CPI Aerostructures Reports First Quarter 2024 Results
CPI Aerostructures (NYSE American: CVU) reported its financial results for Q1 2024, ending March 31, 2024. Revenue decreased by 13% to $19.1 million compared to $22.0 million in Q1 2023. Gross profit was $3.6 million, down from $4.7 million, leading to a reduced gross profit margin of 18.6%. Net income fell to $0.2 million from $1.0 million, translating to earnings per share (EPS) of $0.01, down from $0.08. Cash flow from operations was negative at ($1.0) million, compared to a positive $0.9 million in Q1 2023. On a positive note, debt was reduced to $19.1 million from $22.1 million year-over-year. CEO Dorith Hakim highlighted the completion of key deliveries for Raytheon's NGJ Mid Band Pods LRIP 2 and the anticipation of resumed deliveries in the second half of the year, alongside a strong backlog of $510 million.
- Debt reduced to $19.1 million from $22.1 million as of March 31, 2023.
- Backlog remains strong at $510 million as of March 31, 2024.
- Anticipation of resumed deliveries for NGJ Mid Band Pod program in the second half of 2024.
- Revenue decreased by 13% to $19.1 million compared to $22.0 million in Q1 2023.
- Gross profit dropped to $3.6 million from $4.7 million.
- Gross profit margin decreased to 18.6% from 21.2%.
- Net income fell to $0.2 million from $1.0 million.
- Earnings per share decreased to $0.01 from $0.08.
- Negative cash flow from operations of ($1.0) million compared to $0.9 million positive in Q1 2023.
Insights
CPI Aerostructures' first quarter financial results for 2024 show a notable decline when compared to the same period in 2023. Revenue dropped to
On the positive side, the company's debt position has improved, reducing from
For a retail investor, the key takeaway should be the company's strategic moves to prepare for the NGJ Mid Band Pod LRIP 3, set to resume in the second half of the year. While the short-term financials show a downturn, the backlog of
The decline in revenue and gross profit margin reflects the completion of a significant contract, which is a common occurrence in project-based industries like aerospace. The company has highlighted a backlog of
It’s also worth noting the reduction in debt from
However, the negative cash flow from operations is a red flag. Cash flow is often seen as a more reliable indicator of financial health than earnings, as it’s harder to manipulate. This suggests that while the company is investing in future growth (ramping up for LRIP 3), it’s also facing short-term liquidity challenges.
The reference to the NGJ Mid Band Pods and their phased deliveries is crucial. These pods are advanced electronic warfare components being integrated into major defense systems. The completion of LRIP 2 and preparation for LRIP 3 underscore the strategic importance of these products. The technological requirements for such systems are typically high, requiring significant R&D investment and quality assurance, which can strain short-term profitability but are essential for long-term competitiveness.
The company's assertion that they are preparing for the next phase of deliveries indicates a focus on sustaining and potentially expanding this technologically advanced segment. This can position CPI Aero favorably in the high-margin defense sector, known for its rigorous standards and long-term contracts.
First Quarter 2024 vs. First Quarter 2023
- Revenue of
$19.1 million compared to$22.0 million ; - Gross profit of
$3.6 million compared to$4.7 million ; - Gross profit margin of
18.6% compared to21.2% ; - Net income of
$0.2 million compared to$1.0 million ; - Earnings per share of
$0.01 compared to$0.08 ; - Cash flow used in operations of (
$1.0) million compared to$0.9 million provided by cash flow from operations; - Debt as of March 31, 2024 of
$19.1 million compared to$22.1 million as of March 31, 2023.
EDGEWOOD, N.Y., May 15, 2024 (GLOBE NEWSWIRE) -- CPI Aerostructures, Inc. (“CPI Aero” or the “Company”) (NYSE American: CVU) today announced financial results for the three month period ended March 31, 2024.
“As anticipated, our first quarter 2024 revenue was
Added Ms. Hakim, “We remain focused on exceeding our customers’ performance expectations and are confident in CPI Aero’s long term outlook as we continue to build on our backlog of
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 words “expect, ”outlook” and similar expressions are intended to identify these 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 LHA Investor Relations Jody Burfening (212) 838-3777 cpiaero@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 | ||||||||
| March 31, 2024 (Unaudited) | December 31, 2023 | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash | $ | 3,018,068 | $ | 5,094,794 | ||||
| Accounts receivable, net | 4,982,137 | 4,352,196 | ||||||
| Contract assets, net | 34,016,949 | 35,312,068 | ||||||
| Inventory | 1,281,219 | 1,436,647 | ||||||
| Refundable income taxes | 40,000 | 40,000 | ||||||
| Prepaid expenses and other current assets | 532,458 | 678,026 | ||||||
| Total Current Assets | 43,870,831 | 46,913,731 | ||||||
| Operating lease right-of-use assets | 4,277,724 | 4,740,193 | ||||||
| Property and equipment, net | 741,264 | 794,056 | ||||||
| Deferred tax asset | 19,906,903 | 19,938,124 | ||||||
| Goodwill | 1,784,254 | 1,784,254 | ||||||
| Other assets | 174,530 | 189,774 | ||||||
| Total Assets | $ | 70,755,506 | $ | 74,360,132 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | 11,864,561 | $ | 10,487,012 | ||||
| Accrued expenses | 7,943,246 | 10,275,695 | ||||||
| Contract liabilities | 4,497,225 | 5,937,629 | ||||||
| Loss reserve | 133,206 | 337,351 | ||||||
| Current portion of line of credit | 2,160,000 | 2,400,000 | ||||||
| Current portion of long-term debt | 30,010 | 44,498 | ||||||
| Operating lease liabilities, current | 2,037,547 | 1,999,058 | ||||||
| Income taxes payable | 38,358 | 30,107 | ||||||
| Total Current Liabilities | 28,704,153 | 31,511,350 | ||||||
| Line of credit, net of current portion | 16,920,000 | 17,640,000 | ||||||
| Long-term operating lease liabilities | 2,581,128 | 3,100,571 | ||||||
| Long-term debt, net of current portion | 18,736 | 26,483 | ||||||
| Total Liabilities | 48,224,017 | 52,278,404 | ||||||
| Commitments and Contingencies (see note 11) | ||||||||
| Shareholders’ Equity: | ||||||||
| Common stock - $.001 par value; authorized 50,000,000 shares, 12,784,768 and 12,771,434 shares, respectively, issued and outstanding | 12,784 | 12,771 | ||||||
| Additional paid-in capital | 74,154,189 | 73,872,679 | ||||||
| Accumulated deficit | (51,635,484 | ) | (51,803,722 | ) | ||||
| Total Shareholders’ Equity | 22,531,489 | 22,081,728 | ||||||
| Total Liabilities and Shareholders’ Equity | $ | 70,755,506 | $ | 74,360,132 | ||||
| CPI AEROSTRUCTURES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
| For the Three Months Ended March 31, | ||||||||
| 2024 | 2023 | |||||||
| Revenue | $ | 19,081,143 | $ | 22,016,668 | ||||
| Cost of sales | 15,527,394 | 17,354,152 | ||||||
| Gross profit | 3,553,749 | 4,662,516 | ||||||
| Selling, general and administrative expenses | 2,713,904 | 2,869,058 | ||||||
| Income from operations | 839,845 | 1,793,458 | ||||||
| Interest expense | (632,135 | ) | (610,896 | ) | ||||
| Income before provision for income taxes | 207,710 | 1,182,562 | ||||||
| Provision for income taxes | 39,472 | 199,257 | ||||||
| Net income | $ | 168,238 | $ | 983,305 | ||||
| Income per common share, basic | $ | 0.01 | $ | 0.08 | ||||
| Income per common share, diluted | $ | 0.01 | $ | 0.08 | ||||
| Shares used in computing income per common share: | ||||||||
| Basic | 12,486,889 | 12,520,299 | ||||||
| Diluted | 12,680,584 | 12,608,189 | ||||||
FAQ
What was CPI Aerostructures' Q1 2024 revenue?
How much did CPI Aerostructures' gross profit decrease in Q1 2024?
What was CPI Aerostructures' net income in Q1 2024?
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How did CPI Aerostructures' debt change as of March 31, 2024?
What is the current backlog for CPI Aerostructures as of March 31, 2024?
What is the reason for the revenue decrease in Q1 2024 for CPI Aerostructures?
