Air Industries Group Announces Financial Results for the Three Months Ended March 31, 2023
10 Juli 2023 - 2:30PM
Business Wire
Conference Call Scheduled for July 12,
2023
Air Industries Group (NYSE American: AIRI), an integrated
Tier 1 manufacturer of precision assemblies and components for
mission-critical aerospace and defense applications, and a prime
contractor to the U.S. Department of Defense, today announced its
financial results for the quarter ended March 31, 2023.
First Quarter 2023 Comparisons
- Consolidated net sales for the three months ended March 31,
2023 were $12.5 million, an increase of $487,000 or 4.0% from the
first quarter of 2022. First quarter 2023 net sales were lower by
$1.3 million or (9.7%) compared with sales of $13.9 million
reported for the fourth quarter of 2022 ended December 31,
2022.
- Consolidated gross profit for the first quarter of 2023 was
$1.9 million compared with $2.1 million in the first quarter of
2022 and $1.6 million in the fourth quarter of 2022. The fourth
quarter of 2022 included realized losses and an accrual for
estimated future losses totaling $850,000 related to a single
unprofitable contract as previously reported. The Company also
corrected its policy for determining the reserve for slow-moving
and excess inventory, which led to an increase in the reserve,
further decreasing the gross profit and gross profit percentage for
the fourth quarter of 2022.
- Gross profit margin was 15.0% of sales for the first quarter of
2023, 17.2% for the first quarter of 2022, and 5.1% for the fourth
quarter of 2022.
- Operating expenses for the first quarter of 2023 were $2.04
million, an increase of $167,000 or 8.9% from $1.88 million in the
first quarter of 2022, and an increase of $508,000 or 33.2% from
$1.53 million in the 2022 fourth quarter.
- The operating loss for the first quarter of 2023 was $158,000,
versus operating income of $207,000 in the first quarter of 2022,
and an operating loss of $830,000 in the fourth quarter of
2022.
- Interest and financing costs for the three months ended March
31, 2023 were $476,000 compared with $323,000 in the first quarter
of 2022, and $403,000 for the three months ended December 31, 2022.
The increases in interest expense resulted from increases in the
prime rate and from higher loan balances.
- Net loss for the first quarter of 2023 was $618,000 versus a
net loss of $28,000 in the first quarter of 2022, and a net loss of
$899,000 in the fourth quarter of 2022.
CEO Commentary
Lou Melluzzo, CEO of Air Industries Group, said:
“Air Industries’ results for the first quarter of 2023 continued
to reflect the supply chain disruption that has challenged our
industry since the onset of the pandemic. Specifically, our ability
to process and deliver product was hampered by delays in receiving
raw materials, especially the high-performance alloys that are a
mainstay of many aviation components. We are making every effort to
overcome these supply chain bottlenecks.
“At the same time, we are excited about the opportunities that
lie ahead as we pivot to future growth prospects. We are building
on our solid position in the defense ecosystem by expanding our
penetration of existing platforms, adding new platforms, and
targeting new markets. Specifically, we will focus on markets that
offer attractive sales and margin potential, and where our
capabilities and competitive strengths will enable us to take
advantage of those opportunities in the near-to-mid-term.
“For example, we are actively seeking additional business in our
traditional markets of military fixed-wing and rotary aircraft, as
well as commercial aircraft engine components. We also are making
solid progress with our recent entry into the nuclear submarine
market, which aligns well with our core competencies and has the
potential to be a significant addition to our business going
forward.
“During the balance of 2023 and beyond, Air Industries will
further refine and execute on our strategies to pursue both
existing and new opportunities in the aerospace and adjacent
markets, combined with a disciplined focus on improving profit
margins.”
Investor Conference Call
Management will host a conference call on
Wednesday, July 12, 2023 at 4:15 PM Eastern Time
Conference Toll-Free Number
877-524-8416
Additional information about the Company can be found in its
filings with the SEC and by visiting the website at
www.airindustriesgroup.com.
AIR INDUSTRIES GROUP is an integrated Tier 1 manufacturer
of precision assemblies and components for mission-critical
aerospace and defense applications, and a prime contractor to the
U.S. Department of Defense.
Forward Looking Statements
Certain matters discussed in this press release are
'forward-looking statements' intended to qualify for the safe
harbor from liability established by the Private Securities
Litigation Reform Act of 1995. In particular, the Company's
statements regarding trends in the marketplace, future revenues,
earnings and Adjusted EBITDA, the ability to realize firm backlog
and projected backlog, cost cutting measures, potential future
results and acquisitions, are examples of such forward-looking
statements. The forward-looking statements are subject to numerous
risks and uncertainties, including, but not limited to, the timing
of projects due to variability in size, scope and duration, the
inherent discrepancy in actual results from estimates, projections
and forecasts made by management, regulatory delays, changes in
government funding and budgets, and other factors, including
general economic conditions, not within the Company's control. The
factors discussed herein and expressed from time to time in the
Company's filings with the Securities and Exchange Commission could
cause actual results and developments to be materially different
from those expressed in or implied by such statements. The
forward-looking statements are made only as of the date of this
press release and the Company undertakes no obligation to publicly
update such forward-looking statements to reflect subsequent events
or circumstances.
Adjusted EBITDA
The Company uses Adjusted EBITDA, a Non-GAAP financial measure
as defined by the SEC, as a supplemental profitability measure
because management finds it useful to understand and evaluate
results, excluding the impact of non-cash depreciation and
amortization charges, stock based compensation expenses, and
nonrecurring expenses and outlays, prior to consideration of the
impact of other potential sources and uses of cash, such as working
capital items. This calculation may differ in method of calculation
from similarly titled measures used by other companies and may be
different than the EBITDA calculation used by our lenders for
purposes of determining compliance with our financial covenants.
This Non-GAAP measure may have limitations when understanding
performance as it excludes the financial impact of transactions
such as interest expense necessary to conduct the Company’s
business and therefore are not intended to be an alternative to
financial measure prepared in accordance with GAAP. The Company has
not quantitatively reconciled its forward looking Adjusted EBITDA
target to the most directly comparable GAAP measure because such
items such as amortization of stock-based compensation and interest
expense, which are specific items that impact these measures, have
not yet occurred, are out of the Company’s control, or cannot be
predicted. For example, quantification of stock-based compensation
is not possible as it requires inputs such as future grants and
stock prices which are not currently ascertainable.
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Air Industries Group Investor Relations 631.328.7078
ir@airindustriesgroup.com
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