LOAR

This article first appeared on GuruFocus. David Abrams (Trades, Portfolio), founder and CEO of Abrams Capital Management, recently submitted his 13F filing for the second quarter of 2026, revealing key adjustments to his concentrated portfolio. Abrams established the Boston-based firm in 1999 after a decade working alongside Seth Klarman (Trades, Portfolio) at Baupost Group. Describing itself as "opportunistic," Abrams Capital Management employs a fundamental, value-oriented approach, focusing on long-term investments in a limited number of holdings across stocks, debt instruments, distressed debt, and illiquid assets. Warning! GuruFocus has detected 4 Warning Sign with LOAR. Is LOAR fairly valued? Test your thesis with our free DCF calculator. David Abrams (Trades, Portfolio) reduced his position in one stock during the quarter, with the most significant change being a reduction in Alphabet Inc (NASDAQ:GOOGL). The guru sold 495,273 shares, resulting in a -26.55% decrease in the total share count and a -3.07% impact on the overall portfolio. The stock traded at an average price of $358.82 during the quarter. Despite the trim, Alphabet has returned -13.92% over the past three months and remains up 10.80% year-to-date, indicating that Abrams may be locking in gains or rebalancing his exposure to the tech giant. At the end of the second quarter of 2026, Abrams's portfolio comprised 11 stocks, with a notable concentration in his top holdings. The largest position was Loar Holdings Inc (NYSE:LOAR) at 47.15% of the portfolio, followed by Lithia Motors Inc (NYSE:LAD) at 13.2%, Alphabet Inc (NASDAQ:GOOGL) at 8.94%, Somnigroup International Inc (NYSE:SGI) at 8.3%, and Asbury Automotive Group Inc (NYSE:ABG) at 7.91%. This heavy concentration underscores Abrams's conviction in his highest-conviction ideas, a hallmark of his value-oriented investment philosophy. The portfolio's sector allocation is primarily concentrated in five industries: Industrials, Consumer Cyclical, Communication Services, Financial Services, and Healthcare. This diversification across sectors, while maintaining a focused stock count, reflects Abrams's approach of seeking undervalued opportunities across different market segments. The significant weighting in Industrials, driven by the Loar Holdings position, suggests a strong conviction in the aerospace and defense components sector. During the second quarter of 2026, David Abrams (Trades, Portfolio) did not initiate any new positions in his portfolio. This is consistent with his long-term, concentrated investment approach, which prioritizes adding to existing high-conviction holdings over diversifying into new names. The absence of new buys suggests that Abrams found the most attractive opportunities within his current portfolio, or that market valuations did not meet his strict value criteria during the period. Abrams did not increase any existing positions during the quarter. The lack of position increases, combined with the single reduction in Alphabet, indicates a period of relative stability in the portfolio. This could reflect a cautious stance on market conditions or a deliberate pause to reassess opportunities. For value investors, this stability may signal that Abrams is waiting for more compelling entry points before deploying additional capital. David Abrams (Trades, Portfolio) did not completely exit any positions during the second quarter of 2026. The portfolio's composition remained largely intact, with the only notable change being the reduction in Alphabet. This continuity suggests that Abrams remains confident in his existing holdings and their long-term value potential, despite any short-term market fluctuations or sector-specific headwinds. For value investors tracking Abrams's moves, the key takeaway from this filing is the deliberate reduction in Alphabet, which may indicate a valuation concern or a strategic rebalancing toward other opportunities. With the portfolio still heavily weighted in Loar Holdings and automotive-related stocks, Abrams continues to demonstrate a preference for businesses with tangible assets and clear fundamental value, aligning with his established investment philosophy.

Image source: The Motley Fool. Thursday, Aug. 6, 2026 at 11:00 a.m. ET Chief Executive Officer and Executive Co-Chairman - Dirkson Charles Executive Co-Chairman - Brett Milgrim Treasurer and Chief Financial Officer - Glenn D'Alessandro Director of Investor Relations - Ian McKillop Operator: Greetings, and welcome to the Loar Holdings Q2 2026 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce Ian McKillop, Director of Investor Relations. Thank you. You may begin. Ian McKillop: Thank you, Diego. Good morning, everyone, and welcome to the Loar Holdings Q2 2026 Earnings Conference Call. Presenting on the call this morning are Loar's Chief Executive Officer and Executive Co-Chairman, Dirkson Charles; Executive Co-Chairman, Brett Milgrim; Treasurer and Chief Financial Officer, Glenn D'Alessandro; as well as myself, Ian McKillop, the Director of Investor Relations. Please visit our website at loargroup.com to obtain a slide deck and call replay information. Before we begin, we'd like to remind you that statements made during this call, which are not historical in fact, are forward-looking statements. For further information about important factors that could cause actual results to differ materially from those expressed or implied in the forward-looking statements, please refer to the company's latest filings with the SEC available through the Investor Relations section of our website or at sec.gov. We'd also like to advise you that during the call, we will be referring to adjusted EBITDA, adjusted EBITDA margin and adjusted earnings per share, each of which is a non-GAAP financial measure. Please see the tables and related footnotes in the earnings release for a presentation of the most directly comparable GAAP measures and applicable reconciliations. To begin today, I'll now turn the call over to Dirkson. Dirkson Charles: Thanks, Ian. Good morning to my mates and all our partners participating on this call. I am Dirkson, Founder, CEO and Executive Co-Chairman of Loar. As you all know, Loar's foundational mission and vision is to build an aerospace industrial cash compounder wrapped in a culture that all our mates can be proud of. So first and foremost, to my mates, I extend a huge thank you. Loar's continued success in executing on our mission and vision is the direct result of the efforts of every individual contributor. What we have accomplished this quarter is beyond remarkable and a collective accomplishment. I will start with the obvious. Once again, we had a quarterly record for sales, adjusted EBITDA and adjusted EBITDA margins. This quarter represents the 16th quarter in a row that we have sequentially achieved a new record for adjusted EBITDA. However, what really makes this quarter noteworthy is we demonstrated the strength of the collaboration across business units and functions. Our intentional emphasis on collaboration, combined with the strategic discipline that we live by and ensuring our resources were focused on the correct opportunities, we converted approximately 25% of our new business pipeline into wins. While we expected greater visibility in our new business pipeline would result in favorable data and use of our resources, we did not anticipate the significant success achieved. In a few minutes, Ian will remind folks how we think about developing our new business pipeline and where we have found success to date. But let me just say we do not achieve these results without a collaborative and focused culture. Let me pause here for a minute and answer the question that is on everyone's mind. Does this mean we lost 75% of the pipeline? The simple answer is no. We are currently still working on those opportunities in addition to identifying new projects to add to the pipeline. With regards to our end markets, commercial OE growth was once again stellar, up 28% in the quarter versus last year's Q2. We are benefiting from an improved supply chain that has unlocked demand for our parts. While we do not expect this growth every quarter, we do expect continuing strength to support the 10-year plus backlog of orders at Boeing and Airbus. The platforms where we saw the greatest increase in sales in the quarter were the Boeing 787, the A320 family and the 737 family of aircraft. This is the second quarter in a row where the commercial OE end market grew the fastest. Comparable to last quarter, we achieved 40-plus percent adjusted EBITDA margins. This end market continues to provide strong financial returns for us on a consistent basis. Commercial aftermarket was up double-digit percentage again this quarter. This is predictable and consistent with our long-term projections. Given that our portfolio consists of proprietary products, we have tremendous visibility of the demand for our parts and a strong presence in the commercial aftermarket. In the second quarter, as expected, our customers for our defense end market products returned to their habitual ordering and delivery patterns. We saw sales improve 8% over last year's Q2. We expect increased demand for our military end market products moving forward as the geopolitical uncertainty in the world has resulted in increased military funding across the globe. To be clear, however, we continue to anticipate quarterly sales to this end market to be choppy. Consistent execution of our value drivers continues to stimulate Loar's growth and create shareholder value. We continue to emphasize collaboration, entrepreneurship, enabling above-market growth rates, solving problems through launching new products, optimizing manufacturing and productivity to increase performance and achieving price over inflation to improve margins annually. I only have 2 words to describe our success implementing these value drivers, onward and upward. In 2026, we are poised to grow sales and adjusted EBITDA at a higher rate than our historical average. In the first 2 quarters of 2026, we have grown sales and adjusted EBITDA at approximately 38% and 47%, respectively. To state a fact, once again, Q2 of 2026 is the 16th consecutive quarter of sequential growth in adjusted EBITDA at Loar. While our focus is not on quarterly results, but the long-term benefit of compounding our financial success over many years, this does demonstrate the consistency and performance from a clear focus on executing our value drivers. While the growth in sales and adjusted EBITDA is something we are proud of, what we take special pride in is the fact that we continue to generate cash flow at an impressive rate. In fact, year-to-date, operating cash flow minus capital expenditures divided by net income is 1.9x. To be clear, our free cash flow is close to 200% of our reported net income. We focus on generating cash flow above all else. This consistent performance we have demonstrated since we founded Loar in 2012. We have also updated our calendar year 2026 adjusted EBITDA guidance range to $265 million to $270 million. The strong tailwinds from each end market plus the execution of our strategic value drivers gives us confidence that we will meet or exceed our updated guidance. I will now turn it over to Brett to walk you through the key characteristics of our portfolio and the current state of our M&A pipeline. Brett? Brett Milgrim: Thanks, Dirkson. In order to drive consistent and predictable performance, we have created a diverse portfolio of products that covers essentially all end markets, platforms and customers with an uncompromising emphasis on proprietary offerings and high service levels for both OEM and aftermarket customers as they continue to look for reliable supply chain partners like Loar. We have purposely created this model in order to position Loar to benefit from the long-term secular growth nature of the industry without some of the short-term market fluctuations that can arise when a company is overweight to a particular technology, end market or product category. This disciplined and balanced strategy has served us well by, as Dirkson highlighted earlier, resulting in exceptional financial performance as it relates to growth, margins and a new business pipeline that we fully expect will yield consistent organic growth in subsequent years. Our portfolio is designed to be balanced, resilient and have wide exposure across a very large and overall growing aerospace and defense market. The same disciplined and consistent approach to market also applies to our M&A strategy. Our demonstrated track record of acquiring 1 to 2 new brands per year over the last 14-plus years is still our best indicator of future activity with the key ingredient being that we maintain our rigor in evaluating and acquiring businesses that have similar characteristics to our existing portfolio, proprietary offerings within niche categories of aerospace and defense that have high barriers to entry and an OEM aftermarket balance. Since going public approximately 2 years ago, we have announced 4 new acquisitions, including 1 new member to our family this calendar year, Harper Engineering, and have invested over $1.1 billion of capital in M&A. Our most recent 2 deals, LMB and Harper, continue to perform well with both businesses performing ahead of expectations and providing us with a plethora of new opportunities and cross-selling activities across the group. So while M&A will always be unpredictable, we continue with the M&A cadence we have now had for over 14 years, and the current very active M&A market certainly doesn't suggest that is stopping in the short term. That said, I will repeat something I have mentioned for a few quarters now, which is that we continue to have a large pipeline of opportunities, but it's still an M&A market that requires an appropriate amount of discipline to ensure we continue adding the same high-quality businesses that meet the return thresholds we seek. I remain excited about the new opportunities we are currently evaluating in M&A and coupled with our organic growth opportunities and current portfolio, feel confident that our ability to generate outsized and consistent long-term returns is still in the early innings of Loar's history. Ian McKillop: Moving over to our products. We include this slide each quarter because it captures the breadth of Loar's product portfolio, more than 25,000 unique part numbers across the group. But the real takeaway isn't any single product. It's the set of capabilities behind those products. We are not simply a collection of businesses that manufacture a wide range of components. We are an integrated platform that combines engineering, design, qualification and production expertise across disciplines to deliver tailored customer-specific solutions and adapt quickly as our customers' requirements evolve. Our diverse set of capabilities serves as a foundation from which we capture organic new business opportunities. These opportunities come from 2 forms: first, new products or technologies for new or existing customers, ranging from clean sheet designs to meaningful product enhancements. Second, existing products expanded to new customers, driven by share gains and new platform wins. Across the group, our organic pipeline now totals approximately $750 million of revenue potential expected to convert over the next 5 years, up roughly $50 million from what we shared in May. As you can see, the opportunity set comes from all the end markets we participate in and covers the diverse set of products we manufacture. As Dirkson mentioned earlier in the call, our teams have been working diligently to secure initial orders for these opportunities. To date, they have exceeded our expectations, capturing initial orders and providing visibility to approximately $200 million of cumulative organic revenue over the next 5 years. So what does it really mean to move this revenue out of the opportunity category and into the base business? Simply put, we now have a certified or qualified product for an OEM or aftermarket application that will generate revenue over the next 5 years. Think a new brake certification for an in-service platform, the replacement of an incumbent supplier of fluid sensors or switches or a new restraint for a bespoke seating configuration. All of these are examples of how we have been able to leverage our capabilities, partner with our customers and bring new products to market. Over the next 5 years, we have visibility to approximately $200 million of revenue. Like anything else in manufacturing, that revenue won't come in a straight line. That said, given our view of fleet dynamics and the OEM build rates, we feel confident in our ability to deliver on our estimates. While these organic revenue growth opportunities are extremely exciting for us, I also want to highlight what we think should be the other takeaway from this slide, which is that our unique business model and differentiated approach to market, we believe, creates a very powerful and consistent long-term growth compounder. The proprietary nature of our products affords us many benefits unique to others in our industry. We benefit from the secular growth nature of the industry by being the spec-in provider of parts on aircraft. We benefit from the ability to value price, and we benefit from being a supplier for all stages of an aircraft's life from in production periods all the way through the decades of aftermarket sales. We capture all these benefits, but our proprietary positions also allow us to form embedded customer relationships that foster cross-selling opportunities and other revenue synergies that ultimately create organic new business pipeline that we just spoke about as well as create opportunities for new businesses to be acquired. Moreover, we do this across thousands of product SKUs covering virtually every end market, customer and platform in the industry. And this diversity results in consistent and predictable aggregate performance irrespective of the macro environment. Whether OEM production rates are high or aftermarket is active, whether military budgets have short-term increases or not, or whether consumers prefer to fly commercial aircraft or utilize private aviation, our model of capturing 30, 40 or even 50-year annuities generated from a widely diversified set of customers and platforms that is consistently growing and enhancing our new business pipeline is the reason we are so confident that Loar will generate double-digit organic growth rates for the long term and do that with ever-increasing margins, cash flow and predictability. I'll now pass the call over to Glenn, who will take you through the financials. Glenn D'Alessandro: Thank you, Ian. Good morning, everyone. Let me start by discussing sales by our end markets. This comparison will be on a pro forma basis as if each of our businesses were owned as of the first day of the earliest period presented. This market discussion includes the acquisition of Beadlight in Q3 '25, LMB Fans & Motors in Q4 '25 and Harper Engineering in Q1 '26. We achieved record sales during the second quarter of 2026. In total, our sales increased to $172 million, which is a 17% increase as compared to the prior year. This increase was driven by strong performances in commercial OEM, commercial aftermarket and defense sales. Our commercial aftermarket sales saw an increase of 12% in Q2 '26 versus Q2 '25. This is primarily driven by the continued secular increases in air travel. Our total commercial OEM sales saw an increase of 28% in Q2 '26 versus the prior year. This increase was driven by higher sales across a significant portion of the platforms we supply, along with the continuing improvement in the production environment for commercial OEMs. Defense sales increased 8% in Q2 '26 as compared to the prior year. Our defense sales will fluctuate quarter-to-quarter and will continue to be lumpy given the nature of the ordering patterns of our end customers for our products. Let me recap our financial highlights for the second quarter of '26. Our net organic sales increased 12% over the prior year quarter. Our gross profit margin for Q2 '26 decreased slightly by 60 basis points as compared to the prior year quarter. This decrease was primarily due to the higher noncash amortization of acquired intangible assets related to LMB and Harper Engineering. Excluding the impact of this noncash adjustment, our gross profit margins would have been higher by 100 basis points versus the prior year quarter. Net income was flat in Q2 '26 versus '25. The higher operating income that we saw from the increased revenues was offset by higher interest expense and higher noncash amortization of acquired intangible assets. Adjusted net income increased $9 million or 35% in Q2 '26 versus Q2 '25. This increase is due to our strong financial performance during the quarter, partially offset by higher interest expense. Adjusted EBITDA was up $20 million in Q2 '26 versus the prior year. Adjusted EBITDA margins were 40.5% during Q2 '26 compared to 38.3% for Q2 '25. This increase is primarily due to our operating leverage and the execution of our strategic value drivers. In Q2 '26, our EBITDA margins were 40.5%. This is an increase of 220 basis points from Q2 '25. From 2020 through 2026, we will have increased our EBITDA margins by 910 basis points. We have achieved this growth through operating leverage, winning new profitable business, executing on our productivity initiatives and value-based pricing. All this while fully absorbing the negative impact of costs related to SOX and additional organizational expenses to support being a public company. Let me now turn the call back over to Dirkson to share our revised outlook for '26. Dirkson Charles: Thanks, Glenn. We operate with the tailwinds of a secular growth industry, which captures the increasing human need to travel, move products from point A to point B and to defend our American liberties that drives secular demand. These things have been proven to be true since the beginning of aviation and will continue to be so for the foreseeable future. As a result, Loar will continue to grow at above-average industry rates. The building blocks of our organic growth model are stronger today than when we went public 2 years ago. We have expanded our portfolio through 4 acquisitions and the success of our new business pipeline conversion to our base business. We have put in place an internal team led by our Chief Talent Officer to enhance the capabilities of our mates while continually improving our talent acquisition and communication across the group. Just to name a few of the improvements we have made since we became a public company. These continuous improvements at Loar are what will drive us to growth rates into the foreseeable future that looks like the historical records that we have delivered. Given the demand signals, our record backlog, the improvements in the supply chain, the success of our new business conversion and the diverse and proprietary nature of our portfolio, we expect commercial OE, commercial aftermarket and defense sales to be up high double-digit percentage, low double-digit percentage and mid-single-digit percentage, respectively, in calendar year 2026. As always, this view is pro forma -- on a pro forma basis, assuming we have owned all of our business units since the beginning of 2025. This results in us increasing our guidance for calendar year 2026 as follows: our increased range for net sales is now between $665 million and $675 million, adjusted EBITDA between $265 million and $270 million with margins of approximately 40%. GAAP net income will be in the range of $56 million to $60 million, while adjusted EPS will be between $1.32 and $1.36, which is up from $1.26 and $1.30 per share from our last guide. Capital expenditures will be in line with our historical rate of 3% of sales at approximately $20 million with no change to any of our other assumptions. Please note, all the amounts I've just outlined for you relating to calendar year 2026 performance assumes no additional acquisitions. However, as we have noted previously, our drumbeat is to complete 1 or 2 acquisitions each year, we just cannot predict the timing of such acquisitions. With that, operator, let's open the line for questions. Operator: [Operator Instructions] And your first question comes from John Godyn with Citi. John Godyn: In the prepared remarks, you spent quite a lot of time, a little bit more than usual on new product innovation, expanding share within existing customers, and you gave some additional detailed numbers around that. At a high level, it sounds like you guys think that, that part of the growth engine is inflecting here. And I don't know if I'm sort of reading that right, but if it is, maybe you can kind of shed some light on that and why the stars are aligning for an inflection now, it feels like there might be some room to run. Dirkson Charles: John, thanks for the question. You are correct. We have been at an inflection point, which is why we've started sharing the new business pipeline the last, I don't know, year or so. What we have actually seen is a lot of progress in terms of certification around some of the parts we have been chasing here for a few years. I know we've talked about brakes. We have a number of certified platforms, engaged with customers around those. We intend to continue to increase the certification success there over the next 6 to 9 months, and we'll continue to have what I would describe as even more wins as we move forward. On top of that, we spend, I don't know, somewhere between $30 million and $40 million a year on engineering costs. We've allocated those engineers to the projects where we believe we have the best chance of winning as opposed to working on what I would call blue sky projects. We are seeing the benefit of that. That's a switch we made about 4 or 5 years ago. And I think as we've shared with you previously, we actually compensate folks for that correct focus. We are seeing a lot of wins in a number of products. I think Ian mentioned some switches and sensors, safety restraints, et cetera. We are doing a tremendous job. It is an inflection point. So now I'm going to share something we haven't shared previously about the new business pipeline because we keep getting the question since we've been talking about it, well, what's your win rate? Well, how do you think about that? And now I can honestly tell you, we never think about win rate. All we think about is converting our efforts into base business sales. So I would say to you this way, when you get -- when we put something on a new business pipeline, we expect to win. We have a list of blue sky projects, which we allow some of our engineers to work on, and they don't get to move to the new business pipeline until we are assured we have a solution, we are sure that we have a customer, we are sure that we can do it profitably, all the things that check the box to get on to the new business pipeline. So as I said in my remarks, we haven't lost $550 million. We have a renewed focus to go convert those to the base business. So yes, we are at an inflection point. Thanks for the question, John. John Godyn: That was fantastic. I appreciate the color. Maybe I could ask a little bit about the guidance in the back half. Of course, it's good policy to kind of have some conservatism in the number. But is there any risk factor or anything that you flagged to people kind of in the back half that's on your mind? It does seem like given the performance in the first half, the raise could have been a little bit bigger. Dirkson Charles: Yes. Great way to ask the question, John. Look, is there anything in our mind, the things that are on our mind, we removed from our guidance, okay? That's the way to think about it. So when we guide, we expect to meet or beat, right? And when I say that, I'm talking about the high end. I mean people talk about the ranges. We share the range because that's what lawyers tell us we should do, okay? But our expectation is that we will meet or beat the guidance that we're sharing. And I would say this relative to your question about is there upside to that? Look, the increase is related to the success that we're seeing in new business. That usually has a learning curve, should be cautious, right, in terms of how that ramps and how you perform in your first set of parts that you produce. It's coming from the strong demand we're seeing across all the end markets. I would say this. You asked about the risk. Here's one thing that I do think about, keeping up with the demand. We have areas in our business where we know we need to invest to support the demand that we're seeing. Fans & Motors, we got to invest some more there. Restraints, we got to invest some more there, and brakes, the demand is stronger than we thought, and we've now got to catch up to make sure that we're prepared to meet the demand. Operator: Your next question comes from Ken Herbert with RBC Capital Markets. Kenneth Herbert: Nice results. I wanted to maybe just ask in the aftermarket in the second quarter and with the updated expectations for the aftermarket in the back half of the year, are you seeing any specific trends on the commercial transport relative to the business jet general aviation side that you'd call out? Dirkson Charles: Nothing that -- thanks for the question, Ken, by the way. Nothing that I can think of that I would call out. I will share this, right? We see our customers in the commercial aftermarket being prudent, being pragmatic, being safe in terms of their ordering. So where one may have ordered 8 before, they may order 6, right? Just the way -- in terms of behavior. For us, what that typically means is, okay, they will order it later because they'll need it and they'll order it at a higher price. But other than that, nothing I can call out, Ken. Kenneth Herbert: Okay. Well, based on that, are you at all concerned that there's an inventory or sort of destocking risk as we think about '27 on the aftermarket as airlines have been, and operators have been, I think, overprovisioning considering supply chain challenges and being more risk averse. But could that materialize in either destocking pressure or perhaps greater pricing pressure beyond 2026? Dirkson Charles: No, I'm not concerned there. I would say this, where we are in terms of inventory in the supply chain for our parts, I would describe it this way. March of this year, if folks were holding somewhere between 5 and 7 months' worth of inventory on their shelf to support their production, it's probably now 3 to 5 in terms of the ordering pattern, going back to people ordering 6 instead of 8. That's what I've seen. So I think we have seen whatever destocking, to use your terminology risk, is really sitting behind us. And we would expect, as we get into 2027, we would see stronger growth in the commercial aftermarket than we see this year. Plus, I would say this, last year, we were up 19%. I believe that was the number. So we're lapping really, really strong numbers in the previous year. So we're really proud, given everything I just said, of the 12%, 13% growth that we have this year. Operator: Your next question comes from Sheila Kahyaoglu with Jefferies. Sheila Kahyaoglu: Maybe if we could talk about your revenue guidance. You raised it on the commercial OE side for commercial OEM, biz jet and general aviation as well. I guess how do you think about the growth rate for that sector in terms of rank order by subsector? And then specifically for Business Aviation and GA, that's significantly above market growth, what's sort of driving that in terms of new products or share gains or price? Ian McKillop: Yes. So Sheila, it's a great question. When you think about ranking, obviously, I think the health of Boeing and Airbus would probably put the large commercial aircraft at the top of that ranking in terms of growth. Second to that would be GA and slightly behind that would be business jets. I think we haven't seen super huge rate increases there for our business jet folks. But all that said, I think that comes across all of our value drivers, right? There is new business in that. There is rate and volume growth there. And then there's obviously some pricing as we value price appropriately across all of our products. So I wouldn't say that any one outweighs the other. It's pretty evenly spread across the group. Sheila Kahyaoglu: Okay. Got it. And then maybe can you talk about what's going on within your defense markets? Is it just the tougher comps creating that organic headwind in the first half of the year or just lumpiness of the business? Any color you could give on specific defense end markets as well? Ian McKillop: Yes, it's definitely a choppy end market for us for sure. Last year, it was stellar. I think we were somewhere in the north of 20% range through the first half of the year in growth. So it's a tough comp for sure. But we experienced this, and I think we've talked about this before, where the government orders in such choppy way. They provision for a large order and then they'll show up a certain amount of time later to replenish. So no change in the underlying strength of the business, just the timing of orders as they come in. Operator: Your next question comes from Kristine Liwag with Morgan Stanley. Kristine Liwag: I wanted to dive a little bit deeper in terms of organic growth. You had 12% in the quarter, which is pretty good. But when we kind of look at some of your peers, some are printing organic growth in the quarter that are in the mid- to high teens, even north of 20%. So when we think about the roughly 207 -- sorry, the $200 million of orders that you have the baseline for of that $750 million pipeline, I guess I would have thought that you can convert this into higher organic growth. Can we talk about -- can you talk about where your portfolio is versus others? How do we think about that gap? And as we see more of these conversions, would you expect that to narrow over time and maybe get you towards more of that higher end of the peer set? Dirkson Charles: So I have nothing but respect for all of my peers in the industry. And I've seen the results that they've reported, quite impressive, truly proud of them. I'll start with that. Like I've said before, 13 is my favorite number in the whole wide world. But 13 weeks does not make the answer to the question that you're asking. So yes, I've seen some of the results that they have, great job. The way we think about Loar, not looking at how they perform is that we will have consistent performance over the long term. We have said this just now, but we are lapping significant organic growth. And if you went back and looked at some of the results prior quarters and prior years, you will note that our organic growth was much stronger than the folks that you're referring to. So we're lapping big numbers. Now with all that said, I am super, super happy with our organic growth so far this year, one. Two, in terms of the new business, the new business is future state, right? The way we think about it is we have been building for this over the last 4 or 5 years. And I think I've said this before. Historically, if you look back in time, our first 14 years, we -- I would rank it in this order in terms of our organic growth, secular growth being the biggest one, then price, then new business in that order. As we look forward, given the efforts and the relationships we've built with our customers going forward, we believe new business will be the highest ranked in terms of driving growth. Then it would be secular growth and then price in that order going forward. So let's just look at the $200 million that we just won, which is the first cut at that $750 million, which is growing, I would expect that to continue to accrete up as we move forward. So we have said 1% to 3% of organic growth for new business. And as we've said in the last few calls, and I think hopefully, it resonates with folks now that we believe we'll be closer to the 3% than the 1%. And as I also said, 4%, 5%, whatever that number is, we'll be closer to 3% than 1%. So yes, no, we're really proud of what we've created. We're really proud of the results of Q2. And I said at the beginning of our remarks, truly, truly proud of my team in terms of what they have delivered. We have gone from a company 10 years ago that was doing $20 million of revenues to doing $675 million this year. And I would not be surprised if we walk up 3 years from now and it's double that. right, because that's the engine that we have built. So I'm really proud. So I don't look to just the 13 weeks, but applaud to all my mates in the industry who have done well, good for them. Kristine Liwag: Great. Super helpful, Dirkson. And just following up on that $200 million that you have visibility into, I just want to confirm, are these now in long-term agreements? Or were you able to win the initial contracts that you know will have follow-ons? Dirkson Charles: Yes. So actually, none of them are under LTA. It's PO to PO, right? Unknown Executive: Which is what we want. Dirkson Charles: Which is what we want. It's -- we're certified. We're sole source unless it's brake where we are the second source in terms of carbon brakes, where we have PMA. But how that works is that customer is going to convert all of their needs to us, right? That's in writing, that's agreed to, with delivering all new products. So when we say $200 million, it's like saying that we're going to meet or exceed our guidance. We are 99.9999% assured, right, unless it's a black swan event that we will achieve that. Operator: Your next question comes from Connor Dessert with Goldman Sachs. Connor Dessert: You've got Connor on for Noah today. I wanted to ask a quick one about free cash conversion. It's trending just below 200% of net income year-to-date. Is there a framework we should be thinking about for free cash conversion for the rest of the year? Or if you're not willing to speak to that specifically just longer-term free cash conversion in general, given the focus on it? Dirkson Charles: So great question, Connor. The way I would think about it, sitting in your seat, is that first half looks like the second half. That's what I would say. Maybe a little bit stronger in the back half because I think as we've said previously, first half of the year, we're usually paying bonuses and taxes at a higher rate than we do in the back half. But no, we're going to continue to print money. I guess that should be the answer to my question -- to your question. We're just going to continue to print money. Connor Dessert: Okay. Noted. And then if I could ask one more on the recent acquisitions of Beadlight, LMB and Harper. How are the integration processes going for all of those? And then are the expected revenue contributions of those businesses for 2026 now higher than when you first acquired them? I think the one you called out in specifically was that LMB was expected to contribute $60 million or so to 2026 results. Just wondering how that is shaping up for the year, if you're able to talk about it. Dirkson Charles: So the answer to your question on all 3 is yes. All higher, all doing extremely well. I will answer the question in this way. We bought Beadlight with the goal of finding synergies across the group. Check. That's going really, really well. We actually have them working hand-in-hand with SCHROTH, our seatbelt business, where they share similar customers, et cetera, and that's going really, really well. LMB, in spite of the drama to get the deal done, it's been great. The demand there is such that's one of the places where we're going to see investing some capital going into 2027 as we expand our footprint beyond the borders of Europe because the demand is so good. So that's going really, really well. And in terms of Harper, Harper will probably achieve -- how we say we want to double EBITDA in 3 to 5 years. Harper will probably achieve it faster than all of those businesses I just described. So that's going really, really well. Operator: And there are no further questions at this time. So I'll hand the floor back over to -- actually, we do have one that just came up, one moment. Our question comes from Sheila Kahyaoglu with Jefferies. Sheila Kahyaoglu: You gave me an idea with the Harper doubling faster than the others. So I wanted to ask because I did realize the acquisition contribution came in a lot better. What's kind of driving that doubling of the EBITDA faster given how good of a supplier it is? Are you seeing other revenue synergy opportunities? If you could just expand on that. Dirkson Charles: Yes. And you're hitting on all the right things, right, because we do focus on top line synergies. We're seeing the benefits of having -- put Harper aside for a second, all our other business units having a different kind of relationships with Boeing. We're actually seeing growth with our customer, Boeing, probably faster than any other customer at this point in time across the group. So synergies there in spades. And in terms of Harper, we're just seeing increasing demand for their products. I mean 787, perfect example, one of the drivers of our OEM outperformance this year. Those guys are sole source on a number of products to -- on the 787. As you know, build rates have gone up. The supply chain is unlocking, helping them. And it's just going really, really well, Sheila. Thanks for asking. Operator: And now I'll hand it over to Dirkson Charles, Co-Chairman and Chief Executive Officer, for closing remarks. Dirkson Charles: So look, a big thank you to everyone that has taken the time to hear our story today. We continue to be really excited about building our aerospace and defense cash compounder. That's a business we call Loar. And we're really looking forward to speaking to you all in November where we'll take a look at what 2027 looks like and answer some of the questions that I cannot answer today. So speak to you guys in November. Operator: Thank you. And this concludes today's conference. You may disconnect your lines at this time. Thank you all for your participation. Before you buy stock in Loar, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Loar wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $400,209!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,375,393!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 13, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Loar Holdings (LOAR) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Interested in Loar Holdings Inc.? Here are five stocks we like better. Record quarter: Loar’s second-quarter sales rose 17% year over year to $172 million, while adjusted EBITDA margin expanded 220 basis points to a record 40.5%. Commercial OEM sales led growth, increasing 28%, supported by stronger Boeing and Airbus demand. Raised 2026 outlook: The company now expects $665 million-$675 million in sales, $265 million-$270 million in adjusted EBITDA and adjusted EPS of $1.32-$1.36, with no additional acquisitions assumed. Strong growth pipeline: Loar’s organic business pipeline reached approximately $750 million over the next five years, including $200 million of opportunities already secured through certifications, qualifications or purchase orders. Recent acquisitions Beadlight, LMB and Harper are performing ahead of expectations. Archer or Joby: Which Aviation Company Might Rise Fastest? Loar (NYSE:LOAR) reported record second-quarter sales, adjusted EBITDA and adjusted EBITDA margin, while raising its full-year 2026 outlook as commercial aerospace demand and organic business wins supported growth. Chief Executive Officer and Executive Co-Chairman Dirkson Charles said the quarter marked the company’s 16th consecutive quarter of sequential adjusted EBITDA growth. He attributed the results to collaboration across business units, focused resource allocation and demand across commercial OEM, commercial aftermarket and defense markets. → Sandisk Just Delivered a Blowout Quarter—Here's Why the Stock Is Falling Second-quarter sales rose 17% year over year to $172 million on a pro forma basis that includes Beadlight, LMB Fans & Motors and Harper Engineering. Net organic sales increased 12% from the prior-year quarter, according to Treasurer and Chief Financial Officer Glenn D’Alessandro. Commercial OEM sales increased 28% from the second quarter of 2025, making it the company’s fastest-growing end market for the second consecutive quarter. Charles said improved supply-chain conditions had unlocked demand for Loar’s components, with the Boeing 787, Airbus A320 family and Boeing 737 family among the platforms showing the largest sales increases. → 4 Oil and Gas ETF Plays as Prices Stay Sky-High Commercial aftermarket sales increased 12%, driven primarily by secular growth in air travel, D’Alessandro said. Charles said customers have been ordering more conservatively than earlier in the supply-chain disruption cycle, but he did not express concern about an inventory-related downturn. He said inventory levels in the supply chain had declined and that Loar expects stronger commercial aftermarket growth in 2027 than in 2026. Defense sales increased 8% from the prior-year period. Management said the defense business remains subject to uneven government ordering patterns, particularly against a strong comparison in the prior year, but it sees no change in the underlying health of the market. → No Hangover: Revisiting Microsoft One Week After Earnings For the full year, Loar expects commercial OEM revenue to rise by a high-double-digit percentage, commercial aftermarket sales to grow by a low-double-digit percentage, and defense revenue to increase by a mid-single-digit percentage. The outlook is on a pro forma basis, assuming all business units had been owned since the start of 2025. Adjusted EBITDA increased by $20 million year over year, while adjusted EBITDA margin expanded 220 basis points to 40.5%, from 38.3% a year earlier. D’Alessandro cited operating leverage and execution of the company’s strategic initiatives, including productivity efforts, new-business wins and value-based pricing. Gross profit margin declined 60 basis points, largely due to higher non-cash amortization associated with acquired intangible assets from LMB and Harper Engineering. Excluding that non-cash effect, gross margin would have increased 100 basis points from the prior-year quarter, D’Alessandro said. GAAP net income was flat from the second quarter of 2025, as higher operating income was offset by increased interest expense and amortization. Adjusted net income rose $9 million, or 35%, year over year. Charles also emphasized cash generation, saying year-to-date operating cash flow less capital expenditures was 1.9 times reported net income. He said the first-half cash-flow trend should continue in the second half, potentially improving as bonus and tax payments become less of a factor. Loar said its organic business pipeline now represents about $750 million in potential revenue expected to convert over the next five years, up about $50 million from the amount discussed in May. The company said it has secured initial orders representing approximately $200 million in cumulative organic revenue over that same five-year period. Director of Investor Relations Ian McKillop said the wins include newly certified or qualified products for OEM and aftermarket applications, such as brakes, fluid sensors, switches and seating restraints. The $200 million of opportunities have moved into Loar’s base business after certification or qualification, management said. Charles said Loar has shifted engineering resources toward projects with clearer customer demand and a higher likelihood of profitable commercialization. The company spends approximately $30 million to $40 million annually on engineering, he said. Management said the $200 million of identified revenue is not primarily governed by long-term agreements, but is supported by purchase orders, certifications and, in many cases, sole-source positions. Charles said the company expects new business to become a more significant long-term growth contributor than it was historically. Loar raised its 2026 guidance, now forecasting: Net sales of $665 million to $675 million. Adjusted EBITDA of $265 million to $270 million. Adjusted EBITDA margin of approximately 40%. GAAP net income of $56 million to $60 million. Adjusted earnings per share of $1.32 to $1.36, up from prior guidance of $1.26 to $1.30. Capital expenditures of about $20 million, or roughly 3% of sales. The guidance assumes no additional acquisitions. Charles said management expects to meet or exceed its updated outlook, while noting that the company must continue investing in capacity to meet demand in areas including fans and motors, restraints and brakes. Executive Co-Chairman Brett Milgrim said Loar continues to pursue one to two acquisitions annually, maintaining its focus on proprietary aerospace and defense businesses with high barriers to entry and balanced OEM and aftermarket exposure. Since becoming public about two years ago, Loar has announced four acquisitions and invested more than $1.1 billion in mergers and acquisitions. Management said Beadlight, LMB and Harper are all performing ahead of expectations. Charles said LMB’s demand profile may require further investment to expand capacity beyond Europe, while Harper is benefiting from demand tied to the Boeing 787 and could reach Loar’s targeted EBITDA growth objectives faster than expected. Loar Holdings Inc, through its subsidiaries, designs, manufactures, and markets aerospace and defense components for aircraft, and aerospace and defense systems in the United States and internationally. It offers products in various categories, which include airframe components, structural components, avionics, composites, braking system components, de-ice and ice protection, electro-mechanical, engineered materials, flight controls, fluid and motion controls, environmental, metal forming, molded components, and restraints and safety devices. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Loar Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Achieved a 16th consecutive quarter of sequential adjusted EBITDA growth, driven by intentional collaboration across business units and a disciplined focus on high-probability opportunities. Converted approximately 25% of the new business pipeline into active wins, reflecting a strategic shift from 'blue sky' projects to certified, customer-backed solutions with high profitability. Commercial OE sales grew 28% year-over-year, benefiting from an improved supply chain that unlocked pent-up demand for parts on the Boeing 787, A320, and 737 platforms. Commercial aftermarket performance remained predictable with double-digit growth, supported by proprietary product positions that provide high visibility into long-term demand cycles. Defense end market sales improved 8% as customers returned to habitual ordering patterns, though management notes this segment remains inherently 'choppy' due to geopolitical funding cycles. Maintained a strong focus on cash generation, with free cash flow reaching nearly 200% of reported net income, emphasizing the company's identity as an industrial cash compounder. Increased 2026 adjusted EBITDA guidance to $265 million–$270 million, assuming high double-digit growth in commercial OE and low double-digit growth in aftermarket. Anticipates a shift in organic growth drivers where new business wins will eventually outpace secular growth and pricing as the primary engine for expansion. Expects to invest additional capital in 2027 to expand manufacturing footprints for Fans & Motors, restraints, and brakes to keep pace with stronger-than-expected demand. Maintains a strategic 'drumbeat' of 1 to 2 acquisitions per year, targeting proprietary niche businesses that meet strict return thresholds and offer cross-selling potential. Projects that the $200 million in cumulative organic revenue visibility over the next five years will not follow a straight line but is secured by sole-source or certified positions. Gross profit margins were slightly impacted by higher non-cash amortization of acquired intangible assets related to the LMB and Harper Engineering acquisitions. Management flagged the challenge of 'keeping up with demand' as a primary operational focus, requiring targeted investments in high-growth product lines. Recent acquisitions (Beadlight, LMB, and Harper) are performing ahead of initial expectations, with Harper Engineering projected to double its EBITDA faster than the historical average. Inventory levels in the supply chain have normalized from 5-7 months to 3-5 months, suggesting that previous destocking risks are largely in the past. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management clarified that the 25% conversion rate does not imply the other 75% was lost; rather, those projects are still being worked toward certification and base business conversion. The company shifted its engineering focus 4-5 years ago away from 'blue sky' research toward specific, profitable customer solutions, which is now yielding a higher volume of wins. Management observed that customers are becoming more pragmatic, ordering smaller quantities (e.g., 6 units instead of 8) more frequently, which often results in higher pricing for Loar. Confirmed that any significant destocking risk is likely behind the company, with expectations for stronger commercial aftermarket growth in 2027. Addressed the 12% organic growth rate by noting the company is lapping exceptionally strong prior-year comparisons (e.g., 19% growth in previous periods). Emphasized that Loar's model focuses on long-term compounding rather than 13-week fluctuations, with high confidence in reaching the upper end of their 1-3% new business growth target. Confirmed that these wins are generally 'PO to PO' (Purchase Order) rather than under Long-Term Agreements (LTAs), which management prefers for pricing flexibility. Stated that while not under LTA, the company is 99.9% assured of the revenue because they are the certified sole-source or primary second-source provider.

WHITE PLAINS, NY / ACCESS Newswire / August 6, 2026 / Loar Holdings Inc. (NYSE:LOAR) (the "Company," "Loar," "we," "us" and "our") reported record results for the second quarter of 2026. "Through the first half of the year, the business continues to outperform our expectations, driven by exceptional demand across our end-markets and strong conversion of our new business pipeline. Of the approximately $750 million in our pipeline, we secured initial orders that provide visibility to approximately $200 million of revenue over the next five years," said Dirkson Charles, Loar Holdings Chief Executive Officer and Executive Co-Chairman of the Board of Directors. Second Quarter 2026 Net sales of $171.6 million, up 39.4% compared to the prior year's quarter. Net income of $16.7 million, equal to the prior year's quarter. Diluted earnings per share of $0.18 compared to $0.17 for the prior year's quarter. Adjusted EBITDA of $69.4 million up 47.4% compared to the prior year's quarter. Net income margin of 9.8% compared to 13.6% for the prior year's quarter. Adjusted EBITDA Margin for the quarter was 40.5% compared to 38.3% for the prior year's quarter. Adjusted Earnings Per Share of $0.38, up 22.6% compared to $0.31 for the prior year's quarter. Loar reported net sales for the quarter of $171.6 million, an increase of $48.5 million or 39.4% over the prior year's quarter. Organically,(1) net sales increased 12.3% or $15.1 million, to $138.3 million. Net income for the quarter was $16.7 million, equal to the prior year's quarter. Net income for the quarter was impacted by higher interest expense and higher non-cash amortization of acquired intangible assets. Adjusted EBITDA for the quarter was $69.4 million, an increase of 47.4% or $22.3 million compared to the prior year's quarter. Adjusted EBITDA Margin was 40.5%, compared to 38.3% in the second quarter of the prior year. The increase in Adjusted EBITDA Margin was due to the execution of our strategic value drivers and the accretive impact of increased sales. Year-to-Date Net sales of $327.7 million, up 37.8% over the comparable prior year period. Net income of $27.9 million, compared to $32.0 million for the prior year period. Diluted earnings per share of $0.29 compared to $0.33 for the prior year period. Adjusted EBITDA of $132.7 million, up 47.0% over the comparable prior year period. Net income margin of 8.5% compared to 13.5% for the prior year period. Adjusted EBITDA Margin was 40.5% compared to 38.0% in the comparable prior year period. Adjusted Earnings Per Share of $0.72, up 22.0% compared to $0.59 over the comparable prior year period. Loar reported net sales for the six months ended June 30, 2026 of $327.7 million, an increase of $89.9 million or 37.8% over the comparable period of the prior year. Organically,(1) net sales increased 11.9% or $28.2 million, to $266.0 million. Net income for year-to-date June 30, 2026 was $27.9 million, a decrease of $4.1 million compared to the same period of the prior year. The decrease in net income was primarily driven by higher interest expense, higher non-cash amortization of acquired intangible assets, and non-cash expense of inventory step-up attributable to the acquisitions of LMB and Harper Engineering. Adjusted EBITDA for the first six months of 2026 was $132.7 million, an increase of 47.0% or $42.4 million over the comparable period of the prior year. Adjusted EBITDA Margin was 40.5%, compared to 38.0% for the comparable prior year period. The increase in Adjusted EBITDA Margin was due to the execution of our strategic value drivers and the accretive impact of increased sales. Please see the attached Table 4 for a reconciliation of net income to EBITDA, Adjusted EBITDA andAdjusted EBITDA Margin for the periods discussed in this press release. Full Year 2026 Outlook - Revised "Our Q2 and year-to-date results reflect the strength and consistency of Loar's operating model. Achieving Adjusted EBITDA Margins above 40% for the second consecutive quarter underscores the quality of our portfolio, robust demand across our end markets, and our disciplined focus on executing our strategic value drivers," said Glenn D'Alessandro, Loar Holdings Treasurer and Chief Financial Officer. "As we look ahead, we remain well positioned to capitalize on attractive growth opportunities while continuing to deliver strong results." Our outlook for the full year 2026 includes: Net sales - between $665 million and $675 million, up from between $645 million and $655 million. Net income - between $56 million and $60 million, up from between $53 million and $57 million. Adjusted EBITDA - between $265 million and $270 million, up from between $257 million and $262 million. Adjusted EBITDA Margin - approximately 40%. Diluted Earnings per share - between $0.57 and $0.62, up from between $0.54 and $0.59. Net income margin - approximately 8%. Adjusted Earnings Per Share - between $1.32 and $1.36 up from between $1.26 and $1.30. Interest expense - approximately $80 million. Depreciation expense - approximately $15 million. Amortization expense - approximately $65 million. Market Assumptions - Full year outlook is based on the following assumptions: Adjusted EBITDA, Adjusted Earnings Per Share and Adjusted EBITDA Margin are non-GAAP financial measures provided in the "Full Year 2026 Outlook - Revised" section on a forward-looking basis. The Company does not provide a reconciliation of such forward-looking measures to the most directly comparable financial measures calculated and presented in accordance with GAAP because to do so would be potentially misleading and not practical given the difficulty of projecting event-driven transactional and other non-core operating items in any future period. The magnitude of these items, however, may be significant. Earnings Conference Call A conference call will be held at 11:00 a.m., Eastern Time on August 6, 2026. To participate in the call telephonically, please dial +1 877-407-0670 / +1 215-268-9902. International participants can find a list of toll-free numbers here. A live audio webcast will also be available at the following link, as well as through the Investor section of the Loar Holdings website: https://ir.loargroup.com. The webcast will be archived and available for replay later in the day. About Loar Holdings Inc. Loar Holdings Inc. is a diversified manufacturer and supplier of niche aerospace and defense components that are essential for today's aircraft and aerospace and defense systems. Loar has established relationships across leading aerospace and defense original equipment manufacturers and Tier Ones worldwide. Non-GAAP Supplemental Information We present in this press release certain financial information based on our EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income and Adjusted Earnings Per Share. References to "EBITDA" mean earnings before interest, taxes, depreciation and amortization, references to "Adjusted EBITDA" mean EBITDA plus, as applicable for each relevant period, certain adjustments as set forth in the reconciliations of net income to EBITDA and Adjusted EBITDA, and references to "Adjusted EBITDA Margin" refer to Adjusted EBITDA divided by net sales. References to "Adjusted Net Income" mean net income plus certain adjustments as set forth in the reconciliations below to derive Adjusted EBITDA from EBITDA and the amortization of acquired intangible assets, less the tax effect of these adjustments. References to "Adjusted Earnings Per Share" mean Adjusted Net Income divided by weighted average common shares outstanding-diluted. EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income and Adjusted Earnings Per Share are not measurements of financial performance under U.S. GAAP. We present EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income and Adjusted Earnings Per Share because we believe they are useful indicators for evaluating operating performance. In addition, our management uses Adjusted EBITDA to review and assess the performance of the management team in connection with employee incentive programs and to prepare its annual budget and financial projections. Moreover, our management uses Adjusted EBITDA of target companies to evaluate acquisitions. Although we use EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income and Adjusted Earnings Per Share as measures to assess the performance of our business and for the other purposes set forth above, the use of non-GAAP financial measures as analytical tools has limitations, and you should not consider any of them in isolation, or as a substitute for analysis of our results of operations as reported in accordance with U.S. GAAP. Some of these limitations are: EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin do not reflect the significant interest expense, or the cash requirements necessary to service interest payments on our indebtedness. Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and the cash requirements for such replacements are not reflected in EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin. EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income and Adjusted Earnings Per Share exclude the cash expense we have incurred to integrate acquired businesses into our operations, which is a necessary element of certain of our acquisitions. The omission of the substantial amortization expense associated with our intangible assets further limits the usefulness of EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income and Adjusted Earnings Per Share. EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin do not include the payment of taxes, which is a necessary element of our operations. Because of these limitations, EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income and Adjusted Earnings Per Share should not be considered as measures of cash available to us to invest in the growth of our business. Management compensates for these limitations by not viewing EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income and Adjusted Earnings Per Share in isolation and specifically by using other U.S. GAAP measures, such as net sales and operating profit, to measure our operating performance. EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income and Adjusted Earnings Per Share are not measurements of financial performance under U.S. GAAP, and they should not be considered as alternatives to net income or cash flow from operations determined in accordance with U.S. GAAP. Our calculations of EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income and Adjusted Earnings Per Share may not be comparable to the calculations of similarly titled measures reported by other companies. Future-Looking Statements This press release includes express or implied forward-looking statements. Forward-looking statements include all statements that are not historical facts, including those that reflect our current views with respect to, among other things, our operations and financial performance. The words "anticipate," "assume," "believe," "continue," "could," "estimate," "expect," "intend," "may," "plan," "potential," "predict," "project," "future," "will," "seek," "foreseeable," the negative version of these words or similar terms and phrases may identify forward-looking statements in this press release, but the absence of these words does not mean that a statement is not forward-looking. The forward-looking statements contained in this press release, including, but not limited to, the statements under the heading "Full Year 2026 Outlook - Revised" are based on management's current expectations and are not guarantees of future performance. Our expectations and beliefs are expressed in management's good faith, and we believe there is a reasonable basis for them, however, the forward-looking statements are subject to various known and unknown risks, uncertainties, assumptions, or changes in circumstances that are difficult to predict or quantify. Actual results may differ materially from these expectations due to changes in global, regional, or local economic, business, competitive, market, regulatory, and other factors, many of which are beyond our control. We believe that these factors include but are not limited to the following: 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 the other risks and uncertainties described in Part I, Item 1A of the Annual Report on Form 10-K for the year ended December 31, 2025 filed with the Securities and Exchange Commission ("SEC"), and other periodic reports filed by the Company from time to time with the SEC. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this press release. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, our actual results may vary in material respects from those projected in the forward-looking statements. Any forward-looking statement made by us in this press release speaks only as of the date of this press release and is expressly qualified in its entirety by the cautionary statements included in this press release. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, investments, or other strategic transactions we may make. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by any applicable law. ContactIan McKillopLoar Holdings Inc. Investor [email protected] Loar Holdings Inc. Table 1: Condensed Consolidated Balance Sheets (Unaudited, amounts in thousands except share amounts) Loar Holdings Inc. Table 2: Condensed Consolidated Statements of Income (Unaudited, amounts in thousands except per common share amounts) Loar Holdings Inc. Table 3: Condensed Consolidated Statements of Cash Flows (Unaudited, amounts in thousands) Loar Holdings Inc. Table 4: Reconciliation of Net income to EBITDA and Adjusted EBITDA (Unaudited, amounts in thousands) Represents accounting adjustments to inventory associated with acquisitions of businesses that were charged to cost of sales when inventory was sold. Represents an adjustment to the contingent purchase price for the Harper Engineering acquisition during the three and six months ended June 30, 2026. 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. Represents the non-cash compensation expense recognized by the Company for equity awards. Represents costs incurred to integrate acquired businesses and product lines into our operations, facility relocation costs and other acquisition-related costs. Loar Holdings Inc. Table 5: Sales by End-Market (Unaudited, amounts in thousands) Loar Holdings Inc. Table 6: Reconciliations of Earnings Per Share to Adjusted Earnings Per Share and Net Income to Adjusted Net Income (Unaudited, amounts in thousands except per share amounts) The calculation of Adjusted Earnings Per Share has been updated for the current and prior year's results to reflect an adjustment for amortization of acquired intangible assets. We believe this adjustment provides a more consistent view of our earnings. The tax adjustment represents the tax effect of the adjustments at the applicable effective tax rate. To determine the applicable effective tax rate, transaction expenses and stock-based compensation are excluded from Adjusted Net Income and therefore we have excluded the impact those items have on the effective tax rate. SOURCE: Loar Group Inc. View the original press release on ACCESS Newswire

Loar Holdings Inc. (LOAR) came out with quarterly earnings of $0.38 per share, beating the Zacks Consensus Estimate of $0.31 per share. This compares to earnings of $0.23 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +22.58%. A quarter ago, it was expected that this company would post earnings of $0.15 per share when it actually produced earnings of $0.34, delivering a surprise of +126.67%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Loar Holdings Inc., which belongs to the Zacks Aerospace - Defense Equipment industry, posted revenues of $171.58 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 6.68%. This compares to year-ago revenues of $123.12 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Loar Holdings Inc. shares have added about 11.3% since the beginning of the year versus the S&P 500's gain of 12.8%. While Loar Holdings Inc. has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Loar Holdings Inc. was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.33 on $167.2 million in revenues for the coming quarter and $1.30 on $647.66 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Aerospace - Defense Equipment is currently in the top 36% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Rocket Lab Corporation (RKLB), another stock in the same industry, has yet to report results for the quarter ended June 2026. The results are expected to be released on August 10. This company is expected to post quarterly loss of $0.03 per share in its upcoming report, which represents a year-over-year change of +70%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Rocket Lab Corporation's revenues are expected to be $231.57 million, up 60.3% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Loar Holdings Inc. (LOAR) : Free Stock Analysis Report Rocket Lab Corporation (RKLB) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Loar Holdings Inc. (LOAR) could be a solid addition to your portfolio given a notable revision in the company's earnings estimates. While the stock has been gaining lately, the trend might continue since its earnings outlook is still improving. The upward trend in estimate revisions for this company reflects growing optimism of analysts on its earnings prospects, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. Our stock rating tool -- the Zacks Rank -- is principally built on this insight. The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008. For Loar Holdings Inc., strong agreement among the covering analysts in revising earnings estimates upward has resulted in meaningful improvement in consensus estimates for the next quarter and full year. The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate: The earnings estimate of $0.31 per share for the current quarter represents a change of +34.8% from the number reported a year ago. Over the last 30 days, the Zacks Consensus Estimate for Loar Holdings Inc. has increased 68.75% because one estimate has moved higher compared to no negative revisions. For the full year, the earnings estimate of $1.30 per share represents a change of +25.0% from the year-ago number. The revisions trend for the current year also appears quite promising for Loar Holdings Inc., with one estimate moving higher over the past month compared to no negative revisions. The consensus estimate has also received a boost over this time frame, increasing 75.76%. The promising estimate revisions have helped Loar Holdings Inc. earn a Zacks Rank #2 (Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision.You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500. While strong estimate revisions for Loar Holdings Inc. have attracted decent investments and pushed the stock 8.8% higher over the past four weeks, further upside may still be left in the stock. So, you may consider adding it to your portfolio right away. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Loar Holdings Inc. (LOAR) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research