L3Harris Awards CPI Aerostructures, Inc. Contract for Next Generation Jammer Low-Band Program

Rhea-AI Summary

CPI Aerostructures (NYSE American: CVU) has secured a contract worth up to $12.1 million from L3Harris Technologies to manufacture airborne pod structures for the Next Generation Jammer Low-Band (NGJ-LB) program. The contract supports L3Harris' delivery of operational prototype pods to the U.S. Naval Air Systems Command.

Deliveries will begin in 2025 and continue through 2027. The NGJ-LB pods, designed for the EA-18G Growler, will replace the AN/ALQ-99 Tactical Jamming System. The system features advanced processing, increased jamming capability, and a modular architecture for future upgrades. The program is scheduled to reach early operational capability in 2029.

Positive

• Secured new contract worth up to $12.1 million
• Multi-year delivery schedule from 2025 through 2027
• Expands presence in military defense aerospace market
• Strengthens relationship with major defense contractor L3Harris

Negative

• None.

Insights

Financial Analyst

The $12.1 million contract with L3Harris represents a significant win for CPI Aero, strengthening its position in the defense aerospace sector. This multi-year agreement (2025-2027) for the Next Generation Jammer Low-Band program provides stable revenue visibility and enhances the company's relationship with major defense contractors. For context, this contract value represents approximately 25% of CPI Aero's current market cap, making it a material addition to their backlog. The program's planned operational capability by 2029 suggests potential for follow-on orders. This aligns with CPI Aero's strategy of securing long-term defense contracts and diversifying their military program portfolio. The modular, open-system architecture approach could lead to future upgrade opportunities and additional revenue streams.

Defense Industry Analyst

This contract positions CPI Aero in a important military modernization program, replacing the aging AN/ALQ-99 Tactical Jamming System. The NGJ-LB program is strategically important as electronic warfare capabilities become increasingly critical in modern military operations. CPI Aero's selection for pod structures manufacturing demonstrates their technical competence in precision aerospace components. The modular design approach is particularly noteworthy as it aligns with the Department of Defense's emphasis on adaptable systems that can be upgraded to counter evolving threats. The contract timing is optimal, as defense spending on electronic warfare systems is projected to grow significantly in response to advancing peer competitor capabilities.

CPI to deliver Pod Structures to support airworthiness and design verification

EDGEWOOD, N.Y., Dec. 11, 2024 (GLOBE NEWSWIRE) -- CPI Aerostructures, Inc. (“CPI Aero®” or the “Company”) (NYSE American: CVU), a leading manufacturer of structural assemblies in both the commercial and military defense aerospace markets, announced today that it was awarded by L3Harris Technologies (NYSE: LHX) a contract not-to-exceed $12.1 million to deliver airborne pod structures. This contract supports L3Harris’ delivery of operational prototype pods to the U.S. Naval Air Systems Command for fleet assessment and additional test assets for airworthiness and design verification. The NGJ-LB pods will fly on the EA-18G Growler and will support the Navy’s plan to replace the aging AN/ALQ-99 Tactical Jamming System. This first NGJ-LB contract to CPI Aero will commence immediately with deliveries starting in 2025 and extending through 2027.

The Next Generation Jammer – Low Band (NGJ-LB) is an advanced airborne electronic warfare system. L3Harris’ solution consolidates advanced processing with increased jamming capability and will be easier to maintain than the Navy’s current system through a modular, open-system architecture that enables seamless upgrades. The L3Harris system will operate with joint and allied forces to provide growth capacity for future technology integration to stay ahead of adversarial capabilities. NGJ-LB is scheduled to reach early operational capability in 2029.

“This new contract is a big win for CPI Aero and a new milestone for our team. We are excited to be the pod structure provider for L3Harris on the 2^nd Increment of the Next Generation Jammer Program. This Program joins several other previously announced new airborne pod programs at CPI Aero, including the Next Generation Jammer - Mid Band Program,” stated Dorith Hakim, President and CEO of CPI Aero.

Added Ms. Hakim “We look forward to working with our new customer, L3Harris on this transformational development program and leveraging our expertise and significant experience manufacturing airborne podded systems.”

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 Aero 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 LHA Investor Relations Jody Burfening (212) 838-3777 cpiaero@lhai.com	CPI Aerostructures, Inc. Philip Passarello Chief Financial Officer (631) 586-5200 ppassarello@cpiaero.com www.cpiaero.com

FAQ

What is the value of CPI Aerostructures' (CVU) new L3Harris contract?

The contract is valued at not-to-exceed $12.1 million for the delivery of airborne pod structures.

When will CVU begin deliveries for the Next Generation Jammer Low-Band program?

Deliveries will start in 2025 and extend through 2027.

What aircraft will the NGJ-LB pods manufactured by CVU be used on?

The NGJ-LB pods will fly on the EA-18G Growler aircraft.

When is the Next Generation Jammer Low-Band program expected to reach operational capability?

The NGJ-LB program is scheduled to reach early operational capability in 2029.

What system will the NGJ-LB program replace for the U.S. Navy?

The NGJ-LB program will replace the aging AN/ALQ-99 Tactical Jamming System.