Document and Entity Information
Document and Entity Information | 6 Months Ended |
Nov. 30, 2015shares | |
Document and Entity Information | |
Entity Registrant Name | AAR CORP |
Entity Central Index Key | 1,750 |
Document Type | 10-Q |
Document Period End Date | Nov. 30, 2015 |
Amendment Flag | false |
Current Fiscal Year End Date | --05-31 |
Entity Current Reporting Status | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Common Stock, Shares Outstanding | 35,043,625 |
Document Fiscal Year Focus | 2,016 |
Document Fiscal Period Focus | Q2 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Nov. 30, 2015 | May. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 62.8 | $ 54.7 |
Accounts receivable, less allowances of $4.7 and $5.8, respectively | 252.6 | 229 |
Inventories | 462.1 | 456 |
Rotable spares and equipment on or available for short-term lease | 115.7 | 110.7 |
Assets of discontinued operations | 7.9 | 17 |
Deposits, prepaids and other | 36.8 | 28.4 |
Deferred tax assets | 58.3 | 58.3 |
Total current assets | 996.2 | 954.1 |
Property, plant and equipment, net of accumulated depreciation of $420.7 and $398.5, respectively | 205.1 | 214.8 |
Other assets: | ||
Goodwill | 123.1 | 123.5 |
Intangible assets, net of accumulated amortization of $24.5 and $22.5, respectively | 34.8 | 36.7 |
Equipment on or available for long-term lease | 80.7 | 80.2 |
Investment in joint ventures | 18 | 20.5 |
Other | 76.7 | 85.2 |
Total other assets | 333.3 | 346.1 |
Total assets | 1,534.6 | 1,515 |
Current liabilities: | ||
Current maturities of long-term debt | 35.3 | 69 |
Accounts and trade notes payable | 154.7 | 142.3 |
Accrued liabilities | 173.4 | 200.7 |
Total current liabilities | 363.4 | 412 |
Long-term debt, less current maturities | 135 | 85 |
Deferred tax liabilities | 104.1 | 104.6 |
Other liabilities and deferred income | 69.6 | 68.3 |
Total noncurrent liabilities | $ 308.7 | $ 257.9 |
Equity: | ||
Preferred stock, $1.00 par value, authorized 250,000 shares; none issued | ||
Common stock, $1.00 par value, authorized 100,000,000 shares; issued 45,039,798 and 44,895,934 shares at cost, respectively | $ 45 | $ 44.9 |
Capital surplus | 445.7 | 442.6 |
Retained earnings | 670 | 644.3 |
Treasury stock, 9,996,173 and 9,473,058 shares at cost, respectively | (259.3) | (246.3) |
Accumulated other comprehensive loss | (38.9) | (40.4) |
Total equity | 862.5 | 845.1 |
Total liabilities and equity | $ 1,534.6 | $ 1,515 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Nov. 30, 2015 | May. 31, 2015 |
Condensed Consolidated Balance Sheets | ||
Accounts receivable, allowances (in dollars) | $ 4.7 | $ 5.8 |
Property, plant and equipment, accumulated depreciation (in dollars) | 420.7 | 398.5 |
Intangible assets, accumulated amortization (in dollars) | $ 24.5 | $ 22.5 |
Preferred stock, par value (in dollars per share) | $ 1 | $ 1 |
Preferred stock, authorized shares | 250,000 | 250,000 |
Preferred stock, issued shares | 0 | 0 |
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, authorized shares | 100,000,000 | 100,000,000 |
Common stock, issued shares | 45,039,798 | 44,895,934 |
Treasury stock, shares | 9,996,173 | 9,473,058 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Nov. 30, 2015 | Nov. 30, 2014 | Nov. 30, 2015 | Nov. 30, 2014 | |
Sales: | ||||
Sales from products | $ 237.1 | $ 221.7 | $ 441.1 | $ 443 |
Sales from services | 186.7 | 181.6 | 360.5 | 355.4 |
Total sales | 423.8 | 403.3 | 801.6 | 798.4 |
Costs and operating expenses: | ||||
Cost of products | 201 | 189.8 | 370.8 | 384.1 |
Cost of services | 162.9 | 146.3 | 316.4 | 284.7 |
Selling, general and administrative | 42.5 | 40.1 | 81.9 | 78.6 |
Total costs and operating expenses | 406.4 | 376.2 | 769.1 | 747.4 |
Earnings (Loss) from joint ventures | (0.1) | 0.6 | (0.4) | 1.2 |
Operating income | 17.3 | 27.7 | 32.1 | 52.2 |
Loss on extinguishment of debt | (0.1) | (0.4) | ||
Interest expense | (1.5) | (6.6) | (3.5) | (13) |
Interest income | 0.1 | 0.1 | 0.2 | |
Income from continuing operations before provision for income taxes | 15.7 | 21.2 | 28.3 | 39.4 |
Provision for income taxes | 5.3 | 7.3 | 9.7 | 13.7 |
Income from continuing operations attributable to AAR | 10.4 | 13.9 | 18.6 | 25.7 |
Discontinued operations: | ||||
Operating income (loss) | (3.6) | 1.3 | (8.5) | 4.6 |
Gain from contingent consideration | 27.7 | |||
Provision for income taxes (benefit) | (1.2) | 6.9 | 0.6 | |
Income (Loss) from discontinued operations | (2.4) | 1.3 | 12.3 | 4 |
Income attributable to noncontrolling interest from discontinued operations | 0.1 | |||
Income (Loss) from discontinued operations attributable to AAR | (2.4) | 1.3 | 12.3 | 3.9 |
Net income attributable to AAR | $ 8 | $ 15.2 | $ 30.9 | $ 29.6 |
Earnings (Loss) per share - basic: | ||||
Earnings from continuing operations | $ 0.30 | $ 0.35 | $ 0.53 | $ 0.65 |
Earnings (Loss) from discontinued operations | (0.07) | 0.03 | 0.36 | 0.10 |
Earnings per share - basic | 0.23 | 0.38 | 0.89 | 0.75 |
Earnings (Loss) per share - diluted: | ||||
Earnings from continuing operations | 0.30 | 0.35 | 0.53 | 0.65 |
Earnings (Loss) from discontinued operations | (0.07) | 0.03 | 0.36 | 0.10 |
Earnings per share - diluted | $ 0.23 | $ 0.38 | $ 0.89 | $ 0.75 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Nov. 30, 2015 | Nov. 30, 2014 | Nov. 30, 2015 | Nov. 30, 2014 | |
Condensed Consolidated Statements of Comprehensive Income | ||||
Net income attributable to AAR and noncontrolling interest | $ 8 | $ 15.2 | $ 30.9 | $ 29.7 |
Other comprehensive income (loss), net of tax expense (benefit): | ||||
Currency translation adjustments, net of tax of $0 and $0.6 for the three month ended November 30, 2015 and 2014, respectively, and $0 and $1.0 for the six months ended November 30, 2015 and 2014, respectively. | 0.8 | (14.8) | 1 | (23.8) |
Unrealized gain (loss) on derivative instruments: | ||||
Unrealized gain (loss) arising during period, net of tax of $0 and $0 for the three months ended November 30, 2015 and 2014, respectively, and $0 and $0.2 for the six months ended November 30, 2015 and 2014, respectively | (0.1) | 0.2 | ||
Pension and other post-retirement plans: | ||||
Amortization of actuarial loss and prior service cost included in net income, net of tax of $0.1 and $0 for the three months ended November 30, 2015 and 2014, respectively, and $0.2 and $0.1 for the six months ended November 30, 2015 and 2014 respectively | 0.3 | 0.5 | 0.1 | |
Other comprehensive income (loss), net of tax | 1.1 | (14.9) | 1.5 | (23.5) |
Comprehensive income, net of tax | 9.1 | 0.3 | 32.4 | 6.2 |
Comprehensive income related to noncontrolling interest | (0.1) | |||
Comprehensive income attributable to AAR | $ 9.1 | $ 0.3 | $ 32.4 | $ 6.1 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Nov. 30, 2015 | Nov. 30, 2014 | Nov. 30, 2015 | Nov. 30, 2014 | |
Condensed Consolidated Statements of Comprehensive Income | ||||
Currency translation adjustments, tax | $ 0 | $ 0.6 | $ 0 | $ 1 |
Unrealized gain (loss) arising during period, tax | 0 | 0 | 0 | 0.2 |
Amortization of actuarial loss and prior service cost included in net income, tax | $ 0.1 | $ 0 | $ 0.2 | $ 0.1 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 6 Months Ended | |
Nov. 30, 2015 | Nov. 30, 2014 | |
Cash flows provided from (used in) operating activities: | ||
Net income attributable to AAR and noncontrolling interest | $ 30.9 | $ 29.7 |
Less: Income from discontinued operations | (12.3) | (4) |
Income from continuing operations attributable to AAR | 18.6 | 25.7 |
Adjustments to reconcile net income to net cash provided from (used in) operating activities: | ||
Depreciation and intangible amortization | 25 | 27.3 |
Amortization of stock-based compensation | 3.9 | 4.1 |
Amortization of debt discount | 1 | 1.4 |
Amortization of overhaul costs | 9.9 | 10.2 |
Deferred tax provision (benefit) | (2) | 9.3 |
Loss on extinguishment of debt | 0.4 | |
Loss (Earnings) from joint ventures | 0.4 | (1.2) |
Changes in certain assets and liabilities: | ||
Accounts receivable | (25) | (30) |
Inventories | (25.5) | (31.1) |
Rotable spares and equipment on or available for short-term lease | (4.9) | (2.4) |
Equipment on or available for long-term lease | (5.1) | (13.4) |
Accounts and trade notes payable | 12.1 | 38.5 |
Accrued and other liabilities | (15.9) | (0.6) |
Other, primarily program and overhaul costs | (10.6) | 4.5 |
Net cash provided from (used in) operating activities - continuing operations | (17.7) | 42.3 |
Net cash provided from (used in) operating activities -discontinued operations | 1.8 | (11.3) |
Net cash provided from (used in) operating activities | (15.9) | 31 |
Cash flows provided from (used in) investing activities: | ||
Property, plant and equipment expenditures | (30.6) | (14.5) |
Proceeds from sale-leaseback | 19.2 | |
Payments for acquisitions | (1) | |
Proceeds from asset disposals | 6.5 | 1.2 |
Investment in aircraft joint ventures | (1.4) | |
Proceeds from aircraft joint ventures | 2.5 | |
Other | (0.1) | (0.5) |
Net cash used in investing activities - continuing operations | (3.9) | (14.8) |
Net cash provided from (used in) investing activities - discontinued operations | 27.1 | (2.5) |
Net cash provided from (used in) investing activities | 23.2 | (17.3) |
Cash flows provided from (used in) financing activities: | ||
Short-term borrowings (repayments), net | 55 | 40 |
Reduction in long-term borrowings | (39.9) | (39.5) |
Reduction in capital lease obligations | (1.5) | |
Cash dividends | (5.2) | (6) |
Purchase of treasury stock | (10.1) | (1.7) |
Stock option exercises | 1.5 | 0.3 |
Other | (0.4) | 0.4 |
Net cash provided from (used in) financing activities -continuing operations | 0.9 | (8) |
Net cash used in financing activities - discontinued operations | (0.6) | |
Net cash provided from (used in) financing activities | 0.9 | (8.6) |
Effect of exchange rate changes on cash | (0.1) | (1.7) |
Increase in cash and cash equivalents | 8.1 | 3.4 |
Cash and cash equivalents, beginning of period | 54.7 | 89.2 |
Cash and cash equivalents, end of period | $ 62.8 | $ 92.6 |
Condensed Consolidated Stateme8
Condensed Consolidated Statements of Changes in Equity - 6 months ended Nov. 30, 2015 - USD ($) $ in Millions | Common Stock | Capital Surplus | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Total |
Balance at May. 31, 2015 | $ 44.9 | $ 442.6 | $ 644.3 | $ (246.3) | $ (40.4) | $ 845.1 |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 30.9 | 30.9 | ||||
Cash dividends | (5.2) | (5.2) | ||||
Stock option activity | 1.2 | 1.8 | 3 | |||
Restricted stock activity | 0.1 | 2.1 | (4.7) | (2.5) | ||
Repurchase of shares | (10.1) | (10.1) | ||||
Equity portion of bond repurchase | (0.2) | (0.2) | ||||
Other comprehensive income, net of tax | 1.5 | 1.5 | ||||
Balance at Nov. 30, 2015 | $ 45 | $ 445.7 | $ 670 | $ (259.3) | $ (38.9) | $ 862.5 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Nov. 30, 2015 | |
Basis of Presentation | |
Basis of Presentation | Note 1 — Basis of Presentation AAR CORP. and its subsidiaries are referred to herein collectively as “AAR,” “Company,” “we,” “us,” and “our,” unless the context indicates otherwise. The accompanying Condensed Consolidated Financial Statements include the accounts of AAR and its subsidiaries after elimination of intercompany accounts and transactions. We have prepared these statements without audit, pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). The Condensed Consolidated Balance Sheet as of May 31, 2015 has been derived from audited financial statements. To prepare the financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”), management has made a number of estimates and assumptions relating to the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities. Actual results could differ from those estimates. Certain information and note disclosures, normally included in comprehensive financial statements prepared in accordance with GAAP, have been condensed or omitted pursuant to such rules and regulations of the SEC. These Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in our latest annual report on Form 10-K. In the opinion of management, the condensed consolidated financial statements reflect all adjustments (which consist only of normal recurring adjustments) necessary to present fairly the condensed consolidated financial position of AAR CORP. and its subsidiaries as of November 30, 2015, the Condensed Consolidated Statements of Income and the Condensed Consolidated Statements of Comprehensive Income for the three- and six-month periods ended November 30, 2015 and 2014, the Condensed Consolidated Statements of Cash Flows for the six-month periods ended November 30, 2015 and 2014, and the Condensed Consolidated Statement of Changes in Equity for the six-month period ended November 30, 2015. The results of operations for such interim periods are not necessarily indicative of the results for the full year. New Accounting Pronouncements In April 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity which requires that a disposal representing a strategic shift that has or will have a major effect on an entity’s financial results or a business activity classified as held for sale should be reported as discontinued operations. This ASU also expands the disclosure requirements for discontinued operations and adds new disclosures for individually significant dispositions that do not qualify as discontinued operations. The Company adopted this guidance on June 1, 2015 which resulted in expanded disclosures related to the income statement and cash flow activities of our discontinued operations. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers , which provides guidance for revenue recognition. This ASU affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of non-financial assets. This ASU will supersede the revenue recognition requirements in ASC 605, Revenue Recognition , and most industry-specific guidance. This ASU also supersedes certain cost guidance included in Subtopic 605-35, Revenue Recognition-Construction-Type and Production-Type Contracts . In August 2015, the FASB issued ASU No. 2015-14 which deferred the effective date of the new standard by one year which will make the new standard effective for us beginning June 1, 2018. We are currently evaluating the impact of the adoption of this new standard on our consolidated financial statements. In April 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs . This ASU amends existing guidance to require the presentation of debt issuance costs in the balance sheet as a deduction from the carrying amount of the related debt liability instead of a deferred charge. This new standard will be effective for us beginning June 1, 2016 with early adoption permitted. We are currently evaluating the impact of the adoption of this new standard on our consolidated financial statements. In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes . This ASU amends existing guidance to require the presentation of deferred tax liabilities and assets as noncurrent within a classified statement of financial position. Adoption of this new standard may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. This new standard will be effective for us beginning June 1, 2017 with early adoption permitted. We are currently evaluating the impact of the adoption of this new standard on our consolidated financial statements. |
Discontinued Operations
Discontinued Operations | 6 Months Ended |
Nov. 30, 2015 | |
Discontinued operations: | |
Discontinued Operations | Note 2 — Discontinued Operations On March 26, 2015, we completed the sale of our Telair Cargo Group to TransDigm, Inc. The Telair Cargo Group was comprised of Telair International, Telair US, and Nordisk Aviation Products. Cash received at closing in the fourth quarter of fiscal 2015 before fees and expenses was $705 million. The sale also allowed for contingent consideration of up to $35 million based on the occurrence of certain post-closing events related to the A400M cargo system. We recognized a pre-tax gain on the sale (net of transaction expenses and fees) of $198.6 million in the fourth quarter of fiscal 2015. In the first quarter of fiscal 2016, we recognized a gain of $27.7 million net of expenses representing the resolution of the contingent consideration related to the A400M cargo system. During fiscal 2015, we also announced our intention to sell our Precision Systems Manufacturing (“PSM”) business comprised of our metal and composite machined and fabricated parts manufacturing operations. We recognized impairment charges of $57.5 million during fiscal 2015 to reduce the carrying value of the PSM business’s net assets to their expected value at the time of sale. Telair Cargo Group and PSM are reported as discontinued operations in the Condensed Consolidated Statements of Income for all periods presented. Interest expense allocated to discontinued operations was $0 million and $2.7 million during the three months ended November 30, 2015 and 2014, respectively, and $0 million and $5.6 million during the six months ended November 30, 2015 and 2014, respectively. No amounts for general corporate overhead were allocated to discontinued operations. Liabilities of discontinued operations of $4.5 million and $5.4 million at November 30, 2015 and May 31, 2015, respectively, were classified as Accrued Liabilities on the Condensed Consolidated Balance Sheet. Operating income (loss) from discontinued operations was comprised of the following: Three Months Ended Six Months Ended November 30, November 30, 2015 2014 2015 2014 Sales $ $ $ $ Cost of sales ) ) ) ) Selling, general and administrative expenses ) ) ) ) Interest expense, net — ) — ) Operating income (loss) from discontinued operations $ ) $ $ ) $ |
Revenue Recognition
Revenue Recognition | 6 Months Ended |
Nov. 30, 2015 | |
Revenue Recognition | |
Revenue Recognition | Note 3 — Revenue Recognition Sales and related cost of sales for product sales are recognized upon shipment of the product to the customer. Our standard terms and conditions provide that title passes to the customer when the product is shipped to the customer. Sales of certain defense products are recognized upon customer acceptance, which includes transfer of title. Under the majority of our expeditionary airlift services contracts, we are paid and record as revenue a fixed daily amount per aircraft for each day an aircraft is available to perform airlift services. In addition, we are paid and record as revenue an amount which is based on number of hours flown. Sales from services and the related cost of services are generally recognized when customer-owned material is shipped back to the customer. We have adopted this accounting policy because at the time the customer-owned material is shipped back to the customer; all services related to that material are complete as our service agreements generally do not require us to provide services at customer sites. Furthermore, serviced units are typically shipped to the customer immediately upon completion of the related services. Sales and related cost of sales for certain large airframe maintenance contracts and performance-based logistics programs are recognized by the percentage of completion method, based on the relationship of costs incurred to date to the estimated total costs. Lease revenues are recognized as earned. Income from monthly or quarterly rental payments is recorded in the pertinent period according to the lease agreement. However, for leases that provide variable rents, we recognize lease income on a straight-line basis. In addition to a monthly lease rate, some engine leases require an additional rental amount based on the number of hours the engine is used in a particular month. Lease income associated with these contingent rentals is recorded in the period in which actual usage is reported to us by the lessee, which is normally the month following the actual usage. Certain supply chain management programs we provide to our customers contain multiple elements or deliverables, such as program and warehouse management, parts distribution, and maintenance and repair services. We recognize revenue for each element or deliverable that can be identified as a separate unit of accounting at the time of delivery based upon the relative fair value of the products and services. Included in accounts receivable as of November 30, 2015 and May 31, 2015, are $29.7 million and $21.1 million, respectively, of unbilled accounts receivable related to a defense-related supply program. These unbilled accounts receivable relate to costs we have incurred on parts that were requested and accepted by our customer to support the program. These costs have not been billed by us because the customer has not issued the final paperwork necessary to allow for billing. |
Accounting for Stock-Based Comp
Accounting for Stock-Based Compensation | 6 Months Ended |
Nov. 30, 2015 | |
Accounting for Stock-Based Compensation | |
Accounting for Stock-Based Compensation | Note 4 — Accounting for Stock-Based Compensation Restricted Stock In August 2015, as part of our annual long-term stock incentive compensation, we granted 109,269 shares of performance-based restricted stock and 28,069 shares of time-based restricted stock to eligible employees. The grant date fair value per share for both grants was $26.62. In June 2015, we also granted 45,000 shares of time-based restricted stock to members of the Board of Directors with a grant date fair value per share of $29.54. Expense charged to operations for restricted stock was $1.0 million and $1.4 million during the three months ended November 30, 2015 and 2014, respectively, and $2.2 million and $2.7 million during the six months ended November 30, 2015 and 2014, respectively. Stock Options The total intrinsic value of stock options exercised during the six-month periods ended November 30, 2015 and 2014 was $0.9 million and $1.1 million, respectively. Expense charged to operations for stock options was $0.9 million and $0.7 million during the three months ended November 30, 2015 and 2014, respectively, and $1.7 million and $1.4 million during the six months ended November 30, 2015 and 2014, respectively. |
Inventory
Inventory | 6 Months Ended |
Nov. 30, 2015 | |
Inventory | |
Inventory | Note 5 — Inventory The summary of inventories is as follows: November 30, May 31, 2015 2015 Raw materials and parts $ $ Work-in-process Aircraft and engine parts, components and finished goods Aircraft held for sale and related support parts $ $ We had nine aircraft held for sale comprised of five fixed-wing and four rotary-wing aircraft at November 30, 2015 and eleven aircraft held for sale comprised of five fixed-wing and six rotary-wing aircraft at May 31, 2015. During the fourth quarter of fiscal 2015, we entered into a sale-leaseback transaction for our two S-92 rotary-wing aircraft. We received proceeds of $40.3 million in fiscal 2015 which were deferred as a sale-leaseback advance pending completion of the sale transactions. During the three months ended November 30, 2015, we completed the sale of one of the S-92 aircraft. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 6 Months Ended |
Nov. 30, 2015 | |
Supplemental Cash Flow Information | |
Supplemental Cash Flow Information | Note 6 — Supplemental Cash Flow Information Six Months Ended November 30, 2015 2014 Interest paid $ $ Income taxes paid Income tax refunds received |
Financing Arrangements
Financing Arrangements | 6 Months Ended |
Nov. 30, 2015 | |
Financing Arrangements | |
Financing Arrangements | Note 7 — Financing Arrangements A summary of the carrying amount of our debt is as follows: November 30, May 31, 2015 2015 Revolving Credit Facility expiring March 24, 2020 with interest payable monthly $ $ Industrial revenue bond (secured by property, plant and equipment) due August 1, 2018 with interest payable monthly Note payable due March 9, 2017 with floating interest rate, payable semi-annually on June 1 and December 1 Convertible notes payable due March 1, 2016 with interest at 2.25% payable semi-annually on March 1 and September 1 Mortgage loan (secured by Wood Dale, Illinois facility) due August 1, 2015 — Total debt Current maturities of debt ) ) Long-term debt $ $ At November 30, 2015, the carrying value of our variable rate and fixed rate debt had a fair value that approximates the carrying value of $170.3 million. These debt instruments are classified as Level 3 in the fair value hierarchy which is defined as a fair value determined based upon one or more significant unobservable inputs. We are subject to a number of covenants under our financing arrangements, including restrictions that relate to the payment of cash dividends, maintenance of debt-to-EBITDA and interest coverage ratios, sales of assets, additional financing, purchase of our shares and other matters. We are in compliance with all financial and other covenants under our financing arrangements. Convertible Notes During the three-month period ended November 30, 2015, we repurchased $9.7 million of our outstanding 2.25% convertible notes due March 1, 2016 for $9.7 million cash and recognized a $0.1 million loss on the early extinguishment of the notes. During the three-month period ended August 31, 2015, we repurchased $14.4 million of our outstanding 2.25% convertible notes due March 1, 2016 for $14.6 million cash including $0.2 million of accrued interest and recognized a $0.3 million loss on the early extinguishment of the notes. The interest expense associated with convertible notes was as follows: Three Months Ended Six Months Ended November 30, November 30, 2015 2014 2015 2014 Coupon interest $ $ $ $ Amortization of deferred financing fees — — — Amortization of discount Interest expense related to convertible notes $ $ $ $ |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 6 Months Ended |
Nov. 30, 2015 | |
Derivative Instruments and Hedging Activities | |
Derivative Instruments and Hedging Activities | Note 8 — Derivative Instruments and Hedging Activities We are exposed to interest rate risk associated with fluctuations in interest rates on our variable rate debt. Prior to the fourth quarter of fiscal 2015, we utilized two derivative financial instruments to manage our variable interest rate exposure. We utilized a floating-to-fixed interest rate swap and an interest rate cap agreement with each hedging $50.0 million of notional principal interest under our Revolving Credit Facility. In connection with the Amendment of our Revolving Credit Facility, we settled our floating-to-fixed interest rate swap and interest rate cap agreements in the fourth quarter of fiscal 2015 for approximately $2.6 million. Prior to the settlement, the derivative instruments were classified as cash flow hedges with gains and losses on the derivative instruments included in other comprehensive income. We recognized gains and losses on our derivative instruments as an adjustment to interest expense in the period the hedged interest payment affected earnings. |
Earnings per Share
Earnings per Share | 6 Months Ended |
Nov. 30, 2015 | |
Earnings per Share | |
Earnings per Share | Note 9 — Earnings per Share The computation of basic earnings per share is based on the weighted average number of common shares outstanding during each period. The computation of diluted earnings per share is based on the weighted average number of common shares outstanding during the period plus, when their effect is dilutive, incremental shares consisting of shares subject to stock options, shares issuable upon vesting of restricted stock awards, and shares to be issued upon conversion of convertible debt. We used the “if-converted” method in calculating the diluted earnings per share effect of the assumed conversion of our contingently convertible debt because the principal for that issuance can be settled in stock, cash, or a combination thereof. Under the “if converted” method, the after-tax effect of interest expense related to the convertible securities is added back to net income, and the convertible debt is assumed to have been converted into common shares at the beginning of the period. In accordance with ASC 260-10-45, Share-Based Payment Arrangements and Participating Securities and the Two-Class Method , our unvested restricted stock awards are deemed participating securities since these shares are entitled to participate in dividends declared on common shares. During periods of net income, the calculation of earnings per share for common stock excludes income attributable to unvested restricted stock awards from the numerator and excludes the dilutive impact of those shares from the denominator. During periods of net loss, no effect is given to the participating securities because they do not share in the losses of the Company. The following table provides a reconciliation of the computations of basic and diluted earnings per share information for the three- and six-month periods ended November 30, 2015 and 2014. Three Months Ended Six Months Ended November 30, November 30, 2015 2014 2015 2014 Basic EPS : Income from continuing operations $ $ $ $ Less income attributable to participating shares ) ) ) ) Income from continuing operations attributable to common shareholders Income (Loss) from discontinued operations attributable to common shareholders ) Net income attributable to common shareholders for earnings per share — basic $ $ $ $ Diluted EPS: Income from continuing operations $ $ $ $ Less income attributable to participating shares ) ) ) ) Income from continuing operations attributable to common shareholders Income (Loss) from discontinued operations attributable to common shareholders ) Net income attributable to common shareholders for earnings per share — diluted $ $ $ $ Weighted Average Shares: Weighted average common shares outstanding — basic Additional shares from the assumed exercise of stock options Weighted average common shares outstanding — diluted Earnings per share — basic: Earnings from continuing operations $ $ $ $ Earnings (Loss) from discontinued operations ) Earnings per share — basic $ $ $ $ Earnings per share — diluted: Earnings from continuing operations $ $ $ $ Earnings (Loss) from discontinued operations ) Earnings per share — diluted $ $ $ $ At November 30, 2015 and 2014, respectively, stock options to purchase 181,247 shares and 185,163 shares of common stock were outstanding, but were not included in the computation of diluted earnings per share because the exercise price of each of these options was greater than the average market price of the common shares during the interim periods then ended. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 6 Months Ended |
Nov. 30, 2015 | |
Accumulated Other Comprehensive Loss | |
Accumulated Other Comprehensive Loss | Note 10 — Accumulated Other Comprehensive Loss Changes in our accumulated other comprehensive loss (“AOCL”) by component for the three- and six-month periods ended November 30, 2015 and 2014 were as follows: Currency Translation Adjustments Pensions Plans Derivative Instruments Total Balance at September 1, 2015 $ ) $ ) $ — $ ) Other comprehensive income before reclassifications — — Amounts reclassified from AOCL — — Total other comprehensive income — Balance at November 30, 2015 $ ) $ ) $ — $ ) Balance at September 1, 2014 $ ) $ ) $ ) $ ) Other comprehensive loss before reclassifications ) — ) ) Amounts reclassified from AOCL — — — — Total other comprehensive loss ) — ) ) Balance at November 30, 2014 $ ) $ ) $ ) $ ) Currency Translation Adjustments Pensions Plans Derivative Instruments Total Balance at June 1, 2015 $ $ ) $ — $ ) Reclassification within AOCL ) — — Other comprehensive income before reclassifications from AOCL — — Amounts reclassified from AOCL — — Total other comprehensive income — Balance at November 30, 2015 $ ) $ ) $ — $ ) Balance at June 1, 2014 $ $ ) $ ) $ ) Other comprehensive income before reclassifications ) — ) Amounts reclassified from AOCL — — Total other comprehensive income (loss) ) ) Balance at November 30, 2014 $ ) $ ) $ ) $ ) |
Business Segment Information
Business Segment Information | 6 Months Ended |
Nov. 30, 2015 | |
Business Segment Information | |
Business Segment Information | Note 11 — Business Segment Information Consistent with how our chief operating decision making officer (Chief Executive Officer) evaluates performance and the way we are organized internally, we report our activities in two business segments: Aviation Services comprised of supply chain and maintenance, repair and overhaul (“MRO”) activities and Expeditionary Services comprised of airlift and mobility activities. The Aviation Services segment consists of businesses that provide spares and maintenance support for aircraft operated by our commercial and government/defense customers. Sales in the Aviation Services segment are derived from the sale and lease of a wide variety of new, overhauled and repaired engine and airframe parts and components to the commercial aviation and government and defense markets. We provide customized inventory supply chain management, performance based logistics programs, aircraft component repair management services, and aircraft modifications. The segment also includes repair, maintenance and overhaul of aircraft, landing gear and components. We also sell and lease used commercial aircraft (exclusively through joint ventures following the sale of our last two wholly-owned aircraft in the fourth quarter of fiscal 2015). Cost of sales consists principally of the cost of product, direct labor, and overhead. The Expeditionary Services segment consists of businesses that provide products and services supporting the movement of equipment and personnel by the U.S. Department of Defense (“DoD”), foreign governments and non-governmental organizations. Sales in the Expeditionary Services segment are derived from the delivery of airlift services to mostly government and defense customers and the design and manufacture of pallets, shelters, and containers used to support the U.S. military’s requirements for a mobile and agile force. We also provide system integration services for specialized command and control systems. Cost of sales consists principally of aircraft maintenance costs, depreciation, the cost of material to manufacture products, direct labor and overhead. The accounting policies for the segments are the same as those described in Note 1 of Notes to Consolidated Financial Statements included in our annual report on Form 10-K for the year ended May 31, 2015. Our chief operating decision making officer evaluates performance based on the reportable segments and utilizes gross profit as a primary profitability measure. Gross profit is calculated by subtracting cost of sales from sales. The assets and certain expenses related to corporate activities are not allocated to the segments. Our reportable segments are aligned principally around differences in products and services. Selected financial information for each segment is as follows: Three Months Ended Six Months Ended November 30, November 30, 2015 2014 2015 2014 Sales: Aviation Services $ $ $ $ Expeditionary Services $ $ $ $ Three Months Ended Six Months Ended November 30, November 30, 2015 2014 2015 2014 Gross profit: Aviation Services $ $ $ $ Expeditionary Services $ $ $ $ The following table reconciles segment gross profit to consolidated income before provision for income taxes. Three Months Ended Six Months Ended November 30, November 30, 2015 2014 2015 2014 Segment gross profit $ $ $ $ Selling, general and administrative ) ) ) ) Earnings (Loss) from joint ventures ) ) Loss on extinguishment of debt ) — ) — Interest expense ) ) ) ) Interest income — Income before provision for income taxes $ $ $ $ |
Legal Proceedings
Legal Proceedings | 6 Months Ended |
Nov. 30, 2015 | |
Legal Proceedings | |
Legal Proceedings | Note 12 — Legal Proceedings DynCorp International LLC v. AAR Airlift Group, Inc. On September 8, 2015, AAR Airlift Group, Inc. (“AAR Airlift”), a wholly-owned subsidiary of AAR CORP. located in Palm Bay, Florida, was served with a lawsuit filed on September 4, 2015 by DynCorp International LLC (“DynCorp”) in the United States District Court for the Middle District of Florida, Orlando Division. DynCorp’s lawsuit alleges that AAR Airlift misappropriated proprietary DynCorp information, including trade secrets, in connection with the submission of proposals pursuant to a solicitation issued by the Department of State Bureau of International Narcotics and Law Enforcement Affairs, Office of Aviation (“INL/A”) in support of State’s Worldwide Aviation Support Services (“WASS”) program. The lawsuit contains seven counts and seeks unspecified actual and compensatory damages, as well as preliminary and permanent injunctive relief against AAR Airlift’s purported misappropriation of DynCorp information. The Court denied DynCorp’s motion for expedited discovery on September 23, 2015. The Court also denied DynCorp’s motion for a preliminary injunction in its order dated October 9, 2015. Following the issuance of the Court’s denial of its motion for preliminary injunction, DynCorp filed a First Amended Complaint on October 19, 2015. The First Amended Complaint contains substantially the same claims contained in the original complaint and alleges that AAR Airlift misappropriated DynCorp’s trade secrets in connection with the submission of proposals pursuant to the solicitation issued by the INL/A in support of the WASS program. On November 5, 2015, AAR Airlift filed a motion to dismiss the First Amended Complaint, asserting, among other things, that DynCorp failed to adequately state a claim. On November 5, 2015, AAR Airlift also filed a motion to stay discovery in the DynCorp lawsuit, at least until the Court has ruled on AAR Airlift’s motion to dismiss the DynCorp First Amended Complaint. On December 3, 2015, the Court granted AAR’s Airlift’s motion to stay all discovery in the case until 15 days following the Court’s order on AAR Airlift’s motion to dismiss. To date, the Court has not ruled on AAR Airlift’s motion to dismiss the First Amended Complaint. AAR Airlift will continue to defend itself vigorously against DynCorp’s lawsuit and any attempt to invalidate or interfere with AAR Airlift’s lawful participation in the INL/A contract award competition. OIG Investigation The U.S. Department of State received — and referred to its Office of Inspector General (“OIG”) — a May 2015 letter from DynCorp in which DynCorp made substantially the same allegations against AAR Airlift as set forth in both its original complaint and its First Amended Complaint. The OIG is investigating these allegations, and AAR Airlift is cooperating fully in that investigation. |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 6 Months Ended |
Nov. 30, 2015 | |
Discontinued operations: | |
Schedule of Operating income from discontinued operations | Three Months Ended Six Months Ended November 30, November 30, 2015 2014 2015 2014 Sales $ $ $ $ Cost of sales ) ) ) ) Selling, general and administrative expenses ) ) ) ) Interest expense, net — ) — ) Operating income (loss) from discontinued operations $ ) $ $ ) $ |
Inventory (Tables)
Inventory (Tables) | 6 Months Ended |
Nov. 30, 2015 | |
Inventory | |
Summary of inventories | November 30, May 31, 2015 2015 Raw materials and parts $ $ Work-in-process Aircraft and engine parts, components and finished goods Aircraft held for sale and related support parts $ $ |
Supplemental Cash Flow Inform23
Supplemental Cash Flow Information (Tables) | 6 Months Ended |
Nov. 30, 2015 | |
Supplemental Cash Flow Information | |
Schedule of supplemental information on cash flow | Six Months Ended November 30, 2015 2014 Interest paid $ $ Income taxes paid Income tax refunds received |
Financing Arrangements (Tables)
Financing Arrangements (Tables) | 6 Months Ended |
Nov. 30, 2015 | |
Financing Arrangements | |
Summary of carrying amount of debt | November 30, May 31, 2015 2015 Revolving Credit Facility expiring March 24, 2020 with interest payable monthly $ $ Industrial revenue bond (secured by property, plant and equipment) due August 1, 2018 with interest payable monthly Note payable due March 9, 2017 with floating interest rate, payable semi-annually on June 1 and December 1 Convertible notes payable due March 1, 2016 with interest at 2.25% payable semi-annually on March 1 and September 1 Mortgage loan (secured by Wood Dale, Illinois facility) due August 1, 2015 — Total debt Current maturities of debt ) ) Long-term debt $ $ |
Schedule of interest expense associated with the convertible notes | Three Months Ended Six Months Ended November 30, November 30, 2015 2014 2015 2014 Coupon interest $ $ $ $ Amortization of deferred financing fees — — — Amortization of discount Interest expense related to convertible notes $ $ $ $ |
Earnings per Share (Tables)
Earnings per Share (Tables) | 6 Months Ended |
Nov. 30, 2015 | |
Earnings per Share | |
Reconciliation of the computations of basic and diluted earnings per share information | Three Months Ended Six Months Ended November 30, November 30, 2015 2014 2015 2014 Basic EPS : Income from continuing operations $ $ $ $ Less income attributable to participating shares ) ) ) ) Income from continuing operations attributable to common shareholders Income (Loss) from discontinued operations attributable to common shareholders ) Net income attributable to common shareholders for earnings per share — basic $ $ $ $ Diluted EPS: Income from continuing operations $ $ $ $ Less income attributable to participating shares ) ) ) ) Income from continuing operations attributable to common shareholders Income (Loss) from discontinued operations attributable to common shareholders ) Net income attributable to common shareholders for earnings per share — diluted $ $ $ $ Weighted Average Shares: Weighted average common shares outstanding — basic Additional shares from the assumed exercise of stock options Weighted average common shares outstanding — diluted Earnings per share — basic: Earnings from continuing operations $ $ $ $ Earnings (Loss) from discontinued operations ) Earnings per share — basic $ $ $ $ Earnings per share — diluted: Earnings from continuing operations $ $ $ $ Earnings (Loss) from discontinued operations ) Earnings per share — diluted $ $ $ $ |
Accumulated Other Comprehensi26
Accumulated Other Comprehensive Loss (Tables) | 6 Months Ended |
Nov. 30, 2015 | |
Accumulated Other Comprehensive Loss | |
Schedule of changes in accumulated other comprehensive loss ("AOCL") by component | Currency Translation Adjustments Pensions Plans Derivative Instruments Total Balance at September 1, 2015 $ ) $ ) $ — $ ) Other comprehensive income before reclassifications — — Amounts reclassified from AOCL — — Total other comprehensive income — Balance at November 30, 2015 $ ) $ ) $ — $ ) Balance at September 1, 2014 $ ) $ ) $ ) $ ) Other comprehensive loss before reclassifications ) — ) ) Amounts reclassified from AOCL — — — — Total other comprehensive loss ) — ) ) Balance at November 30, 2014 $ ) $ ) $ ) $ ) Currency Translation Adjustments Pensions Plans Derivative Instruments Total Balance at June 1, 2015 $ $ ) $ — $ ) Reclassification within AOCL ) — — Other comprehensive income before reclassifications from AOCL — — Amounts reclassified from AOCL — — Total other comprehensive income — Balance at November 30, 2015 $ ) $ ) $ — $ ) Balance at June 1, 2014 $ $ ) $ ) $ ) Other comprehensive income before reclassifications ) — ) Amounts reclassified from AOCL — — Total other comprehensive income (loss) ) ) Balance at November 30, 2014 $ ) $ ) $ ) $ ) |
Business Segment Information (T
Business Segment Information (Tables) | 6 Months Ended |
Nov. 30, 2015 | |
Business Segment Information | |
Selected financial information for each reportable segment | Three Months Ended Six Months Ended November 30, November 30, 2015 2014 2015 2014 Sales: Aviation Services $ $ $ $ Expeditionary Services $ $ $ $ Three Months Ended Six Months Ended November 30, November 30, 2015 2014 2015 2014 Gross profit: Aviation Services $ $ $ $ Expeditionary Services $ $ $ $ |
Schedule of reconciliation of segment gross profit to income from continuing operations before provision for income taxes | Three Months Ended Six Months Ended November 30, November 30, 2015 2014 2015 2014 Segment gross profit $ $ $ $ Selling, general and administrative ) ) ) ) Earnings (Loss) from joint ventures ) ) Loss on extinguishment of debt ) — ) — Interest expense ) ) ) ) Interest income — Income before provision for income taxes $ $ $ $ |
Discontinued Operations (Detail
Discontinued Operations (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Nov. 30, 2015 | Aug. 31, 2015 | May. 31, 2015 | Nov. 30, 2014 | Nov. 30, 2015 | Nov. 30, 2014 | May. 31, 2015 | |
Discontinued Operations | |||||||
Interest Expense | $ 1.5 | $ 6.6 | $ 3.5 | $ 13 | |||
Operating income from discontinued operations | |||||||
Operating income (loss) from discontinued operations | (3.6) | 1.3 | (8.5) | 4.6 | |||
Telair Cargo Group and PSM | Discontinued Operations, Held-for-sale or Disposed of by Sale | |||||||
Discontinued Operations | |||||||
Interest Expense | 0 | 2.7 | 0 | 5.6 | |||
General corporate overhead | 0 | ||||||
Liabilities of discontinued operations | 4.5 | $ 5.4 | 4.5 | $ 5.4 | |||
Operating income from discontinued operations | |||||||
Sales | 10.3 | 86.7 | 21.7 | 160.8 | |||
Costs of Sales | (12.3) | (75.4) | (27.1) | (136.6) | |||
Selling, general and administrative expenses | (1.6) | (7) | (3.1) | (13.4) | |||
Interest expense, net | (3) | (6.2) | |||||
Operating income (loss) from discontinued operations | $ (3.6) | $ 1.3 | $ (8.5) | $ 4.6 | |||
Telair Cargo Group | Discontinued Operations, Disposed of by Sale | |||||||
Discontinued Operations | |||||||
Cash consideration received | 705 | ||||||
Pre-tax gain on sale of business (net of transaction expenses and fees) | 198.6 | ||||||
Telair Cargo Group | A400M | Discontinued Operations, Disposed of by Sale | |||||||
Discontinued Operations | |||||||
Gain recognized on sale of business | $ 27.7 | ||||||
Telair Cargo Group | A400M | Maximum | Discontinued Operations, Disposed of by Sale | |||||||
Discontinued Operations | |||||||
Contingent consideration | $ 35 | ||||||
Precision Systems Manufacturing | Discontinued Operations, Held-for-sale | |||||||
Discontinued Operations | |||||||
Recognized impairment charge | $ 57.5 |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) $ in Millions | Nov. 30, 2015 | May. 31, 2015 |
Revenue Recognition | ||
Unbilled accounts receivable related to KC10 supply agreement | $ 29.7 | $ 21.1 |
Accounting for Stock-Based Co30
Accounting for Stock-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Aug. 31, 2015 | Jun. 30, 2015 | Nov. 30, 2015 | Nov. 30, 2014 | Nov. 30, 2015 | Nov. 30, 2014 | |
Stock options | ||||||
Stock options, additional disclosures | ||||||
Total intrinsic value of stock options exercised | $ 0.9 | $ 1.1 | ||||
Compensation expense | 0.9 | 0.7 | $ 1.7 | $ 1.4 | ||
Restricted stock | ||||||
Stock options, additional disclosures | ||||||
Compensation expense | $ 1 | $ 1.4 | $ 2.2 | $ 2.7 | ||
Performance-based restricted stock | ||||||
Stock options, additional disclosures | ||||||
Granted (in shares) | 109,269 | |||||
Granted (in dollars per share) | $ 26.62 | |||||
Time-based restricted stock | ||||||
Stock options, additional disclosures | ||||||
Granted (in shares) | 28,069 | |||||
Granted (in dollars per share) | $ 26.62 | |||||
Time-based restricted stock | Board of Directors | ||||||
Stock options, additional disclosures | ||||||
Granted (in shares) | 45,000 | |||||
Granted (in dollars per share) | $ 29.54 |
Inventory (Details)
Inventory (Details) $ in Millions | 6 Months Ended | 12 Months Ended |
Nov. 30, 2015USD ($)aircraft | May. 31, 2015USD ($)aircraft | |
Inventory | ||
Raw materials and parts | $ 41.9 | $ 43.1 |
Work-in-process | 18.2 | 18.1 |
Aircraft and engine parts, components and finished goods | 365.3 | 337 |
Aircraft held for sale and related support parts | 36.7 | 57.8 |
Total inventories | $ 462.1 | $ 456 |
Inventory | ||
Number of aircrafts held for sale | aircraft | 9 | 11 |
Proceeds from sale-leaseback advance | $ 19.2 | |
Fixed-wing aircraft | ||
Inventory | ||
Number of aircrafts held for sale | aircraft | 5 | 5 |
Rotary-wing aircraft | ||
Inventory | ||
Number of aircrafts held for sale | aircraft | 4 | 6 |
S-92 rotary-wing aircraft | ||
Inventory | ||
Number of aircrafts involved in sale leaseback transaction | aircraft | 2 | |
Proceeds from sale-leaseback advance | $ 40.3 | |
Number of aircrafts sold | aircraft | 1 |
Supplemental Cash Flow Inform32
Supplemental Cash Flow Information (Details) - USD ($) $ in Millions | 6 Months Ended | |
Nov. 30, 2015 | Nov. 30, 2014 | |
Supplemental Cash Flow Information | ||
Interest paid | $ 2.5 | $ 17.3 |
Income taxes paid | 24 | 8.4 |
Income tax refunds received | $ 1.3 | $ 12.1 |
Financing Arrangements (Details
Financing Arrangements (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Nov. 30, 2015 | Aug. 31, 2015 | Nov. 30, 2014 | Nov. 30, 2015 | Nov. 30, 2014 | May. 31, 2015 | |
Financing Arrangements | ||||||
Total debt | $ 170.3 | $ 170.3 | $ 154 | |||
Current maturities of debt | (35.3) | (35.3) | (69) | |||
Long-term debt | 135 | 135 | 85 | |||
Loss on extinguishment of debt | 0.1 | 0.4 | ||||
Interest expense | ||||||
Amortization of discount | 1 | $ 1.4 | ||||
Revolving Credit Facility expiring March 24, 2020 with interest payable monthly | ||||||
Financing Arrangements | ||||||
Total debt | 105 | 105 | 50 | |||
Industrial revenue bond (secured by property, plant and equipment) | ||||||
Financing Arrangements | ||||||
Total debt | 25 | 25 | 25 | |||
Note payable due March 9, 2017 with floating interest rate, payable semi-annually on June 1 and December 1 | ||||||
Financing Arrangements | ||||||
Total debt | 15 | 15 | $ 20 | |||
Convertible notes payable | ||||||
Interest expense | ||||||
Coupon interest | 0.1 | $ 0.4 | 0.4 | 0.9 | ||
Amortization of deferred financing fees | 0.1 | |||||
Amortization of discount | 0.4 | 0.6 | 1 | 1.3 | ||
Interest expense related to convertible notes | $ 0.5 | $ 1 | $ 1.4 | $ 2.3 | ||
Convertible notes payable due March 1, 2016 with interest at 2.25% payable semi-annually on March 1 and September 1 | ||||||
Financing Arrangements | ||||||
Interest rate (as a percent) | 2.25% | 2.25% | 2.25% | |||
Total debt | $ 25.3 | $ 25.3 | $ 48 | |||
Amount of convertible notes repurchased | 9.7 | $ 14.4 | 9.7 | |||
Cash paid for convertible notes repurchased | 9.7 | 14.6 | 9.7 | |||
Accrued interest | 0.2 | |||||
Loss on extinguishment of debt | 0.1 | $ 0.3 | ||||
Mortgage loan (secured by Wood Dale, Illinois facility) due August 1, 2015 | ||||||
Financing Arrangements | ||||||
Total debt | $ 11 | |||||
Remaining variable rate and fixed rate debt | Significant other unobservable inputs (Level 3) | ||||||
Financing Arrangements | ||||||
Estimated fair value of long-term debt | $ 170.3 | $ 170.3 |
Derivative Instruments and He34
Derivative Instruments and Hedging Activities (Details) $ in Millions | Nov. 30, 2015USD ($)item | May. 31, 2015USD ($) |
Derivative Instruments and Hedging Activities | ||
Number of derivative financial instruments | item | 2 | |
Interest rate cap | Derivatives designated as hedging instruments: | Cash flow hedges | ||
Derivative Instruments and Hedging Activities | ||
Notional amount under revolving credit agreement | $ 50 | |
Interest rate swap | Derivatives designated as hedging instruments: | Cash flow hedges | ||
Derivative Instruments and Hedging Activities | ||
Notional amount under revolving credit agreement | $ 50 | |
Interest Rate Swap and Cap Agreements | Derivatives designated as hedging instruments: | ||
Derivative Instruments and Hedging Activities | ||
Settlement of floating-to-fixed interest rate swap and interest rate cap agreement | $ 2.6 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Nov. 30, 2015 | Nov. 30, 2014 | Nov. 30, 2015 | Nov. 30, 2014 | |
Earnings per Share | ||||
Effect to the participating securities as result of net loss | $ 0 | |||
Basic EPS: | ||||
Income from continuing operations | $ 10.4 | $ 13.9 | 18.6 | $ 25.7 |
Less income attributable to participating shares | (0.1) | (0.3) | (0.2) | (0.5) |
Income from continuing operations attributable to common shareholders | 10.3 | 13.6 | 18.4 | 25.2 |
Income (Loss) from discontinued operations attributable to common shareholders | (2.4) | 1.3 | 12.3 | 3.9 |
Net income attributable to common shareholders for earnings per share - basic | 7.9 | 14.9 | 30.7 | 29.1 |
Diluted EPS: | ||||
Income from continuing operations | 10.4 | 13.9 | 18.6 | 25.7 |
Less income attributable to participating shares | (0.1) | (0.3) | (0.2) | (0.5) |
Income from continuing operations attributable to common shareholders | 10.3 | 13.6 | 18.4 | 25.2 |
Income (Loss) from discontinued operations attributable to common shareholders | (2.4) | 1.3 | 12.3 | 3.9 |
Net income attributable to common shareholders for earnings per share - diluted | $ 7.9 | $ 14.9 | $ 30.7 | $ 29.1 |
Weighted Average Shares: | ||||
Weighted average common shares outstanding - basic | 34,400,000 | 38,700,000 | 34,600,000 | 38,700,000 |
Additional shares from the assumed exercise of stock options | 200,000 | 400,000 | 300,000 | 500,000 |
Weighted average common shares outstanding - diluted | 34,600,000 | 39,100,000 | 34,900,000 | 39,200,000 |
Earnings per share - basic: | ||||
Earnings from continuing operations | $ 0.30 | $ 0.35 | $ 0.53 | $ 0.65 |
Earnings (Loss) from discontinued operations | (0.07) | 0.03 | 0.36 | 0.10 |
Earnings per share - basic | 0.23 | 0.38 | 0.89 | 0.75 |
Earnings per share - diluted: | ||||
Earnings from continuing operations | 0.30 | 0.35 | 0.53 | 0.65 |
Earnings (Loss) from discontinued operations | (0.07) | 0.03 | 0.36 | 0.10 |
Earnings per share - diluted | $ 0.23 | $ 0.38 | $ 0.89 | $ 0.75 |
Antidilutive stock options excluded from the computation of diluted earnings per share (in shares) | 181,247 | 185,163 |
Accumulated Other Comprehensi36
Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Nov. 30, 2015 | Aug. 31, 2015 | Nov. 30, 2014 | Nov. 30, 2015 | Nov. 30, 2014 | |
Accumulated Other Comprehensive Loss | |||||
Accumulated Other Comprehensive Income (Loss), Net of Tax, Beginning Balance | $ (40) | $ (40.4) | $ (37.9) | $ (40.4) | $ (29.3) |
Other comprehensive income (loss) before reclassifications from AOCL | 0.8 | (14.9) | 1 | (23.6) | |
Amounts reclassified from AOCL | 0.3 | 0.5 | 0.1 | ||
Total other comprehensive income (loss) | 1.1 | (14.9) | 1.5 | (23.5) | |
Accumulated Other Comprehensive Income (Loss), Net of Tax, Ending Balance | (38.9) | (40) | (52.8) | (38.9) | (52.8) |
Currency Translation Adjustments | |||||
Accumulated Other Comprehensive Loss | |||||
Accumulated Other Comprehensive Income (Loss), Net of Tax, Beginning Balance | (0.9) | 0.9 | (0.3) | 0.9 | 8.7 |
Reclassification within AOCL | (2) | ||||
Other comprehensive income (loss) before reclassifications from AOCL | 0.8 | (14.8) | 1 | (23.8) | |
Total other comprehensive income (loss) | 0.8 | (14.8) | 1 | (23.8) | |
Accumulated Other Comprehensive Income (Loss), Net of Tax, Ending Balance | (0.1) | (0.9) | (15.1) | (0.1) | (15.1) |
Pensions Plans | |||||
Accumulated Other Comprehensive Loss | |||||
Accumulated Other Comprehensive Income (Loss), Net of Tax, Beginning Balance | (39.1) | (41.3) | (35.3) | (41.3) | (35.4) |
Reclassification within AOCL | 2 | ||||
Amounts reclassified from AOCL | 0.3 | 0.5 | 0.1 | ||
Total other comprehensive income (loss) | 0.3 | 0.5 | 0.1 | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax, Ending Balance | $ (38.8) | $ (39.1) | (35.3) | $ (38.8) | (35.3) |
Derivative Instruments | |||||
Accumulated Other Comprehensive Loss | |||||
Accumulated Other Comprehensive Income (Loss), Net of Tax, Beginning Balance | (2.3) | (2.6) | |||
Other comprehensive income (loss) before reclassifications from AOCL | (0.1) | 0.2 | |||
Total other comprehensive income (loss) | (0.1) | 0.2 | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax, Ending Balance | $ (2.4) | $ (2.4) |
Business Segment Information (D
Business Segment Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Nov. 30, 2015 | Nov. 30, 2014 | Nov. 30, 2015 | Nov. 30, 2014 | |
Business Segment Information | ||||
Sales | $ 423.8 | $ 403.3 | $ 801.6 | $ 798.4 |
Gross Profit | 59.9 | 67.2 | 114.4 | 129.6 |
Aviation Services | ||||
Business Segment Information | ||||
Sales | 359.6 | 325.9 | 675.4 | 637.5 |
Gross Profit | 58.2 | 53.9 | 108.1 | 102.1 |
Expeditionary Services | ||||
Business Segment Information | ||||
Sales | 64.2 | 77.4 | 126.2 | 160.9 |
Gross Profit | $ 1.7 | $ 13.3 | $ 6.3 | $ 27.5 |
Business Segment Information 38
Business Segment Information (Details 2) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Nov. 30, 2015 | Nov. 30, 2014 | Nov. 30, 2015 | Nov. 30, 2014 | |
Reconciliation of segment gross profit to income from continuing operations before provision for income taxes | ||||
Segment gross profit | $ 59.9 | $ 67.2 | $ 114.4 | $ 129.6 |
Selling, general and administrative | (42.5) | (40.1) | (81.9) | (78.6) |
Earnings (Loss) from joint ventures | (0.1) | 0.6 | (0.4) | 1.2 |
Loss on extinguishment of debt | (0.1) | (0.4) | ||
Interest expense | (1.5) | (6.6) | (3.5) | (13) |
Interest income | 0.1 | 0.1 | 0.2 | |
Income from continuing operations before provision for income taxes | $ 15.7 | $ 21.2 | $ 28.3 | $ 39.4 |