Air Industries Group (AIRI) reported third‑quarter 2025 results that showed a sharp narrowing of its net loss and a significant expansion of gross margin. Net sales fell to $10.3 million from $12.555 million in Q3 2024, a 18.5% decline, while gross profit rose to $2.3 million, lifting the margin to 22.3% from 15.5% year‑over‑year. Operating income slipped to $316,000, and the quarter ended with a net loss of $44,000, compared with a $404,000 loss in the same period last year. Adjusted EBITDA for the nine‑month period to September 30 was $2.7 million, up nearly 5% from $2.57 million in 2024.
The revenue decline was driven primarily by a 12% drop in legacy product sales, offset by a 5% increase in high‑margin aerospace components. The company’s backlog remained robust at $45 million, indicating sustained demand for its core offerings. Management attributed the margin expansion to disciplined cost‑control initiatives and a favorable shift in product mix toward higher‑margin contracts.
Gross margin growth from 15.5% to 22.3% reflects both lower direct‑material costs and improved pricing power in the defense‑sector segment, where the company secured several multi‑year contracts. The margin lift helped offset the revenue decline and contributed to the narrowing of the net loss.
The net loss of $44,000 represents a 89% improvement over the $404,000 loss reported in Q3 2024. The improvement is largely due to a $1.2 million reduction in operating expenses, driven by a $0.6 million savings in manufacturing overhead and a $0.6 million reduction in SG&A costs.
Earnings per share of ($0.01) beat the consensus estimate of ($0.22) by $0.21, a 95% positive surprise. The beat was driven by the combined effect of margin expansion and the lower operating loss, which together lifted earnings despite the revenue decline.
The company’s credit facility, which matures at the end of December 2025, remains a near‑term headwind. AIRI is in constructive discussions with lenders about refinancing or extending the facility, and management emphasized that securing favorable terms is critical to maintaining liquidity and supporting ongoing capital expenditures.
CEO Luciano Melluzzo said the quarter demonstrated “measurable improvements in profitability and operational discipline” and that the company remains confident in a strong finish to fiscal 2025 and momentum into 2026. CFO Scott Glassman highlighted the “meaningful improvement” in operating performance compared to the first two quarters of the year and the prior year’s Q3 results.
Investors reacted cautiously to the earnings release, focusing on the credit‑facility maturity and the company’s ability to refinance. While the company’s margin expansion and reduced loss were positive signals, the looming liquidity concern tempered enthusiasm for the quarter’s results.
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