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Press Release

CPI Aerostructures Reports Third Quarter 2020 Results

Company Release - 12/31/2020 6:00 AM ET

Third Quarter 2020 vs. Third Quarter 2019

  • Revenue of $25.6 million compared to $22.7 million;
  • Gross profit of $4.2 million compared to $1.9 million;
  • Gross margin was 16.4% compared to 8.5%;
  • Net income of $0.82 million compared to net loss of $1.3 million;
  • Earnings per diluted share of $0.07 compared to loss per diluted share of $0.11;
  • Cash used by operations was $2.4 million compared to a use of $0.65 million;
  • Total backlog as of September 30, 2020 of $536.9 million including multi-year defense contracts of $480.2 million compared to total backlog as of September 30, 2019 of $523.3 million, including multi-year defense contracts of $454.1 million;
  • Total funded backlog of $189.6 million as of September 30, 2020, of which 97% or $183.9 million is comprised of defense orders, compared to total funded backlog of $153.4 as of September 30, 2019, of which 91%, or $139.7 million is comprised of defense orders.

Nine Months 2020 vs. Nine Months 2019

  • Revenue of $62.2 million compared to $64.8 million;
  • Gross profit of $7.5 million compared to $6.7 million;
  • Gross margin of 12.0% compared to 10.3%;
  • Net loss of $2.6 million compared to a net loss of $3.1 million;
  • Loss per share of $0.22 compared to a loss per share of $0.26;
  • Cash flow used by operations of $3.3 million compared to a use of $4.0 million

EDGEWOOD, N.Y., Dec. 31, 2020 (GLOBE NEWSWIRE) -- CPI Aerostructures, Inc. (“CPI Aero®”) (NYSE American: CVU) today announced financial results for the three and nine month periods ended September 30, 2020. In addition, CPI Aero has filed Form 10-Q for the quarter ended September 30, 2020; as a result, the company is now current with SEC financial reporting requirements and has regained compliance with the NYSE’s timely filing criteria.

“Third quarter revenue surged 30% over the second quarter as we began to ramp up production on newer defense programs. This production ramp up along with continued effective execution of our funded defense backlog drove a 38% sequential increase in revenue from defense contracts, which more than compensated for ongoing softness in our commercial aviation business. As a result, for the third quarter gross profit margin expanded 330 basis points to 16.4% and the bottom line swung $1.4 million to net income of $0.8 million,” said Douglas McCrosson, president and CEO of CPI Aero.

“Based on our solid third quarter results, we are increasingly confident in our expectations for accelerated revenue and margin improvement for the second half of 2020 compared to the first half and for revenue growth and higher operating income for 2020 compared to 2019. Looking ahead to 2021, our $183.9 million funded defense backlog gives us a high degree of confidence to affirm our previous 2021 outlook for growth in revenue, operating income and operating cash. Our demonstrated track record of competing for and winning new opportunities should help us sustain our strong backlog which will position us well for attractive long-term growth.”  

Conference Call

Management will host a conference call on Monday, January 4, 2021 at 8:30 AM ET 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 year ended December 31, 2019 and Forms 10-Q for the three-month periods ended March 31, 2020, June 30, 2020,and September 30, 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

 September 30,December 31,
 2020
(Unaudited)
 2019

 
   
ASSETS  
Current Assets:  
Cash$3,589,095 $4,052,109 
Restricted cash 1,380,684  1,380,684 
Accounts receivable, net of allowance for doubtful accounts of $239,547 as of
September 30, 2020 and $230,855 as of December 31, 2019
 7,309,323  7,029,602 
Contract assets 18,409,267  15,280,807 
Inventory 8,742,093  5,891,386 
Refundable income taxes 35,459  474,904 
Prepaid expenses and other current assets 600,889  721,964 
Total current assets 40,066,810  34,831,456 
   
Operating lease right-of-use assets 2,730,567  3,886,863 
Property and equipment, net 2,618,887  3,282,939 
Intangibles, net 281,250  375,000 
Goodwill 1,784,254  1,784,254 
Other assets 205,844  179,068 
Total assets$47,687,612 $44,339,580 
   
LIABILITIES AND SHAREHOLDERS’ DEFICIT  
Current Liabilities:  
Accounts payable$13,009,645 $8,199,557 
Accrued expenses 3,333,335  2,372,522 
Contract liabilities 2,469,441  3,561,707 
Loss contract reserve 1,569,447  2,650,963 
Current portion of long-term debt 5,377,559  2,484,619 
Operating lease liabilities 1,821,136  1,709,153 
Income tax payable 1,216  1,216 
Total current liabilities 27,581,779  20,979,737 
   
Line of credit 20,738,685  26,738,685 
Long-term operating lease liabilities 1,212,573  2,596,784 
Long-term debt, net of current portion 7,811,467  1,764,614 
Total liabilities 57,344,504  52,079,820 
   
Shareholders’ Deficit:  
Common stock - $.001 par value; authorized 50,000,000 shares, 11,926,177  
and 11,818,830 shares, respectively, issued and outstanding 11,926  11,819 
Additional paid-in capital 71,972,011  71,294,629 
Accumulated Deficit (81,640,829) (79,046,688)
Total Shareholders’ Deficit (9,656,892) (7,740,240)
Total Liabilities and Shareholders’ Deficit$47,687,612 $44,339,580 


CPI AEROSTRUCTURES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)


 For the Three Months Ended
September 30,
  For the Nine Months Ended
September 30,
 
           
 2020 2019  2020  2019 
           
Revenue$25,576,718$22,689,762  $62,175,872 $64,779,858 
Cost of sales21,394,243 20,757,649  54,715,508  58,120,687 
Gross profit4,182,475 1,932,113  7,460,364  6,659,171 
      
Selling, general and administrative expenses3,050,644 2,806,498  8,958,986  8,259,945 
Imcome (Loss) from operations1,131,831 (874,385) (1,498,622) (1,600,774)
      
Interest expense                        309,008 378,195  1,085,805  1,464,376 
Income (Loss) before provision for income taxes822,823 (1,252,580) (2,584,427) (3,065,150)
      
Provision for income taxes7,614 2,471  9,714  5,784 
Net loss$815,209$(1,255,051) $(2,594,141)$(3,070,934)
      
Income (Loss) per common share – basic$0.07$(0.11) $(0.22)$(0.26)
      
Income (Loss) per common share – diluted$0.07  $(0.11) $(0.22)   $(0.26)


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