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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): April 5, 2024
| CPI AEROSTRUCTURES, INC. |
| (Exact Name of Registrant as Specified in Charter) |
| New York | 001-11398 | |
| (State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
| 91 Heartland Boulevard, Edgewood, New York 11717 |
| (Address of Principal Executive Offices) |
Registrant’s telephone number, including area code: (631) 586-5200
| N/A |
| (Former Name or Former Address, if Changed Since Last Report) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e 4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
|
Title of each class |
Trading symbol(s) |
Name of each exchange on which registered |
| Common stock, $0.001 par value per share | CVU | NYSE American |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02 | Results of Operations and Financial Condition. |
On April 5, 2024, CPI Aerostructures, Inc. issued a press release announcing financial results for the quarter and year ended December 31, 2023. The press release is attached to this Current Report on Form 8-K as Exhibit 99.1.
The information furnished under this Item 2.02, including the exhibit related thereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liability of such section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
| Item 9.01 | Financial Statements and Exhibits. |
| Exhibit | Description |
| 99.1 | Press Release, dated April 5, 2024. |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Dated: April 5, 2024 | CPI AEROSTRUCTURES, INC. | |||
| By: | /s/ Andrew Davis | |||
| Andrew Davis | ||||
| Chief Financial Officer | ||||
Exhibit 99.1
CPI AEROSTRUCTURES REPORTS FOURTH QUARTER
AND FULL YEAR 2023 RESULTS
Fourth Quarter 2023 vs. Fourth Quarter 2022
| ● | Revenue of $23.5 million compared to $24.1 million; |
| ● | Gross profit of $4.1 million compared to $3.9 million; |
| ● | Gross margin of 17.4% compared to 16.1%; |
| ● | Net income of $14.8 million compared to net income of $6.8 million; |
| ● | Earnings per share of $1.20 ($0.09 excluding the fourth quarter 2023 deferred tax asset valuation allowance reduction of $1.11) compared to earnings per share of $0.55 ($0.03 excluding the fourth quarter 2022 deferred tax asset valuation allowance reduction of $0.52); |
| ● | Cash flow from operations of $3.1 million compared to $0.1 million. |
Full Year 2023 vs. Full Year 2022
| ● | Revenue of $86.5 million compared to $83.3 million; |
| ● | Gross profit of $17.1 million compared to $16.3 million; |
| ● | Gross margin of 19.7% compared to 19.6%; |
| ● | Net income of $17.2 million compared to $9.2 million; |
| ● | Earnings per share of $1.40 ($0.28 excluding the fourth quarter 2023 deferred tax asset valuation allowance reduction of $1.12) compared to $0.74 ($0.28 excluding the fourth quarter 2022 deferred tax asset valuation allowance reduction of $0.52 less the first quarter of 2022 severance accrual of $0.06); |
| ● | Cash flow from operations of $3.9 million compared to $0.9 million; |
| ● | Debt as of December 31, 2023 of $20.1 million compared to $22.8 million as of December 31, 2022. |
EDGEWOOD, N.Y. – April 5, 2024 – CPI Aerostructures, Inc. (“CPI Aero” or the “Company”) (NYSE American: CVU) today announced financial results for the three and twelve month periods ended December 31, 2023.
“We reported solid full-year results, delivering 3.8% increased revenue and a 4.7% increase in gross profit in 2023. Our net income, including the deferred tax asset valuation allowance reduction of $14.2 million described below, was up 87.5% with EPS up 88.8% from prior year. We generated $3.9 million in cash flow from operations during 2023, which allowed us to reduce debt by $2.7 million,” said Dorith Hakim, President and CEO.
Added Ms. Hakim, “After reevaluating our net operating loss carryforwards (“NOLs”), and based on our performance outlook, we determined that the valuation allowance we maintain on our deferred tax asset should be reduced by $14.2 million, and we realized a tax benefit in the fourth quarter of 2023 of the same amount upon recording this reduction.”
“We ended the year with a strong backlog of $513.4 million, which includes multiple exciting new programs providing us an opportunity for continued growth in 2024. We remain confident in CPI Aero’s long-term outlook and look forward to the multiple opportunities ahead as we continue to build on our positive relationships with our customers.”
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 words “expect,” “outlook,” “opportunities ahead,” and similar expressions are intended to identify these forward-looking statements. These forward-looking statements include the Company’s expected financial results for the year ending December 31, 2024. 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
| December
31, 2023 |
December
31, 2022 |
|||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash | $ | 5,094,794 | $ | 3,847,225 | ||||
| Accounts receivable, net | 4,352,196 | 4,857,772 | ||||||
| Insurance recovery receivable | — | 3,600,000 | ||||||
| Contract assets, net | 35,312,068 | 27,384,540 | ||||||
| Inventory | 1,436,647 | 2,493,069 | ||||||
| Refundable income taxes | 40,000 | 40,000 | ||||||
| Prepaid expenses and other current assets | 678,026 | 975,830 | ||||||
| Total Current Assets | 46,913,731 | 43,198,436 | ||||||
| Operating lease right-of-use assets | 4,740,193 | 6,526,627 | ||||||
| Property and equipment, net | 794,056 | 1,124,556 | ||||||
| Deferred tax asset | 19,938,124 | 6,574,463 | ||||||
| Goodwill | 1,784,254 | 1,784,254 | ||||||
| Other assets | 189,774 | 238,744 | ||||||
| Total Assets | $ | 74,360,132 | $ | 59,447,080 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | 10,487,012 | $ | 8,029,996 | ||||
| Accrued expenses | 10,275,695 | 7,344,590 | ||||||
| Litigation settlement obligation | — | 3,600,000 | ||||||
| Contract liabilities | 5,937,629 | 6,001,726 | ||||||
| Loss reserve | 337,351 | 576,549 | ||||||
| Current portion of line of credit | 2,400,000 | 1,200,000 | ||||||
| Current portion of long-term debt | 44,498 | 1,719,766 | ||||||
| Operating lease liabilities | 1,999,058 | 1,817,811 | ||||||
| Income taxes payable | 30,107 | 11,396 | ||||||
| Total Current Liabilities | 31,511,350 | 30,301,834 | ||||||
| Line of credit, net of current portion | 17,640,000 | 19,800,000 | ||||||
| Long-term operating lease liabilities | 3,100,571 | 5,077,235 | ||||||
| Long-term debt, net of current portion | 26,483 | 70,981 | ||||||
| Total Liabilities | 52,278,404 | 55,250,050 | ||||||
|
Commitments and Contingencies (see note 16)
|
||||||||
| Shareholders’ Equity: | ||||||||
| Common stock - $.001 par value; authorized 50,000,000 shares, 12,771,434 and 12,506,795 shares, respectively, issued and outstanding | 12,771 | 12,507 | ||||||
| Additional paid-in capital | 73,872,679 | 73,189,449 | ||||||
| Accumulated deficit | (51,803,722 | ) | (69,004,926 | ) | ||||
| Total Shareholders’ Equity | 22,081,728 | 4,197,030 | ||||||
| Total Liabilities and Shareholders’ Equity | $ | 74,360,132 | $ | 59,447,080 | ||||
CPI AEROSTRUCTURES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Years ended December 31, 2023 and 2022
| 2023 | 2022 | |||||||
| Revenue | $ | 86,466,321 | $ | 83,335,764 | ||||
| Cost of sales | 69,400,693 | 67,031,502 | ||||||
| Gross profit | 17,065,628 | 16,304,262 | ||||||
| Selling, general and administrative expenses | 10,758,624 | 11,410,067 | ||||||
| Income from operations | 6,307,004 | 4,894,195 | ||||||
| Interest expense | (2,455,214 | ) | (2,271,101 | ) | ||||
| Income before benefit for income taxes | 3,851,790 | 2,623,094 | ||||||
| Benefit from income taxes | (13,349,414 | ) | (6,553,131 | ) | ||||
| Net income | $ | 17,201,204 | $ | 9,176,225 | ||||
| Income per common share-basic | $ | 1.40 | $ | 0.74 | ||||
| Income per common share-diluted | $ | 1.38 | $ | 0.74 | ||||
| Shares used in computing income per common share: | ||||||||
| Basic | 12,311,219 | 12,389,890 | ||||||
| Diluted | 12,471,961 | 12,389,890 | ||||||