Cpi Aerostructures, Inc. · AMEX:CVU
Cpi Aerostructures — Investor Presentation (May 2014)
29 slides from Cpi Aerostructures's investor presentation, May 20, 2014
Slide 1: Investor Presentation May 2014
Investor Presentation May 2014
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation contains forward-looking statements that involve risks and uncertainties. All statements, other than statements of historical fact, included in this presentation, including without limitation, statements regarding projections, future financing needs, and
Slide 3: About CPI Aero: Products and Services
About CPI Aero: Products and Services Manufacturer of aerospace structural assemblies for commercial and military markets + Skin panels, leading edges, flight control surfaces, wing tips, cowl doors, engine nacelle and inlet assemblies, airborne pod structures + Value-added services include program
Slide 4: Subcontractor Role
Subcontractor Role oct) Components or ‘Manufacture Manufacture aircraft Final assembly, finish detailed parts subassemblies sections and delivery Primes are Outsourcing Lower Level Structural Assemblies \ Tier 2 Supplier to:
Slide 5: Building on our Heritage
Building on our Heritage Pursuing Design & Build Programs + Large Commercial Aircraft Awards Positioned to Capitalize on Military Reset Expansion into New Markets Established Reputation as Top-Tier Manufacturer Business JetAwards Large-Scale Manufacturing + Early 20006 Start Pursuing Subcontracting
Slide 6: CPI Aero's 171,000 Sq. Ft. Facility
CPI Aero’s 171,000 Sq. Ft. Facility
Slide 7: Investment Case
Investment Case ing need for increased production of 41. Commercial aircraft demand dri structure 2. More opportunities in larger & more complex programs than ever before 3. Current long term contracts expected to generate $410 million in future revenue 4. Focusing on technology automation and globa
Slide 8: 2014 Business Outlook
2014 Business Outlook Revenues Production Rates & Deliveries Gross margin EBITDA Cash flow from operations $83.5 million — $85.0 million Newer commercial programs expected to generate a higher % of total revenue Product deliveries and customer billings expected to increase by 10%... our highest ever
Slide 9: 2015 Business Outlook
2015 Business Outlook Highest revenue in CPI Aero’s history is expected Projected: $90.5 million - $94.0 million + Anticipated single digit growth in military revenue + Anticipated double digit growth in commercial revenue Revenues Continued strength in production rates of business jet Production Ra
Slide 10: Industry/Company Outlook
ustry/Company Outlook 2014 and Beyond Favorable long-term market outlook Military Programs Well positioned on E-2D, Black Hawk military platforms that are expectedto survive the | Forscaat DeiNeries' deep cuts to overall military spending ' Heritage in providing spares support for out- $250 of produ
Slide 11: CPI Aero's Unique Business Model
CPI Aero’s Unique Business Model Since inception: —_- focused on assembly and integration - use suppliers to manufacture 100% of components Provides a competitive advantage over vertically integrated competitors due to: ee Competence + Over 30 years of highly evolved assembly, supply chain and progr
Slide 12: CPI Aero's Strategic Objectives
CPI Aero’s Strategic Objectives Continued improvement and expansion of capabi ies is vital to CPI Aero’s future Objectives Supported by our business plan 11. Enhance capabilities to win larger and more complex assembly and design- build projects 2. Provide best possible buying experience for our cus
Slide 13: Key Operational Objectives
Key Operational Objectives 41. EXCEED EXPECTATIONS of our customers by manufacturing the highest quality aerospace structural products while providing a low risk, collaborative and completely satisfying customer experience. 2. GROW our business with EXISTING CUSTOMERS, earn the trust of NEW CUSTOMER
Slide 14: Programs (as of 3/31/14): Military Aerospace
Programs (as of 3/31/14): Military Aerospace Ba (NORTHROP GRUMMAN ‘Sikorsky woes: pS ey comer fp UTC Aerospace Systems A-10 Thunderbolt E-2DAdvanced = UH-60BLACK _Millitary aircraft. = AH-1Z ZULU Wing Hawkeye &C-2A HAWK helicopter Helicopter , Greyhound ; entan Leading edges, wing tips, trailing edg
Slide 15: Programs (as of 3/31/14): Commercial
Programs (as of 3/31/14): Commercial A 7 | PIRIT Sikorsky << aici code pekcaretene sas eet asanne Gulfstream G650 $-92 Civil HondaJet Embraer Phenom — Cessna Citation Business Jet Helicopter BusinessJet 300businessjets _X Civilian Jet $28.8 $70M potential $40M potential © $41M potential value value
Slide 16: Contract Awards
Contract Awards Value of Contract Awards (in $ millions) $125 $100 - $75 | $50 $25 $0 $122.3M ; 100% 80% 60% 40% F a - + 0% 2007 2008 2009 2010 2011 2012 2013 mmaMilitary “Commercial -*-% of Subcontract Awards to Total Awards CPI Aero’s future revenue mix should continue to reflect larger proportion
Slide 17: Contracts (as of 3/31/14) - Size and Duration
Contracts (as of 3/31/14) - Size and Duration Firm, Funded Contracts Provide Lor ‘7 ‘08 ‘09 10 ‘11 SIKORSKY - $18.5 M for the UH-60 BLACK HAWK. ee aren ey SIKORSKY - $10.9 M for the S-92@ civil helicopter NORTHROP GRUMMAN - 2 ALMDS units ‘SPIRIT -for the Gulfstream G660 business jet NORTHROP GRUMMAN
Slide 18: Large Order Backlog
Large Order Backlog Consolidated Backlog at 3/31/2014 $410.3 Million Funded / Unfunded Defense / Commercial Unfunded backlog represents remaining potential value of long term agreements * qe 9D = Funded = Unfunded Military Aerospace» Commercial * Unfunded backlog is primarily comprised of the long-t
Slide 19: Backlog Breakdown (at 3/31/14)
Backlog Breakdown (at 3/31/14) Military Aerospace Commercial Funded: $69.2 Million $0.3M_ q am <2 Unfunded: ult 165.0 Million $3.7M. = Fixed Wings Rotary Wings = MRO mPod Systems Funded: $27.0 Million “{ as $20.1M J Unfunded: $149.1 Million Y $4.1M _— $145.0m = Rotary Wings Business Jet = Foreign Co
Slide 20: Bid Pipeline (4/30/14)
Bid Pipeline (4/30/14) Military / Commercial = Military = Commercial Pipeline includes only proposals expected to be awarded in 2014 and/or 2015 20
Slide 21: Bid Pipeline: Breakdown (4/30/14)
Bid Pipeline: Breakdown (4/30/14) Military Commercial Light Large Ea Business 33% Fixed Wing 48% Rotary Wing 30% LCA 38% a Fixed Wing = Rotary Wing = Light Bizet =Large Business =LCA Pod Systems =» MRO a
Slide 22: Additional Growth Opportunities
Additional Growth Opportunities Expand Relationship with Existing Customers (new program opportunities) i i sor __ MG TT Aerospace Systems Bei mm ES aoe wokeme ——-€ ewornan Pursue Subcontracts on Large Pursue Subcontracts on Future Commercial Aircraft Defense Programs ture Lig . Helicopter 5 ey NOW
Slide 23: Leveraging client relationships - Case Study
Leveraging client relationships - Case Study Sikorsky: 2006 to 2014 Future Opportunities -Combat Dec. 2012 -Rescue Helicopter Sep. 2006 June 2007 Feb 2011 MRO LTA Presidential Awarded 1* MLTA for LTA for S- forthe Turkish Utility contract $92 kits 92 kits BlackHawk Helicopter <$25.000 $4.1M $17.5Ml
Slide 24: Financial Highlights
Financial Highli Q1 2014 Results: In Line with Expectations Highlights Q1 2014 Q1 2013 Revenue $21.9 million $19.9 million Gross margin 20.5% 22.3% Pre-tax income $2.5 million $2.4 million Net Income $1.7 million $1.7 million EPS $0.20 $0.20 2014 Projected Results Highlights 2014 Revenue $83.5 milli
Slide 25: Revenue Breakdown
Revenue Breakdown Revenue Breakdown Military Aerospace Commercial 2013 2014(E) 2015(E) CPL we
Slide 26: Revenue Breakdown: Military
evenue Breakdown: Military 100% 3% 1% 80% 60% ™Pod Systems MRO uRotary Wing Fixed Wing 40% 20% 0% 2013 2014(E) 2015(E) CPL “e
Slide 27: Revenue Breakdown: Commercial
evenue Breakdown: Commercial 100% 1% 15% 80% 4% bole 10% | Gov. Commercial LCA Light Business w me Rotary 57% Large Business 20% 0% 2013 2014(E) 2015(E) 27
Slide 28: Investment Conclusion
nvestment Conclusion + Revenue: Projected to be $83.5 million to $85.0 million + 10% higher product shipments planned + EBITDA: Projected to be $11.3 million to $11.8 million + Net Income: Projected to be $6.6 million to $7.0 million + Expected cash flow from operations of $1M to $1.25M + Highest re
Slide 29: CPI Aerostructures
CPI Aerostructures Vincent Palazzolo, CFO (631) 586-5200 Investor Relations Counsel aS THE Lena Cati ie BOUT GROUP (212) 836-961
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