Loar Holdings Increases EPS Projections Following LMB Deal

Loar Holdings and Its Significant Acquisition

Loar Holdings Inc. (NYSE: LOAR) is gaining attention in the market after confirming an agreement to acquire 100% of LMB Fans & Motors for a total of 365 million euros, equivalent to approximately $382 million, plus net debt to be settled in cash upon closing.

About LMB Fans & Motors

Established over sixty years ago, LMB has specialized in the design and production of customized, high-performance fans and motors. This acquisition positions Loar strategically, allowing it to broaden its product offerings and enhance its market presence in this specialized area.

Details of the Acquisition

The put option agreement provides Loar Holdings exclusive rights to finalize this acquisition, which hinges on consultations with LMB’s social and economic committee. Financing for this significant transaction will come from additional borrowings along with the company’s available cash reserves.

Closing Timeline

This acquisition is anticipated to finalize in the third quarter of 2025, subsequent to obtaining the necessary regulatory approvals and meeting customary closing conditions.

Loar's Preliminary Results for 2024

Looking ahead, for the fourth quarter of 2024, Loar anticipates net sales ranging from $108.1 million to $110.1 million, outperforming the market consensus of $100.01 million. The projected Adjusted EBITDA stands between $39.0 million and $39.8 million, with net income expected to fall within $2.7 million to $3.3 million.

Fiscal Year 2024 Expectations

For the entirety of 2024, Loar forecasts net sales to be between $400.5 million and $402.5 million, again exceeding the consensus estimate of $392.7 million. The Adjusted EBITDA is expected in the range of $145.2 million to $146.0 million, while net income is projected at $21.2 million to $21.8 million.

Future Outlook and Guidance

Looking further into FY25, Loar continues to predict net sales between $470 million and $480 million, while the consensus targets $483.4 million. Importantly, the adjusted EPS outlook has been raised to between $0.67 and $0.72 from an earlier estimate of $0.45 to $0.50. Glenn D’Alessandro, Loar’s Treasurer and CFO, expressed confidence in the updated earnings guidance, emphasizing the visibility offered by the company's backlog.

Upcoming Earnings Release

Loar Holdings will reveal its fourth-quarter and complete 2024 earnings on the last day of March in 2025. Upcoming financial disclosures will further illuminate the impact of the LMB acquisition on overall performance.

Current Financial Position

As of the end of September in 2024, the company reported cash and cash equivalents amounting to $55.179 million. This strong liquidity position bodes well for the upcoming acquisition and ongoing operations.

Market Reaction

In premarket trading, shares of LOAR reflected a downturn of 0.58%, currently priced at $69.00. Investors remain attentive to the developments surrounding the acquisition and its potential impact on future earnings and market positioning.

Frequently Asked Questions

What is the reason behind Loar Holdings' acquisition of LMB?

Loar Holdings aims to strengthen its product offerings and enhance market presence within the high-performance fan and motor sector.

How will the acquisition of LMB be financed?

The acquisition will be financed through additional borrowings under existing credit agreements and available cash.

When is the acquisition expected to close?

The acquisition is planned to close in the third quarter of 2025, pending regulatory approvals.

What are the projected earnings for Loar Holdings in FY24?

For FY24, Loar expects net sales between $400.5 million and $402.5 million and net income of $21.2 million to $21.8 million.

What is the anticipated adjusted EPS outlook for FY25?

The adjusted EPS outlook for FY25 has been increased to between $0.67 and $0.72.

About The Author

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