0001213900-26-035731
SEC filingAir Industries Group reported net sales of $47.9 million for fiscal year 2025, a decrease of 13.0% compared to $55.1 million in 2024. The company experienced a net loss of $1.3 million, a slight improvement from the $1.4 million net loss in the prior year. Gross profit decreased to $8.2 million, though the gross margin improved to 17.1% from 16.2%, attributed to product mix shifts and cost reductions. Operating expenses increased slightly to $8.5 million. The company's backlog grew 16.0% to $136.8 million, providing revenue visibility. However, significant liquidity concerns persist with total debt of approximately $30.1 million maturing in late 2026, and the auditor raised substantial doubt about the company's ability to continue as a going concern. A pending merger with Tenax Aerospace is a critical strategic initiative to address capital structure and liquidity challenges.
Air Industries Group reported fiscal year 2025 net sales of $47.9 million, a decrease of $7.2 million or 13.0% compared to $55.1 million in 2024. The net loss for the year was $1.3 million, an improvement of approximately $61,000 from the $1.4 million net loss in the prior year. Gross profit fell to $8.2 million from $8.9 million, but the gross margin percentage improved to 17.1% from 16.2%. Operating expenses increased slightly to $8.5 million, resulting in an operating loss of $338,000. Interest expense remained a significant burden at $1.8 million, contributing to the net loss. The company ended the year with a cash position of $680,000 and restricted cash of $3.9 million.
Net sales were primarily driven by defense and aerospace prime contractors. Revenue concentration is high, with the top two customers, RTX Corporation and Lockheed Martin, accounting for 68.5% of total net sales in 2025. RTX sales increased to 36.2% of net sales (up from 29.3%), driven by demand for the Pratt & Whitney Geared Turbo-Fan (GTF) engine program. Conversely, Northrop Grumman sales declined significantly to 6.7% of net sales (down from 18.3%), reflecting reduced demand for the E-2D Hawkeye platform. The GTF engine program became the largest platform, representing 31.4% of sales, while the UH-60 Black Hawk Helicopter contributed 21.0%.
Gross margin improved to 17.1% in 2025 from 16.2% in 2024. Management attributed this improvement to changes in sales across major platforms, favorable shifts in product mix, and implemented cost reductions. However, operating margin remained negative at -0.7% as operating expenses of $8.5 million absorbed the majority of the gross profit. The increase in operating expenses was driven by stock-based compensation and IT expenses, partially offset by lower personnel costs. Interest expense of $1.8 million further pressured profitability, resulting in the net loss.
Operating activities used $1.4 million in cash, primarily due to a $5.5 million increase in inventory, partially offset by non-cash depreciation and stock-based compensation. Investing activities used $3.1 million for capital equipment. Financing activities provided $8.3 million, largely from net borrowings of $4.7 million on the revolving credit facility and $4.6 million in net proceeds from common stock issuance. Total debt stands at approximately $30.1 million, with the Current Credit Facility ($23.5 million) maturing September 30, 2026, and Related Party Notes ($4.9 million) maturing October 1, 2026. The company's liquidity position and debt maturities raise substantial doubt about its ability to continue as a going concern.
Management's forward-looking strategy focuses on securing new contract awards, improving operations, and completing the merger with Tenax Aerospace Acquisition, LLC. The company reported a funded backlog of $136.8 million as of December 31, 2025, a 16.0% increase year-over-year, providing visibility for future revenue. The proposed merger with Tenax, if consummated, would result in Tenax owning approximately 95% of the outstanding common stock and is intended to address the company's capital structure and liquidity needs. Failure to complete the merger or refinance existing debt would have a material adverse effect on the business.