Air Industries Group — Q3 2026 Earnings Summary

Financial Performance:

• Net sales for the three months ended September 30, 2026, were $14.6 million, a 41.1% increase from $10.3 million in the same period in 2025.
• Gross profit for the three months ended September 30, 2026, was $3.7 million, a 61.4% increase from $2.3 million in 2025.
• Gross margin for the three months ended September 30, 2026, increased 330 basis points to 25.5% compared to 22.2% in 2025.
• Operating expenses for the three months ended September 30, 2026, were $2.4 million, a 21.6% increase from $2.0 million in 2025.
• Operating income for the three months ended September 30, 2026, was $1.3 million, a 311% increase from $316,000 in 2025.
• Net income for the three months ended September 30, 2026, was $946,000, compared to a net loss of $44,000 in 2025.
• Diluted net income per share for the three months ended September 30, 2026, was $0.19, compared to a net loss of $0.01 per share in 2025.
• Adjusted EBITDA for the three months ended September 30, 2026, was $2.684 million, a 112.0% increase from $1.266 million in 2025.
• Net sales for the nine months ended September 30, 2026, were $38.2 million, an 8.7% increase from $35.1 million in 2025.
• Gross profit for the nine months ended September 30, 2026, was $8.8 million, a 38.3% increase from $6.4 million in 2025.
• Gross margin for the nine months ended September 30, 2026, increased 490 basis points to 23.0% compared to 18.1% in 2025.
• Operating expenses for the nine months ended September 30, 2026, were $8.4 million, a 24.2% increase from $6.8 million in 2025.
• Operating income for the nine months ended September 30, 2026, was $368,000, compared to a loss of $422,000 in 2025.
• Net loss for the nine months ended September 30, 2026, was $902,000, an improvement from a net loss of $1.5 million in 2025.
• Diluted net loss per share for the nine months ended September 30, 2026, was $0.19, compared to $0.36 in 2025.
• Adjusted EBITDA for the nine months ended September 30, 2026, was $5.426 million, a 104.4% increase from $2.655 million in 2025.
• Operating expenses in the third quarter included $539,000 in stock compensation and merger-related costs; excluding these, operating expenses were essentially flat.
• Operating expenses for the nine months included $2.6 million in stock compensation and merger-related costs; excluding these, operating expenses declined 3.7%.

Guidance and Future Outlook:

• Management expects improved financial performance to continue into the fourth quarter and 2027.
• Confidence is bolstered by net sales of approximately $5.6 million in October 2026, which is consistent with and exceeds third-quarter monthly revenues.
• Forecast sales for the remaining two months of 2026 and calendar year 2027 are supported by a backlog of firm customer orders totaling $95.4 million.

Business Segments and Product Lines:

• Air Industries Group manufactures precision components and assemblies for large aerospace and defense prime contractors.
• Products include landing gears, flight controls, engine mounts, and components for aircraft jet engines, ground turbines, and other complex machines.

Market and Competitive Landscape:

• The company serves mission-critical operations essential for the safety of military personnel and civilians.
• Management focused on achieving a stable shipping cadence and improving gross profit by minimizing disruptions from production schedule changes.

Risks and Challenges:

• Risks include the ability to consummate the contemplated merger with Tenax Aerospace Acquisition, LLC.
• Potential risks involve variability in project size, scope, and duration, as well as inherent discrepancies between actual results and management estimates.
• Other risks include regulatory delays, changes in government funding and budgets, and general economic conditions.

Management Commentary and Tone:

• Management stated that results for the third quarter and nine months of 2026 showed improvement in net sales with gross profit and margin improving disproportionately to the sales increase.
• Management confirmed that efforts to stabilize shipping and improve margins were successful.
• The tone is confident regarding future performance, citing the strength of the $95.4 million backlog.

Other Key Points:

• The company is in a pending merger with Tenax Aerospace Acquisition, LLC, with related costs of $539,000 in Q3 2026 and $1.704 million for the nine months ended September 30, 2026.
• Pro-forma operating income for the three months ended September 30, 2026, excluding merger and stock compensation costs, would have been $1.838 million, a 293% increase from $468,000 in 2025.
• Pro-forma net income for the three months ended September 30, 2026, excluding merger and stock compensation costs, would have been $1.5 million ($0.31 per share), compared to $108,000 ($0.03 per share) in 2025.
• Pro-forma operating income for the nine months ended September 30, 2026, excluding merger and stock compensation costs, would have been $2.9 million, a 950% increase from $322,000 in 2025.
• Pro-forma net income for the nine months ended September 30, 2026, excluding merger and stock compensation costs, would have been $1.7 million ($0.35 per share), compared to a net loss of $710,000 ($0.18 per share) in 2025.