Release Date: April 16, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Air Industries Group (AIRI, Financial) reported a significant improvement in financial results for 2024 compared to 2023, with revenue increasing by 7% to over $55 million.
- The company achieved a record backlog, with bookings leading to a backlog increase of nearly $32 million or 36.7%, reaching almost $118 million.
- The book-to-bill ratio improved from 0.75 to 1 in January 2023 to 1.29 to 1 by December 2024, surpassing the industry standard.
- Gross profit increased by over 20.2% compared to 2023, with a gross margin improvement of 1.7 percentage points.
- Air Industries Group (AIRI) secured six major new contracts totaling nearly $60 million, spread over four aircraft platforms and four customers, indicating strong business development efforts.
Negative Points
- Despite improvements, Air Industries Group (AIRI) still reported a net loss of $1.366 million for 2024, although this was a reduction from the previous year's loss.
- Operating expenses increased by 9.7% to $8.5 million, partly due to a $315,000 increase in stock compensation expense.
- The company's total debt increased by about $3 million due to additional borrowings under its revolving credit facility and for solar power installation.
- The gross margin of 16.2% remains below the company's historical average, indicating room for further improvement.
- Potential impacts from tariffs and defense budget cuts pose risks, although the company believes its programs will not be materially affected.
Q & A Highlights
Q: Do any of the raw materials in your supply chain involve rare earth elements from China?
A: Luciano Melluzzo, President and CEO: We are not aware of any rare earth elements from China in our military programs, as they are required to be sourced from American soil. We have one commercial product sourced from China, but it includes a price protection clause allowing us to pass on any cost increases above 5%.
Q: How is the operational efficiency and flexibility expected to evolve in 2025?
A: Luciano Melluzzo, President and CEO: Our operations are currently running smoothly, with improvements made to address past bottlenecks. We have invested significantly in our facilities, particularly in Connecticut, to enhance efficiency. We expect continued operational flexibility and efficiency in 2025.
Q: What is the expected capital expenditure for 2025?
A: Scott Glassman, CFO: We expect capital expenditure to be lower than in 2024, aside from the machines already committed. However, if a significant new contract requires additional equipment, we are prepared to invest further.
Q: How many new program starts are anticipated for this year?
A: Luciano Melluzzo, President and CEO: We expect fewer new program starts compared to the past, as many current projects are continuations of existing contracts. This should contribute to improved gross margins as programs mature.
Q: Can you provide any insights into Q1 performance relative to Q4?
A: Scott Glassman, CFO: While we are not providing detailed insights yet, our gross margin dollars are in line with internal expectations. We will release the first quarter results in a few weeks.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
