CPI Aerostructures Reports Q1 2025 Financial Performance
First Quarter Financial Overview for CPI Aerostructures
CPI Aerostructures, Inc. (NYSE American: CVU) recently unveiled its financial results for the first quarter of 2025, revealing a mix of challenges and strategic insights into the company's performance in a competitive landscape.
Year-over-Year Comparisons
The financial results for the first quarter presented some notable differences when compared to the same period in 2024. Revenue was reported at $15.4 million, a decrease from $19.1 million last year. Similarly, the gross profit showcased a decline, standing at $1.6 million, down from $3.6 million. These changes contributed to a gross margin contraction, sitting at 10.7% compared to 18.6% in the first quarter of 2024.
In terms of earnings, CPI Aerostructures faced a net loss of $(1.3) million, whereas the previous year reported a modest net income of $0.2 million. This resulted in a loss per share of $(0.10) compared to earnings of $0.01 a year earlier. Adjusted EBITDA also mirrored this decline, landing at $(0.8) million after previously reaching $1.2 million in 2024.
Impact of A-10 Program
Management, led by President and CEO Dorith Hakim, attributed this downturn significantly to the A-10 Program, a legacy contract that has seen increased manufacturing costs. Hakim stated, "This challenging program has led to a pre-tax loss of $2.1 million. In recognition of the impending retirement of the A-10 fleet, we are taking preemptive measures to minimize its adverse effects on our financial results." Despite these challenges, they noted that, excluding the A-10 impacts, the gross profit margin improved to 21.6%.
Operational Highlights
Even amidst these financial challenges, CPI Aerostructures emphasized ongoing improvements to its balance sheet. The company reported a historic low in its total debt, which now stands at $16.7 million. This reduction allows for a Debt-to-Adjusted EBITDA Ratio of 2.9, marking their ninth consecutive quarter below the 3.0 threshold.
Hakim expressed optimism about the future, stating, "We remain committed to enhancing our operational efficiency while adapting to our customer’s needs. Our existing backlog is robust at $516 million, buoyed by several new program awards from key industry players such as L3Harris, Raytheon, Lockheed Martin, and Embraer. This positions us well for long-term growth as we continue to nurture relationships with our partners and capitalize on upcoming opportunities."
Company Profile
CPI Aerostructures is a leading U.S. manufacturer specializing in structural assemblies for fixed-wing aircraft, helicopters, and airborne systems in both commercial aerospace and national security sectors. Within the global supply chain of aerostructures, the company operates as either a Tier 1 supplier to original equipment manufacturers (OEMs) or as a Tier 2 subcontractor to major Tier 1 manufacturers. Additionally, CPI Aerostructures serves as a prime contractor for the U.S. Department of Defense, primarily focusing on the Air Force.
Beyond manufacturing, the company provides comprehensive engineering, program management, supply chain management, and maintenance, repair, and operations (MRO) services.
Frequently Asked Questions
What are the main drivers of CPI Aerostructures' current financial challenges?
The financial challenges primarily stem from the A-10 Program, which has incurred increased manufacturing costs and a pre-tax loss of $2.1 million.
How does CPI Aerostructures plan to improve its financial performance?
The company is focusing on operational enhancements, optimizing its portfolio transitioning from legacy programs to future-oriented projects, and improving customer relationships.
What is the current status of CPI Aerostructures' debt?
CPI Aerostructures has achieved a significant reduction in total debt, which now stands at $16.7 million, helping maintain a low Debt-to-Adjusted EBITDA Ratio of 2.9.
Can you provide details on the company's order backlog?
The company's backlog is robust at $516 million, supported by new program awards from several prominent industry partners.
What markets does CPI Aerostructures operate in?
The company operates within both the commercial aerospace and national security markets, providing critical components and services for a range of applications.
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