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Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Mar. 31, 2015	May 11, 2015
Document And Entity Information
Entity Registrant Name	AIR INDUSTRIES GROUP
Entity Central Index Key	0001009891
Document Type	10-Q
Document Period End Date	Mar. 31, 2015
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		7,559,501
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2015

Condensed Consolidated Balance Sheets - USD ($)	Mar. 31, 2015	Dec. 31, 2014
Current Assets
Cash and Cash Equivalents	$ 2,458,000	$ 1,418,000
Accounts Receivable, Net of Allowance for Doubtful Accounts of $1,614,000 and $1,566,000, respectively	12,484,000	11,916,000
Inventory	31,498,000	28,391,000
Deferred Tax Asset	1,437,000	1,421,000
Prepaid Expenses and Other Current Assets	543,000	875,000
Total Current Assets	48,420,000	44,021,000
Property and Equipment, net	14,693,000	9,557,000
Capitalized Engineering Costs - Net of Accumulated Amortization of $4,331,000 and $4,184,000, respectively	785,000	712,000
Deferred Financing Costs, Net, Deposits and Other Assets	1,223,000	825,000
Intangible Assets, net	4,206,000	4,513,000
Deferred Tax Asset	1,089,000	858,000
Goodwill	7,397,000	5,434,000
TOTAL ASSETS	77,813,000	65,920,000
Current Liabilities
Notes Payable and Capitalized Lease Obligations - Current Portion	23,831,000	19,508,000
Accounts Payable and Accrued Expenses	8,827,000	6,948,000
Lease Impairment - Current	40,000	56,000
Deferred Gain on Sale - Current Portion	38,000	38,000
Customer Deposits	190,000	158,000
Dividends Payable	1,125,000	1,066,000
Income Taxes Payable	105,000	71,000
Total Current Liabilities	34,156,000	27,845,000
Long Term Liabilities
Notes Payable and Capitalized Lease Obligations - Net of Current Portion	10,598,000	8,213,000
Lease Impairment - Net of Current Portion	4,000	4,000
Deferred Gain on Sale - Net of Current Portion	399,000	409,000
Deferred Rent	1,185,000	1,177,000
TOTAL LIABILITIES	46,342,000	37,648,000
Commitments and Contingencies
Stockholders' Equity
Preferred Stock - Par Value $.001 - Authorized 1,000,000 Shares, None Issued and Outstanding at March 31, 2015 and December 31, 2014
Common Stock - Par Value $.001 - Authorized 25,000,000 Shares, 7,545,557 and 7,108,677 Shares Issued and Outstanding as of March 31, 2015 and December 31, 2014, respectively	7,000	7,000
Additional Paid-In Capital	45,885,000	42,790,000
Accumulated Deficit	(14,421,000)	(14,525,000)
TOTAL STOCKHOLDERS' EQUITY	31,471,000	28,272,000
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 77,813,000	$ 65,920,000

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($)	Mar. 31, 2015	Dec. 31, 2014
ASSETS
Allowance for Doubtful Accounts	$ 1,614,000	$ 1,566,000
Accumulated Amortization	$ 4,331,000	$ 4,184,000
Stockholders Equity
Preferred Stock par value	$ .001	$ .001
Preferred Stock Authorized	1,000,000	1,000,000
Preferred Stock, Issued
Preferred Stock, Outstanding
Common Stock par value	$ 0.001	$ 0.001
Common Stock Authorized	25,000,000	25,000,000
Common Stock Issued	7,545,557	7,108,677
Common Stock Outstanding	7,545,557	7,108,677

Condensed Consolidated Statements of Income (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Income Statement [Abstract]
Net Sales	$ 16,811,000	$ 15,453,000
Cost of Sales	12,442,000	11,408,000
Gross Profit	4,369,000	4,045,000
Operating Expenses	3,903,000	2,816,000
Income from Operations	466,000	1,229,000
Interest and financing costs	(346,000)	(303,000)
Other Income (Expense), Net	8,000	(1,000)
Income before provision for income taxes	128,000	925,000
Provision for Income Taxes	(24,000)	(584,000)
Net Income	$ 104,000	$ 341,000
Income per share - basic	$ 0.01	$ 0.06
Income per share - diluted	$ 0.01	$ 0.06
Weighted average shares outstanding - basic	7,236,442	5,863,564
Weighted average shares outstanding - diluted	7,521,520	6,125,909

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income	$ 104,000	$ 341,000
Adjustments to reconcile net income to net cash provided by (used in) operating activities
Depreciation of property and equipment	719,000	552,000
Amortization of intangible assets	307,000	291,000
Amortization of capitalized engineering costs	77,000	114,000
Bad debt expense	39,000	93,000
Non-cash compensation expense	17,000	3,000
Amortization of deferred financing costs	25,000	18,000
Gain on sale of real estate	(10,000)	(10,000)
Deferred Income Taxes	(147,000)	(108,000)
(Increase) Decrease in Operating Assets:
Accounts Receivable	1,202,000	(4,418,000)
Inventory	(2,323,000)	(594,000)
Prepaid Expenses and Other Current Assets	288,000	89,000
Deposits	20,000	(1,000)
Other Assets	(65,000)	(51,000)
Increase in Operating Liabilities:
Accounts payable and accrued expenses	661,000	705,000
Deferred Rent	9,000	19,000
Income Taxes payable	33,000	616,000
Customer Deposits	32,000	3,000
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES	988,000	(2,338,000)
CASH FLOWS FROM INVESTING ACTIVITIES
Cash paid for acquisitions	(5,413,000)
Cash acquired in acquisitions	588,000
Capitalized engineering costs	(149,000)	(54,000)
Purchase of property and equipment	(143,000)	(187,000)
NET CASH USED IN INVESTING ACTIVITIES	(5,117,000)	(241,000)
CASH FLOWS FROM FINANCING ACTIVITIES
Notes payable - Sellers	(41,000)	(168,000)
Capital lease obligations	(97,000)	(108,000)
Note payable - Revolver	3,557,000	4,183,000
Proceeds from note payable - term loans	3,500,000
Payments of note payable - term loans	(340,000)	(450,000)
Deferred financing costs	(334,000)
Payments related to Lease Impairment	(16,000)	(19,000)
Dividends Paid	(1,066,000)	(733,000)
NET CASH PROVIDED BY FINANCING ACTIVITIES	5,169,000	2,705,000
NET INCREASE IN CASH AND CASH EQUIVALENTS	1,040,000	126,000
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	1,418,000	561,000
CASH AND CASH EQUIVALENTS AT END OF PERIOD	2,458,000	687,000
Supplemental cash flow information
Cash paid during the period for interest	310,000	251,000
Cash paid during the period for income taxes	183,000	86,000
Supplemental schedule of non-cash investing and financing activities
Dividends payable	1,125,000	880,000
Acquisition of property and equipment financed by capital lease	124,000
Purchase of substantially all assets of Sterling and assumption of liabilities in the acquisition as follows:
Fair Value of Tangible Assets acquired	8,281,000
Goodwill	1,963,000
Cash acquired	588,000
Liabilities assumed	(1,216,000)
Common Stock issued	(4,203,000)
Cash paid for acquisition	$ 5,413,000

FORMATION AND BASIS OF PRESENTATION

3 Months Ended

Mar. 31, 2015

Formation And Basis Of Presentation

FORMATION AND BASIS OF PRESENTATION

Organization

On August 30, 2013, Air Industries Group, Inc. (“Air Industries Delaware”) changed its state of incorporation from Delaware to Nevada as a result of a merger with and into its recently formed wholly-owned subsidiary, Air Industries Group, a Nevada corporation (“Air Industries Nevada” or “AIRI”) and the surviving entity, pursuant to an Agreement and Plan of Merger. The reincorporation was approved by the stockholders of Air Industries Delaware at its 2013 Annual Meeting of Stockholders. Air Industries Nevada is deemed to be the successor.

The accompanying condensed consolidated financial statements presented are those of AIRI, and its wholly-owned subsidiaries; Air Industries Machining Corporation (“AIM”), Welding Metallurgy, Inc. ("WMI" or “Welding”), Miller Stuart, Inc. (“Miller Stuart”), Nassau Tool Works, Inc. (“NTW”), Woodbine Products, Inc. (“Woodbine” or “WPI”) effective April 1, 2014, Eur-Pac Corporation (“Eur-Pac” or “EPC”) effective June 1, 2014, Electronic Connection Corporation (“ECC”), effective September 1, 2014, AMK Welding, Inc. (“AMK”) effective October 1, 2014, and The Sterling Engineering Company ("Sterling"), effective March 1, 2015, (together, the “Company”).

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014, as filed with the Securities and Exchange Commission.

ACQUISITIONS

3 Months Ended

Mar. 31, 2015

Business Combinations [Abstract]

ACQUISITIONS

Sterling

On March 1, 2015, the Company acquired all of the common stock of Sterling, for $5.4 million in cash and 425,005 shares of the common stock of AIRI. The common stock was valued at $9.89 per share, which was the closing share price on February 27, 2015. The cash consideration is subject to adjustment for working capital changes. The Company has also entered into employment and non-compete agreements for two and three year periods with three of the principals of Sterling. The Company financed the acquisition of Sterling with the proceeds from the issuance of Term Loan D (see Note 6).

Sterling founded in 1941 manufactures components for aircraft and ground turbine engines.

The acquisition of Sterling was accounted for under FASB ASC 805, “Business Combinations” (“ASC 805”). The purchase price allocation is set forth below.

Fair value of tangible assets acquired	$	8,281,000
Goodwill		1,963,000
Cash acquired		588,000
Liabilities assumed		(1,216,000	)
Total	$	9,616,000

The below table sets forth selected proforma financial information as if AMK and Sterling were owned for the three months ended March 31, 2015 and 2014.

	Three Months Ended
	March 31, 2015		March31, 2014
Net Sales	$	18,650,000	$	18,343,000
Income (loss) from operations	$	275,000	$	(85,000	)

The below table sets forth selected financial information for the 2014 and 2015 acquisitions for the three months ended March 31, 2015 and 2014.

2015	WPI		EPC		ECC		AMK			Sterling
Net Sales	$	145,000	$	1,071,000	$	149,000	$	1,077,000		$	887,000
Income (loss) from operations	$	40,000	$	126,000	$	32,000	$	(530,000	)	$	78,000

2014	WPI		EPC		ECC		AMK			Sterling
Net Sales	$	-	$	-	$	-	$	-		$	-
Income (loss) from operations	$	-	$	-	$	-	$	-		$	-

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Mar. 31, 2015

Summary Of Significant Accounting Policies

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principal Business Activity

The Company through its AIM subsidiary is primarily engaged in manufacturing aircraft structural parts, and assemblies for prime defense contractors in the aerospace industry in the United States. NTW is a manufacturer of aerospace components, principally landing gear for F-16 and F-18 fighter aircraft. Welding is a specialty welding and products provider whose significant customers include the world's largest aircraft manufacturers, subcontractors, and original equipment manufacturers. Miller Stuart is a manufacturer of aerospace components whose customers include major aircraft manufacturers and the US Military. Miller Stuart specializes in electromechanical systems, harness and cable assemblies, electronic equipment and printed circuit boards. Woodbine is a manufacturer of aerospace components whose customers include major aircraft component suppliers. Woodbine specializes in welded and brazed chassis structures housing electronics in aircraft. Eur-Pac specializes in military packaging and supplies. Eur-Pac’s primary business is “kitting” of supplies for all branches of the United States Defense Department including ordnance parts, hose assemblies, hydraulic, mechanical and electrical assemblies. AMK is a provider of sophisticated welding and machining services for diversified aerospace and industrial customers. Sterling manufactures components for aircraft and ground turbine engines. The Company’s customers consist mainly of publically-traded companies in the aerospace industry.

Inventory Valuation

Inventory at March 31, 2015 and 2014 was computed using the “gross profit” method.

The Company valued inventory at December 31, 2014 at the lower of cost on a first-in-first-out basis or market.

Credit and Concentration Risks

There were two customers that represented 41.3% and two customers that represented 54.5% of total sales for the three months ended March 31, 2015 and 2014, respectively. This is set forth in the table below.

Customer		Percentage of Sales
		2015	2014
		(unaudited)	(unaudited)
	1	23.2	32.3
	2	18.1	**
	3	*	22.2

* Customer was less than 10% of sales for the three months ended March 31, 2015

** Customer was less than 10% of sales for the three months ended March 31, 2014

There were two customers that represented 38.2% of gross accounts receivable and three customers that represented 50.4% of gross accounts receivable at March 31, 2015 and December 31, 2014, respectively. This is set forth in the table below.

Customer		Percentage of Receivables
		March	December
		2015	2014
		(unaudited)
	1	22.8	10.0
	2	15.4	29.0
	3	*	11.4

* Customer was less than 10% of Gross Accounts Receivable at March 31, 2015

During the year, the Company had occasionally maintained balances in its bank accounts that were in excess of the FDIC limit. The Company has not experienced any losses on these accounts.

The Company has several key sole-source suppliers of various parts that are important for one or more of its products. These suppliers are its only source for such parts and, therefore, in the event any of them were to go out of business or be unable to provide parts for any reason, its business could be severely harmed.

Earnings per share

Basic earnings per share is computed by dividing the net income applicable to common stockholders by the weighted-average number of shares of common stock outstanding for the period. Potentially dilutive shares, using the treasury stock method, are included in the diluted per-share calculations for all periods when the effect of their inclusion is dilutive.

The following is a reconciliation of the denominators of basic and diluted earnings per share computations:

	March 31, 2015		March 31, 2014
	(unaudited)		(unaudited)
Weighted average shares outstanding used to compute basic earnings per share		7,236,442		5,863,564
Effect of dilutive stock options and warrants		285,078		262,345
Weighted average shares outstanding and dilutive securities used to compute dilutive earnings per share		7,521,520		6,125,909

The following securities have been excluded from the calculation as their exercise price was greater than the average market price of the common shares:

	March 31,		March 31,
	2015		2014
	(unaudited)		(unaudited)
Stock Options		156,891		17,048
Warrants		46,800		-
		203,691		17,048

Stock-Based Compensation

The Company accounts for stock-based compensation in accordance with FASB ASC 718, "Compensation – Stock Compensation." Under the fair value recognition provision of the ASC, stock-based compensation cost is estimated at the grant date based on the fair value of the award. The Company estimates the fair value of stock options and warrants granted using the Black-Scholes-Merton option pricing model. Stock based compensation amounted to $17,000 and $3,000 for the three months ended March 31, 2015 and 2014, respectively, and was included in operating expenses on the accompanying Condensed Consolidated Statements of Income.

Goodwill

Goodwill represents the excess of the acquisition cost of businesses over the fair value of the identifiable net assets acquired. The goodwill amount of $7,397,000 relates to the acquisitions of Welding ($291,000), NTW ($162,000), Woodbine ($2,565,000), Eur-PAC ($1,656,000), ECC ($109,000), AMK ($651,000), and Sterling ($1,963,000). Goodwill is not amortized, but is tested at least annually for impairment, or if circumstances occur that more likely than not reduce the fair value of the reporting unit below its carrying amount.

The Company has determined that there has been no impairment of goodwill at March 31, 2015 and December 31, 2014.

Recently Issued Accounting Pronouncements

In January 2015, the Financial Accounting Standards Board (the "FASB") issued ASU 2015-01, “Income Statement – Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items" (“ASU 2015-01”). ASU 2015-01 eliminates the concept of an extraordinary item from accounting principles generally accepted in the United States of America. As a result, an entity will no longer be required to segregate extraordinary items from the results of ordinary operations, to separately present an extraordinary item on its income statement, net of tax, after income from continuing operations or to disclose income taxes and earnings-per-share data applicable to an extraordinary item. However, ASU 2015-01 will still retain the presentation and disclosure guidance for items that are unusual in nature and occur infrequently. ASU 2015-01 becomes effective for interim and annual periods beginning on or after December 15, 2015. Early adoption is permitted. The Company is currently evaluating the effects of Adopting ASU 2015-01 on its consolidated financial statements but the adoption is not expected to have a significant impact on the Company’s consolidated financial statements.

In February 2015, the FASB issued amended guidance to the consolidation standard which updates the analysis that a reporting entity must perform to determine whether it should consolidate certain types of legal entities. The amendment modifies the evaluation of whether limited partnerships and similar legal entities are variable interest entities (“VIEs”) or voting interest entities and affects the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships, among other provisions. This amended guidance will be effective for the Company beginning fiscal year 2016. Early adoption is permitted. The Company is currently assessing the impact the adoption of the amended guidance will have on its consolidated financial statements.

In April 2015, the FASB issued amended guidance which requires debt issuance costs to be presented as a direct deduction from the carrying value of the associated debt liability rather than as separate assets on the balance sheet. The recognition and measurement guidance for debt issuance costs are not affected by this amendment. This amended guidance will be effective for the Company beginning fiscal year 2016. Early adoption is permitted, and the new guidance will be applied on a retrospective basis. The Company does not expect the adoption of this amended guidance to have a significant impact on its consolidated financial statements.

The Company does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying consolidated financial statements.

Reclassifications

Certain account balances in 2014 have been reclassified to conform to the current period presentation.

Subsequent Events

Management has evaluated subsequent events through the date of this filing.

PROPERTY AND EQUIPMENT

3 Months Ended

Mar. 31, 2015

Property And Equipment

PROPERTY AND EQUIPMENT

The components of property and equipment at March 31, 2015 and December 31, 2014 consisted of the following:

	March 31,			December 31,
	2015			2014
	(unaudited)
Land	$	500,000		$	200,000
Buildings and Improvements		3,353,000			1,680,000		31.5 years
Machinery and Equipment		16,126,000			12,514,000		5 - 8 years
Capital Lease Machinery and Equipment		1,925,000			1,800,000		5 - 8 years
Tools and Instruments		5,650,000			5,566,000		1.5 - 7 years
Automotive Equipment		162,000			162,000		5 years
Furniture and Fixtures		286,000			275,000		5 - 8 years
Leasehold Improvements		657,000			646,000		Term of Lease
Computers and Software		398,000			372,000		4-6 years
Total Property and Equipment		29,057,000			23,215,000
Less: Accumulated Depreciation		(14,364,000	)		(13,658,000	)
Property and Equipment, net	$	14,693,000		$	9,557,000

Depreciation expense for the three months ended March 31, 2015 and 2014 was approximately $719,000 and $552,000, respectively.

INTANGIBLE ASSETS

3 Months Ended

Mar. 31, 2015

Intangible Assets

INTANGIBLE ASSETS

The components of the intangibles assets consisted of the following:

	March 31,			December 31,
	2015			2014
	(unaudited)
Customer Relationships	$	6,255,000		$	6,255,000		5 to 14 years
Trade Names		1,280,000			1,280,000		20 years
Technical Know-how		660,000			660,000		10 years
Non-Compete		50,000			50,000		5 years
Professional Certifications		15,000			15,000		.25 to 2 years
Total Intangible Assets		8,260,000			8,260,000
Less: Accumulated Amortization		(4,054,000	)		(3,747,000	)
Intangible Assets, net	$	4,206,000		$	4,513,000

Amortization expense for the three months ended March 31, 2015 and 2014 was approximately $307,000 and $291,000, respectively.

NOTES PAYABLE AND CAPITAL LEASE OBLIGATIONS

3 Months Ended

Mar. 31, 2015

Notes Payable And Capital Lease Obligations

NOTES PAYABLE AND CAPITAL LEASE OBLIGATIONS

Notes payable and capital lease obligations consist of the following:

	March 31,			December 31,
	2015			2014
	(unaudited)
Revolving credit note payable to PNC Bank N.A. ("PNC")	$	21,228,000		$	17,672,000
Term loans, PNC		11,523,000			8,363,000
Capital lease obligations		1,678,000			1,645,000
Notes payable to sellers of WMI		-			41,000
Subtotal		34,429,000			27,721,000
Less: Current portion of notes and capital obligations		(23,831,000	)		(19,508,000	)
Notes payable and capital lease obligations, net of current portion	$	10,598,000		$	8,213,000

PNC Bank N.A. ("PNC")

The Company has a credit facility with PNC (the "Loan Facility") secured by substantially all of its assets. The Loan Facility has been amended many times during its term. The Company entered into the latest amendment to the Loan Facility in March 2015 and paid an amendment fee of $25,000. The Loan Facility now provides for maximum borrowings of approximately $32,000,000 consisting of the following at March 31, 2015:

	(i)	a $23,000,000 revolving loan (includes inventory sub-limit of $15,000,000) and
	(ii)	Four term loans (Term Loan A, Term Loan B, Term Loan C and Term Loan D).

Under the terms of the Loan Facility the revolving credit note now bears interest at (a) the sum of the Alternate Base Rate plus three quarters of one percent (0.75%) with respect to Domestic Rate Loans and (b) the sum of the Eurodollar Rate plus two and one half of one percent (2.50%) with respect to LIBOR Rate Loans. Prior to the amendment the revolving credit note bore interest at the sum of the Alternate Base Rate plus three quarters of one percent (0.75%) with respect to Domestic Rate Loans and (b) the sum of the Eurodollar Rate plus two and three quarters of one percent (2.75%) with respect to Eurodollar Rate Loans. The revolving credit note had an interest rate of 4.00% per annum at March 31, 2015 and December 31, 2014, and an outstanding balance of $21,228,000 and $17,672,000, respectively. The maturity date of the revolving credit note is November 30, 2016.

Each day, the Company's cash collections are swept directly by the bank to reduce the revolving loans and we then borrow according to a borrowing base. As such, the Company generally has no cash on hand. Cash shown on the balance sheet at any date reflects drawdowns against the revolving credit loan for disbursement checks written that have not yet been presented for payment. Because the revolving loans contain a subjective acceleration clause which could permit PNC to require repayment prior to maturity, the loans are classified with the current portion of notes and capital lease obligations.

The repayment terms of Term Loan A were amended in 2014. On April 1, 2014, the Company borrowed an additional $1,328,000 to partially fund the acquisition of Woodbine. The repayment terms of Term Loan A now consists of thirty-two consecutive monthly principal installments, the first thirty-one of which shall be in the amount of $31,859 commencing on the first business day of May 2014, and continuing on the first business day of each month thereafter, with a thirty-second and final payment of any unpaid balance of principal and interest on the last business day of November 2016. Term Loans A and B bear interest at (a) the sum of the Alternate Base Rate plus one and three quarters of one percent (1.75%) with respect to Domestic Rate Loans and (b) the sum of the LIBOR Rate plus three percent (3.00%) with respect to LIBOR Rate Loans. At March 31, 2015 and December 31, 2014, the balance due under Term Loan A was $2,326,000 and $2,421,000, respectively.

On October 1, 2014, the Company borrowed $3,500,000 under Term Loan B for the acquisition of AMK. The repayment of Term Loan B consists of sixty consecutive monthly principal installments, the first fifty-nine of which shall be in the amount of $58,333 commencing on the first business day of December 2014, and continuing on the first business day of each month thereafter, with a sixtieth and final payment of any unpaid balance of principal and interest on the last business day of November 2019. Term Loan B bears interest at the same rate as Term Loan A. The first interest payment was on the first business day of November 2014. At March 31, 2015 and December 31, 2014, the balance due under Term Loan B was $3,267,000 and $3,442,000, respectively.

On December 31, 2014, the Company borrowed $2,500,000 under Term Loan C to refinance the Seller Note and Mortgage of $2,500,000 issued as part of the acquisition of AMK. The maturity date of the Term Loan C is the first business day of January 2021, and it is to be paid in seventy two consecutive monthly principal installments, which commence on the first business day of February 2015, and continue on the first business day of each month thereafter. The first seventy-one of the installments shall be in the amount of $34,722 with a seventy second and final payment of any unpaid principal and interest on the first business day of January 2021. Term Loan C bears interest at (a) the sum of the Alternate Base Rate plus two percent (2.00%) with respect to Domestic Rate Loans and (b) the sum of the LIBOR Rate plus three and one-quarter percent (3.25%) with respect to LIBOR Rate Loans. At March 31, 2015 and December 31, 2014, the balance due under Term Loan C was $2,430,000 and $2,500,000, respectively.

On March 9, 2015, the Company borrowed $3,500,000 under Term Loan D for the acquisition of Sterling. The repayment of Term Loan D consists of twenty consecutive monthly principal installments, the first nineteen of which shall be in the amount of $62,847 commencing on the first business day of April 2015, and continuing on the first business day of each month thereafter, with a twentieth and final payment of any unpaid balance of principal and interest on the last business day of November 2016. Term Loan D bears interest at (a) the sum of the Alternate Base Rate plus two and one quarter percent (2.25%) with respect to Domestic Rate Loans and (b) the sum of the LIBOR Rate plus three and one-half percent (3.50%) with respect to LIBOR Rate Loans. At March 31, 2015, the balance due under Term Loan D was $3,500,000.

To the extent that the Company disposes of collateral used to secure the Loan Facility, other than inventory, the Company must promptly repay the draws on the credit facility in the amount equal to the net proceeds of such sale.

The terms of the Loan Facility require that, among other things, the Company maintain a specified Fixed Charge Coverage Ratio. In addition, the Company is limited in the amount of Capital Expenditures it can make. The Company is also limited to the amount of Dividends it can pay its shareholders as defined in the Loan Facility. As of both March 31, 2015 and December 31, 2014, the Company was in compliance with all terms of the Loan Facility.

The Company's receivables are payable directly into a lockbox controlled by PNC (subject to the terms of the Loan Facility). PNC may use some elements of subjective business judgment in determining whether a material adverse change has occurred in the Company's condition, results of operations, assets, business, properties or prospects allowing it to demand repayment of the Loan Facility.

As of March 31, 2015 the future minimum principal payments for the term loans are as follows:

For the twelve months ending	Amount
March 31, 2016	$	2,253,000
March 31, 2017		5,806,000
March 31, 2018		1,117,000
March 31, 2019		1,117,000
March 31, 2020		883,000
Thereafter		347,000
PNC Term Loans payable		11,523,000
Less: Current portion		(2,253,000	)
Long-term portion	$	9,270,000

Interest expense related to these credit facilities amounted to approximately $285,000 and $186,000 for the three months ended March 31, 2015 and 2014, respectively.

Capital Leases Payable – Equipment

The Company is committed under several capital leases for manufacturing and computer equipment. All leases have bargain purchase options exercisable at the termination of each lease. Capital lease obligations totaled $1,678,000 and $1,645,000 as of March 31, 2015 and December 31, 2014, respectively, with various interest rates ranging from approximately 4% to 7%.

As of December 31, 2014, the aggregate future minimum lease payments, including imputed interest, with remaining terms of greater than one year are as follows:

For the twelve months ending	Amount
March 31, 2016	$	446,000
March 31, 2017		446,000
March 31, 2018		446,000
March 31, 2019		374,000
March 31, 2020		192,000
Thereafter		8,000
Total future minimum lease payments		1,912,000
Less: imputed interest		(234,000	)
Less: current portion		(350,000	)
Total Long Term Portion	$	1,328,000

Notes Payable - Sellers

In connection with the acquisition of Welding on August 24, 2007, the Company incurred a note payable (the “Note”) to the former stockholders of Welding. At December 31, 2014, the balance owed under the Note was $41,000. On January 5, 2015 the remaining balance of $41,000 was paid and the obligation was extinguished.

Interest expense related to the Note was $0 and $12,000 for the three months ended March 31, 2015 and 2014, respectively.

Junior Subordinated Notes

In 2008 and 2009, the Company sold in a series of private placements to accredited investors $5,990,000 of principal amount in Junior Subordinated Notes. The notes bear interest at the rate of 1% per month (or 12% per annum).

In connection with the offering of the Company's Junior Subordinated Notes, the Company issued to Taglich Brothers, Inc. ("Taglich Brothers"), as placement agent, a Junior Subordinated Note in the principal amount of $510,000. The terms of the note issued to Taglich Brothers are identical to the notes. In connection with the amounts raised in 2009, the Company issued to Taglich Brothers a Junior Subordinated Note on the same terms as the Junior Subordinated Notes referred to above for commission of $44,500.

In conjunction with the Private Placement of our common stock to raise money for the NTW Acquisition, the Company solicited the holders of our Junior Subordinated Notes to convert their notes to Common Stock at a price of $6.00 per share. On June 29, 2012, the Company issued 867,461 shares of its Common Stock in exchange for approximately $5,204,000 of its Junior Subordinated Notes. On July 26, 2012, the Company repaid $115,000 of its Junior Subordinated Notes along with the accrued interest thereon of approximately $1,000.

The due dates of the remaining Junior Subordinated Notes were extended from November 18, 2013 to mature on November 30, 2016 and are subordinated to the Company's obligations to PNC. The Junior Subordinated Notes were satisfied in June 2014.

Interest expense on the Junior Subordinated Notes amounted to $0 and $30,000 for the three months ended March 31, 2015 and 2014, respectively.

STOCKHOLDERS' EQUITY

3 Months Ended

Mar. 31, 2015

Stockholders' Equity

STOCKHOLDERS' EQUITY

Common Stock Issuances

During the three months ended March 31, 2015, the Company issued 11,875 shares of its common stock pursuant to the cashless exercise of Stock Options.

On March 1, 2015, in connection with the acquisition of Sterling, the Company issued 425,005 shares of its common stock to the former stockholders of Sterling.

Dividends

On January 15, 2015, the Company paid a dividend equal to $0.15 per common share or $1,066,000 to all shareholders of record as of January 2, 2015. On March 31, 2015, the Board of Directors approved a quarterly dividend of $0.15 per common share or $1,125,000 paid on April 24, 2015 to all shareholders of record as of the close of business on April 13, 2015.

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(d),(e))
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Reference 2: http://www.xbrl.org/2003/role/presentationRef
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Reference 3: http://www.xbrl.org/2003/role/presentationRef
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-Paragraph d
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Reference 15: http://www.xbrl.org/2003/role/presentationRef
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Reference 16: http://www.xbrl.org/2003/role/presentationRef
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Reference 17: http://www.xbrl.org/2003/role/presentationRef
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Reference 18: http://www.xbrl.org/2003/role/presentationRef
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Reference 19: http://www.xbrl.org/2003/role/presentationRef
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-Article 3

+ Details

INCOME TAXES

3 Months Ended

Mar. 31, 2015

Income Taxes

INCOME TAXES

The provision for income taxes at March 31, 2015 and 2014 are set forth below:

	2015			2014
	(unaudited)			(unaudited)
Current
Federal	$	166,000		$	536,000
State		5,000			156,000
Total Expense		171,000			692,000

Deferred Tax Benefit		(147,000	)		(108,000)

Net Provision for Income Taxes	$	24,000		$	584,000

The components of net deferred tax assets as of March 31, 2015 and December 31, 2014 are set forth below:

	March 31,				December 31,
	2015				2014
	(unaudited)
Deferred tax assets:
Current:
Bad debts		$	646,000			$	650,000
Inventory - 263A adjustment			782,000				762,000
Account payable, accrued expenses and reserves			9,000				9,000
Total current deferred tax asset before valuation allowance			1,437,000				1,421,000
Valuation Allowance			-				-
Total current deferred tax asset after valuation allowance		$	1,437,000			$	1,421,000

Non-Current
Capital loss carry forwards		$	1,088,000			$	1,088,000
Section 1231 loss carry forward			4,000				4,000
Stock based compensation - options and restricted stock			534,000				527,000
Capitalized engineering costs			518,000				522,000
Deferred rent			474,000				483,000
Amortization - NTW Transaction			730,000				663,000
Lease impairment			16,000				22,000
Deferred gain on sale of real estate			175,000				179,000
Other			100,000				-
Total deferred tax assets before valuation allowance			3,639,000				3,488,000
Valuation allowance			(1,092,000	)			(1,092,000	)
Total deferred tax assets after valuation allowance		$	2,547,000			$	2,396,000

Deferred tax liabilities:
Property and equipment		$	(1,013,000	)		$	(1,082,000	)
Goodwill - NTW Transaction			(12,000	)			(11,000)
Goodwill - AMK Transaction			(9,000)				(4,000)
Amortization - Welding Transaction			(424,000	)			(441,000	)
Total Deferred Tax Liability			(1,458,000	)			(1,538,000	)

Net non-current deferred tax asset		$	1,089,000			$	858,000

During the year ended December 31, 2014, the Company determined that it no longer needed to provide a valuation allowance on the net deferred tax assets except for the capital loss and section 1231 loss carryforwards. This was based upon the fact that management believes that the net deferred tax assets are more likely than not to be realized. The valuation allowance at both March 31, 2015 and December 31, 2014 amounted to $1,092,000.

The Company has a capital loss carry forward from the sale of Sigma Metals, Inc., a former subsidiary of the Company, of $2,719,000 which will expire in fiscal 2015.

SEGMENT REPORTING

3 Months Ended

Mar. 31, 2015

Notes to Financial Statements

SEGMENT REPORTING

In accordance with FASB ASC 280, “Segment Reporting” ("ASC 280"), the Company discloses financial and descriptive information about its reportable operating segments. Operating segments are components of an enterprise about which separate financial information is available and regularly evaluated by the chief operating decision maker in deciding how to allocate resources and in assessing performance.

The Company follows ASC 280, which establishes standards for reporting information about operating segments in annual and interim financial statements, and requires that companies report financial and descriptive information about their reportable segments based on a management approach. ASC 280 also establishes standards for related disclosures about products and services, geographic areas and major customers.

The Company currently divides its operations into three operating segments: Complex Machining which consists of AIM and NTW; Aerostructures and Electronics which consists of WMI, WPI, Miller Stuart, Eur-Pac and ECC; and Turbine Engine Components which includes AMK and beginning March 2015 includes Sterling.

The accounting policies of each of the segments are the same as those described in the Summary of Significant Accounting Policies. The Company evaluates performance based on revenue, gross profit contribution and assets employed.

Effective January 1, 2015, all operating costs are allocated to the Company’s operating segments. Prior to January 1, 2015 certain operating costs that were not directly attributable to a particular segment were included in corporate and presented as an independent segment. Results for the three months ended March 31, 2014 have been reclassified to conform to the current period presentation.

		Three Months Ended March 31,
		2015			2014
		(unaudited)			(unaudited)
*COMPLEX* *MACHINING*
	Net Sales	$	9,064,000		$	12,140,000
	Gross Profit		2,091,000			3,207,000
	Pre Tax Income (Loss)		(180,000)			1,279,000
	Assets		62,554,000			35,972,000

*AEROSTRUCTURES* *AND ELECTRONICS*
	Net Sales		5,782,000			3,313,000
	Gross Profit		2,162,000			838,000
	Pre Tax Income (Loss)		770,000			(354,000)
	Assets		18,049,000			12,547,000

*TURBINE ENGINE COMPONENTS*
	Net Sales		1,965,000			-
	Gross Profit		116,000			-
	Pre Tax Income (Loss)		(462,000)			-
	Assets		17,791,000			-

*CORPORATE*
	Net Sales		-			-
	Gross Profit		-			-
	Pre Tax Income (Loss)		-			-
	Assets		26,430,000			8,156,000

*CONSOLIDATED*
	Net Sales		16,811,000			15,453,000
	Gross Profit		4,369,000			4,045,000
	Pre Tax Income		128,000			925,000
	Provision for Taxes		24,000			584,000
	Net Income		104,000			341,000
	Elimination of Assets		(47,011,000	)		(2,121,000	)
	Assets	$	77,813,000		$	54,554,000

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
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Reference 2: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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Reference 3: http://www.xbrl.org/2003/role/presentationRef
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+ Details

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

3 Months Ended

Mar. 31, 2015

Summary Of Significant Accounting Policies Policies

Principal Business Activity

Principal Business Activity

Inventory Valuation

Inventory Valuation

Inventory at March 31, 2015 and 2014 was computed using the “gross profit” method.

The Company valued inventory at December 31, 2014 at the lower of cost on a first-in-first-out basis or market.

Credit and Concentration Risks

Credit and Concentration Risks

Customer		Percentage of Sales
		2015	2014
		(unaudited)	(unaudited)
	1	23.2	32.3
	2	18.1	**
	3	*	22.2

* Customer was less than 10% of sales for the three months ended March 31, 2015

** Customer was less than 10% of sales for the three months ended March 31, 2014

Customer		Percentage of Receivables
		March		December
		2015		2014
		(unaudited)
	1		22.8		10.0
	2		15.4		29.0
	3		*		11.4

* Customer was less than 10% of Gross Accounts Receivable at March 31, 2015

During the year, the Company had occasionally maintained balances in its bank accounts that were in excess of the FDIC limit. The Company has not experienced any losses on these accounts.

Earnings per share

Earnings per share

The following is a reconciliation of the denominators of basic and diluted earnings per share computations:

	March 31, 2015		March 31, 2014
	(unaudited)		(unaudited)
Weighted average shares outstanding used to compute basic earnings per share		7,236,442		5,863,564
Effect of dilutive stock options and warrants		285,078		262,345
Weighted average shares outstanding and dilutive securities used to compute dilutive earnings per share		7,521,520		6,125,909

The following securities have been excluded from the calculation as their exercise price was greater than the average market price of the common shares:

	March 31,		March 31,
	2015		2014
	(unaudited)		(unaudited)
Stock Options		156,891		17,048
Warrants		46,800		-
		203,691		17,048

Stock-Based Compensation

Stock-Based Compensation

Goodwill

Goodwill

The Company has determined that there has been no impairment of goodwill at March 31, 2015 and December 31, 2014.

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

Reclassifications

Reclassifications

Certain account balances in 2014 have been reclassified to conform to the current period presentation.

Subsequent Events

Subsequent Events

Management has evaluated subsequent events through the date of this filing.

ACQUISITION (Tables)

3 Months Ended

Mar. 31, 2015

Proforma results

Sterling

Sterling founded in 1941 manufactures components for aircraft and ground turbine engines.

The acquisition of Sterling was accounted for under FASB ASC 805, “Business Combinations” (“ASC 805”). The purchase price allocation is set forth below.

Fair value of tangible assets acquired	$	8,281,000
Goodwill		1,963,000
Cash acquired		588,000
Liabilities assumed		(1,216,000	)
Total	$	9,616,000

The below table sets forth selected proforma financial information as if AMK and Sterling were owned for the three months ended March 31, 2015 and 2014.

	Three Months Ended
	March 31, 2015		March31, 2014
Net Sales	$	18,650,000	$	18,343,000
Income (loss) from operations	$	275,000	$	(85,000	)

The below table sets forth selected financial information for the 2014 and 2015 acquisitions for the three months ended March 31, 2015 and 2014.

2015	WPI		EPC		ECC		AMK			Sterling
Net Sales	$	145,000	$	1,071,000	$	149,000	$	1,077,000		$	887,000
Income (loss) from operations	$	40,000	$	126,000	$	32,000	$	(530,000	)	$	78,000

2014	WPI		EPC		ECC		AMK			Sterling
Net Sales	$	-	$	-	$	-	$	-		$	-
Income (loss) from operations	$	-	$	-	$	-	$	-		$	-

Sterling

Purchase price allocation

The acquisition of Sterling was accounted for under FASB ASC 805, “Business Combinations” (ASC 805”). The purchase price allocation is set forth below.

Fair value of tangible assets acquired	$	8,281,000
Goodwill		1,963,000
Cash acquired		588,000
Liabilities assumed		(1,216,000	)
Total	$	9,616,000

Proforma results

	Three Months Ended
	March 31, 2015		March31, 2014
Net Sales	$	18,650,000	$	18,343,000
Income (loss) from operations	$	275,000	$	(85,000	)

Selected financial information

2015	WPI		EPC		ECC		AMK			Sterling
Net Sales	$	145,000	$	1,071,000	$	149,000	$	1,077,000		$	887,000
Income (loss) from operations	$	40,000	$	126,000	$	32,000	$	(530,000	)	$	78,000

2014	WPI		EPC		ECC		AMK			Sterling
Net Sales	$	-	$	-	$	-	$	-		$	-
Income (loss) from operations	$	-	$	-	$	-	$	-		$	-

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

3 Months Ended

Mar. 31, 2015

Summary Of Significant Accounting Policies Tables

Credit and Concentration Risks

Customer		Percentage of Sales
		2015	2014
		(unaudited)	(unaudited)
	1	23.2	32.3
	2	18.1	**
	3	*	22.2

* Customer was less than 10% of sales for the three months ended March 31, 2015

** Customer was less than 10% of sales for the three months ended March 31, 2014

Customer		Percentage of Receivables
		March	December
		2015	2014
		(unaudited)
	1	22.8	10.0
	2	15.4	29.0
	3	*	11.4

* Customer was less than 10% of Gross Accounts Receivable at March 31, 2015

Earnings per share

The following is a reconciliation of the denominators of basic and diluted earnings per share computations:

	March 31, 2015		March 31, 2014
	(unaudited)		(unaudited)
Weighted average shares outstanding used to compute basic earnings per share		7,236,442		5,863,564
Effect of dilutive stock options and warrants		285,078		262,345
Weighted average shares outstanding and dilutive securities used to compute dilutive earnings per share		7,521,520		6,125,909

The following securities have been excluded from the calculation as their exercise price was greater than the average market price of the common shares:

	March 31,		March 31,
	2015		2014
	(unaudited)		(unaudited)
Stock Options		156,891		17,048
Warrants		46,800		-
		203,691		17,048

PROPERTY AND EQUIPMENT (Tables)

3 Months Ended

Mar. 31, 2015

Property And Equipment Tables

Property and equipment

	March 31,			December 31,
	2015			2014
	(unaudited)
Land	$	500,000		$	200,000
Buildings and Improvements		3,353,000			1,680,000		31.5 years
Machinery and Equipment		16,126,000			12,514,000		5 - 8 years
Capital Lease Machinery and Equipment		1,925,000			1,800,000		5 - 8 years
Tools and Instruments		5,650,000			5,566,000		1.5 - 7 years
Automotive Equipment		162,000			162,000		5 years
Furniture and Fixtures		286,000			275,000		5 - 8 years
Leasehold Improvements		657,000			646,000		Term of Lease
Computers and Software		398,000			372,000		4-6 years
Total Property and Equipment		29,057,000			23,215,000
Less: Accumulated Depreciation		(14,364,000	)		(13,658,000	)
Property and Equipment, net	$	14,693,000		$	9,557,000

INTANGIBLE ASSETS (Tables)

3 Months Ended

Mar. 31, 2015

Intangible Assets Tables

Intangible assets

	March 31,			December 31,
	2015			2014
	(unaudited)
Customer Relationships	$	6,255,000		$	6,255,000		5 to 14 years
Trade Names		1,280,000			1,280,000		20 years
Technical Know-how		660,000			660,000		10 years
Non-Compete		50,000			50,000		5 years
Professional Certifications		15,000			15,000		.25 to 2 years
Total Intangible Assets		8,260,000			8,260,000
Less: Accumulated Amortization		(4,054,000	)		(3,747,000	)
Intangible Assets, net	$	4,206,000		$	4,513,000

NOTES PAYABLE AND CAPITAL LEASE OBLIGATIONS (Tables)

3 Months Ended

Mar. 31, 2015

Notes Payable And Capital Lease Obligations Tables

Notes payable and capital lease obligations

	March 31,			December 31,
	2015			2014
	(unaudited)
Revolving credit note payable to PNC Bank N.A. ("PNC")	$	21,228,000		$	17,672,000
Term loans, PNC		11,523,000			8,363,000
Capital lease obligations		1,678,000			1,645,000
Notes payable to sellers of WMI		-			41,000
Subtotal		34,429,000			27,721,000
Less: Current portion of notes and capital obligations		(23,831,000	)		(19,508,000	)
Notes payable and capital lease obligations, net of current portion	$	10,598,000		$	8,213,000

Future minimum principal payments for term loan

As of March 31, 2015 the future minimum principal payments for the term loans are as follows:

For the twelve months ending	Amount
March 31, 2016	$	2,253,000
March 31, 2017		5,806,000
March 31, 2018		1,117,000
March 31, 2019		1,117,000
March 31, 2020		883,000
Thereafter		347,000
PNC Term Loans payable		11,523,000
Less: Current portion		(2,253,000	)
Long-term portion	$	9,270,000

Future minimum lease payments, including imputed interest

As of December 31, 2014, the aggregate future minimum lease payments, including imputed interest, with remaining terms of greater than one year are as follows:

For the twelve months ending	Amount
March 31, 2016	$	446,000
March 31, 2017		446,000
March 31, 2018		446,000
March 31, 2019		374,000
March 31, 2020		192,000
Thereafter		8,000
Total future minimum lease payments		1,912,000
Less: imputed interest		(234,000	)
Less: current portion		(350,000	)
Total Long Term Portion	$	1,328,000

INCOME TAXES (Tables)

3 Months Ended

Mar. 31, 2015

Income Taxes Tables

Provision for income

The provision for income taxes at March 31, are set forth below:

	2015			2014
	(unaudited)			(unaudited)
Current
Federal	$	166,000		$	536,000
State		5,000			156,000
Total Expense		171,000			692,000

Deferred Tax Benefit		(147,000	)		(108,000)

Net Provision for Income Taxes	$	24,000		$	584,000

Deferred tax assets

The components of net deferred tax assets as of March 31, 2015 and December 31, 2014 are set forth below:

	March 31,				December 31,
	2015				2014
	(unaudited)
Deferred tax assets:
Current:
Bad debts		$	646,000			$	650,000
Inventory - 263A adjustment			782,000				762,000
Account payable, accrued expenses and reserves			9,000				9,000
Total current deferred tax asset before valuation allowance			1,437,000				1,421,000
Valuation Allowance			-				-
Total current deferred tax asset after valuation allowance		$	1,437,000			$	1,421,000

Non-Current
Capital loss carry forwards		$	1,088,000			$	1,088,000
Section 1231 loss carry forward			4,000				4,000
Stock based compensation - options and restricted stock			534,000				527,000
Capitalized engineering costs			518,000				522,000
Deferred rent			474,000				483,000
Amortization - NTW Transaction			730,000				663,000
Lease impairment			16,000				22,000
Deferred gain on sale of real estate			175,000				179,000
Other			100,000				-
Total deferred tax assets before valuation allowance			3,639,000				3,488,000
Valuation allowance			(1,092,000	)			(1,092,000	)
Total deferred tax assets after valuation allowance		$	2,547,000			$	2,396,000

Deferred tax liabilities:
Property and equipment		$	(1,013,000	)		$	(1,082,000	)
Goodwill - NTW Transaction			(12,000	)			(11,000)
Goodwill - AMK Transaction			(9,000)				(4,000)
Amortization - Welding Transaction			(424,000	)			(441,000	)
Total Deferred Tax Liability			(1,458,000	)			(1,538,000	)

Net non-current deferred tax asset		$	1,089,000			$	858,000

SEGMENT REPORTING (Tables)

3 Months Ended

Mar. 31, 2015

Segment Reporting Tables

Operating segments

		Three Months Ended March 31,
		2015			2014
		(unaudited)			(unaudited)
*COMPLEX* *MACHINING*
	Net Sales	$	9,064,000		$	12,140,000
	Gross Profit		2,091,000			3,207,000
	Pre Tax Income (Loss)		(180,000)			1,279,000
	Assets		62,554,000			35,972,000

*AEROSTRUCTURES* *AND ELECTRONICS*
	Net Sales		5,782,000			3,313,000
	Gross Profit		2,162,000			838,000
	Pre Tax Income (Loss)		770,000			(354,000)
	Assets		18,049,000			12,547,000

*TURBINE ENGINE COMPONENTS*
	Net Sales		1,965,000			-
	Gross Profit		116,000			-
	Pre Tax Income (Loss)		(462,000)			-
	Assets		17,791,000			-

*CORPORATE*
	Net Sales		-			-
	Gross Profit		-			-
	Pre Tax Income (Loss)		-			-
	Assets		26,430,000			8,156,000

*CONSOLIDATED*
	Net Sales		16,811,000			15,453,000
	Gross Profit		4,369,000			4,045,000
	Pre Tax Income		128,000			925,000
	Provision for Taxes		24,000			584,000
	Net Income		104,000			341,000
	Elimination of Assets		(47,011,000	)		(2,121,000	)
	Assets	$	77,813,000		$	54,554,000

ACQUISITIONS (Details) - Sterling	3 Months Ended
ACQUISITIONS (Details) - Sterling	Mar. 31, 2015 USD ($)
Fair Value of Tangible Assets acquired	$ 8,281,000
Goodwill	1,963,000
Cash Acquired	588,000
Liabilities assumed	(1,216,000)
Total	$ 9,616,000

ACQUISITIONS (Details 1) - USD ($)	3 Months Ended
ACQUISITIONS (Details 1) - USD ($)	Mar. 31, 2015	Mar. 31, 2014
Net Sales	$ 18,650,000	$ 18,343,000
Income (loss) from operations	275,000	(85,000)
WPI
Net Sales	145,000	0
Income (loss) from operations	40,000	0
EPC
Net Sales	1,071,000	0
Income (loss) from operations	126,000	0
ECC
Net Sales	149,000	0
Income (loss) from operations	32,000	0
AMK
Net Sales	1,077,000	0
Income (loss) from operations	(530,000)	0
Sterling
Net Sales	887,000	0
Income (loss) from operations	$ 78,000	$ 0

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (Unaudited)

3 Months Ended

Mar. 31, 2015

Mar. 31, 2014

Summary Of Significant Accounting Policies Details

Customer 1

23.20%

32.30%

Customer 2

18.10%

0.00%

^[1]

Customer 3

0.00%

^[2]

22.20%

[1]	Customer was less than 10% of sales for the three months ended March 31, 2014
[2]	Customer was less than 10% of sales for the three months ended March 31, 2015

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2)

Mar. 31, 2015

Dec. 31, 2014

Summary Of Significant Accounting Policies Details 2

Customer 1

22.80%

10.00%

Customer 2

15.40%

29.00%

Customer 3

0.00%

^[1]

11.40%

[1]	Customer was less than 10% of Gross Accounts Receivable at March 31, 2015

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 3) (Unaudited) - shares	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Summary Of Significant Accounting Policies Details 3
Weighted average shares outstanding used to compute basic earnings per share	7,236,442	5,863,564
Effect of dilutive stock options and warrants	285,078	262,345
Weighted average shares outstanding and dilutive securities used to compute dilutive earnings per share	7,521,520	6,125,909

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 4) (Unaudited) - shares	Mar. 31, 2015	Mar. 31, 2014
Summary Of Significant Accounting Policies Details 4
Stock Options	156,891	17,048
Warrants	46,800	0
Anti dilutive Securities	203,691	17,048

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014
Summary Of Significant Accounting Policies Details Narrative
Customer Sales	41.30%	54.50%
Customers gross accounts receivables	38.20%		50.40%
Stock-based compensation	$ 17,000	$ 3,000
Impairment of goodwill	$ 0	$ 0

PROPERTY AND EQUIPMENT (Details) - USD ($)	3 Months Ended
PROPERTY AND EQUIPMENT (Details) - USD ($)	Mar. 31, 2015	Dec. 31, 2014
Total Property and Equipment	$ 29,057,000	$ 23,215,000
Less: Accumulated Depreciation	(14,364,000)	(13,658,000)
Property and Equipment, net	14,693,000	9,557,000
Land [Member]
Total Property and Equipment	500,000	200,000
Building and Improvements [Member]
Total Property and Equipment	$ 3,353,000	1,680,000
Property Plant And Equipment Useful Life	31 years 6 months
Machinery and Equipment
Total Property and Equipment	$ 16,126,000	12,514,000
Machinery and Equipment \| Minimum
Property Plant And Equipment Useful Life	5 years
Machinery and Equipment \| Maximum [Member]
Property Plant And Equipment Useful Life	8 years
Capital Lease Machinery and Equipment
Total Property and Equipment	$ 1,925,000	1,800,000
Capital Lease Machinery and Equipment \| Minimum
Property Plant And Equipment Useful Life	5 years
Capital Lease Machinery and Equipment \| Maximum [Member]
Property Plant And Equipment Useful Life	8 years
Tools and Instruments
Total Property and Equipment	$ 5,650,000	5,566,000
Tools and Instruments \| Minimum
Property Plant And Equipment Useful Life	1 year 6 months
Tools and Instruments \| Maximum [Member]
Property Plant And Equipment Useful Life	7 years
Automotive Equipment
Total Property and Equipment	$ 162,000	162,000
Property Plant And Equipment Useful Life	5 years
Furniture and Fixtures
Total Property and Equipment	$ 286,000	275,000
Furniture and Fixtures \| Minimum
Property Plant And Equipment Useful Life	5 years
Furniture and Fixtures \| Maximum [Member]
Property Plant And Equipment Useful Life	8 years
Leasehold Improvements
Total Property and Equipment	$ 657,000	646,000
Property Plant And Equipment Useful Life	Term of Lease
Computers and Software
Total Property and Equipment	$ 398,000	$ 372,000
Computers and Software \| Minimum
Property Plant And Equipment Useful Life	4 years
Computers and Software \| Maximum [Member]
Property Plant And Equipment Useful Life	6 years

PROPERTY AND EQUIPMENT (Details Narrative) - USD ($)	3 Months Ended
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($)	Mar. 31, 2015	Mar. 31, 2014
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 719,000	$ 552,000

INTANGIBLE ASSETS (Details) - USD ($)	3 Months Ended
INTANGIBLE ASSETS (Details) - USD ($)	Mar. 31, 2015	Dec. 31, 2014
Customer Relationships	$ 6,255,000	$ 6,255,000
Trade Names	1,280,000	1,280,000
Technical Know-how	660,000	660,000
Non-Compete	50,000	50,000
Professional Certifications	15,000	15,000
Total Intangible Assets	8,260,000	8,260,000
Less: Accumulated Amortization	(4,054,000)	(3,747,000)
Intangible Assets, net	$ 4,206,000	$ 4,513,000
Customer Relationships [Member] \| Minimum
Intangible Assets Useful Life	5 years
Customer Relationships [Member] \| Maximum [Member]
Intangible Assets Useful Life	14 years
Trade Names [Member]
Intangible Assets Useful Life	20 years
Technical Know How [Member]
Intangible Assets Useful Life	10 years
Non Compete [Member]
Intangible Assets Useful Life	5 years
Professional Certifications [Member] \| Minimum
Intangible Assets Useful Life	3 months
Professional Certifications [Member] \| Maximum [Member]
Intangible Assets Useful Life	2 years

INTANGIBLE ASSETS (Details Narrative) - USD ($)	3 Months Ended
INTANGIBLE ASSETS (Details Narrative) - USD ($)	Mar. 31, 2015	Mar. 31, 2014
Notes to Financial Statements
Amortization of the intangibles	$ 307,000	$ 291,000

NOTES PAYABLE AND CAPITAL LEASE OBLIGATIONS (Details) - USD ($)	Mar. 31, 2015	Dec. 31, 2014
Notes Payable And Capital Lease Obligations Details
Revolving credit note payable to PNC Bank N.A. ("PNC")	$ 21,228,000	$ 17,672,000
Term loans, PNC	11,523,000	8,363,000
Capital lease obligations	1,678,000	1,645,000
Notes payable to sellers of WMI		41,000
Subtotal	34,429,000	27,721,000
Less: Current portion of notes and capital obligations	(23,831,000)	(19,508,000)
Notes payable and capital lease obligations, net of current portion	$ 10,598,000	$ 8,213,000

- Definition

The carrying value as of the balance sheet date of the current and noncurrent portions of long-term obligations drawn from a line of credit, which is a bank's commitment to make loans up to a specific amount. Examples of items that might be included in the application of this element may consist of letters of credit, standby letters of credit, and revolving credit arrangements, under which borrowings can be made up to a maximum amount as of any point in time conditional on satisfaction of specified terms before, as of and after the date of drawdowns on the line. Includes short-term obligations that would normally be classified as current liabilities but for which (a) postbalance sheet date issuance of a long term obligation to refinance the short term obligation on a long term basis, or (b) the enterprise has entered into a financing agreement that clearly permits the enterprise to refinance the short-term obligation on a long term basis and the following conditions are met (1) the agreement does not expire within 1 year and is not cancelable by the lender except for violation of an objectively determinable provision, (2) no violation exists at the BS date, and (3) the lender has entered into the financing agreement is expected to be financially capable of honoring the agreement.

+ References + Details

NOTES PAYABLE AND CAPITAL LEASE OBLIGATIONS (Details 1)	Mar. 31, 2015 USD ($)
Notes Payable And Capital Lease Obligations Details 1
March 31, 2016	$ 2,253,000
March 31, 2017	5,806,000
March 31, 2018	1,117,000
March 31, 2019	1,117,000
March 31, 2020	883,000
Thereafter	347,000
PNC Term Loan Payable	11,523,000
Less: Current portion	(2,253,000)
Long-term portion	$ 9,270,000

NOTES PAYABLE AND CAPITAL LEASE OBLIGATIONS (Details 2)	Dec. 31, 2014 USD ($)
Notes Payable And Capital Lease Obligations Details 2
March 31, 2016	$ 446,000
March 31, 2017	446,000
March 31, 2018	446,000
March 31, 2019	374,000
March 31, 2020	192,000
Thereafter	8,000
Total future minimum lease payments	1,912,000
Less: Imputed interest	(234,000)
Less: Current portion	(356,000)
Total Long Term Portion	$ 1,328,000

NOTES PAYABLE AND CAPITAL LEASE OBLIGATIONS (Details narrative) - USD ($)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014
Notes to Financial Statements
Revolving loan interest rate	4.00%		4.00%
Balance due under revolving loan	$ 21,228,000		$ 17,672,000
Balance due under the term loan A	2,326,000		2,421,000
Balance due under the term loan B	3,267,000		3,442,000
Balance due under the term loan C	2,430,000		2,500,000
Balance due under the term loan D	3,500,000
Interest expense related to credit facilities	285,000	$ 186,000
Capital lease obligations	$ 1,678,000		$ 1,645,000
Interest rate minimum	4.00%
Interest rate maximum	7.00%
Interest expense related to notes payable	$ 0	12,000
Interest expense On Junior Subordinated Notes	$ 0	$ 30,000

STOCKHOLDERS' EQUITY (Details Narrative)	3 Months Ended
STOCKHOLDERS' EQUITY (Details Narrative)	Mar. 31, 2015 shares
Stock Options [Member]
Common stock shares issued	11,875

INCOME TAXES (Details) - USD ($)	3 Months Ended
INCOME TAXES (Details) - USD ($)	Mar. 31, 2015	Mar. 31, 2014
Current
Federal	$ 166,000	$ 536,000
State	5,000	156,000
Total Expense	171,000	692,000
Deferred Tax Benefit	(147,000)	(108,000)
Net Benefit for Income Taxes	$ 24,000	$ 584,000

INCOME TAXES (Details 1) - USD ($)	Mar. 31, 2015	Dec. 31, 2014
Current:
Bad debts	$ 646,000	$ 650,000
Inventory - 263A adjustment	782,000	762,000
Account payable, accrued expenses and reserves	9,000	9,000
Total current deferred tax asset before valuation allowance	1,437,000	1,421,000
Valuation Allowance
Total current deferred tax asset after valuation allowance	1,437,000	1,421,000
Non- Current:
Capital loss carry forwards	1,088,000	1,088,000
Section 1231 loss carry forward	4,000	4,000
Stock based compensation - options and restricted stock	534,000	527,000
Capitalized engineering costs	518,000	522,000
Deferred rent	474,000	483,000
Amortization - NTW Transaction	730,000	663,000
Lease Impairment	16,000	22,000
Deferred gain on sale of real estate	175,000	179,000
Other	100,000
Total deferred tax assets before valuation allowance	3,639,000	3,488,000
Valuation allowance	(1,092,000)	(1,092,000)
Total deferred tax assets after valuation allowance	2,547,000	2,396,000
Deferred tax liabilities:
Property and equipment	(1,013,000)	(1,082,000)
Goodwill - NTW Transaction	(12,000)	(11,000)
Goodwill - AMK Transaction	(9,000)	(4,000)
Amortization - Welding Transaction	(424,000)	(441,000)
Total Deferred Tax Liability	(1,458,000)	(1,538,000)
Net deferred tax asset	$ 1,089,000	$ 858,000

INCOME TAXES (Details Narrative) - USD ($)	3 Months Ended
INCOME TAXES (Details Narrative) - USD ($)	Mar. 31, 2015	Dec. 31, 2014
Valuation allowance	$ 1,092,000	$ 1,092,000
Capital Loss Carry forward
Capital loss carry forward	$ 2,719,000
Capital loss carry forward expiry year	2015

SEGMENT REPORTING (Details) (Unaudited) - USD ($)	3 Months Ended
SEGMENT REPORTING (Details) (Unaudited) - USD ($)	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014
Gross Profit	$ 4,369,000	$ 4,045,000
Provision for Taxes	24,000	584,000
Assets	77,813,000	54,554,000	$ 65,920,000
COMPLEX MACHINING
Net Sales	9,064,000	12,140,000
Gross Profit	2,091,000	3,207,000
Pre Tax (Loss) Income	(180,000)	1,279,000
Assets	62,554,000	35,972,000
AEROSTRUCTURES AND ELECTRONICS
Net Sales	5,782,000	3,313,000
Gross Profit	2,162,000	838,000
Pre Tax (Loss) Income	770,000	(354,000)
Assets	18,049,000	12,547,000
TURBINE ENGINE COMPONENTS
Net Sales	1,965,000
Gross Profit	116,000
Pre Tax (Loss) Income	(462,000)
Assets	17,791,000
Corporate
Net Sales
Gross Profit
Pre Tax (Loss) Income
Assets	26,430,000	8,156,000
Consolidated
Net Sales	16,811,000	15,453,000
Gross Profit	4,369,000	4,045,000
Pre Tax (Loss) Income	128,000	925,000
Provision for Taxes	24,000	584,000
Net Income	104,000	341,000
Elimination of Assets	(47,011,000)	(2,121,000)
Assets	$ 77,813,000	$ 54,554,000