Air Industries Group (NYSE American: AIRI), a leading manufacturer of precision components and assemblies for large aerospace and defense prime contractors, today reported preliminary earnings results for the fourth quarter and full-year of 2023 along with its initial 2024 business outlook.
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 if not slightly higher than 2023 levels with Adjusted EBITDA in 2024 being meaningfully better than 2023.
- Backlog, which represents the value of all undelivered funded orders received, stood at $98.3 million as of December 31, 2023, marking a 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 in 2023, compared to $448,000 in 2022.
- In 2023, investments of $2,119,000 were made to increase product efficiency, speed and expand manufacturing capability.
- As of December 31, 2023, total indebtedness under the Company’s Current Credit facility was $15,849,000 reflecting a reduction of $2,889,000 from 2022, with all financial and business covenants being met.
- 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.