BAY SHORE, NY--(Marketwired - Nov 14, 2014) - Air Industries Group (
Peter Rettaliata, President of Air Industries, commented: "Third quarter results were an improvement over the prior quarter as we generated marginal pre-tax income of $299,000 after a pre-tax loss of $109,000 for the second quarter. Our EBITDA during the first nine months of 2014 more than covered our dividend and we anticipate that the core earnings power of our businesses will become more apparent in our fourth quarter and in 2015.
"Air Industries responded to the realities of constrained military spending by increasing its focus on the commercial aerospace sector. As we previously announced we have been awarded a large commercial contract for products associated with the Pratt & Whitney Geared Turbofan jet engine, the largest individual contract we have ever received. We have manufactured the first articles of this complicated and difficult product and we look forward to increased production rates near the end of the 3rd quarter of 2015 and beyond.
"Reduced military spending particularly impacted Nassau Tool Works during the third quarter due to a delay in an expected Navy landing gear contract. This delay shifted delivery dates from the third to the fourth quarter of 2014 and into 2015, improving Nassau Tool Works' backlog for 2015 and resulting in expectations for a rebound in revenue and profit in 2015. Welding Metallurgy also increased its backlog for 2015 as product 'bookings' for 2015 through September 2014 increased significantly to well above levels of September 2013.
"We are confident that our results will improve in the fourth quarter and are also increasingly confident about 2015 due to increases in our backlog as a result of recent contract awards. Based upon near term projections predicated on orders in hand, we expect EBITDA to improve in the fourth quarter of this year, and this trend should continue next year.
"Reduced military spending has reduced revenue and profits for our industry, benefitting our acquisition program. We have been able to close acquisitions at attractive and accretive prices. As previously announced, we recently acquired Eur-Pac Corporation of Waterbury Connecticut, and Electronic Connection Corporation of Bloomfield, Connecticut. We anticipate combining these operations at the Waterbury facility. On October 1, 2014 we announced the acquisition of AMK Technical Services of South Windsor Connecticut from Dynamic Materials Corporation. AMK provides sophisticated welding and machining services for GE, Pratt & Whitney, Honeywell, Rolls Royce, and others, expanding our presence in commercial jet engines and ground turbines.
"We previously announced a possible acquisition in the Southwest and while we continue to be in discussions with this company a transaction is not imminent as the seller is not willing to engage in a transaction that allows us to adhere to our acquisition metrics. We are in advanced stage discussions with a company specializing in machined parts for aircraft engines and in initial discussions with additional acquisition opportunities."
Set forth at the end of this release is certain information from Air Industries' condensed consolidated balance sheets as of September 30, 2014 (unaudited) and December 31, 2013, and its condensed consolidated statements of income for the three and nine months ended September 30, 2014 and 2013 (unaudited).
Air Industries will host a conference call on Monday November 17, 2014 at 10:00 a.m. Shareholders and other interested parties can participate by dialing in to the following numbers:
Toll Free (US & Canada) 1-888-556-4997
International Toll 1-719-325-2308
Access Code 6235296
EBITDA
The Company uses EBITDA as a supplemental liquidity 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.
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. Air Industries designs and manufactures flight critical products including flight safety parts, landing gear and components, arresting gear, flight controls, sheet metal fabrications and ground support equipment.
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 and projected backlog, 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.
| AIR INDUSTRIES GROUP | ||||||||
| Condensed Consolidated Balance Sheets | ||||||||
| September 30, | December 31, | |||||||
| 2014 | 2013 | |||||||
| ASSETS | (Unaudited) | |||||||
| Current Assets | ||||||||
| Cash and Cash Equivalents | $ | 1,568,000 | $ | 561,000 | ||||
| Accounts Receivable, Net of Allowance for Doubtful Accounts of $1,084,000 and $783,000 | 8,806,000 | 8,584,000 | ||||||
| Inventory | 30,686,000 | 26,222,000 | ||||||
| Deferred Tax Asset | 1,310,000 | 1,051,000 | ||||||
| Prepaid Expenses and Other Current Assets | 209,000 | 510,000 | ||||||
| Total Current Assets | 42,579,000 | 36,928,000 | ||||||
| Property and Equipment, net | 5,743,000 | 6,523,000 | ||||||
| Capitalized Engineering Costs - net of Accumulated Amortization of $4,184,000 and $3,879,000 | 693,000 | 752,000 | ||||||
| Deferred Financing Costs, net, deposit and other assets | 680,000 | 605,000 | ||||||
| Intangible Assets, net | 3,854,000 | 4,726,000 | ||||||
| Deferred Tax Asset | 947,000 | 185,000 | ||||||
| Goodwill | 4,620,000 | 453,000 | ||||||
| TOTAL ASSETS | $ | 59,116,000 | $ | 50,172,000 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities | ||||||||
| Notes Payable and Capitalized Lease Obligations - Current Portion | $ | 16,315,000 | $ | 14,969,000 | ||||
| Accounts Payable and Accrued Expenses | 6,280,000 | 6,855,000 | ||||||
| Lease Impairment - Current | 60,000 | 71,000 | ||||||
| Deferred Gain on Sale - Current Portion | 38,000 | 38,000 | ||||||
| Customer Deposit | 174,000 | 251,000 | ||||||
| Dividends Payable | - | 717,000 | ||||||
| Income Taxes Payable | 382,000 | 1,496,000 | ||||||
| Total Current Liabilities | 23,249,000 | 24,397,000 | ||||||
| Long-term liabilities | ||||||||
| Notes Payable and Capitalized Lease Obligation - Net of Current Portion | 3,191,000 | 2,527,000 | ||||||
| Lease Impairment - Net of Current Portion | 12,000 | 56,000 | ||||||
| Deferred Gain on Sale - Net of Current Portion | 418,000 | 447,000 | ||||||
| Deferred Rent | 1,189,000 | 1,132,000 | ||||||
| TOTAL LIABILITIES | 28,059,000 | 28,559,000 | ||||||
| Stockholders' Equity | ||||||||
| Preferred Stock Par Value $.001-Authorized 1,000,000 shares at September 30, 2014 and December 31, 2013, respectively, none issued and outstanding at September 30, 2014 and December 31, 2013, respectively | - | - | ||||||
| Common Stock - Par Value $.001- Authorized 25,000,000 shares at September 30, 2014 and December 31, 2013, respectively, 7,100,491 and 5,862,346 Shares Issued and Outstanding as of September 30, 2014 and December 31, 2013, respectively | 7,000 | 6,000 | ||||||
| Additional Paid-In Capital | 44,905,000 | 36,799,000 | ||||||
| Accumulated Deficit | (13,855,000 | ) | (15,192,000 | ) | ||||
| TOTAL STOCKHOLDERS' EQUITY | 31,057,000 | 21,613,000 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 59,116,000 | $ | 50,172,000 | ||||
| AIR INDUSTRIES GROUP | |||||||||||||||
| Condensed Consolidated Statements of Income | |||||||||||||||
| (Unaudited) | |||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||
| September 30, | September 30, | ||||||||||||||
| 2014 | 2013 | 2014 | 2013 | ||||||||||||
| Net Sales | $ | 15,154,000 | $ | 16,052,000 | $ | 43,967,000 | $ | 45,016,000 | |||||||
| Cost of Sales | 11,597,000 | 12,309,000 | 33,012,000 | 33,996,000 | |||||||||||
| Gross Profit | 3,557,000 | 3,743,000 | 10,955,000 | 11,020,000 | |||||||||||
| Operating Expenses | 2,997,000 | 2,712,000 | 8,909,000 | 7,733,000 | |||||||||||
| Income from operations | 560,000 | 1,031,000 | 2,046,000 | 3,287,000 | |||||||||||
| Interest and financing costs | (260,000 | ) | (281,000 | ) | (867,000 | ) | (1,027,000 | ) | |||||||
| Other (expense) income, net | (1,000 | ) | (11,000 | ) | (64,000 | ) | (97,000 | ) | |||||||
| Income before benefit from income taxes | 299,000 | 739,000 | 1,115,000 | 2,163,000 | |||||||||||
| Benefit from income taxes | (81,000 | ) | (1,795,000 | ) | (222,000 | ) | (876,000 | ) | |||||||
| Net income | $ | 380,000 | $ | 2,534,000 | $ | 1,337,000 | $ | 3,039,000 | |||||||
| Income per share - basic | $ | 0.05 | $ | 0.44 | $ | 0.21 | $ | 0.53 | |||||||
| Income per share - diluted | $ | 0.05 | $ | 0.43 | $ | 0.20 | $ | 0.52 | |||||||
| Weighted average shares outstanding - basic | 7,092,655 | 5,711,093 | 6,415,402 | 5,711,093 | |||||||||||
| Weighted average shares outstanding - diluted | 7,388,686 | 5,854,015 | 6,711,742 | 5,828,037 | |||||||||||
Contact Information:
Contact Information
Air Industries Group
631.881.4913