Business Segment Information

12 Months Ended

May 31, 2024

Business Segment Information

Business Segment Information

17. Business Segment Information

During the first quarter of fiscal 2024, our chief operating decision maker (“CODM”) implemented changes in how he organizes the business, allocates resources, and assesses performance. Specifically, this new structure resulted in the separation of our former Aviation Services segment into three new operating segments: Parts Supply, Repair & Engineering, and Integrated Solutions.

In conjunction with the re-alignment, our CODM now evaluates each segment’s performance based on operating income instead of gross profit as our CODM believes operating income is a more comprehensive profitability measure for each operating segment.

Our previously reported segment financial information has been recast to conform to our new segment structure. The change in our operating segments had no impact on our previously reported consolidated results of operations, financial condition, or cash flows.

Our operating segments are comprised of:

● Parts Supply, primarily consisting of our sales of used serviceable engine and airframe parts and components and distribution of new parts;

● Repair & Engineering, primarily consisting of our maintenance, repair, and overhaul services across airframes and components, including landing gear;

● Integrated Solutions, primarily consisting of our fleet management and operations of customer-owned aircraft, customized performance-based supply chain logistics programs in support of the U.S. Department of Defense , U.S. Department of State, and foreign governments, flight hour component inventory and repair programs for commercial airlines, and integrated software solutions, including Trax; and

● Expeditionary Services, primarily consisting of products and services supporting the movement of equipment and personnel by the U.S. and foreign governments and non-governmental organizations with sales derived from the engineering, design, integration, and manufacture of pallets, shelters, and containers.

The Company has not aggregated operating segments for purposes of identifying reportable segments. Inter-segment sales are recorded at fair value, which results in intercompany profit on inter-segment sales that is eliminated in consolidation. Corporate selling, general and administrative expenses include centralized functions such as legal, finance, treasury and human resources with a portion of the costs allocated to our operating segments.

Selected financial information for each segment is as follows:

	For the Year Ended May 31, 2024
	Third-Party		Inter-segment		Total
	Sales		Sales		Sales
Parts Supply	$	967.0	$	8.6	$	975.6
Repair & Engineering		640.1		87.8		727.9
Integrated Solutions		641.9		0.9		642.8
Expeditionary Services		69.9		—		69.9
	$	2,318.9	$	97.3	$	2,416.2

	For the Year Ended May 31, 2023
	Third-Party		Inter-segment		Total
	Sales		Sales		Sales
Parts Supply	$	818.4	$	19.3	$	837.7
Repair & Engineering		533.4		79.8		613.2
Integrated Solutions		546.9		0.2		547.1
Expeditionary Services		91.8		—		91.8
	$	1,990.5	$	99.3	$	2,089.8

	For the Year Ended May 31, 2022
	Third-Party		Inter-segment		Total
	Sales		Sales		Sales
Parts Supply	$	678.3	$	53.2	$	731.5
Repair & Engineering		470.7		54.1		524.8
Integrated Solutions		596.8		0.1		596.9
Expeditionary Services		74.2		0.3		74.5
	$	1,820.0	$	107.7	$	1,927.7

	For the Year Ended May 31,
	2024		2023		2022
Segment operating income:
Parts Supply	$	109.8	$	93.7	$	74.8
Repair & Engineering		52.5		35.3		29.1
Integrated Solutions		23.9		30.5		21.4
Expeditionary Services		3.5		7.7		9.2
		189.7		167.2		134.5
Corporate and other		(60.5)		(33.3)		(27.6)
Operating income		129.2		133.9		106.9
Pension settlement charge		(26.7)		—		—
Losses related to sale and exit of business		(2.8)		(0.7)		(1.7)
Other income (expense), net		(0.4)		(0.8)		2.2
Interest expense		(43.2)		(12.2)		(2.4)
Interest income		2.2		1.0		0.1
Income from continuing operations before income taxes	$	58.3	$	121.2	$	105.1

	May 31,
	2024		2023
Total assets:
Parts Supply	$	732.8	$	587.6
Repair & Engineering		1,235.4		433.4
Integrated Solutions		542.1		583.4
Expeditionary Services		79.1		67.0
Corporate and discontinued operations		180.6		161.7
	$	2,770.0	$	1,833.1

	For the Year Ended May 31,
	2024		2023		2022
Capital expenditures:
Parts Supply	$	0.8	$	2.2	$	2.0
Repair & Engineering		11.9		15.1		12.8
Integrated Solutions		5.2		5.7		1.4
Expeditionary Services		8.5		6.1		1.0
Corporate and other		3.3		0.4		0.1
	$	29.7	$	29.5	$	17.3

	For the Year Ended May 31,
	2024		2023		2022
Depreciation and amortization:1
Parts Supply	$	8.4	$	6.2	$	6.8
Repair & Engineering		12.2		7.6		8.8
Integrated Solutions		17.4		11.9		15.6
Expeditionary Services		1.5		1.5		1.6
Corporate		17.0		14.2		8.5
	$	56.5	$	41.4	$	41.3

1 Includes amortization of stock-based compensation.

The U.S. Department of Defense, U.S. Department of State, other U.S. government agencies and their contractors are our only customers representing 10% or more of total sales in any of the last three fiscal years. Sales by segment for these customers are as follows:

	For the Year Ended May 31,
	2024			2023			2022
Parts Supply	$	99.3		$	111.0		$	106.7
Repair & Engineering		61.0			48.5			56.2
Integrated Solutions		356.6			340.2			394.5
Expeditionary Services		59.2			77.3			62.6
	$	576.1		$	577.0		$	620.0
Percentage of total sales		24.8	%		29.0	%		34.1	%

Sales across the major customer markets for each of our operating segments were as follows:

	For the Year Ended May 31,
	2024		2023		2022
Parts Supply:
Commercial	$	800.6	$	645.0	$	510.7
Government and defense		166.4		173.4		167.6
	$	967.0	$	818.4	$	678.3
Repair & Engineering:
Commercial	$	574.1	$	478.5	$	407.0
Government and defense		66.0		54.9		63.7
	$	640.1	$	533.4	$	470.7
Integrated Solutions:
Commercial	$	257.1	$	197.0	$	163.9
Government and defense		384.8		349.9		432.9
	$	641.9	$	546.9	$	596.8
Expeditionary Services:
Commercial	$	6.1	$	8.3	$	2.2
Government and defense		63.8		83.5		72.0
	$	69.9	$	91.8	$	74.2

Geographic Data

Sales by geographic region for the fiscal years ended May 31, 2024, 2023 and 2022 were as follows:

	For the Year Ended May 31,
	2024		2023		2022
Parts Supply:
North America	$	532.1	$	493.3	$	414.0
Europe/Africa		252.9		190.8		144.9
Asia		146.4		108.9		88.0
Other		35.6		25.4		31.4
	$	967.0	$	818.4	$	678.3
Repair & Engineering:
North America	$	572.1	$	488.6	$	438.7
Europe/Africa		40.6		25.2		20.6
Other		27.4		19.6		11.4
	$	640.1	$	533.4	$	470.7
Integrated Solutions:
North America	$	536.0	$	461.7	$	493.5
Europe/Africa		78.0		51.4		58.2
Other		27.9		33.8		45.1
	$	641.9	$	546.9	$	596.8
Expeditionary Services:
North America	$	68.6	$	89.6	$	74.0
Other		1.3		2.2		0.2
	$	69.9	$	91.8	$	74.2

	May 31,
	2024		2023
Long-lived assets:
United States	$	1,174.6	$	559.9
Europe		90.9		78.5
Other		114.9		96.8
	$	1,380.4	$	735.2

Sales to unaffiliated customers in foreign countries (including sales through foreign sales offices of domestic subsidiaries) were approximately $770.0 million (33.2% of sales), $588.6 million (29.6% of sales) and $484.5 million (26.6% of sales) in fiscal 2024, 2023 and 2022, respectively