CPI AEROSTRUCTURES INC
For the period ended Sep 30, 2024. Filed Nov 13, 2024.
View on SEC.govAbout this filing
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.
Sep 30, 2024 · Filed Nov 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 2024-06-30; filed 2024-08-13.
0001999371-24-010057
Item 2. – Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-13.
0001999371-24-014654
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 87 previous paragraphs and 88 current paragraphs.
41 unchanged; 35 reworded; 12 added; 10 removed; 1 previous and 0 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 (12)
Current report
Revenue from military subcontracts was $16,986,106 for the three months ended September 30, 2024 compared to $15,375,337 for the three months ended September 30, 2023, an increase of $1,610,769 or 10.5%, driven primarily by increases in our Raytheon NGJ – Mid Band Pods program partly offset by decreases in our Lockheed Martin F-16 Rudder Island program.
Current report
Procurement for the three months ended September 30, 2024 was $9,219,097 compared to $10,815,261 for the three months ended September 30, 2023, a decrease of $1,596,164 or 14.8%, driven primarily by lower procurement for our USAF T-38 Pacer Classic Structural Modification Kits program due to push out of customer inductions of aircraft and Northrop Grumman E-2D Advanced Hawkeye OWP program.
Current report
Procurement for the nine months ended September 30, 2024 was $28,702,158 compared to $31,774,115 for the nine months ended September 30, 2023, a decrease of $3,071,957 or 9.7%, driven primarily by lower procurement in our Sikorsky UH-60 BLACKHAWK HIRSS Module Assemblies program and USAF T-38 Pacer Classic Structural Modification Kits program partially offset by higher procurement in our Raytheon NGJ – Mid Band Pods program.
Current report
Labor costs for the three months ended September 30, 2024 were $1,861,505 compared to $1,580,290 for the three months ended September 30, 2023, an increase of $281,215 or 17.8% primarily driven by increases in work performed in the Boeing A-10 program, Sikorsky “CH-53K” Tube Assembly, and the Raytheon NGJ – Mid Band Pods program.
Current report
Labor costs for the nine months ended September 30, 2024 were $5,460,235 compared to $5,302,436 for the nine months ended September 30, 2023, an increase of $157,799 or 3.0% primarily driven by an increase in work performed on the Lockheed Martin F-16 Rudder Island.
Current report
Selling, general and administrative expenses for the nine months ended September 30, 2024 were $8,231,875 compared to $8,210,603 for the nine months ended September 30, 2023, an increase of $21,272 or 0.3%.
Current report
Interest expense for the nine months ended September 30, 2024 was $1,793,472, compared to $1,816,408 for the nine months ended September 30, 2023, a decrease of $22,936 or 1.3%.
Current report
Income before provision for income taxes for the three months ended September 30, 2024 was $904,267 compared to $507,168 for the three months ended September 30, 2023, an increase of $397,099 or 78.3% for the reasons noted above.
Current report
Income before provision for income taxes for the nine months ended September 30, 2024 was $2,863,495 compared to $2,945,595 for the nine months ended September 30, 2023, a decrease of $82,100 or 2.8% for the reasons noted above.
Current report
Basic and diluted income per share for the three months ended September 30, 2024 of $0.06 compared to $0.02 for the three months ended September 30, 2023, an increase of $0.04, or 200%.
Current report
Basic income per share for the nine months ended September 30, 2024 of $0.19 was consistent with $0.19 for the nine months ended September 30, 2023. Diluted income per share for the nine months ended September 30, 2024 of $0.18 compared to $0.19 for the nine months ended September 30, 2023, a decrease of $0.01, or 5.3%.
Current report
On November 13, 2024, the Company entered into a Fourteenth Amendment to the Credit Agreement (the “Fourteenth Amendment”). Under the Fourteenth Amendment, the parties amended the Credit Agreement by: (i) extending the maturity date of the Company’s existing revolving line of credit (the “Revolving Credit Loans”) to August 31, 2026; (ii) reducing the Base Rate Margin (as defined in the Credit Agreement) from 3.50% to 2.0%; (iii) resetting the aggregate maximum principal amount of all Revolving Credit Loans to $16,890,000 from January 1, 2025 through March 31, 2025, $16,140,000 from April 1, 2025 through June 30, 2025, $15,390,000 from July 1, 2025 through September 30, 2025, $14,640,000 from October 1, 2025 through December 31, 2025, $13,890,000 from January 1, 2026 through March 31, 2026, $13,140,000 from April 1, 2026 through June 30, 2026, and $12,390,000 from July 1, 2026 onward and for payments to be made by the Company to comply therewith (if any such payments are necessary), on the first day of each such period; and (iv) requiring the Company, if it does not deliver to BankUnited, N.A. by December 31, 2025, a commitment letter with banks and terms and conditions reasonably acceptable to the Lenders for refinancing the obligations under the Credit Agreement, to make a payment by January 31, 2026, equal to 2% of the aggregate outstanding principal amount of the Revolving Credit Loans as of December 31, 2025, with 50% of such payment applied to reduce the aggregate outstanding principal and the remaining 50% retained by the Lenders as an amendment fee with respect to the Fourteenth Amendment.
Removed paragraphs (10)
Previous 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.
Previous 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.
Previous 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.
Previous report
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 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%.
Previous 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.
Previous 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.
Previous 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.
Previous 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%.
Previous 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%.
Reworded paragraphs (35)
Previous 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.
Current wording
Our total backlog as of September 30, 2024 and December 31, 2023 is shown below.
Previous 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).
Current wording
The total backlog at September 30, 2024 is primarily comprised of long-term programs with Raytheon (Next Generation Jammer-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), Sikorsky (UH-60 BLACKHAWK Gunner Windows and CH-53K Welded Tubes), Raytheon (Airborne Reconnaissance Pods), Embraer (Phenom 300 Engine Inlets), and L3Harris (Next Generation Jammer-Low Band Pods (“NGJ-LB”) .
Previous 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).
Current wording
The funded backlog at September 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), Embraer (Phenom 300 Engine Inlets) and L3Harris (NGJ-Low Band Pods).
Previous 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.
Current wording
Total Revenue for the three months ended September 30, 2024 was $19,419,879 compared to $20,399,369 for the same period last year, a decrease of $979,490 or 4.8%, driven primarily by decreases in our USAF T-38 Pacer Classic Structure Modification Kits program and Northrop Grumman E-2D Advanced Hawkeye Outer Wing Panels (“OWP”), partly offset by increases in our Raytheon NGJ – Mid Band Pods.
Previous wording
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 wording
Total Revenue for the nine months ended September 30, 2024 was $59,311,356 compared to $62,963,592 for the same period last year, a decrease of $3,652,236 or 5.8%, driven primarily by decreases in our Sikorsky UH-60 BLACKHAWK Hover Infrared Suppression System (“HIRSS”) Module Assemblies program, Northrop Grumman E-2D Advanced Hawkeye OWP program and Lockheed Martin F-16 Rudder Island program, partly offset by increases in our Raytheon NGJ – Mid Band Pods program, and Collins MS-110 program.
Previous 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.
Current wording
Revenue from military subcontracts was $48,951,748 for the nine months ended September 30, 2024 compared to $50,550,256 for the nine months ended September 30, 2023, a decrease of $1,598,508 or 3.2%, driven primarily by decreases in our Sikorsky UH-60 BLACKHAWK HIRSS Module Assemblies program partly offset by increases in our Raytheon NGJ – Mid Band Pods program.
Previous wording
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 wording
Revenue from government military contracts was $1,673,483 for the three months ended September 30, 2024 compared to $3,943,723 for the three months ended September 30, 2023, a decrease of $2,270,240 or 57.6%, driven primarily by a decrease in our USAF T-38 Pacer Classic Structural Modification Kits program due to push out of customer inductions of aircraft.
Previous 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.
Current wording
Revenue from government military contracts was $7,056,711 for the nine months ended September 30, 2024 compared to $8,062,682 for the nine months ended September 30, 2023, a decrease of $1,005,971 or 12.5%, driven primarily by decreases in our USAF T-38 Pacer Classic Structural Modification Kits program and DLA F-16 Wing Skins program.
Previous 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.
Current wording
Revenue from commercial subcontracts was $760,290 for the three months ended September 30, 2024 compared to $1,080,309 for the three months ended September 30, 2023, a decrease of $320,019 or 29.6%, primarily on a decrease in our Embraer Phenom-300 Engine Inlet Assemblies program.
Previous wording
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 wording
Revenue from commercial subcontracts was $3,302,897 for the nine months ended September 30, 2024 compared to $4,350,654 for the nine months ended September 30, 2023, a decrease of $1,047,757 or 24.1%, primarily on a decrease in our Embraer Phenom-300 Engine Inlet Assemblies program.
Previous 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%.
Current wording
Total Cost of Sales for the three months ended September 30, 2024 and 2023 was $15,200,210, and $16,693,279, respectively, a decrease of $1,493,069 or 9%.
Previous wording
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 wording
Total Cost of Sales for the nine months ended September 30, 2024 and 2023 was $46,422,514 and $49,990,986, respectively, a decrease of $3,568,472 or 7%.
Previous wording
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 wording
Factory overhead for the three months ended September 30, 2024 was $4,021,411 compared to $4,036,825 for the three months ended September 30, 2023, a decrease of $15,414 or 0.4%.
Previous wording
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 wording
Factory overhead for the nine months ended September 30, 2024 was $12,058,902 compared to $12,083,270 for the nine months ended September 30, 2023, a decrease of $24,368 or 0.2%.
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 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.
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 September 30, 2024 was $98,197 compared to a $260,903 for the three months ended September 30, 2023, a decrease of $162,706 or 62.4%. The decrease is primarily the result of lower loss reserve required during the three months ended September 30, 2024 as compared to the three months ended September 30, 2023.
Previous wording
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 wording
Other cost of sales for the nine months ended September 30, 2024 was $201,219 compared to $831,165 for the nine months ended September 30, 2023, a decrease in cost of $629,946 or 75.8%. The decrease is primarily the result of a lower required loss reserve and lower level of direct charges to cost of sales during the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023.
Previous 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.
Current wording
Gross profit and gross profit percentage (“gross margin”) for the three months ended September 30, 2024 was $4,219,669 and 21.7%, respectively, compared to $3,706,090 and 18.2%, respectively, for the three months ended September 30, 2023, an increase of $513,579, or 13.9%, and 350 basis points, respectively, for the reasons noted above and a favorable year-over-year mix.
Previous wording
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 wording
Gross profit and gross profit percentage (“gross margin”) for the nine months ended September 30, 2024 was $12,888,842 and 21.7%, respectively, compared to $12,972,606 and 20.6%, respectively, for the nine months ended September 30, 2023, a decrease of $83,764, or 0.6%, and 110 basis points, respectively, for the reasons noted above.
Previous 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:
Current wording
During the nine months ended September 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 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.
Current wording
Selling, general and administrative expenses for the three months ended September 30, 2024 were $2,742,036 compared to $2,535,065 for the three months ended September 30, 2023, an increase of $206,971 or 8.2%. The increase was primarily the result of higher personnel related expenses.
Previous 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.
Current wording
Interest expense for the three months ended September 30, 2024 was $573,366, compared to $663,857 for the three months ended September 30, 2023, a decrease of $90,491 or 13.6%. The decrease was the result of lower year-over-year interest rates charged on our outstanding debt under the Credit Agreement, combined with 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 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.
Current wording
Provision for income taxes for the three months ended September 30, 2024 was $154,590 compared to $205,804 for the three months ended September 30, 2023, a decrease of $51,214, or 24.9%. The decrease in the provision for income tax is primarily the result of the annualization of the September 30, 2023 tax rate.
Previous 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.
Current wording
The effective income tax rate for the three months ended September 30, 2024 is 17.1%. The difference between the effective income tax rate for the three months ended September 30, 2024 and the statutory income tax rate of 21% for the three months ended September 30, 2024 is primarily due to estimated R&D credit, state income taxes and permanent tax differences.
Previous wording
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 wording
Provision for income taxes for the nine months ended September 30, 2024 was $535,634 compared to $503,850 for the nine months ended September 30, 2023, an increase of $31,784, or 6.3%. The increase in the provision for income tax is primarily the result of the reduced impact in the rate for the R&D benefit.
Previous wording
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 wording
The effective income tax rate for the nine months ended September 30, 2024 is 18.7%. The difference between the effective income tax rate for the nine months ended September 30, 2024 and the statutory income tax rate of 21% for the nine months ended September 30, 2024 is primarily due to estimated R&D credit, state income taxes and permanent tax differences.
Previous 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.
Current wording
Net income for the three months ended September 30, 2024 was $749,677 compared to $301,364 for the three months ended September 30, 2023, an increase of $448,313 or 148.8%% for the reasons noted above.
Previous 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.
Current wording
Basic and diluted income per share for the three months ended September 30, 2024 was calculated using 12,647,023 and 12,717,128 weighted average basic and diluted shares outstanding, respectively, as compared to 12,759,971 and 12,793,133 weighted average basic and diluted shares outstanding, respectively, for the three months ended September 30, 2023.
Previous wording
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 wording
Net income for the nine months ended September 30, 2024 was $2,327,861 compared to $2,441,745 for the nine months ended September 30, 2023, a decrease of $113,884 or 4.7% for the reasons noted above.
Previous wording
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.
Current wording
Basic and diluted income per share for the nine months ended September 30, 2024 was calculated using 12,559,876 and 12,650,340 weighted average basic and diluted shares outstanding, respectively, as compared to 12,613,899 and 12,647,061 weighted average basic and diluted shares outstanding, respectively, for the nine months ended September 30, 2023.
Previous 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.
Current wording
At September 30, 2024, we had working capital of $16,312,228 compared to $15,402,381 at December 31, 2023, an increase of $909,847 or 5.9%. The increase was driven primarily by lower contract liabilities and higher accounts receivable, partly offset by lower cash and contract assets, lower inventory and lower prepaid expenses and other current assets.
Previous 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.
Current wording
At September 30, 2024, we had cash of $1,708,987 compared to $5,094,794 at December 31, 2023, a decrease of $3,385,807 or 66.5%. This decrease was primarily the result of cash flow used in operating activities and repayment of debt.
Previous wording
On February 20, 2024, the Company entered into a Thirteenth Amendment to the Credit Agreement (the “Thirteenth Amendment”). Under the Thirteenth Amendment, the parties amended the Credit Agreement by (a) extending the maturity date of the Company’s existing revolving line of credit to August 31, 2025; and (b) setting the aggregate maximum principal amount of all revolving line of credit loans to $19,800,000 from January 1, 2024 through March 31, 2024, $19,080,000 from April 1, 2024 through June 30, 2024, $18,360,000 from July 1, 2024 through September 30, 2024, $17,640,000 from October 1, 2024 through December 31, 2024, $16,920,000 from January 1, 2025 through March 31, 2025, $16,200,000 from April 1, 2025 through June 30, 2025 and $15,480,000 thereafter, and for payments to be made by the Company to comply therewith (if any such payments are necessary), on the first day of each such period.
Current wording
On February 20, 2024, the Company entered into a Thirteenth Amendment to the Credit Agreement (the “Thirteenth Amendment”). Under the Thirteenth Amendment, the parties amended the Credit Agreement by (a) extending the maturity date of the Company’s existing revolving line of credit to August 31, 2025; and (b) setting the aggregate maximum principal amount of all revolving line of credit loans to $19,800,000 from January 1, 2024 through March 31, 2024, $19,080,000 from April 1, 2024 through June 30, 2024, $18,360,000 from July 1, 2024 through September 30, 2024, $17,640,000 from October 1, 2024 through December 31, 2024, $16,920,000 from January 1, 2025 through March 31, 2025, $16,200,000 from April 1, 2025 through June 30, 2025 and $15,480,000 from July 1, 2025 onward, and for payments to be made by the Company to comply therewith (if any such payments are necessary), on the first day of each such period.
Previous wording
The BankUnited Facility is secured by all of the Company’s assets and the Revolving Loan bears interest at the Prime Rate + 3.50%. The Prime Rate was 8.50% as of June 30, 2024 and as such, the Company’s interest rate on the Revolving Loan was 12.00% as of June 30, 2024.
Current wording
The BankUnited Facility is secured by all of the Company’s assets. Prior to the Fourteenth Amendment the Revolving Loan bore interest at the Prime Rate + 3.50%. The Prime Rate was 8.0% as of September 30, 2024 and as such, the Company’s interest rate on the Revolving Loan was 11.5% as of September 30, 2024.
Previous 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.
Current wording
As of September 30, 2024 and December 31, 2023, the Company had $18,120,000 and $20,040,000 outstanding under the Revolving Loan, respectively.
Previous wording
For information concerning our contractual obligations, seeContractual Obligations under Item 7 of Management’s Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the year ended December 31, 2023.
Current wording
For information concerning our contractual obligations, seeContractual Obligations under Item 7 of Management’s Discussion and Analysis of Financial Condition and Results of Operations of the Form 10-K.
Rearranged previous paragraphs (1)
Previous report — wording carried 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.