Air Industries (US:AIRI)2025-11-14 21:02Financial Performance - Net sales for the three months ended September 30, 2025, were $10,309,000, a decrease of $2,246,000, or 17.9%, compared to $12,555,000 for the same period in 2024[115] - Gross profit for the three months ended September 30, 2025, was $2,295,000, with a gross profit margin of 22.3%, an increase from 15.5% in the same period of 2024[117] - Operating expenses for the three months ended September 30, 2025, were $1,979,000, representing 19.2% of net sales, up from 14.9% in the same period of 2024[118] - Net loss for the three months ended September 30, 2025, was $44,000, a significant improvement compared to a net loss of $404,000 for the same period in 2024[120] - For the nine months ended September 30, 2025, net sales were $35,111,000, a decrease of $5,077,000, or 12.6%, compared to $40,188,000 for the same period in 2024[121] - Gross profit for the nine months ended September 30, 2025, was $6,357,000, with a gross profit margin of 18.1%, up from 16.2% in the same period of 2024[122] - Operating expenses for the nine months ended September 30, 2025, were $6,779,000, representing 19.3% of net sales, an increase from 14.8% in the same period of 2024[123] - Net loss for the nine months ended September 30, 2025, was $1,454,000, compared to a net loss of $812,000 for the same period in 2024, reflecting a significant increase in losses[125] Cash Flow and Financing - Cash decreased to $126,000 as of September 30, 2025, down 83.3% from $753,000 as of December 31, 2024[114] - Cash used in operating activities for the nine months ended September 30, 2025, was $754,000, a decline from cash generated of $508,000 in the same period of 2024[143] - Cash used in investing activities increased to $2,818,000 for the nine months ended September 30, 2025, compared to $1,493,000 in 2024, primarily for new property and equipment[145] - Cash provided by financing activities was $6,875,000 for the nine months ended September 30, 2025, which included a net increase in borrowings under the Current Credit Facility of $3,826,000[147] - The company raised $4,869,000 through the sale of 1,213,593 shares of common stock during the nine months ended September 30, 2025, with approximately $3,930,000 restricted for the Current Credit Facility lender[128] - The company has temporarily paused all equity raising activities while evaluating the most effective capital structure going forward due to ongoing negotiations with lenders[128] Debt and Equity - As of September 30, 2025, the company had outstanding indebtedness under the Current Credit Facility of $21,956,000, which includes a Revolving Loan of $15,838,000 and a Term Loan of $6,118,000[133] - The company is currently in default of certain covenants under the Current Credit Facility, including a failure to meet the required Fixed Charge Coverage Ratio of 1.05x as of June 30, 2025, achieving only 0.76x[131] Operational Adjustments - Management initiated cost-saving measures, including a workforce reduction, to align operating expenses with anticipated production volumes[141] - The company expects to invest approximately an additional $350,000 during the remainder of 2025 for tooling required to produce products[146] Backlog and Equity - Total unfilled contract values as of September 30, 2025, amounted to $269.0 million, including a backlog of $131.8 million[112] - Total stockholders' equity increased to $18,843,000 as of September 30, 2025, a rise of 26.1% from $14,948,000 as of December 31, 2024[114]