EDGEWOOD, N.Y., May 15, 2018 (GLOBE NEWSWIRE) — CPI Aerostructures, Inc. (“CPI Aero®” or the “Company”) (NYSE American:CVU) today announced financial results for the three month period ended March 31, 2018.
Note: Effective January 1, 2018, the Company adopted Accounting Standards Codification Topic 606 Revenue from Contracts with Customers (“ASC 606”) using the modified retrospective method. Revenue recognition on all of the Company’s contracts did not change materially as a result of the adoption of ASC 606.
First Quarter 2018 vs. First Quarter 2017
- Revenue of $18.2 million compared to $20.0 million;
- Gross profit of $4.0 million compared to $4.5 million;
- Pre-tax income of $1.6 million compared to $2.0 million;
- Net income of $1.3 million compared to $1.2 million;
- Earnings per diluted share of $0.14 compared to $0.14; and
- Total backlog at $373.3 million with multi-year defense contracts comprising 78%.
First Quarter Highlights
- Announced acquisition of Welding Metallurgy, Inc. (“WMI”);
- Strengthened senior management team with addition of former Northrop Grumman Senior Director of Business Development to lead Company’s defense market strategy and business development;
- Received a contract extension on the AH-1Z aerostructures program from Bell; and
- Received new awards from Northrop on structural kits for E-2D Advanced Hawkeyes for Japan.
Subsequent to the end of the quarter, the Company received a commitment letter from BankUnited to amend the BankUnited facility, extending the term of the revolving loan for an additional two years to May 31, 2021, as well as amending the payments under the term loan through May 31, 2021. In addition, BankUnited has agreed to finance the Company’s acquisition of WMI through a new term loan. The amendments to the BankUnited Facility are subject to the lenders’ due diligence and the preparation and execution of formal documentation.
“We delivered a fourth consecutive quarter of profitability on the strength of strong operational performance and continued cost control,” stated Douglas McCrosson, president and CEO of CPI Aerostructures. “As expected, revenue declined year-over-year and was attributable to lower revenue from F-16 wing components and E-2D outer wing panel kits that offset higher revenue from our Next Generation Jammer pod program with Raytheon and our T-38 Pacer Classic III prime contracts with the U.S. Air Force. The decrease in F-16 program revenue is a timing issue and we expect revenue from this program to grow in fiscal 2018. Revenue for our E-2D wing panel kit program experienced a decline as we transition from one multi-year contract to an anticipated new multi-year contract expected later this year.
“During the quarter we moved forward with our acquisition of WMI and expect to close the transaction in the second quarter of 2018,” continued Mr. McCrosson. “Our mutual customers have reacted very positively to the news and we are already developing a business development pipeline that reflects our combined technical capabilities. We remain focused on long-term growth opportunities and expanding our backlog of defense orders that, with our efficient infrastructure, keep us on a trajectory for top-line growth and profitability.”
Management will host a conference call on Tuesday, May 15, 2018, at 8:30 a.m. ET to discuss these results as well as recent corporate developments. After opening remarks, there will be a question and answer period. Interested parties may participate in the call by dialing 844-378-6486 or 412-542-4181. Please call in 10 minutes before the conference call is scheduled to begin and ask for the CPI Aero call. The conference call will also be broadcast live over the Internet. Additionally, a slide presentation will accompany the conference call. To listen to the live call, please go to www.cpiaero.com, click on the Investor Relations section, then to the Event Calendar. Please go to the website 15 minutes early to download and install any necessary audio software. If you are unable to listen live, the conference call will be archived and can be accessed for approximately 90 days.
About CPI Aero
CPI Aero is a U.S. manufacturer of structural assemblies for fixed wing aircraft, helicopters and airborne Intelligence Surveillance and Reconnaissance pod systems in both the commercial aerospace and national security markets. Within the global aerostructure supply chain, CPI Aero is either a Tier 1 supplier to aircraft OEMs or a Tier 2 subcontractor to major Tier 1 manufacturers. CPI also is a prime contractor to the U.S. Department of Defense, primarily the Air Force. In conjunction with its assembly operations, CPI Aero provides engineering, program management, supply chain management, and MRO services. CPI Aero is included in the Russell Microcap® Index.
The above statements include forward looking statements that involve risks and uncertainties, which are described from time to time in CPI Aero’s SEC reports, including CPI Aero’s Form 10-K for the year ended December 31, 2017 and Form 10-Q for the three-month periods ended March 31, 2018.
CPI Aero® is a registered trademark of CPI Aerostructures, Inc.
Chief Financial Officer
|Investor Relations Counsel:
Jody Burfening/Sanjay M. Hurry
– Tables to Follow –
|CPI AEROSTRUCTURES, INC.
STATEMENTS OF INCOME
|For the Three Months Ended March 31,|
|Cost of revenue||14,141,755||15,495,187|
|Selling, general and administrative expenses||2,049,840||2,163,878|
|Income from operations||2,000,028||2,373,636|
|Income before provision for income taxes||1,552,765||1,983,301|
|Provision for income taxes||296,000||734,000|
|Other comprehensive income (loss) net of tax –|
|Change in unrealized gain-(loss) interest rate swap||(5,800)||5,200|
|Income per common share – basic||$0.14||$0.14|
|Income per common share – diluted||$0.14||$0.14|
|Shares used in computing earnings per common share:|
|CPI AEROSTRUCTURES, INC.
|March 31,||December 31,|
|Accounts receivable, net of allowance for doubtful accounts of $150,000 as of
March 31, 2018 and December 31, 2017
|Prepaid expenses and other current assets||2,363,604||2,413,187|
|Total current assets||120,654,834||120,382,436|
|Property and equipment, net||2,049,651||2,046,942|
|Deferred income taxes, net||1,161,818||1,566,818|
|LIABILITIES AND SHAREHOLDERS’ EQUITY|
|Current portion of long-term debt||2,135,641||2,009,000|
|Line of credit||24,838,685||22,838,685|
|Income tax payable||—||109,327|
|Total current liabilities||41,049,371||42,244,635|
|Long-term debt, net of current portion||6,479,867||7,019,468|
|Common stock – $.001 par value; authorized 50,000,000 shares,|
|8,923,845 and 8,864,319 shares, respectively,|
|issued and outstanding||8,919||8,863|
|Additional paid-in capital||54,120,415||53,770,618|
|Accumulated other comprehensive loss||(20,600)||(14,800)|
|Total Shareholders’ Equity||75,914,151||74,313,333|
|Total Liabilities and Shareholders’ Equity||$124,038,562||$124,184,499|