Loar Q2 2025 Earnings Call Transcript

Quartr
Provided by Quartr
August 13, 2025

Key Takeaways

  • Positive Sentiment: Record Q2 performance with 13% sales growth to $123 million, a $12 million increase in adjusted EBITDA, and a record 38.3% adjusted EBITDA margin.
  • Positive Sentiment: Upgraded full-year 2025 guidance to $486–$494 million in net sales, $184–$187 million in adjusted EBITDA, and $0.83–$0.88 in adjusted EPS, reflecting strong execution on value drivers.
  • Positive Sentiment: Q2 commercial aftermarket sales grew 13% and defense sales rose 19%, driven by robust demand and new product launches.
  • Positive Sentiment: New product introduction pipeline exceeds $500 million over the next five years, underpinning the goal of 1–3% annual organic top-line growth.
  • Negative Sentiment: Original equipment commercial revenue may remain choppy due to OEM and Tier-1 inventory management, despite elevated Airbus and Boeing build rates.
AI Generated. May Contain Errors.
Earnings Conference Call
Loar Q2 2025
00:00 / 00:00

There are 8 speakers on the call.

Operator

Greetings. 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.

Operator

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.

Speaker 1

Thank you, Daryl. Good morning, welcome to the LOR Holdings Q2 twenty twenty five earnings conference call. Presenting on the call this morning are LOR's Chief Executive Officer and Executive Co Chairman, Dirksen Charles Executive Co Chairman, Brett Milgram Treasurer and Chief Financial Officer, Glenn Dellisandro as well as myself, Ian McKillop, the Director of Investor Relations. Please visit our website at lordgroup.com to obtain a slide deck and call replay information. Before we begin, we'd like to remind you that statements made during this call, which are not historical in fact, are forward looking statements.

Speaker 1

For further information about important factors that could cause actual results to differ materially from those expressed or implied in the forward looking statements, please refer to the company's latest filings with the SEC available through the Investor Relations section of our Web site or at sec.gov. We'd also like to advise you that during the course of the call, we will be referring to adjusted EBITDA, adjusted EBITDA margin and adjusted earnings per share, each of which is a non GAAP financial measure. Please see the tables and related footnotes in the earnings release for a presentation of the most directly comparable GAAP measures and applicable reconciliation. To begin today, I will now turn the call over to Dirksen.

Speaker 2

Thanks, Ian. So, I have a confession to make. But before I tell you what that is, let me share one last School Day moment we had during our IPO roadshow regarding giving guidance. We call it the Heather rule. So look, everyone we met during the roadshow told us when you give guidance, ensure that you will achieve it.

Speaker 2

Do not be overly aggressive, be clear, keep it simple, all good advice. One person we met, Heather, gave us the same advice, but there was something about how she said it that in the elevator ride after the meeting, we drew straws to see who would deliver the message if ever we were not meeting or exceeding what we guided to. Heather, your message resonated. And for the record, Ian drew the short straw. Fortunately for Ian, we once again are delivering great news.

Speaker 2

We have exceeded every performance metric that we measure that demonstrates the strength of the aerospace component cash compounder that we are building, including record sales, adjusted EBITDA, adjusted EBITDA margins and tremendous growth across all our market sectors. So hi, Heather. Now for the confession. We usually start our earnings call two minutes late because most of you call in late. For the record, it has gotten worse.

Speaker 2

So here's my confession. I'm stalling to make sure that when we start, I have most folks on the line, especially since the number of callers have more than tripled since our last call. So let's get started. We're good. I'm Dirksen, Founder, CEO and Co Chairman of Law.

Speaker 2

As always, we keep our remarks brief. So let's start by reminding you who we are. Law is a family of companies with a very, very simple approach to creating shareholder value. First, we believe that by providing our business units with an entrepreneurial and collaborative environment to advance their brands, we will generate above market growth rates. Since our inception in 2012 through the end of calendar year 2024, we have grown sales and adjusted EBITDA at a compound annual growth rate of 3745% respectively.

Speaker 2

Over the long term, we expect to increase sales organically at double digit percentages with the last three years 2022, 2023 and 2024 achieving organic sales growth of 18%, 1415% respectively, with adjusted EBITDA growing at a faster rate. We executed along four value streams. We identified pain points within the aerospace industry and look to solve those problems through organically launching new products, which we believe over the long term will create one to three percentage points of top line growth annually. We track the pipeline of new product introductions monthly. It represents a list of opportunities across our portfolio of companies that are derived from listening to our customers to identify their pain points to determine how we can help.

Speaker 2

It is created from the sharing of ideas, best practices and customer synergies across the group through the high degree of collaboration that we foster across our business units. This list currently represents over $500,000,000 of sales over the next five years. So let's do some simple math. Let's assume that the opportunity is equal weighted by year. So in other words, we have a pipeline of $100,000,000 of new product launches in calendar year 2026.

Speaker 2

All we need to do to be successful is deliver 5,000,000 to $15,000,000 of such opportunities to achieve our 1% to 3% annual growth rate. Here's the beauty of the list though. It is a living, breathing entity that grows each year. Look, we also focus on optimizing the way we manufacture, go to market and manage our companies to enhance productivity. Each year, we'll identify initiatives that will allow us to continually improve our performance with a focus on one or two major initiatives each year that will improve margins.

Speaker 2

In addition, across our portfolio of companies, we'll achieve more price than our cost of inflation each year. The result is a continuous improvement in margins year over year with on occasion a temporary dilution as a result of acquiring a business with diluted margins or incurring costs as a result of being a public company. All of which we have experienced over the years, but regardless of these temporary headwinds, we continue to improve our margins. Most importantly, we are committed to developing and improving the talent of our employees because our success is solely a result of their dedication and commitment. So again, as always, to all my mates, big thank you for your commitment and hard work.

Speaker 2

Before I turn the call over to Brett, I wanted to highlight one metric that we measure relative to the quality of the cash flow that we generate. It is our cash flow conversion percentage. As shown on Slide six, in the 2025, the total of our cash flow from operations minus capital expenditures when divided by net income was 175125% respectively. Year to date, our conversion percentage was 148%. While there's no real seasonality in our business when it comes to cash flow, we do pay our bonuses and make our first installments to the IRS related to our annual income tax payment requirements in the second calendar quarter.

Speaker 2

As we said last quarter, we expect our cash flow conversion percentage to be greater than 125% for calendar year 2025. Look at this chart, think of this guide as ahead of moment. I will now turn it over to Brett to walk you through the key characteristics of our portfolio and discuss our most recent addition to our family of companies.

Speaker 3

Thanks Dirksen. I think this is a slide most of you have seen before. It's basically a graphical representation of how our business has been constructed. As you know, we construct we have constructed LOR on two basic tenants. First, we want to be a balanced company that participates in the annuity stream that any platform can provide starting from initial production all the way through the aftermarket lifecycle of the aircraft flying.

Speaker 3

And whether that's a commercial aircraft, a business jet, a general aviation aircraft or something in the military, we just want to participate in that annuity both in the new production side or the OEM piece of the business and the aftermarket piece of the business for its life cycle. Second, we do that around a business model that looks like this. It starts with being solely focused on the aerospace and defense industry and is centered around proprietary products. Those products oftentimes participate in niche markets that have significant aftermarket exposure that provides us cross selling opportunities that we can bring to all our customers, so we can bring a suite of products to solve our customers' pain points. All these characteristics meet our most recent acquisition, which we're very excited about called Beadlight.

Speaker 3

Beadlight is a business located in The UK that is a relatively new business making lighting products for premium seat applications, particularly in the commercial OE and aftermarket business segments. The business has had a lot of growth recently, starting from a new, where they've been able to recently win some new programs, gain some market share and start a path of real cash flow generation that we'll talk about in a little bit, where we think the growth over the next several years is going to be very, very significant.

Speaker 1

So as we move on to our products, as we shared with you in previous calls, this graphic represents the many products that we go to market with. The acquisition of Bead Light brings with it a suite of niche products and capabilities. You can find Bee Light's bespoke lighting and interior, components across premium areas of the cabin and commercial airlines around the globe. And as a reminder, at LOR, we go to market with an average of more than 20,000 unique parts, of which no one product makes up more than 3% of our annual net revenue. Our customers have come to depend on our high proprietary products, quality, on time performance and engineering capabilities to ensure that they are able to maximize their production and aircraft operations.

Speaker 1

If we move on to OEM build rates, as many of you know, narrow body aircraft demand is at an all time high with Boeing and Airbus working to increase production to meet the market. The A320 and seven thirty seven platforms are also our two largest platforms by net sales at 76% respectively. As such, wanted to update provide an update with our present forecast for demand exiting 2025. But before I do, I remind you of something that we've said before. We make things for a living.

Speaker 1

This is our way of saying that over the long term, beyond thirteen week quarters, demand will follow airframe build rates. However, quarter to quarter, week to week and even day to day, every one of our 18 businesses is managing unique material, labor, inventory and technological challenges that impact production. This is just the nature of being a manufacturing organization. To demonstrate the variability in monthly demand we see for our parts for the seven thirty seven and A320 family original equipment, we've delivered anywhere from 10 shipsets to 60 shipsets of parts per month. This has nothing to do with the overall demand as more than three quarters of the backlog of 15,000 aircraft are for these two platforms.

Speaker 1

It's just because we make parts for a living. That said, we see the Airbus A320 shipsets demand exiting the year at 53 per month, while the seven thirty seven MAX family is at 33 per month. I'll now pass the call over to Glenn.

Speaker 4

Thank you, Ian. Good morning, everyone. Let me start by discussing sales by our end markets. This comparison will be on a pro form a basis as if each of our businesses were owned as of the first day of the earliest period presented. This market discussion includes the acquisition of Applied Aionics in Q3 twenty twenty four.

Speaker 4

We achieved record sales during Q2 twenty twenty five. In total, our sales increased to $123,000,000 which is a 13% increase as compared to the prior year. This increase was driven by strong performances in commercial aftermarket, commercial OEM and defense. Our commercial aftermarket sales saw an increase of 13% in Q2 twenty twenty five versus Q2 twenty twenty four. This is primarily driven by the continued strength in demand for commercial air travel.

Speaker 4

We continue to see strong commercial aftermarket bookings. Our total commercial OEM sales increased by 14% in Q2 twenty twenty five as compared to the prior year period. This increase was driven by higher sales across a significant portion of the platforms we supply. The increase of 19% in our defense sales was primarily due to strong demand across multiple platforms and an increase in market share as a result of new product launches. Defense sales continue to be lumpy given the nature of the ordering patterns of our end customers for our products.

Speaker 4

Let me recap our financial highlights for the 2025. Our net organic sales increased 11.3% over the prior period. Our gross profit margin for Q2 twenty twenty five increased by four eighty basis points as compared to the prior year period. This increase was primarily due to the execution of our strategic value drivers, operating leverage as well as a favorable sales mix. Our increase in net income of $9,000,000 in Q2 twenty twenty five versus Q2 twenty twenty four is primarily due to higher operating income and lower interest.

Speaker 4

Adjusted EBITDA was up $12,000,000 in Q2 twenty twenty five versus Q2 twenty twenty four. Adjusted EBITDA margins were a record 38.3% in Q2 twenty twenty five due to the execution of our strategic value drivers, operating leverage and a favorable sales mix. This was partially offset by additional costs associated with being a public company including Sarbanes Oxley compliance and additional organizational costs to support our reporting, governance and control needs. We do not see a material increase in these type of costs going forward. We believe the run rate of these costs is fully reflected in our Q2 twenty twenty five results.

Speaker 4

From 2020 through 2025, we will have increased our EBITDA margin by seven ten basis points. We achieved this growth through the following operating leverage, winning new profitable business, executing on productivity initiatives and from value based pricing. In Q2 twenty twenty five, our margins grew two twenty basis points from Q2 twenty twenty four to a record 38.3%. This was achieved even with the negative impact of costs related to Sarbanes Oxley's compliance and additional organizational costs to support being a public company. And before I turn it back over to Dirksen, I wanted to mention I had different take on the Heather rule.

Speaker 4

I'm pretty sure she looked directly at me when she was sharing her advice. I'm pretty sure that stair lasted for at least thirty minutes. And now I'd like to turn it back to Dirksen to share our outlook for 2025.

Speaker 2

Look, we are excited to share our most recent view for calendar 2025. This view is in excess of what we told you thirteen weeks ago and our confidence rests in the great strides we have made executing on our value drivers in the 2025 and the strength of our proprietary portfolio. Primarily, we are ahead of our plan on our value pricing and productivity initiatives. In addition, we have seen no degradation in demand in any of our end markets and expect no meaningful impact to our results as a result of the current tariff environment. The one end market dynamic of note is what Ian discussed previously regarding the volatility we are seeing in the demand for OE commercial product.

Speaker 2

As the OEMs and Tier 1s manage the growth in OE production, they're going through the growing pains of managing inventory levels and supply chain choppiness. This will result in choppy growth rates over a thirteen week period. Thus, in spite of the strong organic OE commercial growth we have experienced in the current quarter, we will hold our organic growth for this end market at high single digits for 2025. Again, think of it as ahead of the moment. With regards to commercial aftermarket, we expect low double digit growth, while our defense end market sales will be up high double digits, again, I think between 1720%.

Speaker 2

These market assumptions, along with our continued execution of our value drivers will allow us to meet or exceed the following for calendar year 2025. Net sales between $486,000,000 to $494,000,000 up from $482,000,000 to $4.90 Adjusted EBITDA between 184,000,000 and $187,000,000 up from 182,000,000 to $185,000,000 Adjusted EBITDA margin of approximately 38%, which is 170 basis point improvement over 2024 net income between $65,000,000 and $70,000,000 EPS between adjusted EPS between $0.83 and $0.88 which is up 16% from our previous guidance. And as always, in addition, CapEx of approximately $14,000,000 so around 23% of sales as we typically expect, a reduction of $2,000,000 of full year interest expense to $26,000,000 and our effective tax rate of 25%. Depreciation and amortization, non cash stock based comp and our fully diluted share count all remain unchanged. Now with that said, our updated guidance does not include any benefit from our most recently announced pending addition to our family of companies, L and B, Fans and Motors.

Speaker 2

And to be clear, our guide includes any impact we see today related to the current tariff environment, which has been mostly just noise. It also includes the benefit of five months of ownership of Beadlight. For the full year of 2025, we expect and again, for the full year of 2025, we expect Beadlight to do mid single digit millions of sales with slightly above breakeven EBITDA margins. What we are excited about is the contribution to our results in calendar year 2026 and beyond given that Beadlight's current rich pipeline of opportunities and recent program wins have been significant. Once we bake our lower value drivers into Beadlight's DNA, we expect to see a tremendous increase opportunities, primarily due to the top line synergy that is created with the customers that we will be able to introduce BeadLite to, especially the customers of short our seat belt restraint business.

Speaker 2

We expect Bead Life will be accretive to our results in 2026. With that operator, let's open the line for questions.

Operator

Thank you. We will now be conducting a question and answer

Speaker 2

session.

Operator

Our first questions come from the line of Sheila Kahyaoglu with Jefferies. Please proceed with your questions.

Speaker 5

Good morning, guys, and thank you for the time. Dirksen, I also have a confession to make. I might change my name to Heather after this call because she sounds like a pretty cool girl. But maybe if we could start off with your guidance or with the contribution of the new acquisition in the $5,000,000 range. How do we think about where L and B is in terms of that process still pending?

Speaker 5

And is it still expected to close in Q3? And then how do you think about potential for future transactions from here?

Speaker 3

Yes. Hi Sheila, this is Brett. Actually I'll answer the LMB question. As it relates to L and B, we are still in I'll call a holding pattern with the regulators. We are waiting for regulatory approval, which we're still optimistic about.

Speaker 3

We have had a lot of contact over the last several weeks with a number of the French authorities answering some follow-up questions, having them speak to some of the management at LMB. As you may remember, we overwhelmingly had approval by the work council there for the acquisition. The management team is excited about our upcoming ownership. And we still think we are the best buyer for the asset given our plans to grow the business, to keep it where it's currently located and to support the employees, all benefiting the French economy and the French military. That being said, as you know, most folks, particularly those in the government go on holiday in August.

Speaker 3

So I think the earliest we will hear something is September. So hopefully we can get that in before the end of the third quarter. But it's obviously taken a bit more time than we had hoped. So no promises but we're still optimistic. And Sheila, I'll take the other part of

Speaker 2

your question in regards to Beadlight. As I said earlier, Beadlight is roughly mid single digit millions of top line sales. And it's a business that started recently, so much younger than most of the businesses that we own, but is run by a dynamic team with a great leader, Gina Ames, hopefully you'll get to meet her one day, who has created a pipeline of opportunities that is, I would use this word to describe it, incredible. And that's without the having the support of what we will bring in terms of the breadth of the additional customers that we'll get to put Beed Light in front of. As we think about the guide, given we're only going to own them for five months or so and they're new for us, we thought about it thinking about Heather, okay?

Speaker 2

So you appreciate what that means now. And we have included sales approximately $2,000,000 and barely any profit in the guide that we have there. So the way to think about the improvement in our guide, it's all I'm going to use this term, organic. And we're hopeful that by the time we meet again in thirteen weeks or so and we've gotten our hands around Beadlight, which we just closed two weeks ago that we'll be able to share even more progress around Beadlight. So but we're excited to include them in the

Speaker 3

Well, what we can say is 2026 is going to be a very exciting year where I can set the expectation that the price that we pay for Beadlight will look very, very attractive relative to the '26 earnings given what we know is in the pipeline and given what we know where some of the new program wins that they've had which again to Dirksen's point are not inconsequential given this is a relatively new entrant into the lighting marketplace. They've done a great job. They've gotten and developed great customer relationships that have some real synergy particularly with our Schroth business because they both have seating customers as well as airline customers that overlap. So this is a really good strategic fit for us as well as one that will starting I think next year have real significant financial performance.

Speaker 5

Okay. That's really helpful color. Can I ask one more if that's possible?

Operator

Go for it. Absolutely. Okay.

Speaker 5

Commercial aftermarket, I think grew 12.5% organically on a pro form a basis. We've heard a lot of folks talk about the differences between engine and airframe. Any thoughts you have there on what you're seeing in your business? I the portfolio is well rounded, but any exposure you have to engine in your commercial aftermarket? Thanks.

Speaker 1

Yes. I'll say this. So just to give a little bit more information in the detail, and this is Ian by the way. Engines are roughly 7% of our overall revenue and they grew in line with our commercial aftermarket and OE growth rates, so low double digits. So no big degradation or deviation between engines and the broader aftermarket in our portfolio.

Speaker 2

And I'll take a little step beyond. We haven't seen any changes in terms of the demand dynamics relative to commercial aftermarket. So still consistently strong. We're still taking I'll use this term market share with our new product introductions and the pricing dynamics have been pretty good.

Speaker 5

Great. Thank you.

Operator

Thank you. Our next question is coming from the line of Ken Herbert with RBC Capital Markets. Please proceed with your question.

Speaker 6

Yes. Hey, good morning everybody. Thanks for squeezing me in here. Hey,

Speaker 3

I just

Speaker 6

Dirksen, I wanted to follow-up on your last commentary on the new business opportunities in the pipeline. How do we think about that from a timing standpoint? I can appreciate sort of the 5% to 15% gets you to the 1% to 3%. Are you seeing more than that maybe in this in 2025 or is that more 26%, 27% as you convert some of the new opportunities in the pipeline into actual revenues?

Speaker 2

So I'll answer it this way, Kennen. Thanks for the question by the way. In 2025, new product introduction is probably closer to the lower end of that 1% to three guide, okay? I'll say it that way. And that's due to a number of things including a number of certifications that we've seen delayed that we see growing nicely in 2026 and 2027.

Speaker 2

Some of our new entrants into market has been most recent. So we'll see the benefit of in 2026 and 2027. So as I think about 2026 and 2027, the I would expect we'll be closer to the higher end of the guide that we typically give 1% to 3% in those years in terms of the growth rate because we're actually seeing a lot of improvement in terms of the FAA actually moving now on some of our certifications that we've talked about in the past. And we're going through flight tests and pretty close to getting a lot of the platforms certified that we've been focused on. So great question, greater rate in 2026 and 2027 than 2025 in terms of growth.

Speaker 6

Perfect. Thanks, Dirkson. And if I could as a follow-up, there's a growing narrative that aftermarket sales could see incremental pressure as a lot of the airlines are able to sort of bring more savings out of either their maintenance spending or maybe more particular through parts inventory. And I think we can all appreciate airlines have built up sort of buffer stocks as a result of just supply chain disruptions over the last few years. How much of a headwind do you think sort of better efficiency out of the airlines could be to your aftermarket business, not so much in 2025, but maybe in 2026 and 2027?

Speaker 6

And is that a longer term thematic risk you view to the end market or where do you think we stand from that standpoint?

Speaker 2

So I think that the portfolio that we have is likely a lot different than some of the other companies that you're probably thinking about this question for. And I hate using this word because the lawyers are telling me, keep it to a minimum, but I'll use it this one time. Sole source, proprietary, it's very difficult to for an airline to manage the way you describe it without having an alternative, right? So what we're seeing is consistent demand, right? I don't want to give quarterly guides and I don't want to give guides beyond what we've done.

Speaker 2

But I really, really have not seen any change on the commercial aftermarket in terms of the strength of demand. Where we're seeing the choppiness is on the OE side, which is why I wanted to spend some time in this call sharing that information. We've seen companies do the following, truly, truly manage hard their stock of inventory on the commercial OE side, Because as they now convince themselves that Boeing has gotten their act together, Airbus is going to continue to get better, they don't need to keep the extra stock around, the supply chain is getting a little bit better and all of those things. So there may be some choppiness on the commercial OE side, but I don't see it on the commercial aftermarket at this point.

Speaker 6

Great. Thank you very much, Dirksen. Have a good results.

Speaker 2

Thank you, sir. Thanks.

Operator

Thank you. Our next questions come from the line of Kristine Liwag with Morgan Stanley. Please proceed with your question.

Speaker 7

Hey, good morning, everyone. Just a few questions on Beadlight. It looks like you paid £25,000,000 or $33,000,000 for this. So with mid single digit revenue and almost breakeven EBITDA, it does seem a little steep on valuation. Can you provide more color on how much of the accretion on 2026 is from orders that already received that you alluded to versus from the lower toolbox?

Speaker 7

And also as a follow-up on that on Beadlight, is this BFE, SFE? And how much of the portfolio is full source and proprietary?

Speaker 2

100% proprietary. And the way to think about sole source, once your light is on, you're on, okay? I'll say it that way. In terms of accretion, without our help, without us doing anything, would be accretive, which is why I said it in the way I did, right? With us getting putting our value drivers around Beelight and supporting the team that's there, we believe it will be Ian told me not to use this word, but I'm going use it anyway.

Speaker 2

Significantly accretive. No. And this will go to one thing you said, Christine. Look, we look at businesses that we acquire, not in terms of what's in the revenue mirror, but what we can do with it, right? And I will tell you the GBP 25,000,000, and you are correct, that's what we paid, We'll look back two years, three years from now and go, my God, we got that cheap.

Speaker 2

That's how we look at businesses when we acquire it. No difference than Applied Avionics, right? Applied Avionics, when we bought it, was doing $40,000,000 of revenue, right? Everybody knows that. I can say it.

Speaker 2

And if you look at this quarter, you go through the 10 Q, they did over $15,000,000 this quarter alone, and we've owned that business for eleven months, right? So for us, price is future driven, not in the rearview mirror. So Beelight, I can say this now because we already purchased the business and the former owners are probably listing, but we bought it cheap.

Speaker 7

No, that's great to know. Significant accretion is the name of the game. So there's I guess a follow-up on that broadly on M and A. So can you talk about the bidding process of this? How competitive was this?

Speaker 7

How many more assets like this is there in your pipeline?

Speaker 3

Christine, is Brad. Hi. I can tell you this was a proprietary process for us. We were introduced to the owner a while ago, had a bunch of discussions and actually at the Air Show we're able to kind of shake hands to go through our proprietary diligence process and understand the business better and get to the deal that we did. So those are the kinds of deals we'd like

Speaker 2

to do.

Speaker 3

I can tell you that the list of opportunities remains very robust, some of which are just like that, meaning proprietary discussions that we're having with owners. And as I think we've talked about oftentimes, the gestation period for a lot of these opportunities, particularly given the nature of the owners who are oftentimes owner operators or it's a family owned business and legacy and how you're to treat their employees and what they want to do in the future matters to their decision making. That often takes a while for them to either get comfortable or come to the reconciliation that they're ready to sell. And those lists are ever increasing for us because there are hundreds and hundreds and hundreds of companies that fit that description that also fit our business model. So we will as I've often said, we will never get to all the opportunities that we have in any reasonable investment period.

Speaker 3

The harder thing to forecast is when are they executable.

Speaker 7

Yes, super helpful. Well, I'll keep

Speaker 5

it to those two. Thank you very much.

Operator

Thank you. Thank you. We have reached the end of our question and answer session. I would now like to turn the floor back over to management for any closing comments.

Speaker 2

A big thank you to everyone that has taken the time to hear our story today. Believe me when I say we continue to be excited about building our aerospace and defense cash compounder that we call LOW. Looking forward to speaking to you all in thirteen weeks. Please call in on time. Thank you.

Operator

Thank you. This does now conclude today's teleconference. We appreciate your participation. You may disconnect your lines at this time. Enjoy the rest of your day.

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