Fubotv earnings beat by $0.10, revenue topped estimates
Air Industries Group reported a decline in net sales for the first quarter of 2025, with revenues falling to $12.1 million from $14.1 million in the same period last year. Despite the drop in sales, the company improved its gross margin to 16.8% from 13.6% a year earlier. The company also reported a net loss of $988,000, or $0.27 per share, compared to a loss of $706,000, or $0.21 per share, in Q1 2024. The stock responded negatively, with a 7.71% drop to $3.2018 in aftermarket trading. According to InvestingPro data, the company’s financial health score is rated as "WEAK," with particular concerns about its debt management and cash flow generation.
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Key Takeaways
- Net sales decreased by 14.2% year-over-year.
- Gross margin improved by 320 basis points.
- Net loss widened to $988,000 from $706,000.
- Stock fell by 7.71% in aftermarket trading.
Company Performance
Air Industries Group faced a challenging start to 2025 with a notable decline in net sales. However, the company managed to improve its gross margin percentage, reflecting tighter cost controls and operational efficiencies. The aerospace and defense supplier continues to navigate a complex market environment with extended material lead times and potential defense budget changes.
Financial Highlights
- Revenue: $12.1 million, down from $14.1 million in Q1 2024.
- Gross Margin: $2 million, up from $1.9 million in Q1 2024.
- Gross Margin Percentage: 16.8%, up from 13.6% in Q1 2024.
- Net Loss: $988,000 or $0.27 per share, compared to $706,000 or $0.21 per share in Q1 2024.
- Adjusted EBITDA: $576,000, up nearly 60% from Q1 2024.
Outlook & Guidance
Air Industries Group expects its full-year results for 2025 to surpass those of 2024, driven by continued improvements in gross margins. The company is also focusing on expanding its presence in the electric vehicle and electric aircraft markets and increasing its content in the F-35 platform. Analyst consensus maintains a Neutral rating on the stock, with a price target of $6.50, suggesting potential upside from current levels. Based on InvestingPro’s Fair Value analysis, the stock appears to be fairly valued at current levels.
Executive Commentary
CEO Lou Malouza highlighted the company’s operational improvements, stating, "We are making more money on fewer sales." He also emphasized the strong book-to-bill ratio, which improved to 1.34 to 1, indicating positive future sales momentum. Malouza reaffirmed the company’s confidence in exceeding 2024’s results, despite potential industry challenges.
Risks and Challenges
- Extended Material Lead Times: The aerospace industry continues to face long lead times of 9-15 months, which could affect production schedules.
- Defense Budget Changes: Potential shifts in defense spending could impact revenue streams.
- Tariff Impacts: Although minimal impact is expected, changes in tariffs could affect costs.
- Market Volatility: The stock’s recent decline highlights sensitivity to earnings reports and market conditions.
Q&A
During the earnings call, analysts inquired about material procurement challenges and customer responses to current programs. The company confirmed there was no customer hesitation and discussed its strategy for targeting new customers at the upcoming Paris Air Show.
Full transcript - Air Industries Group (AIRI) Q1 2025:
Daryl, Conference Moderator, Air Industries Group: Hello, and welcome to Air Industries Group First Quarter of twenty twenty five Earnings Conference Call. At this time, all participants are in a listen only mode. The question and answer session will follow the formal presentation. Please note this conference is being recorded. This call may contain forward looking statements as defined in Section 27A of the Securities Act of 1933 as amended, including statements regarding, among other things, the company’s business strategy and growth strategy.
Expressions which identify forward looking statements speak only as of the date the statement is made. These forward looking statements are based largely on our company’s expectations and are subject to a number uncertainties, some of which are beyond our control and cannot be predicted or quantified. Future developments and actual results could differ materially from those set forth in, contemplated by or underlying the forward looking statements. In light of these risks and uncertainties, there can be no assurance that the forward looking information will prove to be accurate. This call does not constitute an offer to purchase any securities nor solicitation of proxy consent authorization or agent designation with respect to a meeting of the company’s shareholders.
At this time, I would now like to turn the call over to Lou Malouza, President and CEO. Please go ahead, sir.
Lou Malouza, President and CEO, Air Industries Group: Thank you, Daryl, and thank you all for joining us today. We just recently, on April 16, had our year end conference call. Not too much has transpired since then. But for the first quarter, our sales were lower compared to 2024. Despite this, gross profit increased.
We have worked many hours trying to increase the efficiency of our operations. We’re making more money on fewer sales with a good measure that those efforts are paying off. Scott will go into more details on the numbers, but I note that in the first quarter, our operating loss increased. This was largely due to an increase in noncash expense for stock compensation. I would like to focus on our business development efforts.
In the first quarter, we accelerated an already aggressive program. As part of this, I am excited to share that once again, we will be attending the Paris Air Show in June. We have attended the last several shows both in Paris and in alternate years in England. These shows have been very successful for us, resulting in the onboarding of several major new customers. The aerospace industry uses a book to bill ratio.
This metric is the total of new business booked divided by sales billed to customers. It is an excellent metric to measure the health of a business development effort. If the ratio is below one, not enough new business is being booked, and it is likely that future sales will decline. A ratio of 1.2 to one generally reflects a growing business. Our ratio calculated on a trailing twelve month basis was 1.34 to one at the end of the first quarter.
This is above the industry standard and almost a 20% improvement from the prior year. And since the first quarter of twenty twenty three, it has increased by 80%. We have laid a firm foundation for future sales growth. Bookings lead to backlog, and our success in bookings is reflected in our backlog. Our funded backlog supported by firm orders from customers is at a record 120,000,000 Our total backlog, including forecast but not yet firm customer orders, is more than $0.02 $5,000,000,000 These levels were achieved during 2024 and are at record levels for our industries.
Bookings lead to backlog, and backlog leads to sales. But to make sales, we need to have raw materials. Raw materials are flowing more steadily to us and to others. However, over the past several years, the initial lead time, the time from order placement to receipt on our dock has grown exponentially. They remain very long today.
If we receive an order from a customer today, an order material today, it may be nine months to fifteen months before we can begin to cut metal and make the product. While this is frustrating, it is a reality of the industry. I’m going to turn the call over to Scott, who will discuss first quarter results and then come back from some closing arguments. Scott? Thanks, Lou.
Let me discuss the results of Q1 twenty twenty five in some more detail. Consolidated net sales for the first quarter ended 03/31/2025 were $12,100,000 This was lower than the $14,100,000 we achieved during Q1 of twenty twenty four. However, and rather more importantly, our gross margin for the first quarter increased by over $100,000 on these lower sales to about $2,000,000 from the $1,900,000 in 2024. So gross margin percentage for the quarter was 16.8%, an increase of three twenty basis points compared to the first quarter of twenty twenty four. I would also like to note that this margin percentage was higher than the full year of 2024.
While the gross margin of 16.8% does still remain below our historical average, we anticipate continuing to improve this in the future. As I mentioned a few weeks ago when discussing our year end results, we continue to control our operating expenses despite the inflationary environment. For the first quarter, they were $2,800,000 an increase of $615,000 or 28.4 percent higher than last year. Of this increase, 412,000 was related to an increase in stock compensation expense, which is a noncash expense, and that accounted for 67% of the increase. Absent this non cash expense, the increase would have been slightly above 9%.
We had a loss from operations of $746,000 in the first quarter of twenty twenty five as compared to a loss of $259,000 during the same period in 2024. Finally, on the bottom line, we had a net loss of $988,000 or $0.27 a share in 2025 as compared to a loss of $706,000 or $0.21 a share in the first quarter of twenty twenty four. Our adjusted EBITDA for the first quarter was increased to $576,000 which was an increase of $214,000 or nearly 60% compared to the first quarter of twenty twenty four. I’m also very pleased to report that we remain in compliance with all of our covenants with our loan agreement with our lender. Now let me quickly highlight a few items on the balance sheet compared to 12/31/2024.
Our total debt has been reduced by approximately $1,600,000 Our inventory has remained stable, increasing slightly more than $100,000 As this is our largest asset, we monitor this diligently. Accounts receivable has decreased by over $2,000,000 and this is a function of the timing of sales and collections. Accounts payable plus accrued expenses have also decreased by about $550,000 And with that, I will turn the call back to Lou for some closing remarks and an update on our business outlook for the remainder of 2025. Lou? Thank you, Scott.
Earlier this year, when discussing the 2024 results, we discussed the possible impacts of tariffs and changes in the defense budget on our future. The situation has clarified somewhat, and we can now see it more clearly. As to tariffs, we are now pretty convinced that any impact on tariffs on imports will be muted. Tariffs will not affect the one item we import as we have price protection from our customers. For defense spending, the proposed Pentagon budget has been described as a surge budget, perhaps increasing spending to $1,000,000,000,000 We do not expect any significant benefit from the surge in spending, But by the same token, we do not expect any material reduction from a possible reordering of spending priorities.
As we stand here today and as we stated in our press release this morning, while quarterly results during 2025 will vary, we reaffirm our belief that the full year of 2025 will exceed the results of 2024. With that, Daryl, I’d like to open up the call to questions and answers. If you may.
Daryl, Conference Moderator, Air Industries Group: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two to remove yourself from the queue.
For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. One moment please for your first question. Our first questions come from the line of Howard Halpern with the Taglich Brothers. Please proceed with your questions.
Lou Malouza, President and CEO, Air Industries Group: Good afternoon, guys. How are doing, Howard? Hey, Howard. How are you? Okay.
I guess a little clarity on first quarter revenue. Was it really a function more of the long lead time? And or was it more when purchase orders were coming in? If you could just add some color to the first quarter. And what are you seeing in the trends up well for the second quarter?
So Howard, as stated earlier, the products that we shipped this first quarter, the material, you know, probably came about a year ago or, in some cases, a little longer. So at that time, it was definitely an issue with with getting materials timely. It says we we are seeing some definitely a ease in in acquiring materials. The lead times have have gotten exponentially longer. There’s no question about it.
But at least we have access to these materials. So even though we piggyback on a lot of OEMs, you know, purchase orders, the mills just are not producing materials in, you know, in the three to six months like we are accustomed to in this business in the past. So we are getting material. Like, the the stuff that we had problems in the past, we’re getting we’re getting those materials. It’s just taking a little longer.
We’ve we’ve ordered a few more pieces than we need to try to get ahead of the try to get ahead of the curve, But that’s that’s the reality of the business. Just things have gotten pushed out. So we are meeting our customers on delivery expectations. For sure. Okay.
There’s some customers we’ve right right at the doorstep we’ve caught up and we’re delivering to their cadence. So that that’s a nonissue. Okay. And and that means may increase out, no hesitation on your customers due to everything that’s been going on the past couple of months economically? No.
There’s no hesitation at all. No. On the on the programs that we are involved with, we feel they’re, you know, relatively insulated. I mean, you know, the CH 53 k, of course, is behind in the in the in qualifications. We don’t foresee that slowing up.
We’re we’re still shipping last year’s requirements because we couldn’t get material. So I think we’ll be good on that. On the e two d, the big platform that we have for for Northrop, there’s a there’s four there’s eight planes. Four, I think, four or five are domestic and the rest for overseas. We we we feel that those those will ship as as scheduled.
You know, the f 35 might see some some pressures in in the future. Maybe there might be a reduction in quantities. We just we just don’t know. But our our take on that platform is not huge right now. We’re look we’re looking to expand it.
So even even if even if those claims decline in numbers, we feel that we can increase our content on the f 35, and we’re diligently working to make sure that that happens. So we you know, unless there’s some forstaken event that we are not aware of, we we see we see our products still continuing to flow as as we have forecasted them. Okay. And with trip to the Paris Air Show, are there specific new customers that you are looking to, I guess, touch base base with and hope that they will become new customers? So by the time we get to the Paris Air Show, our our schedule has been has been booked fully.
And there’s definitely some interest from some large overseas manufacturers that we have scheduled meetings for. The last time we were at the show often is between Paris and Farnsboro, England. And the last time we were there, we we managed to bring in several really large clients. So the show has been very successful. We are targeting some additional customers.
You know, there’s a lot of activity around the electric vehicle. Now that’s that’s an investment in the future. There’s no question about it for the for the electric takeoff, you know, the electric planes per se. So we’ve got some appointments with those and some meetings scheduled with those. So there there are some things in the works.
Yes. Okay. And one last one. The the onetime was this a onetime stock based compensation event for this year? It will likely be the expense will likely be lower in future quarters.
Okay. Okay. I just wanted to make sure on that. And thanks, guys, and keep up the great work. Nice, lean machine that you’ve got that you have running here now.
Thanks, Howard. I appreciate it.
Daryl, Conference Moderator, Air Industries Group: Thank you. As a reminder, if you would like to ask a question, please press star one on your telephone keypad. I’m not showing any further questions at this time. I’ll hand the call back over to Lou Malouza for any closing remarks.
Lou Malouza, President and CEO, Air Industries Group: Thank you, Daryl. Thank you all for being on the call today and for your interest in Air Industries Group. We look forward to updating you on our progress on the next call. And thank you again for everybody for taking the time to participate in on the call. Daryl, I think we’re all set.
Daryl, Conference Moderator, Air Industries Group: Thank you so much. This does conclude today’s teleconference. We appreciate your participation. May disconnect your lines at this time. Enjoy the rest of your day.
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