WOOD DALE, Ill. - AAR Corp . (NYSE: NYSE:AIR), a global aerospace and defense aftermarket solutions company with a market capitalization of $2.1 billion and annual revenue of $2.43 billion, announced today it has entered into a Non-Prosecution Agreement (NPA) with the Department of Justice (DOJ) and received a cease-and-desist order from the Securities and Exchange Commission (SEC) to resolve allegations of Foreign Corrupt Practices Act (FCPA) violations related to transactions in Nepal and South Africa in 2016 and 2017.
The company self-reported the potential infractions to the DOJ and SEC in 2019 and has since cooperated with a multi-year investigation. The total settlement amount is $55,599,653, including penalties, forfeiture, and prejudgment interest. This sum will be recorded as a one-time charge in AAR's second-quarter financial statements for fiscal year 2025. With a strong current ratio of 3.06, AAR's liquid assets exceed its short-term obligations, positioning it well to handle the settlement. AAR plans to pay the amount using cash and borrowings under its revolving credit facility. InvestingPro analysis reveals several additional metrics indicating the company's financial health.
John M. Holmes, AAR's Chairman, President, and CEO, expressed satisfaction with the resolution and gratitude for the agencies' acknowledgment of the company's cooperation. AAR has taken significant steps to enhance its global compliance program since reporting the potential violations.
The DOJ and SEC recognized AAR's remedial actions and its efforts to cooperate with their investigations. The agencies indicated that the misconduct was primarily conducted by a former employee of a subsidiary and former third-party agents.
AAR, headquartered near Chicago, operates in over 20 countries and supports commercial and government customers through various segments, including Parts Supply, Repair & Engineering, Integrated Solutions, and Expeditionary Services.
The resolution of this case closes a chapter on AAR's legal challenges, allowing the company to continue focusing on its commitment to ethical business practices. This news is based on a press release statement from AAR Corp.
In other recent news, Archer Aviation Inc (NYSE:ACHR). has entered into a strategic partnership with Abu Dhabi entities to launch the first commercial electric air taxi operations in the Emirate and establish a manufacturing presence in the MENA region. This development aims to accelerate the introduction of eVTOL air taxis in Abu Dhabi, with Archer set to become the first eVTOL manufacturer in the region.
In parallel, AAR Corp. has secured a global distribution agreement with Whippany Actuation Systems and a multi-year agreement with Chromalloy. These agreements position AAR as the sole distributor for Whippany's actuation components and Chromalloy's turbine blades used in CF6-80C2 engines.
Analyst firm Benchmark has reiterated its Buy rating on AAR shares, citing the company's recent contract achievements and the ongoing integration of Triumph Products. AAR Corp. also reported a strong start to fiscal 2025, with first-quarter sales rising by 20% to reach $662 million and projected sales growth of 18% to 22% for the second quarter.
These are recent developments that have taken place, providing investors with highlights from the aviation industry.
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