22° Good Morning
22° Good Morning

Defense contractor Air Industries Group to cut debt, boost hiring

Peter Rettaliata of Hauppauge-based Air Industries Group, seen

Peter Rettaliata of Hauppauge-based Air Industries Group, seen here on Feb. 28, 2017. Credit: Barry Sloan

Air Industries Group, a Hauppauge aerospace defense contractor, on Tuesday announced measures to trim debt, increase production and combine two subsidiaries as part of its restructuring efforts.

Acting chief executive Peter Rettaliata said in a telephone interview that the company is merging its Nassau Tool Works unit in West Babylon into Air Industries Machining Corp. in Bay Shore, but that there are no plans to eliminate any workers.

Those two subsidiaries, which both produce landing gear for military aircraft, have about 165 employees combined, more than half of the 300-employee total at Air Industries Group overall.

“We have plenty of work for both companies in the future,” said Rettaliata, who added that Air Industries has 10 openings for machinists and mechanics.

The 18-month order backlog is nearly $100 million for the company overall, he said.

A $7.8 million stock offering completed in July has allowed the company to reduce accounts payable.

“This has greatly improved our balance sheet and has increased the confidence of our suppliers and our customers,” Rettaliata said in a statement accompanying Air Industries’ second quarter earnings report Tuesday. “We have announced a restructuring that will convert more debt and all of our preferred stock outstanding to common stock.”

Net sales for the quarter ended June 30 declined to $17.1 million, down 11.7 percent compared with the 2016 quarter.

The quarter’s net loss was $2 million, compared with a net loss of $252,000 in the year-ago period.

In January, Air Industries sold its AMK Technical Services subsidiary in South Windsor, Connecticut, which employed about 40 people.

In the face of liquidity problems, the company has taken a series of loans from Michael N. Taglich, chairman of the board, and his brother, Robert F. Taglich, a director, according to government filings. Michael Taglich is chairman and president of Taglich Brothers, a Manhattan securities firm, and his brother Robert Taglich is managing director.

From March to May, the company borrowed $1.25 million from the two, who also are the company’s largest shareholders.

Rettaliata became acting CEO in March, succeeding Daniel Godin, who served in the role for about 2 1⁄2 years. Rettaliata previously served as CEO for almost 20 years until Godin was hired in January 2015.

Jamie Moore, president of the Manufacturing Consortium of Long Island, said Rettaliata is recasting the company’s management.

“He’s trying to rebuild his team to match his operational style that led to his past success with the company,” he said.

Shares of Air Industries, which makes landing gear for the F-18, F-16 and F-15 jet fighters, shed 2.9 percent to close Tuesday at $1.35 on the New York Stock Exchange. The stock price has fallen about 66 percent in the past 12 months.

More news