CPI Aerostructures Reports Second Quarter and Six Month 2022 Results

CPI Aerostructures, Inc.
CPI Aerostructures, Inc.

Second Quarter 2022 vs. Second Quarter 2021

  • Revenue of $18.9 million compared to $22.3 million;

  • Gross profit of $3.7 million compared to $3.6 million;

  • Gross margin of 19.3% compared to 16.1%;

  • Net income of $0.5 million compared to $0.6 million;

  • Earnings per diluted share of $0.04 compared to $0.05;

  • Cash flow from operations of $0.3 million compared to $2.4 million.

Six Months 2022 vs. Six Months 2021

  • Revenue of $39.1 million compared to $53.1 million;

  • Gross profit of $7.1 million compared to $8.5 million;

  • Gross margin of 18.2% compared to 16.0%;

  • Net income of $0.5 million ($1.3 million excluding the first quarter severance accrual of $0.8 million) compared to $1.9 million;

  • Earnings per diluted share of $0.04 ($0.10 excluding the first quarter severance accrual of $0.06) compared to $0.15;

  • Cash flow used by operations of $(2.1) million compared to $(2.5) million;

  • Debt as of June 30, 2022 of $24.6 million compared to $27.7 million as of June 30, 2021 (excluding the $4.8 million Paycheck Protection Loan that was forgiven by the Small Business Administration on July 1, 2021).

EDGEWOOD, N.Y., Sept. 29, 2022 (GLOBE NEWSWIRE) — CPI Aerostructures, Inc. (“CPI Aero®” or the “Company”) (OTC Expert Market: CVUA) today announced financial results for the three and six month periods ended June 30, 2022.

“Today we filed our second quarter 2022 results on Form 10-Q for the period ended June 30, 2022 and we are now current with our Securities and Exchange Commission reports. The Company believes the filing of this Form 10-Q will resolve the condition that led to NYSE American suspending trading in the Company’s common stock on the Exchange and its determination to commence proceedings to delist the common stock from the Exchange. We intend to request that the Exchange retract its delisting determination and resume trading of our common stock although there can be no assurance as to if or when the Exchange may do so,” said Dorith Hakim, President and CEO.

Added Ms. Hakim, “During the second quarter we continued to on-board new programs with first deliveries starting in the fourth quarter of 2022. Our gross profit margin increased 320 basis points due to a 19% increase in revenues in our Aerostructures programs and improved performance in our Welding products. Finally, we continued to pay down our debt while generating positive operating cash flow.”

Concluded Ms. Hakim, “With a total backlog of $504 million as of June 30, 2022, we remain confident in CPI Aero’s long-term outlook and are looking forward to the opportunities ahead as we build on our reputation for high quality and reliable performance.”

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 Aero is also 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.

Forward-looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact, included or incorporated in this press release are forward-looking statements. The words “believes,” “will,” “outlook,” “looking forward,” ”opportunities ahead,” “intend” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements include the Company’s belief that the filing of the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2022 will resolve the condition that led to NYSE American suspending trading in the Company’s common stock and its determination to commence delisting proceedings.

Forward-looking statements involve risks and uncertainties, and actual results could vary materially from these forward-looking statements. Factors that may cause future results to differ materially from the Company’s current expectations include, among other things, any delay in the filing of Securities and Exchange Commission periodic reports, adverse effects on the Company’s business related to the disclosures made in this press release or the reactions of customers or suppliers, any adverse developments in existing legal proceedings or the initiation of new legal proceedings, and the trading price and volatility of the Company’s common stock.

The Company does not guarantee that it will actually achieve the plans, intentions or expectations disclosed in its forward-looking statements and you should not place undue reliance on the Company’s forward-looking statements. There are a number of important factors that could cause the Company’s actual results to differ materially from those indicated or implied by its forward-looking statements, including those important factors set forth under the caption “Risk Factors” in the Company’s Annual Report on Form 10-K for the period ended December 31, 2021 and in the Company’s other filings with the Securities and Exchange Commission. Although the Company may elect to do so at some point in the future, the Company does not assume any obligation to update any forward-looking statements and it disclaims any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

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

Contacts:

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

CPI Aerostructures, Inc.
Andrew L. Davis
Chief Financial Officer
(631) 586-5200
adavis@cpiaero.com
www.cpiaero.com


CPI AEROSTRUCTURES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

June 30,

December 31,

2022
(Unaudited)

2021

ASSETS

Current Assets:

Cash

$

2,626,061

$

6,308,866

Accounts receivable, net

4,846,553

4,967,714

Insurance recovery receivable

3,500,693

2,850,000

Contract assets

27,491,183

24,459,339

Inventory

3,587,781

4,028,925

Refundable income taxes

42,335

40,000

Prepaid expenses and other current assets

508,968

625,075

Total current assets

42,603,574

43,279,919

Operating lease right-of-use assets

6,937,956

7,796,768

Property and equipment, net

1,390,929

1,646,863

Intangibles, net

62,500

125,000

Goodwill

1,784,254

1,784,254

Other assets

325,854

372,741

Total assets

$

53,105,067

$

55,005,545

LIABILITIES AND SHAREHOLDERS’ DEFICIT

Current Liabilities:

Accounts payable

$

11,293,990

$

10,429,018

Accrued expenses

5,110,731

6,102,587

Litigation settlement obligation

3,600,000

3,003,259

Contract liabilities

5,027,832

5,122,766

Loss reserve

918,548

1,495,714

Current portion of long-term debt

3,332,391

3,365,181

Operating lease liabilities

1,641,243

1,580,453

Income tax payable

5,165

Total current liabilities

30,924,735

31,104,143

Line of credit

21,000,000

21,250,000

Long-term operating lease liabilities

5,604,664

6,445,728

Long-term debt, net of current portion

262,656

1,540,747

Total liabilities

57,792,055

60,340,618

Shareholders’ Deficit:

Common stock - $.001 par value; authorized 50,000,000 shares,

12,449,327 and 12,335,683 shares, respectively, issued and
outstanding

12,449

12,336

Additional paid-in capital

72,997,009

72,833,742

Accumulated deficit

(77,696,446

)

(78,181,151

)

Total Shareholders’ Deficit

(4,686,988

)

(5,335,073

)

Total Liabilities and Shareholders’ Deficit

$

53,105,067

$

55,005,545

 


CPI AEROSTRUCTURES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS

For the Three Months Ended
June 30,

For the Six Months Ended
June 30,

2022

2021

2022

2021

Revenue

$

18,925,406

$

22,301,190

$

39,060,503

$

53,119,936

Cost of sales

15,265,716

18,704,588

31,966,204

44,603,246

Gross profit

3,659,690

3,596,602

7,094,299

8,516,690

Selling, general and administrative expenses

2,697,392

2,677,688

5,835,049

6,068,494

Income from operations

962,298

918,914

1,259,250

2,448,196

Interest expense

438,437

293,685

767,045

588,174

Income before provision for income taxes

523,861

625,229

492,205

1,860,022

Provision for income taxes

6,225

2,078

7,500

4,328

Net income

$

517,636

$

623,151

$

484,705

$

1,855,694

Income per common share – basic

$

0.04

$

0.05

$

0.04

$

0.15

Income per common share – diluted

$

0.04

$

0.05

$

0.04

$

0.15

Shares used in computing loss per common share:

Basic

12,439,000

12,188,197

12,401,281

12,086,299

Diluted

12,534,058

12,255,950

12,496,339

12,154,052