AAR Corp Executives Vested at $140, Stock Now $127
AAR Corp's entire senior leadership team had RSU shares withheld at $140.04 per share on July 31 — but the stock now trades at $126.54. In the weeks since those vestings, the company has filed a defin
AAR Corp Executives Vested at $140, Stock Now $127
NEW YORK, September 6 —
AAR Corp. (AIR) filed an automatic shelf registration the morning after its July earnings release, then followed with three proxy documents in August while the stock drifted from the $140.04 at which executives had shares withheld to its current $126.54. The company beats earnings consistently; what remains unresolved is why it needs the shelf, and at what price.
- Four consecutive EPS beats, most recently $1.53 vs. $1.38 estimate; trailing twelve-month revenue of $3.31 billion, up 23% year-over-year.
- CEO McClain received 211,705 equity grant shares on July 23; 40,363 withheld at $140.04 eight days later as RSUs vested.
- Negative $50M trailing FCF; $1.01B in total debt; shelf registration filed July 22, the day after earnings.
The Day the Shelf Landed
AAR Corp. earns its revenue repairing, maintaining, and supplying parts for commercial and military aircraft, with services spanning airframe MRO, parts distribution including its own PMA aftermarket parts, and government defense support across North America, Europe, Africa, and Asia. On July 21, the company reported its fourth consecutive earnings beat, $1.53 actual against a $1.38 estimate. The next morning, it filed an S-3ASR shelf registration. Three days later came an 8-K flagging a leadership change. August brought a definitive proxy and two supplemental filings within seven days. Whether that sequence is housekeeping or the runway for a shareholder vote on a capital transaction, the filings do not yet say.
Beats on the Income Statement, Bleed Below It
The earnings momentum is real: $3.31 billion in trailing revenue growing 23% year-over-year, and four consecutive EPS beats with margins of 7.8% to 14.5% above consensus. Below the operating line, the math tightens. With $99 million in trailing operating cash flow, free cash flow ran -$50 million, implying roughly $149 million in capital expenditures. That capex gap, stress-tested against any DCF model of AAR's growth rate, is what makes the shelf registration feel less like optionality and more like a plan. Total debt of $1.01 billion against $80 million in cash leaves the balance sheet with minimal buffer if the capital raise turns dilutive.
| Ticker | Mkt cap | Fwd P/E | 52-wk |
|---|---|---|---|
| AIR | $5.1B | 19.3x | +69.2% |
| DCO | $2.5B | 31.4x | +84.3% |
| CW | $20.9B | 33.1x | +17.0% |
| HEI | $45.5B | 45.2x | +2.6% |
| ATRO | $3.3B | 24.2x | +148.9% |
| HXL | $7.0B | 29.5x | +42.9% |
$127 to $145: What the Proxy Has to Say
CEO McClain's 161,500-share equity grant on July 23 gives him material personal exposure near current prices, but equity grants are compensation, not open-market conviction buys. The stock sits at $126.54, roughly 10% below the $140.04 at which the whole senior leadership team had RSUs withheld on July 31. Analyst consensus of $145.20 implies a 15% recovery, a case that holds only if the August proxy clears without a dilutive capital transaction. If it does, the earnings beat streak is the story. If it does not, the shelf filed the morning after earnings takes on a different meaning. Run the free AAR Corp. deep-dive → before the next quarterly report.
Basis Report is independent research for informational purposes. It is not investment advice and not a recommendation to buy or sell any security.
AAR Corp's entire senior leadership team had RSU shares withheld at $140.04 per share on July 31 — but the stock now trades at $126.54. In the weeks since those vestings, the company has filed a definitive proxy statement and two supplemental proxy filings in August, layered on top of the shelf registration it filed the morning after its earnings report. Investors are left to determine whether the corporate activity signals routine housekeeping or a pending capital transaction.
Sources & Filings