AAR Corp.

earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask the question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. I would now like to turn the conference over to management. You may begin.

Good afternoon, everyone, and welcome to AAR's fiscal year 2025 fourth quarter earnings call. We're joined today by John Holmes, chairman, president, and chief executive officer, and Sean Gillen, chief financial officer. The presentation material we are sharing today as part of this webcast can also be found under the investor relations section on our corporate website. Before we begin, I'd like to remind you that the comments made during the call may include forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Accordingly, these statements are no guarantee of future performance. These risks and uncertainties are discussed in the company's earnings release and the risk factor section of the company's annual report on Form 10-K for the fiscal year ended May 31, 2024. In providing the forward-looking statements, the company assumes no obligation to provide updates to reflect future circumstances or anticipated or unanticipated events. Certain non-GAAP financial information will be discussed during the call today. A reconciliation of these non-GAAP measures to the most comparable GAAP measures is set forth in the company's earnings release and slides. A transcript of this conference call will be available shortly after the webcast on AAR's website. At this time, I would like to turn the call over to AAR's Chairman, President, and CEO, John Holmes.

Thank you, and welcome everyone to our fourth quarter fiscal year 2025 earnings call. We are very proud of the record year we just delivered, and as you will see, we are continuing to advance the execution of our strategy. We have accompanying information on the slides I will be referencing as I talk through the details of this release. Turning to slide three, there are five key highlights from the fiscal year 2025 that I would like to cover today. First, we delivered outstanding financial performance in the quarter and the full year. On that note, we are particularly proud of the 14% organic sales growth, which excludes landing gear, that we drove in the quarter. Second, we have continued to refine and optimize our portfolio. We have substantially completed the integration of the product support acquisition and completed the divestiture of our landing gear overhaul business. Third, we are successfully driving above-market growth in our new parts distribution activities. Fourth, our track software solution is capturing new business wins and is delivering results. And fifth, we are continuing to reduce net leverage by both growing adjusted EBITDA and reducing net debt. We ended the quarter at 2.7 times, and absent any M&A, we are on track to meet our leverage target of 2.0 to 2.5 times. Turning to slide four, this is a high level view of our financial results for fiscal year 2025. We delivered record full year results of $2.8 billion, up 20% over the prior year. Adjusted EBITDA margin increased 140 basis points to 11.8% in fiscal 2025, which reflects strong growth across our core segments. We generated record adjusted diluted earnings per share of $3.91 compared to $3.33 last year. We continue to reduce our net leverage and our strong balance sheet along with our disciplined capital allocation strategy have us well positioned for investments that will drive continued growth. Turning now to slide five, I will discuss our strategy execution in more detail. We are executing across our strategic objectives to drive growth through market share capture and new business, improve margin through cost efficiency and synergy realization, increase the intellectual property in our offerings through digital and other investments, and to continue our disciplined portfolio management. The actions we are taking deliver the strong performance we saw in fiscal 2025, and we expect this to continue in 2026. Starting with growth, we announced several new business wins in the quarter. In our parts supply segment, we extended our multi-year agreement with FTIE to exclusively distribute CFM56 engine material to the aviation aftermarket through 2030. We also entered into a supply chain alliance agreement with the U.S. Defense Logistics Agency, which will enable AAR to provide comprehensive new parts distribution services to meet the needs of the DLA. In integrated solution, we established a joint venture with CIRA, and the joint venture was awarded the US Navy's pilot training program on the E6B aircraft. Additionally, we continue to make progress on our Oklahoma City and our Miami MRO, Airframe MRO expansions, which will come online in calendar 2026, adding 15% capacity to our network. These new business wins and expansions demonstrate the strength of our portfolio and the strong demand our customers have for our services. In cost efficiency and synergy realization, we have substantially completed the integration of the product support acquisition. As a reminder, as part of the product support integration, we are exiting our Long Island, New York facility and consolidating that work into our locations in Dallas, Texas and Wellington, Kansas. We transferred the last pieces of equipment and work from New York in Q4 and intend to fully exit the New York facility in our fiscal Q1. We are now in a position to realize the full $10 million of cost synergies which would contribute to further margin expansion. In our digital and IP-enabled offerings, we saw continued strong traction for our TRAX software solution as we announced several new business wins, including our largest win yet with Delta Airlines. TRAX was selected by Delta to modernize Delta TechOps maintenance and engineering systems. TRAX will replace Delta TechOps legacy systems with its EMRO and eMobility solutions. this multi-year implementation will ultimately be the largest of its kind in the maintenance ERP space. This win is a perfect example of our TRAX acquisition thesis, whereby AAR can leverage its customer relationships to open doors for TRAX. Furthermore, this win demonstrates that with AAR's investments, TRAX can scale to support the largest airlines in the world. Finally, as part of our disciplined portfolio management, we completed the divestiture of our landing gear overhaul business. This move generated $48 million in cash and is margin accretive. As previously mentioned, all of this execution delivered excellent results in our fiscal year 2025 with strong double-digit growth across sales, adjusted EBITDA, and adjusted EPS. With that, I will now turn it over to Sean to discuss the results in more detail.