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CPI Aerostructures, Inc.$6.86$.223.31%

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 CPI Aerostructures Announces 2017 Third Quarter Financial Results
   Wednesday, November 08, 2017 6:30:18 AM ET

EDGEWOOD, NY--(Marketwired - Nov 8, 2017) - CPI Aerostructures, Inc. ("CPI Aero®") (NYSE American: CVU) today announced financial results for the three-month and nine-month periods ended September 30, 2017. 

3Q 2017 vs. 3Q 2016

Revenue was $20.7 million compared to $22.1 million; 

Gross profit was $4.9 million compared to $5.0 million;

Gross margin was 23.7% compared to 22.7%

Pre-tax income was $2.5 million compared to $2.7 million;

Net income was $1.7 million compared to $1.7 million;

Earnings per diluted share were $0.19 compared to $0.19 per diluted share;

Cash flow from operations was $0.9 million compared to $0.5 million; and

Total backlog at $397.9 million with multi-year defense contracts comprising 79%.

Nine Months 2017 vs. Nine Months 2016

Revenue was $57.5 million compared to $57.1 million;

Gross profit (loss) was $13.1 million compared to $(1.6) million;

Pre-tax income (loss) was $5.7 million compared to $(9.1) million;

Net income (loss) was $3.7 million compared to $(5.7) million;

Earnings (loss) per diluted share of $0.42 compared to $(0.67) per diluted share; and

Cash flow used in operations was $(0.2) million compared to $(6.8) million.

"We delivered another solid performance in the third quarter despite order push-outs from newer defense programs still in their development phase that delayed revenue recognition. Working capital improvements, in particular, combined with higher margins drove positive operating cash flow of approximately $0.9 million in the quarter that enabled us to further pay down the outstanding balance on our line of credit," stated Douglas McCrosson, CPI Aero president and CEO. "Our defense market strategy continued to yield positive results. New awards from Sikorsky, the U.S. Air Force and Lockheed Martin added to our defense backlog in the quarter, which kept our defense book-to-bill at nearly 1.0. Subsequent to the close of the quarter we received a follow-on order in support of a foreign military aircraft sale valued at approximately $6 million. These awards highlight our growing reputation in the military supply chain as a high quality, lower cost alternative to in-house assembly work grounded in exceptional program execution, value and customer service."

Continued Mr. McCrosson, "Looking ahead, we expect operating cash flow to remain positive on the basis of margin expansion as certain programs transition to full production and cost and process improvements. We remain focused on growing our top-line and expanding our backlog, particularly for our defense products. As the outlook for U.S. defense sector fundamentals improves and spending is allocated to both readiness and modernization, our core competency uniquely positions us to support both legacy and next-generation platforms, and both are reflected in our pipeline of opportunities. Based on our year to date performance and the momentum in backlog we are seeing, we believe we are firmly on a trajectory for sustained top-line growth and profitability."

Financial Outlook

CPI Aero has updated its financial guidance for fiscal 2017 in light of its third quarter results. The company now expects:

Revenue at the low end of its prior range of $82.5 million and $87.0 million;

Pre-tax income to be at the high end of a range of $8.1 million to $8.5 million;

Effective tax rate of approximately 35%. 

Conference Call Management will host a conference call on Wednesday, November 8, 2017, at 8:30 a.m. ET 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 in 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 on the Investor Relations section, then to the Event Calendar. Please go to the website 15 minutes early to download and install any necessary 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 and value-added kits for fixed wing and rotary wing aircraft in both the commercial aerospace and defense markets. CPI Aero also manufactures pod-based, airborne avionics systems for Intelligence Surveillance and Reconnaissance (ISR), Electronic Warfare (EW) and Radar end-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, 2016 and Form 10-Q for the quarters ended March 31, 2017, and June 30, 2017.

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

 - Tables to Follow -
CPI AEROSTRUCTURES, INC.                                                                                                                                    
STATEMENTS OF OPERATIONS                                                                                                                                    
                                                                   For the Three Months Ended              For the Nine Months Ended         
                                                                   September 30,                           September 30,                     
                                                                   2017            2016          2017            2016         
                                                                   (Unaudited)                             (Unaudited)                       
Revenue                                                                 $20,706,460     $22,110,829   $57,471,112     $57,061,826  
Cost of sales                                                           15,794,024      17,086,461    44,337,414      58,642,561   
Gross profit (loss)                                                     4,912,436       5,024,368     13,133,698      (1,580,735  )
Selling, general and administrative expenses                            2,044,304       2,014,147     6,210,380       6,603,321    
Income (loss) from operations                                           2,868,132       3,010,221     6,923,318       (8,184,056  )
Interest expense                                                        402,619         338,156       1,258,857       937,523      
Income (loss) before provision for (benefit from) income taxes          2,465,513       2,672,065     5,664,461       (9,121,579  )
Provision for (benefit from) income taxes                               770,000         986,000       1,954,000       (3,378,000  )
Net income (loss)                                                       1,695,513       1,686,065     3,710,461       (5,743,579  )
Other comprehensive income                                                                                     
                           net of tax -                                                                   
                           Change in unrealized gain (loss)                                          
                           interest rate swap                      (2,300      )        25,936        1,900           (44,547     )
Comprehensive income (loss)                                             $1,693,213      $1,712,001    $3,712,361      $(5,788,126 )
Income (loss) per common share - basic                                  $0.19           $0.19         $0.42           $(0.67      )
Income (loss) per common share - diluted                                $0.19           $0.19         $0.42           $(0.67      )
Shares used in computing income (loss) per common share:                                                       
                           Basic                                   8,846,507       8,678,608     8,820,379       8,628,716    
                           Diluted                                 8,872,810       8,692,420     8,841,397       8,628,716    
                                                                                                                                                         September 30,     December 31,  
                                                                                                                                                         2017              2016          
Current Assets:                                                                                                                                                                     
                 Cash                                                                                                                                    $711,083          $1,039,586    
                 Accounts receivable, net of allowance for doubtful accounts of $150,000 as of September 30, 2017 and $535,514 as of December 31, 2016   4,743,596         8,514,613     
                 Costs and estimated earnings in excess of billings on uncompleted                                                                                             
                 contracts                                                                                                                               108,377,905       99,578,526    
                 Prepaid expenses and other current assets                                                                                               2,470,845         2,155,481     
Total current assets                                                                                                                                          116,303,429       111,288,206   
Property and equipment, net                                                                                                                                   2,016,774         2,298,610     
Deferred income taxes, net                                                                                                                                    2,143,216         3,952,598     
Other assets                                                                                                                                                  204,348           252,481       
Total Assets                                                                                                                                                  $120,667,767      $117,791,895  
LIABILITIES AND SHAREHOLDERS’ EQUITY                                                                                                                                                
Current Liabilities:                                                                                                                                                                
                 Accounts payable                                                                                                                        $13,170,829       $14,027,457   
                 Accrued expenses                                                                                                                        1,347,789         1,386,147     
                 Billings in excess of costs and estimated earnings on uncompleted contracts                                                             413,004           115,337       
                 Current portion of long-term debt                                                                                                       1,863,711         1,341,924     
                 Contract loss                                                                                                                           280,622           1,377,171     
                 Line of credit                                                                                                                          23,438,685        22,438,685    
                 Income tax payable                                                                                                                      6,000             6,000         
Total current liabilities                                                                                                                                     40,520,640        40,692,721    
Long-term debt, net of current portion                                                                                                                        7,433,937         8,860,724     
Other liabilities                                                                                                                                             607,833           632,744       
Total Liabilities                                                                                                                                             48,562,410        50,186,189    
Shareholders’ Equity:                                                                                                                                                               
                 Common stock - $.001 par value; authorized 50,000,000 shares, 8,846,817 and 8,739,836 shares, respectively, issued and outstanding      8,847             8,738         
                 Additional paid-in capital                                                                                                              53,612,131        52,824,950    
                 Retained earnings                                                                                                                       18,491,479        14,781,018    
                 Accumulated other comprehensive loss                                                                                                    (7,100        )        (9,000       )
Total Shareholders’ Equity                                                                                                                                    72,105,357        67,605,706    
Total Liabilities and Shareholders’ Equity                                                                                                                    $120,667,767      $117,791,895  

Contact: Vincent Palazzolo Chief Financial Officer CPI Aero (631) 586-5200 Investor Relations Counsel: LHA Sanjay M. Hurry/Jody Burfening (212) 838-3777

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