Loar Holdings (LOAR) Q2 2025 Earnings Call August 13, 2025 10:30 AM ET Speaker0Greetings. Welcome to LOR Holdings, Inc. Second Quarter twenty twenty five Results Conference Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation.Please note this conference is being recorded. I will now turn the conference over to Ian MacKillop, Director of Investor Relations. Thank you. You may begin.Speaker1Thank you, Daryl. Good morning, welcome to ...

Financial Data and Key Metrics Changes - Revenue for Q2 2025 reached a record high of $151.6 million, representing an increase of approximately 11.3% year-over-year and a sequential growth of 2.8% [5] - Non-GAAP net income attributable to shareholders increased by 8.7% to $12.7 million, or $0.26 per fully diluted share, compared to $11.7 million, or $0.24 per fully diluted share in the same period last year [13] - Non-GAAP gross margin for Q2 2025 was 28.7%, down from 29.4% in Q2 2024, but improved sequentially from 28.5% [11] Business Line Data and Key Metrics Changes - Revenue from Israeli operations totaled $68.7 million, an increase of 18.8% compared to $57.8 million in the same period last year, accounting for 47% of overall quarterly revenue [10] - North American operations saw revenue increase by approximately 6.5% year-over-year, reaching $62.2 million [10] Market Data and Key Metrics Changes - In the U.S., revenue growth was approximately 9% year-over-year, driven by agreements executed in late 2024 and early 2025 [6] - The company is witnessing signs of improvement in the U.S. market, reinforcing positive momentum for continued growth [6] Company Strategy and Development Direction - The company is focused on leveraging its AI low code, no code cloud-based platform to meet the accelerating demand for automation and innovative software solutions [7] - A memorandum of understanding has been signed to negotiate a merger with Matrix, which is expected to create a more diversified and resilient global IT service provider [17][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to drive continued growth through sales of their product suite and high-value services, with a strong pipeline supporting sustained growth [16] - The company revised its full-year 2025 revenue guidance to a range of $600 million to $610 million, reflecting an anticipated annual growth rate of approximately 8.6% to 10.4% [17] Other Important Information - Cash flow from operating activities for the first half of 2025 was $21.2 million, down from $41.4 million in the same period of 2024, primarily due to increased investment in working capital [15] - The company declared a semiannual cash dividend of $0.296 per share, totaling approximately $14.5 million, reflecting about 75% of distributable profit for 2025 [14] Q&A Session Summary Question: Can you give us any color on customer behavior in the U.S.? - Management noted increased demand from major clients and signs of recovery in IT spending, contrasting with the previous year [20] Question: Can you talk about some of the drivers that are impacting margins? - Management indicated that margins were impacted by the timing of software license renewals and the revenue mix, with a significant increase in revenues from professional services [21][22] Question: How would you describe the progress of customers transitioning to cloud solutions? - Management observed more adoption of cloud solutions, with new customers jumping directly into the cloud and legacy customers starting to adopt cloud offerings [24] Question: Can you comment on the pipeline and types of deals being seen? - Management highlighted that cloud and AI projects are significant drivers, with hundreds of projects underway and a higher conversion rate than the industry standard [28]

Financial Data and Key Metrics Changes - The company reported adjusted EBITDA of $8 million for Q2 2025, a decline of $2.1 million compared to the prior year, primarily due to lower margins in the forged and cast engineered products segment [5][22] - Net sales for 2025 were $113.1 million, an increase of 2% compared to 2024, driven by higher sales of forged engineered products and favorable FX translation [21][22] - The net loss attributable to Ampco Pittsburgh for Q2 2025 was $7.3 million, or $0.36 per share, which includes $6.8 million related to the UK exit charge [24] Business Line Data and Key Metrics Changes - The Forged and Cast Engineered Products segment reported net sales of $77.9 million, a 3% increase compared to 2024, but adjusted EBITDA decreased by $1.5 million to $6.8 million [7][22] - The Air and Liquid Processing segment saw a 15% increase in adjusted EBITDA, reaching $3.9 million in Q2, with year-to-date adjusted EBITDA of $7.7 million, the highest in the segment's history [6][16] Market Data and Key Metrics Changes - Demand in North America and Europe for flat rolled products remains weak, with many U.S. customers postponing purchases due to tariff uncertainty [9][10] - The baseline tariff for U.S. imports from Sweden and Slovenia increased to 15%, impacting short-term expectations but not long-term fundamentals [10][12] Company Strategy and Development Direction - The company is winding down operations at its UK facility, expecting a minimum of $5 million improvement in operating income on an annualized basis once complete [6][21] - The company is focusing on reshoring opportunities in tool steel and distribution products, while maintaining pricing discipline and cost control measures [8][12] Management's Comments on Operating Environment and Future Outlook - Management noted that the pause in customer orders was due to tariff clarity, but they expect improved order activity as uncertainties are resolved [30][46] - The long-term fundamentals remain strong, with expectations for growth in construction spending, automotive production, and can sheet demand at mid-single-digit rates over the next five years [11][12] Other Important Information - The company recorded $6.8 million in expenses related to the UK exit charge, impacting various expense line items on the consolidated P&L [21][24] - The company amended and extended its credit agreement, increasing available liquidity to support global working capital needs [25] Q&A Session Summary Question: Insights on the role market and potential demand - Management indicated that the second half of the year will see lighter shipments due to fewer days and holidays, but there has been a slight uptick in order activity from large customers [29][30] Question: Impact of UK facility closure on revenues - The closure is expected to reduce revenues by approximately $25 million to $30 million, with some offset from converting products [44]

Financial Data and Key Metrics Changes - Total revenues for Q2 2025 were $13.28 million, a 12.5% increase from $11.2 million in Q2 2024 [7] - Gross margins decreased to 43.6% from 47% in the previous year, primarily due to product mix and federal tariffs [7] - Net income was $1.6 million or $0.53 per diluted share, down from $1.7 million or $0.63 per diluted share in Q2 2024 [7][8] - Adjusted EBITDA decreased to $2.4 million from $3.5 million in the same period last year [9] - Backlog increased by 35% to $61.2 million compared to $45.3 million in June 2024 [9] Business Line Data and Key Metrics Changes - Revenue growth was driven by defense-related orders, particularly in avionics and space sectors [6] - The company reported strong book-to-bill ratios for three consecutive quarters, indicating robust demand [6] Market Data and Key Metrics Changes - The company operates in aerospace and defense, commercial avionics, industrials, and space markets [5] - The backlog reflects continued demand for products, including large defense and avionics orders [9] Company Strategy and Development Direction - The company is focusing on moving into more program business, which constitutes a significant portion of aerospace and defense revenues [12] - Strategic investments in research and development are ongoing to support future growth [6] - The company is considering small buybacks and mergers and acquisitions (M&A) as part of its capital allocation strategy [24][46] Management's Comments on Operating Environment and Future Outlook - Management noted that the first full quarter impacted by federal tariffs did not affect product demand [10] - There is optimism about improving gross margins in Q3 and Q4, although tariffs remain a variable [21] - The company anticipates continued revenue growth in the second half of the year, driven by product mix and backlog [42] Other Important Information - The company distributed dividends and warrants to stockholders, with warrants listed on the NYSE American Exchange [11] - The interim CEO is in the process of finalizing paperwork to remove the interim title [49] Q&A Session Summary Question: Impact of tariffs on gross margin - Management indicated that tariffs had a minor impact, approximately 1.25% of revenue for the quarter [16] Question: Future gross margin expectations - Management expects some improvement in gross margins in Q3 and Q4, but cautioned that it remains a variable [21] Question: Backlog and future contract wins - Management highlighted a strong pipeline for defense POs, particularly in munitions and communications [22] Question: Capital allocation priorities - The company is prioritizing CapEx for automation and considering buybacks and M&A for capital allocation [24] Question: Military stockpile rebuild efforts - Management noted that depletion of missile stockpiles could lead to increased manufacturing opportunities [28] Question: Operating margin outlook - Management expects operating margins to improve as the company scales, with fluctuations based on product mix [39] Question: Acquisition environment and strategy - The company is looking for complementary acquisitions in the $5 million to $15 million revenue range, focusing on positive EBITDA [46]

Financial Data and Key Metrics Changes - The company's second quarter revenue increased by 31% year-over-year, reaching $921.5 million, driven by strong performance in the Electrical and Mechanical (E and M) segment and improved results in the Transmission and Distribution (T and D) segment [5][14] - EBITDA for the second quarter rose by 36% to $84.2 million, with EBITDA margins increasing to 9.1% from 8.8% in the prior year [6][14] - Total backlog at the end of the second quarter was $3 billion, up 24% from the same period last year [6][15] Business Line Data and Key Metrics Changes - E and M segment revenues increased by 42% to $713.6 million, with EBITDA rising by 53% to $63.7 million, resulting in an EBITDA margin of 8.9% [17] - T and D segment revenues grew by 3% to $212.4 million, with EBITDA increasing by 19% to $30.4 million, leading to an EBITDA margin of 14.3% [18] Market Data and Key Metrics Changes - The company noted strong demand trends in key end markets, particularly in data centers and hospitality, with no significant weather impacts reported during the quarter [10][32] - The utility end market showed increased activity, especially in the underground submarket, contributing to the growth in the T and D segment [7][18] Company Strategy and Development Direction - The company aims for long-term organic revenue growth of 5% to 7% compounded annually, with EBITDA growth of 7% to 9% on a compound annual basis [12] - The focus remains on attracting and retaining key talent, with a record employment level achieved during the quarter [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to generate continued backlog growth, citing strong customer relationships and favorable trends in key markets [7][23] - The company raised its 2025 revenue guidance to a range of $3.3 billion to $3.4 billion, reflecting strong execution and favorable demand drivers [20] Other Important Information - The company is pursuing several larger projects in the T and D segment, indicating a shift in trend and potential for growth [45] - The company is actively exploring inorganic growth opportunities, with a focus on companies that align with its values and operational standards [54] Q&A Session Summary Question: Capability to convert backlog and fill gaps with book and burn work - Management highlighted the importance of timing and resource allocation in project execution, emphasizing their strong position to support growth [26][27] Question: Weather impact on T and D and hospitality outlook - No weather impacts were reported in the second quarter, and there was an uptick in hospitality work in Las Vegas, although it has not yet returned to pre-pandemic levels [32] Question: Sustainability of gross margin improvements - Management noted that efficiency gains from prefab investments and strong project execution contributed to gross margin improvements, with ongoing investments planned [38] Question: Book to bill ratio and demand environment - The book to bill ratio was slightly below one, attributed to the lumpiness of backlog and timing of project awards, with a year-to-date ratio of 1.1 indicating strong demand [41][42] Question: Growth rates in the back half of the year - Management indicated that growth rates may be tempered in the second half due to tougher comparisons, with E and M expected to grow at a faster rate than T and D [48] Question: Pipeline for M&A opportunities - The company is actively pursuing M&A opportunities, bolstered by the hiring of a new vice president of corporate development, with a focus on geographic expansion [54] Question: Cash flow and working capital management - Management expressed confidence in their ability to generate cash flow in the second half of the year, despite increased working capital needs for new projects [57]

Financial Data and Key Metrics Changes - The company achieved a semester production of 751,000 barrels of oil equivalent per day, the highest level in a decade, despite a challenging environment marked by high volatility and declining crude prices [3][4] - Revenue and profits were impacted by a 22% decline in RIM compared to 2024, although the company achieved the best quarterly crude differential in four years [6][7] - The company committed $2.5 billion in investments so far this year, maintaining its production target for 2025 [7][8] Business Line Data and Key Metrics Changes - In the upstream segment, domestic crude oil production reached 517,000 barrels per day, the highest since 2021, driven by fields like Canisur and the acquisition of 45% interest in Block CPO-nine [17][19] - The midstream segment saw transported volumes decrease by 6% compared to 2024, but EBITDA increased by 9% in the first half of the year [20][21] - The downstream segment reported a 52% increase in EBITDA compared to the same period in 2024, with throughput reaching 413,000 barrels per day [23][24] Market Data and Key Metrics Changes - The company secured long-term contracts for natural gas in Colombia, ensuring national supply through five-year agreements [5][32] - The company achieved a 5.6% self-generation of electricity from renewable sources, significantly up from 0.6% five years ago [34][35] Company Strategy and Development Direction - The company is focused on maximizing high-value products, portfolio diversification, operational efficiency, and sustainability [26][28] - The company continues to advance its TESG agenda, expecting to exceed the goal of 900 megawatts in renewable energy generation by 2025 [8][35] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by geopolitical tensions and third-party disruptions but emphasized the company's resilience and operational adaptability [3][6] - The company remains committed to protecting its cash position and maintaining capital discipline while monitoring market conditions [61][62] Other Important Information - The company completed the full payment of dividends to shareholders, delivering a 10% return [7] - Significant investments were made in renewable energy projects, including the acquisition of Winfecce, the company's first wind project [5][8] Q&A Session All Questions and Answers Question: Can you explain how you reached the peak of production and your expectations for the rest of the year? - The peak production was achieved through anticipation of activity and better performance of drills, with expectations of an average production of 90 to 190 barrels per day for the rest of the year [65][66] Question: Could you expand on the topic of disinvestment of assets? - The company constantly evaluates its portfolio and is looking at processes underway for potential disinvestments, particularly in Colombia [69][70] Question: What is the expected cash and breakeven EBITDA for the upstream business? - The company indicated that 99% of its fields have breakevens below $50 per barrel, allowing for strategic investment decisions [72][74]

Financial Data and Key Metrics Changes - In Q4, Chili's same store sales increased by 24%, outperforming the casual dining industry by 189 basis points, with a two-year comp of 39% [6][7] - Total revenue for the year grew by 21.9%, surpassing $5 billion for the first time, with adjusted EPS growth of 117.1% [38][39] - Restaurant operating margin improved from 11.9% in fiscal 2022 to 17.6% in fiscal 2025 [8][14] Business Line Data and Key Metrics Changes - Chili's reported top line sales growth with comps at 23.7%, driven by positive traffic of 16.3%, mix of 4.7%, and price of 2.7% [39] - Maggiano's reported comp sales for the quarter of negative 0.4% [40] Market Data and Key Metrics Changes - Chili's average annual volumes increased from $3.6 million to over $4.5 million [38][14] - The company has seen a significant increase in marketing investment from $32 million in fiscal 2022 to $137 million in fiscal 2025 [17] Company Strategy and Development Direction - The company is focused on a turnaround strategy that emphasizes food, service, and atmosphere, with a streamlined menu and improved operational efficiency [13][19] - Plans for fiscal 2026 include a full year of the ribs upgrade, new frozen margarita offerings, and a major relaunch of the chicken sandwich platform [20][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining growth momentum, with expectations for continued positive same store sales and traffic [46][47] - The company plans to ramp up reimaging programs for both Chili's and Maggiano's, aiming for a 10% annual refresh rate [24][90] Other Important Information - The company has paid down over $570 million of outstanding debt in the past three years, achieving a lease adjusted leverage ratio of 1.7 [18][44] - A new Vice President of Restaurant Development has been appointed to lead reimaging and new restaurant openings [25] Q&A Session Summary Question: Comments on restaurant margins and Maggiano's turnaround - Management clarified that margin expansion is expected to be in the range of 30 to 40 basis points, with some inflation in the cost of sales [51][52] - The turnaround for Maggiano's will focus on enhancing the guest experience based on core customer preferences [54][56] Question: Update on growth targets and marketing investment - Management indicated that while growth targets remain relevant, there may be updates as new unit growth ramps up [60][62] - Marketing investment is set at about 3% of total revenues, with plans for incremental increases [66][68] Question: Expectations for same store sales components in FY 2026 - Price increases are expected to be closer to 3% in FY 2026, with mix planned to be flat and positive traffic anticipated [75][78] - The company is focused on maintaining industry-leading value while managing pricing strategies [74][76] Question: Insights on new customer dynamics - The company is experiencing growth across all income levels, with frequency of visits remaining stable among new customers [83][84] Question: Details on STORE reimage plans - The company plans to reimage four restaurants initially, with evaluations to inform future investments and sales lift expectations [89][90]

Financial Data and Key Metrics Changes - For fiscal year 2025, the company reported full year revenues of $942.7 million and adjusted operating income (AOI) of $222.5 million, representing a 5% year-over-year increase [5] - In the fourth quarter, revenues were $154.1 million, a decrease of 17% compared to the prior year, primarily due to lower event-related revenues from concerts and food, beverage, and merchandise [12][13] - Fourth quarter adjusted operating income decreased by $14.4 million to a loss of $1.3 million compared to the prior year quarter [13] Business Line Data and Key Metrics Changes - The company hosted nearly 6 million guests at over 975 live events during fiscal year 2025, with modest growth in the number of events held at venues compared to the prior year [6] - The Christmas Spectacular production sold approximately 1.1 million tickets across 200 performances, generating over $170 million in revenue, a new record for the production [8] - The number of concerts at theaters increased, while the number of concerts at The Garden decreased year-over-year due to the end of Billy Joel's residency [7] Market Data and Key Metrics Changes - The Knicks and Rangers played a combined 97 home games at The Garden, down from 103 games in the prior year, impacting shared revenue streams [9] - The company expects cash component of Arena license fees to be approximately $45 million in fiscal year 2026, growing 3% each year through fiscal year 2055 [9] Company Strategy and Development Direction - The company aims to increase the number of events at venues, drive growth in per event profitability, and expand sponsorship and premium hospitality businesses [5] - The strategic decision to bring sponsorship sales in-house is expected to capitalize on upcoming opportunities in fiscal year 2026 [10] - The company is focused on organic growth and remains confident in delivering long-term shareholder value [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to drive solid growth in revenue and adjusted operating income in fiscal year 2026, supported by strong consumer and corporate demand [5] - The company anticipates another year of substantial free cash flow generation and plans to explore ways to opportunistically return capital to shareholders [14][40] Other Important Information - The company repurchased approximately $40 million of Class A common stock during fiscal year 2025, with $70 million remaining under the current share repurchase authorization [15][40] - The company is in the late planning stages for a new residency at The Garden, which is expected to create potential for concert growth in fiscal year 2027 [35] Q&A Session Summary Question: Update on ticket sales for the Christmas Spectacular - Management noted that advanced ticket revenue is pacing well ahead of last year, with higher individual and group ticket sales [18][19] Question: Forward bookings trends for fiscal year 2026 - Management indicated that they expect to increase the number of booking events, including concerts, and are currently pacing ahead in bookings [25][27] Question: Progress on utilization at The Garden - Management reported an effective utilization of a little over 65% for The Garden and is looking to increase event growth in fiscal year 2026 [32] Question: Capital returns strategy for fiscal year 2026 - Management stated that they will continue to explore ways to opportunistically return capital to shareholders while maintaining a strong balance sheet [38][40] Question: Outlook for sponsorship and consumer demand - Management expressed optimism about sponsorship opportunities and noted strong consumer demand, with advanced ticket sales pacing well [51][53]

Financial Data and Key Metrics Changes - For Q2 2025, the company reported net investment income before taxes of $800,000, or 6¢ per share, an increase of 1% from the previous quarter, representing an annualized return on equity of 4.3%, up approximately 80 basis points sequentially [5] - Net assets decreased modestly to $76,000,000, down $2,100,000 from the prior quarter, with net asset value per share decreasing to $5.27 from $5.42 [5][12] - The weighted average yield of the portfolio was 10.6%, a slight decrease from 11% in the previous quarter [13] Business Line Data and Key Metrics Changes - The portfolio consisted of 43 borrowers, with approximately 79% in first lien debt and 21% in equity warrants and other positions [13] - The weighted average net leverage declined to approximately 4.8 times from 4.9 times, while the weighted average loan-to-value (LTV) remained stable at approximately 46% [6] Market Data and Key Metrics Changes - Market spreads remained relatively stable throughout the quarter, with disciplined pricing across the middle market [8] - The company experienced a pickup in origination activity, with $19,000,000 in originations this quarter, up from $5,000,000 in the previous quarter [6] Company Strategy and Development Direction - The company remains focused on maintaining net asset value stability, delivering sustainable net investment income, and selectively deploying capital into high-quality opportunities with attractive risk-adjusted returns [18] - The board authorized a share repurchase program of up to $5,000,000, expected to be in effect until 08/07/2026 [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about renewed momentum in the middle market, with expectations for increased activity in the second half of the year [7][18] - The company is focused on resolving legacy credit issues and repositioning the portfolio to support long-term performance [8] Other Important Information - The company declared a distribution of 12¢ per share and a supplemental distribution of 2¢ per share payable in cash on 10/09/2025 [16] - As of June 30, the company had approximately $17,300,000 in cash, with $14,400,000 being restricted cash [17] Q&A Session Summary Question: What was the spillover income for the quarter? - The CFO indicated that the spillover income was a significant reason for the distribution to shareholders being in excess of the change in assets from operations, with net income before taxes at 6¢ a share [22] Question: What is the strategy to improve returns given high leverage and low profitability? - Management noted that improving profitability involves absorbing expenses across a broader asset base as the private credit business grows, while maintaining a cautious approach to leverage [24][27] Question: Should we expect portfolio contraction in coming quarters to reduce leverage? - Management expects repayments to increase in the second half of the year, which could lead to a deleveraging event if decent assets are not found to replace them [28] Question: Has the company considered wrapping up the BDC and converting to cash to improve returns? - Management emphasized that their primary focus is on improving shareholder value and stabilizing the portfolio before considering such actions [31]

Southland Holdings (SLND) Q2 2025 Earnings Call August 13, 2025 10:00 AM ET Speaker0Good morning. My name is Tina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Southland Second Quarter twenty twenty five Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session.You. Alex, you may begin your conference.Speaker1Good morning, everyone, and welcome t ...