AAR Ventures Into Medical Logistics - Analyst Blog

By Zacks | February 05, 2013 AAA

AAR Corp. (AIR) recently announced a contract win from the U.S. Army Medical Material Center, Southwest Asia. The contract, with a one year term and two renewal options, involves the management of medical logistics. The value of the contract remains undisclosed. Per the contract, AAR's Defense Systems and Logistics business will take up the responsibility of providing the U.S. Central Command (CENTCOM) with medical inventory management services. The services will be extended to a few nations like Iraq, Afghanistan, Kuwait, Qatar and the United Arab Emirates.

With the contract, the company ventures into a whole new field of medical logistics. Previous to this, AAR had only been involved in the logistics of products related to the aerospace industry and ground equipment.

Illinois-based AAR Corp. provides a wide range of high-quality, and cost-effective technical services. AAR Defense Systems and Logistics currently supports the U.S. government through its supply chain management, and is ranked one of the top defense contractors in the world.

In a separate press release, the company also announced that some of its 1.75% Convertible Senior Notes due 2026 holders have surrendered their notes to the company, in response to the put option that expired on Jan 31, 2013. The total amount paid as a result of the surrender was roughly $63.6 million and was paid through the company's free cash flow as well as unsecured revolving credit facility. The total notes, remaining due, values roughly $25.3 million.

AAR currently has a Zacks #3 Rank (Hold). Other stocks worth a look in the industry are Alliant Techsystems Inc. (ATK), Rolls Royce Holdings Plc. (RYCEY) and BAE Systems Plc. (BAESY); each holding a Zacks Rank #1 (Strong Buy).

comments powered by Disqus
Related Analysis
  1. India Remains An Emerging Market Bright Spot
    Stock Analysis

    India Remains An Emerging Market Bright Spot

  2. Consumer Spending Keeps In Line - Ahead of Wall Street
    Stock Analysis

    Consumer Spending Keeps In Line - Ahead of Wall Street

  3. Bear of the Day: IXIA (XXIA) - Bear of the Day
    Stock Analysis

    Bear of the Day: IXIA (XXIA) - Bear of the Day

  4. Bull of the Day: Southwest Airlines (LUV) - Bull of the Day
    Stock Analysis

    Bull of the Day: Southwest Airlines (LUV) - Bull of the Day

  5. Barron's Recap: Investing Like A Tech Tycoon
    Stock Analysis

    Barron's Recap: Investing Like A Tech Tycoon

Trading Center