CPI AEROSTRUCTURES INC
For the period ended Jun 30, 2024. Filed Aug 13, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 13, 2024
CVU$4.62+3.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-15.
0001999371-24-006169
Item 2. – Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-13.
0001999371-24-010057
Item 2. – Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 69 previous paragraphs and 87 current paragraphs.
44 unchanged; 21 reworded; 19 added; 4 removed; 0 previous and 3 current paragraphs rearranged.
Tables are not compared: 5 previous and 5 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (19)
Current report
Total Revenue for the three months ended June 30, 2024 was $20,810,334 compared to $20,547,555 for the same period last year, an increase of $262,779 or 1.3%, driven primarily by increases in our Raytheon NGJ – Mid Band Pods, Raytheon Airborne Reconnaissance Pods and Sikorsky Welded Tubes programs, partly offset by decreases in our Northrop Grumman E-2D Advanced Hawkeye Outer Wing Panels (“OWP”) and our Sikorsky UH-60 BLACKHAWK Hover Infrared Suppression System (“HIRSS”) Module Assemblies programs.
Current report
Revenue from military subcontracts was $31,965,642 for the six months ended June 30, 2024 compared to $35,174,919 for the six months ended June 30, 2023, a decrease of $3,209,277 or 9.12%, driven primarily by decreases in our Sikorsky UH-60 BLACKHAWK Hover Infrared Suppression System (“HIRSS”) Module Assemblies, Northrop Grumman E-2D Advanced Hawkeye Outer Wing Panels (“OWP”) and Sikorsky UH-60 BLACKHAWK Stabilator MRO programs, partly offset by increases in our Raytheon Airborne Reconnaissance Pods, Sikorsky Welded Tubes and USAF T-38 Pacer Classic Structural Modification Kits programs.
Current report
Revenue from government military contracts was $5,383,228 for the six months ended June 30, 2024 compared to $4,118,959 for the six months ended June 30, 2023, an increase of $1,264,269 or 30.7%, driven primarily by an increase in our USAF T-38 Pacer Classic Structural Modification Kits program, partly offset by a decrease in our DLA F-16 Wing Skins program.
Current report
Revenue from commercial subcontracts was $2,542,607 for the six months ended June 30, 2024 compared to $3,270,345 for the six months ended June 30, 2023, a decrease of $727,738 or 22.3%, primarily on a decrease in our Embraer Phenom Engine Inlet Assemblies program.
Current report
Total Cost of Sales for the six months ended June 30, 2024 and 2023 was $31,222,304 and $33,297,707, respectively, a decrease of $2,075,403 or 6.2%.
Current report
Procurement for the three months ended June 30, 2024 was $10,118,041 compared to $9,470,763 for the three months ended June 30, 2023, an increase of $647,278 or 6.8%, driven primarily by higher procurement for our Raytheon NGJ – Mid Band Pods program.
Current report
Procurement for the six months ended June 30, 2024 was $19,483,061 compared to $20,958,854 for the six months ended June 30, 2023, a decrease of $1,475,793 or 7.0%, driven primarily by lower procurement for our Sikorsky UH-60 BLACKHAWK Hover Infrared Suppression System (“HIRSS”) Module Assemblies program.
Current report
Labor costs for the six months ended June 30, 2024 were $3,598,730 compared to $3,722,146 for the six months ended June 30, 2023, a decrease of $123,416 or 3.3%.
Current report
Factory overhead for the three months ended June 30, 2024 was $3,770,396 compared to $4,266,566 for the three months ended June 30, 2023, a decrease of $496,170 or 11.6%. The decrease was primarily the result of lower employee insurance costs.
Current report
Factory overhead for the six months ended June 30, 2024 was $8,037,491 compared to $8,046,445 for the six months ended June 30, 2023, a decrease of $8,594 or 0.1%.
Current report
Other cost of sales for the six months ended June 30, 2024 was $103,022 compared to $570,262 for the six months ended June 30, 2023, a decrease in cost of $467,240 or 81.9%. The decrease is primarily the result of a lower level ofdirect charges to cost of sales during the six months ended June 30, 2024 as compared to the six months ended June 30, 2023.
Current report
Gross profit and gross profit percentage (“gross margin”) for the six months ended June 30, 2024 was $8,669,173 and 21.7%, respectively, compared to $9,266,516 and 21.8%, respectively, for the six months ended June 30, 2023, a decrease of $597,343, or 6.4%, and 10 basis points, respectively, for the reasons noted above.
Current report
Selling, general and administrative expenses for the six months ended June 30, 2024 were $5,489,839 compared to $5,675,538 for the six months ended June 30, 2023, a decrease of $185,699 or 3.3%. The decrease was primarily the result of lower personnel related expenses.
Current report
Income before provision for income taxes for the three months ended June 30, 2024 was $1,751,518 compared to $1,255,865 for the three months ended June 30, 2023, an increase of $495,653 or 39.5% for the reasons noted above.
Current report
Income before provision for income taxes for the six months ended June 30, 2024 was $1,959,228 compared to $2,438,427 for the six months ended June 30, 2023, a decrease of $479,199 or 19.7% for the reasons noted above.
Current report
Provision for income taxes for the six months ended June 30, 2024 was $381,044 compared to $298,046 for the six months ended June 30, 2023, an increase of $82,998, or 27.8%. The increase in the provision for income tax is primarily the result of the partial release of approximately $121,000 of the Company’s valuation allowance on its deferred tax asset recorded during the three months ending June 30, 2023.
Current report
Basic and diluted income per share for the three months ended June 30, 2024 of $0.11 compared to $0.09 for the three months ended June 30, 2023, an increase of $0.02, or 22.2%.
Current report
Net income for the six months ended June 30, 2024 was $1,578,184 compared to $2,140,381 for the six months ended June 30, 2023, a decrease of $562,197 or 26.3% for the reasons noted above.
Current report
Basic income per share for the six months ended June 30, 2024 of $0.13 compared to $0.17 for the six months ended June 30, 2023, a decrease of $0.04, or 23.5%. Diluted income per share for the six months ended June 30, 2024 of $0.12 compared to $0.17 for the six months ended June 30, 2023, a decrease of $0.05, or 29.4%.
Removed paragraphs (4)
Previous report
Procurement for the three months ended March 31, 2024 was $9,365,019 compared to $11,488,091 for the three months ended March 31, 2023, a decrease of $2,123,072 or 18.5%, driven primarily by decreases in our Raytheon NGJ – Mid Band Pods, Sikorsky UH-60 BLACKHAWK HIRSS Module Assemblies and Lockheed Martin F-16 RI/DCC’s programs, partly offset by increases in our Collins Aerospace Pods programs.
Previous report
Factory overhead for the three months ended March 31, 2024 was $4,267,095 compared to $3,779,878 for the three months ended March 31, 2023, an increase of $487,217 or 12.9%. This increase was primarily the result of higher salary and benefit costs.
Previous report
Income before provision for income taxes for the three months ended March 31, 2024 was $207,710 compared to $1,182,562 for the three months ended March 31, 2023, a decrease of $974,852 or 82.4% for the reasons noted above.
Previous report
Basic and diluted income per share for the three months ended March 31, 2024 of $0.01 compared to $0.08 for the three months ended March 31, 2023, a decrease of $0.07, or 87.5%.
Reworded paragraphs (21)
Previous wording
Our total backlog as of March 31, 2024 and December 31, 2023 was as follows:
Current wording
Our total backlog as of June 30, 2024 and December 31, 2023 is shown below. We are currently in customer negotiations which, when concluded, will result in an estimated amount of approximately $32 million of the June 30, 2024 Unfunded Backlog converting to Funded Backlog.
Previous wording
The total backlog at March 31, 2024 is primarily comprised of long-term programs with Raytheon (Next Generation Jammer (“NGJ”) – Mid Band Pods and Advanced Tactical Pods), Collins Aerospace (Airborne Reconnaissance Pods), USAF (T-38 Classic Structural Modification Kits), Lockheed Martin (F-16 RI/DCC’s), Raytheon (B-52 Radar Racks), Embraer (Phenom 300 Engine Inlets), Sikorsky (CH-53K Welded Tubes), Sikorsky (UH-60 BLACKHAWK Gunner Windows), Boeing (A-10 Main Landing Gear Pods) and Sikorsky (UH-60 BLACKHAWK Stabilator MRO).
Current wording
The total backlog at June 30, 2024 is primarily comprised of long-term programs with Raytheon (Next Generation Jammer (“NGJ”) – Mid Band Pods and Advanced Tactical Pods), Lockheed Martin (F-16 RI/DCC’s), Raytheon (B-52 Radar Racks), USAF (T-38 Classic Structural Modification Kits), Raytheon (Airborne Reconnaissance Pods) and Embraer (Phenom 300 Engine Inlets).
Previous wording
The funded backlog at March 31, 2024 is primarily from purchase orders under long-term contracts with Raytheon (NGJ – Mid Band Pods), USAF (T-38 Classic Structural Modification Kits), Collins Aerospace (Airborne Reconnaissance Pods), Boeing (A-10 Main Landing Gear Pods), Sikorsky (CH-53K Welded Tubes), Sikorsky (UH-60 BLACKHAWK Gunner Windows), Lockheed Martin (F-16 RI/DCC’s), Embraer (Phenom 300 Engine Inlets) and Raytheon (Advanced Tactical Pods).
Current wording
The funded backlog at June 30, 2024 is primarily from purchase orders under long-term contracts with Raytheon (NGJ – Mid Band Pods and Advanced Tactical Pods), USAF (T-38 Classic Structural Modification Kits), Sikorsky (CH-53K Welded Tubes), Sikorsky (UH-60 BLACKHAWK Gunner Windows), Raytheon (Airborne Reconnaissance Pods), Boeing (A-10 Main Landing Gear Pods), Lockheed Martin (F-16 RI/DCC’s), and Embraer (Phenom 300 Engine Inlets).
Previous wording
Total Revenue for the three months ended March 31, 2024 was $19,081,143 compared to $22,016,668 for the same period last year, a decrease of $2,935,525 or 13.3%, driven primarily by decreases in our Raytheon NGJ – Mid Band Pods, Sikorsky UH-60 BLACKHAWK Hover Infrared Suppression System (“HIRSS”) Module Assemblies and Lockheed Martin F-16 Rudder Island/Drag Chute Canisters (RI/DCC’s) programs, partly offset by increases in our USAF T-38 Pacer Classic Structural Modification Kits and Collins Aerospace Pods programs.
Current wording
Total Revenue for the six months ended June 30, 2024 was $39,891,477 compared to $42,564,223 for the same period last year, a decrease of $2,672,746 or 6.3%, driven primarily by decreases in our Sikorsky UH-60 BLACKHAWK Hover Infrared Suppression System (“HIRSS”) Module Assemblies, Northrop Grumman E-2D Advanced Hawkeye Outer Wing Panels (“OWP”) and Sikorsky UH-60 BLACKHAWK Stabilator MRO programs, partly offset by increases in our Raytheon Airborne Reconnaissance Pods, Sikorsky Welded Tubes and USAF T-38 Pacer Classic Structural Modification Kits programs.
Previous wording
Revenue from military subcontracts was $15,001,768 for the three months ended March 31, 2024 compared to $18,672,893 for the three months ended March 31, 2023, a decrease of $3,671,125 or 19.7%, driven primarily by decreases in our Raytheon NGJ – Mid Band Pods, Sikorsky UH-60 BLACKHAWK HIRSS Module Assemblies and Lockheed Martin F-16 RI/DCC’s programs, partly offset by increases in our Collins Aerospace Pods programs.
Current wording
Revenue from military subcontracts was $16,963,874 for the three months ended June 30, 2024 compared to $16,502,026 for the three months ended June 30, 2023, an increase of $461,848 or 2.8%, driven primarily by increases in our Raytheon NGJ – Mid Band Pods, Raytheon Airborne Reconnaissance Pods and Sikorsky Welded Tubes programs, partly offset by decreases in our Northrop Grumman E-2D Advanced Hawkeye Outer Wing Panels (“OWP”) and our Sikorsky UH-60 BLACKHAWK Hover Infrared Suppression System (“HIRSS”) Module Assemblies programs.
Previous wording
Revenue from government military contracts was $2,781,881for the three months ended March 31, 2024 compared to $1,408,034 for the three months ended March 31, 2023, an increase of $1,373,847 or 97.6%, primarily on an increase in our USAF T-38 Pacer Classic Structural Modification Kits program.
Current wording
Revenue from government military contracts was $2,601,347 for the three months ended June 30, 2024 compared to $2,710,925 for the three months ended June 30, 2023, a decrease of $109,578 or 4.0%, driven primarily by a decrease in our DLA F-16 Wing Skins program, partly offset by an increase in our USAF T-38 Pacer Classic Structural Modification Kits program.
Previous wording
Revenue from commercial subcontracts was $1,297,494 for the three months ended March 31, 2024 compared to $1,935,741 for the three months ended March 31, 2023, a decrease of $638,247 or 33.0%, primarily on a decrease in our Embraer Phenom Engine Inlet Assemblies program.
Current wording
Revenue from commercial subcontracts was $1,245,113 for the three months ended June 30, 2024 compared to $1,334,604 for the three months ended June 30, 2023, a decrease of $89,491 or 6.7%, primarily on a decrease in our Embraer Phenom Engine Inlet Assemblies program.
Previous wording
Total Cost of Sales for the three months ended March 31, 2024 and 2023 was $15,527,394 and $17,354,152, respectively, a decrease of $1,826,758 or 10.5%.
Current wording
Total Cost of Sales for the three months ended June 30, 2024 and 2023 was $15,694,910 and $15,943,555, respectively, a decrease of $248,645 or 1.6%.
Previous wording
Labor costs for the three months ended March 31, 2024 were $1,797,790 compared to $1,854,863 for the three months ended March 31, 2023, a decrease of $57,073 or 3.1%.
Current wording
Labor costs for the three months ended June 30, 2024 were $1,800,940 compared to $1,867,283 for the three months ended June 30, 2023, a decrease of $66,343 or 3.6%.
Previous wording
Other cost of sales relates to items that can increase or decrease cost of sales such as changes in inventory reserves, changes in loss contract provisions, absorption variances and direct charges to cost of sales. Other cost of sales for the three months ended March 31, 2024 was $97,490 compared to a $231,320 for the three months ended March 31, 2023, a decrease of $133,830 or 57.9%. The decrease is primarily the result of a higher level of loss contract reserve reduction for the for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023.
Current wording
Other cost of sales relates to items that can increase or decrease cost of sales such as changes in inventory reserves, changes in loss contract provisions, absorption variances and direct charges to cost of sales. Other cost of sales for the three months ended June 30, 2024 was $5,533 compared to a $338,943 for the three months ended June 30, 2023, a decrease of $333,410 or 98.4%. The decrease is primarily the result of a lower level of direct charges to cost of sales during the three months ended June 30, 2024 as compared to the three months ended June 30, 2023.
Previous wording
Gross profit and gross profit percentage (“gross margin”) for the three months ended March 31, 2024 was $3,553,749 and 18.6%, respectively, compared to $4,662,516 and 21.2%, respectively, for the three months ended March 31, 2023, a decrease of $1,108,767, or 23.8%, and 260 basis points, respectively, for the reasons noted above and an unfavorable year-over-year mix.
Current wording
Gross profit and gross profit percentage (“gross margin”) for the three months ended June 30, 2024 was $5,115,424 and 24.6%, respectively, compared to $4,604,000 and 22.4%, respectively, for the three months ended June 30, 2023, an increase of $511,424, or 11.1%, and 220 basis points, respectively, for the reasons noted above and a favorable year-over-year mix.
Previous wording
During the three months ended March 31, 2024 and 2023, circumstances required that we make changes in estimates to various contracts. Such changes in estimates resulted in changes in total gross profit as follows:
Current wording
During the six months ended June 30, 2024 and 2023, circumstances required that we make changes in estimates to various contracts. Such changes in estimates resulted in changes in total gross profit as follows:
Previous wording
Selling, general and administrative expenses for the three months ended March 31, 2024 were $2,713,904 compared to $2,869,058 for the three months ended March 31, 2023, a decrease of $155,154 or 5.4%. The decrease was primarily the result of lower personnel related expenses.
Current wording
Selling, general and administrative expenses for the three months ended June 30, 2024 were $2,775,935 compared to $2,806,480 for the three months ended June 30, 2023, a decrease of $30,545 or 1.1%. The decrease was primarily the result of lower personnel related expenses.
Previous wording
Interest expense for the three months ended March 31, 2024 was $632,135, compared to $610,896 for the three months ended March 31, 2023, an increase of $21,239 or 3.5%. The increase was the result of higher year-over-year interest rates charged on our outstanding debt under the Credit Agreement, partially offset by a year-over-year decrease in the amount of our outstanding debt under the Credit Agreement.
Current wording
Interest expense for the three months ended June 30, 2024 was $587,971, compared to $541,655 for the three months ended June 30, 2023, an increase of $46,316 or 8.6%. The increase was the result of higher year-over-year interest rates charged on our outstanding debt under the Credit Agreement, partially offset by a year-over-year decrease in the amount of our outstanding debt under the Credit Agreement.
Previous wording
Provision for income taxes for the three months ended March 31, 2024 was $39,472 compared to $199,257 for the three months ended March 31, 2023, a decrease of $159,785. The decrease in the provision for income tax is primarily the result of the Company’s lower year over year pre-tax book income.
Current wording
Provision for income taxes for the three months ended June 30, 2024 was $341,572 compared to $98,789 for the three months ended June 30, 2023, an increase of $242,783, or 245.8%. The increase in the provision for income tax is primarily the result of the partial release of approximately $121,000 of the Company’s valuation allowance on its deferred tax asset recorded during the three months ending June 30, 2023.
Previous wording
The effective income tax rate for the three months ended March 31, 2024 is 19%. The difference between the effective income tax rate for the three months ended March 31, 2024 and the statutory income tax rate of 21% for the three months ended March 31, 2024 is primarily due estimated R&D credit, state income taxes and permanent tax differences.
Current wording
The effective income tax rate for the three months ended June 30, 2024 is 19.5%. The difference between the effective income tax rate for the three months ended June 30, 2024 and the statutory income tax rate of 21% for the three months ended June 30, 2024 is primarily due estimated R&D credit, state income taxes and permanent tax differences.
Previous wording
Net income for the three months ended March 31, 2024 was $168,238 compared to $983,305 for the three months ended March 31, 2023, a decrease of $815,067 or 82.9% for the reasons noted above.
Current wording
Net income for the three months ended June 30, 2024 was $1,409,946 compared to $1,157,076 for the three months ended June 30, 2023, an increase of $252,870 or 21.9% for the reasons noted above.
Previous wording
Basic and diluted income per share for the three months ended March 31, 2024 was calculated using 12,486,889 and 12,680,584 weighted average basic and diluted shares outstanding, respectively, as compared to 12,520,189 and 12,608,189 weighted average basic and diluted shares outstanding, respectively, for the three months ended March 31, 2023.
Current wording
Basic and diluted income per share for the three months ended June 30, 2024 was calculated using 12,440,426 and 12,554,153 weighted average basic and diluted shares outstanding, respectively, as compared to 12,558,793 and 12,625,241 weighted average basic and diluted shares outstanding, respectively, for the three months ended June 30, 2023.
Previous wording
At March 31, 2024, we had working capital of $15,166,678 compared to $15,402,381 at December 31, 2023, a decrease of $235,703 or 1.5%. The decrease was driven primarily by higher accounts payable, partly offset by higher accounts receivable and lower current portion of long-term debt and loss reserves.
Current wording
At June 30, 2024, we had working capital of $16,239,499 compared to $15,402,381 at December 31, 2023, an increase of $837,118 or 5.4%. The increase was driven primarily by lower contract liabilities and higher accounts receivable, partly offset by lower cash and contract assets.
Previous wording
At March 31, 2024, we had cash of $3,018,068 compared to $5,094,794 at December 31, 2023, a decrease of $2,076,726 or 40.8%. This decrease was primarily the result of repayment of debt and cash flow used in operations.
Current wording
At June 30, 2024, we had cash of $1,936,697 compared to $5,094,794 at December 31, 2023, a decrease of $3,158,097 or 62%. This decrease was primarily the result of cash flow used in operating activities and repayment of debt.
Previous wording
As of March 31, 2024 and December 31, 2023, the Company had $19,080,000 and $20,040,000 outstanding under the Revolving Loan, respectively.
Current wording
As of June 30, 2024 and December 31, 2023, the Company had $18,840,000 and $20,040,000 outstanding under the Revolving Loan, respectively.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
Interest expense for the six months ended June 30, 2024 was $1,220,106, compared to $1,152,551 for the six months ended June 30, 2023, an increase of $67,555 or 5.9%. The increase was the result of higher year-over-year interest rates charged on our outstanding debt under the Credit Agreement, partially offset by a year-over-year decrease in the amount of our outstanding debt under the Credit Agreement.
Current report — wording carried from elsewhere
The effective income tax rate for the six months ended June 30, 2024 is 19.4%. The difference between the effective income tax rate for the six months ended June 30, 2024 and the statutory income tax rate of 21% for the six months ended June 30, 2024 is primarily due estimated R&D credit, state income taxes and permanent tax differences.
Current report — wording carried from elsewhere
Basic and diluted income per share for the six months ended June 30, 2024 was calculated using 12,515,824 and 12,656,753 weighted average basic and diluted shares outstanding, respectively, as compared to 12,539,652 and 12,606,100 weighted average basic and diluted shares outstanding, respectively, for the six months ended June 30, 2023.