, | Six months ended November 30, | ||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 2025 | 2024 | 2025 | 2024 | |||||||||
| Parts Supply | $ | 40.9 | $ | 31.6 | $ | 81.8 | $ | 61.7 | ||||
| Repair & Engineering | 22.7 | 22.8 | 43.1 | 43.9 | ||||||||
| Integrated Solutions | 13.9 | 6.5 | 23.6 | 14.2 | ||||||||
| Expeditionary Services | 2.4 | 2.2 | 5.4 | 0.5 | ||||||||
| 79.9 | 63.1 | 153.9 | 120.3 | |||||||||
| Corporate and other | (12.9 | ) | (65.4 | ) | (22.0 | ) | (79.2 | ) | ||||
| $ | 67.0 | $ | (2.3 | ) | $ | 131.9 | $ | 41.1 |
Adjusted net income, adjusted diluted earnings per share, organic sales growth, adjusted operating margin, adjusted cash flow used in operating activities, adjusted EBITDA, adjusted EBITDA margin, net debt, and net debt to adjusted EBITDA (net 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:
| · | Costs<br> associated with U.S. Foreign Corrupt Practices Act (“FCPA”) matters that we self-reported<br> to the U.S. Department of Justice and other agencies, including investigation costs and settlement<br> charges. |
|---|---|
| · | Expenses<br> associated with recent acquisition activity, including professional fees for legal, due diligence,<br> and other acquisition activities, intangible asset amortization, integration costs, and compensation<br> expense related to contingent consideration and retention agreements. |
| --- | --- |
| · | Legal<br> judgments and reversals related to or impacted by the Russia/Ukraine conflict. |
| --- | --- |
| · | Contract<br> termination costs and benefits are comprised of gains and losses that are recognized at the<br> time of modifying, terminating, or restructuring certain customer and vendor contracts, including<br> the impact from the U.S. government exercising their termination for convenience in the first<br> quarter of fiscal year 2025 for our Mobility Systems business’s new-generation pallet<br> contract. |
| --- | --- |
| · | Losses<br> related to our exit from our Indian joint venture, our Landing Gear Overhaul business, and<br> our Composites manufacturing business, including legal fees for the performance guarantee<br> associated with the Composites’ A220 aircraft contract. |
| --- | --- |
10
Adjusted EBITDA is net income 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, FCPA settlement and investigation costs, certain legal judgments, acquisition, integration, and amortization expenses from recent acquisition activity, and significant customer contract terminations.
The Company is not providing a reconciliation of forward-looking financial measures to the most directly comparable forward-looking GAAP measure because the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing and amount of certain items, such as, but not limited to, unusual gains and losses, the ultimate outcome of pending litigation, the impact and timing of potential acquisitions and divestitures, and other structural changes or their probable significance. Each of the adjustments has not occurred, are out of the Company's control and/or cannot be reasonably predicted. For this reason, the Company is unable to address the probable significance of the unavailable information.
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:
| Adjusted net income (In millions - unaudited) | Three months ended<br> November 30, | Six months ended<br> November 30, | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2025 | 2024 | 2025 | **** | 2024 | ||||||||
| Net income (loss) | $ | 34.6 | $ | (30.6 | ) | $ | 69.0 | **** | $ | (12.6 | ) | |
| Acquisition, integration, and amortization expenses **** | 14.2 | 7.2 | 20.6 | **** | 16.1 | |||||||
| Loss (Gain) related to sale of business/joint venture, net | 0.1 | 0.5 | (0.6 | ) | (0.8 | ) | ||||||
| Severance charges | –– | –– | 1.0 | **** | –– | |||||||
| Government COVID-related subsidyliability reversal | –– | –– | (0.7 | ) | –– | |||||||
| FCPA settlement and investigation costs **** | –– | 59.2 | –– | **** | 64.2 | |||||||
| Contract termination costs | –– | –– | –– | **** | 3.2 | |||||||
| Tax effect on adjustments ^(a)^ | (3.5 | ) | (4.0 | ) | (4.9 | ) | (7.4 | ) | ||||
| Adjusted net income | $ | 45.4 | $ | 32.3 | $ | 84.4 | **** | $ | 62.7 | |||
| ^(a)^ | Calculation uses estimated statutory tax rates on non-GAAP<br> adjustments except for the impact of the non-deductible portion of the FCPA settlement charge. | |||||||||||
| --- | --- | |||||||||||
| Adjusted diluted earnings per share (unaudited) | Three months<br> ended<br> November 30, | Six months<br> ended<br> November 30, | ||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 2025 | 2024 | 2025 | 2024 | |||||||||
| Diluted earnings (loss) per share | $ | 0.90 | $ | (0.87 | ) | $ | 1.85 | $ | (0.36 | ) | ||
| Acquisition, integration, and amortization expenses **** | 0.37 | 0.20 | 0.56 | 0.45 | ||||||||
| Loss (Gain) related to sale of business/joint venture, net **** | –– | 0.01 | (0.02 | ) | (0.02 | ) | ||||||
| Severance charges | –– | –– | 0.03 | –– | ||||||||
| Government COVID-related subsidy liability reversal **** | –– | –– | (0.02 | ) | –– | |||||||
| FCPA settlement and investigation costs **** | –– | 1.67 | –– | 1.81 | ||||||||
| Contract termination costs **** | –– | –– | –– | 0.09 | ||||||||
| Tax effect on adjustments ^(a)^ **** | (0.09 | ) | (0.11 | ) | (0.14 | ) | (0.21 | ) | ||||
| Adjusted diluted earnings per share | $ | 1.18 | $ | 0.90 | $ | 2.26 | $ | 1.76 | ||||
| ^(a)^ | Calculation uses estimated statutory tax rates on non-GAAP<br> adjustments except for the impact of the non-deductible portion of the FCPA settlement charge. | |||||||||||
| --- | --- |
11
| Adjusted operating margin (In millions - unaudited) | Three months ended | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| November 30,<br> 2025 | August 31, <br> 2025 | November 30,<br> 2024 | |||||||
| Sales | $ | 795.3 | $ | 739.6 | $ | 686.1 | |||
| Operating income (loss) | $ | 67.0 | $ | 64.9 | $ | (2.3 | ) | ||
| Acquisition, integration, and amortization expenses | 14.2 | 6.4 | 7.2 | ||||||
| Severance charges | –– | 1.0 | –– | ||||||
| Government COVID-related subsidy liability reversal **** | –– | (0.7 | ) | –– | |||||
| FCPA settlement and investigation costs **** | –– | –– | 59.2 | ||||||
| Gain related to sale of joint venture **** | –– | –– | (0.7 | ) | |||||
| Adjusted operating income | $ | 81.2 | $ | 71.6 | $ | 63.4 | |||
| Operating margin | 8.4 | % | 8.8 | % | (0.3 | )% | |||
| Adjusted operating margin | 10.2 | % | 9.7 | % | 9.2 | % |
Organic sales growth for the three months ended November 30, 2025
(unaudited)
| GAAP sales growth | 15.9 | % | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Impact of Landing Gear Overhaul divestiture | 3.3 | |||||||||||
| Impact of acquisitions within the last twelve months | (7.0 | ) | ||||||||||
| Organic sales growth | 12.2 | % | ||||||||||
| Adjusted cash provided by (used in) operating activities (In millions - unaudited) | Three months ended<br> November 30, | Six months ended<br> November 30, | ||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 2025 | 2024 | 2025 | 2024 | |||||||||
| Cash provided by (used in) operating activities | $ | 13.6 | $ | 22.0 | $ | (31.3 | ) | $ | 3.4 | |||
| Amounts outstanding on accounts receivable financing program: | ||||||||||||
| Beginning of period | 24.3 | 29.0 | 21.3 | 13.7 | ||||||||
| End of period | (28.1 | ) | (23.9 | ) | (28.1 | ) | (23.9 | ) | ||||
| Adjusted cash provided by (used in) operating activities | $ | 9.8 | $ | 27.1 | $ | (38.1 | ) | $ | (6.8 | ) |
12
| Adjusted EBITDA (In millions - unaudited) | Three months ended<br> November 30, | Six months ended<br> November 30, | Year ended May 31, | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2025 | 2024 | 2025 | **** | 2024 | 2025 | ||||||||||
| Net income (loss) | $ | 34.6 | $ | (30.6 | ) | $ | 69.0 | **** | $ | (12.6 | ) | $ | 12.5 | ||
| Income tax expense | 13.5 | 8.1 | 26.1 | **** | 15.0 | 26.4 | |||||||||
| Other expense, net | 0.2 | 0.2 | 0.3 | **** | 0.3 | 0.3 | |||||||||
| Interest expense, net | 18.6 | 18.8 | 37.1 | **** | 37.1 | 73.6 | |||||||||
| Depreciation and amortization | 17.1 | 14.0 | 30.9 | **** | 27.5 | 55.2 | |||||||||
| Acquisition and integration expenses | 8.1 | 3.2 | 10.5 | **** | 8.2 | 10.8 | |||||||||
| Loss (Gain) related to sale of business/joint venture, net | 0.1 | 0.5 | (0.6 | ) | (0.8 | ) | 70.3 | ||||||||
| Severance charges | –– | –– | 1.0 | **** | –– | –– | |||||||||
| Government COVID-related subsidy liability reversal | –– | –– | (0.7 | ) | –– | 0.8 | |||||||||
| FCPA settlement and investigation costs **** | –– | 59.2 | –– | **** | 64.2 | 65.3 | |||||||||
| Russian bankruptcy court judgment **** | –– | –– | –– | **** | –– | (11.1 | ) | ||||||||
| Contract termination costs | –– | –– | –– | **** | 3.2 | 0.2 | |||||||||
| Stock-based compensation | 4.3 | 5.0 | 9.6 | **** | 10.0 | 19.9 | |||||||||
| Adjusted EBITDA | $ | 96.5 | $ | 78.4 | $ | 183.2 | **** | $ | 152.1 | $ | 324.2 | ||||
| Net income margin | 4.4 | % | (4.5 | )% | **** | **** | |||||||||
| Adjusted EBITDA margin | 12.1 | % | 11.4 | % | **** | **** | |||||||||
| Net debt<br> <br>(In millions - unaudited) | November 30,<br><br>2025 | November 30,<br><br>2024 | |||||||||||||
| --- | --- | --- | --- | --- | --- | --- | |||||||||
| Total debt | $ | 960.0 | $ | 997.0 | |||||||||||
| Less: Cash and cash equivalents | (75.6 | ) | (61.7 | ) | |||||||||||
| Net debt | $ | 884.4 | $ | 935.3 |
Net debt to adjusted EBITDA
(In millions - unaudited)
| Adjusted EBITDA for the year ended May 31, 2025 | $ | 324.2 | |
|---|---|---|---|
| Less: Adjusted EBITDA for the six months ended November 30, 2024 | (152.1 | ) | |
| Plus: Adjusted EBITDA for the six months ended November 30, 2025 | 183.2 | ||
| Adjusted EBITDA for the twelve months ended November 30, 2025 | $ | 355.3 | |
| Net debt at November 30, 2025 | $ | 884.4 | |
| Net debt to Adjusted EBITDA **** | 2.49 |
13
Exhibit 99.2
© 2026 AAR CORP. All rights reserved worldwide. 1 Second Quarter Fiscal Year 2026 Earnings Call January 6, 2026
© 2026 AAR CORP. All rights reserved worldwide. 2 Note : All results and expectations in the presentation reflect continuing operations unless otherwise noted . This presentation contains certain statements relating to future results, which are forward - looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995 , which reflect management’s expectations about future conditions, including, but not limited to, continued demand in the commercial and government aviation markets, anticipated activities and benefits under extended, expanded and new services, supply and distribution agreements, contributions from our acquisitions, production efficiencies in our hangars and progress on hangar expansions, continued sales growth, margin expansion, debt management, capital allocation and expenses . These forward - looking statements are based on the beliefs of Company management, as well as assumptions and estimates based on information available to the Company as of the dates such assumptions and estimates are made, and are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or those anticipated, depending on a variety of factors, including : ( i ) factors that adversely affect the commercial aviation industry ; (ii) adverse events and negative publicity in the aviation industry ; (iii) a reduction in sales to the U . S . government and its contractors ; (iv) cost overruns and losses on fixed - price contracts ; (v) nonperformance by subcontractors or suppliers ; (vi) our ability to manage our operational footprint ; (vii) a reduction in outsourcing of maintenance activity by airlines ; (viii) a shortage of skilled personnel or work stoppages ; (ix) competition from other companies ; (x) financial, operational and legal risks arising as a result of operating internationally ; (xi) inability to integrate acquisitions effectively and execute operational and financial plans related to the acquisitions ; (xii) failure to realize the anticipated benefits of acquisitions ; (xiii) circumstances associated with divestitures ; (xiv) inability to recover costs due to fluctuations in market values for aviation products and equipment ; (xv) cyber or other security threats or disruptions ; (xvi) a need to make significant capital expenditures to keep pace with technological developments in our industry ; (xvii) restrictions on use of intellectual property and tooling important to our business ; (xviii) inability to fully execute our stock repurchase program and return capital to stockholders ; (xix) limitations on our ability to access the debt and equity capital markets or to draw down funds under loan agreements ; (xx) our ability to manage our debt ; (xxi) non - compliance with restrictive and financial covenants contained in our debt and loan agreements ; (xxii) changes in or non - compliance with laws and regulations related to federal contractors, the aviation industry, international operations, safety, and environmental matters, and the costs of complying with such laws and regulations ; and (xxiii) exposure to product liability and property claims that may be in excess of our liability insurance coverage . Should one or more of those risks or uncertainties materialize adversely, or should underlying assumptions or estimates prove incorrect, actual results may vary materially from those described . For a discussion of these and other risks and uncertainties, refer to our Annual Report on Form 10 - K, Part I, “Item 1 A, Risk Factors” and our other filings filed from time to time with the U . S . Securities and Exchange Commission . We assume no obligation to update any forward - looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events, except as required by law . Non - GAAP Financial Measures : This presentation includes certain non - GAAP financial measures . Please refer to the Appendix for additional information on these non - GAAP financial measures and reconciliations to the most directly comparable GAAP financial measures . Unless otherwise noted, the statements made and the information provided in this presentation are as of January 6 , 2026 . Forward - looking Statements
© 2026 AAR CORP. All rights reserved worldwide. 3 Q2 Highlights © 2026 AAR CORP. All rights reserved worldwide. 3 Strengthened our portfolio through two acquisitions • ADI accelerates new parts Distribution growth • HAECO Americas expands heavy maintenance capacity and secures multi - year backlog Sales growth in all segments Delivered above - market growth in new parts Distribution Expanded operating margins Renewed exclusive new parts Distribution agreements with Collins and Arkwin Captured new business wins with Trax and continued to enhance our digital capabilities Reduced leverage and maintained strategic flexibility through proactive balance sheet management
© 2026 AAR CORP. All rights reserved worldwide. 4 Optimized Portfolio Driving Growth and Profitability Executing on Our Strategic Objectives See Appendix for reconciliation of Non - GAAP financial measures.1) Subject to customary closing conditions. Objectives New business wins • Renewed key exclusive new parts Distribution contracts with Collins Aerospace and Arkwin Industries • Eaton named Amsterdam component repair facility an aerospace authorized service center for Europe, Middle East, and Africa • Continued progress on Oklahoma City and Miami hangar expansions Operational efficiency • Cost discipline supporting margin expansion • Strong operational performance and turnaround time in Airframe MRO • Taking actions to generate synergies from recent acquisitions Software and IP - enabled offerings • Trax and Aeroxchange enhancing integration capabilities • Trax selected by Thai Airways to provide its eMRO system, suite of eMobility apps, and cloud hosting solution Disciplined portfolio management • Acquired ADI, leading distributor of electronic components and assemblies, and HAECO Americas, 2nd largest independent North American heavy maintenance provider • Announced agreement to acquire Aircraft Reconfig Technologies; expected close Q4 FY26 1 • Strong, flexible balance sheet with reduced leverage Q2 Updates Q2 Results +16% Sales +23% Adjusted EBITDA +31% Adjusted EPS
© 2026 AAR CORP. All rights reserved worldwide. 5 Accelerating Growth Opportunities in New Parts Distribution STRATEGIC RATIONALE • Expands AAR’s new parts Distribution with complementary electronics offerings and new sales channel • Adds new OEM partnerships and accelerates revenue growth • Drives margin improvement through scale and efficiency Leading distributor of electronic components and assemblies Distributes to a broad set of commercial and government customers across the aerospace and defense industry Key products: $149M Sales 1 $15M EBITDA 1 ~400 Employees $138M Transaction value 6 Locations US, UK, and India Components Assemblies 1 LTM as of June 30, 2025 ADI Acquisition
© 2026 AAR CORP. All rights reserved worldwide. 6 Extending Our Heavy Maintenance Leadership Position STRATEGIC RATIONALE • Accelerates growth and strengthens relationships with major airline customers • Expands capacity to meet rising demand and optimize AAR’s MRO footprint • Unlocks synergies and drives margin improvement through operational efficiencies 2 nd largest independent heavy maintenance provider in North America Secured new multi - year heavy maintenance contracts with key customers valued at $850M+ Facilities in Greensboro, NC and Lake City, FL HAECO Americas Acquisition ~1,600+ Employees $77M Transaction value 2.5M Sold Hours 1 2 3 Revenue Optimization • $850M in new five - year contracts • Contracts aligned with key terms of other heavy maintenance customers Cost Reductions and Process Improvements • Adjust cost structure to revenue base • Deploying proprietary processes and systems to achieve AAR’s quality and efficiency levels Footprint Rationalization • Exiting high - cost Indianapolis facility, relocating work primarily to acquired facilities • Reducing costs and addressing labor availability challenges 12 - 18 MONTH INTEGRATION PLAN
© 2026 AAR CORP. All rights reserved worldwide. 7 Enhancing Our Repair & Engineering Capabilities STRATEGIC RATIONALE • Builds on AAR’s engineering and in - house certification services with proprietary MRO solutions and IP portfolio • Further differentiates AAR as the leading independent MRO provider in North America • Brings engineering and certification capability that can accelerate parts PMA efforts Specializes in passenger aircraft reconfiguration for leading global airlines Solutions include project management, engineering, and certification IP portfolio includes patents, parts manufacturer approval (PMA), and supplemental type certificates ~100+ Employees $35M Transaction value Transaction expected to close in Q4 FY26 1 Agreement to Acquire Aircraft Reconfig Technologies 1) Subject to customary closing conditions.
© 2026 AAR CORP. All rights reserved worldwide. 8 Second Quarter FY26 Performance Highlights Consolidated Sales: 71% commercial; 29% government / defense. See Appendix for reconciliation of Non - GAAP financial measures. Q2 FY25 Q2 FY26 Adj. EPS $0.90 $1.18 Parts Supply Integrated Solutions Repair & Engineering Expeditionary Services Margin Q2 FY25 Q2 FY26 $686.1 $795.3 Sales by Segment (M) $163.4 $175.8 $228.8 $244.5 $273.7 $353.6 $20.2 $21.4 Q2 FY25 Q2 FY26 Adj. Operating Income (M) Corporate / other ($6 .1 ) Corporate / other ($6 .5 ) $63.4 $81.2 10.2% 9.2% Q2 FY25 Q2 FY26 Corporate / other ($1.3) Corporate / other ($ 2.6 ) Adj. EBITDA (M) 12.1% 11.4% $78.4 $96.5 UP 16% UP 23% UP 28% UP 31%
© 2026 AAR CORP. All rights reserved worldwide. 9 Q2 Sales and Profitability Parts Supply See Appendix for reconciliation of Non - GAAP financial measures. Sales (M) Adj. EBITDA (M) Commercial Government / Defense Margin Q2 FY25 Q2 FY26 $33.9 $46.5 Q2 FY25 Q2 FY26 $31.6 $42.8 Q2 FY25 Q2 FY26 $273.7 $353.6 12.4% 13.2% 11.5% 12.1% Parts Supply • Strong new parts Distribution sales for commercial and defense • ADI performed above expectations • Expanded margins driven by operating leverage Adj. Operating Income (M) UP 29% UP 37% UP 35%
© 2026 AAR CORP. All rights reserved worldwide. 10 Q2 FY25 Q2 FY26 Q2 Sales and Profitability Repair & Engineering $228.8 $244.5 Sales (M) Adj. EBITDA (M) Commercial Government / Defense Margin Q2 FY25 Q2 FY26 $30.9 $31.2 Q2 FY25 Q2 FY26 $27.4 $27.4 13.5% 12.8% 12.0% 11.2% See Appendix for reconciliation of Non - GAAP financial measures. Adj. Operating Income (M) UP 1% FLAT UP 7% Repair & Engineering • Capacity additions on track and volume secured • HAECO Integration and synergy realization actions kicked off in Q2 and are expected to drive margin improvements over next 12 - 18 months
© 2026 AAR CORP. All rights reserved worldwide. 11 Sales (M) Adj. EBITDA (M) Q2 Sales and Profitability Integrated Solutions See Appendix for reconciliation of Non - GAAP financial measures. Q2 FY25 Q2 FY26 $8.3 $15.1 Q2 FY25 Q2 FY26 $12.3 $18.5 Q2 FY25 Q2 FY26 $163.4 $175.8 7.5% 10.5% 5.1% 8.6% Integrated Solutions • Government Programs delivered strong revenue growth • Favorable mix and key program milestones achieved in the quarter driving margin expansion Commercial Government / Defense Margin Adj. Operating Income (M) UP 8% UP 50% UP 82%
© 2026 AAR CORP. All rights reserved worldwide. 12 Balance Sheet Highlights See Appendix for reconciliation of Non - GAAP financial measures. Net Leverage Net leverage of 2.49x Pro forma net leverage decreased 1.09x since Product Support acquisition Target net leverage of 2.0x – 2.5x Q4 FY24 Q1 FY25 Q2 FY25 Q3 FY25 Q4 FY25 Q1 FY26 Q2 FY26 FY26 3.17 3.31 3.30 3.58 March 1, 2024 Product Support acquisition 3.06 2.72 Target net leverage in FY26 2.0 2.5 LOWER BY 1.09x 2.82 2.49
© 2026 AAR CORP. All rights reserved worldwide. 13 Executing Our Disciplined Capital Allocation Strategy Note: Aircraft Reconfig Technologies acquisition expected to close in Q4 FY26 , subject to customary closing conditions. Balanced Capital Allocation Priorities Organic Investment to Drive Growth • Support new business wins in new parts Distribution • Strategic Airframe MRO expansion • Software and IP - enabled offerings: Trax and PMA Acquisition Criteria Strategic • Expands new parts Distribution • Expands MRO footprint • Accelerates software complementary to Trax Financial • Growth and/or margin accretive • Maintain leverage within targeted range / below maximum Acquisitions Well - Aligned with Criteria $250M Total Investment Maintain Flexible Balance Sheet • Target Net Leverage Ratio of ~2.0x – 2.5x, max ~3.75x M&A • Disciplined adherence to strategic and financial criteria • Focus on core segments • Increase intellectual property in portfolio Return Capital to Shareholders • Assess opportunistic share repurchases
© 2026 AAR CORP. All rights reserved worldwide. 14 FY 2026 Dynamics AAR Framework for FY 2026 Growing above - market in both commercial and government Distribution Parts Supply Material supply constraints will persist through FY26 USM Full utilization with additional capacity coming online in 2H FY26 and FY27 Airframe MRO Repair & Engineering Product Support integration complete & ready for additional volume from cross - selling Component Services Trax continuing to deliver high growth Digital Integrated Solutions Near - term program headwinds offset by new business wins Government Q3 FY 2026 Guidance 1 Organic sales growth reflects growth from prior year adjusted organic sales for the relevant period, which excludes Landing G ea r sales and impact of acquisitions completed to date in FY26. FY 2026 Guidance 20% - 22% Total sales growth 8% - 11% Organic sales growth 1 9.8% - 10.1% Adjusted operating margin Estimated tax rate 28% Current As of Jan 6, 2026 Prior As of Sep 23, 2025 Approaching 11% Approaching 10% Organic sales growth 1
© 2026 AAR CORP. All rights reserved worldwide. 15 Appendix
© 2026 AAR CORP. All rights reserved worldwide. 16 Non - GAAP financial measures This presentation includes financial results for the Company with respect to adjusted diluted earnings per share, adjusted EBITDA , adjusted operating income, adjusted EBITDA margin, adjusted operating margin, and net leverage which 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 actual operating performance unaffected by the impact of certain items . 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 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 . Adjusted EBITDA is net income (loss) 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, impairment and exit charges, facility consolidation and repositioning costs, FCPA investigation settlement and related 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 . Adjusted operating income is adjusted EBITDA gross of depreciation and amortization and stock - based compensation . Pursuant to the requirements of Regulation G of the Exchange Act, we provide tables that reconcile the above - mentioned non - GAAP financial measures to the most directly comparable GAAP financial measures in the Appendix at the end of this presentation . The Company is not providing a reconciliation of forward - looking financial measures to the most directly comparable forward - looking GAAP measure because the information is not available without unreasonable effort . This is due to the inherent difficulty of forecasting the timing and amount of certain items, such as, but not limited to, unusual gains and losses, the ultimate outcome of pending litigation, the impact and timing of potential acquisitions and divestitures, and other structural changes or their probable significance . Each of the adjustments has not occurred, are out of the Company's control and/or cannot be reasonably predicted . For this reason, the Company is unable to address the probable significance of the unavailable information .
© 2026 AAR CORP. All rights reserved worldwide. 17 Adjusted diluted earnings per share Non - GAAP financial measures Q2 FY26 Q2 FY25 Diluted earnings (loss) per share $0.90 ($0.87) Acquisition, integration, and amortization expenses 0.37 0.20 Loss related to sale of business/joint venture - 0.01 FCPA settlement and investigation costs - 1.67 Tax effect on adjustments (a) (0.09) (0.11) Adjusted diluted earnings per share $1.18 $0.90 (a) Calculation uses estimated statutory tax rates on non-GAAP adjustments except for the impact of the non-deductible portion of the FCPA settlement charge.
© 2026 AAR CORP. All rights reserved worldwide. 18 Non - GAAP financial measures A djusted operating income, operating margin, EBITDA, and EBITDA margin © 2024 AAR CORP. All rights reserved worldwide. Q2 FY26 Q2 FY25 Parts Repair & Integrated Expeditionary Corporate Parts Repair & Integrated Expeditionary Corporate ($ in millions) Supply Engineering Solutions Services & Other Consolidated Supply Engineering Solutions Services & Other Consolidated Sales $353.6 $244.5 $175.8 $21.4 $0.0 $795.3 $273.7 $228.8 $163.4 $20.2 $0.0 $686.1 Operating income (loss) 40.9 22.7 13.9 2.4 (12.9) 67.0 31.6 22.8 6.5 2.2 (65.4) (2.3) Operting income margin 11.6% 9.3% 7.9% 11.2% NA 8.4% 11.5% 10.0% 4.0% 10.9% NA -0.3% Operating income (loss) 40.9 22.7 13.9 2.4 (12.9) $67.0 31.6 22.8 6.5 2.2 (65.4) ($2.3) Acquisition, integration & amortization expenses 1.9 4.7 1.2 - 6.4 14.2 - 5.3 1.8 - 0.1 7.2 FCPA settlement and Investigation costs - - - - - - - - - - 59.2 59.2 Gain related to sale of business/joint venture, net - - - - - - - (0.7) - - - (0.7) Adjusted operating income $42.8 $27.4 $15.1 $2.4 ($6.5) $81.2 $31.6 $27.4 $8.3 $2.2 ($6.1) $63.4 Adjusted operating margin 12.1% 11.2% 8.6% 11.2% NA 10.2% 11.5% 12.0% 5.1% 10.9% NA 9.2% Operating income (loss) $40.9 $22.7 $13.9 $2.4 ($12.9) $67.0 $31.6 $22.8 $6.5 $2.2 ($65.4) ($2.3) Depreciation and amortization 4.9 6.5 4.1 0.5 1.1 17.1 1.8 6.3 4.4 0.4 1.1 14.0 Stock-based compensation 0.7 0.2 0.5 - 2.9 4.3 0.5 0.1 0.6 - 3.8 5.0 Acquisition and integration expenses - 1.8 - - 6.3 8.1 - 2.4 0.8 - - 3.2 FCPA settlement and Investigation costs - - - - - - - - - - 59.2 59.2 Gain related to sale of joint venture - - - - - - - (0.7) - - - (0.7) Adjusted EBITDA $46.5 $31.2 $18.5 $2.9 ($2.6) $96.5 $33.9 $30.9 $12.3 $2.6 ($1.3) $78.4 Adjusted EBITDA margin 13.2% 12.8% 10.5% 13.6% NA 12.1% 12.4% 13.5% 7.5% 12.9% NA 11.4%
© 2026 AAR CORP. All rights reserved worldwide. 19 Trailing twelve months Adjusted EBITDA Non - GAAP financial measures 19 FY23 ($ in millions) Q4 Q1 Q2 Q3 Q4 Full Year Q1 Q2 Q3 Q4 Full Year Q1 Q2 Q3 FY24Q1 FY25Q2 FY25Q3 FY25Q1 FY26Q2 FY26 Net income (loss) $23.2 ($0.6) $23.8 $14.0 $9.1 $46.3 $18.0 ($30.6) ($8.9) $34.0 $12.5 $34.4 $34.6 $60.4 $64.9 $10.5 ($12.4) $28.9 $94.1 Income tax expense (benefit) 7.0 (6.9) 7.9 6.5 4.5 12.0 6.9 8.1 (2.2) 13.6 26.4 12.6 13.5 14.5 25.8 26.0 17.3 32.1 37.5 Other expense (income), net 1.2 - 0.1 0.2 0.1 0.4 0.1 0.2 0.1 (0.1) 0.3 0.1 0.2 1.5 0.5 0.6 0.5 0.3 0.3 Interest expense, net 4.7 5.4 5.6 11.3 18.7 41.0 18.3 18.8 18.1 18.4 73.6 18.5 18.6 27.0 53.9 67.1 73.9 73.8 73.6 Depreciation and amortization 7.7 8.4 8.7 8.8 15.3 41.2 13.5 14.0 14.0 13.7 55.2 13.8 17.1 33.6 46.3 51.6 56.8 55.5 58.6 Loss (Gain) related to sale of business/joint venture, net 0.2 0.7 0.9 1.0 0.2 2.8 (1.3) 0.5 64.0 7.1 70.3 (0.7) 0.1 2.8 0.8 0.4 63.4 70.9 70.5 Acquisition and integration expenses 4.3 1.8 2.1 11.2 14.6 29.7 5.0 3.2 3.5 (0.9) 10.8 2.4 8.1 19.4 32.9 34.0 26.3 8.2 13.1 Severance charges - - - - 0.5 0.5 - - - - - 1.0 - - 0.5 0.5 0.5 1.0 1.0 Government COVID-related subsidy liability (reversal) - - - - - - - - - 0.8 0.8 (0.7) - - - - - 0.1 0.1 Pension settlement charge - 26.7 - - - 26.7 - - - - - - - 26.7 - - - - - Russian bankruptcy court judgment (reversal) - 11.2 - - 11.2 - - (11.1) - (11.1) - - 11.2 - - (11.1) (11.1) (11.1) Contract termination/restructuring costs (benefit) and loss provisions, net - - - - 4.8 4.8 3.2 - (3.0) - 0.2 - - - 8.0 8.0 5.0 (3.0) (3.0) FCPA settlement, investigation and remediation costs 1.6 1.1 2.6 2.0 4.8 10.5 5.0 59.2 1.1 - 65.3 - - 7.3 14.4 71.0 70.1 60.3 1.1 Stock-based compensation 3.1 4.3 3.6 3.6 3.8 15.3 5.0 5.0 5.6 4.3 19.9 5.3 4.3 14.6 16.0 17.4 19.4 20.2 19.5 Adjusted EBITDA $53.0 $52.1 $55.3 $58.6 $76.4 $242.4 $73.7 $78.4 $81.2 $90.9 $324.2 $86.7 $96.5 $219.0 $264.0 $287.1 $309.7 $337.2 $355.3 FY24 FY25 FY26 Twelve months ended
© 2026 AAR CORP. All rights reserved worldwide. 20 Net Leverage ($ in millions) Q3 FY24 Q4 FY24 Q1 FY25 Q2 FY25 Q3 FY25 Q4 FY25 Q1 FY26 Q2 FY26 Total debt $277.0 $997.0 $992.0 $997.0 $1,032.0 $977.0 $1,030.0 $960.0 Less: cash and cash equivalents (69.2) (85.8) (49.3) (61.7) (84.4) (96.5) (80.0) (75.6) Net debt $207.8 $911.2 $942.7 $935.3 $947.6 $880.5 $950.0 $884.4 Adjusted EBITDA for the twelve months ended $219.0 $242.4 $264.0 $287.1 $309.7 $324.2 $337.2 $355.3 Net debt to Adjusted EBITDA 0.95x 3.76x 3.57x 3.26x 3.06x 2.72x 2.82x 2.49x Net debt $207.8 $911.2 $942.7 $935.3 $947.6 $880.5 $950.0 $884.4 Product Support consideration plus fees of $30.3 million 755.3 n/a n/a n/a n/a n/a n/a n/a Pro forma net debt $963.1 n/a n/a n/a n/a n/a n/a n/a Adjusted EBITDA for the twelve months ended $219.0 $242.4 $264.0 $287.1 $309.7 $324.2 $337.2 $355.3 Product Support adjusted EBITDA Twelve months ended February 29, 2024 49.9 n/a n/a n/a n/a n/a n/a n/a Nine months ended February 29, 2024 n/a 33.5 n/a n/a n/a n/a n/a n/a Six months ended February 29, 2024 n/a n/a 20.4 n/a n/a n/a n/a n/a Three months ended February 29, 2024 n/a n/a n/a 7.7 n/a n/a n/a n/a Pro forma adjusted EBITDA 268.9$ 275.9$ 284.4$ 294.8$ 309.7$ 324.2$ 337.2$ 355.3$ Pro forma net debt to pro forma adjusted EBITDA 3.58x n/a n/a n/a n/a n/a n/a n/a Net debt to pro forma adjusted EBITDA n/a 3.30x 3.31x 3.17x 3.06x n/a n/a n/a