WOOD DALE, Ill., May 26, 2015 /PRNewswire/ -- AAR CORP. (NYSE:
AIR) announced earlier today that it completed the "modified Dutch
auction" tender offer to purchase shares of its common stock for an
aggregate cash purchase price of $135
million. With the execution of the tender the Company
expects to retire 4.2 million shares at $31.90 per share, leaving a fully diluted share
count of 34.9 million shares as it enters the First Quarter of
Fiscal Year 2016.
"We entered Fiscal Year 2015 with a three phase plan to
streamline and focus the Company on aviation and expeditionary
services and to return capital to shareholders," said David P. Storch, Chairman and Chief Executive
Officer of AAR. "The first phase of this transformation was the
sale of the Telair Cargo Group allowing us to focus our capital and
resources towards our industry leading services business."
Storch continued, "In the second phase we are using the proceeds
from the sale to pay down our debt (reducing our interest expense
by $25 million per year) and to
return capital to our shareholders by buying shares through this
tender offer. Following through on our announced strategy, we
will be divesting our Precision Machining business and selling
other assets that are no longer a part of our strategy going
forward. These include certain aircraft and inventory no
longer required by our airlift business, aircraft in our lease
portfolio, as well as inventory in our supply chain and MRO
businesses that is excess to our needs or where we are exiting
certain product lines. Excluding the sale of Precision Machining,
we expect to generate $55-$70 million
in cash from these actions and incur $55-$70
million in charges in the Fourth Quarter. We
anticipate some of the asset sales to continue in the First Quarter
of our Fiscal Year 2016. We have also taken action to reduce
our corporate costs by approximately $8
million per year."
Storch concluded, "As we enter the third phase of building a
best in class aviation and expeditionary services company we find
ourselves in a strong financial position to build out our strategy
as we have improved our leverage profile and our cash on hand plus
unused capacity is in excess of $500
million. We expect to invest opportunistically in
expanding our service, supply chain and mission critical
operational capabilities to expand our leadership positions."
About AAR
AAR is a global aerospace and defense company that employs more
than 5,000 people in over 20 countries. Based in Wood Dale, Illinois, AAR supports commercial,
government and defense customers through two operating segments:
Aviation Services and Expeditionary Services. AAR's Aviation
Services include inventory management; parts supply; OEM parts
distribution; aircraft maintenance, repair and overhaul; and
component repair. AAR's Expeditionary Services include airlift
operations; mobility systems; and command and control centers in
support of military and humanitarian missions. More information can
be found at www.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. These forward-looking statements are based on beliefs
of Company management, as well as assumptions and estimates based
on information currently available to the Company, and are subject
to certain risks and uncertainties that could cause actual results
to differ materially from historical results or those anticipated,
including those factors discussed under Item 1A, entitled "Risk
Factors", included in the Company's Form 10-K for the fiscal year
ended May 31, 2014. Should one or
more of these risks or uncertainties materialize adversely, or
should underlying assumptions or estimates prove incorrect, actual
results may vary materially from those described. These
events and uncertainties are difficult or impossible to predict
accurately and many are beyond the Company's control. The
Company assumes 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. For additional information, see the comments
included in AAR's filings with the Securities and Exchange
Commission.
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SOURCE AAR CORP.