CPI Aerostructures Reports Second Quarter and Six Month 2023 Results

Rhea-AI Summary

CPI Aerostructures announces Q2 2023 financial results with increased revenue and profit margin

Positive

• Q2 2023 revenue up 8.6% to $20.5 million compared to Q2 2022
• Gross profit margin increases by 310 basis points to 22.4%
• Net income rises to $1.2 million compared to $0.5 million
• Earnings per diluted share increase to $0.09 from $0.04
• Cash flow from operations increases by $3.0 million for first six months of 2023

Negative

• Debt decreases by $1.5 million to $21.3 million

Second Quarter 2023 vs. Second Quarter 2022

• Revenue of $20.5 million compared to $18.9 million;
• Gross profit of $4.6 million compared to $3.7 million;
• Gross margin of 22.4% compared to 19.3%;
• Net income of $1.2 million compared to $0.5 million;
• Earnings per diluted share of $0.09 compared to $0.04;
• Cash flow from operations of $0.0 million compared to $0.3 million.

Six Months 2023 vs. Six Months 2022

• Revenue of $42.6 million compared to $39.1 million;
• Gross profit of $9.3 million compared to $7.1 million;
• Gross margin of 21.8% compared to 18.2%;
• Net income of $2.1 million compared to $0.5 million ($1.3 million excluding the first quarter severance accrual of $0.8 million);
• Earnings per diluted share of $0.17 compared to $0.04 ($0.10 excluding the first quarter severance accrual of $0.06);
• Cash flow from operations of $0.9 million compared to $(2.1) million used by operations;
• Debt as of June 30, 2023 of $21.3 million compared to $24.6 million at June 30, 2022.
  

EDGEWOOD, N.Y., Aug. 21, 2023 (GLOBE NEWSWIRE) -- CPI Aerostructures, Inc. (“CPI Aero” or the “Company”) (NYSE American: CVU) today announced financial results for the three and six month periods ended June 30, 2023.

“Our second quarter 2023 revenue was 8.6% higher than second quarter 2022 coupled with a 310 basis point increase in gross profit margin. Our six-month income from operations increased by $2.3 million as of June 30, 2023 compared to 2022 due to stronger operational performance and change in mix between our military subcontracts, government military subcontracts and MRO services. We generated $3.0 million more in cash flow from operations for the first six months of 2023 compared to 2022 due primarily to higher net income while increasing our contract assets in support of our new programs and, reduced our debt by $1.5 million,” said Dorith Hakim, President and CEO. “We remain focused on delivering value to our customers and are confident in CPI Aero’s long-term outlook as we continue to build on our backlog of $510 million as of June 30, 2023.”

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 word “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, 2022 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	Andrew L. Davis
Jody Burfening	Chief Financial Officer
(212) 838-3777	(631) 586-5200
cpiaero@lhai.com	adavis@cpiaero.com
	www.cpiaero.com

CPI AEROSTRUCTURES, INC. AND SUBSIDIARIES  CONSOLIDATED BALANCE SHEETS
		June 30,
		2023 (Unaudited)				December 31, 2022
ASSETS
Current Assets:
Cash		$	3,080,672			$	3,847,225
Accounts receivable, net			8,621,301				4,857,772
Insurance recovery receivable			—				3,600,000
Contract assets			30,962,061				27,384,540
Inventory			1,918,906				2,493,069
Refundable income taxes			40,000				40,000
Prepaid expenses and other current assets			565,714				975,830
Total Current Assets			45,188,654				43,198,436
Operating lease right-of-use assets			5,646,483				6,526,627
Property and equipment, net			950,732				1,124,556
Deferred tax asset			6,279,101				6,574,463
Goodwill			1,784,254				1,784,254
Other assets			234,334				238,744
Total Assets		$	60,083,558			$	59,447,080
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Accounts payable		$	11,734,379			$	8,029,996
Accrued expenses			5,314,339				7,344,590
Litigation settlement obligation			—				3,600,000
Contract liabilities			8,605,354				6,001,726
Loss reserve			250,516				576,549
Current portion of line of credit			2,640,000				1,200,000
Current portion of long-term debt			221,172				1,719,766
Operating lease liabilities, current			1,921,803				1,817,811
Income tax payable			16,874				11,396
Total Current Liabilities			30,704,437				30,301,834
Line of credit, net of current portion			18,360,000				19,800,000
Long-term operating lease liabilities			4,121,087				5,077,235
Long-term debt, net of current portion			41,484				70,981
Total Liabilities			53,227,008				55,250,050
Shareholders’ Equity:
Common stock - $.001 par value; authorized 50,000,000 shares, 12,727,167 and 12,506,795 shares, respectively, issued and outstanding			12,727				12,507
Additional paid-in capital			73,708,368				73,189,449
Accumulated deficit			(66,864,545	)			(69,004,926	)
Total Shareholders’ Equity			6,856,550				4,197,030
Total Liabilities and Shareholders’ Equity		$	60,083,558			$	59,447,080

CPI AEROSTRUCTURES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS
		For the Three Months Ended June 30,										For the Six Months Ended June 30,
		2023					2022					2023					2022
Revenue		$		20,547,555			$		18,925,406			$		42,564,223			$		39,060,503
Cost of sales				15,943,555					15,265,716					33,297,707					31,966,204
Gross profit				4,604,000					3,659,690					9,266,516					7,094,299
Selling, general and administrative expenses				2,806,480					2,697,392					5,675,538					5,835,049
Income from operations				1,797,520					962,298					3,590,978					1,259,250
Interest expense				541,655					438,437					1,152,551					767,045
Income before provision for income taxes				1,255,865					523,861					2,438,427					492,205
Provision for income taxes				98,789					6,225					298,046					7,500
Net income		$		1,157,076			$		517,636			$		2,140,381			$		484,705
Income per common share, basic:
Income per common share-unrestricted shares			$	0.09				$	0.04				$	0.17				$	0.04
Income per common share-restricted shares			$	0.09				$	0.04				$	0.17				$	0.04
Income per common share, diluted			$	0.09				$	0.04				$	0.17				$	0.04
Shares used in computing income per common share, basic:
Unrestricted shares				12,429,894					12,305,939					12,412,068					12,275,306
Restricted shares				128,899					133,061					127,584					125,975
Total shares				12,558,793					12,439,000					12,539,652					12,401,281
Shares used in computing income per common share, diluted				12,625,241					12,534,058					12,606,100					12,496,339