Q1 2024 Earnings Summary
Reported on May 14, 2024 (Before Market Open)
Pre-Earnings Price$46.90Last close (May 13, 2024)
Post-Earnings Price$47.17Open (May 14, 2024)
Price Change
$0.27(+0.58%)
- Record Sales and Strong Financial Performance: Loar reported record sales of $92 million, a 12.3% increase compared to the prior year period, with net organic sales increasing 11.1% over the prior period. Adjusted EBITDA margins remained strong at 36% despite temporary dilution from recent acquisitions.
- Significant Increase in Backlog and Positive Sales Outlook: The company has seen a 25% increase in its commercial aftermarket backlog year-over-year, indicating strong future demand. This supports their expectation of achieving a double-digit percentage improvement in sales across all end markets in 2024 on a pro forma basis.
- Deleveraging and Improved Capital Structure: Following their IPO and debt repayment of $285 million, Loar's pro forma net leverage is 1.6x. They also reduced their interest rate by 250 basis points, leading to a pro forma annual interest expense of $26 million, enhancing their financial flexibility.
- Temporary EBITDA Margin Dilution Due to Recent Acquisitions: Adjusted EBITDA margins remained at 36% but were temporarily diluted due to two acquisitions completed in the second half of '23. The integration of these acquisitions may present risks and could continue to pressure margins if not managed effectively.
- Limited Public Company Experience and Infrastructure Needs: The company has been public for only two weeks and is still building out its infrastructure to meet public company reporting, governance, and control needs. This transition could lead to operational challenges and divert management attention from core operations.
- Uncertainty in Future Growth from Acquisitions: While historically acquiring one or two businesses each year, the company stated that the timing of future acquisitions cannot be predicted and are not included in the 2024 outlook. This uncertainty may impact growth projections if organic growth does not meet expectations.
Research analysts covering Loar Holdings.