IPO and Acquisitions - The Company completed its initial public offering (IPO) on October 2, 2024, at a price of $24.00 per share, generating net proceeds of $1,202.8 million after deducting underwriting discounts and commissions of approximately $67.1 million and estimated offering expenses of $8.1 million[155]. - The Company acquired Aero Turbine, Inc. for an estimated purchase price of approximately $132.0 million, funded through borrowings under the Prior ABL Credit Facility[159]. Revenue and Income - Revenue increased by $253.3 million, or 20.4%, to $1,497.962 million for the three months ended September 30, 2025, compared to $1,244.627 million for the same period in 2024[178]. - Net income for the three months ended September 30, 2025, was $68.120 million, a significant increase of $51.684 million or 314.5% from $16.436 million in the prior year[178]. - Revenue increased by $634.9 million, or 16.6%, to $4,462.5 million for the nine months ended September 30, 2025, compared to $3,827.5 million for the same period in 2024[186]. - Net income surged to $198.8 million for the nine months ended September 30, 2025, a significant increase of $173.7 million or 694.2% compared to $25.0 million in 2024[186]. Segment Performance - The Engine Services segment primarily derives revenue from the repair and overhaul of gas turbine engines and auxiliary power units, serving commercial aerospace, military, and business aviation markets[149]. - The Component Repair Services segment generates revenue from engine piece part and accessory repairs, with a focus on commercial aerospace and military markets[150]. - The military and helicopter end market revenue increased by 21.1% compared to the prior year, aided by the acquisition of Aero Turbine on August 23, 2024[178]. - Engine Services segment revenue increased by $542.0 million, or 15.9%, to $3,941.2 million for the nine months ended September 30, 2025, supported by strong commercial aerospace growth[201]. - Component Repair Services segment revenue rose by $92.9 million, or 21.7%, to $521.3 million for the nine months ended September 30, 2025, aided by the Aero Turbine acquisition[203]. Expenses and Costs - Cost of revenue increased by $216.4 million, or 20.4%, to $1,274.803 million for the three months ended September 30, 2025, driven by higher material and direct labor expenses[179]. - Selling, general and administrative (SG&A) expenses were $60.944 million for the three months ended September 30, 2025, down from $62.895 million in the prior year, representing 4.1% of revenue[180]. - Selling, general and administrative expenses increased by $29.7 million, or 17.3%, to $201.4 million for the nine months ended September 30, 2025, primarily due to stock compensation and personnel costs[188]. - Cost of revenue rose by $510.1 million, or 15.6%, to $3,785.4 million for the nine months ended September 30, 2025, driven by higher material and labor expenses[187]. Financial Metrics - Adjusted EBITDA is defined as net income before interest, taxes, depreciation, and amortization, adjusted for non-cash items and non-recurring expenses, providing a clearer view of operational performance[164]. - Adjusted EBITDA for the three months ended September 30, 2025, was $195.560 million, compared to $168.417 million for the same period in 2024, reflecting a margin of 13.1%[178]. - Component Repair Services Segment Adjusted EBITDA increased by $41.9 million, or 37.7%, to $153.0 million for the nine months ended September 30, 2025, with an adjusted EBITDA margin of 29.3%[204]. Tax and Interest - Income tax expense increased to $24.656 million for the three months ended September 30, 2025, compared to $0.211 million in the same period in 2024, reflecting a significant increase due to higher pretax income[185]. - Income tax expense rose by $32.8 million, or 86.1%, to $70.9 million for the nine months ended September 30, 2025, reflecting increased pretax income[194]. - Interest expense decreased by $35.3 million, or 44.2%, to $44.566 million for the three months ended September 30, 2025, due to the repayment of prior debt obligations[183]. - Interest expense decreased by $103.3 million, or 43.9%, to $132.2 million for the nine months ended September 30, 2025, due to debt repayment and refinancing[191]. Cash Flow and Liquidity - The company reported net cash used in operating activities of $6.3 million for the nine months ended September 30, 2025, compared to $32.0 million for the same period in 2024[210]. - Net cash used in investing activities for the nine months ended September 30, 2025, was $91.1 million, primarily due to $66.7 million in purchases of property and equipment[213]. - Net cash provided by financing activities for the nine months ended September 30, 2025, was $90.9 million, mainly from long-term debt proceeds of $545.0 million[214]. - The company had $722.8 million of available liquidity as of September 30, 2025, consisting of cash and a revolving credit facility[205]. - As of September 30, 2025, the company had cash of $97.5 million and net working capital of $1.6 billion, an increase from $1.2 billion as of December 31, 2024[205]. Debt and Compliance - Total debt as of September 30, 2025, was $2.36 billion, up from $2.27 billion as of December 31, 2024[206]. - The New 2024 Term Loan Facilities had an outstanding principal amount of $2.23 billion, maturing on October 31, 2031[206]. - The company was in compliance with the covenants in the New Credit Agreement as of September 30, 2025[209]. Currency and Interest Rates - Approximately $34.8 million, or 2.3%, of revenue for the three months ended September 30, 2025, was attributable to non-U.S. Dollar currencies[226]. - The company entered into an interest rate swap contract for a notional amount of $400.0 million, providing an effective fixed SOFR rate of 3.71%[224]. - The New 2024 Term Loan Facilities have a SOFR based rate with a margin of 2.00% to 2.25%[227]. - The New 2024 Revolving Credit Facility for Euro loans has a EURIBOR based rate with a margin of 1.50% to 2.00%[227]. - The New 2024 Revolving Credit Facility for Canadian Dollar loans has a CORRA based rate with a margin of 1.50% to 2.00%[227]. - The New 2024 Revolving Credit Facility for Pounds Sterling loans has a SONIA based rate with a margin of 1.50% to 2.00%[227]. - The New 2024 Term Loan Facilities for U.S. Dollar loans have a base rate margin of 1.00% to 1.25%[227]. - The New 2024 Revolving Credit Facility for U.S. Dollar loans has a base rate margin of 0.50% to 1.00%[227].
StandardAero, Inc.(SARO) - 2025 Q3 - Quarterly Report