Air Industries Group Reports Preliminary Fourth Quarter and Full-Year 2023 Financial Results and Initial 2024 Business Outlook
- Record net sales and operating income in Q4 2023.
- Highest Adjusted EBITDA for the year.
- Positive 2024 business outlook.
- Strong bookings and expanding opportunities.
- None.
The preliminary earnings results for Air Industries Group indicate a positive trajectory in terms of revenue and profitability, as highlighted by the highest net sales and operating income for the fourth quarter. This performance suggests a solid financial position and operational efficiency that could be attractive to investors. The strong bookings and expanding opportunities mentioned may imply a healthy backlog and future revenue streams, which are critical for sustained growth in the aerospace and defense sectors.
However, it is essential to scrutinize the Adjusted EBITDA figures, as this metric excludes certain expenses which may present a more favorable picture than actual profitability. Investors should compare these figures with industry benchmarks and consider how they reflect the company's ability to generate cash flow. Additionally, the initial 2024 business outlook will be a key factor in assessing the company's potential for long-term growth and its strategic direction in a competitive industry landscape.
The aerospace and defense industry is highly dependent on government spending and contracts, which can be influenced by geopolitical tensions and economic policies. Air Industries Group's positive earnings report could indicate resilience and adaptability in this complex market. The mention of strategic growth positioning suggests that the company may be diversifying its portfolio or entering new markets, which could mitigate risks associated with dependency on a few large contracts.
It is also important to consider the broader industry trends, such as the push for innovation in defense technology and the increasing importance of cybersecurity within aerospace. These factors could impact Air Industries Group's product development and investment strategies. Understanding the company's alignment with these trends will provide a clearer picture of its long-term viability and competitive edge.
Air Industries Group's focus on precision components for aerospace and defense indicates its involvement in a niche but important segment of the market. The report of highest net sales in the fourth quarter could be reflective of increased demand for defense equipment amid rising global security concerns. The company's performance in this context is a testament to its operational capabilities and the strategic importance of its product offerings.
Given the long cycle times typically associated with defense contracts, the strong bookings could suggest secured revenue well into the future, which is a positive sign for stability. Nevertheless, it's important to monitor the company's ability to maintain and grow its customer base, especially among large prime contractors, as they are key drivers of revenue in this industry. The initial outlook for 2024 will be telling of the company's competitive positioning and its ability to capitalize on industry trends such as modernization initiatives and international defense spending.
“The fourth quarter of 2023 marked a robust end to a year of significant progress and strategic growth positioning,” said Lou Melluzzo, CEO of Air Industries Group. “Not only did Q4 see the highest net sales of the year but also saw us achieve our highest operating income and Adjusted EBITDA. With strong bookings and continually expanding opportunities, I am confident about our future and expect 2024 to be a year of growth.”
Key Preliminary Q4 2023 Financial Results
| Fourth Quarter | ||||||
2023 (a) |
2022 |
|||||
| Net Sales | $ |
13,469,000 |
|
$ |
13,890,000 |
|
| Cost of Sales |
|
11,319,000 |
|
|
13,180,000 |
|
| Gross Profit |
|
2,150,000 |
|
|
710,000 |
|
| Gross Margin |
|
16.0% |
|
5.1% |
||
| Operating Expense |
|
1,563,000 |
|
|
1,530,000 |
|
| Operating Income |
|
587,000 |
|
|
(820,000 |
) |
| Interest Expense |
|
(448,000 |
) |
|
(403,000 |
) |
| Other Income (net) |
|
42,000 |
|
|
7,000 |
|
| Gain from AP Writeoff |
|
- |
|
|
317,000 |
|
| Income (Loss) before Income Taxes |
|
181,000 |
|
|
(899,000 |
) |
| Income Taxes |
|
- |
|
|
- |
|
| Net Income (Loss) | $ |
181,000 |
|
$ |
(899,000 |
) |
| Income (loss) per Share | $ |
0.06 |
|
$ |
(0.28 |
) |
| Reconciliation of EBITDA To GAAP | ||||||
| Net Income (Loss) | $ |
181,000 |
|
$ |
(899,000 |
) |
| Interest Expense |
|
448,000 |
|
|
403,000 |
|
| Depreciation |
|
499,000 |
|
|
616,000 |
|
| Amortization |
|
17,000 |
|
|
17,000 |
|
| Stock Compensation |
|
59,000 |
|
|
102,000 |
|
| Goodwill |
|
- |
|
|
163,000 |
|
| Adjusted EBITDA | $ |
1,204,000 |
|
$ |
402,000 |
|
| a) Amounts for 2023 are unaudited. | ||||||
Key Preliminary 2023 Financial Results
| Fiscal Year | ||||||
2023 (a) |
2022 |
|||||
| Net Sales | $ |
51,516,000 |
|
$ |
53,238,000 |
|
| Cost of Sales |
|
44,088,000 |
|
|
45,786,000 |
|
| Gross Profit |
|
7,428,000 |
|
|
7,452,000 |
|
| Gross Margin |
|
14.4% |
|
14.0% |
||
| Operating Expense |
|
7,723,000 |
|
|
7,646,000 |
|
| Operating Loss |
|
(295,000 |
) |
|
(194,000 |
) |
| Interest Expense |
|
(1,920,000 |
) |
|
(1,338,000 |
) |
| Other Income (net) |
|
84,000 |
|
|
139,000 |
|
| Gain from AP Writeoff |
|
- |
|
|
317,000 |
|
| Loss before Income Taxes |
|
(2,131,000 |
) |
|
(1,076,000 |
) |
| Income Taxes |
|
- |
|
|
- |
|
| Net Loss | $ |
(2,131,000 |
) |
$ |
(1,076,000 |
) |
| Loss per Share | $ |
(0.65 |
) |
$ |
(0.33 |
) |
| Reconciliation of EBITDA To GAAP | ||||||
| Net Loss | $ |
(2,131,000 |
) |
$ |
(1,076,000 |
) |
| Interest Expense |
|
1,920,000 |
|
|
1,338,000 |
|
| Depreciation |
|
2,352,000 |
|
|
2,522,000 |
|
| Amortization |
|
68,000 |
|
|
65,000 |
|
| Stock Compensation |
|
483,000 |
|
|
526,000 |
|
| Goodwill |
|
- |
|
|
163,000 |
|
| Adjusted EBITDA | $ |
2,692,000 |
|
$ |
3,538,000 |
|
| a) Amounts for 2023 are unaudited. | ||||||
Initial 2024 Business Outlook and Items of Note
-
Although it remains difficult to predict the timing of orders, raw materials and delivery times for finished products, net sales for fiscal 2024 are expected to be at least
$50.0 million -
Backlog, which represents the value of all undelivered funded orders received, stood at
$98.3 million 14.7% increase from 2022. - The book-to-bill ratio, which is bookings divided by net sales, was 1.20x for 2023, a significant improvement over the .75x ratio achieved in 2022.
- Fiscal 2023 supply chain issues related to one key program have been largely resolved, with ongoing customer deliveries planned throughout fiscal 2024.
-
Cash flow from operating activities reached
$4,862,000 $448,000 -
In 2023, investments of
$2,119,000 -
As of December 31, 2023, total indebtedness under the Company’s Current Credit facility was
$15,849,000 $2,889,000 - The Company intends to file a Notification of Late Filing on Form 12b-25 on Tuesday, April 2, 2024, with the Securities and Exchange Commission (“SEC”) due to the need for additional time to complete Item 9A - Evaluation of Disclosures Controls and Procedures, Management’s Report on Internal Control over Financial Reporting and conclude its assessment of Financial Accounting Standards Board ASC 205-40 – Presentation of Financial Statements- Going Concern. The Company is currently finalizing these items and expects to detail its conclusions in the Form 10-K, which it expects to file on or before April 16, 2024. The Company does not expect that the finalization of these items and the fiscal 2023 audit will have any impact on the preliminary earnings for the fourth quarter and full year of 2023 results announced in this press release.
Conference Call Information
As previously announced, the Company will host a conference call to discuss Q4 and FY 2023 results as well as its 2024 business outlook. The call is scheduled for today, April 1, 2024, at 4:30PM Eastern Time.
The conference call number is 877-524-8416 and will be made available for replay at www.airindustriesgroup.com.
ABOUT AIR INDUSTRIES GROUP
Air Industries Group is a leading manufacturer of precision components and assemblies for large aerospace and defense prime contractors. Its products include landing gears, flight controls, engine mounts and components for aircraft jet engines, ground turbines and other complex machines. Whether it is a small individual component or complete assembly, its high quality and extremely reliable products are used in mission critical operations that are essential for the safety of military personnel and civilians.
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.
NON-GAAP FINANCIAL MEASURES
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 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.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240401999918/en/
Air Industries Group
Chief Financial Officer
631-328-7039
Anyone wishing to contact us or send a message can also do so by visiting: www.airindustriesgroup.com/contact-us/
Source: Air Industries Group
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