SOURCE: Air Industries Group

Air Industries Group

November 05, 2012 09:00 ET

Air Industries Group, Inc. (the "Company" or "Air Industries") Announces Financial Results for the Three and Nine Months Ended September 30, 2012

Financial Results for the Nine Months Ended September 30, 2012 and 2011

BAY SHORE, NY--(Marketwire - Nov 5, 2012) -  Air Industries Group, Inc. (PINKSHEETS: AIRI) - For the nine months ended September 30, 2012 consolidated net sales were $46,835,000, an increase of $7,857,000 or 20% compared to net sales of $38,978,000 for the prior year. Net sales at Air Industries Machining Corp were $33,314,000, an increase of $2,251,000 or 7% from $31,063,000 for the prior year. Net sales at Welding Metallurgy, Inc were $9,929,000, an increase of $2,014,000 or 25% from $7,915,000 for the prior year. Net sales at Nassau Tool Works for the period of through September 30, 2012 were $3,592,000. Air Industries acquired Nassau Tool Works on June 20, 2012.

These results for the nine months ended September 30, 2012 and 2011 are summarized below:

                   
                   
(all amounts in 000's)   Nine Months Ended Sep't 30,   Increase over prior year  
Net Sales   2012   2011   in $   as a %  
  Air Industries Machining   $ 33,314   $ 31,063   $ 2,251   7 %
  Welding Metallurgy, Inc.     9,929     7,915     2,014   25 %
  Nassau Tool Works     3,592     -     3,592   n/m  
Consolidated   $ 46,835   $ 38,978   $ 7,857   20 %
                         

For the nine months ended September 30, 2012 consolidated operating income was $4,350,000, an increase of $1,167,000 or 37% from $3,183,000 for the prior year. Consolidated net income before tax was $2,791,000, an increase of $1,172,000 or 72% from $1,619,000 in the prior year. Consolidated net income was $1,755,000, an increase of $193,000, or 12% compared with $1,562,000 for the prior year. Earnings per common share were $0.40, a decrease of $(0.04) or (9%) compared with $0.44 for the prior year.

These results for the nine months ended September 30, 2012 and 2011 are summarized below:

                     
(in 000's except per share data)                
    Nine Months Ended Sep't 30,   Increase over prior year  
Consolidated:   2012   2011   in $     as a %  
Net Operating Income   $ 4,350   $ 3,183   $ 1,167     37 %
Net Income Before Tax     2,791     1,619     1,172     72 %
Net Income     1,755     1,562     193     12 %
Net Income Per Share   $ 0.40   $ 0.44   $ (0.04 )   -9 %
                           
  • Consolidated Gross profit was $10,540,000, or 22.5% of sales for 2012 compared with $7,866,000 or approximately 20% of sales for 2011.

  • Consolidated Operating costs were $6,190,000, an increase of $1,507,000 or 32% compared to $4,683,000 for the prior year. Approximately one-half of the increase in operating costs resulted from the inclusion of costs of Nassau Tool Works for the full quarter.

Air Industries has previously announced that the net income reported for the first quarter of 2012 and prior periods has absorbed all of the Company's net operating loss carry-forward for federal and state income tax purposes. For the nine months ended September 30, 2011, the Company accrued a provision for income taxes of only $57,000. For the nine months ended September 30, 2012, the provision for income taxes was $1,036,000, an increase of nearly $1,000,000.

Thus, for the nine months ended September 30, 2012 the Company reported percentage increases in operating income and income before tax of 37% and 72% respectively, but only a 12% percent increase in net income. Net income per share was further reduced by the increase in the number of shares outstanding.

Financial Results for the three months ended September 30, 2012 and 2011:

For the three months ended September 30, 2012, consolidated net sales were $15,558,000, an increase of $2,303,000 or 17% compared to net sales of $13,255,000 for the prior year. Net sales at Air Industries Machining Corp were $9,587,000, a decrease of $(738,000) or (7%) from $10,325,000 for the prior year. Net sales at Welding Metallurgy, Inc were $2,891,000, a decrease of $(39,000) or (1%) from $2,930,000 for the prior year. Net sales at Nassau Tool Works for the three months ended September 30, 2012 were $3,080,000. Air Industries acquired Nassau Tool Works on June 20, 2012.

These results for the three months ended September 30, 2012 and 2011 are summarized below:

                     
(all amounts in 000's)   Three Months Ended Sep't 30,   Increase over prior year  
Net Sales   2012   2011   in $     as a %  
  Air Industries Machining   $ 9,587   $ 10,325   $ (738 )   -7 %
  Welding Metallurgy, Inc.   $ 2,891   $ 2,930   $ (39 )   -1 %
  Nassau Tool Works     3,080     -   $ 3,080     n/m  
Consolidated   $ 15,558   $ 13,255   $ 2,303     17 %
                           

For the three months ended September 30, 2012 consolidated operating income was $1,455,000, an increase of $204,000 or 16% from $1,251,000 for the prior year. Consolidated income before tax was $1,001,000, an increase of $268,000 or 37% from $733,000 in the prior year. Consolidated net income was $614,000, a decrease of $(88,000), or (13%) compared with $702,000 for the prior year. 

Earnings per common share were $0.11, a decrease of $(.09) or approximately (45%) compared with $0.20 for the prior year. Net income per share was further reduced by the increase in the number of shares outstanding.

These results for the three months ended September 30, 2012 and 2011 are summarized below:

                     
                     
(in 000's except per share data)                
    Three Months Ended Sep't 30,   Increase over prior year  
Consolidated:   2012   2011   in $     as a %  
Net Operating Income   $ 1,455   $ 1,251   $ 204     16 %
Net Income before Tax     1,001     733   $ 268     37 %
Net Income     614     702     (88 )   -13 %
Net Income Per Share   $ 0.11   $ 0.20   $ (0.09 )   -45 %
                           

Air Industries has previously announced that the net income reported for the first quarter of 2012 and prior periods has absorbed all of the Company's net operating loss carry-forward for federal and state income tax purposes. For the three months ended September 30, 2011, the Company accrued a provision for income taxes of only $31,000. For the three months ended September 30, 2012, the provision for income taxes was $387,000, an increase of more than $350,000.

Thus, for the three months ended September 30, 2012, the Company reported percentage increases in net operating income and net income before tax of 16% and 37%, respectively, but decreases in net income and net income per share. Net income per share was further reduced by the increase in the number of shares outstanding.

  • Consolidated Gross profit was $3,834,000, or approximately 24.6% of sales for 2012 compared with $2,835,000 or approximately 21.4% of sales for 2011.

  • Consolidated Operating costs were $2,379,000 an increase of $795,000 or 50% compared to $1,584,000 for the prior year. Nearly all of the increase in operating costs resulted from the inclusion of Nassau Tool Works costs for the quarter.

The Company's Condensed Consolidated Financial Statements for the nine months ended September 30, 2012 and 2011, together with the notes thereto including the review report of its independent auditors, Rotenberg Meril Solomon Bertiger & Guttilla, P.C. ("RMSBG") are attached to this press release. All readers are urged to read the financial statements, including the footnotes, in their entirety.

Condensed Consolidated Financial Statements are available here: http://media.marketwire.com/attachments/201211/53285_AirIndustriesGroupIncSeptember2012FinancialsFinal.pdf

Mr. Peter Rettaliata, Chief Executive Officer of Air Industries, commented: "The dramatic growth of revenue and profits of the first half of 2012 slowed in the third quarter. We expected and had previously announced that this was probable. Our consolidated results continue to show strong increases in revenue, operating income and pre-tax income over the prior year. But these increases did not translate into proportionate increases in net income and earnings per share due to our having exhausted our net operating loss to offset our taxable income.

"There is considerable uncertainty about the size and timing of looming cuts to the Defense budget. This affects the entire industry, and our customers have been cautious. We believe that our position on critical aircraft platforms and our large presence in the after-market, that is replacement and repair parts, a position that has been greatly bolstered by our acquisition of Nassau Tool Works, will shelter Air Industries from any significant reductions in the defense budget. We recently announced that our largest subsidiary Air Industries Machining entered into a new five-year agreement with Sikorsky Aircraft Corp. This agreement includes price increases on some of our major products and the inclusion of new products that we do not now produce. We expect that these increased prices may offset any reduction in volume during 2013 and lead to increased earnings and cash flow. We have also been seeking and have won new contracts for commercial aircraft production."

Mr. Rettaliata continued: "We have been moving quickly on integrating Nassau Tool Works, expanding their engineering capability and rationalizing production by shifting work between our subsidiaries for maximum efficiency. During the quarter we made investments of approximately $1.0 million in new equipment for both Nassau Tool Works and Welding Metallurgy. This new equipment expands the capabilities of both companies. We previously announced that the acquisition of Nassau Tool Works resulted in a significant increase in our 'quoting' activity and this continues."

Mr. Rettaliata concluded: "All of our facilities are located on Long Island and thankfully none were damaged during the recent hurricane. We did experience power outages and had to close our factories for several days. We do not anticipate any long lasting problems."

ABOUT AIR INDUSTRIES GROUP, INC.
Air Industries Group, Inc. (PINKSHEETS: 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, the ability to realize firm backlog 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.

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