$LOAR earnings report

Loar reported record third-quarter net sales of $176.2 million, up 39.0% from the prior-year quarter, with organic net sales increasing 15.8% to $146.8 million. Adjusted EBITDA increased 46.5% to $71.9 million and Adjusted EBITDA Margin improved to 40.8% from 38.7%. Management attributed the margin improvement to strategic value drivers and the accretive impact of increased sales.

GAAP earnings moved in the opposite direction. Third-quarter net income was $19.6 million compared with $27.6 million, while diluted earnings per share was $0.20 compared with $0.29. The company identified higher interest expense, higher income tax expense and higher non-cash amortization of acquired intangible assets as the principal impacts. Net income margin declined to 11.2% from 21.8%, despite the higher Adjusted EBITDA Margin.

For the nine months ended September 30, 2026, net sales were $503.8 million, up 38.2%, and Adjusted EBITDA was $204.6 million, up 46.8%. Nine-month Adjusted EBITDA Margin reached 40.6% versus 38.2%. However, nine-month net income declined to $47.5 million from $59.6 million, reflecting higher interest expense, non-cash amortization of acquired intangible assets, higher income tax expense and inventory step-up expense tied to the LMB and Harper Engineering acquisitions.

Cash flow and the balance sheet reflect acquisition activity and increased leverage. Net cash provided by operating activities for the nine months was $106.1 million, while capital expenditures were $(12.5 million) and payments for acquisitions, net of cash acquired, were $(249.8 million). Long-term debt, net was $941.9 million at September 30, 2026, and the company received $240.0 million in proceeds from issuance of long-term debt during the nine-month period.

Management raised full-year 2026 net sales outlook to between $669 million and $679 million, Adjusted EBITDA outlook to between $270 million and $275 million and Adjusted Earnings Per Share outlook to between $1.36 and $1.40. The 2027 outlook calls for net sales between $745 million and $755 million, Adjusted EBITDA between $312 million and $317 million and approximately 42% Adjusted EBITDA Margin. Execution against backlog conversion, the stated end-market growth assumptions and interest expense will be central to whether strong operating growth translates into GAAP earnings expansion.

Loar reported record second-quarter results, led by net sales of $171.6 million, up 39.4% compared to the prior year’s quarter. Organic net sales increased 12.3% or $15.1 million, to $138.3 million, indicating that the period's growth was supported by existing businesses as well as acquisitions. Management attributed demand strength to its end-markets and conversion of its new business pipeline.

Profitability was stronger on the company’s non-GAAP measure. Adjusted EBITDA increased 47.4% or $22.3 million to $69.4 million, while Adjusted EBITDA Margin expanded to 40.5% from 38.3%. The company attributed margin expansion to strategic value-driver execution and the accretive impact of increased sales. The year-to-date Adjusted EBITDA Margin was also 40.5%, compared with 38.0% in the comparable prior-year period.

GAAP earnings did not grow at the same rate as sales and Adjusted EBITDA. Second-quarter net income was $16.7 million, equal to the prior year’s quarter, and net income margin declined to 9.8% from 13.6%. Year-to-date net income was $27.9 million compared with $32.0 million, while year-to-date net income margin was 8.5% compared with 13.5%. The company identified higher interest expense, higher non-cash amortization of acquired intangible assets, and, year-to-date, non-cash inventory step-up expense from the LMB and Harper Engineering acquisitions as the principal factors affecting GAAP earnings.

The outlook was raised across the principal financial measures. Full-year net sales guidance increased to between $665 million and $675 million from between $645 million and $655 million, and Adjusted EBITDA guidance increased to between $265 million and $270 million from between $257 million and $262 million. The company also raised net income, diluted earnings per share, and Adjusted Earnings Per Share outlook. The revised outlook continues to target Adjusted EBITDA Margin of approximately 40%, while assuming high-double-digit Commercial, Business Jet, and General Aviation OEM growth, low-double-digit aftermarket growth, and mid-single-digit Defense growth.

Investors should focus on the divergence between expanding Adjusted EBITDA Margin and lower GAAP net income margins, particularly given full-year assumptions of approximately $80 million of interest expense and approximately $65 million of amortization expense. Pipeline conversion is another central variable: management cited approximately $750 million in pipeline opportunities and initial orders providing visibility to approximately $200 million of revenue over the next five years. No capital-return activity, cash balance, debt balance, operating cash flow, or free cash flow was reported in the supplied filing text.