Air Industries Group Reports Significantly Improved Financial Results for Both the Three and Nine Months Ended September 30, 2021
November 03 2021 - 8:30AM
Business Wire
$ 2.3 Million Increase in Operating Income
for the Nine Months
Air Industries Group (NYSE AMEX:
AIRI):
Air Industries Group, an integrated manufacturer of precision
equipment assemblies and components for leading aerospace and
defense prime contractors today announced significantly improved
financial results for the three and nine-month periods ended
September 30, 2021.
Q3 Highlights
- Consolidated net sales increased by $692,000 or 5.1%, to $14.4
million compared with $13.7 million in Q3 2020.
- Consolidated gross profit increased $358,000, or 21.6%, to $2.0
million compared with $1.7 million in Q3 2020.
- Gross profit as a percentage of sales increased to 14.0%
compared with 12.1% in 2020.
- Operating income increased by $421,000 to $178,000 compared
with an operating loss of ($243,000) in Q3 2020.
- Adjusted EBITDA increased $597,000 to $1.1 million compared
with $544,000 in Q3 2020.
- Backlog of “past-due” product shipments to customers reduced by
$6.4 million, or approximately 40%, since year-end.
- Long-term debt reduced by more than $2 million during the third
quarter and $3 million since year-end.
Nine-Month Highlights
- Consolidated net sales increased by $7.9 million, or 22.2%, to
$43.5 million compared with $35.6 million for the nine months in
2020.
- Consolidated gross profit increased $2.0 million, or 44.1%, to
$6.4 million compared with $4.5 million for the nine months in
2020.
- Gross profit as a percentage of sales improved by 220 basis
points to 14.7% compared with 12.5% for the nine months in
2020.
- Operating income increased by $2.3 million to $646,000 compared
with an operating loss of $1.6 million for the nine months in
2020.
- Adjusted EBITDA increased nearly $2.5 million, or 248%, to $3.6
million compared with an EBITDA of $1 million for the nine months
in 2020.
Reconciliation of Net Income to
Adjusted EBITDA
For the Nine Months Ended
September 30,
2021
2020
Net Income
$
21,000
$
(1,003,000
)
Add-backs to EBITDA Interest
959,000
1,167,000
Taxes
-
(1,414,000
)
Depreciation & Amortization
2,223,000
1,920,000
EBITDA
3,203,000
670,000
Add-backs to Adjusted EBITDA Stock Compensation
361,000
266,000
Adjusted EBITDA
$
3,564,000
$
936,000
CEO Commentary
Lou Melluzzo, CEO of Air Industries said, “Results for the third
quarter and the nine months of 2021 continue to improve over
2020.
“Since January 2020, we have made very good progress improving
the composition of our 18-month backlog which is comprised only of
firm and fully funded orders from our customers. Our overdue
product to customers has declined considerably and more current
orders have taken their place. Overdue product now accounts for
less than 12.5% of the funded backlog and will continue to decrease
in the fourth quarter.
“During the nine months of 2021, we achieved significant
improvement in our balance sheet. Inventory, which increased during
the supply chain challenges of 2020 and 2021, has decreased by $2.7
million or nearly 9%. Accounts payable are now just 45 “days of
sales outstanding” an improvement of almost 20% since the beginning
of the year. Improvements in financial results and balance sheet
enabled us to reduce total debt by more than $3 million, or
11%.
“As we enter the fourth quarter of 2021, we are proceeding with
our in-sourcing initiative even as global supply chain issues
continue to abate, bringing increased processing capability
in-house. Our relationships with our customers are strong and
improving. We are confident that our results will continue to
improve,” concluded Melluzzo.
Investor Conference
Call
The Company will host a conference call for
investors on November 3, 2021 at 4:30 PM Eastern. Conference
Toll-Free Number: 1-888-207-0293 Passcode – 558 858
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. For
more information visit www.airindustriesgroup.com.
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/20211103005199/en/
Air Industries Group Michael Recca - CFO Investor Relations
631.328.7078 ir@airindustriesgroup.com
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