Business Segment Information

3 Months Ended

Aug. 31, 2024

Business Segment Information

Business Segment Information

15. Business Segment Information

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 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, 2024. Cost of sales consists principally of the cost of products, including material used in manufacturing operations, direct labor, and overhead.

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:

	Three Months Ended August 31, 2024
	Third-Party		Inter-segment		Total
	Sales		Sales		Sales
Parts Supply	$	249.7	$	2.5	$	252.2
Repair & Engineering		217.6		22.6		240.2
Integrated Solutions		168.9		0.3		169.2
Expeditionary Services		25.5		—		25.5
	$	661.7	$	25.4	$	687.1

	Three Months Ended August 31, 2023
	Third-Party		Inter-segment		Total
	Sales		Sales		Sales
Parts Supply	$	236.8	$	0.8	$	237.6
Repair & Engineering		137.5		19.5		157.0
Integrated Solutions		156.3		1.1		157.4
Expeditionary Services		19.1		—		19.1
	$	549.7	$	21.4	$	571.1

The following table reconciles segment operating income to income from continuing operations before provision for income taxes:

	Three Months Ended
	August 31,
	2024		2023
Segment operating income:
Parts Supply	$	30.1	$	15.1
Repair & Engineering		21.1		9.1
Integrated Solutions		7.7		7.7
Expeditionary Services		(1.7)		1.3
		57.2		33.2
Corporate and other		(13.8)		(7.9)
		43.4		25.3
Pension settlement charge		—		(26.7)
Losses related to sale and exit of business		(0.1)		(0.7)
Other income, net		(0.1)		—
Interest expense		(18.8)		(5.8)
Interest income		0.5		0.4
Income (Loss) before income taxes	$	24.9	$	(7.5)