Air Industries Group Announces Financial Results for the Three and Six Months ended June 30, 2020
August 07 2020 - 12:46PM
Business Wire
Air Industries Group (NYSE AMEX:
AIRI):
Air Industries Group (“Air Industries” or the “Company”), an
integrated manufacturer of precision equipment assemblies and
components for leading aerospace and defense prime contractors
today announced its results for the three and six months ended June
30, 2020.
Highlights
For the three months ended June 30, 2020 compared to June 30,
2019
- Consolidated net sales for the three months ended June 2020
were $8.5 million a decline of $4.9 million or 36% compared to
$13.4 million in 2019.
- Consolidated gross profit for the three months ended June 2020
was $600,000 a decline of $1.6 million or 72% compared to $2.2
million in 2019. Gross profit as a percentage of sales declined
from 16.3% in 2019 to 7.2% in 2020.
- Operating expenses for the three months ended June 2020 were
essentially unchanged, at $1.9 million.
- Air Industries had an operating loss for the three months ended
June 2020 of $1.3 million compared to an operating profit of
$219,000 in 2019.
- Interest and financing costs for the three months ended June
2020 were $428,000 a dramatic decline of $564,000 or 57% compared
to $992,000 in 2019. The decline in interest expense reflects the
significantly lower interest rates of the Company’s new credit
facility with Sterling National Bank.
- Net Loss for the three months ended June 2020 was $1.6 million
compared to a net loss of $735,000 in 2019.
For the six months ended June 30, 2020 compared to June 30,
2019
- Consolidated net sales for the six months ended June 2020 were
$21.9 million a decline of $5.3 million or 19% compared to $27.2
million in 2019.
- Consolidated gross profit for the six months ended June 2020
was $2.8 million a decline of $1.7 million or 37% compared to $4.5
million in 2019. Gross profit as a percentage of sales declined
from 16.4% in 2019 to 12.7% in 2020.
- Operating expenses for the six months ended June 2020 were $4.2
million an increase of $200,000 or 3% from $4.0 million in
2019.
- Air Industries had an operating loss for the six months ended
June 2020 of $1.4 million compared to operating income of $156,000
in 2019.
- Interest and financing costs for the six months ended June 30,
2020 were $800,000 a decline of $1.2 million or 57% compared to
$2.0 million in 2019. The decline in interest expense reflects the
significantly lower interest rates of the Company’s new credit
facility with Sterling National Bank.
- Loss from continuing operations for the six months ended June
2020 was $526,000 compared to a loss from continuing operations
$1.7 million in 2019. The reduction in loss from continuing
operations for the six months includes an income tax refund of $1.4
million arising from tax law changes in recent legislation.
Otherwise, the loss from continuing operations for the six months
ended June 2020 would have been approximately $1.9 million,
comparable to 2019.
- Adjusted EBITDA for the six months ended June 2020 was $755,000
as shown in the table below. Adjusted EBITDA is a non-GAAP
financial measure which is reconciled to the most directly
comparable GAAP financial measure and is more fully defined in the
below table.
For the Six Months Ended June
30, 2020
Net Loss
$
(526,000
)
Add-backs to EBITDA Interest
806,000
Taxes
(1,414,000
)
Depreciation & Amortization
1,502,000
EBITDA
368,000
Add-backs to Adjusted EBITDA Bank Charges
72,000
Stock Compensation
315,000
Adjusted EBITDA
$
755,000
CEO Commentary
Lou Melluzzo, CEO of Air Industries said, “Our press release on
May 18th discussed how Covid-19 negatively impacted our operations.
These impacts are clearly seen in the 34% reduction in shipments in
the second quarter. During the second quarter, the impact on our
production and shipments was most severe in April, when average
weekly sales were just 50% of our Q-1 average. Sales improved in
May and improved further in June rebounding to approximately 80% of
the Q-1 average.
There are still disruptions and challenges but these are
moderating. We believe that conditions will continue to improve
during the current quarter. As sales improve, we are confident our
gross margin – which is highly variable with sales volume – will
return to historical, higher levels. We are optimistic about the
third quarter and more optimistic about the fourth. Our recent
significant capital investment reflects our confidence in the
future.”
Additional information about the Company can be found in its
filings with the SEC.
Investor Conference Call
Management will host a conference call on
Monday August 10, 2020 at 4:30PM Eastern
Conference Toll-Free Number –
800.309.1256
Passcode – 887 600
ABOUT AIR INDUSTRIES GROUP
Air Industries Group (AIRI) is an integrated manufacturer of
precision equipment assemblies and components for leading aerospace
and defense prime contractors.
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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version on businesswire.com: https://www.businesswire.com/news/home/20200807005381/en/
Air Industries Group Michael Recca CFO Investor Relations
631.968.5000 ir@airindustriesgroup.com
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