Financial Performance - Net sales for Q1 2025 increased by $22.8 million, or 24.8%, reaching $114.7 million compared to $91.8 million in Q1 2024[84] - Net organic sales rose by $10.2 million, or 11.1%, to $102.0 million, driven by a 32.6% increase in defense sales and a 12.3% increase in aftermarket total commercial sales[86] - Gross profit for Q1 2025 was $59.7 million, a 34.4% increase from $44.4 million in Q1 2024, with a gross profit margin of 52.1%[89] - Operating income for Q1 2025 was $26.1 million, representing 22.8% of net sales, compared to $21.4 million, or 23.3% of net sales, in Q1 2024[83] - Net income for Q1 2025 was $15.3 million, or 13.4% of net sales, significantly up from $2.2 million, or 2.4% of net sales, in Q1 2024[83] - Adjusted EBITDA for Q1 2025 reached $43,133,000, up from $33,030,000 in Q1 2024, reflecting a year-over-year increase of 30.6%[118] - The net income margin improved to 13.4% in Q1 2025, compared to 2.4% in Q1 2024[118] - Adjusted EBITDA margin increased to 37.6% in Q1 2025, up from 36.0% in Q1 2024[118] Expenses and Costs - Cost of sales for Q1 2025 was $54.9 million, representing 47.9% of net sales, down from 51.6% in the same period last year[89] - Selling, general and administrative expenses increased by $10.2 million to $33.1 million, representing 28.9% of net sales for Q1 2025, up from 24.9% in Q1 2024[90] - Research and development expenses rose by $887,000, or 43.7%, to $2.9 million, representing 2.6% of net sales in Q1 2025[90] - Interest expense decreased by $11.3 million, or 63.6%, to $6.5 million in Q1 2025, attributed to the repayment of $284.6 million in debt[95] - Stock-based compensation increased significantly to $3,089,000 in Q1 2025 from $87,000 in Q1 2024[118] - Transaction expenses for Q1 2025 were $0.5 million, up from $0.2 million in Q1 2024[93] Cash Flow and Debt - Net cash provided by operating activities increased by $17.5 million to $28.4 million in Q1 2025, driven by a $13.1 million increase in net income[99] - Total debt as of March 31, 2025, was $280.8 million, with a total debt to total capitalization ratio of 20%[98] - Cash and cash equivalents increased to $80.5 million as of March 31, 2025, compared to $54.1 million at the end of 2024[98] - The company has $100 million available in delayed draw term loan commitments and a $50 million revolving line of credit as of March 31, 2025[98] Strategic Plans and Acquisitions - The company plans to finance the acquisition of LMB for €365 million plus net debt through additional borrowings and cash on hand[79] - The acquisition of LMB is expected to close in Q3 2025, pending regulatory approvals[79] - The company anticipates continued net sales growth driven by organic growth and strategic acquisitions, despite inflationary pressures and supply chain disruptions[81] - Net acquisition sales for Q1 2025 were $12.6 million, contributing 13.7% to the total net sales increase compared to Q1 2024[88] Market and Regulatory Environment - The company remains an "emerging growth company" under the JOBS Act, allowing it to delay adopting new accounting standards[120] - Market risks have not materially changed for the three months ended March 31, 2025, as detailed in the Annual Report[121]
Loar Holdings Inc.(LOAR) - 2025 Q1 - Quarterly Report