AIR - Earnings call transcript Q4 2019

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Operator

Good afternoon, ladies and gentlemen, and welcome to AAR’s Fiscal 2019 Fourth Quarter Earnings Call.

We are joined today by John Holmes, President and Chief Executive Officer; Sean Gillen, Chief Financial Officer.

Before we begin, I would 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 as noted in our news release and the Risk Factors section of the company’s Form 10-K, for the fiscal year ended May 31, 2018. In providing a forward-looking statement, the company assumes no obligation to provide updates to reflect future circumstances or anticipated or unanticipated events.

At this time, I would like to turn the call over to AAR’s President and CEO, John Holmes.

John Holmes

much afternoon, very you thank and everybody. good Hey, you for us. joining Thank

to to QX pleased are discuss be We results. here our XXXX and full-year

sales share. diluted were to Our from $X.XX continuing full-year from to XX% the billion $X.XX share $X.XX per operations up increased $X.XX per earnings XX% Adjusted per share from billion. for

$XXX In QX, up significantly, grew XX% to million. consolidated sales a record of

$X.XX was per earnings even adjusted growth diluted per a share share continuing $X.XX in to up stronger, operations share. XX% from Our from

had from we again quarter Additionally, cash solid this of as generation million $XX operating we continuing delivered cash flow operations.

to network. have of MRO, our efforts, parts we workforce taken and to address throughout continue driven labor improvement. supply In quarter outstanding schools repositioning another elements was activities. sequential FY such recruiting of XXXX programs We our performance tight as enhancing saw This partnering our the see we and supply, various actions from with our improvement government by across

continued us Our labor have partially to cost. work higher has which also offset customers pricing, increase to with

FY implementing of well programs, as certain a executing we on on During new as strategic number initiatives. focused XXXX,

program. as both as government PBL and employees team gear Air the large contract, complex were programs Our Force almost programs WASS landing U.S. our XXXX new extremely implemented successfully INL and Both involving well implementations, contractors.

so We are very our customers. are implementations, importantly, pleased of more results with the and these

model, GOCO certain As to entered our assets asset-light COCO to business a we our business. of definitive part previously strategy to in communicated into an agreement sell shift

throughout and the several to we business on wins announced these addition awards, prior executing In other year. new

MTU. engine we announced support the fourth contract extension the Most quarter, of recently, our with in

expand JCAB, customer Japan Bureau, the our and strengthen position in from Civil We further also that certification company’s the the Japanese received Asia. base Aviation will

an fleets. feel particularly focused joint fourth Logistics, about announced UAE pleased with very arrangement with results. what military we the record military support U.S. management in quarter-end, Woodward distribution We FY repair on Aerospace our or are and to the GAL, and a have with accomplished to we contract exclusive Subsequent Global quarter good XXXX

I’ll that, our With the turn over Sean CFO, Gillen. to call

Sean Gillen

John. Thanks,

comment afternoon. I on X-K financial I this we the would like filed Before to the results, mention

company counsel Conduct, noted, U.S. violations of Code As outside investigate company’s to retained the possible the the of

Practices Corrupt laws, Foreign relating the Africa. other Nepal Act, activities and to and in applicable company’s South

these Based Serious matters UK Securities Department self-reported to Justice, U.S. on Fraud of investigations, these the Exchange the we Commission and Office. and U.S. the

they predict cooperate review we agencies, if action, will any, in unable what any these by may although time this are We take. to fully at

with is that now will open detail Given at further be an to this matter this not time. the able government, we offer

discuss XXXX will company’s financial QX in more I the that, performance detail. and With full-year

and our increase $XX This with primarily million, Expeditionary driven supply increase the growth segments, quarter million a XX% sales XX%, million, both Services WASS program. parts of or the in was increase million in or line along activities $XX.X $XXX.X We in significant in top in sales $XX.X by or growth were Our experienced Services revenues. year-over-year. XX% up Aviation including revenues in

or the in mix XX.X%, MRO million XX.X% Services. was versus period, million. XX.X% prior Expeditionary to Gross $XX in in and to increased profit due $XX.X Gross challenges labor primarily the year margin

growth. the were WASS support prior reflects of sales well to SG&A XX.X% as XX.X% versus expenses utilization our infrastructure in of other existing period, the which as

higher did initially than However, legal cost in drive the SG&A expected. increased quarter

share. diluted $X.XX or prior million, This $XX.X include the $X.XX reversals by benefits per $X.X year. to valuation quarter per related share. tax million, reported from compares diluted of which tax or results continuing operations state $X.XX share income $XX.X or Adjusted income reduced was per Fourth allowances, million, expense to diluted in

aforementioned the continuing adjusted QX from operations state and diluted exclude that EPS tax Note income benefits.

state the QX change tax performance clearly these benefits reflect adjusted the full-year presentation more of call. discussed in previous well benefits, This to federal exclude as underlying on is as Additionally, tax the the QX results business.

the As after-tax John action $X.X workforce associated our costs mentioned, across in certain adjusted of to results. which with of have elements incurred network. from quarter, we We the million we took these reposition actions, our excluded

to expenditures and quarter the last expense for were $X.X Capital and amortization $XX.X million, year. interest million was million. $X.X was depreciation Net million compared $X.X

million was our quarter, program. we our AAR continuing operating million, operations shares of flow a the During is $X.X for $XX.X from XXX,XXX Also, from repurchased $XX.X activities net reduction which million. cash in

to Switching full-year results.

Services XX.X%, Aviation Our sales sales or grew up for billion, $XXX $X.XX million or $XXX full-year XX.X%, year-over-year. million. the were

our were to Our due or volume products. well Services by mobility our growth sales Expeditionary programs. government sales as XX.X%, increases $XX for million as driven parts activities, supply grew

for changes parts to declined the XX.X%, million or increased $XX $X.X mix. profit $XXX in Gross Services or to in programs XX.X%, million, year and due due to supply million. million in XX.X%, Aviation primarily increased profit sales flow-through. profit Gross Gross Expeditionary or product $XX Services government

were XX.X% the versus Adjusted share of $XX.X share, diluted continuing the year. prior in per or $XX.X was income $X.XX prior $X.XX expenses SG&A compared period. per XX.X% million, diluted sales to operations in from million, or

year average rate. Capital last $X.X interest expenditures was good the about and million, cash full-year very increase for feel the flow $XX.X strength strong to the the and the We million, million. in Net million underlying year expense depreciation to $X.X balance an sheet interest generation. were for due of were amortization $XX.X the compared

X.X $XXX.X resulting $XX.X Net debt to times. million, decreased of leverage in net million

we million Additionally, to $XX.X of shareholders through $XX.X $XX.X share and our returned million million. of dividends repurchases

to John. call the turn now will over I back

John Holmes

Thank you, Sean.

XXXX, FY of about all businesses. As of for are our outlook ahead the we us opportunities and the really excited enter we

between rate are FY midpoint. to million for represents providing XXXX guidance sales a in release, $X.X indicated $X.X As which be of and the billion, at our we X% growth

midpoint X% We the share to of to rate diluted the of which the earnings growth continuing operations a at expect share, share $X.XX in per a $X.XX range be from range. a represents of

MRO and recovery tax ramp already rate growth of SG&A part XXXX. in approximately in of this coming year, we is of that As sales an a guidance which business, effective This XX%. occurred parts our FY had in full expect continued programs partial and guidance, growth of of off that contracts XX.X% the reflects a in strong having reflects to be very supply

while program we a have and with year. more Regarding new operational site the WASS, be added expect of and anticipate WASS adding last consistent performance financial the we sites, tempo to

support a SG&A the IT for percentage reflects resources. investments including Our of estimate quality, growth anticipated compliance to sales, sales business, our of as and

tax last QX the XX% tax Regarding effective rate, which to effective year’s rate for one-time items an anticipated of XX.X%, tax FY to XXXX. note compares QX that and for rate adjusted want was we in

Overall, we enter are very FY we excited as XXXX.

are markets strong. Our

We our New July fund this robust We have pipeline week we York opportunities all of XX. have look Investor significant discussing liquidity more to forward and on in next detail in at of to growth. Day our

back I’ll point, to for this questions. it turn At over operator the

Operator

sir. question of Thank Instructions] Spingarn comes Credit of first you, [Operator line Our Suisse. from the Rob

line Your open. is

Robert Spingarn

Good everybody. afternoon,

John Holmes

you? Hey, Rob, are how

Robert Spingarn

event I’m of the coming sounds moderates? nice guys. talk online. it a to I numbers And that you in sort from a some Expeditionary, like you, more particularly the And good. wanted strength quarter it program then little of about quarter, is Thanks. or ask bit two is one John, to

color if MRO’s and are it relative X% low sounds bit extrapolate and on things you business the rate? could above other like then then into year single-digit growth next maybe And lines, further that a little

John Holmes

Yes, sure.

the Just thanks. quarter on –

the happy really way We’re year company. from ended, the strong very with the the results across businesses

we’re year the our As and business wins products. to few starting to and Services, wins ship those in Expeditionary it throughout mobility produce relates we’ve the a perform on announced and

of benefit ahead, benefit we MRO, the it’s partial to against a in expect as the saw that [ph] quarters, off wins. Thinking those And [when we I as mentioned, year due recovery. in] we So, see QX. expect about additional we ship

a labor heading by encouraged in And retention, hangars results good the implemented result seeing loading into and as about also of the we year. that terms this We’re year, of well. throughout we’re the the initiatives both the attraction feel in we the as that

businesses blended sit at businesses above of And think the from are are our mean, we you’re rate best the rate certain represents that, today. below but I you right. of growth midpoint X%, as that the certain where view about that,

Robert Spingarn

outlook? we you before do into India this further, how MRO John, go factor

John Holmes

Yes.

Our for that. look that, calendar construction on expected we be Based complete we we to now, think, I year. this quarter still JV, right indicated last what India we know

We’re give finalize to the once the And working more color to will play able with that all agreement customer. results. that’s be we’ll how into the on done,

Robert Spingarn

in guide? revenue the joint Is there venture from any that

John Holmes

we’re anticipating any. No, not

Robert Spingarn

Okay.

there it maybe been to the EPS than XX.X% the there the with you have Is expected. this SG&A legal a maybe little XX%? regard situation? guidance is closer to tied to might XX thought – originally Just higher anything We that

John Holmes

than we higher little Yes. It a is anticipated.

relates there. Sean the factored we costs As X-K, in haven’t it the matter that to in mentioned

we really based in see that continued to some is came IT that the on the quarter. resources the some we XX.X% in resources. parts around investments growth, did businesses, promote we’re sales Although cost particularly then and are making adding through The fourth

around nice FY returns investments a and some making in investments from number of saw We’re space digital the those XXXX. we

So as and we compliance want quality well. to continue resources and growth, to fund then that additional

Robert Spingarn

this of Sean, build operating then free finish coming on especially looked should past think off bit either of flow we cash, year, And a for what how to up, the or just Okay. year? cash inventory cash this about in like an

Sean Gillen

to this have flow cash flow to or do for specific a as We cash for be relates But operating it Yes. free year flow guidance nice not positive. this upcoming to we’re cash giving flow any year. expect cash upcoming year either

Robert Spingarn

that? prevent you are that from the doing pieces What moving

Sean Gillen

supply just will if business our I’d opportunity, in parts we the to so or other we’re support programs, think do continue say either we’re which wins inventory distribution going invest in – to see or going to that. part of – business do to if new we

the our And our grow so want cash flow. in boxing to limit ability to don’t by we ourself business

Robert Spingarn

range, even provide range? So you a conversion a can’t

Sean Gillen

any not flow. providing We’re on cash guidance

Robert Spingarn

guys. you, Thank right. All Okay.

John Holmes

Other say, positive expect than cash year. to flow this to we be

Sean Gillen

Yes.

John Holmes

Yes.

Robert Spingarn

Right.

John Holmes

Right.

Operator

Thank you.

Solow the line comes next Our question Securities. of CJS of Larry from

Your line is open.

Larry Solow

guys. that the more like a contract million out granularity Could growth, been say? or sequentially just XX% of if Is not Is parse you Aviation give running I’m – the just minus $XX afternoon, to similar maybe Good Thanks. that’s plus can help out? line? sure, sort maybe this Services, fair Great. top the WASS us on you little

John Holmes

Yes. range. fair a that’s Yes,

Larry Solow

Right.

growth. recovered you quarter, down that, had still double-digit, sequentially. low – it the itself sounds it like essentially Was was that like looks actually MRO year-over-year? excluding And So in it you

John Holmes

we did It was improvement. but year-over-year, see down sequential

Larry Solow

year, Got basis said, And guess, continue right? you on improvement growth next for MRO for it. you’re I bit, and of sequential a little to the looking full-year

John Holmes

That’s correct. correct. That’s

Larry Solow

predominantly obviously bit margin basis, guess, nice improvement, the is but year-over-year. historically on expeditionary which Expeditionary considering, How a And labor-related? the come very a – little on then I I been bump there. also that high-margin I know side a And an some And mobility, I business, and and in sequentially is high year-over-year, pressure realize up the of guess, had sequentially. costs fixed

that I improve with So your a pretty think there. that? up good would would on Any thoughts margin in bump gross revenue,

John Holmes

Yes.

wanted a product mix there. – where margin are on have parts of And it issue seen. the then highlighted quarter impacting and we results continues might lower-margin in there to – I might of there product moving A think there also, an that be you One of you that is a is lines. on is and different And we’ve it. on there mix forward. element certain relates labor, third hit couple otherwise as the those we to producing that going

Larry Solow

And Okay. that [indiscernible] last sell you to quarter. I COCO announced think had assets, know, the I agreement the

So on there update any or…? calendar set Is that, of to sometime XXXX? in is sort still – that close

John Holmes

that’s Yes, correct.

Larry Solow

we Rica get look you And you…? out, as similar do from to or and we Okay. potentially sites, of growth so this sort the Costa then additional said year, on WASS, are incremental

John Holmes

– We yes, good Yes. question.

saw XXXX we more we’ve downs FY we and necessarily how the program adding program, But not expecting correlate we’ve do growth sites And sites some year. as you more a learned FY XXXX. now, in sites. new are site. added on in performance of we it does – about been We We similar the to And new the between what have with throughout as operates. up anticipate

Larry Solow

equate you mean, growth does would I that the think that growth, sites would run, some would the mean, in long you I run? or I would to long Okay. expect necessarily get – that with over add more

John Holmes

few historically, years look you a where if Again, is a it from in the low [ph] program was [historical] still ago.

with And the expect out see, for just to so as consistent there’s we be from next it is. But potential we what grow prior believe that to it where over we based we on program the XX the XX look months months.

Larry Solow

we of bit of Okay. Rob’s thing? long-term, to you for just of sort some of How one-time to Would know little some recurring type looked anyway nature? I like this, just perhaps a that, lastly, goal. in like, there of sort a And this view sort the you a like stuff investments. should It that to had XX% a reset Is looks maybe on because of kind follow-up obviously, then close parcel question SG&A, we required as getting expectation out? that were

John Holmes

mean, I that Yes. that’s this the on XX.X% driving based we’re forecasting year. we’re what’s some that investments making, for

Larry Solow

Right.

John Holmes

to But below the level did to get it or is and make goal meaningful XX% still a long-term we progress.

during resources at we on progress year, to we towards us look were long-term XX.X% last you this now. the given really of that nice But these at that estimate where we the goal. to puts year want some if So bring XX% year, that made some

Larry Solow

And or of will or…? that expenses, – into call not sort that you doesn’t out really in account taking on – legal you’re

John Holmes

legal extent, the to item Yes. X-K. To the we related expenses the would see out. that we’ll in call – We

Larry Solow

And need to you already that of in I know QX it to out, that was you prepared remarks, was significantly there not call any in elevated or…? some where mentioned the and there

John Holmes

to There was expenses that QX. – related there were in

Larry Solow

But there? right, your operating in left you that’s in that numbers,

John Holmes

there. in out. not it We left It’s call did

Larry Solow

year call but next to that out. But maybe able it pull Okay. say? out, be you potentially might Is at don’t you fair least it to

John Holmes

to but… We how Yes. goes, want see it

Larry Solow

Right.

John Holmes

…likely we’ll highlight that.

Larry Solow

Great. enough. Fair

appreciate I guys. Thanks, Okay. it.

Operator

Thank you.

of question comes Canaccord. Ken of line the next from Herbert Our

open. is line Your

John Holmes

Ken. Hey,

Operator

Instructions] [Operator

Ken Herbert

and Hi, John good Sean. afternoon, Yes.

John Holmes

Hi, Ken.

Ken Herbert

Hey, wanted XXXX? up Are distribution growth those maybe purchase just the guidance looks supply comps shift sort are fiscal line. to the you the just bit. on or there just and little XXXX you top it a parts difficult seeing for specifically very from in against it I any really is follow-up markets, some within I’m within on fiscal side, like And of trading, wondering, seeing sequential slows

John Holmes

market latter. highlighted trading XXXX the business the Yes, FY really those think business well year, I the parts the as those. anticipate and we’re had we it’s with new of We with growth that. both each in distribution right. throughout our position and both throughout we’ve really we you’re substantial happy But more growth as business we’re pleased had, very in in of as absolutely one

as up throughout against the pretty you some comps get You go significant year.

Ken Herbert

maybe follow, I than could retirements side, I pretty significantly, if to your And access trading Okay. on better lowering the material, are down mean, probably we some is which pricing. all but more offset by

some seeing market changes Just more, talk how about here you dynamics and market? XXXX? that we about the can a of retirements fiscal maybe how bit that of to or think material, you’re should in John, some the access little And of into with dynamics

John Holmes

over the in we availability tight, And price. elements I able think, for the position when exceptional last in with get I done several highlighted two material there. to competition are dealing a that’s business. really in And our is have in parts question. the think it an and to but material through make the has down most up aftermarket that’s Retirements our great you the and best market areas. results. The you’re come market-leading job that team quarters a tight becomes hands that important our outmaneuvering on available certain And

good think, the tight it able sell in game a better at stuff very of to about our able that a best a versus ground premium. very And hands good market, We believe our we’re materials will lot And we for to be really, competitors. about the feel I is our there. get there. feel we our on position And availability get even and

Ken Herbert

know, M&A you’ve can a in pipeline? step-up that’s great. anything and guidance And sheet that’s the which or know, could just in think balance the clearly allocation No, capital and And I you’re as got is buyback helpful. underlevered argue about leveraging, finally, we invest anything and I regarding you’ve I this or think priority, there else you should for is you How say organic about plenty the year? obviously, to and potential continued growth capacity. the maybe Okay. of

John Holmes

Yes.

Ken Herbert

But how you’ve position? very about do allocation changes we sheet here, other moving in got favorable balance maybe think as

Sean Gillen

Yes.

sheet think to good gives it us balance about as the I is you feel invest. and it we flexibility highlight, and where

in think, to the we’re grow as I to the to business priority the capital repurchase business in going we saw one, QX. continue number allocation, have. that, increased But relates after to invest activity that some you it

and to us on cash we’ll will I – to shareholders. to think for next and given continue deploy that going so. sheet and opportunities some do look capital the flow, to our portfolio, do And add we there to the out way or year balance return see over some M&A, we to to that we’re look to capital ability

Ken Herbert

Sean, Okay. us, what remind what’s outstanding you’ve the or Can on just got you left authorization? buyback

Sean Gillen

got current the about as buyback XXX Yes. We left on authorization. the

Ken Herbert

Great All you right. much. thank Well, very

Operator

you. Thank

comes of next Joseph Our Stifel. question from DeNardi

Your line is open.

Joseph DeNardi

good everybody. Hey, evening,

John Holmes

are How you?

Joseph DeNardi

MRO John, kind look at And cycle? now? are your AAR tenure the of a they towards range for over and there? that like maybe business, time improvement the lower the the that what’s at over produced you there has margins Where it of And businesses what’s end? strategy back feels when

John Holmes

Yes.

You’re definitely now from business you’ve and this at is is right talked about a of very range. characterize the business. single-digit it I would margin low-end that there But the low-single that. I cycle, absolutely a to – right. ranges we’ve digits –historically seen high-single MRO mean, we’ve And digits. us

develop of starting to of we’re in And and a position customer now. launching XXXX of base. more a we’ve series everybody we’ve facilities, to great efforts got And this as is customer, market-leading our pipeline and got own whole of the price did different of a improve lot blue in aware mechanics. as We very talent. got We’ve MRO. from and a the well both FY We’ve recruiting partnerships getting the proprietary situation, that chip see got customers, supportive of in to in industry those benefits terms tightness

lot to said And getting, a supply. with so as pricing as and tightness getting support, it we’re relates remarks, help prepared in we’re the I of deal to the

sequential encouraged where encouraged the summer hangars we by into encouraged I’m versus XXXX. saw the in were going progress quarter. in I’m ago. a have that fourth in loading made that I’m we the the FYI we So that we by the by this improvements year

so things. are all positive those And of

getting about favorable while original the are of at we’re from these months again, question the we the the us range. back that your last So, over move low-end, initiatives cycle, the XX to to higher-end back to all results the started

Joseph DeNardi

area the M&A you’re is an at business some to get of tower? pricing yourselves John, that looking where better maybe

John Holmes

We’re things across the different that own rationalizing looking specifically footprint we and our footprint about number of that a at workforce took. more there

to quarter the As we we to the solutions took – M&A, some and we’re during ideas to noted it the prepared first that at those open we to look the seeing do and creative things overall deal But will now. always with we in benefit steps of to as continue remarks, we’re relates labor challenge.

Joseph DeNardi

are you then to Thank pipeline call I But us a opportunities of little ones a And And and pending? opportunities the if so Okay. on if did hopped walk late, any just the big on the that maybe you’re can of you business? there government just John, this pipeline already. you. apologize through seeing

John Holmes

Yes.

what disclose the will wouldn’t are I out is have bids are both and been I in some there. out that also say works. that specific already that, submitted the significant reasons, competitive bids there But that there, those For have we

take little the – things guidance, year, Investor type it’s have occur pipeline a the that the awards I to the we we’re that we strong significant at anticipating XXXX to results. these wouldn’t we a are bit implementation some on very the impact in during award opportunities, note about to of we have think that likely of next Day week. that a and looking government pipeline long even And FY could more and meaningful talk time the a it’s important if we deals see while

Joseph DeNardi

you it. very Got much. Thank

John Holmes

you. Thank

Operator

Thank you.

Ciarmoli of SunTrust. next from the comes Our of question line Michael

Your open. line is

Michael Ciarmoli

contributor Hey, the to taking you the question. stay having I deals here. good taking Nice these Afghan event? guys. want think, for out government evening, to Thanks is Air and be more of contributor that or at sizable winning just John, close Maybe year, the is them modest – just that CXXX topic, all, Force. year going on XX quarter contract a this Should expect that a for we time, to a

John Holmes

It’s actually, a recompete. it’s

that So on we’re contract today.

Michael Ciarmoli

Right.

John Holmes

retain competed successfully we to contract. So that

– to have in confident We so – we and had have the so that’s that included retain that it our in we were we ability yes, – guidance.

Michael Ciarmoli

did a time guidance it. make establishing Sean, on what first this experiences the just how framework to and maybe kind differently the Got guidance? year, And then may of philosophical any going what through or a guidance, the could maybe guys you little for you – color prior maybe your And any establishing to just establish give color changes table? given did you your you be brought

Sean Gillen

how no we’re fiscal we budgeting planning year. of kind in of the a guidance. for Yes. and in than point Obviously, I’d major about the different organization say, the at previous guidance the terms the in giving year of came guidance process shift

we’re and rather But think creating little us plan seeing communicating over more other consistent XX thought months its insight I other into the have that, Street. I allows to with than So what budget to than the think largely a about XX-month and company has next period. bit that an and

Michael Ciarmoli

John, decelerating. some it. mean, – carriers traffics then Got airline for profit it. overall, And behavior, there’s I pressure been of there’s customer some looking, Got just some we’re definitely the

the market on conditions here as you we with fall? seeing up guys? in summer little the you some are presumably color what just a maybe of and for from looking the you general, just more in, if at you’re how the get can kind even a wrap And of opportunities what’s But and them, bit into overall from weaving creating behavioral MAX, that’s your Just standpoint happening customers?

John Holmes

that’s is businesses to seen. day-to-day and think that transactional basis get about material you that the seeing macro fact we’re enhanced those robust a factors notwithstanding earlier position on we’re pace in, and that market mentioned, I And with our others customer, overall, contact Yes, what activity most cannot. said the but that by I as day-to-day the we’re of – about able where that as our we’ve think, ever the I

And increase as about And we’ve relates we quarter. MAX. it MRO parts as really slight, we’re seen of demand MAX, we but the a least, And to the MAX, I’d that say a some in in as the that that’s talked the a something in result have of shifting in results, quarter. seen nothing certainly, monitoring the fourth third result at But the that the influenced schedule closely.

Michael Ciarmoli

labor one just have are then you on there? Got those labor you customers. guys talking your increase The and you guys able your existing of pressure support out me. getting might pass higher And be to mean, to some to I from about it. and contracts pricing rates through short, the in offering last for pricing

John Holmes

have. we Yes,

Michael Ciarmoli

Okay.

John Holmes

to have We get some pass we able dollar Not – been to to for able been but have dollar, relief. able renegotiate. been we have not

Michael Ciarmoli

of open renegotiation?. in mean, they all dynamics the And understand have Okay. your been that to the obviously I marketplace. customers

being they’re like sounds receptive to it that? So

John Holmes

are supportive. Yes, the customers being

Michael Ciarmoli

Okay. Great. right. it. Thanks, Got All it. Got guys.

John Holmes

you. Thank Right.

Operator

to the closing back John like you. to At call over Holmes remarks. Thank time, Sir? any I’d for turn this

John Holmes

you interest and Again, time your in company. for thank the

XXXX seeing you. Investor look excited and the of to XXXX very We’re in of in accomplished everybody at FY us next forward the really Day ahead about week. proud opportunities and Thank we FY what

Operator

you, have this Thank and today’s conference. a participation, for Thank Ladies gentlemen, your concludes wonderful sir. and you day.

may disconnect your You lines this at time.

AAR (AIR) 10 Jul 192019 Q4 Earnings call transcript