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First Quarter 2020 vs. Restated First Quarter 2019

  • Revenue of $16.9 million compared to $22.0 million;
  • Gross profit of $0.7 million compared to $2.5 million;
  • Gross margin was 4.1% compared to 11.3%;
  • Net loss of $2.8 million compared to $0.9 million;
  • Loss per diluted share of $0.24 compared to $0.08;
  • Cash flow from operations was $(1.4) million compared to $(2.3) million;
  • Total backlog as of March 31, 2020 of $556.4 million compared to $561.9 million as of December 31, 2019, including multi-year defense contracts of $499.1 million as of March 31, 2020 versus $496.7 million as of December 31, 2019;
  • Total funded backlog of $211.1 million as of March 31, 2020 compared to $147.6 million as of December 31, 2019, of which 98% or $206.4 million is comprised of defense orders.

EDGEWOOD, N.Y., Sept. 30, 2020 (GLOBE NEWSWIRE) — CPI Aerostructures, Inc. (“CPI Aero®”) (NYSE American: CVU) today announced financial results for its first quarter ended March 31, 2020.  

“Our successful execution of a defense-centric business development strategy over the past few years is paying off. We posted another record defense backlog at quarter end by leveraging long-term relationships with the largest aerospace and defense companies in the world. We are pleased that we received several new firm orders during the quarter that increased our funded defense backlog by more than $60 million during the quarter to $206.4 million. This gives us a stable business near term and attractive long-term growth opportunities,” said Douglas McCrosson, president and CEO of CPI Aero.

“The first quarter decline in revenue was largely a matter of timing as we had significant revenue in the first quarter of 2019 for our Next Generation Jammer Mid-Band (NGJ-MB) Pod we produce for Raytheon Technologies. One development phase of the NGJ – MB pod program was virtually completed by the end of 2019 and there was little revenue for this program in the first quarter of this year. CPI Aero has recently begun the next phase of the NGJ-MB pod program and the program is expected to be a strong revenue program during the second half of 2020. Additionally, revenue declined as our commercial programs had lower demand even prior to the COVID-19 pandemic that, subsequent to the end of the first quarter, resulted in deferred and cancelled orders for certain business jet programs,” added Mr. McCrosson.

“An unfavorable product mix also negatively affected margins during the quarter, created largely by the reduction in NGJ-MB pod program revenue mentioned above. We also revised our estimate for our factory overhead rate to account for the lower absorption of fixed costs largely resulting from the anticipated impact of the COVID-19 pandemic on certain business jet programs. Revising overhead rate estimates had a cumulative “catch-up” effect on program profitability that resulted in a gross profit of 4% for the quarter. We expect that margins will have reached their low point in 1Q20 and that full-year 2020 gross margin percentage will be higher than it was in 2019 as our product mix for the remainder of 2020 returns to a more favorable mix between commercial and defense programs.”

“We remain very focused on cash flow and liquidity and we were able to improve cash flow from operations by approximately $900,000 on lower revenue compared to the year ago period, notwithstanding approximately $578,000 in non-recurring accounting and legal expenses in the first quarter related to the restatement and ongoing litigation resulting from the restatement.”

“Looking forward, we continue to believe we are well positioned to increase revenue and return to profitability in fiscal 2020 despite incurring COVID-19 related expenses and significant non-recurring professional expenses expected to be approximately $1.5 million during the year. In addition, cash savings from continued cost management and careful control of inventory levels and other working capital improvement initiatives are expected to largely offset the cash projected to be used to pay non-recurring legal and accounting expenses,” concluded McCrosson.

Conference Call

Management will host a conference call on Thursday, October 1, 2020 at 8:30 a.m. to discuss these results as well as recent corporate developments. After opening remarks there will be a question and answer period. Interested parties may participate in the call by dialing 844-378-6486 or 412-542-4181. Please call 10 minutes before the conference call is scheduled to begin and ask for the CPI Aero call. The conference call will also be broadcast live over the Internet. Additionally, a slide presentation will accompany the conference call. To listen to the live call, please go to, click the Investor Relations section, then the Event Calendar. Please go to the website 15 minutes early to download and install any audio software. If you are unable to listen live, the conference call will be archived and can be accessed for approximately 90 days.

About CPI Aero
CPI Aero is a U.S. manufacturer of structural assemblies for fixed wing aircraft, helicopters and airborne Intelligence Surveillance and Reconnaissance and Electronic Warfare pod systems, primarily for 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. CPI Aero is included in the Russell Microcap® Index.

The above statements include forward looking statements that involve risks and uncertainties, which are described from time to time in CPI Aero’s SEC reports, including CPI Aero’s Form 10-K for the year ended December 31, 2019 and Form 10-Q for the three-month period ended March 31, 2020.

CPI Aero® is a registered trademark of CPI Aerostructures, Inc. For more information, visit, and follow us on Twitter @CPIAERO.

Investor Relations Counsel:
LHA Investor Relations
Jody Burfening
(212) 838-3777
[email protected]


  March 31, December 31,

Current Assets:    
Cash $1,998,697   $4,052,109  
Restricted cash   1,380,684     1,380,684  
Accounts receivable, net of allowance for doubtful accounts of $235,588 as of March 31, 2020 and $230,855 as of December 31, 2019   6,107,968     7,029,602  
    Contract assets   15,814,549     15,280,807  
Inventory   6,940,139     5,891,386  
Refundable income taxes   473,398     474,904  
Prepaid expenses and other current assets   688,006     721,964  
Total current assets   33,403,441     34,831,456  
Operating lease right-of-use assets   3,507,760     3,886,863  
Property and equipment, net   3,061,106     3,282,939  
Intangibles, net   343,750     375,000  
Goodwill   1,784,254     1,784,254  
Other assets   151,041     179,068  
Total assets $42,251,352   $44,339,580  
Current Liabilities:    
Accounts payable $8,255,635   $8,199,557  
Accrued expenses   3,051,727     2,372,522  
    Contract liabilities   4,749,373     3,561,707  
Loss reserve   2,145,556     2,650,963  
Current portion of long-term debt   2,460,639     2,484,619  
Operating lease liabilities   1,745,616     1,709,153  
Income tax payable   1,216     1,216  
Total current liabilities   22,409,762     20,979,737  
Line of credit   26,738,685     26,738,685  
Long-term operating lease liabilities   2,142,574     2,596,784  
Long-term debt, net of current portion   1,165,905     1,764,614  
Total liabilities   52,456,926     52,079,820  
Shareholders’ Deficit:    
Common stock – $.001 par value; authorized 50,000,000 shares, 11,837,218    
and 11,818,830 shares, respectively, issued and outstanding   11,837     11,819  
Additional paid-in capital   71,641,796     71,294,629  
Accumulated Deficit   (81,859,207 )   (79,046,688 )
Total Shareholders’ Deficit   (10,205,574 )   (7,740,240 )
Total Liabilities and Shareholders’ Deficit $42,251,352   $44,339,580  


  For the Three Months Ended
  March 31,
    2020     2019  
Revenue $16,858,386   $21,988,384  
Cost of sales   16,160,567     19,504,968  
Gross profit   697,819     2,483,416  
Selling, general and administrative expenses   3,093,090     2,905,686  
Loss from operations   (2,395,271 )   (422,270 )
Interest expense   416,670     510,769  
Loss before provision for (benefit from) income taxes   (2,811,941 )   (933,039 )
Provision for (benefit from) income taxes   578     1,677  
Net loss   ($2,812,519 )   ($934,716 )
Loss per common share – basic   ($0.24 )   ($0.08 )
Loss per common share – diluted   ($0.24 )   ($0.08 )
Shares used in computing loss per common share:    
  Basic   11,837,014     11,736,305  
  Diluted   11,837,014     11,736,305  

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