x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED March 31, 2014
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o
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TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM _______ TO ________.
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Nevada
(State or other jurisdiction of
incorporation or organization)
|
80-0948413
(IRS Employer
Identification No.)
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Page No.
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PART I. FINANCIAL INFORMATION
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PART II. OTHER INFORMATION
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FINANCIAL INFORMATION
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Item 1. Financial statements
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Page No.
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Condensed Consolidated Financial Statements:
|
|
Condensed Consolidated Balance Sheets as of March 31 2014 (unaudited) and December 31, 2013
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2
|
Condensed Consolidated Statements of Income for the three months ended March 31, 2014 and 2013 (unaudited)
|
3
|
Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2014 and 2013 (unaudited)
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4
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Notes to Condensed Consolidated Financial Statements
|
5
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AIR INDUSTRIES GROUP
|
Condensed Consolidated Balance Sheets
|
March 31,
|
December 31,
|
|||||||
2014
|
2013
|
|||||||
ASSETS
|
(Unaudited)
|
|||||||
Current Assets
|
||||||||
Cash and Cash Equivalents
|
$ | 687,000 | $ | 561,000 | ||||
Accounts Receivable, Net of Allowance for Doubtful Accounts of $889,000 and $783,000
|
12,909,000 | 8,584,000 | ||||||
Inventory
|
26,816,000 | 26,222,000 | ||||||
Deferred Tax Asset
|
1,114,000 | 1,051,000 | ||||||
Prepaid Expenses and Other Current Assets
|
422,000 | 510,000 | ||||||
Total Current Assets
|
41,948,000 | 36,928,000 | ||||||
Property and Equipment, net
|
6,158,000 | 6,523,000 | ||||||
Capitalized Engineering Costs - net of Accumulated Amortization
of $3,993,000 and $3,879,000
|
692,000 | 752,000 | ||||||
Deferred Financing Costs, net, deposit and other assets
|
638,000 | 605,000 | ||||||
Intangible Assets, net
|
4,435,000 | 4,726,000 | ||||||
Deferred Tax Asset
|
230,000 | 185,000 | ||||||
Goodwill
|
453,000 | 453,000 | ||||||
TOTAL ASSETS
|
$ | 54,554,000 | $ | 50,172,000 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
Current liabilities
|
||||||||
Notes Payable and Capitalized Lease Obligations - Current Portion
|
$ | 17,735,000 | $ | 14,969,000 | ||||
Accounts Payable and Accrued Expenses
|
7,560,000 | 6,855,000 | ||||||
Lease Impairment - Current
|
68,000 | 71,000 | ||||||
Deferred Gain on Sale - Current Portion
|
38,000 | 38,000 | ||||||
Customer Deposit
|
254,000 | 251,000 | ||||||
Dividends Payable
|
880,000 | 717,000 | ||||||
Income Taxes Payable
|
2,112,000 | 1,496,000 | ||||||
Total Current Liabilities
|
28,647,000 | 24,397,000 | ||||||
Long term liabilities
|
||||||||
Notes Payable and Capitalized Lease Obligation - Net of Current Portion
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3,219,000 | 2,527,000 | ||||||
Lease Impairment - Net of Current Portion
|
40,000 | 56,000 | ||||||
Deferred Gain on Sale - Net of Current Portion
|
437,000 | 447,000 | ||||||
Deferred Rent
|
1,151,000 | 1,132,000 | ||||||
TOTAL LIABILITIES
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33,494,000 | 28,559,000 | ||||||
Stockholders' Equity
|
||||||||
Preferred Stock Par Value $.001-Authorized 1,000,000 shares at March 31, 2014 and December 31, 2013, respectively, none issued and outstanding at March 31, 2014 and December 31, 2013, respectively
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- | - | ||||||
Common Stock - Par Value $.001- Authorized 25,000,000 shares at March 31, 2014 and December 31, 2013, respectively, 5,863,788 and 5,862,346 Shares Issued and Outstanding as of March 31, 2014 and December 31, 2013, respectively
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6,000 | 6,000 | ||||||
Additional Paid-In Capital
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35,905,000 | 36,799,000 | ||||||
Accumulated Deficit
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(14,851,000 | ) | (15,192,000 | ) | ||||
TOTAL STOCKHOLDERS' EQUITY
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21,060,000 | 21,613,000 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
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$ | 54,554,000 | $ | 50,172,000 |
AIR INDUSTRIES GROUP
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Condensed Consolidated Statements of Income for the Three months ended March 31,
|
(Unaudited)
|
2014
|
2013
|
|||||||
Net Sales
|
$ | 15,453,000 | $ | 14,325,000 | ||||
Cost of Sales
|
11,408,000 | 10,678,000 | ||||||
Gross Profit
|
4,045,000 | 3,647,000 | ||||||
Operating Expenses
|
2,816,000 | 2,469,000 | ||||||
Income from operations
|
1,229,000 | 1,178,000 | ||||||
Interest and financing costs
|
(303,000 | ) | (385,000 | ) | ||||
Other (expense) income, net
|
(1,000 | ) | (25,000 | ) | ||||
Income before provision for income taxes
|
925,000 | 768,000 | ||||||
Provision for income taxes
|
584,000 | 489,000 | ||||||
Net income
|
$ | 341,000 | $ | 279,000 | ||||
Income per share - basic
|
$ | 0.06 | $ | 0.05 | ||||
Income per share - diluted
|
$ | 0.06 | $ | 0.05 | ||||
Weighted average shares outstanding - basic
|
5,863,564 | 5,711,093 | ||||||
Weighted average shares outstanding - diluted
|
6,125,909 | 5,809,572 |
AIR INDUSTRIES GROUP
|
|||
Condensed Consolidated Statements of Cash Flows For the Three months Ended March 31,
|
|||
(Unaudited)
|
2014
|
2013
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
||||||||
Net Income
|
$ | 341,000 | $ | 279,000 | ||||
Adjustments to Reconcile Net Income to Net
|
||||||||
Cash (used in) provided by Operating Activities
|
||||||||
Depreciation of property and equipment
|
552,000 | 403,000 | ||||||
Amortization of intangible assets
|
291,000 | 291,000 | ||||||
Amortization of capitalized engineering costs
|
114,000 | 101,000 | ||||||
Bad debt expense
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93,000 | 27,000 | ||||||
Non-cash compensation expense
|
3,000 | - | ||||||
Amortization of deferred financing costs
|
18,000 | 15,000 | ||||||
Gain on sale of real estate
|
(10,000 | ) | (10,000 | ) | ||||
Deferred Income Taxes
|
(108,000 | ) | - | |||||
Changes in Assets and Liabilities
|
||||||||
(Increase) Decrease in Operating Assets:
|
||||||||
Accounts Receivable
|
(4,418,000 | ) | 2,095,000 | |||||
Inventory
|
(594,000 | ) | (725,000 | ) | ||||
Prepaid Expenses and Other Current Assets
|
89,000 | 126,000 | ||||||
Deposits
|
(1,000 | ) | 130,000 | |||||
Other Assets
|
(51,000 | ) | (100,000 | ) | ||||
Increase (Decrease) in Operating Liabilities
|
||||||||
Accounts payable and accrued expenses
|
705,000 | 213,000 | ||||||
Deferred Rent
|
19,000 | 19,000 | ||||||
Income Taxes payable
|
616,000 | 493,000 | ||||||
Customer Deposits
|
3,000 | - | ||||||
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES
|
(2,338,000 | ) | 3,357,000 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES
|
||||||||
Capitalized engineering costs
|
(54,000 | ) | (107,000 | ) | ||||
Purchase of property and equipment
|
(187,000 | ) | (45,000 | ) | ||||
NET CASH USED IN INVESTING ACTIVITIES
|
(241,000 | ) | (152,000 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
||||||||
Notes payable - Sellers
|
(168,000 | ) | (157,000 | ) | ||||
Capital lease obligations
|
(108,000 | ) | (185,000 | ) | ||||
Note payable - Revolver
|
4,183,000 | (1,914,000 | ) | |||||
Payments of note payable - Term Loan
|
(450,000 | ) | (450,000 | ) | ||||
Payments related to Lease Impairment
|
(19,000 | ) | (23,000 | ) | ||||
Dividends Paid
|
(733,000 | ) | - | |||||
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
|
2,705,000 | (2,729,000 | ) | |||||
NET INCREASE IN CASH AND CASH EQUIVALENTS
|
126,000 | 476,000 | ||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
|
561,000 | 490,000 | ||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD
|
$ | 687,000 | $ | 966,000 | ||||
Supplemental cash flow information
|
||||||||
Cash paid during the period for interest
|
$ | 251,000 | $ | 381,000 | ||||
Supplemental cash flow information
|
||||||||
Cash paid during the period for income taxes
|
$ | 86,000 | $ | - | ||||
Supplemental schedule of non-cash investing and financing activities
|
||||||||
Dividends payable
|
$ | 880,000 | $ | 358,000 |
Customer
|
Percentage of Sales
|
|||||||||
2014
|
2013
|
|||||||||
(Unaudited)
|
(Unaudited)
|
|||||||||
1 | 32.3 | 25.8 | ||||||||
2 | 22.2 | ** | ||||||||
3 | * | 18.3 | ||||||||
4 | * | 15.2 |
* Customer was less than 10% of sales for the quarter ended March 31, 2014
|
||||
** Customer was less than 10% of sales for the quarter ended March 31, 2013
|
Customer
|
Percentage of Receivables
|
|||||||||
March
|
December
|
|||||||||
2014
|
2013
|
|||||||||
(Unaudited)
|
||||||||||
1 | 25.1 | ** | ||||||||
2 | 17.8 | 22.8 | ||||||||
3 | * | 20.1 |
* Customer was less than 10% of Gross Accounts Receivable at March 31, 2014
|
|||||
** Customer was less than 10% of Gross Accounts Receivable at December 31, 2013
|
March 31,
|
March 31,
|
|||||||
2014
|
2013
|
|||||||
(Unaudited)
|
(Unaudited)
|
|||||||
Weighted average shares outstanding used to compute basic earning per share
|
5,863,564 | 5,711,093 | ||||||
Effect of dilutive stock options and warrants
|
262,345 | 98,479 | ||||||
Weighted average shares outstanding and dilutive securities used to compute dilutive earnings per share
|
6,125,909 | 5,809,572 |
March 31,
|
March 31,
|
|||||||
2014
|
2013
|
|||||||
(Unaudited)
|
(Unaudited)
|
|||||||
Stock Options
|
17,048 | 12,548 | ||||||
Warrants
|
- | 250 | ||||||
17,048 | 12,798 |
March 31,
|
December 31,
|
|||||||
2014
|
2013
|
|||||||
(Unaudited)
|
||||||||
Accounts Receivable Gross
|
$ | 13,798,000 | $ | 9,367,000 | ||||
Allowance for Doubtful Accounts
|
(889,000 | ) | (783,000 | ) | ||||
Accounts Receivable Net
|
$ | 12,909,000 | $ | 8,584,000 |
March 31,
|
December 31,
|
||||||||
2014
|
2013
|
||||||||
(Unaudited)
|
|||||||||
Machinery and Equipment
|
$ | 6,360,000 | $ | 6,251,000 |
5 - 8 years
|
||||
Capital Lease Machinery and Equipment
|
5,261,000 | 5,261,000 |
5 - 8 years
|
||||||
Tools and Instruments
|
5,083,000 | 5,009,000 |
1.5 - 7 years
|
||||||
Automotive Equipment
|
59,000 | 59,000 |
5 years
|
||||||
Furniture and Fixtures
|
257,000 | 257,000 |
5 - 8 years
|
||||||
Leasehold Improvements
|
646,000 | 646,000 |
Term of Lease
|
||||||
Computers and Software
|
361,000 | 357,000 |
4-6 years
|
||||||
Total Property and Equipment
|
18,027,000 | 17,840,000 | |||||||
Less: Accumulated Depreciation
|
(11,869,000 | ) | (11,317,000 | ) | |||||
Property and Equipment, net
|
$ | 6,158,000 | $ | 6,523,000 |
March 31,
|
December 31,
|
||||||||
2014
|
2013
|
||||||||
(Unaudited)
|
|||||||||
Customer Relationships
|
$ | 5,815,000 | $ | 5,815,000 |
5 to 14 years
|
||||
Trade Names
|
770,000 | 770,000 |
20 years
|
||||||
Technical Know-how
|
660,000 | 660,000 |
10 years
|
||||||
Non-Compete
|
50,000 | 50,000 |
5 years
|
||||||
Professional Certifications
|
15,000 | 15,000 |
.25 to 2 years
|
||||||
Total Intangible Assets
|
7,310,000 | 7,310,000 | |||||||
Less: Accumulated Amortization
|
(2,875,000 | ) | (2,584,000 | ) | |||||
Intangible Assets, net
|
$ | 4,435,000 | $ | 4,726,000 |
March 31,
|
December 31,
|
|||||||
2014
|
2013
|
|||||||
(Unaudited)
|
||||||||
Revolving credit note payable to PNC Bank N.A. ("PNC")
|
$ | 16,213,000 | $ | 12,029,000 | ||||
Term loan, PNC
|
1,498,000 | 1,948,000 | ||||||
Capital lease obligations
|
1,680,000 | 1,787,000 | ||||||
Notes payable to sellers of WMI
|
563,000 | 732,000 | ||||||
Junior subordinated notes
|
1,000,000 | 1,000,000 | ||||||
Subtotal
|
20,954,000 | 17,496,000 | ||||||
Less: Current portion of notes and capital obligations
|
(17,735,000 | ) | (14,969,000 | ) | ||||
Notes payable and capital lease obligations, net of current portion
|
$ | 3,219,000 | $ | 2,527,000 |
(i)
|
a $20,000,000 revolving loan (includes inventory sub-limit of $12,500,000) and
|
(ii)
|
a $1,948,000 term loan.
|
(i)
|
a $20,000,000 revolving loan (includes inventory sub-limit of $12,500,000) and
|
(ii)
|
a $2,676,000 term loan.
|
For the twelve months ending
|
Amount
|
|||
March 31, 2015
|
$ | 501,000 | ||
March 31, 2016
|
382,000 | |||
March 31, 2017
|
615,000 | |||
PNC Term Loan Payable
|
1,498,000 | |||
Less: Current portion
|
(501,000 | ) | ||
Long-term portion
|
$ | 997,000 |
For the twelve months ending
|
Amount
|
|||
March 31, 2015
|
$ | 570,000 | ||
March 31, 2016
|
570,000 | |||
March 31, 2017
|
414,000 | |||
March 31, 2018
|
268,000 | |||
March 31, 2019
|
101,000 | |||
Total future minimum lease payments
|
1,923,000 | |||
Less: Imputed Interest
|
(243,000 | ) | ||
Less: Current Portion
|
(458,000 | ) | ||
Total Long-Term Portion
|
$ | 1,222,000 |
March 31,
|
December 31,
|
|||||||
2014
|
2013
|
|||||||
(Unaudited)
|
||||||||
Former Welding Stockholders
|
$ | 563,000 | $ | 732,000 | ||||
Less: Current Portion
|
(563,000 | ) | (691,000 | ) | ||||
Total Long-Term portion
|
$ | - | $ | 41,000 |
For the twelve months ending
|
Amount
|
|||
March 31, 2015
|
$ | 563,000 | ||
Former WMI Stockholders Notes Payable
|
563,000 | |||
Less: Current portion
|
(563,000 | ) | ||
Long-term portion
|
$ | - |
2014
|
2013
|
|||||||
(Unaudited)
|
(Unaudited)
|
|||||||
Current
|
||||||||
Federal
|
$ | 536,000 | $ | 376,000 | ||||
State
|
156,000 | 113,000 | ||||||
Total Expense
|
692,000 | 489,000 | ||||||
Deferred Tax Benefit
|
(108,000 | ) | - | |||||
Net Expense for Income Taxes
|
$ | 584,000 | $ | 489,000 |
March 31,
|
December 31,
|
|||||||
2014
|
2013
|
|||||||
(Unaudited)
|
||||||||
Deferred tax assets:
|
||||||||
Current:
|
||||||||
Bad debts
|
$ | 356,000 | $ | 313,000 | ||||
Inventory - 263A adjustment
|
749,000 | 729,000 | ||||||
Account payable, accrued expenses and reserves
|
9,000 | 9,000 | ||||||
Total current deferred tax
|
$ | 1,114,000 | $ | 1,051,000 | ||||
Non- Current
|
||||||||
Capital loss carry forwards
|
$ | 1,088,000 | $ | 1,088,000 | ||||
Section 1231 loss carry forward
|
4,000 | 4,000 | ||||||
Stock based compensation - options and restricted stock
|
523,000 | 521,000 | ||||||
Capitalized engineering costs
|
424,000 | 503,000 | ||||||
Deferred rent
|
460,000 | 453,000 | ||||||
Amortization - NTW Transaction
|
472,000 | 475,000 | ||||||
Lease Impairment
|
43,000 | 51,000 | ||||||
Deferred gain on sale of real estate
|
190,000 | 194,000 | ||||||
Total deferred tax assets before valuation allowance
|
3,204,000 | 3,289,000 | ||||||
Valuation allowance
|
(1,092,000 | ) | (1,092,000 | ) | ||||
Total deferred tax assets after valuation allowance
|
2,112,000 | 2,197,000 | ||||||
Deferred tax liabilities:
|
||||||||
Property and equipment
|
(1,382,000 | ) | (1,497,000 | ) | ||||
Goodwill - NTW Transaction
|
(8,000 | ) | (7,000 | ) | ||||
Amortization - Welding Transaction
|
(492,000 | ) | (508,000 | ) | ||||
Total Deferred Tax Liability
|
(1,882,000 | ) | (2,012,000 | ) | ||||
Net deferred tax asset
|
$ | 1,344,000 | $ | 1,236,000 |
2014
|
2013
|
||||||||
(Unaudited)
|
(Unaudited)
|
||||||||
AIM
|
|||||||||
Net Sales
|
$ | 7,131,000 | $ | 7,478,000 | |||||
Gross Profit
|
1,285,000 | 1,460,000 | |||||||
Pre Tax Income
|
328,000 | 493,000 | |||||||
Assets
|
21,635,000 | 23,871,000 | |||||||
WMI
|
|||||||||
Net Sales
|
3,313,000 | 3,139,000 | |||||||
Gross Profit
|
838,000 | 849,000 | |||||||
Pre Tax Loss
|
(331,000 | ) | (11,000 | ) | |||||
Assets
|
12,547,000 | 9,796,000 | |||||||
NTW
|
|||||||||
Net Sales
|
5,009,000 | 3,708,000 | |||||||
Gross Profit
|
1,922,000 | 1,338,000 | |||||||
Pre Tax Income
|
1,020,000 | 493,000 | |||||||
Assets
|
14,337,000 | 13,563,000 | |||||||
Corporate
|
|||||||||
Net Sales
|
- | - | |||||||
Gross Profit
|
- | - | |||||||
Pre Tax Loss
|
(92,000 | ) | (207,000 | ) | |||||
Assets
|
8,156,000 | 12,256,000 | |||||||
Consolidated
|
|||||||||
Net Sales
|
15,453,000 | 14,325,000 | |||||||
Gross Profit
|
4,045,000 | 3,647,000 | |||||||
Pre Tax Income
|
925,000 | 768,000 | |||||||
Provision for Taxes
|
584,000 | 489,000 | |||||||
Net Income
|
341,000 | 279,000 | |||||||
Elimination of Assets
|
(2,121,000 | ) | (8,064,000 | ) | |||||
Assets
|
54,554,000 | 51,422,000 |
Statement of Operations Data (Unaudited)
|
||||||||
2014
|
2013
|
|||||||
Net sales
|
$ | 15,453,000 | $ | 14,325,000 | ||||
Cost of sales
|
11,408,000 | 10,678,000 | ||||||
Gross profit
|
4,045,000 | 3,647,000 | ||||||
Operating and interest costs
|
3,119,000 | 2,854,000 | ||||||
Other income (expense) net
|
(1,000 | ) | (25,000 | ) | ||||
Income taxes
|
584,000 | 489,000 | ||||||
Net Income
|
$ | 341,000 | $ | 279,000 | ||||
Balance Sheet Data
|
||||||||
March 31, 2014
|
December 31, 2013
|
|||||||
(Unaudited) | ||||||||
Cash and cash equivalents
|
$ | 687,000 | $ | 561,000 | ||||
Working capital
|
13,301,000 | 12,531,000 | ||||||
Total assets
|
54,554,000 | 50,172,000 | ||||||
Total stockholders' equity
|
21,060,000 | 21,613,000 |
Three Months Ended March 31,
|
|||||||||
2014
|
2013
|
||||||||
(Unaudited)
|
(Unaudited)
|
||||||||
AIM
|
|||||||||
Net Sales
|
$ | 7,131,000 | $ | 7,478,000 | |||||
Gross Profit
|
1,285,000 | 1,460,000 | |||||||
Pre Tax Income
|
328,000 | 493,000 | |||||||
Assets
|
21,635,000 | 23,871,000 | |||||||
WMI
|
|||||||||
Net Sales
|
3,313,000 | 3,139,000 | |||||||
Gross Profit
|
838,000 | 849,000 | |||||||
Pre Tax Loss
|
(331,000 | ) | (11,000 | ) | |||||
Assets
|
12,547,000 | 9,796,000 | |||||||
NTW
|
|||||||||
Net Sales
|
5,009,000 | 3,708,000 | |||||||
Gross Profit
|
1,922,000 | 1,338,000 | |||||||
Pre Tax Income
|
1,020,000 | 493,000 | |||||||
Assets
|
14,337,000 | 13,563,000 | |||||||
Corporate
|
|||||||||
Net Sales
|
- | - | |||||||
Gross Profit
|
- | - | |||||||
Pre Tax Loss
|
(92,000 | ) | (207,000 | ) | |||||
Assets
|
8,156,000 | 12,256,000 | |||||||
Consolidated
|
|||||||||
Net Sales
|
15,453,000 | 14,325,000 | |||||||
Gross Profit
|
4,045,000 | 3,647,000 | |||||||
Pre Tax Income
|
925,000 | 768,000 | |||||||
Provision for Taxes
|
584,000 | 489,000 | |||||||
Net Income
|
341,000 | 279,000 | |||||||
Elimination of Assets
|
(2,121,000 | ) | (8,064,000 | ) | |||||
Assets
|
54,554,000 | 51,422,000 |
·
|
Net sales at AIM for the three months ended March 31, 2014 were $7,131,000, a decrease of approximately $(347,000) or (4.6%) compared with $7,478,000 for the three months ended March 31, 2013. The decrease in sales at AIM results from continuing reductions in defense spending and continued delays in manufacturing landing gear product for the Navy’s E2-D aircraft due to late shipments from various suppliers.
|
·
|
Net sales at Welding for the three months ended March 31, 2014 were $3,313,000, an increase of approximately $174,000 or 5.5% compared with $3,139,000 for the three months ended March 31, 2013. Net sales at Welding for 2014 included sales of $318,000 relating to Decimal and MS which were acquired on July 1, 2013 and November 6, 2013, respectively.
|
·
|
Net sales at NTW for the three months ended March 31, 2014 were $5,009,000, an increase of $1,301,000 or 35.0% compared with net sales of $3,708,000 for the three months ended March 31, 2013.
|
Customer
|
Percentage of Sales
|
|||||||
2014
|
2013
|
|||||||
(Unaudited)
|
(Unaudited)
|
|||||||
Sikorsky Aircraft
|
32.3 | 25.8 | ||||||
Associated Aircraft Manufacturing
|
22.2 | ** | ||||||
Goodrich Landing Gear Systems
|
* | 18.3 | ||||||
United States Department of Defense
|
* | 15.2 |
* Customer was less than 10% of sales for the quarter ended March 31, 2014
|
** Customer was less than 10% of sales for the quarter ended March 31, 2013
|
●
|
Consolidated: Gross profit from operations for the three months ended March 31, 2014 increased by approximately $398,000 or 10.9%, to approximately $4,045,000 or approximately 26.2% of sales as compared to gross profit of $3,647,000 or approximately 25.5% for the comparable period in 2013.The increase in gross profit results from the increase in the proportion of our sales generated by NTW which earns a greater gross profit margin on sales than our other subsidiaries.
|
|
●
|
AIM: Gross profit for three months ended March 31, 2014 at AIM decreased by approximately $(175,000) or (12.0%) to $1,285,000 as compared to $1,460,000 for the comparable period in 2013. The decrease in gross margin is disproportionate to the decrease in net sales. The gross profit margin at AIM decreased from 19.5% of sales in 2013 to 18.0% of sales in 2014.
|
|
●
|
WMI: Gross profit at Welding for three months ended March 31, 2014 decreased by approximately $(11,000) or (1.3%) to $838,000 for 2014 compared to $849,000 for the comparable period in 2013. Gross margin decreased while sales increased due to inclusion of Decimal and MS products in 2014 which have lower gross profit margin than WMI’s traditional products.
|
|
●
|
NTW: Gross profit for three months ended March 31, 2014 increased by approximately $584,000 or 43.6% to $1,922,000 compared to $1,338,000 for the comparable period in 2013. The increase in gross profit results from increased sales and from a slight increase in gross margin percentage.
|
●
|
Consolidated SG&A costs for the three months ended March 31, 2014 totaled $2,816,000 and increased by $347,000 or 14.0% compared to $2,469,000 for the three months ended March 31, 2013. An increase in SG&A costs at WMI, principally as a result of the Decimal and MS acquisition, accounted for substantially all of the increase. The principal components of SG&A costs were:
|
||
|
o
|
AIM: SG&A costs for the three months ended March 31, 2014 totaled approximately $774,000 a decrease of $(21,000) or (2.6%) compared to $795,000 for the comparable period 2013.
|
|
|
o
|
WMI: SG&A costs for the three months ended March 31, 2014 totaled approximately $1,139,000 an increase of $310,000 or approximately 37.4% compared to $829,000 for the comparable period in 2013. The increase in SG&A costs at WMI reflects the recent additions of the operations of Decimal and MS.
|
|
|
o
|
NTW: SG&A costs totaled approximately $903,000 for the three months ended March 31, 2014 an increase of $58,000 or approximately 6.9% compared to $845,000 for the comparable period in 2013.
|
Three months ended
|
Three months ended
|
|||||||
March 31, 2014
|
March 31, 2013
|
|||||||
(unaudited)
|
(unaudited)
|
|||||||
Cash (used in) provided by
|
||||||||
Operating activities
|
$ | (2,338 | ) | $ | 3,357 | |||
Investing activities
|
(241 | ) | (152 | ) | ||||
Financing Activities
|
2,705 | (2,729 | ) | |||||
Net increase in cash and cash equivalents
|
$ | 126 | $ | 476 |
31.1
|
Certification of Principal Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended.
|
|
31.2
|
Certification of the Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended.
|
32.1
|
|
Certification of the Principal Executive Officer pursuant to Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
32.2
|
Certification of the Principal Financial Officer pursuant to Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
101.INS*
|
XBRL Instance Document
|
|
101.SCH*
|
XBRL Taxonomy Extension Schema
|
|
101.CAL*
|
XBRL Taxonomy Extension Calculation
|
|
101.DEF*
|
XBRL Taxonomy Extension Definition
|
|
101.LAB*
|
XBRL Taxonomy Extension Label
|
|
101.PRE*
|
XBRL Taxonomy Extension Presentation
|
AIR INDUSTRIES GROUP, INC.
|
|||
By:
|
/s/ Peter D. Rettaliata
|
||
Peter D. Rettaliata
|
|||
President and Chief Executive Officer
|
|||