Air Industries Group Announces Preliminary Unaudited Financial Results for the Twelve Months Ended December 31, 2022
April 19 2023 - 5:05PM
Business Wire
Air Industries Group (NYSE American: AIRI) (“Air
Industries” or the “Company”), an integrated Tier 1 manufacturer of
precision assemblies and components for mission-critical aerospace
and defense applications, and a prime contractor to the U.S.
Department of Defense, today announced its preliminary, unaudited
financial results for the year ended December 31, 2022.
PRELIMINARY & UNAUDITED FINANCIAL RESULTS:
As of the date of this press release, the following reflects
preliminary and unaudited financial data for the year ended
December 31, 2022:
- Consolidated net sales revenues in 2022 are expected to
approximate $53.2 million, a decrease of 9.7% as compared to the
$58.9 million achieved in 2021. This represents no change to the
preliminary net sales amounts discussed on the Company’s year-end
conference call held on April 4, 2023.
- Consolidated gross profit in 2022 is expected to approximate
$7.5 million or 14.1% of sales as compared to $10.2 million or
17.3% of sales in fiscal 2021. Total gross inventory of $35.5
million as of December 31, 2022 is expected to be reported. Total
gross inventory as of December 31, 2021 was $32.7 million.
- Total operating expenses in 2022 is expected to approximate
$7.7 million as compared to $7.8 million or a reduction of
approximately $0.1 million.
- Net loss in 2022 is expected to be approximately $1.1 million
as compared to a profit of $1.6 million in 2021.
- Adjusted EBITDA, a Non-GAAP financial measure, is expected to
approximate $3.3 million in 2022 as compared to the $6.3 million
reported in 2021. A reconciliation of EBITDA to net income is shown
in the table below.
- The Company generated cash flows from operations in 2022 of
$448,000 and invested $2.4 million in new property, plant and
equipment. In 2021, the Company generated cash flows from operating
activities of $4.1 million and invested $1.4 million in new
property, plant and equipment.
- Total indebtedness was $25.2 million (consisting substantially
of $18.7 million owed to Webster Bank pursuant to a Loan Facility
and $6.2 million owed in the form of subordinated notes payable due
July 1, 2026 to related parties, specifically Michael Taglich (the
Company’s Chairman) and Robert Taglich (a Director), and their
affiliates). The Company’s Loan Facility (which is described in
detail in prior SEC filings) provides for up to a $20.0 million
Revolving Line of Credit, a $5.0 million Term Loan and a $2.0
million Equipment Line of Credit, which when drawn upon is added to
the balance of the Term Loan. The Company is currently not in
compliance with the covenants in the Loan Facility requiring that
the Company issue its financial statements no later than 90 days
after the end of the Company’s fiscal year. The Company anticipates
that it will receive a waiver for this covenant before the Form
10-K is issued.
- As of December 31, 2022, the Company’s total 18-month firm
backlog is $ 67.9 million which compared to $75.0 million for
December 31, 2021.
- There are no new legal proceedings or substantive changes to
prior legal matters since the Company filed its Form 10-Q for the
three and nine months ended September 30, 2022 which was filed with
the SEC on November 14, 2022.
Table of Reconciliation of Net Income to Adjusted EBITDA (a
Non-GAAP financial measure):
Preliminary - Unaudited Adjusted EBITDA Twelve
Months Ended December 31, 2022 Net Income (Loss)
$
(1,076,000
)
Add-backs to EBITDA Interest Expense & Bank Charges
1,338,000
Taxes
-
Depreciation & Amortization
2,587,000
EBITDA
$
2,849,000
Add-backs to Adjusted EBITDA Stock Compensation
526,000
Adjusted EBITDA
$
3,375,000
Adjusted EBITDA Twelve
Months Ended December 31, 2021 Net Income (Loss)
$
1,627,000
Add-backs to EBITDA Interest Expense & Bank Charges
1,262,000
Taxes
2,000
Depreciation & Amortization
2,953,000
EBITDA
$
5,844,000
Add-backs to Adjusted EBITDA Stock Compensation
443,000
Adjusted EBITDA
$
6,287,000
The Company also announced that it has filed an Amended Form
12b-25/A with the Securities and Exchange Commission (“SEC”)
indicating that it needs additional time to respond to complete its
financial statement preparation and review process. The Company is
continuing its efforts to file its Annual Report on Form 10-K as
soon as reasonably practicable.
ABOUT AIR INDUSTRIES GROUP is an integrated Tier 1
manufacturer of precision assemblies and components for
mission-critical aerospace and defense applications, and a prime
contractor to the U.S. Department of Defense.
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.
[Other important factors that may cause actual results to differ
materially from those in the forward-looking statements include,
but are not limited to, the Company’s ability to file its Form 10-K
within the fifteen-day extension permitted by the rules of the U.S.
Securities and Exchange Commission.] 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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Air Industries Group Investor Relations 631.328.7078
ir@airindustriesgroup.com
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