LOAR 10-K & 10-Q changes, risk factors and insider trading
Loar Holdings Inc. · NYSE · Aircraft Parts & Auxiliary Equipment, Nec · CIK 2000178 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
Removed heading “We are an “emerging growth company” and we cannot be certain if the reduced disclosure requirements applicable to “emerging growth companies” will make our common stock less attractive to investors.”
Removed heading “Failure to comply with requirements to design, implement and maintain effective internal controls could have a material adverse effect on our business and stock price.”
Largest changes
“As a privately held company, we were not required to evaluate our internal control over financial reporting in a manner that meets the standards of publicly traded companies required by Section 404(a) of the Sarbanes-Oxley Act (“Section 404”). As a public company, we are subject to significant requirements for enhanced financial reporting and internal controls. …”see in full comparison
“In connection with the implementation of the necessary procedures and practices related to internal control over financial reporting, we may identify deficiencies that we may not be able to remediate in time to meet the deadline imposed by the Sarbanes-Oxley Act for compliance with the requirements of Section 404. In addition, we may encounter problems or delays in completing the remediation of any deficiencies identified by us or our independent registered public accounting firm in connection with the issuance of their attestation report. …”see in full comparison
“We are an “emerging growth company” and we cannot be certain if the reduced disclosure requirements applicable to “emerging growth companies” will make our common stock less attractive to investors.”see in full comparison
“Failure to comply with requirements to design, implement and maintain effective internal controls could have a material adverse effect on our business and stock price.”see in full comparison
“Similarly, we derive revenue either directly or indirectly from contracts with foreign governments (including, without limitation, the United Kingdom, Germany, and France). As a result, changes in such government’s budgetary priorities could directly affect our financial performance. …”see in full comparison
see in full comparisonDuringIf unexpected global events, such as pandemics, cause a prolonged period of significant market disruption in the aerospace and defense industry,such as the adverse impact the COVID-19 pandemic had on the commercial aerospace market, and other macroeconomic factors such as when recessions occur,our business may be disproportionately impacted compared to companies that are more diversified in the industries they serve. A more diversified company with significant sales and earnings derived from outside the aerospace and defense sector may be able to recover more quickly from significant market disruptions.
Full comparison: every changed paragraph (32)
DuringIf unexpected global events, such as pandemics, cause a prolonged period of significant market disruption in the aerospace and defense industry, such as the adverse impact the COVID-19 pandemic had on the commercial aerospace market, and other macroeconomic factors such as when recessions occur, our business may be disproportionately impacted compared to companies that are more diversified in the industries they serve. A more diversified company with significant sales and earnings derived from outside the aerospace and defense sector may be able to recover more quickly from significant market disruptions.
Our customers are concentrated in the aerospace industry. Our two largest customers accounted for approximately 21%19% of net sales during the year ended December 31, 2024.2025. A material reduction in purchasing by one of our larger customers for any reason, including, but not limited to, general economic or aerospace market downturn, decreased production, strike, or resourcing, or the effects of global economic crises such as the COVID-19a pandemic could have a material adverse effect on results of operations, financial position and cash flows.
Our business may be adversely affected by changes in government budgetary priorities of the U.S. Government.priorities.
Similarly, we derive revenue either directly or indirectly from contracts with foreign governments (including, without limitation, the United Kingdom, Germany, and France). As a result, changes in such government’s budgetary priorities could directly affect our financial performance. A significant decline in foreign government expenditures, a shift of expenditures away from programs that we support or a change in foreign government contracting policies could cause foreign government agencies to reduce their purchases under contracts, to exercise their right to terminate contracts at any time without penalty or not to exercise options to renew contracts, any of which could result in decreased sales of our products.
Additionally, in connection with our global operations, we, from time to time, transmit data across national borders to conduct our business and, consequently, are subject to a variety of laws and regulations regarding privacy, data protection, and data security, including those related to the collection, processing, storage, handling, use, disclosure, transfer, and security of personal data, including the European Union General Data Protection Regulation,GDPR, Personal Information Protection Law in China and similar regulations in states within the United StatesStates, such as the CCPA, and in countries around the world. Our efforts to comply with privacy and data protection laws may impose significant costs and challenges that are likely to increase over time.
The interpretation and application of data protection laws in the U.S. and Europe, including, but not limited to, the General Data Protection Regulation (the “GDPR”) and the California Consumer Privacy Act (the “CCPA”),CCPA, and elsewhere are uncertain and evolving. It is possible that these laws may be interpreted and applied in a manner that is inconsistent with our data practices. Complying with these various laws is difficult and could cause us to incur substantial costs or require us to change our business practices in a manner adverse to our business. Further, although we have implemented internal controls and procedures designed to ensure compliance with the GDPR, CCPA and other privacy-related laws, rules and regulations (collectively, the “Data Protection Laws”), our controls and procedures may not enable us to be fully compliant with all Data Protection Laws.
We generally experienced price inflation in our costs for labor and materials, such as aluminum, nickel, and titanium during the years 20232025 and 2024, which adversely affected our business, results of operations and financial condition. We may not be able to pass through inflationary cost increases under our existing fixed-price contracts. Our ability to raise prices to reflect increased costs may be limited by competitive conditions in the market for our products and services. Russia’s invasion of Ukraine, and prolonged conflict there, as well as the conflict between Israel and Hamas may result in increased inflation, escalating energy and commodity prices and increasing costs of materials. We continue to work to mitigate such pressures on our business operations as they develop. To the extent the war in Ukraine and the conflict between Israel and Hamas adversely affectaffects our business as discussed above, it may also have the effect of heightening many of the other risks described herein, such as those relating to cybersecurity, supply chain, volatility in prices and market conditions, any of which could negatively affect our business and financial condition.
We are monitoring the ongoing conflict between Russia and Ukraine and the related export controls and financial and economic sanctions imposed on certain industry sectors, including the aviation sector, and parties in Russia by the U.S., the UK, the European Union and others,others. asAlthough well as thethis conflict between Israel and Hamas. Although these conflicts havehas not resulted in a direct material adverse impact on our business to date, the implications of the Russia and Ukraine conflict and the Israel and Hamas conflict in the short-term and long-term are difficult to predict at this time. Factors such as increased energy costs, increased freight costs, the availability of certain raw materials for aircraft manufacturers, embargoes on flights from Russian airlines, sanctions on Russian companies, and the stability of Ukrainian customers could impact the global economy and aviation sector.
Mergers and acquisitions have resulted in significant increases in identifiable intangible assets and goodwill. Identifiable intangible assets, which primarily include customer relationships, contract backlog, tradename, technology and favorable leases, were approximately $435$606 million as of December 31, 2024,2025, net of accumulated amortization. Goodwill recognized in accounting for the mergers and acquisitions was approximately $694$1.0 millionbillion as of December 31, 2024.2025. We may never realize the full value of our identifiable intangible assets and goodwill. If at any time we determine an impairment has occurred, we are required to reflect the reduction in value as an expense within operating income, resulting in a reduction of earnings and a corresponding reduction in our net asset value in the period such impairment is identified.
We are subject to income taxes in the U.S., Germany andGermany, the United Kingdom.Kingdom, and France. The Company’s domestic and international tax liabilities are dependent upon the location of earnings among these different jurisdictions. The Company’s future results of operations could be adversely affected by changes in the Company’s effective tax rate as a result of changes in the mix of earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets, challenges by tax authorities or changes in tax laws or regulations. In addition, the amount of income taxes paid by the Company is subject to ongoing audits by U.S. federal, state and local tax authorities and by non-U.S. tax authorities. If these audits result in assessments different from amounts reserved, future financial results may include unfavorable adjustments to the Company’s tax liabilities, which could have a material adverse effect on the Company’s results of operations.
We face risks related to health pandemics, epidemics, outbreaks and other public health crises, such as the COVID-19 pandemic.crises.
A significant public health crisis, such as the COVID-19a pandemic, could cause an adverse impact on our employees, operations, supply chain and distribution system, and have a long-term impact on our business. Numerous uncertainties have risen from the public health crises in the past, including resurgences and the emergence and spread of variants, actions that may be taken by governmental authorities in response to public health crises, the efficacy and public acceptance of vaccines, and unintended consequences of the foregoing. Our ability to predict and respond to future changes resulting from potential health crises is uncertain. Even after a public health crisis subsides, there may be long-term effects on our business practices and customers in economies in which we operate that could severely disrupt our operations and could have a material adverse effect on our business, results of operations, cash flows and financial condition.
The commercial aerospace industry, in particular, has beenwas significantly disrupted, both domestically and internationally, by the COVID-19 pandemic, which resulted in governments around the world implementing stringent measures to help control the spread of the virus, including quarantines, “shelter in place” and “stay at home” orders, travel restrictions, business curtailments and other measures. As a result, demand for travel declined at a rapid pace beginning in the second half of 2020. If another public health crisis were to arise in the future, it may cause similar disruptions.
TheSimilar recentas to what was experienced with the COVID-19 pandemic, a future global pandemic hascould also disrupteddisrupt the global supply chain and availability of raw materials, particularly electronic parts. TheA disruption in the supply chain hascould resultedresult in increased freight costs, raw material costs and labor costs from the ongoingan inflationary environment. Our business has been adversely affected and could continue to be adversely affected by disruptions in our ability to timely obtain raw materials and components from our suppliers in the quantities we require or on favorable terms. Although we believebelieve, in most casescases, that we could identify alternative suppliers, or alternative raw materials or component parts, the lengthy and expensive aviation authority and OEM certification processes associated with aerospace products could prevent efficient replacement of a supplier, raw material or component part. We will continue to evaluate the nature and extent to which a public health crisis, such as the COVID-19 pandemic,crisis would impact our business, supply chain, consolidated results of operations, financial condition, and liquidity.
There has been significant volatility in the market price and trading volume of equity securities, which is unrelated to the operating performance of the companies issuing the securities. These market fluctuations may negatively affect the market price of our common stock. Stockholders may not be able to sell their shares at or above the purchase price due to fluctuations in the market price of our common stock. Such changes could be caused by changes in our operating performance or prospects, including possible changes due to the cyclical nature of the aerospace industry and other factors such as fluctuations in OEM and aftermarket ordering, which could cause short-term swings in profit margins. Or such changes could be unrelated to our operating performance, such as changes in market conditions affecting the stock market generally or the stocks of aerospace companies or changes in the outlook for our common stock, such as changes to or the confidence in our business strategy, changes to or confidence in our management, or expectations for future growth of the Company. Global health crises such as thea COVID-19global pandemic could also cause significant volatility in the market price.
We have a significant amount of indebtedness. As of December 31, 2024, after using $637.0 million of proceeds from the IPO and Follow-On Offerings to paydown indebtedness, and the borrowing of $360 million to consummate the acquisition of AAI,2025, the outstanding principal under the Credit Agreement was approximately $281.4$726 million.
In addition, we may be able to incur substantial additional indebtedness in the future. As of December 31, 2024,2025, there remained available under our Credit Agreement $100$275 million in a Delayed Draw Term Loans Commitment and a $50 million Revolving Line of Credit. Although our Credit Agreement contains restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number of significant qualifications and exceptions, and the indebtedness incurred in compliance with these qualifications and exceptions could be substantial. Our Credit Agreement requires the maintenance of a quarterly leverage ratio. There are also certain non-financial covenants in place limiting us, from, among other things, incurring other indebtedness, creating any liens on our properties, entering into merger or consolidation transactions, disposing of all or substantially all of our assets and payment of certain dividends and distributions. In addition, our Credit Agreement requires mandatory prepayments of the principal amount if there is excess cash flow, as defined, during a calendar year).year. A breach of any of the covenants or an inability to comply with the required leverage ratio could result in a default under our Credit Agreement.
We are an “emerging growth company” and we cannot be certain if the reduced disclosure requirements applicable to “emerging growth companies” will make our common stock less attractive to investors.
We are an “emerging growth company,” as defined in Section 2(a)(19) of the Securities Act, and we may take advantage of certain exemptions and relief from various reporting requirements that are applicable to other public companies that are not “emerging growth companies.” In particular, while we are an “emerging growth company,” among other exemptions, we will:
not be required to engage an independent registered public accounting firm to report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act;
not be required to comply with the requirement in Public Company Accounting Oversight Board Auditing Standard 3101, The Auditor’s Report on an Audit of Financial Statements When the Auditor Expresses an Unqualified Opinion, to communicate critical audit matters in the auditor’s report;
be permitted to present only two years of audited financial statements and only two years of related “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our periodic reports and registration statements, including in this Annual Report on Form 10-K;
not be required to disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the chief executive officer’s compensation to median employee compensation; or not be required to submit certain executive compensation matters to stockholder advisory votes, such as “say-on-pay,” “say-on-frequency,” and “say-on-golden parachutes.”
In addition, the JOBS Act also permits an emerging growth company such as us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies, meaning that we can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to use this extended transition period and, as a result, our financial statements may not be comparable with similarly situated public companies.
We will remain an “emerging growth company” until the earliest to occur of (1) our reporting of $1.235 billion or more in annual gross revenue; (2) our becoming a “large accelerated filer,” with at least $700 million of equity securities held by non-affiliates; (3) our issuance, in any three-year period, of more than $1.0 billion in non-convertible debt; and (4) the fiscal year-end following the fifth anniversary of the completion of our IPO, which closed on April 29, 2024.
We cannot predict if investors may find our common stock less attractive if we rely on the exemptions and relief granted by the JOBS Act. For example, if we do not adopt a new or revised accounting standard, our future results of operations may not be as comparable to the results of operations of certain other companies in our industry that adopted such standards. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may decline and/or become more volatile.
Failure to comply with requirements to design, implement and maintain effective internal controls could have a material adverse effect on our business and stock price.
As a privately held company, we were not required to evaluate our internal control over financial reporting in a manner that meets the standards of publicly traded companies required by Section 404(a) of the Sarbanes-Oxley Act (“Section 404”). As a public company, we are subject to significant requirements for enhanced financial reporting and internal controls. The process of designing and implementing effective internal controls is a continuous effort that requires us to anticipate and react to changes in our business and the economic and regulatory environment, and to expend significant resources to maintain a system of internal controls that is adequate to satisfy our reporting obligations as a public company. If we are unable to establish or maintain appropriate internal financial reporting controls and procedures, it could cause us to fail to meet our reporting obligations on a timely basis, result in material misstatements in our consolidated financial statements and harm our results of operations. In addition, we will be required, pursuant to Section 404, to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting in the second annual report following the completion of our IPO. This assessment will need to include disclosure of any material weaknesses identified by our management in our internal control over financial reporting. The rules governing the standards that must be met for our management to assess our internal control over financial reporting are complex and require significant documentation, testing, and possible remediation. Testing and maintaining internal controls may divert our management’s attention from other matters that are important to our business. Once we are no longer an “emerging growth company,” our auditors will be required to issue an attestation report on the effectiveness of our internal controls on an annual basis.
In connection with the implementation of the necessary procedures and practices related to internal control over financial reporting, we may identify deficiencies that we may not be able to remediate in time to meet the deadline imposed by the Sarbanes-Oxley Act for compliance with the requirements of Section 404. In addition, we may encounter problems or delays in completing the remediation of any deficiencies identified by us or our independent registered public accounting firm in connection with the issuance of their attestation report. Our testing, or the subsequent testing (if required) by our independent registered public accounting firm, may reveal deficiencies in our internal controls over financial reporting that are deemed to be material weaknesses. Any material weaknesses could result in a material misstatement of our annual or quarterly financial statements or disclosures that may not be prevented or detected.
We may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with Section 404, or our independent registered public accounting firm may not issue an unqualified opinion. If either we are unable to conclude that we have effective internal control over financial reporting or our independent registered public accounting firm is unable to provide us with an unqualified report (to the extent it is required to issue a report), investors could lose confidence in our reported financial information, which could have a material adverse effect on the trading price of our common stock.
We have a total of 93,556,07193,622,471 shares of our common stock outstanding. Of the outstanding shares, 18,400,000 shares were sold in the IPO and Follow-On Offering and are freely tradable without restriction or further registration under the Securities Act. Additionally, as of March 25, 2025, approximately 457,336 shares have been sold under Rule 144 under the Securities Act (“Rule 144”), and are freely tradable without restriction or further registration under the Securities Act. Any shares held by our affiliates, as that term is defined under Rule 144 under the Securities Act, including our directors, executive officers, and other affiliates, may be sold only in compliance with certain limitations, including the limitations under Rule 144.
In addition, pursuant to the registration rights agreement, certain of our existing stockholders have the right, subject to certain conditions, to require us to registerfacilitate the salepublic offering of their shares of our common stock under the Securities Act. By exercising their registration rights and selling a large number of shares, such existing stockholders could cause the prevailing market price of our common stock to decline. The shares covered by registration rights represent approximately 62%53% of common stock outstanding. Registration of any of these outstanding shares of our common stock would result in such shares becoming freely tradable without compliance with Rule 144 upon effectiveness of the registration statement.
Management's Discussion & Analysis (MD&A)
New heading “Year ended December 31, 2025 compared with year ended December 31, 2024”
New heading “Other (Expense) Income”
Removed heading “Net Income (Loss)”
Removed heading “JOBS Act Election”
Removed heading “Internal Controls and Procedures”
Largest changes
“Year ended December 31, 2025 compared with year ended December 31, 2024”see in full comparison
“Inventories are stated at the lower of cost or net realizable value. Cost of inventories is determined primarily using the weighted-average cost method of inventory accounting. Write-downs for slow-moving and obsolete inventories are provided based on current assessments about future product demand, production requirements for the next 12 months and usage for the last 12 months. …”see in full comparison
“We are currently an “emerging growth company,” as defined in the JOBS Act. Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards until such time as those standards apply to private companies. …”see in full comparison
“Net organic sales for the year ended December 31, 2024 increased $47.4 million, or 15.0%, to $364.9 million as compared to $317.5 million for the year ended December 31, 2023. This increase in net organic sales is primarily related to increases in OEM commercial sales ($19.1 million, an increase of 18.8%), aftermarket commercial sales ($15.8 million, an increase of 13.4%), and aftermarket defense sales ($15.5 million, an increase of 53.8%), partially offset by a reduction in non-aviation sales of ($7.9 million or 20.6%). …”see in full comparison
Full comparison: every changed paragraph (73)
The products we manufacture cover a diverse range of applications supporting nearly every major aircraft platform in use today and include auto throttles, lap-belt airbags, two- and three-point seat belts, water purification systems, fire barriers, polyimide washers and bushings, latches, interior securing devices, hold-open and tie rods, temperature and fluid sensors and switches, carbon and metallic brake discs, fluid and pneumatic-based ice protection, RAM air components, sealing solutions and motion and actuation devices, customized edge-lighted panels and knobs and annunciators for incandescent and LED illuminated pushbutton switches, high-performance fans and cooling devices, lighting, Human-Machine Interface products, and bespoke lighting systems, among others.
AAI AcquisitionAcquisitions
On August 26, 2024, we acquired 100% of the membership interests of Applied Avionics, LLC, a Delaware LLC (AAI), which was formerly known as Applied Avionics, Inc., from AAI Holdings, Inc., a Delaware corporation (AAI Parent), for approximately $383.5 million in cash. AAI Parent is owned by certain individual shareholders thereof, including certain members of AAI’s management team. Incorporated in 1968, AAI designs, develops and manufactures highly engineered avionics interface solutions. See Note 2, Acquisitions, of the Notes to Consolidated Financial Statements for further information.
On July 28, 2025, the Company completed the acquisition of Beadlight Ltd. (Beadlight) for £24.6 million ($33.1 million). Beadlight designs, develops, and manufactures illumination solutions, air filtration systems, and Human-Machine Interface products from its facility in Witney, England. The purchase price was paid by the Company with cash on hand.
On December 23, 2025, the Company acquired 100% of the issued and outstanding equity interests and paid the outstanding debt of LMB Fans & Motors (LMB) for $474.8 million in cash and $0.9 million of deferred purchase obligation. Founded over 60 years ago, LMB is a global specialty player in the design and production of tailor-made high-performance fans and motors. Leveraging its many decades of expertise and proprietary designs, LMB provides the market with 2,000+ unique fans, blowers, motors and specialized rotating machines.
See Note 2, Acquisitions, of the Notes to Consolidated Financial Statements for further information.
On January 21, 2026, the Company acquired Harper Engineering for $250 million in cash. Founded in 1968, Harper Engineering is a leading manufacturer of mechanically engineered devices for aircraft interiors and holds a proprietary portfolio of latching and securing mechanisms used across multiple leading commercial aerospace platforms.
On March 7, 2025, following completion of the works council consultation process required under French Law, we entered into a purchase agreement to acquire 100% of the shares of LMB for €365 million plus the assumption of net debt, payable in cash at closing (estimated to be €44.3 million). LMB is a global specialty player in the design and production of customized high-performance fans and motors. The transaction is expected to close in the third quarter of 2025 shortly after receiving requisite regulatory approvals and is subject to customary closing conditions.
The acquisition will bewas financed through additionalthe borrowingsdrawdown of $240 million of Delayed Draw Term Loans available under ourthe Company's existing Credit Agreement and cash on hand. In connection with the acquisition, we entered into an incremental term facility commitment letter with Blackstone Credit (the “Commitment Letter”), pursuant to which Blackstone Credit has committed, subject to the satisfaction of customary conditions, to provide us with an incremental term loan facility in an amount equal to the U.S. dollar equivalent of €400.0 million (the “Incremental Loan Facility”). The loansDelayed underDraw theTerm Incremental Loan FacilityLoans will mature on the same date, will amortize, and will bear the same interest rate as the existing term loans outstanding under the Credit AgreementAgreement.
The following table sets forth, for the years ended December 31, 20242025, 2024, and 2023, certain operating data of the Company, including presentation of the amounts as a percentage of net sales (in thousands unless otherwise indicated):
Year ended December 31, 2025 compared with year ended December 31, 2024
Net Sales
Net sales for the year ended December 31, 2025 increased $93.5 million, or 23.2%, to $496.3 million as compared to $402.8 million for the year ended December 31, 2024.
Net organic sales represent net sales from our existing businesses for comparable periods and exclude net sales from acquisitions. We include net sales from new acquisitions in net organic sales from the 13th-month after the acquisition on a comparative basis with the prior period. Net acquisition sales for the year ended December 31, 2025 represent net sales from businesses acquired either during the year ended 2025 or net sales from acquisitions that were completed in 2024 for which there are no comparable net sales during the prior year. We believe this measure provides an understanding of underlying sales trends as it provides net sales comparisons on a consistent basis. See Note 2, Acquisitions, of the Notes to Consolidated Financial Statements for further information on the Company’s acquisition activities.
Net organic sales for the year ended December 31, 2025 increased $51.4 million, or 12.7%, to $454.2 million as compared to $402.8 million for the year ended December 31, 2024. This increase in net organic sales is primarily related to increases in aftermarket commercial sales ($27.4 million, an increase of 18.5%), OEM commercial sales ($12.5 million, an increase of 9.3%), and defense sales ($14.4 million, an increase of 16.2%), partially offset by a reduction in non-aviation sales of ($3.1 million or 10.1%). The increase in aftermarket commercial sales is primarily attributable to increases in global commercial air travel demand. The increase in OEM commercial sales is driven by the increased production rates and deliveries for both narrow-body and wide-body aircraft. The increase in defense sales is primarily driven by increased market share due to new product launches and an increased demand for defense products globally. The reduction in non-aviation sales is primarily attributable to reduced demand for auto brakes and restraints.
Net acquisition sales of $42.1 million for the year ended December 31, 2025 is made up of AAI and Beadlight which were acquired on August 26, 2024 and July 28, 2025, respectively. This represents 10.5% of the increase in total net sales for the year ended December 31, 2025 compared to the year ended December 31, 2024.
Cost of sales for the year ended December 31, 2025 increased $31.0 million or, 15.2%, to $235.0 million compared to $204.0 million for the year ended December 31, 2024. Cost of sales and the related percentage of net sales for the years ended December 31, 2025 and 2024 were as follows (in thousands except for percentages):
Cost of sales for the year ended December 31, 2025 decreased as a percentage of net sales principally due to the effect of our fixed overhead costs supporting higher production and sales levels.
Gross profit as a percentage of net sales increased 3.3% to 52.7% for the year ended December 31, 2025 from 49.4% for the year ended December 31, 2024. This decrease is primarily attributable to our operating leverage, execution of strategic value drivers, favorable sales mix, and lower inventory step-up amortization costs, partially offset by slightly higher amortization expense for intangible and other long-term assets.
Selling, general and administrative expenses increased by $31.4 million to $143.6 million, or 28.9% as a percentage of net sales, for the year ended December 31, 2025 from $112.2 million, or 27.9% as a percentage of net sales, for the year ended December 31, 2024. Selling, general and administrative expenses and the related percentage of net sales for the years ended December 31, 2025 and 2024 were as follows (amounts in thousands except for percentages):
Selling, general and administrative expenses increased by 1.0% as a percentage of net sales for the year ended December 31, 2025 when compared to the year ended December 31, 2024. This was due to additional costs associated with being a public company, including compliance with the Sarbanes-Oxley Act and additional organizational costs, research and development expenses, and stock-based compensation expense, partially offset by lower amortization of intangible assets.
Transaction expenses were $11.3 million and $3.4 million, in the years ended December 31, 2025 and 2024, respectively. This increase is primarily related to the acquisition of LMB that was consummated in December 2025 and Harper Engineering that was consummated in January 2026. Transaction costs can fluctuate from year to year depending on the size and number of acquisitions in each year.
Other (Expense) Income
Other expense for the year ended December 31, 2025 was $0.2 million. Other income for the year ended December 31, 2024 was $4.5 million and relates to a $2.9 million reduction in the estimated contingent purchase price for the CAV acquisition and $1.7 million of proceeds received from the settlement of buyer-side representations and warranties insurance covering the acquisition of DAC.
Operating income for the year ended December 31, 2025, was $106.2 million, or 21.4% as a percentage of net sales, compared to $87.6 million, or 21.7% as a percentage of net sales for the year ended December 31, 2024. The increase in operating income is due to the factors discussed above.
Interest expense for the year ended December 31, 2025 decreased $26.4 million, or 50.8%, to $25.7 million compared to $52.1 million for the year ended December 31, 2024. This decrease was attributable to lower average outstanding debt and lower interest rates.
The income tax provision was $8.4 million for the year ended December 31, 2025 compared to $6.8 million for the year ended December 31, 2024. The increase was primarily due to the effect of an increase in pretax income of $51.5 million to $80.6 million for the year ended December 31, 2025 from $29.1 million for the year ended December 31, 2024 partially offset by the release of a valuation allowance on the Company’s deferred tax asset for its disallowed interest carryforward during the year ended December 31, 2025. The release of the valuation allowance was due to a change in tax law from the OBBBA.
Net Income
Net income for the year ended December 31, 2025 was $72.1 million, or 14.5% as a percentage of net sales, compared to net income for the year ended December 31, 2024 of $22.2 million, or 5.5% as a percentage of net sales. The increase in net income is primarily due the factors discussed above.
Net sales for the year ended December 31, 2024 increased $85.3 million, or 26.9%, to $402.8 million as compared to $317.5 million for the year ended December 31, 2023.
Net organic sales represent net sales from our existing businesses for comparable periods and exclude net sales from acquisitions. We include net sales from new acquisitions in net organic sales from the 13th-month after the acquisition on a comparative basis with the prior period. Net acquisition sales for the year ended December 31, 2024 represent net sales from businesses acquired either during the year ended 2024 or net sales from acquisitions that were completed in 2023 for which there are no comparable net sales during the prior year. We believe this measure provides an understanding of underlying sales trends as it provides net sales comparisons on a consistent basis. See Note 2, Acquisitions, of the Notes to Consolidated Financial Statements for further information on the Company’s acquisition activities.
Net organic sales for the year ended December 31, 2024 increased $47.4 million, or 15.0%, to $364.9 million as compared to $317.5 million for the year ended December 31, 2023. This increase in net organic sales is primarily related to increases in OEM commercial sales ($19.1 million, an increase of 18.8%), aftermarket commercial sales ($15.8 million, an increase of 13.4%), and aftermarket defense sales ($15.5 million, an increase of 53.8%), partially offset by a reduction in non-aviation sales of ($7.9 million or 20.6%). The increase in OEM commercial sales is driven by the increased production rates and deliveries for both narrow-body and wide-body aircraft. The increase in aftermarket commercial sales is primarily attributable to the ongoing recovery of commercial air travel demand and prolonged supply chain issues suppressing further increases in OEM build rates. The increase in aftermarket defense sales is primarily attributable to strong demand for lighted indicators and military restraint devices. The reduction in non-aviation sales is primarily attributable to reduced demand for auto brakes and restraints.
NetRefer acquisitionto salesthe discussion in Item 7. “Management’s Discussion and Analysis of $37.9Financial millionConditions and Results of Operations” of Form 10-K for the year ended December 31, 20242024, isas madefiled upwith of,the DAC, CAV and AAI which were acquiredSEC on JulyMarch 3,31, 2023,2025 Septemberfor 1,our 2023, and August 26, 2024, respectively. This represents 11.9%results of the increase in total net salesoperations for the year ended December 31, 2024 compared towith the year ended December 31, 2023.
Cost of sales for the year ended December 31, 2024 increased $40.8 million or, 25.0%, to $204.0 million compared to $163.2 million for the year ended December 31, 2023. Cost of sales and the related percentage of net sales for the years ended December 31, 2024 and 2023 were as follows (in thousands except for percentages);
Cost of sales for the year ended December 31, 2024 decreased as a percentage of net sales principally due to the effect of our fixed overhead costs supporting higher production and sales levels, partially offset by higher acquisition and facility integration costs.
Gross profit as a percentage of net sales increased 0.8% to 49.4% for the year ended December 31, 2024 from 48.6% for the year ended December 31, 2023 because of favorable pricing strategy, despite having a higher mix of defense sales than in 2023, which typically have lower gross profit margin than commercial sales.
Selling, general and administrative expenses increased by $30.1 million to $112.3 million, or 27.9% as a percentage of net sales, for the year ended December 31, 2024 from $82.1 million, or 25.9% as a percentage of net sales, for the year ended December 31, 2023. Selling, general and administrative expenses and the related percentage of net sales for the years ended December 31, 2024 and 2023 were as follows (amounts in thousands except for percentages):
Selling, general and administrative expenses increased by 36.7% for the year ended December 31, 2024 compared to the year ended December 31, 2023. The increase was primarily driven by stock-based compensation expense, a full year of selling, general and administrative expenses of DAC and CAV which were acquired in 2023, the impact of the AAI acquisition in September 2024, research and development costs, and infrastructure costs related to being a public company, partially offset by the leveraging of fixed costs.
Transaction expenses were $3.4 million in each of the years ended December 31, 2024 and 2023. Transaction costs can fluctuate from year to year depending on the size and number of acquisitions in each year.
Other Income
Other income for the year ended December 31, 2024 was $4.5 million, and relates to a $2.9 million reduction in the estimated contingent purchase price for the CAV acquisition and $1.7 million of proceeds received from the settlement of buyer-side representations and warranties insurance covering the acquisition of DAC. Other income for the year ended December 31, 2023 of $0.8 million was principally related to a grant from the U.S. Department of Transportation under the AMJP.
Operating income for the year ended December 31, 2024, was $87.6 million, or 21.8% as a percentage of net sales, compared to $69.5 million, or 21.9% as a percentage of net sales for the year ended December 31, 2023. The increase in operating income is due to the factors discussed above.
Interest expense for the year ended December 31, 2024 decreased $15.0 million, or 22.3%, to $52.1 million compared to $67.1 million for the year ended December 31, 2023. This decrease was attributable to the repayment of $284.6 million aggregate principal amount of the Company's debt in May 2024 with a portion of the proceeds from our IPO and lower interest rates, partially offset by interest on the August 26, 2024 borrowing of the $360.0 million incremental term loan for the acquisition of AAI, of which $330.0 million of the outstanding term loans were repaid on December 15, 2024 with the proceeds from our Follow-on Offering and our cash from operations. Interest rates under our Credit Agreement are subject to variability based on market conditions.
The income tax provision was $6.8 million for the year ended December 31, 2024 compared $7.1 million for the year ended December 31, 2023. The decrease was primarily due to the establishment of a valuation allowance on the Company’s deferred tax asset for its disallowed interest carryforward during the year ended December 31, 2023, partially offset by the effect of an increase in pretax income of $26.6 million to $29.0 million for the year ended December 31, 2024 from $2.4 million for the year ended December 31, 2023.
Net Income (Loss)
Net income for the year ended December 31, 2024 was $22.2 million, or 5.5% as a percentage of net sales, compared to the net loss for the year ended December 31, 2023 of $4.6 million, or 1.4% as a percentage of net sales. The increase in net income is primarily due the factors discussed above.
Our principal historical liquidity requirements have been for acquisitions, capital expenditures, servicing indebtedness and working capital needs. We fund our investing activities primarily from cash provided by our operating and financing activities. As of December 31, 2024,2025, we had availability of $100$275 million of a Delayed Draw Term Loans Commitment and a $50 million Revolving Line of Credit. Based on our current outlook, we believe that net cash provided by operating activities and available borrowings under our Credit Agreement will be sufficient to fund our cash requirements for at least the next twelve months. As we continue to expand our business, including by any acquisitions we may make, we may in the future require additional working capital for increased costs.
Net cash provided by operating activities was $112.3 million in the year ended December 31, 2025 compared to $55.0 million in the year ended December 31, 2024 compared to $12.8 million in the year ended December 31, 2023.2024. The $42.2$57.3 million increase was primarily driven by an increase in net income of $26.8$49.9 million asadjusted wellfor asnoncash the impact of increases in non-cash expenses, primarily stock-based compensation and amortization of intangible and other long-term assets,items, partially offset by higheran incomeincrease taxin paymentsworking during the year ended December 31, 2024.capital.
Net cash used in investing activities totaled $392.1 million in the year ended December 31, 2024 and was principally attributable to the acquisition of AAI for $383.3 million, as well as capital expenditures of $8.9 million.
Net cash used in investing activities totaled $72.6$520.9 million in the year ended December 31, 20232025 and was principally attributable to the acquisitions of DACLMB for $31.4$474.8 million and CAVBeadlight for $29.0$33.1 million, as well as capital expenditures of $12.1$13.0 million.
Net cash used in investing activities totaled $392.1 million in the year ended December 31, 2024 and was principally attributable to the acquisition of AAI for $383.5 million, as well as capital expenditures of $8.9 million.
Net cash provided by financing activities in the year ended December 31, 2025 totaled $439.2 million. We borrowed $445.0 million under our Credit Agreement for the acquisition of LMB and paid $8.9 million for debt issuance costs. There were no principal payments made on our Credit Agreement.
Net cash provided by financing activities in the year ended December 31, 2023 totaled $45.7 million. We borrowed $53.0 million under our Credit Agreement for the acquisitions of DAC and CAV and made payments of $6.1 million on our Credit Agreement and $1.1 million for debt issuance costs.
Our long-term debt consists primarily of borrowings under our Credit Agreement.
On April 28, 2023, we borrowed $20.0 million of available Delayed Draw Term Loans to finance the acquisition of DAC.
On June 30, 2023, the Credit Agreement was amended to extend the maturity date by eighteen months, extending it from October 2, 2024 to April 2, 2026. In addition, the London Interbank Offered Rate (LIBOR) Rate was replaced with Adjusted Term Secured Overnight Financing Rate (SOFR) as an election in which borrowings under the Credit Agreement accrue interest at the SOFR rate plus a margin of 7.25%.
On August 30, 2023, the Company borrowed $33.0 million of available Delayed Draw Term Loans to finance the acquisition of CAV.
On August 1, 2025, the Credit Agreement was amended to reduce the applicable margin by 0.5%. At the Company's election, interest on loans will accrue at the SOFR rate plus the applicable margin of 4.25% or at the base rate plus the applicable margin of 3.25% as long as the Company maintains a leverage ratio of less than 5.5 to 1.
On November 25, 2025, the Credit Agreement was amended to increase the Delayed Draw Term Loans commitment by an aggregate principal amount of $175 million for a total Delayed Draw Term Loans commitment in an aggregate principal amount equal to $275 million. In addition, the availability period of the Delayed Draw Term Loans commitment was extended to September 30, 2026.
On December 23, 2025, the Credit Agreement was amended to make available to the Company an incremental term loan in an aggregate principal amount equal to $445 million for purposes of (i) paying a portion of the consideration for the LMB acquisition, (ii) financing the payment of LMB debt, (iii) paying fees and expenses incurred in connection with the foregoing, and (iv) otherwise to fund working capital and general corporate purposes.
What changed in the latest 10-Q
Risk Factors
In addition to the other information set forth in this report, you should carefully consider the risk factors disclosed in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025.
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
New heading “Transaction Expenses”
New heading “Operating Income”
New heading “Interest Expense”
New heading “Income Tax Provision”
New heading “Six months ended June 30, 2026 compared with six months ended June 30, 2025”
New heading “Net Organic Sales”
New heading “Net Acquisition Sales”
New heading “Gross Profit and Cost of Sales”
New heading “Selling, General and Administrative Expenses”
Largest changes
“Six months ended June 30, 2026 compared with six months ended June 30, 2025”see in full comparison
Full comparison: every changed paragraph (54)
The following table sets forth, for the three and six months ended MarchJune 31,30, 2026 and 2025, certain operating data of the Company, including presentation of the amounts as a percentage of net sales (in thousands unless otherwise indicated):
Three months ended MarchJune 31,30, 2026 compared with three months ended MarchJune 31,30, 2025
Net sales for the three months ended MarchJune 31,30, 2026 increased $41.4$48.5 million, or 36.1%,39.4%, to $156.1$171.6 million as compared to $114.7$123.1 million for the three months ended MarchJune 31,30, 2025.
Net organic sales represent net sales from our existing businesses for comparable periods and exclude net sales from acquisitions. We include net sales from new acquisitions in net organic sales from the 13th-month after the acquisition on a comparative basis with the prior period. Net acquisition sales for the three months ended MarchJune 31,30, 2026 represent net sales from acquisitions that were completed in 2025 and 2026 for which there are no comparable net sales during the prior year. We believe this measure provides an understanding of underlying sales trends as it provides net sales comparisons on a consistent basis. We do not believe our net sales are subject to significant seasonal variations. See Note 2, Acquisitions, of the Notes to Condensed Consolidated Financial Statements for further information on the Company’s acquisition activities.
Net organic sales for the three months ended MarchJune 31,30, 2026 increased $13.0$15.1 million or 11.4%,12.3%, to $127.7$138.3 million as compared to $114.7$123.1 million for the three months ended MarchJune 31,30, 2025. The increase in net organic sales was primarily related to increases in OEM total commercial sales ($7.8$9.6 million, an increase of 22.0%25.7%), aftermarket total commercial sales ($6.2$4.1 million, an increase of 14.1%8.6%), and sales of non-aerospace products ($3.0$2.4 million, an increase of 46.4%32.9%), partially offset by a decline in defense sales ($4.0$0.9 million, a decrease of 13.9%2.8%). The increase in OEM commercial sales is driven by the increased production rates and deliveries for both narrow-body and wide-body aircraft. The increase in aftermarket total commercial sales was attributable to increases in commercial air travel demand.travel. The increase in sales of non-aerospace products was primarily driven by higher sales of componentsdemand for industrial gas-turbines.gas-turbine components. The decrease in defense sales was primarily attributable to the variability of revenue distribution for defense-related products, which can vary significantly from period to period.
Net acquisition sales of $28.4$33.3 million for the three months ended MarchJune 31,30, 2026 are made up of Beadlight which was acquired on July 28, 2025, LMB which was acquired on December 23, 20252025, and Harper Engineering which was acquired on January 21, 2026. This represents 24.7%27.1% of the increase in total net sales for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025.
Cost of sales for the three months ended MarchJune 31,30, 2026 increased $21.9$23.5 million, or 39.8%,41.2%, to $76.8$80.4 million compared to $54.9$56.9 million for the three months ended MarchJune 31,30, 2025. Cost of sales and the related percentage of net sales for the three months ended MarchJune 31,30, 2026 and 2025 were as follows (in thousands except for percentages):
Cost of sales for the three months ended MarchJune 31,30, 2026 increased 1.3%0.6% as a percentage of net sales to 49.2%46.8% from 47.9%46.2% in the comparable period last year. This increase in cost of sales is primarily attributable to the recognition of inventory step-up related to the LMB and Harper Engineering acquisitions, and higher amortization expense for intangible and other long-term assets, partially offset by ourlower operating leverageacquisition and executionfacility ofintegration our strategic value drivers.costs.
Selling, general and administrative expenses increased by $11.4$9.6 million to $44.5$46.5 million, or 28.5%27.1% as a percentage of net sales, for the three months ended MarchJune 31,30, 2026 from $33.1$36.9 million, or 28.9%30.0% as a percentage of net sales, for the three months ended MarchJune 31,30, 2025. Selling, general and administrative expenses and the related percentage of net sales for the three months ended MarchJune 31,30, 2026 and 2025 were as follows (amounts in thousands except for percentages):
Selling, general and administrative expenses decreased by 2.9% as a percentage of net sales for the three months ended June 30, 2026 when compared to the same period in 2025. This is primarily driven by the leveraging of fixed costs partially offset by increased amortization of intangible assets as a result of the Beadlight, LMB, and Harper Engineering acquisitions as well as increased research and development expenses.
Transaction Expenses
Transaction expenses for the three months ended June 30, 2026 and 2025 were $1.6 million and $2.0 million, respectively. Transaction costs can fluctuate depending on the size and number of acquisitions in each year.
Other Expense
Other expense for the three months ended June 30, 2026, of $1.3 million is related to an increase in the estimated contingent purchase price for the Harper acquisition.
Operating Income
Operating income for the three months ended June 30, 2026, was $41.9 million, or 24.5% as a percentage of net sales, compared to $27.3 million, or 22.2% as a percentage of net sales for the three months ended June 30, 2025. The increase in operating income is due to the factors discussed above.
Interest Expense
Interest expense for the three months ended June 30, 2026 increased $13.5 million, to $20.0 million compared to $6.5 million for the three months ended June 30, 2025. This increase is attributable to interest on borrowings associated with the acquisitions of LMB in December 2025 and Harper Engineering in January 2026.
Income Tax Provision
The income tax provision for the three months ended June 30, 2026 was $5.1 million compared to $4.1 million for the three months ended June 30, 2025. This increase was primarily due to a decrease in the discrete impact from excess tax benefits associated with share-based payments in 2026 compared to 2025 as well as the increase in pretax income.
Net Income
Net income for the three months ended June 30, 2026 was $16.7 million, or 9.8% as a percentage of net sales, compared to net income for the three months ended June 30, 2025 of $16.7 million, or 13.5% as a percentage of net sales. The results for the three months ended June 30, 2026 were negatively impacted by higher interest expense and higher amortization of intangible and other long-term assets.
Six months ended June 30, 2026 compared with six months ended June 30, 2025
Net Sales
Net sales for the six months ended June 30, 2026 increased $89.9 million, or 37.8%, to $327.7 million as compared to $237.8 million for the six months ended June 30, 2025.
Net organic sales represent net sales from our existing businesses for comparable periods and exclude net sales from acquisitions. We include net sales from new acquisitions in net organic sales from the 13th-month after the acquisition on a comparative basis with the prior period. Net acquisition sales for the six months ended June 30, 2026 represent net sales from acquisitions that were completed in 2025 and 2026 for which there are no comparable net sales during the prior year. We believe this measure provides an understanding of underlying sales trends as it provides net sales comparisons on a consistent basis. We do not believe our net sales are subject to significant seasonal variations. See Note 2, Acquisitions, of the Notes to Condensed Consolidated Financial Statements for further information on the Company’s acquisition activities.
Net Organic Sales
Net organic sales for the six months ended June 30, 2026 increased $28.2 million or 11.9%, to $266.0 million as compared to $237.8 million for the six months ended June 30, 2025. The increase in net organic sales was primarily related to increases in OEM total commercial sales ($17.4 million, an increase of 23.9%), aftermarket total commercial sales ($10.3 million, an increase of 11.3%), and sales of non-aerospace products ($5.4 million, an increase of 39.4%), partially offset by a decline in defense sales ($4.9 million, a decrease of 8.1%). The increase in OEM commercial sales is driven by the increased production rates and deliveries for both narrow-body and wide-body aircraft. The increase in aftermarket total commercial sales was attributable to increases in commercial air travel. The increase in sales of non-aerospace products was primarily driven by higher demand for industrial gas-turbine components. The decrease in defense sales was primarily attributable to the variability of revenue distribution for defense-related products, which can vary significantly from period to period.
Net Acquisition Sales
Net acquisition sales of $61.7 million for the six months ended June 30, 2026 are made up of Beadlight which was acquired on July 28, 2025, LMB which was acquired on December 23, 2025, and Harper Engineering which was acquired on January 21, 2026. This represents 25.9% of the increase in total net sales for the six months ended June 30, 2026 compared to the six months ended June 30, 2025.
Gross Profit and Cost of Sales
Cost of sales for the six months ended June 30, 2026 increased $45.3 million, or 40.5%, to $157.2 million compared to $111.9 million for the six months ended June 30, 2025. Cost of sales and the related percentage of net sales for the six months ended June 30, 2026 and 2025 were as follows (in thousands except for percentages):
Cost of sales for the six months ended June 30, 2026 increased 0.9% as a percentage of net sales to 48.0% from 47.1% in the comparable period last year. This increase is primarily attributable to higher amortization expense for intangible and other long-term assets and the recognition of inventory step-up, both of which are related to the LMB and Harper Engineering acquisitions, partially offset by our operating leverage, execution of our strategic value drivers and lower acquisition and facility integration costs.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased by $21.0 million to $91.0 million, or 27.8% as a percentage of net sales, for the six months ended June 30, 2026 from $70.0 million or 29.4% as a percentage of net sales, for the six months ended June 30, 2025. Selling, general and administrative expenses and the related percentage of net sales for the six months ended June 30, 2026 and 2025 were as follows (amounts in thousands except for percentages):
Selling, general and administrative expenses decreased by 0.4%1.6% as a percentage of net sales for the threesix months ended MarchJune 31,30, 2026 when compared to the same period in 2025. This wasis primarily driven by the leveraging of fixed costs partially offset by increased amortization of intangible assets as a result of the LMBBeadlight, LMB, and Harper Engineering acquisitions.
Transaction expenses for the threesix months ended MarchJune 31,30, 2026 and 2025 were $1.2$2.8 million and $0.5$2.4 million, respectively. This increase is primarily related to the acquisition of Harper Engineering that was consummated in January 2026. Transaction costs can fluctuate depending on the size and number of acquisitions in each year.
Other Expense
Other expense for the six months ended June 30, 2026 of $1.3 million is related to an increase in the estimated contingent purchase price for the Harper acquisition.
Operating income for the threesix months ended MarchJune 31,30, 2026, was $33.5$75.4 million, or 21.5%23.0% as a percentage of net sales, compared to $26.1$53.5 million, or 22.8%22.5% as a percentage of net sales for the threesix months ended MarchJune 31,30, 2025. The increase in operating income is due to the factors discussed above.
Interest expense for the threesix months ended MarchJune 31,30, 2026 increased $12.2$25.8 million, to $18.7$38.7 million compared to $6.5$12.9 million for the threesix months ended MarchJune 31,30, 2025. This increase wasis attributable to interest on borrowings associated with the acquisitions of LMB in December 2025 and Harper Engineering in January 2026.
The income tax provision for the threesix months ended MarchJune 31,30, 2026 was $3.7$8.8 million compared to $4.4$8.5 million for the threesix months ended MarchJune 31,30, 2025.2025 while pretax income was lower in 2026. This decreaseis was primarily driven by lower income before income taxes for the three months ended March 31, 2026 as compareddue to the three2025 monthsincome endedtax Marchprovision 31,benefiting 2025.from a decrease in the valuation allowance against the Company's deferred tax assets which did not recur in 2026.
Net income for the threesix months ended MarchJune 31,30, 2026 was $11.1$27.9 million, or 7.1%8.5% as a percentage of net sales, compared to net income for the threesix months ended MarchJune 31,30, 2025 of $15.3$32.0 million, or 13.4%13.5% as a percentage of net sales. The results for the threesix months ended MarchJune 31,30, 2026 were negatively impacted by the increases inhigher interest expense, higher amortization of intangible and other long-term assets, and recognition of inventory step-up attributable to the acquisitions of LMB and Harper Engineering.
The following table summarizes our capitalization as of MarchJune 31,30, 2026 and December 31, 2025 (in thousands, unless otherwise indicated):
Our principal historical liquidity requirements have been for acquisitions, capital expenditures, servicing indebtedness and working capital needs. We fund our investing activities primarily from cash provided by our operating and financing activities. As of MarchJune 31,30, 2026, we had availability of $35 million of a delayed draw term loan commitment and a $50 million revolving line of credit. Based on our current outlook, we believe that net cash provided by operating activities and available borrowings under our Credit Agreement will be sufficient to fund our cash requirements for at least the next twelve months. As we continue to expand our business, including by any acquisitions we may make, we may in the future require additional working capital for increased costs. See “Credit Agreement” (below) for additional detail regarding our financing activities.
Net cash provided by operating activities in the threesix months ended MarchJune 31,30, 2026 and 2025 wasis $30.9$61.2 million and $28.4$52.2 million, respectively. The $2.5$9.0 million increase was primarily driven by higher noncash items included in net income partially offset by an increase in working capital.
Net cash used in investing activities in the threesix months ended MarchJune 31,30, 2026 of $254.0$256.8 million wasis principally attributable to the acquisition of Harper Engineering. Net cash used in investing activities in the threesix months ended MarchJune 31,30, 2025 of $1.8$4.7 million is related to capital expenditures.
Net cash provided by financing activities in the threesix months ended MarchJune 31,30, 2026 of $233.5$233.7 million is principally related to borrowings under our Credit Agreement in connection with the acquisition of Harper Engineering. Net cash usedprovided inby financing activities in the threesix months ended MarchJune 31,30, 2025 of $0.1$1.7 million wasis principally related to financingproceeds leases.from the exercise of stock options.
At MarchJune 31,30, 2026, there was $964.7$962.9 million outstanding under the Credit Agreement, and there remained availability of $35 million in delayed draw term loan commitments and $50 million in revolving line of credit.
We have future obligations under various contracts relating to debt and interest payments, finance and operating leases and our post-retirement benefit plan. During the threesix months ended MarchJune 31,30, 2026, there were no material changes to these obligations, other than the contingent purchase consideration that may be paid to the sellers of Harper Engineering if certain financial targets for the years 2026 to 2031 are achieved, as discussed in Note 2, Acquisitions, of the Notes to Condensed Consolidated Financial Statements. For a description of our other obligations and commitments, see our consolidated financial statements reported in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.
As of MarchJune 31,30, 2026, we did not have any off-balance sheet arrangements, as defined in Regulation S-K, that have or are reasonably likely to have a current or future effect on our financial condition, results of operations, or cash flows.
The following table sets forth a reconciliation of net income to EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin for the three and six months ended MarchJune 31,30, 2026 and 2025 (in thousands unless otherwise indicated):
Represents an adjustment to the contingent purchase price for the Harper Engineering acquisition during the three and six months ended June 30, 2026.
(3)
LOAR insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 1 filing (1 insider, 1 trade date, 35,000 shares, about $2.1M). Net open-market shares: -35,000 (purchases minus sales); net value about -$2.1M.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-05-20 | Danmola Taiwo K. |
Open-market sale | 35,000 | $60.59 | $2.1M |
Well-known investors holding LOAR (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Abrams Capital (David Abrams) | 2026-06-30 | 32,050,240 | $2.6B | 47.15% | No change |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 168,394 | $13.6M | 0.01% | Reduced 74% |
| Millennium Management (Israel Englander) | 2026-06-30 | 117,944 | $9.5M | 0.01% | Reduced 30% |
| Gotham Asset Management (Joel Greenblatt) | 2026-06-30 | 67,770 | $5.5M | 0.01% | Added 275% |
| Renaissance Technologies | 2026-06-30 | 21,800 | $1.8M | 0.0% | Reduced 60% |
| AQR Capital Management (Cliff Asness) | 2026-06-30 | 14,802 | $1.2M | 0.0% | New position |
| D. E. Shaw & Co. | 2026-06-30 | 8,830 | $711.8K | 0.0% | No change |