AIR INDUSTRIES GROUP
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Report Link: Updated Research Report (Dated 11/14/2019)
Analyst: John Nobile
Taglich Rating: Speculative Buy
Price Target: $2.50
Time Horizon: 12 Months
Rating Established: July 28, 2017
Price When Established: $1.38
Most Recent Report: November 14, 2019
Price When Issued: $1.23
Air Industries Announces Long-Term Agreement with Potential Sales of Over $60 Million
On January 14, 2020, Air Industries Group (NYSE AMEX: AIRI) announced it received a new long-term agreement through its subsidiary Air Industries Machining Corporation (AIM). This five-year agreement is for thrust struts, a critical component of the Pratt & Whitney Geared-Turbo-Fan ("GTF") jet engine. The GTF powers the Airbus A-220 (formerly the Bombardier C-Series), the Mitsubishi MRJ, and the Embraer E-2 commercial airliners.
Based on the OEM’s forecast, the contract could generate potential sales of approximately $61.7 million over the five-year term. As is customary with long-term agreements, Air Industries expects to receive sequential firm orders for delivery of product against the agreement.
In 2014, AIM developed and engineered the manufacturing processes for this product, and has been producing it for the past five-years. Since the GTF engine entered into service, Air Industries has produced over 1,200 thrust struts. This new contract is a follow-on renewal of the original five-year contract. With production of the GTF accelerating, Air Industries’ customer is forecasting a significant increase in demand over the next five years. Shipping of this product is expected to start in 2H20.
Air Industries Announces New $18.9 Million Credit Facility
On January 2, 2020, Air Industries Group (NYSE AMEX: AIRI) announced that on December 31, 2019, it entered into a new, 3-year, $19.8 million credit facility consisting of a $16 million revolving credit line, and a $3.8 million term loan. Proceeds of the refinancing will be used to repay the company’s existing loans with PNC Business Credit, retire all of its capital lease obligations, and for general working capital purposes.
Borrowings under both the revolving credit line and the term loan will bear interest at a rate equal to 30-day LIBOR plus 2.5% (with a floor of 3.5%). The current interest rate will be approximately 4.25%, a reduction of over 50% from the PNC rate of 8.75%.
On a pro-forma basis for the nine months ended September 30, 2019, this new credit facility would have saved Air Industries over $1.5 million in cash.
Air Industries Announces Long-Term Contracts Totaling Over $18.2 Million
On December 4, 2019, Air Industries Group (NYSE AMEX: AIRI) announced it received new contract awards totaling $18.2 million and potential follow-on orders for an additional $13.7 million.
Air Industries Machining Corporation, a unit of the company’s Complex Machining Sector, received firm orders totaling approximately $11.9 million. The company has also been awarded exclusivity for an additional three years (2023 to 2025), covering additional product that may be ordered by AIRI’s customer, worth an estimated $13.7 million.
Sterling Engineering Corporation, AIRI’s Turbine & Engine Sector, received firm orders during October and November totaling $6.3 million which extend to 2023.
With these orders, the company’s eighteen-month firm and funded backlog increased to approximately $110 million dollars.
Air Industries Group, headquartered in Bay Shore, New York, operates primarily in the aerospace and defense industry. The company designs and manufactures structural parts and assemblies, including landing gear, arresting gear, engine mounts, flight controls, throttle quadrants, components for jet engines, and other aerospace components.
Company ReportsUpdated Research Report (Dated November 14, 2019)
Updated Research Report (Dated August 19, 2019)
Updated Research Report (Dated May 30, 2019)
Updated Research Report (Dated April 10, 2019)
Updated Research Report (Dated December 14, 2018)
Updated Research Report (Dated June 27, 2018)
Updated Research Report (Dated February 13, 2018)
Research Note Released (Dated July 28, 2017)
Updated Research Report (Dated September 30, 2016)
Updated Research Report (Dated December 15, 2015)
Updated Research Report (Dated October 1, 2015)
Updated Research Report (Dated April 17, 2015)
Updated Research Report (Dated December 9, 2014)
Updated Research Report (Dated August 21, 2014)
Updated Research Report (Dated June 20, 2014)
Initial Research Report (Dated December 18, 2013)
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