Jason Gursky's questions to Loar Holdings Inc (LOAR) leadership • Q3 2024
Question
Jason Gursky of Citigroup inquired about the potential risks and opportunities surrounding Loar's initial 2025 guidance and asked for details on the drivers of the strong 2025 free cash flow conversion forecast.
Answer
CEO Dirkson Charles explained that the 2025 guidance is cautiously optimistic, viewing it as a baseline the company expects to meet or exceed. He detailed minimal risk from commercial OEM challenges due to low direct exposure, strong confidence in commercial aftermarket driven by high demand and record backlogs, and a solid backlog in the defense sector. CFO Glenn D'Alessandro added that the strong cash flow conversion is driven by high EBITDA, expectations for stable working capital, and defined interest and capital expenditures.