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BAY SHORE, N.Y. - Air Industries Group (NYSE American: AIRI), a manufacturer of precision aerospace and defense components, has announced a seven-year contract valued at $110 million for the production of Thrust Struts for Geared Turbo-Fan (GTF) jet engines. This contract is set to boost the company's backlog to over $280 million.
The production under this new agreement is scheduled to begin in January 2025 and will continue through 2031. This contract comes as a replacement and expansion of a previous agreement that is due to expire in December 2024. With the commencement of production, Air Industries anticipates a significant increase in annual sales.
Lou Melluzzo, CEO of Air Industries, noted that the Thrust Struts product line has been pivotal for the company since 2015. The new contract is expected to require about 40,000 hours of production annually at the company's Long Island facility. Melluzzo emphasized the component's critical role in the aerospace supply chain, as no GTF engine can be mounted to an aircraft without Thrust Struts.
The company's commitment to strategic investments in machinery and equipment upgrades has been highlighted as a supporting factor for this order. Melluzzo also mentioned ongoing business development efforts following the recent Farnborough Air Show, aiming to strengthen current customer relationships and forge new partnerships.
Peter Rettaliata, Chairman of the Board of Air Industries, praised the achievement and the team's efforts which have reportedly fortified a key customer relationship and delivered a significant win for shareholders.
Air Industries Group's product portfolio includes landing gears, flight controls, engine mounts, and components for aircraft jet engines, among other complex machine parts. These products are known for their high quality and reliability, essential in mission-critical operations for military and civilian safety.
The company's forward-looking statements indicate a positive outlook on future revenues and backlog realization, though it acknowledges the inherent uncertainty in projections due to various market and regulatory factors.
This news is based on a press release statement from Air Industries Group.
In other recent news, Air Industries Group, a key player in the aerospace and defense sector, has spotlighted a profitable second quarter in 2024 with a significant boost in gross profit and a robust order backlog. The company's profitability in Q2 of 2024 marked an improvement of nearly 22% from the same quarter last year. Revenue also saw a modest increase of 2.8% compared to Q2 of 2023. The company reported strong bookings for Q2 at $16.5 million, a 27% increase from Q1, and its total funded backlog exceeded a notable $100 million milestone.
In terms of future expectations, Air Industries Group reaffirmed its 2024 net sales target of at least $50 million. The company's adjusted EBITDA in 2024 is projected to surpass the previous year significantly. However, it also signaled some anticipated softness in its Q3 performance, while expressing optimism for a stronger Q4.
These recent developments indicate a positive trajectory for Air Industries Group, despite the challenges with the timing of orders, raw material flows, and delivery times for finished products. The company is also exploring growth opportunities in both military and commercial sectors, with a focus on maintaining profitability and controlling expenses.
InvestingPro Insights
Air Industries Group's recent announcement of a lucrative $110 million contract for the production of Thrust Struts for Geared Turbo-Fan (GTF) jet engines is set to substantially increase their production backlog and signals a period of growth for the company. The new contract aligns with the company's strategic investments and business development efforts, aiming to enhance their manufacturing capabilities and customer relationships.
InvestingPro data reveals that Air Industries has experienced a modest revenue growth of 0.89% in the last twelve months as of Q2 2024, with a quarterly revenue growth of 2.78% in Q2 2024. These figures may be reflective of the company's incremental progress in the aerospace and defense components sector. Despite this growth, the company's gross profit margins remain weak at 14.85%, and their operating income margin is low at 0.53%, indicating potential challenges in profitability and efficiency.
Regarding the company's financial stability, an InvestingPro Tip highlights that Air Industries' liquid assets exceed its short-term obligations, suggesting a solid footing to meet immediate financial commitments. However, another InvestingPro Tip points out that Air Industries has not been profitable over the last twelve months and suffers from poor free cash flow yield, which could be a concern for potential investors. It's worth noting that the company does not pay a dividend to shareholders, which may influence investment decisions for those seeking regular income.
For those interested in further analysis and additional insights, InvestingPro offers more tips on Air Industries that could help investors make informed decisions. Currently, there are six additional tips listed on InvestingPro for Air Industries, available at InvestingPro.
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