SEDAR Interim Financial Statements

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2025 Page 2 of 12 DISCLOSURE OF NON-REVIEW OF INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2025 The accompanying unaudited interim condensed consolidated financial statements of Magellan Aerospace Corporation (the “Corporation”) for the three and nine month periods ended September 30, 2025 have been prepared in accordance with International Accounting Standards 34, Interim Financial Reporting, and are the responsibility of the Corporation’s management. The Corporation’s external auditors, BDO Canada LLP, have not performed a review of these interim condensed consolidated financial statements in accordance with the standards established by Chartered Professional Accountants Canada for a review of financial statements by the external auditors of an entity. Page 3 of 12 MAGELLAN AEROSPACE CORPORATION INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (unaudited) Three month period ended September 30 Nine month period ended September 30 (expressed in thousands of Canadian dollars, except per share amounts) Notes 2025 2024 2025 2024 Revenues 9 255,666 223,513 766,357 701,664 Cost of revenues 223,046 198,476 666,723 626,201 Gross profit 32,620 25,037 99,634 75,463 Administrative and general expenses 16,391 13,626 49,363 42,757 Other (income) expense (1,452) 1,209 7,829 1,018 Income before interest and income taxes 17,681 10,202 42,442 31,688 Interest expense 289 950 1,343 3,320 Income before income taxes 17,392 9,252 41,099 28,368 Income tax expense (recovery): Current 10 4,337 5,082 15,158 11,592 Deferred 10 386 (1,675) (2,920) (2,826) 4,723 3,407 12,238 8,766 Net income 12,669 5,845 28,861 19,602 Other comprehensive income (loss): Items that may be reclassified to profit and loss in subsequent periods: Foreign currency translation 7,354 2,581 (232) 15,122 Unrealized (loss) gain on foreign currency contract hedges (18) 594 1,581 273 Items not to be reclassified to profit and loss in subsequent periods: Actuarial income on defined benefit pension plans, net of tax 6 235 693 746 972 Comprehensive income 20,240 9,713 30,956 35,969 Net income per share Basic and diluted 7 0.22 0.10 0.51 0.34 See accompanying notes to interim condensed consolidated financial statements Page 4 of 12 MAGELLAN AEROSPACE CORPORATION INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (unaudited) September 30 December 31 (expressed in thousands of Canadian dollars) Notes 2025 2024 Current assets Cash 71,996 56,437 Trade and other receivables 245,683 208,430 Contract assets 61,855 82,416 Inventories 285,765 284,082 Prepaid expenses and other 21,581 11,733 686,880 643,098 Non-current assets Property, plant and equipment 5 378,392 377,563 Right-of-use assets 32,183 35,817 Investment properties 6,913 6,839 Intangible assets 35,025 36,248 Goodwill 23,867 23,948 Other assets 6 15,027 14,102 Deferred tax assets 9,439 8,639 500,846 503,156 Total assets 1,187,726 1,146,254 Current liabilities Bank indebtedness 4 31,461 19,857 Accounts payable, accrued liabilities and provisions 153,801 139,921 Contract liabilities 9 62,195 67,220 Debt due within one year 10,820 10,742 258,277 237,740 Non-current liabilities Lease liabilities 27,724 31,613 Borrowings subject to specific conditions 23,337 24,213 Other long-term liabilities and provisions 6 19,082 13,840 Deferred tax liabi --- lities 33,597 36,031 103,740 105,697 Equity Share capital 7 249,504 249,762 Contributed surplus 2,044 2,044 Other paid in capital 13,565 13,565 Retained earnings 502,439 480,638 Accumulated other comprehensive income 54,780 53,431 Equity attributable to equity holders of the Corporation 822,332 799,440 Non-controlling interest 3,377 3,377 Total equity 825,709 802,817 Total liabilities and equity 1,187,726 1,146,254 . See accompanying notes to interim condensed consolidated financial statements Page 5 of 12 MAGELLAN AEROSPACE CORPORATION INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY Attributable to equity holders of the Corporation (unaudited) (expressed in thousands of Canadian dollars) Share capital Contributed surplus Other paid in capital Retained earnings Foreign currency translation Total Non- controlling interest Total equity December 31, 2023 250,147 2,044 13,565 446,952 21,332 734,040 3,377 737,417 Net income for the period - - - 19,602 - 19,602 - 19,602 Other comprehensive income for the period - - - 972 15,395 16,367 - 16,367 Common share repurchases (385) - - (304) - (689) - (689) Common share dividends - - - (4,286) - (4,286) - (4,286) September 30, 2024 249,762 2,044 13,565 462,936 36,727 765,034 3,377 768,411 December 31, 2024 249,762 2,044 13,565 480,638 53,431 799,440 3,377 802,817 Net income for the period - - - 28,861 - 28,861 - 28,861 Other comprehensive income for the period - - - 746 1,349 2,095 - 2,095 Common share repurchases (258) - - (666) - (924) - (924) Common share dividends - - - (7,140) - (7,140) - (7,140) September 30, 2025 249,504 2,044 13,565 502,439 54,780 822,332 3,377 825,709 See accompanying notes to interim condensed consolidated financial statements Page 6 of 12 MAGELLAN AEROSPACE CORPORATION INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) Three month period ended September 30 Nine month period ended September 30 (expressed in thousands of Canadian dollars) Notes 2025 2024 2025 2024 Cash flow from operating activities Net income 12,669 5,845 28,861 19,602 Amortization/depreciation of intangible assets, right-of- use assets and property, plant and equipment 12,073 11,329 35,729 33,457 Loss on disposal of property, plant and equipment - 141 2 228 Increase in defined benefit plans 191 786 1,111 1,435 Accretion of financial liabilities 620 645 1,900 1,713 Deferred taxes 387 (1,675) (2,919) (2,826) Income on investments in joint ventures (197) (266) (655) (584) Other - - - (39) Changes to non-cash working capital (20,902) 1,844 (11,918) 28 Net cash provided by operating activities 4,841 18,649 52,111 53,014 Cash flow from investing activities Purchase of property, plant and equipment 5 (10,177) (7,258) (29,422) (22,358) Proceeds from disposal of property, plant and equipment - 2 - 65 (Increase) decrease in intangible and other assets (926) 51 (3,181) (538) Net cash used in investing activities (11,103) (7,205) (32,603) (22,831) Cash flow from financing activities Increase (decrease) in bank indebtedness 1 1,868 (9,491) 10,677 1,690 Decrease in long-term debt - (163) - (883) Lease liability payments (1,621) (1,716) (4,911) (4,393) Decrease in borrowings subject to specific conditions, net - - (1,391) (19) Increase (decrease) in long-term liabilities and provisions 102 (199) (62) 20 Common share repurchases 7 (920) (5) (924) (689) Common share dividends 7 (2,855) (1,428) (7,140) (4,286) Net cash used in financing activities (3,426) (13,002) (3,751) (8,560) (Decrease) i --- ncrease in cash during the period (9,688) (1,558) 15,757 21,623 Cash at beginning of the period 1 81,387 31,919 56,437 8,709 Effect of exchange rate differences 1 297 336 (198) 365 Cash at end of the period 71,996 30,697 71,996 30,697 (1) Prior-year amounts have been reclassified to conform to the change in 2025 presentation See accompanying notes to interim condensed consolidated financial statements Page 7 of 12 MAGELLAN AEROSPACE CORPORATION NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited, expressed in thousands of dollars except share and per share data) NOTE 1. DESCRIPTION OF BUSINESS AND NATURE OF OPERATIONS Magellan Aerospace Corporation (the “Corporation” or “Magellan”) is a publicly listed company incorporated in Ontario, Canada under the Ontario Business Corporations Act and its shares are listed on the Toronto Stock Exchange (“TSX”). The registered and head office of the Corporation is located at 3160 Derry Road East, Mississauga, Ontario, Canada, L4T 1A9. The Corporation is a diversified supplier of components to the aerospace industry. Through its wholly owned subsidiaries, controlled entity and joint venture, Magellan designs, engineers and manufactures aeroengine and aerostructure components for aerospace markets, including advanced products for defence and space markets, and complementary specialty products. The Corporation also supports the aftermarket through the supply of spare parts as well as through repair and overhaul services. NOTE 2. BASIS OF PRESENTATION AND MATERIAL ACCOUNTING POLICIES These unaudited interim condensed consolidated financial statements have been prepared in accordance with International Accounting Standard (“IAS”) 34, Interim Financial Reporting as issued by the International Accounting Standards Board (“IASB”) and using the same accounting policies and methods as were used for the Corporation’s consolidated financial statements and the notes thereto for the year ended December 31, 2024, except for the new accounting pronouncements which have been adopted as disclosed in note 3. These unaudited interim condensed consolidated financial statements do not include all the information required for full annual financial statements and should be read in conjunction with the Corporation’s annual financial statements for the year ended December 31, 2024, which are available at www.sedarplus.ca and on the Corporation’s website at www.magellan.aero. The timely preparation of the interim condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingencies, if any, as at the date of the financial statements and the reported amounts of revenue and expenses during the period. By their nature, estimates are subject to measurement uncertainty and changes in such estimates could require a material change in the interim condensed consolidated financial statements in future periods. These unaudited interim condensed consolidated financial statements were authorized for issuance by the Board of Directors of the Corporation on November 7, 2025. Certain classifications of the comparative figures have been reclassified to conform to those used in the current period. Specifically, cash held at banks that are members of the Corporation’s operating credit facility, has been reclassified from Increase in bank indebtedness to Cash at the beginning of the period in the interim con --- densed consolidated statements of cash flows. This has been annotated where applicable. NOTE 3. ADOPTION OF NEW STANDARDS, INTERPRETATIONS AND AMENDMENTS The Corporation has not adopted any new accounting standards or amendments issued by the IASB that were effective January 1, 2025. The IASB has issued the following new standard and amendment that have not yet been adopted by the Corporation and could have an impact on future periods. The Corporation is in the process of reviewing these changes to determine the impact on the consolidated financial statements. ? IFRS 18, Presentation and Disclosure in Financial Statements replaces IAS 1, Presentation of Financial Statements. IFRS 18 introduces three sets of new requirements to improve companies' reporting of financial performance and give investors a better basis for analyzing and comparing companies. The new standard is effective for annual reporting periods beginning on or after January 1, 2027, with earlier application permitted. ? Amendments to IFRS 9, Financial Instruments and IFRS 7, Financial Instruments: Disclosures, clarifying both the classification of financial assets linked to environmental, social, and governance features as well as the timing in which a financial asset or financial liability is derecognized when using electronic payment systems. The new standard is effective for annual reporting periods beginning on or after January 1, 2026. Page 8 of 12 NOTE 4. BANK INDEBTEDNESS The Corporation has a multi-currency operating credit facility with a syndicate of banks, with a Canadian dollar limit of $75,000. Extensions of the facility are subject to mutual consent of the syndicate of lenders and the Corporation. The credit agreement also includes a $75,000 uncommitted accordion provision which will provide the Corporation with the option to increase the size of the operating credit facility. On June 24, 2025 the Corporation extended its credit facility for an additional two-year period expiring on June 30, 2027. Indebtedness under the facility bears interest at adjusted term Canadian Overnight Repo Rate Average or adjusted term Secured Overnight Financing Rate (“SOFR”) rates plus 1.00%. A fixed and floating charge debenture on accounts receivable, inventories and property, plant and equipment is pledged as collateral for the operating credit facility. As at September 30, 2025, the Corporation had drawn $35,270 [December 31, 2024 - $23,714] under the operating credit facility, including letters of credit totaling $3,809 [December 31, 2024 - $3,857] such that $39,730 [December 31, 2024 – $51,286] was available to be drawn on. NOTE 5. PROPERTY, PLANT AND EQUIPMENT Net Book Value At December 31, 2024 377,563 Additions 29,422 Depreciation (26,334) Disposals and other (4) Foreign currency translation (2,255) At September 30, 2025 378,392 In July 2025, the Corporation entered into an agreement with the Manitoba government for a grant of $8,000 supporting various investment projects for its operating facilities in Winnipeg, Manitoba, Canada. The government grant is repayable if certain covenants are not met. In the third quarter of 2025, the full amount was received and was recorded as a reduction to property, plant and equipment additions. NOTE 6. EMPLOYEE FUTURE BENEFITS The Corporation has a number of defined benefit and defined contribution plans providing pension, other retirement and post- employment benefits to substantially all of its employees. The employee benefit reflec --- ted in the interim condensed consolidated statement of financial position is as follows: September 30 December 31 2025 2024 Included in Other assets - Pension benefit plans 5,699 5,805 Included in Other long-term liabilities and provisions - Other benefit plan (652) (718) 5,047 5,087 The discount rate assumption used in determining the obligation for pension and other benefit plans is selected based on a review of current market interest rates of high-quality, fixed rate debt securities adjusted to reflect the duration of the expected future cash outflows for pension benefit payments. As a result of changes in the market interest rates of high-quality, fixed rate debt securities, the Corporation increased the assumed discount rate for the Canadian pension plans to 4.70% as at September 30, 2025 from the 4.60% weighted average rate used in calculating the pension obligation as at December 31, 2024. The return on plan assets was above the expected return during the nine month period ended September 30, 2025. The change in the discount rate assumption, the difference between the actual and expected rate of return on the plan assets and the effect of asset ceiling resulted in $746 of actuarial gains being recorded in other comprehensive income in the nine month period ended September 30, 2025. Page 9 of 12 NOTE 7. SHARE CAPITAL Net income per share Three month period ended September 30 Nine month period ended September 30 2025 2024 2025 2024 Net income 12,669 5,845 28,861 19,602 Weighted average number of shares (in thousands) 57,113 57,143 57,128 57,169 Basic and diluted net income per share 0.22 0.10 0.51 0.34 Dividends During the first, second and third quarters of 2025, the Corporation declared quarterly cash dividends of $0.025, $0.05 and $0.05 per common share, respectively, and paid aggregate dividends of $7,140. Subsequent to September 30, 2025, the Corporation declared dividends to holders of common shares in the amount of $0.05 per common share payable on December 31, 2025, to shareholders of record at the close of business on December 17, 2025. Normal Course Issuer Bid On June 11, 2025, the Corporation extended its previous normal course issuer bid (“NCIB”). The June 2025 NCIB allows the Corporation to purchase up to 2,856,929 common shares, over a 12-month period commencing June 13, 2025, and ending June 12, 2026. During the nine month period ended June 30, 2025, the Corporation purchased a total of 59,126 common shares for cancellation at a cost of $924. During the same period in the prior year, the Corporation purchased 87,942 common shares for cancellation at a cost of $689. NOTE 8. FINANCIAL INSTRUMENTS Fair value hierarchy The Corporation’s financial assets and liabilities recorded at fair value on the interim condensed consolidated statement of financial position have been categorized into three categories based on a fair value hierarchy. The fair value of assets and liabilities included in Level 1 are determined by reference to quoted prices in active markets for identical assets and liabilities. Assets and liabilities in Level 2 include valuations using inputs other than the quoted prices for which all significant inputs are based on observable market data, either directly or indirectly. Level 3 valuations are based on inputs that are not based on observable market data. The fair value hierarchy requires the use of observable market inputs whenever such inputs exist. A financial instrument is classified to the lowest lev --- el of the hierarchy for which a significant input has been considered in measuring fair value. Fair values The Corporation has determined the estimated fair values of its financial instruments based on appropriate valuation methodologies; however, considerable judgement is required to develop these estimates. Accordingly, these estimated fair values are not necessarily indicative of the amounts the Corporation could realize in a current market exchange. The estimated fair value amounts can be materially affected by the use of different assumptions or methodologies. The methods and assumptions used to estimate the fair value of financial instruments are described as follows: Cash, trade and other receivables, contract assets, accounts payable and accrued liabilities and contract liabilities Due to the short period to maturity of these instruments, the carrying values as presented in the interim condensed consolidated statement of financial positions approximate their fair values. Foreign exchange contracts The Corporation enters into foreign exchange forward and collar contracts to hedge highly probable future transactions. Under these contracts the Corporation is obliged to purchase or sell specific amounts of currency – generally either the United States dollar (“USD”) or British Pound (“GBP”) - at predetermined dates and exchange rates if certain conditions are met. A number of these contracts are designated as cash flow hedges. As at September 30, 2025, the Corporation had foreign exchange forward contracts outstanding in the amount of USD Nil [December 31, 2024 – USD 4,000] and GBP 23,540 [December 31, 2024 – GBP 23,540] with a derivative asset carrying value of $53. Page 10 of 12 As at September 30, 2025, the Corporation has $53 of derivative assets [December 31, 2024 – $2,078 derivative liabilities], included in Prepaid expenses and other [December 31, 2024 – included in Accounts payable, accrued liabilities and provisions] on the interim condensed consolidated statement of financial position. For the nine months ended September 30, 2025, a gain of $1,581 net of taxes of $550, was recorded in other comprehensive income for the effective portion of cash flow hedges. In accordance with the fair value hierarchy of financial instruments, the derivatives are considered Level 2. Debt As at September 30, 2025, the carrying amount of the Corporation's debt of $2,770 [December 31, 2024 – $2,863] approximates its fair value due to the short period to maturity and is classified as Debt due within one year. The fair value of long-term debt, if any, is determined by discounting the expected future cash flow based on the current rate for debt with similar terms and maturities and is categorized as Level 2 in the fair value hierarchy. Borrowings subject to specific conditions As at September 30, 2025, the Corporation has recognized $24,790 [December 31, 2024 – $25,604] as the amount repayable to Canadian government agencies. The contributions are repayable as future royalty payments; a liability is recorded for the amounts received that will be repaid based on future estimated sales. The fair value was determined by discounting the expected future royalty payments based on the prevailing market rate for borrowings with similar terms and maturities and is categorized as Level 2 in the fair value hierarchy. The current portion of this repayable amount is included in Accounts payable, accrued liabilities and provisions on the interim condensed cons --- olidated statement of financial position. NOTE 9. SEGMENTED INFORMATION Operating segments are defined as components of the Corporation for which separate financial information is available that is evaluated regularly by the chief operating decision maker in allocating resources and assessing performance. The chief operating decision maker of the Corporation is the President and Chief Executive Officer. The Corporation operates substantially all of its activities in one reportable segment, Aerospace, which includes the design, development, manufacture, repair and overhaul and sale of systems and components for defence and civil aviation. The Corporation’s primary sources of revenue Three month period ended September 30 Nine month period ended September 30 2025 2024 2025 2024 Sale of goods 217,409 180,188 644,837 568,563 Services 28,257 43,325 121,520 133,101 255,666 223,513 766,357 701,664 Timing of revenue recognition based on transfer of control Three month period ended September 30 Nine month period ended September 30 2025 2024 2025 2024 At a point of time 169,334 127,784 500,845 415,897 Over time 86,332 95,729 265,512 285,767 255,666 223,513 766,357 701,664 Advance payments received for contracts in progress in excess of revenue recognized were recorded as contract liabilities on the interim condensed consolidated statement of financial position. As at September 30, 2025, contract liabilities were $62,195 [December 31, 2024 – $67,220]. Revenues from the Corporation’s three largest customers and its two largest customers accounted for 47.9% and 34.4%, respectively, of total sales for the three and nine month periods ended September 30, 2025 [September 30, 2024 – two largest customers accounted for 37.1% and 37.3% respectively of total sales for the three and nine month periods ended]. Page 11 of 12 The Corporation’s revenue information split by geographic segment Three month period ended September 30 Nine month period ended September 30 2025 2024 2025 2024 Revenue Canada 95,691 83,299 302,463 263,451 United States 73,265 63,402 220,050 202,442 Europe 86,710 76,812 243,844 235,771 255,666 223,513 766,357 701,664 Export revenue1 Canada 70,330 54,477 207,002 174,075 United States 19,454 12,319 58,391 41,410 Europe 23,248 18,003 62,753 60,599 113,032 84,799 328,146 276,084 1Export revenue is attributed to countries based on the location of the customers The Corporation’s long-lived assets split by geographic segment September 30 December 31 2025 2024 Property, plant and equipment, right-of-use assets, intangible assets and goodwill Canada 159,474 157,582 United States 148,122 158,200 Europe 168,448 157,794 476,044 473,576 NOTE 10. TAXATION The Corporation’s tax expense is calculated by using the rates applicable in each of the tax jurisdictions that the Corporation operates in, adjusted for the main permanent differences identified. The effective tax rate for the three and nine month periods ended September 30, 2025 was 27.2% and 29.8% respectively [36.8% and 30.9% respectively for the three and nine month periods ended September 30, 2024]. The difference between the effective tax rate and the standard tax rate is primarily attributable to the change in mix of income across the different jurisdictions in which the Corporation operates. NOTE 11. MANAGEMENT OF CAPITAL The Corporation’s objective is to maintain a capital base sufficient to maintain investor, creditor and market confidence and to sustain future development of the business. M --- anagement defines capital as the Corporation’s shareholders’ equity and interest bearing debt, including the debt and equity components of convertible debentures, if applicable. Total managed capital as at September 30, 2025 of $856,563 [December 31, 2024 - $822,160] is comprised of shareholders’ equity attributable to equity holders of the Corporation of $822,332 [December 31, 2024 - $799,440] and interest-bearing debt of $34,231 [December 31, 2024 - $22,720]. Interest-bearing debt includes Long-term debt (both current and long-term portions thereof) and Bank indebtedness. The Corporation manages its capital structure and makes adjustments to it in light of economic conditions, the risk characteristics of the underlying assets and the Corporation’s working capital requirements. In order to maintain or adjust its capital structure, the Corporation, upon approval from its Board of Directors, may issue or repay long-term debt, issue shares, repurchase shares through the normal course issuer bid, pay dividends or undertake other activities as deemed appropriate under the specific circumstances. The Board of Directors reviews and approves any material transactions out of the ordinary course of business, including proposals on acquisitions or other major investments or divestitures, as well as capital and operating budgets. There were no changes in the Corporation’s approach to capital management during the period. NOTE 12. CONTINGENT LIABILITES AND COMMITMENTS In the ordinary course of business activities, the Corporation may be involved in litigation and claims, with or without merit, with customers, suppliers and former employees. Management believes that adequate provisions have been recorded in the accounts Page 12 of 12 where required. Although, it is not possible to accurately estimate the extent of the potential costs and losses, if any, management believes, but can provide no assurance, that the ultimate resolution of such contingencies would not have a material adverse effect on the financial position of the Corporation. At September 30, 2025, capital commitments in respect of purchase of property, plant and equipment totalled $21,430 [December 31, 2024 - $30,879], all of which had been ordered. There were no other material capital commitments at the end of the period.