Air Industries Q3 Net Income Turns Positive at $0.19 EPS

Air Industries Group (NYSE American: AIRI) reported third-quarter 2026 net income of $946,000 and diluted earnings of $0.19 per share, reversing a $44,000 net loss in the same quarter of 2025. Net sales for the three months ended September 30, 2026, rose 41.1% to $14.6 million from $10.3 million. The precision components maker announced the results on November 9, 2026, in a press release filed as Exhibit 99.1.

Context — Why Air Industries' Swing to Profit Matters Now

The company's third quarter marks a sharp reversal from the same period a year ago, when it posted a net loss of $44,000, or $0.01 per share. That comparison is the most direct one the report supplies, and it shows a $990,000 swing in net income on $4.2 million of incremental sales.

Gross profit climbed 61.4% to $3.7 million, outpacing the 41.1% sales gain. That gap matters because it signals margin expansion rather than volume alone. Gross margin rose 330 basis points to 25.5% from 22.2%.

The catalyst chain runs through operations, not pricing. Management said it focused on a stable shipping cadence and on reducing disruptions from production schedule changes. The company said those efforts were successful, and the third-quarter figures are the first full period reflecting that discipline.

Operating income reached $1.3 million, up $983,000, or 311%, from $316,000 a year earlier. That use came even as total operating expenses rose 21.6% to $2.4 million, a rise the company attributes almost entirely to $539,000 of stock compensation and pending-merger costs tied to Tenax Aerospace Acquisition, LLC.

Air Industries supplies landing gears, flight controls and engine mounts to large aerospace and defense prime contractors. Demand in that channel is tied to defense budgets and commercial aircraft build rates, though the report does not quantify either.

Data — What the Numbers Show

The quarter's headline figures compare as follows. Net sales rose to $14,551,000 from $10,310,000. Cost of sales rose to $10,846,000 from $8,014,000. Gross profit reached $3,705,000 against $2,295,000.

Adjusted EBITDA, a non-GAAP measure the company defines as earnings before interest, taxes, depreciation, amortization, stock compensation and merger costs, rose to $2,684,000 from $1,266,000. That is an increase of $1,418,000, or 112%.

Stripping out merger-related costs and non-cash stock compensation, the company said pro-forma operating income would have been $1.838 million versus $468,000 a year earlier, a rise of 293%. Pro-forma net income would have been $1.5 million, or $0.31 per share, against $108,000, or $0.03 per share.

For the nine months ended September 30, 2026, net sales rose 8.7% to $38.2 million from $35.1 million. Gross margin expanded 490 basis points to 23.0% from 18.1%. The nine-month net loss narrowed to $902,000, or $0.19 per share, from $1.5 million, or $0.36 per share.

Nine-month adjusted EBITDA more than doubled to $5,426,000 from $2,655,000. Interest expense rose 9.5% to $1,482,000 across the nine months, a reminder that the improved operating results sit atop a leveraged balance sheet.

Analysis — What It Means for Aerospace and Defense Tickers

Air Industries is a small-cap supplier, so its direct index weight is negligible. Its read-through is as a demand signal for the subcontracting tier beneath primes. When a supplier reports a 41% sales jump and a 330 basis point margin gain, it points to firm order flow reaching smaller vendors.

The report does not name the primes it serves, so no specific large-cap ticker can be tied to these results. What the report does give is a firm-order backlog of $95.4 million, which supports the company's claim that improved performance will continue into 2027.

The clearest risk is concentration. A backlog of that size against roughly $38 million of nine-month sales implies a book-to-bill well above one, but it also means the company's fortunes rest on a limited set of customers. The report does not disclose customer concentration.

Merger costs are the second caveat. The pending Tenax Aerospace Acquisition added $1.7 million of expense over nine months and $503,000 in the quarter. If the deal closes, integration costs could persist, and the pro-forma figures the company highlights may not reflect the combined entity.

Positioning is likely thin. AIRI is a NYSE American microcap, so institutional flow is limited and the stock trades on retail and specialist interest. The pro-forma presentation is aimed at showing what the business looks like ex-deal costs.

Outlook — What to Watch Next

Management said it expects the improved financial performance to continue in the fourth quarter and into 2027. That is the company's expectation, not an established result.

Supporting that view, the company reported October 2026 net sales of approximately $5.6 million, which it said is consistent with, and in fact above, monthly revenue in the just-ended third quarter. Forecast sales for the remaining two months of 2026 and for calendar 2027 are backed by the $95.4 million backlog of firm customer orders.

The next hard catalyst is the pending merger with Tenax Aerospace Acquisition, LLC. The report does not disclose the deal terms, timing or closing conditions, so those remain open questions. Fourth-quarter and full-year 2026 results will be the next test of whether the shipping cadence holds.

Frequently Asked Questions

What does Air Industries' Q3 result mean for retail investors?

It means the company moved from a small loss to a $946,000 profit in one quarter, with diluted earnings of $0.19 per share. Revenue grew 41.1% and gross margin widened to 25.5%. For a microcap, the swing is large in percentage terms. Investors should weigh that against the nine-month net loss of $902,000, which shows the full year is not yet profitable on a reported basis.

Why did Air Industries' operating expenses rise if the business improved?

Operating expenses rose 21.6% to $2.4 million in the quarter, but the company said the increase came from $539,000 of stock compensation and pending-merger costs. Excluding those items, it said operating expenses were essentially flat. Over nine months, the same exclusions turned a 24.2% reported increase into a 3.7% decline.

What is Air Industries' backlog and why does it matter?

The company reported a backlog of firm customer orders totaling $95.4 million. That figure matters because it underpins management's expectation that improved performance continues into 2027. It is larger than the company's nine-month 2026 revenue of $38.2 million, suggesting orders already booked exceed recent sales. The report does not break the backlog down by customer or program.

Bottom Line

Air Industries' third quarter delivered a genuine margin-led profit swing, but the pending Tenax merger and an unprofitable nine-month stretch keep the story conditional.

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