Loar Holdings Inc.

Previous wording

The acquisition will be financed through additional borrowings under our existing Credit Agreement and cash on hand. In connection with the acquisition, we entered into the Commitment Letter, pursuant to which Blackstone Credit has committed, subject to the satisfaction of customary conditions, to provide us with an Incremental Loan Facility in an amount equal to the U.S. dollar equivalent of €400.0 million. The loans under the Incremental Loan Facility will mature on the same date, will amortize, and will bear the same interest rate as the existing term loans outstanding under the Credit Agreement. Blackstone Credit is a lender under the Credit Agreement and owns approximately 13% of our common stock.

Current wording

The acquisition will be financed through additional borrowings under our existing Credit Agreement and cash on hand. In connection with the acquisition, we entered into the Commitment Letter (as amended and restated), pursuant to which Blackstone Credit has committed, subject to the satisfaction of customary conditions, to provide us with an Incremental Loan Facility in an amount equal to the U.S. dollar equivalent of €400.0 million. The loans under the Incremental Loan Facility will mature on the same date, will amortize, and will bear the same interest rate as the existing term loans outstanding under the Credit Agreement. Blackstone Credit is a lender under the Credit Agreement and owns approximately 8% of our common stock.

Previous wording

The following table sets forth, for the three months ended March 31, 2025 and 2024, certain operating data of the Company, including presentation of the amounts as a percentage of net sales (in thousands unless otherwise indicated):

Current wording

The following table sets forth, for the three and six months ended June 30, 2025 and 2024, certain operating data of the Company, including presentation of the amounts as a percentage of net sales (in thousands unless otherwise indicated):

Previous wording

Net acquisition sales of $12.6 million for the three months ended March 31, 2025 is made up of AAI which was acquired on August 26, 2024. This represents 13.7% of the increase in total net sales for the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

Current wording

Net acquisition sales of $15.1 million for the three months ended June 30, 2025 is made up of AAI which was acquired on August 26, 2024. This represents 15.6% of the increase in total net sales for the three months ended June 30, 2025 compared to the three months ended June 30, 2024.

Previous wording

Cost of sales for the three months ended March 31, 2025 increased $7.5 million, or 15.9%, to $54.9 million compared to $47.4 million for the three months ended March 31, 2024. Cost of sales and the related percentage of net sales for the three months ended March 31, 2025 and 2024 were as follows (in thousands except for percentages):

Current wording

Cost of sales for the three months ended June 30, 2025 increased $7.4 million, or 15.0%, to $56.9 million compared to $49.5 million for the three months ended June 30, 2024 as a result of the increase in sales. Cost of sales and the related percentage of net sales for the three months ended June 30, 2025 and 2024 were as follows (in thousands except for percentages):

Previous wording

Cost of sales for the three months ended March 31, 2025 decreased 3.7% as a percentage of net sales to 47.9% from 51.6% in the comparable period last year. This decrease in cost of sales is primarily attributable to our operating leverage and execution of strategic value drivers, partially offset by higher amortization expense for intangible and other long-term assets.

Current wording

Cost of sales for the three months ended June 30, 2025 decreased 4.8% as a percentage of net sales to 46.2% from 51.0% in the comparable period last year. This decrease is primarily attributable to our operating leverage, execution of strategic value drivers and favorable sales mix, partially offset by higher amortization expense for intangible and other long-term assets.

Previous wording

Selling, general and administrative expenses increased by $10.2 million to $33.1 million, or 28.9% as a percentage of net sales, for the three months ended March 31, 2025 from $22.9 million, or 24.9% as a percentage of net sales, for the three months ended March 31, 2024. Selling, general and administrative expenses and the related percentage of net sales for the three months ended March 31, 2025 and 2024 were as follows (amounts in thousands except for percentages):

Current wording

Selling, general and administrative expenses increased by $9.6 million to $36.9 million, or 30.0% as a percentage of net sales, for the three months ended June 30, 2025 from $27.3 million, or 28.1% as a percentage of net sales, for the three months ended June 30, 2024. Selling, general and administrative expenses and the related percentage of net sales for the three months ended June 30, 2025 and 2024 were as follows (amounts in thousands except for percentages):

Previous wording

Transaction expenses for the three months ended March 31, 2025 and 2024 were $0.5 million and $0.2 million, respectively. Transaction costs can fluctuate depending on the size and number of acquisitions in each year.

Current wording

Transaction expenses for the three months ended June 30, 2025 and 2024 were $2.0 million and $0.9 million, respectively. During the three months ended June 30, 2025, approximately $0.9 million of costs related to the secondary offering were included in transaction expenses. Transaction costs can fluctuate depending on the size and number of acquisitions in each year.

Previous wording

Operating income for the three months ended March 31, 2025, was $26.1 million, or 22.8% as a percentage of net sales, compared to $21.4 million, or 23.3% as a percentage of net sales for the three months ended March 31, 2024. The increase in operating income is due to the factors discussed above.

Current wording

Operating income for the three months ended June 30, 2025, was $27.3 million, or 22.2% as a percentage of net sales, compared to $22.2 million, or 22.9% as a percentage of net sales for the three months ended June 30, 2024. The increase in operating income is due to the factors discussed above.

Previous wording

Interest expense for the three months ended March 31, 2025 decreased $11.3 million, or 63.6%, to $6.5 million compared to $17.7 million for the three months ended March 31, 2024. This decrease was attributable to the repayment of $284.6 million aggregate principal amount of the Company's Credit Agreement debt in May 2024 with a portion of the proceeds from our IPO and lower interest rates, partially offset by interest on the August 26, 2024 borrowing of the $360.0 million incremental term loan for the acquisition of AAI, of which $330.0 million of the outstanding term loans were repaid on December 15, 2024 with the proceeds from our Follow-on Offering and our cash from operations.

Current wording

Interest expense for the three months ended June 30, 2025 decreased $4.2 million, or 39.1%, to $6.5 million compared to $10.6 million for the three months ended June 30, 2024. This decrease was attributable to the repayment of $284.6 million aggregate principal amount of the Company's Credit Agreement debt in May 2024 with a portion of the proceeds from our IPO and lower interest rates.

Previous wording

The income tax provision for the three months ended March 31, 2025 was $4.4 million compared to $1.4 million for the three months ended March 31, 2024. The increase inincome tax provision was primarily driven by an increase in the Company's earnings in 2025 compared to 2024.

Current wording

The income tax provision for the three months ended June 30, 2025 was $4.1 million compared to $2.3 million for the three months ended June 30, 2024. The increase inincome tax provision was primarily driven by an increase in the Company's earnings in 2025 compared to 2024.

Previous wording

Net income for the three months ended March 31, 2025 was $15.3 million, or 13.4% as a percentage of net sales, compared to net income for the three months ended March 31, 2024 of $2.2 million, or 2.4% as a percentage of net sales. The improvement in results is primarily due to the factors discussed above.

Current wording

Net income for the three months ended June 30, 2025 was $16.7 million, or 13.6% as a percentage of net sales, compared to net income for the three months ended June 30, 2024 of $7.6 million, or 7.9% as a percentage of net sales. The improvement in results is primarily due to the factors discussed above.

Previous wording

Net organic sales represent net sales from our existing businesses for comparable periods and exclude net sales from acquisitions. We include net sales from new acquisitions in net organic sales from the 13th-month after the acquisition on a comparative basis with the prior period. Net acquisition sales for the three months ended March 31, 2025 represent net sales from acquisitions that were completed in 2024 and 2025 for which there are no comparable net sales during the prior year. We believe this measure provides an understanding of underlying sales trends as it provides net sales comparisons on a consistent basis. We do not believe our net sales are subject to significant seasonal variations. See Note 3, Acquisition and Note 10, Commitments and Contingencies of the Notes to Condensed Consolidated Financial Statements for further information on the Company’s acquisition activities.

Current wording

Net organic sales represent net sales from our existing businesses for comparable periods and exclude net sales from acquisitions. We include net sales from new acquisitions in net organic sales from the 13th-month after the acquisition on a comparative basis with the prior period. Net acquisition sales for the six months ended June 30, 2025 represent net sales from acquisitions that were completed in 2024 and 2025 for which there are no comparable net sales during the prior year. We believe this measure provides an understanding of underlying sales trends as it provides net sales comparisons on a consistent basis. We do not believe our net sales are subject to significant seasonal variations. See Note 3, Acquisition and Note 10, Commitments and Contingencies of the Notes to Condensed Consolidated Financial Statements for further information on the Company’s acquisition activities.

Previous wording

Net organic sales for the three months ended March 31, 2025 increased $10.2 million, or 11.1%, to $102.0 million as compared to $91.8 million for the three months ended March 31, 2024. The increase in net organic sales was primarily related to increases in defense sales ($5.4 million, an increase of 32.6%), aftermarket total commercial sales ($4.3 million, an increase of 12.3%), and OEM total commercial sales ($2.2 million, an increase of 6.8%), partially offset by a decline in sales of non-aerospace products ($1.7 million, a decrease of 20.6%). The increase in defense sales was primarily driven by increased market share due to new product launches and an increased demand environment for defense products globally. The increase in aftermarket total commercial sales was primarily due to the continuing recovery in commercial air travel demand. The increase in OEM total commercial sales was driven by increases in demand to support aircraft production for general aviation, wide-body and narrow-body aircraft, as an improving supply chain has allowed us to deliver parts that were previously held because our customers were experiencing bottlenecks in other areas of their supply chains.

Current wording

Net organic sales for the six months ended June 30, 2025 increased $21.2 million, or 11.2%, to $210.1 million as compared to $188.9 million for the six months ended June 30, 2024. The increase in net organic sales was primarily related to increases in aftermarket total commercial sales ($8.8 million, an increase of 12.4%), defense sales ($7.6 million, an increase of 20.3%), and OEM total commercial sales ($7.1 million, an increase of 11.0%), partially offset by a decline in non-aerospace sales ($2.3 million, a decrease of 14.2%). The increase in aftermarket total commercial sales was primarily due to the continuing recovery in commercial air travel demand. The increase in defense sales was primarily driven by increased market share due to new product launches and an increased demand for defense products globally. The increase in OEM total commercial sales was driven by increases in demand to support aircraft production for general aviation, wide-body and narrow-body aircraft. as an improving supply chain has allowed us to deliver parts that were previously held because our customers were experiencing bottlenecks in other areas of their supply chains.

Previous wording

Selling, general and administrative expenses increased by 4.0% as a percentage of net sales for the three months ended March 31, 2025 when compared to the same period in 2024. This was primarily driven by stock-based compensation expense, research and development expenses, amortization of intangible and other long-term assets, and infrastructure costs related to being a public company.

Current wording

Selling, general and administrative expenses increased by 2.8% as a percentage of net sales for the six months ended June 30, 2025 when compared to the same period in 2024. This was due to additional costs associated with being a public company including SOX compliance and additional organizational costs, amortization of intangible and other long-term assets, stock-based compensation expense, and research and development expenses,.

Previous wording

Our principal historical liquidity requirements have been for acquisitions, capital expenditures, servicing indebtedness and working capital needs. We fund our investing activities primarily from cash provided by our operating and financing activities. As of March 31, 2025, we had availability of $100 million of a delayed draw term loan commitment and a $50 million revolving line of credit. Based on our current outlook, we believe that net cash provided by operating activities and available borrowings under our Credit Agreement will be sufficient to fund our cash requirements for at least the next twelve months. As we continue to expand our business, including by any acquisitions we may make, we may in the future require additional working capital for increased costs. See “Credit Agreement” (below) for additional detail regarding our financing activities.

Current wording

Our principal historical liquidity requirements have been for acquisitions, capital expenditures, servicing indebtedness and working capital needs. We fund our investing activities primarily from cash provided by our operating and financing activities. As of June 30, 2025, we had availability of $100 million of a delayed draw term loan commitment and a $50 million revolving line of credit. Based on our current outlook, we believe that net cash provided by operating activities and available borrowings under our Credit Agreement will be sufficient to fund our cash requirements for at least the next twelve months. As we continue to expand our business, including through acquisitions we may make, we may in the future require additional working capital for increased costs. See “Credit Agreement” (below) for additional detail regarding our financing activities.

Previous wording

Net cash provided by operating activities in the three months ended March 31, 2025 and 2024 was $28.4 million and $10.8 million, respectively. The $17.5 million increase was primarily driven by an increase in net income of $13.1 million. Changes in certain other working capital accounts drove the remainder of the increase for the three months ended March 31, 2025.

Current wording

Net cash provided by operating activities in the six months ended June 30, 2025 and 2024 was $52.2 million and $17.9 million, respectively. The $34.3 million increase was primarily driven by an increase in net income of $22.1 million and the increase in non-cash operating items of approximately $12.0 million.

Previous wording

Net cash used in investing activities in the three months ended March 31, 2025 and 2024 of $1.8 million and $2.4 million, respectively, related to capital expenditures.

Current wording

Net cash used in investing activities in the six months ended June 30, 2025 and 2024 of $4.7 million and $3.8 million, respectively, was principally related to capital expenditures.

Previous wording

Net cash used in financing activities in the three months ended March 31, 2025 of $0.1 million related to financing leases. Net cash used in financing activities in the three months ended March 31, 2024 was principally related to payments on our Credit Agreement of $1.7 million.

Current wording

Net cash provided by financing activities in the six months ended June 30, 2025 of $1.7 million related primarily to stock option exercises. Net cash provided by financing activities in the six months ended June 30, 2024 of $37.6 million was principally related to proceeds from the Company's IPO of $325.7 million, offset by payments on our Credit Agreement of $286.3 million and financing leases.

Previous wording

On April 10, 2024, the Company amended the Credit Agreement to permit certain non-pro rata open market purchases of term loans pursuant to open market purchases. In addition, the Company also entered into that certain Master Open Market Purchase Agreement, by and between affiliates of lender and the Company (Master Open Market Purchase Agreement) to repurchase term loans on a non-pro rata basis subject to certain conditions as set forth therein.

Current wording

On April 10, 2024, the Credit Agreement was amended to permit certain non-pro rata open market purchases of term loans pursuant to open market purchases. In addition, we also entered into that certain Master Open Market Purchase Agreement, by and between affiliates of lender and the Company (Master Open Market Purchase Agreement) to repurchase term loans on a non-pro rata basis subject to certain conditions as set forth therein.

Previous wording

On May 3, 2024, the Company used a portion of the net proceeds from its IPO to repay $284.6 million aggregate principal amount of

Current wording

On May 3, 2024, a portion of the net proceeds from the IPO was used to repay $284.6 million aggregate principal amount of

Previous wording

term loans under its Credit Agreement plus accrued interest of $0.3 million. The Company wrote-off $0.8 million in unamortized debt issuance costs and expensed $0.8 million in refinancing costs associated with the amendment of the Credit Agreement during the three and six months ended June 30, 2024.

Current wording

term loans under the Credit Agreement plus accrued interest of $0.3 million. We wrote-off $0.8 million in unamortized debt issuance costs and expensed $0.8 million in refinancing costs associated with the amendment of the Credit Agreement during the three and six months ended June 30, 2024.

Previous wording

On May 10, 2024, the Credit Agreement was amended to extend the maturity date to May 10, 2030 from April 2, 2026 and reduce the applicable margin by between 2.0 and 2.5 percentage points based on the Company’s leverage ratio. At the Company’s election, interest on loans will accrue at the SOFR rate plus the applicable margin of 4.75% or at the base rate plus the applicable margin of 3.75% as long as the Company maintains a leverage ratio of less than 5.5 to 1. The Company also increased the existing availability under its delayed draw term loan commitment to $100 million, which terminates if not drawn upon by May 10, 2026. In addition, the existing revolving line of credit under the Credit Agreement was replaced with a new revolving credit commitment of $50 million. The unused portion of the revolving line of credit carries a commitment fee of 0.375%. Loans outstanding under the revolving line of credit, if any, mature on May 10, 2029. The Company capitalized approximately $0.9 million in debt issuance costs associated with the amendment during the three and six months ended June 30, 2024.

Current wording

On May 10, 2024, the Credit Agreement was amended to extend the maturity date to May 10, 2030 from April 2, 2026 and reduce the applicable margin by between 2.0 and 2.5 percentage points based on the Company’s leverage ratio. At our election, interest on loans will accrue at the SOFR rate plus the applicable margin of 4.75% or at the base rate plus the applicable margin of 3.75% as long as the leverage ratio of less than 5.5 to 1 is maintained. Also, the existing availability under the delayed draw term loan commitment was increased to $100 million, which terminates if not drawn upon by May 10, 2026. In addition, the existing revolving line of credit under the Credit Agreement was replaced with a new revolving credit commitment of $50 million. The unused portion of the revolving line of credit carries a commitment fee of 0.375%. Loans outstanding under the revolving line of credit, if any, mature on May 10, 2029. Debt issuance costs associated with the amendment of approximately $0.9 million were capitalized during the three and six months ended June 30, 2024.

Previous wording

On August 26, 2024, the Credit Agreement was amended to make available to the Company an incremental term loan in an aggregate principal amount equal to $360 million for purposes of (i) paying a portion of the consideration payable by it pursuant to the terms of that certain purchase agreement (the "Purchase Agreement") pursuant to which the Company agreed to purchase from AAI Parent all the issued and outstanding equity interests of AAI, (ii) paying fees and expenses incurred in connection with the foregoing, and (iii) otherwise to fund working capital and general corporate purposes.

Current wording

On August 26, 2024, the Credit Agreement was amended to make available an incremental term loan in an aggregate principal amount equal to $360 million for purposes of (i) paying a portion of the consideration payable by it pursuant to the terms of that certain purchase agreement (the "Purchase Agreement") pursuant to which the Company agreed to purchase from AAI Parent all the issued and outstanding equity interests of AAI, (ii) paying fees and expenses incurred in connection with the foregoing, and (iii) otherwise to fund working capital and general corporate purposes.

Previous wording

On December 17, 2024, the Company used the net proceeds from its Follow-on Offering and cash from operations to repay $330.0 million aggregate principal amount of term loans under its Credit Agreement plus accrued interest of $1.5 million. The Company wrote-off $4.8 million in unamortized debt issuance costs as a result.

Current wording

On December 17, 2024, the net proceeds from the Follow-on Offering and cash from operations were used to repay $330.0 million aggregate principal amount of term loans under the Credit Agreement plus accrued interest of $1.5 million. Unamortized debt issuance costs $4.8 million were written off as a result.

Previous wording

In connection with the pending LMB acquisition expected to close in the third quarter of 2025, we entered into the Commitment Letter. See above under “—Recent Developments.”

Current wording

On March 7, 2025, in connection with the pending LMB acquisition expected to close in the third quarter of 2025, we entered into the Commitment Letter (as amended and restated). See above under “—Recent Developments.”

Previous wording

We have future obligations under various contracts relating to debt and interest payments, finance and operating leases and our post-retirement benefit plan. During the three months ended March 31, 2025, there were no material changes to these obligations, other than the pending LMB acquisition discussed under “—Recent Developments”. For a description of our other obligations and commitments, see our December 31, 2024 consolidated financial statements reported in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, filed on March 31, 2025.

Current wording

We have future obligations under various contracts relating to debt and interest payments, finance and operating leases and our post-retirement benefit plan. During the six months ended June 30, 2025, there were no material changes to these obligations, other than the pending LMB acquisition discussed under “—Recent Developments”. For a description of our other obligations and commitments, see our December 31, 2024 consolidated financial statements reported in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, filed on March 31, 2025.

Previous wording

Adjusted EBITDA, and Adjusted EBITDA Margin in isolation and specifically by using other U.S. GAAP measures, such as net sales and operating profit, to measure our operating performance. EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin are not measurements of financial performance under U.S. GAAP, and they should not be considered as alternatives to net income or cash flow from operations determined in accordance with U.S. GAAP. Our calculations of EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin may not be comparable to the calculations of similarly titled measures reported by other companies.

Current wording

Because of these limitations, EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin should not be considered as measures of cash available to us to invest in the growth of our business. Management compensates for these limitations by not viewing EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin in isolation and specifically by using other U.S. GAAP measures, such as net sales and operating profit, to measure our operating performance. EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin are not measurements of financial performance under U.S. GAAP, and they should not be considered as alternatives to net income or cash flow from operations determined in accordance with U.S. GAAP. Our calculations of EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin may not be comparable to the calculations of similarly titled measures reported by other companies.

Previous wording

The following table sets forth a reconciliation of net income to EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin for the three months ended March 31, 2025 and 2024 (in thousands unless otherwise indicated):

Current wording

The following table sets forth a reconciliation of net income to EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin for the three and six months ended June 30, 2025 and 2024 (in thousands unless otherwise indicated):

Previous wording

Represents third party transaction-related costs for acquisitions comprising deal fees, legal, financial and tax due diligence expenses, and valuation costs that are required to be expensed as incurred.

Current wording

Represents third party transaction-related costs for acquisitions comprising deal fees, legal, financial and tax due diligence expenses, and valuation costs that are required to be expensed as incurred. During the three and six months ended June 30, 2025, approximately $0.9 million of costs related to the secondary stock offering from which we did not receive any proceeds were also included in transaction expenses.