Air Industries Group · AMEX:AIRI
Air Industries — Taglich Brothers Investor Conference May 2016
21 slides from Air Industries's conference presentation, May 4, 2016
Slide 1: Air Industries Group - Taglich Brothers Investor Conference
AIR INDUSTRIES GROUP Taglich Brothers Investor Conference May 2016 Group (NYSE: AIRI) 360 Motor Pkwy Suite 100 Hauppauge, NY 11788 USA
Slide 2: Safe Harbor Statement
Air Industries Group Safe Harbor Statement Except for the historical information contained herein, the matters discussed in this presentation contain forward-looking statements. The accuracy of these statements is subject to significant risks and uncertainties. Actual results could differ materially
Slide 3: Investment Opportunities
Investment Opportunities » Strong reputation and track record of delivering mission critical parts and assemblies in the aerospace and defense industry for over 50 years » Improving macro economic environment post sequestration » Established base business — expected to do $85-90 million in revenue w
Slide 4: Business Sectors
Business Sectors gamble. Machining CRICR TRIES 2015 Revenue: $27M 2015 Revenue: $42M Turbines & Engines 2015 Revenue: $11M STERLING ENGINEERING = Landing gear = Flight controls = Axles = Large milling, turning Welded, structural and precision sheet metal assemblies Tube bending Dip-brazed assemblies
Slide 5: Business Sector Performance
s g 5 2 6 3 g 3 2 a ct i a re] z 5 a < x S a La) z <8 cies ad Ss ag BZ Business Sector Performance Uldlllll, Wlddddda 2016 2014 $4,000 Wd 2016 Wd Say 2014 2015 $1,000 (7,000) Wlddddda SSSI [| 2016 2015 EBITDA Wlllddddda Ld ry $2,000 2016 2015
Slide 6: State of the Industry- Commercial Aircraft
State of the Industry- Commercial Aircraft » Using Airbus, Boeing and industry forecast data, over the next decade annual aircraft production levels are anticipated to increase by 20%, or more. 1.816 1,702 1,718 1,734 1,750 1,766 1,782 1,799 FA e 1,640 1,655 1,671 1.686 I sor 1580 1595 ‘ee 1,625 1,5
Slide 7: State of the Industry— Military Spending
State of the Industry— Military Spending » The world is stilla dangerous place, and defense spending is projected to continue modest growth thru 2020. 600 400 o Department of Defense Discret Budget Authori (As Rettected ta SBA S004 S044 570.0 Se: S73 _ S864 we | Pos es 343 9) S473 S700 4963 = . FY 2
Slide 8: State of the Industry— Turbine Engine Business
State of the Industry— Turbine Engine Business Land Based Turbine Aviation Gas Turbine ~31K TWh ~3X _— “| ‘ ~24K TWh ca other. Hydro 570 GW of retirements Wind Hydro 150% Gos a Turbines Gos Engines = pon : = Central Power Equipment Orders* T ee a: Energy ‘14 #700 GW song conettes capac ode Energy ‘2
Slide 9: Key Customers
Key Customers » Weare a critical components provider for several aerospace and defense customers = Decades long relationships = Sole source position on several products = Multi-Year contracts ‘ea Tecoges RS Ea 2) ss \ “489 wv EXELIS RAMAN 16 Prem © RG ute Aerospace Systems Sikorsky Q2SEEING wonrmon
Slide 10: Aircraft Overview (Stable Platforms)
Aircraft Overview (Stable Platforms) >» We are a critical components manufacturer for many aircraft platforms Installed or Type Baheed Activity \. = + Significant Content Already - (Flight Safety $15 - $18M) —-> UH-60 3,600 + Adding Landing Gear components pe + Engine Fairings CH-47 876 * Working wi
Slide 11: Worldwide Aircraft Distribution - FMS Opportunity
Worldwide Aircraft Distribution —- FMS Opportunity » No penetration before 2015 —low hanging fruit Key > (Me F-16 i Fs " (5) Blackhawk ae
Slide 12: Leadership Team
Leadership Team ->-- Corporate Team New Changes
Slide 13: BD Organization
BD Organization AIRI BD Organization ‘As of 04/25/16 Marty Ener ‘Scot Coston ‘Complex Machining Sacte ‘erosion Sector GREEN indicates on-board less than one year
Slide 14: Organic Growth Opportunities
Organic Growth Opportunities New Major Customers (Space X, Lockheed Martin, Raytheon, Orbital) Consolidation of Suppliers New Major Platforms Major OEMs looking for bundled (AMRAAM Missile, Raptor Rocket, solutions StrategicBomber) 10-15% Annual Organic Growth Pent-Up Demand for New 6 Person BD Team
Slide 15: 2016: Q1 Bookings by Site
2016: Q1Bookings by Site Thru April (000s) 0 2 201 > 3 f: V MMMM ( es ° g VM Mm: < 3 2 | x aa ” = s 8 S oo ns
Slide 16: Cumulative Bookings, 2015-2016
Cumulative Bookings, 2015-2016 (000’s) $100,000 $90,000 $80,000 $70,000 $60,000 §S932016 Actual Cum. $50,000 —2015 Actual Cum. $40,000 2016 Target Cum $30,000 $20,000 $10,000 $s Jan Feb Mar = Apr May) Jun Jul,» Aug) Sep. Oct. «Ss Novae > 2016 YTD bookings are 31.4% greater than YTD bookings thru Apr
Slide 17: Opportunity for Margin Improvement
Opportunity for Margin Improvement Margin expansion is achieved through increased volume, and is enhanced by: » Aerostructures sector site consolidation: two sites consolidated by end of Q2 » Reductions achieved via acquisitions further leveraged by competitive analysis of HR services and medical be
Slide 18: Financials
Financials ‘Air Industries Group (NYSE: AIRI) 360 Motor Pkwy Suite 100 Hauppauge, NY 11788 USA
Slide 19: Income Statement — Historical Summary
Income Statement — Historical Summary a EE Net Sales S 48,000 $ 53,700 $ 64,200 $62,800 $ 04,300 $80,442 $80,300 YoY Growth 10.50% 19.00% 2.20% 2.40% 25.10% 12.25% Gross Profit 7087 00 20,700 Margin % 20.30% 24.20% 21.50% 22.92% Adjusted EBITDA 200 6,800 8,000 8,000 8,300 Margit 12.70% 14.00% 12.70%
Slide 20: Income Statement — 2015 Results by Sector
Income Statement — 2015 Results by Sector 2015 Results by Sector Revenue Cost of Goods Sold Gross Profit 10,412 386 17,281 Margin % 24.6% 3.5% 21.48% Operating Costs fincluding Com) 5,818 3,461 Operating Income (3,075) As a% of Revenue 7.2% -28.1% Ebitda 5,822 1,270 (1,733) 5,354 As a% of Revenue 13
Slide 21: Income Statement — Q1'2016 Results by Sector
Income Statement — Q1’2016 Results by Sector Q1'2016 Results By Sector Revenue oe 466 EE 161 po see 558 mace 184 Cost of Goods Sold 5,608 4,213 2,543 12,364 Gross Profit 1,858 947 15 2,821 Margin % 24.9% 18.4% 0.6% 18.58% Ebitda 832 (548) (451) (167) Asa % of Revenue 11.1% -10.6% -17.6% -11% Q2 - Q4
Air Industries Group — Taglich Brothers Investor Conference May 2016 on 6ix