Air Industries (AIRI) closed the most recent trading day at $3.11, moving +1.63% from the previous trading session. The stock outpaced the S&P 500's daily loss of 0.5%. Elsewhere, the Dow saw a downswing of 0.38%, while the tech-heavy Nasdaq depreciated by 0.5%. Prior to today's trading, shares of the maker of parts for the aerospace industry and defense contractors had lost 3.16% lagged the Aerospace sector's gain of 3.85% and the S&P 500's gain of 2.74%.The upcoming earnings release of Air Industries will ...

Financial Data and Key Metrics Changes - Consolidated net sales for Q2 2025 were $12.7 million, a decrease of approximately $800,000 or 6.7% compared to Q2 2024 [9] - Gross profit was $2 million, representing 16% of sales for Q2 2025 [9] - Adjusted EBITDA for the first half of 2025 was $1.469 million, a decrease of $306,000 or 17% from the prior year [10] - The company reported a net loss of $422,000 or $0.11 per share in 2025, compared to net income of $298,000 or $0.09 per share in 2024 [10] Business Line Data and Key Metrics Changes - The company faced delays in customer approvals and extended lead times from subcontractors, impacting overall results [4] - Cost-cutting initiatives, including a workforce reduction, are expected to save approximately $1 million annually [5] - The backlog grew to record levels, indicating sustained demand for products, with significant contracts such as a $5 million order for landing gear components for the B-52 aircraft [6] Market Data and Key Metrics Changes - The company noted that long lead times for raw materials and complex product manufacturing mean that sales from the backlog will primarily be realized in fiscal 2026 and beyond [6][7] - The business development team has been actively pursuing new opportunities, particularly following the Paris Air Show [7] Company Strategy and Development Direction - The company is focused on recovering from decreased revenue streams with legacy customers while reinforcing relationships with existing clients and expanding into new markets [12] - Recent accomplishments include receiving a significant long-term agreement from Northrop Grumman and increasing content on the CH-53K helicopter [13] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the disappointing results for Q2 2025 but expressed confidence in the long-term business outlook despite recent headwinds [5] - The company anticipates that the fourth quarter of 2025 will be the strongest quarter of the year [5] - Management emphasized that the backlog is healthy and that delays in customer approvals are temporary [32] Other Important Information - The company successfully completed an at-the-market offering, raising nearly $4 million, which enhances liquidity and reduces net debt [11] - Total debt has declined by over $1 million, while inventory has increased by about $1.3 million [11] Q&A Session Summary Question: Concerns about credit facility and liquidity - Management is in discussions with the current lender and is confident about extending the credit facility [19][20] Question: Nature of recent capital raise - The capital raise was part of a planned process initiated in December 2024, not solely opportunistic [21] Question: European sales potential - The company does not have significant European customers but is optimistic about potential sales due to increased European defense spending [23][26] Question: Clarification on declining sales - Sales decline is attributed to timing issues with customer approvals and delays in first articles [32][33] Question: Consideration of selling the company - Management stated that while sales have been stagnant, there has been growth in certain operations, and they are open to opportunities that benefit shareholders [36][39] Question: Backlog conversion rates - The backlog consists of firm and full backlog, with a significant portion being firm orders that cannot be easily canceled [41][43] Question: Future of manned aircraft vs. drones - Management believes that manned aircraft will continue to play a crucial role alongside drones, as they are not expected to be replaced in the near future [46][48]

[Special Note Regarding Forward-Looking Statements](index=3&type=section&id=SPECIAL%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) The report contains forward-looking statements subject to uncertainties, and actual results may differ materially from expectations - The report contains forward-looking statements that are predictive and subject to uncertainties, and actual results may differ materially from expectations[8](index=8&type=chunk)[9](index=9&type=chunk) Investors are cautioned not to place undue reliance on these statements and should review risk factors in the Annual Report on Form 10-K and other SEC filings[10](index=10&type=chunk) [PART I. Financial Information](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) Presents unaudited condensed consolidated financial statements and notes, detailing financial position and performance for specified periods [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Provides a snapshot of the company's assets, liabilities, and equity as of June 30, 2025, and December 31, 2024 | Metric | June 30, 2025 ($ thousands, unaudited) | December 31, 2024 ($ thousands) | | :--------------------------------- | :----------------------------------- | :------------------------------ | | Cash | $507 | $753 | | Total Current Assets | $38,133 | $39,187 | | Total Assets | $50,377 | $51,011 | | Total Current Liabilities | $28,367 | $27,411 | | Total Liabilities | $35,111 | $36,063 | | Total Stockholders' Equity | $15,266 | $14,948 | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Details the company's revenues, expenses, and net income (loss) for the three and six months ended June 30, 2025, and 2024 | Metric | 3 Months Ended June 30, 2025 ($ thousands) | 3 Months Ended June 30, 2024 ($ thousands) | 6 Months Ended June 30, 2025 ($ thousands) | 6 Months Ended June 30, 2024 ($ thousands) | | :--------------------------------- | :--------------------------------- | :--------------------------------- | :--------------------------------- | :--------------------------------- | | Net Sales | $12,659 | $13,572 | $24,802 | $27,633 | | Gross Profit | $2,028 | $2,644 | $4,062 | $4,550 | | Operating Expenses | $2,020 | $1,892 | $4,800 | $4,057 | | Net (Loss) Income | $(422) | $298 | $(1,410) | $(408) | | (Loss) Income per share - Basic | $(0.11) | $0.09 | $(0.38) | $(0.12) | [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) Outlines the changes in the company's equity accounts, including net income/loss and stock transactions, for the period - Total stockholders' equity increased from **$14,948,000** at January 1, 2025, to **$15,266,000** at June 30, 2025, primarily due to common stock issued for cash (**$855,000**) and stock-based compensation (**$592,000** for six months), partially offset by a net loss of **$988,000** for the six months ended March 31, 2025, and **$422,000** for the three months ended June 30, 2025[20](index=20&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Reports the cash inflows and outflows from operating, investing, and financing activities for the six months ended June 30, 2025, and 2024 | Cash Flow Activity | Six Months Ended June 30, 2025 ($ thousands) | Six Months Ended June 30, 2024 ($ thousands) | | :--------------------------------- | :----------------------------------- | :----------------------------------- | | Net Cash Provided by Operating Activities | $1,870 | $334 | | Net Cash Used in Investing Activities | $(2,113) | $(1,224) | | Net Cash (Used in) Provided by Financing Activities | $(3) | $791 | | Net Decrease in Cash | $(246) | $(99) | | Cash at End of Period | $507 | $247 | - Net cash provided by operating activities increased significantly to **$1,870,000** for the six months ended June 30, 2025, compared to **$334,000** in the prior year, primarily due to collections of accounts receivable and an increase in non-cash expenses, partially offset by the net loss and an increase in inventory[22](index=22&type=chunk)[140](index=140&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Provides detailed explanations and additional information supporting the condensed consolidated financial statements [Note 1. Organization and Basis of Presentation](index=10&type=section&id=Note%201.%20ORGANIZATION%20AND%20BASIS%20OF%20PRESENTATION) Describes the company's operations, going concern considerations, and management's plans to address financial challenges - As of June 30, 2025, the company was in default of its minimum Fixed Charge Coverage Ratio (**0.76x** vs. **1.05x** required) and its Current Credit Facility expires on December 30, 2025, raising substantial doubt about its ability to continue as a going concern[29](index=29&type=chunk)[34](index=34&type=chunk) - Management plans to increase revenues, reduce costs (estimated **$1.0 million** annually starting Q3 2025), negotiate debt extensions, and raise capital through common stock sales, having received **$1,243,000** by June 30, 2025, and an additional **$3,623,000** subsequent to the period[30](index=30&type=chunk)[31](index=31&type=chunk)[110](index=110&type=chunk) - The company's funded backlog as of June 30, 2025, was **$128.5 million**, with anticipated sales increases not expected until early next year due to long lead times for raw materials and manufacturing[30](index=30&type=chunk) [Note 2. Summary of Significant Accounting Policies](index=11&type=section&id=Note%202.%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) Outlines the key accounting principles and policies used in preparing the financial statements, including inventory and revenue recognition Inventory Valuation | Inventory Category | June 30, 2025 ($ thousands) | December 31, 2024 ($ thousands) | | :----------------- | :-------------------------- | :------------------------------ | | Raw Materials | $6,754 | $6,318 | | Work In Progress | $14,373 | $13,028 | | Semi-Finished Goods | $8,043 | $8,805 | | Final-Finished Goods | $1,017 | $660 | | Total Inventory | $30,187 | $28,811 | Customer Concentration | Customer (Percentage of Net Sales) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | RTX | 44.3% | 25.2% | 36.7% | 29.3% | | Lockheed Martin | 27.5% | 25.4% | 33.4% | 25.6% | | Northrop | 8.0% | 30.5% | 8.1% | 20.6% | Revenue by Type | Revenue Type | 3 Months Ended June 30, 2025 ($ thousands) | 3 Months Ended June 30, 2024 ($ thousands) | 6 Months Ended June 30, 2025 ($ thousands) | 6 Months Ended June 30, 2024 ($ thousands) | | :----------- | :--------------------------------- | :--------------------------------- | :--------------------------------- | :--------------------------------- | | Military | $6,831 | $8,920 | $15,171 | $19,304 | | Commercial | $5,828 | $4,652 | $9,631 | $8,329 | | Total | $12,659 | $13,572 | $24,802 | $27,633 | [Note 3. Property and Equipment](index=15&type=section&id=Note%203.%20PROPERTY%20AND%20EQUIPMENT) Details the company's property and equipment, including gross values, accumulated depreciation, and net book values Property and Equipment, Net | Category | June 30, 2025 ($ thousands) | December 31, 2024 ($ thousands) | | :----------------------- | :-------------------------- | :------------------------------ | | Total Property and Equipment (Gross) | $48,151 | $46,188 | | Accumulated Depreciation | $(38,416) | $(37,379) | | Property and Equipment, net | $9,735 | $8,809 | - Depreciation expense for the six months ended June 30, 2025, was approximately **$1,187,000**, an increase from **$1,022,000** in the prior year period[56](index=56&type=chunk) [Note 4. Operating Lease Liabilities](index=15&type=section&id=Note%204.%20OPERATING%20LEASE%20LIABILITIES) Presents information on operating lease costs, cash payments, and key lease terms as of June 30, 2025 Operating Lease Costs and Cash Paid | Metric | 3 Months Ended June 30, 2025 ($ thousands) | 3 Months Ended June 30, 2024 ($ thousands) | 6 Months Ended June 30, 2025 ($ thousands) | 6 Months Ended June 30, 2024 ($ thousands) | | :--------------------------------- | :--------------------------------- | :--------------------------------- | :--------------------------------- | :--------------------------------- | | Operating lease cost | $283 | $319 | $561 | $640 | | Cash paid for operating leases | $239 | $266 | $512 | $531 | - As of June 30, 2025, the weighted average remaining lease term for operating leases is **1.25 years**, with a weighted average discount rate of **9.50%**[59](index=59&type=chunk) [Note 5. Debt](index=16&type=section&id=Note%205.%20DEBT) Provides a breakdown of the company's debt obligations, including credit facilities, finance leases, and related party notes Debt Outstanding | Debt Type | June 30, 2025 ($ thousands) | December 31, 2024 ($ thousands) | | :--------------------------------- | :-------------------------- | :------------------------------ | | Current Credit Facility – Revolver | $12,094 | $12,905 | | Current Credit Facility – Term Loan | $6,380 | $5,225 | | Solar Credit Facility | $970 | $970 | | Finance lease obligations | $898 | $1,007 | | Loans Payable - financed assets | $9 | $14 | | Subtotal (Third Party Debt) | $20,351 | $20,121 | | Subordinated Notes - Related Party | $4,871 | $6,162 | | Total Debt Outstanding | $25,222 | $26,283 | - The company was in default of its Fixed Charge Coverage Ratio (**0.76x** vs. **1.05x** required) as of June 30, 2025, and the Current Credit Facility expires on December 30, 2025, resulting in the entire Term Loan being classified as short-term[63](index=63&type=chunk)[66](index=66&type=chunk) - Related Party Notes decreased by **$1,291,000** during the six months ended June 30, 2025, due to principal payments made with funds raised from the At The Market Offering[79](index=79&type=chunk)[80](index=80&type=chunk) [Note 6. Stockholders' Equity](index=20&type=section&id=Note%206.%20STOCKHOLDERS'%20EQUITY) Details changes in stockholders' equity, including common stock issuances and restricted stock unit vesting - The company issued **307,806 shares** of common stock for gross proceeds of **$1,243,000** through an At The Market (ATM) offering during the six months ended June 30, 2025[85](index=85&type=chunk) An additional **905,787 shares** were sold in July 2025 for gross proceeds of **$3,623,000**[86](index=86&type=chunk) - During the second quarter of 2025, **95,210 Restricted Stock Units (RSUs)** vested, resulting in the issuance of **57,192 shares** of common stock after withholding shares for tax obligations[84](index=84&type=chunk)[94](index=94&type=chunk) [Note 7. Stock Options and Restricted Stock Units](index=21&type=section&id=Note%207.%20STOCK%20OPTIONS%20AND%20RESTRICTED%20STOCK%20UNITS) Discusses the company's equity incentive plan, stock-based compensation expense, and unrecognized compensation costs - Shareholders approved an amendment to the 2022 Equity Incentive Plan, increasing the number of authorized shares by **250,000** to a total of **900,000 shares**[87](index=87&type=chunk) - Stock-based compensation expense for employees and directors from stock options was **$22,000** for the six months ended June 30, 2025, compared to **$36,000** in the prior year[89](index=89&type=chunk) - As of June 30, 2025, there was **$681,000** of unrecognized compensation cost related to non-vested RSUs, to be recognized over a remaining weighted average vesting period of **1.8 years**[95](index=95&type=chunk) [Note 8. Commitments and Contingencies](index=22&type=section&id=Note%208.%20COMMITMENTS%20AND%20CONTINGENCIES) Addresses the company's legal actions and other potential future obligations - The company is involved in a legal action with Contract Pharmacal Corp. relating to a sublease, where Contract Pharmacal is seeking damages of **$700,000**[96](index=96&type=chunk) The company disputes the validity of these claims and intends to continue its defense[96](index=96&type=chunk) [Note 9. Income Taxes](index=23&type=section&id=Note%209.%20INCOME%20TAXES) Explains the company's income tax provision, effective tax rate, and valuation allowance against deferred tax assets - The company recorded **no income tax expense** for the three and six months ended June 30, 2025 and 2024, due to an estimated annual effective tax rate of **zero** and a full valuation allowance against its net deferred tax assets[98](index=98&type=chunk)[99](index=99&type=chunk) [Note 10. Segment Information](index=23&type=section&id=Note%2010.%20SEGMENT%20INFORMATION) States that the company operates as a single segment, with all revenues and assets located in the United States - The company operates as **one operating segment**, with its Chief Executive Officer serving as the Chief Operating Decision Maker (CODM) who reviews consolidated financial information[100](index=100&type=chunk) All revenues and long-lived tangible assets are located in the United States[102](index=102&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Provides management's perspective on the company's financial condition, results of operations, liquidity, and capital resources [Business Overview](index=24&type=section&id=Business%20Overview) Describes the company's core business as a manufacturer of precision components for aerospace and defense, highlighting key products and market position - Air Industries Group is a leading manufacturer of precision components and assemblies for large aerospace and defense contractors, with products used in mission-critical operations for the U.S. government, foreign governments, and commercial airlines[105](index=105&type=chunk)[106](index=106&type=chunk) - The company's products are used in high-profile platforms and programs including the F-18 Hornet, E-2 Hawkeye, UH-60 Black Hawk Helicopters, Geared Turbo-Fan (GTF) Engines, CH-53 Helicopter, F-35 Lighting II, and F-15 Eagle Tactical Fighter[107](index=107&type=chunk) - As of June 30, 2025, the company had total unfilled contract values of **$272.9 million**, including a **$128.5 million** backlog, providing a foundation for future growth[111](index=111&type=chunk) Significant improvement in sales and profitability is expected to begin in early 2026 due to long lead times[111](index=111&type=chunk) [Results of Operations](index=25&type=section&id=RESULTS%20OF%20OPERATIONS) Analyzes the company's financial performance, including net sales, gross profit, and net income (loss), for the reported periods [Results of Operations for the three months ended June 30, 2025](index=25&type=section&id=Results%20of%20Operations%20for%20the%20three%20months%20ended%20June%2030,%202025) Details the financial performance for the three-month period, including sales, gross profit, and net income (loss) comparisons Three Months Ended June 30, 2025 vs 2024 | Metric | 3 Months Ended June 30, 2025 ($ thousands) | 3 Months Ended June 30, 2024 ($ thousands) | Change ($ thousands) | Percent Change | | :-------------------- | :--------------------------------- | :--------------------------------- | :------------------- | :------------- | | Net Sales | $12,659 | $13,572 | $(913) | -6.73% | | Gross Profit | $2,028 | $2,644 | $(616) | -23.30% | | Gross Profit % | 16.0% | 19.5% | -3.5% | - | | Operating Expenses | $2,020 | $1,892 | $128 | 6.77% | | Net (Loss) Income | $(422) | $298 | $(720) | -241.61% | - The decrease in gross margin was attributed to changes in sales across major platforms, shifts in product mix, and underutilization of personnel[117](index=117&type=chunk) Platform or Program Percentage of Net Sales (3 Months) | Platform or Program (Percentage of Net Sales) | 2025 | 2024 | | :-------------------------------------------- | :--- | :--- | | Geared Turbo-Fan Engine | 37.0% | 20.2% | | UH-60 Black Hawk Helicopter | 13.9% | 18.1% | | CH-53 Helicopter | 16.7% | 5.4% | | E-2D Hawkeye | 10.5% | 32.8% | | F-35 Lightning II | 5.7% | 2.8% | | F-18 Hornet | 0.2% | 1.0% | | All other platforms | 16.0% | 19.7% | [Results of Operations for the six months ended June 30, 2025](index=27&type=section&id=Results%20of%20Operations%20for%20the%20six%20months%20ended%20June%2030,%202025) Presents a comparative analysis of financial results for the six-month period, focusing on sales, gross profit, and net loss Six Months Ended June 30, 2025 vs 2024 | Metric | 6 Months Ended June 30, 2025 ($ thousands) | 6 Months Ended June 30, 2024 ($ thousands) | Change ($ thousands) | Percent Change | | :-------------------- | :--------------------------------- | :--------------------------------- | :------------------- | :------------- | | Net Sales | $24,802 | $27,633 | $(2,831) | -10.24% | | Gross Profit | $4,062 | $4,550 | $(488) | -10.73% | | Gross Profit % | 16.4% | 16.5% | -0.1% | - | | Operating Expenses | $4,800 | $4,057 | $743 | 18.31% | | Net Loss | $(1,410) | $(408) | $(1,002) | 245.59% | - The increase in operating expenses was primarily driven by increases in stock compensation expense and costs associated with the continued improvement of information technology systems and cybersecurity defenses[123](index=123&type=chunk) Platform or Program Percentage of Net Sales (6 Months) | Platform or Program (Percentage of Net Sales) | 2025 | 2024 | | :-------------------------------------------- | :--- | :--- | | Geared Turbo-Fan Engine | 31.0% | 19.6% | | UH-60 Black Hawk Helicopter | 20.9% | 22.4% | | CH-53 Helicopter | 13.6% | 3.7% | | E-2D Hawkeye | 10.3% | 27.9% | | F-35 Lightning II | 4.3% | 4.0% | | F-18 Hornet | 1.6% | 4.0% | | All other platforms | 18.3% | 18.4% | [Liquidity and Capital Resources](index=28&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) Discusses the company's ability to meet its short-term and long-term financial obligations and its strategies for capital management - The company is in default of its Fixed Charge Coverage Ratio (**0.76x** vs. **1.05x** required) as of June 30, 2025, and its Current Credit Facility expires on December 30, 2025, raising substantial doubt about its ability to continue as a going concern[127](index=127&type=chunk)[128](index=128&type=chunk) - Management is negotiating with its lender and related party noteholders to extend debt maturity dates and has raised **$5,375,000** in gross proceeds from its At The Market (ATM) offering since December 2024, including **$3,623,000** in July 2025[133](index=133&type=chunk)[138](index=138&type=chunk) Cash Flow Summary | Cash Flow Activity | Six Months Ended June 30, 2025 ($ thousands) | Six Months Ended June 30, 2024 ($ thousands) | | :--------------------------------- | :----------------------------------- | :----------------------------------- | | Operating activities | $1,870 | $334 | | Investing activities | $(2,113) | $(1,224) | | Financing activities | $(3) | $791 | | Net decrease in cash | $(246) | $(99) | [Off-Balance Sheet Arrangements](index=31&type=section&id=OFF-BALANCE%20SHEET%20ARRANGEMENTS) Confirms the absence of any off-balance sheet arrangements as of June 30, 2025 - The company did not have any off-balance sheet arrangements as of June 30, 2025[146](index=146&type=chunk) [Critical Accounting Estimates](index=31&type=section&id=Critical%20Accounting%20Estimates) Identifies the key accounting estimates that require significant judgment and their impact on the financial statements - Critical accounting estimates include inventory valuation, useful lives and impairment of long-lived assets, income tax provision, and allowance for credit losses[148](index=148&type=chunk) No material changes to these estimates were reported compared to the 2024 Annual Report[149](index=149&type=chunk) [Item 4. Controls and Procedures](index=32&type=section&id=Item%204.%20Controls%20and%20Procedures) Addresses the effectiveness of the company's disclosure controls and internal controls over financial reporting [Evaluation of Disclosure Controls and Procedures](index=32&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) Concludes that disclosure controls were ineffective due to an un-remediated material weakness in IT internal controls - The CEO and CFO concluded that disclosure controls and procedures were **not effective** as of June 30, 2025, due to an un-remediated material weakness in internal controls over financial reporting related to IT systems, as reported in the 2024 Form 10-K[150](index=150&type=chunk)[151](index=151&type=chunk) [Changes in Internal Control over Financial Reporting](index=32&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) Reports no material changes in internal control over financial reporting, apart from ongoing remediation efforts - No material changes in internal control over financial reporting occurred during the most recently completed fiscal quarter, other than the ongoing efforts to remediate the previously identified material weakness[153](index=153&type=chunk) [PART II. Other Information](index=33&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section includes additional information not covered in Part I, such as risk factors and exhibits [Item 1A. Risk Factors](index=33&type=section&id=Item%201A.%20Risk%20Factors) Advises investors to review the company's risk factors detailed in its 2024 Form 10-K and other SEC filings - Investors are encouraged to consider the risks described in the company's 2024 Form 10-K, the Management's Discussion and Analysis of Financial Condition and Results of Operations contained in this report, and other SEC filings[155](index=155&type=chunk) [Item 6. Exhibits](index=33&type=section&id=Item%206.%20Exhibits) Lists the certifications and XBRL interactive data files included as exhibits to the Form 10-Q - The report includes certifications from the principal executive officer (**31.1**) and principal financial officer (**31.2, 32.2**) and XBRL interactive data files (**101.INS, 101.SCH, 101.CAL, 101.DEF, 101.LAB, 101.PRE, 104**)[156](index=156&type=chunk) [Signatures](index=34&type=section&id=SIGNATURES) Confirms the official signing of the report by the Chief Financial Officer on behalf of Air Industries Group - The report was signed by **Scott Glassman, Chief Financial Officer**, on behalf of Air Industries Group on **August 14, 2025**[159](index=159&type=chunk)

Company Performance - Air Industries (AIRI) reported a quarterly loss of $0.11 per share, which was better than the Zacks Consensus Estimate of a loss of $0.15, but a decline from earnings of $0.09 per share a year ago [1] - The quarterly report represented an earnings surprise of +26.67%, contrasting with a previous quarter where the company had a loss of $0.27 against an expected loss of $0.04, resulting in a surprise of -575% [2] - The company posted revenues of $12.66 million for the quarter ended June 2025, exceeding the Zacks Consensus Estimate by 5.49%, but down from $13.57 million in the same quarter last year [3] Stock Performance - Air Industries shares have declined approximately 17.2% since the beginning of the year, while the S&P 500 has gained 10% [4] - The current Zacks Rank for Air Industries is 4 (Sell), indicating expectations of underperformance in the near future [7] Future Outlook - The consensus EPS estimate for the upcoming quarter is -$0.02 on revenues of $14.75 million, and for the current fiscal year, it is -$0.45 on revenues of $53.39 million [8] - The aerospace and defense industry, to which Air Industries belongs, is currently ranked in the top 31% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [9]

[FORM 8-K General Information](index=1&type=section&id=FORM%208-K%20General%20Information) This section details the general filing information for the Form 8-K Current Report, including registrant and security specifics - This is a Form 8-K Current Report filed by AIR INDUSTRIES GROUP on August 14, 2025[1](index=1&type=chunk) Registrant Details | Field | Value | |---|---| | Registrant Name | AIR INDUSTRIES GROUP | | State of Incorporation | Nevada | | Commission File Number | 001-35927 | | IRS Employer I.D. Number | 80-0948413 | | Principal Executive Offices | 1460 Fifth Avenue, Bay Shore, New York 11706 | | Registrant's telephone number | (631) 968-5000 | Registered Securities | Title of Class | Trading Symbol(s) | Exchange | |---|---|---| | Common Stock, par value $0.001 | AIRI | NYSE American | - The registrant is not an emerging growth company[3](index=3&type=chunk) [Item 2.02 Results of Operation and Financial Condition](index=2&type=section&id=Item%202.02%20Results%20of%20Operation%20and%20Financial%20Condition) This section announces the release of financial results for the three and six months ended June 30, 2025, and related conference call details - Air Industries Group issued a press release on August 14, 2025, reporting financial results for the three and six months ended June 30, 2025[4](index=4&type=chunk) - A conference call to discuss financial results is scheduled for August 14, 2025, at 4:30 PM Eastern Time, with replay available at www.airindustriesgroup.com[4](index=4&type=chunk) - The information furnished in this Form 8-K, including Exhibit 99.1, is not deemed 'filed' for Section 18 of the Securities Exchange Act of 1934, nor incorporated by reference unless expressly stated[5](index=5&type=chunk) [Item 9.01 Financial Statements and Exhibits](index=2&type=section&id=Item%209.01%20Financial%20Statements%20and%20Exhibits) This section enumerates the financial statements and exhibits accompanying the Form 8-K filing Exhibits Filed | Exhibit No. | Description | |---|---| | 99.1 | Text of press release issued August 14, 2025, by Air Industries Group | | 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | [SIGNATURES](index=3&type=section&id=SIGNATURES) This section confirms the official signing of the Form 8-K report by the Chief Financial Officer - The report was signed on August 14, 2025, by Scott Glassman, Chief Financial Officer of Air Industries Group[10](index=10&type=chunk)

Core Viewpoint - Air Industries (AIRI) has gained attention as one of the most searched stocks, with its performance influenced by various fundamental factors [1][2]. Earnings Estimates - Air Industries is expected to report a loss of $0.15 per share for the current quarter, reflecting a year-over-year decline of -266.7% [5]. - The consensus earnings estimate for the current fiscal year is -$0.45, indicating a year-over-year change of -9.8% [5]. - For the next fiscal year, the consensus earnings estimate is $0.21, representing a change of +53.3% from the previous year [6]. - The Zacks Rank for Air Industries is 4 (Sell), indicating potential underperformance in the near term due to recent changes in earnings estimates [7]. Revenue Growth - The consensus sales estimate for the current quarter is $12 million, showing a year-over-year decline of -11.6% [11]. - For the current fiscal year, the sales estimate is $53.39 million, reflecting a -3.1% change, while the next fiscal year is projected at $56.05 million, indicating a +5% change [11]. Last Reported Results - In the last reported quarter, Air Industries generated revenues of $12.14 million, a year-over-year decrease of -13.7% [12]. - The EPS for the same period was -$0.27, compared to -$0.21 a year ago, with a revenue surprise of -13.32% and an EPS surprise of -575% [12][13]. Valuation - Air Industries is graded B on the Zacks Value Style Score, suggesting it is trading at a discount compared to its peers [17].

Company Performance - Air Industries (AIRI) closed at $3.60, reflecting a -4.76% change from the previous day, underperforming compared to the S&P 500's daily loss of 0.33% [1] - Over the past month, Air Industries' stock has increased by 6.78%, outperforming the Aerospace sector's gain of 3.58% and the S&P 500's gain of 4.07% [1] Upcoming Financial Results - Air Industries is projected to report earnings of -$0.15 per share, indicating a year-over-year decline of 266.67% [2] - The consensus estimate for revenue is $12 million, down 11.57% from the prior-year quarter [2] Annual Estimates - For the annual period, the Zacks Consensus Estimates predict earnings of -$0.45 per share and revenue of $53.39 million, representing shifts of -9.76% and -3.12% from the previous year [3] - Recent changes to analyst estimates indicate a dynamic business outlook, with positive revisions suggesting optimism [3] Zacks Rank and Industry Performance - Air Industries currently holds a Zacks Rank of 5 (Strong Sell), with the Zacks Rank system showing a strong track record of outperforming the market [5] - The Aerospace - Defense industry has a Zacks Industry Rank of 45, placing it in the top 19% of over 250 industries, indicating strong performance potential [6]

Financial Data and Key Metrics Changes - Consolidated net sales for Q1 2025 were $12.1 million, down from $14.1 million in Q1 2024, indicating a decrease in sales [12] - Gross profit increased to approximately $2 million from $1.9 million in 2024, with a gross margin percentage of 16.8%, up 320 basis points year-over-year [12][13] - Operating loss increased to $746,000 in Q1 2025 compared to a loss of $259,000 in Q1 2024 [14] - Net loss for Q1 2025 was $988,000 or $0.27 per share, compared to a loss of $706,000 or $0.21 per share in Q1 2024 [14] - Adjusted EBITDA increased to $576,000, a rise of $214,000 or nearly 60% compared to Q1 2024 [14] Business Line Data and Key Metrics Changes - The company reported a book-to-bill ratio of 1.34 to 1 at the end of Q1 2025, which is above the industry standard and represents an 80% increase since Q1 2023 [7][8] - Funded backlog reached a record $120 million, with total backlog exceeding $2.5 billion, both achieved during 2024 [8] Market Data and Key Metrics Changes - Raw materials are flowing more steadily, but lead times from order placement to receipt have increased significantly, now ranging from nine to fifteen months [10] - The company is experiencing a gradual easing in acquiring materials, although initial lead times remain long [22][23] Company Strategy and Development Direction - The company is focusing on business development efforts, including participation in the Paris Air Show to attract new customers [6][36] - There is a targeted interest in electric vehicle technology and electric aircraft, indicating a strategic pivot towards future investments [37] Management's Comments on Operating Environment and Future Outlook - Management believes that the impact of tariffs on imports will be muted and does not expect significant benefits or reductions from the proposed Pentagon budget [17] - The company reaffirms its belief that full-year results for 2025 will exceed those of 2024, despite quarterly variations [18] Other Important Information - Total debt has been reduced by approximately $1.6 million, while accounts receivable decreased by over $2 million due to timing of sales and collections [15] Q&A Session Summary Question: Clarity on first quarter revenue and trends for the second quarter - Management indicated that the revenue drop was due to long lead times and timing of purchase orders, but they are seeing an easing in material acquisition [22][23] Question: Customer delivery expectations - Management confirmed they are meeting customer delivery expectations and have caught up with some customers [25][28] Question: Hesitation from customers due to economic conditions - Management stated there is no hesitation from customers regarding ongoing programs, indicating confidence in their current projects [30][31] Question: Specific new customers targeted at the Paris Air Show - Management confirmed scheduled meetings with large overseas manufacturers and expressed interest in electric vehicle technology [36][37] Question: One-time stock-based compensation event - Management indicated that stock-based compensation expenses are expected to be lower in future quarters [38]

Financial Data and Key Metrics Changes - Consolidated net sales for Q1 2025 were $12.1 million, down from $14.1 million in Q1 2024, indicating a decrease in sales [11] - Gross profit increased to approximately $2 million from $1.9 million in the previous year, with a gross margin percentage of 16.8%, up 320 basis points compared to Q1 2024 [11][12] - Operating loss increased to $746,000 in Q1 2025 from a loss of $259,000 in Q1 2024 [13] - Net loss for Q1 2025 was $988,000 or $0.27 per share, compared to a loss of $706,000 or $0.21 per share in Q1 2024 [13] - Adjusted EBITDA for Q1 2025 increased to $576,000, a rise of $214,000 or nearly 60% compared to Q1 2024 [13] Business Line Data and Key Metrics Changes - The company reported an increase in operational efficiency, achieving higher gross profit on lower sales [4][5] - The book-to-bill ratio was 1.34, reflecting a 20% improvement from the prior year and an 80% increase since Q1 2023, indicating a healthy business development effort [7][8] Market Data and Key Metrics Changes - Funded backlog reached a record $120 million, with total backlog exceeding $2.5 billion, both achieved during 2024 [8] - Raw material lead times have increased significantly, with current lead times ranging from nine to fifteen months [9] Company Strategy and Development Direction - The company is focusing on aggressive business development efforts, including participation in the Paris Air Show to onboard new customers [6] - The management is optimistic about future sales growth, supported by a strong backlog and improved bookings [8] Management's Comments on Operating Environment and Future Outlook - Management believes that the impact of tariffs on imports will be muted and does not expect significant benefits from the proposed increase in defense spending [15] - The company reaffirms its belief that full-year results for 2025 will exceed those of 2024, despite quarterly variations [16] Other Important Information - Total debt has been reduced by approximately $1.6 million, while accounts receivable decreased by over $2 million due to timing of sales and collections [14] Q&A Session Summary Question: Clarity on first quarter revenue and trends for the second quarter - Management indicated that the revenue decline was primarily due to long lead times and timing of purchase orders, but they are seeing an easing in acquiring materials [19][20] Question: Customer hesitation due to economic conditions - Management confirmed there is no hesitation from customers regarding ongoing programs, and they expect to meet delivery expectations [24][25] Question: Specific new customers targeted at the Paris Air Show - The company has scheduled meetings with large overseas manufacturers and is targeting customers in the electric vehicle sector [28][29] Question: Was the stock-based compensation a one-time event? - Management indicated that the stock-based compensation expense is likely to be lower in future quarters [30]

Financial Performance - Net sales for the three months ended March 31, 2025, were $12,135,000, a decrease of $1,926,000 or 13.7% compared to $14,061,000 for the same period in 2024[104] - Gross profit for the three months ended March 31, 2025, was $2,034,000, an increase of $128,000 or 6.72% from $1,906,000 in the same period of 2024, with a gross profit margin rising to 16.8% from 13.6%[108] - Operating expenses increased to $2,780,000 for the three months ended March 31, 2025, up $615,000 or 28.41% from $2,165,000 in the same period of 2024, representing 22.9% of net sales[109] - Net loss for the three months ended March 31, 2025, was $988,000, compared to a net loss of $706,000 for the same period in 2024, reflecting a 39.94% increase in losses[111] Cash Flow and Liquidity - Cash decreased by $468,000 or 62.15% to $285,000 as of March 31, 2025, compared to $753,000 as of December 31, 2024[105] - Working capital decreased by $1,400,000 or 11.89% to $10,376,000 as of March 31, 2025, from $11,776,000 as of December 31, 2024[105] - For the three months ended March 31, 2025, cash provided by operating activities was $1,525,000, compared to a cash flow use of $232,000 for the same period in 2024, indicating a significant improvement[122] - Cash used in investing activities was $1,217,000 for the three months ended March 31, 2025, up from $111,000 in the same period of 2024, reflecting ongoing investments in property and equipment[123] - Cash used in financing activities for the three months ended March 31, 2025, was $776,000, which included a decrease in borrowings under the Current Credit Facility by $284,000[125] - The company believes it has sufficient liquidity to meet its financial obligations for the next twelve months, based on current revenue visibility and backlog strength[119] Contracts and Backlog - Total unfilled contract values amounted to $270.3 million as of March 31, 2025, including a backlog of $120.6 million[103] Debt and Financing - The company entered into an Eighth Amendment on January 30, 2025, providing for an additional Term Loan of $1,640,000 for equipment acquisition[117] - As of March 31, 2025, the outstanding amount under the Revolving Line of Credit was $11,204,000, with $8,796,000 available for growth[119] - The company is exploring potential extensions or refinancing of its obligations under the Current Credit Facility, which may involve higher interest rates or more restrictive covenants[120] Customer Concentration - Lockheed Martin accounted for 39.6% of net sales in 2025, up from 25.9% in 2024, while RTX accounted for 28.9% in 2025, down from 33.4% in 2024[106] Operational Efficiency - The company plans to invest approximately $750,000 during the remainder of 2025 for new or upgraded equipment to enhance production efficiency[124] Accounting and Reporting - The company has not experienced any material changes to its critical accounting estimates compared to the previous year, maintaining consistency in financial reporting[129] - The increase in cash flow from operations was primarily due to a decrease in accounts receivable and the collection of contract costs receivable[122] Financial Ratios - The Fixed Charge Coverage Ratio achieved as of March 31, 2025, was 1.19x, exceeding the required 1.05x[113] Off-Balance Sheet Arrangements - The company has no off-balance sheet arrangements as of March 31, 2025, indicating a straightforward financial position[126]