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Hasy1

12/08/23 7:54 PM

#1935 RE: Hasy1 #1934

We experienced increasing traction of our growth strategy for Sterling Engineering in Connecticut. Sterling had a noteworthy quarter, achieving sales that broke through the $2 million level for the first time in many years.

Sterling's increasing sales, favorable product mix and higher volume and better cost absorption continue to contribute to its strong and improving profitability. 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.

Towards that end, in partnership with a major customer, we secured flash welding equipment to support the welding of the arresting gear for the US Navy's E-2D aircraft program. Air Industries is now the sole provider of this process used to manufacture mission-critical product and expanding our portfolio of special processes.

We also now have a fully functional and producing paint shop have added a new large format bridge mill to support our expanding helicopter business and acquired a new CMM, a coordinate measuring machine to bolster our capabilities in final inspection.

Also at Sterling this year, we have installed a new roof and the installation of solar panels is underway. Company-wide, the current tenor of business is exciting and has only increased our enthusiasm for the future.

Air Industries increased business development activity has resulted in a notable increase in our quoting activity and bookings. On a trailing three-month basis, bookings of new business have doubled over $6 million a month compared to December 31st of 2022.