Air Industries Group, Inc. (the "Company" or "Air Industries") Announces Results for the Second Quarter and First Half of 2013

Air Industries Group, Inc. (the "Company" or "Air Industries") Announces 
Results for the Second Quarter and First Half of 2013 
BAY SHORE, NY -- (Marketwired) -- 07/29/13 --  Air Industries Group,
Inc. (NYSE MKT: AIRI) 
Financial Results for the Six Months Ended June 30, 2013 and 2012: 
For the six months ended June 30, 2013, consolidated net sales were
$28,965,000, a decrease of $(2,313,000) or (7%) compared to net sales
of $31,278,000 for the prior year. Net sales at Air Industries
Machining Corp. were $15,666,000 a decrease of $(8,062,000), or (34%)
from $23,728,000 for the prior year. Net sales at Welding Metallurgy,
Inc were $6,446,000, a decrease of $(591,000) or (8%) from $7,037,000
for the prior year. Net sales at Nassau Tool Works were $6,853,000
compared to $513,000 for the period of June 20 through June 30, 2012.
We completed the Nassau Tool Works ("NTW") acquisition on June 20,
2012, and the financial results of its operations are included in our
financial results from that day forward. 
Net sales for the six months ended June 30, 2013 and 2012 are
summarized below: 


 
                                                                            
(all amounts in 000's)   Six Months Ended June 30,                          
                        ---------------------------                         
Net Sales                    2013          2012      $ variance  % variance 
                        ------------- ------------- -----------  ---------- 
  Air Industries                                                            
   Machining            $      15,666 $      23,728 $    (8,062)        -34%
  Welding Metallurgy                                                        
   Inc.                         6,446         7,037        (591)         -8%
  Nassau Tool Works             6,853           513       6,340      n/m    
                        ------------- ------------- -----------  ---------- 
Consolidated            $      28,965 $      31,278 $    (2,313)         -7%
                        ============= ============= ===========  ========== 

 
For the six months ended June 30, 2013, consolidated operating income
was $2,257,000 a decrease of $(635,000) or (22%) from $2,892,000 for
the prior year. Consolidated income before tax was $1,424,000, a
decrease of $(363,000) or (20%) from $1,787,000 in the prior year.
Consolidated net income was $505,000, a decrease of $(634,000) or
(56%) compared with $1,139,000 for the prior year.  
Diluted earnings per common share were $0.09, a decrease of $(0.22)
or (71%) compared with $0.31 for the prior year. Earnings per share
in 2012 benefited from lower tax expense in the first quarter of 2012
resulting from the use of NOL carry-forwards. There were also fewer
shares outstanding for the six month period in 2012. We issued an
aggregate of 2,132,000 shares of our common stock pursuant to the
recapitalization effected in connection with the Nassau Tool Works
acquisition. 
The results for the six months ended June 30, 2013 and 2012 are
summarized below: 


 
                                                                            
(in 000's except per share data)                                            
                         Six Months Ended June 30,                          
                        ---------------------------                         
Consolidated:                2013          2012      $ variance  % variance 
                        ------------- ------------- -----------  ---------- 
Operating Income        $       2,257 $       2,892 $      (635)        -22%
Net Income before Tax           1,424         1,787        (363)        -20%
Net Income                        505         1,139        (634)        -56%
Net Income Per Share    $        0.09 $        0.31 $     (0.22)        -71%
                        ============= ============= ===========  ========== 
                                                                            

 
--  Consolidated Gross profit was $7,278,000, or 25% of sales for 2013
    compared with $6,708,000 or approximately 21% of sales for 2012.
    
    
--  Consolidated Operating costs were $5,021,000, an increase of
    $1,205,000 or 32% compared to $3,816,000 for the prior year. The
    increase results from the inclusion of approximately $1,300,000 of
    operating costs at NTW for the first six months of 2013, offset by the
    reduction of approximately $240,000 in operating costs at AIM.

  
Financial Results for the three months ended June 30, 2013 and 2012: 
For the three months ended June 30, 2013, consolidated net sales were
$14,639,000, a decrease of $(601,000) or (4%) compared to net sales
of $15,240,000 for the prior year. Net sales at Air Industries
Machining Corp. were $8,188,000, a decrease of $(3,397,000) or (29%)
from $11,585,000 for the prior year. Net sales at Welding Metallurgy,
Inc were $3,307,000, an increase of $165,000 or 5% from $3,142,000
for the prior year. Net sales at Nassau Tool Works were $3,144,000
compared to $513,000 for the period of June 20 through June 30, 2012. 
Net sales for the three months ended June 30, 2013 and 2012 are
summarized below: 


 
                                                                            
(all amounts in 000's)  Three Months Ended June 30,                         
                        ---------------------------                         
Net Sales                    2013          2012      $ variance  % variance 
                        ------------- ------------- -----------  ---------- 
  Air Industries                                                            
   Machining            $       8,188 $      11,585 $    (3,397)        -29%
  Welding Metallurgy                                                        
   Inc.                         3,307         3,142         165           5%
  Nassau Tool Works             3,144           513       2,631      n/m    
                        ------------- ------------- -----------  ---------- 
Consolidated            $      14,639 $      15,240 $      (601)         -4%
                        ============= ============= ===========  ========== 

 
For the three months ended June 30, 2013 consolidated operating income
was $1,078,000, a decrease of $(218,000) or (17%) from $1,296,000 for
the prior year. Consolidated income before tax was $656,000 a
decrease of $(26,000) or (4%) from $682,000 in the prior year.
Consolidated net income was $226,000, a decrease of $(93,000) or
(29%) compared with $319,000 for the prior year.  
Diluted earnings per common share were $0.04 a decrease of $(0.04) or
approximately (50%) compared with $0.08 for the prior year. There
were also more shares outstanding for the three month period in 2013
as compared to the earlier year as a result of the issuance of our
shares as described above.  
The results for the three months ended June 30, 2013 and 2012 are
summarized below: 


 
                                                                            
(in 000's except per share data)                                            
                        Three Months Ended June 30,                         
                        ---------------------------                         
Consolidated:                2013          2012      $ variance  % variance 
                        ------------- ------------- -----------  ---------- 
Operating Income        $       1,078 $       1,296 $      (218)        -17%
Net Income before Tax             656           682         (26)         -4%
Net Income                        226           319         (93)        -29%
Net Income Per Share    $        0.04 $        0.08 $     (0.04)        -50%
                        ============= ============= ===========  ========== 
                                                                            

 
--  Consolidated Gross profit was $3,630,000, or approximately 25% of
    sales for 2013 compared with $3,436,000 or approximately 23% of sales
    for 2012.
    
    
--  Consolidated Operating costs were $2,552,000, an increase of $412,000
    or 20% compared to $2,140,000 for the prior year. All of the increase
    in operating costs resulted from the inclusion of operating costs of
    Nassau Tool Works costs for the quarter, partially offset by the
    decrease in operating costs at our other subsidiaries.

  
Mr. Peter Rettaliata, Chief Executive Officer of Air Industries,
commented: "Air Industries Group remained profitable during the
second quarter and the first half of 2013, though earnings for the
second quarter and for the first half of 2013 remain disappointing.
The reduction in earnings per share from 2012 to 2013, however, is
accentuated by the greater number of shares outstanding in 2013
compared to 2012. 
"The Company's revenue, particularly that of its Air Machining
subsidiary, has been negatively affected by Sequestration. It was our
belief that this situation was temporary, and in fact we have seen
some firming up of orders for the balance of the year, again at Air
Machining. 
"We responded to reduced sales by reducing costs. I am proud of how
our management team has executed the difficult decisions necessary to
reduce costs. Despite the reduction in sales in the first half of
2013, if orders continue to firm up, we expect that our EBITDA
(earnings before deductions for interest, taxes, depreciation and
amortization) for 2013 will still be between $9.0 million and $10.0
million, though perhaps at the lower end of that range. 
"During the first half of 2013 we have continued to pay quarterly
dividends and have reduced our bank debt by over $3 million. On July
1st coincident with the acquisition of Decimal Industries we renewed
our primary credit facility with PNC Bank and reduced our interest
rates on both our term loan and revolving credit facility. 
"In June, I attended the Paris Air Show with Gregg Aramanda, our new
Vice President of Business Development. We were able to meet many of
our existing customers and many potential customers at the show and
have developed several interesting proposals and leads for future
business. Significantly, we were able to focus on emerging growth
opportunities in the commercial and Foreign Military Sales markets,
consistent with our goal of reducing our dependence on sales to the
US military. 
"One of our goals for 2013 is identifying select, accretive
acquisitions that offer a strategic 'multiplier effect' of adding
additional capabilities which can then be marketed to existing and
new customers. On July 1st we acquired Decimal Industries, a long
established Long Island-based manufacturer of aerospace components
whose customers include major aircraft component suppliers. Decimal
specializes in aerostructure products including welded and brazed
chassis structures housing electronics, radars, and avionics in
aircraft. Decimal has become part of our Welding Metallurgy
subsidiary and its operations will be consolidated into our Hauppauge
facility. One of the attractions of Decimal is that its customer base
includes major Aerospace suppliers, many of which are not current
customers of Air Industries. 
"The long run reduction in military procurement is a fact in our
business. These reductions will put many suppliers - particularly
small companies under financial stress. We believe we are well
positioned to withstand this pressure and to profit from it by
opportunistically completing accretive acquisitions. We are
responding to this cycle by redoubling our marketing efforts and by
responding to opportunities for accretive acquisitions." 
The Company uses EBITDA as a supplemental liquidity measure because
management finds it useful to understand and evaluate results,
excluding the impact of non-cash depreciation and amortization
charges, stock based compensation expenses, and nonrecurring expenses
and outlays, prior to consideration of the impact of other potential
sources and uses of cash, such as working capital items. This
calculation may differ in method of calculation from similarly titled
measures used by other companies. 
ABOUT AIR INDUSTRIES GROUP, INC.  
Air Industries Group, Inc. (AIRI) is an integrated manufacturer of
precision equipment assemblies and components for leading aerospace
and defense prime contractors. Air Industries designs and
manufactures flight critical products including flight safety parts,
landing gear and components, arresting gear, flight controls, sheet
metal fabrications and ground support equipment.  
Certain matters discussed in this press release are 'forward-looking
statements' intended to qualify for the safe harbor from liability
established by the Private Securities Litigation Reform Act of 1995.
In particular, the Company's statements regarding trends in the
marketplace, its belief that the slowdown caused by the Sequester
will reverse in the 2nd half of 2013, the ability to realize firm
backlog and projected backlog, potential future results and
acquisitions, are examples of such forward-looking statements. The
forward-looking statements are subject to numerous risks and
uncertainties, including, but not limited to, the timing of projects
due to variability in size, scope and duration, the inherent
discrepancy in actual results from estimates, projections and
forecasts made by management regulatory delays, changes in government
funding and budgets, and other factors, including general economic
conditions, not within the Company's control The factors discussed
herein and expressed from time to time in the Company's filings with
the Securities and Exchange Commission could cause actual results and
developments to be materially different from those expressed in or
implied by such statements. The forward-looking statements are made
only as of the date of this press release and the Company undertakes
no obligation to publicly update such forward-looking statements to
reflect subsequent events or circumstances 
Contact Information 
Air Industries Group, Inc.
631.881.4913
ir@airindustriesgroup.com 
 
 
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