Sentiment Analysis of the earnings transcript to help figure out if there are any bullish or bearish sentiments that could be gathered from it. We're doing ML and AI based analysis on the earnings call to get some more insights.
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| So I believe that the platforms that we're in are robust and we'll be able not only to sustain but help increase our sales and bottom line in the future |
| In summary, the third quarter was a period of exciting new opportunities for Air Industries as execution of our growth plan is producing tangible results |
| In contrast, third quarter gross profit at Sterling improved significantly year-over-year and increased more than six-fold year-to-date due to higher sales, product mix and increased absorption of overhead |
| So we believe the margin on those parts will be better than products that we haven't made before, obviously |
| Sterling's increasing sales, favorable product mix and higher volume and better cost absorption continue to contribute to its strong and improving profitability |
| Our folks in business development have been very successful of bringing in some additional opportunities |
| Our balance sheet remains robust, more than adequate for immediate needs |
| And just on the sales line, just based on what you said in the press release, we should be able to do better than -- we should have a sequential increase from that $12.3 million, but we might not reach the peak that we had in the second quarter of over $13 million |
| Because of that investment, we have great momentum in business development and expect to continue to drive our bookings and sales level higher from here |
| Thankfully, these material shortages have begun to ease, and we expect business to rebound in the fourth quarter of 2023 and into 2024 to both higher levels of sales and EBITDA |
| As I stated in today's news release, I want to emphasize on this call, the third quarter was a period of exciting new opportunities for Air Industries as we further executed on our growth plan |
| Accomplishing this in just a few short months after our initial production is remarkable |
| We experienced increasing traction of our growth strategy for Sterling Engineering in Connecticut |
| Air Industries increased business development activity has resulted in a notable increase in our quoting activity and bookings |
| I am pleased that they are both still people I can count on in their new roles |
| Of course, with the work now going through our shop, our throughput will increase as well, and we'll be able to absorb more manufacturing overhead with the additional hours going through the shop |
| On a trailing three-month basis, bookings of new business have doubled over $6 million a month compared to December 31st of 2022 |
| Howard Halpern In terms of the plan to get you to a sustained period of operating income, it appears that's going to be contingent on improving gross margins more because you have a good cost operating cost structure |
| So that single product this year for us was a tremendous, could have had a tremendous difference in how our year ran both from a profitability and sales standpoint |
| For all three periods, lower sales at CMS were partially offset by improving sales at our Sterling subsidiary |
| Lastly, our initiative to expand in the nuclear submarine business continues to produce results |
| We're getting traction with nuclear submarines |
| Accounts payable and accounts receivable are very current, and we have been successful in reducing our inventory |
| As I discussed on the past calls, our strategy for Sterling is to expand its sales, especially through long-term agreements, modernize its plan and invest in critical new equipment, providing unique capabilities and differentiate it in the marketplace |
| Our current consolidated 18-month backlog is continuing to grow and now stands at more than $73.7 million, an increase of $6.6 million or 9.8% year-to-date |
| We believe that being able to control operating costs in this inflationary environment is significant achievements |
| The new wins this year are the result of the company's continued investment in its business and its people |
| I am 120% confident that the execution level at Air Industries Group is on peak right now |
| We will be able to increase our margins based on that |
| As I said in our announcement, a good CFO is the CEO's right hand, and I personally can't be thankful for enough for the dedication of both Scott and Mike for the whole of Air Industries |
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| As Lou said, our third quarter net sales were $12.3 million, which was 6.9% lower than the second quarter of 2023 and 7.4% lower than the third quarter of 2022 |
| Year-to-date sales of $38 million were down 3.3% from $39.3 million compared to the same period a year ago |
| Lou mentioned that there has been a shortage of raw material, particularly for one product that had a measurable negative effect on sales |
| The decline in gross profit was mainly due to lower sales exacerbated by under absorption of manufacturing overhead at CMS |
| Gross profit for the third quarter of 2023 was $1.2 million which is 43.4% lower than the second quarter of 2023 and 45.2% lower than the third quarter of 2022 |
| Gross profit was $1.2 million or 10% of sales, and we incurred a net loss of $1.3 million |
| Gross profit for the first nine months of 2023 totaled $5.3 million, a decrease of 21.8% from the comparable period in 2022 |
| I say that even though our third quarter was impacted by shortages of critical raw materials for a certain product |
| This has reduced EBITDA by perhaps $750,000 during the nine months |
| With the onset of COVID, military spending was not necessarily reduced, but orders weren't placed as timely as they should |
| Year-to-date, the operating loss was $882,000 compared with operating income of $626,000 reported for the 2022 period |
| We incurred an operating loss of $796,000 in the third quarter of 2023 versus operating income of $72,000 in the second quarter of 2023, and operating income of $169,000 in the third quarter of 2022 |
| During the first nine months of 2023, we had orders for over 300 parts, which were worth nearly $4 million that due to the lack of raw material, we could not produce or ship |
| And we kind of suffered to that this year, some last year and some this year because materials in this environment or in this field are roughly a year out if you're lucky |
| Operating expenses for the third quarter of 2023 were $2 million, a decline of 3.5% from the second quarter of 2023 and 2.4% lower than the third quarter of 2022 |
| As Lou indicated, these shortages have started to ease |
| Execution right now is not the problem |
| Additionally, we reduced our overdue shipments by a whopping 58% in the same time frame |
| Well, I know you put in a lot of hard work this year and hopefully, cross our fingers, things will only keep getting better each quarter as we go forward |
| Additionally, as Lou said, we believe based on the easing of this material shortage for one specific product which is a high margin or higher margin products |
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