Air Industries Group announces its financial results for the three and six months ended June 30, 2022

BAY SHORE, NY–(BUSINESS WIRE)–Air Industries Group (US NYSE: AIRI)a Tier 1 integrated manufacturer of precision assemblies and components for critical aerospace and defense applications, and a U.S. Department of Defense prime contractor, today announced financial results for the three and six months ended June 30, 2022.

Second quarter 2022 comparisons

  • Consolidated net sales for the three months ended June 30, 2022 were $14.0 million, down $1.4 million or (9%) from $15.5 million for the period 2021. Second quarter net sales increased $1.9 million or 16% from $12.1 million in the first quarter ended March 31, 2022.

  • Consolidated gross profit for the three months ended June 30, 2022 was $2.4 million, down $180,000 from $2.6 million for the 2021 period. Consolidated gross profit for the second quarter of 2022 increased by $346,000 or 17% compared to $2.1 million in the first quarter of 2022. Gross profit margin was 17.3% for the quarter ended June 30, 2022; 16.8% for the quarter ended June 30, 2021; and 17.2% for the quarter ended March 31, 2022.

  • Operating expenses for the three months ended June 30, 2022 were $2.2 million, essentially unchanged from $2.2 million in the 2021 period. Operating expenses for the second quarter of 2022 increased by $300,000 or 16% compared to $1.9 million in the first quarter of 2022.

  • Operating profit for the three months ended June 30, 2022 was $250,000, down $192,000 from $442,000 for the 2021 period. Operating profit for the second quarter of 2022 increased $43,000 or 20% compared to $207,000 for the first quarter of 2022.

  • Interest and financing costs for the quarter ended June 30, 2022 amounted to $289,000, a decrease of $44,000 compared to $333,000 for the period 2021. Interest and financing costs for the second quarter of 2022 decreased by $34,000 compared to $323,000 in the first quarter of 2022.

  • Net loss for the quarter ended June 30, 2022 was $7,000 compared to net profit of $239,000 for the 2021 period. Net loss for the first quarter ended March 31, 2022 was $28,000.

2022 six-month comparisons

  • Consolidated net sales for the six months ended June 30, 2022 were $26.1 million, down $3.1 million or (11%) from $29.2 million during the six months 2021.

  • Consolidated gross profit for the six months ended June 30, 2022 was $4.5 million, a slight increase from $4.4 million for the 2021 period. Gross profit margin was 17.3% for the six months ended June 30, 2022, compared to 15.1% for the same period of 2021.

  • Operating expenses for the six months ended June 30, 2022 were $4.0 million, up $111,000 from $3.9 million for the 2021 period.

  • Operating profit for the six months ended June 30, 2022 was $457,000, slightly lower than the $467,000 reported for the 2021 period.

  • Interest and financing charges for the six months ended June 30, 2022 amounted to $612,000, a decrease of $18,000 from $630,000 for the 2021 period.

  • Net loss for the six months ended June 30, 2022 was $35,000 compared to net profit of $87,000 for the 2021 period.

Reconciliation of net (loss) to adjusted EBITDA

Adjusted EBITDA Semester completed
June 30, 2022
Net loss)

$

(35,000

)

Additions to EBITDA
Interest charges

612,000

Taxes

Depreciation and amortization

1,339,000

EBITDA

$

1,916,000

Additions to Adjusted EBITDA
Stock-based compensation

315,000

Adjusted EBITDA

$

2,231,000

CEO Commentary

Lou Melluzzo, CEO of Air Industries, said: “The Company continued to make progress in the second quarter of 2022 – a challenging period during which, like most manufacturing companies, we faced significant supply chain disruptions affecting the availability of raw materials. Nevertheless, comparing our performance in the second quarter of 2022 to the first quarter of this year, which reflected a similar operating environment, net sales increased by 16%, consolidated gross profit increased by nearly 17% and operating income increased by nearly 20%.

“Raw material delays and external processing delays unfortunately hampered the production of some customer orders, which was a major contributor to the decline in sales compared to the quarter and six-month periods of the prior year. said, recent periods demonstrate the benefits of Air Industries’ diverse mix of aircraft product platforms and stable customers.While sales were down overall for the first half of 2022 versus 2021, we have solid increases on some platforms, namely the Northrup Grumman E2-D and the Pratt & Whitney Geared Turbo Fan We also saw an increase in the volume of assemblies for the Sikorsky CH-53 helicopter.

“We are working diligently to deal with the current challenging environment. In particular, we are continuing our vertical integration strategy, which aims to improve efficiency and shorten production times. Our in-house paint facility is operational and undergoing qualification, and we are implementing a function in our Sterling operation that should facilitate the assembly process for a large customer order.

“The long-term outlook for our market is strong. We attended the recent Farnborough Airshow, one of the aerospace industry’s premier events, where the tone was generally upbeat. For instance, demand remains high for Lockheed Martin F-35 Joint Strike Fighter, which is the world’s finest fifth-generation fighter aircraft, and the record-breaking combat aircraft program for Allied armies around the world.

“We continue to position Air Industries for better performance in our growing industry through investments in vertically integrated processes and capital equipment to make us an even more valuable partner to our aerospace and manufacturing customers. defense, while pursuing increased business development and sales efforts.

Additional information about the Company can be found in its SEC filings and by visiting the website at www.airindustriesgroup.com.

Investor conference call

Management will hold a conference call on Monday, August 8, 2022 at 4:15 p.m. eastern time

Toll-free conference number 888-378-4398

Access code – 348 775

ABOUT AIR INDUSTRIES GROUP is a Tier 1 integrated manufacturer of precision assemblies and components for critical aerospace and defense applications, and a prime contractor for the US Department of Defense.

Forward-looking statements

Certain matters discussed in this press release are “forward-looking statements” intended to benefit from the safe harbor of liability established by the Private Securities Litigation Reform Act of 1995. market, future revenues, earnings and adjusted EBITDA, the ability to realize a firm and expected backlog, cost reduction measures, potential future results and acquisitions, are examples of such forward-looking statements. Forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to, timing of projects due to variability in size, scope and duration, inherent variance between results actual events and estimates, projections and forecasts made by management, regulatory delays, changes in government funding and budgets and other factors, including general economic conditions, which are 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 differ materially from those expressed or implied by such statements. Forward-looking statements speak 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 measure of profitability because management finds it useful to understand and evaluate results excluding the impact non-cash amortization expense, stock-based compensation expense, and one-time charges and expenses, before considering the impact of other sources and potential uses of cash, such as fund items rolling. This calculation may differ in the method of calculating similarly titled measures used by other companies and may differ from the calculation of EBITDA used by our lenders for the purpose 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 is therefore not intended to be an alternative to a financial measure prepared in accordance with GAAP. The Company has not quantitatively reconciled its adjusted EBITDA guidance to the most directly comparable GAAP measure because items such as amortization of stock-based compensation and interest expense, which are specific items that affect these measures have not yet occurred, are beyond the Company’s control or cannot be predicted. For example, quantification of stock-based compensation is not possible because it requires data such as future grants and stock prices that are not currently verifiable.

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