Cpi Aerostructures, Inc. · AMEX:CVU
Cpi Aerostructures — Q2 2015 Earnings Presentation
24 slides from Cpi Aerostructures's earnings presentation, Aug 6, 2015
Slide 1: Q2'2015 Results Presentation
A Premier Supplier of Aircraft Structures and Systems NYSE MKT: CVU Q2’2015 Results Presentation August 6, 2015 Speakers: Douglas McCrosson , President & Chief Executive Officer Vincent Palazzolo, Chief Financial Officer
Slide 2: Forward Looking Statements
Forward Looking Statements 2 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,
Slide 3: Speaker Recent Highlights
Speaker Recent Highlights Douglas McCrosson President & Chief Executive Officer 3
Slide 4: Recent Business Highlights
Recent Business Highlights 4 Up $43M Up $5M Record Backlog $446.6 Million At 6/30/15 vs. 12/31/14 New Awards $24.2 Million Through 6 /30/15 vs. same period of ‘14 Improved Financial Performance • 2Q15 EPS of $0.12 compared to a loss of $3.50 per diluted share in 2Q14 • Expect s equential 2015 quarte
Slide 5: Speaker Financial Highlights
Speaker Financial Highlights Vincent Palazzolo Chief Financial Officer 5
Slide 6: Recent Financial Highlights
Recent Financial Highlights 6 For the 3M Ended June 30, For the 6M Ended June 30, 2015 2014 2015 2014 (Unaudited) (Unaudited) Revenue $21,944,320 $(23,751,623) $41,820,886 $(1,868,106) Cost of sales 18,095,951 19,211,531 34,370,446 36,603,916 Gross profit (loss) 3,848,369 (42,963,154) 7,450,440 (38,
Slide 7: 6M 2015 Revenue by Program
6M 2015 Revenue by Program 7 Defense Programs : $ 22 . 0 Million of which $ 21 . 7 million was from Tier 1 military subcontracts with OEMS and $ 0 . 3 million was from government prime contracts . 47% 53% Commercial Programs : $19.8 Million mainly related to our Gulfstream, Embraer, Honda programs.
Slide 8: 6M 2015 Gross Margin
6M 2015 Gross Margin 8 17 . 8 % in 6 M 2015 vs . negative margin in 6 M 2014 Affected by the change in estimate to the A - 10 program as we continued to record revenue on the A - 10 with zero gross margin Excluding the effect of the A - 10 Program 23.4% in 6M 2015 vs. 20.3% in 6M 2014 Over 300 basis
Slide 9: 2015: Record Year in Terms of Revenue
2015: Record Year in Terms of Revenue 9 * Performance for the second half of the year expected to be much stronger than the first half due to the timing of delivery orders associated with the several recently announced major programs. • $92.0M – $102.0M Revenue • 19% - 21%... lower than historical m
Slide 10: Revenue Breakdown: by Market
Revenue Breakdown: by Market Commercial 38% Military 62% 2015 Revenue (Guidance) $92.0M - $102.0M Military/commercial split effected by recent military contract wins 10 Military Strong revenue driven by recent wins Commercial Remains flat as the majority of new business wins in 2014 were for militar
Slide 11: Revenue Breakdown: by Subcontractor Role
Revenue Breakdown: by Subcontractor Role Tier 1 82% Tier 2 15% Prime 3% 2015 Revenue (Guidance) $92.0M - $102.0M 11 Prime More than doubles due to recent wins Tier 1 Double digit growth Tier 2 Slight decline due to G650
Slide 12: Revenue Breakdown: by Category
Revenue Breakdown: by Category 2015 Revenue (Guidance) $92.0M - $102.0M Non - Aerostructures business expected to increase to 44% of total revenue 12 Kitting & SCM Over 70% growth fueled by recent prime contract wins with DOD Aerostructures 59% Aerosystems 6% Kitting & SCM 35%
Slide 13: 2015 Financial Initiatives
2015 Financial Initiatives Strengthen Financial Position Invest in Automation & Robotics Generate Positive Cash Flow from Operations Further Reduce Overhead & SG&A Expenses Expect to continue to pay down debt and reduce interest expense Investments anticipated to favorably impact operating efficienc
Slide 14: Capital / Investments
Capital / Investments Capital • Received approx. $8.1 million tax refunds related to the profit adjustment made to A - 10 WRP in 2014. • Expect our cash flow to sequentially improve the last two quarters of the year; to generate more than $6.1 million in cash from operations in the second half of 20
Slide 15: Speaker Backlog, Recent Programs, Bids and Market Update
Speaker Backlog, Recent Programs, Bids and Market Update Douglas McCrosson President & Chief Executive Officer 15
Slide 16: Record Backlog
Funded 29% / Unfunded 71% $130.6M $316.0M Funded Unfunded Unfunded backlog represents remaining potential value of long term agreements Defense 70% / Commercial 30% $314.0M $132.6M Military Aerospace Commercial Record Backlog Consolidated Backlog at 6/30/2015 – $446.6 Million 16
Slide 17: Long-Term Visibility - Contracts
Long - Term Visibility - Contracts (as of 6/30/15) Firm, Funded Contracts Provide Long - Term Revenue Visibility and Operating Leverage NORTHROP GRUMMAN - for the E - 2D and C - 2A aircraft TRIUMPH GROUP - for the Gulfstream G650 business jet SIKORSKY - for the S - 92® helicopter HONDA AIRCRAFT - fo
Slide 18: Recent Program Highlights
Recent Program Highlights Customer Milestones o Extended E2/C2 OWP Kits requirements through 2019 o Concluded an order for additional 10 s/s of E2D seats o Added new funded backlog of $63.6 million during 4Q’14 o Received a follow on order of (5) ALMDS Pods for delivery through 2016 o Ramped up deli
Slide 19: Bid Pipeline
Bid Pipeline (8/1/15) Military vs Commercial 72% 28% Commercial Military By Position Within the Supply Chain Defense opportunities increasing Expect near - term acceleration of Tier 2 opportunities for large c ommercial 91% 6% 3% Tier 1 Tier 2 Prime 19
Slide 20: Bid Landscape
Bid Landscape Boeing 787 Dreamliner Bombardier C - series Boeing 767 Embraer E2 20
Slide 21: Focus Areas: 2015 and 2016
Focus Areas: 2015 and 2016 EXECUTE Maintain and grow Tier 1 status Continuously improve delivery , quality and performance Improve margins Improve cash flow GROW Continued investment in automation and productivity Replace retired program revenues with additional new long - term programs Focus on org
Slide 22: Conclusion
Conclusion CPI is well positioned to continue to grow its business due to: • Large, diversified and growing backlog • Growing bid pipeline – new opportunities for both the defense and commercial markets • Ability to perform on larger and more complex programs due to investments in advanced technolog
Slide 23: Q&A
Q&A Q&A Session Douglas McCrosson President & Chief Executive Officer Vincent Palazzolo Chief Financial Officer 23
Slide 24: Contact us
Contact us CPI Aerostructures Vincent Palazzolo, CFO (631) 586 - 5200 www.cpiaero.com Investor Relations Lena Cati (212) 836 - 9611 www.theequitygroup.com lcati@equityny.com 24