CPI Aerostructures announces its third quarter and nine months

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Third quarter 2021 versus third quarter 2020 (restated)

  • Revenues of $23.9 million compared to $25.6 million;
  • Gross profit of $3.7 million compared to $4.2 million;
  • Gross margin of 15.3% versus 16.4%;
  • Net income of $5.4 million ($0.6 million excluding $4.8 million PPP loan forgiveness) vs. $0.8 million;
  • Diluted earnings per share of $0.44 ($0.05 excluding $0.39 PPP loan cancellation) vs. $0.07;
  • Operating cash flow of $1.2 million compared to a usage of ($2.4) million.

Nine months 2021 vs nine months 2020 (restated)

  • Revenues of $77.0 million compared to $62.2 million;
  • Gross profit of $12.2 million compared to $6.2 million;
  • Gross margin of 15.8% versus 9.9%;
  • Net profit of $7.3 million ($2.5 million excluding $4.8 million PPP loan forgiveness) vs. net loss of ($3.9 million);
  • Diluted earnings per share of $0.60 ($0.21 excluding $0.39 PPP loan forgiveness) versus diluted loss per share of ($0.33);
  • Cash flow used in operations of (1.3) million dollars compared to a use of (3.3) million dollars;
  • Debt as of September 30, 2021 of $27.1 million compared to $33.4 million as of December 31, 2020 which included the $4.8 million PPP loan canceled by the lender and the Small Business Administration on July 1, 2021.

EDGEWOOD, NY, May 13, 2022 (GLOBE NEWSWIRE) — CPI Aerostructures, Inc. (“CPI Aero®” or the “Company”) (NYSE American: CVU) today announced its financial results for the three and nine months ended September 30, 2021.

“Our reported results for the first nine months of 2021 allow us to meet our stated expectations for increased revenue, significant improvement in profitability and positive operating cash flow for 2021,” said Dorith Hakim, President and CEO. “Continued execution of our order backlog resulted in a 23.9% increase in revenue and a 5.9 basis point increase in gross margin to 15.8%, resulting in an increase in $11.2 million in net profitability, including the cancellation of our $4.8 million PPP loan, compared to the first nine months of 2020.

“For the third quarter of 2021, we generated operating cash flow of $1.2 million, an expected reversal of the use of funds of (2.4) million dollars for the second quarter of 2021, because product deliveries continue to reduce contract assets and inventory.As a result, we continue to expect positive operating cash flow for the second half of 2021 and for full year 2021. We also continued to repay our debt and, as of September 30, 2021, we had an outstanding balance on our term loan of $5.6 million.

Ms. Hakim added, “The funded backlog as of September 30, 2021 of approximately $138 million was 98% attributable to government contracts and comprised primarily of long-term programs and long-term agreements. This funded backlog is, as expected, 27% lower than the funded backlog as of September 30, 2020, reflecting the receipt of over $60 million in new firm orders during the first quarter of 2020. Since September 30, 2020 2021, however, has won, but has not yet been able to announce, several new contracts for military applications in key strategic sectors including electronic warfare, hypersonic and unmanned systems. We remain on track to report a total backlog of over $500 million by the end of 2021.

“We continue to expect to report 2021 revenue in excess of $100 million versus $87.6 million for 2020, and net income between $7.5 and $8.0 million, including the $4.8 million dollars of other income related to the forgiveness of our Paycheck Protection Program loan, relative to net income. loss of (3.7) million dollars for 2020.”

Ms. Hakim concluded, “We remain confident in CPI Aero’s long-term prospects and look forward to future opportunities as we build on our reputation for high quality and reliable performance.

About CPI Aero

CPI Aero is an American manufacturer of structural assemblies for fixed-wing aircraft, helicopters, and airborne intelligence surveillance and reconnaissance and electronic warfare systems, primarily for national security markets. Within the global aerostructures 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 is also a master of the United States Department of Defense, mainly the Air Force. Alongside its assembly activities, 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 “stay on track”, “expect”, “anticipate”, “outlook”, “future opportunities” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements include, among other things, statements regarding the Company’s expected financial results for the year ended December 31, 2021.

Forward-looking statements involve risks and uncertainties, and actual results could differ materially from these forward-looking statements. Factors that could cause future results to differ materially from the Company’s current expectations include, among others, the Company’s completion of its financial statements for the periods ending December 31, 2021, any delay in filing periodic reports, the unfavorable effects on the results of the Company related to the information communicated in this press release or to the reactions of customers or suppliers, to any unfavorable evolution of the legal proceedings in progress or to the opening of new legal proceedings, and to the volatility of the Company’s share price.

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. 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 the important factors set forth under the heading “Risk Factors” in the Company’s Annual Report on Form 10.-K/A for the period ended December 31, 2020 and in the Company’s subsequent filings with the Securities and Exchange Commission. Although the Company may choose to do so at some time in the future, the Company assumes no obligation to update any forward-looking statements and disclaims any intention or obligation to update or revise any forward-looking statements, whether 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.

CONSOLIDATED BALANCE SHEETS
September 30,
2021
(Unaudited)
The 31st of December,
2020
(as retired)

ASSETS
Current assets:

Species $ 3,110,581 $ 6,033,537
Accounts receivable, net 8,544,494 4,962,906
Insurance recovery receivable 2,850,000
Contract assets 22,760,591 19,729,638
Inventory 4,979,928 6,386,288
Refundable income taxes 40,000 40,000
Prepaid expenses and other current assets 659 216 534 857
Total current assets 42,944,810 37,687,226
Operating lease right-of-use assets 2,790,731 4,075,048
Property and equipment, net 1 837 909 2,521,742
Intangible assets, net 156 250 250,000
Good will 1,784,254 1,784,254
other assets 150,444 191 179
Total assets $ 49,664,398 $ 46,509,449
LIABILITIES AND DEFICIT OF SHAREHOLDERS
Current liabilities:
Accounts payable $ 13,002,848 $ 12,092,684
Increased expenses 4,539,670 5,937,921
Obligation to settle disputes 3,206,133
Contract liabilities 2,542,464 1,650,549
Loss reserve 1,292,025 2,009,247
Portion of long-term debt 3,367,825 6,501,666
Operating lease debts 1,862,933 1,819,237
Income tax payable 1,417 948
Total current liabilities 29,815,315 30,012,252
Credit line 21,000,000 20,738,685
Long-term operating lease debts 1,136,131 2,537,149
Long-term debt, net of current portion 2,692,303 6,205,095
Total responsibilities 54,643,749 59 493 181
Shareholders’ deficit:
Common Stock – par value $0.001; authorized 50,000,000 shares, 12,301,811 and 11,951,271 shares,
respectively issued and in circulation 12,302 11,951
Premium 72,728,922 72,005,841
Accumulated deficit (77,720,575 ) (85,001,524 )
Total shareholder deficit (4,979,351 ) (12,983,732 )
Total liabilities and shareholder deficit $ 49,664,398 $ 46,509,449

CONSOLIDATED INCOME STATEMENTS(UNAUDITED)
For the three months ended
September 30,
For the nine months ended
September 30,
2021 2020
(as retired)
2021 2020
(as retired)
Revenue $ 23,898,748 $ 25,576,718 $ 77,018,684 62,175,872
Cost of sales 20,246,764 21,369,687 64,850,010 55,999,518
Gross profit 3,651,984 4,207,031 12,168,674 6,176,354
Selling, general and administrative expenses 2,765,849 3,050,644 8,834,343 8,958,986
Operating income (loss) 886 135 1,156,387 3,334,331 (2,782,632 )
Other income 4,795,000 4,795,000
Interest expense (252,506 ) (309,008 ) (840,680 ) (1,085,805 )
Profit (loss) before provision for income taxes 5,428,629 847 379 7,288,651 (3,868,437 )
Provision for income taxes 3,374 7,614 7,702 9,714
Net profit (loss) $ 5,425,255 $ 839 765 $ 7,280,949 $ (3,878,151 )
Earnings (loss) per common share – basic $ 0.44 $ 0.07 $ 0.60 $ (0.33 )
Earnings (loss) per common share – diluted $ 0.44 $ 0.07 $ 0.60 $ (0.33 )
Shares used in calculating income (loss) per common share:
Basic 12,286,712 11,894,469 12,153,838 11,862,506
Diluted 12,320,588 11,917,149 12,187,714 11,862,506

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