AAR Corp Q2 2022 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Kenneth George Herbert - RBC Capital Markets, Research Division - Analyst : I just wanted to start off, the 33% growth in the commercial business, can you -- it sounds like from your commentary that parts supply was maybe down sequentially or maybe not a big driver of that growth. Can you parse out that growth in the quarter from MRO relative to maybe the parts distribution and the parts trading side of the business?

Question: Kenneth George Herbert - RBC Capital Markets, Research Division - Analyst : Okay. And obviously, we keep getting these new variants and things seem to be pushing to the right in terms of the recovery. But what's your thinking now as to when we might see a more meaningful inflection in either distribution or, I guess more specifically, parts trading? And what are some of the indicators that you're tracking that are going to give you confidence or give you better visibility on when we expect that inflection to occur?

Question: Kenneth George Herbert - RBC Capital Markets, Research Division - Analyst : And just one final question on that. As you think about the cycle, maybe not just the next few quarters, but the next couple of years, how much do you model or how much do you assume USM demand could outpace broader sort of aftermarket parts demand? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 21, 2021 / 9:45PM, AIR.N - Q2 2022 AAR Corp Earnings Call

Question: Kenneth George Herbert - RBC Capital Markets, Research Division - Analyst : John, just to follow up on the F-16 contract you announced, how much does that ramp? And how quickly and what's the sort of the fiscal '22 incremental contribution?

Question: Kenneth George Herbert - RBC Capital Markets, Research Division - Analyst : Okay. Helpful. And on the buyback authorization, I mean, you still identify organic growth and M&A as higher priorities for uses of capital. M&A hasn't been much of a part of the mix for quite a while, and I can appreciate maybe investment opportunities now organically maybe starting to increase but maybe limited as well. How quickly do you expect to ramp on the buyback on the authorization and how much usage there should we expect? Or are there really some nice opportunities in terms of other investments we should be thinking about?

Question: Kenneth George Herbert - RBC Capital Markets, Research Division - Analyst : Okay. That's great. And if I could, just one final clarification. I just wanted to confirm, you indicated that, as a result of Omicron, you haven't seen any change to your MRO schedules or backlogs. I just want to make sure I got that correctly.