Air Industries (AIRI) - 2024 Q3 - Quarterly Report

Financial Performance - Net sales for the three months ended September 30, 2024, were $12,555,000, an increase of$262,000 or 2.1% compared to $12,293,000 for the same period in 2023[121] - Gross profit for the three months ended September 30, 2024, was$1,941,000, representing a gross profit margin of 15.5%, up from 10.0% in the same period of 2023[125] - Net loss for the three months ended September 30, 2024, was $404,000, significantly improved from a net loss of$1,299,000 in the same period of 2023[128] - For the nine months ended September 30, 2024, consolidated net sales were $40,188,000, an increase of$2,141,000 or 5.6% compared to $38,047,000 for the same period in 2023[130] - Gross profit for the nine months ended September 30, 2024, was$6,491,000, an increase from $5,278,000 for the same period in 2023, with a gross profit percentage rising to 16.2$812,000, significantly improved from a net loss of $2,312,000 in the same period of 2023[136] - EBITDA for the nine months ended September 30, 2024, was$2,620,000, up from $1,500,000 in 2023[139] Operating Expenses - Operating expenses decreased to$1,874,000 for the three months ended September 30, 2024, down from $2,024,000 in 2023, resulting in a reduction in operating expenses as a percentage of net sales to 14.9$5,931,000 for the nine months ended September 30, 2024, down from $6,160,000 in 2023, representing 14.8$1,418,000 for the nine months ended September 30, 2024, from $1,472,000 in 2023, despite an increase in the average interest rate to 7.83$186,000 as of September 30, 2024, down 46.2% from $346,000 at the end of 2023, indicating a need for improved cash management[120] - Cash flow from operating activities generated$508,000 for the nine months ended September 30, 2024, a decrease from $7,093,000 in 2023[150] - Cash used in investing activities was$1,493,000 for the nine months ended September 30, 2024, compared to $1,867,000 in 2023, focused on enhancing production efficiency[152] - Cash provided by financing activities was$825,000 for the nine months ended September 30, 2024, contrasting with cash used of $4,767,000 in 2023[154] Future Outlook and Investments - Total unfilled contract values amounted to$175.7 million as of September 30, 2024, including a backlog of $105.2 million, indicating strong future sales potential[117] - The company expects to invest an additional$750,000 in capital equipment during the remainder of 2024 to enhance competitiveness[153] Operational Efficiency - The company has maintained a highly trained team of over 180 professionals, focusing on process improvements and capital equipment investments to enhance production capacity and efficiency[114] - The company strategically operates two state-of-the-art manufacturing centers in the U.S., ensuring rigorous oversight and adherence to quality standards[114] Customer Composition - The customer composition for 2024 shows RTX at 27.8% of net sales, Lockheed at 23.9%, and Northrop at 18.3%, reflecting a shift in customer reliance compared to 2023[123] Debt and Financial Obligations - As of September 30, 2024, outstanding indebtedness under the Current Credit Facility was $16,838,000, with a debt service requirement of approximately$68,000 monthly until maturity on December 30, 2025[137]