AAR provided update on strategic positioning and reports fourth quarter and fiscal year 2015 results. Q4 consolidated sales were $415.8 million, with net income of $15.1 million or $0.36 per share.
Article continues below
For the fourth quarter of the prior fiscal year, the company reported sales of $420.6 million, net income of $17.1 million and earnings per share of $0.43. Full Fiscal Year 2015 consolidated net income was $10.2 million or $0.24 per share, as compared to $72.9 million or $1.83 per share reported in Fiscal Year 2014.
The company reported a loss from continuing operations of $82.1 million in the fourth quarter, or $2.12 per diluted share reflecting the impact of the actions reported above. Income from continuing operations was $14.9 million or $0.37 per diluted share in the prior year period.
Sales in the Aviation Services segment increased 17.1% to $360.2 million in the quarter largely due to higher sales at the company's supply chain business. Sales in the Expeditionary Services segment declined 50.8% to $55.6 million, due to fewer aircraft flying positions at airlift, as well as lower volumes of mobility systems.
Fourth quarter sales to commercial customers represented 65% of consolidated sales as compared to 57% of consolidated sales in the same period last year, with government and defense customers representing the balance. In Aviation Services, sales to commercial customers represented 74% of segment sales.
Net interest expense in the fourth quarter was $7.1 million, which included $2 million for termination of derivatives, as compared to $5.8 million net interest expense in prior year quarter.
As a result of the actions described above, the company reduced its net indebtedness by $445.5 million since June 1, 2014 and expects to have significantly reduced interest expense of less than $9 million for the next fiscal year.
Full year Fiscal 2015 loss from continuing operations was $54.5 million, or $1.40 per share reflecting the actions reported above. Income from continuing operations was $67.2 million or $1.68 per share in Fiscal Year 2014
Full Fiscal Year 2015 consolidated sales were $1.6 billion driven by strong growth in supply chain sales, Aviation Services segment sales increased by 6.9% to $1.3 billion. As a result of weak airlift results and lower volumes in mobility systems sales, Expeditionary Services segment sales declined 42% to $278.2 million. The company ended fiscal 2015 with 19 contracted aircraft positions flying in its airlift operations and is currently at 21.
Sales to commercial customers represented 63% of consolidated sales as compared to 55% of consolidated sales in the same period last year, with government and defense customers representing the balance. In Aviation Services, sales to commercial customers represented 75% of segment sales.
AAR's financial position improved over the course of Fiscal Year 2015. The company started with a total debt to total capital ratio of 38.8% on May 31, 2014 and ended the year with a ratio of 15.4% (net debt ratio of 10.5% taking into consideration the company's May 31, 2015 cash position). The company now has $434.6 million cash and available liquidity under its revolving credit facility. ■