| Business Segment Information |
15. Business Segment Information Our operating segments are comprised of: | ● | Parts Supply, primarily consisting of distribution of new parts and sales of used serviceable material, including aircraft, engine and airframe parts and components; |
| ● | Repair, Engineering, and Software primarily consists of Airframe MRO, Component MRO, and our software platforms, including Trax, Aerostrat, Airvoyant, and Airinmar; |
| ● | Government Solutions primarily consists of our fleet management and operations of customer-owned aircraft, customized performance-based supply chain logistics programs in support of the DoW, the DoS and foreign governments and the engineering, design, integration, manufacture, and repair of pallets, shelters, and containers; and |
| ● | Legacy Commercial Programs primarily consists of asset-heavy flight hour-based component repair programs for commercial airlines and distribution of consumables and expendables (“C&E”) inventory. |
Our CODM is our Chief Executive Officer and he evaluates performance on our operating segments using operating income as the primary profitability measure. Our operating segments are aligned principally around differences in products and services and are consistent with how our CODM allocates resources, assesses performance, and makes decisions. We have 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. Significant expenses for each segment are as follows: | | | | | | | | | | | | | | | | | | Year Ended May 31, 2026 | | | | | | | | | Selling, | | Other | | | | | | | | | Cost of | | General and | | Segment | | Operating | | | Sales | | Sales | | Administrative | | Items | | Income | Parts Supply | | $ | 1,487.7 | | $ | 1,192.9 | | $ | 116.0 | | $ | (7.4) | | $ | 186.2 | Repair, Engineering, and Software | | | 1,080.8 | | | 862.8 | | | 132.7 | | | 0.7 | | | 84.6 | Government Solutions | | | 502.3 | | | 405.8 | | | 39.8 | | | — | | | 56.7 | Legacy Commercial Programs | | | 237.2 | | | 224.3 | | | 13.2 | | | (0.3) | | | — | | | $ | 3,308.0 | | $ | 2,685.8 | | $ | 301.7 | | $ | (7.0) | | $ | 327.5 | Corporate and other | | | | | | | | | | | | | | | (49.7) | | | | | | | | | | | | | | | | 277.8 | Bargain purchase gain | | | | | | | | | | | | | | | 29.5 | Gain on sale of headquarters building | | | | | | | | | | | | | | | 9.8 | Gain related to sale and exit of business | | | | | | | | | | | | | | | 1.4 | Other expense, net | | | | | | | | | | | | | | | (2.1) | Interest expense | | | | | | | | | | | | | | | (72.1) | Interest income | | | | | | | | | | | | | | | 1.6 | Income before income taxes | | | | | | | | | | | | | | $ | 245.9 |
| | | | | | | | | | | | | | | | | | Year Ended May 31, 2025 | | | | | | | | | Selling, | | Other | | | | | | | | Cost of | | General and | | Segment | | Operating | | | Sales | | Sales | | Administrative | | Items | | Income | Parts Supply | | $ | 1,099.6 | | $ | 868.8 | | $ | 76.2 | | $ | (2.2) | | $ | 156.8 | Repair, Engineering, and Software | | | 931.0 | | | 724.9 | | | 124.8 | | | (2.7) | | | 84.0 | Government Solutions | | | 495.4 | | | 424.1 | | | 36.2 | | | — | | | 35.1 | Legacy Commercial Programs | | | 254.5 | | | 232.5 | | | 13.2 | | | 0.2 | | | 8.6 | | | $ | 2,780.5 | | $ | 2,250.3 | | $ | 250.4 | | $ | (4.7) | | $ | 284.5 | Corporate and other | | | | | | | | | | | | | | | (99.3) | | | | | | | | | | | | | | | | 185.2 | Losses related to sale and exit of businesses | | | | | | | | | | | | | | | (72.4) | Other expense, net | | | | | | | | | | | | | | | (0.3) | Interest expense | | | | | | | | | | | | | | | (75.4) | Interest income | | | | | | | | | | | | | | | 1.8 | Income before income taxes | | | | | | | | | | | | | | $ | 38.9 |
| | | | | | | | | | | | | | | | | | Year Ended May 31, 2024 | | | | | | | Selling, | | Other | | | | | | | Cost of | | General and | | Segment | | Operating | | | Sales | | Sales | | Administrative | | Items | | Income | Parts Supply | | $ | 967.0 | | $ | 758.4 | | $ | 98.3 | | $ | 0.5 | | $ | 109.8 | Repair, Engineering, and Software | | | 681.3 | | | 534.7 | | | 99.1 | | | (0.4) | | | 47.9 | Government Solutions | | | 451.7 | | | 386.9 | | | 40.6 | | | (0.6) | | | 24.8 | Legacy Commercial Programs | | | 218.9 | | | 196.8 | | | 15.0 | | | (0.1) | | | 7.2 | | | $ | 2,318.9 | | $ | 1,876.8 | | $ | 253.0 | | $ | (0.6) | | $ | 189.7 | Corporate and other | | | | | | | | | | | | | | | (60.5) | | | | | | | | | | | | | | | | 129.2 | Pension settlement charge | | | | | | | | | | | | | | | (26.7) | Gain related to sale and exit of businesses, net | | | | | | | | | | | | | | | (2.8) | Other expense, net | | | | | | | | | | | | | | | (0.4) | Interest expense | | | | | | | | | | | | | | | (43.2) | Interest income | | | | | | | | | | | | | | | 2.2 | Income before income taxes | | | | | | | | | | | | | | $ | 58.3 |
Selected financial information for each segment is as follows: | | | | | | | | | | | | For the Year Ended May 31, 2026 | | | Third-Party | | Inter-segment | | Total | | | Sales | | Sales | | Sales | Parts Supply | | $ | 1,487.7 | | $ | 32.6 | | $ | 1,520.3 | Repair, Engineering, and Software | | | 1,080.8 | | | 72.7 | | | 1,153.5 | Government Solutions | | | 502.3 | | | 4.2 | | | 506.5 | Legacy Commercial Programs | | | 237.2 | | | 3.7 | | | 240.9 | | | $ | 3,308.0 | | $ | 113.2 | | $ | 3,421.2 |
| | | | | | | | | | | | For the Year Ended May 31, 2025 | | | Third-Party | | Inter-segment | | Total | | | Sales | | Sales | | Sales | Parts Supply | | $ | 1,099.6 | | $ | 19.8 | | $ | 1,119.4 | Repair, Engineering, and Software | | | 931.0 | | | 90.2 | | | 1,021.2 | Government Solutions | | | 495.4 | | | 1.3 | | | 496.7 | Legacy Commercial Programs | | | 254.5 | | | 0.5 | | | 255.0 | | | $ | 2,780.5 | | $ | 111.8 | | $ | 2,892.3 |
| | | | | | | | | | | | 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, and Software | | | 681.3 | | | 87.7 | | | 769.0 | Government Solutions | | | 451.7 | | | 0.9 | | | 452.6 | Legacy Commercial Programs | | | 218.9 | | | — | | | 218.9 | | | $ | 2,318.9 | | $ | 97.2 | | $ | 2,416.1 |
| | | | | | | | | May 31, | | | 2026 | | 2025 | Total assets: | | | | | | | Parts Supply | | $ | 1,099.9 | | $ | 818.8 | Repair, Engineering, and Software | | | 1,598.2 | | | 1,328.0 | Government Solutions | | | 282.8 | | | 253.2 | Legacy Commercial Programs | | | 250.2 | | | 273.8 | Corporate and other | | | 124.8 | | | 170.8 | | | $ | 3,355.9 | | $ | 2,844.6 |
| | | | | | | | | | | | For the Year Ended May 31, | | | 2026 | | 2025 | | 2024 | Capital expenditures: | | | | | | | | | | Parts Supply | | $ | 0.9 | | $ | 0.2 | | $ | 0.8 | Repair, Engineering, and Software | | | 25.6 | | | 23.9 | | | 14.2 | Government Solutions | | | 7.5 | | | 8.7 | | | 11.0 | Legacy Commercial Programs | | | — | | | 0.1 | | | 0.4 | Corporate and other | | | 2.6 | | | 1.8 | | | 3.3 | | | $ | 36.6 | | $ | 34.7 | | $ | 29.7 |
| | | | | | | | | | | | For the Year Ended May 31, | | | 2026 | | 2025 | | 2024 | Depreciation and amortization:1 | | | | | | | | | | Parts Supply | | $ | 24.0 | | $ | 9.7 | | $ | 8.4 | Repair, Engineering, and Software | | | 35.7 | | | 32.5 | | | 17.3 | Government Solutions | | | 7.1 | | | 6.4 | | | 3.8 | Legacy Commercial Programs | | | 7.2 | | | 7.5 | | | 10.0 | Corporate | | | 15.9 | | | 19.0 | | | 16.0 | | | $ | 89.9 | | $ | 75.1 | | $ | 55.5 |
| 1 | Includes amortization of stock-based compensation. |
| | | | | | | | | | | | For the Year Ended May 31, | | | 2026 | | 2025 | | 2024 | Earnings (Loss) from joint ventures: | | | | | | | | | | Parts Supply | | $ | 7.3 | | $ | 2.0 | | $ | (0.5) | Repair, Engineering, and Software | | | (0.1) | | | 3.4 | | | 0.3 | | | $ | 7.2 | | $ | 5.4 | | $ | (0.2) |
| | | | | | | | | May 31, | | | 2026 | | 2025 | Investments in joint ventures: | | | | | | | Parts Supply | | $ | 15.8 | | $ | 8.4 | Repair, Engineering, and Software | | | 33.2 | | | 23.9 | | | $ | 49.0 | | $ | 32.3 |
The DoW, DoS, 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, | | | | 2026 | | 2025 | | 2024 | | Parts Supply | | $ | 253.3 | | $ | 143.3 | | $ | 99.3 | | Repair, Engineering, and Software | | | 79.5 | | | 82.2 | | | 62.0 | | Government Solutions | | | 455.0 | | | 462.1 | | | 414.8 | | | | $ | 787.8 | | $ | 687.6 | | $ | 576.1 | | Percentage of total sales | | | 23.8 | % | | 24.7 | % | | 24.8 | % |
Sales across the major customer markets for each of our operating segments were as follows: | | | | | | | | | | | | For the Year Ended May 31, | | | 2026 | | 2025 | | 2024 | Parts Supply: | | | | | | | | | | Commercial | | $ | 1,153.4 | | $ | 879.2 | | $ | 800.6 | Government and defense | | | 334.3 | | | 220.4 | | | 166.4 | | | $ | 1,487.7 | | $ | 1,099.6 | | $ | 967.0 | Repair, Engineering, and Software: | | | | | | | | | | Commercial | | $ | 990.2 | | $ | 838.4 | | $ | 612.3 | Government and defense | | | 90.6 | | | 92.6 | | | 69.0 | | | $ | 1,080.8 | | $ | 931.0 | | $ | 681.3 | Government Solutions: | | | | | | | | | | Commercial | | $ | 3.3 | | $ | 4.0 | | $ | 6.1 | Government and defense | | | 499.0 | | | 491.4 | | | 445.6 | | | $ | 502.3 | | $ | 495.4 | | $ | 451.7 | Legacy Commercial Programs: | | | | | | | | | | Commercial | | $ | 237.2 | | $ | 254.5 | | $ | 218.9 |
Sales by type of product/service for each of our operating segments were as follows: | | | | | | | | | | | | For the Year Ended May 31, | | | 2026 | | 2025 | | 2024 | Government Solutions: | | | | | | | | | | Government programs | | $ | 409.2 | | $ | 394.7 | | $ | 381.8 | Mobility Systems | | | 93.1 | | | 100.7 | | | 69.9 | | | $ | 502.3 | | $ | 495.4 | | $ | 451.7 | | | | | | | | | | | Legacy Commercial Programs: | | | | | | | | | | Component repair programs | | $ | 210.4 | | $ | 225.1 | | $ | 185.1 | Distribution of C&E inventory | | | 26.8 | | | 29.4 | | | 33.8 | | | $ | 237.2 | | $ | 254.5 | | $ | 218.9 |
For our Parts Supply and Repair, Engineering, and Software segments, each of those segments is comprised of similar products and services within the individual segment. Geographic Data Sales by geographic region for the fiscal years ended May 31, 2026, 2025, and 2024 were as follows: | | | | | | | | | | | | For the Year Ended May 31, | | | 2026 | | 2025 | | 2024 | Parts Supply: | | | | | | | | | | North America | | $ | 840.6 | | $ | 631.6 | | $ | 532.1 | Europe/Africa | | | 331.4 | | | 263.2 | | | 252.9 | Asia | | | 250.4 | | | 166.1 | | | 146.4 | Other | | | 65.3 | | | 38.7 | | | 35.6 | | | $ | 1,487.7 | | $ | 1,099.6 | | $ | 967.0 | Repair, Engineering, and Software: | | | | | | | | | | North America | | $ | 881.1 | | $ | 735.9 | | $ | 589.1 | Europe/Africa | | | 99.7 | | | 100.1 | | | 55.0 | Asia | | | 94.4 | | | 86.8 | | | 31.1 | Other | | | 5.6 | | | 8.2 | | | 6.1 | | | $ | 1,080.8 | | $ | 931.0 | | $ | 681.3 | Government Solutions: | | | | | | | | | | North America | | $ | 499.9 | | $ | 493.1 | | $ | 440.1 | Europe/Africa | | | 2.1 | | | 2.1 | | | 11.3 | Asia | | | 0.3 | | | 0.2 | | | 0.3 | | | $ | 502.3 | | $ | 495.4 | | $ | 451.7 | Legacy Commercial Programs: | | | | | | | | | | North America | | $ | 140.6 | | $ | 167.6 | | $ | 147.4 | Europe | | | 73.4 | | | 66.4 | | | 53.4 | Asia | | | 23.2 | | | 20.5 | | | 18.1 | | | $ | 237.2 | | $ | 254.5 | | $ | 218.9 |
| | | | | | | | | May 31, | | | 2026 | | 2025 | Long-lived assets: | | | | | | | United States | | $ | 1,370.3 | | $ | 1,110.8 | Europe | | | 96.7 | | | 93.8 | Other | | | 146.8 | | | 129.4 | | | $ | 1,613.8 | | $ | 1,334.0 |
Sales to unaffiliated customers in foreign countries (including sales through foreign sales offices of domestic subsidiaries) were $1,135.4 million (34.3% of sales), $951.7 million (34.2% of sales), and $770.0 million (33.2% of sales) in fiscal 2026, 2025, and 2024, respectively.
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