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- **Record Q3 2025 Performance**: 15% YoY organic sales growth, 38.7% adjusted EBITDA margin (up 190bps), and $420M GAAP net income.
- **2026 Outlook**: $540M-$550M net sales, 39% EBITDA margin, 25% effective tax rate, and 125%+ cash flow conversion.
- **Strategic Drivers**: New product pipeline ($600M+), data-driven manufacturing, and 3%+ annual growth from 20+ new products.
- **Risk Management**: Conservative production rate assumptions (Boeing -15%, Airbus -20%), but 10%+ aftermarket resilience despite OEM destocking.
- **Shareholder Value**: 37% CAGR in sales (2012-2024), 47% EBITDA CAGR, and 100%+ operating cash flow growth.

**【Management Opening Remarks】**
- CEO Dirk Charles highlighted a 15% year-over-year (YoY) increase in organic sales, driven by strong commercial aftermarket and OEM demand.
- CFO Glenn D’Alessandro reported record Q3 2025 adjusted EBITDA margins of 38.7%, up 190 basis points YoY, due to operating leverage and strategic initiatives.
- 2026 outlook includes net sales of $540-$550 million, with low double-digit growth in commercial aerospace and defense, despite cautious production rate assumptions (Boeing 737 MAX: 38/month, Airbus A320: 54/month), reflecting supply chain conservatism.

**【CEO Strategic Commentary】**
- Emphasized long-term compound annual growth rates (CAGR) of 18%-15% in organic sales (2022-2024), targeting double-digit organic growth through new product development (e.g., cockpit door barriers, PMA brake systems).
- Highlighted $600 million pipeline of new customer opportunities, with 3%+ annual growth from new products like water purification systems and de-icing technologies.
- Stressing margin improvement through data-driven manufacturing and ERP enhancements, aiming for 39%+ EBITDA margins in 2026.

**【CFO Financial Highlights】**
- Q3 2025 GAAP net income: $420 million, Non-GAAP EPS: $1.08 (vs. $0.95 prior guidance), driven by cost control ($1 million+ savings in Sarbanes-Oxley compliance).
- Operating cash flow minus capex expected to exceed 125% of net income in 2026, with $17 million in non-cash stock comp.
- 2026 capital expenditures: $17 million, effective tax rate: 25%, depreciation/amortization: $15 million.

**【Q&A Key Themes】**
- **Defense Market Deceleration**: 2026 growth expected at 5% (vs. 16% in 2025), attributed to normalized ground vehicle bookings.
- **New Product Growth**: 3%+ contribution from PMA brake certifications and cockpit door exclusivity on Airbus narrow-bodies.
- **Aftermarket Resilience**: 10%+ growth driven by aging fleets and air travel recovery, despite concerns about OEM production rates.
- **Acquisition Integration**: BeeLite (seat belt restraints) already generating $1 million+ in synergies with Schwartz Aerospace, with 40%+ pipeline for additional certifications.


Loar Holdings Inc. (LOAR) Q3 2025 Earnings Call Transcript

- **Record Q2 performance**: 13% sales growth, 38.3% EBITDA margin, and 16% EPS guidance increase.
- **Pipeline acceleration**: $500M product pipeline with 2025 contributions at lower end of 1-3% range.
- **Strategic acquisitions**: Beadlight to drive 2026+ accretion; LMB pending regulatory approval.
- **Resilient aftermarket**: No degradation in demand, supported by proprietary sole-source products.
- **Margin expansion**: 710bps EBITDA margin improvement since 2020, driven by pricing, productivity, and mix.

**【CEO Summary Section】**
- **Record financial performance**: Q2 2025 sales of $123 million (+13% YoY), adjusted EBITDA of $47 million (38.3% margin), and net income of $11 million.
- **Pipeline growth**: $500 million pipeline of new products over 5 years, with 2025 contributions expected at the lower end of 1-3% growth range.
- **Updated guidance**: 2025 net sales $486-494M (+11%), adjusted EBITDA $184-187M (+17%), EPS $0.83-0.88 (+16%).
- **Strategic acquisitions**: Beadlight (UK lighting) to contribute mid-single-digit sales in 2025, accretive from 2026; LMB Fans & Motors pending regulatory approval.

**【CFO Financial Commentary】**
- **Margin expansion**: Gross margin +480bps YoY, driven by strategic pricing, productivity, and mix. Adjusted EBITDA margin up 220bps to 38.3%.
- **Cost management**: Public company costs stabilized at Q2 run rate; no material increases expected.
- **Liquidity**: Strong cash flow conversion (148% YTD) supporting $14M CapEx and $26M interest expense guidance.

**【Q&A Highlights】**
- **Beadlight valuation**: Acquired for $33M, 2025 sales ~$2M breakeven; 2026+ accretion from new programs and Loar synergies.
- **LMB status**: Regulatory delays, but optimistic for Q3 close; French authorities supportive of strategic fit.
- **Market trends**: Commercial aftermarket demand resilient; OE volatility due to inventory management. Defense sales +19% YoY, driven by new programs and share gains.
- **Proprietary strength**: 100% sole-source products; airlines unable to substitute, ensuring demand stability.

Loar Holdings Inc. (LOAR) Q2 2025 Earnings Conference Call Transcript

- **Revenue Growth**: Q1 2025 sales up 12% YoY to $150 million, driven by defense (30% growth), commercial aftermarket (13%), and OEM (8%).
- **Margin Expansion**: Gross profit margin improved 370 bps, adjusted EBITDA up $10 million, with 2025 margin target of 37.5%.
- **New Product Success**: Secondary cockpit barrier to be installed on all new Airbus aircraft, with retrofit orders expected.
- **M&A Pipeline**: Active deal flow with no need for leverage increase, despite strong balance sheet.
- **Defense Volatility**: Q1 30% growth contrasted with full-year high double-digit guidance, reflecting order lumpy nature.
- **Tariff Resilience**: Minimal impact on results; costs passed through without margin erosion.


**【CEO Summary Section】**
- Loar Holdings achieved a 12% year-over-year increase in Q1 2025 sales to $150 million, driven by strong performance across defense, commercial aftermarket, and commercial OEM segments.
- The company improved gross profit margin by 370 basis points in Q1, with adjusted EBITDA up $10 million compared to the prior year period.
- Updated 2025 guidance includes net sales of $482-$490 million (up from $480-$488 million) and adjusted EBITDA of $182-$185 million (up from $180-$184 million), reflecting confidence in demand and execution of value drivers.
- Management emphasized the proprietary nature of the product portfolio, with no single product accounting for more than 3% of annual revenue.
- The secondary cockpit barrier, a new product developed in partnership with Airbus, is expected to contribute significantly to future growth.

**【CFO Financial Commentary】**
- Defense sales increased 30% YoY in Q1, driven by new product launches and market share gains, though noted as lumpy due to ordering patterns.
- Commercial aftermarket sales rose 13% YoY and 15% sequentially, benefiting from strong air travel demand.
- Commercial OEM sales grew 8% YoY, with higher production rates for Boeing and Airbus platforms.
- Adjusted EBITDA margin reached 37.6% in Q1, up 120 basis points from 2024, supported by cost control and operating leverage.
- The company expects to close the acquisition of LMB Fans and Motors in Q3 2025, with no impact on current guidance.

**【Q&A Key Highlights】**
- **Commercial Aftermarket Pricing**: No pushback on price increases; demand remains strong with no inventory overhang.
- **Defense Growth**: Q1 30% growth is lumpy; full-year guidance assumes high double-digit growth despite potential volatility.
- **M&A Activity**: Management is actively pursuing acquisitions, with a strong pipeline and no need to increase leverage.
- **Tariffs Impact**: Minimal impact on results; costs are passed through to customers without margin erosion.
- **Production Rates**: Boeing MAX production rates are tracking higher than initial expectations, while Airbus remains stable.


Loar (LOAR)-13 May 25-2025 Q1 Earnings call transcript

- **Record 2024 Performance**: 15% revenue growth, $146M adjusted EBITDA, 200% free cash flow conversion.
- **2025 Guidance**: $480-488M net sales, 120 bps margin expansion to 37.5%, driven by defense growth and pricing power.
- **Strategic Wins**: LMB acquisition (Q3 2025), PMA pipeline acceleration, and 1-3% annual new product contribution.
- **Resilience**: Mitigated tariff risk via inventory pre-positioning, 99% U.S. secondary sourcing.
- **Growth Catalysts**: Defense market share gains, aftermarket secular trends, and OE production stabilization.


**【CEO Opening Remarks】**
- Loar Holdings achieved 15% YoY revenue growth in 2024, driven by strong aftermarket demand and defense market expansion.
- Emphasized margin improvement strategy: 660 basis points of margin expansion over 5 years, targeting 37.5% adjusted EBITDA margin in 2025.
- Highlighted new product launches (e.g., PMA parts) as key growth drivers, with 1-3% annual contribution to top-line growth.
- Announced pending acquisition of LMB Fans and Motors, expected to close in Q3 2025, adding high-margin defense exposure.

**【CFO Financial Highlights】**
- Q4 2024 net sales: $120 million (15% YoY growth), full-year 2024 net sales: $470 million (15% YoY growth).
- Adjusted EBITDA: $146 million (2024) / $42 million (Q4 2024), margin: 36.4%.
- Free cash flow conversion: 200% for 2024, driven by strong collections and capital discipline.
- 2025 guidance: Net sales $480-488 million, adjusted EBITDA $180-184 million, 120 bps margin expansion.

**【Q&A Key Takeaways】**
- **Aftermarket Strength**: Backlog remains robust, with 12-15% YoY growth in commercial aftermarket.
- **Defense Mix Impact**: Higher defense sales (24% of 2024 revenue) slightly dilute margins but provide long-term growth.
- **Tariff Mitigation**: Pre-positioned inventory for steel/aluminum offsets near-term cost increases; 99% of parts have U.S. secondary sourcing.
- **M&A Pipeline**: Expect 1-2 deals/year; LMB acquisition adds $15 million annual revenue with 50% EBITDA margin.
- **OE Visibility**: Boeing/Airbus production rates expected to stabilize at 30/50 aircraft/month, supporting mid-teen organic growth.

**【Outlook 2025】**
- **Revenue Growth**: 15-16% YoY, driven by defense (17-20% growth) and aftermarket secular trends.
- **Margin Expansion**: 120 bps to 37.5% adjusted EBITDA margin, fueled by pricing > inflation and operating leverage.
- **Leverage New Products**: PMA certifications expected to accelerate in H2 2025, contributing incremental growth.
- **Liquidity**: $55 million cash flow from ops (2024), $14 million CapEx, no material balance sheet risk.


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