AAR CORP
For the period ended Feb 28, 2025. Filed Mar 28, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Feb 28, 2025 · Filed Mar 28, 2025
AIR$109.21+4.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-11-30; filed 2025-01-08.
0001410578-25-000003
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-02-28; filed 2025-03-28.
0001410578-25-000519
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 112 previous paragraphs and 110 current paragraphs.
61 unchanged; 35 reworded; 13 added; 13 removed; 3 previous and 1 current paragraphs rearranged.
Tables are not compared: 13 previous and 13 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (13)
Current report
estimated fair value. Goodwill of $14.6 million was reclassified to assets held for sale and was included in the determination of the impairment charge. In connection with the decision to exit the LGO business, the LGO assets and liabilities have been reclassified as assets and liabilities held for sale beginning in the third quarter of fiscal 2025.
Current report
We continue to progress with the construction of the expansion of our Miami and Oklahoma City airframe maintenance facilities to meet growing customer demand. In Miami, we are constructing a 114,000 square foot facility with three bays adjacent to our existing hangar. We have experienced delays and cost overruns but expect incremental government reimbursements to offset a portion of these increased construction costs. We now anticipate the facility to be complete and operational in the first half of fiscal 2027. In Oklahoma City, we are constructing an 80,000 square foot facility with three bays and warehouse space adjacent to our existing hangar. The facility is expected to be complete and operational in the second half of fiscal 2026.
Current report
Three- and Nine-Month Periods Ended February 28/29, 2025 and 2024
Current report
Selling, general and administrative expenses decreased $15.7 million, or 20.4%, from the prior year quarter primarily due to the de-recognition of the $11.2 million Russian legal liability resulting from the ruling which reversed the previous judgment against us. In addition, we recognized acquisition-related costs and amortization expense of $5.3 million in the current year quarter compared to $12.2 million in the prior year quarter.
Current report
Our income tax benefit was $2.2 million in the third quarter of fiscal 2025 compared to income tax expense of $6.5 million in the prior year quarter. The decrease in expense was driven by the change from pre-tax income in the prior year quarter to a pre-tax loss in the current year quarter due to the $63.0 million impairment charge on the pending divestiture of our LGO business.
Current report
Nine-Month Period Ended February 28, 2025
Current report
Our income tax expense was $7.5 million for the nine-month period ended February 29, 2024 while our income before income taxes was $44.7 million. The effective income tax rate of 16.8% was impacted by the accelerated recognition of all unamortized net actuarial losses in Accumulated other comprehensive loss.
Current report
Operating income in the Parts Supply segment increased $14.3 million, or 46.0%, over the prior year quarter, primarily due to the de-recognition of the $11.2 million Russian legal liability resulting from the ruling which reversed the previous judgment against us.
Current report
Sales in the Integrated Solutions segment decreased $2.6 million, or 1.6%, from the prior year quarter primarily due to lower government program activity.
Current report
Nine-Month Periods Ended February 28/29, 2025 and 2024
Current report
Sales in the Expeditionary Services segment for the nine-month period ended February 28, 2025 increased $20.8 million, or 38.8%, over the prior year period. We recognized sales of $13.5 million reflecting the estimated recovery on our incurred costs for the Next Generation Pallet contract that was terminated for convenience by the customer.
Current report
Operating income in the Expeditionary Services segment increased $3.8 million, or 122.6%, over the prior year period with the operating margin increased to 9.3% from 5.8% in the prior year period. These increases were primarily attributable to the higher sales volume for pallets.
Current report
Net cash used in operating activities was $15.3 million in the nine-month period ended February 28, 2025 compared to cash provided of $19.1 million in the prior year period. The decrease in the cash provided by operating activities over the prior year of $34.4 million was primarily attributable to the $55.6 million payment associated with our FCPA settlement with the DOJ and SEC. This decrease was partially offset by working capital changes, including the timing of collections on our accounts receivable. During the third quarter of fiscal 2025, we received a $50 million prepayment from a customer for which $27.1 million remained as deferred revenue at February 28, 2025.
Removed paragraphs (13)
Previous report
Three- and Six-Month Periods Ended November 30, 2024 and 2023
Previous report
Operating Income
Previous report
Operating income decreased $40.6 million, or 106.0%, from the prior year quarter primarily due to the increased costs for the FCPA settlement and related costs.
Previous report
Six-Month Period Ended November 30, 2024
Previous report
Operating Income
Previous report
Operating income decreased $22.5 million, or 35.4%, from the prior year period primarily due to the increased costs for the FCPA settlement and related costs.
Previous report
Operating income in the Parts Supply segment increased $3.2 million, or 11.3%, over the prior year quarter, primarily due to the mix of products sold within our new parts distribution activities.
Previous report
Sales in the Integrated Solutions segment increased $6.8 million, or 4.3%, over the prior year quarter primarily due to higher commercial program activity.
Previous report
Six-Month Periods Ended November 30, 2024 and 2023
Previous report
Sales in the Expeditionary Services segment for the six-month period ended November 30, 2024 increased $10.8 million, or 30.9%, over the prior year period primarily due to the sales recognized in conjunction with the termination of our Next Generation Pallet contract.
Previous report
Operating income in the Expeditionary Services segment decreased $1.7 million, or 77.3%, from the prior year period primarily due to the impact of termination of the Next Generation Pallet contract. In conjunction with the termination, we expensed equipment and inventory of $12.7 million and recognized a contract asset of $9.5 million reflecting the estimated recovery on our incurred costs. Operating margin decreased to 1.1% from 6.3% in the prior year period primarily due to the contract termination.
Previous report
In connection with the Revolver Amendment, we borrowed $186.2 million under the Amended Revolving Credit Facility to fund a portion of the purchase price for the acquisition of the Product Support business in the fourth quarter of fiscal 2024.
Previous report
Net cash provided by operating activities was $3.4 million in the six-month period ended November 30, 2024 compared to cash used of $1.3 million in the prior year period. The increase in the cash provided by operating activities over the prior year of $4.7 million was primarily attributable to working capital changes, including less inventory investments in both new parts and used serviceable material in the current year period.
Reworded paragraphs (35)
Previous wording
In December 2024, we entered into an agreement to divest our Landing Gear Overhaul business to GA Telesis for $51 million subject to post-closing adjustments. The sale is expected to close in the first calendar quarter of 2025, subject to customary and regulatory closing conditions. For more information, see Note 17 – Subsequent Event to the Notes to the Condensed Consolidated Financial Statements.
Current wording
On December 19, 2024, we entered into an agreement to divest our Landing Gear Overhaul (“LGO”) business to GA Telesis for $51 million subject to post-closing adjustments for working capital, cash, and debt. The sale is expected to close in the fourth quarter of fiscal 2025, subject to customary and regulatory closing conditions. We expect to realize net proceeds of approximately $44.5 million from the sale of the LGO business which reflects selling costs and an estimated working capital adjustment. We recognized a non-cash, pre-tax impairment charge of $63.0 million in the third quarter of fiscal 2025 to adjust the carrying value of the LGO assets to their
Previous wording
Consolidated sales for the second quarter of fiscal 2025 increased $140.7 million, or 25.8%, over the prior year quarter primarily due to an increase in sales to commercial customers. Consolidated sales to commercial customers increased $115.0 million, or 29.9%, over the prior year quarter primarily due to the acquisition of the Product Support business in the fourth quarter of fiscal 2024 and strong demand and volume growth in our Parts Supply segment from both new parts distribution and aftermarket parts trading activities. Our consolidated sales to government customers increased $25.7 million, or 16.0%, primarily due to volume growth in our Parts Supply segment from new parts distribution activities and the contribution from the recent Product Support acquisition.
Current wording
Consolidated sales for the third quarter of fiscal 2025 increased $110.9 million, or 19.5%, over the prior year quarter primarily due to an increase in sales to commercial customers. Consolidated sales to commercial customers increased $86.3 million, or 21.6%, over the prior year quarter primarily due to the acquisition of the Product Support business in the fourth quarter of fiscal 2024 and strong demand and volume growth in our Parts Supply segment from new parts distribution activities. Our consolidated sales to government customers increased $24.6 million, or 14.6%, primarily due to the contribution from the recent Product Support acquisition and increased pallet volume in our Mobility business.
Previous wording
Consolidated cost of sales increased $115.5 million, or 26.1%, over the prior year quarter which was largely in line with the consolidated sales increase of 25.8% discussed above.
Current wording
Consolidated cost of sales increased $89.5 million, or 19.6%, over the prior year quarter which was largely in line with the consolidated sales increase of 19.5% discussed above.
Previous wording
Consolidated gross profit for the second quarter of fiscal 2025 increased $25.2 million, or 24.4%, over the prior year quarter. Gross profit on sales to commercial customers increased $19.1 million, or 24.3%, over the prior year quarter due to the acquisition of the Product Support business. Gross profit margin on sales to commercial customers decreased to 19.6% from 20.4% in the prior year quarter primarily due to lower margins in our aftermarket parts trading activities.
Current wording
Consolidated gross profit for the third quarter of fiscal 2025 increased $21.4 million, or 19.4%, over the prior year quarter. Gross profit on sales to commercial customers increased $16.5 million, or 20.9%, over the prior year quarter due to the acquisition of the Product Support business. Gross profit margin on sales to commercial customers decreased slightly to 19.7% from 19.8% in the prior year quarter primarily due to lower margins in our aftermarket parts trading activities.
Previous wording
Gross profit on sales to government customers increased $6.1 million, or 24.7%, over the prior year quarter. Gross profit on sales to government customers increased primarily due to strong demand and volume growth across our new parts distribution activities. Gross profit margin on sales to government customers increased to 16.6% from 15.4% primarily due to volume growth in our new parts distribution activities.
Current wording
Gross profit on sales to government customers increased $4.9 million, or 15.7%, over the prior year quarter. Gross profit on sales to government customers increased primarily due to strong demand and volume growth across our new parts distribution activities. Gross profit margin on sales to government customers increased to 18.7% from 18.6% primarily due to volume growth in our new parts distribution activities.
Previous wording
Interest expense increased $13.1 million in the second quarter of fiscal 2025 reflecting the impact of both higher interest rates and higher average borrowings used to fund investments in the business, including our acquisition of Product Support businesses in the fourth quarter of fiscal 2024. Our average borrowing rate was 6.8% in the second quarter of fiscal 2025 compared to 6.7% in the prior year quarter.
Current wording
Interest expense increased $6.6 million in the third quarter of fiscal 2025 reflecting the impact of higher average borrowings used to fund investments in the business, including our acquisition of Product Support business in the fourth quarter of fiscal 2024. Our average borrowing rate was 6.38% in the third quarter of fiscal 2025 compared to 6.82% in the prior year quarter.
Previous wording
Consolidated sales for the six-month period ended November 30, 2024 increased $252.7 million, or 23.1%, over the prior year period primarily due to an increase in sales to commercial customers. Consolidated sales to commercial customers increased $195.4 million, or 25.1%, over the prior year period primarily due to the acquisition of the Product Support business in the fourth quarter of fiscal 2024 and strong demand and volume growth in our Parts Supply segment from our new parts distribution activities. Our consolidated sales to government customers increased $57.3 million, or 18.1%, primarily due to the Product Support acquisition and volume growth in our Parts Supply segment from our new parts distribution activities.
Current wording
Consolidated sales for the nine-month period ended February 28, 2025 increased $363.6 million, or 21.9%, over the prior year period primarily due to an increase in sales to commercial customers. Consolidated sales to commercial customers increased $281.7 million, or 23.9%, over the prior year period primarily due to the acquisition of the Product Support business in the fourth quarter of fiscal 2024 and strong demand and volume growth in our Parts Supply segment from our new parts distribution activities. Our consolidated sales to government customers increased $81.9 million, or 16.9%, primarily due to the Product Support acquisition and volume growth in our Parts Supply segment from our new parts distribution activities.
Previous wording
In addition, our Mobility business received a stop-work order from our U.S. Government customer on the Next Generation Pallet contract as the program was terminated for convenience by the customer in the first quarter of fiscal 2025. In conjunction with the termination, we recognized sales of $9.5 million reflecting the estimated recovery on our incurred costs.
Current wording
In addition, our Mobility business received a stop-work order from our U.S. Government customer on the Next Generation Pallet contract as the program was terminated for convenience by the customer in the first quarter of fiscal 2025. In conjunction with the termination, we recognized sales of $13.5 million reflecting the estimated recovery on our incurred costs.
Previous wording
Consolidated cost of sales increased $211.6 million, or 23.8%, over the prior year period which was largely in line with the consolidated sales increase of 23.1% discussed above.
Current wording
Consolidated cost of sales increased $301.1 million, or 22.3%, over the prior year period which was largely in line with the consolidated sales increase of 21.9% discussed above.
Previous wording
Consolidated gross profit for the six-month period ended November 30, 2024 increased $41.1 million, or 20.1%, over the prior year period. Gross profit on sales to commercial customers increased $36.3 million, or 23.5%, over the prior year period due to the acquisition of the Product Support business. Gross profit margin on sales to commercial customers decreased to 19.6% from 19.8% in the prior year period primarily due to lower margins in our aftermarket parts trading activities.
Current wording
Consolidated gross profit for the nine-month period ended February 28, 2025 increased $62.5 million, or 19.8%, over the prior year period. Gross profit on sales to commercial customers increased $52.8 million, or 22.6%, over the prior year period primarily due to the acquisition of the Product Support business. Gross profit margin on sales to commercial customers decreased to 19.6% from 19.8% in the prior year period primarily due to lower margins in our aftermarket parts trading activities.
Previous wording
Gross profit on sales to government customers increased $4.8 million, or 9.5%, over the prior year period. Gross profit on sales to government customers increased primarily due to strong demand and volume growth across our new parts distribution activities. Gross profit margin on sales to government customers decreased to 14.7% from 15.9% primarily due to the impact from the termination of the Next Generation Pallet contract.
Current wording
Gross profit on sales to government customers increased $9.7 million, or 11.9%, over the prior year period. Gross profit on sales to government customers increased primarily due to strong demand and volume growth across our new parts distribution activities. Gross profit margin on sales to government customers decreased to 16.1% from 16.8% primarily due to exit-related costs and inefficiencies associated with the closing of our Garden City, New York component repair facility.
Previous wording
Selling, general and administrative expenses increased $68.6 million, or 48.9%, over the prior year period primarily due to increased costs of $60.5 million related to the previously disclosed FCPA investigations and settlement and increased costs of $5.5 million for amortization and acquisition-related expenses for the Product Support and Trax acquisitions. These increases were partially offset by the recognition of a charge for $11.2 million in the prior year period related to an unfavorable Russian court judgment.
Current wording
Selling, general and administrative expenses increased $52.9 million, or 24.3%, over the prior year period primarily due to increased costs of $65.3 million related to the previously disclosed FCPA investigations and settlement. This increase was partially offset by the de-recognition of the $11.2 million Russian legal liability resulting from the ruling which reversed the previous judgment against us.
Previous wording
Interest expense for the six-month period ended November 30, 2024 increased $26.1 million reflecting the impact of both higher interest rates and higher average borrowings used to fund investments in the business, including our acquisition of Product Support businesses in the fourth quarter of fiscal 2024. Our average borrowing rate was 6.8% for the six-month period ended November 30, 2024 compared to 6.6% in the prior year period.
Current wording
Interest expense for the nine-month period ended February 28, 2025 increased $32.7 million reflecting the impact of higher average borrowings used to fund investments in the business, including our acquisition of Product Support businesses in the fourth quarter of fiscal 2024. Our average borrowing rate was 6.66% for the nine-month period ended February 28, 2025 compared to 6.67% in the prior year period.
Previous wording
Our income tax expense was $15.0 million for the six-month period ended November 30, 2024 while our income before income taxes was $2.4 million. The majority of the FCPA settlement charge is nondeductible for income tax purposes resulting in no income tax benefit.
Current wording
Our income tax expense was $12.8 million for the nine-month period ended February 28, 2025 while our loss before income taxes was $8.7 million. The majority of the FCPA settlement charge is nondeductible for income tax purposes resulting in no income tax benefit.
Previous wording
Sales in the Parts Supply segment increased $46.1 million, or 20.3%, over the prior year quarter primarily due to a $31.6 million increase in sales in our new parts distribution activities from increased demand and growth from new and expanded distribution agreements. Whole asset sales in our aftermarket parts trading activities increased $5.2 million in the second quarter of fiscal 2025 from the prior year quarter.
Current wording
Sales in the Parts Supply segment increased $28.4 million, or 11.7%, over the prior year quarter primarily due to a $25.7 million increase in sales in our new parts distribution activities from increased demand and growth from new and expanded distribution agreements. Whole asset sales in our aftermarket parts trading activities increased $22.2 million in the third quarter of fiscal 2025 from the prior year quarter.
Previous wording
Sales in the Repair & Engineering segment increased $83.4 million, or 57.4%, over the prior year quarter primarily due to the acquisition of the Product Support business in the fourth quarter of fiscal 2024 which contributed sales of $74.1 million inclusive of repair services transferred from our Garden City, New York location as part of our ongoing integration activities. In addition, sales increased $12.1 million at our airframe maintenance facilities.
Current wording
Sales in the Repair & Engineering segment increased $75.1 million, or 53.3%, over the prior year quarter primarily due to the acquisition of the Product Support business in the fourth quarter of fiscal 2024 which contributed sales of $72.8 million inclusive of repair services transferred from our Garden City, New York location as part of our ongoing integration activities.
Previous wording
Operating income in the Repair & Engineering segment increased $11.5 million, or 101.8%, over the prior year quarter primarily due to the Product Support acquisition. Operating margin increased to 10.0% from 7.8% in the prior year quarter, reflecting the favorability of the higher margin Product Support business.
Current wording
Operating income in the Repair & Engineering segment increased $7.5 million, or 65.2%, over the prior year quarter primarily due to the Product Support acquisition. Operating margin increased to 8.8% from 8.2% in the prior year quarter, reflecting the favorability of the higher margin Product Support business.
Previous wording
Operating income in the Integrated Solutions segment increased $0.1 million, or 1.6%, over the prior year quarter. The slight increase was driven by improved profitability across our government programs largely offset by lower profitability across our commercial programs. Operating margin decreased to 4.0% from 4.1% in the prior year quarter primarily due to the mix of products and services across our commercial and government programs.
Current wording
Operating income in the Integrated Solutions segment increased $1.0 million, or 11.6%, over the prior year quarter. The increase was driven by improved profitability across our government programs partially offset by lower profitability across our commercial programs. Operating margin increased to 5.9% from 5.2% in the prior year quarter primarily due to the mix of products and services across our commercial and government programs.
Previous wording
Sales in the Expeditionary Services segment increased $4.4 million, or 27.8%, over the prior year period primarily due to higher sales volumes for pallets.
Current wording
Sales in the Expeditionary Services segment increased $10.0 million, or 53.5%, over the prior year period primarily due to higher sales volumes for pallets. In addition, we recognized sales of $4.0 million reflecting the revised estimated recovery on our incurred costs for the Next Generation Pallet contract that was terminated for convenience by the customer.
Previous wording
Operating income in the Expeditionary Services segment increased $1.3 million, or 144.4%, over the prior year quarter with the operating margin increased to 10.9% from 5.7% in the prior year quarter. These increases were attributable to the higher sales volumes.
Current wording
Operating income in the Expeditionary Services segment increased $5.5 million, or 611.1%, over the prior year quarter with the operating margin increased to 22.3% from 4.8% in the prior year quarter. These increases were attributable to the pallet-related items previously discussed.
Previous wording
Sales in the Parts Supply segment for the six-month period ended November 30, 2024 increased $59.0 million, or 12.7%, over the prior year period primarily due to a $62.2 million increase in sales in our new parts distribution activities from increased demand and growth from new and expanded distribution agreements. Whole asset sales in our aftermarket parts trading activities decreased $19.1 million from the prior year period.
Current wording
Sales in the Parts Supply segment for the nine-month period ended February 28, 2025 increased $87.4 million, or 12.4%, over the prior year period primarily due to a $87.9 million increase in sales in our new parts distribution activities from increased demand and growth from new and expanded distribution agreements. Whole asset sales in our aftermarket parts trading activities increased $3.2 million over the prior year period.
Previous wording
Operating income in the Parts Supply segment increased $18.2 million, or 41.8%, over the prior year period primarily due to improved profitability from the increased sales volume within our new parts distribution activities. In addition, we recognized an $11.2 million charge related to an unfavorable Russian court judgment in the prior year period.
Current wording
Operating income in the Parts Supply segment increased $32.5 million, or 43.6%, over the prior year period primarily due to improved profitability from the increased sales volume within our new parts distribution activities. In addition, the de-recognition of the $11.2 million Russian legal liability contributed to the improved profitability.
Previous wording
Sales in the Repair & Engineering segment for the six-month period ended November 30, 2024 increased $163.5 million, or 57.8%, over the prior year period primarily due to the acquisition of the Product Support business in the fourth quarter of fiscal 2024 which contributed sales of $149.0 million inclusive of repair services transferred from our Garden City, New York location as part of our ongoing integration activities. In addition, sales increased $19.7 million at our airframe maintenance facilities.
Current wording
Sales in the Repair & Engineering segment for the nine-month period ended February 28, 2025 increased $238.6 million, or 56.3%, over the prior year period primarily due to the acquisition of the Product Support business in the fourth quarter of fiscal 2024 which contributed sales of $221.8 million inclusive of repair services transferred from our Garden City, New York location as part of our ongoing integration activities. In addition, sales increased $26.6 million at our airframe maintenance facilities.
Previous wording
Operating income in the Repair & Engineering segment increased $23.5 million, or 115.2%, over the prior year period primarily due to the Product Support acquisition. Operating margin increased to 9.8% from 7.2% in the prior year period, reflecting the favorability of the higher margin Product Support business.
Current wording
Operating income in the Repair & Engineering segment increased $31.0 million, or 97.2%, over the prior year period primarily due to the Product Support acquisition. Operating margin increased to 9.5% from 7.5% in the prior year period, reflecting the favorability of the higher margin Product Support business.
Previous wording
Sales in the Integrated Solutions segment for the six-month period ended November 30, 2024 increased $19.4 million, or 6.2%, over the prior year period primarily due to higher commercial program activity.
Current wording
Sales in the Integrated Solutions segment for the nine-month period ended February 28, 2025 increased $16.8 million, or 3.5%, over the prior year period primarily due to higher commercial program activity.
Previous wording
Changes in estimates and assumptions related to our arrangements accounted for using the cost-to-cost method are recorded using the cumulative catch-up method of accounting. In the six-month period ended November 30, 2024, we recognized favorable cumulative catch-up adjustments of $2.4 million compared to net favorable cumulative catch-up adjustments of $0.2 million in the prior year period. These adjustments primarily relate to our long-term, power-by-the-hour programs where we provide component inventory management and repair services as well as certain long-term government programs.
Current wording
Changes in estimates and assumptions related to our arrangements accounted for using the cost-to-cost method are recorded using the cumulative catch-up method of accounting. In the nine-month period ended February 28, 2025, we recognized favorable cumulative catch-up adjustments of $2.4 million compared to net favorable cumulative catch-up adjustments of $2.7 million in the prior year period. These adjustments primarily relate to our long-term, power-by-the-hour programs where we provide component inventory management and repair services as well as certain long-term government programs.
Previous wording
Operating income in the Integrated Solutions segment increased $0.1 million, or 0.7%, over the prior year period. The increased favorability from the cumulative catch-up adjustments discussed above was largely offset by lower profitability across our commercial programs primarily due to the mix of products and services. Operating margin decreased to 4.3% from 4.5% in the prior year period primarily due to the mix of products and services across our commercial and government programs.
Current wording
Operating income in the Integrated Solutions segment increased $1.1 million, or 4.8%, over the prior year period primarily due to improved profitability across our Trax software solutions. Operating margin increased to 4.8% from 4.7% in the prior year period primarily due to the mix of products and services across our commercial and government programs.
Previous wording
Our operating activities are funded and commitments met through the generation of cash from operations. Our ability to generate cash from operations is influenced primarily by our operating performance and changes in working capital. In addition to operations, our current capital resources include an unsecured revolving credit facility under the Credit Agreement referred to below and an accounts receivable financing program. Periodically, we may also raise capital through common stock and debt financings in the public or private markets. We continually evaluate various financing arrangements, including the issuance of common stock or debt, which would allow us to improve our liquidity position and finance future growth on commercially reasonable terms. Our continuing ability to borrow from our lenders and issue debt and equity securities to the public and private markets in the future may be negatively
Current wording
Our operating activities are funded and commitments met through the generation of cash from operations. Our ability to generate cash from operations is influenced primarily by our operating performance and changes in working capital. In addition to operations, our current capital resources include an unsecured revolving credit facility under the Credit Agreement referred to below and an accounts receivable financing program. Periodically, we may also raise capital through common stock and debt financings in the public or private markets. We continually evaluate various financing arrangements, including the issuance of common stock or debt, which would allow us to improve our liquidity position and finance future growth on commercially reasonable terms. Our continuing ability to borrow from our lenders and issue debt and equity securities to the public and private markets in the future may be negatively affected by a number of factors, including the overall health of the credit markets, general economic conditions, airline industry conditions, geo-political events, our debt service obligations, and our operating performance.
Previous wording
At November 30, 2024, our liquidity and capital resources included working capital of $939.7 million inclusive of cash of $61.7 million. We expect that our cash on hand, coupled with future cash flows from operations and other available sources of liquidity discussed below, will provide ample liquidity to enable us to meet our cash requirements for at least the next 12 months and foreseeable future thereafter.
Current wording
At February 28, 2025, our liquidity and capital resources included working capital of $989.6 million inclusive of cash of $84.4 million. We expect that our cash on hand, coupled with future cash flows from operations and other available sources of liquidity discussed below, will provide ample liquidity to enable us to meet our cash requirements for at least the next 12 months and foreseeable future thereafter.
Previous wording
At November 30, 2024, borrowings outstanding under the Amended Revolving Credit Facility were $447.0 million and there were approximately $9.7 million of outstanding letters of credit, which reduced the availability under this facility to $368.3 million. There are no other terms or covenants limiting the availability of the Amended Revolving Credit Facility. As of November 30, 2024, we also had other financing arrangements that did not limit availability on our Amended Revolving Credit Facility, including foreign lines of credit of $9.4 million.
Current wording
At February 28, 2025, borrowings outstanding under the Amended Revolving Credit Facility were $482.0 million and there were approximately $7.8 million of outstanding letters of credit, which reduced the availability under this facility to $335.2 million. There are no other terms or covenants limiting the availability of the Amended Revolving Credit Facility. As of February 28, 2025, we also had other financing arrangements that did not limit availability on our Amended Revolving Credit Facility, including foreign lines of credit of $9.2 million.
Previous wording
We have no retained interests in the sold receivables, other than limited recourse obligations in certain circumstances, and only perform collection and administrative functions for the Purchaser. We account for these receivable transfers as sales under Accounting Standards Codification 860,Transfers and Servicing, and de-recognize the sold receivables from our Condensed Consolidated Balance Sheet. At November 30, 2024, we had utilized $12.7 million which reduced the availability under the Purchase Agreement to $137.3 million.
Current wording
We have no retained interests in the sold receivables, other than limited recourse obligations in certain circumstances, and only perform collection and administrative functions for the Purchaser. We account for these receivable transfers as sales under Accounting
Previous wording
We currently expect full payment from the customer of all amounts due under the terminated agreement and all other agreements and do not believe a reserve for credit loss is warranted. Our Condensed Consolidated Balance Sheet as of November 30, 2024 included accounts receivable of $15.1 million, including $7.3 million past due, and contract assets of $13.3 million related to this customer.
Current wording
We currently expect full payment from the customer of all amounts due under the terminated agreement and all other agreements and do not believe a reserve for credit loss is warranted. Our Condensed Consolidated Balance Sheet as of February 28, 2025 included accounts receivable of $14.9 million, including $7.8 million past due, and contract assets of $10.0 million related to this customer.
Previous wording
Net cash used in investing activities was $13.2 million in the six-month period ended November 30, 2024 compared to $20.3 million in the prior year period. The decrease in cash used in investing activities from the prior year of $7.1 million was primarily related to the favorable resolution of post-closing, purchase price adjustments of $2.9 million for the Product Support business acquisition in the current year period. In addition, we received $2.2 million of proceeds from the exit of our Indian joint venture in the current year period.
Current wording
Net cash used in investing activities was $16.9 million in the nine-month period ended February 28, 2025 compared to $26.8 million in the prior year period. The decrease in cash used in investing activities from the prior year of $9.9 million was primarily related to the sale of a building with proceeds of $4.7 million and the favorable resolution of post-closing, purchase price adjustments of $2.9 million for the Product Support business acquisition with both occurring in the current year period. In addition, we received $2.2 million of proceeds from the exit of our Indian joint venture in the current year period.
Previous wording
Net cash used in financing activities was $3.8 million in the six-month period ended November 30, 2024 compared to cash provided of $15.3 million in the prior year period. The increase in cash used in financing activities over the prior year of $19.1 million was primarily related to less stock option exercises in the current year period.
Current wording
Net cash provided by financing activities was $37.0 million in the nine-month period ended February 28, 2025 compared to $9.5 million in the prior year period. The increase in cash provided by financing activities over the prior year of $27.5 million was primarily related to higher borrowings on our Revolving Credit Facility in the current year period.
Previous wording
We make a number of significant estimates, assumptions and judgments in the preparation of our financial statements. SeeManagement’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended May 31, 2024 for a discussion of our critical accounting policies. There have been no significant changes to the application of our critical accounting policies during the second quarter of fiscal 2025.
Current wording
We make a number of significant estimates, assumptions and judgments in the preparation of our financial statements. SeeManagement’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended May 31, 2024 for a discussion of our critical accounting policies. There have been no significant changes to the application of our critical accounting policies during the third quarter of fiscal 2025.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Standards Codification 860,Transfers and Servicing, and de-recognize the sold receivables from our Condensed Consolidated Balance Sheet. At February 28, 2025, we had utilized $13.4 million which reduced the availability under the Purchase Agreement to $136.6 million.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
Selling, general and administrative expenses increased $67.4 million, or 102.6%, over the prior year quarter primarily due to increased costs of $56.6 million related to the previously disclosed FCPA investigations.
Previous report — wording carried elsewhere
Our income tax expense was $8.1 million in the second quarter of fiscal 2025 while our loss before income taxes was $(22.5) million. The majority of the FCPA settlement charge is nondeductible for income tax purposes resulting in no income tax benefit.
Previous report — wording carried elsewhere
affected by a number of factors, including the overall health of the credit markets, general economic conditions, airline industry conditions, geo-political events, our debt service obligations, and our operating performance.