CPI Aerostructures Announces 2006 Fourth Quarter and Year-End Results
Thursday March 29, 8:40 am ET
Reaffirms Guidance for 2007
EDGEWOOD, N.Y.--(BUSINESS WIRE)--CPI Aerostructures, Inc. ("CPI Aero") (AMEX: CVU - News) today announced results for the fourth quarter and year ended December 31, 2006.
Full Year 2006 vs. 2005
Revenue decreased 30% to $17,907,989, from $25,526,404;
Gross margin was 10% as compared to 24%;
Loss before benefit from income taxes was $1,922,006 compared to income before provision for income taxes of $2,657,433;
Net loss was $1,265,006 or $0.23 per diluted share, compared to net income of $1,519,433 or $0.25 per diluted share;
New orders for 2006 were $30.0 million (including $7.0 million from prime contractors), compared to $16.7 million (including $2.2 million from prime contractors) for 2005; and
Unawarded solicitations remain at a high level, with open solicitations totaling a maximum realizable value of approximately $300 million.
Fourth Quarter 2006 vs. 2005
Revenue decreased 8% to $6,007,848 from $6,515,624;
Gross margin was 16% compared to 12% in the prior year's fourth quarter;
Income before income taxes was $12,011, compared to loss before provision for income taxes of $19,914; and,
Net income was $12,011, or $0.00 per diluted share, compared to net loss of $116,914 or $0.02 per diluted share.
Edward J. Fred, CPI Aero's President & CEO stated, "Although 2006 revenue was impacted by delays on releases of previously awarded contracts, revenues generated in the fourth quarter of 2006 were 36% and 140% ahead of $4.4 million and $2.5 million reported in the 2006 third and second quarters, respectively. We have resolved most of the production-related issues that we faced earlier in the year and, as the increased quarterly revenue demonstrates, most of our operating problems are behind us. As a result, our gross margin has been improving since mid 2006 and in the fourth quarter it was 16% compared to 12% in the prior years' fourth quarter."
Discussing 2006 contract awards, Mr. Fred noted, "2006 new orders increased 80% to $30.0 million compared to $16.7 million in 2005, making 2006 the third largest award year in CPI Aero's history. Additionally, in 2006 the average size of our contract award was $231,000 compared to $94,000 in 2005. We also saw a substantial increase in subcontracting business, including two contracts totaling $5 million from our new customer, Sikorsky Aircraft. In 2006, total subcontracting awards more than tripled, to $7.0 million or 24% of the total awards compared to $2.2 million or 13% of 2005 awards. We are continuing to diversify our customer base and we expect our future revenue mix to reflect a larger proportion of work to be performed in our capacity as a subcontractor to major prime contractors."
Mr. Fred stated, "We are participating with a major international prime manufacturer in the proposal process to provide new wings for over 200 A-10 Warthogs, and are looking at several other subcontracting possibilities as well."
Mr. Fred continued, "On the C-5 TOP program, we continue to explore when and how we will receive additional orders which we expected when we were awarded this major contract. The Department of Defense is closely examining the shortfall in U.S. airlift mobility, and we are hopeful that their review will bring to the forefront the need for modified and upgraded C-5s, as outlined in the Quadrennial Defense Review."
Mr. Fred concluded, "With the expected return of our historical gross margins coupled with overhead reductions taken in mid-year 2006, we look forward to a healthier profit picture for 2007. Based upon the level of new and pending orders, we are reaffirming our prior 2007 guidance. We anticipate 2007 revenue to be approximately $25 million, with a resulting net income of approximately $2.0 million." |
