Air Industries Group Announces the Pay Down of $1.0M of Subordinated Debt

Rhea-AI Summary

Air Industries Group (NYSE American: AIRI), a manufacturer of precision components and assemblies for aerospace and defense prime contractors, has announced the repayment of over $1.0 million in subordinated debt. CEO Lou Melluzzo indicated that the company plans to make additional debt repayments in the upcoming months, with the goal of substantially reducing the remaining subordinated debt while maintaining business growth and enhancing profitability.

Positive

• Repayment of over $1.0M in subordinated debt, indicating improved cash position
• Management commitment to further debt reduction while maintaining growth

Negative

• Continued presence of remaining subordinated debt on balance sheet

Insights

Financial Analyst

The $1.0 million debt reduction by Air Industries Group represents a significant financial milestone, accounting for approximately 6.9% of the company's market capitalization. This strategic debt paydown signals several positive developments for investors:

First, the ability to reduce subordinated debt indicates healthy operational cash flows, particularly noteworthy in the capital-intensive aerospace and defense manufacturing sector. Subordinated debt typically carries higher interest rates due to its lower priority in the capital structure, so its reduction should immediately improve interest coverage ratios and bottom-line profitability.

The management's commitment to further debt reduction while maintaining growth trajectories suggests robust financial planning. This balanced approach is important in the aerospace/defense manufacturing sector, where working capital requirements and capital expenditures are substantial. The reduction in leverage should improve the company's financial flexibility and potentially lower its weighted average cost of capital.

However, investors should monitor how this deleveraging strategy balances with necessary investments in technology and capacity expansion, essential for maintaining competitiveness in the precision manufacturing space. The timing of this debt reduction, amidst rising interest rates and increasing defense spending, positions Air Industries to potentially capture more opportunities while operating with a leaner capital structure.

BAY SHORE, N.Y.--(BUSINESS WIRE)-- Air Industries Group (“Air Industries”) (NYSE American: AIRI), a leading manufacturer of precision components and assemblies for large aerospace and defense prime contractors, today announced it has repaid more than $1.0 million of its subordinated debt.

Lou Melluzzo, Chief Executive Officer of Air Industries Group commented: “It is my pleasure to announce that we have repaid more than $1.0 million of our subordinated debt. We expect to make additional repayments in the coming months. Our goal is to substantially reduce the remaining subordinated debt while continuing to grow and enhance the profitability of the business.”

ABOUT AIR INDUSTRIES GROUP

Air Industries Group is a leading manufacturer of precision components and assemblies for large aerospace and defense prime contractors. Its products include landing gears, flight controls, engine mounts and components for aircraft jet engines, ground turbines and other complex machines. Whether it is a small individual component or complete assembly, its high quality and extremely reliable products are used in mission critical operations that are essential for the safety of military personnel and civilians.

FORWARD LOOKING STATEMENTS

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, future revenues, earnings and Adjusted EBITDA, the ability to realize firm backlog and projected backlog, cost cutting measures, 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.

NON-GAAP FINANCIAL MEASURES

The Company uses Adjusted EBITDA, a Non-GAAP financial measure as defined by the SEC, as a supplemental profitability 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 and may be different than the EBITDA calculation used by our lenders for purposes of determining compliance with our financial covenants. This Non-GAAP measure may have limitations when understanding performance as it excludes the financial impact of transactions such as interest expense necessary to conduct the Company’s business and therefore are not intended to be an alternative to financial measure prepared in accordance with GAAP. The Company has not quantitatively reconciled its forward looking Adjusted EBITDA target to the most directly comparable GAAP measure because items such as amortization of stock-based compensation and interest expense, which are specific items that impact these measures, have not yet occurred, are out of the Company’s control, or cannot be predicted. For example, quantification of stock-based compensation is not possible as it requires inputs such as future grants and stock prices which are not currently ascertainable.

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Air Industries Group

Chief Financial Officer

631-328-7039

Source: Air Industries Group

FAQ

How much subordinated debt did Air Industries Group (AIRI) repay in 2024?

Air Industries Group repaid more than $1.0 million of its subordinated debt.

What are Air Industries Group's (AIRI) plans for remaining subordinated debt?

The company plans to make additional debt repayments in the coming months with the goal of substantially reducing the remaining subordinated debt while continuing to grow and enhance profitability.

What is the significance of AIRI's $1.0M debt repayment for investors?

The debt repayment indicates improved cash position and financial health, while demonstrating management's commitment to reducing the company's debt burden.

How does Air Industries Group (AIRI) plan to balance debt reduction with business growth?

According to CEO Lou Melluzzo, the company aims to substantially reduce the remaining subordinated debt while simultaneously focusing on business growth and profitability enhancement.