Madison Air Solutions Corp
For the period ended Jun 30, 2026. Filed Jul 30, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Jul 30, 2026
MAIR$23.04+7.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-12.
0001628280-26-033863
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-07-30.
0001628280-26-050772
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 136 previous paragraphs and 137 current paragraphs.
41 unchanged; 44 reworded; 48 added; 44 removed; 7 previous and 4 current paragraphs rearranged.
Tables are not compared: 15 previous and 14 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (48)
Current report
2026 2Q Madison Air 4
Current report
On April 17, 2026, the Company completed its IPO of 95,096,154 shares of Class A common stock, which includes shares issued after the underwriters fully exercised their option, at an offering price of $27.00 per share. In addition, the Company issued 3,703,704 shares of Class B common stock under a concurrent private placement at a price of $27.00 per share. The Company received net proceeds from the IPO and concurrent private placement of $2,584.2 million after deducting underwriting discounts and commissions (excluding offering related expenses).
Current report
Prior to the consummation of the IPO, Madison Air Solutions Corporation engaged in a series of organizational transactions (the “Organizational Transactions”), including (i) a spin-off of Madison Industries IAQ Solutions Corporation (the "Predecessor") from Madison Industries Holdings LLC ("Holdings" or "Madison Industries") whereby ownership interests in the Predecessor were distributed up from Madison Industries US Holdings Corporation to Holdings, which then contributed such ownership interests in the Predecessor to Madison Air Solutions Corporation in exchange for shares of its Class B common stock and, as a result, the Predecessor became a wholly owned subsidiary of the Company and (ii) certain holders of non-controlling interests in intermediary holding entities between the Predecessor and Madison Indoor Air Solutions LLC ("Madison IAS") engaged in a series of transactions that resulted in such holders of non-controlling interests receiving shares of the Company’s Class A common stock in exchange for their respective non-controlling interests in the intermediary holding entities and, as a result, each entity in the chain below the Company became a wholly owned subsidiary thereof.
Current report
Following the Organizational Transactions, the Company's capital structure consists of Class A and Class B common stock. The two classes of stock are identical in all economic respects, including rights to dividends and distributions, but differ with respect to voting rights. Holders of Class A common stock are entitled to one vote per share, while holders of Class B common stock are entitled to ten votes per share. As of June 30, 2026, Holdings retained approximately 64.7% of the economic interests in the Company and controlled approximately 95.2% of the voting power of the Company's outstanding common stock.
Current report
Total backlog was $2,868.4 million as of June 30, 2026, an increase of 32.7% compared to December 31, 2025 and 133.0% compared to June 30, 2025. The increases were driven primarily by Commercial backlog, which represented substantially all of the growth for each period presented. Residential backlog remained relatively stable during each period. The growth in Commercial backlog reflects continued wins across several key technologies including air, liquid, and hybrid cooling, air handling and air movement.
Current report
Total orders were $1,331.4 million and $2,645.3 million for the three and six months ended June 30, 2026, respectively, compared to $870.3 million and $1,752.6 million for the corresponding prior-year periods. The increases were driven primarily by broad-based growth across the Commercial segment's end markets, including continued strength in data centers related demand. Comparability of the year-over-year periods was also impacted by the acquisition of Research Products Corporation ("AprilAire," and such acquisition, the "AprilAire Acquisition") on May 7, 2025, which contributed approximately $45.6 million and $246.3 million of Commercial and Residential orders, respectively, during the six months ended June 30, 2026, compared to approximately $16.5 million and $80.9 million of Commercial and Residential orders, respectively, during the period from May 7, 2025 through June 30, 2025.
Current report
2026 2Q Madison Air 7 generated orders of $36.3 million, that would have been accounted for in Madison Air’s Commercial segment had we owned AprilAire and its associated commercial brands during the period.
Current report
(1)Exclusive of intangible amortization shown separately.
Current report
(2)Inclusive of equity appreciation rights expense of $16.3 million and $22.1 million for the three months ended June 30, 2026 and 2025, respectively, and $26.7 million and $27.3 million for the six months ended June 30, 2026 and 2025, respectively.
Current report
2026 2Q Madison Air 8
Current report
The AprilAire Acquisition also impacted the comparability of gross profit and operating expenses between periods. Incremental costs of goods sold, selling, general and administrative expenses and technology intangible amortization attributable to the AprilAire Acquisition were approximately $26.1 million, $11.2 million, and $0.8 million respectively.
Current report
Interest and financing expenses decreased $4.3 million compared to the corresponding prior-year period. Interest and financing expenses included a $27.7 million loss on debt extinguishment in connection with the repayment and modification of our Credit Agreement. Proceeds from the IPO and concurrent private placement, together with cash on hand, were used to repay $2,425.7 million of remaining principal under the Company's Initial Term Loan and repay $200.0 million in principal under the Company's Incremental Term Loan. Excluding the impact of the debt extinguishment, interest expense decreased $32.0 million, driven by lower average borrowings following the debt repayment transactions and lower interest rate on the Incremental Term Loan.
Current report
Income tax expense was $40.6 million for the three months ended June 30, 2026, an increase of $22.1 million compared to income tax expense of $18.5 million for the three months ended June 30, 2025. The decrease in the effective tax rate for the three months ended June 30, 2026 was driven by lower overall state tax impacts, primarily discrete items recorded in the second quarter of 2025; the decrease is partially offset by discrete write-offs in the second quarter of 2026 for executive compensation that is no longer deductible for tax purposes after the Company became a public business entity.
Current report
For the six months ended June 30, 2026. Net sales increased $405.0 million, or 26.8%, compared to the six months ended June 30, 2025. The AprilAire Acquisition drove an aggregate $213.1 million of the net sales increase year-over-year. The remaining $191.9 million was attributable to organic growth in our Commercial segment, partially offset by a modest organic net sales decline in our Residential segment. Refer to "Results of Operations by Segment" below for a discussion of Net Sales by segment.
Current report
The AprilAire Acquisition also impacted the comparability of gross profit and operating expenses between periods. Incremental costs of goods sold, selling, general and administrative expenses and technology intangible amortization attributable to the AprilAire Acquisition were approximately $106.4 million, $38.6 million, and $2.8 million respectively.
Current report
Interest and financing expenses increased $20.6 million compared to the corresponding prior-year period. Interest and financing expenses included a $27.7 million loss on debt extinguishment recognized in connection with the repayment and modification of the Credit Agreement in 2026 as described above. Excluding the impact of the debt extinguishment, interest expense decreased $7.1 million driven by lower average borrowings following the debt repayment transactions and lower interest rate on the Incremental Term Loan.
Current report
Income tax expense was $57.9 million for the six months ended June 30, 2026, an increase of $24.7 million compared to income tax expense of $33.2 million for the six months ended June 30, 2025. The increase in the effective tax rate for the six months ended June 30, 2026 is primarily due to discrete write-offs in the second quarter of 2026 for executive compensation that is no longer deductible for tax purposes.
Current report
Commercial. Commercial segment net sales increased $126.5 million, or 23.8%, for the three months ended June 30, 2026, compared to the three months ended June 30, 2025. Organically, our Commercial net sales increased by 22.3%
Current report
2026 2Q Madison Air 9 driven by broad-based growth across the segment, led by air, liquid and hybrid cooling, custom air handling, and air movement solutions. These increases were partially offset by modest volume declines in commercial dehumidification. Acquisitions contributed $9.3 million, or 1.7%, of additional net sales for the three months ended June 30, 2026.
Current report
For the period from April 1, 2025 to May 7, 2025, AprilAire's commercial brands generated net sales of $9.9 million, that would have been accounted for in the Company's Commercial segment had we owned AprilAire and its associated commercial brands during such period.
Current report
Net sales for our Commercial segment increased $242.7 million, or 23.7%, for the six months ended June 30, 2026, compared to the six months ended June 30, 2025. Organically, our Commercial net sales increased by 19.8% driven by broad-based growth across the segment, led by air, liquid and hybrid cooling, air movement, and energy efficiency solutions. These increases were partially offset by modest volume declines in commercial dehumidification. Acquisitions contributed $36.1 million, or 3.5%, of additional net sales for the six months ended June 30, 2026.
Current report
For the period from January 1, 2025 to May 7, 2025, AprilAire's commercial brands generated net sales of $34.2 million, that would have been accounted for in the Company's Commercial segment had we owned AprilAire and its associated commercial brands during such period.
Current report
Commercial segment Adjusted EBITDA increased $49.7 million, or 17.5%, for the six months ended June 30, 2026, compared to the six months ended June 30, 2025. Acquisitions contributed $9.2 million of incremental Commercial segment Adjusted EBITDA to the Commercial segment growth. Excluding the AprilAire Acquisition, Commercial Segment Adjusted EBITDA growth was mainly driven by volume growth.
Current report
For the period from April 1, 2025 to May 7, 2025, AprilAire's residential brands generated net sales of $38.4 million, that would have been accounted for in the Company's Residential segment had we owned AprilAire and its associated commercial brands during such period.
Current report
Residential segment Adjusted EBITDA increased $25.9 million, or 35.6%, for the three months ended June 30, 2026, compared to the three months ended June 30, 2025. Acquisitions contributed $21.8 million of incremental Adjusted EBITDA. Excluding the AprilAire Acquisition, Residential segment Adjusted EBITDA increased by $4.1 million due to productivity, pricing and favorable net tariff impacts partially offset by modest volume declines.
Current report
Net sales for our Residential segment increased $164.6 million, or 34.0%, for the six months ended June 30, 2026, compared to the six months ended June 30, 2025. Organically, our Residential net sales decreased by 3.4% driven by modest volume declines in our professional distribution channels for ventilation solutions, net of price increases. Acquisitions contributed to $177.0 million, or 36.5%, of additional net sales for the six months ended June 30, 2026.
Current report
For the period from January 1, 2025 to May 7, 2025, AprilAire's residential brands generated net sales of $144.6 million, that would have been accounted for in the Company's Residential segment had we owned AprilAire and its associated commercial brands during such period.
Current report
Residential segment Adjusted EBITDA increased $62.0 million, or 53.5%, for the six months ended June 30, 2026, compared to the six months ended June 30, 2025. Acquisitions contributed $59.3 million of additional Residential segment Adjusted EBITDA. Excluding the AprilAire Acquisition, Residential segment Adjusted EBITDA increased by $2.7 million.
Current report
2026 2Q Madison Air 11
Current report
2026 2Q Madison Air 12 implementation and $0.4 million in consulting fees for productivity improvement projects. For the six months ended June 30, 2025, these services primarily included $1.2 million in consulting fees for productivity improvement projects, $0.4 million in legal fees, and $0.5 million in leadership recruiting and relocation fees.
Current report
(9)Represents a one-time gain on insurance proceeds from damage to one of our manufacturing facilities.
Current report
(10)Represents the write-off of a deferred tax asset related to compensation deductions that are no longer expected to be realized due to limitation on deductibility following the IPO.
Current report
(6)Represents foreign currency gains and losses on corporate intercompany loans, gains and losses on sale of fixed assets, gains and losses on marketable securities and other non-operating items. For the three months ended June 30, 2026, non-operating expenses (income) included $1.0 million foreign currency translation gain on intercompany loans, offset by $0.4 million loss on disposal of fixed assets. For the three months ended June 30, 2025, non-operating expenses (income) included $0.8 million gain on available-for-sale marketable securities, and $1.6 million gain on disposal of fixed assets offset by a $1.9 million foreign currency translation loss on intercompany loans. For the six months ended June 30, 2026, non-operating expenses (income) included $0.9 million foreign currency translation gain on intercompany loans offset by a $0.5 million loss on disposal of fixed assets. For the six months ended June 30, 2025, non-operating expenses (income) included $1.9 million gain on available-for-sale marketable securities, $1.3 million gain on divestiture of Nortek Global HVAC and its subsidiary, $1.4 million gain on disposal of fixed assets, $0.3 million foreign currency translations loss on intercompany loans and $0.2 million of pension expense.
Current report
2026 2Q Madison Air 13
Current report
(9)Represents one-time gain on insurance proceeds from damage to one of our manufacturing facilities.
Current report
2026 2Q Madison Air 14
Current report
We believe these sources of liquidity will be sufficient to meet our operating requirements, capital expenditures and debt service requirements for the next twelve months.
Current report
We maintain a debt structure that consists of a term loan, senior notes, and a revolving credit facility. As of June 30, 2026, total debt outstanding consisted of $1,345.6 million under our Term Loans, $1,035.0 million under our Secured Notes and $700.0 million under our Unsecured Notes. There were no borrowings outstanding under our revolving credit facility, and
Current report
2026 2Q Madison Air 15
Current report
$12.9 million of letters of credit were outstanding of which $5.7 reduced our borrowing capacity, leaving substantial available capacity as of June 30, 2026.
Showing the first 40 of 48 passages. Open the source sections for the rest.
Removed paragraphs (44)
Previous report
This Quarterly Report on Form 10-Q covers a period prior to the completion of Madison Air Solutions Corporation’s initial public offering (“IPO”) on April 17, 2026. In connection with the completion of the IPO, we effected a series of organizational transactions described in the unaudited consolidated financial statements included herein.
Previous report
2026 1Q Madison Air 4
Previous report
Leverage. We are a highly leveraged company, and our interest expense is significant. As of March 31, 2026, we had $5,712.5 million of aggregate principal amount of outstanding indebtedness and $12.9 million of letters of credit outstanding, of which $5.7 million reduces our borrowing capacity, resulting in up to $334.3 million of additional borrowing capacity available under the Revolving Credit Facility. If interest rates increase, certain portions of the debt service obligations on the loans will increase and cash required for servicing indebtedness will increase. Our significant indebtedness limits our flexibility in planning for, or reacting to, changes in our business and future business opportunities since a substantial portion of our cash flow from operations will be dedicated to servicing our indebtedness, and this may place us at a disadvantage to competitors who are less leveraged. Our leverage also makes us more vulnerable to a downturn in our business, industry or the economy in general.
Previous report
The Company received net proceeds from the IPO and concurrent private placement of $2,584.2 million after deducting underwriting fees and commissions (excluding offering related expenses). Proceeds from the IPO and private placement, together with $77.1 million of cash on hand, were used to repay $2,661.2 million of outstanding borrowings under the Initial Term Loan Facility and Incremental Term Loan Facility, consisting of $2,425.7 million of principal and $35.5 million of accrued interest on our Initial Term Loan and $158.4 million of principal and $41.6 million of accrued interest on our Incremental Term Loan..
Previous report
As of March 31, 2026 our consolidated backlog was $2,520.2 million, an increase of $359.4 million or 16.6% from December 31, 2025 and an increase of $1,359.6 million or 117.1% from March 31, 2025.The increases were fueled by backlog related to our Commercial segment which closed at $2,456.5 million as of March 31, 2026, an increase of $1,365.2 million or 125.1% from March 31, 2025. Orders related to our Commercial segment increased $316.0 million, or 46.6%, to $993.9 million as of March 31, 2026 compared to the three months ended March 31, 2025. This growth for both backlog and orders builds on momentum from 2025, with progress across several key technologies including thermal management, where we continue to win new projects and customers in the air, liquid, and hybrid cooling market, as well as air handling and energy efficiency.
Previous report
Residential segment backlog remained relatively flat from December 31, 2025 to March 31, 2026, while orders grew $115.6 million, or 56.6%, to $320.0 million, compared to the three months ended March 31, 2025.
Previous report
2026 1Q Madison Air 7
Previous report
Comparison of the Three Months ended March 31, 2026 and March 31, 2025
Previous report
(2)Includes of equity appreciation rights expense of $10.4 and $5.2 for the three months ended March 31, 2026 and 2025, respectively.
Previous report
(3)Adjusted Net Income and Adjusted Net Income (loss) margin are non-GAAP financial measures. For a reconciliation of each of Adjusted Net Income and Adjusted Net Income (loss), see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures.”
Previous report
The components of the period change were as follows:
Previous report
(1)Organic revenue growth rate is a non-GAAP financial measure. For a reconciliation of organic revenue growth rate to the most directly comparable financial measures under GAAP, see “—Non-GAAP Financial Measures.”
Previous report
Gross Profit. Gross profit increased $96.5 million, or 39.1%, to $343.5 million for the three months ended March 31, 2026, compared to $247.0 million for the three months ended March 31, 2025, resulting in a gross profit margin of 37.2% compared to 35.8% the year prior. The AprilAire Acquisition in May 2025 contributed to $64.6 million of the year-over-year increase. The remaining $31.9 million increase was driven by higher year-over-year sales resulting in incremental gross profit.
Previous report
2026 1Q Madison Air 8
Previous report
Selling, General and Administrative Expenses. Selling, general and administrative expenses increased $48.7 million, or 46.1%, to $154.3 million for the three months ended March 31, 2026, compared to $105.6 million for the three months ended March 31, 2025. The AprilAire Acquisition in May 2025 contributed to $27.4 million of the year-over-year increase. Equity Appreciation Rights ("EAR") expense, included in selling, general and administrative expenses, increased $5.2 million for the three months ended March 31, 2026 compared to March 31, 2025. In December 2025, the Company amended its EAR Plan and began accounting for the plan as an equity classified award. EAR expense for the three months ended March 31, 2026 represents the amortization of the grant date fair value. The remaining $16.1 million increase was driven by increased commissions to our sales team associated with higher volumes, wage inflation, investments in research and development, and increased professional fees, including insurance costs, and audit fees associated with our initial public offering, increased allocated Madison Industries costs, and a positive legal settlement in the prior year.
Previous report
Intangible Amortization. Intangible amortization expenses increased $15.7 million to $40.9 million for the three months ended March 31, 2026, compared to $25.2 million for the three months ended March 31, 2025. The AprilAire Acquisition in May 2025 contributed $15.5 million of the year-over-year change, primarily the result of customer relationships recognized at the time of acquisition.
Previous report
Interest and Financing Expenses. Interest and financing expenses were $90.7 million and $65.8 million for the three months ended March 31, 2026 and 2025, respectively. The $24.9 million increase was driven by interest on the Incremental Term Loan Facility obtained in May 2025 to partially fund the acquisition of AprilAire offset by a lower interest rate on the Term Loan Facility and the impact of favorable interest rate swaps.
Previous report
Income Tax Expense. Income tax expense was $17.3 million for the three months ended March 31, 2026, an increase of $2.6 million compared to income tax expense of $14.7 million for the three months ended March 31, 2025.The increase in income tax expense is primarily driven by increased tax on non-US operations.
Previous report
Comparison of the Three Months ended March 31, 2026 and March 31, 2025
Previous report
Commercial. Net sales for our Commercial segment increased $116.2 million, or 23.5%, for the three months ended March 31, 2026, compared to the three months ended March 31, 2025. Acquisitions contributed $25.7 million or 5.2% of net sales. For the period from January 1, 2025 to March 31, 2025, AprilAire’s commercial brands generated net sales of $24.3 million, that would have been accounted for in Madison Air’s Commercial segment had we owned AprilAire and its associated commercial brands during those periods.
Previous report
Organically, our Commercial net sales increased by 17.2%. More than half of this organic growth was driven by our air, liquid, and hybrid cooling platform. These increases were partially offset by volume declines in air handling and commercial dehumidification.
Previous report
2026 1Q Madison Air 9
Previous report
Residential. Net sales for our Residential segment increased $118.1 million, or 59.8%, for the three months ended March 31, 2026, compared to the year ended March 31, 2025. Acquisitions contributed $120.7 million or 61.1% to net sales. For the period from January 1, 2025 to March 31, 2025, AprilAire’s residential brands generated net sales of $106.2 million, that would have been accounted for in Madison Air’s Residential segment had we owned AprilAire and its associated residential brands during those periods.
Previous report
2026 1Q Madison Air 11
Previous report
2026 1Q Madison Air 12
Previous report
2026 1Q Madison Air 13
Previous report
We expect that our operating cash flows, in addition to our cash and cash equivalents, will enable us to continue to make investments in the future. We expect our operating cash flows to further improve as we increase our operational efficiency and experience economies of scale.
Previous report
Credit Facilities. On June 21, 2021, Madison IAQ LLC ("Madison IAQ"), as borrower, Madison IAQ II LLC ("Madison IAQ II") and certain subsidiaries of Madison IAQ, as guarantors, entered into the Credit Agreement with a syndicate of lenders. The Credit Agreement was comprised of (i) the intitial term loan facility (the "Term Loan Facility"), (ii) the incremental term loan facility (the "Incremental Term Loan" and, together with the Term Loan Facility, (he "Credit Facilities"), (iii) and a $340.0 million revolving credit facility (the "Revolving Credit Facility"). The lenders under the Credit Agreement hold a security interest in all or substantially all of Madison IAQ’s and its subsidiaries’ assets as described in the Credit Agreement. The Term Loan Facility matures on June 21, 2028, the Incremental Term Loan Facility matures on the earlier of (x) May 6, 2032 and (y) March 31, 2029 (unless, on or prior to such date, all indebtedness with respect to the Unsecured Notes is extended or refinanced to mature no earlier than the date that is 91 days later than May 6, 2032) and
Previous report
2026 1Q Madison Air 14 the Revolving Credit Facility matures on the earlier of (i) May 6, 2030, (ii) March 31, 2029 (unless, on or prior to such date, all indebtedness with respect to the Unsecured Notes is extended or refinanced to mature on a date that is at least 91 days later than May 6, 2030), (iii) March 31, 2028 (unless, on or prior to such date, all indebtedness with respect to the Secured Notes is extended or refinanced to mature no earlier than the date that is 91 days later than May 6, 2030) and (iv) the date that is 91 days prior to the maturity date of the Term Loan Facility (unless, on or prior to such date, all indebtedness with respect to the Term Loan Facility is extended or refinanced to mature on a date that is at least 91 days later than May 6, 2030).
Previous report
As of March 31, 2026, we had $2,425.7 million and $1,545.6 million outstanding under our Term Loan Facility and Incremental Term Loan Facility, respectively, $12.9 million of letters of credit outstanding and no borrowings outstanding under the Revolving Credit Facility. $5.7 million of the letters of credit reduce the availability of amounts under the Revolving Credit Facility. As of March 31, 2026, the interest rates on our Term Loan Facility and Incremental Term Loan Facility were 6.1% and 6.4%, respectively. Under certain swap agreements, during the three months ended March 31, 2026, Madison IAQ paid a fixed rate ranging from 3.32% to 4.13% and received a rate of 1-month Term SOFR. After giving effect to such swap agreements on a weighted-average basis across the Term Loan Facility and Incremental Term Loan Facility, as of March 31, 2026, the effective interest rates on our Term Loan Facility and Incremental Term Loan Facility were 6.5% and 6.4%, respectively.
Previous report
The Term Loan Facility and Revolving Credit Facility rates are set at Term SOFR, subject to a 0.50% floor for the Term Loan Facility and a 0% floor for the Revolving Credit Facility, plus an applicable margin of 2.50% (which is reduced by 0.25% in the event of the consummation of an IPO). The Incremental Term Loan Facility rate is set at Term SOFR, subject to a 0.50% floor, plus an applicable margin of 2.75%.
Previous report
The Revolving Credit Facility does not amortize. The Term Loan Facility and the Incremental Term Loan Facility amortize at 1.00% annually of the aggregate principal amount of such loan which payments are due quarterly. However, on November 6, 2025, the Incremental Term Loan Facility was voluntarily prepaid in the amount of $150.0 million, which was applied to all future quarterly amortization payments on the Incremental Term Loan Facility through its scheduled maturity date.
Previous report
The Credit Agreement contains customary representations and warranties, affirmative covenants, reporting obligations and negative covenants, including reporting covenants requiring certain quarterly and annual financial information, and restrictions on the incurrence of additional indebtedness, the payment of dividends, sale of assets, and entering into any merger or acquisition. The Credit Agreement also contains a financial covenant which is only operative if the Company had outstanding amounts drawn on the Revolving Credit Facility above a certain threshold. As of March 31, 2026 and December 31, 2025 the Company was in compliance with all covenants, and we expect to remain in compliance with all covenants during the twelve months from the date of the Company's IPO. See the section entitled “Description of Certain Indebtedness—Credit and Guaranty Agreement” for more information.
Previous report
Proceeds from the IPO and private placement, together with $77.1 million of cash on hand, were used to repay $2,661.2 million of outstanding borrowings under the Initial Term Loan Facility and Incremental Term Loan Facility, consisting of $2,425.7 million of principal and $35.5 million of accrued interest on our Initial Term Loan and $158.4 million of principal and $41.6 million of accrued interest on our Incremental Term Loan. Following the post IPO transactions total debt was $3,086.8 million.
Previous report
Secured and Unsecured Notes. On June 21, 2021, Madison IAQ issued $700.0 million aggregate principal amount of 4.1225% per Senior Secured Notes due 2028 (the "Secured Notes") and $1,035.0 million aggregate principal amount of 5.875% senior notes due 2029 (the “Unsecured Notes”) and, together with the Secured Notes, (the "Notes"). The Secured Notes accrue interest at a rate of 4.125% per annum, payable semi-annually on June 30 and December 30 of each year, and mature on June 30, 2028. The Unsecured Notes accrue interest at a rate of 5.875% per annum, payable semi-annually on June 30 and December 30 of each year, and mature on June 30, 2029.
Previous report
The Secured Notes are fully and unconditionally guaranteed, jointly and severally, on a senior secured first priority basis by Madison IAQ II and each of Madison IAQ’s existing and future material wholly owned domestic restricted subsidiaries, to the extent such subsidiary guarantees the Credit Facilities. The Secured Notes rank equally in right of payment with all of Madison IAQ’s and the guarantors’ existing and future senior indebtedness, including obligations under the Credit Facilities and the Unsecured Notes, and are effectively senior to all existing and future senior unsecured indebtedness of Madison IAQ and the guarantors that is unsecured or secured by junior-priority liens, to the extent of the value of the assets securing the Secured Notes. The Secured Notes are structurally subordinated to all existing and future indebtedness and other liabilities of Madison IAQ’s non-guarantor subsidiaries. As of March 31, 2026, the outstanding principal balance of the Secured Notes was $700.0 million and we were in full compliance with all covenants under the indenture governing the Secured Notes.
Previous report
The Unsecured Notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by Madison IAQ II and each of Madison IAQ’s existing and future material wholly owned domestic restricted subsidiaries, to
Previous report
2026 1Q Madison Air 15 the extent such subsidiary guarantees the Credit Facilities, subject to certain exceptions. The Unsecured Notes rank equally in right of payment with all of Madison IAQ’s and the guarantors’ existing and future senior indebtedness, including obligations under the Credit Facilities and the Secured Notes, and are effectively subordinated to Madison IAQ’s and the guarantors’ existing and future secured indebtedness, including the Credit Facilities and the Secured Notes, to the extent of the value of the collateral. The Unsecured Notes are structurally subordinated to all existing and future indebtedness and other liabilities of Madison IAQ’s non-guarantor subsidiaries. As of March 31, 2026, the outstanding principal balance of the Unsecured Notes was $1,035.0 million and we were in full compliance with all covenants under the indenture governing the Unsecured Notes.
Previous report
Both the Secured Notes and the Unsecured Notes are subject to certain customary operating and financial covenants, including limitations on the incurrence of additional debt, the creation of liens, the making of restricted payments, asset sales, affiliate transactions, and mergers or consolidations, among others. The Secured Notes and Unsecured Notes are also subject to customary events of default, which, if triggered, could result in the acceleration of the Secured Notes or Unsecured Notes, as applicable. The Secured Notes and Unsecured Notes may be redeemed at the option of Madison IAQ, in whole or in part, at specified redemption prices and subject to the terms set forth in the respective indentures.
Previous report
Comparison of the three months ended March 31, 2026 and March 31, 2025
Showing the first 40 of 44 passages. Open the source sections for the rest.
Reworded paragraphs (44)
Previous wording
The following discussion and analysis summarizes the significant factors affecting the consolidated operating results, financial condition, liquidity, and cash flows of Madison Air Solutions Corporation as of and for the periods presented below. The following discussion and analysis of our financial condition and results of operations should be read together with the unaudited consolidated financial statements and the related notes and other financial information of Madison Air Solutions Corporation and Madison Industries IAQ Solutions Corporation ("MIAQ Solutions") included elsewhere in this Quarterly Report on Form 10-Q as well as audited consolidated financial statements and the related notes and other financial information of Madison Air Solutions Corporation and Madison Industries IAQ Solutions Corporation included in the prospectus (the "Prospectus") filed pursuant to Rule 424(b)(4) with the Securities and Exchange Commission ("SEC"). The following discussion contains forward-looking statements that involve risks and uncertainties. Actual results and timing of selected events could differ materially from those discussed or implied by the forward-looking statements as a result of various factors, including those discussed below and detailed elsewhere in this Quarterly Report on Form 10-Q, particularly in the section entitled “Forward-Looking Statements.” The operating results presented within this section are not necessarily indicative of the results that may be expected in any future period.
Current wording
The following discussion and analysis summarizes the significant factors affecting the consolidated operating results, financial condition, liquidity, and cash flows of Madison Air Solutions Corporation as of and for the periods presented below. The following discussion and analysis of our financial condition and results of operations should be read together with the unaudited condensed consolidated financial statements and the related notes and other financial information of Madison Air Solutions Corporation included elsewhere in this Quarterly Report on Form 10-Q as well as audited consolidated financial statements and the related notes and other financial information of Madison Air Solutions Corporation and Madison Industries IAQ Solutions Corporation included in the Prospectus filed pursuant to Rule 424(b)(4) with the Securities and Exchange Commission ("SEC"). The following discussion contains forward-looking statements that involve risks and uncertainties. Actual results and timing of selected events could differ materially from those discussed or implied by the forward-looking statements as a result of various factors, including those discussed below and detailed elsewhere in this Quarterly Report on Form 10-Q, particularly in the section entitled “Forward-Looking Statements.” The operating results presented within this section are not necessarily indicative of the results that may be expected in any future period.
Previous wording
Unless we state otherwise or the context otherwise requires, the terms “we,” “us,” “our,” “our business,” “the Company,” “Madison Air” and similar references refer: (1) on or following the consummation of the organizational transactions, to Madison Air Solutions Corporation and its consolidated subsidiaries, including Madison Industries IAQ Solutions Corporation and its consolidated subsidiaries, and (2) prior to the consummation of the organizational transactions, to Madison Industries IAQ Solutions Corporation and its consolidated subsidiaries.
Current wording
Unless we state otherwise or the context otherwise requires, the terms “we,” “us,” “our,” “our business,” “the Company,” “Madison Air” and similar references refer to Madison Air Solutions Corporation and its consolidated subsidiaries following the consummation of the organizational transactions effected in connection with the Company's initial public offering ("IPO").
Previous wording
We take up to 25,000 breaths a day and spend up to 90% of our lives indoors, often breathing air that’s up to two to five times more polluted than outdoor air. Yet most people rarely think about the air we breathe at home, at schools, in healthcare facilities and at work. Poor air quality doesn’t just affect comfort; it undermines health, productivity and performance.
Current wording
We take up to 25,000 breaths a day and spend up to 90% of our lives indoors, often breathing air that’s up to two to five times more polluted than outdoor air. Yet most people rarely think about the air we breathe at home, at school, in healthcare facilities and at work. Poor air quality doesn’t just affect comfort; it undermines health, productivity and performance.
Previous wording
We believe that our performance and future success depend on many factors that present significant opportunities for us but also pose risks and challenges, including those discussed below. The following are key factors that have, and may continue to, affect our operating results and financial performance:
Current wording
We believe that our performance and future success depend on many factors that present significant opportunities for us but also pose risks and challenges, including those discussed below. The following are key factors that have affected, and may continue to affect, our operating results and financial performance:
Previous wording
Impacts of Macroeconomic and Geopolitical Conditions. Our operating results have been, and will likely continue to be, influenced by numerous factors affecting the markets we serve, including levels of residential and non-residential new construction, aging commercial and residential building stocks, and megatrends including energy resilience, AI and cloud-computing growth, reshoring of advanced manufacturing, and a growing focus on human health. New residential and non-residential construction activity and, to a lesser extent, residential remodeling and replacement activity are affected by seasonality and cyclical factors such as interest rates, credit availability, inflation, consumer spending, employment levels and other macroeconomic factors.
Current wording
Impacts of Macroeconomic and Geopolitical Conditions. Our operating results have been, and will likely continue to be, influenced by numerous factors affecting the markets we serve, including levels of residential and non-residential new construction, aging commercial and residential building stocks, and megatrends including energy resilience, AI and cloud-computing growth, restoring of advanced manufacturing, and a growing focus on human health. New residential and non-residential construction activity and, to a lesser extent, residential remodeling and replacement activity are affected by seasonality and cyclical factors such as interest rates, credit availability, inflation, consumer spending, employment levels and other macroeconomic factors.
Previous wording
U.S. trade policy continues to evolve, contributing to macroeconomic uncertainty. In February 2026, the U.S. Supreme Court invalidated certain tariffs previously imposed under emergency authorities, resulting in potential refund obligations and ongoing litigation. The Company is currently evaluating its exposure related to these matters, including the potential for refunds of previously paid tariffs. Based on information available to date, the Company has not recognized any amounts related to these potential refunds in its condensed consolidated financial statements. The ultimate outcome, including the timing and amount of any refunds, remains uncertain and may be affected by ongoing administrative processes. Concurrently, the U.S. government has implemented new tariffs, including a temporary global tariff and targeted duties on certain imported goods and raw materials, and has indicated that additional measures may be forthcoming. The Company is also monitoring ongoing trade negotiations with key partners, including Canada and Mexico, and potential changes to rules of origin and other provisions that could affect the availability of duty-free treatment. These developments, along with elevated global tariff levels and increasing protectionist measures in other jurisdictions, may result in increased input cost, supply chain disruptions, pricing volatility, and reduced demand for the Company's products.
Current wording
U.S. trade policy continues to evolve, contributing to macroeconomic uncertainty. In February 2026, the U.S. Supreme Court invalidated certain tariffs previously imposed under emergency authorities, resulting in refund obligations and ongoing litigation. The Company began to receive tariff refunds in the three months ended June 30, 2026, and has recorded the associated benefit as a reduction to costs of goods sold. The Company continues to evaluate its exposure related to these matters, including the potential for additional refunds of previously paid tariffs. The ultimate outcome, including the timing and amount of any additional refunds, remains uncertain and may be affected by ongoing administrative processes. Concurrently, the U.S. government has implemented and continues to evaluate additional tariff
Previous wording
Innovate and Strengthen Our Core Product Portfolio. We're building on our legacy of entrepreneurship and innovation to grow market share with new or underpenetrated products and value-added services. Our close connection to customers, at the point where decisions are made, gives us a deep understanding of their needs and the underlying market trends shaping their businesses. We believe this insight drives focused, purposeful innovation, helping us develop solutions our customers require. In addition, we believe that our new product pipeline is aligned with evolving energy efficiency requirements, which we expect will accelerate replacement demand. We have identified opportunities to enhance and extend our product portfolio, particularly in attractive, high-growth end markets like healthcare and cleanrooms where increasingly stringent building codes related to indoor air quality, digitization, and energy efficiency are driving demand. As we bring new products and enhancements to market, we may incur additional operating expenses,
Current wording
Innovate and Strengthen Our Core Product Portfolio. We're building on our legacy of entrepreneurship and innovation to grow market share with new or underpenetrated products and value-added services. Our close connection to customers, at the point where decisions are made, gives us a deep understanding of their needs and the underlying market trends shaping their businesses. We believe this insight drives focused, purposeful innovation, helping us develop solutions our customers require. In addition, we believe that our new product pipeline is aligned with evolving energy efficiency requirements, which we expect will accelerate replacement demand. We have identified opportunities to enhance and extend our product portfolio, particularly in attractive, high-growth end markets like healthcare and cleanrooms where increasingly stringent building codes related to indoor air quality, digitization, and energy efficiency are driving demand. As we bring new products and enhancements to market, we may incur additional operating expenses, including research and development expense. Furthermore, we intend to capture additional upgrade and replacement opportunities by integrating more digital applications and features into our solutions.
Previous wording
Seasonality. Certain of our sales are seasonal as construction, repair and restoration activity generally increases during the summer months when there is favorable weather and longer daylight conditions. For certain high volume low speed fan customers, sales peak in the summer months as fans are replaced whereas sales of unit heaters and other heat products peak in the winter months. Significant tropical storms, hurricanes, regional floods and deep freezes increase the demand for restoration dehumidifiers and fans; such events are sporadic in nature and typically occur during their respective seasons. This seasonality is generally mitigated by other products and services we provide that have no material seasonal effect.
Current wording
Seasonality. Certain of our sales are seasonal as construction, repair and restoration activity generally increases during the summer months when there is favorable weather and longer daylight conditions. For certain high volume low speed fan customers, sales peak in the summer months as fans are replaced whereas sales of unit heaters and other heat products peak in the winter months. Significant tropical storms, hurricanes, regional floods and deep freezes increase the demand for restoration dehumidifiers and fans; such events are sporadic in nature and typically occur during their
Previous wording
Incremental Public Company Expenses. During the period leading up to, and following our IPO, we have will incurred and will continue to incur significant expenses that we did not incur as a private company. Those costs include director and officer liability insurance expenses, as well as costs associated with third-party and internal resources related to accounting, auditing, Sarbanes-Oxley Act compliance, legal, and investor and public relations activities. These costs will generally be expensed as selling, general and administrative expenses in the consolidated statements of income.
Current wording
Incremental Public Company Expenses. During the period leading up to, and following our IPO, we have incurred and will continue to incur significant expenses that we did not incur as a private company. Those costs include director and officer liability insurance expenses, as well as costs associated with third-party and internal resources related to accounting, auditing, Sarbanes-Oxley Act compliance, legal and investor and public relations activities. These costs are generally expensed as selling, general and administrative expenses in the condensed consolidated statements of income (loss).
Previous wording
2026 1Q Madison Air 6 understanding and evaluating our results of operations in the same manner as our management team. However, the presentation of key performance indicators is presented for supplemental information purposes only and should not be considered as superior to or as a substitute for financial information presented in accordance with GAAP and may be different from similarly titled key performance indicators used by other companies. Key performance indicators have limitations as analytical tools, and you should not consider them in isolation, or as substitutes for an analysis of our results as reported under GAAP.
Current wording
Our management team also monitors key performance indicators to assist us in evaluating the performance of our business, including backlog and orders. We believe these key performance indicators are useful to investors in understanding and evaluating our results of operations in the same manner as our management team. However, the presentation of key performance indicators is presented for supplemental information purposes only and should not be considered as superior to or as a substitute for financial information presented in accordance with GAAP and may be different from similarly titled key performance indicators used by other companies. Key performance indicators have limitations as analytical tools, and you should not consider them in isolation, or as substitutes for an analysis of our results as reported under GAAP.
Previous wording
For the period from January 1, 2025 to March 31, 2025, AprilAire’s commercial brands generated orders of $26.0 million, that would have been accounted for in Madison Air’s Commercial segment had we owned AprilAire and its associated commercial brands during the period. As of March 31, 2025, AprilAire's commercial brands had backlog of $7.3 million.
Current wording
For the period from April 1, 2025 to May 7, 2025, AprilAire’s commercial brands generated orders of $10.3 million, that would have been accounted for in Madison Air’s Commercial segment had we owned AprilAire and its associated commercial brands during the period. For the period from January 1, 2025 to May 7, 2025, AprilAire’s commercial brands
Previous wording
For the period from January 1, 2025 to March 31, 2025, AprilAire’s residential brands generated orders of $109.1 million, that would have been accounted for in Madison Air’s Residential segment had we owned AprilAire and its associated residential brands during the period. As of March 31, 2025, AprilAire's residential brands had backlog of $1.3 million.
Current wording
For the period from April 1, 2025 to May 7, 2025, AprilAire’s residential brands generated orders of $38.3 million, that would have been accounted for in Madison Air’s Residential segment had we owned AprilAire and its associated residential brands during the period. For the period from January 1, 2025 to May 7, 2025, AprilAire’s residential brands generated orders of $147.4 million, that would have been accounted for in Madison Air’s Residential segment had we owned AprilAire and its associated residential brands during the period.
Previous wording
The following tables and accompanying narrative disclosures present our results of operations for the three months ended March 31, 2026 and 2025. The results of operations presented are not necessarily indicative of results for future periods. The Company classified the results of operations and cash flows of Nortek Global HVAC LLC ("NGH") as discontinued operations in our condensed consolidated statements of income (loss) and condensed consolidated statements of cash flows for all periods presented.
Current wording
The following tables and accompanying narrative disclosures present our results of operations for the three and six months ended June 30, 2026 and 2025. The results of operations presented are not necessarily indicative of results for future periods. The Company classified the results of operations and cash flows of Nortek Global HVAC LLC ("NGH") as discontinued operations in our condensed consolidated statements of income (loss) and condensed consolidated statements of cash flows for all periods presented.
Previous wording
(4)Gross Profit and Gross Profit Margin are presented in accordance with GAAP. For a reconciliation of Gross Profit and Gross Profit Margin, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures.”
Current wording
(3)Gross Profit and Gross Profit Margin are presented in accordance with GAAP. For a reconciliation of Gross Profit and Gross Profit Margin, see "Non-GAAP Financial Measures.”
Previous wording
(5)Adjusted Gross Profit, Adjusted Gross Profit Margin, Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP financial measures. For a reconciliation of each of Adjusted Gross Profit, Adjusted Gross Profit Margin, Adjusted EBITDA and Adjusted EBITDA Margin to the most directly comparable financial measures under GAAP, see “—Non-GAAP Financial Measures.”
Current wording
(4)Adjusted Gross Profit, Adjusted Gross Profit Margin, Adjusted Net Income (loss), Adjusted Net Income (loss) margin, Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP financial measures. For a reconciliation of each of Adjusted Gross Profit, Adjusted Gross Profit Margin, Adjusted Net Income (loss), Adjusted Net Income (loss) margin, Adjusted EBITDA and Adjusted EBITDA Margin to the most directly comparable financial measures under GAAP, see “Non-GAAP Financial Measures.”
Previous wording
Net Sales. Net sales increased $233.3 million, or 33.8%, to $923.7 million for the three months ended March 31, 2026, compared to $690.4 million for the three months ended March 31, 2025. The acquisition of AprilAire in May 2025 (the "AprilAire Acquisition") drove an aggregate $146.2 million of the net sales increase year-over-year. The remaining $87.1 million of net sales growth was due to growth of our Commercial segment. Refer to "Results of Operations by Segment" below for a discussion of Net Sales by segment.
Current wording
For the three months ended June 30, 2026. Net sales increased $171.7 million, or 20.9%, compared to the three months ended June 30, 2025. The AprilAire Acquisition drove an aggregate $66.9 million of the net sales increase year-over-year. The remaining $104.8 million was attributable to organic growth in our Commercial segment partially offset by a modest organic net sales decline in our Residential segment. Refer to "Results of Operations by Segment" below for a discussion of Net Sales by segment.
Previous wording
We report and manage our business through two segments: Commercial and Residential. We report certain activities and items that are not included in these segments within Central and other costs. The reconciliation of segment net sales to total net sales and Segment Adjusted EBITDA to total Adjusted EBITDA, respectively, is as follows:
Current wording
The following tables and accompanying narrative disclosures present our results of segment operations for the three and six months ended June 30, 2026 and 2025. The results of operations presented are not necessarily indicative of results for future periods. We report and manage our business through two segments: Commercial and Residential. We report certain activities and items that are not included in these segments within Central and other costs.
Previous wording
Commercial segment Adjusted EBITDA increased $32.6 million, or 25.4%, for the three months ended March 31, 2026, compared to the three months ended March 31, 2025. Acquisitions contributed $5.8 million of Adjusted EBITDA to the Commercial segment growth. Excluding the AprilAire acquisition, Adjusted EBITDA growth was driven by volume growth, and productivity improvements.
Current wording
Commercial segment Adjusted EBITDA increased $17.3 million, or 11.1%, for the three months ended June 30, 2026, compared to the three months ended June 30, 2025. Acquisitions contributed $3.4 million of incremental Adjusted EBITDA to the Commercial segment growth. Excluding the AprilAire acquisition, Commercial segment Adjusted EBITDA growth was mainly driven by volume growth.
Previous wording
Residential segment Adjusted EBITDA increased $36.1 million, or 83.6%, for the three months ended March 31, 2026, compared to the three months ended March 31, 2025. Acquisitions contributed $37.5 million of Adjusted EBITDA. After considering the AprilAire Acquisition in May 2025, Adjusted EBITDA decreased by $1.4 million due to modest volume declines in our professional distribution channels for ventilation solutions.
Current wording
Residential. Residential segment net sales increased $46.5 million, or 16.2%, for the three months ended June 30, 2026, compared to the three months ended June 30, 2025. Organically, our Residential net sales decreased by 4.8% driven by modest volume declines in our professional distribution channels for ventilation solutions, net of price increases. Acquisitions contributed $56.4 million, or 19.6%, of additional net sales for the three months ended June 30, 2026.
Previous wording
In addition to financial results determined in accordance with GAAP, we believe that the following non-GAAP measures, including Adjusted Gross Profit, Adjusted Gross Profit Margin, Adjusted Net Income (Loss), Adjusted EBITDA, Adjusted EBITDA Margin, organic revenue growth rate, FCF and FCF Conversion, in each of the periods and forms presented below, are useful in evaluating the performance of our business.
Current wording
In addition to financial results determined in accordance with GAAP, we believe that the following non-GAAP measures, including Adjusted Gross Profit, Adjusted Gross Profit Margin, Adjusted Net Income (Loss), Adjusted Net Income (Loss) Margin, Adjusted EBITDA, Adjusted EBITDA Margin, organic revenue growth rate, FCF and FCF Conversion, in each of the periods and forms presented below, are useful in evaluating the performance of our business.
Previous wording
We use these non-GAAP financial measures to measure the operational strength and performance of our business and believe these measures provide additional information to investors about certain non-cash items and items that we do not expect to continue at the same level in the future. Further, we believe these non-GAAP financial measures provide a meaningful measure of business performance and provide a basis for comparing our performance to that of other peer companies using similar measures. We use FCF and FCF Conversion as an additional liquidity measure and believe it provides useful information to investors about the cash generated from our core operations that may be available to repay debt, make other investments and return cash to stockholders.
Current wording
We use these non-GAAP financial measures to measure the operational strength and performance of our business and believe these measures provide additional information to investors about certain non-cash items and items that we do not expect to continue at the same level in the future. Further, we believe these non-GAAP financial measures provide a meaningful measure of business performance and provide a basis for comparing our performance to that of other peer companies using similar measures. We use FCF and FCF Conversion as an additional liquidity measure and believe it
Previous wording
Adjusted Gross Profit, Adjusted Gross Profit Margin, Adjusted Net Income (Loss), Adjusted EBITDA and Adjusted EBITDA Margin. Adjusted Gross Profit, Adjusted Gross Profit Margin, Adjusted Net Income (Loss), Adjusted EBITDA and Adjusted EBITDA Margin are supplemental measures of operating performance that are not calculated in accordance with GAAP and do not represent, and should not be considered as, alternatives to net sales, net income, income before tax provision or any other performance measure as determined by GAAP.
Current wording
Adjusted Gross Profit, Adjusted Gross Profit Margin, Adjusted Net Income (Loss), Adjusted Net Income (Loss) Margin, Adjusted EBITDA, and Adjusted EBITDA Margin are supplemental measures of operating performance that are not calculated in accordance with GAAP and do not represent, and should not be considered as, alternatives to net sales, net income (loss), income before tax provision or any other performance measure as determined by GAAP.
Previous wording
We defined Adjusted Gross Profit as net sales less cost of goods sold, excluding the purchase accounting impacts of acquisitions such as amortization related to technology-related intangible assets. We define Adjusted Gross Profit Margin as Adjusted Gross Profit divided by net sales. We define Adjusted Net Income (Loss) as net income (loss) as adjusted for certain items that impact comparability from period to period. These adjustments include net (income) loss from discontinued operations, amortization expense, transaction related expenses, restructuring expenses, equity appreciation rights expense, non-operating expenses (income), allocated Madison Industries costs, non-recurring professional and consulting expenses, and the tax effect of net income (loss) adjustments. We define Adjusted EBITDA as net income (loss) as adjusted for net (income) loss from discontinued operations, interest and financing expenses, income tax expense (benefit), depreciation and amortization, transaction related expenses, restructuring expenses, equity
Current wording
We define Adjusted Gross Profit as net sales less cost of goods sold, excluding the purchase accounting impacts of acquisitions such as amortization related to technology-related intangible assets and purchase accounting inventory adjustments. We define Adjusted Gross Profit Margin as Adjusted Gross Profit divided by net sales. We define Adjusted Net Income (Loss) as net income (loss) as adjusted for certain items that impact comparability from period to period. These adjustments include net (income) loss from discontinued operations, amortization expense, transaction related expenses, restructuring expenses, equity appreciation rights expense, non-operating expenses (income), allocated Madison Industries costs, non-recurring professional and consulting expenses, and the tax effect of net income (loss) adjustments. We define Adjusted Net Income (Loss) Margin as Adjusted Net Income (Loss) divided by net sales. We define Adjusted EBITDA as net income (loss) as adjusted for net (income) loss from discontinued operations, interest and financing expenses, income tax expense (benefit), depreciation and amortization, transaction related expenses, restructuring expenses, equity appreciation rights expense, non-operating expenses (income), allocated Madison Industries costs, gain on insurance proceeds, and non-recurring professional and consulting expenses. We define Adjusted EBITDA Margin as Adjusted EBITDA divided by net sales.
Previous wording
The following table reconciles Adjusted Net Income to net income (loss), the most directly comparable GAAP measure in each of the periods and bases (actual historical and Pro Forma) presented below:
Current wording
The following table reconciles Adjusted Net Income to net income (loss), the most directly comparable GAAP measure, and Adjusted Net Income (Loss) Margin to net income (loss) margin, the most directly comparable GAAP measure, in each of the periods and bases (actual historical and Pro Forma) presented below:
Previous wording
(3)Represents direct transaction costs related to acquisition and divestiture activity, including transaction fees, due diligence costs, transfer taxes and other direct costs related to acquisition activities, changes in the fair value of contingent consideration, purchase accounting adjustments, and other acquisition related charges, such as integration charges and professional and legal fees, and gain on the disposition of business. Transaction related expenses for the three months ended March 31, 2026 included $4.0 million in transaction expenses related to the Company's IPO. Acquisition and divestiture expenses for the three months ended March 31, 2025 included $0.9 million for costs incurred in connection with the AprilAire Acquisition.
Current wording
(3)Represents direct transaction costs related to acquisition and divestiture activity, including transaction fees, due diligence costs, transfer taxes and other direct costs related to acquisition activities, changes in the fair value of contingent consideration, purchase accounting adjustments, and other acquisition related charges, such as integration charges and professional and legal fees, and gain on the disposition of business For the three and six months ended June 30, 2026, transaction expenses included professional and legal fees, and other costs associated with becoming a public company offset by $1.2 million gain on contingent consideration remeasurement. Transaction expenses for the three months and six months ended June 30, 2025 primarily related to the AprilAire Acquisition.
Previous wording
(5)Represents compensation expense under the EAR and Amended EAR Plan.
Current wording
(5)Represents compensation expense under the EAR Plan and Amended EAR Plan.
Previous wording
(6)Represents foreign currency gains and losses on corporate intercompany loans, gains and losses on sale of fixed assets, gains and losses on marketable securities and other non-operating items. For the three months ended March 31, 2026, these charges and gains primarily included the following: $0.1 million loss on disposal of fixed assets, and $0.4 million franchise tax expense. For the three months ended March 31, 2025, these charges and gains primarily included the following: $2.2 million foreign currency translation gain on intercompany loans, $1.1 million realized gain on marketable securities, and $0.3 million franchise tax expense.
Current wording
(6)Represents foreign currency gains and losses on corporate intercompany loans, gains and losses on sale of fixed assets, gains and losses on marketable securities and other non-operating items. For the three months ended June 30, 2026, non-operating expenses (income) included $1.0 million foreign currency translation gain on intercompany loans, offset by $0.4 million loss on disposal of fixed assets. For the three months ended June 30, 2025, non-operating expenses (income) included $0.8 million gain on available-for-sale marketable securities, and $1.6 million gain on disposal of fixed assets offset by a $1.9 million foreign currency translation loss on intercompany loans. For the six months ended June 30, 2026, non-operating expenses (income) included $0.9 million foreign currency translation gain on intercompany loans offset by a $0.5 million loss on disposal of fixed assets. For the six months ended June 30, 2025, non-operating expenses (income) included $1.9 million gain on available-for-sale marketable securities, $1.3 million gain on divestiture of Nortek Global HVAC and its subsidiary, $1.4 million gain on disposal of fixed assets, $0.3 million foreign currency translations loss on intercompany loans and $0.2 million of pension expense.
Previous wording
(7)Represents indirect costs for support received from Madison Industries for certain internal and external corporate activities including, but not limited to, consolidation accounting, legal, and other Madison Industries corporate and infrastructure related services that will no longer be incurred following the consummation of the Company's IPO. This does not include services that will continue to be provided by Madison Industries International following the consummation of the offering pursuant to the Transition Services Agreement.
Current wording
(7)Represents indirect costs for support received from Madison Industries for certain internal and external corporate activities including, but not limited to, consolidation accounting, legal, and other Madison Industries corporate and infrastructure related services that will no longer be incurred following the consummation of the Company's IPO. This does not include services that will continue to be provided by Madison Industries International Holdings LLC following the consummation of the IPO pursuant to the Transition Services Agreement.
Previous wording
(8)Represents expenses for professional and consulting services related to non-recurring transactions. For the three months ended March 31, 2026, these services primarily included $0.8 million for one-time audit, legal, and consulting fees incurred to prepare for IPO and SOX implementation and $0.3 million in consulting fees for productivity improvement projects. For the three months ended March 31, 2025, these services primarily included $0.7 million in consulting fees for productivity improvement projects, $0.1 million in legal fees tied to a favorable legal settlement reached in 2024, and $0.1 million in leadership recruiting and relocation fees.
Current wording
(8)Represents expenses for professional and consulting services related to non-recurring transactions. For the three months ended June 30, 2026, non-recurring professional and consulting expenses included $0.7 million for one-time audit, legal and consulting fees incurred to prepare for IPO and SOX implementation and $0.1 million in consulting fees for productivity improvement projects. For the three months ended June 30, 2025, these services primarily included $0.5 million in consulting fees for productivity improvement projects, $0.3 million in legal fees, and $0.3 million in leadership recruiting and relocation fees. For the six months ended June 30, 2026, non-recurring professional and consulting expenses included $1.6 million for one-time audit, legal and consulting fees incurred to prepare for IPO and SOX
Previous wording
(9)The tax effect from the above adjustments assumes an estimated worldwide marginal current tax rate of 28.7% for the three months ended March 31, 2026 and 24.5% for the three months ended March 31, 2025.
Current wording
(11)The tax effect from the above adjustments assumes an estimated worldwide marginal current tax rate of approximately 24.9% and 24.6% for the three and six months ended June 30, 2026, respectively, and 25.4% and 25.1% for the three and six months ended June 30, 2025, respectively.
Previous wording
(3)Represents direct transaction costs related to acquisition and divestiture activity, including transaction fees, due diligence costs, transfer taxes and other direct costs related to acquisition activities, changes in the fair value of contingent consideration, purchase accounting adjustments, and other acquisition related charges, such as integration charges and professional and legal fees, and gain on the disposition of business. Transaction related expenses for the three months ended March 31, 2026 included $4.0 million in transaction expenses related to the Company's IPO. Acquisition and divestiture expenses for the three months ended March 31, 2025 included $0.9 million for costs incurred in connection with the AprilAire acquisition.
Current wording
(3)Represents direct transaction costs related to acquisition and divestiture activity, including transaction fees, due diligence costs, transfer taxes and other direct costs related to acquisition activities, changes in the fair value of contingent consideration, purchase accounting adjustments, and other acquisition related charges, such as integration charges and professional and legal fees, and gain on the disposition of business For the three and six months ended June 30, 2026, transaction expenses included professional and legal fees, and other costs associated with becoming a public company offset by $1.2 million gain on contingent consideration remeasurement. Transaction expenses for the three months and six months ended June 30, 2025 primarily related to the AprilAire Acquisition.
Previous wording
(5)Represents compensation expense under the EAR Plan.
Current wording
(5)Represents compensation expense under the EAR Plan and Amended EAR Plan.
Previous wording
(7)Represents indirect costs for support received from Madison Industries for certain internal and external corporate activities including, but not limited to, consolidation accounting, legal, and other Madison Industries corporate and infrastructure related services that will no longer be incurred following the consummation of the Company's IPO. This does not include services that will continue to be provided by Madison Industries International following the consummation of the offering pursuant to the Transition Services Agreement.
Current wording
(7)Represents indirect costs for support received from Madison Industries for certain internal and external corporate activities including, but not limited to, consolidation accounting, legal, and other Madison Industries corporate and infrastructure related services that will no longer be incurred following the consummation of the
Previous wording
(8)Represents expenses for professional and consulting services related to non-recurring transactions. For the three months ended March 31, 2026, these services primarily included $0.8 million for one-time audit, legal, and consulting fees incurred to prepare for IPO and SOX implementation and $0.3 million in consulting fees for productivity improvement projects. For the three months ended March 31, 2025, these services primarily included $0.7 million in consulting fees for productivity improvement projects, $0.1 million in legal fees tied to a favorable legal settlement reached in 2024, and $0.1 in leadership recruiting and relocation fees.
Current wording
(8)Represents expenses for professional and consulting services related to non-recurring transactions. For the three months ended June 30, 2026, non-recurring professional and consulting expenses included $0.7 million for one-time audit, legal and consulting fees incurred to prepare for IPO and SOX implementation and $0.1 million in consulting fees for productivity improvement projects. For the three months ended June 30, 2025, these services primarily included $0.5 million in consulting fees for productivity improvement projects, $0.3 million in legal fees, and $0.3 million in leadership recruiting and relocation fees. For the six months ended June 30, 2026, non-recurring professional and consulting expenses included $1.6 million for one-time audit, legal and consulting fees incurred to prepare for IPO and SOX implementation and $0.4 million in consulting fees for productivity improvement projects. For the six months ended June 30, 2025, these services primarily included $1.2 million in consulting fees for productivity improvement projects, $0.4 million in legal fees, and $0.5 million in leadership recruiting and relocation fees.
Previous wording
The following table sets forth a reconciliation of AprilAire’s Adjusted EBITDA to AprilAire’s net income (loss), the most directly comparable financial measure calculated and presented in accordance with GAAP. The figures herein do not contain pro forma adjustments.
Current wording
The following table sets forth the net impacts of the related pro forma adjustments on the Company's reconciliation of Pro Forma Adjusted EBITDA to Pro Forma net income (loss), the most directly comparable financial measure calculated and presented in accordance with GAAP.
Previous wording
(2)Represent direct transaction costs related to acquisition and divestiture activity, including transaction fees, due diligence costs, purchase accounting adjustments, and other acquisition related charges, such as one-time transaction related compensation, professional and legal fees. Transaction related expenses totaled $44.1 million for the three months ended March 31, 2025 and related to the previous owners' divestiture of AprilAire.
Current wording
(1)Represents direct transaction costs related to acquisition and divestiture activity, including transaction fees, due diligence costs, purchase accounting adjustments, and other acquisition related charges, such as one-time transaction related compensation, professional and legal fees. Transaction related expenses totaled $44.1 million for the six months ended June 30, 2025 and related to the previous owners' divestiture of AprilAire.
Previous wording
(3)Represents severance costs incurred with the previous owners' divestiture of AprilAire.
Current wording
(2)Represents severance costs incurred with respect to the previous owners' divestiture of AprilAire.
Previous wording
(4)Represents compensation expense that would have been incurred under the EAR Plan and one-time compensation related to the previous owners' divestiture of AprilAire.
Current wording
(3)Represents compensation expense that would have been incurred under the EAR Plan and one-time compensation related to the previous owners' divestiture of AprilAire.
Previous wording
FCF is a non-GAAP liquidity measure that we define as net cash flows provided by operating activities—continuing operations less purchases of property, plant and equipment plus proceeds from sale of property, plant and equipment. FCF Conversion is a non-GAAP liquidity measure that we define as FCF divided by net income (loss) from continuing operations.
Current wording
Free Cash Flow ("FCF") is a non-GAAP liquidity measure that we define as net cash flows provided by operating activities—continuing operations less purchases of property, plant and equipment plus proceeds from sale of property, plant and equipment. FCF Conversion is a non-GAAP liquidity measure that we define as FCF divided by net income (loss) from continuing operations.
Previous wording
We believe that FCF and FCF Conversion are useful indicators of liquidity that provide information to management and investors about the amount of cash used in our core operations that, after the purchases of property, plant and equipment, interest servicing and tax payments, is available to be used for strategic initiatives and to pay down debt principal. FCF and FCF Conversion may have limitations as analytical tools, and you should not consider them in isolation, or as substitutes for analysis of our results as reported under GAAP. The following table reconciles FCF to net cash flows provided by operating activities, the most directly comparable GAAP measure, and calculates FCF Conversion.
Current wording
We believe that FCF and FCF Conversion are useful indicators of liquidity that provide information to management and investors about the amount of cash provided by our core operations that, after the purchases of property, plant and equipment, interest servicing and tax payments, is available to be used for strategic initiatives and to pay down debt principal. FCF and FCF Conversion may have limitations as analytical tools, and you should not consider them in isolation, or as substitutes for analysis of our cash flows as reported under GAAP. The following table reconciles FCF to net cash flows provided by operating activities, the most directly comparable GAAP measure, and calculates FCF Conversion.
Showing the first 40 of 44 pairs. Open the source sections for the rest.
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
2026 2Q Madison Air 5 measures affecting imports from numerous trading partners, including country-specific tariffs and duties on certain imported goods, components and raw materials. The Company is also monitoring ongoing trade negotiations with key partners, including Canada and Mexico, and potential changes to rules of origin and other provisions that could affect the availability of duty-free treatment. Recent changes to Section 232 tariffs on steel, aluminum, and copper, particularly the expansion of duties to the full value of certain imported products, may further increase effective tariff rates on metal intensive goods. These developments, together with ongoing inflationary pressures affecting labor, transportation, energy and raw material costs, elevated global tariff levels and increasing protectionist measures in other jurisdictions, may result in increased input costs, supply chain disruptions, pricing volatility, and reduced demand for the Company's products.
Current report — wording carried from elsewhere
2026 2Q Madison Air 6 respective seasons. This seasonality is generally mitigated by other products and services we provide that have no material seasonal effect.
Current report — wording carried from elsewhere
2026 2Q Madison Air 10 provides useful information to investors about the cash generated from our core operations that may be available to repay debt, make other investments and return cash to shareholders.
Current report — wording carried from elsewhere
Company's IPO. This does not include services that will continue to be provided by Madison Industries International Holdings LLC following the consummation of the IPO pursuant to the Transition Services Agreement.
Rearranged previous paragraphs (7)
Previous report — wording carried elsewhere
2026 1Q Madison Air 5 including research and development expense. Furthermore, we intend to capture additional upgrade and replacement opportunities by integrating more digital applications and features into our solutions.
Previous report — wording carried elsewhere
Our management team also monitors key performance indicators to assist us in evaluating the performance of our business, including backlog and orders. We believe these key performance indicators are useful to investors in
Previous report — wording carried elsewhere
Organically, our Residential net sales decreased by 1.9% driven by modest volume declines in our professional distribution channels for ventilation solutions, net of price increases.
Previous report — wording carried elsewhere
2026 1Q Madison Air 10 appreciation rights expense, non-operating expenses (income), allocated Madison Industries costs, and non-recurring professional and consulting expenses. We define Adjusted EBITDA Margin as Adjusted EBITDA divided by net sales.
Previous report — wording carried elsewhere
(6)Represents foreign currency gains and losses on corporate intercompany loans, gains and losses on sale of fixed assets, gains and losses on marketable securities and other non-operating items. For the three months ended March 31, 2026, these charges and gains primarily included the following: $0.1 million loss on disposal of fixed assets, and $0.4 million franchise tax expense. For the three months ended March 31, 2025, these charges and gains primarily included the following: $2.2 million foreign currency translation gain on intercompany loans, $1.1 million realized gain on marketable securities, and $0.3 million franchise tax expense.
Previous report — wording carried elsewhere
(1)Financial information presented on a Pro Forma basis solely to give effect to the AprilAire Acquisition as if such transaction had occurred on January 1, 2025. See the unaudited pro forma combined statements of operations filed as Exhibit 99.1 to this Quarterly Report on Form 10-Q for a description of the adjustments and assumptions underlying the Pro Forma financial information.
Previous report — wording carried elsewhere
We have financed our operations primarily through debt financing. We believe our existing cash and cash equivalents and cash provided by operations will be sufficient to meet our working capital, capital expenditure and debt servicing needs for at least the next twelve months. Our future capital requirements will depend on many factors including our company’s and our industry’s growth rates, the timing and extent of spending to support development efforts, the introduction of new and enhanced products and services offerings, the continuing market acceptance of our products and the timing and extent of acquisitions and dispositions. In the future, we may enter into arrangements to acquire or invest in businesses, services and technologies, including intellectual property rights.