AAR Corp.

Hello, and welcome to AAR Corp. Fourth Quarter Fiscal Year 2026 Earnings Conference Call. At this time, all participants are on 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 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. I would now like to hand the conference over to Chris Tillett, Vice President of Investor Relations. You may begin.

Good afternoon, everyone, and welcome to AAR's fiscal year 2026 fourth quarter earnings conference call. We're joined today by John Holmes, Chairman, President, and Chief Executive Officer, and Dylan Wolin, Chief Financial Officer. The presentation we are sharing today as part of this webcast can be found under the investor section on our corporate website. Comments made during the call will include forward-looking statements as defined in the Private Security 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, 2025. 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. Reconciliations of these non-GAAP measures to the most comparable GAAP measures are set forth in the company's earnings release and slides. At this time, I would like to turn the call over to John Holmes.

Great. Thank you, Chris. And welcome, everybody, to our fourth quarter fiscal year 2026 earnings conference call. I'll begin with key messages on slide three. First, our momentum continued with another strong set of results in the quarter, demonstrating how our connected platform approach to parts, repair, and software is delivering higher, more profitable growth. Second, we delivered 26% growth in adjusted sales, 27% growth in adjusted EBITDA, and 32% growth in adjusted earnings per share for the period. The adjusted sales increase included 13% organic adjusted sales growth, led by 19% organic growth in our new parts distribution activities and significant growth at TRACS. Notably, our adjusted EBITDA margin in the quarter, excluding legacy commercial program segments, was 13%, already demonstrating our ability to achieve the three-year range provided at our Investor Day event held in May. While progress will not be linear, this quarter's results underscores the high degree of confidence we have that we will ultimately be able to achieve or exceed the high end of our range as we continue to execute on our strategy. For the full year, the adjusted EBITDA margin excluding commercial programs was 12.7%. Third, we continue to expect double digit sales growth and further margin expansion as we execute on our plan. Finally, our strong cash flow in the quarter helped us further reduce our net leverage. We continue to carefully manage our balance sheet in order to support our disciplined approach to capital allocation and Preserve Financial Flexibility. Looking at slide four, total sales in the quarter were a record 928 million and grew 26% year over year, including 13% organic growth. We drove revenue growth in each of our four key parts, repair and software activities in the period. Sales to commercial customers were up 31% while sales to government customers were up 5% over the same period last year. 73% of our sales were to commercial customers and the remaining 27% were to government customers during the quarter. Adjusted EBITDA in the quarter increased 27% year-over-year to $116 million and adjusted EBITDA margin increased from 12.4% to 12.5%. Margin expansion in the quarter was driven by growth in new parts distribution and continued mixed shift in government programs. We continue to expand EBITDA margins despite the year-over-year comparable impact of a one-time gain in used serviceable material in the prior year. Also, as we mentioned in detail last quarter, the integration of HACO Americas is tracking ahead of schedule and slightly dilutive to near-term margins. Last quarter, the impact of HACO was roughly 70 basis points, which we cited as the low, and this quarter the impact was roughly 40 basis points. Adjusted diluted EPS was up 32% year-over-year to $1.53 per share, driven by our strong operational performance. Lastly, we had strong cash flow generation with adjusted cash from operations of $58 million in the first quarter or $94 million for the full year. On slide five, you will see the results for full year fiscal 2026. We had growth across all key performance metrics this year, demonstrating our discipline execution and the power of our parts repair and software platform. I'm extremely proud of our performance this year as we hit a record high on sales, adjusted EBITDA, and adjusted EPS. We also closed on four separate acquisitions in 2026 and have been successfully executed on complicated integrations that involve site consolidation, workforce repositioning, and detailed customer coordination. These achievements are a testament to the dedication of our team and the effectiveness of our growth strategy. For the year, adjusted sales were up 20% to 3.3 billion, which included 14% organic adjusted sales growth. Adjusted EBITDA grew 24% for the full year, while margins were up 30 basis points to 12.1% or 12.7% excluding our legacy commercial program segment. Adjusted EPS of $5.05 was up 29% marking our fifth consecutive year of mid-teens or greater adjusted EPS growth. Turning to slide six, we continue to execute on our core strategic objectives. We signed another exclusive agreement with Woodward in the quarter, distribution agreement with Woodward in the quarter to provide distribution for high-demand parts for the LEAP, Gen-X, and CF-34 engines. Our relationship with Woodward began with defense distribution, and we are excited to now extend our support into commercial distribution. We continue to make progress on our airframe MRO expansions, with Oklahoma City completed in March and our Miami facility that will come online after this summer. We also continue to make progress on our strategy to grow our component MRO activity. In this quarter, we won multiple new awards with leading airlines, which drove double-digit organic sales growth for the quarter. In April, we launched Airvoyant, our AI-driven procurement solution for airlines and MROs. This new software is entering beta testing with our launch partners, and we are encouraged by the broad interest this solution is generating. We are in the process of rolling out our paperless hangar technology at our Oklahoma City and Greensboro facilities. When complete, this will result in roughly 66% of our airframe MRO capacity using our paperless hangar technology. In March, we rewarded a follow-on contract for $305 million with the U.S. Navy and Marine Corps to provide contractor logistics support for their C-40 fleet, demonstrating once again our ability to bring commercial best practices to government customers. As mentioned previously, the integration of the HACO Americas acquisition is pacing ahead of schedule and we expect the acquisition to reach margins consistent with our other airframe MRO sites in the second half of fiscal 2027. In software of note, TRAX continues to expand its relationship with Delta and has now reached phase two of its implementation. Today, more than 10,000 professionals at Delta are using Trex. Lastly, we closed the previously announced acquisition of aircraft reconfig technologies in April, bringing in-house certification capabilities and proprietary engineering solutions into our portfolio. With that, I'll turn it over to Dylan to discuss the results in more detail.