CPI Aerostructures Reports Second Quarter and Six Month 2025 Results
1. CPI Aero's Q2 2025 revenue fell to $15.2 million from $20.8 million.
2. Q2 2025 gross profit dropped to $0.7 million from $5.1 million.
3. A-10 Program termination led to a $2.3 million write-off.
4. Company's debt decreased to $16.2 million, improving balance sheet.
5. Strong backlog of $506 million from new program awards.
The significant decline in revenues and profits reflects operational challenges. Historical precedence shows that heightened losses usually correspond to negative market reactions in similar tech firms.
How important is it?
The financial deterioration and A-10 Program fallout may negatively influence CVU's valuation metrics. Existing investors may reassess their positions given the evident struggles the company is facing.
Why Short Term?
Immediate financial results indicate operational struggles, likely impacting investor sentiment. Short-term focus is warranted as markets react quickly to quarterly reports.
Revenue of $15.2 million compared to $20.8 million;
Gross profit of $0.7 million compared to $5.1 million;
Gross margin of 4.4% (17.1% excluding A-10 Program impact) compared to 24.6%;
Net (loss) income of $(1.3) million compared to net income of $1.4 million;
(Loss) earnings per share of $(0.10) compared to earnings per share of $0.11;
Adjusted EBITDA(1) of $(1.7) million ($0.6 million excluding A-10 Program impact) compared to $2.6 million.
Six Months 2025 vs. Six Months 2024
Revenue of $30.6 million compared to $39.9 million;
Gross profit of $2.3 million compared to $8.7 million;
Gross margin of 7.6% (19.3% excluding A-10 Program impact) compared to 21.7%;
Net (loss) income of $(2.6) million compared to net income of $1.6 million;
(Loss) earnings per share of $(0.21) compared to earnings per share of $0.13;
Adjusted EBITDA(1) of $(2.5) million ($2.0 million excluding A-10 Program impact) compared to $3.8 million;
Debt as of June 30, 2025 of $16.2 million compared to $18.9 million as of June 30, 2024.
EDGEWOOD, N.Y., Aug. 19, 2025 (GLOBE NEWSWIRE) -- CPI Aerostructures, Inc. ("CPI Aero" or the "Company") (NYSE:CVU) today announced financial results for the three and six months ended June 30, 2025.
"During the second quarter we took a $2.3 million write-off on the A-10 Program as a result of the termination of the Program by The Boeing Company and the pending retirement of the A-10 fleet. Our six-month ended June 30, 2025 impact related to the A-10 Program was $4.5 million.
"Without the impact of the terminated A-10 Program, we performed well as we continued the transition to our new programs and achieved key development milestones such as the first Advanced Tactical Flight Pod delivery to Raytheon.
"We also continued to improve our balance sheet during the second quarter, bringing our total debt down to an all-time low of $16.2 million and our Debt-to-Adjusted EBITDA Ratio to 2.7 excluding the impact of the A-10 Program," continued Dorith Hakim, President and CEO.
Concluded Ms. Hakim, "We remain committed to optimizing our portfolio and transitioning from legacy programs to programs of the future. As a result, we ended the quarter with a strong backlog of $506 million, which includes multiple new program awards from Raytheon, Sikorsky, Lockheed, the US Air Force and Embraer. Looking ahead we will continue to capitalize on the multiple growth opportunities leveraging our long-standing relationships with our customers."
As disclosed in the Form 10-Q filed today, management identified a material weakness in internal control over financial reporting related to the classification of debt pending an amendment to a debt covenant. Management believes this has no bearing on the financial results for the second quarter and is implementing the necessary steps to remediate the matter.
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. Words such as "remain committed," "optimizing our portfolio," "transitioning from legacy programs," "multiple growth opportunities," "continue," "leveraging our long-standing relationships," "believes," "implementing," and similar expressions are intended to identify these forward-looking statements. 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, 2024 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.
CPI AEROSTRUCTURES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
June 30, 2025 (Unaudited)
December 31, 2024
ASSETS
Current Assets:
Cash
$
674,481
$
5,490,963
Accounts receivable, net
6,054,015
3,716,378
Contract assets, net
31,027,022
32,832,290
Inventory
1,025,172
918,288
Prepaid expenses and other current assets
541,084
634,534
Total Current Assets
39,321,774
43,592,453
Operating lease right-of-use assets
10,220,405
2,856,200
Property and equipment, net
643,476
767,904
Deferred tax asset, net
20,153,104
18,837,576
Goodwill
1,784,254
1,784,254
Other assets
132,954
143,615
Total Assets
$
72,255,967
$
67,982,002
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable
$
15,179,687
$
11,097,685
Accrued expenses
4,727,857
7,922,316
Contract liabilities
1,896,936
2,430,663
Loss reserve
70,137
22,832
Current portion of line of credit
3,000,000
2,750,000
Current portion of long-term debt
10,822
26,483
Operating lease liabilities, current
1,367,604
2,162,154
Income taxes payable
2,348
58,209
Total Current Liabilities
26,255,391
26,470,342
Line of credit, net of current portion
13,140,000
14,640,000
Long-term operating lease liabilities
9,087,405
938,418
Total Liabilities
48,482,796
42,048,760
Commitments and Contingencies (see note 11)
—
Shareholders' Equity:
Common stock - $.001 par value; authorized 50,000,000 shares, 12,978,259 and 12,978,741 shares, respectively, issued and outstanding
12,978
12,979
Additional paid-in capital
74,913,464
74,424,651
Accumulated deficit
(51,153,271
)
(48,504,388
)
Total Shareholders' Equity
23,773,171
25,933,242
Total Liabilities and Shareholders' Equity
$
72,255,967
$
67,982,002
CPI AEROSTRUCTURES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS
Quarters ended June 30, 2025 and 2024
For the Three Months Ended June 30,
For the Six Months Ended June 30,
2025
2024
2025
2024
Revenue
$
15,179,108
$
20,810,334
$
30,579,716
$
39,891,477
Cost of sales
14,515,726
15,694,910
28,266,859
31,222,304
Gross profit
663,382
5,115,424
2,312,857
8,669,173
Selling, general and administrative expenses
2,654,024
2,775,935
5,489,801
5,489,839
(Loss) income from operations
(1,990,642
)
2,339,489
(3,176,944
)
3,179,334
Other income
5,480
—
6,980
—
Interest expense
(287,546
)
(587,971
)
(775,637
)
(1,220,106
)
(Loss) income before provision for income taxes
(2,272,708
)
1,751,518
(3,945,601
)
1,959,228
(Benefit) provision for income taxes
(947,749
)
341,572
(1,296,718
)
381,044
Net (Loss) income
$
(1,324,959
)
$
1,409,946
$
(2,648,883
)
$
1,578,184
Income per common share, basic
$
(0.10
)
$
0.11
$
(0.21
)
$
0.13
Income per common share, diluted
$
(0.10
)
$
0.11
$
(0.21
)
$
0.12
Shares used in computing income per common share:
Basic
12,748,869
12,440,426
12,728,209
12,515,824
Diluted
12,748,869
12,554,153
12,728,209
12,656,753
Unaudited Reconciliation of GAAP to Non-GAAP Measures
Note: (1) Adjusted EBITDA is a non-GAAP measure defined as GAAP income from operations plus depreciation, amortization and stock-compensation expense.
Adjusted EBITDA as calculated by us may be calculated differently than Adjusted EBITDA for other companies. We have provided Adjusted EBITDA because we believe it is a commonly used measure of financial performance in comparable companies and is provided to help investors evaluate companies on a consistent basis, as well as to enhance understanding of our operating results. Adjusted EBITDA should not be construed as either an alternative to income from operations or net income or as an indicator of our operating performance or an alternative to cash flows as a measure of liquidity. The adjustments to calculate this non-GAAP financial measure and the basis for such adjustments are outlined below. Please refer to the following table below that reconciles GAAP income from operations to Adjusted EBITDA.
The adjustments to calculate this non-GAAP financial measure, and the basis for such adjustments, are outlined below:
Depreciation. The Company incurs depreciation expense (recorded in cost of sales and in selling, general and administrative expenses) related to capital assets purchased, leased or constructed to support the ongoing operations of the business. The assets are recorded at cost or fair value and are depreciated over the estimated useful lives of individual assets.
Stock-based compensation expense. The Company incurs non-cash expense related to stock-based compensation included in its GAAP presentation of cost of sales and selling, general and administrative expenses. Management believes that exclusion of these expenses allows comparison of operating results to those of other companies that disclose non-GAAP financial measures that exclude stock-based compensation.
Adjusted EBITDA is a non-GAAP financial measure and should not be considered in isolation or as a substitute for financial information provided in accordance with GAAP. This non-GAAP financial measure may not be computed in the same manner as similarly titled measures used by other companies. The Company expects to continue to incur expenses similar to the Adjusted EBITDA financial adjustments described above, and investors should not infer from the Company's presentation of this non-GAAP financial measure that these costs are unusual, infrequent, or non-recurring.
Reconciliation of income from operations to Adjusted EBITDA is as follows: