CPI Aerostructures Announces 2017 Third Quarter Financial Results
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E-mailEDGEWOOD, NY -- (Marketwired) -- 11/08/17 -- CPI Aerostructures, Inc. ("CPI Aero®") (NYSE American: CVU) today announced financial results for the three-month and nine-month periods ended September 30, 2017.
3Q 2017 vs. 3Q 2016
- Revenue was $20.7 million compared to $22.1 million;
- Gross profit was $4.9 million compared to $5.0 million;
- Gross margin was 23.7% compared to 22.7%
- Pre-tax income was $2.5 million compared to $2.7 million;
- Net income was $1.7 million compared to $1.7 million;
- Earnings per diluted share were $0.19 compared to $0.19 per diluted share;
- Cash flow from operations was $0.9 million compared to $0.5 million; and
- Total backlog at $397.9 million with multi-year defense contracts comprising 79%.
Nine Months 2017 vs. Nine Months 2016
- Revenue was $57.5 million compared to $57.1 million;
- Gross profit (loss) was $13.1 million compared to $(1.6) million;
- Pre-tax income (loss) was $5.7 million compared to $(9.1) million;
- Net income (loss) was $3.7 million compared to $(5.7) million;
- Earnings (loss) per diluted share of $0.42 compared to $(0.67) per diluted share; and
- Cash flow used in operations was $(0.2) million compared to $(6.8) million.
"We delivered another solid performance in the third quarter despite order push-outs from newer defense programs still in their development phase that delayed revenue recognition. Working capital improvements, in particular, combined with higher margins drove positive operating cash flow of approximately $0.9 million in the quarter that enabled us to further pay down the outstanding balance on our line of credit," stated Douglas McCrosson, CPI Aero president and CEO. "Our defense market strategy continued to yield positive results. New awards from Sikorsky, the U.S. Air Force and Lockheed Martin added to our defense backlog in the quarter, which kept our defense book-to-bill at nearly 1.0. Subsequent to the close of the quarter we received a follow-on order in support of a foreign military aircraft sale valued at approximately $6 million. These awards highlight our growing reputation in the military supply chain as a high quality, lower cost alternative to in-house assembly work grounded in exceptional program execution, value and customer service."
Continued Mr. McCrosson, "Looking ahead, we expect operating cash flow to remain positive on the basis of margin expansion as certain programs transition to full production and cost and process improvements. We remain focused on growing our top-line and expanding our backlog, particularly for our defense products. As the outlook for U.S. defense sector fundamentals improves and spending is allocated to both readiness and modernization, our core competency uniquely positions us to support both legacy and next-generation platforms, and both are reflected in our pipeline of opportunities. Based on our year to date performance and the momentum in backlog we are seeing, we believe we are firmly on a trajectory for sustained top-line growth and profitability."
Financial Outlook
CPI Aero has updated its financial guidance for fiscal 2017 in light of its third quarter results. The company now expects:
- Revenue at the low end of its prior range of $82.5 million and $87.0 million;
- Pre-tax income to be at the high end of a range of $8.1 million to $8.5 million;
- Effective tax rate of approximately 35%.
Conference Call Management will host a conference call on Wednesday, November 8, 2017, 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 and value-added kits for fixed wing and rotary wing aircraft in both the commercial aerospace and defense markets. CPI Aero also manufactures pod-based, airborne avionics systems for Intelligence Surveillance and Reconnaissance (ISR), Electronic Warfare (EW) and Radar end-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, 2016 and Form 10-Q for the quarters ended March 31, 2017, and June 30, 2017.
CPI Aero® is a registered trademark of CPI Aerostructures, Inc. For more information, visit www.cpiaero.com, and follow us on Twitter @CPIAERO.
- Tables to Follow -
CPI AEROSTRUCTURES, INC.
STATEMENTS OF OPERATIONS
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
2017 2016 2017 2016
(Unaudited) (Unaudited)
Revenue $20,706,460 $22,110,829 $57,471,112 $57,061,826
Cost of sales 15,794,024 17,086,461 44,337,414 58,642,561
------------ ------------ ------------ ------------
Gross profit (loss) 4,912,436 5,024,368 13,133,698 (1,580,735)
Selling, general and
administrative
expenses 2,044,304 2,014,147 6,210,380 6,603,321
------------ ------------ ------------ ------------
Income (loss) from
operations 2,868,132 3,010,221 6,923,318 (8,184,056)
Interest expense 402,619 338,156 1,258,857 937,523
------------ ------------ ------------ ------------
Income (loss) before
provision for
(benefit from) income
taxes 2,465,513 2,672,065 5,664,461 (9,121,579)
Provision for (benefit
from) income taxes 770,000 986,000 1,954,000 (3,378,000)
------------ ------------ ------------ ------------
Net income (loss) 1,695,513 1,686,065 3,710,461 (5,743,579)
Other comprehensive
income
net of tax -
Change in unrealized
gain (loss)
interest rate swap (2,300) 25,936 1,900 (44,547)
------------ ------------ ------------ ------------
Comprehensive income
(loss) $1,693,213 $1,712,001 $3,712,361 $(5,788,126)
============ ============ ============ ============
Income (loss) per
common share - basic $0.19 $0.19 $0.42 $(0.67)
============ ============ ============ ============
Income (loss) per
common share -
diluted $0.19 $0.19 $0.42 $(0.67)
============ ============ ============ ============
Shares used in
computing income
(loss) per common
share:
Basic 8,846,507 8,678,608 8,820,379 8,628,716
============ ============ ============ ============
Diluted 8,872,810 8,692,420 8,841,397 8,628,716
============ ============ ============ ============
CPI AEROSTRUCTURES, INC.
BALANCE SHEETS
September 30, December 31,
2017 2016
(Unaudited)
ASSETS
Current Assets:
Cash $711,083 $1,039,586
Accounts receivable, net of allowance for
doubtful accounts of $150,000 as of
September 30, 2017 and $535,514 as of
December 31, 2016 4,743,596 8,514,613
Costs and estimated earnings in excess of
billings on uncompleted
contracts 108,377,905 99,578,526
Prepaid expenses and other current assets 2,470,845 2,155,481
------------- -------------
Total current assets 116,303,429 111,288,206
Property and equipment, net 2,016,774 2,298,610
Deferred income taxes, net 2,143,216 3,952,598
Other assets 204,348 252,481
------------- -------------
Total Assets $120,667,767 $117,791,895
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $13,170,829 $14,027,457
Accrued expenses 1,347,789 1,386,147
Billings in excess of costs and estimated
earnings on uncompleted contracts 413,004 115,337
Current portion of long-term debt 1,863,711 1,341,924
Contract loss 280,622 1,377,171
Line of credit 23,438,685 22,438,685
Income tax payable 6,000 6,000
------------- -------------
Total current liabilities 40,520,640 40,692,721
Long-term debt, net of current portion 7,433,937 8,860,724
Other liabilities 607,833 632,744
------------- -------------
Total Liabilities 48,562,410 50,186,189
------------- -------------
Shareholders' Equity:
Common stock - $.001 par value; authorized
50,000,000 shares, 8,846,817 and 8,739,836
shares, respectively, issued and
outstanding 8,847 8,738
Additional paid-in capital 53,612,131 52,824,950
Retained earnings 18,491,479 14,781,018
Accumulated other comprehensive loss (7,100) (9,000)
------------- -------------
Total Shareholders' Equity 72,105,357 67,605,706
------------- -------------
Total Liabilities and Shareholders' Equity $120,667,767 $117,791,895
============= =============
Contact: Vincent Palazzolo Chief Financial Officer CPI Aero (631) 586-5200 www.cpiaero.com Investor Relations Counsel: LHA Sanjay M. Hurry/Jody Burfening (212) 838-3777 [email protected] www.lhai.com
Source: CPI Aerostructures, Inc.
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