Air Industries Group Announces Financial Results for the Three and Six Months Ended June 30, 2022
August 08 2022 - 8:30AM
Business Wire
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 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, decreasing $1.4 million or (9%) from $15.5
million in the 2021 period. 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, decreasing $180,000 from $2.6 million in the
2021 period. Consolidated gross profit for the 2022 second quarter
increased by $346,000 or 17% from $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% from $1.9 million in the first quarter
of 2022.
- Operating income for the three months ended June 30, 2022 was
$250,000, decreasing $192,000 from $442,000 in the 2021 period.
Operating income for the second quarter of 2022 increased by
$43,000 or 20% from $207,000 for the first quarter of 2022.
- Interest and financing costs for the three months ended June
30, 2022 were $289,000, a decrease of $44,000 compared to $333,000
in the 2021 period. 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 three months ended June 30, 2022 was $7,000,
compared with net income of $239,000 in the 2021 period. The net
loss for the first quarter ended March 31, 2022, was $28,000.
Six Months 2022 Comparisons
- Consolidated net sales for the six months ended June 30, 2022
were $26.1 million, decreasing $3.1 million or (11%) from $29.2
million in the 2021 six month period.
- Consolidated gross profit for the six months ended June 30,
2022 was $4.5 million, a slight increase from $4.4 million in the
2021 period. Gross profit margin was 17.3% for the six months ended
June 30, 2022, compared with 15.1% reported for the same period of
2021.
- Operating expenses for the six months ended June 30, 2022 were
$4.0 million, increasing $111,000 from $3.9 million in the 2021
period.
- Operating income for the six months ended June 30, 2022 was
$457,000, slightly below the $467,000 reported for the 2021
period.
- Interest and financing costs for the six months ended June 30,
2022 were $612,000, a decrease of $18,000 compared to $630,000 in
the 2021 period.
- Net loss for the six months ended June 30, 2022 was $35,000,
compared with net income of $87,000 in the 2021 period.
Reconciliation of Net (Loss) to Adjusted EBITDA
Adjusted EBITDA Six
Months EndedJune 30, 2022 Net (Loss)
$
(35,000
)
Add-backs to EBITDA Interest Expense
612,000
Taxes
-
Depreciation & Amortization
1,339,000
EBITDA
$
1,916,000
Add-backs to Adjusted EBITDA Stock 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 businesses, we faced
significant supply chain disruptions affecting the availability of
raw materials. Nevertheless, comparing our 2022 second quarter
performance to this year’s first quarter, which reflected a similar
operating environment, net sales were up 16%, consolidated gross
profit was up nearly 17%, and operating income rose nearly 20%.
“The raw material delays and delays in outside processing,
regrettably, impeded the production of some customer orders, which
largely contributed to the decrease in sales compared with the
year-ago quarter and six month periods. That said, the recent
periods demonstrate the advantages of Air Industries’ diverse mix
of stable aircraft product platforms and customers. While sales
declined overall for the first half of 2022 versus 2021, we
experienced solid increases in some platforms, namely the Northrup
Grumman E2-D, and the Pratt & Whitney Geared Turbo Fan. We also
saw increased volume of assemblies for the Sikorsky CH-53
helicopter.
“We are working diligently to address the current challenging
environment. In particular, we are continuing our vertical
integration strategy, which is designed to improve efficiency and
shorten production times. Our in-house painting facility is up and
running, and undergoing qualification, and we are establishing a
function at our Sterling operation that should facilitate the
assembly process for a substantial customer order.
“The long-term prospects for our marketplace are strong. We
attended the recent Farnborough Airshow, one of the key events for
the aerospace industry, where the tone was generally upbeat. For
example, demand remains substantial for the Lockheed Martin F-35
Joint Strike Fighter, which is the best-in-world fifth-generation
fighter aircraft, and the fighter aircraft program of record for
allied militaries around the globe.
“We are continuing to position Air Industries for enhanced
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 defense customers,
while pursuing expanded business development and sales
efforts.”
Additional information about the Company can be found in its
filings with the SEC and by visiting the website at
www.airindustriesgroup.com.
Investor Conference Call
Management will host a conference call on
Monday, August 8, 2022 at 4:15 PM Eastern Time
Conference Toll-Free Number
888-378-4398
Passcode – 348 775
ABOUT 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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