Air Industries (US:AIRI)2025-05-15 16:51Financial 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]