Loar Holdings Inc.

Previous wording

Important factors that could cause actual results to differ materially from the forward-looking statements made in this Quarterly Report on Form 10-Q include but are not limited to: the almost exclusive focus of our business on the aerospace and defense industry; our reliance on certain customers; failure to complete or successfully integrate acquisitions; the sensitivity of our business to the number of flight hours that our customers’ planes spend aloft and our customers’ profitability, both of which are affected by general economic conditions; future geopolitical or other worldwide events; cyber-security threats and natural disasters; the U.S. defense budget and risks associated with being a government supplier including government audits and investigations; failure to maintain government or industry approvals; tariffs on certain imports to the United States and other potential changes to U.S. tariff and import/export regulations; our indebtedness; potential environmental liabilities; liabilities arising in connection with litigation; increases in raw material costs, taxes and labor costs that cannot be recovered in product pricing; risks and costs associated with our international sales and operations; and other factors. Refer to Part II, Item 1A included in this Quarterly Report on Form 10-Q and to Part I, Item 1A of the Annual Report on Form 10-K for additional information regarding the foregoing factors that may affect our business.

Current wording

Important factors that could cause actual results to differ materially from the forward-looking statements made in this Quarterly Report on Form 10-Q include but are not limited to: the almost exclusive focus of our business on the aerospace and defense industry; our heavy reliance on certain customers for a significant portion of our sales; the fact that we have in the past consummated acquisitions and our intention to continue to pursue acquisitions, and that our business may be adversely affected if we cannot consummate acquisitions on satisfactory terms, or if we cannot effectively integrate acquired operations; and other factors. Refer to Part II, Item 1A included in this Quarterly Report on Form 10-Q and to Part I, Item 1A of the Annual Report on Form 10-K for additional information regarding the foregoing factors that may affect our business.

Previous wording

The products we manufacture cover a diverse range of applications supporting nearly every major aircraft platform in use today and include auto throttles, lap-belt airbags, two- and three-point seat belts, water purification systems, fire barriers, polyimide washers and bushings, latches, hold-open and tie rods, temperature and fluid sensors and switches, carbon and metallic brake discs, fluid and pneumatic-based ice protection, RAM air components, sealing solutions and motion and actuation devices, customized edge-lighted panels and knobs and annunciators for incandescent and LED illuminated pushbutton switches, among others.

Current wording

The products we manufacture cover a diverse range of applications supporting nearly every major aircraft platform in use today and include auto throttles, lap-belt airbags, two- and three-point seat belts, water purification systems, fire barriers, polyimide washers and bushings, latches, interior securing devices, hold-open and tie rods, temperature and fluid sensors and switches, carbon and metallic brake discs, fluid and pneumatic-based ice protection, RAM air components, sealing solutions and motion and actuation devices, customized edge-lighted panels and knobs and annunciators for incandescent and LED illuminated pushbutton switches, high-performance fans and cooling devices, lighting, Human-Machine Interface products, and bespoke lighting systems, among others.

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 (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.

Current wording

existing Credit Agreement and cash on hand. The Delayed Draw Term Loans 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.

Previous wording

As we look to 2026, we anticipate net sales growth to be driven by organic growth, in particular the conversion of high levels of backlog of our existing products, and the impact from strategic acquisitions. Backlog primarily consists of firm orders for products that have not yet shipped. Continued inflationary pressures and supply chain disruptions may lead to higher material and labor costs although these pressures and disruptions have not had a material effect on our year-to-date results of operations or capital resources, and we do not expect them to materially affect our outlook or business goals. So far in 2025, we have continued and plan to continue our commitment to develop new products and services, further market penetration, and pursue an aggressive acquisition strategy while seeking to maintain our financial strength and flexibility.

Current wording

As we look to the rest of 2026, we anticipate net sales growth to be driven by organic growth, in particular the conversion of high levels of backlog of our existing products, and the impact from strategic acquisitions. Backlog primarily consists of firm orders for products that have not yet shipped. Continued inflationary pressures and supply chain disruptions may lead to higher material and labor costs although these pressures and disruptions have not had a material effect on our year-to-date results of operations or capital resources, and we do not expect them to materially affect our outlook or business goals. So far in 2026, we have continued and plan to continue our commitment to develop new products and services, penetrate markets further, and pursue an aggressive acquisition strategy while seeking to maintain our financial strength and flexibility.

Previous wording

The following table sets forth, for the three and nine months ended September 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):

Current wording

The following table sets forth, for the three months ended March 31, 2026 and 2025, 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 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 year-period. Net acquisition sales for the three months ended September 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 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 three months ended March 31, 2026 represent net sales from acquisitions that were completed in 2025 and 2026 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 2, Acquisitions, 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 September 30, 2025 increased $11.5 million or 11.1%, to $115.0 million as compared to $103.5 million for the three months ended September 30, 2024. The increase in net organic sales was primarily related to increases in aftermarket total commercial sales ($6.0 million, an increase of 15.4%), OEM total commercial sales ($3.0 million, an increase of 8.3%), and defense sales ($2.7 million, an increase of 12.2%), partially offset by a decline in non-aerospace sales ($0.2 million, a decrease of 2.4%). The increase in aftermarket total commercial sales was primarily due to increases in global 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. 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.

Current wording

Net organic sales for the three months ended March 31, 2026 increased $13.0 million or 11.4%, to $127.7 million as compared to $114.7 million for the three months ended March 31, 2025. The increase in net organic sales was primarily related to increases in OEM total commercial sales ($7.8 million, an increase of 22.0%), aftermarket total commercial sales ($6.2 million, an increase of 14.1%), and sales of non-aerospace products ($3.0 million, an increase of 46.4%), partially offset by a decline in defense sales ($4.0 million, a decrease of 13.9%). The increase in OEM commercial sales is driven by the increased production rates and deliveries for both narrow-body and wide-body aircraft. The increase in aftermarket total commercial sales was attributable to increases in commercial air travel demand. The increase in sales of non-aerospace products was primarily driven by higher sales of components for industrial gas-turbines. The decrease in defense sales was primarily attributable to the variability of revenue distribution for defense-related products, which can vary significantly from period to period.

Previous wording

Net acquisition sales of $11.7 million for the three months ended September 30, 2025 is made up of AAI and Beadlight which were acquired on August 26, 2024 and July 28, 2025, respectively. This represents 11.3% of the increase in total net sales for the three months ended September 30, 2025 compared to the three months ended September 30, 2024.

Current wording

Net acquisition sales of $28.4 million for the three months ended March 31, 2026 are made up of LMB which was acquired on December 23, 2025 and Harper Engineering which was acquired on January 21, 2026. This represents 24.7% of the increase in total net sales for the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

Previous wording

Cost of sales for the three months ended September 30, 2025 increased $9.4 million, or 18.5%, to $60.0 million compared to $50.6 million for the three months ended September 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 September 30, 2025 and 2024 were as follows (in thousands except for percentages):

Current wording

Cost of sales for the three months ended March 31, 2026 increased $21.9 million, or 39.8%, to $76.8 million compared to $54.9 million for the three months ended March 31, 2025. Cost of sales and the related percentage of net sales for the three months ended March 31, 2026 and 2025 were as follows (in thousands except for percentages):

Previous wording

Cost of sales for the three months ended September 30, 2025 decreased 1.6% as a percentage of net sales to 47.3% from 48.9% in the comparable period last year. This decrease is primarily attributable to our operating leverage, execution of strategic value drivers, favorable sales mix, lower acquisition and facility integration and inventory step-up amortization costs, partially offset by higher amortization expense for intangible and other long-term assets.

Current wording

Cost of sales for the three months ended March 31, 2026 increased 1.3% as a percentage of net sales to 49.2% from 47.9% in the comparable period last year. This increase in cost of sales is primarily attributable to the recognition of inventory step-up related to the LMB and Harper Engineering acquisitions, and higher amortization expense for intangible and other long-term assets, partially offset by our operating leverage and execution of our strategic value drivers.

Previous wording

Selling, general and administrative expenses increased by $5.6 million to $35.8 million, or 28.2% as a percentage of net sales, for the three months ended September 30, 2025 from $30.2 million, or 29.2% as a percentage of net sales, for the three months ended September 30, 2024. Selling, general and administrative expenses and the related percentage of net sales for the three months ended September 30, 2025 and 2024 were as follows (amounts in thousands except for percentages):

Current wording

Selling, general and administrative expenses increased by $11.4 million to $44.5 million, or 28.5% as a percentage of net sales, for the three months ended March 31, 2026 from $33.1 million, or 28.9% as a percentage of net sales, for the three months ended March 31, 2025. Selling, general and administrative expenses and the related percentage of net sales for the three months ended March 31, 2026 and 2025 were as follows (amounts in thousands except for percentages):

Previous wording

Selling, general and administrative expenses decreased by 1.0% as a percentage of net sales for the three months ended September 30, 2025 when compared to the same period in 2024. This was principally due to the leveraging of fixed costs, partially offset by higher research and development expense.

Current wording

Selling, general and administrative expenses decreased by 0.4% as a percentage of net sales for the three months ended March 31, 2026 when compared to the same period in 2025. This was primarily driven by the leveraging of fixed costs partially offset by increased amortization of intangible assets as a result of the LMB and Harper Engineering acquisitions.

Previous wording

Transaction expenses for the three months ended September 30, 2025 and 2024 were $1.8 million and $1.4 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 March 31, 2026 and 2025 were $1.2 million and $0.5 million, respectively. This increase is primarily related to the acquisition of Harper Engineering that was consummated in January 2026. Transaction costs can fluctuate depending on the size and number of acquisitions in each year.

Previous wording

Operating income for the three months ended September 30, 2025, was $29.0 million, or 22.9% as a percentage of net sales, compared to $22.8 million, or 22.0% as a percentage of net sales for the three months ended September 30, 2024. The increase in operating income is due to the factors discussed above.

Current wording

Operating income forthe three months ended March 31, 2026, was $33.5 million, or 21.5% as a percentage of net sales, compared to $26.1 million, or 22.8% as a percentage of net sales for the three months ended March 31, 2025. The increase in operating income is due to the factors discussed above.

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 September 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.

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 March 31, 2026, we had availability of $35 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.

Previous wording

Net cash provided by operating activities in the nine months ended September 30, 2025 and 2024 was $81.9 million and $34.2 million, respectively. The $47.7 million increase was primarily driven by an increase in net income of $41.1 million and the increase in non-cash operating items of approximately $8.7 million, partially offset by an increase in working capital.

Current wording

Net cash provided by operating activities in the three months ended March 31, 2026 and 2025 was $30.9 million and $28.4 million, respectively. The $2.5 million increase was primarily driven by higher noncash items included in net income partially offset by an increase in working capital.

Previous wording

On August 1, 2025, the Credit Agreement was amended to reduce the applicable margin by 0.5%. At our election, interest on loans will accrue at the SOFR rate plus the applicable margin of 4.25% or at the base rate plus the applicable margin of 3.25% as long as the Company maintains a leverage ratio of less than 5.5 to 1.

Current wording

On August 1, 2025, the Credit Agreement was amended to reduce the applicable margin by 0.5%. At the Company's election, interest on loans will accrue at the SOFR rate plus the applicable margin of 4.25% or at the base rate plus the applicable margin of 3.25% as long as the Company maintains a leverage ratio of less than 5.5 to 1.

Previous 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.

Current wording

On December 23, 2025, the Credit Agreement was amended to make available to the Company an incremental term loan in an aggregate principal amount equal to $445 million for purposes of (i) paying a portion of the consideration for the LMB acquisition, (ii) financing the payment of LMB debt, (iii) paying fees and expenses incurred in connection with the foregoing, and (iv) otherwise to fund working capital and general corporate purposes.

Previous wording

At September 30, 2025, there was $281.4 million outstanding under the Credit Agreement, and there remained availability of $100.0 million in delayed draw term loan commitments and $50.0 million in revolving line of credit.

Current wording

At March 31, 2026, there was $964.7 million outstanding under the Credit Agreement, and there remained availabilityof $35 million in delayed draw term loan commitments and $50 million in revolving line of credit.

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 nine months ended September 30, 2025, there were no material changes to these obligations, other than theadditional borrowing we expect to incur for 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 three months ended March 31, 2026, there were no material changes to these obligations, other than the contingent purchase consideration that may be paid to the sellers of Harper Engineering if certain financial targets for the years 2026 to 2031 are achieved, as discussed in Note 2, Acquisitions, of the Notes to Condensed Consolidated Financial Statements. For a description of our other obligations and commitments, see our consolidated financial statements reported in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

Previous wording

A complete and comprehensive discussion of our most critical accounting policies that require management to make judgments about matters that are inherently uncertain was included in Management’s Discussion and Analysis of Financial Condition and Results of Operations– Critical Accounting Estimates disclosed in Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024 which was filed on March 31, 2025. Refer to Note 2, Basis of Presentation, of the notes to the condensed consolidated financial statements included herein for updates to disclosures of accounting standards recently adopted or required to be adopted in the future.

Current wording

A complete and comprehensive discussion of our most critical accounting policies that require management to make judgments about matters that are inherently uncertain was included in Management’s Discussion and Analysis of Financial Condition and Results of Operations– Critical Accounting Estimates disclosed in Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2025 which was filed on March 2, 2026. Refer to Note 1, Basis of Presentation, of the Notes to Condensed Consolidated Financial Statements included herein for updates to disclosures of accounting stand ards recently adopted or required to be adopted in the future.

Previous wording

The following table sets forth a reconciliation of net income to EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin for the three and nine months ended September 30, 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 months ended March 31, 2026 and 2025 (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. During the nine months ended September 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.

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.