CPI Aerostructures Reports Fourth Quarter 2020 Results

CPI Aerostructures, Inc.
·7 min read

Fourth Quarter 2020 vs. Fourth Quarter 2019

  • Revenue of $25.4 million compared to $22.7 million.

  • Gross profit of $4.6 million compared to $2.5 million.

  • Gross margin of 18.2% compared to 10.9%.

  • Net income of $1.3 million compared to net loss of $(1.4) million.

  • Earnings per diluted share of $0.11 compared to loss per diluted share of $(0.12).

  • Cash flow from operations of $1.7 million compared to $3.7 million.

Full Year 2020 vs. Full Year 2019

  • Revenue of $87.6 million compared to $87.5 million.

  • Gross profit of $12.1 million compared to $9.1 million.

  • Gross margin of 13.8% compared to 10.4%.

  • Net loss of $(1.3) million compared to a net loss of $(4.5) million.

  • Loss per share of $(0.11) compared to a loss per share of $(0.38).

  • Cash flow used by operations of $(1.6) million compared to a use of $(0.4) million.

  • Total funded backlog of $169.6 million of which $166.2 or 98% is for defense markets, compared to $147.6 million, of which $136.9 million, or 93% was for defense markets.

  • Book-to-bill ratio of 1.24 compared to 1.29.

EDGEWOOD, N.Y., April 16, 2021 (GLOBE NEWSWIRE) -- CPI Aerostructures, Inc. (“CPI Aero®”) (NYSE American: CVU) today announced financial results for the three- and twelve-month periods ended December 31, 2020.

“For the fourth quarter, we delivered on our expectation for a strong finish to the year, posting 11.9% higher revenue, a 730-basis point improvement in gross margin and a swing to bottom line profitability. Revenue growth was driven by continued effective execution of our funded military backlog. Revenue from military contracts increased by 13% while revenue from commercial aviation contracts was essentially flat from last year.

“For the year, our top line grew slightly from 2019 despite the extraordinary and unprecedented circumstances of 2020. We are especially pleased that our defense product revenue increased by more than 15%, or $10.5 million over last year. This progress, however, was masked by a $10.4 million decline in our commercial revenue due to the Covid-19 pandemic. Cash flow from operations in 2020 was $1.2 million less than in 2019; however, 2019 benefited from a more than $3 million tailwind caused by a customer overpayment that was fully repaid during 2020, creating a headwind to reported cash generation,” said Douglas McCrosson, president and CEO of CPI Aero.

“As previously reported, at the end of the fourth quarter we exited a very unprofitable program we had with a business jet customer. This program had been a drag on our margins and operating cash flow generation for the past two years. The exit of this program contributed to a decline in our total backlog at year-end; however, the more than $476 million that remains is high-quality and comprised almost entirely of multi-year contracts with our defense industry customers for products supporting programs aligned with national security spending priorities. More importantly, the total backlog is converting to funded orders and we saw our second year in a row with a book-to-bill ratio higher than 1.24, while our funded backlog increased by 15% this year,” added Mr. McCrosson.

“During the back half of 2020, the seeds of our defense-oriented business development strategy began to bear fruit as a number of newer defense programs ramped up, driving revenue growth from defense contracts and margin gains. With several of these programs moving into production in 2021, we expect to sustain momentum in the business. This momentum along with a funded backlog of $170 million boosts our confidence in our outlook for higher revenue, operating income and operating cash flow in 2021 compared to 2020,” concluded Mr. McCrosson.

Conference Call

Management will host a conference call on Friday, April 16 at 8:30 a.m. to discuss these results. 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 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 the Investor Relations section, then the Event Calendar. Please go to the website 15 minutes early to download and install any 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 and Electronic Warfare pod systems, primarily for 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 years ended December 31, 2019 and December 31, 2020.

CPI Aero® is a registered trademark of CPI Aerostructures, Inc. For more information, visit www.cpiaero.com, and follow us on Twitter @CPIAERO.

Contact:
Investor Relations Counsel:
LHA Investor Relations
Jody Burfening
(212) 838-3777
cpiaero@lhai.com
www.lhai.com



CPI AEROSTRUCTURES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

December 31,

December 31,

2020

2019

ASSETS

Current Assets:

Cash

$6,033,537

$4,052,109

Restricted cash

---

1,380,684

Accounts receivable, net

4,962,906

7,029,602



Contract assets


19,729,638

15,280,807

Inventory

9,567,921

5,891,386

Refundable income taxes

40,000

474,904

Prepaid expenses and other current assets

534,857

721,964

Total Current Assets

40,868,859

34,831,456

Operating lease right-of-use assets

4,075,048

3,886,863

Property and equipment, net

2,521,742

3,282,939

Intangibles, net

250,000

375,000

Goodwill

1,784,254

1,784,254

Other assets

191,179

179,068

Total Assets

$49,691,082

$44,339,580

LIABILITIES AND SHAREHOLDERS’ DEFICIT

Current Liabilities:

Accounts payable

$12,092,684

$8,199,557

Accrued expenses

5,693,518

2,372,522

Contract liabilities

1,650,549

3,561,707

Loss reserve

800,971

2,650,963

Current portion of long-term debt

6,501,666

2,484,619

Operating lease liabilities

1,819,237

1,709,153

Income taxes payable

862

1,216

Total Current Liabilities

28,559,487

20,979,737

Line of credit

20,738,685

26,738,685

Long-term operating lease liabilities

2,537,149,

2,596,784

Long-term debt, net of current portion

6,205,095

1,764,614

Total Liabilities

58,040,416

52,079,820

Shareholders’ Deficit :

Common stock - $.001 par value; authorized 50,000,000 shares, 11,951,271 and 11,818,830 shares, respectively, issued and outstanding

11,951

11,819

Additional paid-in capital

72,005,841

71,294,629

Accumulated deficit

(80,367,126)

(79,046,688)

Total Shareholders’ Deficit

(8,349,334)

(7,740,240)

Total Liabilities and Shareholders’ Deficit

$49,691,082

$44,339,580



CPI AEROSTRUCTURES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS

Years ended December 31,

2020

2019

Revenue

$87,584,690

$87,518,688

Cost of sales

75,490,503

78,386,997

Gross profit

12,094,187

9,131,691

Selling, general and administrative expenses

12,046,170

11,562,781

Profit/(Loss) from operations

48,017

(2,431,090)

Other expense:

Other income

---

89,666

Interest expense

(1,421,955)

(2,104,851)

Total other expense, net

(1,421,955)

(2,015,185)

Loss before provision for income taxes

(1,373,938)

(4,446,275)

Provision for/ (benefit from) income taxes

(53,500)

3,877

Net loss

(1,320,438)

(4,450,152)

Loss per common share-basic

$(0.11)

$(0.38)

Loss per common share-diluted

$(0.11)

$(0.38)

Shares used in computing loss per common share:

Basic

11,884,307

11,808,052

Diluted

11,884,307

11,808,052