CPI Aerostructures Announces Strong First Quarter Results; Revenue Increases 28.0%; Operating Income Up 46.9%
BUSINESS WIRE - May 01, 2003 08:31
EDGEWOOD, N.Y., May 1, 2003 (BUSINESS WIRE) -- CPI Aerostructures, Inc. ("CPI") (AMEX: CVU) today announced strong operating results for the first quarter ended March 31, 2003.
First Quarter 2003 versus 2002
-- Revenue rose 28% to $6,007,447 from $4,691,784;
-- Gross margin was 36% versus 30%;
-- Income from operations rose 46.9% to $1,442,982 from $982,510;
-- Additionally, in Q1 '03 there were gains from the disposition
of "assets held for sale-discontinued operations" and from the
early extinguishment of debt which totaled $2,684,565;
-- Net income was $3,990,535 or $0.93 per share on a diluted
basis, compared to $558,433 or $0.21 per share on a diluted
basis last year. Net income, excluding the non-recurring
gains, if taxed would have been $783,582, or $0.18 per share
on a diluted basis, an increase of 40% compared with $558,433,
or $0.21 per share on a diluted basis last year.
Edward J. Fred, CPI's President & CEO stated, "CPI has started the new year on a strong note, continuing the momentum from last year. Excluding the non-recurring gains, our operating income is running close to 47% ahead of last year, which highlights the operating leverage we derive from our top line growth. For the first four months of the year, new contract awards of $15.5 million are 52% ahead of last year's $10.2 million, which is a good indicator of healthy demand for the Company's products and services and demonstrates the level of acceptance we have been able to achieve in our marketplace. We continue to be awarded new contracts for a wide variety of structural parts for aircraft that we have been supporting for many years, the largest of which are for the C-5A Galaxy Cargo Jet and the T-38 Talon Jet Trainer."
Mr. Fred continued, "Based upon the pace of new contract awards to date, the size of new orders and our customers' delivery expectations, we continue to believe that 2003 will be a year of record operating results for CPI. We are reaffirming our 2003 revenue forecast of $30 million and net income of approximately $4.0 million, excluding the non-recurring gains we have realized in this quarter. $30 million in revenue represents a 25% increase over the prior year and if CPI continues to receive contract awards at the high rate we have seen in the first four months of this year, 2004 will have a very healthy start as well."
Mr. Fred clarified some of the non-recurring items in CPI's financial statements, indicating that, "$2.7 million, of the $7.8 million in net proceeds of our February 19, 2003 secondary public offering, was used to repurchase a $4.0 million note and the related accrued interest. This resulted in a $2.4 million gain from the early extinguishment of debt in the current quarter. Also, during the first quarter, we sold one of the two remaining Kolar, Inc. (discontinued operation as of 12/31/01) buildings for $575,000, which resulted in a gain on the disposition of "assets held for sale - discontinued operations" of $253,000. In addition, we utilized a portion of our NOL and therefore in the current first quarter, there was no provision for income taxes, compared to a 40% effective tax rate for the same period last year. Finally, due to the public offering, the number of shares being used to calculate 'earnings per share' and 'diluted earnings per share' is significantly higher, compared with the same period last year."
He continued, "Our balance sheet is exceptionally strong, primarily due to the 2.3 million share public offering, the subsequent repayment of $5.1 million of debt and the resulting infusion of working capital. This balance sheet has put CPI on a very healthy track."
In closing, Mr. Fred stated, "We have good reason to be confident in our outlook:
-- Revenue is growing at double digit rates;
-- Backlog is increasing, providing stability into the coming 12
month period;
-- Operating margins are improving as we increase our revenue;
-- The market we serve is showing strong growth;
-- We work on long-lived programs and have long standing
relationships with customers, built on performance, measured
in quality products and on-time delivery;
-- We are focused on improving our infrastructure to enable us to
continue to grow, maintain high margins and enhance our
ability to deliver."
CONFERENCE CALL
CPI's President & CEO Edward J. Fred will host a conference call today, May 1, 2003 at 11 am EDT to discuss first quarter results as well as recent corporate developments. After opening remarks, there will be a question and answer period. Interested parties may participate in the call by dialing (973) 582-2866. Please call in 10 minutes before the scheduled time and ask for the CPI Aerostructures call. The conference call will also be broadcast live over the Internet. To listen to the live call, please go to www.cpiaero.com and click on the "Investor Relations" section, then click on "Events". Please access the website 15 minutes prior to the call to download and install any necessary audio software. The conference call will be archived and can be accessed for approximately 90 days. |
