Air Industries Group announced its financial results for the first quarter ended March 31, 2025, reporting net sales of $12.13 million, a decrease of 13.7% compared to $14.06 million in Q1 2024. Despite lower sales, gross profit increased to $2.03 million from $1.91 million, leading to a significant rise in gross margin percentage to 16.8% from 13.6%.
Operating expenses, however, increased significantly by 28.4% to $2.78 million, primarily driven by non-cash stock-based compensation costs and investments in IT/cybersecurity. This led to an increased operating loss and net loss compared to the prior year quarter.
The company reported a strong book-to-bill ratio of 1.34 to 1 on a trailing 12-month basis as of the end of Q1 2025, and a record funded backlog of $120.6 million as of March 31, 2025. The total backlog, including potential orders against Long-Term Agreements, exceeds $0.25 billion, providing significant revenue visibility.
A critical concern was raised regarding the Current Credit Facility with Webster Bank, which includes a Revolving Loan ($11.20 million outstanding) and a Term Loan ($6.64 million outstanding), set to expire on December 30, 2025. This near-term maturity, along with Related Party Notes totaling $4.87 million maturing on July 1, 2026, raises substantial doubt about the company's ability to continue as a going concern.
Management is actively negotiating with Webster Bank and holders of the Related Party Notes for extensions or refinancing. The Eighth Amendment to the Credit Facility in January 2025 permitted the use of At The Market (ATM) offering funds to pay down up to $4.8 million of related party notes, with $1.29 million paid in Q1 2025.
Despite the financial headwinds, management reaffirmed its belief that full-year 2025 net sales will exceed fiscal year 2024 results, driven by the record funded backlog and anticipated increased funded orders, provided they do not default under the Credit Facility and the lender continues to provide revolving credit.
The content on BeyondSPX is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.