CPI Aerostructures Reports Second Quarter and Six Month 2024 Results
Rhea-AI Summary
CPI Aerostructures (NYSE American: CVU) reported its financial results for Q2 and H1 2024. In Q2, revenue increased slightly to $20.8 million, with improved gross profit of $5.1 million and a higher gross margin of 24.6%. Net income rose to $1.4 million, with earnings per diluted share of $0.11. Adjusted EBITDA grew to $2.6 million.
For H1 2024, revenue decreased to $39.9 million, with lower gross profit of $8.7 million and slightly reduced gross margin of 21.7%. Net income declined to $1.6 million, with earnings per diluted share of $0.12. The company reduced its debt to $18.9 million and maintained a Debt-to-Adjusted EBITDA Ratio below 3.0 for the sixth consecutive quarter.
CEO Dorith Hakim noted progress in transitioning to future programs and an uptick in quote requests. The company's backlog stood at $512 million as of June 30, 2024.
Positive
- Q2 2024 revenue increased to $20.8 million from $20.5 million in Q2 2023
- Q2 2024 gross profit improved to $5.1 million from $4.6 million in Q2 2023
- Q2 2024 gross margin increased to 24.6% from 22.4% in Q2 2023
- Q2 2024 net income rose to $1.4 million from $1.2 million in Q2 2023
- Q2 2024 Adjusted EBITDA grew to $2.6 million from $2.1 million in Q2 2023
- Debt reduced by $2.4 million over the last twelve months
- Debt-to-Adjusted EBITDA Ratio at 2.7, below 3.0 for six consecutive quarters
- Backlog of $512 million as of June 30, 2024
Negative
- H1 2024 revenue decreased to $39.9 million from $42.6 million in H1 2023
- H1 2024 gross profit declined to $8.7 million from $9.3 million in H1 2023
- H1 2024 net income decreased to $1.6 million from $2.1 million in H1 2023
- H1 2024 earnings per diluted share reduced to $0.12 from $0.17 in H1 2023
- H1 2024 Adjusted EBITDA decreased to $3.8 million from $4.3 million in H1 2023
- Cash flow used in operations of $(1.6) million in H1 2024 compared to $0.9 million generated in H1 2023
Insights
CPI Aero's Q2 2024 results show modest improvements, with revenue up
However, the six-month figures paint a more cautious picture. Revenue declined
CPI Aero's transition from legacy programs to "programs of the future" is a strategic move in the evolving aerospace landscape. The uptick in quote requests and the robust
The company's focus on Intelligence Surveillance and Reconnaissance (ISR) pod systems aligns with increasing defense priorities. However, the aerospace supply chain faces ongoing challenges, including material costs and labor shortages. CPI Aero's ability to improve margins amidst these headwinds is commendable, but sustained revenue growth will be important for long-term success in this competitive sector.
Second Quarter 2024 vs. Second Quarter 2023
- Revenue of
$20.8 million compared to$20.5 million ; - Gross profit of
$5.1 million compared to$4.6 million ; - Gross margin of
24.6% compared to22.4% ; - Net income of
$1.4 million compared to$1.2 million ; - Earnings per diluted share of
$0.11 compared to$0.09 ; - Adjusted EBITDA (1) of
$2.6 million compared to$2.1 million ; - Cash flow used in operations of
$(0.6) million compared to$0.0 million .
Six Months 2024 vs. Six Months 2023
- Revenue of
$39.9 million compared to$42.6 million ; - Gross profit of
$8.7 million compared to$9.3 million ; - Gross margin of
21.7% compared to21.8% ; - Net income of
$1.6 million compared to$2.1 million ; - Earnings per diluted share of
$0.12 compared to$0.17 ; - Adjusted EBITDA (1) of
$3.8 million compared to$4.3 million - Cash flow used in operations of
$(1.6) million compared to$0.9 million generated by operations; - Debt as of June 30, 2024 of
$18.9 million compared to$21.3 million at June 30, 2023.
EDGEWOOD, N.Y., Aug. 13, 2024 (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, 2024.
“We made solid progress in the second quarter 2024 as we continue to transition from legacy programs to programs of the future. Although our second quarter revenue was marginally higher than second quarter 2023, gross profit margin increased by 220 basis points and our Net Income increased by
We reduced our debt by
Added Ms. Hakim, “We have seen an uptick in request for quotes based on our strong performance and strengthening of our financial position. We expect that our competitive position will continue to drive program wins, building off of 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 word “expect,” 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 | 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, 2024 (Unaudited) | December 31, 2023 | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash | $ | 1,936,697 | $ | 5,094,794 | ||||
| Accounts receivable, net | 6,228,639 | 4,352,196 | ||||||
| Contract assets, net | 34,183,988 | 35,312,068 | ||||||
| Inventory | 1,132,520 | 1,436,647 | ||||||
| Refundable income taxes | 40,000 | 40,000 | ||||||
| Prepaid expenses and other current assets | 563,147 | 678,026 | ||||||
| Total Current Assets | 44,084,991 | 46,913,731 | ||||||
| Operating lease right-of-use assets | 3,808,903 | 4,740,193 | ||||||
| Property and equipment, net | 793,664 | 794,056 | ||||||
| Deferred tax asset | 19,582,905 | 19,938,124 | ||||||
| Goodwill | 1,784,254 | 1,784,254 | ||||||
| Other assets | 162,803 | 189,774 | ||||||
| Total Assets | $ | 70,217,520 | $ | 74,360,132 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | 14,528,893 | $ | 10,487,012 | ||||
| Accrued expenses | 5,994,894 | 10,275,695 | ||||||
| Contract liabilities | 2,482,535 | 5,937,629 | ||||||
| Loss reserve | 59,922 | 337,351 | ||||||
| Current portion of line of credit | 2,640,000 | 2,400,000 | ||||||
| Current portion of long-term debt | 30,663 | 44,498 | ||||||
| Operating lease liabilities, current | 2,076,851 | 1,999,058 | ||||||
| Income taxes payable | 31,734 | 30,107 | ||||||
| Total Current Liabilities | 27,845,492 | 31,511,350 | ||||||
| Line of credit, net of current portion | 16,200,000 | 17,640,000 | ||||||
| Long-term operating lease liabilities | 2,044,237 | 3,100,571 | ||||||
| Long-term debt, net of current portion | 10,821 | 26,483 | ||||||
| Total Liabilities | 46,100,550 | 52,278,404 | ||||||
| Commitments and Contingencies (see note 11) | ||||||||
| Shareholders’ Equity: | ||||||||
| Common stock - $.001 par value; authorized 50,000,000 shares, 12,962,863 and 12,771,434 shares, respectively, issued and outstanding | 12,963 | 12,771 | ||||||
| Additional paid-in capital | 74,329,545 | 73,872,679 | ||||||
| Accumulated deficit | (50,225,538 | ) | (51,803,722 | ) | ||||
| Total Shareholders’ Equity | 24,116,970 | 22,081,728 | ||||||
| Total Liabilities and Shareholders’ Equity | $ | 70,217,520 | $ | 74,360,132 | ||||
| CPI AEROSTRUCTURES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||||||
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||||||
| Revenue | $ | 20,810,334 | $ | 20,547,555 | $ | 39,891,477 | $ | 42,564,223 | ||||||||||||
| Cost of sales | 15,694,910 | 15,943,555 | 31,222,304 | 33,297,707 | ||||||||||||||||
| Gross profit | 5,115,424 | 4,604,000 | 8,669,173 | 9,266,516 | ||||||||||||||||
| Selling, general and administrative expenses | 2,775,935 | 2,806,480 | 5,489,839 | 5,675,538 | ||||||||||||||||
| Income from operations | 2,339,489 | 1,797,520 | 3,179,334 | 3,590,978 | ||||||||||||||||
| Interest expense | (587,971 | ) | (541,655 | ) | (1,220,106 | ) | (1,152,551 | ) | ||||||||||||
| Income before provision for income taxes | 1,751,518 | 1,255,865 | 1,959,228 | 2,438,427 | ||||||||||||||||
| Provision for income taxes | 341,572 | 98,789 | 381,044 | 298,046 | ||||||||||||||||
| Net income | $ | 1,409,946 | $ | 1,157,076 | $ | 1,578,184 | $ | 2,140,381 | ||||||||||||
| Income per common share, basic | $ | 0.11 | $ | 0.09 | $ | 0.13 | $ | 0.17 | ||||||||||||
| Income per common share, diluted | $ | 0.11 | $ | 0.09 | $ | 0.12 | $ | 0.17 | ||||||||||||
| Shares used in computing income per common share: | ||||||||||||||||||||
| Basic | 12,440,426 | 12,558,793 | 12,515,824 | 12,539,652 | ||||||||||||||||
| Diluted | 12,554,153 | 12,625,241 | 12,656,753 | 12,606,100 | ||||||||||||||||
| Adjusted EBITDA (1) | $ | 2,617,870 | $ | 2,094,281 | $ | 3,838,805 | $ | 4,343,207 | ||||||||||||
Unaudited Reconciliation of GAAP to Non-GAAP Measures
Note: (1) Adjusted EBITDA is a non-GAAP measure defined as GAAP income from operations plus depreciation, amortization and stock-compensation expense.
Adjusted EBITDA as calculated by us may be calculated differently than Adjusted EBITDA for other companies. We have provided Adjusted EBITDA because we believe it is a commonly used measure of financial performance in comparable companies and is provided to help investors evaluate companies on a consistent basis, as well as to enhance understanding of our operating results. Adjusted EBITDA should not be construed as either an alternative to income from operations or net income or as an indicator of our operating performance or an alternative to cash flows as a measure of liquidity. The adjustments to calculate this non-GAAP financial measure and the basis for such adjustments are outlined below. Please refer to the following table below that reconciles GAAP income from operations to Adjusted EBITDA.
The adjustments to calculate this non-GAAP financial measure, and the basis for such adjustments, are outlined below:
Depreciation. The Company incurs depreciation expense (recorded in cost of sales and in selling, general and administrative expenses) related to capital assets purchased, leased or constructed to support the ongoing operations of the business. The assets are recorded at cost or fair value and are depreciated over the estimated useful lives of individual assets.
Stock-based compensation expense. The Company incurs non-cash expense related to stock-based compensation included in its GAAP presentation of cost of sales and selling, general and administrative expenses. Management believes that exclusion of these expenses allows comparison of operating results to those of other companies that disclose non-GAAP financial measures that exclude stock-based compensation.
Adjusted EBITDA is a non-GAAP financial measure and should not be considered in isolation or as a substitute for financial information provided in accordance with GAAP. This non-GAAP financial measure may not be computed in the same manner as similarly titled measures used by other companies. The Company expects to continue to incur expenses similar to the Adjusted EBITDA financial adjustments described above, and investors should not infer from the Company's presentation of this non-GAAP financial measure that these costs are unusual, infrequent, or non-recurring.
Reconciliation of income from operations to Adjusted EBITDA is as follows:
| Three months ended June 30, | Six months ended June 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Income from operations | $ | 2,339,489 | $ | 1,797,520 | $ | 3,179,334 | $ | 3,590,978 | ||||||||
| Depreciation | 102,846 | 116,545 | 202,413 | 233,090 | ||||||||||||
| Stock-based compensation | 175,535 | 180,216 | 457,058 | 519,139 | ||||||||||||
| Adjusted EBITDA | $ | 2,617,870 | $ | 2,094,281 | $ | 3,838,805 | $ | 4,343,207 | ||||||||
FAQ
What was CPI Aerostructures' (CVU) revenue for Q2 2024?
How did CPI Aerostructures' (CVU) net income change in Q2 2024?
What was CPI Aerostructures' (CVU) Adjusted EBITDA for Q2 2024?
How much debt did CPI Aerostructures (CVU) have as of June 30, 2024?
What was CPI Aerostructures' (CVU) backlog as of June 30, 2024?
