CPI Aerostructures Awarded Lot 4 Production Contract of Next Generation Jammer Mid-Band Program by Raytheon Technologies

Rhea-AI Summary

CPI Aerostructures (CVU) has received authorization from Raytheon Technologies to begin manufacturing pod structures and air management system components for the Lot 4 Production phase of the Next Generation Jammer Mid-Band (NGJ-MB) program, with a maximum contract value of $33.4 million.

The NGJ-MB is an advanced offensive airborne electronic attack system designed for EA-18G and F/A-18E/F aircraft, with two pods required per EA-18G aircraft. The Lot 4 contract supports the production of 34 Pods, with deliveries scheduled to begin in the second half of 2025.

This follows previous production phases: LRIP 1 (July 2021), LRIP 2 (December 2021), and LRIP 3 (May 2023). The program achieved Milestone C in June 2021, confirming its readiness for production. CPI Aero reports delivering pods on or ahead of schedule for this critical U.S. Navy capability.

Positive

• New contract award worth up to $33.4 million
• Production of 34 pods for a strategic military program
• Track record of on-time or early deliveries
• Continuation of existing program relationship (4th lot)

Negative

• None.

Insights

Defense Industry Analyst

The $33.4 million Lot 4 production contract for the NGJ-MB program represents a important milestone for CPI Aero. The contract scope of 34 pods demonstrates steady program progression through LRIP phases, indicating strong execution capability and customer satisfaction. The timing of deliveries starting H2 2025 aligns well with the Navy's modernization timeline for EA-18G electronic warfare capabilities.

This award has strategic significance beyond its monetary value - it positions CPI Aero as a key supplier in the critical electronic warfare domain. The NGJ-MB's role in penetrating denied airspace makes it a priority program, suggesting potential for sustained future orders. For a company with a $55.7 million market cap, this single contract represents approximately 60% of their market value, significantly de-risking near-term revenue streams.

The on-time/ahead-of-schedule delivery performance is particularly noteworthy in the current supply chain environment. This track record increases the probability of securing additional work packages on this and other defense programs, providing a foundation for organic growth.

Financial Analyst

The contract's structure and timing have several positive financial implications. The $33.4 million maximum value provides clear revenue visibility through 2025-2026. With CPI Aero's trailing twelve-month revenue of approximately $103 million, this single contract could represent roughly 32% of annual revenue, demonstrating strong backlog building.

The continuation order nature of the contract suggests healthy program margins, as manufacturing processes are now well-established after three LRIP phases. This should support gross margin stability and potentially expansion as production efficiencies are realized. The steady progression of orders (LRIP 1 in 2021, LRIP 2 in 2021, LRIP 3 in 2023 and now Lot 4) indicates a mature program entering full-rate production phase, which typically carries lower execution risk and better payment terms.

– Production Order for pods and air management system components valued at up to $33.4 Million –

EDGEWOOD, N.Y., Jan. 13, 2025 (GLOBE NEWSWIRE) -- CPI Aerostructures, Inc. (“CPI Aero®” or the “Company”) (NYSE American: CVU) announced today that Raytheon Technologies authorized CPI Aero to begin manufacturing of pod structures and air management system components for the follow-on Lot 4 Production phase of the Next Generation Jammer Mid-Band (NGJ-MB) program. The binding notification provides a maximum value of $33.4 million.

Raytheon Technologies is manufacturing and delivering NGJ-MB, a technologically superior, all-aspect, high-power offensive airborne electronic attack system able to achieve force-level spectrum superiority in modern Anti-Access/Area Denial environments. NGJ-MB enhances existing EA-18G and F/A-18E/F cooperation to increase kinetic engagement capacity. There are two NGJ-MB pods per EA-18G aircraft. CPI Aero is delivering the Pod Structure and associated Air Management Systems (AMS). In June 2021, the NGJ-MB program reached Milestone C, indicating the system is ready for production. LRIP 1 was awarded July 2021, and LRIP 2 was awarded December 2021. LRIP 3 production phase was awarded May 2023. The Lot 4 contract announced today supports production of 34 Pods with deliveries commencing in the second half of 2025.

“CPI is delivering Next Generation Jammer-Mid Band Pods on or ahead of schedule. Raytheon has communicated how critical the need is for this capability, and we are proud to be meeting our commitment to Raytheon, the U.S. Navy, and the Warfighter,” stated Dorith Hakim, President and CEO of CPI Aero.

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.

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 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.

Forward-looking statements involve risks and uncertainties, and actual results could vary materially from these 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, 2023 filed 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	CPI Aerostructures, Inc.
LHA Investor Relations	Philip Passarello
Jody Burfening	Chief Financial Officer
(212) 838-3777	(631) 586-5200
cpiaero@lhai.com	ppassarello@cpiaero.com
	www.cpiaero.com

FAQ

What is the value of CVU's new Lot 4 NGJ-MB contract with Raytheon?

The Lot 4 production contract has a maximum value of $33.4 million.

How many NGJ-MB pods will CVU produce under the Lot 4 contract?

CPI Aerostructures will produce 34 pods under the Lot 4 contract.

When will CVU begin deliveries for the Lot 4 NGJ-MB contract?

Deliveries for the Lot 4 contract are scheduled to commence in the second half of 2025.

How many NGJ-MB pods are required per EA-18G aircraft?

Each EA-18G aircraft requires two NGJ-MB pods.

What is CVU's delivery performance on the NGJ-MB program?

CPI Aerostructures is delivering Next Generation Jammer-Mid Band Pods on or ahead of schedule.