Air Industries Group (NYSE:AIRI) Q3 2020 Earnings Conference Call October 30, 2020 8:30 AM ET Company Participants Lou Melluzzo – Chief Executive Officer Mike Recca – Chief Financial Officer Conference Call Participants Operator Good day, and welcome to the Air Industries Conference Call. Today's conference is being recorded. Except for the historical information contained herein, the matters discussed in this presentation contain forward-looking statements. The accuracy of these statements is subject to si ...

Financial Data and Key Metrics Changes - Net sales for Q2 2020 were $8.5 million, representing a 36% decline from the prior year [8] - Gross profit declined by $1.6 million, or 76%, which was a greater decline than sales [8] - For the first six months, sales totaled $21.9 million, a decline of 21% [10] - The company reported an operating loss of $1.4 million for the first half, with 95% of that loss attributable to Q2 [10] - EBITDA for Q2 was negative, while EBITDA for the first six months was $894,000 [10] Business Line Data and Key Metrics Changes - The business is heavily concentrated on military aircraft components, with little change in demand for military products despite disruptions in commercial aerospace [7] - The backlog of firm orders remains at approximately $100 million, only marginally reduced [7] Market Data and Key Metrics Changes - The company faced significant impacts from COVID-19, including employee absenteeism and temporary shutdowns of subcontractors, which affected production and shipping [5][6] - Total manufacturing hours were 8,000 hours less than in Q2 2019, leading to under absorption of manufacturing overheads [9] Company Strategy and Development Direction - The company announced a major investment in equipment totaling about $2.5 million to accelerate production and enhance manufacturing capabilities [11] - The new machinery is expected to be operational by Q4 2020 and reflects the company's confidence in future demand [11] Management's Comments on Operating Environment and Future Outlook - Management noted that the workforce is stabilizing and absenteeism has returned to historical levels of 2% to 3% [15] - The company is optimistic about alleviating bottlenecks in production with new machinery, which will allow for increased efficiency and capability [22][25] Other Important Information - The company has maintained compliance with all loan covenants and expects to continue doing so [10] - There have been cancellations and reductions in commercial business, but military product production is being accelerated to fill gaps [7][28] Q&A Session Summary Question: Update on second quarter conditions and supplier stability - Management indicated that suppliers are stabilizing and returning to normal operations, with most of the workforce maintained [13][15] Question: Impact of new machinery on bottlenecks - The new equipment is expected to alleviate significant portions of current bottlenecks and enhance production capabilities [22][24] Question: Status of long-term agreement for thrust struts - Management confirmed a push out on order requirements but noted that there are no cancellations, and military product production is being accelerated to fill gaps [28][30]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ Quarterly Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended: June 30, 2020 or ☐ Transition Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from ______ to_______ Commission File No. 001-35927 AIR INDUSTRIES GROUP (Exact name of registrant as specified in its charter) 1460 Fifth Avenue, Bay Shore, New York 11706 ( ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Nevada 80-0948413 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) Title of Each Class Trading Symbol(s) Name of each Exchange on which Registered Common Stock AIRI NYSE-American FORM 10-Q ☒ Quarterly Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended: March 31, 2020 or ☐ Transition Report Pursuant To Section 13 or 15(d) of the S ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ Annual Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended: December 31, 2019 ☐ Transition Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from ______ to_______ Commission File No. 001-35927 AIR INDUSTRIES GROUP (Name of small business issuer in its charter) Nevada 80-0948413 (State or other jurisdiction of incorporation or ...

Air Industries Group (NYSE:AIRI) Q4 2019 Earnings Conference Call March 25, 2020 8:30 AM ET Company Participants Luciano Melluzzo - President and Chief Executive Officer Michael Recca - Chief Financial Officer Conference Call Participants John Nobile - Taglich Brothers, Inc. Operator Good day, and welcome to the Air Industries Conference Call. Today’s conference is being recorded. Air Industries Group’s Safe Harbor statement. Except for the historical information contained herein, the matters discussed in t ...

[PART I. FINANCIAL INFORMATION](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents the company's unaudited financial statements, management's analysis of operations and liquidity, and assessment of internal controls [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, accompanied by notes detailing accounting policies, debt, and a going concern warning [Condensed Consolidated Financial Statements](index=6&type=section&id=Condensed%20Consolidated%20Financial%20Statements) The financial statements reflect increased net sales and a shift to net income for Q3 2019, alongside balance sheet changes and improved operating cash flow for the nine-month period Financial Metric (in thousands USD) | Financial Metric | Three Months Ended Sep 30, 2019 | Three Months Ended Sep 30, 2018 | Nine Months Ended Sep 30, 2019 | Nine Months Ended Sep 30, 2018 | | :--- | :--- | :--- | :--- | :--- | | **Net Sales** | $14,000 | $10,700 | $41,200 | $33,600 | | **Gross Profit** | $3,000 | $1,400 | $7,400 | $4,900 | | **Income (Loss) from Operations** | $1,200 | ($800) | $1,300 | ($2,000) | | **Net Income (Loss)** | $200 | ($3,100) | ($1,500) | ($4,400) | | **EPS (Diluted)** | $0.01 (Continuing Ops) | ($0.06) (Continuing Ops) | ($0.05) (Continuing Ops) | ($0.16) (Continuing Ops) | Balance Sheet Item (in thousands USD) | Balance Sheet Item | September 30, 2019 (Unaudited) | December 31, 2018 | | :--- | :--- | :--- | | **Total Current Assets** | $37,700 | $38,000 | | **Total Assets** | $50,800 | $47,800 | | **Total Current Liabilities** | $33,000 | $29,000 | | **Total Liabilities** | $40,200 | $36,200 | | **Total Stockholders' Equity** | $10,600 | $11,600 | Cash Flow Activity (Nine Months Ended Sep 30, in thousands USD) | Cash Flow Activity (Nine Months Ended Sep 30) | 2019 (Unaudited) | 2018 (Unaudited) | | :--- | :--- | :--- | | **Net Cash from Operating Activities** | $300 | ($2,900) | | **Net Cash used in Investing Activities** | ($400) | ($1,000) | | **Net Cash (used in) provided by Financing Activities** | ($1,600) | $4,200 | | **Net (Decrease) Increase in Cash** | ($1,700) | $300 | [Notes to Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes provide critical context to the financial statements, detailing significant accounting policies, debt, customer concentration, and a going concern warning - The company's ability to continue as a going concern is in **substantial doubt** due to a history of operating losses, negative cash flows, and significant reliance on debt and equity infusions to maintain operations[16](index=16&type=chunk)[17](index=17&type=chunk) - On January 1, 2019, the company adopted the new lease accounting standard, ASC 842, which resulted in the recognition of **$4.4 million** in operating lease right-of-use assets and corresponding lease liabilities on the balance sheet[24](index=24&type=chunk)[25](index=25&type=chunk)[27](index=27&type=chunk) - The company faces significant customer concentration risk, with three customers (Sikorsky Aircraft, Goodrich Landing Gear Systems, and Rohr) accounting for **73.4%** of total sales for the nine months ended September 30, 2019[50](index=50&type=chunk)[51](index=51&type=chunk) - The company is involved in a significant legal dispute with CPI Aerostructures regarding a working capital adjustment from the 2018 sale of the WMI Group, with CPI seeking approximately **$4.2 million**[113](index=113&type=chunk) Segment Performance (Nine Months Ended Sep 30, 2019, in thousands USD) | Segment Performance (Nine Months Ended Sep 30, 2019) | Net Sales | Gross Profit | Pretax Income (Loss) | | :--- | :--- | :--- | :--- | | **Complex Machining** | $36,400 | $7,100 | $4,800 | | **Turbine Engine Components** | $4,800 | $400 | ($300) | | **Corporate** | — | — | ($5,800) | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses operational repositioning, highlighting significant sales growth and improved gross margins, while acknowledging high leverage and ongoing going concern risks [Results of Operations](index=31&type=section&id=Results%20of%20Operations) The company achieved significant net sales and gross profit growth for both the third quarter and nine-month period, driven by increased sales volume and cost reduction efforts Metric (Three Months Ended Sep 30, in thousands USD) | Metric | Three Months Ended Sep 30, 2019 | Three Months Ended Sep 30, 2018 | % Change | | :--- | :--- | :--- | :--- | | **Net Sales** | $14,000 | $10,700 | +30.4% | | **Gross Profit** | $3,000 | $1,400 | +116.8% | | **Gross Margin** | 21.2% | 12.7% | +8.5 p.p. | | **Net Income (Loss)** | $200 | ($3,100) | N/A | Metric (Nine Months Ended Sep 30, in thousands USD) | Metric | Nine Months Ended Sep 30, 2019 | Nine Months Ended Sep 30, 2018 | % Change | | :--- | :--- | :--- | :--- | | **Net Sales** | $41,200 | $33,600 | +22.7% | | **Gross Profit** | $7,400 | $4,900 | +52.7% | | **Gross Margin** | 18.0% | 14.5% | +3.5 p.p. | | **Net Loss** | ($1,500) | ($4,400) | N/A | - Consolidated operating expenses decreased by **17.2%** in Q3 2019 and **14.5%** in the nine-month period year-over-year, primarily due to cost reduction efforts, including the consolidation of corporate offices and NTW operations into the Bay Shore location[148](index=148&type=chunk)[156](index=156&type=chunk) [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity remains constrained by high leverage and reliance on its PNC Bank facility and related-party financing, despite recent liquidity-enhancing transactions and covenant compliance - The company is **highly leveraged** and relies on its Loan Facility with PNC Bank and debt/equity from principal stockholders to support operations, with the PNC facility maturing on December 31, 2019[158](index=158&type=chunk)[164](index=164&type=chunk) - As of September 30, 2019, the company was in **compliance** with the minimum EBITDA covenants required by its PNC Loan Facility[165](index=165&type=chunk) - In January 2019, the company raised **$2.0 million** by issuing 7% senior subordinated convertible notes to directors Michael and Robert Taglich to meet conditions for extending its PNC loan maturity[172](index=172&type=chunk) - The company sold its rights to **$1.1 million** in future payments from the sale of its AMK subsidiary for an immediate cash payment of **$0.8 million** in January 2019 to increase liquidity[178](index=178&type=chunk) - Management explicitly states that historical losses and reliance on external financing raise **substantial doubt** about the company's ability to continue as a going concern[189](index=189&type=chunk)[190](index=190&type=chunk) [Controls and Procedures](index=43&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were ineffective due to material weaknesses in inventory, financial closing, and accounting personnel, with remediation plans contingent on financial ability - The CEO and CFO concluded that the company's disclosure controls and procedures were **not effective** as of the end of the reporting period[219](index=219&type=chunk) - Material weaknesses were identified in several areas, including: inventory control systems, the quarterly closing process, accounting for complex or non-standard transactions, and a lack of sufficient accounting personnel[219](index=219&type=chunk) - Planned remediation efforts include supplementing the accounting staff with experienced professionals and using third-party consultants, contingent on the company's financial ability[220](index=220&type=chunk) [PART II. OTHER INFORMATION](index=43&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section details legal proceedings, risk factors, equity security sales, and a comprehensive list of exhibits [Legal Proceedings](index=43&type=section&id=Item%201.%20Legal%20Proceedings) This section details an ongoing legal dispute with CPI Aerostructures regarding a working capital adjustment from a prior sale, where CPI seeks approximately $4.2 million - The company is in a legal dispute with CPI Aerostructures over the final working capital adjustment from the sale of the WMI Group[222](index=222&type=chunk) - An independent expert determined the working capital deficit to be approximately **$4.1 million**, and CPI has filed a motion seeking a judgment of about **$4.2 million**, with **$2.0 million** to be satisfied from funds in escrow[223](index=223&type=chunk)[224](index=224&type=chunk) - The company believes the expert's determination is void and intends to "contest vigorously" CPI's claim, though it has agreed to release **$0.6 million** from the escrow for undisputed items[225](index=225&type=chunk) [Risk Factors](index=44&type=section&id=Item%201A.%20Risk%20Factors) This section does not introduce any new risk factors, instead incorporating by reference the risks and uncertainties previously disclosed in the company's 2018 Annual Report on Form 10-K - The report refers to the risk factors disclosed in the company's 2018 Annual Report on Form 10-K and does not present any new or updated risks[226](index=226&type=chunk) [Sales of Unregistered Equity Securities](index=44&type=section&id=Item%202.%20Sales%20of%20Unregistered%20Equity%20Securities) The company reports that it did not issue or sell any unregistered equity securities during the third quarter of 2019, other than what may have been previously disclosed in its other SEC filings - No unregistered equity securities were sold during the period covered by this report, except as previously disclosed in other Exchange Act reports[227](index=227&type=chunk) [Exhibits](index=44&type=section&id=Item%206.%20Exhibits) This section provides a list of all exhibits filed with the Form 10-Q, including corporate governance documents, certifications by officers, and interactive data files - The report includes standard exhibits such as CEO and CFO certifications pursuant to Rule 13a-14 and Section 906 of the Sarbanes-Oxley Act, as well as XBRL data files[227](index=227&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ Quarterly Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended: June 30, 2019 or ☐ Transition Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from ______ to_______ Commission File No. 001-35927 AIR INDUSTRIES GROUP (Exact name of registrant as specified in its charter) Nevada 80-0948413 (State or other jurisdiction ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ Quarterly Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended: March 31, 2019 or ☐ Transition Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from ______ to_______ Commission File No. 001-35927 AIR INDUSTRIES GROUP (Exact name of registrant as specified in its charter) Nevada 80-0948413 (State or other jurisdictio ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ Annual Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended: December 31, 2018 ☐ Transition Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from ______ to_______ Commission File No. 001-35927 AIR INDUSTRIES GROUP (Name of small business issuer in its charter) Nevada 80-0948413 (State or other jurisdiction of incorporation or ...