Air Industries Group falls on revenue drop, announces merger
Preliminary 2025 results show $47.9M sales but positive EBITDA as company pursues transformative deal with Tenax Aerospace
Air Industries Group shares declined 6.5% to $3.19 in the week leading up to the company's announcement of preliminary 2025 financial results, which showed revenue falling to $47.9 million from trailing twelve-month sales of $50 million. The small-cap aerospace and defense contractor simultaneously revealed a transformative merger agreement with Tenax Aerospace Acquisition LLC that would create a combined entity with approximately $183.3 million in revenue.
The Bay Shore, New York-based manufacturer, which produces structural parts and assemblies for major U.S. defense contractors, reported a net loss of $1.3 million for the full year ended December 31, 2025. However, the company achieved positive adjusted EBITDA of $4.3 million, indicating underlying profitability despite the headline loss. Gross profit reached $8.1 million, representing a 17.1% margin on sales.
The preliminary results come after a challenging year for the precision components manufacturer. In August 2025, Chief Executive Officer Lou Melluzzo cited delays in customer orders and extended lead times from subcontractors as headwinds impacting performance. The company implemented cost-saving initiatives, including a workforce reduction aimed at reducing annual payroll by approximately $1 million, while anticipating the fourth quarter would be the strongest period of 2025.
By November, Melluzzo highlighted "measurable improvements in profitability and operational discipline" alongside strong backlog levels and healthy demand from existing and new customers. He also noted the company was actively discussing refinancing of credit facilities that were set to mature at the end of December 2025.
The same day as the preliminary results announcement, Air Industries Group unveiled an agreement and plan of merger with Tenax Aerospace Acquisition, a provider of special mission aviation solutions for government and defense customers. Founded in 2001, Tenax specializes in aerial fire suppression, airborne intelligence, surveillance and reconnaissance, and aircraft leasing for U.S. government, defense, and civilian clients.
The strategic combination would create a diversified aerospace and defense platform with approximately $183.3 million of revenue and adjusted EBITDA of roughly $65 million—nearly quadrupling Air Industries' standalone revenue and increasing its EBITDA fifteenfold. The combined company is expected to remain listed on the NYSE American under the symbol AIRI.
Tenax completed its own refinancing and buyout of junior capital partner Bain Capital Credit in January 2026, consolidating ownership under NTC Group, Inc. with AEA Private Debt leading a junior debt investment. That transaction positioned Tenax for the combination with Air Industries.
The merger announcement comes amid robust conditions for the aerospace and defense sector. The global market was valued at approximately $846.9 billion in 2025 and is projected to reach $1.47 trillion by 2032, exhibiting an 8.2% compound annual growth rate. U.S. defense spending for fiscal year 2026 is projected at $961.6 billion, including a base request of $848.3 billion and an additional $113.3 billion from a reconciliation bill.
Small-cap defense contractors have shown significant strength in the sector. AeroVironment shares grew 51% recently, while Kratos Defense & Security Solutions surged 196% in 2025. Both companies focus on advanced technologies including unmanned platforms, which align with shifting U.S. defense priorities toward missiles, drones, and next-generation platforms.
Air Industries currently trades with a market capitalization of approximately $15.2 million, or 0.3 times trailing revenue, significantly below the 0.89 enterprise value-to-revenue ratio the company shows on its books. The stock's 52-week range spans $2.77 to $4.17, with analysts setting a target price of $5.00—representing 57% upside from current levels.
Institutional ownership remains low at 4.5%, while insiders control 21.4% of shares outstanding. The company's forward price-to-earnings ratio stands at 22.37, reflecting investor expectations for improved profitability.
Air Industries intends to file its Annual Report on Form 10-K following completion of its year-end audit. The company did not provide forward guidance in its preliminary announcement. Investors will be watching for details on the merger's structure, timing, and strategic rationale when the 10-K is filed, as well as any commentary on integration plans and synergies from the combination with Tenax's special mission aviation business.