Air Industries Group Subsidiary Sterling Engineering Corporation Receives $3.2M in New Contracts

Rhea-AI Summary

Air Industries Group (AIRI) announces Sterling Engineering Corporation's receipt of two contracts totaling $3.2 million for engine components used in the F-135 jet engine that powers the Lockheed Martin F-35 Lightning II. The contracts will boost near-term revenues, with the firm 18-Month Backlog increasing by 43% from its backlog at September 30th. Sterling recently completed its first quarter in many years with revenue above $2.0 million, indicating an increase in revenue and a return to profitability.

Positive

• Sterling Engineering Corporation received two contracts totaling $3.2 million for engine components used in the F-135 jet engine that powers the Lockheed Martin F-35 Lightning II.
• The firm 18-Month Backlog increased by nearly $5.1 million or 43% from its backlog at September 30th, indicating a strong increase in business at Sterling Engineering.
• Sterling recently completed its first quarter in many years with revenue above $2.0 million, confirming its ability to increase revenue and return to profitability.

Negative

• None.

Insights

Financial Analyst

The recent contract awards to Air Industries Group's subsidiary, Sterling Engineering, signify a robust upturn in their business operations. With a substantial increase in their 18-month backlog by approximately $5.1 million, or 43%, there is a clear indication of growing demand for their aerospace components. The financial implications of these contracts are noteworthy, as they are expected to elevate near-term revenues and potentially enhance shareholder value.

From a financial perspective, the $3.2 million contracts could be a catalyst for improved earnings per share (EPS) and a stronger balance sheet. Investors should monitor the company's quarterly financials closely to assess the impact of these contracts on the company's profitability margins. Given that Sterling Engineering has achieved a quarterly revenue above $2.0 million for the first time in years, the trend suggests a positive trajectory for future financial performance.

Market Research Analyst

The contracts for the F-135 jet engine components, used in the F-35 Lightning II, highlight Air Industries Group's strategic positioning within the defense sector. The F-35 program is a key element of global defense strategies and involvement in such programs can provide long-term stability and growth opportunities for suppliers like Air Industries. The company's ability to secure these contracts may also reflect its competitive edge in precision manufacturing and its alignment with the industry's stringent quality and performance standards.

Investors should consider the broader market implications of these developments. As defense spending remains a priority for many governments, companies like Air Industries that demonstrate consistent growth and reliability in their supply chain could be well-positioned to benefit from increased defense budgets. However, it is essential to assess the company's capacity to fulfill these contracts efficiently without incurring additional costs that could offset the revenue gains.

Aerospace Industry Expert

The F-35 Lightning II program is among the most technologically advanced and expensive military aircraft programs in history. The engine components produced by Sterling Engineering are critical for the F-135 engine's performance, which is the propulsion system for the F-35. The contracts' emphasis on early 2024 deliveries suggests an acceleration of production rates, which could indicate an uptick in F-35 deployment and a positive outlook for suppliers within this program.

Understanding the technical requirements and the complexity of these components is crucial. The precision assemblies for mission-critical applications must adhere to the highest quality standards due to the safety-sensitive nature of aerospace and defense products. Sterling's ability to meet these standards may lead to further contract wins and solidify its reputation in the industry. Stakeholders should watch for potential scale benefits and operational efficiencies that could arise from increased production volumes.

BAY SHORE, N.Y.--(BUSINESS WIRE)-- Air Industries Group (NYSE American: AIRI), an integrated Tier 1 manufacturer of precision assemblies and components for mission-critical aerospace and defense applications, and a prime contractor to the U.S. Department of Defense, today announced that its Sterling Engineering Corporation (Sterling) subsidiary has received two contracts totaling approximately $3.2 million.

Sterling Engineering has been awarded two contracts for engine components used in the F-135 jet engine that powers the Lockheed Martin F-35 Lightning II. Significantly, delivery against these contracts will begin in early 2024 boosting near term revenues.

Mr. Lou Melluzzo, CEO of Air Industries, commented: “These awards continue what has been a very strong increase in business at Sterling Engineering. During the two months ended November 30^th, Sterling’s firm 18-Month Backlog increased by nearly $5.1 million or 43% from its backlog at September 30^th. Sterling recently completed its first quarter in many years with revenue above $2.0 million. The increase in backlog, together with these new contracts confirm Sterling’s ability to increase its revenue and return to profitability.”

ABOUT AIR INDUSTRIES GROUP

Air Industries Group (NYSE American: AIRI) is an integrated manufacturer of precision assemblies and components for leading aerospace and defense prime contractors and original equipment manufacturers. The Company is a Tier 1 supplier to aircraft Original Equipment Manufacturers, a Tier 2 subcontractor to major Tier 1 manufacturers, and a Prime Contractor to the U.S. Department of Defense, and is highly regarded for its expertise in designing and manufacturing parts and assemblies that are vital for flight safety and performance.

Additional information about the Company can be found in its filings with the SEC.

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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240103496372/en/

Air Industries Group

Investor Relations

Michael Recca

631.328.7079

ir@airindustriesgroup.com

Source: Air Industries Group

FAQ

What contracts did Sterling Engineering Corporation receive?

Sterling Engineering Corporation received two contracts totaling $3.2 million for engine components used in the F-135 jet engine that powers the Lockheed Martin F-35 Lightning II.

What was the increase in the firm 18-Month Backlog?

The firm 18-Month Backlog increased by nearly $5.1 million or 43% from its backlog at September 30th, indicating a strong increase in business at Sterling Engineering.

What was Sterling Engineering's recent revenue?

Sterling recently completed its first quarter in many years with revenue above $2.0 million, confirming its ability to increase revenue and return to profitability.